- 4.4.12.4 Examined Closings/Surveyed Claims
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The total time spent on the case must be reported in Item 28. Item 404(c) must reflect the time reported in Item 28 allocated to each abstract code examined.
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Examination time must be as accurate as possible although this does not require maintaining a strict time record.
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Reported in whole hours only.
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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 "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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TOTAL amount of time spent on the case by both the primary and support areas.
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Reported in full hours and tenths of hours.
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Enter the total time shown on the case jacket, Form 4607, Examination Action and Time Record.
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Effective 1/1/2004, time can only 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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The actual technical time applied must be entered on each return closed in all Campus Examination Operations programs. Time reporting for EGC 5XXX will continue to be tracked by tenths.
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See IRM 4.18, Examination Operations at Service Centers, for additional information.
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Do not include time spent on claims for refund. RBP time must be reported in Item 23.
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An entry of 1-4 or 6-7 is required for all examined returns.
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Enter the most recent code shown as " Technique Code" on Form 4607, Examination Action and Time Record, limited to:
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1
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2
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6 — Only valid with Disposal Codes 01, 08, 10, 12 or 13.
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7 — Only valid with Disposal Codes 10 or 13.
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A "2" = Correspondence Examination
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A "6" = No Response - valid if:
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Disposal Code = 01 (Effective January 2004)
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Disposal Code = 10
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A "7" = Undeliverable Mail - valid if:
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Disposal Code = 01 and there is a claim amount present
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Disposal Code is 13 for any case with an undeliverable statutory notice of deficiency.
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Enter the two digit grade of the examiner who closed the case.
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03–14 are valid entries
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Group managers determine grade of case for all returns with a 1XXX employee group code.
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The final grade level of difficulty is determined when the examination has been completed. The manager will consider both the primary and related returns to determine the grade level.
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The entry for the primary return is composed of 3 digits and must be entered starting in the left most position.
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The related returns are graded to be the same as the primary return therefore the same three digit code is used followed by an "R" .
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Enter the primary return information in Item 405–408 for each related return.
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No matter how selected or when assigned, include:
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returns filed for prior or later tax periods for the same taxpayer,
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related returns for the same tax period as the primary return,
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related returns for prior or later tax periods than the primary return.
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When the related entities are examined by other examiners, each manager grades the separate entities as separate cases and the "R" is not entered.
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This item is required for area examinations only. Enter the last name and first initial only.
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This field is used to reflect:
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delinquent returns secured by Examination
Note:
Effective 1/1/1999, this field is no longer used for delinquent returns. See See IRM 4.4.12.4.73. for cases closed after 12/31/1998.
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adjustments to non-taxable returns.
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Dollars only field—Do not enter cents
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Circle "plus" to reflect increase in income; "minus" to reflect a decrease.
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Enter the amount on Line 2 and Line 5.a.(1), Line 5.b.(1), etc. from Form 4605. Do not include adjustment amounts that are included more than once.
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Sch K–1 has certain portfolio income and expense items that are shown on Line 4 and 11. An adjustment made portfolio income would be shown on Form 4605 as an "adjustment to portfolio income" and also as an "adjustment to investment income included in portfolio income" . To prevent adjustment amounts from being duplicated, do not include adjustments made to "investment income included in portfolio income" and investment expense in deductions related to portfolio income:
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If case is being closed to Appeals as unagreed, enter the entire adjustment amount in Item 34 and leave Item 18 blank.
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Enter the net of all adjustments that are processed using the quick (manual) assessment procedures.
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If more than one quick assessment has been processed, ensure that this entry is the total of all assessments processed. See IRM 4.4.12.4.47.8.
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EFFECTIVE 1/1/98, DO NOT INCLUDE penalty adjustments. (i.e. TC160, 305, 320, Credit Reference #680, 681, and 682).
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The net total of all credits (i.e. Reference Numbers 764, 765, 806, 807) if processed as part of the quick assessment.
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If the same tax will be assessed against both taxpayers, such as petitioning/non-petitioning cases, DO NOT enter the NMF Assessment amount in Item 35, otherwise enter the NMF tax assessment amount in Item 35.
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If the same tax will be assessed against both taxpayers, such as petitioning/non-petitioning cases, DO NOT enter the NMF assessment amount in Item 35.
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If different tax will be assessed such as culpable spouse cases, enter the amount of the NMF assessment in Item 35.
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Do not include reference number adjustments which are only used to update information fields on Master File or alert Master File to make special interest computations (i.e. Reference Numbers 221, 320, 878, 881, 882, 885, 886, 887, 888, 889, 890, and 999).
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Include prior manual assessments on reopened cases if the case was reopened with AMSTUR or AMSTUB (TC 300 indicator will = 6. Do not include prior manual assessment amounts on reopened cases if the case was reopened with AM 424.
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AIMS contains numerous computer checks that are based on the disposal code and the Examination Results.
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This entry is not valid on:
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no change (DC 01 or 02) cases, or
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non-taxable returns (Activity Codes 224, 287–290, 480–483, and 992).
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There are cases that are truly changed cases, but have no examination results. These cases will require an amount of $1 in Item 35 with a Disposal Code of 12 in Item 13. Some examples of these cases are:
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Barred assessment cases
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Interest assessment only
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Tax assessments that are offset by credits
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Penalty Only cases
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All items that are to be included in the hash total have shaded fields on the Form 5344.
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The computer will compare the hash total entered in Item 36 to the total of individual items as entered by the terminal operator. This will insure the accuracy of the input of individual entries.
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Item 37 must always be completed when closing delinquent returns picked up during the examination and sent to the campus for processing.
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This entry is what gives Examination credit for a delinquent return pick-up on Table 37.
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If the delinquent return is incorporated into the examination, this item must be blank.
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If Item 37 is entered, Item 414 is required.
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Enter "F" if criminal prosecution has been successfully concluded.
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Enter "C" if the 75% fraud penalty was asserted under IRC 6663.
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The appropriate three digit state agency code is entered when disclosure is made to a state agency. The entry of this field causes a TC 120 to be generated. See IRM 4.4.28 for a list of the codes.
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When assignment of a project code is required and the AIMS data base is carrying an incorrect project code or no project code, enter the designated three digit code.
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Identifies examined issues that resulted in no change to taxable income. The no-change issues codes are stored at Master File and can be viewed using IMFOLZ/BMFOLZ. If a subsequent return is examined, these codes are printed on the Form 5546.
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Enter eight-digit code without periods or dashes from Publication 1102, Uniform Issue List.
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Up to five entries may be made. If more than 5 no change issues, enter the code for the five most significant issues.
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A list of No-Change Issue Codes can be found on the AIMS web site.
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Effective 1/1/2004, alpha codes will be valid in Item 41.
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Required when closing examinations with DC 01 or DC 02.
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Should be used with other examined disposal codes if one or more classified issues result in a no change to taxable income.
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In some cases, all examined issues are adjusted yet the return is closed as a Disposal Code 01 or 02 due to other circumstances, such as negative taxable income, offsetting adjustments and de minimum tax liability. In these cases, enter all 9's in Item 41.
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The posting of the adjustment can be delayed from 1-6 cycles.
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Reviewer’s signature and date must be entered in this field if the return was reviewed.
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The box should be checked if the case is part of the Coordinated Agent/Tax Auditor Program.
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The Aging Reason Code 50 must be entered on the data base before closing to ensure that the case is included in the CATP reports.
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The name of the tax examiner that prepared the Form 5344 should be entered in the space provided.
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This item is used if all or part of an NOL carryforward is disallowed if the carryforward year is not picked-up. See Exhibit 4.4.12–6 for examples.
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This item is used to identify the type of NOL/Carryforward Return that will be reflected on the NOL page of Table 37. See Exhibit 4.4.12-6 for examples.