4.71.14 EP Mandatory Review 4.71.14.1 Program Scope and Objectives 4.71.14.1.1 Background 4.71.14.1.2 Program Controls 4.71.14.1.3 Acronyms, Abbreviations, Forms and Pubs 4.71.14.1.4 Related Resources 4.71.14.1.5 Overview of EP Mandatory Review 4.71.14.2 Staffing 4.71.14.3 Safeguarding Personally Identifiable Information (PII) 4.71.14.4 Mandatory Review Duties 4.71.14.5 Cases Subject to Review 4.71.14.5.1 Definitions 4.71.14.6 Triage Review 4.71.14.7 Technical Case Review 4.71.14.7.1 Processing Unagreed Cases 4.71.14.7.1.1 Picking Up Additional Years 4.71.14.7.1.1.1 Substitute for Return Procedures for Forms 5330, 5329, or 990-T 4.71.14.7.1.2 Special Notification Procedures 4.71.14.7.1.2.1 Referrals to DOL 4.71.14.7.1.3 30-Day Letter Procedures 4.71.14.7.1.4 Cases to Appeals 4.71.14.7.1.4.1 Cases Returned From Appeals 4.71.14.7.1.5 90-Day Letter Procedures 4.71.14.7.1.5.1 Transfer to 90-Day Reviewer 4.71.14.7.1.5.2 Statutory Notice of Deficiency (SNOD) 4.71.14.7.1.5.3 Issuance of 90-Day Letter Packages 4.71.14.7.1.5.4 Statute Considerations 4.71.14.7.1.5.5 Rescinding Statutory Notices of Deficiency 4.71.14.7.1.5.5.1 Criteria for Rescinding 4.71.14.7.1.5.5.2 Statute of Limitations Considerations Before Rescinding Notice 4.71.14.7.1.5.5.3 Agreement to Rescind Notice of Deficiency 4.71.14.7.2 Non-Bank Trustee Investigation Procedures 4.71.14.8 Case Closing 4.71.14.8.1 Completing the RCCMS Closing Record 4.71.14.8.2 Disposal Codes 4.71.14.8.3 Completing the RCCMS Closing Record with Assessments or Adjustments 4.71.14.8.3.1 IRC 6621(c) - Additional 2% Interest 4.71.14.8.4 Completion of the Optional Form 5599 4.71.14.9 Agreed Cases Reviewed Per Management Request 4.71.14.10 Form 5456, Reviewer’s Memorandum 4.71.14.11 Checksheet for Employee Plans Compliance Activities (CECA Checksheets) 4.71.14.12 Monthly Reports Part 4. Examining Process Chapter 71. Employee Plans Examination of Returns Section 14. EP Mandatory Review 4.71.14 EP Mandatory Review Manual Transmittal August 26, 2021 Purpose (1) This transmits revised IRM 4.71.14, Employee Plans Examination of Returns, EP Mandatory Review. Background IRM 4.71.14 contains procedures for EP Mandatory Review staff to follow when reviewing and processing cases sent to EP Mandatory Review. Material Changes (1) Modified IRM 4.71.14.1.2 (2) to update the Taxpayer Bill of Rights (TBOR) content based on guidance from the Division Counsel/Associate Chief Counsel (National Taxpayer Advocate Program) and Branch 3 of the Associate Chief Counsel. (Procedure and Administration). (2) Updated IRM 4.71.14.1.3, Acronyms, Abbreviations, Forms and Pubs. (3) Added paragraph (6) to IRM 4.71.14.1.5, Overview of Mandatory Review, to incorporate the provisions of the March 20, 2019, interim Guidance Memorandum (IGM) TE/GE-25-0319-0001 with the subject line, Guidance for Cases Affected by a Federally Declared Disaster, or Terrorist or Military Action, from the Commissioner, TEGE. (4) Removed reference to obsoleted Form 5772-A from IRM 4.71.14.7.1.3(13) to incorporate the provisions of the December 14, 2020, IGM TEGE-04-1220-0026 with the subject line, Requirement to use Form 5773-A (Rev. 12-2020), and eliminating required use of Form 5772-A, from the Director, Employee Plans Examinations. (5) Added additional mandatory review duties listed in IRM 4.71.14.4 (6) Added a note to IRM 4.71.14.6(2) to notify that the statute of limitation for SFRs should be updated to alpha code "EE" plus six years from the date the TC 150 posted, other than for IRC 4975 assessments. (7) Added a note to IRM 4.71.14.6(4) requiring that triage notes saved in the RCCMS Office Documents folder are named "2.5 Triage Notes" . (8) Updated IRM 4.71.14.7 to reflect current processes. (9) Added a note to IRM 4.71.14.7.1.2.1(4) requiring that Form 6212-B be used to make a referral to DOL. (10) Revised and renamed IRM 4.71.14.7.1.4, Cases to Appeal to provide additional processing guidance and to incorporate the use of Letter 5918, TE/GE Protest Received Rebuttal/Transfer to Appeals as specified by the February 2, 2021, IGM TEGE-04-0221-0003 with the subject line, Interim Guidance on Letter Consolidation, from the Acting Deputy Commissioner, Tax Exempt and Government Entities. (11) Added notes to IRM 4.71.14.7.1.5(5) and 4.71.14.7.1.5(6) to direct reviewers to only issue one 90-Day letter for the Form 1040 when also assessing 4973, 4974 and 72(t) excise taxes. (12) Modified IRM 4.71.7.1.5(16) to provide instructions for forwarding a case to Counsel. (13) Modified IRM 4.71.7.1.5(32) to provide additional instructions for closing cases. (14) Modified IRM 4.71.7.1.5.1 to provide additional instructions for the 90-day letter reviewer. (15) Relocated Non-Bank Trustee Investigation Procedures to IRM 4.71.14.7.2 and added additional guidance. (16) Revised and renamed 4.71.14.8, Case Closing, to provide more detailed instructions to complete the RCCMS tabs. (17) Omitted the term "CAP Coordinator" from IRM 4.71.14.7.13(14). (18) Revised IRM 4.71.14.10 to omit the paper document requirement and to provide instructions for returning a Nonbank Trustee Investigation (NBTI) back to the group with a reviewer’s memorandum. (19) Revised IRM 4.71.14 to incorporate the provisions of the July 28, 2020, IGM TEGE-04-0720-0014 with the subject line, Interim Guidance on Fully Electronic (100% Paperless) Cases, from the Deputy Commissioner, TEGE. (20) Revised IRM 4.71.14 to incorporate the provisions of the July 31, 2020, IGM TEGE -04-0720-0018 with the subject line, Elimination of Requirement to Use Paper Form 895/895-EP, from the Deputy Commissioner, TEGE. (21) Revised IRM 4.71.14 to incorporate the provisions of the September 22, 2020, IGM TEGE-04-0920-0021 with the subject line, Interim Guidance on Reporting Compliance Case Management System (RCCMS) Electronic Case Policy, from the Deputy Commissioner, TEGE. (22) Revised IRM 4.71.14 to incorporate the provisions of the September 28, 2020, IGM TEGE-04-0920-0024 with the subject line, Revisions to Activity, Disposal, Source and Status Codes, from the Deputy Commissioner, TEGE. (23) Revised IRM 4.71.14 to incorporate the provisions of the November 23, 2020, IGM TEGE-04-0920-0025 with the subject line, Location of IRM Exhibits for EP Examination Employees, from the Director, EP Examinations. (24) Deleted references to the obsoleted Form 12209 throughout. (25) Deleted the requirement to complete Form 3198-A throughout. (26) Reorganized the information throughout for clarity. (27) The terms "examiner" or "examiners" replaces "agent" or "agents" . The terms "examination," "examining," or "examined" replaces "audit," "auditing" or "audited" where appropriate, in compliance with the Plain Language Act. Generally, official titles and designations do not reflect this change. (28) Other minor editorial changes were made throughout this IRM for: Updating organizational terms, titles, and acronyms. Updating or correcting references and citations, added links to references. Updating for changes in disposal codes and letter renumbering. Updating for broken links. Other changes for Plan Language (the Plain Writing Act of 2010). Effect on Other Documents This supersedes IRM 4.71.14 dated December 17, 2019. This incorporates the following interim guidance memoranda: TE/GE-25-0319-0001, Guidance for Cases Affected by a Federally Declared Disaster, or Terrorist or Military Action TEGE-04-1220-0026, Requirement to use Form 5773-A (Rev. 12-2020), and eliminating required use of Form 5772-A TEGE-04-0221-0003, Interim Guidance on Letter Consolidation TEGE-04-0720-0014, Interim Guidance on Fully Electronic (100% Paperless) Cases TEGE-04-0720-0018, Elimination of Requirement to Use Paper Form 895/895-EP TEGE-04-0920-0021, Interim Guidance on Reporting Compliance Case Management System (RCCMS) Electronic Case Policy TEGE-04-0920-0024, Revisions to Activity, Disposal, Source and Status Codes TEGE-04-0920-0025, Location of IRM Exhibits for EP Examination Employees Audience Tax Exempt and Government Entities Employee Plans Effective Date (08-26-2021) Eric D. Slack Director, Employee Plans Tax Exempt and Government Entities 4.71.14.1 (12-20-2018) Program Scope and Objectives Purpose: IRM 4.71.14, Employee Plans Examination of Returns, EP Mandatory Review, explains essential information for Mandatory Review’s (MR) reviewers, group manager and support staff on procedures for processing a variety of cases EP exam field groups submit to MR. MR gives constructive feedback on cases reviewed and helps field examiners and their managers as warranted. Audience: EP Examinations employees. Program Owner: Director, EP Examinations sets the program for the EP examination program. Program Authority: EP Examinations’ authority to conduct examinations, resolve issues and determine tax liability is derived from Title 26, Internal Revenue Code, Subtitle F – Procedure and Administration, which includes but is not limited to: IRC section 7602 - Examination of books and witnesses, which falls under Chapter 78 - Discovery of Liability and Enforcement of Title. Note: IRC 7602 provides examiners with the authority to: *Examine any books, papers, records, or other data necessary to complete an examination. * Take testimony under oath to get additional information needed. * Issue summons for information necessary to complete an examination. * Ask about any offense connected to the administering or enforcing of the Internal Revenue laws. IRC section 6201- Assessment authority, which falls under Chapter 63 - Assessment. Note: EP Examinations’ authority to resolve issues is derived from its authority to make determinations of tax liability under IRC 6201. This IRM section is authored by EP Mandatory Review. For questions, information, or suggestions, contact the Manager, EP Mandatory Review 4.71.14.1.1 (12-17-2019) Background EP Examinations determines if a retirement plan is qualified under IRC 401 and the underlying regulations, and therefore, exempt from tax under IRC 501. EP’s examination program’s primary objective is regulatory, emphasizing continued qualification of employee benefit plans (Policy Statement 4-119) EP selects and examines returns to: Promote the highest degree of voluntary compliance with the tax laws on plan qualification. Determine qualified plans’ extent of compliance and the causes of noncompliance with the tax laws. Determine whether these plans meet the applicable qualification requirements in operation. Under Policy Statement 4-117, EP examiners and managers: Have broad authority to consider and weigh conflicting information, data, and opinions. Use professional judgement when applying examination standards to fact finding and application of tax law so as to determine the correct tax liability. Exercise authority to get the greatest number of agreed tax determinations without sacrificing quality or integrity. Resolve tax differences at the lowest level. All examinations are done according to Policy Statement 1-236, Fairness and Integrity in Enforcement Selection. 4.71.14.1.2 (08-26-2021) Program Controls Two review groups make sure examiners conduct examinations in accordance with technical, procedural, and administrative requirements: Mandatory Review, see IRM 4.71.14, Employee Plans Examination of Returns, EP Mandatory Review. Special Review, see IRM 4.70.7, Special Review (SR) and Tax Exempt Quality Measurement System (TEQMS) Procedures. Note: Special Review is within the Compliance, Planning and Classification (CP&C) function which is under Government Entities (GE) Shared Services (SS). The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see Taxpayer Bill of Rights. The IRS is fully committed to protecting the privacy rights of taxpayers and employees. Privacy laws are included in the IRC, the Privacy Act of 1974, the Freedom of Information Act, and IRS policies and practices. For more information about these laws, visit the IRS Electronic Freedom of Information Act Reading Room. For questions about privacy, email *Privacy. For question about disclosure, email *Disclosure. 4.71.14.1.3 (08-26-2021) Acronyms, Abbreviations, Forms and Pubs This manual uses the acronyms, abbreviations and references the forms as listed in the following two tables: Acronyms and Abbreviations Acronym/Abbreviations Definition ATAT Abusive Transaction Avoidance Transaction CECA Checksheet for EP Compliance Activities DOL Department of Labor DO Delegation Order EBSA Employee Benefits Security Administration EEFax Enterprise Electronic Facsimile EFU Examination Functional Unit EP Employee Plans EPCRS Employee Plans Compliance Resolution System EPCU Employee Plans Compliance Unit ETS Employee Time System HCE Highly Compensated Employee IDL Individually Designed Letter IRC Internal Revenue Code IRM Internal Revenue Manual IRS Internal Revenue Service MFT Master File Tax (Account) NBTI Non-Bank Trustee Investigation NOA Notice of Approval NOC Notice of Change NRU Non-Return Unit PBGC Pension Benefit Guaranty Corporation POA Power of Attorney RAR Revenue Agent Report RCCMS Reporting Compliance Case Management System SB/SE Small Business/Self-Employed SFR Substitute for Return SNOD Statutory Notice of Deficiency TAM Technical Advice Memorandum TEQMS Tax Exempt Quality Measurement System UBI Unreported Business Income Forms, Notices and Pubs Form Name Form 870-EP Waiver of Restrictions on Assessment & Collection of Deficiency in Tax & Acceptance of Overassessment Form 872 Consent to Extend the Time to Assess Tax Form 872-A Special Consent to Extend the Time to Assess Tax Form 872-H Consent to Extend the Time to Assess Tax on a Trust Form 886-A Explanation of Items Form 990-T Exempt Organization Business Income Tax Return Form 1040 U.S. Individual Income Tax Return Form 1041 U.S. Income Tax Return for Estates and Trusts Form 1120 U.S. Corporation Income Tax Return Form 1725 Routing Slip Form 2297 Waiver of Statutory Notification of Claim Disallowance Form 2848 Power of Attorney and Declaration of Representative Form 3210 Document Transmittal Form 3244-A Payment Posting Voucher - Examination Form 3363 Acceptance of Proposed Disallowance of Claim for Refund or Credit Form 4089 Notice of Deficiency - Waiver Form 4549-E Income Tax Discrepancy Adjustments Form 4564 Information Document Request (IDR) Form 5329 Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts Form 5330 Return of Excise Taxes Related to Employee Benefit Plans Form 5438 Report of Examination - Excise Taxes on Employee Plans Form 5456 Reviewer’s Memorandum - EP/EO Form 5457 Response to Reviewer's Memorandum - EP/EO Form 5500 Annual Return/Report of Employee Benefit Plan Form 5595 TE/GE Update Form 5599 TE/GE Examined Closing Record Form 5650 EP Examined Closing Record Form 5666 TE/GE Referral Information Report Form 6212-B (DOL) Examination Referral Checksheet B Form 8626 Agreement to Rescind Notice of Deficiency Form 8821 Tax Information Authorization Form 9814 Request for Mail/Shipping Service Form 12175 Third Party Contact Report Form Form 13133 Expedite Processing Cycle Form 13496 IRC Section 6020(b) Certification Letter 531-A 90-Day Letter - Form 1040 and Form 1120 Discrepancy Adjustments Letter 531-B 90-Day Letter - Form 5330 Excise Tax, Form 990-T Tax or Form 5329 Tax Letter 905 Final Partial Claim Disallowance Letter 906-A Unagreed Claim: 30-Day Letter Issued and No Response from Taxpayer Letter 1756 30-Day Proposed Non-Qualification / Revocation Letter 1757 90-Day Final Non-Qualification / Revocation Letter 2005 30-Day Letter - Form 5330, Form 990-T and Form 5329 Letter 2087 Form 5330 Closing Letter-Adjustments Made Letter 2511 Agreed Examination Changes Letter 3602-A 30-Day Letter - EP Claim Denied Letter 3605 TE/GE Initial 30-day Letter for Discrepancy Adjustment Letter 6118 Nonbank Trustee Investigation Favorable Closing Letter Notice 1214 Helpful Contacts for Your "Notice of Deficiency" Pub 1 Your Rights as a Taxpayer Pub 5 Your Appeal Rights and How To Prepare a Protest If You Don't Agree Pub 504 Divorced or Separated Individuals Pub 594 The IRS Collection Process Pub 1020 Appeal Procedures EP Examinations 4.71.14.1.4 (08-26-2021) Related Resources IRM 4.71.4, Employee Plans Examination of Returns, Discrepancy Adjustments. Contains information on how to extract and add RGS files to your hard drive. IRM 4.72.18, Employee Plans Technical Guidance, Nonbank Trustee Investigation Procedures. Reviewers must confirm that examiners performed the investigation steps contained in this IRM. IRM 1.2.1, Servicewide Policy Statements. IRM 1.2.2, Servicewide Delegations of Authority. IRM 20.1.2, Penalty Handbook, Failure to File/Failure to Pay Penalties. IRM 4.71.1 Exhibit 13, Important Contact Information for Individuals and Business Units, at IRM 4.71 - Employee Plans Examination Exhibits. TE/GE Examination Process Procedural Handbook, at TE/GE Examination Process Procedural Handbook. TE/GE Knowledge Management Portal at TE/GE K-NET TEQMS on TE/GE Connect TEQMS. Note: See also the TEQMS User Guide at TEQMS User Guide. 