- 25.3.1.1 Introduction
- 25.3.1.2 Overview
- 25.3.1.3 Criteria for Bringing Suit
- 25.3.1.4 Collection Action during Litigation
- 25.3.1.5 Litigation Transcripts
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This handbook has been reformatted into the new IRM writing style and format which will be issued in 81/2 x 11 size. There are no substantive changes from existing instructions.
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There are situations which require the aid of the court to collect the tax or provide additional protection to the Government. This handbook contains procedures for initiating civil judicial actions once all appropriate administrative actions have been taken.
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Do not recommend a suit without exhausting administrative remedies. If there are untried administrative tools which you know would be ineffective, explain this in your recommendation.
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Do not recommend a suit if the amount expected to be collected is less than the amount in LEM 5.5. If there are overriding concerns which dictate a suit for less than this amount, fully explain them in the recommendation.
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Do not take enforced collection action on any liability of a taxpayer involved in litigation without prior discussion with Counsel.
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Report any account balance changes on modules in litigation to Counsel.
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When refund litigation on a divisible assessment (for example, the Trust Fund Recovery Penalty) is pending, IRM 1.2.1.5.3 Policy Statement P–5–16 requires withholding collection as long as the government's interest is protected and collection is not in jeopardy. In ensuring that the government's interest is protected, consider requiring surety bond or other collateral if filing a notice of lien would not provide sufficient protection.
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Occasionally an issue is litigated through a test case while other cases are held in abeyance. Treat such related cases as if the taxpayer were involved in litigation, provided collection is not in jeopardy, the government's interest is protected, and the issue is the same as the one being litigated. Resolve amounts not in dispute before suspending collection.
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When collection is being withheld, monitor the progress of the litigation to ensure that the case is being pursued.
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Litigation transcripts are processed by the Area Technical Support function
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RFND LIT transcripts are processed by the function with responsibility for the litigation (See IRM 25.3.3.2.1.)
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TXCT CASE transcripts are processed as follows:
If Then the module has been in BAL DUE status Area Technical Support function otherwise Appeals
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If the transcript shows that an available credit will satisfy a frozen module, request input of TC 521 to each module containing a TC 520 to release the freeze and to permit automatic application of the credit to that module.
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If a refund to be applied will not fully satisfy the account, or if a credit is to be transferred from one Master File to another, and TC 520 should not be reversed, prepare a memorandum requesting SCCD to manually transfer the credit.
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If the credit is to be refunded to the taxpayer without offset, prepare Form 5792, Request for IDRS Generated Refund.
Note:
For extensive information about the different types of suits, see IRM 5.17.4, Suits by the United States, and IRM 5.17.5, Suits against the United States, in IRM 5.17, Legal Reference Guide for Revenue Officers