5.19.15  Federal Agency Delinquency (FAD) Program

Manual Transmittal

August 06, 2015


(1) This transmits revised IRM 5.19.15, Liability Collection, Federal Agency Delinquency (FAD) Program.

Material Changes

(1) 05/12/2014; IPU 14U0847- Formatting and editorial changes throughout the document.

(2) 05/12/2014; IPU 14U0847- Tridoc through; Sections revised and edited to incorporate and add referral process procedures per the Service Level Agreement signed by all executive parties on March 3, 2014.

(3) 05/12/2014; IPU 14U0847- Tridoc Internal Escalation Process; New tridoc added to address internal process within Campus.

(4) 05/12/2014; IPU 14U0847- Tridoc Field Revenue Officer Referral; New tridoc added to incorporate process.

(5) 05/12/2014; IPU 14U0847- Tridoc; FSLG Educational Outreach- was moved to Tridoc

(6) 05/12/2014; IPU 14U0847- Tridoc; IRC 6020(b) on Credit Balances; Paragraph 6 edited to read 6020(b) IAT tool.

(7) 05/12/2014; IPU 14U0847- Tridoc; Resolving Balance Due Issues; Paragraph 8 revised CFO referral reference in regards to imminent CSED issues.

(8) 05/12/2014; IPU 14U0847- Tridoc Escalation Process Overview- added paragraph 7; Unresolved IRS and Treasury Bureau entities are an exception to the rule and must be forwarded to SBSE HQ Campus director for immediate CFO referral bypassing Field contact.

(9) 05/12/2014; IPU 14U0847- Tridoc ; IRS and Treasury Bureau Delinquent Agencies, Paragraph 3; revised to read- If immediate resolution is not possible, refer the case per IRM IRM , Campus Escalation process for possible CFO referral.

(10) 05/12/2014; IPU 14U0847- Tridoc; Federal Agency Delinquency Overview, added general information regarding the escalation process and Campus Revenue Officer.

(11) 05/12/2014; IPU 14U0847- Tridoc General FAD Case Processing; Revised time frame for adding inventory into database from 2 to 3 business days.

(12) 05/12/2014; IPU 14U0847- Various editorial/ grammar corrections completed throughout the IRM

(13) 05/12/2014; IPU 14U0847- Tridoc added paragraph 7:

(14) IPU 14U1313 issued 09-04-2014 IRM 5.19.15 Editorial changes throughout the IRM changing reference from FAD database and FAD history to ICS and ICS History. Changes due to transition of inventory to Integrated Collection System (ICS) on July 29, 2014

(15) IPU 14U1313 issued 09-04-2014 IRM FAD Overview Paragraph 7- Revised to include changes to ICS inventory assignment

(16) IPU 14U1313 issued 09-04-2014 IRM General FAD Case Processing: Paragraph 1- Revised paragraphs to include ICS process and receipt of inventory. Also added clarification of validation of IDRS

(17) IPU 14U1313 issued 09-04-2014 IRM Inventory and documentation; Revised paragraph 2 to read: n open control base and initial analysis must be input and completed and documented within 10 days of assignment, unless employee is absent due to leave or training. Employee will document account and work case upon arrival back to work.

(18) IPU 14U1313 issued 09-04-2014 IRM Changed Tridoc title. Section revised to address ICS assignment to 0100-8300.

(19) IPU 14U1313 issued 09-04-2014 IRM IRS and Treasury Bureau Delinquency- Revised Paragraphs 1 & 2 to address tracking of IRS/ Treasury entities, and requirement of weekly reporting.

(20) IPU 14U1313 issued 09-04-2014 IRM Balance Due Overview; Edited first paragraph regarding role of FAD employee.

(21) IPU 14U1313 issued 09-04-2014 IRM Addressing/ Reconciliation of Combined Annual Wage Reporting (CAWR) Related Issues Editorial Changes only. Added CAWR IRM section addressing FAD.

(22) IPU 14U1313 issued 09-04-2014 IRM Identify and Resolve Voluntary Compliance (VOLC) issues Editorial Changes.

(23) IPU 14U1313 issued 09-04-2014 IRM Campus Internal Escalation Process Section revised process to include ICS system and clarify process

(24) IPU 14U1313 issued 09-04-2014 IRM Campus Revenue Officer (RO) Assistance Referral Section revised process to include ICS system and clarify process
Updates below reflect procedural updates completed during annual IRM revision. Editorial changes conducted through out the IRM may not be notated below.

(25) IRM; Tridoc revised to: Federal Govt. Entities- General Information. Section updates reflect general information regarding Federal government agencies.

(26) IRM General FAD Processing; Added paragraphs 6-8.

(27) IRM Streamline Process and Time- Frames; Added paragraph 5 to address to allow additional response from taxpayers on international addresses.

(28) IRM Added New Tridoc- Voluntary Compliance (VOLC) and Taxpayer Request (TPRQ). Section defines criteria and general procedural guidelines.

(29) IRM Resolving Balance Due Issues; Paragraph 2; Added information regarding available payment options for Federal agencies. Paragraph 5- If/Then Box regarding “overstated FTD payments”- sentence added.

(30) IRM Addressing Combined Annual Wage Reporting (CAWR) issues; Revised paragraph 5 to address securing of W-2/W-3 data from SSA and CAWR area (SSA- ORS vs. ERQY systems)

(31) IRM Tridoc revised to read: FSLG Role and Education Assistance; Added paragraph 7. In additon, removed reference to FSLG *ASKFSLG email. E-mail is no longer available due to funding. However, FSLG website at IRS.gov has valuable information including Q&A for Agencies to refer to.

(32) IRM ; Campus Revenue Officer Guidelines- Tridoc title and section was revised to address general procedural guidance for the Campus RO.

(33) Tridoc and subsections of IRM Special Handling of Various Federal Agencies; was moved to IRM section

(34) IRM Federal Reserve Banks; Paragraph 3 clarified to address generally these type of entities are not assigned to FAD inventory due to the employment code assignment of “Q”. Programming is established to only assign Employment code “F” entities to FAD.

(35) IRM Reference and Resources for Federal Agencies (New Tridoc).

(36) IRM ; Tridoc title changed to read: Payment options for Federal Agencies. Tridoc addresses EFTPS and IPAC processes and guidelines. Paragraph 4 was added with IPAC guidelines to follow.

Effect on Other Documents

This IRM supersedes IRM 5.19.15 dated January 23, 2014


Small Business/Self-Employed (SB/SE) employees in Compliance Services Collection Operation

Effective Date


Sam Perdue, Director, SBSE Quality and Technical Support  (08-06-2015)
Purpose of Federal Agency Delinquency (FAD) Program

  1. The Federal Agency Delinquency Program (FAD) is centralized in SBSE, BSC Campus, Collection Operation, with the intent to resolve delinquent tax issues assessed to Federal agencies in an efficient, timely manner. All inquires, including phone calls and correspondence regarding Federal entities are to be forwarded to the FAD group. Refer to SERP - Who and Where link for additional guidance on forwarding inquires to the FAD team. http://serp.enterprise.irs.gov/databases/who-where.dr/fad_contacts.html

  2. Due to the sensitive nature of the program, the CFO office and Federal, State and Local Governments (FSLG) support the program, which is outlined in a Service Level Agreement. The Service Level Agreement defines the roles and responsibilities for applicable areas responsible for the success of the program. Responsible areas include SBSE Campus Compliance Services, Tax Exempt Government Entities (TEGE)- Federal State and Local Government (FSLG), and CFO office.

  3. Non- delinquent issues including tax law, clarification/ questions regarding appropriation of funds, or assistance with filing of tax returns should be directed to TEGE- Federal, State and Local Govt. (FSLG). Most inquiries to questions can be found by visiting the IRS.gov website - Federal Government Information:http://www.irs.gov/Government-Entities/Federal,-State-&-Local-Governments/Federal-Agency-Information. Visit FSLG IRM- IRM; Customer Assistance Resources, for additional guidance.

  4. A majority of the delinquent compliance related issues are a result of filing/ reporting issues such as incomplete accounting, mis-applied payments, and CAWR related issues. As a result, collaboration efforts between the assigned FAD employee and Agency point of contact are necessary for case resolution. Assistance may include, but not limited to: contact with other areas within the Service for clarification or guidance, sending account transcripts, SSA reporting of W-2 transcripts.

  5. To improve the overall compliance concerns related to Federal Agencies, FAD employees are required to analyze and research each case assigned and identify and record the cause and resolution on ICS for each individual case. The data is shared with TEGE- Federal, State and Local Govt.(FSLG) and utilized for educational outreaches  (08-06-2015)
Federal Government Entities- General Information

  1. Federal agency entities can be identified by the following assignments coding on IDRS:


    • Employment Code: F

    • Form 941 filing requirement: 02 (if applicable to file employment taxes)

  2. There is a total of fifteen (15) executive departments assigned under the US Federal Government. Each executive department is responsible for applicable subsidiary entities within their department. Refer to Exhibit 5.19.15-1 for a listing of executive departments and subsidiaries. Visit the USA.gov website: https://www.usa.gov/federal-government for additional information on specific agencies within the executive branches of the government.

  3. Tax years for all Federal Agencies are based on a fiscal tax year, beginning on October 1st and ending September 30th of the following year. Budgets are distributed or appropriated to all Federal agencies by the US Treasury on a fiscal year basis. Appropriations are definite (a specific sum of money) or indefinite (an amount for "such sums as may be necessary"). These appropriations provide budget authority to obligate and expend funds from the U.S. Treasury for specific purposes. For additional information regarding appropriation law and disbursement of funds for government agencies, refer to: http://disbursements.house.gov/glossary.html

  4. Federal agencies are exempt from income tax reporting, but are required to comply with filing the appropriate employment tax returns and follow the same employment tax reporting and filing that are required by private industry. However, Federal agencies pay their financial obligations using the appropriated funds received from US Treasury, which differs from private sector. Generally current year appropriations can not be used to pay prior year tax obligations, which can cause barriers for the Agency if they owe tax debt on prior years.

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    Refer to IRM 1.2.22; Service wide Policies and Authority; for a complete list of IRS Policy Statements.  (08-06-2015)
FAD Collection Assignment 21008300

  1. FAD inventory is maintained and monitored on the Integrated Collection System (ICS). Inventory is assigned to inventory generally the next month following the posting of an assessment (Baldue) or when a TDI module is created by Masterfile. The Integrated Delivery System (IDS) will identify the FAD inventory by the employment code F and systemically assign the cases on ICS to the FAD team, assignment number of 0100-8300.

  2. FAD Balance due accounts are generally assigned to ICS within four weeks of an assessment and/ or the initial balance due notice (CP 501). Return Delinquency notices are generally assigned to the ICS FAD team assignment 20 weeks after the CP 259 (1st TDI notice) is issued. Once assigned to ICS assignment of 0100-8300, the modules will have an IDRS assignment of 21008300.

  3. There may be situations when an account is not systemically assigned to the FAD team, and may need to manually assigned.
    Refer to the table below regarding specific situations, and guidelines:

    An account is not in Status 22/ 24/26 (indicating in notice status) and is received in inventory on the monthly CFO report,
    1. Forward the case to team manager or lead requesting then to manually assign the case to ICS.
      Include EIN, entity information, breakdown of delinquent tax periods and balances owed (address both TDA/TDI).

    2. Manager/Lead will assign the case to your ICS assignment number.

    The account is in Status 26, The account is assigned to a specific Revenue Officer (RO) team assignment per ICS,
    1. Identify the RO assignment and contact the RO by telephone to request the case to be re-assigned to your ICS assignment of 0100-83XX.


      The assigned RO telephone number can be obtained by accessing the ICS Parameter Table or accessing the case by TIN.

    2. Prior to having case assigned, inquire if there is any other pertinent information on the account that may be helpful for resolution.

    3. Document ICS history of actions taken.

    The account is in Status 22/ 24 (TDA) or Status 03 (TDI) with collection assignment ending in 7000, Indicating the account is in the ACS or Queue,
    1. Reassign the account to 21008300; via CC BNCHG.

    2. If the Area office is not 2100, it will be necessary to change the Area office to 2100 prior to assigning to the 8300 group code assignment, via CC BNCHG.

    3. Forward the case to team manager or lead requesting manual ICS assignment. Include EIN, entity information, breakdown of delinquent tax periods and balances owed (address both TDA/TDI).

    4. Manager/Lead will assign the case to your ICS assignment number.


    if there is a questionable employment code "F" assignment issue, do not make any changes to the IDRS assignment Only correct the assignment number upon completion of validation.  (08-06-2015)
General FAD Case Processing

  1. Inventory is maintained and monitored on the Integrated Collection System (ICS) database. All Federal agency identified cases (Employment Code F) are systemically moved to the ICS FAD team assignment when the entity is in Collection Status (Balance Due- Status 26 & TDI -ST 03). Balance due modules generally accelerate to Status 26 within 4 cycles of date of an assessment, which is identified on IDRS with an area assignment of 21008300. TDI modules generally accelerate to ST 03 within 2 weeks of the CP 259 ( first TDI notice) issuance.


    Situations may arise which may require FAD employees to manually assign 21008300 assignment. For further guidance, refer to IRM ; FAD Collection Assignment. See SERP- Who and Where; Contact Information for FAD referrals, for contact information.

  2. Upon initial receipt of case research is required to determine the Agency "Point of Contact (POC)." . A list of Agency contacts are maintained in the FAD team by management and updated on a regular basis. If the entity was previously in inventory, primary and secondary contacts are updated to the ICS Entity information for each specific case.

  3. If the Agency is a new entity to FAD team, and/ or if there is doubt if the entity is a Federal Agency, forward all information secured to FAD management, which will be forwarded to the FSLG CPM for validation of employment assignment and request for any pertient information they may have on th the entity. All communication with FSLG CPM analyst will be conducted by the FAD team manager or designated person determined by Campus management, via E-mail to designated FSLG CPM. Update ICS of the request, include research and actions taken.

  4. The FSLG CPM analyst will research and respond back with any pertinent information which may assist with the resolution, such as:

    • Agency Point of Contact information, which may include telephone etc.

    • Any on-going issue currently open within FSLG (example-posted/pending Exam audit).

    • History of any prior contact with the Agency which may help with communication and resolution of account (example: outcome of exam audit, or prior educational efforts).

  5. It may be necessary to conduct in-depth research to possibly identify the Agency “point of contact” via websites and or contacting other areas within the Agency which may be able to direct you to the appropriate party. A valuable website tool for Federal Agencies can be obtained by visiting -The Leadership Directory website, at :http://www.leadershipdirectories.com, may be resourceful on obtaining information.


    Although the IRS does not have a contract with The Leadership directory, general information is free to all users.

  6. Any e-mail communication with the agency must be general and not contain any SBU data. SBU data may not be sent to parties outside of IRS, including other government agencies, taxpayers, or their representatives. Employees can receive E-mail containing SBU data from taxpayers or their representatives. Employees cannot send E-mails containing SBU data outside the IRS network, even if specifically authorized by the taxpayer. Refer to IRM Electronic Mail and Secure Messaging.

  7. As a reference, the FAD team is responsible to keep an updated log listing of all Federal Agency contacts and phone numbers. The listing is on the Campus share drive and needs to be reviewed and updated monthly.  (08-06-2015)
Streamline Process and Time-Frames

  1. This section provides guidelines to follow when working the FAD inventory. The streamline process was designed to ensure cases are worked in the most efficient and effective manner.

  2. Within 5 days from assignment , the FAD employee must conduct an initial case analysis prior to contacting agency . The initial analysis should determine the cause of the delinquency and actions need for resolution. In certain situations, adjustment to account may be appropriate per IDRS research, not requiring Agency contact; (Example- tax adjustment or credit transfer per IDRS research). Update ICS of research, cause of delinquency and actions taken. As an audit trail, select Initial Analysis Conducted from the ICS drop down menu from History screen- Type of History.

  3. After initial case analysis, within 2 business days two contact attempts must be made and documented. If no callback or telephone contact is not an option, send LT 2718C, or appropriate letter requesting response from the Agency to resolve issue. Notate ICS of specific actions taken with each contact attempt.

  4. When corresponding with the Agency in writing, generally allow 30 days for deadline date for them to respond in writing. Set follow up date for an additional 15 days past the deadline. When using the LT 2718C letter, input the date of 29 days from today's date to allow sufficient time for response.

  5. For accounts with an international address based on their location, additional time must be allowed for mailing and processing payments, returns and correspondence. Refer to IRM International Account Time Frames, for additional information.

    • If sending 2718C or any other letter, allow 60 day follow up to allow extra time for mailing.

    • An additional 10 days beyond the deadline must be given for all callbacks.

    • Based on the location of the taxpayer, allow up to an additional 25 days for mailing and processing.


    Situations may occur whereas additional times outside of the guidelines above may be necessary. Document ICS history to support your decision.

  6. Follow the guidelines in the table below for telephone contact guidelines:

    If Then
    Telephone contact is successful,
    • Address the reason for delinquency (cause).

    • Request required actions necessary for resolution.

    • Allow up to 10 business days for response.

    • Encourage the option of faxing supporting documentation to expedite resolution.

    • Advise the Agency if response not received as agreed upon, the issue may be escalated to the next level of their Agency by a Revenue officer and/or CFO.

    • Document ICS of information secured, and actions taken. Indicate follow up deadline given for Agency follow up.

    Telephone contact attempt not successful- no answer
    • Leave a message requesting a callback within 24 hours.

    • Document history of call. Establish a follow- up date for 2 days later.

    • If contact returns call, refer to above box.

    • If no response after 2nd telephone call attempt, subsequently issue LT 2718C or appropriate letter (on same day). Address:
      The option of faxing the supporting documentation to expedite resolution.
      Advise the Agency if response not received as agreed upon, the issue may be escalated to the next level of their Agency by a Revenue officer and/or CFO.

    • Set case follow up for 45 days to allow time for response (90 days for international addresses).

    • Document ICS of all actions taken.


    Time frame guidelines are established to ensure case resolution is completed in an timely manner. However, there may be exceptions when additional time is warranted. Encourage the option for the Agency to fax the information to expedite case resolution. Document ICS to support decision of allowing more time to respond from guidelines listed above.

  7. When speaking with the Agency contact, probe for the name of next level contact, and document as secondary contact in ICS entity for future reference.

  8. Document ICS history of all actions taken; including information requested from Agency, name of contact, and deadline(s) given.

  9. If contact attempt is successful, refer to the applicable IRM sections to address the cause of delinquency. See IRM, Resolving Balance Due issues; and IRM; Resolving Return Delinquency Issues.

  10. If all contact attempts as stated in previous paragraphs are not successful, and the account cannot be resolved with available information, the next step for resolution needs to be determined. Refer to IRM; Escalation/ Referral Process Overview, for additional guidance.

  11. CFO referral process will be pursued only after all Campus contact attempts have been exhausted. See IRM ; CFO Office Referral, for additional guidance regarding CFO referral.  (08-06-2015)
Voluntary Compliance (VOLC) and Taxpayer Request (TPRQ)

  1. Voluntary Compliance (VOLC) defines situations whereas the account is not in FAD inventory but the employee has taken action which needs resolution. The VOLC can be a new entity or an existing agency in inventory with a module not in Collection Status.

    • If the VOLC is a new account, not currently open on ICS, manually add the account to inventory. However this does not apply to receipt of current tax returns due that are not in TDI status.

    • If the VOLC is identified during full compliance on an existing entity in inventory, add the tax period to ICS accordingly.

  2. Taxpayer Request (TPRQ) situations occur when the taxpayer calls/ inquires regarding an issue on their account, which is currently not in FAD inventory. The issue can be a new entity or a new tax period which is not currently assigned, request for guidance on submitting an amended return. Additional issues can include, but not limited to, an inquiry on a notice regarding a recent proposed assessment, math error on return, etc. Generally this occurs as a result of a new assessment, or a recent open TDI module. Assist the agency with their concern, and inform them of their options to resolve the issue.

    • If there is a recent assessment posted onto IDRS, which is not open in inventory, manually add the account to ICS.

    • If the taxpayer contact is related to a non collection issue, and the account is not on ICS, notate AMS of inquiry and actions taken.

    • If the inquiry is a request to fax over a current tax return, inform the agency to send the return to Submission Processing. If a faxed return is secured, notate the account, and forward for processing. If the account is not on ICS, input a TC 599 with appropriate closing code. It is not necessary to keep case open to monitor return posting.  (08-06-2015)
Balance Due- Overview

  1. General balance due guidelines to follow can be located in http://serp.enterprise.irs.gov/databases/irm.dr/current/5.dr/5.19.dr/5.19.1.dr/5.19.1.htm, IRM 5.19.1 Balance Due. This section was developed to assist with special handling of Federal Agency accounts not addressed in IRM 5.19.1.

  2. All necessary actions must be conducted to assist the Federal agency with resolving their balance due issue. h reconciliation and resolution of their delinquency tax issue, in addition to promoting future compliance. To ensure prompt and efficient resolution, research of cause of delinquency must be conducted and documented thoroughly prior to contacting the Agency. In many situations prior research will assist with identifying and discussing with the Agency what actions are necessary to resolve the issue. In some situations, an adjustment or mis-applied payment can be completed, resolving the delinquent issue, without agency contact.

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  4. For additional information regarding Statement of Disbursement and five year rule, refer to http://disbursements.house.gov/glossary.shtml  (08-06-2015)
Resolving Balance Due Issues

  1. Generally Federal agencies balance due issues are a result of the following scenarios listed below:

    • Mis-applied payments to an incorrect tax period

    • CAWR related issues (Incorrect reporting of W-2/W-3

    • IRS errors

    • Math errors on tax returns

  2. However, situations may occur whereas the balance due is valid due to underpayment or an Exam assessment. Inform the agency of available payment options.

    • Federal Agencies are not eligible for an Installment agreement. However in certain situations a payment option can be considered, if the total amount is full paid within 120 days.


      This option needs managerial approval. Management must document approval in ICS history.

    • Federal Agencies have the option to make their payments by EFTPS or IPAC- Intergovernmental Payment and Collections. Refer to IRM ; Payment Options for Federal Agencies for additional guidance.

  3. In some situations agencies may have a balance due to incorrect reporting, and may be required to file an amended return at the end of each year to properly adjust wages due to employees various work assignments in other governmental agencies. It is common practice for agencies to file amended returns each year since they don't receive the corrected W-2's from another "sister" agency until months after a quarterly Form 941 return is filed.

  4. To resolve the balance due issues on an account it may be necessary to obtain copies of prior payments or deposits (for credit verification). In addition, due to the organizational structure of many agencies it is required to thoroughly research all related EIN(S) to ensure there is not a misapplied payment that posted to another account which may have created the balance due or assessment.

  5. The chart below illustrates guidelines of necessary actions to be taken to resolve the account, once determination is made as to the cause of the liability.


    The chart is not inclusive of all situations that may arise. Additional research may be warranted.

    You determine the reason for the delinquency is due to an IRS error, i.e., erroneously assessed penalty and interest, misapplied payments, etc.
    • Conduct the necessary action(s) to resolve the balance due issue, without contacting the Agency.

    • Update ICS on actions taken to resolve the account.

    It has been determined the balance due on the account is not accurate due to errors on the return based on the TC 150 (return) posted,
    • Inform the Agency to file an amended return.

    • Send Agency transcript of account to assist with reconciliation, through Transcript Delivery System (TDS), if necessary.

    • Establish a deadline date of up to 10 work days for Agency to mail the return to the employee. Set a follow up date of an additional 15 days.

    • Update ICS of all pertinent information including deadline and follow up date.

    The Agency disputes the balance due,
    • Inform the Agency what caused the delinquency and the available options that are necessary to resolve the issue. Offer assistance, when applicable. It may be necessary to send the Agency account transcripts via Transcript Delivery System (TDS), copies of tax returns and SSA information.

    • Advise the Agency if response not received as agreed upon, the issue may be escalated to the next level of their Agency by a Revenue officer and/or CFO.

    • If Agency is not cooperative or continues to disagree, consider elevating the case to Campus Revenue Officer. See IRM ; Campus Internal Escalation Process; for additional guidance.

    • Refer to IRM, Determine Correct Tax Liability.

    • Document ICS of all actions taken.

    Upon review of the account, it is determined there may be a discrepancy of what was assessed or filed,
    • Assist Agency with the reconciliation of the account. Send the Agency any documentation which may be necessary for the issue to be resolved during the reconciliation process. This may include transcripts, SSA data secured, etc.

    • Allow Agency up to 10 business days to reconcile the account.

    • Advise the Agency if response not received as agreed upon, the issue may be escalated to the next level of their Agency by a Revenue officer and/or CFO.

    • Document ICS of all actions taken.

    Payment(s) misapplied,
    • Complete credit transfer

    • notify Agency of any remaining balance due.

    • Update ICS of actions taken, including documentation of cause closure.

    Balance Due assessment is penalty and interest only,
    • Abate applicable penalty and interest assessments

    • Update ICS of actions taken, including documentation of case closure.

    Agency responds with necessary documentation to resolve account,
    • Review documents received for accuracy; validate with IRS records, if applicable.

    • Take the corrective actions to resolve the account. (Example: input Form 941X or adjust account per W-2/W-3 secured).

    • Inform Agency of outcome.

    • Update ICS of actions taken, including documentation of case closure.

    Overstated Federal Tax Deposit (FTD) payments on tax return filed, Review account with Agency, validate information / payments on return.
    • If all payments are accurate and the Agency agrees to balance due, request the payment.

    • If credit was applied to another account, move the payment accordingly.

    • If the Agency states their return is not accurate, recommend they submit a corrected return (Form 941X). Give the Agency up to 10 business days for receipt of the Form 941X. If additional time is necessary due to unforeseen circumstances, document ICS history to support decision.

    • Advise the Agency if response not received as agreed upon, the issue may be escalated to the next level of their Agency by a Revenue officer and/or CFO.

    • Update ICS with findings and actions taken, including case closure.

    Refer to IRM 5.19.1, Balance Due for additional guidance.
    Research indicates balance due is valid due to:
    • underpayment/ no payment

    • math error on return

    • unavailable credit claimed, i.e., prior credit elect offset to a prior balance due module(s) or refund issued instead of being applied to subsequent quarter(s).

    Contact Agency to secure and or verify payment(s) made on account and/or return information:
    • Educate Agency of math error or unavailable credit issue, if applicable.

    • Set deadline date for payment. Advise the Agency if response not received as agreed upon, the issue may be escalated to the next level of their Agency by a Revenue officer and/or CFO.

    • Document AMS and ICS of actions taken.

    • If issue is resolved, payment is secured, update "Cause and Cure" report with findings and actions taken to resolve.

    Identified W-2/ W-3 wage discrepancy, Refer to IRM ; Addressing CAWR related issues.
    Prompt assessment posted to the account,
    • Secure documents from Files to verify assessment. Once received, review and research account to ensure accurate.

    • Contact Agency to verify liability and payments made.

    • If appropriate, take necessary actions to adjust or correct the account.

      If the balance is accurate, inform Agency of the available options they have to resolve the balance posted to the account.

    • Advise the Agency if response not received as agreed upon, the issue may be escalated to the next level of their Agency by a Revenue officer and/or CFO.

    • Update ICS of research and actions taken.

    • Update Cause and Cure report with findings and actions taken to resolve issue.

    EFTPS reporting issues. See IRM, Electronic Federal Tax Payment System (EFTPS) for additional guidance.
    • Request EFTPS confirmation number and payment date. Conduct necessary research to validate payments, and take corrective actions.

    • Document findings and actions taken on AMS.

    • Update Cause and Cure report with findings and actions taken to resolve issue.

  6. If there is a concern of a credit offset or refund, input a TC 570, which will generate a -R freeze, restricting the credit from offsetting or refunding to the Agency. In addition, if adjusting the account which will cause a credit balance, use an appropriate “Hold” code to ensure the refund is not issued.

  7. Determination of possible escalation referral must to be considered if multiple attempts for resolution has expired, with no case resolution. This would include incomplete responses, and/ or consistent efforts to resolve has been exhausted with no resolution.

  8. If it is determined the CSED is imminent (within 120 days), immediately bring the case to management attention, which will be forward to HQ for guidance. Once reviewed by HQ, a CFO referral will be pursued for immediate resolution.

  9. For general guidance on Balance due issues which is not addressed in this IRM, refer to IRM 5.19.1, Balance Due.  (08-06-2015)
Addressing Combined Annual Wage Reporting (CAWR) Related Issues

  1. Due to various obstacles faced by Federal agencies due to their organizational structure, balance due issues exist when there is a discrepancy between wage and SSA/Medicare information reported to the IRS on Form 941 and Forms W-2/W-3 reported to Social Security Administration. Generally these discrepancies are identified and an assessment is completed under the CAWR (Combined Annual Wage Reporting) Program. Due to the structure within many of the Federal agencies, W-2/W-3 reporting are not balanced timely, resulting in CAWR assessments. Our role in FAD is to assist the Agencies with reconciling the account. This may require IRS contacts with SSA, CAWR, etc to resolve. CAWR assessments can be identified on CC TXMOD, with a TC 290 blocking series 55.

  2. If there is a CAWR control base open on the account, contact the CAWR employee to discuss the current status of the account, and inquire if a response was received by the Agency. Request any information secured to assist with resolving the CAWR issue. Request CAWR employee to close their control base as you will handle and resolve the issue. There may be situations whereas it may be in the best interest for CAWR to continue normal processing. Document ICS of reason for determination.


    CAWR employees are instructed to contact FAD employee prior to issuing any type of correspondence. Upon notification the FAD unit will resolve the issue. Seehttp://serp.enterprise.irs.gov/databases/irm.dr/current/4.dr/4.19.dr/4.19.4.dr/, Federal Agency Screening

  3. If there is no current CAWR assessment on the account, research BMFOLR and BMFOLU, Prior to contacting the taxpayer, view IDRS CC IRPTRI to view the data on line to identify where the discrepancy issue is. You may also order Form W-2/W-2C information using CC IRPTRR with doc code WW. If you can identify the error that caused the discrepancy , input the correct adjustments to the account. . See IRM; Online Retrieval System (ORS) Data Screening, for additional guidance on resolution of these type of cases.

  4. If the issue cannot be resolved upon review of the information, contact the Agency contact and discuss the necessary actions which are needed to balance the account. It may be necessary to request the detailed W-2/W-3 information SSA from the Agency in order to assist with reconciling the account. The request can be obtained by accessing CC IRPTR, with a literal of I. See CC IRPTR I job aid for guidance. http://serp.enterprise.irs.gov/databases/irm-sup.dr/job_aid.dr/command-code.dr/irptri21.htm. Complete and submit Form 9937 to Social Security Administration to obtain a copy/ summary of W-2/W-3 information which was submitted from the taxpayer.

  5. If actual copies of W-2/s information are needed, they can be requested by contacting the appropriate CAWR area. Documents can an be obtained on the SSA-ORS system (SSA On-Line Retrieval System). For tax years prior to 2009, the information needs to be retrieved by the SSA -ERQY system. Currently the FAD team CAWR coordinator has permissions to the SSA -ORS system.

  6. Once research is completed and information is shared with the Agency, request the Agency review their records, in addition to any information you sent them. The Agency would need to either submit a Form 941X or additional W-2s/ W-3 or both. Give the Agency a deadline up to 10 days to respond back, establishing the time frame based on the complexity of the reconciliation needed to resolve and balance the account.

  7. Upon receipt of the return(s), and/or W-2s:

    • Review for completeness and accuracy. If there is an existing CAWR assessment, take corrective actions to back out prior CAWR assessment, if applicable. If the Agency was previously advised by the CAWR unit to file a return or a returns was filed and the CAWR unit was not notified, contact the applicable CAWR unit and advise of the actions you will be taking to resolve the account.

    • If CAWR discrepancy was identified prior to a CAWR assessment, validate the completeness of information received. Once validated, input the appropriate adjustment to balance the account.

  8. Refer to IRM 4.19.4 7.5 Late Reply Case Processing Procedures for additional guidance on abating or partially abating CAWR assessment.

  9. After completing the adjustment, inform the Agency of the outcome. If a balance is still owed, give a deadline date of up to 15 days to full pay balance. Inform the Agency of payment options available, if necessary.

  10. If the Agency was required to respond to resolve the account, and did not do so, and or the response is incomplete, make one additional contact attempt. If no resolution after required contact attempts, and or follow up, review of account must be made to determine if the Referral process should be considered. IRM , Escalation Referral Process.

  11. In all situations, document ICS of actions taken and resolution. Update Cause and Cure report when issue is resolved.  (08-06-2015)
Return Delinquency (TDI) Overview

  1. This section was developed to assist with special handling of Federal Agency accounts when general procedures are not applicable due to the collection restrictions on Federal entities. For general Return Delinquency issues, refer to http://serp.enterprise.irs.gov/databases/irm.dr/current/5.dr/5.19.dr/5.19.22.dr/, Business Master File (BMF) Return Delinquency Responses.

  2. Generally Federal agencies are exempt from FUTA tax, and Income tax returns and thus do not file Form 940, Form 1065, or Form 1120. ‘


    If there is a Form 940 FR on an account, consider incorrect employment code F assignment.

  3. Federal Agencies are not required to sign tax returns, which differ from other BMF taxpayers.

  4. Return delinquency issues handled in the FAD program consist of the following:

    • Delinquent modules in TDI Notice Status 02.

    • Taxpayer Delinquent Investigation (TDI) Status 03.

    • Modules closed in Status 06 with a TC 593, 595, 596, 597 or 598.

    • Modules closed in Status 06 with TC 590 cc 19, only suppresses the notices.

    • Modules closed in Status 06 with a TC 590 cc 02, computer generated.

  5. If an inquiry is received on a non-filer issue and the module is not in TDI Status 02/03, assist the taxpayer and document actions taken in ICS history. If account is no longer open inventory, update ICS history. It is not necessary to re-open account in ICS to document and or monitor. If account is not on ICS (open or closed), notate AMS history with information or actions taken on case. Request the return to be sent to you directly to be reviewed for accuracy, documented on ICS and forwarded for processing. However, for inquiries on returns not in TDI status, inform the taxpayer to send directly to the applicable processing site.  (08-06-2015)
Resolving Return Delinquency issues

  1. If the Agency is liable to file, determine the period(s) of delinquency and take the appropriate actions per IRM, BMF Return Delinquency Research. If necessary, provide the required tax forms or request them through SERP. If the taxpayer has Internet access, provide him/her with the IRS website address http://www.irs.gov/formspubs/index.html?portlet=3.


    " ELITE" is accessible and available on AMS to directly mail forms to the taxpayer's address on entity, if applicable.

  2. Refer to the streamline guidelines for required contact, and follow up time frames. See IRM ; Streamline and Time Frame Guidelines, for detailed process..

  3. If contact is not successful, send a Letter 2718C, using the appropriate paragraphs to advise the Agency that failure to file by the specified date, Forms 941 and Form 945 employment tax returns may be prepared and processed under IRC 6020(b) if not filed voluntarily.

  4. If contact is successful, inform Agency of obligation to file and the consequences they would face if not filed (i.e; 6020(b) assessment and/or issue may be escalated to the next level of their Agency by a Revenue officer and/or CFO. Set a deadline date for the Agency to file delinquent return(s), up to 10 business days. Solicit for the return to be faxed to you directly, however if return is being mailed. allow additional 30 days for follow up. If returns are being faxed, set follow up for up to 2 days. If no response, follow up with Agency.

  5. If the results of the contact reveals the current authorized payroll official or the Chief Financial Officer (CFO) do not have access to the delinquent tax period records, and/or do not have the authority to complete the requested tax return, consider A6020B process. If there is credit on the module, consider FAD 6020B process. Refer to IRM; FAD IRC 6020B Process.

  6. If all attempts to resolve the account have been unsuccessful, and there are no credits on the account, follow the guidelines below for various scenarios:

    There has been no activity on the account, The module is over six (6) years from the current tax year,
    • Input TC 590 cc 77 per Policy Statement P-5-133.

    • Update ICS of research completed and closure determination.

    There has been no activity on the account indicating no employees for period, You are unable to locate Agency, undeliverable mail, etc.
    • Input TC 593 with the appropriate closing code.

    • Update ICS of research completed and closure determination.

    If there has been activity on the account indicating the Agency was in business, The module meets A6020(b) criteria,
    • Forward documented research to the on-site Campus Revenue Officer for consideration of possible 6020(b) assessment. Refer to IRM ; Campus Revenue Officer Assistance Guidelines, for additional guidance.

  7. If all attempts to resolve the account have been unsuccessful and there are credits on the account, and:

    There has been no activity on the account, The credits have been researched and verified, Refer to IRM , FAD IRC 6020(b) Process.
    There has been no activity on the account. The Agency can not confirm payments posted the account was made by the Agency, nor does research identify where the payment was intended.
    • Input a TC 971 ac 296; indicating credit researched.

    • Complete Form 8758; forwarding credit to excess collections.

    • Update ICS of actions taken.

  8. Input a TC 570 on an account if there is a concern of a credit offsetting or refunding to Agency where the intent is not to refund or offset. A TC 570 will generate a -R freeze which will restrict the credit from offsetting or refunding to Agency.  (08-06-2015)
FAD IRC 6020(b) Process

  1. All attempts for case resolution must be exhausted prior to considering IRC 6020(b) process. Follow the guidelines in the paragraphs below for guidance on determination criteria, and creating a return under IRC 6020(b) guidelines.

  2. The following BMF Employment Tax Returns can be prepared under the provisions of IRC 6020(b):

    MFT Tax Return Return Title
    01 Form 941 Employer's Quarterly Federal Tax Return
    10 Form 940 Employer's Annual Federal Unemployment (FUTA) Tax Return
    11 Form 943 Employer's Annual Return for Agricultural Employees
  3. Research credit to ensure they do not belong to another EIN/ Tax period. If there is no indication the payment(s) was applied to account in error, consider Manual IRC 6020(b) process to balance the account. Refer to http://serp.enterprise.irs.gov/databases/irm.dr/current/5.dr/5.19.dr/5.19.22.dr/; BMF Credit Balance Overview; for additional guidance regarding researching credit balances.

  4. Upon completion of all required contact and research with no resolution, continue with the following procedures:

    • Complete the tax form per provisions of IRC 6020(b) using the credit balance on the module to determine the liability on the delinquent return. Complete the form utilizing the 6020(b) IAT tool. See IRM 5.18.2 , Business Returns IRC 6020(b) Processing for additional information and guidance on IRC 6020(b) tax formula.

    • Send the Agency Letter 1085(b), along with the "pre-populated" tax return and Publication 5 enclosed.

    • Suspend the account for 45 days awaiting for Agency response (90 days if the Agency is outside the U.S.)

    • Update the ICS history of all actions taken. including research of credit.


    Under no circumstances should interest or penalty be assessed on Federal entities. Refer to Policy Statement P-20-2 (formerly P-2-4, Penalties and interest not asserted against Federal Agencies. IRM

  5. Process using the following guidelines:

    If And Then
    Agency responds, states will file the return,
    • Set a deadline up to 30 days and suspend the account 45 days for follow up.

    • If no response received, proceed to next step.

    • If return is secured, review for accuracy and forward to Submission Processing for processing.

    • Document database with actions taken.

      states does not have the records or the authority to sign return, and agrees to the IRC 6020(b) assessment (oral consent),
    • Prepare the completed IRC 6020(b) return for processing.

    • Annotate the bottom of the tax form with the statement:
      "This return is processed under the Internal Revenue Code 6020(b). " .

    • Input TC 599 cc 38 using CC FRM49. Input CCC 4 at the bottom of the return.

    • Forward the IRC 6020(b) return signed by Management, along with a copy of the L1085(b) for processing.

    • Update the ICS history of all actions taken, including the name and title of the person authorizing the IRC 6020(b) assessment, and all pertinent information secured regarding the reason why the Agency can not complete the return(s).

    There is no response to the 1085(b) letter, Two contact attempts to the Agency to secure the return were completed,
    • Annotate the IRC A6020(b) return "This return is processed under the Internal Revenue Code 6020(b). "

    • Prepare the completed IRC 6020(b) return for processing.

    • Input TC 599 cc 38 using CC FRM49. Input CCC 4 at the bottom of the prepared return.

    • Forward IRC 6020(b) return, signed by management for processing.

    • Update ICS of all actions taken, including contact attempts made.

    Receive the IRC 6020(b) return signed by the Agency as agreed.  
    • Process as an original return.

    • Input TC 599 cc 39 for an Agreed Return from the Agency

    • Update ICS of all actions taken  (08-06-2015)
FSLG Role and Educational Assistance

  1. Federal, State and Local Governments (FSLG) is responsible for ensuring federal tax compliance by federal, quasi-governmental and state agencies, city, county and other units of local government, and American Samoa, Guam, Puerto Rico and the U.S. Virgin Islands. The TEGE specialized area assist governmental entities in determining their employment tax liability and filing requirements for wages, fringe benefits, reimbursements and other payments. In addition, they also assist government entities with information return and backup withholding requirements, excise tax liability, and public retirement systems. FSLG also provides information about questionable or abusive transactions that governments may encounter. Governmental agencies can visit the FSLG web-site, which has a Q&A section addressing most concerns. Visit- http://www.irs.gov/Government-Entities/Federal,-State-&-Local-Governments/Federal-Agency-Information

  2. FSLG also delivers various services to government entities through partnerships with government associations, practitioner associations, and other IRS offices such as Customer Account Services, IRS Counsel, Government Liaison & Disclosure and Employee Plans and Excise Tax.

  3. Situations may occur during case processing which FSLG assistance may be necessary to resolve the current compliance issue, request for an . educational outreach, or a possible Exam referral. Situations include, but are not limited to:

    • Unique filing requirement which the Agency has indicated assistance or clarification for case resolution.

    • Consistent trend of cause of delinquency issue with same Agency (more in-depth educational outreach needed, such as math errors, CAWR related issues, etc

    • Clarification of technical law questions which require in depth technical knowledge.

    • Possible Exam referral or Exam related questions/ issues which cannot be resolved in FAD.



    The above scenarios for FSLG referral are not inclusive of all situations.

  4. FSLG l referrals will be requested utilizing the Specialized Referral System process. Refer to http://lmsb.irs.gov/hq/fs/InformationResources/srs/FS_referral.asp#SRS, for additional guidance on completing SRS form requesting for FSLG assistance. Upon completion/ submission of SRS request, forward copy of completed submission, along with a copy of ICS history documented of all pertinent information supporting request to appropriate SRS- FAD Coordinator, FAD HQ analyst, and FAD management via E-mail. This will alert HQ and FSLG FAD coordinator of submission.


    Managerial approval is required prior to SRS referral submission.

  5. Document SRS with all pertinent information necessary to assist the FSLG specialist with their education outreach. SRS will track the referral and keep a record for future reference purposes. The FSLG coordinator will evaluate the referral and determine if it will be assigned, rejected or transferred. When assigned, a specialist is then notified by E-mail of the assignment and will initiate communication with the requestor (FAD employee). Once request is input on SRS, it will be assigned to an FSLG coordinator. The originator employee will receive a systemic E-mail notification indicating the receipt of request, along with the assigned SRS number. Within a few days the FAD employee will receive an updated E-mail indicating the FSLG analyst assignment.


    Monitor the account on web-site, notify manager if no response from FSLG within 10 business days of assignment to FSLG.

  6. Once case is received by an FSLG specialist, they may contact originator employee requesting additional case information to assist with their contact. Contacts made by FSLG will be conducted either by phone, or face to face visit. and is determined by the discretion of the assigned FSLG Specialist. FSLG will forward a detailed E-mail to FAD indicating actions taken, deadline given to the agency, and date of SRS closure.

  7. If submission of SRS referral is in regards to agency requesting technical or educational advise, generally continuation of case processing should be pursued. However situations may arise when it is not applicable. In situations where a case needs to be suspended until issue resolved in FSLG, put the case in suspense status for up to 30 days. Notate ICS of reason for suspense and actions taken. Update the control base with the :literals: FSLG-REFER.  (08-06-2015)
Escalation/ Referral Process Overview

  1. Due to restrictions on enforcement options, the escalation referral process was developed in situations when all efforts for resolution have been exhausted. A Service Level Agreement was agreed upon and signed with an effective date of March 1, 2014 by the Commissioner of SBSE, TEGE and the Chief Financial Officer to assist with these type of situations. This section addresses guidelines to follow when all contact attempts have been exhausted with no resolution based on the Streamline process. Refer to IRM; Streamline Process and Time Frames, regarding the Streamline process.

  2. When all efforts for resolution have been exhausted at the Campus team level, the next course of action is to escalate the case for resolution to the Campus CSCO Revenue Officer.

  3. The Campus Revenue officer will make additional contact attempts with the agency, which may include contact with second level of authority within the Agency. If the case resolution is not successful after Campus RO contact, the case will to be referred to the CSCO Operation Manager.

  4. Once received, the CSCO Operation Manager will review and validate all contact attempts have been exhausted, with no resolution. The case will then be forwarded to the Campus director's level via the Chief Planning and Analysis staff. The Campus director will review request, and forward approved completed referral form and request to SBSE Campus Director.

  5. SB/SE Director will determine whether a SB/SE Field Collection (FC) Revenue Officer contact would be beneficial for case resolution. The director will collaborate with HQ to determine whether or not the case should be referred to SBSE Field or bypass and forward directly to the IRS CFO office for assistance. Unresolved IRS and Treasury Bureau entities are an exception to the rule. Since IRS CFO office has ownership over these entities, they will bypass Campus and Field RO intervention and forwarded to CFO office. Refer to IRM IRS and Treasury Bureau Agencies, for additional guidance.

  6. If contact is successful, the Field RO will act as a liaison between the Campus RO, FAD unit and Agency to ensure the case is resolved in a timely manner.

  7. If contact attempt is not successful, and/or cannot be resolved, the Field RO will return the case back to SB/SE HQ Campus . HQ will review and determine next course of action per the escalation process. A determination will be made if issue warrants CFO intervention.

  8. Situations may occur which warrant HQ intervention to act as a liaison with an Agency. If research or information indicates the scenario surrounding the case is due to a sensitive nature, or is questionable if it should be handled within the scope of your duties, bring the case immediately to your manager’s attention.  (08-06-2015)
Campus Internal Escalation Process

  1. The initial escalation referral process needs to be determined when all research, contact attempts have been exhausted, with no case resolution. Upon determination the case meets criteria for escalation, complete the FAD Referral form. Document form of all actions taken towards resolution. The FAD referral form along with the case file needs to be forwarded to the manager for review/ approval. Once management approves the request, the case will be forwarded to the Campus Revenue Officer for review prior to a contact attempt.

  2. ICS history entry must contain a detailed summary to support your recommendation. Below is supporting documentation which needs to be addressed on FAD Referral form and ICS:

    • A detailed cause of delinquency,

    • Prior delinquency issues, if applicable

    • All required attempts to contact have been exhausted,

    • Actions taken on the account by Agency and employee

    • Clearly state what actions are being requested by the Campus Revenue Officer

    • Summary of information secured from FSLG and ICS history


      The list above is not all inclusive and additional documentation may be necessary.

  3. Open an Other Investigation (OI) on ICS to the Campus Revenue Officer ICS assignment number. Update the IDRS control base on the account to M status with the literal of RO-REF, with a 30 day follow up. The literal RO-REF identifies the case status is Campus RO. Refer to IRM Campus RO Assistance Guidelines.

  4. Case will remain open in the employee inventory to monitor while RO is reviewing and OI remains open. Once RO has completed his/her inquiry they will notate ICS history and close OI. In addition the RO history portion on the FAD referral form must be completed, and forward back to the FAD employee via management.

  5. If the RO is unable to resolve the issue, the OI will remain open and forwarded to management with RO’s recommendation per the escalation process- whether the case should be referred to the field or CFO officer. Refer to IRM ; Escalation Process Overview.

  6. Update the control base to M status, using the literals CSCORO-Ref to indicate case is being worked by the Campus RO.  (08-06-2015)
Campus Revenue Officer (RO) Guidelines

  1. When all attempts by FAD employee have been exhausted, a determination will be made by Management for the case to be assigned to the Operation Revenue Officer to possible contact the next level of authority within the agency to attempt to resolve the issue. The criteria for possible Campus RO contact is:

    • Agency refuses to pay,

    • Agency states cannot pay

    • Prior history of non compliance and no resolution after numerous contact attempts.

  2. The role of the Campus Revenue Officer is to review the referral and determine whether or not all contact attempts have been exhausted. Incomplete or erroneous referrals will be rejected back to the FAD employee with feedback indicating additional actions required. If deemed appropriate, the RO will attempt additional research and contact with the agency to resolve issue. The paragraphs below is general guidance for the RO to follow.

  3. Contacts with the next level of authority within the Agency may be required to assist with the case resolution.

  4. If contact successful, collaborate and act as a liaison between the FAD Unit and Agency to ensure the case is resolved in a timely manner. Upon case resolution the referral template and ICS will be notated of actions taken. Referral form will be kept in case file for future reference.

  5. If issue remains unresolved and/ or RO contact is not successful, the case will be escalated to the CSCO Operation Manager, then proceed to the Campus Director for review and approval of determination of all Campus contact attempts towards resolution has been exhausted.

  6. If Campus RO contact is not successful;

    • Update the referral template and ICS of actions taken. The OI will remain open if case needs to be escalated.

    • Update the control to HQ-REF, with a 45 day follow up

    • Recommendation for next steps of the escalation process must be notated, if applicable and forwarded to the Campus Director for review and validating all Campus actions for resolution has been exhausted.

    • Once reviewed and validated by the Campus Director, the referral form with any additional back up documentation will be forwarded to SBSE Campus Director for referral determination per the Service Level Agreement (SLA).  (08-06-2015)
Field Revenue Officer (RO) Assistance Referral

  1. After the Campus Director concurs that all attempts for case resolution are unsuccessful, the case will be forwarded to SBSE HQ Director, whom will determine if escalation for Field Revenue Officer contact is warranted for resolution.


    All case documentation and pertinent information must be included to support and assist with escalation process. Supporting documentation includes completed FAD referral form, signed and approved by Campus management, notation of Agency contacts which may assist with Field/ CFO contact.

  2. In addition to escalation referral process, other situations may also warrant the need to request Field RO assistance. Situations may include:

    • Face to face visit requested by Agency

    • Collection of payment in certain situations, which will determined by SBSE HQ  (08-06-2015)
CFO Office Referral Process

  1. CFO referrals will be considered by SBSE HQ after all contact attempts for resolution has been exhausted. Contact attempts include Campus employee, Revenue Officer intervention (Campus RO and/ or Field RO). Referrals to CFO must be reviewed and approved by SB Campus Director and SBSE HQ. The criteria for referring cases to the CFO office when all contact efforts by SBSE has been exhausted are as follows::

    • IRS or Treasury Bureaus (no balance due criteria is required)

    • Any significant situation whereas an Agency has not responded or provided sufficient information to resolve the compliance issue, or have indicated an unwillingness to take the necessary corrective action that may have a significant tax ramification.

    • Any significant un-applied credits (dollar amount will determined by HQ and CFO office on a case by case basis based on the specific situation)

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      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. The CFO office will attempt to contact the Agency executive office or Agency CFO to discuss the Agency's unresolved delinquent issue. After CFO completion of contact, SBSE HQ will be notified of outcome of contact attempts. The case will then be referred back to FAD team to monitor and or take final actions to resolve based on CFO contact. HQ will act as a liaison between the Campus, and CFO office. Resolution will be tracked and monitored by Campus management utilizing the CFO Tracking report. The update report will be shared with HQ on a weekly basis until case(s) are resolved.


    Follow up time frames will be determined based on each specific case scenario.

  3. The CFO office will contact the Agency executives or Agency CFO office directly, and inform them of the outstanding IRS tax issues. Method of contact will be determined at the discretion of the CFO office (letter, phone, e-mail or face to face).

  4. CFO office will communicate the results of the contact with SBSE HQ. Upon notification from SBSE HQ, the FAD employee will update the ICS history, and monitor for payment, tax return, or assist with any reconciliation necessary to resolve the delinquency. Update the control base to A status, with the literal CFO-FOLLUP. The FAD employee will assist with any necessary reconciliation, and/or monitor the account for payment/ return.

  5. If after all contact attempts from the CFO office have been exhausted with no resolution, the case will be escalated by the executives to the IRS Commissioner. The Commissioner of the IRS will then contact the head of the specific agency to achieve resolution. These situations should be rare in occurrence.  (08-06-2015)
Special Handling of Various Agencies

  1. Certain Federal agencies need to be worked either as a priority or have responsibilities which differ from other Federal Agencies. Example: Due to the various classifications of some agencies, their filing or reporting of tax may differ and need special handling. In addition, the CFO office has responsibility to ensure IRS and Treasury entities are in tax compliance. Guidance on processing each type of special handling is addressed in sub-sections below.  (08-06-2015)
IRS and Treasury Bureau Delinquent Agencies

  1. IRS and Treasury entities must be treated as priority. The CFO office is accountable for all IRS and Treasury agencies, and must be notified within 5 business days upon receipt in the FAD inventory of the cause and status of the account. HQ must be kept updated on the progression of IRS/ Treasury cases on a weekly basis Upon receipt, HQ will review and forward the weekly updates to CFO office until case resolution.

  2. A IRS- Treasury Tracking Report will be used weekly to monitor and track IRS entities. The report will be completed and forwarded to forwarded to SBSE HQ. The report must include the cause of the delinquency and pending status.

  3. If case cannot be resolved within 90 days, or initial contact was not successful, refer the case to HQ via management directives. Management will forward to Campus director for consideration of CFO referral, bypassing RO referrals. Refer to IRM ; CFO Referral Process, for additional guidance.

  4. For identification purposes, agencies under Treasury Bureau are listed below:

    • Alcohol and Tobacco Tax and Trade Bureau

    • Bureau of Engraving and Printing

    • Community Development Financial Institutions Fund

    • Financial Crimes Enforcement Network (FinCEN)

    • Internal Revenue Service

    • Office of the Comptroller of the Currency

    • Bureau of the Fiscal Service ( agency formed from the consolidation of Financial Management Services and the Bureau of Public Debt)

    • U.S. Mint  (08-06-2015)
Federal Agencies assigned to Handle Federal Labor Laws

  1. Certain government agencies have been assigned to collect wages from employers or Federal contractors which were erroneously not paid to their employees. These Federal agencies disburse the unpaid wage amounts to the employees concerned, determined from the results of a judicial court decision. Extensive investigations are performed by the Federal agencies to determine whether or not claims for back wages or unfair labor practices are valid. Agencies allowed to take this action and some of the provisions which allow such action are: Agencies assigned to handle such issues are:

    • Department of Labor (DOL) – Fair Labor Standards Act

    • Government Accountability Office (GAO) – Davis-Bacon Act

    • Housing and Urban Development (HUD) – Davis-Bacon Act

    • National Labor Relations Board (NLRB) – Labor Management Relations Act

  2. Research is performed by the appropriate assigned Federal agencies to determine if claims for back wages or unfair labor practices are valid. Therefore, a relatively long period of time may elapse between the time employees become entitled to the wages and the time they actually receive payment from the Agency involved.

  3. In addition to Federal income tax withheld, the assigned Federal Agency will report wages on the appropriate lines of Form 941 and compute the full amount of FICA taxes. The employer share of FICA is then deducted on one of the adjustment lines of Form 941 as a negative adjustment.


    Wages may also be reported on Form 943 or Form 944.

  4. See IRM, Processing of Forms 941X Filed by Federal Agencies to Report Employer Share of FICA Taxes (Wage Payments Made by Federal Agencies), for additional information.  (08-06-2015)
Federal Reserve Banks

  1. Federal Reserve banks are classified as Federal agencies, and assigned with an employment code of "Q" . Employment code of “Q” identifies “quasi- governmental” agencies. Since they are not assigned with an employment code of “F”, they are not assigned to FAD inventory. However, in rare situations a request may be made by HQ, CFO, or FSLG to assist with a case.

  2. These entities are part private in nature and part public by statute, which differs than other Federal agencies. They are liable to file and pay FUTA tax (Form 940) , which is not a general rule for Federal Agencies. Federal Reserve banks are all independent of each other and have their own autonomy and are assigned a separate EIN.

  3. There are approximately a total of twelve (12) Federal Reserve Banks. Unlike private commercial banks, Federal Reserve Banks do not provide general banking services such as checking, savings or lending. The Federal Reserve System is a quasi-governmental organization created by Congress that operates in the public interest. After paying its expenses, the FRS turns over its revenue to the U.S. Treasury.

  4. However, if a Federal Reserve bank entity is received in inventory due to incorrect employment code assignment, forward the entity information to FSLG (via manager/ lead), requesting for them to validate the employment code. If FSLG determines the entity is a quasi government entity, they will update the employment code and change to “Q”. Monitor for correction. Once the employment code has updated to an employment code Q, close the account off of ICS.  (08-06-2015)
General Reference Information for Federal Agencies

  1. Federal agencies may request additional tax information which may not be applicable to the tax period(s) in FAD inventory. Our goal is to assist the taxpayer to prevent future compliance issues. This section will give an overview of information and resources which may be of assistance with inquiries received  (08-06-2015)
Reference and Resources for Federal Agencies

  1. If an inquiry is received from an Agency not currently in FAD inventory regarding a general tax question, assist to the best of your ability. Utilize the chart below for additional reference guidance to refer them to:

    Reference Direct Link
    Federal-State Reference Guide provides state and local government employers a comprehensive reference source for social security and Medicare coverage, in addition to assistance on determining worker status, public retirement systems, social security and Medicare coverage and benefits, employment tax laws and other tax issues. This publication also contains contact telephone numbers and an address where customers can write for additional information. Publication 963
    IRS.gov website- “FAQ For Federal Agencies” http://www.irs.gov/Government-Entities/Federal,-State-&-Local-Governments/Federal-Agency-Frequently-Asked-Questions
    IRS.gov website- “Information Return Reporting for Federal Agencies http://www.irs.gov/Government-Entities/Federal,-State-&-Local-Governments/Information-Return-Reporting-for-Federal-Agencies
    SSA website for inquires regarding W-2s filed http://www.ssa.gov/employer/#a0=0
    Electronic Filing Payment Tax System (EFPTS) Federal Agencies can contact EFTPS Customer Service directly at 1-877-333-8292 for assistance or issues related to the EFTPS System, or 1-866-255-0654 for web-site support.  (08-06-2015)
Payment Options for Federal Agencies

  1. Federal Agencies have the option of either utilizing the Electronic Federal Tax Payment System (EFTPS) or Intra-Governmental Payment & Collections (IPS) to transmit payments to the IRS. The following paragraphs provides an overview and general guidance for each payment option.

  2. EFTPS: Federal Agencies are encouraged to use EFTPS for tax deposit payments, which is operated by Bank of America. The EFTPS system enables taxpayer’s to make electronic deposits and payments for federal taxes. EFTPS provides an immediate acknowledgment, which is a benefit for the Agencies. The system also enables taxpayers to search filing history and archives up to 16 months of EFTPS history by form, year, quarter, date, trace number, or payment total. For additional guidance, see IRM Electronic Federal Tax Payment System (EFTPS) for information, or IRS.gov, keyword EFTPS for guidance.
    Inquiries and concerns related to EFTPS can be directed to call 1–800-945-8400 or 877–333–8292. In addition you may consider referring the Agency to IRS Pub 966 , or visit www.eftps.gov, which also has a section specifically for Federal Agencies: http://serp.enterprise.irs.gov/databases/irm.dr/current/3.dr/3.17.dr/3.17.277.dr/; EFTPS for Federal Agencies
    Federal Agency’s tax payments are processed through the and are driven by the Transaction Reporting System , (TRS) and the Agency location code (ALC). Each payment includes the ALC in the field normally used for the Routing Transit Number. Payments made by federal agencies through EFTPS is identified by the EFT number beginning with 291.

    • Federal Agencies are encouraged to utilize EFTPS for Federal Agencies to make payments on tax returns listed below:
      Form 941, Employer's Quarterly Federal Tax Return
      Form 945, Annual Return of Withheld Federal Income Tax
      Form CT-1, Employer's Annual Railroad Retirement Tax Return
      Form 720, Quarterly Federal Excise Tax Return
      Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons

  3. IDRS Command Code EFTPS can be utilized to research payments made through EFTPS.


    See IRM 2.3.70, Command Code EFTPS for additional information on CC EFTPS. See IRM for information on EFTPS payment tracers.

  4. IPAC: The IPAC process was established to allow governmental agencies to have the ability and convenience of transferring funds from one Federal agency to another. If the agency is requesting to transfer funds to pay an outstanding balance, the following information must be used to process an interagency payments to the IRS:
    IRS: COLLBCA 020 F3885011.


    Refer toIRM 5.1.2902; Intragovernmental Payment & Collections (IPAC) Instructions, for additional guidance.  (08-06-2015)
FAD Reports- Tracking Cause and Case Resolution

  1. ICS database captures and tracks information documented indicating the "Cause and Case Resolution" on each entity in inventory. Specific line entries under ICS Approved Program Names 1 & 2 are specifically for FAD reporting. The Program Names 1 & 2 listing is located under the Entity tab, then Maintain Program Names. Program 1 is to be used to update the initial determination of the "Cause" of the account to be in Collection status, and Program Name 2 is to be used to document the "Case Resolution. " .

  2. There will be situations where several issues may have contributed to the delinquent issue. Determine and use the root cause of the delinquency. IF there is both a Baldue and TDI issue on the same case, the Baldue issue should be considered the "root" cause.

  3. The cause of the case delinquency issue and case resolutions must be recorded on ICS, which will be used to generate trend reports. Error trends will be shared with FSLG for educational purposes. Reports will be generated by ICS programmers and forwarded to management on during the first week of each month.

  4. Upon case closure, select the appropriate issue type on ICS fields-Approved Program Name 1 & 2 to address the Cause and Case Resolution . Approved Program Name 1 drop down menu will be used to select the Cause of the delinquency issue, while Approved Program Name 2 drop down menu is to be used to select the Case Resolution type. The following paragraphs below displays the specific case type to select from the appropriate drop down menus specified. The data will be used for reporting/ tracking purposes. The information will be shared with FSLG per the Service Level Agreement.

  5. Refer to the table below for drop down menu selection to capture the Cause under - Approved Program name 1

    Issue- Cause Definition
    FAD Return Math Err Math error on tax return secured
    FAD Underpmt of Tax Total tax due is above payment(s) received.
    FAD Exam Assess Exam assessment
    FAD CAWR Assess CAWR assessment
    FAD Cr Discrepancy Credit discrepancy (i.e; payment applied to incorrect tax period, MFT, or another account.
    FAD IRS/Systemic Err IRS error (ie; incorrect filing requirement opened, amended return not processed correctly)
    FAD Non-Filed Return TDI issue- Open TDI non filed return
    FAD Emp Code Error Possible incorrect employment code "F" assignment.


    Refer to management.

    FAD Education Agency contacted FAD employee requesting compliance assistance on a non open issue in FAD.
    FAD Other Issue does not match other issues (i.e.; resolved prior to assignment to FAD,)


    Document ICS history of specific reason for delinquency in more detail. Detailed information may be valuable for FSLG planning of upcoming educational outreaches and seminars.

  6. Refer to the table below for drop down menu selection to capture Case Resolution (Cure) listed under -Approved Program name 2:

    "Case Resolution" "Definition"
    FAD Adjustment Adjustment to account resulting in resolution
    FAD Cr Offset/Transfer Credit was offset or transferred to satisfy liability.
    FAD Balance Full Paid Payment received/ Full paid account
    FAD W-2/W-3 Recon Reconciliation of W-2 and or W-3s
    FAD Return Secured TDI- return secured
    FAD Not Liable to File TDI- TC 590 input
    FAD No Longer Liable TDI- TC591 input; EIN no longer being used, no longer have employees, etc.
    FAD EIN Merged EIN was merged with an associated EIN
    FAD Emp Cd Issue Res Employment Code assignment issue resolved
    FAD Closing Agreement *Only use when directed by HQ. Closing agreements are only initiated by CFO office
    FAD Prev. Action Case resolved prior to assignment to FAD inventory by another Campus area.


    Ensure ICS history is also documented of Cause and Case resolution.  (08-06-2015)
Closed Case Files

  1. Closed FAD cases will be retained within the centralized FAD Unit for a period of two years. Write or stamp "Closed" with the closed date on the case file. Upon the two year expiration, the retired files will be forwarded to the Federal Record Center (FRC). Notate AMS history and case history sheet with the FRC location, box number, ascension number, and date. Refer to IRM 1.15.29; Records Control Schedule for Collection, for authorized disposition schedule. Records Control Schedule for Collection, for authorized disposition schedule.

  2. Due to the sensitivity of Federal Agencies, it is required to keep all pertinent information and documentation in the case file when sent to IRS Retention Center. The following information must be kept in case file, however is not inclusive of all information needed to retain. Pertinent information will depend on each case situation :

    • Copy of ICS complete account history,

    • Reconciliation spreadsheets, if applicable. Including copies of W-2/ W-3 documentation received from CAWR, SSA or Agency

    • Transcript of accounts, if required to support adjustments taken to account

    • Correspondence from taxpayer

    • E-mails with pertinent information to support actions taken, if applicable

    • Referral form, if applicable

Exhibit 5.19.15-1 
List of Government Executive Agencies

The Federal government is comprised of three branches; the Judicial, Legislative and the Executive branch.

  1. The Judicial branch includes Federal courts, such as bankruptcy and tax court, as well as the Supreme Court

  2. The Legislative branch includes the Congress and Senate, as well as organizations that support them such as the Congressional Budget Office (CBO), Government Accountability Office (GAO), Government Printing Office (GPO) and Capitol Police.

  3. The Executive branch includes the departments listed below as well as many Independent Agencies, Boards, Committees, Commissions and Quasi-Government Agencies.
    Department of Agriculture (USDA)
    Department of Commerce (DOC)
    Department of Defense (DOD)
    Department of Education (ED)
    Department of Energy (DOE)
    Department of Health and Human Services (HHS)
    Department of Homeland Security (DHS)
    Department of Housing & Urban Development (HUD)
    Department of Justice (DOJ)
    Department of Labor (DOL)
    Department of State (DOS)
    Department of Interior (DOI)
    Department of Treasury
    Department of Transportation (DOT)
    Department of Veteran Affairs (VA)

Refer to http://www.usa.gov/directory/federal/index.shtml. Also refer to IRM and IRM; for further information on Federal entities.

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