BobKamman
Level 15
‎08-22-2020 04:15 PM

Here are just a few excerpts from the Internal Revenue Manual that describe processing of amended returns.  A practitioner has no way of knowing whether the original return meets certain criteria, like:  Are the adjustments greater than the amounts allowed without examination?  Has the return already been identified as one with Exam potential?  Has a CP-2000 issue already been identified?  Is there evidence of identity theft?  

3.11.6.4.9.1 (09-24-2019)
Category A (CAT-A) Criteria

  1. To determine whether a return meets Category A (CAT-A) criteria, see Examination Criteria (CAT-A) - General and Examination Criteria (CAT-A) - Credits.

    Note: 

    Unless otherwise specified, the dollar amounts cited refer to the amount of the tax decrease or credit increase whether or not the claim results in a refund or a decrease to the balance due.

  2. Do not apply CAT-A criteria to:

    • Combat Zone returns when the TP is actively serving in a Combat Zone. See IRM 3.11.6.4.22

    • CP notices

    • Credits that are being disallowed

    • Credits that are being reduced below the CAT-A tolerance due to Masterfile or Math verification

  3. For CC DDBCK CAT-A criteria, see IRM 3.11.6.8.1.

  4. When EIC is increasing and Schedule C meets CAT-A criteria input CC DDBCK prior to referring the case to CAT-A. If the CC DDBCK validation results screen shows the case as "Selected," refer the case to Exam using the "Selected" cover sheet. Otherwise refer the case as CAT-A for the Schedule C.

  5. If the case is being forwarded to CAT-A, do not input a TC 971 AC 013.

  6. Once identified, these cases will be placed in a special sort identified as CAT-A and the issue will be identified by checking a box as to its category on a summary sheet. These will be expedited, per local procedure, to CIS/AM for disposition to Exam.

3.11.6.4.9.2 (03-28-2019)
Exam/-L Freeze Claim Processing

  1. Accounts with a -L freeze indicate an account has been selected for a potential audit. Since not all cases with a -L freeze will be audited, processing procedures differ based on the Audit Information Management System (AIMS) status.

  2. If an -L freeze is present, use CC AMDISA to determine the AIMS status. The AIMS status will determine the current status of the potential audit.

    Note: 

    If there is an open IDRS control base to CI-SDC, continue to follow processing procedures outlined in IRM 3.11.6.4.8.

  3. For accounts with a -L freeze and the AIMS status is 08 or less:

    • If the claim meets CAT-A criteria, per IRM 3.11.6.4.9.1 route the case to CAT-A per local procedures.

    • If the claim does not meet CAT-A criteria, process the claim following normal processing procedures. Do not forward the case to Exam.

  4. For accounts with a -L freeze and the AIMS status is greater than 08:

    Exception: 

    If the AIMS status is 90 indicating a closed audit or there is a pending TC 300 - 361, refer the case to CIS/AM.

    Exception: 

    Whether identified through an open control base or CC AMDISA, amended returns should not be routed to Appeals, IDRS number 66XXX, route to CIS/AM.

    • Input a TC 971 AC 013 and use the received date of the amended return for the transaction date

      Exception: 

      On CC DDBCK "Selected" cases, IDRS will automatically input the TC 971 AC 013 when a TC 971 AC 010 is not present.