4.7.8  Centralized Case Processing

Manual Transmittal

May 13, 2011

Purpose

(1) This transmits revised IRM 4.7.8, Examination Returns Control System (ERCS), Centralized Case Processing.

Material Changes

(1) Editorial changes were made and text was changed throughout to replace Case Processing Support to Centralized Case Processing

(2) References to "tax examiners with and without inventory" was changed to "tax examiners" .

(3) References to LMSB were changed to LB&I (Large Business and International).

(4) Links were updated or added as needed.

(5) IRM 4.7.8.1.1 was added to include generation of Form 3210 and managerial approval of statute updates are tasks performed in CCP.

(6) IRM 4.7.8.1.2, CCP Employee Records and Permissions, was added.

(7) IRM 4.7.8.3 was updated to remove "requesting returns" as a task performed in CCP.

(8) IRM 4.7.8.3 (4) was updated to add references to the In Transit Report and the Suspense Report.

(9) IRM 4.7.8.3 (5) was updated to add references to the "p" on reports that denotes pending managerial approval.

(10) IRM 4.7.8.4 was updated to add a notation of the importance of assigning work in CCP.

(11) IRM 4.7.8.4.1 (c) was added to include working AIMS Error Reports.

(12) IRM 4.7.8.5 was updated to include additional tasks performed in CCP.

(13) IRM 4.7.8.5.1 through Section 4.7.8.5.6 was added to explain the work flow through CCP.

(14) IRM 4.7.8.6 was added to discuss the ERCS only codes used in CCP.

(15) IRM Exhibit 4.7.8-1 was updated for code changes.

(16) IRM Exhibits 4.7.8-2 through 4.7.8-4 were added.

Effect on Other Documents

IRM 4.7.8 dated October 1, 2003 is superseded.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

(05-13-2011)

Charlestine D. Hardy
Director, Examination Planning and Delivery
Small Business/Self Employed

4.7.8.1  (05-13-2011)
Overview

  1. This section contains information and procedures for the territory managers, support managers, tax examiners, and clerical staff.

  2. The instructions for Centralized Case Processing (CCP) users for navigating the ERCS programs can be found in the ERCS CCP Handbook. The purpose of this section is to provide policy guidelines and procedures for the use of ERCS in Centralized Case Processing.

4.7.8.2  (05-13-2011)
CCP User Capabilities

  1. CCP users can:

    1. Add or update employee information for CCP employees

    2. Generate reports of returns in CCP statuses

    3. Research and display records

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

    5. Generate a Form 895, Notice of Statute Expiration

    6. Generate a Form 3210, Document Transmittal

    7. CCP managers can approve ASED updates to returns in their authorized Audit Information Management System (AIMS) Assignee Code (AAC).

4.7.8.3  (05-13-2011)
CCP Employee Records and Permissions

  1. In order to run ERCS programs, a user must have the following:

    1. A valid login and password for the ERCS server

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

    3. Permissions records

  2. 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.

4.7.8.3.1  (05-13-2011)
Employee Records

  1. Employee records for CCP users must be added by another ERCS user with update permission for the AAC to which the new user will be assigned. Details on adding a CCP employee record to ERCS can be found in the Employee Records chapter of the ERCS CCP Handbook. The user should enter all information accurately and completely.

  2. CCP users are added to ERCS in a CCP campus primary business code of 296, 297, or 298, the secondary business code of 89700 and an ERCS defined employee group code. The employee group codes for CCP users are in the 3xxx series. These three codes make up the AAC of the employee's assignment on ERCS.

  3. CCP users utilize Position Codes 302 - 307, 310 and 400. See Exhibit 4.7.8-3 for the definitions of these position codes.

  4. ERCS employee records should be inactivated when the employee leaves the service or transfers within the service to a non-ERCS position.

  5. ERCS employee records should be updated to the new AAC if the employee transfers from CCP to another ERCS position outside of CCP.

4.7.8.3.2  (05-13-2011)
Permission Records

  1. A CCP user's permissions are added by a CCP AIMS/ERCS analyst. Permission records may be added before or after the employee record is added.

  2. CCP users are generally given read and write permission for the CCP campus.

  3. CCP managers are generally given first level approval permission for the CCP campus.

  4. Permission records should be deleted when they are no longer needed.

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

4.7.8.4  (05-13-2011)
Security

  1. ERCS operates on the principle that users should only change data on returns under the user's control. Consequently, a CCP user may change information only on returns in CCP status codes within the AACs in which the user has permission. Throughout ERCS, error messages appear when a user attempts to update returns for AACs or status codes for which the user does not have permission.

  2. Because of the potential for section 1204 violations, reports generated in CCP that contain any Record of Tax Enforcement (ROTER) information are to be shared only at the manager level or higher. 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 in CCP must be aware of the potential for Unauthorized Access of Taxpayer Accounts (UNAX) violations from the use of ERCS. As with Integrated Data Retrieval System (IDRS) and AIMS, data from ERCS should be accessed only for IRS business purposes. No attempt should be made to access the user's own social security number (SSN) or that of a spouse. If the user's personal SSN or that of a 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.

4.7.8.5  (05-13-2011)
Approval Authority

  1. Updates to returns in CCP requiring managerial approval are approved by a CCP manager. Types of updates by users in CCP that require approval are:

    • Changes to the statute of limitations

    • Non-examined closures of returns generating a Command Code (CC) AMSOC

      Note:

      Examined and non-examined closures of returns in CCP are input into AIMS bypassing ERCS. During the weekly AIMS to ERCS processing, the ERCS returns are closed.

  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 CCP that are still pending managerial approval in the group for the transfer. Returns in transit to CCP can be monitored using the "In Transit Report" or by generating the "Suspense Report" for Suspense Type 498. Both reports are 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.

4.7.8.6  (05-13-2011)
Role and Responsibilities of CCP Managers

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

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

    2. Ensuring prompt assignment of incoming cases

      Note:

      Unassigned returns are associated with the CCP campus by the Processing Campus Code (PCC) on the return. Returns are not associated with a CCP group until the returns are assigned to a CCP employee on ERCS.

    3. Ensuring work is evenly distributed among their employees

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

    5. Ensuring users timely and accurately resolve any ERCS rejects

    6. Monitoring statuses and statutes of all CCP cases

    7. Ensuring ERCS reports are generated timely

    8. Ensuring prompt closing of all outgoing cases

    9. Ensuring separation of duty is being maintained

    10. Ensuring timely reporting of any ERCS user or system related problems to the CCP AIMS/ERCS analyst

4.7.8.7  (05-13-2011)
Role and Responsibilities of CCP Users

  1. CCP users are defined as tax examiners and clerical support staff. Responsibilities of CCP users include but are not limited to:

    1. Ensuring ERCS is updated timely for all changes to returns

    2. Ensuring any ERCS rejects from the daily ERCS to AIMS upload are corrected timely

    3. Ensuring returns listed on AIMS Error reports generated from the weekly AIMS to ERCS download are researched and corrected timely

    4. Generating the ERCS inventory and monitoring reports

    5. Ensuring any ERCS user or system related problems are reported to the CCP AIMS/ERCS analyst timely

4.7.8.8  (05-13-2011)
Work Flow and Processes

  1. Work flow in CCP begins with receipt and control into CCP and ends with case closures.

  2. After receipt in CCP, cases should be updated out of Status 51 within 3 days, the Form 3210 acknowledged with a receipt sent back to the field, and the Form 3198, Special Handling Notice for Examination Case Processing, analyzed for case assignment.

  3. The ERCS record is checked to verify it is controlled on AIMS, if AIMS control is required.

    Note:

    ERCS penalty records are not controlled on AIMS.

  4. The statute should be checked and updated as necessary on the ERCS record.

  5. The following values should be verified and updated as necessary on the ERCS record via the Integrated Automation Technologies (IAT) system:

    1. Status code

    2. Type suspense

    3. Action date

    4. CCP employee ID

    5. Date in CCP

    6. Program number

  6. Returns are selected for sample review on ERCS as they are updated out of Status 51. If a return is selected for sample review, the sample selection sheet should be printed and attached to the front of the case file.

4.7.8.8.1  (05-13-2011)
Field Office Resource Team

  1. The Field Office Resource Team or FORT is comprised of revenue agents, tax auditors, and tax compliance officers. The FORT serves as a liaison between CCP and the Examination groups in the field.

  2. If CCP encounters issues with returns that cannot be resolved in CCP, the returns are sent to the FORT.

4.7.8.8.2  (05-13-2011)
Examined, Non-streamlined Case Closures

  1. Examined, non-streamlined cases are worked, coded, and the Form 5344, Examination Closing Record, is updated. Then the cases are forwarded to a remote terminal operator to be closed on AIMS.

4.7.8.8.3  (05-13-2011)
Examined, Streamlined Case Closures

  1. Examined, streamlined case closures are identified by the notation on Form 3198 as being closed on the Report Generation System (RGS). These returns are routed to the streamline closure team for closure.

4.7.8.8.4  (05-13-2011)
Non-examined Case Closures

  1. CCP employees perform the following processing for non-examined case closures based on whether the return is paperless, scanned or an original or copy of the tax return.

4.7.8.8.4.1  (05-13-2011)
Paperless Non-examined Closures

  1. Form 5351, Examination Non-Examined Closings, and Form 3210 are faxed into the Campus FORT or the designated CCP team.

  2. Form 5351 and Form 3210 are stamped, validated and acknowledged. After acknowledgement, Form 3210 is mailed and/or faxed back to the originator. Form 5351 is maintained for processing the non-examined closures.

  3. The Taxpayer Identification Number (TIN) listed on the Form 5351 is input into the IAT system. IAT updates the case from Status 51 to Status 90 closure. No source document folder is needed for Files.

4.7.8.8.4.2  (05-13-2011)
Scanning Process Form 5546, Examination Return Charge-Out Sheet, Bar Code

  1. Cases are updated from Status 51 to 57 and the Primary Campus Code (PCC) is verified and updated as necessary.

  2. Cases are separated by blocking series and closed to Status 90 via CC AMSOC on AIMS using the IAT system. IAT can accept and close up to 22 cases at one time with the exception of Disposal Code 35 returns which must be closed separately.

  3. IAT generates a closure sheet for preparation of Form 6502, Employee Source Document Folder Label, for Files.

4.7.8.8.4.3  (05-13-2011)
Original Return - No Form 5546

  1. The same work flow in IRM 4.7.8.8.4.2 is followed for closing an original tax return when there is no Form 5546 plus the additional step below.

  2. An AMDISA print is generated upon closure. The AMDISA print includes the document sequence number, input operator number, closing date and disposal code.

4.7.8.8.5  (05-13-2011)
IAT Closures

  1. Closures done through IAT close the AIMS record. The AIMS closure causes the closure of the ERCS record during the next weekend when AIMS to ERCS batch processing is run.

4.7.8.8.6  (05-13-2011)
Special Closures

  1. Returns that have been selected for sample review should be sent to sample review instead of files when the return is closed. Normally, the returns should be shipped to the address on the sample review sheet that is attached to the front of the case file.

4.7.8.9  (05-13-2011)
ERCS Codes

  1. ERCS uses a combination of AIMS and ERCS codes for inventory control records and employee records. The following codes are defined on ERCS only. More information about these codes may be found in the Codes chapter of the ERCS CCP Handbook, or in Exhibit 4.7.8-1, Exhibit 4.7.8-2, or Exhibit 4.7.8-3.

    1. Suspense type and action date

    2. Reject reason

    3. CCP employee ID

    4. Date in and date out of CCP

    5. Program numbers

    6. CCP AACs

    7. CCP position codes

    8. ERCS penalty Master File Tax (MFT) codes

4.7.8.10  (05-13-2011)
Reports

  1. For a complete listing of ERCS reports available for CCP users, please refer to the ERCS CCP Handbook.

  2. IRM 4.7.6, Reports, contains detailed descriptions as well as recommended uses and frequency of generating reports available through ERCS.

Exhibit 4.7.8-1 
CCP Program Numbers and Suspense Types

Program numbers are used in CCP to classify types of work. The only association between the program number and any other ERCS codes (such as status code, suspense type or number of days in suspense) is by user association. ERCS does not enforce consistency between the program number and the other values listed in the chart below.

Status Suspense Days Program Description Comments
51 498 10 --- In-Transit There is no program number associated with returns in-transit
52 413 45 10062 Estate, Gift and Excise Cincinnati only - Form 706, Form 709
414 45 10058 Claim Includes Disposal Code 34
416 45 10111 Special Processing  
417 45 10720 Excise Cincinnati only -Form 720
418 45 10940 Employment - Stand Alone Cincinnati only - Form 940 and Form 941
476 45 10941 Employment - Tag Along Cincinnati only - related return
53 420 60 10121 Restricted Interest per Form 3198
422 60 10218 Complex Interest / Net Rate per Form 3198
423 60 16404 6404(g) - 2nd Notice Date *See note below
54 430 10 10052 Expedite Processing  
431 10 10053 Statute within 120 days Short statute
432 10 14760 Over $100,000 Agreed, unpaid
433 10 10219 Expedite Complex Interest per Form 3198 (also includes Net Rate)
435 10 10054 VPN Project Virtual Private Network (VPN) / Telephone Excise Tax Refund (TETR)
436 10 10055 Restricted Interest - Expedite when short statute or over $100,000
55 440 45 10073 Pipeline Routine closure
441 45 10303 Unagreed Default Stat Notice, from Technical Services
56 452 60 10141 Suspense SFR  
453 60 10531 Suspense-other Disaster or other projects
57 460 45 10090 Survey Non-examined disposal codes except 34
10092 Paperless Survey Non-examined paperless surveys
58 470 60 10996 Special Projects Cincinnati only

*If 6404(g) is checked on Form 3198 with or without a date or money on a single year, the case is a single waiver 6404(g). It becomes a Pipeline case. If 6404(g) is checked on Form 3198 with dates on 1st and 2nd notice date line, the case is not a single waiver and it becomes a Restricted Interest case. If 6404(g) is checked on Form 3198 with or without a date or money and not applicable is also checked, the case is not a 6404(g). It becomes a Pipeline case.

Exhibit 4.7.8-2 
CCP Reject Reasons

ERCS reject reasons are associated with returns sent back to the group from CCP. When the group sends the return back to CCP, the reject reason is removed from the return.

Reject Reason Definition
400 AIMS/ERCS Problem
401 Reject to Group
402 TC 976/977 Amended Return
404 Form 5344 Missing or Incomplete
405 Freeze Code on AIMS
406 Tax Mis-match on Report/Trans.
412 Partial Assessment Completed
413 Telephone Group Request
414 Group Request
416 Error on Report/Missing Report
417 PCS Controlled:
418 Penalty Computation Incorrect/Incomplete
424 Other
427 Delinquent Return/SFR Problem
432 Sent to CCP in Error
436 Missing Letter
438 Non-examined Closure Problems
439 Transfer Problems
441 To PSP
442 To Tech Services
444 Related Return Problems
451 Return not on AIMS
452 Controlled in Another Area/PBC

Exhibit 4.7.8-3 
CCP Position Codes

The table below lists the valid position codes and grade ranges used in ERCS for CCP employee records.

Position Code Definition Grade
302 Operations Manager 07-13
303 Manager 06-13
304 Management Analyst/Functional Automation Coordinator 05-13
305 Lead Tax Technician 05-09
306 Tax Compliance Officer/Revenue Agent 05-13
307 Tax Examiner 05-10
308 RESERVED 07-11
309 RESERVED 02-08
310 Clerical Staff 02-06
400 Program Analyst/Tax Analyst 03-16

Exhibit 4.7.8-4 
Processing Campus Codes (PCC)

Returns closed to Status 51 on ERCS are assigned a PCC by the program based on the PBC on the return using the following correlations. The PCC determines the ownership and location of unassigned returns in CCP.

PCC Definition Servicing Returns for Area/Industry
17 Cincinnati Campus 212 - 214, 315
29 Ogden Campus 301-307
49 Memphis Campus 201-207, 217

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