4.19.17  Non-Filer Program

Manual Transmittal

October 01, 2015


(1) This transmits revised IRM 4.19.17, Campus Examination Non-Filer Program.


This section contains information on Non-Filer Program procedures for administrative matters and provides a reference for common issues and related items that might be found on tax returns. Throughout this revision there are references to other IRMs which may contain related information needed when working cases.

Material Changes

(1) Editing and grammar changes throughout the document. Content rearranged to improve information flow and document readability.

(2) (2) -Updated to reflect Operations Manager periodic review of inventory selection to Workload Selection periodic review.

(3) (5) -Clarified continued use of assigned Non-Filer Source and Project codes when delinquent returns issues are selected.

(4) -Mandatory Review content combined into same section.

(5) -Removed GAO review information from Large Dollar Case content.

(6) 4.1.-17.3.10 -Updated Statute of limitations information to include reference to IRM 25.6.1 to ensure consistency in verbiage used.

(7) Added closures from listing from HQ and emphasized re-input of –A freeze after AIMS closure.

(8) - Added use of SSIVL to identify and work posted returns.

(9) -Added reference to IRM 5 for Math Error guidance when Examination was not going to continue for program consistency.

(10) -Changed reference for income verification to IRM 5 for ASFR/Non-Filer program consistency.

(11) -Added NFR closures.

(12) &2 -Added information about interest free period.

(13) -Updated title and included Unclaimed/Refused Mail.

(14) Added additional guidance for Refund Hold Inventory.

(15) Added reference to IRM 5 for program consistency.

(16) Deleted Exhibit for Under-reported Income Taxability; refer to IRM 5 for ASFR/Non-filer program consistency.

Effect on Other Documents

(1) This material supersedes IRM 4.19.17, dated 07/13/2012.


This IRM is intended for the use of the SB/SE Campus Examination Operations.

Effective Date


Scott Irick, Director,
Examination/AUR Policy  (01-05-2010)
Non-Filer Program

  1. The Non-Filer program, also known as SFR (Substitute for Return), and its automated version, Automated Substitute For Return (ASFR) were developed to contact taxpayers who have not filed tax returns voluntarily and for whom income information is available to substantiate a significant income tax liability.

  2. Internal Revenue Code Section (IRC) 6212 authorizes the Service to send a notice of deficiency when a taxpayer appears to have a filing requirement but does not comply by voluntarily filing a tax return.  (01-05-2010)
IRC Section 6020(b) Certification

  1. The Service has the authority to prepare returns for any person who fails to submit a return required by Internal Revenue law or regulation at the time prescribed, or makes (willfully or otherwise), a false, or fraudulent return. The return is prepared from the personal knowledge of the Service's employee or from information which can be obtained through testimony or otherwise.

  2. IRC § 6020(b) provides that the return is prima facie good and sufficient for all legal purposes, however despite this language, for most purposes of the IRC, the section 6020(b) return is not treated as a return filed by the taxpayer. For example be aware of the following:

    1. The amount shown as due on an IRC § 6020(b) return must be assessed under the deficiency procedures.

    2. An IRC § 6020(b) return does not start the statute of limitations on assessment.

    3. An IRC § 6020(b) return does not stop the Failure to File (FTF) Penalty.

    4. An IRC § 6020(b) return prepared using the Married Filing Separate (MFS) filing status will not prevent taxpayers from electing a Joint filing status under IRC § 6013(b).

  3. IRC § 6020(b) pertains to individual income tax returns. Such returns may be automatically generated by the Campus or manually prepared with reports of proposed tax adjustments.

  4. When the taxpayer has not filed an individual income tax return, the Service needs to create a valid IRC § 6020(b) return to apply the Failure to Pay (FTP) Penalty.

