Revenue Agent Reports (RARs) should contain all the information necessary to ensure a clear understanding of the adjustments and demonstrate how the tax liability was computed. Based upon the importance of the RAR, examiners should take all necessary steps to ensure report accuracy. Workpapers are the written records kept by the examiner that provide the principal support for the RAR and document the procedures applied, tests performed, information obtained, and the conclusions reached in the examination. They should include all the information necessary to conduct the examination and support the audit results. A regular agreed report (Form 4549) may contain up to three tax years. Agreed RARs require the taxpayer’s signature and include a statement that the report is subject to the acceptance of the Area Director, Area Manager, Specialty Tax Program Chief, or Director of Field Operations. Generally, the report forms for unagreed cases are identical to the report forms for agreed cases. Some exceptions include examinations involving non-taxable returns. All unagreed cases require written comment regarding: the Team Manager’s involvement in the examination the validity of the issues involved, and a statement that a closing conference was or was not held with the taxpayer. Form 886-A is the written explanation of adjustments in all unagreed cases. If an adjustment involves a detailed computation, a worksheet will be attached. The following format is used when preparing Form 886-A: a) Facts, e.g., the activity or non-activity the organization or plan has engaged in or started b) Law – states the applicable code and regulation sections, and Rev. Rulings, Revenue Procedures, etc., that support the position c) Government’s Position – states why the application of the law to the facts supports the conclusion reached by the specialist d) Taxpayer’s Position – what authority the taxpayer is relying upon (as opposed to the agent’s conclusions). If possible, the taxpayer’s position should be secured in writing e) Conclusion – comments on the position taken by the taxpayer. After consideration of all items, the proper tax liability or other Service action is to be sustained Basic report forms in unagreed cases are designed to cover three years. Regardless of the number of years examined.