Internal Revenue Manual (IRM) 5.9, Bankruptcy and Other Insolvencies, contains the Service’s position, procedures, information, instructions, guidance, and references concerning bankruptcy cases, stockbroker insolvencies, receiverships, assignments for the benefit of creditors, corporate dissolutions, and bulk sales.

This IRM specifically addresses the APOC application. APOC is an automated system that standardizes how proofs of claim are prepared and when claim processing occurs. APOC uses data from the Automated Insolvency System(AIS) and the Integrated Data Retrieval System (IDRS) to determine, select and calculate prospective proofs of claim related to Chapters 7A, 11, 12, and 13 bankruptcies filed with the nationwide (federal) bankruptcy courts. APOC populates AIS with data gathered during the APOC case processing.

The APOC program operates within the guidelines of the Bankruptcy Code (11 USC) and the Federal Rules of Bankruptcy Procedure.

The Director of Specialty Collection Insolvency is responsible for program oversight.

Territory and Frontline managers are responsible for ensuring reviews are completed as required per IRM 1.4.51.17.2, Operational Review, IRM 1.4.51.16.2, EQ Consistency Reviews, and IRM 1.4.51.5.2, Reviews.

Employees are responsible for following the provided guidance to process cases.

Program Reports. Eighteen APOC Reports are used to support program objectives. These reports are described in detail in IRM 5.9.14.2.5 (3), APOC Reports.

Program Effectiveness.

The Collection Policy, Insolvency program analyst ensures daily APOC processing is completed by the assigned CIO tax examiner. The analyst will contact the responsible CIO manager when APOC has not been run.

APOC restrict access to authorized APOC operators to run APOC. See IRM 5.9.14.2.1, APOC Operators, for more information.

The responsible FI manager will ensure that the APOC Case Reports described in IRM 5.9.14.2.5 (3) are worked by FI personnel as necessary.

A glossary of terms used in this IRM can be found in Exhibit 5.9.1-1, Glossary of Common Insolvency Terms.

Common acronyms acceptable for use in the AIS history are listed in Exhibit 5.9.1-2, Acronyms and Abbreviations.

Additional acceptable acronyms and abbreviations are found in the ReferenceNet Acronym Database, which may be viewed at: http://rnet.web.irs.gov/Resources/Acronymdb.aspx.

Acronyms used specifically in this IRM section are listed below:

Automated Proof of Claim (APOC) User Guide, Document 13163

Automated Insolvency System (AIS) User Guide, Document 13219

The US Bankruptcy Code and Rules

Insolvency Knowledge Base Home Page https://portal.ds.irsnet.gov/sites/vl114/pages/default.aspx

Taxpayer Bill of Rights, Pub 5170, and Taxpayer Bill of Rights page https://www.irs.gov/taxpayer-bill-of-rights

Overview. An APOC operator is an Insolvency employee designated in APOC to initiate and run the APOC processes. Operators must have an APOC User ID and the proper command codes in their profiles to connect to IDRS through APOC.

APOC Operator Back-up. APOC operators are the only Specialty Collection Insolvency (SCI) employees with access to the "APOC Batch Program" and therefore the only employees capable of running APOC nationwide. These operators will be each others' back-up.

APOC User ID. APOC operators are required to have two User IDs and passwords:

IDRS Command Codes. APOC operators must have the following IDRS command codes in their profile to initiate the APOC processes. APOC operators will receive a "Security Violation" without these command codes in their profile:

Processing Flow. The following steps demonstrate the order in which cases are handled on AIS:

Case Requirement. The following conditions must be met before a case will qualify for APOC processing:

Processing Delays. Problems that will delay the processing flow include:

"APOC Status" Field. The AIS Taxpayer screen has a field specifically for APOC. This field must be "blank" or the case will not be selected for the APOC process. The "APOC Status" field is updated when a case has been processed by APOC and will display an alpha code denoting one of the codes below:

Reopened Chapter 7 Cases. Chapter 7 cases that are reopened because assets have been identified will not be processed by APOC if a closed on AIS date is on the AIS entity screen. APOC Amends will not process cases if a discharge or dismissal date is on the AIS Taxpayer screen. Cases falling beyond the governmental bar date will generate a flag advising the user of an attempt to work a late filed claim. Chapter 7 cases may have periods that were abated because they met the requirements for dischargeability. These abated periods must be computed manually and included on the proof of claim. When APOC is utilized users may include these periods by inserting or creating new periods.

