In General. Field Counsel must establish appropriate procedures to learn of the entry of each judgment or appealable order concerning any collection case at the earliest possible time. The Department of Justice (DOJ) has instructed each U.S. Attorney to promptly furnish copies of all opinions, orders, and decisions directly to the appropriate Field Counsel office. With respect to adverse state court decisions, the U.S. Attorney will explicitly advise Field Counsel of the applicable state court appellate time limits within which the Government’s appeal processing is to be completed.

Correspondence. Upon being informed of an adverse decision by the Tax Division or the U.S. Attorney, Field Counsel should immediately contact the Associate Chief Counsel office with jurisdiction over the case, by telephone or email, to advise the appropriate branch chief. As soon as the adverse decision is received, Field Counsel should fax or email a copy to the appropriate Associate office. All pertinent documents to the issues on appeal should be transmitted immediately to the appropriate branch without waiting for a request by DOJ or the Associate office. The correspondence should not be directly sent to DOJ or the U.S. Attorney. If time permits, the Associate office attorney may request additional documentation from Field Counsel.

Time Limitations. Unless a specific deadline has been set or the circumstances of the case require a shorter period to act, within 30 days of the adverse decision, Field Counsel should contact the DOJ attorney who tried the case and request the filing of a protective notice of appeal.

Offers in Settlement. If the Tax Division forwards an offer in settlement in an appeal case, the matter, at a minimum, will be orally coordinated with Field Counsel. If time permits, the Department of Justice letter, together with copies of the offer in settlement and any documents necessary to consider the offer in settlement, will be forwarded (preferably by secure email) to Field Counsel for a recommendation. Field Counsel will respond with the recommendation. The Department of Justice has agreed that when requesting Chief Counsel’s view, it will furnish all pertinent information, including its views on settlement.

Recommendations. See CCDM Part 36, Appellate Litigation and Actions on Decision, for procedures concerning appeal recommendations.

Closing the Field Counsel Case. Field Counsel’s case should be closed and a copy of its closing memorandum placed in the legal file prior to transmittal of the file to the Associate office with jurisdiction over the case. The file or relevant portions thereof may be transmitted electronically. If the case cannot be closed because other aspects of the case remain open at the trial level or due to other reasons, Field Counsel should either extract from the file all documents pertaining to the appeal, or transmit such documents to the Associate office, with recommendation of Division Counsel concerning an adverse appeal, if appropriate. These documents may be maintained in electronic form and transmitted electronically to the Associate office.

Appellate Briefs and Documents. If more than one copy of any appellate brief is received from the Tax Division, the Associate office will transmit a copy to Field Counsel. In addition, the Associate office will transmit to Field Counsel a copy of any important document or letter received from the Tax Division. Field Counsel is not required to furnish any comments on the brief, document, or letter unless requested to do so by the Associate office or it believes some comment is necessary.

Return of the Area Counsel File. Most files will be maintained in electronic form. If Field Counsel sends paper files to the Associate office, these paper files will be kept until the time for certiorari expires and then returned to Field Counsel.

For procedures relating to appeals and the process for recommending for or against appeal, see CCDM 36.2.1, Appeal Recommendations in General.

For procedures to be followed in certiorari matters, see CCDM 36.2.2, Petition for Writ of Certiorari.

In most instances, the Department of Justice will return the administrative files to Field Counsel with its closing letter. It may be necessary, however, to remind the DOJ attorney to return the files. In many cases, documents are sent electronically and DOJ will not have paper files to return. Upon receipt of the files and closing letter, Field Counsel should prepare a closing memorandum, returning any paper administrative files to the Service Center or Area Director. A closing memorandum serves to process a refund suit for closing, tells the basis on which the case was closed, and disposes of the legal and administrative files. The closing memorandum may be sent electronically if there are no paper files to close or return.

There are two types of closing memoranda: Form 3011-B, Transmittal Memorandum (100% Penalty Cases), is used only for trust fund recovery penalty cases, and Form 3011-A, Transmittal Memorandum, is used for all other tax cases. The administrative files are returned to the Area Director only when a trust fund recovery penalty case is closed. If any returns were requested in a trust fund recovery penalty case from the Service Center, these files are returned to the Service Center. For TEGEDC cases, the closing memorandum may be sent electronically. If paper administrative files are obtained, they should be returned to the Service Center or Area Director. Where files are accessed electronically through the Reporting Compliance Case Management System (RCCMS), the files should be returned to the RCCMS Closed Case Library.

If a refund has been made, a copy of the computation used to determine the refundable amount and a copy of the Notice of Adjustment memorandum should be in the legal file.