4.71.14.1.5 (08-26-2021) Overview of EP Mandatory Review EP Mandatory Review’s (MR) main objectives are to: Evaluate EP examination cases, and Ensure IRS compliance with the IRC and related regulations. To reach this objective, reviewers evaluate cases closed to MR to determine if examiners worked them according to current law and procedures, the IRM, and other established guidance. The review process serves to ensure that the taxpayer and other affected parties are given courteous, impartial and professional service. Mandatory Review strives for: Uniform and impartial treatment of all taxpayers, plan participants and sponsors. Protection of the government's interest. High quality standards when providing service to internal and external customers including the general public, the pension community and other IRS employees. Constant awareness of unfavorable patterns or trends, identification of problem areas and unique issues. Timely distribution of examination guidance and information that examiners, management and other employees can use to achieve the IRS and TE/GE mission. The procedures found in IRM 4.71.1.1.5, RCCMS Use Policy, apply to examinations in Mandatory Review. The procedures found in IRM 4.71.1.1.10, Case Suspense for Federally Declared Disaster, or Terrorist or Military Action, and the subsections thereunder, apply to cases in Mandatory Review. 4.71.14.2 (12-20-2018) Staffing Reviewers are experienced and competent employees who: Possess a comprehensive knowledge of generally accepted accounting and examination principles Have superior skills in understanding and applying the tax law, regulations, rulings, court decisions, and other interpretative material Are knowledgeable in IRS policies and procedures Can perform a quality review of EP examination case files Have a fair and impartial attitude Merit the highest respect and cooperation of EP employees Have demonstrated they can assume responsibility and take action when warranted Communicate ideas and opinions clearly, tactfully and objectively Apply good judgment Exercise individual initiative Usually, examiners are assigned to MR on a 3-year rotational detail - MR’s inventory and special projects may dictate shorter or longer periods. 4.71.14.3 (12-20-2018) Safeguarding Personally Identifiable Information (PII) When possible, mask the first five digits of a taxpayer’s SSN on letters, forms, notices, workpapers and emails. Example: XXX-XX-9999 4.71.14.4 (08-26-2021) Mandatory Review Duties Mandatory Review: Reviews "unagreed" EP examination cases, Gives technical and procedural help to EP "field" (front line exam groups) examiners and managers working cases that potentially may be sent to MR, Prepares Form 5456, which is issued to the field group manager when a reviewed case requires further documentation, correction or development. See IRM 4.71.14.10, Form 5456, Reviewer’s Memorandum, for additional information on Reviewer's Memorandum. See also IRM 4.71.14 Exhibit 1, Form 5456 for an example of a completed Form 5456, Coordinates writing and updating the Employee Plans Examination Procedures (IRM 4.71) and parts of Employee Plans Examination Guidelines (IRM 4.72), Writes and reviews other types of instructional materials and guidance that impacts EP employees, Approve select EPCRS-SCP corrections, Note: See IRM 4.71.3.5.1(9). Approve certain EPCRS closing agreements under IRM 4.71.3.5.2(6), Collaborates with the TE/GE Knowledge Management staff to provide presentations and technical support, Performs other duties as assigned. 4.71.14.5 (12-17-2019) Cases Subject to Review The following EP examination cases are subject to MR: All proposed plan disqualification (revocation or non-qualification) cases (unless resolved through a Delegation Order 8-3 (DO 8-3) closing agreement). MR issues the 30-Day and 90-Day Letter packages for all proposed plan disqualifications. Unagreed discrepancy adjustments (Form 1040 or Form 1120) related to an unagreed plan qualification. MR issues the 30-Day and 90-Day Letter packages. Note: The field group issues the 30-Day Letter if the discrepancy adjustment is not related to an unagreed plan disqualification. Unagreed exam closures without protest to Appeals that require a Statutory Notice of Deficiency (SNOD) to be issued. Note: Exam groups (not MR) mail the 30-Day Letters for Form 5329, Form 5330,Form 990-T, 1040 or 1120 discrepancy adjustments. If the taxpayer files a protest to Appeals, the exam group closes the RCCMS case and sends the paper case directly to Appeals. Note: MR sends the 90-Day Letters for Forms 5329, Forms 5330, Forms 990-T and discrepancy adjustments. Unagreed claim disallowances (full or partial) Management requests (requires senior manager’s approval) Non-Bank Trustee Investigations (NBTI) that are closed as a “No-Change” or “No Change with Deficiencies” Management may identify other cases as being subject to mandatory review, as problems or other special needs arise. 4.71.14.5.1 (12-17-2019) Definitions Unagreed Case– An unagreed case is an examination, discrepancy adjustment or claim in which the IRS and the taxpayer are unable to resolve the issue(s). For qualification issues, the case can’t or wasn’t resolved through EPCRS or a DO 8-3 closing agreement. Unagreed Examples include, but aren’t limited to: A Form 5500 series examination with a qualification issue raised by the examiner (whether or not disputed by the taxpayer) that isn’t resolved through a closing agreement. Form 1040/1120 discrepancy adjustments, Form 5329, Form 5330, or Form 990-T examinations for which IRS notified the taxpayer that additional tax was due and the taxpayer disagreed in writing with the proposed tax assessment. Form 1040/1120 discrepancy adjustments, Form 5329, Form 5330, or Form 990-T examinations for which IRS notified the taxpayer that additional tax was due, but the taxpayer didn’t file amended returns, delinquent returns, or sign an assessment agreement (for example, Form 4549-E or Form 870-EP) within specified time frames. Form 5330 examinations involving excise tax under IRC 4971 where the funding deficiency is not corrected. Form 5330 examinations involving excise tax under IRC 4975 where the prohibited transaction has not been corrected. Form 5330 examinations for other types of excise tax, for example IRC 4972 and IRC 4980, for which the taxpayer didn’t file/report excise tax that is due. A claim disallowed in full or in part involving the failure of the taxpayer to sign and return Form 3363 and Form 2297 within the specified time. See IRM 4.71.8, EP Claims, for procedures on claims. Proposed Revocation– A Proposed Revocation occurs when an examiner raises a qualification issue during the examination of a plan that received a favorable determination letter (in the name of the plan), and the issue isn’t resolved through a closing agreement. As a result, the examiner proposes to revoke the favorable determination letter and treat the plan and trust as not qualified. Final Revocation– A Proposed Revocation becomes a Final Revocation if the qualification issue raised by the examiner is either: Not challenged by the taxpayer during the 92-day time frame specified in Letter 1757, 90-Day Final Non-Qualification/Revocation, or Upheld by Tax Court. Proposed Non-qualification– A Proposed Non-qualification occurs when an examiner raises a qualification issue during the examination of a plan that had not previously received a favorable determination letter (in the name of the plan), and the issue isn’t resolved through a closing agreement. As a result, the examiner proposes to treat the plan and trust as not qualified. Final Non-qualification– A Proposed Non-qualification becomes a Final Non-qualification if the qualification issue raised by the examiner is: Not challenged by the taxpayer during the 92-day time frame specified in Letter 1757, 90-Day Final Non-Qualification/Revocation Upheld by Tax Court Administrative Record– All documents the taxpayer (or authorized representative) submitted to the IRS and all written correspondence between the IRS and taxpayer (or authorized representative). In cases subject to declaratory judgment under IRC 7476, the Administrative Record is the basis for any future Court proceeding. See 26 CFR 601.201(o)(8). For EP cases, an Administrative Record is required only for proposed revocation or proposed non-qualification of a plan and trust as a result of a Form 5500 exam. Note: An Administrative Record is not required for unagreed examinations of Forms 5330 or 990-T, or for Form 1040/1120 discrepancy adjustments. See IRM 4.71.3.6.4, Administrative Record, for details on how to properly prepare the Administrative Record. 90-Day Reviewer- The reviewer designated by the Manager, EP Mandatory Review (MR manager) to issue the 90-Day Letter packages for certain reviewers (for example, those on short details or without a mailroom or otherwise identified by the MR manager). When the case is transferred to the 90-Day Reviewer, the 90-Day Reviewer becomes the case owner and assumes full responsible for all aspects of the case (including the statute of limitations) and closing from MR. 4.71.14.6 (08-26-2021) Triage Review Triage is performed on all cases (see exception below) received in MR by the MR manager and MR Tax Examiner. After triage, the MR manager assigns the case to a reviewer. Exception: NBTIs and cases the MR manager specifically exempts, such as cases for which a specific reviewer has been involved while the case was being worked in the field. The MR Tax Examiner: Reconciles the AIMS and RCCMS statute of limitation (SOL) date and corrects discrepancies. Example: The TC 150 posting date was used instead of the Form 5500 filing date for a prohibited transaction. Updates the SOL to alpha code as appropriate. Example: The TC 150 posting day for a SFR was used instead of "EE" . Note: With the exception of IRC 4975, when a SFR posts, the year reflected should be six years from the date the SFR posted. For example, if the SFR posted on 10/21/2020, the statute date should be "10/EE/2026" . Visually inspects the statute extension and any documents directly related to the extension (Form 56, applicable plan documents, Form 2848). If the tax examiner finds an error, he/she immediately contacts the MR manager to discuss the appropriate action. Example: The MR manager may assign the case to a reviewer to get a new statute extension. The MR manager: Conducts a quick case overview to determine if the case is ready for review or must be sent back to the group for further development. Makes sure the information in RCCMS and AIMS agree. For discrepancy adjustment cases, ensures the RGS file and a zero-variance report are in the file. For Claims, ensures the examiner enclosed a full set of workpapers and mailed the Claim Disallowance Notification package (Letter 569-A with Form 2297 and Form 3363) to the appropriate parties. Determine if the case warrants immediate assignment to a reviewer (such as when the case has a short SOL). The MR manager may note specific instructions or observations for the assigned reviewer in RCCMS. Note: Triage notes saved in the RCCMS Office Documents folder are named "2.5 Triage Notes." 4.71.14.7 (08-26-2021) Technical Case Review The MR manager assigns the case to a reviewer after the triage process. Reviewers will: Attempt to start case review within 15 days of receipt. Track their case time to each case type (F-5500, F-1040, F-5330) separately using the RCCMS naming convention of "2.4_F5464_CCR_MR" . Reviewers may use a consolidated CCR. Verify the statutes of limitations were properly determined, extended and updated as needed. Verify all returns (related, prior, subsequent) under EP jurisdiction were established on RCCMS and AIMS and all mandatory referrals ((internally, externally or to other business units) were prepared correctly and made timely. Evaluate the examination issues identified, the steps used to develop the issues and the supporting workpapers: i) Verify that the proper issues were identified and developed; ii) Verify that the examiner didn't spend excess time developing immaterial or non-issues; iii) Confirm that workpapers are concise, well organized, are indexed to supporting documentation/other workpapers and where necessary document the taxpayer’s position. Determine if the RAR was prepared on the most current version of Form 886-A (5-2017) with the proper heading (correct taxpayer, EIN and years). Determine if the RAR is complete and fully presents the issues, facts, tax law, taxpayer’s position, government’s position and conclusions in a logical and cohesive manner. Example: The RAR is written so that the difference in opinion between the plan sponsor’s and IRS’s position(s) is clear. Verify that the examiner made a reasonable effort to reach an agreement if the case is unagreed. Verify the examiner fully documented the details of any closing agreement offers and negotiations. Review the forms, letters and templates the examiner prepared to confirm the most current versions were used and correctly completed. Note: Carefully review the documents the examiner sent to the taxpayer. Verify all required forms, letters and workpapers are saved in the RCCMS Office Documents folder using the RCCMS Naming Convention. For Form 5500 series return examinations, determine if the Administrative Record and Index are complete. Note: Update the Administrative Record and Index for all correspondence you sent to the taxpayer/POA while the case is in MR. Be responsible for the statute of limitations and comply with IRM 4.71.9, Employee Plans Examination of Returns, Statute Control Procedures. Update AIMS and RCCMS accordingly. Use Alpha Codes when applicable. Reminder: If the statute of limitation is updated to "PP" , you must prepare the memo to the Area Manager per IRM 4.71.9.9, Use of Alpha Codes include the approved memo to RCCM Office Document folder. Reminder: If the statute of limitation is updated to "EE," you must update the aging reason code to 26 (NMF cases don’t need an aging reason code) to prevent alpha code "EE" from falling off of AIMS. First try to update in RCCMS from the Codes tab and make sure the Update AIMS box is checked. If the Codes tab is grayed out, use Form 5595 and enter "26" on Line 1 P-30-32. Note: With the exception of IRC 4975, when a SFR posts, the year reflected should be six years from the date the SFR posted. For example, if the SFR posted on 10/21/2020, the statute date should be "10/EE/2026" . Use Form 4564 (IDR) to request additional information and comply with IRM 4.71.1.7.2, Concluding the Initial Appointment and Additional Requests for Information, and IRM 4.71.1.7.3, Enforcement Process: Delinquency Notice, Pre-Summons Letter and Summons. Reminder: Requests for additional information must relate to issues identified by the field as unagreed. Caution: When you identify an area of possible non-compliance or underdevelopment of an issue that the field examiner didn’t note as unagreed, discuss it with the MR manager before requesting any additional information. 