11.3.31 Tax Check Reports on Federal Appointees 11.3.31.1 Program Scope and Objectives 11.3.31.1.1 Background 11.3.31.1.2 Authority 11.3.31.1.3 Roles and Responsibilities 11.3.31.1.4 Definitions/Acronyms 11.3.31.2 Information Disclosed in Tax Check Reports 11.3.31.3 Securing Information for Tax Check Reports Part 11. Communications and Liaison Chapter 3. Disclosure of Official Information Section 31. Tax Check Reports on Federal Appointees 11.3.31 Tax Check Reports on Federal Appointees Manual Transmittal October 13, 2017 Purpose (1) This transmits revised IRM 11.3.31, Disclosure of Official Information, Tax Check Reports on Federal Appointees. Material Changes (1) Editorial changes have been made throughout to update IRM/statute/organizational references, to update web citations and to make the text easier to follow and use electronically. (2) IRM 11.3.31.1 - Revised the title to Program Scope and Objectives to properly reflect the information communicated in this subsection. Included important information to conform to the new internal and management control standards under the following titles: IRM 11.3.31.1.1, Background - Added background information on the Tax Checks Reports on Federal Appointees process. The first four paragraphs of the prior IRM 11.3.31.1, General were incorporated into this section. IRM 11.3.23.1.2, Authority - Added legal authorities governing disclosures of Tax Checks Reports on Federal Appointees. Information from the prior IRM 11.3.31.1, General, (5) and (6), were incorporated into this section. IRM 11.3.31.1.3, Roles and Responsibilities - This IRM applies to all IRS personnel providing records under the provisions of IRM 11.3. IRM 11.3.31.1.4, Definitions/Acronyms - Compiled a list of frequently used abbreviations and their definitions regarding disclosures of Tax Checks Reports on Federal Appointees. (3) Removed items c) and d) from IRM 11.3.31.2(1). Also added in new (2) in that section to add guidance for determining a valid tax check waiver. Subsequent paragraph was renumbered. Removed reference to IRM Exhibit 11.3.31-2 from new (3) since that IRM exhibit does not exist. (4) Removed all of (3) from IRM 11.3.31.3 since Criminal Investigation will no longer be performing notification. Removed sentence in (4) stating that non White House request referrals will be made to Director, Collection Policy. Also added reference to IRM 5.1.8.5.2 in (4). Effect on Other Documents This supersedes IRM 11.3.31 dated May 20, 2015. Audience All Operating Divisions and Functions. Effective Date (10-13-2017) Related Resources The Disclosure and Privacy Knowledge Base can be found at: https://portal.ds.irsnet.gov/sites/vl003/pages/default.aspx Phyllis T. Grimes Director, Governmental Liaison, Disclosure and Safeguards 11.3.31.1 (10-13-2017) Program Scope and Objectives Purpose: This IRM section provides instructions concerning disclosures of tax information in Tax Checks Reports for Federal Appointees. Federal agencies and other governmental entities periodically perform background investigations on prospective employees. These investigations often include a request to IRS to perform a tax check. Audience: These procedures apply to all IRS employees and contractors. Policy Owner: The Disclosure office, under Governmental Liaison, Disclosure and Safeguards (GLDS) is responsible for oversight of Disclosure policy. Program Owner: The GLDS office, under Privacy, Governmental Liaison and Disclosure (PGLD) is the program office responsible for oversight of the Servicewide Disclosure policy. 11.3.31.1.1 (10-13-2017) Background Federal agencies, the White House, Executive Office of the President, and other governmental entities periodically perform background investigations on prospective employees, contractors, certain award nominees, and others to advance their mission. These investigations may include a federal Tax Check. Agencies will request a Tax Check report to supplement investigations concerning character, loyalty, or suitability of such prospective appointees, employees, contractors or award nominees. This may include positions of sensitive nature or that require high level clearances. Examples of the types of positions that require a Tax Check are: Prospective Presidential appointees that require Senate confirmation Nominees for Presidential "E" Awards established by Executive Order 10978 Candidates for the Malcolm Baldrige Award Certain other persons/entities Note: Other consent programs based on IRC §6103(c) for delivery of account transcripts are routinely handled by other locally established procedures. See IRM 11.3.3, Disclosure to Designees and Practitioners. The IRS Governmental Liaison, Disclosure and Safeguards (GLDS) function is responsible for conducting these tax checks and issuing a report to the requesting agency. There are three types of Tax Check cases - routine, priority and extreme priority. Routine cases are assigned to the field Disclosure offices based on inventory needs and are to be processed within 30 days of receipt. Priority cases are also assigned to a field Disclosure office but are to be processed within 15 days of receipt. Extreme priority cases are generally tax checks for White House appointees. These Tax Checks cases are assigned to a specialized team within a specific Disclosure Office and are to be processed within 15 days of receipt. 11.3.31.1.2 (10-13-2017) Authority Tax Check requests for tax information are made pursuant to: IRC §6103(c) based on a written authorization for disclosure of return information to a designee signed by the taxpayer. (See IRM 11.3.2, Disclosure to Persons with a Material Interest, and IRM 11.3.3, Disclosure to Designees and Practitioners), or IRC §6103(g) based on a written request signed by the President, to the Executive Office of the President or head of a Federal agency for certain appointments. See IRM 11.3.30, Disclosure to the President, for instructions concerning disclosures of return and return information to the President or specified White House employees, or IRC §6103(h)(1) based on Department of the Treasury's tax administration responsibility to ensure current and prospective employees and contractors are compliant with their tax obligations. These Tax Checks are conducted within the Human Capitol and Chief Financial Offices The authority for Tax Check disclosures under this chapter is IRC §6103(c) and 26 CFR §301.6103(c)-1. Due to the sensitivity or high profile nature of some Tax Check cases, delegated authority to sign certain responses may supersede Delegation Order 11-2, found in IRM 1.2.49.3. For example, Tax Check reports on White House requests with adverse findings require Commissioner Office review and approval and are signed by the Disclosure Deputy Associate Director, East or West. Note: Requests for tax compliance checks not described above are worked through routine agency procedures, i.e. mortgage loan requests, state licensing, etc. Disclosure offices should refer requesters to the Transcript Delivery System (TDS) or the campus Return and Income Verification Service (RAIVS) units who are established to handle this type of work. Note: Disclosures of federal tax information to Probation Officers for taxpayers with tax related convictions are typically handled by the Criminal Investigation function based on IRC §6103(h)(4). 11.3.31.1.3 (10-13-2017) Roles and Responsibilities This IRM is used by all IRS employees to comply with the provisions of IRC §6103(c) pertaining to disclosures of Tax Check Reports for Federal Appointees. 11.3.31.1.4 (10-13-2017) Definitions/Acronyms The following is a list of the acronyms that are used in this IRM section: Acronym Definition DOJ Department of Justice EOP Executive Office of the President GLDS Governmental Liaison, Disclosure and Safeguards HQ Headquarters IDRS Integrated Data Retrieval System IRC Internal Revenue Code IRM Internal Revenue Manual PGLD Privacy, Governmental Liaison and Disclosure RAIVS Return and Income Verification Service RO Revenue Officer TDS Transcript Delivery System 11.3.31.2 (10-13-2017) Information Disclosed in Tax Check Reports Generally a Tax Check Report provides the following information to the requester for the years specified in the waiver: Whether the individual has filed federal income tax returns as required? Whether the individual has failed to pay any tax, penalties, and interest within a specified period after notice and demand? Note: The requesting agency will determine the number of years and scope of the Tax Check request. Each agency will state what constitutes "timely" filing and payment in the consent, which may be different from the standards established for IRS employees tax compliance. Reading the consent is critical to ensure the response provides only the years and information that is authorized. Determination of timeliness is based on the consent language. The Disclosure employee must review the waiver for validity. A valid waiver must: Be signed by the taxpayer. Electronic signatures are not acceptable. Have a handwritten date and be received by the IRS within 120 days of the date the taxpayer signed the waiver. Name an authorized individual to receive the information. A listing of authorized individuals can be found on the Disclosure Share Point site. Contain at least two of these three elements: Taxpayer’s Name, Taxpayer’s Address or Taxpayer’s Social Security Number. If our response to any of the above questions in (1) above is yes then we may provide specific details explaining the adverse determination ONLY if the waiver authorizes that disclosure. If the consent does not authorize the release of detailed information, we can only provide Yes/No responses. 11.3.31.3 (10-13-2017) Securing Information for Tax Check Reports The caseworker initiates requests for information needed to prepare Tax Check Reports. Tax Check Transcripts and/or complete transcripts of account are requested from TDS and/or through IDRS. The assigned caseworker will conduct research to gather sufficient information to respond to the request. A Tax Check response is a status report on the taxpayer's compliance concerning federal tax filing and payment. Additional information on research techniques and the correct preparation of responses can be found in the Tax Check Processing Guides on the Disclosure Share Point site. If the data secured in IRM 11.3.31.2 (1)a), shows no record of filing for any or all of the years covered by the waiver and additional research indicates a filing requirement or an outstanding balance, White House, Executive Office of the President (EOP) and Department of Justice (DOJ) requests only will be forwarded to the Director, Collection Policy (HQ) for immediate assignment to a Revenue Officer (RO). (See IRM 5.1.8.5.2 , Tax Checks on Political Appointees and Government Employees.) These DOJ requests are normally political appointments and handled differently than other requests from DOJ. The DOJ, White House, and EOP requests require that the RO contact the taxpayer within 48 hours of receipt. The tax check case will remain open until the return is secured or all efforts to secure the return have been exhausted. In the meantime, an interim response is sent to the White House, EOP or DOJ to advise that we are attempting to contact the taxpayer to determine if a return(s) was filed or to secure the non-filed return(s). This will close the Tax Check case. If the taxpayer indicates that the return was filed, the RO must secure proof of filing such as a canceled check matching the balance due per the taxpayer's retained copy of the return. In the event that the original canceled check cannot be located, a copy must be secured. If such proof is not obtainable, as in the case of a refund return, a copy of the tax return must be secured by the RO for transmission as a "possible duplicate return" to the appropriate Campus based on the taxpayer's address. Note: In failure to file cases, returns should not be solicited without consideration for Criminal Investigation implications. If the RO finds that the return has not been filed, he/she should ascertain whether a return was required to be filed. If a return should have been filed, the RO must secure the return. Note: No summons should be issued without first contacting the Collection Coordinator. If the taxpayer is uncooperative (e.g., fails to respond to calls, fails to meet appointments, and fails to provide documents), that fact along with pertinent details are reported to the Disclosure caseworker. They will make contact with the requesting agency to help secure additional taxpayer cooperation. The caseworker will notify the RO of any additional information obtained from the requesting agency concerning further attempts to contact the taxpayer. Taxpayers are to be advised not to mail delinquent returns to the campuses for processing. Such actions will delay verification of filing. Returns are not to be sent to the Disclosure Office as this action will also delay processing of the original or "possible duplicate return" by the Campus. See (6) above. The results of the taxpayer contact will be reported to the caseworker by secure e-mail. The caseworker will prepare a Tax Check report after the receipt and analysis of all relevant return and return information. The Tax Check Report will consist of a response for each item listed on the waiver. Tax Check Reports are either mailed or faxed to the requester based on procedures established with each requester. More Internal Revenue Manual