4.75.29  Exempt Organizations Team Examination Program Procedures (Cont. 1)

4.75.29.15 
Planning the TEP Coordinated Examination

4.75.29.15.5 
Step Five - The Examination Plan

4.75.29.15.5.5  (06-04-2009)
Role of the Case Manager

  1. Responsibility - The Case Manager is fully responsible for all management aspects of their cases. This requires substantial activity in reviewing and discussing matters with all members of the team. Their activity should be briefly outlined in this section of the examination plan so team members and the taxpayer will be able to properly coordinate their activities. The outline should cover items such as:

    1. Planned contacts with specialists and assistance or support team supervisors;

    2. Frequency of meetings with taxpayer and team members;

    3. Coordination with assistance or support groups;

    4. Method for documenting approved changes in the examination plan;

    5. Review of work in process;

    6. Review of issues selected through the risk analysis process;

    7. Identification of requests which will require the Case Manager’s personal approval;

    8. Involvement in the Information Document Request (IDR) Management Process;

    9. Involvement in requests for accountants’ workpapers and tax accrual workpapers; and

    10. Review and approval of significant proposed issues (Forms 5701, Notice of Proposed Adjustment).

  2. Section 482 Pricing Issue IDR review - All requests for information relating to the examination of section 482 transfer pricing issues should be reviewed by the Case Manager and International Manager. A request should be prepared, reviewed for content, and forwarded to the taxpayer at the opening conference

  3. Meetings and travel - The Case Manager should prepare estimates of likely dates for meetings and associated travel costs. Planned travel costs must be approved by the next level of management.

4.75.29.15.5.6  (06-04-2009)
Role of the Team Coordinator

  1. List of activities - The Team Coordinator’s activities should be fully explained in Part II of the examination plan so that all team members will be able to conform to the administrative procedures involved in those activities. For example, Team Coordinators will:

    1. Assist the Case Manager in the preparation of the examination plan;

    2. Assist the Case Manager in performing and updating the risk analysis;

    3. Review team members’ information requests for uniformity, clarity, duplication of other requests;

    4. Ensure information requests are discussed with appropriate individuals prior to their issuance;

    5. Maintain and monitor a log and file of retained copies of requests for information;

    6. Ensure Forms 5701, Notice of Proposed Adjustment, are logged and discussed with the taxpayer prior to issuance;

    7. Review team members’ proposed adjustments (Forms 5701/NOPAs);

    8. Receive requested information from the taxpayer and forward it to team members;

    9. Secure the Case Manager’s approval of requests where required;

    10. Function as the liaison with the taxpayer for the day-to-day activities of the team;

    11. Update the planning file; and

    12. Perform other duties as determined mutually appropriate by the Case Manager and the Team Coordinator.

  2. Senior Team Coordinator - Extremely large and/or Coordinated TEP audits may require the assignment of a senior Team Coordinator. The duties of a senior Team Coordinator are significantly expanded to include conducting many of the planning conferences and to include preparation of major parts of the examination plan.

4.75.29.15.5.7  (06-04-2009)
Scope of Examination

  1. Scope - Risk Analysis provisions should be followed in determining the scope of the examination.

  2. Taxpayer Information - Part II of the plan provides additional taxpayer information. Include information that would be helpful to team members such as; a brief description of organizational structure (organizational chart may be beneficial); summary of organizational acquisitions, mergers, or liquidations; accounting and internal control systems; and historical information regarding taxpayer. This information will help acquaint team members with the nature of their assignment and alert them not only to the possibility of inter-company transactions but also to those accounts in which those transactions may be found. This list will be used in the risk analysis process to help determine scope.

  3. Limiting the Scope - Reasons for not including various items in the examination plan should be made known to team members, as well as to any technical advisors and management. Documenting this information allows management to evaluate decisions regarding cycling and examination scope which may have a bearing on the Area’s resource utilization and examination program. The individual team members also need to know this information in order to:

    1. Avoid developing useless information;

    2. Alert the Case Manager to significant interrelated issues which, if fully developed, would require that the component be brought under examination; and

    3. Recognize information which was not available to the Case Manager in deciding the scope of the examination.

4.75.29.15.5.8  (06-04-2009)
Examination Assignments

  1. Assignment spreadsheet - The Form 4764-A Examination assignment portion of Part III is a summary of the accounts, transactions, examination areas, organizational components and the specific team member responsibilities for carrying out each segment of the examination. This section helps the Case Manager control assignments and permits each team member to see how individual areas of responsibility fit into the overall examination pattern. This is particularly helpful where a consolidated return or a segment of a return is involved. The information also permits the team member to begin consideration of the specific procedures to use in accomplishing the assignment and in predicting the examination time.

  2. Alternative formats - It may be more desirable to use variations of the summary of assignments format shown on Form 6609, Schedule of Work Assignments and Planned Time. Each of the assignments should be clearly and completely outlined to facilitate management and coordination of the case regardless of the format used. The Case Manager may also extend the information shown on Form 4764, EO TEP Examination Plan, by including the name of the support territory, scheduled starting dates, and estimated examining time.

4.75.29.15.5.9  (06-04-2009)
Modification of Part II of the Examination Plan

  1. Modifications allowed - Part II should be completed for all examination plans, however, there are situations when parts of it may be abbreviated or omitted at the discretion of the Case Manager. These situations are listed below:

    1. Claims for Refund

    2. Special Project Cases (i.e. With pre-identified issues)

    3. Situations where detail is not relevant, e.g., single-issue/issue focused examinations,

    4. Subsequent examination cycles involving the same Case Manager or Team Coordinator, (Much of the data will be the same as in the prior cycle and can be copied over to the new examination plan.).

4.75.29.15.5.10  (06-04-2009)
Part III – Summary of Assignment Examination Procedure

  1. Purpose of Part III - The purpose of this section is to:

    1. Inform team members of their assignments and to convey any special instructions;

    2. Permit team members to indicate the specific examination procedures and techniques they propose to use in fulfilling their assignment; and

    3. Assist the Case Manager in facilitating the distribution of individual assignments and provide feedback on the manner in which each team member intends to carry out the assignment.

  2. Forms to be used - Forms 4764A and 4764B are used in preparing this section of the plan and should contain the name of entity, the years involved, a brief description of the examination assignment, and date. These forms should contain the names of team members and a listing of various examination segments (accounts, transactions, etc.) of the assignment to reflect:

    1. Flow and order of the examination process;

    2. Planned start and completion dates;

    3. An estimate of examination time by specific segments, such as line items from a return, SAIN item, potential issue(s), etc.;

    4. A description of testing, sampling, or other specific examination techniques to be used (including compliance checks), when warranted;

    5. Depth to be achieved in the examination of items within the segment;

    6. Special coordination with other team members to achieve the best possible uniformity and consistency in raising and resolving issues; and

    7. Prioritization of significant areas/issues.

  3. Form 4764B, EO TEP Examination Plan, Examination Procedures –This form also should contain procedures developed specifically for significant examination areas, compliance checks and in-depth probes. The standard ESAIN procedures can be used for the balance of the examination areas.

4.75.29.15.5.11  (06-04-2009)
Special Instructions and Summary of Assignment - Form 4764-A

  1. Team assignments - The Case Manager and Team Coordinator should give specific assignments to each of the team members after the planning meetings. It should also be made clear to all of the team members that the instructions are a guide and are flexible depending upon the needs of the case. The Case Manager should encourage independent thinking by all team members at all times.

  2. Special instructions - This part of the plan aids the Case Manager in conveying special instructions to the team members and is used for summarizing the assignments. Variations of this format may be desirable in some cases. It should:

    1. Contain special instructions on case management activities for particular assignments only (Instructions of a general nature should be covered in the Service Management Section.);

    2. Contain instructions as to special accounts, special examination procedures to be applied, and issues or other matters the Case Manager wants to have covered;

    3. Clearly describe the assignment and the team members’ responsibilities and staff day allocation (This will help to determine the examination procedures to be applied); and

    4. Point out special features or problems about the assignment that are known from past examinations or other sources. (It will not be necessary to duplicate information already contained in the Service Management Section.)

  3. Distribution - Form 4764A, EO TEP Examination Plan - Summary of Assignments, should be given to each team member before work begins.

4.75.29.15.5.12  (06-04-2009)
Outline of Examination Procedures - Form 4764-B

  1. Format - Variation of the format for outlining procedures may be desirable in some cases, but should reflect the information contained on Form 4764-B, EO TEP Examination Plan - Examination Procedures.

  2. Preparation - Team members should begin preparing the procedures part of the plan upon receipt of their assignments. It should be prepared to reflect clearly the steps to be taken in the examination of each particular account or item.

  3. Preliminary examination work - Some preliminary work will have to be done before examination procedures can be finally determined. This could include a review of accounting procedures, internal controls and a test of their effectiveness, or other limited examination work. The procedures used in any preliminary or initial work should be documented in this section.

  4. Modifications - The procedures may have to be modified as the examination progresses. The examiner must be alert for any changes that may be necessary and, after discussion with the Case Manager, incorporate any revisions in the appropriate section of the examination plan. The Case Manager will coordinate significant changes with the taxpayer.

  5. Tailored procedures - The procedures to be used should reflect the agent’s tax knowledge, ingenuity, and imagination. The mere reiteration of stereotyped text book techniques may not be appropriate.

  6. Sequence - The examination procedures should be divided or arranged in the sequence to be followed using the ESAIN System.

  7. Assistance or support team - The Case Manager will decide if assistance or support group team members will also write the examination procedures for their assignments. It may be necessary for the Case Manager to recommend procedures in some areas in those cases where it will be a first-time examination for the assistance or support group. It may also be necessary for the case manager or Team Coordinator to travel to the assistance or support group to help in identifying appropriate procedures. Incorporate the assistance/support Team Members’ written examination procedures into the Audit Plan under the appropriate ESAIN.

4.75.29.15.5.13  (06-04-2009)
Time Planning

  1. Responsibility - The Case Manager is responsible for planning the time necessary for each examination. Time planning is essential in order to ensure staff resources are effectively utilized and concentrated in the most productive areas.

