7.13.7  Moving Cases through the EDS Inventory Control Subsystem

Manual Transmittal

June 11, 2013

Purpose

(1) This transmits revised IRM 7.13.7, Employee Plans Automated Processing Procedures, Moving Cases through the EDS Inventory Control Subsystem.

Material Changes

(1) Minor editorial changes have been made throughout the text to improve grammar and clarity.

(2) IRM 7.13.6, Employee Plans Automated Processing Procedures, Inventory Control Subsystems merged into this IRM because of duplication of guidance pertaining to tracking and closing cases in the Employee Plans - Exempt Organizations Determination System (EDS) through the use of status code updates.

(3) IRM 7.13.7.1, Overview updated to show that Tax Exempt Determination System (TEDS) works in conjunction with EDS for processing determination letter (DL) applications.

(4) IRM 7.13.6.2, Status/Action Codes paragraph (1) moved to IRM 7.13.7.4, Field Descriptions Conditions and Instructions for Updating. Renamed the subsection Open Codes and updated adding new status codes 57, 59, 60, 61, 63, 64, 71, 72, 73, 74, and 91.

(5) IRM 7.13.7.2, Closing Codes and Descriptions updated adding new status code with descriptions and moved to new subsection IRM 7.13.7.5, Closed Codes.

(6) Added new data to IRM 7.13.7.2, Updating A status on EDS.

(7) IRM 7.13.7.3, EP Screen Options and IRM 7.13.7.4, Field Descriptions Conditions and Instructions for Updating removed because of repetitive data in Exhibit 7.14.5-3, Exhibit Query/Update Master Record and Status.

(8) Added new Exhibit 7.13.7-1, Open Codes and Descriptions.

(9) Added new Exhibit 7.13.7-2, Closing Codes and Descriptions.

(10) Added new Exhibit 7.13.7-3, QAS Address List.

Effect on Other Documents

IRM 7.13.7 dated April 1, 2006 is superseded.

Audience

Tax Exempt and Government Entities (TE/GE)Employee Plans Personnel

Effective Date

(06-11-2013)

Robert Choi
Director, Employee Plans
Tax Exempt and Government Entities

7.13.7.1  (06-11-2013)
Overview

  1. Employee Plans (EP) Determinations now processes most applications through the automated system, TEDS. However, EDS continues to play a major role in working paper cases and in closing the majority of all cases. The procedures in this IRM primarily pertain to working EDS (paper cases) with certain sections applying to both systems. For more information on TEDS see IRM 7.15.1, Employee Plans TEDS User Manual, Tax Exempt Determinations System (TEDS) Employee Plans User Manual Introduction.

    Note:

    Do not update a status or change entity information in EDS on any case worked in TEDS or TEDS will no longer transfer status information to EDS (called an EDS block).

  2. This IRM supplements IRM 7.14.5, Employee Plans EDS User Manual, Inventory Control Subsystem (ICS) and provides additional instructions to EP specialists, reviewers and managers on the Inventory Control System (ICS) segment of EDS.

  3. ICS includes many features which allow users to manage, track, and otherwise control applications from transcription through closing.

    Note:

    lCS replaced the EP/EO Application Control System (EACS) as the inventory control system for determination letter requests. EACS continues to exist in the service centers but is now referred to as the Masterfile Pipeline System (MPS). MPS functions as the link between EDS and the Employee Plans Master File (EPMF) in Martinsburg, West Virginia. An entity is electronically transferred to the master file for each case closed on ICS with closing codes 00, 01, 02, 04, 06, and 09. EP entities are transferred to EPMF.

7.13.7.2  (06-11-2013)
Updating A Status on EDS

  1. For cases not worked in TEDS, updates should be made directly to EDS through the ICS. Updates for cases being worked on TEDS, should be made directly in TEDS. Updates made in TEDS automatically roll over to EDS. This includes status updates, correcting information on the Master Record and/or closing updates. Open status codes are located in IRM 7.13.7.4, Open Codes and Descriptions.

  2. Each action and update (e.g., assigning cases, creating letters or correcting entity information) entered on EDS creates a case history record reflecting the information entered into the system and the identity of the employee who entered the information. See Exhibit 7.14.5-6, Case History Record Screen in IRM 7.14.5.

    1. This case history can be displayed on the Update Master Record Screen by depressing a function key.

    2. The history record can be printed by following the instructions in Exhibit 7.14.5-11, Case History Record Screen in IRM 7.14.5.

7.13.7.3  (06-11-2013)
Closing a Case on EDS

  1. After the specialist has worked the case to completion , the group secretary will:

    1. Update EDS with the proper proposed closing code.

    2. Print Form 8671, Case Closing Sheet.

    3. Place the Form 8671 in the case file.
      See IRM 7.14.5.4, Output of the Inventory Control System.

  2. The ICS will automatically update the case status to 55 (Awaiting Closing Approval) when any of the proposed closing codes are entered on the Master Record.

    Note:

    Actions that require Quality Assurance Staff (QAS) approval (e.g., proposed adverse letter or technical advice request) are considered a proposed closing by the ICS even though the case is not actually closed.

  3. Status code 55 is a managerial code. When a case is in this code, the manager has the following options:

    1. Approve and close the case without review.

    2. Review, approve and close the case.

    3. Review and return to specialists for further analysis.

    Closed status codes are located in IRM 7.13.7.5, Closing Codes and Descriptions.

    Note:

    The Area Offices may choose to allow group clerks to close the cases after the group manager has approved the case for closing. See Exhibit 7.14.5-9, Approval of Case Closing Screen.

  4. If the specialist’s actions are acceptable, the manager will initial the Form 8671 and approve the case on EDS. See Exhibit 7.14.5-9, Approval of Case Closing Screen

  5. If the case is returned to the specialist for further analysis, the case is updated to status 53, 64, or 73. See Exhibit 7.13.7-1, Open Codes and Descriptions.

  6. The specialist must attach a Form 3198, Special Handling Notice to the front of the file when the case is QAS mandatory review. The Form 3198 alerts management of the mandatory review requirement. Management must update the case to status 31 on EDS (TEDS is not equipped for QAS as of the date this IRM is being published). The status is updated by entering an "x" next to the case number on the Case Approval Screen. See IRM 7.11.1.40.1, Mandatory Review Cases. Send the case to QAS at one of the addresses in Exhibit 7.13.7-3, QAS Address List.

  7. EDS automatically, on a random basis, selects cases for TE/GE Quality Measurement Standards (TEQMS) review. If a case is selected, "SENT FOR TEQMS" is reflected on the comment line of the Case Approval Screen. The DL should not be mailed to the taxpayer, instead, the secretary will send the complete case file (the paper case and orange folder, if applicable) to QAS on a Form 3210, Document Transmittal. A Form 3198, Special Handling Notice should be attached to the front of the administrative file indicating "TEQMS" . The address for QAS is listed in Exhibit 7.13.7-3, QAS Address List.

    Note:

    If the automated process does not function properly, a manual selection process will be instituted, with the assistance of the Data Analysis Unit (DAU), to ensure the statistical validity of TEQMS selections. QAS will follow the manual process and notify the groups when a case has been selected. Selected cases will be sent to QAS using the same procedures described above.

  8. DL applications must be held open for 60 days from the control date to allow adequate time to receive interested party comments. ICS will prevent EP cases from closing before the required 60-day hold period unless the closing code is:

    1. 03 (Returned Incomplete)

    2. 04 (Withdrawn by Taxpayer)

    3. 07 (Form 5310-A, Notice of Plan Merger or Consolidation, Spinoff, or Transfer of Plan Assets or Liabilities; Notice of Qualified Separate Lines of Business, Referral Generated)

    4. 08 (Form 5310-A, Accepted as Filed)

    5. 08 (Form 4461-B, Application for Approval of Master or Prototype or Volume Submitter Plans, Accepted as Filed)

    6. 30 (Correction Disposal)

    7. Any closing code used for group/pool trust cases (Form 5316 or Form 9999)

  9. An unpostable condition code may appear in the MF status field if a case opening or closing record was not accepted on the transfer from EDS to the Master File. The code identifies the unpostable condition and indicates whether it occurred on opening or closing. Cases can be updated for proposed closing but the unpostable condition must be resolved before the manager approves the closing. Contact the Unpostable Clerk to resolve the condition. See IRM 7.13.8, EDS Unpostables.

7.13.7.4  (06-11-2013)
Open Codes

  1. The status/action code must be updated each time a case is moved from one location, process, or specialist.

  2. See Exhibit 7.13.7-1, Open Codes and Descriptions for a list of all the available status/action codes for open cases.

7.13.7.5  (06-11-2013)
Closing Codes

  1. The closing status/action code must be entered on the EDS Master record before a case can be closed.

  2. See Exhibit 7.13.7-2, Closing Codes and Descriptions for a list of all the available status/action codes for closed cases.

Exhibit 7.13.7-1 
Open Codes and Descriptions

The status/action codes for tracking open/ongoing EP cases are as follows:

Code/Status Description
31 (In Review) Generated on EDS for case(s) selected for TEQMS, mandatory, or manager review
32 (Returned on Review Memo) Use by only QAS to update the case record from Code 31 when cases file(s) are returned to the specialist with a Reviewer’s Memorandum for additional consideration
33 (Returned from Review) Use by only QAS to update the case record from Code 31 to return to the group without a Reviewer’s Memorandum
34 (District Council Approval) Use by only QAS to update the case record from Code 31 when a case goes to Counsel for approval before the final letter is issued. For example:
  • Final adverse letter has been prepared because the applicant failed to appeal a proposed adverse letter

  • Favorable letter has been prepared based on Tax Court findings

  • Final adverse letter has been prepared based on a Technical Advice

35 (30-Day Letter Mailed by QAS) Use by only QAS to update the case record when the proposed adverse letter is mailed
37 (Group Suspense) Use by the specialist or group clerk to update the case record when case(s) are placed in suspense at the group level
38 (Review Suspense) Use by only QAS to update the case record when case(s) are placed in suspense at the QAS level
39 (Technical Screening Suspense) Use by the specialist or group clerk to update the case record when case(s) are placed in suspense at the technical screening level
40 (Proposed Adverse Determination) Use by the specialist to update the case record when a proposed adverse determination letter is prepared and ready for managerial review
All closing data except the 02 closing code must be entered before releasing the case for managerial approval
41 (Proposed Technical Advice) Use by the manager to update the case record after the specialist has completed all actions necessary to request technical advice and has forwarded the case to his/her manager for review
Once approved by the group manager, the case will be forwarded to QAS who will update and forward to the Washington D.C. office
50 (New Case Establishment) Automatically generated by the Inventory Control System (ICS) on EDS when a case is entered on the Data Transcription System (DTS)
51 (Waiting Assignment - Technical Screening) Use to update the case record when identified for assignment by technical screeners
Unassigned non-merit cases and cases that must go full review are in this status
52 (Case Assignment) Use to update the case record when the case is assigned to a specialist
53 (Manager Returned to Specialist) Use by the manager or group clerk to update the case record when returning a case to the specialist
54 (Transferred to Appeals) Use by only QAS to update the case record that is being transferred to Appeals
55 (Waiting for Closing Approval) Automatically generated by ICS when the case record is updated with any closing code
This action removes the case from the specialist’s inventory and places it at the managerial level
56 (Technical Advice Transfer-Suspense) Use by only QAS to update the case record when a technical advice request is ready to be mailed to the Washington D.C. office (Code 41 must be previously entered by specialist)
57 (For Closure on EDS) Use to update the TEDS case record when the manager determines a case is ready to be closed
58 (Workload Transfer) Use to update the case record for cases transferred to/from an Area Office
59 (EDS Manual Process) Use to update the TEDS case record when the manager determines a case will not be worked in TEDS but must be worked in EDS as a paper case
60 (Open & Technical Screening) Use by the technical screening group to update the record of any open technical screening case
61 (Unassigned Inventory Technical Screening) Use to update the case record identified as a merit or screening case but still awaiting assignment
62 (Assigned & Technical Screening) Use to update case record to a technical screener
63 (Case Established TEDS) Use to update the case record which has been fully processed and has been uploaded into the TEDS repository
64 (Manager Returned Technical Screener Case to Specialist) Use by the manager or group clerk to update the case record of screening case that is returned to the specialist
71 (Unassigned Inventory Accelerated Processing) Use to update the case record when case is identified as autoclosure or accelerated processing case but still awaiting assignment
72 (Assigned to Accelerated Processing Specialist) Use to update the record of autoclosure case to a specialist or technical screener
73 (Manager Returned Accelerated Processing Case to Specialist) Use to update the record of an autoclosure case to a specialist or a technical screener
74 (For Managerial Review) Use by specialist to update the record of TEDS case when submitting the case to the manager for proposed closure, reassignment, or other reason
75 (Unassigned Inventory) Use to update the record of case that is assigned to the group inventory
91 (Full Review unassigned Inventory) Use to update the record of screened case that will be assigned to a specialist in status 52

Exhibit 7.13.7-2 
Closing Codes and Descriptions

The status/action codes for closing EP cases are as follows:

Code/Status Description
00 (Approved - Issue Only) Use to update the case record after performing an issue only analysis and reaching a decision to issue a favorable determination letter
See IRM 7.11.1.16, Extent of Analysis for description of issue only analysis

Note:

Do not use this closing code for a case in status 62

01 (Approved - Fully Worked) Use to update the case record after performing a complete analysis and reaching a decision to issue a favorable determination letter
See IRM 7.11.1.16, Extent of Analysis for description of complete analysis

Note:

Do not use this closing code for a case in status 62

02 (Final Adverse) Use by only QAS to update the case record when an application receives an adverse letter
03 (Returned Incomplete) Use to update the case record when the application is returned to the applicant as incomplete or for applications returned because the IRS is not authorized to rule
04 (Withdrawn by Taxpayer) Use to update the case record when the IRS returns the application due to the sponsors request to withdrawal
05 (Substantially Deficient - converted to 03) Use to update the case record of a technically deficient application returned to the applicant and/or if the application cannot be reviewed in a reasonable amount of time
06 (Approved - Closed on Merit) Use to update the case record of a technical screening no contact closure

Note:

Do not use this closing code for a case in status 52

07 (Form 5310A - Referral Generated) Use to update the case record after preparation of Form 5666, TE/GE Referral Information Report, when the technical screener recommends subsequent follow-up for a Form 5310-A application
08 (Form 5310A - Accepted As Filed) Automatically generated to update the case record for closing a Form 5310-A or Form 4661-B after the notification letter is prepared
09 (Closed in Tech Screening with Taxpayer Contact) Use to update the case record of a technical screening with contact closure

Note:

Do not use this closing code for a case in status 52

13 (Proposed Auto Closure) Use to update the case record when using the autoclosure procedures
30 (Correction Disposal) Use to update the record of an erroneously established case(s)
These cases are not counted as Management Information Reports (MIR) accomplishments

Exhibit 7.13.7-3 
QAS Address List

Division Address
EP Determinations Quality Assurance Staff mailing address Internal Revenue Service
550 Main Street
EP Determinations Quality Assurance - Room 7008
Cincinnati, OH 45202
EP Determinations Quality Assurance Staff express mail or delivery service Internal Revenue Service
PO Box 2508
EP Determinations Quality Assurance - Room 7008
Cincinnati, OH 45201

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