AccessibilitySkip to Top NavigationSkip to Main ContentHome  |  Contact IRS  |  About IRS  |  Site Map  |  Español  |  Help  

Part 4. Examining Process

Chapter 4. AIMS Processing

Section 25. Quick Assessments

4.4.25  Quick Assessments

4.4.25.1  (08-01-2003)
Introduction

  1. This chapter contains information and procedures on processing quick/prompt assessments. The term quick is used throughout the text although it applies to both quick and prompt assessments unless noted.

4.4.25.2  (02-08-1999)
Required Quick Assessments

  1. Situations requiring quick assessment action are as follows:

4.4.25.2.1  (08-01-2003)
Agreed Unpaid Deficiencies

  1. Agreed, unpaid deficiencies for income, estate, gift and certain excise taxes if the assessment CAN NOT be input through AIMS in the time frames stated below:

    • Less than $100,000 - manual assessment not required unless it meets one of the requirements below. Input through terminal.

    • $100,000 and greater - if the 23C date will not be within 30 days from agreement date.

4.4.25.2.2  (02-08-1999)
Statute of Limitations

  1. Statute of limitations will expire within 60 days.

4.4.25.2.3  (08-01-2003)
Bankruptcy Cases

  1. Bankruptcy petitions filed prior to October 1, 1979.

  2. Generally quick assessments are not required for bankruptcy petitions filed after October 1, 1979.

  3. If the account contains a "–V" freeze (TC 520 Bankruptcy with CC 85–89) the taxpayer is in bankruptcy status and making an assessment generally is prohibited by law.

  4. Contact the Examination Bankruptcy Coordinator or Technical Support for permission to make the assessment.

    IF advised THEN
    to make the assessment note the name and title of the person authorizing the assessment as well as the reason this assessment may be made in the "Remarks" section of Form 2859, Request for Quick or Prompt Assessment. Forward a copy of Form 2859 to Collection Technical Support.
    not to make an
    assessment     		forward the case file to the Examination Bankruptcy Coordinator. In the Remarks section of Form 3198 note the information about the bankruptcy and the name and title of the person in Technical Support providing the information.

4.4.25.2.4  (02-08-1999)
IRC Section 6871

  1. Deficiencies involving bankruptcy and receivership cases under IRC Section 6871, Claims for Income, Estate, Gift, and Certain Excise Taxes in Receivership Proceedings, etc.

4.4.25.2.5  (08-01-2003)
Amended Return

  1. Taxable amended returns received within 120 days of statute expiration.

4.4.25.2.6  (02-08-1999)
$100,000,000 Assessments

  1. Quick assessments cannot be transferred to Master File for amounts of $100,000,000 (100 million) or more. Such assessments must be split and processed as multiple assessments on separate assessment documents. Ensure the campus Accounting Section is alerted that the assessment is being split due to the assessment being $100,000,000 or more.

4.4.25.3  (02-08-1999)
Required Research

  1. ALWAYS obtain current account research data when a quick assessment is warranted.

4.4.25.3.1  (02-08-1999)
IDRS History Item

  1. Research CC TXMOD for a control base or history item that indicates a quick is already in process. Contact the employee for information.

4.4.25.3.2  (08-01-2003)
Retention Register

  1. If an account has been moved to the retention register, it must be brought back to Master File to prevent the quick assessment from going unpostable when it is transferred to Master File.

    Note:

    Do not delay in performing the quick assessment action while the account is being brought back to Master File.

  2. When an account is moved back from retention, Master File automatically sets an "–I" freeze on the account. Therefore, interest must be calculated and input with TC 340, to prevent the account from unposting when the quick assessment transaction is transferred-in to Master File.

    Note:

    If an IMF account went to retention in 1994 or subsequent, CC IMFOLR will automatically reestablish the account back to Master File. If a BMF account went to retention in 1995 and subsequent, CC BMFOLR will automatically reestablish the account back to Master File. An "-I" freeze for a restricted interest computation will not be generated if brought back in this manner.

4.4.25.3.3  (02-08-1999)
Payment

  1. ALWAYS research CC TXMOD to determine if a payment has been input, but has not posted to Master File.

  2. To prevent the erroneous release of the payment, do not process the second adjustment document through AIMS until the payment posts to Master File. Refer to IRM 4.4.25.9 for complete instructions for processing the second adjustment document for quick assessments.

4.4.25.3.4  (02-08-1999)
Address

  1. The taxpayer’s most current address must be used.

4.4.25.3.5  (02-08-1999)
Civil Penalty Name Line

  1. For civil penalty assessments, MFT 55 ONLY, a civil penalty name line must be present at Master File PRIOR to requesting the quick assessment. Input Form 2363 if necessary.

4.4.25.4  (08-01-2003)
Quick Assessment Forms

  1. Use Form 2859, Request for Quick or Prompt Assessment, to request a quick assessment. Include a Form 8278, Computation and Assessment of Miscellaneous Penalties if applicable.

4.4.25.4.1  (02-08-1999)
Form 2859

  1. Requests for quick assessments will be made to the campus Accounting Branch, Accounting and Control Section, Journal and Ledger Unit on Form 2859. Instructions for completing Form 2859 are on the back of Part 4 of the form. In addition:

    1. Indicate in "Remarks" if billing needs to be withheld.

    2. Enter the 23C Date and the DLN assigned.

    3. Enter an agreement date only if the taxpayer signed an agreement and interest is being assessed with TC 190.

    4. Do NOT compute interest on civil penalty assessments.

4.4.25.4.1.1  (02-08-1999)
23C Date

  1. Use the following to determine the 23C date.

    IF the statute date
    will expire     		THEN the 23C date will be
    within two days the same day that the assessment is faxed to the Accounting function
    in more than two days the fifth work day after the assessment is faxed to the Accounting function

4.4.25.4.1.2  (08-01-2003)
Blocking Series

  1. The blocking series for Quick assessments are:

    • Agreed Exam: 130-131

    • Unagreed Exam: 132-134

  2. The blocking series for Prompt Assessments are:

    • Agreed Prompt: 150-154

    • Unagreed Prompt 155-159

4.4.25.4.1.3  (02-08-1999)
Credit Adjustments

  1. Requests for quick assessments may involve an abatement or an increase or decrease in credits (Item 15, Form 5344 and 5403).

4.4.25.4.1.3.1  (02-08-1999)
Net Increase in Credits

  1. The total to be assessed must include these adjustments in Part C, items 19 & 20 of Form 2859.

4.4.25.4.1.3.2  (02-08-1999)
Abatement or Net Decrease in Credits

  1. The manual assessment document going to Accounting Branch cannot include an abatement nor a credit increase. Enter on Form 2859, as a "memo credit," the amount of the abatement and/or credit increase. Item 23 in Part C should not include any pending credit transfers. The abatement and/or credit increase adjustment must be processed on an additional adjustment document. Abatement of penalties should be shown in Part C, Item 25.

  2. If a decrease in tax is involved, enter on Form 2859 as a "memo credit," the amount of tax decrease and the cycle the Form 5344 or 5403 post.

  3. If excess credits are present and additional deficiencies will be assessed, enter a TC 570 with a zero amount to prevent the credit from refunding.

4.4.25.4.1.4  (02-08-1999)
Deficiency/Overassessment

  1. Prompt, jeopardy or quick assessments may sometimes involve a deficiency for one tax period and an overassessment for another tax period. Process these situations as follows:

    1. For the overassessment tax period(s), manually compute the interest and enter it with the applicable transaction code on the adjustment document along with a Hold Code 2.

    2. Prepare Form 2424 to manually transfer the applicable credit (TC 820 debit) from the overassessment year to the deficiency year (TC 700 credit with secondary TC 570 blank) . If ALLOWABLE interest is involved use a second Form 2424.

    3. Place the following caption on Form 2859 to alert the Accounting Branch of the available credit: "Credit of $ (amount) being transferred from (period)." Attach the Form 2859 to the deficiency year and forward to Accounting Branch.

    4. Forward the overassessment document for processing.

    5. Forward Form 2424 for processing. Form 2424 should be input in the same cycle as Form 5344 or a later cycle. It should never be input in an earlier cycle.

4.4.25.4.1.5  (02-08-1999)
Delinquent Return Quick Assessment

  1. When the quick assessment is for tax shown on a secured delinquent return, process the same as for a deficiency, except for the following:

    1. Enter the tax shown on the delinquent return in Part C, item 3a (Tax — Original Return — TC 150) on Form 2859.

    2. Enter the return received date in Part C, item 3b, on Form 2859.

  2. Do NOT forward the secured delinquent return to the campus for processing.

4.4.25.4.1.6  (02-08-1999)
Reference Number Adjustment

  1. Adjustments to Item Reference Numbers cannot be made as part of the quick assessment. These reference numbers must be updated separately in Item 15 on F5344.

4.4.25.5  (02-08-1999)
Transmitting Quick Assessments to the Campus

  1. Fax quick assessments to the campus Accounting Branch using the following procedures.

    1. Prepare Form 2859 following procedures as described.

    2. Assign a control number for each Form 2859 that is faxed, i.e., FAX 59–055–1. The 1st and 2nd digits are the area office code; the 3rd, 4th and 5th digits are the Julian date that the Form 2859 is actually faxed; the last digit(s) is the number of the Form 2859. The control number will continue sequentially throughout the calendar year and will start over each January 1st. The control number should be entered in bold print on the top of each Form 2859.

4.4.25.5.1  (02-08-1999)
Form 3210 for Quick Assessment to Campus

  1. Prepare Form 3210 for each type of tax return. List the following:

    • Name Control

    • MFT

    • TIN

    • Tax Period

    • In the remarks area, the 23C date and the note "FAX QUICK ASSESSMENT"

  2. Address the Form 3210 to the appropriate function. Include the originator’s complete address, mail stop and FAX number in the "From" section for faxing back the receipted Form 3210.

4.4.25.5.2  (02-08-1999)
Faxing Assessment Forms to the Campus

  1. FAX assessment forms in the following order:

    1. Form 3210

    2. Form 2859

    3. Form(s) 5344 or 5403 or 8278 pertaining to Form 2859 in 2

    4. Repeat 2 and 3 for the next quick and so forth.

  2. Fax only once each day, if possible, and prior to 2:00 P.M.

4.4.25.6  (02-08-1999)
Terminal Actions

  1. Input an IDRS history item or activity code "MAAS (23C)" to alert other IRS employees that an assessment is in the process of posting.

  2. At local option, the quick assessment DLN may be entered on AIMS for research purposes. Prepare Form 5349 entering the quick assessment DLN in Item 58.

4.4.25.7  (02-08-1999)
Follow-up on Quick Assessment Request

  1. Receipt of the acknowledged Form 3210 is verification that the quick assessment request(s) was received in the Accounting function. Follow-up if the acknowledgment is not received by 10:00 a.m. the day after transmission.

4.4.25.8  (02-08-1999)
Quick Assessment Verification

  1. Receipt of a copy of Form 3552, Prompt Assessment Billing Assembly, is verification that the assessment has been made.

  2. Upon receipt, verify the accuracy of the assessment amount, as well as the name, address, TIN and tax period on Form 3552 for consistency with Form 2859.

  3. If any errors are detected in Form 3552, IMMEDIATELY contact the campus for issuance of a corrected bill.

4.4.25.8.1  (02-08-1999)
Follow-up on F–3552

  1. The Case Processing Support Manager or a designated employee must follow-up with the campus if verification of the assessment is not received.

    1. Follow-up on statute cases in sufficient time to prevent barred assessments.

    2. Follow-up on non-statute cases three weeks from the 23C Assessment Date.

  2. Upon receipt of verification, the statute control examiner will be notified in order to close the case from the open statute control file.

4.4.25.9  (02-08-1999)
Second Adjustment Document

  1. When a return is ready to be closed on AIMS (after a quick assessment), input the second adjustment document at the same time the quick assessment has been sent to Accounting unless one of the following conditions exist.

    1. A credit transfer, via Form 2424, is being made and will post to the module after Accounting has transferred the quick assessment to the Master File account.

    2. A payment has been processed but has not posted to Master File.

    3. The quick assessment involves interest bearing penalties/restricted interest.

  2. Prepare the second adjustment document as described below and process it through the terminal to generate a refile DLN.

    Note:

    Attach a copy of the Form 2859 to the back of the first page of the return as a permanent record before closing on AIMS.

4.4.25.9.1  (02-08-1999)
Form 5344

  1. Enter in Item 35, Manual Assessment Amount, the net tax adjusted by prepayment credits that were processed using quick assessment procedures.

  2. Enter the applicable Disposal Code in Item 13.

  3. Enter applicable reference numbers in Item 15.

    IF the sum of the
    adjustments, in Item
    12 and/or 15, is a     		THEN enter:
    net increase 1. TC 300 with zero amount in Item 12.
    2. Hold Code 2 in Item 7 if a manual offset is involved.
    net increase AND there is a decrease in tax 1. TC 301 with the decrease amount and TC 770 with zero in Item 12.
    2. Hold Code 1 in Item 7, or Hold Code 2 if there is a credit balance on master file.
    net decrease 1. If the tax liability is to be decreased, enter TC 301 and amount in Item 12. Otherwise, enter TC 300 with zero amount. If TC 300 with zero amount is entered and there is a credit balance on master file, enter Hold Code 2 in Item 7.
    2. If penalty or interest is to be decreased, enter and code the amount in Item 12.
    3. If credit is to be increased, enter the amount and appropriate credit change reference number in Item 15.
    4. Hold Code 1 in Item 7.

4.4.25.9.2  (02-08-1999)
Civil Penalties — Form 8278

  1. Civil Penalties are not controlled on AIMS. Therefore, after a civil penalty quick assessment has posted to Master File the ENTIRE civil penalty file will be sent to Files in the campus for refiling under the quick DLN.

  2. For civil penalty quick assessment cases that require Technical Support Suspense, send the original case file sent to Technical Support Suspense. It must contain the Forms 2859 and 8278. Annotate them with the quick assessment DLN and 23C date to guard against duplicate assessments.

4.4.25.9.3  (02-08-1999)
Prior Year Returns

  1. All prior year returns received in the areas directly from taxpayers or taxpayer’s representatives are reviewed by the teller to determine if 90 days, or less, remain on the Assessment Statute Expiration Date (ASED) and to determine if the return is:

    1. a prior year amended return declaring additional tax, or;

    2. a possible duplicate return, i.e., no indication that it is an original delinquent return per the taxpayer’s correspondence or other information.

  2. Prior year returns meeting the criteria in (a) or (b) above will be forwarded to the processing function for a quick assessment, if required.

4.4.25.9.3.1  (02-08-1999)
Procedures

  1. Tax examiners will process these returns as follows:

    1. Secure a Master File transcript on the account to avoid duplicate assessments. After terminal research, if the tax period is found to be currently under examination, coordinate with the function who has control of the return prior to making the quick assessment.

    2. Prepare Form 2859 and attach to it the tax return. Assess in accordance with quick assessment guidelines. If a full payment was made with the return, (i.e., tax, delinquency penalty, and interest), notate in the "Remarks" section, "Withhold Collection/Do Not Bill Taxpayer." If the payment does not cover the full deficiency, no notation to withhold collection is necessary.

    3. Compute interest using normal interest computation procedures. If restrictions appear on the Master File transcript, use applicable restricted interest procedures.

    4. Delinquency penalty TC 16X should be computed unless prepayment credits exceed tax per return and a refund will be due to the taxpayer after assessment. In these cases, no delinquency penalty is required.

    5. After the assessment has been made, forward the entire assessment package to the campus Accounting Branch.

4.4.25.9.4  (02-08-1999)
Processing Form 940, Federal Unemployment Tax Adjustments

  1. When adjustment to Form 940 is being processed as a quick assessment, the Accounting function must ALWAYS be provided with the amount of theTOTAL CORRECTED 940 WAGES. If a credit reduction state is involved, the Accounting function must also be provided the CREDIT REDUCTION WAGES, THE STATE(S) THE CREDIT REDUCTION WAGE APPLIES TO AND THE TOTAL CREDIT REDUCTION AMOUNT. This information will be entered in Items 13–15a of Form 2859. When completing Form 2859, enter in Item 14, the Total Credit Reduction AMOUNT, and NOT the credit reduction wages as the form indicates. In Item 15a, enter the two digit state code and the amount of credit reduction wages for each state. The TOTAL of the credit reduction wages entered in Item 15a, must also be provided to the Accounting function.


More Internal Revenue Manual