4.10.1 Overview of Examiner Responsibilities

Manual Transmittal

August 24, 2017

Purpose

(1) This transmits a complete revision of IRM 4.10.1, Examination of Returns, Overview of Examiner Responsibilities.

Material Changes

(1) Minor editorial changes have been made throughout this IRM. Website addresses, legal references, and IRM references were reviewed and updated as necessary.

(2) Significant changes to this IRM are listed below:

Prior Reference New Reference Description of Change
IRM 4.10.1.1 IRM 4.10.1.1 Revised the title to properly reflect the new information contained in this subsection. Also added new content to describe the internal control framework required by IRM 1.11.2.2.5, Address Management and Internal Controls.
N/A IRM 4.10.1.1.1 through IRM 4.10.1.1.7 Added content to provide background information, legal authorities that govern the actions covered in this IRM, roles and responsibilities, information about program reports, terms, acronyms, and related resources available to assist examiners when conducting examinations.
IRM 4.10.1.2 N/A Deleted content because it is no longer applicable.
IRM 4.10.1.3 IRM 4.10.1.1.7 Moved content to new subsection titled "Related Resources."
IRM 4.10.1.4 IRM 4.10.1.1.3(4) and (5) Moved content to new subsection detailing responsibilities.
N/A IRM 4.10.1.2.1 through IRM 4.10.1.2.1.9 Added new subsection detailing the 10 fundamental rights under the Taxpayer Bill of Rights (TBOR). Also included content explaining an examiner’s responsibilities related to the TBOR.
IRM 4.10.1.5 IRM 4.10.1.2.1.2 Moved content to new subsection regarding the taxpayer’s right to quality service.
N/A IRM 4.10.1.2.2 through IRM 4.10.1.2.3 Added new subsections to provide information regarding RRA 98, Internal Revenue Code sections, and IRS policies that pertain to taxpayer rights.
N/A IRM 4.10.1.4.2 Added new content regarding the use of SmartID cards.
N/A IRM 4.10.1.4.4 Added content to provide guidance on the use of digital signatures.
IRM 4.10.1.5.1 IRM 4.10.1.4.6 Moved, renumbered, and updated content.
IRM 4.10.1.5.2 IRM 4.10.1.4.5 Moved, renumbered, and updated content.
IRM 4.10.1.5.3 and IRM 4.10.1.5.3.1 IRM 4.10.1.2.1.2 and IRM 4.10.1.3 Content incorporated into new subsection regarding a taxpayer’s right to quality service and IRM 4.10.1.3, Communication.
IRM 4.10.1.5.3.2 IRM 4.10.1.3.2 Moved, renumbered, and updated content. Also added guidance regarding the use of digital signatures.
IRM 4.10.1.6, IRM 4.10.1.6.1, IRM 4.10.1.6.3, IRM 4.10.1.6.7, and IRM 4.10.1.6.10 IRM 4.10.1.2 Content was incorporated into new subsection regarding taxpayer rights and the 10 fundamental rights under the TBOR.
IRM 4.10.1.6.2 through IRM 4.10.1.6.2.8 IRM 4.10.1.2.1.8 Moved, renumbered and updated content. Deleted content already contained in IRM 4.11.55.2.3, Privileged Communications, and added IRM reference.
IRM 4.10.1.6.4 IRM 4.10.1.2.1.11 Moved, renumbered and updated content.
IRM 4.10.1.6.5 IRM 4.10.1.2.1.15 Moved, renumbered and updated content.
IRM 4.10.1.6.6 IRM 4.10.1.2.1.10 Content has been moved, renumbered and updated, and was incorporated into new subsection "Right to a Fair and Just Tax System."
IRM 4.10.1.6.8 IRM 4.10.1.2.2.1 Moved, renumbered and updated content to clarify that initial contact letters must be sent separately to each spouse. Also revised procedures to provide instructions regarding attaching Form 12832, Cover Page for Compliance Tax Letters, to the front of each package.
IRM 4.10.1.6.9 and IRM 4.10.1.6.9.1 IRM 4.10.1.2.2.2 Moved, renumbered and updated content.
IRM 4.10.1.6.9.1.1 IRM 4.10.1.4.3 Moved, renumbered and updated content.
IRM 4.10.1.6.9.1.2 IRM 4.10.1.2.2.2 Incorporated content into new subsection containing guidance related to employee contact information and updated where warranted.
IRM 4.10.2.6.9.2 IRM 4.10.1.2.2.3 Moved, renumbered and updated content.
IRM 4.10.1.6.10 IRM 4.10.1.2.1.8 Content moved to new subsection regarding a taxpayer’s right to confidentiality.
IRM 4.10.1.6.11 IRM 4.10.1.2.1.12 Moved, renumbered and updated content.
IRM 4.10.1.6.12 through IRM 4.10.1.6.12.4.4 IRM 4.10.1.2.1.14 Moved and renumbered subsection. Removed content that is contained in another IRM and added reference to that IRM.
N/A IRM 4.10.1.3.4 Added guidance regarding leaving information on answering machines or voice mail.
N/A IRM 4.10.1.3.5 Added guidance regarding the use of fax machines and Enterprise e-Fax (EEFax).
N/A IRM 4.10.1.2.1.13 Added guidance regarding data protection, including data stored on a laptop computer, protection of Personally Identifiable Information (PII) and Sensitive But Unclassified (SBU) data, and how to report the loss, theft or unauthorized disclosure of PII or SBU data.
N/A IRM 4.10.1.3.3 Added guidance regarding sending communications to a taxpayer’s representative.
IRM 4.10.1.7 IRM 4.10.1.5 through IRM 4.10.1.5.3 Renumbered subsection; changed title to "Embedded Quality" and added content regarding the Embedded Quality program.
IRM 4.2.4.2.1 IRM 4.10.1.2.2.2 and IRM 4.10.1.4.1 Content was updated and incorporated into IRM 4.10.1.2.2.2, Employee Contact Information, and IRM 4.10.1.4.1, Pocket Commissions.
IRM 4.10.1.8 IRM 4.10.1.1.7 Content was incorporated into new subsection titled "Related Resources."
IRM 4.2.4.2.2 IRM 4.10.1.4.8 Content was moved and renumbered.
IRM 4.2.4.2.3 IRM 4.10.1.4.7 Content was moved and renumbered.

Effect on Other Documents

This material supersedes IRM 4.10.1, dated February 24, 2015. The material previously contained in IRM 4.2.4, Employee Conduct and Responsibilities, dated October 1, 2003, was updated and incorporated into this IRM. IRM 4.2.4 was obsolesced simultaneously with the release of this IRM. See the Material Changes section for explanation of updates to content in IRM 4.2.4.

