5.7.10 Control Point Monitoring (CPM) Trust Fund Recovery Penalty (TFRP) Case Processing

Manual Transmittal

July 03, 2017

Purpose

(1) This transmits revised IRM 5.7.10, Control Point Monitoring (CPM) Trust Fund Recovery Penalty (TFRP) Case Processing.

Material Changes

(1) Minor editorial changes have been made throughout the text.

(2) Renumbered IRM 5.7.10.1 to IRM 5.7.10.1.1.

(3) IRM 5.7.10.1.2 provides guidance for CPM ATFR employee control structure.

(4) IRM 5.7.10.2 provides overview for CPM TFRP case processing.

(5) IRM 5.7.10.2.1 provides guidance for CPM actions when ATFR case is in pending but no case file has been received.

(6) IRM 5.7.10.2.2 provides guidance for CPM actions when there is no ATFR case in pending inventory but a case file has been received.

(7) IRM 5.7.10.2.3 provides guidance for CPM actions when ATFR case is in pending inventory and a case file has been received.

(8) IRM 5.7.10.2.3(6) provides guidance for CPM actions when it is appropriate to issue a Form 5942 and return a TFRP case to the originator.

(9) IRM 5.7.10.3 provides guidance for CPM actions upon receipt of a quick, prompt or jeopardy assessment processed by a revenue officer, including necessary documents or return to revenue officer.

(10) IRM 5.7.10.5 provides guidance for CPM actions upon receipt of a TFRP file containing a taxpayer protest.

(11) IRM 5.7.10.5(1) note provides reminder that per IRM 5.7.6.1.9, Transmittal of Case to Appeals, Field Collection is responsible for ensuring all necessary documents are included in the TFRP case file and for the accuracy of the protests timeliness determination.

(12) IRM 5.7.10.7 provides guidance for CPM inventory management and for Advisory CPM management to review ATFR inventories and reports monthly to identify cases requiring attention.

(13) IRM 5.7.10-1 Exhibit is removed as CPM is not required to complete a check sheet.

Effect on Other Documents

This material supersedes IRM 5.7.10, dated May 15, 2015. This IRM revision incorporates Collection Interim Guidance Memorandum SBSE-05-0716-0032, Trust Fund Recovery Penalty (TFRP) Case Processing, dated July 01, 2016.

Audience

AI Advisory - Control Point Monitoring Employees

Effective Date

(07-03-2017)

Kristen E. Bailey
Director, Collection Policy

Chapter Overview

  1. This chapter provides guidance to Advisory Control Point Monitoring (CPM) on the processing of Trust Fund Recovery Penalty (TFRP) files.

Automated Trust Fund Recovery

  1. The Automated Trust Fund Recovery (ATFR) program is a National Standard Application used to control TFRP case inventories. Control Point Monitoring (CPM) is one of three components of the ATFR program. The CPM component of the program, located in Advisory, is responsible for ensuring that TFRP case files are submitted by Field Collection (FC) and the final disposition of the case has been accurately recorded on the ATFR system.

    The ATFR CPM Inventory consists of four separate inventories:

    • "Pending" - Cases transmitted to CPM which are awaiting receipt of the TFRP case files.

    • "Accepted" – Case file has been received .

    • "2749 to SC" – Case file has been transmitted to the campus for assessment.

    • "Appeals" – Case file has been forwarded to Appeals.

  2. CPM has the ability to record the following information on ATFR:

    • Processing dates for Form 2749, Request for Trust Fund Recovery Penalty Assessment(s)

    • Appeals case information

    • Date TFRP file is sent to Federal Records Center (FRC)

    • TFRP assessment information

    • Closed TFRP file requests

CPM Employee Control Structure

  1. CPM must maintain an accurate ATFR employee control structure. The employee control structure should contain all of the groups/territories serviced by a CPM so cases appear correctly on ATFR inventory screens and reports. CPM users should use ATFR "Resync" on a regular basis to account for any changes to the TSIGNs within their assigned range.

  2. Cases received from ROs within a CPM’s assigned work structure should be processed by CPM regardless of the address of the business entity.

Case Processing

  1. Cases are systemically added to the CPM inventory after the revenue officer (RO) selects "2749 to CPM" to submit the responsible person’s TFRP file.