4.71.14.7.1 (08-26-2021) Processing Unagreed Cases Except for the cases listed in IRM 4.71.14.7.1 (3), MR prepares and mails 30-Day Letter packages for the following cases: Form 5500 exams, where the examiner has proposed plan revocation or non-qualification (unless resolved through a Delegation Order 8-3 (DO 8-3) closing agreement). Unagreed claims. See IRM 4.71.14.7.1.3, 30-Day Letter Procedures. Form 1040 and Form 1120 discrepancy adjustments that result from plan revocation or non-qualification. MR mails these packages at the same time they mail the 30-Day Letter package for the plan. Note: Field examiners issue 30-Day Letter packages for all other discrepancy adjustments. Unagreed Form 990-T when there is a related plan revocation or non-qualification. MR mails these packages at the same time they mail the 30-Day Letter package for the plan. Except as provided for in paragraph (1), EP field groups prepare and mail 30-Day Letter packages for the following cases: Unagreed Form 5330. If the taxpayer files a protest to Appeals, the exam group closes the RCCMS case to the closing unit. See IRM 4.71.14.5.1, Definitions, for the definition of what constitutes an unagreed Form 5330 exam. Unagreed Form 990-T. If the taxpayer responds to the 30-Day Letter with a protest to Appeals, the exam group closes the RCCMS case to the closing unit. See IRM 4.71.14.5.1, Definitions, for the definition of an unagreed Form 990-T exam. Unagreed Form 5329. If the taxpayer responds to the 30-Day Letter with a protest to Appeals, the exam group closes the RCCMS case to the closing unit. Note: If there is a paper file for any unagreed case, the exam group will send the paper file to Mandatory Review. See IRM 4.71.1 Exhibit 13, Contact Information for Mandatory Review’s mailing address. Mandatory Review will forward the paper file if the Independent Office of Appeals requests it. MR reviewer: Bypass issuing a 30-Day Letter and instead prepare a 90-Day Letter after discussing with MR manager, when: Technical advice was requested on an issue affecting the qualified status of the plan and the ruling is adverse to the plan sponsor. The adverse Technical Advice Memorandum (TAM) precludes any further appeal within IRS for those issues. Note: If the adverse TAM relates to excise tax or unrelated business income, the taxpayer’s appeal rights are unaffected. The examiner issues the 30-Day Letter package. Less than 210 days remain on the statute of limitations and the taxpayer refuses to extend the statute of limitations. Note: In some circumstances, Counsel may advise the reviewer to send a 30-Day Letter even when the statute is within the 210 days. These situations are handled on a case by case basis. There’s a related examination in an Examination Functional Unit (EFU) (such as SB/SE) that has income tax adjustments which were caused by plan disqualification, and MR knows that the related case is either docketed or in the 90-Day Letter process. Note: Get AMDISA prints for the plan sponsor and for the plan’s Highly Compensated Employees (HCEs). Review the CCR; it may disclose if a related exam is open and may be helpful to contact the examiner. Note: See IRM 4.71.14.7.1.3, 30-Day Letter Procedures and IRM 4.71.14.7.1.5, 90-Day Letter Procedures. Evaluate all Forms 2848 and Forms 8821 (if applicable) submitted during the examination and ensure they comply with IRM 4.71.1.9, Power of Attorney (Form 2848) and Tax Information Authorization (Form 8821). Caution: Verify entity information (plan, trust, employer, owner), tax type (income, excise), form number (1040, 1041, 1120, 5330, 5500, 5329), tax periods (all years under exam must be included), and the taxpayer’s execution of the form (as trustee, authorized corporate officer, individual) are correct. If any item is incorrect, the form may be invalid. Note: Ensure Form 2848 or Form 8821 is submitted to the appropriate Service Center per IRM 4.71.1.9(13), Power of Attorney (Form 2848) and Tax Information Authorization (Form 8821) for processing. When it’s MR’s responsibility to issue the 30-Day Letter package and the reviewer agrees with the examiner’s conclusions and no major corrections are needed: Reviewer: make any needed corrections to the RAR or other parts of the 30-Day Letter package and email the 30-Day Letter package to the MR manager (or designee) for review and approval. Note: You must get your manager’s approval before you issue the 30-Day Letter package. MR manager (or designee): review the 30-Day Letter package and discuss any issues noted with the reviewer (the MR manager may suggest or revise the 30-Day Letter package). Send the reviewer an approval email with the final version of the approved 30-Day Letter package. Reviewer: send the approved 30-Day Letter package to the taxpayer (and POA, if applicable) by certified mail, and update the case to status 22 (30-Day) in RCCMS immediately after mailing. Note: Get a new AMDISA print reflecting the update. Reminder: Make sure the AIMS box is checked so that AIMS gets updated when the update request is made. For unagreed IRC 4971 and IRC 4975 excise tax, ensure a referral to the Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL) was made at least 30 days before the examiner issued the 30-Day Letter package. See IRM 4.71.14.7.1.2.1, Referrals to DOL. For Form 1040 or Form 1120 discrepancy adjustments, Form 5329, Form 5330, or Form 990-T, if the examiner previously mailed the 30-Day Letter and the taxpayer didn’t respond or request an Appeals hearing (and you have no issue(s) with the proposed tax assessment), prepare the 90-Day Letter package. See IRM 4.71.14.7.1.5, 90-Day Letter Procedures. Note: If you have any concern with the 30-Day Letter package issued, address them with the MR manager who will determine the next step. A corrected 30-Day Letter package may need to be issued. Prepare, as appropriate, a Reviewer’s Memorandum on Form 5456. There are two types of Reviewer’s Memorandums: Advisory - Use an advisory memo to notify the examiner of any procedures that weren’t followed or of any required (or suggested) changes you made. Don’t return the case to the examiner/field. See IRM 4.71.14 Exhibit 1 at IRM 4.71 - Employee Plans Examination Exhibits for an example of an Advisory Form 5456. Example: The examiner didn’t make the required EBSA/DOL referral on an unagreed IRC 4971 excise tax issue. Before you reissue the 30-Day Letter, make the required referral and prepare a Reviewer’s Memorandum (Advisory) to notify the field examiner and manager of the requirement and of your corrective action. Correction - Use a correction memo to notify the examiner of material errors that require them to correct or perform significant case work to develop the issues. Return the case to the examiner because MR can’t process it until the examiner finishes correcting/developing case issues. Discuss returning the case with the MR manager when you don’t agree with the examiner’s conclusions, determine that the report requires significant correction, or that the case needs further development. With the MR manager’s approval: Prepare Form 5456 (Correction Memo) stating your position on the issues and informing the field examiner of actions to take. Email Form 5456 to the MR manager (or designee) for approval. Save Form 5456 in the RCCMS Office Documents folder using the RCCMS Naming Convention. Note: Rename any letters, forms and documents issued or provided to the taxpayer that you or the examiner revised, superseded, or voided using the prefix "3U4.MISC superseded." You can remove and shred optional documents from RCCMS, such as letters, forms, and documents that you or the examiner revised, superseded, or voided and paper file (such as old closing documents or unissued 30-Day letters). If you decide to keep these documents, rename them in RCCMS using the same prefix . Example: Reviewer revises examiner’s RAR and renames the document from "32.RAR F886-A" to "3U4.MISC Superseded 32.RAR F886-A." Update RCCMS for transfer. If the case has a paper case file, the field group manager, field examiner should ask the MR manager for further guidance. MR manager: Accept the case transfer on RCCMS Contact the originating field group manager (and examiner, at the MR manager’s discretion) to advise the field that you’re returning the case. Confirm the shipping address with the field group manager. Update the case to "status 12" in RCCMS, as the case needs further development or correction. 4.71.14.7.1.1 (08-26-2021) Picking Up Additional Years Generally, don’t expand the examination into years beyond the field examiner’s unagreed return package. However, if you believe that pursuing a qualification issue or tax issue (income/excise) for years not covered in the examiner’s unagreed package is warranted, discuss with the MR manager. If the MR manager agrees that you should pick up an additional year(s): For a Form 5329, Form 5330 or Form 990-T case, follow the procedures in IRM 4.71.14.7.1.1.1, Substitute for Return Procedures for Form 5329, 5330 or 990-T, to establish an additional year(s). For a Form 5500 case, contact the field group manager to discuss the issue and coordinate with Classification to get the additional year(s) established on RCCMS and AIMS. Note: If Form 5500 is due but not filed, follow the procedures in IRM 4.71.1.21, Amended, Substitute and Secured Forms 5500. Inform the taxpayer in writing that the additional year(s) is under exam (specifically note year(s) and form/return number). If you pick up an additional year(s) up after the 30-Day Letter has been issued, ask Counsel if the 30-Day Letter must be reissued. 4.71.14.7.1.1.1 (08-26-2021) Substitute for Return Procedures for Forms 5330, 5329, or 990-T Examiners prepare a substitute for return (SFR) package, establish the SFR on RCCMS and AIMS, and mail the SFR package to the Ogden Service Center when a Form 5330 excise tax issue is unagreed. See IRM 4.71.5.9.2, Substitute for Return Package. See SFR procedures for Form 5329 in IRM 4.71.27.9.2, Form 3177 - Substitute for Return Procedures, and Form 990-T SFR procedures in IRM 4.71.10.5.2, Substitute for Return Package. Note: For Ogden’s mailing address, see IRM 4.71.1, Exhibit 13 - Contact Information. IRM 4.71 - Employee Plans Examination Exhibits. Generally, additional year(s) should NOT be added to the unagreed return package the field created and sent to MR. However, if you believe an additional year(s) should be established or Counsel tells you to establish an additional year(s), discuss with the MR manager. If the MR manager agrees that you should pick up an additional year(s): Determine if the taxpayer has already filed the return by securing applicable IDRS research (BMFOLI, BMFOLT, BMFOLR) for the applicable taxpayer identification number. If filed, determine if the filed return correctly addresses the current issue. If the filed Form 5330, Form 5329, or Form 990-T doesn’t correctly address the issue, establish examination controls. Note: Remember to use "V" after the SSN for BMFOL. Prepare a SFR package per IRM 4.71.14.7.1.1.1 (1). Note: Send the SFR to the Service Campus because the return must be fully established before we can close the case to Appeals or issue a SNOD. A return only becomes fully established when the Service Center processes the return. When the SFR has a TC 150 on BMFOLT (for Form 5330 or Form 990-T) or IMFOLT (for Form 5329), the return is fully posted (this normally takes about six weeks after you send the SFR package to the Service Center). Use these IRMs to establish a return on RCCMS and AIMS: IRM 4.71.5.9.2, Substitute for Return Package, for Forms 5330 IRM 4.71.10.5.2, Substitute for Return Package, for Forms 990-T IRM 4.71.27.9.2, Form 3177 - Substitute for Return Procedures, for Forms 5329 When MR receives the return on RCCMS and AIMS, check the statute of limitations (SOL), status code, etc. for accuracy. The TE/GE Closing Group assesses excise tax and UBIT on SFR returns at case closing, because the Service Center did not process any delinquent return with dollar amounts. Therefore, Make sure tax and penalty amounts are correctly reflected on the RCCMS closing tabs. See IRM 4.71.14.8.3 (3), Completing the RCCMS Closing Record with Assessments or Adjustments. Write instructions on how to assess tax and penalties in the RCCMS remarks section. If the IRS asserts the IRC 6651(a)(2) (failure to pay) on a SFR, we must certify the SFR Form 5329, Form 5330, or Form 990-T per IRC 6020(b). We use Form 13496 to certify the SFR return. Reminder: Form 13496 is not required if only the IRC section 6651(a)(1) failure to file penalty is proposed. The 6020(b) certification package consists of the following, but not limited to: A signed and dated Form 13496 Note: An electronic signature is acceptable. Reminder: The Form 13496 must identify the taxpayer by name, address, the taxpayer identification number and number of pages in the package. See IRM 4.71.14 - Exhibit 22, Form 13496. File copy of the applicable SFR return File copy of Form 886-A and all exhibits, if any File copy of Form 4549-E File copy of Form 5438, if applicable File copy of supporting schedules, spreadsheets, or exhibits, if any. A list of all the attachments in the 6020(b) certification package and the grand total of all pages in all attachments on the Form 13496 Note: For a Form 990-T SFR, total income (Form 990-T, line 13), total deductions (Form 990-T, line 29), unrelated business taxable income (Form 990-T, line 34) and total tax (Form 990-T, line 44), must be clearly listed in the RAR. 13496 to be a valid IRC 6020(b) return. Prepare a separate Form 13496, for each year and attach it to each SFR package if the report of proposed adjustments involves more than one tax year. Prepare a new Form 13496 when a report of proposed adjustments is revised and that changes (in either direction) the taxpayer’s total tax liability. Save each item in the SFR package in the RCCMS Office Documents folder using the RCCMS Naming Convention. See IRM 4.71.12 - Exhibit 1, RCCMS Naming Convention. Example: Files should be named as follows: 30.SFR F13496 IRC 6020(b) Cert 30.SFR F5330 YYYY Name RAR 30.SFR F5330 F5438 Name 30.SFR F4549-E 30.SFR F5330 YYYY Name 4.71.14.7.1.2 (08-26-2021) Special Notification Procedures Ensure that the examiner made all required referrals to other governmental agencies such as the Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL), and Pension Benefit Guaranty Corporation (PBGC). If not, prepare the referral and process it. Review the case issues and follow referral procedures for the following: If case issues Then Warrant a referral to an EFU (such as SB/SE), and the examiner didn’t refer Refer on Form 5666. Impact a related Form 1040, Form 1041 or Form 1120 in SB/SE or other Examination Functional Unit exam Contact the examiner working the related case and update the case status Impact a related case Area Counsel is litigating Contact the attorney and update them on the case status Require third party contacts Follow third party notice requirements per IRC 7602(c). Prepare appropriate series Letter 3164 (generally L-3164-E) and Form 12175, and process per IRM 4.71.1.10, Third Party Contacts. Note: A referral made to DOL for the purpose of satisfying IRC 4971(d) or IRC 4975(h) is no longer treated as a third party contact. 4.71.14.7.1.2.1 (08-26-2021) Referrals to DOL Per the IRS-DOL Coordination Agreement, plans under DOL’s jurisdiction involving IRC 4971 or IRC 4975 excise tax, require IRS to make a referral to EBSA at least 30 days before we issue the 30-Day Letter. In most cases, the EP exam field group makes the referral. If they didn’t, you must. Note: DOL doesn’t have jurisdiction over plans that only provide benefits to owners and their spouses. However, if determined that a plan covering only one participant (or participant and spouse) should cover additional people, a referral is warranted. Bypass the referral requirement only with the MR manager’s written approval. Example: The MR manager decides not to make a referral because the statute of limitations is imminent, and MR must issue the 90-Day Letter immediately. If EBSA responds that they will participate, you may need to return the case to the field group for further development. A DOL referral consists of a completed Form 6212-B with a statement in the Remarks section that the case is in MR pending issuance of the 30-Day Letter. Check the DOL Participation Requested block on Form 6212-B. Send the referral to the FAC/EP DOL Coordinator. For contact information, see IRM 4.71.1, Exhibit 13 - Contact Information. IRM 4.71 - Employee Plans Examination Exhibits. Making this referral to EBSA satisfies the requirements of IRC 4971(d) and IRC 4975(h), so no additional referral is required before MR issues the SNOD. Reminder: DOL Referral on Form 6212-B is required for unagreed cases. 