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					                                        DEPARTMENT OF THE TREASURY 

                                          INTERNAL REVENUE SERVICE 

                                             Washington, D.C. 20224

SMALL BUSINESS/SELF-EMPLOYED DIVISION

                                                   July 28, 2011 


                                                   Control Number: SBSE-04-0711-066

                                                   Expiration Date: 7-28-2012 

                                                   Impacted IRM: 4.25.1.1.2; 4.25.1.1.3; 

                                                   4.25.1.1.4; 4.25.1.1.12(8) - (14); 4.25.1.4.3; 

                                                   4.25.1.4.4



MEMORANDUM FOR CHIEF, ESTATE AND GIFT TAX


FROM: 	       John H. Imhoff, Jr "/s/ John H. Imhoff, Jr."
              Director, Specialty Programs


SUBJECT: 	 Interim Guidance On Closing Procedures for Estate and Gift Tax Cases



The purpose of this memorandum is to reflect changes in responsibilities and provide
updated procedures for the processing of estate tax cases for closure. Please ensure that
this information is distributed to all affected employees within Estate and Gift, Field.
Effective immediately, these procedures should be followed to close all cases. These
procedures incorporate the use of the Inventory Management System (IMS) and the
Notebook tool to electronically manage case activity.

Interim Guidance Memorandum SBSE-04-0711-066 will be incorporated into Internal
Revenue Manual 4.25.1 to reflect the above procedures by July 28, 2012.

If you have any questions about these interim procedures, please contact Kathy Dixon,
Estate and Gift Policy.


Attachment


cc: www.IRS.gov
Interim Guidance for Closing Procedures for Estate Tax Cases
TABLE OF CONTENTS

1. Survey Before Assignment

2. Survey After Assignment – Not a Claim

3. Survey After Assignment – Claim

4. Examined Entities

   4.1.     Current AIMS documentation

   4.2.     Add the SAIN code on IMS for all issues worked in the Case

   4.3.     Form 9984 should be complete and up-to-date as appropriate

   4.4.     Add the Form 10364-A and/or Form 895 from Notebook as appropriate

   4.5.     Add the Form 3198 from Notebook

   4.6.     Add a Form 5344 on the Returns Screen in IMS for all entities

   4.7.     Verify all issues on the Case have a UIL code in IMS

   4.8.     Verify/Upload all required EPD documents and workpapers are in IMS

   4.9.     Synchronize the case to upload and download all files in IMS

   4.10.    Check in all workpapers/documents in IMS

   4.11.    Entering Closed Dates in IMS

   4.12.    Close the Case from IMS

   4.13.    How to Close a Case in Notebook

   4.14.    Form 5346, Information Report

5. Unagreed Cases

6. Reopening a Closed Case on IMS

7. Reopening a Closed Case on Notebook



                                                                                 1
Exhibit Listing:
Exhibit 1-1 - Disposal Codes

Exhibit 1-2 - SAINs for Estate Returns (Form 706 only)

Exhibit 1-3 - SAINs for Estate Returns (e.g., Form 706A, 706NA, etc.)

Exhibit 1-4 - SAINs for Gift Returns

Exhibit 1-5- SAINs for Fiduciary Returns

Exhibit 1-6 - Closing Letters

Exhibit 1-7 - Transaction Code List/Reason Code List

Exhibit 1-8 - Appeals Code Listing

Exhibit 1-9 - Project Returns that Need to be Forwarded to PSP

Exhibit 1-10- Case File Assembly in Notebook




                                                                        2
The purpose of this memorandum is to reflect changes in responsibilities and
provide updated procedures for the processing of closed estate tax cases. This
memorandum uses the electronic processes that are in IMS and the Estate and Gift
Notebook.


1. Survey Before Assignment – For Manager Use Only [See also IRM 4.25.1.1.2(1)]

   1.1. Disposal Code 31



2. Survey After Assignment – Not a Claim [See also IRM 4.25.1.1.2(2) – (8)]

   Survey case only if (a) no taxpayer contact or (b) contact only for perfection of
   return.

   2.1. 	Use Disposal Code 32

                                                                              F
   2.2. For IMS 3.6, all surveyed returns should be completed outside of IMS. 	 or IMS 3.7
        (expected out in November 2011), surveyed returns may be completed in IMS.

   2.3. Obtain current IDRS research needed includes AMDISA, BMFOLT, BMFOLI, and
        INOLE (less than 30 days old- preferably 1 week). The correct statute date and
        codes should be reflected on the IDRS research document. All updates made in
        ERCS take up to two weeks to migrate from ERCS to AIMS.

   2.4. Fill out Form 3198 Special Handling Notice
      2.4.1. Business Unit Section: Select correct unit (Estate or Gift).
      2.4.2. Employee Preparing Form: 	Complete the appropriate sections including the
             Primary Business Code (213); Secondary Business Code; group number
             (1XXX). In the Employee ID/Badge No. section, use the last 7 digits of the
             number on your SmartID card.
      2.4.3. Complete Taxpayer Identification Number (TIN) and Earliest Statute Date
             information.
      2.4.4. Taxpayer Name Section: An address label may be used for this section.
            2.4.4.1. Use the INOLE address unless you have evidence to the contrary.
            2.4.4.2. 	 Check Power of Attorney (POA) and enter valid periods, if the Form
                  2848, Form 8821, or Declaration of Representative on Form 706 are in the
                  case file.
            2.4.4.3. 	 If the address for the case file has been changed, complete the Form
                  2363, Master File Entity Change and fax to Closed Case Processing (CCP)
                  at 859-669-3803. Original Form 2363 and fax confirmation should be
                  included in the case file.
      2.4.5. Related Taxpayers or Key Cases Section: Enter the taxpayer name, TIN,
                                                             	
             MFT, and Tax Period as appropriate.
      2.4.6. Expedite Processing should be checked if the statute is less than 90 days.

                                                                                         3
                                           C
     2.4.7. Special Features Section: 	 omplete as appropriate. If an amended return is
          in the file, the return should be reviewed and the amended return box should be
          checked.
     2.4.8. Forward Section:
        2.4.8.1. Forward to CCP: Check the box.
        2.4.8.2. 	 Forward to PSP: Check the box for all Fed/State, research or project
               cases
        2.4.8.3. Complete Date Closed to Manager and your Manager’s Name.
        2.4.8.4. 	 Complete Return information as appropriate. (Tax Period, MFT, Time
               Applied, Disposal Code, and Payment Information.
     2.4.9. Special/Restricted Interest Features Section: Complete as appropriate. If
          IRC Section 6166, check box and follow the procedures in IRM 4.25.1.5.
     2.4.10.         Letter Instructions for CCP Section:
        2.4.10.1. 706 - Check box for Estate Tax Closing Letter 627. Check box for
                                                                       	
               Copy to POA if Form 2848, Form 8821, or Declaration of Representative
               on Form 706 is in the file.
        2.4.10.2. 709 – Check box No letter required to be sent by CCP.

  2.5. Complete Form 9984 should be completed as appropriate. All actions should be
                                                                 	
       documented with the reason for survey. If comments need to be made, go to the
       case comments section of the timesheet in IMS to enter specific comments for this
       case.

  2.6. Attach Form 3187, Survey After Assignment to the case file. Use survey reason
                                                                     	
       code A: No large, unusual or questionable items (if not applicable talk to your
       manager).

                                                              U
  2.7. Form 5351, Examination Non-Examined Closing. 	 se the Status-EGC label if
       available. If the label is not available, enter the TIN, MFT; Tax Period, Name
       Control (usually first four letters of last name), Enter Requester/EGC/Date in the
       area provided at the top of the form.

  2.8. Stamp the Face of the return with the Survey After Assignment Stamp. Sign, date,
                                                                            	
       and forward to your manger for signature.



3. Survey After Assignment – Claim

  3.1. Follow items in Section 2, Survey After Assignment, except items listed below.

  3.2. Form 3198. In the Special Features section, check the box for surveyed claim.

  3.3. Do not use Form 5351, Examination Non-Examined Closing.

  3.4. Complete the following sections of Form 5344, Examination Closing Record: 

       (Reference IRM 4.4.12) 


                                                                                            4
                                                          I
     3.4.1. P7-18: Use the Status-EGC label if available. 	f the label is not available,
          enter the TIN, MFT, Tax Period, Name Control (usually first four letters of last
          name), and name of estate or donor.
     3.4.2. Item 13: Enter Disposal Code 34.
     3.4.3. Item 21: Enter the amount claimed.
     3.4.4. Item 22: Enter 0 (zero).
     3.4.5. Item 23: Enter hours worked on claim.
     3.4.6. Item 24: Enter claim type.
        3.4.6.1. B for Form 843, Claim for Refund and Request for Abatement.
        3.4.6.2. E for an informal claim or an amended return.
        3.4.6.3. I for a Form 706/709 supplemental return.
     3.4.7. Item 28: Enter all hours worked on other issues (non-claim issues).
     3.4.8. Item 30: Examination Technique Code will always be 3
     3.4.9. Item 31: Enter your Grade
     3.4.10.       Item 33: Enter your name.
     3.4.11.       Item 410: Enter the Aging Reason Code, as appropriate.
     3.4.12.       Item 411: Check the box for No.
     3.4.13.       Item 412: Check the box for No.

  3.5. Stamp the Face of the claim with the Survey After Assignment Stamp. Do not
                                                                               	
       stamp the original return. Sign, date, and forward to manger for signature.



4. Examined Entities

  Complete all examined entities in IMS. When the examined entity is closed to the
  manager, all workpapers generated during the course of the examination for each entity
  should be included with the case in IMS. IMS must be in a connected status to close
  the entity.

  Use Notebook to generate reports for all examined entities. These reports should be
  included in the case file in IMS. The reports and forms to be used for closing cases are
  listed in Notebook Manual.

