- 4.90.12 Case Closing Procedures
- 18.104.22.168 Overview
- 22.214.171.124 Standard Time-frames for Closing Cases
- 126.96.36.199 Form 5599, TE/GE Examined Closing Record
- 188.8.131.52 Form 3198-A, TE/GE Special Handling Notice
- 184.108.40.206 Case File Assembly
- 220.127.116.11.1 Closing Examination Cases 100% Electronically
- 18.104.22.168.2 Paper Case Files
- 22.214.171.124 Field Manager Responsibilities
- 126.96.36.199 AIMS/RCCMS Group Processing Responsibilities
- Exhibit 4.90.12-1 Instructions for Completion of Form 5599
- Exhibit 4.90.12-2 Case Grading Criteria
- Exhibit 4.90.12-3 FSLG Naming Convention for RCCMS
- Exhibit 4.90.12-4 Paper Case File Requirements for Unagreed Protests To Appeals
Part 4. Examining Process
Chapter 90. Federal, State and Local Governments (FSLG)
Section 12. Case Closing Procedures
December 27, 2016
(1) This transmits a table of contents and text for 4.90.12, Federal, State and Local Governments, Case Closing Procedures.
(1) The following IRM sections were renumbered, deleted, moved to other IRM sections and modified with revised or additional content.
|Previous IRM Subsection||Explanation|
|188.8.131.52(2)||Became IRM 184.108.40.206 (3) and content modified/updated.|
|220.127.116.11||Deleted, replaced with IRM 18.104.22.168.1 and content modified/updated.|
|22.214.171.124.1||Became IRM 126.96.36.199 and content modified/updated.|
|188.8.131.52.2||Deleted and replaced with new topic.|
|184.108.40.206.3||Moved to IRM 4.90.9, Procedures, Workpapers and Report Writing.|
|220.127.116.11.1||Moved to IRM 4.90.9 and replaced with new topic.|
|18.104.22.168.2||Became IRM 22.214.171.124 and content modified/updated.|
|126.96.36.199.3||Moved to IRM 4.90.9.|
|188.8.131.52.4||Became IRM 184.108.40.206.1 and content modified/updated.|
|220.127.116.11||Content modified and updated.|
|18.104.22.168.1||Became IRM 22.214.171.124 (2) and content modified/updated.|
|126.96.36.199.2||Became IRM 188.8.131.52.1 and content modified/updated.|
|184.108.40.206.3||Became IRM 220.127.116.11.2 and content modified/updated.|
|18.104.22.168||Content modified and updated.|
|22.214.171.124||Content modified and updated.|
|Exhibit 4.90.12-1||Content modified and updated.|
|Exhibit 4.90.12-2||Content modified.|
|Exhibit 4.90.12-3||Content updated and modified.|
|Exhibit 4.90.12-4||Content updated and modified.|
(2) Added IRM 126.96.36.199.2.2 discussing closing procedures for Whistleblower Claim for Award.
(3) Updated to meet the requirements of P.L. 111-274 (H.R. 946), the Plain Writing Act of 2010. The Act provides that writing must be clear, concise, well-organized, and follow other best practices appropriate to the subject or field and intended audience.
Federal, State and Local Governments
Paul A. Marmolejo
Director, Federal, State and Local Governments
Tax Exempt and Government Entities
This section provides guidance for FSLG employees closing completed audits. It contains procedures for:
Closing cases within standard time-frames.
Naming electronic documents according to the FSLG naming convention.
Preparing required closing documents.
Assembling case files.
FSLG Specialists (Specialists) must close cases to Field Managers (Managers) within these time frames:
Type of Audit Closure Calendar Days From when the: No Change 10 No-Change is determined Agreed 10 Agreement is secured Unagreed 20 Earlier of the protest date or the 30 day letter default date
Managers have 10 calendar days to review and close cases to the Closing Unit or CPM.
Case activity records should reflect the dates cases are closed by the Specialists and the Managers.
Any delays or extended periods of inactivity must be documented in the case activity records.
Form 5599, TE/GE Examined Closing Record, is required for:
Unagreed cases going to Appeals.
Processing partial agreements.
Form 5599 is required for all unagreed cases protested to Appeals.
Complete Form 5599 as shown in Exhibit 4.90.12-1.
Form 5599 is not required for a partial agreement when the partial agreement closes at the same time as the unagreed issues.
Form 5599 is required if the partial agreement is assessed before closing the unagreed part of the case.
Prepare a partial agreement file (paper or electronic) and send to the Closing Unit. Include the following:
Form 895, Notice of Statute Expiration (if necessary)
Form 3198-A, TE/GE Special Handling Notice (attached to the outside of the case file)
Signed Employment Tax Report
Supporting documentation explaining the partial agreement
The group retains control of the RCCMS case.
Complete the following fields on Form 5599:
Partial box (top left corner)
P7 thru P34 - TIN, MFT, Tax Period, Name Control and Name
Item 12 - Tax Liability Adjustment
Item 13 - Disposal Code
Item 15 - Credit and Tax Computation Adjustment
Item 42 - ARDI code
Form 3198-A, TE/GE Special Handling Notice, is required for every closed case.
Used to communicate special case features and closing instructions.
Review and complete each section as necessary.
Under "Other instructions," may include, but don’t limit to, the following:
"Forms 4669 adjustments allowed by examination"
"Wage statements secured by examiner" (send originals to Social Security Administration)
"Delinquent Forms 1099 secured by examiner" (send originals 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)
The term "deficiency," for this section, refers to:
The sum of all deficiencies and penalties for any one taxpayer.
For all periods in the case file.
Not considering any offsetting overassessment.
Expedite processing of unpaid, agreed deficiency cases of $10,000 or more. Close the case from the group within three days of receiving the signed Form 2504 or other waiver (such as, Form 4549 for Form 1042 cases). See IRM 188.8.131.52, Expedite Processing of Large Deficiency or Overassessment Cases.
Expedite manual processing of overassesments of $10,000 or more. See IRM 184.108.40.206.
It’s important to properly and consistently organize electronic and paper case files so that others can readily locate items and take required actions after the case is closed. For example:
Follow the FSLG RCCMS Naming Convention in indexing and naming documents in electronic and paper cases. See Exhibit 4.90.12-3. Include:
The index number in the lower right-hand corner.
The index number and name on all electronic documents. See Exhibit 4.90.12-3.
The quarter on 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.).
Remove unnecessary documents from the case file (for example, extraneous IDRS material, raw IRP data, etc.).
Each form, report or document listed in Exhibit 4.90.12-3 may not be required in every case and, while the list isn’t all-inclusive, it addresses most situations.
Most cases can close 100% electronically.
Check the "All Electronic" box in RCCMS.
Include the same wording as the "Other Instructions" section of Form 3198-A in the RCCMS closing record "Remarks and comments" field.
Paper case files are required for:
Unagreed cases protested to Appeals (disposal code 601). See Exhibit 4.90.12-4.
Cases petitioned to Tax Court.
Whistleblower Claim information.
Use one folder for all activities for each entity.
Large case files may require more than one folder. Number multiple folders (1 of 4, 2 of 4, etc.). Label all folders with the:
Type of return
Quarter/period and/or year
Properly assemble the paper case file (for example, unagreed cases going to Appeals). See Exhibit 4.90.12-4.
Use red folders for all paper case files with fewer than 270 days remaining on the Assessment Statute Expiration Date (ASED).
CPM sends the paper Whistleblower package to the group when the case is assigned to the group on RCCMS.
Address the Whistleblower claim, see IRM 220.127.116.11, Referral Involving Form 211, Application for Award for Original Information.
Keep the Whistleblower package separate from the administrative case file.
Never mention the Whistleblower (or informant) in the case file or to the taxpayer or representative.
Mail the completed Whistleblower package to the CPM Whistleblower Coordinator with Form 3210, Document Transmittal, in the confidential envelope that CPM provided when the case closes. The Form 3210 should also be emailed to the coordinator.
