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4.19.3  IMF Automated Underreporter Program (Cont. 5)

4.19.3.20 
Taxpayer Responses

4.19.3.20.1 
Taxpayer Responses - Overview

4.19.3.20.1.1 
Controlling Responses

4.19.3.20.1.1.3  (09-01-2013)
Refiling Cases (Internal Process Code RF)

  1. Refile cases to the previous AUR suspense batch (except for Lost Case and all Unit Suspense type batches) using IPC "RF" .

    Note:

    If the suspense batch has aged (time frame expired/passed) a message displays "Invalid Process Code - Batch is aged" . Take necessary actions to issue a letter or move the case to the next phase.

    Caution:

    When entering an IRS RECD DATE for cases to be refiled, do not assign IPC RF, use the appropriate IPC 6S or 8S to ensure the system retains the entered IRS Received date.

4.19.3.20.1.2  (09-30-2012)
Abatement of Interest

  1. IRC 6404(e)(1) provides information for abatement of interest on deficiencies or payments of deficiencies attributable to any unreasonable error or delay by the Service in performing a ministerial or managerial act.

  2. A ministerial act is a procedural or mechanical action that does not involve the exercise of judgment or discretion, and that occurs during the processing of a TP's case after all prerequisites to the act have taken place.

  3. A managerial act is an administrative action that occurs during the processing of a TP's case and that involves the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel. Interest attributable to a general administrative decision, such as the Service's decision on how to organize the processing of tax returns, may not be abated.

  4. IRC 6404 also provides several exceptions to the IRC 6601 general requirement that interest be charged from the due date of the return until the balance due is paid in full. Annotate and route TP requests and claims for abatement of interest to the Interest Abatement Coordinator (IAC) for processing.

  5. Interest can also be abated if there was an IRS computational error. Interest cannot be abated for reasonable cause. An example of an error not needing an IAC are: An interest suspension period not given to the TP (i.e., Rev. Proc. 99-40).

4.19.3.20.1.3  (09-30-2014)
Accounts Receivable Guidelines

  1. Due to the adverse impact on Accounts Receivable (A/R), the Service must strive to minimize the volume of unresolved large dollar debit and credit modules/issues in the inventory. Therefore, in accordance with prevailing guidelines and in tandem with all other processing timeliness requirements (i.e., first in, first out, etc.), it is necessary to ensure that all modules/issues involving a balance of $100,000 and over are expeditiously resolved.

  2. When monitoring large dollar cases identified on the Large Dollar Accounts Receivable system, if cases include the Large Corporation code; contact the Technical Unit (or designated function) to determine the current status of the account/module.

  3. Most of the cases that meet the large dollar case criteria (the proposed assessment is $100,000 or more) are identified by the system (prior to the assessment being input) and the required special case processing initiated by the AUR Control Function.

  4. Cases not identified by AUR system checks (including fully agreed cases), the tax examiner should:

    1. Indicate "ARDI" on the case folder.

    2. Input a case note to make the case audit trail complete.

    3. Transfer the case to a locally designated UID for specialized processing.

    4. If necessary, issue an interim letter to the TP (i.e., following Action 61/Policy Statement P-21-3 guidelines).

  5. The Tax Examiners (TE) with the locally designated UIDs to work Accounts Receivable Dollar Inventory (ARDI) cases, take the following actions:

    1. Review the proposed assessment for technical and mathematical accuracy.

    2. Analyze the TP's account to ensure that all affected tax periods process appropriately.

    3. Verify that the payer information is accurate.

      Note:

      For disagreed cases, telephone contact with the TP MUST be made as part of the case resolution when a telephone number is available.

    4. Leave a case note to indicate the disposition of the case review.

    5. When the case evaluation is completed, take the appropriate case action (i.e., input the assessment, revise the proposal and issue a Recomputed Notice, or close the case No Change) using standard processing procedures.

  6. If the TP agrees to over $100,000 in tax, penalties, and interest, but does not full pay, then the deficiency needs to be assessed (23C date) within 30 days from receipt of the agreement. If a quick assessment is made, the interest computation must be mailed to the TP.

  7. If the case is being closed with an assessment of over $10 million dollars: photocopy the entire AUR case contents, make prints of the: Tax Account, Information Returns, Case Notes, Case History and CP 2000/CP 2501 Notices and send the copies/prints to the Chief Financial Office Staff at the following address:
    IRS
    CFO, Business Analysis and Support Section
    Stop S-2, 1035
    333 W. Pershing Rd
    Kansas City, MO 64108

    Reminder:

    Include a case note that the case information was sent to CFO.

4.19.3.20.1.4  (09-01-2012)
Accuracy-Related Penalties

  1. IRC 6751(b)(1) provides that, in general, no Accuracy-Related Penalties shall be assessed without prior written managerial approval. However, even though the Code refers to assessment, managerial approval is needed at the time the penalty is being asserted unless an exception in (2) and/or (3) below, apply.

  2. The AUR system electronically calculates the Accuracy Related penalties; therefore, a penalty notice may be issued in the initial letter to the TP proposing a deficiency for Substantial Understatement, if the TP did not attach evidence of substantial authority or attached unacceptable evidence to the tax return and did not make an adequate disclosure on that return. If the TP does not provide any explanation or excuse for the understatement in response to the notice or to a subsequent Statutory Notice of Deficiency, the Accuracy-Related penalty may be assessed without written managerial approval.

  3. The AUR system electronically calculates the Accuracy Related penalties; therefore, a penalty notice may be issued (in the initial letter to the TP proposing a deficiency) for negligent conduct when the determination is automatically made because the TP failed to report income reported on a third party IR for a second tax year. If the TP does not provide any explanation or excuse for the conduct in response to the notice or to a subsequent Statutory Notice of Deficiency, the accuracy-related penalty may be assessed without written managerial approval.

  4. In a case to which the exceptions in (2) or (3) above, initially applied, but for which the TP provides an explanation or excuse, written managerial approval is needed at the time the tax examiner determines to continue processing the case and issues a Letter 2626C explaining why the TP's request for penalty waiver was denied.

    Note:

    If a Recomputed CP 2000 is issued and the penalty waiver is denied, send PARAGRAPH 170. See IRM 4.19.3-7, CP PARAGRAPHS.

  5. Depending on the TP's response, the Accuracy-Related Penalty Due to Negligence or Disregard of Rules or Regulations and/or the Accuracy-Related Penalty Due to Substantial Understatement of Tax could be:

    • Assessed

    • Determined to be not applicable

    • Waived for reasonable cause, or

      Note:

      See IRM 4.19.3.16.7 (3) b, Determine Negligence Status Screen, if the penalty is being suppressed due to reasonable cause.

    • One penalty may be replaced by the other

    Use the Determine Negligent Status screen to indicate if the IR(s) are considered negligent. See IRM 4.19.3.16.7, Determine Negligence Status Screen, and IRM 4.19.7, IMF Automated Underreporter (AUR) Technical System Procedures - Penalties.

  6. If the TP's response claims/cites substantial authority, see IRM 4.19.3.16.5 (9), Accuracy-Related Penalty Due to Substantial Understatement of Tax.

  7. Waive the penalty if the TP provides a signed explanation that meets reasonable cause criteria. Consider ALL facts and circumstances of each case on an IR by IR basis in determining reasonable cause. Refer to IRM 20.1, Penalty Handbook, for uniform application of reasonable cause criteria. See IRM 20.1.1.3, Criteria for Relief From Penalties, in general.

  8. If reasonable cause is established for only some of the IRs, all additional taxes, tax credits, and prepayment credits must be allocated between the IRs with reasonable cause and those without.

  9. If a CP 2000 is issued and the substantial understatement penalty is waived, enter a zero (0) in the SUBSTANTIAL UNDERSTATEMENT PENALTY field on the Limit Penalty window.

    Note:

    See IRM 4.19.3.16.5 (11), Accuracy-Related Penalty Due to Substantial Understatement of Tax, if the penalty is being suppressed due to reasonable cause.

    Send PARAGRAPH 101, see IRM 4.19.3-7, CP PARAGRAPHS.

  10. The Limit Penalties window contains additional fields to track instances where the TP requests waiver of the Accuracy Related penalty due to Negligence or Substantial Underpayment and whether the request has been granted or denied. When the TP makes this request and the tax examiner determines:

    1. The request is granted, check the box next to the PENALTY WAIVED field in the Limit Penalties window.

      Note:

      Only check the box when the penalty is still applicable, but is being suppressed (see (9) above). Do not check the box if the penalty is no longer applicable (i.e., the case is being close No Change or the threshold for applying the penalty is no longer applicable).

    2. The request is denied or only partially waived, check the box next to the PENALTY NOT WAIVED field in the Limit Penalties window.

      Note:

      The NEGLIGENCE PENALTY or SUBSTANTIAL UNDERSTATEMENT PENALTY field must contain a value greater than zero in order to check the PENALTY NOT WAIVED field. Managerial approval is required when denying the TP's request. See (4) above.

4.19.3.20.1.5  (09-30-2014)
Action 61/Policy Statement P-21-3

  1. Action 61/Policy Statement P-21-3 are the result of a task force initiated to provide timely and quality responses to TP correspondence. The general guidelines are:

    1. A quality response is an accurate and professional communication which, based on information provided, resolves the TP's issues, requests additional information from the TP, or notifies the TP we have requested information from outside the IRS.

    2. A quality response is timely when initiated within 30 calendar days of the IRS received date.

    3. When a quality response cannot be issued timely, an interim response is initiated by the 30th calendar day from the IRS received date. Issue a Letter 4314C.

      Reminder:

      Ensure responses to AUR notices received after the AUR case is closed (AUR RECON cases) are worked on a first in, first out basis. Control the case on IDRS (or on AUR for TY 2005 and subsequent) with the IRS received date no later than 14 days from the AUR received date (and send an interim letter if the 30-day criteria outlined above cannot be met). See IRM 4.19.3.24, AUR Reconsideration Cases, for additional information about AUR RECON cases.

    4. All interim letters should inform the TP when a final response can be expected and should give a name/number to contact to resolve additional inquiries.

  2. The AUR system automatically generates a Letter 4314C when the most recent IRS Received Date ages beyond the Action 61 Age Date input by the AUR Coordinator.

4.19.3.20.1.6  (07-22-2015)
Address Updates

  1. When a TP contact includes clear and concise notification of an address change, including foreign address change, input the appropriate entries on the Update Address window to update Master File (use Address Type Code I). See IRM 4.19.7, IMF Automated Underreporter (AUR) Technical System Procedures - Updating Address Information.

    Exception:

    As the AUR system does not send updates to masterfile on closed cases, do not enter the address change in the Update Address window. Address updates on RECON cases must be input on IDRS. Updates for Address type Codes A1, A2, and P1 - P4 are still required to be input on AUR.

    • Information regarding state and address abbreviations, and Major City Codes can be found in Document 7475, State Abbreviations, Major City Codes and Address Abbreviations. Standard address abbreviations, state abbreviations and major city codes can also be found in IRM 3.24.37-5, State Codes for States, IRM 3.24.37-3, Major City Codes, and IRM 3.24.37-1, Standard Address Abbreviations.

    • Changes to a name line due to a spelling error can be input on AUR by selecting ADDRESS TYPE "N" (name line change), but must ALSO be input on IDRS.

  2. For certain notices, such as the Statutory Notice of Deficiency, the Internal Revenue Code provides that when the notice is sent to the TP's last known address (LKA), the notice is legally effective even if the TP never receives it.

    Note:

    As a point of reasonable diligence, if there is TP correspondence with a different address mail a copy of the Statutory Notice to that address, using the Address Update window to enter a Temporary Address, see (6) below. Do not update Master File without clear and concise notification from the TP.

  3. Contacts that are considered clear and concise notification of an address change include the following:

    1. The TP returns an IRS initiated correspondence (including notices) that solicits or requires a response to IRS with corrections marked on his/her address information. The TP's signature on the correspondence (for this purpose) is not required.

    2. A return (including an amended return, Form 1040X) filed by a TP with new address information. Update the Master File for address changes on any amended returns, including Form 1040X, that bypass normal pipeline processing and are processed as a response.

    3. Form 8822, Change of Address, when received in conjunction with an AUR case. Use the Address Update window with Address Type I to update the Master File.

    4. Oral notification made in response to an AUR notice which meets appropriate disclosure guidelines or if a TP is contacted by phone by an IRS employee in connection with the TP's account (not related to an address change). The TP may provide a change of address to the IRS employee who responded to the phone call or initiated the phone contact. See IRM 4.19.3.20.2, Telephone Responses, for additional information regarding telephone responses.

      Note:

      If the notification for an address update is made on a closed AUR case, the address update must be done using IDRS CC ENMOD.

      Caution:

      If the account is marked with a TC 971 AC 504 SPCL1 or EFAIL, there have been unsuccessful attempts to obtain an IP PIN. Use high risk disclosure procedures, see IRM 4.19.3.20.2.2, Disclosure, for additional information.

    5. Notification of an address change made by the U.S. Postal Service.

      Caution:

      Always verify the name on the Post Office notification with the name on the notice before updating the address.

      Note:

      A new address indicated as a return address on the envelope or in the letterhead of TP correspondence is not, by itself, clear and concise notification and is not sufficient to change a TP's address of record.

  4. Clear and concise notification, whether written or oral, must contain the following:

    1. The TP's full name.

      Note:

      Individuals who have changed last names should provide the last name shown on the most recently filed return and the new last name. Joint filers should provide both names.

    2. For written requests, the TP's signature (both signatures for jointly filed returns) or the signature of an authorized representative.

    3. For oral requests, successful completion of the disclosure notification when calling in reference to a CP notice.

      Note:

      An address change is made upon a TP's request, even if only one of the TPs from a joint return requested it.

      Caution:

      If either TP has established a separate residence after filing a joint return, the spouse who has moved from the joint return address, must provide clear and concise written or oral notification of a new address to the Service.

    4. The TP's new address.

    5. The TP's old address, unless you can determine it from the posted data. Do not request the old address from the TP.

    6. The TP's social security number (for joint filers, the social security numbers of both TPs).

  5. If any of the information from (3) or (4) above is missing from the TP's request, do not update Master File. Input the appropriate entries on the Update Address window to make a temporary address change (use Address Type "T" ). Send the appropriate letter/Notice to the TP, at the new address, using a Special Paragraph to advise him/her of the information needed. Enclose Form 8822, Change of Address.

  6. If the TP provides a temporary address, a beginning and ending date of when the TP will be using that address should be given. Input the temporary address on the Update Address window, using Address Type T. Do not update Master File. If the TP does not provide an ending date, input a date that is 60 days from the current date.

  7. Any time doubt exists as to whether an address should be changed, discuss it with your lead/manager who will either provide an answer or refer the question to the Disclosure Office.

  8. If a document is received containing a name or address change which does not meet the specific requirements for updating Master File, the information should be noted and maintained in the AUR case file. If a notice is returned, the Service is required to use due diligence in locating the TP, which includes a search of existing records to locate any updated information supplied by the TP.

4.19.3.20.1.7  (12-15-2015)
Adjustment Cases Relating to AUR

  1. Adjustment function frequently receives Form 1040X or correspondence from TPs who received AUR notices. Multiple assessments could result if both Adjustments and AUR simultaneously work these cases.

  2. To eliminate multiple assessments, Accounts Management will:

    1. Route cases related to an OPEN AUR case to AUR at the Campus that issued the notice. AUR will work these cases following normal AUR procedures.

    2. Work responses or Form 1040X related to a CLOSED AUR case as part of the subsequent adjustment or RECON process for prior AUR assessments. See IRM 21.3.1.4.55, Status of IMF Underreporter Cases, for additional information.

  3. Responses that deal with multiple tax years are treated as separate responses whenever feasible. In such instances, photocopy the response so each tax year has the appropriate response to resolve the case. Route copies of the responses that are non-AUR to Accounts Management.

    Exception:

    Coordinate Net Operating Losses (NOL) and carryback/carryforward (CB/CF) issues between Accounts Management and AUR. Exercise caution with regard to Statute of Limitations and payment of interest. The program redistribution may impact working cases with NOL and CB/CF issues.

  4. If it is evident from a TP response that the case involves a scrambled SSN or mixed entity, use the IAT “aMend” tool, research portion, to determine Scrambled SSN or Mixed Entity. If yes, prepare Form 4442 , for referral to AM and close PC 52, 71, or 92 or IPC 9R, as appropriate. See IRM 21.6.2, Individual Tax Returns, Adjusting TIN-Related Problems.

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

4.19.3.20.1.8  (08-26-2016)
Appeals

  1. If the TP makes a non-docketed appeals request (i.e., specifically requests a hearing with an Appeals Officer or submits a Form 12203, Request for Appeals Review), take the following actions:

    If And Then
    Prior to issuance of a Statutory Notice There are less than 365 days left on the ASED
    1. Attempt to resolve the issue(s) by telephone. Document the call(s) with a case note(s).

    2. Advise the TP (either verbally or using a Letter 2626C) that Appeals does not accept non-docketed cases when there are less than 365 days left on the statute.

    3. If the TP still wants to file a petition with the U.S. Tax Court, inform the TP that they will receive a Statutory Notice of Deficiency that will allow them to appeal their case to the U.S. Tax Court.

    4. Issue a Stat Notice to the TP.

    Prior to issuance of a Statutory Notice There are more than 365 days left on the ASED
    1. Attempt to resolve the issue(s) by telephone. Document the call(s) with a case note(s).

    2. If it is still necessary to transfer the case to Appeals, research the following website: http://appeals.web.irs.gov/APS/caserouting.htm. Select the Case Routing Addresses and Instructions link to access the Appeals Case Routing sharepoint site, and select the Spreadsheet Tool to launch the Case Routing Guide. Select Campus Source Exam for the Type of Case , and the appropriate Campus Location to find the appropriate Campus Appeals office based on the IRS Campus source of the case.

    3. Prepare a Form 3210, Document Transmittal. Print Tax Account, Information Returns, Case History, CP 2000 Notice, CP 2501 Notice, if applicable, and attach to Form 3210.

    4. Close the case with PC 66.

      Note:

      If Appeals denies the request and returns a case to AUR that was closed using PC 66, DO NOT manually control or initiate any further AUR actions. See IRM 4.19.3.24.10 (2) and (3), Document Disposition, if there is anything in the Appeals package that should be maintained as part of the case file.

    After the issuance of a Statutory Notice  
    1. Issue a Letter 2626C advising the TP that their request cannot be honored and that they need to follow the instructions in Statutory Notice they received and file a petition with the U. S. Tax Court within the period specified (usually 90 days).

      Note:

      If less than 30 days remains on the 90-day period, the tax examiner must attempt to contact the TP by telephone to advise him/her that their request has been denied. Leave a case note documenting the contact.

    2. Inform the TP that a case petitioned to the U.S. Tax Court will usually be considered for settlement by Appeals before their trial date.

    3. Continue processing, refiling the case as necessary for the remainder of the Statutory Notice suspense period or until you are notified to pull the case from suspense because the TP filed a U.S. Tax Court petition.

    Note:

    See IRM 4.19.3.1.2, Statute Awareness Program, for Statute guidelines. See IRM 4.19.3.20.2, Telephone Responses, for telephone procedures. If the case also involves Innocent Spouse related issues, see IRM 4.19.3.20.1.20.2, Innocent Spouse Relief Cases - AUR IS Coordinator Instructions.

    Note:

    DO NOT USE PC 80 FOR NON-DOCKETED CASES.

  2. Communications between AUR and Appeals regarding ministerial, administrative or procedural matters at any stage of a case are permissible without involving the TP/representative. If communications between AUR and Appeals extend beyond ministerial, administrative or procedural matters in that the substance of proposed adjustments or issues of the case are addressed, those communications are prohibited unless the TP/representative is given an opportunity to participate. Refer to Rev. Proc. 2012-18, Ex Parte Communications Between Appeals and Other Internal Revenue Service Employees, (and IRM 4.2.7, Ex Parte Communications Procedures, or IRM 4.2, General Examining Procedures, as applicable) for additional information regarding ex parte communications with Appeals.

    Exception:

    Appeals may send the AUR Coordinator an Examination Assistance (EA) request for AUR technical advice if new information is received, the tax increase is $5,000 or more and the time needed for Appeals to review the information is more than four hours. Appeals retains jurisdiction over docketed cases and is responsible for any revised tax computations and any required TP contact.

  3. Communications between AUR and Appeals are referred to as ex parte and are covered in sections 2.02(6) and 2.03(3) of Revenue Procedure 2012-18, Ex Parte Communications Between Appeals and Other Internal Revenue Service Employees, and IRM 4.2.7, Ex Parte Communications Procedures, or IRM 4.2, General Examining Procedures, as applicable.

    1. Communications that address the strengths and weaknesses of the issues and positions of the parties, accuracy of the facts, credibility or cooperation of the TP, etc. are prohibited unless the information communicated has been shared with the TP.

    2. Communications between AUR and Appeals that relate to ministerial, administrative or procedural matters are permissible.

  4. If the TP's response indicates "qualified offer" or mentions "IRC 7430(g)" see IRM 4.19.3.20.1 (3), Taxpayer Responses Overview, for additional information.

    Caution:

    Do not confuse Qualified Offer with Offer in Compromise.

4.19.3.20.1.8.1  (08-26-2016)
Docketed Cases

  1. When the TP files a petition with the U.S. Tax Court, the newly docketed Tax Court cases are uploaded to the Tax Litigation Counsel Automatic Tracking System (TLCATS) New Docketed Case listing.

  2. The Clerical Function is responsible for monitoring the daily TLCATS listing and preparing identified cases for transfer to Appeals.

  3. If the case is MFJ, refer to IRM 4.19.3.20.1.8.1.1, Responses – Petitioning Spouse (PS) and Non-petitioning Spouse (NPS) - Docketed Cases, for additional information.

  4. If non-statutory items are an issue, a partial assessment on AUR or IDRS is required for the following items before transferring the docketed case to Appeals:

    • W/H, see (5) below

    • Excess SSTAX, see (5) below

    • Additional Medicare Tax withheld, see (5) below

    • Additional Medicare tax on wages or RRTA compensation, see (6) below

    • FICA tax on tip income and tip penalty under IRC 6652(b), see (6) below

    • FICA tax on other income (i.e., NEC), see (6) below

    • Shared Responsibility Payment (SRP), see (7) below

  5. If W/H, excess SSTAX, Additional Medicare Tax withheld is the issue:

    1. Input the assessment, using the IAT "REQ54" tool, for the credit adjustment, NOT the tax and use the appropriate HC.

    2. Send the TP a Letter 2626C, using the IAT "Letters" tool, explaining the partial assessment and advise them that the remaining issues will be addressed as part of the docketed case process. Include a copy of the letter in the case file.

    3. Leave a case note documenting the actions taken.

    4. Input PC 80 and release the case.

  6. If FICA tax, SS Tip tax or Additional Medicare tax on wages or RRTA compensation is an issue:

    1. Input the assessment, using the IAT REQ54 tool, with a TC 290 and the appropriate reference number, blocking series 05 and the appropriate HC. The hold code is released when the next TC 290 posts.

    2. Send the TP a Letter 2626C , using the IAT Letters tool, explaining the partial assessment and advise them that the remaining issues will be addressed as part of the docketed case process. Include a copy of the letter in the case file.

    3. Leave a case note documenting the actions taken.

    4. Input PC 80.

  7. If there is a change to SRP, follow established procedures to ensure the adjustment is input on MFT 35 and the taxpayer is notified of the partial assessment.

4.19.3.20.1.8.1.1  (08-26-2016)
Responses – Petitioning Spouse (PS) and Non-petitioning Spouse (NPS) - Docketed Cases

  1. Married Filing Joint (MFJ) docketed cases require research to determine if:

    Caution:

    These procedures are for paper case responses ONLY. If during a telephone call it is determined that an action is needed (i.e., letter, revised notice, assessment, No Change closure) on a case in BT 89004/89005/89006, check the action required box and leave a DETAILED case note explaining the action(s) needed (if the case is controlled at your campus follow local procedures to route detailed instructions for the required action(s) to the appropriate individual/unit). If the TP indicates agreement with the notice, instruct the TP to sign, date, and return the consent to tax increase, or, refer the TP to the consent page of the notice which provides complete information.

    • both taxpayers’ names are reflected on the petition, or

    • both taxpayers filed their own petition, or

    • only one taxpayer filed a petition.


    Perform the research as follows:

    1. Access the U.S. Tax Court Website at ustaxcourt.gov.

    2. Click on the tab titled "Docket Inquiry" .

    3. Select either Docket Number or Individual Party Name.

    4. Enter the required information to access the case.

    5. Once accessed, view the petition and/or party’s names. If only one taxpayer name is reflected on the petition, refer to (2) – (11) below. If both taxpayer names are reflected or both taxpayers filed a separate petition, continue normal processing; see IRM 4.19.3.20.1.8.1, Docketed Cases, for additional information.

      Note:

      If after clicking on the docket number the petition is not available to view, click on "Go to" , which appears right above where the docket number was clicked, then select "Parties" .

  2. A non-petitioning spouse (NPS) case occurs on a MFJ account when ONLY one taxpayer files a petition with the Tax Court. A MFT 31 module must be established on the non-petitioning taxpayer. The petitioning spouse’s (PS) case is referred to Appeals.

  3. ) A MFT 31 module is established for the NPS by accessing IDRS CC TXMODA from the MFT 30 primary account. Complete the IAT "REQ 77" ” tool fields as follows:

    Note:

    The SSN, MFT, tax period, and name control will populate from CC TXMODA.

    1. TC: Input "971" .

    2. TRANS-DT: Date of TC 971 input.

    3. TC971/151-CD: Input "103" .

    4. XREF-TIN: Input NPS SSN.

    5. Leave remarks: e.g., "NPS MFT 31" .

      Note:

      The TC971 AC 103 generally posts within 2 weeks after input. Appeals will establish the MFT 31 for the PS and input the TC971/AC 110 for both taxpayers.

  4. If non-statutory items are NOT an issue, refer to (8) below. If non-statutory items are an issue, a partial assessment on the MFT 30 module on IDRS is required for the following items before transferring the docketed case to Appeals:

    • W/H, see (5) below

    • Excess SSTAX, see (5) below

    • Additional Medicare Tax withheld, see (5) below

    • Additional Medicare tax on wages or RRTA compensation, see (6) below

    • FICA tax on tip income and tip penalty under IRC 6652(b), see (6) below

    • FICA tax on other income (i.e., NEC), see (6) below

    • Shared Responsibility Payment (SRP), see (7) below

  5. If W/H, excess SSTAX, Additional Medicare Tax withheld, is the issue:

    1. Input the assessment, using the IAT "REQ54" tool, for the credit adjustment, NOT the tax and use HC 2.

    2. Send the TP a Letter 2626C, explaining the partial assessment and advise them that the remaining issues will be addressed as part of the docketed case process and/or once the timeframe to file a petition with the United States Tax Court expires, if it is decided to do so. Include a copy of the letter in the case file.

