25.15.14. Innocent Spouse Tracking System

(1) This IRM provides guidance for use of the ISTS to track requests for relief from joint and several liability and relief from application of community property laws, also known as innocent spouse relief, or innocent spouse claims.

(2) ISTS was established as a means for Area Offices and Cincinnati Centralized Innocent Spouse Operations (CCISO) to provide claim status information to taxpayers, and for Headquarters to retrieve program management data. This data is used to generate inventory reports. These reports are used to plan, complete reviews, and brief management about program accomplishments.

(3) The system was designed to track the request for relief from receipt to closing.

(4) The system is accessed and updated through the Integrated Data Retrieval System (IDRS) using a series of command codes.

(5) ISTS creates a unique record for each request for relief which identifies the taxpayer making the request for relief, tax year, and whether the taxpayer is the primary or secondary spouse.

(1) The information in this section is based upon the following authorities:

1. IRC 66(c), Treatment of Community Income relief provisions.

2. The Code of Federal Regulations (CFR) at CFR section 1.66, contains guidance on requests for relief from federal income tax liability resulting from the operation of community property law.

3. IRC 6015, Relief from joint and several liability on joint return.

4. CFR section 1.6015 code of Federal Regulations guidance on requests for relief from joint and several liability and related proposed regulations, 80 FR 72649-01 issued November 20, 2015.

5. Rev. Proc. 2003-19, administrative appeal rights for the non-requesting spouse.

6. Rev. Proc. 2013-34, guidelines for taxpayers seeking equitable relief from income tax liability under section 66(c) or section 6015(f).

(1) The Director, Examination - Field and Campus Policy , reports to the Director, Headquarters Examination, and is responsible for the delivery of policy and guidance that impacts the field and campus examination process. See IRM 1.1.16.3.5.1, Field and Campus Policy, for additional information.

(2) Campus Exam and Field Support , which is under the Director, Examination - Field and Campus Policy, is the group responsible for providing Servicewide policy guidance on compliance processes that relate to campus examination operations and support Field Exam and Specialty Programs in SB/SE and Large Business & International (LB&I). See IRM 1.1.16.3.5.1.5, Campus Exam and Field Support, for additional information.

(3) Area office employees, such as SB/SE Planning and Special Programs Innocent Spouse Coordinators and SB/SE Technical Services Innocent Spouse Reviewers; Centralized Case Processing technicians responsible for examination case closing, Appeals processors, and CCISO employees are responsible for updating and maintaining the ISTS individual records for innocent spouse relief requests as they move from one stage to another, to ensure the database is current and accurate.

(4) Management in the Area Offices and in CCISO oversee the employees updating the database, work the inventory reports generated to ensure accuracy, and periodically complete the validation processes described in this IRM.

(1) The following is a list of common terms used in this IRM section:

(1) The following table lists commonly used acronyms and their definitions used throughout this IRM:

(1) IRM 25.15, Relief from Joint and Several Liability, all chapters.

(2) IRM 4.8.5, Technical Services, Post Examination Case Processing Requirements.

(3) IRM 4.8.9, Technical Services, Statutory Notices of Deficiency.

(4) IRM 4.1.1, Planning and Special Programs, Planning, Monitoring, and Coordination.

(1) This section defines each of the ISTS stages.

(1) Claims in ISTS Stages 01 through 04 may not be on the AIMS but if they are, they should have an AIMS Status of 08.

(2) If the AIMS status is higher than 08, ISTS will need to be updated to reflect the correct stage.

(3) If the claim has not yet been established on AIMS, check the unit where the cases are built to ensure the claim is there and its current status is accurate before making any necessary corrections.

(4) If the case building unit does not have the case and ISTS Stage is 02, check the date the module was input into Stage 02. If this date is recent, it is possible the case is still in transit.

1. If over two weeks have passed, check with your mail clerk to see if there is a signed Form 3210, Document Transmittal, for the case and if not, contact the sending office to see if they have an acknowledged Form 3210.

2. You may also need to check ISTS to determine if another office has acknowledged receipt of the case. Sometimes ISTS will get updated to one office but the case was mailed to another.