4.71.14.7.1.3 (08-26-2021) 30-Day Letter Procedures The 30-Day Letter gives the taxpayer 30 days to file a protest requesting a hearing with Appeals. When MR issues the 30-Day Letter (reviewer agrees with the examiner’s conclusion(s) and no major corrections are needed), the reviewer will: Make any minor corrections to the RAR, or other portions of the 30-Day Letter package. Email the 30-Day Letter package, with current AMDISA and INOLES prints, to the MR manager (or designee) for review and approval. Note: The MR manager (or designee) reviews the 30-Day Letter package and, if needed, discusses concerns with the reviewer. The MR manager may make suggestions or revise the 30-Day Letter package. The MR manager emails the reviewer an approved final 30-Day Letter package. Send the MR manager approved 30-Day Letter package to the taxpayer (and POA if applicable) by certified mail. Update the case to status 22 (30-Day) through RCCMS (with the AIMS box checked) immediately after you mail the 30-Day Letter to the taxpayer. Note: The field’s group number stays on AIMS and in RCCMS (it’s not updated to 7694.) Get an AMDISA reflecting that case is in status 22. Use the most current version of the 30-Day Letter. See the table below for which letter to use for specific case types, and the acceptable RCCMS naming convention to use: Exam Issue Use Letter RCCMS naming convention Acceptable variations Forms 1040/1120 - Discrepancy Adjustments 3605 3Q10.TAX DISC ADJ LTR 3605 3Q10.L3605 a YYYYMMDD 3Q10.aYYYY MM DD L3605 3U1.CORR L3605 YYMMDD Forms 5329, 5330 or 990-T 2005 3T1.UNAGR LTR 2005 30 Day Form 5330 3T1.aYYYY MM DD L2005 3T1.L2005 a YYYYMMDD 3U1.CORR L2005 YYMMDD Proposed Non-Qualification or Revocation 1756 4.XXX Letter 1756 Proposed Non-Qualification or Revocation 4.XXX L1756 YYYYMMDD Proposed Non-Qual or Rev. (as appropriate Claims 3602-A 3U1.CORR LTR 3602-A 30 Day Claim 3U1.CORR L3602A YYYYMMDD Claim Note: Additional items in the 30-Day Letter package use the same naming convention as the letter. Example: Form 4549-E would be named 3Q10.L3605 b YYYYMMDD F-4549-E, if the L-3605 was named 3Q10.L3605 a YYYYMMDD. The 30-Day Letter package for a Form 1040 or Form 1120 discrepancy adjustment includes: Letter 3605 Form 4549-E Pub 1 Pub 5 Pub 594 RAR (Form 886-A) Interest Calculations Penalty Calculations (if applicable) Return Envelope Note: MR mails the 30-Day Letter for Forms 1040/1120 when they’re related to a proposed revocation/non-qualification. If the taxpayer jointly filed a Form 1040, MR must mail a separate letter to each spouse. The 30-Day Letter package for a Form 5329 and Form 990-T includes: Letter 2005 RAR (Form 886-A) Pub 1 Pub 594 Pub 1020 Form 870-EP (See IRM 4.71.14 Exhibit 4 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 870-EP.) Penalties/Additions to tax calculations, if applicable Return Envelope The 30-Day Letter package for a Form 5330 Letter 2005 RAR (Form 886-A) Pub 1 Pub 594 Pub 1020 Form 870-EP (See IRM 4.71.14 Exhibit 4 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 870-EP.) Form 5438 Penalties/Additions to tax calculations, if applicable Return Envelope The 30-Day Letter package for a proposed revocation/non-qualification includes: Letter 1756 (Proposed Non-qualification/Revocation). See IRM 4.71.14 Exhibit 7 at IRM 4.71 - Employee Plans Examination Exhibits. Pub 1 Pub 594 Pub 1020 Explanation for Proposed Non-qualification or Revocation (RAR) Return Envelope The 30-Day Letter package for claims includes: Letter 3602-A (See IRM 4.71.14 Exhibit 19 at IRM 4.71 - Employee Plans Examination Exhibits) RAR (Form 886-A) Pub 1 Pub 5 Pub 594 Form 2297 (See IRM 4.71.14 Exhibit 24 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 2297) Form 3363 (See IRM 4.71.14 Exhibit 25 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 3363) Form 870-EP (See IRM 4.71.14 Exhibit 4 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 870-EP) Return Envelope Use the correct salutations on the 30-Day Letters: For individuals, use the name(s) shown on Form 1040. For organizations (any entity that is not an individual), use the organization’s legal name shown on federal tax returns. Note: The address line of the letter can include an individual name. Example: ABC, Inc. c/o John Doe 12 Main Street City, State Zip Reminder: Do not use the plan name or an individual’s name. For claims, if the taxpayer signs and returns Form 2297 and Form 3363, close the case with: Letter 2087 if the claim is for a Form 5330. Letter 2511 if the claim is for a Form 990-T. Note: There is no closing letter for claims on Forms 1040 or 1120 if the taxpayer signs and returns Form 2297 and Form 3363. If the taxpayer timely files a protest to Appeals (including claims cases), follow the procedures in IRM 4.71.14.7.1.4, Cases to Appeals. If the taxpayer concedes the issue or wants to enter into a closing agreement resolution, discuss the taxpayer’s proposal with the MR manager. Then coordinate case processing with the field examiner and their manager to: Determine whether the case stays in MR or goes back to the group for closure or closing agreement resolution. If MR resolves the case through a DO 8-3 closing agreement, you must get approval on the DO 8-3 Transmittal Checksheet from the originating group manager and the originating Area Manager before sending the closing agreement to the Director, EP Examinations for signature. If MR resolves the case through a closing agreement, follow the procedures in IRM 4.71.3.5, EPCRS and Closing Agreements, and remember to: Complete required entries in RCCMS closing record to show disposal code 12 in AIMS and 104 in RCCMS (Closing Agreement).Update and prepare workpapers in the appropriate places to show the issue(s) resolution. Reclassify the Administrative Record (if the case is a previously unagreed Form 5500) to a correspondence file. Issue the appropriate closing letter. Close the case to the TE/GE Closing Group. If the taxpayer gives additional information that changes the government’s position, discuss case resolution with the MR manager. If the MR manager agrees that the case can be resolved, he/she will coordinate case processing with the reviewer, field examiner, and examiner’s manager. For all cases other than claims, if the taxpayer doesn’t respond or chooses not to appeal, then the case will proceed for 90-Day processing. See IRM 4.71.14.7.1.5, 90-Day Letter Procedures. For claims, if the taxpayer doesn’t timely file a protest to Appeals or provide a signed Form 2297 and Form 3363: Issue Letter 906-A, Final Full Claim Disallowance or Letter 905, Final Partial Claim Disallowance Letter. Note: The Letter 905 is used when there is reduction in the amount of the tax previously assessed. The Letter 905 is not appropriate when there is a reduction in only the penalty assessment. The Form 2297 and Form 3363 only have a field for a reduction in the tax assessment. Use disposal code 01 on AIMS and disposal code 210 in RCCMS to close the case. If there is a paper case file, mail it directly to the TE/GE Closing Group. Note: Use MR’s Philadelphia address on Form 3210 in the "From" box. The "Releasing official" is the reviewer. Note: For mailing addresses and additional contact information, see. IRM 4.71.1, Exhibit 13 - Contact Information. Note: 90-Day procedures do not apply to claims. If a taxpayer agrees and signs Form 870-EP for a: Form 5330 examination or files Forms 5330, close the case per IRM 4.71.5.6.5, Closing Agreed Form 5330 Exams, and process any returns or checks received per IRM 4.71.5.6.3, Processing Delinquent Forms 5330 Received from the Taxpayer. Form 990-T examination or files Forms 990-T, close the case per IRM 4.71.10.4.4, Closing Agreed Forms 990-T, and process any returns or checks received per IRM 4.71.10.4.3, Processing Forms 990-T Received from the Taxpayer. If a taxpayer agrees and signs Form 4549-E for Form 1040/1120 discrepancy adjustments, close the case per IRM 4.71.4.5 1, Agreed Tax Change. If a qualification issue is resolved through a closing agreement, close the case per IRM 4.71.3.5.2, EPCRS Closing Agreements or IRM 4.71.3.5.3, DO 8-3 Closing Agreements. 4.71.14.7.1.4 (08-26-2021) Cases to Appeals When the taxpayer responds to the 30-Day Letter with a protest to Appeals, reviewers must determine whether: The statute expires within 12 months. Note: Appeals won’t accept cases with less than one year remaining on the statute of limitations. The Protest is valid. Note: The requirements of a valid protest are in Pub 1020, (for Form 990-T, Form 5330 and Form 5500 protests) and in Pub 5 (for Claims, Form 1040 or Form 1120 protests). If there’s less than one year on the statute of limitations, request a statute extension. See IRM 4.71.9, Statute Control Procedures for additional information. If the taxpayer refuses to extend the statute of limitations, or you can’t find the taxpayer, get the group manager’s approval to proceed to issue a 90-Day Letter instead of sending the case to Appeals. If the taxpayer provides an extension, proceed to update the statute using RCCMS. If the formal written protest doesn’t comply with the requirements in Pub 5, or Pub 1020, you may, with managerial approval return the protest to the taxpayer and grant them additional time to perfect the protest. Example: The taxpayer submits a formal written protest that simply states that the taxpayer doesn’t agree. There is no explanation for any disagreement and the Taxpayer didn’t sign the documents under the penalties of prudery. Note: The signature of only one spouse on a protest for a joint return doesn’t make the protest incomplete. Also, if the only item missing from the protest is a copy of the 30-Day Letter, you can close the case using the copy in the file. Therefore, there is no need to return the protest to the taxpayer for perfection. Adequacy of a protest is generally not determined based on its substantive content, such as whether the protest contains sufficient factual or legal support. Example: If a taxpayer submits a formal written protest that includes all the information required by Pub 5 addressing the issues raised in the 30-Day Letter, reasons for disagreement, and factual information to support their position on the issues, then you must forward the case to Appeals for their consideration. Send to Appeals regardless of whether you disagree with the taxpayer’s facts or don’t consider the taxpayer’s position sufficiently supported. A taxpayer protest is adequate when it contains all information required by Pub 5. If the taxpayer doesn’t submit a valid protest, get the group manager’s approval to proceed to issue a 90-Day Letter instead of sending the case to Appeals. If the formal written protest meets the requirements in Pub 5, or Pub 1020, you must determine whether: The Valid protest provides Then ... no new information update the RAR to show the protest to Appeals request. the taxpayer agrees close the case as an agreed case. new facts or arguments and the information doesn’t change the IRS’s position Update the RAR to show the new information and the IRS’s rebuttal to the new information. Note: Ensure that the updated RAR states that the revised RAR supersedes the previously provided RAR. Example: This report supersedes the documents provided in the letter dated August 17, 2020 and incorporates the letter dated September 21, 2020 and the Government’s rebuttal. Prepare Letter 5918 to transmit the revised RAR and notify the Taxpayer that the case was transferred to appeals. Mail the Letter 5918 and revised RAR to the taxpayer (plan sponsor, POA, as applicable). new facts or arguments and the information changes the IRS’s position Update the RAR to show the new information and the IRS’s rebuttal to the new information. Note: Ensure that the updated RAR states that the revised RAR supersedes the previously provided RAR. Prepare an individually-designed letter (IDL) to send the revised RAR. Give the taxpayer an additional 15 days to respond to the revised position. Explain in the IDL that the revised RAR incorporates the protest and provide the case’s current status (being processed to Appeals) Mail the IDL and revised RAR to the taxpayer (plan sponsor, POA, as applicable). If a response is provided to the revised RAR, repeat the process of validating the protest. If no response is provided to the revised RAR: Document the fact that no response was provided on the CCR. Prepare Letter 5918 to transmit the revised RAR. and notify the Taxpayer that the case was transferred to appeals. Mail the Letter 5918 and revised RAR to the taxpayer (plan sponsor, POA, as applicable). Proceed to close the case to appeals Reminder: Ensure that the protest, all versions of the RAR, the Letter 5918 and IDL, if any, and all other supporting documentation has been saved in the RCCMS Office Documents folder using the RCCMS Naming Convention. Use RCCMS subfolders to organize document groupings when warranted. If applicable, verify that the Administrative Record is properly prepared for a proposed revocation or non-qualification. See IRM 4.71.3, Unagreed Form 5500 Examination Procedures and EP Exam Closing Agreements. If the return is a SFR Form 5329, Form 5330, or Form 990-T and the IRC 6651(a)(2) failure to pay penalty is proposed, ensure that Form 13496, IRC section 6020(b) Certification package has been: properly completed, and uploaded into the RCCMS Office Documents folder using the RCCMS Naming Convention. Note: See IRM 4.71.14.7.1.1.1 (7). Reminder: Form 13496 is not required if only the IRC section 6651(a)(1) failure to file penalty is proposed. If applicable, copy the RGS information to an email to include or associate with your case. Ensure any passwords you use to encrypt the file is noted on the CCR. Follow these steps to send RGS file by email: Open the RGS program, highlight the case from "Case Management Window," which usually opens automatically, and hit "Select." If the "Case Management Window" doesn’t automatically (or you’ve been working in RGS on another case, select "File," "Open" and "Case" from the "Report Generation Software" window. From the "Report Generation Software" window, select "Copy Case" from the "File" drop down menu. Note: Selecting "Move Case" removes the case from RGS once case is copied to your hard drive. From the "Copy Case(s)" window, use "Select Location" in the "Copy Cases(s) To" box to navigate to the desired location on your hard drive. Select "Copy." A folder containing a file "NFORWARDI1.ZIP" (or similar name) is created. Send this file to the email address the Manager, EP Mandatory Review gave you. See IRM 4.71.1 Exhibit 13 at IRM 4.71 - Employee Plans Examination Exhibits, for contact information for the Manager, EP Mandatory Review. Close the case using RCCMS. See IRM 4.71.14.8, Case Closing. Reminder: Use disposal code 601 in RCCMS, "Appealed—Protest to Appeals" . Reminder: Use appeals code 131 in RCCMS, "Nondocketed" . To transfer the case to Appeals: Complete the routing slip (Form 1725, for the TE/GE Closing Group to route the case to the Appeals Office in Chicago, IL(Office Code 131). See IRM 4.71.14 Exhibit 11 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 1725 for a case going to Appeals. Reminder: Ensure that the Form 1725 is uploaded to the RCCMS Office Documents folder using the RCCMS Naming Convention. Notify the MR manager (or designee) through email that the case is being closed to Appeals. Make sure the following items are in the electronic RCCMS folder because the case can’t close without them: Dated 30-Day Letter(s) (taxpayer and POA, if applicable) with attachments Taxpayer’s valid protest letter with attachments (scanned) Revised RAR including the taxpayer’s protest and the IRS’s rebuttal. The individually designed letter and Letter 5918 used to provide the revised RAR to the taxpayer (and POA, if applicable) Completed Form 1725 Copy of the return(s) 6020(b) Certification package(s), if applicable Transfer the case on RCCMS to the MR manager who will review the file to determine if the case is ready for Appeals. Hold the paper case file (if there is one) until the MR manager instructs you what to do with it. If MR receives additional information while the case file is in Appeals, notify Appeals (with your manager’s permission) and immediately send them the information. Note: The MR manager determines whether the proposed communication is necessary and whether it is an ex parte communication covered by RRA 98 limitations. See IRM 8.1.10, Ex Parte Communications for the rules on ex parte communications. 