      Note:

      No other AUR correspondence will be issued to the PS.

  6. If FICA tax, SS Tip tax, Additional Medicare tax on wages or RRTA compensation is an issue:

    1. Input the assessment, using the IAT" REQ54" tool, with a TC 290 and the appropriate reference number, blocking series "05" and HC 2. The hold code is released when the next TC 290 posts.

    2. Send the TP a Letter 2626C, explaining the partial assessment and advise them that the remaining issues will be addressed as part of the docketed case process and/or once the timeframe to file a petition with the United States Tax Court expires, if it is decided to do so. Include a copy of the letter in the case file.

      Note:

      No other AUR correspondence will be issued to the PS.

    3. Leave a case note documenting the actions taken.

  7. If there is a change to SRP, follow established procedures to ensure the adjustment is input on MFT 35 and the taxpayer is notified of the partial assessment.

  8. Take the following actions on the NPS:

    1. Input the address of the NPS taxpayer on the Update Address window using Address Type "T" , and an end date that is 365 days from the current date. Edit the first name line to reflect only the NPS taxpayer’s name.

    2. Issue Letter 2626C to ONLY the NPS (address type "T" ) to obtain a signed consent, advise they are jointly and separately liable for the tax and that the letter doesn’t extend the time period to file a petition with Tax Court, if he/she chooses to do so.

    3. Prepare a duplicate case file for the NPS containing photocopies of all case contents. The duplicate file will be retained in AUR.

  9. Prepare Form 3210, Document Transmittal, for the PS and include the following information on the form:

    • Remarks: "This is a non-petitioning spouse case. AUR retained a duplicate case file for the non-petitioning spouse awaiting the conclusion of the 90 day suspense period. AUR will assess the NPS when an agreement is received or when defaulted. After assessing the NPS case, AUR will forward the assessment documents and duplicate case file to your office."

    • Petitioning spouse’s name and TIN

    • Non-petitioning spouse’s name and TIN

    • Default date of the Stat notice

      Note:

      Original correspondence will be included in the PS referral package sent to Appeals.

  10. Leave a detailed case note to indicate which taxpayer filed a petition; i.e., primary TP petitioned, input IPC S8 and release the case to move the case to BT 89006.

  11. Use the batch listing for batch 89006 or Agree/Non-Agree and Docketed Appeals (NPS) Suspense Inventory Report, to monitor the NPS case to await expiration of the STAT suspense timeframe (default). Once expired, request the case.

  12. If a response is received from the NPS and additional correspondence or a recomputed notice is necessary, take the following actions:

    If Then
    Additional correspondence is necessary
    1. Input/verify the address of the NPS taxpayer on the Update Address window (Address Type "T" and an end date that is 365 days from the current date). Edit/verify the first name line reflects only the NPS taxpayer’s name.

    2. Issue Letter 2626C to ONLY the NPS to address response issue(s), advise TP both spouses are jointly and separately liable for the tax; and that the letter doesn’t extend the time period to file a petition with Tax Court, if he/she chooses to do so.

    3. Input IPC S8 (Stat) and release case; case is moved to BT 89006.

    A recomputed notice is required (suspense timeframe NOT expired)
    1. Input/verify the address of the NPS taxpayer on the Update Address window (Address Type T and an end date that is 365 days from the current date). Edit/verify the first name line reflects only the NPS taxpayer’s name.

    2. Rework the case following normal processing procedures.

    3. Input PC 95 and release the case.

    4. Monitor the case for the PC to post. Once posted, request the case.

    5. Input IPC S8 (Stat) and release case; case is moved to BT 89006.

    Note:

    Do not input agreed or default assessments; i.e., PC 87, 88, 90, or SR, until further notice.

  13. If a response is received from the PS, forward to Appeals.

  14. If the NPS later files a separate petition, prepare Form 3210, Document Transmittal, for the NPS and include the following information on the form:

    • Remarks: "This is the duplicate file for a non-petitioning spouse case. The NPS has now filed a petition. The PS spouse case file was sent to Appeals on (date)."

    • Petitioning spouse’s name and TIN

    • Non-petitioning spouse’s name and TIN

  15. If information provided allows the case to be closed no change, close the NPS case using PC 92 and issue Letter 1802C to inform the NPS that the case was closed no change. Prepare Form 3210, Document Transmittal and include the following information on the form:

    • Remarks: "This is the duplicate file for a non-petitioning spouse case. The NPS provided information that allowed the case to be closed no change. The PS spouse case file was sent to Appeals on (date)."

    • Petitioning spouse’s name and TIN

    • Non-petitioning spouse’s name and TIN

4.19.3.20.1.9  (09-30-2014)
Backup Withholding (BWH)

  1. The BWH status will not update unless an assessment was made and the change to the AGI includes the income types listed in paragraph (2) below.

  2. BWH applies primarily to income reported on forms in the 1099 series. A TP who fails to report interest, dividend, or patronage dividend income is subject to BWH prior to payment. The backup withholding rate is 28 percent for payments made after December 31, 2002.

  3. The following indicators are input on the Master File to reflect the TP's BWH status and display on the Tax Account screen in the BACKUP W/H field:

    • 0 - No BWH consideration

    • 1 - Potentially liable

    • 2 - Subject to BWH

    • 4 - BWH satisfied/manual stop

    • 8 - Suspended

    • M - Multiple periods

  4. When the TP submits additional information (i.e., a second reply after the case is closed) and indicates they are no longer subject to BWH, take the following action:

    1. Prepare Form 4442.

    2. Attach a copy of the response to the Form 4442.

    3. Send the Form 4442 to Collection Branch at Kansas City (W&I) or Philadelphia (SBSE). See (6) - (8) below for addresses.

    4. Send the TP a Special Paragraph to inform them the response will be reviewed and he/she will be notified of the decision.

  5. When the TP calls and provides additional information after the case is closed, and indicates they are no longer subject to BWH, take the following action:

    1. Prepare Form 4442, list in detail the information provided to indicate no underreporting exists or has been corrected.

    2. Send the completed Form 4442 to Collection Branch at Kansas City (W& I) or Philadelphia (SBSE). See (6) - (8) below for addresses.

    3. Inform the TP the response will be reviewed and he/she will be notified of the decision.

  6. For W&I campuses send the Form 4442 or Correspondence to:
    Internal Revenue Service
    Stop 5000 P-4
    333 W. Pershing Road
    Kansas City, MO 64108-4302

  7. For SB/SE campuses send the Form 4442 or Correspondence to:
    Internal Revenue Service
    Mail Stop 4-N-31.142
    2970 Market St.
    Philadelphia, PA 19104

  8. For International SBSE BWH issues, send the Form 4442 or Correspondence to:
    Internal Revenue Service
    Mail Stop 4-N-31.143
    2970 Market St.
    Philadelphia, PA 19104

4.19.3.20.1.10  (09-01-2012)
Bankruptcy Procedures - Responses

  1. Once the TP has been contacted by AUR and there is an indication that the TP has filed bankruptcy or the TP states that he/she has filed for bankruptcy, see IRM 4.19.3.20.1.10.1, Bankruptcy Procedures - Tax Examiner Instructions, for further instructions.

  2. The following Freeze Codes and/or Transaction Codes, present on the Tax Account screen indicates that the TP filed for Bankruptcy:

    • Freeze Code "-V"

    • Freeze Code "-W" and an unreversed TC 520 with cc 81 or cc 84 only

  3. An unreversed TC 604 may be an indication that the TP has filed bankruptcy, see IRM 4.19.3.20.1.10.2, Bankruptcy Procedures- AUR Bankruptcy Coordinator Instructions, for additional information.

4.19.3.20.1.10.1  (09-01-2013)
Bankruptcy Procedures-Tax Examiner Instructions

  1. If the TP states Bankruptcy was filed (or there is an indication of bankruptcy on the Tax Account), transfer the case to the local AUR Bankruptcy Coordinator when:

    1. The TP’s response does not result in either a No Change or Agree/Partial Agree or

    2. TC 604 is present on the Tax Account screen and an assessment (other than TC 290-0) is required

  2. If the TP states BANKRUPTCY was filed (or there is an indication of bankruptcy on the Tax Account), the case can be closed as a No Change or Agree/Partial Agree and TC 604 is not present:

    1. Close the case with the appropriate PC.

    2. Provide the local AUR Bankruptcy Coordinator with a print of the Case History screen showing the closing PC.

  3. Do not transfer cases to the local AUR Bankruptcy coordinator when the TP states Bankruptcy or there are bankruptcy indicators present and DBTCN is the only issue. See IRM 4.19.3.20.3.16, Cancellation of Debt, for further information to resolve the DBTCN issue(s).

    Note:

    If closing the case as No Change or Agree/Partial Agree, provide the local AUR Bankruptcy Coordinator with a print of the Case History screen showing the closing PC.

4.19.3.20.1.10.2  (09-04-2015)
Bankruptcy Procedures- AUR Bankruptcy Coordinator Instructions

  1. If, based on the instructions in this section, contact with insolvency is required go to http://serp.enterprise.irs.gov/databases/who-where.dr/inslvncy-bnkrptcy/national_insolvency_field.htm to obtain the phone number.

  2. Tax examiners transfer cases with bankruptcy indicators (including TP statements that bankruptcy has been filed without the presence of bankruptcy indicators on Tax Account) when:

    1. The response does not result in either a no change or agree/partial agree closing and/or

    2. TC 604 is present on the Tax Account screen and an assessment is required.

      Caution:

      If the TC 604 is due to reasons other than Bankruptcy or Innocent Spouse, close with the appropriate PC (71 for CP 2000 or 96 for Stat) and assess on MFT 31 accounts. If the case is closed with a PC 71 leave a case note indicating that the closure is not a "No Change" .

    Note:

    If the TP’s response results in an assessment and TC 604 is present on the Tax Account screen, post the assessment on the appropriate existing MFT 31 account(s) or contact the Centralized Insolvency Operation to request a temporary reversal of the TC 604 if MFT 31 account(s) have not been established.

  3. When a TC 604 and TC 971 AC 031 due to Bankruptcy are present, contact the Centralized Insolvency Operation (CIO) to obtain approval to adjust the account. Request CIO reverse the TC 971 AC 031.

    Note:

    If the TC 604 is due to reasons other than Bankruptcy or Innocent Spouse, contact the appropriate Collections Office to request a temporary reversal of the TC 604 if MFT 31 account(s) have not been established. If the MFT 31 account is established, close case with PC 71 for CP 2000 or PC 96 for Stat and assess on the MFT 31 account. When closing a case with PC 71, leave a case note indicating the closure is not a No Change.

  4. If the TP states Bankruptcy was filed, does not provide bankruptcy paperwork and there are no bankruptcy indicators on Tax Account screen, research AIS (Automated Insolvency System) and/or PACER (Public Access Court Electronic Records) to determine if a bankruptcy petition was filed.

    1. If there is no indication that a bankruptcy petition was filed, issue a Letter 2626C. Advise the TP to address the AUR issues and provide a copy of the bankruptcy petition.

    2. If there is an indication that a bankruptcy petition was filed, determine whether the AUR issues are pre-petition or post-petition.

    Note:

    If the bankruptcy was filed before December 31st of the AUR tax year, the AUR issues are considered post-petition. For example, if the TP files for bankruptcy on 07/28/14, any issues raised on a TY 2014 CP 2000 Notice are considered post-petition.

  5. If the AUR tax year is post-petition:

    1. Contact the appropriate Insolvency office within 48 hours and advise them of the status of the AUR case in order for them to determine if a Proof of Claim should be filed.

    2. Leave AUR case note(s) to document contact with Insolvency. Leave case notes on AIS as appropriate.

    3. Continue normal AUR processing.

  6. When the AUR tax year is pre-petition and

    1. The proposed AUR balance due is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Contact Insolvency and advise them of the action taken. Leave AUR case note(s) to document contact with Insolvency. Leave case notes on AIS as appropriate.

      Exception:

      If the TP’s response acknowledges/indicates that the AUR liability has been added to the Proof of Claim (POC), issue a Letter 2626C to request signature on the consent to tax and continue processing. If a signature is not secured, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Contact Insolvency and advise them of the action taken. Leave AUR case note(s) to document contact with Insolvency. Leave case notes on AIS as appropriate.

      Note:

      When working BT 84 if full payment has been received and case is in CP 2000 phase, follow agreed procedures. If a Statutory Notice has been issued send a Letter 2626C to obtain the TPs signature. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Caution:

      If the return is Virtual and there is no information (loose forms, schedules or correspondence), to be associated with the refile DLN, enter "N" in the SOURCE DOC field in the Process Code window.

    2. The proposed AUR balance due is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , contact the appropriate Insolvency office within 48 hours and advise them of the status of the AUR case in order for them to determine if a Proof of Claim should be filed. Leave AUR case note(s) to document contact with Insolvency. Leave case notes on AIS as appropriate.

    3. The TP has made any payments, issue a Letter 2626C on IDRS, to obtain the TP’s signature. Send a Special Paragraph using the following verbiage as an example: "We have received full payment or partial payment from you regarding [the notice of deficiency or Letter XXX] regarding income tax year XXXX. However, while you are in bankruptcy, we need to honor the bankruptcy automatic stay that is in place until your bankruptcy has been closed, discharged or dismissed. Your payment appears to indicate that you may agree to the proposed changes on your tax return. If this is true, please sign and return the consent form below. If you filed a joint return, both spouses must sign."

      Note:

      Payments made by the Bankruptcy trustee are posted as either a TC 670 or 680 with designated payment code(DPC) 03 or TC 690 with DPC 11.

    4. The TP has not made any payments, issue a Letter 2626C, using the IAT "Letters" tool. Send a Special Paragraph using the following verbiage as an example: "Although you are currently in bankruptcy and the bankruptcy automatic stay is in place until your bankruptcy has been closed, discharged or dismissed, we require additional information to indicate your agreement or disagreement regarding the proposed changes. If you disagree, please provide an explanation. If you agree, please sign the notice and return it for processing. You may be able to pay the amount owed through your bankruptcy. Please refer to IRS Publication 908 for additional information."

  7. Insolvency contacts the local AUR Bankruptcy Coordinator when they identify impacted account(s) through the AIS system and a TC 922 is present, to request information to assist them in establishing or updating the Proof of Claim. The AUR Bankruptcy Coordinator will provide the proposed tax deficiency and any other requested information within 48 hours of contact. Leave AUR case note(s) to document contact with Insolvency. Leave case notes on AIS as appropriate.

    1. If the Insolvency contact occurs before a notice has been issued (i.e., during screening phase), or on a pre-petition case after a notice has been issued, and the proposed amount due is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ advise Insolvency ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. If Insolvency informs AUR they are requesting a signed consent to tax from the TP, suspend the case for 45 days. If the suspense time frame expires and Insolvency was unable to obtain a signed consent ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Advise Insolvency of the action taken. Leave case notes on AUR to document the call. Leave case notes on AIS as appropriate.

  8. Field Insolvency/Bankruptcy Contact phone and fax numbers are maintained on SERP and updated frequently. If technical assistance from Insolvency/Technical Services is needed with the more complicated cases during any stage of the Bankruptcy process, contact the appropriate Insolvency/Technical Services (per AIS) for guidance.

  9. Contact Centralized Insolvency by sending request to *CIO Issues when mirroring is needed. Contact CIO either by phone or fax (≡ ≡ ≡ ≡ ≡ ≡ ≡ ) when the conditions in a or b below are present. Use the following link to obtain the phone number, http://serp.enterprise.irs.gov/databases/who-where.dr/inslvncy-bnkrptcy/national_insolvency_field.htm. Click on the state in question listed in the Table. A list of Internal Use Only phone number displays.

    1. A TC 520 and/or freeze condition is not present but there is an indication of an open bankruptcy filing.

    2. Clarification or guidance from Insolvency is necessary.

      Note:

      The most common reasons a TC 520 or freeze condition is not present, even though the TP has filed bankruptcy, are: the Service was not listed as a creditor when the bankruptcy was originally filed or there were no balances due when notice of filing was received.

  10. If information needs to be mailed to Insolvency, send the information to the following address:

    P.O. Box 7346

    Philadelphia, PA 19101-7346

    or for overnight

    2970 Market Street

    Stop 5-Q30.133

    Philadelphia, PA 19104-5016

  11. Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) included stay limitations when more than one bankruptcy petition is filed within 12 months of the previous dismissal. If AIS or PACER reflects a subsequent bankruptcy filing (serial filer case) and the previous case was dismissed, contact Insolvency to request the status of the automatic stay as follows:

    1. If the case is assigned to the Centralized Insolvency Operation (CIO) on AIS, contact CIO. Contact information can be found on the SERP Who/Where tab (http://serp.enterprise.irs.gov/databases/who-where.dr/inslvncy-bnkrptcy/national_insolvency_field.htm). Select the state which the bankruptcy was filed, the number is listed in the "POTENTIAL STAY VIOLATIONS" section. These cases are identified by 85000 in the Org1 field on the Taxpayer screen on AIS. The CIO will refer the case to the appropriate Field Insolvency caseworker based on the Case Assignment Tool.

    2. If the case is assigned to Field Insolvency, contact the assigned caseworker directly. These cases are identified by 26000 or 27000 in the Org1 field on the Taxpayer screen on AIS.

      Note:

      If the sequential filing(s) are deemed by the court to not be in good faith, the automatic stay may terminate 30 days after the petition was filed or may not arise at all. PACER and/or AIS generally does not contain a history item stating the stay is or is not in place and, depending on the court, there may be no order granting a motion to indicate the stay is or is not in effect. If the AUR Bankruptcy Coordinator has concerns with the information provided by Insolvency, elevate the issue to the caseworker's manager.

  12. If the TP provides a subsequent response(s), that reduces the proposed AUR balance due (including closing the case a No Change), contact Insolvency and advise them of the change in status so the proof of claim can be adjusted accordingly. Leave AUR case note(s) to document contact with Insolvency. Leave case notes on AIS as appropriate.

    Note:

    Do not issue a recomputed notice when the TP has provided an acceptable explanation for one or more of the IRs and the proposed amount due is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Contact Insolvency and advise them of the action taken. Leave AUR case notes to document contact with Insolvency. Leave AIS case notes as appropriate.

  13. The AUR Bankruptcy Status listing is available to assist the local AUR Bankruptcy Coordinator identify and manage Bankruptcy inventory cases. This report provides a listing of SSNs with bankruptcy indicators: "-V" , "-W" , and the current CSN of the case. Running a New Transaction Report for Batch Type 89001 will show indicators of recent changes in Bankruptcy status (ex: the posting of a TC 521).

    Note:

    These reports/listings are available to assist the AUR Bankruptcy Coordinator remain current with their inventory and MUST be reviewed on a weekly basis.

    1. Cases identified with bankruptcy indicators in pre-notice phase should be assigned and closed with PC 27.

    2. Cases identified with bankruptcy indicators after a notice has been issued should be reviewed to determine if the proposed amount due is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ If the proposed amount due is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ see c - e below.

    3. Review AIS/PACER for an indication of the automatic stay lifting; case is closed, dismissed, discharged or discharge was denied.

      Note:

      If the TP is in Chapter 11 bankruptcy, contact the Field Insolvency caseworker to determine if the automatic stay has been lifted.

    4. Determine if contact with Insolvency is necessary.

    5. Leave AUR case note(s) to document contact with Insolvency. Leave AIS case notes as appropriate.

    Note:

    The bankruptcy inventory is monitored from the date a case has been identified as a bankruptcy issue until the bankruptcy closes. The inventory MUST be reviewed once every month using AIS, PACER and IDRS for any changes made to the account.

    Note:

    All cases in inventory will have been issued a Statutory Notice of Deficiency. The Bankruptcy Coordinator will assess all non-statutory items prior to the Statutory Notice being issued.

  14. If a Statutory Notice has been issued and the TP has not replied, (i.e., the case is ready to assess by default), and bankruptcy indicators are present on the case, determine if the case is pre-petition or post-petition.

    1. If the case is post-petition, input PC 90 at the end of the Statutory Notice suspense period and contact Insolvency to advise that the assessment has been processed.

      Reminder:

      The automatic stay on post-petition cases does not suspend the timeframe for the TP to petition U.S. Tax Court. AUR will follow normal default processing procedures.

    2. If the case is pre-petition, the AUR case must remain in suspense. Input PC 98 to move the case to Bankruptcy Suspense Batch 89001. Monitor cases in BT 89001 on, at minimum, a monthly basis.

    Note:

    If a TC 604 and TC 971 AC 031 due to Bankruptcy are present on the Tax Account screen the assessment may have to be input on the MFT 31 modules on IDRS. Contact the Centralized Insolvency Operation for guidance.

    Reminder:

    Assignment of PC 98 to Employee cases will not move them to Batch 89001, they will remain in BT 92.

  15. The assessment by default cannot occur on pre-petition cases until the stay has been lifted and the TP has had the entire 90-day period, plus an additional 60 days, to petition U.S. Tax Court, as the automatic stay prevents the TP from filing a petition in Tax Court.

    Exception:

    Deficiencies in which the statutory period for petitioning the U.S. Tax Court has expired prior to the bankruptcy petition filing can be assessed even though the assessment may post to IDRS after the petition date.

    Example:

    The Statutory Notice was issued 11/12/2014, the time to petition U.S. Tax Court expired on 02/10/2015 and the TP filed bankruptcy on 03/01/2015. Since the TP had the entire 90-day petition period to petition the U.S. Tax Court and the timeframe expired, the proposed amount can be assessed by default.

    1. An assessment by default cannot be input without the Insolvency approval. If Insolvency approves of the assessment by default, document the approval in AUR Case Notes. Include the dismissal/discharge date as well as how the case was resolved and input the appropriate PC.

    2. The time to file a petition with U.S. Tax Court and the assessment statute for the deficiency is not suspended for the spouse who did not file bankruptcy. If the non-petitioning spouse does not timely file a tax Court petition, the deficiency must be assessed against the non-petitioning spouse prior to the ASED expiration.

  16. Generally, the automatic stay lifts on the earlier of the granting or denial of discharge, dismissal or closing of the case. Contact Insolvency to determine if the default assessment can be made during the suspense time when:

    • notification is received by Insolvency contact indicating the stay has been lifted

    • PACER research indicates the case has been closed, discharged or dismissed

    • IDRS update to AUR indicates the stay has been lifted (e.g., posting of TC 521 and TC 522)

    Recompute the ASED when needed.

  17. If the default assessment cannot be made prior to the AUR Tax Year archive date, at that time, close any remaining cases on the AUR system (PC 96) and establish an IDRS control base to continue monitoring.

  18. The TP's 90-day period for filing a U.S. Tax Court petition is suspended by the automatic stay and begins to run 61 days after the stay is lifted. For bankruptcies filed on or after October 17, 2005, the TP may file a petition in U. S. Tax Court challenging the Service's determination in a Statutory Notice for any taxable periods ending after the date the bankruptcy was filed. Therefore, neither the TP's 90-day period nor the ASED is suspended (for those tax years) even though the bankruptcy may still be ongoing.

  19. The important dates for determining ASED are the date the:

    • return was filed

    • bankruptcy petition was filed

    • Statutory Notice was issued and

    • automatic stay lifted

    Any questions regarding the ASED should be coordinated with Insolvency. For more information, see IRM 5.9.4.2, ASED/CSED.

    Reminder:

    The TP is allowed the full 90-day time period, plus an additional 60 days, to file a petition with the U.S. Tax Court. If the TP files a bankruptcy petition on the 75th day, the automatic stay is imposed with 15 days remaining on the TP’s 90-day time period. Once the stay terminates the TP has 60 days plus whatever time is left on the 90-day period (15 days) to file a petition with the U.S. Tax Court.

  20. Take necessary precautions to protect the ASED. See IRM 25.6, Statute of Limitations for additional information.

    Note:

    The ASED is suspended during the automatic stay plus 60 days beyond the day the stay is lifted under section 6503(a). Additional information may be found in Rev. Proc. 2003-80. Recomputation of ASEDs are identified and coordinated with Insolvency by the AUR Bankruptcy Coordinator.

  21. Bankruptcy Coordinators will identify cases that require mirroring and will contact CIO to request the mirroring process early on in the bankruptcy proceeding, prior to trustee payments being received whenever possible, to potentially avoid mirroring problems from occurring.

    1. Mirror cases when there is a jointly filed return, only one TP is in bankruptcy and the suspense period for the Statutory Notice has expired (ie: ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for TPs living outside the United States). In order to protect the statute, the assessment must be made on the non-petitioning spouses MFT 31 account prior to ASED expiration.

    2. Include Reason Code 138 on MFT 31 adjustments for jointly filed returns, when credits, TC codes 76x and/or 80x, should not be cross referenced to the other spouse’s MFT 31 tax account

  22. The Tax Court does not have jurisdiction over certain underpayments of tax/penalties and overstatements of payments/credits (non-statutory items). Therefore, when these underpayments/overstatements exist in a case, an assessment or adjustment will be made prior to ASED expiration (see (23) below). (IRC 31, IRC 6211 and IRC 6652(b)).

  23. If non-statutory items are an issue a partial assessment on AUR or IAT "REQ54" tool is required for the following items:

    • W/H, see (24) and (25) below

    • Excess SSTAX see (24) and (25) below

    • Additional Medicare Tax withheld, see (24) and (25) below

    • FICA tax on tip income and tip penalty under IRC 6652(b), see (26) below

    • FICA tax on other income (i.e., NEC), see (26) below

  24. If a Statutory Notice has not been issued and W/H, excess SSTAX, or Additional Medicare Tax is the issue, input the assessment on AUR for the credit adjustment, NOT the tax. Issue a letter informing the TP that the non-statutory items have been assessed and input PC 77 to manually generate a stat notice.

  25. If a Statutory Notice has been issued and W/H, excess SSTAX, or Additional Medicare Tax is the issue, input the assessment using the IAT "REQ54" tool, for the credit adjustment, NOT the tax, send a recomputed notice (PC 95) removing the non-statutory items assessed and include a Special Paragraph informing the TP that non-statutory items have been assessed.

  26. If FICA tax or SS Tip tax is an issue:

    1. Assess the FICA tax or SS Tip Tax with a TC 290 and the appropriate reference number using HC 3. The hold code is released when the next TC 290 posts.

    2. Use blocking series "05" to input FICA/SSTAX adjustment.

    3. Input PC 77.

      Example:

      The original FICA tax on the CP 2000 is $150 with the total tax due of $750. Input TC 290 with the appropriate reference number for $150 and issue the Stat notice (using STN 90) or a recomputed notice (PC 95) for $600.

  27. If Insolvency identifies a case that has been assessed by AUR in violation of the automatic stay, they will contact AUR to make an adjustment. The AUR Bankruptcy Coordinator will verify if the assessment was done in violation. If so, then the AUR Bankruptcy Coordinator will reverse the assessment, ensure that notices are suppressed and establish an IDRS control base for continued monitoring, using IAT tools as appropriate.

