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8.2.1  Agreed Pre-90-Day Income Tax Cases

Manual Transmittal

August 23, 2016

Purpose

(1) This transmits revised IRM 8.2.1, Pre-90-Day and 90-Day Cases, Agreed 90-Day Income Tax Cases.

Material Changes

(1) Revised IRM 8.2.1.4, Receipt of New Assignment by an Appeals Technical Employee (ATE), and removed IRM 8.2.1.7, Uniform Acknowledgment Letter Procedures - ATE, to incorporate AP-08-00716-0004, Interim Guidance on Initial Conference Procedures for Liability, Penalty Appeals and Innocent Spouse Cases, issued July 6, 2016, and signed by John V. Cardone. Renumbered subsequent sections , accordingly.

(2) Revised IRM 8.2.1.7 (formerly IRM 8.2.1.8), Conducting the Conference - ATE, to remove guidance on conducting a conference and point the reader to IRM 8.6.1Conference and Settlement Practices - Conference and Issue Resolution.

(3) Removed IRM 8.2.1.8.1, Examination Representatives Attending the Conference and IRM 8.2.1.8.1.1, Change of ATE After Initial Contact, as this guidance is also contained in IRM 8.6.1. Renumbered IRM 8.2.1.8.2 to IRM 8.2.1.7.1, Assistance from Counsel in Pre-90-Day Cases, and updated it to reflect Rev. Proc. 2016-22. Renumbered IRM 8.2.1.8.3, Verification of New Material or Request for Further Development - ATE, accordingly.

(4) Revised IRM 8.2.1.8 (formerly IRM 8.2.1.9), Requesting Work from Tax Computation Specialist, to reflect ATE guidance for:

  1. Referring work requests to Tax Computation Specialists (TCS). ATEs will prepare TCS work requests and attach the required files as ACDS case file attachments instead of sending them as email attachments.

  2. Identifying when interest suspension issues are present on cases where Compliance determinations are fully sustained.

(5) Revised IRM 8.2.1.9 (8) (formerly in IRM 8.2.1.10) to include information on IRS Direct Pay tool.

(6) Revised IRM 8.2.1.10 (formerly IRM 8.2.1.11), Closing the Case to APS, to reflect updated case closing procedures to Appeals Processing Section (APS) for Appeals Team Managers.

Effect on Other Documents

This supersedes IRM 8.2.1 dated August 11, 2015. Incorporated Interim Guidance Memorandum AP-08-0716-0004, Interim Guidance on Initial Conference Procedures for Liability, Penalty Appeals and Innocent Spouse Cases, which was issued July 6, 2016, and signed by John V. Cardone.

Audience

Appeals

Effective Date

(10-01-2016)


John V. Cardone
Director, Policy, Quality and Case Support

8.2.1.1  (08-11-2015)
Introduction to Pre-90-Day Income Tax Cases

  1. This section covers processing a pre-90-day income tax case, also referred to as a non-docketed case, from the time it gets to Appeals until the time the case is closed. A pre-90-day case is a protested case on which a notice of deficiency or other final determination letter has not been issued.

  2. Many of the procedures in this section are used on every case regardless of the type tax involved; however, certain cases also require special procedures. These special procedures are covered in separate IRM sections containing information solely applicable to that type case.

  3. Special procedures take precedence over the general instructions found in this section. The following is a list of the cases and the IRM subsections where the special procedures are located:

    1. Estate and Gift Tax - IRM 8.7.4

    2. Excise Tax - IRC 8.7.10

    3. Employment Tax - IRM 4.23.16

    4. Bankruptcy - IRM 8.7.6

    5. Claims and Overassessments - IRM 8.7.7

    6. Appeals Tax Exempt and Government Entities - IRM 8.7.8

    7. Joint Committee - IRM 8.7.9

    8. Transferee/Transferor - IRM 8.7.5

    9. Appeals Team Cases - IRM 8.7.11

    10. Innocent Spouse Cases - IRM 25.15.12

    11. TEFRA - IRM 8.19.6

  4. These procedures are general in nature and are intended for Appeals Technical Employees (ATEs). The definition of an ATE can be found in IRM 8.1.1-1, Common Terms Used in Appeals.

  5. References to Examination include the Small Business and Self Employed (SB/SE), Large Business Industry (LB&I) and Tax Exempt and Government Entities (TE/GE) groups.

8.2.1.2  (06-28-2012)
Written Protests and "Small Case Requests" in Unagreed Cases

  1. See Pub 5 , Your Appeal Rights and How To Prepare a Protest If You Don’t Agree, for information on written protests and "Small Case Requests" in unagreed cases.

8.2.1.3  (08-11-2015)
Receipt of a Pre-90-Day Case

  1. For Account and Processing Support (APS) procedures regarding receipt of returns and administrative files, refer to IRM 8.20.5.3.1, Receiving Returns and Administrative Files.

8.2.1.4  (10-01-2016)
Receipt of New Assignment by an Appeals Technical Employee (ATE)

  1. Account and Processing Support (APS) controls the case on ACDS. Refer to IRM 8.20.5, Appeals Case Processing Manual, Appeals Centralized Database System (ACDS), for a description of the ACDS fields.

  2. Effective July 6, 2016:

    1. The Uniform Acknowledgement Letter (UAL) is no longer required and Letter 4141 will be made obsolete.

      Note:

      Therefore, the ATM or delegate will no longer issue Letter 4141, Uniform Acknowledgement Letter (UAL), (or any other substitute letter) within 30 days of receipt for nondocketed cases or upon assignment for docketed cases, and the assigned ATE is no longer required to verify the issuance of the UAL.

    2. The assigned ATE is no longer required to validate the statute within 5 business days from receipt of the case (i.e., date of CR/NR).

      Exception:

      For TEFRA key cases, the 5 workday time frame for validation by the TEFRA ATE, done prior to assignment of the case to the assigned ATE, shall remain in effect. This guidance shall extend the statute verification time frame provided in IRM 8.21.6.2.2, Appeals Technical Employees (ATE) Statute Responsibility for TEFRA Key Cases, to 45 calendar days for the assigned ATE only.

  3. The ATE will take the following actions within 45 calendar days of receipt of a newly assigned and/or transferred case (i.e., date of CR/NR), except as stated in IRM 8.2.1.4 (5) and IRM 8.2.1.4 (6), below:

    Step Action
    1. Complete the statute verification. Ensure there are at least 365 days (270 days in estate tax cases or section 6206 cases) remaining on the statute when the case was received by Appeals before accepting the case. See IRM 8.21, Appeals Statute Responsibility, for detailed procedures on statutes and consents.

    Exception:

    There must be at least 180 days remaining on the statute of limitations when the case is received in Appeals when the originating function returns a case that was previously returned to them for consideration of new information or a new issue.

    2. Validate all ACDS critical data fields (CDFs). See IRM 8.10.3, Appeals Inventory Validation Process, for more information on the ATE Assignment Validation of CDFs.
    3. Determine whether the case is ready for Appeals’ consideration. See IRM 8.2.1.5 for more information on grounds for returning a case when it is not ready for Appeals’ consideration.

    Note:

    If the ATE determines that a conference is not appropriate, the ATE will not send an initial contact letter. Instead, go to IRM 8.2.1.4 (5), below.

    4. Make initial contact.

    For both non-docketed and docketed cases, the ATE may make initial contact by contact letter or by telephone in lieu of using a contact letter. If the ATE makes initial contact by telephone, during such contact, the ATE must ensure that the substance of the contact letter is discussed with the taxpayer and documented in CARATS. If the ATE makes initial contact by letter:
    • For non-docketed cases, issue contact Letter 5157, Nondocketed Acknowledgement & Conference, or another approved contact letter.

    • For docketed cases, issue contact Letter 3808, Docketed Acknowledgement and Conference (To Petitioner), or Letter 3808-A, Docketed Acknowledgement and Conference (To Counsel of Record).

      Note:

      Letter 5157, Letter 3808, and Letter 3808-A are located in the Acknowledgement category of APGOLF, and meet all of the UAL requirements currently specified in the IRM.

    5. Manually enter CO-OT in CARATS, and document:
    1. Which letter was sent

    2. To whom

    3. The attachments (if any)

    Note:

    The ATE will no longer be required to manually make the CO-OT entry after ACDS is programmed to systemically create a CARATS entry when the ATE issues the initial contact letter.