Audience

SB/SE Field Examination Employees and Large Business & International (LB&I) Examiners

Effective Date

(08-24-2017)

Michael W. Damasiewicz
Director, Exam - Field and Campus Policy
Small Business Self Employed

Program Scope and Objectives

  1. Purpose. This IRM section describes basic responsibilities related to taxpayer rights, employee contact information, oral and written communication, and Embedded Quality. In addition, IRM 4.10.1 provides:

    1. The authority for conducting examinations.

    2. Related resources, including other IRM sections and relevant websites.

  2. Audience. These procedures apply to examiners in SB/SE Field Examination and LB&I.

  3. Policy Owner. The Director, Examination - Field and Campus Policy, who is under the Director, Headquarters Examination.

  4. Program Owner. Field Examination General Processes (FEGP), which is under the Director, Examination - Field and Campus Policy.

  5. Contact Information. To recommend changes or make any 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 responsibilities that examiners should understand and apply in the performance of their duties.

Authority

  1. By law, the Service has the authority to conduct examinations under Title 26, Internal Revenue Code, Subtitle F – Procedure and Administration, Chapter 78, Discovery of Liability and Enforcement of Title, Subchapter A, Examination and Inspection, which includes, but is not limited to, the following IRC sections:

    • IRC 7602, Examination of books and witnesses

    • IRC 7605, Time and place of examination

    Note:

    Additional information related to conducting examinations is contained in the 26 CFR 601.105, Statement of Procedural Regulations.

Responsibilities

  1. The Director, Headquarters Examination, is the executive responsible for providing policy and guidance for field employees and ensuring consistent application of policy, procedures and tax law to effect tax administration while protecting taxpayers’ rights. See IRM 1.1.16.3.5, Headquarters Examination, for additional information.

  2. The Director, Examination - Field and Campus Policy (formerly known as the Director, Examination AUR/Policy), reports to the Director, Headquarters Examination, and is responsible for the delivery of policy and guidance that impacts the field examination process. See IRM 1.1.16.3.5.1, Exam/AUR Policy, for additional information.

  3. Field Examination General Processes (FEGP), which is under the Director, Examination - Field and Campus Policy, is the group responsible for providing policy and procedural guidance on standard examination processes to field employees. See IRM 1.1.16.3.5.1.1, Examination-Field General Processes, for additional information.

  4. All examiners must perform their professional responsibilities in a way that supports the IRS Mission. This requires examiners to provide top quality service and to apply the law with integrity and fairness to all.

  5. Income tax examiners and their managers should thoroughly acquaint themselves with the examination procedures and information contained in this IRM, as well as other resources, such as those listed in IRM 4.10.1.1.7, Related Resources, below.

Program Reports

  1. Reports to monitor the current year’s work plan, as well as specific programs, are derived from a variety of sources including the Audit Information Management System (AIMS, AIMS - Centralized Information System (A-CIS)), and Examination Returns Control System (ERCS) databases. These reports provide Headquarters and Field Examination with timely and reliable information. There are a variety of reports designed to meet the needs of the group or function. Many of the reports used to monitor examination processes are listed in the table below:

    Report Title Reference/Definition
    Table 10.1, $100,000 Case Listing $50,000 or Greater Delete Listing IRM 4.4.27.4.1,Table 10.1, $100,000 Case Listing $50,000 or Greater Delete Listing
    Table 16, Whipsaw Case Listing IRM 4.4.27.4.3, Table 16, Whipsaw Case Listing
    Table 36, Examination Program Monitoring IRM 4.4.27.5.3, Table 36, Examination Program Monitoring, and IRM 1.4.40.5.1, AIMS Tables 36
    Table 37, Examination Program Monitoring IRM 4.4.27.4.4, Table 37, Examination Program Monitoring
    Table 4.0 and 4.1 - Statute Control Reports IRM 4.4.27.5.1, Table 4.0 and 4.1 - Statute Control Reports; IRM 25.6.23, Examination Process-Assessment Statute of Limitations Controls; and IRM 1.4.40.5.2, AIMS Table 4.1
    Unallowable Items Frozen Refund Report IRM 4.4.27.5.14, Unallowable Items Frozen Refund Report
    Monthly Performance Trend Reports IRM 4.7.6.5, Monitoring Reports
    Open Inventory Status IRM 4.7.6.3, Inventory Reports
    National Quality Review System IRM 1.4.40.5.4, NQRS and EQRS Reports
    Field Exam Mail Customer Satisfaction Report The SB/SE Field Exam Mail Survey Report is compiled annually by Finance, Research, & Strategy as part of the IRS agency-wide initiative to monitor and improve taxpayer satisfaction with IRS services. It summarizes a monthly random sample of taxpayers whose cases were closed in Field Exam. See Customer Satisfaction for additional information.

    .

  2. Periodic program reviews are conducted to:

    • Assess the effectiveness of specific programs within Examination or across the organization,

    • Determine if procedures are being followed,

    • Validate policies and procedures, and

    • Identify and share best/proven practices.

  3. Additional information can be found in IRM 4.4.27, Reports; IRM 4.7.6, Reports; and IRM 1.4.40.5, Monitoring Reports Overview.

Terms

  1. The following table contains a list of terms used throughout this IRM.

    Term Definition
    Data Protection The examiner’s responsibility to protect tax and other sensitive information whether directly engaged in tax administration or working in support organizations.
    Digital Signature A digital signature is a way to ensure that an electronic document (e-mail, spreadsheet, text file, etc.) is authentic. Authentic means you know who created the document and you know that it has not been altered in any way since that person created it. The signer is required to possess a certificate-based digital ID (a digital certificate) that links the signer and document.
    Embedded Quality A way of doing business that builds commitment and accountability for continuous improvement in customer satisfaction, employee satisfaction and business results. EQ encompasses two systems (Embedded Quality Review System and National Quality Review System). EQRS is used by group managers and NQRS is used by quality reviewers.
    Embedded Quality Review System A web-based tool used to capture and share individual performance review feedback as it relates to case actions.
    Examiner Revenue agents and tax compliance officers/tax auditors located in one of the seven SB/SE Field Examination areas who conduct field examinations of income tax returns filed by individuals, small businesses, and other entities to ensure compliance with Federal tax laws.
    Group Manager A first level supervisor responsible for assigning, directing, and reviewing the work of subordinate employees; planning, scheduling, and coordinating work operations; planning and carrying out the training and development of employees; evaluating employees’ work performance; and performing all other related administrative functions.
    National Quality Review System A web-based tool used by quality reviewers to capture national program review data obtained through case reviews. NQRS is used to report the official organizational business quality results.
    Personal Identification Number The 10-digit number that identifies the employee and is located on the front of the SmartID or Physical Access Control Card.
    Pocket Commission An authorized form of identification media designed to provide evidence of the holder's specific authority and responsibility when contacting the public outside of Internal Revenue Service (IRS) facilities and/or conducting US Government business with federal, state, local or foreign officials as authorized.
    Pseudonym A fictitious name requested and used by the examiner for the protection of their personal safety and the prevention of harm or danger.
    SEID A computer generated alpha numeric string that provides a unique identifier for each IRS employee, eliminating the need for social security number identification. SEID numbers are found on the Discovery Directory or Outlook.
    SmartID Card An identity credential designed with smart card technology (computer chip embedded into the card) to verify the card holder’s identity.
    Work Plan Annual goals that are developed and set at the operating unit level, Area level and territory level, based on the examination business plan. See IRM 1.4.40.3.5, Annual Examination Goals.

Acronyms

  1. The following table lists commonly used acronyms and their definitions used throughout this IRM.

    Acronym Definition
    A-CIS AIMS - Centralized Information System
    AIMS Audit Information Management System
    CCP Centralized Case Processing
    CJE Critical Job Element
    EEFAX Enterprise Electronic Facsimile
    EOAD Examination Operational Automation Database
    EQ Embedded Quality
    EQRS Embedded Quality Review System
    ER Early Referral
    ERCS Examination Returns Control System
    FTS Fast Track Settlement
    GMCM Group Manager Concurrence Meeting
    GSA General Services Administration
    IDR Information Document Request
    IRC Internal Revenue Code
    LB&I Large Business & International
    NQRS National Quality Review System
    OJI On-the-Job Instructor
    PID Personal Identification (PID) Number
    PII Personally Identifiable Information
    POA Power of Attorney
    RRA 98 Restructuring and Reform Act of 1998
    SBU Sensitive But Unclassified
    SAMC Situation Awareness Management Center
    SEID Standard Employee Identifier
    TAC Taxpayer Assistance Center
    TAS Taxpayer Advocate Service
    TBOR Taxpayer Bill of Rights
    TIGTA Treasury Inspector General for Tax Administration
    UNAX Unauthorized Access
    W&I Wage & Investment

Related Resources

  1. The IRMs in Part 4, Chapter 10 (see table below) contain many of the procedures and guidelines examiners will use.

    IRM Title Guidance for
    IRM 4.10.2 Pre-Contact Responsibilities Completing required responsibilities and analyses before an examination is initiated, pre-contact planning of the examination, and instructions for contacting taxpayers.
    IRM 4.10.3 Examination Techniques Using appropriate procedures and techniques to conduct an effective examination.
    IRM 4.10.4 Examination of Income Examining income, including the minimum income probe requirements for all types of returns, in-depth examination techniques, and formal indirect methods.
    IRM 4.10.5 Required Filing Checks Verifying taxpayers are in compliance with all federal tax return filing requirements and assessing the audit potential of these returns.
    IRM 4.10.6 Penalty Considerations Recognizing, developing and finalizing penalty determinations; discusses common taxpayer defenses, and furnishes guidelines for documenting the workpapers.
    IRM 4.10.7 Issue Resolution Identifying the applicable law, correctly interpreting its meaning in light of congressional intent, and, in a fair and impartial manner, correctly applying the law based on the facts and circumstances of the case.
    IRM 4.10.8 Report Writing Preparing reports of audit findings, in terms of content and format; also provides instructions for some case closing requirements.
    IRM 4.10.9 Workpaper System and Case File Assembly Developing lead sheet and workpaper content, and case file organization. These guidelines are provided to promote quality and consistency in the preparation and completion of lead sheets, workpapers, and case files.
    IRM 4.10.10 Standard Paragraphs and Explanation of Adjustments Using standard paragraphs and explanation of adjustments that specify reasons for the examiner's adjustment in a particular situation. Standard explanations are given an explanation number and listed under a common category.
    IRM 4.10.15 Report Generation Software Using RGS to compute corrected tax, estimated interest, penalties and generate audit reports, create various forms and letters, allow examiners to document actions and findings, and process and archive examination results.
    IRM 4.10.27 Identity Theft Case Processing for Field Examiners Examining and processing cases with an identify theft issue.
  2. In addition to the list in the table above, there are other relevant IRMs examiners will use, including, but not limited to:

    • IRM 4.11, Examining Officers Guide (EOG)

    • IRM 4.12.1, Nonfiled Returns

    • IRM 4.13, Audit Reconsideration

    • IRM 4.2.1, General Examination Information

    • IRM 4.20, Examination Collectibility

    • IRM 4.22, National Research Program (NRP)

    • IRM 4.23, Employment Tax

    • IRM 4.31, Pass-Through Entity Handbook

    • IRM 4.4, AIMS Procedures and Processing Instructions

    • IRM 20.1, Penalty Handbook

    • IRM 25.1, Fraud Handbook

    • IRM 25.5, Summons

    • IRM 25.6, Statute of Limitations

    • IRM 25.15.6, Field Examination Procedures (innocent spouse)

    • IRM 1.11.6, Using and Researching the Internal Revenue Manual (IRM)

  3. Helpful information can be found on websites, including, but not limited to the following:

    • IRWeb (The IRS Intranet)

    • SB/SE Today

    • Examination

    • Issues and Procedures

    • Servicewide Penalties Knowledge Network

    • Centralized Case Processing

    • Privacy & Disclosure Virtual Library

    • Cybersecurity

    • Large Business & International (LB&I)

    • ReferenceNet (access to Accurint®, LexisNexis® and Westlaw®)

    • IRM Online

    • Find an Expert

    • RGS - Report Generation Software

    • Forms, Publications and Documents

    • IRS.gov

Taxpayer Rights

  1. Examiners have the ongoing responsibility to ensure that all taxpayer rights are protected and observed throughout the audit, whether these rights are mandated by statute or provided as a matter of policy.

  2. Examiners should be aware of and observe all taxpayer rights provided by Public Laws, including the IRS Restructuring and Reform Act of 1998 (RRA 98), the IRC, and IRS policies, including those rights summarized in the Taxpayer Bill of Rights (TBOR).

Taxpayer Bill of Rights (TBOR)

  1. The Taxpayer Bill of Rights (TBOR) provides the nation's taxpayers with a better understanding of their fundamental rights when dealing with the IRS. Pub 1, Your Rights as a Taxpayer, contains the TBOR and is provided to taxpayers at the beginning of an audit. The TBOR takes multiple rights and groups them into ten broad categories. IRC 7803(a)(3) requires the IRS Commissioner ensure that IRS employees are familiar with taxpayer rights, including the ten that make up the TBOR.

