1.5.3  Manager's Self-Certification and the Independent Review Process

Manual Transmittal

June 06, 2012

Purpose

(1) This transmits revised IRM 1.5.3, Managing Statistics in a Balanced Measurement System, RRA 98 Section 1204 Self-Certification and the Independent Review Process.

Material Changes

(1) The IRM was revised to reflect current practices. New IRM sections were added for:

  1. IRM 1.5.3.5.3 - Statistics of Income (SOI), General Legal Services (GLS), and the Human Capital Office (HCO)

  2. IRM 1.5.3.6.4 - Retention Standard Non-Compliance

  3. IRM 1.5.3.7.8 - Electronic and Digital Signatures

  4. IRM 1.5.3.7.14 - CFO Quarterly Memorandum of Record

  5. IRM 1.5.3.10 - Annual TIGTA Audit

  6. IRM 1.5.3.12 - Mandatory Section 1204 Training

(2) New content was added as follows:

  1. IRM 1.5.3.5.1 - CFO Program Roles and Responsibilities - added Section 1204 Workgroup and Section 1204 Program Timeline

  2. IRM 1.5.3.7.12 - Consolidated Office Transmittal Memorandum and CFO Submissions - provided information on HR Connect and the Section 1204 Indicator

  3. IRM 1.5.3.7.2 - Certifications for Acting Managers and Using Proxies - provided clarification on acting manager certifications and the use of proxies

  4. IRM 1.5.3.8 - CFO Independent Review Process - includes information on CFO Virtual and HR Connect Independent Reviews, and Secure and encrypt personally identifiable information (PII) and sensitive but unclassified (SBU) information

(3) IRM 1.5.3.7.13 - Quarterly Certification Forms -, was updated to identify which forms are submitted to CFO.

(4) IRM 1.5.3.13 - Section 1204 Forms List Summary - was updated to identify which forms are submitted to CFO.

(5) Throughout the IRM, links to websites were added for related IRMs, Treasury Inspector General for Tax Administration (TIGTA), CFO Corporate Planning and Internal Control (CPIC), and Small Business/Self Employed (SB/SE).

(6) Clarifying revisions were made throughout the IRM.

Effect on Other Documents

IRM 1.5.3, dated November 23, 2010, is superseded.

Audience

IRS Section 1204 Executives, Managers, and Employees.

Effective Date

(06-06-2012)

Pamela J. LaRue
Chief Financial Officer

1.5.3.1  (06-06-2012)
Overview

  1. This IRM provides guidance and instructions for the Restructuring and Reform Act of 1998 (RRA 98) Section 1204 self-certification and the Chief Financial Officer (CFO) Independent Review.

  2. This IRM identifies Section 1204 program responsibilities for the CFO and IRS Operating/Functional Divisions.

  3. The CFO has responsibility for administering the Section 1204 program and monitors IRS compliance with RRA 98 through :

    1. Section 1204 Manager's Quarterly Self-Certification Reporting

    2. Annual CFO Independent Reviews

    3. Coordination with the Treasury Inspector General for Tax Administration (TIGTA) for the annual "Mandatory Review of IRS Compliance with Restrictions on the Use of Enforcement Statistics"

    4. Coordination with the Human Capital Office

  4. The Section 1204 program is designed to identify:

    1. Record of Tax Enforcement Result (ROTER) violations (Section 1204(a))

    2. Instances of non-compliance for the retention standard for the fair and equitable treatment of taxpayers (Section 1204(b))

    3. Certification process violations (Section 1204 (c))

    4. IRM policy violations

    5. Regulation 801 violations

1.5.3.2  (06-06-2012)
Legal Requirements

  1. The IRS Section 1204 program is founded on the Restructuring and Reform Act of 1998 (RRA 98) and Regulation 801.

  2. Section 1204, Basis for Evaluations of IRS Employees, prohibits the use of ROTERs to:

    1. Evaluate employees

    2. Impose or suggest production quotas or goals

  3. Section 1204 requires manager's quarterly self-certification. It also requires the IRS to establish a retention standard for all employees that supports the "fair and equitable treatment of taxpayers."

  4. Section 1204 provides guidance on the appropriate use of statistics by managers and employees throughout the IRS.

  5. Key components of Section 1204 include:

    1. Section 1204(a) in General - The IRS shall not use records of tax enforcement results (1) to evaluate employees, or (2) to impose or suggest production quotas or goals with respect to such employees.

    2. Section 1204(b) Taxpayer Service - The IRS shall use fair and equitable treatment of taxpayers as one of the standards for evaluating employee performance.

    3. Section 1204(c) Certification - Each appropriate supervisor shall certify quarterly by letter to the IRS Commissioner whether or not tax enforcement results are being used in a manner prohibited by subsection (a).

  6. Regulation 801, Balanced Measurement System for Measuring Organizational and Employee Performance Within the IRS (issued September 1999, revised October 2005), establishes the overall performance measurement system, sets forth rules governing the use of ROTERs, and addresses the retention standard as a performance measure. See IRM 1.5.2, Uses of Section 1204 Statistics.

1.5.3.3  (06-06-2012)
Key Terms

  1. Appropriate Supervisor is the Section 1204 executive in an Operating/Functional Division that directly or indirectly supervises one or more Section 1204 employees. The appropriate supervisor can identify additional appropriate supervisors. See Organizational Contacts/Appropriate Supervisors

  2. Employee Performance File (EPF) is a file maintained by the employee's immediate supervisor consisting only of performance-related documents covering the past four years.

  3. Manager , as described in 5 USC §5104, is a position that:

    1. Directs the work of an organization through subordinate supervisors

    2. Is accountable for the success of specific line or staff functions

    3. Monitors and evaluates the progress of the organization toward meeting goals

    4. Makes adjustments in objectives, work plans, schedules, and commitment of resources

    5. Serves as head or assistant head of a major organization within a bureau

    6. Directs a specialized program of marked difficulty, responsibility, and national significance


    See also Supervisor.

  4. Non-Section 1204 Employee is an employee who is not engaged in Section 1204 activity.

  5. Operating and Functional Divisions for the IRS include:

    1. Large Business and International Division (LB&I), Tax Exempt and Government Entities Division (TEGE), Small Business/Self-Employed Division (SB/SE), and Wage and Investment Division (W&I) - operating divisions

    2. Taxpayer Advocate Service (TAS), Appeals, and Criminal Investigation (CI) - functional divisions

  6. Performance Plan is the document that communicates to the employee what performance is expected and how the employee is rated for the appraisal period. The performance plan includes:

    1. Retention standard for the fair and equitable treatment of taxpayers for everyone

    2. Critical Job Elements (CJEs) and performance aspects for Bargaining Unit (BU) and Non-Bargaining Unit (NBU) employees

    3. Responsibilities and commitments for managers and management officials

  7. Records of Tax Enforcement Results (ROTERs) are data, statistics, and compilations of information or other numerical or quantitative recordations of the tax enforcement results reached in one or more cases. Examples of ROTERs include, but are not limited to:

    1. Number of liens filed

    2. Number of levies served

    3. Number of seizures executed

    4. Number of fraud referrals

    5. Dollars per hour

    6. Dollars per return

    7. Total dollars assessed/collected

    8. Percentage of agreed cases

    9. Number of “full paid” cases

    10. Number of prosecutions recommended

    11. Percentage of Taxpayer Advocate cases where relief was granted

    12. Amount of revenue protected

    13. No change rate

  8. Retention Standard for the Fair and Equitable Treatment of Taxpayers is an IRS employee performance standard based on Section 1204(b), which requires that employees be evaluated on the fair and equitable treatment provided to taxpayers and behaviors that meet or do not meet the standard.

  9. Section 1204 Employee is an employee who exercises judgment in recommending or determining whether or how the IRS should pursue enforcement of tax laws, or who provides direction and guidance for Section 1204 program activities, including IRM guidance. Section 1204 activity is determined by the tasks performed by an employee, not by the employee's title or Operating/Functional Division.

  10. Section 1204 Manager is a manager/supervisor at any level who supervises one or more Section 1204 employees.

  11. Section 1204 Organizational Unit is a unit or office within an Operating/Functional Division that includes at least one employee who conducts Section 1204 activities.

    Note:

    While many of the divisions in the Services and Enforcement organization are subject to Section 1204, the Whistleblower's Office is not subject to Section 1204.

  12. Supervisor is a position or employee that accomplishes work through the direction of other employees, exercising both technical and administrative supervision over subordinates.
    See also Manager.

  13. Tax Enforcement Result (TER) is the outcome produced by an employee’s exercise of judgment in recommending or determining whether or how the IRS should pursue enforcement of the tax laws. A TER includes but is not limited to:

    1. Lien filed

    2. Levy served

    3. Seizure executed

    4. Amount - tax or penalties assessed

    5. Amount - tax or penalties collected

    6. Fraud referral

    7. Revenue protected

    8. Type of case closure (agreed, no change, full paid, abatement)

    9. Prosecution recommended (indictment/conviction)

    10. Type of relief provided

1.5.3.4  (06-06-2012)
Acronyms

  1. The following acronyms are used in this IRM:

    ACRONYM DESCRIPTION
    CJEs Critical Job Elements
    CFO Chief Financial Officer or Chief Financial Office
    CPIC Corporate Planning and Internal Control
    DBA Doing Business As
    ELMS Enterprise Learning Management System
    EPF Employee Performance File
    GLS General Legal Services
    HCO Human Capital Office
    IRM Internal Revenue Manual
    NTEU National Treasury Employees Union
    PII Personally Identifiable Information
    POD Post of Duty
    ROTER Records of Tax Enforcement Results
    RRA 98 Restructuring and Reform Act of 1998
    SBU Sensitive But Unclassified
    SEID Standard Employee Identifier
    SOI Statistics of Income
    TER Tax Enforcement Results
    TIGTA Treasury Inspector General for Tax Administration

1.5.3.5  (06-06-2012)
Section 1204 Program Responsibilities

  1. The IRS Section 1204 program requires the cooperation and assistance of many IRS organizations including:

    1. IRS Operating/Functional Divisions - Implement the Section 1204 program in their respective areas; provide manager's quarterly self-certification reporting, and assist in the CFO Independent Review

    2. CFO - Provides overall program direction for the IRS Section 1204 program

    3. Statistics of Income (SOI) - Identifies site selection criteria, sites, and managers for the CFO Independent Review

    4. Human Capital Office (HCO) - Provides technical expertise for Section 1204 areas that relate to human resource management

    5. Agency-Wide Shared Services (AWSS) - Manages the IRS employee and manager population and provides a list of all managers, which is used by the Operating/Functional Divisions to designate Section 1204 and non-1204 managers. Also provides lists of employees of Section 1204 managers selected for the CFO Independent Review.

    6. General Legal Services (GLS) - Reviews and confirms ROTERs identified in the TIGTA audit and CFO Independent Review. Also provides guidance in response to CFO questions concerning Section 1204 law

    7. TIGTA - Completes the annual Mandatory Review of IRS Compliance With Restrictions on the Use of Enforcement Statistics

1.5.3.5.1  (06-06-2012)
CFO Program Roles and Responsibilities

  1. The CFO has overall administrative responsibility for assisting the IRS in meeting the requirements of Section 1204.

  2. CFO Program Oversight functions include:

    1. Developing the Section 1204 project timeline and program plan. The plan identifies yearly tasks, new projects, due dates, and points of contact to conduct the CFO Independent Review; coordinates quarterly certification reporting; and determines whether there is a need to develop or update policy. It is used by the CFO Section 1204 program management.

    2. Updating IRM guidance on Section 1204 instructions.

    3. Developing Electronic Learning Management System (ELMS) training courses for Section 1204 managers and employees. See IRM 1.5.3.11

    4. Providing program manager training materials on Section 1204 quarterly certification and CFO Independent Review topics.

    5. Maintaining a Section 1204 website with references for training, quarterly certification forms, new program policy, frequently asked questions, and program updates. See Section 1204 on the CPIC Website.

    6. Collaborating with other Operating/Functional Divisions to identify best practices and program improvements.

  3. CFO Independent Review functions include:

    1. Leading the CFO Independent Review process and establishing an annual review plan to monitor compliance with the Section 1204 certification reporting

    2. Preparing the sampling methodology and scope to select the annual CFO Independent Review locations and managers

    3. Preparing the annual CFO Engagement Memorandum to all Operating/Functional Divisions soliciting program manager assistance with the CFO Independent Review

    4. Convening a review team consisting of Operating/Functional Division representatives

    5. Conducting annual refresher training for Section 1204 program managers for the CFO Independent Review

    6. Conducting Section 1204 training for the CFO Independent Review team participants who need to solidify their knowledge and identify what to look for during the reviews (Untrained reviewers historically do not recognize violations and instances of non-compliance when they appear, which can alter the CFO Independent Review results.)

    7. Handling the CFO Independent Review logistics

    8. Conducting the CFO Independent Reviews and documenting the results by business unit, which is forwarded to Section 1204 program managers

    9. Coordinating with GLS to obtain concurrence and validation of identified ROTERs

    10. Preparing and submitting an E-mail to each Operating/Functional Division's highest level appropriate supervisor, reporting the number of ROTER violations and instances of non-compliance identified during the CFO Independent Review

  4. CFO Quarterly Self-Certification functions include:

    1. Updating reporting forms used by managers for Section 1204 quarterly self-certification

    2. Providing annual Pay Period 20 manager lists

    3. Maintaining the list of Section 1204 organizational contacts including the Section 1204 program managers and appropriate supervisors

    4. Developing the manager's quarterly self-certification schedule

    5. Preparing and issuing quarterly reporting instructions, as needed

    6. Preparing quarterly CFO Memoranda of Record summarizing results, reasons, and actions from certifications submitted by the Operating/Functional Divisions (The quarterly memoranda of record are submitted for internal review and routing no later than 15 days after the quarterly certification due dates posted on the CFO's CPIC website.)

  5. CFO Section 1204 Workgroup functions include:

    1. Managing the Section 1204 workgroup, which is comprised of the Section 1204 program managers and coordinators. The Section 1204 workgroup provides a more corporate approach to address program challenges, provides consistent communications across the IRS, and enhances problem-solving among all stakeholders (the CFO and the Operating/Functional Divisions). The Section 1204 workgroup identifies issues with corporate-wide impact, develops draft recommendations for Senior Executive Team consideration and approval, and assists with the development of corporate communications. The Section 1204 workgroup meets at least quarterly to discuss topics of interest.

    2. Developing and scheduling the quarterly Section 1204 workgroup meetings chaired by the Associate CFO, (ACFO) for CPIC.

  6. CFO TIGTA Audit Liaison functions include:

    1. Coordinating with all impacted Operating/Functional Divisions to respond to the annual TIGTA audit

    2. Scheduling the opening and closing conferences

    3. Addressing audit recommendations

    4. Providing final audit reports to the Section 1204 program managers

1.5.3.5.2  (06-06-2012)
Operating and Functional Division Program Roles and Responsibilities

  1. The Appropriate Official in the Operating/Functional Divisions is responsible for implementing the Section 1204 program including:

    1. Identifying a Section 1204 program manager and/or functional coordinators for their organization

    2. Advising all executives and managers of Section 1204 requirements

    3. Interpreting Section 1204 policy, and providing general technical guidance and direction to Section 1204 executives and managers

    4. Providing input to the CFO on needed updates to IRM guidance on Section 1204

    5. Developing and presenting Section 1204 training for their organizations

    6. Coordinating manager's quarterly self-certification and reporting activity

    7. Providing technical advice to Section 1204 managers for the quarterly certification reporting

    8. Participating in the CFO Section 1204 Workgroup

    9. Participating as reviewers in the annual CFO Independent Reviews

    10. Responding to TIGTA audit inquiries

  2. Section 1204 Program Managers manage their organization's Section 1204 program and:

    1. Identify functional Section 1204 coordinators if not identified by the appropriate supervisors

    2. Serve as the primary contact from the Operating/Functional Division to the CFO staff on Section 1204 issues

    3. Provide Section 1204 guidance and direction to their immediate offices and to their Section 1204 coordinators

    4. Provide their organizations with Section 1204 updates such as oversight reviews, organizational IRM revisions, training updates, manager's self-certification activity, and the annual CFO Independent Review

    5. Inform the CFO when there is a change in Section 1204 program managers or appropriate supervisors as needed

    6. Guide Section 1204 coordinators in researching technical questions and resolving organizational Section 1204 issues

    7. Support the annual CFO Independent Review process by participating in site reviews, answering selected manager questions, and addressing findings

    8. Direct questions with IRS-wide impact or legal implications to the CFO, Corporate Planning and Internal Control, Office of Internal Control, for guidance

    9. Maintain a list of Section 1204 coordinators

  3. Section 1204 Coordinators serve as liaisons to their organization's Section 1204 program manager and provide guidance and direction to their immediate offices. There is at least one coordinator for each Operating/Functional Division. There may be more coordinators depending on the size, complexity, and variety of operations in each area. Section 1204 coordinators:

    1. Support Section 1204 managers at all levels with manager's quarterly self-certification and reporting activity

    2. Provide Section 1204 managers with appropriate guidance and direction

    3. Schedule Section 1204 training and briefings, as appropriate

    4. Support the annual CFO Independent Review process

    5. Validate the classification of managers as either Section 1204 and non-Section 1204 managers

1.5.3.5.3  (06-06-2012)
Statistics of Income (SOI), General Legal Services (GLS), and the Human Capital Office (HCO)

  1. SOI assists in the CFO Independent Review by:

    1. Assisting the CFO with determining the annual sample size for the review

    2. Developing and maintaining procedures for selecting random samples of both sites and managers

    3. Working with the CFO to gather all information necessary to implement the sample selection procedures on an annual basis

    4. Selecting, annually, a random sample of sites and a random sample of managers within each selected site to be included in the review

    5. Assisting the CFO with the proper interpretation of results

  2. GLS assists the CFO with the Section 1204 program by:

    1. Confirming ROTERs identified during the CFO Independent Review

      Note:

      The CFO is responsible for verifying potential Section 1204 violations and ROTERs discovered during the CFO Independent Review. All identified ROTERs are forwarded to GLS along with the copies of the violations for review and comment. GLS determines whether or not ROTER violations occurred and provides comments or a determination document to the CFO which supports their conclusion. The CFO shares confirmed ROTER violations with the affected Operating/Functional Division program manager. See also IRM 1.5.3.7.4.

    2. Providing opinions on technical questions regarding the Section 1204 program

    3. Confirming ROTER findings from TIGTA audits

  3. HCO and staff performance management responsibilities are:

    1. Establishes the IRS Performance Management program

    2. Develops and implements performance management policy within the parameters and policies of the Department of the Treasury Performance Management System

1.5.3.6  (06-06-2012)
Retention Standard for the Fair and Equitable Treatment of Taxpayers

  1. The IRS retention standard for the fair and equitable treatment of taxpayers is based on Section 1204(b) - The IRS shall use fair and equitable treatment of taxpayers as one of the standards for evaluating employee performance.

  2. §801.3 Measuring employee performance states:

    1. In general. All employees of the IRS will be evaluated according to the critical elements and standards or such other performance criteria as may be established for their positions. In accordance with the requirements of 5 USC 4312, 4313, and 9508, and Section 1201 of the Act, the performance criteria for each position, as are appropriate to that position, will be composed of elements that support the organizational measures of Customer Satisfaction, Employee Satisfaction, and Business Results; however, such organizational measures will not directly determine the evaluation of individual employees.

    2. Fair and equitable treatment of taxpayers. In addition to all other criteria required to be used in the evaluation of employee performance, all employees of the IRS will be evaluated on whether they provided fair and equitable treatment to taxpayers.

    3. Senior Executive Service and special positions. Employees in the Senior Executive Service will be rated in accordance with the requirements of 5 USC 4312 and 4313, and employees selected to fill positions under 5 USC 9503 will be evaluated pursuant to work plans, employment agreements, performance agreements, or similar documents entered into between the IRS and the employee.

    4. General workforce. The performance evaluation system for all other employees will: (1) Establish one or more retention standards for each employee related to the work of the employee and expressed in terms of individual performance; (2) Require periodic determinations of whether each employee meets or does not meet the established retention standards; (3) Require that action be taken in accordance with applicable laws and regulations, with respect to an employee whose performance does not meet the established retention standards; (4) Establish goals or objectives for individual performance consistent with the IRS performance planning procedures; (5) Use such goals and objectives to make performance distinctions among employees or groups of employees; and (6) Use performance assessments as a basis for granting employee awards, adjusting an employee’s rate of basic pay, and other appropriate personnel actions, in accordance with applicable laws and regulations.

    5. Limitations. (1) No employee of the IRS may use records of tax enforcement results (as defined in §801.6) to evaluate any other employee or to impose or suggest production quotas or goals for any employee. (i) For purposes of the limitation contained in this paragraph (e), the term employee has the meaning as defined in 5 USC 2105(a). (ii) For purposes of the limitation contained in this paragraph (e), evaluate includes any process used to appraise or measure an employee’s performance for purposes of providing the following: (A) Any required or requested performance rating. (B) A recommendation for an award covered by Section 45 of Title 5,5 USC 5384; or Section 1201(a) of the Act. (C) An assessment of an employee’s qualifications for promotion, reassignment or other change in duties. (D) An assessment of an employee’s eligibility for incentives, allowances or bonuses. (E) Ranking of employees for release/recall and reductions in force. (2) Employees who are responsible for exercising judgment with respect to tax enforcement results in cases concerning one or more taxpayers may be evaluated on work done on such cases only in the context of their critical elements and standards. (3) Performance measures based in whole or in part on quantity measures (as described in §801.6) will not be used to evaluate the performance of any non-supervisory employee who is responsible for exercising judgment with respect to tax enforcement results (as defined in §801.6). TD 9227, 70 FR 60215, Oct. 17, 2005. Redesignated and amended by TD 9426, 73 FR 60628, Oct. 14, 2008.

  3. A Memorandum of Understanding between IRS and the National Treasury Employees Union (NTEU) established a set of ratings to measure the employee’s performance against the retention standard.

  4. The retention standard appears in all IRS employees performance plans including:

    1. Bargaining Unit (BU)

    2. Non-Bargaining Unit (NBU)

    3. Management Official

    4. Manager

    5. Executive

  5. At the beginning of the performance period, employees acknowledge the receipt of the retention standard by signing one of the appropriate documents:

    1. Form 6774 - Receipt of Critical Job Elements and Retention Standard

    2. Form TDF 35-07- Executive Performance Agreement

    3. Form 12450-A - Manager Performance Agreement

    4. Form 12450-B - Management Official Performance Agreement Form

    5. Form 12450-D - Management/Program Analyst Performance Agreement

  6. Employees must sign a new receipt even if their performance standards (CJEs or responsibilities/commitments and the retention standard) have not changed from the prior year.

  7. The manager files the signed receipt in the employee performance file (EPF).

  8. At the end of the performance period, the manager rates the employee's retention standard performance as:

    1. "Met."

    2. "Not Met."

    3. "Not Applicable."

  9. The appraisal form (Form 6850-BU, Form 6850-NBU, Form 12450-A, Form 12450-B, Form 12450-D, or Form TDF 35-07) is filed in the EPF.

  10. Both the receipt and acknowledgement of the retention standard and the performance ratings are filed in the EPF and retained for three years.

1.5.3.6.1  (06-06-2012)
Manager Discussions

  1. The retention standard is used to ensure that all employees make a good faith effort to meet the provisions of the retention standard. Infrequent lapses that are inadvertent or unavoidable acts should not result in a "Not Met" rating. An employee is coached on how to prevent a future occurrence of unacceptable customer treatment and the importance of adhering to the fair and equitable treatment of taxpayers retention standard.

  2. Receipt and acknowledgement of the fair and equitable treatment of taxpayers retention standard means that the manager has discussed the retention standard, including identifying:

    1. Behaviors that allow the employee to meet the retention standard.

    2. Circumstances that may result in a determination that the employee does not meet the retention standard.

    3. The potential impact of not meeting the retention standard.

1.5.3.6.2  (11-23-2010)
Retention Standard Behaviors

  1. Examples of employee behaviors that meet the retention standard include:

    1. Responds to taxpayers in a timely manner

    2. Discusses specific taxpayer cases with other employees on a "need-to-know" basis only

    3. Responds verbally or in writing with appropriate tone, courtesy and respect, and states facts accurately

    4. Advises customers of full personal impact, such as interest and penalty accumulation, when the taxpayer advises they cannot pay their liability in full

  2. Examples of employee behaviors that fail to meet the retention standard include:

    1. Fails to respond in a timely manner to taxpayers

    2. Discusses specific taxpayer information with others who do not have an official "need to know"

    3. Responds verbally or in writing with a tone or wording which is discriminatory, discourteous, disrespectful, intimidating, and/or which misstates facts

  3. Managers should be prepared with additional examples specific to the roles and responsibilities of employees they supervise.

  4. The employee retention standard behaviors are monitored by reviewing case files, Integrated Data Retrieval System (IDRS) actions, telephone calls, and/or feedback received from taxpayers and other outside sources.

1.5.3.6.3  (06-06-2012)
Retention Standard Documentation

  1. Managers must prepare a narrative justification for retention standard ratings of "Not Met."

  2. A non-Section 1204 employee is rated "Not Applicable" for the retention standard.

  3. Managers do not prepare a narrative justification for retention standard ratings of "Met" or "Not Applicable."

  4. The retention standard is incorporated into the following annual employee performance plans:

    EMPLOYEE RECEIPT OR ACKNOWLEDGEMENT:
    Retention Standard Documentation Actions
    Form 6774 - Receipt of Critical Job Elements and Retention Standard Employee's and supervisor's signatures and dates signed on Form 6774 indicate employee receipt and acknowledgement of the retention standard, which is filed in the Employee Performance File.
    Form 12450-A, Manager Performance Agreement Signatures and dates of employee, rating official, and reviewing official in Part 1, Critical Performance Expectations, indicate employee receipt and acknowledgement of the retention standard.
    Form 12450-B, Management Official Performance Agreement
    Form 12450-D, Management/Program Analyst Performance Agreement
    Form TDF 35-07, Executive Performance Agreement Signatures and dates of employee, rating official, and reviewing official in Part 1, Consultation, indicate employee receipt and acknowledgement of the retention standard.

  5. The retention standard is applicable to employees who interact with taxpayers or who set policy regarding interactions with taxpayers. The retention standard must be checked and signed on the employee's annual appraisal, Form 6850-BU, Form 6850-NBU, Form 12450-A, Form 12450-B, Form 12450-D, or Form TDF 35-07, as follows:

    PERFORMANCE APPRAISAL CHECKED AND SIGNED:
    Form 6850-BU, Bargaining Unit Performance Appraisal and Recognition Request The rater checks the retention standard rating - "Not Applicable," "Met," or "Not Met." The rater, reviewing official, and employee sign and date the appraisal.
    Form 6850-NBU, Non-Bargaining Unit Performance Appraisal The rater checks the retention standard rating - "Not Applicable," "Met," or "Not Met." The rating official, reviewing official, and employee sign and date the appraisal.
    Form 12450-A, Manager Performance Agreement The rating official checks Part III, Retention Standard rating - "Not Applicable," "Met," or "Not Met." The rating official, reviewing official, and employee sign and date the appraisal.
    Form 12450-B, Management Official Performance Agreement
    Form 12450-D Management/Program Analyst Performance Agreement
    Form TDF 35-07, Executive Performance Agreement The rating official checks Part VIII, Additional Mandated Element(s), "Met," or "Not Met." The rating official, reviewing official, and employee sign and date the appraisal.

  6. At the end of the performance period, if the retention standard is not applicable, mark the "Not Applicable" box.

  7. During the CFO Independent Review, the review team verifies that:

    1. Managers have retained signed and dated copies of the retention standard receipt and acknowledgement.

    2. Managers have retained signed and dated copies of the retention standard performance rating.

1.5.3.6.4  (06-06-2012)
Retention Standard Non-Compliance

  1. Section 1204(b) retention standard non-compliance occurs on Form 6774, Form 6850-BU, Form 6850-NBU, Form 12450-A, Form 12450-B, Form 12450-D, and Form TDF 35-07 if/when:

    1. The documentation (either acknowledgement or rating) is not contained in the EPF and/or does not exist for the fiscal year of review (ex. FY 2011 for the CFO Independent Review, FY 2012 for manager's quarterly certification).

    2. The documentation does not contain all appropriate signatures and dates.

    3. The retention standard rating is unchecked in the annual performance document (annual rating of record).

  2. Retention standard non-compliance is counted for the manager when the conditions listed in the paragraph above occur. The manager must identify and correct non-compliance during the quarterly certification process.

1.5.3.7  (06-06-2012)
Section 1204 Quarterly Certification Requirements

  1. Section 1204(c) requires that appropriate supervisors certify, on a quarterly basis, whether or not they used ROTERs in a manner prohibited by Section 1204(a). For quarterly certification, the term appropriate supervisors includes Section 1204 appropriate supervisors, managers, supervisors, acting managers and acting supervisors.

  2. Section 1204(a) prohibits the use of ROTERs to evaluate employees or to impose or suggest production quotas for those employees.

  3. Section 1204(b) requires the Service to use fair and equitable treatment of taxpayers by employees as a standard for evaluating employee performance.

  4. Managers assess their compliance with Section 1204 requirements in the quarterly certification reviews.

  5. The CFO is responsible for developing and issuing certification guidance to Section 1204 program managers and updating reporting forms used in the quarterly certification process.

  6. The Section 1204 managers required to participate in the self-certification process include:

    1. Heads of Operating/Functional Divisions

    2. Appropriate Supervisors

    3. Next Level Managers, those between front-line manager and appropriate supervisor

    4. Front Line Managers

  7. The IRS Operating/Functional Divisions required to submit manager's quarterly self-certifications include:

    1. Appeals

    2. Criminal Investigation

    3. Large Business and International

    4. Small Business/Self-Employed

    5. Taxpayer Advocate Service

    6. Tax Exempt and Government Entities

    7. Wage and Investment

  8. For the quarterly certification process, the above listed IRS Operating/Functional Divisions determine whether:

    1. Section 1204 activities are performed in their organization.

    2. Section 1204 activity guidance or direction is required and has been provided.

  9. Organizations involved in Section 1204 activities or in providing guidance and direction for these activities follow the required quarterly Section 1204 certification process and identify Section 1204 appropriate supervisors.

  10. The Operating/Functional Divisions are responsible for Section 1204 program implementation in their respective areas. Section 1204 program managers and coordinators in each business organization are available to provide guidance to managers regarding Section 1204 issues, including the certification process.

  11. Organizations that are not involved with Section 1204 activities (non-Section 1204 organizations) maintain an awareness of Section 1204 requirements through the retention standard and compliance with Section 1204(b); however, non-Section 1204 organizations do not submit quarterly certifications or participate in the CFO Independent Review. The retention standard applies to all IRS managers and employees and is, acknowledged at the beginning of the performance period. At the end of the performance period, non-Section 1204 managers and employees are rated as "Not Applicable." .

  12. During the first quarter of each fiscal year and when staffing changes occur, each of the seven Heads of Section 1204 Operating/Functional Divisions re-evaluates the status of their organization regarding Section 1204 to:

    1. Identify the subordinate organizations where Section 1204 activity does and does not take place.

    2. Provide a list of such subordinate organizations to the CFO.

    3. Prepare a list of all subordinate managers indicating their status as either a Section 1204 manager or a non-Section 1204 manager.

      Note:

      This information is necessary to identify Section 1204 managers for required training, and for the CFO to select samples of Section 1204 and non-1204 managers for the annual CFO Independent Review.

  13. Beginning with first-line Section 1204 managers, all levels of management (including appropriate supervisors) must conduct a quarterly review to determine whether they:

    1. Used ROTERs to evaluate employees or to impose or suggest production quotas or goals.

    2. Evaluated all employees using the fair and equitable treatment of taxpayers as a performance standard.

  14. Section 1204 managers must complete the self-certification to summarize their findings.

  15. Next-Level managers and appropriate supervisors (those subordinate to the Heads of Operating/Functional Divisions):

    1. Self-certify quarterly for their immediate office (including review of EPFs of direct reports).

    2. Summarize their findings and those from the organizational units below them.

    3. Certify their findings to the CFO as delegated by the Commissioner.

  16. Heads of Operating/Functional Divisions:

    1. Self-certify quarterly for their immediate office (including the review of EPFs of direct reports).

    2. Summarize their findings and those from the organizational units below them.

    3. Certify their findings to the CFO as delegated by the Commissioner.

      Example:

      The LB&I Commissioner self-certifies for their immediate office and sends a Consolidated Office Transmittal Memorandum to the CFO. The Consolidated Office Transmittal Memorandum includes a summary of the findings of the immediate office and other LB&I organizational units including the Headquarters Directors and other subordinate appropriate supervisors who self-certify for their individual offices.

1.5.3.7.1  (06-06-2012)
Due Dates

  1. The Section 1204 quarterly self-certifications are based on the fiscal year. Quarterly submissions are due to the CFO from the Operating/Functional Divisions 45 calendar days after the end of each quarter. Reporting quarters are:

    1. 1st Quarter: Reporting for October, November, and December

    2. 2nd Quarter: Reporting for January, February, and March

    3. 3rd Quarter: Reporting for April, May, and June

    4. 4th Quarter: Reporting for July, August, and September


  2. The certification schedule with specific due dates is provided on the CFO website. When the 45th calendar day falls on a weekend, a Friday or Monday deadline is determined. Unusual weather or other events may also change established due dates. See 1204 Quarterly Certification Schedule

1.5.3.7.2  (06-06-2012)
Certifications for Acting Managers and Using Proxies

  1. Acting appropriate supervisors and managers may self-certify in their acting roles.

  2. Acting managers (in the position for less than 30 days at the end of a quarter) - If a manager has been acting for less than 30 days, the next level manager must decide whether or not the acting manager will self-certify for that quarter.

    1. If the next level manager determines the acting manager will not self-certify, the next level manager must certify for the office.

    2. If the next level manager determines the acting manager will self-certify, the acting manager must be included on the list of Section 1204 managers for the quarter. See IRM 1.5.3.6.12.

  3. Acting manager (in the position, more than 30 days at the end of a quarter) – The acting manager will self-certify for the office and must be included on the list of Section 1204 managers.

  4. Section 1204 proxies are delegations of responsibility for the certification process:

    1. Proxies for Section 1204 self-certification are not permitted. Self-certification requires personal knowledge of the identified and reported violations/instances of non-compliance. Delegating this responsibility is not in keeping with the intent of Section 1204.

    2. Proxies to sign self-certifications on behalf of the next level reviewer are permitted.

    3. Proxies to consolidate and transmit self-certification results to the CFO are permitted, including reviewing the forms for accuracy and completeness and signing on behalf of the appropriate supervisor.

1.5.3.7.3  (06-06-2012)
Manager's Quarterly Self-Certification

  1. Managers should review all documents in the EPFs of newly assigned employees (includes transferees within the IRS and new hires (probationary employees). Past CFO Independent Reviews have shown that employees' EPFs were a significant source of 1204(a) violations.

  2. New managers and managers moving to a new group should review EPFs for all employees. Any Section 1204 violations or instances of non-compliance identified during the CFO Independent Review are counted against the current manager.

    Note:

    The manager must immediately correct the violation and/or instance of non-compliance and this information must be reported on the next quarterly certification.

  3. During the quarterly self-certification review, managers review a variety of documents such as meeting minutes, employee files, program reviews, and case reviews.

  4. All Section 1204 managers, including appropriate supervisors, review their management activities for the entire quarter and complete a self-certification for the quarter. The self-certification identifies whether managers:

    1. Used ROTERs in a manner prohibited by Section 1204(a)

    2. Evaluated employees using the fair and equitable treatment of taxpayers as a performance standard according to Section 1204(b)

    3. Briefed employees on the retention standard and completed Form 6774, Form 12450-A, Form 12450-B, or Form 12450-D to support compliance with Section 1204(b)

  5. Quarterly reviews cover 100 percent of a Section 1204 manager’s verbal and written communications in:

    1. Employee evaluations as defined in Regulation §801.3(e)(1)(ii)

    2. Other documented input such as workload reviews and individual case reviews

    3. Verbal communications such as meetings and employee discussions

    4. Written documents such as program guidance, business/program reviews, and meeting minutes

  6. The following items should be included in the manager's self-certification review:

    1. EPFs - contain employee performance information

    2. Employee Evaluations - contain employee ratings and performance feedback

    3. Operational Reviews, Business Reviews, and Visitation Reports - contain information on operational strengths and weaknesses to facilitate discussion and feedback between the manager and the employee. These reviews include internal controls, best practices, and identify areas for improvement with corrective and follow-up actions

    4. Employee Drop Files - contain employee conduct and other information

    5. Grievances and Hearing Narratives

    6. Comments/Reports offered by the NTEU

    7. Group Discussions

    8. Meeting Minutes - contains Group, Branch, Territory, Area, Division, or Director meetings

    9. Local Guidance Memoranda

    10. Other Items such as filed copies of E-mail and voice mail messages

  7. Employee performance files, evaluations, and other documented reviews include the following:

    1. Performance Agreements

    2. Retention Standard for the Fair and Equitable Treatment of Taxpayers

    3. Performance Appraisals - (Managers must check the retention standard rating and managers/employees must sign and date the appraisal.)

    4. Self-Assessments

    5. Recognition/Award Recommendations

    6. Mid-Year Reviews/Assessments

    7. Narrative Feedback to Evaluations

    8. Timesheet Reviews

    9. Workload Reviews

    10. Individual Case Reviews

    11. Operational Reviews/Business Reviews (Managers’ EPFs)

    12. Assessments for promotion/reassignment, incentives/allowances/bonuses, release/recall, and reductions in force

  8. Managers review the EPFs for the retention standard to verify that:

    1. Employees received and acknowledged the retention standard at the beginning of the performance rating period.

    2. The rater assigned a retention standard rating.

    3. Employees (also identified as the "rated" ) and managers such as the rater, rating official, and approving official signed the performance appraisal.

  9. During the quarterly self-certification review, managers will review documents that are signed and finalized within the quarter of the review. Managers should review the following retention standard forms:

    1. Form 6774, Receipt of Critical Job Elements and Retention Standard. Employee's and supervisor's signatures and dates on the original form filed in the EPF indicates the employee receipt of Form 6774.

    2. Form TDF 35-07, Executive Performance Agreement. Signatures of the employee, rating official, and reviewing official in Part 1, Consultation, indicates employee acknowledgement of the retention standard. The rating official checks Part VIII for a retention standard rating of "Met " or "Not Met." The rating official, reviewing official, and the employee sign and date the agreement.

    3. Form 12450-A, Manager Performance Agreement. Signatures of the employee, rating official, and reviewing official in Part 1, Critical Performance Expectations, indicates employee acknowledgement of the retention standard. The rating official checks Part III for a retention standard rating of "Not Applicable," "Met," or "Not Met." The rating official, reviewing official, and employee sign and date the agreement.

    4. Form 12450-B, Management Official Performance Agreement. Signatures of the employee, rating official, and reviewing official in Part 1, Critical Performance Expectations, indicates employee acknowledgement of the retention standard. The rating official checks Part III for a retention standard rating of "Not Applicable," "Met," or "Not Met." The rating official, reviewing official, and employee sign and date the agreement.

    5. Form 12450-D, Management/Program Analyst Performance Agreement. Signatures of the employee, rating official, and reviewing official in Part 1, Critical Performance Expectations, indicates employee acknowledgement of the retention standard. The rating official checks Part III for a retention standard rating of "Not Applicable," "Met," or "Not Met." The rating official, reviewing official, and employee sign and date the agreement.

    6. Form 6850-BU, Bargaining Unit Performance Appraisal and Recognition Request. The rater checks the retention standard rating of "Not Applicable," "Met," or "Not Met." The rating official, reviewing official, and employee sign and date the appraisal.

    7. Form 6850-NBU, Non-Bargaining Unit Performance Appraisal. The rater checks the retention standard rating of "Not Applicable," "Met," or "Not Met." The rating official, reviewing official, and employee sign and date the appraisal.

1.5.3.7.4  (11-23-2010)
Identifying and Addressing ROTER Violations

  1. ROTER violations include any verbal or written use of a ROTER to evaluate an employee or to impose or suggest a production quota or goal with respect to such an employee.

  2. If ROTER violations are identified during the quarterly self-certification review process, the manager:

    1. Corrects verbal ROTER violations by retracting the violation(s) and providing the recipients with the corrected information.

    2. Corrects written ROTER violations by retracting the violation(s) and the documentation containing the violation(s) such as meeting minutes, appraisals, and mid-year or progress reviews. After correction, the manager shares revised documentation with the appropriate recipients.

    3. Considers whether the numerical rating for a particular job element will change when removing a ROTER violation from a performance appraisal. Managers should consult Labor Relations staff, as appropriate.

    4. Retains only the corrected documents in the appropriate files. Managers attach copies of documents with a ROTER violation(s) to the Section 1204 Manager’s Quarterly Certification (Form 1204-MV) for review and follow-up action by the appropriate supervisor.

  3. If managers identify the prohibited use of ROTERs at times other than the quarterly certification reviews, they correct the violation immediately and report it during the next quarterly self-certification cycle. This includes ROTERs identified through:

    1. Independent Reviews

    2. TIGTA 1204 Reviews

    3. Functional Operational Reviews

    4. Quarterly Self-Certification Reviews

  4. A reviewing official may identify a ROTER in a proposed narrative of an employee appraisal or award nomination during the routine review process. However, because the document is not final, the reviewer should return it to the originator who should revise it immediately. In this case, the identification of a ROTER would not be reported as a violation during the quarterly self-certification process.

  5. If a manager issued an employee appraisal in final form and included a ROTER, the manager and the approving official must each identify it as a violation in their next quarterly self-certification.

    Note:

    Before signing, reviewing officials can prevent violations by conducting a thorough review of the evaluation.

  6. If a manager inadvertently quotes a ROTER as a program goal during a meeting but corrects the statement during the discussion, this is not counted as a violation.

1.5.3.7.5  (11-23-2010)
Counting and Reporting ROTER Violations

  1. Section 1204 managers report violations on the Section 1204 Manager’s Quarterly Certification, Form 1204-MV. Managers should attach copies of documentation with violations and corrective actions to the certification form for review and follow-up action by the appropriate supervisor and for future reviews conducted by TIGTA, the CFO, or the Operating/Functional Division.

  2. If a Section 1204 manager identifies a ROTER violation from a previous manager, the current manager reports the violation on their next self-certification. For educational awareness and corrective action, the appropriate supervisor or designee advises the previous manager and their supervisor of the violation.

  3. If an employee evaluation contains a Section 1204 violation and was signed by the rater and approving official, two violations are reported. The rating official and the approving official report the violation on each of their next self-certifications.

  4. Violations identified in a document signed by both the first-level and second-level managers are reported as multiple violations. For example, two ROTERs times two signatures equals four violations. Each level of management separately reports two violations on their self-certification. The corrective action will be appropriately identified for each manager.

  5. Verbal ROTERs confirmed in writing are counted as two violations. For example, if a group manager verbally uses a ROTER to suggest a production goal during a group meeting and documents the statement in minutes distributed to all group employees, these are identified as two violations, the verbal communication and the documentation in the minutes. Although sent to all employees, the minutes represent one violation.

  6. A document including one ROTER violation that is posted to a website or distributed to an E-mail group code is counted as one violation. If the manager included two ROTERs in the document and distributed them similarly, this would constitute two violations.

  7. In summary, ROTER violations are counted as follows:

    TYPE OF ROTER: HOW TO COUNT:
    Multiple ROTERs in one document Count total number of ROTERs in document as violations
    One ROTER going to multiple individuals Count as one violation
    One ROTER with multiple managers' signatures on a document Count total number of signatures as violations
    Multiple ROTERs and multiple signatures on a document Count total number of violations times the number of signatures
    Verbal ROTER versus written ROTER Verbal ROTERs are counted the same as written ROTERs
    Verbal ROTERs confirmed in writing Count total number of verbal ROTERs plus the written ROTERs

1.5.3.7.6  (06-06-2012)
Counting and Addressing Non-Compliance with the Retention Standard

  1. Non-compliance with Section 1204(b) Fair and Equitable Treatment of Taxpayers Retention Standard is identified through the:

    1. Manager's quarterly self-certification review process.

    2. Annual CFO Independent Review.

    3. Independent Reviews conducted by the Operating/Functional Divisions.

    4. Annual TIGTA audit.

  2. Section 1204(b) non-compliance for the retention standard occurs on Form 6774, Form 6850-BU, Form 6850-NBU, Form 12450-A, Form 12450-B, Form 12450-D, and Form TDF 35-07 if/when the:

    1. Documentation (either acknowledgement or rating) is not contained in the employee file and/or does not exist for the fiscal year of audit (e.g. FY 2011 for the CFO Independent Review, FY 2012 for manager's quarterly certification).

    2. Documentation does not contain all signatures and dates (employee, manager, and next level manager).

    3. Retention standard rating is unchecked in the annual performance document (annual rating of record).

      Note:

      Original (pen-and-ink) or digital signatures (signed electronically in HRConnect ePerformance) are required on the documents filed in the EPF to avoid a Section 1204(b) instance of non-compliance.

  3. Instances of retention standard non-compliance are reported in the manager's quarterly self-certification forms as:

    1. Failure to share the retention standard and obtain employee, manager, and next level manager signatures and dates.

    2. Failure to correctly evaluate the employee on the retention standard as "Met," "Not Met," or "Not Applicable."

    3. Failure to retain copies of employee retention standard acknowledgement and rating documentation in the EPF.

  4. Depending on the type of Section 1204(b) non-compliance identified, the manager either:

    1. Completes and shares with the employee the retention standard document, or

    2. Updates the appraisal document and shares the updated document with the employee.

  5. Each instance of retention standard non-compliance is counted as one violation, regardless of the number of manager signatures.

  6. Managers must take corrective action and report the non-compliance in the next quarterly self-certification whether Section 1204(b) instances of retention standard non-compliance are identified in:

    1. Self-certification reviews

    2. CFO Independent Reviews

    3. TIGTA audits

    4. Operating/Functional Division Independent Reviews

  7. Timeliness of acknowledgement (sharing) and evaluation (rating) for the performance standard is not a Section 1204 requirement. This means that retention standard acknowledgement (sharing) and evaluation (rating) documents signed 30 days after the beginning of the performance period and 30 days after the end of the performance period are not counted as Section 1204(b) instances of non-compliance for self-certification reporting.

1.5.3.7.7  (06-06-2012)
Self-Certification

  1. After completing their review, Section 1204 managers at all levels (including appropriate supervisors) complete the RRA 98 Section 1204 Manager’s Quarterly Self-Certification (Form 1204-M or Form 1204-MV, as appropriate).

    1. Form 1204-M is to be completed by Section 1204 managers if they are reporting no violations of Section 1204(a) and are in compliance with Section 1204(b).

    2. Form 1204-MV is to be completed by Section 1204 managers who are reporting either violations of Section 1204(a) and/or incidents of non-compliance with Section 1204(b).

    3. The self-certification must include the entire quarter, so it must not be signed and dated before the last day of the quarter.

      Note:

      If the last day of the quarter falls on a weekend or a holiday, self-certifications signed on the last day of the work week are acceptable.

    4. An acting manager may sign the certification for a manager on leave and/or who has an alternate work schedule day off on the last work day of the quarter.

    5. Detailed instructions for completing these forms may be found on the forms themselves. The Section 1204 certification reporting forms are updated annually, as needed.

  2. The manager’s quarterly self-certification is an electronic process. Managers must retain signed copies of completed certifications for audit and review purposes. The completed Form 1204-M and Form 1204-MV are not submitted to the CFO. They may be stored electronically and must be made available upon request.

  3. For the quarterly self-certification review, Section 1204 managers identify all Section 1204 employees who are assigned to them as of the last day of the quarter. Managers are responsible for reviewing all evaluations and EPFs for these employees and all management activities such as meeting minutes and memoranda for the entire quarter for their immediate office.

  4. Section 1204 managers who were assigned to their position during the quarter will complete the self-certification for the work unit for the entire quarter.

1.5.3.7.8  (06-06-2012)
Electronic and Digital Signatures

  1. Signatures on the certification forms may be electronic or digital.

    1. Electronic signatures may have "/s/" before the typed name of the person signing the form. If "/s/" is used, the electronic form must also be printed and signed manually with an original signature and date.

    2. Digital signatures on the manager's quarterly self-certification serves as the manager's official copy; there is no need to print the form and sign it manually.

  2. Digital signatures must contain the manager's name. An standard employee identifier (SEID) digital signature is not acceptable for quarterly Section 1204 self-certifications.

  3. Instructions for digital signatures are available on the CFO's CPIC website. See Digital Signatures Instructions.

1.5.3.7.9  (06-06-2012)
Quarterly Certification Consolidation

  1. Section 1204 higher-level managers, except appropriate supervisors, prepare the RRA 98 Section 1204 Quarterly Certification Summary (Form 1204-N or Form 1204-NV, as appropriate) and forward it to their supervisor. Each Certification Summary is a consolidation of the preparer’s own self-certification form and all subordinate managers’ self-certification forms.

    1. Form 1204-N is to be completed by Section 1204 higher-level managers, except appropriate supervisors, if they are reporting no violations of Section 1204(a) and are in compliance with Section 1204(b).

    2. Form 1204-NV is to be completed by Section 1204 higher-level managers, except appropriate supervisors, who are reporting violations of Section 1204(a) and/or incidents of non-compliance with Section 1204(b).

    3. Detailed instructions for completing Form 1204-N and Form 1204-NV may be found on the forms themselves.

  2. The completed Form 1204-N or Form 1204-NV is not submitted to the CFO. Electronic copies of these forms are retained in the Operating/Functional Division office and must be available upon request.

1.5.3.7.10  (11-23-2010)
Certification Review by Appropriate Supervisor

  1. Section 1204 appropriate supervisors are responsible for the overall implementation of Section 1204 requirements in their organizations. Appropriate supervisors:

    1. Review results of their subordinate managers’ quarterly self-certifications to identify whether violations are recurring and if a supplemental review must be conducted.

    2. Follow up on all reported violations to ensure that corrective actions have been implemented expeditiously.

    3. Identify situations where a Section 1204 manager must be held accountable for misuse of enforcement statistics. (Refer to IRM 1.5.3.8, Section 1204 Penalty Determinations, for additional information.)

1.5.3.7.11  (06-06-2012)
Consolidated Office Certification

  1. Section 1204 appropriate supervisors consolidate the RRA 98 Section 1204 Certification Summaries received from subordinate managers, their self-certification, and any other self-certifications received for their immediate office into the RRA 98 Section 1204 Consolidated Office Certification for the Commissioner.

  2. Appropriate supervisors submit one of the following:

    1. Form 1204-O, RRA 98 Section 1204 Consolidated Office Certification - No Violations, when there are no Section 1204(a) ROTER violations or Section 1204(b) fair and equitable treatment of taxpayers retention standard occurrences of non-compliance.

    2. Form 1204-OV, RRA 98 Section 1204 Consolidated Office Certification - With Violations, when there are Section 1204(a) ROTER violations and/or Section 1204(b) fair and equitable treatment of taxpayers retention standard occurrences of non-compliance.

    3. Detailed instructions for completing Form 1204-O and Form 1204-OV may be found on the forms themselves.

  3. The completed Form 1204-O and Form 1204-OV are not submitted to the CFO. Electronic copies of these forms are retained in the Operating/Functional Division office and must be available upon request.

1.5.3.7.12  (06-06-2012)
Consolidated Office Transmittal Memorandum and CFO Submissions

  1. Heads of Operating/Functional Divisions prepare the RRA 98 Section 1204 Consolidated Office Transmittal Memorandum to transmit multiple consolidated office certifications from Section 1204 appropriate supervisors.

  2. There are two forms available for the Consolidated Office Transmittal Memorandum:

    1. Form 1204-T, RRA 98 Section 1204 Consolidated Office Transmittal Memorandum - No Violations, is to be completed by the Heads of Operating/Functional Divisions if they are reporting no violations of Section 1204(a) and are in compliance with Section 1204(b).

    2. Form 1204-TV, RRA 98 Section 1204 Transmittal Memorandum - With Violations, is to be completed by the Heads of Operating/Functional Divisions who are reporting violations of Section 1204(a) and/or incidents of non-compliance with Section 1204(b).

    3. Detailed instructions for completing Form 1204-T and Form 1204-TV may be found on the forms themselves.

  3. The completed Form 1204-T and Form 1204-TV are submitted to CFO for quarterly certification reporting.

  4. Heads of Operating/Functional Divisions should send the following electronically to the CFO 45 calendar days after the end of the quarter:

    1. Consolidated Office Transmittal Memorandum (Form 1204-T or Form 1204-TV)

    2. Manager list of electronic spreadsheets with a total quarterly manager count

      Note:

      The Section 1204 manager lists will be eliminated with the use of the Section 1204 indicator in HRConnect.

    3. General summary of Section 1204(a) violations and Section 1204(b) instances of non-compliance

  5. The general summary is be used to support the CFO Section 1204 quarterly memorandum of record. The summary should indicate:

    1. The number of Section 1204(a) violations

    2. The number of Section 1204(b) instances of non-compliance

    3. The corrective actions and/or remediation plans taken in the Operating/Functional Division

  6. The manager lists are used by the Operating/Functional Divisions to verify that all required Section 1204 managers complete their quarterly self-certification. The format of functional managers lists should remain identical to the Pay Period 20 manager list which is the beginning of the fiscal year provided by the CFO, with two new columns:

    1. "1204"

    2. "Non-1204"

  7. For each listed manager, the Operating/Functional Division must indicate with an "X" whether the manager is Section 1204 or non-Section 1204.

  8. The manager lists should be updated quarterly for changes such as new hires, retirements, and other position changes.

  9. Columns on the managers list may be shrunk, but not hidden, to allow the CFO to easily combine the lists.

  10. Complete the following five columns on the manager lists submitted to the CFO:

    1. "1204" and "Non-1204"

    2. SEID

    3. Full name

    4. Position title

    5. Post of duty (POD)

  11. Provide the Total Quarterly Manager Count on the managers lists submitted to the CFO. This calculation consists of:

    1. Total managers at the beginning of the quarter

    2. Plus (+) additions for new managers

    3. Minus (-) deletions of managers

    4. Equals (=)Total managers for the quarter


    This calculation should appear at the bottom of the consolidated manager lists.

  12. When the Section 1204 HR Connect Indicator is activated, manager lists submitted to the CFO will be eliminated. Managers will be requested to "check" the HR Connect indicator for themselves and their Section 1204 employees. The HR Connect Section 1204 indicator will allow managers and the CFO to obtain and manage the Section 1204 population of managers and employees. When activated, a CFO memorandum will be issued and instructions will be available on the CFO's CPIC website.

1.5.3.7.13  (06-06-2012)
Quarterly Certification Forms

  1. This section provides a list of forms required for the certification process with violations or without violations.

    Note:

    It is possible to start the certification process in the Operating/Functional Division without violations and later identify violations at higher levels in the organization.

    RESPONSIBLE INDIVIDUAL REQUIRED DOCUMENT ELECTRONIC CERTIFICATION FORM SUBMIT TO CFO
    All Managers. 1) Self-Certification Without Violations = Form 1204-M No. Retain electronic copies.
    With Violations = Form 1204-MV No. Retain electronic copies.
    Next-Level Managers. These managers include all managers between front-line managers and appropriate supervisors. 1) Self-Certification
    Without Violations = Form 1204-M No. Retain electronic copies.
    With Violations = Form 1204-MV No. Retain electronic copies.
    2) Certification Summary Without Violations = Form 1204-N No. Retain electronic copies.
    With Violations = Form 1204-NV No. Retain electronic copies.
    Appropriate Supervisors. These appropriate supervisors are subordinate to the Heads of Operating/Functional Divisions. 1) Self-Certification Without Violations = Form 1204-M No. Retain electronic copies.
    With Violations = Form 1204-MV No. Retain electronic copies.
    2) Consolidated Office Certification Without Violations = Form 1204-O No. Retain electronic copies.
    With Violations = Form 1204-OV No. Retain electronic copies.
    Heads of Operating/Functional Divisions. 1) Self-Certification Without Violations = Form 1204-M No. Retain electronic copies.
    With Violations = Form 1204-MV No. Retain electronic copies.
    2) Consolidated Office Certification Without Violations = Form 1204-O No. Retain electronic copies.
    With Violations = Form 1204-OV No. Retain electronic copies.
    3) Consolidated Office Transmittal Memorandum Without Violations = Form 1204-T Yes. Submit with appropriate supervisors, general summary, and manager lists with total manager count.
    With Violations = Form 1204-TV Yes. Submit with appropriate supervisors, general summary, and manager lists with total manager count.

1.5.3.7.14  (06-06-2012)
CFO Quarterly Memorandum of Record

  1. The CFO prepares a Quarterly Memorandum of Record based on the certification results provided by the Operating/Functional Divisions.

  2. This memorandum provides the fiscal year (FY) quarterly RRA 98 Section 1204 certification summary report. The Section 1204 appropriate supervisors, identified in an attachment, provide quarterly certification data to indicate their organizations' compliance with the requirements of RRA 98.

  3. The CFO package for the quarterly memorandum includes a/an:

    1. Quarterly Memorandum of Record summarizing Operating/Functional Division findings.

    2. Violations summary identifying violations and instances of non-compliance by Operating/Functional Division per quarter and in FY Total.

    3. Appropriate supervisors list containing the highest level appropriate supervisors who completed the self-certification as of the quarter ended.

    4. Note to Reviewer providing background, issues to be aware of, prior history legal authority, and any additional information.

    5. Action Routing Sheet identifying the signature requested, reviewers, and comments.

  4. This memorandum is routed through CFO reviewers including the Deputy CFO. It is signed by the CFO, as delegated, filed, and made available upon request.

1.5.3.8  (06-06-2012)
CFO Independent Review Process

  1. The IRS established the Section 1204 Independent Review process to monitor compliance with Section 1204 IRS Restructuring and Reform Act of 1998 and related policy for:

    1. Section 1204(a) use of enforcement statistics

    2. Section 1204(b) retention standard for the fair and equitable treatment of taxpayers

    3. Section 1204(c) quarterly certification process

    4. IRM policy violations in employee evaluations and self assessments

    5. IRM 1.5.1.3(1)(e) prohibits comparisons between organizations. These policy violations are often found in group meeting minutes and in the sharing of quantity/quality data reports with managers.

  2. Operating/Functional Divisions are encouraged to complete their own Independent Reviews to complement the CFO Independent Review.

  3. The annual CFO Section 1204 Independent Review validates, by random sample, the self-certification results submitted quarterly by the Operating/Functional Division managers. The CFO Independent Review process is supported by assistance from:

    1. Operating/Functional Divisions

    2. Statistics of Income (SOI)

    3. Agency Wide Shared Services (AWSS)

    4. General Legal Services (GLS)

  4. The CFO determines the review period for the Independent Review process. The review period covers a fiscal year. Manager and employee documentation for the review period is examined to identify:

    1. ROTER violations

    2. Retention standard instances of non-compliance

    3. Quarterly certification violations

    4. IRM policy violations

    5. Regulation 801 violations

  5. The CFO Independent Review may be conducted on-site, virtually, or through HR Connect:

    1. On-Site Reviews are held on-site in a selected area. These reviews generally last one week per site. Selected managers provide existing EPFs and other identified files for two employees. A number of sites are selected; however, there may be multiple locations for each selected site. The review team examines performance and other documents for violations and instances of non-compliance.

    2. Virtual Reviews are held in the IRS Headquarters building in Washington, DC or on-line/remotely. Selected managers provide requested files for two employees electronically, as instructed. The files must be provided via secure, encrypted methods to protect personally identifiable information (PII) and sensitive but unclassified (SBU) information. The review team examines performance and other documents for violations or instances of non-compliance. Printed copies of electronic copies are destroyed after use unless necessary to support findings.

    3. HR Connect Reviews are held either in the IRS Headquarters building in Washington, D.C. or on-line/remotely with designated Section 1204 program managers and reviewers. Section 1204 managers and two employees for each manager are selected for a review of violations and instances of non-compliance in HR Connect performance documents.

      Note:

      The EPF is the official repository of all performance related documents. Potential Section 1204 violations and instances of non-compliance identified through the virtual or HRConnect ePerformance reviews should be verified using the actual document located in the EPF.

  6. The CFO issues an "Engagement Memorandum" to the Operating/Functional Divisions announcing the selected locations and requests participation for the annual review. The memorandum includes details such as:

    1. Documents subject to review by the CFO Independent Review team

    2. Review team member qualifications

    3. Section 1204 Independent Review guidelines

    4. Refresher training session dates for the review team

  7. The CFO Engagement Memorandum is posted on the CFO website. See CFO Engagement Memorandum.

  8. The CFO convenes a Section 1204 Independent Review team comprised of members of the Operating/Functional Divisions.

  9. Due to the sensitivity of the EPF data to be reviewed, bargaining unit employees cannot be included on the team. CFO Independent Review team members cannot review manager or employee files from their own Operating/Functional Division.

  10. The size of the review team is based on the number of sites and includes representatives from all Operating/Functional Divisions.

  11. The CFO requests all Operating/Functional Divisions to participate in at least one review each year.

  12. The Operating/Functional Divisions fund the travel and related costs for employees selected to participate on the review team.

