- 4.4.12.4 Examined Closings/Surveyed Claims
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FUTA state code is required if DC = 03, 07, 11 or 12.
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FUTA state code is invalid if DC is 01 or 02.
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The total of FUTA State Code amounts for codes beginning with a "T" must equal Item 12 Tax transaction amounts.
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Refer to Exhibit 4.4.12-1 for Forms 706, 706GS (D), 706GS (T), and 709.
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Refer to Exhibit 4.4.12-2 for Form 720.
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Refer to Exhibit 4.4.12-3 for Forms 940, 941, 942, 943, and 945.
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Refer to Exhibit 4.4.12-4 for Form 1040.
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Refer to Exhibit 4.4.12-5 for Forms 1120, 1041, 1042, and 1066.
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This item is entered by the terminal operator after the Form 5344 is input at the terminal.
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The entry should include the operator’s employee number and the date of input.
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This item is only to be completed if the Form 5344 is rejected by the terminal operator.
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There terminal operator enters the date rejected, the item number that rejected or a screen print of the reject message.
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The person who corrects the item writes the date in Item F block and returns the form for input.
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See IRM 4.4.1, Introduction, for more information on the DLN.
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A portion of the DLN is assigned by the terminal. The remainder of the DLN (last digit or the block number, two digit serial number, and list year) is assigned during the end of day computer processing.
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The refile DLN is not entered on Master File closing documents.
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The first two digits of the terminal assigned document locator number (DLN) is normally the Service Center code. The terminal keeps track of assigned blocks. When additional blocks are needed to accommodate the volume of closings being processed, the terminal will continue to use a district office code, beginning with the lowest numbered district office code valid for that campus, progressing sequentially to the highest number district office code valid for that campus.
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See IRM 4.4.32, Terminal Operations, for additional information.
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The date the correction is made will be placed in the corrected block by the person making the correction to the item rejected.
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The Form 5344 will then be returned to the terminal for input.
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If the case is appealed or petitioned, a three digit Appeals Office Code identifying the office the case is being closed to, must be entered in Item 16.
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If a 2XX (Docketed) Appeals Office is entered, QQ is automatically entered in the day portion of the AIMS statute date field.
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If this Item is entered, Item 18 is a required entry unless the return is a non-taxable return. If non-taxable, Item 18 must be blank and Item 34 is required.
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This is a DOLLARS ONLY FIELD/DO NOT ENTER CENTS.
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Circle the plus or minus sign.
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This item should be completed at the time the case is prepared for closure to Appeals. This could be in the group as a result of the 30-day letter, in Technical Support Staff as a result of the 30-day letter, or in Case Processing Support as a result of the statutory notice of deficiency.
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Required entry if disposal code is 07, 11 or 12 if an Appeals Office Code is entered in Item 16.
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Enter the unagreed portion of tax and credits less prepayment credits.
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The entry must be the full deficiency, excluding penalties, less any partial assessments.
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Do not include any part of tax in Item 18 that has been assessed unless Examination is going to abate the assessment before closing the case to Appeals (e.g. late file petitioned 90-day letter).
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Item 18 must be blank and Item 34 must include the entire proposed adjustment.
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Enter the net estate tax due after allowance of the full state death tax credit regardless of whether evidence of payment has been submitted within the specified time.
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Unagreed Correspondence Examination cases are to be sent to the Examination Area Office for an interview before the case can be closed to Appeals. Docketed Cases can be closed directly to Appeals.
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The entire Form 5344 must be reinput, including the entire unagreed amount. It does not matter if Appeals returned the case in the same fiscal year or a subsequent fiscal year, the same procedures apply. Reenter all applicable fields using the entire amounts.
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If a claim for refund (RBP) without other adjustments in being referred to Appeals, the amount of -$1 (negative one dollar) must be entered in Item 18 and the amount of the claim for refund (RBP) that is being appealed, entered in Item 22. Item 23 and 24 are also required entries.