  2. ROs will mail the TFRP case file to CPM after updating ATFR "2749 to CPM" . Follow guidance in IRM 5.7.10.2.1 if the case file is not received.

  3. If there are less than 30 calendar days remaining on the ASED, the RO must prepare a quick assessment prior to submitting the case to CPM. Follow guidance in IRM 5.7.10.2.3 to prepare Form 5942, Reviewer’s Report - Technical Services Advisory, and return to RO if the RO has not completed the quick assessment or has failed to include the assessment documents.

  4. Determine if the proposed assessment is a quick, prompt or regular assessment by checking the ATFR system against the Form 2749.

  5. Determine if the taxpayer has submitted a protest requiring the case to be sent to Appeals. See IRM 5.7.10.5, Appeals Case Processing..

ATFR Case in Pending Inventory - No Case File Received

  1. Review the "Pending" inventory to identify cases assigned for more than 10 business days. If you identify cases in "Pending" inventory for greater than 10 business days without receipt of the physical file, contact the RO by phone or E-mail requesting the file and document the contact attempt in the ATFR history. Allow the RO 10 business days for receipt of the file. If the file is not received within this time frame:

    1. Select the "Return to RO" option and select “TFRP Case File not Received after RO Notification” on the systemic Form 5942.

    2. Issue the ATFR Form 5942 to the RO and group manager (GM).

ATFR Case Not in Pending Inventory - Case File Received

  1. If physical case file is received but case is not in the ATFR Pending Inventory, CPM will:

    1. Determine if “2749 to CPM” date was entered on ATFR using the “Find” option from the ATFR-AO menu to locate the case. If date is not present, input the current date in the “2749 to CPM” field on ATFR.

    2. If responsible party is still not on "Pending" Inventory, determine if the RO TSIGN is within your assigned TSIGN range.

    3. If RO is within your assigned TSIGN range, follow IRM 5.7.10.1.2 to update your control structure.

    4. If RO TSIGN is not within your assigned TSIGN range, contact the CPM responsible for the TSIGN range to ensure that the RO is reflected in their "Employee Control Structure" . Immediately forward the file to the CPM location working that TSIGN range on a Form 3210-A, Document Transmittal for Trust Fund Recovery Penalty Case Files. See IRM 10.2.13.4.4.1, Shipping Personally Identifiable Information (PII). Potential ASED cases should be forwarded electronically (email or fax).

ATFR Case in Pending Inventory - Case File Received

  1. Within five business days of receipt of the physical TFRP file, CPM will:

    • Acknowledge Form 3210-A

    • Review the ATFR CPM "Pending" inventory and accept the case into the CPM "Accepted" inventory.

  2. CPM will receive TFRP files in three categories:

    • TFRP assessment made by RO via the quick (Q), prompt (P), or jeopardy (J) assessment process

    • Regular TFRP assessment to be processed to the campus

    • TFRP protests to be processed to Appeals

  3. TFRP assessments made by the RO must contain:

    • Form(s) 2859, Request for Quick or Prompt Assessment

    • Form 3210, Document Transmittal, from the campus reflecting the assessment date and Document Locator Number (DLN)

    • Forms 3552 with proof of mailing attached

      Follow guidance in IRM 5.7.10.2.3(6) to return TFRP case files to the RO if any of these items are missing.

      These cases will require CPM ATFR inputs outlined in IRM 5.7.10.3.

  4. Regular TFRP assessments will be released to the campus upon acceptance into the "Accepted" inventory. Enter the date the Form 2749 is being transmitted to the campus in the "2749 to SC" field on ATFR. This action automatically moves the case on ATFR from the "Accepted" inventory to the "2749 to SC" inventory. Follow guidance in IRM 5.7.10.4 to monitor the "2749 to SC" inventory.

  5. TFRP protest cases will be transmitted to Appeals upon acceptance into the "Accepted" inventory. Follow guidance in IRM 5.7.10.5 to process the case to Appeals.

  6. CPM will issue an ATFR Form 5942 to the RO/GM and return TFRP case files on Form 3210-A for the following reasons:

    • Case full paid prior to assessment

    • TFRP Case File not Received after RO Notification

    • RO/GM requested return of case file

    • ASED within 30 days - RO must complete Quick, Prompt or Jeopardy

    • Calculation Failure - see ATFR history

    • SC unable to assess - see ATFR history

    • Missing Q, P, or J documents and/or proof of Form 3552 certified mailing

      Note:

      CPM may contact FAS or CAC for assistance with calculation failures for expedited action.

