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

Manual Transmittal

February 05, 2015

Purpose

(1) This transmits revised IRM 1.5.3, Managing Statistics in a Balanced Measurement System, Manager's Self-Certification and the Independent Review Process.

Material Changes

(1) The IRM was revised throughout to reflect current practices for the many uses of the HR Connect Section 1204 indicator.

(2) IRM 1.5.3.1, Overview, revised.

(3) IRM 1.5.3.2, Background, new.

(4) IRM 1.5.3.3, Authorities, renamed from Legal Requirements and revised.

(5) IRM 1.5.3.4, Definitions, renamed from Key Terms.

(6) IRM 1.5.3.6.2, Operating and Functional Division Program Roles and Responsibilities, revised.

(7) IRM 1.5.3.6.3, Statistics of Income (SOI), General Legal Services (GLS), and the Human Capital Office (HCO), contains new information regarding support provided by the Human Capital Office (HCO), Leadership Education and Delivery Services (LEADS), and Agency Wide Shared Services (AWSS).

(8) IRM 1.5.3.7(2), Retention Standard for the Fair and Equitable Treatment of Taxpayers, revised to put information in a table format.

(9) IRM 1.5.3.7(9), Retention Standard for the Fair and Equitable Treatment of Taxpayers, revised to include requirement that acknowledgement of receipt and the performance rating of the retention standard must be retained for four years.

(10) IRM 1.5.3.7.1, National Treasury Employees Union (NTEU) Requirements Related to Section 1204, new.

(11) IRM 1.5.3.7.4, Retention Standard Documentation, revised tables header to include descriptor information.

(12) IRM 1.5.3.7.5, Retention Standard Non-compliance, provides new policy guidance for managerial documentation in circumstances when employee signatures for acknowledgement and rating cannot be obtained timely.

(13) IRM 1.5.3.8(11), Section 1204 Quarterly Certification Requirements, revised.

(14) IRM 1.5.3.8.2, Acting Managers and Using Proxies, revised.

(15) IRM 1.5.3.8.5, Counting and Reporting ROTER Violations, revised.

(16) 1.5.3.8.6, Counting and Addressing Non-Compliance with the Retention Standard, contains new policy that Potential Section 1204(b) non-compliance identified in the annual TIGTA audit is reported unless the audit finding conflicts with IRM policy guidance.

(17) IRM 1.5.3.8.6(5), Counting and Addressing Non-Compliance with the Retention Standard, clarifies practiced policy that while timeliness is not specifically a requirement for Section 1204, it is not intended to circumvent performance management requirements. Also added references to IRM 6.430, Performance Management, with a requirement for managers to share performance plans within 30 days of the beginning of the performance period and to rate employees within 30 days of the end of the performance period.

(18) IRM 1.5.3.8.7(1), Self-Certification, clarifies the requirement for self-certification signatures on the last day of the quarter (December 31st, March 31st, June 30th, September 30th).

(19) IRM 1.5.3.8.7.1(2)(d), Self-Certification Checklist, contains policy for managers to review the HR Connect Section 1204 indicator status of employees as part of the their quarterly certification review, new.

(20) IRM 1.5.3.8.7.1(2)(e), Self-Certification Checklist, contains policy for managers to review the Section 1204 training status of new hires as part of the quarterly certification review, new.

(21) IRM 1.5.3.8.12.1, CFO General Summary, contains new policy on the use of the HR Connect Indicator to identify the Section 1204 population and removed references to providing annual Pay Period 20 managers lists.

(22) IRM 1.5.3.8.13, Quarterly Certification Forms, revised table heading to include descriptor information.

(23) IRM 1.5.3.8.15, Other Violations, new.

(24) IRM 1.5.3.8.16, Frequently Asked Questions for Quarterly Certifications, new.

(25) IRM 1.5.3.9.1, Independent Review Summary, new.

(26) IRM 1.5.3.9.2, On-Site Reviews, new.

(27) IRM 1.5.3.9.3, Virtual Reviews, new.

(28) IRM 1.5.3.9.4, HR Connect Reviews, new

(29) IRM 1.5.3.9.5, Site, Manager, and Employee Selection, revised SOI role.

(30) IRM 1.5.3.9.6, Independent Review Methodology, title change.

(31) IRM 1.5.3.9.7(2), Independent Review Procedures, revised.

(32) IRM 1.5.3.9.7(16), Independent Review Procedures, title change and revised.

(33) IRM 1.5.3.11(4), Annual TIGTA Audit contains revised CFO TIGTA related functions.

(34) IRM 1.5.3.11(4)(c), Annual TIGTA Audit, contains practiced policy that TIGTA Potential ROTER violations are verified by GLS.

(35) IRM 1.5.3.12, Records Retention, new policy was added for Section 1204 managers to retain employee's receipt/acknowledgement of the retention standard, rating of the retention standard and Section 1204(c) certifications for four years. Managers are required to retain quarterly self-certifications for three years.

(36) IRM 1.5.3.13, Mandatory Section 1204 Training, contains new policy requiring annual mandatory Section 1204 training.

(37) IRM 1.5.3.14, Section 1204 Forms List Summary, revised table heading to provide descriptor information.

(38) Exhibit 1.5.3-1, HR Connect Instructions- Manager, new.

(39) Exhibit 1.5.3-2, HR Connect Instructions- Employee, new.

(40) Exhibit 1.5.3-3, HR Connect Instructions- Employee - Continued, new.

Effect on Other Documents

IRM 1.5.3, dated June 6, 2012, is superseded.

Audience

IRS Section 1204 Executives, Managers, and Employees

Effective Date

(02-05-2015)

Robin L. Canady
Chief Financial Officer

1.5.3.1  (02-05-2015)
Overview

  1. This IRM provides guidance and instructions for Section 1204 Manager's self-certification and the Chief Financial Officer (CFO) Independent Review process.

  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" audit

    4. Coordination with the Human Capital Office for performance management and training

  4. The Section 1204 program is designed to identify:

    1. Records of tax enforcement result (ROTER) violations

    2. Instances of non-compliance for the retention standard for the fair and equitable treatment of taxpayers

    3. Certification process violations

    4. IRM policy violations

    5. 26 Code of Federal Regulations (CFR) Part 801 violations

  5. The Chief Financial Officer, Corporate Planning and Internal Control (CPIC) unit, Office of Internal Control, (IC) is responsible for this IRM.

1.5.3.2  (02-05-2015)
Background

  1. The Section 1204 program is based on the IRS Restructuring and Reform Act of 1998 (RRA 98), (Public Law 105–206, 112 Stat. 685), which requires the IRS to ensure that managers do not evaluate enforcement employees using any ROTER or base employee successes on meeting ROTER goals and quotas.

  2. Section 1204 requires certain managers to complete quarterly self-certifications. It also requires the IRS to establish a retention standard for all employees that supports the "fair and equitable treatment of taxpayers."

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

1.5.3.3  (02-05-2015)
Authorities

  1. RRA 98 Section 1204, Basis for Evaluations of IRS Employees

  2. Key components of Section 1204 include:

    1. Section 1204(a) - In General - The IRS shall not use records of tax enforcement results to evaluate employees or 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 Section 1204(a).

  3. 26 Code of Federal Regulations (CFR) Part 801 (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.

