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Home  > Tax Professionals
Internal Revenue Manual

Part 5
Collecting Process

Chapter 18
Liability Determination

Section 2
Business Returns IRC 6020(b) Processing

Contents (08-01-2001)
IRC 6020(b)

  1. IRC 6020(b) provides a way to prepare returns and secure assessments from non-filing business taxpayers who:
    • Have an open filing requirement
    • Are required to file a return
    • Do not file a return as required
  2. Exhibit 5.18.2-1 provides an overview of this section in flowchart format. (08-01-2001)
What Is Business Returns IRC 6020(b) Processing?

  1. Internal Revenue Code Section 6020(b) is the authority given to the Commissioner of the Internal Revenue Service to prepare and process returns for non-filing taxpayers.
  2. Delegation Order No. 182 (Rev. 7), extends 6020(b) authority to Internal Revenue Agents; Tax Auditors; Revenue Officers; GS-9 and above; Collection Support function managers, GS-9 and above; Service Center Collection Branch Managers GS-9 and above; Automated Collection Branch Unit Managers, GS-11 and above; Customer Service Collection Branch Managers, GS-10 and above; and Tax Resolution Representatives, GS-9 and above. (08-01-2001)
Research Criteria for BMF Return--IRC 6020(b) Processing Research

  1. Process a return under the provisions of IRC 6020(b) for Business Master File (BMF) returns if:
    • The entity appears to be liable for the return
    • The person required to file the returns does not file it
    • Attempts to secure the returns fail
  2. The following BMF returns with corresponding Master File Tax (MFT) codes are the returns usually prepared under the provisions of IRC 6020(b):
    Form 720 Quarterly Federal Excise Tax Return 03
    Form 940 Employer's Annual Federal Unemployment Tax Return 10
    Form 941 Employer's Quarterly Federal Tax Return 01
    Form 943 Employer's Annual Return for Agricultural Employees 11
    Form 1065 U.S. Partnership Return of Income 06
    Form 2290 Federal Use Tax Return on Highway Motor Vehicles 60
  4. Do NOT propose assessments on cases with the following characteristics: See LEM
  5. See LEM
  6. See LEM (08-01-2001)
Service Center Collection Branch (SCCB) 6020(b) Processing

  1. See LEM (08-01-2001)
Automated Collection System (ACS) I9 Inventory

  1. Letters (LT)18 are mailed at the time of case assignments to ACS for modules with 6020(b) indicators. The LT18 advises that a 6020(b) return may be prepared if the return is not filed. Cases are assigned to ACS inventory I9. (08-01-2001)
ACS Support Group Automated A6020(b) Procedures

  1. The service center support branch provides ACS support for automated and manual ACS 6020(b) cases. The automated program will be the national standard with manual procedures as a back-up in case of hardware and/or software problems. The A6020(b) program resides on the Inventory Delivery System (IDS). (08-01-2001)
Organization, Function, and Program (OFP) Codes for A6020(b)

  1. Each service center is responsible for working their 6020(b) inventory. Report time spent working A6020(b) cases using OFP code 63700. (08-01-2001)
Federal and State Information Sharing Agreements

  1. Federal and state information sharing agreements exist, requiring sharing of information regarding the 6020(b) assessments. Agreements usually require the sharing of information as tax returns are assessed.
    Be careful of taxpayer information disclosure which may occur if you give more information than the federal and state agreement specifies to share with the taxpayer's state of residence.
  2. Maintain the integrity of the agreement by:
    • Sharing weekly information regarding return assessments using information from Status code reports (Report definitions follow in Section 3)
    • Providing information specified in the agreement to your federal/state coordinator (08-01-2001)
A6020(b) Program

  1. A download tape from ACS is run after the weekly IDRS update of ACS. The download tape is loaded onto the IDS stand-alone system. The download allows IDS to maintain the most current information available for the A6020(b) Program.
    Follow unauthorized access (UNAX) guidelines regarding working 6020(b) cases and researching associated taxpayer identification numbers (TINs) to resolve return delinquencies. (08-01-2001)
System Security

  1. The IDS users for A6020(b) have a separate login and password for the Pyramid system.
  2. See LEM
    • See LEM
      Access levels are: view only, update capabilities, managerial inventory control, and database system administrator (SA) activities.
  3. A separate login in the Information Services area is needed for the SA input and output of files.
  4. Changes made to Status codes for each module are stored as a history record in the system.
    1. See LEM
  5. See LEM
    1. A separate menu option is available for viewing and printing the security log.
    2. Printed copies of the security log are to be retained until no longer needed for administration purposes. The information will be archived in the A6020(b) program and available for reprinting when necessary. (08-01-2001)
A6020(b) Inventory Status Codes Procedures

  1. Down-loading of ACS information each week continuously updates the inventory in A6020(b) and brings in new cases assigned to S3 and S6 inventories.
  2. The A6020(b) inventory has several different Status codes to assign in which the cases depend on:
    • Characteristics of the case
    • Progression of the case within the automated system
  3. Generation of Letter (L) 1085 packages is based on requests by the manager or system administrator. See LEM
  4. Review the list of A6020(b) Status codes in Exhibit 5.18.2-3, A6020(b) Status Codes. (08-01-2001)
A6020(b) Lists, Reports, and Duties

  1. Lists and Reports help to determine what is necessary for each case. The duties of tax examiners and group administrators in working the listings and inputting information into the A6020(b) program may vary for each service center depending on resources and sign-on capabilities.
  2. Tax Examiner duties and the capability to sign-on to IDS may vary at each service center. (08-01-2001)
A6020(b) Lists and Reports

  1. Listings for the automated program include the Rejection, New Account and Overage Lists. These lists are produced as part of each weekly ACS download and contain cases that require further research.
    1. Research to see changes necessary for case to enter the A6020(b) program.
    2. Research to find the information for manual input to change case Status for the case to continue through the A6020(b) process.
    3. Research to see if the case needs re-assignment to the call-site.
    4. Research to see if information is available for closure.
    5. Check the ACS follow-up date to ensure there has been enough time allowed to complete the 6020(b) process. Input comments or extend the follow-up date as needed.
      The follow-up date is necessary to keep the case from systemic removal from ACS.
  2. Check the following items as part of the research.
    Ensure the following ACS call-site investigation guidelines are met before sending the case to the Service Center ACS Support group.
    1. Attempt contact by telephone a minimum of three times. If there is no telephone number, contact directory assistance.
    2. Reassign the case to I2, NPL for further research of locator services to obtain a telephone number or address for the entity if directory assistance is not productive.
    3. Demand the filing of all delinquent returns and obtain the necessary information to prepare each and all delinquent returns on all taxpayer accounts. Issue a LT18.
    4. LPS or wage information is available. (08-01-2001)
A6020(b) Rejection Lists

  1. Rejection lists contain cases not entering the automated program. The cases will be listed on the New Account Reject List and will not be added to the IDS system. Each type of rejection will be on a separate page and each call-site will have its own report. The research lists will include:
    • TIN
    • Name control
    • Function Unit
    • Reject Code--ENTY; ATDA; 1LPS; 2LPS; LEM; MOLD; BMOD
  2. The rejection lists and the errors that cause rejection from the program are as follows:
    • See LEM
  3. Research to identify the reason for rejection. See Working Lists and Reports below.
  4. Generate rejection lists using the following menus:
    • See LEM
  5. Selecting the reject. MMDDYYYY allows for viewing and/or printing the reject lists. (08-01-2001)
A6020(b) New Account Lists

  1. New account and research lists show:
    • New cases with CAF indicator
    • New cases with undelivered mail indicator
    • New cases coming into service center inventory 3 (S3)
  2. Research lists contain the following:
    • TIN
    • Name Control
    • Function Unit Assignment Code
    • Tax Period (TXPD)
    • MFT
    • Credit
    The undelivered mail list also contains up to two names for the entity and the address from which mail was returned.
  3. The following listing contains all of the New Account Lists, the Status the cases will be moved to and the criteria within a case that causes it to appear on the list:
    • New Account CAF Research List (Status 010): CAF cases are identified by the CAF indicator on at least one module. Research for power of attorney (POA) address and name. Accounts with a CAF indicator need additional information included in the modules in A6020(b) before the Letter 1085 package can be printed and mailed. Input on IDS which modules have each POA and each POA's address
    • New Account S3 Research List (Status 001): After each upload of IDS from ACS there may be additional inventory coming into S-3 inventory. The new S-3 cases will need research before conversion to Status 019. The New Account S-3 Research List identified the newest See LEM
    • New Account Undelivered Mail List: The new entity has an undelivered mail indicator which causes it to be included on this rejection list but otherwise meets the criteria for A6020(b)
    • Generic Status Research Listing: The system administrator or manager has the capability of printing a generic listing for all of the Status codes. See Exhibit 5.18.2-2 for the information contained on the generic listing (08-01-2001)
A6020(b) Overage Lists

  1. Certain Status codes do not systemically change to the next step in the A6020(b) Program. An overage listing can be created after the administrator requests a run of the Overage and Auto Update Program. Cases will be shown on a list if they have been in a Status code for a specified number of days. The list(s) indicate that a case needs to be started through the process; has been in a particular Status long enough and now needs research to determine if additional work needs to be completed; or that the case needs to be moved to the next Status.
  2. Overage lists contain:
    • Taxpayer Identification Number
    • Master File Tax Code (MFT)
    • Name Control
    • Follow-up Date
    • Number of days overage
  3. See LEM (08-01-2001)
A6020(b) Tax Examiner Duties

  1. The following explanation of the A6020(b) program lists and reports in IRM summarize the duties of tax examiners. Other duties regarding taxpayer responses to the L-1085 packages follow in IRM
  2. Responses to the L-1085 package in which the taxpayer requests an appeal of the proposed tax assessment should not be forwarded directly to Appeals function. Resolve the taxpayers' issues or confer with your manager regarding referral to the Appeals function. Respond to the taxpayer to:
    1. Resolve differences.
    2. Clarify the proposed assessment.
    3. Advise of the balance due after the reconsideration.
    4. Advise the taxpayer of the remaining balance due.
    5. Forward any unresolved issues to Appeals.
  3. If during a taxpayer contact it appears there may be a hardship situation complete Form 911, Application for Taxpayer Assistance Order, and refer the taxpayer to the Taxpayer Advocate Service (TAS). See IRM Part 13 or IRM for more information. (08-01-2001)
Rejection List/Tax Examiner Duties

