VI VERI VENIVERSUM VIVUS VICI

Examination Actions Phase Legal Responses

Examination is the I.R.S. term for audit. If the I.R.S. doesn’t receive (1040) returns in response to the requests above, it typically generates a substitute for return, or SFR, for each year under investigation.

In times past, the I.R.S. would “file” a blank, unsigned return with generally only the person’s name, address, and social security number listed on it, but no figures. This “return” shows up on the IMF as “SFR 150” transaction code and is assessed as “0” amount due. The I.R.S. claimed that the blank forms are made under the authority of IRC § 6020(b), but they are neither made (filled out) nor signed. The I.R.S. then uses these invalid return entries that they have manufactured as the basis for the audit.

Somewhere around 2002 or 2003, or perhaps a bit earlier, the I.R.S. began an automated SFR process. Now, rather than filling out and filing a blank, unsigned return, the I.R.S. technician enters a SFR 150 transaction code into the IMF so that a tax year module can be opened “to facilitate” the assessment of taxes. Now there is no “return” at all issued under the authority of IRC 6020(b). Instead, the I.R.S. now makes a IRC 6020(b) certification “certifying” that the documents which are part of its proposed assessment “constitute” a return under IRC 6020(b), but the underlying statute has not changed, and no signed 1040 has been made.

The Proposed Assessment (“30-day letter”):

The I.R.S. “audit” of a non-existent “return” (SFR) results in a “deficiency.” A Form 4549 is generated to show the proposed assessment resulting from the claimed “deficiency,” and a 30-day letter is sent with the Form 4549 and Form 886-A. This letter, if responded to generally within 30 days, allowed for a person to ask for a reconsideration of the audit through the internal revenue service appeals office. It is discretionary on the part of the I.R.S. to forward the request to the appeals office, and for the appeals office to grant a hearing. (The Proposed Assessment letter is not required by the law to be sent, so it is not always used by the I.R.S.).

Responses to be used for these letters are:
1. When NO sources of income (actual names of payers) are named on the Form 866-A
(The general letter from the I.R.S. is a Letter 1862):

Written protest when non-filer received wages & salary, according to I.R.S.

Written protest when non-filer received NO wages or salary, just non-employee compensation or other types of income, according to I.R.S.

2. When NO sources of income (actual names of payers) are named on the Form 866-A and no letters requesting a tax return were received earlier (The general letter from the I.R.S. is a Letter 1862):

Written protest when non-filer received wages & salary, according to I.R.S.

Written protest when non-filer received NO wages or salary, just non-employee compensation or other types of income, according to I.R.S.

Enclosures to these letters are actually part of the enclosures to the CP-515 response above.

3. When sources of income (actual names of payers) are named on Form 866-A or elsewhere in the IRS letter (950):

Written protest when non-filer received wages & salary, according to I.R.S.

Written protest when non-filer received NO wages or salary, just non-employee compensation or other types of income, according to I.R.S.

4. For a Letter 2566:

Written protest when non-filer received wages & salary, according to I.R.S.

Written protest when non-filer received NO wages or salary, just non-employee

compensation or other types of income, according to I.R.S.

Other Examination Stage response letters Are Available Here!

OR, Check the Master List of Documents!


Two privacy act requests which generally have been made at this stage are for the IMF Complete (Individual Master File), and once it is received, the Substitute for Return documents made (but generally not executed) by the I.R.S.

 
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