4.75.16 Case Closing Procedures 4.75.16.1 Program Scope and Objectives 4.75.16.1.1 Authority 4.75.16.1.2 Responsibilities 4.75.16.1.3 Terms 4.75.16.1.4 Acronyms 4.75.16.1.5 Related Resources - IRMs 4.75.16.1.6 Related Resources - Forms and Pubs 4.75.16.2 Closing a Case 4.75.16.2.1 Timely Closing 4.75.16.2.2 Use of Report Compliance Case Management System (RCCMS) 4.75.16.3 Non-Examined Closures 4.75.16.3.1 Deleting AIMS Accounts 4.75.16.3.1.1 Disposal Code 99 and Disposal Code 33 4.75.16.3.1.2 Form 10904 Package 4.75.16.3.1.3 Final Closing of Cases: DC 99 and DC 33 4.75.16.3.1.4 Form 10904 and Claims 4.75.16.3.2 Surveying Returns 4.75.16.3.2.1 Documenting the Surveyed Exam/Compliance Activity: 4.75.16.3.2.2 Surveyed Reason Codes (SRC) 4.75.16.4 Examined Closures 4.75.16.4.1 Pre-Closure Review 4.75.16.4.2 Statute Considerations 4.75.16.4.2.1 Statute Controls 4.75.16.4.2.1.1 Extending the Statute Date 4.75.16.4.2.2 Advance Written Notification to Closing Units 4.75.16.4.2.3 Timeline for Closing Examined Returns 4.75.16.4.2.4 Imminent Statute 4.75.16.4.2.5 Form 990 and Using ASED Alpha Code "PP" 4.75.16.4.3 Closing Conference 4.75.16.4.4 Form 5599 and the RCCMS Closing Record 4.75.16.4.4.1 Disposal Codes 4.75.16.4.4.2 Principal Issue Codes(PICs) 4.75.16.4.4.3 RCCMS Closing Record - The "Closing With" Field 4.75.16.4.5 Form 2363-A 4.75.16.4.6 Form 3198-A 4.75.16.4.7 Form 5666 Information Report 4.75.16.4.8 Time Reporting 4.75.16.5 Special Situations 4.75.16.5.1 Declaratory Judgment Cases 4.75.16.5.2 Automatically Revoked Organizations 4.75.16.5.3 Employment Tax Cases 4.75.16.5.3.1 Classification Settlement Program (CSP) Cases 4.75.16.5.3.2 IRC 3402(d) and IRC 3102(f)(3) Relief Cases 4.75.16.5.4 Closing Agreements 4.75.16.5.5 Form 990-N Filers 4.75.16.5.6 Inadequate Records 4.75.16.5.7 Installment Agreements 4.75.16.5.8 Not Required to File Form 990 4.75.16.5.9 Unable to Locate 4.75.16.6 Cases Subject to Mandatory Review 4.75.16.6.1 Protests to Appeals 4.75.16.6.2 Cases NOT Subject to Mandatory Review 4.75.16.7 Case File Assembly 4.75.16.7.1 Outside of Case File Folder 4.75.16.7.2 Inside-Left of Case File Folder 4.75.16.7.3 Inside-Right of Case File Folder 4.75.16.7.4 Working Return Assembly 4.75.16.7.5 Multiple Folders 4.75.16.7.6 100 Percent Paperless Closure 4.75.16.8 Closing the Case 4.75.16.8.1 Closing to the Group Manager 4.75.16.8.2 Group Manager: Closing from the Group 4.75.16.8.3 Authority to Use Status 38, Suspense, All Others (GE Examinations) or Status 39, Suspense in Group 4.75.16.9 Shipping From the Group Exhibit 4.75.16-1 Form 2363-A Required Input Chart Exhibit 4.75.16-2 Form 1900 Sample Language for Automatic Revocation Under IRC 6033(j) Exhibit 4.75.16-3 Unable-to-Locate Scenario Guidance Table Exhibit 4.75.16-4 FSL/ET RCCMS Naming Convention Exhibit 4.75.16-5 The Electronic Case File - EO Sub-Folders in RCCMS Exhibit 4.75.16-6 Form 4844 Sample Exhibit 4.75.16-7 Form 990-N - Acceptable Representations for a "Working Return" Part 4. Examining Process Chapter 75. Exempt Organizations Examination Procedures Section 16. Case Closing Procedures 4.75.16 Case Closing Procedures Manual Transmittal February 05, 2020 Purpose (1) This transmits revised IRM 4.75.16, Exempt Organizations Examination Procedures, Case Closing Procedures. Material Changes (1) Incorporated applicable information from IRM 4.90.12 Federal, State, and Local Government Case Closing Procedures. (2) Replaced all references to Examination Program and Review (EPR) and the authorities granted to the manager of that office to EO Examinations FSL/ET Mandatory Review. (3) Replaced terms auditor and auditors with examiner and examiners. (4) Replaced terms audit, auditing, or audited with examination, examining or examined where appropriate, in compliance with the Plain Language Act. Generally, official titles and designations do not reflect this change. (5) Revised IRM 4.75.16.1(2), removed references to GS series. (6) Removed references to the obsolete IRM 4.75.27, Office/Correspondence Examination Program. (7) Incorporated IG Memo TEGE-04-0618-0016, Form 10904 Deletion Requests, dated June 22, 2018. (8) Revised IRM 4.75.16.3.1- Deleting AIMS Accounts based on IG Memo TEGE-04-0618-0016, Form 10904 Deletion Requests, dated June 22, 2018. (9) Incorporated IG Memo TEGE-04-1018-0022, Revised Process for Surveying a Case When Using Certain Non-Examination Disposal Codes, dated October 2, 2018 into IRM 4.75.16.3.2. (10) Removed all references to Form 4881. The form was made obsolete by C&L, March 23, 2019. (11) Revised IRM 4.75.16.5.3.2, IRC 3402(d) and IRC 3102(f)(3) Relief Cases to include the modified two-step abatement/partial assessment process described in IRM 4.90.9, Federal, State, and Local Government, Procedures, Workpapers and Report Writing, which is now an obsolete IRM. (12) Moved IRM 4.75.16.5.9- Status 36 Organizations to IRM 4.75.15.8.12. (13) Moved IRM 4.75.16.5.10 - Termination of Exempt Status to IRM 4.75.15.8.4. (14) Revised IRM 4.75.16.7.6(2) 100 Percent Paperless Closure to include Termination cases. (15) Incorporated IG Memo TEGE-04-0817-0027, Cases Subject to Mandatory Review, dated September 1, 2017 into IRM 4.75.16.6. (16) Incorporated IG Memo TEGE-04-0218-0010, Form 3210 Not Required When Closing 100% Electronic Cases to P&M Closing Group, dated February 8, 2018 into IRM 4.75.16.7.6. (17) Incorporated IG Memo TEGE-04-0419-0011, Elimination of Requirement to Use Form 5772 on EO Examinations and Modifications to Form 5773, dated April 3, 2019. (18) Moved and revised title of IRM Exhibit 4.90.12-3, FSLG Naming Convention for RCCMS to IRM Exhibit 4.75.16-4 FSL/ET RCCMS Naming Convention. (19) Removed IRM Exhibit 4.75.16-1 - Form 1900 Instructions, based on new procedures outlined in IG Memo TEGE-04-1018-0022, Revised Process for Surveying a Case When Using Certain Non-Examination Disposal Codes, dated October 2, 2018. (20) Removed IRM Exhibit 4.75.16-2 - Form 2503 Instructions, based on new procedures outlined in IG Memo TEGE-04-1018-0022, Revised Process for Surveying a Case When Using Certain Non-Examination Disposal Codes, dated October 2, 2018. (21) Removed IRM Exhibit 4.75.16-3, Principal Issue Code Selection in Advisory Cases. (22) Removed IRM Exhibit 4.75.16-4, Principal Issue Code Examples. (23) Removed IRM Exhibit 4.75.16-6- Form 2363-A, Instructions. (24) Removed IRM Exhibit 4.75.16-7Form 4881, Instructions. Form 4881 was made obsolete March 23, 2019. (25) Removed IRM Exhibit 4.75.16-8- Form 5666, Instructions. (26) Revised IRM Exhibit 4.75.16-9- Form 1900, Sample Language for Auto Revocation Under IRC 6033(j). (27) Moved IRM Exhibit 4.75.16-10- Status 36 Cases Scenarios to IRM 4.75.15-10. (28) Moved IRM Exhibit 4.75.16-11- Status 36 Case: Form 6018 Instructions IRM 4.75.15-12. (29) Moved IRM Exhibit 4.75.16-12- Status 36 Case: Form 2363-A Instructions to IRM 4.75.15-11. (30) Removed IRM Exhibit 4.75.16-13 - Draft Examination Termination Letter IRC 501(c)(3), because Letters 5426 and 5426-A Termination closing letters were published in the Letters Repository. (31) Removed IRM Exhibit 4.75.16-14 - Draft Examination Termination Letter IRC 501(c)(other), because Letters 5426 and 5426-A Termination closing letters were published in the Letters Repository. (32) Removed IRM Exhibit 4.75.16-18, Alpha Code PP - Examples of the Proper Use. Effect on Other Documents This supersedes IRM 4.75.16 dated July 18, 2017. Incorporated Interim Guidance Memorandum TEGE-04-0817-0027, Cases Subject to Mandatory Review, dated September 1, 2017. Incorporated Interim Guidance Memorandum TEGE-04-0218.0010, Form 3210 Not Required When Closing 100% Electronic Cases to P&M Closing Group, dated February 8, 2018. Incorporated Interim Guidance Memorandum TEGE-04-1018-0022, Revised Process for Surveying a Case When Using Certain Non-Examination Disposal Codes, dated October 2, 2018. Incorporated Interim Guidance Memorandum TEGE-04-0419-0011, Elimination of Requirement to Use Form 5772 on EO Examinations and Modifications to Form 5773, dated April 3, 2019. Incorporated Interim Guidance Memorandum TEGE-04-0618-0016, Form 10904 Deletion Requests, dated June 22, 2018. Incorporated IG Memorandum TE/GE-04-0819-0015 dated August 23, 2019 into IRM 4.75.16.1.1, Authority. Audience Tax Exempt and Government Entities Exempt Organizations/Government Entities Exempt Organizations Examinations Effective Date (02-05-2020) Margaret Von Lienen Director, Exempt Organizations/Government Entities Tax Exempt and Government Entities 4.75.16.1 (02-05-2020) Program Scope and Objectives Purpose: This IRM section describes the closing process for examined and non-examined returns under EO jurisdiction. The closing process for examinations follows the process of communicating examination results to a taxpayer (t/p). This manual covers: How to close a case. Where and how to ship the case. Audience: The procedures in this IRM apply to Exempt Organizations Examination employees in the following series: EO examiners. FSL/ET examiners. Tax law specialists and reviewers. Tax examiners. Front-line examination group managers. Policy Owner: Director, Exempt Organizations. Program Owner: Exempt Organizations. Contact Information: To recommend changes or make any other suggestions to this IRM section, email the EO Examinations Mandatory Review office at tege.eo.review.staff@irs.gov. 4.75.16.1.1 (02-05-2020) Authority The primary objective of the EO examination program is regulatory, with emphasis on continued qualification of exempt organizations (Policy Statement 4-119, formerly P-7-20). See IRM 1.2.1.5.36. IRC 7602 gives examiners the authority to: Examine any books, papers, records or other data necessary to complete an examination. Issue a summons for information necessary to complete an examination. Take testimony under oath to secure additional information needed. Ask about any offense connected with administering or enforcing the Internal Revenue laws. Examiners and managers are also responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3). FSL/ET examiners are responsible for Federal tax administration issues relating to governmental units and their subordinate agencies. In addition to employment taxes and information reporting, FSL/ET is responsible for ensuring compliance with and assisting in the administration of FICA coverage agreements under the provisions of Section 218 of the Social Security Act. 4.75.16.1.2 (02-05-2020) Responsibilities During an examination, examiners are responsible for determining if the organization/entity: Meets the requirements for exemption. Has the proper foundation status (501(c)(3) organizations only). Has filed all required tax and information returns. Has reported information and tax liabilities on filed returns completely and accurately. Has withheld income and other employment taxes from their employees. Has filed all required tax and information returns on their employees. Taxpayer Bill of Rights(TBOR): In June of 2014 the IRS adopted the TBOR therefore, examiners are also responsible for: Conducting a quality examination with fairness and integrity. Being familiar with and acting in accord with t/p rights. See IRC 7803(a)(3). Note: For additional information refer to Policy 1-236. Along with their managers, examiners are responsible for controlling and monitoring statutes on their assigned cases. 4.75.16.1.3 (02-05-2020) Terms General EO terms and definitions: Term Definition Administrative file The examination case file folder (paper or paperless) for one MFT for one t/p, with one or more tax periods under examination, including closing documents, check sheets, reports, returns, workpapers and the administrative record. See IRM 4.75.10.2.1. Administrative record A written record of the administrative proceedings between the IRS and the organization/entity under examination. Examiners prepare the administrative record for Area Counsel in declaratory judgment cases. See IRM 4.75.32. Examiner Any EO employee authorized to examine returns. Examination controls An examination establishment of a return or MFT 67 non-return unit in the AIMS and RCCMS database for control purposes. Examination record or Examination account An AIMS and RCCMS record for a t/p’s MFT, for a tax period, for purposes of assessment, abatement, or other account action. Case A return open for examination for one tax period plus other returns, if any, involving interrelated interests or transactions that require concurrent examination. "Other returns" includes any related return of the same t/p and of related t/ps for any tax period. Case file Synonymously used with the examination administrative file or administrative file. Closing record The RCCMS Closing Records tab and in the case of paper closures, Form 5599. Conversion For purposes of this IRM, the delinquent or substitute for return process used to convert an annual EO information return to a tax return. A conversion is intended to bring an organization current on its tax and filing obligations for the affected tax years not barred for assessment. See also IRM 4.5.3.14, Conversions. Converted return For this IRM, a tax return converted from an annual EO information return. Deficiency Procedures The process of preparing, approving, issuing and suspensing a 90-day SNOD. Disqualification A loss of tax-exempt status for specified tax years for the following types of organizations: Organizations that self-declared their tax-exempt status by filing a an EO annual information return (status 36 organization). IRC 501(c)(12) or (c)(15) organizations that fail their respective 85 percent member income test or gross receipts test for a specific tax year. Organizations treated as tax-exempt under IRC 501(c)(3) without a ruling or determination letter, such as an organization claiming to be a church (status 30 organization) or a small organization with gross receipts normally not more than $5,000 per year (status 31 organization). EO Closing Unit Formerly the Examination Special Support unit (ESS) in EO Examinations. The EO Closing Unit is under the jurisdiction of Compliance Planning and Classification (CP&C) in TE/GE. Group Return A Form 990 filed by a central organization on behalf of two or more subordinate organizations in a group exemption ruling. See IRM 4.75.24.3.1, Group Returns. Group Unless otherwise specified or suggested by context, the front line examination group or examination group. PATH Act The Protecting Americans from Tax Hikes Act of 2015, P.L. 114-113. Primary Return The annual information return under EO jurisdiction, such as Form 990, 990-EZ, 990-PF or 990-BL. The quarterly tax return under EO FSL/ET jurisdiction, such as Form 940 or Form 941. These are the returns around which other returns revolve. The primary return also serves as the return of record for statute purposes for certain related tax returns, such as Form 990-T. Note: Form 990-N, although not a return, is treated as a primary return for disposal code and principal issue code (PIC) purposes. Related Return Any return of the same t/p, without regard to examination jurisdiction. Discrepancy adjustment returns and Form 4720-A filed by related persons are treated as related returns. Note: Form 4720-A isn’t a standard form in the Electronic Publishing Products Catalog. A Form 4720 is designated as Form 4720-A (MFT 66) if a t/p completes Part II-A. Review function A general term describing either the EO Examinations Mandatory Review group or Special Review group. Secondary return Any return other than a primary return. Short closing A non-examined closing. Statute Unless stated otherwise in this manual, the term denotes the assessment statute expiration date (ASED). Short statute return A return with less than 270 days remaining on the ASED. Subordinate return A return of a subordinate organization in a group exemption ruling, usually a subordinate’s primary return. Working return For purposes of case file assembly, the physical or electronic representation of a filed return, SFR, or non-return unit under examination. See also IRM 4.75.16.7.4. For additional AIMS terminologies, see IRM Exhibit 4.4.1-1, Reference Guide. 4.75.16.1.4 (02-05-2020) Acronyms The table lists commonly used acronyms and their definitions. Acronym Definition AIMS Audit Information Management System ASED Assessment Statute Expiration Date BMF Business Master File CCR Case Chronology Record CSP Classification Settlement Program D.O. Delegation Order DC Disposal Code EGC Employee Group Code EIN Employer Identification Number EO Exempt Organizations EOBMF Exempt Organizations Business Master File EP Employee Plans ET Employment Tax EUP Employee User Portal FADL Final Adverse Determination Letter FAST Field Agent Support Team FSL/ET Federal, State, Local government/Employment Tax IDRS Integrated Data Retrieval System IRC Internal Revenue Code IRE Information Return Exam IRI Incomplete Return Item JCT Joint Committee on Taxation LB&I Large Business and International Business Operating Division LUQ Large, Unusual, or Questionable MF Master File MFT Master file tax code NMF Non-Master File NRU Non-return unit (See IRM 4.75.21.3) MeF Modernized e-File OCEP Office/Correspondence Examination Program PBC Primary Business Code PIC Principal Issue Code PII Personally Identifiable Information POA Power of Attorney RAR Revenue Agent’s Report RCCMS Reporting Compliance Case Management System SAA Survey After Assignment SBA Survey Before Assignment SB/SE Small Business/Self-Employed Business Operating Division SBC Secondary Business Code SEIN Statistics of Income Exempt Organizations Return Image Net SFR Substitute for Return SNOD Statutory Notice of Deficiency SRC Survey Reason Code SRS Specialist Referral System SSN Social Security Number TAM Technical Advice Memorandum T/P Taxpayer TAS Taxpayer Advocate Service TBOR Taxpayer Bill of Rights TE/GE Tax Exempt and Government Entities business operating division TEB Tax-Exempt Bonds TEOS Tax Exempt Organization Search TEQMS Tax Exempt Quality Measurement System TIN Taxpayer Identification Number UBIT Unrelated Business Income Tax W&I Wage and Investment Business Operating Division For common IDRS research and command codes, refer to IRM 4.5.1.2. For their definer codes and definitions, refer to Exhibits 4.5.1-1 through 4.5.1-7. 