APOC Access. From the Case File screen, under Case Status use the APOC Processing drop down menu and/or the APOC Status field, under Employee section, to search APOC cases.

APOC Processing Search Options. The APOC Processing drop down menu includes the following search options:

Case Types. The APOC program is built around the following case types:

APOC Status Search Options. Cases can also be searched based on their status. See IRM 5.9.14.2.2 (4), APOC Status Field, for codes to search.

Restore Cases. The Restore Cases button allows the user to restore cases. Cases that were selected for APOC processing but did not make it through the APOC process will have an APOC status of X and may need to be restored to AIS. AIS permission levels determine access to this Menu Option.

APOC Screens. Selecting the APOC tab when you are in a case will display the APOC Case Detail screen. The caseworker can select the following buttons from the screen:

Report Access. APOC Reports are located in the Business Objects system. The APOC folder can be found under Public Folders, AIS, AD-HOC, AIS 5 - APOC. You must have "Standard User" access (via BEARS) to run any Business Objects AIS report. To run a report, simply double click on the report title, and the report will start to generate.

Parameters. Most APOC reports will require the input of a set of parameters. Parameters can include options for SEID, Org 1 & Org 2 codes, Chapter, Court Code, From and To dates, etc. See your manager for the correct parameters necessary to run a specific report.

APOC Reports. The APOC reports options are:

Flag Conditions. When APOC encounters a condition that cannot be resolved without human interaction, a flag will be issued. The flags are separated into Case and Period flags. The caseworker can resolve the flags on the Case Flags or Periods screens. APOC enables employees to update the case records for each flag condition. When all flag conditions for a specific case have been updated, APOC will be able to export the data to update the AIS proof of claim. Some flags are set to alert the employee to some existing circumstance and may not require any action aside from updating the flag itself. For each flag condition, a history record is added to AIS denoting its occurrence.

Flag History Documentation. Each flag condition encountered during the APOC batch process generates an automated AIS history record. The history message will indicate it was created by APOC and will include a brief description of each flag condition.

Time Frame Requirements. APOC flags should be worked at least five calendar days before the 341 meeting, with the exception of the Credits Posted after the Petition Date flag, the Lien Recorded Date Blank or Greater Than the Petition Date flag, and the Secured Period flag for Chapters 11 and 12 cases.

Case Flag Information. Case flags affect the entire case and alert the user of the need for additional review.

Case Flags. The name of each case flag can be found on the APOC Case Flag screen. Caseworkers must determine the proper action to follow to resolve the case flag issue so processing can continue. When all required actions to resolve the case flags are completed, go to the Case Flag screen, select the flag, and select Clear. This action alerts APOC the flag has been updated and the case can continue the processing cycle. The current date is automatically populated in the column to the right of the flag title.

Reopen a Case Flag. If the flag was updated in error, highlight the date again, select the Delete Key or Spacebar and select Save. The caseworker may use the arrow key to access the next flag at the bottom of the screen.

Case Flag Conditions and Resolutions. A brief description of each case flag condition and resolution is listed below:

Case Documentation. Caseworkers must document the actions they take to resolve APOC case flags and period flags. (See IRM 5.9.5.4, AIS Documentation). AIS histories generated by APOC alone are not sufficient case documentation.

Period Flag Information. Period flags impact a specific TIN, MFT, and period. Flagged cases are considered "Open" requiring manual intervention to address and/or clear the flags before the APOC case is exported to AIS. Caseworkers must determine the proper action to follow to resolve the flag issue so processing can continue.

