SECTION 4. PROCESSING A

BANKRUPTCY DISPUTE

.01 SPf Procedures

SPf will complete its initial review within ten workdays. Additional time will be provided, when necessary, if SPf must request documents from within the Service (such as a return) or ask the debtor to provide additional documentation. The IRS may cease processing the debtor’s dispute if the debtor fails to provide necessary documentation. If the IRS ceases case processing because the debtor failed to provide necessary documentation, the debtor may begin the Process again as described under Section 3.02 if the debtor submits the necessary documentation.

If SPf agrees with the debtor’s position on the dispute, SPf will determine what actions are necessary to correct the matter and will commence these actions immediately and complete them within 30 workdays. If SPf disagrees with the debtor, SPf will contact the debtor and inform the debtor of SPf’s determination. At this time, the debtor will be offered the right to request that SPf review its decision. If the debtor requests it, this review will be completed within five workdays. If, after reviewing its decision, SPf agrees with the debtor, any actions to correct the matter will be commenced immediately and will be completed within 30 workdays.

If the second review by SPf does not support the debtor, SPf will immediately advise the debtor by letter. The letter will include an appeal request form which the debtor must complete and mail back to SPf within 10 workdays in order to obtain

an appeal. If the request is timely mailed, the case will be forwarded to Appeals.

.02 Appeals Procedures

In order for a dispute to reach Appeals under the Bankruptcy Appeals Process, the dispute must have received a second review by SPf under the Bankruptcy Appeals Process (as described in Section 4.01). The second review by SPf must have reached a determination that is adverse to the debtor’s interest, and the debtor must have requested Appeals’ consideration.

Case processing times by Appeals will be as follows (except as extended by agreement):

• For all other issues specified in Section 2.02, within 10 workdays of receipt in Appeals.

After reaching a decision, Appeals will send a letter to the debtor describing the decision. The letter will state whether or not Appeals agrees with the debtor’s position and will describe any actions that will be taken to correct the matter. Any corrective actions will be commenced by SPf within three workdays after Appeals reaches a decision and will be completed within 30 workdays. In the event of a decision that is adverse to the debtor, no further administrative recourse is available to the debtor through the IRS.