4.7.7  Technical Services

Manual Transmittal

October 21, 2011

Purpose

(1) This transmits revised IRM 4.7.7, Examination Returns Control System (ERCS), Technical Services.

Material Changes

(1) The title of this IRM has been changed to Technical Services.

(2) Changes were made throughout to add instructions and functionality for EQMS, QMA, and LQMS staff.

(3) IRM 4.7.7.1.1 (1) (a) was reworded and moved to IRM 4.7.7.9 (5).

(4) IRM 4.7.7.1.2 was moved to IRM 4.7.7.3.1 (3) and the list of position codes updated.

(5) IRM 4.7.7.1 was expanded to list the employees impacted by this IRM and to define "employee" and "user" .

(6) IRM 4.7.7.2 (1) (h) was revised and the original text was moved to IRM 4.7.7.3.2 (2) and revised to add the SBCs.

(7) IRM 4.7.7.2 (2) was added to list EQMS, QMA, and LQMS user capabilities.

(8) IRM 4.7.7.2 (5) was modified to add links to the ERCS Handbooks.

(9) IRM 4.7.7.3 was added for Employee Records and Permissions.

(10) IRM 4.7.7.4 (1) was expanded to include more detail about how user permissions work. The original text was moved to IRM 4.7.7.5 (1) and expanded to include the command codes that require managerial approval and the necessity of second level approval if a manager performs updates on ERCS.

(11) IRM 4.7.7.4 (2) was updated to replace territory manager with manager and/or designated reviewers in reference to sharing ROTER information based on IRM 1.5, Managing Statistics in a Balanced Measurement System Handbook.

(12) IRM 4.7.7.4 (3) was expanded to include unauthorized attempts to view or update an IRS employee's return is considered a UNAX violation.

(13) IRM 4.7.7.4.2 (2) was deleted because the Online 5081 security rules apply to everyone, not just clerical personnel, and the rules are posted on the Online 5081 system.

(14) IRM 4.7.7.5 (2) was reworded and moved to IRM 4.7.7.11.5 (1).

(15) IRM 4.7.7.5 (3) was reworded and moved to IRM 4.7.7.11.2 (1).

(16) IRM 4.7.7.5 (4) was added.

(17) IRM 4.7.7.5 (5) was revised and the original text was moved to IRM 4.7.7.9 (5).

(18) IRM 4.7.7.5 (7) was added.

(19) IRM 4.7.7.6 was expanded to include EQMS, QMA, and LQMS managers and acting managers.

(20) IRM 4.7.7.6 (1) was revised to indicate the manager's responsibilities are to ensure updates to ERCS are done accurately and timely instead of actually performing the updates. Also added items a, c, d, e, g, and h.

(21) IRM 4.7.7.6 (1) (i) was updated to include when technical time is due in ERCS.

(22) IRM 4.7.7.6 (2) items b, c, d, and f were added.

(23) IRM 4.7.7.7 was expanded to include tax examiners.

(24) IRM 4.7.7.7 (a) was updated to include when technical time is due in ERCS.

(25) IRM 4.7.7.7 (b) was added.

(26) IRM 4.7.7.8 (1) (e) was updated to include when technical time input is due.

(27) IRM 4.7.7.8 (1) items f and g were added.

(28) IRM 4.7.7.8 (2) (a) was expanded to include requisitions and updates.

(29) IRM 4.7.7.8 (2) (h) was revised to say the user has the responsibility to update ERCS for the acknowledged date of the Form 895.

(30) IRM 4.7.7.9 was added.

(31) IRM 4.7.7.10 (b) was added.

(32) IRM 4.7.7.11 through 4.7.7.13 was added.

(33) Exhibit 4.7.7-1 through 4.7.7-9 were added.

(34) This IRM will be issued electronically only for all future releases.

Effect on Other Documents

IRM 4.7.7 dated October 1, 2003 is superseded.

Audience

Large Business and International (LB&I) and Small Business and Self Employed (SB/SE) employees who use ERCS.

Effective Date

(10-21-2011)

Karen M. Schiller
Director, Examination Planning and Delivery
Small Business/Self-Employed

4.7.7.1  (10-21-2011)
Overview

  1. The purpose of this section is to provide policy guidelines and procedures for territory managers, managers, reviewers (revenue agents, tax auditors, and tax compliance officers without inventory), tax examiners, clerical staff, and users designated as actors in the use of Examination Returns Control System (ERCS) for the following functions:

    • Small Business/Self Employed (SB/SE) Technical Service (TS)

    • Joint Committee Review (JCR)

    • Examination Quality Measurement Staff (EQMS)

    • Quality Measures and Analysis (QMA)

    • LB&I Quality Measurement System (LQMS)

  2. For the purposes of this section "employee" refers to an employee in a function listed in IRM 4.7.7.1 (1) with an ERCS employee record. All ERCS employees have an assigned ERCS employee identification (ID) number. The ERCS employee ID is used to associate inventory and time charges with the employee.

  3. For the purposes of this section "user" refers to an employee in a function listed in IRM 4.7.7.1 (1) with ERCS access. Depending on a user's permissions, a user may update records, generate reports, approve updates, etc. in the ERCS system.

  4. The employees and users in TS and JCR are referred to in the ERCS Handbooks as review employees and review users, respectively.

  5. The employees and users in EQMS, QMA, and LQMS are referred to in the ERCS Handbooks as sample review employees and sample review users, respectively.

  6. The instructions for TS and JCR users for navigating the ERCS programs can be found in the ERCS Review Handbook. The instructions for EQMS, QMA, and LQMS users for navigating the ERCS programs can be found in the ERCS Sample Review Handbook.

4.7.7.2  (10-21-2011)
User Capabilities

  1. TS and JCR users can:

    1. Add or update employee information for employees in their authorized Audit Information Management System (AIMS) Assignee Code (AAC).

    2. Research and display records.

    3. Generate reports of returns in TS statuses (Status Codes 20 - 39).

    4. Update, transfer, and close returns in TS statuses.

    5. Input examination technical time for employees in their authorized AAC.

    6. Generate time reports for employees and returns.

    7. Generate a Form 895, Notice of Statute Expiration.

    8. Generate a Form 3210, Document Transmittal.

    9. TS and JCR managers can approve statute updates to returns in their authorized AAC.

  2. EQMS, QMA, and LQMS users can:

    1. Add or update employee information for employees in their authorized AAC.

    2. Research and display records.

    3. Generate reports of returns selected for sample review.

    4. Update returns selected for sample review in Status Code 90.

    5. Input examination technical time for employees in their authorized AAC.

    6. Generate time reports for employees and returns.

4.7.7.3  (10-21-2011)
Employee Records and Permissions

  1. A user is granted access to the ERCS server via the Online 5081, Automated Information System (AIS) User Registration / Change Request. Refer to IRM 4.7.2, Security, for details.

  2. In order to run ERCS programs, a user must have:

    1. A valid login and password for the ERCS server.

    2. An ERCS employee record containing the user's login name.

    3. Permissions records.

4.7.7.3.1  (10-21-2011)
Employee Records

  1. Employee records are usually added by the secretary in the group, but they can also be added by the manager or by a secretary in another group if the user has update permission for the AAC. Details on adding an employee record to ERCS can be found in the Employee Records chapter of the ERCS Review Handbook for TS and JCR users and the Employee Records chapter of the ERCS Sample Review Handbook for EQMS, QMA, and LQMS users. The user should enter all information accurately and completely when adding or updating employee records.

  2. TS, JCR, EQMS, QMA, and LQMS employees are added to ERCS in a Primary Business Code (PBC) 201 - 207, 212, or 306, a Secondary Business Code (SBC) 88700, 88705, or 88710 and an employee group code (EGC). These three codes make up the AAC of the employee's assignment on ERCS. See Exhibit 4.7.7-1 for more information about the codes.

  3. TS, JCR, EQMS, QMA, and LQMS employees utilize Position Codes 105, 106, 118, 206, 218, 327, and 400. See Exhibit 4.7.7-3 for the definitions of these codes.

  4. Since values from the ERCS employee records are used for time reporting, inventory assignment, determining staffing needs, 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 current:

    • Employee name

    • AAC (primary business, secondary business, and employee group codes)

    • Post of duty

    • Position code

    • Grade

  5. All ERCS users must have an active 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 when the user performs certain tasks on ERCS.

  6. When an employee transfers to another group or function, the user in the employee's current group should update the employee record to the new group or function (i.e. AAC). If the employee transfers to the new group within a time cycle, the user should enter the start date on ERCS as the date the employee is expected to report to duty in the new group. If the employee transfers to the new group at the end of a time cycle, the user should enter the start date on ERCS as the first day after the end of the time cycle (usually a Saturday). Entering this date instead of the following Monday will prevent erroneous Agent Input Documents from being printed for the old group for the first cycle after the move.

    Caution:

    Prior to transferring an employee to another group or function, the employee's inventory should be re-assigned to another employee unless the inventory is also being re-assigned to the new group.

  7. ERCS employee records should be inactivated when the employee leaves the Service or transfers within the Service to a non-ERCS position. The user should enter the inactivation date as the first day the employee is no longer an ERCS employee or user. The login name should not be removed from the ERCS employee record when an employee record is inactivated.

  8. 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 it is used in the creation of the audit trails.

  9. Any problems correcting an ERCS employee record should be reported to the user's AIMS/ERCS support staff.

4.7.7.3.2  (10-21-2011)
Permission Records

  1. Permissions for users are added by an AIMS/ERCS analyst. Permission records may be added before or after the employee record is added, but the user must have an active login to the system before the permission records can be added.

  2. Clerical staff in TS are given read and write permission for the PBC of the user's area and SBC 88700. Users in TS may also be given permission for LB&I and Specialty Tax PBCs and SBC 88700 in order to assign LB&I and Specialty Tax returns to reviewers.

  3. Clerical staff in JCR, EQMS, QMA, and LQMS are given read and write permission for the following PBC and SBC combinations:

    Function PBC SBC
    JCR 306 88710
    EQMS 207 88700
    QMA 212 88700
    LQMS 306 88705

  4. TS and JCR managers are given read and first level approval permission for the same codes (PBC and SBC) as their clerical staffs.

  5. Territory managers in TS and JCR are generally given read and second level approval permissions for the same codes as their first line managers.

  6. EQMS, QMA, and LQMS managers are given read permission for the same codes as their clerical staff. EQMS, QMA, and LQMS managers do not approve work on ERCS, so they do not need approval permissions.

  7. Read permissions give the user the ability to pull reports and see return information.

  8. Write permissions give the user the ability to update employee information, input time, and update returns.

    Note:

    The types of updates that may be made to returns vary with function.

  9. Permission records should be deleted by the AIMS/ERCS analyst when they are no longer needed.

  10. Inactivating the employee record on ERCS results in the deactivation of the employee's permission records on ERCS.

4.7.7.4  (10-21-2011)
Security

  1. ERCS operates on the principle that users should only change data on returns under the user's control. Consequently, a TS and JCR user may only change information on returns in Status Codes 20 - 39 within the AACs in which the user has permission. Users in EQMS, QMA, and LQMS may only change information on returns selected for sample review in Status 90 within AACs reviewed by the EQMS, QMA, and LQMS site (SB/SE, Specialty Tax, or LB&I). Throughout ERCS, error messages appear when a user attempts to update returns in which the user does not have permission.

  2. Because of the potential for 1204 violations, reports generated by users that contain any Record of Tax Enforcement Results (ROTER) information are to be shared only at the first line manager level or higher and/or with designated reviewers on a need to know basis. For more information about ROTER, 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. No attempt should be made to access the user's own SSN or that of the user's spouse. If the user's personal SSN or that of the user's spouse is entered, an employee audit access message is created of a possible breach of security. An employee audit access message is also created if a user attempts to view or update an employee audit return that the user does not have permission to update. Breaches in security are considered UNAX violations and are subject to disciplinary action. For more information about UNAX, see IRM 10.5, Privacy Information Protection and Data Security (PIPDS).

4.7.7.5  (10-21-2011)
Approval Authority

  1. Updates to returns in TS and JCR by the clerical staff requiring managerial approval are approved by the first line manager. Updates to returns in TS and JCR by a manager or acting manager requiring managerial approval must be approved by the territory manager. Types of updates made by TS and JCR users requiring approval are:

    1. Changes to the statute of limitations.

    2. Requisitions generating a Command Code (CC) AM424 or CC AMNON.

    3. Non-examined closures of returns generating a CC AMSOC.

  2. Changes to returns on ERCS requiring approval do not roll up to AIMS until they are approved.

  3. Disapproval of updates cause the items to revert to their prior value. Returns with pending approval cannot be transferred or closed on ERCS. ERCS does not create a "reject" list or otherwise mark disapproved updates. ERCS only lists those transactions that are pending approval and what the updated value will be when approved.

  4. ERCS cannot prevent returns from being physically transferred to TS and JCR that are still pending managerial approval in the group for the transfer. Returns in transit to TS and JCR can be monitored using the "In Transit Report" on the Inventory Reports menu.

  5. Updates pending managerial approval, show a "p" next to the value on the screens in the Correct or Display Records program.

  6. TS and JCR managers should log onto ERCS at least weekly to check for updates that require managerial approval.

  7. Users in EQMS, QMA, and LQMS do not update any values on ERCS returns that require managerial approval.

4.7.7.6  (10-21-2011)
Role and Responsibilities of Managers

  1. Responsibilities of managers include but are not limited to:

    1. Ensuring the ERCS employee information for their employees is accurate and complete.

    2. Ensuring prompt assignment of incoming cases.

    3. Ensuring work is evenly distributed among the employees in their group.

    4. Ensuring users timely and accurately input required data into ERCS.

    5. Ensuring ERCS reports are generated timely.

    6. Ensuring prompt closing of all outgoing cases for final processing.

    7. Ensuring separation of duty is being maintained.

    8. Ensuring any ERCS system related problems are reported timely to the AIMS/ERCS support staff.

    9. Ensuring time information is entered in ERCS accurately and no later than the close of business on the last day of each reporting cycle.

    Reminder:

    Managers include acting managers.

  2. In addition to the items in IRM 4.7.7.6 (1), TS and JCR managers are also responsible for the following:

    1. Monitoring statuses and statutes of all returns in inventory.

    2. Monitoring returns in-transit to or from TS statuses.

    3. Ensuring users timely and accurately resolve any ERCS to AIMS rejects.

    4. Ensuring users resolve issues on the AIMS Error reports generated by the AIMS to ERCS weekend processing.

    5. Approving or disapproving changes to ERCS returns requiring managerial approval timely.

    6. Ensuring Forms 895 are acknowledged timely and the acknowledgement date (or returned date on the ERCS screen) is timely input into ERCS.

4.7.7.7  (10-21-2011)
Role and Responsibilities of the Reviewer and Tax Examiner

  1. Responsibilities of the reviewers include but are not limited to:

    1. Submitting the reviewer's technical time sheet (Agent Input Document or similar approved time input document) on a regular basis in order to ensure time is entered into ERCS no later than the close of business at the end of each reporting cycle.

    2. Submitting any changes to the reviewer's technical time sheet to the manager or clerical personnel on the first business day after the close of each reporting cycle early enough to ensure the time on ERCS is corrected no later than noon local time.