Close the RCCMS case as mandatory review to CPM in status code 20.
Secure email the CPM Whistleblower Coordinator, CPM MA and CPM Group Manager to inform them of the case closure.
The Whistleblower package must contain:
The closed case file must NOT contain any information or reference to the Whistleblower (or informant).
Review and approve all closed cases for procedural compliance and technical accuracy.
Ensure the final case grade is accurate in the RCCMS compliance activity codes tab and on Form 5599 (Item 32), if applicable. See Exhibit 4.90.12-2.
Initial and date case activity record to indicate the review has been completed and include comments on any actions taken.
If a case requires action by another group, transfer the case to the group on RCCMS and send the paper file, if applicable, using Form 3210.
Provide written approval, per IRC 6751, of penalties asserted by Specialists. Written approval can be part of the case activity record. The following penalties don’t require managerial approval:
IRC Section 6651 (Failure to File and/or Failure to Pay).
Any other penalties automatically calculated electronically.
When a case is closed, the group must query IDRS (AMDIS and INOLES command codes) to ensure:
Each return is fully established on AIMS.
Each return being closed is in status code 12 or higher.
There are no freeze codes on any of the modules.
Name and name control in RCCMS match IDRS.
Complete a cursory review of the case file to ensure all necessary closing actions have been completed.
Specialist, Manager and CPM completes Form 5599 line items per the table below. Explanations relate to Form 5599 but several of them apply to RCCMS tabs. Refer to IRM 18.104.22.168, Processing TE/GE Examined Closing Record, Form 5599, for complete instructions to prepare Form 5599.
|Item Number||Item Name||Completed by:||Explanation|
|P24-29||Tax Period||Specialist|| |
|P31-34||Name Control/Check Digit||Specialist|| |
|02||Penalty Reason Code||Specialist|| |
|13||Disposal Code||Specialist|| |
|14||Statute Extended to||Specialist|| |
|16||Appeals Office Code||CPM|| |
|17||EO/GE Appeals Issue Code||CPM|| |
|18||Unagreed Amount||CPM|| |
|20 - 24||Revenue Base Protection Section (RBP)||Specialist|| |
|28||Examiner’s Time||Specialist|| |
|30||Technique Code||Specialist|| |
|31||Agent’s Grade||Specialist|| |
|32||Case Grade||Field Manager|| |
|33||Examiner’s Name||Specialist|| |
|37||Delinquent Return Code||Specialist|| |
|38||Fraud Condition||Specialist|| |
|40||Special Project Code||Specialist|| |
|42||ARDI Code||Specialist|| |
|50||Employee Group Code||Specialist|| |
|400||CIC Indicator||Specialist|| |
|402||International Examiner Time||Specialist|| |
|403||International Exam Amount||Specialist|| |
|405 - 408||Related Return Information Section||Specialist|| |
See IRM 22.214.171.124.1.81 through 126.96.36.199.1.81.2.
|412||Installment Agreement Code||Specialist|| |
|414||Delinquent Return Amount||Specialist|| |
|415||Amended Return Amount||Specialist|| |
|416||Fax Agreement Ind.||Specialist|| |
|701||Principal Issue Code||Specialist|| |
|722||Employment Tax/GE||Specialist|| |
|FSLG Employment Tax Case Grading Criteria|
|Grade 12|| |
|Grade 13|| |
* For upgrade criteria, refer to IRM Exhibit 4.23.19-1, Employment Tax Case-Grading Factors.
GS-12 Specialists can work above grade cases for no more than 25% of their time (per pay period). See IRM 188.8.131.52.
Field Managers should consider the case grading implications of converting a compliance check into an examination. For example, a grade 12 compliance check may be a grade 13 examination due to the taxpayer’s employment tax liability and/or the complexity of its structure.
|INDEX #||DOCUMENT NAME|
|TOP OF FOLDER|
|1.0||F895.F94X.YYYYMM (required for all cases with fewer than 270 days on 'normal statute')|
|INSIDE LEFT OF FOLDER|
|2.0||FCDS (never required to be included in paper file)|
|2.1||AMDIS (summary of controlled quarters showing all in status 12)|
|2.3||F2363 (process to FSLG AIMS Coordinator prior to closing case)|
|INSIDE RIGHT OF FOLDER|
|30.2||Rebuttal to TP Protest|
|30.5||L950-C; L950-D; L5376; L3381; L3382; L570; L905; L906; L3523; L937 (POA Transmittal Letter)|
|31.1||Closing Agreement (CSP or Ad Hoc)|
|31.2||F2504; F2504-WC; F4666; F4668; F4668-B|
|31.3||F886-A.XXXX.Issue Name (where XXXX is the GSAIN number)|
|31.4||Payee List(s) (separate lists for §7436 issues & relief from withholding granted via F4669)|
|31.5||F4670.Request for Relief from Withholding|
|31.6||F4669.Payee Statement(s) (for withholding relief granted)|
|32.1||F3244-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||F94X.X.YYYYMM (processed amended return, if applicable) (in paper file, attach to back of "Tax Return")|
|32.3||F2848 or F8821.Power of Attorney (in paper file - attach to back of return, facing out, behind Consents, if any)|
|32.4||FSS-10; F872-B; F872.Statute Extension (in paper file - attach to back of return, facing out - it should be the first thing seen there)|
|PLANNING AND INFORMATION GATHERING|
|33.100||F4318.Workpaper Index (ties to issue lead sheets & ET Report)|
|33.201||TP/POA Correspondence (including initial contact & report transmittal letters)|
|33.202||Internal Email & other non-TP communications|
|33.203||Large Case Status Report|
|33.204||F5701 (indexed by issue, e.g., 33.204.1605.X, etc.)|
|33.301||IDR.XXXX (where XXXX is GSAIN)|
|33.401||FSS-10; F872-B; etc.|
|33.402||L907; L928; L929|
|33.500||PRE-CONTACT PLANNING / AUDIT PLAN|
|33.501||Pre-Contact Analysis Lead Sheet (Package Audit Lead Sheet, etc.)|
|33.502||Internal Controls Lead Sheet|
|33.503||Large Case Team Notes|
|33.504||Support Request.XXX (where XXX is the support function – CAS, EO, EP, Excise, TEB, etc.)|
|33.505||Document Name (notes on external information gathered, interviews with prior specialists, notes from prior case file, etc.)|
|33.506||Form 5666-Referral; Referral Tracking Sheet; Other Referral Materials (pertaining only to the case under audit)|
|33.600||INITIAL TP CONTACT AND INTERVIEW|
|33.601||Pre-Audit Contact Notes|
|33.603||Tour of Facilities|
|33.700||RECORDS REVIEW, ANALYSIS & RECONCILIATION|
|33.701||F941/FW-2 Analysis & Reconciliation - (IRAS; Books/Payroll records to F941/FW-2; IRP & CAWR data)|
|33.702||F1099-MISC (G; R; etc.) Analysis & Reconciliation - (IRAS; Books/AP records information returns; IRP data)|
|33.704||Chart of Accounts|
|33.705||Financial Statements (including independent audit reports, federal/state audit 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)|
|INDEX #||ISSUE #||DOCUMENT NAME|
|31111.000||Use this code as the only adjustment in each of the first 3 quarters of all F941 audits|
|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
|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|
|- §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
|34.1401||31401.000||Section 530 Relief|
|- 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
|- 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
|- Third Party Payments - no 218 |
- Third Party Payments - 218
|- Other - no 218 |
- Other - 218
|Back Pay, Settlements, Damages|
|Awards & Prizes|
|Below Market Loans|
|Grossed Up Wages|
| 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
|Scholarships and Fellowships|
|- Stipends |
|No-Additional Cost Fringe Benefit|
|Working Condition Fringe Benefit|
|Moving Expense Reimbursement|
|On-premises Athletic Facilities|
|Retirement Planning Services|
|Meals and Lodging|
|Group Term Life Insurance|
|Medical & Accident Benefits|
|Health, Accident & Disability Insurance Premiums|
|- Housing Allowance |
- Housing Provided
- Athletic Tickets
- Personal Use of Facilities
- Non-Accountable Expense Plan
- Gifts - cash or cash equivalent
|Entertainment (tickets, entertainment meals, etc.) (accountable plan fails)|
|Uniforms and Clothing Provided (accountable plan fails)|
|Uniforms and Clothing Allowance (accountable plan fails)|
|Internet Allowance (accountable plan fails)|
|Travel and Vehicle Allowance (accountable plan fails)|
|Equipment Provided (accountable plan fails)|
|Equipment Allowance (accountable plan fails)|
|Cell Phone Allowance (accountable plan fails)|
|Other (title document, lead sheet & explain) (accountable plan fails)|
|34.1700||ER PROVIDED TRANSPORTATION|
|- 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
|ER Provided Aircraft (accountable plan fails)|
|ER Provided Transportation - Other (accountable plan fails)|
|EE Provided Vehicle (accountable plan fails)|
|34.1705||31705.000||EE Provided Transportation - Other (accountable plan fails)|
|34.2100||PENSIONS & DEFERRED COMPENSATION|
|IRC 457 Plans|
|IRC 403(b) Plans|
|Other Nonqualified Deferred Compensation Plans|
|34.2201||32201.000||BUW.FW-9 Review-no CP2100|
|34.2203||32203.000||BUW.Prizes & Awards |
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|
|Special Emphasis 1 (name the document with the special emphasis name)|
|Special Emphasis 2 (name the document with the special emphasis name)|
|6656.Failure to Deposit|
|Other (explain and title the lead sheet)|
|CONCLUSIONS, CRITIQUES & PRIOR COMPLIANCE ACTIVITY (AUDIT OR COMPLIANCE CHECK)|
|34.2500||OTHER AGENTS' CONCLUSIONS|
|34.2600||POST AUDIT CRITIQUE|
|40.0000||n/a||PRIOR COMPLIANCE ACTIVITY (zip file prior audit/compliance check - rename documents as necessary)|
|CIVPEN.33.2||CivPen Lead Sheet|
|CIVPEN.33.3||Payee List (names, TINs, payment amounts)|
|PAPER CASE FILE REQUIREMENTS FOR UNAGREED PROTESTS TO APPEALS|
|INSIDE RIGHT - ON TOP OF REPORT PACKAGE|
|Form 4665 (optional)|
|Rebuttal to TP's Protest|
|Closing Agreements - signed by TP|
|INSIDE RIGHT - REPORT PACKAGE|
|Form 2297 - signed by TP|
|Form 3363 - signed by TP|
|Forms 2504 / 2504-WC|
|Forms 4666, 4668, 4668-B, 886-A|
|Form 4670 - signed by TP|
|Forms 4669 - signed & dated by payees (valid forms)|
|INSIDE RIGHT - TAX RETURN PACKAGE|
|Form 5599 (attached to top of return documents - for each tax period)|
|Form 3244-A (attached to top of return documents, after Form 5599, for each tax period)|
|Tax Return Document (Tax Return, TRDBV, etc.) for each tax period|
|Form 2275 w/BMFOLR for SFRs (for each tax return & period)|
|Form 2848 - signed by TP & Representative (must be valid) - attach to back of return, facing out|
|Form SS-10 - signed by TP & Group Manager - attach to back of return facing out so it's the first thing seen (ensure statute date updated on AIMS/RCCMS)|
|Initial interview/meeting notes|
|Correspondence to/from TP related to unagreed issues|
|Unagreed issue workpapers (indexed to Form 4318), including lead sheets, supporting workpapers and:|
- Delinquent Information Returns (Forms W-2, 1099-MISC, etc.)
- List of Payees for delinquent Information Returns (name, TIN, payment amount, relief granted)
|Forms 5701 signed by TP for unagreed issues|
|Section 218 Agreement, if applicable|