4.75.16.1.5 (02-05-2020) Related Resources - IRMs The following lists IRMs referenced in this manual: IRM 4.75.10, Exempt Organization Pre-Contact Procedures. IRM 4.75.13, Issue Development and Conclusion. IRM 4.75.15, EO Closing Letters and Examination Reports. IRM 4.75.21, EO Special Examination Procedures. IRM 4.75.22, EO Delinquent and Substitute for Return Procedures. IRM 4.75.24, Organizations Covered by a Group Ruling. IRM 4.75.25, Exempt Organizations Examinations Closing Agreements. IRM 4.75.28, Discrepancy Adjustments. IRM 4.75.32, Declaratory Judgment Cases And The Administrative Record. IRM 4.75.31, Conversion of Returns Upon Revocation of Exemption. IRM 4.75.37, Claims, Requests for Abatement and Examination Reconsiderations. TE/GE IRMs mentioned in this manual include: IRM 4.5.1, TE/GE AIMS Processing. IRM 4.5.2, TE/GE Examined and Non-examined Closures. Servicewide or Other BOD IRMs mentioned in this manual include: IRM 4.23.8, Determining Employment Tax Liability. IRM 4.23.9, Employment Tax Penalty and Fraud Procedures. IRM 4.23.10, Report Writing Guide for Employment Tax Examinations. IRM 25.16.1, Disaster Assistance and Emergency Relief, Program Guidelines. 4.75.16.1.6 (02-05-2020) Related Resources - Forms and Pubs The following paragraphs provide a comprehensive list of the relevant forms and publications you may need to close an examined or non-examined case: Publications and Documents: Pub 78, Cumulative List of Organizations [Electronic Format Only through Tax Exempt Organization Search (TEOS).. Pub 892, How to Appeal an IRS Decision on Tax Exempt Status. Pub 1035, Extending the Tax Assessment Period. Pub 4779, Facts About Terminating or Merging Your Exempt Organization. Document 6379, Exempt Organizations Management Information Systems Codes - Quick Reference for EO Employees. Document 11308, Information Systems Codes FY 2020 Document 13056, Employee Toolkit - Shipping Procedures for Personally Identifiable Information (PII). AIMS forms: Form 5546, Examination Return Charge-Out Sheet. Form 5588, TE/GE Non-Master File Request. Form 5595, TE/GE Update. Form 5596, TE/GE Non-Examined Closings. Form 5597, TE/GE IMF/BMF/EPMF Request. Form 5598, TE/GE Correction Request. Form 5599, TE/GE Examined Closing Record. Statute forms: Form 872, Consent to Extend the Time to Assess Tax. Form 872-A, Special Consent to Extend the Time to Assess Tax. Form 872-T, Notice of Termination of Special Consent to Extend the Time to Assess Tax. Form 895, Notice of Statute Expiration. Form 3999, Statute Expiration Report. Form 10364-A, Statute Expiration Case Notice, from the National Distribution Center. Form SS-10, Consent to Extend the Time to Assess Employment Taxes. Basic report forms: Form 886-A, Explanation of Items. Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment (Employment Tax Adjustments Not Subject to IRC 7436). Form 2504-S Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment (Employment Tax Adjustments Not Subject to IRC 7436; Worker Classification or Section 530 Issues Not Addressed in this Exam). Form 2504-T Agreement to Assessment and Collection of Additional Employment Tax and Acceptance of Overassessment (Employment Tax Adjustments Subject to IRC 7436). Form 4621, Report of Examination - Exempt Organization. Form 4621-A, Report of Examination-Exempt Organizations. Form 4549, Income Tax Examination Changes. Form 4549-A, Income Tax Examination Changes (Unagreed and Excepted Agreed). Form 4549-E, Income Tax Discrepancy Adjustments. Form 5384, Excise Tax Examination Changes and Consent to Assessment & Collection. Form 5385, Excise Tax Examination Changes. Form 4666, Summary of Employment Tax Examination. Form 4667, Examination Changes - Federal Unemployment Tax. Form 4668, Employment Tax Examination Changes Report. Form 4668-B, Report of Examination of Withheld Federal Income Tax for Withholding Reported on Forms 1099 and W-2G. Form 4883, Exempt Organizations Excise Tax Audit Changes. Note: The "examination report" includes the "Substitute for Return Package" described in IRM 4.75.22.8. Case closing forms: Form 895, Notice of Statute Expiration. Form 1900, Income Tax Survey After Assignment. Form 2363-A, Request for IDRS Input for BMF/EO Entity Change. Form 3198-A, TE/GE Special Handling Notice. Form 3645, Computation of Information Return Penalty. Form 5346, Examination Information Report. Form 5456, Reviewer's Memorandum - EP/EO. Form 5457, Response to Reviewer's Memorandum - EP/EO. Form 5599, TE/GE Examined Closing Record. Form 5666, TE/GE Referral Information Report. Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties. Form 10904, Request for Record Deletion from AIMS. Case file and workpaper forms: Form 4318, Examination Workpapers Index. Form 5464, Case Chronology Record (CCR). Form 5773, EO Workpaper Summary. Form 5774, Private Foundation Workpapers. Form 5774-A, Private Foundation - IRC 4962 Abatements. Form 9984, Examining Officer’s Activity Record. 4.75.16.2 (02-05-2020) Closing a Case Non-examined cases are discussed in IRM 4.75.16.3. These are closed to the EO Closing Unit. Examined cases are discussed in IRM 4.75.16.4. These are closed to either: The EO Closing Unit. EO Examinations Mandatory Review (see IRM 4.75.16.6). EO Examinations Special Review (reopened cases only). Refer to IRM 4.75.16.9 for the addresses to these functions. Name FSL/ET electronic documents according to the FSL/ET RCCMS Naming Convention. Unable-to-Locate cases could be examined or non-examined depending on the facts and circumstances. Refer to IRM 4.75.16.5.9 and Exhibit 4.75.16-3. 4.75.16.2.1 (07-18-2017) Timely Closing Make your best effort to close examinations within established time-frames. Document any delays or extended periods of inactivity on the CCR. If using an electronic and paper version, make sure both are updated. The National Standard Timeframes for closing cases are guidelines for quality exam purposes in TEQMS: For no-change or agreed change examinations, close the case from the examination group within 10 calendar days from the date you receive the t/p’s agreement to your report, or the date you communicate the no-change status to the t/p. For unagreed examinations, close the case from the examination group within 20 calendar days from the date the 30-day letter defaults or the date your receive a request for appeals conference. Managers must ship the case within 10 calendar days after receipt from the examiner. Record the date you close the case on the CCR. The group manager records the date he or she approved the closure. 4.75.16.2.2 (02-05-2020) Use of Report Compliance Case Management System (RCCMS) RCCMS allows for the electronic establishing, updating, and closing of AIMS records. For paper case files associated with a RCCMS record, close the case with a printed copy of Form 5599, Form 5595, Form 5596 and Form 5597. Note: See IRM 4.75.16.4.4 for completing Form 5599. For electronic and paper FSL/ET cases follow the FSL/ET RCCMS Naming Convention to index and name documents. See Exhibit 4.75.16-4. Include: The index number in the lower right-hand corner. The index number and name on all electronic documents. See Exhibit 4.75.16-4. The quarter on the documents for a specific quarter in the name (for example, 32.TRDBV.201503, 32.TRDBV.201506, etc.). Use a second number and period when there is more than one document in the section (for example, 2.0 AMDIS, 2.1 INOLES, etc.). For information on assembling an electronic case file in RCCMS, see: IRM 4.75.16.7.6, Case File Assembly, 100 Percent Paperless Case File. Exhibit 4.75.16-5, Guidelines for EO Sub-Folders in RCCMS. For information on an electronic Administrative Records, see IRM 4.75.32.5.1. IRM 4.75.16-4, FSL/ET RCCMS Naming Convention. Note: See also online the RCCMS collection of publications including training materials, automation guides and tips. For closing a RCCMS record, see IRM 4.75.16.4.4.3, RCCMS Closing Record - Closing With Field. Note: See also Document 13214, EO RCCMS Case Closing Desk Guide. In order to close a RCCMS record opened in error without a corresponding AIMS record, or an AIMS record is closed without a corresponding RCCMS record, the group manager: Sends a secure e-mail message to the EO Exams Systems Analyst. Include the name of the case, EIN and MFTs, tax period, and explanation of the error. Completes the RCCMS Closing Document by selecting the appropriate disposal code for deletion (901 – Error Accounts, or 801 – Information Report). Selects "7- Paperless Non-Examined" in the "Closing with:" field. Completes the fields at the bottom of the closing document with the group’s information (PBC, SBC, and EGC). Leaves the AIMS box unchecked. Closes RCCMS controls to the EO Closing Unit using the following: PBC – 400; SBC – 11115; EGC – 7997; and, Status Code 56. Note: See also IRM 4.75.16.3.1.4 (5) for claims where a return is established in either AIMS or RCCMS without the other. 4.75.16.3 (02-05-2020) Non-Examined Closures Non-examined closures of returns are known as "short closures." Non-examined closures include: Deletions of AIMS records or accounts (see IRM 4.75.16.3.1). Surveys of returns (see IRM 4.75.16.3.2). Specific examples of reasons to request a non-examined closure include: AIMS records established in error. Duplicate AIMS NMF records, after establishing an AIMS MF record for the same return. Selected returns for examination that don't get examined. Assigned returns for examination that don't get examined. Assigned returns where t/p contact was made, but you determine there is no examination potential. Surveying returns or non-return units of an organization auto-revoked by the Service Center during the examination. General information on non-examined closures: Accounts closed on AIMS with a non-examined disposal code remain on AIMS database for 90 days. Non-Examined and NMF closures are closed on AIMS outside of RCCMS. Close non-examined returns and non-return units to the EO Closing Unit. Non-examined NMF accounts can't close 100 percent paperless. The EO Closing Unit uses command code AMSOC to close non-examined returns and MFT 67 non-return units. You remain responsible for ensuring a non-examined returns are closed before the ASED. 4.75.16.3.1 (02-05-2020) Deleting AIMS Accounts Use Form 10904 to delete an AIMS account on MF and NMF. AIMS deletions are generally NMF closures. Surveys are generally MF closures. You must justify and document an AIMS deletion in the "Reason for Request (Narrative)" block of Form 10904. Attach available documentation to support the reason for deletion. Attach AMDISA prints no more than 30 days old. Leave no question that the AIMS deletion is warranted. Some MF accounts may be deleted, such as a filed return ordered or classified but not received and you did not start the examination. Use one of the two following DCs for AIMS deletions at the group level: DC 99 (801), Information Report and Miscellaneous. DC 33 (901), Error Accounts with no Returns. 4.75.16.3.1.1 (02-05-2020) Disposal Code 99 and Disposal Code 33 Use DC 99 (801) when you: Convert an examination record from NMF to MF. Change from one MFT to another. Change from one tax period to another. Transfer from one TIN to another (such as a parent TIN). Use DC 33 (901) when you: Correct a keypunch error. Correct an error account. Correct an incorrect TIN. Didn’t start the examination because the t/p isn’t liable for filing a return. Opened a claim in error because it wasn’t timely filed. Established a MFT 67 non-return unit on MF or NMF, but didn’t do the examination. 4.75.16.3.1.2 (02-05-2020) Form 10904 Package To request an AIMS account deletion, prepare an electronic Form 10904 package: Form 10904 (first page only), with signed explanation by the requestor and the group manager. Note: For DC 33, you also need the area manager’s signature . AMDISA print for module being deleted from AIMS. AMDISA print for corresponding module established on MF. TXMODA. Supporting documentation. When the Form 10904 package is complete: Upload it into RCCMS. Close to your TEGE Closing Unit in status code 56. The EO Closing Unit accepts the case using current practice. 4.75.16.3.1.3 (02-05-2020) Final Closing of Cases: DC 99 and DC 33 The Planning and Monitoring (P&M) Coordinator or designee monitors the RCCMS Unassigned for status code 56 cases and when identified: Assigns the case to the AIMS Coordinator or a designee. Extracts Form 10904 from RCCMS for review and if necessary, returns incomplete submissions to the requestor. Signs Form 10904 after making sure submission is complete and correct. Emails the Form 10904 to the Closing Unit manager for signature who returns it to the AIMS Coordinator. Uploads the completed Form 10904 into RCCMS. Closes the case on AIMS. DC 33 Deletions can be closed through RCCMS. DC 99 NMF cases require manual closure. 4.75.16.3.1.4 (02-05-2020) Form 10904 and Claims You can’t delete a claim record until the claim amount is removed from AIMS and RCCMS. Adjust the claim amount on RCCMS (manually Form 5595) before deletion. For claims, you may also need to change the source code. Prepare the Form 10904 package as stated in IRM 4.75.16.3.1.2. Forward AIMS and RCCMS controls to the Systems Analyst in the EO Closing Unit, AIMS Status Code 56. E-mail the Form 10904 package to the Systems Analyst *TEGE-EO-10904. The EO Closing Unit doesn’t accept Forms 10904 uploaded to RCCMS or faxed. Follow the deletion instructions below for situations where a return is established in either AIMS or RCCMS without the other. For returns established on AIMS only, prepare Form 10904 indicating an AIMS only record. Attach one AMDISA print no more than 30 days old. For returns established on RCCMS only, send RCCMS controls to the EO Closing Unit via secure e-mail. Inform the Systems Analyst you have sent the controls so it can be controlled to the RCCMS Library. Note: See also IRM 4.75.16.2.2 if a RCCMS record is open in error without a corresponding AIMS record, or an AIMS record is closed without the corresponding RCCMS record. 4.75.16.3.2 (02-05-2020) Surveying Returns You and your group manager have the authority to determine whether to survey a return instead of conducting an examination. The group manager must review and approve all surveys. Surveyed returns will be closed fully electronically as 100 percent paperless closings. Surveyed returns don’t count towards any statistics with respect to examination results. Before surveying a return, consider all case facts. Analyze the following factors (not all-inclusive) to help you strategically decide whether to survey the return. While the group manager approves the decision to survey a return and must document it in the RCCMS case file, both managers and examiners must document the case file with all case actions: The existence and/or non-existence of classified issues and Large, Unusual, or Questionable (LUQs) items. Completion of return and related return reconciliation. Completion of required filing checks. Evaluation of audit potential, whether an audit would likely result in a material change. Repetitive audit or compliance activity - prior audit or compliance activity resulted in no change or minimal adjustments for same issue. Surveying returns with less than 18 months until ASED and whether the same issue is present in subsequent years. If so, consider establishing the subsequent year for examination. Whether the case should be reassigned to another group/area if your group lacks the resources. Whether an organization/entity has already taken steps to correct an identified issue, as reflected in subsequent years’ return. Cases controlled on NMF can’t be closed electronically as 100 percent paperless closing, therefore are excluded from this procedure. When you decide to survey a case, use the appropriate disposal codes (DC): Type of Survey Closing DC AIMS/RCCMS Use when Survey Before Assignment (SBA) 31/910 Manager: you analyze the return before assigning it to or contacting the t/p/representative (rep) and determine an exam isn’t warranted. Survey After Assignment (SAA) 32/908 Examiner: you analyze the return and without contacting the t/p/rep. or reviewing any books and records and you believe that examining the return wouldn’t result in material change in exempt status, foundation status, plan qualification, tax-advantaged bond status or tax liability. Surveyed After Initial Contact 36/909 Examiner: you determine, after contacting the t/p or rep. but before inspecting records that: Examining the return wouldn’t result in a material change in exempt status, foundation status, plan qualification, tax-advantaged bond status or tax liability. The t/p is deceased, has a terminal illness, is in a disaster area or other extraordinary circumstances exist. Claims Allowed in Full (Surveyed) 34/103 Examiner: you determine the claim issue is clearly allowable in full and the return doesn’t otherwise warrant examination. All determinations to survey will be treated with the same level of review. 4.75.16.3.2.1 (02-05-2020) Documenting the Surveyed Exam/Compliance Activity: Capture all case survey information on the RCCMS closing record: 1. Complete the designated mandatory fields for a surveyed closure. 2. Select the appropriate SRC from the drop-down menu. 3. When appropriate, provide a narrative explanation supporting your decision to survey in the General tab, Remarks and Comments field. 4. Managers will document their review and approval of the survey closure on the RCCMS CCR. 5. Manager’s comments will include any applicable Special Handling instructions as required. 6. To add a manual chronology entry, click on the Chronology tab and select the new chronology button. The untitled - chronology box opens and allows you to input various entries. Complete the required red asterisk fields. Click save and close to save your entry. Note: To have an electronic 100 percent paperless closing, the return must have been established using Return Requisition Code 3 - Return, Chargeout & Labels not requested. Additionally, the closing field on the General Tab of the Closing Record must be completed by selecting option 7 - Paperless Non-Examined. Reminder: You are no longer required to complete a Form 1900/2503, Form 5596, Form 5599 or Form 3198/3198-A nor post the forms as separate documents to the RCCMS Office Documents folder when surveying a case or claims allowed in full. 4.75.16.3.2.2 (02-05-2020) Surveyed Reason Codes (SRC) Use the following SRCs on the RCCMS Closing Record, General Tab, Survey Reason Code field for all surveys: SRC Description Use when A No LUQ items The main reason for the survey is: classified issues don’t exist and the return contains no LUQ items. B No change in prior year The main reason for the survey is that the same issues identified on the current year return were just as significant in any of the four preceding years and were no-changed or had a small tax change. C Beyond cycle (includes statute issues) The main reason for the survey is based upon currency and/or statute considerations. D Lack of resources The main reason for the survey is due to a lack of resources. Managers should exercise due diligence, with their area manager’s agreement, to assess whether they can reassign the return to another group/area before surveying it. E Other The main reason for the survey is other than A through D. Justification is critical as to the reasons why, therefore detailed statement is required. SRC A - No LUQ items: Narrative statements are optional for SRCs A-D but explain details if you think it’s appropriate. Example: Include specific details as to why you have determined the classified issues doesn’t exist. This will help in refining the workload selection process. SRC E - Other: Include a clear and concise narrative statement on the RCCMS Closing Record, General Tab, Remarks and Comments (field is limited to 250 characters). Explain why we aren’t examining the return. The justification is critical, so we can monitor and analyze trends as to why cases are being surveyed to improve our processes. A generic entry such as “survey” isn’t acceptable. Examples of “Other” category: Claim allowed in full. Auto-revocation: Organization auto-revoked while open for examination because of IRC 6033(j). EO BMF status 97 posted on [date]. The effective date of auto-revocation is [due date of return for 3rd tax year]. During pre-examination research it was determined that the t/p has self-corrected the issue as reflected in subsequent years. CSP in place for the tax period assigned and case assigned for reclassification of same class of workers. Prior examination for reclassification and IRC 530 applies. Case assigned for potential Back-up withholding liability, but review of Form 1099-MISC show no missing TINs. IRE case assigned for unreported or underreported income tax withholding on per capita payments. Further analysis showed per capita payments are under IRC 3402(r) withholding requirements. 4.75.16.4 (07-18-2017) Examined Closures Group managers will document their approval of the examined case closure on CCR. For specific closing and shipping instructions, see IRM 4.75.16.8 and IRM 4.75.16.9. For supplemental instructions on special or unusual characteristics, conditions or outcomes, see IRM 4.75.16.5 4.75.16.4.1 (02-05-2020) Pre-Closure Review Check the following items before closing and shipping your case: Communicate examination results to t/p Hold a closing conference. See IRM 4.75.16.4.3. Issue a 30-day letter and examination report, or a final closing letter: no change, advisory, agreed tax change, or agreed disallowance of claim. Issue Letter 5326, Rebuttal Letter, if the t/p protests the examination report and the protest doesn’t change your position. Finalize workpapers Ensure all identified issues were resolved and documented. Ensure fraud was appropriately considered. Ensure penalties were appropriately considered. Purge all unnecessary or duplicate workpapers. Index and review workpapers for conclusions, completeness and accuracy. Ensure conclusions are consistent with examination reports and closing letters. Ensure Form 5773 and 5774 (for private foundations) are complete. For declaratory judgment cases - ensure an administrative record is present. See IRM 4.75.32. For declaratory judgment cases (unagreed) - ensure the administrative record index is complete. Follow case file assembly instructions. See IRM 4.75.16.7. Complete the Closing Documents Verify, update or correct AIMS and RCCMS fields as needed; e.g., statute dates, claim amount, source codes, project code, etc. Complete "Closing Records" tab on RCCMS (and Form 5599 for paper cases). See IRM 4.75.16.4.4. Complete Form 2363-A if necessary to update status fields in the EOBMF. See IRM 4.75.16.4.5. Complete Form 3198-A for each MFT case file requiring special handling. See IRM 4.75.16.4.6. Complete Form 5666, Information Report, if necessary. See IRM 4.75.16.4.7. Document statute controls and update Form 895 for returns under examination that are "statute returns." See IRM 4.75.16.4.2.4. Ensure time on case agrees between the closing record, Form 5773, CCR and WebETS. See IRM 4.75.16.4.8. Group managers will document their approval of the examined case closure on the CCR. Note: You may scan or digitally sign Form 895 and upload it to RCCMS. Upload all Forms 3198-A to RCCMS. 4.75.16.4.2 (02-05-2020) Statute Considerations Verify the correctness of the statute of limitations date: For information on determining statute dates for EO, see IRM 4.75.10.6.1, Statute of Limitations. For information on determining statute dates for EO claims, abatements and refunds, see IRM 4.75.37.3 and IRM 4.75.37.4. For information on determining statute dates for IRC 4958 excise tax, see IRM 7.27.30.11. For information on determining statute dates for private foundation excise taxes, see IRM 7.27.19. For information on statutes for purposes of completing an EO closing record, see IRM 4.5.2.4.1.28. For servicewide information on determining statute dates, see IRM 25.6.1, Statute of Limitations Processes and Procedures. For servicewide information on extensions of statute dates by consent, see IRM 25.6.22. For servicewide information on statutes for assessment of tax, see IRM 25.6.22 (Form 872). For servicewide information on statutes for assessment of employment taxes, see IRM 25.6.22.6.10 (Form SS-10). For servicewide information on statute controls, see IRM 25.6.23. For servicewide information on determining statute dates for claims, abatements and refunds, see IRM 25.6.1.10. For instructions in updating statutes on AIMS, refer to IRM 4.5.1, and see the instructions to Form 5595. Make every attempt to complete the case before a statute extension becomes necessary. Identify short statute returns. A "short statute return" for EO is a return with less than 270 days remaining until the ASED. To the extent the procedures in this IRM impose tighter controls than those in IRM Chapter 25.6 use the procedures in this IRM. Example: IRM 25.6.23.5.1.1 requires statute controls for returns with assessment statutes that expire within 180 days. This manual requires statute controls for returns with statutes that expire within 270 days. Follow the instructions with respect to statute controls from this manual, because statute controls for EO Examinations take effect sooner than those stated in IRM 25.6.23.5.1.1. Maintain "statute controls" for all short statute returns under examination, whether or not controlled on AIMS. See also IRM 4.75.16.4.2.1. 4.75.16.4.2.1 (02-05-2020) Statute Controls Statute controls for returns under examination include: Verifying the statute date is accurate, including ASED alpha codes. Flagging the case with a red case file folder, and with Form 3198-A upon closure. Attaching AMDISA and INOLES prints no more than 30 days old to the working returns. Identifying related returns under examination with statute dates dependent on the filing of a primary return. Initiating and updating Form 895. Notifying the group manager and t/p as necessary. Timely soliciting of statute extensions. See also IRM 4.75.16.4.2.1.1. Reconciling AIMS Table 4.0, Returns with Statute Date Pending, to RCCMS at least monthly. Closing short statute returns promptly, and explaining delays on the CCR. See IRM 4.75.16.4.2.3. Providing advance written notification of a forthcoming short statute return. See IRM 4.75.16.4.2.2. Taking other appropriate actions to protect the government’s interest. Note: You may order Form 10364-A, a pre-printed red folder. Note: A red folder is not needed if you extend a statute beyond 270 days, even if Form 895 is required. Form 895. Initiate and complete Form 895 if the group secretary or manager didn’t furnish you one. Criteria for initiating Form 895 includes: There are less than 270 days remain on the ASED. A statute extension is executed. You use an ASED Alpha code. Counsel opines in writing that a six year statute or no statute applies to a filed return. Other servicewide criteria are provided in IRM 25.6.23.5. Note: For instructions on completing Form 895, see IRM 25.6.23.5.2 and IRM 25.6.23.5.3. Note: Scan or digitally sign Form 895 and upload to RCCMS. Upload Form 3198-A to RCCMS. Invoking 6-year Statutes, No Statute, or ASED Alpha Code PP. Obtain Area Counsel’s written opinion on invoking these statute conditions. Area Counsel requires 45 days. ASED Alpha Code "PP" . Refer to additional instructions and examples in IRM 4.75.16.4.2.5. Allowing Statute to Expire. Follow the instructions in IRM Exhibit 25.6.23-3. Statute has Expired. If a statute for assessment has expired, complete Form 3999. Refer to the instructions in IRM 25.6.1.13.2.1. Exception: Form 3999 is not required if the tax, penalty and interest is less than the amount stated in IRM 25.6.1.13.2.4(2). Statute Expires Before You Receive Return. Prepare a preliminary Form 3999 and give it to the group manager. The group manager will forward the preliminary Form 3999 to the group or area that had possession of the return when the statute expired. Statute Expires After Case is Assigned to You. Complete Form 3999 explaining the facts and circumstances. Use DC 01 (210) for returns with barred statutes. Routing and disposition of Form 3999. Follow the instructions in IRM 25.6.1.13.2.8.1 using TE/GE equivalent offices as substitutes for SB/SE offices in the instructions. The EO Closing Unit and the review functions will not accept a short statute case without required statute controls. For servicewide instructions on statute controls, refer to IRM 25.6.23.6. 4.75.16.4.2.1.1 (07-18-2017) Extending the Statute Date Use Letter 3600 or Letter 3599 to solicit extensions from a t/p. Enclose two copies of completed Form 872, 872-A or SS-10 (consent forms) for the t/p to sign (three copies if there is a designated representative). Enclose current version of Pub 1035, Extending the Tax Assessment Period. If there is a designated representative, issue Letter 3597 to the Power of Attorney, enclosing what you send the t/p. Document these actions on the CCR, with a due date for the reply. Other specialized letters to solicit statute extensions include: Letter 907, Individual Income Tax Statute Extension Request. Letter 907-E, Erroneous Claim for Refund or Credit Penalty Statute Extension Request. Letter 907-P, Return Preparer Penalty Statute Extension Request. Letter 4934, Appraisal Penalty Statute Extension Request. If the t/p signs and dates both copies of the consent forms (three copies if there is a designated representative): Inspect the signed forms for errors, markings and edits, and a signature, date and title of an authorized individual. Stamp all signed consent forms with the received date. Submit all signed consent forms to your group manager for counter signature. Electronic signatures are not permitted. Keep one original executed consent form for the case file, following case file assembly procedures. Prepare Letter 3598 or Letter 1343 for the t/p, enclosing the second executed extension form. If there is a designated representative, prepare Letter 3597 enclosing the third executed consent form. Copy for the case file what you will be mailing to the t/p and to the designated representative. Issue the letters and their enclosures to the t/p and designated representative Update the statute date on RCCMS (manually on Form 5595 if needed), Keep a copy of Form 5595 for the case file. Document these actions on the CCR. Update Form 895. Note: If the t/p only signs one copy of a consent form, refer to IRM 25.6.22.5.12(1)c. No Reply. If the t/p doesn’t reply to your request to extend the statute date by the due date: Discuss the next course of action with your group manager. If follow-up is the next course of action, issue Letter 3599, enclosing Pub 1035. Refusal to Extend the Statute. If a t/p won’t extend the statute of limitations for assessment: Discuss the next course of action with your group manager. For follow-ups generally, inform the t/p that not extending a statute date could jeopardize its right to appeal. The Appeals Office requires 365 days remaining on the statute date before it receives the case (180 days for cases previously returned to the examination group by Appeals). See IRM 8.2.1.4 (3). 4.75.16.4.2.2 (07-18-2017) Advance Written Notification to Closing Units Group managers must notify the receiving manager of the EO Closing Unit or review function, via secure email, that a short statute return is forthcoming. Advance written notification includes: The returns and years being closed. Actual statute expiration date for each return. The reason for the short statute condition. The dates a statute extension was solicited. The amount of tax and penalty for the short statute returns. An explanation why a statute extension wasn’t needed or wasn’t executed after extension requests. 4.75.16.4.2.3 (07-18-2017) Timeline for Closing Examined Returns Closing to EO Closing Unit. The EO Closing Unit now under Government Entities/Shared Services in TE/GE, will accept cases with at least 91 days left on the statute. Closing to EO Closing Unit - Imminent Statute. The EO Closing Unit will accept cases with an "imminent statute date," on the condition that the examination group manager places a phone call to both the Manager, EO Closing Unit and the Program Manager, CP&C Planning and Monitoring, to discuss special handling instructions. Closing to Review Function - Without Protest. A review function will accept cases with at least 91 days left on the statute. Closing to EO Closing Unit - With Protest. The EO Closing Unit will accept cases with at least 455 days (15 months) remaining until the ASED (at least 270 days for cases previously returned to the examination group by Appeals). Note: Appeals requires at least 365 days remaining on the statute to accept a case (at least 180 days for cases previously returned to the examination group by Appeals) . Closing to Review Function Imminent Statute Returns. Review functions will not accept an imminent statute return until the area office has issued a 90-day SNOD letter to the t/p covering the imminent statute return. 4.75.16.4.2.4 (07-18-2017) Imminent Statute An imminent statute return is a return with 90 days or less remaining until the statute expiration date. See IRM 4.75.16.4.2.3(2) for instructions for closing imminent statute cases to the EO Closing Unit. For imminent statute returns subject to a mandatory review, examiners assume the responsibility for preparing final closing letters including 90-day letters. Examiners: For instructions on preparing a final adverse determination letter (FADL), see IRM 4.75.20, Final Case Processing. For instructions on preparing a SNOD, see IRM 4.75.20 and IRM 4.8.9. For instructions on preparation of Letter 3523, Notice of Employment Tax Determination Under IRC section 7436. See IRM 4.8.10. Arrange for pre-issuance review of the draft 90-day letter with Area Counsel. See IRM Exhibit 4.75.20-2, Memorandum to Area Counsel. Refer also to the TE/GE Area Counsel Directory. Review functions are not available for pre-issuance review. With the group manager’s approval, send the completed 90-day letter package to the appropriate area address in order to obtain the signatures on the 90-day letter. Include pre-addressed mailing envelopes with the package. See IRM 4.75.17.2.5, 90-day Letter Preparation and Issuance, for the contents of the 90-day letter package. Note: Area Counsel's approval is not required for agreed declaratory judgment cases. Reminder: Area Counsel generally requires up to 45 days to provide legal advice. Area Offices: Regarding the SNOD and Letter 3523, Notice of Employment Tax Determination Under IRC section 7436, the area manager signs and issues the 90-day letter to the t/p via certified mail. Regarding the FADL, forward the two copies of the FADL to the Manager, FSL/ET (or designee) for signature. The Manager, FSL/ET (or designee) will return the signed FADLs to the area office for issuance via certified mail. Note: TE/GE is undergoing a restructuring as of the publishing of manual. Examination groups indicate on Form 3198-A, the following: The 90-day letter that was issued and the date issued. See the "Other" checkbox (or the "Stat Notice Issued Date" checkbox), located in the "Mandatory Review/Operations, Planning & Review" section of the form The recomputed statute date after issuing an SNOD or Letter 3523, Notice of Employment Tax Determination Under IRC section 7436.. See IRM Exhibit 4.5.2-5, Computation of Statute Dates Note: There is no recomputed statute date after issuing a FADL. If you had not issued a 30-day letter by the time a statute date is imminent, do the following: Consult with Area Counsel whether to issue a substitute transmittal letter in lieu of a 30-day letter. If the substitute transmittal letter is to be issued, determine the content, format, timing and issuance of the letter with Area Counsel. Include in the transmittal letter why a standard 30-day letter can’t be issued if so advised by Counsel. Include the most recent Taxpayer Advocate Service (TAS) paragraph in the cover letter by reviewing TAS paragraphs in recently published 30-day letters. Enclose your report of examination if so advised by Counsel. Issue the substitute transmittal letter transmitting your report of examination, either before or on the day of issuance of the 90-day letter to which it pertains. Close the imminent statute case to Mandatory Review for suspense and storage within five (5) business days of issuance of the 90-day letter. 4.75.16.4.2.5 (02-05-2020) Form 990 and Using ASED Alpha Code "PP" Use ASED alpha codes to indicate that special conditions exist that affect a statute expiration date for an EO non-taxable returns, such as Form 990. See IRM Exhibit 25.6.23-3, Instructions for Updating the Statute on AIMS. EO Non-taxable returns are initially controlled with an actual statute expiration date. If properly authorized, you can update the statute to alpha code "PP." Caution: Persons making alpha code determinations must understand how the tax law impacting the periods of limitation applies in each particular situation. Assessment statutes have expired and the ability to assess tax has been lost through the improper use of alpha codes. Refer to: IRM 4.75.10.6.1.6.1 for instructions on obtaining approval of ASED alpha code "PP" for Form 990, Form 990-EZ, or Form 990-N. The use of alpha Code "PP" does not relieve the examiner from carefully monitoring normal statute expiration dates for all examined returns. 4.75.16.4.3 (07-18-2017) Closing Conference The closing conference is part of the examination communication process that precedes the closing and shipping procedures of this manual. See IRM 4.75.13.7.2, The Closing Conference, for instructions on conducting a closing conference. 4.75.16.4.4 (07-18-2017) Form 5599 and the RCCMS Closing Record Complete RCCMS Closing Record screens, for examined closings. Complete Form 5599 for paper closures. Refer to IRM 4.5.2.4 for Form 5599 instructions. Exception: 100 percent paperless cases for purposes of completing Form 5599. Other guidance for completing Form 5599 for employment tax returns are found in: IRM 4.23.8. IRM 4.23.9. IRM 4.23.10. 4.75.16.4.4.1 (02-05-2020) Disposal Codes Enter the proper disposal code on item 13 of Form 5599, the paper closing record for each examined return, unless the closure is 100 percent paperless. AIMS only allows one disposal code that best describes the principal examination result for the return or non-return unit under examination. In cases involving multiple examination results, select the examination result with the highest priority disposal code. Refer to the list of disposal codes and the Disposal Code Priority Table in Document 6379, Information Systems Codes FY 2020 Quick Reference for EO Employees. Refer to the list of disposal codes and the Disposal Code Priority Table in Document 11308, Information Systems Codes FY 2020. Example: If the examination of a primary return results in a low-priority outcome, such as no-change advisory (DC 52 (214)), but you secure a delinquent related return, the correct disposal code for the primary return is DC 05 (207), Delinquent Related Return Secured. DC 05 (207) is a higher priority disposal code than DC 52 (214). For RCCMS purposes: Select the three digit RCCMS closing code that best describes the principal examination result from the drop down menu in the RCCMS Closing Record, the name of which corresponds to your selected AIMS disposal code. This manual will show AIMS two-digit disposal codes followed by the corresponding three-digit RCCMS closing code in parenthesis. Example: A no-change disposal code with its corresponding RCCMS closing code is identified in this manual as "DC 02 (107)." Before selecting a disposal code refer to Document 6379 or Document 11308 for the official description of each disposal code. Each succeeding paragraph supplements Document 6379/ Document 11308 to clarify the official descriptions. Consider each disposal code guidance in the succeeding paragraphs as including the phrase, "unless a higher priority disposal code applies." Disposal Code 01 (210), Regulatory/Revenue Protection. Use this code for an agreed reduction of an NOL without affecting tax liability. Use DC 07 (601) or DC 10 (604) if unagreed. Applies to any period accepted as filed as a result of a CSP offer. See IRM 4.75.16.5.3.1. Applies to an agreed disallowance of a claims in full. Use DC 03 (102) for agreed disallowances in part, or in full with tax change. Applies to an agreed disallowance of abatement requests in full. Use DC 03 (102) if agreed in part. Applies to closing returns with barred statutes. Do not use this code for unagreed disallowance of claims or abatement requests. Instead use DC 07(601) or DC 10 (604). Disposal Code 01 (303), No Change with Adjustments (GE Examinations) Applies to no-change examined returns (even if a 30-day or 90-day letter was issued) if there is an adjustment to the tax base data such as income or deduction items but no change in tax liability or refundable credits. The followings are example of no-change with adjustment examinations: 1) An agreed claim disallowance in full; 2) Excise, trusts, or employment tax cases when offsetting to tax base data, a change to income and/or deduction items reported on the return, and/or credits results in a no-change in tax liability (example, CSP Form 941 for no-change quarters, IRM 4.23.6.14.10); or 3) The closings of a barred statute. Disposal Code 02 (107), No Change Applies when there is no change to tax or status, and there are no advisories. The return if present is accepted as filed. Applies to closing a church tax inquiry with no examination. AIMS Activity Code 345 is required. This is not an examined closure. Applies to tax adjustments not made due to acceptable tolerances, except see DC 18 (301) and DC 54 (304). Does not apply if there is a reduction to an NOL. Use instead DC 01 (210), DC 07 (601) or DC 10 (604). Does not apply where a written advisory is required. Use instead DC 08 (213) or DC 52 (214). Does not apply to EOBMF Status 36 returns. Use instead DC 08 (213) or DC 52 (214). Disposal Code 03 (102), Agreed Tax or Penalty Change "Tax returns" include claims and requests for abatements allowed in full or to partial allowances if agreed. Note: If allowing an abatement under IRC 4962, the tax must have been previously assessed for purposes of this disposal code. Otherwise use DC 18 (301) or 54 (304) if no tax was previously assessed. "Tax returns" include primary returns on Form 990-PF and Form 990-BL. "Tax returns" include employment tax returns for periods included in a CSP agreement. "Penalty change" applies only to a penalty subject to deficiency procedures. See IRM 20.1.1.4.2. "Deficiency Procedures" are exemplified by a 30-day letter, appeal if protested, and a 90-day letter SNOD process. Does not apply to Form 4720-A if there is an agreed intermediate sanction payment under IRC 4958. Use instead DC 50 (101). Does not apply to full disallowances of claims and requests for abatement. Use instead DC 01 (210) if agreed, or DC 07 (601) or DC 10 (604) if unagreed. Does not apply to imposing miscellaneous civil penalties on the organization. Use instead DC 08 (213) or DC 52 (214) on the closing record of the examined primary return. Miscellaneous civil penalties are listed on Form 8278. There must be a signed waiver form in the case file except for claims and requests for abatement allowed in full. Note: Form 4720-A isn’t a standard form in the Electronic Publishing Products Catalog. A Form 4720 is designated as Form 4720-A (MFT 66) if a t/p completes Part II-A. Disposal Code 04 (205), Change to Related Return Use this disposal code for primary returns. The "changed related return" need not be the same tax period as the primary return under examination. The "changed related return" may be a discrepancy adjustment return or Form 4720-A. The "changed related return" may be a return under the examination jurisdiction of EP, TEB or SB/SE. The "changed related return" includes a claim or abatement request allowed in full or in part (including surveyed claims). The "changed related return" includes a claim or abatement request disallowed in full but there is additional tax. "Change in status" includes revocations, disqualifications, reclassifications of foundation status, and terminations. A "change" includes a closing agreement or CSP with respect to a related return under examination. A "change" to the related return includes using DC 18 (301), DC 50 (101) or DC 54 (304) for the related return. Does not apply if the related return is a claim or abatement request disallowed in full, with no addition to tax. If a single related tax return was adjusted in a multiple primary return examination, all primary returns will reflect this disposal code. Example: The 2009, 2010 and 2011 Forms 990 are under examination. The only issue is inurement in 2011. The agreed revocation would be effective 1/1/2011. The AIMS disposal code for the 2011 Forms 990 is DC 09 (211). The AIMS disposal codes for the 2009 and 2010 Forms 990 are DC 04 (205) because the examination of their related 2011 return resulted in a change in status (revocation). Example: Assume the same facts as the first example, except Forms 990-T were also open for examination for 2009, 2010 and 2011 and all are no-changed. The 2011 Form 990-T would close with DC 09 (211), Agreed Revocation. The 2011 tax year is an affected tax year with respect to a revocation. All EO-only returns filed for that tax year will reflect the same revocation disposal code. The 2009 and 2010 Forms 990-T would have to close with DC 02 (107) because DC 04 (205) is only available for primary returns. Disposal Code 05 (207), Delinquent Related Return Secured Use this disposal code to close primary returns. The "delinquent related return" need not be the same tax period as the primary return. The "delinquent related return" may be a discrepancy adjustment return or a Form 4720-A. The "delinquent related return" may be a related return under the examination jurisdiction of EP, TEB or SB/SE. The "delinquent related return" includes payee information returns and other special purpose returns, e.g., Form 1099. Using this disposal code won’t necessarily mean a related return will close with DC 06 (208). The converse is also true. Example: Forms 990 for 2015 and 2016 are under examination. Only the 2015 Form 990 was filed. The examiner secures the delinquent 2016 Form 990 during the examination. There were no other issues. The examiner issues a written advisory regarding the t/p's late filing of the 2016 Form 990. Because a delinquent related return was secured, the 2015 Form 990 will close using DC 05 (207), which is a higher priority than DC 52 (214) or DC 08 (213) for written advisories. The proper disposal code for the 2016 Form 990 would be DC 06 (208). Disposal Code 06 (208), Delinquent Return Secured Delinquent Return includes a secured converted return. "Delinquent Return" includes a secured Form 990 from a 990-N filer, even if TC 150 previously posted. Does not apply to secured amended returns or IRIs. Use instead DC 08 (213) or DC 52 (214). Does not apply if you later adjust the secured delinquent tax return or converted return. Use instead DC 03 (102), 07 (601) or 10 (604) for the change. Using this disposal code doesn’t mean the primary return will close with DC 05 (207). The converse is also true. Disposal Code 07 (601), Unagreed - Protest to Appeals Use this disposal code for unagreed change in status, tax or penalty. "Change in status" includes revocations, disqualifications, or reclassifications of foundation status. Applies to any appealable issue, including unagreed reductions of NOLs that do not affect tax liability. Applies to unagreed disallowance of claim or request for abatement. For revocations, all primary returns and related EO secondary returns (e.g., Form 990-T, Form 1120-POL) for the affected tax years will reflect the same disposal code. Does not apply to revocations or foundation reclassifications of churches. See IRC 7611(g). Disposal Code 08 (213), Written Advisory - Form 5666 Required Use this disposal code to close primary returns only. If examining a secondary tax return and you want to issue an advisory, you must establish examination controls for a primary return. Applies to returns closed with issuance of an inadequate records notice. Applies to secured amended primary returns or IRIs. Miscellaneous civil penalties may or may not accompany this disposal code depending on reasonable cause. Disposal Code 09 (211), Revocation - Agreed All primary returns and related Forms 990-T for the affected tax years will reflect the same revocation disposal code. If Form 990-T is open for examination for the same year, address the alternate issue in the revocation RAR. Close other primary return tax years not affected by the revocation using DC 04 (205). Applies to IRC 508(c)(1) organizations such as churches, and to subordinates in a group ruling. Does not apply to agreed disqualification of 501(c)(12) and (c)(15) organizations. See below DC 13 (501). Does not apply to agreed disqualification of Status 36 organizations. See DC 13 (501) below. When this disposal code is used, Item 22, Status Code, of Form 2363-A, must be either 22, 18, or 19. This disposal code requires a signed waiver Form 6018 in the case file. Use the appropriate revocation PIC on Form 5599 and RCCMS. Disposal Code 10 (604), Unagreed - Without Protest This disposal code is used for unagreed changes in tax or status (other than revocations). Applies to unagreed disallowances of abatement requests and claims. Applies to unagreed reduction of NOLs that do not affect tax liability. Use DC 01 (210) if agreed. Does not apply to revocations. Use instead DC 55 (605). Does not apply to revocations of exempt churches or disqualification of non-recognized churches. Use instead DC 15 (602). Does not apply to foundation reclassifications of churches. Use instead DC 15 (602). Disposal Code 11 (603)Unagreed -Petition to Tax Court (GE Examinations) This code should be used to close an examination in which there is an unagreed issue and the taxpayer timely files petition with the Tax Court or District Court. Disposal Code 12 (104), Closing Agreement This code is used to close an examination of a return subject to an executed closing agreement. Related primary returns under examination that are not part of the closing agreement use DC 04 (205). Does not apply to employment tax returns subject to a CSP agreement. Instead use DC 03 (102) for the agreed tax periods in a CSP and DC 01 (210) (303 - GE examinations) for the no-change periods. Disposal Code 13 (501), Referrals to Other Operating Divisions Use this disposal code for identifying adjustments and delinquencies under the jurisdiction of LB&I, SB/SE and W&I. Applies to agreed disqualifications only if you refer the ensuing income tax matter on Form 5666. Does not apply to agreed disqualifications if you enforce income taxes. Instead use DC 04 (205) or DC 05 (207). Does not apply to referrals to other business units within TE/GE, such as EP. Instead use DC 08 (213) or DC 52 (214). Does not apply to requests for assistance by specialists, such as CAS, engineers, economists, etc. Disposal Code 14 (212), Termination-Agreed This disposal code applies to the final tax period of the organization if such tax period was examined. Applies to primary returns only. Use this disposal code only if the criteria in IRM 4.75.15.8.4 have been satisfied. Close other primary returns using the appropriate disposal codes for those returns, but no lower priority disposal code than DC 04 (205), because DC 04 (205) is a higher priority than a no-change or advisory disposal code. Disposal Code 14 (502), Referrals to Other Segments of TE/GE Operating Division (GE Examinations) This code should be used to close an examination in which a referral is made to another segment of the TE/GE Operating Division. Disposal Code 17 (203), Change in Foundation Status-Agreed This disposal code applies to IRC 501(c)(3) organizations. This disposal code also applies to IRC 4947(a)(1) trusts reclassified for treatment as a private foundation. This disposal code applies only to agreed reclassifications of foundation status. This disposal code requires a signed waiver Form 6018 in the case file. For unagreed reclassifications of foundation status use either DC 07 (601) or DC 10 (604). Disposal Code 18 (301), Chapter 42 Under Tolerance and Disposal Code 54 (304), Chapter 42 Under Tolerance - Non-PF Form 990 Use these disposal codes when identifying Chapter 42 tax adjustments, but which are resolved by application of tolerances, or by a determination that a taxable event was due to reasonable cause and not due to willful neglect. In the case of IRC 4955 excise tax on political expenditures, substitute the phrase "not willful and flagrant" for the phrase, "due to reasonable cause and not to willful neglect" . Does not apply to abatements of chapter 42 excise taxes after they have been previously assessed. Instead, use DC 03 (102) if abated in full or in part (agreed). Disposal Code 19 (201), Amendment Secured Use this code if you require an amendment to an organizing document and you secure a conformed copy of the amendment. Does not apply to secured amended returns or IRIs. Instead use DC 08 (213) or DC 52 (214). Disposal Code 52 (214), Written Advisory - No Form 5666 Required Use this disposal code to close primary returns only. If you are only examining a secondary tax return and you want to issue a written advisory, establish the primary return for examination. Applies when some aspect of the EO’s operations are noncompliant, but the noncompliance doesn’t necessarily jeopardize exempt status. Applies to secured amended returns or IRIs, but not enough to warrant Form 5666. Applies to imposition of miscellaneous civil penalties (Form 8278) against the organization. Does not apply to tax returns with a written advisory unless they are Form 990-PF and Form 990-BL. Does not apply to penalties subject to deficiency procedures. Instead, use DC 03 (102) if agreed, or DC 07 (601) or 10 (604) if unagreed. Disposal Code 55 (605), Unagreed Revocation Without Protest Use this disposal code for unagreed revocations without protest. All primary returns and related Forms 990-T for the affected tax years will reflect the same revocation disposal code. Does not apply to unagreed revocations or foundation reclassification of churches. Use instead DC 15 (602). Use the appropriate revocation PIC on Form 5599 and RCCMS. 