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5.1.17.3
(08-25-2009)
Before Contacting a Third-Party
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It is the Service's practice to obtain information relating to a liability or collectibility determination directly from the
taxpayer whenever possible. Situations will arise when the Service must contact third parties to complete an investigation.
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Do not contact any third party without first providing reasonable notice to the taxpayer that contacts with persons other
than the taxpayer may be made.
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Effective May 16, 2005, advance notification of potential third party contact is incorporated into Pub 1, Your Rights as a
Taxpayer, version dated 05/2005. This means that under most circumstances, the taxpayers will be notified of potential third
party contacts by the Service when the first Master File (MF), Delinquent Return (Del Ret) or Non Master File (NMF) notice
from the notice stream is received since Pub 1 is included with these notices. The incorporation of advance notification in
Pub 1 does not affect the present Stuffer Notification of potential third party contacts with CP Notice 504 or 518.
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Review the case file to determine if the taxpayer has received the required advance notification.
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Advance third-party contact notification can be verified on IDRS and ICS by identifying Transaction Code (TC) 971 Action Code
(AC) 611 posted on an IDRS module. To view/verify advance notification for Balance Due modules, access the balance due module
summary screen, click 'module detail' then click 'view TC 971/972 transactions'. To view/verify advance notification for Delinquent
Return modules, access the delinquent return summary screen, click 'module detail' then click 'view transactions'. IDRS systemically
generates TC 971 AC 611 when either Notice 518 (for delinquent return modules) or Notice 504 (for balance due modules) is
issued. (See Note in 5.1.17.3.1). Additionally, when ICS is used to generate Letter 3164, TC 971 AC 611 automatically uploads
to IDRS. "To view whether first Bal Due notice or Del Ret notice was issued, view the MF Status Summary in the Bal Due and/or
Del Ret Module Summary."
5.1.17.3.1
(05-05-2006)
Advance Notification Requirements
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There are three versions of Letter 3164 available for use by Collection employees.
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Letter 3164 A (DO) for Trust Fund Recovery Penalty (TFRP) investigations.
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Letter 3164 B (DO) for balance due investigations.
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Letter 3164 C (DO) for delinquent return investigations.
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Letter(s) 3164 should not be used for the purpose of initiating taxpayer contacts. Letter(s) 3164 should also not be routinely
mailed/hand delivered upon receipt of a new case. Perform IDRS and/or ICS research first to verify the issuance of advance
third party notification. (See 5.1.17.3 (5) above).
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For CFf modules with a balance due MF status 21 or a delinquent return MF status 02 and an associated Status Indicator of
1 with a cycle date after 200520, Letter(s) 3164 B or C (DO) are not required prior to making a third party contact as long
as the revenue officer can verify through ICS that the taxpayer has received a Pub 1 (Rev. 05/2005) and/or CP Notice 504/518.
(See IRM 5.1.17.3(5) above.
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In the following circumstances, Letter(s) 3164 A, B or C (DO) must be issued to taxpayers. Some of the examples are:
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Trust Fund Recovery Penalty Investigation;
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Prompt Assessment;
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Quick Assessment;
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Jeopardy Assessment;
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Other Investigations where a first notice and/or fourth notice was not issued or cannot be verified; and
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Any case issued to the field where a first notice and/or fourth notice was not issued or cannot be verified.
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Follow these procedures if the taxpayer has not received the required advance notification:
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Prepare the appropriate Letter 3164. If the tax liability is due to a joint return, each spouse must receive a separate Letter
3164.
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Include the employee identification number and telephone number on the letter.
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Hand carry the letter to the taxpayer or the taxpayer's dwelling or usual place of business or;
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Mail the letter to the taxpayer's last known address.
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Document the case file with the date of the letter and the method of delivery.
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Provide a copy of the letter to the power of attorney (POA).
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If Letter 3164 was mailed, do not make any third-party contact until 10 days from the date the letter was mailed.
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If Letter 3164 was hand delivered, contact can begin immediately, but give the taxpayer an opportunity to provide the information
before third parties are contacted.
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If Letter 3164 was mailed and acknowledgment is received prior to the 10 days, contact can begin immediately. Give the taxpayer
an opportunity to provide the information before third parties are contacted.
Note:
If the taxpayer received a Notice CP-504 after February 2000, Notice 1219 B was included as a stuffer. If the taxpayer received
a Notice CP-518 after February 2000, Notice 1219 A was included as a stuffer. If the taxpayer received a first Master File
(MF), Delinquent Return (Del Ret) or Non Master File (NMF) notice from the notice stream on or after May 16, 2005, a revised
Pub 1 was included with the notice. Notices 1219 A & B as well as Pub 1 (Rev. 05/2005) replace Letter 3164 for Collection
work ONLY.
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When receiving a closed criminal investigation case that has been issued to the field for collection activity, determine if
Letter 3164 needs to be issued.
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When preparing a suit recommendation, the narrative report should include the date the appropriate Letter 3164 was issued.
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Letter(s) 3164 need not be provided to a taxpayer for third party contacts of which advance notice has otherwise been provided to the taxpayer pursuant to another statute, regulation, or administrative procedure.Collection Due Process (CDP) notices sent to taxpayers pursuant to IRC 6330 and its regulations constitute reasonable advance
notice that contacts with third parties may be made in order to effectuate a levy.
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Irrespective of the cycle date of the MF 21 or MF 02, the requirement to re-issue Letter(s) 3164 B or C (DO) if the taxpayer
did not receive an advance third party notification within the last 12 months is rescinded.
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