4.4.17. Jeopardy Assessments/Termination Assessments/Transferor-Transferee Assessments

(1) A Jeopardy Assessment is an assessment against the Taxpayer’s Correct Taxpayer Identification Number (TIN).

(2) The Area Office must provide notice by E-mail or telephone to the CCP Field Office Resource Team (FORT) manager or the Field Liaison as soon as it is known that a jeopardy assessment is being made(preferably within 48 hours before assessment).

(3) EFax all preliminary paperwork to the FORT manager or Field Liaison:

1. Form 2644, Recommendation for Jeopardy/Termination Assessment (Prepare in triplicate) with the Area Director's signature;

2. Area Counsel's Approval Memorandum;

3. Completed Form 3198, Special Handling Notice for Examination Case Processing, for each year;

4. Completed Form 5344, Examination Closing Record, for each year;

5. Form 4549, Income Tax Examination Changes, with all schedules for all years, and

6. Specific written instructions stating to whom the FORT manager should EFax the completed Form 3552, Prompt Assessment Billing Assembly, once the assessment is made.

(4) The original Form 2644 will be sent to the FORT manager via express mail.

(1) Upon receipt of the EFaxed package listed in IRM 4.4.17.5.1, the following information must be provided to Ogden Campus Accounting to advise them that a jeopardy assessment is being EFaxed:

• Taxpayer's name, address and TIN;

• Taxable period;

• Type of tax;

• Amount of tax, penalty (with appropriate transaction codes), interest to be assessed (computed by the examiner to the likely assessment date) and credit adjustments and/or credit reference numbers;

• Amount of payment, if any;

• Balance due and

• Document Locator Number (DLN) and 23C date (Date of Assessment).

  Note: If the jeopardy assessment is for a delinquent return or a terminated period, it must be shown separately and called to the attention of the assessment officer.

(2) Either the FORT Manager or employees will prepare Form 2859, "Request for Quick or Prompt Assessment", by year, using the information provided by the Area and approved by the Area Director, referenced in IRM 4.4.17.5 1(3).

(3) The 23C date must be the date Form 2644 was signed by the Area Director.

(4) "JEOPARDY ASSESSMENT" will be notated across the top of Form 3210 and include EFaxing instructions (as determined in IRM 4.4.17.5.1(3)) for the confirmation Form 3552.

(5) EFax all forms received from the Area plus the Form 2859 to Ogden Campus Accounting at (855) 235-8844.

(6) Within one day of the assessment, the following will be EFaxed to the Campus Accounting Operation, Accounting Control System, Journal and Ledger Unit:

1. The original and one copy of Form 2644;

2. Form 3198;

3. Form 5344 for each year;

4. Form 4549 and

5. Copy of narrative and pattern letter (with attached tax computation)

(7) A package of the above documents listed in paragraph (6) should be mailed to the attention of attention of the assessment officer in OIRSC (Ogden Internal Revenue Service Campus) previously contacted for verification that the correct assessment has been made.

(1) OIRSC Accounting Control Assessment Team will make the assessment and prepare Form 3552.

(2) The assessment officer will telephone the Technical Services Manager and the Collection Officer to acknowledge the assessment has been made.

(3) After processing, a confirmation copy of Form 3552 and Form 2859 is EFaxed to both the Technical Services Manager and the Collection Officer (per the original instructions) and must be associated with the control copy (submitted and assessed Form 2859 and Form 3552) in CCP.

(4) Additional resources: IRM 3.17.244.2.4, Processing Time Frames for Tax Day Assessment Deadline, IRM 3.17.244.3.9, Preparation of Form 3552, Prompt Assessment Billing Assembly, IRM 3.17.244.3.10, Description of Form 3552, Prompt Assessment Billing Assembly, IRM 4.4.25.12, Quick Assessment Verification Form 3552, CCP or Campus Examination Procedures and IRM 4.4.25.12.1, Follow-up on Form 3552.

(1) A Termination Assessment is one of two types of an assessment.

(2) Termination applies if a return is not yet due (including extensions) and can be a partial year.

