TE/GE’s authority to resolve issues is derived from its authority to make determinations of access to software applications such as AIMS, IDRS and RCCMS as qualified under Document 6209.

The goal of TE/GE is to provide procedures for the accurate reporting of AIMS processes, reports and maintaining secure inventory control of examinations.

This manual uses the following acronyms

Employee Benefit Plans must file one or more of the following returns, unless excused by statute:

In addition to the above returns, EP may also examine the following returns as Discrepancy Adjustments:

Each Exempt Organization must file one or more of the following returns, unless excused by statute:

In addition to the above returns, EO may also examine the following returns as Discrepancy Adjustments:

Government Entities must file one or more of the following returns, unless excused by statute:

The TEGE AIMS Coordinators are responsible for coordinating AIMS quality control procedures for all functions of TEGE.

TE/GE Compliance Planning & Classification (CP&C) Managers are responsible for the accuracy, completeness, and timely forwarding of AIMS documents for terminal input. Their responsibilities include coordination, as necessary, to ensure accurate and timely terminal input.

In addition, TE/GE CP&C Managers are responsible for:

All problem reports and improvement requests must have the approval of the TE/GE Manager or their designee.

To report all AIMS problems of a non-urgent nature or to request improvements to the system an e-mail is required to be sent to the AIMS Coordinator.

The originating office will receive a response to each change request via email from the HQ Analyst regarding submission.

Forward an information copy of each response from a function other than TE/GE to the TE/GE Director, Business Systems Planning, SE:T:BSP:B.

The statute of limitation date for Form 5500 Series Returns is based on the plan year ending date. The statute date is computed by adding 3 years to the due date or date filed, whichever is later. Since the statute date for the annual return and a Form 1120 or Form 1040 will be different, it will be necessary to coordinate with SB/SE, W&I or LB&I when a statute problem exists. The due date of the Form 5330 return varies depending on the type of excise tax.

The statute of limitation date for the Form 990 Series Returns, Form 4720 and Form 5227 returns is 3 years from the due date of the return or 3 years from the date the return was actually filed, whichever is later. Returns due dates are as follows

The Form 8038 series of returns do not have a Statute of Limitation Date. The returns are due by the 15th day of the 2nd calendar month after the close of the calendar quarter in which the bond was issued.

When a return is needed for reference or information purposes and an ERTVU/BRTVU/RTVUE/TRDBV print is not sufficient, it must be requisitioned using Source Code 45. The Examiner must enter a brief reason for the request on Form 5597, TE/GE IMF/BMF/EPMF Request or Form 5588, TE/GE NMF Request.

Generally, a case should not remain in Source Code 45 for more than thirty days.

NMF involves a collection of revenue accounting and manually prepared and maintained account transactions for returns and account adjustments not reflected on the EPMF/BMF/IMF. NMF accounts are maintained on the Automated Non-Master File System (ANMF) at the Enterprise Computing Center (ECC) in Memphis Tennessee. Prior to NMF automation, Unit Ledger Cards (ULC) were prepared only for returns which indicated a balance due. (ULCs are still maintained for old accounts, since not all of the data contained on the unit ledger cards was transferred to the ANMF system.) Full paid or non-taxable returns did not have a ULC prepared. Instead, a Form TY-32, Index Card is prepared.

Index Cards contain the taxpayers name, TIN, MFT, tax period, plan number (if applicable), type of tax and DLN of the assessment or adjustment document.

Index Cards are not prepared for subsequent transactions. These actions are posted on the ULC.

NMF automation provides the Campus Centers and the Area Offices the capability for nationwide on-line transcript research of NMF accounts. Index Cards are prepared for "Information Only" returns, Audit "no change" and NMF "No-Remit Extensions of Time to File" . These types of "returns" are not input to the automated ANMF system.

When returns are transferred from one location to another, special care must be taken to ensure that the data base is transferred with the return. If an account is transferred from one Primary Business Code (PBC) to another, as soon as the first PBC takes transfer action on its data base the account is charged to the second.

The address at the EPMF/BMF/IMF should be updated at the same time the data base is being transferred. Project codes remain on the data base when a case is transferred. Ensure that local definition project codes are updated when the case is received.

Every church examination begins with a tax inquiry. To establish a tax inquiry account on AIMS, prepare a dummy Form 990, Return of Organization Exempt from Income Tax, using the current month and year to establish a tax period. Annotate, in red, at the top margin of Form 990, the phrase "DUMMY RETURN-OF A CHURCH."

Prepare Form 13133, Expedite Processing Cycle, as follows:

Forward the dummy Form 990, along with the corresponding Form 13133, to the Campus Center for processing. Request research information to determine if the account is present on the BMF. If present, determine if the EO submodule is also present.

Each church tax inquiry account will be established on AIMS with an Activity Code of 345, Church Tax Inquiries.

To close a church tax inquiry account off of AIMS, follow the procedures outlined in IRM 4.75, Exempt Organizations Examination Procedures. When preparing Form 5599, enter the applicable principal issue code for Approved Church Examination in Item 701. Refer to IRM 4.5.2.3 for instructions on preparing Form 5599.

If, at the conclusion of a church tax inquiry, it is determined that a complete examination must be conducted, the church tax inquiry account must be updated. Using Form 5598, TE/GE Correction Request, update the Activity Code to 349, Approved Church Examination. The account need not be closed until the examination is completed. At the end of the examination, follow the procedures outlined in IRM 4.75, Exempt Organizations Examination Procedures, for closing a church examination. Refer to IRM 4.5.1, IRM Exhibit 4.5.1-14 and IRM Exhibit 4.5.1-15 for instructions on preparing Form 5598.

When it is determined that a future examination should be made on an organization currently under examination, establish the future year account on AIMS using Form 5597, TE/GE IMF/BMF/EPMF Request, with the appropriate Push Code. For a listing of valid Push Codes for your functions, refer to:

For instructions on preparing Form 5597, refer to IRM 4.5.1 Exhibit 4.5.1-8.

In addition to establishing the account on AIMS, prepare a Form 5666, TE/GE Referral Information Report, for the administrative file. Refer to IRM 4.5.1 and IRM Exhibit 4.5.1-12 for instructions on preparing Form 5666.

When conducting a private school examination, record the appropriate project code on AIMS. The project code may be input at the time the account is being requested or after the account has been fully established on one of the following forms:

If, during the course of a private school examination, it is necessary to refer certain returns not under EO jurisdiction to SB/SE, W&I or LB&I, update the project code to reflect the referral rather than the private school. This must be done at closing on Form 5599, TE/GE Examined Closing Record, and will result in the private school code being replaced by the referral code for information regarding referrals to SB/SE, W&I or LB&I.