  2. Examiners must formally notify the taxpayer of their rights by issuing Pub 1 with the initial contact letter (Section 6627 of Public Law 100-647). Also see IRM 4.10.2.8.1, Making Initial Contact. Pub 1 provides advance general notice that third parties may be contacted during the course of the examination (IRM 4.11.57.4, Advance Notification to the Taxpayer).

  3. During the initial conversation with the taxpayer by telephone or in person, examiners must explain and discuss the taxpayer's rights as outlined in Pub 1 and answer any questions the taxpayer may have. See IRM 4.10.2.8.2(2), Initial Telephone Conversation, and IRM 4.10.3.3(6), Interviews: Authority and Purpose, for additional guidance.

  4. This section discusses how each taxpayer right in the TBOR impacts the examination process, as shown below:

    • Right to Be Informed, IRM 4.10.1.2.1.1.

    • Right to Quality Service, IRM 4.10.1.2.1.2.

    • Right to Pay No More than the Correct Amount of Tax, IRM 4.10.1.2.1.3.

    • Right to Challenge the IRS’s Position and Be Heard, IRM 4.10.1.2.1.4.

    • Right to Appeal an IRS Decision in an Independent Forum, IRM 4.10.1.2.1.5.

    • Right to Finality, IRM 4.10.1.2.1.6.

    • Right to Privacy, IRM 4.10.1.2.1.7.

    • Right to Confidentiality, IRM 4.10.1.2.1.8.

    • Right to Retain Representation, IRM 4.10.1.2.1.9.

    • Right to a Fair and Just Tax System, IRM 4.10.1.2.1.10.

  5. This section also provides additional detail regarding taxpayer rights, as follows:

    • Innocent Spouse Relief, IRM 4.10.1.2.1.11.

    • Unauthorized Access (UNAX), IRM 4.10.1.2.1.12.

    • Data Protection, IRM 4.10.1.2.1.13.

    • Notification of Potential Third Party Contacts, IRM 4.10.1.2.1.14.

    • Interest Abatement, IRM 4.10.1.2.1.15.

Right to Be Informed
  1. Taxpayers have the right to know what they need to do to comply with the tax laws. They are entitled to clear explanations of the laws and IRS procedures in all tax forms, instructions, publications, notices, and correspondence. They have the right to be informed of IRS decisions about their tax accounts and to receive clear explanations of the outcomes.

  2. To protect the taxpayer’s "Right to Be Informed," examiners must ensure:

    1. Before or at an initial in-person audit interview, the audit process and the taxpayer’s rights under that process are explained to the taxpayer (IRC (7521(b)(1)). See IRM 4.10.2.8.2, Initial Telephone Conversation, and IRM 4.10.3.3(6), Interviews: Authority and Purpose.

    2. Joint and several liability and relief provisions available under IRC 6015 are explained. See IRM 4.10.1.2.1.11, Innocent Spouse Relief, for additional guidance.

    3. Penalty determination notices include the name of the penalty, the applicable IRC section, and a computation of the penalty (IRC 6751(a)).

    4. Examination reports issued with 30-day letters identify the amounts (if any) of tax due, interest, additional amounts, additions to the tax, and assessable penalties included (IRC 7522(b)(3)).

    5. Pub 3498, The Examination Process, is provided to taxpayers with the first examination report, and with all 30-day letters (Section 3504 of P.L. 105-206 (RRA 98)). See IRM 4.10.8.1.2, Publications to Include with Audit Reports, for guidance.

    6. Notices of deficiency described in IRC 6212 identify the amounts (if any) of tax due, additional amounts, additions to the tax, and assessable penalties included (IRC 7522(b)(1)).

    7. All notices fully or partially disallowing a taxpayer refund claim explain the specific reasons why the claim was disallowed (IRC 6402(l)).

    8. The taxpayer is notified of their rights each time a request is made to the taxpayer to consent to extend the period of time for assessment. See IRM 25.6.22.3, Notification of Taxpayer’s Rights, and IRC 6501(c)(4)(B).

Right to Quality Service
  1. Taxpayers have the right to receive prompt, courteous, and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service.

  2. Examiners play an important role in providing quality service. To protect the taxpayer’s "Right to Quality Service," examiners:

    1. Should generally contact taxpayers during the normal business hours of 8:00 a.m. to 6:00 p.m. (taxpayer’s time zone). See IRM 4.10.2.8(5), Initial Contact: Overview, for additional information.

    2. Should ensure oral and written communications are firm, businesslike and professional. See IRM 4.10.1.3, Communication, for additional guidance.

Right to Pay No More than the Correct Amount of Tax
  1. Taxpayers have the right to pay only the amount of tax legally due, including interest and penalties, and to have the IRS apply all tax payments properly.

  2. To protect the taxpayer’s "Right to Pay No More than the Correct Amount of Tax," examiners:

    1. Should consider whether the taxpayer qualifies for penalty relief based on "reasonable cause" (IRM 20.1.1.3.2, Reasonable Cause).

    2. Must abate any portion of any penalty attributable to erroneous written advice furnished by an officer or employee of the IRS acting in their official capacity (IRC 6404(f)).

    3. Can propose penalties verbally or on a report, however when managerial approval is required under IRC 6751(b) it must be documented prior to the case closing from the group. See IRM 20.1.5.1.4, Managerial Approval of Penalties.

Right to Challenge the IRS’s Position and Be Heard
  1. Taxpayers have the right to raise objections and provide additional documentation in response to formal IRS actions or proposed actions, to expect that the IRS will consider their timely objections and documentation promptly and fairly, and to receive a response if the IRS does not agree with their position.

  2. To protect the taxpayer’s "Right to Challenge the IRS’s Position and Be Heard," examiners:

    1. Must evaluate documentation received using independent and objective judgment and decide all matters based on their merits, free from bias and conflicts of interest. See IRM 4.10.7.4, Arriving at Conclusions, and IRM 4.10.8.11.9.1, Additional Information Received, for additional guidance.

    2. Must consider the taxpayer’s position and offer a manager’s conference, when appropriate. See IRM 4.10.7.5.1, Closing Phase of the Examination, for additional guidance.

    3. Should inform the taxpayer and/or representative of Fast Track Settlement as a resolution option when appropriate. See IRM 4.10.7.5.5, SB/SE Fast Track Settlement, for additional guidance.

