1.4.51  Insolvency

Manual Transmittal

August 11, 2015


(1) This transmits a revised IRM 1.4.51, Resource Guide for Managers, Insolvency.

Material Changes

(1) Editorial changes have been made and citations have been updated where appropriate.

(2) Organizational names and titles have been changed where appropriate.

(3) IRM was updated to include case review schedule as an item to be discussed with employees.

(4) IRM was updated to clarify Collection Policy Insolvency's roles and responsibilities.

(5) IRM was removed as the information is obsolete.

(6) IRM was updated to include additional group manager administrative responsibilities.

(7) IRM was updated to include a reference to the Taxpayer Bill of Rights website.

(8) IRM was updated to correctly reflect taxpayer rights as described in the Taxpayer Bill of Rights.

(9) IRM was updated to reflect that Form 14461, Transmittal of CDP/Equivalent Request Hearing, replaced Form 12153A, Referral Request for CDP Hearing and Request for CDPTS Input.

(10) IRM was updated to include information regarding taxpayer rights.

(11) IRM was updated to include information on taxpayer rights.

(12) was updated to include new organizational titles.

(13) IRM incorporates guidance from IG SBSE-01-0314-0018, Interim Guidance on GM Responsibility for Employee IDRS Profiles, which indicates that group managers are responsible for ensuring that their employees have access to the IDRS command codes necessary to perform their assigned tasks and required research.

Effect on Other Documents

This supersedes IRM 1.4.51 dated October 04, 2013.


Small Business/Self-Employed, Speciality Collection Insolvency Management

Effective Date


Related Resources

IRM resources:

  • IRM, Administrative Responsibilities

  • IRM 1.5.2, Uses of Section 1204 Statistics

  • IRM 1.15, Records and Information Management

  • IRM 5.9.5, Opening a Bankruptcy Case

  • and 5.9.12, Insolvency Automated Processes

  • IRM 5.13.1, Embedded Quality Administrative Guidelines

  • IRM 6.430.2, Performance Management Program for Evaluating Bargaining Unit and Non Bargaining Unit Employees Assigned to Critical Job Elements (CJEs)

  • IRM 6.751, Discipline and Disciplinary Actions

  • IRM 6.800.2, Telework (Flexiplace) Program

  • IRM 10.4.1, Managers Security Handbook

  • IRM 25.1.8, Field Collection

Web Resources:

  • Critical Job Elements (CJE): http://hco.web.irs.gov/apps/cje/

  • Embedded Quality: http://mysbse.web.irs.gov/mgrsact/eq/default.aspx

  • Human Capital Office (HCO) : http://hco.web.irs.gov/

  • iManage: http://ss.ds.irsnet.gov/sites/MRC/Pages/COPsDefault.aspx.

  • My SBSE: http://mysbse.web.irs.gov/default.aspx

  • 2012 National Agreement II with NTEU: http://hco.web.irs.gov/lrer/negotiations/natagree/index.html

  • New Manager Orientation (NMO) Support Center: New Manager Support Center website

  • Section 1203/RRA 98: http://hco.web.irs.gov/lrer/conperf/1203issues/index.html

  • Telework: http://hco.web.irs.gov/Telework/

  • UNAX: http://irweb.irs.gov/AboutIRS/bu/pipds/pip/privacy/unax/default.aspx

  • Office of Professional Responsibility: http://nhq.no.irs.gov/OPR/

Kristen Bailey, Acting Director, Collection Policy  (08-11-2015)
Chapter Overview

  1. This chapter discusses responsibilities of managers in Field Insolvency (FI) and Centralized Insolvency Operation (CIO). While many topics are touched upon in this chapter, comprehensive guidance about all of them cannot be included here. Remain alert for references to other resources, such as related IRMs and websites and access that guidance to ensure a thorough understanding of topics.  (08-11-2015)
Role of the Field Insolvency Manager and Centralized Insolvency Manager

  1. Fundamental responsibilities for all managers are discussed in IRM 1.4.1, Management Roles and Responsibilities. An Insolvency manager must provide oversight and direction in a number of areas, which will result in accomplishing the mission of the Internal Revenue Service. Oversight responsibilities include, but are not limited to:

    1. Ensuring employee case actions are timely and in accordance with current law, policies, and procedures.

    2. Ensuring employees maintain high standards of professionalism in all their contacts with the public, internal customers and coworkers.

    3. Ensuring employees observe taxpayer rights.

    4. Ensuring employees are aware of ongoing changes to the laws, policies, and procedures that relate to their responsibilities (preferably during group meetings).

    5. Addressing systems issues that impact either internal or external customer needs.

    6. Ensuring cases are assigned timely and employee workload:
      - Reflects current priorities.
      - Reflects employee experience and skill level.
      - Addresses Servicewide objectives.
      - Protects public interests.
      - Allows for effective case processing.

    7. Helping employees make the appropriate next case decision.

    8. Ensuring employees are accountable for the appropriateness of their actions.

    9. Providing ongoing employee feedback that is candid and meaningful and will establish a basis for determining an accurate assessment of performance and developmental needs.

    10. Issuing the Critical Job Elements (CJE) timely in accordance with the current 2012 National Agreement II and evaluating employees' performance against their CJEs.

    11. Creating and maintaining a work environment that will promote team work, positive working relationships, and increased employee satisfaction.

    12. Ensuring employees have necessary functioning equipment and supplies.

    13. Overseeing the time reporting process and ensuring that the group’s End of Month (EOM) time and inventory data are accurate and timely.

  2. Responsibilities also include:

    1. Developing employees.

    2. Evaluating employee performance and providing counseling.

    3. Addressing employee conduct issues.

    4. Fostering good working relationships.

    5. Defining goals and course of action.

    6. Assigning and directing work.

    7. Instructing employees in the application of procedures and guidelines.

    8. Displaying integrity in all actions.

  3. Managers are empowered to address performance deficiencies within their group. This may be accomplished through reviews and/or by requiring concurrence with performing specific actions.


    It is found that NFTL re-filing determinations are not being made in accordance with IRM, Refiling Notices of Federal Tax Lien (NFTLs). The manager can require the employee to notify him or her at case closure of Automated Insolvency System (AIS) history documentation of the NFTL refiling determination.

    For additional direction regarding performance issues see Exhibit 1.4.51-1, Suggested Action Steps for Unacceptable Performance.

  4. Managers also oversee group remittance processing activities, including monitoring Form(s) 5919, Teller's Error Advice, sent to their group. See IRM, Responding to Form 5919.  (08-11-2015)
Communicating Expectations

  1. When a new group is established or a new manager is assigned to an existing group, a meeting with the employees must be held within the first 30 days. At this meeting the manager will communicate expectations to include the following topics:

    • Group procedures

    • Case work

    • Use of time - office/field/Telework

    • Timeliness of case activity

    • Reasonable time frames for case actions. (See IRM, Initial Processing Actions, IRM, AIS Documentation, and IRM 5.9.16, Insolvency Case Monitoring for timeliness and time frames.)

    • Case Review Schedule

    These expectations should also be reviewed at the beginning of each fiscal year.


    This meeting is considered a 7114 meeting. Local National Treasury Employees Union (NTEU) chapter(s) must be notified of the meeting in accordance with Article 8, Union Rights, of the IRS/NTEU 2012 National Agreement II.

  2. When a new employee is assigned to an existing group, the group manager must meet with the new employee to discuss managerial expectations (see (1) above) and ensure appropriate on-line Forms 5081 are completed and processed. This meeting is considered a 7114 meeting. See the Note in (1) above.  (08-11-2015)
Group Meetings

  1. Regular group meetings will be held as necessary to review items such as the following:

    • Directives from the Territory Manager, Department Manager, Operation Manager, Director, and Headquarters

    • Procedural memoranda

    • IRM changes

    • Case resolution techniques

    • Changes in condition of employment

    • Automation issues

    • Mandated topics not available on other media

    • General group (employee) concerns


    Regular group meetings are not ordinarily considered 7114 meetings. The Union entitlement arises where there is a discussion of a personnel policy, practice or other general condition of employment.


    A discussion at a group meeting on the need to make timely TFRP determinations or how to handle a particular type of case would not ordinarily be considered 7114 issues. A group meeting addressing changes in condition of employment would ordinarily be considered a 7114 meeting.

    Managers should seek guidance and advice from their servicing Labor Relations (LR) Section if they are unsure whether an agenda item for a group meeting constitutes a 7114 issue. Article 8, Section 1 of the 2012 National Agreement II also provides guidance on 7114 Meetings.  (08-11-2015)
End of Month (EOM) Processing

  1. Managers are responsible for reviewing time reported by their employees to ensure accuracy. Using Collection Time Reporting System (CTRS), verify time prior to End of Month (EOM) processing (i.e., no later than close of business on the last Friday of the monthly reporting period). Consider the following:

    1. Be alert for, and/or address as appropriate issues such as potentially excessive administrative time, discrepancies related to credit/compensatory/ holiday/training time, etc.

    2. Perform weekly time verification and checks for all employees.

    3. Refer to IRM 5.2.1, Collection Time Reporting, for specific information about GM responsibilities related to time reporting.  (08-11-2015)
Functional Role

  1. The Insolvency function is comprised of two operations, Field Insolvency (FI) and the Centralized Insolvency Operation (CIO), which must work together to provide customer service while addressing employee satisfaction in delivering improved business results. Three separate business units are directly involved in bankruptcy processing:

    • Specialty Collection Insolvency (Field Insolvency and CIO)

    • Collection Policy, Insolvency

    • SBSE Counsel

  2. FI. Field Insolvency has many offices throughout the country. FI:

    • Works all aspects of Chapter 11, Chapter 12, Assignments and Receiverships.

    • Completes initial case review of Chapter 7 Asset and Chapter 13 cases.

    • Works Chapter 7N Large Dollar cases referred to them from CIO.

    • Refers Chapter 9 and Chapter 15 cases to Counsel for procedural guidance after clerical processing has been completed.

    • Responds to "complex issues" on any case regardless of chapter. (See IRM,Complex Issues.)

  3. Centralized Insolvency Operation (CIO). The CIO is located in Philadelphia. The CIO:

    • Performs initial clerical processing on cases for all bankruptcy chapters.

    • Works Chapter 7 No Asset cases from 341 notice to closure including screening large dollar cases for exempt and abandoned property.

    • Works Chapter 7A and Chapter 13 cases after initial case review until closure.

    • Forwards Chapter 9 and Chapter 15 Insolvency Interface Program (IIP) reports and Chapter 11 Status 22 reports to FI to work.

    • Completes mirroring of accounts.

    • Reinstates all installment agreements at case closure, when the case meets IA reinstatement criteria.

    • Sends complex issues to FI to work.

  4. Collection Policy. Collection Policy, Insolvency establishes and oversees policy for the entire Insolvency program. Collection Policy, Insolvency:

    • Owns IRM 5.9, IRM 5.17.8 - 5.17.11 and IRM 1.4.51.

    • Prepares Interim Guidance

    • Owns AIS and all associated subsystems (APOC, ENS, EPOC, ADS, and IIP).

    • Makes all policy decisions affecting Insolvency as an enterprise covering both the CIO and Field.

    • Reviews FI and CIO procedures, alerts, training materials and job aids.

    • Owns the BLARE information system and participates on the Bankruptcy Law Advisory Rules Engine (BLARE) rules committee.

    • Submits requests for systems updates.

    • Responds to suggestions made through Form 13380,I Suggest, SERP Feedback and the Employee Suggestion Program.

    • Interacts with other National Office analysts on issues that impact bankruptcy processing.

    • Clears IRM bankruptcy sections written for other programs, such as Field Collection and Examination.

    • Handles technical questions from FI and CIO.

    • Performs program reviews of FI and the CIO.

  5. SBSE Counsel Coordination. If an issue arises jeopardizing the government's best interests that cannot be resolved by Insolvency's contacting the debtor's attorney directly, Insolvency, depending on IRM criteria, may coordinate action(s) with Area Counsel, Department of Justice or other legal functions. (See IRM,Referrals-Representing IRS in Bankruptcy Court,IRM,Direct Referrals,IRM,Referrals to SAUSAs, and IRM,Referrals on Significant Bankruptcy Case Issues.)  (10-04-2013)
General Managerial Responsibilities

  1. IRM, Administrative Responsibilities, contains information about general managerial responsibilities. Place special emphasis on responsibilities shown in the following sections.  (08-11-2015)

  1. Group managers are responsible for oversight of certain administration functions for their employees including but not limited to:

    1. Maintenance of time and attendance records.

    2. Certifying overtime records.

    3. Approving scheduled and unscheduled leave.

    4. Controlling and approving travel.

    5. Maintaining safe working conditions.

    6. Holding group meetings.

    7. Keeping employees current on all applicable policies and procedures.

    Other Administrative tasks include, but are not limited to:

    • Ensuring group End of Month reports are completed correctly (verified, generated, and approved) by the due date.

    • Completing quarterly 1204 self certifications.

    • Oversight of supply procurement.

    • Maintaining EPF and Drop files for each employee.


      Managers may delegate certain duties to a secretary/ administrative assistant; however, they retain oversight responsibility for those tasks.

  2. Items managers must update individually with each employee annually include, but are not limited to:

    • F6774, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard

    • F11386, IRS Telework (Flexiplace) Agreement

    • F7995, Outside Employment or Business Activity Request

    • F10094, Employee Career Learning Plan

    • F6850-BU, Bargaining Unit Performance Appraisal and Recognition Election

  3. Resources:

    • IRM, Administrative Responsibilities

    • Document 12990, Records and Information Management Record Control Schedules

    • New Manager Orientation, http://hco.web.irs.gov/apps/leads/nmo.html

    • iManage, http://ss.ds.irsnet.gov/sites/MRC/Pages/COPsDefault.aspx  (08-11-2015)
Employee Performance File (EPF)

  1. Managers are responsible for establishing and maintaining an EPF for each of their employees.

  2. Managers are responsible for ensuring the effective use of the EPF by:

    1. Ensuring that the proper documents are included in each EPF.


      See IRM 6.430.2.3.5 Employee Performance File (EPF).

    2. Ensuring that filing and purging of performance related documents and records are in compliance with requirements.

    3. Keeping all performance records and documents secured.

    4. Forwarding EPF records of employees transferring to other Treasury Bureaus or to a different post of duty or manager within the Service.

  3. Form 6774, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard, is maintained in the EPF. Managers must update the form annually and ensure it is signed and dated. (See IRM, Retention Standard for the Fair and Equitable Treatment of Taxpayers.)

  4. Recordations are included in the EPF. A recordation is defined as a manager's written record evaluating an employee in a positive or negative manner. For BU employees, a recordation must be furnished to an employee within fifteen (15) workdays of the time the manager becomes aware, or should have been aware, of the event that it addresses. If it is not furnished within fifteen (15) workdays, it cannot become part of the EPF.

  5. Form 6850-BU, Bargaining Unit Performance Appraisal and Recognition Request, is maintained in the EPF. Electronic signatures may be used on Form 6850-BU, processed through HR Connect, however paper copies of the form must be maintained in the EPF.

  6. The EPF is maintained in addition to and separate from the Employee Drop File (EDF). The EPF is not the same as the Official Personnel File (OPF). See IRM, Official Personnel File (OPF).

  7. For additional information regarding the specific items to be placed in the EPF and the retention period, refer to:

    • Human Capital Office website at: http://hco.web.irs.gov/

    • IRS/NTEU 2012 National Agreement II, Article 12: http://hco.web.irs.gov/lrer/negotiations/natagree/index.html

    • IRM 6.430.2.3.5, Employee Performance File (EPF)

    • The assigned Labor Relations Specialist

    • HR Connect: https://www.hrconnect.treas.gov/psp/hrprod/?cmd=login  (08-11-2015)
Employee Drop File (EDF)

  1. In addition to the EPF, a second file should be established for each employee. This is referred to as the drop file. The Employee Drop File is for other documentation not related to performance.

  2. The drop file should contain anything that is not performance related, such as leave counseling and copies of disciplinary actions. Questions about the use of a drop file can be directed to the Labor Relations office.  (10-04-2013)
Medical Information

  1. Employee medical information must be maintained separately from the EPF and EDF.

  2. For more information, see IRM 6.630.1.5.4, Safeguarding Medical Information, and the HCO website: http://hco.web.irs.gov/.  (08-11-2015)
Protecting Taxpayer Rights

  1. A primary responsibility of managers is to monitor employee practices and actions to ensure that taxpayer rights are always observed.

  2. The Taxpayer Bill of Rights contains the ten basic taxpayer rights. (See Publication 1, Your Rights as a Taxpayer):

    1. The Right to Be Informed.

    2. The Right to Quality Service.

    3. The Right to Pay No More than the Correct Amount of Tax.

    4. The Right to Challenge the IRS’s Position and Be Heard.

    5. The Right to Appeal an IRS Decision in an Independent Forum.

    6. The Right to Finality.

    7. The Right to Privacy.

    8. The Right to Confidentiality.

    9. The Right to Retain Representation.

    10. The Right to a Fair and Just Tax System. 

  3. Section 1203 of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) calls for the termination of any employee of the Internal Revenue Service if there is a final administrative or judicial determination that the employee willfully committed any act or omission described below:

    1. Failing to obtain required approval signatures when making a seizure.

    2. Providing a sworn false statement in a "material matter " concerning a taxpayer.

    3. Violating the constitutional rights of or discriminating against taxpayers, taxpayer's representatives or employees.

    4. Falsifying or destroying documents to cover a mistake concerning a taxpayer.

    5. Receiving a criminal conviction or civil judgment for assault or battery on a taxpayer, taxpayer's representative or employee.

    6. Violating the Internal Revenue Code (IRC), IRS regulations or policies to retaliate against or harass taxpayers, taxpayer's representatives or employees.

    7. Willful misuse of IRC § 6103 to conceal information from Congressional inquiry.

    8. Failing to file a federal tax return on or before its due date, unless it is due to reasonable cause.

    9. Understating federal tax liability, unless it is due to reasonable cause.

    10. Threatening an audit for personal gain or benefit.

  4. There is an important distinction between evaluating performance under CJE 2, Taxpayer Rights, and evaluating compliance with the Retention Standard for the Fair and Equitable Treatment of Taxpayers. See the Human Capitol Office website http://hco.web.irs.gov/perfmgmt/evaluation/evalperf/nonmgrpolicy.html for more information.

  5. Resources:

    • Form 6774, Receipt of Critical Job Elements and Retention Standard

    • IRM 6.430.2.4.7, Rating Performance Against The Retention Standard for the Fair and Equitable Treatment of Taxpayers

    • IRM 6.430.2.2.5, Discussing The Retention Standard for the Fair and Equitable Treatment of Taxpayers

    • 1203 Issues: http://hco.web.irs.gov/lrer/conperf/1203issues/index.html

    • Retention Standard Resources: http://hco.web.irs.gov/perfmgmt/evaluation/evalperf/nonmgrpolicy.html

    • Office of Professional Responsibility website: http://nhq.no.irs.gov/OPR/

    • Publication 947, Practice Before the IRS and Power of Attorney

    • IRM 5.1.23, Taxpayer Representation

    • Taxpayer Bill of Rights: http://irweb.irs.gov/AboutIRS/tbor/default.aspx  (08-11-2015)
Direct Contact For Taxpayers With/or Requesting Representation

  1. Managers should ensure that their group is in conformance with IRC § 7521, Procedures Involving Taxpayer Interviews. It is also important to ensure that employees comply with guidelines about direct contact with taxpayers with representatives. Specifically, employees are required to:

    1. Stop the interview with a taxpayer (unless required by court order) whenever a taxpayer requests to consult with a representative (e.g., accountant, CPA, attorney or enrolled agent, who is permitted to represent taxpayers before the IRS).

    2. Obtain managerial approval to contact the taxpayer instead of the representative, if the representative is responsible for unreasonably delaying or hindering the completion of a collection action. See IRM, By-passing a Taxpayer's Representative.


    Per IRM, By-Passing a Taxpayer’s Representative, the IRS may work directly with a taxpayer to resolve an issue on the taxpayer's account if:
    1) The taxpayer initiates the contact to resolve the issue on the account,
    2) The taxpayer expresses a specific desire to resolve the issue without the involvement of the representative after the IRS employee has advised the taxpayer of the current representation, and
    3) The taxpayer's desire to have the IRS work directly with the taxpayer instead of the representative is properly documented in the case file.

  2. Examples of steps managers can take to ensure compliance by their employees are:

    • Group meetings

    • Case reviews

    • Workload reviews

    • Field visitations

    • Office visitations

    • Taxpayer/representative inquiries (if necessary)  (08-11-2015)
Recording Taxpayer Interviews

  1. A taxpayer or representative may request to use audio or video equipment to record an in-person interview. See IRM, Taxpayer Recording of Interviews, for information on responding to such requests. The right to make an audio recording does not extend to telephone interviews.  (08-11-2015)
Fair Tax Collection Practices

  1. Internal Revenue Code § 6304, Fair Tax Collection Practices, imposes certain restrictions with respect to tax collection. During a case review or upon receiving a complaint from a taxpayer, managers may identify a potential violation of those restrictions. Potential employee violations of IRC § 6304 must be reported to the assigned Labor Relations (LR) Specialist by the close of the next business day following notification of the alleged violation.

  2. To ensure collected data is complete and accurate, use the following IRC § 6304 issue codes when reporting the potential violation. Labor Relations uses these codes for tracking on the Automated Labor and Employee Relations Tracking System (ALERTS).

    • 141 - Contact with TP at Unusual Time/Place: Contacting a taxpayer before 8:00am or after 9:00pm, or at an unusual location or time, or location known or which should be known to be inconvenient to the taxpayer.

    • 142 - Contact TP without Rep: Contacting a taxpayer directly without the consent of the taxpayer’s Power of Attorney.

    • 143 - Contact at a TP Employer, Prohibited: Contacting a taxpayer at their place of employment when it is known or should be known that the taxpayer’s employer prohibits the taxpayer from receiving such communication.

    • 144 - Taxpayer Harassment: Any allegation of taxpayer harassment should be reviewed along with the Internal Revenue Code (IRC 6304) because the provision is intended to be applied in a general manner when evaluating the alleged employee misconduct. Conduct which is intended to harass a taxpayer, or conduct which uses or threatens to use violence or harm is an absolute violation of the IRC.

    • 145 - Taxpayer Abuse: Any allegation of taxpayer abuse should be reviewed along with the Internal Revenue Code (IRC 6304) because the provision is intended to be applied in a general manner when evaluating the alleged employee misconduct. The use of obscene or profane language towards a taxpayer is an absolute violation of the IRC.

    • 146 - Continuous Phone Harassment: Causing a taxpayer’s telephone to ring continuously with harassing intent.

    • 147 - Phone Call without ID Disclosure: Contacting a taxpayer by telephone without providing a meaningful disclosure of the IRS employee’s identity.

  3. If violations are confirmed, work with a LR Specialist to determine the next appropriate action.

  4. Resources:

    • IRM,Fair Tax Collection Practices

    • IRM,Retention Standard for the Fair and Equitable Treatment of Taxpayers

    • IRM 6.430.2.4.7,Rating Performance Against The Retention Standard for the Fair and Equitable Treatment of Taxpayers  (08-11-2015)
Ex Parte Communication With Appeals/Managerial Oversight

  1. An “ex parte communication” is a communication that takes place between any Appeals employee and employees of other IRS functions, without the taxpayer/representative being given an opportunity to participate in the communication. Rev. Proc. 2012-18,Ex Parte Communications Between Appeals and other Internal Revenue Service Employees, applies to communications that take place after May 15, 2012, and clarifies the rules regarding ex parte communications.

  2. Prior to approving Collection Due Process (CDP) cases for transmittal to Appeals, review Form 14461, Transmittal of the CDP/EH Hearing Request.

    • Ensure that narrative statements are limited to a neutral list of documents and neutral statements regarding actions taken and documented in the case history without any further discussion regarding the strengths and weaknesses of the taxpayer’s appeal.

    • Ensure that no prohibited ex parte communications are included before approving the transmittal of the case to Appeals.

  3. Managers must also ensure that no prohibited ex parte communications are included in Trust Fund Recovery Penalty (TFRP) case files or the AIS/ATFR case history before approving the transmittal of the case to Advisory.

  4. If a taxpayer submits a written appeal after a (non-TFRP) Penalty Abatement Request is denied, and Appeals consideration is necessary, employees will forward the appeal to their manager for review and concurrence. The manager ensures that the AIS history is attached to the appeal request and that no prohibited ex parte communications are included before approving the transmittal of the case to Appeals. If the case history contains commentary that is determined to violate the ex parte communication rules, take appropriate action, which could include sharing the information with the taxpayer, and affording the taxpayer a reasonable period of time within which to respond, or other remedy within the discretion of Appeals at the time it is sent to Appeals.

  5. If the appeal contains new information that requires additional investigation or ICS documentation, the caseworker must secure managerial concurrence of decision to sustain penalty abatement denial. If the caseworker is unable to make contact with the taxpayer within a reasonable time period, the caseworker will forward the case file to the GM and the GM will take the following actions:

    • Prepare a letter to the taxpayer that identifies the new information and a brief summary of the results of the additional investigation.

    • Document issuance of the letter to the taxpayer in the case history and attach a copy of the letter to the taxpayer appeal.

    • Ensure that the case history is attached to the appeal request and that no prohibited ex parte communications are included before approving the transmittal of the case to Appeals.

  6. Fast Track Mediation (FTM) can be used for TFRP protests as well as CDP and Equivalency Hearings (EH). The prohibition against ex parte communications between Appeals employees and originating function employees does not apply to FTM because the Appeals employees are not acting in their traditional Appeals settlement role. Ex parte communications, such as a private caucus between the Appeals mediator and Collection employees during the course of the mediation session, are permissible under the ex parte communication rules.

  7. Resources:

    • IRM, Communications with Appeals

    • IRM, Sending Hearing Request to Appeals

    • IRM, CDP and Equivalent Hearing Fast Track Mediation (FTM)

    • IRM, Opportunity to Participate

    • IRM, Penalty Denial and Appeals

    • IRM 5.7.6, Trust Fund Penalty Assessment Action  (08-11-2015)
IDRS Security

  1. Integrated Data Retrieval System (IDRS) security briefings are included in the mandatory Annual On-Line Briefings. IDRS security should also be reinforced through discussions at group/unit meetings.

  2. Employees should be reminded to complete Form 11377, Taxpayer Data Access, if an account is inadvertently accessed or otherwise applicable.

  3. IRM 10.8.34, IDRS Security Controls, requires managers to review periodic IDRS Security reports for their groups. In Insolvency, primary responsibility for those reviews rests with Collection Information Technology & Security (CITS). Managers may be contacted by a CITS representative if they are unable to resolve a potentially questionable access made by an employee.

  4. Generally, CITS will contact the manager via secure email. If contacted, the manager should take the following steps:

    • Take appropriate action to determine whether or not there was a business reason for the access. Actions may include conversations with the employee, review of case inventory, review of IDRS case controls, use of IDRS Online Reports Services (IORS) queries, review of audit trails, determining if access was by automated process, etc.

    • Provide feedback about their findings to CITS within five business days of their request

  5. Resources:

    • IRM 10.8.34, IDRS Security Controls

    • Form 11377, Taxpayer Data Access

    • UNAX Resources: http://irweb.irs.gov/AboutIRS/bu/pipds/pip/privacy/unax/default.aspx  (08-11-2015)
Employee Safety/Security

  1. Safety and security is a high priority. Managers must become familiar with their responsibilities to ensure workplace safety for everyone.

  2. See IRM 5.1.3, Safety, Security, and Control, for information about safety and security topics.

  3. Resources:

    • Document 12109, The IRS Supervisor's Guide to Conduct and Discipline and Related Topics

    • Employee Resource Center (ERC)

    • Safety and Health Information Management System (SHIMS) EClaims Processing Center  (08-11-2015)
Working With NTEU

  1. Group Managers who supervise bargaining unit (BU) employees must:

    1. Notify the requisite chapter(s) regarding 7114 meetings when they plan to discuss changes in personnel policies, practices and working conditions with their employees. Generally, five workdays notice is provided. See article 8 of the 2012 National Agreement II at: http://hco.web.irs.gov/lrer/negotiations/natagree/index.html

    2. Make sure employees have the opportunity to be represented at formal discussions regarding employee grievances. See IRM 6.771.1,Agency Grievance System (AGS), and IRS/NTEU 2012 National Agreement II, other personnel matters, and conduct issues.

  2. See Article 8 of the 2012 National Agreement II for more information about how to identify 7114 meetings. Contact a LR Specialist if assistance is needed to determine if a meeting is a 7114 meeting.

  3. Resources:

    • IRM, Agreements with NTEU, or contact the assigned Labor Relations Specialist.

    • IRM 6.771.1, Agency Grievance System (AGS)

    • 2012 National Agreement II with NTEU: http://hco.web.irs.gov/lrer/negotiations/natagree/index.html.  (10-04-2013)
Functional Security Reviews

  1. Insolvency managers (or their designated representative) will conduct annual security reviews per guidance in IRM, Functional Reviews. The review must be documented and a copy of the documentation provided to the next level of management. Insolvency managers may use a Form 12149, Functional Security Reviews for Managers, to document their review. If another form of documentation (such as a memo) is used, managers should ensure that it covers all items shown on Form 12149 and contains the printed name/title of reviewer, signature of reviewer and date of review.

  2. Managers should refer to IRM 10.4.1, Managers Security Handbook, for Servicewide guidance about their responsibilities.

  3. If a manager's reviews reflect that an employee repeatedly fails to observe security protocols, the manager should contact the LR specialist to determine the next appropriate action.  (08-11-2015)
Case Related

  1. Casework. Managers must ensure Insolvency case actions comply with the requirements of the Bankruptcy Code Compliance Program (BCCP) while protecting the government's interest and educating debtors on their payment and filing responsibilities.

  2. Stay Violations. Insolvency managers oversee resolutions of Bankruptcy Code stay violations ensuring corrective actions are initiated no later than two work days after identification by Insolvency caseworkers or notification from taxpayers, their representatives, other government agencies, or other IRS functions. IRM,Automatic Stay, gives an in depth discussion of the nature of stay violations.

  3. Discharge Violations. When violations of the discharge injunction are identified, Insolvency managers must ensure caseworkers initiate resolutions of the violations no later than two work days after identification or notification. If the IRS receives adequate notice of the bankruptcy discharge, violations may occur after Insolvency has adjusted an account through the Automated Discharge System (ADS) or has made a manual adjustment. Violations can also arise while Insolvency's adjustment requests are pending. IRM,Discharge Injunction, provides more information on this topic.

  4. Review of Closed Cases. Referrals from other IRS functions must be reviewed by Insolvency when a taxpayer facing collection claims a liability is no longer due because of a bankruptcy discharge. Insolvency must provide guidance concerning the dischargeability of periods to all other IRS functions.

  5. AIS Documentation. Insolvency managers must direct subordinates to document all actions related to IRS's involvement in a bankruptcy proceeding in the AIS history, also known as the "History Screen." Insolvency is the primary repository of bankruptcy-related case actions for all functions of the IRS. (See IRM,AIS Documentation.)

  6. Objections. Whenever possible Insolvency administratively resolves objections to IRS's actions in bankruptcy, usually involving proofs of claim, that otherwise would be handled by the US Attorney, Department of Justice, or Area Counsel. Case specific matters that cannot be resolved administratively, such as objections to plan confirmation or requests for conversion or dismissal, are referred to Area Counsel, the US Attorney, or the Department of Justice (DOJ).

  7. Damage Claims. Insolvency managers must process administrative damage claims pursuant to Treas. Reg. §§ 301.7433-2. (See IRM,Payment of Damages, below.)  (08-11-2015)
Payment of Damages

  1. Overview. The Commissioner of the IRS has authority to pay damages and attorney's fees from general appropriations in the settlement of the Service's liabilities on claims for violations of the automatic stay and discharge injunction. Awards are categorized as either:

    1. Litigative - an award in the form of a settlement or judgment resulting from a lawsuit; or

    2. Administrative - an award premised on an agency's claim authority.

    Payment requests are processed through the Financial Management Service (FMS), and the treatment of the two categories of awards differs slightly. (See paragraphs (17) and (18) below.)

  2. Processing Office. The processing office (FI or CIO) assigned to the case when the violation occurred will be responsible for processing claims for payment of damages up until a referral to Counsel is required. At that point the case becomes a complex issue and will be handled to conclusion by the assigned Field Insolvency office.

  3. Who May File a Claim. The debtor, debtor's representative, or trustee may file a claim with the Service. The Service will directly pay the damages and/or attorney's fees if certain criteria are met.

  4. Willfulness. The Service can only be held liable for damages and attorney's fees if it commits a "willful violation" of the stay or discharge injunction. "Willful" in this context means an act that was committed intentionally or knowingly. A willful violation occurs when the Service has received notice of a voluntary bankruptcy filing or of the court's granting of a discharge, and the Service does not respond timely to stop its collection activities.

  5. Identifying Willfulness. To determine if a willful violation has occurred, Insolvency must verify the Service received notice of the bankruptcy or discharge order and:

    • Subsequently engaged in collection activities, or

    • Failed to halt its collection activities.


    If the Service does not receive notice of the bankruptcy, action to collect may not be a violation of the automatic stay or the discharge injunction.

  6. Time frames. Generally for a claim to be considered, the Service must have failed to take appropriate action within the time frames of the Bankruptcy Code Compliance Program (BCCP). Those time frames are reflected in the chart below:

    Time Limits Required Actions
    Two work days Initiate corrective action on violations of the automatic stay or discharge injunction.
    Five work days Process initial bankruptcy petition information and ensure input of TC 520.
    10 work days Review damage claim applications for damages and attorney's fees for completeness and willfulness determination.
    30 calendar days Process discharge/dismissal notices and initiate closing procedures.
    60 calendar days Provide the debtor with a written response concerning the acceptance or denial of the claim application.
  7. Exceptions to Time frames. Regardless of general time frames, if an IRS employee initiates a collection action with knowledge of the stay or discharge, the action is a willful violation.


    If a debtor tells an employee he is in bankruptcy, and the employee proceeds with a seizure, the collection action is a willful violation.

  8. Claim Applications. Because no standard IRS form for requesting payment of a claim has been published, a claim request must be submitted by letter. Field Insolvency offices must provide a claimant the nature of the information to be included in the application letter. To be considered complete, a claim must be in writing and include the following:

    1. The name, taxpayer identification number, current address, and current home and work telephone numbers (with an identification of any convenient times to be contacted) of the taxpayer making the claim;

    2. The location of the bankruptcy court in which the underlying bankruptcy case was filed and the case number of the case in which the violation occurred;

    3. A description, in reasonable detail, of the violation (include copies of any available substantiating documentation or correspondence with the Internal Revenue Service);

    4. A description of the injuries incurred by the taxpayer filing the claim (include copies of any available substantiating documentation or evidence);

    5. The dollar amount of the claim, including any damages that have not yet been incurred but which are reasonably foreseeable (include copies of any available documentation or evidence); and

    6. The signature of the taxpayer or duly authorized representative.


    Administrative costs, as defined in Treas. Reg. § 301.7433-1(b)(2)(ii), including attorneys’ fees, are not recoverable as actual, direct economic damages, but these costs may be recoverable under IRC § 7430. See criteria in Treas. Reg. § 301.7430-8.


    Pro se debtors may not claim attorney's fees.

  9. Evaluating Claims. The Service evaluates all claim applications for damages and attorneys' fees arising from willful violations of the automatic stay (11 USC § 362) or the discharge injunction (11 USC § 524). Claims must be evaluated within ten work days from the date of the claim's receipt by the Service. Insolvency must review the claim to determine:

    1. The completeness of information provided;

    2. Evidence the Service's actions were willful; and

    3. Damages and attorneys' fees are reasonable and adequately substantiated. (Guidance from Counsel may be required.)

  10. Incomplete Claims. Incomplete claims must be returned to the claimant with a letter of explanation identifying the incomplete items. See Exhibit 1.4.51-2, Pattern Letter for Incomplete Claim for Damages and/or Attorney’s Fees.

  11. Non-Willful Violations. When Insolvency determines a willful violation of the automatic stay or discharge injunction did not occur, processing of the claim must halt. Insolvency must promptly forward its recommendation for rejection to Counsel.


    Claims for violations are generally rejected when the claimant has not established actual damages or attorney's fees.

  12. Delegated Authorities. Delegation Order 25-10 found in IRM, Delegation Order 25-10 (formerly DO-254), outlines approval authorities based on dollar amounts.

  13. Referral to Counsel. Any claim for more than $1,000 must be referred to Counsel for a legal opinion prior to its final disposition. A claim for any dollar amount that has been denied in part or in whole must be referred to Counsel for a legal opinion.

  14. Denied Claims. If payment of a claim is denied wholly or partially by Insolvency, the rejecting office must prepare a rejection recommendation stating the reasons for the rejection and refer the claim application to Counsel. If Counsel renders an opinion contrary to the rejection recommendation, only a Territory Manager or the CIO Program Manager has the authority to disregard the Counsel opinion.

  15. Written Notification. Upon receipt and evaluation of a complete application, Insolvency must send the claimant a written response within 60 calendar days of the receipt date stating the claim has been either rejected or accepted. See Exhibit 1.4.51-3, Pattern Letter for Approval of a Claim for Damages and/or Attorney’s Fees and Exhibit 1.4.51-4, Pattern Letter for Denial of a Claim for Damages and/or Attorney’s Fees for the applicable pattern letters.

  16. Civil Damages. If a taxpayer's administrative damage claim is disallowed by Insolvency, or six months pass without a decision by the IRS or Insolvency, the taxpayer may file a civil action for the damages as provided for in IRC § 7433. If the debtor is an individual, the debtor may also request damages for violations of the bankruptcy automatic stay, whether or not an administrative claim has been filed.

    1. The maximum damage award for reckless and intentional disregard of the code is $1 million.

    2. Negligent disregard carries a maximum award of $100,000.

  17. Payment of Administrative Claims. When the claim application for administrative damages and/or attorney's fees is approved in whole or in part, Insolvency must follow the procedures set forth in IRM, Reimbursement of Damages and Costs, with the exception of using the letters named in that citation. Pattern letters applying specifically to Insolvency must be substituted. (See paragraph 15 above.)

  18. Payment of Litigative Claims. Procedures in IRM,Reimbursement of Damages and Costs, should be followed when the claim application is for litigative damages and/or attorney's fees with the exception of the forms to be used. For litigative award funding FMS Forms 194, 196, and 197A should be used.

  19. Separate Payment Requests for Damages and Attorney's Fees. When both payment of damages and attorney's fees have been authorized, Insolvency must request funding separately. For example if FMS Forms 196 and 197 are used for the damages award, then FMS Forms 196 and 197 must be used for payment of attorney's fees.

  20. Documentation. The AIS history must include detailed information on all aspects of claims for damages and/or attorney's fees including:

    1. The date the claim was received by the IRS;

    2. A summary of the issues cited in the claim;

    3. The dollar amount being sought broken down by damages and attorney's fees;

    4. A listing of documentation received by from the claimant;

    5. Results of the review for claim application completeness;

    6. Dates of correspondence sent to the claimant along with a summary of the correspondence's content;

    7. Names of management officials involved in approving/denying the claims along with the dates of their involvement;

    8. Date referral sent to Counsel;

    9. A summary of Counsel's opinion(s);

    10. Delegated authority's final determination to approve or deny the claim;

    11. The dollar amount(s) to be paid broken down by damages and attorney's fees if claim approved;

    12. Date appropriate forms are prepared and forwarded to FMS for funding if claim approved;

    13. Date denial letter sent to claimant if claim denied;

    14. Date check mailed to claimant if direct deposit not requested;

    15. Claimant's response if received; and

    16. Any other information relevant to the claim application and review process.

    In addition, paper or electronic files of all forms and correspondence pertaining to the claim must be retained until the possibility of litigation expires. For partially or wholly denied claims, this is two years from the date of the violation.  (08-11-2015)
Employee Development/Training

  1. See IRM, Employee Development, for a full discussion of managerial responsibilities.

  2. Group Manager roles and responsibilities in the area of employee development and training include but are not limited to:

    1. Overseeing orientation of new employees

    2. Overseeing training for new employees (formal and on-the-job)

    3. Training and developing other employees including professional/technical and clerical staff

    4. Assisting and advising employees preparing a Career Learning Plan (CLP)

    5. Delegating acting managerial assignments

    6. Continuing education for employees to maintain and update knowledge and proficiency in technical areas

    7. Providing opportunities such as details to facilitate career development

    8. Ensuring employees have a working knowledge of tools to perform their duties, (e.g., AIS, ATFR, ALS, etc.).

  3. More information can be found at the Human Capital Office website: http://hco.web.irs.gov/

    • Servicewide Training and Briefing Programs

    • Policy and Procedural Guidance

    • Other related training resource sites, IRS Learning Center etc.

  4. For BU employees, also see the IRS/NTEU 2012 National Agreement II, http://hco.web.irs.gov/lrer/negotiations/natagree/index.html. (Articles 7, 12, 16, and 30) or contact a Human Resources Specialist.

  5. Resources:

    • IRM, Employee Development

    • Enterprise Learning Management System (ELMS): https://elms.web.irs.gov/

    • HCO website: http://hco.web.irs.gov/  (10-04-2013)
Performance Management

  1. The three balanced measures are: Employee Satisfaction, Customer Satisfaction and Business Results. These three balanced measures are part of every individual and organizational performance evaluation system within IRS.

  2. IRM 6.430.2, Performance Management Program for Evaluating Bargaining Unit and Non Bargaining Unit Employees Assigned to Critical Job Elements (CJEs), contains detailed guidance about evaluating performance. Refer to that IRM as well as the information following when evaluating performance.  (08-11-2015)
Performance Evaluations

  1. Preparing performance evaluations is one of a manager’s most important responsibilities. In carrying out this task, the manager will observe how the employees are performing their duties and responsibilities to ensure that they are working efficiently and effectively to accomplish assigned tasks.

  2. Because managers are responsible for implementing the policies and directives relative to performance evaluations, they should thoroughly familiarize themselves with all facets of performance appraisal/evaluation information including, but not limited to:

    1. Performance expectations

    2. Mid-year and periodic performance reviews

    3. Annual ratings

    4. Acceptable level of competence

    5. Unacceptable/ minimally successful performance

    6. Competitive promotion appraisals

    7. Employee performance folders (EPF)

    8. Performance and recognition awards.

  3. A formal performance evaluation serves:

    1. As a record of performance to support, recommend and initiate actions such as within-grade increases, promotions, award recommendations, reassignments, details and adverse actions such as demotion or separation.

    2. To provide an employee with a basis for additional training and development.

    3. As a tool to improve the performance of individual employees.

  4. For employees new to the government, the first year of employment is a probationary period during which the employee must demonstrate successful performance and the capability to be promoted to the next grade level (if applicable). See IRM 6.430.2.4.3, Employees Serving Probationary Periods.

  5. Work closely with employees who are performing poorly, including probationary employees. Provide them with guidance/direction designed to assist them in improving performance. If performance improves, document the improvement accordingly. If performance fails to improve, refer to IRM 6.430.2, Performance Management Program for Evaluating Bargaining Unit and Non Bargaining Unit Employees Assigned to Critical Job Elements (CJEs), and seek appropriate advice to determine next steps.

  6. Documentation of performance:

    1. Providing feedback to the employee (positive and constructive) is essential to maintaining and/or improving their performance.

    2. Keep an employee's overall performance in mind when discussing work and other activities. Let them know when some aspect of performance may influence their performance rating, a promotional opportunity or other personnel action.

    3. Recordation serves as a snapshot of employee performance. Adequate documentation will be a reminder of changes in performance over the rating period.


    Notify employees of decreased work performance per guidance in IRM 6.430.2.3.3, Acknowledging Decreased Work Performance.

  7. When writing review narratives be concise, but descriptive enough to provide an accurate picture of the strengths, developmental needs, and accomplishments of the employee in each CJE. (See IRM 6.430.2.4.6, Completing Appraisal Narratives.)

  8. Performance evaluations provide a uniform means for a written evaluation and rating of each employee's proficiency.

    • IRM 1.5,Managing Statistics in a Balanced Measurement System, describes how balanced measures are used to support individual as well as organizational performance. The three balanced measures are: Employee Satisfaction, Customer Satisfaction and Business Results. These three balanced measures are part of every individual and organizational performance evaluation system within IRS.

    • IRM 1.5.2,Uses of Section 1204 Statistics, provides specific guidance for SB/SE use of measures. This IRM provides information about the prohibition on the use of records of tax enforcement results (ROTERs) to evaluate employees or to impose or suggest production quotas or goals.

  9. Formal employee evaluations represent the sum of what managers have observed in each employee's work, using feedback, reviews, field visitations and other techniques discussed in this manual. Consider the following when evaluating performance for an annual appraisal:

    • Position description

    • Critical Job Elements (CJEs)

    • Mid-year and other progress reviews

    • Employee’s work products (management briefings, memos)

    • Employee’s self-assessment

    • Feedback from taxpayers and other customers

    • Team assignments and contributions to work group

    • Special Achievements

  10. Each employee will receive an annual performance evaluation. See information about Performance Appraisal Due Dates in the 2012 National Agreement II, Article 12, Exhibit 12-1.


    A sample Annual/Mid-year Review Schedule has been provided in Exhibit 1.4.51-5, Sample Annual/Mid-year Review Schedule. Managers can tailor this sample to the criteria for their group to ensure appraisals are completed timely.

  11. Employees may submit a self-assessment, limited to four (4) pages in length, no later than the last workday of his or her annual appraisal rating period. See IRM 6.430.2.4.5 ,Self-Assessments, and IRM 6.430.2.6(3), Conducting the Performance Appraisal Meeting.

  12. Use only the work requirements of the particular position or specific work standards established by the Service to make Acceptable Level of Competence Determinations (i.e. determination that employee is performing at a fully successful level.)

  13. For information on the suggested steps to make unacceptable performance determinations see Exhibit 1.4.51-1, Suggested Action Steps for Unacceptable Performance.

  14. Resources:

    • Human Capital Office website: http://hco.web.irs.gov. This website houses the CJE Resource Center, Manager Guide for Employee Performance Awards information, forms etc.

    • IRS/NTEU 2012 National Agreement II http://hco.web.irs.gov/lrer/negagree/ Articles 7,12,17,18 and 40

    • IRM 1.4.1, Management Roles and Responsibilities

    • IRM 6.430.2.3.3, Acknowledging Decreased Work Performance

    • IRM 6.432.1, Reduction in Grade and Removal Based on Unacceptable Performance

    • IRM 6.451, Employee Performance and Utilization

    • Other portions of IRM, Part 6, Human Resources Management

    • The assigned Labor Relations specialist  (08-11-2015)
Reviews (Overview)

  1. Providing ongoing employee feedback that is candid and meaningful is essential to employee satisfaction and is an integral part of the group manager’s responsibilities. Reviews of employee work should serve to:

    1. Assess the employee’s effectiveness in meeting the expectations established in their Critical Job Elements.

    2. Determine the employee’s efficiency in carrying out the laws, procedures, and policies of the Service.

    3. Identify and address performance problems.

    4. Evaluate the employee's ability to properly plan and schedule field, office, and Telework activity.

    5. Ensure the employee is taking timely and appropriate actions to bring the case to a prompt and proper resolution.

    6. Assess employee effectiveness in developmental case assignments.

    7. Determine the employee's effectiveness in meeting the IRS Retention Standard for the Fair and Equitable Treatment of Taxpayers.

    8. Ensure taxpayers’ rights are observed. See IRM above.

  2. All reviews relating to an employee's case work must be in writing. Managers must use EQRS to review individual cases, but other types of performance observation lend themselves to other methods. For reviews that consider employee activity across multiple cases (e.g., time utilization, office/field observation) a summary narrative, such as a memorandum, may be substituted.
    The EQRS Individual Feedback Report provides a record of ratings and the narrative comments in which the employee’s performance is summarized. Become familiar with IRM 5.13.6, Field Insolvency/Embedded Quality Attribute Definitions, and Document 12656, Field Insolvency Embedded Quality AIQ Collection Field Insolvency Job Aid, which provides specific guidance related to Embedded Quality attributes and how to use them.

  3. At the beginning of the fiscal year, group managers will develop a review schedule for the group that includes all mandatory reviews and optional reviews. Optional reviews may include additional office or field visitations, time and workload reviews, etc. The review schedule should provide for a fair and accurate assessment of the employee's overall performance throughout the rating period.

  4. Mandatory reviews represent the minimum review requirements that must be completed for each employee. It is intended that the minimum requirements will provide managers with an opportunity to spend more time reviewing and developing employees that need additional feedback and assistance.
    Mandatory reviews include:

    1. One or more annual field visitations or observation at a 341 hearing, whenever applicable and possible.

    2. One or more time utilization reviews with each employee.

    3. Mid-Year appraisals/reviews. The mid-year appraisal should occur at the midpoint (six-months) of the employee's appraisal period.

    4. Annual performance case reviews. See IRM, Requirements for Annual Performance Case Reviews.

  5. When necessary, based on case reviews, other forms of review, field or office observation, etc., managers have the authority to require their employees to obtain their approval before taking subsequent case actions.


    Employees who inappropriately extend deadlines or delay case actions can be required to obtain managerial approval of their extensions in the future so as not to delay timely case resolution.

  6. Group managers will continually review information gathering activities by their employees.

  7. For additional guidance on preparing reviews, narratives and appraisals see:

    • IRM, Evaluating Performance

    • IRM, Information Gathering Guidelines

    • IRM 6.430.2, Performance Management Program for Evaluating Bargaining Unit and Non Bargaining Unit Employees Assigned to Critical Job Elements (CJEs).


    Operational review aids for Territory Managers and the Area Director are presented in, Exhibit 1.4.51-45, Operational Review Plan Guide and Exhibit 1.4.51-46, Director Operational Aid.  (08-11-2015)
Case Reviews

  1. Choose a sufficient number of cases for review to ensure a thorough evaluation of each employee’s performance. Reviews should be tailored to individual needs. Scheduling of the analysis may be announced or unannounced at the option of local management.


    See IRM, Requirements for Annual Performance Case Reviews.

  2. Ensure case selection contains a mix of cases representative of the employees assigned inventory.

  3. Work submitted for approval or closure also provides an opportunity to evaluate individual performance as well as the overall quality of the group's product. When reviewing cases submitted for approval or closure, look for performance that reflects an employee's adherence to IRM standards as well as other established policies and procedures.


    Confine written reviews to work performed during the employees rating period.

  4. Use the Embedded Quality Review System (EQRS) for individual case reviews. The review items on the EQRS Individual Feedback Report correspond with the performance standards of an employee’s critical job elements. In general, deficiencies relating to a critical job element should be noted as an area of special concern if found in 25 percent or more of the cases reviewed. There may be instances where a single deficiency (e.g., expired statute) is critical. The attribute narrative should summarize the employee's performance for each individual case reviewed.

  5. Managers must also summarize the employee's overall performance on all cases reviewed, including the results of time utilization reviews, field/office visitations, etc., as part of the mid-year and/or annual performance assessment. Narrative feedback should address positive aspects, as well as areas for improvement, of an employee's performance. See Exhibit 1.4.51-6, Insolvency Group Managers' EQRS Review Documents, Form 6850, and Narrative, General Guide.

  6. As part of the case review, prepare the EQRS Individual Feedback Report in duplicate and include all applicable case data. Both the manager and the employee must sign it. Give the original Individual Feedback Report to the employee for action on case recommendations. Retain the duplicate in the EPF for follow-up. Discuss all recommended actions entered on the Individual Feedback Report with the employee to ensure that there is a complete understanding regarding the observations and direction.

  7. If managers have directed specific case actions, a follow-up review should be scheduled 60-90 days after the initial review to ensure their instructions are being followed and the case is moving toward resolution. The follow-up review will generally be limited to the cases in which a follow-up review has been scheduled unless there is need to see other cases to document a performance trend. Using EQRS, prepare a narrative conveying the results of the follow-up review.

  8. Written performance feedback (Individual Feedback Report, 6067, memorandum, etc.) must be provided to the employee within 15 work days. The 15 day time frame starts from the time the supervisor becomes aware of, or should have been aware of, the event addressed in the recordation/feedback item.

  9. Although managers may suggest or request specific actions in the case history, they should avoid making numerous case decisions for the employee. Documentation of an evaluative nature should not be entered in the case history.

  10. As part of any case review, determine if the assigned grade level is still accurate. See IRM, Case Assignment Guide.

  11. It is important to ensure that employees comply with guidelines about direct contact with taxpayers with representatives. During case reviews ensure that taxpayer rights have been observed, particularly with respect to direct contact provisions. See IRM, Written Communication to a Taxpayer's Representative, and IRM, By-Passing a Taxpayer's Representative.

  12. Resources:

    • Embedded Quality: http://mysbse.web.irs.gov/mgrsact/eq/default.aspx

    • CJE Resource Center: http://hco.web.irs.gov/apps/cje/

    • IRM 5.13.1, Embedded Quality Administrative Guidelines

    • IRM 6.430.2.4.9, Rating CJEs  (08-11-2015)
Requirements for Annual Performance Case Reviews

  1. For employees GS-09 and below and all employees rated less than fully successful, select a sufficient number of cases for review that meet the criteria in IRM, Case Reviews. Review at least half of the cases prior to the mid-year progress review.

  2. For employees GS-11 and above that are rated fully successful or higher, select a sufficient number of cases for review that meet the criteria in IRM, Case Reviews. Review at least half of the cases prior to the mid-year progress review.

  3. Review plans should be tailored to fit the needs of individual employees.

  4. Use EQRS attributes, case summary narratives and performance summaries for all reviews conducted during the rating period to create performance feedback. Feedback must indicate to the employee how they are meeting or not meeting the EQRS attributes and aspects of the critical job elements.

  5. Provide the employee with the narrative within 15 work days and place a copy of the document in the EPF.  (08-11-2015)
Field and Office Observations

  1. Observing the employee during face-to-face contacts, either at 341 hearings or office meetings, provides an excellent opportunity for the manager to assess an employee’s:

    1. Ability to conduct interviews.

    2. Ability to communicate and interact with taxpayers.

    3. Knowledge of policies and procedures, including observance of taxpayer’s rights listed in IRM above.

    4. Ability to deliver fair and courteous treatment to all taxpayers.

  2. Conduct one or more annual field visitations, 341 observations, or office observations with each employee, whenever applicable and possible.

  3. During observations, managers will evaluate the employee for:

    1. Ability to secure material information necessary to determine appropriate case direction.

    2. Delivery of fair and courteous treatment of taxpayers.

    3. Ability to address the various rights of the taxpayer (Pub. 1, Pub. 594, IRC 6320 and 6330, Collection Appeals Program).

    4. Ability to recognize and respond to taxpayer concerns, issues and interests.

    5. Pre-contact preparation including appropriate questions at the 341 hearing.

    6. Itinerary planning.

    7. Effective use of time.

    8. Ability to manage difficult, unexpected, complex or unusual circumstances.

    9. Ability to appropriately recognize and address "Third Party Contact" situations.

    10. Observation of proper Disclosure requirements.

  4. Provide feedback based on all observations using a summary narrative, such as a memorandum.

  5. Resources:

    • CJE Resource Center: http://hco.web.irs.gov/apps/cje/

    • IRM, Third Party Contacts

    • IRM 25.27.1, Third Party Contact Program


      IRM 5.1.17, Third Party Contacts, is obsolete. Refer to IRM 25.27.1, Third Party Contact Program, for general servicewide guidance on third party contacts. Refer to IRM, Third Party Contacts, for third party contact information specific to Collection casework.

    • IRM 6.430.2.2.1, Retention Standard for the Fair and Equitable Treatment of Taxpayers

    • IRM 11.3.1, Introduction to Disclosure  (08-11-2015)
Time Utilization Reviews

  1. Conduct one or more Time Utilization Review annually with each employee. Use the Time Utilization Review to measure the overall effectiveness of the employee's office, field, and/or Telework. Make observations regarding work quality as appropriate, but the purpose of this review is to evaluate employee performance in effective use of time and accuracy of documentation.

  2. Conduct the Time Utilization Review within fifteen (15) workdays of the day selected.

  3. Time Utilization Reviews should be unannounced. Document the review with a memorandum or Form 6067 to summarize the observations.


    • Evaluate whether time spent on case actions matches the time charged as well as the nature and complexity of what is required in each case.

    • Evaluate whether the case actions taken are likely to move the case toward resolution.

    • Identify unproductive/inefficient activity and make recommendations for improvement.

  4. Documents should be shared with the employee and maintained as part of the EPF to be used in preparation of the Mid-Year/Annual Appraisal.

  5. IRM 5.1.30, Resolution-directed Approach to Casework and IRM 5.1.31, Workload Management, may assist in formulating guidance during these reviews.  (08-11-2015)
Work Submitted for Approval/Closure

  1. When work is submitted for approval, managers have an opportunity to evaluate an employees' performance. This also enables the manager to prevent deficiencies. Check for accuracy and level of quality before approving reports of currently not collectible taxes, installment agreements, requests for adjustment, seizure documents, TFRP investigations and recommendations, fraud referrals, and any other document prior to submission to another function. The quality of the work that leaves a manager’s group is a reflection on the group manager.  (08-11-2015)
Use of Statistical Data/Section 1204/ROTERs

  1. Section 1204 of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) prohibits the use of Records of Tax Enforcement Results (ROTERs) to evaluate employees or to impose/suggest production quotas/goals for any employee.

  2. IRM 1.5.1, The IRS Balanced Performance Measurement System, provides guidance to prevent the use of statistics to:

    1. Evaluate employees, or

    2. Impose or suggest production quotas or goals with respect to such employees.

  3. ROTERs are data, statistics, compilations of information or other numerical or quantitative recordations of the tax enforcement results reached in one or more cases. Managers are prohibited from using records of tax enforcement results to evaluate any employee who exercises judgment with regard to determining tax liability or ability to pay. This prohibition includes:

    • Required or requested performance ratings (annual, mid-year, ad hoc)

    • Award recommendations

    • Assessment of an employee's qualifications for promotion, reassignment, or other change in duties;

    • Assessment of an employee's eligibility for incentives, allowances or bonuses;

    • Ranking for release/recall and reduction in force



    do not include tax enforcement results of individual cases when used to determine whether an employee exercised appropriate judgment in pursuing enforcement of the tax laws based upon a review of the employee’s work on that individual case.

  4. Managers are also prohibited from using ROTERs to impose or suggest production goals or quotas for employees or groups of employees. Examples of prohibited ROTERs include:

    • Number of Proofs of Claim filed

    • Number of delinquent returns secured

    • Number of delinquent returns secured with full payment

    • Number of seizures made

    • Number of levies issued

  5. Resources:

    • IRM 1.5.1, The IRS Balanced Performance Measurement System

    • IRM 1.5.2, Uses of Section 1204 Statistics

    • IRM, Section 1204 Quarterly Certification Requirements

    • Internal Controls/Sec 1204: http://cfo.fin.irs.gov/CPIC/CPIC_Home.htm

    • Section 1204: http://mysbse.web.irs.gov/supportingsbse/strategicplanning/sect1204/default.aspx  (08-11-2015)
Tax Enforcement Results (TER)s

  1. A TER is the outcome produced by an IRS employee's exercise of judgment in recommending or determining whether or how the IRS should pursue enforcement of tax laws.

  2. TERs may be discussed in employee reviews (but not employee evaluations) to determine if the employee exercised appropriate judgment, used time efficiently and applied the laws in one or more cases properly. See IRM Use of TERs.  (08-11-2015)
Regulation 801/ Quantity & Quality Measures

  1. Regulation 801 (9/1999 Rev 10/17/2005) implements the provisions of Section 1204 of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98), provides rules relating to the establishment of a balanced performance measurement system and sets forth rules governing the use of ROTERs.

  2. Quantity measures consist of outcome-neutral production and resource data that do not contain information regarding the tax enforcement result (TER) reached in any case involving particular taxpayers. Examples of quantity measures include, but are not limited to:

    • Cases started

    • Cases closed

    • Time per case

  3. Performance measures based in whole or in part on quantity measures will not be used to evaluate the performance of any non-supervisory employee who is responsible for exercising judgment with respect to tax enforcement results.

  4. The quality review of the handling of collection cases focuses on such factors as whether employees devoted an appropriate amount of time to a matter, properly analyzed the facts, complied with statutory, regulatory and IRS procedures, etc.

  5. Resources:

    • IRM, Quantity Measures

    • IRM, Quality Measures  (08-11-2015)
Retention Standard

  1. Regulation 801 provides that, in addition to all other criteria required to be used in the evaluation of employee performance, all employees of the IRS will be evaluated on whether they provided fair and equitable treatment to taxpayers.

  2. Form 6774, Receipt of Critical Job Elements and Fair and Equitable Treatment of Taxpayers Retention Standard, is maintained in the EPF.

  3. Resources:

    • IRM,Retention Standard for the Fair and Equitable Treatment of Taxpayers

    • IRM 6.430.2.4.7, Rating Performance Against The Retention Standard for the Fair and Equitable Treatment of Taxpayers

    • Retention Standard resources: http://hco.web.irs.gov/perfmgmt/evaluation/evalperf/nonmgrpolicy.html  (08-11-2015)
Within Grade Increase

  1. An employee shall be advanced in pay to the next higher step of their grade upon meeting the following requirements:

    1. Required waiting period completed;

    2. No equivalent increase in pay received during the required waiting period; and

    3. Fully successful performance in each of the critical job elements of their position.

  2. Use only the work requirements of the particular position or specific work standards established by the Service to make Acceptable Level of Competence Determinations (i.e. determination that employee is performing at a fully successful level.).


    See IRM 6.430.2.5.4, Within-Grade Increase (WGI) Determination.

  3. For information on steps to follow when an employee is not meeting an acceptable level of competence, Exhibit 1.4.51-7, Action Steps for Acceptable Level of Competence Determination if an Employee Within Grade Increase (WGI) is Due.  (10-04-2013)
Evaluation Due Dates

  1. Each employee will receive an annual performance evaluation. The due date of an evaluation for any particular employee is based upon the last digit of the employee’s Social Security Number (SSN). Refer to the 2012 National Agreement II, Article 12, Exhibit 12-1 at: http://hco.web.irs.gov/lrer/negotiations/natagree/index.html.  (08-11-2015)
Discipline/Disciplinary Actions

  1. Discipline is defined as measures taken by management that are intended to correct employee misconduct, and encourage employee conduct in compliance with the standards of conduct, policies, goals, work procedures, and office practices of the IRS and the Federal Service. Employees must adhere to all known conditions and standards of conduct established to provide for the orderly and efficient administration of the Internal Revenue Service.

  2. Employees who fail to comply with standards of conduct, work procedures and office practices will be subject to disciplinary action designed to correct the violation and motivate the employee to become a productive member of the Internal Revenue Service.

  3. Managers are responsible for establishing and maintaining effective discipline within their work group. Managers must explain the work requirements and other standards employees are expected to meet.

  4. When disciplinary action is required, it must be fair, equitable, impartial and as timely as possible.

  5. A guide to assist managers in determining appropriate penalties to correct improper conduct can be found in IRM Exhibit 6.751.1-1, Internal Revenue Service Guide to Penalty Determinations.

  6. Ensure to discuss and coordinate all proposed disciplinary actions with a Labor Relations Specialist.

  7. Resources:

    • IRM 6.751, Discipline and Disciplinary Actions

    • IRM 6.752, Disciplinary Suspensions and Adverse Actions

    • Document 12109, The IRS Supervisors Guide to Conduct and Discipline and Related Topics

    • The IRS/NTEU 2012 National Agreement II, Articles 38 and 39 http://hco.web.irs.gov/lrer/negotiations/natagree/index.html  (10-04-2013)

  1. Telework (formerly known as Flexiplace) is a program that permits employees to work at home or at other approved locations other than the assigned post of duty.

  2. There are three (3) forms of Telework:

    1. Frequent

    2. Recurring

    3. Ad Hoc

  3. See Article 50, Section 1B of the 2012 National Agreement II for more information about the types of Telework.  (08-11-2015)
Managing Telework

  1. Managing an employee participating in Telework is essentially no different than managing an employee in the office. Managers should ensure that their actions are in compliance with the 2012 National Agreement II. The employee on Telework is still held accountable for the Rules of Conduct, Critical Job Elements, Time and Attendance, Ethics, and all other regulations applicable to their position.


    Per Article 50, Section 1F of the 2012 National Agreement II: Telework is not a replacement for dependent/family care.

  2. Managers should ensure that employees are responsive to all customers. Employees must check voice mail (VMS) and email (when accessible) to ensure external as well as internal customers (including managers) receive responses timely. It is appropriate for an employee to check their VMS and email prior to going to lunch and some time prior to ending their day. Employees supplied with pagers and cell phones should be expected to be more responsive.

  3. Managers have the right to direct a Telework employee to report to the office when necessary. For example, when having meetings, which include group meetings, case reviews, training, etc. This should be planned so that the employee has ample time to report to the office during their regular commute time. When an employee plans or decides to make field calls during a Telework day the manager should be informed. This is referenced under Section 5A-2 of the 2012 National Agreement II.

  4. Article 50 of the 2012 National Agreement II addresses Telework issues. Sections pertinent to the management of employees in a Telework environment are listed below:

    1. A supervisor’s official relationship with, authority over, and accountability for an employee participating in the Service’s Telework Program (Frequent or Recurring/Ad Hoc basis) is no different than his or her relationship with, authority over, and accountability for employees who are not participating in said program. In this regard, the supervisor retains the authority to review, determine, and approve participation in this program. (Article 50/Section 1A-5).

    2. Employees may work more than 80 hours each month if they have elected to participate in Frequent Telework. Employees approved for a Frequent Telework arrangement will be provided equipment consistent with Article 50/Section 7A.

    3. Employees approved for a Recurring Telework arrangement may work at the approved telework site for 80 hours or less per month (Article 50/Section 1B).

    4. Employees may participate in an "Ad Hoc" Telework Program. This allows the employee on a case-by case or daily basis to work at a Telework location, subject to approval by their supervisor. (Article 50/Section 2F-1).

    5. Participants may be permitted to work at home or other Telework work sites full days or a portion of a day.


      Unless as otherwise provided by Article 50 Section 1C of the 2012 National Agreement II: there is no limitation on how the work schedule may be configured as long as the scheduling is not disruptive to the work that remains in the office or cause an unreasonable burden on those who choose not to work a Telework arrangement.

    6. Management has the right to meet with employees to give assignments and to review work as necessary at either the official duty station, approved Telework location, or a mutually agreed upon site. (Article 50/Section 4C.) This does not mean that 24 hour notification or union presence is required, but 24 hour notification is suggested.

    7. Employees must provide the supervisor and/or clerk in advance with all the specific information regarding their work schedule, type of work to be performed and location of the alternate work place. This includes the obligation to inform the supervisor when they are unable to perform work due to illness or other circumstances during the Telework TOD and requesting appropriate leave. (Article 50/Section 5A-1.)

    8. Employees must call the office to report time, to retrieve messages, and to notify the supervisor and/or clerk of changes in work locations. (Article 50/Section 5A.)

    9. In order to ensure accountability, a participating employee and his/her supervisor must communicate at least one time during each pay period to verify the employee’s time and attendance. (Article 50/Section 6F.)

  5. If it is determined that an employee's work appears to be degrading from "Fully Successful" or is below a "Fully Successful" rating, managers should review Article 50 Section 2 of the 2012 National Agreement II to determine whether the employee's continuation on Telework is appropriate. This occurs when any Critical Job Element (CJE) rating equals "2" or below.


    When considering removing an employee from Telework, ensure that the reasons for removal are well documented. This documentation may include but is not limited to EQRS Individual and/or Cumulative Feedback Reports, Form 6850 or memoranda. Managers must ensure that the employee is aware of the situation and should then monitor the employees work product closely and develop a plan for improving that employee’s work, just as would be done for an employee not on Telework. There is no prohibition per the 2012 National Agreement II on any type of performance review following a period in which an employee has worked at their Telework site. Reviews may include "Time Utilization" , "Time and Activity" , or other performance based review. Ensure this also conforms with any applicable local Area agreement as well. The types and amount of time expended on Telework should be comparable to time in the office. For example, there should not be increased amounts of administrative or miscellaneous time, or increased time charged to cases with minimal actions taken.

  6. Resources:

    • IRM 6.800.2, Telework (Flexiplace) Program

    • Document 12524, IRS Telework (Telework) Program, Managers' Desk Guide http://core.publish.no.irs.gov/docs/pdf/50988c10.pdf

    • IRS Telework Program website: http://hco.web.irs.gov/telework/  (08-11-2015)
Interaction With Employees On Telework

  1. A manager’s official relationship with, authority over, and accountability for an employee participating in the Service's Telework Program is no different than that for employees who are not participating in the program.

  2. Manager responsibilities include:

    1. Meeting with employees at least once a year for the purpose of discussing, reviewing and updating the Telework Agreement.

    2. Directing Telework employees to report to the office due to special circumstances.

    3. Meeting with employees to give assignments and review their work as necessary at the official duty station, approved work site that includes their home, or mutually agreed upon site.

    4. Inspecting the employee's work site when appropriate. Managers may visit the Telework site, with twenty four (24) hours notice, to ensure that Information Systems (IS) and sensitive information procedures are in place.


      Work site inspections are not expected to be routinely conducted. Inspect as necessary to verify IS/sensitive information procedures are in place.

    5. As with all employees, be proactive in identifying opportunities to rate CJE 1, Workplace Interaction/Involvement/Environment.

  3. For an employee to remain on the Telework program, they must:

    1. Remain "Fully Successful" or above.

    2. Not be subject to a conduct investigation in which management has sufficient evidence of serious wrongdoing that would impact the integrity and efficiency of the Service.

    3. Continue to stay in compliance with Article 50, Section 2 of the 2012 National Agreement II.

    If any of the above circumstances do not apply, the employee may be suspended from Telework pending resolution of the performance and/or conduct investigation situations.
    For further information, contact the assigned Labor Relations Specialist. Refer to IRS/NTEU 2012 National Agreement II, Article 50. Coordinate proposed changes to Telework arrangements with a LR specialist.  (08-11-2015)
Recognition and Awards

  1. Awards are opportunities for group managers to recognize and reinforce positive performance and behavior.

  2. Managers are responsible for maintaining a working knowledge of the awards process.

  3. Complete information regarding awards can be found on the Human Capital website at: http://hco.web.irs.gov/perfmgmt/awards/index.html

  4. Resources:

    • IRM 6.451.1, Policies, Authorities, Categories and Approvals

    • IRM, Recognition and Awards

    • IRS/NTEU 2012 National Agreement II, Article 18, http://hco.web.irs.gov/lrer/negotiations/natagree/index.html

    • The Human Resources Specialist

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