What is an IRS Review?

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  • tara berks
    Moderator
    @t_berks
    #7493

    What is an IRS Review?

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    Refundtalk
    Keymaster
    @admin
    #7494

    IRS Review is the term used to describe the process that selects tax accounts with specific, pre-decided account activity occurring after notice generation, to be reviewed manually. This process allows tax examiners to analyze the account and the notice to decide if the information on the notice to be mailed is complete and represents the most current and up to date account information. Tax modules are also selected to intercept and correct possible processing errors and potential erroneous refunds.

    The ultimate goal of this review process is to allow the Service the opportunity to change inaccurate information on the notice before mailing to reduce taxpayer inquiries, both written and by phone. The end result will give the taxpayer the most accurate and current tax account information available at the time of mailing. The review of refund transcripts can decrease taxpayer burden and reduce the cost to the Service for recovery efforts.

    Notice Review employs the following to achieve its goal: Quality, Timeliness, Interest Reduction, Effectiveness, and Completeness.

    Quality

    1.  Notice accuracy is increased when appropriate feedback is provided to all areas that contribute to the generation of erroneous notices or refunds.
    2. An effective method must be developed to provide feedback to the responsible processing functions at a local level.               Reminder: This feedback must be provided weekly during the current filing season.
    3. In order for the process to work, Notice Review Tax Examiners must be allowed time to assemble and provide feedback information to the Team Lead, who will contact the appropriate functional area.

    4. The Notice Review Process System Notice Disposition Reports are used as a feedback tool. There are two basic formats for these reports:

      -The CP Format provides a breakdown of each notice by selection key for a given cycle.

      -The Key Total Format provides a breakdown of each selection key by CP number for a given cycle.

    5. The Cumulative history reports show year-to-date totals for the above reports. The weekly reports only show data for those
      keys with current cycle activity. The history reports show data for keys that have had activity at any time during the year.
    6. The historical records are used to assist in “feedback” sessions with functional areas that cause the generation of notices.

    Timeliness

    1. ALL selected notices must be reviewed, corrected and timely mailed to minimize any negative impact to the taxpayer. For Notice
      Review, timely means ALL of the following:

      -Mailing ALL selected notices (except “refund deletes”) on or before the Friday preceding the notice date

      -Completing ALL adjustments affecting refunds within one week of the Transaction Code (TC) 841 posting

      -Inputting adjustment actions on ALL other cases by the notice 23C Date

    Interest Reduction

    1. To help reduce the amount of interest IRS pays on refunds:

      -IRS has a 45-day interest-free period (from the later of the due date or the filing date) in which to process taxpayer refunds.
      By law, refunds not issued within that 45-day period must include credit interest.

      -Revisions to the process are made when necessary to review AND correct overpaid accounts without paying unnecessary interest.

    2. Reviewing, correcting, and mailing ALL notices timely allows the taxpayer the full allotted time to pay any outstanding balances. Generally, a taxpayer has 21 days from the date of the notice (10 days for notice amounts of $100,000 or more) to pay the outstanding balance without incurring additional interest charges.
    3. For proper guidance when reducing, computing or discussing interest, refer to IRM 20.2 (Interest IRM).

    Effectiveness

    1. The review of Math Error notices helps to identify those notices that historically have high error rates. It also provides
      valuable feedback that is used to refine selection criteria.

    Completeness

    1. Reviewing the entire tax return, and ALL tax modules related to a notice or transcript selected for review can include but is not limited to the review of:

    -Entity Module(s)

    -Outstanding Credit Balance Modules

    -Cross-reference TINs

    -Related Names

    -Freeze Condition

    Note: If the tax return is either unavailable or not required to complete the review, you are still required to review all tax modules related to the notice module.

    This list is by no means all-inclusive. See IRM 3.14.2.4.6 (General Review Procedures), for additional guidance.

    Quality Assurance Research

    1. Information generic to all returns must be verified and compared to the CP notice as well as the information contained in the Notice Review Process System package and Integrated Data Retrieval System. Research is required to ensure that the information contained on the tax return is processed as the taxpayer intended.
    2. Some of the most common research command codes used by Notice Review can be found in IRM 3.14.2.4.7, Common Command Codes Used in Notice Review.

    The ultimate goal of IRS Tax Return Review is to verify the accuracy of the information contained in all notices selected for review
    before mailing. All changes made to the taxpayer’s account must be correct and completed before cycle close out.

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