This IRM implements procedures affecting BBA Operations employees conducting actions for post-field audit cases and other assigned workstreams.

The CPAR generally provides for determination of adjustments, assessment, and collection of tax attributable at the partnership level.

The BBA CPAR applies to Subtitle A, Chapter 1 only and will not apply to the other taxes as shown below:

Section 1101 of the Bipartisan Budget Act of 2015 (BBA) as amended by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) and sections 201 through 207 of the Tax Technical Corrections Act of 2018 (TTCA) repealed Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) partnership procedures and electing large partnership provisions and replaced them with a new centralized partnership audit regime.

IRM 1.2.2.5.40, Delegation Order 4-52, Partnership Matters Under the Centralized Partnership Audit Regime.

The director, LB&I PTE practice area is responsible for the policies and procedures in this IRM section.

The deputy director, field support, PTE practice area has oversight of the BBA Operations program and policies and procedures in this IRM.

The program manager, BBA operations is responsible for providing program oversight and administration, per the procedures in this IRM. The program manager supervises team managers and staff.

The team managers are responsible for monitoring and overseeing inventory and program priorities. The team managers are responsible for critical date deadlines per the procedures in this IRM.

The revenue agents are responsible for making timely tax law determinations on assigned inventory, protecting statutes, and monitoring and prioritizing inventory management per the procedures in this IRM.

The tax examiners are responsible for timely processing of assigned inventory, supporting revenue agents, protecting statutes, and monitoring and prioritizing inventory management per the procedures in this IRM.

Reports to monitor BBA Operations are derived from a variety of sources, including the BBA CEAS Dashboard, BBA team inventory reports, and operational reviews. These tools provide management with timely and reliable information to account for cases within the operation, and measure program effectiveness.

All team managers and employees are responsible for inventory monitoring pursuant to this IRM.

Case assignments take into consideration BBA Operations program responsibilities and priorities.

Employee Integrated Data Retrieval System (IDRS) profiles segregate authority to adjust taxpayer accounts. Revenue agents do not have authority to make adjustments to taxpayer accounts. The tax examiners are responsible for making adjustments to taxpayer accounts based on the revenue agent’s determinations and other workload assignments.

The following table lists the commonly used terms:

The following table lists the commonly used acronyms:

See IRM 4.31.9, Centralized Partnership Audit Regime (BBA) Field Examination Procedures, for more information on field examination procedures, processes and guidelines to LB&I, SB/SE and Appeals employees who examine or work on partnership returns under BBA.

See IRM 25.6.23, Statute of Limitations, Examination Process-Assessment Statute of Limitations Controls.

See Exhibit 4.31.13-2, BBA Forms and Letters, for a list of BBA forms and letters.

The following table shows the IRC sections for statutes of limitations:

Refer to IRM 4.31.9.8.4.3, Form 872-M.

The IUA calculator is the application used to prepare the modified imputed underpayment calculations performed by the revenue agent. It can be accessed from the BBA CEAS Dashboard. However, the IUA calculator is a separate web-based platform and tool. The IUA calculator automates the IU calculation and modified IU calculation, allows users to approve and disallow requested modifications, and populates and generates the BBA exam reports that are mailed to the taxpayer.

Upon accessing the IUA calculator, the user can search for an existing case based on the ACN or with the combination of the taxpayer identification number (TIN) and the tax year. Generally, the case will already exist in the IUA calculator once the case is transferred to the BBA Operations, and the audit adjustments will have been previously added to the IUA calculator.

For most cases, the user will access the case and begin reviewing the requested modifications that uploaded to the IUA calculator from the electronic submission and acceptance of a Form 8980. Prior to considering and taking any approval action on requested modification(s), the user must also review the audit adjustments previously input into the IUA calculator and the IU calculation per the Form 14792 issued to the partnership and PR.

In rare circumstances, the case may not be available in the IUA calculator. The revenue agent will complete the following actions before calculating the modified IU:

There are times when the team member has to manually add modifications requested to the IUA calculator. Wait to input manual modifications until after the modification submission period is over since any manually created modifications could be corrected by submission through OFSS portal.

Steps for approval or disapproval of a request for modification.

Letter 5975, Form 15027 and Form 14726 are issued to the PR to communicate the modification determination. The PR has 10 days from the issuance date of Letter 5975 to respond.

The PR or valid POA may sign and return both Form 15027 and Form 14726 to waive their right to FPA issuance and consent to the assessment and collection of the modified IU. Determine if the proper PR signed both documents, if the ACN, partnership year, and reviewed year are correct, and if there is anything missing or incomplete. Complete the following actions based upon the forms and information reviewed:

The PR may request an appeals conference if there is disagreement with the modification determination. See IRM 4.31.13.9.3.1, Modification Determination - Appeals Procedures.