4.19.3.20.1.11  (02-11-2014)
Combat Zone

  1. If the TP's response indicates participation in military action as a member of the U. S. Armed Forces (in an area designated as a combat zone as defined in IRC 7508 or in an area certified by the Department of Defense as being in direct support of military operations in a combat zone, for which the person receives special pay for duty subject to hostile fire or imminent danger, or in a qualified hazardous duty area or performing qualifying service outside such area as defined by Congress, per Pub 3, Armed Forces' Tax Guide, Combat Zone Exclusion, for the tax year at issue and for the most recent year for listings of specific areas) take the following action:

    Note:

    Executive Order No. 12744, effective January 17, 1991, designated the "Arabian Peninsula Areas" as a combat zone. No authority has terminated the designation, which continues to be in effect for Operation New Dawn (formerly Iraqi Freedom).

    1. Research IDRS CC IMFOLE for the combat zone indicator. See IRM 4.19.3.3.3.2, Freeze Codes, for additional information.

    2. Close all Combat Indicator 1 cases with proposed tax increase with PC 15 and issue a Letter 1802C. If the case is in Statutory Notice phase or if necessary to release a payment, input TC 290-0 in the Assessment window.

    3. Process any responses with Combat Indicator 2 or involving refund cases per (2) below.

    4. Verify the presence of the "-C" Freeze code.

      If And Then
      The -C freeze is not present ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Input TC 500 with cc 52 for Desert Storm, cc 54 for Bosnia/former Yugoslavia or Allied Force, or cc 56 for Afghanistan or Enduring Freedom (to reflect when the TP entered the combat zone) on the tax module being worked. Per the TP's response the Combat Indicator is 1, see steps 2 or 3 above.
      The "-C" freeze is not present No entry date was provided Input the TC 500 cc 5x using the correspondence date or the date of the telephone contact. Per the TP's response the Combat Indicator is 1, see steps 2 or 3 above. See IRM 5.19.2.5.4.2.1, Combat Zone IMF Procedures, for more detailed instructions.

      Note:

      The combat zone exit date is reflected with cc 53 for Desert Storm, cc 55 for Bosnia/former Yugoslavia or Allied Force, or cc 57 for Afghanistan or Enduring Freedom.

  2. Combat zone indicator 2 indicates the TP is no longer serving in a combat zone. Manual Interest computation is required in order for the notice to generate. If there is U/R income, input IPC MI (Manual Interest) only if a CP 2000 is being issued. See IRM 4.19.3.16.10, Manually Computed Interest for the CP 2000.

  3. The deadline extension provisions may also apply to individuals serving in the combat zone in support of the U.S. Armed Forces, such as Merchant Marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, accredited correspondents, and civilian personnel acting under the direction of the U.S. Armed Forces in support of those forces. Follow the instructions in (1) above to close the case PC 15.

4.19.3.20.1.11.1  (12-12-2014)
Combat Zone Cases and IRC 7508

  1. IRC 7508 provides that the period for performing any act required to be performed by a certain date is suspended while a taxpayer is on active duty to a combat zone, plus during any period hospitalized thereafter, plus 180 days. So, when a combat zone entry date is prior to the return due date, and there is no exit date, then there is no due date. That "no due date" condition is represented by a due date of 12/31/9999.

    Example:

    A Notice of Deficiency is sent to the taxpayer dated 11/15/2014. A TC 500 posts in the entity indicating a combat zone entry date of 11/25/2014 (10 days after the notice date). The taxpayer has until 260 days (90 -10 + 180) after he/she leaves the combat zone to file a petition with the U.S. Tax court. The deficiency cannot be assessed during that time UNLESS the taxpayer signs a waiver to assess and collect.

  2. If after a notice is generated the system displays one of the following messages: "12/31/9999 date is present, possible combat zone - See IRM 4.19.3" or "Note: Possible Combat Zone Indicator. Manual Interest and FTF Penalty computations may be necessary. Additional research required." , ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ take the following actions:

    1. Research IDRS CC IMFOLE for TC 500 cc 57.

    2. Determine exit date. If not available, go to (3) below.

    3. If the case is at the point of assessment, transfer the case to unit suspense, and monitor until the suspense period outlined in (1) above expires.

    4. After the suspense period in (1) above expires, if issuing a notice, manually calculate the FTF penalty and interest if applicable, and make the appropriate entries in the assessment window.

  3. If the exit date is not available ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

4.19.3.20.1.12  (09-01-2013)
Community Property

  1. If the TP's response indicates the income is community property, refer to IRM 4.19.3.4.4, Community Property States, for additional information.

4.19.3.20.1.13  (09-01-2008)
Congressional Cases

  1. A case is considered a Congressional if correspondence/inquiry is received on U.S. Congressional Letterhead or attached to U.S. Congressional Letterhead.

  2. If you discover a Congressional case, immediately give the case to the AUR TAS liaison for expedite handling.

  3. Do not consider a case a Congressional if the TP states he/she sent a copy of the AUR notice to a member of Congress or the White House, or contacted or is going to contact a member of Congress or the President, or threatens to do so if the case is not resolved. See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, for cases meeting the Taxpayer Advocate Service (TAS) criteria.

4.19.3.20.1.14  (09-30-2014)
Decedents

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    If the surviving spouse indicates the TP died after the date the CP 2000 was issued, continue processing and send Paragraph 129 or a Special Paragraph (Letter 2626C) using the following verbiage as an example: "All income attributable to you or your spouse must be included on the joint tax return filed for that year" .

  2. If a response is received stating that both TPs are deceased (for married filing jointly), or that a single TP is deceased (including letters marked "Deceased" by the Post Office), close the case No Change.

    Exception:

    Do not close the case as No Change when:

    • Full payment is submitted

    • Partial payment is submitted. Acknowledge payment and continue processing

    • Executor or surviving spouse signs the notice, with no disputing comments

    • The response indicates that more time is required to investigate the matter. Continue processing the case.

  3. If a disagreed response is received and the income is jointly owned with a surviving spouse, issue an appropriate letter with a Special Paragraph using the following verbiage as an example: "All income attributable to you or your spouse must be included on the joint return you filed." or send PARAGRAPH 129 on the notice. See IRM 4.19.3-7, CP PARAGRAPHS.

    Note:

    Joint accounts with one spouse deceased may need to be split into MFT 31 accounts for one or both TPs. For additional information see IRM 21.6.8, Split Spousal Assessments (MFT 31).

  4. Responses to an AUR notice may state that the TP died since filing the tax return for the U/R year. Input the following information on the Update Address window:

    1. For returns other than a joint return, input "Decd" behind the surname (i.e., John Jones Decd).

    2. For joint returns with one deceased TP, input "Decd" behind the decedent's first name (i.e., John Decd and Mary Jones).

    3. For joint returns with both TPs deceased, input "Decd" behind both first names (i.e., John Decd and Mary Decd Jones).

      Note:

      If the input of the word "DECD" makes the first name line too long, use the second name line to reflect the deceased TP's name.

    4. Enter "D" in the SPLIT CODE field.

4.19.3.20.1.14.1  (06-17-2013)
Killed in Terrorist Action/Killed in Action (KITA/KIA)

  1. IRC 692(d) provides an exemption from taxes in the following situations:

    • Any individual who dies as a result of wounds or injury incurred due to terrorist attacks against the United States on April 19,1995, or

    • September 11, 2001, or

    • Any individual who dies as a result of illness incurred due to a terrorist attack involving anthrax occurring on or after September 11, 2001, and before January 1, 2002, unless the individual was a perpetrator of the attacks.

    • Any astronaut whose death occurs in the line of duty after December 31, 2002.

    These TP accounts are being centralized and worked at the Kansas City Campus, as are all Killed in Terrorist Action/Killed in Action (KITA/KIA) cases.

  2. Based on the TP's response or the presence of "KITA/HSTG" in the KITA IND field on the Tax Account screen, determine if the U/R income belongs to the decedent. If all U/R income belongs to the decedent:

    1. Use PC 18 to close.

    2. Document the Case Notes: "KITA/KIA" or similar wording.

    3. Issue a Letter 1802C.

    4. If the case is in the Statutory Notice phase or if a payment has been received, input TC 290-0 in the Assessment window.

    5. Prepare Form 4442 and route to your local Accounts Management KITA/KIA Coordinator. Attach a copy of the written response or include a synopsis of the telephone call to the Form 4442.

  3. If only part of the income belongs to the KITA/KIA decedent, delete those issues and pursue issues for the surviving spouse. If none of the issues pertain to the KITA/KIA decedent, continue normal processing.

4.19.3.20.1.15  (06-01-2015)
Deposits to Stop the Accrual of Interest - Section 6603

  1. A TP may stop the further accrual of interest while the case is being resolved by making either a payment or an IRC 6603 deposit.

    Note:

    See IRM 4.19.3.20.5 (2), Agreed Responses, for the requirement that BOTH signatures are required on a consent to a tax increase for a jointly filed tax return that is not fully paid.

  2. The American Job Creation Act of 2004 created new IRC 6603, which allows TPs to submit deposits to suspend the running of interest on potential underpayments.

    1. IRC 6603 deposits replace Cash Bond designations and are identified on the Tax Account screen by a TC 640 with a Blocking Series of 990-999 in the DLN, or TC 640 with DPC 12. See IRM 20.2.4, Overpayment Interest.

    2. The TP must use the specific designation for the payment to be considered an IRC 6603 payment.

    3. Unlike Cash Bonds, the TP may be entitled to interest on the excess portion of an IRC 6603 deposit. To the extent the deposit is attributable to a disputable tax, interest is paid at the Federal short-term rate provided under IRC 6621(b), compounded daily. The ACT/DMI Program (version 6.13 and subsequent) provides a Federal Short-Term Rate Chart specifically for computing interest on IRC 6603 deposits. The rate of interest allowed is lower than the rates for overpayments.

      Note:

      After an assessment is made and the funds are applied as a payment against the assessed liability, the normal rules regarding interest on overpayments would apply.

  3. A TP may request the return of all or part of an IRC 6603 deposit before the deposit is used for a payment of tax. The requests must be in writing and include the following:

    1. The date(s) and amount(s) of the original deposit(s);

    2. The type(s) of tax to which the deposit was intended to be applied;

    3. The tax year(s) to which the deposit was intended to be applied.

    If the request is complete, a manual refund is required. See IRM 21.4.4 , Manual Refunds, IRM 21.5.1, General Adjustments, IRM 21.5.2, Adjustment Guidelines, and IRM 20.2.4.8.2.3 , Request for Return of an IRC 6603 Deposit, for more information.

    Note:

    The accrual of interest stops only on the amount actually remitted by the TP on the date the remittance is received. Interest continues to accrue on other unpaid amounts, including unpaid interest.

    Note:

    Some Directorships have centralized the processing of manual refunds. If an AUR site reports to a Directorship where manual refunds have been centralized, follow local procedures regarding processing.

4.19.3.20.1.16  (09-01-2006)
Disaster Area

  1. If the case is identified as entitled to disaster relief (either systemically or through TP self-identification) and a response is received indicating the TP's home, place of business or records were lost, destroyed or not accessible due to the disaster, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Otherwise, continue processing.

    Caution:

    IRS disaster relief memos usually grant special treatment to those TPs who self-identify; therefore, AUR does not always identify impacted TPs by zip code.

4.19.3.20.1.17  (08-26-2016)
Discovered Remittance and Voided Checks

  1. Discovered remittance - A response and/or correspondence with an original form of payment attached such as a personal check, money order or cashier’s check. Also, a loose check(s) discovered in an envelope or attached to a blank piece of paper.

    Note:

    For voided or blank checks, see (5) below.

  2. If any of the items listed in (1) are discovered, both the Form 3244, Payment Posting Voucher, and Form 4287, Record of Discovered Remittance, MUST be completed.

  3. Two copies of Form 3244 must be completed for each discovered remittance and contain entries in the following fields:

    • SSN

    • Form number/MFT

    • Tax Period

    • Transaction/Received date (IRS received date)

    • Taxpayer name, address, and ZIP code

    • Transaction Data (remittance amount)

    • Remarks

    • Prepared by

    After completing Form 3244 take the following steps:

    1. Attach one copy (original) to the remittance and drop in the designated secured (locked) container.

    2. Attach the second copy of Form 3244 to response.

    3. Use information from copy to complete log per (4) below.

  4. Form 4287 - This form is completed daily to log all discovered remittance and must have entries in the following fields:

    • Stop Number

    • Unit

    • Telephone Number

    • Today's Date - in MM/DD/YYYY format

    • Type of Doc - (Form 1040, Form 941, etc.)

    • Tax Period - (entire tax period XXXX)

    • Type of Remit - (check, money order, etc.)

    • Amount of Remit - (total money amount including a comma and decimal point)

    • Received Date - in MM/DD/YYYY format

    • Name - (Entire Name)

    • SSN

    • Discoverer - Name of person who discovered the remittance and their Supervisor's name

  5. VOIDED CHECKS - If the response has a "VOIDED" personal check attached, remove the check from the response and attach it to the Form 9465, Form 433-D, or written IA request. Route the "VOIDED" check with the IA to Collections.

  6. IRS CHECKS - Returned IRS refund checks are handled differently than regular discovered remittance or "VOIDED" personal checks. If you find an IRS refund check, take it to your Manager/Lead to be routed to the Refund Inquiry Unit.

4.19.3.20.1.18  (09-01-2016)
Divorced/Separated Taxpayers

  1. If a TP files a joint return and later becomes separated or divorced, both TPs remain responsible for the full amount of tax due on the jointly filed return. For this reason, mail a copy of the CP 2000 or Statutory Notice to each TP at their separate residences. Use caution to ensure that the address of one spouse is not disclosed to the other.

    Caution:

    Do not make any changes to the first name line when updating spousal addresses. Use the address input with Address Type "S" on any subsequent correspondence.

  2. The signatures of BOTH TPs are required on consent to tax increase for a jointly filed tax return that is not fully paid.

    Exception:

    A signature (both for jointly filed returns) is required if full payment was received after the Stat Notice was issued. If only one TP has signed the consent to tax increase or each TP signed separate consent forms that are dated differently (different IRS received dates), refer to IRM 4.19.3.20.1.18.1, Divorced/Separated Taxpayers – Single Signature on Consent, for additional information.

  3. If the response indicates the TP is not liable for the tax and there is no signed consent received for either taxpayer, determine if the non-responding spouse was issued a copy of the notice by researching the address portion of the CP 2000 History.

    If And Then
    Both TPs received a notice, the address of the non-responding spouse is known Issue a Letter 2626C to both TPs to obtain the missing signature.

    Exception:

    If the suspense time frame on a Stat Notice has expired, input PC 90 to default the case.

    The non-responding TP did NOT receive a copy of the notice The responding spouse provides the address
    1. Input the non-responding spouse's address on the Update Address window using Address Type "T" , using a date that is 60 days from the current date.

    2. Issue a recomputed notice.

    3. Send PARAGRAPH 182, see Exhibit 4.19.3-7, CP PARAGRAPHS, and include a Special Paragraph using the following verbiage as an example: "Since you filed a joint return we require the signature of both you and your spouse on the Response Form."

    4. Issue Letter 2626C to the responding spouse to inform him/her that both TPs are jointly and separately liable for the tax and that a signed consent to tax is required.

      Caution:

      Ensure the correct address is selected for the appropriate spouse. Refer to IRM 4.19.7.10.1, Create Letter Window, for additional information.

    The non-responding TP did NOT receive a copy of the notice The address is obtained from IDRS CC INOLES or ENMOD
    1. Input the non-responding spouse's address on the Update Address window using Address Type "S" . (Do not make any changes to the first name line.) See IRM 4.19.3.20.1.6, Address Updates.

    2. Issue a recomputed notice (which is sent to both spouses).

    3. Send PARAGRAPH 182, see Exhibit 4.19.3-7, CP PARAGRAPHS, and include a Special Paragraph using the following verbiage as an example: "Since you filed a joint return we require the signature of both you and your spouse on the Response Form."

  4. If the address for the non-responding spouse is not known and there is no signed consent received for either TP, research IDRS using CC INOLE with a Definer of "S" or CC ENMOD.

    If Then
    The spouse's address cannot be obtained Issue a Letter 2626C to the responding TP to obtain the spouse's address.
    The spouse's address is obtained with an address change cycle of 201X52 or later, Follow instructions in (3) above.
  5. The TP who filed a joint return may respond to a Statutory Notice that he/she is now divorced and/or separated and not fully liable for tax. Use the following procedures to process the case.

    Caution:

    If only one TP has signed the consent to tax refer to IRM 4.19.3.20.1.18.1, Divorced/Separated Taxpayers – Single Signature on Consent.

    1. If the TP is providing their address, input the address on the Address Update window using either Address Type "I" or "S" , as appropriate. The address input is used on any subsequent correspondence.

    2. Obtain a copy of the Statutory Notice, delete the divorced/separated spouse's address. Do not change the date on the Statutory Notice.

    3. Edit the attached CP 2000 to show any payments made by the first spouse contacted. Delete the address shown on the CP 2000 and write in the address of the spouse it is being sent to.

    4. Attach a copy of the notice to a Letter 2626C. Use paragraph G.

      Note:

      Use extra caution to ensure that the divorced/separated spouse is the person who is listed on the return. If the Statutory Notice is sent to anyone else, it constitutes an unauthorized disclosure. See IRM 11.3.1.6, Unauthorized Access and Disclosure of Returns or Return Information, for additional information on unauthorized disclosure.

      Note:

      If speaking to the TP on the phone advise the TP to see Pub 504, Divorced or Separated Individuals, for additional information.

  6. If the ex-spouse does not respond to the Statutory Notice, assess (default at the end of the Statutory period) the joint account for the full amount of the deficiency.

  7. If either spouse disagrees with the notice, (no signed consent to tax received from either spouse) contact the disagreeing spouse for resolution. If unresolved, refile the case for default.

4.19.3.20.1.18.1  (08-26-2016)
Divorced/Separated Taxpayers - Single Signature on Consent

  1. If only one TP has signed the consent to tax or each taxpayer signed separate consent forms that are dated differently (different IRS received dates), establish a MFT 31 module for each taxpayer following steps 1 – 6.

    Exception:

    Do not establish MFT 31 when the IRS received date is the same on both consent forms. See IRM 4.19.3.20.10.1(8), The Assessment Window, for additional information. Process following normal agreed procedures.

    Caution:

    These procedures are for paper case responses ONLY. If during a telephone call it is determined that an action is needed (i.e., letter, revised notice, assessment, No Change closure) on a case in BT 89004/89005/89006, check the action required box and leave a DETAILED case note explaining the action(s) needed (if the case is controlled at your campus follow local procedures to route detailed instructions for the required action(s) to the appropriate individual/unit). If the TP indicates agreement with the notice, instruct the TP to sign, date, and return the consent to tax increase, or, refer the TP to the consent page of the notice which provides complete information.

    1. Access IDRS CC TXMODA from the MFT 30 primary account. Use the IAT "REQ 77" tool to establish the MFT 31 accounts for both primary and secondary SSN as follows:

      Note:

      The SSN, MFT, tax period, and name control will populate from CC TXMODA.

    2. TC: Input "971" .

    3. TRANS-DT: Date of TC 971 input.

    4. TC971/151-CD: Input "103" .

    5. XREF-TIN: Input SSN of the spouse (create a module for both SSNs).

    6. Leave remarks: Split/Spousal MFT 31 established.

      Reminder:

      Complete the above actions for both the primary and secondary SSN using the XREF-TIN field to establish a MFT 31 module for each taxpayer.

      Note:

      The TC971 AC 103 generally posts within 2 weeks after input.

  2. Monitor the case to ensure the MFT 31 was created for both accounts. Once created, a TC971 AC 110 must be input on each MFT 31 account. Take the following actions:

    Note:

    Use the batch listing for BT 89004 or 89005 or Agree/Non-Agree and Docketed Appeals (NPS) Suspense Inventory Report to monitor the case and input the TC971 AC110.

    1. TC: Input "971" .

    2. TRANS-DT: Date of TC 971 input.

    3. TC971/151-CD: Input "110" .

    4. XREF-TIN: Input SSN (create for both SSNs).

    5. Leave remarks: e.g., "TC971 AC110" .

  3. If the address of both taxpayer(s) is known, or the responding spouse provides the non-agreeing spouse’s address, or the non-agreeing spouse’s address is obtained from IDRS CC INOLES or ENMOD, access the Address Update window and update the taxpayer addresses as follows:

    • Input the address of the primary spouse using Address Type "T" , and an end date one year (365 days) from the current date. Edit the first name line to reflect only the primary spouse’s name.

    • Input the address of the secondary spouse on the Address Update window using Address Type "S" . Edit the first name line to reflect only the secondary spouse’s name.

    Caution:

    Use caution to ensure that the address of one spouse is not disclosed to the other.

  4. Attempt to secure the non-agreeing taxpayer’s consent to tax. Determine if the non-agreeing spouse was issued a copy of the notice by researching the address portion of the CP 2000 History.

    If Then
    Both TPs received a notice
    1. Issue Letter 2626C to both taxpayers to obtain the missing signature and use the following verbiage as an example: "We sent a copy of our proposed changes to the other taxpayer on your joint return for the tax year listed above. When you file a joint return, both taxpayers are jointly and separately responsible for the full amount of tax owed on the return, even if you separate or divorce after you file. We are unable to continue processing your signed agreement until we have received both signatures."

    2. Input IPC S6 (CP2000) or S3 (Stat) and release case; the case is moved to BT 89005 or 89004 respectively.

    The non-agreeing TP did NOT receive a copy of the notice
    1. Issue a recomputed notice (which is sent to both taxpayers).

    2. Include a Special Paragraph using the following verbiage as an example: "We sent a copy of our proposed changes to the other taxpayer on your joint return for the tax year listed above. When you file a joint return, both taxpayers are jointly and separately responsible for the full amount of tax owed on the return, even if you separate or divorce after you file. We are unable to continue processing your signed agreement until we have received both signatures."

    3. Monitor for the recomputed notice to post.

    4. Once the notice has posted request the case back from clerical.

    5. Input IPC S6 (CP2000) or S3 (Stat) and release case; the case is moved to BT 89005 or 89004 respectively.

  5. If the address for the non-agreeing taxpayer cannot be obtained or is not known, issue a Letter 2626C to the responding TP to obtain the address using paragraph F and explain that we are unable to process the signed consent until both signatures are received using the following verbiage as an example: "We are unable to continue processing your signed agreement until we have received both signatures."

  6. Leave a detailed case note to indicate the taxpayers are divorced/separated and notate which taxpayer agreed; i.e., taxpayers are divorced and only secondary TP agreed, and input IPC S6 (CP2000) or S3 (Stat) and release case to move the case to BT 89005 or BT 89004; respectively.

  7. Use the batch listing for the 89004 or 89005 batch or Agree/Non-Agree and Docketed Appeals (NPS) Suspense Inventory Report, to monitor the case to await expiration of the notice suspense timeframe. Once expired, request the case.

  8. TPs who filed a joint return may respond to a Stat Notice with a signature on the consent to tax increase and indicate that he/she is now divorced and/or separated and not fully liable for tax. Use the following procedures to process the case:

    1. If the TP is providing their address, input/verify the address on the Update Address window using "T" for the primary taxpayer and "S" for the secondary taxpayer.

    2. Obtain a copy of the Stat and delete the divorced/separated spouse's address. Do not change the date on the Stat.

    3. Edit the attached CP 2000 to show any payments made by the agreeing spouse contacted.

    4. Delete the address shown on the CP 2000 and write in the address of the non-responding/non-agreeing spouse it is being sent to.

    5. Issue ONLY the non-agreeing taxpayer Letter 2626C to attempt to secure a signed agreement and send paragraph G. Attach a copy of the edited notice to the letter.

      Note:

      Use extra caution to ensure that the divorced/separated spouse is the person who is listed on the return. If the Statutory Notice is sent to anyone else, it constitutes an unauthorized disclosure. See IRM 11.3.1.6, Unauthorized Access and Disclosure of Returns or Return Information, for additional information on unauthorized disclosure.

    6. Leave a detailed case note to indicate the taxpayers are divorced/separated and notate which taxpayer agreed; i.e., taxpayers are divorced and only secondary TP agreed, and input IPC S3 (Stat).

      Note:

      If speaking to the TP on the phone advise the TP to see Pub 504, Divorced or Separated Individuals, for additional information.

    7. Use the batch listing for BT 89005 batch or Agree/Non-Agree and Docketed Appeals (NPS) Suspense Inventory Report, to monitor the case to await expiration of the notice suspense timeframe (default). Once expired, request the case.

  9. If the non- agreeing spouse disagrees with the notice, contact him/her for resolution (i.e., issue Letter 2626C and input IPC S6 (CP2000) or S3 (Stat).

  10. If both taxpayers signed separate consents that are dated differently and/or the case requires an assessment, do not input agreed or default assessment PCs until further notice; i.e., PC 67, 68, 87, 88, 90, RN, or SR. Continue to hold.

  11. If Stat issuance is necessary, issue a manual Stat to the non-agreeing taxpayer ONLY.

4.19.3.20.1.19  (08-26-2016)
Form 1040X/Amended Return

  1. When the TP responds to an AUR notice with a Form 1040X or an amended return, review the Tax Account screen to determine if the adjustment posted. While the following instructions refer to Form 1040X, they also apply for amended returns.

  2. Consider CAT A criteria when reviewing the Form 1040X or amended return submitted by the taxpayer. CAT A criteria can be found in IRM 21.5.3-2, Examination Criteria (CAT-A) - General

  3. AUR may receive requests for filing status changes based on the Supreme Court ruling on a provision of the 1996 Defense of Marriage Act (DOMA) and Rev. Rul. 2013-17 . The effect of the Supreme Court’s opinion is that same-sex couples who are lawfully married under state law are treated as married for all federal tax purposes including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions taking the standard deduction, employee benefits, contributing to an IRA and claiming earned income tax credit (EITC) and child tax credit (CTC). If the TP submits a Form 1040X requesting a filing status change see IRM 4.19.3.20.7.4 (3), Referrals.

  4. When the TP submits a Form 1040X (regardless of revision date):

    1. Verify the correct tax year, the name, address and filing status.

    2. Math verify all lines and columns.

    3. Check the signatures - if joint, both TPs must sign the Form 1040X.

  5. If the Form 1040X adjustment is not posted and meets the criteria in (4) above determine:

    If And Then
    The Form 1040X/Amended return is in response to a CP 2000 or Stat notice
    • The figures match the tax change shown on the AUR notice

    • Includes penalties (if any)

    • Contains the necessary signatures, AND

    • There are no disputing comments

    Input PC 67 or 87 as appropriate. See IRM 4.19.3.20.5, Agreed Responses, for additional information.
    The Form 1040X/Amended return is in response to a CP 2501
    • The figures match the tax change shown on the AUR system

    • Includes penalties (if any)

    • Contains the necessary signatures, AND

    • There are no disputing comments

    1. Access the Assessment window.

    2. Commit (F4) the assessment.

    3. Input PC 53.

    The Form 1040X/Amended return includes information that was not included in the original notice (i.e., Schedule C expenses, additional dependent(s)).

