8.21.3. Appeals Technical Employees Statute Responsibility

(1) All changes to the statute critical data fields (tax period, statute date, and statute code) may be made from the SVS screen. Once the changes are entered and the validation is submitted, the return is updated on ACDS and a log entry is made in the Validation Tracking Log.

(2) If the tax period also requires an update to the AIMS database or any other system as a result of the updated statute critical data field, submit a request to the Processing Team Manager (PTM) for the AIMS update via the SVS. Select the appropriate office and PTM from the drop-down list in the SVS system to submit the request to the Appeals Processing Employee Automated System (PEAS) inbox.

1. If you don't receive confirmation of the AIMS update within five (5) business days, contact the PTM who received the original update request for resolution.

(3) If there's doubt as to the correct statute date, enter the earliest date determined. Immediately correct ACDS using SVS, if a change is required.

(1) Generally cases are received with ample time left on the statute to resolve the issues and close the case. Initiate statute protection when it is determined that resolution of the case may not occur within the specified time frame.

(2) The protection can be initiated at any time; however, when there are at least 150 days left on the statute and you determine that no settlement will be reached, you must protect the statute by securing a consent or initiating preparation of a SND.

(3) Below are time-frames to follow for protecting statutes:

(1) Statute dates on estate tax cases can't be extended by consent under any circumstance, so the time to consider and resolve an estate tax case may be very limited. Appeals won't accept an estate tax case if less than 270 days remain on the ASED.

(2) You must consult with the ATM on any estate tax case that has only 120 days remaining on the statute. Written permission from your ATM is required to keep a case beyond the 120-day guideline. Under these guidelines, you might need to prepare a SND even though Appeals consideration is just getting underway. Granting permission doesn't address the performance aspects of the employee's critical elements.

(3) Follow the time frames below. However, if a settlement is imminent, discuss with your ATM whether to allow more time in order to proceed to preparing a settlement computation, rather than preparing a SND.

1. Initiate preparation of the SND when no settlement is reached and only 90 days remain on the statute.

2. Notify your ATM, ATCTM, and the PTM by secure email that the case is being submitted for SND preparation with only 90 days remaining on the statute.

(1) Follow the guidelines established in IRM 25.6.22, Extension of Assessment Statute of Limitations By Consent, when preparing consent forms. Refer to Delegation Order 25-2 (Rev. 2) in IRM 1.2.52.3, Delegation Order 25-2 (Rev. 2)(formerly DO-25-2 and DO-42, Rev. 28), for delegated officials authorized to sign the consent form. The table below lists some of the IRM sections to assist you in determining the proper consent form and language to use for specific cases.

(2) If income tax and other taxes are involved, indicate each type of tax in the "kind of tax" portion of the consent form.

(3) When soliciting a consent from the taxpayer, make certain that the consent form contains the notification required by IRC 6501(c)(4)(B) and...

1. Mail or present to the taxpayer a completed and dated Letter 967 along with the properly completed consent form that contains the notice of taxpayers' rights AND provide Publication 1035, Extending the Tax Assessment Period; and

2. Mail or present copies of the same documents to the properly authorized representative, if the taxpayer is represented.

Note: IRC Section 6501(c)(4)(B) requires that these procedures be followed EACH time the taxpayer is requested to extend the period of limitations.

3. Document this activity on ACDS by selecting the ACDS CARATS action and sub-action code CO-CS at the time the consent is mailed or presented to the taxpayer (and representative, if applicable).

   Note: Be sure to specifically record on ACDS that copies of the documents were provided to the representative, if the taxpayer is represented.

(4) Section 3201(d) of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) requires the Service, whenever practicable, to send any notice related to a joint return separately to each individual filing a joint return. See IRM 25.6.22.3.1 , Separate Notification of Each Spouse. If you can verify that both spouses live at the same address, it's acceptable to send only one consent form and Letter 967.

(5) To verify that both spouses live at the same address, you must verify (either by phone or in person) during the first contact that the last known mailing address is still correct for each spouse.

1. One consent form signed by both spouses or two consent forms signed by each spouse is sufficient verification that both spouses received notice of their rights.

2. If you receive a consent form with only one spouse's signature, it can't be determined with certainty that the other spouse received the required notice of their rights. In this case, you must contact the non-signing spouse to determine why there was only one signature on the consent form. Obtain a correct address, and send a separate consent form and Letter 967 (with Publication 1035) to the spouse who didn't sign the consent form.

3. If you can't verify that both spouses live at the same address, you must send the consent form and Letter 967 (with Publication 1035) separately to each individual filing a joint return.

(6) When Appeals receives a valid signed consent from the taxpayer or authorized representative, the ATE (assigned to the case) or other delegated individual will execute the consent by signing and dating the consent. Update the statute on ACDS using the Statute Validation menu. See IRM 8.21.3.2.1.1 for procedures for updating statutes in ACDS. Select the ACDS CARATS action and sub-action code CO-CR at the time the valid signed consent is received from the taxpayer or authorized representative.

(7) If taxpayer contact has been made and the case history documents the date of contact and the desire of the taxpayer to submit the consent by fax, the IRS can accept by fax, the following:

• Consents to assess additional tax (Forms 4549, 870, and others) of any amount;

• Taxpayer closing agreements involving any amount of tax; and

• Consents to extend the time to assess tax (Forms 872, SS-10, and others).

(8) Account and Processing Support (APS) will update the statute on AIMS within 5 business days of receipt of the update request.

(9) If the statute is not updated on AIMS within 5 business days of the notification, you are responsible for contacting the PTM for resolution.

(10) Take the following steps after executing a consent form to extend the statute:

1. Prepare Letter 968 and send it to the taxpayer and the authorized representative with a copy of the executed consent.

2. Attach a copy of the executed consent to each affected tax return.

   Note: It is no longer a requirement to attach Letter 967 to each affected return since the taxpayers' notice of rights is located directly above the signature lines of the consent form. However the letter must be attached if the Power of Attorney signs the consent on behalf of the taxpayer(s).

3. When the designated individual shown on the Power of Attorney signs the consent form on behalf of the taxpayers, attach a copy of the Letter 967 that was mailed to the taxpayer to the return(s), along with the executed consent form, as this will verify that the taxpayer was provided their rights.

4. Document the CAR that the executed consent form, Letter 968, and Publication 1035 were sent to the taxpayer and representative (if applicable).

(11) Consents pertaining to returns (including dummy returns where the original return wasn't available) under the control and jurisdiction of Appeals are prepared, executed, and accepted in duplicate. Attach the original executed consent to the reverse side of the front page of the latest year's return. Attach copies of the executed consent to the reverse side of the front page of the return of the other years covered in the consent.

(12) If required consents aren't obtainable or the consents aren't acceptable, Appeals issues a SND for taxes and/or penalties subject to a petition to the United States Tax Court and takes necessary action(s) to protect the Government's interests for all other taxes. See IRM 8.7.1, Guidelines for Cases with Special Issues, for information about cases involving criminal prosecution.

(13) Never alter the extension date on the consent form. Prepare new consents, if the date is in error or needs to be changed.

(14) When prepayment credits are overstated, determine whether a different statutory period of limitation applies to such credits and take action to protect the Government’s interest. When claimed prepayment credits are understated and expiration of the statutory period of limitation is imminent, invite the taxpayer, in writing, to file a claim for refund to protect his or her interests.

(15) Scrutinize the signed consent form for any unauthorized alterations, and inform your ATM of such unauthorized alterations.

(16) Follow all of the above procedures each time a consent is solicited.

(1) The following table contains a list of consent forms for extending or terminating statutes of limitations:

(1) In each gift tax case in which a husband and wife elect to split their gifts pursuant to IRC 2513, prepare two sets of consent agreements in duplicate for each taxable year using Form 872 or Form 872-A. Prepare one set for the husband as donor with the wife as consenting spouse, and another set for the wife as donor with the husband as consenting spouse. The signature of both spouses must appear on all the forms.

(1) When jurisdiction of a case is transferred to Counsel, then Counsel becomes responsible for controlling the statute on any returns in the file or for any returns requisitioned. Prominently reflect that Counsel now has control of the statutes in the remarks section of Form 2828, Transmittal Memorandum, or in Item 11 of the Form 5402, Appeals Transmittal and Case Memo. Counsel may request that Appeals execute the consents that they secure.

(1) If you determine that a consent isn't necessary,

1. Complete Form 10495, Memorandum Re Statute, when at least 120 days remain on the statute and no statute protection is necessary.

2. Secure your ATM's counter signature.

3. Attach a copy of the Form 10495 to each affected tax return.

4. Update the ACDS statute code to "10495" and remove the actual statute date, using the Statute Validation Systems (SVS) Menu.

5. Refer to IRM 8.21.3.2.1.1 for procedures for updating statutes on ACDS.

(1) IRC 6502 provides that the length of period for collection after assessment of a tax liability is generally ten years. IRM 5.1.19, Field Collection Procedures, Collection Statute Expiration, provides the reasons for Collection Statute Expiration Date (CSED) suspensions.

(2) The Restructuring and Reform Act of 1998 (RRA 98), enacted on July 22, 1998, amended IRC 6502(a) to eliminate the Service's authority to extend the collection statute of limitations by agreement for requests made after December 31, 1999. Any extension of the collection period already in effect on December 31, 1999, expires on the later of the last day of the 10-year collection period in IRC 6502(a) or December 31, 2002. There is an exception for extensions relating to the acceptance of an installment agreement. Refer to IRM 5.14.2, Installment Agreements, Partial Payment Installment Agreements and the Collection Statute Expiration Date (CSED).

(3) Delegation Order No. 25–2 delegates the authority to execute agreements to extend the period of limitations on assessment or collection and to accept Form 900, Tax Collection Waiver. Refer to IRM 1.2.52.3. If Appeals secures an extension of the statutory period for collection using Form 900, prepare the form in accordance with IRM Part 5, Collecting Process.

(4) ATEs should document their Case Activity Record of imminent CSEDs. Refer to IRM 8.21.5, Collection Statutes.

(1) Appeals considers cases where the taxpayer doesn't agree to a potential deficiency or overassessment even though, as a result of carrybacks, there's no deficiency or overassessment. In such instances assessment of restricted interest may have to be made.

(2) Assess restricted interest on potential deficiencies (before allowance of carrybacks) within the period of limitations applicable to the tax even though the deficiency in tax was eliminated by the carryback.

(3) If you can't obtain a consent or if the consent secured isn't acceptable, complete Form 2285, Concurrent Determinations of Deficiencies (Increases in Tax) and Overassessments (Decreases in Tax) in Cases Involving Restricted Interest Provisions of the Internal Revenue Code, and a Form 5403. Generally, the TCS employee prepares Form 2285. See IRM 8.17.6.4, Preparation of Form 2285.

(4) Forward the case to the appropriate APS office for computation and assessment of the restricted interest.

(1) Unrelated Business Income Tax — Unrelated business income tax under IRC 511 is reported on Form 990-T, Exempt Organization Business Income Tax Return. The period of limitations on assessment of unrelated business income tax begins when the tax exempt organization files the information return (Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation,Form 990, Return of Organization Exempt From Income Tax, or Form 990-EZ, Short Form Return of Organization Exempt from Income Tax) or on the due date of such information return, whichever date is later. If the period of limitations on assessment is expiring, secure the necessary consents from the tax exempt organization on Form 872.

(2) Income Tax on Revoked Organizations — An organization whose tax exempt status under IRC 501(a) is revoked is subject to income tax under IRC 11, unless it's a trust subject to tax under IRC 641. The period of limitations on assessment of income tax generally begins when the tax exempt organization files the information return (Form 990-PF, Form 990, or Form 990-EZ) or on the due date of the information return, whichever date is later. IRC 6501(g)(2). If the period of limitations on assessment is expiring, secure the necessary consents from the tax exempt organization on Form 872.

(3) Chapter 41 and Chapter 42 Excise Taxes — Acts (or failures to act) that are subject to excise taxes under Chapter 41 and Chapter 42 are reported by the tax-exempt organization (or Section 4947(a) trust), and by the managers, self-dealers, disqualified persons, donors, donor advisors, and related persons, on Form 4720, Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code. The period of limitations on assessment of Chapter 41 and Chapter 42 excise taxes against the tax-exempt organization (or section 4947(a) trust), and the managers, self-dealers and other applicable persons, generally begins when the tax-exempt organization (or section 4947(a) trust) files the information return Form 990-PF, Form 990, Form 990-EZ or Form 5227) for the period when the act (or failure to act) occurred, or when such information return is due, whichever is later, IRC 6501(l). If the period of limitations on assessment is expiring, secure the necessary consents on Form 872 from each of the tax-exempt organizations (or section 4947(a) trust), and the managers, self-dealers and other application persons.

(4) See IRM 7.27.30.11, Period of Limitations, for more details and instructions regarding the completion of Form 872.

(1) When multiple years exist and all are extended to the same date, use one consent Form 872 or Form 872-A, executed in duplicate. If the extension is restricted to one or more issues, use a multiple-year consent only when the same restriction applies to all tax years.

(2) Securely attach the original executed consent to the return of the latest year involved. Attach a copy of the executed consent to the returns for each of the other years covered by the consent.

(1) Use one Form 872, Form 872-A, Form 872-B, or Form SS-10 to obtain a consent for a parent corporation and all of its subsidiaries. See IRM 25.6.22.6.2.3, Parent and Subsidiary Corporations, for additional guidance on the preparation of consents in Parent-Subsidiary Corporate settings.

(2) Securely attach the original executed consent to the parent corporation’s latest return and copies of the executed consent to each additional return of the parent and to the returns of the subsidiary corporations.

(3) Rather than attaching copies of the executed consent to each additional return of the parent and the returns of the subsidiary corporations, you can attach a statement to each one showing the following:

1. Name

2. Address

3. Identification number of the parent corporation

4. Office in which the return of the parent corporation was filed

5. Year(s) or period(s) involved

6. Period of extension agreed to in the consent

(1) For consolidated income tax returns, one consent suffices to cover all companies included in the consolidated income tax return.

(2) Generally the parent (or substitute agent), acting as agent for the group, executes Form 872 or Form 872-A covering Chapter 1 Income Taxes. This authority of the parent (or substitute agent) does not extend to taxes outside Chapter 1 Income Taxes such as excise taxes, employment taxes, or withholding taxes on foreign parties (IRC 1441 and IRC 1442; Treas. Reg. section 1.1502-77B(a)(3)(ii)) [effective for consolidated return years beginning on or after June 28, 2002 and before April 1, 2015 - the current regulation is 1.1502-77, effective for consolidated return years beginning on or after April 1, 2015.]

(3) A determination of a consolidated group is done on a year-by-year basis and only the parent or the agent for that consolidated return year can sign the consent with respect to that consolidated year. See IRM 25.6.22 for additional guidance on preparation of consents in consolidated settings.

(1) Generally, approval from Area Counsel must be obtained before securing consents from the dissolved corporation. See IRM 25.6.22, for detailed information concerning this issue.

(1) The period of limitations on civil liability starts from the date of delinquent filing in a case involving willful failure to file provided the delinquent return is non-fraudulent. This applies even if circumstances surrounding initial non-filing are sufficient to support the fraud penalty.

(2) If the period of limitations is about to expire and criminal prosecution is pending, do not take action to secure consents without the concurrence of Counsel. See IRM 8.7, Technical and Procedural Guidelines.

(1) IRM 25.6.22.8, Restricted Consents, provides details concerning restricted consents, including the taxpayers rights, issues not subject to restrictions, restrictive statements, etc.

(2) When a restricted consent is secured on a case, all future consents for that case must contain the same restrictions.

(1) See IRM 25.6.22.7.1, Special Consent to Extend the Time to Assess Tax, for details concerning Special Consents Form 872-A and the procedures to follow when there is a termination of the Special Consent.

(2) A Form 872-T sent by Appeals may only be signed by the Operating Unit Director or his/her delegate, Appeals Team Manager or Appeals Team Case Leader.

(3) In Letter 968, inform the taxpayer that a Form 872-T (used to terminate Form 872-A) may be requested from the Appeals Technical Employee.

(4) Form 872 is accepted in place of Form 872-A, if the taxpayer prefers Form 872. Form 872-A is requested only at the time Form 872 is normally requested and may be used as a renewal consent if Form 872 was previously executed. Cases involving Form 872-A receive the same priority of attention and expeditious consideration as those involving Form 872.

(5) Termination of Form 872-A by the taxpayer is rare. For special rules concerning the termination of a special consent on an accumulated earnings tax case or a personal holding company tax case, see IRM 25.6.22.7.1.8, Accumulated Earnings Tax, and IRM 25.6.22.7.1.9, Personal Holding Company Tax.

(6) For Joint Committee cases involving Form 872-A, see IRM 8.7.9, Joint Committee Cases.

(1) Use Form SS-10, to extend the period for assessment of taxes imposed by the Federal Insurance Contributions Act (FICA) including FICA tax on tip income (with exceptions - see IRM 25.6.22.6.10.2), Federal Unemployment Tax Act, the Railroad Retirement Tax Act, and Code provisions relating to withholding of income tax on wages at the source.

(2) See IRM 25.6.22.6.10, Employment Taxes, for information concerning consents on employment tax cases, including employee share of FICA, FICA on tips and trust fund recovery penalty cases.

(1) The general instructions for consents (see above) also apply to cases where the civil fraud penalty is asserted, i.e., the Appeals Technical Employee generally asks the taxpayer to execute a consent prior to the expiration of the three year period under IRC 6501(a) or the six year period under IRC 6501(e), if applicable. If the civil fraud penalty isn't asserted and the case is solely open under IRC 6501(e), consider obtaining a consent prior to the expiration of the six year period.

(2) Language restricting the consent may be added to the consent form. For example, "This consent is subject to the applicability of IRC section 6501(e)."

(3) See IRM 25.6.22.6.17, Special Situations, for additional information on consents involving civil fraud cases and cases involving the 25% omission of income provisions of IRC 6501(e).

(1) Open-ended consents provide an address that the taxpayer must use when mailing or hand carrying a notice of termination of consent. The following table lists open-ended consent forms and their corresponding termination of open-ended consent forms:

(2) Each open-ended consent also tells the taxpayer the address shown on the consent form can be superseded by the address shown on a Form 872-U. Use Form 872-U to notify taxpayers who previously executed an open-ended special consent when one of the following situations occurs:

1. Their case is received from Compliance.

2. Their case is transferred to an ATE who is working at a location other than the one shown on the consent form.

3. There is a change in the location or mailing address of the Appeals office working the case.

(3) The following identifies who sends Form 872-U to notify the taxpayer and authorized representative (if applicable) of a change in the IRS address for terminating an open-ended consent:

1. Cases coming to Appeals from Compliance with an open-ended consent: The ATE assigned to the case sends Form 872-U to notify the taxpayer of the address change.

2. Change in ATE’s location: The receiving ATE sends Form 872-U to notify the taxpayer of the address change.

3. Change in office address: The ATE assigned to the case sends Form 872-U to notify the taxpayer of the address change.

(4) Refer to IRM 25.6.22.7 for additional guidance on open-ended consents.

(1) See IRM 8.21.6, Statute Information on TEFRA Cases.

(1) The statute of limitations can't be extended to make an assessment on excessive claims under IRC 6206 for claims filed under IRC 6416(a)(4), IRC 6420, IRC 6421, and IRC 6427. Refer to IRM 8.7.10, Excise Tax Cases and IRA Adjustments, for additional guidance on Excise Tax Cases.

(2) The time period for making assessments of tax under IRC 6206 can't be extended.

(3) Appeals will accept pre-assessed IRC 6206 cases with at least 270 days remaining on the statute.

(4) Cases with less than 270 days remaining on the statute will be returned to Compliance for assessment.