  Click the Report Forms button in Notebook to create the applicable forms and reports to
  the “Notebook\Deployed Forms\Taxpayer\Report Forms” folder on your computer. The
  Estate File Forms deployed using this function are Forms 890, 1273, 6180, and 886A
  and worksheets. Forms 2297 and 3363 are deployed if the case is a claim or the
  Claims screen was opened. Similarly, the Report Forms button for a Gift File deploys
  its respective forms and reports.


  4.1. Current AIMS documentation

     Obtain current AIMS Documentation. Must be less than 30 days old (preferably 1
     week). All documentation should have the correct statute date and transaction
     codes. Remember the statute date takes up to two weeks to migrate from ERCS to
                                                                                             5
   AIMS. The transaction codes should be reviewed to ensure that the correct
   assessed tax is reflected on all reports. 

            AMDISA 

            BMFOLT          

            BMFOLI        

            INOLE 


4.2. Add the SAIN code on IMS for all issues worked in the case

   Create additional issue(s) with corresponding SAIN(s) for each return/entity in the
   case file. This will help you track the issues worked in your case. The SAIN code(s)
   chosen should reflect the issue you are working and not just the Administrative Issue
   or Referral to Specialist (SAIN EG080 or EG081).

   All returns added to IMS from an Estate and Gift employee are required to have an
   Administrative Issue.

   Create an additional issue for tracking purposes by following these steps:

   4.2.1. Open/View the specific case in IMS, go the Issues Screen. At the Issues
                                                                    	
        screen, click the Green + icon to add a new issue.

   4.2.2. Select the Entity that needs the issue to be added.

   4.2.3. Select the SAIN Code for the issue from the drop down field.

                                                                         U
   4.2.4. Add the UIL code that corresponds to the Issue being added. 	 se the “Find
        UIL” button to search for desired IRC section or select UIL “00001.06-00 –
        Estates and Trusts”.

        The UIL code is required for closing a case in IMS.

   4.2.5. For issues other than EG080 (Administrative Issue) or EG081 (Referral to
        Specialist), enter the date you began the examination in both the Issue Start
        Date and Issue End Date fields. Both dates should be the same. Having the
        dates consistent will keep the new issue from being available when you charge
        time to the case on your future timesheets in IMS.

   4.2.6. Insert “0” for Original Staff Days Assigned. In IMS 3.7 (expected out in 

                                                       	
        November 2011), this field is expected to default to 0 days. 


   4.2.7. 	 Click Save. If you need to apply this issue to other returns in the case or
        need to create additional issues, click Save & Copy.

   4.2.8. Go to the issues screen in IMS and open the issue (make sure it is checked
        out). Select Adjustment Amt/Source on the Issue Tree. Enter the Proposed
        Adjustment per Examiner Amount and the Amount per Return. If the issue is a
        claim select the Yes radio button for claim.
                                                                                          6
       Disregard other entries on this screen.

       You must enter a SAIN for each of the required issues for all of your returns in
       IMS. The required issues are:

              •	 Major issues in the case file (i.e., the one or two issues in the case
                 file that resulted in the greatest time expenditure). You do not have to
                 include all of the issues taken into consideration to make an
                 adjustment.

              •	 All classified issues for the case.

       If the issue appears on more than one schedule, please choose the best SAIN
       to include for that issue. It is not necessary to include the same SAIN multiple
       times for a return.

       Please see the following Exhibits listed below for the Estate and Gift SAIN
       tables:

              •	 Exhibit 1-2 - lists the SAINs for Estate Returns (Form 706 only).
              •	 Exhibit 1-3 - lists the SAINs for Estate Returns (e.g., Form 706A,
                        706NA, etc.)
              •	 Exhibit 1-4 - lists the SAINs for Gift Returns
              •	 Exhibit 1-5- lists the SAINs for Fiduciary Returns

       Special Exclusion for Cases Added to IMS by Engineering

           •	 You do not need to add the required issues (SAINs) for cases added by
              Engineering Services. The reason is that these cases (i.e., Cycle Type-
              Regular) will not have Estate and Gift SAIN Codes.


4.3. Complete Form 9984.

   An up-to-date Form 9984 can be easily created on IMS if the user includes activity
   comments on their time charges. Items that should be reflected on the Form 9984
   include:

   4.3.1. Dated entries every 45 days or less, and if the timetable was not followed
        then provide an explanation for the delay/gaps,
   4.3.2. Indication that the exam was started with 45 days of assignment, and if not,
        provide an explanation for the delay,
   4.3.3. Indication when the opening letter was sent. Should reflect within 45 days of
                                                        	
        assignment; if not, provide an explanation why not,
   4.3.4. Notation that Taxpayer was given Publication 1 and Notice 609 upon initial
        contact,

                                                                                          7
   4.3.5. Indication that direct contact has been made every 45 days or less with the
        Taxpayer/POA, if not provide an explanation why no contact was made,
   4.3.6. Indication of any delays, causes of the delays, and if delays were
        communicated to any affected people; if not, provide an explanation for the lack
        of communication,
   4.3.7. Indication when mandatory EPD documentation was not used and an 

        explanation of why not. 

   4.3.8. Notation that Taxpayer was given Publication 3384 when the waiver was
        sent, and
   4.3.9. Indication in claim cases, the reason for allowance, partial disallowance, or
        full disallowance.

4.4. Add the Form 10364-A and/or Form 895 from Notebook as appropriate.

   The Form 10364-A, Statute Expiration Case Notice, and the Form 895, Notice of
   Statute Expiration, are included in Notebook. Some groups may generate the Form
   895 from ERCS and forward to the examiner for acknowledgement.

   4.4.1. If the statute is within 210 days, the case file needs the Form 10364-A (red
        folder or red sheet). The Form 10364-A is stapled to the front cover of the case
        file.
   4.4.2. If the statute is 6 months or less, the Form 895 also needs to be stapled to
        the front cover of the case file.

4.5. Add the Form 3198 from Notebook

   The Form 3198, Special Handling Notice, can be completed in IMS, but it is
   recommended that the form be created in Notebook. Once it is created from
   Notebook, it can be saved as an existing workpaper in IMS. The form should be
   saved in the workpaper section under the Administrative Issue.

   Complete the following items on the Form 3198.

   4.5.1. Check the Business Unit (Estate and Gift); Person to contact (examiner
        name); telephone and fax; Primary Business Code (213); Secondary Business
        Code; group number (XXXX); Employee ID/Badge No. (use the last 7 digits of
        your SmartID card number).

   4.5.2. Complete the Taxpayer Information and Related Taxpayer Information on the
        Form 3198. You may use the ADDRESS Label if available. The information
        needed is:
      4.5.2.1. Taxpayer SSN and earliest statute date.
      4.5.2.2. Taxpayer name and address, INOLE address should be used.
      4.5.2.3. 	 If the address has changed complete the Form 2363 and fax it to CCP
            at 859-669-3803. The original Form 2363 and the fax confirmation should
            be included in the case file with the closing documents.



                                                                                       8
   4.5.2.4. 	 If POA in the case file (Form 2848, Form 8821 or Declaration of
         Representative on Form 706), check the POA box and enter the valid
         years.
   4.5.2.5. Complete appropriate Related Taxpayer or Key Case information


4.5.3. Expedite Processing
   4.5.3.1. If the statute is less than 90 days, check the box.
   4.5.3.2. 	 If the deficiency or overassement is over $100K and unpaid, complete
          the “Over $100K Agreed and Unpaid” section on page 2.
       4.5.3.2.1. Enter the agreement received date (waiver received date).
       4.5.3.2.2. Enter the Total Amount of Deficiencies/Overassessments plus
               Penalties amount.
       4.5.3.2.3. Enter the Date Received; Date Closed (to manager); Days (count
               days from agreement received and date closed to manager); and
               Initials.
                                                          E
       4.5.3.2.4. Explain any delay greater than 4 days. 	 nter explanation in the
               Explanation of Delays section.
   4.5.3.3. 	 If payment is received, complete the Form 3244-A, Payment Posting
          Voucher and follow the instructions for processing payments on the E&G
          website under “Campus Contacts and Procedures”. Notification should be
          sent for remittances larger than $1 million.

4.5.4. Special Features
   4.5.4.1. 	 If an amended return is in the file, make sure you review it and check
         the amended return box.
   4.5.4.2. 	 Check all other instructions as appropriate, other than instructions
         related to Section 6166.


4.5.5. Case Forwarding

      Complete all applicable sections: Tax Period, MFT, Time Applied, Disposal
      Code, Tax Deficiency/Overassessment, Penalty Code Section, Penalty
      Amount, Adjustment Amount, Agreement Date, and Payment Y/N.

   4.5.5.1.   Forward to CCP

      All cases that are agreed, no-change, change/no-change, agreed claims (no
      refund or abatement), agreed claims (full or partial disallowance), and agreed
      unified credit should be forwarded to CCP.

      Update the Status Code on ERCS to 51

   4.5.5.2.   Forward to PSP




                                                                                       9
      Fed/State, Research, and other Compliance Initiative Projects (CIP) projects
      with a tracking code should be forwarded to PSP. See Exhibit 1-9 for a list of
      the project and/or tracking code cases that should be forwarded to PSP.

      Update the Status Code on ERCS to 41.

   4.5.5.3.   Forward to Tech Services 


      All unagreed cases, including unagreed claims (full or partial disallowance)
      should be forwarded to the local Tech Services Office. When this option is
      chosen you must also complete the section forward to Technical Services
      section as appropriate.

      Update to Status Code on ERCS to 21

      4.5.5.3.1. For 90-day letters select “Unagreed for Statutory Notice.” 

      4.5.5.3.2. For protested entities select “Unagreed to Appeals.” 

      4.5.5.3.3. For unagreed claim disallowance entities (not protested) select 

              “Statutory Notice of Claim Disallowance.” 


4.5.6. Special/Restricted Interest Features 


   If IRC Section 6166, select IRC Section 6166 and follow the procedures in IRM
   4.25.1.5.12. 


4.5.7. Letter Instructions (See Exhibit 1-6 for list of closing letters) 

   4.5.7.1. 	 For Technical Services on page 1 of the Form 3198 indicate letters as 

          appropriate. 

       4.5.7.1.1. For 90-Day letter, indicate by selecting Unagreed for Statutory 

               Notice. 

       4.5.7.1.2. For 90-Day Claim disallowance letters 

       4.5.7.1.3. For Protested 30 day letters, Mark Unagreed to Appeals 


   4.5.7.2. 	 For Centralized Case Processing (CCP)Section on page 2 of the Form 

         3198 should have instructions for letters as appropriate. 

      4.5.7.2.1. For POA letter, check the box for the Copy to POA – Letter 937. 


      4.5.7.2.2. For Form 706 

         4.5.7.2.2.1. No change, check the box for the no change letters. 

             4.5.7.2.2.1.1. Check the box for the Letter 590. 

             4.5.7.2.2.1.2. Check the box for the Estate Tax Closing Letter 627. 

         4.5.7.2.2.2. Change/No change, check the box for the no change letters. 

             4.5.7.2.2.2.1. Check the box for the Letter 1156 

             4.5.7.2.2.2.2. Check the box for the Estate Tax Closing Letter 627. 

         4.5.7.2.2.3. Agreed, check the box for the Estate Tax Closing Letter 627. 

         4.5.7.2.2.4. 	 Agreed Claim (no refund or abatement), check the box for 

                   the Estate Tax Closing Letter 627. 


                                                                                     10
             4.5.7.2.2.5. Agreed Claim Disallowance (full or partial), check the box for
                            	
                      the Estate Tax Closing Letter 627.
             4.5.7.2.2.6. Unagreed Claim Disallowance (full or partial), check the box
                            	
                      for the other letter and enter Letter 569.

          4.5.7.2.3. For Form 709, check the box for the no letter required to be sent by
                  CCP. Do not issue any letters, unless it is an IRC 7477 situation in
                  which Letter 950-G should be issued.
             4.5.7.2.3.1. No change
             4.5.7.2.3.2. Change/No change
             4.5.7.2.3.3. Agreed
             4.5.7.2.3.4. Agreed Claim (no refund or abatement),
             4.5.7.2.3.5. Agreed Claim Disallowance (full or partial).
             4.5.7.2.3.6. Unagreed Claim Disallowance (full or partial)

          4.5.7.2.4. For Unified Credit Change Only (Agreed Adjustment to Unified
                  Credit)
             4.5.7.2.4.1. 	 No Change, check the box for the no change letters and
                       check the box for the Letter 1156.


4.6. Add a Form 5344 on the Returns Screen in IMS for all entities

   You must prepare Form 5344 for each return/entity involved in the case. Form 5344
   is used to input the final closings of an examined return or surveyed claim. To create
   a Form 5344 in IMS, go to the ”Returns” section on the case tree. Select the return
   you want to add a Form 5344 for and then click on the “Add 5344 Closing
   Examination Document” icon. Note: The Form 5344 Examination Closing window
   at the bottom of the screen will display any Form(s) 5344 for that return.

   A Form 5344 Adobe document will be created. Complete the necessary information
   and then click Submit to IMS. You will receive a message if the form was submitted
   successfully.

   Each of the fields mentioned in the following table in 4.6.1 need to be completed on
   the Form 5344 before sending your return to Centralized Case Processing (CCP).
   Some of the fields are auto-populated in IMS. Some of these auto-populated fields
   may need to be revised.

   All fields on the IMS generated Form 5344 can be edited. Of the fields that are auto-
   populated, you might need to delete/add the following fields on page 2 on the Form
   5344:

      •	 Secondary Business Code (delete if auto-populated)
      •	 Employee Group Code (delete if auto-populated)
      •	 Lines 405 thru Line 408
            o	 Delete Lines 405 thru 407 if the return is not a related return on ERCS.
                Include this information if it is a related return on ERCS.
                                                                                       11
                   o	 Delete Lines 405 thru 407 if the return is the primary return on ERCS.
                   o	 Do not assume an entity type of “Related- ERCS” in IMS is a Related
                      Return on ERCS. Related Returns on ERCS have a Source Code of
                      either “05”, “10”, “12”, “39”, “40”, “44”, “50”, or “64”.

          4.6.1. Complete the following fields on the Form 5344 (See IRM 4.4.12):

  ITEM                                       DESCRIPTION
P1-6       CC AMCLS – This is completed depending on the type of closure. The
           definers are:
                A = Appeals
                E = Examination
                F = Examination/Appeals (partial assessment)
P7 – 18    TIN - This field should be automatically populated in IMS. The TIN should
           include “V” or “W”. This digit is not populated in IMS 3.6.
P21-22     MFT – This field should be automatically populated in IMS.
P24-29     Tax Period – This field should be automatically populated in IMS with
           year/month. In IMS 3.6, you will need to revise the tax period on the Form
           5344 for Form 706 examinations to 000000.
P31-34     Name Control – This field should be automatically populated in IMS. First
           4 letters of NAME.
B-Name     Name – This field should be automatically populated in IMS. Name of
           estate or donor. Enter name – last name, comma, first name, comma, middle
           initial.
02         Penalty Reason Code – See IRM 20.1.1.1-3, Exhibit 20 for two digit code (21-
           46). Only required when penalties are abated.
08         Agreement Date – Date the waiver is received (Date Stamp on waiver) for
           disposal codes 03 and 04 and there is an increase in tax in Item 12. For MFT
           05, 51, or 52.
12         Tax Liability, Penalty and Interest Adjustments.
           Disposal Code:
                01 or 02 – blank or zero
                03 – Exam Results (tax increase or decrease)
                04 – Exam Results (tax increase or decrease)
                07 – Exam Results (tax increase or decrease)
                08 – Exam Results (tax increase or decrease)
                12 – Exam Results (tax increase or decrease)
                34 – Claim Amount
           See transaction codes list in Exhibit 1-7. Interest should only be included if
           restricted.




                                                                                            12
  ITEM                                   DESCRIPTION
13       Disposal Code:
             01 – No Change with adjustments
             02 – No Change with no adjustments
             03 – Agreed
             04 – Agreed (after 30 day letter)
             07 – Protested/Appealed
             08 – Unagreed for statutory notice
             12 – Barred statutes, unagreed partial assessments, fraud suspense
             34 – Surveyed claims
15       Credit and Tax Computation Adjustments. Enter Miscellaneous penalties with
         reference number. See Exhibit 4.4.12-1. See reason codes list in Exhibit 1-7.
16       Appeals Office Code: If applicable, enter the three-digit Appeals Office Code
         identifying the office the case is being closed to. Please see Appeals Code
         Listing in Exhibit 1-8.
18       Unagreed Amount Appealed/Petitioned: If applicable, enter the dollars being
         protested. Each case should have a 30-day letter. Required with disposal
         code 07. Enter the net estate tax due after allowance of the full state death tax
         credit (disregard evidence of payment). Amount should be for the full
         deficiencies only, subtract partial assessments.
         If a claim for refund (RBP) is appealed without adjustments, enter -$1 (negative
         one dollar) and enter the amount of the claim for refund (RBP) being appealed
         in Item 22.
20       Claim Rejection Date: Enter the agreement date of the formal claim
         disallowance form (Form 2297, Waiver of Statutory Notification of Claim
         Disallowance). Leave blank if no agreement. If complete, Item 22, 23, 24 and
         amount claimed are required.
21       # Amount Claimed: Enter the amount of the claim. Source Code on ERCS
         must be 30. Refer to IRM 4.4.4 (Claims)
22       Dollars Protected: Enter the dollar amount of the refund that was protected
         from leaving the Treasury. Amount cannot be more than Item 21. Refer to IRM
         4.4.12.4.36
23       RBP Hours: Enter the amount of time spent on only the claim issues. This
         field should be automatically populated in IMS.
24       Claim Type: Enter the alpha code identifying the type of claim for refund.
         Enter “B” for Form 843, “E” for an informal claim or amended return, or “I” for
         Form 706/709 supplemental return.
28       Examiner’s Time: Enter all time charged to the entity (does not include any
         claim (RBP) time). Time charges should include Specialist time charged to the
         entity. This field should be automatically populated in IMS.
30       Examination Technique: Enter 3 for Examination (Groups with 1XXX). This
         field should be automatically populated in IMS.
31       Examiner’s Grade: Enter your GS grade. This field should be automatically
         populated in IMS.
32       Grade of Case: This entry can be made by the employee but needs to be
         verified by your manager. Refer to IRM 4.25.1.7.


                                                                                             13
  ITEM                                         DESCRIPTION
33            Examiner’s Name: Enter the last name and first initial. No change to the entry
              is required in IMS. This field should be automatically populated in IMS.
37            Delinquent Return: Enter “T” for one delinquent return. For multiple delinquent
              return pick-ups, enter “T” on the first Form 5344 and enter “R” for the other
              Form 5344s. Item 414 is required if this field is completed.
38            Fraud: Enter “F” if criminal prosecution is successfully concluded. Enter “C” if
              the 75% fraud penalty was asserted under IRC 6663.
401           Whipsaw Indicator: Enter “K” for Key Case and “R” for Related Case. Used to
              indicate the protection of the government’s interest by making the same
              adjustment against the same taxpayer for different tax periods or against two or
              more taxpayers. The indicator should be used only if the majority of the
              adjustments were due to the whipsaw issue.
405 – 408     Related Return Information Section: Should be populated for each entity. If a
              Primary Return, no data should be input in fields 405-407. If Secondary
              (Related) Returns, then Primary Return Information should be reflected and
              408 is “S”. Most of these fields will be automatically populated in IMS but
              they might be inaccurate according to ERCS. The employee needs to verify
              the information is accurate.
              In IMS 3.6, information in fields 405-407 are auto-populated even if it is a
              primary return. Users will need to delete this information for primary returns.
410           Aging Reason Code: Enter the Aging Reason Code per the ERCS/AIMS data.
              Refer to IRM 4.25.1.6.
411           Payment Code: Required on all examined entities. See Form 5344 for
              indicators.
412           Installment Agreement Code: Required on all examined entities. See Form
              5344 for indicators. If 6166, “C” (Coordinated with Collection) should be
              selected.
414           Delinquent Return Amount: This field replaces Item 34 for Adjustment Amount
              field for delinquent returns secured by Examination and forwarded to the
              campus for processing the Transaction Code 150. Enter the balance due or the
              refund amount (excluding penalties) per the delinquent return.
422           Unified Credit Adj Amount: Enter any adjustment to the Unified Credit.


      4.7. Verify All Issues Have a UIL Code in IMS

            Some users might not have added a UIL code to the issue when it was created. A
            UIL code is required to close the case. To verify if the issue has a UIL code, go to
            the Issues screen in IMS. Look on the Issue screen at the UIL field. If any of the
            issues have the UIL missing, you will need to add it to the issue. If the issue is not
            checked-out (you would see a “Y”), you will need to check it out before you can edit
            it. The issue can be checked out by selecting it and clicking on the Checkmark on
            the Issue Screen.

      4.8. Verify/upload all required EPD Documents/ Workpapers are in IMS.

                                                                                                 14
Store all workpapers in the Administrative Issue (EG080). All lead sheets are
included in Notebook and should be deployed and imported into IMS. Once
imported into IMS, updates should be made to the lead sheets in IMS.

4.8.1. Examination Planning Workpapers Index

   4.8.1.1. 	 The Mutual Commitment Date (MCD) should be indicated or explained
         why not used
   4.8.1.2. 	 POA processing should be completed, if the Form 2848, Form 8821, or
         Declaration of Representative on Form 706 is in the case file.
   4.8.1.3. 	 Complete status of penalty and fraud areas (and consideration
         documented in workpapers or use non-assertion/assertion penalty lead
         sheet (attributes 407 and 408)
   4.8.1.4. Focused issues should be briefly stated in schedule areas
   4.8.1.5. If no issue lead sheet used, put in audit steps (attribute 101)
   4.8.1.6. 	 If the return is an LSA (Project Code 0902) use the LSA Exam
         Planning Index Work Papers Index instead of the Examination Planning
         Workpapers Index (other lead sheets are optional).

4.8.2. Administrative Lead Sheet

   4.8.2.1. Mark taxpayer rights area accordingly (attribute 607)
   4.8.2.2. Indicate relevant referrals and date made (attribute 101)
   4.8.2.3. 	 Complete statute controls area – clearly state if any open related
         returns exist (positive or negative). If they exist, explain why or why not
         opened during the course of the examination (attribute 104).
   4.8.2.4. Complete Form 872 extension section as appropriate.
   4.8.2.5. Complete payment section if relevant (attribute 612).

4.8.3. Issue Lead sheet

    Mandatory if Examination Planning Workpapers Index is not used. The audit
    steps must be documented and can be customized to the facts of the case.
    The audit steps can be either in the Examination Planning Workpapers Index or
    on an issue lead sheet.

   4.8.3.1. 	 Customize the audit steps to the case facts; if using sample schedule
         issue lead sheet, delete irrelevant sample audit steps.
   4.8.3.2. List the pertinent facts.
   4.8.3.3. Cite the relevant code section or case law decision is relied upon.
   4.8.3.4. Briefly state the government’s and taxpayer’s position.

4.8.4. Other Tax Returns Lead Sheet

    Related returns should be identified and a determination made whether to
    expand audit to include (attribute 104).

                                                                                       15
   4.8.5. Asset Probe – Consistency Lead Sheet

   4.8.6. Manager Plan to Close Workpaper

        Should be included for all cases closed with greater than 120 cycle days.

   4.8.7. Penalty Consideration and Reasonable Cause Lead sheets

        Penalty Approval Form is needed if penalties are proposed for assessment.
        You may document penalties in Administrative Lead sheet and Form 9984.

        A detailed explanation is needed of either determination if penalties are not
        proposed on the Reasonable Cause Lead sheet.

   4.8.8. Installment Payment Election Lead Sheet– is necessary if the IRC 6166 is
        applicable.

        You may document the IRC 6166 determination in the Administrative Lead
        sheet and Form 9984. A detailed explanation is needed of either determination.

4.9. Synchronize the Case to Upload and Download All Files in IMS

   Perform a Case Synchronization.

   When the synchronization form appears, wait a few seconds to select “All Issues” at
   the top of the form. Once this option is selected, click on Select All in the “Upload to
   Server” section and then click Select All in the “Download from Server” section.
   Click Synchronize.

          •	 By selecting “All Issues” and the upload and download options, you will
             download any lead sheets created on the IMS server without your
             knowledge.

          •	 You will also download any issues added by other Team Members.

   Important- Please wait until the synchronization process is complete before checking
   in documents. If your “synch” is not complete, you might not be able to close your
   case.


4.10.     Checking in All Workpapers/Documents in IMS

   All items/documents must be checked in before a case can be closed in IMS. Click
   on the Check-in Options icon at the top of the IMS screen (looks like a checkmark).

   The Check-In screen should appear. On the screen, select the appropriate case
   and choose “Select All” on the form. Click OK. IMS will check-in each of the
   documents you have checked out on your computer to the IMS server.

                                                                                         16
          •	 If a team member has any documents checked out, you will need to
             contact them to check in the file.

4.11.     Entering Closed Dates in IMS

   4.11.1.       Entering the Actual Closed Date for the Case in IMS

        On the Case Attributes screen, fill in the Actual Closing Date field. You need to
        be connected to the IMS Server to make the change.

        Next, click to the Entities screen in IMS (you will be prompted to save the
        change). Save the changes.

   4.11.2.       Entering the Actual Closed Date for Each Entity in IMS

        On the Entities screen, click the Populate Closed Date Icon (in the middle of the
        screen and looks like a calendar with a right arrow on it). All returns in the case
        without an Actual Closed date will have the closed date added automatically
        from the Case Attributes screen.

          •	 By using this command, you will not have type the date for each return in
             the case.

        The Entities screen in IMS typically will only show returns without an actual
        closed date listed. If desired, you can also manually enter the actual close
        dates by opening each entity and entering the date.

4.12.     Close the Case on IMS

        Go to the “Case Inventory” screen (on the menu bar click Navigate → Case
        Inventory)

        Press the “Edit Case Status” icon (looks like a white box with a magnify glass
        over it), select the closed status and enter the closing date. Press “OK”.

        If the closing is successful you will get a message stating “Case data will be
        removed from your case inventory”. If you receive an error message, please
        cancel out of this screen and do not save the changes. Please resolve the
        error(s) and then attempt to close the case again.

        If closing was successful, the case will no longer appear in your Case
        Inventory.

4.13.     How to Close a Case in Notebook

   4.13.1.       The Case Closing Documents Button in Notebook

        Select the Case and open the Case Details screen,

                                                                                         17
        Clicking the Case Closing Documents button on the Case Details screen opens
        the Deploy Forms screen. The Deploy Forms screen includes a Disposal Code
        drop-down menu for either Estate or Gift returns. Once the Disposal Code is
        selected, the user might be able to select a specific Disposal Type. For
        example, for Disposal Code “01”, you can choose either “Agreed Full Claim
        Disallowance”, “Change- No Change”, “Claim”, and “Unagreed Full Claim
        Disallowance”.

        Forms like the Form 895, Form 3198, Form 5346, and others will be output from
        Notebook with this command.

   4.13.2.       Closing a Case in Notebook

        On the Case Details screen, there is a Close Case in Notebook check box.
        The check box is not available until the case has been created (i.e., it is grayed
        out). Once a case has been Created, the check box is active. Checking the
        Close Case box opens the pop-up message that cites “This Taxpayer Case has
        been closed in Notebook”.

   4.13.3.       Closing a Case in Notebook vs. Removing a Case in Notebook

        In the Notebook, Closing a Case and Removing a Case are different
        procedures.

        The distinction between the two procedures:
           •	 Closing a Case moves the case from your Existing Taxpayer Case list to
               your Closed Case list. A Closed Case can be re-opened. Closing a
               case also makes it eligible for Removal from Notebook.
           •	 Removing a Case completely will permanently remove the case from
               your database (your Notebook). Removing a selected case deletes all
               information from the Notebook database and moves the related files
               from the Deployed Forms folder to the Closed Cases folder. You cannot
               re-open the return in Notebook once it is removed.


4.14. 	    Use Form 5346, Examination Information Report if Schedule J non-
    professional executor fees are $10,000 or over. Attach the first three pages of the
    return to the information report. Identify income years to be included from the year
    of death through the statue of limitations.
        4.14.1.1. Make two copies of the Form 5346.
        4.14.1.2. Attach one copy to the back of the Schedule J
        4.14.1.3. Attach the other package (Form 5346 stapled on top of the first three
              pages of the return) to the left inside of the case folder.




                                                                                       18
5. Unagreed Cases [See also IRM 4.25.1.1.12 (9) – (13)]

  5.1. Complete 30 day letter package. 	The 30-day package should be mailed to the
       taxpayer no later than 240 days before the statute (8 months). Technical Services
       should not receive a protested case with less than 210 days on the statute. Per
       Appeals IRM 8.2.1.3.4, 180 days must be remaining on the statute upon receipt of a
       case by Appeals.

     5.1.1. ETA, Part 1: Should be submitted to manager for review.
                   C
        5.1.1.1. 	 reate the manager review package on IMS. The ETA should create a
               folder named 30 Day Letter under the administrative file for the electronic
               copies.
        5.1.1.2. 	 Create Letter 950 or Letter 950-G. Address the letter to the taxpayer.
               Include the Letter 937 for the POA (as appropriate, if the Form 2848, Form
               8821 or Declaration of Representative on Form 706 are in the case file).
                5.1.1.2.1.1. Use INOLE to address the letter properly.
                5.1.1.2.1.2. 	 Include the Taxpayer TIN (if SSN the V validation code
                         should be included).
                5.1.1.2.1.3. 	 Include Form number, tax period, person to contact,
                         telephone numbers, and the last 7 digits of your SmartID Badge
                         ID.
                5.1.1.2.1.4. 	 Date to respond should be at least 35 days (preferably 37
                         days) from the anticipated date of the letter.
                5.1.1.2.1.5. Include the return address
                5.1.1.2.1.6. Signatory authority is delegated to the group manager for
                               	
                         SBSE. Signature line should read:
                                   For Anita Babb
                                   Chief, Estate and Gift Program, SBSE
            5.1.1.2.2. Form 3233 (Gift) or Form 1273 (Estate) or Form 1041 report with
                    the Form 886-A and exhibits


     5.1.2. ETA: Part II
        5.1.2.1. 	 Make any corrections as needed and resubmit to manager or prepare
              the 30 Day Letter package.
        5.1.2.2. Assemble three packages

            5.1.2.2.1. Package 1 to taxpayer
               5.1.2.2.1.1. Letter 950 – two copies with mailing date
               5.1.2.2.1.2. Blank Form 13683
               5.1.2.2.1.3. 	 Form 3233 (Gift) or Form 1273 (Estate) or Form 1041 report
                        with the Form 886-A and exhibits
               5.1.2.2.1.4. 	 Form 890 if estate or gift return; if Form 1041 use the
                        appropriate waiver form
               5.1.2.2.1.5. Publication 3498
               5.1.2.2.1.6. 	 Un-franked return envelope (a return envelope without
                        postage) with “30 Day” written in lower left corner and addressed
                        to the ETA.
                                                                                       19
             5.1.2.2.1.7. 	 Address the envelope to the taxpayer. Paperclip to 

                      package. 


          5.1.2.2.2. Package 2 to POA (If the Form 2848, Form 8821 or Declaration of 

                  Representative on Form 706 are in the case file.) 

             5.1.2.2.2.1. Letter 937 with a copy of everything in the taxpayer package 

                           	
                      indicated above. 

             5.1.2.2.2.2. Address the envelope to the POA. Paperclip to package. 


          5.1.2.2.3. Package 3 - File package includes a copy of the complete POA 

                  package. 


          5.1.2.2.4. Submit all three packages to manager in the following order and 

                  paper clipped. 

             5.1.2.2.4.1. Package 1 – to taxpayer 

             5.1.2.2.4.2. Package 2 – to POA 

             5.1.2.2.4.3. Package 3 – file copy 


   5.1.3. Manager, Part 1 

      5.1.3.1. 	 Review letter and report for errors, omissions, typos, or other potential 

            problems. 

      5.1.3.2. Return to ETA for corrections or to prepare the 30 Day Letter package 


   5.1.4. Manager, Part 2 

      5.1.4.1. Review taxpayer package, if complete and without errors, sign the 

            Letter 950 as indicated below: 

                              Manager Name 

                              (Acting) Supervisory Attorney 


                 S
      5.1.4.2. 	 tamp the taxpayer Letter 950 as “original”; the POA L950 as “copy”; 

            and the copy of the POA L937 and Letter 950 as “file copy”. 

      5.1.4.3. 	 Mail the taxpayer package and the POA package using regular 

            mailing. Return the file copy to the ETA. 


5.2. 90 Day (stat notice) package must be submitted to Area Counsel with at least 60 

     days remaining on the statute for approval of the 90 Day Letter. Area Counsel will 

     return the case to you for forwarding to the Technical Services reviewer within 45 

     days of receipt. 


   5.2.1. Assemble 3 packages for the Pre-90 Day Letter Review by Area Counsel. 	 0 
  9
        Day package should be included in electronic case file on IMS. The ETA 

        should create a folder named 90 Day Letter under the administrative file for the 

        electronic copies. 


      5.2.1.1. Package 1 – to taxpayer 

         5.2.1.1.1. Letter 902 (1 original and 1 copy) 

         5.2.1.1.2. Letter 3614-A with explanation of the adjustments 

         5.2.1.1.3. Letter 4089-A 

                                                                                         20
           5.2.1.1.4. Form 890 

           5.2.1.1.5. Notice 1214 

        5.2.1.2. Package 2 – to POA 

           5.2.1.2.1. Letter 937 

           5.2.1.2.2. Copy of Package 1 to taxpayer 

        5.2.1.3. Package 3 – File copy

           5.2.1.3.1. Copy of Letter 937 

           5.2.1.3.2. Copy of Package 1 to taxpayer 

           5.2.1.3.3. Audit report 

           5.2.1.3.4. Form 886-A 




6. Reopening a Closed Case on IMS

  There will be occasions where a closed case will need to be reopened. To reopen a
  case, either the primary team coordinator or team manager needs to perform the
  following steps:

  6.1. Go to the IMS Team Website. 


     For employees, select ‘Navigate’ from the Top Line Menu in IMS and select ‘Team
     Web Site’.

     For managers, go directly to the Team Website through Internet Explorer.

  6.2. On the Team Website, click on Search Closed Cases; the closed case inventory will 

       be displayed. 


  6.3. Click on the link in the ‘Re-Open’ column for the case that you want to reopen. 


  6.4. A prompt will appear asking you if you are sure you want to reopen the case. Select 

       ‘Yes’. 


  6.5. Once the case is reopened, the employee will need to perform a Summary 

       Synchronization to see the reopened case in their case inventory. 


  6.6. Open the case and perform a Case Synchronization to re-populate the issues and 

       documents in the case. 





7. Reopening a Closed Case on Notebook



                                                                                           21
There will be occasions where a closed case will need to be reopened. To reopen a
case, perform the following steps:

7.1. Select “Existing Taxpayer Case” on the Main Menu.

7.2. Enter the last name of the decedent in the “Taxpayer Name:” line and click the
     check box for “Closed Case”. You may also check “Closed Case” to filter all closed
     cases and select the taxpayer needing to be reopened.

7.3. Select the “Filter Cases” button

7.4. Highlight the case and click on the “View Selected” button at the bottom.

7.5. Select “Close Case in Notebook” check box to remove the check mark and select
     “OK” on the pop-up window advising that the case has been reopened in Notebook.




                                                                                     22
Exhibit 1-1 - Disposal Codes (See IRM 4.4.12 for additional information)


Examined                                                                       Description
Disposal
 Codes
   01      No Change With Adjustments—(01 is considered agreed on the AIMS tables) Applies to no-change examined returns (even if a 30-day letter
           was issued) if there is an adjustment to the tax base data such as income or deduction items but no change in tax liability or refundable credits;
           or tax changes fell below the tolerance level in LEM IV. An audit report must accompany the case file. Note: An audit report is not required for
           most cases closed below the tax tolerance in the Campus TEFRA Function (CTF). An exception will be when the tax changes impact a prior or
           subsequent tax year (NOL, PAL, etc), or other adjustment years are above the tax tolerance. Item 41 is required if MFT = 30. The following are
           examples of no-change with adjustments examinations:
           a. Delinquent returns secured by the examiner, accepted as filed and forwarded to the campus for processing. This includes delinquent return
           pickups that result in a zero tax liability. If the TC 424 posted prior to the posting of the delinquent return, enter the balance due or refund
           amount, excluding penalties in Item 414. If an SFR has been processed the amounts from the secured return must be input through AIMS
           therefore DC 01 does not apply.

           b. Claims disallowed in full. (Agreed or not agreed)
           c. Income tax examination when taxpayers are issued an examination report Form 4549 and Letter 1156 (AO/IO) (see IRM 4.10)
           d. Flow through entities where no changes are made to the entities reported income, loss, deductions or credits reflected on the return or the
           owner(s) K-1 and (1) a delinquent return secured by examination, or (2) a balance sheet item is adjusted, or (3) a related return is adjusted as a
           result of the flow through examination (i.e.- adjustments to basis, at risk, or passive activity rules, taxable loan repayments or distributions, or
           adjustments to include the amount reported to the owner’s K-1).

           e. Estate or gift tax cases when offsetting adjustments result in no change in tax liability.
           f. Excise, trusts and estates, or employment tax cases when offsetting adjustments to tax base data and/or credits result in no change in tax
           liability.
           g. Disqualified 1120 DISC (obsolete)/I C-DISC election.

           h. Non-TEFRA (nontaxable) Flow through Entities - no change with adjustments should be utilized when no changes are made to the entity's
           ordinary income or loss or separately stated items reflected on the return or Schedule K-1 and an owner's return is adjusted as a result of the
           flow through examination. This would include: adjustments to basis, at-risk, or passive activity rules: taxable loan repayments; adjusting the
           owner's return to match the K-1 flow through amount(s).

   02      No Change (02 is considered no change on the AIMS tables)- Applies to examinations which do not necessitate the issuance of a report
           (other than the no-change report subject to area director's approval) where:




                                                                                                                                                     23

Examined                                                                       Description
Disposal
 Codes
           a. Taxable returns - there were no adjustments or no changes in tax liability for this return to: Tax, penalties, or refundable credits. This disposal
           code would also apply to changes only affecting the balance sheet, including constructive dividend issues, and any other related return pick ups
           where there were no tax liability adjustments to this return. Item 41 is required if MFT = 30. Block 405 & 408 of Form 5344 should be completed
           as appropriate.
           b. Flow through entities - no exam changes are made to the entities reported income, loss, deductions or credits reflected on the return or
           Schedule(s) K-1. (See DC 01 where adjustments are made to a related return.) Applies to TEFRA returns closed within 45 calendar days
           (including weekends and holidays) from the date the NBAP is issued to the TMP as well as those closed no change after 45 days where a no
           change FPAA is issued.
           c. Non-TEFRA (nontaxable) Flow through Entities should be utilized when the examination results in no changes to the entity or any owner.
           This would also be appropriate if you make adjustments to one of the owner’s returns as a result of compliance checks which are not related to
           the entity examination.
           d. Not valid with an Amount Claimed on the data base.
   03      Agreed (03 is considered agreed on the AIMS tables)- Applies only to returns if an agreement is received prior to the issuance of a 30-day or
           60-day letter. EGC's 5XXX will not use DC 03 for agreements as their first contact with the TP is the 30-day letter.
           Also applies to claims allowed in full and agreed claims partially allowed.
           Tax Compliance Officers: ALL agreed income tax cases closing from office examination will use Disposal Code 03 regardless of whether a
           Letter 915, Letter to Transmit Examination Report has been issued.
           Non-TEFRA (nontaxable) Flow through Entities: Applies to an agreed case if an agreement is obtained from all owners. If
           all signatures are received from the owners, you can close the case indicating on the entity report that agreement has been obtained from the
           owners.
   04      Agreed (04 is considered agreed in the AIMS tables)—Applies only to returns if an agreement is received after the issuance of a 30-day or
           60-day letter. Valid for partial assessment.
           Non-TEFRA (nontaxable) Flow Through Entities: Applies to an agreed case if an agreement is obtained from all owners. If
           all signatures are received from the owners, you can close the case indicating on the entity report that agreement has been obtained from the
           owners.
           TEFRA - Used for 1998 and subsequent TEFRA agreed cases (with or without penalties)
   07      Appealed (07 is considered appealed on the AIMS tables) - Returns closed to Appeals before issuance of a 90-day letter, FPAA or FSAA.

   08      Other (08 is considered agreed on the AIMS tables). NOTE: Disposal Code 08 is used on the Form 5344 generated by RGS on cases that
           are being closed out of the group as unagreed for the issuance of a stat notice. Technical Services requests that the groups use DC 08 for
           cases forwarded to Technical Services for the issuance of a stat notice. Technical Services will update the disposal to the correct code upon
           final closure. NOTE: Effective 3/2009 DC 08 is no longer used when closing SFR cases. Use the applicable disposal code.




                                                                                                                                                      24

Examined                                                                      Description
Disposal
 Codes
           Taxable Income Tax Returns
           — unagreed claims partially allowed
           — Form 906 agreement
           — partial assessment of employee share of FICA
           — any other manner of closing after issuance of a 30-day or 60-day letter.
           — TEFRA: Used for 1997 and prior TEFRA agreed cases (with or without penalties). Also used for AARs and stipulated decisions.
           Non-Taxable Income Tax Returns - Forms 1041, 1065 or 1120S
           — Use when the taxpayer did not sign a report or request an Appeals conference.
           Non-Income Tax Returns (MFT 01, 03, 10, etc.)
           — Use when the taxpayer did not sign a report or request an Appeals conference.
   09      Agreed (09 is considered agreed on the AIMS tables) - Applies only to returns if an agreement is received after the issuance of a 90-day,
           FPAA or FSAA letter. This includes an agreed Form 4549 if it is received AFTER the issuance of the 90-day letter. Not valid with MFT 01, 04,
           09–12, 17–19, 71, 72, or 80. Valid for partial agreement.
           SFR Case: DC 09 is only applicable when assessing "additional tax". If a return or agreement is received after an SFR posted, DC 08 is
           ALWAYS the correct disposal code. DC 09 is applicable if additional tax is being assessed, and the TP agrees after a SNOD is issued.
   10      Default (10 is considered default on the AIMS tables)—Applies only to returns if the taxpayer fails to file a petition or sign an agreement after
           the issuance of a 90-day letter, FPAA or FSAA. Not valid with MFT 01, 04, 09–12, 17–19, 71, 72, or 80. Valid for partial agreement.
   11      Petitioned (11 is considered appealed on the AIMS tables)—Applies only to returns if the taxpayer petitions tax court after the issuance of a
           90-day letter, FPAA or FSAA. Not valid with MFT 01, 04, 09–12, 17–19, 71, 72, or 80.
   12      Other (12 with an AOC is considered appealed on the AIMS tables/12 without an AOC is considered agreed on the AIMS tables) -
           Applies to any other manner of closing not identified above, such as:
           — direct transfers to Justice Department for settlement
           — interest only or penalty only cases. Enter $1 in Item 35.
           — barred assessments. Enter $1 in Item 35.
           — Audit reconsiderations if a new AIMS base was opened and the exam resulted in no change from the original examination - See IRM 4.13.4.3
           — Valid for partial assessments
           — offsetting assessments which result in zero tax. Enter $1 in Item 35.
           — use when a return is forwarded to Technical Services for fraud suspense
   13      Undeliverable 90-day letter, FPAA or FSAA (13 is considered default on the AIMS tables)—Applies to returns closed after the issuance of the
           90-day letter, FPAA or FSAA, if the above letter is returned as undeliverable. Valid for partial assessment.




                                                                                                                                                   25

  Non-                                                                          Description
Examined
Disposal
 Codes
   20      Accepted as Filed by Classification-All returns (other than DIF) accepted on manual classification. Also includes returns that were surveyed
           before classification. Not valid if source code is 02, 05, 10 or 12. If the current status code is 57 and the prior status is greater than 06
           (excluding 51) DC 20 will be blocked. If the current status code is greater than 06 (excluding 57) DC 21 will be blocked. Cannot be used if an
           amount claimed is on the data base.
   21      Accepted as Filed by Classification—DIF returns accepted during screening process on which questionable items are adequately substantiated
           or explained by schedules or attachments to the return or other specific reason. Also includes returns that were surveyed before classification. If
           the current status code is 57 and the prior status is greater than 06 (excluding 51) DC 21 will be blocked. If the current status code is greater
           than 06 (excluding 57) DC 21 will be blocked. Cannot be used if a Claim Amount is on the data base.
   22      Accepted as Filed by Classification—DIF returns accepted during screening process because the prior year examinations resulted in no change
           in tax liability and the current year return appears to have no tax potential. If the current status code is 57 and the prior status is greater than 06
           (excluding 51) DC 21 will be blocked. If the current status code is greater than 06 (excluding 57) DC 22 will be blocked. Cannot be used if a
           Claim Amount is on the data base.
   23      Accepted as Filed by Classification during the screening process using MACS (Midwest Automated Compliance System). Computer generated
           using ADDAPT, CDE or MACS. Only valid for returns NOT on AIMS.
   24      Accepted as Filed by Classification during the screening process using ADDAPT (Alternative DIF Delivery and Planning Tool). Computer
           generated using ADDAPT, CDE or MACS. Only valid for returns NOT on AIMS.
   25      Accepted as Filed by Classification—DIF returns accepted during screening process for referral to a state under Federal-State exchange
           program. For Use by Classification Only (i.e., Valid with status code less than 08, or status code 57). Cannot be used if a Claim Amount is
           on the data base.
   28      Non-Master File Closings—This code is used to close an account which was established on AIMS Non-Master File for temporary control
           purposes. This disposal code does not reverse TC 420 or 424 at Master File. Cannot be used if a Claim Amount is on the data base.
   29      Missing Return—Cannot be used if a Claim Amount is on the data base. For campus: used to indicate a DIF or other bulk ordered return that
           was not able to be located by the Files Unit. For Area Office: used when a return was NOT located by the Files Unit. Before DC 29 is used,
           alternatives such as retrieving an electronic print should be pursued.
   30      Transfers Out of Area—This code is used to transfer a return to another Area Office/campus location.




                                                                                                                                                           26

  Non-                                                                         Description
Examined
Disposal
 Codes
   31      Survey Before Assignment by group —A return selected for examination is considered as surveyed before assignment, if it is disposed of
           without contact with taxpayers, or their representatives, and before assignment to an examiner. No status code restrictions. Cannot be used if
           a Claim Amount is on the data base.
   32      Survey After Assignment —A return shall be reported as a survey after assignment if the examiner, after consideration of the return and without
           contact with taxpayers, or their representatives, and believes that an examination of the return would result in no material change in tax liability.
           No status code restriction. Cannot be used if a Claim Amount is on the data base.
   33      Error Accounts with No Returns—Used to remove records from the AIMS data base that were established in error. Example: wrong tax period
           established. Cannot be used if a Claim Amount is on the data base. No status code restrictions.
   34      Surveyed Claims—Allows overassessment without examination. An amount claimed must be present on the data base. (Not valid if Source
           Code is 31). DC 34 cases are not included in the examined or non-examined A-CIS data base.
   35      Surveyed—Excess Inventory—Return has audit potential but time prohibits starting the examination. Valid with Status Codes 07, 08 and 57.
           Cannot be used if a Claim Amount is on the data base.
   36      No return filed—taxpayer not liable/little or no tax due or P–5–133. Also use if limited resources are available. Generates a TC 590 (which
           means TP not liable this period) with a CC 52 IMF and CC 50 BMF. Cannot be used if a Claim Amount is on the data base.
   37      Taxpayer previously filed therefore no audit will take place. Generates a TC 594 CC 58. Cannot be used if a Claim Amount is on the data base.
   38      No return filed—taxpayer previously filed with spouse on joint return. Generates TC 594 CC 59. Cannot be used if a Claim Amount is on the
           data base.
   39      No return filed - taxpayer is no longer liable for the filing of a return. Generates TC 591 (which means TP no longer liable and closes the filing
           requirement) with a CC 50. Cannot be used if a Claim Amount is on the data base.
   40      No return filed—Unable to locate taxpayer. Generates TC 593 CC 57. Cannot be used if a Claim Amount is on the data base.
   41      No return filed—Taxpayer due a refund. Generates TC 590 CC 53 which means TP is due refund. Cannot be used if a Claim Amount is on the
           data base.
   42      Return filed—Unable to locate taxpayer. Does not generate TC 59X. Cannot be used if a Claim Amount is on the data base.
   45      Reference and Information Returns—Valid only if Source Code is 45. Cannot be used if a Claim Amount is on the data base.




                                                                                                                                                      27

Special                                                                     Description
Disposal
 Codes
  05       Closed agreed after 30-day letter with a conference. No longer valid.
  06       Protested after conference. No longer valid.
  15       You will only see this disposal code on IMFOLZ and on the Form 5546, Examination Return Charge-Out in the prior audit section. DC 15 is used
           when more than one Doc Code 47 disposal code is present for the same MFT and tax period in the Audit History Record at Master File.
           Example: Exam assesses a TC 300 DC 03 as a partial; the final closure has an additional assessment with a DC 10.
  16       You will only see this disposal code on IMFOLZ and on the Form 5546, Examination Return Charge-Out in the prior audit section. DC 16 is used
           when more than a Doc Code 47 and a Doc Code 51 disposal code is present for the same MFT and tax period in the Audit History Record at
           Master File. Example: Exam assesses a TC 300 DC 03 as a manual assessment; the final closure has an additional assessment with a DC 10.
           Master File will display DC 16 since more than one disposal code is present.
  17       Examination results were obtained from Audit History section of Master File (examination results shown may be inaccurate).
  18       Examination results and/or disposal code may be inaccurate because of computer processing failures. To determine the true disposal code,
           review the disposal code displayed on BMFOLA/IMFOLA/TXMODA.
  99       Other—Only to be used for:
  99       a. Information report returns accepted by PSP Support Manager or Examination Operations in the campus. (Valid with Source Code 60 only)
  99       b. The establishment of a linkage on PCS—you can identify these records if there is a TC 421 with DC 99 and a TC 424 with the same DLN
           present on Master File.
  99       c. Cannot be used if a Claim Amount is on the data base.




                                                                                                                                              28

Exhibit 1-2 - SAIN Codes for Estate Returns (Form 706 Only)

 SAIN Code                                       Description
EG080          Administrative Issue
EG081          Referral to Specialists
EG706-01       2032A Election Special-Use Valuation
EG706-02       6166 Election Installment Election
EG706-03       Page 1 Adjustments
EG706-04       Schedule A: Real Estate
EG706-05       Schedule B: Stocks and Bonds
EG706-06       Schedule C: Mortgages, Notes, Cash
EG706-07       Schedule D: Insurance on the Decedent's Life
EG706-08       Schedule E: Jointly Owned Property
EG706-09       Schedule F: Other Miscellaneous Property
EG706-10       Schedule G: Transfers during Decedent's Life
EG706-11       Schedule H: Powers of Appointment
EG706-12       Schedule I: Annuities
EG706-13       Schedule J: Funeral Expenses
EG706-14       Schedule J: Executors' commissions
EG706-15       Schedule J: Attorney fees
EG706-16       Schedule J: Accountant fees
EG706-17       Schedule J: Miscellaneous expenses incurred in Administering Property Subject
               to Claims
EG706-18       Schedule K-Debts of the Decedent
EG706-19       Schedule K-Mortgages and Liens
EG706-20       Schedule L-Net Losses During Administration
EG706-21       Schedule L-Expenses Incurred in Administering Property Not Subject to Claims
EG706-22       Schedule M-Bequests, etc., to Surviving Spouse - QTIP Property
EG706-23       Schedule M-Bequests, etc., to Surviving Spouse - All other property (Not QTIP)
EG706-24       Schedule O-Charitable, Public, and Similar Gifts and Bequests
EG706-25       Schedule P-Credit for Foreign Death Taxes
EG706-26       Schedule Q-Credit for Tax on Prior Transfers
EG706-27       Schedule R-Generation-Skipping Transfer Tax Part 1. GST Exemption
               Reconciliation (Section 2631) and Section 2652(a)(3) (Special QTIP) Election
EG706-28       Schedule R-Generation-Skipping Transfer Tax Part 2. Direct Skips Where the
               Property Interests Transferred Bear the GST Tax on the Direct Skips
EG706-29       Schedule R-Generation-Skipping Transfer Tax Part 3. Direct Skips Where the
               Property Interests Transferred Do Not Bear the GST Tax on the Direct Skips
EG706-30       Family Limited Partnerships or Limited Liability Corporations
EG706-31       Closely Held Corporations
EG706-32       State Death Tax Deduction
EG706-33       State Death Tax Credit
EG706-34       Adjusted Taxable Gifts
EG706-35       Total Gift Tax Paid or Payable
EG706-36       Adjustments to Unified Credit
EG706-37       Alternate Valuation Election
EG706-38       Election to postpone taxes attributable to a reversionary or remainder interest per
               IRC 6163
EG706-39       Section 2044 property (QTIP)
EG706-40       Excluded Life Insurance
EG706-41       Qualified Conservation Easement Exclusion
EG706-42       Other - Miscellaneous Issues

                                                                                           29

Exhibit 1-3 - SAIN Codes for Estate Returns (Not Form 706) Use for Form 706A,
706NA, etc

 SAIN Code                                        Description
EG080         Administrative Issue
EG081         Referral to Specialists
EG706A-01     Schedule A. Disposition of Specially Valued Property or Cessation of Qualified Use
EG706A-02     Schedule B. Involuntary Conversions
EG706A-03     Schedule B. Exchanges
EG706A-04     Schedule C. Dispositions to Family Members of the Qualified Heir
EG706B-01     Recapitulation
EG706B-02     Tax Calculation
EG706D-01     Schedule A. Disposition of Qualified Family-Owned Business Interest, Failure to
              Materially Participate, or Disqualifying Act (Taxable Under Section 2057 (f)(1))
EG706D-02     Schedule B. Involuntary Conversions
EG706D-03     Schedule B. Exchanges
EG706D-04     Schedule C. Nontaxable Transfers
EG706GSD-01   Part II - Distributions
EG706GSD-02   Tax Computation - Adjusted allowable expenses
EG706GSD-03   Tax Computation - Maximum federal estate tax rate
EG706GSD-04   Tax Computation - Generation-skipping transfer tax
EG706GST-01   Schedule A-Taxable Terminations
EG706GST-02   Schedule B(1)-General Trust Debts, Expenses, and Taxes
EG706GST-03   Schedule B(2)-Specific Termination-Related Debts, Expenses, and Taxes
EG706NA-01    Schedule A. Gross Estate in the United States
EG706NA-02    Schedule B. Taxable Estate
EG706NA-03    Total taxable gifts of tangible or intangible property located in the U.S., transferred
              (directly or indirectly) by the decedent after December 31, 1976, and not included in
              the gross estate
EG706NA-04    Unified credit
EG706NA-05    Other credits
EG706NA-06    Credit for tax on prior transfers
EG706NA-07    Generation-skipping transfer tax
EG706NA-08    Funeral expenses, administration expenses, decedent’s debts, mortgages and liens,
              and losses during administration
EG706NA-09    Deduction for expenses, claims, etc
EG706NA-10    Charitable deduction
EG706NA-11    Marital deduction
EG706NA-12    State death tax deduction
EG706QDT-01   Part II - Elections by the Trustee/Designated Filer
EG706QDT-02   Schedule A - Part I - Summary of Prior Taxable Distributions
EG706QDT-03   Schedule A - Part II - Summary of Current Taxable Distributions
EG706QDT-04   Schedule A - Part III - Summary of Property Remaining in QDOTs at Death of
              Surviving Spouse
EG706QDT-05   Schedule A - Part IV - Summary of Marital and Charitable Deductions
EG706QDT-06   Schedule B - Part II - Taxable Distributions From Prior Years
EG706QDT-07   Schedule B - Part III - Current Taxable Distributions
EG706QDT-08   Schedule B - Part IV - Taxable Property in Trust at Death of Surviving Spouse
EG706QDT-09   Schedule B - Part V - Marital Deductions
EG706QDT-10   Schedule B - Part VI - Charitable Deductions



                                                                                           30

Exhibit 1-4 - SAIN Codes for Gift Returns

  SAIN Code                                       Description
EG080             Administrative Issue
EG081             Referral to Specialists
EG709-01          Outright cash gift
EG709-02          Outright cash gift to trust
EG709-03          Non-taxable transfer
EG709-04          Forgiveness of debt
EG709-05          Marketable securities
EG709-06          Qualified Personal Residence Trust
EG709-07          Charitable deduction
EG709-08          Marital deduction
EG709-09          Personal property
EG709-10          Family Limited Partnership or Limited Liability Corporation interests
EG709-11          GRT (Grantor retained trust)
EG709-12          Closely held stock
EG709-13          Real property
EG709-14          Insurance trust
EG709-15          Generation Skipping Transfer Tax transfer
EG709-16          Unified credit adjustment
EG709-17          Math error
EG709-18          Gifts from prior periods
EG709-19          Omitted gifts
EG709-20          Gifts for less that full and adequate consideration
EG709-21          Gifts made by Spouse
EG709-22          Annual Exclusions
EG709-23          Credit for Foreign Gift Taxes
EG709-24          Percentage of amount allowed as a specific exemption for gifts made after
                  September 8,1976, and before January 1, 1977




                                                                                         31

Exhibit 1-5 - SAIN Codes for Fiduciary Returns

  SAIN Code                                        Description
EG080            Administrative Issue
EG081            Referral to Specialists
EG1041-01        Interest income
EG1041-02        Total ordinary dividends
EG1041-03        Qualified dividends allocable to: (1) Beneficiaries
EG1041-04        Qualified dividends allocable to: (2) Estate or trust
EG1041-05        Business income or (loss)
EG1041-06        Capital gain or (loss)
EG1041-07        Rents, royalties, partnerships, other estates and trusts, etc.
EG1041-08        Farm income or (loss)
EG1041-09        Ordinary gain or (loss)
EG1041-10        Other income
EG1041-11        Interest
EG1041-12        Taxes
EG1041-13        Fiduciary fees
EG1041-14        Charitable deduction
EG1041-15        Attorney, accountant, and return preparer fees
EG1041-16        Other deductions not subject to the 2% floor
EG1041-17        Allowable miscellaneous itemized deductions subject to the 2% floor
EG1041-18        Income distribution deduction
EG1041-19        Estate tax deduction including certain generation-skipping taxes
EG1041-20        Exemption
EG1041-21        Taxable income
EG1041-22        Estimated tax payments allocated to beneficiaries
EG1041-23        Federal income tax withheld
EG1041-24        Estimated tax penalty




                                                                                       32

Exhibit 1-6 - Closing Letters

    Letter                                   Letter Name
   Number
Letter 627       Estate Tax Closing Document Letter
Letter 569       Claim Disallowance Letter
Letter 590       No-Change Final Letter
Letter 902       Notice of Deficiency
Letter 920       Notification Letter for Agreed Partnership, Fiduciary and S
                 Corporation (Non TEFRA) Cases

Letter 937       Transmittal Letter for Power of Attorney
Letter 950       - Unagreed, straight deficiency, straight overassessment or mixed
                 deficiency and overassessment
Letter 950G      Contact Letter to Explain Appeals Rights Per IRC 7477
Letter 950H      30 Day Letter - Intent to Terminate IRC 6166 Election
Letter 950I      30 Day Letter - Intent to Terminate IRC 6166 Election
Letter 905J      Preliminary Section 6166 Determination
Letter 950K      Preliminary Internal Revenue Code section 6166 Determination
                 Letter
Letter 1024      Return Accepted as Filed Final Letter
Letter 1156      Change, No-Change Final Letter
Letter 3569      Final Notice of Redetermination of Value as Provided in IRC section
                 7477
Letter 3607      Agreed Examination Changes
Letter 3614-A    Mentioned above in unagreed stat notice but cannot find it on Forms
                 pub, i.e. says it’s obsolete
Letter 4089-A    Mentioned above in unagreed stat notice but cannot find it on Forms
                 pub, i.e. says it’s obsolete

NOTE: No Closing Letter On Any Gift Tax Return - No Change, Agreed, Non-
Agreed.

        Signature authority can be found in IRM 4.25.1.5.5.




                                                                               33

Exhibit 1-7 - Reason/Reference Codes for Form 5344

 Transaction     Penalty Reason   IRC Code                    Penalty Description
    Code         Code (Item 15)    Section
  (Item 12)
     160                             6651      Failure to File Penalty
     161                             6651      Failure to File Penalty
     240              680          6662( c )   Negligence or disregard of the rules and regulations
     240              680          6662(d)     Substantial understatement
     240              680          6662 (e)    Substantial valuation misstatement
     240              680          6662 (f)    Substantial overstatement of pension liabilities
     240              680          6662(g)     Substantial estate or gift tax valuation
                                               understatement
     240              680          6662(h)     Gross Valuation Misstatement
     240              681           6662A      Reportable transaction understatement penalty
     241              680          6662( c )   Negligence or Disregard of the rules and regulations
     241              680          6662(d)     Substantial understatement
     241              680          6662 (e)    Substantial valuation misstatement
     241              680          6662 (f)    Substantial overstatement of pension liabilities
     241              680          6662(g)     Substantial estate or gift tax valuation
                                               understatement
     241              680           6662(h)    Gross valuation misstatement
     241              681           6662A      Reportable transaction understatement penalty
     320                             6663      Fraud Penalty
     321                             6663      Fraud Penalty


     340                                       Interest
     341                                       Interest Abatement
     300                                       Deficiency
     301                                       Deficiency Overassessment

ITEM REFERENCE NUMBERS (IREF) are used to update certain informational fields on the Master
File and they do not adjust tax, credits or exam results.
                  074                               IREF GST Tax (MFT 51, 52, 77, 78)
                  075                               Section 4981A Tax
                  076                               Estate Tax
                  077                               Gift Tax




                                                                                      34

Exhibit 1-8 - Appeals Codes for Form 5344

These codes identify the Appeals office with AIMS control of the case. These
codes are input on Form 5344 with CC AMCLS when Compliance closes cases
to Appeals. Use of 1XX Appeals Office code denotes a Nondocketed closure to
Appeals and a 2XX Appeals Office code denotes a Docketed closure to Appeals.




                            APPEALS OFFICE CODES
PBC Nondocketed/           AOC              Address                         Phone/FAX
     Docketed
      Appeals
       Code
614   114          Ft. Lauderdale/Miami   1000 S. Pine Island           954-423-7941
                                          Suite 350
                                          Plantation, FL 33324-3904     954-423-7969 Fax


                                          Designated States:
                                          Alabama, Connecticut, Delaware, DC, Florida,
                                          Georgia, Kentucky, Louisiana, Maine, Maryland,
                                          Massachusetts, Mississippi, New Hampshire, New
                                          Jersey, New York, North Carolina, Ohio,
                                          Pennsylvania, Rhode Island, South Carolina,
                                          Tennessee, Vermont, Virginia, West Virginia,
                                          International, US Possessions/Territory



660   160          Los Angeles            300 N. Los Angeles St.        213-576-4810
                                          MS-LA 8000
                                          Los Angeles, CA 90012         213-578-4803 Fax


                                          Designated States:
                                          Alaska, Arizona, Arkansas, California, Colorado,
                                          Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
                                          Michigan, Minnesota, Missouri, Montana,
                                          Nebraska, Nevada, New Mexico, North Dakota,
                                          Oklahoma, Oregon, South Dakota, Texas, Utah,
                                          Washington, Wisconsin, Wyoming.




                                                                                      35

Exhibit 1-9 – Project Returns that Need to be Forwarded to PSP

                           Tracking Codes
Research Projects:
  6411     Estate Non-Filer Research Project Phase III
  7730     Estate Non-Filer Research Project
  7731     Gift Non-Filer (Trust) Research Project
  7733     Non-Filer (Referral/Informants) (SEC Insider Transfers)
  9506     Gift Non-Compliance (Erroneous Total Taxable Gifts) (Line
           3 Error, Underreporting)
Fed/State:
  7523     Real Estate Gift Tax Non-Filer CIP
  7585     New York Gift Non-Filer CIP
  7767     Wisconsin Non-Filers CIP
CIPs:
  6123     Offshore Voluntary Disclosure (UBS)
  6302     Fed/Fed SEC Form 5 CIP
  6426     Offshore UBS Treaty
  7766     Gift GRATs CIP




                                                                       36
Exhibit 1-10 - Case Assembly in Notebook
Exhibit 4.4.1-12 Case Assembly (04-29-2005)
Cases Sent to Centralized Case Processing

1. Forms affixed to outside of case folder:
       a. Form 3210, Document Transmittal
       b. Form 895, Notice of Statute Expiration, is placed on top of all other papers
       d. Form 3198, Special Handling Notice
       e. Form 8278, Computation and Assessment of Misc. Penalties.

2. Forms attached to inside of case folder:
       a. Address Change sheet - Form 2363 or Form 3198.
       b. Copy of Command Code AMDISA, print; and
       c. Form 5346, Examination Information Report.

3. Forms and other documents enclosed in case folder:
        a. Current transcript generated within 2 weeks from date of submission of case for
closing
         b. Waiver and acceptance forms:
                1. Form 890, Waiver of Restrictions on Assessment and Collection of
                         Deficiency in Tax and Acceptance of Overassessment;
                2. Form 2297, Waiver of Statutory Notification of Claim
                        Disallowance;
                3. Form 3363, Acceptance of Proposed Disallowance of Claim for
                        Refund or Credit.
        c. Taxpayer's protest and correspondence in unagreed cases;
        d. Examination report -- In multiple year examinations, a copy of the closing examination
                report is to be included in each case file for every year examined.
        e. Original tax return(s) and related attachments (see 4 below),
                CC RTVUE/BRTVU or MACS PRINTS -- NON-DOCKETED CASES ONLY, or
                CC ESTAB/ELFREQ prints reflecting the requesting of the original return;
        f. Form 5546, Examination Charge-Out
        g. Examination Planning and Work paper Index, This is the first page
        h. Work papers, Correspondence and Exhibits – following the order on the Index

4. Forms and documents to be attached to tax returns:
       a. Form 5344, Examination Closing Record
       b. Form 3244-A, Payment Posting Voucher -- Examination, should have part 2 stapled to
               the face of the return;
       c. Statute Extension Forms: An executed copy should be stapled to the reverse of the
               first page of the tax return on top of any other attached forms;
               1. Form 872, Consent to Extend the Time to Assess Tax;
               2. Form 872-A, Special Consent Fixing Period of Limitation upon Assessment of
                        Income Tax;
       d. Form 56, Notice concerning Fiduciary Relationship, should be stapled to the reverse
               of the first page of the tax return;
       e. Form 2848, Power of Attorney, should be stapled to the reverse of the first page of the
               tax return;
       f. Form 843, amended returns/claims;
       g. A photocopy of requests (e.g., Form 5345, Form 5346, or Form 5354) using the
          following source codes must be attached to the returns as a permanent record:
               1. Source Code 45 -- reference and information return


                                                                                         37


				
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