July 22, 2011
(1) This transmits revised IRM 4.46.1, LB&I Guide for Quality Examinations, Overview.
(1) Eliminated references to Joint Audit Planning Process in IRM 126.96.36.199 and Exhibit 4.46.1-1.
(2) Defined Quality Examination Process in Exhibit 4.46.1-1.
(3) Updated the description of the Disclosure Office in Exhibit 4.46.1-1.
(4) Hyperlinks updated throughout.
(5) Removed all references to Planning, Quality, Analysis, and Support (PQAS).
(6) Replaced references to "Large and Mid-Size Business" and "LMSB" with "Large Business and International" and "LB&I" , respectively.
Cheryl P. Claybough
Director, Pre-Filing and Technical Guidance (PFTG)
Large Business and International Division
Part 4, Chapter 46, LB&I Guide for Quality Examinations, includes procedures for all LB&I cases, both Coordinated Industry Cases (CIC) and Industry Cases (IC). Some procedures pertain only to CIC examinations, while others pertain only to IC examinations, but most of the procedures set out in this chapter pertain to both. Judgment must be applied as to the extent that procedures apply to various cases. For instance, the examination plan, Form 4764, is to be used for both CIC and IC taxpayers. However, the extent to which the plan is used and degree of detail included in the plan for each case will depend upon the size of the case, the complexity, and other factors. All procedures in this IRM apply to both CIC and IC examinations unless otherwise stated.
Team managers are concerned with the complex problems inherent in planning and managing both CIC and IC examinations. This includes properly fragmenting the examination for a multi-agent approach and assigning specific examination work to each team member (including agents from other offices), and directing, controlling, and evaluating the examination. The manager must be completely knowledgeable about the case (taxpayer and returns), and be involved in the examination as it progresses in order to make any necessary changes in the examination plan.
All team members must perform their professional responsibilities in a way that supports the IRS Mission. This requires team members to provide top quality service and to apply the law with integrity and fairness to all.
Taxpayers should receive quality customer service. Team members should assist taxpayers in solving any tax problems identified during an examination, even if the problems are not associated with the examination. This IRM emphasizes problem solving and one-stop service through the one-case concept.
Team managers are expected to demonstrate their leadership on the examination site and to develop the relationships necessary to coordinate the examination across Industries and Operating Divisions and with Counsel when appropriate.
The following sections are designed to address the particular complexities of LB&I examinations and the unique responsibilities they impose on team managers and examination teams. The sections are composed of suggestions and guidelines that will be of assistance to team managers and examination teams in satisfying their responsibilities and in orienting new team members in LB&I examination concepts and techniques. The guidelines contained here are not all inclusive and are not intended to replace or limit individual initiative in developing techniques in the management and examination of cases. Additional information on conducting a LB&I examination can be found in the guide prepared for taxpayers Understanding the LB&I Examination Process
Each of the sections in Chapter 46 is briefly discussed below.
Administrative Matters and Annual Compliance Planning (IRM 4.46.2) – This chapter sets out the Annual Compliance Process for LB&I and describes the responsibilities of each office within LB&I contributing to the development of the Compliance Plan. This IRM section also contains the LB&I point computation criteria used to identify cases as CIC or IC. The purpose of the Annual Compliance Plan and the LB&I point computation criteria is to ensure that LB&I applies its resources in the most efficient manner to reduce taxpayer burden, increase customer satisfaction and improve business results.
Planning the Examination (IRM 4.46.3) - This chapter sets out the Quality Examination Process in the LB&I Examination Program. It emphasizes the use of risk analysis, Examination Planning and currency initiatives in LB&I. There is a detailed discussion of situations where examination records are in a foreign country. Procedures for requesting foreign travel and provisions for dealing with foreign governments are provided. Finally, it also provides guidance for requesting the participation of international examiners during the examination of tax returns of LB&I multinational corporations. A major emphasis is placed on the inclusion of the taxpayer and other stakeholders throughout the entire planning process and the leadership role expected to be played by the team manager.
Inspection and Fact Finding (IRM 4.46.4) – A significant portion of this chapter covers examination techniques in detail. The application of penalties is given special attention in this chapter to help ensure uniform and sustainable application of penalties. Procedures are set out for requesting information to perform the examination using the Information Document Request (IDR) Management Process.
Issue Development, Proposal and Resolution (IRM 4.46.5) – This chapter covers the development of issues through their resolution. It emphasizes that it is critical for LB&I examinations to be as current as possible. In addition, this chapter describes issue resolution tools that will assist the team manager in resolving issues at the group level. These tools will contribute overall cycle time reduction and improve customer satisfaction.
Workpapers and Reports (IRM 4.46.6) - This chapter sets out the various procedures for preparation of workpapers and reports.
Post Examination Activities (IRM 4.46.7) – This chapter sets out activities that must be performed at the end of an examination including review of reports, review and disposition of workpapers, evaluation of team members’ performance, and stresses the involvement of all stakeholders in the post-examination critique.
Exhibit 4.46.1-1, Glossary of Terms lists many terms used in the following sections. The list is not all inclusive but should be useful to new LB&I team members.
Exhibit 4.46.1-2, Index of Forms, describes the forms which are most frequently used by team managers and examination teams. This exhibit also lists the appropriate location in the IRM where the use of the form is described.
|Administrative File||A file containing the tax returns, Revenue Agents’ Report (RAR), protest, rebuttal, workpapers and other information for each LB&I taxpayer. Administrative files may consist of several boxes of information.|
|Administrative Procedures Form 13327||This is the LB&I Quality Measurement System Administrative Procedures Self-Certifying Check Sheet required to be used on all LB&I examinations|
|Audit Information Management System (AIMS)||The Audit Information Management System (AIMS) is a computer system used by Appeals, Examination, and TE/GE to control returns, to input assessment/adjustments into Master File and to provide management reports. IRM 4.4 covers Examinations’ use of AIMS and describes the data elements for Audit Information Management Systems (AIMS).|
|Area Counsel||Field attorneys in the LB&I Division of the Office of Chief Counsel, the division dedicated to providing legal services to the LB&I Operating Division. Area Counsel is the primary Counsel point of contact for LB&I. Area Counsel is also known as Local Counsel.|
|Assistance Examination||An examination that utilizes team members assigned to the same industry, but located in a different territory or work group. Team members providing assistance can be located in the same or a distant geographic area.|
|Assistant Team Manager||The front line manager in LB&I providing assistance or support to another LB&I case, often located in another geographic area or industry.|
|Associate Office Counsel||Associate Offices in Washington, DC issue technical guidance such as Revenue Rulings, Technical Advice Memorandum (TAMs), Technical Expedited Advice Memoranda (TEAMs), and Chief Counsel Advice (CCA).|
|Audit Techniques Guides (ATG)||The Audit Techniques Guides (ATGs) are documents prepared by PFTG or other issue owners that identify steps required to examine specific issues or industries. These Guides contain examination techniques, common and unique industry issues, business practices, industry terminology and other information to assist examiners in performing examinations. ATG Link|
|Audit Standards||Work standards and measurements that have been developed to ensure that the examination team produces a quality product. These standards are intended to improve the examination process, but do not measure individual performance.|
|"Audit Tools" Website||An LB&I internal website that provides examiners with relevant and commonly used tools in the examination process (ex. current announcements, forms, publications, letters, notices, job aids, IRM sections relevant to policies, procedures, and rules of engagement, and other job aids). Audit Tools Link|
|Balanced Measures||The Balanced Measures: Customer Satisfaction, Business Results and Employee Satisfaction link the organizational performance to the IRS mission and goals.|
|Bankruptcy Coordinator||An LB&I analyst in Examination Policies and Procedures who provides support to teams auditing taxpayers with bankruptcy features. Bankruptcy procedures are found in IRM 188.8.131.52. See also LB&I Bankruptcy Link.|
|BNA Audit Analyzer||A commercial software product licensed by LB&I for preparation of reports of C corporation (Form 1120) returns. BNA Audit Analyzer Link.|
|BRTVU||One of several IDRS command codes available in Corporate Files On-Line (CFOL) used to generate a business return, that shows all transcribed lines as reflected on the original return. It will not reflect any subsequent adjustments or duplicate filings.|
|Business Systems Planning (BSP) for LB&I||The Business Systems Planning (BSP) is a headquarter’s LB&I function with broad responsibilities for hardware and software needs of LB&I teams. The BSP identifies the LB&I business needs and the technological solutions to those needs. BSP Link|
|Captive and Offshore Insurance Transactions||A group of insurance issues controlled by a Technical Advisor involving complex offshore transactions. Captive and Offshore Insurance Transactions link|
|CENTRA||An interactive software tool used for conducting Continuing Professional Education (CPE) and non-CPE training and other group communications, designed by Saba.|
|Certified Public Accountant (CPA)||Certified Public Accountant is any person who is duly qualified to practice as a CPA in any State, possession, territory, Commonwealth or District of Columbia. Headquarters Management and Finance’s Training group provides support for Continuing Professional Education (CPE) for CPAs in LB&I.|
|An agreement between the taxpayer and the Service concerning the final disposition of an issue or tax liability.|
|Communications and Liaison (C & L)||Communications and Liaison (C & L) serves LB&I with world class communications and stakeholder relation- ship management support. C & L is an Office within the Service that coordinates with IRS Media Relations on questions from reporters and press events, facilitates exchanges of ideas with external stakeholders and maintains the LB&I internal and external web sites. C&L Link|
|Communications, Technology and Media Industry (CTM)||Communications, Technology and Media Industry (CTM) is one of the five major Industries in LB&I, headquartered in Oakland, CA. This segment of LB&I will provide end-to-end tax administration services to large businesses and international division nationwide related to computer production, media (including communication and software), sports franchises, gaming and recreational firms. CTM Link|
|Competent Authority||A tax treaty requires the designation of a competent authority for each country that is a party to the treaty. The respective competent authorities administer the provisions of the treaty. The Director, International acts as the U.S. competent authority in administering the operating provisions of tax treaties and in interpreting and applying these treaties. In interpreting and applying treaties, the Director, International acts only with the concurrence of the Associate Chief Counsel (International). See Delegation Order No. 114 (Rev. 13).|
|Compliance Assurance Process (CAP)||Compliance Assurance Process, CAP, is a compliance review approach that allows the Service to work with taxpayers to ensure compliance with tax laws through real time monitoring, review and issue resolution prior to filing their return. CAP Link|
|Compliance Initiative Projects (CIP)||Compliance Initiative Projects (CIPs) are any activities involving contact with specific taxpayers within a group, using either internal or external data to identify potential areas of noncompliance within the group, for the purpose of correcting the noncompliance that meet the mission, standards and resources of the Service. (IRM 184.108.40.206(3)). CIP Link|
|Computer Audit Specialist (CAS)||An audit specialist who provides comprehensive computer support to LB&I operating division primarily in coordinated industry examinations by interfacing with the taxpayers’ computerized accounting systems. The CAS program is controlled by Director of Field Specialists. CAS Link|
|Conflict of Interest||A conflict of interest exists if an examiner’s personal relationship(s) or private interest(s) (usually of a financial or economic nature) conflict, or raise a reasonable question of conflict with the examiner’s public duties and responsibilities. Policy Statement P-4-6 prohibits examiners from examining or surveying a tax return if a relationship impairs impartiality. See IRM 220.127.116.11.|
|Continuing Professional Education (CPE)||Continuing Professional Education Headquarters function Management and Finance’s Training group provides support for Continuing Professional Education (CPE) for CPAs in LB&I.|
|Coordinated Industry Case (CIC)||Any case assigned to LB&I where the taxpayer and its effectively controlled entities warrant the application of team examination procedures. Cases normally have 12 or more points, as defined by the criteria found in IRM 4.46.2.|
|Criminal Investigation (CI) Coordinator||The special agent designated to coordinate and interact with LB&I. The CI coordinator has the responsibility for assisting LB&I by supplying information gathered by CI.|
|Currency||Currency is one of LB&I initiatives to improve employee and taxpayer satisfaction, and to enhance examination efficiency. Currency for CIC audits means that the last two filed return years are in opened, closed, surveyed, merged or decontrolled status.|
|Customer Satisfaction||Customer Satisfaction is one of the 3 balanced measures. The primary measurement is from customer surveys.|
|Customer Service Resource Guide for Examiners||This guide is now obsolete. However, much of the information previously contained in this guide can now be found on the IRS public website at http://www.irs.gov/businesses/article/0,,id=180644,00.html.|
|Cycle Time||The time that we allow a case to be in the examination cycle. It is used as a diagnostic indicator that measures the open year average age in months of returns that are under examination. As an example, our goals for 2004 for in process work were 12.7 months for IC returns and 30 months for CIC returns.|
|Delegation Order||A formal numbered document that places authority in the position(s) where actual operational responsibility resides. It delegates authority to a certain level of management to execute given procedures. See IRM 1.2.2.|
|Director of Field Operations (DFO)||An LB&I executive who supervises territory managers within his/her area of responsibility.|
|Disclosure Office||Disclosure Offices (SB/SE) staff provide technical advice, training, and administrative guidance regarding disclosure and privacy issues. They also coordinate demands for testimony and process Court Orders. Disclosure Managers prepare authorized responses to requests under Internal Revenue Code § 6103, the Freedom of Information Act, and the Privacy Act. Disclosure Managers also sign transmittals of documents to city, state, and federal agencies. Disclosure Link|