  5. The Tax Court does not consider a mere assessment of tax or FTP penalty to constitute a "return" under the provisions of IRC § 6651(a) (2) and will not sustain the penalty. Therefore, to sustain a FTP penalty on a taxpayer who has not filed a return, the Service must, IN ALL CASES, properly process an IRC § 6020(b) return or have the taxpayer sign an appropriate return according to the following Form 13496 Certification procedures.  (01-05-2010)
Form 13496 Certification Procedures

  1. There are two different processes for certifying a valid IMF IRC § 6020(b) return. The first is the Report Generation Software (RGS)/Automated Correspondence Exam (ACE) procedure, the other is Form 13496, IRC Section 6020(b) Certification.

  2. Electronic Form 13496 - The RGS/ACE IRC § 6020(b) Certification and attached documents are generated systemically. Under Exam RGS/ACE procedures, the data that constitutes a valid return under IRC § 6020(b) includes computation of the taxpayer’s tax liability for the tax period in question and a completed Electronic Certification form with the electronic signature of the delegated IRS employee.

  3. Paper Form 13496 Procedures - Form 13496 MUST be completed with a live signature if not generated systemically through RGS/ACE and MUST be dated on or after the date the 30-day letter (or revised 30-day letter) is signed and dated such that the date of the certification is identical to, or later than, the 30-day letter. The completed Form 13496 MUST:

    1. Identify the taxpayer by name and taxpayer identification number.

    2. Contain sufficient information from which to compute the taxpayer’s tax liability, Form 4549, Income Tax Examination Changes (or the equivalent such as Form 4549-A) and Form 886-A, Explanation of Items or the equivalent.

    3. Purports to be a valid IRC § 6020(b) return.

    4. Be properly signed and dated.

  4. Form 13496 may not be prepared or dated after the date of the 90-day letter.

  5. Whenever the examiner revises a report of proposed adjustments that increases the total tax liability of the taxpayer (without regard to whether or not the revised report is reissued to the taxpayer), a re-certification is required on another Form 13496 dated on (or after) the same day as the revised report.

  6. When the report of proposed adjustments involves more than one tax year, create a separate Form 13496 for each year and attach each one to a photocopy of the report for each year.


    Form 13496 is an internal use only form and should not be sent to the taxpayer(s).  (01-05-2010)
Non-Filer Strategy

  1. The National Non-Filer Strategy is directly aligned with the Service’s effort to identify non-compliant taxpayers and design methods to encourage their compliance.

  2. The Campus Examination Operations participate in the Non-Filer Strategy either:

    • Directly under the guidelines in the IRM or

    • By providing support for Area Offices (AO)in their Non-Filer Assistance Program efforts.  (10-01-2015)
Non-Filer Inventory & Responsibility

  1. Headquarters Examination establishes the priority of cases to be selected based on the availability of cases identified through the Collection Inventory and other Compliance Service initiatives for investigation by Examination.

  2. Headquarters Examination Workload Selection performs periodic reviews of inventory selected, addresses inventory selection concerns and improves case selection by modifying selection criteria or suggests new initiatives.  (01-05-2010)
Non-Filer Processing

  1. The examination begins when a compliance check reveals filing delinquencies with potential for tax assessment.

  2. In most cases the Non-filer case is worked through ACE processing and will move systemically through the Correspondence Exam process without Correspondence Examination Technician intervention unless a return or reply is received from the taxpayer.

  3. There will be instances when a Non-filer case rejects from ACE processing. If these cases cannot be corrected and re-introduced into batch, then a manual report must be prepared.  (01-05-2010)
Audit Information Management System (AIMS) Controls

  1. Accounts selected for the Exam Non-filer program will be established on AIMS for each tax year as follows:

    1. Master File Tax (MFT) 30.

    2. Transaction Code (TC) 424.

    3. Status Code 08.

    4. Source Code, see Non-Filer Source & Project Codes discussed later.

    5. Project Code (PC), see Non-Filer Source & Project Codes discussed later .

    6. Employee Group Code (EGC) 5XXX.

    7. Primary Business Code (PBC) 2XXX .

    8. Push Code (PC) 036.

    9. Activity Code based on taxpayer Total Positive Income (TPI).

  2. The filing status will be Single or MFS.  (10-01-2015)
Non-Filer Letters

  1. The following letters are used most often in the Non-filer Program and have the same suspense time frames as other Correspondence Exam letters, i.e. 45 days for most letters except Statutory Notice Of Deficiency (SNOD), which is suspended for 105 days, or 165 days for a foreign address. A few letters, such as Disallowance letters, will not be suspended.