    Reminder:

    Use good judgement in determining if the TP is entitled to the adjustment(s). However, dependents must be verified using IDRS CC INOLES and DUPOL, see (6) and (7) below.

    The recomputed net tax change per AUR does not agree with the TP's figures OR not all the AUR issues are addressed.

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. Issue a revised notice to obtain the TP signature.

    2. It may be necessary to Input/verify changed amounts in the Case Analysis and Return Value screens.

    3. If the necessary adjustments cannot be made using specific screens or windows, use the Miscellaneous Adjustment/Schedule C Expense window to make the necessary changes.

    4. Include a Special Paragraph to explain why we were unable to accept the return as submitted and request any additional information needed.

    5. For penalties send PARAGRAPH 171.
      See IRM 4.19.3.20.6, Partially Agreed, and IRM 4.19.3.20.11 (15), Instructions Specific to Statutory Notices/Responses, for additional information.

    The Form 1040X/Amended return includes information that was not included in the original notice (i.e., Schedule C expenses, additional dependent(s)).

    Reminder:

    Use good judgement in determining if the TP is entitled to the adjustment(s). However, dependents must be verified using IDRS CC INOLES and DUPOL, see (6) and (7) below.

    The recomputed tax on the AUR system matches the Form 1040X or amended return Input IPC RN or SR as appropriate to issue a supplemental notice.
    See IRM 4.19.3.20.6, Partially Agreed, for additional information.

    Note:

    If the tax increase shown on the Form 1040X or amended return exceeds the tax increase shown on the AUR notice, see IRM 4.19.3.20.11 (14), Instructions Specific to Statutory Notices/Responses, for additional information.

    The Form 1040X/Amended return results in no tax deficiency (i.e., tax decrease) All AUR issues have not been addressed.

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. Attempt to resolve the issue by telephone (out call).

    2. If unable to contact the TP, issue a Letter 2626C informing the TP that we were unable to accept the Form 1040X or amended return as filed since it did not address the AUR issues. Request specific information/documentation needed to resolve the issue.

    Caution:

    Do not make adjustments to the current AUR proposal based on the Form 1040X provided (i.e., cost basis, additional expenses).

    Unable to determine changes to Form 1040X or amended return  
    1. Attempt to resolve the issue by telephone (out call).

    2. If unable to contact the TP, issue a Letter 2626C informing the TP that we were unable to accept the Form 1040X or amended return as filed. Request a specific breakdown of the changed item(s).

    Note:

    If questionable issues are involved contact your lead/team leader for additional instruction.

  6. Research CC INOLES to validate the name or name control and social security number of dependent(s). CC INOLES displays the date of birth which can be used to determine eligibility for child tax credit, additional child tax credit, and earned income tax credit.

    1. Do not allow any exemption amount or credit if the information on Form 1040X does not match data on CC INOLES. If the information matches see (7) below.

    2. Attempt an outcall to secure the dependent’s correct SSN, name or date of birth. If unable to contact the TP by phone issue a Letter 2626C, include a Special Paragraph using the following verbiage as an example: "The information you provided for the additional dependent(s) does not match our records. Please confirm the name, social security number and date of birth of the person(s) being added as a dependent on Form 1040X and submit the information to us with a copy of this letter/notice."

  7. Research CC DUPOL, using the Processing Year not the Tax Year (i.e., search 2015 Tax Processing Year for TY 2014 Tax Return), to verify if the additional dependent was claimed on another return as an exemption or earned income credit for the tax year in question. Review the ‘DEPD STAT IND’ field in the CC DUPOL response screen. This field indicates the dependent’s exemption status.

    If Then
    The response is ‘No Data Found’ OR the value is 1 Allow the additional exemption for the dependent.
    The value is 0 or blank Do not allow the additional exemption for this dependent. Issue a letter or notice including a Special Paragraph using the following verbiage as an example: "Our records indicate the additional dependent(s) claimed on your Form 1040X have been claimed on another return. Dependents cannot be claimed on more than one tax return therefore we cannot allow an exemption for the additional dependent(s) claimed on your Form 1040X."
    The TP still disagrees and states they are entitled to claim the additional dependent(s), with or without supporting documents
    1. Correspond one time with the TP. Send a Special Paragraph using the following verbiage as an example: “We are unable to process your claim for the additional dependent(s) in this department. Please sign, date and return the consent to tax on this letter, if you agree with our notice. Please file a separate Form 1040X to claim only the exemption for the additional dependent(s) and credits related to the dependent(s). Include any supporting documentation with your claim.”

    2. If the TP does not respond, continue normal AUR processing.

    Note:

    Consider Category A criteria for referring the case to Exam for Earned Income Tax Credit for the additional dependents per IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits.

  8. If the Form 1040X/Amended return results in no change to original tax, there are no changes to AGI or prepayment credits AND a TC 976/977 or TC 971 AC 010, 012-016 or 120 is posted:

    1. Input/verify TC 290-0 in the Assessment window.

    2. Use appropriate blocking series to release the "-A" freeze.

    3. PC 47 (CP 2501), PC 70 (CP 2000) or PC 91 (Stat) as appropriate.

      Caution:

      Do not use IPC RN or SR to create the Assessment when the tax change is zero.

  9. If the Form 1040X was received on or before the initial AUR contact date do not pursue penalties.

  10. If the U/R issue is resolved, but the TP states that another amount was NOT CLAIMED, UNDERCLAIMED, OR OVER-STATED on the original return AND:

    1. The TP provides sufficient information, make the necessary adjustment(s); follow (4) above. Refer to IRM 21.5.1, General Adjustments, and/or IRM 21.6, Individual Tax Returns,

    2. If the TP does not provide all of the necessary information, adjust the AUR issues and close the case. Issue a Letter 1802C, informing the TP to file Form 1040X. Be sure to mention specific documentation to support the claim.

  11. If a math error is found on the Form 1040X and you are:

    1. Able to correct (work through), follow (5) above.

    2. Unable to correct, issue a Letter 2626C informing the TP we were unable to process the Form 1040X as filed. Provide specific information for the TP to resolve the math error.

      Note:

      If the TP does not respond, issue a recomputed notice. Include a Special Paragraph to inform the TP that we were unable to accept the return as submitted and request any additional information. If there are questionable issues involved, contact your lead/team leader for additional instruction.

  12. Form 1040X adjustment has posted.

    If And Then
    The Form 1040X includes all U/R issues.   Close the case using the appropriate no change PC.
    The Form 1040X addresses all of the U/R issues BUT does not include the Accuracy related penalties, The Form 1040X was filed AFTER the AUR contact date.
    1. Pursue the penalty through the manual notice process (Letter 1151C and STN 90 through to default).

    2. Send a Special Paragraph using the following verbiage as an example: "We received your Form 1040X, Amended U.S. Individual Income Tax Return, in response to our previous notice. The Form 1040X did not include penalties which are included in this notice."

    3. Close the case with appropriate PC.

    The Form 1040X addresses all of the U/R issues BUT does not include the Accuracy related penalties, The Form 1040X was filed BEFORE the AUR contact date. Do not pursue the penalty. Close the case with the appropriate PC.
    The Form 1040X does NOT include all U/R issues  
    1. Adjust the U/R by reworking the case.

    2. Send the appropriate recomputed notice for the TP's signature.

    3. Ensure all windows reflect the processed Form 1040X information/figures.

  13. The TP replies that Form 1040X reporting the income in question was filed, review the Tax Account screen.

    If And Then
    Tax Account screen shows a TC 290 Form 1040X is not included with the case, and the tax increase due to U/R income matches the TC 290 Close the case with the appropriate no change PC.
    Tax Account screen shows a TC 290 Form 1040X is not included with the case, and the tax increase due to U/R income does NOT match the TC 290 Order the TC 290 DLN.
    Tax Account screen shows a TC 977 with no corresponding TC 290   Contact the TP to request a signed copy of the Form 1040X.

    Note:

    The Tax Account screen will indicate if the adjustment source document is a CIS document. View the CIS document on AMS and see (5) above. If there is no indication of "CIS" , contact the TP to request a signed copy of the Form 1040X.

    Tax Account screen does not show a TC 976/977 or TC 971 AC 010, 012 - 016 or 120, or the requested Form 1040X cannot be obtained   Send the appropriate letter to request a signed copy from the TP. Send a Special Paragraph using the following verbiage as an example: "You indicated that the income in question was reported on Form 1040X, however, we are unable to locate it. Please send or fax us a signed copy attached behind a copy of this letter."

4.19.3.20.1.20  (09-01-2008)
Innocent Spouse Relief Cases

  1. A TP who files a joint return with a spouse is generally jointly and separately liable for all tax due in that tax year. If a TP believes he/she should not be required to pay the tax (including penalties and/or interest) for a tax year in which he/she filed a joint return, the TP may be eligible for Innocent Spouse Relief.

  2. The TP must file Form 8857, Request for Innocent Spouse Relief or a similar written statement signed under penalties of perjury in order to be considered for relief.

    Caution:

    Do not confuse Innocent Spouse cases with Injured Spouse cases, which are worked in Accounts Management.

4.19.3.20.1.20.1  (09-01-2006)
Innocent Spouse Relief Cases - Tax Examiner Instructions

  1. Transfer all cases containing a Form 8857 or a response containing a request for Innocent Spouse relief that is signed and contains the words "under penalty of perjury" to your local AUR Innocent Spouse Coordinator.

    Note:

    Do not assign PC 99.

  2. If a response requests Innocent Spouse relief and is not properly signed (does not include the words "under penalty of perjury" ), correspond for a completed Form 8857, following normal case processing.

  3. Do not initiate any contact with the TP nor make any contact with Cincinnati Centralized Innocent Spouse Operation (CCISO).

4.19.3.20.1.20.2  (09-04-2015)
Innocent Spouse Relief Cases - AUR IS Coordinator Instructions

  1. These instructions are for the designated Innocent Spouse Coordinators ONLY. See IRM 4.19.3.20.1.20.1, Innocent Spouse Relief Cases - Tax Examiner Instructions, for TE instructions.

  2. These instructions are to be used by the AUR IS Coordinator in conjunction with IRM 25.15.7, Compliance Campus Functions, for processing AUR cases with potential Innocent Spouse issues and IRM 25.15.12, Appeals Procedures. See the specific IRM references listed below for more details.

    • IRM 25.15.7.3, Automated Underreporter (AUR) or Compliance Campus Examination Operations (CCEO) Cases - Overview

    • IRM 25.15.7.3.1, Identifying AUR and Examination Cases

    • IRM 25.15.7.3.2, Form 8857 Received by Compliance Campus

    • IRM 25.15.7.3.3, Automated Underreporter (AUR) / Compliance Campus Examination Operations (CCEO) 30 Day Period (CP 2000 or Letter 566C Issued)

    • IRM 25.15.7.3.3.1, Innocent Spouse Determination Made Before Issuance of SNOD

    • IRM 25.15.7.3.4, Statutory Notice of Deficiency (SNOD) Issued - 90-Day Process

    • IRM 25.15.7.3.5, Automated Underreporter (AUR) or Compliance Campus Examination Operations (CCEO) No Change Case

    • IRM 25.15.12.15, AUR/Innocent Spouse Cases

    Reminder:

    The IRM 25.15.7, Compliance Campus Functions, and IRM 25.15.12, Appeals Procedures, are not year specific. Therefore, the procedures (including updates) apply to all AUR tax years.

  3. If a Form 8857 is received AND the TP is claiming identity theft, notify CCISO of the claim. See IRM 4.19.3.20.1.25.2, IDT General. The AUR IDT Liaison will notify the IS Coordinator when the identity theft issue has been resolved. See IRM 25.15.7.10.14.5, Identity Theft, for additional information.

  4. If a Form 8857 is received that does not relate to the tax year of the open AUR case:

    1. Fax only the Form 8857 to CCISO. Do not send the AUR case.

    2. Issue a Letter 4314C with a Special Paragraph informing the TP that the Innocent Spouse request has been forwarded to the appropriate office.

    3. Continue AUR case processing.

  5. If a Form 8857 is received with a response that resolves the AUR issue(s):

    1. Leave a detailed case note.

    2. Fax only the Form 8857 to CCISO.

      Note:

      If the issue is resolved due to identity theft, inform the ISO that the case was closed due to identity theft.

    3. Take the appropriate closing actions.

  6. If a valid Form 8857 or similar written statement that is signed with the words "under penalty of perjury" is received and the case cannot be closed, take the following action:

    1. Issue a Letter 4314C with a Special Paragraph informing the TP that the Innocent Spouse request has been forwarded to the appropriate office.

    2. FAX the Form 8857 and correspondence to CCISO.

      Note:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. Assign PC 99, which moves the case into Innocent Spouse Suspense Batch 89002 for monitoring within AUR.

      Note:

      PC 99 may be used for Employee cases; however, they will remain in BT 92 and will not move to Batch 89002.

    4. Follow procedures in IRM 25.15.7, Compliance Campus Functions, to control the case on the Innocent Spouse Tracking System (ISTS) and refer to CCISO.

    5. Notify CCISO of any subsequent changes to the original AUR proposal, including cases closed no change, assessed agreements and defaults.

  7. If non-statutory items are an issue a partial assessment on AUR or IAT "REQ54" tool is required for the following items:

    • W/H, see (8) and (9) below

    • Excess SSTAX, see (8) and (9) below

    • Additional Medicare Tax withheld, see (8) and (9) below

    • FICA tax on tip income and tip penalty under IRC 6652(b), see (10) below

    • FICA tax on other income (i.e., NEC), see (10) below

  8. If a Statutory Notice has not been issued and W/H, excess SSTAX, or Additional Medicare Tax is an issue, input the assessment on AUR for the credit adjustment, NOT the tax. Input PC 77 to manually generate a stat notice.

  9. If a Statutory Notice has been issued and W/H, excess SSTAX, or Additional Medicare Tax is an issue, input the assessment using the IAT "REQ54" tool for the credit adjustment, NOT the tax, send a recomputed notice (PC 95) removing the non statutory items and include a Special Paragraph informing the TP that non-statutory items have been assessed.

  10. If FICA tax or SS Tip tax is an issue:

    1. Assess the FICA tax or SS Tip Tax with a TC 290 and the appropriate reference number using HC 3. The hold code is released when the next TC 290 posts.

    2. Use blocking series "05" to input FICA/SSTAX adjustment.

    3. Input PC 77.

      Example:

      The original FICA tax on the CP 2000 is $150 with the total tax due of $750. Input TC 290 with the appropriate reference number for $150 and issue the Stat notice (using STN 90) or a recomputed notice (PC 95) for $600.

  11. The inventory and progress of all Innocent Spouse cases are tracked on the ISTS with universal IDRS numbers. The numbers are used to identify various stages of an Innocent Spouse case.

  12. When the CP 2000 Notice suspense period has ended, research IDRS CC ISTSRA to determine the latest stage of the determination.

    1. If the stage number is 01 - 04, issue a Statutory Notice using PC 75 (or PC 77 if appropriate). Contact CCISO to advise them that a Statutory Notice is being issued.

    2. If the stage number is 05 or higher, contact CCISO first to determine if the Statutory Notice should be issued.

    3. If the case is in stage 11, do not issue the Statutory Notice until 51 days after the stage 11 date.

    4. When CCISO has made a full relief determination, issue a manual Statutory Notice (i.e., STN90) only to the non-requesting spouse.

  13. When issuing a Statutory Notice it is necessary to issue a Letter 4314C only to the requesting spouse under the following conditions:

    1. CCISO has not made a determination: Inform the requesting spouse of the impending Statutory Notice and that CCISO is in the process of making a determination based on their claim.

    2. CCISO has made a partial determination: Inform the requesting spouse of the impending Statutory Notice and that although CCISO has made a determination, the Statutory Notice must include the full deficiency amount.

  14. Innocent spouse cases may be established for each IMF account if each spouse filed a Form 8857. The ISTS controls are identified as "INSP" (Primary) or "INSS" (Secondary).

  15. A divorce decree stating the former spouse is responsible for all previous tax year liabilities does not affect the IRS collection activity directed to both spouses. However, a divorce decree stating the former spouse is responsible may be a factor in the IRS’ determination to grant or deny innocent spouse relief.

  16. If there is any indication the return may have a forged signature or involves other potentially fraudulent issues, see IRM 4.19.3.4.8, Fraud Referral Program, to refer the case for review and guidance.

    Note:

    Ensure that the Form 8857 and copies of all correspondence are faxed to CCISO and that the case is established on ISTS.

  17. When the full Statutory Notice suspense time frame has elapsed ≡ ≡ ≡ ≡ ≡ ≡ , notify CCISO that the default assessment is being made. See IRM 25.15.7.3.4 (4) Table, Statutory Notice of Deficiency (SNOD) Issued - 90-Day Process, for additional information.

  18. If the TP contacts AUR directly and requests an Appeals conference on the IS determination (not the AUR determination), AUR must notify CCISO. A request for an Appeals conference on the Innocent Spouse determination by either the Requesting Spouse (RS) or Non-requesting Spouse (NRS) must be submitted in writing. Rev. Proc. 2003-19, 2003-1 C.B. 371. AUR will coordinate with CCISO to ensure the Innocent Spouse part of the case file are sent to the Cincinnati Campus Appeals Office. AUR will continue processing their case unless the TP is also appealing the AUR income issue.

    Note:

    If the AUR Statutory Notice has already been issued, issue an interim letter informing the TP that proceedings before Appeals do not waive or extend the period within which a petition may be filed with Tax Court.

  19. If, prior to the issuance of an AUR Statutory Notice of Deficiency, CCISO informs AUR that the TP has appealed the Innocent Spouse determination:

    1. Provide the Cincinnati Campus Appeals Office with photocopies of the AUR case contents, including: Tax Return (non-ELF), Info Returns (if any), Case Notes, Case History, CP 2000/CP 2501 Notice and correspondence to and from the TP. Send the photocopies to the Cincinnati Campus Appeals Processing Section at the address shown on the Campus Case Routing page on the Appeals web site at: http://appeals.web.irs.gov/APS/caserouting.htm, then click on Case Routing Addresses and Instructions which takes you to the Share Point site, then click on Campus Case Routing.

    2. Continue to monitor the case. Alert the Cincinnati Campus Appeals Office of any changes to the case based on further TP correspondence. If changes are made, notify Cincinnati Campus Appeals Processing Section of the changes (including closing the case as a No Change). Fax a revised CP2000 to the Cincinnati Campus Appeals Processing Section at the fax number shown on the Campus Case Routing page on the Appeals web site at http://appeals.web.irs.gov/APS/caserouting.htm, then click on Case Routing Addresses and Instructions which takes you to the Share Point site, then click on Campus Case Routing.

    3. At the end of the CP2000 suspense period, send Letter 2626C. Include a Special Paragraph using the following verbiage as an example: "An appeal of the Innocent Spouse determination was filed. While the appeal is pending, we will continue processing the underreported income issue(s). Both spouses will receive a Statutory Notice of Deficiency within the next two to four weeks, which outlines your right to petition the United States Tax Court."

    4. Issue a Statutory Notice by updating the case with PC 75.

    5. After the Statutory Notice has generated, secure the case, provide a copy of the Statutory Notice to Cincinnati Campus Appeals Processing Section and monitor. See (20) step 3 below.

  20. If, after an AUR Statutory Notice has been issued, CCISO informs AUR that the TP has appealed the Innocent Spouse determination:

    1. Make prints of the Statutory Notice History screen for each spouse (See IRM 4.19.7, IMF Automated Underreporter (AUR) Technical System procedures, Viewing Notice History Screen) and photocopies of all case contents including: Tax Return (non-ELF), Info Returns (if any), Case Notes, Case History, CP 2000/CP 2501 Notice and correspondence to and from the TP.

    2. Send the AUR case file copies to the Cincinnati Campus Appeals Processing Section at the address shown on the Campus Case Routing page on the Appeals web site at http://appeals.web.irs.gov/APS/caserouting.htm, then click on Case Routing Addresses and Instructions which takes you to the Share Point site, then click on Campus Case Routing.

      Note:

      Print a copy of the Statutory Notice for the case file using either the AUR system or Control D.

    3. Maintain and monitor the case. Notify the Cincinnati Campus Appeals Office of any subsequent changes to the original deficiency amount (i.e., recomputed notice/supplemental report, case closed No Change, etc.).

      IF THEN
      The TP does not petition the U.S. Tax Court on the AUR issues (i.e., a docketed request):
      • Follow normal procedures to assess the joint account by default (i.e., PC 90) at the end of the Statutory Notice suspense period.

      • If the Innocent Spouse appeal is still pending at the end of the Statutory Notice suspense period, send the Requesting Spouse a Letter 1802C and include a Special Paragraph using the following verbiage as an example: "An appeal of the Innocent Spouse determination was filed. While the appeal is pending, you may receive collection notices because our automated system requires and sends certain notices when the tax is assessed."

      The TP petitions the U.S. Tax Court on the AUR issues (i.e., a docketed request):
      • Contact CCISO and inform them that the TP has petitioned the U.S. Tax Court.

      • Provide CCISO with information that the AUR case has been appealed, by whom and that the case is being the forwarded to Appeals.

4.19.3.20.1.21  (08-26-2016)
Installment Agreements

  1. To be considered an IA request, the request must be a completed Form 9465, a completed Form 433-D or a written request for a payment plan. If the TP checks the Installment Agreement box in the "Indicate your payment option" section of the CP 2000 but does not complete a Form 9465, or Form 433-D or include a specific written request for a payment plan, DO NOT send to Collections.

  2. If the TP AGREES (contains signature and no disputing comments) to the proposed AUR adjustment and STATES he/she cannot pay, will pay later, or submits a specific written request for an installment agreement (I/A), a payment plan or requests the additional tax due be added to an existing installment agreement, close the case agreed and:

    Note:

    If a Form 9465 or Form 433-D is present on a disagreed response, clerical will not forward the form to Collections. A flag indicating IA will be attached to the Form 9465 or Form 433-D .

    1. Verify the TP's name, SSN, and Tax Year are correct on Form 9465, Form 433-D or written IA request.

    2. Route the IA request to Compliance Service Collection Operation (CSCO).

      Note:

      If the Form 9465 or Form 433-D is the signature document used to agree to the tax increase, make a copy to send to CSCO. Use red ink to annotate the copy of the Form 9465 with: "9465 w/AUR Assess" or the Form 433-D with 433-D w/AUR Assess. Annotate the original Form 9465 or Form 433-D that a copy was sent to Collection.

    3. Leave AUR case note "IA to Coll" or similar wording.

    4. Issue a Letter 1802C (Paragraph A or B and F and W).

  3. If the case is closed No Change and

    1. there is no balance due on the module remove the flag (if present) and leave the Form 9465, Form 433-D or written IA request with the case.

    2. there is a module balance, complete Form 4442, attach Form 9465, Form 433-D or written IA request and forward to Collections indicating AUR case was closed No Change.

  4. If the case cannot be closed (assessed or no change), leave the flag attached. If no flag is present attach a flag indicating IA to the Form 9465, Form 433-D or written IA request and continue normal processing.

4.19.3.20.1.22  (12-12-2014)
Letters From a Third Party and Authorization From a Valid Power of Attorney (POA)

  1. Information supplied by an unauthorized third party may be used. However, SEND NO TAX INFORMATION TO, OR DISCUSS TAX INFORMATION WITH AN UNAUTHORIZED PERSON. Any further correspondence required must be sent directly to the TP.

  2. The Third Party Designee (Check Box) authority on Form 1040, Form 1040A, or Form 1040EZ does not apply to Compliance issues, including AUR. Therefore do not send copies of AUR correspondence to a Third Party Designee and do not disclose specific case or tax return information based on a Third Party Designee check box.

  3. A completed authorization statement on the CP 2000/CP 2501 allows the IRS to address the CP 2000/CP 2501 information with the Authorized Third party. When communicating (orally or in writing) with an Authorized Third Party, input the name on the Update Address window, selecting Address Type A for Authorized Third Party. See IRM 4.19.7, IMF Automated Underreporter (AUR) Technical System Procedures - Updating Address Information.

    • Do not send copies of letters/notices to an authorized third party.

    • If the communication results in a no change determination, or if the TP agrees to the proposed tax change, the above actions are not necessary.

  4. Taxpayers can grant Power of Attorney to several specific categories of individuals who may represent them before the Service. While more than one individual may be named, only individuals can be named to represent the TP. For example, POA authority cannot be granted to a firm. These individuals must meet two eligibility criteria to represent a TP:

    Note:

    If the TP is deceased the POA is no longer valid. On joint returns determine if the POA is valid for the surviving spouse. If the POA is no longer valid, refer to (7) below.

    1. They must be part of a specifically authorized category of representative sanctioned by regulation (see Form 2848, Power of Attorney and Declaration of Representative, Part II for a complete list of eligible persons).

    2. They must be specifically designated by the TP via a properly completed POA. Form 2848, conveniently includes all the elements required by regulation, but is not the only allowable document that can be used to grant an authorization.

  5. While the TP has the discretion to grant authority to a representative to act on his/her behalf, the IRS has the power to determine who is eligible to practice before the IRS, consistent with Treasury regulations. Sometimes a TP may sign Form 2848 authorizing someone to perform actions that are not permitted by regulation.

  6. If Form 2848 lists an ineligible representative, the form cannot be accepted as an authorization to represent the TP before the IRS. See (7) below.

  7. If the POA is not valid for the surviving spouse, Form 56, Notice Concerning Fiduciary Relationship, designates a fiduciary for a decedent’s estate. There is no restriction with regard to the information a fiduciary can receive for the entity for whom he or she is acting. A fiduciary assumes the powers, rights, duties and privileges of the TP(s), until notice is given that the fiduciary capacity is terminated. The submitter of the Form 56 (Rev. 12/2007) must indicate in Part III on line 4 the specific tax year(s)/period(s) they are authorized to receive TP information). In the 12/2011 version of the Form 56, the fiduciary is instructed to check the box and provide the specific tax periods within Section B, line 5.

  8. When Form 56 is received, the following is required:

    • The TP name line information

    • Identifying number (SSN, ITIN, or EIN)

    • Fiduciary name and address

      Note:

      If the TP's address is missing, use the fiduciary's address. If the fiduciary address is missing, return the Form 56 back to the TP.

    • Title of fiduciary (if available)

    • Signature of fiduciary

      Note:

      A facsimile stamped signature may be acceptable for a fiduciary.

    • Tax forms to be filed

    • Tax years/tax periods

  9. In order to represent a taxpayer before the Service, a person must be authorized by Form 2848. A Form 2848 also authorizes the representative to receive confidential tax return information from the Service. A TP may authorize the Service to discuss and provide specific confidential tax return information to any individual, corporation, firm, trust, partnership, or organization designated on Form 8821, Tax Information Authorization, but this form does not authorize the person to respond to the Service on behalf of the TP if the response constitutes practice before the Service. A document/letter request may be used in lieu of Form 2848, Form 8821 or Form 56, provided it contains all of the information described in (8) above or (10) below.