    6. Attempt to settle the case based on factual hazards when the case submitted by the originating function is not fully developed and the taxpayer has provided no new information or evidence. A fully developed case has all pertinent evidence well documented with an easy to follow audit trail. Generally, the case contains the evidence needed to support the adjustments proposed in the RAR.
  4. Recording the enclosures sent with the initial contact letter serves as the employee's written explanation of the procedures described in the publications or notices to the taxpayer. For example:

    By enclosing You are explaining -
    Notice 1016, How to Stop Interest on Your Account How to stop interest on a proposed or potential liability.
    Publication 4227, Welcome to Appeals The Appeals process.
    Publication 4167, Introduction to Alternative Dispute Resolution Post Appeals mediation, fast track settlement, fast track mediation, early referral and arbitration.
    Publication 4576, Orientation to the Penalty Appeals Process The Appeals process, right to representation, and payment options for penalty appeals cases.
  5. If the ATE determines that a conference is not appropriate, in lieu of sending Letter 5157, Letter 3808, Letter 3808-A, or another contact letter, within a reasonable time frame, the ATE will:

    • For a premature referral, prepare Letter 5209, Appeals Referral to Examination, secure any additional documentation (if applicable), and submit the case to the ATM for closing. The ATE will document this action in CARATS by inputting AC-OD.

    • For a full concession case, notify the taxpayer/representative (if appropriate), prepare the appropriate closing letter/documents, and submit the case to the ATM for closing. The ATE will document this action in CARATS by inputting DM.

  6. Appeals Team Managers (ATM) will be reasonable in extending the contact time frame if circumstances (e.g. leave, workload, case complexity or other priorities) prevent the ATE from meeting them. If the ATM extends the time frame, the ATE will document this decision and the agreed upon timeframe in the CAR for the case. The statute verification time frame shall not be extended beyond 45 calendar days. If the contact time frame is extended beyond 75 calendar days, then the ATM will contact the taxpayer/representative by correspondence providing a status of the case and to whom the case is assigned.

8.2.1.5  (08-11-2015)
Returning a Case to Examination - ATE

  1. Appeals will not return cases to Examination for further development.

  2. The following circumstances, which are not all-inclusive, are grounds for returning a case:

    1. Missing protest, or the protest, when required, fails to set forth the taxpayer’s position, lacks detail, or fails to meet the requirements of Pub 5;

    2. Contrary to Service practice, the case is a reopening of a previously closed case as set forth in Rev. Proc. 2005-32, 2005-23 IRB 1206;

    3. Some action must be taken or some event must occur before Appeals can adequately consider the case. For example, completion of Headquarters consideration of some aspect of the case (e.g., valuation of art work when a mandatory referral is required), or required coordination with appropriate offices within Counsel, or Criminal Investigation (CI), or a rebuttal to the taxpayer’s protest on large team cases;

    4. There is a failure to secure timely consents extending the period of limitation for assessment unless the statute is open for other reasons, e.g., fraud, IRC 6501(e);

    5. The case involves claims for abatement of excise tax, employment tax, or trust fund recovery penalty which are not deemed meritorious by the Service;

    6. There is failure to comply with significant requirements of the IRM, the case should have been held in suspense in Examination pending clarification of Service position; required information was not included in the report or case file, there is an open CI freeze (i.e., -Z or Z- freeze due to an unreversed TC 914, 916, or 918 on the tax module), etc.;

    7. Technical advice was pending at the time of the referral;

    8. Appeals discovers potential fraud, malfeasance or misrepresentation of a material fact;

    9. The taxpayer provides new information or evidence;

    10. The taxpayer raises new issue(s) that the originating function has not considered.

8.2.1.6  (10-01-2012)
Preliminary Review of a Case - ATE

  1. Close unnecessary original returns or files discovered during the preliminary review to the campus or the originating office, as appropriate.

  2. During the preliminary review, the ATE identifies all Compliance Coordinated Issues (CCI), Appeals Coordinated Issues (ACI), Emerging Issues (EI) and International Issues found in IRM 8.7.3, Technical and Procedural Guidelines. It is the responsibility of the ATE to prepare and forward a referral, through their ATM, to Specialty Operations on Form 13381 when the case has any of the following issues:

    1. International Issues (including International Penalty issues)

    2. Compliance Coordinated Issues (CCI)

    3. Appeals Coordinated Issues (ACI) (including category of case)

    4. Emerging Issues (EI)

  3. Referrals of E&G valuation issues with tax of $10 million or more are made in accordance with IRM 8.18.1, Valuation Assistance Procedures.

