4.71.12 Case File Assembly Guidelines

Manual Transmittal

September 18, 2017

Purpose

(1) This transmits revised IRM 4.71.12, Employee Plans Examination of Returns, Case File Assembly Guidelines.

Background

IRM 4.71.12 contains procedures for assembling examined Forms 5500 series returns, Non-Return Units (NRU), Forms 5330, Forms 990-T and Forms 1040/1120 discrepancy adjustments.

Material Changes

(1) IRM 4.71.12.1, Program, Scope and Objectives, and the subsections thereunder, were added to meet the new internal controls requirements.

(2) Editorial changes were made throughout the document.

Effect on Other Documents

This supersedes IRM 4.71.12 dated August 17, 2016.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(09-18-2017)

Robert S. Choi
Director, Employee Plans
Tax Exempt and Government Entities

Program, Scope and Objectives

  1. The Employee Plans (EP) examination program was established to ensure:

    1. Compliance with the provisions of Internal Revenue Code (IRC) 401(a).

    2. That taxes related to trust assets are being properly reported.

  2. Purpose: IRM 4.71.12, Employee Plans Examination of Returns, Case File Assembly Guidelines, provides guidance for EP agents for assembling examined Forms 5500 series returns, NRUs, Forms 5330, Forms 990-T and Forms 1040/1120 discrepancy adjustments.

  3. Audience: This IRM provides procedures for agents, managers, and support staff in EP Exam.

  4. Program Owner: Director, EP Examination sets the program for the EP examination program.

  5. Program Authority: EP Examination’s authority to resolve issues is derived from its authority to make determinations of tax liability under IRC 6201.

Authority

  1. EP Examination’s authority to resolve issues is derived from its authority to make determinations of tax liability under IRC 6201. EP Examination is the division designated to determine if a retirement plan is qualified under IRC 401, and the underlying regulations, and thus, exempt from tax under IRC 501.

Program Controls

  1. Tax Exempt Quality Measurement System (TEQMS) is the quality control system used to oversee the entire examination program. For more information on TEQMS, see IRM 4.71.15.1.3, Program Controls and Program Reports - TEQMS.

  2. All examinations will be done in accordance with the Taxpayer Bill of Rights as listed in IRC 7803(a)(3).

    Note:

    Additional information may be found on the irs.gov website at www.irs.gov/taxpayer-bill-of-rights.

Acronyms and Forms

  1. This manual uses the following acronyms and references the following forms.

    Acronyms

    Acronym Definition
    Audit CAP Audit Closing Agreement Program
    BMF Business Master File
    CECA Checksheet for Employee Plans Compliance Activities
    DOL Department of Labor
    EIN Employer Identification Number
    EP Employee Plans
    ESSP Examinations Special Support and Processing (Closing Unit)
    IDRS Integrated Data Retrieval System
    IRC Internal Revenue Code (Code)
    IRM Internal Revenue Manual
    LB&I Large Business and International Division
    NRU Non-Return Unit
    PBGC Pension Benefit Guaranty Corporation
    POA Power of Attorney
    RAR Revenue Agent Report
    RCCMS Reporting Compliance Case Management System
    RGS Report Generation Software
    SB/SE Small Business /Self-Employed Division
    SFR Substitute For Return
    TE/GE Tax Exempt & Government Entities Division
    TEQMS Tax Exempt Quality Measurement System

     

