part5-11

5.1.12 
Cases Requiring Special Handling

5.1.12.1 
(05-20-2008)
Cases Requiring Special Handling – Overview

  1. This IRM provides instructions and guidelines for working cases which
    require special handling. The procedures are written specifically for revenue
    officers due to the complex nature of the collection cases assigned to them.
    Other employees in SB/SE and employees in other functions may also refer to
    these procedures.

  2. Follow the appropriate procedures when you are working the specific
    type of case shown below:

    • Identity Theft

    • Disaster/Emergency Relief

    • Taxpayer Request to Record an In-Person Interview

    • Authorized IRS e-file Provider

    • Income Tax Assessed Against a Child,

    • Household or Agricultural Employee

    • High Assault Risk Area (HARA)

    • “Innocent Spouse”

    • Non-Petitioning Spouse

    • Child Support Obligation (CSO)

    • Taxpayers Exempt from Taxation for Religious Reasons

    • Insolvent Financial Institutions — Provisions of the IRS-RTC/FDIC
      Agreement

    • Foreign Insurance Company

    • Political Activity

    • Criminal Probation

    • Math or Clerical Error

    • Non-Receipt of Refund Check

    • False Refund Claim

    • Refund Offset

    • U.S. Tax Court Subpoena

    • Backup Withholding

    • Indian Tribal Governments

    • Mutual Collection Assistance Request (MCAR)

    • Treasury Enforcement Communications System

    • Certain Wrongful Levy Situations

    • Courtesy Investigations

  3. Refer to IRM 5.11,
    Notice of Levy    , for guidance on certain wrongful levy situations.

  4. Refer to IRM 5.1.8.7,
    Courtesy Investigations Requiring Special Handling    , for guidance on
    Courtesy Investigations which require special handling.

5.1.12.2 
(05-20-2008)
Identity Theft

  1. IRS operations have an effect on victims of identity (ID) theft, such
    as resolving duplicate returns or engaging in various compliance activities
    that target unreported income. When these situations occur, the innocent taxpayer
    must provide the IRS documentation to establish that he or she is a victim
    of ID theft. Inconsistent documentation standards may cause unnecessary burden
    on taxpayers attempting to resolve adverse tax situations caused by ID theft.

  2. The IRS has established the Identity Theft and Incident Management office
    responsible for an agency-wide Enterprise Strategy comprised of three components
    — outreach, victim assistance, and prevention. Click on this link for
    general information about ID theft: http://irweb.irs.gov/Privacy/pip/itim/idtheft.html

  3. To reduce the burden on taxpayers, the IRS has established standard
    documentation requirements for resolving cases that involve ID theft.

  4. This IRM provides procedures for working with taxpayers who are victims
    of ID theft, working with taxpayers who perform ID theft, and handling security
    breach incidents.

5.1.12.2.1 
(05-20-2008)
Standard Identity Theft Documentation Requirements

  1. Request documentation to establish that the taxpayer was a victim of
    ID theft when a taxpayer alleges that he or she was a victim of ID theft.

  2. Request the following documentation to establish that the taxpayer was
    a victim of ID theft:

    • Authentication of identity, and

    • Evidence of lD theft.

5.1.12.2.1.1 
(05-20-2008)
Substantiation Documentation

  1. Substantiation documentation must be legible and accurately associated
    with the correct taxpayer.

  2. Collect substantiation documentation in a timely, accurate, and secure
    manner.

  3. Apply stringent safeguards when storing and retaining substantiation
    documentation. Store the substantiation documentation along with the case
    file.

  4. Secure and handle substantiation documentation and information in the
    same manner as other sensitive taxpayer personal information.

5.1.12.2.1.1.1 
(05-20-2008)
Who Can Substantiate ID Theft?

  1. Accept substantiation documentation from the taxpayer or someone who
    has power of attorney for the taxpayer per Form 2848
    .

5.1.12.2.1.2 
(05-20-2008)
Authentication of ldentity

  1. Secure a copy of a valid U.S. federal or state government-issued form
    of identification to authenticate identity.

    Example:

    Drivers
    license, State Identification Card, Social Security Card, Passport, etc.