The office closing the case must determine whether the case is to be classified as significant pursuant to the criteria listed in this paragraph. The legal files in cases classified as significant are forwarded to the Office of the Associate Chief Counsel (P&A), for storage. These files are retained for thirty years by one of the federal record centers of the General Services Administration, and then destroyed. All other cases are retained for ten years. The classification must be made by a person who is, at a minimum, a GS/GM-15. If a case is classified as significant, the words, "Significant Case" are to be written or stamped on the outside of the legal file. The initials of the person classifying the case and the date should be placed close to the words, "Significant Case." The following is a guideline as to which cases should be considered significant:

Closed files should normally be retained in the closing office for one year prior to being forwarded to a federal records center for storage so that they may be easily retrievable if needed in related or similar cases. More rapid forwarding to a federal records center may be authorized by the Area Counsel.

Payment memoranda are prepared at the conclusion of a refund suit when the Government has either partially or totally lost a case and a final judgment in favor of the taxpayer has been entered, or when the Government has settled or conceded the case resulting in a refund or credit due the taxpayer. The payment memorandum authorizes and instructs the Service to refund or credit a certain amount of tax, applicable amounts of penalty, and assessed underpayment interest. When a refund is warranted at the conclusion of a refund suit, the case cannot be closed until the refund is paid to the taxpayer, so it is important that the payment memorandum be prepared and transmitted timely. See CCDM 34.10.1.2.2.1(2) to determine who — the field attorney or the Department of Justice attorney — prepares the payment memorandum and transmits it to the appropriate IRS Campus for processing.

If the refund case involves a trust fund recovery penalty, Department of Justice and field attorneys should not follow the payment-memorandum procedures identified in CCDM 34.10.1.2.2. Instead, the DOJ attorney should notify the field attorney, in writing, that the refund litigation is concluded, and the field attorney should work with the local Field Collection Advisory Group (Advisory) to get a refund issued to the appropriate claimant(s). The assigned field attorney will need to provide a copy of the judgment or settlement document to Advisory, along with a memorandum explaining, in detail, the action that Advisory needs to take to refund the specified amounts to the claimant(s).

Cases in litigation should be kept open until notified by the Department of Justice or United States Attorney that the litigation has been completed, the matter will not be pursued further, or their case has been closed. In situations in which Field Counsel, based on the facts known to the office, is of the opinion the proceeding can be considered closed, Field Counsel may write to DOJ and advise them that the Chief Counsel’s file is being closed.

When there is an adverse order entered (excluding bankruptcy appeals to the district court), the case should be closed in the Field Counsel office and the file transmitted to the Associate Chief Counsel with jurisdiction over the case, together with any proposed appeal letter or recommendation of the Field Counsel.

Bankruptcy Code Proceeding. The general rule set forth in (1), above, is equally applicable to all Bankruptcy Code proceedings. However, if in the discretion of the supervisor, it is determined that no additional work will be necessary, the case can be closed upon the completion of the required work. If it becomes necessary to reopen the case under the same chapter, the reopening will be counted as a new receipt for statistical case load purposes. The reopened case will not be included as a receipt for staffing model purposes.

Whenever a case is closed, the office or officials who originated the case should be advised of such closing, the reason for the closing, and any action which should be taken. The following procedures are suggested.

When a memorandum or letter is inappropriate or not available, a memorandum should be prepared for the file to advise any subsequent reader of the reason for closing the file.

Use of a Closing Stamp. The Area Counsel may find it feasible to use a process similar to the one described below which is in use in Associate offices.

Closing Field Counsel Files. The Field Counsel files will be considered closed upon completion or review of the material submitted by the Area Director office. They will be retained for one year after the last piece of correspondence has been received, and then they will be destroyed.

Significant Associate Office Cases. Due to space and budgeting limitations, the retention period for closed Associate office files by the Federal Records Center is now 10 years after closing. However, pursuant to Records Control Schedule 106, if a file is designated as significant, it will be retained for 25 years prior to destruction. The designation as significant must be:

Definition of Significant. A significant case is one that contains materials of an important precedential nature in which the legal issues are likely to arise again and are novel or controversial. The designation should not be made routinely. It should only apply to those cases which clearly merit an extended retention period of 25 years. The determination is to be done on a case-by-case basis and is a judgment to be made by the supervisor/manager.

Penalty Refund Cases Under IRC §§ 6682, 6694, and 6702. In any case in which a taxpayer has filed an action for a refund of the penalty imposed under IRC §§ 6682, 6694, or 6702, and Field Counsel has been advised that the court has made a final determination as to the taxpayer’s liability for the penalty, the Service Center will be notified as to the final outcome of the litigation so that steps can be taken to either collect or abate the penalty.