In the response phase, certain situations require specific procedures. The following instructions cover responses that need special handling, Lost Responses, and Refiling Cases.

IRC Section 6404(e)(1) provides information for abatement of interest on deficiencies or payments of deficiencies attributable to any unreasonable error or delay by the Service in performing a ministerial or managerial act.

A ministerial act is a procedural or mechanical action that does not involve the exercise of judgment or discretion, and that occurs during the processing of a taxpayer's case after all prerequisites to the act have taken place.

A managerial act is an administrative action that occurs during the processing of a taxpayer's case and that involves the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel. Interest attributable to a general administrative decision, such as the Service's decision on how to organize the processing of tax returns, may not be abated.

IRC Section 6404 also provides several exceptions to the IRC section 6601 general requirement that interest be charged from the due date of the return until the balance due is paid in full. Annotate and route taxpayer requests and claims for abatement of interest to the Interest Abatement Coordinator (IAC) for processing.

Due to the adverse impact on Accounts Receivable (A/R), the Service must strive to minimize the volume of unresolved large dollar debit and credit modules/issues in the inventory. Therefore, in accordance with prevailing guidelines and in tandem with all other processing timeliness requirements (i.e., first in, first out, etc.), it is necessary to ensure that all modules/issues involving a balance of $100,000 and over are expeditiously resolved.

When monitoring large dollar cases identified on the Large Dollar Accounts Receivable system, if cases include the Large Corporation code; contact the Technical Unit (or designated function) to determine the current status of the account/module.

Most of the cases that meet the large dollar case criteria (the proposed assessment is $100,000 or more) are identified by the system (prior to the assessment being input) and the required special case processing initiated by the AUR Control Function.

Cases not identified by AUR system checks (including fully agreed cases), the tax examiner should:

The Tax Examiners (TE)with the locally designated UIDs to work Accounts Receivable Dollar Inventory (ARDI) cases, take the following actions:

IRC Section 6751(b)(1) provides that, in general, no Accuracy-Related Penalties shall be assessed without prior written managerial approval. However, even though the Code refers to assessment, managerial approval is needed at the time the penalty is being asserted unless an exception in (2) and/or (3) below, apply.

A penalty notice may be issued in the initial letter to the taxpayer proposing a deficiency for Substantial Understatement, if the taxpayer did not attach any evidence of substantial authority (even if it is evidence that you would reject) to the tax return and did not make a disclosure (even if it is not adequate) on that return. If the taxpayer does not provide any explanation or excuse for the understatement in response to the notice or to a subsequent Statutory Notice of Deficiency, the Accuracy-Related penalty may be assessed without written managerial approval.

A penalty notice may be issued (in the initial letter to the taxpayer proposing a deficiency) for negligent conduct when the determination is automatically made because the taxpayer failed to report income reported on a third party IR for a second tax year. If the taxpayer does not provide any explanation or excuse for the conduct in response to the notice or to a subsequent Statutory Notice of Deficiency, the accuracy-related penalty may be assessed without written managerial approval.

In a case to which the exceptions in (2) or (3) above, initially applied, but for which the taxpayer provides an explanation or excuse, written managerial approval is needed at the time the tax examiner determines to continue processing the case and issues a 2626C Letter explaining why the taxpayer's request for penalty waiver was denied.

Depending on the taxpayer's response, the Accuracy-Related Penalty Due to Negligence or Disregard of Rules or Regulations and/or the Accuracy-Related Penalty Due to Substantial Understatement of Tax could be:

Use the Determine Negligent Status screen to indicate if the IR(s) are considered negligent. See IRM 4.19.3.16.7 and IRM 4.19.7, Negligence Status screen.

If the taxpayer's response claims/cites substantial authority, See IRM 4.19.3.16.5 (9).

Waive the penalty if the taxpayer provides an explanation that meets reasonable cause criteria. Consider ALL facts and circumstances of each case on an IR by IR basis in determining reasonable cause. Refer to IRM 20.1, Penalty Handbook, for uniform application of reasonable cause criteria. See IRM 20.1.1.3 for Relief from Penalties, in general.

If reasonable cause is established for only some of the IRs, all additional taxes, tax credits, and prepayment credits must be allocated between the IRs with reasonable cause and those without.

If a CP 2000 is issued and the substantial understatement penalty is waived, enter a zero (0) in the SUBSTANTIAL UNDERSTATEMENT PENALTY field on the Limit Penalty window.

Send PARAGRAPH 101 ( See Exhibit 4.19.3-12..

Action 61 Guidelines are the result of a task force initiated to provide timely and quality responses to taxpayer correspondence. The general guidelines are:

The AUR system automatically generates a 4314C Letter when the most recent IRS Received Date ages beyond the Action 61 Age Date input by the AUR Coordinator.

When a taxpayer contact includes clear and concise notification of an address change, including foreign address change, input the appropriate entries on the Update Address window to update Master File (use Address Type Code I). See IRM 4.19.7, Update Address window.

For certain notices, such as the Statutory Notice of Deficiency, the Internal Revenue Code provides that when the notice is sent to the taxpayer's last known address (LKA), the notice is legally effective even if the taxpayer never receives it.

Contacts that are considered clear and concise notification of an address change include the following:

Clear and concise notification, whether written or oral, must contain the following:

If any of the information from IRM 4.19.3.20.1.6 (3) or (4) is missing from the taxpayer's request, do not update Master File. Input the appropriate entries on the Address Update window to make a temporary address change (use Address Type "T" ). Send the appropriate letter to the taxpayer, at the new address, using a Special Paragraph to advise him/her of the information needed. Enclose Form 8822, Change of Address.

If the taxpayer provides a temporary address, a beginning and ending date of when the taxpayer will be using that address should be given. Input the temporary address on the Update Address window, using Address Type T. Do not update Master File. If the taxpayer does not provide an ending date, input a date that is 60 days from the current date.

Any time doubt exists as to whether an address should be changed, discuss it with your manager who will either provide an answer or refer the question to the Disclosure Office.

If a document is received containing a name or address change which does not meet the specific requirements for updating Master File, the information should be noted and maintained in the AUR case file. If a notice is returned, the Service is required to use due diligence in locating the taxpayer, which includes a search of existing records to locate any updated information supplied by the taxpayer.

Adjustment function frequently receives Form 1040X or correspondence from taxpayers who received AUR notices. Multiple assessments could result if both Adjustments and AUR simultaneously work these cases.

To eliminate multiple assessments:

Responses that deal with multiple tax years are treated as separate responses whenever feasible. In such instances, photocopy the response so each tax year has the appropriate response to resolve the case. Route copies of the responses that are non-AUR to Accounts Management.

If the taxpayer makes a non-docketed appeals request (i.e.: specifically requests a hearing with an Appeals Officer or submits a Form 12203, Request for Appeals Review), prior to issuance of a Statutory Notice : attempt to resolve the issue(s) by telephone. Document the call(s) with Case Note(s). If it is still necessary to transfer the case to Appeals:

If the taxpayer makes a non-docketed appeals request (i.e.: specifically requests a hearing with an Appeals Officer or submits a Form 12203, Request for Appeals Review) after the issuance of a Statutory Notice :

The BWH status will not update unless an assessment was made and the change to the AGI includes the income types listed in paragraph (2) below. Process Codes relating to BWH are no longer necessary since the assessment data will "turn on" the BWH indicator as required.

Backup Withholding applies only to income reported on Form 1099. A taxpayer who fails to report interest, dividend, or patronage dividend income is subject to BWH prior to payment. The BWH rate for calendar years 2003 through 2010 is 28%.

The following indicators are input on the Master File to reflect the taxpayer's BWH status and display on the Tax Account screen in the BACKUP W/H field:

When the taxpayer submits additional information (i.e. a second reply after the case is closed) and is no longer subject to BWH, prepare Form 8408, Notice of Action For Entry on Backup Withholding File. The processing of Form 8408 has been consolidated to Kansas City (W&I) and Philadelphia (SB/SE) Campuses. Route the completed Form 8408 to the appropriate Campus based on BOD.

Once the taxpayer has been contacted by AUR and there is an indication that the taxpayer has filed bankruptcy or the taxpayer states that he/she has filed for bankruptcy, See IRM 4.19.3.20.1.10.1 for further instructions.

