4.7.7 Technical Services

Manual Transmittal

November 23, 2020

Purpose

(1) This transmits revised IRM 4.7.7, Examination Returns Control System (ERCS), Technical Services.

Material Changes

(1) Internal controls were added to this IRM per IRM 1.11.2, Internal Revenue Manual (IRM) Process.

(2) Significant changes to this IRM are reflected in the table below:

Reference New Reference Description
4.7.7.1 4.7.7.1 Title changed from Overview to Program Scope and Objectives to reflect the internal controls contained in this subsection. Information was added or moved from previous subsections for background, responsibilities, program controls, acronyms, and related resources.
4.7.7.6, 4.7.7.7, 4.7.7.8 4.7.7.1.3 Role and Responsibilities of Managers, Reviewer and Tax Examiner, and the Clerical Staff were rewritten and incorporated into Responsibilities.
4.7.7.4 4.7.7.2 Security renumbered and content added to list items that generate an audit trail for potential UNAX.
4.7.7.2 4.7.7.3 User Capabilities renumbered, and content rewritten to clarify capabilities are for users with read and write permissions.
4.7.7.3 4.7.7.4 Employee Records and Permissions renumbered. Content added: All ERCS employees have an ERCS employee record with an assigned ERCS employee identification (ID) number and a work schedule profile (WSP). The ERCS employee ID is used to associate inventory and time charges with the employee.
4.7.7.4.1 4.7.7.4.1 (1) Employee Records, added content: Employee records are usually added by the administrative support staff in the group, but they can also be added by administrative support staff in another group if the user has write permission for the AAC. When setting up the employee record, special care must be taken when entering the standard employee identifier (SEID) to ensure the correct employee is associated with the data from Discovery Directory.
4.7.7.4.1 4.7.7.4.1 (2) Employee Records, added content: It is essential that managers advise administrative support staff when updates are needed to employee records or new employees need to be added. The administrative support staff will timely and accurately add and input changes when advised. Values from the ERCS employee records are used for time reporting, inventory assignment, determining staffing needs, determining if managerial approval is required for updates, protecting an employee's tax return from unauthorized access, and in the creation of audit trails.
Exhibit 4.7.7-1 4.7.7.4.1 (3) Moved from Exhibit 4.7.7-1 and incorporated into the Employee Records subsection.
4.7.7.11.7 and Exhibit 4.7.7-3 4.7.7.4.1 (5) Moved from Position Code and Exhibit 4.7.7-3 and incorporated into the Employee Records subsection.
N/A 4.7.7.4.1 (7) Employee Records, added requirements for Work Schedule Profiles including definitions.
4.7.7.3.1 (6) 4.7.7.4.1 (11) Deleted obsolete information and added link to updated IRM 4.7.5.6, Group and Territory, Employee Records for information regarding Transfers, Details, and Acting Assignments.
4.7.7.3.2 4.7.7.4.2 Permission Records, added detailed information regarding the four types of user permissions.
4.7.7.11.1 4.7.7.4.2 (9) AAC obsolete information deleted and AACs incorporated into Permission Records subsection.
4.7.7.5 4.7.7.5 Approval Authority renamed to Managerial Approval - Review Groups. Content added to include forms used for additions, updates, transfers or closures.
N/A 4.7.7.5.1 Delegating Permissions, content added for manager requirements when granting temporary permissions.
4.7.7.9 4.7.7.6 Inventory Control, renumbered. Content added: Review and Sample Review SBCs are not valid with LB&I PBCs. Therefore, permissions will be granted for SBC 00000.
4.7.7.10 4.7.7.7 Reports, renumbered.
4.7.7.11 4.7.7.8 ERCS Codes, renumbered.
4.7.7.11.2 4.7.7.8.1 Suspense Type and Action Date, renumbered.
4.7.7.11.3 4.7.7.8.2 Reject Reason, renumbered.
4.7.7.11.4 4.7.7.8.3 Review and Sample Review employee ID, renumbered.
4.7.7.11.5 4.7.7.8.4 Review Type, renumbered.
4.7.7.11.6 4.7.7.8.5 Sample Review Indicator, renumbered.
4.7.7.12 4.7.7.9 Sample Selection, renumbered. Note added: For SBSE Electronic Case files the sample selection sheet is saved as a PDF file and then uploaded to RGS.
4.7.7.13 4.7.7.10 Time Input, renumbered.
Exhibit 4.7.7-9 4.7.7.10 (6) Moved from Exhibit 4.7.7-9 and incorporated into the Time Input Subsection.
N/A Exhibit 4.7.7-1 Acronyms and Definitions: Added new Exhibit 1
Exhibit 4.7.7-2 Exhibit 4.7.7-2 EQMS, QMA, and LQMS PBCs updated content.
Exhibit 4.7.7-4 Exhibit 4.7.7-3 TS Suspense Types renumbered and updated.
Exhibit 4.7.7-5 Exhibit 4.7.7-4 TS Reject Reasons renumbered.
Exhibit 4.7.7-6 Exhibit 4.7.7-5 Review Types renumbered, changed from two digits to three digits, updated and new review types added.
Exhibit 4.7.7-7 Exhibit 4.7.7-6 Sample Review Indicators renumbered and indicator 60, cases not received, added.
Exhibit 4.7.7-8 Exhibit 4.7.7-7 Technical Service Codes renumbered and updated.

(3) Editorial changes have been made throughout this IRM. Website addresses and IRM references were reviewed and updated as necessary.

Effect on Other Documents

IRM 4.7.7 dated October 21, 2011 is superseded.

Audience

Small Business and Self Employed (SB/SE) and Large Business and International (LB&I) employees who use ERCS.

Effective Date

(11-23-2020)

Robin L. Kidwell
Director, Technology Solutions
Small Business/Self-Employed

Program Scope and Objectives

  1. This IRM section contains Examination Returns Control System (ERCS) information and procedures for Technical Service employees in Review and Sample Review for consistency across the areas and business units.

  2. Purpose: To provide guidance needed by Review and Sample Review employees.

  3. Audience: Review and Sample Review employees in SB/SE and LB&I who use ERCS. Employees include Territory Managers, managers, reviewers, tax examiners, and administrative support staff in the following functions:

    • SB/SE Technical Service (TS)

    • Joint Committee Review (JCR)

    • Examination Quality Measurement Staff (EQMS)

    • Quality Measures and Analysis (QMA)

    • LB&I Quality Measurement System (LQMS)

  4. Policy Owner: The SB/SE Deputy Director, Examination, who is under the SB/SE Director, Examination.

  5. Program Owner: SB/SE Director, Technology Solutions.

  6. Primary Stakeholders: LB&I

  7. Contact Information: To recommend changes or make other suggestions related to this IRM section, see IRM 1.11.6.6, Providing Feedback About an IRM Section - Outside of Clearance.

Background

  1. This IRM provides an overview of the ERCS responsibilities Review and Sample Review employees should understand and apply in the performance of their duties.

  2. Users must be aware of the potential for Unauthorized Access of Taxpayer Accounts (UNAX) violations from the use of ERCS. Data from ERCS should be accessed only for IRS business purposes. Users should promptly retrieve ERCS reports from printers or fax machines in order to prevent unintentional disclosure. Audit trails are created and subject to review for all user accesses of taxpayer data. For more information about UNAX, see IRM 10.5.5, Privacy and Information Protection, Unauthorized Access, Attempted Access or Inspection of Taxpayer Records (UNAX) Program Policy, Guidance and Requirements.

Authority

  1. IRM 1.4.1, Resource Guide for Managers, Management Roles and Responsibilities.

  2. IRM 4.8.2, Technical Services, Case Processing.

Responsibilities

  1. Responsibilities of managers include but are not limited to:

    • Ensuring ERCS employee record information for their employees is accurate and complete.

    • Ensuring prompt assignment of incoming cases.

    • Ensuring work is evenly distributed among employees.

    • Ensuring users timely and accurately input required data into ERCS.

    • Ensuring ERCS reports are generated timely.

    • Ensuring prompt closing of all outgoing cases for final processing.

    • Ensuring any ERCS system related problems are reported timely to the local AIMS/ERCS (A/E) staff.

    • Ensuring time is entered in ERCS accurately and no later than the close of business on the last day of each reporting cycle.

  2. Review managers have the following additional responsibilities:

    • Monitoring statuses and statutes of all returns in inventory.

    • Monitoring returns in-transit to or from TS statuses.

    • Ensuring users timely and accurately resolve any ERCS to AIMS rejects.

    • Ensuring users resolve issues on the AIMS Error reports generated by the AIMS to ERCS weekend processing.

    • Approving or disapproving changes to ERCS returns requiring managerial approval timely.

    • Ensuring Form 895, Notice of Statute Expiration, is reviewed timely and acknowledged in ERCS.

  3. Responsibilities of reviewers in Sample Review include but are not limited to the following:

    • Submitting the reviewer's technical time sheet on a regular basis in order to ensure time is entered into ERCS no later than the close of business at the end of each reporting cycle.

    • Submitting any changes to the reviewer's technical time sheet to the manager or administrative support staff on the first business day after the close of each reporting cycle early enough to ensure the time on ERCS is corrected no later than noon local time.

  4. Responsibilities of reviewers and tax examiners in Review include but are not limited to the following:

    • Ensuring the statute information on ERCS is accurate on all assigned cases.

    • Completing and submitting Forms 895 timely to the manager.

    • Ensuring all completed cases are closed promptly.

  5. Responsibilities of the administrative support staff in Sample Review include but are not limited to:

    • Ensuring ERCS is updated timely for all changes to employee records.

    • Ensuring ERCS is updated timely for all changes to returns or inventory records.

    • Returning updated documents to the reviewers for association with the case file.

    • Generating the ERCS inventory and monitoring reports and distributing as requested by management.

    • Inputting examination technical time into ERCS no later than close of business on the last work day of the reporting cycle.

    • Inputting examination technical time corrections into ERCS no later than noon local time the first work day after the end of each reporting cycle.

    • Ensuring any ERCS system related problems are reported timely to the local A/E staff.

  6. Responsibilities of the administrative support staff in Review include but are not limited to:

    • Ensuring requisitions and updates to returns are timely input into ERCS.

    • Reviewing and resolving ERCS to AIMS rejects promptly when the message "There are ERCS-AIMS Uploading results to check" appears on the Examination Main Menu.

    • Reconciling the Overage Requisition Report monthly.

    • Researching and resolving AIMS Error reports weekly .

    • Reconciling the AIMS 4.0 Table with the ERCS data within 5 days of receipt.

    • Reconciling the AIMS SSIVL data with the ERCS data periodically following local procedures.

    • Acknowledging Form 895 in ERCS as specified in IRM 4.7.3, Statute of Limitations.

    • Ensuring returns selected for Sample Review have a sample selection sheet attached to the case file or saved to PDF and uploaded to RGS for electronic case files.

Program Management and Review

  1. Reports are available that allow management to monitor inventory, statutes, closures, time input, and employee records. See IRM 4.7.6, Reports, for more information.

Program Controls

  1. ERCS creates audit trails for selected changes to returns, employee records, and permission records. A special audit trail is also created when users enter a taxpayer identification number (TIN) or a taxpayer name on ERCS. See IRM 4.7.2, Security, for more information. IRM 4.7.2.3.4, Audit Trails, has a list of the changes in ERCS that produce an audit trail.

  2. There are security checks within ERCS to ensure unauthorized users do not access programs and authorized users are kept within the boundaries of their permissions. These checks are performed automatically and silently each time a user attempts to access ERCS. The user has no ability to prevent the checks. For more information about permissions in ERCS, see IRM 4.7.2.3.2, Permissions.

