Part 5. Collecting Process
Chapter 20. Abusive Tax Avoidance Transactions (ATAT)
Section 11. Examination Reconsiderations and Referrals
August 16, 2016
(1) This transmits revised IRM 5.20.11, Abusive Tax Avoidance Transactions, Examination Reconsiderations and Referrals.
(1) IRM 18.104.22.168(1) updated IRM citation.
(2) IRM 22.214.171.124(2) updated link.
(3) IRM 126.96.36.199(5)(a) updated IRM citation.
(4) IRM 188.8.131.52 updated all references to Classification Team 101 to ATSU and changed Ogden address.
(5) IRM 184.108.40.206(2) included TXMOD example with Exam ATAT special project code.
(6) Editorial corrections made throughout the IRM.
Kristen E. Bailey
Director, Collection Policy
IRM 5.1.11, Delinquent Return Investigations, provides guidance on conducting delinquent account investigations.
If a revenue officer determines that an Examination referral is the next appropriate case action on an ATAT taxpayer, the revenue officer will follow the guidance in IRM 220.127.116.11.3.3, Del Ret with Income But without IRP. In addition, the revenue officer will write "ATAT" in red on the Form 3449. If known, the revenue officer will also write the promoter/preparer’s name or tracking number in red on the Form 3449. If Form 3449 is processed through Integrated Collection System (ICS), this information should be in bold print. This information will ensure that the request will receive priority consideration when Planning and Special Programs (PSP) assigns the referral to an Examination group.
Audit reconsiderations refer to requests to reevaluate the results of an audit assessment when a taxpayer disagrees with the original audit determination. An audit assessment is identified on a TXMOD by TC 420 followed by a TC 300 amount. If an audit reconsideration is received from an ATAT taxpayer, the revenue officer will write "ATAT" in red on the Form 3870, Request for Adjustment. If known, the revenue officer will also write the promoter/preparer’s name or tracking number in red on the Form 3870. Process the Form 3870 following the guidance in IRM 18.104.22.168.1, Audit Reconsiderations. This will ensure that the request will receive priority consideration when PSP assigns the reconsideration to an Examination group.
IRM 22.214.171.124.4, Substitute For Return (SFR) Reconsiderations, and IRM 126.96.36.199.5, Automated Substitute for Return (ASFR) Reconsiderations, provide guidance on the processing of SFR/ASFR reconsiderations and provide guidance on determining the correct campus for processing. The following procedures ensure that ATAT SFR reconsiderations secured either by the revenue officer or at the campus are designated when appropriate for classification by Field ATAT Classifiers.
As part of the initial case analysis, revenue officers must review TXMOD for Exam ATAT special project codes on all SFR balance due tax periods. The special project code is listed adjacent to transaction code (TC) 424.
A list of Exam ATAT special project codes can be found on the ATAT website at: http://mysbse.web.irs.gov/examination/examorg/hq/eqts/examinationaids/19335.aspx
If the revenue officer locates a SFR assessment with an Exam ATAT special project code, the revenue officer must take the following case actions to ensure returns submitted as a SFR reconsideration on ATAT cases are carefully reviewed. The action will be warranted in cases with SFR assessments where the taxpayer continues to raise frivolous arguments not supported by law or when proceeding with enforcement actions such as seizure or suits.
Complete Form 4844 and request input of an IDRS history item of "OPENATAT" on TXMOD.
Forward Form 4844 to Centralized Case Processing (CCP) for input.
By inputting the identifier "OPENATAT" on TXMOD, any returns subsequently filed by the taxpayer either directly with the campus or with the revenue officer will be designated for classification at the Ogden Campus. A return classified as "OPENATAT" will be reviewed by a Field Exam Agent and will be either selected for audit or accepted as filed.
If a return is secured, the revenue officer must determine whether or not the ATAT issue causing the SFR assessment has been resolved.
If the ATAT issue has been resolved, the revenue officer must take the following actions:
1) Complete Form 4844 to input "CLSDATAT" on TXMOD and route Form 4844 to CCP. 2) Prepare Form 3870 and send the return to the correct campus per IRM 188.8.131.52.4, Substitute For Return (SFR) Reconsiderations and IRM 184.108.40.206.5, Automated Substitute for Return (ASFR) Reconsiderations.
If the taxpayer files a questionable return which appears to include either (a) substantially understated income or overstated expenses, or (b) bogus credits, or (c) other significant disputable item(s), the revenue officer must take the following actions:
1) Complete Form 4844 to request input of IDRS History Item "ATSU" on TXMOD for the tax period at issue. 2) Complete Form 4844 to request input of History Item "OPENATAT" on TXMOD, if the History Item has not already been input. 3) Request the administrative file for the underlying assessment by command code (CC) ESTAB. 4) Complete Exhibit 5.20.11-1, ATAT Special Handling Alert, and attach to the front of the return. 5) Route the return, administrative file and pertinent documents, to the Abusive Transactions Support Unit (ATSU) at the Ogden Campus on Form 3870 to be held for review by a Field ATAT Classifier. Indicate on the transmittal if the revenue officer has been unable to secure the administrative file. The return and attachments must be sent to the address below:
Internal Revenue Service
1973 N. Rulon White Blvd.
Ogden, UT 84404
When a return with a History Item "OPENATAT" is received directly by Brookhaven Centralized Reconsideration Unit, Brookhaven must contact the ATAT Coordinator where the taxpayer is located to verify that the "OPENATAT" identifier is correct.
If the ATAT identifier is not correct, the following actions must be taken:
1) The revenue officer must request input of History Item "CLSDATAT" on Form 4844 and forward to CCP for input. 2) The revenue officer or ATAT Coordinator must notify Brookhaven Centralized Reconsideration Unit that the ATAT issue is closed and the delinquent return can be processed.
If the ATAT identifier is correct, the following actions must be taken:
1) Brookhaven Centralized Reconsideration Unit employee must contact the ATAT Coordinator who will provide the name, phone number, and fax number of the revenue officer assigned to the account. 2) Brookhaven Centralized Reconsideration Unit must provide a copy of the return to the revenue officer by facsimile. 3) The revenue officer must overnight mail any pertinent information relating to the return to Brookhaven by the end of 15 business days from the date of contact. Pertinent information must be routed to the following Brookhaven Centralized Reconsideration address:
Brookhaven Service Center
1040 Waverly Avenue, Stop 654
Holtsville, NY 11742
Attn: Centralized Reconsideration Manager – Open ATAT Case
4) If pertinent information is not received by the Brookhaven Centralized Reconsideration Unit within 15 business days, the return must be sent to ATSU without the information with a notation at the bottom of the ATAT Special Handling Alert “Pertinent information available but not received.” The name and telephone number for the assigned revenue officer must be included. The return must be sent to:
Internal Revenue Service
1973 N. Rulon Blvd.
Ogden, UT 84404
5) If the ATAT Special Handling Alert indicates a "pertinent information available but not received" notation, the classifier must contact the listed revenue officer and attempt to secure the information. ATAT SFR reconsideration returns will be classified in the same manner as other ATAT returns.
After classification has been completed, ATSU will process returns as follows:
Accepted SFR ATAT reconsiderations will be routed to the Brookhaven Service Center Centralized Reconsideration Unit for expedite processing of the taxpayer’s SFR recon return.
Selected SFR ATAT reconsiderations will be routed to the appropriate Area Office PSP for field or office audit.
|DIRECTIONS: Attach Special Handling Alert to all "OPENATAT" cases that are forwarded to the Abusive Transactions Support Unit. "OPENATAT" cases are those cases with ATAT SFR assessments and open ATAT issues in field Collection. The Special Handling Alert will alert Field ATAT Classifiers that an open ATAT issue exists on the case in field Collection. Field ATAT Classifier will contact the assigned Revenue Officer or ATAT Coordinator as needed to discuss issues in order to classify the return.|
|Provide the following information if the Revenue Officer is unknown:|
|A current list of Collection ATAT Coordinators can be found at: http://mysbse.web.irs.gov/Collection/toolsprocesses/CollATAT/contacts/19487.aspx|