The following Freeze Codes and/or Transaction Codes, present on the Tax Account screen indicates that the taxpayer filed for Bankruptcy:

If the taxpayer's response indicates participation in military action as a member of the U. S. Armed Forces (in an area designated as a combat zone as defined in IRC Section 7508 or in an area certified by the Department of Defense as being in direct support of military operations in a combat zone, for which the person receives special pay for duty subject to hostile fire or imminent danger, or in a qualified hazardous duty area or performing qualifying service outside such area as defined by Congress, per Pub. 3, Armed Forces' Tax Guide, Combat Zone Exclusion, for the tax year at issue and for the most recent year for listings of specific areas) take the following action:

The deadline extension provisions may also apply to individuals serving in the combat zone in support of the U.S. Armed Forces, such as Merchant Marines serving aboard vessels under the operational control of the Department of Defense, Red Cross personnel, accredited correspondents, and civilian personnel acting under the direction of the U.S. Armed Forces in support of those forces. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

A case is considered a Congressional if correspondence/inquiry is received on U.S. Congressional Letterhead or attached to U.S. Congressional Letterhead.

If you discover a Congressional case, immediately give the case to the AUR Taxpayer Advocate liaison for expedite handling.

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If a response is received stating that both taxpayers are deceased (for married filing jointly), or that a single taxpayer is deceased (including letters marked "Deceased" by the Post Office), close the case No Change.

If a disagreed response is received and the income is jointly owned with a surviving spouse, issue an appropriate letter with the following Special Paragraph: "All income attributable to you or your spouse must be included on the joint return you filed." or send PARAGRAPH 129 ( See Exhibit 4.19.3-12) on the notice.

Responses to an AUR notice may state that the taxpayer died since filing the tax return for the U/R year. Input the following information on the Update Address window:

A taxpayer may stop the further accrual of interest while the case is being resolved by making either a payment or an IRS Section 6603 deposit.

The American Job Creation Act of 2004 created new IRC Section 6603, which allows taxpayers to submit deposits to suspend the running of interest on potential underpayments.

If the taxpayer requests a return of a IRC Section 6603 deposit, a manual refund is required. See IRM 21.4.4, Manual Refunds, IRM 21.5.1, General Adjustments, and IRM 21.5.2, Adjustment Guidelines, for more information.

If the case is identified as entitled to disaster relief (either systemically or through taxpayer self-identification) and a response is received indicating the taxpayer's home, place of business or records were lost, destroyed or not accessible due to the disaster, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Otherwise, continue processing.

If a taxpayer files a joint return and later becomes separated or divorced, both taxpayers remain responsible for the full amount of tax due on the jointly filed return. For this reason, mail a copy of the CP 2000 or Statutory Notice to each taxpayer at their separate residences. Use caution to ensure that the address of one spouse is not disclosed to the other.

The signatures of BOTH taxpayers are required on consent to tax increase for a jointly filed tax return that is not fully paid.

If only one taxpayer has signed the consent to tax increase, and the address of the spouse is known, or the response indicates the taxpayer is not liable for the tax, determine if the non-responding spouse received a copy of the notice by researching the address portion of the CP 2000 History.

If the address for the non-responding spouse is not known, or the spouse did not receive a copy of the original CP 2000, research IDRS using CC:INOLE with a Definer of "S" .

If the address of the divorced/separated spouse is not provided, or the spouse did not receive a copy of the CP 2000/Statutory Notice, use IDRS and research Command Codes (CC) SPARQ, INOLE, IRPTR, or ENMOD to search for the address. If the address is not found using these Command Codes, use MFTRA. You can request MFTRA from the Request Research window.

The taxpayer who filed a joint return may respond to a Statutory Notice that he/she is now divorced and/or separated and not fully liable for tax. Use the following procedures to process the case.

If the taxpayer responds to an AUR notice with a Form 1040X or an amended return, review the Tax Account screen to determine if the adjustment posted. While the following instructions refer to Form 1040X, they also apply for amended returns.

If the Form 1040X adjustment did not post and the taxpayer responds with a mathematically correct Form 1040X or a signed statement that recalculates the tax on some but not all of the U/R issues, or does not address the penalties, send the appropriate notice to the taxpayer for signature. Send PARAGRAPH 171 ( See Exhibit 4.19.3-12) to address penalties not included on the amended return. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Advise the taxpayer the Form 1040X information was included in the proposed adjustment.