Processing Quick, Prompt and Jeopardy Assessments Received from the Field

  1. Upon receipt of a Q, P or J assessment processed by a RO and moving the ATFR case to "Accepted" inventory, CPM will update ATFR with the following information:

    • Verify assessment type is correct (Q, P, or J). It is critical that the correct type of assessment is posted to eliminate any duplicate assessments when the Form 2749 is released to SC.

    • Assessed amount

    • DLN

    • Date of Assessment

    NOTE: In order to enter the above information, click on "View/Edit Assessments" and highlight the period to edit. Click on "Edit" , enter the above data, and save the information.

  2. If the necessary assessment documents are not in the TFRP case file, follow guidance in IRM 5.7.10.2.3 above to return to RO.

  3. After inputs are complete, select "Release to SC" . This will move the case to the "2749 to SC" inventory on ATFR.

Monitoring of 2749 to Campus Inventory

  1. The systemic transmission of Form 2749 to the campus for assessment creates the ATFR "2749 to SC" inventory. This inventory will be reviewed weekly.

    This weekly monitoring will identify cases successfully assessed through the campus and ready to be closed on the ATFR system. It will also identify cases rejected by the campus having possible assessment problems (e.g., unpostable periods, calculation problems, CI Freeze). The cases returned to CPM by the campus will be identified by an "R" for reject. These cases will appear on either the "Accepted " or "Appeals" inventories (the inventory case was in prior to submission to the campus). These cases must be reviewed to determine the rejection reason. See IRM 5.7.10.2.3 for Form 5942 process if the case must be returned to the RO.

    Any case remaining in this inventory for more than 21 calendar days requires IDRS research or contact with the campus for resolution. Exception: manual assessments may take up to 8 cycles to post.

  2. Review the "2749 to SC" inventory to determine if a "P" indicator has posted to the case. For regular assessments, the assessment date, DLN and assessment amount will be entered systemically by the ATFR system.

    Verify the posting of the TC 240 DLN, 23C date, assessed balance and TC 971 AC 097 by checking IDRS. After verification, close the case on ATFR within 10 calendar days using the "Close 2749" option on the ATFR case.

  3. Notate the front of case file folders with the date of assessment. This will identify the file for future retirement to the FRC.

Appeals Case Processing

  1. Upon receipt of a TFRP file containing a taxpayer protest, CPM will take the following actions to process to Appeals:

    1. Within 5 business days of receipt of case file, open an Integrated Collection System (ICS) Code 176 Non Field Other Investigation (NF OI) module. ICS can be used to establish systemic follow up dates for Appeals cases.

    2. Annotate Form 2749 in red ASED extended by TBOR-2.

    3. Prepare Form 3210-A using ATFR (under Responsible Party Forms and Letters menu) indicating ASED protected by TBOR-2 in the remarks section.

    4. Form 3210-A must provide the fax number for the sending CPM office.

    5. Enter the date sent to Appeals in ATFR. This action automatically moves the case from the "Accepted" inventory to the "Appeals" inventory.

      Note:

      If more than one person of the same corporation is protesting, the files should be submitted to Appeals as a package, whenever possible. If a co-obligor is not protesting, that case should remain in CPM for normal processing (IRM 5.7.10.2.3) to be associated with the protest file upon its return from Appeals.

      Note:

      Per IRM 5.7.6.1.9, Transmittal of Case to Appeals, Field Collection is responsible for ensuring all necessary documents are included in the TFRP case file and for the accuracy of the protest timeliness determination.

  2. Follow guidance in IRM 10.2.13.4.4.1, Shipping Personally Identifiable Information (PII), to ensure receipt of acknowledged Form 3210-A from Appeals.

