Accessibility Skip to Top Navigation Skip to Main Content Home  |  Change Text Size  |  Contact IRS  |  About IRS  |  Site Map  |  Español  |  Help  

Part 4. Examining Process

Chapter 24. Excise Tax

Section 6. Excise Tax Examiner Responsibilities

4.24.6  Excise Tax Examiner Responsibilities

4.24.6.1  (08-13-2008)
Overview

  1. This section provides general excise tax examination guidance as well as examination procedures specific to collected taxes.

  2. The procedures found in IRM 4.10 Examination of Returns applies to Excise Tax Examiners and their Managers.

4.24.6.2  (08-13-2008)
Electronic Case Management System

  1. The Excise Tax Examiner is required to utilize management specified report generating software system and utilize the appropriate lead sheets and templates for all Excise tax case examinations, Form 637 compliance reviews, and Form 637 initial applications. Excise Tax Agent Center (ExTAC) is the current version of this type of system used by Excise.

  2. ExTAC allows the Excise Tax Examiner to:

    1. perform their duties from an ordered checklist of examination steps,

    2. complete and store examination results of various taxpayers,

    3. compute, format, and print appropriate administrative report and assessment documents for presentation to a taxpayer,

    4. communicate taxpayer case information to a central computer and query taxpayer entity data,

    5. use the equipment in a disconnected mode in various locations, and

    6. allows the Excise Tax Examiner to scan in documents received while in the field.

  3. The benefits realized from the use of ExTAC are:

    1. accurate and consistent tax calculation,

    2. computation of adjustments which flow to the report,

    3. consistent formatting, identifying, and arranging of work papers,

    4. passive flow of data to forms, and

    5. allows group managers to review live cases on line.

4.24.6.2.1  (08-13-2008)
Excise Tax Examination Lead Sheets and Templates

  1. The Excise Tax Program has mandated the use of Examination Lead Sheets and Templates in order to improve the quality and consistency of its examinations across the country. The Lead Sheets and Templates outline mandatory and discretionary processes to be used in all Excise examinations, Form 637 reviews, and penalty review cases. Examiners will use the standardized templates for every examination issue to gather the information necessary to resolve issues. The lead sheets include use of mandatory and discretionary administrative and issue related templates.

  2. The use of these lead sheets will clearly communicate expectations of both the taxpayer and Excise Tax Examiner through mandatory discussions between the Excise Tax Examiner and taxpayer regarding the specific examination issues, required documentation, and a mutually agreed upon date to complete the examination.

  3. After the initial meeting with the taxpayer, the Excise Tax Examiner and their Manager will meet to discuss the examiners' approach to the examination, the plan to close the examination, and the mutual commitment date arrived at with the taxpayer. Group Management Concurrence Meetings are required for all Excise Tax Examiners.

  4. Examiners will use standardized templates for every examination issue to gather the information necessary to resolve issues. These lead sheets and templates may be found at http://sbse.web.irs.gov/EX/Org/RA/Reengineering/Reengineering.htm.

  5. For more information regarding the use of Lead Sheets and Templates see http://sbse.web.irs.gov/learning/Specialty/excise.htm.

4.24.6.2.2  (08-13-2008)
A-110 Excise Tax Plan to Close Check Sheet

  1. The Excise Tax Examiner will use this excise mandatory administrative form as a guide for the exam planning phase.

  2. The A-110:

    • Keeps the Excise Tax Examiner focused on a plan to close.

    • Keeps the Excise Tax Examiner organized.

    • Lets the Excise Tax Examiner know what the next steps are.

    • Lists all the steps that need to be completed.

    • Makes sure the Excise Tax Examiner has completed the steps in each section before proceeding to the next one.

    • Ensures that the Excise Tax Examiner is prepared to go to the next step.

  3. The A-110 consists of the following steps:

    • Review the case built file.

    • Develop the audit plan.

    • Establish initial taxpayer contact.

    • Import, prepare, and mail taxpayer appointment letter and initial IDR.

    • Conduct the initial appointment.

    • Obtain GM audit plan concurrence.

4.24.6.3  (08-13-2008)
Case File Documentation

  1. It is mandatory that all employees document all actions taken in the case file.

    1. Documentation must be recorded on Form 9984 , Examining Officer’s Activity Record. The ExTAC generated Form 9984 should be used.

    2. Documentation must include the date, the location of the activity, the contact code, and remarks/notes/actions taken.

    3. Time charged for each activity must also be recorded on Form 9984.

    4. Group managers, examiners, audit accounting aides, specialists, clerical employees, reviewers, and any other employee involved in the examination process, for a specific case, must also document their activities on Form 9984.

    5. Form 9984 must be documented to show when notices or other written communication are provided to both the taxpayer and the authorized representative. See IRM 4.10.9.3.1, Activity Records.

    6. Form 9984 must also be used to document activity on cases worked by Examination after assessment, such as audit reconsiderations and collection referrals.

    7. It is critical that periods of inactivity, such as extended leave, training and details also be documented on Form 9984. For example, proper documentation of an audit span is needed when determining if interest abatement is applicable.

  2. Form 4318-E, Excise Work Papers Index, is to be used as a cover sheet and index to the Excise Tax Examiner's work papers.

4.24.6.4  (08-13-2008)
Third Party Contacts

  1. When a third party contact is warranted, the Excise Tax Examiner must provide notification to the taxpayer as required per IRC 7602(c).

  2. A third party contact is defined as a contact that is;

    1. initiated by an IRS employee,

    2. with a person other than the taxpayer;

    3. with respect to the determination or collection of that particular taxpayer’s Federal tax liability;

    4. where the taxpayer’s identity is disclosed or revealed to the third party; and

    5. where the IRS employee discloses his/her association with IRS.

  3. To be a third party contact all five elements above must be met.

  4. Certain contacts are not considered third party contacts under IRC 7602(c) and therefore do not require prior notice or reporting on Form 12175 Third Party Contact Report Form. The following are not considered third party contacts:

    1. Contacts with other IRS employees who are acting within the scope of their official duties.

    2. Contacts relating to a matter and issue being litigated.

    3. Obtaining information from a computer database provided the IRS employee conducts the research.

    4. Contacts with employees of the taxpayer who are acting within the scope of their employment during normal business hours on business premises. It is best to allow the taxpayer to identify employees authorized to speak on behalf of the taxpayer. The remaining employees are treated as third party contacts.

    5. Contacts made with any government officials, except where the contact concerns the taxpayer’s business with the government office, such as the taxpayer’s contracts with the government office.

    6. Contacts made as part of an information-gathering project where specific taxpayers have not yet been identified or singled-out for further investigation.