4.75.16.4.4.2 (02-05-2020) Principal Issue Codes(PICs) Principal Issue Codes (PICs) assist in providing historically available data from examinations to create a model that distinguishes compliant from non-compliant returns. In order for this model to work correctly, you must use PICs accurately and consistently. For PIC purposes, no change returns are defined as those closed under the following disposal codes: DC 02 AIMS (107 RCCMS) - No-Change. DC 53 AIMS (302 RCCMS) - No-Change to a Related Return. For PIC purposes, no change with advisory returns are defined as those closed under the following disposal codes: DC 08 AIMS (213 RCCMS) - Written Advisory – Form 5666 Required. DC 52 AIMS (214 RCCMS) - Written Advisory - No Form 5666 Required. For PIC purposes, change returns are defined as those closed under the following disposal codes: Regulatory/Revenue Protection Change Disposal Codes: 01 (210), 18 (301), 19 (201) and 54 (304). Tax or Status Change Disposal Codes: 03 (102), 04 (205), 05 (207), 06 (208), 07 (601), 09 (211), 10 (604), 11 (603), 12 (104), 13 (501), 14 (212), 15 (602), 16 (204), 17 (203), 34 (103), 50 (101) and 55 (605). Enter PICs on Form 5599 (unless 100 percent paperless) and on the closing record in RCCMS. At a minimum, one PIC must be used for every closing record (Form 5599) of an examined return. A maximum of four codes may be listed in order of priority from left to right. If more than one type of return is being examined, such as Form 990, 990-T, and 941, the PICs that relate to each specific return should be recorded on its closing record. However, the PICs for related returns should also be applied to the closing record for primary returns. Use the PICs specific to your examination issues addressed during the examination. Refer to Doc 6379 for the table of 3-Digit PIC numbers, which is divided into major issue categories. Select PICs in the following order: Select all "change issues" by order of major issue category in paragraph (8). These PICs must end in any letter other than"A" and do not have the word "Advisory" in the PIC title. For primary returns only, select all "advisory issues" by order of major issue category in paragraph (8). Then follow these rules: If there is an "advisory PIC" available for the issue category of your issue, as demonstrated by the word "advisory" in the title of the PIC, select that advisory PIC. If there is no "advisory PIC" within your issue category, select the no-change PIC within that category (normally ending in "A" ). See steps 3 and 4 in this table for exceptions to this rule. For issue categories 01 (Filing Requirement) and 13 (Accountable Plans), select any PIC within these categories that best fits your advisory issue, other than 01A and 13A. For issue categories 23 and 25, without a no-change PIC, select any PIC within these categories that best fits your advisory issue. If there are no more change or advisory issues, select all "no-change issues" addressed in the examination by order of major issue category in paragraph (8). These PICs must end with the letter "A" . Note: The closing records of tax returns (other than Form 990-PF and 990-BL) never reflect advisory PICs with the word "Advisory" in the PIC title. Tax returns are either changed or no-changed. The priority order of major issue categories is as follows: Exemption issues. Excise tax issues. Unrelated business income tax (UBIT) issues. Employment tax issues. Other issues. Example: Examiner has examined XYZ Charity and has prepared a report of examination proposing a revocation of tax-exempt status. examiner is preparing Form 5599 for the Form 990 return under examination. During the examination, examiner addressed two issues in her report that resulted in a proposed revocation: (1) political activity and (2) not operating in furtherance of an exempt purpose. The political activity is the primary exemption issue by reason of significance of the issue. examiner also pursued the inurement issue, but there was no evidence to substantiate that issue. Additionally, examiner determined that XYZ failed to properly withhold on prizes and proposed a tax change on Form 945. A worker classification issue was identified for a bookkeeper, but it was determined that the bookkeeper routinely performed bookkeeping services for other similar organizations and there was no adjustment.Step 1, Select All Change Issues: Select all change issues for the organization; in this case, they include political activity, not operating in furtherance of exempt purposes, and backup withholding tax. Among the change issues, the two revocation issues are the highest priority issues because they fall under the exemption issues category in paragraph (8). The appropriate PICs for the revocation issues will be "04D" and "04B" respectively. The political activity issue was listed first among the revocation issues because that was the primary reason for proposing a revocation. The backup withholding issue is the last of the change issues, which is under the employment tax issues category in paragraph (8), and is issue "19C."Step 2, No-Change Issues: Since there are no more change issues and there is no advisory in this case, the no-change issues are then selected. The no-change issues include the inurement issue and the worker classification issue. The inurement issue is the highest priority among the no-change issues because it is an exemption issue in paragraph (8). Consequently, the first no-change PIC code is "48A, Inurement - No Change." Because the no-changed worker classification is an employment tax category issue, select "15A, EE Class.-No Change" to follow the no-change exemption issue.Step 3, Complete Form 5599 and Input PICs in RCCMS: Form 5599 will list the PICs in priority order from left to right as follows: 04D, 04B, 19C and 48A. Note that PIC "15A" will not be included because only a maximum of four codes can be listed. Assume the two exemption issues in this example did not result in a revocation, but instead resulted in an advisory. The appropriate PICs for the Form 990 closing record would be in priority order from left to right as follows: 19C, 08B, 03B, and 48A, The only change issue in this situation is the backup withholding issue, followed by the advisory issues and the highest priority no-change issue. PICs for noncomplying organizational documents: If you secure conformed copies of amended organizing documents after the start of the examination to satisfy organizational requirements, use PIC code 02B, Org. Req. - Advisory. If after discussion with the group manager, you propose a revocation for not satisfying organizational requirements, use Use PIC 02C, Org. Req. – Other, along with the proper revocation disposal code. If there are two or more issues within each major category, follow the guidance below in prioritizing PICs: Type of issue: Action to take: Two or more exemption issues Determine and list in order of highest to lowest significance. "Significance" is determined by such factors as time and resources spent on the issue, and sensitivity and importance of the issue. Significance is generally reflected in the order the issues are presented and addressed in the report of examination or in the advisory letter. Two or more UBIT issues List in order of greatest to least revenue. Two or more employment tax issues List in order of greatest to least tax amounts. If examining more than one type of return, such as Form 990 and Form 990-T, list the PICs that relate to each specific return in the appropriate Form 5599 and RCCMS closing record. 4.75.16.4.4.3 (07-18-2017) RCCMS Closing Record - The "Closing With" Field Refer to Document 13214, EO RCCMS Case Closing Desk Guide. The Closing Record tab in RCCMS includes a "Closing with" field representing the form of working return you are using in the examination. 1 - Original Return (blocking series = 00X). Use for: Original Tax Return. Original non-examined paper survey. SFRs including Non-Master File returns. Form 2275, Records Request, Charge and Recharge, in lieu of a return. 2 - Taxpayer Return (blocking series = 90X). Use for: Copy of t/p’s return. SEIN returns. RICS returns. Dummy returns that are not SFRs, including filed Form 990-N in the following forms: Graphic Print of 990-N Postcard, available via Employee User Portal (EUP) database. See Exhibit 4.75.16-7 for a sample. Also, indicate on Form 3198-A the case includes proof of filing Form 990-N. (For references to EUP, see IRM 4.21.1.1.31, Employee User Portal (EUP), and IRM 21.2.3.3, IRS Systems.) TEOS print for Filed Form 990-N. See Exhibit 4.75.16-7 for a sample. Also, indicate on Form 3198-A the case includes proof of filing Form 990-N. 3 - Electronic Prints (blocking series = 30X). Use for: BRTVU prints (BMF). RTVUE prints (IMF). TRDPG prints (IMF and BMF). Non-examined paper survey. 4 - Paperless Examined (blocking series = 40X). Use for: Examined paperless closures. 5 - No Return (blocking series = 10X). Use for: Closures to Appeals. Partial Assessments. 6 - No Return/Workpapers (blocking series = 28X). Use for: Non-examined paperless surveys (use only for BMF). 7 - Paperless Non-Examined (blocking series = 13X for IMF or 28X for BMF). Use for: Paperless surveys (the return requisition indicator equals "3" ). RCCMS control clean up. 4.75.16.4.5 (02-05-2020) Form 2363-A For instructions on completing the Form 2363-A refer to IRM 25.7.1.5, Form 2363-A Preparation Instructions. Complete Form 2363-A to correct any EOBMF entity errors identified during the examination, including name and address. Also, complete Form 2363-A to reflect any changes to an organization’s status resulting from your examination. Reminder: For cases subject to mandatory review, complete but don’t send Form 2363-A based on examination results to the FAST, such as a revocation. The FAST’s address and other contact information is provided below: FAST U.S. Postal Service Address and UPS Address Tax Exempt & Government Entities - FAST Attention: FAST M/S 1114 1973 Rulon White Blvd. Ogden, UT 84201-0252 FAST Contact Numbers and E-mail Address: FAST e-Fax Number 877-814-2236 FAST e-mail address tege.fast@irs.gov Some common changes requiring the preparation of a Form 2363-A and the disposition of the Form 2363-A are as follows: For Submit Form 2363-A A Name and/or Address Change To the FAST Immediately An Exempt Status Change With the case file to the review function A Foundation Status Classification Modification With the case file to the review function A Filing Requirement Change: Delinquent Return Secured To the FAST Immediately Contested Filing Requirement With the case file to the review function NTEE To the FAST Immediately Place in the workpapers retained copies of Form 2363-A processed. Mark as "Copy - Original Sent to the FAST on Date." For Forms 2363-A to be processed based on examination results, complete Form 3198-A by checking the box, "Entity Change Form 2363 Prepared _____." 4.75.16.4.6 (02-05-2020) Form 3198-A Attach a Form 3198-A to any case file requiring special handling. Appropriately note the following items on Form 3198-A: Cases subject to mandatory review. Cases that require updating the EO BMF on Form 2363-A. Cases closed based on an organization's retained copy of a return. Cases where an amended return was received directly from the t/p during the examination. Power of Attorney instructions. Discrepancy adjustments cases. Restricted interest cases. Unagreed cases. Cases with less than 270 days (9 months) until the statute of limitations for assessment expires. Instructions for notification of state officials. Related case files. Any other special instructions regarding the case that may be helpful in the closing process. The case includes proof of filing Form 990-N. Under “Other instructions” may include, but don’t limit to, the following: Form 4669 adjustments allowed by examination. Wage statements secured by examiner (send originals to Social Security Administration (SSA)). Delinquent Form 1099 secured by examiner (send original to Cincinnati Campus). Assess Civil Penalty as indicated on Forms 8278 and 3645. -A freeze addressed-release freeze. ASEDR5 (enter only when ALL adjustments are subject to IRC 3509 rates). For revocations, refer to IRM 4.75.31.2.5 for further instructions on completing Form 3198-A. For a converted return case file, refer to IRM 4.75.31.3.2 for further instructions. 4.75.16.4.7 (02-05-2020) Form 5666 Information Report Use Form 5666 to: Recommend a future year examination of the same organization. Recommend the examination of another person, such as potential unreported gross income. Recommend the examination of a revoked organization for income tax. The general instructions for completing Form 5666 are on the back of the form. Scan, or obtain in electronic format, supporting documents and attach them to Form 5666. In the case of Form 5666 that can you process immediately: Electronically generate all Forms 5666. Digitally sign the form. Forward Form 5666 to your group manager via secure e-mail for electronic signature. Secure e-mail Forms 5666 to *Manager EO Classification. Include the following in Item D, Forward Report to Name/Date/Organization/Telephone Number: All Forms 5666 go to the EO Referrals group: EO Referrals Group, MC 4910 DAL. Current Date. Exception: For cases subject to mandatory review, don’t enter the current date. The review function enters the current date when closing the case. The EO Referral’s group street address is: Internal Revenue Service EO Referrals Group 4910 DAL 1100 Commerce St. Dallas, TX 75242 If the case involves a tax liability extending beyond the taxable years under examination or into a taxable period for which a return is not yet due, prepare a Form 5666 recommending a future year examination to ensure compliance. Prepare and submit Form 5666 or Form 5346 through the EO Referrals group to LB&I or SB/SE if you find: The examination affects the tax liability of an individual or taxable entity. The issue can’t be addressed using discrepancy adjustment procedures. Note: If you use EO Form 5666 for this purpose, it won’t be declined by reason of the TE/GE heading. Form 5666 is required if you observe activities or operations, which if enlarged or ongoing, may jeopardize the organization’s exempt status. Use DC 08 (213) unless a higher priority disposal code applies. Keep the form in the case file for the EO Closing Unit. The EO Closing Unit will be looking for the form to be processed. Don’t send the form to the EO Referrals Group in this case. Form 5666 for a future examination is required for inadequate records notices. The future examination applies to no less than two years subsequent to the year of the current examination. For revocations and disqualifications, in lieu of EO enforcing income taxes on the non-qualifying organization, you must prepare Form 5666. Refer to IRM 4.75.31.2.6 on preparing Form 5666 in lieu of EO enforcing income taxes. Don’t send Form 5666 to the EO Referrals Group. Instead, include Form 5666 and its attachments in the revocation case file pending a final decision on the revocation issue. 4.75.16.4.8 (07-18-2017) Time Reporting Track the time spent on the case. Update your CCR when working on the case. Record the hours spent on both the CCR and on WebETS. If working multiple returns, list all of the returns on WebETS. As needed, use the Copy button when viewing a case on WebETS (Case Quick View, click on the case.) Change the tax year and click Add Case. Split the time among related returns, if working those returns. Example: If working a Form 990 and a Form 990-T, split the time based on which issue is being worked. At closing, record the total hours for each type of return on the Form 5773. Prepare one Form 5773 for each type of return worked. Example: You are examining the 201012 and 201112 Forms 990 and 990-T. Prepare a Form 5773 for the Forms 990, and a Form 5773 for the Forms 990-T. Record the examiner's time on item 28 of Form 5599 and on the RCCMS Closing Records Details Tab to the nearest tenths of an hour (one decimal place), in 15 minute increments. A zero, "0," is required if the tenths field is zero. Report the 15-minute increment as follows: 00 minutes = .0. 15 minutes = .3. 30 minutes = .5. 45 minutes = .7. Use WebETS to complete the closing record. The CCR tracks the total time spent, while WebETS tracks the time per return. Verify that the time on Forms 5599 and the CCR match and that they reconcile to Form 5773 and WebETS. 4.75.16.5 (02-05-2020) Special Situations Certain situations may arise during an examination. This section covers in depth closing procedures for: Declaratory judgment cases (IRM 4.75.16.5.1, IRM 4.75.32.4). Automatically revoked organizations under IRC 6033(j) (IRM 4.75.16.5.2). Employment tax CSP agreements (IRM 4.75.16.5.3.1 and IRM 4.23.6). Closing agreements (IRM 4.75.16.5.4 and IRM 4.75.25). Form 990-N closures (IRM 4.75.16.5.5). Inadequate records (IRM 4.75.16.5.6). Installment agreements (IRM 4.75.16.5.7 and IRM 4.75.28.5.5). Organization not required to file returns (IRM 4.75.16.5.8). Unable-to-locate cases (IRM 4.75.16.5.9). Refer also to instructions for the following types of cases: Short statute returns, see IRM 4.75.16.4.2. Claims and requests for abatement, see IRM 4.75.37. Joint Committee cases, see IRM 4.36.2. Revocations, conversions, reclassification to private foundations, see IRM 4.75.31. Group rulings, see IRM 4.75.24. Penalty cases, see IRM 4.75.22.13. Restricted interest cases, see IRM 4.75.13.8.13 and IRM Exhibit 4.75.13-1. Refer to IRM 4.75.21 for cases with the following characteristics and conditions: Incomplete returns. Non-Return Units. Awards in Attorney Fees in Tax Cases. Federal Grand Juries, see also IRM 4.75.35. Collateral examinations. State Notification of examination Results. Information Referrals, see also IRM 4.75.16.4.7. Examinations Related to Indian Tribal Government Entities. IRS-Department of Labor (DOL) Coordinated Compliance Agreement. Whistleblower Cases. 4.75.16.5.1 (07-18-2017) Declaratory Judgment Cases With respect to the initial or continuing qualification of an organization as exempt from federal income tax, Section 406 of the PATH Act expanded declaratory judgment rights under IRC 7428 to all IRC 501(c) organizations regardless of paragraph and to IRC 501(d) organizations. As a result of these expanded rights, examiners may not modify a tax-exempt status (such as modifying a recognized IRC 501(c)(4) exemption to an IRC 501(c)(7)). Rather, the revocation procedures in place for IRC 501(c)(3) organizations have been expanded to all IRC 501(c) and (d) organizations. Thus, the IRS must revoke (or treat as a revocation for declaratory judgment purposes) any organization that no longer qualifies under the IRC code section for which tax-exemption was granted or self-declared. A revoked organization is free to apply or reapply for recognition of exemption under a different IRC section. Revocations or disqualifications of organizations exempt under other thanIRC 501(c)(3), IRC 501(c)(9) and IRC 501(c)(17), will not have an effective date. These organizations will be revoked (or treated as revoked in the case of disqualifications) for the specified tax years they failed to qualify. Declaratory judgment rights also applies to disqualifications of organizations described under IRC 501(c)(12) or IRC 501(c)(15) that fail their respective 85 percent member income test or gross receipts test for specified tax years. These cases will be treated as a revocation for declaratory judgment purposes for the failed tax years only. For closing purposes continue to follow IRM 4.75.16.4.4.1. IRC 7428 continues to apply to IRC 501(c)(3) organizations the same way it did prior to the PATH Act when proposing: A loss of tax-exempt status. Adverse reclassification of an organization’s foundation status for IRC 501(c)(3) organizations. Before closing a declaratory judgment case, refer to IRM 4.75.32, Declaratory Judgment and the Administrative Record. All declaratory judgment cases require an administrative record. Unagreed declaratory judgment cases also require a completed index to the administrative record. The review function or Appeals will issue 90-day FADL for these cases, which are subject to review by the U.S. Tax Court. 4.75.16.5.2 (07-18-2017) Automatically Revoked Organizations This subsection provides instructions for closing examinations where the organization was automatically revoked under IRC 6033(j). An automatic revocation is reflected in the status code field of the EOBMF as "97." Automatic revocation is effective for tax periods beginning after 2006. Generally, a status 97 can take one to six months to post after the passage of the third non-filed due date. Ogden Campus will post a status 97 in the EO BMF even if an organization is under examination. You can research TEOS for automatically revoked organizations. Organizations in status 97 receive their CP120A notice from Campus within two weeks after the IRS sends the notice. See Understanding your CP120A Notice for additional information. Generally, the date of the CP120A notice is the same date as the "Revocation Posting Date" in TEOS. If you secure a delinquent annual information return by the third due date, expeditiously follow delinquent return procedures. Wait until either the delinquent return posts or status 97 posts, whichever comes first in order to determine your next step. If the secured return posts a TC 150, continue the examination under normal examination procedures. If the secured return fails to post, and status 97 posts instead, survey the case as stated in the next paragraph. If a status 97 posts, survey the case. Prepare Form 1900. See sample language in Exhibit 4.75.16-2 for auto-revoked organizations. Use either: DC 32 (908), Survey After Assignment. DC 36 (909), Survey After Initial Contact. Note: Use Project Definer Codes (PDC) 1160, Assign to the Initial Primary Return or 1161, Assign to Additional Return Pick-ups. Note: See IRM 4.75.16.3.2, Survey Procedures for all other survey procedures. If there is a compelling reason to continue the examination after a status 97 has posted, submit a request to the Director, EO Examinations (or their delegate). Examples of reasons to continue an examination include: An earlier effective date of revocation needs to be proposed based on the facts and circumstances. A survey might jeopardize a fraud case. The examination is for a claim not yet resolved. For IRC 501(c)(12) and 501(c)(15) organizations, the posting of a Form 1120 series tax return in lieu of Form 990, is considered a filed return satisfying the filing requirement for automatic revocation purposes. A substitute for return (SFR) with a TC 150 is not a filed return for automatic revocation purposes. Employment tax returns and Chapter 42 tax returns are not subject to these procedures. Surveys of auto-revoked organizations are not subject to mandatory review. 4.75.16.5.3 (07-18-2017) Employment Tax Cases IRM Chapter 4.23 provides Servicewide instructions for all operating divisions with employees involved with the correct filing, reporting, and payment of employment taxes. IRM 4.23 serves as the foundation for consistent administration of ET by various IRS operating divisions. However, for purposes of closing EO ET cases after issuing your report, follow the closing instructions in this manual unless directed otherwise. 4.75.16.5.3.1 (02-05-2020) Classification Settlement Program (CSP) Cases Refer to IRM 4.75.21.15, EO Special Examination Procedures, for instructions, roles and responsibilities for the EO CSP process. For general instructions, refer to IRM 4.23.6, Employment Tax, Classification Settlement Program. For a description of the type of CSP Settlement Offers, see IRM 4.23.6.14.1. 4.75.16.5.3.2 (02-05-2020) IRC 3402(d) and IRC 3102(f)(3) Relief Cases In general, continue to follow the overall instructions in IRM 4.23.10.15, Partially Agreed Cases, except for IRM 4.23.10.15.2, Examination Procedures for IRC 3402(d) and IRC 3102(f)(3) Relief. For purposes of closing employment tax cases that fall under IRC 3402(d) when penalties are proposed, a modified two-step abatement/ partial assessment process must be used. The modified two-step abatement/partial assessment process ensures that the gross tax, penalties and interest are computed and assessed and then some relief of some portion of the tax. This relief doesn’t apply to reduce penalties and interest based on the gross tax. It only applies to the gross tax such as: Income taxes under IRC 3402. Backup withholding tax under IRC 3406. Additional Medicare tax under IRC 3101(b)(2) (including RRTA). Reminder: Do not use these partial assessment procedures if penalties are not being proposed based on the gross tax. The two-step process results in the generation of an initial billing notice for the gross amounts. The t/p will then receive a second notice containing the abatement allowed. First Step: - Create a partial closing record to assess the full tax and penalties. - In RCCMS, create a closing record for the partial assessment, following the procedures in the RCCMS Case Closing Guide. - Check the "Partial" box. - All examination adjustments, including any other employment tax issues (fringe benefits, IRC 3509, penalties, etc.) other than the IRC 3402(d) items, are to be included on the partial closing. Second Step: - Create a “full” closing record to include the IRC 3402(d) credit. - Do NOT check the “partial” box. - The ARDI and DC will be entered, as well as your time, technique code and name. - The adjustments on the full closing record will reflect on the IRC 3402(d) relief amount. You should follow the instructions provided in IRM 4.23.10.16.3 to prepare Form 4666, 4668, and 2504 when IRC 3402(d) applies. 4.75.16.5.4 (07-18-2017) Closing Agreements Closing agreements are used to resolve matters that cannot be resolved through normal compliance procedures. Closing agreements encourage future voluntary compliance. T/ps must meet certain requirements to qualify for a closing agreement. See procedures for closing agreements in IRM 4.75.25. T/ps may request closing agreements, either during the examination, or by voluntarily contacting the Area Office outside the context of an examination (normally referred to as "walk-in" closing agreements). Walk-in requests must be forwarded to the EO Examinations Closing Agreement Coordinator (Attn: EOCAC) in Mandatory Review. Examined closing agreements are closed with DC 12 (104) unless a higher priority disposal code applies. 4.75.16.5.5 (07-18-2017) Form 990-N Filers Follow normal examination closing procedures. To recognize a Form 990-N filing on BMFOLT, refer to the 4th and 5th digits of the DLN containing "8" and "9" respectively, or by checking online at the select check site, http://www.irs.gov/app/ePostcard. Note: Form 990-N is not a "return" even if it creates a TC 150. It doesn’t start the period of limitations for assessment. See Treas. Regs. 1.6033-6(c)(3) and (4). If you determine that an organization was in fact required to file an annual information return, follow delinquent return procedures in IRM 4.75.22. A dummy Form 990 must be in the case file. See IRM Exhibit 4.75.16-6. Refer to IRM 4.75.21.3(8) for details on "dummy" Form 990. 4.75.16.5.6 (07-18-2017) Inadequate Records Refer to Inadequate Records Notices reporting in IRM 4.75.15.8.10. Close the case using DC 08 (213), Written Advisory - Form 5666 Required, to the EO Closing Unit. 4.75.16.5.7 (07-18-2017) Installment Agreements If the t/p makes a request for an installment agreement. For procedures Refer to IRM 4.75.28.5.5, Installment Agreement Procedures. 4.75.16.5.8 (07-18-2017) Not Required to File Form 990 If you determine a non-filer was in fact not required to file a Form 990, or files Form 990-N: Prepare Form 2363-A to change the Form 990 filing requirement. This prevents an accidental auto-revocation. You can close the examination as an NMF account. Use a dummy return or a filed Form 990-N in IRM IRM Exhibit 4.75.16-6. See IRM 4.75.16.7.4. Organizations not required to file a Form 990 include: Subordinate organizations under a group ruling included in a group return. Churches, their integrated auxiliaries, and conventions or associations of churches. Rev. Proc. 96-10. Certain IRC 527 political organizations. Rev. Rul. 2003-49. Governmental units and affiliates of governmental units. Treas. Reg. 1.6033-2(g)(1) as supplemented by Rev. Proc. 95-48. Any domestic, foreign and U.S. possession organization with annual gross receipts normally not more than $50,000 ($25,000 for tax years beginning prior to 2010). Such organizations must file Form 990-N if it chooses not to file Form 990 or 990-EZ. Rev. Proc. 2011-15. Exception: IRC 509(a)(3) supporting organizations are required to file Form 990 or 990-EZ, unless gross receipts are normally not more than $5,000 supporting an IRC 501(c)(3) religious organization. Such an organization must file Form 990-N. In all other circumstances, establish Form 990 returns on AIMS Master File before closing the case to the EO Closing Unit. If you determine a non-filer exempt from filing Form 990 in the EOBMF was in fact required to file a Form 990, issue a 30-day letter and a report of examination explaining the filing requirement. Solicit the organization’s agreement on Form 6018, at Line 10. This type of status change is not subject to declaratory judgement rights. The organization can protest the proposed change to Appeals if it disagrees. If the t/p fails to respond to your proposal, your 30-day letter becomes final and the organization must file Form 990. 4.75.16.5.9 (07-18-2017) Unable to Locate Before closing a case as unable to locate, follow the procedures outlined below for locating the t/p. If you can’t make contact, research public records about the dissolution of the organization. If you are unable to locate the t/p, or the initial contact letter is returned by the Post Office as undeliverable: Inspect any correspondence in the case file for any change of address noted by the U.S. Postal Service. Review the case file for possible sources of information that may lead to the t/p's whereabouts. Check to see if the organization has a website. Check the current address via IDRS research. Extract the latest address from the most recent return posted to master file. Use Accurint™ to find the current address and telephone number for the organization, officer, director, or trustee. Check telephone and city directories for names and addresses of officers, directors, or trustees and the organization. Check Internet resources for possible leads. Request the most recently filed return to identify the current officers or power of attorney (POA). Follow these additional steps if the preceding steps are unsuccessful: Contact third parties such as current or former employees or return preparers. Caution: Be sure to follow all third-party procedures in Treasury Regulation 301.7602-2. See IRM 25.27.1, Third Party Contacts. If the organization is a subordinate of a group ruling, contact the parent of the group ruling for the names and addresses of officers and trustees, and review the reported financial data. Contact the state agency that processes the records of incorporation. Obtain the names and addresses of the statutory agent or officers listed on the Articles of Incorporation. Contact the state agency that processes charitable registration or charitable solicitation information sheets and applications for liquor or gaming licenses. Obtain the names and addresses of the statutory agent or officers listed on these information sheets, liquor or gaming licensees. Request the determination file containing the original application for exemption Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, or Form 1024 from the EO Determinations Record Unit in Cincinnati. Provide the name, address and EIN for the organization in the request. See IRM 4.75.10 for requesting the Determination File. Contact the Post Office for a current address using Form 4759, Address Information Request - Postal Tracer. Although not required in TE/GE, you can use Form 1900-B, Unlocatable Taxpayer Checksheet, as a worksheet. If you can’t locate an authorized contact after following the applicable procedures above, send initial contact letters by certified mail to the organization’s last known address and the last known address of officers, as reported to the state or to the Service, whichever was most recently reported. Put a due date on the letters, such as 30 days after the date of the letter. Refer to IRM Exhibit 4.75.16-3 for closing procedures depending on the outcome of your attempts to locate. 4.75.16.6 (02-05-2020) Cases Subject to Mandatory Review Cases subject to Mandatory Review are as follows: Unagreed examination closures without protest to Appeals requiring the issuance of • A SNOD or •Letter 3523, Notice of Determination of Worker Classification. Unagreed claim disallowances (full or partial) without protest to Appeals requiring the issuance of •Letter 905, Final Partial Claim Disallowance or •Letter 906, Final Full Claim Disallowance. All revocation or any other loss of tax-exemption ( even if agreed). All foundation reclassifications (even if agreed.) Management requests (senior manager’s approval required). 4.75.16.6.1 (07-18-2017) Protests to Appeals For all cases with a formal protest to Appeals (no longer subject to mandatory review), ensure the protest: Will be received by the review function with no less than 455 days (15 months) remaining until the ASED (270 days for cases previously returned to the examination group by Appeals). Includes the organization's name, address, and employer identification number. Includes a statement that the organization wants to appeal the IRS findings to the Appeals Office. Includes a copy of the 30-day letter. Identifies the tax periods or years involved. Lists the adjustments with which the organization does not agree. Includes a statement of facts supporting the organization's position in any contested factual issue. Includes a statement outlining the law or other authority the organization is relying on. Includes a statement as to whether a hearing is desired. Includes a signed jurat statement. Includes a copy of the rebuttal letter you issued to the t/p. The officer, director, or trustee's jurat statement must read "Under penalties of perjury, I declare that I have examined the statement of facts presented in this appeal and in any accompanying schedules and statements and, to the best of my knowledge and belief, they are true, correct, and complete." A designated representative submitting the protest on behalf of the t/p must submit their own substitute statement. They must state that they prepared the appeal and accompanying documents, and whether they know personally that the statements of fact contained in the appeal and accompanying documents are true and correct. See Pub 892. Close all cases protested to Appeals to the EO Closing Unit. Complete items 16, 17 and 18 of Form 5599. Indicate Forward to Appeals on the bottom of Form 3198-A. Close the case to the EO Closing Unit. The EO Closing Unit will not accept any protested case with less than 455 days (15 months) remaining on the statutory period of limitations for assessment (270 days for cases previously returned to the examination group by Appeals). 4.75.16.6.2 (07-18-2017) Cases NOT Subject to Mandatory Review The following cases are not submitted to the Mandatory Review group: Cases not listed in IRM 4.75.16.6 (1). Any case protested to Appeals. Requests for abatement (cases that are not "claims" ). Organizations automatically revoked by IRC 6033(j). All reopened cases. Closed reopened cases go to Special Review. The AIMS Status codes for Mandatory Review (e.g. AIMS Status 20) are the same for Special Review. Mandatory review will not accept imminent statute returns. Refer to IRM 4.75.16.4.2.4. 4.75.16.7 (07-18-2017) Case File Assembly The term "case file" is a synonymous with the term "examination administrative file," or "administrative file." See also IRM 4.75.16.1.3. Paper Case File: Except as indicated, use a brown or manila folder for a hard copy examination case file. Use red folders for short statute cases. Use pink folders for claims. For program cases, use the folder color designated by the program coordinator. Use a separate case file folder for each type of MFT. You can place multiple years of the same MFT for one t/p in one folder. For declaratory judgment cases, maintain a separate Administrative Record file folder. See IRM 4.75.32.5.1. Electronic Case File on RCCMS: See Exhibit 4.75.16-5, Guidelines for EO Sub-Folders in RCCMS: Refer online to the RCCMS collection of publications including training materials, automation guides and tips. If you make the electronic case file a 100 percent paperless case file, refer to IRM 4.75.16.7.6. If necessary, maintain a correlating paper file to store legal documents with original signatures. For declaratory judgment cases, maintain an Administrative Record file folder either in hard-copy form, electronic form in Folder 3 of RCCMS, or both. See IRM 4.75.32. Index all supplemental workpapers in the case file. Upload the workpapers to the appropriate electronic folders that correspond with the indexing on Form 5773. Place whistleblower and other confidential information in a "To be Opened by Addressee Only" envelope with a TD F 15-05.11, Sensitive But Unclassified (SBU) Cover Sheet (Catalog Number 56033J). Place the envelope in a separate folder with the same cover sheet. 4.75.16.7.1 (02-05-2020) Outside of Case File Folder Attach the following forms and documents to the outside-front of the examination case file folder, top to bottom, as follows: Form 895. Form 3198-A. Copy of Letter 1574(P) and JCT’s Clearance Letter (Joint Committee cases only). EO Church Approvals Coversheet. Suspense Case Coversheet (IRM Exhibit 4.75.36-3). Form 5456. Form 5457. Form 5599. Note: See list of closing documents at IRM 4.75.16.1.6 (7). In RCCMS, place these documents in the "Office Documents Folder." 4.75.16.7.2 (07-18-2017) Inside-Left of Case File Folder Attach the following forms and discs to the inside left of the case file folder, top to bottom, as follows: Form 5666 or 5346 to be processed. Copy of Form 5666 or 5346 already processed, marked "Copy - Do Not Process" on the top margin. Form 2363-A to be processed. Form 5595 to be processed. Flash drive, if the case is protested to Appeals. Note: Enclose the flash drive in an envelope or securely wrapped sleeve. Write the password in the sleeve. Staple the flash drive sleeve to the inside-left of the case file folder. The flash drive must contain the following 9 items: Proposed adverse letter (for example, Letter 3618). Form 886-A. Form 5773. Case Chronology Record. Administrative record index. Computational spreadsheets. T/p’s protest and attachments (not required if submitted on paper). Rebuttal to protest. In RCCMS, place these documents in the "1 - Non-Disclosure" sub-folder in RCCMS. 4.75.16.7.3 (07-18-2017) Inside-Right of Case File Folder Arrange the documents, top to bottom: Checksheets. Final closing letter. Closing agreement. Rebuttal letter. Written protest to 30-day letter. 30-day letter. Signed waiver and acceptance forms. Examination report (RAR or Report of Examination). Working return assembly, oldest tax period on top. Form 5773. Form 5774. Form 5774-A. Case Chronology Record (with group manager’s initial for concurrence on the bottom of the last page). Supplemental workpapers. Correspondence. Miscellaneous documents. Note: See list of workpaper forms at IRM 4.75.16.1.6 (7). Final closing letters issued by the examination group include the following unless otherwise subject to mandatory review: No-change letters. No-change advisory letters. Agreed tax change letters (other than agreed IRC 4958 cases involving churches). Final closing letters issued by the review function include: 90-day FADL. 90-day SNOD. Notice of Employment Tax Determination Under IRC section 7436 - Letter 3523. Statutory Notice of Claim Disallowances, Letters 905 and 906. Exception: Letters for cases where a statute is imminent must be issued by the Area office. A FADL must be signed in accordance with Delegation Order 7-2 (formerly DO-113, Rev. 14) (IRM 1.2.2.8.2). 4.75.16.7.4 (02-05-2020) Working Return Assembly For purposes of case file assembly, a working return is the return under examination. The working return assembly denotes the working return and all its required attachments in the case file. Statute forms are listed in IRM 4.75.16.1.6 (4). The working return itself can take the following forms in addition to the actual originally-filed paper return: Copy of the original return. Online SEIN return. RICS return. SFR. A t/p’s copy. Dummy return (see next paragraph). Graphic print of Form 990-N available on the Employee User Portal (EUP). See sample at Exhibit 4.75.16-7. A print of Form 990-N available on TEOS. See sample at Exhibit 4.75.16-7. Note: See IRM 4.75.16.4.4.3 for entering "Closing with" codes in RCCMS. Note: If a case is assigned with a RICS return and the original is received before the case is closed, place the RICS return in the supplemental workpapers as it may be needed for a TEQMS review . A dummy return is a skeletal first page of Form 990 serving as a physical placeholder in the MFT 67 non-return unit case file. Allowable entries on a dummy return include the organization’s: Name. Address. TIN. Tax period. For a non-filer organization required to file Form 990-N, enter "-N" in bold print after "990" on top of form. For filers of Form 990-N, see the previous paragraph and the samples at IRM Exhibit 4.75.16-6. The annotation on the top margin in red, "DUMMY RETURN" or "DUMMY RETURN-CHURCH" or "DUMMY RETURN-NON-FILER UNDER $50,000." Note: See IRM 4.75.21.3, Non-Return Units. For purposes of a working return assembly, staple to the first page of the paper form of the working return, top to bottom: A current AMDISA print no more than 30-days old. Form 3244-A, Payment Posting Voucher - Examination. A copy of any checks paid with the return. Written explanation for filing late or paying the tax late, or other written request for penalty relief. Staple Form 2848 behind the first page of the paper form of the working return facing forward. Staple to the back of the last page of the paper form of the working return, top to bottom, facing out: Form 872-T. Executed statute consent forms, e.g., Form 872, 872-A, or SS-10. Form 56, Notice Concerning Fiduciary Relationship. Form 8821. Form 5546. Form 843. Amended returns (only processed posted amended returns). Form 1045, Application for Tentative Refund. Form 1139, Corporation Application for Tentative Refund. Note: If a t/p filed the amended return directly with you during the examination, note this on Form 3198-A. 4.75.16.7.5 (07-18-2017) Multiple Folders Use a separate case file folder for each type of MFT. You can place multiple years of the same MFT for one t/p in one folder. For unagreed IRC 7428 cases, place the administrative record in a separate folder. The electronic case file must have an Administrative Record sub-folder for paperless administrative records. Place information reports received, referrals, whistleblower information, and other confidential information in a separate folder. Staple Form TD F 15-05.11, Sensitive But Unclassified (SBU) Cover Sheet (Catalog Number 56033J), to the outside-front of the folder. For large case files use expanding folders if a manila folder is inadequate. Label all folders with the organization's name, EIN, type of return, and year. Number multiple folders in consecutive order. Ensure all case file folders remain together. Attach a Form 3198-A to each case folder. Write on the bottom of the form in large red letters: "Multiple Returns/Case Folders Involved - DO NOT SEPARATE" . Exception: See examples of permissible separation of case file folders at IRM 4.75.16.8.2. Indicate the number of case file folders on Form 3210 for transit purposes. See also IRM 4.75.32.7.4, Declaratory Judgment Cases and the Administrative Record, Shipping and Logistics. 4.75.16.7.6 (02-05-2020) 100 Percent Paperless Closure Certain returns can be closed 100 percent paperless. To qualify, the case must: Be established with RCCMS Requisition Code 3. Close with an eligible disposal code. Be without an original return. Be an AIMS Master File case. Note: Electronically filed returns (Filing Location Code 93) can close 100 percent paperless. However, note that the "return requisition indicator" used by AMDISA will be incorrect and line 9 of page 2 will show "ELECTRONIC RETURN REQUESTED." Even with this incorrect indicator, the electronically filed return can close paperless as long as the case meets the paperless criteria . Note: Form 990-N can close 100 percent paperless as long as the case meets the paperless criteria. Note: Penalty cases controlled only in RCCMS can also close 100 percent paperless. Eligible disposal codes for 100 percent paperless closure are as follows: AIMS Disposal Codes RCCMS Disposal Codes No Change 02 - No Change 53 - No Change to a Related return 107 302 Regulatory/Revenue Protection Change 01 - Regulatory/Revenue Protection (other than claims disallowed in full with source Code 30, 31, and 32) 19 - Amendment Secured 210 201 Tax or Status Change 03 - Agreed Tax or Penalty Change 04 - Change to Related Return 05 - Delinquent Related Return Secured 06 - Delinquent Return Secured 08 - Written Advisory - Form 5666 Required 14 - Termination - Agreed 13 - Referrals to Other Operating Divisions 52 - Written Advisory - No Form 5666 Required 102 205 207 208 213 212 501 214 Surveys 31 - Surveyed Before Assignment 32 - Surveyed After Assignment 34 - Surveyed Claim 36 - Surveyed After Initial Contact 910 908 103 909 The following cases are not eligible for 100 percent paperless closure even if all 100 percent paperless criteria are otherwise met: AIMS NMF cases. Cases closed to Mandatory Review. Original returns ordered from the Service Center. Any case controlled on AIMS but not controlled on RCCMS. Claims disallowed in full as DC 01 (210), Source Code 30, 31 and 32. Termination of group rulings. Check the second page of an AMDISA print for the following indicators to determine if AIMS will allow a paperless closure: Indicators Acceptable for Paperless Closure Indicators Not Acceptable for Paperless Closure RET-NOT-REQ RET-REQUESTED RET/5546/LABELS NOT REQ ELECTRONIC RETURN REQUESTED For information on assembling an electronic case file in RCCMS, see IRM Exhibit 4.75.16-4. For general RCCMS instructions, see IRM 4.75.16.2.2. Scan any critical paper document into the paperless case file, including substantiating documents or evidence. Scan informant letters and referrals notes into Folder 1, Non-Disclosure Folder, of the RCCMS electronic case file. Don’t scan irrelevant or unnecessary papers into the case file. Legal documents with original signatures must be maintained in a "correlating paper file," such as: Form 2848. Form 8821. Form 56. Any executed consent forms to extend a statute of limitations. Any correspondence the t/p signed under penalties of perjury. A case closing 100 percent paperless will generally not have an administrative record file since declaratory judgment cases are paper case files subject to Mandatory Review. If the case eventually closes no-change or other non-declaratory judgment closure, place the residual administrative record documents in the "correlating paper file" . Ultimately the correlating paper file contains only administrative record documents. Upload to RCCMS all workpapers, forms, reports, letters, and other documents that would normally be included in a paper case file. Check the "All Electronic" case file indicator in the Compliance Activity screen on RCCMS. This is acceptable even if there is correlating paper file. Include in the RCCMS comments section either "100 percent Paperless Case" or "100% Paperless Case, Forms 2848, 8821 and/or Form 872 sent by UPS." Close the case with the following codes when closing a case to the EO Closing Unit on RCCMS: PBC - 400. SBC - 11115. EGC - 7997. AIMS Status 51. Notify the EO Closing Unit of the paperless closure using RCCMS by: Clicking on "Electronic Indicator" box. Note: This is the only place you can check/uncheck the "All Electronic" box. All other displays on the "All Electronic" checkbox are read-only and can’t be edited. Including in the RCCMS comment section: ▸100 percent Paperless Case (or any synonym). ▸Short statute and SOL date, if applicable. ▸Form 2848, 8821, 56, 872, SS-10 and/or closing agreements sent by UPS Services. 4.75.16.8 (07-18-2017) Closing the Case You are ready to close the case when all substantive issues have been satisfactorily addressed with an adjustment or an explanation, within the scope set by the examination. Input the closing data on RCCMS. Complete Form 5599 unless the case is a 100 percent paperless closure. See instructions at IRM 4.5.2. For disposal codes and principal issue codes, see IRM 4.75.16.4.4.1 and IRM 4.75.16.4.4.2. Ensure the correct statute date or alpha ASED code is reflected on AIMS and RCCMS. See IRM 25.6.23.5. Complete Form 3198-A. Complete Form 895 if not already on the outside cover of the case file and statute controls are required. Send all cases through the group manager for closing. See IRM 4.75.16.8.1. See the chart below for closing status codes: When closing, if the case is... Update RCCMS/AIMS to status code Subject to Mandatory Review 20 (Mandatory Review) Subject to Special Review 20 (Special Review) Not closing to a review function 51 (EO Closing Unit) 4.75.16.8.1 (07-18-2017) Closing to the Group Manager Verify that the following is correct on the EOBMF. If not correct, prepare and submit Form 2363-A immediately to the FAST: T/p's name, in accordance with the articles of organization, as amended. T/p's mailing address. T/p's filing requirements. Exception: For changes in filing requirement resulting from a change in exemption or foundation status, do not send Form 2363-A to the FAST. If subject to Mandatory Review, print out all workpapers and correspondence. Verify that the time on Forms 5599 and CCR match and that they reconcile to Forms 5773 and WebETS. Prepare and print out closing letters. Place the letters in the file. Exception: Do not print final closing letters that must be issued by Mandatory Review. Instead, indicate the letter number or the IRM exhibit number of the letter at the heading of Form 5773 and in the Mandatory Review section of Form 3198-A. 4.75.16.8.2 (07-18-2017) Group Manager: Closing from the Group Review the case on RCCMS and/or paper. Verify the final case grade is accurate. Approve the case for closing. Note your approval of the case on both the RCCMS version of the CCR and the printed version. IRC 6751 requires written documentation of your involvement in any decision to assess most penalties. Document your interaction on the CCR. The following penalties don’t require your approval: IRC 6651, Failure to File or Failure to Pay - except where fraud is involved. IRC 6654, Failure to Pay Estimated Tax for Individuals. IRC 6655, Failure to Pay Estimated Tax for Corporations. Any other penalties automatically calculated through electronic means. Return the case to the examiner as needed. Contact the Manager, Mandatory Review if required. See IRM 4.75.16.4.2. Close to the appropriate function. See IRM 4.75.16.8 (7). Example: Close certain excepted-agreed cases directly to Mandatory Review. For example, examiner proposes a revocation to ABC Charity while conducting an examination of Form 990. The proposed revocation is unagreed without protest, but ABC agreed to additional unrelated business income tax by signing Form 4549 in the event its exemption is sustained. Because the agreed issue can’t be finalized due to the pending revocation issue, the Form 990-T examination is excepted-agreed. Therefore, the Form 990-T case file will ride with the Form 990 file to Mandatory Review. Note that an openForm 990-T examination must be addressed as an alternative issue in a revocation RAR, whether agreed or unagreed. 4.75.16.8.3 (02-05-2020) Authority to Use Status 38, Suspense, All Others (GE Examinations) or Status 39, Suspense in Group AIMS Status 38, Suspense, All Others (GE Examinations Information Systems Codes FY 2020) or 39, Suspense in Group, removes an examined return from cycle time pending an administrative or judicial action beyond the control of the group. AIMS Status 38 or Status 39 ensures the group isn't penalized for certain aged returns. The use of AIMS Status 38 or Status 39 is only authorized for use under the following conditions: You submitted a request for a TAM. The examination is interrupted by a federally declared disaster impacting the organization. See IRM 25.16.1. You obtained approval to use Status 38 or Status 39 from the Area Manager, FSL/ET, in response to a written request from the area manager. Note: Include in the written request a listing of all related returns to be placed in Status 38 or Status 39, the reason the examination is being delayed and an estimated closure date. The group charged with a return in Status 38 or Status 39 is responsible for protecting the statute of limitations for assessment. If Status 38 or Status 39 is approved, attach the Suspense Case Cover Sheet in IRM Exhibit 4.75.36-2 to outside-left of the case file folder. Circle the row corresponding to Status 38 or Status 39 on the cover sheet and follow the closing instructions on the cover sheet. 4.75.16.9 (07-18-2017) Shipping From the Group Group Manager: Generate Forms 3210 in triplicate for any paper case files, addressed to the appropriate unit. Sign the forms and include your phone number. Include two copies of the Form 3210 with the closed case and maintain one copy in the group. When the acknowledgment copy of the Form 3210 is received in the group, staple it to the originator's copy. The addresses for the three functions are: EO Closing Unit EO Mandatory Review EO Special Review Internal Revenue Service EO Closing Unit MC: 4980 DAL 1100 Commerce St. Dallas, Texas 75242 Internal Revenue Service EO Mandatory Review MC: 4920 DAL 1100 Commerce St. Dallas, Texas 75242 Internal Revenue Service EO Special Review MC: 4970 DAL 1100 Commerce St. Dallas, Texas 75242 Double package the returns and related workpapers. See the chart below for shipping guidance: The ASED expires... The case is... Ship the case via... Over 270 days from now Agreed or a no change UPS ground Over 270 days from now Unagreed with or without a protest to Appeals UPS ground Between 180 and 270 days from now Not subject to Mandatory Review UPS ground Between 180 and 270 days from now Subject to Mandatory Review or Special Review UPS next day air Between 30 and 180 days from now Not subject to Mandatory Review or Special Review UPS second day air Between 30 and 180 days Subject to Mandatory Review or Special review UPS next day air Less than 30 days Any type of closure UPS next day air Completing Form 3210. Make sure you use the current version of Form 3244-A. Don’t submit paper and paperless cases together on the same Form 3210. Abbreviate SSN’s, showing the last four digits of the SSN. List t/ps with complete name identical to RCCMS controls. Include complete IRS addresses in the "To" and "From" blocks. Include the group number, group manager, mail stop and any special mailing instructions. The "Release Date" block will be the actual date a case or multiple cases is sent. Include in the "Remarks" block any specialized details pertaining to a case or cases. Include in the "Quantity" box the total number of tax periods per MFT. Include in the "Document Identification" rows at the widest description column the EIN or Last 4 of the SSN, MFT, tax period, and name control. Include special instructions if any with respect to the item listed, such as "Short Statute Returns." The "Releasing Official" must include the manager or secretary’s signature and title. Respond to the closing unit within two business days of receiving an email that alerts you to any errors on Form 3210. You can email or fax a corrected Form 3210 to the EO Closing Unit. If an organization voluntarily files Form 990, 990-EZ or 990-N after the examination group has shipped a non-filer NMF case for closure, the EO Closing Unit (or review function) generally will not send the case back to the group for an AIMS Master File establishment unless the closing function (or review function) either: Rejects the case for other reasons. Determines the examiner erred in concluding the organization was not required to file a Form 990 (or 990-EZ). For more information on shipping procedures, refer to Document 13056, Employee Toolkit - Shipping Procedures for Personally Identifiable Information (PII) and IRM 10.2.13, Shipping Personally Identifiable Information. Follow-up with Form 3210 in three business days for overnight shipments and ten business days for ground shipments. Follow-up with Form 3210 in 3 business days for overnight shipments and ten business days for ground shipments. Exhibit 4.75.16-1 Form 2363-A Required Input Chart This table provides a listing of those fields that are required to be completed based on specific types of changes. Please click here for the text description of the image. Exhibit 4.75.16-2 Form 1900 Sample Language for Automatic Revocation Under IRC 6033(j) The example below contains sample language for cases involving automatic revocation under IRC 6033(j). Explanation: ORGANIZATION AUTO-REVOKED BY OGDEN CAMPUS WHILE OPEN FOR EXAMINATION By reason of IRC 6033(j), the exempt status of the organization has been auto-revoked by the Ogden Service Center for failing to file annual EO information returns or Form 990-N for three consecutive tax years ending [20YYMM, 20YYMM and 20YYMM]. EO BMF Status 97 posted on [date] while the EO returns were open for examination. The Ogden Service Center issued Notice CP120A to the taxpayer on [ date** ]. The effective date of auto-revocation is [due date of return for 3rd tax year]. Because the organization is no longer tax-exempt this examination has been terminated and the returns for the years indicated must be surveyed. ** The date the Ogden Service Center issued Notice CP120A to the t/p is regarded as the organization's posting date on the auto-revocation list in TEOS. Exhibit 4.75.16-3 Unable-to-Locate Scenario Guidance Table Example 1 Example 2 Example 3 Facts The organization is a: Corporation Corporation Corporation Certified letters were: Undeliverable Undeliverable Undeliverable There is reliable 3rd party information that the organization has engaged in non-exempt activities No No No Dissolution Articles of Dissolution filed with State Administratively dissolved by the State but CAN be reactivated currently. See footnote 2 Administratively dissolved by the State but CAN NOT be reactivated. See footnote 3. Development and Closing Update the EO/BMF status 20 - Termination See footnote 4 See footnote 5 20 - Termination See footnote 4 AIMS closing Return filed - BMF account established 14 - Termination 32 - Survey After Assignment 14 - Termination No return filed 14 - Termination (Establish on BMF) 99 - Miscellaneous Form 10904 See footnote 6 14 - Termination (Establish on BMF) Closing letter or required Termination letter See footnote 7 None Termination letter See footnote 7 Is 90-day letter required in declaratory judgment cases? No No No Is the case subject to Mandatory Review? Yes No Yes Example 4 Example 5 Example 6 Facts The organization is a: Corporation, Unincorporated Association, or Trust Corporation, Unincorporated Association, or Trust Corporation, Unincorporated Association, or Trust Certified letters were: Delivered but no response was received Undeliverable or delivered and no response received Undeliverable There is reliable 3rd party information that the organization has engaged in non-exempt activities No Yes See footnote 1 No Dissolution No information available No information available No information available Development and Closing Update the EO/BMF status 22 - Revocation See footnote 4 22 - Revocation See footnote 4 See footnote 5 AIMS closing Return filed - BMF account established 10 - Unagreed without protest 10 - Unagreed Without Protest 32 - Survey After Assignment No return filed 10 - Unagreed without Protest (Establish on BMF) 10 - Unagreed Without Protest (Establish on BMF) 99 - Miscellaneous Form 10904 See footnote 6 Closing letter or required Letter 3618 and RAR See footnote 8 Letter 3618 and RAR See footnotes 9, 10 None Is 90-day letter required in declaratory judgment cases? Yes See footnote 11 Yes See footnote 11 No Is the case subject to Mandatory Review? Yes Yes No # Applies to Examples: Footnote: 1 5 There is reliable 3rd party information that supports a proposed revocation on the basis that the organization has engaged in non-exempt activities and Area Counsel agrees that this information supports a proposed revocation. Such cases should be rare. 2 2 The organization has been administratively terminated by the State for failure to file annual reports or pay required filing fees. The state allows a corporation to be reactivated or the state allows reactivation during a proscribed period of time and the period during which reactivation is permitted has not expired. If the State allows reactivation during a prescribed period of time only, the examiner will prepare a Form 5666 recommending the year in which the corporation can no longer be reactivated for termination. 3 3 The organization has been administratively terminated by the State for failure to file annual reports or pay required filing fees. The state does not allow a corporation to be reactivated or the State allows reactivation during a proscribed period of time but the period in during which reactivation is permitted has expired. 4 1, 3, 4, and 5 examiners prepare Form 2363-A to update the EO/BMF to the correct status code. Mandatory Review will sign as reviewer and process Form 2363-A with the FAST once it concurs by issuing the final letter. A marked copy of Form 2363-A will be retained in the case file indicating the date Mandatory Review submitted the form for processing. 5 2 and 6 The examiner should update the organization’s status to "unable to locate" by preparing Form 4844, Request for Terminal Action. The transaction code should be 593 and the closing code(CC) should be 82. (TC 593-CC 82). See Exhibit 4.75.16-6. Note: Form 3198-A should state, in the other instructions section, "Please process Form 4844." 6 2 and 6 Close with Closing Code 99, Information Report and Miscellaneous. Prepare Form 10904. The reason for the request should be "Unable to locate t/p and examination is not to take place" . 7 1 and 3 The termination letters will be mailed by Mandatory Review. 8 4 Revocation is proposed because of the organization's failure to provide information verifying its continued qualification for exempt status. See IRC 6033, Treas. Reg. 1.6001-1 and Rev. Rul. 59-95. The examiner will prepare the Revenue Agent’s Report (RAR), 30-day letter and mail it to the t/p. Mandatory Review will prepare and mail the final letter. 9 5 Examiners, through the group manager, must secure Area Counsel’s written agreement that the 3rd party facts support revocation. If Area Counsel agrees with the revocation, the examiner will prepare the Revenue Agent’s Report (RAR), 30-day letter and mail it to the t/p. Mandatory Review will prepare and mail the final revocation letters. 10 5 If the letters were undeliverable in example 5, the basis for revocation is the 3rd party information. If the letters were delivered but there was no response, the basis for revocation will include both issues, failure to provide records and the 3rd party information. 11 4 and 5 Area Counsel must review and approve all 90-day letters involving IRC 501(c)(3) organizations. Exhibit 4.75.16-4 FSL/ET RCCMS Naming Convention TOP OF FOLDER INDEX # DOCUMENT NAME 1.0 Form 895, Form 94X YYYYMM (required for all cases with fewer than 270 days on the "normal statute" 1.1 Form 3198-A INSIDE LEFT OF FOLDER INDEX # DOCUMENT NAME 2.0 FCDS (never required to be included in paper file) 2.1 AMDIS (summary of controlled quarters showing all in status 12) 2.2 INOLES 2.3 Form 2363 (process to AIMS Coordinator prior to closing case) INSIDE RIGHT OF FOLDER LETTERS INDEX # DOCUMENT NAME 30.1 Form 4665 30.2 Rebuttal to t/p protest 30.3 Taxpayer protest 30.4 Form 5599 30.5 Letters 950-C; 950-D; 5376; 3381; 3382; 570; 905; 906; 3523 and 937 (POA Transmittal letter) REPORTS INDEX # DOCUMENT NAME 31.1 Closing Agreement (CSP or Ad Hoc) 31.2 Forms 2504; 2504-S; 2504-T; 4666; 4668; 4668-B 31.3 Form 886-A. XXXX. Issue Name (where XXXX is the GSAIN number) 31.4 Payee Lists (separate lists for IRC 7436 issues & relied from withholding via Form 4669) 31.5 Form 4670. Request for relief from withholding 31.6 Form 4669. Payee statements (for withholding relief granted) TAX RETURNS INDEX # DOCUMENT NAME 32.1 Form 3244-A. Payment posting voucher (in paper file - attach to front of return) 32.2 F94X.YYYYMM ("Tax Return" = IRS Return/Copy, TP Copy, TRDBV / BRTVU prints - separate document for each tax period) 32.2 Form 94X. YYYYMM (processed amended return, if applicable) (in paper file, attach to back of "Tax return" ) 32.3 Form 2848 or Form 8821. Power of Attorney (in paper file - attach to back of return, facing out, behind consents, if any) 32.4 Form SS-10; 872-B; 872. Statute extension (in paper file - attach to back of return, facing out - it should be the first thing seen there) PLANNING AND INFORMATION GATHERING INDEX # DOCUMENT NAME 33.100 Form 4318. Workpaper index (ties to issue lead sheets & ET report) 33.200 Form 9984. Case Chronology 33.201 T/P/POA correspondence (including initial contact & report transmittal letters) 33.202 Internal email & other non-t/p communications 33.203 Large case status report 33.204 Form 5701. (indexed by issue, e.g. - 33.204. 1605X, etc. 33.300 IDR Log 33.301 IDR. XXXX (where XXXX is GSAIN 33.302 IDR. XXXX 33.303 IDR. XXXX 33.400 STATUTE CONTROLS 33.401 Form SS-10; 872-B 33.402 Letter 907; 928; 929 33.500 PRE-CONTACT PLANNING/EXAMINATION PLAN 33.501 Pre-contact analysis lead sheet (package examination lead sheet, etc.) 33.502 Internal controls lead sheet 33.503 Large case team notes 33.504 Support request. XXXX (where XXX is the support function - CAS, EO, EP, Excise, TEB, etc. 33.505 Document name (notes on external information gathered, interviews with prior examiners, notes from prior case file, etc.) 33.506 Form 5666. Referral tracking sheet; Other referral materials (pertaining only to the case under audit) 33.600 INITIAL T/P CONTACT AND INTERVIEW 33.601 Pre-contact notes 33.602 Initial interview 33.603 Tour of facilities 33.700 RECORDS REVIEW, ANALYSIS & RECONCILIATION 33.701 Form 941; W-2, Analysis & Reconciliation - (IRAs; Books/Payroll records to Form 941; W-2; IRP & CAWR data) 33.702 Form 1099-MISC (G; R; etc.) Analysis & Reconciliation - (IRAs; Books/AP records information returns; IRP data) 33.703 Organization chart 33.704 Chart of accounts 33.705 Financial statements (including independent examination reports, federal/state examination reports & footnotes - notes from review) 33.706 Minutes (notes from review) 33.707 Publications (notes from review) 33.708 Contracts, grants & leases (notes from review) 33.709 Plans, policies & procedures (notes from review) 33.710 Document name (notes on other information) 34.1106 Section 218 agreement/modification (documents on the share drive are all pre-named; no need to change) ISSUE DEVELOPMENT INDEX # ISSUE # DOCUMENT NAME 31111.000 Use this code as the only adjustment in of the first 3 quarters of all Form 941 examinations. 34.1300 FICA 34.1301 31301.218 -218 Coverage - Social Security - 218 Coverage - Mandatory Medicare 34.1302 31302.218 -218 Mandatory Exclusions - Students - 218 Mandatory Exclusions - Certain VISAs Emergency Workers, etc. 34.1303 31303.218 218 Optional exclusions 34.1304 31304.000 1991 Mandatory Social Security 34.1305 31305.000 Medicare continuing employment exception - Medicare wages only adjusted 34.1306 31306.000 31306.218 - §3121(a)(16) Remuneration < $100 - no 218 coverage - Medicare Only (Medicare Qualified Government Employee) - post '86 hires, members of PRS or FICA replacement plan - no - Social Security coverage - Rehired Annuitant - no 218 coverage - Other - no 218 coverage - §3121(a)(16) Remuneration < $100 - 218 coverage - Rehired Annuitant - 218 coverage - 218 Other 34.1400 WORKER CLASSIFICATION 34.1401 31401.000 Section 530 Relief 34.1402 31402.000 31402.218 WC 3509 CSP 34.1403 31403.000 31403.218 - WC.3509.No CSP (general) - no 218 - WC.3509.No CSP (general) - 218 - WC.3509.No CSP (elected & appointed public officials) - no 218 - WC.3509.No CSP (elected & appointed public officials) - 218 34.1404 31404.000 31404.218 - WC.Full Rates (general) - no 218 - WC.Full Rates (general) - 218 - WC.Full Rates (elected & appointed public officials) - no 218 - WC.Full Rates (elected & appointed public officials) - 218 34.1405 31405.000 31405.218 - Third Party Payments - no 218 - Third Party Payments - 218 34.1406 31406.000 31406.218 - Other - no 218 - Other - 218 34.1500 COMPENSATION 34.1501 31501.000 31501.218 Wages 34.1502 31502.000 31502.218 Commissions 34.1503 31503.000 31503.218 EE death 34.1504 31504.000 31504.218 Back pay, Settlements, Damages 34.1505 31505.000 31505.218 Awards & Prizes 34.1506 31506.000 31506.218 Below market loans 34.1507 31507.000 31507.218 Loan forgiveness 34.1508 31508.000 31508.218 Severance Pay 34.1509 31509.000 31509.218 Grossed up wages 34.1510 31510.000 31510.218 Non-Resident Alien - NRA - F1042/1042C adjustment - NRA - EE FICA - NRA - EE ITW - NRA - ITW for IC - NRA - Foreign Students - NRA - Student FICA Exception - NRA - Tuition/Waivers Reclassification to wages/scholarships - NRA - Other 34.1511 31511.000 31511.218 Scholarships and Fellowships 34.1512 31512.000 31512.218 Sick pay 34.1513 31513.000 31513.218 Vacation pay 34.1514 31514.000 31514.218 - Stipends - Bonuses - Tips - Other 34.1600 FRINGE BENEFITS 34.1601 31601.000 31601.218 EE Discounts 34.1602 31602.000 31602.218 No-additional cost fringe benefit 34.1603 31603.000 31603.218 Working condition fringe benefit 34.1604 31604.000 31604.218 Qualified transportation 34.1605 31605.000 31605.218 Moving expense reimbursement 34.1606 31606.000 31606.218 On-premises athletic facilities 34.1607 31607.000 31607.218 Retirement planning services 34.1608 31608.000 31608.218 Meals and Lodging 34.1609 31609.000 31609.218 Group Term Life Insurance 34.1610 31610.000 31610.218 Cafeteria Plans 34.1611 31611.000 31611.218 Dependent Care 34.1612 31612.000 31612.218 Educational Assistance 34.1613 31613.000 31613.218 Adoption Assistance 34.1614 31614.000 31614.218 Medical & Accident Benefits 34.1615 31615.000 31615.218 Health, Accident & Disability Insurance Premiums 34.1616 31616.000 31616.218 - Housing Allowance - Housing Provided - Athletic Tickets - Personal Use of Facilities - Non-Accountable Expense Plan - Gifts - cash or cash equivalent - Other 34.1617 31617.000 31617.218 Entertainment (tickets, entertainment meals, etc.) (accountable plan fails) 34.1618 31618.000 31618.218 Uniforms and Clothing Provided (accountable plan fails) 34.1619 31619.000 31619.218 Uniforms and Clothing Allowance (accountable plan fails) 34.1620 31620.000 31620.218 Internet Allowance (accountable plan fails) 34.1621 31621.000 31621.218 Travel and Vehicle Allowance (accountable plan fails) 34.1622 31622.000 31622.218 Equipment Provided (accountable plan fails) 34.1623 31623.000 31623.218 Equipment Allowance (accountable plan fails) 34.1624 31624.000 31624.218 Cell Phone Allowance (accountable plan fails) 34.1625 31625.000 31625.218 Other (title document, lead sheet & explain) (accountable plan fails) 34.1700 ER PROVIDED TRANSPORTATION 34.1701 31701.000 31701.218 - ER Provided Vehicle - personal use of ER vehicle - no 218 - ER Provided Vehicle (accountable plan fails) - no 218 - ER Provided Vehicle - personal use of ER vehicle - 218 - ER Provided Vehicle (accountable plan fails) - 218 34.1702 31702.000 31702.218 ER Provided Aircraft (accountable plan fails) 34.1703 31703.000 31703.218 ER Provided Transportation - Other (accountable plan fails) 34.1704 31704.000 31704.218 EE Provided Vehicle (accountable plan fails) 34.1705 31705.000 EE Provided Transportation - Other (accountable plan fails) 34.2100 PENSIONS & DEFERRED COMPENSATION 34.2101 32101.000 32101.218 IRC 457 Plans 34.2102 32102.000 32102.218 IRC 403(b) Plans 34.2103 32103.000 32103.218 Other Nonqualified Deferred Compensation Plans 34.2200 BACK-UP WITHHOLDING 34.2201 32201.000 BUW.FW-9 Review-no CP2100 34.2202 32202.000 BUW.CP 2100 34.2203 32203.000 BUW.Prizes & Awards BUW.Gaming Winnings BUW.Other (name document, lead sheet and explain in workpapers) 34.2204.1 32204.000 BUW.F1099-MISC Payees (list of names, TINs, payment amounts, amount eligible for 3402(d) relief, relief granted) 34.2204.2 BUW.F4669 Secured from TP 34.2300 SPECIAL EMPHASIS PROGRAMS 34.2301 32301.000 32301.218 Special Emphasis 1 (name the document with the special emphasis name) 34.2302 32302.000 32302.218 Special Emphasis 2 (name the document with the special emphasis name) RETURN PENALTIES INDEX # ISSUE # DOCUMENT NAME 34.2400 RETURN PENALTIES 34.2401 32401.000 32401.218 6651.Delinquency 34.2402 32402.000 32402.218 6656.Failure to Deposit 34.2403 32403.000 32403.218 6662.Negligence 34.2404 32404.000 32404.218 6663.Fraud 34.2405 32405.000 32405.218 Other (explain and title the lead sheet) CONCLUSIONS, CRITIQUES & PRIOR COMPLIANCE ACTIVITY (EXAMINATION OR COMPLIANCE CHECK) INDEX # ISSUE # DOCUMENT NAME 34.2500 OTHER EXAMINER’S CONCLUSIONS 34.2501 EP 34.2502 EO 34.2503 TEB 34.2504 Other 34.2600 POST EXAMINATION CRITIQUE 34.2601 T/P Feedback 34.2602 Recommendations 40.000 n/a PRIOR COMPLIANCE ACTIVITY (zip file prior examination/compliance check-rename documents as necessary) CIVIL PENALTIES INDEX # ISSUE # DOCUMENT NAME CIVPEN.1 Form 3198-A CIVPEN.31 Form 3645 CIVPEN.31 Form 8278 CIVPEN.31 Form 886-A CIVPEN.32 Form 4318 CIVPEN.33.1 Form 9984, Activity Record CIVPEN.33.2 CivPen Lead Sheet CIVPEN.33.3 Payee List (names, TINs, payment amounts) Exhibit 4.75.16-5 The Electronic Case File - EO Sub-Folders in RCCMS Construct the case file electronically in RCCMS as follows: The first level of electronic folders in RCCMS is based on Form 5773. There are also four additional folders to organize the electronic case file. Available folders are: 1 – Non-Disclosure. 2 – RAR and Related Documents. 3 – Administrative Record. 4 – Correspondence. "A – Preaudit" through "L – Audit Considerations," are based on Form 5773. The tables below provide general guidelines on the placement of forms, letters, and other documents within the Office Documents Folder (using the pre-defined EO sub-folders) and the Research Folder (using the "Returns" and "Queries" Sub-Folders). Folder Description Office Documents Folder (no sub-folder) Form 895, Form 3198-A, Form 5599. These forms are traditionally placed on the outside of the paper folder. See IRM 4.75.16.7.1. Forms attached to Outside of Folder. In RCCMS, when the Office Documents Folder is selected, all documents will be displayed. If the documents are sorted by Folder (click on Folder column) the documents not in a sub-folder will be displayed at the top of the list view. 1- Non-Disclosure This folder should be used for Confidential Information (See IRM 4.75.16.7.3 (2)). Related Return Sheet, Form 5666, Form 2363-A, etc. Traditionally known as the 'left hand side of the folder'. 2- RAR and Related Documents This folder should be used for the 30-day letter, response to 30-day letters, rebuttal letter and closing letter, RAR, Checksheet,, 5773, 5774, 5464, etc. The documents in this folder would be those that go on top of the workpapers. 3- Administrative Record See IRM 4.75.32 4- Correspondence All other correspondence sent to or received from the t/p. A – Preaudit B – Organizational Documentation C - Operational …..Through….. L – Audit considerations Folders A through L are based on main categories from Form 5773. Only create the folders that apply to the specific case. You should only add the applicable folders for the case. Research Folder Folder Description Returns Subfolder The RICS return will be placed in this folder. BRTVU or RTVUE prints. Scanned copies of returns received from the t/p. Queries Subfolder Used to hold results of manual queries (i.e. IDRS). I.e. AMDISA, BMFOLT, etc Note: No documents can be posted directly in the Research folder. Documents should be posted to one of the sub-folders described above. If you want to close a case file 100 percent paperless, see IRM 4.75.16.7.6. Exhibit 4.75.16-6 Form 4844 Sample This is a sample completed Form 4844, showing the fields that must be completed. Please click here for the text description of the image. Exhibit 4.75.16-7 Form 990-N - Acceptable Representations for a "Working Return" This exhibit shows two examples of acceptable representations for filed Form 990-N for purposes of assembling a working return in the examination case file. These replacements are a type of dummy return showing proof of voluntarily filing Form 990-N. A graphic print of the Form 990-N available on the Employee User Portal (EUP) Please click here for the text description of the image. Printout of 990-N e-Postcard Filing (available via TEOS) Please click here for the text description of the image. More Internal Revenue Manual