Purpose. Internal Revenue Manual (IRM) 5.9.3, Debtors' Delinquent Accounts, is the section within IRM 5.9, Bankruptcy and Other Insolvencies, that discusses general processes and procedures utilized when a debtor has delinquent account(s) and files bankruptcy or another type of insolvency proceeding.

Audience. Insolvency caseworkers and management in Specialty Collection Insolvency (SCI), which consists of Field Insolvency (FI) and the Centralized Insolvency Operations (CIO), are the primary users of this IRM section. Advisors, Revenue Officers, and other SB/SE employees may also refer to this section. Employees in functions other than SB/SE may refer to this section when working with a taxpayer that has filed an insolvency proceeding.

Policy Owner. The Director of Collection Policy is responsible for issuing policy for the Insolvency program.

Program Owner. The program owner is Collection Policy, Insolvency an organization within Small Business Self Employed (SB/SE) division.

Primary Stakeholders. The primary stakeholders of this section are SCI, SB/SE Collection, Taxpayer Advocate and Appeals employees.

Program Goals. The goal of this IRM is to provide fundamental knowledge and procedural guidance for working insolvency cases. Following the guidance in this IRM will ensure cases are worked in accordance with bankruptcy laws and regulations.

Insolvency's Database System. The Automated Insolvency System (AIS) database is a standardized control and processing web application used for processing bankruptcy, decedent, assignment for the benefit of creditors (ABC) and receivership cases. It provides case inventory, status control, proofs of claim, and exchange of information with the United States Bankruptcy Courts system.

Functions and Capabilities. AIS maintains a record of cases, displays data, and generates various documents. The software employed in the AIS application has the capability to retrieve, add, or modify data needed to manage a bankruptcy inventory.

Requirements for Automated Case Processing. All bankruptcy cases involving the IRS are loaded on AIS. At minimum, the following actions need to be taken for automated bankruptcy case processing:

Access to AIS. Employees requiring access to AIS must submit a Business Entitlement Access Request System (BEARS) request. There are several AIS profile "Roles" available to request. The employee’s manager will instruct the employee as to the appropriate role(s) that they should request. Once approved by their manager, an AIS User Administrator will create an employee profile in the AIS database. The AIS User Administrator will also complete/close the BEARS request. AIS will automatically terminate a user session after 30 minutes of idle time. AIS users will also require an active Employee User Portal (EUP) account. See EUP SharePoint Site for instructions to obtain accesshttps://portal.ds.irsnet.gov/sites/vl037/Lists/Book110/DispItemForm.aspx?ID=5.

Additional AIS Information. Various AIS processes are referenced in this IRM chapter. System enhancements periodically refine and improve AIS capabilities. Insolvency employees must stay up-to-date on any changes by reading the "AIS Message of the Day" posted on the AIS Home Page.

Obtaining Pertinent Information. When the IRS is advised through oral or written contact that a taxpayer has filed for bankruptcy, or issues remain from a prior bankruptcy, pertinent information should be collected to help Insolvency research the issue. Suggested information to gather from the taxpayer include the following:

Prompt Referral to Insolvency. IRS employees (e.g., revenue officers, examination employees, personnel from campuses, etc.), who have contact with taxpayers in bankruptcy and are aware of debtor concerns or complaints, should promptly contact CIO (same day notification, when possible). Referral information should be faxed to Insolvency using Form 4442, Inquiry Referral. Telephonic notification may also be used. All actions must be promptly documented by IRS employees.

Actions to Assist Insolvency. The following table explains actions IRS employees should take when a bankruptcy issue exists. These actions will help Insolvency process the bankruptcy case if a new filing has occurred or perform necessary research if issues stem from a current or prior bankruptcy.

BAPCPA Requirements. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) added mandatory actions for debtors who file bankruptcies on or after October 17, 2005. If debtors fail to meet these obligations, their cases may be dismissed or converted.

Automatic Stay. The filing of a bankruptcy petition under any chapter acts as an injunction or legal prohibition of further action against the estate, debtor, or property of the debtor. The injunction is called the automatic stay.

Individual Serial Filers. To discourage serial filings by individuals, the imposition or duration of the automatic stay for certain debtors who file bankruptcy and had a prior bankruptcy dismissed within the previous 12 months is affected. The automatic stay may terminate 30 days after the petition date or may not go into effect. (See IRM 5.9.5.7, Serial Filers, for additional information.)

Duration of the Stay. The stay against property of the estate continues until the property is no longer property of the estate. With the exception of serial individual filings discussed in IRM 5.9.5.7, the stay of any other act continues until the earliest of the date the case is dismissed or closed by the court or until a discharge is granted or denied (11 USC 362). The automatic stay never goes into effect at all (including the stay with respect to estate property) in certain multiple serial filer cases.

Factors Affecting IRS Actions. The complexity of bankruptcy laws and differing court interpretations obscure what actions are or are not permitted while the stay is in effect. Variables that can impact IRS procedures include, but are not limited to, the following:

Protection of Taxpayer Rights. Taxpayer rights protected by the Bankruptcy Code must be honored. IRS procedures dictate that all IRS employees exercise due diligence to ensure the automatic stay is not violated by taking prohibited actions after a taxpayer has filed bankruptcy (11 USC 362). The IRS must also prevent violations of the discharge injunction under 11 USC 524.

Damages and Attorney Fees. The IRS may be required to pay damages and attorney fees (but not punitive damages) when prohibited actions take place after the IRS has been notified of a bankruptcy filing. The IRS can only be held liable for damages and attorney’s fees if it commits a “willful violation” of the stay or discharge injunction. (See IRM 1.4.51.3.7.1, Payment of Damages.)

Automatic Stay Prohibitions. Most collection activity taken after a bankruptcy filing violates the automatic stay. The automatic stay prohibits many actions and may include the following:

Impact of the Stay on ASEDs. In most cases, the stay of assessment and suspension of the assessment statute expiration date (ASED) do not apply for agreed cases. On unagreed audit deficiencies, the statutory period of assessment is suspended while the automatic stay is in effect plus 60 days after. Exam maintains a suspense file of cases for which a statutory notice has been issued, and assessment is stayed because a Tax Court petition cannot be filed. The ASED is determined from the date a statutory notice is issued until the TC 521 date.Examination employees are responsible for the input of the transaction codes effective for suspension. (See IRM 5.9.4.3, ASED/CSED; IRM 5.9.4.3.1, BRA 94 and BAPCPA's Effect on Assessments, IRM 5.9.4.4, Examination and Insolvency and Rev. Rul. 2003-80 .)

Pre-petition Levy Proceeds. If proceeds of a pre-petition levy are received by the IRS after a bankruptcy petition is filed, they are property of the bankruptcy estate. In a Chapter 13 case, 11 USC 1306(b) provides that the debtor remains in possession of all property of the bankruptcy estate unless otherwise provided in the confirmed plan or confirmation order. In most instances, post-petition levy payments are returned to the Chapter 13 debtor. Insolvency must be contacted for advice on handling levy proceeds. Insolvency may initiate an action to turn the funds over to the trustee or make a referral to Counsel to take legal action for adequate protection when the IRS has such a right. (See IRM 5.9.3.6 , Referrals to Insolvency on Bankruptcy Related Issues, and IRM 5.9.5.8, Levies and Bankruptcy.)

Certain Activities Allowed. The automatic stay does not prohibit the following activities:

Enforcement Action - Potential or Actual. Insolvency receives contacts regarding distraint actions taken against the debtor that remain outstanding and unresolved. Debtors may be aware they are facing imminent enforcement action or such action may be pending, and they want to advise the IRS of their bankruptcy filing. When an IRS employee outside of Insolvency learns of an enforcement action (e.g., outstanding levy or an open seizure action) and confirms the taxpayer has filed a bankruptcy, the employee must immediately notify CIO by faxing Form 4442, Inquiry Referral, or by calling CIO. Telephone and fax numbers are found on SERP.

Information Required. IRS employees are expected to advise Insolvency of pertinent information concerning distraint action(s), including the following:

Insolvency Actions. Insolvency may direct reversal of a collection action. However, in some cases, seeking relief from the stay, moving for dismissal, or requesting an adequate protection order from the court may be appropriate. Counsel's involvement, through Insolvency, is required on these matters.

Discharged Periods. Balances discharged by the bankruptcy proceeding may be erroneously sent back into the collection system. When the IRS receives notification of a problem concerning discharged liabilities, the IRS must begin actions within two business days of notification to correct the situation. If appropriate, after research has been completed, Insolvency will initiate an expedited request for adjustment actions to be taken on the discharged liabilities.

Internal Revenue Code Requirements and Collection Due Process (CDP).IRC 6320 requires the IRS to notify a taxpayer when a NFTL has been filed and give the taxpayer the right to a post-filing CDP hearing. IRC 6330 requires the IRS to give a taxpayer pre-levy notice of the right to a CDP hearing. See IRM 5.1.9.3, Collection Due Processing, for more information.

CDP Hearings. The responsibility for CDP hearings lies with the Office of Appeals. Collection Due Process issues are not often encountered after a bankruptcy is filed; however, questions and issues may still arise while a case is assigned to Insolvency. The debtor must be provided assistance and given information if an issue surfaces concerning CDP procedures.

The Automatic Stay and the CDP Process. When a taxpayer files a bankruptcy petition, the automatic stay prohibits a range of collection activities (11 USC 362(a)). While the automatic stay is in effect, a Notice of Federal Tax Lien (NFTL) for pre-petition taxes should not be filed. Similarly, no levies should be proposed or made for pre-petition taxes. If a NFTL is filed in violation of the automatic stay, Insolvency must withdraw the NFTL and the CDP lien notice may be rescinded. (See IRM 5.12.9.6.6, Rescission of CDP Rights for Withdrawals, IRM 5.9.5.9.1, NFTL Filing after Bankruptcy Filing, and IRM 5.9.5.9.1.(1), Rescinding NFTL CDP Rights.) If a CDP levy notice is sent while the automatic stay is in effect, it is void and does not grant the right to a hearing and any levies made in violation of the stay must be released. Insolvency should consult Counsel, as needed.

Bankruptcy's Effect on CDP Hearings. Generally, the IRS will postpone or suspend CDP lien and levy hearings while the automatic stay is in effect.

Joint CDP and Non-Debtor Spouse. There may be instances when both spouses request a CDP hearing and only one spouse filed a Chapter 11 or Chapter 13 bankruptcy petition. In order to resolve the non-debtor's part of the joint CDP, Appeals may contact CIO to request mirroring of the joint tax period when the bankruptcy plan is confirmed. CIO will input the mirroring transaction codes, monitor for the MFT 31 modules to be created on IDRS, and input the TC 522 with the appropriate bankruptcy closing code to the non-debtor's MFT 31 module to reverse the bankruptcy freeze and to reflect that the bankruptcy freeze was not applicable for this spouse. (See IRM 5.9.4.4.2, MFT 31 Mirroring Requested by Appeals and Other Organizations, for additional information.)

Court Review of CDP Determinations and Bankruptcy. The commencement or continuation of a Tax Court proceeding is prohibited while the automatic stay is in effect (11 USC 362(a)(8)). However, for bankruptcy petitions filed by individual debtors, the automatic stay against commencement or continuation of Tax Court proceedings does not extend to post-petition taxes. Insolvency should be contacted when case-specific questions arise.

CDP Resources. Additional information, guidance, and assistance on the Collection Due Process can be obtained from the following resources:

Taxpayer Rights. Per the Taxpayer Bill of Rights (TBOR), taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay, or ability to provide information timely.

Taxpayer Advocate Service. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels. For additional information on the Taxpayer Bill of Rights, visit https://irssource.web.irs.gov/TAS/SitePages/TaxpayerRights.aspx.

Taxpayer Advocate Case Criteria. TAS generally does not handle cases when a taxpayer is in litigation, which may include bankruptcy litigation. See IRM 13.1.7, Taxpayer Advocate Services Case Criteria, for more information on TAS case criteria and IRM 13.1.10.10.2, Request for Assistance in Which Counsel or the Department of Justice has Jurisdiction, for information about TAS litigation procedures. Referrals from SCI to TAS are rare. However, any referral to TAS must be made on a Form 911 ,Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order).

TAS Referrals to Insolvency. If the taxpayer contacts TAS when there is an open bankruptcy case, TAS follows case transfer guidelines found in IRM 13.1.17.3, Determining if the TAS Case Transfer Guidelines Apply. Once transferred, TAS's jurisdiction is very limited because the case is under the jurisdiction of the Bankruptcy Court. TAS can only refer account related issues to SCI or the attorney representing the government; i.e., the Assistant United States Attorney (AUSA) or the Department of Justice (DOJ) Attorney, representing the IRS in the bankruptcy litigation for their consideration.

Service Level Agreements. The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage & Investment (W&I) Division, Small Business & Self Employed (SB/SE) Division, Tax Exempt & Government Entities (TE/GE), Criminal Investigations (CI), Appeals, and Large Business and International (LB&I) that outline the procedures and responsibilities for the processing of TAS casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. These agreements are known as Service Level Agreements (SLAs). The SLAs are located at https://irssource.web.irs.gov/TAS/SitePages/SLA.aspx. When adjustment actions exceed the TA's delegated authority, the Advocate's office can refer a case to SCI for assistance by using an Operations Assistance Request (OAR).

Disputed Resolutions. If an SCI caseworker and TAS cannot agree on relief after attempting to reach a satisfactory resolution, the matter must be elevated to the SCI caseworker's manager. If an agreement is not reached at the managerial level, the case file must be forwarded (along with a description of SCI's position) to the local TAS office.

Insolvency Contacts. Revenue officers (ROs) must immediately contact CIO or the local Field Insolvency office by phone or fax upon learning of a bankruptcy when no TC 520s are posted on IDRS to freeze the taxpayer’s accounts. SCI may not be aware a taxpayer has filed bankruptcy because:

Revenue Officer Responsibilities. Upon learning an assigned taxpayer has filed bankruptcy, ROs should take the following steps:

Additional Information for ROs.

Specialty Collection Insolvency Requests for RO Files. When a taxpayer in a RO's inventory files bankruptcy, the FI caseworker may request that the paper file be sent to them for review. The FI caseworker may be verifying schedules of expenses, looking for evidence of fraud, or checking for assets. The FI caseworker must return the paper file to the Field Collection group within 21 calendar days of receipt so it can be placed in the RO closed case files. Any documents needed by SCI beyond the 21 day time frame should be photocopied by SCI .

Withheld and Collected Taxes. Trust fund taxes are taxes required to be withheld or collected by a third party (e.g., an employer) and paid over to the government (IRC 7501(a)). The Trust Fund Recovery Penalty (TFRP) allows the IRS to assess against responsible parties when trust fund taxes are not paid over to the government (IRC 6672). IRM 5.9.8.4.2(18), Aspects of the Initial Case Review in the Chapter 11 Case, TFRP Issues, contains a list of parties that may be assessed a TFRP.

Urgency. Timely identification of trust fund taxes in bankruptcy is critical. In bankruptcies, the IRS is often working against short deadlines for confirmations and bar dates. If SCI fails to file a timely proof of claim for trust fund taxes, the IRS may not be paid.

Forms Reporting Trust Fund Taxes. Forms 941, 943, 944, 945 (Withholding from Wages and Federal Insurance Contributions Act),Form 1042 (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons), and CT-1 (per the Railroad Retirement Tax Act) report trust fund taxes. Subtitle D of the IRC identifies miscellaneous excise taxes considered trust fund taxes and reported on Form 720. (See Chapter 25 of Subtitle C, Sec. 3505(b), Liability of Third Parties Paying Wages.)

Treated as a Tax. The TFRP is assessed and collected in the same manner as a tax (IRC 6671(a)).

One Time Collection. Withheld income and employment taxes or collected excise taxes are collected only once, whether from the business and/or from one or more of its responsible parties.

Pre-petition Trust Fund Quarters. Any TFRP accruing on tax periods ending before the bankruptcy petition is filed constitutes a pre-petition tax liability, even if the TFRP assessment was not made before the bankruptcy was filed.

Preparation of Claim. The government's proof of claim should include the full amount of any trust fund tax pending (e.g., include all applicable Form 941 tax quarters). If an accurate amount is not known at the time the proof of claim is prepared, SCI can file an unassessed (estimated) claim and an amendment can be prepared, when possible. IRM 5.9.3.10.1, Calculating Trust Fund, and IRM 5.19.14.3.2, Trust Fund Calculation, explain the calculations needed to estimate a TFRP for employment taxes should the debtor be an individual who is responsible for ensuring business trust fund taxes were paid and who willfully failed to do so. TFRP liabilities are not dischargeable in all individual bankruptcy cases even if the IRS does not file a claim for those liabilities.

ASED Protection. The assessment statute expiration date (ASED) must be protected. Returns should be secured as soon as possible and the TFRP investigation begun immediately upon learning a bankruptcy has been filed. IDRS research should be conducted and files should be reviewed (such as the debtor's petition, schedules and statement of financial affairs) to determine the names, titles, addresses, and social security numbers of potentially responsible parties.

Information at 341 Meeting of Creditors. All available administrative means should be used to complete the TFRP investigation. For example, a FI caseworker or a RO may attend the 341 meeting of creditors to interview a potentially responsible person, such as an officer of a company.

General Rules for TFRP Investigation. If corporate trust fund taxes are due, and the case is assigned to a RO, the RO's manager will generally issue an ICS OI for the TFRP investigation. However, if the case is not assigned to a RO, SCI may issue Form 2209, Courtesy Investigation, or an ICS OI for the TFRP investigation to the RO group responsible for the corporate address identified on the bankruptcy petition. In either case, the deadline on any OI requesting a TFRP investigation should be 90 days to allow sufficient time for the RO to complete the investigation and issue Letter 1153. (See IRM 5.9.3.10.2, ICS Other Investigations (OIs) to Request a TFRP Investigation, for additional information.)

TFRP Investigation Criteria. Generally, the TFRP Other Investigation (OI) issuance is based on ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and collectibility factors. See IRM 5.7.4.2.1(4) , Factors When Considering Trust Fund Balance Owed Amounts, when determining if an OI may be necessary on cases below the dollar criteria. Local guidelines must be followed on:

TFRP OI Responses. RO group managers will ensure investigations meeting underlying balance due priority factor categories presently being worked will be worked to conclusion. For cases meeting the criteria, the RO will issue Letter 1153, Proposed Trust Fund Recovery Penalty Notification, to propose a TFRP assessment, complete Form 9327, Non-assertion Recommendation of Uncollectible Trust Fund Recovery Penalty or of Uncollectible Personal Liability for Excise Tax , if making a non-assertion recommendation, or Form 2750, Waiver Extending Statutory Period for Assessment of Trust Fund Recovery Penalty, to secure necessary ASED waivers. Investigations not meeting the investigation criteria will be returned to SCI with no action. Additionally, RO group managers may reject an OI for a TFRP investigation when there is less than 6 months remaining on the ASED. (See Exhibit 1.4.51-18, Guide for ASED Report (Field Insolvency), for additional information.) SCI employees must document the findings of the OI in the AIS history.

Chapter 11. In corporate Chapter 11 bankruptcies, the TFRP investigation should be initiated and completed promptly. Form 2750, Waiver Extending Statutory Period for Assessment of Trust Fund Recovery Penalty, should be secured from all potentially responsible parties only when the TFRP ASED will expire before the TFRP can be assessed. An approved Form 4183, Recommendation re: Trust Fund Recovery Penalty Assessment, should be completed for all corporate Chapter 11 cases requiring a TFRP determination. An assessment may be withheld when specific conditions are met. (See IRM 5.9.8.11(6), Trust Fund Considerations in Chapter 11, In Chapter 11 - Withholding Assessment Against Responsible Persons.) Generally, caseworkers will consider the following when determining if assessment of the TFRP will be withheld:

Chapter 7. In corporate Chapter 7 (liquidating) bankruptcies, unless compelling evidence indicates assets in the bankruptcy estate are sufficient to satisfy the trust fund liability, SCI will generally recommend assessment of the TFRP. This may be the last opportunity the government will have to collect.

Expedite Information to Specialty Collection Insolvency. The TFRP investigation must be completed promptly and the case file forwarded to SCI according to local procedures. SCI should receive the proposed TFRP liability amount on an expedited basis.

Potential TFRP Assessments - Estimated. If a potentially responsible person has filed bankruptcy and the TFRP has not yet been assessed, and an investigation is pending, the FI caseworker should be notified so the liability can be included on the proof of claim prior to the bar date (or by confirmation date, if SCI so requests). If necessary, SCI should be provided with as accurate an estimate as possible of the TFRP so it can be included in a timely-filed proof of claim. An amendment will be prepared later when the exact assessment amount is known.

Monitoring of Corporate Bankruptcies. SCI offices must establish a follow-up system for trust fund taxes in corporate bankruptcies to ensure:

Chapter 13. When a potentially responsible person is in a Chapter 13 bankruptcy, due to the quick confirmations that take place in these proceedings, prompt contact with the FI caseworker is essential. If the FI assignment is unknown, the RO can either call CIO to get the caseworker's phone number or use the Insolvency National Field/Centralized Site Directory on SERP to locate the correct phone number.

Coordination – ROs and Specialty Collection Insolvency. ROs and Insolvency caseworkers must maintain close contact to coordinate actions required for the TFRP process and suspension of accounts assigned to Field Collection.

"TFRP" Case Classification. Whenever there are unpaid trust fund taxes subject to assertion of the TFRP, caseworkers must open a "TFRP" case classification on AIS. The classification must remain open on AIS until the TFRP assessment has posted to IDRS or until a non-assertion has been approved. Adding the "TFRP" case classification alerts caseworkers of the pending assessment, as well as provides an AIS tool to monitor for imminent ASEDs.

ASEDR Indicator. Once a claim has been added to the proof of claim screen, the caseworker needs to verify and adjust the ASED date, if necessary, as well as update the "TFRP" drop down for each period to reflect the TFRP status. This indicator is used to create the ASED Follow up Report. The caseworker can select from the following options:

Protection of the Government's Interests. Prompt completion of SCI initiated courtesy investigations enables FI to file proofs of claim by the bar date, timely respond to objections and other motions before the court, and recommend appropriate legal action. When working these assignments, ROs and RO advisors are encouraged to:

Exempt or Abandoned Property Investigations. FI may initiate asset investigations requiring Field Collection actions relating to exempt property, if a previously-filed Notice of Federal Tax Lien is valid. FI may also initiate asset investigations requiring Field Collection actions relating to abandoned property due to the IRS's statutory lien. Coordination with FI is necessary when legal questions and issues arise. (See IRM 5.9.17.5, Exempt, Abandoned or Excluded Property (EAEP).)

Field Collection Actions. Required RO actions may include the following:

RO Report to Insolvency. ROs should furnish timely reports containing relevant facts to the FI group requesting the investigation, including, but not limited to the following:

Required Actions on Post-petition Accounts. When seeking post-petition unfiled tax returns or payment of a post-petition balance due account, ROs should take the following actions:

Bankruptcy Code. The Bankruptcy Code does not prohibit the gathering of tax information, unless it is an act to collect a pre-petition tax in violation of the automatic stay.

Alternatives Preferred. Although a summons may be served during bankruptcy, it is not a preferable course of action unless recommended by Counsel. The following actions should be attempted in lieu of issuing a summons:

Production of Records. Service of a summons is permitted when production of records is needed to prepare a personal or corporate tax return of a debtor-in-possession (DIP). It is also permitted when production of records is needed to prepare post-petition employment or excise tax returns of an officer of a DIP.

Collection Summons Prohibition. During the pendency of the automatic stay, service of a collection summons is not permitted.

IRC 6020(b) Returns. Normally, delinquent employment tax returns are prepared under IRC 6020(b). When a tax return is secured or prepared under these procedures by Field Collection, a copy must be expeditiously sent to Insolvency. If the RO knows the case is being handled by FI, copies of the returns may be sent to the FI office handling the case. If the RO does not know which Insolvency office controls the account, the copies of the returns should be mailed to CIO address to be forwarded appropriately. (See IRM 5.9.11.2, Insolvency Mail, IRM 5.9.11.3, Field Insolvency Mail, or the Insolvency National Field/Centralized Site Directory http://serp.enterprise.irs.gov/databases/who-where.dr/insolvency/national-field-centralized-site-directory.html for additional information.) The return information is needed for proof of claim purposes.

Overview. The Fixing America’s Surface Transportation (FAST) Act created a new code section (IRC 7345) which authorizes the IRS to notify the State Department that an individual is certified as owing a seriously delinquent tax debt. The State Department generally will not issue or renew a passport to an individual after receiving the certification from the IRS. See IRM 5.19.25 , Passport Program, for more information.

Seriously Delinquent Tax Debt. For the purposes of the FAST Act, a taxpayers has "serious delinquent tax debt" if they have unresolved tax debt of over $50,000, which is adjusted to $55,000 (as of January 1, 2022) due to inflation that has been assessed and for which:

Identifying Certified Cases. A TC 971 AC 641 will be systemically uploaded to identify certified cases. The TC 971 AC 641 will be added to CC ENMOD and CC IMFOLE to identify the certified individual by their SSN and date of certification notice certified cases.

Bankruptcy Exclusion. In general, bankruptcy cases will be excluded from certification.