    Forms

    Form Name
    Form 843 Claim for Refund and Request for Abatement
    Form 870-EP Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment
    Form 872-H Consent to Extend the Time to Assess Tax on a Trust
    Form 895-EP Notice of Statute Expiration
    Form 990-T Exempt Organization Business Income Tax Return
    Form 1040 U.S. Individual Income Tax Return
    Form 1120 U.S. Corporation Income Tax Return
    Form 1900 Income Tax Survey After Assignment
    Form 2297 Waiver of Statutory Notification of Claim Disallowance
    Form 2504 Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment
    Form 2797 Referral Report of Potential Criminal Fraud Cases
    Form 2848 Power of Attorney and Declaration of Representative
    Form 3198-A TE/GE Special Handling Notice
    Form 3210 Document Transmittal
    Form 3244-A Payment Posting Voucher - Examination
    Form 3363 Acceptance of Proposed Disallowance of Claim for Refund or Credit
    Form 4442 Inquiry Referral
    Form 4549-E Income Tax Discrepancy Adjustments
    Form 4632 Employee Plans Referral
    Form 4632-A Employee Plans Referral Checksheet
    Form 4632-B Employee Plans Referral Checksheet - IRC 403(b) Plan
    Form 4632-C Employee Plans Referral Checksheet-For FSLG-IRC403(b)/457 and Social Security Alternative Plans
    Form 5330 Return of Excise Taxes Related to Employee Benefit Plans
    Form 5346 Examination Information Report
    Form 5456 Reviewer’s Memorandum – EP/EO
    Form 5457 Response to Reviewer’s Memorandum – EP/EO
    Form 5464 Case Chronology Record
    Form 5500 Annual Return/Report of Employee Benefit Plan
    Form 5500-EZ Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan)
    Form 5500-SF Short Form Annual Return/Report of Small Employee Benefit Plan
    Form 5599 TE/GE Examined Closing Record
    Form 5650 EP Examined Closing Record
    Form 5666 TE/GE Referral Information Report
    Form 5772-A Employee Plans (EP) Workpaper
    5773-A Employee Plans (EP) Workpaper Summary Continuation
    Form 6212-B Examination Referral Checksheet B
    Form 6229 Collateral Examination
    Form 6533 Examination Referral Worksheet
    Form 8821 Tax Information Authorization
    Form 10329 Transmittal Sheet-Related Cases

     

Case File Assembly Overview

  1. The following guidelines and procedures are to help EP agents to assemble closed Forms 5500, Forms 5500-SF, Forms 5500-EZ, Forms 5330, Forms 990-T and discrepancy adjustments for Forms 1040, Forms 1120, and Non-Return Units (NRU).

  2. Save copies of all workpapers, forms and letters you generated in the RCCMS Office Documents folder using the RCCMS Naming Convention. See IRM 4.71.12 Exhibit 1 at IRM 4.71 - Employee Plans Examination Exhibits for the RCCMS Naming Convention.

  3. If the group has a scanner, scan all relevant case related documents (for example, fully executed closing agreements) received from the taxpayer or POA and save them in the RCCMS Office Documents folder using the RCCMS Naming Convention.

  4. All "agreed" Form 5500 exams can be closed fully electronic if all documents are scanned and saved in the RCCMS Office Documents folder.

  5. See IRM 4.71.12.6, Special Case File Assembly Instructions for Claims, for procedures for assembling claims case files.

  6. Use these guidelines for all cases transferred or closed to EP Mandatory Review (Mandatory Review), Special Review Group 1 (Special Review), or to ESSP.

Key Concepts

  1. Exams may involve related returns: multiple years, multiple plans, related taxpayers, and different types of returns.

    1. Assemble and process related returns together, when possible.

    2. Put each examined return in its own case file folder (unless paper files aren’t required).

      Note:

      Most "agreed" examinations can be closed fully electronic or with a limited number of paper files. See IRM 4.71.12.3, Assembly Guidelines for "Agreed" Examinations.

    3. Organize the related returns in the group of cases into packages of returns based upon return type, plan number and taxpayer. See IRM 4.71.12.2 (6) and IRM 4.71.12.2 (7) below.

  2. Prepare a separate set of workpapers for each plan examined and for each type of related return examined.

    Example:

    You examine plan #001 and plan #002 and Forms 5330 for each plan. You must prepare four sets of workpapers:

    Workpapers for Form(s) 5500 #001
    Workpapers for Form(s) 5330 #001
    Workpapers for Form(s) 5500 #002
    Workpapers for Form(s) 5330 #002
  3. The documents required in paper case files depend on whether the exam is closed as "agreed" or "unagreed" . See IRM 4.71.12.3, Assembly Guidelines for "Agreed" Examinations and IRM 4.71.12.4, Assembly Guidelines for "Unagreed" Examinations.

  4. "Unagreed" cases are those cases in which the taxpayer disagrees with the agent’s position, or agrees only in part. The case is "unagreed" if any, or all, of the following conditions exist:

    1. A qualification issue that can’t be resolved through the Employee Plans Compliance Resolution System (EPCRS) or through a Delegation Order 8-3 closing agreement.

    2. There is a disputed amount of tax due on a Form 1040, Form 1120, Form 5330 or Form 990-T.

    3. The initial tax isn’t disputed but the taxpayer can’t or won’t correct the issue giving rise to the excise tax, or the IRS doesn’t accept their correction or proposed correction (for IRC 4971 or IRC 4975 excise tax).

    4. The taxpayer refuses to file a delinquent Form 5330 or sign Form 870-EP.

    5. The taxpayer refuses to file a delinquent Form 990-T or sign Form 870-EP.

    6. The taxpayer refuses to file an amended Form 1040 or Form 1120 or sign a Form 4549-E.

  5. An "agreed" case is one that is not "unagreed" .

    Note:

    Most "agreed" examinations can be closed fully electronic or with a limited number of paper files. See IRM 4.71.12.3, Assembly Guidelines for "Agreed" Examinations.

  6. The following terms apply to paper case files (when required per IRM 4.71.12.3, Assembly Guidelines for "Agreed" Examinations and IRM 4.71.12.4, Assembly Guidelines for "Unagreed" Examinations):

    Type of File Definition and Procedures for Placement for Case Assembly
    Lead Exam File The originally assigned return. Place on top and identify it as the Lead Exam File. If the case is "unagreed" , this file should contain a complete set of workpapers, a case chronology record, a closing document (Form 5650 or Form 5599 as applicable) and the return. See IRM 4.71.12.3, Assembly Guidelines for "Agreed" Examinations, below for additional instructions.

    Note:

    For "unagreed" Forms 5500, include all correspondence shared with the taxpayer and/or POA relating to any year in the Administrative Record. See IRM 4.71.3.4.4, Administrative Record.

    Note:

    If the Lead Exam File’s complete set of workpapers encompass documents giving rise to a Related Exam (i.e., a Form 5500 exam gives rise to a Form 5330 exam) then copy the workpapers which relate to the Related Exam (i.e., Form 5330 file) and place them in the Primary Related Exam File.

    Related Exam File All returns examined with the Lead Exam File (other Forms 5500, Form 5330, 1040, etc.). Identify them by labeling these folders "Related Exam Files" . If the exam is "unagreed" , include Form 5599, or Form 5650, and the return in each file. Label one file as the Primary Related Exam File. See below.
    Primary Related Exam File The oldest year in each related Case File Package. If "unagreed" , include a complete set of workpapers, a case chronology record, Form 5650 or Form 5599 (as applicable) and the return.
    Case File Package A group of like returns. For example, you’d place all Form 5500 years examined for plan #001 for the XYZ Corporation in the same Case File Package. You’d put any Form 5330 returns for the XYZ Corporation for plan #001 in a separate Case File Package.
  7. Example: You examined XYZ Profit Sharing Plan Form 5500 for 201512 for plan #001. You found a qualification defect and a prohibited transaction between plan #001 and the disqualified person, Mr. X. These issues affected the 201512 and 201612 plan and tax years. You opened exams of the Form 5500 for the 201612 year and Forms 5330 for the 2015312 and 201612 tax years for Mr. X. XYZ Corporation didn’t agree with your proposed report for the qualification defect. Mr. X didn’t agree with the prohibited transaction. As a result, you close the entire exam "unagreed." Your exam has one group of returns, two case file packages, and four file folders:

    1. Case File Package #1 – contains Forms 5500 for plan 001 for 201512 (labeled as the Lead Exam File) and one Related Exam File for 201612 (within a separate file folder). The file folder for the year 201512 would contain a complete set of workpapers, the subject return and IDRS research. Each other Related Exam File will contain only the closing document and the subject return.