  4. Refer all TEGE issues, Exempt Plans (EP) issues, Exempt Organizations (EO) issues, Tax Exempt Bonds (TEB) issues and Government Entities (GE) issues, to the Appeals TEGE Team Manager in accordance with IRM 8.7.8, Tax Exempt and Government Entities (TE/GE) Cases.

8.2.1.7  (10-01-2016)
Conducting the Conference - ATE

  1. Appeals conference techniques are described in IRM 8.6.1Conference and Settlement Practices - Conference and Issue Resolution.

8.2.1.7.1  (10-01-2016)
Assistance from Counsel in Pre-90-Day Cases

  1. Appeals may request informal assistance from Counsel when advice is needed on the hazards of litigation, interpretation of the law, and/or evaluation of the evidence. Counsel’s assistance is provided through informal arrangements between Counsel and Appeals. This informal procedure is not intended to take the place of, or alter in any way, Technical Advice procedures.

  2. While a case is in Appeals, Appeals has the sole authority to resolve the case through settlement and when requested, Counsel acts solely as an advisor and/or consultant. . See Rev. Proc. 2016-22.

8.2.1.7.2  (08-11-2015)
Verification of New Material or Request for Further Development - ATE

  1. Appeals hearing officers are not investigators or examining officers and may not act as such and will not take investigative actions or perform analysis of new information or new issues. Conduct the preliminary review of a case as soon as possible to determine whether the case must be returned to the originating function. While taxpayers may present new information or evidence to Appeals, Appeals usually must return the case to the originating function to examine the new information and make a determination.

  2. New information is defined in IRM 8.6.1.6.5, Taxpayer Provides New Information. If the taxpayer raises a new issue or presents new information to Appeals, and that information relates to an issue in controversy, see IRM 8.6.1.6.4, Taxpayer Raises New Issue, and IRM 8.6.1.6.5, Taxpayer Provides New Information, for more information.

  3. Follow the procedures in IRM 8.6.1.6.7, Jurisdiction Released, to return a case to the originating function.

  4. If Appeals determines that the taxpayer is raising a relevant new theory, or alternative legal argument, which requires further development, retain jurisdiction of the case and share the information with the originating function for review and comment. See IRM 8.6.1.6.6, Taxpayer Raises New Theory or Alternative Legal Argument

  5. When the taxpayer offers to make payment of additional tax liability for slush fund or improper payment deductions, or reveals their existence to Appeals officials for the first time, discontinue Appeals consideration of the case and return the case to Compliance for appropriate action.

8.2.1.8  (10-01-2016)
Requesting Work from Tax Computation Specialist

  1. Generate Form 3608, Request for Tax Computation Specialist (TCS) Service, from APGolf and prepare as follows:

    1. Boxes 1 through 6 - Populated with information from ACDS, when available

    2. Box 7 - Mandatory Entry
      For Other include a brief description of the type of work requested

    3. Box 8 - Complete only when Priority Consideration is requested

    4. Box 9 - Complete as applicable

    5. Box 10 - Identify the disposition of the case/issue

    6. Box 11 - The AO may add the name of the prior TCS assigned to the case if any.

    7. Box 12 - Complete only if there are supplemental instructions to the Schedule of Adjustments

    8. Box 13 - Select the ATCTM using the drop down box “Select TCS Manager to send the request to” - Use the appropriate TCS assignment grid to select the TCS Manager: TCS Assignment Grids are located on the TCS website under AO & ATM Resources. The TCS website can be accessed from the following link: http://appeals.web.irs.gov/taxcomput/

  2. After the Form 3608 is prepared, the ATE should select the “Submit Request” button, which automatically sends the request to the ATCTM and up loads the request into the Appeals Officer’s CAR on ACDS as a case attachment.

    Note:

    Before the TCS Customer selects an ATCTM the button is labeled “Generate Letter/Form” and after the ATCTM is selected the button label changes to “Submit Request”.

  3. Upload the Schedule of Adjustments to the taxpayer CAR in ACDS as a case attachment.

  4. ATCTM receives the case to assign in the ACDS notification screen and assigns the case to a TCS.

  5. Immediately upon TCS assignment, the TCS Appeals customer, assigned TCS and ATCTM will receive a system generated notification email with the contact information of the TCS assigned to the case.