5.1.12.2.1.3 
(05-20-2008)
Evidence of ldentity Theft

  1. Secure a copy of one of the following as evidence of ID theft:

    • Police Report, or

    • Affidavit of ldentity Theft (available from the Federal Trade Commission).

5.1.12.2.2 
(05-20-2008)
Identity Theft Case Resolution

  1. Resolve the case in an appropriate manner according to the following
    procedures depending on whether the taxpayer:

    1. establishes he/she was a victim of ID Theft,

    2. does not establish he/she was a victim of ID theft, or

    3. performed ID theft.

5.1.12.2.2.1 
(05-20-2008)
Taxpayer is a Victim of ID Theft

  1. Resolve the case in an appropriate manner if the taxpayer establishes
    that he or she was a victim of identity theft.

  2. Review the Identity Theft and Incident Management office website at
    http://irweb.irs.gov/Privacy/pip/itim/idtheft.html for general
    information about ID theft.

  3. Advise the taxpayer to take the following action when he or she reports
    being a victim of ID theft:

    1. contact the local police and file a police report

    2. contact the Federal Trade Commission and file a complaint

    3. notify the three major credit bureaus to post a fraud alert

    4. refer to
      http://www.irs.gov       Keyword “Identity Theft”
      or “ID Theft”
      for additional information.

  4. Process a request for full or partial abatement, as applicable, if the taxpayer presents evidence that he/she does not owe
    the tax due to ID theft.

    Example:


    Wages were reported
    under the taxpayers Social Security Number (SSN) but not reported by the
    taxpayer on his/her return because the wages were actually earned by a third
    party who used the taxpayers SSN. The Service included the wages in the taxpayers
    taxable income, assessed additional tax, penalty, and interest, and sent an
    adjustment notice to the taxpayer. The taxpayer did not pay the amount of
    the additional assessment.
    The Service issued a BAL DUE account for collection.
    A revenue officer contacted the taxpayer and made demand for full payment.
    The taxpayer established he or she was a victim of identity theft by providing
    the appropriate documentation. The revenue officer abated the assessment.

  5. Request input of the ID Theft action code to flag the account according
    to the procedures in IRM 5.1.12.2.2.1.1, ID Theft Action Code.

  6. Review the case history for prior enforcement activity that may need
    to be corrected, i.e., levies and liens.

  7. See IRM 5.12.2.25, Identity
    Theft    , for additional procedures regarding Notices of Federal Tax Lien.

  8. See IRM 5.9.5.12, Identity
    Theft    , for additional procedures regarding taxpayers in bankruptcy.

5.1.12.2.2.1.1 
(05-20-2008)
ID Theft Action Code

  1. Transaction Code (TC) 971 Action Code (AC) 501 has been developed to
    centrally track identity theft incidents relating to tax administration, protect
    treasury revenue targeted by identity fraud, and reduce taxpayer burden. The
    ID theft action code serves as a single codification mechanism and will enable
    comparison and correlation of identity theft incidents. After a TC 971 AC
    501 has been posted to an entity to indicate confirmed ID theft, tax returns
    entering the posting process will be prevented from posting if they do not
    appear to be from the legitimate owner of the Social Security Number (SSN).
    Cases in an RO’s inventory will be levied unless the RO manually blocks
    the levy.

  2. Refer to IRM 5.1.11,
    Delinquent Return Accounts    , for further information about working cases
    flagged by TC 971 AC 501.

  3. Request input of TC 971 AC 501 or reversal (TC 972 AC 501) according
    to the following procedures.

  4. Follow normal collection procedures on ID theft cases.

    Note:

    Collection
    activities, including the appropriate use of enforced collection action, are not prohibited when a taxpayer has established that he or
    she was a victim of identity theft and his/her account reflects TC 971 AC
    501. Cases in inventory will not be blocked from automated
    levy action.

    Caution:

    Be sensitive to the adverse impact
    that being a victim of identity theft may have upon a taxpayer and his/her
    ability to pay.