      Note:

      Since the case involves proposed disqualification of the plan, correspondence would be placed in the Administrative Record.

    2. Case File Package #2 – includes Forms 5330 for Mr. X for 201512 labeled as the Primary Related Exam File and the Related Exam File for 201612, with each return in a separate file folder. The Primary Related File folder for the year 201512 will contain a complete set of workpapers, the closing document, the subject return and all correspondence related to Forms 5330 for Mr. X. The Related Exam File will contain the closing document and the subject return.

Assembly Guidelines for "Agreed" Examinations

  1. Save copies of all workpapers, forms and letters in the RCCMS Office Documents folder using the RCCMS Naming Convention. See IRM 4.71.12 Exhibit 1 at IRM 4.71 - Employee Plans Examination Exhibits for the RCCMS Naming Convention.

    Note:

    Any documents scanned into RCCMS should be the final version of that document that includes the date and signature, if applicable. For example, if the exam closing letter is scanned into RCCMS, it must be a copy that includes the date the letter was mailed and the signature of the Director, EP Exam.

  2. If the group has a scanner, scan all relevant case related documents (e.g., closing agreements, allocation schedules, loan documents, etc.) received from the taxpayer or POA and save them in the RCCMS Office Documents folder using the RCCMS Naming Convention.

  3. For agreed Form 5500 exams, if not scanned and saved in the RCCMS Office Documents folder, the following paper documents must be in a manila folder for all agreed Form 5500 exams with a completed Form 10329 stapled on front:

    • Form 872-H (attached face down to the back of Form 5500)

    • Fully executed closing agreement

    • Form 895-EP (if required to be prepared in accordance with IRM 4.71.9.3(2), Group Manager Responsibilities and Procedures,

    • Form 5500 (if secured during the examination)

    • A copy of the check for payment of tax, penalties or interest

    • Form 2848 or Form 8821, attached to the back of the first page of the return (if there is a valid 2848 or 8821 and it's not scanned into the RCCMS Office Documents folder)

    • If the statute of limitations has been updated to alpha code "PP" in accordance with IRM 4.71.9.3(5), a copy of the memorandum of explanation (signed by the manager). See Exhibit 2 of IRM 4.71.9, Statute Control Procedures.

    • Any other paper documents necessary to document the exam trail (that are not saved in the RCCMS Office Documents folder) should also be included in the paper file.

    • Note:

      All agreed Form 5500 exams can be closed fully electronic if all documents are scanned and saved in the RCCMS Office Documents folder.

      Note:

      Form 10329 is not required if there are no related returns. See IRM 4.71.12 Exhibit 2 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 10329.

  4. Place the following paper documents in a manila folder for all agreed Form 5330 files with a completed Form 10329, stapled on front:

    • Form 870-EP (if applicable)

      Note:

      If there is no Form 870-EP and all relevant case related documents are scanned and saved in RCCMS, the exam may be closed fully electronic. Form 10329 is not required if there are no other paper files or if there are no related returns.

      Note:

      If the group has access to a scanner, Form 870-EP should also be scanned and saved in RCCMS. Make sure that the document includes the date and signature.