    1. Letter 105C – Claim Disallowance – Barred Refund.

    2. Letter 106C – Partial Disallowance.

    3. Letter 143C – Missing Signature.

    4. Letter 474C-Math Error.

    5. Letter 692 – Response to the taxpayer before SNOD.

    6. Letter 555 – Response to the taxpayer after SNOD.

    7. Letter 692 (SC) – Response to the taxpayer, Revised Report.

    8. Letter 1862 – Initial Contact Letter (ICL). This is considered a combo letter as the Form 4549 Examination Report will also be sent as part of the initial contact.

    9. Letter 2469C – ASFR Possible Refund.

    10. Letter 3219 – Statutory Notice of Deficiency (SNOD).

    11. Letter 4391 – Non-Examination closure.

    12. Letter 4392 – Combat Zone. Examined/Non Examined closure.  (10-01-2015)
Non-Filer Source & Project Codes

  1. Source Code 24, Substitute for Return, and 25, Non-filer Strategic Initiative-High Income Non-filer are used for Non-filer program work. Do not update from Source Code 25 to another Source Code or to Source Code 25 from another Source Code.

  2. Source Code 24 with Project Code 0277 will be used for initiating additional Non-filer cases identified during the course of working other program work upon acceptance by Classification.

  3. Project Codes 0277, Non-filers, and 0422, State RAR Initiative, are commonly used for identifying projects worked within the Non-filer program.

  4. Refund Hold cases will be placed in Project Code Project Code 0277 with Tracking Code 0911 in SBSE. Project Code 0655 was previously used in W&I.

  5. The Source and Project code will remain the same on Non-filer cases when additional issues such as large, unusual, or questionable (LUQ), are selected based on the delinquent return for program tracking purposes.  (01-05-2010)
Non-Filer Technique Codes

  1. The following Technique Codes (TC) will be used when closing all Non-Filer cases :

    1. A "2" = Correspondence Received. The definition of TC 2 per IRM is Correspondence Examination. For tracking purposes, we will apply TC 2 whenever correspondence is received so we can capture closure information where taxpayers have responded.
      Valid with DC 04, 08, 09, and 10.

    2. A "6" = No Response, Unclaimed, and Refused.
      Valid with DC 01 and 10.

    3. A "7" = Undelivered Mail.
      Valid with DC 13.  (10-01-2015)
Non-Filer Disposal Codes

  1. See IRM, Non-Filer Closures for commonly used Disposal Codes (DCs).  (10-01-2015)

  1. Workpaper documentation is extremely important and leaves an audit trail of the actions taken by the Correspondence Examination Technician. Refer toIRM Workpapers for All Cases, for additional information. Some of the items that must be documented on the Non-filer workpapers are:

    1. Return received date.

    2. Research performed to validate return, such as spouse and dependent TINs.

    3. Income verification.

    4. Referrals for LUQ, Frivolous, and fraudulent issues. Documentation should include decision(s) from the referral.

    5. Penalty assessments and reasons for abatements.

  2. Below are examples of appropriate workpaper documentation:

    Example #1: (DATE of action) (TE Initials) Received filing status 2 signed return (IRS received date), Researched indicates that spouse has not filed and dependents are not claimed on another return. Taxpayer has U/R NEC of $ amount. Taxpayer also has LUQ contributions and EBE. Update entity for Joint filing. Close case using partial procedures. Issue Letter 692. RSED expired; hold excess credits until final closing.

    Example #2: (DATE of action) (TE Initials) Received filing status 2 signed return (IRS received date), Researched indicates that spouse has not filed and dependents are not claimed on another return. All income reported. taxpayer also has LUQ Schedule C AO issues, refer to Classification. Received back from Classification, return accepted as filed. Update entity for Joint filing. Close case using appropriate DC. RSED expired credits to Excess Collection.

    Example #3: (DATE of action) (TE Initials) Received filing status 2 signed return (IRS received date), Research indicates that spouse has not filed and dependents are not claimed on another return. All income reported. Schedule C for EITC purposes refer to Classification. Received back from Classification, accept as filed, and close using appropriate DC.  (01-05-2010)
Partial Assessments

  1. Use partial assessment procedures to assess the secured delinquent return if a SFR has posted and the examination is continuing or the taxpayer is appealing the reasonable cause determination.

  2. Ensure the return has been validated, prior to making a partial assessment per the return.

  3. DO NOT resolve credit balances on partial assessments until final case closure.

  4. Update filing status and name line, if applicable, and Assessment Statute Expiration Date (ASED) as appropriate.

  5. Do not update the activity code until after the examination is completed.  (10-01-2015)
Contacts After Partial Assessments

  1. Follow procedures in IRM 4.19.13 and IRM 4.19.15 for subsequent contacts with the taxpayer after a partial assessment.

  2. If No Reply after SNOD has already been issued and the taxpayer’s filing status is Single, Head of Household, or MFS and the increase in tax does not meet new deficiency guidelines, allow the SNOD to default on Unagreed and/or No Reply cases before making the assessment per the corrected report.

  3. If the Non-Filer SNOD has already been issued and the taxpayer’s filing status per the secured return is Joint, a new SNOD must be issued in the Joint name to allow the spouse the same deficiency rights the Non-Filer taxpayer received prior to making the assessment per the corrected report. It is not necessary to wait until the Non-Filer SNOD has expired before issuing a Joint SNOD or to rescind the previous Non-Filer SNOD.  (10-01-2015)
Mandatory Review

  1. Several reviews are mandatory during Non-Filer case processing:

    1. Deficiencies of $500,000

    2. ACE Manual Rejects

    3. Closed Cases over $50,000  (01-05-2010)
Deficiencies of $500,000-Prior to Initial Contact Letter (ICL

  1. Prior to issuing the initial contact letter, Non-filer cases with deficiencies of $500,000 or more will be rejected from ACE processing for review by Tax Compliance Officers or Revenue Agents in Classification to validate income sources are accurate.

    1. If research indicates income belongs to the taxpayer, then place the case back into ACE for ICL.

    2. If research indicates income previously reported on another return, close the case DC 37.

    3. If research indicates that the income does not belong to the taxpayer, close the case DC 39.  (10-01-2015)
ACE Manual Rejects

  1. Cases rejected from ACE for "manual" reports must be reviewed by lead or manager.  (10-01-2015)
Closed Cases With Deficiencies of More than $50,000

  1. FollowIRM, Deficiencies More Than $50,000-Exam Paper Discretionary, Exam Pass-through Entities, for review of cases with deficiencies of more than $50,000.  (10-01-2015)
Large Dollar Case assessments over $100 Million

  1. Due to system restraints, the maximum amount of a single assessment is $99,999,999.99. Therefore, if the assessment is $100 Million dollars or more it needs to be input with two separate transactions, one for $99,999,999.99 and a separate one for the difference between the total assessment and $99,999,999.99, Whenever the assessment is over $100 million the case must:

    1. have managerial approval, and

    2. be manually monitored by both the manager and the employee who inputs the assessment to ensure both assessments post correctly.  (10-01-2015)
Statute of Limitation

  1. All returns must be reviewed to ensure protection of all statutes of limitation. See IRM 25.6 for specific instructions on statute protection. See IRM to determine the return received date, and to determine the date the return is considered filed under the IRC..  (10-01-2015)
Assessment Statute Expiration Date (ASED)

  1. The general rule is that an assessment of tax must be made within three years from the date a return is filed or the due date of the return whichever is later. Generally, this means that tax must be posted or journalized to Master File within 3 years from the received date of the return. Additionally, the Service has three years to assess additional tax due. See IRM 25.6.1 for exceptions to assessing additional tax within three years from the received date or due date of a return whichever is later and for a more thorough explanation of the ASED, and the conditions that extend the ASED.