(5) If the ISTS IVL shows a case in Stage 03 but as of the date of the report, the ESTAB has been ordered, correct ISTS to Stage 04.

(6) It is also possible that AIMS will show a Status of 10 or 12 and the ISTS will show Stage 03 or 04. This means when the case was sent to the group, ISTS was not updated. AIMS/ERCS will give you the date of transfer in order to update ISTS.

(1) Claims in ISTS Stage 05 should have an Audit Information Management System (AIMS) status of 10 or 12.

(2) If the status is not 10 or 12, determine why and update ISTS if necessary.

(3) It is possible to have a case in AIMS Status 20 or 21 and the ISTS show Stage 05 until Technical Services updates ISTS to Stage 08 and the AIMS Status to 20.

(4) The clerk in review or the Technical Services innocent spouse reviewer should ensure ISTS is updated when cases are received. If the innocent spouse reviewer does not have the case, check with the clerk to see when it was received and update ISTS if necessary.

(1) Claims in ISTS Stage 06 could have an AIMS status of 24, 30, 31, 32, 36, 38 or 39. These are suspense statuses. See IRM Exhibit 4.7.7-4, TS Reject Reasons, for further information. Status 30 is Form 1254, Examination Suspense Report, Status 32 is General Fraud, Status 36 is Grand Jury and Status 39 is Bankruptcy.

(2) These suspended cases could be with the innocent spouse coordinator or the program coordinator for that AIMS status, depending on office policy.

(3) If you have a case in ISTS Stage 06, determine the AIMS status and check with the coordinator of that program to see if the case has been resolved or it is still being suspended. If the case has been resolved, ISTS will need to be updated to reflect the correct stage.

(4) Use the ERCS to validate. Based on the AIMS status, the appropriate coordinator should be contacted to verify the ERCS status and the ISTS stage agree.

(1) Claims in ISTS Stage 07 typically will have an AIMS status of 80. This stage is used to transfer the database to Appeals or another office that has requested the case.

(2) This stage is also a clearing stage similar to Stage 02. The claim is sent to Appeals in Stage 07 and they acknowledge receipt with another Stage 07, then update ISTS to Stage 15.

(3) If the case is in AIMS Status 81 or 90, contact Appeals and have them update ISTS to reflect the correct stage.

(4) This stage is an Appeals stage and Appeals is responsible for validating. See IRM 25.15.14.6, Validating the IVL - Appeals, for Appeals information.

(1) Claims in ISTS Stage 08 will have an AIMS status of 20, 21 or 25 and should be in Technical Services. Most Technical Services groups can provide a report of their AIMS Status 20 and 21 inventory.

(2) Cases should remain in ISTS Stage 08 until the review is complete. Once the review is complete, ISTS will be updated in Stage 08 to indicate the outcome of the review and then to Stage 11 or 12 if a determination letter is mailed or an agreement is secured.

(3) It is possible to have a case in AIMS Status 20, 21 or 25 and ISTS Stage 05 until review updates ISTS to Stage 08.

(4) If AIMS shows a higher status than 20, and ISTS stills shows Stage 08, determine where the case is located and update ISTS to reflect the status of the case.

(5) If the AIMS status is 22 or 23, used by some offices to identify their 30 day, a preliminary letter should have been sent and the case should be in 30 day suspense in review and ISTS should be updated to reflect Stage 11.

(6) If the AIMS status is higher than 51, it indicates a final determination letter should have been issued or an agreement was secured and the case was closed to Case Processing. In this instance, check with the Technical Services group clerk and/or Innocent Spouse reviewer to determine whether or not the case was closed prematurely. Check with the clerk for the Form 3210 to verify the case was sent to Case Processing. ERCS will have the date Case Processing received the case and identify the tax examiner (TE) assigned the case. ERCS will also have the notification date. These dates will allow you to update ISTS for Stage 12 then 27.

(1) The Area Offices should not use this stage. Centralized Innocent Spouse Case Review (CISCR) is responsible for validating this stage. See IRM 25.15.14.7, Validating the IVL - CCISO, for CCISO information.

