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Part 4. Examining Process

Chapter 4. AIMS Processing

Section 12. Examined Closings, Surveyed Claims, and Partial Assessments (Cont. 2)

4.4.12  Examined Closings, Surveyed Claims, and Partial Assessments (Cont. 2)

4.4.12.4 
Examined Closings/Surveyed Claims

4.4.12.4.22 
Item 12: Tax Liability Penalty and Interest Adjustments

4.4.12.4.22.3 
Interest Transaction Codes

4.4.12.4.22.3.5  (06-01-2002)
TC 772

  1. Debits the tax module to reverse TC 770 or 776, interest on overpayment.

4.4.12.4.22.3.5.1  (06-01-2002)
TC 720

  1. When secondary to TC 720, represent an offset to the original TC 776 allowance.

4.4.12.4.22.4  (06-01-2002)
Penalty Transaction Codes

  1. No more than four penalty transaction codes may be entered.

  2. The combined total of the penalty and interest transaction codes is limited to four.

4.4.12.4.22.4.1  (06-01-2002)
TC 160

  1. Assesses manually computed delinquency penaIty.

  2. After a TC 160 posts to a module, all subsequent adjustments to the delinquency penalty must be manually computed.

4.4.12.4.22.4.2  (06-01-2002)
TC 161

  1. Abates a previously posted TC 160 or 166, computer-generated delinquency penalty in full or in part.

4.4.12.4.22.4.3  (06-01-2002)
TC 162

  1. Removes restriction on computation of Failure to File Penalty on previously posted TC 160 or 161.

  2. Causes recomputation and allows normal computation of FTF Penalty.

4.4.12.4.22.4.4  (06-01-2002)
TC 170

  1. Assesses manually computed estimated tax penalty applicable to Forms 1040, 1120, and 990–C.

  2. After a TC 170 posts to a module, all subsequent adjustments to the estimated tax penalty must be manually computed.

  3. To increase a previously posted TC 170 or 176, computer generated ES penalty, enter TC 170 for the additional amount of penalty.

  4. If there is no previously posted TC 170 or TC 176, the penalty is assessed with a TC 170 in the normal manner.

4.4.12.4.22.4.5  (06-01-2002)
TC 171

  1. Abates previously posted TC 170 or 176 in full or in part.

4.4.12.4.22.4.6  (06-01-2002)
TC 180 BMF Only

  1. Assesses the FTD penalty for insufficient and/or untimely deposit of taxes.

  2. Applies only to Tax Class 1, 4, 7, or 8 or MFT Codes 01, 03, 09, 10 or 11.

  3. To adjust TC 180 or TC 186, follow procedures for adjusting TC 170 or TC 176.

  4. After a TC 180 posts to a module, all subsequent adjustments to the FTD penalty must be manually computed.

4.4.12.4.22.4.7  (06-01-2002)
TC 181 BMF Only

  1. Abates a previously posted TC 180 in full or in part.

  2. To adjust TC 181, follow procedures for adjusting TC 171.

4.4.12.4.22.4.8  (06-01-2002)
TC 200 IMF OnIy

  1. Assesses a penalty for failure to furnish requested identifying numbers.

4.4.12.4.22.4.9  (06-01-2002)
TC 201 IMF Only

  1. Abates a previously posted TC 200 in full or in part.

4.4.12.4.22.4.10  (06-01-2002)
TC 234 BMF Only

  1. Assesses a manually computed daily delinquency penalty to a maximum of $5000.

4.4.12.4.22.4.11  (06-01-2002)
TC 235 BMF Only

  1. Abates previously assessed daily delinquency penalty, whether manually assessed (TC 234) or computer generated (TC 238), in whole or in part.

4.4.12.4.22.4.12  (06-01-2002)
TC 240

  1. Assesses miscellaneous penalties not identified TC 240 with their own transaction codes.

4.4.12.4.22.4.13  (06-01-2002)
TC 241

  1. Abates a previously posted TC 240 in full or in TC 241 part.

4.4.12.4.22.4.14  (06-01-2002)
TC 270

  1. Assesses manually computed penalty for failure to pay tax.

  2. After TC 270 posts, all subsequent adjustments to penalties must be manually computed.

  3. Restricts penalty computation for the same module.

  4. TC 150 with Condition Code Z (military deferment) generates TC 270 for zero amount.

4.4.12.4.22.4.15  (06-01-2002)
TC 271

  1. Manual abatement of previously assessed FTP penalty. Restricts penalty computation for the same module.

4.4.12.4.22.4.16  (06-01-2002)
TC 272

  1. Removes restriction on computation of Failure to Pay Penalty on previously posted TC 270 or 271.

  2. Causes recomputation and allows normal computation of Failure to Pay Penalty.

4.4.12.4.22.4.17  (06-01-2002)
TC 281

  1. Abates previously posted TC 280 and 286 in full or in part.

  2. Will post prior to return if it is the only transaction with TC 290, and the module contains TC 280 or 286 of equal or greater amount.

4.4.12.4.22.4.18  (06-01-2002)
TC 310 IMF Only

  1. Assesses penalty for failure to report tip income.

4.4.12.4.22.4.19  (06-01-2002)
TC 311 IMF Only

  1. Abates previously posted TC 310 in full or in part.

4.4.12.4.22.4.20  (06-01-2002)
TC 320

  1. Assesses fraud penalty.

  2. Restricts FTP penalty.

  3. May not be used with another penalty except TC 170 or TC 180.

4.4.12.4.22.4.21  (06-01-2002)
TC 350

  1. For returns due after December 31, 1986 a TC 350 may be asserted with a TC 320. See IRM 20.1 Penalty, for more information.

4.4.12.4.22.4.22  (06-01-2002)
TC 321

  1. Abates previously posted TC 320 in full on in part.

  2. Releases the restrictions on FTP penalty.

4.4.12.4.22.4.23  (06-01-2002)
TC 350

  1. Assesses negligence penalty.

4.4.12.4.22.4.24  (06-01-2002)
TC 351

  1. Abates previously posted TC 350 in full or in part.

4.4.12.4.23  (06-01-2002)
Item 13: Disposal Code

  1. 01–04, 07–13, or 34 is required on all closings.

4.4.12.4.23.1  (06-01-2002)
Validity Checks

  1. Certain validity checks must be met or the document will reject at the terminal.

  2. Changed Disposal Codes 03, 04, 07–13, and 34 require Examination Results.

  3. Disposal Codes 09, 10 and 11 (all pertaining to statutory notices of deficiency, are not valid with MFT codes in which stat notices are not issued (01, 04, 09, 10, 11, 17, 18, 19, 71, 72, or 80).

  4. If Disposal Code is 01, 02, 07, or 11 Item 12 and/or Item 15 must not contain an amount that represents tax, penalty or credits.

  5. If Disposal Code 01, Item 12 must be blank but Item 15 may contain an entry other than credit reference numbers 301, 302, 303, 304, 307, 310, 312, 318, 680, 681, 682, 685, 686, 764, 765, 766, 767, 806, and 807.

4.4.12.4.23.2  (06-01-2002)
Agreed

  1. Use Disposal Codes 03, 04, 08 and 09.

4.4.12.4.23.2.1  (06-01-2002)
Valid MFT Codes

  1. Disposal Code 09 is not valid with MFT Codes 01, 04, 09, 10, 11, 17, 18, 19, 71, 72 or 80.

4.4.12.4.23.3  (06-01-2002)
Appealed

  1. Use Disposal Code 07; Item 16, Appeals Office Code is required with DC 07.

4.4.12.4.23.4  (06-01-2002)
Changed Case/No Dollars

  1. Use Disposal Code 12

  2. A changed case with no results requires an amount of $1 in Item 35, Manual Assessment Amount and Disposal Code 12 in Item 13. Some examples of these types of cases are:

    1. Barred assessment cases

    2. Interest assessment only

    3. Tax assessments offset by credits.

4.4.12.4.23.5  (06-01-2002)
Defaulted

  1. Use Disposal Code 10

4.4.12.4.23.6  (06-01-2002)
MFT Codes/Disposal Code Validities

  1. Disposal Code 10 is not valid with MFT Codes 01, 04, 09, 10, 11, 17, 18, 19, 71, 72 or 80.

4.4.12.4.23.7  (06-01-2002)
No Change

  1. Use Disposal Code 01 and 02

  2. If no other priority code is applicable then always use Priority Code 5. This will cause Failure to Pay Penalty and any interest accruals to be update on the account.

4.4.12.4.23.8  (06-01-2002)
Petitioned

  1. Use Disposal Code 11 and Item 16 is required.

4.4.12.4.23.8.1  (06-01-2002)
Valid MFT Codes

  1. Disposal Code 11 is not valid with MFT Codes 01, 04, 09, 10, 11, 17, 18, 19, 71, 72 or 80.

4.4.12.4.23.9  (08-01-2003)
Partial Assessments

  1. Only 03, 04, 08, 09, 10, and 13 are vaIid.

4.4.12.4.23.10  (06-01-2002)
Surveyed Claims

  1. Use Disposal Code 34

  2. Claim Amount must be present

  3. Net of tax and penalties in Item 12 and/or 15 must be negative or a positive credit amount.

  4. Item 24, 26, 27, 28, 29, are not required.

4.4.12.4.23.11  (06-01-2002)
Undeliverable

  1. Use Disposal Code 13

4.4.12.4.23.12  (06-01-2002)
Other IRM References

  1. See IRM 4.4.1, Introduction.

4.4.12.4.24  (06-01-2002)
Item 14: Statute Extended to Date

  1. If the statute expiration date has been corrected or extended, and has not been updated on AIMS, enter the extended date in Item 14.

  2. Failure to input a numeric date will cause an unpostable condition if the Master File statute date has expired and an assessment attempts to post.

4.4.12.4.24.1  (06-01-2002)
Alpha Codes

  1. If the AIMS base contains an alpha character in the statute date (for example, AA = Claim Update, BB = Carryback Update, etc.), that date must be updated to a numeric date prior to closing if an assessment is input.

4.4.12.4.24.1.1  (06-01-2002)
No Change Cases

  1. It is not necessary to update the alpha date on no change cases. AIMS does not send an alpha code to Master File and an TC 300 for zero will not unpost if the ASED is expired.

4.4.12.4.24.1.2  (06-01-2002)
Master File Statute

  1. AIMS does not send a statute update to Master File if the AIMS statute date contains alpha codes.

4.4.12.4.24.2  (06-01-2002)
Claims

  1. Timely filed examined claims that result in a refund will post to Master File even when the ASED has expired.

4.4.12.4.24.3  (06-01-2002)
Form 872

  1. If there is a valid Form 872, Consent to Extend the Time to Assess Tax, in the file, if the correct ASED in not on AIMS, then the extended statute date must be entered to ensure Master File is correct.

4.4.12.4.24.4  (06-01-2002)
Form 872A

  1. Cases with a valid Form 872A and the literal 872A in the AIMS statute date should have a statute extended date entered in Item 14 that is approximately 90 days from the date the return will be closed through the terminals.

4.4.12.4.24.5  (06-01-2002)
TC 560

  1. When the entry in Item 14 is input and it is not the same date as the current ASED on AIMS, it will generate a new assessment statute date (ASED/TC 560) on the Master File.

4.4.12.4.24.6  (06-01-2002)
SFR Posted

  1. If the TC 150 is an SFR, an ASED date is not computed at Master File. See IRM 25.5 Statute of Limitations Handbook for more information.

4.4.12.4.24.7  (06-01-2002)
More Information

  1. See the IRM 25.5, Statute of Limitations of more information.

4.4.12.4.25  (08-01-2003)
Item 15: Credit and Tax Computation Adjustments

  1. Entries in this item are used to; update information fields on Master File (not applicable for non-taxable returns); adjust credits on individual, fiduciary and corporation returns; post changes to adjusted gross income or self-employment tax on individual returns; provide Master File a means to distinguish certain miscellaneous penalties on which to generate interest; and adjust and identify the types of tax being adjusted on excise or employment tax returns.

4.4.12.4.25.1  (06-01-2002)
Maximum Number of Entries

  1. Eight entries can be input at one time.

  2. When there are more than eight Item 15 entries, they can be input through AIMS but you must do so in two steps. Input part of the adjustment as a partial assessment using CC AMCLSF. Then input the rest of the adjustment as a final closure using CC AMCLSE. Inputting all Item 15 entries through AIMS ensures that your exam results are captured.

4.4.12.4.25.2  (06-01-2002)
SFR

  1. The reference information fields will not update Master File if there is a SFR posted.

4.4.12.4.25.3  (06-01-2002)
Special Validity Checks

  1. A terminal reject will occur if any of the following conditions do not occur.

4.4.12.4.25.3.1  (06-01-2002)
Disposal Code 01

  1. MFT other than 03, an amount may be entered if it is other than a reference number that represents a penalty or credit such as 680 or 806.

  2. MFT 03, Item 15 may be entered but the net total of all Item 15 entries must equal zero.


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