  2. In addition to the items listed in IRM 4.7.7.7, reviewers and tax examiners in TS and JCR are also responsible for the following:

    1. Ensuring the statute information on ERCS is accurate on all assigned cases.

    2. Completing and submitting Forms 895 timely to the manager.

    3. Ensuring all completed cases are closed promptly.

4.7.7.8  (10-21-2011)
Role and Responsibilities of the Clerical Staff

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

    1. Ensuring ERCS is updated timely for all changes to employee records.

    2. Ensuring ERCS is updated timely for all changes to returns or inventory records.

    3. Returning updated documents to the reviewers for association with the case file.

    4. Generating the ERCS inventory and monitoring reports and distributing as requested by management.

    5. Inputting examination technical time data into ERCS no later than close of business on the last work day at the end of the reporting cycle.

    6. Inputting examination technical time corrections into ERCS no later than noon local time the first work day after the end of each reporting cycle.

    7. Ensuring any ERCS system related problems are reported timely to the AIMS/ERCS support staff.

  2. In addition to the items listed in IRM 4.7.7.8, the clerical staff in TS and JCR is also responsible for the following:

    1. Ensuring requisitions and updates to returns have received management approval prior to inputting to ERCS.

    2. Reviewing and resolving ERCS to AIMS requisitions and update rejects promptly when the message "There are ERCS-AIMS Uploading results to check" appears on the Examination Main Menu.

    3. Reconciling the Overage Requisition Report, at least monthly, to verify that ERCS to AIMS upload and reject problems are resolved.

    4. Researching and correcting data promptly that is included on the AIMS Error reports generated from the AIMS to ERCS weekend processing.

    5. Reconciling the AIMS 4.0 table and the ERCS data within 5 days of the receipt of the AIMS table.

    6. Reconciling the AIMS SSIVL data with the ERCS data periodically following local procedures.

    7. Ensuring returns requiring a Form 895 have a form associated with the return.

    8. Ensuring the acknowledgement date (or returned date on the ERCS screen) for the Form 895 is input into ERCS as specified in IRM 4.7.3, Statute of Limitations.

    9. Ensuring returns selected for EQMS, QMA, and LQMS have a sample selection sheet attached to the case file.

4.7.7.9  (10-21-2011)
Inventory Control

  1. Ownership of a return in TS, JCR, EQMS, QMA, or LQMS is determined by the reviewer assigned to the return on ERCS. For this reason, returns should be assigned as soon as possible after they are received in the function.

  2. Once assigned, ERCS users may update the returns or generate reports listing the returns, if the user has been granted permission for the reviewer's AAC.

  3. Unassigned returns are not associated with a TS, JCR, EQMS, QMA, or LQMS AAC. In order to update or assign these returns, users must have permission for the PBC on the return and SBC of the TS, JCR, EQMS, QMA, or LQMS function (88700, 88705 or 88710).

  4. If a return needs to be assigned to a reviewer in another area, the current group should update the Technical Services Code (TSC) and then update the employee ID to a reviewer in the new area (PBC). Once re-assigned, only users with permissions for the new reviewer's AAC will be able to update the return. Users should follow local procedures for brokering work in TS.

  5. In addition to the AAC permission checks, ERCS also checks the status code on returns to determine if a return can be updated or listed on reports run by TS and JCR users.

  6. In addition to the AAC permission checks, ERCS also checks to see if returns have been selected for sample review to determine if a return can be updated or listed on reports run by EQMS, QMA, or LQMS users.

  7. In general, all cases subject to mandatory review are to be completed within 30 days of receipt.

4.7.7.10  (10-21-2011)
Reports

  1. For a complete list of reports available for TS and JCR users, refer to the ERCS Review Handbook.

  2. For a complete list of reports available for EQMS, QMA, and LQMS users, refer to the ERCS Sample Review Handbook.

  3. IRM 4.7.6, Reports, contains detailed descriptions of ERCS reports, recommended uses for the reports, and the recommended frequency for running the reports.

4.7.7.11  (10-21-2011)
ERCS Codes

  1. ERCS uses a combination of AIMS and ERCS codes for inventory control. The following codes are only defined on ERCS with the exception of the AAC, employee ID, and position code which are also used for the Summary Exam Time Transmittal System (SETTS):

    1. TS, JCR, EQMS, QMA, and LQMS AAC

    2. Suspense type and action date

    3. Reject reason

    4. Review and sample review employee ID

    5. Review type

    6. Sample review indicator

    7. Review position codes

  2. More information about these codes may be found in the Codes chapter of the ERCS Review Handbook, the Codes chapter of the ERCS Sample Review Handbook or in the Exhibits at the end of this IRM.

4.7.7.11.1  (10-21-2011)
AAC

  1. AACs are used in TS, JCR, EQMS, QMA, and LQMS for employee records and in TS and JCR for inventory control. Returns controlled on AIMS cannot be assigned to a TS or JCR AAC. ERCS only records can be assigned to a TS or JCR AAC as long as they remain in a TS status or in Status Code 90.

  2. The AAC on the employee record is part of the data extracted for SETTS. It is also used to validate time for reviewers. For example: Protection of Revenue Base (P of RB) "Q" time is only valid for employees assigned to SBC 88700.

  3. Users input a TS, JCR, EQMS, QMA, or LQMS AAC in order to extract returns for reports. A return is included on reports if the return is assigned to an employee who in turn is assigned to the AAC the user enters for the report, and the return meets any other report criteria.

  4. Unassigned returns are included on TS and JCR reports when the return PBC matches the report PBC.

  5. Unassigned returns are included on EQMS, QMA, and LQMS reports if the return PBC is supported by the PBC the user entered. See Exhibit 4.7.7-2 for the areas that are supported by each EQMS, QMA, and LQMS PBC.

  6. For all the reasons stated above, it is critical that the AAC on the employee records be kept current.

  7. New AACs are added to ERCS by the local AIMS/ERCS analyst.

4.7.7.11.2  (10-21-2011)
Suspense Type and Action Date

  1. The suspense type is a three digit ERCS code in the 500 - 599 range that can be associated with returns in TS statuses.

  2. Suspense types provide a consistent approach to effectively monitor workload and provide a basis for timely completion of work.

  3. Suspense types can be linked to a TS status code and/or a set number of days to be in suspense. When a user updates an ERCS record with a suspense type, the program automatically sets the status code and/or action date. See Exhibit 4.7.7-4 for a list of suspense types with their associated status codes and number of days.

  4. If a status is not listed for the suspense type in Exhibit 4.7.7-4, the status does not change when the suspense type is updated.

  5. If the number of days is not listed for the suspense type in Exhibit 4.7.7-4, the action date is not set by the program, and the user is required to enter it.

  6. When the action date is set by the program, it is set to a work day. So it is possible the action date could be one to two days different from the calculated date, if the calculated date falls on a weekend or a holiday.

  7. When a return is updated out of a TS status, the suspense type and action date are removed from the record.

  8. ERCS reports can be generated by a single suspense type or for all returns in suspense. Refer to IRM 4.7.6, Reports, or the Inventory Reports chapter of the ERCS Review Handbook for information on the Suspense Reports.

4.7.7.11.3  (10-21-2011)
Reject Reason

  1. The ERCS reject reason is a three digit code in the 500 - 599 range used to identify the reason returns are sent back to the group from TS and JCR. See Exhibit 4.7.7-5 for a list of reject reasons for TS and JCR.

  2. The reject reason must be input by a TS and JCR user when a return in a TS status is updated to a group or PSP status under Status Code 20.

  3. The "Cases Returned to Group" report is available to TS and JCR users to monitor returns sent back to the group. Refer to IRM 4.7.6, Reports, or the Inventory Reports chapter of the ERCS Review Handbook for information on this report.

  4. When a group user updates the return back to a TS status, the reject reason is removed from the ERCS record.

4.7.7.11.4  (10-21-2011)
Review and Sample Review Employee ID

  1. The ERCS employee ID is a four or five digit number generated by the program when a new employee record is added to ERCS. The employee ID is used to associate inventory in TS, JCR, EQMS, QMA, and LQMS with an employee.

  2. ERCS retains the employee assignment in TS or JCR in the review employee ID field and the employee assignment in EQMS, QMA, or LQMS in the sample review employee ID field.

  3. Inventory reports can be generated by the review or sample review employee ID.

4.7.7.11.5  (10-21-2011)
Review Type

  1. The review type is a two digit number defining the type of return. Use of this code allows returns in TS and JCR to be classified into sub-categories for better inventory control and to aid managers in monitoring an individual reviewer's workload. ERCS does not force input of the review type. Refer to local procedures to see if it is required in your area. See Exhibit 4.7.7-6 for a list of review types.

  2. The "Inventory Listing" report, when run by a TS and JCR user, can be sorted by review type.

4.7.7.11.6  (10-21-2011)
Sample Review Indicator

  1. The sample review indicator is a two digit number that allows returns to be classified into sub-categories for better inventory control. ERCS does not force input of the sample review indicator. Refer to local procedures in your area. See Exhibit 4.7.7-7 for a list of sample review indicators.

  2. The "Inventory Listing" report, when run by a EQMS, QMA, or LQMS user, can be sorted by sample review indicator.

4.7.7.11.7  (10-21-2011)
Position Code

  1. Position codes are used to determine if an employee should be required to input time in ERCS and, if so, to validate the employee's time. The position code is included in the data extracted for SETTS, so it is critical that the position code be kept current on ERCS.

4.7.7.12  (10-21-2011)
Sample Selection

  1. Returns are checked for sample review eligibility at the time the returns are checked into TS or Centralized Case Processing (CCP) (i.e. the status on the return is changed from Status Code 21, "In-transit to TS" , or from Status 51," In-transit to CCP" , to another status). In order to be eligible for selection, the return must meet the selection criteria and be the Nth eligible return. The "Nth" number is determined by the analysts for each EQMS, QMA, and LQMS site.

  2. When returns are selected for sample review, the user is prompted to print a sample selection sheet. This sheet should be attached to the front of the case file as a reminder that the case should be shipped to the address on the sample review sheet when the case is closed to Status Code 90. Refer to IRM 4.8.3, Technical Services - Examination Quality Measurement Staff (EQMS), for the sample selection criteria and the procedures for the sample selection process. Refer to The Correct and Display Records chapter of the ERCS Technical Reference Manual for the sample selection criteria for EQMS, QMA and LQMS functions.