  4. Regulation §801.1, Balanced Performance Measurement System, in general, implement the provisions of sections 1201 and 1204 of RRA 98 and provide rules relating to the establishment of the IRS balanced performance measurement system. Modern management practice and various statutory and regulatory provisions require the IRS to set performance goals for organizational units and to measure the results achieved by those units with respect to those goals. To fulfill these requirements, the IRS maintains a balanced performance measurement system, composed of three elements:

    1. Customer Satisfaction Measures

    2. Employee Satisfaction Measures

    3. Business Results Measures

    The IRS is likewise required to establish a performance evaluation system for individual employees. See IRM 1.5.2, Managing Statistics in a Balanced Measurement System, Uses of Section 1204 Statistics.

1.5.3.4  (02-05-2015)
Definitions

  1. Appropriate Supervisor is the Section 1204 executive in an operating/functional division that directly or indirectly supervises one or more Section 1204 employees. An appropriate supervisor can identify additional appropriate supervisors. See Organizational Contacts/Appropriate Supervisors.

  2. Bargaining Unit (BU) employee is an employee covered by the National Agreement II with the National Treasury Employees Union (NTEU).

  3. Enterprise Learning Management System (ELMS) is the IRS system of record for training. ELMS:

    1. Maintains employee learning and teaching histories

    2. Launches online courses

    3. Tracks completion of assigned curriculum and requirements

    4. Offers development and delivery of course evaluations

    5. Provides data reporting

  4. 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.

  5. HR Connect is the IRS human resources system of record, owned and operated by the Department of the Treasury. Human resources practitioners, managers and employees use HR Connect to perform a wide array of transactions at various stages of an employee’s life cycle. Supervisors use HR Connect to manage human capital and better utilize organizational data for strategic decision making.

  6. InCompass is a comprehensive talent management system maintained by the Department of the Treasury for members of the Senior Executive Service (SES). The performance module supports the management of organizational goals and alignment of those goals to individual performance including managing skills and competencies for the organization. The module also supports employee performance reviews. The types of information gathered about employees include their skills, competencies, and performance evaluation.

  7. 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

    Note:

    Also see the definition of Supervisor at IRM 1.5.3.4 (19)

  8. Non-Bargaining Unit (NBU) employee is an employee who is not covered by the National Agreement II with the National Treasury Employees Union (NTEU).

    Example:

    Executives, managers and management officials.

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

  10. Operating/Functional Divisions for the IRS include:

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

    2. Functional divisions such as Taxpayer Advocate Service (TAS), Appeals, and Criminal Investigation (CI)

  11. 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

    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

  12. 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

  13. 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.

  14. Section 1204 Employee is an employee or manager of an employee (all levels of management) who exercises judgment in recommending or determining whether or how the IRS should pursue enforcement of tax laws, or an employee whose duties involve providing direction and/or guidance for field programs involving Section 1204 work activities, including IRM guidance. The work activity performed, not the employee’s title, location, or operating/functional division, identifies whether an employee should be considered a Section 1204 employee.

    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.

  15. Section 1204 Indicator is the identifier used within the HR Connect system to differentiate Section 1204 managers and employees from all other IRS managers and employees. The indicator is used to determine the Section 1204 population at a given point in time.

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

  17. Section 1204 Program Manager administers the Section 1204 program in his/her organization. Due to the sensitivity of the EPF data to be reviewed for Section 1204 and Regulation 801 compliance, the Section 1204 program manager must be a non-bargaining unit employee.

  18. 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.

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

    Note:

    Also see the definition of Manager at IRM 1.5.3.4 (7) .

  20. 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

1.5.3.5  (02-05-2015)
Acronyms

  1. The following table lists acronyms and their descriptions used in this IRM:

    ACRONYMS
    This is a two column table of acronyms used in the IRM. The first column lists the acronym. The second column lists the description.
    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
    LEADS Leadership, Education and Delivery Services
    NFC National Finance Center
    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
    SES Senior Executive Service
    SOI Statistics of Income
    TER Tax Enforcement Results
    TIGTA Treasury Inspector General for Tax Administration
    TIMIS Treasury Integrated Management Information System
    USDA United States Department of Agriculture

1.5.3.6  (02-05-2015)
Section 1204 Program Responsibilities

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

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

  3. IRS Operating/functional divisions - Implement the Section 1204 program in their respective areas, provide managers quarterly self-certification reporting, and assist the CFO in various program aspects, such as the CFO Independent Review.

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

  5. Human Capital Office (HCO) - Provides human capital strategies and tools for recruiting, hiring, developing, retaining, and transitioning a highly-skilled and high-performing workforce to support IRS mission accomplishments.

    1. Leadership, Education and Delivery Services Division (LEADS) - Provides servicewide training delivery services as well as training technology support in the Enterprise Learning Management System (ELMS), leadership and cross-functional training programs, training policy guidance, and quality assurance for all IRS training.

  6. Agency-Wide Shared Services (AWSS) - Manages enhancement and improvements to the IRS performance management system (HR Connect) and identifies the IRS Section 1204 employee population.

  7. 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.

  8. Treasury Inspector General for Tax Administration (TIGTA) - Completes the annual Mandatory Review of IRS Compliance With Restrictions on the Use of Enforcement Statistics.

1.5.3.6.1  (02-05-2015)
Chief Financial Officer 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 time line and program plan

      Note:

      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.

    2. Updating IRM guidance on Section 1204 instructions

    3. Developing ELMS training courses for Section 1204 managers and employees. See IRM 1.5.3.13, Mandatory Section 1204 Training

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

    5. Maintaining a Section 1204 web site with references for training, quarterly certification forms, new program policy, frequently asked questions, and program updates (See Section 1204 on the CFO, Corporate Planning and Internal Control web site)

    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. Collaborating with SOI to prepare 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

      Note:

      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 BU, 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 the highest level appropriate supervisor in each operating/functional division, reporting the number of Section 1204(a) ROTER violations, Section 1204(b) instances of non-compliance with the fair and equitable treatment of taxpayers retention standard and Section 1204(c) findings of incorrect or missing quarterly certifications 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. Maintaining the list of Section 1204 organizational contacts including the Section 1204 program managers and appropriate supervisors

    3. Developing the managers' quarterly self-certification schedule

    4. Preparing and issuing quarterly reporting instructions, as needed

    5. Preparing quarterly CFO memoranda of record summarizing results, reasons, and actions from certifications submitted by the operating/functional divisions.

      Note:

      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 web site.

  5. CFO Section 1204 Workgroup functions include:

    1. Managing the Section 1204 workgroup, which is comprised of Section 1204 operating/functional division program managers and coordinators

    2. Developing and scheduling the quarterly Section 1204 workgroup meetings

  6. The Section 1204 workgroup:

    1. Provides a more corporate approach to address program challenges

    2. Provides consistent communications across the IRS

    3. Enhances problem-solving among all stakeholders (the CFO and the operating/functional divisions)

    4. Identifies issues with corporate-wide impact

    5. Develops draft recommendations for appropriate SES consideration and approval

    6. Assists with the development of corporate communications

  7. CFO TIGTA Audit Liaison functions include:

    1. Coordinating with all impacted operating/functional divisions to respond to the annual TIGTA "Mandatory Review of IRS Compliance with Restrictions on the Use of Enforcement Statistics" audit

    2. Scheduling the opening and closing conferences

    3. Obtaining Counsel concurrence for potential Section 1204(a) ROTER violations identified during the TIGTA audit

    4. Addressing audit findings and recommendations with Section 1204 program managers and the respective operating/functional divisions

    5. Preparing the CFO response memorandum to TIGTA findings and recommendations based on input from the operating/functional divisions

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

  8. CFO LEADS/ELMS related functions include:

    1. Developing and updating annual ELMS Section 1204 mandatory training content including test-out questions

    2. Providing quarterly Section 1204 indicator reports downloaded from HR Connect to identify new hires (managers and employees) and assign training.

      Note:

      The HR Connect report extract is provided within five business days of the close of the quarter. The HR Connect report provided to ELMS includes an HR Connect employee identification (ID) number, the manager's and employee's last name, first name, middle name and the their related 16-digit Treasury Integrated Management Information System (TIMIS) organizational code, which is comprised of the National Finance Center (NFC) organization codes level 2 through 8.

      Note:

      TIMIS is an official automated personnel and payroll system for storing and tracking all employee personnel and payroll data. It is out-sourced to the United States Department of Agriculture (USDA) NFC and managed by the Department of the Treasury.

1.5.3.6.2  (02-05-2015)
Operating and Functional Division Program Roles and Responsibilities

  1. The highest level appropriate supervisor in the operating/functional division 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 managers' quarterly self-certifications and reporting activities

    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 Review

    10. Responding to TIGTA audit inquiries

  2. Section 1204 program managers administer the Section 1204 program in their organization 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, managers' 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. Provide guidance to 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

      Note:

      Due to the sensitivity of the EPF data to be reviewed, bargaining unit employees cannot be included on the CFO Independent Review team. As an alternative, the operating/functional division Section 1204 program manager will provide one or more non-bargaining unit representatives from their organization to participate on the CFO Independent Review team. Review team members cannot review manager or employee files from their own operating/functional division.

    8. Direct questions with IRS-wide impact or legal implications to the CFO, CPIC, OIC for guidance

    9. Maintain a list of Section 1204 coordinators for their organization

    10. Provide assistance for Section 1204 managers' quarterly certification, including reminding managers to verify that the Section 1204 HR Connect indicator has been reviewed and updated, as needed

  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 managers' 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 and employees as either Section 1204 or non-Section 1204 within HR Connect

1.5.3.6.3  (02-05-2015)
Statistics of Income (SOI), General Legal Services (GLS), and the Human Capital Office (HCO) Roles and Responsibilities

  1. SOI assists in the CFO Independent Review by:

    1. Assisting the CFO with the annual sample 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, on an annual basis, 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

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

    3. Confirming ROTER findings from TIGTA audits

      Note:

      The CFO is responsible for verifying potential Section 1204 violations and ROTERs discovered during the CFO Independent Review and TIGTA’s annual audit. 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 IRM 1.5.3.8.4, Identifying and Addressing ROTER Violations.

  3. HCO, LEADS and staff performance management responsibilities include:

    1. Establishing and managing the IRS performance management program and partnering with AWSS for HR Connect enhancements and improvements, as needed

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

    3. Launching Section 1204 ELMS mandatory training

    4. Updating newly hired managers' and employees' ELMS learning plans with Section 1204 mandatory training, if appropriate

1.5.3.7  (02-05-2015)
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 RRA 98 Section 1204(b) - The IRS shall use fair and equitable treatment of taxpayers as one of the standards for evaluating employee performance.

  2. 26 CFR 801.3, Measuring employee performance, states:

    REGULATION §801.3 - MEASURING EMPLOYEE PERFORMANCE
    This two-column table provides information on measuring employee performance as written in Regulation §801.3. The first column lists the paragraph heading and the second column provides the corresponding details in the paragraph.
    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
    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.
    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.
    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

    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

    Limitations
    1. No employee of the IRS may use records of tax enforcement results (as defined in Regulation §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 5 CFR part 451,5 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 Regulation §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. The fair and equitable treatment of taxpayers retention standard appears in all IRS employees performance plans including:

    1. BU

    2. NBU

    3. Management Official

    4. Manager

    5. Executive (SES)

  4. At the beginning of the performance period, employees acknowledge the receipt of the fair and equitable treatment of taxpayers retention standard by signing one of the appropriate documents:

    1. Form 6774 - Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard

    2. Interim TDF 35-07- SES Performance Management System - Executive Performance Agreement

    3. Form 12450-A - Manager Performance Agreement

    4. Form 12450-B - Management Official Performance Agreement

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

  5. Employees must acknowledge receipt of their retention standard each year even if their performance standards have not changed from the prior year.

    Note:

    While not specifically a Section 1204 program requirement, according to IRM 6.430, Performance Management, acknowledgement and the receipt of the retention standard must occur within 30 days from the beginning of the rating period.

  6. The manager files the signed retention standard acknowledgement in the employee's performance file (EPF). In some cases, employee acknowledgement of the retention standard as a performance standard is documented in HR Connect or InCompass (SES), however, the EPF is the official record.

  7. 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"

  8. The employee signs the retention standard performance rating and the manager files the appropriate form in the EPF. Employee acknowledgement of the retention standard rating is documented on the employee's appraisal/performance agreement in HR Connect or InCompass (SES); however, the EPF is the official record. Appraisal/performance agreement forms used to document an employees' retention standard rating include:

    1. Form 6850-BU - Bargaining Unit Performance Appraisal and Recognition Request (HR Connect)

    2. Form 6850-NBU - Non-Bargaining Unit Performance Appraisal (HR Connect)

    3. Form 12450-A - Manager Performance Agreement (HR Connect)

    4. Form 12450-B - Management Official Performance Agreement (HR Connect)

    5. Form 12450-D - Management/Program Analyst Performance Agreement (HR Connect)

    6. Interim TDF 35-07 - SES Performance Management System - Executive Performance Agreement (InCompass)

  9. Both the acknowledgement of receipt and the performance rating of the retention standard are filed in the EPF and retained for four years.

1.5.3.7.1  (02-05-2015)
National Treasury Employees Union (NTEU) Requirements Related to Section 1204

  1. Successive memoranda of understanding between IRS (Employer) and the National Treasury Employees Union (NTEU) establish a set of ratings to measure the employee’s performance against the retention standard.

  2. The 2012 National Agreement II, Article 12, Performance Appraisal System, Section 2 provides definitions of the performance appraisal system. See Document 11678.

  3. The National Agreement II Article 12, Section 4 Performance Appraisals, states that ratings of record will be prepared within thirty (30) days of the end of the month in which the appraisal is due.

  4. The 2012 National Agreement II, Article 12, Section 8, Use of Statistics states that the:

    1. Use of statistics by the Employer for the purpose of rating critical job elements will be in accordance with 26 CFR Part 801.

    2. Employer has determined that it will not use records of tax enforcement results to evaluate employees or to impose or suggest production quotas or goals on employees. Rather, employees will be evaluated according to their CJEs and standards or such other performance criteria as may be established for their positions. 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 CJEs and standards.

    3. Employer has determined that performance measures based in whole or in part on quantity measures will not be used to evaluate the performance of any employee who is responsible for exercising judgment with respect to tax enforcement results.

1.5.3.7.2  (02-05-2015)
Manager Discussions

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

  2. An employee's 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. Potential impact of not meeting the retention standard

1.5.3.7.3  (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.

