Part 4. Examining Process

Chapter 90. Federal, State and Local Governments (FSLG)

Section 11. Technical Review

4.90.11  Technical Review

4.90.11.1  (05-31-2006)
Overview

  1. This section discusses the guidelines for determining which cases are subject to a technical review in FSLG.

4.90.11.2  (04-01-2010)
Processing of Reviewed Cases and Reviewer’s Memorandum

  1. Examination cases in the groups will be sent to the Compliance and Program Management (CPM) staff of FSLG. Cases that meet the technical review criteria should be sent to CPM staff in Austin. The mailing address for CPM Technical Review is:

      Internal Revenue Service
    T:GE:FSLG:CPM
    Technical Review
    300 E. 8th Street Mail Stop: 4098AUS
    Austin, TX 78701

    Note:

    Cases subject to technical review include, but are not limited to:

    1. Technical advice or assistance requests

    2. Requests for review of a case by the group manager

    3. Examination cases

    4. Customer assistance cases, and

    5. Compliance check cases

  2. Management has authority to designate any type or group of cases as a 100% review category if it considers this to be essential.

  3. All open cases received in CPM should have a minimum of 240 days on the statute for unagreed cases and 180 days for agreed cases. The Manager, CPM must be notified by telephone of cases with less time remaining on the statute before forwarding to CPM for action. This will include " No-Change" cases.

  4. Once received in CPM, the Manager will control the case and assign it to a Reviewer. The cases will be distributed to the Reviewers on the basis of current workload without respect to geographical location of the organization. This will provide flexibility in meeting workload demands and facilitate interaction between Reviewers and the Field Managers and their employees. Additionally, every effort will be made by the CPM Staff to complete its work on a case within 60 days.

  5. Once assigned, the Reviewer will review the case. If there are no problems or questions regarding the case, the case file will be forwarded to the Government Entities (GE) closing unit, which will close the case to the appropriate Service Center. Only examination cases are forwarded to the GE closing unit.

  6. If there is a need to return the case to the group, the Reviewer will first forward the case file via Form 3210 to the Manager, CPM for his/her review, agreement and approval. If the Manager, CPM agrees with the Reviewer, the case file, along with Form 3990, Reviewer’s Report, or equivalent, will be sent back to the originating group for consideration of the Reviewer’s concerns. The group should reply within 60 days of receipt.

  7. After the group takes the action it deems appropriate regarding Form 3990 or equivalent, the case file will be returned with a Form 3210 to CPM staff in Austin at the address given above. The group should fax an information copy of the Form 3210 to the Manager, CPM so he/she will be aware that the case has been returned to the Reviewer.

  8. Once the Reviewer has considered the group's reply, the case will be forwarded to the Manager, CPM for final review and approval. If all parties agree, the examination case will be closed through the GE closing unit, which will close the case to the appropriate Service Center. If the Manager, CPM has any questions or problems regarding the case, he/she will contact the Reviewer for clarification.

  9. In the event of any significant disagreement between CPM and the group regarding a Form 3990 or equivalent, a conference will be held between the affected Specialist, his/her Field Manager, the CPM Reviewer, and the Manager, CPM, to resolve the issues. Ultimately, the decision of the Field Manager and the Manager, CPM, is final.

4.90.11.3  (04-01-2010)
Cases Forwarded to Appeals – Need for an Original Return

  1. IRM 8.2.1.3.1 requires that all docketed cases "must contain the original return--the Tax Court requires exactly what the taxpayer filed. " When this is not possible, a copy of the return as well as a CC ESTAB/ELFREQ PRINT requesting the original return must be in the case file. If the original return is still not obtainable, a certified transcript along with the copy is required. Also, Form 12209, Transmittal of Cases to Appeals, is required on any case forwarded to Appeals with less than 270 days left on the statute.

    Caution:

    Cases sent to Appeals should have at least 180 days remaining on the statute (See IRM 8.2.1.3). CPM will be responsible for ensuring that these tasks are accomplished.

    Caution:

4.90.11.4  (04-01-2010)
General Statute Procedures

  1. Procedures regarding statutes are contained in IRM 25.6.23, Examination Process- Assessment Statute of Limitations Controls and IRM 4.90.10, Statute Control Procedures.

  2. Specialists should remember the following points concerning statutes:

    • Form 895, Notice of Statute Expiration, should be prepared for any case with less than 270 days left on the statute of limitations. Cases coming to Review also require Forms 895 to be prepared for all cases with less than 270 days left on the statute.

    • As stated in Section 1, #3 above, whenever sending a case with a short statute to Review, the Field Manager of the Specialist should call the Manager, CPM before sending the case. A short statute is defined as a statute with less than 180 days remaining for an agreed or "no-change" case, and 240 days remaining on an "unagreed" case. These cases must include documentation of the approval of the Field Manager prior to closure to CPM technical review in Austin.

  3. To maintain statute controls, it is crucial that each Field Manager monitor and work the group's Table 4.0 on a monthly basis. Each group should forward an electronic annotated copy of Table 4.0 to the FSLG AIMS coordinator, with electronic copies to the Director, FSLG and Manager, CPM.

4.90.11.5  (05-31-2006)
Suspense Cases

  1. If a case is to be sent to CPM for suspense, it is the group’s responsibility to ensure that the statute is protected for at least one year. Upon receipt in CPM, it will be CPM’s responsibility to secure any further necessary extension to the statutes.

  2. Technical advice cases will be maintained in the groups with a copy of the technical advice memorandum kept in CPM for information and follow-up. Because a technical advice request may have far-reaching ramifications due to the issue(s) involved, the reply from Headquarters office will be shared with all the Field Managers for dissemination to all Specialists.

4.90.11.6  (04-01-2010)
30-Day Letters

  1. CPM will provide guidance as to when 30-Day letters may be issued at the group level as preliminary notices in cases involving proposed tax assessments. In most 30-Day situations, the Specialist will prepare the letter, even if ultimately issued from CPM.

  2. Cases that involve adjustments to taxable returns will have the 30-Day letters issued from the group as a preliminary report.

  3. Refer to IRM 4.90.9, Workpapers and Report Writing.

4.90.11.7  (04-01-2010)
Notices of Deficiency

  1. The CPM staff will prepare all Notices of Deficiency. CPM will coordinate with the TE/GE Area Counsel staff serving the taxpayer’s mailing address regarding pre-issuance review, but only with the Manager, CPM (or his/her designee’s) prior approval, and/or, involvement.

  2. Once approved by TE/GE Area Counsel, CPM will issue the Notice of Deficiency.

  3. All Notices of Deficiency cases will be held in CPM Austin during the 90-Day period.

  4. If a Specialist or Field Manager discusses an issue with his or her TE/GE Area Counsel at the group level, there should be documentation in the file (such as Form 9984) indicating that TE/GE Area Counsel was consulted, the name of the attorney, and the attorney’s telephone number.

  5. Refer to IRM 4.90.9 - Workpapers and Report Writing.

  6. Refer to IRM 4.23.10.9 - Special Procedures for Notices of Determination of Worker Classification or Section 530 Relief.

4.90.11.8  (04-01-2010)
CPM Case Selection and Closing Procedures

  1. CPM has established a sample technical review process for examinations. Special handling procedures have been established for FSLG field groups.

  2. The following examinations have been designated as subject to mandatory review:

    • Federal agency examinations

    • Large entity examinations

    • Unagreed cases (full or partial)

    • Disallowed claim cases (full or partial)

    • ATAT cases

    • Training cases

    • Special Project cases, if so designated

  3. The following examinations have been designated as subject to sample review:

    • No-Change closures

    • Agreed closures

    • Claims allowed in full

    • No-change cases with adjustments

  4. All examination cases will continue to be closed to the CPM staff. The field groups will be responsible for the following actions prior to forwarding cases to CPM:

    1. Designate on Form 3198-A whether the examination is subject to mandatory review.

    2. For examinations subject to sample review, the Specialist will prepare the appropriate closing letter as outlined in IRM 4.90.9. The original undated/unsigned letter will be placed in the case file. During managerial review, the manager will date, sign, and mail the closing letter to the taxpayer and insure that any paper files and RCCMS records are completed correctly for final processing by the closing unit.

  5. CPM will sort the examination cases by mandatory or sample designation. For cases designated as subject to sample review, CPM will apply an established sample selection criteria. The sample selection criteria will be applied based on the date the file is received in CPM. For cases that are not selected for sample review, CPM will pull all closing data checksheets/surveys for data gathering purposes. These cases will be immediately forwarded to the closing unit for final processing. These cases will not be reviewed in any way by CPM prior to forwarding to the closing unit. Cases identified as subject to mandatory review, or selected for sample review, will be assigned to appropriate CPM reviewers to complete the technical/procedural review.

  6. Cases may be rejected from the closing unit. The closing unit will first send the cases to CPM. The following procedures are applicable:

    • CPM will attempt to make corrections and return the case to the closing unit. If successful, CPM will prepare a Reviewer's Advisory to alert the Field Manager of corrections made to the rejected case.

    • If CPM determines that the case needs to be returned to the field group for corrections, Form 10352 (EP/EO Case File Correction/Reject Sheet) will be attached to the outside of the case. The form will alert the group of the due date for completing the corrective actions and returning the case back to CPM. Cases returned to the groups will reassign controls on AIMS/RCCMS where appropriate. Upon receipt of the corrected case from the groups, the CPM reviewer will verify that all corrective actions have been completed before resubmitting the case to the closing unit.


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