This section contains information regarding the establishment of and requirement for control of the statute of limitations date for returns controlled on ERCS.

IRM Handbook 25.6, Statute of Limitations Handbook, provides additional information regarding control of the statute of limitations on AIMS and responsibilities for controlling the statute of limitations date.

Access to ERCS for the purpose of updating the statute of limitations is limited to those with WRITE permission. This is generally the secretary or other clerical personnel.

An individual with APPROVAL authority must approve the updating of the statute of limitations on ERCS. This is generally the group manager, support manager, or the next higher level manager.

The purpose of APPROVAL authority for updating the statute of limitations is to ensure control over the proper use of statutes on cases established on ERCS. Updating and controlling the statute on ERCS is important to ensure that there is no loss to the taxpayer or the government from erroneous abatements or barred assessments. Because ERCS provides reports to assist in the control of the statute of limitations date, it is imperative that the correct statute date is recorded on the system.

Any time a statute is changed, or updated on ERCS, approval is required by the next level of management.

Statute of limitation dates are created when the tax return is filed with a campus. This date is created on the Master File and is the date created on ERCS from AIMS. Generally, there are three reasons a statute would be updated on the ERCS system:

The approval and update of the statute of limitations on ERCS should be done immediately after the event occurs necessitating a statute update. This is covered in more depth in this chapter under section 3.4 below.

Instructions on how to update statutes of limitation on ERCS can be found in the ERCS user handbooks.

Any individual handling a return has the responsibility to ensure the statute of limitations date for that return is correctly reflected in the case file and on ERCS.

When an individual in a group, or other function, receives a case from a campus, or other function, he/she is required to ensure the statute of limitations date is properly reflected in the case file and on ERCS.

If the statute of limitations date is improper, the receiving function should immediately prepare Form 5348, Examination Update, for the manager's written approval. After approval by the manager, the secretary will update the statute date on ERCS, and give both the form 5348 and the return to the manager for approval on ERCS. The first individual receiving the return in the function should do this. All individuals dealing with the return in the function should ensure that the statute date is correct when they receive the return.

Form 895, Notice of Statute Expiration, either located on the case file or tax return, should also be updated to the new statute date; if applicable. General instructions on forms 895 use can be found in IRM 25.6, Statute of Limitations Handbook.

The ERCS upload, done daily, will automatically update the statute of limitations date on AIMS.

The group secretary is responsible for ensuring forms 895 are provided for all returns requiring them. Therefore, it is the secretary's responsibility to run the appropriate 895 Reports as noted in the Section 6, Reports.

Either the group manager/section chief or secretary is responsible for running the Pending Statute Report for his/her group or section on a monthly basis. Requirements for this are outlined below in the Section 6, Reports.

In the group or function, the group manager, or support manager, and examiner, or person assigned control of the return, is ultimately responsible for the control of the statute of limitations and ensuring that the proper statute date is on ERCS.

When a return is received from the campus or other function, the secretary or other receiving individual should review the case and, if the statute date is improper, the return should be given to the group manager or support manager for review and signature approval of the statute update. After approval, the secretary will update the statute on ERCS. The return and/or case file should indicate the new statute date.

When a return is received by the revenue agent/tax compliance officer (hereinafter referred to as technical employee), etc., he/she should ensure that the statute of limitations date on ERCS is correct. If the date is not correct, the technical employee will prepare form 5348 for review and signature approval of the statute update. After managerial approval, the secretary will update the statute date on ERCS and provide the form 5348 and the return to the group manager for approval on ERCS.

Collateral records maintained on ERCS may also require statute of limitations dates. When a collateral record actually has a live statute of limitations (e.g., penalty cases), it is required that this statute date be controlled on ERCS as would normal records maintained on ERCS.

All returns with statutes expiring within 180 days (120 days for returns in Case Processing), irregular statute dates, or all returns with alpha statutes, require that a form 895 be placed on the case file (see IRM 25.6, Statute of Limitations). Areas have the option of increasing the 180- day and 120-day timeframes to a maximum of 400 days; however, they cannot shorten the timeframes. ERCS generates form 895 based on the statute of limitations date recorded on ERCS. Forms 895 currently are generated through ERCS using the computation based on the statute date in ERCS. If a statute of limitations is updated on ERCS prior to the statute of limitations falling within the 180-day timeframe, form 895 will not generate until the statute of limitations is again within the 180/120-day timeframe. In cases such as these, a manually prepared form 895 will be required. Some areas may locally require (particularly in tax compliance office groups) all prior year returns, whose timely statute date falls within the 180 days, have form 895 on the case file. ERCS will not generate a form 895 until the established timeframe has been reached.

The secretary should generate Form 895 from ERCS when the return has 180 days remaining on the statute. Forms 895 should also be generated on all returns containing alpha statutes.

ERCS will automatically indicate that a Form 895 has been issued. When Form 895 is returned, the secretary should update ERCS to indicate that the 895 has been received. Instructions on this process can be found in the ERCS user handbooks.

The secretary should reprint forms 895 as necessary if the form 895 has not been returned from the individual responsible for the return within a specified period of time. The secretary can run the Reprint Specific 895 Forms or the Reprint ALL 895 Forms for this purpose.

IRM 25.6, Statute of Limitations Handbook, contains additional information regarding the maintenance of forms 895 and the requirements for completion and return of the form.

There are two types of ERCS reports that provide statute of limitations information.

Pending Statute Report — This report is used to monitor impending statute returns to ensure that statutes will not expire on returns controlled on ERCS.

895 Report — This report is used to monitor the issuance and receipt of forms 895 on impending statute cases, cases where the statute is expired, and cases which have alpha statute dates.

Section 6, Reports, contains detailed descriptions as well as recommended uses and frequency of generating reports available through ERCS.