SB/SE Memo Focuses on Backup Withholding Returns

Expiration Date: July 6, 2022
Affected IRMs: 4.19.26

Date: July 6, 2020

MEMORANDUM FOR:
CAMPUS BACKUP WITHHOLDING PROGRAM EMPLOYEES AT THE SMALL BUSINESS/SELF-EMPLOYED SITE.

FROM:
Wanda R. Griffin
Director, Specialty Exam Policy

SUBJECT:
Campus Backup Withholding Return Compliance Program Procedures

This memorandum issues guidance when determining liability for backup withholding tax until IRM 4.19.26, Liability Determination, Campus Backup Withholding Return Compliance Program Procedures, is published. Please ensure that this information is distributed to all affected employees within your organization.

Purpose: To provide procedures when working backup withholding return cases in the Campus Backup Withholding Unit.

Background/Source(s) of Authority: In response to TIGTA recommendations made in TIGTA reports 2016-40-078, Due to the Lack of Enforcement, Taxpayers Are Avoiding Billions of Dollars in Backup Withholding & 2017-40-022 Billions of Dollars in Non-Payroll Tax Withholding Discrepancies Are Not Being Addressed this unit will address backup withholding liability resulting from information returns filed with no Payee taxpayer identification numbers (TINs) and no tax withholding.

Procedural Change: Refer to the Backup Withholding For Campus Tax Examiners Local Procedures for procedural guidance. This is a fluid document, under development as the program stands up, so only an outline of the proposed IRM can be provided, based on the structure of the Local Procedures, included as Exhibit 1.

Additionally, this memorandum documents a deviation from IRM 21.10.1.3.3.1, Selecting the Quality Sample, to exclude the Campus Backup Withholding Return Compliance Program cases from paper and telephone quality sampling during the first year of operations. The deviation period will be in effect for twelve months, beginning October 1, 2019, and ending September 30, 2021.

Effect on Other Documents: This guidance will be incorporated into IRM 4.19.26, Liability Determination, Campus Backup Withholding Return Compliance Program Procedures, by July 6, 2022

Effective Date: July 6, 2020.

Contact: Shawn Knott, Employment Tax Policy Analyst, (737) 800-3213.

CC: IRS.gov (https://www.irs.gov/)

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Exhibit-1:

IRM 4.19.26 — Liability Determination, Campus Backup Withholding Return Compliance Program Procedures

4.19.26.1 Program Scope and Objectives

4.19.26.2 — Initial Contact

4.19.26.3 — Correspondence

4.19.26.3.1 Responses to initial letter — TE

4.19.26.3.2 Correspondence — TE

4.19.26.4 Response to Letter 6112 — TE

4.19.26.5 Preparing Return for Assessment IRC § 6020(b) — TE

4.19.26.6 Payer Requests to go to Appeals — TE & manager

4.19.26.7 Open AIMS control to Appeals — TE

4.19.26.8 Complete Form 5344 (to Appeals) — TE

4.19.26.9 Case File Assembly (Appeals) — clerk

4.19.26.10 Close TXMOD control (Appeals) — clerk

4.19.26.11 Little or No Tax Due — TE

4.19.26.12 IAT REQ54 tool — TE

4.19.26.13 Close case — TE

4.19.26.14 Adjustments for Form 4669 — TE

4.19.26.15 Complete closing actions — clerk

4.19.26.16 Case File Assembly – clerk

4.19.26.17 First Time Abate of Penalties — TE

4.19.26.18 Statutory Exception — TE

4.19.26.19 Reasonable Cause — TE

4.19.26.20 Fraud Penalty — TE

4.19.26.20.1 Input of Penalty Abatement — TE

4.19.26.20.2 Input of Penalty Abatement — TE

Exhibits: