This section contains information on examination procedures and administrative matters relative to the General Case Development and Resolution. It also provides a reference for common issues and related items that might be found on tax returns that are not compliant with the current tax laws and regulations for individual income tax returns and their related schedules.

There are various code sections providing IRS authority to examine individual tax returns for correctness. By law, the IRS has the authority to conduct examinations under Title 26, Internal Revenue Code, Subtitle F - Procedure and Administration, Chapter 78, Discovery of Liability and Enforcement of Title, Subchapter A, Examination and Inspection, which includes, but is not limited to, the following Internal Revenue Code (IRC) sections:

General Case Development and Resolution is used in Campus Examination Operations by managers, coordinators, examiners, and clerical staff to work, control, and monitor inventory for discretionary tax issues in both SB/SE and TS.

The Director is the executive responsible for the programs that come under General Case Development and Resolution.

The Program Manager is responsible for developing and implementing necessary plans and schedules for the accomplishment of the organization’s objectives

The Department Manager is responsible for planning work to be accomplished by subordinates, setting/adjusting long and short-term priorities, and preparing schedules for completion of work. They assign work to subordinates based on priorities, and uses frontline managers to direct, coordinate, and oversee the work.

The Inventory Control Manager is responsible for helping managers, directors, and office chiefs with a variety of processing, adjustments and computational issues including those affecting returns and cases, which may represent all significant divisional work streams.

The Bankruptcy Coordinator is responsible for advising, initiating, and reviewing the full range of collection activities relative to the complicated procedures covered by the Bankruptcy Act.

The Frontline Manager is responsible for assigning, directing, and reviewing the work of subordinate employees. They also plan and carry out training and development of employees, evaluate employees’ work performance, and perform all other related administrative functions.

The Clerical Manager is responsible for assigning, directing, and reviewing the work of clerical employees whose responsibilities include processing incoming faxes and correspondence, controlling the work to correspondence units, and other related clerical duties.

The tax examiners are responsible for contacting the taxpayer through correspondence or phone contact to obtain information, explain liability and encourage compliance.

Program Reports:

Program Reviews:

Automated Correspondence Exam (ACE) is an IRS developed, multifunctional software application that fully automates the initiation and movement of Earned Income Tax Credit (EITC) and non-EITC cases through the audit process. See IRM 4.19.20, Automated Correspondence Exam (ACE) Processing Overview.

Report Generation Software (RGS) is a comprehensive system used by SBSE, TS campus and LB&I examiners throughout the audit process. Cases are worked, closed and processed electronically via RGS.

Audit Information Management System (AIMS), under IDRS command code AMDIS is a computer database system used by IRS Independent Office of Appeals (Appeals), Examination and TE/GE to control returns and input assessments/adjustments to Masterfile and provide management reports.

Although it is best not to use words that require interpretation, there may be times when you may have to use them. If you do, you should include definitions for words which require interpretations. Consistency in preparing workpapers is critical in the examination process. The use of standard abbreviations and acronyms aids in consistency. The abbreviations and acronyms listed below may be used when preparing examination workpapers. When abbreviating, acronyms not listed below can be used if the definition is written out with the acronym next to it in parenthesis the first time used. Then, the acronym can be applied throughout the workpaper.

For related resources such as IRMs, See Exhibit 4.19.13-2, Related Resources.

The following are Correspondence Examination Programs with corresponding Source Codes:

For QRP source codes, see IRM 4.19.14.9.2, QRP Source Code and Project Codes.

For more information relating to source codes , please refer to IRM 4.4.34.4.16, Source Codes, and Document 6209, IRS Processing Codes and Information.

Integrated Automation Technologies (IAT) tools are desktop productivity enhancing tools that will simplify taxpayer account processing. The IAT Website has a list of all available tools as well as a description and job aid for each tool. The IAT Home Page provides a list/description of all available tools and a job aid for each tool.

All Examination employees must use the IAT tools. Some tools are mandated for use while others are suggested for use.

The mandatory tools to be used and the programs they are used for are listed below:

The suggested IAT tools to be used by examination employees, and a brief description of each tool, are listed below:

Letters used for correspondence issues are referenced and linked in the program procedures.

The names for the Content Point of Contact (POC) and Publishing Specialist for a letter can be found by researching the Electronic Publishing web site, https://publish.no.irs.gov/catlg.html. Any revisions must be discussed with the Content POC.

Computer Paragraph (CP) Notices can be viewed on the Servicewide Notice Information Program (SNIP) SharePoint site, at https://irsgov.sharepoint.com/sites/SNIP.

New and revised letters must be approved by the Office of Taxpayer Correspondence (OTC), prior to publication. All letter headers will contain:

Correspondence letters can be prepared by the clerical staff or Tax Examiners (TE)/Correspondence Examination Technicians (CET).

Letters mailed for cases in the corporate inventory will include the appropriate Business Operating Division (BOD) toll-free number, Tax Examiner as person to contact, and the site-specific identification number. If the letter being sent is in reply to taxpayer correspondence, then the letter, case history, and all letter attachments must identify the originating tax examiner to provide information for any subsequent contact, if needed.

The following table lists the suspense period requirements for all EITC and Non-EITC cases being worked in Correspondence Examination and the earliest day for mailing the next letter. The information in the table covers manually issued letters and those issued through the Automated Correspondence Exam (ACE) System (formerly RGS Batch).

Generally, a manually prepared letter/notice may be mailed on the 16th day after the taxpayer’s reply due date. If a letter has given a taxpayer 30 days to respond, the subsequent letter may not be mailed earlier than the 46th day from the date of the letter. The only exceptions to this are:

A letter cannot be transmitted to Correspondence Production Services (CPS) until the prior ACE suspense period has expired.

Information on the audit return selection processes for W&I and SB/SE is found in IRM 4.1.26. Campus Exam Return Selection, Delivery and Monitoring. Information for Compliance initiative projects is found in IRM 4.17, Compliance Initiative Projects.

Purpose: This standard measures whether consideration is given to the Classified/Program as well as large, unusual or questionable (LUQ) items during the course of the examination.

Overview: Consideration of all significant tax issues during the examination is required.

The following table shows the key elements of Auditing Standard 1.

Purpose: This standard measures whether the examined issues are completed to the extent necessary to provide the examiner sufficient information to determine the substantially correct tax based on the correct application of tax law.

Overview: The depth of the examination is determined through inquiry, observation, and analysis of appropriate source documents, oral testimony, contacts etc., to ensure full development of relevant facts concerning significant issues. Conclusions are supported by applicable law, which includes the Internal Revenue Code, Treasury Regulations, court cases, Revenue Rulings, etc.

The following table shows the key elements of Auditing Standard 2.

