11.3.31  Tax Check Reports on Federal Appointees  (10-12-2010)

  1. The Headquarters, Tax Check Unit issues tax check reports on:

    1. Prospective Presidential appointees

    2. Nominees for Presidential "E" Awards established by Executive Order 10978

    3. Candidates for the Malcolm Baldridge Award

    4. Certain other persons/entities


      Other consent programs based on IRC §6103(c) for delivery of account transcripts are routinely handled by other locally established procedures.

  2. Local Disclosure offices may establish local procedures for responding to requests from:

    1. State and local governments for prospective employees of the governmental entity.

    2. Local Department of Justice Federal Probation Offices for purposes of establishing a taxpayer's compliance with Internal Revenue law while on probation for non-tax related convictions. Disclosure offices should require the state and local governments to use Transcript Delivery System (TDS) or TDS products for this purpose. This will allow the use of Form 4506-T and correctly divert these consents to the campus RAIVS units who are established to handle this type of work.


      Disclosures of Federal tax information to Probation Officers for taxpayers with tax related convictions are typically handled by the Criminal Investigation function based on IRC §6103(h)(4).

  3. Generally, Headquarters Tax Check Reports are requested by Federal agencies to supplement investigations concerning the character, loyalty, or suitability of such prospective appointees, employees, or award nominees.

  4. Requests for tax information from the Headquarters Tax Check Unit, the Martinsburg Computing Center (MCC), and Criminal Investigation at Headquarters for tax information are made pursuant to:

    1. An authorization for disclosure of returns and return information to a designee signed by the taxpayer or corporate officer (see IRM 11.3.2, Disclosure to Persons with a Material Interest, and IRM 11.3.3, Disclosure to Designees and Practitioners); or

    2. A written request signed by the President or by the head of a Federal agency.


      The authority for disclosure is IRC §6103(c) or (g) respectively and regulations contained in 26 CFR §301.6103(c)-1. See Exhibit 11.3.31-1 for an example of a Headquarters Tax Check Unit Waiver.  (06-17-2005)
Information Disclosed in Tax Check Reports

  1. Generally a Headquarters Tax Check Report provides the following information to the requester:

    1. Whether the individual has filed Federal income tax returns as required for the immediately preceding 3 years?

    2. Whether the individual has failed to pay any tax, penalties, and interest within a specified period after notice and demand in the current year or immediately preceding 3 years?

    3. Whether the individual has been or is under investigation for possible criminal offenses under the internal revenue laws?

    4. Whether the individual has been assessed any civil penalty for fraud under the internal revenue laws?

    5. Details concerning any adverse information if permitted by the disclosure consent.

  2. See Exhibit 11.3.31-2 for an example of a Headquarters Tax Check Report.  (12-14-2007)
Securing Information for Tax Check Reports

  1. The Headquarters Tax Check Unit initiates requests for information needed to prepare Tax Check Reports.

  2. Tax Check Transcripts and/or complete transcripts of account are requested from the MCC and/or through IDRS.


    For Presidential appointee requests, MCC should provide the requested information within 24 hours. For all other cases, MCC should provide the requested information within 72 hours.

  3. The Criminal Investigation (CI) function at Headquarters is furnished the name and social security number from the taxpayers consent and is asked to check their records for possible criminal tax cases.


    Procedures for the use of CI resources should be determined and coordinated on a local office basis for requests received as outlined in IRM

    1. If no record exists, notification of this fact is returned to the Tax Check Unit. Such a notification will be initialed by the researching technician or his/her manager.


      For Presidential appointee requests, the reports should be provided to the Tax Check Unit within 24 hours. For all other cases, the reports should be furnished within 72 hours.

    2. If adverse information is discovered, the CI Communications and Education Division reviews their case file and prepares a written report for the Tax Check Unit advising what information to report regarding the investigation.


      IRC §6103(c) provides that the Secretary shall not disclose taxpayer return and/or return information if it is determined that such disclosure would seriously impair Federal Tax Administration. Careful coordination with CI is essential to ensure no impairment of tax administration or unintentional release of information protected by Rule 6(e) regarding grand jury secrecy. See IRM 11.3.27, Disclosure of Returns and Return Information to Grand Juries.

  4. If the data secured in IRM, shows no record of filing for any or all of the years covered and additional research indicates a filing requirement, White House, Executive Office of the President (EOP) and Department of Justice (DOJ)(JD3) requests only will be forwarded to the Director, Compliance Policy (HQ) for immediate assignment to a field Compliance employee. These DOJ (JD3) requests are normally political appointments and handled differently than other requests from DOJ. The DOJ (JD3), White House, and EOP requests require contact with the taxpayer within 48 hours of receipt. The tax check case will remain open until the return is secured or all efforts to secure the return have been exhausted. In the meantime, an interim response is sent to the White House, Executive Office of the President or DOJ to advise that we are attempting to contact the taxpayer to determine if a return(s) was filed or to secure the non-filed return(s). If this is a non-White House request, a referral will be made to Collection, Payment Compliance for any actions it deems appropriate. This will close the Tax Check Unit's case.

  5. If the taxpayer indicates that the return was filed, the Compliance employee must secure proof of filing such as a canceled check matching the balance due per the taxpayer's retained copy of the return. In the event that the original canceled check cannot be located, a copy must be secured. If such proof is not obtainable, as in the case of a refund return, a copy of the tax return must be secured by the Compliance employee for transmission as a "possible duplicate return" to the appropriate Campus based on the taxpayer's address.


    In failure to file cases, returns should not be solicited without consideration for Criminal Investigation implications.

  6. If the Compliance employee finds that the return has not been filed, he/she should ascertain whether a return was required to be filed. If a return should have been filed, the Compliance employee must secure the return.


    No summons should be issued without first contacting the Tax Check Unit Supervisor.

  7. If the taxpayer is uncooperative (e.g., fails to respond to calls, fails to meet appointments, and fails to provide documents), that fact along with pertinent details are reported to the Tax Check Unit Supervisor. The Tax Check Unit will make contact with the requesting agency to help secure additional taxpayer cooperation. The Tax Check Unit will notify the Compliance employee of any additional information obtained from the requesting agency concerning further attempts to contact the taxpayer.

  8. Taxpayers are to be advised not to mail delinquent returns to the campuses for processing. Such actions delay verification of filing. Returns are not to be sent to the Tax Check Unit as this action will also delay processing of the original or "possible duplicate return" by the Campus. See (6) above.

  9. The results of the taxpayer contact will be reported to the Tax Check Unit by secure e-mail and, if necessary, supporting documents will be mailed in double sealed envelopes to:

         Tax Check Unit
         5000 Ellin Road
         ATTN: Leslie Haywood C2-418
         Lanham, MD 20706

  10. In cases where information received from MCC concerning the failure to pay tax, penalty, and/or interest needs clarification, the Tax Check Unit will conduct additional research via IDRS.

  11. All mail responses should be sent in double sealed envelopes to the Tax Check Unit at the address listed in (9) above.

  12. The Tax Check Unit will prepare a Tax Check Report after the receipt and analysis of all relevant return and return information.

  13. The Tax Check Report will consist of a response for each item listed on the waiver. (See IRM Exhibit 11.3.31-2)

  14. Tax Check Reports are either mailed or faxed to the requester based on procedures established with each requester. The agency may also pick up the response.

Exhibit 11.3.31-1 
Example of Tax Check Unit Waiver

By providing the information herein and by signing this waiver, I voluntarily authorize the Internal Revenue Service to release the return(s) and return information indicated below. The return(s) and return information will be used concerning my appointment or employment by the United States Government. This waiver is made pursuant to 26 U.S.C. 6103(c), which permits the release of return(s) and return information, which would otherwise be confidential, to my designee.
I designate that the Internal Revenue Service release return(s) and return information to:
          (Name of Agency) and his/her authorized representatives              
The information I am consenting to release is:
1. Have I failed to file a Federal income tax return for any of the last three years for which filing of a return might have been required? (If the filing date for the most recent required return has not yet lapsed on the date the IRS receives this waiver and IRS records do not indicate a return filing for the most recent required return, the "last three years" will mean the three years preceding the year for which returns are currently being filed and processed.)

2. Were any of the returns in #1 filed more than 45 days after the due date for filing (determined with regard to any extension(s) of time for filing)?

3. Have I failed to pay any tax, penalty or interest liability during the current or last three calendar years within 45 days of the date of which the IRS gave notice of the amount due and request for payment?

4. Am I now or have I ever been under investigation by the IRS for possible criminal offenses?

5. Has any civil penalty for fraud been assessed against me during the current or last three calendar years?
Page 1 of 2
                                                          WAIVER -Cont.
If the information, which is to be released, includes a "Yes" answer to any of the above five questions, I authorize the Internal Revenue Service to release any information pertaining to that question.
MY NAME:    
MY SSN:    
HOME: (       )  
WORK: (       )  
Date Signed
(Note: Waiver invalid unless dated
by the taxpayer and received by
the IRS within 120 days of this date.)
Signature of taxpayer authorizing the disclosure of return information.

                                                            Page 2 of 2

Exhibit 11.3.31-2 
Example of Headquarters Tax Check Report


(Agency Head Name)
(Agency Name)
(Street Address)
(Room Number)
(City, State ZIP)

Dear (Addressees Name):

This is our response to your request for an Internal Revenue Service tax check report for:

     (TP Name)

The taxpayer filed Federal income tax returns for (specified years covered by waiver) within (specified days covered by waiver) days of the due date for filing.

The taxpayer paid all tax, penalty, or interest due within (specified days covered by waiver) days after notice and demand for payment during the current or last three calendar years.

The Internal Revenue Service has not investigated the taxpayer for possible criminal offenses.

The taxpayer has not been assessed a civil penalty for fraud under Internal Revenue law for the years covered by the waiver.

Information in this report is disclosed under the authority of 26 CFR 301.6103(c)-1.

This completes our report. If you have questions, please contact (contact's name) at (contact's telephone number).

(Manager's Name)
Manager, Tax Check Unit
Office of Governmental Liaison and Disclosure

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