    1. Students working in a Low Income Taxpayer Clinic (LITC) or Student Tax Clinic Program (STCP) may represent TPs under a special order by the Director, Office of Professional Responsibility. The instructions for Form 2848 require that such students attach a copy of the letter from the Office of Professional Responsibility authorizing practice before the Internal Revenue Service. Students who have been authorized to practice by special order may, subject to any limitations set forth in the letter from the Office of Professional Responsibility, represent TPs before any IRS office and should be viewed the same as any other TP's representative for which a Form 2848 has been submitted.

    2. The TP may give oral authorization to address issues with a third party.

  10. The Form 2848, Form 8821, or a document/letter in lieu of these two forms, a facsimile (FAX), or photocopy of these forms should contain relevant information requested on the Form 2848 or Form 8821, including:

    Note:

    CAF will only accept the Form 2848 with a revision date of October 2011 or later.

    • Name, SSN, and mailing address of the TP

    • Name and mailing address of the designated representative POA or Tax Information Authorization (TIA)

    • Type of tax (income, employment, etc.) and the Federal tax form number

    • Tax year(s) or period(s) or specific use (POA) or specific matter (TIA)

    • The TP's signature and date of signature

    • In the case of a Form 2848, a completed Declaration of Representative (Part II)

      Note:

      For each POA listed, use the Update Address function to issue a copy of the notice to each representative.

  11. When a valid POA/TIA/Fiduciary (addressing the AUR notice) is received, input the information on the Update Address window.

    If Then input by selecting
    Form 2848 box in 2 is checked Address Type P1/P2 for the primary TP POA or P3/P4 for the secondary TP POA.

    Caution:

    Do not input P3/P4 POA information for Married Filing Separate accounts.

    Form 2848 box in 2 is not checked Address Type A1 or A2 for First or Second Authorized Third Party.
    Form 8821 box 5a is checked Address Type P1 or P2 for First or Second POA.
    Form 8821 box 5b is checked Address Type A1 or A2 for First or Second Authorized Third Party.
    Form 56 Address Type P1 or P2 for First or Second Authorized Third Party.

    See IRM 4.19.7, IMF Automated Underreporter (AUR) Technical System Procedures - Updating Address Information - POA.
    When the valid POA/TIA is received in response to an AUR notice, the original POA/TIA/Fiduciary should remain with the case file.

  12. If the POA/TIA/Fiduciary is attached to the return or is received without a return or document, and contains all of the items in either (8) or (10) above, route the authorization to the appropriate CAF Function for further processing and leave a case note.

  13. If a letter request is used in lieu of Form 2848, Form 8821, or Form 56 and contains all of the items shown in (8) or (10) above, photocopy the request and route it to the CAF Function for processing and leave a case note.

  14. POAs/TIAs filed for specific issues are not to be detached from the related document and sent to the CAF Function, unless the document authorizes recognition for a return in addition to the specific issue. In this case, send a copy of the POA/TIA to the CAF Function to input the return portion on the CAF system. Examples of specific issues include, but are not limited to, the following:

    • Form 843, Claim for Refund and Request for Abatement

    • Form 966, Corporate Dissolution or Liquidation

    • Form W-4, Employee's Withholding Allowance Certificate

    • Form 4361, Application for Exemption from Self-Employment Tax for Use by Ministers, Members of Religious Orders, and Christian Science Practitioners

    • Form 1128, Application to Adopt, Change, or Retain a Tax Year

    • Form SS-4, Application for Employer Identification Number

    • CP 2000

  15. "General Power of Attorney" or "Durable Power of Attorney" generally do not contain sufficient information to process on the CAF and should be retained in the case file and treated as a third party authorization. If, however, a general or durable power of attorney is submitted attached to a completed Form 2848 (a transmittal power of attorney), send both forms to the CAF Function for processing.

    Note:

    A durable power of attorney is effective so that a representative may transact an individual's responsibilities at a time when the individual is either incapable or incompetent to act, until the individual dies. A properly executed and effective durable power of attorney does not require the representative to sign a Form 2848 to act on behalf of the TP. Thus, the representative may sign the TP's returns, or any other form and discuss TPs situation without any further authorization.

  16. When an invalid POA/TIA is received, return it to the TP or authorized representative and send a Letter 2627C. Do not update the update address window. See IRM 21.3.7, Processing Third Party Authorizations onto Centralized Authorization File (CAF), for further information.

  17. When a valid POA is processed, the system generates a copy of all notices to both the TP and the designated representative, unless otherwise indicated. The POA address(es) automatically displays when sending a letter, but the tax examiner must select the address.

  18. If the TP requests in writing that a current POA be revoked or the representative indicates that he or she wants to withdraw from the representation and that no further information should be sent to this representative, handle the revoked/withdrawn POA request by the following instructions:

    1. Photocopy the correspondence and send the copy to the CAF Function for processing.

    2. Transfer the case to unit suspense.

    3. Monitor for the TC 961 to post on IDRS to ensure information is not sent to a POA who has withdrawn from representing or to whom the TP has revoked his or her authorization.

4.19.3.20.1.23  (08-26-2016)
Schedule D Changes

  1. Take the following steps to ensure the system uses losses in excess of $3,000 ($1,500 if MFS) to offset against U/R Schedule D income:

    If And Then
    The TP identifies that the U/R gains from STOCK, CG, REAL or Schedule D NEC income can be reduced by current unused Schedule D losses States any of the following:
    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. Input/verify the Income Identify Code(s) ("SD" or "ST" ) for the U/R STOCK/REAL IR(s) the TP is addressing on the new or revised Schedule D/Form 8949.

      Note:

      Modify IR(s) when the TP has split the sale income as both a short-term and long-term sale.

    2. Ensure the COMPUTE SCHEDULE D LOSS window is accessed and enter the correct values per return in the SCHEDULE D LOSS and the CAPITAL GAIN/LOSS fields.

    3. Adjust any U/R STOCK/REAL by any cost basis information provided.

      Note:

      See IRM 4.19.3.20.3.17, Securities Sales, and IRM 4.19.3.20.3.17.1, Cost Basis - Responses, for further information.

    The TP identifies that the U/R gains from STOCK, CG, REAL or Schedule D NEC income can be reduced by current unused Schedule D losses Does not address the carryover losses have been or will be adjusted
    1. Input/verify the Income Identify Code(s) ("SD" or "ST" ) for the U/R STOCK/REAL IR(s) the TP is addressing on the new or revised Schedule D/Form 8949.

      Note:

      Modify IR(s) when the TP has split the sale income as both a short-term and long-term sale.

    2. Ensure the COMPUTE SCHEDULE D LOSS window is accessed and enter the correct values per return in the SCHEDULE D LOSS and the CAPITAL GAIN/LOSS fields.

    3. Adjust any U/R STOCK/REAL by any cost basis information provided.

      Note:

      See IRM 4.19.3.20.3.17, Securities Sales, for further information.

    4. Issue a recomputed notice or a Letter 1802C. Inform the TP the current unused Schedule D losses need to be adjusted for future filings.

  2. The TP may claim additional Schedule D losses if he/she reported either a gain or a capital loss of less than $3,000 ($1,500 if MFS).

    1. Input/verify the Income Identify Code(s) ("SD" or "ST" ) for the U/R STOCK/REAL IR(s) the TP is addressing on the new or revised Schedule D/Form 8949. Adjust any U/R STOCK/REAL by any cost basis information provided.

      Note:

      See IRM 4.19.3.20.3.17, Securities Sales, and IRM 4.19.3.20.3.17.1, Cost Basis -Responses, for further information.

    2. Select the COMPUTE SCHEDULE D LOSS window and enter the correct values per return in the SCHEDULE D LOSS and the CAPITAL GAIN/LOSS fields.

    3. The TOTAL AGI CHANGE field will include the additional losses up to the maximum of $3,000 ($1,500 if MFS).

    Reminder:

    If TP's original Schedule D was limited to the maximum capital loss of $3,000, the per return figures MUST be input in the COMPUTE SCHEDULE D LOSS window.

  3. If the CP 2000 was issued because the TP reported ordinary dividends on Schedule D, reduced by cost or other basis, and the TP states that the income is other than ordinary dividends:

    1. Accept if the TP provides documentation.

    2. If the TP does not provide documentation, issue a Letter 2626C. Send a Special Paragraph using the following verbiage as an example: "The dividend income in question was reported to IRS as ordinary income and is not subject to capital gains treatment. Please contact the payer for written verification that the information furnished to us is incorrect. We are unable to change our proposal without this information." If issuing a recomputed notice, send PARAGRAPH 52. See Exhibit 4.19.3-7, CP PARAGRAPHS.

  4. If you determine U/R NEC should be reported on Schedule D:

    1. Input Income Identify Code "SD" if U/R NEC amount(s) is a long term capital gain/loss (Schedule D, Part II).

    2. Input Income Identify Code "ST" if U/R NEC amount(s) is a short term capital gain/loss (Schedule D, Part I).

      Note:

      Income Identify Codes "SD" and "ST" enable the system to compute the Schedule D tax if applicable. See IRM 4.19.3.12.2, Sch D/8814/ECR Tax Window, for further instructions.

    3. Follow the procedures in (1) above.

  5. If the TP response indicates U/R STOCK amount(s) are other than a short term capital gain/loss:

    1. Input Income Identify Code "SD" if the U/R STOCK amount(s) is determined to be a long term capital gain/loss, or

    2. Delete the Income Identify Code if the U/R STOCK amount(s) do not belong on Schedule D/Form 8949. Leave the Income Identify Code blank or input the appropriate Income Identify Code for the income to be treated as subject to SE tax.

4.19.3.20.1.24  (09-04-2015)
Spousal Notices

  1. A second CP 2000/CP 2501 may be generated for the spouse whenever the secondary spouse address changed from the year of liability to the year of the latest filed return.

  2. The second notice is an exact duplicate of all the information contained in the original notice mailed to the primary TP with the exception that the second notice contains the current address of the secondary TP.

  3. The AUR system makes a request to the National Account Profile (NAP) to research and provide address information for the secondary SSN.

  4. If there is a match, the address updates on the system and a notice generates to the primary and secondary SSN.

  5. If the tax examiner enters a spousal address on the Update Address window, no systemic search for the spousal address is performed. The tax examiner entered address supersedes the systemically generated address.

4.19.3.20.1.25  (08-26-2016)
Identity Theft (IDT) Claims - Overview

  1. With incidents of identity theft increasing each year, emphasis being placed on the ability for programs throughout the IRS to provide expedited handling, and to track the number of unresolved identity theft cases.

  2. In May 2015, the Service established IDT Victims Assistance Specialized Teams (IDTVA). The IDTVA tax examiner will be the TP's single point of contact (SPOC) for IDT and other account related issues. All cases with a Form 14039, Identity Theft Affidavit, and/or a police report received in AUR will be referred to the IDTVA. The IDTVA makes all IDT account determinations and performs Complete Account Analysis (CAA). After all IDT account related issues/actions are completed, the cases are referred back to AUR for processing/closure.

  3. Cases where the taxpayer makes an allegation or claim of identity theft require input of identity theft indicators for the applicable tax years and are built into specialized response batches. An allegation or claim of identity theft is identified by the presence of Form 14039, Identity Theft Affidavit, a police report or key words/phrases such as≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  4. Clerical builds IDT responses that do not contain a Form 14039, Identity Theft Affidavit, and/or a police report to the appropriate response batch type, 41 (CP 2501 Identity Theft (IDT) Responses), 52 or 53 (CP 2000 Identity Theft (IDT) Responses), 72 (Statutory Identity Theft (IDT) Responses), 81 (Reconsideration Identity Theft (IDT) Responses) or 83 (Employee Reconsideration) on a daily basis and notifies the AUR Coordinator when clerical closes the batch and the batches are ready for the technical units. The AUR Coordinator assigns the batches to ensure these batches are treated as priority and are worked and released accordingly.

    Note:

    Clerical does not build referrals (IPSU, Fast Track, OARS, etc.) into identity theft batches. Referrals are transferred to the appropriate coordinator.

  5. If responses/RECONs with a Form 14039, Identity Theft Affidavit, and/or a police report are found in any response batches, transfer the case to the AUR IDT liaison for referral to the IDTVA.

  6. Beginning October 1, 2015, IDTVA began scanning all correspondence into AMS/CIS.  It may be necessary to access AMS/CIS to review the information when working cases previously referred then reintroduced in the AUR Program.

    Note:

    Printing information from CIS is not required.

    Caution:

    Some original paper tax returns were scannedby IDTVA into AMS/CIS. If the paper return is missing from the case file, if necessary, access AMS/CIS to view the return when working the case. 

  7. IDRS updates for the IDT indicators (TC, AC and Tax Administration Source Code), are mandatory as IDRS is the Service wide monitoring and tracking system for all IDT case work. See Exhibit 4.19.3-17, Identity Theft - Tax Administration Source Terms and Descriptions, for more information on the applicable literals for TC 971.

    Reminder:

    The IAT "REQ77" tool must be used to input/update the TC 971/972.

    Caution:

    If filing status is Married Filing Joint (FS 2), verify that the IDRS IDT indicator is posted to the correct taxpayer.

  8. When a case has multiple current IDT indicators, the case should be processed as follows:

    If there are multiple current IDT indicators Then
    Input on various dates Process the case based on the most recent IDT indicator.
    Input on the same date, and these are the most recent IDT indicators
    1. Consider all these IDT indicators.

    2. If one indicates the case should be closed no change but another indicates some other action should be taken, i.e., transfer the case to the AUR IDT Liaison, take the other action. DO NOT close the case no change.

  9. Ensure the correct OFP code is used to record all time spent on identity theft duties.

4.19.3.20.1.25.1  (06-10-2015)
IDT Documentation

  1. The standard Service wide acceptable documentation to substantiate a claim of identity theft is listed below.

    • A completed Form 14039, IRS Identity Theft Affidavit or

    • A copy of a police report stating taxpayer’s identity was stolen.

    Acceptable documentation to authenticate a taxpayer's identity is a legible (i.e., the name, date of birth, place of birth, address, date of issue and expiration date is clear and easily read) copy of a valid United States (U.S.) federal or state government issued identification:

    • A driver’s license,

    • A state issued identification card,

    • A Passport or

    • Social Security card.

  2. All identity theft actions are recorded in IDRS, including receipt and approval of complete legible identity theft documentation. See Exhibit 4.19.3-16, Identity Theft Action Codes, and Exhibit 4.19.3-17, Identity Theft -Tax Administration Source Terms and Descriptions, for more information on the IDRS IDT indicators affiliated with TC 971.

    Caution:

    Verify that the IDRS updates were made for the correct taxpayer. If the secondary taxpayer (spouse) is the victim and the indicator was placed on the primary, see IRM 4.19.3.20.1.25.3.1 (12), IDT Claims - Responses, to reverse the indicator for the primary TP and IRM 4.19.3.20.1.25.3.1 (11), IDT Claims - Responses, to update the secondary TP.

4.19.3.20.1.25.2  (08-26-2016)
IDT - General

  1. In situations where the taxpayer makes an allegation of identity theft, when working paper responses, or when answering incoming toll-free calls, follow the steps below:

    1. Research IDRS CC ENMOD for a current IDT indicator, TC 971. See Exhibit 4.19.3-16, Identity Theft Action Codes, and Exhibit 4.19.3-17, Identity Theft - Tax Administration Source Terms and Descriptions, for additional information.

      Note:

      The TRANS- DT on an existing AC 5XX indicating documentation was received must be less than three (3) years old to be considered "Current" . "Not current" or "expired" for purposes of IDT documentation is three (3) or more years old.

    2. If there is no TC 971 AC 501, 504, 505, 506, or 522 (with literals INCOME, MULTFL, INCMUL, NOFR, OTHER, IRSID, or PNDCLM), immediately input TC 971 AC 522 PNDCLM, using the IAT "REQ 77" tool. For instructions on how to input TC 971, see IRM 4.19.3.20.1.25.3.1, IDT Claims - Responses.

      Exception:

      If there is an existing TC 971 AC 522 PNDCLM/IRSID for the same tax year, DO NOT apply a second code.

      Note:

      Ensure IDRS updates are made for the correct TP.

    3. Review the case to determine if the case is already assigned to or has already been referred to IDTVA (AUR case note indicating referral to IDTVA, IDRS control category will be IDIX, ("X" represents a numeric value, i.e., IDI2 is used when the case is assigned to the IDTVA). If it is identified during a call the case is assigned to IDTVA provide the taxpayer with the IDTVA contact information (855-343-0057). If it is identified when working paper responses, refer to IRM 4.19.3.20.1.25.3, IDT Claims - Initial Handling.

    4. If the taxpayer states they have lost, misplaced or did not receive their Identity Protection PIN (IP PIN) and is in need of a replacement, inform the taxpayer to contact IDTVA at 855-343-0057 for assistance.

  2. If there is an existing current TC 971 AC 501, 504, 505, 506, or 522 (with literals INCOME, MULTFL, INCMUL, NOFR, OTHER, IRSID, or PNDCLM), verify the IDRS updates were made for the correct TP. Telephone assistors will refer to (3) and/or (4) below, and if working paper responses refer to IRM 4.19.3.20.1.25.3.1, IDT Claims - Responses.

    Note:

    If it is identified that the IDRS updates were made to the incorrect TP, i.e., the secondary TP (spouse) is the victim and the indicator was placed on the primary, see IRM 4.19.3.20.1.25.3.1 (12), to reverse the indicator for the primary TP and IRM 4.19.3.20.1.25.3.1 (11), to update the secondary TP.

  3. If the case is NOT already assigned to or referred to the IDTVA, and the case is controlled at your campus, and any of the conditions in the table below exist, telephone assistors will take the following actions:

    Caution:

    If the TC 971 AC 501, 504, 505, 506 or 522 has been reversed with a corresponding TC 972 - continue normal AUR processing.

    Note:

    AC listed in the table below do not need to be present on AUR account (year).

    If there is an existing current TC 971 (input within the last 3 years) with And the literal is Then
    AC 501 or 506 INCOME, MULTFL, INCMUL, NOFR, OTHER, DECD or PRISNR
    1. Request the case via UWC.

      Exception:

      If the case is unavailable through UWC, notify the AUR IDT liaison via secure email that the case needs to be referred to the IDTVA and leave a detailed case note.

    2. Follow steps 4-7 below.

    3. Transfer to the designated UID.

    4. Place in the designated area for the AUR IDT liaison.

    AC 504 SPCL1, SPCL2, or EAFAIL Continue normal AUR processing/call handling.

    Note:

    If the account is marked with TC 971 AC 504 SPCL1, SPCL2, or EAFAIL there have been unsuccessful attempts to obtain the IP PIN. Use high risk disclosure procedures; see IRM 4.19.3.20.2.2, Disclosure, for additional information.

    AC 504 RPM Request the case via UWC and close no change following normal AUR procedures.

    Exception:

    If the case is unavailable through UWC, take the appropriate action to ensure the case is closed following normal AUR procedures per IRM 4.19.3.20.1.25.3.1 (5) table, IDT Claims - Responses.

    AC 504 ACCT, BOTH, NKI, or EMP
    1. Request the case via UWC.

      Exception:

      If the case is unavailable through UWC, notify the AUR IDT liaison via secure email that the case needs to be referred to the IDTVA and leave a detailed case note.

    2. Follow steps 4-7 below.

    3. Transfer to the designated UID.

    4. Place in the designated area for the AUR IDT liaison.

    AC 522 INCOME, MULTFL, INCMUL, IRSID, NOFR, or OTHER
    1. Request the case via UWC.

      Exception:

      If the case is unavailable through UWC, notify the AUR IDT liaison via secure email that the case needs to be referred to the IDTVA and leave a detailed case note.

    2. Follow steps 4-7 below.

    3. Transfer to the designated UID.

    4. Place in the designated area for the AUR IDT liaison.

    AC 522 PNDCLM (TP indicates ID Theft documentation was sent) Research AMS/CIS to check for IDT documentation and/or a related scanned TP response.

    Note:

    If TE does not have access to AMS/CIS, follow local procedures to ensure that AMS/CIS is researched for IDT documentation.



    If AMS/CIS includes a copy of a Form 14039 or police report then:
    1. Request the case via UWC.

      Exception:

      If the case is unavailable through UWC, notify the AUR IDT liaison via secure email that the case needs to be referred to the IDTVA .

    2. Leave a detailed case note.

    3. Transfer to the designated UID.

    4. Place in the designated area for the AUR IDT liaison.



    If AMS/CIS does not include a copy of Form 14039 or a police report, follow steps 2-7 below.
    AC 522 PNDCLM (TP does not indicate ID Theft documentation was sent) Follow steps 2-7 below.
    AC 522 "OTHER" and "PPDS" as the BOD, "OPIP" as the Program Consider the account as NOT having a TC 971 AC 522 posted and follow steps 1-7 below.
    AC 505  
    1. Request the case via UWC.

    2. Leave a detailed case note.

    3. Close the case no change using normal AUR procedures.

      Exception:

      If the case is unavailable through UWC, take the appropriate action to ensure the case is closed following normal AUR procedures per IRM 4.19.3.20.1.25.3.1 (5) table, IDT Claims - Responses.

    1. If none of the above is present or if the TRANS-DT is not within the last 3 years, input TC 971 AC 522 PNDCLM using the IAT "REQ77" tool. See IRM 4.19.3.20.1.25.3.1 (11), IDT Claims - Responses, for additional information.

      Exception:

      If there is an existing TC 971 AC 522 PNDCLM/IRSID for the same tax year, DO NOT apply a second code.

    2. Attempt to secure all IDT documentation via fax. If the TP faxes the required documentation in, while on the call, advise them their case is being referred to the Identity Theft Victims Assistance, and if additional information is needed a representative from that area will contact them.

    3. Advise the TP once their documentation (Form 14039 or a police report) is received, their case will be referred to the Identity Theft Victim Assistance, and if additional information is needed a representative from that area will contact them.

    4. Inform the TP they should contact the Federal Trade Commission at (877) 438-4338 or http://www.ftc.gov/ and that they should make a report to their local police and the three major credit bureaus. For additional information, visit http://www.irs.gov/ key word "Identity Theft" or see Pub 5027 , Identity Theft Information for Taxpayers.

    5. Advise the TP if they choose to fax the information to us, to please enlarge the image prior to faxing to avoid delays in resolving their case. Some faxed items like driver’s licenses or social security cards may not be legible when we receive them. As these items must be legible, we would have to contact them again to ask the taxpayer to mail copies that we can read.

    6. Ask the TP which income issues are a direct result of the identity theft

    7. Leave a detailed case note documenting the call and actions taken.

  4. If the case is NOT already assigned to or referred to the IDTVA, and the case is not controlled at your campus, and any of the conditions in the table below exist, telephone assistors will take the following actions:

    Caution:

    If the TC 971 AC 501, 504, 505, 506 or 522 has been reversed with a corresponding TC 972 - continue normal AUR processing.

    Note:

    AC listed in the table below do not need to be present on AUR account (year).

    If there is an existing current TC 971 (input within the last 3 years) with And the literal is Then
    AC 501 or 506 INCOME, MULTFL, INCMUL, NOFR, OTHER, DECD or PRISNR
    1. Follow steps 4-7 below.

    2. Leave a detailed case note.

    3. Complete Form 4442, Inquiry Referral, and fax/e-Fax to the site AUR Coordinator.

    AC 504 SPCL1, SPCL2, or EAFAIL Continue normal AUR processing/call handling.

    Note:

    If the account is marked with TC 971 AC 504 SPCL1, SPCL2, or EAFAIL there have been unsuccessful attempts to obtain the IP PIN. Use high risk disclosure procedures; see IRM 4.19.3.20.2.2, Disclosure, for additional information.

    AC 504 RPM
    1. Request the case via UWC.

    2. Leave a detailed case note.

    3. Close the case no change following normal AUR procedures.

    Exception:

    If the case is unavailable through UWC, check the action required box and leave a case note indicating the case needs to be closed following normal processing procedures per IRM 4.19.3.20.1.25.3.1 (5) table, IDT Claims - Responses.

    AC 504 ACCT, BOTH, NKI, or EMPL
    1. Follow steps 4-7 below.

    2. Leave a detailed case note.

    3. Complete Form 4442, Inquiry Referral, and fax/e-Fax to the site AUR Coordinator.

    AC 522 INCOME, MULTFL, INCMUL, IRSID, NOFR, or OTHER
    1. Follow steps 4-7 below.

    2. Leave a detailed case note.

    3. Complete Form 4442, Inquiry Referral, and fax/e-Fax to the site AUR Coordinator.

    AC 522 PNDCLM (TP indicates ID Theft documentation was previously sent) Research AMS/CIS to check for IDT documentation and/or a related scanned TP response

    Note:

    If TE does not have access to AMS/CIS, follow local procedures to ensure that AMS/CIS is researched for IDT documentation.


    If AMS/CIS includes a copy of a Form 14039 or a police report, then:
    1. Leave a detailed case note.

    2. Complete Form 4442, Inquiry Referral, and fax/e-Fax to the site AUR Coordinator.


    If AMS/CIS does not include a Form 14039 or police report, follow steps 2-7 below.

    Exception:

    Philadelphia Call site will follow steps 2-7 below.

    AC 522 PNDCLM (TP does not indicate ID Theft documentation was previously sent) Follow steps 2-7 below.
    AC 522 "OTHER" and "PPDS" as the BOD, "OPIP" as the Program Consider the account as NOT having a TC 971 AC 522 posted and follow steps 1-7 below.
    AC 505  
    1. Request the case via UWC.

    2. Leave a detailed case note.

    3. Close the case no change using normal AUR procedures.

      Exception:

      If the case is unavailable through UWC, check the action required box and leave a case note indicating the TP made a claim of identity theft and the case needs to be closed following normal processing procedures per IRM 4.19.3.20.1.25.3.1 (5) table, IDT Claims - Responses.

    1. If none of the above is present or if the TRANS-DT is not within the last three (3) years, input TC 971 AC 522 PNDCLM using the IAT "REQ77" tool. See IRM 4.19.3.20.1.25.3.1 (11), IDT Claims - Responses, for additional information.

      Exception:

      If there is an existing TC 971 AC 522 PNDCLM/IRSID for the same tax year, DO NOT apply a second code.

    2. Inform the TP of the acceptable IDT documentation necessary and advise them to fax or mail to the assigned campus.

    3. Advise the TP once the required documentation (Form 14039 or police report) is received, their case will be referred to the Identity Theft Victims Assistance, and if additional information is needed a representative from that area will contact them.

    4. Inform the taxpayer they should contact the Federal Trade Commission at (877) 438-4338 or http://www.ftc.gov/ and that they should make a report to their local police and the three major credit bureaus. For additional information, visit http://www.irs.gov/ key word "Identity Theft" or see Pub 5027 , Identity Theft Information for Taxpayers.

    5. Advise the taxpayer if they choose to fax the information to us, to please enlarge the image prior to faxing to avoid delays in resolving their case. Some faxed items like driver’s licenses or social security cards may not be legible when we receive them. As these items must be legible, we would have to contact them again to ask the taxpayer to mail copies that we can read.

    6. Ask the TP which income issues are a direct result of the identity theft.

    7. Leave a detailed case note documenting the call and actions taken.

  5. If the TP indicates ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ telephone assistors will advise the TP to submit a signed statement indicating they did not file or that they did not have a filing requirement with a copy of our notice and leave a detailed case note outlining the TP response and actions taken (i.e. "TP resp didn’t file and/or has no filing requirement. Requested signed stmt." ).

    Note:

    Refer to Exhibit 4.19.3-19, Filing Requirements for Most People, for additional information.

    Note:

    If it is identified while working a response, refer to IRM 4.19.3.20.1.25.3.1, IDT Claims - Responses, for additional information.

  6. If there is no TC 971 AC 501, 504 or 522 with the literals INCOME, MULTFL, INCMUL, NOFR, OTHER, IRSID or PNDCLM, immediately input TC 971 AC 522 PNDCLM, using the IAT "REQ77" tool. For instructions on how to input TC 971, see IRM 4.19.3.20.1.25.3.1, IDT Claims -Responses.

    Caution:

    If the account is marked with TC 971 AC 504 SPCL1 or EAFAIL, there have been unsuccessful attempts to obtain an IP PIN. Use high risk disclosure procedures; see IRM 4.19.3.20.2.2, Disclosure, for additional information.

  7. Verify that the IDRS updates were made for the correct taxpayer. If the secondary taxpayer (spouse) is the victim and the indicator was placed on the primary, see IRM 4.19.3.20.1.25.3.1 (12), IDT Claims - Responses, to reverse the indicator for the primary TP and IRM 4.19.3.20.1.25.3.1 (11), to update the secondary TP.

4.19.3.20.1.25.3  (10-30-2015)
IDT Claims - Initial Handling

  1. Upon receipt/assignment of an IDT case, including referrals, an initial cursory review must be performed to determine if the case will be worked in AUR or if a referral to the IDTVA is needed. Identifying ownership at the beginning of an IDT claim provides a higher level of customer service and reduces the potential for duplicating work and not resolving all related problems.

  2. Special attention should be given to cases that by their nature indicate a high potential for multiple year involvement, especially taxpayers who do not have a filing requirement, (refer to Exhibit 4.19.3-19, Filing Requirements for Most People, for additional information)are elderly disabled and/or underage. When IDTVA has an open control on any tax year, or any prior involvement on the taxpayers account it may be necessary to refer the case to the IDTVA.

    Note:

    It is understood that multiple year issues may not be known until later in the case processing.

  3. In an effort to avoid duplicating work, to determine the single point of contact (SPOC) or ownership for an IDT case and to identify non-AUR issues that could be worked concurrently, research is needed. The term multiple function case (MFC) is defined as an IDT case requiring resolution across multiple functions; such as refund inquiry in Accounts Management, open control in another Compliance area (i.e., Exam, ACSS, CSCO) or RICS, etc.

    Note:

    The TRANS-DT on an existing AC 5XX indicating documentation was received, must be less than three (3) years old to be considered "Current" . "Not current" or "expired" for purposes of IDT documentation is three (3) or more years old.

    If And Then
    IDRS shows an existing current TC 971 AC 501, 505, 506, or 522 not input by AUR There is an open control on the AUR tax year in Exam, or ACS; i.e. Multiple Function Criteria (MFC) .
    1. Leave a detailed case note indicating contact with another area is necessary to establish SPOC.

    2. Transfer to the designated UID.

    3. Place in the designated area for the AUR IDT liaison who will contact the controlling function to determine if they want the case.

    The module (present on the AUR tax year) contains reference to DUPF on IDRS CC ENMOD or TXMOD There is an open control on the AUR tax year in Exam, or ACS; i.e. Multiple Function Criteria (MFC) .
    1. Leave a detailed case note indicating contact with another area is necessary to establish SPOC.

    2. Transfer to the designated UID.

    3. Place in the designated area for the AUR IDT liaison who will contact the controlling function to determine if they want the case.

    IDRS CC ENMOD shows an existing current TC 971 AC 506 not input by AUR (present on the AUR tax year) There is an open control on the AUR tax year in IDTVA, AM RICS or IVO
    1. Transfer to the designated UID.

    2. Place in the designated area for the AUR IDT liaison.

    IDRS CC ENMOD shows an existing current TC 971 AC 506 (AC can be present on AUR tax year) There is no open control on AUR tax year in another function; i.e., no MFC criteria is met Refer to table in (5) below.
    The module contains references to any of the following on IDRS CC ENMOD or TXMOD
    • Letter 4464C

    • Letter 4310C

    • CP 05 or CP 05A

    • TC 720

    • TC 971 with AC(s) 052, 617,044, 199

    • TC 971 with AC 134 (with blank Misc field)

    • TC 971 with AC 506 WI AMTAP (RFND, OTHER, OMM, OMMGB OR DDB)

    • UP 147 RC(s) 6, 7, OR 8

    • IDRS controls to 06500 - 06547, 06831 - 06583, and 14810 - 14879

    • TC 972 AC 121 with ccc3 on posted return

      Close case using PC 52, 71 or 92 as appropriate.
  4. Review IDRS CC ENMOD for TC 971 AC 522 PNDCLM with IDRS control category IDIX, (X represents a numeric value, i.e., IDI2) this indicates the case has been referred to the IDTVA. If present,

    1. Transfer to the designated UID.

    2. Place the case in the designated area for the AUR IDT liaison.

  5. If no TC 971 AC 522 PNDCLM or the IDRS control category IDIX is not present, review IDRS CC ENMOD for TC 971 AC 501, 504 or 522 (with the literals INCOME, MULTFL, INCMUL, NOFR or OTHER). These indicate acceptable IDT documentation has been submitted. See Exhibit 4.19.3-16, Identity Theft Action Codes, and Exhibit 4.19.3-17, Identity Theft -Tax Administration Source Terms and Descriptions, for more information on the IDRS IDT indicators.

    Exception:

    AC 504 with literals SPCL1, SPCL2, RPM or EAFAIL does not indicate IDT documentation has been submitted. However, AC 504 with the literal RPM indicates the taxpayer is a victim of verified Return Preparer Misconduct.

    Caution:

    Verify that the IDRS updates were made for the correct taxpayer. If the secondary taxpayer (spouse) is the victim and the indicator was placed on the primary, see IRM 4.19.3.20.1.25.3.1 (12), IDT Claims - Responses, to reverse the indicator for the primary TP and IRM 4.19.3.20.1.25.3.1 (11), to update the secondary TP.

    Note:

    The TRANS-DT on an existing AC 5XX indicating documentation was received, must be less than three (3) years old to be considered "Current" . "Not current" or "expired" for purposes of IDT documentation is three (3) or more years old.

    If Then
    There is an existing current TC 971 AC 501, 506, 522 (with INCOME, IRSID, MULTFL, INCMUL, NOFR or OTHER)

    Exception:

    AC 504 with literals SPCL1, SPCL2, or EAFAIL does not indicate IDT documentation has been submitted, treat as no AC 504.

    1. Transfer to the designated UID.

    2. Place the case in the designated area for the AUR IDT liaison.

    There is no TC 971 AC 501, 504 or 522 (with the literals INCOME, MULTFL, INCMUL, NOFR, OTHER or IRSID)
    1. Immediately input TC 971 AC 522 PNDCLM, using the IAT "REQ77" tool. For instructions on how to input TC 971, see IRM 4.19.3.20.1.25.3.1 (10), IDT Claims - Responses.

    2. Issue Letter 2626C.

    3. Acknowledge receipt of their correspondence.

    4. Include a paragraph to request IDT documentation.

    5. If the income issue(s) is affiliated with the secondary SSN which does not have the IDRS IDT indicator, include a paragraph to request both the IDT documentation and identification of the issues related to IDT.

    6. Inform the TP they should contact the Federal Trade Commission at (877)438-4338 or http://www.ftc.gov/ and that they should make a report to their local police and the three major credit bureaus. For additional information, visit http://www.irs.gov/ keyword Identity Theft or see Pub 5027, Identity Theft Information for Taxpayers.

    7. Input IPC 3L, 6L or 8L as appropriate.

    The TRANS-DT for TC 971 AC 501, 504, or 522 (with INCOME, MULTFL, INCMUL, NOFR, OTHER or IRSID) is not current
    1. Immediately input TC 971 AC 522 PNDCLM, using the IAT "REQ77" tool. For instructions on how to input TC 971, see IRM 4.19.3.20.1.25.3.1 (11), IDT Claims - Responses.

    2. Issue Letter 2626C.

    3. Acknowledge receipt of their correspondence.

    4. Include a paragraph to request IDT documentation.

    5. If the income issue(s) is affiliated with the secondary SSN which does not have the IDRS IDT indicator, include a paragraph to request both the IDT documentation and identification of the issues related to IDT.

    6. Inform the TP they should contact the Federal Trade Commission at (877)438-4338 or http://www.ftc.gov/ and that they should make a report to their local police and the three major credit bureaus. For additional information, visit http://www.irs.gov/ keyword Identity Theft or see Pub 5027, Identity Theft Information for Taxpayers.

    7. Input IPC 3L, 6L or 8L as appropriate.

    Note:

    IDRS updates are mandatory for all IDT cases as IDRS is the Service wide monitoring and tracking system for all IDT case work. See Exhibit 4.19.3-16, Identity Theft Action Codes, and Exhibit 4.19.3-17, Identity Theft - Tax Administration Source Terms and Descriptions, for more information on the Action Codes and applicable literals for TC 971.

  6. The IDTVA team in PSC will work all AUR identity theft cases with international involvement. When referring the case to PSC IDTVA clearly notate "International" on the referral.

4.19.3.20.1.25.3.1  (08-26-2016)
IDT Claims - Responses

  1. If a case involves a claim of identity theft and Innocent Spouse,

    1. Provide the Innocent Spouse Coordinator, with a copy of the Form 8857.

    2. Determine if the case needs to be referred to IDTVA. If referral is necessary, transfer to the designated UID.

    3. Advise the innocent spouse coordinator when the case will be referred to the IDTVA.

  2. When the taxpayer makes an allegation or claim of identity theft; i.e., key words/phrases such as ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and there is no Form 14039, Identity Theft Affidavit, or police report present take the following actions:

    1. Research to determine if the case is assigned to IDTVA. If assigned to IDTVA, follow referral procedures in IRM 4.19.3.20.1.25.2, IDT - General. If not assigned follow steps 2-4.

    2. Input TC 971 AC 522 with literal PNDCLM, if applicable.

    3. Issue a Letter 2626C(using IPC 3L, 6L or 8L as appropriate) requesting IDT documentation as applicable per existing IDT markers and/or a written statement for each AUR issue.

    4. Leave a detailed case note.

  3. If the response indicates the taxpayer ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and ENMOD has either a current PNDCLM or there are no IDT indicators present,

    1. Use the IAT "aMend" tool, research portion, to determine Scrambled SSN or Mixed Entity. If yes, prepare Form 4442 for referral to AM and close PC 52, 71 or 92 or IPC 9R, as appropriate.

    2. If no, Input TC 971 AC 522 with literal IRSID, if applicable.

    3. Leave a detailed case note.

    4. Transfer to the designated UID.

    5. Place in the designated area for the AUR IDT liaison.

  4. If the taxpayer submits a signed return or a statement that they did not have a filing requirement (refer to Exhibit 4.19.3-19, Filing Requirements for Most People, for additional information) and ENMOD has no TC 971 AC 522 IRSID present, with or without a current AC 522 PNDCLM, take the following actions:

    1. Input TC 971 AC 522 with literal IRSID, if applicable.

    2. Leave a detailed case note.

    3. Transfer to the designated UID.

    4. Place in the designated area for the AUR IDT liaison.

      Note:

      Refer to Exhibit 4.19.3-19, Filing Requirements for Most People, for additional information.

    .

  5. If the taxpayer indicates the U/R income was the result of identity theft or their SSN being used illegally and the AUR systems shows a current (within the last three (3) years) unreversed TC 971, AC 501, 504, 506, 522, 523, 524 or 525 see the table below to determine appropriate action to take:

    Exception:

    AC 504 with literals SPCL1, SPCL2 or EAFAIL does not indicate IDT documentation has been submitted. However, AC 504 with the literal RPM indicates the taxpayer is a victim of verified Return Preparer Misconduct.

    Caution:

    Verify the TC 971, AC 501, 504, or 522 is for the SSN that corresponds to the U/R. If the secondary taxpayer (spouse) is the victim and the indicator was placed on the primary, see IRM 4.19.3.20.1.25.3.1 (12), IDT Claims - Responses, to reverse the indicator for the primary TP and IRM 4.19.3.20.1.25.3.1 (11), to update the secondary TP.

    If Then
    AC 501, 504, 506, or 522 with the literals INCOME, MULTFL, NOFR, INCMUL or OTHER
    1. Transfer to the designated UID.

    2. Leave a case note.

    3. Place the case in the designated area for the AUR IDT liaison.

    AC 522 with the literal PNDCLM and there is a Form 14039 or police report present
    1. Transfer to the designated UID.

    2. Leave a case note.

    3. Place the case in the designated area for the AUR IDT liaison.

    AC 505, 525, or 504 with the literal RPM Close the case no change following normal AUR procedures.
    AC 522 with the literal PNDCLM and there is noForm 14039 or police report present
    1. Issue a Letter 2626C.

    2. Acknowledge receipt of their correspondence.

    3. Include a paragraph to request IDT documentation.

    4. Include a paragraph to request a statement identifying the issues related to IDT.

    5. If the income issue(s) is affiliated with the secondary SSN which does not have the IDRS IDT indicator, include a paragraph to request both the IDT documentation and identification of the issues related to IDT.

    6. Inform the TP they should contact the Federal Trade Commission at (877)438-4338 or http://www.ftc.gov/ and that they should make a report to their local police and the three major credit bureaus. For additional information, visit http://www.irs.gov/ keyword Identity Theft or see Pub 5027, Identity Theft Information for Taxpayers.

    7. Input IPC 3L, 6L or 8L as appropriate.

    AC 523
    1. Issue a Letter 2626C.

    2. Acknowledge receipt of their correspondence.

    3. Include a paragraph to request IDT documentation.

    4. Include a paragraph to request a statement identifying the issues related to IDT.

    5. If the income issue(s) is affiliated with the secondary SSN which does not have the IDRS IDT indicator, include a paragraph to request both the IDT documentation and identification of the issues related to IDT.

    6. Inform the TP they should contact the Federal Trade Commission at (877)438-4338 or http://www.ftc.gov/ and that they should make a report to their local police and the three major credit bureaus. For additional information, visit http://www.irs.gov/ keyword Identity Theft or see Pub 5027, Identity Theft Information for Taxpayers.

    7. Input IPC 3L, 6L or 8L as appropriate.

    AC 524
    1. If filing status (FS) 2, research IDRS CC INOLES to determine which TP is deceased.

    2. Continue AUR processing following IRM 4.19.3.4.5, Deceased Taxpayers, and IRM 4.19.3.20.1.14, Decedents.

    3. Leave a case note acknowledging the TC 971 AC 524.

    4. DO NOT TRANSFER TO AUR IDT liaison.

  6. If the taxpayer indicates the U/R income was the result of identity theft or their SSN being used illegally, there is no Form 14039, Identity Theft Affidavit, or police report present, and the AUR systems shows an expired (more than three (3) years old), unreversed TC 971 AC 501, 504 or 522, see the table below to determine appropriate action to take.

    Exception:

    AC 504 with literals SPCL1, SPCL2 or EAFAIL does not indicate IDT documentation has been submitted. However, AC 504 with the literal RPM indicates the taxpayer is a victim of verified Return Preparer Misconduct.

    IF AND THEN
    AC 501, 504, 506 or 522 (with the literals INCOME, MULTFL, NOFR, INCMUL or OTHER) The taxpayer identifies the AUR issue(s) directly related to the IDT claim Research AMS/CIS to check for IDT documentation and/or a related scanned taxpayer response.

    Note:

    If TE does not have access to AMS/CIS, follow local procedures to ensure that AMS/CIS is researched for IDT documentation.


    If AMS/CIS includes a copy of a Form 14039 or a police report, then:
    1. Transfer to the designated UID.

    2. Place in the designated area for the AUR IDT liaison.


    If AMS/CIS does not contain a Form 14039 or police report:
    1. Issue a Letter 2626C.

    2. Acknowledge receipt of their correspondence.

    3. Include a paragraph to request IDT documentation.

    4. Input IPC 3L, 6L or 8L as appropriate.

    AC 501, 504, 506 or 522 with the literals INCOME, MULTFL, NOFR, INCMUL or OTHER The taxpayer does not identify the AUR issue(s) directly related to the IDT claim Research AMS/CIS to check for IDT documentation and/or a related scanned taxpayer response.

    Note:

    If TE does not have access to AMS/CIS, follow local procedures to ensure that AMS/CIS is researched for IDT documentation.


    If AMS/CIS includes a copy of a Form 14039 or a police report, then:
    1. Transfer to the designated UID.

    2. Place in the designated area for the AUR IDT liaison.


    If AMS/CIS does not contain a Form 14039 or police report:
    1. Issue a Letter 2626C.

    2. Acknowledge receipt of their correspondence.

    3. Include a paragraph to request IDT documentation.

    4. Include a paragraph to request a statement identifying the issues related to IDT.

    5. If the income issue(s) is affiliated with the secondary SSN which does not have the IDRS IDT indicator, include a paragraph to request both the IDT documentation and identification of the issues related to IDT.

    6. Input IPC 3L, 6L or 8L as appropriate.

  7. If the taxpayer indicates the U/R income was the result of identity theft or their SSN being used illegally and the AUR systems shows no indication of identity theft in the AUR system, there is no Form 14039, Identity Theft Affidavit , or police report present, check IDRS CC ENMOD for the conditions in (5) above. If no condition(s) present, take the following actions:

    1. Issue a Letter 2626C.

    2. Acknowledge receipt of their correspondence.

    3. Include a paragraph to request IDT documentation.

    4. Include a paragraph to request a statement identifying the issues related to IDT if the TP has not identified them.

    5. If the income issue(s) is affiliated with the secondary SSN which does not have the IDRS IDT indicator, include a paragraph to request both the IDT documentation and identification of the issues related to IDT.

    6. Inform the TP they should contact the Federal Trade Commission at (877)438-4338 or http://www.ftc.gov/ and that they should make a report to their local police and the three major credit bureaus. For additional information, visit http://www.irs.gov/ keyword Identity Theft or see Pub 5027, Identity Theft Information for Taxpayers.

    7. Input IPC 3L, 6L or 8L as appropriate.

  8. If the taxpayer does not provide the requested documentation (Form 14039 or police report present) take the following actions:

    1. Issue a Letter 2626C to address the taxpayer’s correspondence.

    2. Include a paragraph to advise the taxpayer that we need the required IDT documentation (Form 14039or police report) in order to continue processing their identity theft claim.

    3. If there are multiple U/R issues request a statement identifying the issues related to IDT.

    4. Research IDRS CC ENMOD for a current AUR initiated TC 971 AC 522 PNDCLM for the tax year in question. If present, reverse per (11) below, using NORPLY.

    5. Input the appropriate process code to move the case to the next phase.

  9. If the response ignores the previous claim of identity theft, research IDRS CC ENMOD for a current AUR initiated TC 971 AC 522 for the tax year in question. If present, reverse per (11) below using NORPLY.

  10. When updating IDRS with TC 971 AC 5XX enter the following in the miscellaneous input fields:

    Reminder:

    The IAT "REQ77" tool must be used to input/update the TC 971. See IRM 4.19.3.1.6, Integrated Automated Technologies, and Exhibit 4.19.3-20, Mandated IAT Tools, for additional information.

    Note:

    If the documented identity theft is for the secondary taxpayer, ensure the TC 971 AC 5XX is updated for the SSN of the secondary taxpayer.

    • BOD/Function Name: SBSE

    • Program: AUR

    • Tax Administration Source: Exhibit 4.19.3-17, Identity Theft -Tax Administration Source Terms and Descriptions for the appropriate entry.

    • TRANS DT: leave blank, field automatically populates with the current date

    • SECONDARY DT: enter the AUR tax year as 1231YYYY

      Note:

      If multiple tax years are involved enter TC 971 AC 5XX for each year.

  11. TC 972 is used to reverse the TC 971. The TC 972 reversal also has a miscellaneous input field. The first two fields are the same as the TC 971 miscellaneous input field (see (10) above). The Tax Administration Source is replaced with the following Reason Codes:

    Note:

    To avoid an unpostable condition when inputting any TC 972 reversal, enter the transaction date of the corresponding TC 971 AC 5XX being reversed.

    Reminder:

    The IAT "REQ77" tool must be used to input/update the TC 972. See IRM 4.19.3.1.6, Integrated Automated Technologies, and Exhibit 4.19.3-20, Mandated IAT Tools, for additional information.

    IF THEN
    The taxpayer requests its removal Enter TPRQ
    There is a typographical mistake or other internal error Enter IRSERR
    There is an internally identified negative impact Enter IRSADM
    It is determined that the taxpayer made a false identity theft claim Enter FALSE
    The taxpayer did not respond to either the request for documentation or to verify the amounts related to the claim Enter NORPLY
    During in the course of resolving an IDT issue, it is determined no identity theft occurred Enter NOIDT
    Does not meet any of the criteria above Enter OTHER

4.19.3.20.1.25.4  (02-12-2016)
Return Preparer Misconduct (RPM)

  1. Unscrupulous return preparers may alter TP tax data and/or misdirect a portion or all of the refund. TPs may become aware of misconduct through taxpayer initiated contact or through IRS correspondence and may submit Form 14157, Return Preparer Complaint and/or Form 14157-A, Tax Return Preparer Fraud and Misconduct Affidavit.

  2. When a TP states a preparer altered tax return data or misdirected a portion of or all of the refund, telephone assistors will research IDRS CC ENMOD and take the following action:

    If Then
    IDRS CC ENMOD research determines there is an existing TC 971 AC 504 with the literal RPM for the AUR tax year
    1. Request the case via UWC.

    2. Leave a detailed case note.

    3. Close the case no change following normal AUR procedures.

      Exception:

      If the case is unavailable through UWC, check the action required box and leave a case note indicating the case needs to be closed following normal processing procedures per IRM 4.19.3.20.1.25.3.1(5), table, IDT Claims - Responses.

    There is no TC 971 AC 504 with literal RPM for the AUR tax year
    1. Advise the TP to complete and return both Form 14157, Return Preparer Complaint and Form 14157-A, Tax Return Preparer Fraud and Misconduct Affidavit.

    2. Inform the TP that additional information is available on www.irs.gov and search keyword "preparer misconduct" .

    3. Leave a detailed case note.

  3. When working paper responses and a TP states a preparer altered tax return data or misdirected a portion of or all of the refund, take the following action:

    If Then
    There is no Form 14157 and/or Form 14157-A present
    1. Research IDRS CC ENMOD for an existing TC 971 AC 504 with literal RPM, for the AUR tax year.

    2. If present, close the case no change following normal AUR procedures and go to step 7.

    3. If not present follow steps 4 –7.

    4. Issue Letter 2626C advising the TP to complete and return both Form 14157 and Form 14157-A.

    5. Inform the TP that additional information is available on www.irs.gov and search keyword "preparer misconduct" .

    6. Input IPC 3L, 6L, or 8L as appropriate.

    7. Leave a detailed case note.

    Form 14157 and/or Form 14157-A is present
    1. Leave a detailed case note.

    2. Transfer to the designated UID.

    3. Place in the designated area for the AUR IDT liaison.

4.19.3.20.1.25.5  (02-12-2016)
AUR IDT Liaison Responsibilities

  1. The AUR IDT Liaison is responsible for:

    1. Managing IDT and RPM referrals (both to IDTVA and from IDTVA).

      Note:

      Ogden AUR IDT liaison will recharge the original return to IDTVA when referring the case to IDTVA and IDTVA will recharge the original return back to Ogden AUR when the case is referred back to AUR for further processing; i.e., issuance of a recomputed notice.

    2. Input of closing PC when case is returned from IDTVA.

    3. Reviewing all cases meeting referral criteria and Forms 4442 prior to sending to IDTVA.

    4. Monitor cases sent to IDTVA for 120 days, see (10) below.

    5. Track all time they spend working on IDT, see IRM 4.19.3.20.1.25 (9), Identity Theft (IDT) Claims - Overview

  2. There will be five types of cases that will require action by the AUR IDT liaison

    1. Cases received from clerical with Form 14039 or police report

    2. Cases received from clerical with Form 14157 and/or Form 14157-A.

    3. Cases received where the TE has determined the case should be sent to the IDTVA, i..e., action required box is checked, case criteria meets IDTVA referral requirements; such as the TP provides a signed statement they did not have a filing requirement or did not file a return and submits a signed return, TP response includes Form 14157 and/or Form 14157-A , another functional area has an open IDRS control, existing current IDT markers on the account require IDTVA referral, etc.

    4. Form 4442 referrals from the AUR Coordinator

    5. Cases received where a TE has determined Multi Function Criteria (MFC) is met requiring contact with the controlling function to determine if the controlling function will be the primary point of contact and they want the case OR if AUR will continue processing the IDT Theft claim, following IRM 4.19.3.20.1.25.3.1, IDT Claims - Responses. Transfer the case back to the TE to continue processing, if the controlling function does not want the case. Leave a case note indicating why the case is being returned.

  3. When an incoming response contains either; a Form 14039, Identity Theft Affidavit, and/or a police report, Form 14157, Return Preparer Complaint, and/or Form 14157-A, Tax Return Preparer Fraud and Misconduct Affidavit, clerical will transfer the case, and handwalk the case to the AUR IDT liaison for referral to the IDTVA.

  4. When an incoming response contains either; a Form 14039 or police report, or the case requires referral to IDTVA due to the TP indicating they did not have a filing requirement or did not file a tax return, take the following actions:

    Note:

    Non-identity theft mixed entity or scrambled SSN cases still follow normal procedures and are routed to Accounts Management. Use the IAT "aMend" tool, research portion, to assist in determining scrambled SSN or mixed entity.

    1. Leave a case note indicating case is being referred to IDTVA. The case note should also include the following: Tax year(s) impacted, if known, indication of any Statute issues, see (7) below for additional action(s) if required, date of the Statutory Notice of Deficiency and last day to petition if applicable (Statutory Notice phase cases should also be flagged with the last day to petition noted on the flag), indication of Collection issues. Refer to Exhibit 4.19.3-19, Filing Requirements for Most People, for additional information.

    2. Input IRS received date on AUR on open cases, if not present.

    3. Input IPC SI (open cases) or IPC 9R (BT 81 Recon cases), as appropriate.

    4. Close AUR IDT IDRS control, if present.

    5. Verify input of TC 971 AC 522 PNDCLM or IRSID, as appropriate.

      Note:

      Input of TC 971 AC 522 IRSID is used when there is an indication the return is bad per IRM 25.23.4-3, IRPTR/IDRS Data Decision Tree.

