Source: http://www.irs.gov/irm/part13/irm_13-001-002.html
Timestamp: 2013-06-18 21:57:03
Document Index: 375784670

Matched Legal Cases: ['art 13', '§ 1203', '§ 3705', '§ 7803', '§ 1102', '§ 3417', '§ 7602', '§ 7602', '§ 7602', '§ 7602', '§ 7602', '§ 7602']

Internal Revenue Manual - 13.1.2 Internal Revenue Service Restructuring and Reform Act of 1998 (RRA98) Part 13. Taxpayer Advocate Service
Section 2. Internal Revenue Service Restructuring and Reform Act of 1998 (RRA98) 13.1.2 Internal Revenue Service Restructuring and Reform Act of 1998 (RRA98) 13.1.2.1
Background of RRA98
Highlights of RRA98
Implementation of RRA98 Provisions in Taxpayer Advocate Service 13.1.2.4
(1) This transmits revised IRM 13.1.2, Taxpayer Advocate Case Procedures, Internal Revenue Service Restructuring and Reform Act of 1998 (RRA98).
(1) Editorial Update - Formatting, clarification and revision date changes were made throughout the document. (2) Editorial Update - 13.1.2.4.1(2) i) Added link for TAS Third party Contact Coordinator. Effect on Other Documents
This revision supersedes IRM 13.1.2, dated January 27,2009. Audience
Primarily Taxpayer Advocate Service and Operating Divisions and Functions.
13.1.2.1 (01-27-2009)Background of RRA98
The Internal Revenue Service Restructuring and Reform Act of 1998 (RRA98) became law when the President signed the legislation
on July 22, 1998. This new law ushered in dramatic changes in tax law as well as in the structure and functioning of the Internal
Revenue Service. The changes affecting the IRS focus mainly on improving customer service and expanding taxpayer rights. 13.1.2.2 (03-16-2012)Highlights of RRA98
RRA98 provides tax relief, such as: Reduction of the long term capital gains holding period;
Education incentives;
Principal residence gain exclusions;
EIC expansion;
New IRAs; and
Estate & Gift provisions.
Other RRA98 provisions provide expanded rights or privileges in areas such as: Interest calculations for taxes and refunds;
Liens, levies, seizures;
Tip reporting;
Offers in compromise & installment agreements;
New "Due Process"
More inclusive innocent spouse provisions; and Third party summonses.
RRA98 provisions that affect all or many IRS employees are: An Oversight Board will oversee certain IRS plans and practices;
New disciplinary provisions for employee misconduct. (See IRM 13.1.15 , Customer Complaints/RRA98 § 1203 Procedures);
IRS to be reorganized into business operating units;
New rules for making third party contacts;
New rules for employees identifying themselves to taxpayers; and
Statutory Notices of Deficiency (90-day letters) are required to inform taxpayers of their rights to contact a local TAS office
as well as the location and phone number of the appropriate office.
RRA98 provisions that affect National Taxpayer Advocate Service employees: Direct reporting of Taxpayer Advocate Service (TAS) employees to the National Taxpayer Advocate (NTA);
New hardship criteria for TAS cases ; and
Statement on organizational independence and disclosure provisions. 13.1.2.3 (01-27-2009)Implementation of RRA98 Provisions in Taxpayer Advocate Service The following sections contain guidance to TAS on how to implement specific provisions of RRA98.
13.1.2.3.1 (01-27-2009)Identify Yourself
RRA98 § 3705 requires all employees to identify themselves upon initially contacting a taxpayer or representative. The first
opportunity for Taxpayer Advocate Service employees to identify themselves will occur when they initially make telephone contact
with their customers to clarify case issues and provide the customer with planned actions.
Immediately upon telephone contact, tell the taxpayer or representative your name, your job title and your unique employee
identification number. If you do not make telephone contact, your initial letter to the customer must contain the above identifying
This will satisfy the requirements of this section of the law.
13.1.2.3.2 (01-27-2009)Inform Taxpayer Of Taxpayer Advocate Service (TAS) Independence IRC § 7803(c) requires TAS employees to inform customers of the independence of the Taxpayer Advocate Service and the reporting
requirements to Congress through the National Taxpayer Advocate. At an appropriate time during the initial telephone contact,
make the following statement (or something similar): "The Taxpayer Advocate Service organization operates independently of any other Internal Revenue Service office and reports
directly to Congress through the National Taxpayer Advocate. This independence allows us to work more effectively as advocates
for taxpayers. "
If telephone contact is not made, this statement of independence must be included in written correspondence to the customer.
IRC 7803(c)(4)(A)(iv) states TAS may, at the discretion of the Local Taxpayer Advocate, not disclose to the IRS contact with,
or information provided by, such taxpayer.
13.1.2.3.3 (01-27-2009)Significant Hardship
RRA98 expanded the circumstances under which a Taxpayer Assistance Order (TAO) may be issued. The Amendment provided that
a "significant hardship"
is deemed to occur if one of the four factors exists: An immediate threat of adverse action;
A delay of more than 30 days in resolving the taxpayer's account problems; The incurring by the taxpayer of significant costs (including fees for professional representation) if relief is not granted;
The IRS RRA98 § 1102(c), amended the definition of "significant hardship"
to include a "delay of more than 30 days in resolving taxpayer account problems."
13.1.2.4 (03-16-2012)Third Party Contacts
RRA98 § 3417 and IRC § 7602(c) specify requirements when third party contacts will be made in connection with working a case. Basically, IRS employees are
prohibited from contacting persons other than the taxpayer about the collection or determination of a tax without first giving
the taxpayer reasonable notice that such contacts may be made. Refer to the following IRM sections for additional information:
IRM 11.3.3, Disclosure to Designee and Practitioner;
IRM 11.3.3.2, Disclosure to Third Parties Based upon Taxpayer Regulations; or
IRM 5.1.17, Third-Party Contact.