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If both the claim for refund (RBP) and other adjustments are being referred to Appeals, the unagreed amount from the other issues must be entered in Item 18 and the amount of RBP that is being appealed entered in Item 22.
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If a claim for abatement is being appealed, enter -$1 in Item 18. Since examination received credit for this closure when it was originally closed, entering the amount of the "claim" will cause duplicate results.
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If a case appears on the docket list that has already been assessed and put in Status 90, enter $1 in the Item 18.
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See IRM 4.14.1, Statutory Notice of Deficiency for more information.
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In some instances, such as a loss year return, the examination results in an adjustment to income but not tax. When closing these unagreed returns to Appeals, use the appropriate disposal code (07 or 11), but since there is no tax consequence, enter $1 in Item 18. Usually the carry-back or carry-forward tax periods are also being closed to Appeals and they will contain the amount of the unagreed tax adjustment.
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If a carry-forward return has not been filed yet, but the taxpayer is appealing the adjustment to the loss year, the examination results will be $1.
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Used to update AIMS and Master File fields. Currently the only field that can be updated is the NAICS code.
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Enter the agreement date of the formal claim disallowance form, e.g., Form 2297, Waiver of Statutory Notification of Claim Disallowance, if the taxpayer signed the waiver. Otherwise leave blank.
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If this item is entered, item numbers 22, 23, 24, and an amount claimed are also required. Effective January, 1993, this date will be displayed on a Master File transcript but it will not be displayed on TXMOD.
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If a date is entered, Disposal Code must be 01, 03, 04, 08, 09, 10, 12 or 13.
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Enter the amount of the claim or reduction of tax requested by the taxpayer if the amount on the data base is not correct.
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If $1 was entered on the data base due to a protective claim, then the correct amount of the claim must be entered when closing the case.
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Protection of the revenue base is the work performed by Examination personnel to prevent the release of money from the Treasury to a taxpayer.
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The most common example is the examination of a claim for refund filed by a taxpayer. If the claim is disallowed, Examination is expending resources to prevent the release of money from the Treasury. This valuable contribution by Examination personnel is measured through the completion of the Revenue Base Protection Section of Form 5344, Items 20–24.
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If there is an outstanding balance due on the account, the RBP amount will not be the entire amount of the claim. A calculation must be performed to determine how much of the claim qualifies as RBP. Since the taxpayer can be making payments on the outstanding liability while the examination is taking place, the calculation must be made by the examiner when the examination is completed.
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Example:
Amount of Claim: $10,000 Less balance due –8,000 RBP—Claim amount disallowed 2,000
(Claim for Refund was really $2,000)
(Claim for Abatement was really $8,000)
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Reduction of a carryforward to a future return that has not been filed.
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Audit reconsideration (if the tax has not been paid) . Since examination received credit for this closure when it was originally closed, if the audit reconsideration is being referred to Appeals, enter $1. Entering the amount of the "claim" will cause duplicate results.
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Innocent spouse claims since this does not increase or decrease the actual Iiability.
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Not all claims are considered RBP therefore, a claim source code does not have any relationship with RBP. There are no checks in the system that require the completion of the RBP section if there is an amount claimed on the data base or if the Source Code is 30.
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Enter the dollar amount of the refund requested by the taxpayer that was protected from leaving the Treasury. This amount cannot exceed the amount claimed. (Item 21 or data base amount).
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If this item is entered, item numbers 23 and 24 are also required.
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If the claim is being referred to Appeals, enter the entire disallowed amount in this field and a negative $1 in Item 18, Unagreed Amount to Appeals.
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This amount must be zero if the claim was allowed in full and/or there are no offsetting issues.
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Example:
Amount Claimed Item 21 $5,000. Amount Disallowed Item 22 0 Final Adjustment Item 12 —$5,000.00
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This is to reflect the amount of the claim that was prevented from leaving the Treasury.
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Example:
Amount Claimed Item 21 $5,000 Amount Disallowed Item 22 3,000 Final Adjustment Item 12 2,000.00
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Follow this example when the claim allowed equals the other adjustments.
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Example:
Amount Claimed Item 21 $5,000 Amount Allowed 4,000 Other Adjustments 4,000 Final Adjustment Item 12 0.00 Claim Amt Disallowed Item 22 $5,000.
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Follow this example when the claim allowed is greater than the other adjustments.
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Example:
Amount Claimed Item 21 $5,000. Amount Allowed (4,000.00) Other Adjustments 1,000.00 Final Adjustment Item 12 Claim Amt Disallowed Item 22 2,000.
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Follow this example when the claim allowed is less than the other adjustments
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Example:
Amount Claimed Item 21 $5,000 Amount Allowed (4,000.00) Other Adjustments 7,000.00 Final Adjustment Item 12 3,000.00 Claim Amt Disallowed Item 22 5,000.
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The amount of time spent on revenue base protection must be entered in whole hours only.
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If Item 22 is entered, then Item 23 and amount claimed, is also required.
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Fractions of hours (non-field examinations) must be included in Item 28.
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Effective 1/1/2004, time can be reported in 15 minute intervals. Enter the following number in the fraction section of Item 28.
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Enter a "3" for 15 minutes
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Enter a "5" for 30 minutes
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Enter a "7" for 45 minutes
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If the return has been reestablished from status 90 using CC AMSTUR, or returned from Appeals using CC AMSTUB, the total time from both closings must be entered in this field. The computer will net the amount entered in Item 23 with the amount that is on the data base from the prior closure and the correct amount will be reflected on the Examination tables. Because of the automatic netting, the computer will require the amount entered in Item 23 to be equal or greater than the time entered on the original closing. The computer will also prevent a correction to this field on the data base before the case is cIosed.
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Example:
Form Form Office Audit 4502 5344 Protection of Revenue Base time = 1.4 hours (P) Item 23=1 hr. RBP time = 2.1 hours (R) Item 28=2.5 hrs. -
For more information, refer to IRM 4.4.26, Reopening/Reclosing/Reinputting Records.
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This alpha code (A-C or E-Z) identifies the type of claim for refund (RBP).
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Required entry made up of the total amount of time spent on non-revenue base protection issues for each return examined.
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Effective 1/1/2004, for EGC 1XXX and 2XXX only, time must be reported in 15 minute intervals. Enter the following number in the fraction section of Item 28.
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Enter a "0" for 00 minutes
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Enter a "3" for 15 minutes
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Enter a "5" for 30 minutes
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Enter a "7" for 45 minutes
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Time includes:
— actual examination time
— travel time
— report writing time
— visual inspection time spent by tax auditors
— time resulting from further consideration of cases returned from review or after issuance of a statutory notice
— time spent on the inspection of employment or excise tax returns
— prior time spent as well as additional time on reopened cases and cases returned from Appeals. (The system will automatically net the two figures to reflect additional time for report purposes.)
— specialists time
— Audit Aide
— Reviewers time when assisting an Exam group in court cases
— Time spent on OIC cases only if return is being examined
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Do not include:
— Co-op student time
— Tax Examiner time
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Use the senior examiner or the examiner devoting the most time shows the combined time. Include all time spent by an examiner who furnishes an engineering or collateral report.
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The time spent by International specialists in assisting revenue agents in conducting an examination is also included in the total time entered in this item.
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When an examiner leaves the Service or a return is reassigned for examination, the accumulated examination time is added to the time of the examiner completing the case.
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If the return has been reopened from status 90 using CC AMSTUR, or returned from Appeals using CC AMSTUB, the total time from both closings must be entered in this field. The computer will net the amount entered in Item 28 with the amount that is on the data base from the prior closure and the correct amount will be reflected on the Examination tables. Because of the automatic netting, the computer will require the amount entered in Item 28 to be equal or greater than the time entered on the original closing. The computer will also prevent a correction to the time field on the data base before the case is closed.
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See Chapter 26, Reopening/Reclosing/Reinputting Records
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Include both audit and joint investigation time investigation time. Also include time spent after the referral so that the "total return time" is reflected on Form 5344 at the time of disposal from Examination.