4.75.7  EO Case Assignment Guide

4.75.7.1  (02-01-2003)
Introduction

  1. The primary purpose of the EO Case Assignment Guide (CAG) is to provide a quick and reliable tool for:

    1. A Classifier to assign a grade to a case;

    2. A group manager to use in assigning work generally commensurate with the grade level of expertise of the examiner assigned to the case.

4.75.7.2  (02-01-2003)
Definition of Terms

  1. The following terms are defined for purposes of this section:

    1. The term "examination case" is defined as the primary return for one year plus other returns involving interrelated interest and/or transactions.

    2. The term "OCEP" (Office Correspondence Examination Program) describes the office interview and correspondence examination technique.

    3. The term "examiner " refers to the EO Agent assigned to work the examination case whether the examiner is in the GS-512, GS-526, or GS-987 series.

4.75.7.3  (05-01-2010)
Group Manager Duties

  1. Group Managers are responsible for:

    1. Paying strict attention to their case grading practices to ensure the grade assignment is closely tied to the classification standard;

    2. Generally assigning cases consistent with their examiners’ grade level, and

    3. Keeping developmental assignments to no more than 25% of an employee’s time.

  2. If the group manager feels application of the CAG does not yield the appropriate case grade, the manager must utilize sound judgment in grading the case.

  3. To the extent a questionable case resembles one or another of these descriptions (taken in their entirety), a group manager may rely on these descriptions as both a case assignment tool and a check on grades assigned using the CAG criteria.Exhibit 4.75.7-1.

  4. The group manager is responsible for ensuring the final case grade is accurate.

4.75.7.4  (05-01-2010)
Examination Grading Criteria

  1. Case Assignment Guide criteria are derived from position classification factors listed in the Office of Personnel Management (OPM) Standards. Work graded using the CAG, reflects complexity and impact equivalent to those specified in OPM Standards for that grade, assuming normal supervision.

    1. Income and assets reported on the return are used to determine the case grade of EO examination cases based on type and size of the organization.

    2. Team Examination Program (TEP) case grading criteria is found in IRM 4.75.29.

4.75.7.4.1  (02-01-2003)
GS-9 Cases

  1. Cases are graded as GS-9 when there are few and less complex issues. These cases may be examined under the Office/Correspondence Examination Program (OCEP). This program examines returns either by correspondence or office interview:

    1. Office interview examinations are conducted when the gross receipts are less than $100,000 and there is an issue or issues which cannot be verified by correspondence.

    2. Correspondence examinations are conducted when there are no more than three (3) issues and are generally less difficult than office interview examinations.

4.75.7.4.2  (02-01-2003)
GS-11 Cases

  1. Cases graded as GS-11 are those in which:

    1. Experience is necessary to determine and resolve issues applying established laws, precedents and methods frequently used and generally applicable;

    2. Complicating features may be present which involve controversy or a number of interrelated issues;

    3. Impact of decisions may extend beyond the organization or metropolitan area because of the scope of activities or the nature of the issues.

4.75.7.4.3  (02-01-2003)
GS-12 Cases

  1. GS-12 cases have major issues involving difficult or complex legal or accounting problems and require extensive investigation to resolve problems. Such as:

    1. Direct precedent is not available or appropriate. Thus, the examiner must adapt standard methods and interpret laws;

    2. Complications involving interrelated questions of a factual, financial, legal or accounting nature are present;

    3. Resolution of issues may involve controversy due to interpretation or adaptation of precedents not directly related;

    4. Substantial impact of decisions, which may affect a larger organization of regional or national stature, or possibly arouse public attention.

4.75.7.4.4  (02-01-2003)
GS-13 Cases

  1. GS-13 cases involve major issues, the resolution of which is significantly affected by the lack of applicable precedents or the presence of conflicting precedent. Therefore:

    1. Investigation of issues requires ingenuity;

    2. Resolution of issues requires considerable tact and discretion;

    3. Complexities necessitate a high degree of experience and sophistication;

    4. The impact of decisions may be substantial and involve large sums of money or large numbers of people, with the possibility of widespread public attention;

    5. Complications could occur, involving intricately related major issues or unusual issues with conflicting or nonexistent precedents.

4.75.7.5  (02-01-2003)
Use of the Case Assignment Guide

  1. Proper use of the CAG will:

    1. Ensure accurate data is available on workload for financial planning and grade structure changes;

    2. Facilitate the selective assignment of higher level work for developmental purposes;

    3. Aid in the analysis of position management effectiveness; and

    4. Provide information relative to the appropriateness of position classifications and other management and personnel information needs.

  2. The CAG should not be used in evaluating an examiner’s performance.

  3. The CAG may not be used to classify examiner’s positions. For example, the CAG should not be:

    1. Considered a predictor of the appropriate overall grade level for the position of employees doing work assigned in accordance with it, or

    2. Viewed as superseding OPM standards in any way.

  4. Assignment of higher or lower level cases for short periods of time to provide developmental opportunities or to meet specific operational needs does not affect the grade level of an examiner’s position.

  5. If a developmental or priority assignment is above the grade level of the examiner and is completed under closer than normal supervision or supervisory instructions, the assignment may be considered consistent with the examiner’s grade.

4.75.7.6  (02-01-2003)
Changing Case Grade

  1. The CAG is general and establishes a probable grade level which is subject to change by the group manager or classifier. The CAG grade can be upgraded or downgraded.

  2. Cases may be upgraded if one or more of the following items materially increases the complexity of the case:

    • Difficulty in classifying the organization’s exempt purpose

    • Unrelated Debt Financed Income is an issue

    • An organizations is exempt under IRC 501(c)(7), with substantial gross receipts from the general public (nonmembers) or investments

    • Termination of private foundation status or other changes to foundation status

    • Unusually complex private foundation issues

    • Denials, revocations, terminations, modifications or reinstatement of exempt status

    • Changes in activities or purposes of the organization requiring a termination or redetermination

    • Extensive research and/or interpretation of the law, regulations and court decisions. Laws and regulations may be ambiguous, in a proposed state, or little precedent exists

    • Unrelated business income or operations (complex allocation problems)

    • Organization is known and/or operates on an international, national or regional basis

    • Determination regarding the organization’s exempt status is of concern to many individuals (political and public figures)

    • Controversial issues are present which are of interest to the public

    • Church issues

    • Unusually large payments to officers, employees and professionals

    • Organizations with substantial receipts from sources other than members seeking exemption or exempt under IRC 501(c)(12)

    • Allocations of substantial amounts to political purposes or legislative activities

    • Valuation problems requiring the assistance of an engineering specialist

    • Affiliated organizations, multiple entities, or related interests (taxable or nontaxable)

    • Large refund case (over $100,000)

    • Fraud referrals (accepted or rejected)

    • Termination - mergers

    • Group Ruling

    • Complex accounting system

    • Cases involving transferee liability

    • Cases involving Revenue Procedure 75-50 compliance

  3. The manager can lower a case grade for good cause. For example, anticipated complexities fail to develop. The basis for the change in grade must be fully documented in the case file.

4.75.7.7  (02-01-2003)
Manager Designated Limited Scope Examinations

  1. Group Managers will provide guidance in limiting the scope of an examination where appropriate. The decision to limit the scope of an examination must be documented in writing in the case file.

  2. Consideration of Tax Exempt Quality Measurement Standards (TEQMS) must be documented in limited scope examinations.

  3. To meet TEQMS, the following items, must be considered during the preplanning of the examination of Form 990:

    • The balance sheet

    • Part IV, Form 990

    • Large, unusual and questionable income items

    • Large, unusual and questionable expense items

    • Package audit requirements

Exhibit 4.75.7-1 
Case Assignment Guide

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