If a private school examination is considered part of a Special Emphasis Program (SEP), the project code must identify that program. A SEP code always takes precedence over private school and referral codes. It must be recorded on AIMS at the time the account is established, using the appropriate form. If the appropriate project code has not been input on AIMS before closing, it must be included on the closing document, Form 5599.

A transfer of an IRC 4947 Trust by W&I, SB/SE or LB&I will be indicated on Form 3198-A which will be attached to the case file.

The case file will be transferred via Form 5351, Examination Non-examined Closings, to the Area Office/Primary Business Code and will have a notation that the case is an IRC 4947 Trust. The case file should also contain a blank Form 5351 for use by TE/GE.

When the case file is received in the TE/GE Area office, AIMS documents must be prepared either to close the case or to change the activity and employee group codes on AIMS. This is necessary to remove the account and employee group code from W&I, SB/SE, or LB&I’s inventory.

When it is necessary to refer returns not under TE/GE jurisdiction to W&I, SB/SE, LB&I the Examiner must prepare Form 5666, TE/GE Referral Information Report. Refer to IRM 4.5.1.6.9.2 and IRM Exhibit 4.5.1-12 for instructions on completing this form. Use Form 5599, TE/GE Examined Closing Record to update the project code during the closing action.

If the account under examination is considered part of a Special Emphasis Program, the project code must identify that program. A SEP code always takes precedence over a referral code and must be recorded on AIMS at the time the account is established using the appropriate form. Form 5666 must still be prepared.

On examination cases, in which the original return is missing, every attempt must be made to locate the return. If the return was never received, a follow-up request to the Campus Center should be performed if the examination cannot be conducted using an ERTVU/BRTVU/RTVUE/TRDBV print. If the return was received and subsequently lost, special searches must be performed.

If it is determined that the return is not required and an examination is not to take place, the account can be approved for closing by the Director, EP, EO or GE (TEB, FSL or ITG) Examinations or their designee. DC 33, Error Accounts With No Returns, should be used and all supporting documentation must be forwarded to the Closing Function for closure. See IRM 4.5.1 and IRM 4.75.16.3.1 for additional information for DC 33 Form 10904 for EO.

If it is determined that an examination is warranted or was already in progress, and if all attempts to locate the return are unsuccessful, and an ERTVU/BRTVU/RTVUE print is not sufficient, contact with the employer or organization should be made to secure the necessary information in order to complete the examination. This could be a copy of the return, claim, RAR, etc.

If the original return was received and subsequently lost, the following procedures apply:

If the examination is conducted using an ERTVU/BRTVU/RTVUE print, follow the original return procedures.

Examinations may be closed based on the employer’s/organization’s retained copy of a return or an ERTVU/BRTVU/RTVUE print.

To avoid unnecessary delay in closing a case, prepare requisitions and forward for terminal input as soon as time is charged to that return or it is known that an examination will be made, whichever is earlier.

A copy of a return cannot be surveyed, therefore, the case should not be established unless the return will be examined. If a copy is established on AIMS in error, use DC 33, Error Accounts With no Return, to remove the record from AIMS.

For 30 day letters, if the taxpayer submits a written protest and/or requests Appeals consideration, the case file and written protest will be transferred to the Appeals Office serving the district office. If only one protest is received, the entire case file, including the duplicate original preliminary notice for which no response was received, will be transmitted to Appeals. All electronic cases will be closed to Appeals using PBC 621, SBC 00000, and EGC 021 in RCCMS

Mandatory Review no longer reviews cases with valid protest to Appeals Division. The field group should submit Appeals cases to the Closing Unit who will forward the case directly to Appeals in RCCMS.

Form 5596 , TE/GE Non-Examined Closings, Examination Return, can be used for closing all non-examined returns except Surveyed Claims (DC 34).

Surveyed claims are closed on Form 5599, TE/GE Examined Closing Record.

If Form 5546 is used:

If Form 5596 is used:

Use of DC 29 is invalid if the current AIMS status code is above 06. If there is an amount claimed on the data base, only DCs 33 or 99 are valid.

For EO/GE Cases - Records cannot be surveyed if an advanced payment, TC 640, is on the module. The TC 640 must be resolved before a record can be surveyed.

Management approval is needed to use a non-examined disposal code. The Manager’s signature and date is entered on Form 5596 or Form 5546.

Special rules apply for DC 29 and 33.

Claims that are surveyed require the use of Form 5650 or Form 5599. Returns that are incorrectly assigned Source Code 30, Claim for Refund, may be surveyed without scheduling an overassessment by using CC AMAXUO or CC AMAXUP to correct the source code and to remove the amount claimed from the data base.

Transfers Out of Area, DC 30.

Accounts closed with a non-examined disposal code remain on AIMS only until the end of the month that they are closed at the terminal. To allow time for reversal of the examination indicator on EPMF/BMF/IMF, a non-examined EPMF/BMF/IMF account cannot be re-established for one month following closing at the terminal.

Disposition of Form 5596 - Unless local instructions provide otherwise, Form 5596 is retained by the closing function for thirty days after terminal input and then disposed of according to the Records Control Schedule 203.

Non-examined closings containing partnership linkages will be closed only by contacting a TEFRA Coordinator when a PCS Freeze is found.

If an original return is received with a duplicate or amended return which has no tax or refund due, and the case is to be surveyed, the TC 976/977 freeze code must be released on the AIMS section of the TIF. The reject message will consist of a TC 976/977 in the module.

In order to release the freeze, a statement must be noted in the file by the Examiner that the amended/duplicate return was considered.

Tax Examiners must process prior year returns as follows:

During an examination, a husband and wife who originally filed their returns on a separate basis, find that it would be to their advantage to use Joint Tax Computations. To have this advantage of filing a joint return the taxpayers are not required to actually file a joint return. Instead, execution of a joint agreement will be sufficient to make this election. To make this election the tax must be paid in full.

The following documents and returns should be present when both husband and wife filed a return.

Special entries on Form 5599 for the husband’s account are:

Special entries required on the wife’s account Form 5599 are:

The following documents should be present when only one spouse filed a return:

The Closing Function Tax Examiners need to prepare a Form 2363 to change the filing status from "3" (married filing separate returns and the spouse is not required to file a return, spouse exemption is claimed) to "2" (married filing joint return) and add the name of the spouse who has not filed.

When a delinquency penalty must be applied against a non-filing spouse, the penalty must be computed manually. Any delinquency penalty imposed on the spouse, who has previously filed, should not be duplicated in the computation. Form 3198-A should show the amount of the penalty. The manually computed delinquency penalty should be entered in Item 12, using TC 160 on Form 5599.

When cash payments such as estimated payments, remittances with return, etc., are shown on the account that is being reduced to zero:

When it is determined during an examination that the taxpayers are not entitled to file a joint return, the case must be flagged with Form 3198-A noted "Joint to Separate." Prepare Form 2363 to remove one taxpayer’s name from the account (it should be lined through on Form 5599). Usually, the account will be under the husband’s SSN and the wife’s name will be removed. If the spouse, whose name is removed from the account, is required to file a return, it must be included in the case file. If the return is in the case file, just forward the return for original processing

If one spouse files a petition with the United States Tax Court or otherwise avails himself/herself of appeal rights on a proposed joint return deficiency, and the other spouse agrees to a deficiency or does not take appeal action, the agent must submit a request on Form 3198-A for a NMF assessment (do not input through terminal) for the non-petitioning spouse. The NMF account will be maintained in the name of the non-petitioning spouse concurrently with the account on the MF. Do not move the NMF account to the MF.

For those cases suspended in the 90 day files, where the statute will expire within 120 days, and it appears that only one spouse has petitioned the Tax Court, the Review Staff must contact Appeals and ask them to review the petition since it appears from the docket list that only one taxpayer has petitioned.

Review Staff must prepare Form 3210, Document Transmittal, to transmit the petitioned case and include the following information on a Routing Slip attached to the case file:

Prepare Form 3210, to transmit the "dummy" case file after the non-petitioning spouse case has been assessed and include the following information on a Routing Slip attached to the file:

For those cases, suspended in the 90 day suspense files, where more than 120 days remain on the statute and it appears that one spouse has not petitioned, transmit the case to Appeals using Form 3210, noted "Possible Non-Petitioning Spouse Case."

Both spouses file a joint return and one spouse files a separate return for the same year.

In the above situation, a Form 2363 is not required, since the MF shows joint names and joint filing status already.

Zero out the incorrect joint account by preparing Form 5599 with the appropriate Transaction Codes(TC) and amount in Item 12 to reduce to zero all tax and penalties assessed.

Prepare and process a substitute return (TC 150 -0-) to set up the wife’s separate account. The received date for the substitute return should be the same as that of the joint return.

Public Law 91-679 provides that in certain cases a spouse will be relieved of liability arising from a joint income tax return. The three types of situations that can occur:

An appropriate notation on Form 3198-A should identify Innocent Spouse cases received from the field.

To quickly release 6405(a) refunds to the taxpayers, the expedite refund request procedures were instituted. Under the expedite refund request procedures, the Service may issue the refund if the Committee does not express an objection within 30 days from the time the report is submitted to them. However, the expedited refund procedures should not be applied in cases where the expiration of the statute of limitations is imminent, or where the Service may have difficulty in recouping the refund.

IRC 6405(b) provides a similar rule for Joint Committee review of a refund or credit made under IRC 6411, which relates to carry back adjustments. In such a case, if the net tentative refund or credit is more than $2,000,000 it will not be reported to the Joint Committee before making the refund or credit, but will be reported when the correct amount of tax is determined. If such determination results in a deficiency, but with a net refund or credit previously allowed under IRC 6411 (i.e., partial recoupment of the tentative allowance), the procedure as to Joint Committee review will be the same as with a refund or credit more than $2,000,000 not involving IRC 6411.

If more than one taxable year is involved, only the overpayment, for each taxable year is considered. Any taxable year, for which there is no net overpayment, is not considered.

After the case clears the Joint Committee on Taxation, the following documents should be in the case file:

Upon receiving the above documents, the Tax Examiner must compare the taxpayer’s name on the yellow copy of the report to the Joint Committee with that listed on the letter from the Joint Committee. The name on the Joint Committee letter should be compared exactly with that on the yellow copy. In the case of a variance in the names, return the cases to the Technical Staff for further guidance.

All Joint Committee cases require that a manual refund be issued if the monies have not already been refunded.

Upon receiving acknowledgment of receipt by the Joint Committee of an "Expedite Refund Request" report, the examining area office QMS should promptly forward a "dummy" work file to the closing function to start refund processing. The work file must be transmitted with Form 3198-A, specifying the scheduled date for the refund. The scheduled refund date should be 31 days from the day the Committee received the "Expedite Refund Request" report. The closing function must coordinate with the Campus Center to schedule the refund to go out on the specified date. If the area office QMS is notified that the Joint Committee objects to the release of the refund, QMS must immediately contact the closing function to stop the processing of the refund.

Campus Center personnel must scrutinize all requests for refunds (Form 843, Form 1045, and Form 1139). Campus Center personnel are responsible for processing tentative refunds and forwarding all other TE/GE types of claims to the Area Office. All Form 1040-X and Form 1120-X, indicating the original return is under TE/GE jurisdiction, must be forwarded to the Directors of the Business Units (i.e., EP, EO, FSL, ITG or TEB).

In TE/GE, claims are generally filed for:

Taxable Increase Adjustment - An amended individual or corporation return which shows an increase (additional) tax over that reported on the original return.

Superseding Return - Any return filed prior to the due date changing the data reported on the original return.

When a Campus Center Adjustment Branch receives a timely filed TE/GE claim, they must secure the original return (Index Card and the ANMF transcript for NMF returns) and determine whether the organization or plan is under examination. If it is under examination (TC 420 in the module), they must forward the entire case to the Director of the Business Unit (EP, EO, FSL or ITG). Forward TEB claims to the Compliance and Program Manager.

If the organization/plan is NOT under examination, the entire case must be forwarded to the Campus Center Examination Branch for AIMS opening input. Campus Center personnel should not generate overassessment transactions on TE/GE returns, unless directed or requested by local TE/GE offices except for math or Campus Center errors.

Upon receipt, Campus Center Examination Branch must prepare and input the following Forms:

Claims should have a Source Code of 30 on Form 5546, Examination Return Charge-Out. After the account is established on AIMS and the charge-out is received, the entire case file must be forwarded to the specific Primary Business Code.

An amended return is a second return filed, after the due date, which changes information submitted on the original return. The taxpayer will send their amended return to the Campus Center where the original return was filed. The amended return should then be posted to the taxpayers account on MF with a TC 976/977. If TC 420 is present, then a TC 470 will post to MF.

In some instances, amended returns may require consideration by TE/GE to change tax liability on the IMF or BMF.

If an amended return is filed with the Examiner and an examination is not warranted, process the amended return directly to the Campus Center for input to the BMF/IMF/EPMF following the applicable delinquent return procedures in Section 4.75.22 for EO Deliquent, Amended and Substitute for Return Procedures. Do not establish on AIMS.

Claims for refund, including amended returns and informal claims, other than TEB claims, may be surveyed after assignment if it is determined that the claim issue is clearly allowable in full and the return does not warrant examination.

The Examiner must complete Form 1900, Income Tax Survey , for cases involving carry backs, if the information upon which the survey is based is not disclosed on the returns affected. The Examiner must also explain the reason for survey on Form 1900. The Group Manager must sign these forms.

If the correct claim amount is not shown on Form 5546 or AMDISA, Examiners must prepare a Form 5598, TE/GE Correction Request to update AIMS with the correct amount.

Form 1139, Corporation Application for Tentative Refund, is not treated as a claim when the amount requested has been refunded, although a claim form with the same issue and tax period was filed at the same time.

Surveyed claims require a DC of 34 in Item 13 of Form 5599. Other required entries on Form 5599 include P7-18, P21-22, P24-29, P31-34, C, P36, P38-40, P52-54 and Items 12 and 36. Additional optional entries include Items 02, 6a, 6b, 6c, 07, 09-11, 15, 39, 40, 43 and 50-53.

In cases involving the disallowance of a claim for refund, whole or in part, a notification letter must be issued to the taxpayer. The area office issues certified notices of disallowance. The Examiner prepares the following forms to inform the taxpayer of a full or partial disallowance of their claim.

If a certified notice of claim disallowance is issued, Form 3198-A, should notify the closing function or designee, with the appropriate blocks checked. The following letters are forwarded to the taxpayer by the closing function or designee to inform the taxpayer of the full or partial disallowance of their claim:

The reason for the disallowance must be at the bottom of the letter.

Specific provisions extending the time for filing claims are listed in the following cases:

Special rules are also provided for certain manufacturing sugar payments, for overpayments attributable to items of Federally registered partnerships for windfall profit tax, and trade rubber.

Windfall Profit Tax (WPT) - The statute is based on when the WPT was paid rather than the personal income tax payment date. Amounts of WPT withheld are treated as having been paid by the producer on the due date or extended due date of the income tax return. (The credit for overpayment of WPT has been repealed effective for tax periods beginning after August 1988.) All claims or requests for adjustments to WPT are forwarded to the Austin Campus Center (AUSC).

Self-Employment Tax - If an agreement by a state or subdivision, under Section 218 of the Social Security Act, covering its employees, results in a retroactive reduction of their self-employment taxes, an otherwise barred claim for refund will be timely if made by the last day of the second year after the calendar year of the agreement [IRC 6511(d)(5) ].

If it is found that a corporation does not qualify as a small business and the business is terminated, Form 1120-S Return must be converted to a regular Form 1120. The Examiner must identify the case by attaching a Form 3198-A to the file and should prepare Form 5598, to change the Form 1120-S Activity Code to the appropriate code for Form 1120, as indicated on Form 3198-A.

Form 5599 for the Form 1120-S Return should also be used for Form 1120. Tax Examiners must complete coding and editing in the normal manner.

For unagreed cases closed to the Appeals Office, the appropriate DC (07 or 11) must be entered on Form 5599.

For agreed cases, two additional steps are required:

This kind of case must be identified with Form 3198-A. The case file may include the original or a copy of Form 1120.

The procedures for conversion are as follows:

Examiners must identify conversion cases on Form 3198-A attached to the file.

Agreed case files should contain a Form 1120 or a photocopy marked "Form 990 converted to Form 1120" . This kind of case must be identified with a Form 3198-A attached to the case file.

In order for the Form 1120 to post to MF, the MF should reflect compatible filing requirements and status.

Submit Form 5599 with Form 990 to close off the AIMS data base as a revocation, using DC 09.

For unagreed cases, place the converted Form 1120 substitute for return in the case folder.

In the event that an examination results in the revocation of the exempt status of the trust, follow the procedures below in disposing of Form 1041, U.S. Income Tax Return for Estates and Trusts. Form 5500 Series Returns will be closed upon final disposition of the examination.

When converting a Form 1041, the Campus Center will follow these procedures:

At the time of closing, the Examiner will print in the top margin of Form 1120 and on Form 3198-A, Special Handling Notice, "Form 1041 Converted to Form 1120 by TE/GE" . The Examiner will also add the activity code of the new Form 1120 to the Form 3198-A.

The "received date" on the new return is the date of the timely filed return, if the return being converted is timely filed. Otherwise, it is the date that the return being converted was filed. The amount of tax resulting directly from the conversion is shown in the tax computation of Form 1120 or Form 1041.

Form 1331 and Form 1331-BNotice of Adjustment, is used to process NMF overassessments resulting in abatement, credit and or refunds.

The heading information should be completed as follows for Forms 1331 and Form 1331-B:

Section I - Computation of Decrease in Liability. Complete only the applicable fields.

Section I - Computation of Decrease in Liability

Section II - Disposition of Decrease in Liability and Interest allowed on Overpayment - Complete as follows for Form 1331 and Form 1331-B:

When evidence that a required return has not been filed, the Examiner will request a transcript of the account to document what action has been taken. The request can be submitted as follows:

Based on the above, a transcript of the account must accompany each delinquent or substitute for return. This transcript will be attached to the return when submitted to the Campus. The transcript will be used by the Agent to perform processing verification responsibilities and will be kept in a suspense file.

If a return has not been filed (TC 150), use Form 4844, Request for Terminal Action, to input the following codes into IDRS to close any Collection controls and halt any notice that may be issued requesting the return.

The current or appropriate year’s tax form should be used. Substitute for returns should contain entity information only. Do not attach additional schedules.

The Examiner will mail all delinquent return packages not under examination and delinquent/substitute return packages with payments to the appropriate Campus Center.

The Examiner will mail delinquent return packages under examination, without payments, to the appropriate campus.

Delinquent/Substitute Returns must be established on AIMS as soon as it is known that an examination will be made or when examination time is first applied. The appropriate Push Code must be used when establishing the case on AIMS in order to hold the TC 424 at the EPMF, BMF or IMF until the TC 150 posts. It is extremely important that the delinquent or substitute be submitted for processing since a CP 87 or CP 187 will be generated after the TC 424 posts, if a TC 150 has not posted. Establishing the returns on the EPMF, BMF or IMF, immediately establishes inventory controls and avoids unnecessary delays in closing.

The Agent must perform a review and perfection of the delinquent return package under examination upon receipt prior to being sent to the Campus Center for processing.

The following steps should be taken:

The Agent must review and perfect the NMF delinquent return package under examination without payment, upon receipt prior to sending the package to the Campus Center for processing.

The following returns are processed in accordance with NMF procedures.

The Agent must take the following steps:

The tax return, with Form 13133, Form 3198-A, and research data must be forwarded to the Campus. If the Delinquent Return package requires quick assessment processing, do not send the package to the Campus. Process the return in accordance with procedures contained in IRM 4.4.9. Quick Assessment Procedures would apply in the following situations:

The Agent will maintain the case file comprised of a copy of the entire package submitted to the campus for posting of the TC 150.

The Agent will monitor the case file until the TC 150 posts to NMF.

Examiners are responsible for insuring that any delinquent returns received with remittance are forwarded to the appropriate Campus Center by Certified Mail within one workday of receipt.

EP Form 5650 or TE/GE Form 5599 cannot be processed until TC 150 has posted to the MF and the MF control is fully established on AIMS.

Closing procedures are as follows:

For each type of return included in the case file, enter a "T" on the latest year closing record. Enter a "R" on all of the prior years closing records having the same MFT code as the closing record just marked with a "T" .

The Substitute for Return (SFR) is used when the employer or organization, upon receiving the due notice from the Service, refuses to file a required return. In such cases, the return must be prepared containing the following entries:

For EP Form 5500 - Establishment requests are submitted to the Classification area using the local EP request documents. If the return is not on AIMS, prepare Form 5597, TE/GE IMF/BMF/EPMF Request. Use a "1" or "3" for return not requested. Enter either Push Code 020 or Push Code 036 for substitute for return. In Item 22, Reason for Request, write "TE/GE-SFR."

For EO/GE and Form 5330 - If the return is not on AIMS, prepare Form 5597, TE/GE IMF/BMF/EPMF Request. Enter a "1" or "3" for return not requested. Enter Push Code 036 for substitute for return. In Item C, Reason for Request, write "TE/GE-SFR."

Include with the return package, a copy of a recent transcript (not more than sixty days old) which was used in the determination of the employer’s or organization’s failure to file.

The Substitute For Return, Form 13496, transcript and Form 13133 is kept by the Agent and disclosed out with the EP, EO, GE administrative file when the examination is completed. The filing of the return will establish filing requirements for the employer/organization.

If the return is examined, establish the return on AIMS using Form 5597. A copy of the original return will be kept by the Examiner and marked in red"COPY OF SUBSTITUTE FOR RETURN PREPARED BY TE/GE DIVISION."

Occasionally it may be necessary to process a case, where an examination has been made, but a return has not been filed or there is no requirement that a return be filed. Process these as described below.

If Collection refers a TDI case to EO or EO is working a case and it is identified as a TDI case, a TC 595 CC 88 must be entered to close the Collection TDI. Collection or EO must input the TC 595 depending upon local agreements.

The posting of a TC 150 for a Delinquent Return/Substitute for Return will not close the TDI. When the examination of any case identified as a TDI case is completed, a TC 599 CC 88 (Unagreed) or CC 89 (Agreed) must be input by EO.

If EO determines that the organization did not have a filing requirement, a TC 590 CC 75 must be entered. If a determination was made that the organization is no longer liable, input a TC 591 CC 75, which will satisfy this module and all subsequent modules for the same MFT.

Cases involving delinquent returns that are closed on a copy can also be referred to Appeals on a copy, unless a delinquency penalty is an issue.

Cases referred to Appeals, where a delinquency penalty is not an issue, should be processed as follows:

Cases referred to an Appeals Office, where a delinquency penalty is an issue, must be processed as follows:

Cases involving substitutes for returns referred to Appeals, must be processed according to IRM 4.5.3.16.9 (2) above.

All EO or GE Closing Agreements are approved by the Director of the Business Unit and reviewed by the EO or GE Closing Agreement Coordinator. After the Director or delegate has executed the agreement, the Coordinator will mail the Closing Agreement to the taxpayer. The Examiner will prepare a Closing Agreement package and forward with the case file to the Closing Function. The Closing Agreement package will contain:

The case file will consist of:

Once the package is received:

When an EO or GE Closing Agreement has been entered into for a taxable return, Form 5599 should contain:

When an executed EO or GE Closing Agreement involves the assessment of a non-tax amount for a Form 990, Form 990-PF, Form 941 or Form 8038 Series, Form 5599 will be used to assess the liability.

Form 5599 must contain:

The closing unit will use Form 2859, Request for Prompt or Quick Assessment to make a manual assessment when the statute is imminent or to input Transaction Code (TC) 150 -0- to allow the closing assessment when there are problems with posting a return. If a manual assessment, enter the amount of the Closing Agreement liability in Item 35.

All other entries on Form 5599 must be reviewed for accuracy before submitting the closing package to the Tax Examiner.

Any Closing Agreement entered into for Form 990-BL or Form 4720 under IRC 4912(b), IRC 4941(a), IRC 4944(a)(2), IRC 4945(a)(2),IRC 4955(a)(2) or IRC 4958(a) must be processed by quick assessment procedures outlined in IRM 4.4.25, AIMS Procedures and Processing Instructions.

These returns are considered NMF returns and must be processed manually using Form 2859. An "N" should follow the EIN/SSN on Form 2859 and on Form 5599.

The closing unit will prepare and use Form 8485, Assessment Adjustment Case Record, to assess the Closing Agreement liability for a return not on AIMS.

Form 8485 Preparation Instructions:

The Agent will prepare and use Form 3870, Request for Adjustment to assess the Closing Agreement liability for a return not on AIMS.

Form 3870 preparation instructions:

Form 2859, Request for Quick or Prompt Assessment should be prepared and accompanied by the following documents when applicable:

In addition, Form 2859 must be prepared for situations described below or when the statute expiration date is more than 30 days but also less the 60 days. Situations requiring quick assessment action are as follows:

The tax examiner must always obtain current IDRS data when a quick assessment is warranted. Tax examiners should use this data to ensure the taxpayer’s most current address is used.

Restricted interest must carry a TC 340. A TC 340 is used only when the system cannot compute the correct interest.

Normal interest should carry a TC 190. If TC 190 is used and the taxpayer signed an agreement, the tax examiner must enter the agreement date on Form 2859.

Interest is not computed for civil penalty quick assessments on Form 8278. Interest on these penalties are assessed from the date of notice known as the 23C date.

Tax assessed under the following IRC’s 4911(a), 4912(a), 4942(a), 4943(a), 4944(a)(1), 4945(a)(1), and penalties on Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the Internal Revenue Code, are processed as a MF assessment.

Tax assessed under the following IRC’s 4912(b), 4941(a), 4944(a)(2), 4945(a)(2), 4955(a)(2) and penalties on Form 4720 for foundation managers and disqualified persons must be processed as a NMF assessment.

The Director must approve a jeopardy assessment and the tax examiner must make the assessment within 24 hours. After the Director has signed Form 2644, Recommendation for Jeopardy / Termination Assessment, prepared in triplicate, the tax examiner must compute interest and check the appropriate box on Form 2859. The tax examiner must telephone the information on the form necessary to record the assessment properly to the appropriate campus. The following information must be furnished by telephone:

The campus should telephone the person requesting the jeopardy assessment to acknowledge that they have made the assessment. The campus should mail a confirmation copy of Form 3552, Prompt Assessment Billing, Form TY-26, Statement of Tax Due IRS or Form 17-A, Statement of Tax Due, to the district after processing. The tax examiner must associate the confirmation copy with the control copy.

The tax examiner must transmit the original and one copy of Form 2644 promptly, in a sealed envelope to the campus, to the attention of the person contacted for verification that the correct assessment has been made and for association with assessment document.

The second adjustment document should be processed once the DLN verification is received from the campus.

Prompt, jeopardy or quick assessments may sometimes involve a deficiency for one tax period and an overassessment for another tax period. These situations will be processed as follows:

The tax examiner should follow MF quick assessment procedures, unless the following applies:

When two taxpayers are liable for the "same" tax and both are assessed, (typically a non-petitioning spouse case), the tax examiner must notate the comment "Spousal Assessment" and the cross reference TIN, MFT and tax period on Form 2859. This is necessary because the campus must adjust the accounts each time a payment is received.

Offsetting is a method used to transfer an available credit form one tax period to an outstanding liability in another tax period or to another type of tax. This procedure may be done manually or computer generated.

All liabilities on the overassessment year must be satisfied before any overpayment can be applied to liabilities on other tax periods; therefore, all unpaid penalties and interest must be subtracted from the net overassessment to determine the amount available for offset.

The overpayment is the excess of payment(s) over the tax liability, including penalty and interest, for a specific type of tax.

Examiners should identify an offset case on Form 3198-A and the examination report should reflect an overassessment for one tax period and a deficiency for another tax period.

An examination of a taxpayer can cover several tax periods and have adjustments on one or more periods requiring interest computations. Interest must be computed for each period to determine how much of the overassessment is available to offset between the different tax periods.

When applying overpayments as credits, the tax liability, including penalties, additions to the tax and interest, is considered satisfied out of the earliest payment on the module. The overpayment begins with the first amount paid in excess of the liability. This part of the overpayment is applied to the oldest outstanding liability for the earliest year. This is important in arriving at the correct interest liability.

Examination of related taxpayers by EO sometimes results in adjustments increasing tax for one and decreasing tax for the other. This usually occurs between parent and subsidiary corporations or between trusts and beneficiaries. Often the taxpayer will agree that the refund on a correlative taxpayer should be applied to the additional tax of the primary taxpayer. This agreement is documented as a consent signed by the correlative taxpayer and made part of the case file. It is in the interest of the IRS to honor this offset.

The Examiner must attach Form 3198-A to the correlative case file. The "other" box at the bottom of Form 3198-A must be checked, and they must show the primary taxpayer’s name, EIN or SSN and tax period of any additional tax. The case file of the primary taxpayer, including Form 5599 reporting additional tax, should be associated with the correlative taxpayer’s file.

The tax examiner must secure a transcript of the module to be adjusted for the correlative taxpayer before processing Form 5599.

Process Form 5599. If the offset is to be made as described above, follow these instructions besides routine processing:

A credit should be transferred between accounts, only if there is a statement from the taxpayer requesting such application

The tax examiner should manually compute and enter any interest allowable with TC 770 on Form 5599. For transfers between IMF and BMF accounts, use Form 2424. If the accounts are for different taxpayers, the tax examiner may enter TC 850 and TC 730 on the same Form 2424 carrying the overpayment.

Prepare Form 1331 or Form 1331-B, entering the overpayment in the credit column and entering the taxpayers EIN or SSN as the account number. Refer to IRM 4.5.3.15.6 for instructions on completing Form 1331 and Form 1331-B.

Prepare Form 2424, to transfer the credit from NMF to MF. Hold the MF Form 5599 for two cycles. Also, you may enter a posting delay cycle in item 43 on Form 5599.

Forward Form 2424 to the NMF unit of the appropriate campus for processing.

Refer to IRM 21.4.5 for instructions to follow.

For all increases or decreases in Federal Unemployment Tax Adjustments (FUTA) tax or wages, unique reference codes must be entered with the tax adjustment. The reference codes reflect which state the tax/wages are being adjusted for. The three-digit reference code for the tax portion of the adjustment is comprised of a "T" followed by the two character state code, e.g., California is CA; New Jersey is NJ. The total of the tax (T) reference code amount must equal the TC 300/301 tax adjustment.

Code Section 3301 requires all employers to pay an excise tax (Federal Unemployment Tax) on wages paid to an employee. Under Code Section 3302, the amount of contributions made to an employer’s state unemployment fund can be used as a credit against the excise tax paid under IRC 3301.

Title XXI of the Social Security Act; allow loans (advances) to states that are in need of funds in order to pay unemployment benefits. If the state does not repay the loan within a specific time, employers (in states who have received loans) will have their credit (allowed per IRC 3302) against the FUTA tax reduced. If the tax adjustment is the result of a change in the total taxable wages, the amount shown on the Form 940 return that was claimed as a credit against the FUTA tax must be adjusted. This adjustment is referred to as "credit reduction."

All states are not subject to credit reduction adjustments. Depending on the tax year and whether loans were outstanding, determines whether a credit reduction adjustment is warranted. The amount collected, because of the reduced credit, is applied against the outstanding balances of the states that have unpaid loans.