  2. Data available - Case Managers have information developed during the preparation of Parts I and II of the examination plan that will assist in time planning. They must evaluate the information obtained, consult with team members, specialists, managers, the taxpayer, and others, including prior Revenue Agents who may be able to contribute to or supplement information about the taxpayer. The Case Manager must then relate this accumulated information to the planned depth and scope of the examination to be conducted.

  3. Prior cycle information available - The best judgment of the team members and the Case Manager is an important factor in those cases where detailed information about time expended for the prior examination is available. The Case Manager and examination team must take into account any changes to the depth and scope of the current examination, as well as any other known factors which would influence the examination. The Case Manager must be careful not to simply roll over time estimates from prior examinations.

  4. No prior cycle or outdated prior cycle - Most EO TEP audits will not have a valid prior history of examination time. Because of the time between cycles, organizational changes and potential issues may make such prior data of little value in the planning phase of the current cycle. The detailed projection of time requirements in these audits must reflect the team members’ and Case Manager’s best judgment after taking into account everything learned about the taxpayer.

  5. Other considerations - The following additional factors should be considered:

    1. Experience of the Case Manager and team members,

    2. Extent of computer assisted audit techniques,

    3. Location of records,

    4. Travel time (on-site vs. assistance or support),

    5. Taxpayer’s staffing,

    6. Taxpayer’s cooperation,

    7. Effectiveness of taxpayer’s retrieval system,

    8. Extent and nature of in-depth probes, and

    9. Complexity of examination areas selected.

  6. Format - Form 6609, Schedule of Work Assignments and planned Time, may be used to document time planned by specific activity or examination area.

  7. Modifications - Case Managers must keep in mind that estimating time is more of an art than a science due to the many variables and unknowns that are present in any given situation. While initial estimates of specific time requirements should be as accurate as possible, it is expected that Case Managers will make revisions to the originally-projected time allocations during the course of the examination through their on-going risk analysis. This will ensure the continued application of time to those areas having the greatest compliance potential.

  8. Plan Approval - Area Managers are the final approval of audit plans. Although there is no stated timeline for the approval, each Case Manager should always plan to provide the audit plan as soon as the case has taken shape and potential is determined.

4.75.29.15.5.14  (06-04-2009)
Distribution of Plan

  1. Distribution - The examination plan is a working tool and once completed, should be distributed to those who have use for it:

    1. The taxpayer will be given a copy of the plan in all cases. Changes made to the plan should be promptly discussed and coordinated with the taxpayer.

    2. All team members should receive those portions of the plan, and other material and information, which are pertinent to their assignment. Instructions provided should be sufficient to permit full understanding of their assignments and enable team members to place in proper perspective their relative portion of the entire team’s effort. A complete copy of the plan should be kept on site for reference

    3. Area Counsel may be furnished relevant portions of the plan.

    4. The approving official (i.e. Area Manager, Case Manager) should retain a copy for reference files.

4.75.29.15.5.15  (06-04-2009)
Significant Modifications to the Plan

  1. Periodic review and revision - Time allocations and estimated closing dates should be subject to continual managerial review during the life of a TEP examination. These projections are to be modified when changes are called for by any case-related developments, particular needs of the examination, or needs of the Service.

  2. Plan addendum - Modification of the original plan, if significant, will be explained in an addendum to that plan. The Case Manager is responsible for making the judgments necessary to determine whether a particular change has the degree of significance to justify the preparation and submission of an addendum. A change of plus or minus 10 percent in planned time may not, by itself, be indicative of significance but may be material if considered in association with other factors.

  3. Significant changes - Changes involving the taxpayer’s component entities could also be deemed significant. Adding a loss-year to a multiple-year examination already in process would also warrant an addendum to include that year. The taxpayer’s input should be considered when making modifications to the plan.

  4. Approval - Development and approval of an addendum will follow the same processing procedures used for the original plan.

4.75.29.15.5.16  (06-04-2009)
Taxpayer Acknowledgement

  1. Taxpayer’s copy of the plan - At the end of the opening conference The Taxpayer Information Section of the plan should be signed by both the taxpayer and the Case Manager on page 10. This is a guide for the examination. It is subject to revision as progress indicates the need for more, less, or different work than originally planned. The individuals identified in the Communications Agreement (page 3) are authorized to either provide IRS with records or enter into preliminary and final discussions with IRS relative to issues or other items of interest. The team manager should deliver the examination plan personally since it will provide an opportunity to:

  2. Review the document with the taxpayer;

  3. Obtain the taxpayer’s signature as an acknowledgment of receipt and the agreements and information are correctly stated. (The Case Manager should document delivery of the plan and the fact that its correctness was orally acknowledged in the event the taxpayer declines to sign); and

  4. Remind the taxpayer that the examination plan is subject to change when necessary.

4.75.29.16  (06-04-2009)
Conducting the Examination

  1. Workpapers should document the

    1. actions of the agent,

    2. the actions of the taxpayer,

    3. the issues being examined and

    4. the final conclusions based on tax law and court precedent. Without detailed and complete workpapers, the final position of the IRS can not be sustained.

4.75.29.16.1  (06-04-2009)
Workpapers

  1. This section provides guidelines for the development of workpaper content and organization, as well as preparation of audit findings for a completed report. These guidelines are provided to promote quality and consistency in examiner workpapers and reports.

  2. Workpapers are the written and electronic records kept by the examiner which provide the audit trail and principal support for the examiner’s report and document the procedures applied, tests performed, information obtained, and the conclusions reached in the examination. Electronic files are considered part of the workpapers and a backup copy should be maintained. All workpapers therefore should be retained in the closed case files.

4.75.29.16.2  (06-04-2009)
Purpose of Workpapers

  1. Workpapers serve four basic purposes:

    1. Assistance in planning the audit and setting the scope of the exam

    2. Record of the evidence gathered, procedures completed, tests performed, and analyses conducted during the examination process. The workpapers demonstrate the quality of the examination.

    3. Provide support for technical conclusions

    4. Basis for review by management. Case files will be reviewed for many purposes. Well prepared workpapers facilitate the use of the file by numerous customers after the case is closed. If the workpapers are prepared well, others will be able to utilize the file effectively.

4.75.29.16.3  (06-04-2009)
Workpaper Considerations

  1. Workpapers must be legible and organized. The workpapers are required to be identified by the appropriate ESAIN number and must be in a logical order within each section so others such as a reviewer or Appeals Officer can easily follow your work product.

  2. Workpapers should appropriately document techniques used and conclusions reached.

  3. Relevant workpapers should be separated from extraneous documents. Extraneous documents should be properly disposed of or returned to the taxpayer.

  4. Workpapers must properly document examination activities.

4.75.29.16.4  (06-04-2009)
Managerial Involvement

  1. The workpapers will include all required Case Manager comments and document managerial involvement during the development of the case. This may be done via notations in the Case Chronology (Form 5464).

4.75.29.16.5  (06-04-2009)
Format Workpaper

  1. The size and complexity of team examination cases require workpapers be standardized to a greater degree than other examinations. An agent's workpapers are subject to review by the Team Coordinator, Case Manager, EO TEP Special Review staff, Appeals SBSE-TEGE, Area Counsel, and possibly a Joint Committee reviewer, and more importantly, the informal review by other agents who must rely on existing workpapers as they examine related entities and resolve related issues. Workpapers indexed in a uniform manner will permit efficient research.

  2. Use of the EO Standard Audit Index Number (ESAIN) system is required on all team examination cases except where the Case Manager approves deviation. The ESAIN represents a compilation which is analogous to a "chart of accounts" within the accounting profession. However, for the EO specialists, the chart of accounts may mirror the primary item’s main categories. The EO specialists should use the ESAIN Numbering System as illustrated in Exhibit 4.75.29-7, ESAIN for EO Team Examinations. Further, the ESAIN can be expanded to allow the specialists to identify additional audit areas utilizing the general scheme.

  3. The workpapers should be clear, concise, legible, initialed, labeled, dated, organized and indexed. This includes correspondence with the taxpayer, workpapers and presentation of supporting documentation, non-pattern letters and information document requests.

  4. Footer - The bottom right hand corner of each workpaper and any folded papers will be marked in a manner so the following information is visible without unfolding papers.

    • Paper Number;

    • Total Pages; and

    • ESAIN.

  5. Lead Page - Form 4764-B, Large Case Examination Plan, should be prepared for each ESAIN account examined. This form will serve as a summary of workpapers for each ESAIN account and will be numbered as page 1.

  6. Numbering - Workpapers should be numbered consecutively for each ESAIN. Form 4764-B will always be page 1. Total number of pages will always be shown on Form 4764-B.

  7. Indexing - ESAIN is designed to be a flexible indexing system providing the uniformity required in EO team examination cases. Each ESAIN consists of a minimum of three digits. Please refer to Exhibit 4.75.29-7 for an illustration of the applicable ESAIN numbers.

  8. Heading - Each workpaper should be headed with the following information.

    • Name of Primary Case;

    • Entity Being Examined;

    • Years Covered by Workpaper;

    • Source of Information;

    • Team Member's Initials; and

    • Date Prepared

  9. Retention - There is a requirement to maintain workpapers (IRM 4.10.9) for both open and closed TEP examinations. The workpapers are to be kept at the POD of the Case Manager

  10. Electronic workpapers should be retained via CD, Flash Drive or other suitable media. All workpapers, both written and electronic, should be retained in the closed case files.

4.75.29.16.6  (06-04-2009)
Information Document Requests Form 4564

  1. A formal, structured process has been established to request and secure information from the taxpayer. This process promotes cost effectiveness and quality examinations with the least burden on both the taxpayer and the government. The importance of timely responses is emphasized as it will improve cycle time and currency of cases, while at the same time, focusing on early issue resolution.

4.75.29.16.6.1  (06-04-2009)
Information Document Request Process

  1. The audit process is enhanced by an IDR process centered on communication, conciseness and timely responses by both the taxpayer and the TEP examination team. It is imperative the IDR process of issuance, response and follow up be monitored for timeliness. This is not to preclude the examination team from using judgment on a case-by-case basis.

  2. This process encourages collaboration between the taxpayer and IRS personnel to agree on and provide information needed to support an examination. This process will do the following:

    1. Provide more complete and timely responses to IDRs;

    2. Provide open and meaningful communication between all team members and the taxpayer;

    3. Provide consistent treatment of taxpayers;

    4. Heighten taxpayer awareness of the IDR Process;

    5. Improve understanding of expectations;

    6. Improve the timeliness and the quality of documentation received;

    7. Establish a sound foundation for issue development; h. Promote earlier issue resolution;

    8. Promote better written and complete IDRs; and

    9. Improve awareness of outstanding IDRs.

  3. This process requires effective collaboration between the IRS and the taxpayer and begins at the opening conference where the process will be discussed in its entirety. It is essential to conduct meetings with the taxpayer at key points of the process to ensure a more active involvement by all parties. In general, a series of conferences and follow ups with the taxpayer on IDRs will be conducted.

4.75.29.16.6.2  (06-04-2009)
Information Document Request General Procedures

  1. Form 4564, Information Document Request, or a computer facsimile thereof, should be used to request information from the taxpayer. Four copies of the form should be prepared and distributed as follows:

    1. The original and one copy will be given to the taxpayer, one to be retained in the taxpayer’s files and one to be returned with the information requested;

    2. The third copy of the IDR will be filed in the IDR Log. The Team Coordinator is responsible for maintaining the IDR Log. Appropriate information should be listed in the log as IDRs are issued. The Case Manager is responsible for ensuring that the IDR Log is properly, accurately, and timely completed;

    3. The fourth copy will be maintained by the issuing agent in the relevant section of the case file

  2. Discussions should be held prior to IDR issuance, unless agreed otherwise. The taxpayer should be informed of the intent of an IDR, and the purpose should be stated on the IDR (i.e., identify the issue).

  3. The Service and the taxpayer should meet to review the IDR for completeness and clarity prior to issuance of an IDR. All IDRs should be entity specific, unless agreed otherwise.

  4. An understanding should be reached that all IDRs and responses will go through the IRS Team Coordinator or primary revenue agent and the designated taxpayer representative.

  5. The examination team should reach an agreement with the taxpayer regarding a standard response time for IDRs, and an understanding that the taxpayer will advise the examination team as early as possible if additional time is needed.

  6. The examination team should advise the taxpayer within an agreed time frame, after receiving an IDR response, whether it considers the response complete and if additional information or action is required.

  7. Prior to issuance to the Taxpayer, all IDRs should be reviewed by the Team Coordinator to ensure they are resolution-focused. (Do the questions asked add value to the identification or development of an issue?).

  8. Requests for information should be followed up and documented by the Team Coordinator or team member in the IDR Log. In instances where delays are encountered in the receipt of information, the Case Manager will become involved. Where appropriate, specialists’ managers and other management officials should become involved when unusual delays are encountered. See Managing the IDR Process below.

  9. The Team Coordinator or revenue agent should follow up with the taxpayer when the IDR is past its due date for return. Problems that exist and reasons for the delay should be discussed and resolved if possible, and the Case Manager should become involved if necessary. All discussions/actions should be documented. If it appears the requested information will not be forthcoming, the examination team should:

    1. Evaluate other means or sources for obtaining the needed information;

    2. Prepare and issue a follow up IDR to request the information that remains outstanding. The response date for the follow up IDR should be a reasonable date based on discussions with the taxpayer.

    3. Attach the original IDR to the follow up IDR, or incorporate the original IDR wording in the follow up IDR using the same IDR number.

4.75.29.16.6.3  (06-04-2009)
Managing the IDR Process

  1. The use of delinquency procedures does not preclude the examination team from using judgment on an issue-by-issue basis. Realistic and cooperatively reached due dates for information requested by an IDR are key to the process. It is a good practice to have a pre-IDR meeting to ensure the IDR responses address the specific needs of the examiner. At this meeting the agent and the taxpayer discuss exactly what is needed and how best to obtain the information in order to eliminate ambiguity. A realistic due date can be mutually agreed upon after the pre-IDR meeting is held. There is latitude for the Team Coordinator to extend the IDR due date but the following should be adhered to: There should be continuous dialogue with the taxpayer and follow up and the examiner should document the case file if follow up is not made during the specified time frames, by including the revised due dates and stating the reason(s). Similarly, the examination team should advise the taxpayer of the status of the IDR response. This includes informing the taxpayer within 15-30 days after receiving the response as to whether the IDR response was sufficient or will require a follow up.

  2. The Team Coordinator should follow up with the taxpayer when the IDR is delinquent. Problems that exist and reasons for the delay should be discussed and resolved if possible, and the Case Manager should become involved if necessary. All discussions/actions should be documented. If it appears that the requested information will not be forthcoming, the examination team should refer to Item 9 above. A written communication should be forwarded to the taxpayer if the IDR is delinquent more than 15 days.

  3. If a continuing delinquency persists, the team should consider the following steps:

    1. Address the issue and emphasize the importance of factual development;

    2. Ascertain the taxpayer’s intention to comply with the request;

    3. Discuss consequences of not responding to the IDR;

    4. Consider issuance of a Form 5701, Notice of Proposed Adjustment;

    5. Consider involving high level IRS officials and senior corporate officers;

    6. Consult with Area Counsel as needed

    7. Clearly explain the consequences for not complying with the IDR

    8. Attempt to reach an agreement on a specific date by which the taxpayer will comply with the IDR;

    9. Third party contacts, if appropriate, and

    10. Consider the issuance of a summons.

  4. The following are some factors to consider when deciding whether an exception to the delinquent procedures is appropriate:

    1. Taxpayer’s history of cooperation and IDR responses; Taxpayer’s attitude;

    2. Team Coordinator and team member experience; and

    3. Availability of resources or information that changes the scope and depth of the examination.

4.75.29.16.7  (06-04-2009)
Form 5701’s Notice of Proposed Adjustments

  1. On TEP cases, adjustments are proposed as they are developed. Holding all adjustments until the end of the examination is a very inefficient practice on large cases. Proposing issues during the course of examination allows the taxpayer some time to: research the issue; discuss the issue with its counsel; and secure additional information.

    1. Form 5701, Notice of Proposed Adjustment (NPA), is used as a cover sheet for each adjustment given to the taxpayer. The Form 5701 cover sheet can be prepared utilizing a manual or computer facsimile. The narrative for each issue should be written in such a manner it can be included in a Revenue Agent Report (RAR) without further explanation. Form 886-A is used for purposes of the narrative.

    2. Form 5700, Issue Control Sheet or a facsimile, is a control reference and is used to assign numbers to all 5701s issued. The Team Coordinator maintains a printout of Form 5700, and the original Forms 5701 in a binder. This allows the Team Coordinator to be aware of the issues being addressed and provides the opportunity to discuss it with the appropriate team member prior to its issuance.

  2. Procedurally, the Case Manager will request assistance after he or she is satisfied the issue(s) are fully developed factually, and key legal questions have been researched and resolved. Whenever possible, a Notice of Proposed Adjustment, Form 5701, should be prepared by the Service and reviewed by the organization for accuracy. Where unagreed, the organization’s position should be received in writing as stated in the pre-examination conference agreement in Section One of Examination Plan. Form 5701 may be used for this purpose.

  3. Counsel Assistance - Area Counsel should be contacted early in the development of all significant issues. Counsel may recommend specific actions regarding issue development, such as:

    • Requesting specific evidence to support the Service position,

    • Using an economist or other specialist, and

    • Contracting for outside assistance

  4. Taxpayer Response - Taxpayers should provide their formal response to the proposed adjustments by the date agreed upon in the Communication Agreement. The responses to Forms 5701 should be negotiated during the preliminary meetings with the taxpayer and should be agreed upon by all parties at the opening conference.

  5. Suggested practices to incorporate into the development and issuance of Forms 5701 include:

    1. Maintain professionalism and pay close attention to the tone used in the NPA.

    2. Attach any pertinent schedules, computations, copies of documents, etc. to the NPA.

    3. Avoid references to workpapers in the NPA.

    4. Review your draft NPAs for accuracy prior to submitting them to the Team Coordinator for his/her review.

    5. Ensure all significant issues involving specialty areas (such as international, engineering, employee plans, etc.) are reviewed and discussed with the appropriate specialist and his/her manager.

    6. Be prepared to discuss pending proposed issues with the Team Coordinator and the Case Manager to obtain his/her concurrence.

    7. Present the Government’s position on a single particular issue to the taxpayer.

    8. Discuss pending proposed issues directly with the appropriate organizational official per the communications agreement.

    9. Remind the taxpayer of the agreed upon response time included in the communications agreement.

    10. Remind the taxpayer of the consequences for non-response to the Form 5701.

4.75.29.16.8  (06-04-2009)
ESAIN Numbering System

  1. The EO Standard Audit Index Number (ESAIN) System sets up a uniform method of indexing workpapers in the TEP examination. The ESAIN represents a compilation that is analogous to a "chart of accounts" within the accounting profession. However, for the EO specialists, the chart of accounts may mirror the main categories shown on the Form 5772, EO Workpaper Summary. Use of the ESAIN system is required on all team examination cases except where the Case Manager approves deviation. A copy of the ESAINS is included in Exhibit 4.75.29-7.

  2. Form 4764-B, TEP Examination Plan will be prepared for each ESAIN account examined. This form will serve as a summary of workpapers for each ESAIN account. Workpapers will be numbered consecutively for each ESAIN; Form 4764-B will always be page 1. The total number of pages will always be shown on Form 4764-B.

4.75.29.16.9  (06-04-2009)
Statute Controls

  1. Statute Extension - The Team Coordinator is responsible for complying with the provisions of IRM 25.6.22 and 25.6.23. He/she is also responsible for making timely notification to the Case Manager at any time these provisions are not being followed. Revenue Agents should always be aware the person in possession of the return is ultimately responsible for the protection of the statute of limitations. Revenue Agents are also responsible for the protection of the statute of limitations for open years of related entities and subsequent years not open for the entity under examination, where it is necessary to protect the government's interest.

  2. The Team Coordinator (at the direction of the Case Manager) is responsible for soliciting statute extensions on each return assigned. A return with a statute date that may expire within 240 days is subject to the statute control procedures described in IRM 25.6.23; Examination Process – Assessment of Statute of Limitations Control. These procedures must be initiated no later than 240 days prior to the statute expiration date. They include:

    1. Verifying the statute date;

    2. Flagging the case;

    3. Completing Forms 895, Notice of Statute Expiration;

    4. Notifying the Case Manager and taxpayer, as necessary;

    5. Securing a consent to extend the statute when appropriate; and

    6. Updating AIMS.

  3. If a consent to extend the statute is requested, IRC §6501(c)(4)(B) provides the examiner must advise the taxpayer of their right to decline to extend statute date or to request that any extension be limited to a specific period of time and/or to specific audit issues. The examiner should also provide the taxpayer with a copy of Publication 1035, Extending the Tax Assessment Period. These actions must be documented in the case file. (See Publication 5, Taxpayer Bill of Rights). Area Counsel is available to assist Case Managers in drafting restricted consents and other statute extension forms. Case Managers must follow requirements regarding the Notification of Taxpayer's Rights, when seeking a statute extension. The Service employee requesting the consent must document in the case file that the required notification was made. A copy of the Letter 907 (DO) will be maintained in the case file. If a consent is secured, then the copy of Letter 907 will be attached to the back of the executed consent form and the consent will be attached to the tax return in accord with the instructions at IRM 25.6.22.5.11. If the consent is not secured, then the copy of Letter 907 will be attached to the back of the retained file copy of the unexecuted consent form. Significant periods of case inactivity or delays must be explained.

4.75.29.17  (06-04-2009)
Case Manager Responsibility

  1. As the examination continues, the Case Manager, along with the Team Coordinator is responsible for monitoring the progress and/or documenting the reasons for any delays.

4.75.29.17.1  (06-04-2009)
Monitoring the Examination

  1. Monitoring case progress is a necessary function of the Case Manager to determine the need for plan revision and rescheduling based on evidence obtained during the examination. The examination plan is not a static tool. Successful Case Managers plan throughout the examination to take advantage of additional information. Risk analysis should be performed to properly assess the viability of issues and appropriateness of the resources being used.

  2. A variety of methods are available to the Case Manager to accomplish this objective including on-site visits, case reviews or critiques and status reports. This continuing risk analysis should consider the following as appropriate to the TEP examination:

    1. Analysis of Information Document Requests (IDR) for timeliness, quality, etc.

    2. Analysis of Notices of Proposed Adjustment, Form 5701, for accuracy and completeness by the agent and responsiveness by the taxpayer;

    3. Review of TEP quarterly reports for staff day comparison to plan; and

    4. Review of time expended by team members and examination procedures used on issues assigned.

  3. Case Managers may have several team examinations in the planning stage or in process at any given time. Therefore, the Case Manager must rely upon the Team Coordinator for the day-to-day coordination of a team examination. The communications section of section one is the most effective way to document the role of the Team Coordinator and team members.

  4. Planning is necessary for monitoring and controlling the examination as well as for future planning purposes. Each team member may record his or her time by issue on the Form 5700 or similar Issue Control Sheet. The Case Manager's analysis of this information:

    1. Will help him or her to make decisions regarding adjustments to the plan; and

    2. Will provide evidence the high priority areas are being developed early in the examination and according to plan.

  5. Where two or more team members are engaged in the development of an issue, or are applying time to the same line item, but in different entities, they will provide the information needed to compare actual time spent with the planned time. This system of recording time by examination segment will only be used by the Case Manager as a means to effectively manage the case. It is not intended nor should it ever be used for personnel evaluation purposes.

  6. The Case Manager is responsible for monitoring time spent by all team members. Special attention will be paid to the use of the appropriate TEP project codes for AIMS, ETS, and EOIC.

  7. The transfer of all EO team member time to the Team Coordinator can be done monthly or upon completion of the team member's assignment. This decision is at the discretion of each Case Manager.

4.75.29.17.2  (06-04-2009)
Time Planning Responsibility

  1. The Case Manager is responsible for planning the time necessary for each examination. The planning is essential in order to ensure staff resources are effectively utilized and concentrated in the most productive areas. The detailed projection of time requirements in audits must reflect the team member’s and Case Manager’s best judgment after taking into account everything learned about the organization selected.

  2. Other planning considerations:

    • Experience of the Case Manager and team members,

    • Extent of computer assisted audit techniques,

    • Location of records,

    • Travel time (on-site vs. assistance or support),

    • Organization’s staffing,

    • Organization’s cooperation,

    • Effectiveness of the organization’s retrieval system,

    • Extent and nature of in-depth probes, and

    • Complexity of examination areas selected.

  3. The timeliness of the examination should be carefully monitored and the plan modified when necessary. Modifications may be needed when new information becomes available. The entire team is responsible for monitoring the examination. Monitoring the TEP examination is the key to modifying the examination plan. The timing of involvement by specialists, consultants, counsel and administration of resources should be monitored.

  4. A method of planning time should be used as a baseline to help monitor progress of key areas. Modification of the plan may include time allocations, target dates, audit assignments (including support examinations), and audit procedures. Significant plan modifications should be written and communicated to appropriate individuals.

  5. The Team Coordinator and specialty managers should actively participate in the progress of the TEP examination.

  6. Team meetings should be scheduled to monitor the examination and should include the organization, when appropriate. The final monitoring meeting should be the post examination critique with the organization.

  7. Team members must keep in mind that in estimating time they are dealing with many variables and unknowns. Initial estimates of specific time requirements should be as accurate as possible, however, Case Managers are expected to revise and adjust the time allocations during the course of the examination (on-going risk analysis). This ensures the application of time to those areas having the greatest compliance potential.

    Caution:

    Time planning records are not intended, nor should they be used for evaluative purposes.

4.75.29.17.3  (06-04-2009)
Coordination and Planning - Team Coordinator Responsibilities

  1. One of the primary responsibilities of a Team Coordinator is to serve as a focal point for communications between team members and the organization and/or team members and the Case Manager during the examination.

  2. Other important duties of the Team Coordinator include:

    1. Immediately advising the Case Manager of any apparent need for changes in the examination plan or the procedures being used;

    2. Reporting to the Case Manager any developing problems regarding organization/team member relationships;

    3. Maintaining the Information Document Request Log;

    4. Currently advising the Case Manager of significant proposed issues and the need for discussions with team members or the organization;

    5. Maintaining the Issue Control Sheet, if used;

    6. Periodically updating the planning file;

    7. Bringing all the important pieces of the final report together in a professional, orderly and useful package; and preparing Revenue Agents Report (RAR) and other related reports and documents;

    8. Participating in all conferences;

    9. Bringing in specialists from other areas as needed and coordinating issues assigned;

    10. Assigning duties to team members;

    11. Maintaining communication with the taxpayer;

    12. Assisting Case Manager in controlling and extending the statutory period of assessments on controlled returns under examination or related to the examination;

    13. Developing issues

  3. Maintaining the case chronology record is the responsibility of the Team Coordinator. The Case Chronology Record documents the specific examination activities to include the instances where delays are encountered during the audit. This activity record, maintained by each agent should present a complete and accurate case history. Variation between and among cases as to the forms of case chronology records can be expected. The Team Coordinator is responsible for communicating to the team the acceptable format and content of an activity record. Each agent is expected to maintain their case chronology until their participation in the exam ends. An activity record should be kept current as long as the examination or any subsequent activity is ongoing.

4.75.29.18  (06-04-2009)
Management of Differences

  1. The Case Manager is responsible for the prompt and proper disposition of problems and disagreements and resolving those that come within his or her supervisory authority.

  2. Most examinations are completed in a highly professional manner and without any major disputes or differences of opinion arising among team members or with the taxpayer. Where such differences do arise, the Case Manager is expected to resolve them expeditiously and, where possible, to the mutual satisfaction of all interested parties.

  3. The prime consideration in resolving differences as to scope and depth is that the objectives remain consistent with national program and area office objectives. When the differences involve another operational division or TEGE function, the Case Manager is responsible for deciding the position to be taken. If necessary, the responsible Area Manager should be involved to assure an equitable resolution of serious differences.

  4. Where differences arise regarding the nature of the team member's assignment or how the assignment is to be carried out, it is important that both parties understand and respect the other's responsibilities. The Case Manager is responsible for establishing the scope and depth of an audit. Each team member is responsible for developing the specific audit procedures he or she will use in carrying out his or her assignment. The Case Manager's responsibility regarding approval of the procedures includes insuring the team member's procedures:

    1. Are consistent with the scope and depth of the examination;

    2. Are consistent with the overall examination plan;

    3. Do not duplicate procedures performed by other team members; and

    4. Result in effective and efficient utilization of personnel.

4.75.29.18.1  (06-04-2009)
Differences Between Team Members

  1. Where differences of opinion arise among team members as to how a particular technical issue should be treated, the Case Manager should consider all views expressed and then make a firm decision.

  2. If the technical issue involves a Specialist's area, the Case Manager should seek consultation and advice from the Specialist’s Manager.

4.75.29.18.2  (06-04-2009)
Differences Between Taxpayer and Team Members (Including the Case Manager)

  1. Differences with the taxpayer may involve a disagreement regarding case management or may relate to a technical area.

  2. Differences in the case management area may be due to an inadequate plan, failure to follow the plan, or ineffective case management.

  3. The Case Manager should be on guard for tactics by the taxpayer of using personality differences between team members to break up the effectiveness of the examination team. However, both the Case Manager and the team members involved should be willing to consider the taxpayer's point of view. If the Case Manager finds the taxpayer's position is correct, he or she should instruct the team member of the approach to be taken.

  4. Taxpayer and team member differences, if left unresolved, are likely to result in polarization and a breakdown of communication and/or cooperation necessary for an efficient examination. Corrective action must be taken immediately.

  5. Some Case Managers include in Part 1 of the examination plan, a provision for quarterly meetings with the entities officer or representative to discuss the examination progress. Also, these meetings have served to successfully forestall and resolve developing problems.

4.75.29.18.3  (06-04-2009)
Technical Areas

  1. Most of the differences encountered with the taxpayer will involve a position taken on technical issues. Ordinarily, the Case Manager's role is to support the position taken by the team members. However, the Case Manager must fully consider the taxpayer's position on the issue. If the Case Manager is convinced the argument or information submitted by the taxpayer warrants a change in position, he or she should carefully explain the change to the team members and make certain he or she understands the changed position and the reason therefore.

4.75.29.18.4  (06-04-2009)
Reversing the Team Member

  1. When the position taken by the Case Manager is contrary to that of the team member, the following steps should be taken:

    1. He or she should carefully explain the reasons for his or her position to the team member;

    2. If the team member is from another group, including specialist groups, it would be helpful if the Case Manager explained his or her position to the team member's regular manager;

    3. The team member should be given ample opportunity to accept the Case Manager's position, as his or her own; and

    4. If after a complete discussion of the matter the team member is still in disagreement with the Case Manager's decision, he or she must, nevertheless, follow it. A sound management practice for the Case Manager to follow is to provide the team member with written instructions on the matter in question and retain a copy for the files so that it may become a part of the case record.

4.75.29.18.5  (06-04-2009)
Resources Available to the Case Manager

  1. In addition to reference publications, the Case Manager has many resources he or she can draw upon, through channels, in determining his or her course of action in conflict situations, such as:

    1. His or her own EO Examinations staff;

    2. The staff of support area offices;

    3. Other managers whose agents might be involved in the conflict;

    4. Office of the Commissioner (TEGE);

    5. Office of Director, Exempt Organizations;

    6. Area Counsel.

4.75.29.19  (06-04-2009)
Section lV - Special Closing Aspects of TEP Cases

  1. TEP Examination closures follow normal AIMS processes and closing procedures. However, TEP Examinations also have unique closing procedures and these are identified in the following section.

  2. Generally, all team members will not complete their work at the same time. When the individual team member completes his or her examination assignment, the following actions are required:

    1. Prepare his or her portion of the audit report and forward it to the Team Coordinator; and

    2. Close out cumulative time on Form 6490 to the Team Coordinator, if not done previously.

  3. Team members will attach their workpapers to the appropriate form for the item or transaction examined. The workpapers should support the conclusion reached by the team members.

  4. All forms, with supporting workpapers, will then be forwarded to the Team Coordinator for assimilation into the final examination report.

  5. All specialists’ reports must be included as a part of the case examination file.

  6. The Team Coordinator should make whatever editorial changes are needed, so the portion of the report going to the organization, is uniform as to composition and style of presentation. A team member’s transmittal letter, if one is submitted, should not be changed.

  7. After the Team Coordinator completes and assembles the total examination report, he or she will forward it to the Case Manager for review.

  8. After the Case Manager reviews the examination report, the case will be closed in the following manner:

    1. Original return(s), return charge-out, AIMS closing document Form 5599, examination letter, proposed agreed/unagreed reports and other documents for processing, e.g., Form 2363-A, will be placed in a separate folder with a Form 3198 and forwarded for appropriate closing actions; and

    2. A copy of each item listed above in item "a" and the balance of the examination case file will be maintained by the Team Coordinator for future planning purposes.

  9. Upon completion of the TEP examination, and verification of AIMS status 80 or higher, for each return in the TEP case, the TEP case should be reported as closed with a TEP Closed Case Report prepared and forwarded to the Area Office for approval and subsequently forwarded to the TEP EPP Analyst for updating the TEP work-plan. (See procedures for Closed Case Report).

  10. Upon closing each TEP case, either included in the TEP Closed Case Report or as an attachment thereto, it should be identified whether there is an historical file for the taxpayer/case, and if so, identify where it is maintained, providing the name of a person and telephone number to contact for the file.

  11. Workpapers not retained as part of the historical file may be sent with the closed case file or retained at the group level as determined by the Case Manager.

4.75.29.19.1  (05-22-2012)
Assistance from the EO Mandatory Review Staff

  1. Assistance from the EO Mandatory Review Staff may take the form of either technical and procedural inquiries for assistance in resolving issues that have been adequately researched by the examiners, but who are still unsuccessful in resolving the issue or questions.

  2. The Case Manager determines the need for requesting assistance from EO Mandatory Review. Routine requests will not be made. Written requests for assistance will be routed to the Manager, EO Mandatory Review, who will determine the need for assistance after assessing staffing, type of case or problem, and if necessary, discussion with the appropriate Area Manager. Where there is a difference of opinion on whether assistance from EO Mandatory Review should be requested, the decision will be made by the Manager, EPR.

4.75.29.19.2  (06-04-2009)
Assistance for EO Special Review Cases

  1. Closed cases should be retained at the Post of Duty of the Case Manager for no longer than 270 days after closing for potential TEQMS case review selection. If after 270 days passes, the case can be assumed to not have been selected for review.

4.75.29.20  (06-04-2009)
Joint Committee Cases

  1. Joint Committee cases should be handled by procedures outlined in IRM 4.36, Joint Committee Procedures.

4.75.29.20.1  (06-04-2009)
Overview of the Joint Committee Process

  1. A refund or credit subject to Joint Committee Taxation (JCT) review can arise from either an examination or the campus forwarding to the field unpaid claims or tentative allowances in excess of the jurisdictional amount. The examiner is responsible for determining whether a case falls under Joint Committee jurisdiction. The fact a return or examination must be reported to JCT does not alter the nature of the examination that may be conducted, nor does it limit the examiner's ability to survey the returns if this is the action deemed appropriate. The present jurisdictional amount is $2,000,000, the aggregate of the net amount of the refund(s) and previously assessed interest attributable thereto. (See IRM Section 4.36.2.4.1).

  2. A specialist reviews the case files for procedural and technical accuracy and prepares the report that is submitted to the JCT. Once the approving official has signed the report, it is forwarded to the Joint Committee Program Analyst in LB&I Performance, Quality and Audit Assistance for processing and transmission to the Refund Counsel Office of the Joint Committee on Taxation.

  3. The manual is organized to follow the processing of a Joint Committee case from inception to completion.

    • IRM 4.36.2 discusses determining if a case falls under JCT jurisdiction. It also outlines the procedure for determining whether a multi-year examination case with deficiencies and over assessments falls under JCT jurisdiction.

    • IRM 4.36.3 describes the examiner's responsibilities, including documentation requirements and statute control. It also addresses examination procedures for issue support and dispute resolution.

    • IRM 4.36.4 provides guidance for the specialist's review and report preparation responsibilities, including procedures relating to issue support and dispute resolution.

    • IRM 4.36.5 discusses the various reports that may be submitted to the JCT.

4.75.29.21  (06-04-2009)
Completing Unagreed Cases

  1. Procedures for Area Offices, pre-appeal conferences and post-appeal conferences are discussed below.

4.75.29.21.1  (05-22-2012)
30-day Letter

  1. The 30-day letter will be issued by the Case Manager. When a TEP taxpayer requests an extension in order to respond to the 30-day letter, the Service will grant up to an additional 60 days to prepare the protest.

  2. There are additional requirements for granting extensions to TEP taxpayers:

    1. The request must be made in writing to the Case Manager and state the reasons why additional time is needed;

    2. If the statute of limitations will expire within 180 days, and the granting of an extension will not leave sufficient time on the period to adequately process the case, the extension will be contingent upon securing a consent to extend the statute;

    3. When the extension is granted, the new protest due date should be given to the taxpayer to avoid any conflicts.

    4. The granting of the extension to file the protest will not extend the period from which the Service will begin to compute the additional interest under IRC §6621(c) for large corporate underpayments.

  3. The Case Manager will carefully review the protest filed by the taxpayer within 30 days of receipt. This review will be in writing and will address each point raised by the taxpayer which is inconsistent with the factual position presented in the Revenue Agent’s report. The review will also include appropriate responses to any new issues raised by the taxpayer and an attempt must be made to secure any new records or documentation to which the taxpayer refers. By conducting a thorough analysis of the protest, the Case Manager can provide the Appeals Officer with valuable information to thoroughly consider the taxpayer’s claims.

    Caution:

    The rebuttal to the taxpayer’s protest must be shared with the taxpayer

4.75.29.21.2  (06-04-2009)
Pre-Appeals Conference Procedures

  1. Section 1001(a)(4) of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA ’98), Pub. L.105-206, prohibits ex parte communications between Appeals Officers and other Internal Revenue Service employees to the extent such communications appear to compromise the independence of Appeals. Ex parte communications are defined as communications that take place between Appeals and another Service function without the participation of the taxpayer or the taxpayer’s representative.

  2. This prohibition is not limited to oral communications, but encompasses all communications between Appeals and another Service function, oral and written, manually or computer generated. Please refer to IRM 11.3.22, Disclosure to Federal Officers and Employees for Tax Administration.

  3. To ensure compliance with ’RRA 98, section 1001(a)(4), EO Examinations and/or Appeals will notify the taxpayer or the taxpayer’s representative and give that taxpayer or taxpayer’s representative the opportunity to attend any pre-conference meeting with Appeals.

    Note:

    For additional guidance refer to Revenue Procedure 2000-43, 2000-2 C.B. 404, Prohibition of Ex Parte Communications between Appeals Officers and Other Internal Revenue Service Employees, which currently takes precedence over other instructions, directions, or guidance.

  4. The purpose of the Pre-Conference meeting is to discuss the issues, protest and EO Examinations’ written response to the protest. A frank discussion of the issues and particular facts and circumstances surrounding the development of the case will add to Appeals’ knowledge of the case. The need for any additional development, resources, specialists or expert witnesses will be discussed at this meeting.

  5. It is expected the meeting will serve to establish lines of communications between Appeals and EO Examinations that will be maintained throughout consideration of the case.

  6. During the conference, EO Examinations participants should share their views on the disputed issues, including their assessment of litigating hazards and the strategies involved in setting up adjustments on particular issues. However, the conference should not be used as a vehicle for securing a commitment from Appeals to defend any particular issue, commit to particular settlement positions, or otherwise negotiate the settlement posture of Appeals on the case.

4.75.29.21.3  (06-04-2009)
Requesting a Pre-Appeals Conference

  1. In order to schedule a Pre-Appeals conference, the Case Manager should prepare a written memorandum noting the protest has been reviewed and requesting that a meeting be scheduled. This request memorandum, which includes a written response to the taxpayer’s protest and a brief statement concerning the issues in the case which EO Examinations would like to discuss at the meeting, should be attached to the case file when it is forwarded to Appeals.

  2. The Area Director, Appeals or the appropriate Appeals Team Manager or Appeals Team Case Leader will contact the requestor and the Area Counsel attorney, if appropriate, to determine a mutually agreeable date for the meeting. As noted above, the date for the conference must be coordinated with the taxpayer/representative.

  3. These procedures do not prohibit requesting conferences on other types of cases, e.g., cases with industry-wide impact, specialized industries or coordinated issues, nor do they prohibit informal communication and discussion of issues between Appeals Officers and agents and specialists, although any discussion with Appeals, formal or informal, may be subject to the ex parte communications limitation set out in RRA 98 Sec. 1001(a)(4), and amplified in Rev. Proc. 2000-43. Refer to IRM 11.3.22, Disclosure to Federal Officers and Employees for Tax Administration.

4.75.29.21.4  (06-04-2009)
Participation in Pre-Appeals Conference

  1. EO Examinations participants will usually consist of the Case Manager or Group Manager, Team Coordinator, and only those TEP team members, specialists and Specialists Managers involved with the issues set forth in the request memorandum.

  2. If an attorney from Area Counsel assisted EO Examinations in the development of the case, that attorney may be invited to participate in the meeting. If an attorney did not participate to a large degree in developing the case, either EO Examinations or Appeals may request the attendance of an attorney at the pre-conference meeting, should EO Examinations or Appeals SBSE-TEGE determine that an attorney’s participation will be helpful.

  3. An Appeals Team Manager will preside at the meeting.

4.75.29.21.5  (06-04-2009)
4.75.29.21.5 Other Communications

  1. Both EO Examinations and Appeals, should continue to encourage informal, ongoing communication during the time the case is under Appeals’ jurisdiction with a view towards facilitating prompt disposition.

  2. Open lines of communication can greatly expedite the completion of the case when new arguments or information are presented by the taxpayer, or there are other developments which are not anticipated at the time of the pre-conference meeting.

    Note:

    Any discussion with Appeals, formal or informal, may be subject to the ex parte communications limitation set out in RRA 98 Sec. 1001(a)(4) and Rev. Proc. 2000-43.

4.75.29.21.6  (06-04-2009)
Post Appeals Conference

  1. After Appeals action has been finalized on any covered case, an invitation will be extended to the appropriate EO Examinations personnel to discuss the outcome of the issues. This invitation can be declined, in writing, by EO Examinations. If an attorney assisted in the development or consideration of the issues or an attorney’s attendance is desired by EO Examinations or Appeals, that attorney may be invited to attend the meeting.

  2. The purpose of the post-closing conference will be to discuss the final resolution of the issues, identify areas where additional development is appropriate in future cycles, and identify any issues which may not have been raised by EO Examinations. This forum should be used by EO Examinations to gather data for subsequent examination of the taxpayer, including identification of rollover or repetitive issues. Where a case is settled or tried by Counsel, an invitation will be extended by Counsel to the appropriate EO Examinations and/or Appeals personnel, to discuss the final outcome of the case and make suggestions concerning the development of issues in subsequent cycles.

  3. If the case is litigated, this conference will take place as soon as practical following the trial. Counsel may hold another conference once the opinion is issued, if required.

  4. All formal meetings held under these procedures shall be documented, via a conference memorandum, signed by a representative of each function in attendance.

    Note:

    The prohibition on ex parte communications does not apply to post settlement conferences as long as post-settlement conference discussions are limited to issues in the closed cycle. Please refer to Rev. Proc. 2000-43, Prohibition of Ex Parte Communications between Appeals Officers and Other Internal Revenue Service Employees.

4.75.29.22  (06-04-2009)
Preparing of Historical File for Coordinated Examination Case

  1. During and throughout the examination cycle the Case Manager’s Binder is used as a "Historical File" . Upon completion of the examination the Case Manager’s Binder is updated with case items and utilized as a Historical File.

  2. The examination historical file should include, but is not limited to only these 20 elements;

    1. Tax Returns (subsequent and prior year returns, employment returns) related entity returns

    2. Statute Control Log

    3. Letters to the Taxpayer (Opening, third-party, 94-69)

    4. Referrals to Specialists and Counsel

    5. Pre-examination Conference: Agenda, PPT presentation, minutes

    6. Opening Conference: Agenda, PPT presentation, minutes

    7. Risk Analyses workpaper summaries

    8. Audit Plan (revolving to Final Plan with Conclusions)

    9. ESAIN Time Matrix and Agent Assignments, TEP Reports (revolving quarterly)

    10. Case Status Memos and Updates

    11. Other Correspondence and Memos

    12. Mid-cycle Review: Agenda, workpapers, risk analysis, minutes, and final write-up

    13. IDR Log (revolving monthly until final)

    14. Form 5700 Log and 5701s Issued

    15. Resolution Items: Meetings with Taxpayer and write-ups

    16. Legal Assistance (Counsel Memos, FSAs, TAMs, formal and informal advice, e-mails, correspondence, etc. from Counsel)

    17. RARs and Closing Agreements

    18. Final Closing Letters and Documents

    19. Post Exam Critique: Agenda, Presentation Documents, Taxpayer feedback, and minutes of meeting

    20. Other Items of Interest (i.e. prior audit letters, PLRs prior, etc.)

  3. The historical file of a taxpayer acquired or merged into another TEP case is invaluable to the Case Manager. The file should be transferred to him or her as soon as possible. If this is not feasible because of an ongoing examination, pertinent portions essential to the preliminary analysis should be duplicated and sent to the Case Manager assigned the subsequent examination.

4.75.29.23  (06-04-2009)
Post Examination Critique

  1. Each team examination case has its own unique features, and frequently changes its organizational or operational structure each year. Accordingly, the experiences of those involved in planning and executing team audits, are the best and most reliable sources of information for evaluating the effectiveness of these examinations. The purpose of a post examination critique is to solicit customer feedback and satisfaction information to be issued for future quality improvements. The post examination critique should be part of the examination historical file.

  2. The objectives of the critique are:

    1. To determine the effectiveness of the present examinations;

    2. To develop recommendations for improving the subsequent examination;

    3. To obtain data that will be useful to the subsequent examination team; d. To bring to the organization’s attention problems encountered, discuss possible solutions; and

    4. To give the organization an opportunity to present problems caused by the examination.

  3. The critique should be provided for in the examination plan. It should identify persons who will participate in the critique and the specific areas each will cover.

  4. Each Team Member should be instructed to maintain a folder containing summaries of topics and related background material to be used in preparation for the post-examination critique. The critique should be held during the final stages of the examination or within thirty days after the case is closed.

  5. In conducting the critique, the Case Manager and team members should remember the primary objective is to establish the groundwork for the next examination. Some of the more important topics to be discussed during the critique are:

    1. Were results commensurate with the time spent;

    2. Were audit procedures efficient and effective;

    3. Did the examination plan prove effective in monitoring and controlling the examination, provide adequate guidelines for team members in carrying out their assignments, facilitate a more orderly examination and adequately serve as a vehicle for coordination;

    4. How were organization and/or team member relationships? This discussion should be approached from the standpoint of identifying corrective actions the next Case Manager can take in solving or avoiding any problem area;

    5. Were responses to Information Document Requests timely? If not, how can this be improved for subsequent examinations;

  6. In appropriate cases, a post-examination critique may be held with the organization. It should be held separately with Service participants limited to:

    1. Case Manager;

    2. Team Coordinator; and,

    3. When appropriate, Area Manager.

  7. A written report is required on each case, and should be prepared by the Case Manager at the conclusion of the post-examination critique, and made part of the planning file for subsequent examinations.

4.75.29.24  (06-04-2009)
Case Management Assessments and Team Member Performance Appraisals

  1. At the conclusion of each team examination, involving personnel from a supporting Area Office or Team Members on detail from another group, e.g., Employee Plan examiners, International examiners, Engineers, Computer Audit Specialists, within the primary Area Office, the Case Manager will consider whether written comments regarding the Team Members’ work should be submitted to appropriate managers. When written comments are prepared, these comments should reflect not only how well the Team Member performed, but also what he or she contributed to the team effort in planning and executing the examination. However, such written comments will only be prepared when total time spent by a Team Member amounts to more than 25 staff days. The Team Members’ managers may, under special circumstances, request an assessment regardless of the time.

4.75.29.24.1  (06-04-2009)
Performance Assessments

  1. Some Team Members complete their assignments long before the conclusion of the examination. Notwithstanding the provisions in IRM 4.75.29.18 above, Case Managers should provide the Team Members’ Manager with evaluative comments when the assignments are completed.

  2. The Case Manager of a well-planned, well-conducted examination is in the best position to know the contributions each Team Member made to the examination and therefore, is expected to assess the work performed by each member. This responsibility must not be delegated.

  3. The Group Manager of a Team Member detailed to a team examination, needs feedback for use in the overall assessment of the Team Member. The Case Manager’s assessment is one of the factors to be considered in the total evaluation subsequently prepared by the Group Manager.

4.75.29.24.2  (06-04-2009)
Criteria for Assessment

  1. The Case Manager’s assessment should pertain to the Team Member’s contribution to the team effort and final product.

  2. For an assessment to be of value to a Team Member’s Manager, it should relate specifics and should be informative regarding such matters as:

    1. Name of case;

    2. Type and complexity of assignment;

    3. Time spent by Team Member and period covered;

    4. Manner in which assignment instructions were given to the Team Member;

    5. Manner in which communications were maintained between Team Member and Case Manager;

    6. Frequency of communications between the Team Member and Case Manager;

    7. Initiative and imagination displayed in planning the work, in developing audit procedures, and in carrying out the assignment; and

    8. The Team Member’s overall contribution to the team effort and ability to work in a team environment.

  3. In the case of work performed by a Team Member who is, or will be competing for promotion, the observations of Team Members should relate to those matters which the Group Manager refers to when preparing a promotion appraisal for subordinates.

4.75.29.24.3  (06-04-2009)
Evidence of Performance

  1. To assess team members from other groups, specialists, and support agents, a Case Manager has a great deal of evidence at his or her disposal.

  2. Communication Skills:

    1. Quality and completeness of information document requests (IDRs);

    2. Quality of the examination report; and

    3. Discussions of issues with taxpayer.

  3. Technical Skills:

    1. Consequence of issues developed;

    2. Development of factual support for issues;

    3. Quality of procedures employed; and d. Research applied to findings.

  4. Organizational Ability:

    1. Orderly approach to the examination;

    2. Presentation of findings; and

    3. Ability to concentrate on significant items without becoming entangled in a mass of data.

  5. Job Attitude:

    1. Harmonious relationships with other team members, Case Manager and the taxpayer;

    2. Manner in which Team Member kept Case Manager informed about activities; and

    3. Demonstrated reliability.

4.75.29.24.4  (06-04-2009)
Case Manager & Team Member Assessments

  1. There should be a continual exchange of viewpoints between the Case Manager and Team Members directed toward the identification of strengths and weaknesses in both case management and work accomplishment areas.

4.75.29.24.5  (06-04-2009)
Recognition for Outstanding Work

  1. The Case Manager should recognize outstanding work and recommend awards when appropriate.

  2. The Case Manager should consider the contribution of all Team Members in recommending awards, including individual and group awards.

  3. Performance awards are primarily the responsibility of the regular Group Manager of an Revenue Agent detailed to an examination team. The Case Manager should not hesitate to recommend an award be considered, and should contribute the basic information needed to initiate the appropriate award.

4.75.29.25  (06-04-2009)
Team Examination Program Case Reporting System Overview

  1. In order to effectively plan, monitor and report on the TEP examination program we have 2 tools in place to assist us. They are

    1. TEP Quarterly Monitoring Report

    2. TEP Closed Case Report

  2. Detailed instructions for these reports can be found on the TEGE Intranet website in the TEP library at http://TEGE.web.irs.gov/templates/exmtOrgsHome.asp.

4.75.29.25.1  (06-04-2009)
TEP Quarterly Monitoring Report

  1. The Quarterly Monitoring Report is used to update and revise information relative to the TEP examination as originally reported on the Case Selection Worksheet. This information is used to monitor planned TEP resources as reflected in the TEP Running Workplan for each area. The TEP Running Workplans are used to:

    1. track our progress in meeting certain TEP Balanced Measures/Workload Indicators.

    2. analyze our on-going TEP staffing and case work needs. In addition it is used to aid in constructing the next year’s fiscal year workplan.

  2. Quarterly Monitoring reports are due the 5th day following the quarter ending ETS period (December, March, June, September).

  3. The electronic file should include the Taxpayer’s name and quarter ending (ABC Organization Quarterly Monitoring Report September 06).

  4. Quarterly Reports are required on each current and new TEP Case (approved through the TEP Case Selection Process) that is already open or projected to be open during the current quarter.

    1. If the planned start date is subsequently changed to a later quarter, the Report will provide the revised start date and reason for delay.

    2. The next Quarterly Report for this case would then be due the quarter containing the new planed start date.

  5. A final Quarterly Report is due for a Closed Case (as described in IRM 4.75.29.8.2) the quarter following the date the case is considered close. The actual AIMS closed date will be noted on the final Report.

  6. The Quarterly Reports should be forwarded to EPP through the Area office.

4.75.29.25.2  (06-04-2009)
TEP Closed Case Report

  1. The Closed Case Report allows us to capture the TEP case’s significant issues and return data. The accuracy of this report is important to insure that the historical data is correct.

  2. The Closed Case Report must be completed for all TEP examinations including claims, limited scope examinations, project cases, LB&I referrals and other referrals. The closed case report consists of 2 parts:

    1. Part I is a single record database entry.

    2. Part II is a spreadsheet that lists all cases examined. The information reported on Part II discloses all of the related return closures not easily captured elsewhere.

  3. The Closed Case Reports are to be submitted 15 days after the last return is closed in Status 80 or above on AIMS.

  4. The TEP Closed Case Report is submitted to EPP.

Exhibit 4.75.29-1 
TEP Case Identification Worksheet and Instructions

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TEP CASE IDENTIFICATION WORKSHEET INSTRUCTIONS

A. General Instructions :

  • There may be instances where it is appropriate to include cases that were not previously identified under this procedure or, on rare occasions, to exclude cases that were systemically identified, but do not meet the definition of a TEP Case. For example, a parent EO's return may only have $50 million in revenue, but it may have five related entities and/or subs that have over $350 million in revenue and a coordinated team examination approach is needed to conduct the examination. This would clearly be a case that should be manually added to the universe. In addition, some EOs such as churches and universities do not have a Form 990 filing requirement and they, on a case-by-case basis, will be added to the universe manually.

  • On occasion, a general program group may initiate an examination of an entity not currently in the TEP universe that turns out to be a potential TEP case. When this happens the Group Manager should consult with the Area Manager and the Area Manager should consult with the TEP Program Manager to determine the best way to address the situation.

  • If the Case Identification Specialist (CIS) makes the recommendation for inclusion/exclusion, then the Specialist will prepare a TEP Case Identification Worksheet and forward it, through the Manager, EPP, to the TEP Program Manager for approval. All approved and disapproved worksheets will be sent to the CIS for retention. If the recommendation is approved the CIS will make the appropriate change to the TEP universe and maintain the approved worksheet.

  • If the recommendation for inclusion/exclusion is made at the group level, the Group/Case Manager will prepare the worksheet and forward through the Area Manager for concurrence. The Area Manager will forward to the TEP Program Manager for approval.

  • In the event that the Area Manager and TEP Program Manager can not agree on the approval of the manual inclusion/exclusion of taxpayer in the universe, the worksheet will be forwarded to the Manager, EPR for consideration

  • All approved and disapproved worksheets will be sent to the CIS for retention. If the recommendation is approved the CIS will make the appropriate change to the TEP universe. The CIS will return a copy of the approved or disapproved worksheet to the Group/Case Manager.

  • To complete and archive this process as efficiently as possible, the TEP Case Identification Worksheet will be transmitted and signed electronically via encrypted email using secured messaging.

B. Instructions for Manually Excluding a Case from the TEP Universe:

If a case was systemically included in the potential TEP Universe, but clearly does not meet the dollar criteria of a TEP case then it should be manually excluded (unless there are other reasons for keeping it in the universe such as multiple related entities and the use of a team examination approach) and the person making the recommendation should complete the worksheet included in this attachment. In considering whether a case should be excluded, consider whether the case is of the type that would benefit from on-going coordination by a team leader and would require significant involvement of a second agent or specialist. The mere nominal assignment or involvement of a second agent or specialist does not, in and of itself, result in a TEP case.

C. Instructions for Manually Including a Case in the TEP Universe:

The following two types of cases will have to be manually identified and added to the TEP Universe completing section B of the TEP Case Identification Worksheet:

1. A number of cases/entities may not meet the bright-line definition of a TEP case but examinations of these entities may require the extensive use of a coordinated team examination approach and procedures. In considering whether an examination may require the use of a coordinated team examination approach and procedures consider the following factors:

  • Multiple entities involved that require a second EO agent.

  • The use of a Computer Audit Specialist beyond standard and routine activities to initiate the examination.

  • The extensive use of Counsel in the examination. In these instances, Counsel will be an active Team member throughout the examination process.

  • The complexity of the issues requiring a second EO agent.

  • Issues requiring the use of one or more of the following: Income Tax Specialist, Employment Tax Specialist, International Agent, Engineer/Appraiser, Tax Exempt Bond Specialist, Employee Plans Specialist, Economist, Financial Product Specialist, and other specialists.

  • In all of the above the participation of the supporting EO agent/specialist should be substantial.

  • Any issue or trend that has impact beyond the examination. The CIS will determine the level of national impact.

  • The need for ongoing coordination by a team coordinator/leader.

2. Also certain types of organizations may not be required to file a return and are not reflected in the TEP Universe, but have assets or income that would meet the bright-line standard (i.e. state universities and churches), if a return was required.

Exhibit 4.75.29-2 
TEP Case Selection Worksheet and Workplan Information Schedule and Instructions

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CASE SELECTION WORKSHEET INSTRUCTIONS

The worksheet consists of four parts: Part I - Background Information, Part II - Consideration of Team Examination Approach, Part III - Consideration of Selection Factors, and Part IV - Approvals. You may also wish to refer to pages 5 to 9 of the Guidance Document and Exhibit C for more information.

Part I - Background Information

This part is self-explanatory and provides basic background information on the TEP case involved.

Part II - Consideration of Coordinated Team Examination Approach

On every TEP examination there is a presumption that a coordinated team examination approach will be employed and team examination procedures will be utilized. However, there will be certain exceptions where a TEP examination would not benefit from or be facilitated by a team examination approach. This may include certain limited scope examinations, less complex single entity cases, examinations limited to a filed claim, and others. Part II of the worksheet is used to document the recommendation of the Case Manager to use or not use a team examination approach and procedures.

Part III - Consideration of Case Selection Factors

Five case selection factors have been identified as the basis for selecting TEP cases relevant to our compliance strategies, concerns, and priorities. A description of the factors is provided below and should be consulted when completing the worksheet. It will be important that each relevant factor be fully and clearly annotated so that the basis for conducting an examination is fully documented. Case selection worksheets that do not contain a sufficient description of the case selection factors involved will not be approved and will be returned to the Area Office. On pre-selected cases such as market segment studies and compliance project cases you need only to complete that factor. The presence of the first three factors will generally be considered more compelling than the other factors.

FACTORS DESCRIPTION
REFERRALS This factor considers external and internal referrals (including requests from LB&I and SBSE). Consider the significance of the potential noncompliance and the quality of the information in the referral. If resources are currently unavailable, could an examination be delayed until resources are available?
MARKET SEGMENT STUDY OR COMPLIANCE PROJECT This factor considers examinations identified for examination by a study/project team as part of an approved study or compliance project. Generally these are mandatory examinations that will be conducted in accordance with the study/project instructions.
NONCOMPLIANCE INDICATORS & CLAIMS This factor considers noncompliance indicators or concerns with respect to a particular return (including classified claims not associated with an open examination), market segment, or a particular issue. Noncompliance indicators may arise from various sources including Classification’s review of available data, compliance checks, and an Area’s local knowledge about potential noncompliance.
CASE & INDUSTRY EXAMINATION HISTORY This factor considers our examination experience with a specific exempt organization, industry, or issue. In considering this factor review the prior examination history. Has there been a prior examination and, if so, was there significant noncompliance that would suggest a follow-up examination? This factor also considers coverage of a particular industry (what do or don’t we know about the industry).
OTHER This factor considers any other relevant variables. While available resources can be a factor, whether or not a case may require overnight travel should not generally be considered a negative factor.

The initiator information should be completed by the person who prepared the worksheet. Signatories are concurring/approving both the recommendation made with respect to selecting the case for examination and the decision to use or not use team examination procedures. The balance of this part is self-explanatory.

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WORKPLAN INFORMATION SCHEDULE INSTRUCTIONS

  • This schedule must be completed and attached to the TEP Case Selection Worksheet for each examination that is to be included in and or recommended to be included in the TEP workplan. The schedule will provide the information necessary to determine the impact upon the TEP workplan.

  • The schedule is designed to accommodate complex team examinations involving a number of returns and entities. If a coordinated team examination approach is not recommended for the examination, then the agent assigned the examination will be shown as the team coordinator on the schedule.

  • All of the information requested on the schedule must be provided. Entering "To be determined" or leaving an item blank will not be accepted. The workplan information requested represents an advanced estimate of both the amount of the resources that will be needed and when the resources will be needed to conduct the examination. Like any advanced plan it is expected that revisions may be made as more information becomes available.

Exhibit 4.75.29-3 
TEP Case Selection and Survey Process Overview

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Exhibit 4.75.29-4 
Criteria for Assignment of Work to GS-13, GS-12, and GS-11 Revenue Agents

GS-13 Criteria
  (a) Developmental assignment to prepare an internal revenue agent to become the team coordinator on subsequent audits. Has significant responsibility for more than one subsidiary, corporation, entity, or division; and
  (b) Complete responsibility for vertical audit of one or more subsidiaries, closely related corporations, entities, and/or divisions, which are GS-13 in terms of size, complexity, and/or significant issues as defined in IRM 4.75.7, EO Case Assignment Guide.
GS-12 Criteria
  (a) Complete responsibility for vertical audit of one or more subsidiaries closely related corporations, entities, and/or divisions, which are GS-1 2 in terms of size, complexity, and/or significant issues as defined in IRM 4.75.7, EO Case Assignment Guide;
  (b) Assignment similar to GS-1 3 (b), but limited responsibility for decision-making, raising issues, or for presenting results. (Support audits may be of this type);
  (c) Developmental assignments similar to GS-13 (a);
  (d) Responsibility for several accounts in a horizontal examination which requires a knowledge of a complex accounting system, e.g., four or five level of ledgers and journals, and a complex organization, e.g., different kinds of subsidiaries; and
  (e) Certain carryover adjustments from a GS-1 3 case (since issues are identical in earlier examination).
GS-11 Criteria
  (a) Complete responsibility for vertical audit of one or more subsidiaries, closely related corporations, entities, and/or divisions that are GS-11 in terms of size, complexity, and/or significant issues as defined in IRM 4.75.7, EO Case Assignment Guide;
  (b) Assignments similar to GS-1 2 (a), but with limited responsibility for decision making, raising issues, or presenting results. (Support audits may be of this type);
  (c) Audits of accounts on a horizontal basis, having a complexity similar to GS-12 (c) assignments. The content of the accounts is known, and direction as to methods and tests can be given. The internal revenue agent is expected to pick up any unusual items. Assignments may also include training in the accounting system of the taxpayer and large case audit techniques and problems;
  (d) Audit of accounts on a horizontal basis when the accounting system is relatively complex, e.g., there are subsidiary general ledgers and a consolidated ledger; and
  (e) Carryover adjustments from a GS-11/12/13 case (since issues are identical in earlier examination).

Exhibit 4.75.29-5 
Joint Audit Planning and Monitoring Tool

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Exhibit 4.75.29-6 
Agenda for Planning Meeting

  1. Background of the taxpayer.

  2. Prior examinations and results.

  3. Status of any cycles in Appeals.

  4. Claims filed by the taxpayer.

  5. Prior taxpayer relationships (how cooperative?).

  6. Review of tax returns.

  7. Review of Annual Reports.

  8. Review of SEC Reports.

  9. Review of Planning File.

  10. Review of prior RARs.

  11. Discussion of carry-over issues.

  12. Review of Industry Issues.

  13. List potential issues in this cycle.

  14. Discussion of Risk Analysis process.

  15. Discussion of financial interest in assignments.

  16. Review of IRM 4.46.3.7 (Resources Available to the Case Manager).

  17. Reporting requirements for team members.

  18. Presentations by all specialists.

  19. Roles of the Case Manager and Team Coordinator.

  20. What to expect during on-site visits by Case Manager.

  21. List of questions and topics to discuss with taxpayer during opening conference.

  22. 22 Discussion of taxpayer’s rights, privacy (disclosure), and unauthorized access to taxpayer’s accounts.

  23. Discussion of how third-party contacts will be handled.

  24. Discussion of statutes - notification of taxpayer’s rights.

  25. Discussion of privilege and tax accrual workpapers.

  26. Discussion of Technical Advice Requests, i.e., TAMs, TEAMs (taxpayer is involved) and possible Chief Counsel Advice requests.

  27. Discussion of STC’s requirement to provide feedback on team member’s performance if the case has a senior Team Coordinator.

Exhibit 4.75.29-7 
ESAIN for EO Team Examinations

ESAIN DESCRIPTION
000 General Planning/Miscellaneous
004 Pre-planning
006 Statute of Limitations
008 Historical/Administrative File
010 Subsequent Year Procedures
012 Case Chronology Record (Form 5464)
016 Meetings with Taxpayer and Team
020 Status Reports
024 Organizational Documents- Articles and By Laws
028 Determination Application and Letter
030 Exempt Activities Conducted
032 Other Activities
036 EOMF
040 Foundation Status for IRC §501(c)(3) Organizations
044 Current Operations
048 Board of Directors and Governance
049 Officers and Key Employees
052 Minutes of Meetings
056 Publications
060 Legislative Political Activities and Expenses
064 Taxable Subsidiaries, Joint Ventures, Partnerships/LLC’s Controlled Organizations
   
100s Asset Accounts
100-00 to 100-50 Cash, Receivables, Inventories, Buildings, and Other Assets including Investment and Endowment, Asset Sales, Acquisitions
   
200s Liability Accounts
200-00 to 200-50 Liabilities- Accounts, Mortgages and Other Payables (including to related parties)
   
300s Capital Accounts
300-00 to 300-50 Fund Balances- Current, Building, Endowment and Other Funds
   
400s Income Accounts
400-00 Revenue
400-01 Contribution Income
400-02 Direct Public Support
400-03 Program Service Revenue
400-04 Dividends, Interest and Investment Income
400-05 Rental Income
400-06 Gains/Losses from Sales
400-07 Other Revenue
410 Consideration of Unrelated Business Income
420 Net Investment Income and Adjusted Net Income for Private Foundations
   
500s Expense Accounts
500-00 Expenses and Distributions
510 Grants
520 Officer Compensation and Other Salaries
530 Employee Benefits
540 Pension Plans
550 Fundraising Expenses
560 Program Service Expenses
570 Administrative Expenses
580 Travel
   
600s Special Examination Issues
600 Package Examination
610 Subsequent Year Returns
620 Employment Tax Returns (940, 941, 945, W-4)
630 Other Returns (990-T’s, 4720 etc.)
640 Information Returns (W-2, 1099)
650 Pension Plan Returns
660 Probe for Fraud Legislative Political Activities and Expenses
670 Legislative Political Activities and Expenses
   
700s Penalties
710 Failure to File Tax Return Penalty
720 Failure to Pay Tax Penalty
730 Failure to File Information Return Penalty
740 Failure to File Form 4720 Penalty
750 Failure to File Complete Return Penalty
   
800s Miscellaneous
800 BMF Vouchers
810 IRC 6104 Public Inspection
820 Proper Power of Attorney Procedures
830 Computer Audit Specialist
840 International
850 Engineer
860 Employee Plans
865 Federal State Local Government Examiner
870 Employment Tax Examiner
875 Indian Tribal Government
880 Economist
885 Tax Exempt Bond Examiner
890 LB&I/SB/SE Agent
   
900s Related Organizations
900-949 Exempt Organizations
950-999 Taxable Subsidiaries, Joint Ventures, Partnerships and Officers

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