4.90.11  Technical Review

Manual Transmittal

November 21, 2013

Purpose

(1) This transmits a table of contents and revised text for IRM Part 4, Examining Process, Chapter 90, Federal State and Local Governments, Section 11, Technical Review.

Material Changes

(1) Text inserted to indicate role of FSLG Field Operations Manager in handling reviewed cases.

(2) Reference to Form 10352 removed, and current procedures updated to reflect use of Form 3990.

(3) Minor editorial corrections made as needed.

Effect on Other Documents

This section supersedes IRM 4.90.11, Technical/Quality Review, dated April 1, 2010.

Audience

This section contains instructions and guidance for all Federal State and Local Governments compliance employees when dealing with technical review issues.

Effective Date

(11-21-2013)

Paul A. Marmolejo
Director, Federal State and Local Governments

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  (11-21-2013)
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 270 days on the statute for unagreed cases and 180 days for agreed cases. The Manager, CPM must be notified in writing, such as by e-mail, 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 to the Manager, CPM, for his/her review, agreement and approval. If the Manager, CPM, agrees with the Reviewer, then the Reviewer annotates this on the Form 9984 and imports the Form 3990, Reviewer’s Report, to the RCCMS case file to become part of the official RCCMS file. 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 e-mail 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. If the group's reply to the CPM Reviewer, addresses all issues in a satisfactory way, the examination will be closed through the closing unit. If not, the case will be forwarded to the Manager, CPM for additional guidance and direction.

  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 FSLG Field Operations Manager, CPM Reviewer, and the Manager, CPM, to resolve the issues. Ultimately, the decision of the Field Manager, the FSLG Field Operations Manager, and the Manager, CPM, is final.

4.90.11.3  (11-21-2013)
Cases Forwarded to Appeals – Need for an Original Return

  1. Except as noted in IRM 8.2.3.1(3), if the examination is based on the taxpayer's copy, the original return is not required, provided that a copy of the return and a transcript of account are in the file. If the liability and credits shown on the copy differ from the transcript of account, FSLG reconciles the information. 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 contact 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 270 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.

4.90.11.5  (11-21-2013)
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  (11-21-2013)
Notices of Deficiency

  1. The CPM staff will prepare all Notices of Deficiency (NDWC) and forward to the Manager, CPM for his/her approval. .

  2. Once approved by the Manager, CPM staff 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  (11-21-2013)
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, annotating such in the workpapers, and ensure 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 are only reviewed in CPM to ensure that they will not be rejected due to a processing error when forwarded to the GE Closing Unit, not due to consideration of any technical merit. These cases will be immediately forwarded to the closing unit for final processing. 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 GE closing unit.


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