In order to accurately process Form 940 cases, the Examiner is responsible for providing the total tax adjustment, wage adjustment (along with the applicable state code), and total corrected Form 940 wages. If the wages adjusted for a credit reduction state, the Examiner must provide the credit reduction amount and credit reduction wages. The credit reduction table will always be referenced to determine whether adjustments are being made to a credit reduction state (based on state codes provided by the examining officer).

If the case is being processed as a quick assessment, the campus must always be provided with the amount of the total corrected Form 940 wages. If a credit reduction state is involved, the campus must also be provided the credit reduction wages, the state thecredit reduction wages applies to and the total credit reduction amount. This information will be entered in items 22-24b of Form 2859. When completing Form 2859, enter in item 23, the total credit reduction amount. In item 24a, enter the two digit state code and the amount of the credit reduction wages for each state. The total of the credit reduction wages entered in 24a must also be provided to the campus.

If, during the course of an examination, it is determined that an employer / employee relationship exists, IRS is authorized to assess tax, penalty, and interest against the employer for the amount of income taxes that should have been withheld from employees. However, Sections 3402(d) and 3406 of the IRC relieves the employer of their taxes, if the employee has filed income tax returns and paid the tax due. Employers are required to use Form 4670, Request for Relief from Payment of Income Tax Withholding and Backup Withholding (BUWH), along with one or more Form 4669, Statement of Payments Received to obtain this relief. If the employer has paid the tax assessed, Form 843, Claim for Refund and Request for Abatement is required.

Tax assessed under IRC 3509 is not subject to abatement. IRC 3509 provides the authority for determining an employer’s liability for employee FICA tax and income tax withholding, generally for any employee who is not treated as an employee by the employer. IRC 3509 assessments are recognized on IDRS by item reference number 079 and a reference amount of zero.

The employer must secure signed Forms 4669 from the employees covered by the examination. The employer then prepares and signs Form 4670 indicating the tax year and the number of statements, Form 4669 secured. These signed forms are considered "prima facie" evidence of filing and further research is unnecessary.

Form 4668, Employment Tax Examination Changes Report, is the basic report form used for all Forms 941, 942, 943 and 945 examinations. It is used to show the additional tax, overassessment or delinquent tax proposed by the Examiner and should be attached to the last quarter return examined as part of the Revenue Agents Report (RAR).

Process Forms 4670, 4669 and 4668 as follows:

If less than the correct amount of tax imposed by sections 3101, 3111, 3201, 3221 or 3402 is paid with respect to any payment of wages or compensation, proper adjustments with respect to both the tax and the amount to be deducted shall be made without interest.

IRC 6205 provides an employer who makes or has made an under collection or under payment of employee’s taxes (FICA/RRTA) or income tax withholding, may make interest free payments of the tax due when certain conditions are met.

The signing of Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment, at the close of an examination or the Appeals conference fulfills the return requirements for the interest free adjustment provisions. In addition, full payment of the tax must be paid at the time of signing Form 2504 to be an interest free adjustment. Unagreed cases with no payments are not subject to an interest free adjustment. Unagreed cases with full payment are subject to interest free adjustments. IRC 4.23.8.3.1 (3) states that if the taxpayer elects to pay the full adjustment amount (tax and penalty) at any time prior to the closing of the examination but does not agree and does not sign Form 2504, the case will be processed as an unagreed case without an interest free adjustment. If, after the case is closed unagreed, the taxpayer signs Form 2504 or files Form 941-X prior to the due date of the return for the period in which the payment was made, the taxpayer will be entitled to an interest-free adjustment. If one of the exceptions listed in IRM 4.23.8.3(9) is not applicable, the signing of one of the Forms 2504 at the close of an examination or Appeals conference (and prior to the issuance of a notice and demand for payment) fulfills the requirements for correcting a return for purposes of the interest-free adjustment provisions of IRC 6205 and the regulations.

All employment tax cases which involve a restriction on the payment of interest, Form 3198-A, TE/GE Special Handling Notice must be attached to the outside of the case file. The section of the Code or Regulations which authorizes the restriction of interest must be notated.

IRC 6205does not apply to FUTA taxes Form 940 or penalties associated with the underpayment.

If a taxpayer qualifies for an interest free adjustment - item 11 interest computation date on Form 5599 must be completed and the transaction code must be a TC 308. Refer to IRM 4.23.8.3.1 (2) for the interest computation date.

This type of agreement is the Classification Settlement Program or "CSP" establishes procedures under an optional classification settlement program that will allow businesses and tax examiners to resolve worker classification cases as early in the administrative process as possible, thereby reducing taxpayer burden.

The procedures will also ensure that the taxpayer relief provisions under Section 530 of the Revenue Act of 1978 are properly applied. Under the CSP, Internal Revenue Service (IRS) examiners will be able to offer businesses under examination a worker classification settlement using a standard closing agreement.

In situations listed under IRM 4.23.6.6 and IRM 4.23.6.7, it is mandatory that the examiner present a CSP offer to a taxpayer. The taxpayer has the option of either accepting or rejecting the offer.

CSP agreements are closing agreements that bind the Service and the taxpayer to prospective tax treatment for future tax periods. Therefore, it is important that CSP agreements be reviewed and approved by employment tax specialists who have the necessary expertise in dealing with worker classification issues.

CSP can be offered at 100 percent or 25 percent of the assessment. It will be identified at the top of the Form 4668"25 percent CSP Offer Applies — Do Not Process."

A closing agreement applies to employment tax cases only (Form 941 and Form 945). Form 940 may be mentioned in the agreement, if the return is related to Form 941 and/or Form 945. The closing agreement is provided in letter format that details the specific matters regarding worker classification. A closing agreement identifies the following:

Form 2424 , Account Adjustment Voucher, is prepared in two parts (credit and debit) and is used to effect the credit/debit transfer from MF to MF and MF to NMF.

To prepare Form 2424, follow these procedures:

Form 8485 , Assessment Adjustment Case Record for EO, and Form 3177, Notice of Action for Entry on Master File, should be used to bypass the amended return freeze on non-examined closings when the Examiner has taken the amended return into consideration. A TC 290 for 0.00 is used to clear the amended return freeze. Tax examiners should adjust taxes and penalties using this form, if the case is not established on AIMS. Tax examiners must receive the authorization from the Examiner before making the adjustment.

