Popular search terms:

MSP #14: Audit Notices

The IRS’s Failure to Include Employee Contact Information on Audit Notices Impedes Case Resolution and Erodes Employee Accountability

TAS Recommendations and IRS Responses

1
1.

TAS RECOMMENDATION #14-1

All audit notices and correspondence currently sent to taxpayers, including those generated by Examination software, should be reviewed to ensure compliance with § 3705(a) of RRA 98.

IRS RESPONSE TO RECOMMENDATION: Based on Counsel’s advice, contact information for specific employees is not required on systemically generated correspondence, but an employee’s name should be included on notices that are manually generated.  We acknowledge that a  specific tax examiner’s name is not included on manually generated correspondence in Correspondence Exam.  Our current approach to working corporate inventory is a more efficient process than assigning a case to one examiner once the taxpayer has contacted the IRS. The Correspondence Examination Toll Free Line allows taxpayers to contact an experienced assistor at any campus for immediate assistance, without having to wait for a returned call from an individually assigned examiner. This process allows for the most expeditious resolution of the case. We continue to review our notices  through letter, quality, and program/operation reviews. For example, at the beginning of each filing season, notices are reviewed for accuracy to ensure taxpayers receive the appropriate notices and enclosures. The reviews allow us to make necessary revisions prior to the notices being issued to taxpayers.  However, to ensure we are in compliance with Section 3705(a) of RRA 98, we will change the letters that are not in compliance to include the tax examiner’s name.  However, the taxpayers will be provided the toll free number which means they may not be able to contact the TE whose name is listed on the correspondence since extension call routing is not available.  The updated letter will also advise taxpayers that they may not be able to reach the examiner whose name is listed on the correspondence, but the experienced assistor who answers the call will be able to address their inquiry.

Update: We revised 3 manually generated letters:

  • 525-M, General 30 Day Letter,
  • 555-M, Notification of findings based upon taxpayer’s recent data re tax liability, and
  • 692-M, Request For Consideration of Additional Findings.

The Tax Examiners name will be at the top of the letters and the revisions include the following language: “If you have questions, call us at the contact number listed at the top of this letter. When you call, you may not reach the contact person listed on this letter. However, the person you reach should be able to answer your questions.”

SERP Alert 16A0320 was input on 12/8/2016 and will post on 12/9/2016. This alert explains to Tax Examiners about the additions of the new letters and language.

Response and Actions Taken:

  • Coordinated with Counsel and W&I regarding language on the manually generated letters (June 2015).
  • Based on Counsel’s advice, contact information for a specific employee is not required on systemically generated correspondence, but an employee’s name should be included on notices that are manually generated.  To ensure compliance with Section 3705(a) of RRA 98, the four manually generated letters noted below were updated to:
  • Add the tax examiner’s name
  • Provide the toll-free number.  Extension call routing is not available.
  • Advise taxpayers that they may not be able to reach the examiner’s name listed on the correspondence, but the experienced assistor who answers the call will be able to address their inquiry.
  • Four letters were updated (see attached) which constitutes the population of manually issued letters:

o Letter 525M – General 30 Day Letter (Updated by SBSE, November 2016)
o Letter 555M – Notification of Findings on Taxpayer Data – Tax Liability (Updated by SBSE, December 2016)
o Letter 692M – Request for Consideration of Additional Findings (Updated by SBSE, January 2017)
o Letter 566M – Service Center Initial Contact (Updated by W&I, September 2015)

CORRECTIVE ACTION: We will coordinate with the required stakeholders including  Counsel and W&I in order to take steps to add the TE’s name to manually generated letters and update language in the correspondence regarding the assistance that will be provided when the taxpayer calls the toll free number.

TAS RESPONSE: While inclusion of the name of the Tax Examiner who generated the notice is a step in the right direction toward partial compliance with the requirements of RRA 98, it does not fully address the concerns that led to the implementation of § 3705(a) of RRA 98.  To fully comply with RRA 98, the phone number of the employee must also be included with the employee name in all manually-generated correspondence.  Including just the name of the employee does not remedy congressional concerns about employee accountability or assist taxpayers in resolving their IRS issues with an employee with actual knowledge of their particular cases.  The National Taxpayer Advocate expects the IRS to consult with TAS as a stakeholder in identifying manually generated notices that should include the Tax Examiner’s name.  TAS will provide the IRS with a list of notices it has identified where IRS should include employee names and contact information.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

2
2.