    6. Input CC STAUP for 15 cycles, as needed.

      Exception:

      If the case is in collection status, input TC 470 on IDRS. See Exhibit 4.19.3-14, Notice Delay Actions (Reconsiderations).

    7. Complete Form 3210, Document Transmittal.

    8. Return completed package to clerical to handwalk/tranship to the IDTVA.

  5. The following information should be included with the referral package:

    • Form 14039 and/or police report.

    • Any other documents pertinent to the ID theft determination or the corrective actions being requested that are not available electronically. Do not forward documents available on CIS, through AMS, or IDRS prints.

  6. When the TP provides Form 14157, Return Preparer Complaint, and/or Form 14157-A, Tax Return Preparer Fraud and Misconduct Affidavit, take the following actions:

    1. Leave a case note indicating the case is RPM and is being referred to the IDTVA.

    2. Input the IRS received date on AUR, if not present.

    3. Transfer the case to your unit suspense or input IPC 9B (Recon cases), as appropriate.

    4. Input CC STAUP for 15 cycles, as needed.

      Exception:

      If the case is in collection status, input TC 470 on IDRS. See Exhibit 4.19.3-14, Notice Delay Actions (Reconsiderations).

    5. Complete Form 3210 and attach case contents.

    6. Return completed package to clerical to handwalk/tranship to the IDTVA.

  7. There may be cases where the ASED needs to be recomputed/extended when the case is statue imminent.

    If And Then
    AUR (IDT or RPM) case is statute imminent at the time of referral; 90 days or less remaining Statutory Notice of Deficiency has been issued
    1. Input TC 560, as applicable, prior to referral to the IDTVA. Refer to IRM 4.19.3.20.11, Instructions Specific to Statutory Notices/Responses.

    2. Refer to the IDTVA following the procedures in (4) and (6) above.

    AUR (IDT or RPM) case is statute imminent at the time of referral; 90 days or less remaining Statutory Notice of Deficiency has not been issued If the case is an IDT case:
    1. Ensure Letter 1802C is issued to inform the TP that they’ll receive a Notice of Deficiency and their claim of identity theft is being referred to the appropriate area for processing. Use the following verbiage as an example "We received your Identity Theft claim and are referring your case to Identity Theft Victims Assistance. An examiner will be assigned to your case with contact you within 60 days. You will receive a Statutory Notice of Deficiency in the near future."

    2. Input PC 75 or 77, as applicable.

    3. Refer the case to the IDTVA; following (4); steps 1, 2 and 5 - 8 and (5), above.

    4. Monitor the case for notice issuance, and once issued, request the case.

    5. Input IPC SI.


    If the case is an RPM case:
    1. Ensure Letter 1802C is issued to inform the TP that they’ll receive a Notice of Deficiency and their claim of RPM is being referred to the appropriate area for processing. Use the following verbiage as an example : "We received your Return Preparer Misconduct complaint and are referring your case to Identity Theft Victim Assistance. An examiner will be assigned to your case and will contact you within 60 days. You will receive a Statutory Notice of Deficiency in the near future."

    2. Input PC 75 or 77, as appropriate.

    3. Refer the case to the IDTVA, per (6), above.

    4. Monitor the case for notice issuance, and once issued, request the case.

    5. Hold the case in your unit suspense for IDTVA determination/action.

    AUR IDT case becomes statute imminent while case is in suspense; IPC SI Statutory Notice of Deficiency has not been issued IDTVA will notify the AUR IDT liaison no later than March 15th of the statute year that the case can be either closed no change or returned to AUR inventory. If the case is not, or cannot be returned to AUR, take the following actions:
    1. Inform the IDTVA that AUR is issuing the Statutory Notice of Deficiency.

    2. Input PC 75 or 77, as applicable.

    3. Monitor the case for notice issuance, and once issued, request the case.

    4. Input IPC SI.

    AUR IDT case becomes statute imminent while case is in suspense; IPC SI or 9R Statutory Notice of Deficiency has been issued IDTVA is responsible for input of TC 560.
    IDTVA will notify the AUR IDT liaison no later than August 1st of the statute year that the case can be either closed no change, defaulted or returned to AUR inventory for recomputed notice issuance (IPC SR or PC 95).
    AUR RPM case becomes statute imminent while case is in suspense (AUR IDT Liaison will hold these cases in their unit suspense) Statutory Notice of Deficiency has not been issued IDTVA will notify the AUR IDT liaison no later than March 15th of the statute year that the case can be either closed no change or returned to AUR inventory. If the case is not, or cannot be returned to AUR, take the following actions:
    1. Inform the IDTVA that AUR is issuing the Statutory Notice of Deficiency.

    2. Input PC 75 or 77, as applicable.

    3. Monitor the case for notice issuance, and once issued, request the case.

    4. Hold the case in your unit suspense for IDTVA determination/action.

    AUR RPM case becomes statute imminent while case is in suspense (AUR IDT Liaison will hold these cases in their unit suspense) Statutory Notice of Deficiency has been issued IDTVA is responsible for input of TC 560.
    IDTVA will notify the AUR IDT liaison no later than August 1st of the statute year that the case can be either closed no change, defaulted or returned to AUR inventory for recomputed notice issuance (IPC SR or PC 95).
  8. When a case is received where the TE has input the IPC SI or 9R or transferred to the liaison, the liaison will review the case to validate whether the case should be sent to the IDTVA. If case should be sent to the IDTVA, follow the procedures in (4) or (6) above. If the case should not be sent to the IDTVA, return the case to clerical with instructions to transfer back to the TE. Leave a case note indicating why the case is being returned.

  9. IDTVA has 120 days to take the necessary actions to resolve IDT and RPM cases. If a Stat notice has been issued, see (10) below. The AUR IDT Liaison will monitor the BT 89003 inventory for IDT cases and their unit inventory for RPM cases. If a case has not been returned by the IDTVA by the end of the 120 day period contact IDTVA to provide AUR with an anticipated closure date (no later than 160 days). If an IDT case has not been returned by the negotiated date, close the AUR case with PC 17. If an RPM case has not been returned by the negotiated date, close the AUR case with PC 51, 71, 92 or IPC 9R, as appropriate.

    Note:

    IDTVA will notify AUR of any RPM cases which are transferred to Exam because the TP completed a "return as intended to be filed" . These cases will also be closed with PC 51, 71, 92 or IPC 9R, as appropriate.

  10. Cases where a Stat notice has been issued are time sensitive. The AUR IDT liaison provides the last date for the TP to petition the court in the case note. IDTVA will work these cases as a priority. Depending on the received date of the response and the last day for the TP to petition, IDTVA (in most cases) will notify AUR of the determination regarding the AUR issue before the last day for the TP to petition the court.

  11. If the IDTVA resolves the IDT issue and there are still AUR issues remaining, IDTVA will return the case to AUR with instructions to continue the processing (i.e., recomp, stat, no change, etc). The AUR IDT Liaison will ensure the following:

    • Appropriate actions are taken

    • Review AMS for related correspondence and if present leave an AUR case note indicating imaged correspondence is on AMS and instruct the TE to review AMS when working the response

    • Any AUR initiated TC 971 AC 522 has been reversed before releasing the case back into normal AUR inventory, see IRM 4.19.3.20.1.25.3.1 (11), IDT Claims - Responses, when necessary.

    • Release the case back into normal AUR inventory

  12. IDTVA will return a listing of SSNs for cases requiring input of closing PC (i.e., PC 17, no change, below tolerance closure); close the case with the appropriate process code.

  13. If IDTVA returns a case that was closed incorrectly with PC 17 during the transition of work to IDTVA; i.e., multi issue case and TP agrees to non-IDT UR, take the actions in the table below.

    Exception:

    If the TP response indicates agreement (i.e., Form 1040X, makes a payment, agrees to non-IDT issue(s)), take the appropriate action to ensure the case is assessed/processed regardless of the amount of tax increase.

    If And Then
    The case is in CP 2000 phase Tax increase is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Issue Letter 1151C, using the IAT Letters tool, for the UR issues.

    2. Open a control base to monitor the case.

    3. Suspend the case for 45 days.

    4. If no response is received issue a manual stat at the end of the suspense period.

    The case is in stat phase Tax increase is ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Issue a manual stat.

    2. Open a control base to monitor the manual stat.

    3. Suspend the case for 105 days.

    4. If no response is received, assess the case by default at the end of the suspense period.

    The case is in any phase Tax increase is less than ≡ ≡ ≡ ≡ ≡
    1. Leave a case note indicating the case is below tolerance.

    2. Send the documents (if any) to Files.

4.19.3.20.1.26  (06-11-2014)
Victims of Terrorist Attacks

  1. For tax years ending after September 10, 2001, disability payments for injuries incurred as a result of a terrorist attack directed against the United States or its allies are not taxable and should not be included in income. This includes attacks that occur both within and outside the United States.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Telephone assistors: If the TP indicates ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , request the TP submit an explanation in a signed statement.

  4. Refer to Pub 3920, Tax Relief for Victims of Terrorist Attacks, for additional information.

  5. See IRM 4.19.3.20.1.14.1, Killed in Terrorist Attack/Killed in Action, for more information on death due to an act of terrorism.

4.19.3.20.2  (08-26-2016)
Telephone Responses

  1. The purpose of the AUR toll-free telephones is to assist TPs and/or their POA/authorized representatives who call IRS regarding AUR initiated contacts. Use instructions for written responses as guidance for telephone responses/accepting oral statements.

    Caution:

    When these instructions refer to the TP, the instruction also applies to the POA who calls for the TP. See IRM 4.19.3.20.2.2 (6), Disclosure, for additional information regarding authorized representatives.

    1. Written documentation may be requested if unable to determine if the oral statement is valid.

    2. Hearing-impaired TPs may be speaking through a relay operator. The operator will announce they are calling as a relay operator on behalf of a TP as soon as you answer. Perform disclosure verification as if you were talking directly to the TP and continue with the conversation. For additional information see IRM 21.2.1.57, Deaf/Hard of Hearing (DHOH) Callers and TTY/TDD Equipment.

  2. Over the Phone Interpreter (OPI) Service - The IRS Language Line Services Web page is designed as a consolidated language resource across the IRS, to provide links to internal and external tools to better serve TPs with limited English proficiency (LEP). If you receive a call from a non-English speaking TP, use the OPI service.

    • For Spanish speaking TPs, transfer the call to a bilingual assistor by using #92242 (W&I) or #92342 (SBSE).

    • Certain assistors in the AUR sites are allowed to use the OPI service for Spanish speaking callers.

  3. To contact OPI service take the following actions:

    1. Use the Conference Hold button on your teleset to place the caller on hold.

    2. Dial ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    3. Enter your PIN number (xxxx-xxxxx).

    4. Select the language and option needed from the table below:

      Language Press
      Spanish 1
      Creole 2
      Mandarin 3
      Korean 4
      Vietnamese 5
      Somali 6
      Russian 7
      French 8
      Arabic 9
      For any other language needs or concerns 0, for operator assistance
    5. Brief the interpreter. Summarize what you wish to accomplish and provide any special instructions.

    6. Press the Conference Hold key to add the non-English speaking TP to the line.

    7. Complete disclosure verification as if you were speaking directly to the TP.

      Note:

      It is important to speak in the "first person" versus the "Third Person" . For additional information refer to IRM 4.19.19.5.3.1, Interpreter’s Role.

    8. Continue with the conversation; asking specific questions to relay.

  4. Oral Statement Authority is acceptance of information provided verbally to resolve account inquiries.

    Note:

    An Oral Statement cannot be used to close a case fully agreed. A signature (both if married filing joint) must be secured. Case can be closed fully agreed if receipt of full payment, prior to the issuance of a Notice of Deficiency, can be verified.

  5. The AUR ASPECT telephone system has been updated to always advise the TP that the telephone call does not extend the 90-day period in which they have to petition the Tax Court as specified in the Notice of Deficiency. The TP will always hear this announcement prior to speaking with an assistor. Should the TP question this announcement, inform the TP that this is a requirement and answer any other related questions.

  6. Identity Theft - if the TP indicates they are a victim of identity theft, see IRM 4.19.3.20.1.25.2, IDT - General, IRM 4.19.3.20.1.25.3.1, IDT Claims - Responses, for additional information.

    Note:

    Ensure the correct OFP code is used for all time spent on phone calls that involve a claim of identity theft.

  7. If the TP calls and indicates they wish to fax their response/agreement to the AUR issue, a faxed consent to assess additional tax (CP 2000, Letter 2626C, Form 5564-A (Stat Notice), Form 9465 or Form 433-D) can be accepted by fax if a TP contact was made and the case history documents the date of contact and the TP's intent to fax a signed consent. See IRM 4.19.3.20.2.5 (4), Universal Case, for additional information on when to use the general fax number or the employee E-fax number.

  8. It is not the policy of the IRS to respond to frivolous arguments on a point by point basis. When calls are received from argumentative TPs and/or representatives, it is important to stay in control of the call and do not argue with the TP. Advise the TP you can assist them with their tax account issues, but that you are unable to address their comments regarding the constitutionality of the tax system. You should refer the TP to Pub 2105, Why do I have to Pay Taxes?, or to www.irs.gov for further information. Remain calm and do not take the comments personally. If the TP continues to discuss issues other than their tax matters, re-emphasize you will assist them with an account issue, but you will need to terminate the call if they continue with the current questioning. If the TP continues their arguments, disconnect the call.

  9. When accessing View Case due to a phone call, you must click on the PHONE CONTACT field. The AUR program extracts telephone contact data based on this entry.

4.19.3.20.2.1  (07-22-2015)
Answering the Telephone

  1. EMPLOYEE IDENTIFICATION: When speaking with a TP, ALWAYS identify yourself by title and last name or first and last name and employee ID (badge) number. Be courteous, polite and professional.

    Note:

    The Restructuring and Reform Act of 1998 requires that IRS employees use a unique identifier in written or verbal communications with TPs. The entire 10 digits of the Position Identification (PID) replaces the current badge number and is used in the same manner.

  2. Important actions to provide quality TP telephone assistance include the following:

    1. Greet the TP: Identify yourself, including employee identification (badge) number, and indicate a willingness to help.

    2. Respond to the TP's opening statement: Actively listen to the TP; deal with the TP's feelings, if appropriate, and, acknowledge the ability to help. If appropriate, apologize for any mistakes made by IRS.

    3. Target the TP's questions: Listen to the TP's opening statement; form and use confirming questions; gain agreement from the TP; and determine any targeting required to better identify the TP's issue.

    4. Get the necessary facts: Ask the right questions and use appropriate hold procedures. Do not keep the caller on hold for more than a few minutes without giving him/her an explanation and apology. If additional research time is or will be too lengthy, offer to return the call with the requested information.

    5. Provide assistance: Provide accurate and complete assistance and/or appropriately refer the TP to another source, if required.

    6. Secure, verify and input/enter a call back phone number (taxpayer/authorized representative), when the taxpayer requests a call back or the issue is complex and requires further research resulting in a subsequent contact (i.e., call back to explain research findings). Research performed during the call does not require securing, verifying, or inputting/entering of a call back number.

      Note:

      TP contact information is not required if issues/case is resolved during the call

    7. Close the conversation: Verify the TP's understanding and conclude the contact courteously.

  3. Telephone assistors are expected to handle AUR actions on the account while the TP is on the phone. Telephone actions should be taken in talk or Hold status. Wrap time is appropriate when:

    • the caller does not wish to stay on the line,

    • the case is complex requiring significant time to complete documentation or research,

    • the TP is abusive or is using inappropriate language and the phone assistor has to end the call, or

    • the caller is an unauthorized third party and assistor needs to leave a case note or complete any necessary actions.

    Muting a call is not appropriate when research is being conducted; the caller should be placed on hold.

  4. The service is under no obligation to determine if the TP is using a cordless device, e.g., cell phone, cordless phone. However, if you become aware it is a cordless device (e.g., you know that the number the TP is calling from is a cell phone because he/she has previously told you it is, or he/she mentions during the conversation that it is a cell phone), advise the TP that there is a privacy risk as cordless devices use unsecured lines, and the conversation may be heard on another device.

    Note:

    See IRM 11.3.2.6.2, Use of Cell Phones and Cordless Devices, for additional information. The TP is not prohibited from using any unsecured platform (e.g., cell phone, cordless phone, speaker phone). The caller accepts any security vulnerability by using the cordless device or unsecured platform.

    1. If the TP does not agree to cordless use, the IRS employee should advise the TP to call back on a more secure land line.

    2. If the TP agrees to continue the discussion, leave a case note.

4.19.3.20.2.2  (08-26-2016)
Disclosure

  1. When responding to telephone inquiries, disclose no information until you are sure the person making the inquiry is the TP or his/her authorized representative. Most calls to the AUR toll-free number are in response to AUR Notices and are not considered high risk. See below for the information needed for normal disclosure checks:

    Reminder:

    The Third Party Designee check box is intended to facilitate the processing of tax returns and does not cover Compliance issues, including AUR - do not disclose specific case or tax return information.

  2. Some TPs may inform the assistor they have a 4 digit transfer PIN provided by a previous assistor. If the TP requests to use this PIN for disclosure purposes, apologize to the TP, explain that we (AUR) are not authorized to use the transfer PIN process and resume normal disclosure.

  3. Disclosure must be completed using the Disclosure Verification screen, see IRM 4.19.3.20.2.2.1, Disclosure Verification Screen, for additional information. The following is required for authentication before discussing the TP’s account:

    Note:

    If the caller is a designated representative, see (6) below.

    • Tax Identification Number - The primary or secondary Social Security Number

    • The name (filing status 1, 3 or 4) or names (filing status 2) as they appear on the tax return

    • The complete mailing address including city, state and zip code

      Reminder:

      TPs may use "apartment," "unit," "number," etc., interchangeably, when providing their apartment or condominium number.

    • The filing status used on the return, or the date of birth (primary or secondary). If neither are known, the total number of exemptions

    • The tax year in question is not required for authentication, but is necessary to provide assistance to the TP.

    If there remains some doubt as to the identity of the caller per IRM 21.1.3.2.4, Additional Taxpayer Authentication, you may ask for:

    • Date of birth for dependents.

    • The refund amount on the return.

    • The amount of income reported on the last return.

    • Employers shown on Form W-2.

    • The names of financial institutions.


  4. When the TP cannot answer the disclosure questions in (3) above correctly and ID theft is suspected or verified, it may be necessary to perform additional high risk authentication for disclosure as follows

    • If the TP was unable to verify their address, verify the TP address against prior year returns or IDRS CC ENMOD. Keep in mind that in certain cases, the "Good" TP may not know the address on the current "Bad" return or may have moved to a new address.

    • In addition to the AUR tax year return information, ask question(s) about any available IRP information on prior tax returns or inquire about previous tax return information, such as filing history, wages, W/H, schedules filed, refund amount, etc. See IRM 25.25.6.4, Taxpayer Protection Program (TPP) Taxpayer Authentication for Phone Assistors, for additional information.

    For ITIN callers only:

    • If the case involves an ITIN, check for ITIN application information on Employee User Portal (EUP) - ITIN RTS, the W-7 History screen. For more information on ITIN RTS, see IRM 3.21.263.8.1.2, Accessing and Logging into ITIN RTS.

    • Did you have any previous names and what were they?

    • What year did you receive your ITIN?

    • What is your country of birth?

  5. If the caller is inquiring about:

    1. A jointly filed return, only one TIN is necessary, preferably the primary number. The secondary TIN may be required if the primary is unavailable, or for use as an additional authentication check.

    2. Returns and return information of a minor, the information may be disclosed to the minor's parents if the caller signed the return on behalf of the minor or the child's return contains earned income. Continue the disclosure checks.

    3. A decedent's return and the caller's name appears on the second name line, he/she is an authorized representative. Continue the disclosure checks.

  6. If a person states he/she is the designated representative request the TP's name and TIN to check the Disclosure Verification screen. If the designated representative’s information is not present, check the Tax Account screen, Taxpayer Information screen, and/or Update Address window to determine if a POA or authorized third party was filed for that person to represent the TP. The information may be discussed after verification of the identity of the person who is listed as the representative. Check the Update Address window for the representative.

    Caution:

    The Third Party Designee (check box) authority on the tax return does not apply to compliance issues. See IRM 4.19.3.20.1.22 (2), Letters From a Third Party and Authorization From a Valid Power of Attorney (POA), for further information.

    1. If the POA is not reflected on the screens/windows, research using IDRS CC CFINK before requesting the TP or POA to submit Form 2848.

    2. If the CFINK screen shows there is a valid POA or authorized third party for the tax year being worked, ask the POA to verify his/her CAF number or if he does not have the CAF number, his name and address.

      Caution:

      Do not send copies of notices/letters if IDRS CC CFINK shows "NO" on NOTICE field on the AUTHORIZATION section.

      Note:

      Provide the CAF number shown on RPINK or CFINK to the caller ONLY AFTER verifying the representatives name, street address, city, state and zip code. Do not provide the caller the CAF number shown on RPINK or CFINK if you are unable to authenticate the caller. Advise caller that you will mail the CAF number to the POA address of record. Use the appropriate letter with a Special Paragraph using the following verbiage as an example: "Your correct Centralized Authorization File (CAF) identification number is _____________. Please use this number on all future powers of attorney/tax information authorizations for which you are the representative/appointee or when you are representing a taxpayer."

    3. If there is no POA or authorized third party on file, TP information such as tax figures or case information may be discussed ONLY with the TP.

    Caution:

    The CP 2000 Authorization Statement is valid only for the tax year shown on the CP 2000 in question. Therefore, only that CP 2000 and issues related to it may be discussed with the third party. See IRM 4.19.3.20.1.22, Letters From a Third Party and Authorization From a Valid Power of Attorney (POA), for additional third party information.

  7. ORAL DISCLOSURE CONSENT - Treasury Reg. 301.6103(c) - 1(c) authorizes the IRS to accept verbal consents authorizing the disclosure of return information to third parties assisting TPs in resolving Federal tax matters.

    Note:

    Do not solicit verbal authorization from the TP.

    If Then
    The TP wishes to verbally authorize a third party to assist him/her with AUR related matters, ensure that the TP understands that this consent will allow AUR to continue discussion with the designated third party until the issue is resolved. If the TP still wants the authorization
    1. Enter "ORAL DISCLOSURE" or similar wording in the AUR Case Note window.

    2. Enter the designee's full name in the Address Update window.

    The TP indicates that he/she wants the designee to act for the TP in matters beyond AUR, ensure that the TP understands that this consent will allow the IRS to continue discussion with the designated third party until this particular tax matter is resolved. If the TP still wants the authorization
    1. Record the Oral Disclosure Consent on IDRS, using IDRS CC ACTON to input History Items on each tax module (TXMOD) under consideration. See IRM 21.1.3.2.2, Authorized and Unauthorized Disclosures, for further information.

    2. Follow instructions in IRM 4.19.3.20.2.3, General Inquiries, for actions relating to non-AUR inquiries.

4.19.3.20.2.2.1  (08-26-2016)
Disclosure Verification Screen

  1. TEs must complete phone call disclosure using the Disclosure Verification screen.

  2. The Disclosure Verification screen automatically displays when the PHONE CONTACT field of the HISTORY/VIEW/REQUEST window is checked.

  3. The Disclosure Verification screen contains information that allows the phone assistor to perform disclosure without accessing the TP's account. This will eliminate inadvertent disclosure prior to verifying the caller’s identity.

    Note:

    The CAF number displays in the Disclosure Verification screen.

  4. Complete the Disclosure Verification screen following procedures in IRM 4.19.3.20.2.2, Disclosure:

    1. Click in the box to the right of the SSN field after verifying the primary or secondary social security number.

    2. Click in the box to the left of the NAME OR NAMES field after verifying the name (filing status 1, 3 or 4) or names (filing status 2) as they appear on the tax return.

    3. Click in the box to the left of the ADDRESS field after verifying the complete mailing address including city, state and zip code.

      Reminder:

      TPs may use "apartment" , "unit" , "number" , etc., interchangeably, when providing their apartment or condominium number.

      Note:

      If the caller provides information that requires updating the account (i.e., new address, authorized third party, etc.), the phone assistor can input "Y" in the "CHANGE ADDR?" box, after disclosure verification has been completed and the "DISCLOSURE COMPLETE" button has been clicked on. This will display the UPDATE ADDRESS window. Once changes have been made and committed, the system will move to the Case Analysis screen.

      Caution:

      Verify that the case is open before inputting an address change on the AUR system. Do not enter an address change on the AUR system for closed cases. Address changes for closed cases must be input on IDRS. However, updates for Address type Codes A1, A2 and P1 - P4 for closed cases are still required to be entered on the AUR system.

    4. Click in the box to the right of the FILING STAT CD field after verifying the filing status used on the return, OR the box to the right of the DOB field after verifying the date of birth. If neither is known, click in the box to the right of the NUM EXEMPTIONS field after verifying the total number of exemptions.

    5. Click in the box to the left of the AUTHORIZED THIRD PARTY field or P.O.A field after verifying the authorized third party’s address or POA’s CAF number and/or address. 

    6. When disclosure has been completed, click on the "DISCLOSURE COMPLETE" button. If the required disclosure has been met, the system automatically displays the TP's account. If the required disclosure has not been met, the following message displays: "ERROR: DISCLOSURE INCOMPLETE" . Verify that you have asked the required disclosure questions and checked the corresponding boxes. If the caller fails disclosure, normal procedures for failed disclosure should be followed.

  5. If the caller is an unauthorized third party providing information on the TP's case, access the case after the call has ended. Do not check the phone call box, leave a case note and take any necessary actions on the case.

4.19.3.20.2.2.2  (09-30-2014)
Contact Recording

  1. Contact Recording is a telephone application/tool/system that records incoming toll free telephone contacts for the purpose of possible subsequent monitoring. When the TP calls the AUR toll-free number, they are notified that their call may be recorded.

    1. If the TP objects to being recorded, use the "Stop Recording" icon on your desktop to disable the contact recording feature.

    2. If the call is transferred, advise the caller that they will have to restate his/her request that they do not wish to be recorded.

    3. If the caller also asks to record the conversation, advise the caller that he/she may not record the call; however, they may request a copy of the call under the Freedom of Information Act (FOIA). This request must be in writing and contain the date, name, identification number of the employee, and the approximate time of the call. See IRM 21.1.3.17.1(5), Freedom of Information Act (FOIA), for FOIA recording requests.

      Note:

      If the caller requests the case contents, they may request a copy under the Freedom of Information Act (FOIA). This request must be in writing and contain the date, name, identification number of the employee, and the approximate time of the call. See IRM 21.1.3.17.1, Freedom of Information Act (FOIA), for more information.

4.19.3.20.2.3  (02-12-2016)
General Inquiries

  1. If the TP's call is a general inquiry or he/she requests information about:

    When the issue is Function Transfer number
    Tax Law, refer to (2) below    
    Account issues (any account issues that do not pertain to the AUR case, including missing payments) Accounts Management Toll Free lines (AM)
    Hours of Operation are Monday - Friday, 7:00 am to 7:00 pm local time. If outside the hours of operation, advise the TP of AM hours and provide them with the toll free number, 1-800-829-1040.
    #92020 English
    #92021 Spanish
    Balance Due (non status 22)

    Note:

    AUR case must be closed.

    Accounts Management Toll Free lines (AM)
    Hours of Operation are Monday - Friday, 7:00 am to 7:00 pm local time. If outside the hours of operation, advise the TP of AM hours and provide them with the toll free number, 1-800-829-1040.
    #92010 English
    #92011 Spanish
    Refunds - TP's inquiring about their refund and it has been more than 21 days since they filed an Electronic return, or more than 6 weeks since they filed a paper return Accounts Management Toll Free lines (AM)
    Hours of Operation are Monday - Friday, 7:00 am to 7:00 pm local time. If outside the hours of operation, advise the TP of AM hours and provide them with the toll free number, 1-800-829-1040.
    #92020 English
    #92021 Spanish
    Refunds - TP's inquiring about their refund and it has been less than 21 days since they filed an Electronic return, or less than 6 weeks since they filed a paper return (Automated Service) Refund Hotline 1-800-829-1954 #90278 English
    #90279 Spanish
    Balance Due (IDRS status 22) ACS
    Hours of Operation are Monday - Friday, 8:00 am to 8:00 pm local time. If outside the hours of operation, advise the TP of ACS hours and provide them with the toll free number for W&I, 1-800-829-7650 or for SBSE 1-800-829-3903.
    #92080 W&I English
    #92071 W&I Spanish
    #92085 SBSE English
    #92076 SBSE Spanish
    Open TC 420 or -L freeze EXAM
    Hours of Operation for the W&I toll free line are Monday - Friday 8:00 am to 8:00 pm and for the SBSE toll free line are Monday - Friday, 7:00 am to 7:00 pm local time. If outside the hours of operation, advise the TP of Exam hours and provide them with the toll free number for W&I, 1-866-897-0177 or for SBSE 1-866-897-0161.
    #92217 English
    #92218 Spanish

    Note:

    Inform the TP when they are being transferred.

    1. Tax forms, provide the toll-free number for forms, 1-800-829-3676; or provide the IRS web site address, www.irs.gov or refer the TP to the local IRS office listed in the local telephone directory.

    2. Tax transcript, provide the toll-free number, 1-800-908-9946, or provide the IRS web site address, www.irs.gov.

  2. AM only answers specific tax law questions during filing season (i.e., January 15th - April 16th). After April 16th, AM support is limited and only the following topics are to be transferred to Tax Law; #92001.

    • Tax Exempt Government Entities (TEGE)

    • Special Services: Military or Civilian Combat; Federally Declared

    • Affordable Care Act (ACA)

    • International Tax Law (overseas calls only)

    If the TP inquires about specific tax law questions, other than shown above, inform the TP that you cannot provide assistance on that topic and refer them to the following:

    1. www.irs.gov - Select the Help & Resources tab on the irs.gov home page. Options are listed on the left side of the page,

    2. Interactive Tax Assistant - Enter "ITA" into the Search feature,

    3. IRS Tax Map - Enter "IRS Tax Map" into the Search feature for more detailed information.

  3. If the caller does not want to be referred to the website, transfer the call to the Out-of-scope automated message listed under #92194 (English) or #92195 (Spanish).

    Note:

    If unable to transfer to #92194 or #92195 use #92001.

4.19.3.20.2.4  (08-26-2016)
Case Specific Inquiries

  1. If the TP has questions relating to his/her case, access the Taxpayer Information window.

    1. Use the Case Note section to document any pertinent information, i.e., any statement by the TP that provides information to allow the tax examiner to make a change to the case. The information entered will append to the Case Note window.

      Note:

      Case notes remain a part of the case file. These notes can be viewed by other areas such as the United States Tax Court (in the event the TP petitions the court), or by TPs through the Freedom of Information Act, etc. Caution should be used when case notes are written.

    2. When the TP requests a call back or is told the tax examiner will call him/her back, secure/verify and input/enter the phone number.

    3. If the TP provides a new address, click on the address change box and use the Update Address screen following guidelines in IRM 4.19.3.20.1.6, Address Updates, and IRM 4.19.7, IMF Automated Underreporter (AUR) Technical System Procedures - Updating Address Information.

    4. The latest Primary/Secondary/POA address displays. This may not, however, be the address that received a notice.

  2. If the caller requests the case contents, the assistor may provide copies as along as providing the files to them will not impair enforcement. Formal requests may also be received under the Freedom of Information Act (FOIA). All request under FOIA must be in writing and contain the date, name, identification number of the employee, and the approximate time of the call. See IRM 21.1.3.17.1, Freedom of Information Act(FOIA), for more information.

  3. When the information you requested is available, return the TP's call within the specified time frame. Advise the TP when a delay is experienced in obtaining the requested information.

    Caution:

    If there is an indication of identity theft, phone assistors should not fax information containing personal identifiable information (PII) such as transcripts of accounts, copies of AUR notices, etc. to the caller. This information should be mailed to the address on file. Verify the address is that of the TP.

    1. Ask the TP to identify himself/herself by stating his/her full name and SSN. Never discuss or give specific information on the TP's account to anyone other than the TP without a valid POA or a completed authorization statement. See IRM 4.19.3.20.2.4.1 (5) and (6), Outcalls - Calling the Taxpayer, for additional information.

    2. Inform the TP that you have the information necessary to discuss his/her case.

  4. While tax information protected by IRC 6103 generally may not be left on an answering machine or voice mail, there are exceptions. When making an out call or returning the TP's/representative's call and prior approval to leave a message is not noted, use the following guidelines:

    1. If you "reasonably believe" you have reached the TP’s correct answering machine or voice mail, it is acceptable to leave your name, telephone number, any appropriate reference number for the inquiry, the fact that you work for the IRS (identifying your function is permissible), and the name of the person who should return the call.

    2. "Reasonable belief" is supported by the following:
      The greeting on the answering machine or voice mail refers to the TP being contacted or
      The TP has indicated that this is the telephone number where he or she may be reached directly

    3. If you do not have a reasonable belief that you have reached the correct TP, no tax or other confidential information should be disclosed on the message.

  5. If the TP agrees with the proposed changes, instruct the TP to sign, date, and return the consent to tax increase, or, refer the TP to the consent page of the notice which provides complete information. A signature is not required

    • To adjust W/H, excess SSTAX and/or additional MCTXW if that is the ONLY issue.

    • When the Statutory Notice suspense time frame has expired. Advise the TP we will be assessing the account. Input PC 90 to default the case.

  6. If the TP agrees and states he cannot pay or requests a payment plan, instruct the TP to sign and date the notice in the space provided.

    1. Inform the TP that payment options and Form 9465, Installment Agreement Request, are available online at www.irs.gov OR

    2. If the TP does not have internet access, inform the TP that Form 9465 can be requested by phone, by calling 1-800-829-3676 (toll-free).

  7. If the TP agrees and requests to add the AUR balance due to an existing installment agreement or states they can pay within 120 days:

    1. Instruct the TP to sign and date the notice in the space provided.

    2. Advise the TP to include the request to add to an existing installment agreement or their intent to pay within 120 days on their signed agreement.

  8. If the TP states he/she is making a payment other than by credit card, provide check annotation information if needed. The AUR phone script provides check annotation information if the TP selects the "Agree" path or chooses to speak with a tax examiner. You are not required to address this subject unless the TP asks a specific question. To respond to the TP's specific question, refer him/her to the consent page of the notice or advise him/her to make the check or money order payable to the "United States Treasury" and include the SSN and tax year from the Notice and annotate CP 2000.

  9. If the TP inquires about paying with their credit card,

    1. Advise the TP to sign and return the consent to tax page (both signatures are needed for married filing joint returns) in order to complete action on their case.

    2. Provide these toll-free numbers: 1-888-729-1040, 1-844-872-9829 and 1-888-872-9829.

    3. If the TP is calling from a foreign country provide these telephone numbers: 1-615-665-6883, 1-615-730-6369 and 1-334-321-4567.

    4. If necessary, advise that the service provider at those numbers will provide any additional information.

    5. If the TP wishes to pay using the internet provide the following web address: www.irs.gov/e-pay.

  10. If the TP requests the balance due amount, provide the CP 2000 amount and advise that penalty and interest continue to accrue. If the TP requests a specific payoff amount computed to a certain date, use IDRS CC INTST if the AUR assessment has posted or IDRS CC COMPA on open AUR cases.

  11. If the TP states the balance due has already been paid AND the payment is displayed on the Tax Account screen, close the case, using "Agreed Response" criteria. See IRM 4.19.3.20.5, Agreed Responses, for more information.

    Exception:

    A signature (both for jointly filed returns) is required if full payment was received after the Statutory Notice was issued.

    If Then
    The suspense time frame has not expired Acknowledge payment and advise the TP to sign and return the notice.
    The suspense time frame has expired Advise the TP we will be assessing the account. Input PC 90 to default the case.
  12. If the TP states a payment was sent and the payment is NOT shown on the Tax Accounts screen, determine if at least three weeks have passed since the TP made the payment. If yes, use the IAT "Payment Tracer" or Tracer tool. The tool will research IDRS CC TXMODA, IMFOLI, IMFOLP, or IMFOLT. Perform research before requesting the TP send a copy of the front and back of the cancelled check. If a joint return, check the secondary account by using the "Search X-REF" tab. If the payment is found posted on another tax module (i.e., subsequent year) ensure that the payment is transferred to the correct tax module using the IAT "Credit Transfer" tool. If the payment is for the balance due, close the case, using "Agreed Response" criteria. See IRM 4.19.3.20.5, Agreed Responses, for more information.

    1. If the payment posted as a TC 670 on a different tax year, use the IAT "Credit Transfer" tool to transfer the credit to a TC 640.

    2. If there is no record of the payment, research IDRS CC TXMOD as the payment may be pending or unpostable. If the payment is unpostable, print TXMOD showing the payment and refer to the lead.

  13. If the TP states they have paid the balance due in full and now received a bill for additional interest, research IDRS CC TXMOD to determine if a TC 276 has posted after the AUR adjustment. If a TC 276 has posted inform the TP that per the paragraph titled Failure To Pay Penalty - IRC 6651(a) on their notice an additional penalty (FTP) was assessed on their account. Inform the TP that interest is compounded daily until the entire amount due is paid, including penalties and interest. Payments received are applied in the following order:

    1. Tax.

    2. Penalties.

    3. Interest.

  14. If the TP paid online or by credit card and the payment is not found on another tax module, request that they sign and return the consent to tax page (both signatures are needed for jointly filed returns) in order to complete action on their case. See IRM 4.19.3.20.2.3, General Inquiries.

  15. If during the telephone call, it is determined the TP is due a refund or expects a refund, inform the TP the refund will be issued if they owe no other taxes or federal obligations. Some examples, other than Federal tax liability, are child support and Federal non-tax liability, such as student loans, etc. If the TP needs additional information regarding a potential refund offset, refer them to the Customer Service toll-free number, 1-800-829-1040.

  16. Accept oral statements from the TP or a third party which result in revising or closing a case as No Change (no increase in tax).

  17. If the TP agrees to the proposed assessment during the phone conversation, they may fax the signed agreement ; follow procedures in IRM 4.19.3.20.5, Agreed Responses.

  18. If during a phone call, AUR or IDRS research shows the TP's account balance due status is the result of an AUR assessment and the TP provides documentation or an acceptable oral statement to resolve/change the assessment

    Note:

    Written correspondence is required in order to make changes to the AUR assessment for tax years in which the statute has expired. The correspondence received date establishes the "claim date" for refund of any payments.

    1. Input IDRS CC STAUP with a definer "S" , to prevent issuance of additional balance due notices while the case is being worked.

      Exception:

      If the case is in collection status, input TC 470 on IDRS. See Exhibit 4.19.3-14, Notice Delay Actions (Reconsiderations).

    2. Access the Case Note/TP INFO window.

    3. Leave a detailed case note explaining ALL the needed changes to the previous AUR assessment.

    4. Check the ACTION REQUIRED box on the CASE Note window.

      Note:

      If the case is located in your own site, the ACTION REQUIRED box cannot be checked, ensure clerical receives the correspondence to be built into BT 81.

  19. If during a phone call, AUR or IDRS research shows the TP's account balance due status is the result of an AUR assessment and the TP agrees to send in documentation, advise the TP they will continue to receive notices until the documentation is received and reviewed.

    Note:

    DO NOT check the action required box.

  20. If during the telephone call, the TP inquires about a year in which the Refund Statute Expiration Date (RSED) has passed, advise the TP that a claim for refund must be filed within 3 years from the time the original return was filed or 2 years from the time the tax was paid, whichever is later.

  21. If during the telephone call, the taxpayer inquires about a year that is statute imminent take the appropriate action to prevent the barred assessment. If the case belongs to another site, notify the site with the imminent statute immediately (i.e. phone call, email, fax statute referral, etc.).

  22. If during a telephone call, the taxpayer request an interest and/or penalty waiver, inform the taxpayer /caller the request must be in writing and signed by the taxpayer or valid POA.

  23. If during a telephone call an erroneous refund is discovered due to the AUR payment refunding, tell the TP to void and return the check, if it has not been cashed. See IRM 4.19.3.4.11.1 (9) - (12), Recovering Erroneous Refunds, for further guidance.

4.19.3.20.2.4.1  (08-26-2016)
Out Calls - Calling the Taxpayer

  1. During the response phase there may be times when calling the TP will expedite the resolution of the case. An out call can eliminate the need to send the TP a letter to resolve their account when the TP has provided telephone contact information.

    Example:

    The TP responds to a notice but inadvertently omits required information or signatures delaying the action on the case.

  2. Out calls also provide better topic and time control of a conversation.

  3. There are times during the response phase when you must attempt to call the TP to resolve the issue. You must always document the attempt in a case note. You must attempt to call the TP when the TP:

    Note:

    Normal telephone procedures should be followed when making an out call. See IRM 4.19.3.20.2.1, Answering the Telephone, for additional information.

    1. Requests an appeal of our findings.

      Note:

      Attempt to resolve the issue(s) by phone prior to forwarding the appeals request. See IRM 4.19.3.20.1.8, Appeals, for additional information

      .

    2. Requests a phone call.

      Note:

      An attempt must be made even when the TP provides a contact time which is outside the tax examiner's shift.

    3. Fully agrees - but is missing required signature(s).

    4. Submits full payment after a Statutory Notice is issued, missing required signature(s).

      Note:

      If unable to reach the TP by phone and you are requesting a missing signature for a case in Statutory Notice phase where the suspense time frame has expired, do not issue a Letter 2626C, input PC 90 to default the case.

    5. Omits requested information or documentation (other than for identity theft).

    6. Requests case to be sent to their local Area Office.

    7. Form SS-8 is incomplete or missing original signature. See IRM 4.19.3.20.3.23 (5), Self-Employment Tax (SE Tax) vs, Employee Share of FICA, for further information.

    Note:

    If unable to reach the TP by phone, issue a Letter 2626C to request the missing information.

  4. Access the Case Note window and check the out call box to leave an Action trail in the Case History window. The indication in Case History may not show immediately - DO NOT check the box more than once.

  5. When you initiate an outgoing phone call, the TP may be reluctant to provide his/her Taxpayer Identification Number (TIN). To ease any concerns that the TP may have, provide the TP with the last four digits of his/her TIN (Social Security Number) and request that the TP verify the first five digits. After you verify the TIN, follow IRM 4.19.3.20.2.2, Disclosure and IRM 4.19.3.20.2.2.1, Disclosure Verification Screen.

  6. If TP is still reluctant to provide information, leave a detailed case note outlining the information that is needed from the TP. Provide the TP with the AUR toll free number. The TP can then call the toll free number and the assistor can inform the TP what is needed.

  7. Use the guidelines in IRM 4.19.3.20.2.4 (4), Case Specific Inquiries, when leaving messages that contain confidential information on answering machines/voice mail. These guidelines are consistent with prudent business practices and disclosure rules while still providing good customer service.

  8. If the TP indicates they will be faxing missing information/documentation transfer the case to unit suspense, hold for up to 5 days. If the information is not received within the 5 days continue normal processing.

4.19.3.20.2.5  (08-26-2016)
Universal Case

  1. It is no longer possible to transfer a call to another campus. Whenever you can assist the TP without requiring a paper document, Universal Work should be utilized.

    Note:

    If the TP disclaims knowledge of the income, see IRM 4.19.3.20.7.5 (3), Payer Contacts.

  2. When a TE is on the phone with a taxpayer, cases in major suspense batches (BTs 40, 47, 50, 55, 60, 70, and 93) can be requested to work through View case. Universal Work Case (UWC) gives the TE control of the case and actions can be taken.

    Reminder:

    After all case actions are completed the TE must release the case.

  3. If the case cannot be requested using Universal Work, the system displays the following error message: "Case is not in a batch allowed for universal work case." . Take the following actions:

    If And Then
    Unable to request through UWC The case is controlled at another campus
    1. Check the action required box.

    2. Leave a detailed case note explaining the actions that are needed.

    Unable to request through UWC The case is controlled at your campus Request the case using normal procedures, see IRM 4.19.7, IMF Automated Underreporter (AUR) Technical System Procedures - Controlling Indivdual Inventory and Requesting Cases.
    The case is suspensed for special handling (i.e., Bankruptcy, BT 89001, Innocent Spouse, BT 89002 or Identity Theft BT 89003, or cases requiring MFT 31 processing, BT 89004 - 89006) AND an action is required (i.e., Recomputed notice) The case is controlled at another campus
    1. Check the action required box.

    2. Leave a detailed case note explaining the actions that are needed.

    The case is suspensed for special handling (i.e., Bankruptcy, BT 89001, Innocent Spouse, BT 89002 or Identity Theft BT 89003, or cases requiring MFT 31 processing, BT 89004 - 89006) AND an action is required (i.e., Recomputed notice) The case is controlled at your campus Follow local procedures to route detailed instruction of the required action to the appropriate area.
  4. If the case requires a paper document or a fax, do not use the action required option.

    IF AND THEN
    The case is controlled at another campus The TP agrees to send in documents Do not use the Universal Work Option.
    1. If needed, provide the TP with the (clerical) e-Fax number for the controlling site or ask them to mail their reply in the envelope provided.

    2. Leave a case note.

    The case is controlled at another campus The TP indicates they wish to fax in their agreement to the AUR issue with or without Form 9465 Leave a case note to clearly document the TP's intent to fax a signed consent. If needed, provide the TP with the (clerical) e-Fax number for the controlling site.
    The case is controlled at another campus Neither faxing nor mailing meets the TP's situation Use good judgment in determining a suitable course of action and leave a case note. (i.e., walk in office)
    The case is controlled at your campus The TP indicates he/she is ready/prepared to fax the information while on the call
    1. Provide the TP with appropriate unit e-Fax number, to submit the additional documentation, or signed consent.

    2. Request the case using normal procedures, see IRM 4.19.7, IMF Automated Underreporter (AUR) Technical System Procedures - Requesting Cases.


    If the response is received via the unit e-Fax, be sure to input the received date in the IRS Received date window.

    Note:

    If needed, the Call Site will provide the site (clerical) e-Fax number.

    The case is controlled at your campus The TP indicates they wish to fax in their agreement to the AUR issue with or without Form 9465 Leave a case note to clearly document the TP's intent to fax a signed consent. If needed, provide the TP with the (clerical) e-Fax number.
    The case is controlled at your campus The TP indicates he/she will fax the information in later. Provide the TP with appropriate (clerical) e-Fax number, to submit the additional documentation, or signed consent.
    The case is controlled at your campus Neither faxing nor mailing meets the TP's situation Use good judgment in determining a suitable course of action and leave a case note (i.e., walk in office).
  5. If the TP provides acceptable information for a recomputed notice to be generated, issue the notice. It is not necessary to wait for the new figures to be provided by the TP in writing since the recomputed notice will be provided to the TP for signature. If the case is in the Statutory Notice phase, this procedure can be done ONLY for a decrease in the amount of tax shown on the Statutory Notice.

    1. Select Control, Case, univ Work.

    2. Click the "Yes" button to select the case to work.

    3. Rework the case. If PTC is recalculated, print the PTC calculation; see IRM 4.19.3.15.6, Net Premium Tax Credit (PTC). Follow local procedures to route the print to the controlling site.

    4. Leave a case note to document the information provided for the recomputed notice.

    5. Input the correct PC.

    6. After all the necessary action are complete (including review if necessary), release the case.

      Caution:

      If you do not work the case, you must use IPC RF to refile it back to the original batch. If the suspense batch has aged a message displays "Invalid Process Code - Batch is aged" . Take necessary actions to issue a letter or move the case to the next phase.

      Note:

      If the user attempts to control a case that is not in a Suspense or Purge batch, the following message appears: "Error: Case is not in a batch allowed for Universal Work Case." If the case is controlled at another site, leave a case note and only check the ACTION REQUIRED if there is further action that can be taken by the other campus.

  6. If the TP requests an extension to respond to a CP 2501:

    1. Inform the TP that they have been granted a 15 day extension. Advise the TP to respond as soon as possible and that if the response is not received within 45 days of the notice date, a subsequent contact will be initiated. Leave a case note on the Case Note/TP Info screen documenting the call.

      Exception:

      If assistor is able to grant extension without accessing the case it is not necessary to leave a case note documenting the call.

    2. DO NOT GRANT A SYSTEMIC EXTENSION.

  7. If the TP requests an extension to respond to a CP 2000 Notice and it is not necessary to respond to the TP with a letter:

    1. Determine the 30th day from the notice date by either calculating the date (based on the notice issuance date) or asking the TP to provide the "You Must Return the Response Form by" or "What Happens if you don’t respond by" date as shown on page 1 of the CP 2000 Notice.

    2. Use the table below to determine whether a systemic extension (IPC 6X) needs to be granted.

      If Then
      The call occurs before the date to respond to the CP 2000 Notice (i.e., before the 30th day).
      1. DO NOT grant a systemic extension.

      2. Leave a detailed case note on the Case Note/TP INFO screen.

        Exception:

        If assistor is able to grant extension without accessing the case it is not necessary to leave a case note documenting the call.

      The call occurs either on or after the date to respond to the CP 2000 Notice (i.e., on or after the 30th day).
      1. Select Control, Case, univ Work.

      2. Click the "Yes" button to select the case to work.

      3. Document the extension request with a detailed case note on the Case Note/TP INFO screen.

      4. Input 6X (CP 2000).

      5. Release the case.

    3. Inform the caller that he/she has an additional 30 days to respond. If the caller requests a specific date, use the table below to determine the date to provide.

      If Then
      The call occurs before the date to respond to the CP 2000 Notice (i.e., before the 30th day). Provide a date that is either 30 days from the date of the call or 30 days from the date to respond to the CP 2000 notice.

      Note:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      The call occurs either on or after the date to respond to the CP 2000 Notice (i.e., on or after the 30th day). Provide a date that is 30 days from the date of the call or the date IPC 6X was input.

    Do not grant multiple extension requests unless extenuating circumstances apply. Leave a detailed case note justifying each additional extension request.

    Note:

    All AUR letters can be created and sent in Universal Work.

  8. If the TP requests an extension to respond to the Letter 2626C issued after a CP 2000 but prior to a Statutory Notice:

    1. Inform the TP they have been granted a 30-day extension from the date of the call to respond to the notice.

    2. Advise the TP to respond as soon as possible and if the response is not received within 30 days of this call a subsequent contact will be issued.

    3. Select Control, Case, univ Work.

    4. Document the extension request in a detailed case note in the Case Note/TP INFO screen.

    5. Input IPC 6X (CP 2000).

    6. Release the case.

      Note:

      Do not grant multiple extensions unless extenuating circumstances apply. Leave a detailed case note justifying each additional extension request.

  9. If the TP requests an extension to respond to the Statutory Notice:

    1. Do not grant the extension.

    2. Advise the TP that the period of time to provide a response or to petition the U.S. Tax Court cannot be extended.

    3. Leave a detailed case note on the Case Note/TP INFO screen.

  10. If the TP has information that would allow you to close the case no change; ex. Oral Statement:

    1. Select Control, Case, univ Work.

    2. Click the "Yes" button to select the case to work.

    3. Leave a case note explaining why you are closing the case.

    4. If the case is Virtual check the Case History for an indication of a prior correspondence.

    5. Input appropriate PC.

    6. If the case is Virtual and in CP 2000/CP 2501 status, enter "N" in the SOURCE DOC field in the Process Code window unless Case History has an indication of a prior correspondence.

    7. Release the case.

  11. If the TP has information that would allow you to make a change on a closed case (i.e., a RECON) from BT 96 see IRM 4.19.3.20.2.4 (18), Case Specific Inquiries.

  12. If the TP provides information that will not result in a change to a closed case (i.e., a RECON) from BT 96, do not check the action required box on the CASE Note window. The following are examples (not all-inclusive) when no action is required:

    • Requesting a payment plan

    • Copy of a CP 2501 or CP 2000 Notice

    • Requesting a refund to be applied to tax liability

    • The TP will fax information

4.19.3.20.3  (09-01-2004)
Instructions Specific to Income/Issue Types

  1. The following instructions provide guidelines for working specific AUR issues.

  2. See IRM 4.19.3.4.8, Fraud Referral Program, for potential FRAUD referrals.

4.19.3.20.3.1  (08-26-2016)
Wages

  1. If the TP replies the U/R income is a STIPEND (scholarship/fellowship) and is excludable from income, follow procedures in IRM 4.19.3.7.1.4, Fellowships, Grants, and Stipends.

  2. If the TP responds that the income identified as underreported is strike benefits that did not exceed the amount of his/her contributions to a strike benefit fund, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Income of this type is taxable ONLY when it exceeds the amount contributed.

  3. If the TP responds that unreported wages are nontaxable sick pay, and states:

    • He/she paid the premiums, and provides payer documentation, consider the issue resolved.

    • The employer paid the premiums, correspond with the TP and advise that sick pay is taxable.

    • Both the TP and the employer paid the premiums, issue a Recomputed Notice, Statutory Notice, or Supplemental Report on the amount of sick pay the TP actually received from payments made by the employer.

  4. If the TP responds that the unreported wages are nontaxable Medicare waiver or difficulty of care payments or are excludable per Notice 2014 - 7, accept the wages as reported. The TP is entitled to claim any W/H on these payments.

  5. If the TP's response includes an SSA determination letter on the WAGE IR(s) in question, consider the issue resolved. As SSA has already made a determination, do not prepare a Form 9409, IRS/SSA Wage Worksheet.

    Note:

    A TP response indicating contact with SSA is not justification to delete WAGE IR(s). Issue a Letter 2626C to request a copy of the SSA determination.


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