4.71.14.7.1.4.1 (08-26-2021) Cases Returned From Appeals Periodically, Appeals may return cases to MR for further development. MR manager: Research MR records to determine the original reviewer. If still in MR, return case to that reviewer. If not, assign to another reviewer. Pull the RCCMS records from the RCCMS case library. Assign the case to the reviewer. Give reviewer specific instructions or observations, as needed. MR manager’s permission is required to communicate with Appeals. The MR manager determines whether the proposed communication is necessary and whether it is an ex parte communication covered by RRA 98 limitations. See IRM 8.1.10, Ex Parte Communications for the rules on ex parte communications. Reviewer: Give high priority to working the case. Review the case file and Appeal’s memo to determine if you should return the case to the original field examiner for further development. If you can easily fix the Appeals Officer's concerns, do so and send the case back to Appeals. If you’re returning the case to field, prepare Form 5456 (Reviewer’s Memorandum) and follow the procedures in IRM 4.71.14.7.1, Processing Unagreed Cases. 4.71.14.7.1.5 (08-26-2021) 90-Day Letter Procedures If the taxpayer fails to respond to the 30-Day Letter, prepare a 90-Day Letter package (Final Revocation Letter, Final Non-Qualification Letter, or SNOD). Note: Allow an additional seven days beyond the 30-Day period (to account for mail delays) before preparing the 90-Day Letter, unless a statute is pending. For 30-Day Letters issued by the field, determine whether the 30-Day Letter package is correct. If any 30-Day Letter package item (the Letter, RAR, Form 870-EP, or Form 4549-E) contains an error(s), discuss with the MR manager. The MR manager determines whether the 30-Day Letter must be re-issued. If the 30-Day Letter package must be re-issued, the MR manager determines whether: The reviewer will make the corrections and re-issue the 30-Day Letter, or MR will return the case to the field to make the correction(s) and re-issue the 30-Day Letter. Note: If you return the case to the field, prepare a Reviewer’s Memorandum (Form 5456) to explain the items requiring correction and the need for the letter to be reissued. See IRM 4.71.14.10, Form 5456, Reviewer’s Memorandum. Use the most current version of the 90-Day Letter. See the table below for which letter to use for specific case types, and the acceptable RCCMS naming convention to use: Use Letter RCCMS naming convention Acceptable variations Forms 1040/1120 - Discrepancy Adjustments 531-A 3T1.UNAGR LTR 531-A 90-Day Discrepancy Adjustment 3T1.L531A YYYYMMDD 3T1.L531A a YYYYMMDD Forms 5329, 5330 or 990-T 531-B 3T1.UNAGR LTR 531-B 90-Day Form 5329, Form 5330 or Form 990-T 3T1.L531B YYYYMMDD 3T1.L531B a YYYYMMDD Form 5500 series Final Non-Qualification/Revocation 1757 4.XXX LETTER 1757 Final Non-Qual. or Revocation (as applicable) 4.XXX L1757 Final Non-Qualification (or Qual.)or Revocation (or Rev) (as applicable) YYYYMMDD Note: For L-1757, the leading “4” represents the letter’s placement in the Administrative Record. The “XXX” is the item’s location in the Administrative Record. Leading zeros are used when necessary. Example: L-1757 is the 42nd item in the Administrative Record. It is listed as “42” in the first column of the Administrative Record Index and “4.042 L1757 Final Nonqual” in RCCMS. Note: Follow the letter’s naming convention for additional items in the 90-Day Letter package. Example: Form 4549-E is named 3T1.b L531-A YYYYMMDD F-4549-E (if L531-A is named 3T1a L531-A YYYYMMDD). The 90-Day Letter package for a Form 1040 or Form 1120 discrepancy adjustment includes: Letter 531-A Form 4549-E RAR (Form 886-A) Form 4089 Note: If a SNOD is being issued for a Form 1040 and a SNOD is also being issued for IRC 4973, IRC 4974 or IRC 72(t) tax for the same taxpayer for the same year, only one SNOD will be issued. These taxes will be added to the Form 4549 and the issues added to the Form 1040 RAR. These will be mailed out with Letter 531-A. Note: Publications 1 and 594 are referenced in the letter and listed as optional enclosures because the letter tells the Taxpayer how to get copies. Note: The current version of Letter 531-A cites the specific Taxpayer Advocate Office for the Taxpayer in the letter so the Notice 1214 is no longer needed. Reminder: If the taxpayer jointly filed a Form 1040, a separate letter must be mailed to each spouse. The 90-Day Letter package for a Form 5329 ,Form 5330, or Form 990-T exam includes: Letter 531-B Form 870-EP RAR (Form 886-A) Return Envelope Note: If a SNOD is being issued for a Form 1040 and a SNOD is also being issued for IRC 4973, IRC 4974 or IRC 72(t) tax for the same taxpayer for the same year, only one SNOD will be issued. These taxes will be added to the Form 4549 and the issues added to the Form 1040 RAR. These will be mailed out with Letter 531-A. Note: Pub 1 and Pub 594 are referenced in the letter and listed as optional enclosures because the letter tells the Taxpayer how to get copies. Note: The current version of Letter 531-B cites the specific Taxpayer Advocate Office for the Taxpayer in the letter so the Notice 1214 is no longer needed. The 90-Day Letter package for a Final Revocation/Non-qualification consists of: Letter 1757, Final Non-Qualification/Revocation, Pub 1020 Explanation of Final Revocation/Non-Qualfication (Summary RAR) Note: Publications 1 is referenced in the letter tells the Taxpayer how to get a copy. Use the correct salutations in the 90-Day Letters: For individuals, use the name(s) shown on Form 1040. For organizations (any entity that is not an individual), use the organization’s legal name shown on federal tax returns. Note: The address line of the letter can include an individual name. Example: ABC, Inc. c/o John Doe 12 Main Street City, State Zip Area Counsel concurrence: Must be obtained before issuing the 90-Day Letter for Forms 5500, 990-T, and 5330. Is optional for Forms 1040/1120 discrepancy adjustments and Form 5329. Is solicited from the Area Counsel office that has jurisdiction over the area where the taxpayer resides. Exception: Specific Counsel attorneys may be assigned to special project cases such as ATAT cases or Promoter project cases. In those instances, review case project procedures to determine designated Counsel attorneys. Before sending a case to Counsel for a 90-Day Review: Prepare a draft of the applicable 90-Day Letter, completing all parts except the date. Send the case to the 90-Day Reviewer (as applicable), following the procedures in IRM 4.71.14.7.1.5.1, Transfer to 90-Day Reviewer. Prepare a Summary RAR. The Summary RAR is generally a one to four page summary of the Issues, Facts, Law, Analysis, and Conclusion. In some cases (like ATAT projects), Counsel may want to prepare the Summary RAR. See IRM 4.71.14 Exhibit 20, at IRM 4.71 - Employee Plans Examination Exhibits for an example of a Summary RAR. If the taxpayer has a representative(s), make sure that all years listed on the 90-Day Letter are listed on a Form 2848 or Form 8821. If they are not, get a revised Form 2848 (or Form 8821); otherwise, you can’t send the 90-Day Letter to the representative(s). Note: A taxpayer may use different representatives for different years. Ensure that the Administrative Record is correctly prepared per IRM 4.71.3.6.4.1, Maintaining the Administrative Record File, for Form 5500 cases involving revocation or non-qualification. See IRM 4.71.14 Exhibit 12 at IRM 4.71 - Employee Plans Examination Exhibits for an Administrative Record index template. Note: Unagreed Forms 5329, 5330, 990-T or 1040/1120 discrepancy adjustment and agreed companion (ride along) Forms 5500 don’t have an Administrative Record. For these cases, save all correspondence and relevant documents in the RCCMS Office Documents folder (using the RCCMS Naming Convention) in all related RCCMS files. Note: Discuss closing any agreed companion (ride along) returns with the MR manager. Example: An "agreed" Form 5500 is transferred to MR as a companion (ride along) case to an "unagreed" Forms 5329, 5330, 990-T or 1040/1120 examination. Email the 90-Day Letter(s), full RAR, Summary RAR, Administrative Record index (if applicable), Form 4089 (if applicable), and Form 870-EP (if applicable) to the MR manager (or designee). If the MR manager (or designee) has concerns with the case or the 90-Day Letter package, they’ll discuss them with the reviewer and determine appropriate actions and/or revisions to the 90-Day Letter package. Note: The MR manager resolves any disagreements. Note: You can’t send the case to Counsel until all the recommended actions/revisions have been addressed. 90-Day Letter packages don’t have to be sent to the MR manager for review if you’ve previously submitted the 30-Day Letter package to the MR manager (or designee) for review and approval and no changes were made since that time. When you receive MR manager approval (required when the MR manager didn’t previously approve the 30-Day Letter): Prepare a transmittal memo for Counsel requesting a formal 90-Day Letter review. See Contact Counsel to request that a counsel member be assigned. Make sure all of the relevant files are uploaded into the RCCMS Office Documents folder using the RCCMS Naming Convention If the case is a Form 5500, make sure the Administrative Record in RCCMS is complete, all files are properly named, and the Administrative Record index properly indexes all of the files in the Administrative Record. Email the transmittal memo, 90-Day Letter, full RAR, Summary RAR, Administrative Record index (if applicable), and Form 870-EP, Form 4089, Form 4549, (as applicable) to the Counsel attorney conducting the 90-Day review. Update the case to status 25 (case issues awaiting counsel review) through RCCMS immediately after you mail the 90-Day Letter package to counsel. Note: When the case is updated to status 25 in RCCMS, make sure the AIMS box is checked so that AIMS gets updated when the "update" request is made. Get a new AMDISA that shows the update. Place the electronic print in RCCMS. Use the RCCMS Naming Convention "2.2 Request for Counsel Review" followed by a descriptive extension (such as SNOD for 1040, SNOD for 5330, Final Disqualification, Final Revocation, etc.) for the request package (transmittal memo and 90-Day Letter package) Note: You may use an email as the transmittal memo. The MR manger will transfer the RCCMS files for the case(s) being reviewed to the Counsel attorney conducting the 90-Day review. Generally, Counsel has 45 days to review and return the case file to the reviewer. Note: While the case is in Counsel, the reviewer is responsible for protecting the statute of limitations. When Counsel returns the case, they note recommendations in a Counsel Recommendation Memo. Note: Upload Counsel’s memo to the RCCMS case file using the RCCMS naming convention "2.1 Counsel Recommendation Memo" followed by a descriptive extension (such as SNOD for 1040. SNOD for 5330, Final Disqualification or Final Revocation.) The reviewer will: Generally, follow the recommendations in the Counsel Recommendation Memo and document the CCR accordingly. Only deviate from Counsel’s recommendation(s) after: i.) attempting to get agreement from the attorney who wrote the memo on any deviation and/or proposed alternative actions (sometimes clarification is needed and agreement is reached), ii.) discussing your reasons for deviation and proposed alternative actions, if any, with the MR manager, iii) obtaining the MR manager’s written approval. Follow the procedures in IRM 4.71.14.7.1.5, 90-Day Letter Procedures, or transfer the case to the 90-Day Reviewer per IRM 4.71.14.7.1.5.1, Transfer to 90-Day Reviewer. Generally, reviewers issue 90-Day Letter packages on the cases they review. The MR manager determines the exceptions to the general rule. Note: Reviewers who don’t issue 90-Day Letters transfer their case under IRM 4.71.14.7.1.5.1, Transfer to 90-Day Reviewer. After the transfer, the 90-Day Reviewer issues the 90-Day Letter package and becomes the case owner (is fully responsible for the case and its closure from MR). After getting Area Counsel approval, the reviewer or 90-Day Reviewer emails the Mid-Atlantic EP Area Manager (with a "cc" to the MR manager) the entire 90-Day Letter package, along with Counsel Recommendation Memo, if applicable. The attachments of the email should include the following: The applicable 90-Day Letter (531-A, 531-B, 1757). Verify that the letter number, series, salutation, address, and "Person to Contact" (either the reviewer or 90-Day Reviewer with their ID and phone number) are correct. Summary RAR Final RAR (the one sent with the 30-Day Letter) Counsel Recommendation Memo with reviewer’s comments and/or response to Counsel and/or the MR manager, if applicable. Form 870-EP (Forms 5330 and 990-T) Administrative Record index (Form 5500) INOLES print (if address differs from the address reflected on the 90-Day Letter, an explanation is warranted) Example: "INOLES is incorrect. The taxpayer confirmed correct address with reviewer." Note the email’s purpose in its subject line. Example: Approval request for issuance of discrepancy adjustment SNOD. At the top of the email: list the entity name, the years covered, the form number and the statute date. Example: RE: Jane Doe 90-Day Letter for discrepancy adjustment. Form: 1040 Years: 12-31-2018 SOL: 04-15-2022 In the body of the email: ask the Mid-Atlantic Area Manager to electronically sign the letter and the MR manager to approve the letter’s issuance by signing the attached Form 1725 (the buck slip included in the email). Note: The RCCMS Naming Convention for the buck slip is 3T1. ("e" or the next letter in the sequence) UNAGR 90 F-1725. Address the buck slip to the Area Manager. Identify the taxpayer (name, plan number), issue(s), form number, years covered and the corresponding statute date(s). State whether you followed Counsel’s recommendation and, if applicable, whether you’ll send the POA a copy of the letter. See IRM 4.71.14 Exhibit 21, Form 1725 90-Day Buckslip. Reminder: Send separate emails for each 90-Day Letter package (complete with all attachments) to the Mid-Atlantic Area Manager (with a cc to the MR manager) for all packages requiring approval. When the MR manager returns the approved Form 1725 (buck slip) and the Mid-Atlantic Area Manager returns the electronically signed letter: Reminder: Upload approved Form 1725 into the RCCMS Office Document folder and note in your CCR that the Mid-Atlantic Area Manager approved the issuance of the 90-Day Letter package.. Ensure that the certified mail receipt tracking number is print on the approved 90-Day Letter package. Mail the approved 90-Day Letter package with the required enclosures to the taxpayer using certified mail. Caution: Prior to mailing the 90-Day Letter package to the taxpayer or providing a copy to the POA, ensure that if required, a complete and accurate Form 13496 has been uploaded in to the RCCMS case file. Form 13496 is required if the return is a Substitute for Return (SFR) for a Form 5330 or Form 990-T and the IRC 6651(a)(2) penalty (failure to pay) is asserted. See IRM 4.71.14.7.1.1.1 for instructions on completing Form 13496. Ensure that you upload the 90-Day Letter and the enclosures into RCCMS using the RCCMS naming conventions. Reminder: Ensure that the documents provided to the POA are also included in the RCCMS electronic case file. Ensure that the Administrative Record index, if any is updated to include the 90-Day Letter package.. Update the case to status 24 (90-Day) through RCCMS immediately after you mail the 90-Day Letter to the taxpayer. Note: When the case is updated to status 24 in RCCMS, make sure the AIMS box is checked so that AIMS gets updated when the "update" request is made. Get a new AMDISA that shows the update. Place the electronic print in RCCMS. If the taxpayer has a valid representative, prepare a separate 90-Day Letter package for the POA. Verify that all years listed on the 90-Day Letter are listed on Form 2848 or Form 8821. If not, get a revised Form 2848 (or Form 8821). Otherwise, you can’t mail the 90-Day package to the representative. Note: A taxpayer may use different representatives for different years. Ensure that the documents provided to the POA is uploaded to the correspondence section of the RCCMS case file. Ensure that the status code was updated to status 24 (90-Day). Get a "new" AMDISA transcript for each year and upload it to the respective electronic case file. Reminder: Add 150 days to the statute on the RCCMS record. After you issue the 90-Day Letter, place a reminder 90 days out from the date of issuance on your outlook calendar to determine whether a petition was filed in tax court. You can a find this information at www.ustaxcourt.gov, by selecting "Docket Inquiry," and searching by name to determine if the taxpayer has petitioned the Tax Court. Note: A "P" at the end of the docket number indicates a retirement plan case. Note: If there is no record of a petition, allow an additional 7 to 10 days to pass before conducting a search for a petition. The additional time past the 90-Day period is to allow for time lags in mailing and inputting information. If the recipient of the Final Revocation Letter or SNOD files a petition with the U.S. Tax Court: Contact the Area Counsel responsible for the case to let them know the taxpayer filed a petition and that case is being closed to Counsel. Ask the Counsel attorney if they want the Administrative Record mailed directly to them (if there is a paper Administrative Record). Prepare the case for closure: Complete the RCCMS Closing Record. See IRM 4.71.14.8, Case Closing. Upload all relevant documents into the RCCMS Office Documents folder using the RCCMS Naming Convention. Request transfer the of the RCCMS case to the MR manager who will close the case to the TE/GE Closing Group on AIMS and RCCMS. MR manager or designee: If Case Closing to Then ... Counsel Email the AIMS Coordinator and TE/GE Closing Group Manager to notify them of the case closure to Counsel and requesting that the status code be updated to "51" . When the status code updated to "51" , transfer the RCCMS file to Counsel. Note: Send email to notify of the transfer. Make sure the Administrative Record is properly completed in RCCMS. If there is a paper Administrative Record, mail it directly to the Counsel Attorney or the local Appeals Office supporting that Area Counsel. Forward acknowledged Form 3210 to the TE/GE Closing Group manager Closing Unit Email the AIMS Coordinator and TE/GE Closing Group Manager to notify them of the case closure . Transfer the RCCMS file to the Closing unit for further processing. If MR receives information while the case file is in appellate review, notify the Appeals Office or Counsel immediately. 4.71.14.7.1.5.1 (08-26-2021) Transfer to 90-Day Reviewer This section applies to cases transferred to the "90-Day Reviewer" ; the reviewer designated by the MR manager to issue 90-Day Letter packages. Effective on the date of transfer, the 90-Day Reviewer is entirely responsible for the case (including protecting the SOL) and it’s closure. Before transferring the case to the 90-Day Reviewer: Complete the "Person to Contact" section of the letter using the 90-Day Reviewer’s information (address, ID, and phone number). Ensure that the following is located in the RCCMS Office Document Folder: Entire 90-Day Letter package(excluding any pubs and notices) Note: The 90-Day Reviewer is responsible for including the current version of all pubs and/or notices with the 90-Day Letter when he/she mails it to the taxpayer. Approved Form 1725 indicating the Mid-Atlantic Area Manger approved the issuance of the 90-Day Letter. Entire 30-Day Letter package Reminder: Ensure that the 30-Day Letter documents the certified mail number and that it had been dated and executed. Copy of applicable return(s), all forms, all workpapers, and all research Copy of all correspondence Reminder: Ensure that all documents were saved to the RCCMS Office Documents folder using the RCCMS Naming Convention. Ensure that the Administrative Record is correctly prepared per IRM 4.71.3.6.4.1, Maintaining the Administrative Record File, for Form 5500 cases involving revocation or non-qualification. See IRM 4.71.14 Exhibit 12 at IRM 4.71 - Employee Plans Examination Exhibits for an Administrative Record index template. Complete the RCCMS Closing Record. See IRM 4.71.14.8, Case Closing. Request transfer of RCCMS case to the 90-Day Letter Reviewer. 90-Day Reviewer: When you receive the complete case file (RCCMS files, paper case files and the 90-Day Letter package), review the 90-Day Letter package: Immediately, if the statute of limitations expires within 45 days. Within 10 workdays, if the statute of limitations expires in more than 45 days. 90-Day Reviewer: Review the 90-Day Letter Package Make any necessary minor corrections to the 90-Day Letter package. Contact the original reviewer to discuss any significant corrections identified to see if all facts are understood and to determine if a solution can be reached. If there is a difference in opinion between the 90-Day Reviewer and the original reviewer on the type or extent of the change(s), the MR manager resolves any differences and determines if the case will be returned to the original reviewer. If the taxpayer has a representative, make sure that all years listed on the 90-Day Letter are listed on Form 2848 or Form 8821. Note: If not, get a revised Form 2848 (or Form 8821) from the taxpayer or POA. If all years aren’t listed and you don’t receive a revised form, don’t send a 90-Day Letter package to the POA. Proceed to issue the 90-Day Letter. See IRM 4.71.14.7.1.5.3, Issuance of the 90-Day Letter Packages. Process the case per IRM 4.71.14.7.1.5, 90-Day Letter Procedures, paragraphs (19) through (31). 4.71.14.7.1.5.2 (08-26-2021) Statutory Notice of Deficiency (SNOD) A SNOD is the 90-Day Letter IRS issues for Forms 5330, 990-T and 1040/1120 discrepancy adjustments. Note: Final revocation and final non-qualification letters aren’t, per se SNODs since no direct tax deficiency results when the letter is issued. Follow the same general 90-Day procedures in IRM 4.71.14.7.1.5.2, 90-Day Letter Procedures, for a SNOD. A SNOD is the Commissioner’s, as a delegate of the Secretary legal determination of the taxpayer’s tax liability. Director, EP Examinations and Area Managers are authorized to sign the SNOD, on the Commissioner’s behalf. A taxpayer must file a Tax Court petition within 90 days (150 days if the taxpayer is outside the United States) after IRS mails the SNOD. Note: All references in this manual to the 90-Day Letter include the 150-Day Letter, when applicable. All SNODs must specify the date the IRS has determined to be the last day for filing a petition with the Tax Court. A SNOD for Form 5329, Form 5330 or Form 990-T includes: Letter 531-B Pub 1 Pub 594 Form 870-EP Notice 1214 Revenue Agent Report (Form 886-A) Return envelope Note: If a SNOD is being issued for a Form 1040 and a SNOD also needs to be issued for IRC 4973, IRC 4974 or IRC 72(t) tax for the same taxpayer for the same year, only one SNOD will be issued. These taxes will be added to the Form 4549 and the issues added to the Form 1040 RAR. These will be mailed out with Letter 531-A. A SNOD for Forms 1040 and 1120 includes: Letter 531-A Form 4549-E Revenue Agent Report (Form 886-A) Form 4089 (See IRM 4.71.14 Exhibit 27 at IRM 4.71 - Employee Plans Examination Exhibits for an example of Form 4089) Notice 1214 Pub 1 Pub 594 Return envelope Reminder: Reviewers that transfer cases to the 90-Day Reviewer to issue a SNOD, don’t need to send copies of publications and notices with the paper case file. The 90-Day Reviewer will add those documents to the SNOD package. Send the SNOD by certified mail to the taxpayer's last known address. If the taxpayer’s current address is not known, get an INOLES print to determine the last known address. If the SNOD is for a jointly filed Form 1040, you must send a duplicate copy of the SNOD by certified mail to each spouse at his or her last known address, even if they reside at the same residence. 4.71.14.7.1.5.3 (12-20-2018) Issuance of 90-Day Letter Packages When the Mid-Atlantic Area Manager electronically signs the letter and the MR manager returns the approved Form 1725 (buck slip): Prepare the mailing envelopes and PS Forms 3800 (certified mail). The PS Form 3800 stays on the prepared envelope until it’s date-stamped by the post office. Then staple PS Form 3800 to the first page of the file copy of the 90-Day Letter in the Administrative Record (Form 5500) or in the case file (Forms 1040, 1120, 5329, 5330, 990-T). When the reviewer or 90-Day Reviewer receives the signed green card with the post office stamp (tear away portion), staple it to the bottom left of the first page of the file copy of the 90-Day Letter. If there is a representative copy, staple it to the representative’s copy of the letter. Note: Include in each file folder a complete file copy of the 90-Day package. On the bottom of the copy of the 90-Day Letter notate, "Copy of letter sent to taxpayer." Include the Counsel approval memo (or email) on the inside left of the first file folder with the letter addressed to the taxpayer If a representative received a copy of the letter, place it in a separate folder with nothing on the outside of the folder (except a post-it note saying "rep" ). Include in the folder, Letter 937-A and the same attachments as the folder containing the letter to the taxpayer. Save the signed and dated copy of the 90-Day Letters package in the RCCMS Office Documents folder using the RCCMS Naming Convention. Update the case to status 24 (90-Day) through RCCMS immediately after you mail the 90-Day Letter to the taxpayer. Note: When the case is updated to status 24 in RCCMS, make sure the AIMS box is checked so that AIMS gets updated when the "update" request is made. Secure a new AMDISA showing the update. Save it in the RCCMS Office Documents folder using the RCCMS Naming Convention. 4.71.14.7.1.5.4 (08-26-2021) Statute Considerations Generally, the issuance of the 90-Day Letter suspends (extends) the statute of limitations: 150 days (90 days to petition tax court plus, an additional 60 days to process the case) for taxpayers in the United States. 210 days (150 days to petition tax court plus, an additional 60 days to process the case) for taxpayers outside the United States. However, by signing Form 870-EP or Form 4089 the taxpayer waives his/her right to petition tax court. As a result, the additional time by which the statute of limitations was "extended" (by the issuance of the 90-Day Letter) is shortened by the amount of time remaining from the date the taxpayer signed Form 870-EP or Form 4089 to the deadline to petition tax court. Example: Assume IRS issues a SNOD on June 1, 2020, for a Form 5330 return with a statute expiration date of July 31, 2020. The taxpayer has 90 days (until August 30, 2020) to petition tax court. The statute of limitations would be "extended" to December 28, 2020, (150 days are added to the original statute date) by the issuance of the 90-Day Letter. However, if the taxpayer signs Form 870-EP on June 21, 2020 (with 70 days remaining in the 90 day period), the statute of limitations would be shortened by 70 days to October 19, 2020. Update the statute of limitations on AIMS and RCCMS after you mail the 90-Day Letter and when the taxpayer signs Form 870-EP or Form 4089. 4.71.14.7.1.5.5 (12-20-2018) Rescinding Statutory Notices of Deficiency This section does not apply to final revocation and final non-qualification letters. They are not "Notices of Deficiency" and therefore, not subject to this section of the IRM. The Secretary may, with the consent of the taxpayer, rescind any SNOD mailed to the taxpayer. The taxpayer or the IRS may initiate rescission of a SNOD. A SNOD may only be rescinded with the taxpayer’s consent. Whether or not a notice is rescinded is at the Secretary’s discretion. Consult the MR manager when you might need to rescind a previously issued SNOD on a case still in MR. MR must consult Area Counsel before rescinding a SNOD. 4.71.14.7.1.5.5.1 (12-20-2018) Criteria for Rescinding The decision to rescind a SNOD is made on a case-by-case basis. A rescission may be agreed to if: A SNOD has been issued for an incorrect amount. We must advise the taxpayer that, once rescinded, we may issue another SNOD for a different amount. The SNOD was issued to the wrong taxpayer. The SNOD was issued for the wrong tax period. The taxpayer submits information establishing the actual tax due is less than the amount shown in the SNOD. Other extenuating circumstances warrant rescission. IRS won’t enter into a rescission in any of these situations: On the date of the rescission, 90 days or less remains before the expiration date of the period of limitations on assessment. The 90-day period under IRC 6213(a) has expired without the taxpayer filing a petition with the Tax Court. The taxpayer has filed a petition with the Tax Court. The taxpayer and the IRS, executed a Form 872–A covering any of the tax years in the notice of deficiency, before the notice of deficiency was issued. However, a notice of deficiency may be rescinded in this situation if before rescinding the notice of deficiency the taxpayer and the IRS execute a new Form 872–A covering the same tax years as the earlier Form 872–A. 4.71.14.7.1.5.5.2 (12-20-2018) Statute of Limitations Considerations Before Rescinding Notice Since the rescission agreement returns the case back to its original statute before the SNOD was issued, carefully consider the statute before you enter into a SNOD rescission. The rescinded SNOD suspends the running of the statute of limitations only for the period during which the SNOD is outstanding. MR must determine a new statute date if they issue another SNOD to make assessments. If there are at least 90 days remaining on the statute, a rescission may be entered into. If less than 90 days remains on the statute, the SNOD will be rescinded only if the taxpayer executes a Form 872 or Form 872–A to extend the statute. If there was a Form 872–A on the case before the SNOD was issued, the rescission won’t be granted unless the taxpayer signs another Form 872–A before the rescission. 4.71.14.7.1.5.5.3 (12-20-2018) Agreement to Rescind Notice of Deficiency Use Form 8626 to get an agreement between the taxpayer and the government to rescind a SNOD. The originator of the SNOD prepares, controls and executes the form. The rescission agreement: Must apply to the same tax periods as the SNOD. Can list more than one year. Must contain all taxable years covered in the SNOD. Enter all tax years covered below the first paragraph under "Tax Year Ended." The rescission agreement must show the same deficiency and penalties as the SNOD. If the SNOD was issued to both a husband and wife, both spouses or authorized representative(s) for the parties must sign the rescission agreement. Prepare Form 8626 in duplicate. Once executed: Attach one copy of the form to the front of the SNOD. Send the second copy to the taxpayer. The rescission agreement is effective on the date the Commissioner or delegate countersigns the Form 8626. Use Letter 2264 (DO) to request the taxpayer’s concurrence to rescind by signing Form 8626. Use Letter 2262 (DO) to send a copy of the executed rescission agreement to the taxpayer. Use Letter 2263 (DO) to advise the taxpayer that the rescission is not being granted and the SNOD will remain in effect. 