Overview, Program Goal, and Purpose:

Audience: Appeals, LB&I, SB/SE, TS, and TE/GE employees using AIMS.

AIMS Policy Owner: The Director, SB/SE Technology Solutions, who is under the Director, Operations Support.

AIMS Program Owner: Exam Systems and Projects, General Exam Systems Support.

Primary Stakeholders: Appeals, LB&I, SB/SE, TS, and TE/GE.

There may be instances when the taxpayer gives the examiner a taxable amended return, Form 1040-X, Amended U.S. Individual Income Tax Return, during an examination. Options for processing the Form 1040-X, Amended U.S. Individual Income Tax Return are:

For taxable amended returns received within 120 days of the ASED see IRM 4.4.25.11, Forwarding Quick Assessments to the Campus, CCP Responsibility.

If the Campus has already assessed the taxable amended return using a TC 290, the tax is input in Item 415 of Form 5344, Examination Closing Record if Examination's TC 420 posted prior to the TC 290 for the taxable amended return. IRM 4.4.12.3.13 for an explanation of Item 415.

This IRM subsection will provide information that examiners will use for the completion of the Form 5344. Specific items not referenced in the IRM can be located in other IRM sections. See IRM 4.4.12, Examined Closings, Surveyed Claims, Partial Assessments, and Closings to Appeals for specific Item Numbers. Policy related instructions can be found in IRM 4.38.1, Centralized Case Processing (CCP), Organization and Responsibilities.

When a MF -C freeze (combat zone) is present on a TP’s account, AIMS will not allow you to open an audit on the taxpayer. However, there are occasions where AIMS controls are opened on a taxpayer who subsequently becomes a combat zone participant.

When a -C freeze is present on a TP’s account, additional research is required to determine if steps can be taken to assess tax or perform other actions.

The -C freeze will stay on the account after the TP is no longer serving in the combat zone. IDRS CC IMFOLE should be reviewed to determine if the taxpayer is still in the combat zone suspense period. The combat zone -C freeze and indicators are located on IDRS CC IMFOLE, Line 11. Combat zone indicator codes are:

The Combat Zone freeze must be released by the local AIMS/ERCS staff before a case can be closed.

Do not confuse AIMS freeze codes with MF freeze codes. AIMS freeze codes only appear on the AIMS database on screen 1 of the AMDISA. They are not reflected on MF.

MF freeze codes appear on MF, for example TXMODA, IMFOLT, BMFOLT, or some of them can appear as an indicator on the AMDISA. An example of a MF freeze code generating an indicator on the AMDISA would be a "97X" in the "MF-TC" field on page 1. MF will reflect a freeze code of "-A" and there would be a TC 976 or TC 977 on the transcript.

A return with an AIMS freeze code will prevent a closure to CCP, therefore, all AIMS freeze codes must be released before cases are sent to CCP except:

The Exam Systems Knowledge Base site contains a complete listing of AIMS freeze codes and contacts at: AIMS Freeze Codes - Local with Contacts.

There are indicators on the AIMS database (appearing on the AMDISA) that prevent a case from closing:

The indicator must be removed or changed prior to sending the return to CCP for closure. For the IRS Employee Indicator refer to IRM 4.2.6.7, Closing an Employee Examination, for the Criminal Restitution Indicator contact Technical Services, for the ICE Indicator contact the National contact in Ogden, UT. All of these contacts can be found at: AIMS/ERCS Staff Listings.

For regular closures, see IRM 4.10.8, Examination of Returns, Report Writing.

See IRM 4.10.15, Examination of Returns, Report Generation Software, for information on saving case file documentation and closing cases through RGS.

For information on EOAD - See IRM 4.10.16, Examination of Returns - Examination Operational Automation Database (EOAD).

The following IRM subsections provide instructions for the Examination and Technical Services employees on closing various types of cases to Appeals.

Generally, returns with less than 365 days on the statute cannot be closed to Appeals. See IRM 8.20.5.3.1.2, Verifying Administrative File Contents and IRM 8.21.3.2.1, New Receipts and Transfers, for exceptions. The statute date must be extended or updated to the appropriate alpha code if one of the exceptions are not met.

Form 5344, Examination Closing Record must be properly completed by the groups before closing the case to Technical Services. Form 5344 is used to enter information into the AIMS that records the results of the audit before the case file is transferred to Appeals. It is very important that the group maintain the accuracy of the AIMS data with respect to the statute date, source code, status code, etc. Accuracy prevents the case from being rejected and returned to the group before it is closed to Appeals.

Form 5403, Appeals Closing Record is used by Appeals to enter information into the AIMS system upon completion of the case. Appeals must also ensure the form is completed accurately.

Taxpayer requests for Appeals consideration will be acknowledged at the group level via Letter 2280, Transfer to Appeals. The case file will be identified as "Unagreed to Appeals" by attaching and completing Form 3198, Special Handling Notice for Examination Case Processing. The group will update ERCS to Status Code 21, In-Transit to Technical Services, and update the TSC. Forward the case file to the appropriate Technical Services office for closure to Appeals. The group will document the case file as to the date the case was forwarded to Technical Services and the date the Letter 2280 was sent to the taxpayer. Technical Services will be responsible for forwarding cases directly to Appeals within 10 calendar days of receipt via Form 3210, Document Transmittal..

If the TP submits a written protest after receiving a 30-Day letter and requests Appeals consideration, the case file and written protest will be transferred to the appropriate Appeals office. If only one protest is received, the entire case file, including the duplicate original preliminary notice of which no response was received, will be transmitted to Appeals by Technical Services. Update ERCS to Status Code 21 and update the TSC. In order to correctly route Appeals cases, visit "Independent Office of Appeals, Case Routing" at Independent Office of Appeals, Case Routing.

Appeals will accept copies of returns except in the following situations: unagreed civil fraud, jeopardy assessments, and delinquent returns. Follow the procedures in IRM 4.8.9, Technical Services - Statutory Notices of Deficiency and IRM 4.8.9.20.1, Notice of Deficiency When the Original Tax Return is not Available, for instructions on securing original returns when necessary.

When a case is urgently needed by Appeals but the account is not yet a full record on AIMS take the following actions:

NMF returns closed to Appeals are processed in the same manner as MF cases with the exception of transcripts that may have to be requested from the Cincinnati Submission Processing Center. Contact your AIMS/ERCS analyst for assistance. Refer to the contact listing to locate your AIMS/ERCS Analyst at: Exam Systems Knowledge Base, AIMS/ERCS Staff Listings.

Multi-year examination cases with different types of closures have special processing requirements within Technical Services. See IRM 4.8.2.3, Cases Requiring Action By Technical Services and IRM 4.10.8.7, Splitting Multi-year Examination Cases, for detailed instructions on processing these types of cases. For additional assistance you may need to contact the local area AIMS/ERCS analyst at Exam Systems Knowledge Base, AIMS/ERCS Staff Listings.

A nontaxable return may be a partnership return, (MFT 06), an S-Corporation (MFT 02) or a trust (MFT 05). When the audit of a nontaxable return causes a tax adjustment on a taxable return, include the nontaxable (reference) returns in the closure package to Appeals.

Complete Form 5344 in the following manner:

In some instances, such as a loss year return, the examination results in an adjustment to income but no tax. When closing these unagreed returns to Appeals follow the instructions below:

Examiners and Technical Services will complete Form 5344, Examination Closing Record according to the instructions in IRM 4.4.12.19.1 and IRM 4.4.12.19.2.

Occasionally, taxpayers will request their case be forwarded to an Appeals office that is not the regular designated Appeals office. The Appeals SharePoint Case Routing into the Independent Office of Appeals contains a guide to help you determine where to forward the case.

There are special instructions on closing penalty cases to Appeals.

See IRM 20.1.13.3.5, Appeals Request - IRC 6707A Overview, for specific processing instructions on these cases.

For guidance on assembly of cases to Appeals, refer to IRM 4.10.12, Case File Assembly for Closing Physical Administrative Case Files.

For fully electronic or paperless closures refer to IRM 4.10.8.12.9.3, Request for Appeals Conference or IRM 4.46.5.11.2.6, General Procedures for Paperless Case Closing to Appeals through Technical Services, for LB&I Manager Actions After Verification of Unagreed Case.

For paperless case files, Technical Services will upload a print of CC AMCLSE or AMDISA, the Appeals Electronic Case Receipt Check Sheet (prepared by exam), the original Form 5344, Examination Closing record, and the Form 3198, Special Handling Notice for Examination Case Processing to the Appeals SharePoint.

All cases referred to Appeals will be handled in a priority manner and sent to the Appeals office within 10 calendar days, via Form 3210.

See IRM 4.8.9, Statutory Notices of Deficiency.