If the Form 1040X correctly includes all U/R issues, math verify Form 1040X:

Input/verify the appropriate entries on all screens. Input PC 53 for a CP 2501, after accessing the Assessment window. Input "7" in the NOTICE INDICATOR field of the Summary screen, IPC "RN" for a Recomputed Notice, or "SR" for a Supplemental Report to the Statutory Notice.

If the Form 1040X information will result in a zero (0) tax change, and a TC 976/977 or TC 971 AC 010 or 012 - 016 posted, input/verify TC 290-0 on the Assessment window to release the A Freeze. Close the case with the appropriate process code.

If the Form 1040X adjustment posted and

The taxpayer replies that Form 1040X reporting the income in question was filed, review the Tax Account screen.

If the taxpayer's response indicates a NEW Schedule A (the taxpayer used the Standard Deduction during original filing) or a revision to an existing Schedule A (e.g. a notice was issued for unreported gambling income and the taxpayer responds with additional gambling losses on Schedule A, line 27), select the Schedule A window.

If the Form 1040X is not acceptable, issue the appropriate notice/letter to obtain an agreement for the tax increase and penalties. Include an explanation of why the Form 1040X is unacceptable, send PARAGRAPH 171 ( See Exhibit 4.19.3-12) or a paragraph with similar wording to address penalties not included on the amended return.

Verify Form 1040X. See (3) above.

If the U/R issue is resolved, but the taxpayer states that another amount was NOT CLAIMED, UNDER-CLAIMED, OR OVER-STATED on the original return AND:

If the U/R issue is not resolved, and Form 1040X shows a claim for a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , ensure the necessary actions are taken to accurately respond to the taxpayer's claim.

See IRM 4.19.3.20.1.7 for procedures regarding Adjustment cases.

A taxpayer who files a joint return with a spouse is generally jointly and separately liable for all tax due in that tax year. If a taxpayer believes he/she should not be required to pay the tax (including penalties and/or interest) for a tax year in which he/she filed a joint return, the taxpayer may be eligible for Innocent Spouse Relief.

The taxpayer must file Form 8857, Request for Innocent Spouse Relief or a similar written statement signed under penalties of perjury in order to be considered for relief.

If the taxpayer AGREES (contains signature and no disputing comments) to the proposed AUR adjustment and STATES he/she cannot pay, will pay later, or submits a specific request for an installment agreement (I/A) or a payment plan, close the case agreed and:

If the case is closed No Change and;

review the Tax Account screen for the TC 971 AC 043 (pending Installment Agreement). The TC 971 AC 043 should be reversed with TC 972 AC 043 using the same posted date as the TC 971.

Information supplied by an unauthorized third party may be used. However, SEND NO TAX INFORMATION TO, OR DISCUSS TAX INFORMATION WITH AN UNAUTHORIZED PERSON. Any further correspondence required must be sent directly to the taxpayer.

The Third Party Designee (Check Box) authority on Form 1040/1040A/1040EZ does not apply to Compliance issues, including AUR. Therefore do not send copies of AUR correspondence to a Third Party Designee and do not disclose specific case or tax return information based on a Third Party Designee check box.

A completed authorization statement on the CP 2000/2501 allows the IRS to address the CP 2000/2501 information with the Authorized party. When communicating with an Authorized Party:

In order to respond to the Service on behalf of a taxpayer, a person must be an attorney, certified public accountant (CPA), enrolled agent, or enrolled actuary and must be authorized by Form 2848 , Power of Attorney and Declaration of Representative. A Form 2848 also authorizes the representative to receive confidential tax return information from the Service. A taxpayer may authorize the Service to discuss and provide specific confidential tax return information to any individual, corporation, firm, trust, partnership, or organization designated on Form 8821, Tax Information Authorization, but this form does not authorize the person to respond to the Service on behalf of the taxpayer if the response constitutes practice before the Service. A document/letter request may be used in lieu of Form 2848 or 8821, provided it contains all of the information described in paragraph (5) below.

The Form 2848, Form 8821, or a document/letter in lieu of these two forms, a facsimile (FAX), or photocopy of these forms should contain relevant information requested of a signatory by a Form 2848 or Form 8821, including:

If the POA/TIA is attached to the return, and the POA contains all of the above items, route the authorization to the appropriate CAF Function for further processing and leave a Case Note.

If the POA/TIA is received without a return or document, and contains all of the items shown in (5) above, route it to the appropriate CAF Function and leave a Case Note.

If a letter request is used in lieu of Form 2848 or Form 8821 and contains all of the items shown in (5) above, photocopy the request and route it to the CAF Function for processing and leave a Case Note.

POAs/TIAs filed for specific issues are not to be detached from the related document and sent to the CAF Function, unless the document authorizes recognition for a return in addition to the specific issue. In this case, send a copy of the POA/TIA to the CAF Function to input the return portion on the CAF system. Examples of specific issues include, but are not limited to, the following:

When a valid POA/TIA (addressing the AUR notice) is received, input the information on the Update Address window, selecting Address Type P1 or P2 for First or Second POA. See IRM 4.19.7, Update Address window - POA. When the valid POA/TIA is received specifically for the AUR notice, the POA/TIA should remain with the case file.

When a valid POA is processed, the system generates a copy of all notices to both the taxpayer and the designated representative, unless otherwise indicated. The POA address(es) automatically displays when sending a letter, but the tax examiner must select the address.

If the taxpayer writes in and requests that a current POA be revoked and that no further information should be sent to this POA, handle the revoked POA request by the following instructions:

If the POA requests to withdraw, follow the procedures in (12) above.

If the taxpayer identifies that the U/R gains from STOCK, CG, REAL or Schedule D NEC income can be reduced by current unused Schedule D losses and states any of the following:

Take the following steps to ensure the system uses losses in excess of $3,000 ($1,500 if MFS) to offset against U/R Schedule D income:

If the taxpayer identifies that the U/R gains from STOCK, CG, REAL or Schedule D NEC income can be reduced by current unused Schedule D losses and there is no indication that the subsequent year carryover loss issue has been addressed, take the following action:

The taxpayer may claim additional Schedule D losses if he/she reported either a gain or a capital loss of less than $3,000($1,500 if MFS).

If the CP 2000 was issued because the taxpayer reported ordinary dividends or bartering on Schedule D, reduced by cost or other basis, and the taxpayer states that the income is other than ordinary dividends:

If you determine that the U/R NEC should be reported on Schedule D:

If the TP response indicates U/R STOCK amount(s) are other than a short term capital gain/loss:

A second CP 2000/2501 may be generated for the spouse whenever the secondary spouse address changed from the year of liability to the year of the latest filed return.

The second notice is an exact duplicate of all the information contained in the original notice mailed to the primary taxpayer with the exception that the second notice contains the current address of the secondary taxpayer.

The AUR system makes a request to the National Account Profile (NAP) to research and provide address information for the secondary SSN.

If there is a match, the address updates on the system and a notice generates to the primary and secondary SSN.

The AUR barcode on the notice contains an indicator to identify the type (primary, spouse, POA) of notice generated. The barcode format follows:

If the taxpayer indicates the U/R income was the result of identity theft or their SSN being used illegally ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ;

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ issue a 2626C Letter (or a recomputed notice as appropriate with PARAGRAPH 167 ( See Exhibit 4.19.3-12.)) to request documentation of the theft. Include the following Special Paragraph in the 2626C Letter: "To verify misuse of your Social Security Number, please provide the following items: a copy of a valid U.S. federal or state government-issued form of identification AND either a copy of a police report or an Affidavit of Identity Theft filed with the Federal Trade Commission."

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When updating IDRS with TC 971 AC 501 enter the following in the miscellaneous input fields:

TC 972 is needed to reverse the TC 971 if:

The TC 972 reversal also has a miscellaneous input field. The first two fields are the same as the TC 971 miscellaneous input field (see (4) above). The Tax Administration Source is replaced with the following Reason Codes:

If the taxpayer responds to the 2626C Letter timely and disagrees with the amount of income in question, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

If the taxpayer does not respond to the 2626C Letter, issue a Statutory Notice at the end of the CP 2000 suspense period or resuspend the case for the remaining time in the Statutory Notice suspense period.

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Beginning in May 2008 and extending through 12/31/2008, the IRS sent qualified taxpayers an Economic Stimulus Payment. These payments are based on Filing Status, Tax, and Number of Qualifying Dependents. The impact to Compliance and the AUR program have not yet been determined. Once the determination has been made additional instructions will be provided.

EMPLOYEE IDENTIFICATION: When speaking with a taxpayer, ALWAYS identify yourself by title and last name or first and last name and employee ID (badge) number. Be courteous, polite and professional.

Important steps to provide quality taxpayer telephone assistance include the following:

When responding to telephone inquiries, disclose no tax return information until you are reasonably certain the person making the inquiry is the taxpayer or his/her authorized representative. Most calls to the AUR toll-free number are in response to AUR Notices and are not considered high risk. See below for the information needed for normal disclosure checks:

The following is required for authentication before discussing the taxpayer’s account:

If a person states he/she is the designated representative request the taxpayer's name and TIN to check the Tax Account screen, Case Note window, Taxpayer Information screen, and/or Update Address window to determine if a POA or authorized party was filed for that person to represent the taxpayer.

ORAL DISCLOSURE CONSENT— Treasury Reg. 301.6103(c) - 1(c) authorizes the IRS to accept verbal consents authorizing the disclosure of return information to third parties assisting taxpayers in resolving Federal tax matters.

If the taxpayer's call is a general inquiry or he/she requests information about:

If the taxpayer has questions relating to his/her case , access the Taxpayer Information Window.

When the information you requested is available, return the taxpayer's call within the specified time frame. Advise the taxpayer when a delay is experienced in obtaining the requested information.

When returning the taxpayer's/representative's call and it is necessary to leave a message on an answering machine or voice mail:

If the taxpayer agrees with the proposed changes, instruct the taxpayer to sign, date, and return the consent to tax increase, or, refer the taxpayer to the consent page of the notice which provides complete information.

If the taxpayer agrees but states he cannot pay or requests a payment plan, instruct the taxpayer to sign and date the notice in the space provided and complete the Form 9465 included with the AUR notice.

If the taxpayer states he/she is making a payment other than by credit card, provide check annotation information if needed. The AUR phone script provides check annotation information if the taxpayer selects the "Agree" path or chooses to speak with a tax examiner. You are not required to address this subject unless the taxpayer asks a specific question. To respond to the taxpayer's specific question, refer him/her to the consent page of the notice or advise him/her to make the check or money order payable to the "United States Treasury" and include the SSN and tax year from the Notice.

If the taxpayer inquires about paying with their credit card,

If the taxpayer requests the balance due amount, provide the CP 2000 amount and advise that penalty and interest continue to accrue. If the taxpayer requests a specific payoff amount computed to certain date, use CC:INTST if the AUR assessment has posted or CC:COMPA on open AUR cases.

If the taxpayer states the balance due has already been paid AND the payment is displayed on the Tax Account screen, close the case, using "Agreed Response" criteria. See IRM 4.19.3.20.5 for more information.

If the taxpayer states they have paid the balance due in full and now received a bill for additional interest, research IDRS using CC:TXMOD to determine if a TC 276 has posted after the AUR adjustment. If a TC 276 has posted inform the taxpayer that per the paragraph (PARAGRAPH 43) on their notice an additional penalty (FTP) was assessed on their account. Payments received are applied in the following order:

If the taxpayer states a payment was sent and the payment is NOT shown on the Tax Accounts Screen, determine if at least three weeks have passed since the taxpayer made the payment. If yes, research IDRS CC:TXMODA, IMFOLI, IMFOLP, or IMFOLT (for the pending or unpostable payment) before requesting the taxpayer send a copy of the front and back of the cancelled check. If a joint return, also check the secondary SSN. If the payment is found posted on another tax module (i.e., subsequent year) ensure that the payment is transferred to the correct tax module.

If during the telephone call, it is determined the taxpayer is due a refund or expects a refund, inform the taxpayer the refund will be issued if they owe no other taxes or federal obligations. Some examples, other than Federal tax liability, are child support and Federal non-tax liability, such as student loans, etc. If the taxpayer needs additional information regarding a potential refund offset, refer them to the Customer Service toll-free number, 1-800-829-1040.

Accept from the taxpayer or a third party oral statements which result in revising or closing a case as No Change (no increase in tax). If the taxpayer agrees to the proposed assessment during the phone conversation, they may fax the signed agreement if the additional tax is $25,000 or less; follow procedures in See IRM 4.19.3.20.5. , Agreed Responses.

If during a phone call, AUR or IDRS research shows the taxpayer's account balance due status is the result of an AUR assessment and the taxpayer provides documentation to resolve/change the assessment or agrees to send in documentation, ensure input of IDRS CC:STAUP or TC 470, if appropriate, to prevent issuance of additional notices while the case is being worked.

It is no longer necessary to transfer a call to another campus. Whenever you can assist the taxpayer without requiring a paper document, Universal Work should be utilized.

If the case requires a paper document or a fax, do not use the action required option or the Universal Work option to assist the taxpayer.

If the taxpayer provides acceptable information for a recomputed notice to be generated, issue the notice. It is not necessary to wait for the new figures to be provided by the taxpayer in writing since the recomputed notice will be provided to the taxpayer for signature. If the case is in the Statutory Notice phase, this procedure can be done ONLY for a decrease in the amount of tax shown on the Statutory Notice.

If the TP requests an extension to respond to a CP 2501 :

If the TP requests an extension to respond to a CP 2000 Notice and it is not necessary to respond to the TP with a letter:

If the taxpayer has information that would allow you to close the case no change; ex. Oral Statement:

If the taxpayer has information that would allow you to make a change on a closed case(i.e.: a reconsideration) from BT 96:

If the taxpayer replies the U/R income is a STIPEND (scholarship/fellowship) and is excludable from income, follow procedures in IRM 4.19.3.7.1.4.

If the taxpayer responds that the income identified as underreported is strike benefits that did not exceed the amount of his/her contributions to a strike benefit fund, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Income of this type is taxable ONLY when it exceeds the amount contributed.

If the taxpayer responds that unreported wages are nontaxable sick pay, and states:

If the taxpayer's response includes an SSA determination letter on the wage IR(s) in question, consider the issue resolved. As SSA has already made a determination, do not prepare a Form 9409, IRS/SSA Wage Worksheet.

Form 1099-INT IRs with ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is credit interest paid by the IRS to the taxpayer(s) from a previously filed tax return(s). If the taxpayer requests information or disclaims knowledge of this IR, DO NOT issue a 2625C Letter. Use IDRS CC:IMFOLI or MFTRAC to request a complete Master File transcript. Interest appears as TC 770 or 776. A reversal appears as TC 771, 772 or 777.

If the taxpayer replies that the Saving Bond Interest was inherited and/or was reported on the estate return, issue a 2626C Letter with the following special paragraph: "Saving bond interest is taxable to the beneficiary, unless the entire amount of interest was reported on the decedent’s final individual (Form 1040) tax return. Please verify the decedent’s tax treatment and submit a signed statement of explanation."

Accept the taxpayer's explanation and delete the IR when:

The taxpayer may respond that they are entitled to additional qualifying dividends (QDIV). Create an IR with the Income Type literal of QDIV for the amount of ORDIV that is eligible for the 5% or 15% capital gain rate. Input Status Code "U" for the created QDIV IR(s). This allows the system to use the revised qualified dividends in calculating the Schedule D tax rate.

Accept the taxpayer's explanation and delete the IR when:

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Accept the TP explanation when:

Accept the TP explanation that ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

If the income is NEC or FISH accept the response when it states the taxpayer is a fisherman and one of the following:

If the taxpayer responds with a completed Form 4972 and the U/R income in question is from a Form 1099-R, Lump-Sum Distribution IR, verify Form 4972, Part 1 to determine if the taxpayer qualifies. If so, consider the taxpayer entitled to the special tax treatment and input the appropriate entries on the Lump Sum Tax window. See IRM 4.19.3.7.9.8 and IRM 4.19.7, Lump Sum Tax window, for further instructions. Include ALL qualifying income in the ORDINARY INCOME field. This includes any unreported income which also qualifies for the special tax treatment.

If the taxpayer responds with a completed Form 4972and the U/R income in question is from a Form 1099–R IRA distribution IR(s), issue a 2626C Letter advising the TP that IRA distributions do not qualify for Form 4972 treatment.

When adjusting U/R Form 1099-R distributions, review the Retirement Savings Credit Window to ensure the entries in the TOTAL DISTRIBUTIONS field have been correctly updated.

The explanation is acceptable when the taxpayer states: