1.33.4 Financial Operating Guidelines

Manual Transmittal

December 16, 2014


(1) This transmits revised IRM 1.33.4, Strategic Planning, Budgeting and Performance Management Process, Financial Operating Guidelines.

Material Changes

(1) IRM, IFS Version Descriptions: revised to reflect the current budget versions in IFS and the elimination of Budget Version 1.

(2) IRM, Cash (Monetary) Awards and Time-Off Awards: revised to include sequestration updates.

(3) IRM, Treasury Franchise Fund: replaced the Working Capital Fund.

(4) IRM, Internal Order Codes: updated to reflect new requirements.

(5) IRM, Tracking Event-Related Spending: added new section.

(6) IRM, Training Programs: revised to include approval and tracking requirements.

(7) IRM, Food and Refreshments: updated to include guidance for tracking event-related spending.

(8) IRM, Business Systems Modernization (BSM): updated to reflect reporting requirements.

(9) IRM, Earned Income Tax Credit Procedures: revised to reflect current practices.

(10) Eliminated references to the Tuition Assistance Program, which has been terminated.

(11) Deleted references to funds reservations, which are no longer in use.

(12) Replaced references to GovTrip with Electronic Travel System.

(13) Deleted references to cost elements, which are no longer used. The cost element has been replaced by General Ledger Account.

(14) Eliminated Responsibility for Legacy Obligations of Mission Assurance and Security Services, because these accounts are now closed.

(15) Eliminated Competitive Sourcing, which is no longer relevant.

(16) Changed references to the support function Modernization and Information Technology Services (MITS) to Information Technology (IT); changed references to budget activity code (BAC) 99 to BAC 98; changed references to Internal Financial Management (IFM) to Financial Management (FM), and modified references to cash awards to read cash (monetary) awards.

(17) Included numerous editorial changes and website reference updates throughout. Updated Division Finance Officer (DFO) and Financial Plan Manager (FPM) titles, Selected Glossary, and Acronyms.

Effect on Other Documents

This IRM supersedes IRM 1.33.4, Financial Operating Guidelines, dated May 16, 2011.


The IRS budget community in all divisions and functions, especially the Division Finance Officers (DFOs), Financial Plan Managers (FPMs), and their staff.

Effective Date


Robin L. Canady,
Chief Financial Officer

Overview of the Financial Operating Guidelines

  1. The Financial Operating Guidelines (FOG) assist Financial Plan Managers (FPM) and other budget and finance professionals in fulfilling their responsibilities to effectively manage budgetary resources.

  2. The FOG is published by the Chief Financial Officer’s (CFO) Corporate Budget (CB) Unit. Comments and change requests may be submitted to the Director, Systems and Analysis Office, CB.

  3. The IRM is not specific to a fiscal year (FY) and is in effect until superseded. These guidelines take precedence over any previous financial operating instructions.

  4. In the event of a Continuing Resolution (CR), specific CR operating guidance will be posted on the CB website. Where different and while in effect, CR guidance takes precedence over this IRM. After Congress passes the appropriations act or a substitute omnibus appropriation bill, the IRM takes precedence but may need revisions based on new or revised provisions in the enacted appropriations language.

  5. Future revisions, including interim guidance during the year, will be posted to the CB website.


  1. This IRM, the Financial Operating Guidelines, provides internal guidance for the budget execution phase of the budget cycle to assist Financial Plan Managers in fulfilling their responsibilities to effectively manage budgetary resources.

  2. This guidance provides funds control regulations, as required by Office of Management and Budget (OMB) Circular A-11, Preparation, Submission and Execution of the Budget, Part 4, Section 150, Administrative control of funds.

  3. This guidance focuses on managing, monitoring, and controlling the money Congress appropriates to the IRS, including user fees. In compliance with the Antideficiency Act and applicable provisions of appropriations law, the IRS cannot spend or obligate more than Congress has appropriated and may use funds only for purposes specified in law. Additionally, the Antideficiency Act prohibits the IRS from spending or obligating funds in advance of an appropriation, unless specific authority to do so has been provided in law. Each FPM shall comply with the Antideficiency Act and appropriations law.

  4. This guidance is issued by the Chief Financial Officer, Corporate Budget.


  1. Government Accountability Office’s (GAO) Principles of Federal Appropriations Law (aka Red Book).

  2. Office of Management and Budget (OMB) Circular A-11, Preparation, Submission and Execution of the Budget.

  3. Chief Financial Officers Act of 1990, Pub. L. No. 101-576.

  4. Antideficiency Act, Pub. L. No. 97-258, 96 Stat. 923.

  5. Congressional Budget and Impoundment Control Act of 1974, Pub. L. No. 93-344, 88 Stat. 297.

  6. Economy Act, 31 USC §1535, §§1551-1555.

  7. Miscellaneous Receipts Act, 31 USC §3302.

Related Resource

  1. Office of Management and Budget Circular A-11, Preparation, Submission and Execution of the Budget.

  2. Government Accountability Office's Principles of Federal Appropriations Law (aka Red Book).

  3. Office of Personnel Management's Guide to Processing Personnel Actions.

  4. Appropriation language, found on Congress.gov. Click on "Legislation" to select current-year bills and laws for the Financial Services Appropriation or a Continuing Resolution.

  5. The current IRS Financial Management Codes Handbook, found on the CB website.

  6. Chief Financial Officer website.


  1. In this IRM, the terms below have the following meanings:

    1. Accrued expenditure - An accounting transaction to record the receipt of goods or services without the issuance of cash, check, or Electronic Funds Transfer (EFT) at the end of an accounting period (e.g., the amount of unpaid payroll at the end of each month).

    2. Apportionment - A distribution made by OMB of amounts available for obligation in an appropriation or fund account into amounts available for specified time periods, programs, activities, projects, objects, or any combinations of these. The apportioned amount limits the obligations that may be incurred. An apportionment may be further subdivided by an agency into allotments, sub-allotments, and allocations.

    3. Appropriation - A provision of law (not necessarily in an appropriations act) authorizing the expenditure of funds for a given purpose. Usually, but not always, an appropriation provides budget authority. In IFS, an appropriation is represented by the "Application of Funds" code.

    4. Bona fide needs rule - The principle that appropriations made for a definite period of time may be used only for expenses properly incurred during that time. Title 31 USC §1502(a) (the bona fide needs statute) provides: "The balance of an appropriation or fund limited for obligation to a definite period is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability and obligated consistent with section 1501 of this title. However, the appropriation or fund is not available for expenditure for a period beyond the period otherwise authorized by law."

    5. Budget - The budget of the United States Government, which sets forth the government’s comprehensive financial plan and indicates the government’s priorities for federal spending.

    6. Budget authority - The authority provided by law to incur financial obligations that will result in outlays. Specific forms of budget authority include appropriations, borrowing authority, contract authority, and spending authority from offsetting collections.

    7. Closed appropriation - An appropriation for which, having passed the last expired year, the balances canceled and remitted to Treasury.

    8. Commitment - An administrative reservation of funds prior to obligation of funds. Typically, commitments are created by a purchase requisition.

    9. Commitment Item - A subdivision of expense used to classify the organization's consumption of resources. The first two digits of the four-digit code represent the higher-level object class.

    10. Contract authority - Authority to incur obligations in advance of an appropriation, offsetting collections, or receipts to make outlays to liquidate the obligations. Typically, Congress provides contract authority in an authorizing statute to allow an agency to incur obligations in anticipation of the collection of receipts or offsetting collections that will be used to liquidate the obligations.

    11. Cost Center - A data element in IFS used to represent a clearly-defined location where costs incur and to represent the lowest level in the organizational hierarchy, below fund center. Cost center captures costs only, not revenue. Cost centers are usually linked to Treasury Integrated Management Information System (TIMIS) codes but can also be established for non-labor-related areas.

    12. Direct support - Support costs that can be reasonably identified and charged to a specific activity.

    13. Disbursement - An outlay; the issuance of cash, checks, or an electronic funds transfer (EFT).

    14. Division Finance Officer - The person, often an executive, who has been delegated by their division commissioner or chief with the ultimate responsibility for the funds control of their financial plan, as well as managing their plan through all phases of the budget cycle. See also, Financial Plan Manager.

    15. Expenditure - A receipt of goods or services, usually accompanied by the issuance of cash, checks, or electronic funds transfer to liquidate a valid obligation.

    16. Expired appropriation - An appropriation for which the period of availability established by law has passed, and for which new obligations may NOT be incurred. Balances are available only for upward and downward adjustments to existing or unrecorded obligations during the five years following expiration of obligation authority for annual and multiyear funds.

    17. Financial Plan Manager - The person who is responsible for day-to-day operations of monitoring and controlling a financial plan’s funds in the execution phase of the budget cycle. See also, Division Finance Officer.

    18. Fiscal Year - The Federal Government’s accounting period. It begins on October 1, ends on September 30, and is designated by the calendar year in which it ends.

    19. Full-Time Equivalent (FTE) - The basic measure of the levels of employment used in the budget. It is the total number of regular, straight-time hours (i.e., not including overtime or holiday hours) worked by employees divided by the number of compensable hours applicable to each fiscal year. Annual leave, sick leave, compensatory time off, and other approved leave categories are considered hours worked for purposes of defining full-time equivalent employment.

    20. Functional Area - A data element in IFS that represents an activity, such as Submission Processing.

    21. Fund - A source of financing for Federal agencies. Types of funds are revolving funds, custodial funds, and direct or reimbursable appropriations. In IFS, the fund field indicates the appropriation.

    22. Fund Center - A data element in IFS used to subdivide budget expenses into organizational structures. Fund centers represent areas of responsibility within an organization responsible for funds management. They are organized into a hierarchy.

    23. Funds commitment - Funds that are reserved in the IFS Funds Management module; for example, entering a purchase request creates a commitment; entering a requisition creates an obligation.

    24. Indirect support - Support costs that cannot be reasonably identified and charged to a specific activity and will be charged to the predominantly benefiting functional area.

    25. Integrated Financial System (IFS) - The administrative accounting system used by the IRS. IFS is composed of four modules: Budget Control System (BCS), Materials Management (MM), Financial Accounting (FIA), and Controlling (CO). Key features of IFS include integrated modules covering many business functions, real-time data entry, online information, drill-down capability, enhanced reporting capability, and simplified research.

    26. Internal Order Code (IOC) - A data element in IFS that collects expenditure data for specific projects. Internal Order Codes are used to monitor costs and, in some instances, revenues of internal jobs and/or tasks.

    27. Material Group Code - A data element in IFS used to group materials and services according to their characteristics. The material group code points to the Federal Supply Code and General Ledger Account.

    28. Object Class (OC) - Classification of expense according to type as prescribed by OMB Circular A-11, Preparation, Submission and Execution of the Budget; such as personal services, travel, and equipment. This is traditionally a two-digit code (for example, OCs 11 and 25); however, the OMB OC is now a more detailed three-digit code (for example, OCs 11.1, 11.3, 25.1, 25.2). See also, Commitment Item.

    29. Obligated Balance - The cumulative amount of budget authority that has been obligated but not yet outlaid. It is also known as unpaid obligations (which are made up of accounts payable and undelivered orders), net of accounts receivable, and unfilled customer orders.

    30. Obligation - A binding agreement that will result in outlays, immediately or in the future. Budgetary resources must be available before obligations can legally be incurred.

    31. Operational Support Contracts - Contracts that support IRS operations that are not assigned to another specific project code. Operational support contracts and similar Interagency Agreements (IAA) are tracked by "K contracts." These operational support contracts and IAAs cover a wide spectrum of procurement mechanisms including, but not limited to, simple and large purchases for services and supplies (SS) and equipment; formal contracts for services and supplies and specialized equipment; IAAs between the IRS and other Federal/state/local governmental agencies; and other non-labor expenditures.

    32. Order Points - Offices represented by their Order Point Number (OPN) in the Order and Subscription Management System (OSMS). Books, IRMs, and National Distribution Center (NDC) products are shipped to specified order points through the Internal Management Documents Distribution System (IMDDS). For more information, see the Order and Subscription Management System.

    33. Outlay - A payment to liquidate an obligation (other than the repayment of debt principal).

    34. Reimbursable Obligation - An obligation financed by offsetting collections credited to an expenditure account in payment for goods and services provided by that account.

    35. Reprogram - To shift allocated funds within an appropriation or fund account to use them for different purposes than those contemplated at the time of appropriation (for example, obligating budgetary resources for a different object class from the one originally planned). While a transfer of funds involves shifting funds from one account (appropriation or fund) to another, reprogramming involves shifting funds within an account. See A Glossary of Terms Used in the Federal Budget Process.

    36. Rescission - A legislative action that permanently cancels new budget authority or the availability of unobligated balances of budget authority prior to the time the authority would otherwise have expired.

    37. Sequestration - A fiscal policy procedure, originally provided for in the Gramm-Rudman-Hollings Deficit Reduction Act of 1985, that is an effort to reform Congressional voting procedures to make the size of the Federal Government's budget deficit a matter of conscious choice rather than simply the arithmetical outcome of a decentralized appropriations process in which no one ever looked at the cumulative results until it was too late to change them. If the dozen or so appropriation bills passed separately by Congress provide for total government spending in excess of the limits Congress earlier laid down for itself in the annual Budget Resolution, and if Congress cannot agree on ways to cut back the total (or does not pass a new, higher Budget Resolution), then an "automatic" form of spending cutback takes place. This automatic spending cut is called "sequestration."

    38. Top Node – A budget address in IFS at the highest level of a code hierarchy. For example, "IRS Top Node" means a budget address as follows: Fund Center = IRS, Commitment Item = ALLOBJ, and Functional Area = ALFA.

    39. Training - As defined under the Government Employees Training Act, training must meet all of the following requirements: (a) the announced purpose of the training is educational or instructional; (b) more than half of the time is scheduled for an organized exchange of information between presenters and audience; (c) the content of the conference is relevant to improving individual/organizational performance, and (d) developmental benefits will be derived by attendance.

    40. Transfer - To move budgetary resources from one appropriation account to another.

    41. Treasury Franchise Fund (TFF) - An intradepartmental service operations fund operated by the Department of Treasury. The TFF provides goods and services such as telecommunications, printing and reproduction, and equipment. Treasury bureaus make an advance payment prior to the receipt of goods, services, or other assets.

    42. Unliquidated Commitment - An administrative reservation of funds that has not yet become an obligation or otherwise been decommitted.

    43. Unliquidated Obligation - An obligation that has not been expended.

    44. Unobligated Balance - The cumulative amount of budget authority that is not obligated and that remains available for obligation under the law.

    45. User Fees - Fees charged to users of goods or services provided by the government.


  1. A select list of acronyms are referenced for budget execution. To search a comprehensive list of IRS acronyms, see SPDER’s Reference Net Acronym Database.

    3YRF 3-Year Rolling Forecast
    ACFO Associate Chief Financial Officer
    AUC Aging of Unliquidated Commitments
    AUO Aging of Unliquidated Obligations
    AVC Availability Control
    BAC Budget Activity Code
    BFC Beckley Finance Center
    BSM Business Systems Modernization
    BPS Business Planning and Simulation
    BU Business Unit
    CB Corporate Budget (OS:CFO:CB)
    CFO Chief Financial Officer
    COR Contracting Officer's Representative
    CR Continuing Resolution
    CTO Chief Technology Officer
    DFO Division Finance Officer
    EITC Earned Income Tax Credit
    ELMS Enterprise Learning Management Systems
    FOG IRM 1.33.4, Financial Operating Guidelines
    FM Financial Management (OS:CFO:FM)
    FPM Financial Plan Manager
    FTE Full Time Equivalent
    FY Fiscal Year
    GAO Government Accountability Office
    GLS General Legal Services
    GSA General Services Administration
    HCO Human Capital Office
    IAA Interagency Agreement
    IOC Internal Order Code
    IFS Integrated Financial System
    IPAC Intragovernmental Payment and Collection
    IPS Integrated Procurement System
    IS Information Services
    IT Information Technology
    NBU Non-Bargaining Unit
    OMB Office of Management & Budget
    OPM Office of Personnel Management
    RA Reimbursable Agreement
    ROG IRM 1.33.3, Reimbursable Operating Guidelines
    RWA Reimbursable Work Authorization
    SETR Single Entry Time Reporting
    SF Standard Form
    SOI Statistics of Income
    SWA Security Work Authorization
    TAPS Totally Automated Personnel System
    TIMIS Treasury Integrated Management Information System
    TFF Treasury Franchise Fund


  1. This section provides responsibilities for:

    1. Funds Control Responsibility

    2. Individual Responsibility

    1. Associate CFO Corporate Budget

    2. Division Commissioners or Chiefs

    3. Division Finance Officers

    4. Financial Plan Managers

    5. Other individuals as needed

Funds Control Responsibility

  1. The Antideficiency Act provides administrative and criminal penalties for overspending. See OMB Circular A-11, Part 4, Section 145,Requirements for Reporting Antideficiency Act Violations.

Individual Responsibility

  1. The Associate CFO (ACFO) CB formally bears the legal responsibility to ensure that the IRS as a whole does not violate the Antideficiency Act. To meet the IRS collective funds management responsibilities, the ACFO CB relies on the Division Finance Officers (DFOs) for compliance with the law and these guidelines.

  2. The ACFO CB delegates funds control responsibilities to the division commissioners or chiefs for the funds in their financial plans.

    1. A financial plan is a subdivision of funds made by the IRS to high-level funds centers in the Integrated Financial System (IFS); each business unit (BU) may manage one or more financial plans. See the "Fin Plans" table in the current Financial Management Codes Handbook found on the CB website.

  3. The DFO bears the ultimate responsibility for the funds control of their financial plan, as well as managing their plan through all phases of the budget cycle. See Exhibit 1.33.4-1, Division Finance Officers and Financial Plan Managers.

  4. The Financial Plan Manager (FPM) is responsible for day-to-day operations of monitoring and controlling a financial plan's funds in the execution phase of the budget cycle. See Exhibit 1.33.4-1, Division Finance Officers and Financial Plan Managers.

  5. Funds control and document approval authority may be delegated to individuals within the organization as needed; for example, the Integrated Procurement System (IPS) identifies FPMs as those with delegated authority to approve documents that commit and obligate funds.


  1. Financial Plan Managers must follow these budgetary policies, which encompass both internally and externally imposed guidance.

Applicable Guidance

  1. 31 USC Chapters 13, 15, and 33 govern the budget execution process. Among these, the major laws are the Antideficiency Act, 31 USC §1341, the Impoundment Control Act, 2 USC §§601-688, the Economy Act, 31 USC §1535, the provisions that govern the closing of accounts, 31 USC §§1551-1555, and the Miscellaneous Receipts Act, 31 USC §3302.

  2. OMB Circular A-11, Preparation, Submission and Execution of the Budget, provides an overview of the budget process; discusses the basic laws regulating the budget process; defines the basic terms and concepts associated with the budget process; provides guidance on how to prepare and submit budget-related materials required for OMB's review; and provides instructions on budget execution, funds control, and periodic reporting.

  3. GAO's Principles of Federal Appropriations Law (aka GAO's Redbook), is a comprehensive collection of the body of law governing the expenditure of federal funds.

  4. Congress.gov tracks appropriation language. Click on "Legislation" to select current-year bills and laws for the Financial Services Appropriation or a Continuing Resolution.

  5. All FPMs and other budget and finance professionals must refer to and use these key regulations to manage, track, and report budgetary activities. Such individuals must have a working knowledge of the contents of OMB Circular A-11, Preparation, Submission and Execution of the Budget, (especially Part 4, Instructions on Budget Execution), the appropriations language, and this IRM.

Overview of Critical Funds Control Concepts
  1. Appropriations law, including the Antideficiency Act, OMB Circular A-11, Preparation, Submission and Execution of the Budget, the GAO Redbook, and other applicable guidance, provides a great deal of detail on funds control concepts. Financial Plan Managers must know appropriations law concepts and often research specific details. A short overview of the most important concepts follows. The bulk of this section is copied directly from the GAO Redbook, which has a wealth of information about specific purchases and circumstances. GAO's Comptroller General (Comp. Gen.) decisions are referenced in several places to provide fuller explanations of concepts.

  2. Whether appropriated funds are legally available for obligation depends on three things:

    1. The purpose of the obligation or expenditure must be authorized.

    2. The obligation must occur within the time limits applicable to the appropriation.

    3. The obligation and expenditure must be within the amount Congress has established.

  3. In addition, no amount can be obligated before OMB apportions the appropriated funds.

Purpose: the Necessary Expense Doctrine
  1. The necessary expense doctrine is described in GAO’s Legal Decision 6 Comp. Gen. 619, "... Where an appropriation is made for a particular object, by implication it confers authority to incur expenses which are necessary or proper or incident to the proper execution of the object, unless there is another appropriation which makes more specific provision for such expenditures, or unless they are prohibited by law, or unless it is manifestly evident from various precedent appropriation acts...."


    Since we have a specific appropriation for Business Systems Modernization (BSM), we must charge BSM expenses to that appropriation, not a more general appropriation.

  2. An appropriation for a specific object is available for that object to the exclusion of a more general appropriation, which might otherwise be considered available for the same object. The exhaustion of the specific appropriation does not authorize charging any excess payment to the more general appropriation unless there is something in the general appropriation to make it available in addition to the specific appropriation.


    We cannot charge BSM expenses to Operations Support, even if there are no BSM funds available.

  3. Where two appropriations are available for the same purpose, the bureau may select which one to charge for the expenditure in question. Once that selection has been made, the bureau must continue to use the same appropriation for that purpose unless the bureau, at the beginning of the following fiscal year, informs the Congress of its intent to change it.


    If we had some discretion to charge a new expense for printing taxpayer education materials to either Taxpayer Services or Operations Support, and we decide to charge it to Operations Support, we must continue to charge it to Operations Support (the "pick and stick" rule).

  4. When applying the necessary expense rule, an expenditure is justified after meeting a three-part test:

    1. The expenditure must bear a logical relationship to the appropriation to be charged. In other words, it must make a direct contribution to carrying out either a specific appropriation or an authorized agency function for which more general appropriations are available.

    2. The expenditure must not be prohibited by law.

    3. The expenditure must not be otherwise provided for; that is, it must not be an item that falls within the scope of some other appropriation or statutory funding scheme.

Time: the Bona Fide Needs Doctrine
  1. The "bona fide needs" rule is set forth in 31 USC §1502(a): "The balance of an appropriation or fund limited for obligation to a definite period is available only for payment of expenses properly incurred during the period of availability or to complete contracts properly made within that period of availability and obligated consistent with section 1501 of this title. However, the appropriation or fund is not available for expenditure for a period beyond the period otherwise authorized by law." In other words, current-year funds are used for current-year needs.

  2. GAO, in its A Glossary of Terms Used in the Federal Budget Process, defines an obligation as "A definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received.... An agency incurs an obligation, for example, when it places an order, signs a contract, awards a grant, purchases a service, or takes other actions that require the government to make payments to the public or from one government account to another. The standards for the proper reporting of obligations are found in 31 USC §1501(a)." See OMB Circular A-11.


    The petitioner's attorneys made a joint motion to award attorney fees on September 5, 2006 (FY 2006). The tax court awarded over one million dollars in attorney's fees and expenses on October 4, 2006 (FY 2007). As a general rule, an agency must pay a claim from the appropriation available for the fiscal year in which the amount of the claim was determined and allowed. In this case, the IRS had no obligation to pay the one million dollars until the tax court issued its order. Because the Court issued its final determination on October 4, 2006, the IRS had to use its FY 2007 appropriation.

  3. Agencies may not purchase services or merchandise before appropriations are enacted and accounts are apportioned

  4. Appropriated funds should not be used to purchase anything unnecessary merely in order to use excess funds in a fiscal year at year-end.

  5. Year-End: Generally, current fiscal year funds may not be used for training that will occur in the next fiscal year. On an exception basis, current fiscal year funds may be used for training during the next fiscal year only if the following three conditions are met:

    1. The training meets a bona fide need of the current fiscal year.

    2. The scheduling of the course(s) must be beyond the agency's control.

    3. The time between procurement and performance must not be excessive. Please see comments related to GAO’s Decision B-321296. If a course normally is available from one or more vendors several times a year, it would be difficult to support that the scheduling was beyond the agency's control. For a complete explanation, see GAO’s 70 Comp. Gen. 296.

  6. Expired appropriations: No new obligations may be made against expired appropriations, even if there was a need for that item during that period. The expired appropriation remains available for five years only to pay obligations incurred prior to the account's expiration or to adjust obligations that were previously unrecorded or under-recorded. As provided in 31 USC §1552(a): "the account shall retain its fiscal-year identity and remain available for recording, adjusting, and liquidating obligations properly chargeable to that account." See IRM, Expired, Closed, and No-Year Appropriations.


    In FY 2008, we had to ratify payment of rental fees on a post office box, expenses incurred each year since FY 2003, but not previously obligated. This was an actual, unrecorded obligation to the government. The fees for the five years FY 2003 to FY 2007 had to be charged to each of the five expired appropriations for those years.


    Many administrative obligations (such as utilities or travel) are recorded based on estimated costs. When a bill comes in after a fiscal year has ended for more than the estimate, these obligation "adjustments" must be made from expired unobligated balances from the year the estimate was recorded.


    For a contract with a continuing need, a modification affecting cost within the scope of the contract may be chargeable to an expired appropriation, depending on the specifics, but a modification for an increased quantity must be charged to a new appropriation.

  7. Replacement Contracts: Where it becomes necessary to terminate a contract because of the contractor's default or where the contracting agency determines that a contract award was improper, the funds obligated under the original contract are available, beyond their original period of obligational availability, for the purpose of engaging another contractor to complete the unfinished work. Four conditions must exist to invoke this authority:

    1. A bona fide need must continue to exist.

    2. The replacement contract must not exceed the scope of the original contract.

    3. The replacement contract must be awarded within a "reasonable time" after termination of the original contract.

    4. The original contract had to be made in good faith.

  8. Multiyear Contracts: A multiyear contract is a contract that covers the needs of more than one fiscal year. This is not to be confused with a contract for needs of the current year, even though performance may extend over several years. For example, a contract to construct a ship that will take three years to complete is not a multiyear contract, but a contract to construct one ship a year for three years is. Appropriations law allows agencies to enter multiyear contracts only if it has available no-year funds or multiyear funds covering the entire term of the contract, or if the agency has specific statutory authority to do so.

  9. It is impossible to describe in this IRM every circumstance that may occur. Different types of purchases may follow rules that are not necessarily intuitive, and examples can be easily misinterpreted. So these examples are offered with a strong caution to research specific cases well. When in doubt, call your CB contact, who in turn may ask General Legal Services (GLS) for help interpreting the law on a case-by-case basis.

  1. The total of all purchases or contracts that agencies enter into cannot exceed the appropriation for the year or the amount apportioned by OMB, whichever is lower.

  2. Agencies may not pay bills when there are no available funds.

Legislative Policies

  1. IRS appropriated funds are provided through appropriation laws. The laws may be one of the annual appropriations (for annual or multiyear appropriations), an omnibus appropriation, a supplemental appropriation, a Continuing Resolution, or permanent law (i.e., mandatory appropriations and revolving funds). These laws often contain specific provisions regarding the execution of IRS and other government programs. All internal policies and procedures must reflect Congress’s direction given in these laws.

Appropriation Transfers
  1. By law, no agency may transfer resources between appropriations except under specific legal provisions and with Congressional approval. It is unlawful to obligate or expend more than the appropriated amount (or the apportioned amount if lower). The administrative provisions of IRS appropriations language allow the IRS very limited authority to transfer funds between appropriations, with prior approval of the Department of the Treasury (Treasury), OMB, and Congress. This authority must be carefully controlled by CB. All requests for interappropriation transfers must be justified to and approved in advance by CB. See IRM, Appropriation Transfer Procedures.

  2. When possible, CB will broker realignments between accounts through corporate reserves, fund 0290.

Reprogramming Guidelines
  1. Congress and the administration restrict reprogramming to exert control over the budget.

Budget Activity Limitations
  1. Congress specifically limits the reprogramming of funds that augment or reduce funding of existing programs, projects, or activities. Currently, the limit is the lower of five million dollars or 10 percent. The House and Senate Committees on Appropriations must approve in advance any reprogramming in excess of the limits included in the appropriation language, which restricts reprogramming at the Budget Activity Code (BAC) level. In addition, prior approval is needed to create a new program or to eliminate an existing one through the reprogramming of funds.

  2. Any reprogramming between BACs requires advance approval from CB.

    Note: See IRM, Information Services (IS), BAC 98 Reprogramming Authority (internal reprogramming policies).

Financial Plan Manager Responsibilities for Reprogramming Limitations
  1. Financial Plan Managers may reprogram between functional areas within an appropriation only to the extent they do not change the BAC levels. See IRM, Budget Activity Limitations. The relationship between functional areas and BACs is identified in the "BACs" table of the current Financial Management Codes Handbook found on the CB website.

Internal Budget Execution Policies

  1. In addition to adhering to legislative policies, all reprogramming actions must be justified.

  2. Key points to consider:

    1. Reprogramming actions must support the financial plan's Strategy and Program Plan.

    2. Reprogramming justifications must be delineated by function/activity.

    3. Actions taken in the current year – such as hiring or position management decisions – must be consistent with budgeted resources and the objectives of the next fiscal year, as well as long-term strategic objectives.

    4. All nondiscretionary costs must be fully funded before additional funds can be expended on discretionary costs.

Managing within Resource Availability
  1. Financial Plan Managers need to work within their resource availability to achieve program plans. The Business Performance Review (BPR) process focuses on IRS efforts to deliver programs and manage resources. After activity levels are set, funding changes should be an exception in program management. Any needs above the plan should first be resolved within the financial plan or through efforts to secure available funds from other organizations (with the caveat that realignments must not exceed appropriation or BAC limitations). If no resolution can be found, submit a request to CB with a full justification. If FPMs identify surplus funding within their financial plans, they should immediately notify CB and return those surplus funds.

  2. Corporate Budget monitors financial plans on a monthly basis and through a more comprehensive midyear review. Financial Plan Managers are required to identify any surpluses or out-of-cycle requests to CB at midyear. Corporate Budget will pull identified surpluses into corporate reserves to support approved corporate unfunded priorities through year-end.

  3. Business unit hiring actions are permitted as long as they have adequate labor resources and Full-Time Equivalents (FTE) in the current fiscal year, are consistent with hiring guidelines, and the hiring will not impact their budget for the following year as defined by the President’s Budget (excluding initiatives). Note, however, that exigent circumstances may require additional constraints on hiring; in those cases, any criteria or requirements put in place by directive of the Commissioner or the Commissioner’s designee(s) will supplement, and possibly supersede, the hiring protocols contained in this IRM.

Financial Reviews
  1. Ensuring optimal and efficient use of IRS resources is a high priority. This IRM reinforces the need to minimize the amount of year-end obligations (i.e., after August 31), while maximizing obligations in support of business priorities. Business units participate in several financial reviews throughout the year, as needed, including the following formal reviews to ensure the optimal use of IRS resources.

Labor Reviews
  1. Corporate Budget conducts labor reviews using the IFS Three-Year Rolling Forecast (3YRF). Specifics are included in the current 3YRF Labor Analysis Guidelines, found on the Business Warehouse & Business Planning/Simulation website. See IRM, Labor Projections.

Budget Execution Activity Reports
  1. Corporate Budget prepares a Servicewide Budget Execution Activity Report monthly for senior management, with individual reports for each financial plan. Execution reports are used to analyze and report Servicewide spending patterns, realignment of resources, potential surpluses, and early identification of unfunded needs or resource shortfalls. These reports also support midyear reviews.

Midyear/Spend Plan Review
  1. After the close of the second quarter, CB conducts a midyear/spend plan review with each BU to assess the financial position of the organization for internal and external stakeholders. This review:

    1. Evaluates the status of spending to ensure timely obligation of funds, per CFO and procurement guidance.

    2. Identifies potential unfunded needs and surpluses.

    3. Identifies potential base shortfalls that can be corrected in the multiyear planning process.

    4. Promotes timely posting of reimbursables.

    5. Provides necessary information for the Treasury midyear review, conducted within all Treasury bureaus.

    6. Finalizes the spend plans.

  2. Business units are required to meet commitment and obligation targets established jointly by the CFO and Procurement.

  3. In addition, BUs should meet the following targets for total obligations (labor and non-labor):

    1. 100 percent of procurement actions committed by July 31.

    2. 92 percent of budget obligated by August 31.

    3. 99.7 percent of budget obligated by September 30. Total obligations mean obligations, expenditures, and disbursements (OED). The ratios are calculated as a percent of the operating budget level (IFS Budget Version 0).


      These targets support the overall goal of using resources wisely. Do not use the targets as a reason to buy anything unnecessarily. See IRM, Time: the Bona Fide Needs Doctrine. If you cannot meet the targets, you might have excess budget that could be returned to CB and used toward corporate needs


  4. Specific guidance is issued by CB and is posted on the CB website at the beginning of the midyear review process.

Aging of Unliquidated Commitments and Aging of Unliquidated Obligations Reviews
  1. The quarterly Aging of Unliquidated Commitments (AUC) and Aging of Unliquidated Obligations (AUO) reviews provide critical analyses of the spend plan, facilitate the management of the procurement process, and maximize use of funds. See IRM, Unliquidated Commitments/Obligations.

  2. The CFO FM Unit provides Fiscal Year-End Processing guidance for these reviews.

Financial Plan Manager Authority
  1. Financial Plan Managers have the authority to implement reprogramming only in their assigned financial plans and are accountable for strict adherence to the limitations set forth above in IRM, Legislative Policies.

  2. Financial Plan Managers may limit or delegate their reprogramming authority for offices within their financial plans. In doing so, the FPM retains responsibility for ensuring that limitations contained in these operating guidelines are not violated, and at all times must be able to explain all reprogramming changes made in their financial plan. The individuals designated as FPMs are identified by position title in Exhibit 1.33.4-1, Division Finance Officers and Financial Plan Managers.

  3. Financial Plan Managers may delegate to others outside their BU the authority to make entries to their financial plan, as necessary to accomplish realignments between financial plans in IFS. All realignments between financial plans must be initiated by the sending FPM. See procedures in IRM, Realignments between Financial Plans.

  4. At times, CB makes entries to other financial plans. These occasions will be limited and CB will notify FPMs when their involvement is necessary.

Segregation of Duties
  1. Segregation of duties separates roles and responsibilities to ensure that an individual cannot process a transaction from initiation through reporting without the involvement of others, thereby reducing the risk of fraud or error. Examples of situations requiring segregation of duties:

    1. Receiving checks and posting them in a financial system.

    2. Making purchases with the purchase card, authorizing purchases and payments, and certifying funding.

    3. Entering a requisition, creating the obligation, and then processing the invoice and paying the vendor.

  2. Financial Plan Managers should establish, develop, and monitor controls via segregation of duties to ensure that conflicting activities are not assigned to the same individual and are appropriately segregated.

Managing the Integrated Financial System (IFS)
  1. Financial Plan Managers are required to routinely monitor their IFS budget data and ensure the data is correct.

Integrated Financial System (IFS) Version Descriptions
  1. Below are the current IFS budget and FTE Versions:

    1. Budget Version 0 – the current budget; sets availability controls. Controls are by fund, fund center, functional area, and commitment item. IRS Availability Control (AVC) levels may vary depending on the BU. Use IFS transaction FMAVCR02 to view the AVC controls for your BU.

    2. Budget Version 999 – the current plan for FTE staffing resources; associated with Budget Version 0. This FTE budget has detail by fund, fund center, functional area, and activity type.

    3. Budget Version 20 – the budget extracted for Business Planning and Simulation (BPS) Plan Development for the budget load. The version cannot be realigned. It is strictly used during the budget load.

    4. Budget Version CR – the funding provided by the continuing resolution.

    5. Budget Version ENACT – the enacted budget. Corporate Budget populates this version after the budget is passed. This version represents the budget levels allocated for IRS appropriations and budget activities. Only Congressionally-approved budgetary changes or reprogramming requests are entered in Budget Version ENACT. Budget Version ENACT is used for reporting purposes and is compared to Budget Version 0 to identify changes.

    6. Budget Version OPER – the Operating Plan; i.e., how we will deliver the enacted budget. Corporate Budget populates Budget Version OPER.

    7. Budget Version 85 – the FTE associated with Budget Version OPER, the official operating plan. Corporate Budget populates Budget Version 85.

Elimination of Budget Deficits in Version 0
  1. Integrated Financial System Availability Controls (AVC) help prevent the IRS from going antideficient for non-labor expenses. At a minimum, AVC is established to control budget by fund, fund center (financial plan level), commitment item (object class), and functional area. However, some BUs establish controls at an even lower level. Therefore, if there is insufficient budget at those levels, the system will reject the obligation. Availability controls are not configured to prevent labor postings. Labor expenses (object classes 11, 12, and 13) are the only expenses that can force the IRS into an antideficient status. This is most likely to occur in September in plans with significant reimbursable projects where the earnings have not been realized yet. Since budget can become deficient as a result of posting payroll, FPMs must research their budget deficits bi-weekly and correct them no later than one week after payroll posts. The FMAVCR02 report (Display Overall Values of Control Objects) in IFS will quickly identify budget deficits associated with labor. Subsequently, realignments must be processed to resolve the deficits. IFS transaction FMBB must be used to process the realignments. Further, FPMs must do everything possible to post reimbursable earnings timely throughout the year and especially at year-end. See IRM 1.33.3, Reimbursable Operating Guidelines.

Elimination of Negative Disbursements
  1. Financial Plan Managers must eliminate a negative disbursement created by transferring disbursements in excess of what was disbursed in an accounting string. However, they do not need to eliminate a negative disbursement created by credits posting to current-year funds from charges, since they are legitimate credits. Plan managers must correct negative disbursements in active appropriations that extend beyond the current year through multi- or no-year authority, cancelling appropriations, and expiring reimbursable appropriations.

Prohibition of "Top Node" Distributions
  1. When establishing new budget authority, CB pushes thebudget down through the IFS "top node" data elements; that is, commitment item ALLOBJ and functional area ALFA. However, FPMs may not post funds to the top node, because charges in ALLOBJ/ALFA create problems for financial reporting, cost allocations, and reprogramming limitation reports. All funds must possess a valid commitment item and functional area. Any funds remaining at the ALLOBJ/ALFA level should be pushed down accordingly.

Keeping Full Time Equivalents (FTEs) Aligned With Labor
  1. Budget Version 999 must be maintained so that FTEs and labor dollars stay in proper relationship at all times. See IRM, FTE Utilization Policies.

Financial Codes
  1. The validity and accuracy of IRS financial reports depends on the correct use of financial codes. Financial Plan Managers, all staff in budget organizations, and all parties responsible for assigning financial codes to documents must be familiar with the codes and definitions in the current Financial Management Codes Handbook found on the CB website.

  2. Internal Order Codes (IOC) are set up to track project-specific information. See IRM, Internal Order Codes. When necessary, the CFO will issue guidance or procedures for using specific Internal Order Codes for Servicewide activities or projects that need to be tracked. Such guidance will be posted on the CFO website or the CB website.

  3. Procedures for establishing new financial codes, referred to as IFS Master Data, are provided in Exhibit 1.33.4-2, Master Data (Code) Change Request Procedure.

Reorganizations and Other Modifications Affecting Budget
  1. Financial Plan Managers are required to notify CB of any reorganization as soon as senior management approves the initial reorganization proposal. Congress directs CB to include in its annual Operating Plan the details on any planned reorganizations, job reductions, or increases to offices or activities within the agency, and modifications to any service or enforcement activity. Reorganizations are any significant planned staffing increases or decreases, establishment of new offices or functions, or elimination of any offices or programs. Please include:

    • Any budget dollars crossing appropriations, regardless of the amount involved

    • Transfers of dollars and/or FTE between business units

    • Staffing reductions of more than 20 FTE between business units

  2. Corporate Budget personnel will maintain the appropriate level of confidentiality regarding possible reorganizations, as requested by the FPM.

  3. To request new or revised financial codes, see Exhibit 1.33.4-2, Master Data (Code) Change Request Procedure.

  4. For more guidance on reorganizations, see IRM 1.1.4, Organizational Planning.

Labor Costs Reprogramming
  1. Financial Plan Managers may reprogram funds from labor in order to maintain maximum resource flexibility, consistent with accountability for results.

  2. Fiscal accountability demands that FPMs balance labor and support so that FTEs are fully-costed and strategic plans are realized. For more information on managing FTEs see IRM, FTE Utilization Policies, and on hiring see IRM, Personnel Issues.

Information Services, Budget Activity Code (BAC) 98 Reprogramming Authority
  1. All information technology resources reside in the Information Technology (IT) Financial Plan. Information Services (IS) is no longer a separate appropriation; it is a budget activity and must follow BAC reprogramming guidance. In addition, all requests for reprogramming affecting BAC 98, IS, must follow the IT Reprogramming Policy. Contact the IT Office of Financial Management Services for more information.

  2. For all IT execution information, see IRM 2.21.1, Requisition Processing for IT Acquisition Products and Services.

Operating Procedures

  1. Financial Plan Managers must adhere to the following budgetary procedures, which provide more detailed guidance for budget execution.

Chief Financial Officer Servicewide Procedures

  1. CFO Servicewide Procedures are developed and imposed by the CFO, as a result of high-level direction from a number of sources, including OMB, the Commissioner, and others.

Corporate Budget Responsibilities
  1. Even though many budget execution activities are decentralized, CB continues to have Servicewide fiduciary responsibility.

  2. Corporate Budget monitors BUs’ budget execution activities to identify potential issues before they become corporate ones.

  3. Corporate Budget reports to the CFO each month on the status of BAC ceilings and floors at the Servicewide level.

  4. Corporate Budget periodically reviews reprogramming out of labor to verify the impact on current- or out-year resource levels. Corporate Budget will work with the FPMs to ensure reallocations make sound business sense.

  5. Corporate Budget is responsible for the Centralized Payments Plan 1111, the Undistributed Funds Plan 0290, prior-year funds, and IRS appropriation levels.

  6. On a regular basis, CB updates the CFO on hiring/attrition trends and projected labor needs in each account.

  1. Corporate Budget has primary responsibility for overseeing budget execution policy.

  2. Within CB, an assigned Execution analyst is the primary point of contact for each Business Unit, for any questions or requests regarding budget execution or the FOG. Communications from Corporate Budget to the Financial Plan Managers should go through the assigned Execution Business Unit Analyst.

  3. For financial code change requests, the Financial Plan Manager should send the request directly to Corporate Budget’s Master Data Team, with a copy to the assigned Execution analyst. Procedures for Master Data changes are provided in Exhibit 1.33.4-2, Master Data (Code) Change Request Procedure.

  4. For any budget formulation questions or requests, the Financial Plan Manager should go directly to the assigned Formulation Business Unit Analyst.

Preparation of a Servicewide Operating Plan
  1. The House Appropriations Committee directs the IRS to submit an operating plan after enactment of the new fiscal year appropriation. The number of days after enactment is detailed in the appropriations language. For example, the FY 2013 enacted language requires submission of the operating plan to Congress within 30 days of enactment of the FY 2013 appropriation.

  2. Corporate Budget prepares a table that crosswalks the budget request to the enacted level of funding and the current operating plan. The format is similar to the Explanation of Proposed Fiscal Year Budget Operating Level chart in the Congressional Budget Justification.

  3. Financial Plan Managers for the operating plan must distribute funds by OMB Object Class, functional area, and commitment item as they would be executed.

  4. Financial Plan Managers develop narrative to provide program, project, and activity information for each appropriation. The narrative must:

    1. Describe the major goals to be achieved with the funding provided and how funds for each BAC are to be used

    2. Discuss the impact of Congressional changes to the President’s Budget Request.

    3. Identify anticipated reprogramming actions of enacted funds.

    4. Provide information on major procurements and capital investments.

  5. Corporate Budget compiles and submits the crosswalk table and narrative referenced above.

  1. An apportionment is an OMB-approved plan to use budgetary resources. It typically limits the obligations that may be incurred for specified time periods, programs, activities, projects, objects, or any combination thereof. It may also place limitations on the use of other resources, such as FTEs or property. An apportionment is legally binding, and obligations and expenditures (disbursements) that exceed an apportionment are a violation of, and are subject to reporting under, the Antideficiency Act. See OMB Circular A-11, Preparation, Submission and Execution of the Budget, Part 4, Section 120, Apportionment.

  2. Initial apportionments are due to OMB for a new fiscal year generally by the third week of August and within 10 calendar days of enactment of an appropriation bill. The initial apportionment includes estimates of expected reimbursables, carryover amounts and prior-year recoveries for multi- and no-year accounts, and anticipated user fee transfers to the no-year accounts. After enactment of an appropriation, an apportionment is due to OMB for annual accounts.

  3. For newly enacted, full-year appropriations, OMB automatically apportions 30 days of funds, calculated starting with the first day of enactment while CB awaits approval from OMB. If OMB has not approved a request on the 30th day after enactment, OMB automatically apportions agencies another 30 days of funds. The rate is the highest of:

    • the pro-rata share (1/365th for each day) of the prior year's enacted appropriations level

    • the pro-rata share (1/365th for each day) of the current year's enacted appropriation level

    • the historical seasonal level of obligations

    Once OMB approves a written apportionment, the automatic apportionment ceases to remain in effect.

  4. For the yearly appropriations, an amount not to exceed one percent of the total is apportioned to pay legitimate obligations related to canceled appropriations.

  5. OMB Circular A-11, Preparation, Submission and Execution of the Budget, provides automatic apportionments of prior-year recoveries of $400,000 or two percent of the annual appropriation, whichever is lower; however, OMB requires the IRS to have an apportionment in place before we can use these funds. The IFS does not have a control on prior-year recoveries to stop the usage of these funds. Therefore, BUs should ensure that no obligations are charged to these funds until such time as apportionments are obtained.

Apportionments under a Continuing Resolution
  1. The OMB automatically apportions funding levels during a CR. After passage of final appropriations, CB prepares and submits revised apportionments to Treasury and OMB for approval. Corporate Budget has 10 days from enactment to request an apportionment from OMB even if the period of the CR has not expired. See OMB Circular A-11, Preparation, Submission and Execution of the Budget, Part 4, Section 123, Apportionments under continuing resolutions.

Appropriation Transfer Procedures
  1. As stated in IRM, Appropriation Transfers, the IRS has limited flexibility to transfer funds between appropriations, subject to prior Congressional approval. All proposed interappropriation transfers must be justified to and approved by CB. If approved, CB will submit the transfer request for approval to Treasury, OMB, and the Congressional subcommittees. After receiving all approvals, CB will submit Standard Form (SF) 1151, Nonexpenditure Transfer Authorization, to Treasury. The appropriation transfer process may take an extended period of time, so we must plan accordingly. After the entire process is complete, the appropriate FPM will coordinate the transfer in IFS.

  2. When possible, CB will broker realignments between accounts through Corporate Reserves, Fund 0290.

Interagency Transfers
  1. Corporate Budget controls funds transfers from the IRS to other agencies, documented with the transfer request SF 1151, Nonexpenditure Transfer Authorization. The SF 1151, Nonexpenditure Transfer Authorization, must cite the Public Law or other authority that authorizes the transfer. When a FPM needs to send or receive funds from another agency, the FPM must provide the following information via e-mail to CB:

    Required Information to Support Interagency Transfer
    Transfer (FROM/TO) [IRS information]
    1. IRS Fund Code

    2. Financial Plan & Fund Center

    3. Functional Area

    4. Commitment Item

    5. Internal Order, if appropriate

    6. Amount

    7. Justification for Request

    8. Date Needed

    9. Finance Contact Name & Phone Number

    10. Authorizing authority (such as Public Law, U.S. Code, etc.)

    11. Authorized by

    Transfer (TO/FROM) [other agency information]
    1. Agency

    2. Treasury Account Symbol

    3. Accounting Information, as available

    4. Agency Contact Name & Phone Number

    5. Backup Contact Name & Phone Number

  2. Some interagency transfers will require an Apportionment or Reapportionment Request, which must be approved by Treasury and OMB before the SF 1151, Nonexpenditure Transfer Authorization, may be forwarded. All approvals must be granted before funds may be moved in IFS.

Realignments between Financial Plans
  1. Realignments between Financial Plans require coordination between the designated Financial Plan Manager representatives in both the receiving and the sending Financial Plans.

Arrangements between Financial Plans
  1. In IFS, the sending FPM enters realignments using a Transfer Budget document, IFS transaction code FMBB. This applies to Budget Version 0 and/or 999. The sending FPM must ensure the entry does not exceed BAC reprogramming limitations. See IRM, Reprogramming Guidelines.

  2. The receiving FPM provides, via e-mail, to the sending FPM the appropriate receiver lines (TO lines) to use for the FMBB transaction including the fund, functional area, fund center, and commitment item.

  3. Within a week of receiving the e-mail, the sender must resolve any issues with the receiver and accurately enter the FMBB transaction into IFS. The sender attaches the receiver’s e-mail to the FMBB transaction as a "Long Text " note, and copies the TO lines directly into the FMBB transaction, providing a detailed audit trail in each budget address.

    Summary of Responsibilities for Realignments between Financial Plans
    Sending Financial Plan Manager Receiving Financial Plan Manager
    Ensures funds are available and coordinates with receiving FPM to ensure reprogramming limitations are not exceeded. Coordinates with the sending FPM to ensure that reprogramming limitations are not exceeded.
    Enters the FMBB (FROM and TO sides) using the receiver’s detailed TO lines. Provides accurate TO lines for FMBB.
    Enters FMBB transactions for FTEs (FROM and TO sides) into Budget Version 999. If salaries are transferred, ensures new FTE and labor levels in the sending plan are balanced. Provides accurate TO lines for receiving FTEs. If salaries are transferred, ensures remaining FTEs and labor levels in the receiving plan are balanced.
Realignments Requiring Assistance from Corporate Budget
  1. Financial Plan Managers should first try to resolve funding issues by making realignments within their financial plan. Second, they should see if funds are available in other organizations that could be realigned without exceeding BAC limitations. Finally, if no resolution can be found, a FPM may submit a request to CB. The request should include a full justification and the Corporate Budget Funds Transfer template, which includes the accounting string necessary to process the reprogramming in IFS.

Labor Projections and Charging Labor Cost
  1. Labor costs are the single largest portion of the IRS budget, making up roughly 70% of direct appropriations. Financial Plan Managers must therefore use labor projections to project and monitor current fiscal year requirements.

Labor Projections
  1. During budget execution, FPMs must monitor their labor costs regularly using the IFS 3YRF. All FPMs will input their hiring, attrition, and any other assumptions specific to their financial plan in the module on a regular basis. Additionally, FPMs must provide their other-than-full-time permanent staff plan data to CB as needed.

  2. Formal labor reviews are scheduled as part of the financial review process. See IRM, Financial Reviews. Corporate Budget will use 3YRF data to report on staffing levels and to make labor projections. Corporate Budget will perform labor analyses to ensure that funds are allocated appropriately. More specifics are included in the current 3YRF Labor Analysis Guidelines, found on the Business Warehouse & Business Planning/Simulation website.

  3. Corporate Budget arranges 3YRF training throughout the year for the BUs. Additionally, the BPS Team posts news and resources on the Business Warehouse & Business Planning/Simulation website.

Charging Labor Costs, General
  1. Labor costs are generally obligated to functional areas based on the cost center where the employee is currently assigned organizationally. The cost center is based on the Totally Automated Personnel System (TAPS) organizational segment ("org seg" ) code. When employees perform work in a functional area or on an IOC other than the one where they are currently assigned organizationally, their time should be charged to the functional area or IOC where the work is performed. However, because adjustments to time charging require significant key entry and are highly susceptible to error, each FPM must choose an approach to time charging that balances timeliness, burden, and accuracy.

  2. As the primary approach to time charging, FPMs should generally leave time charged to the home cost center, as long as the data will be reasonably accurate.

  3. Financial Plan Managers should use direct charging (Iine-by-Iine accounting) only for a few defined needs, especially capturing work on IOCs and detail assignments through the Single Entry Time Reporting (SETR) system.

  4. Financial Plan Managers should use indirect charging for limited needs; e.g., Counsel's activities, EITC charging, and customer education and outreach work done by Tax Exempt & Government Entities revenue agents. Other needs may be permissible as well. The emphasis should be on the need for reasonably accurate data, making indirect charging of small amounts unnecessary. As with all document entry, ensure proper documentation to justify the entries into IFS. Indirect charging is done in IFS by using transaction code FV50, Park G/L Account Document, with document type EV (Expense Voucher), the IFS document type for correcting and transferring expenditures.

  5. Gaining and losing organizations are both responsible for using correct accounting codes when there is a delay in the release of employees to a different organization code or where there is a delay in the processing of an SF 52, Personnel Action Request, for an employee reassigned to a different organization code.

Charging Labor Costs, Details and Temporary Promotions
  1. A detail or detail assignment is defined, for financial purposes, as any assignment to work outside the home cost center and/or functional area, for a specified period of time with a minimum duration of one pay period, when the employee is expected to return to his or her regular duties at the end of the assignment.

  2. All details must be charged to the correct functional area through timekeeping, unless an SF 52, Personnel Action Request, is prepared, which automatically points the charges and the on-rolls to the new receiving cost center and functional area. The correct activity is the functional area representing the work being done. If, for some reason, the receiving office is not funding the detail, the employee's manager must coordinate with the servicing budget office to coordinate charging the employee's time to their home cost center, and must charge it to the correct functional area. The overriding principle is that FPMs must charge time correctly by functional area to avoid statutory violations of appropriation law.

  3. When an employee is detailed and no Personnel Action Request is completed (i.e., same-grade detail), either the "D" (Detail) code or the "U" (User Funded) code can be selected as an override to the generated accounting code so the charges are directed to the function where the work is being performed.


    At no time should the "S" (SETR Generated) code be manually entered in the 13th position of the accounting code. This is strictly a "SETR" or "System" generated code. When entered manually, SETR does not detect that an override is necessary and will use the prior-stored accounting code which is usually the accounting code of the employee’s permanently assigned organization code - not the code where the work is being performed.


    Because details of on rolls do not move when we use the "D" or "U" code in timekeeping, on-roll-based labor projections, especially 3YRF projections, should be adjusted to account for details.

  4. When a detail involves a temporary promotion, the on-roll moves to the organization that is doing the promotion, so it's important to know when the temporary promotion will end, since the 3YRF will continue to assume the person stays in the promoting organization. The Human Resources Reporting Center can be used to determine the ending date of the temporary promotion. See Secured Business Unit Sites, Employee Data Reports, NTE Report-TIMIS and TAPS.

  5. Each BU should establish a control point at a high level within the organization (e.g., branch, division, or operation) to keep a log of all employees authorized to be on one of these codes and the expected duration. Follow up as necessary to ensure that the code is removed when no longer applicable.

FTE Utilization Policies
  1. FTE allocations are maintained in IFS Budget Version 999 (see IRM, Integrated Financial System Version Descriptions).

  2. Financial Plan Managers should ensure FTEs are fully funded with labor and non-labor resources. In particular, each Financial Plan’s labor funding (specifically, Commitment Items 11SP, 11ST and 12LA in IFS version V1) must support the number of FTEs in the Financial Plan (version V999) at all times. When funding transfers are made, FTE adjustments must be made to retain this balance between FTEs and labor.

  3. Financial Plan Managers are responsible for their FTE resources, although systemically they need Corporate Budget's assistance to change the total FTE number in IFS (see IRM, Changing FTEs in IFS). Financial Plan Managers are allowed to "drown" surplus FTEs (that is, reduce FTE allocations) from the Financial Plan, to create additional FTEs, and to convert between Other Than Full-Time Permanent FTEs and Full-Time Permanent FTEs, as needed to maintain balance. These actions are permitted as long as sufficient labor and non-labor funds are available to support the FTEs, and they do not adversely impact accomplishment of the Strategy and Program Plan. See the hiring guidance in the next section.

Changing FTEs in IFS
  1. To remove, add, or restore previously removed FTEs in IFS, the FPM must ask the CB BU analyst to make the adjustment.

  2. Corporate Budget BU analysts adjust FTEs in IFS Budget Version 999 at the AUTH level with a FMBB document. Commitment Items begin with ZPM for Permanent FTEs and ZTM for other-than-full-time permanent FTEs followed by two digits representing the activity type. Generally, the transfer should use commitment items ZPM32 for full-time permanent FTE and ZTM29 for other-than-full-time permanent.

  3. Systemically, FTEs cannot be transferred in IFS between funds. Rather, each fund is treated individually with an increase or decrease. The FPM may contact the CB BU analyst to request the increase and related decrease.

  4. These actions are permitted as long as sufficient labor and non-labor funds are available to support the FTEs, and they do not adversely impact accomplishment of the Strategy and Program Plan. See IRM, Hiring for guidance.

Personnel Issues
  1. Budgetary guidance is warranted for certain personnel issues.

Hardship Relocations
  1. The IRS hardship relocation guidelines are delineated in Article 15 of the 2012 National Agreement II between the IRS and National Treasury Employees Union. A basic tenet of the IRS hardship relocation policy is that there is work to be performed, now and in the future, in the geographic area to which an employee has requested a hardship relocation, and there must be a vacancy that management intends to fill. There will be no transfer of funds or FTEs to support approved hardship relocations. The 2012 National Agreement II is on the Human Capital Office’s (HCO) Labor & Employee Relations website, under National Agreement.

  1. Financial Plan Managers can process internal and external hiring actions as long as they have adequate labor resources and FTEs in the current fiscal year, and hiring will not impact their budget for the following year as defined by the President’s Budget (excluding initiatives). See IRM, Managing within Resource Availability

  2. The CFO uses 3-Year Rolling Forecast data to report on staffing levels and to make labor projections. Financial Plan Managers must use the 3YRF to input their planned hiring, attrition, and any BU-specific assumptions for Labor Reviews (see IRM, Labor Reviews).

  3. Corporate Budget will work with Business Units to analyze the maximum year-end staffing capacity and affordability, based on expected budget levels, hiring plans, and attrition.

  4. Hiring plans are also reported in Staffing Level reports (see IRM, Staffing Level Reports - Positions and FTEs, and in PeopleTrak.

Staffing Level Reports - Positions and FTEs
  1. Financial Plan Managers are responsible for developing staffing plans to achieve the goals in the budget. Financial Plan Managers update the 3YRF with full-time perm hiring plans and attrition projections by pay period and employment category. Corporate Budget uses this information and historical trends to develop staffing status reports for management.

Cash (Monetary) Awards and Time-Off Awards
  1. IRS manages awards based on OMB and OPM guidelines. Award pool estimates at the financial plan level are established in accordance with these guidelines.

Cash (Monetary) Awards for Prior Fiscal Year
  1. Cash (monetary) awards are chargeable to the "Appropriations current at the time the award is made" , per GAO Principles of Federal Appropriations Law, Volume II, Chapter 7, Section B.7.a. For example, corrections or adjustments to cash (monetary) awards made in FY 2012 are chargeable to FY 2012. On the other hand, if for some reason an award is delayed, such that managerial approval is not completed until after September 30 (the next fiscal year), the award is considered to be made and chargeable in the new fiscal year.

  2. In general, awards are regarded as having been made when there is an administrative determination to make them, as evidenced by the effective date on the SF 50, Notification of Personnel Action, for the award (the effective date is not the same as the payment date).

  3. Corrections and Adjustments: Corrections of clerical errors are properly chargeable to the fiscal year in which the award was originally made.

  4. In circumstances when interest must be paid on a late or partial payment of awards, the interest is chargeable to the fiscal year in which the award should properly have been made.

  5. Awards Claims and Settlements: The date that the awards claim becomes a legal liability determines the fiscal year of the appropriation to be used to pay the claim. Which fiscal year to charge for claim resolution depends on the underlying basis of the dispute and the specific circumstances of the case. General Legal Services is able to provide advice with regard to settlements on a case-by-case basis.

  6. In situations where a settlement is determined in the current year for an award, such adjustment would have to be made from current-year funding. In such a situation, CB would direct the BU to reprogram funds into commitment item 1171 to supplement cash (monetary) award funding. The supplemental award funding is in addition to the awards pool for current-year awards.

  7. See IRM, Gainsharing Travel Savings Program for information about gainsharing awards for the prior fiscal year.

  1. The responsibility for buyout costs depends on who initiates the buyout.

Servicewide Buyouts
  1. When Servicewide buyouts are initiated and an employee accepts a buyout, the related Voluntary Separation Incentive Pay (VSIP) should come from the financial plans’ allocated resources unless other specific guidance is provided. Terminal leave and other expenses should be funded like they are funded for all separating employees. Administrative payments to OPM for processing the buyouts in that fiscal year will be handled separately. Corporate Budget and the BUs should consult with HCO regarding the process and the remittance of fees to OPM prior to finalizing buyout offers.

  2. If a BU negotiates an arrangement whereby an employee is permitted to accept the buyout in the current year, but actually retires in the following fiscal year, the expenses are incurred in the following fiscal year – when the employee retires, not when the decision is made. In this case, the BU will be responsible for funding the buyout-related expenses incurred in the following fiscal year.

Business Unit Buyouts
  1. If a BU decides to offer buyouts, that BU will be responsible for buyout expenses, including VSIP, Terminal Leave, and possibly OPM costs. Business units should consult with HCO regarding the process and the remittance of fees to OPM prior to finalizing buyout offers.

Travel and Above Standard Level Requests
  1. Each BU receives travel funds to complete its mission and to support its customers. The objective should be to eliminate as much as possible employees' charging travel against a financial plan other than their home financial plan and functional area. All travelers should charge travel to their own BU whether in support of their own direct program or in support of a customer function.

  2. Travel directly related to the Federal Highway Administration’s Excise File Information Retrieval System (ExFIRS) may be charged against available multiyear funds as directed.

  3. Employees participating in leadership training programs must charge their time and travel costs to the home functional area designated by the BU where they work.

  4. Information Technology should pay for the travel of all IT analysts, whether they are attending a function within their own BU or assisting with the implementation of an approved project/program.

  5. In general, support functions such as IT, Agency-Wide Shared Services (AWSS), and HCO have been funded to support their customers’ day-to-day operational needs, and should not expect the customer to pay for their usual travel. Some examples and exceptions follow:

    1. Agency-Wide Shared Services will require a BU requesting above-standard or exceptional requests to fund the travel costs. Above-standard or exceptional requests are those beyond the level of service standards mutually agreed upon in the Level of Service Agreement between the support organization and its customers. In the case of approved space projects that are centrally funded from the Stewardship Financial Plan (STWD), necessary AWSS project travel and overtime funds already are included in the project authorization amount, and no funds will be requested from BUs; however, BUs will be expected to pay travel and overtime expenses related to customer-funded projects.

    2. The Human Capital Office will pay for travel associated with funded Servicewide programs such as administration of the Enterprise Learning Management System (ELMS) contract. AWSS personnel should pay the travel of instructors for timekeeping classes and bankcard classes.


Gainsharing Travel Savings Program
  1. Under the Government Employee Incentive Act, IRS employees can earn gainsharing travel savings awards for saving IRS money while on temporary duty travel. These savings will come from the use of Iess-expensive Iodging and/or from the use of frequent flyer benefits to purchase airline tickets for official travel. Employee participation is optional. Gainsharing awards are travel expenses, captured as General Ledger Account 6100.1236. See IRM 1.32.14, The Gainsharing Travel Savings Program.

  2. All temporary duty travel with lodging expenses, foreign or domestic, are covered under this program. Relocation travel is not covered under this program. See IRM 1.32.1, the Official IRS Local Travel Guide and IRM 1.32.11, Official IRS City-to-City Travel Guide.

  3. For gainsharing awards, some BUs require that Form 9127, Recommendation for Recognition, be completed and routed through the appropriate officials. Others process gainsharing awards through HR Connect. Each BU may provide local procedures. Use Form 9127, Recommendation for Recognition, unless local procedures dictate otherwise.

  4. IRS employees must submit their request for a gainsharing award no later than December 31 for the immediately preceding fiscal year.

Statistics of Income, Functional Area 4Q
  1. Surplus funding for Statistics of Income (SOI), Functional Area 4Q, may be reprogrammed within a Financial Plan as needed to cover Functional Area 4Q deficits. Surplus SOI funds in any Financial Plan will first be used to offset SOI deficits in other Financial Plans or Fund Centers before being reprogrammed into other Functional Areas, at the direction of the Director, Statistics of Income. The written concurrence of the Director, Statistics of Income, is required before reprogramming FTEs or funds out of Functional Area 4Q.

Treasury Franchise Fund (TFF)
  1. The Shared Services Programs (SSP) Division within the TFF provides common administrative services that benefit customers both within Treasury and outside agencies. The SSP provides these services on a centralized basis, where they can be administered more advantageously and more economically than they could be provided otherwise.

  2. The effective management and use of the Interagency Agreement (IAA) is a shared responsibility of the IRS and SSP.

  3. The SSP will bill the IRS monthly for these services.

  4. In each BU, the person responsible for all TFF issues is called the funding official and is defined as the BU DFO or the designee responsible for certifying TFF funding.

  5. Corporate Budget coordinates TFF issues between SSP funding officials and Treasury. Prior to the start of each fiscal year, Treasury’s SSP Office submits a proposed financial plan to Treasury’s Shared Services Council membership for approval. All agencies participating in the TFF, through their membership in the TFF, must review and approve the financial plan, along with any increases beyond those necessary to maintain current levels. IRS CFO, as a voting member of the Shared Services Council, approves or disapproves individual TFF program funding levels. The SSP then issues the IAA which must be signed by the IRS CFO.

  6. Each year CB issues final costs to all TFF funding officials and issues additional guidance in the processing of the TFF obligation documents.

Rebates and Refunds
  1. Generally, any funds received from sources outside of the agency must be deposited into Treasury’s general fund as miscellaneous receipts, unless the agency has statutory authority to retain funds for credit (that is, an increase) to its own appropriation.

  2. An exception to the general rule is allowed for receipts that qualify as refunds. Refunds are defined as "repayments for excess payments and are to be credited to the appropriation or fund accounts from which the excess payments were made." Refunds must be directly related to previously recorded expenditures and are reductions of such expenditures. Refunds also have been defined as representing "amounts collected from outside sources for payments made in error, overpayments, or adjustments for previous amounts disbursed." GAO Opinion B-217913 (1986). In the referenced opinion, GAO determined that travel credit card rebates are adjustments of previous disbursements, therefore qualifying as ‘refunds.’ So, when refunds and/or rebates are received, including credit card rebates, add them to the appropriation and fiscal year initially charged.


    IRS earns rebates through the GSA SmartPay2 contract for government credit cards. AWSS-ESS Credit Card Services generates a quarterly Citibank Custom Reporting System Report to determine the percentage spent by appropriation for Individually-Billed travel cards and Centrally-Billed travel accounts. They allocate the rebates to the Business Units in the appropriation in which they were spent based on prior quarter spending.


    IRS may retain a rebate or credit when contracts contain clauses providing for contract price adjustments. "In 34 Comp. Gen. 145 (1954), [GAO] held that the refund required under a guarantee-warranty clause was properly creditable to the agency appropriation because it could be considered an adjustment in the contract price. Similarly in 33 Comp. Gen. 176, [they] held that a contractor's refund made under a price redetermination clause may be credited to the agency account in that the refund was the return of an admitted overpayment."

  3. Timing of the original obligations determines the dispensation of the rebate.

    • If the appropriation initially charged is open (current year), apply the rebate/refund to current year funds and it becomes available for obligation.

    • If the appropriation initially charged has expired, but is not yet closed, apply the rebate/refund to the expired account, even though its use in a prior year fund is limited.

    • If the appropriation initially charged has closed, deposit the refund to the Treasury general fund.

Financial Plan Managers’ Procedures

  1. The following procedures are developed and imposed primarily by individual Financial Plan Managers, for cross-cutting and/or stewardship issues.

Internal Order Codes
  1. Internal Order Codes are data elements in IFS that collect expenditure data for specific projects. They are used to track training and event-related costs and planning and expenditure data for projects within IFS. They are generally a five-digit alpha-numeric data element. For IT projects, the IOC may contain eight positions to track sub-project activities. Reimbursable projects use 10-digit IOCs. A listing of IOCs can be found in the current Financial Management Codes Handbook on the CB website, along with an indication of which codes are valid in which appropriations. See IRM,Tracking Event-Related Spending.

  2. Section 3.1, Internal Order Code (IOC), of the Introduction to the Financial Management Codes Handbook found on the CB website provides details on Internal Order Codes.

  3. See Exhibit 1.33.4-2, Master Data (Code) Change Request Procedure, for information on how to request an IOC.

  4. See the Structure for Internal Order Codes guidance for the IOC structure.

Internal Order Codes – Information Services and Business System Modernization (BSM) Programs
  1. Internal Order Codes continue to be the official source for project cost information and are required for all costs charged against BAC 98, Information Services (IS), and BSM appropriation resources. Non-labor costs will be captured by an IOC through the normal accounting process (e.g., requisitions and travel vouchers). Labor costs will be captured from the payroll system, or by using an EV voucher. Employees funded by IS resources are required to track their time by IOC in the payroll system. Internal Order Codes also are used as needed to track certain major projects. See IRM, Financial Codes.

  2. Customers requiring an IS or BSM IOC should first contact IT Financial Management Services, Formulation Policy and Programs, who will provide assistance to customers and act as a liaison with CB for officially establishing or revising/removing codes.

  3. The IOC Structure tab of the Financial Management Codes Handbook describes special identifiers within the IT IOC structure.

Tracking Event-Related Spending
  1. An event includes a conference, meeting, training, award ceremony, or other similar gathering that involves expenses of the attendees, such as for travel, meals, refreshments, or mementos.

  2. Internal Order Codes are required for events that cost $20,000 or greater that must be reported to Treasury and events $25,000 or greater that require prior Treasury approval.

  3. Business units should consider establishment of an IOC for events estimated to be less than $20,000 if the possibility exists that the actual costs could potentially exceed $20,000. Additionally, requisitions in IPS to purchase equipment or contract services related to events must include the unique event IOC.

  4. See the Event Tracking section of the Structure for Internal Order Code guidance for information on Event Tracking IOCs.

  5. For most events that have total costs of $20,000 or greater, BUs must follow the CFO Event Approval process detailed in the Interim Guidance on the Approval Process for Event-Related Spending, issued July 29, 2014.

  6. Travel and related expenses with a cost of $20,000 or greater that do not require approval through the CFO Event Approval process are detailed in Exceptions to the Approval Process for Event-Related Spending Requirements. For these events:

    • BU staff should work with their BU finance office to prepare an IOC Request Form using the criteria established in the Structure for Internal Order Code guidance and submit it to *CFO Master Data Request

    • The IOC Request Form should include the following statement in the "Reason for Action" field: "This event is not required to go through the event approval process."

    • CB will load this information into the IOC Request Upload Sheet, and forward it to Office of Financial Management Systems for activation.

    Business units must continue to submit to the CFO FM organization detailed information required by Treasury for all events, including those listed above, with total costs of $20,000 or greater. This information must be submitted at 10 days and 40 days after the event is held to *CFO Event Request as required by the Interim Guidance on the Approval Process for Event-Related Spending, issued July 29, 2014. The CFO will continue to report this information to Treasury.

  7. The Beckley Finance Center (BFC) will periodically contact BUs to review event-related information.

  8. The most current guidance and forms related to event spending can be found on the HCO website IRS Meeting and Training Approval: What You Need to Know .

Training Programs
  1. The Human Capital Office manages the executive leadership program and pays all costs to manage the program. Employees participating in Servicewide leadership training programs charge their time and travel costs to the home functional area designated by the BU where they work. The Human Capital Office pays contract, materials, and instructor costs for the Servicewide leadership programs.

  2. The Human Capital Office is responsible for the curriculum development for the education community and e-learning infrastructure.

  3. The Human Capital Office manages the Skillsoft program. The Human Capital Office and IT fund the Skillsoft contract, which includes Books 24x7. The Human Capital Office maintains contract administration responsibilities for the Accounting and Tax Law Training (Thomson Reuters Checkpoint Learning) contract. The BUs prepare and fund requisitions based on the number of online training modules or customized tasks being ordered off the Thomson Reuters Checkpoint Learning contract.

  4. All expenditures associated with training commitment items must include an IOC. Internal Order Codes for training have been established for mission-critical occupations, management levels, Servicewide programs, and training support. This includes training travel, training services, and training supplies.

  5. For training events of $20,000 or more, a unique IOC must be established based on the scheme in IRM, Tracking Event-Related Spending, and entered in the Electronic Travel System as the IOC if a "T" is selected as the travel purpose code. For events that are under $20,000, please enter the course number or other approved IOC in the Internal Order line if a "T" is selected as the travel purpose code. Since IOC is not a mandatory field in the Electronic Travel System, managers must ensure these codes are entered in the System.

    1. For more information, see Interim Guidance on the Approval Process for Event-Related Spending, issued July 29, 2013, and IRS Meeting and Training Approval: What You Need to Know.

    2. Training events that have total costs of $20,000 or greater require detailed recording keeping. Business units must maintain and report actual costs for events $20,000 or greater in accordance with the Interim Guidance on the Approval Process for Event-Related Spending, issued July 29, 2013. See IRM, Tracking Event-Related Spending.

    3. Each Business Unit is responsible for establishing a method to identify, document, track and review all events, including but not limited to:

    • Costs related to event planning and attendance;

    • Approvals, justifications, cost comparisons, and cost-benefit analyses needed for the use of the event site under consideration; and

    • Meeting the reporting requirements required in this guidance.

    Each BU will maintain documentation related to all event planning and attendance, regardless of the cost, for a period of six years and three months, in a manner that allows for audit review and for management inquiry. See IRM, Tracking Event-Related Spending.

  6. For training included as part of a contract, this training must be a separate line item on the requisition and coded as training in IFS. Training listed as a separate task in the statement of work in a contract for the acquisition of goods and services should be submitted for review according to the HCO policy. See IRM 6.410.1, Learning & Education (L&E) Policy.

  7. FY 2012 Budget Operating Guidance issued November 23, 2011, eliminated funding for Employee Organization Conferences in FY 2012. FY 2013 Budget Operating Guidance issued December 6, 2012, indicates that FY 2012 Budget Operating Guidance remains in effect until further notice.

Object Class 42, Insurance Claims and Indemnities Funding
  1. Chief Counsel is responsible for administering funding for Object Class 42, Insurance Claims and Indemnities. Counsel processes and approves insurance claims and other litigation expenses under General Ledger Account 6100.4202 for parties who prevail in tax litigation cases against the IRS. Counsel also processes and approves indemnity payments, which include Federal tort claims and employee personal property claims. Federal tort claims filed under the Federal Tort Claims Act are paid using General Ledger Account 6100.4201 for personal injury claims, which are taxable, or General Ledger Account 6100.4209 for property damage claims, which are nontaxable. Employee personal property claims filed under the Military Personnel and Civilian Employee Compensation Act are also indemnity claims that are paid using General Ledger Account 6100.4209.

  2. These claims are funded on a centralized basis through one of two methods:

    1. Agency-Wide Shared Services is responsible for funding Counsel-approved attorney fee and indemnity claims in the Taxpayer Services (0912) and Enforcement (0913) appropriations.

    2. Information Technology is responsible for funding Counsel-approved attorney fee and indemnity claims in Operations Support (0919).

  3. All non-tax litigation attorney fees or settlement claims are the responsibility of the BU in which the claim arose. Settlement claims include payments to taxpayers for the expenses incurred due to an erroneous levy (General Ledger Account 6100.4203) and payments to current and former employees for the final settlement of a complaint (General Ledger Account 6100.4204). Claims also may include payments of claims and judgments that are taxable and arise from court decisions or abrogation of contracts (General Ledger Account 6100.4205) as well as payments of claims and judgments that are non-taxable and arise from court decisions or abrogation of contracts (General Ledger Account 6100.4206).

  4. Amounts awarded, including settlements to current or former IRS employees or applicants for employment, in equal employment opportunity (EEO) cases litigated in District Court are the responsibility of the BU in which the EEO complaint arose (General Ledger Account 6100.4211).

Rent Program and Building Delegation
  1. Rent resources are centralized in AWSS, Office of Resource and Operations Management.

  2. IRS occupies several GSA-delegated buildings, for which it is responsible for all operations and maintenance (O&M). Building Delegation funds in Functional Area 3D are to be used solely for the GSA Building Delegation Program, as documented in delegation agreements.

  3. Each year, GSA estimates the amount of O&M they would have charged, if they had operated those buildings under their standard usage policies. In accordance with Public Law No. 101-217, §121(d)(3), IRS is authorized to retain as no-year money the unexpended portion of our appropriated funds up to GSA’s estimated cost of O&M. Therefore, if our actual O&M costs for GSA-delegated buildings are less than GSA’s estimate for the given year, the difference is eligible for transfer (rollover) at year-end into no-year authority. Corporate Budget controls the transfer process and must obtain approval based on input from AWSS. Agency-Wide Shared Services is responsible for re-allocating funding to delegated site allotment offices once CB has completed the appropriation transfer process.

  4. Under no circumstances may any rollover no-year funds be used for current-year labor costs. No-year rollover funds may be obligated at the discretion of the Financial Management Officer in the delegated site to meet current-year needs and must be used in accordance with GSA-defined standards.

Paper or Print Tax Research Services
  1. In 2009, IRS entered into corporate contracts for the delivery of comprehensive electronic tax law and legal research services through Lexis-Nexis and West Publishing. Commerce Clearing House (CCH), as a subcontractor of Lexis-Nexis, provides stand-alone discs. While a need remains for limited paper tax research services, purchase of these paper products should be carefully reviewed in light of available electronic sources. Lexis-Nexis and West Publishing contracts provide commonly used tax services in electronic format, such as Code of Federal Regulations, CCH U.S. Master Tax Guide, Research Institute of America United States Tax Reporter, etc. Operating divisions and functions should consider availability of these electronic services as well as employee skills, computer availability, and centralized shared libraries when determining the need for paper or print tax research services.

  2. Bulk contracting vehicles have been established for the purchase of print versions of the Internal Revenue Code and Income Tax Regulations, Research Institute of America Federal Tax Handbook, CCH U.S. Master Tax Guide, and the Federal Tax Baedeker Handbook. These bulk orders are coordinated through the Office of Servicewide Policy, Directives, and Electronic Research. Bulk ordering significantly reduces the per item cost of these products. The requesting operating division or function will fund the Code and Regulations orders, as well as a proportionate share of the handbook costs. Orders are based on the annual Other Government Agency survey, which is sent to each order point annually. The books are shipped through the Internal Management Directives Distribution System.

  3. For additional information, contact the Office of Servicewide Policy, Directives and Electronic Research (SPDER), or see SPDER’s Reference Tools at your Fingertips.

Direct, Shared, and Indirect Support
  1. Direct support, which can be reasonably identified and charged to a specific Functional Area, must be so charged. Shared support is explained below (see IRM, Shared (Cross-Functional) Support). Indirect support should be reviewed and charged to the multiple Functional Areas it supports, as long as a reasonable distribution can be made. If no reasonable distribution is possible, indirect support will be charged to the predominantly benefiting Functional Area. The IRS policy is to maximize direct support and minimize indirect support to the extent practicable.

Rent Program
  1. Agency-Wide Shared Services ensures that rent is committed and obligated monthly.

  2. Agency-Wide Shared Services manages the IRS Space and Housing program, including building delegation and equipment funds. Their oversight responsibilities include, but are not limited to, utilities, custodial expenses, and space alterations.

Shared (Cross-Functional) Support
  1. In many IRS offices, ongoing space consolidation and rent reduction initiatives have resulted in BUs sharing the same space. The shared support funding process covers these situations where multiple BUs use the same items or services, and benefit by sharing them, but the cost to each BU cannot be clearly identified.

  2. Agency-Wide Shared Services, Real Estate and Facilities Management (REFM), has established a new national contract with a single vendor to lease Office Copier Multi-Functional Devices (C/MFDs). As such devices are considered IT in nature, IT will manage the new MFD program.

    1. IT will bill the BUs for their share of the MFDs based on FTE.

    2. BUs will submit BAC transfer requests to CB during Plan Development to cover these costs.

  3. Mail room equipment maintenance for non-campus locations is funded by AWSS, and for the campuses by Wage & Investment (W&I).

  4. Wage & Investment manages the general Shared Support Program for the Washington, DC, metro area, all field offices, including SB/SE call sites, and all 10 campus locations. The Wage & Investment Shared Support Program does not include copiers or contracted mail room operations.

  5. Information Technology, User and Network Services, handles the networked printer environment. The program encompasses networked end user non-production printers (minimum 1-to-10 employee ratio). The networked printer program results in shared devices that cross organizational boundaries. In order to ensure printer consumable ordering/purchasing is transparent to the various organizational entities, User and Network Services administers the program through the Office of Acquisition Strategy. The program covers printer toner, waste toner bottles, oil bottles, photoconductors and, depending on the printer type, printer drums. The program does not cover paper products or consumables for stand-alone, non-qualifying printers. All IRS BUs are eligible to participate in the program.

  6. Information Technology is responsible for funding all costs of IT portable electronic devices (PEDs) in IT inventory; for example, Blackberries and wireless cards. This includes the costs for maintenance and repair. The determination of who has authorized use of wireless cards and Blackberries will be based on standard employee profiles, as well as Senior Executive Team decisions/direction.

    AWSS Rent Funds are centralized & paid by AWSS
    Public Transit Subsidy Program Funds are centralized & paid by AWSS
    Furniture AWSS primary; BU Supplementary
    Building Delegation AWSS
    Buildings Services and Maintenance AWSS
    Space & Housing – Space Alterations AWSS/REFM exclusively
    Equipment Purchases REFM for initial purchase of shared;
    W&I Shared Support for replacement of shared;
    BU for exclusive use
    Mail services at non-campus locations AWSS
    National REFM Mailroom Contract AWSS
    Shred Services AWSS
    Wage & Investment Courier (non-mail related), Shuttles, and Motorpools SB/SE or W&I Shared Support
    BU for exclusive use
    Equipment Rentals BU for rental of exclusive use;
    W&I for shared
    Mail meter rental & maintenance at non-campus locations BU for exclusive use; W&I Shared Support
    Small POD Supply Program W&I Shared Support for participating offices only
    Standard copy paper and fax toners W&I Shared Support for all DC Metro and Field Offices
    Bulk Printing & Postage (e.g., for tax packages & notices) W&I
    Mail meter rental & maintenance at campuses W&I Direct; W&I Shared Support
    Mail services at campuses W&I
    Chief Counsel Tax litigation attorney fees & indemnity claims See IRM, Object Class 42, Insurance Claims and Indemnities Funding
    IT Network printer consumables For network printers only, IT funds toner and, depending on the printer type, printer drums; see IRM Shared (Cross-Functional) Support
    Portable Electronic Devices (PEDs), e.g., Blackberries and wireless cards IT funds all maintenance of current IT inventory and approved additions of PEDs; see IRM Shared (Cross-Functional) Support
    Copiers/Multi-Functional Devices (C/MFDs) contract IT funds all photocopiers
Jury Fees
  1. Jury fees are handled as part of the standard collection process, not as a reimbursable. The actual collection transaction will be processed directly against the accounting string supplied with the fees. The BU point of contact is responsible for supplying the accounting string to the employee for use on Form 3210, Document Transmittal. All BUs will use General Ledger Account 6100.1111 as the expense code on Form 3210, Document Transmittal. Failure to supply valid accounting string information to the employee serving on the jury will result in the loss of that financial plan's ability to directly recoup those fees. Instead, the funds will default to a standard accounting string controlled by CB. Please note, all debit vouchers will be posted to the same accounting string as the original check.

  2. If the check is for time only, the employee should endorse the check by writing the words "Payable to Internal Revenue Service" on the reverse of the check beneath the employee's signature. The accounting string also should be identified on the jury fee check. In cases where the check for jury duty covers both time and travel, employees should cash the court's check and keep only the travel portion amount. Employees should complete a Form 3210, Document Transmittal, to forward their personal check (payable to the Internal Revenue Service) and a copy of the court statement to the BFC. The Form 3210, Document Transmittal should contain the employee’s full name as shown in their personnel records, social security number, organizational unit, the accounting string, office phone number, and the dates of attendance in court. The employee should then mail the check and Form 3210, Document Transmittal to Beckley Finance Center, Attention: Jury Fee Desk.

Food and Refreshments
  1. As a general rule, IRS may not use appropriated funds to furnish food for Federal employees at their duty stations, unless specifically authorized under statute.

  2. See IRM 1.32.20, Using Appropriated Funds to Purchase Meals and Light Refreshments.

  3. See Interim Guidance on the Approval Process for Event-Related Spending issued July 29, 2014.

Information Services, BAC 99 Procedures

  1. The following procedures apply to IS, BAC 98 resources. The Chief Technology Officer (CTO) has responsibility for all BAC 98 resources, and all IT resources reside in the IT (MITQ) Financial Plan. See IRM, Information Services (IS), BAC 98 Reprogramming Authority. Information Technology provides additional financial operating guidelines for its own organization on its IT Procedures/Guidelines website.

Policy on Procuring Information Technology (IT) Products & Services
  1. Funds in the IS budget activity (BAC 98) and the BSM appropriation (fund 0921) are designated for exclusive use in procuring information technology goods and services. BAC 98 provides funding for Servicewide IT operations and maintenance and investments to enhance or develop business applications for the BUs. BAC 98 funds telecommunications, hardware and software (including commercial-off-the-shelf), contractual services, and staffing costs to manage, maintain, and operate IS. In addition, funds in BAC 98 provide for critical or limited (except when funded by initiatives) improvements or enhancements to existing business applications. Even though IT is no longer its own appropriation, by defining the BAC, we state that these expenses will to be funded in BAC 98, part of the Operations Support appropriation (0919). Purchases of IT goods and services may only be funded from BAC 98 or BSM funds. All IT-related needs should be routed through IT.


    Telecommunications and other IT costs may be transferred from BAC 98 to the TFF no-year accounts for the IRS share of the TFF expenses.

  2. When an appropriation specifies the purpose for which the funds are to be used, 31 USC §1301(a) applies to restrict the use of the funds to the specified purpose. A specific appropriation must be used to the exclusion of a more general appropriation that might otherwise have been viewed as available for the particular item. Deliberately charging the wrong appropriation for purposes of expediency or administrative convenience, even with the expectation of rectifying the situation by a subsequent transfer from the correct appropriation, is a violation of law.

  3. The Commissioner delegated authority to the CTO to govern all areas related to IT resources and technology management (Delegation Order IT 2-1-1). Inherent in that authority is the responsibility to budget and deliver IT products. CTO policies and procedures are included in Delegation Order IT 2-1-1 and IRM 2.21.1, Introduction to Requisition Processing for Information Technology (IT). The Master Service Level Agreement provides additional guidance for obtaining internal IT products and services. The Delegation Order, IRM, and Master Service Level Agreement are all available on IT Procedures/Guidelines website.

Operations Support and Business Systems Modernization (BSM) Appropriations Reporting Requirements

  1. Regardless of the form they take (individual appropriations act, consolidated appropriations act, omnibus, etc.), the annual laws providing funding for the IRS typically include several reporting requirements related to general information technology investments as well as specific Business Systems Modernization (BSM) projects.

  2. Historically, reports have been due to the House and Senate Committees on Appropriations and the Comptroller General of the United States within 14 days after the end of each quarter of the fiscal year. Required content has typically included the cost and schedule performance for major information technology investments and specific BSM projects, including the purpose and life-cycle stages of the investments; the reasons for any cost and schedule variances; the risks of such investments and strategies the IRS is using to mitigate such risks; and the expected developmental milestones to be achieved and costs to be incurred in the next quarter.

  3. Reporting requirements and timeframes are subject to change on an annual basis, so for specific annual reporting requirements, BUs should refer to the language for the Operations Support and Business Systems Modernization appropriations in the annual funding law, and consult with the CB analyst assigned to their financial plan(s).

Earned Income Tax Credit (EITC) Procedures

  1. The following procedures apply to the EITC appropriation resources. EITC is a refundable credit created in 1975 to offset the impact of Social Security taxes on low-income families, encouraging them to seek employment rather than welfare. Pub 596 is an excellent resource guide for rules and regulations governing EITC. More information is in the W&I Finance Customer Guide.

  1. Wage & Investment's EITC Office was established to enhance oversight of the program. The EITC Program Office will negotiate agreement with the operating units through Service Level Agreements that specify the level of effort and activities in support of the EITC Program.

  2. Earned Income Tax Credit expenditures are tracked via three sub-appropriations:

    • 09E2D (Taxpayer Services)

    • 0917D (Enforcement)

    • 09E9D (Operations Support)

    The sub-appropriations roll up to the corresponding BACs already designated by functional area mapping; for example, funds in EITC functional area 2B roll up to BAC 22, in sub-appropriation 09E2, appropriation 0912.
    Although there is no legal requirement to do so, tracking the EITC program is necessary to enable the IRS to answer questions regarding the program.

  3. All financial plans involved in EITC activities will establish a charging methodology by functional area prior to the beginning of the fiscal year. Financial Plan Managers must ensure each employee's EITC time charges are reported accurately and timely by the 25th of every month, in accordance with the methodology established for their financial plan.

  4. Periodic audit reviews will be conducted by the EITC Office, as well as by the Treasury Inspector General for Tax Administration (TIGTA) and the GAO to ensure that obligations charged to EITC are only for EITC-related initiatives, programs, and projects.

Federal Highway Administration (FHWA) Trust Fund

  1. IRS has a project with the Department of Transportation to perform work on behalf of the Federal Highway Administration (FHWA) under the authority of the Highway Trust Fund. This project is undertaken by IT and SB/SE to enforce and enhance the collection of highway use taxes through systems modernization. This work is funded through use of an allocation account. See OMB Circular A-11, Preparation, Submission and Execution of the Budget, Part 1, General Information, Section 20, Terms and concepts.

  2. The Federal Highway Administration, the parent, is responsible for recording the contract authority, recording the appropriations to liquidate contract authority, and tracking obligations and disbursements of the fund through use of its own Treasury appropriation fund symbol. The Federal Highway Administration issues budget guidance to the IRS on Form FHWA 370, Advice of Funds Available for Obligation. The dollar amount on Form FHWA 370 represents an allotment of contract authority to the IRS. This form provides both the authority and description of the project or program to be executed. It does not provide the fund authority (dollars) to pay the bills. It only represents the transfer of contract authority. Funds are not transferred until actually needed for disbursement. The Federal Highway Administration will initiate a Form SF 1151, Nonexpenditure Transfer Authorization, based on IRS’s estimated quarterly disbursements. Financial Management provides the FHWA timely reporting of commitments, obligations, expenditures, and disbursements related to this fund using both budgetary and proprietary accounts. Business units are responsible for any expense transfers should they need to make FHWA charges to the current-year appropriations.

  3. Trust fund accounting is not the same as general fund or revolving fund accounting. Unused fund authority is returned to the parent annually and reallocated.

Private Collection Agency Expenditure Fund

  1. The FY 2009 omnibus appropriation shut down the IRS use of private collection agencies; as specified in Administrative Provision Section 108, "None of the funds made available in this Act may be used to enter into, renew, extend, administer, implement, enforce, or provide oversight of any qualified tax collection contract."

  2. A percentage of the funds that have been collected by Private Collection Agencies were transferred into Special Fund Expenditure Account 20X5510. The remaining amount is used only for IRS collection enforcement activities. SB/SE is the leading organization. This Fund is a no-year account, with normal budgetary procedures. OMB requires 10 days' notice of the plan to spend these funds before they can be used.

Accounting Issues

  1. Most accounting policies can be found on the CFO FM website, but key policies that are inextricably linked to budget execution are presented here.

Interagency Agreements or Reimbursable Agreements

  1. The IRS can enter into two types of interagency transactions: Interagency Agreements (IAA) or Reimbursable Agreements (RA). These transactions occur when Federal agencies perform work and provide goods or services for other agencies or activities on a reimbursable basis. Reimbursements between agencies are a form of resource transfer. The organization entering and signing the agreement is responsible for budgeting and arranging funding for the agreements. Such transfers are prohibited without statutory authority.

  2. IRS often contracts with other agencies, including Federal, state, and foreign governments, as well as private organizations, to perform work or provide goods or services for which the IRS will be reimbursed. The IRS accounts for the expenses incurred through the establishment of RAs, through which the IRS performs work and receives money. See IRM, Reimbursable Operating Guidelines (ROG). When the IRS pays for work performed or goods or services provided, this is called an IAA.

  3. In the event of a CR, continuing projects via IAAs are allowed to commence work and accrue earnings at the same rate that occurred in the prior year.

Reimbursable Work Authorizations (RWA) and Security Work Authorizations (SWA)
  1. Project managers for GSA Reimbursable Work Authorizations (RWA) must work with GSA to obtain documentation necessary to support charges for work completed on any individual RWA (GSA Form 2957). Project managers should be able to provide documentation to support all charges from GSA for a specific RWA, as well as any charges for unbilled amounts. At year-end, project managers should supply to the Beckley Finance Center a supportable estimate for all work completed on an RWA, but unbilled by GSA. This will provide the basis for the accounting office to record an account payable for work completed but not yet billed.

  2. Project managers for Security Work Authorizations (SWA) must work with the Department of Homeland Security (DHS) to obtain documentation necessary to support charges for work completed on any individual SWA (FPS Form FPS 57). Project managers should be able to provide documentation to support all charges from DHS for a specific SWA, as well as any charges for unbilled amounts. At year-end, project managers should supply the Beckley Finance Center a supportable estimate for all work completed on an SWA, but unbilled by DHS. This will provide the basis for the accounting office to record an account payable for work completed but not yet billed.

Intra-governmental Payment and Collection
  1. Financial Plan Managers, with input from project managers as appropriate, are responsible for ensuring certification for payment for all amounts billed from other federal agencies through the Intra-governmental Payment and Collection process. Certification indicates that the IRS has received all the goods and services for which it is billed, and that those goods and services were acceptable. Certification to the Beckley Finance Center should occur within 10 calendar days of receipt of the supporting billing information from the billing agency. In cases where amounts billed are in dispute, reconciliation should be provided to the accounting office identifying these amounts and plans for resolution of discrepancies.

  2. At year-end, Financial Plan Managers should report any material discrepancies for Intra-governmental Payment and Collection billings to the Beckley Finance Center so that the amounts due to or from another federal agency can be recorded.

  3. At year-end, Financial Plan Managers should notify the Beckley Finance Center of goods or services provided by another federal agency for which the IRS has not yet been billed. Notification must include the associated IFS obligation document identification number.

Reimbursable Operating Guidelines (ROG)
  1. IRM 1.33.3, Reimbursable Operating Guidelines, assists FPMs in fulfilling their responsibilities related to the reimbursables program. These guidelines provide instructions to record reimbursable agreements in the financial system, and to bill and collect funds from other agencies.

  2. The reimbursable project coordinators are responsible for ensuring that an agreement is in place before doing the work and for coordinating with the FPMs for budget authority and recording obligations. Obligations related to reimbursable work may not be incurred until supported by documented evidence of a binding agreement between the IRS and the requesting agencies of activities. Because IFS prohibits FPMs from exceeding their budget, FPMs must help project coordinators comply with this long-standing policy: "No agreement, no work." See IRM 1.33.3, Reimbursable Operating Guidelines, for expanded guidance.

  3. Reimbursable project managers must maintain complete project files, including documentation supporting all reimbursable earnings for the projects. Documentation should include formulas, calculations, and all detailed documentation used to develop project earnings. See IRM 1.33.3, Reimbursable Operating Guidelines, for costing methodology procedures and the CB Reimbursables website for additional resources.

Vendor Payments

  1. To satisfy prompt payment regulations, the Contracting Officer’s Representative (COR), Alternate COR or End User must enter receipt of goods and/or services electronically in IPS for procurement acquisitions at the time of delivery of goods or completion of services. Entry of receipt should not be delayed pending either the 1) receipt of an invoice, or 2) acceptance for what has been received. The COR, Alternate COR or End User must enter acceptance as promptly as possible, but no later than the seventh calendar day after receipt has occurred, unless the contract specifies a longer period of time or there are unresolved issues with the goods and/or services. For service agreements where charges for the services vary from month to month, the COR, Alternate COR or End User must enter estimated receipt and/or acceptance. The automated interface between IPS and IFS posts both the receipt and acceptance to the obligation. See IRM, Electronic Receipt and Acceptance, for more information.

  2. When the COR, Alternate COR or End User enter receipt and/or acceptance electronically, they are required to obtain and retain hard copy documentation of the receipt of supplies and/or services in their files. Documentation can be in the form of packing slips, IRS generated reports, etc. An e-mail from the program manager stating that supplies and/or services related to a specific invoice or invoices have been received as of a specified date is also acceptable. The COR/End-User must review contracts on a monthly (or a cycle appropriate to the contract) basis to ensure receipts and acceptances are current and to make sure obligations are valid and accurate. For year-end close procedures, see IRM, Administrative Accounting, Annual Close Guidelines, for more information.


  1. Commitments and obligations must be posted timely. Obligations must be recorded within five business days of receipt of the appropriate documentation. See Interim Guidance on Timely Recording of Obligations. Commitments set aside funds for future obligations and are a management tool that draws down availability. Obligations are legally binding agreements created by awards, contracts, or purchase orders. The values of the negotiated agreements (obligations) are to be entered into lFS prior to the beginning of work. Obligations draw down (liquidate) commitments. Expenditures draw down (liquidate) obligations.

  2. Financial Plan Managers should make every effort to post data in IFS to the appropriate accounting string. However, accounting code corrections can be made in IFS. Financial Management's procedures identify thresholds below which the accounting codes for the obligation should not be changed, except in certain cases. In situations where the actual accounting code cannot be corrected, the FPM may need to transfer funds to cover any budget deficit. There are separate rules tor purchasing transactions, Electronic Travel System obligations, manual travel obligations, and payroll. See IRM, Accounting Code Changes, for information on submitting accounting code changes. The SV Request Form (Accounting Code Correction) is on FM’s Travel Guidance website.

Unliquidated Commitments/Obligations

  1. Timely management of commitments and obligations enables the IRS to optimize its financial resources. Unliquidated commitments and obligations may be deobligated at any time throughout the fiscal year, whenever they are deemed no longer valid. Financial Plan Managers are responsible for coordinating with Procurement and the Beckley Finance Center the timely liquidation of orders or estimated obligations that are no longer valid.

  2. Bulk-funded commitments and estimated obligations, in particular, must be tightly controlled, reviewed, and adjusted to actual requirements as quickly as possible. Financial Plan Managers must frequently (i.e., at a minimum, monthly) review all outstanding unliquidated obligations, regardless of fiscal year and appropriation, to identify unliquidated obligations that should be deobligated. They should contact all pertinent parties to help determine which unliquidated obligations may be deobligated. AUC and AUO programs have been established in IFS to assist and facilitate reviews. Periodic reviews are required by the CFO (see IRM, Aging of Unliquidated Commitments and Aging of Unliquidated Obligations Reviews).

User Fees

  1. User fees are collected throughout the fiscal year for the costs of providing specified services and are deposited into a special fund receipt account. User fees may be used to supplement IRS appropriations to fund corporate needs. IRS must submit spend plans to OMB and receive their approval prior to transferring funding from the receipt account to IRS no-year accounts.

  2. Once OMB has approved the spend plans, IRS must request an apportionment to transfer the "user fee" funds from the receipt account into user fee no-year accounts.

  3. Once funds are transferred to the user fee no-year accounts and are distributed to a financial plan, they become part of that financial plan’s resource availability for the current fiscal year. See IRM, Managing within Resource Availability.

  4. Balances available at fiscal year-end in the user fee no-year accounts, including recoveries from prior-year obligations, will be pulled back and returned to the receipt account for redistribution the following fiscal year.

  5. User fee charges for providing specified services must be reviewed every two years to ensure existing charges are adjusted to reflect changes in costs, and to determine whether fees should be assessed for other goods and services. See OMB Circular A-25, User Charges. The biennial review is the responsibility of the FPMs with the assistance of CFO and FM. Business units are responsible for collecting fees, maintaining case information, developing a method to track cases and fee information, and maintaining their files for audit purposes. See IRM 1.32.19, User Fees.

Expired, Closed, and No-Year Appropriations

  1. Budget authority life cycles are discussed in OMB Circular A-11, Preparation, Submission and Execution of the Budget, and the narrative of the Financial Management Codes Handbook found on the CB website. Appropriation language defines the period during which funds are open; that is, available for new obligations. IRS receives some multiyear and no-year funding, but most appropriations are annual appropriations, meaning they are open for one year. Special rules apply after an annual or multiyear appropriation expires.

  2. Expired appropriations: Once the period of availability expires, new obligations may NOT be incurred. Balances are available only for upward and downward adjustments to existing or unrecorded obligations during the five years following expiration of obligation authority for annual and multiyear funds. See IRM, Time: the Bona Fide Needs Doctrine.


    During FY 2013, balances from annual appropriations for FY 2008 through FY 2012 are expired.


    After 9/30/2013, the annual appropriation 13130912D will expire.

  3. An exception to the above is travel. Travel should always be obligated for the fiscal year in which it occurred. If an employee doesn’t file a voucher timely, the travel must still be charged in the year in which the travel took place.

  4. Closed appropriations: After the last expired year, the account is closed and the balances are canceled. Any invoices for valid obligations received after the account is closed must be obligated against and disbursed from current-year budget authority that is available for the same general purpose. However, no more than one percent of any annual appropriation is available to cover closed-year obligations. To monitor compliance with that limit in IFS, IRS uses separate funds designated by "Q" for these expenditures. The "Q" Fund is legally a subset of the current-year appropriation, pointing to the same Treasury symbol. Financial Plan Managers must use the "Q" Fund for valid obligations received after the account is closed.


    After 9/30/2013, the annual appropriation 08080912D is closed.


    Assume we received an invoice during FY 2013 for a valid obligation incurred against the FY 2004 annual Processing Assistance and Management (PAM) appropriation (0912). Since the account was closed and budget authority was canceled on 9/30/2009, the obligation would have to be made in the current year, FY 2013, against the closed-year Taxpayer Services "Q" fund account 13130912Q.


    Beckley Finance Center notifies CB about charges for closed-year accounts. Corporate Budget must promptly move funds from the direct account, example 13130912D, to the closed-year account, 13130912Q, to cover the expenditure (because the closed-year account is a subset of the direct account, legally this is not an interappropriation transfer, although systemically it is handled as such). Corporate Budget requests the accounting string from which to pull the funds from the BU.

  5. No-year funds: Occasionally the language for a specific appropriation of budget authority or the authorization of the appropriation may make all or some portion of the amount available until expended. This is referred to as no-year budget authority. These accounts are designated by an "X" in the account number, such as Treasury symbol 20X0913 (for example, in IFS, 12XX0913D).

Prior Year Funds Management

  1. When a FPM or the BFC needs to realign prior-year funds, the FPM or the BFC will request the realignment, via e-mail, to CB. The e-mail request must include a full justification, all accounting strings needed, and amounts. Unless there is reason to deny the request, CB will perform the adjustment in IFS and will respond via e-mail informing the FPM or the BFC of the processed adjustment and the IFS transaction numbers.

Division Finance Officers and Financial Plan Managers

The Division Finance Officers (DFO) and Financial Plan Managers have funds control responsibility for their Financial Plans; see IRM, Funds Control Responsibility. This exhibit identifies the DFO and Financial Plan Manager by position title.

Financial Plan Division Finance Officers Financial Plan Managers
Agency-Wide Shared Services (AWSP/STWD) Director, Resource and Operations Management Financial Plan Manager Associate Director, Resource and Operations Management, Financial and Human Resources Management Branch
Appeals (APPZ) Director Strategy and Finance Director, Finance
Chief Communications & Liaison (CALC) Director, Finance and Education Director, Finance and Education
Chief Financial Officer (CFOB) Associate CFO, Corporate Budget Associate Director, Operations Support (Non-IT)
Counsel (ATTY) Associate Chief Counsel (Finance and Management) Director, Financial Management
Criminal Investigation (CIDV) Director, Strategy Director, Finance
Executive Leadership and Direction (NHQM) Director, Resources and Operations Management Associate Director, Operations Support (Non-IT)
Human Capital Office (HCOH/HCCJ) Director, Finance Chief, Financial Management
Information Technology (MITQ) Director, Financial Management Services Chief, Formulation
Chief, Execution
Chief, Support Services
Large Business and International (LB&I) Director, Management & Finance Manager, Finance
Privacy, Government Liaison and Disclosure (PGLD) Director, Resource and Operations Management Chief, NHQM/CFOB/PGLD Budget Section
Small Business/Self-Employed (SBSE) Director, Strategy and Finance Chief, Financial Management
Tax Exempt and Government Entities (TEGE) Director, Finance Director, Finance
Taxpayer Advocate Service (TPAX) Director, Financial Operations Director, Financial Operations
Wage and Investment (WAGE/WISK) Director, Strategy and Finance Director, Finance
Other Corporate Plans (1111/0290) Associate CFO, Corporate Budget Director, Budget Execution

Master Data (Code) Change Request Procedure

Corporate Budget is the main point of contact for requesting Master Data additions, changes, and deactivations. Financial Management Master Data includes fund centers, cost centers, internal orders, functional areas, and commitment items.

Submit all requests to CB using the appropriate request forms. The request forms are found on the CB website. Once the forms are completed, e-mail them to *CFO Master Data Request. After the request is reviewed, either the code will be implemented in the system or an alternative recommendation will be made to the requesting BU.

For reorganizations, the BU should contact CB as soon as senior management approves the initial reorganization proposal. See IRM, Reorganizations and Other Modifications Affecting Budget. Corporate Budget facilitates the establishment of financial codes associated with reorganizations. The BU should meet with CB to discuss the purpose of the reorganization, to compare the old structure to the proposed structure hierarchy, and to determine derivation rules. Once an agreement is made, BUs should submit the appropriate request forms, along with an organizational chart, to CB at least 60 days prior to the anticipated effective date of the reorganization. Corporate Budget will coordinate with HR Connect representatives to ensure they receive accurate and complete information to implement financial codes in HR Connect.