4.7.5  Group and Territory

Manual Transmittal

September 18, 2013

Purpose

(1) This transmits a revised IRM 4.7.5, Examination Returns Control System (ERCS), Group and Territory.

Material Changes

(1) IRM 4.7.9, Examination Returns Control System (ERCS) Chief, was made obsolete and the contents were incorporated into this IRM.

(2) The title of this IRM has been changed to Group and Territory.

(3) Editorial changes have been made throughout this IRM. Also, website addresses and IRM references were reviewed and updated as necessary.

(4) This IRM has been revised throughout to provide clarifications and more in-depth discussions in several areas. Except for the changes and deletions in the original text reflected in the table below, this has been a total re-write:

IRM Description
IRM 4.7.5.1 (1) Reworded and added Territory Managers.
IRM 4.7.5.1. (2) Moved to IRM 4.7.5.1.(4) and reworded.
IRM 4.7.5.1 (5) Deleted. No longer needed. The terms area and industry are now spelled out. Replaced by a new section.
IRM 4.7.5.1.1 Moved to IRM 4.7.5.4 and reworded.
IRM 4.7.5.1.2 Deleted and added a reference to positions codes in IRM 4.7.1 and Document 6036 in IRM 4.7.5.5 (4).
IRM 4.7.5.2 Moved to IRM 4.7.5.3 (3) and IRM 4.7.5.3 (7).
IRM 4.7.5.2.1 Moved to IRM 4.7.5.4 (5).
IRM 4.7.5.2.2 (1) Moved to IRM 4.7.5.4 (6).
IRM 4.7.5.2.2 (2) Moved to IRM 4.7.5.6 (2).
IRM 4.7.5.2.3 Moved to IRM 4.7.5.9 and reworded.
IRM 4.7.5.2.4 Moved to IRM 4.7.5.9 (7) and revised.
IRM 4.7.5.3 Moved to IRM 4.7.5.9 and reworded.
IRM 4.7.5.3.1 (1) Moved to IRM 4.7.5.9.3 and reworded.
IRM 4.7.5.3.1 (2) Moved to IRM 4.7.5.9.3 (8) and reworded.
IRM 4.7.5.3.2 Moved to IRM 4.7.5.9.3 (2) and reworded.
IRM 4.7.5.3.2.1 (1) Moved to IRM 4.7.5.6.1.1 (1) and reworded.
IRM 4.7.5.3.2.1 (2) Moved to IRM 4.7.5.2 (4) and reworded.
IRM 4.7.5.3.2.1 (3) Moved to IRM 4.7.5.7 (7) and reworded.
IRM 4.7.5.3.2.1 (4), (5), & (6) Deleted. We do not want managers to disapprove requisitions and then have them requested again. Replaced with IRM 4.7.5.9.3 (3). Managers should skip the approval, have the information corrected, and then approve the requisition.
IRM 4.7.5.3.2.1 (4) Part a moved to IRM 4.7.5.9.3 (4) and part b removed.
IRM 4.7.5.3.2.1 (7) Moved to IRM 4.7.5.9 (2) and reworded.
IRM 4.7.5.3.3 Deleted. The menu options for ERCS are discussed in the ERCS User Handbooks.
IRM 4.7.5.3.4 (1) Moved to IRM 4.7.5.9.4 and reworded.
IRM 4.7.5.4 Deleted. Replaced with IRM 4.7.5.4.1 (1). It is recommended that managers log into ERCS every two days to check for work needing approval.
IRM 4.7.5.5 Removed. The forms required are discussed in IRM 4.7.5.6. Some forms still require written approval and all forms for changes to ERCS records should be reviewed by the manager prior to input into ERCS.
IRM 4.7.5.6 Moved to IRM 4.7.5.3 (2). IRM 4.7.5.2 (5) added to refer the reader to IRM 4.7.2 for security related issues including granting temporary permissions.
IRM 4.7.5.6.1 Moved in part to IRM 4.7.5.4.2.1 (3) and in part to IRM 4.7.5.9.3 (9).
IRM 4.7.5.6.1 Moved to IRM 4.7.5.9.3 (9).
IRM 4.7.5.6.2 Deleted. Acting managers are not limited; permissions are limited. Explained in IRM 4.7.5.3 (2) & (8).
IRM 4.7.5.6.3 Moved to IRM 4.7.5.3 (2) & (8).
IRM 4.7.5.6,4 Moved to IRM 4.7.5.4.2.1 (2).
IRM 4.7.5.6.5 Moved to IRM 4.7.5.4.2.1 and IRM 4.7.5.4.2.3.
IRM 4.7.5.7 Moved to IRM 4.7.5.6 and IRM 4.7.5.7, rewritten, and expanded.
IRM 4.7.5.7.1 Moved to IRM 4.7.5.4.4 and rewritten.
IRM 4.7.5.7.2 Moved to IRM 4.7.5.4.3 and rewritten.
IRM 4.7.5.7.3 Moved to IRM 4.7.5.4.2 and rewritten.
IRM 4.7.5.3.1 Moved to IRM 4.7.5.2 and rewritten.
RM 4.7.5.3.3 Moved to IRM 4.7.5.4.2.3 and rewritten.
RM 4.7.5.3.3 Moved to IRM 4.7.5.4.2.2 and rewritten.

(5) Exhibit 4.7.5-1 and Exhibit 4.7.5-2 were added.

Effect on Other Documents

IRM 4.7.5 dated October 1, 2003 is superseded. IRM 4.7.9 dated October 1, 2003 was incorporated into this document.

Audience

Small Business/Self Employed (SB/SE), Large Business and International (LB&I), and National Headquarters (HQ) employees in the Return Preparer Office (RPO) who use ERCS.

Effective Date

(09-18-2013)

Samuel Perdue
Director, Business Re-Engineering
Small Business/Self-Employed

4.7.5.1  (09-18-2013)
Overview

  1. This IRM section contains ERCS information and procedures for the following employees:

    • Group Managers

    • Team Managers

    • Territory Managers (TM)s

    • Area Directors

    • Directors of Field Operations (DFO)s

    • Industry Directors

    • Employees reporting to a manager listed above including revenue agents, tax compliance officers, tax examiners, audit accounting aides, clerical personnel, etc.

  2. For the purposes of this section "user" refers to an employee with ERCS access. For example, a "Group user" refers to the Group or Team Manager and any personnel reporting to the Group or Team Manager with ERCS access, such as an acting manager or clerical personnel.

  3. The instructions for ERCS users at the territory level and above for navigating the ERCS programs can be found in the ERCS Territory Handbook.

  4. The instructions for users at the group level for navigating the ERCS programs can be found in the ERCS Group Handbook.

  5. Each ERCS user should follow local procedures when contacting the AIMS/ERCS Personnel for questions or issues concerning ERCS or the Audit Information Management System (AIMS) that cannot be answered within the group. The AIMS/ERCS staff are system experts that should be able to resolve most ERCS issues. They also can elevate issues, if necessary, to the HQ ERCS analyst or to the ERCS development staff.

4.7.5.2  (09-18-2013)
Security

  1. In order to access ERCS a user must have an active login and password which is granted via the Online 5081, Automated Information System (AIS) User Registration / Change Request. Users are required to follow the login and password requirements on the Online 5081 system. ERCS passwords should never be shared.

  2. For security issues concerning Record of Tax Enforcement Results (ROTER) information, see the Section 1204 website. IRM 1.5, Managing Statistics in a Balanced Measurement System Handbook, provides further guidelines for the appropriate use of statistics by managers and employees.

  3. Users must be aware of the potential for Unauthorized Access of Taxpayer Accounts (UNAX) violations from the use of ERCS. Data from ERCS should be accessed only for IRS business purposes. Users should promptly retrieve ERCS reports from printers or fax machines in order to prevent unauthorized disclosure. For more information about UNAX, see IRM 10.5, Privacy Information Protection and Data Security (PIPDS).

  4. Audit trails are created when records are researched, added, updated, or deleted. Research should be limited to a user's official business needs in order to prevent unnecessary disclosure. Audit trails are also created for potential UNAX violations. These audit trails include when a user:

    • Inputs his or her own social security number (SSN).

    • Inputs the SSN of a spouse.

    • Attempts to view an IRS employee's return without permission for the return.

    • Attempts to update a return without permission for the return.

  5. For security issues concerning ERCS, including pre-requisites for ERCS access, information on completing the Online 5081, password requirements and resets, requesting temporary permission, and employee audit security features see IRM 4.7.2, Examination Returns Control System (ERCS) Security.

4.7.5.2.1  (09-18-2013)
Requesting ERCS Access

  1. ERCS has multiple sub-applications on the Online 5081 system. Users should make sure the correct sub-application is selected to avoid delays in gaining ERCS access.

  2. When the Online 5081 is routed to the employee's manager for approval, the manager should verify the employee selected the appropriate ERCS sub-application before approving the request.

  3. ERCS permissions are granted based on the information input in the Special Instructions box on the Online 5081. Refer to IRM 4.7.2, Examination Returns Control System (ERCS) Security, for more information about the Online 5081 process and user permissions.

