4.8.8. Miscellaneous Responsibilities

(1) In July 2018 Technical Services area's four territories were realigned within the following four Field Examination Areas: Central Area-TS East, South Atlantic Area-TS Legacy, Midwest Area-TS Midstates and Western Area-TS West. This IRM includes duties and responsibilities assigned to TS territories, which are not addressed elsewhere in this manual. IRM 4.8.8, Miscellaneous Responsibilities will be utilized by TS technical personnel in SB/SE for accomplishing the objective of TS function. TS serves as the overall closing function for Field Examination cases and specifically for the various topics as listed in IRM 4.8.8.1 (1).

(1) The Director, of SB/SE Examination Deputy Operations, Field Examination- is the Executive responsible for providing policy and guidance to field Area Directors with Technical Services employees.

(2) Area Directors in Field Examination with Technical Services territories have executive responsibilities controlling inventory and case processing in their respective TS territories. The detailed responsibilities are outlined in this IRM.

(1) This list provides the acronyms and definitions used in this IRM.

(1) Generally, TS reviews all Small Business and Self-Employed (SB/SE) closing agreements before obtaining the taxpayer's signature.

(2) After review, TS forwards the closing agreement to area counsel for approval of both the form and language used.

(3) Pro-Forma Form 906 Templates have been created for some situations.

1. AT Schemes - The pro-forma closing agreement language relates to a specific AT scheme and it is developed by counsel. The Form 906 developed by Counsel is reviewed by Technical Services. The technical services reviewer performs the steps listed in paragraph (4) below. Since counsel is involved in drafting the agreement, it is not necessary to obtain separate counsel review and concurrence, as long as the pro-forma language is not modified. When pro-forma closing agreements are used, it is probable the area technical services reviewer will not receive the closing agreement for review until after the taxpayer signatures are obtained.

2. VDP cases - Form 906 templates are a work in progress and should only be used as a starting point. Examiners must customize the Form 906 to fit the specific facts and circumstance of the disclosure. Examiners will collaborate with their Analyst and Counsel when drafting. Two mandatory Checksheets for Examiners, Managers, Counsel and TS have been created to use in documenting each step of the review Form 906. Refer to the VDP SharePoint for the two mandatory Checksheets and for more VDP information. The Checksheets are also outlined in the updated Field Examiner Guide Paper on the VDP SharePoint site.

(4) Prior to taxpayer signature, the reviewer:

1. Ensures it will be advantageous to have the matter permanently and conclusively closed, or the taxpayer can show good and sufficient reasons for an agreement and the government will sustain no disadvantage.

2. Ensures the determined matters are stated in terms that can reasonably lead to only one interpretation.

3. Gives consideration to the impact a specific matter determination will have on other tax periods or other related cases.

4. Verifies that the examiner's report adequately includes all significant factors (see IRM 8.13.1).

5. Ensures the closing agreement is not dependent on the taxpayer's promise to perform a future act.

6. Ensures the correct closing agreement form is used.

7. Secures area counsel approval as required. Once approved, TS forwards the closing agreement to obtain the taxpayer's signature, either to the examiner working the case or directly to the taxpayer.

(5) After the closing agreement is executed, the reviewer will do the following:

1. Ensure the closing agreement is properly executed, including the three required original copies pursuant to IRM 8.13.1.3.15, Number of Copies—One Taxpayer or Joint Return Agreements.

2. Ensure the reverse side of each original closing agreement reflects the dated signatures of both the receiving and reviewing officers.

3. Write the following in the top margin of the front page of the tax return: "Agreement under IRC 7121, years affected ___. Closing agreement attached to the return for the taxable period ended ___(latest return in file)."

4. Date stamp each executed copy of the closing agreement (on the reverse side) and forwards it to the appropriate delegated officer for signature.

5. Attach one copy of the original closing agreement signed by the delegated official to the reverse side of the first page of the tax return.

6. Forward the executed duplicate original of the closing agreement to the taxpayer along with Letter 1595-E, Exam Executed Closing Agreement Transmittal Letter. See IRM Exhibit 8.13.1-22 , Sample Letter Sending Taxpayer Copy of Closing Agreement—Letter 1595.

7. Attach the third original copy to the workpapers with a copy of Letter 1595–E and Form 4222, Closing Agreement Checklist.

8. Make a copy of the closing agreement and mark it as "Retention Copy." If a subsequent tax year is affected by the closing agreement, forward a copy with Form 5346, Examination Information Report, to Planning and Special Programs (PSP).

9. Forward the closing agreement, RAR, and any applicable workpapers for suspense, as appropriate.

10. Immediately forward a copy of the executed closing agreement to the Campus Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) Function (CTF) if the closing agreement is for a TEFRA entity.

11. E-Fax Form 3177 with TC 971 AC 256 and agreement date using the following link for contact information: CCP Exam Efax Numbers.

(1) The TS reviewer will do the following:

1. Ensure there is sufficient time remaining on the statute of limitations for the PHC tax issues (twelve months recommended to complete procedures).

   Note: Without an executed Form 2198, Determination of Liability for Personal Holding Company Tax, the case is unagreed and should be returned to the group for a 30 day letter (if sufficient time remains on the statute) or should be forwarded for a statutory notice of deficiency.

2. Ensure the file includes a signed waiver (Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment) from the taxpayer for all PHC and non-PHC adjustments.

3. Ensure the file includes a Form 2198 (informal) or Form 866, Agreement as to Final Determination of Tax Liability (closing agreement under IRC 7121), if the taxpayer indicated an intention to make a deficiency dividend.

(1) The TS reviewer will do the following:

1. Reviews Form 2198 and signs, on behalf of Commissioner, as outlined in SBSE Delegation Order 4-1-1.

2. Follow the closing agreement procedures if Form 866 is used.

3. Attach Form 2198 to the return of the latest taxable year covered by the closing agreement.

4. Forward Form 870 for non-PHC issues for partial assessment with instructions to return the documents to TS.

5. Prepare Letter 1152, Agreement Transmittal for Signed Personal Holding Company/Determination of Liability for Personal Holding Company Tax. Sends three copies of the executed Form 2198 and three copies of Form 976, Claim for Deficiency Dividends Deductions by a Personal Holding Company, Regulated Investment Company, or Real Estate Investment Trust, with Letter 1152 by registered or certified mail. The registered or certified receipt is maintained in the case file as evidence of the mailing date ("date of determination").

6. Place the case in suspense until the earlier of receipt of Form 976 from the taxpayer or 120 days from the "date of determination."

7. Date stamp the claim if Form 976 is received and return the case to the examiner with the following six instructions provided in each of the following notes:

   Note: 1. Verify information on Form 976.

   Note: 2. Prepare examination report per IRM Exhibit 4.10.8-8, Sample Form 4549-A Personal Holding Company—Page 1.

   Reminder: Report Generation Software (RGS) does not reflect a specific credit for a Deficiency Dividend Deduction. The examiner should select "Prepayment Credits" in issue setup for the offset to the PHC tax. The examiner should include a statement in "Remarks" to identify the Prepayment Credit as a Deficiency Dividend Deduction and to note restricted interest is applicable.

   Note: 3. Ensure Transaction Code (TC) 300 on the Form 5344, Examination Closing Record, is accurate and Reference Code 321 appears on Line 15 of Form 5344.

   Reminder: The Reference Code 321 will appear on a transcript after the assessment has been made to explain the reason for the restricted interest when a TC 300 of zero has posted.

   Note: 4. Prepare Form 3198, Deficiency Dividend Deduction Case Transmittal, for restricted interest purposes. See IRM Exhibit 4.10.8-9, Examination of Returns, Report Writing, Sample Form 3198 - Deficiency Dividend Deduction Case Transmittal

   Note: 5. Annotate page one of Form 3198, Special Handling Notice for Examination Case Processing, "Forward to Technical Services". Check the box for "Personal Holding Companies." Annotate page two of Form 3198 "Special/Restricted Interest Features". Check the box for "Other Code Section," "Section 547 Restricted Interest Computation".

   Note: 6. Return case to TS for final review.

8. Return the case to the examiner for claim disallowance if Form 976 is filed after the 120 day period, although the reviewer may issue the claim disallowance to expedite case processing.

9. Forward the file for closure and assessment if Form 976 is not received after the 120 day period.

   Note: If the taxpayer executed a Form 2198, these procedures should be followed even if taxpayer stated no Form 976 would be filed.

(1) A "claim" and "request for abatement" should not be used interchangeably. However, the process used by TS is the same regardless of whether it is a paid assessment (claim for refund) or an unpaid assessment (request for abatement).

(2) Interest abatement cases may come from various sources such as the campus, the field, the taxpayer advocate office, or directly from a taxpayer or representative.

(3) For purposes of this section only, the terms "claim" and "request for abatement" are used interchangeably, and the process is the same regardless of whether it is a paid assessment (claim for refund) or an unpaid assessment (request for abatement). There is no authority to abate unagreed, unassessed interest.

(4) The claims or requests for abatement will only be worked by the TS interest abatement coordinator (IAC) if there is a TC 300 on the module and an examination indicator reflecting field (RA, TA, or TCO) examination (EGC 1XXX or 2XXX), AND are one of the following:

1. Claims or requests for abatement which allege a ministerial or managerial error or delay occurred during the course of an examination or an appeal of an examination, for both open examinations and closed examinations. These are known as IRC 6404(e)(1) claims.

Note: For both open and closed examinations, the majority of cases worked by the TS IAC will relate to IRC 6404(e)(1). Interest abatement claims (interest has been paid) or requests for interest abatement (interest has not been paid) on assessed accounts, both unpaid and fully paid, will be considered with regard to IRC 6404(e)(1).

2. Claims or requests for abatement citing the "good faith" exception to IRC 6404(g).Reg. 301.6404–4, 26 CFR Treas. Reg. 301.6404-4.

(5) Claims or requests for abatement that require coordination with other areas, such as claims alleging error or delay in both a collection matter and an examination or appeals matter, should be discussed with the Collection IAC and TS IAC to determine which function should work the claim.

(6) Types of claims or requests for abatement NOT worked by the TS IAC include the following:

1. An error was made in the computation of interest (IRC 6404(a)).

2. An error was made in the assessment of interest (IRC 6404(a)).

3. An erroneous refund was made (IRC 6404(e)(2)).

4. Erroneous written advice was given (IRC 6404(f)).

5. An error was made in the application of suspension interest under IRC 6404(g).

   Note: These claims generally do not cite the "good faith" exception

   .

6. The taxpayer was affected by a federally declared disaster area (IRC 6404(i) and IRC 7508A).

7. The taxpayer was in a combat zone (IRC 7508).

(7) A listing of IACs can be found on the Interest Abatement Contacts link.

(1) Taxpayers may request interest abatement during an ongoing examination. The examiner must take the following actions prior to sending the interest abatement case to TS:

1. Secured a completed Form 843, Claim for Refund and Request for Abatement, from the taxpayer.

Note: In the case of LB&I, a letter requesting net rate netting may be used in place of the Form 843. See IRM 4.10.26.4, Receiving a Request(s) for Net Rate Netting.

2. Documented Form 4318-OA, Examination Workpapers Index—Office Audit / Form 4318, Examination Workpapers Index, and Form 9984, Examining Officer's Activity Record, regarding the filing of the claim.

Note: In the case of LB&I, Form 4318-OA/ Form 4318 is not used. The claims or requests for abatement will be located under SAIN 060.

3. Attached an explanation of the facts surrounding the claim or request for abatement to the Form 843.

4. Contacted the TS IAC to discuss the closure of the examination file and arranged to provide the IAC with a copy of pertinent information from the administrative file including a copy of the Form 843 with an explanation of the facts surrounding the claim, a copy of the Form 9984, a copy of the report, and any other pertinent information or correspondence that may impact the abatement determination.

(2) At the conclusion of the examination, the examiner will mark Form 3198 directing Centralized Case Processing (CCP) to charge the case back to the applicable local TS group manager.

(3) The interest abatement claim will be addressed after the examination case is closed and the tax, penalty (if applicable), and interest are assessed.

(1) Interest abatement claims are commonly received from the campus after the examination has been completed, the tax assessed, and the case file closed. These claims are generally not on Audit Information Management System (AIMS) or on RGS.

(2) When the campus receives a claim for interest abatement, IRM 4.19.11.2, Examination Classification of Work, Abatement of Interest, states that the campus will complete the following:

1. Obtained the historical examination/appeal file(s) for all years involved in the examination, and

2. Make a determination as to where the case should be worked based on where the alleged error or delay occurred.

(3) If the campus determines the case should be worked in TS in accordance with IRM 4.8.8.5.1 above, the campus will forward the claim or request for interest abatement and historical file(s) to the TS IAC's group manager.

(1) When a taxpayer contacts Taxpayer Advocate Service (TAS) for resolution of their claim and TAS determines action is required by TS, TAS will send an operations assistance request (OAR) along with supporting documentation to the designated TS Functional Liaison contact who will forward the OAR to the appropriated TS group to work timely. If the assigned TS reviewer determines additional information is required, he or she will request the information from the assigned TAS employee. The TS reviewer may return the OAR if the information is not received timely. The service level agreement (SLA) between the National Taxpayer Advocate and the SB/SE Commissioner outlines the guidelines and timeframes for the OAR process and can be located on SB/SE's home page. See the Service Level Agreement . OARs routed to the incorrect TS group should be returned to TAS per the SLA.

(1) Claims and requests for interest abatement can be received from functions other than SB/SE examination groups, campus, or TAS. Claims can originate in Collection groups, as well as in LB&I groups.

(2) If claims are received without the original examination case file and it is determined that the file is necessary, the case file should be requested using ESTAB procedures found in IRM 4.7.10.5.3, Processing ESTAB and Special Search Requests.

(1) If the original examination case file cannot be obtained, an attempt to reconstruct the file using the Form 843 data, transcripts, and information gathered from contact with the examiner and the Independent Office o Appeals. If a copy of Appeals’ case activity record (CAR) is needed, contact the Appeals Account Resolution (AARS) Team for a copy of the CAR. For more information, visit the AARS Customer Service page. The examiner’s oral testimony and time charged on the case (examiner's technical time report automated through the ERCS program) can provide insight into their activities during the alleged periods of delay. An OAR from TAS should be useful in writing a recommendation. If the OAR does not contain the necessary information, the IAC may request TAS provide additional information that outlines the delay.

(2) For claims or requests for abatement on partners and or shareholders with respect to flow through adjustments where the alleged error or delay occurred during the partnership and or S-corporation examination, the historical investor files and the flow through entity files should be secured if necessary. If the alleged error or delay occurred during the assessment process, the claim or request for interest abatement should be forwarded to the Campus IAC to be addressed.

(3) If the claim involves an alleged delay or error that occurred in the Collection Division or Wage and Investment—Field Assistance Division, the claim should be referred to the Collection Advisory IAC.

(1) Refer to IRM 20.2.7, Interest, Abatement and Suspension of Debit Interest, for additional information.

(2) The TS IAC will record the time spent on interest abatement cases on Form 9984, and charge time directly to the case. Time spent performing duties that cannot be charged directly to a particular case is charged to Activity Code 587 with Second Segment Code 008.

(1) Technical Services is responsible for granting or denying extensions and for following up on taxpayers who fail to notify the Service if they have replaced the property or amended their returns.

(2) The request for extension of the replacement period should be reviewed to ensure the taxpayer has provided all the necessary information as follows:

• Name, address, and taxpayer identification number of the taxpayer

• Legal descriptions of property converted

• Date property was converted

• Adjusted basis of converted property

• Date(s) and amount(s) of payment(s) received

• Copy of return that related to the deferral of the gain

• Statement of action taken to replace the property

(3) The taxpayer has 2 years to replace personal property. The taxpayer has 3 years to replace real property (not including stock in trade or other property held primarily for sale) held for productive use in trade or business or for investment.

(4) The taxpayer must demonstrate reasonable cause for not replacing the converted property within the original required time period. Refer to Rev. Rul. 60-69, 1960-1 C.B. 294. Also, see Treas. Reg. 1.1033(a)-2(c)(3)(i) and (ii). Refer to SB/SE 1-23-33, Authority to Grant Extensions of Time to Replace Involuntarily Converted Property Under Section 1033 of the Internal Revenue, for authority to issue letters.

(5) If the extension request is granted, Letter 1039, Extension Granted to Replace Involuntarily Converted Property, is sent to the taxpayer to advise him or her an extension has been granted. Generally, extensions are not granted for more than 1 year. The taxpayer must notify the Service when the property is replaced.

(6) If the taxpayer has not provided enough information, the reviewer should request additional information from the taxpayer.

(7) If the extension request is not granted, the taxpayer should be notified and provided the reason(s) why. Extensions can be denied if the request is premature.

(8) Follow-up is required as noted below:

1. When the taxpayer notifies the IRS the property has been replaced, the following actions should be taken as explained in this example:

   Example: If there is a gain to report, the reviewer should monitor the case to ensure an amended return is filed. If an amended return is not filed, prepare Form 5346 and forward to PSP.

   Note: If the IRC 6501(a) three year statute has expired, the amended return will not post and a refund will be generated as explained in this example:

   Example: On a yearly basis, send follow-up Letter 1954, Involuntary Conversion Follow-up Letter, to taxpayers whose replacement periods have expired and who have not notified the IRS replacement property has been acquired. For taxpayers who do not respond to Letter 1954, prepare Form 5346 and forward it to PSP.

(9) The statute of limitations for the year in which gain is deferred remains open until 3 years after notification is received from the taxpayer indicating the replacement is completed or notification of an intention not to replace. See Treas. Reg 1.1033(a)-2 for method of notification. The statute remains open if the taxpayer does not complete the replacement within the time allowed. Alpha Code "RR" is used when the taxpayer has not notified the Service of the replacement. The correct statute is reflected if the notification has been received.

(1) The TS group manager will designate a jeopardy/termination reviewer. The jeopardy/termination reviewer should be a reviewer with prior jeopardy/termination experience and or knowledge.

(2) The jeopardy/termination reviewer is responsible for all of the following:

1. Assisting field examination with developing and preparing jeopardy/termination assessments. Refer to IRM 4.15.1 , Jeopardy and Termination Examination Procedures, for complete examination procedures.

2. Reviewing possible jeopardy/termination cases to determine if a case meets jeopardy/termination criteria. See IRM 4.15.1.5 , Conditions.

3. Preparing notices of deficiency for jeopardy/termination cases that have been assessed. Refer to IRM 4.8.9.17.3, Technical Services—Statutory Notices of Deficiency, Jeopardy and Termination Assessments, for notice of deficiency procedures for jeopardy/termination cases.

(1) The AOIC is a Collection owned application that tracks, and controls offers in compromise that are filed with the Service. AOIC is the official system of record for the Offer in Compromise Program. Exam Area Planning and Special Programs (PSP) offices, Specialty Collection OIC, and Appeals all access this database to update, view and track the status of OIC cases. AOIC uploads transaction codes to the Master File and generates forms, letters and managerial reports. The AOIC system allows users to respond to taxpayer inquiries with the most up-to-date information and allows the program owner to monitor the Tax Increase Prevention and Reconciliation Act (TIPRA) statute to avoid a mandatory offer acceptance.

(2) All OIC-DATL field exam (specialty exam and LB&I IC cases) closed to Technical Services for the independent administrative review (IAR) will be assigned and closed manually through AOIC by the TS group manager. The OIC-DATL cases will continue to be assigned and closed through ERCS by the TS group manager.

(3) The TS group manager and the OIC-DATL IARs must reconcile their OIC-DATL cases in ERCS and AOIC to ensure OIC-DATL cases are assigned and closed timely through both systems. Any issues with the reconciliation should be resolved immediately.

(4) The TS OIC IARs are required to generate OIC-DATL letters through AOIC.

(5) The TS OIC-IARs are required to input the applicable information from the IAR OIC-DATL checklist in AOIC. The group manager should ensure that the applicable Checklist information is timely and correctly input in AOIC by the IARs through case reviews.

(6) OIC-DATL coordinators must only work and review their assigned inventory and not view any other IAR’s OIC-DATL inventory in AOIC.

(1) This section provides administrative review and closing procedures for OIC-DATL requests.

(2) IRM 1.2.2.6.1 , Servicewide Policies and Authorities—Servicewide Delegations of Authorities for the Collecting Process, Delegation Order No. 5-1, To Accept, Reject, Return, Terminate or Acknowledge Withdrawals of Offers in Compromise, outlines the level of authority needed to approve an OIC-DATL.

(3) As it pertains to TS, Delegation Order No. 5-1 authorizes the following persons to take the actions listed pertaining to OIC-DATL:

(1) IRC 7122(e), Administrative Review, requires the Service to provide for independent administrative review of all proposed rejections of an OIC before the rejection is communicated to the taxpayer.

(2) For Examination, this review should occur within the TS function where a reviewer is designated as the independent administrative reviewer (IAR). The IAR cannot be anyone who has worked on the case or is a part of the initial rejection or acceptance decision.

(3) The grade level of the IAR should be the same or greater than the individual making the initial rejection or acceptance decision.

(4) The IAR should be independent, defined as "free from influence, guidance, or control of others." This indicates the review should be made by one who is not influenced by the maker of the original rejection decision, i.e. not an employee who reports to the reviewer. In instances where the IAR is the supervisor of the OIC-DATL reviewer, the supervisor must clearly make an independent judgment after a full review of the case. To the extent that an immediate supervisor may defer too much to the judgment of the OIC-DATL reviewer, the supervisor should not be appointed as the IAR. In instances where the OIC-DATL reviewer made the rejection recommendation, to avoid any possible question concerning independence, the area may want to consider appointing someone other than the OIC-DATL reviewer’s immediate supervisor as the IAR.

(5) The IAR will review all proposed rejections of OIC-DATLs before any indication or notification of such action is given to the taxpayer. The purpose of the review is to evaluate the case and determine if rejection is the correct decision.

(6) The review criteria include, but are not limited to the following:

1. Whether IRM requirements were followed (procedural and mathematical accuracy),

2. Whether the tax law was correctly considered and applied, and

3. Whether the facts/circumstances were thoroughly developed.

(7) If the rejection is sustained, the IAR will take the following actions:

1. Sign Form 1271, Rejection Memorandum, as reviewer signifying concurrence with the recommendation. Briefly comment in the Remarks section on the findings/conclusions from the review.

2. Prepare a rejection letter using AOIC.

3. Forward the case file to the delegated official for approval of Form 1271 and signing, dating and mailing of the rejection letter to the taxpayer. Dual notification is required for joint offers.

4. A taxpayer is allowed 30 days to respond to the rejection letter. If a taxpayer lives outside of the United States, the rejection letter can be modified to allow for a reasonable period of time to respond. Once the rejection letter has been mailed to the taxpayer update the case to Status Code 22, Suspense Type 532. This may be requested via Form 5348, AIMS/ERCS Update, input by a TS tax examiner.

5. If a taxpayer responds by requesting an appeals conference, the protest to ensure that it is valid. Valid protests are both timely and adequate. If valid, forward the file to Appeals for consideration and update to Appeals on AOIC. Prepare Form 4665 summarizing the unagreed issues. Send Letter 2280, Transfer to Appeals, to notify the taxpayer the case is being forwarded to Appeals and send a copy to the representative, if applicable. If a rebuttal to the protest is prepared, send a copy of the rebuttal to the taxpayer with Letter 5072, Examiner’s Rebuttal, instead of Letter 2280.

6. If the protest is not adequate, issue the appropriate Letter 1025, Letter of Protest, to the taxpayer with a copy to the representative, if applicable. Letter 1025 allows the taxpayer ten days to provide an adequate protest.

7. If no protest is received, or if the protest is not timely, forward/close the file for final processing.

   Note: When discussing cases with appeals officers, keep in mind the provisions of Rev. Proc. 2012-18, 26 CFR 601.106, regarding the prohibition on "ex parte" communications between appeals officers and other IRS employees.

8. If the taxpayer does not request an appeals conference, forward the OIC-DATL file to Centralized Case Processing (CCP) for closing and close the offer on AOIC as a rejection without Appeals. The file should contain the documents listed in IRM 4.8.8.8.4(2) below.

9. Prepare Form 5348 to request the removal of the AIMS "8" freeze by a designated tax examiner in TS.

10. If an examination report has been prepared, review for accuracy and document in the workpapers. Prepare Form 3177 to have a STAUP 22 for six cycles input on module for cases in which there is an abatement report. STAUP 22 stops collection activity to allow time for the input of the abatement. Form 3177 should be e-faxed to the appropriate CCP site. If the STAUP 22 cannot be input (i.e., it rejects), do not authorize the posting of a TC 470.

11. In all cases, complete the IAR Checklist in AOIC system and make sure that a copy of the rejection letter is in AOIC. For rejected offers that are not appealed, this will generate the posting of the TC 481, OIC Rejected, and release the OIC "Y" freeze on IDRS.

(8) If the IAR determines the rejection is not appropriate, the case file will be returned to the examiner via Form 3990, Reviewers Report, with an explanation stating why the rejection was inappropriate. If an agreement cannot be reached between the examiner and the IAR, the issue will be elevated to management levels as appropriate.

(1) An offer will be considered withdrawn upon the IRS' receipt of written notification of the withdrawal of the offer either by personal delivery or certified mail, or upon issuance of a letter by the IRS confirming the taxpayer's intent to withdraw the offer.

(2) The TS reviewer complete the following:

1. Review the examiner’s workpapers addressing the offer.

2. Check for a withdrawal statement signed by the taxpayer. The taxpayer's signature is always required on the letter of withdrawal. If the offer was filed jointly and both wish to withdraw, signatures of both spouses are required. The taxpayer's representative may authorize withdrawal of the OIC-DATL on the taxpayer's behalf. Taxpayers can sign Form 14773-A, Offer in Compromise, which is a request for withdrawal. The Form 4549, Report of Income Tax Examination Changes "under information" section of should have the following statement "I hereby withdraw my offer in compromise. By withdrawing my offer, I waive my appeals rights" and provided to the taxpayer and POA for signature

3. If an examination report has been prepared, review for accuracy and support in the workpapers including proper consideration of abatement of penalties, when tax is abated. Prepare Form 3177 to have a STAUP 22 input for six cycles on module for cases in which there is an abatement report. STAUP 22 stops collection activity to allow time for the input of the abatement. Form 3177 should be e-faxed to the appropriate CCP site. If the STAUP 22 cannot be input (i.e., it rejects), do not authorize the posting of a TC 470.

4. Prepare a withdrawal confirmation letter using AOIC.

5. Forward the case file to the delegated official for approval of Form 1271 and sign, date, and mail the withdrawal confirmation letter to the taxpayer. Dual notification is required for each spouse on a joint offer.

6. Close the case to CCP. The file should contain the applicable documents listed in IRM 4.8.8.8.6, Case Closing Procedures.

7. Prepare Form 5348 to request the removal of the AIMS "8" freeze by a designated tax examiner in TS.

8. Complete the IAR Checklist through the AOIC system and make sure the withdrawal confirmation letter is in the AOIC system. Once the applicable information is completed in the AOIC system it will generate the posting of the TC 482 and release the OIC "Y" freeze on IDRS. The Checklist must be kept in the case file when the case is closed to CCP.

(1) An offer to compromise a tax liability should set forth the legal grounds for compromise and should provide enough information for the Service to determine where the offer fits within its acceptance policies. Doubt as to liability exists where there is a genuine dispute as to the existence or amount of the correct tax liability under the law. Doubt as to liability does not exist where the liability has been established by a final court decision or judgement concerning the existence of the liability.

(2) Accepted offers will be extremely rare. If an offer is accepted, the TS reviewer will complete the following:

1. Review Form 7249, Offer Acceptance Report, and

2. Prepare an acceptance letter on AOIC and forward it to the delegated official for signature.

(3) Pursuant to IRC 7122 (f), an OIC will be deemed to be accepted if the Service did not otherwise make a determination regarding the OIC and notify the taxpayer of such determination within 24 months of the date the IRS received the offer. See IRM 5.8.8.12, 24-Month Mandatory Acceptance under IRC § 7122(f). If the Service makes a determination to accept the OIC, the acceptance letter must be signed by the current level of authority delegated permission to sign an OIC acceptance letter. The letter will then be sent to the taxpayer. See IRM Exhibit 5.8.8-1, 24-Month Acceptance Letter (Letter 5540).

(4) Refer to IRM 4.8.8.8.6 below for case closing procedures.

(1) After the appropriate letter is sent to the taxpayer, the OIC-DATL file is forwarded to Centralized Case Processing for closure, unless the taxpayer has requested an appeal of a rejected offer.

(2) The OIC-DATL case file should include the following documents in the order shown (as applicable):

1. Signed and dated file copy of the determination letter issued to the taxpayer and a copy of any correspondence sent to the representative.

2. In the event of a withdrawal statement, the withdrawal request signed by the taxpayer and date stamped by the Service.

3. In the event of a rejection, Form 1271, Rejection Memorandum, properly completed and signed and Form 886-A, Explanation of Items.

4. In the event of an acceptance Form 7249, Offer Acceptance Report, signed and date stamped by the Service.

5. Form 656-L, Offer in Compromise (Doubt as to Liability).

6. Agreed or unagreed Form 4549, Report of Income Tax Examination Change, or Form 4549-A, Report of Income Tax Examination Change. When a request for abatement is received from PSP for an example use Form 3870 for OIC cases not established on AIMS/ERCS.

Note: Occasionally, the PSP coordinator, upon initial offer review, may determine that an abatement is warranted, and field examination is not required. PSP will proposed those abatements, secure a withdrawal statement from the taxpayer and then close the offer directly to Technical Services for the issuance of the withdrawal letter. If a withdrawal statement is not secured, PSP will close to TS for the issuance of a rejection letter. Form 3870, is then sent to CCP by TS prior to case closure for those abatements.

7. Form 5344, Examination Closing Record, attached to the front of the tax return.

8. Tax return(s) (original, electronic print, copy or RTVUE (IDRS print)).

9. Form 2848, Power of Attorney and Declaration of Representative, attached to the tax return as required.

10. OIC-DATL workpapers.

11. Copy of the completed IAR checklist. See table below for a copy of the checklist.

12. Prior audit workpapers, report, letters, etc. clipped, banded and or placed in a separate folder.

(3) Form 656-L informs the taxpayer not to send any money with the offer. If the taxpayer sends money the IRS will apply the funds to the taxpayer’s outstanding liability.

(4) Accepted offers require the preparation of a Public Inspection File. The Public Inspection File will contain only a copy of the redacted Form 7249 and a sanitized AOIC Masterfile Screen transcript. These documents are retained for public inspection for a period of one year, after which they are destroyed. See OIC Public Inspection File, and IRM 21.2.3.5.7, Transcripts Restrictions and Special Handling. The TS IAR can obtain an AOIC Masterfile Screen transcript for an accepted offer. OIC Public Inspection File locations are based on the taxpayer’s geographic area of residence. Public Inspection File locations can be found on the IRS Intranet.

(5) The OIC-DATL reviewer frequently gets inquiries on recently closed OIC-DATL cases. To respond to these inquiries, the OIC-DATL reviewer should, at a minimum, maintain copies of Form 1271, Form 7249, and Form 2848, if applicable, and the confirmation letter for a period of six months. The copies should not be maintained longer than one year, after which they should be shredded since the originals are in the administrative case file.

(1) Collection Due Process Cases: The TS reviewer must review the case to ensure adjustments/reports are correct. Once completed, the case is forwarded to Appeals. Refer to IRM 4.18.7.4, Offers Under IRS Independent Office of Appeals Jurisdiction, and IRM 4.18.7.4.1, CDP and Equivalent Hearing Appeal Offer Processing.

(2) Termination Offers: Consideration of an offer must be terminated upon the death of a single proponent. Offers closed as terminations do not require preparation of Form 1271. The TS reviewer is responsible for issuing a termination letter. The letter is forwarded to the TS group manager for signature. See Form 5.19.24.15 , Death of a Taxpayer and Form 5.19.24.10, Processable Return Procedures. Many times the OIC-DATL under consideration was submitted jointly by a husband and wife. In that situation, contact with the surviving spouse should be made to determine whether there is a probate proceeding pending. See IRM 5.17.13.9, Decedents’ Estates, for more information about decedent taxpayers and probate proceedings.

(3) Returned Offers: Offers that have been received but are not processable may be closed as returned. This is the sole responsibility of the Centralized Offer in Compromise Unit (COIC). In other situations, a processable offer may also warrant closure as a returned offer. See IRM 5.8.7.2, Returned for detailed information.

(4) If only one spouse submits an OIC-DATL, then the account may need to be split. See IRM 21.6.8, for procedures.

(1) Restricted adjustment cases are controlled on ERCS by TS using Status Code 20, Review Type 09.

(2) Restricted adjustment cases are sent to TS for special handling.

(3) All cases requiring restricted interest treatment must be identified as such on Form 3198.

(4) The reviewer should ensure Form 3198 has been properly notated. Form 3198 should contain the following notations:

1. Restricted interest cases requiring Form 2285 must be identified as such on Form 3198 to ensure proper routing upon case closing. The following three review steps should be taken:

1.	Review page one of Form 3198 to ensure it has routing instructions to "FORWARD TO TECHNICAL SERVICES ".
2.	Review page one to ensure the box is checked for "Restricted Interest (Form 2285 required)".
3.	If the restricted adjustment made is a NOL carryback, check the box on page 2 under the "Special/Restricted Interest Features," that says "NOL and Capital Loss Carryback" in addition to the "Other Code Section" check box.

Reminder: Case will be updated to Status Code 21 for routing to TS.

2. Restricted interest cases not requiring a Form 2285, must be identified as such on Form 3198 to ensure proper routing upon case closing. Check the box on the left side of Page 1 and review page two of Form 3198 to ensure it has been annotated to indicate "Special/Restricted Interest Features", check box for "Other Code Section" and annotate "IRC 6611(f)—No Form 2285 Required."

Note: Case will be updated to Status Code 51 for routing to CCP unless other feature requires routing to TS, i.e. an unagreed closure.

3. Agreed, no changed and surveyed Joint Committee cases as defined in IRM 4.36.2, Identification of Joint Committee Cases, should be sent directly to the Joint Committee Review Program. The Joint Committee reviewer will complete Form 2285 if required. Additional information may be found at the Joint Committee Cases Knowledge Management Library.

4. The reviewer's signature, date of signature, and telephone number will be entered on the Form 3198 before closing to CCP, Status Code 51.

(5) IRM 4.10.8.15.3.4 (5)(a), Restricted Interest, with IRM Exhibit 4.10.8-10, Sample Form 4549A-Full Allowance of Tentative NOLD, through IRM Exhibit 4.10.8-13, Restricted Interest Decision Chart (Non-Joint Committee Cases Only), provide detailed instructions about the preparation of reports presenting carryback adjustments and general adjustments. The report should have been prepared and presented to the taxpayer detailing the source year of all carryback adjustments with appropriate remarks in "Other Information" as suggested in IRM 4.10.8.15.3.4 (5).

(6) If the report consists of both carryback adjustments and general adjustments, the case file should contain a "Restricted Adjustment Report" that reflects the potential deficiency subject to interest per IRC 6601(d). This is a report generated without the carryback adjustments to reflect the taxpayer's deficiency attributable to the general adjustments until the due date of the offsetting source year carryback. More than one source year requires additional "Restricted Reports" until each source year is accounted for in order to prepare Form 2285. The taxpayer's last marginal rate is computed as follows in the event the reviewer must separate the report:

1. Merge the case into the RGS program.

2. Deal with only one year at a time.

3. Go into issue adjustments. Make note of the amounts of all the carryback adjustments.

4. Eliminate all of the carryback adjustments by deleting them or entering zero for the amount of the adjustment. Do the same for alternative minimum tax preference item for the alternative minimum tax net operating loss deduction. Compute the tax that should now reflect only the current period adjustments.

5. Print out the first page of the report reflecting the deficiency.

6. Go back into issue adjustments and re-enter the adjustment for the carryback(s) from the earliest subsequent year. Run the report again and print the page of the report reflecting the deficiency. The difference between this report and the last report would be the tax change due to the carryback from the earliest subsequent year.

7. Repeat this process for each subsequent year from which there was a carryback until the final report is the same as the examiner's report.

(7) The reviewer ensures the NOL or credit adjustment on the report is not a combination of two or more source years. The Form 4318 or workpapers should be reviewed to determine if multiple NOLs or credit carrybacks make up the adjustment.

(1) Form 2285 is required when:

1. Losses or credit carrybacks from more than one year are being carried back to the same year, or

2. A "general adjustment" resulting in more than $100 in tax and a carryback (loss or credit) from at least one subsequent year are involved.

(2) Form 2285 is not required in the following instances:

1. An unagreed case is either petitioned to the United States Tax Court or forwarded to Appeals for settlement.

2. A tentative allowance was made and the report approves the allowance (a no-change report).

3. The carryback arises from only one year and there is a partial recovery of the tentative allowance.

4. There are no general adjustments or there is a general adjustment resulting in $100 or less in tax and a carryback from only one year.

(3) IRM Exhibit 4.10.8-13 displays a quick reference "Restricted Interest Decision Chart (Non-Joint Committee Cases Only)."

(1) TS is responsible for completing Section I of Form 2285. In LB&I, tax computation specialists (TCS) complete Section 1 of Form 2285 for all agreed and partially agreed cases. For further information see LB&I Restricted Interest.

(2) Instructions about how to complete Form 2285 are outlined on the publishing website for the form. Additional references may be found in:

1. IRM 20.2.9, Interest on Carryback of Net Operating Loss

2. Joint Committee Spreadsheet Analysis website.

(3) The examiner is responsible for the accuracy and completeness of the reports required to complete the Form 2285. The reviewer should contact the examiner who worked the case to verify the amounts of the adjustments arising in various years. Use of RGS may net some carryback and carryforward adjustments, making preparation of Form 2285 confusing.

(4) The completed Form 2285 is placed on the top of the examiner's report inside the case file. The case will be closed to CCP in Status Code 51.

(5) On complex restricted interest computations, the reviewer may prepare a memorandum for an area counsel advisory.

(1) Examiners and or group managers may informally request assistance. Reviewers should encourage open communication and resolution of a problem with minimum management involvement.

(2) Some area counsel offices have specific attorneys assigned to each area group for informal advice. The appeals/counsel liaison in these areas should maintain a list of the attorney assignments for simple informal advice. Visit SB/SE Counsel Contacts for a listing of contacts in Counsel.

(1) Any employee who gives advice and assistance to taxpayers should use the following guidelines:

1. Ensure there is a clear understanding of the facts involved in the transaction under discussion and the applicable principles of law are identified and explained so the taxpayer understands the facts and law as discussed.

2. Advice should not be given until there is a clear understanding of the facts and applicable law. If the facts are not clear, clarify areas of doubt and request additional information as needed. If the applicable law is not clear, follow through with necessary research to ascertain the correct answer before replying fully to the request.

(1) Under the Technical Coordination Report Program, tax abuses, inequities, and administrative problems in the interpretation and application of tax laws and regulations are reported to headquarters. It is essential that headquarters be made aware of the scope of tax arrangements that may have the effect of legally circumventing the statute or regulations. Since examiners in the field are often in the best position to identify these situations, the initial steps toward the correction or elimination of the problems frequently originate in the field.

(2) The Technical Coordination Report Program was established as a vehicle for communicating these matters to headquarters. The program is administered by TS, who is responsible for establishing and maintaining an avenue of communication with headquarters on problem areas encountered, through the use of Technical Coordination Reports.

(1) Upon receipt of a transferee case, review the statute of limitations for the transferee case to ensure it was computed correctly. Generally, the transferee statute is one year after the expiration of the period of limitation for assessment against the taxpayer (transferor). Refer to IRC 6901 and IRM 25.6, Statute of Limitations, for more discussion of the transferee's statute.

(2) Prepare Form 895, Notice of Statute Expiration, for each transferee, as applicable, checking the "irregular assessment period" box and indicating the statute was determined by IRC 6901(c). Annotate in the remarks section the transferee’s statute of limitation date and the number of years that were added to the transferor’s statute per IRC 6901(c) to compute the transferee’s statute of limitation.

(3) Under IRC 6902(a), Provisions of Special Application to Transferees, the government has the burden of proving all elements necessary to establish the transferee’s liability. Reviewers must ensure all documentation is contained in the case file to support the government's burden of proof.

(4) Each type of transferee liability requires different elements to support the government’s burden of proof. See IRM 5.17.14.

(5) At a minimum, the case must include the following documents attached to, or referenced in, the Form 3031, Report of Investigation of Transferee Liability, report or equivalent memorandum:

1. Transferee at Law Cases:

   Reminder:

   1.	Established by contract - a copy of the contract whereby the transferee assumed the tax liability of the transferor.
   2.	Established by statute - a copy of the applicable state or federal statute.

2. Transferee in Equity Cases:

   Reminder:

   1.	The elements that establish an equity case vary depending on law being applied; but in general the following documentation will be needed to establish an equity case: fraudulent transfer can be either
   2.	Documentation showing what assets were transferred from the transferor to the transferee, the date the assets were transferred, the value of the assets as of the date of transfer and the amount of consideration paid, if any, by the transferee to the transferor.
   3.	Documentation showing current legal title. A transferee is rarely a joint entity.
   4.	Documentation showing the insolvency of the transferor at the date of the transfer or that the transferor was rendered insolvent by the transfer. Examples include a copy of the transferor's balance sheet, documents showing bankruptcy or documents showing dissolution.
   5.	Documentation of the date the transferor's tax liability accrued.
   6.	Documentation of the attempts that have been made to collect the tax from the transferor or that collection is not possible or would be futile.
   7.	If the transferee in equity is based on actual fraud, documentation showing the intent of the transferor to hinder, delay or defeat the payment of tax must also be included.

3. For All Transferee Cases:

   Reminder: Documentation supporting the underlying tax liability of the transferor is required. In addition to the original or copy of the transferor's tax return, the case will include a transcript of the transferor's account if the tax has been assessed or a revenue agent's report (RAR) or statutory notice of deficiency if the tax has not been assessed.

(1) A transferee case is agreed if the transferee has signed Form 870-T, Waiver of Restrictions on Assessment and Collection of Transferee or Fiduciary Liability and Acceptance of Overassessment (for income tax cases), Form 2504, Agreement to Assessment and Collection of Additional Tax and Acceptance of Overassessment (for employment tax) or Form 890-T, Waiver of Restrictions on Assessment and Collection and Acceptance of Overassessment as to Transferee or Fiduciary Liability for Estate, Gift and Generation—Skipping Transfer Tax.

(2) The reviewer will ensure that Form 870-T or Form 890-T contains the amount of the transferor's tax and penalties. In addition, the Form 870-T must contain the appropriate modified language. See IRM 4.8.9.17.5.5 , Transferee Waivers on Assessment and Collection.

(3) The reviewer will complete Form 1296, Assessment Against Transferee or Fiduciary. See IRM 4.8.8.13.5, Completing Form 1296, below.

(4) The reviewer will close the case to Centralized Case Processing (CCP) via e-fax with the following instructions written on Form 3198: "Agreed non-master file transferee assessment. Form 1296 enclosed."

(1) If the transferee defaults on the 30 day letter or if the transferee statute of limitations is imminent, the examiner will route the transferee case and related transferor case to TS.

(2) Under IRC 6901 statutory notices of transferee liability are only required for transferee cases to the extent such notices would be required before assessment of the transferor's liability. Therefore, for certain employment tax cases and for certain excise tax cases, the unagreed liability may be assessed without first issuing a notice. Refer to IRM 4.8.10, Notice of Determination of Worker Classification, to identify those employment tax cases that require a notice of determination of worker classification for the transferor and thus, a notice of transferee liability.

(3) However, the reviewer must still complete Form 1296. See IRM 4.8.8.13.5 below.

(1) If the transferee defaults on the 30 day letter or if transferee statute of limitations is imminent, examiners will route the transferee case and related transferor (income tax) case to TS for issuance of the notice of transferee liability. Refer to IRM 4.8.9.17.5 for details concerning notices of transferee liability.

(2) All notices of transferee liability require mandatory review by area counsel per IRM 4.8.9.9.2.1, Mandatory Area Counsel Review.

(3) Each notice of liability will contain the following components:

1. Letter 902-T, Notice of Liability, including the appropriate opening paragraph as detailed in IRM Exhibit 4.8.9-12, Transferee and Fiduciary Letter Opening Paragraphs.

2. Form 870-T or Form 890-T, Waiver of Restrictions on Assessment and Collection and Acceptance of Overassessment—as to Transferee or Fiduciary Liability for Estate, Gift, and Generation-Skipping Transfer Tax, including the modified language found in IRM 4.8.9.17.5.4.

3. Transferee Notice of Liability Statement, which includes both a transferor's section and a transferee's section as outlined in IRM 4.8.9.17.5.4, Transferee Statements.

(4) The reviewer will prepare Form 1296, consistent with the position in the notice of liability in anticipation the case will default from 90 day (150 day) suspense.

(5) Once approved by area counsel, the notice of liability will be issued in accordance with regular notice of deficiency procedures as outlined in IRM 4.8.9, Statutory Notices of Deficiency.

(6) If a notice of deficiency is issued to the transferor before the completion of the action against the transferee and the notice of deficiency defaults, the transferor return and examination administrative file will be returned to the examination function to be associated with the transferee case file after the transferor tax shown on the notice of deficiency has been assessed. The transferor's AIMS record should be closed to status 90 and the transferor return re-charged to the examination function responsible for the transferee liability case.

(7) If the transferor's notice of deficiency and transferee's notice of liability are issued concurrently and no petitions are filed within the 90 day (150 day) period, both the transferor's and the transferee's case files will be sent to CCP for assessment.

(8) If a transferor case is before the Tax Court and the transferee fails to file a petition for the notice of liability within the 90 day (150 day) period, the transferee file will be sent to CCP for assessment. The appeals office controlling the transferor's case will be notified of any payments made by the transferee.

(9) No statutory notice of transferee liability will be issued for some excise taxes or some employment taxes. IRC 6901 states the transferee liability will be assessed, paid, and collected in the same manner as the taxes to which the transferee liability is incurred. If no notice of deficiency is issued to a taxpayer for employment and excise taxes, no notice of liability will be issued to a transferee of employment taxes or excise taxes. See IRM 4.8.10, Notice of Determination of Worker Classification, to identify those employment tax cases that would require a notice of determination of worker classification for the transferor and thus, a notice of transferee liability for the transferee.

(1) Form 1296 is the assessment document used by the non-master file unit to make the transferee liability assessment on non-master file. The form must clearly communicate all aspects of the transferee liability to CCP and to the non-master file unit, including limitations on the transferee's liability, other transferees and the interest computation date for the interest against the transferee.

(2) A separate Form 1296 is prepared for each transferee for each kind of tax for each taxable period of the transferor.

(3) In limited liability situations (i.e., when the value of the net assets received by the transferee is less than the unpaid liability of the transferor) and more than one tax period is involved, the transferee's liability should not be allocated to the various tax periods. Instead, the liability should be shown as one amount on Form 1296 for the earliest tax period of the transferor, without identifying it with any particular year of the transferee.

(4) In limited liability situations, the Form 1296 should also include instructions for computation of interest, including the interest start date and the interest rate.

(5) See Exhibit 4.8.8-1, Sample Forms 1296 for Transferee Assessment, for examples of completed Form 1296.

(1) In a memorandum of understanding (MOU) between Chief, CI and Commissioner, Small Business/Self-Employed (SB/SE) dated October 28, 2020, SB/SE agreed to the following:

• Two SB/SE employees with an auditing background will conduct the audit of the CI Imprest Fund.

• No one individual auditor will conduct consecutive audits.

• Field Examination will determine the rotation of auditors to ensure audits are performed timely and no one individual auditor conducts consecutive audits.

• The Field Examination Areas which may include Technical Services are responsible for all quarterly CI Imprest Fund audits.

(2) Based on the MOU, the audits of the CI imprest fund are:

• Conducted on a quarterly basis, and each audit is to be completed before the end of the quarter.

• Conducted at the CI imprest fund cashier's office.

• Conducted at irregular intervals and without prior notice to CI.

(3) With the Director, Special Investigative Techniques approval, the audits may be performed remotely. Once Field Exam receive approval from the Director, Special Investigative Techniques, the Imprest Fund documents will be transferred via e-mail within a password encrypted Win-Zip file.

(1) The CI imprest fund cashier will provide the auditors with the following items:

1. CI Standard Form 1149, Statement of Designated Depository Account, and the bank statements for the quarter being audited. CI Standard Form 1149 is generated by CI systems and not found in the Product Catalog.

2. Form 1129, Cash Reimbursement Voucher and/or Accountability Report, with attached Form 10411, Reimbursement Claim for Confidential Expenditures on Official Business, for the quarter being audited.

3. Imprest fund checking account documentation, including the check register, uncashed checks, deposits in transit and unreimbursed subvouchers.

4. Form 2844, Reconciliation of Imprest Fund, for the quarter. The Form 2844 is generated by CI systems and not found in the Product Catalog.

5. The latest Optional Form 211 (OF 211), Request for Change or Establishment of Imprest Fund (NSN7540-00-082-2551).. The Optional Form 211 is generated by The Department of Treasury and not found in the Product Catalog.

(1) The MOU provides that the quarterly audit of the imprest fund include the following steps and be accomplished by the two assigned auditors who will reconcile the Imprest Fund balance with bank statements; advances outstanding; and Form 1129, Reimbursement Vouchers/ Accountability report:

1. Review Optional Form 211 for changes as explain in the following example:

   Example:

   1.	Cashier’s name or location;
   2.	Designation or revocation of cashier;
   3.	Fund amount increases or deceases;
   4.	Checking accounts (new account, transfer to different bank, or closure of account).

   Note: No recommendation is to be made by the auditors regarding a change in fund levels.

2. Review Form 1149.

3. Reconcile the imprest fund balance with the bank statements, the outstanding advances, and Form 1129 using Exhibit 4.8.8-6, Imprest Audit Worksheet, and Exhibit 4.8.8-3, Imprest Audit Checklist.

4. Prepare Form 2844.

5. Sign and print their names on Form 2844.

6. Provide a copy of Form 2844 to the SAC.

7. Efax or E-mail the original Form 2844, the cover memo in Exhibit 4.8.8-4, Exhibit 4.8.8-2 and Exhibit 4.8.8-3 to:

   Note: E-fax: IRS, Beckley Finance Center (BFC), Attn: Misc. Program Unit, Efax: 855-787-4385 or E-mail: CFOBFC.Invoice@irs.gov

(1) If the auditors cannot reconcile the fund to the bank balance due to a bank error, the cashier will determine the cause of the error, correct it, and complete a new Form 2844, including an explanation and the resolution. The auditors will then complete the review.

(2) If the auditors cannot reconcile the fund to the bank balance due to a computer or program error, the CI cashier will attempt to resolve the problem. The cashier may have to work with the National Operations Center (NOC) to attempt to resolve a computer error. When the problem is resolved, the cashier will provide a new Form 2844, including an explanation of the nature of the problem and the resolution to the auditors. The auditors will then complete the review.

(3) If the account does not reconcile, and the problem cannot be resolved, the auditors will not sign Form 2844. The auditors will notify the Director, Special Investigative Techniques of the problem. The cashier is charged with resolving the problem.

(1) There are numerous schemes that fall under Abusive Transactions. These schemes may involve the following:

• Abusive Roth IRA and IRA Schemes

• Additional Child Tax Credit with ITIN Dependents

• Basket Options

• Captive Insurance

• Emerging Scheme Issues

• Energy Efficient Building Deduction Section 179D

• Leveraged Prepaid Options

• Research and Experimental Credit IRC 41

• Trusts (Domestic, Foreign and Abusive)

• Abusive Offshore Schemes

(2) Cases identified as AT may become part of a project. National project codes are assigned to identify the key examination cases and their related parties to specific projects. A national four-digit tracking code links a participant/investor to a specific promotion. Project and tracking codes can be obtained from the Senior Program Analyst - Exam Quality and Technical Support "EQTS". See SB/SE Contact an Expert Directory.

(1) Case reviews and procedures will vary depending on the type of AT scheme. See Exam Quality and Technical Support Abusive Transactions Group ("EQTS").

(2) In general, reports for AT participant cases are prepared like regular cases. With the exception for trusts and FLPs (Family Limited Partnerships), RGS is used to generate reports. For trust cases, the reports are done manually with worksheets available on the AT website. For FLP cases, Estate and Gift Notebook will generate the reports.

(3) A full range of penalties may apply to AT cases. See IRM 20.1.5, Penalty Handbook, Return Related Penalties.

(4) In addition to a valid protest (as defined in Pub 5, Your Appeal Rights and How To Prepare a Protest If You Don’t Agree) for unagreed cases going to Appeals, the examiner's report transmittal should clearly state the name of the promotion and whether the agent is aware of any national settlement initiatives. [Estate and Gift FLP cases do not utilize a report transmittal.] For unagreed cases not going to Appeals, the case may be subject to a mandatory review by area counsel before the issuance of the statutory notice of deficiency. Refer to IRM 4.8.9.9.2.1.

(5) For agreed cases, the reviewer may need to perform additional procedures before closing the case. Depending on the AT scheme involved, forms, such as Form 906, Closing Agreement on Final Determination Covering Specific Matters, and Form 5346, may be in the case file, which will require additional procedures by the reviewer. Specific AT schemes should be researched on the AT website for applicable procedures.

(1) The Abusive Transaction Group in Exam Quality and Technical Support (EQTS) can provide case development assistance and support on promoter investigations involving specifically identified coordinated issues. Abusive Transactions Sr. Program Analyst can be found in the Exam Quality and Technical Support/Abusive Transactions Group site.

(2) Information and procedures for specific AT schemes are located at the Knowledge Management website. At this website, there is other useful information, including technique guides, resource guides, training material, and procedures for related programs.

(3) Exam Quality and Technical Support/Abusive Transactions Group has the responsibility to develop the strategic approach to work an Abusive Transaction issue. Its members are responsible for coordinating all issue actions and activities with other operating divisions and other divisions within SB/SE. The Abusive Transactions Group monitors all inventories throughout the life of the issue.

(4) EQTS is generally the first point of contact for revenue agents and field compliance personnel with questions about a particular abusive transaction AT. EQTS assists to identify concerns with issue development and or case development including comments that relate to appropriate penalty development. EQTS will post technical positions, audit aids, resource guides, and media materials related to specific AT arrangements on the Knowledge Management website. EQTS can also be contacted to see if there is more current information than what is posted.

(1) When a case is returned to TS from Appeals, the reviewer must determine whether he or she agrees with the appeals officer's recommendations based upon a factual and technical review of the issues raised by Appeals.

(2) Refer to IRM 4.8.5.4, Post Examination Case Processing Requirements, Cases Returned from Appeals, for a complete discussion of procedures for cases returned by Appeals.

(1) All feedback from Appeals (Form 5402, Appeals Transmittal and Case Memo or Appeals Case Memorandum, (ACM)) is forwarded by Appeals directly to each field area director for appropriate review and dissemination.

(1) On occasion, a revenue agent will prepare a memorandum requesting technical assistance from area counsel. Advice can be requested on a variety of issues, such as the following:

• Preparation of a Form 872, Consent to Extend the Time to Assess Tax, statute extension.

• Interpretation of a specific Internal Revenue Code section.

• Effect of contract(s) to specific issues.

(2) Procedures for processing requests for area counsel advice are contained in IRM 4.8.8.12.1.2, Formal and Informal Technical Assistance, Advice From Area Counsel, above.

(1) Effective after August 15, 2019, Pub 1 no longer satisfies the advance notice requirement of IRC 7602(c)(1). Advance notice of potential third-party contacts is accomplished by issuance of one of several versions of Letter 3164, Third Party Notice. See IRM 25.27.1, Third-Party Contact Program, for complete procedures.

(2) The general advance notice of third-party contact(s) rule in IRC 7602(c)(1) now requires that the IRS:

• Intend, at the time such notice are issued, to contact third-parties (the notice must state this intent).

• Specify in the notice the time period, not to exceed one year, within which IRS intends to make the third-party contact(s).

• Generally send the notice at least 45 days before contact with a third party.

Note: For all third-party contacts intended to be made after August 15, 2019, or in which contacts with third-party will occur after August 15, 2019, a notice meeting the new requirements must be issued. An employee may not contact a third party until the 46th day following the date of the notice.

(3) The notice must include the tax period(s) at issue. The notice may be reissued yearly, if necessary.

(1) The reviewer will review Form 9984, Examining Officer's Activity Record, to ensure the examiner documented the case activity record per the requirements of IRC 7602(c)(1). In addition, the reviewer will review Form 9984 to ensure that the examiner documented whether any exceptions to the notice requirements of IRC 7602(c) apply or whether the contacts are not considered third-party contacts under IRC 7602(c) pursuant to Treas. Reg. 301.7602-2.

(2) Unless an exceptions applies, IRC 7602(c) require the Service to:

1. Provide advance notice of the intent to make third-party contacts to the taxpayer,

2. Record each third-party contact made, and

3. Provide a list of third-party contacts to the taxpayer upon request.

(1) The reviewer will review Form 9984 to ensure that the examiner has documented the following:

1. The taxpayer was the primary source of information with respect to the taxpayer's return and attempts were made to obtain (or verify), to the greatest extent practicable, the required information from the taxpayer before seeking to obtain the information from third parties. Per IRM 4.10.3.3.1.4(2)(a), Third Party Interviews, information will be collected, to the greatest extent practicable, directly from the taxpayer.

2. The specific requests that were made of the taxpayer (generally, copies of information document requests (IDRs)) to obtain or verify the relevant information. The reviewer should also ensure that the case file considered as a whole supports the decision to obtain or verify the relevant information via a third-party contact.

3. The date, method and fact of providing Letter 3164 to the taxpayer(s) and the period covered by the notices.

4. Compliance with the separate notice requirements of IRM 4.10.1.2.2.1, Separate Notice Requirements, for joint return situations. Notification must be issued separately to each spouse.

5. The authorized representative, if any, was provided with a copy of the notice and any other correspondence in accord with the Service procedure of providing copies of correspondence to the taxpayer's representative (unless the taxpayer has indicated otherwise).

(1) The reviewer will review Form 9984 to ensure the examiner completed the following:

1. Documented third-party contacts on Form 12175, Third Party Contact Report Form, or Form 12180, Third Party Contact Authorization Form,

2. Included copies of the forms in the case file, and

3. Forwarded Form 12175 to the Third Party Contact Coordinator.

(1) The reviewer will review Form 9984 to ensure that the examiner documented any requests from the taxpayer for a list of all third parties contacted, and the examiner contacted the third-party contact coordinator who is responsible for providing the list to the taxpayer with Letter 3173, Third Party Contacts.

(1) The reviewer will review Form 9984 to ensure the examiner documented whether any exceptions to the notice requirements of IRC 7602(c) apply, or whether the contacts were not considered third-party contacts under IRC 7602(c).

(1) The SME serves as a focal point to coordinate and disseminate information to other TS employees nationwide on the assigned subject matter.

(2) The SME will conduct periodic meetings, as needed, with the nationwide TS coordinators assigned to the subject matter. The meetings should consist of informational conference calls with the nationwide TS coordinators regarding issues, procedures, trends and concerns. Participation of the nationwide TS coordinators in the dialogue should be encouraged. Examples of items to address in the calls include proposed and or new IRM procedures, information found during research of tax services, internal documents and websites, and achieving program consistency.

(3) The SME's TS territory manager will be the champion/lead for the SME's program. The SME will work in coordination with his or her group manager to work and elevate issues to the territory manager and in interpreting procedures and guidelines.

(4) The SME will provide briefing/narrative assessments of his or her program area on an as needed basis when new issues/trends/problem areas/concerns arise that need to be elevated to the field Area Director, through his or her territory manager and immediate group manager.

(5) When an issue or trend that impacts Technical Services nationwide it must be elevated to the field Area Director. The field Area Director must discuss the issue or trend with the other field Area Directors and their respective TS territory managers in order to come to a consensus on a solution.

(6) The SME advises management on national standardization of TS work practices.

(7) The SME works with the Field Examination SharePoint lead to develop and maintain the currency of his or her SharePoint page so it provides tools for reviewers to use in working cases in his or her program area.

(8) The SME assists in miscellaneous TS initiatives and developing presentations, training and education for field examiners.

(9) The SME submits articles on the assigned subject matter to the Technical Digest for publication.

(1) The SME will periodically conduct research on the subject matter using electronic tax law research tools provided by the Service, interim guidance and other internal documents, and internal websites. Visit ReferenceNet Legal and Tax Research Services for access to various research resources.

(2) The SME will elevate issues, concerns, casework trends, emerging issues, proposed legislative tax law changes, and procedural changes through the management chain and coordinate subsequent actions with the National SME coordinator, Examination Policy Analysts and Chief Counsel.

(1) The SME will review IRM sections that relate to his or her subject matter at least annually. He or she will draft revisions and forward recommended changes to the territory manager through his or her immediate manager. The recommended revisions should be shared with the TS coordinators nationwide, and informally with Examination Policy and Chief Counsel counterparts (if necessary) before forwarding to the territory manager.

(2) The SME will review Delegation Orders annually and recommend changes through the management chain and through their respective field Area Director’s staff and assist in drafting the revisions, as necessary.

(3) The SME will review forms, letters, documents, and systems for the assigned subject matter and recommend changes and updates to management and to their respective field Area Director’s staff.

(4) The SME will review and update TS training material products on the assigned subject matter as requested.

(5) For consistency purposes any changes elevated to the field Area Director for consideration and acceptance must be discussed with the other field Area Directors with a TS territory to ensure that the changes are acceptable by the other field Area Directors and TS territory managers.

(1) The SME will recommend changes to other operating division products through TS management on his or her assigned subject matter. See IRM 1.11.6.6, Providing Feedback About an IRM Section - Outside of Clearance, regarding mediums to submit IRM changes.

(2) The SME will perform a review of formal requests from other operating divisions on their documents and provide feedback through Operations.

(3) The SME will take a leadership role in the design and development of TS course material and CPE modules. Additionally, the SME will take a leadership role in instructing CPE sessions on his or her assigned subject matter as requested.

(1) To use the alternative cost method provided in Rev. Proc. 92-29, the original request must be filed on or before the due date of the developer’s original federal income tax return (determined with regard to extensions to file) for the taxable year in which the first benefitted property in the project is sold. See IRM 4.10.13.8, Real Estate Developers: Alternative Treatment of Common Improvements Under Rev. Proc. 92-29, for a discussion of where the original request should be filed. A copy of the request is attached to the developer’s original tax return. There is no prescribed form for the election. However, certain information must be included in accordance with the revenue procedure.

(2) Developer-taxpayers who make this election must extend the statute of limitations when needed. See IRM 4.8.8.22.2.4.

(3) An annual statement is required to be filed for every year of the project. See IRM 4.10.13.8 for a discussion of where the original annual statement should be filed. A copy of the annual statement is attached to the developer’s original tax return. There is no prescribed form for the annual statement. However, certain information must be included in accordance with the revenue procedure.

(4) A supplemental request is required to extend the common improvement construction period past the original estimated completion date. See IRM 4.10.13.8 for a discussion of where the original supplemental request should be filed. There is no prescribed form for the supplemental request. However, certain information must be included in accordance with the revenue procedure.

(1) Program responsibility for the Rev. Proc. 92-29 program may be assigned to a TS revenue agent reviewer or the TS technical coordinator, depending on staffing and program volume. The program coordinator should read Rev. Proc. 92-29 in order to be familiar with its contents. Additionally, the program coordinator should periodically check for new revenue rulings, revenue procedures, letter rulings, IRMs, and any information which may be posted on the TS SharePoint site.

(2) The Rev. Proc. 92-29 coordinator’s responsibilities include, but are not limited to the following:

1. Reviewing requests, annual statements, and supplemental requests to ensure all required information is provided,

2. Determining if the project complies with the revenue procedure requirements for using the alternative cost method,

3. Verifying the correctness of the inventory cost allocations,

4. Securing a statute extension for all project years, if necessary,

5. Issuing approval or denial letters when necessary, and

6. Providing technical assistance to field examiners.

(3) The authority to sign letters relating to taxpayer requests under Rev. Proc. 92-29, or its equivalent, is delegated to revenue agent reviewers in TS under SB/SE 1-23-42, Request to Use Estimated Costs of Future Improvements in Determining Gain or Loss on the Sale of Lots, formerly SB/SE Delegation Order 4.44, Rev. 1.