  1. Cases are rejected from entering into the A6020(b) program if the case does not contain certain criteria.
  2. Research the rejected cases to see if the case can be closed or if the case can be changed to allow it to be down-loaded to A6020(b).
  3. Duties regarding rejection lists (by rejection list title) are shown in the following tables:
    • See LEM
      If Then
      INFORMATION is found See LEM
      THERE is no other information available RE-ASSIGN the case to IO with comments regarding why the case is being reassigned
      • See LEM
If Then
INFORMATION is found DOCUMENT in comments and reassign the case TOS3.
THERE is no other information available REASSIGN the case to IO with comments regarding why the case is being reassigned.
  • See LEM
  • If Then
    INDICATORS of fraud exist REFER the case to CI or Exam based on IRM 5.19.2.
    NO indication of fraud See LEM
    Remaining modules are not eligible for 6020(b) REASSIGN the case to TO IO, 01, 6020 REJ.
  • Enter comments regarding changes to the case in the entity's comment screen on the ACS system. Update of the entity usually allows the case to enter the A6020(b) Program on the next weekly upload. The case will enter IDS A6020(b) as Status 001 or 002.
  • Close any entities on rejection lists that can be closed without sending the case back to the call site, if information found while researching the case meets IRM closing criteria for return delinquencies.
    See LEM
  • Take the necessary action to move the account to the appropriate team function if, after research, the case is to be rejected to IO, 01, 6020RE.
  • Do not attempt to close the cases on IDS because the system rejected the case from being loaded into the system.
  • (08-01-2001)
    New Account List/Tax Examiner Duties

    1. Actions required vary depending on the type of new account list and what is required to ensure the cases are worked by A6020(b).
      1. New account lists are defined in IRMs and (08-01-2001)
    New Account Centralized Authorized File (CAF) Research List

    1. Research CAF on Corporate Files On Line (CFOL) CC CAFOL or IDRS CC CFINQ .
      Some taxpayers may have more than one representative and may require entry of information on both to different tax periods. At times, only one of the multiple representatives may have the indicator showing eligibility for receiving tax information. (See the input screens in IRM 2.4.11 for input of the CAF name and addresses.)
    2. See Exhibit for additional information regarding input of CAF information into modules on A6020(b).
    3. Specific authorization is displayed if representative has authorization for that particular module. The values of authorization are:
      • A = Attorney
      • B = Certified Public Accountant
      • C = Enrolled Agent
      • D = Officer
      • F = Family Member
      • G = Enrolled Actuary
      • H = Unenrolled Return Preparer
    4. Research and process as follows:
    If Then
    CAF is present RESEARCH to find the CAF and INPUT POA's name, address and phone number on IDS.
    CAF is input CHANGE the Status to 001 if the tax or wage information has not been input.
    INPUT information to the modules CHANGE to Status 019.
    NEW or updated CAF information received UPDATE CAF and input comments to ACS. (08-01-2001)
    New Account S3 Research List

    1. Research ACS comments to determine what information will be used to prepare a 6020(b) return. The listing has space available for wage, taxes, withholding, number of partners, etc.
    2. If comments do not provide information, check the module/(MOD) screen and/or IDRS for LPS data.
    3. Document the information on your listing.
    4. Update the comments with the information used to prepare the delinquent returns.
    5. See LEM
    6. See LEM
    7. See LEM
    8. See LEM (08-01-2001)
    New Account Undelivered Mail List

    1. Move cases to A6020(b) Status 095 if mail is returned undeliverable and follow the actions in the following table.
    If Then
    No new address REASSIGN the case to ACS TO10, 01, UDMAIL
    Mail returned and a new module shown on the New Account Undelivered Mail List 1. Input comments to ACS.
    2. Show research completed.
    3. Show reason for rejection.
    4. Reassign to ACS TO10 , 01, UDMAIL (08-01-2001)
    A6020(b) Tax Examiner Screens

    1. Working in the A6020(b) system is necessary to research and change information in the cases and modules or to change the Status of the entities. Tax Examiners use the majority of the screens for input of information into A6020(b) cases.
    2. Input
      • POA names and addresses for modules with CAF indicators
      • See LEM
    3. Suspend mail-outs if problems are identified prior to packages being mailed by changing the Status codes of the cases to the prior Status.
      The next request for cases to print will re-generate the cases that were suspended and remain in Status 001 or 002. Any change will require a Status code change in the A6020(b) system.
    4. Cases systematically continue through the IDS system if the Status codes are not changed. See Exhibits 5.18.2-4 through 5.18.2-7 to see the A6020(b) screens available for input and review of entity information on IDS.
      • EXHIBIT 5.18.2-5, VIEW OPTION
      • EXHIBIT 5.18.2-6, MODULES OPTION
      • EXHIBIT 5.18.2-8, CAF OPTION
      • EXHIBIT 5.18.2-9, WAGE OPTION
      • EXHIBIT 5.18.2-12, Status OPTION
      • EXHIBIT 5.18.2-13, SCREENS FOR TAX RETURNS 943, 945 AND 1065
      • EXHIBIT 5.18.2-16, Status SCREEN
      • EXHIBIT 5.18.2-17, COMMENTS OPTION (08-01-2001)
    Administrator Menus, Duties, and Screens

    1. The manager or administrator duties include overall control of working the inventory of cases coming into the system, the number of cases to print each week, Letter 1085 package print jobs and system reports. (08-01-2001)
    Administrator Menus and Duties

    1. The system administrator has various menus that need to be changed or information input to reflect local information to the letter 1085 or to request the L-1085 packages to print.
    2. See Exhibits 5.18.2-18 through 5.18.2-24 for the Administrator screens in the A6020(b) program.
    3. Coordinate between the IDS and ACS administrators to ensure weekly downloads from ACS each week.
    4. Assign the review and research on ACS/IDRS of Status 019 cases to ensure the cases meet 6020(b) criteria.
    5. Re-assign cases to the call-site manager if cases are found that do not meet 6020(b) criteria.
    6. Document the A6020(b) program by entering comments for why the case is being returned to the call-site.
    7. Move the case to A6020(b) Status 095. (08-01-2001)
    A6020(b) Administrator Screens

    1. The A6020(b) program allows managers, management designees, or the database administrator to change information on the L-1085, request print jobs, and view or print reports.
    2. Input local information for the L-1085 into the A6020(b) program.
      The service center address, telephone, best time to call and signature information usually remains the same for each week.
    3. Input the date of the letter for each printing of L-1085 packages.
    4. Use the Inventory Management Menu to select the number of cases in inventory for printing, check for mail and Run Auto Update to show the changed Status codes and printing Overage Reports. See Exhibit 5.18.2-18 for an example of the menu.
    5. Queue Form 940, 941 cases for creating an electronic media tape for electronic processing. (Only for entities with Form 940, Form 941 delinquencies).
    6. Use the screens to see the number of cases in Status 019 ready for L-1085 printing, how to change the letter information and how to select the number of letters to print.
    7. The first screen shows the inventory of cases in Status 019 by call-site. Exhibit 5.18.2-19 for an example of the menu.
      This is the first screen of the Queue Cases for Printing selection. The screen shows the number of cases on IDS waiting to start the A6020(b) process for the Letter 1085 package printing.
    8. Select the number of cases you want to print by call site and the date you want to show for the date the letter was mailed . See Exhibit 5.8.2-20 which shows the menu to select the number of 1085 packages to print and enter the date of the letter
      • Ensure the date input allows for reviewing the notices
      • Ensure you allow time for separating notices and preparing the notices for mail-out
    9. Use the Revise Header Menu in Exhibit 5.18.2-21 to revise office and signature information including:
      • Address
      • Phone number
      • Name and title of the signing official
      • Include with the telephone number the best time to call
    10. Run Auto-Update and Overage Report: The Auto-update Report shows cases that have spent the designated number of days required within a specific Status and have now entered a Status which require additional research or contact. The Overage Report shows cases which have been in a particular Status more than the number of days allowed.
    11. Follow these instructions to print any recent output file (including the Mailing Label file-see NOTE below):
      1. Log on to 6020b
      2. Go to #7 "Listings and Reports" on the IDS 6020(b) Main Menu
      3. Go to #4 "Change Default Printer" on the IDS 6020(b) Report Menu. The listing of available printers is displayed and you type in your selection.
      4. Go to #3 "Report Utility" on the IDS 6020(b) Report Menu. The listing of available "stb" reports is displayed and you type in a selection at the "Name of Report" prompt.
      5. The report listing is sent to the specified printer
        See LEM (08-01-2001)
    Administrator Reports

    1. There are several reports that can be generated by the A6020(b) program. The reports show:
      • See LEM
    2. The Report Menu in Exhibit 5.18.2-22 allows printing of management and system reports. The following is a list of the reports. See LEM
    3. See LEM (08-01-2001)
    Database Administrator (DBA) Duties

    1. The database administrator has several duties which are required to:
      1. Keep the information in the database up to date.
      2. Prepare the print tapes for printing of the Letter 1085 packages.
      3. Prepare the print tapes for printing the mail labels.
      4. Print the auto-update and overage reports.
    2. See LEM
    3. The administrator's duties include:
      • See LEM (08-01-2001)
    Follow-up to Responses

    1. Use the tables in the following sections to research follow-up actions to taxpayer response of a signed return, final return, no return due, or return of unsigned Letter 1085 package.
      Follow the Unauthorized Access (UNAX) guidelines when conducting your work. (08-01-2001)
    Processing Returns Received

    1. Mark returns in the left column by vertically inputting TC 599 closing code 39 per the following table.
    If Then
    Taxpayer signs the 6020(b) returns 1. Process after marking the returns with TC 599 cc39.
    2. Input TC 599cc39 "BB" on IDRS.
    3. Submit returns for processing.
    4. Update ACS Comments.
    Taxpayer corrects the 6020(b) returns or submits original returns 1. Process after marking the returns with TC 599 cc39.
    2. Input TC 599 cc39 "BB" on IDRS.
    3. Submit returns for processing.
    4. Update ACS Comments.
  • Move the case within A6020(b) by changing the Status code to the Status code that applies to the situation or return received. Possible changes to the Status code are Status codes:
    • 513
    • 514
    • 523
    • 524
    Status code 5XX causes a systematic change of the Status code to 026. Status code 026 allows time for the return to be processed and assessed.
  • (08-01-2001)
    Final Return Received

    1. To respond to receipt of a final return follow IRM 5.19.7 procedures for processing final returns.
    2. Use CC FRM 49 to Input the return to IDRS.
    3. Use TC 591 cc38 to close all remaining modules of the MFT on the delinquency.
    4. Resolve credits per IRM 5.19.2.
    5. Move any modules with due dates after the final return received to IDS Status 097. Include comments on ACS as documentation for the closures. (08-01-2001)
    Unsigned Returns Received

    1. If the taxpayer returns the 6020(b) returns unsigned with no letter assume no further correspondence is being sent. By-pass time remaining for the taxpayer's response and process the case as follows:
      1. Change A6020(b) Status code to 022 for pre-assessment research.
      2. Research each tax period to ensure there are no assessments or comments on IDS to stop return submission.
      3. Bypass requirement to print second copies of the returns by changing Status to 026.
      4. Prepare the returns inputting TC599 cc38. Obtain the manager's signature on each return.
      5. Submit returns for processing. (08-01-2001)
    Not Liable for Returns

    1. If the taxpayer states that the entity is not liable to file the return, or if the entity is out of business, follow the table in IRM
    2. Change the modules with no delinquent return due in the A6020(b) program to Status code 097.
    3. Include the reason for discontinuing the 6020(b) (e.g., the date the business closed, the date the business last had employees, etc.). (08-01-2001)
    Inquiries and Responses

    1. Follow the instructions in the following table for taxpayer inquires and responses.
    If Then
    Inquiry is by phone or in writing 1. Verify EIN and entity information with IDRS and ACS information.
    2. Analyze correspondence for a new address, telephone number and levy sources.
    3. Update ACS Comments.
    Inquiry is new address or address correction from taxpayer INPUT address change to IDRS. Use cc ENREQ.
    Inquiry is telephone number(s) and/or Levy Sources. 1. INPUT telephone number(s) to IDRS. Use cc TELEA .
    2. INPUT telephone number(s) to ACS Entity Screen in the appropriate fields.
    3. Input Levy Sources on ACS and IDRS Levy Screens.
  • The instructions in the following tables contain actions to take in regard to taxpayer inquires and responses when the business:
    • Closed
    • Is not liable to file returns
    • Previously filed
    • Filed under another number
    • Contains information to prepare the return
    • Will file the delinquent return
    • Requests we work with a POA
  • Taxpayer Responses
    If Then
    Inquiry results in levy sources 1. Input levy source to IDRS. (cc LEVYE).
    2. Update the ACS levy screen.
    Correspondence includes a delinquent return 1. Verify address, EIN, MFT and tax period on ACS as well as IDRS.
    2. Input ACS comments.
    3. Code return with TC599 cc39 in margin.
    4. Input TC599 cc39 to IDRS using CC FRM49 5. Forward return for processing.
    A final return 1. Follow steps above including writing "Final" on the return.
    2. Analyze for ability to close other MFTs and tax periods.
    3. Resolve any credit balance on account per IRM
    4. Input TC591 cc 38 to the first subsequent period after the final return. Move any modules with due dates after the Final Return to Status 097 on IDS and update ACS.
    Taxpayer is Out of Business
    If And Then
    Correspondence indicates the taxpayer is out of business No date is provided 1. Send ACS LT14 to request taxpayer provide specific date.
    2. Input ACS comments.
    3. Destroy correspondence.
    Correspondence indicates the taxpayer is out of business Date provided is prior to earliest TDI period 1. Input ACS comments.
    2. Destroy correspondence.
    3. Input TC 591 cc 25 on IDRS using FRM49 on the earliest tax period for each applicable MFT.
    4. Resolve any credits per IRM
    Correspondence indicates the business closed Closure date is after the earliest TDI period 1. Input TC 591 cc 38 on IDRS using FRM49 on the TDI period subsequent to the quarter taxpayer went out of business.
    2. Resolve any credits on those periods per IRM
    3. Inform the taxpayer he remains liable for returns due prior to closing. (See example below) Send LT14
    4. Input comments on ACS.
    5. Destroy correspondence.
    For example: the taxpayer has open TDIs for Form 941 quarters 199512 through 199612 and Form 940 for period ending 199512 and 199612 The taxpayer states he went out of business on December 30, 1995 The taxpayer is still liable for the quarterly 941 for 199512 and the 940 for period ending 199512.
    1. INPUT TC 591 cc 38 on the Form 941/199603 quarter and the Form 940 for the period ending 199612.
    2. Inform the taxpayer that he/she is still liable for the Forms 941 and 940 for the period ending 199512.
    Taxpayer not liable to file Taxpayer will not be liable to file in the future 1. Verify EIN, MFT and tax period on ACS and IDRS.
    2. Input TC 591 cc 38 to IDRS (CC FRM49.) To the earliest tax period for each MFT.
    3. Resolve any credit balance on the account per IRM Examine other open MFT filing requirements to see if they can be satisfied or closed as final.
    4. Input ACS Comments.
    Taxpayer is not liable to file Taxpayer will be liable to file future returns. 1. Verify EIN, MFT and Tax Period on ACS and IDRS.
    2. Input TC590 cc 38 to IDRS using CC FRM49 on each not liable period.
    3. Resolve any credit balance on the account per IRM5.
    4. Input comments to ACs.
    Taxpayer previously filed the return(s) IDRS indicates return(s) filed 1. Update ACS comments to show return(s) have been filed.
    2. If manual processing, pull and destroy the related returns that have posted from the 6020(b) Package Return Pending File.
    Taxpayer previously filed the return IDRS indicates an open TDI 1. Research CC EINAD for all possible name lines to determine if there are multiple EINs for the taxpayer. Input ACS Comments.
    2. Tell taxpayer to submit a copy of the return with an original signature (via telephone or C Letter). Transfer to call site contact Function.
    Taxpayer indicates delinquent returns were filed Taxpayer shows a different EIN Research both EINs on IDRS.
    Filed under a different EIN or Taxpayer gives a different EIN. SUMRY (IDRS) shows no data available 1. Check INOLE for any open filing requirement.
    2. Request MFTRA on both EINs to verify returns were filed.
    Filed return(s) under a different EIN SUMRY/MFTRA research shows the returns were filed as indicated 1. Close the filing requirement on the incorrect EIN using TC 591 cc 38.
    2. Resolve any credit balances per IRM
    3. Update ACS comments to show action.
    4. Contact taxpayer to inform of case resolution.
    Research is completed Research does not resolve EIN discrepancy Input ACS comments to document research actions. Reassign TO, IO, 01, 6020 REJ.
    Research indicates returns not filed under either EIN Research is completed 1. Reassign case TOI0, 01, 6020 REJ.
    2. Update ACS comments to show research completed.
    Liable for filing the tax return Response includes information to complete a return 1. Prepare a return based on taxpayer figures. Note: Input "taxpayer provided information" on center of return top margin.
    2. Input comments on ACS that the assessment has been prepared using taxpayer's information.
    3. Mail return and appropriate letter telling the taxpayer to sign and file return within 10 days.
    Tax return is prepared using information from the taxpayer. Return is not filed within the suspense period Process the return as a 6020(b) return based on taxpayer figures.
    Contact made with the taxpayer. Taxpayer promises to file delinquent return(s). 1. Input ACS comments.
    2. Advise taxpayer that if the return(s) are not received by deadline, the 6020(b) return(s) will be processed.
    3. Leave case in appropriate 6020(b) suspense inventory.
    Correspondence or contact made with the taxpayer Contact is not sufficient to resolve delinquency. 1. Input ACS comments.
    2. Contact taxpayer and acknowledge response.
    3. Request information or return(s) necessary to close the case.
    4. Advise taxpayer that 6020(b) process will continue.
    5. Leave case in appropriate 6020(b) suspense inventory.
    Another person is authorized to act for him/her--Power of Attorney (POA ) Form 2848 is attached 1. Input POA information in NOTES on ACS.
    2. Route POA Form 2848 to be processed.
    3. Respond to the taxpayer or POA as necessary with LT14.
    Taxpayer gives us information that a POA has authority to resolve the matter No Form 2848 is attached 1. Research IDRS cc CFINQ to determine if POA is on CAF file.
    2. Input ACS comments.
    3. Advise taxpayer to file POA Form 2848 and that the 6020(b) process will continue. (08-01-2001)
    Undelivered Mail

