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IRS Audits

Chapter 5. TE/GE AIMS Manual

Section 2. TE/GE Examined and Non-Examined Closures

4.5.2  TE/GE Examined and Non-Examined Closures

4.5.2.1  (06-01-2003)
Processing TE/GE AIMS Closings

  1. This subsection contains Master File (MF) and Non-Master File (NMF) processing, instructions for EP (Form 5330's on BMF), EO/GE examination cases and discrepancy adjustments. TE/GE Examination Special Support (ESS) Tax Examiners will be given information on how to:

    1. Determine if they should make an adjustment on MF or NMF.

    2. Make entity and POA changes.

    3. Complete Form 5599, TE/GE Examined Closing Record and Form 5596, TE/GE Non-Examined Closing Record.

     

4.5.2.1.1  (06-01-2003)
Error Tolerance Level

  1. If, during an edit and review of examination case files, it becomes apparent an error was made in computing the deficiency, overassessment, or penalty and the error favors the taxpayer (less tax due or higher refund due), we should assess the correct deficiency or penalty and schedule the corrected overassessment for a refund.

  2. Research IDRS CC BMFOL (BMF), EMFOL (EPMF), IMFOL (IMF), or the Automated Non-Master File system (ANMF), to verify the accuracy of the tax shown on the return and any previous adjustments as reflected on the examination report.

  3. If, by correcting the error, the taxpayer will owe additional tax or receive a lesser refund, the case may be processed for the deficiency, overassessment or penalty shown on the examination report, if the difference does not exceed $50.00.

  4. Errors of more than $50.00 may be processed when approved by the Manager, Mandatory Review; Manager, Programs and Review; Manager, Outreach, Planning and Review or the Director of EP, EO or GE (FSLG, ITG or TEB) Examinations as established by local procedures. The case file may need to be returned to the Examiner to issue a new report.

    Note:

    The above review must be applied separately to each item involved and not to the net effect when multiple years are involved. The dollar amount of the error in relation to the total corrected deficiency should be considered when determining if the error should be waived.

     

4.5.2.1.2  (06-01-2003)
Electronically Filed Returns

  1. TE/GE personnel should follow normal requisition and closing procedures, even though the taxpayer electronically filed the return (regular prints or Graphic Electronic Prints (GEL) must be closed using an original return blocking series). The hard copy return that the requestor receives is considered the original return.

    1. However, returns will not have Form 8453, U.S. Individual Tax Declaration for Electronic Filing automatically associated unless the requesting function is Appeals, Criminal Investigation or the Taxpayer Photocopy Unit.

    2. The taxpayer's signature will not appear on a hard copy of an electronically filed return, but will appear on the signature document, Form 8453.

    3. Securing the original document may be necessary in criminal investigation, tax court cases and any other time an original signature is critical for processing (see (3) below).

    4. Form W-2, Form W-2G, and Form W-2P information appear on the output page (a W-2 summary page) of the electronic return hard copy. The original W-2’s are filed with Form 8453.

     

    Note:

    If the taxpayer electronically files their return, they can now sign their return electronically by creating their own Personal Identification Number (PIN). This PIN will serve as the taxpayer's signature and can only be used if the return is filed electronically using tax preparation software or through a tax professional. In this case, the taxpayer is no longer required to send an original signature on Form 8453.

     

  2. Instructions to secure Form 8453 or Form W-2:

    1. Group manager approval should be secured and documented in the case file. Secure a transcript to ensure the return was electronically filed (see DLN information above).

    2. Use CC ELFRQ-AC2 or follow CC ESTAB procedures. State in the remarks section of the request, "Need Form 8453 Only." Also use the remarks section to request Form 8453-F (1041, Fiduciary), Form 8453-P (Form 1065, Partnership), or Form 8453-E (Form 5500 series returns, Employee Plans).

    3. If the original Form W-2s are needed, use CC ESTAB procedures and enter in the remarks section "Need Form 8453, Original Form W-2s Needed. "

    4. If requested, the Form 8453 must be attached to the print of the return and it will become part of the case file and will receive a renumbered DLN upon closing.

     

  3. Electronically filed returns that fall into the unallowable program other than Form 5500 series will be worked in the Correspondence Examination Branch in the Campus Center where the return is filed.

  4. Command Code TRDBV (Tax Return Data Base) includes all electronically filed original Tax Returns and corrections made to the tax return data in the Error Resolution System (ERS), Generalized Main Frame (GMF) and General Unpostable File (GUF). This command code is a "read only" print.

4.5.2.1.3  (06-01-2003)
Power of Attorney/Tax Information Authorization

  1. A taxpayer may designate a representative to handle their tax matters. See IRM 21.3 Section 7, Processing Power of Attorney. To provide data on Power of Attorney (POA) or Tax Information Authorization (TIA) in a complete and timely manner, the Centralized Authorization File (CAF) system was established. Powers of Attorney received on Civil Penalty cases, MFT 13 or 55 cannot be established on the CAF system.

4.5.2.1.3.1  (06-01-2003)
POA/TIA

  1. Powers of Attorney may be submitted on Form 2848, Power of Attorney and Declaration of Representative. Form 8821, Tax Information Authorization can also be submitted. The form requires the taxpayer to specify the type of tax matter and the period of time for which the power of attorney is effective. These forms are not mandatory and the use of technical language is not necessary.

  2. Effective January 2, 2002, all CAF Unit processing of the Power Of Attorney or Tax Information Authorization forms have been consolidated into two campuses, Memphis or Ogden Campus Centers. POA or TIA forms received at the group level should be forwarded to Memphis or Ogden, based on the state mapping shown below. Exception: International third party forms will still be processed by the Philadelphia Campus.

    Campus Address Phone Numbers State Mapping
    Memphis Campus
    5333 Getwell Road
    Stop 8324
    Memphis, TN 37501    		 FTS:
    901-546-4176
    FAX:
    901-546-4115    		 AL, AR, CT, DE, FL, GA, IL, IN, KY, LA, ME, MD, MA, MI, MS, NH, NJ, NY, NC, OH, PA, RI, SC, TN, VT, VA, WV
    Ogden Campus
    P.O. Box 9941
    Stop 6737
    Ogden, UT