4.71.14.7.2 (08-26-2021) Non-Bank Trustee Investigation Procedures The reviewer: Determines if the examiner followed the procedures and investigation steps in IRM 4.72.18, Employee Plans Technical Guidance, Nonbank Trustee Investigation Procedures. Note: If the procedures were not followed, prepare a Reviewer’s Memorandum, Form 5456, see IRM 4.71.14.10 and return the investigation case file to the Exam group Verifies that a copy of the Notice of Approval (NOA), Notice of Change (NOC) and copy of any prior investigation closing, if applicable are in the RCCMS Office Document folder. If not, access the NBT sharepoint site and get the file(s) and upload to RCCMS. Verifies that the closing letter, Letter 6118 was prepared, if not create a closing letter using the proforma document located in New Office Documents under the Letters Tab in RCCMS. Note: Letter 6118 has selectable paragraphs. Caution: Ensure that the Letter 6118 is the latest version posted in RCCMS. Verifies the accuracy of the Letter 6118 and the Explanation of Deficiencies, if applicable. Caution: Common mistakes include the following: Incorrect accounts are listed on the Letter 6118. Example: The accounts listed are not those on the NOA or any NOC. The Letter 6118 include wrong dates. Example: NOA’s date is not correct. Example: Date of prior closing letter is not correct. The Letter 6118 is addressed incorrectly. Example: A NOC was submitted, yet old address was used. The Explanation of Deficiencies include grammar and punctuation errors. Plain language was not used to draft the Explanation of Deficiencies. Mail or EEFax the dated and signed closing letter and Explanation of Deficiencies, if applicable to the NBT and a copy to the POA, if applicable. Ensure a copy of the dated and signed closing letter and Explanation of Deficiencies, if applicable is contained in the RCCMS Office Document folder using the naming conventions specified in IRM 4.71.12, Exhibit 1 - RCCMS Naming convention. Note: Effective July 28, 2020, all cases including NBTIs are electronic files. All documents secured during the investigation should be uploaded into the RCCMS Office Document folder. If a paper document was secured, scan it and name it. Ensure that the files to be uploaded by the EPCU are properly named, see IRM 4.71.12.1, EPCU Scanning of Closed Investigation files and Upload to NBT Shared Drive. Complete the Closing Procedures specified in IRM 4.71.14.8, Case Closing. Email the MR manager that the NBTI is ready to close and includes a copy of the final closing letter. The MR manager: Review the file for accuracy and ensure the closing record is complete. Note: The disposal code of any NBTI other than a revocation is RCCMS 210/AIMS 01. A revocation uses RCCMS Disposal Code 211/AIMS 09. Assigns the reviewed NBTI case to the designated EPCU tax examiner in RCCMS for copying the office documents to the shared drive. The EPCU tax examiner: Upload the electronic case file to the NBTI shared drive. Once the case file is uploaded to the NBTI shared drive, the tax examiner will request case closure back to the manager. The MR manager will then close the NBTI case to the closing unit. 4.71.14.8 (08-26-2021) Case Closing As provided in the July 28, 2020 Interim Guidance Memo (IGM) TEGE-04-0720-0014 with the subject line, Interim Guidance on Fully Electronic (100% Paperless) Cases, from the Director, EP Examinations, all cases are now closed fully electronic. Save all workpapers, returns, forms, letters, etc., in the RCCMS Office Documents folder using the RCCMS Naming Convention. See IRM 4.71.1 Exhibit 2 at RM 4.71 - Employee Plans Examination Exhibits for the RCCMS Naming Convention. Make sure all relevant case related documents received from the taxpayer or POA are scanned and saved in the RCCMS Office Documents folder using the RCCMS Naming Convention. Ensure that any other document necessary to document the examination trail is saved in the RCCMS Office Documents folder. Keep all records you upload into RCCMS or determine are no longer relevant to the case file per normal record retention requirements outlined in IRM 1.15.2. All unagreed cases are to be fully documented electronically in the RCCMS Office Documents Folder. Form 5650 and 5599 are no longer required to be completed for any EP Examination or investigation case. The relevant RCCMS tabs for closing will be utilized in lieu of Form 5650 or 5599. See IRM 4.71.14.8.1, IRM 4.71.14.8.2, and IRM 4.71.14.8.3. Validate the RCCMS Compliance and Closing Record for "Close" . You must complete any field that appears in red and other relevant tabs depending on the type of disposal code being used. Select the "Update AIMS" box, if applicable. Close the RCCMS Case file record to the MR manager Select the activity(s) you want to closed for the list view. Select “Actions” from the top line menu Select “Request Closure” Type comments in “request closure” dialog box, if necessary 4.71.14.8.1 (08-26-2021) Completing the RCCMS Closing Record Ensure that the "Validate for.*" is set for "Close" . Complete the following fields on the RCCMS Closing Record "General tab" regardless of the Disposal Code: Note: These fields are highlighted in red. The "Disposal code" field should be completed reference IRM 4.71.14.8.2. The "Closing with" field requires one of the following items to be selected, as applicable: Option Reason for selection 1- Original Return This is a rare selection for EP examination and should only be selected if you are closing an activity with an original return that has not been accepted, filed, or processed by any other function 2- Taxpayer Return Select this option when the return for the activity is a copy of a return received from the taxpayer. This would be selected if you get a delinquent Form 5500/5330 and submit a copy of return with your examination (the original was processed through DOL or Classification or the Service Center). 3- Electronic Prints Select this option if the return used for the examination was the one provided in RCCMS and you are closing the examination with a paper file (or a partial paper file). 4- Paperless Examined Select this option if the return used for the examination was the one provided in RCCMS and you are closing the examination fully electronic. Select this option for NRU closures that are paperless. 5 - No Return Select this option when there is no return for the activity, such as a non-filer substitute for return (SFR), an error closure (Form 10904), or a Non-Return Unit (NRU) examination with a paper file (or partial paper file) 7- Paperless Non Examined Select this option for an all electronic case that is NOT examined, such as an all-electronic survey. Dependent on the Disposal Code, these fields on the RCCMS Closing Record "General tab" should be completed: Disposal Code Field Required Action 102 Penalty Reason Code This field should be completed when processing a claim and it was determined that the assessed penalty should be abated. Select the appropriate code from the pull down menu. Note: This field may not be highlighted 102 "ARDI Code" Select the appropriate code from the pull down menu, if a closing agreement was secured. 104 "Fax Indicator" Check if a closing agreement was secured via EEFax. If not, leave blank. Note: This field may not be highlighted 601 "Appeal Office Code" Select 131 from the pull down menu if an Appeals Protest was provided. 603 "Unagreed Petition to Tax Court" Select 231 from the pull down menu if a petition to tax court was filed timely. Ensure the following fields on the "Details tab" of the RCCMS Closing Record are completed for all closures regardless of disposal code: "Total Deductions Claimed" enter deductions claimed for contributions to the specific plan and year to which the RCCMS record relates. Do not include salary deferrals. If “deductions” is not a selected issue, enter the employer contribution amount listed on line 2a(1) of Form 5500 Schedule I or Schedule H (as applicable). If the amount deducted is $0 or $1, enter $1. Note: If you are working an EP Large Case Support Examination coordinated with LB&I or EO and only one return is established on RCCMS and AIMS, enter the total deduction taken for all corporate tax years and for all deferred compensation arrangements qualified or otherwise. "Total Trust Assets" enter total trust assets as of the end of the plan year. Must be at least $1. "Number of Participants Affected" enter the number of participants that were directly affected by the examination (e.g., a change in account balance or vesting percentage). Must enter 0 if none are directly affected (cannot be left blank) Note: A participant is not considered directly affected merely because the plan could have been disqualified. "Examiner’s Time" enter the examiner’s time on the case. "Technique Code" select the technique code from the pull down menu. "Examiner’s Name" select the examiner’s name from the pull down menu. "Reviewer’s Name" select the reviewer’s name from the pull down menu. For Form 5500 exams ensure that all administrative record items have been scanned and saved into the RCCMS Office Documents folder using the RCCMS Naming Convention. Note: The RCCMS Naming Convention now includes section 4.XX for administrative record items. List items in order of the administrative record index. The naming convention for the administrative record would start with the administrative index and proceed in order of the listed items. See paragraph (4) of IRM 4.71.3.6.4.1, Maintaining the Administrative Record File. 4.71.14.8.2 (08-26-2021) Disposal Codes The disposal code indicates the examination's outcome to be reflected in the RCCMS closing record. Refer to Document 6476 for a list of disposal codes, disposal code reporting priority and the AIMS/RCCMS disposal code crosswalk. The following are the common disposal codes used by MR: 102= "Agreed Tax or Penalty Change" 104= "Closing Agreement" 107= "No Change" 205 = "Change to Related Return" 210= "No Change with Adjustments" Note: Generally, this code is used to close an agreed claim disallowance or a NBTI. 211= "Revocation - Agreed" 601= "Appealed - Protest to Appeals " 603= "Unagreed - Petition to Tax Court" 604= "Unagreed - Without Protest" Note: Disposal Code 604 is used when no response to a 90-Day Letter was provided or a petition to Tax Court was not received within the 90 day period. Carefully select the correct disposal code to ensure that— The accomplishments of the examination program are accurately reported for monitoring and reporting purposes and Returns with examination potential are identified for examination. If more than one disposal code may apply, use the priority order specified in Document 6476 under the heading "Disposal Code Priority" . Note: The priority order has been developed with field input and gives priority to examination actions that foster voluntary compliance with the qualification requirements reflecting our regulatory responsibilities to plan beneficiaries. 4.71.14.8.3 (08-26-2021) Completing the RCCMS Closing Record with Assessments or Adjustments The TE/GE Closing Group makes tax and penalty assessments from the amounts that are listed by the examiner on the Individual/Business (1 of 3) Tab of the RCCMS closing record. Therefore, be careful to input the correct amounts. If the case is partially agreed, indicate that the file is a partial agreement on top left corner of the General Tab of the RCCMS Closing Record. Validate cases for closure in the RCCMS closing record and complete the applicable fields using the table below. Note: All items highlighted in red are required to be completed as well as additional items as specified in the table below. Note: Refer to IRM 4.5.2, TE/GE Examined and Non-Examined Closures, and Document 6476 for additional Information. RCCMS TAB ITEM EXPLANATION General Penalty Reason Code No entry unless penalties previously assessed are being abated. See Exhibit 4.5.2-2, TE/GE Penalty Reason Codes, of IRM 4.5.2, TE/GE Examined and Non-Examined Closures for applicable codes. General ARDI Code An entry is required only if the disposal code is "102" . Leave blank if case is being closed "no change" or is unagreed. General Appeals Office Code Enter 131 if the case is going to Appeals. Individual/Business (1 of 3) Agreement Date Insert the date the signed Form 4549-E or Form 870-EP is received. Individual/Business (1 of 3) Assessment Information Tax Insert code "300" and the amount of the increase in tax as shown on line 14 of Form 4549-E, Form 870-EP, or the amount you are assessing if the taxpayer fails to timely petition tax court. insert code "301" and the amount of decrease in tax resulting from the discrepancy adjustment. Note: If you previously forwarded an agreed delinquent return that the taxpayer voluntarily filed with you to the Ogden Service Campus, the tax assessment would have been made at the Service Campus when the return was processed. In order to avoid double assessment, do not reflect an additional tax amount. Individual/Business (1 of 3) Assessment Information Penalties Insert code "320" and the penalty amount for civil fraud penalties. Insert TC 160 for the amount of any delinquency penalty to be assessed on late filed returns. Insert TC 270 with the corresponding amount for the IRC 6651(a)(2) penalty to be assessed. Insert TC 320 and the penalty amount for civil fraud penalties. IRC 6651 penalties can be abated by entering TC 161 (for IRC 6651(a)(1)) and TC 271 (for IRC 6651(a)(2)), as applicable, with the corresponding amounts. Note: Accuracy related penalties should be reflected by Reference Number under Credit and Tax Computation Adjustments. Individual/Business (1 of 3) Interest Leave blank. Interest will be computed and input by TE/GE Closing Group. Individual/Business (1 of 3) 2% Interest Date Input the date of the IRS issued a 30-Day or 90-Day Letter and only when the taxpayer hasn’t paid the amount due within 30 days of the 30-Day or 90-Day Letter date (whichever is issued first). Caution: This additional interest only applies to "C" corporations on understatements of $100,000. See IRM 4.71.14.7.1.4. Individual/Business (1 of 3) Reference Number Form 5330 - If additional tax is being assessed on a previously filed return (i.e., you entered TC 300 with an additional tax assessment), then a reference number (manual abstract code) should be listed here with the additional amount of tax being assessed. See the table in paragraph (4) for applicable reference numbers. Form 1040/1120 - See IRM 4.71.4.12.1(3) Form 5329 - IRM 4.71.27.6.4(1) Individual/Business (1 of 3) Unagreed Amount Enter the tax and negligence penalties if the case is going to Appeals. Examples of reference numbers for Form 5330 are: Reference Number Condition 159 Prohibited transaction (IRC 4975(a)) 224 Prohibited transaction (IRC 4975(b)) 161 Nondeductible employer contributions (IRC 4972) 163 Minimum funding (IRC 4971(a)) 225 Minimum funding (IRC 4971(b)) 164 Excess contributions (IRC 4973) 203 ESOP prohibited allocations (IRC 4979A) 204 Reversions (IRC 4980) 4.71.14.8.3.1 (08-26-2021) IRC 6621(c) - Additional 2% Interest If IRS assesses tax on a corporation of $100,000 in any given tax year, IRC 6621(c) imposes additional interest of 2% interest on amounts due. For EP exam purposes, section 6621(c) applies to Forms 5330 and to Form 1120 discrepancy adjustments. IRC 6621(c) applies only to "C" corporations. Note: IRC 6621(c) doesn’t apply to individuals, trusts or "S" corporations. The additional 2% interest only applies when IRS issued a 30-Day or 90-Day Letter and only when the taxpayer hasn’t paid the amount due within 30 days of the 30-Day or 90-Day Letter date (whichever is issued first). Ensure the additional 2% interest is assessed, enter the date the 30-Day or 90-Day Letter was issued (whichever is issued first) in the "2% interest date:" field on the "Individual/Bus. (1 of 3)" tab of RCCMS Closing Record. See for additional information on completing the RCCMS Closing Record. Note: If providing an optional Form 5599 in the case file, enter the date the 30-Day or 90-Day Letter was issued (whichever is issued first) in item 03 of Form 5599. Enter the amount of tax and penalties due for the year in item 04 of Form 5599 . See IRM 4.71.14.8.4 for additional information on completing the optional Form 5599. Caution: The additional 2% interest for each year if tax of $100,000 or more is proposed against a C corporation in any single tax year. 4.71.14.8.4 (08-26-2021) Completion of the Optional Form 5599 Completion of the Form 5599 is optional. Currently, the appropriate fields in RCCMS do not indicate that an entry is required. It may be beneficial to prepare a Form 5599 to assist the closing unit to make the adjustment. The following table when closing Forms 5330, Forms 990-T, Forms 1040/1120 discrepancy adjustments and MFT 99 Non-Return Unit (NRU) examinations. Note: The concepts for completing the optional Form 5650 or 5599 are reflected in IRM 4.5.2 and still apply for RCCMS tab completion to ensure relevant IDRS fields are addressed at closing. ITEM EXPLANATION P7-18—TIN Insert the taxpayer’s EIN or SSN. Use a file source of "V" with an SSN (for example, 123-45-6789V) for a Form 5330. P21 - 22— MFT Form 1040 = 30; Form 5329 = 29; Form 1120 = 02; Form 5330 = 76; NRU = 99; Form 990-T = 34. P24 -29 — Tax Period Insert the tax year being adjusted. P31-34—Name Control Insert the first four letters of the last name for individuals or the first four letters of the name for other entities as found on an AMDISA print. P53-55— Plan/Report Number For Forms 5330, enter the number of the related plan. C—Name Insert taxpayer's name (last name first for Form 1040). 