    1. A6020(b) does not accept new cases with an undelivered mail indicator. These show on a rejection list.
    2. Assign the case to the call site by changing the assignment from S-3 or S-6 to TOI0 if new address information is not available. Input comments "UD Indicator Present" . (08-01-2001)
    Undelivered Mail System (UMS)

    1. ACS support TEs, do not work the UMS Program. Undelivered mail is processed in the Undelivered Mail System (UMS).
    2. Enter appropriate taxpayer information from the undelivered letter and destroy.
    3. Do not upload comments to ACS. UMS completes upload.
    4. Change inventory code on ACS from S-3 or S-6 to TOI0.
    5. Change the Status code to 095 if the case received an undeliverable mail indicator while in A6020(b).
    6. UMS researches for new address. (08-01-2001)
    No Response Follow-up, Taxpayer Unagreed 6020(b) Processing

    1. Cases move to Status 022 after 60 days (105 days if the letter is addressed outside the United States) have elapsed after mailing of the Letter 1085 package. A listing prints showing entities to research.
    2. Use this listing to research ACS and IDRS for taxpayer responses to the Letter 1085.
      • Modules will remain in Status 022 until they are manually moved
      • Cases in Status 022 after 21 days will be listed on an overage list
    3. Research IDRS to determine if returns are posting. ACS may show additional taxpayer contacts.
    4. Move researched modules that are ready for printing of returns for assessment into Status 023. (08-01-2001)
    IDRS Research on 6020(b) Accounts

    1. Determine if the modules are still open, if there are any reasons not to go forward with 6020(b) assessment, and what action is needed.
    2. Verify that all modules are still delinquent. Compare IDRS to IDS.
    3. Research EINAD for possible EINs. Use CC SUMRY to verify the modules are in ACS and not assigned to another function. If the entity has been reassigned, follow the procedures for moving modules or accounts to IDS Status 097.
    4. See LEM
    5. See LEM (08-01-2001)
    Processing 6020(b) Returns

    1. When the case is assigned to Status 023, it automatically goes to 025 and returns print. Each tax return prints with the required statement: "Prepared Under the Authority of IRC 6020(b)."
    2. Prepare returns for processing by:
      • Writing vertically on the side of the return: TC 599 cc38
      • Having return signed by a GS-9 manager or above
      A signature stamp or electronic signature is acceptable.
    3. Input into the comments section of ACS and A6020(b) a general note including the date the 6020(b) returns were submitted for assessment and a follow-up date.
    4. Cases in Status 025 more than 75 days appear on a research listing to determine if the assessment posted. Use listing as a check-list and for research comments.
      See LEM (08-01-2001)
    Late Responses Received After 6020(b) Returns Processed

    1. "Late responses" are returns and/or correspondence received after the 6020(b) returns have been processed.
    2. Take the following actions:
      1. Verify EIN, entity and tax period.
      2. Analyze response for new address, telephone number and levy sources and input new information to IDRS.
      3. Adjust account, if appropriate;
      4. Input comments and new information if account is still on ACS.
      5. If a Form 3870 (Request for Adjustment) is received from the district office, adjust the account as requested. (08-01-2001)
    Research Table for Late Responses