Purpose: This standard measures documentation of the scope, depth, and conclusions reached in the examination.

Overview: The workpapers provide the principal support for the examiner’s report and document the procedures applied, information obtained, and conclusions reached in the examination.

The following table shows the key elements of Auditing Standard 3.

Purpose: This standard measures the presentation of the examination findings in terms of content, format, and accuracy.

Overview: This standard addresses the written presentation of examination findings in terms of content, format, and accuracy.

The following table shows the key elements of Auditing Standard 4.

Purpose: This standard measures whether applicable penalties are considered and applied correctly.

Overview: The application of appropriate penalties is required to be considered during all examinations. See IRM 4.19.13.7.1, Supervisory Approval of Penalties, and IRM 4.19.13.7.3, Penalty Lead Sheet Documentation.

The following table shows the key elements of Auditing Standard 5.

Purpose: This standard measures the utilization of time as it relates to the examination process.

Overview: Timeliness of actions during the examination process is an essential component of each examination. Actions are initiated and completed within established time frames.

The following table shows the key elements of Auditing Standard 6.

Purpose: This standard measures whether the administrative aspects of the case are addressed.

Overview: This standard encompasses correspondence, statute control, case assembly, power-of-attorney (POA) disclosure procedures and closing procedures.

The following table shows the key elements of Auditing Standard 7.

When research results show that a taxpayer has filed an amended return, the amended return must be requested to determine the impact on the examination. The amended return may contain information directly related to the examination or change other items on the return. Consider the taxpayer’s proposed adjustments following normal procedures. You may also refer to SERP job aid Form 1040-X Received During an Open Examination.

The following actions must be taken to request the amended return:

Examiners must check for a TC 922 using command code (CC) TXMOD or IMFOLT every time an examination case is handled.

In accordance with IRC 6751, Procedural Requirements:

Approval shall be made by leaving a CEAS non-action note specifically stating which penalty (including penalty subparts) is approved. In a deficiency case, the CEAS non-action note must be input prior to issuing any written communication of penalties to the taxpayer that offers an opportunity to sign an agreement or consent to assessment or proposal of penalty. See IRM 20.1.1.2.3.1, Timing of Supervisory Approval. If no communication meeting these criteria is sent, then the CEAS non-action note, including the supervisory approval, must be input prior to issuing the Statutory Notice of Deficiency (SNOD) that includes the penalty. Penalties proposed for assessment include, but are not limited to:

IRC 6702, Penalties for Frivolous Tax Submissions, require written supervisory approval on Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties.

The following penalties are excluded from section 6751(b)’s written managerial approval requirement:

Correspondence examination cases in which the Substantial Understatement Penalty is systemically asserted will fall within the exception for penalties automatically calculated through electronic means if the taxpayer does not submit any response to the 30-day letter proposing the penalty. However, if the taxpayer submits a response, written or otherwise, that challenges the penalty, or the amount of tax to which the penalty is attributable, then the immediate supervisor of the IRS employee considering the response must input the CEAS non-action note prior to the employee’s first communication to the taxpayer of the penalties that offers an opportunity to sign an agreement or consent to assessment or proposal of the penalty. See IRM 20.1.1.2.3.1, Timing of Supervisory Approval.

Penalty Lead Sheet Guidance for Supervisors:

The IRC 6676 penalty applies when a taxpayer submits a claim for refund or credit of income tax for an excessive amount and reasonable cause does not apply. The penalty is 20 percent of the excessive amount claimed. IRC 6676(b) defines the "excessive amount" as the amount of the claim for refund or credit that exceeds the amount allowable for any taxable year.

The IRC 6676 penalty should be included on examination deficiency report when determination of the penalty is dependent on the determination of a deficiency. That will be the case only when the taxpayer makes an erroneous claim for refund or credit of a refundable credit and the refund is frozen. The disallowed refundable credit will result in a deficiency, but because the refund is frozen, there will be no underpayment. See IRM 20.1.5.18, IRC 6676, Erroneous Claim for Refund or Credit Penalty.

Pursuant to IRC 6676(d) the penalty shall not apply to any disallowed portion of the claim for refund or credit that is subject to one of the following:

Changes were made to IRC Section 6676 based on the passage of the Protecting Taxpayers from Tax Hikes Act (PATH Act), which are applicable to claims filed after December 18, 2015. The PATH Act:

For TS Only: Correspondence examination cases in which the IRC 6676, Erroneous Claim for Refund or Credit Penalty is systemically asserted can fall within the exception for penalties automatically calculated through electronic means. If the taxpayer does not submit any response to the 30-day letter proposing the penalty, the penalty will remain and be included in the stat notice (if deficiency procedures apply) and/or the final assessment.

However, if the taxpayer submits a response, written or otherwise, that challenges the penalty, or the amount of tax or excessive refund or credit amount to which the proposed penalty is attributable, then the immediate supervisor of the IRS employee considering the response must input the CEAS non-action note specifically stating which penalty (including penalty subparts) is approved, prior to issuing any written communication that offers the taxpayer and opportunity to:

When the taxpayer submits a response, follow the procedures in the table below:

To ensure that the IRS applies penalties in a consistent and impartial manner, Exam employees must complete penalty lead sheets on all cases worked through deficiency procedures.

The penalties most frequently asserted by examiners are:

Lead sheets must be prepared:

The Negligence Penalty must be considered and documented on all cases. If the Substantial Understatement applies, the Negligence penalty should be considered as an alternative position.

The Substantial Understatement Penalty must be considered on all cases when the understatement exceeds the greater of $5,000.00 or 10 percent of the tax required to be shown on the return. The substantial understatement lead sheet must be prepared unless listed in paragraph 7 below.

The Erroneous Claim for Refund Penalty is considered on all cases when a portion of the excessive amount of the claim for refund or credit was frozen but not refunded to the taxpayer, and reasonable cause does not apply.

Lead sheets are not required for cases that are:

Before completing the lead sheets, examiners must review:

Only one accuracy-related penalty may be asserted on a portion of an underpayment. When both Substantial Understatement and Negligence penalties apply to a portion of an underpayment, assert the penalty with the strongest position and document the alternative position on a separate lead sheet.

The Substantial Understatement penalty lead sheet is not required if it does not apply. The Negligence penalty should be considered and documented on the Negligence penalty lead sheet.

The Erroneous Claim for Refund or Credit penalty shall not apply to any portion of the claim for refund or credit that is subject to accuracy-related penalties.

On all cases requiring lead sheets, examiners must address the following issues:

Accuracy related/fraud and erroneous claim for refund or credit penalties should not be imposed if the taxpayer can demonstrate that they acted in good faith and that there was reasonable cause for such portion of the underpayment. (Reference: IRC 6664(c), IRC 6676(a), and Treas. Reg. 1.6664-4).