  6. The ATE can upload any additional information needed by the TCS (e.g. RAR & tax returns) to the CAR in ACDS, or as an alternate, may email or E-fax it to the assigned TCS.

  7. When the ATE fully sustains Compliance’s determination, settlement computations are not required; however, IRC 6404(g),Form 2285, and/or May/Sequa worksheets may be required if certain interest suspension rules are applicable. Also Form 5403 is required to be completed by the ATE or TCS. Please let TCS know if you need a Form 5403 along with the special interest worksheet.

    1. IRC 6404(g) - This interest suspension period applies to timely filed Forms 1040 if the additional tax liability is not yet assessed.  An IRC 6404(g) worksheet must be prepared for each individual income tax period (MFT 30 or MFT 31) if applicable. IRC 6404(g)worksheet is available at http://appeals.web.irs.gov/taxcomput/Default.htm

    2. Rev. Rul.99-40 May/Sequa – This interest suspension period may apply if Transaction Codes (TC) 836 or 830 are posted on the taxpayer’s account and there is a current or prior deficiency. A May/Sequa worksheet must be prepared for each applicable income tax period.

    3. Form 2285, Concurrent Determinations of Deficiencies (Restricted Interest Worksheet), is required to be prepared when a case involves restricted interest due to loss or credit carrybacks.

    ATEs must recognize the potential for these conditions; however, they may request TCS assistance to make this determination. If applicable, the required worksheets must be prepared and included in the closed case file to APS for their use in preparing accurate interest calculations. Field ATEs must submit a TCS work request if worksheets are required. Follow the steps in (1) above to submit a TCS work request.

    Note:

    All ATEs must notate on Form 5402 that IRC 6404(g) and/or May/Sequa apply.

8.2.1.9  (10-01-2016)
Reaching a Conclusion in the Case

  1. This subsection covers actions taken by an ATE after carefully considering and discussing facts, law and arguments of the case with the taxpayer and either reaching a basis of settlement or determining there is no mutually acceptable basis for settlement.

  2. When the case is agreed, discuss the conclusion with the taxpayer to ensure they have a complete understanding of the effects of the settlement.

    For example, where allowance of a net operating loss deduction reduces or eliminates a potential deficiency, advise the taxpayer that interest will be assessed on the potential deficiency. Where desirable or advisable the taxpayer may also be advised in writing.

  3. When the case is unagreed, explain the following to the taxpayer.

    • the evaluation of the case

    • additional action to be taken

    • taxpayer's rights

  4. Unagreed case dispositions generally fall into three categories.

    1. Pre-90-day case disposition with a deficiency (defined in IRC 6211). A statutory notice of deficiency is issued to dispose of the income tax (subtitle A), estate and gift tax (subtitle B), or excise tax (chapter 41, 42, 43 or 44 of subtitle D) case. The tax can be litigated in Tax Court.

    2. Pre-90-day case disposition without a deficiency. A statutory notice of deficiency is not issued to dispose of the case because there is nothing (no deficiency) to litigate in Tax Court.

    3. Protested excise tax (subtitle D other than chapter 41, 42, 43 or 44) or protested employment tax (subtitle C) case disposition. A statutory notice of deficiency is not issued in order to dispose of the case because these taxes cannot be litigated in Tax Court. See IRC 4.23.16.

      Note:

      See IRM 8.17.4, Settlement Computations and Statutory Notices of Deficiency, Notices of Deficiency, for details on preparing a statutory notice of deficiency in an unagreed case.

  5. The conclusion in the case is set forth in Form 5402, Appeals Transmittal and Case Memorandum, accompanied by a settlement computation (sometimes called an audit statement). Preparation of an Appeals Case Memorandum (ACM) is discussed in IRM 8.6.2, Conference and Settlement Procedures, Appeals Case Memo Procedures, and preparation of a settlement computation is discussed in IRM 8.17.2, General Settlement and Rule 155 Computations.

  6. When agreement is reached, the ATE will send an agreement letter, i.e. Letter 969 , and enclose an agreement form and in most instances, the settlement computation. When the agreement letter used does not contain a stated interest amount, there is no requirement to include an interest computation. However if the agreement letter used, i.e. Letter 969 w/Interest, includes a stated interest amount, a detailed computation of interest must be included.

  7. IRM 8.6.4, Conference and Settlement Procedures, Reaching Settlement and Securing an Appeals Agreement Form, includes additional information concerning soliciting agreement forms.

  8. Actively encourage the taxpayer to pay any deficiency in full. If the taxpayer indicates they are unable to pay, discuss alternatives to full payment such as installment agreements or offers-in-compromise. Point taxpayers to IRS Direct Pay tool available at IRS.gov/directpay, which is a free online tool which allows individuals to securely pay their income tax directly from checking or savings account without any fees or pre-registration. Direct Pay is available 24 hours a day, seven days a week. Any taxpayer who uses the tool receives instant confirmation that their payment was submitted. Also if they prefer an Installment Agreement then direct them to the Service’s Online Payment Agreement application on IRS.gov.

  9. Prepare the appropriate closing letter to be sent out after the reviewing official accepts the settlement proposal.

    Note:

    See subsections below for information on acceptance and rejection of the settlement proposal by the reviewing officials

    .

  10. Form and pattern letters for use as agreement letters and closing letters are contained in ACDS under APGolf (Appeals Generator of Letters and Forms).

8.2.1.9.1  (11-14-2008)
Reviewing Official's Acceptance of Settlement Proposal

  1. If the taxpayer disagrees with a settlement that is approved by the ATM or other reviewing official the taxpayer is not entitled to a conference with the reviewing official.

8.2.1.9.2  (06-28-2012)
Reviewing Official's Rejection of Settlement Proposal

  1. When a reviewing official rejects a settlement proposal and determines it should be more favorable to the government, the reviewing official will discuss the case with the ATE. The discussion will include the facts, law and argument the ATE considered in reaching his/her conclusion, and the position of the reviewing official. In these instances, the taxpayer has a right to a conference with either the ATE or the reviewing official.

    Note:

    In instances where the reviewing official rejects the ATE's settlement proposal and determines it should be more favorable to the taxpayer, the taxpayer is not entitled to a conference; however, a conference may be granted in order to close the case.

8.2.1.9.2.1  (06-28-2012)
Reviewing Official Rejects Settlement Proposal - ATE Accepts

  1. When the ATE accepts the reviewing official's position or when a compromise is reached, the ATE will contact the taxpayer to discuss the status of the case, the reason(s) for the change in the settlement, and their right to a conference with the ATE or the reviewing official.

  2. If requested, the ATE will hold the conference and secures all revised tax computations and agreement documents reflecting the new settlement.

  3. The ATE will maintain inventory control of the case including monitoring the statute, preparing the case for final closing, etc.

  4. The ATE will prepare a revised ACM with the revised settlement and processes the case through normal closing procedures.

8.2.1.9.2.2  (06-28-2012)
Reviewing Official Rejects Settlement Proposal - ATE Does Not Accept

  1. If the ATE does not accept the reviewing official's position, the ATE will prepare a rebuttal against making the change, that clearly states the ATE's position.

  2. The reviewing official will:

    1. contact the taxpayer, advise them of the right to a conference, and grants and holds the conference once a written request is received

    2. discuss the new settlement and the outcome of any conference with the ATE

    3. prepare an addendum to the ATE's original ACM with the facts, law and argument detailing the new settlement position, the reason(s) why the case was rejected and the outcome of the conference

    4. make the appropriate entries of his/her actions on the ATE's Case Activity Record.

  3. The ATE will secure all required tax computations and agreement documents reflecting the new settlement position.

  4. The ATE will maintain inventory control of the case at all times, including monitoring the statute, preparing the case for final closure, etc.

8.2.1.10  (10-01-2016)
Closing the Case to APS

  1. The ATE will assemble the administrative file in chronological order and include all documents necessary for APS to close the case.

  2. For detailed information covering the procedures taken by the ATM when the case is submitted for closing by the AO, see IRM 1.4.28, Resource Guide for Managers.

  3. After the ATM completes the "Closing Cases" on ACDS and inputs an ACAP date, the case information automatically goes to the PEAS Unassigned box.

  4. The ATM then submits the case to APS.

8.2.1.10.1  (06-28-2012)
Expedite Processing for Certain Large Dollar Cases

  1. Appeals will expedite the closing of a certain "agreed and unpaid deficiency" or overpayment case, if the case meets the "large dollar" criteria described in IRM 4.4.18, Large Dollar Cases. This guidance does not apply to a deficiency and/or overpayment case that requires Joint Committee Review. See IRM 8.7.9.2.