03-30/90 Day Letter Date Enter the date the 30-Day or 90-Day Letter was issued (whichever is issued first) to indicate that the additional 2% interest is to be assessed. Caution: Complete Form 5599 item 04 for each year if tax of $100,000 or more is proposed against a C corporation in any single tax year. 04-30/90 Day Letter Enter the amount of tax and penalties due for the year Caution: Complete Form 5599 item 04 for each year if tax of $100,000 or more is proposed against a C corporation in any single tax year. 08—Agreement Date Insert the date the signed Form 4549-E is received (if applicable). 12—Tax Liability Adjustment Enter a transaction code of 300 and $0 if no additional tax is being assessed above what is shown on the return the examiner or reviewer secured. If you’re assessing tax above what was reported on a filed return, enter a transaction code of 300 and the additional amount of tax being assessed. 12—Penalties Insert Code "320" for civil fraud penalty and amount of penalty. If Form 870-EP is signed by the taxpayer and the examiner is assessing IRC 6651 penalties, enter transaction code 160 and the amount of penalties being assessed. Note: If IRS secures a delinquent Form 5330 and forwards it to Ogden, the Campus will assess penalties on the return unless the examiner provides instructions to the contrary. Note: IRC 6662 penalties should be reflected on item 15. 13—Disposal Code 01 = "No Change with Adjustment" : Use to close an agreed claim or a claim that is not protested to Appeals. 02 = "No Change" 03 = "Agreed Tax Change" 06 = "Delinquent Return Secured" 07 = "Unagreed - Protest to Appeals" 10 = "Unagreed - Without Protest" 11 = "Unagreed - Petition to Tax Court" 12= "Closing Agreement" 14— Statute Extended to If the statute was extended, insert the current (extended) statute of limitations date. If the statute has not been extended, leave this item blank. Note: Don’t use alpha codes in the blocks for item 14. If the statute has been updated to an alpha code (for example, 12/EE/2021), write the alpha code statute to the right of the blocks; enter the actual numerical statute in the blocks (for example, 12/31/2021). 15— Credit and Tax Computation Adjustments Leave this item blank, if the dollar amount in item 12 is $0. If line 12 contains a dollar amount (for example, additional tax is being assessed on a previously filed return), then list a reference number (manual abstract code) here with the additional amount of tax being assessed (additional tax being assessed is listed in both items 12 and 15). Examples of reference numbers are: IRC 4971(a) = 163 IRC 4971(b) = 225 IRC 4972 = 161 IRC 4973(a) = 164 IRB 4975(a) = 159 IRC 4975(b) = 224 IRC 4979 = 205 IRC 4979A = 203 IRC 4980 = 204 IRC 6662 = 680 IRC 6707A = 648 UBIT = 886 16— Appeals Office Code An entry is required when the taxpayer files a protest to Appeals or petitions tax court. The applicable codes are as follows: 121 = Protest to Appeals (non-docketed case) 221 = Petition Tax Court (docketed case) 18— Unagreed Amount If the case is going to Appeals, enter the amount of tax and all penalties (except IRC 6651(a)(2)) for the year. 28— Examiner’s Time Enter time in whole hours and in tenths of hours. 30— Technique Code Applicable codes: 4 – Use when all issues were examined (training cases, certain project cases, cases with extenuating circumstances). See IRM 4.71.1.5(3) for additional guidance. 7 –Use for all examinations except those meeting the technique code 4 criteria 31— Examiner’s Grade Enter applicable grade level. 32— Case Grade Enter the grade of the case in the blocks from left to right as two digits: Grade 9 = 09 Grade 11 = 11 Grade 12 = 12 Grade 13 = 13 33— Examiner’s Name Enter last name, leave a space and then enter the first initial. 37— Delinquent Return Code Enter the delinquent return code if a delinquent Form 5329, 5330 or 990-T is picked up. If there is only one delinquent return, enter a "T" . If there’s more than one delinquent return, enter a "T" in the latest year and an "R" in all prior years. No entry if the return is a SFR. 40— Special Project Code Use the same project code as used for Form 5500. 41a— No Change Issue Codes Enter "99999999" for Form 1040 with Disposal Code "02" . Otherwise, no entry is required. 42— ARDI Code An entry is required only if the disposal code is "03" . Leave blank if case is being closed "No Change" or is "Unagreed" . Applicable Codes Are: 1— Fully Paid 2— Not Paid 3— Partially Paid 4— Installment Agreement with payment 5— Installment Agreement without payment 50— Employee Group Code Enter the group number of the examiner who worked the case. I— Reviewer Enter your name and the date the form was completed. Note: Check the box at the bottom of page one to indicate that there is an entry on page two, if applicable. 701— Principal Issue Code For Form 1040/1120 discrepancy adjustments, use Code "27" in most cases. See Document 6476 for additional information. 414- Delinquent Return Amount Leave blank. 415 - Amended Return Amount Leave blank. Reminder: Be sure that the completed file is saved in the RCCMS Office Documents Folder 4.71.14.9 (08-26-2021) Agreed Cases Reviewed Per Management Request Sometimes, management requests MR to review certain open agreed cases. After reviewing these cases the reviewer: Gives requested feedback to management on Form 5456 or any other form of communication the MR manager determines. Close the case to EP Examinations, Support Processing, or return the case to the group, as applicable. The reviewer won’t reopen an agreed issue, or open or elevate a new issue, unless the nature for proposing this is significant or the potential effect upon the tax liability is material. Cases are returned to the field group only if the field group manager agrees. 4.71.14.10 (08-26-2021) Form 5456, Reviewer’s Memorandum MR uses Form 5456, Reviewer’s Memorandum, to communicate necessary information for reviewed cases with the examiner who worked the case and their group manager. Form 5456 can be used in three ways: An Advisory Memorandum - used to let the group manager and examiner know of issues MR found during their review and how they resolved them. MR doesn’t return cases when they issue an Advisory Memorandum. A Correction Memorandum - prepared when significant issues are present in the exam that warrant the case’s return to the group for the examiner’s further development. A Commendatory Memorandum - issued when an examiner does an exemplary job on an exam with difficult issues. Address Form 5456 to the examiner’s manager who worked the case. Clearly explain each issue you are raising. Use Form 886-A if you need additional space. Email Form 5456 to the MR manager (or designee) for approval. The MR manager contacts the exam group manager to discuss the reviewer’s memo, and if the case is being returned, explains why. Note: The MR manager must call field group manager before returning a case with less than 180 days remaining on the statute. Send these cases to the group by express mail (next day). Reviewer: For Form 5456 Correction Memos: Update the CCR stating that the case is being returned with an explanation of the reason. Upload the approved version of Form 5456 and any additional files prepared by the reviewer into the RCCMS Office Documents folder using the RCCMS Naming Convention. Update the case in RCCMS to status 12. Note: The case remains in status 12 until closed from the field group. Reminder: For NBT cases returning to the Group, the update to status 12 is done manually through AIMS, as follows: Complete and forward the Form 5595 to MR group manager: Check boxes for"EP" and "CC AMSTU" with Definer "P". In box 8, insert originator's name. In box 00, insert the case EIN with suffix "N" , the year, case name "nonbank trustee case XXXXXXX" , and "update to Status 12" . In box 01, insert "NBTI case returning to group 7XXX in SC 12" . Caution: Forward the completed Form 5595 to the MR manager using encrypted email. Transfer the RCCMS files to the MR manager (or designee) who closes the case back to the exam group. After receiving the MR manager’s permission, prepare Form 3210 and mail the case to the group. Reviewer: For Form 5456 Advisory or Commendatory Memos, the MR manager approves and MR sends the original Form 5456 (without the case file) to the examiner’s group manager before the case is either transferred to Appeals (disposal code 07), the 90-Day Letter is issued (status code 24), or the case is closed (disposal code 10). The MR manager keeps a copy of the approved Form 5456. When MR returns the case to the field group on Form 5456 (Correction Memo), the field group manager could: Agree with some, or all of the contents of the Memo, complete Form 5457 item 3 and send both copies of Form 5457 with the case file to the examiner. Disagree with the contents of the Memo, select No in item 3 of Form 5457 and prepare a written response on Form 5457 citing the reasons for disagreement. If the group manager disagrees with or has questions about the Memo, he/she will call the MR manager to discuss. If the issue(s) can’t be resolved, a conference call will be arranged between the Area Manager(s), the group manager, the MR manager, the reviewer and examiner. When the examiner receives a case returned on a Form 5456 (Correction Memo), they add the case to their WebETS (EP Technical Time Report) to correctly record the additional time spent to complete the work specified in the Reviewer’s Memo. The field has 60 days to respond to the Correction Memo and return the case to MR, if needed. When the case is ready to be returned to MR, the examiner: Closes the case under normal procedures as specified in the IRM. Completes Form 5457 items 1– 6 using Form 886–A if additional space is needed. Completes Form 5457 (item 5) in the same order as the reviewer’s comments on Form 5456. Fully documents an item raised in the Correction Memo that doesn’t result in an adjustment (for example, a more expansive explanation was warranted or additional information was obtained). Transfers the case with Form 5456 and the completed Form 5457 to the group manager. The group manager: Documents agreement with the responses to the Form 5456 items by completing item 7 on Form 5457. If the case is still unagreed, close the case on RCCMS to MR and mail the paper file, if any with the completed Form 5457 and Form 5456 (including Form 886-A) to MR. When MR receives the returned case, the MR manager assigns the case to the reviewer who prepared Form 5456, if he or she is still in MR. The reviewer considers the responses on Form 5456, by completing items 8–10 on Form 5457 and, if necessary, prepares another Form 5456. After MR accepts the case and the reviewer is satisfied with the examiner’s Form 5457 responses, the reviewer saves the electronic versions of Forms 5456 and 5457 in the RCCMS Office Documents folder using the RCCMS Naming Convention. If the returned case hasn’t been sent back to MR within 60 days, the MR manager will contact the field group manager to discuss the case status. The MR manager will continue to contact the field group manager every 30 days thereafter, until the group returns the case to MR or otherwise resolves it. 4.71.14.11 (12-20-2018) Checksheet for Employee Plans Compliance Activities (CECA Checksheets) The CECA checksheet is required for EP examinations when a Form 5500 series or a NRU exam results in a "change" closure (all disposal codes except 02). Show tax amounts, from a Form 5330 or Form 990-T picked up during a Form 5500 or a NRU exam on the checksheet completed for the Form 5500 or a NRU exam. Don’t complete a separate CECA checksheet for a Form 5330 or Form 990-T exam. Don’t report results from a Form 5330 or Form 990-T exam that has no related Form 5500 exam on any CECA checksheet. Report income tax amounts from a Form 1040/1120 discrepancy adjustment picked up during a Form 5500 or an NRU exam on the Form 5500 or NRU exam checksheet. Don’t complete a separate CECA checksheet should for a Form 1040/1120 discrepancy adjustment. Don’t report results from a Form 1040/1120 discrepancy adjustment that has no related Form 5500 exam on any CECA checksheet. The EP examiner is required to complete the CECA checksheet and save it in the RCCMS Office Documents folder using the RCCMS Naming Convention provided in Exhibit 2 of IRM 4.71.1 IRM 4.71 - Employee Plans Examination Exhibits. If the case is "unagreed" , the field group manager should not mail an “electronic copy” of the checksheet to the CECA mailbox because MR is responsible for emailing the final CECA checksheet for all unagreed cases. Reviewers and MR manager follow the procedures below for CECA checksheets: After completing the final case review (before closing it), update the CECA checksheet, if applicable. Download the current version of the CECA Checksheet from the EP Examination website at: Checksheet for EP Compliance Activities (CECA) Note in the CCR that you reviewed the CECA checksheet and describe any changes made, if applicable. "Secure email" an "electronic copy" to the CECA mailbox (*TE/GE-EP-CECA) only if the issues on the case are resolved and the case becomes "agreed" (for example, the case is not going to Appeals, into 90-Day status or returned to the group per IRM 4.71.14.11 (5)). Note: MR emails the checksheet when the agreed case is closed from MR. For cases transferred to the 90-Day Reviewer, the 90-Day Reviewer "secure emails" the "electronic copy" of the checksheet to the CECA mailbox (*TE/GE-EP-CECA). For cases closed to Appeals, the MR manager (or designee) secure emails an "electronic copy" of the checksheet to the CECA mailbox (*TE/GE-EP-CECA). After the CECA checksheet is forwarded to the CECA mailbox, the individual who submitted the checksheet (such as, reviewer, 90-Day Reviewer, or MR manager or designee) notes its forwarding in the CCR. Save a copy of the CECA checksheet in the RCCMS Office Documents folder. Sometimes, a case may be transferred, back and forth, between the group and MR. In these circumstances, the group who possesses the case file immediately before updating the status code to "51" must forward the CECA checksheet to the CECA mailbox. 4.71.14.12 (12-20-2018) Monthly Reports At the end of each WebETS reporting period, each reviewer validates their assigned case inventory and submits a status report to the MR manager. The number of cases on hand are carefully appraised so appropriate measures are taken to avert potential backlogs. The status of short statute and other high priority cases are determined to take appropriate measures. Each reviewer reports the following information to the MR manager to include in their monthly report: Status of special assignments (if applicable) Speaking engagements and group presentations they conducted Closing agreements secured for cases closed during the WebETS period More Internal Revenue Manual