(3) Since a return is not yet due, the case is controlled on Non-Master File (NMF), using Form 5354, Examination Request Non-Master File.

(4) An immediate assessment is made on the termination year.

(5) After the assessment is made, the case is held in suspense pending action by the taxpayer.

(6) A Transaction Code (TC) 914, "Active Criminal Investigation" is placed on the Master File account and should not be removed until a return is filed or a return is due and not filed and Master File controls are needed.

(1) When the assessment involves the termination of a taxpayer's year, the liability for the terminated tax period is handled as a jeopardy assessment at the time of termination - See IRM 4.4.17.5.

(2) The package sent to the FORT by the Area is the same as described for Jeopardy Assessments IRM 4.4.17.5.1 except Form 5344 is not prepared.

(3) The termination assessment is made as a short period NMF assessment.

(4) To prevent possible forfeiture of lien rights, the original short period assessment must not at any time (prior to determination of the tax liability for the full year) be reduced to an amount less than the current tax liability for the full year.

(5) When the case is received by Processing for assessment of the full period, the termination NMF assessment will be transferred to Master File.

(1) When the case is ready for final closure on the full year, process the case as follows:

1. After ensuring the TC 914 (Active Criminal Investigation) has been released, input TC 570 using Form 3177, Notice of Action for Entity on Master File.

2. Request the assessment done by Service Center Accounting on the NMF short period (termination assessment) be transferred to Master File using Form 3465, Adjustment Request.

• The transfer will be with a TC 290 and will maintain the 23C date (used to officially assess tax liabilities). The 23C date is the TC 150 posting date of the original termination assessment.

• If the combined termination period and full period credits exceed the combined debts, request that Accounting transfer the credits with a secondary TC 570 for $0 to hold the credits until the TC 300 posts.

(1) IRM 4.11.52.5(3),Examining Officers Guide (EOG) - Transferee Liability Cases, instructs the field group employees (LB&I, W&I and SB/SE) to establish a transferee case as a "DUMMY" record.

1. ERCS will not allow both a Master File and a Non-Master File (NMF) control for the same person/entity.
   

2. AIMS will not allow a Social Security Number (SSN) with a Business Master File (BMF) Master File Transaction (MFT) code.
   

3. A "DUMMY" file must be established for the transferee case using the transferee's TIN with "-D" ("DUMMY") and the title "Transferee" after the name to indicate transferee status.
   

4. Using the "-D" eliminates the other dashes in the TINS so both ERCS and AIMS will accept the number with the NMF MFT of the transferor.

   Example: Smith, John, Transferee, 123456789-D, MFT 80, or Big Trucks, Transferee, 123456789-D, MFT 80.

(1) Technical Services will:

1. Prepare Form 1296, Assessment Against Transferee or Fiduciary for the transferee reflecting the transferee's TIN using the "N" format:

• For individual transferees: nnn-nn-nnnnN

• For non-individual transferees: nn-nnnnnnnN

Note: If the transferee has limited liability, Form 1296 will be annotated with the date(s) the interest should begin and the amount of tax associated with each date.


2. Prepare and input Form 5354 to provide CCP inventory controls on AIMS and ERCS during the assessment process.

3. Prepare Form 3198 with "TRANSFEROR" or "TRANSFEREE" notated across the top. Clearly note on the Form 3198 that both the transferor and transferee files are included.

4. Close the transferor master file record and the transferee "N" record(s) on ERCS to CCP Status Code 51 with Disposal Code 03, 04 or 09 as appropriate.

   Note: ERCS will update the AIMS record with the new status.

5. Prepare Form 10904, Request for Record Deletion from AIMS, for the "-D" record to be deleted from AIMS. Forward to the local AIMS/ERCS staff for processing using Disposal Code 28 or AMNON "D".

(2) If the transferor case has been previously closed and the transferee case is to be closed follow the procedures below:

1. Prepare Form 1296 for the transferee reflecting the transferee's TIN using the "N" format as instructed in text IRM 4.4.17.7.2(1)(a).

2. Prepare and input Form 5354 to provide CCP inventory controls on AIMS and ERCS during the assessment process.

3. Prepare Form 3198 with "TRANSFEREE" across the top.

4. Prepare a copy of the transferee administrative file to be associated with the transferor file under the TC 421 DLN of the transferor TIN.

5. Close the transferee NMF "N" records on ERCS to CCP Status Code 51 with Disposal Code 03, 04 or 09 as appropriate.
   

   Note: ERCS will update the AIMS record with the new status.

6. Prepare Form 10904 for the "-D" record to be deleted from AIMS. Forward the Form 10904 to the local AIMS/ERCS staff for processing using Disposal Code 28 or AMNON "D". Include a copy of the administrative file to be associated with the transferor file.

7. The AIMS/ERCS unit will process the Form 10904 and will forward the transferee administrative file to the campus to be associated with the transferor file using the TC 421 DLN found on Master File.

(3) CCP will:

1. Prepare Form 2859 to process the adjustment per Form 1296.

2. Forward Form 2859 to Ogden Campus Accounting. The adjustment will be reflected under the "N" TIN.

   Note: This assessment may be mailed, telephoned, or EFaxed to Accounting.

(1) Technical Services will:

1. Prepare Form 1296 for the transferee reflecting the transferee's TIN using the "N" and formatted as instructed in IRM 4.4.17.7.1(1). Also, if the transferee has limited liability annotate the Form 1296 as stated in IRM 4.4.17.7.2(1)(a).

2. Prepare and input Form 5354 to provide CCP inventory controls on AIMS and ERCS during the assessment process.

3. Prepare Form 3198 with "TRANSFEROR" or "TRANSFEREE" across the top. Clearly note on the Form 3198 that both of the transferor and transferee files are included.

4. Close the transferor master file record and the transferee NMF "N" record(s) on ERCS to CCP Status Code 51 with Disposal Code 10 or 13 as appropriate.
   

   Note: ERCS will update the AIMS record with the new status.

   
   

5. Prepare Form 10904 for the "-D" record to be deleted from AIMS. Forward to the local AIMS/ERCS staff for processing using Disposal Code 28 or AMNON "D".

(2) If the transferor case has been previously closed and the transferee case is to be closed:

1. Prepare Form 1296 for the transferee reflecting the transferee's TIN using the "N" format as instructed in IRM 4.4.17.7.1. If the transferee has limited liability see the note in IRM 4.4.17.7.2.

2. Prepare and input Form 5354 to provide CCP inventory controls on AIMS and ERCS during the assessment process.

3. Prepare Form 3198 with "TRANSFEREE" across the top.

4. Prepare a copy of the transferee administrative file to be associated with the transferor file under the TC 421 DLN of the transferor TIN.

5. Close the transferee NMF "N" record(s) on ERCS to CCP Status Code 51 with Disposal Code 10 or 13, as appropriate.
   

   Note: ERCS will update the AIMS record with the new status.

   
   

6. Prepare the Form 10904 for the "-D" record to be deleted from AIMS. Forward the Form 10904 to the local AIMS/ERCS staff for processing using Disposal Code 28 or AMNON "D". Include the copy of the transferee administrative file to be associated with the transferor file.

7. The AIMS/ERCS unit will process the Form 10904 and will forward the transferee administrative file to the campus to be associated with the transferor file using the TC 421 DLN found on Master File.

(3) CCP will:

1. Prepare Form 2859 based on information on Form 1296.

2. Forward Form 2859 to Ogden Campus Accounting for assessment. The adjustment will be reflected under the "N" TIN.
   

   Note: This assessment may be mailed, telephoned or EFaxed to Accounting.

(1) Work the transferor case file as a unit following normal procedures using the appropriate disposal code on Form 5344.

(2) The transferee Form 5344 is completed as follows:

1. Item 13: the disposal code must be an examined disposal code. It cannot be Disposal Code 28, non-master file closings.

2. Item 35: must include the adjustment amount from Form 2859.

3. Item 401: must reflect the whipsaw indicator "R".