Identifying Period Flags. Specific period flags can be found on the APOC Period screen. The APOC Period screen will show the number of open period flags. Select the Index of the specific period you would like to review. The lower section of the APOC Period Detail screen provides the name of each period flag. Each flag must be updated before the case processing can complete.

Update Period Flags. Each time a period flag is encountered, the caseworker must take additional steps to determine the appropriate action to be taken. Once those steps have been taken, the caseworker should go to the APOC Period Detail screen, select the flag to be updated and select the Clear button. This action alerts APOC the flag has been resolved, and the case can continue the processing cycle. The current date is automatically populated in the column to the right of the flag title.

Reopen Period Flag. If the flag was updated in error, highlight the date again, select the Delete key or Spacebar and select Save. The caseworker may use the arrow key to access the next flag at the bottom of the screen.

Period Flag Conditions and Resolutions. A brief description of each period flag condition and resolution is listed below:

Compliance Review. The caseworker should conduct a compliance review on cases with and without flags after all of the case flags have been cleared. The Case Compliance screen displays all compliance periods for a specific case.

APOC Compliance Screen. This screen is for compliance information only. No processing is done on this screen.

IMF Compliance Record Review. Each debtor IMF TIN is listed separately with compliance records for the past six years.

BMF Compliance Record Review. BMF compliance is conducted on each MFT with an open filing requirement. APOC will research the past 24 periods for quarterly returns and the past six periods for annual returns.

Prior Bankruptcy Extension (PBE) Period Review. Cases with a PBE must have a compliance check conducted for unfiled returns for the past "eight" years prior to the petition date. Previous bankruptcies could move an eight year old unfiled return from a general claim to a priority claim.

Delinquent or Filed Return. If a return is found, a "Y" appears under the data column entitled Compliance. The "Y" indicator only confirms a tax return was filed. It does not establish that the period is fully paid, or has a debit or credit balance. If APOC has not identified a filed return, the annotation in the Compliance column will be "⋆NO⋆" .

Removing a Claim Record from APOC. Should a caseworker choose to remove a claim record from APOC for a specific period, they should select the period from the APOC Period List, select the Remove Period button from the APOC Period Detail screen . This will remove the record. A message will appear on the claim record stating PERIOD REMOVED.

Insert Period. When a caseworker chooses to select the Insert button available from the APOC Periods screen a claim record will appear. The caseworker must choose the appropriate TIN from the drop down TIN options and update all blank areas with the appropriate information. Select the Save button to save the record.

Split Period. If an existing claim record must be split (usually when a secured period should be partially priority or general), the caseworker must use Insert button available from the APOC Periods screen and update all areas with the appropriate information. Select the Save button to save the record.

Claims Available for Printing. After cases have completed the APOC process, and the claim is transferred to the Proof of Claim screen, the claims are available for printing on the Proof of Claim screen under Generate POC. Options for printing include:

Process APOC Button. Both APOC and APOC Amends systems allow users to electronically file their claims using the Electronic Proofs of Claim (EPOC) system AFTER all required actions have been completed. The Process APOC button is located on the Case Detail screen.If caseworkers choose to move the claim to AIS without submitting the claim to EPOC, then they will still be able to process EPOC from the AIS POC screen. Caseworkers should utilize the Submit Claim for EPOC button in the EPOC area of the Proof of Claim screen, for this purpose.

Terminating a Claim. If a claim no longer should be filed (e.g., a case has been dismissed or converted to Chapter 7 No Asset), the case can be terminated in APOC to prevent the data from being written over to AIS. The Terminate APOC button is located on the APOC Case Detail screen. The caseworker must select Terminate APOC button.

Identifying Terminated Cases. When a case has been terminated, the caseworker will not be able to resolve any of the flag conditions. The case is immediately terminated and updated in APOC and AIS after the caseworker exits the Case Detail screen. The case automatically moves to "Completed Cases" . APOC will input:

Terminated Cases Report. Cases terminated in APOC will appear on the Terminated Cases Report located on the APOC Reports Menu in Business Objects.

Estimated Return Information. APOC processes periods for Debtor TINs found to be non-compliant. Estimates are created for any period where:

IMF Estimated Process. APOC computes an estimate using the following process for IMF periods:

Non-Employee Compensation.≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

IMF Reference Tables. IMF reference table requirements are as follows:

BMF Estimated Process. APOC computes estimates for BMF periods using the following process:

BMF Reference Tables. BMF reference table requirements are as follows:

BMF Split Period Estimates. APOC computes an estimate for “Split Periods” using the liability incurred after the period beginning date and before the petition date (pre-petition). It is computed as follows:

Amends Case Selection. The following must be met before a case will be eligible for APOC Amends processing.

Litigation Transcript Criteria. The following must be met before a transcript will be eligible for APOC Amends processing:

Estimated Paragraph Criteria. APOC Amends will process the litigation transcript if the tax period was included on the proof of claim with an "Estimated Paragraph" equal to one of the following:

Processing Delays. APOC may encounter processing delays caused by any of the following:

TC 150 Not Found on TXMODA. When a "TC 150 New Assessment" transcript is selected for Amends processing but the TC 150 does not appear on the TXMODA, APOC will abort the transcript and select it again during the next Amends process.

MFREQ. The Amends program has added the ability to run MFREQ. Occasionally there are times when the amends program is unable to retrieve INTSTB for a pending TXMODA. When this occurs APOC will abort the transcript and select it again during the next Amends process.

APOC Review Field. The "APOC Review" field located on the Litigation Transcript screen will automatically be populated with the date APOC Amends selected the transcript for processing.

APOC Status Field. The "APOC Status" field is located on the Case File and APOC Case Detail screen. This field will be populated with one of the following APOC Amends status codes:

H Status. All cases selected for amendment will be in "H (Hold)" status. When a caseworker removes the "H" from the "APOC Status" field, APOC will process the case during the next APOC run. The case will then move to AIS and update the AIS POC. All periods selected for amendment should be reviewed prior to removing the "H" .

T Status. A caseworker may choose to terminate the case from the Amends process by selecting the Terminate APOC button located on the APOC Case Detail screen. The case is immediately terminated and updated in APOC and AIS after the caseworker exits the APOC Case Detail screen. The case automatically moves to "Completed Cases" .

@ Status. When a caseworker removes the "H (Hold)" from the "APOC Status" field, APOC will select the case during the next APOC Initiation Process and process the amendment. The case will then move to AIS and update the AIS POC. The "@" sign will appear in the "APOC Status" field on the APOC Case Detail Screen and in the "APOC Status" field on the Case File screen when a case has been amended by APOC Amends.

APOC Amends Access. Select the Open - Amendment or Completed - Amendment option from the APOC Processing drop down menu from the Case File screen.

Open Amends cases are those cases that have not successfully completed the APOC Amends process. Open Amends cases are those with a date in the "Amend Beg Date" field and without a date in the "Amend End Date" field on the APOC Case Detail screen. These cases are currently in "H (Hold)" in the Amend status, awaiting processing determination by the caseworker.

Access Amended Period. The Periods List Screen will have a "Yes" under Amended column for the period that was selected for an amendment.

Field Insolvency. Field Insolvency groups generate and work Litigation Transcript System (LTS) reports on cases currently assigned to the Field.

Weekly Extractions. MF data are sorted and transmitted to the AIS database once a week. The AAPOC system will process the "Bal Due" TC 150 New Assessment transcripts for cases assigned to the Field and meet the "Case Selection" criteria.

Time Frame. Caseworkers must review "Open Amendment" cases within 30 calendar days of the Amend Beg Date.

TC 150 Flags. Flags will be issued for the following TC 150 transcripts processed through the APOC Amends system: