Internal Revenue Manual
IRM 4.2.2 — Disaster Assistance Relief
Part 4. Examining Process
Chapter 2. General Examining Procedures Section 2. Disaster Assistance Relief 4.2.2 Disaster Assistance Relief Manual Transmittal August 15, 2025 Purpose (1) This transmits revised IRM 4.2.2, General Examining Procedures, Disaster Assistance Relief. Material Changes (1) Significant changes to this IRM are listed in the table below. Reference Description of Change IRM 4.2.2.1, Program Scope and Objectives Added Primary Stakeholders IRM 4.2.1.1.4, Program Controls Added program controls. Throughout IRM 4.2.2 Minor editorial changes have been made throughout this IRM and website addresses were reviewed and updated as necessary. Effect on Other Documents This IRM supersedes IRM 4.2.2 dated February 7, 2024. Audience SB/SE Field Examination, Specialty Examination, and LB&I Employees. Effective Date (08-15-2025) Heather J. Yocum Director, Examination Field and Campus Policy Small Business/Self-Employed Division CTCO:S:E:HQ:EFCP
Program Scope and Objectives
4.2.2.1 (08-15-2025) Program Scope and Objectives Purpose: This IRM section describes employee responsibilities when taxpayers are affected by a federally declared disaster during compliance activity. Audience: These procedures apply to Small Business and Self-Employed (SB/SE) Field Examination, SB/SE Specialty Examination, and Large Business and International (LB&I) employees. Policy Owner: The Director, Examination Field and Campus Policy who reports to the Director, Examination Headquarters, owns the policy in this IRM. Program Owner: The Disaster Program Office (DPO), which is under the Director, SB/SE Human Capital Office (HCO) in SB/SE Operations Support. Primary Stakeholders: SB/SE Field Examination, Specialty Examination, and LB&I Employees are the primary stakeholders of this IRM. Contact Information: To recommend changes or make any other suggestions related to this IRM section, see IRM 1.11.6.5, Providing Feedback About an IRM Section - Outside of Clearance.
Background
4.2.2.1.1 (05-29-2019) Background This IRM provides guidance for making, communicating, and documenting compliance relief determinations when a taxpayer has been affected by a federally declared disaster and may qualify for relief from compliance activity.
Authority
4.2.2.1.2 (05-29-2019) Authority IRC 7508A, Authority to postpone certain deadlines by reason of Federally declared disaster, significant fire, or terroristic or military actions. 26 CFR 301.7508A-1, Postponement of certain tax-related deadlines by reasons of a federally declared disaster or terroristic or military action. Rev. Proc. 2018-58 provides a list of time-sensitive acts, the performance of which may be postponed under IRC 7508A.
Roles and Responsibilities
4.2.2.1.3 (02-12-2020) Roles and Responsibilities SB/SE HCO has primary responsibility for the management of the Disaster Assistance and Emergency Relief program. The Director, Examination Headquarters, is the executive responsible for providing policy and guidance for Field, Specialty, and Campus exam operations and ensuring consistent application of policy, procedures and tax law to effect tax administration while protecting taxpayers' rights. See IRM 1.1.16.5.5, Examination Headquarters, for additional information. The Director, Examination Field and Campus Policy, reports to the Director, Examination Headquarters, and is responsible for the delivery of policy and guidance that impacts the field examination process. See IRM 1.1.16.5.5.1, Examination Field and Campus Policy, for additional information. Field Examination General Processes, which is under the Director, Examination Field and Campus Policy, is the group responsible for providing policy and procedural guidance on standard examination processes to field employees. See IRM 1.1.16.5.5.1.1, Field Examination General Processes, for additional information. All examiners must perform their professional responsibilities in a way that supports The IRS Mission. This requires examiners to provide top quality service and to apply the law with integrity and fairness to all. Examiners and their managers should thoroughly acquaint themselves with the examination procedures and information contained in this IRM, as well as other resources, such as those listed in IRM 4.2.2.1.7 below.
Program Controls
4.2.2.1.4 (08-15-2025) Program Controls DPO provides program controls by: Ensuring taxpayers impacted by a federally declared disasters receive federal administrative tax relief by determining appropriate level of disaster relief (e.g., –S freeze vs. –O freeze). Coordinating with Information Technology to input –S or –O or freeze codes on affected taxpayer accounts. Communicating the IRS disaster relief decisions to external and internal stakeholders. Managers provide program controls by approving certain compliance activities during postponement periods when warranted (see IRM 4.2.2.6.4.1, Exigent Circumstances; IRM 4.2.2.11.3.2, Technical Services - Statutory Notices of Deficiency Issued During Postponement Period; and IRM 4.2.2.11.11.2, Technical Services - Postponement Period Extended).
Terms
4.2.2.1.5 (05-29-2019) Terms The following table contains a list of terms used throughout this IRM. Term Definition Affected Taxpayer A taxpayer who may be eligible for disaster tax relief, including certain tax-related deadlines and/or relief from compliance activity. See IRM 25.16.1.3(4), Identification of Covered Disaster Area, Postponement Period and Affected Taxpayers, for a complete list of affected taxpayers. Affirmative Request An unequivocal verbal or written request from the taxpayer to opt out of the postponement of compliance activity. Compliance Activity An examination, compliance check, or compliance review conducted by the IRS. Examination: A systematic inspection of the books and records of a taxpayer for the purpose of making a determination of the correct tax liability. Compliance Check: A review conducted to determine whether a taxpayer is adhering to recordkeeping and information reporting requirements. It is neither an inspection nor an audit. Compliance Review: A review conducted to ensure a taxpayer is satisfying the commitments contained in a voluntary agreement (e.g., closing agreement). See Pub 3114, Compliance Checks, for more information. Compliance Relief A temporary delay of compliance activity. Disaster Freeze Codes Freeze codes (–O and –S) posted on the Integrated Data Retrieval System (IDRS) that ensure systemic relief is provided to affected taxpayers within identified ZIP Codes in an IRS designated disaster area. See IRM 4.2.2.5.1. Disaster Relief Memorandum Internal use only memorandum issued by the Director, SB/SE HCO, or the designee, for Servicewide distribution after a disaster is declared. The memorandum includes the postponement period and level of relief, identification of who is an affected taxpayer, notice information, and instructions regarding postponements of due dates for filing and payments. Federally Declared Disaster Any disaster subsequently determined by the president of the United States (US) to warrant assistance by the federal government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. FEMA Declaration Number A unique 4-digit number assigned by the Federal Emergency Management Agency (FEMA) for each specific disaster and state. Individual Assistance Assistance provided by FEMA to individuals and families who have sustained losses due to a disaster. IRS Designated Disaster Area A geographic location impacted by the disaster. Generally, the area provided Individual Assistance by FEMA will be the designated disaster area recognized by the IRS. IRS Disaster Declaration Notice An internal notice prepared and issued by the IRS to identify the areas within a US state or territory impacted by a specific disaster. The notice includes the 4-digit FEMA Declaration Number, the date, a brief description of the disaster, the duration of the disaster event (known as the incident period) and the IRS designated disaster area. Manager Approval Managerial involvement resulting in concurrence with a proposed action. The involvement must be documented in the case file, but a manager's signature is not required unless explicitly stated. Opt Out The act of a taxpayer declining temporary relief from compliance activity. Postponement Period The period of time determined by the IRS for administrative tax relief provided to taxpayers who have been affected by a major disaster or emergency. Public Assistance Assistance provided by FEMA to fund the repair, restoration, reconstruction or replacement of a public facility or infrastructure damaged or destroyed by a disaster. Self-Identify The act of a taxpayer initiating contact with the IRS to report personal circumstances not captured systemically.
Acronyms
4.2.2.1.6 (02-07-2024) Acronyms The following table lists commonly used acronyms and their definitions used throughout this IRM: Acronym Definition AC Action Code AIMS Audit Information Management System ARC Aging Reason Code ASED Assessment Statute Expiration Date BSA Bank Secrecy Act CC Command Code CCP Centralized Case Processing CI Criminal Investigation CTR Currency Transaction Report DPO Disaster Program Office ECS Exam Case Selection ERCS Examination Return Control System EIN Employer Identification Number FBAR Foreign Bank and Financial Accounts Report FEMA Federal Emergency Management Agency IDRS Integrated Data Retrieval System IRC Internal Revenue Code IT Information Technology MF Master File OVDI Offshore Voluntary Disclosure Initiative PCS Partnership Control System PSP Planning and Special Programs RA Revenue Agent SB/SE Small Business/Self-Employed SME Subject Matter Expert SSN Social Security Number TC Transaction Code TCO Tax Compliance Officer TEFRA Tax Equity and Fiscal Responsibility Act of 1982 TMP Tax Matters Partner US United States
Related Resources
4.2.2.1.7 (02-07-2024) Related Resources IRM 25.16.1, Program Guidelines, describes how the IRS administers administrative tax relief when responding to tax-related issues due to federally declared disasters and other significant emergencies, under the Robert T. Stafford Act. The resources below provide helpful information related to administrative tax relief as a result of a federally declared disaster: Disaster Tax Assistance Knowledge Base Disaster Assistance and Emergency Relief Program IRS Disaster Memos and Declarations by Calendar Year IRS Disaster Assistance and Emergency Relief for Individuals and Businesses
General Information
4.2.2.2 (02-12-2020) General Information When a federally declared disaster occurs, FEMA will designate certain geographic areas for Individual Assistance and/or Public Assistance. The DPO assumes primary responsibility for determining and/or coordinating disaster tax relief for the IRS and will take the actions listed in IRM 25.16.1.1.3(5), Roles and Responsibilities. Note: FEMA provides two main types of assistance following natural disasters, Individual Assistance and Public Assistance. Individual Assistance is generally provided to individuals and families who have sustained losses due to a disaster. Public Assistance can fund the repair, restoration, reconstruction or replacement of a public facility or infrastructure damaged or destroyed by a disaster. Generally, the IRS only provides disaster relief to those areas designated for Individual Assistance. The following resources are available to assist in identifying federally declared disasters that may impact taxpayers: The Disaster Relief Memorandum and IRS Disaster Declaration are distributed internally via IRS e-mail. IRS News Releases posted on the IRS.gov Tax Relief in Disaster Situations website. Upon receipt from the DPO, Information Technology (IT) will post the Disaster Relief Memorandum, IRS Disaster Declaration, and a listing of counties (or other geographic subdivisions) and ZIP Codes to the IRS Disaster Memos and Declarations by Calendar Year website. A taxpayer's ZIP Code can be entered on the IRS Disaster Memos and Declarations by Calendar Year website to determine if there is a current disaster freeze present. The ZIP Code search tool may provide more timely results than waiting for the IT systemic programming to reflect on an affected taxpayer's account.
Examiner Responsibilities
4.2.2.3 (05-29-2019) Examiner Responsibilities A brief summary of actions examiners must take when considering compliance relief for affected taxpayers is provided below. Detailed guidance for each action can be found in the referenced IRM sections. Provide compliance relief to eligible affected taxpayers who do not opt out of the postponement period. See IRM 4.2.2.4. Identify "affected taxpayers." See IRM 4.2.2.5. Complete and document compliance relief determinations for affected taxpayers. See IRM 4.2.2.6. Protect the statute of limitations. See IRM 4.2.2.7. Use soft contact procedures to communicate with affected taxpayers. See IRM 4.2.2.8. Review status 10 inventory for cases with a –O freeze. See IRM 4.2.2.9. Resume compliance activity after the postponement period expires. See IRM 4.2.2.10.
Compliance Relief
4.2.2.4 (02-12-2020) Compliance Relief When a federal disaster is declared, the IRS has authority to postpone certain tax-related deadlines and provide relief from compliance activity. The IRS uses disaster freeze codes (–O and –S) to provide systemic filing and payment relief to taxpayers with a filing or payment due date or extended due date within the disaster postponement period. The –O freeze is generally applied in only the most catastrophic disaster areas designated by FEMA for Individual Assistance. In addition to systemic filing and payment relief, the –O freeze also: Suspends mailing of notices with the exception of assessment notices required by IRC 6303, Notice and demand for tax, and all letters and notices pertaining to the Release of Levy/Release of Property from Levy, and Suspends a number of collection and examination activities, including discriminant index function (DIF) ordering through Audit Information Management System (AIMS), underreporter activity, and taxpayer delinquent account (TDA)/taxpayer delinquency investigation (TDI) processing. For additional information regarding the –O freeze, see IRM 25.16.1.7.2, –O Freeze. For additional information regarding the –S freeze, see IRM 25.16.1.7.1, –S freeze. Generally, an affected taxpayer (see IRM 4.2.2.5) is eligible for compliance relief unless certain conditions necessitate the continuation of compliance activity (e.g., an imminent statute) (see IRM 4.2.2.6.4). Note: Relief from compliance activity is not a tax-related act identified in 26 CFR 301.7508A-1. If the taxpayer is eligible for compliance relief, the examiner will postpone compliance activity and issue one of the following letters: Letter 6016, Withdraw 30-Day Letter - Disaster, if a 30-day letter is scheduled to default during the postponement period and the taxpayer is eligible for a disaster freeze (see IRM 4.2.2.8.3). Letter 6029, Postponement Period Notification - Disaster, if a 30-day letter is not scheduled to default during the postponement period and the taxpayer is eligible for a disaster freeze (see IRM 4.2.2.8.2). Letter 6102, Confirmation of Compliance Activity Postponement - Disaster, if the self-identified taxpayer (see IRM 4.2.2.6.3) is not eligible for a disaster freeze (see IRM 4.2.2.8.2 and IRM 4.2.2.8.3). All three letters provide the taxpayer an opportunity to opt out of the postponement period if they prefer to resume compliance activity earlier than the postponement period end date. If the taxpayer does not opt out, compliance activity is postponed until the postponement period end date.
Compliance Activity During the Postponement Period
4.2.2.4.1 (05-29-2019) Compliance Activity During the Postponement Period If an eligible affected taxpayer (see IRM 4.2.2.5) does not opt out of the postponement period (see IRM 4.2.2.4.2), compliance activity involving interaction with the taxpayer, representative, or third parties is postponed until the postponement period expires (see IRM 4.2.2.4.1.1). Compliance activity transparent to the taxpayer is generally allowed during the postponement period (see IRM 4.2.2.4.1.2).
Compliance Activity Not Allowed During the Postponement Period
4.2.2.4.1.1 (02-07-2024) Compliance Activity Not Allowed During the Postponement Period Compliance activity not allowed during the postponement period includes: Holding an appointment with the taxpayer or representative to inspect books and records or conduct other audit-related activities. Contacting the taxpayer or representative to schedule an appointment for an audit or compliance visit. Initiating or continuing compliance activity of a taxpayer (including employee audits, cases resulting from a whistleblower claim, and related pick-ups) unless the work performed is transparent to the taxpayer. Note: If an examiner initiates a compliance activity for a taxpayer located in a –O freeze area during the postponement period, they cannot contact the taxpayer prior to expiration of the postponement period unless there are exigent circumstances (see IRM 4.2.2.6.4.1). Requesting records and information from the taxpayer or third parties. Issuing a Form 4564, Information Document Request. Contacting third parties. Issuing a summons to the taxpayer or third parties (see IRM 4.2.2.4.1.3). Requiring compliance with a previously issued third-party summons when the quash date or appearance date falls within the postponement period (see IRM 4.2.2.4.1.3). Requiring compliance with a previously issued summons for the taxpayer's records and testimony when the appearance date falls within the postponement period (see IRM 4.2.2.4.1.3). Issuing an examination report, (e.g., Form 4549, Report of Income Tax Examination Changes). Issuing a 30-day letter (e.g., Letter 915, Examination Report Transmittal, or Letter 950, 30 Day Letter-Straight Deficiency). Offering or participating in fast track settlement. Processing a taxpayer's request to go to Independent Office of Appeals (Appeals) received before or during the postponement period if they have not opted out of the postponement period. Processing agreements (see IRM 4.2.2.4.1.1.1), including partial assessments. Issuing a statutory notice of deficiency (90-day letter) or statutory notice of claim disallowance unless the case has an exigent circumstance (see IRM 4.2.2.6.4.1). Conducting compliance activity for Offshore Voluntary Disclosure Initiative (OVDI) and treaty cases. Conducting compliance activity for return preparer cases and promoter penalty investigations. Note: These investigations are not controlled on AIMS, therefore a systemic –O freeze will not be present. Conducting fuel compliance inspections within the IRS designated disaster area during the waiver period for dyed fuel penalties. Note: The waiver period, which may differ from the postponement period, is generally stated in an IRS news release issued subsequent to the disaster. Conducting Title 31, Money and Finance, compliance examinations. Issuing any report or notice of Foreign Bank and Financial Accounts (FBAR) violations. Note: Imminent or pending FBAR statutes should be addressed with Examination-Specialty Policy for additional guidance on a case-by-case basis. Issuing a Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, penalty notice by Bank Secrecy Act (BSA) Exam Currency Transaction Report (CTR) Operations. Note: Examination-Specialty Policy will provide guidance to resolve pending cases for which the penalty amounts are de minimis.
Agreements Received from Affected Taxpayers
4.2.2.4.1.1.1 (02-12-2020) Agreements Received from Affected Taxpayers Agreements received from affected taxpayers who do not qualify for compliance relief (e.g., exigent circumstances) or opted out of the postponement period can be processed. Procedures for processing these agreements vary depending on the presence of a disaster freeze. –O Freeze: Prepare Letter 987-D, Agreed Income Tax Change - Disaster, in lieu of Letter 987, Agreed Income Tax Change. Also, notate Form 3198, Special Handling Notice for Examination Case Processing, in the Special Features, Other Instructions section: "–O freeze present, case not subject to postponement of examination activity–exigent circumstances" or "–O freeze present, case not subject to postponement of examination activity–taxpayer opted out," depending on the specific scenario. Note: A –O freeze will suspend the mailing of notices with the exception of assessment notices required by IRC 6303. Letter 987-D includes a notification that interest and penalties will accrue on any unpaid deficiency during the postponement period. –S Freeze or No Freeze: Follow normal closing procedures in IRM 4.10.8.4.5, Closing Letters for Agreed Cases. Agreements received from affected taxpayers who qualify for compliance relief and do not opt out of the postponement period should not be processed until after the postponement period expires. Agreements received before the postponement period start date should not be processed during the postponement period. Example: A taxpayer's signed agreement is received by the group on March 25, 2025. The disaster postponement period start date is March 27, 2025. The examiner retrieves the agreement on March 28, 2025. The taxpayer qualifies for compliance relief and does not opt out of the postponement period. Therefore, the agreement should not be processed until after the postponement period expires. Note: Under IRC 6601(c), Suspension of interest in certain income, estate, gift and certain excise tax cases, interest is suspended if notice and demand for payment is not issued to the taxpayer within 30 days of the IRS receiving a signed waiver. Therefore, postponing the processing of an agreement will provide some taxpayers with a suspension of interest under IRC 6601(c). Payments received should be processed according to normal procedures (see IRM 4.2.2.4.1.2).