  3. A return that has been selected for sample review may be deselected by the program if either of the following occurs:

    1. The return is transferred back to the group after a 90 - day letter has been issued.

    2. The return is updated to a TS suspense status.

  4. If a return is deselected for sample review, the sample selection sheet should be removed from the case file.

  5. See IRM 4.8.3, Technical Services Staff, Examination Quality Measurement Staff (EQMS), for more information about the sample selection process.

4.7.7.13  (10-21-2011)
Time Input

  1. ERCS validates all examination technical time for SB/SE and LB&I employees whether it is input into ERCS or into another system such as Issue Management System (IMS) and transferred to ERCS for validation.

  2. ERCS determines which employees are required to input examination technical time by the employee's position code on the ERCS employee record. If there is an exception for an employee, the AIMS/ERCS analyst can set an indicator, called "Ignore SETTS," on the employee record that causes ERCS to skip the employee when time is input for the group.

  3. The following position codes used in TS, JCR, EQMS, QMA, and LQMS require technical time to be entered on ERCS: 105, 106, 118, 206, 218, and 327. However, TS and JCR employees in Position Code 327, tax examiner, are currently not required to input time in ERCS. The employee's AIMS/ERCS analyst should turn the "Ignore SETTS" indicator on for these employees so the correct position code can be used without requiring the employee to charge technical time on ERCS.

  4. There are four types of time charges that can be entered on ERCS:

    • Direct Examination Time (DET)

    • Direct Review Time (DRT)

    • No-return DET

    • Non-DET

  5. DET is time charged to a return using the P of RB codes of "N" (no protection), "R" (related, non-protection time spent on a claim for refund), "P" (protection), or "S" (shelter). This time is included on Form 5344, Examination Closing Record. Although ERCS allows input of these codes for reviewers, an employee in TS and JCR would rarely input DET on a return. See IRM 4.4.12.4.39.1, What to include in Time, for details when a reviewer should charge DET.

  6. DRT is time charged to a return using the P of RB code of "Q" (review). This time is not included in the examiner's time on Form 5344. Time charges to DRT is associated on ERCS to a return and the activity code on the return, but the second segment code (SSC) is user entered and used to further break down the time charge into the review activity performed.

    Note:

    Technically P of RB codes are limited to "P"

    , "R" , and "N" . Users enter "S" and "Q" time codes on ERCS during time input under the header "P of RB" so they are often referred to as P of RB codes.

  7. No-return DET is time applied to activity codes in the range 500 - 599. Some of these activity codes can be set up as inventory control records on ERCS, but there is no associated AIMS record.

  8. Non-DET, also referred to as "Below the line time" , is time applied to administrative activities, training, leave, etc. The activity codes associated with non-DET charges are in the range 600 - 899.

  9. Refer to Document 6036 for a complete list of activity codes and DRT second segment codes.

Exhibit 4.7.7-1 
TS, JCR, EQMS, QMA, and LQMS AACs

PBC SBC EGC Description
201 - 207 88700 1xxx and 2xxx with the exception of 14xx and 24xx SB/SE TS AACs
207 88700 1408, 2408 EQMS AACs
212 88700 1410 QMA AAC
306 88705 1xxx LQMS AACs
306 88710 1954, 1956 JCR AACs

Exhibit 4.7.7-2 
EQMS, QMA, and LQMS PBCs

PBC Organization Location Areas Supported
207 EQMS Los Angeles, CA SB/SE PBCs 201, 204, 207
207 EQMS Oakland, CA SB/SE PBCs 202, 203, 205, 206
212 QMA Cincinnati, OH Specialty Tax PBCs 212 - 214
315 LQMS Manhattan, NY International PBC 315

Exhibit 4.7.7-3 
TS, JCR, EQMS, QMA, and LQMS Position Codes

Position Code Description
105 Quality Assurance Management - LB&I only; used for managers in JCR and LQMS groups
106 Tech Support Quality Management Staff (QMS) - SB/SE only; used for TS and EQMS managers in Revenue Agent (RA) groups
118 Quality Assurance Reviewer/Technical Coordinator; used for reviewers in RA groups (includes EQMS, QMA, and LQMS)
206 Tech Support (Quality Measurement Staff (QMS)) - SB/SE only; used for TS, JCR. EQMS, and QMA managers in Tax Auditor (TA) and Tax Compliance Officer (TCO) groups
218 Quality Assurance Reviewer/Technical Coordinator; used for reviewers in TA and TCO groups (includes EQMS and QMA)
327 Tax Examiner; used for tax examiners in RA, TA and TCO groups
400 Non - 4502 position code - ERCS only; used for clerical personnel, and for local or national analysts

Exhibit 4.7.7-4 
TS Suspense Types

Status Suspense Type Days Description
23 500 5 Examination Quality Measurement Staff (EQMS)
22 501 10 Protested to Appeals
23 502 15 LB&I Quality Management System (LQMS)
22 503 10 Taxpayer Advocate
N/A 504 30 30 Day Suspense
N/A 506 45 45 Day Suspense
N/A 508 60 60 Day Suspense
N/A 510 90 90 Day Suspense
N/A 518 10 10 Day Suspense
N/A 519 15 15 Day Suspense
20 520 45 Employee Audits/Special Processing Returns
N/A 524 105 105 Day Suspense
N/A 525 180 180 Day Suspense
N/A 526 365 365 Day Suspense
22 528 45 Interest/Penalty Abatement - 30 Day Cases
24 529 195 Interest/Penalty Abatement
22 531 45 Innocent Spouse - 30 day
22 532 45 OIC (Offer in Compromise) - 30 Day Cases
24 534 105 Stat Notices Issued-Field
24 535 105 Stat Notices Issued-Office
24 537 105 Innocent Spouse-Final Determination
24 538 105 Section 7436 Final Notice Determination
24 540 165 Statute Notice of Deficiency - Out US-Field
24 541 165 Statute Notice of Deficiency - Out US-Office
25 542 45 Cases Sent to Counsel for Review
25 544 45 Preparation Stat Notice-Field
25 545 30 Preparation Stat Notice-Office
27 570 5 In-Transit to Coordinator
N/A 571 15 Non TEFRA (Tax Equity and Fiscal Responsibility Act)
27 572 30 TEFRA Various
N/A 573 45 TEFRA Various
27 574 60 TEFRA Various
28 575 75 60 Day Letter Issued
28 576 105 TEFRA Various
28 577 165 Final Partnership Administrative Adjustment (weekend)
31 578 180 Suspended - Litigation
30 590 365 Form 1254, Examination Suspense Report, Suspense Cases- Form in Case
32 591 180 General Fraud Suspense
36 592 180 Grand Jury Suspense
39 593 30 Bankruptcy
38 594 180 Suspense - Various
38 595 365 Suspense - Various

Exhibit 4.7.7-5 
TS Reject Reasons

Reject Reason Definition
500 Returned from Technical Services
501 Returned for Correction
502 Returned per Group Request
503 Returned for Further Development
504 Exam Depth and Records Question
505 Technical Law Questions
506 Penalty Questions
507 Work Papers Questions
508 Report Writing Questions
509 Statute Problems
510 Claim Procedures
511 From Appeals
512 TEFRA Questions
513 From Joint Committee
514 90 - Day Reconsideration
515 Pre 90 - Day Reconsideration
516 From Area Counsel
517 Advisory
518 AIMS/ERCS Problem
519 Transfer Problem
520 Returned from TS for Taxpayer Request
521 To Taxpayer Advocate Office (TAO)
522 Quality Attributes
523 Package Audit Questions
524 Civil Settlements
525 Consideration of Large Unusual Questionable (LUQ) Items
526 Probes for Unreported Income
527 30 - Day Letter
528 Barred Statute
529 Other

Exhibit 4.7.7-6 
Review Types

Review Type Description
00 In-Transit/Unassigned
01 Employee Audit
02 Innocent Spouse Review
03 National Research Program (NRP)
04 Joint Committee
05 Political Appointees
06 Barred Statutes
07 Reconsideration and Claims
08 Interest/Penalty Abatement Review
09 Restricted Interest
10 Offers in Compromise Review
11 Conditions of Probation (COP)
12 Closing Agreements (non - GSI (Government Services Information Infrastructure))
13 Informant Claims
14 Jeopardy/Terminations
15 LQMS
16 Field Assistance
17 Subject Matter Expert (SME) Duties
18 Training - TS Personnel
19 Penalties - Preparer
20 Earned Income Tax Credit (EITC)
21 Transferee/Transferor
22 Taxpayer Advocate
23 Employment Tax
24 Return from Appeals/Counsel
25 In-Transit to Coordinator
26 Non-TEFRA Flow-Through
27 Local Definition
28 Local Definition
29 Local Definition
30 Agreed Son of Boss (SOB)
31 TEFRA-Suspended-Litigation
32 Protested to Appeals
33 EQMS
34 Statute Notices of Deficiency - Field
35 Statute Notices of Deficiency - Office
36 Partnership Option Portfolio Securities (POPS)
37 Personal Investment Company (PICO)
38 Section 7436 Final Notice Determination
39 American Disabilities Act (ADA)
40 Administrative Adjustment Request (AAR)
41 Revenue Procedure 92-29
42 Cases Sent to Counsel
43 Fugitive Cases
44 1254 Suspense
45 Fraud
46 Grand Jury
47 Hobby Losses - 183
48 Bankruptcy
49 Protective Claims
50 Section 1033
51 Appeals & Counsel Assistance
52 Hurricane Katrina
53 Reserved (National)
54 Claim for Refund Suits
55 Combat Zone
56 Non-AIMS Case Review
57 Technical Coordinator
58 Third Party Contact
59 Executive Compensation
60 National Partnership Council (NPC) Key Case
61 NPC Investors
62 Domestic Trusts
63 Offshore Voluntary Disclosure Initiative (OVDI) / Voluntary Disclosure Program (VDP)
64 S Corps/Employee Stock Ownership Plans (ESOP)
65 Internal Revenue Code (IRC) 419
66 Notice 2003-81
67 Virgin Island Economic Development Credit (VI EDC)
68 Offshore Employee Leasing (OEL)
69 Home-Based Business
70 Last Chance Compliance Initiative (LCCI) / Offshore Voluntary Compliance Initiative (OVCI)
71 Conservation Easement
72 Supporting Organization Settlement
73 Reserved (Alternative Resolution Implementation (ARI))
74 Global Settlement
75 TEFRA - Agreed
76 TEFRA - No-Change < 45 Days
77 TEFRA - No-Change > 45 Days
78 TEFRA - 60 Day Letter Prep
79 TEFRA - Campus 60 Day
80 TEFRA - 60 Day Letter Issued
81 TEFRA - Final Partnership Administrative Adjustment (FPAA) Prep
82 TEFRA - AAR Disallowance
83 TEFRA - FPAA Issued
84 TEFRA - Waiting for Campus
85 TEFRA - Investor Statutory Notice of Deficiency (SND) Preparation
86 TEFRA - Investor SND Issued
87 TEFRA - Other Action Required
88 TEFRA - Waiting for Centralized Case Processing (CCP)
89 TEFRA - Waiting for Taxpayer (TP) /Power of Attorney (POA)
90 TEFRA - (Reserved)
99 All Other Cases Not Listed Above

Exhibit 4.7.7-7 
Sample Review Indicators

Sample Review Indicator Definition
00 No Sample Indicator
10 Suspense - Consistency Case
11 Suspense - Manager Case Review
12 Suspense - Manager Approval Case
13 Suspense - Potential Disclosure Issue
14 Suspense - Charge Backs
15 Suspense - Other
20 Unpostables
30 Rejects
40 Excess Inventory
50 Site Transfer
70 - 89 Local Definition

Exhibit 4.7.7-8 
Technical Services Codes

The Technical Services Code (TSC ) is assigned when a return is closed to Status Code 21 on ERCS based on the address the user selects for the Form 3210. The TSC may be updated when a return is moved out of Status Code 21 to another TS status on ERCS. The TSC is used to determine the location of unassigned returns in a TS status.

TSC Description
003 North Atlantic Group 2
008 North Atlantic Area Group 1
032 TEFRA - East
042 TEFRA - East
043 TEFRA - East
051 North Atlantic Area Group 4
053 TEFRA - East
063 North Atlantic Area Group 3
065 North Atlantic Area Group 5
074 Central Area Group 7
094 TEFRA - East
095 Central Area Group 6
096 Central Area International Group 8
097 Central Area Group 8 - (K. O. P.) (King of Prussia)
098 Central Area Group 6 - Pittsburgh
109 South Atlantic Area Group 11
110 South Atlantic Area Group 14
111 TEFRA - East
120 South Atlantic Area Group 12
139 South Atlantic Area Group 12
153 South Atlantic Area Group 13
154 South Atlantic International Group 18
162 South Atlantic Area Group 17
164 South Atlantic Area Group 15
168 Central Area Group 9
170 South Atlantic Area Group 15
173 South Atlantic Area Group 17
176 TEFRA - East
182 Central Area Group 9
192 Central Area Group 10
193 TEFRA - East
206 Central Area Group 10
210 Central Area Group 6
214 Central Area Group 9
216 Central Area Group 6
221 Central Area Group 9
228 Central Area Group 9
246 Midwest Group 19
247 TEFRA Midwest
271 Midwest Area Group 20
293 Midwest Area Group 21
294 TEFRA - Midwest
328 Gulf States AreaGroup 24
342 Reserved
344 Reserved
347 Gulf States Area Group 26
362 Gulf States Area Group 25
363 TEFRA - Western
365 Gulf States Area Group 25
369 Gulf States Area Group 26
415 Midwest Area Group 22
416 TEFRA - Midwest
435 Midwest Area Group 23
436 TEFRA - Midwest
452 Reserved
486 Gulf States Area Group 28
487 TEFRA - Western
491 TEFRA - Western
493 Gulf States Area Group 28
507 Gulf States Area Group 29
531 Gulf States Area Group 27
532 TEFRA - West Dallas POD
568 Gulf States Area Group 29
595 Western Area Group 32
596 TEFRA - Midwest
609 Western Area Group 31
610 TEFRA - Midwest
621 Gulf States Area Group 26
754 Reserved
777 TEFRA - Midwest
778 Western Area Group 33
789 California Area Group 38
790 California Area Group 38
792 California Area Group 39
795 California Area Group 39
796 TEFRA - Western
797 TEFRA - Western
799 California Area Group 38
811 Laguna Nigel Group 35
817 Laguna Nigel Group 34
818 Laguna Nigel Group 35 - TCO
819 TEFRA - Western
840 California Area Group 37
843 TEFRA - Western
844 California Area Group 36
901 LB&I Joint Committee Review Group

Exhibit 4.7.7-9 
TS Second Segment Codes

The second segment code is an extension of the three digit activity code and is used to further break down the time applied to a return into sub-categories for better monitoring. The following Second Segment Codes are valid for time charges with P of RB "Q" time.

Second Segment Codes Definitions
641 Case Review
643 Notice of Deficiency - (90 - Day)
646 30 - Day Letter Activities
648 Abatement Interest
671 Problem Resolution Program Coordinator
720 Offers in Compromise
732 Innocent Spouse Review


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