    Note:

    Consider temporarily suspending
    the account until the ID theft incident is resolved in cases where you determine
    the ID theft will have an adverse impact on the taxpayer’s ability to
    pay.

5.1.12.2.2.1.2 
(05-20-2008)
ID Theft Action Code Input Procedures

  1. Request input of TC 971 AC 501 on the entity when a taxpayer substantiates
    he/she is a victim of ID theft.

  2. Check the Master File for 971 TC AC 501 to verify any previous incident
    substantiation via CC ENMOD.

    1. If a previous identity theft incident was substantiated, the taxpayer
      does not need to send in substantiation documentation
      in order to re-substantiate.

    2. Request input of a new TC 971 TC AC 501 for each substantiated incident

    Caution:

    Only apply 971 TC AC 501 when you have
    substantiated an ID theft incident and the incident
    has a direct impact to tax administration.

  3. Request input of TC 971 AC 501 on the entityafter you
    have verified the taxpayer is a victim of ID theft and within
    24 hours of making the ID theft determination.

  4. Use Form 4844, Request
    for Terminal Action    , to request the necessary input. See IRM 5.1.12.2.2.1.2.1, Completion of Form
    4844    .

5.1.12.2.2.1.2.1 
(05-20-2008)
Completion of Form 4844

  1. The ID Theft Action Code is input on the entity instead of being input
    to the applicable modules, so ensure that you follow these procedures to accurately
    complete Form 4844.

  2. Complete the applicable blocks of Form 4844 including
    the following:

    1. “EIN or SSN”

    2. “Name control”

    3. “MFT code”

    4. “Periods”

      Note:

      Do notwrite the individual applicable period(s)
      in the “Periods”
      block. Instead,
      write “0000″
      in the “Periods”
      block
      to signify the entity.

    5. “Name of taxpayer”

    6. “Remarks”

  3. Follow the procedures below for entering the tax period ending date(s)
    in the Transaction Date (TRANS-DT) field. See 5.1.12.2.2.1.2.3
    , Transaction Date Field.

  4. Follow the procedures below for completing the miscellaneous fields
    and the Remarks block.

5.1.12.2.2.1.2.2 
(05-20-2008)
Miscellaneous Fields

  1. Complete the TC 971 AC 501 miscellaneous fields with any applicable,
    specific information for detailed reporting. The miscellaneous field has three
    parts:

    • BOD / Function (Business Operating Division / Function)

    • Program Name

    • Tax Administration Source (Tax Admin Source)

    Note:

    At this time, Form 4844does not contain specific spaces for inputting the required information
    in the miscellaneous fields.

  2. Request input of the required miscellaneous field information in the
    Remarks block of Form 4844.

  3. Use the following codes to complete the first two miscellaneous fields:

    1. BOD = “SBSE”

    2. Program Name = as applicable, enter “CFBALDUE”
      or “CFDELRET”

      Note:

      Insert “CFBALDUE”
      if you
      have a combination BAL DUE/DEL RET case.

  4. Use the codes displayed in the following table to complete the third
    miscellaneous field (Tax Admin Source):

    Tax Admin Source
    Codes Usage
    INCOME for income related issues
    MULTIFL for instances where more than one individual
    has filed using the same information
    BOTH for instances when both occur
    OTHER for instances when there is another issue.

  5. Enter these codes into the miscellaneous field separated by a space.

    Example:

    For an identity theft incident that has an income related
    tax administration impact for SB/SE Collection Field function (CFf), enter
    the following in the miscellaneous field:

    S B S E   C F D E L R E T   I N C O M E

5.1.12.2.2.1.2.3 
(05-20-2008)
Transaction Date Field

  1. Enter the tax period ending date(s) in the Transaction Date (TRANS-DT)
    field. Use MMDDYYYY format of the tax year affected by the identity theft
    incident. The tax period ending date(s) should be the tax year(s) in which
    the identity theft occurred.

    Example:

    If a taxpayer substantiates
    ID theft and the year under collection is TY 2005, the TRANS-DT field input
    would be:

    1 2 3 1 2 0 0 5

    Example:

    If a taxpayer substantiates ID theft
    and the years under collection are TY 2005 and TY 2006, the TRANS-DT field
    input would be:

    1 2 3 1 2 0 0 5

    1 2 3 1 2 0 0 6

5.1.12.2.2.1.2.4 
(05-20-2008)
Remarks Block

  1. Include the following in the Remarks block of
    Form 4844″Input TC 971 AC 501 under ENMOD.”

  2. Enter any other key pertinent information about the case in the Remarks
    block.

    Example:

    “received valid drivers license
    and affidavit”

5.1.12.2.2.1.3 
(05-20-2008)
ID Theft Action Code Reversal Procedures

  1. Request input of TC 972 with AC 501 on the entity to negate the impact
    of TC 971 AC 501.

  2. Use Form 4844, Request
    for Terminal Action    , to request the necessary input. See IRM 5.1.12.2.2.1.2.1, Completion of Form
    4844    .

  3. Complete the TC 972 AC 501 miscellaneous fields with any applicable,
    specific information for detailed reporting. The miscellaneous field has three
    parts:

    • BOD / Function (Business Operating Division / Function)

    • Program Name

    • Reason

    Note:

    At this time, Form 4844does not contain specific spaces for inputting the required information
    in the miscellaneous fields.

  4. Request input of the required miscellaneous field information in the
    Remarks block of Form 4844.

  5. Use the following codes to complete the first two miscellaneous fields:

    1. BOD = “SBSE”

    2. Program Name = as applicable, enter “CFBALDUE”
      or “CFDELRET”

      Note:

      Insert “CFBALDUE”
      if you
      have a combination BAL DUE/DEL RET case.

  6. Use the codes displayed in the following table to complete the third
    miscellaneous field (Reason):


    Reason Field
    Codes Description
    TPRQ Taxpayer Request
    The taxpayer requests the
    971 to be negated. The taxpayer may feel that the issue has been resolved
    or it is no longer needed and is impacting them negatively
    IRSERR Keying Error or Other Internal Mistake
    The
    971 was due to a typographical mistake or another internal mistake and should
    be negated.
    IRSADM Internally Identified Negative Impact
    The
    971 is causing a negative impact on another internal process or system, and
    should be negated to discontinue any negative impact.
    FALSE Fraudulent ID Theft Claim
    The original identity
    theft incident claim was determined to be fraudulent.
    OTHER Unclassified

  7. Complete the miscellaneous fields for TC 972 in the same format as for
    TC 971. See IRM 5.1.12.2.2.1.2,
    ID Theft Action Code Input Procedures    .

5.1.12.2.2.1.3.1 
(05-20-2008)
Transaction Date Field — TC 972

  1. The 972 will also use the TRANS-DT field to indicate which 971 which
    will be reversed. When the 972 is applied, enter the tax year in the TRANS-DT
    field to designate the 971 which should be reversed. Use MMDDYYYY format of
    the tax year affected by the identity theft incident.

5.1.12.2.2.2 
(05-20-2008)
Taxpayer is Not a Victim of ID Theft

  1. Follow normal collection procedures if the taxpayer does
    not     establish he or she was a victim of ID theft.

5.1.12.2.2.3 
(05-20-2008)
Taxpayer Performed ID Theft

  1. Resolve the case in an appropriate manner according to the following
    procedures depending on whether the taxpayer performed ID theft:

    1. for purposes of tax evasion,

    2. for purposes other than tax evasion.

5.1.12.2.2.3.1 
(05-20-2008)
ID Theft for purposes of Tax Evasion

  1. Develop the case as a fraud referral if the taxpayer performed ID theft
    by using a different TIN(s) for purposes of tax evasion.

  2. Review IRM 25.1.8,
    Collection Field Function    .

  3. Contact the local Fraud Technical Advisor (FTA) for any necessary assistance.

5.1.12.2.2.3.2 
(05-20-2008)
ID Theft for Purposes other than Tax Evasion

  1. If a taxpayer performed ID theft by using someone elses Taxpayer Identification
    Number (TIN) for purposes other than tax evasion, it
    is not a concern that the IRS would handle. Criminal
    Investigation (CI) would not work such cases.

    Example:


    A taxpayer is an illegal alien. The taxpayer filed
    a return to report his/her wages but he/she used someone elses Taxpayer Identification
    Number (TIN). However, the taxpayer paid the tax he/she owed.

  2. Do not alert those individuals who were victims
    of ID theft. Disclosure laws prohibit making any such notification.

    Note:

    Individuals may or may not know that they were victims of ID theft when their
    identity was stolen. When an individual becomes aware he/she was a victim
    of ID theft, he/she may report the crime to the Federal Trade Commission and
    take other action as discussed on http://www.irs.gov.

5.1.12.2.3 
(05-20-2008)
Security Breach Incidents

  1. Sometimes, even when appropriate procedures have been followed, a loss
    of Personally Identifiable Information (PII) will occur, and a security breach
    incident will happen. Taxpayers whose Personally Identifiable Information
    (PII) was lost due to a security breach will be notified by a letter from
    the Service.

  2. All decisions to officially notify taxpayers of the loss of PII are
    done at the national level through the Office of Privacy, Information Protection
    and Data Security, Identity Theft and Incident Management (ITIM) Office. ITIM
    will send a letter to each taxpayer who is involved in a Personally Identifiable
    Information (PII) security breach. The letters will advise the taxpayers about
    assistance they can get, including the availability of a dedicated toll-free
    telephone number and the offer of free credit monitoring services.

    Example:


    A revenue officer spent part of the day making field
    calls and he properly stored his laptop computer and some hard-copy case files
    in his locked trunk so he could go into a restaurant for lunch. The laptop
    and the hard-copy case files were stolen from his automobile while the RO
    was eating lunch. The laptop was appropriately encrypted. However, the theft
    of the hard-copy case files constitutes a Personally Identifiable Information
    (PII) security breach.
    ITIM will notify the taxpayers potentially impacted
    by the security breach.

5.1.12.2.3.1 
(05-20-2008)
Handling Calls from Taxpayers

  1. Refer the taxpayer to the dedicated toll-free number if you receive
    a telephone call from a taxpayer in response to one of the notification letters
    from ITIM. The dedicated toll-free phone number is 866-225-2009.

5.1.12.2.3.2 
(05-20-2008)
Reporting a Potential Privacy or Security Breach Incident

  1. Report any potential privacy or security breach immediately.

  2. See IRM 5.1.3, Safety,
    Employee, and Security Programs    .

    Note:

    In addition to following the
    existing Computer Security Incident Response Center (CSIRC) procedures, once
    a revenue officer has informed local management regarding the incident and
    local management has informed Area management, Area management
    must     inform Collection Headquarters (HQ) management regarding the incident.

5.1.12.3 
(05-20-2008)
Disaster Assistance and Emergency Relief Overview

  1. This section contains disaster assistance and emergency relief operating
    guidance for Collection Field function (CFf) employees.

  2. See IRM 25.16, Disaster
    Assistance and Emergency Relief    , specifically
    IRM 25.16.1.8, Small Business/Self-Employed (SB/SE)
    General Procedures – Overview    .

  3. Refer to subsections 13 through 19:

    • 13 — Overview of Disaster Relief Operating Procedures
      for Collection Field Function (CFf)      ,

    • 14 — CFf Management Guidelines for Response to Disasters
      ,

    • 15 — General CFf Operation Procedures,

    • 16 — Managing Revenue Officer Inventory in Disaster
      Areas      ,

    • 17 — Revenue Officer Inventory with”
      -S Freeze”
      ,

    • 18 — Soft Contact, and

    • 19 — Summons Enforcement.

  4. Go to http://mysbse.web.irs.gov/CLD/Disaster+Assistance/default.aspx
    for disaster information.

  5. Go to http://www.tris.irs.gov/fema/ for a listing of IRS assistance
    determinations by year.

5.1.12.3.1 
(05-20-2008)
Disaster Freezes

  1. There are two types of disaster freezes, the –O freeze and the
    –S freeze. Both freezes are established systemically for a specific
    period of time and for location(s) identified by postal zip code(s).

  2. The –O freeze provides systemic penalty, interest, and compliance
    relief and stops most compliance notices.

  3. The –S freeze will perform the same functions as the –O
    freeze but does not provide automatic compliance relief and will not stop
    generation of notices.

5.1.12.3.2 
(05-20-2008)
Case Activity

  1. Cases remain in status 26 when the -O freeze is input. Group managers
    (GMs) may move cases out of revenue officer (RO) inventory into hold files
    pending the release of the -O freeze.

  2. Taxpayer contact is restricted on all –O freeze cases during the
    specified freeze period unless exigent circumstances
    apply, e.g., jeopardy condition, statute expiration, etc.

    Note:

    If the taxpayer
    initiates contact during the freeze period, interaction is permissible but
    agreements are voluntary and not enforceable for the period the -O freeze
    remains in effect.

5.1.12.3.2.1 
(05-20-2008)
Soft Contact

  1. See IRM 25.16.1.8.18,
    Soft Contact    .

  2. Make a soft contact to determine if:

    1. the taxpayer is still affected by the disaster after the implementation
      of an –S freeze or after the release of an –O freeze, and/or

    2. voluntary commitments have not been met upon conclusion
      of the freeze.

    Note:

    It maybe appropriate to consider a “not collectible”
    closure or a delay in collection activity
    for a specific period in such cases.

  3. Resume collection activity, as appropriate, only after
    determining that the taxpayer is notcurrently affected
    by the disaster.

5.1.12.4 
(05-20-2008)
Taxpayer Requests to Record an In-Person Interview

  1. The taxpayer has the right under IRC § 7521
    , Procedures involving taxpayer interviews,
    to make an audio recording of an in-person interview. Ten days advance written
    notice from the taxpayer is required.

  2. If the taxpayer does not provide ten days advance written notice, then
    Service employees have the option to either permit the recording
    or     to set a new date for the interview. The taxpayer must supply his/her
    own means of recording. The recording can be by tape, stenography, or other
    means. Taxpayers have no right to make a video recording,
    and it is IRS policy to notallow video recordings.

5.1.12.4.1 
(05-20-2008)
Agree with the Request

  1. Agree to the request subject to the following provisions:

    1. Equipment is available for the Service to produce its own recording.

    2. The recording takes place in an Internal Revenue Service office.

    3. You secure the approval of your group manager (GM) prior to making any
      recording.

  2. Ensure the recording equipment in your Post of Duty (POD) is operational.

  3. Secure recording equipment from another POD or procure recording equipment,
    as applicable.

  4. Postpone and reschedule the meeting until the necessary equipment and
    a suitable location are available for the Service to produce its own recording
    when the recording equipment and/or a suitable location are not available.

5.1.12.4.2 
(05-20-2008)
Deny Requests for Video or Film Interviews

  1. Deny any request to videotape or film an interview.

  2. Attach a copy of the taxpayers written request to the case file.

5.1.12.4.3 
(05-20-2008)
When to Stop the Recording

  1. The group manager (GM) may stop an audio recording when the taxpayer’s
    behavior is clearly disruptive of the normal collection process.

  2. Attach a copy of the taxpayers written request to the case file.

  3. Annotate the case history regarding the fact that your manager stopped
    the recording.

  4. Attach a copy of the recording to the case file.

5.1.12.4.4 
(05-20-2008)
Audio Recording Procedures

  1. Arrange for your GM to be present at all times
    when a recording is being made.

    Exception:

    Arrange for another
    Service employee to be present if your GM is not available.

  2. Identify yourself, the date, time, place, and purpose of the meeting
    at the outset of the recording.

  3. Ask each participant in the meeting to do the following:

    1. identity themselves,

    2. state their role in the proceeding, and

    3. acknowledge and consent to the making of an audio recording.

  4. Announce if an additional participant arrives or a participant leaves
    during the meeting and ask any new participants to identify themselves, etc.
    as discussed above.

  5. Describe any written records presented during the proceeding in sufficient
    detail to make the verbatim recording a meaningful record when matched with
    the other documentation contained in the case file.

  6. State that the proceeding is completed and the recording is ended at
    the conclusion of the meeting.

  7. Turn the recording equipment off at the conclusion of the meeting.

  8. Attach a copy of the written request and the recording to the case file.

5.1.12.4.5 
(05-20-2008)
Transcript of Recording

  1. Transcribe all or part of the recording when necessary to make the verbatim
    recording a meaningful record which can be matched with the documentation
    contained in the case file.

  2. The taxpayer may request duplication of the recording or a transcript
    of our copy of the interview provided the taxpayer pays for the cost of the
    reproduction or transcript in advance.

5.1.12.5 
(05-20-2008)
Authorized IRS e-file Provider — Monitoring and Suitability

  1. The IRS performs monitoring and suitability checks on Authorized IRS
    e-file Providers. Monitoring may include reviewing IRS e-file submissions,
    investigating complaints, scrutinizing advertising material, checking adherence
    to electronic filing signature requirements, examining files, observing office
    procedures, and conducting suitability checks. Suitability checks are performed
    continuously regarding compliance issues.

  2. See IRM 3.42.10, Authorized
    IRS e-file Providers    .

  3. Make referrals to the Andover Campus when you believe there are suitability
    issues regarding a Provider that need to be addressed:

    1. Send a suitability referral via e-mail to “*IRS E~Helpmail
      ”
      .

    2. Use secure e-mail as appropriate.

  4. Make referrals as directed in IRM 4.21.1, Monitoring the IRS e-file Program, when you believe a Provider
    requires monitoring. Exhibit 4.21.1-15 contains the referral form template.

    1. See IRM 4.21.1.4(2),
      Referrals      .

    2. See Exhibit 4.21.1-15.

5.1.12.6 
(05-20-2008)
Income Tax Assessed Against a Child

  1. IRC § 6201(c),
    Compensation of Child    , permits IRS to treat certain income tax assessed
    against a child, to the extent of the amount attributable to income included
    in the gross income of the child solely by reason of
    IRC § 73(a), Treatment of amounts received
    , if not paid by the child, to be considered as having also been properly
    assessed against the parent.

  2. Refer to IRC § 6201(c) and the
    related regulations for the authority to assess against a child and to treat
    such assessment as having been properly made against the parent.

  3. Attempt to collect income tax assessed against a child from the child.

  4. Attempt to collect income tax assessed against a child from the parent
    only if you are unable to directly collect it from the child.

  5. Do notassess any amount of unpaid estimated tax
    required to be paid under IRC § 6654(b), Failure by individual to pay estimated income tax, or IRC § 6655, Failure by corporation
    to pay estimated income tax    .

    Note:

    Area Directors and Campus Directors
    are not allowed to assess any amount of unpaid estimated tax required to be
    paid under IRC § 6654 or IRC § 6655.

  6. Base any assessments on tax returns rather than estimates.

5.1.12.7 
(05-20-2008)
Household or Agricultural Employee

  1. Follow normal BAL DUE processing to effect collection of tax on the
    wages of household or agricultural employees.

  2. Inform taxpayers regarding the provisions for voluntary withholding
    of income tax from the wages of household and agricultural employees when
    you make personal contact with taxpayers to help eliminate future delinquencies.

  3. Follow these procedures if taxpayers choose to request that their employers
    withhold tax from their wages:

    1. assist the taxpayer in preparing Form W–4
      , Employee’s Withholding Allowance Certificate
      , and

    2. furnish the taxpayer with a copy of Circular E, Employer’s Tax Guide, for the taxpayer to deliver with
      Form W–4to the employer.

5.1.12.8 
(05-20-2008)
Taxpayer in High Assault Risk Area

  1. lRM 5.1.3,Safety, Employee,
    and Security Programs    , describes measures which may help ensure your
    safety in High Assault Risk Areas (HARAs).

  2. Review IRM 5.1.3and become aware of
    the measures which may help ensure your safety in HARAs.

  3. Use appropriate measures to ensure your safety when you attempt to collect
    on cases in HARAs.

  4. Develop awareness of the instructions in IRM 5.1.3
    for reporting forcible assault or threat of force when you attempt
    to collect on cases in HARAs.

  5. Report any forcible assault or threat of force which occurs when you
    attempted to collect on cases in High Assault Risk Areas (HARAs).

  6. Refer to IRM 1.4.50.2.1.7,
    Caseload Rotation     for further information regarding the periodic rotation
    of assignments located in HARAs.

5.1.12.8.1 
(05-20-2008)
Coordinating with Examination on HARA Cases

  1. Follow these procedures when an Examination employee requests you to
    coordinate on an audit case in which the taxpayers live in High Assault Risk
    Areas (HARAs).

  2. Cooperate with any Examination employee who requests your assistance
    on an in-person taxpayer audit in the office.

    • In general, Examination is supposed to try to reduce the need for field
      Collection contacts by coordinating with revenue officers during the audit
      process when processing assessments on taxpayers who live in High Assault
      Risk Areas (HARAs).

    • If Collection and Examination are in the same office, and the Examination
      employee is conducting an in-person taxpayer audit in the office, but the
      Examination employee cannot collect the balance due at the time of the audit,
      the Examination employee may request a Collection employee to meet with the
      taxpayer to attempt to secure levy sources and a payment agreement.

  3. Meet with the taxpayer to attempt to secure levy sources and a payment
    agreement when called upon by an Examination employee in the same office who
    is conducting an in-person taxpayer audit in the office and
     the Examination employee cannot collect the balance due at the time
    of the audit.

  4. Request that your manager create an ICS only case with pre-assessed
    balance due module(s) so levy sources will be available for cases which become
    BAL DUE.

    1. Use Form 4844 for levy source input to the IDRS Account Number File (ANF).
      These levy sources may come from an Audit Report, a
      Form 4966, Current Collection Information,
      or current collection information obtained during such interviews described
      in above.

    2. Be alert for HARA cases in which the proposed deficiency, including accruals,
      is less than BAL DUE deferral.

    3. Do notinput any levy sources if the deficiency is
      below the BAL DUE deferral. See LEM 5.1.20.2.4.1, Routine BAL DUE Issuance Criteria. Even though the campus
      will generate a notice to the taxpayer, no BAL DUE will be issued in such
      cases.

  5. Process payments received prior to receipt of the BAL DUE on Form 3244, Payment Posting Voucher:

    1. Request input of TC 640, and

    2. Use DPC 99 to denote advance payment of determined deficiency.

5.1.12.9 
(05-20-2008)
“Innocent Spouse”

  1. IRM 25.15, Relief From
    Joint and Several Liability    , contains procedures for ”
    innocent spouse”
    cases.

  2. Follow the procedures in IRM 25.15.8, Area Office Collection Procedures, to resolve applicable BAL
    DUE cases.

5.1.12.10 
(05-20-2008)
Non-Petitioning Spouse

  1. When one spouse files a U.S. Tax Court petition on a joint return deficiency
    and the other spouse agrees to the deficiency or takes no appeal action, two
    separate IMF MFT 31 BAL DUE cases will be issued. When the campuses prepare
    separate accounts, the BAL DUE and DEL RET separate accounts will be annotated
    as follows:

    1. One separate account will be annotated “Non-Petitioning
      Spouse”
      and the other separate account will be annotated ”
      Petitioning Spouse”
      .

    2. Additionally, iftwo areas are involved, both separate
      accounts will be annotated “two areas”
      .

5.1.12.10.1 
(05-20-2008)
Non-Petitioning Spouse Procedures

  1. Contact any other area involved to determine if any collections have
    been made on the other spouse when these types of cases are in your inventory.

  2. Request a corresponding abatement of the other spouses liability when
    you collect some or all of the liability from either spouse.

  3. Follow the abatement procedures below, as applicable.


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Law Offices of Darrin T. Mish, PA

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