TAS RECOMMENDATION #14-2

Where an employee has reviewed a case, letters generated by that review should contain the employee’s name and contact information even if the letter is generated with the assistance of automated systems or software.

IRS RESPONSE TO RECOMMENDATION: Based on Counsel’s advice, contact information for specific employees is not required on systemically generated correspondence, but an employee’s name should be included on notices that are manually generated.  Tax Examiners have the ability to include their name on manually generated letters. However, to provide better customer service, the toll-free number is included on the letters. Currently, 95% of W&I’s & SB’s inventory is automated. To assign to a Tax Examiner upfront will substantially reduce hours available to address the taxpayer mail since this will require Tax Examiners to manually issue letters and move cases through the audit stream.  Our current approach to working corporate inventory is a more efficient process than assigning a case to one examiner once the taxpayer has contacted the IRS. The Correspondence Examination Toll Free Line allows taxpayers to contact an experienced assistor at any campus for immediate assistance, without having to wait for a returned call from an individually assigned examiner. This process allows for the most expeditious resolution of the case. However, to ensure we are in compliance with Section 3705(a) of RRA 98, we will change the letters that are not in compliance as described in our response to recommendation 14-1.

Update: We revised 3 manually generated letters:

  • 525-M, General 30 Day Letter,
  • 555-M, Notification of findings based upon taxpayer’s recent data re tax liability, and
  • 692-M, Request For Consideration of Additional Findings.

The Tax Examiners name will be at the top of the letters and the revisions include the following language: “If you have questions, call us at the contact number listed at the top of this letter. When you call, you may not reach the contact person listed on this letter. However, the person you reach should be able to answer your questions.”

SERP Alert 16A0320 was input on 12/8/2016 and will post on 12/9/2016. This alert explains to Tax Examiners about the additions of the new letters and language.

Response and Actions Taken:

  • Coordinated with Counsel and W&I regarding language on the manually generated letters (June 2015).
  • Based on Counsel’s advice, contact information for a specific employee is not required on systemically generated correspondence, but an employee’s name should be included on notices that are manually generated.  To ensure compliance with Section 3705(a) of RRA 98, the four manually generated letters noted below were updated to:
    • Add the tax examiner’s name
    • Provide the toll-free number.  Extension call routing is not available.
    • Advise taxpayers that they may not be able to reach the examiner’s name listed on the correspondence, but the experienced assistor who answers the call will be able to address their inquiry.
  • Four letters were updated (see attached) which constitutes the population of manually issued letters:
    • Letter 525M – General 30 Day Letter (Updated by SBSE, November 2016)
    • Letter 555M – Notification of Findings on Taxpayer Data – Tax Liability (Updated by SBSE, December 2016)
    • Letter 692M – Request for Consideration of Additional Findings (Updated by SBSE, January 2017)
    • Letter 566M – Service Center Initial Contact (Updated by W&I, September 2015)

CORRECTIVE ACTION: We will coordinate with the required stakeholders including  Counsel and W&I in order to take steps to add the TE’s name to manually generated letters and update language in the correspondence regarding the assistance that will be provided when the taxpayer calls the toll free number.

TAS RESPONSE: Particularly in cases where a taxpayer receives a letter that provides or impacts the taxpayer’s legal rights, it is in the best interest of both the IRS and the taxpayer for the taxpayer to expeditiously reach an IRS employee to resolve the issue, if possible, before the taxpayer must go to court.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

3
3.

TAS RECOMMENDATION #14-3

If a notice is generated automatically through a program such as ACE, but has legal impact on the taxpayer, such as a Statutory Notice of Deficiency (SNOD), the contact information for a manager should be included on such notices to facilitate call-routing and case assignment.

IRS RESPONSE TO RECOMMENDATION: The manager’s contact information is not included on notices, including stat notices, since cases are not assigned to a single employee. Manager contact information does not facilitate call routing or case assignment. TEs addressing taxpayer’s inquiries have the ability to work an assigned case based on their training and the documented case history. Having TEs work cases systemically in the automated system allows for more expeditious handling of the case and reduces delays in responding to taxpayers. TEs have the authority to handle these types of issues, which will prevent delays in processing the case. The current procedures allow taxpayers to request and speak to a manager by calling the toll-free number included in the notices.     

CORRECTIVE ACTION: N/A

TAS RESPONSE: Including the contact information of a manager on these types of letters will allow the manager to balance workload and expertise to assign cases and resolve taxpayer issues prior to the added burden and expense of legal action to both the taxpayer and the government.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

4
4.

TAS RECOMMENDATION #14-4

Once a taxpayer has communicated with the IRS, either by correspondence or via a phone call, contact information for the employee who reviews that correspondence or answers the telephone call should appear on subsequent correspondence.

IRS RESPONSE TO RECOMMENDATION: Based on Counsel’s advice, contact information for a specific employee is not required on systemically generated correspondence, but an employee’s name should be included on notices that are manually generated.  We acknowledge that we are not in compliance since the TE’s name is not currently included on manually generated correspondence in Correspondence Exam.  Tax Examiners have the ability to include their name on manually generated letters.  However, to ensure we are in compliance with Section 3705(a) of RRA 98, we will change the letters that are not in compliance as described in our response to recommendation 14-1. The taxpayers will be provided the toll free number which means they may not be able to contact the TE’s name listed on the correspondence since extension call routing is not available.  The updated letter will also advise taxpayers that they may not be able to reach the examiner’s name listed on the correspondence, but the experienced assistor who answers the call will be able to address their inquiry.

Update: We revised 3 manually generated letters:

  • 525-M, General 30 Day Letter,
  • 555-M, Notification of findings based upon taxpayer’s recent data re tax liability, and
  • 692-M, Request For Consideration of Additional Findings.

The Tax Examiners name will be at the top of the letters and the revisions include the following language: “If you have questions, call us at the contact number listed at the top of this letter. When you call, you may not reach the contact person listed on this letter. However, the person you reach should be able to answer your questions.”

SERP Alert 16A0320 was input on 12/8/2016 and will post on 12/9/2016. This alert explains to Tax Examiners about the additions of the new letters and language.

Response and Actions Taken:

  • Coordinated with Counsel and W&I regarding language on the manually generated letters (June 2015).
  • Based on Counsel’s advice, contact information for a specific employee is not required on systemically generated correspondence, but an employee’s name should be included on notices that are manually generated.  To ensure compliance with Section 3705(a) of RRA 98, the four manually generated letters noted below were updated to:
    • Add the tax examiner’s name
    • Provide the toll-free number.  Extension call routing is not available.
    • Advise taxpayers that they may not be able to reach the examiner’s name listed on the correspondence, but the experienced assistor who answers the call will be able to address their inquiry.
  • Four letters were updated (see attached) which constitutes the population of manually issued letters:
    • Letter 525M – General 30 Day Letter (Updated by SBSE, November 2016)
    • Letter 555M – Notification of Findings on Taxpayer Data – Tax Liability (Updated by SBSE, December 2016)
    • Letter 692M – Request for Consideration of Additional Findings (Updated by SBSE, January 2017)
    • Letter 566M – Service Center Initial Contact (Updated by W&I, September 2015) w     

CORRECTIVE ACTION: We will coordinate with the required stakeholders including  Counsel and W&I in order to take steps to add the TE’s name to manually generated letters and update language in the correspondence regarding the assistance that will be provided when the taxpayer calls the toll free number.

TAS RESPONSE: While inclusion of the name of the Tax Examiner who generated the notice is a step in the right direction toward partial compliance with the requirements of RRA 98, it does not fully address the concerns that led to the implementation of § 3705(a) of RRA 98.  To fully comply with RRA 98, the phone number of the employee must also be included with the employee name in all manually-generated correspondence. Including just the name of the employee does not remedy congressional concerns about employee accountability or assist taxpayers in resolving their IRS issues with an employee with actual knowledge of their particular cases.  The National Taxpayer Advocate expects the IRS to consult with TAS as a stakeholder in identifying manually generated notices that should include the Tax Examiner’s name. TAS will provide the IRS with a list of notices it has identified where IRS should include employee names and contact information.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

en English
X