Terms, Definitions, and Acronyms

  1. See Exhibit 4.7.7-1, Acronyms and Definitions, for Acronyms used in this IRM.

  2. The following are terms and definitions specific to this IRM.

    Defined Terms

    Term Definition
    Employee Refers to an employee in Review or Sample Review with an ERCS employee record.
    User Refers to a employee in Review or Sample Review with ERCS access.
    Review Refers to employees in TS and JCR.
    Sample Review Refers to employees in EQMS, QMA, and LQMS.
     

Related Resources

  1. For questions regarding ERCS security and instructions for gaining access to ERCS refer to IRM 4.7.2, Security.

  2. The instructions for Review users for navigating the ERCS programs can be found in the ERCS Review Handbook. The instructions for Sample Review users for navigating the ERCS programs can be found in the ERCS Sample Review Handbook.

Security

  1. ERCS operates on the principle that users should only change data on returns under the user's control. Consequently, a Review user may only change information on returns in Status Codes 20 - 39 within the AIMS Assignee Codes (AAC) in which the user has permission. Users in Sample Review may only change information on returns selected for sample review in Status 90 within AACs reviewed by the Sample Review site (SB/SE, Specialty Tax, or LB&I). Throughout ERCS, error messages appear when a user attempts to update returns in which the user does not have permission.

  2. Reports generated by users that contain any Record of Tax Enforcement Results (ROTER) information are to be shared only at the first line manager level or higher and/or with designated reviewers on a need to know basis. For more information about ROTER, see the Section 1204 website. IRM 1.5, Managing Statistics in a Balanced Measurement System Handbook, provides further guidelines for the appropriate use of statistics by managers and employees.

  3. Users must be aware of the potential for UNAX violations from the use of ERCS. Data from ERCS should be accessed only for IRS business purposes. No attempt should be made to access the user's own Social Security Number (SSN) or that of the user's spouse. If the user's personal SSN or that of the user's spouse is entered, an employee audit access message is created of a possible breach of security. An employee audit access message is also created if a user attempts to view or update an employee audit return that the user does not have permission to update. Breaches in security are considered UNAX violations and are subject to disciplinary action. For more information about UNAX, see IRM 10.5.5, Privacy and Information Protection, Unauthorized Access, Attempted Access or Inspection of Taxpayer Records (UNAX) Program Policy, Guidance and Requirements.

  4. Audit trails are created when ERCS records are researched, added, updated, or deleted. Research should be limited to a user's official business needs in order to prevent unnecessary disclosure. Audit trails are also created for potential UNAX violations. These audit trails include when a user:

    • Inputs his or her own SSN.

    • Inputs the SSN of a spouse.

    • Attempts to view or update an IRS employee's return without permission.

    • Attempts to update a return without permission.

    • Inputs a name search that matches an employee’s name.

  5. For security issues concerning ERCS, including pre-requisites for ERCS access, information on completing the Online 5081 (OL5081), password requirements and resets, requesting temporary permission, and employee audit security features see IRM 4.7.2, Security.

User Capabilities

  1. Review users with read and write permissions can:

    1. Add or update employee information for employees in their authorized Audit Information Management System (AIMS) Assignee Code (AAC).

    2. Research and display records.

    3. Generate reports of returns in TS statuses.

    4. Update, transfer, and close returns in TS statuses.

    5. Input examination technical time for employees in their authorized AAC.

    6. Generate time reports for employees and returns.

    7. Generate a Form 895, Notice of Statute Expiration.

    8. Generate a Form 3210, Document Transmittal.

  2. Sample Review users with read and write permissions can:

    1. Add or update employee information for employees in their authorized AAC.

    2. Research and display records.

    3. Generate reports of returns selected for sample review.

    4. Update returns selected for sample review in Status Code 90.

    5. Input examination technical time for employees in their authorized AAC.

    6. Generate time reports for employees and returns.

Employee Records and Permissions

  1. All ERCS employees have an ERCS employee record with an assigned ERCS employee identification (ID) number and a work schedule profile (WSP). The ERCS employee ID is used to associate inventory and time charges with the employee.

  2. A user is granted access to the ERCS server via OL5081. Refer to IRM 4.7.2, Security, for details.

  3. In order to run ERCS programs a user must have:

    1. A valid login and password for the ERCS server.

    2. An ERCS employee record containing the user's login name.

    3. Permissions records.

Employee Records

  1. Employee records are usually added by the administrative support staff in the group, but they can also be added by administrative support staff in another group if the user has write permission for the AAC. When setting up the employee record, special care must be taken when entering the standard employee identifier (SEID) to ensure the correct employee is associated with the data from Discovery Directory.

  2. It is essential that managers advise administrative support staff when updates are needed to employee records or new employees need to be added. The administrative support staff will timely and accurately add and input changes when advised. Values from the ERCS employee records are used for time reporting, inventory assignment, determining staffing needs, determining if managerial approval is required for updates, protecting an employee's tax return from unauthorized access, and in the creation of audit trails. The following values must be kept current:

    • Employee name

    • AAC

    • Post of duty

    • Position code

    • Grade

    • Login name

    • WSP

  3. Review and Sample Review employee records are added to ERCS in the AACs according to the chart below:

    PBC SBC EGC Description
    202, 203, 204, 206 88700 See the TSC Listing SB/SE TS AACs
    207 88720 1408, 2408 EQMS AACs
    212 88700 1410 QMA AAC
    320 88705 1988, 1989, 1992 LQMS AACs
    324 88710 1500, 1954 JCR AAC

  4. The post of duty (POD) should be the POD of the employee’s official duty station. See the ZIP/POD Access Database for the POD associated with each zip code to find the employee's correct POD.

  5. The position code is used for a number of checks including:

    • Determining if the employee is required to charge time on ERCS.

    • Validating the employee's time charges.

    • Determining if an employee is a manager and can perform certain changes to returns without requiring managerial approval.

    • Determining if the employee's tax return can be audited in the area.

    • Determining the recipient of system e-mail created when an IRS employee's tax return is accessed.

    Review and Sample Review employees utilize the Position Codes listed below:
    Position Code Description
    105 Quality Assurance Management - LB&I only; used for managers in JCR and LQMS groups
    106 Tech Support Quality Management Staff (QMS) - SB/SE only; used for TS and EQMS managers in Revenue Agent (RA) groups
    118 Quality Assurance Reviewer/Technical Coordinator; used for reviewers in RA groups (includes EQMS, QMA, and LQMS)
    206 Tech Support (Quality Measurement Staff (QMS)) - SB/SE only; used for TS, JCR. EQMS, and QMA managers in Tax Compliance Officer (TCO) groups
    218 Quality Assurance Reviewer/Technical Coordinator; used for reviewers in TCO groups (includes EQMS and QMA)
    327 Tax Examiner; used for tax examiners in RA and TCO groups
    400 Non - 4502 position code - ERCS only; used for administrative support staff, and local or national analysts

  6. ERCS users must have a login name on their employee record. The login name is used to verify a user has permission to access ERCS and in the creation of the audit trails. Employees who temporarily act for their managers are given temporary ERCS access and assigned a login and password. The login name should not be removed from the ERCS employee record when the assignment is complete, since audit trails may have been created during the employee's assignment.

  7. The WSP contains the employee's tour of duty (TOD) information and the number of hours the employee is scheduled to work each day. This information is used when time is input for the employee on ERCS. Each technical employee, manager, and the territory managers in LB&I must account for the number of hours they are scheduled to work each day. The WSP is also used to determine when an employee is required to charge holiday time on ERCS. When entering the WSP the user must enter their employment type, full time or part time, and TOD. Part-time employees default to enter hours for the Part-Time TOD, full-time employees can be under one of five possible TODs. The following are the six choices for the TOD:

    • Part-Time - employee works 32 to 64 hours per pay period

    • Regular - employee works 5 eight-hour days per week with no option for working credit hours

    • Flexitour - employee works 5 eight-hour days per week with an option for working credit hours.

    • 5/4/9 - (five four nine) employee works 8 nine-hour days, 1 eight-hour day, and 1 day off per pay period with no option for working credit hours.

    • 4/10 - (four ten) employee works 4 ten-hour days and 1 day off per week with no option for working credit hours.

    • Maxiflex - employee works a pre-determined number of hours each day, but the number of hours can vary from day to day during the pay period. The total hours per pay period must equal 80 hours. The employee may work credit hours.

  8. The WSP records are in two-week cycles that correspond with Single Entry Time Reporting (SETR) cycles. The employee's scheduled work days and the number of hours the employee is scheduled to work each day in the WSP should match the employee's information on the SETR system.

    Note:

    A Maxiflex WSP can include partial hours in half hour increments.

  9. Since the WSP is used in validating time, changes to the WSP must be made at the beginning of the two-week pay period, before time has been applied on ERCS.

  10. ERCS employee records should be inactivated when the employee leaves the IRS or transfers to a non-ERCS position. If an employee inputs time on ERCS, the inactivation date must be entered as the last day the employee is required to charge time on ERCS. If the employee record contains a login name, it should not be removed when the employee record is inactivated.

  11. For information regarding transfers, details, and acting assignments see IRM 4.7.5.6 , Group and Territory, Employee Records.

  12. Additional information on adding an employee record to ERCS can be found in the Employee Records chapter of the ERCS Review Handbook for TS and JCR users and the Employee Records chapter of the ERCS Sample Review Handbook for EQMS, QMA, and LQMS users. The user should enter all information accurately and completely when adding or updating employee records.

Permission Records

  1. Permissions are granted by the local A/E staff. Temporary permissions may be delegated by the TM or group manager to an ERCS user. The manager must have the same permanent permission in order to grant it to another user.

    Example:

    A group manager has read and first level approval permission, only read and first level approval permission can be delegated. Temporary permission may be granted up to 30 days, but should be limited to the length of time the user needs the permission.

  2. There are four types of user permissions: read, write, first level approval and second level approval.

    • First level approval is available to front line managers and acting managers to approve work performed in their group.

    • Second level approval is available to TMs to approve updates or requisitions input by managers and acting managers, and updates to an acting manager’s inventory.

  3. All users are given read permission. Users with read permissions can:

    • Generate reports for any AAC they have been granted access.

    • Research and display records.

  4. Generally only administrative support staff are given write permissions. Users with write permissions can perform the following tasks for any AAC they have been granted access:

    • Add or update employee records and WSPs

    • Add, update, transfer, or close inventory records

    • Input examination technical time for employees

    • Generate a Form 895

    • Generate a Form 3210

      Note:

      A group manager may be given write permission if the TM approves the OL5081 where write permissions are requested and the TM is an ERCS user with second level approval permission.

  5. Users with permanent first level approval permissions can:

    • Approve updates for any AAC they have been granted access.

    • Delegate temporary first level approval permission to other users.

  6. Permission records should be deleted as soon as the need for them has expired. Employees should notify the manager if they have permission records that are no longer needed for business purposes.

  7. Managers should ensure that technical employees with inventory are not routinely given write permission during a temporary acting assignment and must not be given permanent write permissions. Write permission compromises separation of duty. Permanent changes to ERCS permissions should only be granted via a Modify OL5081 which is routed to the manager for approval and processed by the local A/E staff.

  8. Administrative support staff in TS are given read and write permission for their assigned AAC. If permissions are needed for additional PBCs in order to assign returns to reviewers OL5081s must be submitted for these applications. See IRM 4.7.2, Security, for additional information.

  9. Administrative support staff in JCR, EQMS, QMA, and LQMS are given read and write permission for their assigned AAC. The following are the AACs:

    Function PBC SBC EGC
    JCR 324 88710 1500/1954
    EQMS 207 88720 1408/2408
    QMA 212 88700 1410
    LQMS 320 88705 1988/1989/1992

  10. Review managers are given read and first level approval permission for their AAC.

  11. Review TMs are generally given read and second level approval permissions for their territory.

  12. Sample review managers are given read permission for their AAC, approval permissions are not needed.

  13. Employee permission records on ERCS are removed when the employee record is inactivated.

  14. For technical employees the first point of contact for ERCS or AIMS questions should be the group manager. If the group manager needs assistance with ERCS or AIMS questions they should contact their local A/E analyst. The local A/E staff should be able to resolve most ERCS and AIMS issues and can coordinate with the TS A/E analyst when needed. They also can elevate issues, if necessary, to the HQ ERCS analysts or to the ERCS development staff.

Managerial Approval - Review Groups

  1. ERCS provides a way for managers to review and approve requisitions, closures and selected updates before they become permanent changes on ERCS and before the updates are sent to AIMS.

  2. When returns need to be added, updated, transferred, or closed on ERCS, the appropriate form should be completed. The manager is required to review and either sign or initial the form prior to input into ERCS, except for Form 5345-D, Examination Request-ERCS (Examination Returns Control System) Users, which does not require a manager's signature. The following forms are used to update ERCS and AIMS:

    • Form 5345-D is used to request Master File and Non-master File AIMS controls, and to control Penalty Investigations, Non-AIMS direct examination time (DET) Items and Collateral Examinations on ERCS

    • Form 5348, AIMS/ERCS Update (Examination Update), is used to request updates on ERCS and/or AIMS, return transfers to another group or function, AIMS freeze codes be added or removed, follow-ups for requested original returns and re-establishment of closed cases on ERCS and/or AIMS

    • Form 5349, Examination Correction Request, is used to correct AIMS data on a closed case for a single return. To request a change the group should complete the form and submit it to the A/E staff for input on AIMS.

    Note:

    Forms 5348 requesting AIMS freeze codes to be set or released and re-establishment for closed AIMS cases are not processed in the group, but are forwarded to either Planning and Special Programs (PSP) or the local A/E staff for input, following local procedures.

  3. It is recommended that managers access ERCS at least every two days to check for updates pending managerial approval. When a manager logs into ERCS a message is displayed if there are requisitions or updates that require approval.

  4. The manager should review cases prior to closure on ERCS. After the review is complete, cases should be closed and approved on ERCS. Once the status code update is reflected on AIMS the cases should be shipped to the receiving function within three business days.

  5. Normally updates to returns on ERCS requiring approval are performed by the administrative support staff and approved by the manager. However, if a manager or temporary acting manager updates a return, the action may require the TM to approve the work.

  6. When an update is pending approval, many ERCS screens and reports display a "p" next to the item to denote the update is "pending" . When an update is approved or disapproved, the "p" is removed.

  7. ERCS cannot prevent returns from being physically transferred to Review that are still pending managerial approval in the group for the transfer. Returns in transit to TS and JCR can be monitored using the "In Transit Report" on the Inventory Reports menu.

  8. For detailed information about the Managerial Approval program, options and screens, see the Managerial Approval chapter of the ERCS Review Handbook.

Delegating Permissions

  1. A manager can grant temporary permission for any AAC to which they have first level approval, to another user through the option Grant Temporary Permission, providing the following requirements are met:

    • The employee has an active ERCS login and password.

    • This is not the first time the user has been granted ERCS permission.

      Note:

      The local A/E staff must grant a user's permissions for the first time, which allows access to the database.

    • The manager has permanent permission for the same type of permission the user is being given.

      Example:

      A manager with read and first level approval permissions, but not write permission, can only grant another user read and first level approval permissions.

  2. The manager should only delegate a user permission for the length of time the permission is needed, not to exceed 30 days. Technical employees should not routinely be given write permission during a temporary assignment.

Inventory Control

  1. Ownership of a return in Review and Sample Review is determined by the reviewer assigned to the return on ERCS. For this reason, returns should be assigned as soon as possible after they are received in the function.

  2. Once assigned, ERCS users may update the returns or generate reports listing the returns, if the user has been granted permission for the reviewer's AAC.

  3. Unassigned returns are not associated with the group’s AAC. In order to update or assign these returns, users must have permission for the PBC on the return and the SBC of the function (88700, 88705, 88710, or 88720).

    Exception:

    Review and Sample Review SBCs are not valid with LB&I PBCs. Therefore, permissions will be granted for SBC 00000.

  4. If a return needs to be assigned to a reviewer in another area, the current group should update the Technical Services Code (TSC) and then update the employee ID to a reviewer in the new area. Once re-assigned, only users with permissions for the new reviewer's AAC will be able to update the return. Users should follow local procedures for brokering work in TS.

  5. In addition to the AAC permission checks, ERCS also checks the status code on returns to determine if a return can be updated or listed on reports run by Review users.

  6. ERCS also checks to see if returns have been selected for sample review to determine if a return can be updated or listed on reports run by Sample Review users.

Reports

  1. IRM 4.7.6, Reports, contains detailed descriptions of ERCS reports, recommended uses for the reports, and the recommended frequency for running the reports.

  2. For detailed information and a complete list of reports available for Review users, refer to the ERCS Review Handbook.

  3. For detailed information and a complete list of reports available for Sample Review users, refer to the ERCS Sample Review Handbook.

ERCS Codes

  1. ERCS uses a combination of codes for inventory control including the following:

    1. AAC

    2. Suspense type and action date

    3. Reject reason

    4. Review and sample review employee ID

    5. Review type

    6. Sample review indicator

    7. Review position codes

  2. More information about these codes may be found in the Codes chapter of the ERCS Review Handbook, and the Codes chapter of the ERCS Sample Review Handbook.

Suspense Type and Action Date

  1. The suspense type is a three digit ERCS code in the 500 - 599 range that can be associated with returns in TS statuses.

  2. Suspense types provide a consistent approach to effectively monitor workload and provide a basis for timely completion of work.

  3. Suspense types can be linked to a TS status code and/or a set number of days to be in suspense. When a user updates an ERCS record with a suspense type and if linked, the program automatically sets the status code and/or action date. See Exhibit 4.7.7-3 for a list of suspense types with their associated status codes and number of days.

  4. When the action date is set by the program, it is set to a work day. So it is possible the action date could be one to two days different from the calculated date, if the calculated date falls on a weekend or a holiday.

  5. When a return is updated out of a TS status, the suspense type and action date are removed from the record.

  6. ERCS reports can be generated by a single suspense type or for all returns in suspense. Refer to the Inventory Reports chapter of the ERCS Review Handbook for information on Suspense Reports.

Reject Reason

  1. The ERCS reject reason is a three digit code in the 500 - 599 range used to identify the reason returns are sent back to the group from Review. See Exhibit 4.7.7-4 for a list of reject reasons for TS and JCR.

  2. The reject reason must be input by a Review user when a return in a TS status is updated to a group or PSP status under Status Code 20.

  3. The "Cases Returned to Group" report is available to Review users to monitor returns sent back to the group. Refer to the Inventory Reports chapter of the ERCS Review Handbook for information on this report.

  4. When a group user closes the return back to a TS status, the reject reason is removed from the ERCS record.

Review and Sample Review Employee ID

  1. The ERCS employee ID is a four or five digit number generated by the program when a new employee record is added to ERCS. The employee ID is used to assign inventory to a reviewer.

  2. ERCS lists the employee assignment in TS or JCR in the review employee ID field and in EQMS, QMA, or LQMS in the sample review employee ID field.

  3. Inventory reports can be generated by the review or sample review employee ID.

Review Type

  1. The review type is a three digit number defining the type of return. Use of this code allows returns in Review to be classified into sub-categories for better inventory control and to aid managers in monitoring an individual reviewer's workload. ERCS does not require input of the review type. Refer to local procedures to see if it is required in your area. See Exhibit 4.7.7-5 for a list of review types.

  2. The "Inventory Listing" report located on the Inventory Reports Menu, when run by a Review user, can be sorted by review type.

Sample Review Indicator

  1. The sample review indicator is a two digit number that allows returns to be classified into sub-categories for better inventory control. ERCS does not require input of the sample review indicator. Refer to local procedures in your area. See Exhibit 4.7.7-6 for a list of sample review indicators.

  2. The "Inventory Listing" report located on the Sample Review Reports Menu, when run by a Sample Review user, can be sorted by sample review indicator.

Sample Selection

  1. Returns are checked for sample review eligibility at the time the returns are checked into TS or Centralized Case Processing (CCP). Checked in means the status code on the return has been updated from In-transit to another status code. In order to be eligible for selection, the return must meet the selection criteria and be the Nth eligible return. The "Nth" number is determined by the analysts for each EQMS, QMA, and LQMS site.

  2. When returns are selected for sample review, the user is prompted to print a sample selection sheet. This sheet should be attached to the front of the case file as a reminder that the case should be shipped to the address on the sample review sheet when the case is closed to Status Code 90.

    Note:

    For SB/SE Electronic Case Files the sample selection sheet is saved as a PDF file and then uploaded to RGS.

  3. A return that has been selected for sample review may be deselected by the program if either of the following occurs:

    1. The return is transferred back to the group after a 90 - day letter has been issued.

    2. The return is updated to a TS suspense status.

  4. If a return is deselected for sample review, the sample selection sheet should be removed from the case file or RGS for Electronic Case Files.

Time Input

  1. ERCS validates all examination technical time for SB/SE and LB&I employees whether it is input into ERCS or into the Issue Management System (IMS) and imported into ERCS for validation.

  2. ERCS determines which employees are required to input examination technical time by the employee's position code on the ERCS employee record. If there is an exception for an employee, the local A/E analyst can set the "Ignore SETTS" flag for the employee so time input is not required.

  3. The following position codes used in Review and Sample Review require technical time to be entered on ERCS: 105, 106, 118, 206, 218, and 327. However, Review employees in Position Code 327, tax examiner, are currently not required to input time in ERCS. The local A/E analyst should be notified to turn on the "Ignore SETTS" flag for these employees so the correct position code is used without requiring time input.

  4. There are four types of time charges that can be entered on ERCS:

    • Direct Examination Time (DET)

    • Direct Review Time (DRT)

    • No-return DET

    • Non-DET

  5. DET is time charged to a return using the P of RB codes of "N" (no protection), "R" (related, non-protection time spent on a claim for refund), "P" (protection), or "S" (shelter). This time is included on Form 5344, Examination Closing Record. Although ERCS allows input of these codes for reviewers they are not valid and will cause SETTS validation errors.

  6. DRT is time charged to a return using the P of RB code of "Q" (review). This time is not included in the examiner's time on Form 5344. Time charges to DRT are associated on ERCS to a return and the activity code on the return, but the second segment code (SSC) is user entered and used to further break down the time charge into the review activity performed. The SSCs valid with a P of RB code of "Q" are as follows:

    • 641 Case Review

    • 643 Notice of Deficiency

    • 646 30 Day Letter Activities

    • 648 Abatement Interest

    • 720 Offers in Compromise

    • 732 Innocent Spouse Review

  7. No-return DET is time applied to activity codes in the range 500 - 599. Some of these activity codes can be set up as inventory control records on ERCS, but there is no associated AIMS record.

  8. Non-DET, also referred to as "below the line time" , is time applied to administrative activities, training, leave, etc. The activity codes associated with non-DET charges are in the range 600 - 899.

Acronyms and Definitions

Acronym Definition
AAC AIMS Assignee Code
A/E AIMS/ERCS
AIMS Audit Information Management System
CCP Centralized Case Processing
DET Direct Examination Time
DRT Direct Review Time
EGC Employee Group Code
EQMS Examination Quality Measurement Staff
ERCS Examination Returns Control System
ID Identification
IMS Issue Management System
JCR Joint Committee Review
LQMS LB&I Quality Measurement System
QMA Quality Measures and Analysis
OL5081 Online 5081
P of RB Protection of Revenue Base
PBC Primary Business Code
PSP Planning and Special Programs
RA Revenue Agent
ROTER Record of Tax Enforcement Results
SBC Secondary Business Code
SETTS Summary Exam Time Transmittal System
SSC Second Segment Code
SSIVL Statistical Sampling Inventory Validation Listing
SSN Social Security Number
TCO Tax Compliance Officer
TSC Technical Services Code
TS Technical Service
UNAX Unauthorized Access of Taxpayer Accounts
WSP Work Schedule Profile

Sample Review - EQMS, QMA, and LQMS PBCs

PBC Organization Location Areas Supported
207 EQMS Los Angeles, CA SB/SE PBCs 201, 204, 207
207 EQMS Oakland, CA SB/SE PBCs 202, 203, 205, 206
212 QMA Cincinnati, OH Specialty Tax PBCs 212 - 214
320 LQMS Manhattan, NY LB&I and WIIC PBC 330

TS Suspense Types

If a status is not listed for the suspense type, the status does not change when the suspense type is updated.

If the number of days is not listed for the suspense type, the action date is not set by the program, and the user is required to enter it.

Suspense Type Description Status Days
500 EQMS 23 5
501 Protested to Appeals 22 10
502 LQMS 23 15
503 Taxpayer Advocate 22 10
504 30 Day Suspense --- 30
506 45 Day Suspense --- 45
508 60 Day Suspense --- 60
510 90 Day Suspense --- 90
518 10 Day Suspense --- 10
519 15 Day Suspense --- 15
520 Employee Audits 20 45
524 105 Day Suspense --- 105
525 180 Day Suspense --- 180
526 365 Day Suspense --- 365
528 Interest/Penalty Abatement - 30 Day Cases 22 45
529 Interest/Penalty Abatement 24 195
531 Innocent Spouse - 30 day 22 45
532 OIC (Offer in Compromise) - 30 Day Cases 22 45
534 Stat Notices Issued - Field 24 105
535 Stat Notices Issued - Office 24 105
537 Innocent Spouse - Final Determination 24 105
538 Section 7436 Final Notice Determination 24 105
540 Statute Notice of Deficiency - Out US - Field 24 165
541 Statute Notice of Deficiency - Out US - Office 24 165
542 Cases Sent to Counsel for Review 25 45
544 Section 7436 Notice Preparation 25 45
550 F14104 Package Incomplete --- 14
551 F14104 Pkg Rec’d, Collateral to CRC --- 10
552 F14104 Package not Accurate --- 45
553 Awaiting Estab of MFT 31 Account --- 30
554 MFT 31 Account Established --- 7
555 Assessment Package Submitted --- 35
556 Assessment Posted --- 7
557 Restitution Notification to LTSFC --- 14
558 LTSFC Sent Case to PSP --- 60
570 New TEFRA/BBA Case Assigned 27 5
571 Non TEFRA/BBA and Related Inventory --- 15
572 TEFRA/BBA Various --- 30
573 TEFRA/BBA Various --- 45
574 TEFRA/BBA Various --- 60
575 60 Day Letter Issued 28 75
576 TEFRA/BBA Various 28 105
577 FPAA Issued 28 165
578 Suspended - Litigation 31 180
581 PPA / NOPPA Letter Issued 28 285
590 Form 1254 Suspense Cases - Form in Case 30 365
591 General Fraud Suspense 32 180
592 Grand Jury Suspense 36 180
593 Bankruptcy 39 30
594 Suspense - Various 38 180
595 Suspense - Various 38 365

TS Reject Reasons

Reject Reason Definition
500 Returned from Technical Services
501 Returned for Correction
502 Returned per Group Request
503 Returned for Further Development
504 Exam Depth and Records Question
505 Technical Law Questions
506 Penalty Questions
507 Work Papers Questions
508 Report Writing Questions
509 Statute Problems
510 Claim Procedures
511 From Appeals
512 TEFRA Questions
513 From Joint Committee
514 90 - Day Reconsideration
515 Pre 90 - Day Reconsideration
516 From Area Counsel
517 Advisory
518 AIMS/ERCS Problem
519 Transfer Problem
520 Returned from TS for Taxpayer Request
521 To Taxpayer Advocate Office (TAO)
522 Quality Attributes
523 Package Audit Questions
524 Civil Settlements
525 Consideration of Large Unusual Questionable (LUQ) Items
526 Probes for Unreported Income
527 30 - Day Letter
528 Barred Statute
529 Other

Review Types

Review Type Description
000 In-Transit/Unassigned
001 Employee Audit
002 Innocent Spouse Review
003 National Research Program (NRP)
004 Joint Committee
005 Political Appointees
006 Barred Statutes
007 Reconsideration and Claims
008 Interest/Penalty Abatement Review
009 Restricted Interest
010 Offers in Compromise Review
011 Conditions of Probation (COP)
012 Closing Agreements (non - GSI (Government Services Information Infrastructure))
013 Informant Claims
014 Jeopardy/Terminations
015 LQMS
016 Field Assistance
017 Subject Matter Expert (SME) Duties
018 Training - TS Personnel
019 Penalties - Preparer
020 Earned Income Tax Credit (EITC)
021 Transferee/Transferor
022 Taxpayer Advocate
023 Employment Tax
024 Return from Appeals/Counsel
025 New TEFRA/BBA Case Assignment
026 Non-TEFRA Flow-Through
027 Historic Rehab Credit
028 Local Definition
029 Local Definition
030 Agreed Son of Boss (SOB)
031 TEFRA-Suspended-Litigation
032 Protested to Appeals
033 EQMS
034 Statute Notices of Deficiency - Field
035 Statute Notices of Deficiency - Office
036 Partnership Option Portfolio Securities (POPS)
037 Personal Investment Company (PICO)
038 Section 7436 Final Notice Determination
039 American Disabilities Act (ADA)
040 Administrative Adjustment Request (AAR)
041 Revenue Procedure 92-29
042 Cases Sent to Counsel
043 Fugitive Cases
044 1254 Suspense
045 Fraud
046 Grand Jury
047 Hobby Losses - 183
048 Bankruptcy
049 Protective Claims
050 Section 1033
051 Appeals & Counsel Assistance
053 Headquarters Suspense
054 Claim for Refund Suits
055 Combat Zone
056 Non-AIMS Case Review
057 Technical Coordinator
058 Third Party Contact
059 Executive Compensation
060 National Partnership Council (NPC) Key Case
061 NPC Investors
062 Domestic Trusts
063 Offshore Voluntary Disclosure Initiative (OVDI) / Voluntary Disclosure Program (VDP)
064 S Corps/Employee Stock Ownership Plans (ESOP)
065 Internal Revenue Code (IRC) 419
066 Notice 2003-81
067 Virgin Island Economic Development Credit (VI EDC)
068 Offshore Employee Leasing (OEL)
069 Home-Based Business
070 Last Chance Compliance Initiative (LCCI) / Offshore Voluntary Compliance Initiative (OVCI)
071 Conservation Easement
072 Supporting Organization Settlement
074 Global Settlement Initiative (GSI)
075 TEFRA - Agreed
076 TEFRA - No-Change within 45 Days
077 TEFRA - No-Change after 45 Days
078 TEFRA - 60 Day Letter Prep
079 TEFRA - Campus 60 Day
080 TEFRA - 60 Day Letter Issued
081 TEFRA - Final Partnership Administrative Adjustment (FPAA) Prep
082 TEFRA - AAR Disallowance
083 TEFRA - FPAA Issued
084 TEFRA - Waiting for Campus
085 TEFRA - Investor Statutory Notice of Deficiency (SND) Preparation
086 TEFRA - Investor SND Issued
087 TEFRA - Other Action Required
088 TEFRA - Waiting for Centralized Case Processing (CCP)
089 TEFRA - Waiting for Taxpayer (TP) /Power of Attorney (POA) Protest
090 TEFRA Unable to Process
091 Court Ordered Restitution
092 Restitution Assess Completed - Civil Action Initiated
093 Restitution Assess Completed - No Civil Action Initiated
094 Restitution Not Assessable
095 Restitution is BMF Related
096 Restitution is RPP Related
097 Restitution Not Payable to Service
099 All Other Cases Not Listed Above
100 Withdraw NAP within 60 Days
101 No Change after 60 Days
102 Appeals Protest
103 PPA/NOPPA Review and Preparation - No Protest
104 BBA Modification Received or Extension of Modification Period
105 Agreed Case - Before FPA
106 FPA Letter
107 Agreed Case - After FPA
108 Reserved for Chapter 2, 2A
109 Reserved
110 Reserved
111 Reserved
112 Reserved
113 Reserved
114 Reserved
115 Reserved
116 PPA/NOPPA Letter Issued
117 FPA Letter Issued
118 FPA - Push Out Election Received - 90 Day Petition Still Running
119 Rescission of FPA - Letter 6247
120 Reserved for Chapter 2, 2A
121 Reserved
122 Reserved
123 Suspended for Tax Computation Specialist
124 Waiting for Counsel Review of PPA/NOPPA, FPA or Advice
125 Waiting for Partnership Representative/POA Actions Required
126 Suspense for Field Response to Request
127 Reserved for Chapter 2, 2A
128 Reserved
129 Reserved
130 Reserved

Sample Review Indicators

Sample Review Indicator Definition
00 No Sample Indicator
10 Suspense - Consistency Case
11 Suspense - Manager Case Review
12 Suspense - Manager Approval Case
13 Suspense - Potential Disclosure Issue
14 Suspense - Charge Backs
15 Suspense - Other
20 Unpostables
30 Rejects
40 Excess Inventory
50 Site Transfer
60 Cases not Received
70 - 89 Local Definition

Technical Services Codes

The TSC is assigned when a return is closed to Status Code 21 on ERCS based on the address the user selects for the Form 3210. The TSC may be updated when a return is moved out of Status Code 21 to another TS status on ERCS. The TSC is used to determine the location of unassigned returns in a TS status.

TSC Description
003 Legacy (SAA) Bankruptcy Coordinator
008 East Boston Group 1
032 TEFRA - East
042 TEFRA - East
053 TEFRA - East
074 East Group 7 - NJ
094 TEFRA - East
095 East Group 6
096 Legacy (SAA) International Group 2
109 Legacy (SAA) Baltimore Group 11
110 East Baltimore Group 14
111 TEFRA - East
120 Midstates Group 24
153 Legacy (SAA) Group 13
154 Legacy (SAA) International Group 1
162 Midstates Group 17
163 Legacy (SAA) Bankruptcy Coordinator
164 Midstates Group 15
173 TEFRA - East
176 TEFRA - East
182 East Group 14 - VA
192 Midstates Group 10
206 Legacy (SAA) Bankruptcy Coordinator
214 East Group 9
216 East Group 9 - OH
221 East Group 14 - TN
228 East Group 14 - IN
246 Midstates Group 19
271 East Group 20
293 Midstates Group 21
328 Midstates Group 24
342 TEFRA - East
344 TEFRA - East
347 East Group 14 - PA
362 Midstates Group 10 - WI
363 Midstates Group 10 - MILWI
365 East Group 25
415 Midstates Group 21
435 Midstates Group 23
436 TEFRA - West
486 West Group 28 - OKC
493 West Group 28 - AUS TX
507 West Group 28 - DAL TX
531 West Group 27
568 Legacy (SAA) Bankruptcy Coordinator
595 West Group 32 - AZ
596 TEFRA - West
609 West Group 32 - CO
777 TEFRA - West
778 West Group 33
790 TEFRA - West
792 West Group 39
795 TEFRA - West
796 TEFRA - West
797 TEFRA - West
799 West Group 38
817 West Group 34
818 West Group 35
819 Legacy (SAA) Bankruptcy Coordinator
843 TEFRA - West
844 Legacy (SAA) Group 36
901 LB&I Joint Committee Review