  13. The CFO conducts Section 1204 refresher training for the review team that covers:

    1. Important IRM definitions

    2. Examples and findings from previous reviews

    3. IRM 1.5.3 rules for counting ROTERs

    4. Manager and EPF checklist completion

    5. Travel and review site logistics


  14. Before attending CFO Independent Review refresher training, Section 1204 program managers and review team members are encouraged to review:

    1. IRM 1.5.2, Uses of Section 1204 Statistics

    2. IRM 1.5.3, RRA 98 Section 1204 Self-Certification and the Independent Review Process

    3. SB/SE At-a-Glance Guide to RRA 98 Section 1204 (TERs & ROTERs) and Regulation 801 (Quantity & Quality) for overview of all Section 1204 and Regulation 801 rules See SB/SE's At-a-Glance Guide.

    4. Retention standard guidance

    5. Samples of completed checklists

  15. The CFO notifies the selected managers and identifies the employees of that manager for review and the documentation required.

  16. The CFO manages review logistics such as:

    1. Space - Conference or training room space is required to seat the review team. It should allow space for laptop computers, EPFs, and other Section 1204 documents.

    2. A locking cabinet and/or room key is required to secure EPFs and laptop computers.

    3. Router connections are required for E-mail and shared drive access for laptop computers.

    4. Supplies - Post-it notes, yellow highlighters, pens, a stapler, and folders are required for each selected manager.

    5. Section 1204 manager and employee checklists for the review period.

    6. Non-Section 1204 interview scheduling and checklists for the review period.

  17. If multiple buildings are involved in one site, the CFO schedules the logistics for sites and reviewers.

  18. The review team records findings on manager and employee checklists. Before leaving each site, review team members share findings with the affected managers.

1.5.3.8.1  (11-23-2010)
Site, Manager, and Employee Selection

  1. The CFO consolidates the fourth quarter manager lists provided by the Operating/Functional Divisions.

  2. The consolidated manager's list is forwarded to SOI to randomly select:

    1. POD locations. There are generally four locations that include one campus.

    2. Section 1204 managers. SOI selects a sufficient number of Section 1204 managers to allow for replacements if managers have changed and are not eligible for selection.

    3. Non-Section 1204 managers. SOI selects a number of non-Section 1204 managers.

  3. SOI provides the results of the random sampling to the CFO. The results of the random sampling includes a sufficient number of manager names for the CFO to select and determine the actual number of managers that will be included in the annual review. The CFO selects a designated number of Section 1204 and non-Section 1204 managers for each Independent Review site.

  4. The CFO submits a request to AWSS to obtain a listing of employees for the selected managers.

  5. The CFO selects Section 1204 employees. Generally two employees are selected for each manager.

  6. The CFO electronically notifies and schedules the review date for each selected Section 1204 manager and notifies them of the two employee EPFs to be reviewed.

  7. The manager notification provides the date, time, and location of the CFO Independent Review, includes background information on RRA 98, and requests EPF information via secure E-mail to protect PII. The CFO Engagement memorandum requests:

    1. Confirmation of Section 1204 status, POD location, and selected employees.

    2. Date, time, and location for providing documentation to the review team.

    3. Items for the review such as EPFs and employee drop files.

  8. The Section 1204 manager notification E-mail is copied to the Operating/Functional Division Section 1204 program manager who assists their selected manager in understanding the CFO Independent Review requirements.

  9. The selected Section 1204 manager files are reviewed for RRA 98, Regulation 801, and IRM policy compliance.

  10. For non-Section 1204 managers, the CFO electronically notifies and schedules an interview with each selected manager. The non-Section 1204 manager notification provides the date, time, and location of review and requests the:

    1. Manager's POD location

    2. Manager's availability for an interview during the review period

  11. The non-Section 1204 manager notification is copied to the Operating/Functional Division Section 1204 program manager who is available to assist the selected manager in understanding the CFO Independent Review requirements.

  12. The non-Section 1204 manager is interviewed to confirm their non-Section 1204 status. The results of the interview are recorded on the non-Section 1204 manager checklist.

1.5.3.8.2  (06-06-2012)
Review Methodology

  1. The CFO prepares folders and organizes the CFO Independent Review by location.

  2. The materials subject to review by the CFO Independent Review team includes a variety of manager and employee documentation. The review materials are provided by the selected manager at the date and time specified in the manager notification E-mail.

    Note:

    Send review materials including EPF information and Section 1204 review results via secure E-mail to protect PII and SBU information.

  3. The review methodology used by the review team, whether virtual, on-site, or other includes:

    1. Analyzing the documents listed on the manager and EPF checklists to determine if there are Section 1204(a) violations, if ROTERs were mentioned in any evaluative documents, or if any quotas or goals for tax enforcement results were imposed or suggested

    2. Analyzing all evaluative documents to determine if managers were in compliance with Section 1204(b) and that employees signed for receipt of and were evaluated on a retention standard governing the fair and equitable treatment of taxpayers

    3. Determining if all selected managers completed the quarterly self-certifications per the IRS guidelines and procedures by reviewing file copies of managers’ quarterly self-certifications to verify their compliance with Section 1204(c)

    4. Analyzing employee evaluative documentation self-assessments and other written guidance to identify IRM policy violations and Regulation 801 violations for TERs, ROTERs, and unallowable comparisons

    5. Interviewing non-Section 1204 managers to confirm non-Section 1204 status

  4. Each CFO Independent Review team member uses the manager and EPF checklists to record findings after completing an assessment of the files provided by the selected Section 1204 managers.

  5. The Manager Checklist identifies the review period, manager's name, Operating/Functional Division, managerial items reviewed, Section 1204 violations identified (a-c), IRM policy violations, Regulation 801 violations, discussions held with the selected manager, attachments to support violations noted, and the reviewer name and date.

  6. The managerial items for review may include:

    1. EPF

    2. Employee evaluations

    3. Operational reviews/business reviews

    4. Employee drop files

    5. Grievances and hearing narratives

    6. Visitation reports

    7. Meeting minutes for the group, branch, territory, area, division, and director, as applicable

    8. Signed copies of the Section 1204 Manager's Quarterly Self-Certifications

    9. Other Items such as filed copies of E-mail, and written voice mail message notes

  7. The EPF Checklist identifies the review period, the employee's name, manager's name, Operating/Functional Division, EPFs and employee evaluations documents, Section 1204 (a) or (b) violations identified, IRM policy violations, Regulation 801 violations, attachments to support violations noted, and documents the reviewer name and date.

  8. The EPF checklist used for individual employee files includes:

    1. Employee Performance Folder Record (Form 6067)

    2. Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard (Form 6774)

    3. Performance Agreement/Appraisal (Form TDF 35-07, Form 12450-A, Form 12450-B, Form 12450-D, Form 6850-BU, and Form 6850-NBU)

    4. Recommendation for Recognition (Form 9127)

    5. Self-assessment(s)

    6. Narrative feedback to evaluations

    7. Mid-Year reviews/assessments

    8. Other reviews

    9. Additional items

  9. The Non-Section 1204 Manager Checklist identifies the review period, the manager's name, Operating/Functional Division, responses to interview questions, and the reviewer's name and date. The non-Section 1204 manager checklist includes a series of "yes" or "no" questions to determine if the manager and/or their employees exercise judgment in recommending or determining whether or how the IRS pursues enforcement of the tax laws. The questions and answers are used to verify that the manager is correctly classified as a non-Section 1204 manager. If the manager is classified incorrectly, a finding is recorded for that manager and the Operating/Functional Division.

1.5.3.8.3  (06-06-2012)
Review Procedures

  1. When reviewing manager and employee files for Section 1204 violations, instances of non-compliance for the retention standard, IRM policy violations, and Regulation 801 violations, the following should be noted:

    1. Employee items for review (within the review period) are based on the date finalized, which is usually when the employee signed the documentation. For example, if the review period is October 1, 2008, to September 30, 2009, and the appraisal is signed by the manager on September 30, 2009, but is signed by the employee later, then reviewers should look for the previous appraisal because the current document falls outside the review period.

    2. On annual appraisals, the employee, manager, and next level reviewer signatures and dates must appear to avoid a Section 1204(b) instance of non-compliance. If any signature is missing, it counts as an instance of non-compliance.

    3. It may be possible that the previous appraisal was signed on September 30th and there is no appraisal for the review period. This is not an error and does not count as a violation for the manager.

    4. There may be more than one employee appraisal, in addition to the annual appraisal, if a departure appraisal or appraisal for job application was completed during the designated review period.

    5. Manager's quarterly certifications for the review period must be available and recorded on the manager's checklist.

    6. For the retention standard, the reviewer looks at the rating period that begins in the review period and verifies that the form was signed by the employee and all applicable managers.

  2. Check all applicable boxes and fill in all applicable lines on the manager and employee checklists including:

    1. Listing the dates of group meetings

    2. Listing the types and dates of employee documentation

    3. Listing the types and dates of functional operational reviews

  3. Review findings must be clearly identified as:

    1. Section 1204(a) ROTERs

    2. Section 1204(b) retention standard non-compliance

    3. Section 1204(c) quarterly certifications

    4. Regulation 801

    5. IRM policy

  4. Highlight the potential violation and/or instance of non-compliance on the manager and/or employee checklist and mark or highlight the manager file folder label to show that the file contains violations or instances of non-compliance.

  5. Verify the potential violation and/or instance of non-compliance with the EPF.

  6. Print or make photocopies of documents for any findings such as:

    1. Group meeting minutes containing a violation

    2. Form 6774, if the retention standard is not signed and dated by the employee and the manager

    3. Form 6850-BU and Form 6850-NBU, if the retention standard is not evaluated or is not signed and dated by the employee, manager, and next level reviewer

    4. Manager's employee appraisal narrative containing ROTER, Regulation 801, or IRM policy violations

    5. Manager's quarterly self-certifications if signed or dated incorrectly

    6. IRM policy violations such as ROTER language in self-assessments

  7. In addition to the page(s) with the errors, also print or copy the front page and any other pages of the document to support the findings.

  8. Findings must be documented and cite the issue, law, and conclusion for:

    1. ROTERs

    2. Regulation 801 issues

    3. IRM policy issues such as using TERs in appraisals and self assessments

    4. Comparing organizations

  9. Attach the findings documentation to the manager's or EPF checklist and E-mail the results to the CFO before the review is completed to allow for a completeness check. The CFO provides sanitized samples for each as a guide.

  10. Sections 1204(b) and 1204(c) issues do not require a write-up, but notate violations or instances of non-compliance on the manager's or EPF checklist and make copies of documents, as applicable.

  11. CFO Independent Review findings must be shared with the manager (virtual, E-mail, or in person if on-site). The findings discussion allows the manager to ask questions and clearly understand the findings. The discussion is followed up with an E-mail to "formalize" the notification of results. If the manager is not available, he/she must designate an alternate to discuss the review findings.

    Note:

    Send EPF information and Section 1204 review results using secure and encrypted E-mail to protect PII and SBU information.

  12. Check the method of the notification on the manager's checklist and sign and date the checklist form.

  13. Completing the manager notification and indicating the method of communication on the manager's checklist helps to prevent manager disputes regarding the notification of findings from the CFO Independent Review.

  14. The CFO reviews all manager and EPF checklists prepared by the CFO Independent Review team for completeness.

  15. The CFO summarizes the results for each selected review location in an electronic spreadsheet within one or two weeks after the site review. The CFO provides the review findings to the Section 1204 program managers. This summary is used by the Operating/Functional Divisions to discuss findings with managers and develop or update guidance for their organization.

  16. The CFO submits identified ROTERs to GLS for review and concurrence.

1.5.3.8.4  (11-23-2010)
Redacted Information/Need-to-Know

  1. Pursuant to IRC 6103(h)(1) and 552A(b)(1) of the Privacy Act, the CFO Independent Review team may examine tax information and information covered by the Privacy Act to the extent that they have a "need-to-know" in order to discharge their tax administration duties.

  2. Review team members do not review manager files from their own function or any managers from other functions with whom they have a close personal relationship.

  3. Grand Jury investigation information related to the identification of the subject must be manually redacted from the hard copy document. Redacted information includes:

    1. Name

    2. Address

    3. "Doing Business As (DBA)" identification

    4. Social Security Number

    5. Date of Birth

    6. Known associates

    7. Other personally identifiable information

    8. Sensitive non-performance-related personnel issues

  4. Sensitive information that cannot be disclosed for the Independent Review includes:

    1. Ongoing criminal investigations

    2. Informant agreements and related documents

    3. Information concerning undercover operations

  5. EPF, performance appraisal documents, and other supervisory documents are required documents that must be sanitized or purged of any sensitive investigation-specific information and made available for the CFO Independent Review.

1.5.3.8.5  (06-06-2012)
CFO Independent Review Memoranda

  1. At the conclusion of the CFO Independent Review, the CFO consolidates the findings into one electronic spreadsheet organized by business unit and location. This consolidated listing is used to prepare notifications of findings to the Operating/Functional Divisions.

  2. The CFO provides each of the Heads of Operating/Functional Divisions with the specific Independent Review results. This allows the Heads of Operating/Functional Divisions to develop corrective action plans and complete them for any identified:

    1. Section 1204(a) ROTER violations

    2. Section 1204(b) retention standard instances of non-compliance

    3. Section 1204(c) manager's self-certifications

    4. IRM policy violations

    5. Regulation 801 violations

  3. The summary of Operating/Functional Division findings is provided to each of the Section 1204 program managers.

1.5.3.9  (06-06-2012)
Section 1204 Penalty Determinations

  1. Executives identify situations where Section 1204 managers at all levels should be held accountable for misuse of tax enforcement results. Potential misuse could be identified during the self-certification process, Independent Review, or at any other time during the fiscal year.

  2. Executives must assess the severity of the Section 1204 violation and take appropriate corrective or disciplinary action.

  3. Section 1204 managers, particularly new managers, might incur a violation resulting from a lack of knowledge or training on Section 1204 requirements. The appropriate corrective action in this case may be technical counseling or training.

  4. In other situations, depending on the nature of the offense and frequency of offenses, actions can range from reprimand to removal. See IRM 6.751.1, Discipline and Disciplinary Actions: Policies, Responsibilities, Authorities, and Guidance, IRS Guide To Penalty Determinations Exhibit 6.751.1-1.

  5. Executives must consider each situation based upon its own merit. Consider the following factors in determining the appropriate corrective action:

    1. What is the nature of the violation?

    2. What is the manager's position?

    3. What is the extent of deviation from the law or regulation on enforcement statistics?

    4. How were taxpayers impacted by this action?

    5. Does the action appear to be intentional/overt such as repeated violations, previous higher-level management guidance regarding incorrect use of statistics?

    6. Did the manager identify the violation in the self-certification process?

    7. Has the manager received Section 1204 training?

    8. What is the span of time from the receipt of training and application?

    9. What is the level of managerial experience?

    10. If the manager received no Section 1204 training, were they briefed on Section 1204 upon accepting their current position?

    11. Was the violation the result of direct guidance from higher-level management?

    12. What is the impact of the violation to the group, organizational unit, and the IRS?

    13. Have similar violations occurred in the IRS, and if so, what corrective or disciplinary actions were applied?

  6. Executives must notify the CFO of situations requiring disciplinary action.

1.5.3.10  (06-06-2012)
Annual TIGTA Audit

  1. TIGTA is required under Internal Revenue Code Section 7803(d)(1)(2000) to annually evaluate whether the IRS complies with restrictions on the use of enforcement statistics under RRA 98 Section 1204.

  2. TIGTA compiles a report of the IRS compliance with RRA 98 that include the business units selected for review, the results of the TIGTA review, and recommendations based on their findings. See the TIGTA website for RRA 98 Reports .

  3. CFO TIGTA audit liaison responsibilities include:

    1. Coordinating with all impacted Operating/Functional Divisions to respond to the annual TIGTA audit

    2. Scheduling the opening and closing conferences

    3. Addressing audit recommendations

    4. Providing final audit reports to the Section 1204 program managers

1.5.3.11  (11-23-2010)
Records Retention

  1. All Section 1204-related documentation, including quarterly self-certification and Independent Review documents, should be considered temporary records and must be closed out at the end of the fiscal year and destroyed three years after closure.

1.5.3.12  (06-06-2012)
Mandatory Section 1204 Training

  1. The CFO conducts mandatory RRA 98 Section 1204 training for managers and employees every two years through the Enterprise Learning Management System (ELMS).

  2. The training is designed specifically for Section 1204 managers and employees and is based on IRM 1.5.2, Managing Statistics in a Balanced Measurement System, Uses of Section 1204 Statistics, and IRM 1.5.3. Managing Statistics in a Balanced Measurement System, RRA 98 Section 1204 Self-Certification and the Independent Review Process.

  3. Basic training topics include:

    1. RRA 98 §1204 and Regulation 801 requirements

    2. TERs and ROTERs

    3. The Retention Standard for the Fair and Equitable Treatment of Taxpayers (Retention Standard)

    4. Use of Quantity and Quality Measures

    5. The CFO Section 1204 Independent Review and the TIGTA audit

  4. Managerial training topics may also include:

    1. Quarterly Self-Certification

    2. IRS Section 1204 compliance assessments conducted through the manager's quarterly certification process

    3. Corrective Actions and/or Remediation for Findings

    4. HRConnect Section 1204 Indicator

  5. Course Number 26042 (ELMS Curriculum ID: XF-11-2) is for Section 1204 employees, and Course Number 20643 (ELMS Curriculum ID: XF-11-1) is for Section 1204 managers.

  6. Section 1204 ELMS training is announced through a CFO Memorandum, the Leader's Alert, and/or a News from the Business Units alert on the IRS Intranet.

  7. The CFO recommends that all Section 1204 managers and employees complete the mandatory training. Biannually, mandatory training will be scheduled and automatically assigned to employees' learning plans.

  8. Once scheduled mandatory training has been completed, the following year the Section 1204 courses are available through ELMS and may be self-assigned.

  9. Operating/functional divisions are responsible for monitoring mandatory training completion for their organizations.

1.5.3.13  (06-06-2012)
Section 1204 Forms List Summary

  1. The following forms are used throughout Section 1204 program and in this IRM:

    FORM FORM NAME USAGE
    6774 Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard Retention standard and CJE acknowledgement; retained in EPF
    6850-BU Bargaining Unit Performance Appraisal and Recognition Request Rating of CJEs and retention standard; retained in EPF
    6850-NBU Non-Bargaining Unit Performance Appraisal Rating of CJEs and retention standard; retained in EPF
    TDF 35-07 SES Performance Management System Executive Performance Agreement Acknowledgement and Rating of responsibilities, commitments, retention standard; retained in EPF
    12450-A Manager Performance Agreement Acknowledgement and Rating of responsibilities, commitments, and retention standard; retained in EPF
    12450-B Management Official Performance Agreement Acknowledgement and Rating of responsibilities, commitments, and retention standard; retained in EPF
    12450-D Management/Program Analyst Performance Agreement Acknowledgement and Rating of responsibilities, commitments, and retention standard; retained in EPF
    1204-M Manager's Quarterly Self-Certification - No Violations Quarterly Self-Certification; not submitted to CFO; copy retained by the manager
    1204-MV Manager's Quarterly Self-Certification - With Violations Quarterly Self-Certification; not submitted to CFO; copy retained by the manager
    1204-N Next-Level Manager’s Quarterly Certification Summary – No Violations Quarterly Certification; not submitted to CFO; copy retained by the manager
    1204-NV Next-Level Manager’s Quarterly Certification Summary – With Violations Quarterly Certification; not submitted to CFO; copy retained by the manager
    1204-O Consolidated Office Certification - No Violations Quarterly Certification; not submitted to CFO; copy retained by the manager
    1204-OV Consolidated Office Certification - With Violations Quarterly Certification; not submitted to CFO; copy retained by the manager
    1204-T Consolidated Office Transmittal Memorandum - No Violations Quarterly Self-Certification; submitted to CFO; copy retained by the manager
    1204-TV Consolidated Office Transmittal Memorandum - With Violations Quarterly Certification; submitted to CFO; copy retained by the manager

1.5.3.14  (06-06-2012)
Related Resources

  1. Internal Revenue Service Restructuring and Reform Act of 1998.

  2. Regulation 801.

  3. 2009 National Agreement II, Internal Revenue Service and National Treasury Employees Union See NTEU's website and agreement.

  4. IRM 6.430.1, Introduction to Performance Management. See HCO's Performance Management

  5. IRM 10.8.1 Information Technology (IT) Security, Policy and Guidance See Sensitive But Unclassified (SBU) Information, Personally Identifiable Information (PII), Electronic Mail (E-Mail) Security and Privacy

  6. IRM 1.5.1, The IRS Balanced Performance Measurement System.

  7. IRM 1.5.2, Uses of Section 1204 Statistics.

  8. CFO's CPIC website See Section 1204.

  9. SB/SE's Website See SB/SE's At-a-Glance Guide.


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