3.28.2 Information Referral Process for Form 3949-A

Manual Transmittal

May 18, 2020

Purpose

(1) This transmits revised IRM 3.28.2, Special Processing Procedures, Specialized Screening Process for Specific Form 3949-A Criteria.

Material Changes

(1) IRM 3.28.2.1(2) - Audience, added information about Fresno consolidation and the decision to move the program to Ogden Service Center once Fresno campus is closed.

(2) IRM 3.28.2.1.1(1) - Background, added information about Fresno consolidation and the decision to move the program to Ogden Service Center once Fresno campus is closed.

(3) IRM 3.28.2.1.5(1) - Updated Integrity Verification Operation (IVO) acronym to Return Integrity Verification Operation (RIVO).

(4) IRM 3.28.2.1.7(3) - Reworded sentence for clarity.

(5) IRM 3.28.2.2(1) - Added Business Operating Division sort titles to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(6) IRM 3.28.2.2(2) - SERP Feedback 201904306, reworded paragraph to address ICT research for inconclusive or missing TIN results. IPU 19U1084 issued 10-03-2019.

(7) IRM 3.28.2.2(3) - Added sentence from previous paragraph to address criteria is function appropriate. IPU 19U1084 issued 10-03-2019.

(8) IRM 3.28.2.3.1(3) - Removed extra letters “OI” from Form 2070-A.

(9) IRM 3.28.2.3.3(1) - Inserted new paragraph to define who determines the criteria. IPU 19U1084 issued 10-03-2019.

(10) IRM 3.28.2.3.3(3) - Alpha list (e) - added File Maintenance title when referencing retention. IPU 19U1084 issued 10-03-2019.

(11) IRM 3.28.2.3.3(6) - Clarified when to validate the tax year. IPU 19U1084 issued 10-03-2019.

(12) IRM 3.28.2.3.3(7) - Initial Research. Added the title to IRM 3.10.72.19.2 reference.

(13) IRM 3.28.2.3.3(9) - Added reference to File Maintenance sort and changed sort from "28" to "2" . Updated alpha list reasons for retention to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(14) IRM 3.28.2.3.3(9) - Initial Research. Added title to IRM 3.10.72.19 reference.

(15) IRM 3.28.2.4 - Moved entire section, W&I Campus Exam to replace with SBSE Campus Exam was moved from IRM 3.28.2.12, to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(16) IRM 3.28.2.4.1 - Updated cross reference links in paragraph one and two to IRM 3.28.2.5.1 to be consistent with section changes, for W&I Campus Exam. IPU 19U1084 issued 10-03-2019.

(17) IRM 3.28.2.4.1 - SERP Feedback 202000329, Removed Section, Dependent without Earned Income Tax Credit (EITC) for Tax Year 2017 and prior years criteria, SERP Feedback 2020. New section is Dependent without Earned Income Tax Credit (EITC) Current Processing Tax Year (2019) and the prior tax year (2018). IPU 20U0243 issued 02-07-2020.

(18) IRM 3.28.2.4.1(2) - Updated W&I Campus Exam language to specify which tax years should be reviewed for EITC. IPU 19U1026 issued 09-09-2019.

(19) IRM 3.28.2.4.1(2)(a) - Dependent without Earned Income Tax Credit, added title to IRM 3.28.2.5.1 reference.

(20) IRM 3.28.2.4.2 - SERP Feedback 202000329, Section Dependent without Earned Income Tax Credit (EITC) Tax Year 2018 and Subsequent years was moved and renamed to reflect in IRM 3.28.2.4.1. New Section is Non-Filer Criteria. Criteria has changed to current processing year and the prior tax year. Added examples and clarified the steps. IPU 20U0243 issued 02-07-2020.

(21) IRM 3.28.2.4.2 - SERP Feedback 202000327, Non-Filer Criteria was moved to IRM 3.28.2.4.2 as a result of removing criteria for Dependent without Earned Income for 2017 and prior years. Clarified the referrals are only for Individual Tax Returns, IRPTRJ calculations are for a single year. Clarified filing considerations when Substitute returns are filed, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, removed reference to spouse TIN filing of the past five years posted. IPU 20U0243 issued 02-07-2020.

(22) IRM 3.28.2.4.2 - SERP Feedback 202000174, clarified how to process when CC IRTPRJ data not available. IPU 20U0243 issued 02-07-2020.

(23) IRM 3.28.2.4.2(1) - Non-Filer Criteria, clarified to follow processing instructions for IRM 3.28.2.6 when Non-Filing criteria does not exist.

(24) IRM 3.28.2.5 - Moved entire section, Return Preparer to replace with W&I Campus was moved from IRM 3.28.4, to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(25) IRM 3.28.2.5.1(2) - SERP Feedback 201904310 removed prior years and used subsequent. IPU 19U1084 issued 10-03-2019.

(26) IRM 3.28.2.5.1(4) - Updated cross reference links to be consistent with section changes, for SBSE Campus Exam. IPU 19U1084 issued 10-03-2019.

(27) IRM 3.28.2.5.1(4) - SERP Feedback 202000329, Removed link to IRM 3.28.2.4.2 from paragraph due to removing criteria for Dependent without Earned Income Tax Credit (EITC) for 2017 and prior years. IPU 20U0243 issued 02-07-2020.

(28) IRM 3.28.2.5.1(4) - Dependents and EITC Criteria, added title to IRM 3.28.2.4.1 reference.

(29) IRM 3.28.2.6 - Moved entire section, Frivolous or Tax Avoidance to replace with SBSE Field Exam was moved from IRM 3.28.2.13, to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(30) IRM 3.28.2.6(3) - Issue Identification Small Business/Self Employed (SBSE) Field Exam, updated link to correctly reflect Non-Filer. Updated from IRM 3.28.2.4.3 to IRM 3.28.2.4.2 and added IRM title. Clarified to follow processing instructions for IRM 3.28.2.4.2 when tax account is not established.

(31) IMF 3.28.2.6(4) - Small Business/Self Employed Field Exam, paragraph F, clarified to follow processing instructions in IRM 3.28.2.9.1 for cases related to Issue Identification Employment Tax.

(32) IRM 3.28.2.6(5) - Note was updated to remove sort 30a and added IRM 3.10.72.19 to refer for more information. IPU 20U0243 issued 02-07-2020.

(33) IRM 3.28.2.6.1(1) - Frivolous sort, clarified actions needed when "-L" freeze is present. IPU 19U1026 issued 09-09-2019.

(34) IRM 3.28.2.6.1(5) - Frivolous sort clarified procedures to continue with sort once frivolous criteria is identified. IPU 19U1026 issued 09-09-2019.

(35) IRM 3.28.2.6.1(6) - Fraudulent Income, revised instructions to include criteria and match title of IRM 3.10.72.19.2. IPU 19U1026 issued 09-09-2019.

(36) IRM 3.28.2.7 - Moved entire section, Collection Policy to IRM 3.28.2.11, to be in consistent order with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(37) IRM 3.28.2.7(1) - Clarified IRS Criminal Investigation purpose.

(38) IRM 3.28.2.7(2) - Collection Policy, provided additional guidance regarding referral content and tax years. IPU 19U1026 issued 09-09-2019.

(39) IRM 3.28.2.7(2) - Changed title from CI Refund Crime to CI Financial Crime and removed unreported income from the acceptance criteria.

(40) IRM 3.28.2.7(3) - Collection Policy, clarified how to identify collection assignments. IPU 19U1026 issued 09-09-2019.

(41) IRM 3.28.2.7.1 - Changed the title from CI Refund Crimes to CI Financial Crimes.

(42) IRM 3.28.2.7.1(3) - Criminal Investigation, clarified the criteria. IPU 20U0243 issued 02-07-2020.

(43) IRM 3.28.2.7.1(4) - Criminal Investigation, added IRM title for reference to IRM 3.28.2.6 and added IRM reference for LB&I. Clarified to follow processing instructions when appropriate.

(44) IRM 3.28.2.7.2(1) - Updated CI title from Refund to Financial Crimes. Clarified bullet conditions.

(45) IRM 3.28.2.7.2(2) - Updated If and Then table, to update all references from CI Refund Crime to CI Financial Crime. Updated o reflect examples for table input IF lines 1 and 2.

(46) IRM 3.28.2.7.2(2) - Criminal Investigation, clarified the IF and Then table criteria. IPU 20U0243 issued 02-07-2020.

(47) IRM 3.28.2.8 - Moved entire section, LB&I to add new section for RICS/RIVO Fraudulent Income Documents, to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(48) IRM 3.28.2.9(2)(c) - Form 720 title, listed as Estate Tax Form 720. Corrected title to Excise Tax Form 720.

(49) IRM 3.28.2.9.1(3) - Issue Identification Employment Tax. Added IRM title to 3.28.2.6 IRM reference, clarified to follow processing instructions when under-reporting issue.

(50) IRM 3.28.2.9.2(3) - Issue Identification Estate Tax and Gift Tax. Added IRM title to 3.28.2.6 IRM reference, clarified to follow processing instructions when deceased. .

(51) IRM 3.28.2.10 - Removed TEGE sort criteria from screener process. Moved entire section, Frivolous or Tax Avoidance from IRM 3.28.2.6, to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(52) IRM 3.28.2.10 - SERP Feedback 202000500, Updated Frivolous or Tax Avoidance language to clarify frivolous categories. IPU 20U0243 issued 02-07-2020.

(53) IRM 3.28.2.10.1 - SERP Feedback 202000500, Updated Frivolous or Tax Avoidance language to clarify criteria. IPU 20U0243 issued 02-07-2020.

(54) IRM 3.28.2.10.1(1)(a) - Frivolous or Tax Avoidance, added IRM title to IRM 3.28.2.6 reference.

(55) IRM 3.28.2.10(3) - Removed link and change to use the following instructions instead. IPU 19U1084 issued 10-03-2019.

(56) IRM 3.28.2.10.1(1) - corrected IRM reference to reflect new section was IRM 3.28.2.13 and is now IRM 3.28.2.6. IPU 19U1084 issued 10-03-2019.

(57) IRM 3.28.2.10.1(2) - corrected IRM reference to reflect new section was IRM 3.28.2.13 and is now IRM 3.28.2.6. IPU 19U1084 issued 10-03-2019.

(58) IRM 3.28.2.10.1(3) - Added additional key words to review on referral for Frivolous/Tax Avoidance criteria. IPU 19U1084 issued 10-03-2019.

(59) IRM 3.28.2.10.1(4) - Removed instruction to review bank account information. IPU 19U1084 issued 10-03-2019.

(60) IRM 3.28.2.10.1(5) - Removed reference to Form W-2 to avoid confusion with new RICS/RIVO sort. IPU 19U1084 issued 10-03-2019.

(61) IRM 3.28.2.10.1(6) - Removed instructions to change sort to "2e" and added reference to follow RICS/RIVO IRM 3.28.2.8 for additional information. IPU 19U1084 issued 10-03-2019.

(62) IRM 3.28.2.11 - Moved entire section, Referrals to CI to replace with Collection Policy was moved from IRM 3.28.2.7 to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(63) IRM 3.28.2.11(5) - Updated IRM link from IRM 3.28.2.13 to IRM 3.28.2.6 to be consistent with section changes. IPU 19U1084 issued 10-03-2019.

(64) IRM 3.28.2.11(5) - Collection Policy, note, added IRM title to IRM 3.28.2.6 reference and clarified to use with processing instructions when not related to collection but rather to outstanding liabilities.

(65) IRM 3.28.2.12 - Moved entire section, SBSE Campus Exam to Large Business and International was moved from IRM 3.28.2.8, to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(66) IRM 3.28.2.12.1(4) - Updated IRM link from IRM 3.28.2.13 to IRM 3.28.2.6 to be consistent with section changes. IPU 19U1084 issued 10-03-2019.

(67) IRM 3.28.2.12.1(4) - Issue Identification LB&I, added IRM title to IRM 3.28.2.6 reference. Clarified to follow the processing instructions when BOD code is not related to LM.

(68) IRM 3.28.2.13 - Moved entire section, SBSE Field Exam to Return Preparer was moved from IRM 3.28.2.5, to be consistent with IRM 3.10.72. IPU 19U1084 issued 10-03-2019.

(69) IRM 3.28.2.13(1) - Added acronym for Return Preparer Office.

(70) IRM 3.28.2.13(3) - Return Preparer, clarified the Form 14157-A process to send back to ICT.

(71) IRM Section title change from Information Referral Process for Form 3949-A, Information Referral to Specialized Screening Process for Specific Form 3949-A Criteria.

(72) Editorial Changed made throughout IRM.

Effect on Other Documents

The material supersedes IRM 3.28.2 dated July 19, 2019 (Effective Date 08-01-2019). The following IRM Procedural Updates (IPUs) between September 9, 2019 through February 7, 2020, have been incorporated into this IRM: 19U1026 (09-09-2019), 19U1084 (10-03-2019), 20U0243 (02-07-2020).

Audience

Input Correction Operation personnel, Wage and Investment, Submission Processing Fresno Campus

Effective Date

(08-01-2020)


James L. Fish
Director, Submission Processing
Wage and Investment Division

Program Scope and Objectives

  1. Purpose:. This Internal Revenue Manual (IRM) section contains instructions for procedures of the technical review process for routing and intake of the Form 3949-A, Information Referral.

    1. Describes the research involved for each pre-determined sort of the Form 3949-A requiring Integrated Data Retrieval System (IDRS) research based on the request of the receiving Business Operating Division (BOD).

    2. Establishes the BOD requirements to allow research and authenticate the credibility of the submission of Form 3949-A.

  2. Audience: These procedures apply to Wage and Investment (W&I) Submission Processing Input Corrections Operations (ICO) Notice Review Tax Examining Technician personnel located in Fresno and Ogden. Due to the decision to consolidate additional campuses in Submission Processing, Fresno Campus will close in 2021. The Form 3949-A Information referral program will transition to the end state site Ogden Processing center.

  3. Policy Owner: Director of Submission Processing.

  4. Program Owner: The Post Processing Section of the Specialty Programs Branch in Submission Processing.

  5. Primary Stakeholders: The primary stakeholders are the Tax Examiners (TEs) who rely on the IRM for accurate processing procedures related to the screening process of Form 3949-A. Other areas that may be affected by these procedures include:

    • Large Business and International (LB&I)

    • Return Preparer Office (RPO)

    • Small Business/Self Employed (SBSE) Field Exam

    • Small Business/Self Employed (SBSE) Campus Exam

    • Wage and Investment (W&I) Campus

    • Specialty Tax

    • Tax and Government Entities (TEGE)

    • Image Control Team (ICT)

    • Exempt Organization (EO)

    • Criminal Investigation (CI)

    • Collection Policy

    • Frivolous or Tax Avoidance

  6. Program Goals: To reduce the number of mis-routing or routing out nonspecific or non-credible tax violation allegations that do not warrant the submission meets examination standards of other Business Operating Divisions (BODs).

Background

  1. The production of this IRM is to provide instructions to screen individual and/or business allegations on Form 3949-A for factual potential tax violations. The IDRS research involves tax module analysis to warrant the submission meets examination standards based on criteria submitted from the receiving BODs. This BOD support will reduce the number of unfounded allegations and mis-routes. Input Correction Operation, Notice Review Tax Examiners in the Fresno Submission Campus will conduct the research. Due to the decision to consolidate additional campuses in Submission Processing, Fresno Campus will close in 2021. The Form 3949-A Information referral program will transition to the end state site Ogden Processing center.

Authority

  1. Title 26 of the United States Code (USC) 7801 and Code section 6103.

Responsibilities

  1. Submission Processing, Specialty Programs Branch, Post Processing Section is responsible for the content in this IRM. The IRM Author will make changes as needed and revise entire content once a year effective August 1st of each calendar year.

  2. The Director of Submission Processing is responsible for policy related to this IRM.

  3. The Post Processing Section manager is responsible for ensuring the IRM is timely submitted to Publishing each year.

Program Management and Review

  1. Managers are responsible for ensuring quality reviews are performed and recorded in the Embedded Quality for Submission Processing (EQSP) System for Information Referrals screened by the tax examiners. See IRM 3.30.30, Embedded Quality for Submission Processing (EQSP) System.

  2. Managers will monitor referrals returned to Image Control Team (ICT) and record the date, quantity, area and reason the referral was returned.

  3. Managers must ensure internal control responsibilities are carried out in relation to Separation of Duties. Key duties and responsibilities in authorizing, processing recording, reviewing transactions and handling related assets (e.g., preparing inventory reports), must be separated among individuals to reduce the risk of error or fraud. No one individual should control all key aspects of a transaction or event.

Acronym Definitions

  1. A list of some of acronyms used in this IRM are found below. This list is not all inclusive. For details on other acronyms, please refer to the http://rnet.web.irs.gov/Resources/Acronymdb.asp.

    ACRONYM DEFINITION
    BOD Business Operating Division
    BMF Business Master File
    CC Command Code
    CI Criminal Investigation
    EITC Earned Income Tax Credit
    EO Exempt Organization
    FRP Frivolous Return Program
    FYM Fiscal Year Month
    IDRS Integrated Data Retrieval System
    IMF Individual Master File
    ITG Indian Tribal Government
    RIVO Return Integrity and Verification Operation
    LB&I Large Business and International
    MFT Master File Tax Code.
    OFP Organization, Function and Program Code.
    OIC Offer In Compromise
    RICS Return Integrity and Compliance Services
    SBSE Small Business/Self Employed
    TEGE Tax Exempt and Government Entities
    TIGTA Treasury Inspector General for Tax Administration
    TIN Taxpayer Identification Number is a number used to identify an individual or business entity. It can be a:
    • Social Security Number (SSN)

    • IRS Number (IRSN)

    • Individual Taxpayer Identification Number (ITIN)

    • Adoption taxpayer Identification Number (ATIN)

    • Employee Identification Number (EIN)

    W&I Wage and Investment
    SERP Servicewide Electronic Research Program
    SP Submission Processing

Related Resources

  1. The following IRMs and publications are used in conjunction with this IRM section:

    • IRM 1.11.2, Internal Management Document System, Internal Revenue Manual (IRM) Process

    • IRM 2.3, IDRS Terminal Responses

    • IRM 2.4, IDRS Terminal Input

    • IRM 3.10.72, Receiving, Extracting and Sorting

Internal Revenue Manual (IRM) Deviations

  1. Service Center Directors, Headquarters Branch Chiefs, and Headquarter Analysts do not have the authority to approve deviations from IRM procedures. Any request for an exception or deviation to an IRM procedure must be elevated through appropriate channels for executive approval. This will ensure other functional areas are not adversely affected by the change, and it does not result in disparate treatment of taxpayers.

  2. See specific guidelines in IRM 1.11.2, Internal Management Documents System, Internal Revenue Manual (IRM) Process. Request for an IRM deviation must be submitted in writing and signed by the Field Director, following instructions from IRM 1.11.2.2.4, when procedures deviate from the IRM.

  3. The Program Owner will coordinate any disclosure issues. No deviations can begin until reviewed by the Program Owner and approved at the Executive Level. All requests must be submitted to the Submission Processing Headquarters IRM Coordinator.

Research

  1. Information Referrals with the following Business Operating Division (BOD) criteria will be routed for additional screening from the ICT function to Notice Review. The BODs are also identified in the IRM 3.10.72.19.2 , Form 3949-A Information Referral Routing Guide.

    1. SBSE Campus Exam

    2. W&I Classification - W&I Exam

    3. SBSE Field Exam

    4. CI Financial Crimes

    5. RICS/RIVO

    6. Specialty Tax

    7. Frivolous or Tax Avoidance

    8. Collection Policy

    9. LB&I

  2. If the referral allegation leads to additional screening and the TIN is missing or incomplete. ICT will conduct the initial research for the TIN of the reported individual or business and notate the TIN on the referral in red. If the research results were inconclusive, ICT will continue to route to Notice Review for further research of the missing TIN. Conduct IDRS research to verify or find the TIN. If the TIN is not correct or could not be located, the referral should be placed in File Maintenance, retention. For information on File Maintenance see IRM 3.28.2.3.3, Initial Research.

  3. Ensure the criteria is function appropriate prior to routing. Read the referral allegation in conjunction with the selected criteria in the referral and determine the BOD to follow criteria to compare on IDRS against Form 3949-A , Information Referral. Use http://serp.enterprise.irs.gov/databases/irm-sup.dr/job_aid.dr/command-code.dr/idrs_command_codes_job_aid.htm for assistance (e.g., command codes INOLE, RTVUE, BMFOL, IRPTR, ENMOD), which is available on Servicewide Electronic Research Program (SERP).

  4. Submission Processing (SP) officials and managers must communicate security standards to their employees and establish methods for enforcement. Refer to IRM 1.4.6, Managers Security Handbook, for more information.

  5. Employees are responsible for taking the required precautions to provide security for documents, information and property handled while performing official duties.

Authorized Integrated Data Retrieval System (IDRS) Access

  1. The modules accessed on IDRS is only permitted to accomplish the official duties of the examiner.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

What is Form 3949-A?

  1. The Form 3949-A is a tax related public use form submitted voluntarily by customers to report alleged violations of tax law by individuals and businesses to the IRS and remain confidential.

  2. Specific information provided may be helpful in an investigation and may include who is being reported, the type of activity being reported and how it became known, when the alleged violation (s) took place, the amount of money involved.

  3. The tax violations may involve:

    • False Exemption

    • False Deductions

    • Multiple Filings

    • Organized Crime

    • Unsubstantiated Income

    • Earned Income Credit

    • Public/Political Corruption

    • False/Altered Documents

    • Unreported Income

    • Narcotics Income

    • Kickback

    • Wagering/Gambling

    • Failure to Withhold Tax

    • Failure to Pay Tax

    • Failure to File Return

    • Other

Issue Identification

  1. Form 3949-A is used to report potential tax violations but does not have to be included when reporting a tax violation. When Form 3949-A is submitted, the submissions will be pre-sorted by ICT using Section B 3 “Alleged Violation” and/or keywords/key phrases in Section B 5 on Form 3949-A. When the Form 3949-A is not included, the submission will be reviewed for TIN and key phrases by the ICT function. Refer to IRM 3.10.72.19.2, Information Referral Routing Guide for more information.

    Note:

    Not all Information Referrals are subject to additional screening and will not be addressed in this IRM. IRM 3.10.72.19.2, Information Referral Routing Guide, outlines which Information Referrals are routed to Notice Review for additional screening.

  2. Consider each form on its own merit when multiple Forms 3949-A are attached.

  3. TIGTA-Office of Investigations (OI) Complaint Management Team (CMT) forwards complaints involving issues that relate to IRS operations or personal/business tax-related issues that contain no potential for disciplinary action against an IRS employee, or any other reason to track the IRS disposition of the complaint, to Employee Conduct and Compliance Office (ECCO) via a Complaint Referral Memorandum Form 2070-A. These Referrals are to be screened using the same criteria as Form 3949-A when referred by ICT.

  4. Review the submission against IDRS to determine whether the submission contains specific and credible data for a potential federal tax issue.

  5. If analysis disproves the allegation as factual, return to ICT for retention procedures.

Multiple Issue Identifications

  1. Identify multiple issues and determine if it involves multiple BODs.

  2. If the issues identified concern multiple BODs, identify all BODs

    1. If analysis disproves the authenticity on one sort, continue with analysis to authenticate all issues.

  3. If multiple issues are involved and criteria is authenticated as Criminal Investigation (CI), send to CI.

  4. If multiple issues involve both Small Business/Self Employed (SBSE) campus and SBSE field, send to SBSE field.

  5. Multiple issues involving more than one BOD:

    • If BODs are LM and SB, send to LB&I.

    • If BODs are TE and SB, send to SBSE Field.

    • If unable to determine, refer to the lead.

Initial Research

  1. Each BOD determines the acceptance criteria of the Information Referral. Criteria differs for each sort and should be followed as outline in the IRM.

  2. Use the initial research steps on all issues.

  3. The Notice Review screener will use green pencils on the referral to indicate:

    1. The screener identification

    2. The date researched

    3. Sort change, circle out incorrect sorts

    4. PBC or MFS

    5. If sending to File Maintenance, retention document findings as instructed in paragraph 9 below

  4. Using IDRS, validate the taxpayer or business matches the Form 3949-A. Perform additional research to identify and validate the taxpayer, spouse or business. If TIN identification cannot be made, return to ICT for retention.

  5. Some categories require validation of the appropriate responsibility for the account by reviewing the BOD. The following describes the BOD code and defines the organization.

    • LM - LB&I Large Business and International

    • WI - Wage and Investment

    • SB - Small Business/Self Employed

    • TE - Tax Exempt/Government Entity

  6. Validate the tax year, if BOD criterion is applicable on Form 3949-A, using IDRS or as instructed in the specific sort.

  7. If the allegation is not addressed in this IRM, review IRM 3.10.72.19.2, Form 3949-A Information Referral Routing Guide. Return incorrect sorts to the ICT team to route appropriately. For example, if the sort submission contains a request for a reward or Form 211, Application for Award For Original Information, is attached the submission should have been routed directly to Whistleblower Office from ICT, return to ICT informing the team of the correct sort.

  8. If verification of the taxpayer, business or allegation cannot be made, no other issues are listed in the information referral, and/or the criteria is not met, return the case to the ICT team for retention. Do not identify any possible tax violations that are not relevant to the allegation indicated in the Information Referral.

  9. File Maintenance, retention files are maintained in ICT per IRM 3.10.72.19, Form 3949-A Information Referral Program. Specify one of the reasons listed below and write ”2” on the Information referral as to why the case is placed in retention.

    1. No TIN

    2. Child Support

    3. No tax issue

    4. Tolerance not met

Issue Identification Small Business/Self Employed (SBSE) Campus Exam

  1. SBSE Campus Examination Operations support administration of tax law by selecting returns to audit. The primary objective is to promote the highest degree of voluntary compliance on the part of the taxpayers.

  2. The National Office Tax Compliance Officer (TCO) and Revenue Agent (RA) Classification Guidelines can be found at:http://mysbse.web.irs.gov/examination/tip/classification/default.aspx.

  3. Research IDRS CC IMFOL to verify filing.

  4. Research IRPTR with definers “J” to find the approximate balance due.

Dependent without Earned Income Tax Credit (EITC) for Current Processing Tax Year and the prior tax year

  1. Dependent without Earned Income Tax Credit (EITC) criteria only applies to current processing tax year or the immediate prior tax year when the year is specified. If the allegation does not list a tax year, consideration should only be made to the current processing tax year. If the tax year listed is not the current processing tax year or the immediately prior tax year (when specifically addressed in the referral), review the allegation to determine if other BOD criteria exists.

    Note:

    Due to processing timeframes, the review may not include the current processing year. If validation cannot be made, follow normal processes to review for other BOD criteria. Consideration to the submission date would also determine which tax year is considered current and/or prior.

    Example:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Example:

    If the referral was submitted in January and reviewed in March of the same year and the taxpayer has not filed, go to paragraph 4.

  2. Ensure the following transactions are not present on the module. Review IDRS using command code (CC) IMFOL with definer "T" to rule out the following criteria.

    1. Ensure EITC is not present (no posted unreversed TC 764/768). If EITC is present on a year that meets the Dependents and EITC Criteria, remove from sort and follow procedures using IRM 3.28.2.5.1, Dependents and EITC criteria.

    2. Ensure TC 766 is not present (no posted unreversed TC 766). If TC 766 is present, go to paragraph 4.

  3. After validating there is no EITC or TC 766 present on the module, use IDRS CC’s RTVUE and DDBKD.

    1. View the Child or Other Dependent credit, Line 12A (2018) or Line 13A (2019) on CC RTVUE. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Check for duplicate dependent TIN’s by using CC DDBKD. If duplicate dependent is identified, continue routing to SBSE Campus Exam.

    3. If the Child or Other Dependent Credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, review the allegations to determine no other BOD criteria exists.

  4. If no other criteria exist, route to ICT for Retention.

Non-Filer Criteria

  1. When the allegation consists of Under reporting or Non-Filing/Paying of taxes for an Individual Tax Return, review the tax module to determine if the alleged has filed. If the research reveals the alleged has filed all years 2014- 2017, follow processing instructions for Under reporting, see IRM 3.28.2.6, Issue Identification Small/Business/Self Employed (SBSE) Filed Exam. If the alleged has not filed, follow Non-Filer Criteria research. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Note:

    Only consider Non-filer criteria if the referral mentions under-reporting or non-filing/paying of taxes.

    Example:

    If the referral contains dependent allegation, do not refer if research reveals a year has not been filed.

  2. Do not refer cases that are not related to Individual Tax Returns. For corporations, sub chapter S corporations and partnerships, remove from sort and follow procedures in IRM 3.28.2.12.1, Issue Identification LB&I.

  3. When CC IMFOL with definer "I" Posted Return Value is SUBST4 for a particular year, consider that year as a filed year.

  4. When the research confirms the taxpayer has not filed and leads to the following, do not refer the reports of Non-Filers, remove from sort and route to ICT for retention as a non-tax issue.

    • Deceased taxpayers do not qualify as a Non-Filer issue

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Substitute for Return (SFR) balance due is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • CC IRPTR with definer "J" is not available (e.g. ITIN)

  5. Referral research may include spousal information.

    • Obtain spouse TIN information

    • Review the filing status codes to determine if filing was completed as possible secondary/spouse filing

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Check IMFOL with definer "T" on alleged taxpayer to validate the TIN cross reference

  6. Use CC IRPTR with definer “J” for calculations of SFR balance due on the first non-filed year.

  7. Once ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ additional research of any years is not required. Continue routing to SBSE Campus.

  8. If the taxpayer has filed, review the allegation to determine no other BOD criteria exists, follow procedures for the other criteria to determine sort. If not other criteria is met, remove from sort and route to ICT for retention as a non-tax issue.

Issue Identified W&I Campus Exam

  1. W&I Campus Examination Operations supports administration of tax law by selecting returns to audit. The primary objective is to promote the highest degree of voluntary compliance on the part of the taxpayers.

Dependents and EITC Criteria

  1. When the year is specified, Dependents with Earned Income Tax Credit (EITC) criteria only applies to current processing tax year or the immediate prior year. If the allegation does not list a tax year, consideration should only be made to the current processing tax year. If the tax year listed is not the current processing tax year or the immediate prior tax year (when specifically addressed in the referral), review the allegation to determine if other BOD criteria exists.

  2. Conduct Initial review for selected referrals..

  3. Research IDRS using command code (CC) IMFOL with definer “T” to verify that the tax year contains a posted, unreversed, TC 764 and/or TC 768, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  4. If there is a posted, unreversed, TC 764 and/or TC 768,≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ continue processing as W&I Campus Exam criteria.

  5. For referrals that do not meet W&I criteria, refer to IRM 3.28.2.4.1, Dependent without Earned Income Tax Credit (EITC) for Current Processing Tax Year and the prior tax year to determine if allegation meets SBSE Campus Exam criteria..

Issue Identification Small Business/Self Employed (SBSE) Field Exam

  1. Conduct IDRS research to verify the criteria is for SBSE Field Exam matches the pre-determined sort for the Form 3949-A.

    1. Research IMFOL or BMFOL to verify filing and determine the fiscal year month of the taxpayer.

    2. If a filed return is on the module, research RTVUE, BRTVU, TRDBV or Modernized e-File (MeF) to review the return for overall omission of the allegations stated on Form 3949-A

    3. Research Referrals with (-L) Freeze on the module. Use IDRS CC AMDIS with definer A to look at the status codes. Print AMDISA and attach to the front of the referral.

    4. If the status code is 10 through 44, highlight the Primary Business Code (PBC) on the AMDISA print. Attach the AMDISA print to the front of the referral. Indicate the routing PBC on the AMDISA print using the PBC listing in paragraph 6 below.

    5. If status is 80 through 82, notate “Appeals audit control” on CC AMDIS print. Attach AMDISA print to the front of the referral. Indicate the routing PBC on the AMDISA print using the PBC listing in paragraph 6 below.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡. If it can be determined it is below tolerance, see paragraph 6 below.

  3. When an (-L) Freeze is not present or tolerance cannot be determined, access CC INOLE with definer S and print the Entity. Attach the print to the front of the referral. Indicate the routing PBC on the INOLES print using the PBC listing in paragraph 6 below. If the taxpayer account has not been established use the address on the Information Referral to determine the PBC.

    Note:

    If the taxpayer account is not established, refer to processing instructions in IRM 3.28.2.4.2, Non-Filer criteria before determining SBSE Field Exam criteria.

  4. Use the “IF Then” chart below when specific criteria is in the referral:

    If ... Then ...
    A. Allegation contains Self-Employed or Independent Contractor (sale of goods or services, selling or working out of home) Research for business filing. Determine if return appears to be under-reported. Follow the dollar criteria. Indicate the PBC on the print using the PBC Chart below.
    B. Allegation contains Tip Income Unreported Look for Form W-2 data containing Allocated tips on IRPTR ”I” Field 11 or box 8 on the Form W-2, if attached. If tips data is blank, it could be an Indication of possible unreported tips on any business that would normally have tips for employees i.e., restaurants, delivery services, drivers, hair stylists. Follow the dollar criteria. Indicate the PBC on the print using the PBC Chart below.
    C. Trust or Trustee Issues Research for Form 1041 filing requirements on Trusts. For trustee income look at IRPTR. Follow the dollar criteria. Indicate the PBC on the print using the PBC Chart below.
    D. Capital Gain (insider trading) Research IRP for trade documents if the capital gain is related to stock investment. If other types of capital gains or is related to business capital being sold. Indicate the PBC using the PBC Chart and INOLE.
    E. Corporation Issues Indicate the PBC using the PBC Chart and INOLE.
    F. Employment Tax (Form 1099 series ) Unreported Income Research for filing of a business and determine if return appears to be under-reported. If Form W-2 versus Form 1099 issue. Follow processing instructions in IRM 3.28.2.9.1, Issue Identification Employment Tax Specialty.
    G. Farm issues Research for Schedule F. Indicate the PBC using the PBC Chart and INOLE.
    H. Investments of any kind, other than stock trades (see Capital Gain) Indicate the PBC using the PBC Chart and INOLE.
    I. Kickbacks to an individual or business Indicate the PBC using the PBC Chart and INOLE.
    J. Lease/Rental Property or Landlord issues Research for a Schedule E. If rental property is a house with high rents or more than one house, an apartment building or numerous properties and not filing a Schedule E. Follow the dollar criteria. Indicate the PBC on the print using the PBC Chart below.
    K. Cash Payments (off the books, under the table, bartering, etc.) Research for unreported income. Follow the dollar criteria. Indicate the PBC on the print using the PBC Chart below.
    L. Sale of Property (except in Foreign Country) Research for unreported sale. Follow the dollar criteria. Indicate the PBC on the print using the PBC Chart below.
    M. Offshore or Foreign income issues and income in the United States Research for unreported income. Follow the dollar criteria. Indicate the PBC on the print using the PBC Chart below.
  5. Pre-determine the routing PBC on each case, indicate the PBC on the AMDIS or INOLE print in the upper right hand corner of the print. Utilize the SBSE Field Exam PBC Listing table below to determine the PBC based on the corresponding state, (California residents are sorted by state and zip code) for the taxpayer and indicate the appropriate PBC on the print.

    AREA NAME PBC STATES CA ZIP CODE BREAKDOWN
    North Atlantic 201 CT, MA, ME, NH, NJ, NY, RI, VT  
    Central 202 DC, DE, IN, KY, MD, OH, PA, TN, VA, WV  
    South Atlantic 203 FL, GA, NC, SC, Puerto Rico, U.S. Virgin Islands  
    Midwest 204 IA, IL, KS, MI, MN, MO, ND, NE, SD, WI  
    Gulf States 205 AL, AR, LA, MS, OK, TX  
    Western 206 AK, CO, ID, MT, NV, OR, UT, WA, WY, CA (See zip code breakdown for CA) 94000-96199 and 93620, 93623, 93635, 93661, 93665(default PBC when CA zip code is not available or undeterminable)
    Southwest 207 AZ, HI, NM, CA (See zip code breakdown for CA) 90000-93999 and 95004, 95012, 95023, 95024, 95039, 95043, 95045, 95075 and 96107

    Note:

    If the address is a foreign address other than Puerto Rico or U.S. Virgin Islands, route to ICT to send to LB&I IIC. Refer to IRM 3.10.72.19, Form 3949-A Information Referral Program, for more information.

  6. If the criteria above is not met or it is below the threshold and no other issues are involved, remove from sort and route back to ICT for retention.

Referrals to CI

  1. IRS Criminal Investigation (CI) supports administration of tax law by investigating high impact tax fraud and other financial fraud and referring these investigations to the United States Attorneys Office (USAO) for prosecution. These financial crimes include, but are not limited to, employment tax cases, schemes involving identity theft, abusive return preparer schemes, and narcotics and money laundering.

  2. CI Financial Crimes accepts allegations of domestic and international unreported income, due to intentional unlawful actions impacting a considerable number of taxpayers, embezzlement or foreign tax, etc.

  3. All (-Z) Freeze accounts are referred to CI.

Issue Identification IRS CI Financial Crimes

  1. Research IDRS CC INOLE with definer “S” to verify the taxpayer.

  2. Research IDRS CC INOLE with definer “S” to see the http://serp.enterprise.irs.gov/databases/irm.dr/current/6209.dr/6209ch07.8.htm of the alleged taxpayer or business.

  3. Research IDRS CC IRPTR. Unreported income not resulting from Form W-2 wages and understatement of income is in ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, send to CI.

  4. If income is reported ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, remove the referral from the sort. Review the BOD code on CC INOLES. If the BOD code is (SB), refer to processing instructions for IRM 3.28.2.6, Issue Identification Small Business/Self Employed (SBSE) Field Exam. If the BOD code is (LM), refer to processing instructions for IRM 3.28.2.12, Large Business and International (LB&I). Indicate the appropriate BOD code on the referral.

Unreported Income criteria

  1. If the allegation of unreported income on Form 3949-A is verified through IDRS for the following conditions below, accept the sort as CI Financial Crimes.

    • Fraud Rings or Conspiracy (2 or more people acting together)

    • Organized Crime

    • Refund Schemes involving multiple taxpayers (may include false/altered documents such as Form W-2 or Form 1099 series)

    • Abusive transactions or allegations of assisting US persons to hide assets overseas, or US persons alleged to be involved in criminal activity overseas irrespective of dollar amounts or years involved

    • Indication of contact with CI but (-Z) freeze is not on Master file account

  2. Use the following If And Then table to determine the correct sort

    If ... And ... Then ...
    1. Allegation includes cash sales (

    Example:

    realtor or other commissions

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ The criteria is met continue with routing to CI Financial Crimes.
    2. Allegation includes cash sales

    Example:

    realtor or other commissions

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Review and sort based on BOD code.
    Under-reported income SBSE Field Exam (SB)
    Corporate or Partnership LB&I (LM)
    3. Allegation includes embezzlement Referral contains no mention of prosecution The criteria is met continue with routing to CI Financial Crimes.
    4. Allegation includes embezzlement Referral contains mention of prosecution Do not change sort number, instead sort using SBSE Field Exam criteria and PBC Listing table, refer to IRM 3.28.2.6 .
    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Income is not due to a wage income (Form W-2) The criteria is met continue with routing to CI Financial Crimes.
    6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Income is due to a wage income (Form W-2) Do not change sort number, instead sort using SBSE Field Exam criteria and PBC listing table regardless of BOD Code. Refer to IRM 3.28.2.6 .
    7. Domestic and/or International allegations ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ The criteria is met continue with routing to CI Financial Crimes.
    8. Foreign Tax Allegation to be promoting offshore
    • Foreign banks

    • Financial advisors

    • Attorneys

    • Accountants/bankers

    Accept as CI Financial Crimes sort
    9. ID Theft listings
    • List of victims

    • List of TINS

    • Multi-years on and has direct tax implications

    • Includes a Jurat on the signature line for supporting that purpose and fact

    The criteria is met continue with routing to CI Financial Crimes.
    10. Referrals requiring coordination
    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Badges of fraud

    • Current/Former employee

    • Attorney/Client Privilege

    • Identity Theft or Refund Schemes related to a substantial number of taxpayers

    The criteria is met continue with routing to CI Financial Crimes.

RICS/RIVO Fraudulent Income Documents

  1. Review the allegation for reference to false Form W-2 or Form W-2G allegedly created or altered by the filer to generate a fraudulent refund.

  2. Review the module for fraudulent income documents involving one individual.

  3. If the allegation involves multiple individuals remove from sort and refer to IRM 3.28.2.7.2, Unreported income criteria.

  4. If allegation is substantiated by research continue with sort.

Issue Identification Specialty Tax Examination

  1. Specialty Examination includes Bank Secrecy Act, excise, employment, estate and gift taxes.

  2. The submissions may contain the following description or issue related to specialty tax:

    1. Employment Tax Form 1099 series

    2. Estate Form 706, U.S. Estate Tax Return and Gift Tax Form 709, United States Gift Tax Return

    3. Excise Tax Form 720, Quarterly Federal Excise Tax Return

Issue Identification Employment Tax

  1. When the referral addresses Employment Tax, Form W-2 or Form 1099:

    1. Research to determine if business returns appear to be unreported or under reported wages or income.

    2. Send the issue to Employment Tax Specialty Employment Tax Workload Selection and Delivery (ET-WSD), if the allegation concerns employee earnings on Form W-2, worker classification issues reported on Form 1099 or if MFT 01 and the BOD code is not LM.

  2. If Form 3949-A relates to issues with business filing incorrect Form W-2 or Form 1099 series, remove from sort and ensure case is routed to Employment Tax.

  3. If the return appears to be under-reported or unreported income, but does not concern accuracy of employee earnings versus Form W-2 worker classification issues reported on Form 1099 series, remove from sort and refer to IRM 3.28.2.6, Issue Identification Small Business/Self Employed (SBSE) Field Exam, for processing instructions.

  4. If the employment tax issue is related for a City, County, State or Federal government or employee, remove from sort and return to ICT to route to Federal, State and Local Government (FSLG).

Issue Identification Estate Tax Form 706 and Gift Tax Form 709

  1. Estate Tax referrals will be accepted ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Gift tax referrals require mention of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Referrals stating a return has not been filed for a decedent taxpayer and Form 1040, U.S. Individual Income Tax Return, or Form 1041, U.S. Income Tax Return for Estates and Trusts, should be removed from sort. Refer to IRM 3.28.2.6 Issue Identification Small Business/Self Employed (SBSE) Field Exam, for processing instructions.

  4. Referrals containing refund disputes on a decedent’s final return need to be return to ICT for retention. This is not a tax issue.

Issue Identification Excise Tax

  1. Excise taxes are taxes paid on the manufacture, sale or use of particular supplies or services. Excise taxes include but are not limited to:

    • Fuel taxes

    • Environmental Taxes (Ozone Depleting Chemicals, Coal)

    • Communications and Air Transportation

    • Manufacturers Taxes (Bows & Arrows; Coal, Tires, Gas Guzzlers and Vaccines)

    • Retail Tax on Heavy Trucks, Trailers and Tractors

    • Heavy Vehicle Use Taxes

    • Ship Passenger Tax

    • Foreign Insurance Taxes

    • Obligations Not in Registered form

    • Indoor Tanning Services

    • Wagering

  2. Continue with sort for referrals containing mention to any of the above or Form 720, Quarterly Federal Excise Tax Return.

Frivolous or Tax Avoidance

  1. A Frivolous position is one that attempts to illegally avoid/reduce tax liabilities or to increase refunds by fraudulent or frivolous means.

  2. Identifiable Frivolous categories may include:

    • Frivolous income

    • Frivolous deductions

    • Frivolous credits

    • Altered/Invalid documents

  3. Frivolous Arguments can be made by Individuals and businesses who oppose compliance with Federal Tax laws. Frivolous Arguments are described in Notice 2010-33 and are available at https://www.irs.gov/irb/2010-17_IRB#NOT-2010-33.

  4. Tax avoidance is the arrangement of one’s financial affairs to minimize tax liability. Utilize the following instructions to identify and refer allegations that contain tax avoidance behavior or simply provides personal opinions regarding dissatisfaction with the Federal Tax System.

Issue Identification Frivolous or Tax Avoidance

  1. A frivolous Form 3949-A or Information Referral will include identifiable key words or frivolous markings that establish the form is intended to argue tax law or is in support of a frivolous position. Questionable Frivolous Information Referrals are to be treated as follows:

    1. If allegations contain taxpayer address with Puerto Rico, remove from sort and ensure case is routed to SBSE Field. Refer to IRM 3.28.2.6, Issue Identification Small Business (SBSE) Field Exam for processing instructions.

    2. If “-L” freeze is present on the account, remove the referral from the Frivolous sort and follow IRM 3.28.2.6, Issue Identification Small Business/Self Employed (SBSE) Field Exam for processing instructions.

    3. If allegations contain language or frivolous identifying criteria outlined further in the section below, route the case to ICT to direct the referral to Frivolous Return Program (FRP).

    4. If frivolous criteria is not met, review the allegation to identify if other BOD criteria exists and refer to BOD as outlined in IRM 3.28.2.

    5. If no frivolous criteria or other BOD criteria is identified, route to ICT to send to Retention.

    Note:

    Frivolous or Tax Avoidance Information Referrals must directly indicate the taxpayer in question is boasting or indicating the law does not apply to them. In some cases, the taxpayer may supply the referral to report wrongdoing on the part of a Federal Agency.

    Note:

    A Policy Decision was made to discontinue screening of Frivolous/Tax Avoidance criteria effective February 10, 2020. The guidance shown here is to address residual inventory received from ICT prior to February 10, 2020.

  2. Frivolous Form 3949-A criteria includes:

    • Altering, modifying, or removing any portion of the jurat. Watch for statements such as "signed under duress" or "all rights reserved," ,

    • Reducing or eliminating tax liability without valid justification, and the rationale is based upon a frivolous argument or position,

    • "Sui Juris" is notated next to their name or a thumbprint signature is used in place of a wet ink signature,

    • The words, United States of America, is written in as part of address, the zip code is bracketed e.g. [12345], or the address will include "Republic of " or "Territory of (state)" .


    Screen for language that is objecting to tax form requirements per the following:

    • Allegation argues the unconstitutionality of tax law or provides references to the IRC which indicate that the taxpayer is free of any obligation to pay income tax liabilities

    • Statements that the taxpayer is a citizen of an independent entity within the U.S. and not liable for Federal Taxes

    • Statements, often in pseudo-legalistic language, that the taxpayer is not subject to appropriate legal action for the accuracy of their response.

  3. See the table below for the Frivolous key words or statements and definition that can be included but are not limited to:

    Frivolous Key word or Statement Definition
    Accepted for Value; If the IRS can prove the debit is real, the taxpayer will pay it.
    Claim of Right; Claim founded on "Common Law" immunity
    Color of Law; Outward Appearance, Often Deceptive
    Constructive Notice; Notification to the IRS that the taxpayer is not liable to pay taxes
    Exempt from Levy; Free from government action under "Common Law " belief
    Freeman; One enjoying civil or political liberty; freeborn citizen
    Jurisdiction; Region within which to enforce the law
    Nunc Pro Tunc; Latin for Then and Now
    Refused for Fraud; Belief they are victim of fraudulent taxing under "Common Law"
    Remuneration; To pay money in return for services
    Sui Juris; Having Full Legal Rights
  4. If the referral contains language to support the Frivolous criteria as indicated above, continue routing to Frivolous.

  5. If Frivolous criteria is not met, review the allegation to determine no other BOD criteria exists. If no other criteria is met, route to ICT for Retention.

Issue Identification Collection Policy

  1. Collection Policy provides guidance on collection processes that are common to large groups of taxpayers with similar characteristics and develop, design and deliver Collection program policies, strategies and objectives.

  2. Allegations containing issues of non-filing, owing, lien, levy and/or unreported income should be reviewed for collection activity. The driving factor for Collection Policy is a Taxpayer Delinquent Account (TDA) with an unexpired collection statue expiration date (CSED). The content of the referral should indicate assets are available and the taxpayer account must show an outstanding liability regardless of the tax year listed.

  3. Collection activities would be filing liens or issuing levies. Collection assignments are identified by freeze code “T-” or the Status codes that reflect 22,24,26 or 71.

  4. Use the following IDRS CC to determine collection activity or identify a Notice of Federal Tax Lien (NFTL).

    1. CC SUMRY - Will have the word “lien” if a lien has been filed on a module.

    2. CC TXMOD “A” or CC IMFOL “T” or CC BMFOL “T” - Will reflect a posted TC 582 to indicate a NFTL has been filed.

    3. CC TXMOD “A” or CC IMFOL “T” or CC BMFOL “T” - Will also reflect a TC 971 AC 069 to indicate a final notice has been issued and Collection is planning to issue levies to aid in reducing the tax liability.

  5. Below is an IF and Then chart detailing the routing process for the different status codes.

    If ... And ... Then ...
    A. Master File Status is 72 The case is related to Bankruptcy if the transaction code 520 with closing codes 60 - 67, 83 ,85 - 89 is present the case is Bankruptcy related Notate MFS 72 bankruptcy on the top right corner of the referral
    B. Master File Status is 72 Transaction code 520 with closing code 70 - 82, 84 is present. The case is related to Appeals Notate MFS 72 appeals on the top right corner of the referral
    C .Master File Status is 71 or has an unreversed Transaction code 480 (OIC has been received) -Y Freeze is set Notate MFS 71 on the top right corner of the referral
    D. Master File Status is 24 or 26 Referral alleges the taxpayer has assets available and the taxpayer’s account must show an outstanding liability Notate MFS 24/26 on the top right corner of the referral
    E. Master File Status is 22 Referral alleges the taxpayer has assets available and the taxpayer’s account must show an outstanding liability Notate MFS 22 on the top right corner of the referral
    F. Master File Status not listed above   Do not route to Collection Policy. Research any other criteria met, if no other criteria is identified send to ICT retention.

    Note:

    If the allegation issue is regarding outstanding liabilities, non-filer, or unreported income, etc. and collection activity is not indicated during IDRS research, remove from sort and ensure case is routed to SBSE Field Exam. Refer to IRM 3.28.2.6, Issue Identification Small Business/Self Employed (SBSE) Field Exam for processing instructions.

Large Business and International (LB&I)

  1. Large Business and International (LB&I) serves corporations, sub-chapter S corporations, and partnerships with ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡. Also, LB&I through the Withholding and International Individual Compliance (WIIC) Division, has responsibility for the following taxpayers: U.S. citizens living and, or, working abroad or in a U.S. Territory, U.S. citizens or resident aliens who hold income producing assets in a foreign country or claim the foreign earned income exclusion or foreign tax credit, and permanent residents and non-resident aliens who have a U.S. filing requirement.

Issue Identification LB&I

  1. Referrals mentioning Offshore, overseas or a foreign country or a U.S. Citizen living abroad are considered Withholding International Individual Compliance (WIIC) issues. Remove from the sort and ensure the referral is routed to ICT for proper routing per IRM 3.10.72.19.2, Form 3949-A Information Referral Routing Guide.

  2. Large business acceptance criteria for Information referrals:

    • Must be a corporate or partnership return referral issue

    • Must be BOD code specific to Large Business "LM"

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Locate the EIN on the referral. If the EIN is not present, conduct research using CC NAMEE to locate the business.

  4. Determine the filing requirements using CC INOLES.

    1. If research reveals filing requirements are only for Employment Taxes, Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, and or for Form 941, Employer’s Quarterly Federal Tax Return, research cross references to locate the parent EIN or to determine if the business is a Schedule C business.

      Note:

      Cross references can be found using CC INOLEX, CC NAMEE or through other research tools. Document the EIN with the filing requirements when applicable.

    2. If research reveals the business is a Schedule C business, refer to IRM 3.28.2.6, Issue Identification Small Business/Self Employed (SBSE) Field Exam for processing instructions.

    3. If research reveals the filing requirements are for a corporation or partnership, the referral allegation is related to corporation or partnership issues, the BOD Code is "LM" and the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, continue with routing to Large Business.

  5. If the Large Business criteria above is not met, review the allegation to determine no other BOD criteria exists. If no other criteria is met, route to ICT for Retention.

Issue Identification Return Preparer Misconduct Form 14157, Return Preparer Complaint

  1. The Return Preparer Office (RPO) was created in 2010 to oversee registration and suitability of federal tax return preparers. The mission is to improve taxpayer compliance by providing comprehensive oversight and support of tax professionals.

  2. Complaints about a tax return preparer should be submitted on Form 14157, Return Preparer Complaint, but may be submitted on Form 3949-A instead. If submitted on a Form 3949-A , then to be considered a complaint about a tax return preparer, the allegation must be related to return preparation or the preparer’s tax return business.

  3. Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit, are allegations against the preparer but are also requesting victim assistance to change their tax data. Remove Information Referrals when Form 14157-A, is attached with any other forms, ensure case is routed appropriately back to ICT indicating the incorrect sort was determined. DO not send submissions to RPO when Form 14157-A is attached.

  4. The allegation must be about the preparer’s business. The following are examples accepted by RPO:

    • Allegations against tax preparer altering tax return data

    • Allegations of incorrect or egregious return preparation

    • Allegations the preparer was not authorized to file tax return (s)

    • Allegations the preparer misdirected all or a portion of the refund due

  5. RPO does not address the following examples of matter including but not limited to:

    • Unprofessional language, professionalism, or refusing to prepare or file a tax return

    • Disagreement over fees charged or believe fees were too high

    • Preparer receiving payments in cash

    • Preparer’s lifestyle is extreme, beyond his ability, or appears not to be reporting all income

    • Preparer who clearly is NOT in the profession of preparing returns.

  6. Conduct IDRS research to obtain the EIN/TIN and notate on Form 3949-A., or if not included indicate on the submission.