    7. Contacts made with a third party when the third party initiated the contact.

  5. Publication 1, Your Rights as a Taxpayer, informs taxpayers of their rights, and includes information on the examination process and the collection process. It is to be provided to the taxpayer at the time of initial contact and in advance of any third party contact being made. Publication 1 will serve to satisfy the advance general notice requirement for all tax periods included in the examination for the same taxpayer.

  6. The Excise Tax Examiner must document the Form 9984 with that date and the fact of mailing or personal delivery of the Publication 1 to the taxpayer. It is extremely important to document the fact that Publication 1 has been provided to the taxpayer in advance of any third-party contact so that the provisions of IRC 7602(c)(1) and other IRC provisions have been observed.

  7. If a Third Party Notification has been given by another Function within the IRS, as is evidenced by a TC 971 AC 610, 611, 612, or, 613 on BMFOLT, no further notification is required. However, the presence of the TC code and the AC code should be documented on Form 9984.

  8. See IRM 4.11.57, Third Party Contacts.

4.24.6.5  (08-13-2008)
Other Applicable IRM Chapters

  1. Other Examination IRM chapters and multi-functional chapters also contain information relevant to conducting examinations.

  2. The following is a list of primary IRM chapters Excise Tax Examiners should be made aware.

    1. IRM 4.3 Midwest Automated Compliance System (MACS)

    2. IRM 4.4 AIMS Processing

    3. IRM 4.10 Examination of Returns

    4. IRM 4.11 Examining Officers Guide (EOG)

    5. IRM 4.12 Nonfiled Returns

    6. IRM 4.13 Audit Reconsiderations

    7. IRM 4.15 Jeopardy/Termination Assessments

    8. IRM 4.20 Examination Collectibility

    9. IRM 4.23 Employment Tax

    10. IRM 4.26 Bank Secrecy Act

    11. IRM 4.27 Bankruptcy

    12. IRM 4.28 Examination Specialization

    13. IRM 20.1.10 Excise Tax Penalty Handbook

    14. IRM 20.2 Interest

    15. IRM 21.7.8 Excise Taxes

    16. IRM 21.11 Processing Powers of Attorney

    17. IRM 25.1 Fraud Handbook

    18. IRM 25.2 Information and Informant’s Reward

    19. IRM 25.6 Statute of Limitations

    20. IRM 25.15 Relief From Joint Several Liability

    21. IRM 25.5 Summons

4.24.6.6  (08-13-2008)
Statute of Limitations (SOL)

  1. The Internal Revenue Code limits the time in which the government may make an assessment of tax. Excise Tax Examiners have the primary responsibility for identifying and protecting the statutes of limitations for returns in their custody. IRM 25.6.23, Examination Process - Assessment Statute of Limitations Controls, provides guidance for verifying statute dates. Failure to protect the statute of limitations can result in disciplinary action.

  2. If the statute of limitations is imminent, or if it has already expired on the assigned return, the return should be immediately brought to the Group Manager to determine the return’s disposal.

  3. A statute of limitations to assess tax can be extended with the taxpayer’s consent. Excise Tax Examiners must obtain the approval of the Group Manager before requesting a taxpayer to execute a consent. The need for a consent should be clearly identified before it is solicited and the Group Manager’s approval documented in the case file. See IRM 25.6.22.2.1 (2), Assessment, for a listing of some of the conditions that allow for a statute extension.

    Note:

    An Excise Tax Examiner can not initiate an examination on any return with less than 12 months remaining on the statute of limitations for assessment, without prior managerial approval.

  4. See IRM Exhibit 4.24.6-1.

4.24.6.7  (08-13-2008)
Excise Examinations with International Issues

  1. Excise Tax Examiners will be responsible for conducting excise tax examinations of International taxpayers, especially in the area of air transportation, foreign insurance, Ozone Depleting Chemicals (ODC), and fuel. Taxpayers who import ODCs frequently have foreign parents and transfer pricing and other issues frequently emerge.

4.24.6.8  (08-13-2008)
Fraud Awareness-Non-Filer Cases

  1. Excise Tax Examiners should familiarize themselves with IRM sections 25.1.1 thru 25.1.6 when developing a fraud case. IRM 25.1.7 discusses the various procedures concerning fraud in failure to file cases. Excise Tax Examiners are also encouraged to visit the Fraud/BSA web site at http://sbse.web.irs.gov/FR/Fraud/default.htm.

  2. As with all fraud cases, Excise Tax Examiners should first consult with their Group Manager when indications of fraud are discovered. If the Group Manager concurs, the Fraud Technical Advisor (FTA) will immediately be contacted and both the Group Manager and FTA will provide guidance to the Excise Tax Examiner on how to proceed. Managers will encourage early involvement of the FTA in all potential fraud cases.

4.24.6.9  (08-13-2008)
Examination of Federal Agencies

  1. Agencies of the United States government in general are not exempt from excise taxes.

  2. Special procedures should be followed in cases involving federal agencies. At the beginning of an examination of a federal agency, the Excise Tax Examiner should notify the appropriate Federal, State and Local Governments office (FSLG) which has primary responsibility for examination of tax returns filed by Federal agencies.

  3. FSLG is responsible for ensuring federal tax compliance by federal, quasi-governmental and state agencies; city, county and other units of local government; and American Samoa, Guam, Puerto Rico and the U.S. Virgin Islands. The office coordinates activities with other IRS offices such as Customer Account Services, Counsel, Government Liaison & Disclosure, Employee Plans and Excise Tax.

  4. See IRM 4.90 Federal, State, and Local Governments (FSLG) for additional guidance and information.

4.24.6.10  (08-13-2008)
Specialist Referral System (Online Referrals)

  1. The Specialist Referral System (SRS) is an online automated system that allows for allsubmissions and approvals for specialist assistance. It automates the mandatory referral request process for LMSB, SBSE, W & I and TEGE field specialists. It is accessed from the Intranet at http://srs.web.irs.gov/Default.asp.

  2. See IRM 4.10.2.6.5.2.1 and IRM 4.24.5.3 for additional guidance.

4.24.6.11  (08-13-2008)
Field Examination Initial Contact

  1. Field examination cases should be scheduled using telephone contact. This will allow the Excise Tax Examiner to schedule the initial appointment at an appropriate time, which is agreeable to the taxpayer/POA and reduce the number of rescheduled appointments.

  2. The Excise Tax Examiner must explain to the taxpayer what records should be available for the examination during the initial contact. If the taxpayer volunteers information during this initial contact concerning audit issues, the Excise Tax Examiner should document the discussion.

  3. The Excise Tax Examiner should check IDRS command code CFINK to determine if a POA exists for the taxpayer and for which periods. This should be noted on the Form 9984 Examining Officers Activity Record.

  4. When the initial appointment is made by telephone, a follow-up Letter 3253, Taxpayer Appointment Confirmation Letter,and/or Letter 3254 Representative Appointment Confirmation Letter, will be mailed to the taxpayer/POA confirming the time/place of the examination and the records which are to be available.

  5. Excise Tax Examiners must complete the Mandatory Administrative Form A-120, The Initial Appointment Check Sheet. The A-120 provides guidance in conducting the initial contact with the taxpayer.

  6. When the Excise Tax Examiner is unable to make initial contact by telephone due to factors outside of his control, the Excise Tax Examiner should use Letter 2205-A, Initial Contact Letter, to request the taxpayer call and schedule an appointment.

  7. If the taxpayer fails to respond to Letter 2205-A , the Excise Tax Examiner must determine why the taxpayer is not responding and should reissue the appointment letter as registered return receipt requested.

4.24.6.11.1  (08-13-2008)
Collectibility

  1. To lessen the size of Unpaid Assessments and increase the quality of assessments, Excise Tax Examiners should consider collectibility when setting the scope of an examination. Collectibility will be based on today’s financial condition and not the tax return (which reflects the taxpayer’s past financial condition.

  2. Form 5546 Examination Return Charge-Out may provide alerts to potential collectibility issues. Excise Tax Examiners should review this form for collectibility indicators. Form 5546 contains the statement "Excise Tax Examiner Alert" in the remarks section when the following collectibility indicators are present:

    • B - Bankruptcy,

    • N - Currently Not Collectible,

    • C - Open Collection status,

    • O - Offer in Compromise.

    See IRM 4.20.2.2, General Collectibility Considerations, for a listing and definition of collectibility indicators and steps to take when evaluating collectibility potential during the pre-planning phase.

  3. When no Form 5546 is enclosed in the examiners file, the Excise Tax Examiner should request an AMDISA print.

  4. On AMDISA Line 22 of Page 1, the following indicators appear:

    • BANKRUPTCY – Taxpayer is currently in bankruptcy or bankruptcy discharge in a prior period,

    • CURNOTCOLL - Prior period was closed as Currently Not Collectible,

    • COLLSTCD26 - Open Collection status (i.e. assigned to Revenue Officer, Automated Collection, or is in Collection queue),

    • OIC Offer -In-Compromise Pending.

  5. If collectibility indicators are present or there are reasons to believe that the taxpayer has liabilities outstanding for other tax periods, a SUMRY, IMFOLI or BMFOLI should be obtained. This will provide a list of any previous tax periods with account balances. A TXMOD can then be obtained on those years to determine account activity. If Transaction Code 480 is present on any of the modules, an Offer in Compromise is under consideration. The group and employee number of the Revenue Officer charged with the account will also be reflected on the TXMOD.

  6. Not all taxpayers lacking the means to satisfy additional tax liabilities will be identified. Excise Tax Examiners should be alert for indications in the file that collectibility may be a factor to consider; i.e., the taxpayer is deceased or the taxpayer is a defunct corporation and the issue of transferee liability is not present. Form 9439, Collectibility Evaluation Form, may be used to help document collectibility. See http://core.publish.no.irs.gov/forms/internal/pdf/14579j99.pdf

  7. If collectibility is an issue in an assigned case, the Group Manager should be alerted as soon as the issue is discovered. Managers will make the final determination whether to survey the return or to limit the scope/depth of an examination. A tax return may be surveyed due to an absolutely uncollectible assessment or subjected to a limited scope examination where there is lack of collectibility. It should be emphasized, however, that returns should not be surveyed based solely on collectibility when a limited examination has the potential for developing leads to other non-compliant taxpayers.

  8. Excise Tax Examiners are required to document their evaluation of collectibility during the preplanning phase of the examination using Mandatory Administrative Form A-105, Administrative Check Sheet.

4.24.6.11.2  (08-13-2008)
Initial Interview

  1. The initial interview with the taxpayer is an opportunity to obtain a general knowledge of the taxpayer's operations, related entities, and company history.

  2. Each interview should be tailored to the taxpayer' situation and questions that are specific to the abstract(s) that are being examined and should be incorporated into Mandatory Administrative Form A-125, Initial Interview Questions and Notes.

4.24.6.11.3  (08-13-2008)
Review of Documents

  1. During the examination, the Excise Tax Examiner should review the taxpayer's sales literature: catalogs, brochures, price lists, and web sites and consider:

    1. Currency and Banking Retrieval System (CBRS) for leads relating to imported trucks, tires, electronic components and foam products potentially containing Ozone Depleting Chemicals (ODC). See IRM 4.24.3.11.2.

    2. Fed State agreement for leads.

    3. Foreign Insurance issues.

4.24.6.11.4  (08-13-2008)
Facility Tour

  1. At the start of an examination the Excise Tax Examiner should tour the facilities to get a better understanding of the taxpayer's operations and business flow. The Excise Tax Examiner needs to document all findings and conclusions in the work papers.

4.24.6.11.5  (08-13-2008)
Diagram the Business Activity

  1. It is important to obtain sufficient competent evidence to determine the accuracy of the taxpayer’s return. Every Excise Tax Examiner must determine the appropriate amount of evidence to accumulate and establish the proper depth of the examination. This decision is a matter of judgment and important because of the prohibitive cost of examining and evaluating all available evidence. Factors to consider when establishing the depth of the examination include:

    1. The risk that the taxpayer has made errors that are individually or collectively material.

    2. The risk that the audit tests will fail to uncover material errors e.g. the examination techniques used, the nature of the errors (intentional or unintentional) and the reliability of available evidence.

  2. Internal controls must be analyzed and documented to show the effectiveness and efficiency of the business operations and the strengths, weakness and reliability of the applicant's financial reporting.

  3. Use the Mandatory Administrative Form C-305, Internal Controls Check Sheet to document findings.

  4. The Excise Tax Examiner should either flowchart a step by step process of key business operations or document, in narrative form, sufficient detail which provides information comparable to that shown by flowcharting the process.

4.24.6.11.6  (08-13-2008)
Reconcile Taxpayer's Books to the Excise and Income Tax Returns

  1. In the course of examining Form 720 Excise Tax Returns it is often necessary for the Excise Tax Examiner to verify the taxpayer’s total sales of relevant products for a tax period.

  2. The Excise Tax Examiner will often review the total sales for a year shown on a taxpayer’s income tax return, look at any relevant adjustments to this total, and inquire into the purpose of an adjustment. This information helps establish the accuracy of all Forms 720 filed during the taxable year.

    Note:

    The inspection of the year-end books and records to determine year-end adjustments and total sales for the year for excise purposes and tying the year end books and records to the reported sales on the income tax return, are categorized as part of an excise tax examination. There is no legal requirement to treat a thorough review of the annual sales receipts as well as any documents related to adjustments as reported on the annual return as a separate income tax examination. When the period under examination is the third quarter, the review of the year-end books and records for sales and adjusting entries does not constitute an examination of the fourth quarter Form 720 return.

  3. The Excise Tax Examiner will reconcile all sales/revenues that are shown on the excise tax return with those on the income tax return. The agent will document the justification for any differences between the two amounts.

  4. The Excise Tax Examiner will document any adjustments made by the taxpayer to the amounts shown for sales/revenue on the books of the taxpayer.

  5. The Excise Tax Examiner will use the Mandatory Administrative Form C-300, Books to Returns Reconciliation Check Sheet to document this action.

4.24.6.11.7  (08-13-2008)
Required Filing Checks

  1. Required Filing Checks include the analysis of prior, subsequent and related returns and when warranted, the expansion of the examination to include additional returns. The analysis and pick up of prior, subsequent and related returns, when warranted, is an Examiner’s primary responsibility in every examination. Use Mandatory Administrative Form B-200-1 Multi-Period and Related Returns Check Sheet and Mandatory Administrative Form B-200-2 FET Check Sheet to document this action.

  2. Internal sources of information (IDRS, CFOL) should be researched to limit taxpayer burden. CFOL provides on-line access (research only) to tax account, tax return, and other related information. In some cases, CFOL research may fully satisfy information requirements needed to make the required determination. However, if CFOL information is incomplete, copies of the tax returns may be requested from the taxpayer. Use Mandatory Administrative Form A-110, Excise Tax Plan to Close to document this action.

  3. Documentation of why a prior or subsequent return is not being picked up is necessary when an adjustment is being proposed in the current year. Use Form B-200-1 to document this action.

  4. Once an Excise Tax Examiner has identified a related return, analyzed the return and made the determination to either expand the examination to that return, or the return does not warrant examination, it is required that the Excise Tax Examiner document that the analysis was performed.

  5. A Form 5346, Examination Information Report, should be prepared and forwarded to the appropriate examination function where warranted.

  6. Limited scope examinations do not eliminate the need to perform Required Filing Checks.

4.24.6.12  (08-13-2008)
Value Added Decision Making during the Examination

  1. At the mid point of the examination, using risk analysis, the Excise Tax Examiner should determine whether the remaining classified/identified issues should be examined. This decision should be based on the facts and circumstances, evaluation of internal controls (in business examinations) and the Excise Tax Examiner’s judgment. For example, the resulting additional tax is not expected to be material, or the time to develop additional issues is not justified based on the potential for more tax.

  2. Examiners are expected to use their professional judgment to determine if it is in the government’s best interest to continue the examination. If it is not in government’s best interest to continue the examination, the Excise Tax Examiner should document their decision on the Risk Analysis Work Paper.

4.24.6.12.1  (08-13-2008)
Conditions Allowing Survey of Returns After Assignment

  1. A return will be surveyed after assignment if, after conducting the in-depth analysis and evaluating the audit potential and the following conditions are met:

    1. the taxpayer (or representative) has not been contacted,

    2. taxpayer records have not been inspected, and

    3. the Excise Tax Examiner determined an examination will most likely not result in a material change in the taxpayer's tax liability.

    Note:

    This authority extends to returns identified for examination on Form 3449, Referral Report.

  2. When a return is closed survey after assignment, Disposal Code 32 will be entered on the Form 3198. Do not enter Disposal Codes on Form 5344.

  3. See Document 6036 for a list of valid Disposal Codes.

  4. See IRM 4.10.2.5for more detailed procedural guidance.

4.24.6.12.2  (08-13-2008)
Paperless Survey - Non-Examined Closures Utilizing a Paperless Process

  1. Certain non-examined cases can be closed in a virtually paperless fashion if the original return was never requested. Only a Form 5351, Examination Non Examined Closings, and a Form 3210, Document Transmittal, is needed for a paperless survey. Generally, this process is used when the return was established on AIMS using an electronic print and the original return was never requested.

  2. See IRM 4.10.2.5.8 for more detailed procedural guidance.

4.24.6.13  (08-13-2008)
Excise Lead Feedback Form

  1. The Excise Tax Examiner needs to complete the Excise Lead Feedback Form at the conclusion of every examination and return it via e-mail or FAX to PSPWIC. A copy of this form may be found at http://sbse.web.irs.gov/EX/Library/default.htm .

4.24.6.14  (08-13-2008)
Examination Procedures Specific to Collected Taxes.

  1. The sections below discuss examination guidelines relating to specific types of collected taxes.

4.24.6.14.1  (08-13-2008)
Collecting Agent For the Facilities and Services Taxes under Internal Revenue Code Sections 4251 and 4271

  1. For general guidelines, see Treas. Reg. Section 49.4291-1.

  2. Determine whether the collecting agent (the entity that files the Form 720 and deposits taxes collected from the actual taxpayers) has provided the "uncollected tax report" described in section 49.4291-1 of the regulations. If the collecting agent has not provided the report, and an examination reveals that the agent failed to collect taxes due on past transactions, the Excise Tax Examiner should request that the agent:

    1. Attempt to collect the back taxes from the actual taxpayers,

    2. report the taxes on Form 720X, Amended Quarterly Federal Excise Tax Return, for the period during which the taxes should have been collected,

    3. provide a list of back taxes collected showing each person's name and address, the amount of tax collected, the date the tax was incurred, and the date the tax was collected, and

    4. provide a list of uncollected back taxes, showing each person's name and address, the amount of tax due, and the date the tax was incurred.

  3. If the collecting agent agrees to follow the procedures in the preceding paragraph, the examination will be held open for a reasonable amount of time to allow the agent to collect the back taxes.

  4. The Excise Tax Examiner should also follow the procedures below.

    1. If the collecting agent filed Form 720, the prior periods covered by the examination should be established on AIMS using regular Master File procedures.

    2. The substitute for return procedures will be followed if the collecting agent did not file Form 720.

    3. Copies of current Form 720 filed by the collecting agent to report tax collected on past transactions will be secured and made a part of the examination work papers. The work papers will also include the lists described in (2) (c) and (d) above.

    4. Where the collecting agent is unable to collect back taxes and the failure to collect was not willful, as defined for purposes of IRC 6672, Non-Masterfile assessments will be made directly against the actual taxpayers using the correspondence examination procedures. For example, the failure is not willful if the collecting agent timely provided the "uncollected tax report" . See IRM 4.24.6.14.3.

    5. In that case, the examination of the collecting agent should be closed as a "no change" . An assessment of additional tax should not be proposed for the prior periods.

  5. If the collecting agent refuses to collect the taxes it failed to collect on past transactions, the following procedures will apply.

    1. All prior periods covered by the examination should be established on AIMS.

    2. The Trust Fund Recovery Penalty under IRC 6672 will be considered if the collecting agent's failure to collect and remit the tax was willful. See IRM 5.17.7.1.3 for a discussion of willfulness. See IRM 4.24.9.4 for procedures to assert the Trust Fund Recovery Penalty.

    3. If the IRC 6672 penalty is not applicable, the back taxes will be assessed directly against the actual taxpayers using correspondence examination procedures. See IRM 4.24.6.14.3.

    4. In that case, the examination of the collecting agent should be closed as a "no change" . The work papers will reflect the back taxes which were not collected by the agent.

  6. If the collecting agent volunteers to pay an amount equal to the back taxes from its own funds, the procedures in IRM 4.24.9.4 apply.

  7. Rev. Rul. 58-300, 1958–1 C.B.454, provides guidelines on the assessment of interest in collected tax cases. Interest assessments will be made against the actual taxpayers when warranted.

  8. There is no basis for assertion of a delinquent filing penalty against the actual taxpayer.

  9. For information regarding statute of limitations see http://www.irs.gov/pub/irs-wd/0101032.pdf .

4.24.6.14.2  (08-13-2008)
Collecting Agent For the Facilities and Services Taxes under Internal Revenue Code Section 4261

  1. If an examination of a collecting agent for taxes imposed under IRC 4261,(including the transportation of persons by air excise tax, the segment excise tax, and the use of international facilities excise tax), reveals that the agent failed to collect one or more of these taxes due on past transactions, the Excise Tax Examiner should follow the procedures below.

    1. Determine if the carrier under exam provided the initial segment of taxable transportation. IRC 4263(c) provides that where any tax imposed by IRC 4261 is not paid at the time payment for transportation is made, then such tax shall be paid by the carrier providing the initial segment of such transportation which begins or ends in the United States. Normally this will be the carrier/collecting agent who sold the transportation to the Taxpayer but it could be another carrier.

    2. If the Excise Tax Examiner does not have the carrier that provided the initial segment under examination then an examination needs to be opened on that carrier. If the carrier the Excise Tax Examiner currently has under examination is the carrier who provided the initial segment of transportation beginning or ending in the U.S. then the prior and subsequent periods should be established on AIMS using regular master file procedures.

    3. The substitute for return procedures will be followed if the carrier responsible for paying the tax did not file Form 720.

    4. The Excise Tax Examiner should prepare detailed work papers to support taxes being assessed under IRC 4263(c). For example, date of ticket sold, ticket number, amount of uncollected taxes now being assessed, and whether taxes are IRC 4261(a), (b) or (c) taxes.

    5. Ensure all components of the taxes imposed under IRC 4261 are properly included in the amount of back taxes due. The work papers will include computations of the tax and a review of all unreported flights.

    6. Prepare an assessment of the uncollected tax against the carrier utilizing the forms used in an agreed or unagreed case, whichever is applicable.

    7. If statute of limitation extensions are necessary, be sure to extend citing IRC 4263(c) as the applicable taxing authority. For information regarding statute of limitations see http://www.irs.gov/pub/irs-wd/0101032.pdf.

  2. These procedures are limited to taxes imposed under IRC 4261 and may not be utilized for IRC 4271 taxes which an air carrier failed to collect. See IRM 4.24.4.14.1.

4.24.6.14.3  (08-13-2008)
Direct Assessment

  1. Under IRC 4251, 4261, and 4271, the taxes imposed are "collected taxes" . Therefore, the person who is making the payment for the service provided is liable for the tax. The collector of the payment for the service is the entity which is required to file Form 720 and remit the collected tax to the Government. The tax attaches at the time the payment is made for the service. The Form 720 filed by the collector is to include all amounts collected for the period for which the Form 720 is filed. There is no tax period involved nor is there a requirement for a return to be filed by the actual taxpayer, i.e., the person paying for the service provided. Section 40.6011(a)-1(a) (3) provides that the person required to collect a collected tax, and not the person incurring liability for the tax, must file the Form 720.

  2. Direct Assessments are to be controlled on Non-Masterfile. Procedures for Direct Assessments against taxpayers are listed below.

    1. Establish the tax period(s) on NMF under MFT 45.

    2. Have each tax period controlled where a collector or collectors have failed to collect tax on transactions arising in different quarters.

    3. A Statute of Limitation date must be entered. Even though the taxpayer is not required to file a return, the taxpayer’s statute is started by the filing of Form 720 by the agency that should have collected the tax. See IRC 6501(a). The Form 720 looked to for statute control is the one that includes the date the purchasing taxpayer paid the service provider. If you have transactions involving more than one quarter, all statutes must be individually protected and Form 895 prepared as necessary. Update the statute of limitation information as needed for statute extensions secured from the taxpayer. Statute extensions executed by the entity that should have collected tax on the transaction do not extend the statute for assessments against the taxpayer.

  3. Letter 898,15-30 Day Letter-Statement of Proposed Adjustments, is designed to be utilized when making direct assessment of a "collected" tax against an actual taxpayer where the collecting agency has failed to collect taxes due on past transactions. Items to consider when preparing Letter 898 as listed below.

    1. The period covered by the examination should be shown on Letter 898as an inclusive period from the date of the first transaction for which tax was not collected to the date of the last transaction for which tax was not collected.

    2. By completing the reverse side of Letter 898, the need for an accompanying report is eliminated. If a separate report is necessary as in the case of claim adjustments, Letter 898 should be used to transmit the report and should be notated "See Attached Report" on the reverse side.

    3. Form 886-A, Explanation of Items should be attached to explain the proposed assessment.

  4. Letter 898 offers the recipient taxpayer three options. The taxpayer can:

    1. Sign and return the agreement form,

    2. contact the originating office within 15 days for an appointment to discuss the case with the originator, or

    3. within 30 days, request consideration of the case by Appeals.

  5. If the taxpayer agrees to the proposed assessment, the Letter 898 become the "return" for processing and a Form 5344, Examination Closing Record, and Form 5734, Non-Master File Assessment Voucher, are to be completed before forwarding the case to the Group Manager for closure. When preparing Form 5734, be careful to utilize:

    1. NMF 46, even though the case is controlled on NMF 45, and

    2. Tax Class 6.

    See IRM 21.7.12.4.2.8,Transportation Tax and Communications Tax Assessments.

  6. If the taxpayer has not responded to the Letter 898 after 30 days, the case will be processed as agreed and the procedures in IRM 4.24.6.14.3 (5) above are to be followed. The initialed copy of the letter, along with Form 5344 and Form 5734 are sufficient for assessment of the tax.

  7. If the taxpayer does not agree and responds to the Letter 898 requesting an Appeals hearing, standard procedures for unagreed cases are to be followed.

  8. It is important to remember no penalties apply in direct assessments as the taxpayer was not required to file a return or to make deposits. See Rev. Rul. 58-300, 1958-1 CB 454. Additionally, because the tax attaches at the time the taxpayer/customer pays the seller/collector for the taxable services, interest is due from the time the taxable services were paid for until the time the tax is paid, either to the collector or the Service. See Rev. Rul. 58-300; Rev. Rul 59-306; 1959-2 CB 422. , and IRM 20.2.10.3.11. In order for the interest to be calculated by the Campus Center, the agent must include a list of the transaction dates and amount of tax due for each transaction in the case file at closing.

4.24.6.15  (08-13-2008)
Closing Procedures for Excise Tax on Structured Settlement Factoring Transactions

  1. Form 8879, Excise Tax on Structured Settlement Factoring Transactions, can be filed multiple times during the year and does not have due date tied to a specific tax period. Any taxpayer filings of this form are posted to Non-Master File using Abstract Code 234.

  2. All cases of this type are controlled on Non Master file AIMS and ERCS using MFT 27, Abstract Code 034.

  3. If during the course of the examination it is determined that the taxpayer is liable for filing prior and subsequent period Form 8876, the Excise Tax Examiner will submit Form 5345-D, Examination Request ERCS Users, and request Non Master File controls.

  4. If the Excise Tax Examiner is reviewing records for multiple months, complete the Form 5345-D for each month/year being reviewed.

  5. The statute will be the alpha statute EE.

  6. If the case is agreed, the Excise Tax Examiner will update the statute to 3 years from the date the signed Form 5384 is received. The Excise Tax Examiner need not submit a substitute for return for processing.

4.24.6.16  (08-13-2008)
Permission to Execute Blanket Export Exemption Certificate

  1. Form 1363, Export Exemption Certificate, is used to support exemption under IRC 4272(b)(2) from the excise tax on the transportation of property by air, where property is being transported by two or more methods of transportation in the course of exportation. For general guidelines see section 49.4271-1(d) of the regulations.

  2. Form 1363 may be prepared by the shipper for each payment or, if the shipper expects to make payments for numerous export shipments over an indefinite period of time, it may be used as a blanket exemption with the permission of the Chief, Excise Tax Program.

  3. Written requests for permission to execute a blanket exemption certificate will be assigned to the excise tax group. Requests will be reviewed for completeness, and additional information will be secured from the shipper when necessary to make a determination.

  4. Permission will be granted where the shipper can demonstrate that it is impractical to execute a separate Form 1363 for each payment.

  5. Written notice of permission to issue a certificate should be signed by or for the Chief, Excise Tax Program. There is no standard form to be used for the shipper's request or for the Chief, Excise Tax Program's permission.

  6. The status of shippers who receive permission to execute blanket exemption certificates should be reviewed within six months after permission is granted, and every two years thereafter, to determine if the shipper still qualifies to execute the certificates.

  7. If denial of permission to execute a blanket exemption certificate is recommended, and agreement with the shipper cannot be reached at the group manager level, the shipper can appeal to the Chief, Excise Tax Program. Written notice to the shipper that they are not entitled to execute a blanket exemption certificate will be signed by or for the Chief, Excise Tax Program.

  8. Written requests and all notices of permission and denial should be maintained in an alphabetical file by the excise tax group. Permission to execute a blanket certificate shall remain in force until withdrawn.

4.24.6.17  (08-13-2008)
Overview of SFR Action on Non-Filer Cases

  1. Centralized Excise Operations will use Push Code 036 to establish a TC 150 (Master File Entity Created) on MFT 03 for all Non-Filer Form 720 cases sent to the field for examination. The MFT 03 Master File account will be controlled on AIMS.

    Note:

    No filing requirement is established through this process.

  2. If during the course of the examination it is determined that a taxpayer is liable for filing prior/subsequent period excise tax returns, the Excise Tax Examiner will initiate SFR procedures outlined below for the periods in question.

  3. The Excise Tax Examiner will request information necessary from the taxpayer to determine a substantially correct tax liability. If the taxpayer provides the Excise Tax Examiner with delinquent returns, the Excise Tax Examiner will review the books and records of the taxpayer to determine the accuracy of the delinquent returns received.

  4. The controlling IRM for SFR actions is IRM 4.4.9 AIMS Processing - Delinquent and Substitute for Return Processing.

  5. The Excise Tax Examiner needs to properly consider the assertion or non-assertion of penalties. See IRM 4.24.10.9.2 for completion of Form 3198 Special Handling Notice for Examination Case Processing.

  6. See IRM IRM 4.24.9.3.3 for more information on SFR penalties.

  7. For more information on the SFR process see the Exam Technical Services web page at http://sbse.web.irs.gov/Exam/TechSvcs/Guidance/CaseRelated/DelinquentSubstitute4return.htm.

4.24.6.17.1  (08-13-2008)
Examples of SFR Action on Non-Filer Cases

  1. Tables 1 and 2 below contain examples of SFR action on Non-Filer Cases. These examples pertain to a SFR that already has AIMS controls.

  2. Tables 3 through 6 contain examples of delinquent return actions taken.

    If ... Then ...
    TABLE 1- Excise Tax Examiner concludes SFR taxpayer IS NOT liable for Excise tax in the period examined and will not be liable for tax in subsequent periods

    1. Prepare a no-change report, Form 5384, Excise Tax Examination Changes and Consent to Assessment and Collection (RAR). A no-change examination will be accounted for by writing"0" in columns 4 and 5 (to represent the SFR TC 150 posting) and also in columns 6 and 8 for the appropriate tax period. No-change, Subject to Chief, Excise Tax Program Approval will be written in the Other Information section.

    2. Prepare Letter 3401-E for the group manager’s approval and issuance to taxpayer.

    3. Prepare the case file for closure using Disposal Code 02 on Form 3198.

    4. Prepare Form 5344 and enter zero (0) in 404d.

    5. Prepare Letter 590, No Change Final Letter.Letter 590 will be signed by the Manager for W. Ricky Stiff, Chief, Excise Tax Program, and left in the case file. It will be dated and mailed to the taxpayer by CCP.

    6. On Form 3198 check the following boxes in the Letter Instructions for CCP section: No Change Letters and Letter 590 (straight N/C).

    7. Review the BMFOLE to determine if the Form 720 filing requirement indicator is present.

    8. If the filing requirement is present then prepare Form 3177 Notice of Action for Entry on Master File. Check the "Other" box and insert Transaction Code 591 and Closing Code 75 to remove the filing requirement indicator. Include the form in the case file and check the Form 3177 box on Form 3198.

    9. If no filing requirement is present then no further action is necessary.

    10. Close case following normal No Change case closing procedures. See IRM 4.24.10.6.2.
    TABLE 2- Excise Tax Examiner concludes SFR taxpayer IS liable for Excise tax in the period examined and will be liable for tax in subsequent periods

    1. Prepare Form 5384 using the exam adjustment amount as the"Correct Liability" in column 4, and zero (0) in the "Previous Assessment" , column 5. The correct liability will also be shown in column 6,"Tax ."

    2. Recommend penalties as applicable.

    3. Sign the Form 5384.

    4. Date stamp the received date on Form 5384.

    5. Complete Form 5344. Enter the tax amount in Item 404d.

    6. Prepare the case file for closure using the appropriate disposal code on Form 3198.

    7. Prepare Letter 987 Agreed Tax Change Letter for the manager to sign on behalf of W. Ricky Stiff, Chief Excise Tax Program. Leave the letter in the case file for CCP to date and mail to the taxpayer.

    8. Review the BMFOLE to determine if a Form 720 filing requirement indicator is present.

    9. If the filing requirement is present then no further action is necessary.

    10. If the filing requirement is not present then Form 2363, Master File Entity Change will be prepared. Check the F720 box to set the filing requirement indicator. Leave the completed form in the case file and check the Form 2363 box on Form 3198.

    11. Leave the statute as EE and enter the statute on Form 3198.

    12. Close case following normal case closing procedures. See IRM 4.24.10.

    TABLE 3- Excise Tax Examiner receives delinquent return from taxpayer, and after review accepts them as filed

    1. Do NOT forward delinquent return to the service center for processing.

    2. Date stamp the received date on the return.

    3. Ask the taxpayer to make an advance payment on the deficiency, which will ensure the taxpayer is not charged any undue interest.

    4. Prepare Form 5384 using the amounts shown on the delinquent return as the "Correct Liability" in column 4 and zero (0) in the "Previous Assessment" column 5. The correct liability will also be shown in column 6, "Tax " . Attach the delinquent return to the RAR. The taxpayer’s signature on the delinquent return will suffice as agreement to the tax liability shown on the RAR.

    5. Complete Form 5344. Enter the tax amount in Item 404d. Do not make an entry in Item 414.

    6. Prepare the case file for closure using the appropriate Disposal Code on Form 3198.

    7. Prepare Letter 590, No Change Final Letter. Letter 590 will be signed by the Manager for W. Ricky Stiff, Chief, Excise Tax Program, and left in the case file. It will be dated and mailed to the taxpayer by CCP.

    8. On Form 3198 check the following boxes in the Letter Instructions for CCP section: No Change Letters and Letter 590 (straight N/C).

    9. Update the statute to the date the delinquent return was received using Form 5348, AIMS/ERCS Update (Examination Update).

    10. Review the BMFOLE to determine if a Form 720 filing requirement indicator is present.

    11. If the filing requirement is present then no further action is necessary.

    12. If the filing requirement is not present then Form 2363, Master File Entity Change, will be prepared. Check the F720 box to set the filing requirement indicator. Leave the completed form in the case file and check the Form 2363 box on Form 3198.

    13. Close case following normal No Change case closing procedures. See IRM 4.24.10.6.2.
    TABLE 4- Excise Tax Examiner receives delinquent return from taxpayer and after review doesNOT accept them as filed

    1. Prepare Form 5384 using the amounts shown on the delinquent return as the "Correct Liability" in column 4 and zero (0) in the "Previous Assessment" column 5. The correct liability will also be shown in column 6, "Tax " . Attach the delinquent return to the RAR. The taxpayer’s signature on the delinquent return will suffice as agreement to the tax liability shown on the RAR.

    2. In the Special Features section of Form 3198 check the Partial Assessment Requested box. Submit the partial agreement package to CCP for assessment.

    3. Complete the examination.

    4. Review IDRS to ensure that the delinquent return/partial assessment has been processed before completing the final RAR.

    5. Once the partial assessment has posted, complete a second Form 5384 using the amount shown on the delinquent return (the partial assessment amount) as the starting point in the "Previous Assessment" column 5, and the total amount of tax in column 4, "Correct Liability" . The adjustment will be entered in column 6, "Tax" .

    6. Solicit the taxpayer's signature on Form 5384.

    7. Date stamp the received date on Form 5384.

    8. Complete Form 5344. Enter the adjustment amount in Item 404d. Do not make an entry in Item 414.

    9. Prepare the case file for closure using the appropriate Disposal Code on Form 3198.

    10. Prepare Letter 987 for the manager to sign on behalf of W. Ricky Stiff, Chief Excise Tax Program. Leave the letter in the case file for CCP to date and mail to the taxpayer.

    11. Update the statute to the date the delinquent return was received using Form 5384 and enter on Form 3198.

    12. Close case following normal case closing procedures. See IRM 4.24.10.

    TABLE 5- Excise Tax Examiner receives additional delinquent returns for periods which are currently not controlled on AIMS and after review accepts the returns as filed

    1. Date stamp the received date on the delinquent returns.

    2. Complete SFR procedures to establish a TC 150 on AIMS for each delinquent return received.

    3. Submit Form 5345-D (Examination Returns Control System) Users to the group secretary requesting controls on each return received.

    4. Prepare Form 5384 using the amounts shown on the delinquent return as the "Correct Liability" in column 4 and zero (0) in the "Previous Assessment" , column 5. The correct liability will also be shown in column 6, "Tax " . Attach the delinquent return to the RAR. The taxpayer’s signature on the delinquent return will suffice as agreement to the tax liability shown on the RAR.

    5. Complete Form 5344. Enter the tax amount in Item 404d. Do not make an entry in Item 414.

    6. Prepare Letter 590, No Change Final Letter. Letter 590 will be signed by the Manager for W. Ricky Stiff, Chief, Excise Tax Program, and left in the case file. It will be dated and mailed to the taxpayer by CCP.

    7. Update the statute to the date the delinquent returns were received using Form 5348. Enter the updated statute date on Form 3198.

    8. Review the BMFOLE to determine if a Form 720 filing requirement indicator is present.

    9. If the filing requirement is present then no further action is necessary.

    10. If the filing requirement is not present then Form 2363 Master File Entity Change will be prepared. Check the F720 box to set the filing requirement indicator. Leave the completed form in the case file and check the Form 2363 box on Form 3198.

    11. Close case following normal No Change case closing procedures. See IRM 4.24.10.6.2.
    TABLE 6- Excise Tax Examiner receives additional delinquent returns for periods which are currently not controlled on AIMS and after reviewDOES NOT accept the returns as filed.

    1. Date stamp the received date on the delinquent returns.

    2. Complete SFR procedures to establish a TC 150 on AIMS for each delinquent return received.

    3. Submit Form 5345-D, Examination Returns Control System Users, to the group secretary requesting controls on each return received.

    4. Prepare Form 5384 using the amounts shown on the delinquent return as the "Correct Liability" in column 4 and zero (0) in the "Previous Assessment" column 5. The correct liability will also be shown in column 6, "Tax " . Attach the delinquent return to the RAR. The taxpayer’s signature on the delinquent return will suffice as agreement to the tax liability shown on the RAR.

    5. In the Special Features section of Form 3198 check the Partial Assessment Requested box. Submit the partial agreement package to CCP for assessment.

    6. Complete the examination.

    7. Review IDRS to ensure that the delinquent return/partial assessment has been processed before completing the final RAR.

    8. Once the return/partial assessments have been processed, complete a second Form 5384 using the amounts shown on the delinquent returns as the starting points in the "Previous Assessment " column 5, and the total amount of tax in column 4, " Correct Liability" . The adjustment will be shown in column 6," Tax" .

    9. Solicit the taxpayer's signature on Form 5384.

    10. Sign the Form 5384.

    11. Date stamp the received date on Form 5384.

    12. Complete Form 5344. Enter the adjustment amount in Item 404d. Do not make an entry in Item 414.

    13. Prepare the case file for closure using the appropriate Disposal Code on Form 3198.

    14. Prepare Letter 987 for the manager to sign on behalf of W. Ricky Stiff, Chief Excise Tax Program. Leave the letter in the case file for CCP to date and mail to the taxpayer.

    15. Update the statute to the date the delinquent returns were received using Form 5348.

    16. Review the BMFOLE to determine if a Form 720 filing requirement indicator is present.

    17. If the filing requirement is present then no further action is necessary.

    18. If the filing requirement is not present then Form 2363 Master File Entity Change will be prepared. Check the F720 box to set the filing requirement. Leave the completed form in the case file and check the Form 2363 box on Form 3198.

4.24.6.18  (08-13-2008)
Delinquent Return Procedures-No-Examination Action Taken Cases

  1. If an Excise Tax Examiner receives a delinquent return through no direct or indirect action by the Excise Tax Examiner , the Excise Tax Examiner should:

    1. If Taxpayer Assistance Center services are available in the Excise Tax Examiner's post-of-duty, accept the delinquent returns and deliver them for processing to the Customer Service – Tax Assistance Center.

    2. If Taxpayer Assistance Center services are not available in the Excise Tax Examiner's post-of-duty, accept the returns, date stamp them received, and mail them to IRS Center, Cincinnati, OH 45999-0009.

  2. The Excise Tax Examiner will not process these delinquent returns as delinquent returns secured in the field, or obtain controls via SFR procedures as if they were secured during the course of an examination.

4.24.6.19  (08-13-2008)
SFR Non-Filer Cases-No Examination Action Taken Procedures

  1. When a field group receives a classified Non-Filer case from CEO for examination the case may be surveyed, or closed no-change.

  2. The group manager may survey the case before assignment (DC 31), or survey after assignment (DC 32).

  3. If an Excise Tax Examiner reviews a case and determines that the issues appear to be a one time event with minimal tax implications and after discussing the case with the manager a determination is made not to work the case. The taxpayer has not been contacted but time has been applied to the case. The Excise Tax Examiner will take the actions listed below.

    1. Prepare Form 5384 using the no-change procedures.

    2. Prepare the case for closure using Disposal Code 02 on Form 3198.

    3. In the Letter Instructions to CCP section check the No Letter Required to be sent by CCP box.

    4. Prepare Form 5344 and enter zero (0) in item 404d.

    5. Review the BMFOLE to determine if a Form 720 filing requirement indicator is present.

    6. If the filing requirement is present then prepare Form 3177, Notice of Action for Entry on Master File. Check the "Other" box and insert Transaction Code 591 and Closing Code 75 to remove the filing requirement indicator. Leave the completed form in the case file and check the Form 3177 box on Form 3198.

    7. If no filing requirement is present then no further action is necessary.

Exhibit 4.24.6-1  (08-13-2008)
Statute of Limitations Chart

  1. The IRM controlling Statutes of Limitation issues is IRM 25.6, Statute of Limitations Handbook.

  2. Statute Controls-Due Dates and Statutory Period of Limitations. See the current "ADP and IDRS Information" Document 6209.

  3. IRM Citations for Statute of Limitations.

    1. Extensions: Use Form 872B, Consent to Extend the Time to Assess Miscellaneous Excise Taxes. See IRM 25.6.22.5.

    2. Preparation of Consent Forms: See IRM 25.6.22.6.11, Preparation of Consents for Specific Entities and Taxes-Excise Tax.

    3. Statute Controls: All statute controls outlined in IRM 1.4.40.4.3 SB/SE Compliance Field Examination Group Manager Resource Guide must be followed.

    4. Form 895 procedures: See IRM 25.6.23 Statute of Limitations - Examination Process - Assessment Statute of Limitations Controls.

    5. Alpha Codes: See IRM Exhibit 25.6.23-3.

    1. MFT Code Form No Type of Return Period Covered Due Date Statutory Period of Limitations
      03 720 Excise Tax Quarter Last day of the month following the end of the quarter (April 30, July 31 Oct 30, Dec 31.) 3 years after due date of return or 3 years after the date return was actually filed, whichever is later.
      64 730 Wagering Tax Month Last day of the month following the month in which the wagers are accepted. 3 years after due date of return or 3 years after the date return was actually filed, whichever is later.
      60 2290 Heavy Highway Vehicle Use Tax Year August 31, if in use in July, or last day of the month following the month first used in a period 3 years after due date of return or 3 years after the date return was actually filed, whichever is later.
      63 11-C Occupational Tax on Wagering And Registration Return For Wagering Year Register prior to accepting first wager, then renew by July 1 each year. 3 years after due date of return or 3 years after the date return was actually filed, whichever is later.


More Internal Revenue Manual