  2. Non-Filer/SFR default assessments and the SFR dummy TC 150 do not start the running of the ASED. Therefore, the ASED must be set when processing delinquent returns.

  3. Additional review is necessary when a joint return is filed, and at least one spouse previously filed a return. See IRM for limitations to processing separate to joint returns.

  4. Non-Filer delinquent returns that are tax increases must be posted to Master File within three years of the received date. If a return is received with an ASED within 90 days, see IRM

  5. When processing delinquent returns , determine the ASED. If the ASED is not posted on IDRS or the ASED is not correct on IDRS, input the ASED on IDRS. Generally, the ASED is set three years from the received date of the return. See IRM 25.6.1 to determine the date the return is considered filed under IRC when the return received is not valid.

  6. To set the ASED on IDRS, input a TC 971, Action Code (AC) 282 using CC REQ77. The required fields for input are:

    • TC 971

    • The ASED (correct return received date plus 3 years) in the Transaction Date Field.

  7. To correct an ASED posted to IDRS, input a TC 560 using CC REQ77. The required fields for input are:

    • TC 560

    • The ASED (the correct received date plus 3 years) in the Extension Date Field.


    When TC 976 is posted, the ASED is systemically set on IDRS. It is not necessary to input TC 560 in these cases unless the generated ASED is incorrect on IDRS.  (10-01-2015)
Refund Statute Expiration Date (RSED)

  1. Refer to IRM , Refund Statute Expiration Date (RSED) for guidance.

  2. ASFR returns are the same as delinquent returns received as a result of a Non-Filler examination.  (10-01-2015)
Undeliverable Mail

  1. Follow IRM in processing undelivered mail.  (01-05-2010)
Non-Filer Penalties

  1. A SFR IRC §6020(b) return must be prepared before penalties can be considered.

  2. Penalties to be considered if no return is filed and the case is closed through deficiency procedures are:

    1. Failure to File Penalty (FTF) IRC 6651(a)(1),

    2. Failure to Pay Penalty (FTP) IRC § 6651(a)(2), and

    3. Estimated Tax Penalty IRC § 6654 or IRC § 6655.

  3. Penalties to be considered on secured delinquent returns and IRC § 6020(a) returns are:

    1. Failure to File Penalty IRC § 6651(a)(1).

    2. Failure to Pay Penalty IRC § 6651(a)(2).

    3. Estimated Tax Penalty IRC § 6654 or IRC § 6655.

    4. Fraudulent Failure to File IRC § 6651(f). The burden of proof is on the Government to establish fraud. Refer to IRM for examples of Fraud indicators and on how to refer returns to the Campus/Exam Fraud Coordinator.

    5. Accuracy Penalty IRC § 6662(a).  (01-05-2010)
Request for Penalty Relief

  1. The initial request for relief may occur either during or after an examination.

  2. When the tax liability has been resolved, the FTF and FTP penalties are applied unless the taxpayer has provided an explanation and documentation for Reasonable Cause (RC).

  3. Refer to IRM as a resource guide for the non-assertion of penalties due to RC.

  4. If the taxpayer is entitled to penalty relief, document workpapers that RC was considered, and how RC was established.

  5. If the taxpayer is not entitled to penalty relief, document workpapers that RC was considered and why RC does not apply and what penalties are to be assessed when the case is forwarded to AIMS as both partial and final assessments. Also include the date to start the FTP penalty if the FTP penalty applies.


    Compute the FTP penalty on both delinquent returns and IRC Sec. 6020(a) returns from the due date of the return.  (10-01-2015)
Taxpayer Replies

  1. Taxpayer replies include telephone inquiries, filed returns, and written correspondence. The reply may be in response to a 30-Day Letter or SNOD. Follow IRM when processing taxpayer replies.

  2. Update correspondence to the appropriate reply status per IRM


    Even though a Non-filer return does not meet Policy Statement P-21-3 criteria for Interim Letter purposes, it is still considered correspondence and must be updated to Status 54, with the earliest IRS received date upon receipt of the return in Exam, unless the case is in Status 24. When in status 24, update the crrespondence date to reflect the earliest IRS received date.