When there are more than eight reference items for item 15 on Form 5599, EO Examined Closing Record, the excess should be processed on Form 8485.

The reference items must be items that do not affect the tax and penalty, which are included in the examination results, (e.g. reference items 878, 879, 886, 887, 888 and 889). Tax examiners must ensure the reference items that do affect the tax and penalties, which are included in the examination results, (e.g. reference items 680, 681, 682, 764, 765, 766, 806 and 807) are processed on Form 5599.

To prepare Form 8485, follow these procedures

The Internal Revenue Code contains various penalty provisions which penalize taxpayer for acts not related to the filing of a tax return, i.e. civil penalties. These types of penalties were enacted by Congress to address the continuing problems of non-compliance with tax laws.

Civil penalties assessed or abated by EO will be assessed / abated on the Master File Civil Penalty Module. Master file tax codes (MFT) are used to record assessments, abatements, and other account actions. In addition to simplifying the assessment/abatement process, these procedures allow for the tracking of assessment data through the use of designated reference numbers.

These penalties must be adjusted using Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties. The assessment / abatement action should be input to MF through IDRS, using CC ADJ52, TC 290 with a zero amount and the appropriate three digit reference number and amount. Once posted to MF, a positive money amount will generate a TC 240 and a negative amount will generate a TC 241. The reference number will also post to MF and will be shown to the right of the TC 240 or TC 241. The TC 290 is solely a carrier transaction and will not post to MF.

The civil penalty account must not be established or controlled on AIMS but will be controlled on RCCMS. Form 3198-A must be attached to each penalty case file, identifying it as a civil penalty assessment / abatement, notating the applicable code section and any other special handling action.

Penalty case files must contain Form 8278, which must be completed by the Examiner. The file may contain additional paperwork related to the civil penalty assessment.

The tax examiner will prepare a separate file when multiple penalties are assessed for the same tax year. The file will include a copy of the necessary paperwork to comprise a case file.

The civil penalty module is a single entity module; joint assessments cannot be made. Any joint penalty liability, such as a jointly filed frivolous return, must continue to be made NMF utilizing existing instructions. Only the taxpayers name against whom the penalty is asserted should be shown on Form 8278.

MF will not accept a fiscal year tax period for MFT 13 / 55 except for assessments input with reference number 613. Reference number 613, Failure to File Foreign Information Returns, MFT 13, may be input with a fiscal or calendar year tax period. All other penalty assertions must carry a tax period ending in "12" or the transaction will become unpostable at MF.

Incomplete case files and cases with missing entries, manager’s signature, joint names or lack of a statute date on Form 8278 must be returned to the Examiner for correction. The correction can also be made via fax to the Examiner.

Establishment of a civil penalty name line (CVPN) applies only to MFT 55 assessments. Information to otherwise update the entity, such as an address change, must be input prior to establishing the CVPN.

Command code ENMOD or INOLES must be researched for all civil penalty cases to determine if the civil penalty name line needs establishing.

If the MF name line of the taxpayer being assessed the penalty is joint or ever has been, a CVPN must be established using Form 2363, Master File Entity Change, using TC 013, RF 55 (RF 55 informs the data transcriber that only a civil penalty name line is being established or changed). Do not change the name line of the MFT 30 account.

If the name line is single, the special action to establish the CVPN is not warranted. The civil penalty may just be assessed. MF will automatically extract and establish the penalty name line.

To provide easy identification for the person(s) responsible for processing forms they must underline the following entries on Form 8278 in brown pencil:

The civil penalty module will allow posting of only one penalty assessment per taxpayer per cycle. The system will accept input of multiple transactions and cycle each input automatically. Therefore, multiple concurrent transactions for the same taxpayer and tax period that will be asserted on separate Forms 8278 will be processed as follows:

There are conditions under which an individual may be liable for certain civil penalties which are not assessed through MF. These civil penalties must be assessed NMF on Form 5734, Non-Master File Assessment Voucher. The civil penalty assessment account must not be established or controlled on AIMS but will be controlled on RCCMS and may be received without the related AIMS case file.

Form 3198-A , annotated "Civil Penalty Assessment" in the "Other" section, must be attached to the documents or case file.

Form 5734 , prepared by the Examiner, must be in the case file. A statement for the tax examiner establishing the penalty, with a copy of the front page of the return, may also be included.

Tax examiners must review Form 5734 for completeness and legibility. If any information is missing or incomplete, the file must be returned to the Examiner or the responsible function.

Form 3870 , Request for Adjustment is primarily used to request a tax and or penalty adjustment on a taxpayers account. One Form 3870 is used per tax module that is being adjusted. Some common adjustments include:

When analyzing Form 3870, read the request carefully, sometimes the request can be conflicting and may require a call to the Examiner for clarification. Tax examiners should print out TXMODA to ensure the adjustment has not already been processed or is pending. Form 8485 may be required if there are accruals on the transcript when freeze codes are present on the module. The turnaround time to work Forms 3870 is usually 2 business days. The document code for this form is 54. This is important when trying to find the appropriate transaction codes in Document 6209, IRS Processing Codes and Information. Now that the Form 3870 and TXMODA has been analyzed, you are ready to code.

There are several types of codes to complete the 3870. It is imperative that tax examiners have the knowledge to properly code this form. The codes utilized by tax examiners are:

These codes are necessary to affect the exact tax and or penalty adjustment being processed. The proper preparation of this form will ensure the correct input and posting of the adjustment.

Information required from the Examiner:

Information required from Tax Examiner:

The following items are required to be underlined on Form 3870 with a brown pencil or marker:

When an account moves from one SSN / EIN to another or from one segment of an SSN / EIN (valid or invalid) to the other segment, we call it re-sequencing.

To re-sequence an account, request a CC TXMODA, IMFOL or BMFOL for both SSN’s / EIN’s (valid and invalid). Re-sequencing action moves all tax periods present in the account. Specific tax periods cannot be moved independently. Form 13596 is prepared when re-sequencing is required.

Do not merge account numbers if the following are present:

Tax Examiners must complete the following blocks or line items on Form 13596, complete all block or line items applicable to the reprocessing or re-sequencing procedure:

Once Form 13596 is completed, make one copy of the return and Form 13596. Forward the original return and Form 13596 to the campus and place the copy of the return and Form 13596 in suspense.

Address for sending original Form 13596:

Tax Examiners must follow up to ensure that the return has properly been processed and posted.

When the return has been properly reprocessed or re-sequenced Form 5599 will be coded for the incorrect and correct module as follows: