This IRM provides guidance for making, communicating, and documenting compliance relief determinations when a taxpayer has been affected by a federally declared disaster and may qualify for relief from compliance activity.

IRC 7508A, Authority to postpone certain deadlines by reason of Federally declared disaster, significant fire, or terroristic or military actions.

26 CFR 301.7508A-1, Postponement of certain tax-related deadlines by reasons of a federally declared disaster or terroristic or military action.

Rev. Proc. 2018-58 provides a list of time-sensitive acts, the performance of which may be postponed under IRC 7508A.

SB/SE HCO has primary responsibility for the management of the Disaster Assistance and Emergency Relief Program.

The Director, Examination Headquarters, is the executive responsible for providing policy and guidance for Field, Specialty, and Campus exam operations and ensuring consistent application of policy, procedures and tax law to effect tax administration while protecting taxpayers’ rights. See IRM 1.1.16.5.5, Examination Headquarters, for additional information.

The Director, Examination Field and Campus Policy, reports to the Director, Examination Headquarters, and is responsible for the delivery of policy and guidance that impacts the field examination process. See IRM 1.1.16.5.5.1, Examination Field and Campus Policy, for additional information.

Field Examination General Processes, which is under the Director, Examination Field and Campus Policy, is the group responsible for providing policy and procedural guidance on standard examination processes to field employees. See IRM 1.1.16.5.5.1.1, Field Examination General Processes, for additional information.

All examiners must perform their professional responsibilities in a way that supports The IRS Mission. This requires examiners to provide top quality service and to apply the law with integrity and fairness to all.

Examiners and their managers should thoroughly acquaint themselves with the examination procedures and information contained in this IRM, as well as other resources, such as those listed in IRM 4.2.2.1.6 below.

The following table contains a list of terms used throughout this IRM.

The following table lists commonly used acronyms and their definitions used throughout this IRM:

IRM 25.16.1, Program Guidelines, describes how the IRS administers administrative tax relief when responding to tax-related issues due to federally declared disasters and other significant emergencies, under the Robert T. Stafford Act.

The resources below provide helpful information related to administrative tax relief as a result of a federally declared disaster:

If an eligible affected taxpayer (see IRM 4.2.2.5) does not opt out of the postponement period (see IRM 4.2.2.4.2), compliance activity involving interaction with the taxpayer, representative, or third parties is postponed until the postponement period expires (see IRM 4.2.2.4.1.1).

Compliance activity transparent to the taxpayer is generally allowed during the postponement period (see IRM 4.2.2.4.1.2).

Postponed compliance activity can resume at the taxpayer’s request.

Taxpayers must make an affirmative request to resume compliance activity. This request can be verbal or written. An affirmative request can also be made by a taxpayer’s authorized representative.

The taxpayer’s affirmative request should be clearly documented in the case file or on the optional Disaster Job Aid referenced in IRM 4.2.2.6 (3).

If a taxpayer has a –O freeze and opts out of the postponement period, the disaster tracking code and/or aging reason code (ARC) must be updated (see IRM 4.2.2.5.2 (3)).

The examiner must issue Letter 6106, which confirms the taxpayer opted out of the postponement period prior to resuming compliance activity.

IT systemically posts disaster account identifiers to Master File (MF) using ZIP Codes of taxpayers within the IRS designated disaster area after DPO provides the postponement period start and end dates.

An identifier posted to MF manually is the result of an action taken by an IRS employee for a specific taxpayer.

Disaster account identifiers consist of:

The –O and –S freeze are present on Command Code (CC) BMFOLE and CC IMFOLE.

TC 971 transactions are present on CC ENMOD, CC BMFOLE, and CC IMFOLE. AC 087 indicates a –O freeze while AC 688 indicates a –S freeze.

Disaster Indicators 1, 2, 3, and 4 are posted on CC AMDISA, CC ENMOD, CC BMFOLE, and CC IMFOLE. The Disaster Indicators are defined below:

The Disaster Indicator and TC 971 transactions post to Section 3–POSTED ENTITY TRANSACTION SECTION of CC ENMOD. See IRM 2.3.15.4, ENMOD Responses. The table below describes where to locate the various disaster account identifiers on CC AMDISA, CC BMFOLE, and CC IMFOLE:

Unique national ARCs and tracking codes are established by Examination Headquarters – Exam Case Selection (ECS) for each disaster where a –O freeze is applied. These codes are posted to the Examination Return Control System (ERCS) Code Listings websites.

Planning and Special Programs (PSP) will update the ARC and/or tracking code for all cases with a –O freeze that are controlled on ERCS in status 00 through 59. If an ARC or tracking code is already present on a module, only the vacant code will be updated. If a case already has both an ARC and tracking code, PSP will make a priority determination and there is a potential that neither code will be updated with the disaster ARC or tracking code.

If during the postponement period, compliance activity resumes for a case that received a –O freeze (e.g., exigent circumstances, or the taxpayer opts out of the postponement period), the disaster ARC should be updated to 111 and the disaster tracking code should be updated to 9269. If a non-disaster ARC or tracking code is present on the module, do not override the existing code(s).

If a taxpayer opts out of the postponement period and subsequently opts back in, the examiner must complete Form 5348 to update the ARC and/or tracking code back to the unique national ARC and tracking code, if applicable, established by ECS, which are posted to the ERCS Code Listings website.

The disaster-related ARC and tracking code should remain on the case after the postponement period expires.

If the ERCS system is used to request AIMS controls for related return pick-ups, the disaster-related ARC and tracking code should be added when the records are established. This applies even after the postponement period expires.

ERCS tracking procedures are not applicable for non-ERCS cases.

The optional Disaster Job Aid see (IRM 4.2.2.6 (3)) may be used to make and document the compliance relief determination. If the Disaster Job Aid is not used, examiners should follow the guidance in the table below and ensure all required items are documented on a supporting workpaper filed under the 6XX reference number created in IRM 4.2.2.6 (2):

A taxpayer with a systemic –S freeze can request relief from compliance activity by self-identifying. To self-identify, the taxpayer must contact the examiner and make the request. The presence of a –S freeze and the taxpayer’s request are the only two elements required to begin the compliance relief determination. The optional Disaster Job Aid (see IRM 4.2.2.6 (3)) may be used to make and document the compliance relief determination. If the optional Disaster Job Aid is not used, examiners should follow the guidance in the table below and ensure all required items are documented on a supporting workpaper filed under the 6XX reference number created in IRM 4.2.2.6 (2):

A taxpayer without a disaster freeze can self-identify for disaster relief. The optional Disaster Job Aid (see IRM 4.2.2.6 (3)) may be used to make and document a disaster freeze determination and compliance relief determination. If the optional Disaster Job Aid is not used, examiners must follow and document the procedures below. The disaster freeze and compliance relief determinations must be documented on the job aid or a supporting workpaper filed under the 6XX reference number created in IRM 4.2.2.6 (2).

Examiners must confirm and document that a –O or –S freeze is not present on the taxpayer’s account. If the taxpayer has a –O freeze, follow the procedures in IRM 4.2.2.6.1. If the taxpayer has a –S freeze, follow the procedures in IRM 4.2.2.6.2. When taxpayers contact the IRS to self-identify, they must provide the reason(s) they meet the criteria to qualify for disaster relief. If a disaster freeze is not present and a taxpayer self-identifies for disaster relief, they must be assigned to one of the following groups:

If a taxpayer is assigned to Group A in IRM 4.2.2.6.3 (2), they are eligible for a manual –O or –S freeze depending on the specific ZIP Code of the taxpayer’s principal residence or business location. Use the "Search for a ZIP Code" feature on the IRS Disaster Memos and Declarations by Calendar Year website to determine if the –O or –S freeze is applicable. To manually request the input of a disaster freeze, follow the procedures in Form 3177 Preparation - Manual Input of a –O or –S Freeze Job Aid.

If the taxpayer was assigned to Group B in IRM 4.2.2.6.3 (2), the taxpayer is not eligible for a disaster freeze.

The following table can be used to make a compliance relief determination for taxpayers without a disaster freeze who self-identify:

If the taxpayer is eligible for compliance relief, document the following:

Compliance activity will not be postponed for the following:

Criminal enforcement activity includes, but is not limited to, cases in AIMS status 18. In general, criminal enforcement activity, including grand jury and trial preparation assistance, will not be postponed. Disaster relief will be determined by the controlling jurisdiction (e.g., IRS, Department of Justice, etc.) on a case-by-case basis. For cases where Examination is providing cooperating agent assistance to Criminal Investigation (CI), the examiner and group manager will contact the assigned special agent to reach a determination on relief. Where needed, Counsel should be contacted and relief discussed prior to finalizing a determination.

If a case is not subject to postponement of compliance activity when a –O freeze is present, the –O freeze should not be removed from the taxpayer’s account or replaced with a –S freeze.

If the statute will expire during the postponement period, the examiner should call the taxpayer using soft contact procedures (see IRM 4.2.2.8.1) to explain the statute needs to be protected to postpone compliance activity. Revenue agents (RA) will not make a field visit.

Regardless of whether the examiner can reach the taxpayer by phone, a statute extension should be solicited following the procedures contained in IRM 25.6.22, Extension of Assessment Statute of Limitations By Consent.

If the taxpayer agrees to extend the statute, follow the procedures in IRM 25.6.22.5.12, Examiner’s Responsibility after Receipt of Consent.

If the taxpayer does not extend the statute, prepare and issue an agreed examination report with the appropriate Letter 5153, Examination Report Transmittal - Statute less than 240 Days (Straight Deficiency), (based on the type of examination) to notify the taxpayer they must agree to extend the period for assessment for Appeals to consider their case if it is unagreed. Allow 10 days for the taxpayer to respond. If the taxpayer refuses to extend the statute or does not respond, close the case using the appropriate unagreed case closing procedures.

In instances where the earliest ASED will have less than 180 days remaining during the postponement period, allow a minimum of 60 days after the postponement period start date before contacting the taxpayer to solicit a statute extension. This will allow the taxpayer time to recover from the immediate effects of the disaster. The examiner should use soft contact procedures (see IRM 4.2.2.8.1) and explain the statute needs to be protected to continue to postpone compliance activity. RAs will not make a field visit.

When soliciting a statute extension, the procedures contained in IRM 25.6.22 apply.

If the taxpayer agrees to extend the statute, follow the procedures in IRM 25.6.22.5.12 and postpone compliance activity.

If the taxpayer does not extend the statute, prepare and issue an agreed examination report with the appropriate Letter 5153 (based on the type of examination) to notify the taxpayer they must agree to extend the period for assessment for Appeals to consider their case if it is unagreed. Allow 10 days for the taxpayer to respond. If the taxpayer refuses to extend the statute or does not respond, close the case using the appropriate unagreed case closing procedures.

Soft contact entails approaching the taxpayer with caution and extreme sensitivity to their personal circumstances. Stress and fatigue are factors to consider even in instances where the taxpayer did not experience any personal, monetary, or physical damage from the disaster.

Soft contact must be used when initiating contact with a taxpayer who has a –O freeze. In addition, soft contact is required for the following situations:

If compliance activity is postponed for an in-process examination (i.e., prior contact has been made by the examiner) and a 30-day letter is not scheduled to default during the postponement period, call the taxpayer to cancel a previously scheduled appointment. Explain the postponement is being provided to allow the taxpayer an opportunity to recover in light of the disaster. Advise the taxpayer a letter will be issued confirming the postponement of activity. If an appointment was not previously scheduled, do not call the taxpayer.

Issue Letter 6029 or Letter 6102, depending on whether the taxpayer is eligible for a disaster freeze.

If compliance activity is postponed and a 30-day letter (e.g., Letter 569, Full/Partial Preliminary Claim Disallowance; Letter 915; or Letter 950) will default during the postponement period, the letter must be withdrawn and reissued at the end of the postponement period, unless exigent circumstances exist. To withdraw the 30-day letter, issue Letter 6016 or Letter 6102, depending on whether the taxpayer is eligible for a disaster freeze.

RA cases will remain in Status 13 (30-Day). Tax Compliance Officer (TCO) cases will remain in Status 12 (Started) and the AC will be updated to 08 (FOLLOW-UP ACT).

If the response due date for a 30-day letter occurred before the postponement period start date, but the case has not yet been forwarded to Technical Services, notate Form 3198 in the Forward to Technical Services, Other section: "Examination activity postponed – 30-day letter defaulted before postponement period start date" and forward to Technical Services.

Compliance activity may resume after the postponement period expires and the examiner confirms it was not extended.

Adherence to the statute procedures in IRM 4.2.2.7 should ensure there are no disaster cases with less than 180 days on the statute when the postponement period expires. However, examiners must still conduct a statute review for all cases when the postponement period expires. If cases are identified with statutes expiring in less than 180 days, the examiner must take the following actions:

To assist with the resumption of compliance activity, refer to the "next planned actions after the postponement period expires" (see IRM 4.2.2.6.1 (1), IRM 4.2.2.6.2 (1), IRM 4.2.2.6.3 (6), or the optional Disaster Job Aid, if used) that were documented when compliance activity was postponed.

When resuming compliance activity, the examiner should use soft contact procedures (see IRM 4.2.2.8.1). The impact of the disaster on the taxpayer should be assessed. Based on the taxpayer’s circumstances, compliance activity may be deferred beyond the postponement period end date for a reasonable period, if the statute is protected and group manager approval is secured.

Examiners must exercise flexibility and sound judgment when evaluating alternative records provided in lieu of records that may have been destroyed during the disaster. Taxpayers can refer to Pub 2194, Disaster Resource Guide for Individuals and Businesses, for assistance with reconstructing records after a disaster.

In some circumstances, a taxpayer’s oral testimony may be the only evidence available. If so, examiners should follow the guidance in IRM 4.10.7.3.2, Oral Testimony.

If Technical Services receives a –O freeze case from the Field without exigent circumstances (see IRM 4.2.2.6.4.1) or for other actions transparent to the taxpayer (e.g., fraud suspense, etc.), the case should be returned to the examination group.

For cases in Status 25 (Pre 90-Day) without exigent circumstances (see IRM 4.2.2.6.4.1), the statutory notice can be prepared, but not issued. Once the notice has been prepared, update all tax years to Suspense Type 508, Review Type 29. The Action Date should be adjusted to reflect the postponement period end date plus one day. Do not issue the statutory notice until after the postponement period expires.

For cases in Status 24 (90-Day Letter - (Notice of Deficiency)) with a default date during the postponement period, the Action Date should be adjusted to reflect the postponement period end date plus one day.

For cases in Status 21 (In transit to Technical Services), update ERCS to the appropriate 2X/3X Status Code, Suspense Type 508, Review Type 29. The Action Date should be adjusted to reflect the postponement period end date plus one day. Notice of deficiency and notice of claim disallowance cases can be assigned and reviewed during the postponement period. However, the prepared notice should not be issued until after the postponement period expires unless exigent circumstances exist (see IRM 4.2.2.6.4.1).

Actions that must be taken related to statutory notices of deficiency for affected taxpayers granted compliance relief depend on when a notice was issued or defaults (i.e., before or during the postponement period), or when the taxpayer petitions the Tax Court.

If the affected taxpayer's request to appeal occurred before the designated disaster, a Technical Services reviewer must contact the taxpayer or representative to confirm that the taxpayer is still ready for Appeals consideration. This contact must be documented in the case activity record.

If the affected taxpayer is ready for Appeals consideration, the case may close to Appeals following regular case processing procedures. If applicable, a statute extension is required and must be solicited if the statute will have less than 365 days when the case is received in Appeals.

If the affected taxpayer is not ready for Appeals consideration, they should be advised their case will not be forwarded until the postponement period expires. At the end of the postponement period, the statute date will be reviewed to determine whether a statute extension needs to be secured to allow for normal case closure to Appeals. Do not solicit a statute extension during the postponement period unless an exigent circumstance exists.

When correspondence is received from taxpayers during the postponement period, Technical Services employees should proceed with caution.

If the case file or correspondence contains telephone contact information, the taxpayer should be contacted using soft contact procedures (see IRM 4.2.2.8.1). Explain to the taxpayer that correspondence was received and the IRS is aware they may have been impacted by the recent disaster. If a statutory notice of deficiency was previously issued and the default date is within the postponement period, explain that the date to petition the Tax Court is extended until the end of the postponement period. The taxpayer must opt out of the postponement period before their case can be processed as a notice of deficiency reconsideration case (see IRM 4.8.9.25.2.1, Notice of Deficiency Reconsideration Cases). If the taxpayer wants to opt out of the postponement period, follow the procedures in IRM 4.2.2.4.2 and proceed. If the taxpayer does not opt out, they generally should be advised to petition if they disagree, otherwise the tax will be assessed.

Agreements received by Technical Services from taxpayers with a –O freeze present on their module should not be closed to CCP until after the postponement period expires (see IRM 4.2.2.4.1.1.1 (2)), unless an exigent circumstance (see IRM 4.2.2.6.4.1) exists. If an exigent circumstance exists, follow the case closing procedures in IRM 4.2.2.4.1.1.1 (1).

Payments received should be processed according to normal procedures (see IRM 4.2.2.4.1.2).

Disaster cases should remain in bankruptcy suspense and normal bankruptcy procedures will be followed. Updates to ERCS Suspense Type and Review Type are not immediately required. If an action needs to be taken (e.g., bankruptcy discharged/dismissed) during the postponement period, the case should be updated on ERCS to Suspense Type 508 - Action Date [postponement period end date], Review Type 29. If an exigent circumstance exists, see IRM 4.2.2.6.4.1.

Disaster cases should remain in fraud suspense and normal fraud suspense procedures will be followed. Updates to ERCS Suspense Type and Review Type are not immediately required. If an action needs to be taken (e.g., closing report received on a fraud suspense case) during the postponement period, the case should be updated on ERCS to Suspense Type 508 - Action Date [postponement period end date], Review Type 29. If an exigent circumstance exists, see IRM 4.2.2.6.4.1.

Case actions to be completed within Technical Services can occur since the case review does not require taxpayer contact.

A copy of the signed Form 906, Closing Agreement on Final Determination Covering Specific Matters, may be issued to the taxpayer using Letter 1595-G, Exam Executed Closing Agreement Transmittal Related to Disaster Relief. Notice 1462, should be included.

The case should not be closed to CCP since Form 906 is an agreement and the guidance outlined in IRM 4.2.2.4.1.1.1 applies.

For tax years beginning before January 1, 2018, Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) statutes are controlled at the partnership level. If the partnership has a –O freeze, notices should not be issued to the Tax Matters Partner (TMP) during the postponement period unless exigent circumstances exist (see IRM 4.2.2.6.4.1). If a partnership does not have a –O freeze, it is possible that one or more of the partners have a –O freeze. If an agent sends notices to the TMP, we are required to send notices to the notice partners within certain time frames. The Partnership Control System (PCS) will suppress all partner notices generated by PCS when there is a –O freeze, except the Notice of Final Partnership Administrative Adjustment. When notices are suppressed, it gives the user the ability to override the suppression and have the notice generated if necessary. When a notice is suppressed, the campus will hold the notice as long as the statute allows or until the postponement period has ended.

Once the postponement period has expired, determine if an extension to some or all of the IRS designated disaster area was provided. See IRM 4.2.2.10 (2) for more information regarding an extension of the postponement period.