  3. Refer taxpayers to the Taxpayer Advocate Service (TAS) when the contact meets TAS criteria, see IRM, and you can't resolve the taxpayer's issue the same day, refer to IRM , Same-Day Resolution by Operations. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward it to TAS in accordance with your local procedures.  (10-01-2015)
Correspondence and Telephone Inquiries

  1. When responding to telephone inquiries, disclose no tax return information until reasonably certain the person making the inquiry is the taxpayer or his/her authorized representative. For complete disclosure information, see IRM, General Disclosure Guidelines.

  2. During the telephone contact: and telephone inquiries on Non-filer cases without a return will often ask general questions such as how to secure prior year forms, requests for extension, or explain why the taxpayer is not required to file. The table below provides a list of the most common taxpayer replies and guidelines on how to respond.

    Taxpayer needs more time to file a return
    • Request for additional time to file prior to SNOD will be considered on a case by case basis dependent on the taxpayers need for the additional time. Extensions past 30 days should not be given.

    • If SNOD has been issued, DO NOT grant an extension. Explain the time remaining on the SNOD and that the account will be assessed per the Exam report if not received within this time. Also explain returns can be considered as reconsideration but, it is to the taxpayer’s benefit to file as soon as possible. See Exception below.


    Use professional judgment in holding a case when SNOD has expired. If the taxpayer indicates the return is in the mail or will be faxed/sent within a week to ten days, it makes better business sense to hold the return a few additional days than to make the default assessment and then have to process the return as an audit reconsideration.
    Taxpayer filed Jointly with spouse
    • Research IDRS for fact of filing. If Joint return was filed, close case per Non Examined procedures.

    • If return was not filed, request a signed copy be faxed or mailed to the appropriate address.

    Taxpayer states they are not required to file
    • Verify through research and/or additional contact with the taxpayer reason(s) why they are not required to file.
      Refer to Non Examined Closing procedures.

    Taxpayer is in a Combat Zone
    • If taxpayer or "related person" responds that the taxpayer is in a Combat Zone follow Combat zone procedures.

    Taxpayer is in a Disaster Zone
    • Follow IRM 25.16 Disaster Assistance and Emergency Relief procedures in responding to taxpayers.

    Taxpayer states a refusal to file
    • Refer to IRM Frivolous Filer for reasons taxpayers refuse to file.

    Taxpayer requests abatement of penalty and/or interest
    • Follow IRM 20.1 and IRM 20.2 in considering requests for abatement of penalties and/or interest.

    Taxpayer requests copy of income information
    • Send IRP information. Only include spousal IRP information if proper authority has been granted by spouse.

    Taxpayer wants to know how to get blank prior year forms and tax tables
    • Refer taxpayer to IRS website http://www.irs.gov/formspubs /.

    Taxpayer states that he/she did not receive income reported on the IRP payer document
    • Attempt to verify IRP information through third party contacts.

    • If the third party cannot be located, has ceased to operate, has not retained records from which verification can be derived, or other circumstances suggest that the IRP payer information is not reliable or accurate, remove the income from the Non-filer deficiency proposal report.

    • If removing income from the Non-filer deficiency proposal report reduces the total income below the income level for filing a tax return, close the case DC 39. .

    • If the payer information can be verified, notify taxpayer and proceed with Non-filer examination.

    If the taxpayer states they are a victim of Identity Theft
    • Refer to IRM

  3. Document workpapers for telephone calls and correspondence to/from the taxpayer with actions taken and decisions made.  (12-16-2010)
Return Received

  1. Delinquent returns can be received directly in the Operation from the taxpayer, posted to Master File as a duplicate return (TC 976/977), or routed from Accounts Management (AM).


    If the return has been adjusted by AM, per IRM, continue to follow all necessary actions as listed below before closing the examination. If all income is reported, there is no Large, Unusual or Questionable (LUQ) issues, and the return does not meet specialty criteria follow normal closing procedures and address the adjustment by following IRM


  2. Professional judgment should be used in the review, acceptance, and selection of return(s) with LUQ issues. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. A return is not considered filed for interest computation purposes until the return is received in processable form.

  4. A return is in processable form if it:

    1. Is filed on a permitted form;

    2. Contains the taxpayer's name, address, and identifying number;

    3. Has the required signature(s); and

    4. Contains sufficient information (whether on the return or on required attachments) to permit the mathematical verification of the tax liability shown on the return.

  5. If the requested information is received after the return due date, the return is processed with a "Return Processable Date (RPD)" reflecting the date the information was received. This date is also known as the "Correspondence Received Date (CRD)." The CRD is used to calculate interest the IRS owes on refunds.

  6. The "RPD" date should be input on secured Non-Filer returns even if a balance due. This is needed since the taxpayer may file at a later date an "Amended" tax return which at that time may contain a refund.


    If the RPD date is not input the credit interest will revert to the "IRS received date." which is the date the SFR TC 150 was processed and this is the incorrect date for credit interest.  (10-01-2015)
NFR (Non-Filer Reject) Return Received Prior to Non-Filer Initial Contact Letter (ICL)

  1. A NFR is a return that is received in the Service after the posting of the TC 150 Dummy/SFR but prior to the issuance of the Initial Contact Letter (ICL) and can be identified by:

    1. AIMS Status 08 or less

    2. TC150 SFR

    3. May or may not have a TC 976. If the return was sent directly to Exam, a TC 976 will not be on the account.

  2. Exam will either receive the return directly or a listing from HQ of systemically identified NFR cases in EGC 5065. The NFR listing are sent from Headquarter to each campus monthly. NFR returns will be worked in the Individual Master File (IMF) AM site of the posting of the TC 976, or if no TC 976 posting, the IMF AM site where the taxpayer would have filed had they filed a timely return.

    1. If the return is received in Exam and there is no TC 976 posted, write "NFR" across the top of the return and forward to the AM site where the taxpayer would have filed had they filed a timely return.

    2. If closing per the listing received from Headquarters, do not order the returns and close the cases immediately.


    Review the return if already in your possession and TC 976 posting to determine the Assessment Statute Expiration Date (ASED). If the ASED is within 180 days, update the ASED, ensure sufficient time for getting the return assessed, and expedite routing of the return to ensure assessment will be made within the ASED period.

  3. AM is responsible for adjusting the accounts and responding to any TAS inquiries on NFR cases. If an OAR (Operational Assistance Request is received in Exam, return it to TAS stating the case is a NFR worked by AM. Refer TAS to IRM

  4. Close NFR AIMS control base:

    1. If -A freeze is on account, it must be released prior to closing the AIMS control.

    2. Close the AIMS control Non-Examined.

    3. Once the AIMS control has been closed, input TC 971 (using REQ 77) with an action code of 010. Monitor the case to ensure the -A freeze posts.


      The -A freeze must be on the module after AIMS control is closed so AM is aware that a return has been received and needs to be processed.  (10-01-2015)
Return Posted as TC 976/977 or Received in Operation After Initial Contact Letter

  1. An -A Freeze should be present on accounts with a TC 976/977 and must be resolved before a case can be closed off AIMS.

  2. If case is in Status 08 or below, follow IRM, NFR (Non-Filer Reject) Return Received Prior to Non-Filer Initial Contact Letter (ICL), above.

  3. With the exception of cases is status 08 and below, cases in which a return is received must be updated to reply status upon receipt in the Operation.

  4. SSIVL listings should be used to identify all open Non-Filer accounts that have a TC 976/977 posted. .Do not allow the case to sit in an open AIMS status until it moves to the next status and rejects before trying to secure the TC 976/977 document.

  5. Every effort should be made to secure the TC 976/977 document as soon as possible:

    1. Most TC 976/977 documents have been scanned into the Correspondence Imaging System (CIS) and should have an open IDRS control by AM. If possible,,secure a copy from CIS for expedite processing of the taxpayer’s return.


      Returns printed from CIS may not always reflect the actual IRS received date and may have a received date that is later than the TC 976 posting date. If this is the case, use the TC 976 date as the earliest IRS received date in updating AIMS Status and ASED.

    2. If unable to secure the return from CIS, and return information is available on Tax Return Data Base (TRDB), print a copy of the TRDB return information as proof of filing a signed return.

    3. If the TC 976/977 document is not available on CIS or TRDB take the following steps:

    1. Make one attempt to ESTAB for the TC 976/977. If the return has not been received within 4 weeks contact the taxpayer for a signed copy.

    2. Inform the taxpayer by telephone or correspondence that the return they previously submitted is not readily available and that we need another "signed" copy. The copy of the return can be faxed or mailed. Suspend the case for 45 days. If the taxpayer provides a signed copy of the return, update the ASED using the posted TC 976/977 date. If the taxpayer does not provide a signed copy of the return, proceed with the Non-Filer case and default if no reply received after SNOD period expires.  (10-01-2015)
Return Validation

  1. Before the taxpayer’s account can be adjusted all forms, schedules, and attachments must be manually verified. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Review the entire return for missing signature(s), schedules, math errors, etc., before contacting the taxpayer.

  3. At least one phone attempt should be made and documented in workpapers before corresponding with the taxpayer.  (10-01-2015)
Unsigned Return

  1. A taxpayer is not considered to have filed a tax return which begins the period of limitations on assessment (ASED) until the taxpayer files a valid tax return. An unsigned return is not considered a valid tax return.

  2. Return information on TRDB is considered a signed return. A faxed signature is also acceptable.

  3. If signature is missing, try to contact the taxpayer by telephone to obtain a signed return. If contact by telephone is not successful, send Letter 143C, Request for Signature, and suspend the case.

  4. If no reply is received after the suspense period, send the return back to the taxpayer stating the return is not acceptable due to the missing signature and that the substitute for return process will continue. Make a copy of page 1 and 2 of the taxpayer’s return before returning and associate with the Non-Filer case in Files. Proceed with the Non-filer case putting the case back into ACE.  (10-01-2015)
Entity, Filing Status, and Dependent Verification

  1. The following Entity information on the taxpayer’s return must be verified:

    1. Name of the primary taxpayer is for the correct Non-filer tax period and matches the SSN.

    2. Spouse’s name matches the SSN shown on the return and the spouse has not already filed.

    3. Dependent(s) name(s) matches SSN shown on the return and dependent(s) is not being claimed on someone else’s return.


      If the dependent’s SSN is not valid, then the following credits can not be allowed: Dependent exemptions, Child Tax Credit, Child Care Credit, and the Earned Income Credit.

    4. Verify the taxpayer’s correct address. If the address is different on the secured return from Master File verify the correct address with the taxpayer.

    5. Update Entity information as appropriate.  (10-01-2015)
Math Errors

  1. Returns must be reviewed for math errors. See IRM, for guidance with the following additions/exceptions:

    1. Document workpapers with math error(s) identified and actions taken to resolve them.

    2. If the return contains other issues that warrant continuance of the examination process, such as un/under reported income, or LUQ, partial per the figures on the delinquent return, beginning with the per return amounts. Include math error adjustment(s) with other examination issues on the examination report with an explanation on Form 886. Follow guidance in IRM Partial Assessments to continue the examination process.  (10-01-2015)
Under/Unreported (UR) Income

  1. Verify all income is reported to the IRS is reported on the return. See IRM, for guidance with the following exceptions:

    1. IRM (1) Use IRPTR to verify all taxpayer and, when applicable, spousal income is reported.

    2. IRM (2) d. Follow, follow guidance in IRM , Partial Assessments, to continue the examination process. If the return reflects a Joint filing status the exam reports (partial, corrected, and if applicable, SNOD) MUST reflect both taxpayers names.

    3. If a taxpayer has unreported tip income, ensure Form 4137, Social Security and Medicare Tax on Unreported Tip Income, is present . Notate on the Form 3198, Unreported Tip Income Case.

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