The enrollment process takes place in the fall of each year. Agencies wishing to participate in the GLDEP must complete an Annual Enrollment Form. The form is used by the enrolling agency to designate which extracts it would like to receive for the upcoming year. Need and Use Statements must accompany all enrollment forms. Need and Use Statements are documents used by states to tell IRS why they need the federal tax data they are requesting and how they will use that data. All Need and Use Statements submitted with Annual Enrollment Forms must be approved by an IRS Disclosure Manager (DM) before any federal data may be given to the state agency. Federal tax data is shared with state agencies based on the agency's need and use of the data.

The mechanics of the Annual Enrollment Process are as follows. Each year in August an "enrollment package" is sent electronically (via the IRS e-mail system) from GLD Data Services to GLs in the field. GLs must then forward the package to their state counterparts. The enrollment package contains the Annual Enrollment Form, instructions for completing the form, a need and use justification form (attachment to the Enrollment Form), a brief description of each data extract available, and a cover memo from the Chief, Data Services. The cover memo contains information on when and how the GL should forward completed enrollment forms to the Detroit Computing Center (DCC), their final destination.

The GL and DM will act as consultants to the enrolling agency during the enrollment process. The GL either should become involved in the process of completing the enrollment form or should review the form carefully when received by the enrolling agency. If a tax agency is ordering an extract not previously ordered, the GL must discuss how the agency plans to use the information. If an agency is not ordering an extract they have ordered in the past, the GL should question the omission of that extract. The more familiar a GL becomes with the operation of agencies within their jurisdiction, the better able they will be to assist the agency with their decision regarding which federal tax data to request.

The Annual Data Element Selection Process takes place in the spring of each year. Agencies that have requested either the IMF/IRTF or BMF/BRTF extract must complete an Annual Data Element Selection Form. The data element selection form is used by the enrolling agency to designate which of the optional data elements for these extracts it would like to receive. Need and Use Statements must accompany all data element selection forms. Need and Use Statements, in this case, are documents used by states to tell IRS why they need the specific data elements they are requesting, and how they will use those data elements. All Need and Use Statements submitted with Annual Data Element Selection Forms must be approved by an IRS Disclosure Manager (DM) before the data elements being requested may be given to the state agency.

The mechanics of the Annual Data Element Selection Process are as follows. Each year in May a "data element selection package" is sent electronically (via the IRS e-mail system) from GLD Data Services to GLs in the field. GLs must then forward the package to their state counterparts. The data element selection package contains the Annual Data Element Selection Forms, instructions for completing the forms, an Authorization Document, and a cover memo from the Chief, Data Services. The cover memo contains information on when and how the GL should forward completed data element selection forms to the DCC, their final destination.

The GL and DM will act as consultants to the enrolling agency during the data element selection process. The GL should either become involved in the process of completing the data element selection form, or should review the form carefully when received from the enrolling agency.

Source of Data: Data is extracted from the IRS Information Returns Master File (IRMF). The 1099-MISC extract provides non-employee compensation information from the federal Form 1099-MISC.

Distribution: The 1099-MISC extract is distributed annually in April.

Uses:

Source of Data: The BMF/BRTF extract contains data from the Business Master File (BMF) and Business Return Transaction File (BRTF).

Distribution: The BMF and BRTF extracts are created and shipped separately. They are distributed annually in October, November and December, depending on the sort.

Uses: General uses of the BMF/BRTF extract include:

Source of Data: Data is extracted from the IRS Business Master File.

The extract will provide entity information on parent corporations filing a consolidated return as well as on the subsidiary corporations in the affiliated group on whose behalf the parent filed. When a parent corporation files a consolidated return (Form 1120, U.S. Corporation Income Tax Return), a Form 851, Affiliations Schedule, is attached which lists the subsidiary corporations in the affiliated group. The Corporate Affiliations Extract by State Code (a range of zip codes will be used for city taxing agencies) will provide state agencies with entity information on parent and subsidiary corporations. Records for state taxing agencies will be extracted based on a subsidiary corporation having an address within the state of the requesting state taxing agency (by state code). When a subsidiary corporation's address matches the state of the requesting agency, the requesting agency will receive a set of records that will include all subsidiary corporations in the affiliated group and the parent corporation, regardless of what state the parent or the other affiliated subsidiaries are in.

Records are extracted by state code based on the subsidiary corporation appearing on a Form 851. A subsidiary corporation will only be associated with the most current parent corporation that is filing on their behalf.

In addition to the state code sort, beginning with Extract Year (EY) 2005, the extract is also available by an EIN sort based on a tickler file submission by enrolled agencies. City taxing agencies can receive the extract based on an approved list of zip codes or by EIN sort.

Distribution: The Corporate Affiliations Extract by State Code and EIN are scheduled to be distributed annually in September of each year.

Uses: General uses of the Corporate Affiliations extract include:

Source of Data: The Computer Program (CP) 2000 extract contains information from IRS underreporter cases. IRS matches information returns, such as Form W-2 and Form 1099 filed by employers, banks, businesses, and other payers with information from individual tax returns. Discrepancies are reviewed and, if not resolved at the campus, an automated underreporter (AUR) case is generated. Notice CP 2000 is sent to the taxpayer proposing an adjustment to their account. Taxpayer information from accounts which result in additional federal assessments is provided in the extract for participating states.

Only fully agreed cases are provided on the CP 2000 extract. After the assessment, a taxpayer may provide information which could result in an adjustment or abatement of the liability. If changes are made to the fully agreed cases, there is currently no way to capture the information by IRS. It may be necessary for the agency to contact the taxpayer to resolve the issue. Partially agreed case amounts are not included in the file. Inventory levels on the CP 2000 extract vary as the inventory levels worked at the campuses fluctuate.

Distribution: The CP 2000 extract has an irregular distribution schedule with 6 distributions over approximately 19 months, followed by a one-time SSN tickler option (Distribution #7).

Uses: General uses of the CP 2000 extract include:

Source of Data: Examination records reflect results of individual and/or business cases closed by Examination during a fiscal year (October 1st - September 30). The data is extracted annually from the IRS database, the Audit Information Management System (AIMS). The Appeals records provide the same type of information pertaining to cases closed by Appeals during a calendar year January 1 - December 31). This information is taken from the IRS database, Appeals Management Information System (LAND).

The state submits an annual tickler tape of TINs to generate the extract.

Distribution: The extract is distributed annually in May.

Uses: General uses of the Exam/Appeals extract include:

Source of Data: The data for the FEIN extract is obtained from the Business Master File using the EIN Research and Assessment System (ERAS). The source of that file is the federal Form SS-4, Application for Employer Identification Number. The newly issued FEINs will be provided monthly regardless of how the FEIN is issued: Internet EIN, fax, or mail. This extract will be sorted by the address of the entity receiving the new FEIN for the state code sort and further sorted for the cities based on a pre-approved listing of zip codes. The majority of data elements (line items) from the Form SS-4 are captured.

Distribution: The FEIN extract is distributed monthly. The distribution year runs from February to January. Each distribution will consist of new FEINs issued in the previous month.

Uses: General uses of the FEIN extract include:

Source of Data: The IMF/IRTF extract contains data from the Individual Master File (IMF) and the Individual Returns Transaction File (IRTF).

The IMF contains general entity information (SSN, name, address, wages, adjusted gross income, interest income, etc.) for individual income taxpayers.

The IRTF contains fields currently transcribed from Form 1040, U.S. Individual Income Tax Return, Form 1040A, or Form 1040EZ, Income Tax Return for Single Filers and Joint Filers With No Dependents, and their accompanying forms and schedules. IRTF information is obtained from the tax return as originally filed by the taxpayer, but can reflect math error corrections. The information is not updated to reflect amended returns or subsequent adjustments. Data in these records will reflect any corrections that were made by the campus before the return could be posted (math error corrections). Information that is obviously incorrect, such as math errors, cannot be posted to master file. When a math error is corrected, a notice is sent to the taxpayer explaining the change. Brief explanations of these notices are included in the IMF/IRTF specification book.

Since the IMF contains entity information and IRTF does not, the files must be received together. The state may receive their IMF/IRTF extracts based on the address of the taxpayer as indicated on the federal return (state code), by state supplied zip code (zip code tickler file) or state supplied SSNs (the SSN tickler file can include Individual Tax Identification Numbers, ITINS). IMF/IRTF extracts by zip code are most frequently requested by cities, allowing the cities to receive information on taxpayers located within their jurisdiction.

Production:

Distribution: The IMF/IRTF extract is distributed annually in September by state code sort, in October by zip code sort, and in November by SSN sort.

Uses: General uses of the IMF/IRTF extract include:

Source of Data: The IRMF extract contains data from the Information Returns Master File (IRMF), which is a database containing all information returns transcribed by IRS. It contains data about both the payer (filer) as well as data about the payee (recipient of income) from various forms including Form 1099, Form 1098, Schedule K-1, and Form W-2.

This extract is provided annually to the states by payee state code. Schedule K-1s can also be requested by payer state code. Beginning with the TY 2004 IRMF Extract (to be distributed in calendar year 2006) in addition to the Schedules K-1, Forms W-2 and Forms 1099-MISC will also be available on a separate extract by payer state code.

The IRMF is a large file, with some states receiving over 125 individual magnetic media cartridges. The file takes approximately 18 months to create.

Distribution: The IRMF Extract by Payee State Code is distributed annually in the time period April through June. The extract takes 2 to 3 months to distribute because of its size. The new separate IRMF Extract by Payer State Code will first be available for the TY 2004 IRMF Extract and will complete distribution by the end of September each year.

If multiple addresses are present on the IRMF by Payee State Code Extract, each state participating in the extract receives all information returns for that taxpayer.

The IRMF is divided into 26 segments using the last two digits of the payee's TIN as the indicator for the divisions. Separate cartridges are shipped for each segment.

Uses:

Source of Data: The Levy extract contains data extracted from the IRMF and reflects payer and payee data for specific taxpayers from Form 1099-INT, Form 1099-DIV, Form 1099-MISC, Form 5489, Schedule of Reimbursable Earnings, and W-2, as well as Schedule K-1.

The data is extracted monthly using a state tickler file that contains the name control and TIN of payers. States enrolled for the Levy extract will receive an output file for each month that they submit a tickler filer; however, they need not submit a tickler file every month.

Distribution: Distribution is on a monthly basis dependent on a tickler submission. The distribution year begins in May each year and continues until April of the following year.

Uses: General uses of the Levy extract include:

Source of Data: The Department of Defense (DOD) Active Duty Military Combat Zone personnel information (PC 500 Combat Zone) file is received by the IRS on a monthly basis and posted to the IRS Master File.

The extract file contains a combat zone entrance date and exit date for all active duty military personnel that DOD has identified as deployed in a military combat zone. The file includes full-time and reserve personnel from the five branches of the military (Army, Navy, Air Force, Marines and Coast Guard) as well as National Guard personnel (Army and Air Force). Data is validated by each branch of service. The extract will be sorted by state code (address of taxpayer) using the legal state of residence from military records. This extract is not available to city or local agencies at this time.

Distribution: The Military Combat Zone extract will be distributed monthly beginning in November each year.

Uses: The Military Combat Zone extract will be used to suspend collection efforts and/or enforcement actions against military personnel while serving in a combat zone.

Source of Data: The source of data for the Non-Itemizer extract is the Individual Master File (IMF). The Non-Itemizer extract provides a listing, by state code, of individuals who did not itemize on their prior year federal income tax return.

Distribution: The Non-Itemizer extract is distributed annually in November.

Uses: By matching against state refund recipients, the state can identify those state refund recipients who did not itemize on their federal tax return. The state is not required to issue Forms 1099-G, Certain Government Payments, to these taxpayers and can reduce their costs by reducing the number of Forms 1099-G issued.

Source of Data: Data is extracted from an IRS file known as the PTIN Cross-Reference Database which cross references SSNs and PTINs. The PTIN extract provides the SSN and the PTIN for paid preparers nationwide who have been issued a PTIN. Any paid preparer may apply for a PTIN using Form W-7P, Application for Preparer Tax Identification Number. The PTIN is used as an identifying number by paid preparers who do not want to disclose their SSN on returns they prepare. PTIN data in and of itself is not IRC 6103(d) information, based on advice from Counsel, but can be provided under the Privacy Act, 5 USC 552a. PTIN Extract data has the potential of being commingled by enrolled agencies with IRC 6103(d) extract information such as the IRTF "Preparers SSN or PTIN" field. For purposes of the GLDEP Enrollment Form, the PTIN Extract is, therefore, treated as IRC 6103(d) information.

Distribution: The PTIN extract is distributed quarterly in January, April, July and October and is cumulative.

Uses: Providing the PTIN extract to state taxing agencies allows practitioners the added security of using the IRS PTIN on the state return while allowing the state agency to continue compliance and education programs with practitioners.

Source of Data: The source of data for the TAR extract is the IRS individual Master File (IMF). The extract contains taxpayer address data from the Individual Master File and is based on a state supplied tickler file containing the SSNs and name controls of specific taxpayers.

Accounts for married individuals are established on the IMF using the SSN of one spouse as the primary SSN. Submissions for TAR will be run against the Spouse-Primary Cross-Reference File to determine the primary SSN. Primary and secondary SSNs and the taxpayer's name and address will be extracted for the tape returned to the state tax agency. In addition, the latest tax module year is provided to establish currency of the information.

Distribution: This extract is distributed weekly from February 1 through January 31 in response to a state-submitted tickler file. Participants who enroll for this extract in the Fall cannot submit their initial tickler tape until February 1.

Uses: Some uses of the TAR extract include locating taxpayers that have moved as well as those who are delinquent. Note: Federal agencies may receive address information through TAR under IRC 6103(m)(2), (3), (4), (5), and (7). However, federal agencies are not permitted the same disclosures as the state taxing agencies. The federal TAR extract is totally separate from the GLDEP state TAR extract. The federal TAR extract is NOT part of the GLDEP. Federal agencies reimburse the IRS for this service.

IRS can only provide data that is currently transcribed to IRS Master File. IRS cannot incur expenses for transcribing data not required for federal tax administration.

If a tickler file will be submitted as part of the agency request, the following information is required:

Any state or city covered by IRC 6103(d) and currently enrolled in the IRS GLDEP may use the enhancement process.

The agency must identify the specific information requested by preparing and submitting the request form to the GL. The GL can assist with research and preparation of the request form. A complete statement for the need and use of the information requested must also be provided. If the request is for additional data elements, the request must contain the specific line items (data elements) requested.

GLs must research the request to determine if it is a potential enhancement or a request for data availability.

GLs must attach a statement of the detailed research conducted for the request. The following documents will help the GL in determining if the requested information is currently offered or if the request is valid:

The GL will forward the request to the appropriate Disclosure Manager (DM) (based on the requesting state) for review and approval before submitting it to the GLD Area Manager (AM).

The DM reviews the request for appropriate need and use and approves/denies the proposed need and use. If approved, the DM signs the request form indicating approval of the need and use based on the information available and returns the request to the GL.

If the DM determines the need and use provided by the agency is not adequate for approval, the DM will prepare a denial letter and forward it to the HQ Office of Disclosure for concurrence. Upon concurrence of the denial letter by the HQ Office of Disclosure, the DM will notify the GL and forward the denial letter for signature by the GLD AM. The signed denial letter should be returned to the GL to be forwarded to the requesting agency.