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4.4.25. Quick Assessments

4.4.25 Quick Assessments

Manual Transmittal

November 29, 2022

Purpose

(1) This transmits revised IRM 4.4.25, Audit Information Management System (AIMS) - Validity and Consistency, Quick Assessments.

Material Changes

(1) IRM 4.4.25 has been extensively revised throughout. Names of functional areas have been changed to reflect the current organizational structure and the IRM has been reorganized. A summary of significant changes is reflected below:

IRM Reference

Description of Changes

IRM 4.4.25.1

New section added: Program Scope and Objectives. Title was changed to Program Scope and Objectives. Information was added to clarify the IRM Purpose, Audience, AIMS Policy Owner and AIMS Program Owner.

IRM 4.4.25.1.1

Background information was added to clarify the procedure, which remains in this IRM and reference to procedure, no longer in this IRM.

IRM 4.4.25.1.2

Responsibility for procedure in this IRM is defined.

IRM 4.4.25.1.3

Related References.

IRM 4.4.25.2

Introduction IRM 4.4.25.1 was renumbered to IRM 4.4.25.2 and updated with new information.

IRM 4.4.25.2.1

Procedures which were previously in Agreed Unpaid Deficiencies Greater Than $100,000 can be found in the following IRMs. IRM 4.10.8.10.1 and IRM 4.46.6.8, IRM 4.10.9.9.1 and IRM 4.10.9.9.1, IRM 3.17.244.2.1, IRM 3.17.244.3.2.

IRM 4.4.25.2.2

Merged Statute of Limitations Less Than 60 Days into IRM 4.4.25.2.

IRM 4.4.25.2.3

Renumbered section to Assessments $100,000,000 or Greater to IRM 4.4.25.3.

IRM 4.4.25.2.4

Procedures which were previously in Amended Return can be found in the following IRMs. IRM 4.10.11.4.1 and IRM 4.10.11-3.

IRM 4.4.25.2.5

Procedures which were previously in IRC 6707A, Penalty for Failure to Include Reportable Transaction Information With Return can be found in the following IRMs. IRM 4.32.2.12.7, IRM 4.32.4.3.2 and IRM 4.32.4.6.3.

IRM 4.4.25.2.6

Procedures which were previously in IRC 6871, Claims for Income, Estate, Gift, and Certain Excise Taxes in Receivership Proceedings, Etc. can be found in the following IRM. IRM 4.27.1.9.1.

IRM 4.4.25.3

Procedures which were previously in Required Research, Area Office Group and Campus Examination Procedures can be found in the following IRM. IRM 4.63.4.15.1.

IRM 4.4.25.3.1

Procedures which were previously in Recoverable Retention Register (RRR) can be found in the following IRMs. IRM 4.4.23.8.1 and IRM 21.7.10.4.6.4.1 .

IRM 4.4.25.4

Procedures which were previously in Statute of Limitations Less Than 60 Days (Special Processing), Area Office Group and CCP Procedures can be found in the following IRMs. IRM 25.6.23.5.9.2  and IRM 25.6.23.7.1 .

IRM 4.4.25.4.1

Procedures which were previously in Case File Not Ready for Final Closure, Area Office Group Responsibility can be found in the following IRMs. IRM 4.10.11.2, IRM 4.10.8.6, and IRM Exhibit 4.46.5-2.

IRM 4.4.25.4.2

Section renumbered to IRM 4.4.25.4.

IRM 4.4.25.5

Procedures which were previously in Case Closure After Quick Assessment, Area Office Group Procedures can be found in the following IRMs.. IRM 4.4.12.2.6, IRM 4.4.12.2.7, and IRM 4.63.4.15.1.

IRM 4.4.25.6

Procedures which were previously in TEFRA Defaulted Final Partner Administrative Adjustment (FPAA) Quick Assessment can be found in the following IRMs. IRM 4.31.2.7.2.6 , IRM 4.31.2.3.9.2.4, and IRM 4.31.3.7.1.

IRM RM 4.4.25.7

Procedures which were previously in Quick Assessments on Civil Penalties, Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties, Area Office Group Procedures can be found in the following IRMs. IRM 4.32.2.12.10.2.3, IRM 4.32.2.12.10.3.1.1 and IRM 4.32.2.12.10.3.1.2

IRM 4.4.25.8

Section renumbered to IRM 4.4.25.5, Quick Assessments on Civil Penalties, Form 8278, CCP Procedures.

IRM 4.4.25.9

Procedures which were previously in Quick Assessments on First-Time Homebuyer Tax Credit (FTHBC), CCP or Campus Examination can be found in the following IRMs. IRM 21.6.4.4.17.1 and IRM 21.6.4.4.17.4.

IRM 4.4.25.10

Section renumbered to IRM 4.4.25.6, Research and Actions Required Prior to Quick Assessment, CCP or Campus Examination.

IRM 4.4.25.11

Procedures which were previously in Quick Assessment Procedures, CCP or Campus Examination Procedures can be found in the following IRMs. IRM 4.63.4.15.3  and IRM 4.23.11.10.

IRM 4.4.2511.1

Procedures which were previously in Form 2859 can be found in the following IRM. IRM 3.17.244.4.3.

IRM 4.4.25.11.1.1

Section renumbered to IRM 4.4.25.7, 23C Date.

IRM 4.4.5.11.1.2

Procedures which were previously in Blocking Series can be found in the following IRM. IRM Exhibit 3.17.244-4.

IRM 4.4.25.25.11.1.3

Procedures which were previously in Change in Withholding Credits can be found in the following IRMs. IRM 3.17.244.4.4 and IRM Exhibit 4.63.3-7.

IRM 4.4.25.11.1.4

Procedures which were previously in Reference Number Adjustment can be found in the following IRM. IRM 21.7.2.

IRM 4.4.25.11.1.5

Section renumbered to IRM 4.4.25.8, Excess Credits on Account.

IRM 4.4.25.11.1.6

Section renumbered to IRM 4.4.25.9, Deficiency/Overassessment.

IRM 4.4.25.11.1.7

Section renumbered to IRM 4.4.25.10, Delinquent Return Quick Assessment.

IRM 4.4.25.12

Section renumbered to IRM 4.4.25.11, Forwarding Quick Assessments to the Campus, CCP Responsibility.

IRM 4.4.25.13

Section renumbered to IRM 4.4.25.11.1, Follow-up on Quick assessment Form 3210, CCP or Campus Examination Procedures.

IRM 4.4.25.14

Section renumbered to IRM 4.4.25.12, Quick Assessment Verification Form 3552, CCP or Campus Examination Procedures.

IRM 4.4.25.14.1

Section renumbered to IRM 4.4.25.12.1, Follow-up on Form 3552.

IRM 4.4.25.15

Section renumbered to IRM 4.4.25.13, Second Adjustment Document, Form 5344 or Form 5403, CCP Responsibility.

IRM 4.4.25.15.1

Section renumbered to IRM 4.4.25.13.1, Form 5344 or Form 5403.

IRM 4.4.25.15.2

Section renumbered to IRM 4.4.25.14, Processing Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.

Effect on Other Documents

IRM 4.4.25 dated July 26, 2012 is superseded.

Audience

Large Business and International (LB&I) and Small Business / Self-Employed (SB/SE).

Effective Date

(11-29-2022)

Lori L. Roberts
Director, Technology Solutions
Small Business/Self-Employed Division

Program Scope and Objectives

(1) Purpose: The procedures, which were in this IRM, pertained to the Examination Audit Process. The removed procedures do not pertain to the AIMS Information Technologies (IT) System, which is the subject of this IRM. New IRM references for the procedures previously located in this IRM are listed in the material changes. This section provides general instructions for completing quick assessments. The CCP procedures remaining in this IRM will be included in the new IRM 4.38.1, Examining Processing, Centralized Case Processing CCP, Organization and Responsibilities.

(2) Audience: The audience for this Internal Revenue Manual (IRM) section will be Examination CCP.

(3) Policy Owner: The Director Small Business and Self-Employed (SB/SE), Technology Solutions who is under the Director, Operations Support.

(4) Program Owner: Examination Systems and Projects, Customer Service.

(5) Program Goals: This chapter contains information and procedures on processing quick/prompt assessments for examination employees.

(6) IRM deviations must be submitted in writing to the Director Small Business and Self-Employed (SB/SE) following instructions from IRM 1.11.2.2.4.3, Internal Management Documents System - Internal Revenue Manual (IRM) Process.

Background

(1) The procedures, which were in this IRM, pertained to the Examination Audit Process. The procedures do not pertain to the AIMS Information Technologies (IT) System, which is the subject of this IRM. New IRM references for the procedures previously located in this IRM are listed in the material changes. CCP procedures remaining in this IRM will be included in the new IRM 4.38.1 Examining Processing, CCP, Organization and Responsibilities

Responsibility

(1) Headquarters’ Examination is responsible for all policy and procedures related to CCP..

Related References

(1) IRM 3.17.244 Manual Assessments.

Introduction

(1) This chapter contains information and procedures for preparing and processing Quick/Prompt and Manual Assessments.

(2) Quick assessments are prepared to protect the IRS’s interest, when a statute expires in 60 days or less or the assessment of taxes or credits is in jeopardy.

Note: During the month of December, CCP and Campus Examination are required to follow quick assessment procedures for cases with less than 90 days on the Assessment Statute Expiration Date (ASED). This allows the organization time to fix an unpostable situation, once the January dead cycles have ended.

Special Processing - Assessments $100,000,000 or Greater

(1) Quick assessments cannot be transferred to Master File (MF) for amounts of $100,000,000 ($100 million) or more.

(2) If the case is being worked in CCP, they will split and process these as multiple assessments on separate documents. CCP will also alert the campus accounting function by phone that the assessment is being split due to the large assessment.

Case File Not Ready for Final Closure, CCP Responsibility

(1) Upon receipt of the EFaxed documents from the group, CCP will:

  1. Acknowledge your request within 48 hours of receipt.

    Exception: Requests received on Friday afternoon will be acknowledged by close of business the following Monday.

  2. Complete the assessment within 5 business days whenever possible. Assessments involving complex and restricted interest computations may take longer.

  3. Stamp Form 5344, "Request Completed."

  4. EFax a copy of Form 5344 back to the group for association with the original case file to verify the assessment was completed.

Quick Assessments on Civil Penalties, Form 8278, CCP Procedures

(1) Prepare Form 2859, according to the Form 8278.

(2) Civil penalties are not controlled on AIMS. Therefore, after a civil penalty quick assessment has been input to MF, the entire civil penalty file will be sent to Files in the campus for refiling under the quick assessment Document Locator Number (DLN).

Research and Actions Required Prior to Quick Assessment, CCP or Campus Examination Procedures

(1) Research IDRS Command Code (CC) TXMOD to determine if a payment has been made on the account, but has not posted to MF.

(2) Input a history item on CC TXMOD, "MAAS with the 23C date," to alert other IRS employees that an assessment is in the process of being posted. The history item will also prevent a manual refund of any payments sitting on the account that should be used to pay the deficiency.

(3) Also input on CC TXMOD, "HOLD4DOC51", which translates to holding for the Document Code 51 (assessment document). This action will cause the module to stay active on IDRS until a Doc Code 51 posts to MF.

(4) Research CCs INOLES, IMFOLE, BMFOLF, AMDIS or ENMOD to verify the most current address for the taxpayer.

23C Date

(1) Following is a table used to determine the 23C date based on when the assessment statute will expire:

How to Determine the 23C Date

STATUTE DATE

23C DATE

IF the statute date will expire:

THEN the 23C date will be:

within two days

the same day that the assessment is EFaxed to the accounting function

in more than two days

the fifth work day after the assessment is EFaxed to the accounting function

Excess Credits On Account

(1) If excess credits are on the account requiring a quick assessment, enter a TC 570 with a zero amount to prevent the credit(s) from refunding.

Deficiency/Overassessment

(1) Prompt or quick assessments may sometimes involve a deficiency for one tax period and an overassessment for another tax period. See IRM 20.2, Interest, regarding debit and credit interest computations and dates to use for offsetting. In addition, process these situations as follows:

  1. For the overassessment tax period(s), manually compute the interest and enter it with the applicable transaction code on the adjustment document along with a Hold Code 2.

  2. Make the appropriate credit transfers on IDRS. If there is a Form 3870 in the case file, make the appropriate credit transfers according to the form.

  3. Enter the following caption on Form 2859 to alert the accounting branch of the available credit: "Credit of $ (amount) being transferred from (period)". Attach the Form 2859 to the deficiency year and forward to the accounting branch.

  4. Forward the overassessment document for processing.

Delinquent Return Quick Assessment

(1) When the quick assessment is for tax shown on a secured delinquent return (for example agreed/unpaid deficiency over $100,000), process the return the same as for a deficiency, except for the following:

  1. CCP will enter the tax shown on the delinquent return in Part C, Item 3a (Tax-Original Return-TC 150) on Form 2859.

  2. CCP will enter the return received date in Part C, Item 3b (Return Received Date) on Form 2859

(2) Do not forward the secured delinquent return to the campus for processing.

Forwarding Quick Assessments to the Campus, CCP Responsibility

(1) EFax or scan quick assessments to the campus accounting branch using the following procedures.

  1. Assign a control number for each Form 2859 that is EFaxed, i.e., FAX 49–055–1. The 1st and 2nd digits are the processing campus code; the 3rd, 4th and 5th digits are the Julian date that the Form 2859 is actually EFaxed; the last digit(s) is the number of the Form 2859. The control number will continue sequentially throughout the calendar year and will start over each January 1st. The control number should be entered in bold print on the top of each Form 2859.

(2) Prepare Form 3210 for each type of tax return. List the following:

  • Name Control

  • MFT

  • TIN

  • Tax Period

  • In the remarks area, enter the 23C date and the note "FAX QUICK ASSESSMENT."

(3) Address Form 3210 to the appropriate function. If you are EFaxing the request, include the originator's complete address, mail stop, and EFAX number in the "From" section for EFaxing back the receipted Form 3210.

(4) EFax the assessment forms in the following order with a cover sheet:

  1. Form 3210

  2. Form 2859

Follow-up on Quick Assessment Form 3210, CCP or Campus Examination Procedures

(1) Receipt of the acknowledged Form 3210 is verification that the quick assessment request(s) was received in the accounting function. Follow-up if the acknowledgment is not received by noon the day after transmission.

Quick Assessment Verification Form 3552, CCP or Campus Examination Procedures

(1) Receipt of a copy of Form 3552, Prompt Assessment Billing Assembly, is verification the assessment has been made.

(2) Upon receipt, verify the accuracy of the assessment amount, as well as the name, address, TIN, and tax period on Form 3552 for consistency with Form 2859.

(3) If any errors are detected on Form 3552, IMMEDIATELY contact the campus accounting function for issuance of a corrected bill.

Follow-up on Form 3552

(1) A manager or designated employee must follow-up with the campus if verification of the assessment is not received.

  1. Follow-up on statute cases in sufficient time to prevent barred assessments.

  2. Follow-up on non-statute cases three weeks from the 23C assessment date.

Note: All follow-up actions should be documented on Form 2859.

(2) Upon receipt of verification, the statute control examiner will be notified in order to close the case from the open statute control file.

Second Adjustment Document, Form 5344 or Form 5403, CCP Responsibility

(1) When a return is ready to be closed on AIMS after a quick assessment, input the second adjustment document Form 5344 or Form 5403, Appeals Closing Record, at the same time the quick assessment has been sent to accounting unless one of the following conditions exist:

  1. A credit transfer is being made and will post to the module after accounting has transferred the quick assessment to the MF account.

  2. A payment has been processed but has not posted to MF.

  3. The quick assessment involves interest bearing penalties/restricted interest.

(2) Prepare the second adjustment document and process it through the IDRS to generate a refile DLN.

Note: Attach a copy of Form 2859 to the front of the first page of the return as a permanent record before closing on AIMS.

Form 5344 or Form 5403 Entries

(1) Verify the group entry in Item 35, Manual Assessment Amount, or enter the manual assessment amount if it is blank, the net tax adjusted by prepayment credits that was processed using quick assessment procedures. This step applies for quick assessments done on Non-Master File returns also.

(2) Enter the applicable disposal code in Item 13.

(3) Enter applicable reference numbers in Item 15.

(4) Following is a table to determine the correct Item 12 and/or 15 entries on Form 5344 or Form 5403:

Determining the Correct Entries for Form 5344 or Form 5403

Item 12 and/or 15 Entries

Entry Codes

IF the sum of the
adjustments, in Item
12 and/or 15, is a

THEN enter:

net increase

  1. TC 300 with zero amount in Item 12.

  2. If there is a credit balance on MF, enter hold Code 2 in Item 7.

net increase AND there is a decrease in tax

  1. TC 301 with the decrease amount and TC 770 with zero in Item 12.

  2. Hold Code 1 in Item 7, or Hold Code 2 if there is a credit balance on MF.

net decrease

  1. If the tax liability is to be decreased, enter TC 301 and amount in Item 12. Otherwise, enter TC 300 with zero amount. If TC 300 with zero amount is entered and there is a credit balance on master file, enter Hold Code 2 in Item 7.

  2. If penalty or interest is to be decreased, enter and code the amount in Item 12.

  3. If credit is to be increased, enter the amount and appropriate credit change reference number in Item 15.

  4. Hold Code 1 in Item 7.

Processing Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return

(1) When adjustments to Form 940 are processed as a quick assessment, the accounting function must ALWAYS be provided with the amount of the TOTAL CORRECTED 940 WAGES.

(2) If a credit reduction state is involved, the accounting function must also be provided:

  1. The credit reduction wages.

  2. The state(s) the credit reduction wage applies to, and

  3. The total credit reduction amount.

Form 2859, Part D Entries

(1) The following items will be entered on Form 2859, Part D:

  1. Enter in Item 23, the total corrected 940 wages.

  2. Enter in Item 24, the total credit reduction amount.

  3. Enter in Item 25a the two digit state abbreviation and in Item 243 the amount of credit reduction wages paid to each state. The total of the credit reduction wages entered in Item 24 must also be provided to the accounting function.

This data was captured by Tax Analysts from the IRS website on December 03, 2023.
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