  2. A case meets the large dollar criteria, if the total amount of a period's "agreed and unpaid deficiency" plus penalties (or overpayment plus penalties) exceeds $100,000.

  3. Expedite processing is required to accomplish the following:

    1. To avoid the unnecessary accrual of overpayment interest under IRC 6611 for large dollar cases.

    2. To avoid the unnecessary suspension of deficiency interest in respect to "large dollar" income, estate, gift, and/or certain excise taxes. IRC 6601(c) requires an interest suspension if notice and demand is not made within 30 days of the filing of a waiver of restriction on the assessment.

      Note:

      Interest is suspended if notice and demand is not made within 30 days of IRS' receipt of a Form 870 type agreement. If the case involves a Form 870-AD type agreement, interest is suspended if notice and demand is not made within 30 days of the execution (by the ATM or ATCL) of the special agreement form. See IRM 8.6.4.3. Agreement Forms Secured in Appeals Cases. Also, see IRM 8.7.10 to identify the excise taxes that require deficiency procedures.

  4. The following procedures apply for expediting certain "large dollar" cases:

    1. The ATE will identify and "flag" the case for expedite closing, by attaching any "expedite sticker, note, or tag" that contains a notation similar to the following:" $100,000 Agreed and Unpaid Deficiency" and/or "$100,000 overpayment" . The ATE will include a similar notation on Form 5402. The AO will close the case within five (5) calendar days of Appeals' receipt of the signed waiver form. The ATE will close the case within ten (10) calendar days of the receipt of a Form 870 type agreement or within 10 days of the execution of a Form 870-AD type special agreement. The ATE should include an explanation for the delay (if any) on the case activity record (CAR).

    2. The ATM will ensure the case is properly "flagged" for expedite processing. The ATM will close the case to APS within 10 days of the Appeals' receipt of the waiver form.

8.2.1.10.2  (06-28-2012)
Closing Cases with Specialized Issues or Procedures

  1. IRM 8.20.7, General Case Closings Requiring Special Actions, covers some of the specialized issues that may arise when closing cases. The following is a list of those issues along with a link:

    1. Carrybacks - Deficiency from Adjustment, IRM 8.20.7.3

    2. Conversions, IRM 8.20.7.4

    3. Department of Justice Cases, IRM 8.20.7.5

    4. Earned Income Credit, IRM 8.20.7.6

    5. Non-filer Returns Closed by Appeals - Delinquent Returns; Substitute for Return Cases, IRM 8.20.7.7

    6. Non-Master File Processing, IRM 8.20.7.8

    7. Non-petitioning Spouse - Assessed on MFT; Assessed on NMF; NOT Assessed Previously, IRM 8.4.1.32

    8. Premature Referrals or Improper Referrals - Jurisdiction Released; Jurisdiction Not Released, IRM 8.20.7.10

    9. Transfer of Work Units Between Areas, IRM 8.20.7.11

8.2.1.11  (08-11-2015)
Preparing the Case to Close to APS

  1. This section contains the procedures for the ATE to prepare the case for closing to APS.

  2. Arrange the administrative file to be sure it includes all returns, documents, and other papers which were in the case file when it was received plus any returns and papers added while Appeals had the case. Remove all documents from the left side of the case file since that is usually torn from the file once it gets to the Campus.

  3. Arrange the contents chronologically (date order).

  4. Ensure there are sufficient copies of the following items in the file (or uploaded to ACDS as a case file attachment, as directed):

    • Form 5402 or other transmittal

    • Closing letter

    • Envelopes for taxpayer and POA (if applicable)

  5. Place all tax returns in the administrative file.

8.2.1.12  (08-11-2015)
Statute Open with Form 872-A

  1. If the statute is open under a Form 872-Aand the return is closed no-change, prepare a Form 872-T for APS to send to the taxpayer with the closing letter.

    Caution:

    Exercise caution prior to sending a Form 872-T on a no change case. Carryback years with statutes controlled by the originating year with Form 872-A must be protected or assessed. The statute date for any carryback returns open under an originating year Form 872-A is 90 days from the date Form 872-T is mailed.


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