1.5.3.7.4  (02-05-2015)
Retention Standard Documentation

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

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

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

    EMPLOYEE RECEIPT OR ACKNOWLEDGEMENT
    This two-column table presents receipt and acknowledgement of the Retention Standard. The first column lists the retention standard documentation and the second column lists the actions.
    Retention Standard Documentation Actions
    Form 6774, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers 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 EPF.
    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, which is filed in the EPF.
    Form 12450-B, Management Official Performance Agreement
    Form 12450-D, Management/Program Analyst Performance Agreement
    Interim TDF 35-07, SES Performance Management System - 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, which is filed in the EPF.
  4. The retention standard is applicable to Section 1204 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, which is filed in the EPF.

    COMPLETING RETENTION STANDARD RATINGS ON PERFORMANCE APPRAISAL FORMS
    This two-column table lists performance forms used for the retention standard. The first column lists the forms and the second column the corresponding actions.
    Appraisal Form Actions
    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
    Interim TDF 35-07, SES Performance Management System - 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.
  5. At the end of the performance period, if the retention standard is not applicable, mark the "Not Applicable" box. A non-Section 1204 employee is rated "Not Applicable" for the retention standard.

  6. During the CFO Independent Review, the review team verifies that managers have retained signed and dated copies of the retention standard:

    1. Receipt and acknowledgement

    2. Performance rating

1.5.3.7.5  (02-05-2015)
Retention Standard Non-compliance

  1. Managerial Section 1204(b) retention standard non-compliance occurs if/when:

    1. The documentation (either acknowledgement or rating) is not in the EPF and/or does not exist for the fiscal year of review

      Note:

      The current year's CFO Independent Review looks at the prior year's Form 6774 acknowledgement documentation. If the Form 6774 is missing or does not exist for a selected employee, a Section 1204(b) instance of non-compliance is noted for the manager.

    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.

  3. Managerial Section 1204(b) retention standard non-compliance occurs when the following documents do not exist or are missing the appropriate information as described.

    1. Form 6774, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard

    2. Form 6850-BU, Bargaining Unit Performance Appraisal and Recognition Request

    3. Form 6850-NBU, Non-Bargaining Unit Performance Appraisal

    4. Form 12450-A, Manager Performance Agreement

    5. Form 12450-B, Management Official Performance Agreement

    6. Form 12450-D, Management/Program Analyst Performance Agreement

    7. Interim TDF 35-07, SES Performance Management System - Executive Performance Agreement

    Note:

    One goal of performance management is to obtain timely acknowledgement and rating of performance elements, standards, responsibilities and commitments. There are circumstances such as family medical leave, military service, etc., in which acknowledgement (beginning of the performance period) and ratings (end of the performance period) cannot be obtained. In these cases, managers must document the mitigating circumstances and obtain acknowledgement or provide ratings as soon as practical. The managerial self-certification process requires a quarterly review of EPFs including a review of employee acknowledgement and ratings. See IRM 1.5.3.8.7.1, Self-Certification Checklist.

1.5.3.8  (02-05-2015)
Section 1204 Quarterly Certification Requirements

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

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

  3. Section 1204(c) requires each appropriate supervisor shall certify quarterly whether or not tax enforcement results were used in a manner prohibited by Section 1204(a).

  4. The CFO develops and issues certification guidance to Section 1204 program managers and updates reporting forms used in the quarterly certification process.

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

  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

    5. Acting managers

    6. Acting supervisors

  7. The IRS operating/functional divisions required to submit managers' 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/update 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 Section 1204 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 appears on all performance documents 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, quarterly throughout the year as part of the certification process and when staffing changes occur, operating/functional divisions designated as Section 1204 re-evaluate the status of their organization to:

    1. Identify the subordinate organizations where Section 1204 activity takes place

    2. Review HR Connect and verify that Section 1204 managers and employees are identified with the Section 1204 indicator

      Note:

      Validation of the Section 1204 indicator is necessary to identify the Section 1204 population of managers and employees for required training, the annual TIGTA audit, the CFO annual Independent Review, NTEU notifications, and HCO activities, as necessary.

  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 for 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 for 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 Form 1204-T, Consolidated Office Transmittal Memorandum - No Violations, or Form 1204-TV, Consolidated Office Transmittal Memorandum - With Violations, to the CFO. The Form 1204-T or Form 1204-TV 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.

1.5.3.8.1  (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. When the 45th calendar day falls on a weekend, either a Friday or Monday due date is determined. Unusual weather or other events may also change established due dates. See the 1204 Quarterly Certification Schedule on the CFO web site for specific due dates.

1.5.3.8.2  (02-05-2015)
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. If the next level manager determines that the acting manager:

    1. Will not self-certify, the next level manager must certify for the office

    2. Will self-certify, the acting manager must be shown as Section 1204 in HR Connect for that quarter

  3. Acting managers (in the position 30 days or more at the end of a quarter) – The acting manager will self-certify for the office and must be shown as Section 1204 in HR Connect.

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

    1. Proxies for a manager’s 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.

      Example:

      Form 1204-M, Manager's Quarterly Self-Certification – No Violations, or Form 1204-MV, Manager's Quarterly Self-Certification – With Violations

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

      Example:

      Form 1204-N, Next-Level Manager's Quarterly Certification Summary – No Violations, or Form 1204-NV, Next-Level Manager’s Quarterly Certification Summary – With Violations

    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.

      Example:

      Form 1204-O, Consolidated Office Certification – No Violations, or Form 1204-OV, Consolidated Office Certification – With Violations, Form 1204-T, Consolidated Office Transmittal Memorandum – No Violations, or Form 1204-TV, Consolidated Transmittal Memorandum – With Violations.

1.5.3.8.3  (02-05-2015)
Manager's Quarterly Self-Certification Review Components

  1. Managers should review all documents in the EPFs of newly assigned employees (includes transferees within the IRS, new hires, and probationary employees).

    Note:

    Past CFO Independent Reviews have shown that employees' EPFs were a significant source of 1204(a) violations. Any Section 1204 violations or instances of non-compliance identified during the CFO Independent Review are counted against the current manager.

  2. New managers and managers moving to a new group should review EPFs for all employees.

    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 retention standard as a performance standard according to Section 1204(b)

    3. Briefed employees on the retention standard and completed Form 6774, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard, Form 6850-BU, Bargaining Unit Performance Appraisal and Recognition Request, Form 6850-NBU, Non Bargaining Unit Performance Appraisal, Form 12450-A, Manager Performance Agreement, Form 12450-B, Management Official Performance Agreement, Form 12450-D, Management/Program Analyst Performance Agreement, and Interim TDF 35-07, SES Performance Management System - Executive Performance Agreement, 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. Employee Section 1204 status in HR Connect

    4. Employee Section 1204 mandatory training status, especially for new hires who may have missed the ELMS annual training cycle

    5. 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

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

    7. Grievances and hearing narratives

    8. Comments/reports offered by the NTEU

    9. Group discussions

    10. Meeting Minutes - contains group, branch, territory, area, division, or director meetings

    11. Local Guidance Memoranda

    12. 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. Time sheet 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. Employee's and supervisor's signatures and dates on the original form filed in the EPF indicates the employee receipt of Form 6774.

    2. Interim TDF 35-07. 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. 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. 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. 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. 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. 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.

1.5.3.8.4  (02-05-2015)
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, employees' self-assessments and mid-year or progress reviews. After correction, the manager shares revised documentation with the appropriate recipients.

      Note:

      Although using ROTERs in self-assessments does not violate RRA 98, Section 1204, to dispel even the appearance of impropriety, employees should not be permitted to use ROTERs in self-assessments according to IRM 6.430.3.4.2.2, Using Records of Tax Enforcement (ROTERs) in Self-Assessments. See IRM 1.5.2.10.2, Prohibited Use of ROTERs, and (4) below.

    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 ROTER violations to Form 1204-MV, Manager’s Quarterly Certification - With Violations, 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. CFO Independent Reviews

    2. TIGTA Section 1204 Audit Reviews

      Note:

      TIGTA Potential ROTER violations are verified by GLS. When GLS concurs with the ROTER finding, the manager must report it on the next quarterly self-certification.

    3. Functional Operational Reviews

    4. Quarterly Self-Certification Reviews

  4. A manager or next level reviewer may identify a ROTER in a proposed narrative of an employee's self-assessment, appraisal or award nomination during the routine review process. If the document is not final, the manager or next level reviewer should return it to the originator with instructions to revise the ROTER 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 issues an employee appraisal in final form which includes a ROTER, the first-level manager (rater/reviewing official) and second-level manager (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.

1.5.3.8.5  (02-05-2015)
Counting and Reporting ROTER Violations

  1. Section 1204 managers report violations on the Form 1204-MV, Manager’s Quarterly Certification - With Violations. 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 rater 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.

    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 provided to all employees, the minutes represent one violation.

  6. A document including one ROTER violation that is posted to a web site 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:

    COUNTING ROTER VIOLATIONS
    This two-column table identifies how to count ROTER violations. The first column lists types of ROTERs, and the second column explains how to count them.
    Types of ROTERs 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

1.5.3.8.6  (02-05-2015)
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 Section 1204 audit

  2. Section 1204(b) non-compliance for the retention standard occurs on:

    1. Form 6774, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard

    2. Form 6850-BU, Bargaining Unit Performance Appraisal and Recognition Request

    3. Form 6850-NBU, Non Bargaining Unit Performance Appraisal

    4. Form 12450-A, Manager Performance Agreement

    5. Form 12450-B, Management Official Performance Agreement

    6. Form 12450-D, Management/Program Analyst Performance Agreement

    7. Interim TDF 35-07, SES Performance Management System - Executive Performance Agreement

  3. Section 1204(b) non-compliance for the retention standard occurs 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 2013 for the CFO Independent Review, FY 2014 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 HR Connect under ePerformance) are required on the documents filed in the EPF to avoid a Section 1204(b) instance of non-compliance.

  4. Instances of retention standard non-compliance are reported in the managers' 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

  5. 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

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

  6. Each instance of retention standard non-compliance is reported as one Section 1204(b) finding, regardless of the number of manager signatures.

  7. 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

      Note:

      Potential Section 1204(b) non-compliance identified in the annual TIGTA audit is reported unless the audit finding conflicts with IRM policy guidance.

    4. Operating/functional division independent reviews

  8. Timeliness of receipt/acknowledgement (sharing) and evaluation (rating) for the performance standard is not a Section 1204 requirement. This means that retention standard acknowledgement and evaluation 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.

    Note:

    While timeliness is not specifically a requirement for Section 1204, it is not intended to circumvent performance management requirements.

  9. Performance management requires the timely acknowledgement and evaluation of performance standards.

    1. For CJE employees, IRM 6,430.3.3.4.2, Sharing and Discussing the CJE Performance Plan, states that the supervisor must meet with the employee within 30 days of the beginning of the employee's appraisal period or when the employee is assigned to a new position that is expected to last at least 60 days or longer (e.g. temporary promotion, detail). This time frame makes certain that the employee has sufficient time to understand the supervisor's expectations for job performance and what performance is needed to achieve a specific rating.

    2. For managers, management officials and confidential management/program analysts, IRM 6.430.3.2.1, Starting the Performance Appraisal Cycle, states that except in rare circumstances such as when the employee is on extended sick leave, the supervisor must meet with the employee within the first 30 days of the beginning of an employee's appraisal period, or when the employee is assigned to a new position for at least 60 days (e.g., temporary promotions, details), to review responsibilities and establish commitments or objectives and discuss the retention standard for the fair and equitable treatment of taxpayers. The performance appraisal cycle for managers, management officials, and confidential management/program analysts is based on the fiscal year and normally begins October 1.

    3. IRM 6.430.2.4.2.1, Performance Appraisal Due Dates, states that the supervisor must complete the employee's annual appraisal for both bargaining unit and non bargaining unit employees within the scheduled time limits shown in the 2012 National Agreement II, provided the employee has been observed for 60 days or more against his or her signed performance plan during the appraisal period.

1.5.3.8.7  (02-05-2015)
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, Managers' Quarterly Self-Certification - No Violations or Form 1204-MV, Managers' Quarterly Self-Certification - With Violations, 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 quarterly self-certification may be signed and dated on the last day of the quarter (December 31st, March 31st, June 30th, September 30th).

    4. The self-certification includes the entire quarter, so it should 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.

    5. 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.

    6. Detailed instructions for completing these forms may be found on the certification forms. The Section 1204 certification reporting forms are reviewed and revised annually, as needed.

  2. The manager’s quarterly self-certification is an electronic process.

    1. Managers must retain signed copies of completed certifications for audit and review purposes.

    2. The completed Form 1204-M and Form 1204-MV are not submitted to the CFO.

    3. The completed Form 1204-M or Form 1204-MV may be stored electronically and must be made available upon request.

    4. Managers are required to retain quarterly self-certifications for three years.

    Note:

    Some operating/functional divisions may require offices to maintain hard copies of their quarterly certifications.

1.5.3.8.7.1  (02-05-2015)
Self-Certification Checklist

  1. 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.

  2. For the quarterly self-certification review, Section 1204 managers should review:

    1. All Section 1204 employees who are assigned to them as of the last day of the quarter

    2. All evaluations and EPFs for their employees

    3. All management activities such as meeting minutes and memoranda for the entire quarter for their immediate office. See IRM 1.5.3.8.3, Manager’s Quarterly Self-Certification Review Components, for the documents/information that should be reviewed quarterly

    4. The status of the HR Connect Section 1204 indicator for their employees

    5. The Section 1204 training status of new hires

1.5.3.8.8  (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 serve 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. A 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 web site. See Digital Signatures Instructions.

1.5.3.8.9  (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, Next-Level Manager's Quarterly Certification Summary – No Violations, or Form 1204-NV, Next-Level Manager's Quarterly Certification Summary- With Violations, 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 are found on the forms themselves.

  2. The completed Form 1204-N and Form 1204-NV 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.

1.5.3.8.10  (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 make certain 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 1.5.3.10, Section 1204 Penalty Determinations, for additional information.)

1.5.3.8.11  (02-05-2015)
Consolidated Office Certification

  1. Section 1204 appropriate supervisors consolidate the RRA 98 Section 1204 Quarterly Certification Summaries received from their 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, 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, 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 are 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.

1.5.3.8.12  (02-05-2015)
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, Consolidated Office Transmittal Memorandum - No Violations, is completed by the heads of operating/functional divisions if they are reporting no Section 1204(a) violations and are in compliance with Section 1204(b).

    2. Form 1204-TV, Consolidated Office Memorandum - With Violations, is completed by the heads of operating/functional divisions who are reporting Section 1204(a) violations and/or incidents of Section 1204(b) non-compliance.

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

  3. Heads of operating/functional divisions should send the following electronically to the CFO within 45 calendar days after the end of the quarter:

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

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

1.5.3.8.12.1  (02-05-2015)
CFO General Summary

  1. The CFO requires a general summary to support the CFO Section 1204 quarterly memorandum of record. The quarterly summary should indicate:

    1. HR Connect Verification - Indicate whether the Section 1204 managers have verified that the HR Connect indicator has been reviewed and input as needed to identify Section 1204 managers and employees. The HR Connect Section 1204 indicator is used by the operating/functional divisions to identify Section 1204 managers and employees. The HR Connect Section 1204 indicator allows managers and the CFO to determine the Section 1204 population as of a point in time.

    2. Mandatory Briefings Verification - Indicate whether newly hired Section 1204 managers and employees have been advised to complete or have completed the Section 1204 mandatory training. The mandatory briefing can be self-assigned through the ELMS catalog or may be assigned by ELMS on a quarterly basis.

    3. Section 1204(a) violations - Provide the total number of violations and the related corrective actions taken.

    4. Section 1204(b) non-compliance - Provide the total number of instances of non-compliance and the related corrective actions taken.

    5. Form 1204-T, Consolidated Office Memorandum- No Violations or Form 1204-TV, Consolidated Office Memorandum- With Violations - Provide the appropriate Consolidated Office Transmittal form.

    6. Appropriate Supervisor Verification - Confirm that the names and titles of the appropriate supervisors appear on the Form 1204-T or Form 1204-TV. These names are used to identify the organizational contacts and appropriate supervisors who provided certification at the end of each quarter

    7. General operating/functional division's plans and actions to improve Section 1204 compliance, as applicable.

1.5.3.8.13  (02-05-2015)
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.

    QUARTERLY CERTIFICATION FORMS
    This four-column table describes the certification forms and responsible individuals. The first column identifies the individual, the second column lists the required document, the third column lists the electronic certification forms, and the fourth column indicates whether to submit the forms to the CFO.
    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 and general summary. Retain electronic copies.
    With Violations = Form 1204-TV Yes. Submit with appropriate supervisors and general summary. Retain electronic copies.

1.5.3.8.14  (02-05-2015)
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 quarterly certification summary of the IRS' compliance with RRA 98 Section 1204 and includes a comparison with activity for the same period in the prior fiscal year (FY). 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. 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. Form 13839-A, Note to Reviewer (For Signature Package), providing background, issues to be aware of, prior history, legal authority, and any additional information

    5. Form 14074, 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 by the IRS Commissioner, filed, and made available upon request.

1.5.3.8.15  (02-05-2015)
Other Violations

  1. There are a variety of Section 1204 violations that are not reported on the manager's quarterly certification. As stated previously, Section 1204(a) violations and Section 1204(b) instances of non-compliance should be addressed and reported.

  2. Other Section 1204 violations may be found in various types of reviews:

    1. Quarterly certification reviews

    2. Functional operational reviews conducted by headquarters, area, or territory managers or staff

    3. CFO independent reviews

    4. TIGTA audit reviews

  3. These violations which are not reported on the manager's quarterly certifications that require corrective action include:

    1. Failing to retain or provide a quarterly certification Form 1204-MV, Managers' Quarterly Self-Certification - With Violations, upon request

    2. Evaluating employees based on quantity measures, see Regulation §801.3(e)(3), Measuring Employee Performance, and IRM 1.5.2.11.2, Prohibited Use of Quantity Measures

    3. Evaluating supervisors directly based on the achievement of numerical goals, see IRM 1.5.1.12, Evaluating Performance of an Individual

    4. Using numeric results achieved for any measure to directly equate the evaluation of an individual, see IRM 1.5.1.6(1)(g), Performance Measures Quick Reference

    5. Using ROTERs in a prohibited manner, see IRM 1.5.2.10.2, Prohibited Use of ROTERs

    6. Using ROTERs in a prohibited manner for BU and NBU employees assigned to CJEs, see IRM 6.430.2.4.5.1, Using ROTERs in Self-Assessments

    7. Using ROTERs in a prohibited manner for Managers, Management Officials and Confidential Management/Program Analysts, see IRM 6.430.3.4.2.2, Using Records of Tax Enforcement Results (ROTERs) in Self-Assessments

    8. Including TERs in appraisals, see IRM 1.5.2, Prohibited Use of TERs

    9. Failing to share and discuss the CJE performance plan timely, see IRM 6.430.2.2.4.2, Sharing and Discussing the CJE Performance Plan

    10. Failing to start a performance appraisal cycle timely, see IRM 6.430.3.2.1, Starting the Performance Appraisal Cycle

  4. For additional guidance on addressing violations, see Document 11500, IRS Manager's Guide for Penalty Determinations.

1.5.3.8.16  (02-05-2015)
Frequently Asked Questions for Quarterly Certifications

  1. Do I report violations that I didn't make?

    • Although it's called a "self-certification," you are certifying your organization's compliance with Section 1204 rules, which includes anything prepared by acting managers or former managers relating to the organization you now supervise. When you explain on the attachment to Form 1204-MV, Manager's Quarterly Self-Certification - With Violations, the violation and corrective actions taken, you may say that you identified an error made by a prior manager and explain what you did to correct the violation.

  2. As a new manager what should I do for the quarterly certification?

    • All new managers and managers moving to a new group or receiving a new employee should review the EPFs for the employee(s) and correct and report all Section 1204(a) violations and Section 1204(b) instances of non-compliance found. Regulation 801 and IRM policy violations that you discover must also be corrected, but are not reported on the Section 1204 quarterly certification forms.

  3. How far back do I go in reporting prior quarter violations discovered now?

    • Normally, it's the current fiscal year and one prior fiscal year.

      Reminder:

      IRM 1.5.3.8.3, Manager’s Quarterly Self-Certification Review Components, identifies the documents/information that should be reviewed.

  4. How do I report violations that occurred in a previous quarter?

    • Violations are reported when discovered, even those from previous quarters. The attachments on the Form 1204-MV have an area to list the quarter where the violation(s) occurred. You would normally not report any violations older than the previous fiscal year.

  5. What is the earliest that I can complete and sign the quarterly certification?

    • The quarterly self-certification may be signed and dated on the last day of the quarter. (December 31st, March 31st, June 30th, September 30th). See IRM 1.5.3.8.1, Due Dates.

  6. Can I use a proxy to delegate the responsibility for the certification?

    • Proxies for a manager’s 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.

      Note:

      Form 1204-M, Manager's Quarterly Self-Certification - No Violations or Form 1204-MV, Manager's Quarterly Self-Certification - With Violations

    • Proxies to sign quarterly certifications on behalf of the next-level reviewer are permitted.

      Note:

      Form 1204-N, Next-Level Manager's Quarterly Certification Summary- No Violations or Form 1204-NV, Next-Level Manager's Quarterly Certification Summary- With Violations

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

      Note:

      Form 1204-O, Consolidated Office Certification - No Violations or Form 1204-OV, Consolidated Office Certification - With Violations , Form 1204-T, Consolidated Office Memorandum - No Violations, or Form 1204-TV, Consolidated Office Memorandum - With Violations ).

      See IRM 1.5.3.8.2, Acting Manager and Using Proxies.

1.5.3.9  (02-05-2015)
CFO Independent Review Process

  1. The IRS established the Section 1204 CFO Independent Review process to monitor compliance with Section 1204 of the 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 1.5.1.6(1)(e), Performance Measures Quick Reference, prohibits comparisons between organizations

      Note:

      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.

1.5.3.9.1  (02-05-2015)
Independent Review Summary

  1. 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)

  2. 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

  3. The CFO Engagement Memorandum is posted on the CFO web site.

  4. The CFO convenes a Section 1204 Independent Review team comprised of members of the operating/functional divisions.

  5. 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.

  6. The size of the review team is based on the number of sites and usually includes representatives from all Section 1204 operating/functional divisions.

  7. The CFO requests all Section 1204 operating/functional divisions to participate in at least one review each year.

  8. The CFO determines the review period for the Independent Review process. The review period covers a fiscal year and generally occurs from April to July, however; the timing is subject to change. 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

  9. 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


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

    1. IRM 1.5.2, Managing Statistics in a Balanced Measurement System, Uses of Section 1204 Statistics

    2. IRM 1.5.3, RRA 98 Section 1204 Managers' 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

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

1.5.3.9.2  (02-05-2015)
On-Site Reviews

  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.

  2. The operating/functional divisions fund the travel and related costs for employees selected to participate on the review team.

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

  4. The CFO manages on-site 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

  5. If multiple buildings are involved for on-site reviews, the CFO schedules the logistics for sites and reviewers.

  6. The review team examines performance and other documents for Section 1204(a) violations, Section 1204(b) instances of non-compliance and Section 1204(c) managers’ quarterly certifications.

  7. The review team makes copies of documentation needed to support findings and returns employee files to the manager.

  8. The review team records findings on manager and employee checklists. Before leaving each site, review team members share findings with the affected managers via e-mail. Potential ROTERs identified are provided to GLS for confirmation.

1.5.3.9.3  (02-05-2015)
Virtual Reviews

  1. Virtual reviews are held using IRS' electronic media such as e-mail, Live Meeting, and Office Communicator.

  2. The CFO designates a specific period to conduct the virtual reviews and establishes an open link or location for reviewers using Live Meeting and Office Communicator (or equivalent). The CFO will establish a kick off conference call the first day of the review and schedule two conference calls daily (for example 9:00 a.m. and 2:00 p.m.) to keep the review team connected and supported.

    Note:

    While the advantage of virtual reviews is that review team members are not required to travel and may participate in the CFO independent reviews at their post of duty, location, or alternate work site, the CFO encourages reviewers to dedicate time to these reviews during the specified period such as obtaining conference space to focus solely on the employee documentation for a thorough examination.

  3. The CFO notifies the selected managers and identifies the employees of that manager for review and the documentation required. Selected managers are requested to provide files for two employees, as instructed.

  4. The files must be provided via secure, encrypted methods to protect personally identifiable information (PII) and sensitive but unclassified (SBU) information.

  5. The review team examines performance and other documents for Section 1204(a) violations, Section 1204(b) instances of non-compliance and Section 1204(c) managers’ quarterly certifications.

  6. The review team members take precautions to secure employee performance documentation such as storing and locking files when not in use.

  7. The review team records findings on manager and employee checklists. Review team members share findings with the affected managers via e-mail and may schedule calls to managers with findings.

  8. Printed copies of electronic copies are destroyed after use unless necessary to support findings.

1.5.3.9.4  (02-05-2015)
HR Connect Reviews

  1. HR Connect reviews are CFO independent reviews that use HR Connect as the primary source of review files and documentation. Access to HR Connect is granted to the review team for a designated period to obtain performance documentation.

    Note:

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

  2. The CFO notifies the selected Section 1204 managers and identifies two employees for each manager whose performance documents will be reviewed.

  3. The CFO will establish a kick off conference call the first day of the review and schedule two conference calls daily (for example 9:00 a.m. and 2:00 p.m.) for review team questions or clarifications.

  4. The review team examines HR Connect performance documents to identify Section 1204(a) violations and Section 1204(b) instances of non-compliance.

    Note:

    Form 6774, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard, is not currently stored in HR Connect. Selected managers will be requested to provide these documents.

  5. Section 1204(c) managers’ quarterly certifications are obtained from the selected manager and reviewed by the review team since these certifications are not retained in HR Connect.

  6. Review team members take precautions to secure printed employee performance documentation such as storing and locking files when not in use. Printed copies of electronic copies are destroyed after use unless necessary to support findings.

  7. The review team records findings on manager and employee checklists. Review team members share findings with the affected managers via e-mail and may schedule calls to managers to discuss findings.

1.5.3.9.5  (02-05-2015)
Site, Manager, and Employee Selection

  1. The CFO downloads the HR Connect Section 1204 indicator report to identify the population for the review period.

  2. The CFO provides SOI with a listing of the selection for the last three years to eliminate those locations from the sample.

  3. The HR Connect report is used 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. CFO selects a number of non-Section 1204 managers.

  4. SOI provides the results of the random sampling to the CFO. 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.

  5. The CFO selects a designated number of Section 1204 and non-Section 1204 managers for each Independent Review site.

  6. Using the HR Connect report, the CFO selects two employees for the managers that SOI selected.

  7. The CFO e-mails the manager to notify them that they have been selected for review.

  8. The manager notification for virtual reviews, requests EPF information via secure method to protect PII and S data and provides:

    1. The period of the CFO Independent Review

    2. The selected employees

    3. Background information on RRA 98

    4. The CFO Engagement Memorandum

  9. The manager notification for on-site reviews, 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

  10. The Section 1204 manager notification e-mail is copied to the operating/functional division Section 1204 program manager who assists his/her selected manager in understanding the CFO Independent Review requirements.

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

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

    1. Manager's POD location (for on-site reviews)

    2. Manager's availability for an interview (for both on-site and virtual reviews)

  13. 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.

  14. The non-Section 1204 manager is interviewed to confirm his/her non-Section 1204 status. The results of the interview are recorded on the non-Section 1204 manager checklist.

1.5.3.9.6  (02-05-2015)
Independent 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 S information.

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

    1. The review period

    2. The manager's name

    3. The operating/functional division

    4. The managerial items reviewed

    5. Section 1204(a) violations

    6. Section 1204(b) instances of non-compliance

    7. Section 1204(c) manager's certifications errors or omissions identified

    8. IRM policy violations

    9. Regulation 801 violations

    10. Discussions held with the selected manager

    11. Attachments to support violations noted

    12. The reviewer's name and date

  6. The managerial items for review may include:

    1. EPF (for on-site reviews)

    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:

    1. The review period

    2. The employee's name

    3. The manager's name

    4. The operating/functional division

    5. EPFs and employee evaluations documents

    6. Section 1204(a) violations

    7. Section 1204(b) instances of non-compliance

    8. Section 1204(c) manager's certification errors and/or omissions identified

    9. IRM policy violations

    10. Regulation 801 violations

    11. Attachments to support violations noted

    12. The reviewer's name and date

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

    1. Form 6067, Employee Performance Folder Record (for on-site reviews)

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

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

    4. Form 9127, Recommendation for Recognition

    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:

    1. The review period

    2. The manager's name

    3. The operating/functional division

    4. The responses to interview questions

    5. The reviewer's name and date

  10. 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.

  11. 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.

1.5.3.9.7  (02-05-2015)
Independent Review Procedures

  1. When reviewing manager and employee files for Section 1204(a) violations, Section 1204(b) instances of non-compliance for the retention standard, IRM policy violations, and Regulation 801 violations, please note the following:

    1. Employee items for review (within the review period) are based on the date finalized, which is usually when the employee signed the documentation. There may be additional appraisals other than the annual appraisal, such as mid-year appraisals, departure appraisals, and/or appraisals for job applications.

      Example:

      If the review period is October 1, 2013, to September 30, 2014, and the appraisal is signed by the manager on September 30, 2014, but is signed by the employee later, then reviewers should look for the previous appraisal because the current document falls outside the review period. It may be possible that the previous appraisal was signed on September 30, 2013, and there is no appraisal for the review period. This is not an error and does not count as a violation for the manager.

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

    4. If the manager’s quarterly certification(s) are not provided, a Section 1204(c) finding should be recorded for each quarter without certification documentation.

    5. 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 the types and dates of:

    1. Group meetings

    2. Employee documentation

    3. Functional/operational reviews

  3. Review findings must be clearly identified as:

    1. Section 1204(a) ROTER violations

    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, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard, if the retention standard is not signed and dated by the employee and the manager

    3. Form 6850-BU, Bargaining Unit Performance Appraisal and Recognition Request, or Form 6850-NBU, Non Bargaining Unit Performance Appraisal, 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 or EPF checklist and e-mail the results to the CFO Section 1204 program manager before the review ends to allow for a completeness check. For virtual or HR Connect reviews, reviewers highlight and/or identify documents that support findings in the e-mail summary to send to the CFO Section 1204 program manager.

    Note:

    The CFO Section 1204 program manager provides sanitized samples for each as a guide.

  10. Section 1204(b) and Section 1204(c) issues do not require a write-up, but notate findings on the manager or EPF checklist and make copies of documents, as applicable.

  11. CFO Independent Review findings must be shared with the manager whether the review is on-site, virtual or HR Connect. Discussing the findings allows the selected 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 (the next-level manager) 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. Complete the manager notification and indicate the method of communication on the manager's checklist. This 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 for their operating/functional division. This summary is used by the operating/functional divisions to discuss findings with managers and develop or update guidance for their organization.

    Example:

    The site review summary for W&I is provided to the W&I Section 1204 Program Manager.

  16. The CFO submits potential ROTERs identified to GLS for review and concurrence. If GLS verifies that the potential ROTERs are actual ROTER violations, managers should correct the ROTER and record it on the next quarterly certification.

  17. A summary of all findings by operating/functional division is prepared and submitted by e-mail to each operating/functional division’s highest level appropriate supervisor when all locations for the CFO Independent Reviews have been reviewed. The summary e-mail includes carbon copies to the Area Directors and the Section 1204 Program Manager.

    Example:

    A summary e-mail is sent to the National Chief of Appeals with copies to the Deputy Chief, Area Directors, and the Appeals Section 1204 Program Manager.

1.5.3.9.8  (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.

1.5.3.9.9  (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 operating/functional division 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 CFO 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.

1.5.3.10  (02-05-2015)
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 Document 11500, Manager's Guide to Penalty Determinations.

  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.

1.5.3.11  (02-05-2015)
Annual TIGTA Audit

  1. TIGTA is required under IRC 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. The TIGTA review determines whether the IRS complies with:

    1. Section 1204(a), which prohibits the IRS from using any ROTER to evaluate employees or to impose or suggest production quotas or goals.

    2. Section 1204(b), which requires that employees be evaluated using the fair and equitable treatment of taxpayers as a performance standard.

    3. Section 1204(c), which requires each Section 1204 appropriate supervisor to self-certify quarterly whether ROTERs were used in a prohibited manner and whether their employees have signed to acknowledge receipt of and have been evaluated on the retention standard.

  3. 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 web site for RRA 98 Reports .

  4. 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. Validating TIGTA potential ROTERs findings with GLS

    4. Addressing audit recommendations

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

  5. Operating/functional division audit responsibilities include:

    1. Participating in TIGTA audit conferences

    2. Addressing audit findings and preparing corrective actions

    3. Reporting verified Section 1204(a) violations and Section 1204(b) instances of non-compliance on the manager's next quarterly certification

1.5.3.12  (02-05-2015)
Records Retention

  1. Section 1204 managers are required to retain the following records:

    1. Employee receipt/acknowledgement of the retention standard (four years)

    2. Employee performance ratings of the retention standard (four years)

    3. Quarterly Section 1204(c) certifications (three years)

  2. For the CFO, 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.

1.5.3.13  (02-05-2015)
Mandatory Section 1204 Training

  1. The CFO conducts mandatory RRA 98 Section 1204 training for managers and employees every year through 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 this IRM.

  3. Training topics may include:

    1. RRA 98 Section 1204 and Regulation 801 requirements

    2. TERs and ROTERs

    3. Retention standard for the fair and equitable treatment of taxpayers (Retention Standard)

    4. Use of quantity and quality measures

    5. CFO Section 1204 Independent Review and the TIGTA audit

    6. Quarterly managers' self-certification

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

    8. Corrective actions from TIGTA recommendations and CFO independent review findings

    9. HR Connect Section 1204 Indicator

  4. Section 1204 ELMS training may be announced through a CFO memorandum, mandatory training alert, the Leader's Alert, and/or an operating/functional division’s news alert on the IRS Intranet.

  5. The annual Section 1204 mandatory training is scheduled and automatically assigned to managers' and employees' learning plans.

  6. The CFO provides HR Connect reports quarterly to LEADS that contain the entire Section 1204 population identified through the HR Connect Section 1204 indicator. These reports are used by ELMS staff to automatically assign mandatory Section 1204 training to new hires through their learning plans.

  7. Section 1204 training is also available through ELMS and may be self-assigned rather than waiting for quarterly training assignment. New managers are encouraged to self-assign training to have the right tools to perform their Section 1204 responsibilities.

  8. Operating/functional divisions are responsible for monitoring mandatory training completion for their organizations. Managers may assess the status of training completion for their teams by running status reports through ELMS (also part of the quarterly certification process).

1.5.3.14  (02-05-2015)
Section 1204 Forms List Summary

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

    SECTION 1204 PROGRAM FORMS
    This is a three-column table of forms used in the Section 1204 program. The first column lists the form, the second column the title of the form, and the third column explains the form’s usage.
    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

1.5.3.15  (02-05-2015)
Related Resources

  1. Internal Revenue Service Restructuring and Reform Act of 1998

  2. Regulation 801

  3. Document 11678, National Agreement - Internal Revenue Service (IRS) and National Treasury Employees Union (NTEU)

  4. IRM 6.430.1, Introduction to Performance Management and other HCO's Performance Management policies

  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, Managing Statistics in a Balanced Measurement System, The IRS Balanced Performance Measurement System

  7. IRM 1.5.2, Managing Statistics in a Balanced Measurement System, Uses of Section 1204 Statistics

  8. CFO Corporate Planning and Internal Control web site - Section 1204

  9. Small Business/Self Employed web site - SB/SE's Section 1204 At-a-Glance Guide

Exhibit 1.5.3-1 
HR Connect Instructions - Manager

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.5.3-2 
HR Connect Instructions - Employee

This image is too large to be displayed in the current screen. Please click the link to view the image.

Exhibit 1.5.3-3 
Employee Certification/Recertification - Continued

This image is too large to be displayed in the current screen. Please click the link to view the image.

More Internal Revenue Manual