  5. If not scanned and saved in RCCMS, the following additional paper documents must be in a manila folder for all agreed Form 5330 files with a completed Form 10329, stapled on front:

    • Form 872

    • Form 895-EP (if required to be prepared in accordance with IRM 4.71.9.3(2), Group Manager Responsibilities and Procedures,

    • Copy of the Form 5330 mailed to the Ogden Campus

    • A copy of the check for payment of tax, penalties or interest

    • Form 2848 or Form 8821, attached to the back of the first page of the return (if there is a valid 2848 or 8821 and it's not scanned into the RCCMS Office Documents folder)

    • Any other paper documents necessary to document the exam trail (that are not saved in the RCCMS Office Documents folder) should also be included in the paper file

  6. The following paper documents must be in a manila folder for all agreed Form 990-T files with a completed Form 10329 stapled on front:

    • Form 870-EP (if applicable)

      Note:

      If there is no Form 870-EP and all relevant case related documents are scanned and saved in RCCMS, the exam may be closed fully electronic. Form 10329 is not required if there are no other paper files or if there are no related returns.

      Note:

      If the group has access to a scanner, Form 870-EP should also be scanned and saved in RCCMS. Make sure that the document includes the date and signature.

  7. If not scanned and saved in the RCCMS Office Documents folder, the following additional paper documents must be in a manila folder for all agreed Form 990-T files with a completed Form 10329 stapled on front:

    • Form 895-EP (if required to be prepared in accordance with IRM 4.71.9.3(3), Group Manager Responsibilities and Procedures

    • Copy of the Form 990-T mailed to the Ogden Campus

    • A copy of the check for payment of tax, penalties or interest

    • Form 2848 or Form 8821, attached to the back of the first page of the return (if there is a valid 2848 or 8821)

    • Any other paper documents necessary to document the exam trail should also be included in the paper file.

  8. For "agreed" Forms 1040 or 1120 discrepancy adjustments, the following paper documents must be in individual folders for each year (red folder if less than 180 days remain on the statute of limitations) with a completed Form 10329 stapled to the front (listing not only the return in the folder but also all related exams):

    • Form 895-EP (if required to be prepared in accordance with IRM 4.71.9.3(2)) if not scanned and saved in the RCCMS Office Documents folder

    • Copy of Form 1040/1120 (or RTVUE/BRTVU print)

    • Form 872 (if secured, attach face down to the back of Form 1040/1120)

    • Form 2848 or Form 8821 attached to the back of the first page of the return (if there is a valid 2848/8821 and it is not scanned and saved into the RCCMS Office Documents folder)

    • Form 4549-E

    • A copy of the check if payment is received (if not scanned and saved in the RCCMS Office Documents folder)

    Note:

    Form 10329 is not required if there are no related returns.

    Note:

    If the group has access to a scanner, these documents should also be scanned and saved in RCCMS. Make sure that each document includes the date and signature.

  9. For "agreed" NRU exams, if not scanned and saved in RCCMS, the following paper documents must be in individual folders for each year with a completed Form 10329 stapled on front (listing not only the return in the folder but also all related exams):

    • Form 2848 or Form 8821 (if secured and not scanned and saved in the RCCMS Office Documents folder)

    • Fully executed closing agreement (with original signatures)

    • Any other paper documents necessary to document the audit trail (that are not saved in the RCCMS Office Documents folder) should also be included in the paper file.

      Note:

      Form 10329 is not required if there are no related returns.

  10. Cases with less than 180 days remaining on the statute of limitations must be in red folders.

Assembly Guidelines for "Unagreed" Examinations

  1. Follow these guidelines for "unagreed" cases closed to Mandatory Review.

  2. Outside-front— Staple these items, if applicable, to the outside front of all files in order:

    • Form 10329 (if there are multiple years or related returns). List the return in the folder and all related returns.

    • Form 895-EP (if applicable).

    • Form 3198–A

  3. Complete these items on Form 3198-A:

    1. Check the box for EP.

    2. "Required Entries" section - Complete your agent information: Person to Contact, Employee ID#, Phone #, and Group.

    3. "Required Entries" section - Complete the case information: EIN/SSN, MFT, Plan # (if applicable), Year and Taxpayer's Name. Also, mark any box that applies to the case.

    4. "Required Entries" section under "Earliest Statute Date Is:" enter the statute date of the case to which the Form 3198-A is attached.

    5. "Mandatory Review/Operations" section - Select "Mandatory Review" and "Unagreed Case."

  4. Complete these other items on Form 3198-A for discrepancy adjustments:

    1. "Special Features" section - Indicate the case involves a discrepancy adjustment.

    2. "Other Instructions" section - For Form 1040 discrepancy adjustments in which interest is required to be suspended under IRC 6404(g), list instructions per IRM 4.71.4.5.1(10).

  5. Inside-left — Securely attach these items, if applicable, to the inside-left of the Lead Exam File or the Primary Related Return File (for the package to which it relates), in order:

    • Computer disk containing the closed RGS case for the Form 1040 or Form 1120 discrepancy adjustment.

    • File copy of Form 5457 (Mandatory Review or Special Review places the memorandum in the file when the case is closed to the EP Closing Unit).

    • File copy of Form 5456 (Mandatory Review or Special Review places the memorandum in the file when the case is closed to the EP Closing Unit).

    • CECA and other special project checksheets with notes on forwarding to the appropriate unit.

  6. Inside-right— Place these documents on the inside-right of the file in order:

    • Form 5456 and Form 5457

      Note:

      If the case is being sent from the group to Mandatory Review (or Special Review) or vice versa when Review sends a Reviewer’s Memo, put Forms 5457 and 5456 on the right side of the case file, loose and on top of all other items.

    • The Unagreed Case Package

      Note:

      For "Unagreed" cases: paper clip and place the Unagreed Case Package on top. The Unagreed Case Package consists of the 30 Day Letter (unsigned and undated), Revenue Agent Report (RAR), Form 4549–E if assessing additional income tax, Form 870-EP if additional excise tax is being assessed, Form 5438 and excise tax calculations if you’re assessing excise taxes, penalty calculations if you’re assessing penalties, copy of Form 5597 (if applicable), and the substitute for return package (if applicable).

    • Form 4442 (if applicable and you completed this form to make entity changes to correct information on Forms 5500 returns).

    • Closing document and return clipped together in one package (see IRM 4.71.12.4.1, The Closing Document and Return Package).

    • All workpapers rubber-banded or clipped together and placed in the order in IRM 4.71.12.4.2, Workpaper Organization.

The Closing Document and Return Package

  1. Clip the closing document and return package together, as follows:

    1. Form 5650 or Form 5599

      Note:

      Form 5599 is used to close Forms 5330 established on master file, Forms 1040/1120 discrepancy adjustments and Forms 990–T.

    2. Current AMDISA print stapled to the left side of the Form 5650 or Form 5599

    3. Applicable return with the following documents (as applicable) clipped together:

      Form Case File Assembly
      2848 (or 8821) Staple face down to the back of page 1 of each return to which it applies.
      872 or 872-H Staple face down to the back of the last page of the return with the most current on the top.

      Note:

      Form 56 may apply, see below.

      56 Staple to the back of the Form 872-H to which it applies.
      3198–A Include a file copy of the delinquent return you forwarded to the Service Center for processing (and included penalty assessment instructions).
      3244–A Staple the file copy of the Form with a tax or penalty payment you processed to the left side of the first page of the return.
      none Staple face down to the back of the return.

Workpaper Organization

  1. All workpapers should be rubber-banded or clipped together and placed in the order below.

  2. Index workpapers to the Form 5772-A.

  3. Purge any documents that are duplicates and/or immaterial to the exam issues. Don’t include them in the file.

  4. Save all correspondence and information prepared for and sent to the taxpayer.

  5. Include these items:

    • File copy of RAR

    • Form 4632 and related checksheets (Form 4632-A, Form 4632-B, or Form 4632-C), if the case involves a referral received from an Examination Functional Unit.

    • Form 5772-A

    • Form 5773-A

      Note:

      Form 5773-A is optional only if you document all exam findings in the workpapers.

    • Form 5464

    • Workpapers and exhibits indexed to Form 5772-A

    • File copy of Form 6212–B, indexed to Form 5772-A as workpaper S–1 (the file copy of any referral sent to Department of Labor (DOL) including any attachments)

      Note:

      You should have routed the original Form 6212–B to DOL through Classification in El Monte, CA per IRM 4.71.6.8, EP Group Procedures – Making Referrals to the Department of Labor (DOL). Keep the case open until the earlier of 20 days from the date mailed to Classification, or the date you receive feedback.

    • File copy of Form 6533 (if applicable), indexed on Form 5772-A as workpaper S–2

      Note:

      If a referral was required, you should have routed the original Form 6533 to PBGC with a courtesy copy to Classification in El Monte, CA per IRM 4.71.6.9, EP Group Procedures – Making Referrals to Pension Benefit Guaranty Corporation (PBGC).

    • File copy of Form 6229 (if applicable)

    • Copy of the Audit CAP checksheet, indexed as workpaper T-1 or T-2 (if you discussed resolution through a closing agreement but it was rejected)

    • File copy of Form 6212–A (if we received a referral from DOL, including any attachments)

    • Form 5666, (file copies of Forms 5666 both sent and received including any attachments, if applicable) indexed on Form 5772-A as workpaper T–3–1

      Note:

      You should have sent the original Form 5666 (with supporting documentation) directly to Classification in El Monte, CA per IRM 4.71.6.5, EP Group Procedures – Making Referrals Within EP.

    • File copy of Form 5346 (including attachments supporting the referral, if applicable), indexed on Form 5772-A as workpaper T–3–2

      Note:

      You should have routed the original Form 5346 (with supporting documentation) to the Examination Functional Unit (LB&I or SB/SE) through Classification in El Monte, CA per IRM 4.71.6.7, EP Group Procedures – Making Referrals to Exam Functional Units.

    • Correspondence

      Note:

      For "unagreed" Forms 5330, 990-T or 1040/1120 discrepancy adjustments, include correspondence between the IRS and the taxpayer and/or POA assembled in chronological order with the most recent letter on top (initial contact letter at the bottom).

      Note:

      For "unagreed" Forms 5500, include all correspondence shared with the taxpayer and/or POA related to any year in the Administrative Record. See IRM 4.71.3.4.4, Administrative Record, and IRM 4.71.3.4.4.1, Examples of Documents Included in the Administrative Record.

    • Copies of delinquent return processing documents (Form 3210, Form 4571, etc. if applicable)

    • Copy of Form 5597 if the return was established in the group

    • Prints of the most recent IDRS research

    • Miscellaneous items

Special Assembly Guidelines for Related Exam Files that Are "Unagreed"

  1. As discussed in IRM 4.71.12.2 (6) above, all returns you examined with the Lead Exam File are Related Exams. These cases can be: other Forms 5500, Form 5330, Form 1040, etc.

  2. Identify these related returns by labeling their folders as Related Exam Files or Primary Related Exam File. See IRM 4.71.12.2 (6) above for definitions.

  3. "Unagreed" exams: Place these items on the inside right in order:

    • Form 5599 (for Form 5330 or Form 990-T exams or Form 1040/1120 discrepancy adjustments) or Form 5650 (for Form 5500 exams)

    • An AMDISA print for the return stapled to the front of the closing document

    • The return (Form 5500, Form 5330, or Form 990-T) or RTVUE/ print (Form 1040) or BRTVU print (Form 1120)

      Note:

      If you sent a "substitute for return" (SFR) Form 5330 or 990-T to the Service Center, include a copy of the SFR package.

    • A copy of Form 4549-E if the case is a Form 1040/1120 discrepancy adjustment

    • If the file is a Primary Related Exam File, a complete set of workpapers per IRM 4.71.12.4.2, Workpaper Organization.

      Note:

      This includes Form 5772-A, a case chronology record and correspondence that specifically pertains to the return (unless the Primary Related Return is an "unagreed" Form 5500, in which case correspondence goes in the Administrative Record).

  4. Staple these items in order to the outside-front of each Related Exam File or Primary Related Exam File to which it pertains:

    • Form 10329 - list the return in the folder and all Related Exams.

    • Form 895-EP - complete and update all entries before closing the case from the group.

    • Form 3198–A - complete all relevant information. See IRM 4.71.12.4 (3).

Additional Assembly Guidelines for All EP Exam Files

  1. Use a red folder for returns with a statute of limitations expiration within 180 days.

  2. If you separately close a case file(s) within a Case File Package, include a complete set of workpapers (See IRM 4.71.12.4.2, Workpaper Organization) in each group of separately closed cases. In effect, a new Lead Exam File is created. Treat the oldest year in each group of cases as a Lead Exam File.

Special Case File Assembly Instructions for Claims

  1. Put each year and return type for which a claim is being filed in a separate case file.

  2. See IRM 4.71.8 for procedures on EP claims.

  3. Outside-front— Staple the following items, applicable, to the outside-front of the Lead Exam File and Primary Related Exam Files, from top to bottom:

    • Form 10329 - List the return in the folder and all related exams.

    • Form 895-EP - Complete all entries and update prior to closing the case from the group.

    • Form 3198–A

  4. Inside-left — Staple or clip the following items, if applicable, to the inside-left of the Lead Exam and the Primary Related Exam Files, in order:

    • Computer disks (containing the closed RGS case for a Form 1040/1120 discrepancy adjustments only)

    • Copy of Form 5666, including attachments supporting the referral

      Note:

      You should have sent the original Form 5666 (with supporting documentation) directly to Classification per IRM 4.71.6, Employee Plans Referrals.

    • File copy of Form 5457 (when Mandatory Review closes the case to ESSP)

    • File copy of Form 5456 (when Mandatory Review closes the case to ESSP)

  5. Inside-right — Place the following items, if applicable, on the inside-right of the file in order:

    • Form 5456 (when the case is being sent to or from Mandatory Review or Special Review as a result of a Reviewer’s Memorandum)

    • Form 5457 (when the case is being sent to or from Mandatory Review or Special Review as a result of a Reviewer’s Memorandum)

    • Form 1900

    • For an "Agreed" claim disallowance, a signed Form 2297

    • For an "Agreed" claims disallowance, a signed Form 3363

    • For an "Agreed Tax Change" (Disposal Code 03) case the signed Form 4549–E, Form 2504, or Form 870-EP.

      Note:

      If you’re assessing additional excise tax or penalties, include calculations.

    • Amended return, Form 843, or any informal claims

  6. "Unagreed" claim cases closed to Mandatory Review - clip the following items in one package and place it on the inside-right of the case file:

    • Letter 3602–A, 30-Day Letter - EP Claim Denied

    • Form 2297

    • Form 3363

    • RAR

    • File copy of the closing letter marked, "Copy - Letter Sent to Taxpayer"

  7. See IRM 4.71.12.3, Assembly Guidelines for All "Agreed" Examinations, for how to assemble the closing document and return package.

Workpapers Organization for Claims Files

  1. Rubber-band or clip workpapers and place them in the order. See IRM 4.71.12.4.2, Workpaper Organization.

  2. Index workpapers to the Form 5772-A.

  3. Purge any documents that are duplicates, immaterial and/or not substantive to the exam issues. Don’t leave them in the file.

  4. Save all correspondence and information prepared for and sent to the taxpayer.

  5. Include the following items as part of the workpapers:

    • Form 5772-A

    • Form 5773-A

      Note:

      Form 5773-A is optional only if you document all exam findings in the workpapers.

    • File copy of RAR

    • Form 5464

    • Form 5666 (file copies of Forms 5666 both sent and received including any attachments)

    • Correspondence between the IRS and the taxpayer in chronological order with the most recent letter on top (initial contact letter at the bottom)

    • Prints of the most recent IDRS research

    • Miscellaneous items