(1) Claims in ISTS Stage 10 will have an AIMS Status of 12. This stage is used when a case has been reviewed by local review and determined to need additional work.

(2) If AIMS shows Status 12 but ISTS shows Stage 08, check ERCS for the transfer date to the group and update ISTS accordingly.

(3) If AIMS shows Status 20 but ISTS shows Stage 10, check with the clerk to see if there is a Form 3210, Document Transmittal, returning the case back to the group. If this has happened, the clerk should update ERCS to the group and AIMS to Status 12.

(1) Claims in ISTS Stage 11 could have an AIMS status of 20 or 22 depending on how the area handles their 30 day cases. This stage is input when a preliminary letter has been issued requiring the case to be in suspense for 30 days. Non-qualifying cases may be in suspense as well.

(2) If a case is in AIMS Status 20 or 22 but still in ISTS Stage 08, locate the case in review to determine the date of the letter and then update ISTS accordingly.

(3) If the case is in ISTS Stage 11 but in a status higher than 20, 22, or 23, check the ERCS for the notification date in order to update ISTS.

(4) If the case is in AIMS Status 30, 32, 36, or 38, check with that program coordinator to see if they have the case and if so, ISTS will need to be updated to Stage 06 as of the date the Form 3210, Document Transmittal, was issued. This should be the date ERCS was updated to that status.

(5) If the claim is an open examination case, it should be sent to Technical Services in AIMS Status 21 for mandatory review. Technical Services will update ISTS to Stage 11 and Stage 12 as appropriate depending on the facts of the case. Technical Services will complete mandatory innocent spouse claim review and send the case to Case Processing with instructions to update ISTS accordingly. See IRM 4.8.5.2, Innocent Spouse Cases, for more information.

(1) Claims in ISTS Stage 12 should be in 90 day suspense and AIMS Status 24. This stage is used when a final determination letter has been issued. If something is not matching, ERCS should be checked for the current AIMS status.

(2) If AIMS shows a status of 51 through 57, check ERCS; if the prior status was 24, the case has now defaulted. Update ISTS to Stage 27 as of the date it was assigned to a TE.

(3) If AIMS shows status 90, check ERCS for the date of the status change, call the tax examiner assigned to the case and get the dates to input 27 and 28, for partials and grants

(4) If AIMS shows a status of 82 and ISTS still shows Stage 12, ISTS should be updated to Stage 19, Tax Court Petitioned.

(5) If the case is an open examination case, ISTS Stage 12 should be input as of the date a signed agreement is received or the date the statutory notice and final determination letters are issued by Technical Services. See IRM 4.8.9.16.11, IRC 6015: Relief from Joint and Several Liability On Joint Return(s), for more information. All cases in open examination involving innocent spouse claims must be closed to Technical services for mandatory innocent spouse review per IRM 4.8.5.2, Innocent Spouse Cases. Therefore, the AIMS status corresponding to this stage could be status 21, 20 or 24.

(1) These stages are no longer required for the area offices.

(1) Claims in ISTS Stage 15 and 16 should have an AIMS status of 80 or 81. These are Appeals statuses and they should update ISTS to the next stage. See IRM 25.15.14.6, Validating the IVL - Appeals, for Appeals information.

(1) Claims in ISTS Stage 19 and 20 should have an AIMS Status of 82. This is a Counsel status and they are responsible for updating ISTS to the next appropriate stage. See IRM 25.15.14.6, Validating the IVL - Appeals, for Appeals information.

(1) Claims in ISTS Stage 23 should have an AIMS Status of 90. This stage indicates the claim was shipped to CCISO for processing and they are responsible for validating this stage.

(2) If the AIMS Status is not 90, contact Case Processing to see if the input of the TC 300 went unpostable and correct it.

(1) Between July 2006 through February 16, 2009, this was a reserved stage. Effective February 17, 2009, the activity "RECON" will systemically generate to identify the case as a reconsideration claim. Claims in ISTS Stage 24 should have an AIMS Status of 10 or 12.

(1) Claims in ISTS Stage 25 should have an AIMS Status of 20 and be located in Technical Services. This stage should be used only when it is necessary to re-issue a preliminary or final determination letter.

(2) This stage is a prerequisite for updating ISTS to a second Stage 11.

(1) Claims in ISTS Stage 26 should have an AIMS status of 90. This stage should be used when situations occur that prevent the processing of an account from MFT 30 to MFT 31. It should also be used for claims when either taxpayer is overseas preventing the claim from being completed (Combat Zone) or if either taxpayer is being investigated by Criminal Investigation.

(2) Case Processing or Technical Services will monitor these claims until the situation changes to allow the continuation of the claim.

(3) If AIMS is closed the TC 971 AC 065 should remain on the account to ensure no collection activity is taken against the RS.

(1) Claims in ISTS Stage 27 should have an AIMS status of 51 through 57. This stage is used while the case is in the closing unit, during the time period they are determining the amounts to assess MFT 30 and/or MFT 31.

(2) If the status is 90, check the ERCS for the date the status changed, then call the tax examiner (TE) assigned the case to determine if the transfer process to MFT 31 has been completed. If this has been completed, update ISTS to Stage 28 as of the date the paperwork was sent. For an open examination, use the date the TC 300 was posted.

(3) If the status is 51 through 57 and it has been in Stage 27 for over 30 days, check ERCS for the TE assigned the case. Call the TE to check the status of the case.

(1) Claims in ISTS Stage 28 should have an AIMS Status of 90. Stage 28 indicates the MFT 31 transfer process has been initiated for a partial or full grant. This should only be done on a closed case. You should not have any other AIMS statuses for this stage. If you do, you should check with Case Processing because it would mean their TC 290 or TC 300 went unpostable thus leaving AIMS in open status.

(2) If a claim has been in this stage for more than 6 months, check the IDRS command code (CC) TXMOD to see if the account has been transferred. The tax examiner (TE) should be contacted to determine if there is a problem. If the IDRS CC TXMOD has a TC 400 and 402, ISTS should be updated to Stage 30.

(1) Claims in ISTS Stage 29 could have an AIMS status of 51 through 57 until the case is closed through Case Processing on AIMS. ISTS should be updated to Stage 30 once the AIMS controls are closed.

(2) If you have several years on a claim and only one year is non-qualifying, you could have an AIMS status other than 51 through 57. ERCS will indicate the location of the case and whether there are other years involved that would prevent the case from closing.

(3) If one year is a partial or denial, the case will be kept together for 30 days and be in Status 20, 22 or 23 until the final determination letter is issued. At this point, ISTS should be updated to Stage 12 for the other year and the case will reflect Status 24 for both years.

(4) It will stay in Status 24 until default. Upon default, the case should be updated to Stage 27 and the Stage 29 will reflect the correct AIMS status of 51 or higher.

(5) Claims should not be in this stage for more than 30 days unless other years are preventing closure of the claim. ERCS should be used to identify the TE and contact made to determine as to the reason for the delay.

(1) ISTS Stage 30 should always have an AIMS status of 90. This stage is input upon completion of the case.

(2) If the claim was denied, it is input when the AIMS controls are closed in Centralized Case Processing.

(3) If the claim was a partial or a full grant, it is input after the MFT 31 transfer process is complete or after the appropriate tax has been assessed to the MFT 30 and/or MFT 31 accounts.

(4) This stage does not require validation.

(1) Claims in ISTS Stage 31 should always have an AIMS Status of 90. This stage is used when letters are sent to the RS on closed claims.

(2) This stage does not require validation.

(1) This stage indicates a transfer of the ISTS control to Appeals or another office that requested the claim.

(2) This stage is also a clearing stage similar to Stage 02. The claim is sent to APPEALS or other office and they acknowledge receipt by inputting another Stage 07 and update to Stage 15.

(3) If a claim is in this stage and the Appeals Centralized Database (ACDS) shows the claim assigned to an appeals officer, then ISTS should be updated to Stage 15.

(1) Claims in this stage indicate the claim is open in Appeals and assigned to an appeals officer.

(1) Claims in this stage indicate Appeals has made a final administrative determination.

(1) These stages are no longer required.

(1) Claims in this stage indicate a petition has been filed.