IRC § 7602(c)(3)(C) specifically exempts Criminal Investigation from the requirements when such third party contacts are made
during an investigative contact. For more information on third party contacts when a case is in Criminal Investigation see
the above IRM sections. Examples of third party contacts are the following: Generally, when an employee or an agent of the IRS contacts a person other than the taxpayer and asks questions about a specific
taxpayer with respect to the determination or collection of that taxpayer's federal tax liability, a third party contact has
been made. This definition also includes issuance of a levy or a summons to someone other than the taxpayer.
Contacts with government officials, including contacts made with officials of foreign governments, are also included in this
definition, except as noted below. When in doubt as to whether a particular contact falls within the requirements of section
7602(c), discuss with your manager, lead case advocate or technical advisor. The following types of contact ARE NOT considered third party contacts: Searches made on computer databases that do not require any kind of personal involvement at the other end (e.g., LEXIS-NEXIS,
Information America);
Contacts made with government officials to obtain information that is available to the public, i.e., contacting the Postal
Service to obtain a taxpayer's current address;
Information received from a third party where the third party initiated the contact;
Information that the United States exchanges in routine or spontaneous exchange programs with a foreign country pursuant to
an exchange of information clause in a tax convention between the United States and that foreign country or with a United
States possession pursuant to an exchange of information clause in a coordinating agreement between the United States and
that possession; Exchanges of information via tape programs such as the State Income Tax Levy Program (SITLP) and the Federal Payment Levy
Program (FPLP);
Contacts with individuals who have a valid Power of Attorney for the taxpayer; Contacts made for the purpose of obtaining information regarding an industry or market segment where specific taxpayers have
not yet been identified;
Contacts made by IRS employees during litigation if the contact relates to a matter and issue being litigated;
Contacts made with other IRS employees, including employees of the Office of Chief Counsel, acting within the scope of an
employee's official duties; or
Contacts made as the result of unsolicited requests for payoff of a Notice of Federal Tax Lien or to respond to requests for
information regarding the priority of a lien.
IRS employees must comply with all disclosure laws. Even though a contact may be excepted from IRC § 7602(c)( third party
contact requirements); disclosure laws do apply in all situations.
Contacts made via three-way calling with the taxpayer on the line are excepted from the requirements of IRC § 7602(c) because
taxpayer authorization is implicit in this situation.
Under IRC § 7602(c)(3)(A), contacts that the taxpayer has authorized are excepted from the notice and record keeping requirements
of IRC § 7602(c).
Refer to IRM 13.1.10.3, Disclosure Issues and Taxpayer Authentication for specific disclosure and taxpayer authentication procedures while working a TAS case.
13.1.2.4.1 (03-16-2012)Advance General Notification Requirement When a Case Advocate makes a determination to contact any third party (e.g., employer or property owner), the Case Advocate
should review the case file to determine if the taxpayer has received the required notification. Effective May 16, 2005, Publication
1, Your Rights as a Taxpayer, Rev. 05/2005, contains guidance on the advance notification of potential third party contact. Since the IRS includes Publication
1 with the first Master File (MF), Delinquent Return (Del Ret) or Non Master File (NMF) notice, the taxpayer has received
notification, in most cases. Additionally, if the taxpayer signed Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order, ATAO) Rev. 5-2011 (or prior revisions), then the notice and record keeping requirements of section 7602(c) do not apply. The taxpayer
can also provide oral authorization. If TAS cannot determine if the taxpayer has authorized third party contact, then the Case Advocate should prepare Letter 3164J
(DO), Taxpayer Advocate Third Party Contact Letter , or Letter 3164J(DO/SP), (Taxpayer Advocate) Third Party Contact Letter Spanish version, and
Provide the letter to the taxpayer either in person, by mail to the taxpayer's address of record or by fax.
Include the TAS employee's telephone number and unique identification number on the letter.
In a joint filing situation, a separate letter must be provided to each spouse.
If the letter is handed to the taxpayer, then third party contacts can begin immediately. However, the taxpayer should be
given the opportunity to provide the needed information before third parties are contacted.
If the letter is mailed to the taxpayer's address of record, then wait 10 calendar days for delivery of the letter prior to making any third party contacts. Letter 3164J must be mailed to the master file address
even if the mail has been returned as undeliverable. Subsequently, if a new address for the taxpayer is located and the employee
has taken the appropriate steps to update the Master File to reflect this new address, then mail Letter 3164J, TAS Third Party Contact Letter to new address
If Letter 3164J, TAS Third Party Contact letter is faxed to the taxpayer, follow the requirements below:
Verify the taxpayer's identity
Verify the taxpayer has approved the use of faxing
Verify the taxpayer is aware of the security limitations of faxing
Verify the fax is not being sent to a third party fax machine (if the fax is being sent to third party fax machine, refer
to IRM 11.3.1.11, Introduction to Disclosure for additional guidance), and
Allow 4 calendar days for receipt of the fax prior to making any third party contacts
Provide a copy of the Letter 3164J(Taxpayer Advocate) Third Party Contact letter to the power of attorney, unless the power is not authorized to receive communications or notices.
Document the case file with the date and method of service of Letter 3164J(Taxpayer Advocate) Third Party Contact letter
Complete Form 12175, Third Party Contact Report Form, to record the third party contact and send it to the TAS Third Party
Coordinator as soon as possible after the contact is made. The TAS's Coordinator can be found at: http://tas.web.irs.gov/policy/caseprocess/techupdates/11038.aspx
Questions regarding Third Party Contacts should be discussed with your manager, Lead Case Advocate or Technical Advisor not
directed to the Third Party Coordinator.
Document TAMIS with ALL actions taken