Reasonable cause and good faith must be considered on a case-by-case basis evaluating all relevant facts and circumstances.

When determining if reasonable cause applies, the examiner must first determine the efforts that the taxpayer made to file a correct return. Circumstances that may indicate reasonable cause and good faith include:

The taxpayer's compliance history, including prior audits, may also be useful in determining credibility and whether the taxpayer exercised ordinary business care and prudence in preparing the return. Disallowance for the same or similar issues should be considered when determining whether the taxpayer exercised ordinary business care. The single fact that the taxpayer has never been examined does not establish that the taxpayer meets reasonable cause/good faith criteria.

All taxpayer requests for penalty abatement must:

Examiners must consider all penalty abatement requests and determine if the taxpayer meets reasonable cause/good faith criteria. Once determination is made, take the appropriate action below:

For more information on penalties, please refer to:

Please see the "If And Then" Chart below on how to work the taxpayer responses. See IRM 4.19.13.2.4, Standard Suspense Periods for Correspondence Examination, for suspension periods applicable to the various statuses and time frames for issuing letters/notices.

Attempt to contact the taxpayer or authorized Power of Attorney (POA) by telephone when the information provided is insufficient, and an audit report has been sent. The POA must be contacted in lieu of the taxpayer when a valid POA is present. Explain why the information sent is not sufficient and what is still needed. Document phone call in workpapers. The documentation should include the date, time and outcome of the phone call. The outcome would state whether or not the attempt to contact the taxpayer was successful/unsuccessful. If the attempt was successful, a brief synopsis of the phone call would be sufficient. If the attempt was unsuccessful, it should be recorded as well. Refer to note at end of IRM 4.19.13.11, Taxpayer Replies, for information concerning taxpayer appeals hearing rights.

Refer to the table below for guidelines for working taxpayer responses when additional information is needed prior to status 24:

Once cases are in Status 24, they should not be updated and should remain in Status 24 on AIMS.

Please see the table below on how to work taxpayer responses after the 90-day letter has been sent.

Evaluate the taxpayer’s written correspondence and take the next action as soon as possible. If unable to do this in 30 days, initiate interim letter.

Judgment must be used based on the facts and circumstances in each case to make a proper substantially correct determination. Workpapers must contain all determinations, facts and circumstances, pertaining to the case obtained either by telephone or written correspondence. Caution must be used when leaving messages on taxpayer answering machines or using cell phones. See IRM 10.5.1.6.7.2, Answering Machines/Voice Mail, and IRM 10.5.1.6.7.1, Cell Phones and Cordless Devices, for more detailed information.

If submitted documentation is not sufficient, an audit report has been sent and a phone number is available, call the taxpayer and clearly explain what documentation they need to submit. However, if the attempt to reach the taxpayer by telephone is unsuccessful, send the request for additional information letter.

All telephone contacts must be recorded in the case workpapers when the case is currently assigned on CEAS to the examiner receiving or making the call. If the case is not assigned to the phone assistor, they will record the call in CEAS notes. This allows all employees access to the case information if the taxpayer writes or calls back. See IRM 4.19.19.4, CEAS Notes.

Telephone contacts should be made at appropriate times. If a case is being worked before 8:00 a.m. or after 9:00 p.m., local time at the taxpayer’s location, the case should be left for a daytime telephone call.

See IRM 4.19.13.26, Taxpayer Advocate Service (TAS) Procedures, for additional information.

If a Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), is received from the taxpayer, expedite the form to the TAS Office in the Campus.

The Tax Administration Council (TAC) approved the expanded use of faxes for receiving information and documents from taxpayers and practitioners. The changes are aimed at reducing taxpayer/practitioner burden as well as reducing the time it takes to resolve taxpayer cases and inquiries. The receipt of faxes should not require any significant changes to how the IRS handles open cases with taxpayers. It was intended as another means to receive case information.

These general guidelines are applicable to all divisions and cover operations related to income tax, employment tax, excise tax, estate tax, gift tax, and generation skipping tax, as well as tax exempt and employee plans determinations.

Filing of original tax returns via fax will be allowed only as part of a return perfection process (e.g., securing missing schedule or missing signature) initiated by the IRS or in the post-filing/non-filing activities.

This allowance applies to inquiries and interactions conducted by Field Assistance, Accounts Management, Compliance Services, Field Examination, Field Collection, Determinations Units, Appeals, and the Taxpayer Advocate Service. Documentation, forms, letters, and returns can be received via fax in these circumstances even if a taxpayer signature is required, because faxed signatures are legally sufficient.

The IRS will not acknowledge faxes received from taxpayers in the course of tax administration activities by a return fax. Exceptions can be made in unusual circumstances as determined by IRS management.

Submission of documentation, forms, letters, and returns related to post filing/ non-filing inquiries and interactions can be allowed via fax based on taxpayer or IRS request unless there is a specific prohibition. Examples of documents that can be provided by fax in routine operations include:

The following documents/forms/letters can be accepted by fax if contact has been made with the taxpayer by phone or in-person, if the taxpayer history file is documented with the date of the contact, and if notation is made that the taxpayer wishes to send the documentation/form/letter by fax:

If taxpayer contact has been made and the case history documents the date of contact and the desire of the taxpayer to send the consent by fax, the IRS can accept by fax:

Employee Plan and Exempt Organization determination letter applications will not be accepted via fax.

Correspondence or returns, received from taxpayers after the case is closed, that do not meet audit reconsideration criteria must be evaluated within 5 business days of receipt in the Operation. See IRM 4.13.1.4, Criteria for Reconsideration for more information. This correspondence consists of replies on:

Because the taxpayer is still waiting for a response, the reply must be evaluated and a determination made within 14 calendar days.

If the response cannot be worked within 14 calendar days, take the following actions:

The following table provides procedures for replies that have been scanned through the Correspondence Imaging Inventory (CII).

Letter 686-B, Response to Taxpayer Request for Extension of Time to Reply , has been created for SB/SE Campuses only, to respond to the taxpayer when they request an extension of time during the audit process. This letter must be sent within three business days of an examiner identifying the document as a request to extend the response timeframe; the letter must state request for extension. Letter 686-B must indicate whether the extension has been granted or denied. SB/SE phone scripts have been updated to give the taxpayer the option of mailing or faxing their extension request.

If a taxpayer requests additional time to submit requested documentation, the taxpayer will be automatically granted an additional 30 days on the first request (from the original response due date shown on Letter 566-S/Letter 566-T, or Letter 525/Letter 525-T, except for requests made after the 90 Day letter).

For SBSE examiners only, Letter 686-B will be sent each time the taxpayer requests an extension regardless of whether the extension request was granted or denied . When an extension is granted, update the case to the previous status and the Aging Reason Code to 008. Workpapers (Form 4700) must also be updated for ALL extension requests (written, faxed, or verbally made).

If subsequent time extensions are requested, judgment should be used based on the facts and circumstances for the individual case.

If the request is made via a telephone call, a CEAS Action Note will be input to reflect that an extension to respond has been requested. The campus where the audit is being worked will address the request (For example, approval/denial) and send Letter 686-B within three business days of the Action Note. For further information, refer to IRM 4.19.19.4.1, CEAS Action Notes.

The appropriate amount of extension time will be added to the end of the response due date. This date will be input on Letter 686-B under "Response Due Date" .

If the suspense period has expired but the case has not yet been processed to the next status, back the case down if possible (For example, if the next letter has not been issued or triggered to CPS), when granting the extension and send Letter 686-B.

If it is not possible to back the case down (For example, next letter has already been triggered to CPS), send the Letter 686-B to inform the taxpayer that the extension cannot be granted and why. Every effort should be made to accommodate the taxpayer's request.

An extension request can be classified in 3 ways and worked accordingly:

The Letter 686-B will include the name of the tax examiner completing the letter, under person to contact, not just the words Tax Examiner. The letter will have the signature of the Operations Manager where the letter is mailed from (which should coincide with the Campus where the audit originated).

Starting in TY 2014, the Individual Shared Responsibility Payment (SRP) provision requires that everyone have minimum essential health coverage for each month, qualify for an exemption, or make a Shared Responsibility Payment when filing their federal income tax return. This provision applies to individuals of all ages, including children. The SRP amount is $0 beginning after TY 2018; therefore individuals do not have to report their monthly coverage or whether they qualify for an exemption.

CRN 869 will post to Form 5344 with one of the following values:

The CRN 869 must be removed from Form 5344 when closing a case Disposal Code (DC) 02 (No Change). Do not remove the CRN 869 or any other reference number when closing a case with any DC other than 02.

Campus Exam will be required to adjust a self-reported SRP when the examination results in a change to income, exemptions, or filing status. This adjustment will be calculated and input after the Exam assessment has closed on AIMS. The taxpayer will receive separate notification of these changes through a Notice and Demand since the Individual Shared Responsibility Payment cannot be included with the SNOD.

A monthly EOAD report will identify closed cases that might require an adjustment to the taxpayer’s self-reported SRP. Designated units at each campus will be responsible for recalculating the SRP when there are changes to income, exemptions, or filing status and for inputting the change to MFT 35 as needed.

If the taxpayer self-reported an SRP on their return, their Initial Contact Letter and subsequent Exam reports will include a request for their SRP worksheet. When reviewing replies for TY 2014 and subsequent year returns, examiners will need to screen the reply for the presence of the taxpayer’s SRP worksheet. If the taxpayer submits a copy of their worksheet:

If the taxpayer requests a change to their SRP on an amended return being processed in Exam and the CRN 869 indicator on Form 5344 is a 1, route a copy of the taxpayer’s SRP worksheet (if provided) to the team responsible for SRP adjustments along with a note saying that the taxpayer is requesting a change to the SRP and no SRP was present on the original return. If the CRN 869 indicator on Form 5344 is a 0, process the taxpayer’s request for a change to the SRP as in item 4 above.

Repetitive audit procedures apply to certain individual tax returns (See Exception list below), when the following criteria are met:

If there was a prior audit, examiners should thoroughly research the CEAS database to secure prior audit information. For repetitive audit criteria to apply, the prior exam must have been conducted on the same issues and when applicable, the same dependent/relationship resulting in a no change.

If the review indicated the taxpayer was audited in one or both of the two preceding years, determine if the taxpayer meets the criteria in IRM 4.19.13.11.9(1), Repetitive Audits, and proceed as follows:

TS HQ and SB/SE Performing Planning and Analysis (PPA)/Campus Exam Document Matching Workload Planning and Analysis CEDWPA team will determine the number of additional days that will be used in the interim notices advising the taxpayer when to expect a response from Exam during peak periods based on mail volumes.

TS HQ will make the determination using the Average Number of Days to Work Correspondence Report, Policy, Monitoring, Analysis and Quality (PMAQ) Exam Roll Schedule, and Mail Moved Weekly Report.

SB/SE PPA/CEDWPA will make the determination using the Average Days Measures Report, Correspondence Exam Rolls Report, and Weekly Mail Monitoring Report.

TS HQ and SB/SE PPA/CEDWPA will be responsible for submitting the change to the variable number of days for the sites. HQ will:

ACE programs duplicate the Letter 3219, Notice of Deficiency, for each individual filer of a joint return. The notices are mailed separately to each filer, even if they both reside at the same address. This is accomplished by use of a cover sheet, with only one of the joint names and the common address being printed on the cover sheet for each set of notices mailed. This separate mailing is required by RRA 98 (Restructuring and Reform Act of 1998) Section 3201(d). Statutory Notices not produced by ACE programs will require manual duplication and creation of individual cover sheets (only one joint filer name on each) to facilitate separate mailing of the notice to each taxpayer. No changes need to be made to the statutory notice (showing both of the joint names) that will be attached to each. The only requirement of RRA 98 Section 3201(d) is that it be mailed separately to each joint return filer.

The Campus Liaison (CL) will review the new documentation and determine if Correspondence Exam can proceed with the examination.

If the campus cannot work the case:

If the CL determines the campus can proceed with the examination the CL will:

Campus Exam will review the case/response to see if the case can be closed no change.

If a case is closed as No Change after a SNOD is issued and the case is later identified on a Tax Court Docket list, Appeals does not need the casefile.

If a case is opened in Appeals and can be closed No Change, complete Form 14121, No Change Certification, and upload to the Appeals Electronic Case Receipts SharePoint Portal.

Once you reach the SharePoint site, use Click Here to Submit a New ECR and SWR Request, select Add New Electronic Case Receipts, and input the following:

Associate Form 14121 with the case file.

Prior to updating a docketed case to Status 81, the case must be reviewed to ensure all mail has been considered and addressed.

A petition is premature if a notice of deficiency (SNOD) has not yet been issued for a year currently under examination or if the SNOD was not issued prior to the filing of the petition. If a premature petition is identified during review then:

Jurisdiction of a docketed case must remain with the Office of Chief Counsel (Counsel) or Appeals . Therefore, when Appeals receives "new information" from a taxpayer, representative, or counsel of record for a docketed case that merits analysis by Examination; Appeals can request examination assistance (EA) via Form 14361, Docketed Examination Assistance Request - Jurisdiction Not Released. Appeals retains jurisdiction of the case while the new information is under review by Examination. See IRM 8.4.4, Examination Assistance Requests, for more information.

P&A or Specified Campus Staff will receive and route any new information to the appropriate operation for examiner review.

Tax examiners will contact the Examination Bankruptcy Coordinator for guidance on Exam cases with bankruptcy indicators. The coordinator will contact the appropriate Insolvency employee to determine the status of the bankruptcy proceedings for the case under examination, and furnish them with a copy of the Audit Report if necessary, for the proof of claim.

If the taxpayer is in bankruptcy and disagrees with the proposed examination changes included in the 30-day letter.

For bankruptcy cases filed with deficiencies related to post-petition taxes incurred by an individual or by the bankruptcy estate of an individual in a Chapter 7 or 11 are generally not covered by the bankruptcy’s automatic stay. Letter 3219, Notice of Deficiency, should be used instead of the bankruptcy, Letter 531, Notice of Deficiency, for post-petition tax deficiencies. For guidance on determining what is considered a post-petition tax liability, see IRM 5.9.10.9, Post-Petition Tax Liabilities.

If the SNOD was issued to the taxpayer within 90 days of filing a bankruptcy petition, or the taxpayer files a bankruptcy petition before the SNOD is issued, the case cannot be defaulted (closed) while the bankruptcy’s automatic stay prohibits the taxpayer from petitioning the U.S. Tax Court, plus an additional 60 days after the stay ends.

For bankruptcy cases with multiple filings the automatic stay may go into effect for only 30 days, or not at all, if more than one bankruptcy petition is filed within 12 months of the previous dismissal. The stay may also not go into effect if the taxpayer was a debtor in a small business bankruptcy case within the preceding two-year period. See IRM 5.9.5.7, Serial Filers, for additional guidance on conditions impacting the automatic stay period. If AIS or PACER research indicates a possible serial filer case, contact the Centralized Insolvency Operation (CIO) to request the status of the stay.

If only one spouse files bankruptcy on a jointly filed tax return, special handling is required. Assessments need to be made on MFT 31 accounts set up for each spouse. Since the automatic stay has no effect on the spouse that does not file bankruptcy, the assessment for the non-petitioning spouse should be made within the normal Assessment Statute Expiration Date (ASED) period after expiration of the SNOD. Refer to IRM 21.6.8, Split Spousal Assessments (MFT 31).

To have an MFT 31 module established for EACH taxpayer when only one spouse on a jointly filed tax return files bankruptcy, contact CIO via e-mail at cio.issues@irs.gov, at least 12 weeks prior to the expiration of the non-petitioning spouse’s 90-day period to request the joint account be mirrored. Mirroring is the splitting of the joint MFT 30 module into two identical but separate MFT 31 modules, one for the primary taxpayer and one for the secondary taxpayer, both mirroring the original return.

If the bankruptcy was filed after the expiration of the 90-day period, the assessment can be processed any time after the expiration of the 90-day period because the bankruptcy automatic stay does not prohibit the assessment of tax. See 11 U.S.C. 362(b)(9)(D).

Filing for bankruptcy does not suspend or extend the ASED during the examination. The ASED must be protected by either issuing a SNOD or securing a Form 872 , Consent to Extend the Time to Assess Tax, or Form 872-A, Special Consent to Extend the Time to Assess Tax. Refer to IRM 25.6.22, Extension for Assessment Statute of Limitations by Consent, for more information.

Hold the case in suspense until the automatic stay terminates due to one of the following: 1) the bankruptcy is closed or dismissed, (2) the debtor is granted or denied a discharge, or (3) the stay is lifted by order of the Bankruptcy Court.

Monitor the status of each case in the bankruptcy inventory.

The ASED is suspended in a bankruptcy case if the SNOD was issued within 90 days before the filing of the bankruptcy petition on or after the filing date as explained in paragraph (4) above. Upon termination of the automatic stay, a new ASED must be calculated. The extended ASED must be addressed on Form 5344 when completing the case. The new ASED is calculated by adding the following to the original ASED:

Use the worksheet in Exhibit 4.8.2-6, Bankruptcy Statute of Limitations Computation, to calculate the new ASED and default date.

Refer taxpayers to TAS (See IRM 13.1, Taxpayer Advocate Case Procedures) when the contact meets TAS criteria (See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria) and the taxpayer’s issue cannot be resolved the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases that can be completely resolved in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer’s issue. Do not refer "same day" cases to TAS unless the taxpayer asks to be transferred to TAS and the case meets TAS criteria. Refer to IRM 13.1.7.5, Same Day Resolution by Operations, and IRM 13.1.7.4, Exceptions to Taxpayer Service Criteria. When you refer cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS. For more information on Taxpayer Assistance Order (TAO) refer to IRM 13.1.20, TAS Taxpayer Assistance Orders (TAOs).

When a case requires referral to the Examination function, the TAS employee prepares a Form 12412, Operations Assistance Request (OAR). Form 12412 identifies the taxpayer’s issue, specific assistance requested from the Operating Division or Function, TAS case criteria met, and recommendation for resolution. TAS will secure and forward copies of signed amended returns and/or any documentation necessary for the resolution of the OAR.

OARs are mailed to the Exam Unit via a Form 3210, Document Transmittal. To the extent possible, the Form 12412 and attachments will be sent via encrypted e-mail. The Form 12412 and attachments may also be faxed, mailed, or hand carried to Exam.

Referrals from TAS will include:

TAS Case Advocate will:

Operational Liaison/Exam Coordinator is an Exam technical employee who will review the Form 12412, for completeness and correct routing. The OAR must contain:

If the Form 12412, is incomplete, contact TAS within one (1) workday of the determination, and within one workday of the receipt of the OAR in the case of expedite processing to obtain information. If TAS cannot provide the information needed for the liaison to assign and work the OAR, within three workdays of the request, return the case to TAS.

If an OAR is routed by TAS to the incorrect office or campus location, the TS, SB/SE and or EITC Business Unit Liaison will reject and return the OAR to TAS within three workdays of receipt or within one workday where TAS has requested expedite processing. The appropriate Business Unit Liaison will complete Section VI of Form 12412 indicating the reason for the rejection, citing the TS SLA Addendum, or SB/SE SLA Addendum and IRM references (when applicable). TAS will issue a new OAR with the correct routing information.

If the Form 12412 is complete:

If the case is in AIMS Status 00-09, the Operational Liaison or designee will screen the case and resolve if possible. See IRM 4.19.13.26.5, Premature Referral Cases, AIMS Status 00-09, for procedures.

The Operational Liaison will determine which team/function is responsible for resolving the taxpayer issue. For OARs that require expedite processing, the receiving office will assign within one workday to a tax examiner (TE) upon receipt from TAS. All other cases will be assigned within three workdays.

For all cases involving complete OARs, the Operational Liaison, or designee will

For aging consistency purposes, all operations will use calendar days when counting the age of a case.

Any OAR closed "No Relief Granted" will be closed out of the receiving area's inventory and returned to the TAS office. These cases should never be rejected back to TAS. If the taxpayer asks to reopen their case, and sends in new additional information/documentation, the incoming OAR will be opened and treated as a new request/case.

Upon receipt of an OAR case, research/review ACE Action Report or other IDRS prints as necessary for prior year examination closing action.

If the prior year return was closed with no changes and the same information is reflected in the current year, close the case. Refer to IRM 21.4.4, Manual Refunds, if applicable and IRM 4.19.14.7, Recertification, for procedures on removing the recertification indicator.

If the taxpayer was examined and the research indicates that one or more dependents were disallowed in the prior year, review CEAS or obtain copies of workpapers and RAR (Examination Report).

Operational Liaison will:

The completed folder is given to the clerk for input. Using information found on the Form 12412, OAR, the clerk will:

The TE will:

The TAS Case Advocate must be kept apprised of action and/or contacts made by the TE with the taxpayer or practitioner. Telephone contact with the TAS advocate will not be conducted using the toll-free telephone number.

TE case evaluation of TAS referral steps:

Examination Closing of TAS referral steps:

After all the closing actions have been completed, including inputting any adjustments:

The IRS identifies accounts impacted by a declared disaster by zip codes and inputs a TC 971 Action Code. Depending on the type of relief assigned to that zip code area, a master file -S or -O freeze will be generated.

These freeze codes do not prevent cases from establishing on AIMS.

The Disaster Indicators will post on the entity portion of IDRS, which are defined as follows:

To set the freeze code you will take the following actions:

The freeze codes will be automatically removed when the disaster period ends.

For impacted taxpayers with an -S freeze on the account, Campus Examination will continue normal case processing. All contacts with the taxpayers during the disaster period will include Notice 1462, Important! You Have More Time to File and Pay Your Taxes Due to a Disaster.

For impacted taxpayers with an -O freeze on the account, Campus Examination will postpone normal case processing unless otherwise guided in this IRM sub-section.

Update all -O freeze disaster cases in Status 10 and above to Employee Group Code 5055. Cases should remain in EGC 5055 throughout the entire Exam process.

Take actions below for case processing on impacted taxpayers with an -O freeze on the account:

Any cases updated from status 24 in error should be corrected.

Generally, there should be no correspondence sent to taxpayers in disaster areas during the postponement period, unless responding to a taxpayer-initiated inquiry or to protect the statute of limitations. Correspondence received for case in EGC 5055 and/or with -O freezes will be screened for agreed, no change cases, and requests to continue their examination within 5 business days of receipt within the function. This includes audit reconsideration and closed case (status 90) mail correspondence.

Taxpayer replies, including replies received in Status 24 - Agreed or No Change:

Taxpayer Replies - Disagreed or requests additional time:

Taxpayer Replies - Requests for examination to continue:

Claims or Amended Returns - Work claims (1040X) that have sufficient documentation available to make a determination. Only allow or close claims that would benefit the taxpayer.

Do not start any claims cases; postpone all actions during the disaster period. The requirement for married filing joint taxpayers to provide a completed Form 3911, Taxpayer Statement Regarding Refund, does not apply when the taxpayer is inquiring about a refund that may have been lost, stolen, or destroyed.

The disaster freeze codes do not extend the statute dates - ASED or CSED.

Examination will protect imminent statutes by issuing statutory notices for taxpayers located in the affected counties during the compliance activity postponement period, if the statute of limitations will expire during that period and a statute extension cannot be secured.

No statutory notices of deficiency will be issued during the compliance activity suspension period if the statute of limitations will not expire during that period.

If the statute of limitations and the 90th day to petition Tax Court fall within the postponement period, the taxpayer’s time to file a timely a court petition is postponed until the end of the postponement period.

Because the CSED or ASED statute is not extended by IRC 7508A, it may be necessary to retain evidence of the initial mailing of deficiency notices.

Contact with taxpayers impacted by a disaster must be made with caution and extreme sensitivity to the taxpayer's personal circumstances, using the "soft contact" procedures. See IRM 5.1.12.2.7, Soft Contact Procedures.

If the taxpayer calls, explain their case has been suspended until the end of the disaster period. Provide the taxpayer with information available on Disaster Assistance and Emergency Relief for Individuals and Businesses at irs.gov Pub 3067, IRS Disaster Assistance - Federally Declared Disaster Area, which contains information for impacted taxpayers. If the taxpayer suffered a loss, they may be able to take a casualty and theft loss.

Advise taxpayer to read Publication 3067 (EN/SP), IRS Disaster Assistance - Federally Declared Disaster Area, and to call our IRS Disaster Assistance Hotline at (866)562–5227.

Additional information can be found at Disaster Assistance and Emergency Relief Frequently Asked Questions at: Disaster Assistance Information.

If taxpayer states they would like the IRS to continue with the examination, we will proceed with the examination. If possible, obtain this request in writing. Provide the taxpayer with E-fax numbers when possible.

For those taxpayers who indicate they have been impacted by the disaster, all compliance activity must be suspended. See IRM 25.16.1.3, Identification of Covered Disaster Area, Postponement Period, and Affected Taxpayers, for information regarding taxpayers eligible for disaster relief for self-identification. Taxpayer's self-identifying as impacted by the disaster will have the appropriate freeze manually placed on their account.

If the taxpayer indicates hardship, refer to Taxpayer Advocate Service using Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order). Give the taxpayer advocate phone number 1–877–777–4778. The Form 911 should clearly state that the taxpayer made the request after the actual date of the disaster.

Exam will initiate any case actions to provide hardship relief to the impacted taxpayers.

All hardship manual refund requests do not have to go through TAS. Verify if the taxpayer would prefer the manual refund issued as a direct deposit for quicker receipt. See IRM 3.17.79.6.4.2, Certifying Automated Clearing House (ACH)/Direct Deposit Hardship Refunds.

Do not update cases to EGC 5055.

If identity theft is suspected or alleged, conduct IDRS research as specified in IRM 4.19.13.28.1, Research, to determine if any ID theft indicators are present then proceed based upon the facts and circumstances.

If Return preparer misconduct is suspected or alleged, conduct IDRS research as specified in IRM 4.19.13.32, Campus Exam Return Preparer Misconduct (RPM) Referrals.

If cases don't meet the requirements in 2 or 3 above, suspend the cases per the disaster procedures.

At the end of the disaster postponement period, taxpayer contacts within the designated area must be made with caution and extreme sensitivity to the taxpayer's personal circumstances. Stress and fatigue are factors needing consideration, even in instances where taxpayers did not experience any personal, monetary, or physical damage from the disaster.

Before resuming action, review the IRS Disaster Assistance alerts posted and IRWeb for information regarding extensions to suspense periods.

Resume normal examination procedures after the postponement period has expired.

For cases where a SNOD has been issued to an affected taxpayer, whether prior to or during the disaster relief period, if the original default date was calculated to fall on or before the end of the disaster relief period, the extended default date would be the same as the end of the disaster relief period.

If the SNOD was issued to an affected taxpayer and it defaulted prior to the beginning of the disaster relief period, then there is no extension of time to petition the Tax Court. The default date remains the same as it was prior to the disaster relief period.

If the SNOD was issued to an affected taxpayer during the disaster relief period and the original default date is calculated to fall after the end of the disaster relief period, then the default date remains the same as originally calculated. There is no extension of time to petition the Tax Court provided by the disaster relief granted.

Use good judgement when reviewing documentation.

Consider the taxpayer's situation and impact from the disaster. If the taxpayer states their records were lost or destroyed, consider the documents required to substantiate the questionable item and determine if the taxpayer could reconstruct the information without putting an undue burden on the taxpayer. For example: obtaining mortgage or charitable contributions statements from another source or obtaining third party documentation to substantiate a child's residence for EITC.

If insufficient or no documentation can be provided:

Work case per IRM 4.19.13.11, Taxpayer Replies, for subsequent action.

We will grant up to an additional 30 days if the taxpayer requests an extension to provide information. Use the following table if the taxpayer requests a reasonable period of time (30 days or less) to comply:

The SNOD must be mailed to taxpayers at their last known address and duplicate notices mailed to all newly discovered addresses.

In some cases, it will be necessary to rescind the SNOD by following procedures in IRM 4.8.9.30, Rescinding Notices of Deficiency.

Procedures and guidelines for rescinding a SNOD:

When an Identity Theft (IDT) allegation (phone call or correspondence) is received in TS Exam and IDT documents have not been submitted, research CC ENMOD/IMFOLE to ensure the account does not already have an IDT indicator; for both open or closed AIMS cases, and for the same tax year/incident. An IDT indicator is a TC 971 with an AC 501, 504, 505, 506, 522 or 524 for all cases reflecting an appropriate Tax Administration Source Code (INCOME, INCMUL, MULTFL, NOFR, DEC PRISNR, OTHER). See IRM 25.23.2.4.1, Tracking and Reporting Identity Theft Cases - Identity Theft Indicators.

The following are common indicators that may lead to an IRS-identified ID Theft (IRSID):

Request Identity Theft Form 14039, Identity Theft Affidavit. See IRM 25.23.2.3, Identity Theft Claims - General Guidelines.

If a taxpayer submits correspondence indicating they are a victim of IDT, request the documents on Form 886A and prepare the case for the next stage of the audit. If the case is in Status 24, use Letter 555 to request the Form 14039. Inform the taxpayer this does not extend the time to petition Tax Court, per IRM 4.19.13.11, Taxpayers Replies.

If the extension request is made via telephone call, input an Action Note on CEAS to reflect the requested extension is being granted and for how long. The case is suspended until the alleged ID theft is confirmed or denied. See IRM 4.19.19.4.1, CEAS Action Note, if needed.

Utilizing the Query Screen in RGS, add the appropriate amount of extension time to the end of the postponement period regardless of how much time remains on the original postponement period.

All identified employee returns with Identity Theft allegations must be sent to the appropriate Area Office PSP Employee Audit Coordinator. Follow IRM 4.19.11.3.2, Employee Returns.

When the taxpayer submits the requested documents, prepare the case to be referred to IDTVA TS in Accounts Management.

IRM 25.6, Statute of Limitations, provides the service-wide procedures for identifying and processing statute returns. Statute protection applies to ID Theft referrals if the Assessment Statute Expiration Date (ASED) is within 180 days of expiring. Exam will close the audit and refer to IDTVA in a Red folder.

Notate CEAS Workpapers. See IRM 4.19.13.6, Workpapers for All Cases.

Update to EGC 5066 and input ARC 14, if not already present, to indicate a taxpayer provided the required documentation.

For TS, Close AIMS using Disposal Code 12, TC 300 $0.00, Manual Assessment amount of $1, Hold Code 4, and Priority Code 1.

For SBSE, Close AIMS using Disposal Code (DC) 37 AFTER completing the steps below.

For SBSE campuses, follow the additional procedures:

Leave a history item on TXMOD IDTVAREFRL.

Input TC 971 AC 522 UNWORK, if not already present, on ENMOD to identify a pending IDT claim when the IDT documents are received. Refer to IRM 25.23.2-10, IMF Only TC 971 AC 522 Tax-Related Identity Theft, Case Status (Initial Claim/Suspicion). Prior to marking the account, research ENMOD/IMFOLE to ensure the questionable tax year does not already have an IDT indicator for the same tax year.

Forward the Form 14039 and any supporting documents, not available electronically, to IDTVA via Form 3210. Cases can be sent via E-Fax when available.

If correspondence is received on a closed AIMS case (Closed Case Mail) and a Form 14039 or Police Report, with some indication that it is related to IDT, route to IDTVA via Form 3210 to be screened by IDTVA. Follow procedures outlined under IRM 4.19.13.28.1, Research, and IRM 4.19.13.28.2, Requesting Documentation, as applicable in authenticating and securing documentation.

Integrity Verification Operation (IVO) in some cases updates a taxpayer’s address on master file to a campus address when they determine a taxpayer is a victim of ID theft and is unable to determine a valid address for the tax year they are addressing. They correct the account and place the IDT indicators on the record they are working. If Exam has other years open, the address change will impact the validity of the SNOD if it is not corrected from the campus address. In order for the SNOD to be valid, it must be issued to the last known verified address and not to the Service Center address.

If the case contains IDT indicators on the account see IRM 4.19.13.28.1, Research. Exam will close the AIMS record and route the physical case to IDTVA in AM, see IRM 4.19.13.28.3, Taxpayer Replies.

If the case DOES NOT contain IDT indicators, Exam will use the last known address to continue the audit. Search IDRS for the most recent filed return using appropriate CFOL and IDRS command codes including RTVUE, TRDBV and IRPTRO to support the last known address. Update the address on IDRS and RGS/CEAS from the Service Center address to the last known address on the return.

If the taxpayer does not provide the requested documentation in 30 days, update out of EGC 5066 and return to normal Exam processing and/or the next stage of the examination. The campuses are responsible for monitoring the postponement dates for timely action.

If IDTVA determines a taxpayer is not a victim of identity theft and the audit should continue, they will:

The AIMS Coordinator, or an authorized employee, will restore the AIMS database in the appropriate status code, unarchive RGS/CEAS, and assign to a technical unit to resume the audit process as required.

Follow the table below for recording time spent on IDT duties: Identity Theft Time Reporting

Internal Revenue Code section 104(a)(5) allows the exclusion of disability income received prior to minimum retirement age by individuals for injuries incurred as a direct result of a terrorist action directed against the United States (or its allies). No specific annotations or processing instructions apply to these returns and amended returns, but taxpayers may reference "Publication 3920" or "IRC Section 104(a)(5)" .

If a technician or Cat-A classifier discovers or receives a return, amended return, correspondence or a telephone call in Examination inventory or CII inventory excluding terrorism-related disability income, normal Examination procedures apply.

Taxpayers claiming to be a victim of Return Preparer Misconduct (RPM), must submit their claim on Form 14157, Complaint Tax Preparer, and Form 14157-A, Tax Return Preparer Fraud, or Misconduct Affidavits with documentation to support their claim of preparer misconduct. See IRM 25.24.1.2, RPM General Documentation Requirements, for additional information.

If an extension request is made via a telephone call, input an Action Note on CEAS to reflect the requested extension is being granted and for how long See IRM 4.19.19.4.1, CEAS Action Note.

If a taxpayer submits correspondence indicating they are victim of RPM, request Form 14157/14157-A on Form 886A and prepare the case for the next stage of the examination. If the case is in Status 24, and attempts to reach the taxpayer are unsuccessful, use Letter 555, Notification of Findings Based on Taxpayer Data - Tax Liability, to request the required documentation. Inform the taxpayer this does not extend the time to petition Tax Court, per, IRM 4.19.13.11.1, Taxpayer Responses - After Status 24.

Utilizing the Query Screen in RGS, add the appropriate amount of extension time to the end of the suspense period, regardless of how much time remains on the original suspense period.

If the suspense period has expired but the case has not yet been processed to the next status, back the case down if possible (For example., if the next letter has not been issued or triggered to CPS.).

If it is not possible to back the case down (For example, next letter has already been triggered to CPS) the taxpayer must be contacted to inform them that the extension cannot be granted and why. Every effort should be made to accommodate the taxpayer's request. Encourage the taxpayer to fax the documentation, if possible.

Cases in AIMS status 24 will run concurrently with the 90-day suspense period. The status 24 suspense date is only adjusted if the 30 days ends after the 90-day suspense date.

Encourage the taxpayer to send a signed Form 14157/14157A, a signed tax return, and/or a copy of the signed return they received from the tax preparer.

Update to Employee Group Code 5088 and input ARC 96 to indicate a taxpayer will provide the required documentation.

All procedures are applicable to both TS and SB/SE except where specifically identified by BOD.

When the taxpayer submits the requested documents, Form 14157/ Form 14157-A, Return Preparer Complaint/Tax Return Preparer Fraud or Misconduct Affidavit, prepare the case to be referred to the IDTVA Specialty Function Exam Team located in Kansas City. See IRM 25.24.2.2 , Return Preparer Misconduct, (RPM) Complaints Overview for additional information.

IRM 25.6, Statute of Limitations, provides the service-wide procedures for identifying and processing statute returns. Statute protection applies to RPM referrals if the ASED is within 180 days of expiring. Exam will close the audit and refer to IDTVA in a red folder.

Notate CEAS Workpapers. See IRM 4.19.13.6, Workpapers for all Cases.

Update to EGC 5088 and input Aging Reason Code (ARC) 96, if not already present, to indicate a taxpayer provide the required documentation.

For TS, close AIMS using Disposal Code 12, TC 300 $0.00, Manual Assessment amount of $1, Hold Code 4, and Priority Code 1. If not already present, include ARC 96 to indicate a taxpayer claimed an RPM allegation.

For SB/SE, follow same procedures as IDT closure per IRM 4.19.13.28.3(6) and (7) , Taxpayers Replies. Close AIMS Disposal Code (DC) 37 after completing the steps per the If and Then chart.

Leave a history item on TXMOD "IDTVAREFRL" .

Forward Form 14157/14157A and any supporting documents not available electronically to IDTVA via Form 3210.

If correspondence is received on a closed AIMS case (Closed Case Mail) and Form 14157/14157A or Misconduct Affidavits are attached, route to IDTVA via Form 3210 to be screened by IDTVA.

For Ghost Preparer/Non Signing, refer to IRM 25.24.1.2, RPM General Documentation Requirements.

If the taxpayer does not provide the requested documentation in 30 days, update out of EGC 5088 and return to normal Exam processing and/or the next stage of the audit.

If IDTVA determines a taxpayer is not a victim of RPM and the audit should continue, they will:

The AIMS Coordinator, or an authorized employee, will restore the AIMS database in the appropriate Status Code, unarchive RGS/CEAS, and assign to a technical unit to resume the audit process as required.

Use function 718 and the program code you are currently working when reporting time spent on RPM related cases.

Taxpayers who are invited to use TDC for their correspondence exam will receive an Initial Contact Letter (ICL) that includes the link to sign up for Secure Messaging. These ICLs include Letter 566-T, Initial Contact - Secure Messaging, and Letter 566-J, ICL - 45 Day Combo - Secure Messaging, in lieu of the standard Letters 566-S and 566-B. If a project code has a unique ICL, invited taxpayers will receive the TDC version of that ICL.

Letter 525-T, Exam 30-Day Letter - TDC Version, is used in lieu of Letter 525.

Letter 692-T, Request for Consideration of Additional Findings, is sent in lieu of Letter 692-M.

If any additional letters are needed, use TDC versions on RGS.

To effectively identify how many taxpayers sign up to use TDC, various AIMS Tracking Codes are used. Proper input of the correct tracking code will assist management in determining if a taxpayer opts into TDC and will track the taxpayer’s involvement throughout the TDC process.

Workload delivery inputs tracking code 2020 on all cases that are eligible and invited to use TDC.

A clerk will update the tracking code (TC) to reflect the current status of the TDC case. Updating a tracking code will override the previous tracking code since there can only be one tracking code per case. Based on actions taken by the taxpayer, the clerk will update the tracking code as follows:

To facilitate the best use of the TDC digital platform, some standard procedures for correspondence examinations are modified for cases worked in TDC. Unless otherwise stated in this IRM section, the same procedures for working a paper correspondence examination are followed with the following exceptions:

Guidance for working a correspondence examination in TDC can be found in the TDC User Guide.