|Division National Partnering Council (DNPC)||Division National Partnering Council (DNPC) is a formal leadership group that fosters a collaborative relationship between LB&I and NTEU. DNPC is designed to ensure that the divisions’ partnering principles are aligned with the Commissioner's modernization principles and embedded in the way decision making and day-to-day business practices are conducted in the new IRS.|
|E-Commerce||Electronic commerce covers a wide array of commercial activities carried out on the internet. These include on-line trading of goods and services, electronic fund transfers, online trading of financial instruments and products, and electronic data interchange within and among companies. ECommerce Link|
|Economist||An Economist is an LB&I audit specialist with expertise in economics and finance issues. A referral for Economic Assistance is required for all Coordinated Industry Cases (CIC) including issues involving Section 482 pricing and/or valuation. On all other cases, issues, involving over $500,000 in potential deficiency or which have significant precedent value to the resolution of similar issues, should be referred. Economist Link|
|EEO & Diversity Advisory Council – LB&I||This is a Council which serves in an advisory capacity to the LB&I Commissioner and Deputy Commissioner on EEO and Diversity issues.|
|Effectively Controlled Entities||Entities where more than 50% of a corporation's stock is directly or indirectly owned by the taxpayer under examination. Additional factors are discussed in IRM section 4.46.2.|
|Electronic Freedom of Information Act (E-FOIA)||Electronic Freedom of Information Act (e-FOIA) focuses on extending electronic document management capabilities to external users. E-FOIA Link|
|Employee Engagement||One of the 3 balanced measures. The primary measurement comes from employee surveys conducted by outside consultants.|
|Employee Suggestions||A program where employees may submit suggestions to improve IRS performance. The suggestions are assigned to responsible parties and evaluated. The employee may receive an award based on the evaluation.|
|Employment Tax Specialist||An LB&I audit specialty directed by Field Specialists with expertise in employment tax returns and related issues. Employment Tax Link|
|Engineer||An LB&I audit specialty directed by Field Specialists with expertise in engineering who provide support in technical issues, valuations and appraisals. Engineer Link|
|Examination Officer's Activity Record - Form 9984||A form used by field examiners to record all case processing actions. This form may be used to record delays in processing or to record daily time applications in order to comply with issue tracking requirements.|
|Examination Operations Automated Database (EOAD)||A database used to share audit results with states and municipalities. This information is not supplied by IMS so examiners follow specific procedures to provide the required information on a CD. Encryption by GERS (Guardian Edge Removable Storage) will be automatic when saving to external storage devices.|
|Examination History Record - Form 5698||A spreadsheet showing the examination history by individual entity for the past 10 years. It is used in planning examinations to determine if a survey (cycling) is appropriate on an entity-by-entity basis.|
|Examination Plan - Form 4764||A written document for each LB&I case containing agreements with the taxpayer, information for Service personnel, work assignments, audit procedures, time estimates, and special instructions.|
|Examination Span||Lapsed time from the status code 150 posting to status code 80 or above. The examination span is planned so that no more than the two most recent tax periods remain unstarted. Some or all of the options in IRM 18.104.22.168(4) may be employed to improve currency.|
|External Liaison||Staff in LB&I’s C & L function with responsibility for Federal/State contacts, Governmental Liaison and Disclosure Office, Stakeholder Relationship Management (SRM) and Legislative Affairs.|
|Ex Parte||Ex parte is a Latin legal term meaning from (by or for) one party. Revenue Procedure 2000-43 provides for the prohibition of certain ex parte communications that take place between appeals and another Service function without the participation of the taxpayer or representative, to the extent that such communications appear to compromise the independence of Appeals. Rev. Proc. 2000-43|
|Fast Track Settlement (FTS)||An Alternative Dispute Resolution tool that expedites the consideration of unagreed issues by Appeals. Examination teams must consider referral to FTS whenever a taxpayer indicates disagreement on a Form 5701 (Notice of Proposed Adjustment).|
|Federal Records Center||The depository for LB&I case files. All files must be retired to the Federal Records Center 4 years after the date of closing and should be destroyed 15 years from the date of closing.|
|Federal – State Coordinator||The Federal/State Coordinator in LB&I C & L has overall responsibility for coordinating Federal/State issues within LB&I and serves as the principal liaison between LB&I and National Governmental Liaison.|
|Field Focus Guide||A reference sheet providing concise, high-level direction to front-line managers and technical employees with overviews of the five strategic initiatives, a listing of LB&I’s program priorities, and the balanced measures scorecard.|
|Field Specialists||A major LB&I organization that provides support staff to examination teams across all Industries. These include Computer Audit Specialists (CAS), Economists, Employment Tax Specialists, Engineers, and Financial Products Specialists. See link.|
|Filter Focused Examinations (FFE)||A filter-focused examination is a case that has been pre-screened for risk, evaluated by subject matter experts, and sent to the field with case building information and filter selection source information. Agents subsequently validate filters and risk assessment, perform the examination, and provide feedback on filters used to select the case. FFE Link|
|FASB Interpretation No. 48 (FIN 48)||Financial Accounting Standards Board issued Interpretation 48 of Financial Accounting Standard 109 in June, 2006. This interpretation, known as FIN 48, is intended to eliminate inconsistency in accounting for uncertain tax positions in financial statements certified in accordance with U.S. GAAP. FIN 48 mandated new rules for recognition, de-recognition, measurement, and disclosure of all tax positions. FIN 48 Link|
|Financial Products Specialist (FPS)||Financial Products Specialists (FPS) are examination specialists controlled by Director, Field Specialists. FPS possess a broad expertise in tax law and have been given specialized training involving futures, options, government securities and other financial products. FPS Link|
|Financial Services Industry||One of the five Industries in LB&I The Financial Services Industry encompasses approximately 55,000 taxpayers including those in: commercial banking, savings and loans, securities, private pools of capital including hedge funds and private equity, life insurance, property and casualty insurance other financial services. FSI Link|
|Foreign Bank Account Report (FBAR)||Foreign Bank Account Report (FBAR) is an information return required to be filed by a US Person that owns or has signature or other authority over foreign financial accounts worth over $10,000 in any calendar year.|
|Foreign Banks||Foreign banks generally operate through a permanent establishments (PE) in branch form. The branch in the U.S., is taxed on effectively connected assets and the related liabilities to the U.S. scaled down from the bank as a whole; in addition, foreign banks comply with withholding taxes (Branch Level interest Tax and Branch Profits Tax). These taxes are computed and filed on Form 1120F.|
|Fraud Coordinator Program||A staff function in PFTG that provides liaison with SB/SE and Criminal Investigation Division of IRS and support.|
|Formal Document Request||A document used to gather information from abroad administratively. Formal document requests are used only by international examiners. IRC section 982 provides that if a taxpayer fails to comply with a formal document request arising out of the examination of the tax treatment of any item within 90 days after the mailing of the request by the Secretary, then the taxpayer shall be prohibited from introducing into evidence in a civil proceeding in which the tax treatment of the examined item is at issue any foreign-based documentation covered by the request.|
|Heavy Manufacturing and Transportation Industry (HMT)||One of the five Industries in LB&I, headquartered in Iselin, NJ. HMT Link|
|Issue Based Management Information System (IBMIS)||Issue Based Management Information System is a software program used to prepare reports from a variety of LB&I and IRS databases including AIMS and IMS. IBMIS Link|
|IDRS||A system which enables authorized employees, in the IRS, to have instantaneous visual access to certain taxpayer accounts. IDRS provides access to twelve different data files. The data files most commonly accessed by LB&I employees are: Audit Information Management System (AIMS), Key Index File (KIF), IRS Individual Taxpayer Identification Number (ITIN) and the Taxpayer Information File (TIF). Additional information and definitions are found in the Department of the Treasury, Internal Revenue Service Document 6209 (as revised).|
|Information Management System (IMS)||The Issue Management System (IMS) is a computer application for agents, specialists, international examiners, managers, and others. It supports existing and new examination processes, including the Compliance Assurance Process (CAP). IMS consists of a laptop application and a centralized data repository. The laptop application provides the tools to support planning, selection, and examination. The centralized data repository feature allows LB&I to better capture issue information. IMS Link|
|In Depth Probe||A penetrating review of a selected account, activity or transaction to determine its proper reporting for tax purposes. The examination may include any number of other issues.|
|Industry Case (IC)||Any case within LB&I that has not been defined as a Coordinated Industry Case.|
|Industry Director||The senior LB&I executive within an LB&I industry.|
|Information Document Request (IDR) - Form 4564||Form used to request information from the taxpayer.|
|Information Document Request (IDR) Management Process||A formal process for handle general and delinquent IDR's during the examination process. See IRM 22.214.171.124.|
|Internal Management Documents (IMD)||Management directives and other documents, many of which must be published to the external website to comply with E-FOIA rules. The LB&I IMD Coordinator is an Analyst in PFTG - Examination Policies and Procedures. IMD Link|
|International Examiner||An examination specialist with expertise in global taxation issues. These specialists are located in the Industry function for which they generally provide support. International Link|
|Issue Resolution Tools||These tools provide alternative dispute resolution methods such as Accelerated Issue Resolution (AIR), Early Referral to Appeals, Fast Track Settlement (FTS) program, and Pre-Filing Agreement (PFA). Issue Resolution Link|
|Key Case||The case designated as the controlling taxpayer and tax period within a group of entities. One of the major objectives of LB&I is the concurrent consideration of the key case and all related returns under one team manager. The team manager becomes responsible for all examination activities of all entities comprising the key case.|
|Large, Unusual and Questionable Items (LUQ)||Depends on the examiner's perception of the return as a whole and the separate items that comprise the return. Some factors
to be considered when identifying LUQs are:
|Limited Scope Audit||Only the highest priority issues are considered.|
|LB&I Compliance Plan||An annual plan that sets out LB&I's key goals, objectives, and areas of focus for the coming year.|
|LB&I Imaging Network (LIN)||LB&I Imaging Network (LIN) captures images of paper filed Forms 1120 and 1120S returns. LIN is a component of the Statistics of Income Distributed Processing System (SOI DPS). LIN Home Page Link|
|The LB&I Quality Measurement System (LQMS)||A quality assessment process that serves as the quality measurement tool for Business Results. This process focuses management on results and improvement opportunities as a daily business practice.|
|Midwest Automated Compliance System (MACS)||A security-certified, menu driven computer system that contains a combination of the transcribed return transaction files and selected entity information for IMF and part of BMF (Forms 1041, 1065, 1120, and 1120S).|
|Minimum Refund||Minimum refunds result when a taxpayer is due a net refund even if none of the unagreed issues are resolved in the taxpayer’s favor. The examination team must solicit a partial agreement relating to the agreed issues. In the event the minimum refund amount exceeds $2,000,000, and the taxpayer has demonstrated agreement with the examiner’s findings by executing the Form 870, the refund must be reported to the Joint Committee on Taxation before the unagreed issues are forwarded to Appeals.|
|Multi-year Examinations||Involve an examination cycle including two or more years.|
|Natural Resources and Construction Industry (NRC)||Natural Resources and Construction Industry (NRC) is one of five industries in LB&I. Its headquarters is in Houston. NRC provides end-to-end tax administration services to more than 17,000 large and mid-size businesses nationwide that are engaged in the oil and gas, mining, utilities, forestry, chemical, waste management, and construction industries. NRC link|
|Notice of Proposed Adjustment (NOPA) Form 5701||Forms 5701, Notice of Proposed Adjustment is used to summarize proposed adjustments to the taxpayer. Forms 886-A (Explanation of Items) will be used to present the entire explanation and will be included as attachments to Forms 5701|
|Office of Chief Counsel||The independent legal counsel for the Internal Revenue Service. Its mission is to provide correct and impartial interpretations of the internal revenue laws and provide legal advice and representation for the Service. Associate Office Counsel and Area Counsel are part of the Office of Chief Counsel.|
|One-Case Concept||The concept that all components of an LB&I case remain together throughout the examination process under the control of the team manager. Exceptions may arise for returns that are not controlled by the Team Manager. This may include employment tax returns that are not controlled by the Team Manager.|
|One-Stop Service||The resolution of issues during the taxpayer's initial contact or as a direct result of that contact. One-stop service complements and promotes the Service's three key objectives: reduce taxpayer burden, improve voluntary compliance and improve customer satisfaction and quality-driven productivity. Service employees will take the necessary steps to provide one-stop service in all types of contacts initiated by the taxpayer whether the contact is by telephone, correspondence or face-to-face.|
|Opening Conference||The first formal meeting with authorized employees or corporate officers of the taxpayer. The main purpose of the meeting is to summarize agreements on coordination and accommodations, and to discuss the scope and depth of the examination.|
|Outside Expert||Individuals who are not employees of the Internal Revenue Service who provide specialized assistance in return for monetary compensation. Generally, they possess a high degree of knowledge, skill and experience in specific subject area.|
|Planning File (CIC)||A collection of information that would benefit subsequent examination teams. It is maintained on site and information is added to it throughout the cycle. The examination plan should contain instructions about the maintenance of the planning file.|
|Planning Meeting||A meeting (or series of meetings – sometimes called strategy meetings) that is held by the team manager with specialist managers and the examination team during the initial phase of the planning process. Its purpose is to review all available information and make decisions about the scope and depth of the examination.|
|Policy Statement||Published "Service Policies" that are major decisions of the Commissioner, Deputy Commissioners, Chiefs and Directors within the framework of basic tax administrative policies of Treasury and Congress. These "Service Policies" govern and guide Service personnel in the administration of the internal revenue laws.|
|Post-Appeals Conference||A conference held on all CIC cases after final disposition by Appeals unless an exception is agreed to between LB&I and Appeals. The purpose of the post-closing conference is to discuss the settlement reached and its subsequent impact on the taxpayer.|
|Post-Examination Critique||A meeting held with the examination team and taxpayer after a cycle closes to discuss the effectiveness of the audit. The objective of the critique is to establish the groundwork for improving the quality of subsequent examinations.|
|Pre-Appeals Conference||A meeting of LB&I team managers, agents, taxpayers/representatives and Appeals before the Appeals process begins. The conference is to discuss the issues, taxpayer's protest and the audit team's written response to the protest. According to Revenue Procedure 2000-43 which prohibits ex parte communications for pre-conference meetings, the taxpayer/representative must be given an opportunity to participate.|
|Preliminary Examination Work||The preliminary examination of records to validate decisions made during the risk analysis phase and to select issues to be included in the examination plan. It gives examiners a basis for developing audit procedures for each assigned area of responsibility.|
|Preliminary Meetings||Taxpayer involvement begins with a series of preliminary meetings prior to the opening conference. The purpose of these meetings is to plan the examination in a cooperative manner with the taxpayer to insure the best use of both parties' resources.|
|Preliminary Risk Analysis||The first step in the planning process is to perform a preliminary risk analysis to determine if the case is worthy of examination. This preliminary analysis applies to both CIC and IC cases and may indicate a situation where a survey would be appropriate. Consideration should be given to examining a more current year if the initial analysis so indicates|
|Primary Team Manager||The front line manager in LB&I to whom the case is assigned. This manager has ultimate control of the assigned case, even though resources from other groups are used in completing the examination and even through returns may be controlled by other groups.|
|Quality Examination Process||The Quality Examination Process (QEP) is a systematic approach for engaging and involving taxpayers in the exam process, from the earliest planning stages through resolution of all issues and completion of the case.|
|Record Retention Limitation Agreement||A formal agreement between the Service and taxpayers subject to mandatory record retention requirements specifying that the taxpayer must retain all machine-sensible records generated by all automated data processing systems unless the CAS Territory Manager has consented to limit the retention to certain specific records.|
|Retailers, Food Pharmaceuticals, & Healthcare (RFPH)||The LB&I Retailers, Food Pharmaceuticals, & Healthcare Industry provides end-to-end tax administration services to approximately 300 large and 18,000 mid-sized taxpayers with assets greater than $10 million. Headquartered in Downers Grove, Il, the industry serves taxpayers dealing in food and beverages, retailing, pharmaceuticals, agricultural commodities, farms and healthcare. RFPH Link|
|Risk Analysis||The process of comparing the potential benefits to be derived from examining an issue to the resources required to perform the examination. Risk analysis is an integral part of the planning process to ensure the efficient and effective use of resources and should be based on experience, judgment, and objective analysis.|
|Risk-Based / Issue-Focused Examinations||Risk-Based / Issue-Focused Examinations are based on the objective of ensuring substantial compliance. This examination approach identifies potential non-compliant issues, and identifies issues by limiting resources of staff, time and organizational goals which is required for the examination process.|
|RTVUE||One of several IDRS command codes available in Corporate Files On-Line (CFOL) used to display or print line items transcribed from the Forms 1040 series and their accompanying schedules and/or forms as the returns are processed at the campuses. It will not reflect any subsequent adjustments or amended returns.|
|Senior Team Coordinator (STC)||A GS -14 revenue agent competitively selected to coordinate a complex LB&I case (with 28 or more points as determined by criteria in IRM 4.46.2)|
|Senior Specialist||A GS -14 specialist competitively selected to examine one or more issues in complex LB&I cases.|
|Simultaneous Examination Program||A program under which the Service and the tax administration of a treaty partner agree to coordinate their examinations of related taxpayers in their respective jurisdictions.|
|Skip-cycle Examinations||Skip-cycle examinations are when an examination cycle is skipped. The option of skipping a year or more in order to get current may always be considered. The team manager would ask the taxpayer to file an amended return in order to incorporate all carryover adjustments.|
|Special Examination Feature||A special examination feature would be an unusual feature of an examination such as a special project. When an in-depth probe is included in an LB&I examination plan, it is called a special examination feature.|
|Specialist||A team member with special skills or training. Examples of specialists include: Financial Products, International, Computer Audit, Engineer, Employment, Excise, Employee Plans, Exempt Organizations, and Economist. Whenever "team member" is used in this IRM, the reference includes all revenue agents and specialists who may be assigned to an examination.|
|Specialist Manager||Manager of field specialists.|
|Specialist Referral System (SRS)||A totally electronic and web-enabled system used to generate referrals for a Computer Audit Specialist (CAS), Economist, Employee Plans, Employment Tax (LB&I), Employment Tax (SBSE), Employment Tax (TEGE), Engineering, Excise, Exempt Organizations, Federal, State & Local Government, Financial Products, Indian Tribal Government, International, and Tax-Exempt Bonds. SRS is also used to request informal consultations with a specialist.|
|Support Examination||An examination that utilizes team members or specialists assigned to another Industry. Support team members may be located in the same or a distant geographic area.|
|Tax Computation Specialist (TCS)||A team member who specializes in determining the tax liability on LB&I cases. A TCS completes tax computations for 1120s utilizing BNA and 1120Ss, 1065s and 1040s utilizing RGS. In addition to preparing tax computations, the TCS also prepares Joint Committee spreadsheets and completes Part 1 of Form 2285, Restricted Interest.|
|Taxpayer Advocate Service (TAS)||The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. For more information, go to http://tas.web.irs.gov or www.irs.gov/advocate|
|Taxpayer's Case Binder (CIC)||A binder of information about each CIC case controlled by the team manager. See IRM Exhibit 4.46.5-1 for an example of the type information maintained in the Taxpayer's Case Binder.|
|Taxpayer Information Gateway (TIG)||Taxpayer Information Gateway (TIG) provides a number of case building reports. Several years of data is provided to help analyze trends and potential issues. Examples: Reports analyzing data from Forms 1120, 1065, 851, 5471, 5472, K-1, Compustat, in year-to- year comparisons of income statement and balance sheet, book/tax analysis, percentage comparisons, ratios and more. This information is best utilized in the preaudit stage. See TIG sharepoint site for information how to obtain TIG reports. TIG Link|
|Team Coordinator (TC)||A revenue agent assigned to any LB&I case where one or more team members or specialists contribute to the examination work on the case.|
|Team Manager (TM)||A front line manager in LB&I who supervises LB&I examiners and cases.|
|Team Manager Settlement Authority||Team manager settlement authority is provided by Delegation Orders 4-24 (IRM 126.96.36.199.3) and 4-25 (IRM 188.8.131.52). DO 4-24 provides the authority to accept Settlement Offers where Appeals has effected a settlement with taxpayer for another cycle. Delegation Order 4-25 provides the authority to accept offers on issues coordinated in the Technical Advisor Program.|
|Team Member||A revenue agent or specialist assigned to an LB&I case.|
|Technical Advisor (TA)||A revenue agent who has developed significant expertise in a given industry. The TA will provide the examination team with information relative to a particular industry or issues that will be helpful in setting the scope and depth of the audit.|
|Territory Manager (TTM)||A mid-level manager in LB&I who supervises team managers within his/her territory.|
|Time Tracking||A system for recording time by specific segment or Standard Audit Index Number (SAIN) line item for each examiner and specialist on the examination team.|
|Transcripts||On-line return data and master file account data that is transcribed or generated from original returns as they are processed at the submission processing sites.|
|Whipsaw||Revenue Procedure 99-28 Section 2.03(6) refers to whipsaw as a situation produced when the government is subjected to conflicting claims of taxpayers. A potential whipsaw situation exists whenever there is a transaction between two parties and differing characteristics of transactions will benefit one and hurt the other for tax purposes. See also IRM 184.108.40.206 Whipsaw Cases.|
|Form Number||Title||IRM and/or Citation|
|4485||LB&I Request for Assistance or Support Resources||IRM 220.127.116.11.12.3|
|4564||Information Document Request||IRM 18.104.22.168
|4764||LB&I Examination Plan||IRM 22.214.171.124|
|4764A||Examination Plan (Special Instructions and Summary of Assignment)||IRM 126.96.36.199.2.3.1|
|4764B||LB&I Examination Plan Procedures||IRM 188.8.131.52.2.3|
|5698||Examination History Record||IRM 184.108.40.206.2|
|5699||Information Document Request Log||IRM 220.127.116.11.1
|5700||Issue Control Log||IRM 18.104.22.168.3.4(3)|
|5701||Notice of Proposed Adjustments||IRM 22.214.171.124.3.4(2)|
|6095||Carryover and Recurring Adjustments Schedule||IRM 126.96.36.199.7|
|6609||Schedule of Work Assignments and Planned Time||IRM 188.8.131.52.2.2.6(2) IRM 184.108.40.206.2.3.3(6)|
|6782||Certification of Financial Interest in a Work Assignment (Direct or Indirect)||IRM 220.127.116.11.2.5|
|9984||Examining Officer’s Activity Record||IRM 18.104.22.168.3.2|