    1. Use the following table as a guide when late responses are received.
    If the Late Response And Then
    CONTAINS an unprocessed signed return 6020(b) EIN is correct and the return has posted. 1. ADJUST TC 150 amount per taxpayer figure.
    2. ASSESS TC 270 on corrected tax amount from due date of the return per IRM 5.5.9.
    3. ADJUST TC186
    4. USE taxpayer's return for the adjustment source document
    5. INPUT TC 560 using IDRS REQ77 per IRM 5.5.7 to change the Assessment Statute Expiration Date (ASED) date.
    6. Input 59939 BB on IDRS.
    REVEALS taxpayer's return has been processed The IRC 6020(b) EIN is correct 1. Adjust IRC 6020(b) assessment. Use correspondence or return as the source document.
    CONTAINS taxpayer's unprocessed signed return(s) 6020(b) EIN incorrect and return has posted 1. ABATE entire 6020(b) assessment under incorrect EIN.
    2. INPUT TC 971 per IRM 5.5.1. Use a copy of the return as a source document.
    3. DELETE filing requirements of incorrect EIN using TC 591 cc 38.
    4. PROCESS return(s) under correct EIN.
    CONTAINS taxpayer's unprocessed signed return(s) The IRC 6020(b) return(s) have been sent for assessment but not posted 1. ESTABLISH control base.
    2. When the IRC 6020(b) returns post, ADJUST the tax and penalties as stated above under taxpayer's response/posted return.
    3. ATTACH copies of the correspondence as the source document for each module.
    STATES taxpayer is not liable for 6020(b) assessment(s) MAY be liable for future returns 1. ABATE IRC 6020(b) assessment and use correspondence as the source document for each module.
    2. INPUT TC 590 CC 38 to close each module.
    States taxpayer is not liable for 6020(b) assessment(s). NOT liable for future returns 1. FOLLOW steps above to abate entire assessment.
    2. INPUT TC591 cc38.
    INCLUDES a request for an installment agreement IRC 6020(b) assessment has been processed but not yet posted SEND letter advising taxpayer of following:
    1. FINAL processing of the amount is incomplete.
    2. SUBMIT installment plan request after first notice of assessment is received.
    3. MAKE payments to minimize penalty and interest.
    4. DESTROY correspondence. (08-01-2001)
    Manual 6020(b) Procedures

    1. The manual procedures will be used in the event the A6020(b) program is not available for 6020(b) return processing. Manual instructions contain the same referral criteria of cases from ACS as well as apply to the same BMF tax returns.
    2. See IRM for the BMF returns subject to 6020(b) processing. (08-01-2001)
    Basis of Tax for 6020(b) Modules

    1. The basis of the 6020(b) tax assessment is the amount of wages or tax liability secured from contact with nonfiler.
      Document the A6020(b) module history as to the method used and basis for the tax for all cases not using Last Period Satisfied (LPS) wage or tax as the basis.
    2. Use the following to calculate the total amount of the wages or tax per quarter if you do not have the total monthly wage amount: See LEM
    3. See LEM
    4. See LEM
    5. See LEM (08-01-2001)
    6020(b) Packages

    1. Employment and excise tax returns are prepared in sets with each set containing an original and one copy.
    2. Keep the copy of each original in the IRC 6020(b) return pending file.
      Show the following statement below the signature area of both returns: "This return was prepared and executed under the authority of IRC 6020(b)." The statement identifies the origin of the returns if they are erroneously received in other SC functions.
    3. Include the following items as part of the 6020(b) package:
      • Letter 1085 (ACS) addressed to the taxpayer (and a second Letter 1085 to the POA)
      • An original return for each proposed IRC 6020(b) assessment
    4. Input ACS history code OADT, 45, 1085(ACS) or 1616(ACS ) and show tax periods mailed in the comments. (08-01-2001)
    Review Before Mailing

    1. The unit manager reviews proposed packages prior to mailing for:
      • Mathematical and technical errors
      • The proper wage and tax figures
    2. Forward the package for mailing. (08-01-2001)
    Cases With Power of Attorney (POA) Indicators

    1. Prepare a second Letter 1085 package if a case shows a POA on file (CAF).
    2. Send original Letter 1085(ACS) and prepared returns to the taxpayer.
    3. Send copies to the representative for only the MFT and tax periods the POA covers.
    4. Retain one copy of the letter and original tax return for each proposed assessment period in the IRC 6020(b) return pending file. (08-01-2001)
    6020(b) Follow-Up

    1. Review and research the case if it is still in inventory after 60 days (105 days if addressed outside the U.S.). Use instructions in IRM
    2. Remove the copy of the prepared returns and the Letter 1085(ACS) from the IRC 6020(b) return pending file.
    3. Review ACS to see if the taxpayer has responded with information to close the case or if the return should be processed. (08-01-2001)
    6020(b) Return Processing

    1. Route the return to the unit manager for review and signature.
    2. Input on IDRS the TC 599 cc 38 for each period.
    3. Attach the letter to the return for the oldest period involved and forward the returns for processing.
    4. Input OADT, 28, 6020(b) to allow time for the modules to drop off ACS if all modules are satisfied on the account.
    5. Enter TOI9 (TOI9, 28, NEWMOD) if there are TDI modules remaining (modules not included in the IRC 6020(b) package)
    6. Transfer TO I7, then, Enter TFQU if there are only non-IRC 6020(b); (e.g., Form 1120) modules in Sn. (08-01-2001)
    Manual Processing: Return Pending File

    1. Maintain a file of manually prepared returns with corresponding Letters 1085 (ACS) pending taxpayer response.
    2. Attach a copy of the applicable letter to the oldest return in the IRC 6020(b) processing package.
    3. File the returns in alpha or TIN order by response date of the letter.
    4. Purge this file upon receipt of responses or other documents and/or at the conclusion of the 70 day suspense period.
    5. Exhibit 5.18.2-1 (08-01-2001)
      Internal Revenue Code 6020(B) Processing Flowchart

    Exhibit 5.18.2-2 (08-01-2001)
    Contents of the Generic Status Research Listing

    Research Listings contain the following elements:
    Taxpayer Identification Number
    Name Control
    Master File Tax Code (MFT)
    Period - Tax Periods or Modules
    Date - Date of the Listing
    Function Unit - Inventory Assignment Code
    Dollars Proposed for Assessment
    Wage Computation Method (LPS - Last Period Satisfied, C - Credit, W - Wages, N - None)