(2) Updates to earlier ISTS stages might occur for an innocent spouse issue first raised in the petition for the docketed deficiency case (if Form 8857, or equivalent statement, is also filed). If this occurs, ISTS might be updated to other stages to reflect the initial consideration of the claim, Appeals assignment, Appeals determination and/or eventually Stage 20.

(1) Claims in this stage indicate the innocent spouse issue was under the Tax Court’s jurisdiction and a decision has been made.

(2) The Appeals ACDS should indicate a date in the "DATECLSD" field and a closing code of 21 or less in the "CLOSINGCD" field.

(1) Because ISTS Stages 01, 02, 03, 07, and 29 are pass-through stages, input the IDRS CCs ISTSRT and SUMRY to determine if there are other years to be considered. Generally claims left in stages 01 and 03 over 15 days are often input errors. Verify the accuracy of the input by using IDRS CC INOLES to verify the TIN and name control. Use the ISTS database to determine the correct record. A search of the database can be done by the name control or the TIN. Incorrect records should be indicated on the IVL and deleted or corrected.

(2) Claims in ISTS Stage 02 and 07 should be acknowledged within 3 business days of the receipt of the claim. Claims in Stage 02 are sometimes delayed while the documents are being secured. Check with management before validating so work is not duplicated. The Stage 02 listing is printed weekly and is worked in the First Read area.

(1) Claims in ISTS Stage 04 and 06 inventory are filed by TIN. The listing should be validated against inventory in 04/06 file. Any claim not located should be researched using the IDRS. The overage listing for these stages is printed weekly and worked in the First Read area. Check with management to prevent duplication of efforts.

(1) Claims in ISTS Stage 05 and 10 are assigned to individual employees or teams. Claims in Stage 05 for more than 45 days and Stage 10 for more than 30 days should be documented on the IVL as to the reason of the delay. Incorrect records should be updated to the correct stage.

(1) Stage 08 should only be used by SB/SE Technical Services. CCISO should use Stage 09 for their quality review. Claims in ISTS Stage 09 should not remain in this stage for more than 2 weeks.

• If IDRS reflects a Full Scope unit control, the case was returned to that unit to be reconsidered. Correct ISTS to Stage 10.

• If IDRS controls are closed but ISTS still shows Stage 09, check with the clerk to determine if the case was returned to Files.

(1) Claims in ISTS Stage 11 should not remain more than seven calendar days past the 45 days. Management should be consulted if claims remain over this time frame and annotated on the IVL as to the reason for the delay.

(1) Claims in ISTS Stage 12 should not remain for more than seven calendar days past the 106 days. Management should be consulted if claims remain over this time frame and annotated on the IVL as to the reason for the delay. The IDRS CC TXMOD should be researched for a TC 290 with RC 097 or RC 098 and closed controls. If this is the case, update ISTS history.

(1) Claims in ISTS Stage 24 should not remain in this stage for more than 60 days. Management should be consulted if claims remain in this stage over this time frame and annotated on the IVL as the reason for the delay.

(1) Claims in ISTS Stage 25 should not remain in this stage for more than seven calendar days. Management should be consulted if claims remain in this stage over this time frame and annotated on the IVL as the reason for the delay.

(1) Generally, claims in ISTS Stage 26 should not remain in this stage more than 180 days; however, cases that are suspended longer than that should be documented, at least every 180 days, that a follow up was made, and further suspense is warranted. See IRM 25.15.19.2, Freeze Codes, for more information. Management should be consulted if claims remain in this stage over this time frame. Annotate the IVL as to the reason for the delay.

(1) Claims in ISTS Stage 27 should not remain in this stage for more than 60 days. Management should be consulted if claims remain over this time frame. Annotate the IVL as to the reason for the delay.

(1) Claims in ISTS Stage 28 should not remain for more than 120 days. If account actions are complete, then update ISTS to Stage 30. Management should be consulted if claims remain over this time frame. Annotate the IVL as to the reason for the delay.

(1) Claims in ISTS Stage 29 should not remain for more than 7 days. Management should be consulted if claims remain over this time frame. Annotate the IVL as to the reason for the delay.

(1) There is no validation required.