If there is no response from the PR or POA by the response deadline, refer to IRM 4.31.13.10, Notice of Final Partnership Adjustment (FPA), for issuance of the FPA.

In addition to the case documents within the case file, Appeals will upload the following NOPPA package to the Appeals file exchange on the BBA SharePoint:

If there is a PICF code 2 or an H freeze code, indicating BBA Chapter 2/2A PCS linkage, then certain forms must be provided by Appeals. If the forms are not included, contact Appeals to obtain them. The required forms are:

Tax examiner is responsible for removing the documents from the Appeals file exchange and uploading them to case file.

If the Form 8980, Partnership Request for Modification of Imputed Underpayments Under IRC Section 6225(c) or Form 8981, Waiver of the Period Under IRC Section 6231(b)(2)(A) and Expiration of the Period for Modification Submissions Under IRC Section 6225(c)(7) are received from the PR or DI after Appeals issued the NOPPA, refer to IRM 4.31.13.8, Modification Request Processing, Calculation and Determination Package, for Modification instructions.

The modification lead sheet is used to document actions taken.

Form 14792-A is a form issued by Appeals to document agreement on settled items. The signing of a Form 14792-A does not waive the right to modification or FPA issuance.

The NOPPA package issued by Appeals will include the Form 14792 detailing the adjustments as determined in the appeals conference. If Form 14792 is received and signed by the PR/DI, refer to IRM 4.31.13.9.3, Intake and Due Diligence of the Form 14792, for agreed procedures.

If no signed Form 14792 is received and no Form 8980 is timely filed, the case will continue to FPA preparation. If applicable, refer to IRM 4.31.13.10, Final Partnership Adjustment (FPA).

The tax examiner is responsible for the initial verification of timeliness and completeness of the Form 14792 received by mail or e-Fax. The tax examiner will notate IRS received date and verify PR of record against signature. The case will be then assigned for due diligence. The case should be worked within 2 business days of receipt. If 2 business days is not met, notify the team manager of why and document the history sheet.

The revenue agent is responsible for performing due diligence checks on the signed Form 14792 and must complete the following actions:

The tax examiner will prepare the case for closing by completing the following actions:

Prior to approving a Form 8981, review Form 8980, if submitted prior to or with a waiver, to ensure no corrections are needed. For Form 8981 approval, complete the following actions:

Letter 5940, BBA Approved/Unapproved Document Transmittal, will be prepared with the proper selectable paragraph for mailing.

After the revenue agent completes the steps above as outlined in paragraph 1 and 2 of this subsection, the tax examiner will perform the following steps:

The revenue agent will prepare Letter 5933 and Letter 5933-A, Form 15027 and Form 886-A. Send the FPA package to Counsel for review.

The FPA preparation should be started no later than 60 days prior to the 6225(c)(7) date.

Form 8988, Election for Alternative to Payment of the Imputed Underpayment - IRC Section 6226, must be submitted by the AP within 45 days of issuance of the FPA. Submission is required to be made through the OFSS portal.

Review and determine if Form 8988 is deemed valid before countersigning within 5 business days.

The following table shows different scenarios and actions to take:

If a petition has been filed within 90 days of FPA insurance, the case will be sent to Appeals and suspended until returned from Appeals after final court decision date.

The AIMS/BBA CEAS Dashboard analyst will monitor the CEAS Dashboard and filings of the Form 8985 and Form 8986. When received, the AIMS/BBA CEAS Dashboard analyst will assign to the BBA team.

The tax examiner will verify the status code is 65 and monitor if FDD has occurred.

If AP PO package is received prior to when FDD occurred, the PO package received date cannot be inputted. Suspend the case until FDD.

When FDD has occurred, complete the following steps:

The revenue agent will complete the following due diligence procedures:

PTPs may further pushout the adjustments to their partners. The team member will monitor the BBA CEAS Dashboard, mail and e-Fax for submission of Form 8985 and Form 8986, and possible attachments. Once received, the submission will be assigned for due diligence.

The following table below shows how to process a PTP PO package or Form 8985 that is related to the AP:

The following table below shows how to process a PTP PO package or Form 8985 that is related to the AAR:

The deadline for the AP PTP to either pushout by filing Form 8985 and Form 8986s or elect to pay the IU by filing Form 8985 is EDD. When the AP PTP fails to take the proper action, the teams will take the appropriate next steps.

Within 60 days after the EDD has elapsed, the team member will begin completeness checks. This will include the following:

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Complete the following closing procedures:

Verify that case file has been received.

Enter date case is received in BBA closing team on closing lead sheet.

Verify AIMS status code 69.

Verify timeframe for assessment from closing lead sheet.

Verify closing instructions and type of closing have been completed on closing lead sheet.

Verify required closing forms received are marked on closing lead sheet.

Verify AIMS is current for all pages.

Check additional instructions on closing lead sheet for any penalties or special situations.

Complete AIMS closure per IRM 4.31.13.12.2, AMCLS/IAT Closure Instructions.

Input the Form 5344 on IDRS via AMCLSE with the AIMS Closures button on the Integrated Automation Technologies (IAT) tool.

Complete the required fields in the AIMS Closure – IAT Tool.

Input TIN, Master File Tax (MFT), tax period and click green box.

Action (CC), chose AMCLSE.

Seq #, this will autofill.

Blocking Num, 30X – electronic prints (DC 01-04, 08-10, 12, 13, 34).

Blocking Num, 00X – original (DC 01-04, 08-10, 12, 13, 34).

Number on Form 5344:

Update the closing lead sheet for any closing actions completed, and adjustment entered on module was correct and verified.

File per local procedures.

Once the closing has completed all AIMS closing actions, notate the closing lead sheet and history sheet that all closing actions have been completed, and adjustments entered on module are correct and verified.

Update and save all applicable documents to RGS.

Archive RGS case.

Assemble case file and mail per local procedures.

The following table below lists the authorized disposal codes:

The following table shows the BBA related assessment reason codes and its descriptions on the IRS systems:

The team member will prepare and submit Form 3870 and supporting documentation to the closing team to indicate the type of assistance needed. The following table shows the available types of assistance and information required for each type.

The closing team will process all tax account adjustments.

When an interest computation is needed, the team member will send an email to the closing team with the applicable information.

The closing team will complete the interest request using the Automated Computation Tool/Decision Modeling Inc. (ACT/DMI) application and return the 490 report to the team member via email, and cc the closing team manager.

Interest rate definitions can be found in IRM 20.2.1.3.2, Rate.

Upon request, the closing team will prepare advanced interest computations in Automated Computation Tool/Decision Modeling Inc. (ACT/DMI).

In rare situations, the IRS could initiate a rescission for errors by either the PR or IRS. If the team member initiates the rescission, the team manager must review and approve this before moving forward and contacting the PR. This must be documented on the history sheet.

Potential types of errors include but are not limited to the following:

There must be sufficient time left on the FPA deadline to rescind and issue a new FPA, if appropriate. Determine if a statute extension is needed. If so, prepare Form 872-M to include with the recission package. Refer to IRM 4.31.13.5.2, Form 872-M Extension.

The revenue agent will prepare Form 15057 and Letter 6247, Final Partnership Adjustment Rescission, with the appropriate selectable paragraph and submit these to the team manager for approval.

The tax examiner will mail the Letter 6247, Form 15057, Form 872-M (if applicable) and place the case in FPA suspense.

If there is agreement to the rescission, PR will sign and return Form 15057 via US mail, e-Fax or OFSS portal. The tax examiner records receipt date of Form 15057 on FPA lead sheet, complete the FPA lead sheet, and assigns case back to the revenue agent.

Complete the procedures as shown in the following table for when the Form 15057 was submitted timely or untimely, invalid or incomplete, or valid and complete.

An FPA forwarded by certified mail and returned by the United States Postal Service (USPS) because the addressee has moved and left no forwarding address is considered undeliverable (i.e., unlocatable).

An FPA returned by the USPS stamped "unclaimed" or "refused" is generally not considered undeliverable.

Any time an FPA is returned undeliverable, unclaimed, or refused, a search for an alternate address of the taxpayer must be made. Documentation of the research is required. The following table shows the procedures based on the address reported on the INOLES versus Form 15027 (FPA):

Form 8989 must be received within 60 days of FDD and prior to PO statements being submitted to the BBA team and issued to the partners.

When a Form 8989 is received by email, BBA CEAS Dashboard, or e-Fax from AP, the tax examiner will notate IRS received date on PO lead sheet and history sheet, and then save the form to the case file.

The revenue agent will review the Form 8989 for timeliness and validity.

Review Form 8989 and ensure each type of IU is checked. If there is more than one specific IU, a Form 8989 must be completed for each specific IU.

Ensure PR signature is correct and matches the current PR.

Complete the procedures as shown in the following table based upon the Form 8989 received.

When an IU (or IRC 6232(f)) assessment on a pass-through entity is unpaid, IRC 6232(f) allows the IRS to assess its investors their proportionate share of the IU plus any penalties and interest. The partner assessment must be made within 2 years of the pass-through entity assessment, known as the PSED, Partnership Statute Expiration Date.

The team member reviews the PSED report from Control D, conducts appropriate module research, adds the case to the Team 1XX inventory report, and sends notification email of case assignment to the team. The inventory report is reviewed monthly to identify payments posted.

The team member working the case will complete IDRS research on the partnership. The following table shows which command codes to use to gather required information:

Request closing team to prepare INTST- current balance due on the partnership for the RY. If there are assessments relating to the filing of the return in addition to assessments relating to BBA a COMPA will be requested instead. This will be the IRC 6232(f)-assessment amount that will be multiplied against the partners’ capital percentage.

Once the revenue agent is ready to prepare the Form 3870s, the examiner should locate the partners and their applicable capital ownership percentage for the adjustment year return, unless the former partners are determined to be applicable. Use the following resources:

Once the INTST or COMPA current balance due is received and the assessments are calculated, prepare:

Prepare a Letter 6547, Partner Assessment, for each partner (even if married filing joint and both are partners) postdated 7 days to allow for approval and signature. Email all documents to 6232(f) SRA for review. Once approved, email letter(s) to 6232(f) manager for signature.

Once letters are signed and received from 6232(f) manager, email letter(s), TAR coversheet, capital percentage assessment reconciliation and Form(s) 3870 to the closing team. The closing team will mail Letter(s) 6547, review TAR and Form(s) 3870 to make assessment and update IDRS per Form 3870.

When there are BBA adjustments that affect Chapter 2 or 2A, additional steps may need to be taken. See IRM 4.31.9.6, BBA Scope – Adjustments at the Partnership Level, for definition of Chapter 2 and 2A taxes in regard to BBA cases.

BBA Chapter 2/2A PCS linkage can be identified by reviewing page 1 of AMDISA for AIMS-FRZ-CD H and PICF-CD 2.

The AIMS freeze code H must be released by the CPF Chapter 2/2A team before the case can be closed from BBA Operations.

The following procedures cover various scenarios under Chapter 2/2A where actions are required. Once these actions are complete, employees may continue closing procedures based on the type of closure.

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Terminal partners under Rev. Proc. 2005-18 can make deposits to suspend the running of interest on that partner’s potential correction amounts under IRC 6226 relating to proceedings of BBA audited partnerships that are disputing the partnership adjustments and/or imputed underpayment amount.

A partner of a BBA partnership under examination may make a deposit under IRC 6603 by remitting to the Internal Revenue Service Center at which the taxpayer is required to file its return, or to the appropriate office at which the BBA partnership’s return is under examination, a check or a money order accompanied by a written statement designating the remittance as a deposit. The written statement also must include:

The statements are routed to BBA Operations to monitor the correct posting of the deposits. A Form 2424, Account Adjustment Voucher, is completed to transfer the deposit to the accounting ledger 4610 account until such time as the taxpayer submits their Form 8978 to report the tax on the return. The deposit is reapplied to the tax year the tax is reported on.

The BBA team may discover through research during modification due diligence, or otherwise, information in a BBA AP where the partner’s first affected year or other modification year is in Joint Committee status. Some examples are:

If, for example, one of the above situations are encountered regarding a requested modification relating to a relevant partner, then the AP’s modification request will be worked in consideration of the Joint Committee procedures as outlined in IRM 4.36.4, Joint Committee Review Team Procedures. BBA Operations must ensure there is adequate time on the BBA AP’s statute to make a determination regarding the requested modification, issue the modification determination package, and issue the FPA in conjunction with the conclusion of the partner’s Joint Committee considerations, or if the IRS otherwise determines that a requested modification will be disallowed prior to the conclusion of the partner’s Joint Committee case.

IRM 25.2.1, General Operating Division Guidance for Working Whistleblower Claims, provides procedures and guidance for all IRS personnel and must be strictly adhered to. Any deviation from this IRM must be approved by the Whistleblower Office (WO).

The Bipartisan Budget Act of 2018 added a new subsection (c) to IRC 7623. This defined the term proceeds to include penalties, interest, additions to tax, and additional amounts provided under the internal revenue laws, and any proceeds arising from laws for which the Internal Revenue Service is authorized to administer, enforce, or investigate. This includes criminal fines and civil forfeitures, and violations of reporting requirements.