Revisions to Trust Fund Recovery Penalty Procedures Are Warranted

The Director, Collection, Small Business/Self-Employed Division, should require, when possible, the prompt assignment of the respective individual taxpayer account(s)to the same revenue officer working the business trust fund case.

The Director, Collection, Small Business/Self-Employed Division, should update the Internal Revenue Manual (IRM) to more clearly emphasize the use of the NFTL in appropriate circumstances in pyramiding trust fund cases.

The Director, Collection, Small Business/Self-Employed Division, should update the Internal Revenue Manual (IRM) to require the revenue officer proposing the TFRP assessment to make a lien determination during the TFRP investigation. Management should also update the Automated Trust Fund Recovery (ATFR) system to include an indicator that the revenue officer can use to notify appropriate staff that the TFRP has been assessed and that an NFTL should be filed based on the lien determination.

The Director, Collection, Small Business/Self-Employed Division, should consider requiring revenue officers to complete a TFRP completeness checklist that includes all items from the Control Point Monitoring (CPM) Advisory checklist prior to sending cases to the CPM Advisory function to forward to Appeals to ensure that all required documentation is included.

The Director, Collection, Small Business/Self-Employed Division, should determine if an interface between the Appeals Centralized Database System and the Automated Trust Fund Recovery (ATFR) system is feasible to systemically notify the CPM Advisory function when Appeals has made a determination.