Compliance Activity Allowed During the Postponement Period
4.2.2.4.1.2 (02-07-2024) Compliance Activity Allowed During the Postponement Period Compliance activity allowed during the postponement period includes: Requiring compliance with a previously issued third-party summons when the quash date or appearance date occurs before the postponement period (see IRM 4.2.2.4.1.3 (1)) Processing payments from affected taxpayers received before or during the postponement period. Processing a taxpayer's request to go to Appeals received prior to the postponement period after confirming the taxpayer is ready for Appeals' consideration. Processing a taxpayer's request to go to Appeals after they have opted out of the postponement period. Completing work transparent to the taxpayer (e.g., completing and documenting the initial return screening, in-depth pre-contact analysis, and/or evaluation of audit potential without contacting the taxpayer(s), reviewing records obtained prior to the postponement period, conducting tax law research, and preparing reports and document requests that will be issued after the postponement period expires). Processing no change and overassessment cases agreed to by the taxpayer prior to or during the postponement period. Note: A "case" is defined as all examined returns with the same type of tax for the same taxpayer. So, if a multi-year examination results in an overassessment for one year(s) and a deficiency for the other(s), an agreement can be processed if the aggregate result is an overassessment. Forwarding an unagreed case to Technical Services when the 30-day letter defaulted before the postponement period (see IRM 4.2.2.8.3). Completing taint reviews by Whistleblower Subject Matter Experts (SME) and reviewing whistleblower information to determine if a debriefing is warranted. Note: Whistleblower SMEs can initiate a soft contact (see IRM 4.2.2.8.1) to determine if the whistleblower would like to conduct the debriefing during the postponement period or wait until it expires. Contact with any whistleblower should only be made by the assigned Whistleblower SME. Reviewing the initial Form 637, Application for Registration (For Certain Excise Tax Activities). Note: If contact is made with the applicant, the examiner must offer to postpone action unless the applicant agrees to opt out of the postponement period (see IRM 4.2.2.4.2).
Summons
4.2.2.4.1.3 (05-29-2019) Summons When a third-party summons was issued prior to the postponement period, the expiration of the quash period will determine what action the examiner can take. Period to Quash Expired Prior to Beginning of Postponement Period: Proceed with summons enforcement as necessary if the bank or third party does not comply. Period to Quash Expired During Postponement Period: Proceed with summons enforcement after the postponement period expires if the bank or third party does not comply. If the third party complies with the summons, consult Counsel before reviewing the records. In the case of a previously issued summons for the taxpayer's records and testimony, if the appearance date falls within the postponement period, do not enforce the summons if the taxpayer fails to appear. Follow the guidance below based on the applicable scenario: Taxpayer Initiates Contact to Comply with the Summons: Explain compliance activity has been postponed. The taxpayer must opt out of the postponement period to resume compliance activity (see IRM 4.2.2.4.2). Taxpayer Initiates Contact to Express Inability to Comply with the Summons: Attempt to reach an agreement on a new appearance date that occurs after the postponement period. Confirm the taxpayer's address and reissue the summons after the postponement period expires for the agreed upon date, allowing for the requisite time to lapse between service date and the summons appearance date. Taxpayer Does Not Initiate Contact: Reissue the summons after the postponement period expires allowing for the requisite time to lapse between service date and the summons appearance date. In the case of a previously issued summons for the taxpayer's records and testimony, if the appearance date fell before the postponement period, a referral to Counsel can be made during the postponement period for noncompliance (see IRM 25.5.10.4.1.1, Referral). Note: Counsel will not send a last chance letter during the postponement period, but may refer the summons for enforcement to the Department of Justice during the postponement period. In the case of a designated summons under IRC 6503(j), Extension in case of certain summonses, the statute of limitations is suspended for the period beginning when a lawsuit is filed in a court of law to either enforce or quash the summons. Examiners will discuss the proper enforcement action with the manager and Counsel or other appropriate personnel.
Taxpayers Opting Out of the Postponement Period
4.2.2.4.2 (05-29-2019) Taxpayers Opting Out of the Postponement Period Postponed compliance activity can resume at the taxpayer's request. Note: Taxpayers who self-identify and are granted compliance relief can subsequently ask to resume compliance activity prior to the end of the postponement period. In these situations, the taxpayer's affirmative request should be clearly documented in the case file and Letter 6106, Confirmation of Opt Out - Disaster, should be issued. Taxpayers must make an affirmative request to resume compliance activity. This request can be verbal or written. An affirmative request can also be made by a taxpayer's authorized representative. The taxpayer's affirmative request should be clearly documented in the case file or on the optional Disaster Job Aid referenced in IRM 4.2.2.6 (4). If a taxpayer has a –O freeze and opts out of the postponement period, the disaster tracking code and/or aging reason code (ARC) must be updated (see IRM 4.2.2.5.2 (3)). Reminder: To eliminate the risk of denying the taxpayer certain administrative tax relief (e.g., relief measures that may be provided by Collection), a –O freeze, if present, should not be removed from the taxpayer's account or replaced with a –S freeze if the taxpayer opts out of the postponement period related to their audit or compliance check. When compliance activity resumes and a –O freeze is on the taxpayer's account, examiners must use Letter 987-D to close agreed cases and include specific language on Form 3198 (see IRM 4.2.2.4.1.1.1, IRM 4.2.2.7.1 (4), and IRM 4.2.2.7.2 (4)) to indicate the resumption of activity while a –O freeze is present. The examiner must issue Letter 6106, which confirms the taxpayer opted out of the postponement period prior to resuming compliance activity. Note: Opting out has no effect on the filing and payment relief provided to taxpayers with a disaster freeze (–O or –S) (see IRM 4.2.2.4 (1)).
Affected Taxpayers
4.2.2.5 (05-29-2019) Affected Taxpayers The IRS identifies "affected taxpayers" as those who may be eligible for disaster tax relief. Affected taxpayers primarily include taxpayers whose principal residence or principal place of business is located in the IRS designated disaster area. See IRM 25.16.1.3(4) for a complete list of affected taxpayers. Affected taxpayers can be identified by various identifiers posted on AMDISA, ENMOD, BMFOLE, and IMFOLE, via IT systemic programming (see IRM 4.2.2.5.1). Caution: An affected taxpayer will not always have an identifier posted on IDRS.
Systemic Disaster Account Identifiers on Master File (MF)
4.2.2.5.1 (02-07-2024) Systemic Disaster Account Identifiers on Master File (MF) IT systemically posts disaster account identifiers to Master File (MF) using ZIP Codes of taxpayers within the IRS designated disaster area after DPO provides the postponement period start and end dates. Example: The IRS designated disaster area includes County X. Within County X are ZIP Codes 11111 and 22222. IT identifies all taxpayers with these ZIP Codes and posts the corresponding disaster account identifiers on MF. Caution: Records not controlled on AIMS will not receive a systemic –O or –S freeze. Examiners must use the ZIP Code for the address of record to determine if a disaster freeze is applicable by using the ZIP Code search tool on the IRS Disaster Memos and Declarations by Calendar Year website. Caution: Generally, there is a delay for the –O or –S freeze to post to the MF. If a disaster memo has been issued for an area and the –S or –O is not present on the MF, examiners should search the taxpayer's ZIP Code on the IRS Disaster Memos and Declarations by Calendar Year website to determine if there is a current disaster freeze present. An identifier posted to MF manually is the result of an action taken by an IRS employee for a specific taxpayer. Example: A taxpayer contacts the IRS and self-identifies for disaster relief. The IRS determines the taxpayer is eligible for a –O freeze. Form 3177, Notice of Action for Entry on Master File, must be submitted to request input of the appropriate disaster account identifier. Disaster account identifiers consist of: Freeze Codes (–O and –S) Transaction Code (TC) 971 with Action Code (AC) 087 (–O freeze) or 688 (–S freeze) Disaster Indicator 1, 2, 3, or 4 The –O and –S freeze are present on Command Code (CC) BMFOLE and CC IMFOLE. Note: If a taxpayer resides in an IRS designated disaster area, but has an address of record on MF that is not in the IRS designated disaster area, a systemic freeze will not be posted to MF. This applies even if the taxpayer formally changes their address of record after IT has completed the systemic updates to MF. Nevertheless, these taxpayers are eligible for the appropriate disaster freeze and should call the Disaster Assistance Hotline at 866-562-5227, to self-identify for disaster relief. TC 971 transactions are present on CC ENMOD, CC BMFOLE, and CC IMFOLE. AC 087 indicates a –O freeze while AC 688 indicates a –S freeze. Disaster Indicators 1, 2, 3, and 4 are posted on CC AMDISA, CC ENMOD, CC BMFOLE, and CC IMFOLE. The Disaster Indicators are defined below: 1 = –S freeze active 2 = –O freeze active 3 = both –O and –S freeze are active 4 = historical indicator reflecting a –O and/or –S freeze was active at some time in the past but is not currently active The Disaster Indicator and TC 971 transactions post to Section 3–POSTED ENTITY TRANSACTION SECTION of CC ENMOD. See IRM 2.3.15.4, ENMOD Responses. The table below describes where to locate the various disaster account identifiers on CC AMDISA, CC BMFOLE, and CC IMFOLE: Command Code Disaster-Related Fields AMDISA Field 31 (Disaster Indicator) will display 1, 2, 3 or 4. BMFOLE Field 4 (Account Freeze) will display a –O and/or –S freeze. Field 16 (Disaster Indicator) will display 1, 2, 3 or 4. IMFOLE Field 16 (Entity Freeze Codes) will display a –O and/or –S freeze. Field 31 (Disaster indicator) will display 1, 2, 3 or 4. Note: The job aids linked in the table above provide a graphical representation of the CC response screen, and include links to field descriptions, input format examples, and IRM references.
Inventory Tracking - Examination Return Control System (ERCS)
4.2.2.5.2 (02-07-2024) Inventory Tracking - Examination Return Control System (ERCS) Unique national ARCs and tracking codes are established by Examination Headquarters – Exam Case Selection (ECS) for each disaster where a –O freeze is applied. These codes are posted to the Examination Return Control System (ERCS) Code Listings websites. Note: When a disaster does not generate a –O freeze, unique ARCs and tracking codes are not established and inventory tracking procedures are not applicable. Planning and Special Programs (PSP) will update the ARC and/or tracking code for all cases with a –O freeze that are controlled on ERCS in status 00 through 59. If an ARC or tracking code is already present on a module, only the vacant code will be updated. If a case already has both an ARC and tracking code, PSP will make a priority determination and there is a potential that neither code will be updated with the disaster ARC or tracking code. Reminder: Examiners must complete Form 5348, AIMS/ERCS Update (Examination Update), to update the ARC and/or tracking code on cases where a taxpayer self-identifies for and receives compliance relief even when the taxpayer is not eligible for a disaster freeze. If during the postponement period, compliance activity resumes for a case that received a –O freeze (e.g., exigent circumstances, or the taxpayer opts out of the postponement period), the disaster ARC should be updated to 111 and the disaster tracking code should be updated to 9269. If a non-disaster ARC or tracking code is present on the module, do not override the existing code(s). Reminder: If compliance activity resumes when a –O freeze is present, the –O freeze should not be removed from the taxpayer's account or replaced with a –S freeze. Note: ARC 111 and tracking code 9269 are fixed and do not change for each disaster. If a taxpayer opts out of the postponement period and subsequently opts back in, the examiner must complete Form 5348 to update the ARC and/or tracking code back to the unique national ARC and tracking code, if applicable, established by ECS, which are posted to the ERCS Code Listings website. The disaster-related ARC and tracking code should remain on the case after the postponement period expires. If the ERCS system is used to request AIMS controls for related return pick-ups, the disaster-related ARC and tracking code should be added when the records are established. This applies even after the postponement period expires. ERCS tracking procedures are not applicable for non-ERCS cases.
Compliance Relief Determination
4.2.2.6 (02-12-2020) Compliance Relief Determination Once examiners have identified affected taxpayers in their inventory, they must determine if compliance relief will be provided. There are three groups of taxpayers that may qualify for compliance relief: Taxpayers with a –O freeze (see IRM 4.2.2.6.1) Taxpayers with a –S freeze who self-identify (see IRM 4.2.2.6.2) Taxpayers without a –O or –S freeze who self-identify (see IRM 4.2.2.6.3) The procedures for determining compliance relief vary for each group of taxpayers. Note: Examiners will not start cases in AIMS Status 10, Assigned–No Time Applied, during the postponement period if a –O freeze is present on the taxpayer's module (see IRM 4.2.2.9). The compliance relief determination should be documented as a separate issue indexed to Form 4318, Examination Workpapers Index. See Creating Form 4318-600 Items for instructions to add the disaster issue to the Report Generation Software case file using a 6XX reference number. Examiners may use the optional Disaster Job Aid to determine if the affected taxpayer qualifies for compliance relief.
Taxpayer with a –O Freeze
4.2.2.6.1 (02-07-2024) Taxpayer with a –O Freeze The optional Disaster Job Aid see (IRM 4.2.2.6 (4)) may be used to make and document the compliance relief determination. If the Disaster Job Aid is not used, examiners should follow the guidance in the table below and ensure all required items are documented on a supporting workpaper filed under the 6XX reference number created in IRM 4.2.2.6 (3): If Then The taxpayer has a –O freeze Document the following: The taxpayer has a –O freeze Note: See IRM 4.2.2.5.1 for guidance on how to verify the taxpayer's –O freeze. The proper ARC and tracking code were updated for all open years in ERCS (see IRM 4.2.2.5.2) The case is not included on the list at IRM 4.2.2.6.4 A statute review was completed and an extension secured, if applicable (see IRM 4.2.2.7) The final determination regarding compliance relief The taxpayer is not eligible for compliance relief Document the reason why the taxpayer was not provided relief and continue with compliance activity The taxpayer is eligible for compliance relief Document the following: A previously scheduled appointment was canceled, if applicable Letter 6016 or Letter 6029 was issued providing the taxpayer an opportunity to opt out of the postponement period The taxpayer opts out of the postponement period Document the following: The taxpayer made an affirmative request to opt out of the postponement period The ARC and/or tracking code were updated for all open years in ERCS (see IRM 4.2.2.5.2(3)) to indicate the taxpayer opted out of the postponement period, when applicable Letter 6106, was issued to the taxpayer The taxpayer does not opt out of the postponement period Document the following: The FEMA Declaration Number, postponement period start date, and postponement period end date Brief summary of the case status and resolved issues when compliance activity was postponed Actions that will be completed during the postponement period, if any (see IRM 4.2.2.4.1.2) Next planned actions after the postponement period expires The taxpayer opts out of the postponement period and subsequently opts back in Document the following: The taxpayer made an affirmative request to opt back into the postponement period The case is not included on the list at IRM 4.2.2.6.4 If applicable, the ARC and/or tracking code were updated for all open years in ERCS (see IRM 4.2.2.5.2(4)) A statute review was completed and an extension secured, if applicable (see IRM 4.2.2.7) Letter 6016 or Letter 6029, was issued to the taxpayer
Taxpayer with a –S Freeze Who Self-Identifies
4.2.2.6.2 (02-07-2024) Taxpayer with a –S Freeze Who Self-Identifies A taxpayer with a systemic –S freeze can request relief from compliance activity by self-identifying. To self-identify, the taxpayer must contact the examiner and make the request. The presence of a –S freeze and the taxpayer's request are the only two elements required to begin the compliance relief determination. The optional Disaster Job Aid (see IRM 4.2.2.6 (4)) may be used to make and document the compliance relief determination. If the optional Disaster Job Aid is not used, examiners should follow the guidance in the table below and ensure all required items are documented on a supporting workpaper filed under the 6XX reference number created in IRM 4.2.2.6 (3): If Then The taxpayer has a –S freeze Document the following: The taxpayer has a –S freeze Note: See IRM 4.2.2.5.1 for guidance on how to verify the taxpayer's –S freeze. The taxpayer self-identified for compliance relief The case is not included on the list at IRM 4.2.2.6.4 A statute review was completed and an extension secured, if applicable (see IRM 4.2.2.7) The final determination regarding compliance relief The taxpayer is eligible for compliance relief Document the following: A previously scheduled appointment was canceled, if applicable Letter 6016 or Letter 6029 was issued providing the taxpayer an opportunity to opt out of the postponement period The proper ARC and tracking code were updated for all open years in ERCS (see IRM 4.2.2.5.2) The FEMA Declaration Number, postponement period start date, and postponement period end date Brief summary of the case status and resolved issues when compliance activity was postponed Actions that will be completed during the postponement period, if any (see IRM 4.2.2.4.1.2) Next planned actions after the postponement period expires The taxpayer is not eligible for compliance relief Document the reason why the taxpayer was not provided relief and continue with compliance activity
Taxpayer Without a –O or –S Freeze Who Self-Identifies
4.2.2.6.3 (02-12-2020) Taxpayer Without a –O or –S Freeze Who Self-Identifies A taxpayer without a disaster freeze can self-identify for disaster relief. The optional Disaster Job Aid (see IRM 4.2.2.6 (4)) may be used to make and document a disaster freeze determination and compliance relief determination. If the optional Disaster Job Aid is not used, examiners must follow and document the procedures below. The disaster freeze and compliance relief determinations must be documented on the job aid or a supporting workpaper filed under the 6XX reference number created in IRM 4.2.2.6 (3). Examiners must confirm and document that a –O or –S freeze is not present on the taxpayer's account. If the taxpayer has a –O freeze, follow the procedures in IRM 4.2.2.6.1. If the taxpayer has a –S freeze, follow the procedures in IRM 4.2.2.6.2. When taxpayers contact the IRS to self-identify, they must provide the reason(s) they meet the criteria to qualify for disaster relief. If a disaster freeze is not present and a taxpayer self-identifies for disaster relief, they must be assigned to one of the following groups: Group A: Affected taxpayers as defined in 26 CFR 301.7508A-1(d) not previously identified by the IRS. See IRM 25.16.1.3(4). Caution: Taxpayers included in 26 CFR 301.7508A-1(d)(ix) are identified on a Servicewide basis. If the taxpayer does not fall into one of the eight categories in 26 CFR 301.7508A-1(d)(i) through 26 CFR 301.7508A-1(d)(viii), the taxpayer should only be considered for assignment to Group B. Group B: All other taxpayers who self-identify. Example: A taxpayer caring for extended family members who are affected taxpayers may qualify for assignment to Group B. If a taxpayer is assigned to Group A in IRM 4.2.2.6.3 (2), they are eligible for a manual –O or –S freeze depending on the specific ZIP Code of the taxpayer's principal residence or business location. Use the "Search for a ZIP Code" feature on the IRS Disaster Memos and Declarations by Calendar Year website to determine if the –O or –S freeze is applicable. To manually request the input of a disaster freeze, follow the procedures in Form 3177 Preparation - Manual Input of a –O or –S Freeze Job Aid. Example: Example 1: A taxpayer's principal residence is outside the IRS designated disaster area, but their tax records are maintained in the IRS designated disaster area that was provided a –O freeze. The taxpayer qualifies for a manual –S freeze. Example: Example 2: A taxpayer's principal residence is outside the IRS designated disaster area, but was visiting family when he was injured by a disaster. The IRS designated disaster area is eligible for a –O freeze. The taxpayer qualifies for a manual –S freeze. Caution: The only scenario where a taxpayer qualifies for a manual –O freeze is when their principal residence or business location is located in an IRS designated disaster area eligible for a –O freeze. If the taxpayer was assigned to Group B in IRM 4.2.2.6.3 (2), the taxpayer is not eligible for a disaster freeze. The following table can be used to make a compliance relief determination for taxpayers without a disaster freeze who self-identify: Reminder: The result of the freeze determination has no impact on the compliance relief determination. If Then The taxpayer is assigned to Group A Document the following: The case is not included on the list at IRM 4.2.2.6.4 A statute review was completed and an extension secured, if applicable. (see IRM 4.2.2.7) The final determination regarding compliance relief If the taxpayer is eligible for compliance relief, proceed to IRM 4.2.2.6.3 (6). If the taxpayer is not eligible for relief, document the reason why and continue with compliance activity. The taxpayer is assigned to Group B The decision to postpone compliance activity must be made on a case-by-case basis. Examples of factors to consider include: Access to records needed to proceed with compliance activity, Personal impact causing stress and/or fatigue (e.g., loss of personal belongings, damage to property, etc.), and/or Impact to associates and/or relatives of the taxpayer (e.g., a taxpayer caring for a relative who was impacted by the disaster) The above list is not all-inclusive. The examiner should use sound judgement and, if warranted, obtain managerial input. If the factors do not warrant consideration of compliance relief, document the determination and continue with compliance activity. If the factors warrant consideration of compliance relief, then document the following: The case is not included on the list at IRM 4.2.2.6.4) A statute review was completed and an extension secured, if applicable (see IRM 4.2.2.7) The final determination regarding compliance relief If the taxpayer is eligible for compliance relief, proceed to IRM 4.2.2.6.3 (6). If the taxpayer is not eligible for compliance relief, document the reason why and continue with compliance activity. If the taxpayer is eligible for compliance relief, document the following: A previously scheduled appointment was canceled, if applicable. For taxpayers assigned to Group A, Letter 6016 was issued if a 30-day letter was scheduled to default during the postponement period. Otherwise, Letter 6029 was issued. For taxpayers assigned to Group B, Letter 6102 was issued. Note: Letter 6102 has selectable paragraphs. If a 30-day letter will default during the postponement period, choose Selectable Paragraph 1 to withdraw the 30-day letter. Otherwise, choose Selectable Paragraph 2. The proper ARC and tracking code has been updated for all open years in ERCS (see IRM 4.2.2.5.2). The FEMA Declaration Number, postponement period start date, and postponement period end date. Brief summary of the case status and resolved issues when compliance activity was postponed. Actions that will be completed during the postponement period, if any (see IRM 4.2.2.4.1.2). Next planned actions after the postponement period expires.
Cases Not Subject to Postponement of Compliance Activity
4.2.2.6.4 (05-29-2019) Cases Not Subject to Postponement of Compliance Activity Compliance activity will not be postponed for the following: Cases involving jeopardy/ termination assessments. Cases in AIMS status 18, Acceptance by Criminal Investigation (see IRM 4.2.2.6.4 (2)). Grand jury cases. Cases with exigent circumstances (see IRM 4.2.2.6.4.1), including certain short statute cases (see IRM 4.2.2.7). Cases where the taxpayer has opted out of the postponement period (see IRM 4.2.2.4.2). Criminal enforcement activity includes, but is not limited to, cases in AIMS status 18. In general, criminal enforcement activity, including grand jury and trial preparation assistance, will not be postponed. Disaster relief will be determined by the controlling jurisdiction (e.g., IRS, Department of Justice, etc.) on a case-by-case basis. For cases where Examination is providing cooperating agent assistance to Criminal Investigation (CI), the examiner and group manager will contact the assigned special agent to reach a determination on relief. Where needed, Counsel should be contacted and relief discussed prior to finalizing a determination. If a case is not subject to postponement of compliance activity when a –O freeze is present, the –O freeze should not be removed from the taxpayer's account or replaced with a –S freeze.
Exigent Circumstances
4.2.2.6.4.1 (05-29-2019) Exigent Circumstances An exigent circumstance is one involving the loss of opportunity for the government to assess or collect taxes due, such as the expiration of the statute of limitations (see IRM 4.2.2.7), assets being placed beyond the reach of the government, or expiration of the 24-month mandatory acceptance offer in compromise period. Note: As a general rule, an affected taxpayer's indication that they may file for bankruptcy is not an exigent circumstance. Group managers and examiners must exercise good judgment and consider all relevant factors including the amount of the liability, the time remaining on the statute of limitations (see IRM 4.2.2.7), the taxpayer's individual circumstances and other matters to determine if exigent circumstances exist. If an exigent circumstance exists regarding an affected taxpayer, compliance activity may be pursued with group manager approval. Note: Group manager approval is not required if the exigent circumstance is the expiration of the statute of limitations during the postponement period (see IRM 4.2.2.7).
Protection of Statute of Limitations
4.2.2.7 (05-29-2019) Protection of Statute of Limitations Statutes must be controlled and protected under all circumstances. Generally, the –O freeze does not suspend the running of the statute. Examiners have the primary responsibility for identifying and protecting the statutes of limitations for returns in their custody. Prior to providing compliance relief, the examiner must review the current statute dates for all years under examination. If the earliest Assessment Statute Expiration Date (ASED) will have at least 180 days remaining after the postponement period end date, no action related to the statute is required during the postponement period. If the earliest ASED will expire during the postponement period, see IRM 4.2.2.7.1. If the earliest ASED will have less than 180 days remaining during the postponement period, see IRM 4.2.2.7.2.
Statutes Expiring During Postponement Period
4.2.2.7.1 (02-07-2024) Statutes Expiring During Postponement Period If the statute will expire during the postponement period, the examiner should call the taxpayer using soft contact procedures (see IRM 4.2.2.8.1) to explain the statute needs to be protected to postpone compliance activity. Revenue agents (RA) will not make a field visit. Note: In instances where the postponement period is extended (see IRM 4.2.2.10 (2)), examiners should advise the taxpayer of the new postponement period end date. Regardless of whether the examiner can reach the taxpayer by phone, a statute extension should be solicited following the procedures contained in IRM 25.6.22, Extension of Assessment Statute of Limitations By Consent. If the taxpayer agrees to extend the statute, follow the procedures in IRM 25.6.22.5.12, Examiner's Responsibility after Receipt of Consent. Note: If the postponement period was extended (see IRM 4.2.2.10 (2)), after securing the statute extension issue Letter 6107, Extension of Postponement Period - Disaster, to advise the taxpayer of the extended postponement period end date and continue postponement of compliance activity. If the taxpayer does not extend the statute, prepare and issue an agreed examination report with the appropriate Letter 5153, Examination Report Transmittal - Statute less than 240 Days (Straight Deficiency), (based on the type of examination) to notify the taxpayer they must agree to extend the period for assessment for Appeals to consider their case if it is unagreed. Allow 10 days for the taxpayer to respond. If the taxpayer refuses to extend the statute or does not respond, close the case using the appropriate unagreed case closing procedures. Note: For multi-year cases, examiners should split and close the tax year(s) with a statute expiring within 180 days of the postponement period end date and continue to postpone compliance activity for the remaining year(s) until the end of the postponement period. See IRM 4.10.8.7, Splitting Multi-Year Examination Cases, for procedures for splitting cases. Note: If the taxpayer has a –O freeze, notate Form 3198 in the Forward to Technical Services, Other section: "–O freeze present - statute expires during postponement period."
Statutes with Less Than 180 Days Remaining During Postponement Period
4.2.2.7.2 (05-29-2019) Statutes with Less Than 180 Days Remaining During Postponement Period In instances where the earliest ASED will have less than 180 days remaining during the postponement period, allow a minimum of 60 days after the postponement period start date before contacting the taxpayer to solicit a statute extension. This will allow the taxpayer time to recover from the immediate effects of the disaster. The examiner should use soft contact procedures (see IRM 4.2.2.8.1) and explain the statute needs to be protected to continue to postpone compliance activity. RAs will not make a field visit. Exception: If the taxpayer self-identifies for compliance relief and the statute will have less than 180 days remaining during the postponement period, do not wait 60 days. A statute extension should be solicited when the taxpayer requests relief. Exception: The requirement to allow a minimum of 60 days before soliciting a statute extension does not apply during an extended postponement period (see IRM 4.2.2.10 (2)). When soliciting a statute extension, the procedures contained in IRM 25.6.22 apply. If the taxpayer agrees to extend the statute, follow the procedures in IRM 25.6.22.5.12 and postpone compliance activity. Note: If the postponement period was extended (see IRM 4.2.2.10 (2)), after securing the statute extension issue Letter 6107, to advise the taxpayer of the extended postponement period end date and continue postponement of compliance activity. If the taxpayer does not extend the statute, prepare and issue an agreed examination report with the appropriate Letter 5153 (based on the type of examination) to notify the taxpayer they must agree to extend the period for assessment for Appeals to consider their case if it is unagreed. Allow 10 days for the taxpayer to respond. If the taxpayer refuses to extend the statute or does not respond, close the case using the appropriate unagreed case closing procedures. Note: If the taxpayer has a –O freeze, notate Form 3198 in the Forward to Technical Services, Other section: "–O freeze present - statute reaches < 180 days during postponement period" if the case is closed during the postponement period.
Contacting Affected Taxpayers
4.2.2.8 (05-29-2019) Contacting Affected Taxpayers The impact on taxpayers located in an IRS designated disaster area can be wide ranging. While one taxpayer may experience little to no impact, another may suffer catastrophic losses. Therefore, examiners should exercise extreme sensitivity when communicating with any taxpayer who may have been impacted by a recent disaster and use soft contact procedures (see IRM 4.2.2.8.1). Contact should begin with an assessment of the impact of the disaster on the taxpayer. The manner in which a taxpayer is contacted varies depending on the severity of the disaster, as well as the facts and circumstances of the case. The following will apply when taxpayers have a systemic disaster freeze (–O or –S): Cases with a –O freeze should receive Notice 1462, Important! You Have More Time to File and Pay Your Taxes Due to a Disaster, with all written correspondence and soft contact should be used when initiating verbal communication with the taxpayer to cancel a previously scheduled appointment. In addition, Letter 6016 is issued to withdraw a 30-day letter and postpone compliance activity (see IRM 4.2.2.8.3) or Letter 6029 is issued to postpone compliance activity when a 30-day letter was not scheduled to default during the postponement period (see IRM 4.2.2.8.2). Letter 6016 and Letter 6029 explain available filing and payment relief and provide an opportunity for the taxpayer to opt out of the postponement period. Cases with a –S disaster freeze should receive Notice 1462 with all written correspondence and soft contact should be used when initiating verbal communication with the taxpayer. Taxpayers with a –S freeze may initiate contact to self-identify for compliance relief (see IRM 4.2.2.8 (3)). Generally, contact is initiated by a taxpayer who self-identifies for disaster relief. Taxpayers who self-identify will have a –S freeze or no freeze present (see IRM 4.2.2.6.2 and IRM 4.2.2.6.3). Examiners should exercise extreme sensitivity and use soft contact procedures when communicating with these taxpayers. For cases where no disaster freeze is present, examiners should use soft contact procedures until a determination is made regarding whether the taxpayer is an affected taxpayer (see IRM 4.2.2.5).
Soft Contact Procedures
4.2.2.8.1 (05-29-2019) Soft Contact Procedures Soft contact entails approaching the taxpayer with caution and extreme sensitivity to their personal circumstances. Stress and fatigue are factors to consider even in instances where the taxpayer did not experience any personal, monetary, or physical damage from the disaster. Soft contact must be used when initiating contact with a taxpayer who has a –O freeze. In addition, soft contact is required for the following situations: Taxpayer is situated in an area where a disaster has occurred, but did not receive a –O freeze (e.g., taxpayer received a –S freeze). Taxpayer self-identified even when the taxpayer is located outside the geographic area where the disaster occurred. Taxpayer received a –O freeze, but the postponement period has expired. A follow-up to a prior soft contact where it was determined the taxpayer was affected by a disaster. A taxpayer-initiated contact when a –O freeze is present.
Contacting Taxpayers to Postpone Compliance Activity (No 30-Day Letter)
4.2.2.8.2 (05-29-2019) Contacting Taxpayers to Postpone Compliance Activity (No 30-Day Letter) If compliance activity is postponed for an in-process examination (i.e., prior contact has been made by the examiner) and a 30-day letter is not scheduled to default during the postponement period, call the taxpayer to cancel a previously scheduled appointment. Explain the postponement is being provided to allow the taxpayer an opportunity to recover in light of the disaster. Advise the taxpayer a letter will be issued confirming the postponement of activity. If an appointment was not previously scheduled, do not call the taxpayer. Issue Letter 6029 or Letter 6102, depending on whether the taxpayer is eligible for a disaster freeze. Taxpayer is eligible for a disaster freeze: A taxpayer with a manual or systemic disaster freeze (–O or –S) will be issued Letter 6029. This letter explains compliance activity has been postponed and the filing and payment relief available to the taxpayer. The letter also provides an opportunity for the taxpayer to opt out of the postponement period. Note: A taxpayer with a –S freeze should only receive Letter 6029 if the taxpayer self-identifies and is provided compliance relief (see IRM 4.2.2.6.2). Taxpayer is not eligible for a disaster freeze: A taxpayer not eligible for a disaster freeze, but who self-identifies and is granted relief from compliance activity (see IRM 4.2.2.6.3) will be issued Letter 6102. This letter will explain that compliance activity has been postponed and filing and payment relief is not available. Note: Letter 6102, has selectable paragraphs. If a 30-day letter is not scheduled to default during the postponement period, choose Selectable Paragraph 2.
Contacting Taxpayers to Postpone Compliance Activity (Withdraw 30-Day Letter)
4.2.2.8.3 (05-29-2019) Contacting Taxpayers to Postpone Compliance Activity (Withdraw 30-Day Letter) If compliance activity is postponed and a 30-day letter (e.g., Letter 569, Full/Partial Preliminary Claim Disallowance; Letter 915; or Letter 950) will default during the postponement period, the letter must be withdrawn and reissued at the end of the postponement period, unless exigent circumstances exist. To withdraw the 30-day letter, issue Letter 6016 or Letter 6102, depending on whether the taxpayer is eligible for a disaster freeze. Taxpayer is eligible for a disaster freeze: A taxpayer with a manual or systemic disaster freeze (–O or –S) will be issued Letter 6016. This letter will explain the 30-day letter is being withdrawn and the filing and payment relief available to the taxpayer. The letter will also provide an opportunity for the taxpayer to opt out of the postponement period. Note: Letter 6016 will only be issued to a taxpayer with a –S freeze if the taxpayer self-identifies and is provided compliance relief (see IRM 4.2.2.6.2). Taxpayer is not eligible for a disaster freeze: A taxpayer not eligible for a disaster freeze, but who self-identifies and is granted relief from compliance activity (see IRM 4.2.2.6.3) will be issued Letter 6102. This letter explains the 30-day letter is being withdrawn and compliance activity is postponed. The letter also explains that filing and payment relief is not available. Note: Letter 6102, has selectable paragraphs. If a 30-day letter is scheduled to default during the postponement period, choose Selectable Paragraph 1. RA cases will remain in Status 13 (30-Day). Tax Compliance Officer (TCO) cases will remain in Status 12 (Started) and the AC will be updated to 08 (FOLLOW-UP ACT). If the response due date for a 30-day letter occurred before the postponement period start date, but the case has not yet been forwarded to Technical Services, notate Form 3198 in the Forward to Technical Services, Other section: "Examination activity postponed – 30-day letter defaulted before postponement period start date" and forward to Technical Services.
Status 10 Inventory
4.2.2.9 (02-12-2020) Status 10 Inventory When a federally declared disaster impacts the Examination group's geographic coverage area, Status 10, Assigned–No Time Applied, inventory at the group and examiner level must be reviewed for the presence of a –O freeze. If a –O freeze is present, consider surveying the return based on the facts and circumstances of the case. The following factors should be considered in making survey determinations: Potential non-availability of books and records, Materiality of the issues, and Postponement period end date in relation to the ASED and IRM 4.10.2.2.2, 26/27 Month Examination Cycles. Note: Some types of cases should not be surveyed due to the nature of the examination (e.g., CI referral). When surveying cases: Managers must follow the procedures in IRM 1.4.40.4.6.3, Surveying Cases, to close returns survey before assignment (SBA). Examiners must follow the procedures in IRM 4.10.2.5, Decision to Survey a Return, to close returns survey after assignment (SAA). Note: If an employee return is in status 10 and the employee is an affected taxpayer, the guidance in IRM 4.2.6.6, Survey of Employee Returns, should be considered. When a status 10 return with a –O freeze is not surveyed, document the disaster postponement period in the case file and do not contact the taxpayer until after the postponement period has expired unless exigent circumstances exist. Note: Cases with a –S freeze can be started, but Notice 1462 must be sent with the initial contact letter and all subsequent correspondence.
Expiration of Postponement Period
4.2.2.10 (02-12-2020) Expiration of Postponement Period Prior to resuming compliance activity, the examiner must confirm the postponement period has not been extended. Postponement Period Extended: The postponement period can be extended for all or part of an IRS designated disaster area (see IRM 25.16.1.5.1, Determining the Appropriate Level of IRS Disaster Tax Relief Under IRC 7508A). When a postponement period is extended, a supplemental Disaster Assistance Memorandum is issued. The supplemental memorandum can be accessed through the IRS Disaster Memos and Declarations by Calendar Year website. It identifies the areas eligible for the extension and provides the extended postponement period end date. Caution: Examiners should not rely on the presence of a –O freeze to determine if the postponement period has been extended. Due to IT programming limitations, it is possible the postponement period is extended even when the disaster freeze was removed from the module. It may take several weeks for the –O freeze to reappear on the module when an extension has been provided. When the postponement period is extended, examiners must verify statutes on all impacted cases and take the following appropriate action: Statute will have at least 180 days remaining when the extended postponement period expires: Issue Letter 6107 advising the taxpayer of the extended postponement period end date and continue postponement of compliance activity. Statute expires during extended postponement period: Follow the procedures in IRM 4.2.2.7.1. Statute will have less than 180 days during the extended postponement period: Follow the procedures in IRM 4.2.2.7.2. Postponement Period not Extended: Resume compliance activity (see IRM 4.2.2.10.1).
Resumption of Compliance Activity After Postponement Period Expires
4.2.2.10.1 (05-29-2019) Resumption of Compliance Activity After Postponement Period Expires Compliance activity may resume after the postponement period expires and the examiner confirms it was not extended. Example: The postponement period end date is Wednesday, January 31, 2024 and the period was not extended. Therefore, compliance activity may resume on Thursday, February 1, 2024. Adherence to the statute procedures in IRM 4.2.2.7 should ensure there are no disaster cases with less than 180 days on the statute when the postponement period expires. However, examiners must still conduct a statute review for all cases when the postponement period expires. If cases are identified with statutes expiring in less than 180 days, the examiner must take the following actions: Contact the taxpayer by phone using soft contact procedures (see IRM 4.2.2.8.1). The purpose of the contact is to advise the taxpayer the postponement period has expired, compliance activity is resuming, and the statute needs to be protected. If the examiner is unable to reach the taxpayer, the examiner should leave a message requesting the call be returned. If the contact number is no longer in service and new contact information can't be secured, or the taxpayer does not return the call within a reasonable period, examiners should solicit a consent by mail following the procedures in (b) below. RAs may attempt a field visit. Regardless of whether the examiner can personally reach the taxpayer, a consent should be solicited following procedures in IRM 25.6.22. Generally, at least 10 calendar days from the date the letter is issued should be allowed for the taxpayer to respond. If the taxpayer extends the statute, continue with the appropriate compliance activity. If the 30-day letter was previously withdrawn, TCOs should reissue the 30-day letter while RAs should only reissue the 30-day letter when it is determined the case is unagreed. If the taxpayer does not extend the statute, prepare and issue an agreed examination report with the appropriate Letter 5153 (based on the type of examination) to notify the taxpayer they must extend the period for assessment for Appeals to consider their case if it is unagreed. Allow 10 days for the taxpayer to respond. If the taxpayer refuses to extend the statute or does not respond, close the case using the appropriate unagreed case closing procedures. To assist with the resumption of compliance activity, refer to the "next planned actions after the postponement period expires" (see IRM 4.2.2.6.1 (1), IRM 4.2.2.6.2 (1), IRM 4.2.2.6.3 (6), or the optional Disaster Job Aid, if used) that were documented when compliance activity was postponed. When resuming compliance activity, the examiner should use soft contact procedures (see IRM 4.2.2.8.1). The impact of the disaster on the taxpayer should be assessed. Based on the taxpayer's circumstances, compliance activity may be deferred beyond the postponement period end date for a reasonable period, if the statute is protected and group manager approval is secured.
Reconstructed Records and Oral Testimony
4.2.2.10.2 (05-29-2019) Reconstructed Records and Oral Testimony Examiners must exercise flexibility and sound judgment when evaluating alternative records provided in lieu of records that may have been destroyed during the disaster. Taxpayers can refer to Pub 3067, IRS Disaster Assistance - Federally Declared Disaster Area, for assistance with reconstructing records after a disaster. In some circumstances, a taxpayer's oral testimony may be the only evidence available. If so, examiners should follow the guidance in IRM 4.10.7.3.2, Oral Testimony.
Technical Services
4.2.2.11 (05-29-2019) Technical Services Generally, Technical Services employees will rely on the presence of a –O freeze to make compliance relief determinations. Relief from compliance activity for a case in Technical Services will primarily consist of postponing one of the following actions: Issuing a statutory notice of deficiency or statutory notice of claim disallowance, Defaulting a statutory notice of deficiency, or Closing a case when an agreement is received.
Technical Services - Receiving –O Freeze Cases from the Field
4.2.2.11.1 (02-07-2024) Technical Services - Receiving –O Freeze Cases from the Field If Technical Services receives a –O freeze case from the Field without exigent circumstances (see IRM 4.2.2.6.4.1) or for other actions transparent to the taxpayer (e.g., fraud suspense, etc.), the case should be returned to the examination group. Note: When a disaster memo has been issued for the taxpayers general geographic area and the taxpayer does not have a –O freeze in IDRS, the reviewer can verify if the taxpayer is subject to disaster relief by verifying their ZIP Code through the IRS Disaster Memos and Declarations by Calendar Year website.
Technical Services - Inventory Tracking - ERCS
4.2.2.11.2 (05-29-2019) Technical Services - Inventory Tracking - ERCS For cases in Status 25 (Pre 90-Day) without exigent circumstances (see IRM 4.2.2.6.4.1), the statutory notice can be prepared, but not issued. Once the notice has been prepared, update all tax years to Suspense Type 508, Review Type 29. The Action Date should be adjusted to reflect the postponement period end date plus one day. Do not issue the statutory notice until after the postponement period expires. For cases in Status 24 (90-Day Letter - (Notice of Deficiency)) with a default date during the postponement period, the Action Date should be adjusted to reflect the postponement period end date plus one day. For cases in Status 21 (In transit to Technical Services), update ERCS to the appropriate 2X/3X Status Code, Suspense Type 508, Review Type 29. The Action Date should be adjusted to reflect the postponement period end date plus one day. Notice of deficiency and notice of claim disallowance cases can be assigned and reviewed during the postponement period. However, the prepared notice should not be issued until after the postponement period expires unless exigent circumstances exist (see IRM 4.2.2.6.4.1).
Technical Services - Statutory Notices of Deficiency
4.2.2.11.3 (05-29-2019) Technical Services - Statutory Notices of Deficiency Actions that must be taken related to statutory notices of deficiency for affected taxpayers granted compliance relief depend on when a notice was issued or defaults (i.e., before or during the postponement period), or when the taxpayer petitions the Tax Court. Statutory notices of deficiency defaulted before postponement period began. See IRM 4.2.2.11.3.1. Statutory notices of deficiency issued during postponement period. See IRM 4.2.2.11.3.2. Statutory notices of deficiency defaulted during postponement period. See IRM 4.2.2.11.3.3. Taxpayer petitions the Tax Court. See IRM 4.2.2.11.3.4.
Technical Services - Statutory Notices of Deficiency Defaulted Before Postponement Period Began
4.2.2.11.3.1 (05-29-2019) Technical Services - Statutory Notices of Deficiency Defaulted Before Postponement Period Began Statutory notices of deficiency issued to affected taxpayers that defaulted before the postponement period can be assessed during the postponement period. The –O freeze should not be removed from the taxpayer's module. Before closing the case to Centralized Case Processing (CCP) for assessment, notate Form 3198 in the Special Features, Other Instructions section: "–O Freeze on taxpayer's module. Statutory notice of deficiency defaulted prior to postponement period."
Technical Services - Statutory Notices of Deficiency Issued During Postponement Period
4.2.2.11.3.2 (02-12-2020) Technical Services - Statutory Notices of Deficiency Issued During Postponement Period When issuing statutory notices of deficiency during a postponement period, IDRS should be researched to determine if a disaster freeze is present. Since notices can be issued to multiple addresses, all ZIP Codes reflected on the statutory notices that are within geographic proximity to the IRS designated disaster area should be entered in the IRS Disaster Memos and Declarations by Calendar Year website to determine if a disaster freeze is present. If any ZIP Code where the notice will be sent has a –O freeze, the notice should not be issued during the postponement period unless exigent circumstances exist (see IRM 4.2.2.6.4.1). The most common exigent circumstance for a case received in Technical Services is an imminent statute (90 days or less). For these cases, the group manager will obtain territory manager approval to issue the notice during the postponement period. This approval must be clearly documented in the case file.
Technical Services - Statutory Notices of Deficiency Defaulted During Postponement Period
4.2.2.11.3.3 (02-07-2024) Technical Services - Statutory Notices of Deficiency Defaulted During Postponement Period A statute review must be conducted when a statutory notice of deficiency defaults during the postponement period. The actions to be taken depend on how many days remain on the recomputed statute (see IRM 4.8.9.22.1, Updating the Assessment Statute Expiration Date) when the postponement period expires. If Then There will be more than 60 days remaining on the statute when the postponement period expires. Hold the case in Technical Services until the postponement period expires. Once the postponement period expires, close the case to CCP for assessment (see IRM 4.8.9.28, Defaulted Notices). There will be 60 days or less remaining on the statute when the postponement period expires. Determine if the taxpayer has filed a petition with the Tax Court and take one of the following actions: Taxpayer has filed a petition: Follow the procedures in IRM 4.8.9.27.4, Processing Petitioned Cases. Taxpayer has not filed a petition: Request a quick assessment when the statute reaches 60 days or less. Quick assessment procedures can be found in the Quick/Prompt and Partial Assessments article. Verify the assessment has posted and hold the case until the postponement period expires. After the postponement period expires, close the case to CCP if the taxpayer has not filed a petition. If the taxpayer has filed a petition, see the "Note" below. Reminder: Ensure Form 5344 is updated prior to final closing of the case to CCP so the quick assessment amount is captured (see IRM 4.38.1.7.3.3.10Sound, Examination Results). Note: Pursuant to 26 CFR 301.7508A-1(c)(1)(iv), taxpayers with a –O or –S freeze have until the postponement period end date to file a timely Tax Court petition. This only applies if the statutory notice was issued with a default date within the postponement period. In this scenario, if a quick assessment was made but the taxpayer petitions the Tax Court before the postponement period expires, the premature assessment must be abated prior to closing to Appeals.
Technical Services - Taxpayer Petitions the Tax Court
4.2.2.11.3.4 (05-29-2019) Technical Services - Taxpayer Petitions the Tax Court Processing timeframes for docketed cases are established by the Tax Court (see IRM 4.8.9.27.3, Identifying Petitioned Cases). Therefore, the postponement period does not impact the timely processing of docketed cases. Petitions filed by affected taxpayers granted compliance relief should be forwarded to Appeals, using normal closing procedures, but Form 3198 must reflect the following in the Forward to Technical Services, Other section: "Taxpayer is subject to the disaster postponement period." Pursuant to 26 CFR 301.7508A-1(c)(1)(iv), taxpayers with a –O or –S freeze have until the postponement period end date to file a timely Tax Court petition. This only applies if the statutory notice was issued with a default date within the postponement period. See IRM 4.2.2.11.3.3.
Technical Services - Unagreed Appeals Cases Received
4.2.2.11.4 (05-29-2019) Technical Services - Unagreed Appeals Cases Received If the affected taxpayer's request to appeal occurred before the designated disaster, a Technical Services reviewer must contact the taxpayer or representative to confirm that the taxpayer is still ready for Appeals consideration. This contact must be documented in the case activity record. If the affected taxpayer is ready for Appeals consideration, the case may close to Appeals following regular case processing procedures. If applicable, a statute extension is required and must be solicited if the statute will have less than 365 days when the case is received in Appeals. If the affected taxpayer is not ready for Appeals consideration, they should be advised their case will not be forwarded until the postponement period expires. At the end of the postponement period, the statute date will be reviewed to determine whether a statute extension needs to be secured to allow for normal case closure to Appeals. Do not solicit a statute extension during the postponement period unless an exigent circumstance exists.
Technical Services - Correspondence Received During Postponement Period
4.2.2.11.5 (05-29-2019) Technical Services - Correspondence Received During Postponement Period When correspondence is received from taxpayers during the postponement period, Technical Services employees should proceed with caution. If the case file or correspondence contains telephone contact information, the taxpayer should be contacted using soft contact procedures (see IRM 4.2.2.8.1). Explain to the taxpayer that correspondence was received and the IRS is aware they may have been impacted by the recent disaster. If a statutory notice of deficiency was previously issued and the default date is within the postponement period, explain that the date to petition the Tax Court is extended until the end of the postponement period. The taxpayer must opt out of the postponement period before their case can be processed as a notice of deficiency reconsideration case (see IRM 4.8.9.25.2.1, Notice of Deficiency Reconsideration Cases). If the taxpayer wants to opt out of the postponement period, follow the procedures in IRM 4.2.2.4.2 and proceed. If the taxpayer does not opt out, they generally should be advised to petition if they disagree, otherwise the tax will be assessed. Note: Sufficient time prior to the expiration of the 90 days (or 150 days) must remain after the postponement period expires to reconsider the case. Note: Do not issue Letter 556, Acknowledgement of Protests, Correspondence and Requests for Interviews, to taxpayers who have a –O freeze unless the taxpayer opts out of the postponement period.
Technical Services - Agreements Received During Postponement Period
4.2.2.11.6 (05-29-2019) Technical Services - Agreements Received During Postponement Period Agreements received by Technical Services from taxpayers with a –O freeze present on their module should not be closed to CCP until after the postponement period expires (see IRM 4.2.2.4.1.1.1 (2)), unless an exigent circumstance (see IRM 4.2.2.6.4.1) exists. If an exigent circumstance exists, follow the case closing procedures in IRM 4.2.2.4.1.1.1 (1). Payments received should be processed according to normal procedures (see IRM 4.2.2.4.1.2).
Technical Services - Cases in Bankruptcy Suspense
4.2.2.11.7 (05-29-2019) Technical Services - Cases in Bankruptcy Suspense Disaster cases should remain in bankruptcy suspense and normal bankruptcy procedures will be followed. Updates to ERCS Suspense Type and Review Type are not immediately required. If an action needs to be taken (e.g., bankruptcy discharged/dismissed) during the postponement period, the case should be updated on ERCS to Suspense Type 508 - Action Date [postponement period end date], Review Type 29. If an exigent circumstance exists, see IRM 4.2.2.6.4.1.
Technical Services - Cases in Fraud Suspense
4.2.2.11.8 (05-29-2019) Technical Services - Cases in Fraud Suspense Disaster cases should remain in fraud suspense and normal fraud suspense procedures will be followed. Updates to ERCS Suspense Type and Review Type are not immediately required. If an action needs to be taken (e.g., closing report received on a fraud suspense case) during the postponement period, the case should be updated on ERCS to Suspense Type 508 - Action Date [postponement period end date], Review Type 29. If an exigent circumstance exists, see IRM 4.2.2.6.4.1.
Technical Services - OVDI Cases
4.2.2.11.9 (05-29-2019) Technical Services - OVDI Cases Case actions to be completed within Technical Services can occur since the case review does not require taxpayer contact. A copy of the signed Form 906, Closing Agreement on Final Determination Covering Specific Matters, may be issued to the taxpayer using Letter 1595-G, Exam Executed Closing Agreement Transmittal Related to Disaster Relief. Notice 1462 should be included. The case should not be closed to CCP since Form 906 is an agreement and the guidance outlined in IRM 4.2.2.4.1.1.1 applies.
Technical Services - Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)
4.2.2.11.10 (05-29-2019) Technical Services - Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) For tax years beginning before January 1, 2018, Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) statutes are controlled at the partnership level. If the partnership has a –O freeze, notices should not be issued to the Tax Matters Partner (TMP) during the postponement period unless exigent circumstances exist (see IRM 4.2.2.6.4.1). If a partnership does not have a –O freeze, it is possible that one or more of the partners have a –O freeze. If an agent sends notices to the TMP, we are required to send notices to the notice partners within certain time frames. The Partnership Control System (PCS) will suppress all partner notices generated by PCS when there is a –O freeze, except the Notice of Final Partnership Administrative Adjustment. When notices are suppressed, it gives the user the ability to override the suppression and have the notice generated if necessary. When a notice is suppressed, the campus will hold the notice as long as the statute allows or until the postponement period has ended.
Technical Services - Expiration of Postponement Period
4.2.2.11.11 (05-29-2019) Technical Services - Expiration of Postponement Period Once the postponement period has expired, determine if an extension to some or all of the IRS designated disaster area was provided. See IRM 4.2.2.10 (2) for more information regarding an extension of the postponement period.
Technical Services - Postponement Period Expired
4.2.2.11.11.1 (02-12-2020) Technical Services - Postponement Period Expired If the postponement period has expired and no extension was provided, activity may resume on the following business day. Example: The postponement period end date is Thursday, January 31, 2025. Therefore, activity may resume on Friday, February 1, 2025. When resuming activity, Technical Services employees should generally complete actions in the following order: Prepared statutory notices of deficiency should be issued immediately for those cases in Status 25, Suspense Type 508, Review Type 29. Cases with the most imminent statutes should be issued first. Notices of deficiency with a default date that occurred during the postponement period and were not assessed (see IRM 4.2.2.11.3.3) should be defaulted. Cases with the most imminent statutes should be defaulted first. Agreements (including Form 906) received during the postponement period should be processed and the cases closed to CCP. If a taxpayer submitted an appeals request, but indicated they were not ready for Appeals consideration during the postponement period, the statute should be reviewed to determine if sufficient time remains. Note: If there will be less than 365 days remaining on the statute when the case is received in Appeals, the taxpayer should be contacted and a statute extension solicited. If the taxpayer refuses to sign a consent, the case should not be forwarded to Appeals and a statutory notice of deficiency should be issued. Note: If there will be more than 365 days remaining on the statute when the case is received in Appeals, the case should be forwarded to Appeals. Review and take action on all correspondence received from affected taxpayers during the postponement period.
Technical Services - Postponement Period Extended
4.2.2.11.11.2 (05-29-2019) Technical Services - Postponement Period Extended If the postponement period was extended, activity may not resume except for the following: For cases in Status 24 with an original default date during the postponement period, the Action Date should be adjusted to reflect the extended postponement period end date plus one day. Statutory notices of deficiency and statutory notices of claim disallowance will not be issued to affected taxpayers during the extended postponement period unless exigent circumstances exist (see IRM 4.2.2.6.4.1). The Technical Services group should review all inventory and identify those cases with an imminent statute (90 days or less). For these cases, the group manager will obtain territory manager approval to issue the notice during the postponement period. This approval must be clearly documented in the case file.
Source: official text