The provisions of this section apply in general to all litigation cases controlled by Advisory. Required actions are to be taken by Advisory unless otherwise noted. Advisory is responsible for reviewing the Non-Insolvency LAMS Report on (no less than) an annual basis. See IRM 25.3.6.4.1, Periodic Open Case Reviews, and IRM 25.3.6.5.4, TC 520 Reversals (TC 521).

The Non-Insolvency LAMS Report is a tool to be used along with other means of maintaining proper case controls, such as:

This section covers the various types of authorities for litigation.

Referral Authority: Counsel has the authority to refer suit actions to the Department of Justice. The IRS Collection authority to approve most suit actions is delegated to Collection territory managers and Advisory territory managers. However, Area Director approval is required, if the recommendation is to either:

This IRM provides instructional procedures for Advisory when controlling litigation cases. See also:

IRM 5.17.1, Legal Reference Guide for Revenue Officers, General Information, provides a list of the parties with an explanation of their role with suits.

Program Reports: Suits are individual to the case and are of a wide variety and scope. Advisors are required to monitor their ongoing litigation and open judgment cases annually and more frequently if appropriate. There are several reporting tools assisting advisors with this task and they notate the status in the Integrated Collection System (ICS) history.

Program Effectiveness: Whenever litigation involving collection matters is pending, ongoing, or liabilities are reduced to judgment, advisors are responsible for coordination with stakeholders, maintaining appropriate internal case controls, and monitoring outcomes. Advisory responds to requests for assistance and queries from Counsel and DOJ.

Advisory monitors open litigation (TC 520s) using the non-Insolvency portion of the Litigation Accounts Management System (LAMS) reports. See IRM 25.3.8.4.1, Litigation Account Management System (LAMS) and IRM 25.3.7, Reconciling Non-Insolvency LAMS Reports.

eApproval metadata allows for operational and ad hoc reviews of selected inventory.

Collection Advisory maintains a copy of any suit documentation until the suit is closed. After case closure see Document 12990, Records and Information Management Records Control Schedules, under section Internal Revenue Service Records Control Schedule (RCS) 28, Tax Administration Collection, in:

Preserving electronically stored information is covered in:

Advisory managers verify program and procedural compliance by conducting case reviews, performance reviews, and security reviews. Prescribed internal controls are detailed in IRM 1.4.53, Advisory and Property Appraisal and Liquidation Specialist Group Manager Operational Aid, which communicates responsibility to Civil Enforcement Advice and Support Operations (CEASO) managers for promoting quality case work and required internal controls. The ICS, ENTITY Case Management, Embedded Quality Review, and National Quality Review Systems provide the case access, data and reports used by managers to monitor internal controls.

For procedural guidelines on recommending, working, and responding to suits and claims for damages both for and against the United States, see:

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights, Taxpayer Bill of Rights (TBOR).

LAMS report formats are discussed in IRM 25.3.8.4.1, Litigation Account Management System (LAMS). See:

The Non-Insolvency LAMS Reports contain fourteen (14) data fields. Listing headers for these fields vary slightly depending on the Report Output Format selected, and portions of some SPREADSHEET (Excel) headers may be hidden unless expanded further for full viewing (where headers vary for SPREADSHEET versus PDF or HTML, the SPREADSHEET header is listed first below). These fields are:

Taxpayer entities listed on LAMS reports are based on the current geographic location/ULC (primary location or “PRIMARY-LOC>” on IDRS) of the taxpayer. Accordingly, some taxpayer entities listed on the LAMS reports may not be in the same location as the Advisory group that initiated the TC 520(s) input.

Because taxpayer entities shown on LAMS reports are based on the current geographic location of the taxpayer, the Non-Insolvency LAMS Reports may not be all-inclusive for the TC 520 cases that have been initiated and are being controlled in any given area. Coordination with other Advisory groups is therefore essential for ensuring the timely resolution of TC 520s when an entity appears on the report generated for a particular area, but the case is not being controlled by an advisor in that area. Use Publication 4235 or the SERP (Who/Where Tab) to locate the Advisory Groups.

Access the IRM 5.19.1, Balance Due, at the following link for a complete ULC listing assigned by state: - http://serp.enterprise.irs.gov/databases/job-aids/cs/part-5/balance-due/ulc-and-ao.html. This listing also includes Area Office (AO) assignments within each BOD code.

TC 520 cc 70 is used for suits by or against the United States when the following case controls are appropriate:

Generally, TC 520 cc 70 is used for the following suits:

TC 520 cc 71 is used for Refund Litigation cases when the following case controls are appropriate:

When a refund claim or suit on a Trust Fund Recovery Penalty (TFRP) case is filed, and it does not meet the criteria for input of TC 520 cc 82, (see IRM 25.3.7.7.9, below), TC 520 cc 71 may be used. Since the MFT 55 account at issue will not be suspended to Status 72 with this TC 520 input, it simply creates a -W freeze on the account. If the claim review indicates that the TFRP assessment is not likely to be sustained due to IRS error, strong consideration should be given to using TC 520 cc 73, see IRM 25.3.7.7.4, below. If Collection action continues on a TFRP assessment that cannot be sustained, the taxpayer may be successful in pursuing additional legal action against the IRS later. If a counterclaim for judgment is filed by the Department of Justice in a TFRP refund suit, a TC 520 cc 80 would also be input; see IRM 25.3.7.7.8, below.

Advisory is responsible for reconciling TC 520 cc 71 inputs on MFT 55, TC 240 Penalty Code 618 TFRP accounts only.

TC 520 cc 72 is used for Tax Court cases controlled by Appeals, and has the following attributes:

Accounts on this list are controlled by Appeals; therefore, there is no requirement for Advisory to request or reconcile this listing.

TC 520 cc 73 is used for Refund Litigation when the following case controls are appropriate:

Because this cc suspends the module from active collection to Status 72 on IDRS, but does not suspend the CSED, it is used by W&I Refund Litigation Coordinators. They are responsible for this type of litigation for all MFTs other than MFT 55 and for all non-TFRP MFT 55 accounts. See IRM 25.3.8.3.1, Refund suits. Advisory only has responsibility for MFT 55, TC 240 Penalty Code 618 TFRP accounts in refund litigation. See IRM 25.3.7.7.2 Refund Litigation.

TC 520 cc 74 is used for Tax Court cases controlled by Area Counsel who may request a TC 520 cc 74 be input on modules where they specifically want to restrict Collection notices being issued to a taxpayer. (See IRM 25.3.8.3.2 , Tax Court). The following case controls are appropriate:

Appeals and Counsel have jurisdiction over Tax Court cases. Sometimes the cc 74 is erroneously input. Generally this is the case if there is no Appeals office code posted to IDRS.

TC 520 cc 75 is used for litigation cases when the following case controls are appropriate:

An example of a case where use of TC 520 cc 75 would be appropriate is a Failure to Honor Levy suit, particularly where only a partial satisfaction of a taxpayer’s balance due would be realized. In an action of that type, the liability would remain open for additional collection activity as warranted. Input of TC 520 cc 75 simply creates a -W freeze on the account and alerts other IRS employees of the litigation.

TC 520 cc 76 was created for use in Collection Due Process (CDP) cases under IRC 6320 (filing of Notice of Federal Tax Lien); and TC 520 cc 77 was created for use in CDP cases under IRC 6330 (levies). These cc have the following attributes:

TC 520 cc 76 and 77 inputs are requested by Appeals, and these cases are controlled by Appeals in conjunction with Collection. Therefore, there is no requirement for Advisory to request or reconcile this listing.

TC 520 cc 80 is used in a number of different situations when the following case controls are appropriate:

TC 520 cc 80 is most commonly used in a Suit to Reduce Assessments to Judgment. The CSED is suspended upon the filing of the suit under IRC 6502(a), Collection after assessment. Input of the TC 520 cc 80 occurs when the suit is routed to Counsel by the advisor during eApproval’s prep for Counsel actions. This prevents an early or unexpected expiration of the CSED. If the CSED is imminent, the TC 520 cc 80 may be input even earlier than the eApproval prep for Counsel action, when necessary. See IRM 25.3.6.3.2.2, Cases With Imminent CSEDS.

In a successful Suit to Reduce Assessments to Judgment, a TC 550 (definer code 04) must be input prior to reversal of TC 520. TINs on the cc 80 list should be screened against ICS to identify active Advisory cases. ICS Archive Transcript reviews may also be needed for Advisory cases that were previously closed but for which there may have been a failure to complete IDRS inputs, including required TC 550 CSED extensions and TC 520 reversals.

TC 520 cc 80 is also used to keep an account open in order to post payments that are received after the CSED. Credits posted to a TXMOD after a TC 520 cc 80 has been input but prior to its reversal, will not refund, even if the collection statute is shown to be expired upon subsequent input of the TC 521. In order to ensure that payments will not refund, TC 520 cc 80 is used in the following circumstances:

TC 520 cc 80 is also used in probate cases when the collection statute is suspended due to assets of the probate estate being in the control or custody of the court – see IRC 6503(b).

TC 520 cc 82 is used in cases involving the Trust Fund Recovery Penalty (TFRP) when the following case controls are appropriate:

See IRM 5.7.7.4.2 Withholding Collection — IRC 6672(c), Policy Statement P-5-16 in IRM 1.2.1.6.4(5), Forbearance when refund suit is pending on a divisible assessment, and IRM 25.3.6.3.2.1, Trust Fund Recovery Penalty (TFRP) Litigation, for more information regarding the situations where the IRS is required to withhold collection of a TFRP assessment. See also IRC 6672(c), Extension of period of collection where bond is filed, and IRC 6331(i), No levy during pendency of proceedings for refund of divisible tax, and note exceptions to levy suspense in IRC 6331(i)(3)(A), Exceptions, Certain unpaid taxes.

The transaction date of a TC 520 cc 82 input would be either the date the taxpayer complied with the requirements of IRC 6672(c), or the date of the filing of a civil suit for refund in a district court case. TC 520 cc 82 is used to stay collection until the final resolution of court proceedings and the taxpayer’s claim for a refund.