Appeals Cases - Controlling and Monitoring

  1. Appeals may request additional information on protested cases. Appeals will retain jurisdiction on these cases if the ASED is held open only by the timely protest under TBOR-2. This is to preserve the time in Appeals plus 30 days, under IRC 6672(b). An Appeals hearing officer may determine that new information submitted by a potentially responsible party requires investigative analysis. In this situation, Appeals will retain jurisdiction of the case and forward the new information request via Form 10467, Appeals Division Feedback Report and Transmittal Memorandum, to the originating CPM for processing. The CPM should consult with an advisor and if it is determined additional investigative analysis by a revenue officer is necessary, will follow guidance in IRM 5.1.8.5.1, Types of Mandatory OIs, to issue an OI to FC. The information should be provided within 45 calendar days of the request. This date may be extended by mutual agreement. These situations should be highly uncommon. To avoid ex parte communications, Appeals has the responsibility for informing the potentially responsible party that the information was sent to FC for investigation, sharing FC’s response with the potentially responsible party and allowing the potentially responsible party time to comment.

  2. When a final determination is rendered, Appeals will return the case to CPM with Form 5402, Appeals Transmittal and Case Memo, which will reflect the Appeals decision. CPM will update the ATFR system with the:

    • Form 5402 Approved Date (the date the Form 5402 was signed by the Appeals Manager)

    • The Appeals determination

    • The Appeals determination may be:
      a) No Change, i.e., fully responsible (F)
      b) Partially Responsible (P). If partially responsible the periods must be edited to reflect the revised amount to be assessed as determined by Appeals.
      c) Not Responsible (N). CPM will close the case no later than 10 calendar days after receiving the Appeals determination not to assess.

      Note:

      TFRP cases that are returned from Appeals as non-sustained must be reviewed by CPM to determine if the release of Transaction Code (TC) 130, Entire Account Frozen from Refunding, is appropriate. Individual case circumstances will dictate if the release is appropriate. TC 130 is a taxpayer entity freeze. If additional TFRP assessments are pending, or there is a prior sole proprietor TC 130 offset in place, release of the TC 130 is not appropriate.

  3. If Appeals sustains the original proposed assessment in full or in part generate and print a new Form 2749 to reflect the correct TFRP amount based on the Appeals determination.

  4. CPM is responsible for timely completing any assessment action (See IRM 5.7.6.3, Quick and Prompt Assessment Actions), ensuring the ASED is protected on all Appeals cases, and inputting the Appeals determination information on ATFR. If there are more than 30 calendar days remaining on the ASED, process the TFRP assessment as a regular assessment.

  5. While the ASED was extended by TBOR-2 for the time the case was pending in Appeals and under their jurisdiction, it is only protected for an additional 30 calendar days from the date of the final Appeals determination as indicated by the managerial signature on the Form 5402, Appeals Transmittal and Case Memo, Form 866, Agreement as to Final Determination of Tax Liability, or Form 906, Closing Agreement on Final Determination Covering Specific Matters. The following steps will be taken to ensure the assessment is completed within the 30 calendar day period:

    1. Update ATFR to the correct type of assessment to be completed (Quick, Prompt, Regular).

    2. Generate and print a new Form 2749 for the case file to use when making a quick assessment under TBOR-2 if the dollar amounts on the trust fund assertion have changed.

    3. Generate and print the Form 2859 quick assessment documents from the ATFR system.

    4. Complete all required information on the Form 2859, including the requestor’s full address, phone number, and employee ICS assignment number.

    5. Prepare Form 3210 with the taxpayer’s name, last four digits of the social security number and each period to be assessed listed. Include CPM requestor’s fax number. (This page will be faxed back to CPM with the assessment date and the DLN for each period assessed.)

    6. Prepare a fax cover sheet with the taxpayer’s name and last four digits of the social security number and fax it to the Ogden Manual Assessment Unit with the following documents:

    • Form 3210 complete with all information

    • Form 2749

    • One copy of Form 2859 for each period to be assessed, with the group manager’s signature.

    The Ogden Manual Assessment Unit will fax back Form 3210 with the assessment date and DLN for each period. Upon receipt of this information, update ATFR with the DLN and assessment date and transmit the "2749 to SC" . (Inputting this date automatically moves the case from the Appeals inventory to the "2749 to SC" inventory). Follow the "2749 to SC" monitoring procedures as outlined in IRM 5.7.10.5.

    For fax assessments, the Ogden Manual Assessment Unit will prepare Form 3552, Prompt Assessment Billing Assembly, and forward it to the initiator. The initiator will immediately deliver or mail certified Parts 3 and 4 of Form 3552, along with Publication 1, to the taxpayer. Notice 960, Explanation of Penalty Assessment on Form 3552 (Part 3), Notice of Tax Due on Federal Tax Return, will also be included with Form 3552 to remind the taxpayer of the procedures to follow in order to file a claim for refund and request abatement of the liability. Multiple Forms 3552 for the same taxpayer may be mailed together. Accounting Control/Services will also forward copies of the Forms 2749 and 3552 to the TFRP unit in Compliance Services Collection Operations (CSCO) for input of the appropriate cross-referencing information and UNLCER information.

ATFR Inventory Management and Reports

  1. The accuracy of the ATFR inventory is dependent upon maintaining an accurate employee control structure. Advisory CPM management should establish an employee control structure that mirrors the control structure of all their CPM employees. The most effective manner of inventory assignment is to assign specific TSIGN ranges to a specific CPM employee. This will allow CPM users to view their own assigned inventory using the "My Inventory" option on ATFR.

  2. ATFR provides the following inventory screens and reports:

    1. Pending
      - Displays responsible parties updated to Form "2749 to CPM" by RO.
      - Cases in this inventory longer than 30 days may require managerial intervention.

    2. Accepted
      - Displays responsible parties for which a physical file was received.
      - Displays responsible parties rejected by campus with an "R" indicator
      - Cases should not remain in this inventory. If not transmitted to campus or Appeals upon receipt, cases should be rejected to RO.

    3. Appeals
      - Displays responsible parties updated from Accepted inventory to Appeals

    4. 2749 to SC
      - Displays responsible parties updated to the campus for assessment

    ATFR inventory screens can be sorted by each column on the screen. Sorting inventory screens by "2749 to CPM" , "To Appeals" , or "2749 to SC" dates will allow for immediate identification of older cases requiring attention. Sorting inventory screens by ASED date allows for immediate identification of potential ASED issues.

  3. Quarterly reconciliations will be conducted to reconcile the "Appeals" inventory with the Appeals Centralized Database System (ACDS) to ensure that cases are still open in Appeals.

  4. Advisory CPM management should review ATFR inventories/reports monthly to identify any aging cases requiring attention.

Case Retention and Retirement

  1. TFRP case files are retained in CPM until retirement to FRC (See IRM Exhibit 1.15.28-1, Records Control Schedule for Collection, for TFRP records retention information.). The FRC requirement to retire the TFRP file, forms and documents 2 years after assessment, should be interpreted as 2 years from the latest assessment date of all responsible parties. This will insure that all files related to a specific TFRP are associated and retained for 12 years from assessment at the FRC.

  2. When cases are to be retired to the FRC, Advisory CPM employees will add the accession number and FRC location in the designated field on ATFR.

  3. FRC guidelines require the electronic media be removed prior to shipment to FRC. All electronic media should be placed in the last box of the shipment. It is the ROs responsibility to properly label electronic media.

Requests for Closed TFRP Files

  1. CPM may receive requests for closed TFRP files from various requesters (Taxpayer Advocate Service, Appeals, Disclosure, etc.) via Form 2275. If the case file is in CPM’s closed TFRP file (assessment date within two years):

    1. Pull file and replace with a file charge-out card and send the entire case to the requester via Form 3210.

    2. Open an ICS 174 TFRP Files case under the corporate EIN to monitor the case while it is charged out. Notate ICS history with the requester’s name, location and phone number, as well as the responsible party’s name(s), SSN, and date of assessment.

    3. Close 174 module when the case is returned to CPM and return to closed files.

  2. If the case file has already been sent to the FRC:

    1. Complete Optional Form 11 (OF Form 11) Sections I & II, including the Accession Number and Records Center Location Number (available on ATFR CPM Information Screen or local CPM closed FRC file listing).

    2. Fax OF 11 to the Area AWSS Support Services Specialist, who will request the file from the FRC.

    3. Open an ICS 174 TFRP Files case under the corporate EIN to monitor receipt of the closed file from FRC. Notate ICS history with the requester’s name, location and phone number, as well as the responsible party’s name(s), SSN, and date of assessment. When received, forward the file to requester via Form 3210. Monitor case periodically to ensure file is still in requester’s possession.

    4. Close the ICS 174 TFRP Files case module when case file is returned to CPM from the requester, and return the file to the FRC for re-filing.