There are a number of judicial actions that may be brought by the United States against taxpayers or third parties. See IRM 5.17.4, Suits by the United States, and IRM 5.17.14, Fraudulent Transfers and Transferee and Other Third Party Liability, for a review of the principal types of actions that may be brought by the United States.

A suit is generally commenced by the filing of a complaint with the court. A copy of the complaint accompanied by a summons must be served upon all persons named as a party to the action. The persons against whom the action is brought are referred to as the "defendants" . The party bringing the complaint is the "plaintiff" .

Advisory is responsible for internal control of and actions pertaining to most litigation by and against the United States. Exceptions where Advisory does not control suits against the United States include:

After receipt of a civil suit recommendation and supporting documents, Area Counsel examines the case carefully from a legal viewpoint to determine whether suit is warranted on the facts presented.

If it is determined that suit is warranted, Area Counsel prepares a suit letter to the Department of Justice, Tax Division (DOJ), authorizing and requesting that a suit be filed.

When DOJ receives the suit letter from Area Counsel, the case becomes the responsibility of DOJ. If DOJ determines that a suit should be filed, the pleadings will generally be prepared and filed by the Tax Division attorney assigned to the case.

Because sufficient time is needed for each step in this process, suit recommendations should be prepared well in advance of the Collection Statute Expiration Date (CSED). See CSED Calculator and IRM 25.3.2.4.5.5, Cases with Imminent CSEDs, below, for further discussion.

The legal authority for Civil Actions by the United States is found in the United States Code, Title 26, Subtitle F, Chapter 76, Subchapter A, Sections 7401 through 7410. Collection uses:

The authority to approve most suit recommendations is delegated to Collection territory managers and Advisory territory managers. However, Area Director approval is required, if the recommendation is to either:

This IRM provides instructional procedures for initiating suits by the Internal Revenue Service. See also IRM 25.3.1.4, Litigation and Judgments, General Guidelines, Authorization for Filing Suits, Counterclaims or Third Party Complaints, regarding the legal authority under IRC 7401 for filing suits, counterclaims, or third party complaints.

IRM 5.17.1, Legal Reference Guide for Revenue Officers, General Information, provides a list of the parties with an explanation of their role with suits.

Program Reports: Suits are individual to the case and are of a wide variety and scope. When it is appropriate the Collection employee will provide a case Narrative Report for Area Counsel and the Department of Justice identifying all pertinent facts so that appropriate legal action may be taken. Narrative Reports are discussed in IRM 5.17.12, Legal Reference Guide for Revenue Officers, Investigations and Reports.

Program Effectiveness: Whenever litigation involving collection matters is pending or the institution of affirmative legal action to effect collection is being considered, revenue officers will, in the main, be investigators of facts. They will be required to prepare reports concerning any facts ascertained. Advisory reviews the revenue officer recommendation package for clarity and completeness. The approving official reviews the package and if the recommendation represents an effective utilization of collection techniques, approves the package for Counsel’s consideration. The lawyers charged with the responsibility make the ultimate decision of whether to proceed but must rely on those facts and reports provided by the revenue officer when making case decisions.

Collection Advisory maintains a copy of any suit documentation until the suit is closed. After case closure see Document 12990, Records and Information Management Records Control Schedules, under section Internal Revenue Service Records Control Schedule (RCS) 28, Tax Administration Collection, in:

Preserving electronically stored information is covered in:

Initiating suit with the Department of Justice (DOJ) requires group manager and advisory review, territory manager approval, and sometimes area director approval, depending on the type of suit. After advisory prepares and transmits the suit referral and transmits it to counsel. Counsel reviews the suit referral and, if appropriate, sends a suit recommendation to the Department of Justice. See Delegation Order 1-23-9, Approval of Form 4477, Civil Suit Recommendation in IRM 1.2.65.3.2, Small Business/Self-Employed Division Delegations of Authority.

eApproval metadata allows for operational review inventory selection.

eApproval Terms see the table in IRM 25.3.2.4.3.1.

For procedural guidelines on recommending, working, and responding to suits and claims for damages both for and against the United States, see:

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 https://www.irs.gov/taxpayer-bill-of-rights, Taxpayer Bill of Rights (TBOR).

Area Counsel is always available for the purpose of rendering legal advice in determining the most desirable course of action available and the probability of success in litigation.

If information is discovered early in the investigation casting doubt as to whether a legal action could be successfully pursued, much time and effort can be saved if timely legal assistance is requested.

In complex cases or cases raising potential legal issues, consult with Area Counsel to ensure that legal action is appropriate in a given case.

Ensure that Advisory is aware of requests for Area Counsel advice and the advice provided. Formal requests for legal assistance must be routed through Advisory, unless there is a local agreement to the contrary.

In order to serve the summons and complaint upon the defendants, the defendants' correct names and addresses must be provided. The addresses provided must be up to date.

If the defendant moves around or has more than one home, provide enough information so that a determination of the defendant's domicile can be made. This is where the taxpayer resides and differs from their "last known address." The correct home address is also important for purposes of determining correct Notice of Federal Tax Lien filing locations and other property rights (e.g., whether the defendant lives in a community property state).

Direct any questions regarding the information needed for service of process to Advisory. If necessary, Advisory will consult with Area Counsel.

Preparation: Review current IRM sections for relevant requirements and local law guides applicable to the type(s) of suit being considered. Discuss any questions about case theories with your manager, with Advisory, or with Counsel to ensure that the recommendation can substantiate the theory pursed from the case facts and evidence gathered.

Submission Timeliness: Counsel needs all suit recommendation submissions in their offices at least nine months before expiration of the earliest CSED in the recommendation. They have the discretion to reject any suit recommendation received after their nine-month cutoff date. For a successful submission, ensure sufficient time is factored in ahead of this cutoff date for case research, case actions, recommendation preparation, review, and approval by the delegated official.

E S I: Identify and preserve all IRM 25.3.1.7, Electronically Stored Information (ESI), that will be subject to litigation discovery.

Theory of the Case:

Statutes: Review all relevant statutes of limitations on assessment, collection, or other actions.

TFRP: Conclude Trust Fund Recovery Penalty (TFRP) determinations and assessments where applicable.

Review all statutory liens and Notices of Federal Tax Lien (NFTLs) and take needed actions to preserve and protect the lien and NFTL.

Plan and perform a complete investigation and gather evidence appropriate to the situation, type of suit, and possible defense strategies. The following paragraphs and tables in this section highlight the aspects of investigation and evidence gathering including the following:

IRM: Review and apply the guidelines provided in:

Interview: are used to develop information and establish evidence. In addition to IRM 5.17.12, guidance on who to interview, where to conduct interviews, preparation and planning, types of interviews, documenting interviews, the interviewee’s rights during interviews, and interview techniques can be found throughout the IRM. For example:

Evidence: Use all possible sources and secure facts and evidence needed to support your recommendation.

Documentation: Use all possible sources to secure the documentation needed to support your recommendation. As soon as the possibility of a suit is recognized begin compiling the supporting documentation.

Property and Value:

It is important to be aware of the different types of time lines that intersect the organization and execution of a suit, and to take appropriate action as necessary.

Written: All suit forms and reports must be typed. The forms are available in ICS, directly through the Publishing web site, or from the Knowledge Management suit site. Use the most current revision of the forms and Suit Forms User Guide available on the Knowledge Management (KM) Suit Resources and Examples page. The User Guide assists with how to use the functionality in the forms and problem solving.

Organized: Recommendation package organization needs to match within the package and how it is loaded to eApproval so that items can be readily located and identified. See IRM 25.3.2.4.3.1, Recommendations Processed Through eApproval.

Use of the auto populating Form 4477-D, Civil Suit Package, which contains all the forms needed for a suit recommendation, guides the user through the process. The package includes the forms in paragraph 2 and 3 below and allows for a certain amount of auto-population. The auto-populate package is designed as the easiest to use. The forms are available individually for those circumstances where the auto populate package does not fit with the circumstances of the case or where an additional form such as a Form 4479 may be needed for the recommendation.

The following forms are provided in the order in which they appear in the Form 4477-D auto populate package for all suit recommendations, except as provided in paragraph (4) below:

If the suit involves specific property, also complete the following form:

Advisory, when sending the approved recommendation package to Area Counsel, uses Form 4481, Advisory Transmittal, to provide applicable notes as needed.

Forms and other items required to be included with recommendations for proceedings to secure judicial approval to seize a principal residence are different from those for other recommendations for judicial action. Refer to IRM 5.10.2, Securing Approval for Seizure Action and Post-Approval Actions, for instructions. Form 4477-C is designed to capture those forms.

The following subsections discuss specify areas of consideration to be addressed when preparing the narrative report.

The following suit development cases qualify for suspension of the overage calculation with group manager approval:

The manager must document approval in the ICS case history.

A Transaction Code (TC) 971 Action Code (AC) 281 is used to suspend overage on these cases. Input the code by selecting Generate TC 971/972 AC 281 from the Collection Activities menu on the Integrated Collection System (ICS). This initiates the upload of TC 971 AC 281 or the reversal TC 972 AC 281 to IDRS.

The identifier, SUIT, must be in the location block on ICS in order for the overage suspension to function properly. group managers generate the identifier by:

The case no longer qualifies for suit development status and the TC 972 AC 281 is input when:

If appropriate, the revenue officer will create an Other Investigation (OI) when additional assistance is requested by the DOJ after the suit has been referred.

See also:

Most Injunctive Relief suit referrals involve a business entity that is flagrantly delinquent with filing and Federal Tax Deposits (FTD) requirements, or with FTD requirements alone. When an Injunctive Relief suit referral is submitted, the referring revenue officer must create an OI in ICS to monitor and document the quarterly trust fund compliance status. If the suit involves multiple in-business entities, the RO needs to create an OI to monitor each entity. The following table provides instructions for revenue officers after an Injunctive Relief suit is submitted:

CEASO Advisors will:

Revenue Officer Responsibilities:

Monitoring the Injunction Order: Injunctions are monitored for the taxpayer's compliance with specific instructions in the Order. Generally, the Order will direct the taxpayer to provide the documentation directly to the revenue officer. Specific items include but are not limited to:

Curable Violation: An injunction may allow a certain number of violations in complying with the conditions of the Court Order, as long as those violations are timely cured as provided in the Order. The Order will require the taxpayer be sent a notification of a curable violation and how it must be cured.

The revenue officer is responsible for timely notifying of Advisory and Area Counsel, who will notify DOJ, of any curable violation in the Court's Order. DOJ is responsible to send the taxpayer an official notification for the curable violations and allowing the taxpayer to cure the violation.

Official Default: If the curable violations are exceeded, any further breach causes the injunction to officially default. The Order will indicate whether DOJ is required to notify the taxpayer in this event. The revenue officer will not only notify Advisory, Area Counsel, and DOJ of an official default, but will also submit a recommendation for resolution, through Advisory and Area Counsel, to DOJ.

Advisor Responsibilities:

ENTITY REPORT: A manager, management assistant, or IQA may input "Injunction Monitor" as a program name in ICS as an identifier in creating a sort query of cases. Instructions can be found in the, ICS User Guide - Chapter 9, Entity Detail - Maintain Program Names.

Advisory’s role begins with any revenue officer request for assistance determining whether suit action is appropriate or request for assistance with a suit package pre-submission on eApproval. Early consultation between Advisors and revenue officers tends to strengthen the overall quality of the recommendation package. Use an NFOI 187 when assisting an RO with suit development. The table below contains tips on assisting with pre-suit development.

Once pursuing suit is deemed appropriate, the revenue officer may need assistance with navigating the suit forms and when to initiate a suit on eApproval. The table below provides tips to assist with the forms and eApproval.

Once notified that a suit package is assigned for review on eApproval, the Advisor reviews the packages to ensure that the package is complete and ready for business and Counsel approval. If the suit recommendation received cannot be pursued because it is incomplete or further development is needed, return the suit recommendation to the initiating employee no later than 14 calendar days after this determination. Include an explanation for the return, using Form 5942, Advisory Reviewer’s Report, where appropriate (see IRM 25.3.2.7.2(3), Reasons for issuing Form 5942, below). Use the following NFOI in ICS for this review process prior to sending the case forward to Counsel.

In reviewing the suit package, the Advisor should:

Reasons for issuing Form 5942: Below are reasons where a commendatory, additional information required, correction or action needed, supporting documents required, and technical feedback Form 5942 would be issued. Remembering the form’s purpose is improving recommendation quality and supporting effective litigation. To issue the form, upload it to eApproval.

As soon as possible after notification of a suit assignment and the case available in eApproval, Advisory must review the suit recommendation to identify imminent CSEDs or other indicators of urgency. Process accordingly.

Locate the eApproval case on the Advisor’s page under Approval Requests.

Open a case on ICS no later than 10 calendar days after receipt of suit recommendation using the NFOI codes listed in IRM 25.3.2.7.2(1), Pre-Suit Review / Referral Received. Use the following NFOI in ICS for the review process prior to sending the case forward to Counsel.

No later than 45 calendar days after receipt of the suit package:

Use Form 4478, Civil Suit Checklist, the Advisor Review - Checklist, portion when reviewing the recommendation package. See IRM 25.3.2.4.4.5, Form 4478, Civil Suit Checklist, Instructions. Advisor categories in eApproval:

References:

If a suit recommendation cannot be pursued or further development is needed, return the suit recommendation to the initiating employee no later than 14 calendar days after determining that it will be returned. In eApproval select Revision Required. Include an explanation for the return, using Form 5942, Advisory Reviewer’s Report, if appropriate. See also IRM 25.3.2.7.2(3), Pre-Suit Review / Referral Received, Reasons for Issuing Form 5942.

If a recommendation has been declined by an approving official or Counsel, the case is returned to the RO. They have the opportunity to discuss a revision; however, if the case remains declined, the RO moves the case to Declined Case Archives.

Close the ICS control module.

Processable Recommendation: If a suit recommendation is processable, complete, and correct, the advisor will:

If applicable, request the initiating employee to complete any needed BAL DUE case action and forward the administrative case file(s) to Advisory upon closure so that the information therein is available during litigation.

Gather additional documents that are needed and take appropriate actions described in IRM 25.3.6, Open Litigation Control, Monitoring, and Closing Actions.

Advisory stays in communication with Area Counsel and DOJ throughout the litigation and beyond. DOJ may ask assistance from Advisory for taking certain actions and Advisory may need to have the revenue officer perform certain of those actions. The Advisor may receive a Supplemental Request from Counsel through eApproval for additional assistance. See also IRM 25.3.5, Judgment Followup, IRM 25.3.6, Open Litigation Control, Monitoring, and Closing Actions, and IRM 25.3.7, Reconciling Non-Insolvency LAMS Report. Update ICS control by closing Pre-suit NFOI and opening one of the following to monitor.