4.7.8 Centralized Case Processing

Manual Transmittal

February 03, 2020

Purpose

(1) This transmits revised IRM 4.7.8, Examination Returns Control System (ERCS), Centralized Case Processing.

Material Changes

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

(2) Content previously under IRM 4.7.8.2, CCP User Capabilities, IRM 4.7.8.9, Role and Responsibilities of CCP Managers, and IRM 4.7.8.10, Role and Responsibilities of CCP Users, were moved to IRM 4.7.8.1.3, Responsibilities.

(3) Subsections and paragraphs have been renumbered due to the addition of the internal controls and new content.

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

Original Reference New Reference Description
4.7.8.1 4.7.8.1 Title changed from Overview to Program Scope to reflect the internal controls contained in this subsection. Information was added or moved from previous subsections for background, authority, responsibilities, program controls, acronyms, and related resources.
4.7.8.3 (1) 4.7.8.2 (1) Clarified requirements for obtaining ERCS access.
4.7.8.3.1 (4) 4.7.8.2.1 (4) Added "the employee login name should not be removed from the employee record" .
4.7.8.8 (2) 4.7.8.5 (2) Time for CCP to acknowledge the receipt of incoming cases was changed from 3 to 5 days because of the volume of cases received in CCP. Form 3210 acknowledgement was changed to say it is done electronically in ERCS.
N/A 4.7.8.5 (3) Added "cases should be updated out of Status Code 51 within 30 days of the status date" .
4.7.8.12.4.1 (2) 4.7.8.5.4.1 (2) Form 3210 acknowledgement was changed to say it is done electronically in ERCS.
4.7.8.12.4.2 4.7.8.5.4.2 Title changed from Scanning Process Form 5546, Examination Return Charge-Out Sheet, Barcode to Original Return Form 5546, Examination Return Charge-Out Sheet.
4.7.8.12.4.3 (1) 4.7.8.5.4.3 Added new paragraph one, "Form 5351 is completed with taxpayer TIN, MFT, tax period, name control and disposal code for each return being closed" .
Exhibit 4.7.8-1 Exhibit 4.7.8-1 Updated to reflect changes in CCP Program Numbers and Suspense Types.
Exhibit 4.7.8-2 Exhibit 4.7.8-2 Updated to reflect changes in CCP Reject Reasons.
Exhibit 4.7.8-3 Exhibit 4.7.8-3 Updated to reflect changes in CCP Position Codes.
Exhibit 4.7.8-4 Exhibit 4.7.8-4 Updated to reflect changes in Processing Campus Codes.

(5) Minor editorial changes have been made throughout this IRM. Some items were reworded for clarity. Also, website addresses and IRM references were reviewed and updated, as necessary.

Effect on Other Documents

IRM 4.7.8 dated May 13, 2011 is superseded.

Audience

Small Business and Self-Employed (SB/SE) and Large Business and International (LB&I) employees in Centralized Case Processing (CCP) who use ERCS.

Effective Date

(02-03-2020)

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

Program Scope

  1. This IRM section provides information and discusses procedures for staff in Centralized Case Processing (CCP).

  2. Purpose: To provide guidance needed to properly code and close examination cases

  3. Audience: Small Business/Self Employed (SB/SE) and Large Business and International (LB&I) managers, tax examiners, and clerical staff in Centralized Case Processing (CCP).

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

  5. Primary Stakeholders: LB&I.

Background

  1. CCP is responsible for closing examined and non-examined returns, and their corresponding penalty records, that are controlled on Examination Returns Control System (ERCS).

Authority

  1. By law, the IRS has the authority to conduct examinations under Title 26, Internal Revenue Code, Subtitle F - Procedural and Administration, Chapter 78, Discovery of Liability and Enforcement of Title, Subchapter A, Examination and Inspection.

Responsibilities

  1. CCP Managers: Responsibilities include but are not limited to the following:

    • Ensuring ERCS employee record information is accurate

    • Ensuring prompt assignment of incoming cases

      Note:

      Unassigned returns are associated with the CCP campus by the Processing Campus Code (PCC) on the return. Returns are not associated with a CCP group until the returns are assigned to a CCP employee on ERCS.

    • Ensuring work is evenly distributed among employees

    • Ensuring users timely and accurately input required data to ERCS

    • Ensuring all updates requiring approval are processed within two days

    • Ensuring users accurately resolve any ERCS rejects as they occur

    • Monitoring status codes and statutes of all CCP cases

    • Ensuring ERCS reports are generated and worked following the guidance in IRM 4.7.6, Reports

    • Ensuring prompt closing of all outgoing cases

    • Reporting ERCS user or system related problems to the CCP AIMS/ERCS analyst

  2. CCP Users: CCP users are defined as tax examiners and clerical support staff. Responsibilities include but are not limited to the following:

    • Adding, updating and deactivating ERCS employee records

    • Updating ERCS for all changes to returns

    • Correcting ERCS rejects from the ERCS to AIMS uploads as they occur

    • Researching and correcting returns on the weekly AIMS Error reports

    • Generating the ERCS inventory and monitoring reports

    • Reporting ERCS user or system related problems to the CCP AIMS/ERCS analyst

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.

Acronyms

  1. The table below lists acronyms used in this IRM and their definitions.

    Acronym Definition
    AAC AIMS Assignee Code
    AIMS Audit Information Management System
    CC Command Code
    CCP Centralized Case Processing
    ERCS Examination Returns Control System
    FORT Field Office Resource Team
    IAT Integrated Automation Technologies
    IDRS Integrated Data Retrieval System
    OL5081 Online 5081
    PCC Processing Campus Code
    PSP Planning and Special Programs
    RGS Report Generation Software
    ROTER Record of Tax Enforcement
    SSN Social Security Number
    TIN Taxpayer Identification Number
    UNAX Unauthorized Access of Taxpayer Accounts

Related Resources

  1. Instructions for CCP users for navigating the ERCS programs can be found in the ERCS CCP Handbook. The purpose of this section is to provide policy guidelines and procedures for the use of ERCS in Centralized Case Processing.

CCP Employee Records and Permissions

  1. In order to access ERCS and run ERCS programs, a user must have:

    • Met the prerequisites outlined in IRM 4.7.2.2.1, Meeting the Prerequisites

    • An approved Online 5081 (OL5081) for a CCP ERCS application. Refer to IRM 4.7.2, Security, for details

    • A valid login and password for the ERCS server

    • An ERCS employee record containing the user's login name

    • Permission records

Employee Records

  1. Employee records for CCP users must be added by another ERCS user with update permission for the AAC to which the new user will be assigned. Details on adding a CCP employee record to ERCS can be found in the Employee Records chapter of the ERCS CCP Handbook. The user should enter all information accurately and completely.

  2. CCP users are added to ERCS in a CCP campus primary business code of 296, 297, or 298, the secondary business code of 89700 and an ERCS defined employee group code. The employee group codes for CCP users are in the 3XXX series. These three codes make up the AAC of the employee's assignment on ERCS.

  3. CCP users utilize Position Codes 302 - 307, 310 and 400. See Exhibit 4.7.8-3 for the definitions of these position codes.

  4. ERCS employee records should be inactivated when the employee leaves the service or transfers within the service to a non-ERCS position. The employee’s login should not be removed from the record because it links the employee to the audit trails.

  5. ERCS employee records should be updated to the new AAC if the employee transfers from CCP to another ERCS position outside of CCP.

Permission Records

  1. A CCP user's permission records are added by a CCP AIMS/ERCS analyst. Permission records may be added before or after the employee record is added.

  2. CCP users are generally given read and write permission for the CCP campus.

  3. CCP managers are generally given read and first level approval permission for the CCP campus.

  4. Permission records should be deleted when they are no longer needed.

  5. Inactivating the employee record on ERCS also results in the deactivation of the employee's permission records on ERCS.

Security

  1. ERCS operates on the principle that users should only change data on returns under the user's control. Consequently, a CCP user may change information only on returns in CCP status codes within the AACs in which the user has permission. Throughout ERCS, error messages appear when a user attempts to update returns for AACs or status codes for which the user does not have permission.

  2. Because of the potential for section 1204 violations, reports generated in CCP that contain any Record of Tax Enforcement (ROTER) information are to be shared only at the manager level or higher. 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 in CCP must be aware of the potential for Unauthorized Access of Taxpayer Accounts (UNAX) violations from the use of ERCS. As with Integrated Data Retrieval System (IDRS) and AIMS, 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 a spouse. If the user's personal SSN or that of a 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.

Approval Authority

  1. Updates to returns in CCP requiring managerial approval are approved by a CCP manager. Types of updates by users in CCP that require approval are:

    • Changes to the statute of limitations

    • Non-examined closures of returns generating a Command Code (CC) AMSOC

      Note:

      Examined and non-examined closures of returns in CCP are input into AIMS bypassing ERCS. During the weekly AIMS to ERCS processing, the ERCS returns are closed.

  2. Updates to returns on ERCS requiring approval are not sent to AIMS until they are approved.

  3. Disapproval of updates causes the items to revert to their prior value. Returns pending approval by a CCP manager cannot be transferred or closed on ERCS. ERCS does not create a "reject" list or otherwise mark disapproved updates.

  4. Although returns should be in Status Code 51 on ERCS and AIMS, cases may be received in CCP even though they are still pending managerial approval in the group for the transfer. Returns in transit to CCP can be monitored using the "In Transit Report" or by generating the "Suspense Report" for Suspense Type 498. Both reports are on the Inventory Reports menu.

  5. Updates pending managerial approval, show a "p" next to the value on the screens in the Correct or Display Records program.

Work Flow and Processes

  1. Work flow in CCP begins with receipt and control into CCP and ends with case closures.

  2. After receipt in CCP, the Form 3210 should be acknowledged electronically on ERCS within 5 days, and the Form 3198, Special Handling Notice for Examination Case Processing, analyzed for case assignment.

  3. Cases should be updated out of Status Code 51 within 30 days of the status date.

  4. The ERCS record is checked to verify it is controlled on AIMS, if AIMS control is required.

    Note:

    ERCS penalty records are not controlled on AIMS.

  5. The statute should be checked and updated as necessary on the ERCS record.

  6. The following values should be verified and updated as necessary on the ERCS record via the Integrated Automation Technologies (IAT) system:

    • Status code

    • Type suspense

    • Action date

    • CCP employee ID

    • Date in CCP

    • Program number

  7. Returns are selected for sample review on ERCS as they are updated out of Status Code 51. If a return is selected for sample review, the sample selection sheet should be printed and attached to the front of the case file.

Field Office Resource Team

  1. The Field Office Resource Team (FORT) is comprised of revenue agents, tax auditors, and tax compliance officers. The FORT serves as a liaison between CCP and Planning and Special Programs (PSP), Technical Services and the Examination groups in the field.

  2. If CCP employees encounter issues with returns that cannot be resolved in CCP, the returns are sent to the FORT.

Examined, Non-streamlined Case Closures

  1. Examined, non-streamlined case closures are assigned to a tax examiner, the Form 5344, Examination Closing Record, is coded and the tax examiner closes the case on AIMS.

Examined, Streamlined Case Closures

  1. Examined, streamlined case closures are identified by a notation on Form 3198, and are closed on the Report Generation Software (RGS). These returns are routed to the streamline closure team for closure.

Non-examined Case Closures

  1. CCP employees process non-examined case closures based on whether the return is paperless or an original tax return. Copies of returns are processed in the same manner as original returns.

Paperless Non-examined Closures
  1. Form 5351, Examination Non-Examined Closings, and Form 3210 are e-faxed into the Campus FORT or the designated CCP team.

  2. Form 5351 and Form 3210 are stamped, validated and acknowledged. Form 3210 is acknowledged electronically in ERCS. Form 5351 is maintained for processing the non-examined closures.

  3. The Taxpayer Identification Number (TIN) listed on the Form 5351 is input into the IAT system. IAT updates the case from Status Code 51 to Status Code 90. No source document folder is needed for Files.

Original Return - Form 5546, Examination Return Charge-Out Sheet
  1. Cases are updated from Status Code 51 to Status Code 57 and the Primary Campus Code (PCC) is verified and updated as necessary.

  2. Cases are separated by blocking series and closed to Status Code 90 via CC AMSOC on AIMS using the IAT system.

  3. IAT generates a closure sheet for preparation of Form 6502, Employee Source Document Folder Label, for Files.

Original Return - No Form 5546
  1. Form 5351 is completed with the taxpayer TIN, MFT, tax period, name control, disposal code and survey reason code, if applicable, for each return being closed.

  2. The same work flow in IRM 4.7.8.5.4.2, Original Return Form 5546, Examination Return Charge-Out Sheet is followed for closing an original tax return when there is no Form 5546 plus the additional step below.

  3. An AMDISA print is generated upon closure. The AMDISA print includes the document sequence number, input operator number, closing date and disposal code.

IAT Closures

  1. Closures done through IAT close the AIMS record to Status Code 90. When batching processing is run on the following weekend the ERCS records are updated to Status Code 90.

Special Closures

  1. Returns that have been selected for sample review should be sent to sample review instead of Files when the return is closed. Normally, the returns should be shipped to the address on the sample review sheet that is attached to the front of the case file.

ERCS Codes

  1. ERCS uses a combination of AIMS and ERCS codes for inventory control records and employee records. The following codes are defined on ERCS only. More information about these codes may be found in the Codes chapter of the ERCS CCP Handbook, or in Exhibit 4.7.8-1, Exhibit 4.7.8-2, or Exhibit 4.7.8-3.

    • Suspense type and action date

    • Reject reason

    • CCP employee ID

    • Date in and date out of CCP

    • Program numbers

    • CCP AACs

    • CCP position codes

    • ERCS penalty Master File Tax (MFT) codes

Reports

  1. For a complete listing of ERCS reports available for CCP users, refer to the ERCS CCP Handbook.

  2. IRM 4.7.6, Reports, contains detailed descriptions, as well as, recommended uses and frequency of generating reports available through ERCS.

CCP Program Numbers and Suspense Types

Program numbers are used in CCP to classify types of work. The only association between the program number and any other ERCS codes (such as status code, suspense type or number of days in suspense) is by user association. ERCS does not enforce consistency between the program number and the other values listed in the chart below. More information for reports containing these codes may be found in IRM Exhibit 4.7.6-5, Reports with Codes:

Status Code Suspense Types Days Program Description Comments
51 498 30 --- In-Transit There is no program number associated with returns in-transit
52 413 45 10062 Estate and Gift Cincinnati only - Form 706, Form 709
52 414 45 10058 Claim Includes Disposal Code 34
52 416 45 10111 Special Processing Cases identified as other than Pipeline or Restricted Interest
52 417 45 10720 Excise Cincinnati only -Form 720
52 418 45 10940 Employment - Stand Alone Cincinnati only - Form 940 and Form 941
52 476 45 10941 Employment - Tag Along Cincinnati only - related return
53 420 60 10121 Restricted Interest per Form 3198 (TC 34X required)
53 421 60 10120 Complex Interest No -I freeze and no TC 34X required
53 422 60 10218 Net Rate Netting per Form 3198 (Ogden only)
53 423 60 16404 6404(g) - 2nd Notice Date See note below
54 430 20 10052 Expedite Processing - Other Includes Joint Committee and other expedited processing
54 431 20 10053 Statute within 120 days Short statute
54 432 20 14760 Over $100,000 Agreed, unpaid
54 433 20 10219 Expedite Net Rate Netting per Form 3198 (Ogden only)
54 434 20 14761 IRC 6166 Installment Cases Cincinnati only - Form 706
54 435 20 10054 VPN Project Virtual Private Network (VPN) / Telephone Excise Tax Refund (TETR) (Cincinnati only)
54 436 20 10055 Restricted Interest - Expedite when short statute or over $100,000
55 440 45 10073 Pipeline Routine closure
55 441 45 10303 Unagreed Default Stat Notice, from Technical Services
55 442 45 10074 Streamline No-change and simple agreed (Cincinnati & Memphis only)
56 452 60 10141 Suspense - SFR ---
56 453 60 10531 Suspense - Other Disaster or other projects
57 460 45 10090 Survey Non-examined disposal codes except 34
57 460 45 10092 Paperless Survey Non-examined paperless surveys
58 470 60 10996 OVDI Closures Cincinnati or Memphis only
58 454 60 --- Suspense - Field Review ---
59 --- 60 --- --- Cases sent to the FORT for resolution.

Note:

If 6404(g) is checked on Form 3198 with or without a date or money on a single year, the case is a single waiver 6404(g). It becomes a Pipeline case. If 6404(g) is checked on Form 3198 with dates on 1st and 2nd notice date line, the case is not a single waiver and it becomes a Restricted Interest case. If 6404(g) is checked on Form 3198 with or without a date or money and not applicable is also checked, the case is not a 6404(g). It becomes a Pipeline case.

CCP Reject Reasons

ERCS reject reasons are associated with returns sent back to the group from CCP. When the group sends the return back to CCP, the reject reason is removed from the return. More information for reports containing these codes may be found in IRM Exhibit 4.7.6-5, Reports with Codes:

Reject Reason Definition
400 AIMS/ERCS Problem
401 Database Update Only; Physical Case not Forwarded to CCP
402 TC 976/977 Amended Return
403 Informant Claim (ICE) Indicator 1 or 3 on AIMS
404 Form 5344 Missing or Incomplete; Current Updated Closing Documents Needed
405 Freeze Code on AIMS
406 Tax Mis-match on Report/Trans.
407 Combat Zone
408 Signatures(s) Required on Form 8278
409 CID - Z Freeze Present
410 Case Mis-routed; Mailed to Wrong CCP Site
412 Partial Assessment Completed
414 Group Request
416 Error on Report/Missing Report
417 PCS Controlled:
418 Penalty Computation Incorrect/Incomplete
419 PICF-Cd
424 Other
427 Delinquent Return/SFR Problem
432 Sent to CCP in Error
436 Missing Letter
438 Non-examined Closure Problems (Includes Paper and Paperless Issues)
442 To Tech Services
443 Docketed Case (DC 07 or DC 11), Forward to Tech Services
444 Related Return Problems
445 Employee Audit - Mandatory Review by Tech Services
446 Joint Committee Case - Forward to Tech Services
451 Return not on AIMS
452 Controlled in Another Area/PBC

CCP Position Codes

The table below lists the valid position codes and grade ranges used in ERCS for CCP employee records.

Position Code Definition Grade
302 Operations Manager 07-13
303 Department Manager and Front Line Manager 06-13
304 Management Analyst/Functional Automation Coordinator 05-11
305 Lead Tax Technician 05-09
306 Tax Compliance Officer/Revenue Agent 05-13
307 Tax Examiner 05-09
308 RESERVED ---
309 RESERVED ---
310 Clerical Staff 02-06
400 Program Analyst/Tax Analyst 07-13

Processing Campus Codes

The PCC determines the ownership and location of unassigned returns in CCP.

PCC Definition Servicing Returns for Area/Industry
17 Cincinnati Campus 212-214, 330
29 Ogden Campus 320-329
49 Memphis Campus 201-207, 217