4.7.5.3  (09-18-2013)
Permissions

  1. ERCS uses a combination of permission records and programming to restrict a user's access to taxpayer and employee data. Permission records are granted by the AIMS assignee code (AAC) needed by the user in order to perform his or her official duties. Users assisting another group or territory may be given permissions for other AACs or territory codes. ERCS programming also restricts access to returns based on the status code on the record.

    Note:

    The AAC is a 12 - digit number consisting of the primary business code (PBC), the secondary business code (SBC), and the employee group code (EGC).

  2. Permissions are granted by the AIMS/ERCS staff. Temporary permissions may be granted by the TM, the Group Manager, or the Team Manager to an ERCS user. The manager must have the same permission in order to grant it to another user or to another manager. See IRM 4.7.5.9.4, Delegating Permissions, for more information.

    Note:

    For example: If a Group Manager only has read and approval permission, he or she may only delegate read and approval permission. Temporary permission may be granted up to 90 days, but should be limited to the length of time the user needs the permission.

  3. There are three types of user permissions: read, write and managerial approval.

  4. All users are given read permission. Users with read permissions can:

    • Generate reports for their authorized AAC.

    • Research and display records.

  5. Generally only clerical staff are given write permissions. Users with write permissions can perform the following tasks within their authorized AAC:

    • Add or update employee information.

    • Add, update, transfer, or close inventory records.

    • Input examination technical time (ERCS time) for employees.

    • Generate a Form 895, Notice of Statute Expiration.

    • Generate a Form 3210, Document Transmittal.

      Note:

      A Group or Team Manager may be given write permission if his or her TM is in agreement.

  6. Users with managerial permanent approval permissions can:

    • Approve updates in their authorized AAC.

    • Delegate temporary approval authority to other users.

  7. Managerial approval permissions can be given at two levels:

    • Second level - available to TMs to approve work performed by managers and acting managers.

    • First level - available to front line managers and acting managers to approve work performed in their group. A restricted first level approval may be given to an acting manager or a manager on an emergency basis in order to approve a particular update.

  8. Permission records should be deleted as soon as the need for them has expired. An employee should notify the manager if he or she has permissions that are no longer needed for business purposes.

  9. If an employee is suspended from active duty the employee's permissions should be deleted. The manager should either do a delete Online 5081 to delete the user's ERCS access or a modify Online 5081 to delete the user's ERCS permissions. The manager should determine which action to take based on the length of suspension.

4.7.5.4  (09-18-2013)
User Capabilities

  1. ERCS determines what menu options a user sees and what capabilities a user has on the system by the "user type" a user is assigned to and the permissions a user is given. For example: Area/Industry or DFO users do not have the capability to update returns or to approve updates, so they do not see menu options related to those tasks. A Group user does not have the authority to generate reports at the territory level, so Group users do not see the menu option for "Territory Reports" . All user types are listed in IRM 4.7.1, ERCS Overview, Examination Returns Control System (ERCS).

  2. This section covers four user types: Area/Industry, DFO, Territory and Group. The user type is displayed in the upper, right hand corner of the header on the ERCS menu screens.

  3. ERCS allows groups to maintain the accuracy of the inventory through reports and updates made to the ERCS system.

  4. All users can generate reports and research return information.

  5. All users can view employee information for employees in their designated AAC.

  6. Group and Territory users with write permission can:

    • input time for employees

    • add or update employee records

    • add or update returns in their designated AAC

  7. TMs can approve updates made by the managers in their territory. Managers can approve updates made by users in their group.

4.7.5.4.1  (09-18-2013)
Role and Responsibilities of Territory Managers

  1. Responsibilities of TMs include, but are not limited to:

    • Ensuring the territory accomplishes the Exam Plan.

    • Ensuring the accuracy of the ERCS and AIMS database by confirming group requirements are completed timely and accurately.

    • Assisting with issues elevated by the Group or Team Manager and/or the AIMS/ERCS staff.

    • Ensuring statute control is maintained on all returns in the territory.

    • Ensuring time information is entered in ERCS accurately and no later than the close of business on the last day of each reporting cycle for employees within the territory required to input technical time.

    • Ensuring all updates made by managers requiring second level approval are processed timely. (Generally, timely is within two days of notification. Notification can be by an ERCS message when signing on, by the manager, or by the AIMS/ERCS staff.)

    • Ensuring employees in the territory requiring ERCS access have the appropriate level of permissions.

      Note:

      The TM may request that the AIMS/ERCS staff generate a permission report for the territory.

4.7.5.4.2  (09-18-2013)
Role and Responsibilities of the Group or Team Manager

  1. The Group or Team Manager has overall responsibility for group operations which include ensuring appropriate internal controls are established and maintained; and the goals, policies, and directives of the HQ Office as well as the area or industry are followed.

  2. To be familiar with the options and tools that ERCS provides so it can be fully utilized to assist managers in fulfilling their responsibilities.

  3. For general responsibilities of the Group or Team Manager, refer to IRM 1.4, Resource Guide for Managers.

  4. The following sub-sections discuss the Group and Team Manager's responsibilities in regard to:

    • Ensuring security of the ERCS system.

    • Ensuring integrity of the ERCS data.

    • Providing ERCS training for employees.

4.7.5.4.2.1  (09-18-2013)
Ensuring Security of the ERCS System

  1. Management is responsible for ensuring:

    • All employees in the group have completed the required annual security briefings.

    • All ERCS users in the group are aware of ERCS security issues such as password protection, browsing, protecting personal identifiable information (PII), etc.

    • All employees in the group are instructed to promptly retrieve ERCS reports from printers and documents from fax machines in order to prevent unauthorized disclosure.

    • Employees in the group are aware of and adhere to the document protection policies in IRM 10.2.13, Physical Security Program, Information Protection.

    • Acting managers have been briefed in the Online 5081 approval process and security rules.

  2. Managers should ensure that technical employees with inventory are not routinely given write permission during an acting assignment and must not be given permanent write permissions. Write permission compromises separation of duty. Managers may use the Online 5081 to monitor permissions granted to users in their groups. Permanent changes to ERCS permissions should only be granted via a Modify Online 5081 which is routed to the manager for approval.

  3. IRM 4.7.2, Examination Returns Control System (ERCS) Security, should be referenced when determining:

    • If an employee can be granted ERCS access.

    • How employees request ERCS access.

    • How permanent and temporary permission requests are handled.

    • What actions to take when an employee is suspended or the need for ERCS access has ended.

4.7.5.4.2.2  (09-18-2013)
Ensuring the Integrity of the ERCS Data

  1. Management should ensure the integrity of the ERCS data is maintained. This includes ensuring employees in the group perform the tasks included in the Role and Responsibility sections of this IRM in a timely manner.

  2. Managers should be familiar with ERCS menus and reports. This can be accomplished by:

    • Running the programs and reports.

    • Working with the AIMS/ERCS staff.

    • Reviewing locally developed job aids.

    • Reviewing the ERCS Group Handbook.

    • Keeping informed of ERCS changes and releases.

  3. The responsibilities of the Group or Team Manager include, but are not limited to:

    1. Reviewing ERCS employee information periodically to ensure it is current.

    2. Ensuring employee records are added and updated timely so accurate information is rolled up at the end of the reporting cycle.

    3. Ensuring the accuracy of the information on the forms used to request or update returns on AIMS and ERCS prior to input.

    4. Ensuring updates requiring managerial approval are timely processed.

    5. Ensuring return requisitions are approved or disapproved prior to time being applied. (This will prevent time having to be moved to below-the-line if the requisition is later disapproved.)

    6. Notifying the TM when updates need second level approval.

    7. Ensuring updates and corrections to returns have been made on ERCS prior to time being applied.

    8. Ensuring technical time is entered accurately and timely.

    9. Utilizing ERCS reports to monitor activity in the group, to monitor priority and overage cases, and to ensure the accuracy of the data.

    10. Ensuring ERCS to AIMS rejects, AIMS Error Reports, and other data issues are worked and resolved.

    11. Ensuring continuous statute controls are maintained in the group and ERCS statute listings are reconciled with AIMS Table 4.1 per IRM 25.6.23, Examination Process - Assessment Statute of Limitations Controls.

    12. Ensuring Forms 895, Notice of Statute Expiration, are generated and returned timely and maintained per IRM 4.7.3, Examination Returns Control System (ERCS), Statute of Limitations.

    13. Ensuring ERCS 100% inventory listings are reconciled to the AIMS 100% Inventory Validation Listing (IVL) and the physical returns per IRM 4.4.16, AIMS Procedures and Processing Instructions - Inventory Control.

    14. Ensuring cases are reviewed and time reconciled prior to group closure.

    15. Monitoring the In-Transit report to ensure returns are timely received at their destination.

4.7.5.4.2.3  (09-18-2013)
Providing ERCS Training for Employees

  1. Generally new users, including new managers, receive initial training from the AIMS/ERCS staff. The training for clerical users may also be supplemented with on-the-job instructor training from an experienced ERCS user.

  2. The manager should ensure employees in the group are:

    • Aware of their ERCS roles and responsibilities.

    • Apprised of changes to the ERCS system including enhancements, bug fixes, etc.

    • Aware of resource material including ERCS IRMs, the AIMS/ERCS Website, ERCS user handbooks, and locally developed job aids.

    • Provided with meaningful feedback on ERCS responsibilities and performance as part of the employee's workload review and annual performance appraisal process.

4.7.5.4.3  (09-18-2013)
Role and Responsibilities of the Clerical Staff

  1. The clerical staff is an integral part of the ERCS support team. Their assistance is essential to ensure the smooth operation of the group. The clerical staff often serves as the liaison between the employees in the group and the AIMS/ERCS staff. They are the last person to verify data prior to input into ERCS. By making sure updates are input accurately and timely, they ensure the validity of the data.

  2. The clerical staff should be familiar with and have access to the ERCS Handbooks, ERCS and AIMS related IRMs, the AIMS/ERCS website, locally developed job aids, etc.

  3. Responsibilities of the clerical staff include but are not limited to:

    • Ensuring security of the system.

    • Inputting changes into ERCS.

    • Generating and distributing reports.

    • Maintaining the accuracy of the ERCS database.

    • Providing assistance to the manager.

    • Inputting technical time for employees in the group.

  4. If the employee uses the Issue Management System (IMS) to input time, the clerical personnel is also responsible for verifying time imported into ERCS from IMS.

  5. Users should adhere to the ERCS security requirements as outlined in IRM 4.7.5.2, Security, contained in this IRM, and in IRM 4.7.2, Examination Returns Control System (ERCS) Security.

  6. Information from the ERCS employee records and returns is used for a variety of applications including national roll-ups, local reports, and imports into other systems for use by Treasury Inspector General for Tax Administration (TIGTA), IMS, etc. Clerical users should update ERCS as soon as changes are known to ensure the data extracted for reports and roll-ups to other systems is current.

  7. The clerical staff in the group is responsible for generating Forms 895, Notice of Statute Expiration, alerting management if the forms are not returned timely, inputting the return date into ERCS within the specified time frame, and maintaining the Form 895 Log Book. See IRM 4.7.3, Examination Returns Control System (ERCS), Statute of Limitations for more specific information on statute control.

  8. Users should make sure any changes to the employee record and the employee's work schedule profile (WSP) are made before time is applied for the pay period.

  9. It is recommended that time be input on a daily basis for tax compliance groups to avoid overage purge dates. The prior day's time should be input before printing the current Tax Auditor Daily for the employees in the group. It is recommended that time be input on a weekly basis for field groups to ensure time is completed by the end of the cycle. See IRM 4.7.5.7 (3) for the deadline for time input.

  10. If any information on the time input document is questionable, illegible, invalid, etc. the user should contact the agent or the manager, if the agent is not available, for clarification.

  11. Clerical users are responsible for printing and distributing reports based on IRM recommendations, local procedures, and as requested by management.

  12. It is essential to maintain the accuracy of the ERCS database to ensure the data extracted is reliable. ERCS provides reports designed to assist in identifying possible issues. These reports must be worked in the group to resolve data issues. They may be used by upper management to ensure issues are being timely resolved in the group. The reports include but may not be limited to the following:

    • Check AIMS Results - used to identify updates, requisitions, or closures that rejected on AIMS.

    • AIMS Error Reports - used to identify discrepancies between AIMS and ERCS.

    • Overage Requisition Report - used to identify AIMS requisitions that were not successfully established on AIMS.

    • Related Return Report (RRR) - used to identify potential errors within the group's inventory.

      Note:

      The RRR is not generated on ERCS, but it contains ERCS data. It is generated by the AIMS/ERCS staff and distributed to the groups within the area.

  13. The duties of the clerical staff in the group, in addition to providing support for the group, also include providing assistance to the group manager. These tasks include, but may not be limited to the following:

    • Notifying the manager if there are pending updates that need immediate approval.

    • Notifying the manager or the AIMS/ERCS staff when their assistance is needed in order to resolve ERCS or AIMS issues.

    • Assisting the manager to ensure statute controls are maintained in the group and ERCS statute listings are reconciled with AIMS Table 4.1 per IRM 25.6.23, Examination Process - Assessment Statute of Limitations Controls.

    • Assisting the manager in reviewing the RRR, 100% IVL and other reports.

    • Assisting the manager in reconciling the AIMS IVL with ERCS, following local procedures.

    • Returning forms, screen prints, update documents, etc. to the technical employee for association with the case file.

    • Assisting new clerical staff with on-the-job training.

4.7.5.4.4  (09-18-2013)
Role and Responsibilities of the Technical Employee

  1. Technical employees include revenue agents, tax compliance officers, tax examiners, etc., required to input technical time and who may be assigned an inventory of cases or may assist in the examination of cases assigned to another technical employee. Technical employees in the group initiate many actions that affect the ERCS database.

  2. Responsibilities of technical employees include, but are not limited to:

    • Completing all forms for input into ERCS accurately and submitting them timely to the manager for review and approval, if required.

    • Reviewing ERCS inventory and statute reports, following local procedures, to assure the data is accurate and all records are properly controlled. In particular, before applying time to a new case on ERCS or IMS, the statute, source code, project code, tracking code, claim amount, and aging reason code should be verified.

    • Submitting time reports on a regular basis in order to meet local and national time input deadlines.

    • Submitting time reports whenever a case is closing from the group in order that all time applied to the case may be input on ERCS before the ERCS record is closed.

    • The IMS team coordinator should make sure all time is in IMS and the coordinating agents have synchronized their time with the server prior to closing the case.

  3. Technical employees may request available management reports for cases in their inventory as a tool for workload management.

  4. Technical employees may also serve as an acting manager. These employees should be familiar with the Security, Permissions, Role and Responsibilities of the Group Manager, and Managerial Approval sections of this IRM. The acting manager should brief his or her manager concerning any actions made to ERCS during the acting assignment.

4.7.5.5  (09-18-2013)
Employee Records

  1. Employee records are usually added by the secretary in the group. The user should enter all information accurately and completely when adding or updating employee records. Values from the ERCS employee records are used for time reporting, inventory assignment, determining staffing needs, determining if managerial approval is required for updates, protecting an employee's tax return from unauthorized access, and in the creation of audit trails. It is essential to update the employee record as soon as changes are known. In particular the following values must be keep current:

    • Employee name

    • AAC

    • Post of duty

    • Position code

    • Grade

    • Login name

    • WSP

  2. Employees are added to ERCS in a primary business code (PBC), a secondary business code (SBC), and an employee group code (EGC). These three codes make up the AAC of the employee's permanent group assignment on ERCS.

  3. The post of duty (POD) should be the POD where the employee is located. See the ZIP/POD Access Database for the POD associated with each zip code to find the employee's correct POD.

  4. The position code is used for a number of checks including:

    • Determining if the employee is required to charge time on ERCS.

    • Validating the employee's time charges.

    • Determining if an employee is a manager and can perform certain changes to returns without requiring managerial approval.

    • Determining if the employee's tax return can be audited in the area.

    • Determining the recipient of system e-mail created when an IRS employee's tax return is accessed.

    Note:

    Refer to Document 6036, Examination Division Reporting System Codes Booklet, for a list of position codes. See IRM 4.7.1 , Examinations Returns Control System (ERCS), Overview, for a list of position codes valid for each ERCS user type. For more information about how position codes are used for employee audit security see the Security chapter of the ERCS Technical Reference Manual.

  5. ERCS users must have a login name on their employee record. The login name is used to verify a user has permission to access ERCS and in the creation of the audit trails. Employees who act for their managers are given temporary ERCS access and assigned a login and password. The login name should not be removed from the ERCS employee record when the acting assignment is complete, since audit trails may have been created during the employee's acting assignment.

  6. The WSP contains the employee's tour of duty information and the number of hours the employee is scheduled to work each day. This information is used when time is input for the employee on ERCS. Each technical employee, his or her manager, and the Territory Managers in LB&I must account for the number of hours they are scheduled to work each day. The WSP is also used to determine when an employee is required to charge holiday time on ERCS. When entering the WSP profile the user must enter the tour of duty (TOD). The following are the six choices for the TOD:

    • Regular - employee works 5 eight-hour days per week with no option for working credit hours.

    • Flexi Hrs - (flexi hours) employee works 5 eight-hour days per week with an option for working credit hours.

    • 5-4-9 - (five four nine) employee works 8 nine-hour days, 1 eight-hour day, and 1 day off per pay period with no option for working credit hours.

    • 4-10 - (four ten) employee works 4 ten-hour days and 1 day off per week with no option for working credit hours.

    • Part-Time - employee works less than 80 hours per pay period.

    • Maxiflex - employee works a pre-determined number of hours each day, but the number of hours can vary from day to day during the pay period. The employee may work credit hours.

  7. The WSP records are in two-week cycles that correspond with Single Entry Time Reporting (SETR) cycles. The employee's scheduled work days and the number of hours the employee is scheduled to work each day in the WSP should match employee's information on the SETR system.

    Note:

    ERCS currently does not allow partial hours on a WSP record. If this situation occurs, employees should contact their AIMS/ERCS staff for guidance.

  8. Since the WSP is used in validating time, changes to the WSP must be made at the beginning of the two-week cycle (pay period) before time has been applied on ERCS.

  9. ERCS employee records should be inactivated when the employee leaves the Service or transfers within the Service to a non-ERCS position. If an employee inputs time on ERCS, the inactivation date should be entered as the last day the employee is required to charge time on ERCS. The login name should not be removed from the ERCS employee record when an employee record is inactivated.

  10. Problems correcting an ERCS employee record should be reported to the user's AIMS/ERCS staff.

  11. Additional information on adding an employee record to ERCS can be found in the Employee Records chapter of the ERCS Territory Handbook for Area/Industry, DFO, and Territory users and the Employee Records chapter of the ERCS Group Handbook for Group users.

  12. An employee's permission records on ERCS are removed when the employee record is inactivated.

4.7.5.5.1  (09-18-2013)
Employee Transfers, Details, and Acting Assignments

  1. For the purposes of this IRM the following terms are defined:

    • Transfer - when an employee is permanently re-assigned to another group or function and is not expected to return. This may also include details from one to five years in length when the employee's old position is filled behind him or her.

    • Detail - when an employee is temporarily re-assigned to another group or function and is expected to return to the original group.

    • Acting Assignment - when an employee retains his or her work assignments, inventory, etc. while temporarily acting as manager of his or her own group.

  2. Transferred employees who are required to input technical time should apply time to the activities performed in the new group starting on the first day they report to the new group. Use the chart below and the corresponding numbers and letters following the chart to determine how to update the ERCS employee record and inventory when an employee transfers to another group or function:

    From To New AAC, Examiner Field To New AAC, Examiner Office To New AAC, Clerical To New AAC, Manager To TS To PSP or CCP To IRS Position Outside of ERCS
    Examiner - Field a, 1 a, 2 a, 3 a*, 3 a, 4 a, 3 c, 3
    Examiner - Office a, 1 a, 1 a, 3 a*, 3 a, 4 a, 3 c, 3
    Clerical b b b b b b c
    Manager a a a a* a a c

    Changes to Employee Record:

    1. The ERCS user in the employee's old group should update the ERCS employee record to the employee's new AAC, position code, grade, etc. The start date for the new group should be the next day after the last day time will be applied in the old group. For example: If the last day time will be applied in the old group is Thursday and Friday is the employee's day off, the start day in the new group should be Friday.

      Note:

      *If the employee's new position does not require time to be charged (Example: a transfer to an SB/SE TM position), contact the AIMS/ERCS staff to set the IGNORE_SETTS flag on.

    2. The ERCS user in the employee's old group should update the ERCS employee record to the employee's new AAC, position code, grade, etc. The start date for the new group should be the first day the employee reports to the new group.

    3. The ERCS user in the employee's old group should deactivate the ERCS employee record. The effective date should be next day after the last day time will be applied in the old group.

    Changes to Inventory:

    1. No new inventory should be assigned to the employee in the old group. The employee's inventory in the old group should either be re-assigned or, if both old and new managers are in agreement, the employee may continue to work on the inventory in the old group until it is closed. Inventory reports in the old group need to be pulled by group and not by the employee's ERCS identification (ID) number.

    2. No new inventory should be assigned to the employee in the old group. The employee's inventory in the old group must be re-assigned if it can only be worked by a field examiner. For other assigned inventory, if both old and new managers are in agreement, the employee may continue to work on the inventory in the old group until it is closed. Inventory reports in the old group need to be pulled by AAC and not by the employee's ERCS ID number.

    3. All existing inventory in the old group must be re-assigned. The employee should not continue working on the old inventory.

    4. All existing inventory in the old group must be re-assigned. If both old and new managers are in agreement, the employee may continue to work on the inventory in the old group until it is closed.

  3. Detailed employees who are required to input technical time should apply time to the activities performed in the detailed group starting on the first day they report to the new group. Use the chart below and the corresponding numbers and letters following the chart to determine how to update the ERCS employee record and the employee's inventory when an employee is detailed to another group or function. When the detail is over, the changes should be reversed.

    From To New AAC, Examiner Field To New AAC, Examiner Office To New AAC, Clerical To New AAC, Manager To TS To PSP or CCP To IRS Position Outside of ERCS
    Examiner - Field e, 5 a, 2 a, 3 a*, 3 a, 4 a, 3 d, 6
    Examiner - Office a, 1 e, 5 a, 3 a*, 3 a, 4 a, 3 d, 6
    Clerical b b b b b b c
    Manager a a a a* a a d

    Changes to Employee Record:

    1. The ERCS user in the employee's old group should update the ERCS employee record to the employee's detailed AAC, position code, grade, etc. The start date for the new group should be the next day after the last day time will be applied in the old group. For example: If the last day time will be applied in the old group is Thursday and Friday is the employee's day off, the start day in the new group should be Friday.

      Note:

      *If the employee's new position does not require time to be charged (Example: a detail to an SB/SE TM position), contact the AIMS/ERCS staff to set the IGNORE_SETTS flag on.

    2. The ERCS user in the employee's old group should update the ERCS employee record to the employee's detailed AAC, position code, grade, etc. The start date for the new group should be the first day the employee reports to the new group.

    3. The ERCS user in the employee's old group should deactivate the ERCS employee record. The effective date should be last day the employee is assigned to the old group.

    4. The employee record should remain unchanged.

    5. The employee record should remain unchanged, but an ERCS detail record should be created. The start date for the detail record should be the next day after the last day time will be applied in the old group. The end date for the detail record should be the day prior to the date the employee will charge time in the old group when the detail is over. When the detail is over, there is no need to make additional changes to the detail record since an end date was set when it was created.

    Changes to Inventory:

    1. No new inventory should be assigned to the employee in the old group. The employee's inventory in the old group should either be re-assigned or, if both old and new managers are in agreement, the employee may continue to work on the inventory in the old group until it is closed. Inventory reports in the old group need to be pulled by AAC and not by the employee's ERCS ID.

    2. No new inventory should be assigned to the employee in the original group. The employee's inventory in the original group must be re-assigned if it can only be worked by a field examiner. For other assigned inventory, if both old and detail managers are in agreement, the employee may continue to work on the inventory in the old group until it is closed. Inventory reports in the old group need to be pulled by AAC and not by the employee's ERCS ID.

    3. All existing inventory in the old group must be re-assigned. The employee should not continue working on the old inventory.

    4. All existing inventory in the old group must be re-assigned. If both old and detail managers are in agreement, the employee may continue to work on the inventory in the old group until it is closed. Inventory reports in the old group need to be pulled by AAC and not by the employee's ERCS ID.

    5. New inventory may be assigned to the employee in either group. When the detail is over, if both old and detail managers are in agreement, the employee may continue to work on the inventory in the detailed group until it is closed.

    6. If both old and detail managers are in agreement, the employee may continue to work on the inventory in the old group until it is closed.

  4. If an employee is on a temporary acting assignment:

    • The employee record should remain unchanged.

    • The employee can keep any assigned inventory and be assigned new inventory.

    • The employee should charge time to the activities performed which may include applying time to returns and applying time to management activities.

  5. When a technical employee is detailed to another exam group within SB/SE or LB&I and the employee's position code does not change, an ERCS detail record can be created which allows the employee to temporarily keep inventory in both groups. Inventory and time reports may be pulled for the employee in both the employee's permanent group and the employee's detailed group. During the length of the ERCS detail, the detailed group is responsible for the employee's time input on ERCS.

  6. When an employee required to input technical time is detailed outside of SB/SE, LB&I, or RPO (i.e. detailed to Wage & Investment (W&I), Tax Exempt/Government Entities (TE/GE), etc.), the employee's permanent group is responsible for the employee's time input on ERCS. The employee's time should be applied to the appropriate "details out of division or area" activity codes.

  7. For any other situations concerning employee transfers and details not covered in this section the user should contact the AIMS/ERCS staff for guidance.

4.7.5.6  (09-18-2013)
Inventory Control

  1. One of the primary purposes of ERCS is to provide inventory control for returns under examination. Users may request, update, transfer, and close records on ERCS. As data is entered, it is validated and checked against other codes for consistency. Updates made on ERCS are sent to AIMS daily. Records on ERCS are also compared to AIMS records each week and differences are either resolved or reported for users to resolve.

  2. Inventory is controlled by the AAC, ERCS employee ID and status code on the return. These codes together with the permissions granted to a user determine which returns are included on reports. Most reports are run by AAC or employee ID, and except for a few instances, returns must also be in a group status to be included on reports generated by Group or Territory users.

  3. Returns may be associated with multiple examiners in addition to the primary examiner. When an examiner applies time for the first time to a return owned by another examiner, the return is added to the assisting examiner's inventory. The Multiple Examinations menu option in ERCS can be used to add or remove a return from the assisting examiner's reports. This menu option can also be used to generate reports.

  4. In addition to the codes that can be associated with the return on AIMS and ERCS such as project code, tracking code, aging reason, etc., ERCS also has several ERCS only codes that can aid in monitoring inventory in the group. Refer to Exhibit 4.7.5-1, Action Codes, and Exhibit 4.7.5-2, Suspense Types, for information on action codes and suspense types.

4.7.5.6.1  (09-18-2013)
Requesting ERCS Controls and Incoming Inventory

  1. Returns can be received in the group from the campus, Planning and Special Programs (PSP), or from another group. The group can also request to establish controls. Returns that are already on ERCS may be "claimed" into the group from the campus or from PSP. Claiming a return establishes ERCS control, but additional steps are needed to secure the return or case file and to update AIMS. See IRM 4.7.5.6.1 (15) for more information on claiming returns.

  2. Form 5345-D, Examination Request-ERCS (Examination Returns Control System) Users , is used to establish a record on ERCS. The examiner should give the completed form along with the appropriate printed transcripts (i.e. AMDISA, IMFOLT/R/BMFOLT, INOLE(S/T)) to the manager for review.

    Note:

    Form 5809, Preparer Penalty Case Control Card , is required to be completed by the examiner for preparer penalty cases. It can be used to establish control of the preparer penalty record on ERCS.

  3. When completing Form 5345-D, users should pay special attention to ensure the values used to identify the return on AIMS and ERCS, the statute, and the values used in reporting time charges are correct. These values include the following:

    • TIN

    • MFT

    • Tax Period

    • Statute

    • Activity Code

    • Source Code

    • Tracking Code

    • Project Code

    • Claim Amount

    • Aging Reason

  4. Clerical errors inputting the TIN, MFT, and tax period will cause delays in getting the proper controls on ERCS and AIMS.

  5. On a Masterfile requisition of a filed return, the default statute on the ERCS request screen should not be changed unless the user has verified the statute on Form 5345-D against IMFOLT or BMFOLT to ensure it is correct. When the record is fully established on AIMS (the record has been processed against Masterfile and the Masterfile statute has come down to AIMS), the AIMS statute will be compared to the ERCS statute. The AIMS statute will overwrite the ERCS statute if either of the following are true:

    • ERCS has a default statute (i.e. a statute based on a timely filed return).

    • The return was not timely filed, and the Masterfile statute is earlier than the ERCS statute.

    Note:

    There are instances where the default statute should not be retained such as when an alpha statute is needed. The examiner should consult with the manager if there are questions about using a statute other than the default statute on the requisition of a filed return.

  6. For requisitions of Non-masterfile, Non-filers, and ERCS only records requiring a statute, the default statute on the requisition screen should be corrected if the return was not timely filed or if an alpha statute is needed.

  7. There are a number of reasons why it is critical to get the activity code correct or at least the best guess on an ERCS requisition.

    1. Even though the activity code on Masterfile will overwrite the activity code on ERCS for filed returns when the return is fully established on AIMS, it may take up to two weeks. In the meantime if time is applied to the return, the time charges are recorded using the activity code on ERCS when the time is applied. Even if the activity code is updated later, the time charges will still reflect the original activity code.

    2. The activity code is used to set a default statute which is displayed on the ERCS requisition screen. The default statute is calculated based on a timely filed return using the tax period and the activity code entered. An incorrect activity code could result in an incorrect default statute.

    3. Penalty controls are monitored based on the activity code and MFT on ERCS. These two codes indicate which penalty section is being controlled. An incorrect activity code on a penalty control will slot the record with the wrong penalty sections.

  8. The tracking code should be checked for accuracy prior to input. If input incorrectly, it requires assistance from PSP or the AIMS/ERCS staff to change it.

  9. Some codes on returns such as source, tracking, project, and aging reason codes are not associated with the time charges until the end of the cycle when the time data is extracted from ERCS. So as long as corrections are made to these codes prior to the end of the cycle, the correct data will be sent forward.

  10. The claim amount is used to determine if protection of revenue based codes "P" or "R" are valid for time applied to the return. If the taxpayer has requested a claim for refund and the issues will be worked on the requested return, a claim amount must be entered.

  11. If the return is part of a related case the key case information must be entered on Form 5345-D.

  12. Once the manager's review of Form 5345-D has been completed, the secretary should review the transcripts prior to input into ERCS. A review of the AMDISA ensures the return is not in someone else's inventory. A review of the INOLE(S/T) shows the exact input of the name or name control.

  13. After the requisition is input on ERCS and approved by the manager, it is sent to AIMS. The Check AIMS Results menu option should be used daily to check for rejects. The Overage Requisition Report can also be used to monitor the status of requisitions. It is recommended it be run twice a month.

  14. ERCS has different options for different types of requisitions. If the requisition will be sent to AIMS, users should utilize the Request Return option. If the user needs to add a penalty control, the Control Penalty Investigation option should be used. For other types of non-AIMS controls, the Control Non-AIMS DET Item option should be used. The Control Collateral Examination option should only be used if directed to do so by HQ.

  15. A return already on AIMS and ERCS may be "claimed" into the group's inventory from PSP or the Campus by changing the AAC or by applying time to the return. When claiming a return from the Campus the group should follow local procedures to get control of the return. In order to claim a return on ERCS certain rules apply such as:

    • The return must be in a Status 09 or below.

    • If the return is in transit (Status 07 or Status 09), it must not have any time applied.

    • The return must either be in a Campus AAC or unassigned in a PSP AAC.

    • The PBC on the return must match the group's PBC if the return is on AIMS.

  16. When the group claims ERCS control of a return, no updates are sent to AIMS. It is the group's responsibility to ensure the owner of the return (either the Campus or PSP) transfers AIMS control of the return to the group. The AAC Difference Report should be used to monitor the status of the transfer on AIMS.

  17. Any inventory coming into the group, regardless of the source, should be checked for accuracy on ERCS. Once a requisition is fully established, it should be checked for any changes that may have been overwritten by the values on AIMS.

    Note:

    The weekly AIMS Error Reports should be used to verify changes to ERCS made during weekend AIMS to ERCS processing are correct.

4.7.5.6.2  (09-18-2013)
Updates

  1. When updates or changes to the ERCS record are required, the examiner should complete Form 5348, AIMS/ERCS Update (Examination Update) and give it to the manager for approval. Updates should be made as soon as it is determined there are changes to the return and prior to charging time to the return.

  2. The secretary should review Form 5348 prior to updating ERCS. Any questions or concerns should be brought to the manager's attention.

  3. Changes to returns are usually sent to AIMS by the AIMS/ERCS staff twice a day. Some changes are immediately queued for uploading to AIMS, some require the manager's approval on ERCS before the change is sent to AIMS, and other changes must wait for other actions or events to occur first.

  4. Some updates to records can only be sent to AIMS if the record is fully established on AIMS. The following updates to skeletal records on ERCS are held until the AIMS record is fully established.

    • Claim Amount

    • North American Industry Classification System (NAICS)

    • POD

    • Source Code

    • Statute

  5. If the AAC on AIMS and ERCS are different, updates are held until the differences are resolved and both codes match.

    Reminder:

    The AAC Difference Report should be run weekly to monitor and resolve AAC differences between AIMS and ERCS.

  6. Occasionally an update made on ERCS will reject when sent to AIMS. When users run ERCS, the following message appears on the Main Menu screen if there are uploading issues that need to be resolved: "There are ERCS-AIMS Uploading results to check. Use the ‘Check AIMS Results’ selection to View/Print or Delete results file(s)" . These reports must be worked daily and issues resolved timely. Once all the issues from a report have been resolved, the user should delete the report.

  7. Items to consider when requesting updates:

    • Since no return was filed for substitutes for returns (SFRs), the opening activity code is an estimate of the correct code. If it is determined the activity code on ERCS is incorrect, it must be updated.

    • A tracking code can be input by the group, but not updated. If a change is needed to a tracking code, it can only be updated by PSP or the AIMS/ERCS staff.

    • Suspense types are designed to aid in determining when follow-up action is required on returns that have been placed in suspense. While some suspense codes are required, most are optional. For a list of valid suspense types and definitions, see Exhibit 4.7.5-2.

    • Refer to the Source Code Job Aid and the Source Code Quick Reference Guide when determining the correct source code for returns and related pickups.

    • If an AIMS freeze code needs to be released, added or changed on a case, complete Form 5348 and forward it to the appropriate contact based on local procedures.

4.7.5.6.3  (09-18-2013)
Transfers and Closings

  1. When a return is ready to be closed on ERCS, it is recommended that the examiner's time sheet be completed to date with all the time applied to the return and given to the group secretary. If the time applied to the return is entered into ERCS prior to closure, it will make it easier for the secretary to compare the time on the ERCS closing screen to the hours on the Form 5344, Examination Closing Record, to ensure they match. A Case Time Analysis report may also be run to verify the time. (Users should check to see if running a Case Time Analysis report is a local requirement.) Discrepancies in the time on ERCS and the time on Form 5344 should be reported to the manager.

  2. The manager should review the return for closure while it is still in a group status. Once the manager has approved the closure, the returns should be closed on ERCS.

  3. When reviewing and approving a return to be closed using a non-examined disposal code, the manager should check for time applied to the return to make sure it is not excessive. The amount of time considered to be excessive is to be determined by the local area or industry office.

  4. When reviewing and approving a return to be closed using an examined disposal code, the manager should check for time applied to the return on ERCS to make sure it matches the time on Form 5344.

    Note:

    Time applied to returns by tax examiners and co-ops is not added to the total time charged to the return on ERCS and should not be included on Form 5344.

  5. If the return is not an ERCS penalty, collateral, or a non-AIMS control record, it must be fully established on AIMS prior to closure.

  6. During the closing process, information entered into ERCS should be complete and accurate. Once the return is closed, it may have to be re-opened on ERCS in order to correct missing or incorrect data.

  7. Once the closing status and disposal code are entered, ERCS determines what other data items are required. If dollar amounts (i.e. penalty, adjustments, interest, etc.) are required they should be entered accurately. This information may be monitored and compared with Masterfile data to check for input errors.

  8. The following chart shows the statuses and forms used when closing returns using examined disposal codes:

    Disposal Code Receiving Function Form(s) Description Additional Information
    01 CCP - Status 51 (unless the program requires PSP review) 5344 and 3198 No Change with Adjustment Cannot have a deficiency amount.
    02 CCP - Status 51 (unless the program requires PSP review) 5344 and 3198 No Change Cannot have a deficiency amount.
    03 CCP - Status 51 (unless the program requires PSP review) 5344 and 3198 Agreed (Prior to the issuance of a 30 Day or 60 Day letter) Requires deficiency or penalty information. Not valid for partial assessments.
    04 CCP - Status 51 (unless the program requires PSP review) 5344 and 3198 Agreed (After issuance of 30 Day or 60 Day letter) Requires deficiency or penalty information. Not valid for partial assessments.
    07 TS - Status 21 (unless the program requires otherwise) 5344 and 3198 Appealed (Prior to issuance of a 90 Day letter) Requires deficiency or penalty information.
    08 TS - Status 21 (unless the program requires PSP review) 5344 and 3198 Other (Used when a Statutory Notice is required) Requires deficiency or penalty information.
    12 TS - Status 21 or CCP - Status 51 (or Status 41 - PSP if the case requires PSP review) 5344 and 3198 Other (Not listed) The correct closing status depends on the reason Disposal Code 12 is used. See Document 6209, IRS Processing Codes and Information, for more information. Requires deficiency or penalty information. Not valid for partial assessments.

  9. The following chart shows the statuses and forms used when closing returns with non-examined disposal codes:

    Disposal Code Receiving Function Form Description Additional Information
    28 PSP - Status 41 (or use local procedures) 10904 Non-Masterfile Closings Only valid for NMF records. Cannot be used if a claim amount is present.
    29 PSP - Status 41 (Specialty use local procedures) 10904 Missing Return - For Area Office Used to close Source Code 45 returns when the original return was requested, but not received, and the information needed cannot be found from any other source.
    31 CCP - Status 51 5351 Survey Before Assignment Only use if no contact has been made with taxpayers. Cannot be used if a claim amount is present. Survey Reason Code required on LB&I returns.
    32 CCP - Status 51 5351 and 1900 Survey After Assignment Only use if no contact has been made with taxpayers. Cannot be used if a claim amount is present. Survey Reason Code required on LB&I returns.
    33 PSP - Status 41 (Specialty use local procedures) 10904 Error Accounts with No Returns  
    34 CCP - Status 51 5344 and 3198 Surveyed Claims Use of this disposal code will allow the claim in full.
    36 PSP - Status 41 (Specialty use local procedures) 10904 No Return Filed (Taxpayer not liable) Cannot be used if a claim amount is present.
    37 PSP - Status 41 (Specialty use local procedures) 10904 Taxpayer Previously Filed Cannot be used if a claim amount is present.
    38 PSP - Status 41 (Specialty use local procedures) 10904 No Return Filed (Taxpayer previously filed with spouse on joint return) Cannot be used if a claim amount is present.
    39 PSP - Status 41 (Specialty use local procedures) 10904 No Return Filed (Taxpayer no longer liable) Cannot be used if a claim amount is present.
    40 PSP - Status 41 (Specialty use local procedures) 10904 No Return Filed (Taxpayer unable to locate) Cannot be used if a claim amount is present.
    41 PSP - Status 41 (Specialty use local procedures) 10904 No Return Filed (Taxpayer due refund) Cannot be used if a claim amount is present.
    42 CCP - Status 51 5351 Return Filed (Taxpayer unable to locate)  
    43 CCP - Status 51 5351 Accepted after Monitoring (LB&I only)  
    45 CCP - Status 51 5351 Reference and Information Returns Only valid for Source Code 45. Cannot be used if a claim amount is present. Use if the original return was received or an electronic print provided the information needed. Electronically filed returns should not be ordered with Source Code 45. If one of these is inadvertently ordered follow local procedures for closure.

    Reminder:

    When Form 10904 is used the return must be updated to Status Code 41 prior to sending to the AIMS/ERCS staff.

  10. A valid NAICS code is required when closing some types of returns with examined disposal codes. If a valid NAICS code is required, it must be updated before the case may be closed.

  11. If the amount claimed is $1, it should be updated to the correct amount prior to closing the return.

    Note:

    Under some circumstances, $1 may be the correct entry. For example: If a loss year is being examined to determine if a claim for refund against a carryback year will be allowed, time should be applied to protection of revenue base code "P" when working the claim issues. A claim amount of $1 must be entered on the loss year in order to properly code the time charges.

  12. After the data is input for the closure, the user enters the information to create the Form 3210. If there is an error or change needed in an address listed the user may update the address on the Form 3210 being generated. The user should contact the AIMS/ERCS staff to make permanent changes to the addresses.

  13. Some penalty records have special procedures for closing if the penalty case is appealed. The following applies to IRC 6707A (MFT P5, Activity Code 505), IRC 6700 (MFT P6, Activity Code 593) , IRC 6701 (MFT P7, Activity Code 594) , and IRC 6695A (MFT PB, Activity Code 552) ERCS penalty controls:

    • Prepare a Form 3210. Since the status on the record will not change, an ERCS blank form will need to be generated and the return information filled in.

    • Prepare the case file and send it to Appeals.

    • Update the ERCS penalty record to Suspense Type 203, “Civil Penalty Case In-Transit to Appeals”. Do not update the status at this time.

    • When the acknowledged Form 3210 is received from Appeals, close the ERCS record to Status Code 90 and Disposal Code 07 and enter the penalty amount.

  14. Once the return is closed on ERCS, the secretary should notify the manager the closure is ready for approval on ERCS. The closure should be approved within two business days. The case should be shipped as soon as possible, but within five business days from the date the return was closed on ERCS. See Document 13056, Shipping Procedures for Personally Identifiable Information (PII), for packaging procedures for returns.

    Reminder:

    Returns should not be shipped to another group or function if the closure is still pending the manager's approval. Full ERCS control is not relinquished to the new group or function until the manager approves the transfer or closure.

  15. The group remains responsible for the returns while they are in transit (Status Codes 21, 41, and 51) and must follow-up on any unacknowledged Form 3210 after 21 calendar days. When the Form 3210 is acknowledged or when AIMS and ERCS are updated to another status within these functions the responsibility for the returns shifts to the receiving function.

  16. For transfers out of area or industry, users should refer to local procedures. Users must be granted permission for Disposal Code 30 in order to transfer returns to another PBC.

4.7.5.7  (09-18-2013)
Applying Time

  1. ERCS captures time for technical employees by the activities an employee performs each day. When time is input into ERCS it is immediately available on ERCS screens and reports. The time is used by management to monitor issues such as high time on cases, started cases with no time applied, and inactive cases. At the end of each reporting cycle the time is rolled up to HQ where it is used for National reports, in planning and creating the Examination Plan, and for monitoring each area or industry to ensure the plan will be met.

  2. When applying time to returns on ERCS or IMS, the examiner should ensure it is applied to the return being worked so the total time for the return will match the total time on Form 5344 when the return is closed.

  3. Time is due in ERCS by close of business on the last day of the reporting cycle unless local procedures require it to be input earlier.

  4. Technical employees (including revenue agents, tax compliance officers, tax examiners, etc.), their managers and LB&I TMs are required to account for their time on ERCS. IMS is used by LB&I and Specialty to input time which is imported into ERCS.

  5. ERCS determines which employees are required to input time based on the position code on the ERCS employee record, so it is critical the position code is correct.

  6. IMS time is sent to ERCS every Thursday night. Users in each LB&I, Excise and E&G group should run the Verify Imported Time option each Friday to correct any errors. Refer to the Time and Timekeeping Related Topics section of the "LB&I BSP - Issue Management System (IMS) User Guide" for more information about using IMS to input technical time and correcting any errors.

  7. Managers may not charge time to returns or activities related to the examination of returns. They may only charge time to Activity Codes in the 600 to 899 range. For this reason, ERCS does not allow managers to have assigned inventory.

  8. The group should ensure any updates or corrections to returns have been made on ERCS prior to applying time on ERCS or IMS. In particular, prior to charging claim time to protection of revenue base (P of RB) code "P" , the examiner should ensure that a claim for refund amount has been entered on the ERCS record. Claim time should only be charged when the examiner is working issues involving a release of money from the Treasury that has not already been paid by the taxpayer. This will guarantee time charges are sent forward at the end of the cycle with the correct codes.

  9. Employees must account for the daily number of hours matching the employee's WSP on ERCS. The WSP may be updated through the Employee Records program.

  10. Employees on flexible work schedules who work over the number of hours scheduled for the day must apply the additional hours worked to the returns or activities performed. The additional time should also be recorded using Activity Code 840 with the appropriate leave code describing how the employee will be compensated (credit hours, comp time, or overtime). Comp time and overtime must be pre-approved by the manager using Form 2787 A, Authorization and Report of Overtime Worked. The leave codes for Activity Code 840 correspond with the time codes on SETR. Refer to Leave Codes for ERCS 4502 Entries for a list of the ERCS alpha leave codes associated with Activity Code 840.

    Example:

    Leave Code OT (overtime) on ERCS corresponds with Time Code 2 on SETR.

  11. Employees who work less than the hours scheduled on their WSP for the day must record the time as leave using Activity Code 830 (leave) or 831 (leave without pay) with a leave code describing the type of leave taken (annual, sick leave, etc.) The leave codes for Activity Codes 830 and 831 correspond with the program codes on SETR. Refer to Leave Codes for ERCS 4502 Entries for a list of the ERCS alpha leave codes associated with Activity Codes 830 and 831.

    Example:

    Leave Code A (annual leave) on ERCS corresponds with Program Code 59501 on SETR.

  12. Employees scheduled to work on a holiday are required to input holiday time or leave without pay time on that day. Holiday time is charged using Activity Code 830 and Leave Code H. Leave without pay time is charged using Activity Code 831 and the associated leave code.

  13. Full-time employees not scheduled to work (according to the employee's WSP) on the holiday must charge holiday or leave without pay time on the employee's in lieu of holiday (ILOH). In most instances, the ILOH is the employee's last work day preceding the holiday. However, if the holiday falls on a Sunday, the ILOH is the employee's next work day after the holiday. Refer to IRM 6.610.1, Hours of Duty and Work Scheduling, for more information.

    Example:

    A holiday falls on Friday. According to Joe's WSP, he is not scheduled to work on Friday, but he is scheduled to work on the preceding Thursday. Joe's ILOH is Thursday.

    Example:

    A holiday falls on Sunday. The ILOH is the following Monday for employees scheduled to work on Monday. However Jennifer, who is a full-time employee, is not scheduled to work on Monday. Her next scheduled work day is the following Tuesday, so Jennifer's ILOH is Tuesday.

    Example:

    A holiday falls on Monday. Joe is scheduled to work on Monday, so his holiday is Monday. However Jennifer, who is a full-time employee, is not scheduled to work on Monday, but she is scheduled to work on the preceding Friday. Jennifer's ILOH is Friday.

  14. An employee may not work credit hours during his or her regularly scheduled duty hours on a holiday or ILOH. See IRM 6.610.1, Hours of Duty and Work Scheduling, for more information. If an employee, with the manager's pre-approval, works on the day designated as the ILOH, the employee's time should be charged on ERCS as follows:

    • Charge the employee's allotted number of holiday hours to Activity Code 830 and Leave Code "H" .

    • Charge time to the returns or activities worked.

    • Charge time to show how the employee is to be compensated for the time using Activity Code 840 with the appropriate leave code for comp time or overtime.

      Note:

      Comp time and overtime must be pre-approved by the manager.

  15. After the time from ERCS is rolled up at the end of the cycle, corrections made to ERCS time charges have no impact on the national reports and the tables already extracted. Significant changes to the time data in a prior cycle should be reported to the AIMS/ERCS staff, who in turn should report it to the HQ SETTS analyst.

  16. Refer to the Examination Technical Time Reporting System IRM 4.9.1, Examination Technical Time Reporting System, Outline of the System, for further information concerning technical time reporting.

4.7.5.8  (09-18-2013)
Reports

  1. ERCS contains various reports and research options that provide management ways to monitor issues such as the length of time returns have been in Status 10, excessive time applied to cases, returns with short statutes, etc. ERCS reports contain real time data which means when a report is run, the information is as current as the last input or time charge in the system.

  2. Reports are available on ERCS at various levels based on the user's permissions and user type (i.e. Group, Territory, etc.) Group users may generate reports at the group level. Territory users may generate reports for individual groups within their territory or for the entire territory. DFO users may generate reports at the group, territory or DFO level. Area users may generate reports at the group level, the territory level, or for the entire area. Industry users may generate reports at the group level, the territory level, or the DFO level as well as for the entire industry.

  3. Reports are designed to meet the needs of specific user groups; therefore, some reports may not have an option to be generated by a single group and other reports may not have an option to be generated by the entire area. For example, it would be impractical for an area user to pull an inventory report for the area; and it would be meaningless for a Group user to pull an inventory location report by group since all the returns listed for the user would be in the same group.

  4. For information on available reports, generating and printing ERCS reports, and the data included on each report refer to the ERCS Group Handbook for Group users and to the ERCS Territory Handbook for Territory, DFO, Area, and Industry users.

  5. Refer to IRM 4.7.6, Reports, for detailed descriptions of ERCS reports, recommended uses for the reports, and the recommended frequency for running the reports.

4.7.5.9  (09-18-2013)
Managerial Approval

  1. ERCS provides a way for managers to review and approve requisitions, closures and selected updates before they become permanent changes on ERCS and before the updates are sent to AIMS.

  2. When returns need to be added, updated, transferred, or closed on ERCS, the appropriate form should be completed by the examiner. The manager is required to review and either sign or initial the form prior to input into ERCS, except for Form 5345-D, Examination Request-ERCS (Examination Returns Control System) Users, which does not require a manager's signature. The following forms are used to update ERCS and AIMS:

    1. Form 5345-D is used to request Masterfile, Non-masterfile, Penalty controls, and Non-AIMS controls on ERCS. The Masterfile and Non-masterfile requisitions are forwarded to AIMS.

    2. Form 5348, AIMS/ERCS Update (Examination Update), is used to make updates on AIMS and ERCS or to transfer returns to another group, function, area, or industry. This form can be used to update multiple returns if all the updates are the same for each return listed.

    3. Form 5349, Examination Correction Request, is used to correct data on a single return. This form should be used to correct information on a closed case on AIMS. To request a change the group should complete the form and return it to the AIMS/ERCS staff to input on AIMS. Form 5348 should be used by the group to correct open cases on AIMS and ERCS.

    4. Form 5351, Examination Non-Examined Closings, is used for survey closings to Centralized Case Processing (CCP) (Status Code 51).

    5. Form 10904, Request for Record Deletion from AIMS, is used for non-examined closings on AIMS and ERCS (Status Code 41).

  3. It is recommended that managers access ERCS at least every two days to check for updates pending managerial approval. When the manager logs into ERCS, the Main Menu screen displays a message if there are requisitions or updates waiting for the manager to approve.

  4. All requisitions must be approved or disapproved prior to time roll up at the end of each reporting cycle to ensure that time applied on these returns is correct. When a requisition with time applied is disapproved, the time is moved to a below the line activity code. If done after the time applied to the return has rolled up to SETTS, the time cannot be corrected on the tables.

  5. To prevent returns in transit (Status Codes 21, 41, and 51) from becoming overage, the manager should review case closures while the return is still in a group status. After the review is completed, the case should be closed, approved on ERCS, and shipped to the receiving function within five business days.

  6. Normally updates to returns on ERCS requiring approval are performed by the group secretary and approved by the manager. However, if a manager or acting manager updates a return, the action may require the TM to approve the work.

  7. When an update is pending approval, many ERCS screens and reports display a "p" next to the item to denote the update is "pending" . When an update is approved or disapproved, the "p" is removed.

  8. For detailed information about the Managerial Approval program, options and screens, see the Managerial Approval chapter of the ERCS Group Handbook for Group and Team Managers and the Managerial Approval chapter of the ERCS Territory Handbook for TMs.

4.7.5.9.1  (09-18-2013)
Actions Requiring Approval

  1. Only selected updates on ERCS require managerial approval. Some updates require approval no matter who the user is. Some updates do not require approval if they are performed by a manager. Changes by Group users requiring managerial approval include the following. The items marked with an asterisk (*) require TM approval if performed by the manager:

    • Changes to the statute of limitations generating an update to AIMS.*

    • Requisitions generating an update to AIMS.*

    • Transfers to another area or industry generating an update to AIMS.*

    • Non-examined closures to Status Code 90 generating an update to AIMS.*

    • Changes to the status code, excluding 10 to 12. (If the technical services code (TSC) or the processing campus code (PCC) is associated with the status code change, they also require approval.)

    • Changes to the ERCS employee ID. (If the aging reason is updated because of the employee ID change, it also requires approval.)

    • Changes to the secondary business code or the employee group code on returns.

      Note:

      Group users are not generally given permission to close returns to Status 90 or transfer returns to other areas.

4.7.5.9.2  (09-18-2013)
Reversing Actions Prior to Managerial Approval

  1. If an update or closure is input incorrectly on ERCS, depending on the update, it may be reversed (set back to the original value) by the user prior to the manager approving the work.

  2. If a statute is updated incorrectly and is still pending managerial approval, it can be changed back to the original statute which will remove the managerial approval record. The user can then update the return with the correct statute which will create a new managerial approval record.

    Note:

    Statutes should not be updated back to an expired statute on ERCS.

  3. Although a requisition cannot be reversed by the user, if data was input incorrectly on a requisition the data can be corrected prior to the manager approving the requisition.

  4. Transfers to another area or industry (the PBC is changed) on returns controlled on AIMS cannot be reversed prior to manager approval. If input in error, the user should alert the manager to disapprove the transfer.

  5. Non-examined closures (Status Code 90 closures) generating an update to AIMS cannot be reversed by the user. If input in error, the user should alert the manager to disapprove the closure.

  6. Status updates input in error, other than the situation above with Status Code 90 closures on AIMS, can be reversed back to the original status prior to approval. If the new status is a group status, the status should be changed back using the Correct or Display Records menu option. If the new status is in another function (i.e. Status Code 21, 41, or 51), the reversal is made in the Establish Control menu option.

  7. Changes to the employee ID, if input incorrectly, may be reversed by the user in the Correct or Display Records menu option.

  8. Changes to the SBC or EGC may only be reversed by the user if the user has update permissions for both the old codes and the new codes and the original change was made in the Correct or Display Records menu. The reversal can be made in the Correct or Display Records menu option. If the user does not have permission for both AACs, the user should alert the manager to disapprove the transfer if the updates are not correct.

4.7.5.9.3  (09-18-2013)
Approving/Disapproving Actions

  1. When a manager executes the program to approve all returns in an AAC, all the returns matching the AAC and pending approval are locked. This prevents another user with approval permission for the group from accessing the same returns on the approval screen. The returns are unlocked when the program runs to completion.

    Note:

    Contact your AIMS/ERCS staff if there are problems with locked returns pending managerial approval.

  2. Updates requiring approval are grouped by the following categories:

    • Requisitions

    • Non-masterfile to Masterfile conversions

    • Updates and closures

    • Items related to the approver's own inventory - only for acting managers

  3. When approving a requisition, the manager should ensure the information on the screen is correct. In particular, the manager should be aware when approving the requisition he or she is also approving the statute. If any of the information is incorrect on the approval screen, the manager should skip the return and take the necessary steps to get the information corrected. Then the requisition can be approved.

  4. When a requisition is disapproved, the record is closed to Status 90 on ERCS. If there is any applied time to the record, the user is prompted to enter a below the line activity code, and the time is moved to the activity code entered.

  5. When approving a Non-masterfile to Masterfile conversion, the manager is approving two changes; a Masterfile requisition and a Non-masterfile deletion. The Masterfile requisition is forwarded to AIMS. If the user has permission on ERCS to send Status Code 90 updates to AIMS, the Non-masterfile closure is also forwarded to AIMS. Otherwise, the user should complete Form 10904 and forward it to the AIMS/ERCS staff to close the Non-masterfile record off of AIMS.

  6. When a Non-masterfile to Masterfile conversion is disapproved, the Non-masterfile record is restored to the original values.

  7. When a requisition, update, or closure impacting AIMS is approved, AIMS is updated when the daily ERCS to AIMS uploads are run.

  8. When an update or closure is disapproved, the change is reversed back to the original value.

  9. If changes are pending approval to returns in an acting manager's inventory, these are grouped together on the acting manager's managerial approval screen. An acting manager cannot approve changes to his or her own inventory. If the manager is unavailable and an update to the acting manager's inventory needs to be approved, the acting manager should contact the AIMS/ERCS staff to see if another manager can approve the work. If the TM is willing to approve the updates, the acting manager has the option to forward the approval up to the TM level.

4.7.5.9.4  (09-18-2013)
Delegating Permissions

  1. A manager can grant temporary permission for his or her group to another user through the option Grant Temporary Permission providing the following requirements are met:

    • The user has an active ERCS login and password.

    • This is not the first time the user has been granted ERCS permission. (The AIMS/ERCS staff must grant a user's permissions for the first time. The first time a user's permissions are added, the user is granted permission to access the database. Only the AIMS/ERCS staff can grant a user database access.)

    • The manager has permanent permission for the same type of permission the user is being given. For example: a manager with read and approval permissions, but not write permission can only grant another user read and approval permissions.

  2. The manager should only grant a user permission for the length of time the permission is needed. Technical employees should not be routinely given write permission during an acting assignment.

  3. Individuals delegated to act, who are assigned an inventory of cases should only be granted temporary read and approval permissions.

Exhibit 4.7.5-1 
Action Codes

Action codes are used on ERCS to add another level of inventory control for tax compliance groups. The action code is an ERCS only code that tells the next action due in an examination. Some codes are nationally defined and some are available for local definition. When an action code is input on a return, a purge date is either set by the ERCS program or input by the user. Action codes 01 and 02 also require an appointment time to be input by the user.

Action codes may be added or updated on returns in the Tax Auditor menu, the Correct or Display Records menu, or when applying time to returns. Reports in the Tax Auditor menu display records using these codes. The Daily Report and the Group Purge Report can be modified by the AIMS/ERCS staff to include (or exclude) returns with particular action codes. However, any changes to these reports impact the entire area. Refer to the Codes chapter of the ERCS Group Handbook for more information about these codes.

Action Code Definition Purge Date
01 First Appointment - Initial Interview Set by the user
02 Subsequent Appointment Set by the user
03 Follow-up Today plus 10 days
04 Issue 15 Day Letter Today plus 15 days
05 In Overnight Today
06 Schedule Pre-audit Set by the user
07 Closed Unagreed Set by the user
08 Follow-up Activities Set by the user
09 Manager Conference Set by the user
10 Call Back Letter Set by the user
11 Manager Reviewing Today
12 Ready to Close Today plus 5 days
13–20 Local Definition Set by the user

Exhibit 4.7.5-2 
Suspense Types

Suspense types are used in conjunction with action dates in ERCS when follow-up is necessary, but the action may not take place for days, weeks or months. When a suspense type is added to a return, the return may be updated to a status code and the action date may be set based on the number of days as shown in the table below. If the program does not set the action date, the user must enter it. Refer to the Codes chapter of the ERCS Group Handbook for more information about the suspense type. Refer to the Inventory Reports chapter of the ERCS Group Handbook for information about the Suspense Report which is used to monitor returns in these codes.

Suspense Type Definition Status Code Number of Days Use
200 Group Suspense 13 30 General 30 day suspense
201 30 - Day Letter 13 37 30 Day Letter suspense
202 Request for Exam Assistance from Appeals (pilot) --- 60 Used to monitor collateral records established on ERCS when Exam assistance is requested from Appeals and Appeals has case control.
203 Civil Penalty Case In-Transit to Appeals --- 14 Used to monitor MFT P5, P6, P7 and PB penalty records in-transit to Appeals
205 30 - Day Letter Civil Fraud --- 37 30 Day Letter suspense, allows return to remain in current status (17)
206 Unagreed Case Purge   180 ---
211 Unstarted Inventory 10 90 ---
212 Assigned Inventory 12 213 ---
213 No Current Agreement-New Agreement --- --- ---
214 Tip Rate Determination Agreement (TRDA) (Current Agreement) --- --- ---
218 Estate & Gift 18 Month Filing Cases --- --- ---
220 Civil Settlement from Tech Services 17 --- ---
221 Probation Cases 17 --- ---
222 Fraud Development 17 --- ---
250 Abusive Tax Avoidance Transactions (ATAT) Non-Issue Management Team (IMT) Initial Estimated Completion Date (ECD) --- --- ---
251 ATAT Non-IMT Revised ECD 1 --- --- ---
252 ATAT Non-IMT Revised ECD 2 --- --- ---
253 ATAT Non-IMT Revised ECD 3 --- --- ---
260 ATAT IMT Initial ECD --- --- ---
261 ATAT IMT Revised ECD 1 --- --- ---
262 ATAT IMT Revised ECD 2 --- --- ---
263 ATAT IMT Revised ECD 3 --- --- ---
270 Non-Filer Initial ECD --- --- ---
271 Non-Filer Revised ECD 1 --- --- ---
272 Non-Filer Revised ECD 2 --- --- ---
273 Non-Filer Revised ECD 3 --- --- ---
280 All Other Cases Initial ECD --- --- ---
281 All Other Cases Revised ECD 1 --- --- ---
282 All Other Cases Revised ECD 2 --- --- ---
283 All Other Cases Revised ECD 3 --- --- ---

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