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    A6020(b) Status Codes
    Status Definition Follow-up
    Systematic Change To Next Status Next Status
    001 Pre-Assessment Research ACS, IDRS/ICS Research Inventory A new case list shows new cases each week. Overage list in 30 days. No

    Manual change is required

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    The cases coming into Inventory for the first time are systematically listed on "S3 New Case Listing." An over-age report generates listing cases that remain in S3 inventory over 30 days. Cases in S3 may not meet the criteria for using the LPS tax or wage amount. S3 indicates that the taxpayer has been contacted and some information has been provided that is more up to date regarding wages, employees or tax liability. All S3 accounts will have to be researched on ACS or IDRS to determine what information has been provided. The information is then added to the module screens and the status changed according to the information available. Cases can be sent to a holding status, assessment status, or closed status from this status code.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    002 New S-6 Account, meets 1085 eligibility 00

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    Inventory from ACS S-6 is systemically loaded into A6020(b) and placed in status 002. The Form 940 and Form 941 status 002 cases automatically transfer to status 019 as the information from the last return filed is being used for the 6020(b). Cause with returns that need information manually input will stay in Status 002 until information is input and the case must be updated to status 019.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    005 Cases Not On ACS Download 21 Yes

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    Cases not on ACS need research to see if an error occurred.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    006 Case No Longer On ACS 30 No 019/095/097

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    Status 006 is a non-systemic "hold" area. Cases are manually placed in status 006 and have no specific criteria. Generally status 006 will be cases from status 001 which need additional research or waiting for additional information. Status 006 may be used as an alternative to leaving cases that have already been reviewed in status 001.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    The use of status 006 will allow status 001 to contain only the cases that were not previously reviewed or researched. Use of status 006 is not mandatory but may be helpful in managing the inventory. An overage report lists accounts that remain in status 006 more than thirty days.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    010 Centralized Authorization File (CAF) Indicator-Manual Input 30 No 001/019/095/097

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    The system will assign all cases with a CAF Indicator to status 010. A listing of the new status 010 cases prints with the weekly ACS download. An overage report will generate if cases remain in 010 over 30 days. The power-of-attorney address must be input before reassigning the case to 019.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    019 Ready for 1085 Preparation-Account ready for manager to select for printing. An overage report can be generated showing cases that have been in status 019 for over 30 days. Yes
    (after print request)



    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    Inventory in 019 is available for selection and the start of the 6020(b) process. The 019 list should be reviewed to ensure the cases meet A6020(b) criteria before requesting the printing of Letter 1085 packages. The case may reside in status 019 and require suspension of the printing of returns if there are problems or other unforeseen circumstances. The status 019 has the capability of being manually changed to 006, 095, or 097.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    020 1085 Package Request 00 Yes, if printed.



    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    If there is a printer problem requiring the request to be resubmitted, the status can be changed to 019. Assignment to status 020 causes the packages to automatically be printed by sending it to 021. New modules will no associate to a case once the case reaches status 020.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    021 Letter 1085 Package Generated 45

    Within 45 days



    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    1. Updated ACS with comments that the Letter 1085 packages were printed and mailed.
    2. If the taxpayer responds with information that supports that a return is not required, the case can be suspended or closed. After 45 days (from the date of the Letter 1085) the case systemically changes to 0222.

    Exhibit 5.18.2-3 (08-01-2001)
    A6020(B) Status Codes

    Exhibit 5.18.2-4 (08-01-2001)
    View and Update Screen

    Exhibit 5.18.2-5 (08-01-2001)
    View Option

    Exhibit 5.18.2-6 (08-01-2001)
    Modules Option

    Exhibit 5.18.2-7 (08-01-2001)
    Next Module Option

    Exhibit 5.18.2-8 (08-01-2001)
    CAF Option

    Exhibit 5.18.2-9 (08-01-2001)
    Wage Option

    Exhibit 5.18.2-10 (08-01-2001)
    Review, Input, or Update Wage Option

    Exhibit 5.18.2-11 (08-01-2001)
    Using the Update Option

    Exhibit 5.18.2-12 (08-01-2001)
    Status Option

    Exhibit 5.18.2-13 (08-01-2001)
    Screens for Tax Returns 943 and 1065

    Exhibit 5.18.2-14 (08-01-2001)
    Screen for Changing the Status of All Modules

    Exhibit 5.18.2-15 (08-01-2001)
    Screen for Changing the Status of One Module

    Exhibit 5.18.2-16 (08-01-2001)
    Status Screen

    Exhibit 5.18.2-17 (08-01-2001)
    Comments Option

    Exhibit 5.18.2-18 (08-01-2001)
    6020(B) Inventory Management Menu

    Exhibit 5.18.2-19 (08-01-2001)
    Queue Cases for Printing Menu

    Exhibit 5.18.2-20 (08-01-2001)
    Number of 1085 Packages Ready to be Printed

    Exhibit 5.18.2-21 (08-01-2001)
    Revise Header Menu

    Exhibit 5.18.2-22 (08-01-2001)
    IDS 6020(B) Report Menu

    Exhibit 5.18.2-23 (08-01-2001)
    IDS Print Menu

    Exhibit 5.18.2-24 (08-01-2001)
    DBA Menu

    See LEM 5.18.2.

    Internal Revenue Manual

    Part 5 Collecting Process Chap. 18 Liability Determination Sec. 2 Business Returns IRC 6020(b) Processing