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IRS Audits

Chapter 5. TE/GE AIMS Manual

Section 2. TE/GE Examined and Non-Examined Closures (Cont. 1)

4.5.2  TE/GE Examined and Non-Examined Closures (Cont. 1)

4.5.2.2 
Processing EP/AIMS Closings

4.5.2.2.4 
Completion, Edit and Review of Form 5650, EP Examined Closing Record

4.5.2.2.4.48  (06-01-2003)
Form Number (Item M)

  1. Form Number is to be entered by the Examiner.

  2. Enter the Form Number of the return being closed with this Form 5650.

4.5.2.3  (06-01-2003)
Processing TE/GE Examined Closing Record, Form 5599

  1. Form 5599, TE/GE Examined Closing Record, is used for closing examined:

    1. EP examined BMF Form 5330 returns, Disposal Codes (DC) 01-11, 13 and Surveyed Claims, DC 34. Form 5599 is also used by EP to close examined Form 990T returns and discrepancy adjustments.

    2. EO examined returns, Disposal Codes (DC) 01-19, 50, Surveyed Claims, DC 34 and discrepancy adjustments.

    3. GE examined returns, Disposal Codes (DC) 01-19, 50, 51 and Surveyed Claims, DC 34.

     

  2. The local use of forms and special handling procedures and the data contained on the reverse side of the Form 5599 should suggest who will be responsible for completing each item on Form 5599.

  3. When Form 5599 is received in ESS, some items will have been completed. This section contains information for the completion of Form 5599, for legibility, validity of range, and presence of required entries. If necessary, appropriate corrective action, including returning incomplete forms to the originator or AIMS Coordinator should be taken.

  4. The Enforcement Revenue Information System (ERIS), was incorporated into AIMS effective January 1, 1991. ERIS collects data from existing data sources on a regular basis to track enforcement actions from opening through collection.

4.5.2.3.1  (06-01-2003)
Completion, Edit and Review of Form 5599, TE/GE Examined Closing

  1. Reflected below are explanations on the completion of each item listed on Form 5599. The items are listed in the order they appear on the form. Items that should not be completed for a specific form (i.e., BMF Form 5330's, Form 8038 Series Returns, etc.) are indicated as such.

4.5.2.3.1.1  (06-01-2003)
CC TSCLS (Item A)

  1. CC TSCLS is to be completed by the Examiner to release the AIMS Freeze on Investor Closures.

  2. Not a valid item for EP BMF Form 5330's.

  3. PICF, Partnership Information Control File, Code 5 or 6 will prevent premature closing of the investor return unless the Examiner responsible for final case closure has considered any necessary flow-through adjustments from the key case(s) to the investor return.

  4. If a partial assessment is appropriate, entries will not be made in this item. CC TSCLS is only used as part of the final closing action. Do not complete this item when a return is transferred to the service center or closed to Appeals.

  5. When entered, CC TSCLS will automatically check all of the investor’s linkages to see if they have been closed. If all linkages are closed, then CC TSCLS will set the indicator on the partner record and the PICF-CD to a closed status on the Partnership Control System, PCS, and AIMS data bases. When the "REQUEST COMPLETED" message is transmitted to the screen, the Terminal Operator can proceed to enter the CC AMCLSO.

  6. If the terminal rejects the input of CC TSCLS, the closing error message "CANNOT CLOSE, PCS CONTROL." The Terminal Operator will return the case to ESS with a CC TSUMY (one line summary display for the line 1 Partnership/Partner record and each of its linked Partner/Partnership accounts) print attached.

4.5.2.3.1.2  (06-01-2003)
Partial Agreement (Item B)

  1. Partial Agreement (Item B) is to be completed by ESS to indicate that a partial agreement is being made.

  2. Partial closures of AIMS will allow an adjustment to be made to the tax module without closing the AIMS database. Placing a check in the box marked "Partial=F" instructs the Terminal Operator to input the account as a partial and not a final closure on AIMS. Enter the letter F in P1-6 CC AMCLS. Form 3198 should be prepared and attached to the case file by the Examiner providing instructions as to return the case file and copies of assessment documents (i.e., Form 5599 or Form 2859) once the partial has posted.

  3. The only valid item numbers on a partial closures on Form 5599 are 02, 03, 04, 05, 6a, 6b, 6c, 07, 08, 09, 11, 12, 13, 14, 15, 36, 38 and 43.

  4. When a partial assessment is being processed, even though a Hold Code 1 is automatically generated to prevent the release of an advance payment pending the processing of the final adjustment action, TC 570 must be posted to the account. The TC 570 is necessary if a payment has been posted and the TC 30X transaction has or will have a 23C Date that is later than the transaction date of the TC 640. A subsequent posting of a TC 29X/30X will release the TC 570, or when the module balance becomes zero or debit.

  5. For partial assessments with open TEFRA linkages, an original and copy of Form 5599 must be included in the case file. The copy of the closing document will remain with the case file and will be forwarded to the Campus, Examination Suspense Unit. The original closing document will be forwarded to the Campus Center Files Function as a source document after terminal input.

  6. For closures to Appeals where the tax adjustment is processed as a partial and is quick assessed, after processing the quick assessment via Form 2859, Request for Quick or Prompt Assessment, prepare Form 3177, Notice of Action for Entry on Master File, to input TC 570. TC 570 will prevent the erroneous refund of a credit balance or advance/subsequent payment that may be on the tax module. Where the partial closure to Appeals is not quick assessed, Hold Code 1 is entered on Form 5599 to prevent erroneous refunds.

  7. The following special rules apply when processing a partial assessment:

    1. The system automatically generates Hold Code 1, but a TC 570 must be posted to the account to prevent any refund from being issued (See (3) above). A refund will not be released unless indicated on Form 3198, Special Handling Notice, in which case a TC 570 must not be input.

    2. When the refund is to be released, input Hold Code 3 on the adjustment document.