Right to Appeal an IRS Decision in an Independent Forum
  1. Taxpayers are entitled to a fair and impartial administrative appeal of most IRS decisions, including many penalties, and have the right to receive a written response regarding the Office of Appeals’ decision. Taxpayers generally have the right to take their cases to court.

  2. To protect the taxpayer’s "Right to Appeal an IRS Decision in an Independent Forum," examiners:

    1. Must inform the group manager when they believe a case will have unagreed issues and be aware of the procedures in IRM 4.10.8.11, Unagreed Case Procedures (SB/SE Field and Office Examiners only).

    2. Must issue the appropriate 30-day letter to transmit the examination report to the taxpayer and allow the taxpayer 30 days to request Appeals consideration of their case (unless specifically excluded from Appeals consideration). See IRM 4.10.8.11, and IRM 4.10.8.11.1, 30-Day Letters, for guidance.

    3. Should be aware that prior to issuance of a 30-day letter, the taxpayer may request an "early referral" (ER) to Appeals. Rev. Proc. 99-28 establishes the ER Program to allow taxpayers under examination to request the transfer of a developed but unagreed issue to Appeals while the other issues in the case continue to be developed in Examination. Examiners should discuss this option with their group manager before proceeding. See IRC 7123(a) and IRM 8.26.4, Early Referral Procedures, for additional information and guidance.

Right to Finality
  1. Taxpayers have the right to know the maximum amount of time they have to challenge the IRS’s position as well as the maximum amount of time the IRS has to audit a particular tax year or collect a tax debt. Taxpayers have the right to know when the IRS has finished an audit.

  2. To protect the taxpayer’s "Right to Finality," examiners:

    1. Must explain and properly notify the taxpayer of their rights when soliciting a consent to extend the statute of limitations. See IRM 25.6.22.3, Notification of Taxpayer’s Rights, for guidance.

    2. Must prepare the appropriate final closing letter at the conclusion of the examination. For example, if the taxpayer agrees to the proposed adjustments, examiners must issue Letter 987, Agreed Income Tax Change. See IRM 4.10.8, Report Writing, for procedures on issuing final closing letters.

    3. Must notify the taxpayer in writing if a determination is made that an additional inspection of the taxpayer’s books and records is necessary (IRC 7605(b)). See IRM 1.2.13.1.1, Policy Statement 4-3.

      Note:

      If the taxpayer requests a reopening (e.g. audit reconsideration), written notification that an additional inspection of the taxpayer’s books and records is not necessary.

Right to Privacy
  1. Taxpayers have the right to expect that any IRS inquiry, examination, or enforcement action will comply with the law and be no more intrusive than necessary, and will respect all due process rights, including search and seizure protections and will provide, where applicable, a collection due process hearing.

  2. To protect the taxpayer’s “Right to Privacy” examiners will not use financial status or economic reality examination techniques to determine the existence of unreported income unless a reasonable indication that there is a likelihood of such unreported income exists (IRC 7602(e)). See IRM 4.10.4.2.9, Formal Indirect Method.

Right to Confidentiality
  1. Taxpayers have the right to expect that any information they provide to the IRS will not be disclosed unless authorized by the taxpayer or by law. Taxpayers have the right to expect appropriate action will be taken against employees, return preparers, and others who wrongfully use or disclose taxpayer return information.

  2. To protect the taxpayer’s "Right to Privacy" and "Right to Confidentiality," examiners:

    1. Must follow the Privacy Principles listed in IRM 10.5.1.4.2, IRS Privacy Principles, and also found in the Privacy & Disclosure Virtual Library, in all facets of examination activities.

    2. Must not willfully inspect a return or return information without having authorization, see IRC 7213A and IRM 10.5.5, IRS Unauthorized Access, Attempted Access or Inspection of Taxpayer Records (UNAX) Program Policy, Guidance and Requirements.

    3. Must not send emails containing SBU data to taxpayers or their authorized representatives, even if requested. See IRM 10.5.1.6.5.1, Emails to Taxpayers and Representatives.

    4. Must follow procedures for faxing documents with SBU data. See IRM 10.5.1.6.7, Faxing, and IRM 4.10.1.3.5, Use of Fax Machine or Enterprise e-Fax (EEFax) to Communicate, for additional information.

    5. May disclose return information only to the extent necessary to gather data relating to their official tax administration duties or to accomplish properly any activity connected with such official duties. See IRC 6103(k)(6), 26 CFR 301.6103(k)(6)-1, and IRM 11.3.21, Investigative Disclosures, for additional information and detailed guidance.

      Caution:

      IRC 6103(k)(6) and 26 CFR 301.6103(k)(6)-1 do not authorize the disclosure of the taxpayer’s tax return, which includes all forms, schedules, statements, and attachments.

    6. Must exercise caution and use prudent judgment when researching taxpayers on the internet. Generally, examiners are allowed to review information from publicly accessible, unrestricted websites. Examiners may only use the information provided on the return or other information gathered during the investigation as the search criteria. In addition, for guidance and examples regarding researching social media and other internet sites, see IRM 11.3.21.8.1, Use of Social Networking and Other Internet Sites by IRS Employees for Compliance Research or for Other Purposes.

    7. Are prohibited from contacting any person other than the taxpayer regarding the determination or collection of the tax liability of the taxpayer without providing reasonable advance notice to the taxpayer that IRS may contact persons other than the taxpayer. See IRC 7602(c) and IRM 4.11.57, Third Party Contacts, for additional information.

  3. For additional guidance regarding an examiner’s responsibilities to protect a taxpayer’s privacy and confidentiality, see the following sections in this IRM:

    • IRM 4.10.1.2.1.12, Unauthorized Access (UNAX)

    • IRM 4.10.1.2.1.13, Data Protection

    • IRM 4.10.1.3.4, Leaving Information on Answering Machines/Voice Mail

Right to Retain Representation
  1. Taxpayers have the right to retain an authorized representative of their choice to represent them in their dealings with the IRS. Taxpayers have the right to seek assistance from a Low Income Taxpayer Clinic if they cannot afford representation.

  2. To protect the taxpayer’s "Right to Retain Representation," examiners:

    1. Must secure the taxpayer's written authorization for a representative to perform certain specified acts on the taxpayer's behalf (e.g., attorney, certified public accountant, enrolled agent). See IRM 4.11.55.1.4, Power of Attorney.

    2. Must honor a valid power-of-attorney submitted by a taxpayer unless the criteria for by-passing the power-of-attorney has been met. See IRM 4.11.55.3, By-Pass of a Representative, for additional guidance.

    3. Generally must suspend an interview if a taxpayer requests time to consult with a representative (IRC 7521(b)(2)). The taxpayer must be allowed a minimum of 10 business days to secure representation before the examiner can take any follow-up action to schedule an appointment. See IRM 4.10.3.3.7.2, Request for Representation - Suspension of Interview, for additional information.

    4. Should be aware that IRC 7525, extended the attorney-client privilege in non-criminal cases to certain communications (oral and written) created on or after July 22, 1998 between taxpayers and other federally authorized tax practitioners. See IRM 4.11.55.2.3, Privileged Communications, for additional guidance.

  3. For guidance and procedures regarding sending written communication to the taxpayer’s representative, see IRM 4.10.1.3.3, Written Communication to the Taxpayer’s Representative.

  4. For additional information, see IRM 4.11.55, Power of Attorney Rights and Responsibilities.

Right to a Fair and Just Tax System
  1. Taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels.

  2. To protect the taxpayer’s "Right to a Fair and Just Tax System," examiners:

    1. Are responsible for determining the correct tax liability as prescribed by the IRC. It is imperative that examiners identify the applicable law, correctly interpret its meaning in light of congressional intent, and, in a fair and impartial manner, correctly apply the law based on the facts and circumstances of the case. Taxpayers are more likely to comply when they believe they are being treated consistently and fairly. See IRM 1.2.10.37, Policy Statement 1-236, for additional information related to enforcing the tax law with integrity and fairness.

    2. Should advise taxpayers of payment alternatives if they can’t full pay. For example, taxpayers may enter into an installment agreement or submit an offer in compromise where there is a genuine dispute as to the existence or amount of the correct tax liability under the law. See IRM 4.20.4.2, Examination's Authority, and IRM 4.20.4.3, Streamlined Installment Agreements, for additional guidance.

    3. Must avoid unreasonable errors or delays which may result in interest abatement under IRC 6404(e). See IRM 4.10.1.2.1.15 , Interest Abatement, for additional guidance.

Innocent Spouse Relief
  1. In every examination of a joint return, examiners must explain joint and several liability and innocent spouse relief available under IRC 6015 to both taxpayers and their authorized representative(s), if applicable. See IRM 25.15.6, Field Examination Procedures, for additional information.

  2. Examiners may provide the taxpayers or representative(s) with Pub 971, Innocent Spouse Relief, which explains these provisions in detail. If requested, provide Form 8857, Request for Innocent Spouse Relief, and the accompanying instructions.

  3. Examiners must document the case activity record with the date of this discussion, the individuals present, the addresses of each spouse, and if the taxpayer indicates that relief will be requested.

Unauthorized Access (UNAX)
  1. Examiners are responsible for understanding what UNAX means and what the potential consequences are for the willful or attempted unauthorized access, or inspection of paper or electronic taxpayer records. Examiners should always err on the side of caution and if they are uncertain whether or not an access or inspection is appropriate, should first consult with their group manager. See IRM 10.5.5, IRS Unauthorized Access, Attempted Access or Inspection of Taxpayer Records (UNAX) Program Policy, Guidance and Requirements, for additional information.

  2. Examiners are not allowed access to taxpayer records when involvement in their tax work could cause a possible financial conflict of interest, or when they have a personal relationship or outside business relationship that could raise questions about the examiner’s impartiality in handling the tax matter. See IRM 4.10.2.2.3, Conflict of Interest, for more information on potential conflict of interest issues.

  3. Examiners are not authorized to access their own tax records.

  4. Examiners are only authorized to access other employee accounts when working assigned cases (if they do not know the employee). If an examiner is assigned the case of another employee that he/she knows, the case should be referred to management for reassignment.

  5. Examiners may have a need to access returns and return information for cases not formally assigned to their inventory. In instances where research is required on a case not formally assigned or when inadvertent access occurs in the performance of their duties, examiners may use Form 11377 or Form 11377-E, Taxpayer Data Access, to document the access:

    1. Provide Form 11377 or Form 11377-E to the group manager at the end of the business day (or as soon as practicable). Form 11377 must be mailed to the group manager using the U.S. Postal Service. Form 11377-E (electronic version) must be sent to the group manager using secured (encrypted) e-mail.

    2. The group manager will initial and date the form to indicate receipt (digital signature will be used for Form 11377-E), provide the examiner with page 2 for their records, and forward it for retention in a location designated by each Head of Office.

    Note:

    Examiners are authorized to access taxpayer information to perform their official tax related duties and assignments, including required filing checks. When completing required filing checks, examiners should ensure the taxpayer’s relationship to the related taxpayers whose return information is accessed is adequately documented in the case file.

  6. See IRM 10.5.5.2.3, Employee UNAX Responsibilities, for more information or questions regarding UNAX.

Data Protection
  1. Examiners are responsible for protecting data, including the data stored on their IRS laptop computer and portable electronic storage devices (e.g. flash drive). Examiners must also protect hardcopy documents that contain Personally Identifiable Information (PII) or Sensitive But Unclassified (SBU) data.

  2. Examiners must provide adequate safeguards and encrypt PII and SBU data. Examiners must take the proper precautions to protect sensitive data in the office, at home, or while traveling. Proper data protection helps maintain taxpayer confidence and the IRS’ reputation for privacy protection, which are critical for IRS to perform its mission. Data protection also must be considered when faxing and e-faxing, emailing, shipping PII or SBU data, or placing information on the Microsoft® Outlook Calendar.

  3. Examiners are required to report the loss, theft or unauthorized disclosure of PII or SBU data because it could place taxpayers at risk for identity theft and invasion of privacy. See IRM 4.2.5.9, Reporting Losses, Thefts and Disclosures of Sensitive Information, and IRM 10.5.4.3, Reporting Losses, Thefts and Disclosures, for additional guidance.

  4. For additional information, refer to the Think Data Protection website, and IRM 10.2.13, Information Protection.

Notification of Potential Third Party Contacts
  1. In accordance with IRC 7602(c)(1): "An officer or employee of the Internal Revenue Service may not contact any person other than the taxpayer with respect to the determination or collection of the tax liability of such taxpayer without providing reasonable notice in advance to the taxpayer that contacts with persons other than the taxpayer may be made."

    Note:

    Exceptions to the general advance notice are listed in IRC 7602(c)(3).

  2. In general, Pub 1 will be used to satisfy the advance general notice requirement that third parties may be contacted during the course of the examination.

    Note:

    For preparers and promoters, examiners must use Letter 3164-N, Third Party Contact to Preparers, and Letter 3164-P (DO), Third Party Notification for IRC 6700/6701 Investigations.

  3. For additional instructions and guidance, examiners should refer to IRM 25.27.1, Third Party Contact Program, and IRM 4.11.57, Third Party Contacts.

Interest Abatement
  1. IRC 6404(e) provides for the abatement of interest when any assessment of interest on a deficiency is attributable in whole or in part to any unreasonable error or delay by IRS in performing a ministerial or managerial act.

  2. To ensure that the Service can accurately and fairly respond to a taxpayer’s claims for interest abatement, it is CRITICAL that examiners accurately record activity, as well as periods of inactivity, in all case files. See IRM 4.10.9.5, Activity Record.

  3. See IRM 20.2.7, Abatement and Suspension of Debit Interest, and IRC 6404 for additional information on interest abatement.

  4. Examiners should contact the Interest Abatement Coordinator when assistance is needed. See http://sbseservicewide.web.irs.gov/interest/iac/282.aspx website for contact information.

IRS Restructuring and Reform Act of 1998 (RRA 98)

  1. The IRS Restructuring and Reform Act of 1998 (RRA ‘98) was signed into law on July 22, 1998, resulting in changes to tax law as well as in the structure and functioning of the IRS. In addition, RRA 98 resulted in a focus on improving customer service and expanded taxpayer rights. The provisions in RRA 98 discussed in this IRM are listed below:

    • Section 3201(d) - provides that, wherever practicable, any notice relating to a joint return under IRC 6013 be sent separately to each individual filing the joint return. See IRM 4.10.1.2.2.1, Separate Notice Requirements, for guidance;

    • Section 3705(a) - requires that examiners give their name and unique identification number (currently referred to as "personal identification number" ) during personal and telephone contacts. See IRM 4.10.1.2.2.2, Employee Contact Information;

    • Section 3706 - authorizes the use of pseudonyms by examiners in certain instances. See IRM 4.10.1.2.2.3, Pseudonyms;

    • Section 1001(a)(4) - prohibits ex parte communications between appeals officers and other IRS employees to the extent that such communications appear to compromise the independence of Appeals. See Rev. Proc. 2012-18, and IRM 4.2.7, Ex Parte Communication Procedures, for guidance, and

    • Section 3707 - prohibits the Service from designating taxpayers as "illegal tax protesters" (or any similar designation). Examiners must not refer to the taxpayer as an “illegal tax protester” (or any similar designation) anywhere in the case file, including on the activity record (e.g., Form 9984), lead sheets, workpapers, reports, etc. Terms such as "frivolous argument" or "tax avoidance argument" are acceptable to use. See IRM 25.4, Employee Protection, for further information.

Separate Notice Requirements
  1. Section 3201(d) of the IRS Restructuring and Reform Act of 1998 provides that, wherever practicable, any notice relating to a joint return under IRC 6013 be sent separately to each individual filing the joint return. "Any notice" is interpreted to mean any notice required by statute. Thus, Section 3201(d) only applies to documents that contain a notice required by statute, such as a notice of potential third-party contacts under IRC 7602(c)(1), a notice of deficiency under IRC 6212, and a notice and demand for tax under IRC 6303. In addition, certain other notices that contain elements of notices required by statute are sent separately.

    Note:

    RRA 98 mandates that separate notice must be provided for a notice of deficiency, not withstanding the provisions of IRC 6212(b)(2).

  2. When soliciting statute extensions, follow the procedures in IRM 25.6.22.3.1, Separate Notification of Each Spouse.

Applicability to Field Examination Correspondence/Notices
  1. For Field Examination correspondence/notices, examiners must take the following actions:

    When... Then...
    Sending initial contact letters Send correspondence separately to each spouse.
    Sending a notice required by statute (e.g. potential third party contacts under IRC 7602(c)(1), notices of deficiency under IRC 6212, third party summons notice under IRC 7609, etc.) Send correspondence separately to each spouse.
    Spouses have different addresses Send all correspondence/notices separately to each spouse.
    The examiner verified spouses have the same address Correspondence/notices not required by statute (e.g. information document requests (IDR), reports, 30-day letters, etc.) can be sent using joint mailing.
    The address for one or both of the spouses cannot be verified (See IRM 4.10.1.2.2.1.2) Send all correspondence/notices separately to each spouse at the spouse’s last known address within the meaning of 26 CFR 301.6212-2 Also see IRM 4.10.2.11, Taxpayer Change of Address, for additional information.
Verification of Address for Each Spouse
  1. In every examination of a joint return, the examiner must verify the last known address for each spouse and document the address and actions taken to verify it on Form 9984.

  2. Examiners must check for a change of address on IDRS, searching under both the primary and secondary social security numbers using appropriate command codes (e.g. INOLES, IRPTRO, IMFOLE, ENMODA), and request each spouse confirm their mailing address during the initial conversation (either by telephone or in person). See IRM 25.15.6.13, Addressing and Issuing Correspondence.

    Example:

    Generally, for no show/no response cases, the examiner will not be able to confirm the taxpayers reside at the same address; therefore, subsequent mailings must be sent separately.

  3. If there is an address change for either or both of the spouses:

    1. Follow established address change procedures in IRM 4.4.11, Entity Changes, to update the address(es), and

    2. Clearly document the case file with the correct mailing addresses.

Procedures for Sending Separate Notices
  1. IRM 4.10.1.2.2.1.1 clarifies when separate notices are required. However, the procedures that must be followed to send separate notices depend on whether or not the taxpayers have the same address (see IRM 4.10.1.2.2.1.2).

  2. Spouses with the same address - the initial contact letter and all notices required by statute must be mailed separately using the following procedures:

    1. Reflect the joint name and address for the taxpayers on all initial contact letters and notices required by statute.

    2. Use Form 12832, Cover Page for Compliance Taxpayer Letters, as the cover letter to send the correspondence to each spouse separately. Form 12832 can be generated in RGS.

    3. Mail the initial contact letter or notice required by statute to the primary taxpayer in a separate envelope addressed solely to the primary taxpayer and a copy of the same document(s) to the secondary taxpayer in a separate envelope addressed solely to the secondary taxpayer.

  3. Spouses with separate addresses or addresses cannot be verified - all correspondence must be mailed separately using the following procedures:

    1. Prepare separate copies of the correspondence, examination report, notice, etc. Reflect the names of both spouses on each copy but the address line should only reflect the address to whom the information will be sent without reference to the address of the other spouse.

    2. Use Form 12832 as the cover letter to send correspondence to each spouse separately. Form 12832 can be generated in RGS when both spouses are set up with their separate addresses. See IRM 25.6.22.5.4, Taxpayer’s Address, for instructions to complete the address line on a consent.

    Caution:

    Examiners must be careful when spouses are not at the same address, and NOT disclose the address of the other spouse.

  4. If the correspondence/notice is personally presented, document the date and fact of separate personal presentations or the date and fact of personal presentation to one spouse and the date and fact of mailing to the other spouse.

Employee Contact Information
  1. Section 3705(a)(3) of RRA 98 requires that examiners give their name and unique identification number (currently referred to as "personal identification number" ) during personal and telephone contacts. In addition, on all manually generated correspondence sent to a taxpayer examiners must provide their name, telephone number, and personal identification number to ensure the taxpayer is able to contact the appropriate employee.

    Note:

    All correspondence generated by examiners is considered manually generated correspondence.

  2. Examiners must provide the taxpayer with their group manager’s name and phone number during the initial conversation.

  3. Examiners should document on Lead Sheet 120-1, Initial Taxpayer Contact Check Sheet, (revenue agents), or Lead Sheet 125-1, Initial Interview Check Sheet (tax compliance officers), that their name and personal identification number was provided.

  4. If a case is reassigned to another examiner, the new examiner must also give their name and personal identification number to the taxpayer.

Pseudonyms
  1. Section 3706 of RRA 98 authorizes the use of pseudonyms by IRS examiners in certain instances. Use may be authorized only when adequate justification is provided by the employee and its use is approved by the employee's supervisor. For detailed guidance see IRM 10.5.7, Use of Pseudonyms by IRS Employees.

  2. Examiners who used pseudonyms before the enactment of Section 3706 of RRA 98 were "grandfathered" in under the statute.

  3. Additional guidance is available on the Pseudonyms website.

IRS Policies

  1. Internal Management Documents (IMDs) are official communications that designate authorities and/or disseminate instructions to staff for IRS officials and employees. IMDs include:

    • Internal Revenue Manuals (IRM)

    • Servicewide Delegation Orders

    • Division/Function Delegation Orders

    • Policy Statements

    • Interim Guidance

    • Operating Level Directives

    • Strategic Documents, and

    • Other IMDs

  2. Policy statements can form the basis for procedures and instructions in the IRM. Policy statements that relate to the taxpayer’s rights and examination process can be found in IRM 1.2.13, Policy Statements for the Examining Process.

Communication

  1. Communication with the taxpayer or representative on an on-going and continuous basis is a critical part of the examination process. Examiners must use effective and persuasive oral and written communication skills to ensure their message is easily understood by taxpayers. Communication is important because it establishes a working rapport with the taxpayer, which will facilitate information sharing, and avoid misunderstandings. This section covers oral and written communication techniques that should be used during an examination, as well as procedures for written correspondence, such as separate notice requirements and the use of digital signatures.

Oral Communication

  1. The examiner should discuss the progress of the examination and proposed issues with the taxpayer or representative at frequent intervals throughout the examination.

  2. Examiners should ensure verbal communication is firm, courteous, businesslike and professional by:

    1. Using effective communication skills (i.e., listening, responding and clarifying), to secure the taxpayer/representative’s cooperation.

    2. Using tact to explain findings and conclusions to ensure tax law and accounting principles and practices are clearly communicated.

    3. Ensuring the communication methods used are appropriate to the taxpayer.

    4. Always considering the taxpayers/representative’s point of view.

Written Communication

  1. All correspondence must contain the name of the person to contact (examiner or group manager depending on the type of letter), telephone number, personal identification number, and a signature. See IRM 4.10.1.2.2.2, Employee Contact Information, for guidance.

  2. When possible, all correspondence with taxpayers should be prepared using approved form letters, since the specific language in these documents has been approved for general public use.

    Note:

    Examiners must not modify the approved forms and letters.

  3. Written communication to the taxpayer or representative must:

    • Be complete, clear, and professional without jargon or IRS acronyms.

    • Communicate the message in a concise and professional tone using correct grammar, spelling, and punctuation.

  4. Original correspondence created by examiners must be:

    1. Approved by the group manager and the approval must be documented in the case file, and

    2. Maintained in a group read file containing taxpayer correspondence that does not use a standard letter.

      Note:

      Generally, copies of correspondence should be maintained in the group read file for one year and then destroyed.

  5. If mail is returned as undeliverable after the case is closed, follow the procedures in IRM 4.4.7.4, Undeliverable Mail.

Written Communication to the Taxpayer's Representative

  1. Generally, a qualified representative is authorized to receive any notice or other written communication required or permitted to be given to the taxpayer in the matter concerning the taxpayer, as directed on Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization.

  2. Examiners are required to prepare and send Letter 937, Transmittal Letter for Power of Attorney, to the power of attorney (POA) to transmit copies of correspondence addressed to the taxpayer.

  3. Copies of letters and other forms and documents addressed or specific to the taxpayer should be enclosed with Letter 937, Transmittal Letter for Power of Attorney, and sent to the representative at the same time they are sent to the taxpayer. Examples of other forms and documents addressed or specific to the taxpayer include but are not limited to Form 4564, Information Document Request; Form 872, Consent to Extend the Time to Assess Tax; Form 4549, Income Tax Examination Changes, etc.

    Note:

    The enclosure section of Letter 937 should indicate the specific enclosures included with Letter 937. For example, if Letter 3572, SB/SE Office Exam Call-Back Appointment Letter, is enclosed with Letter 937, the examiner should check the “Letter(s)” box and type “3572” in the fillable field.

  4. Blank forms, notices and publications available on IRS.gov should not be sent to the taxpayer's representative or appointee, including, but not limited to:

    • Form 9465, Installment Agreement Request

    • Form 12203, Request for Appeals Review

    • Notice 609, Privacy Act Notice

    • Pub 1, Your Rights as a Taxpayer

    • Pub 1035, Extending the Tax Assessment Period

Leaving Information on Answering Machines/Voice Mail

  1. Answering machines and voice mail are frequently used when communicating with taxpayers, representatives, and other IRS employees. These systems are not secure and may not be used to transmit sensitive information, including tax information, except under the provisions of IRC 6103.

  2. Guidelines for leaving information on answering machines/voice mail are in IRM 11.3.2.7.1, Leaving Information on Answering Machines/Voice Mail.

Use of Fax Machine or Enterprise e-Fax (EEFax) to Communicate

  1. IRC 6103 provides details on the confidentiality and disclosure rules that must be followed when working with taxpayer return or taxpayer return information. Examiners must remember to protect tax information when using the fax machine or EEFax, which provides the ability to send, receive, route and deliver fax documents electronically using Microsoft Outlook.

    Note:

    Faxes sent via e-fax involve access to tax information by third-party service providers who act as conduits for the data before it is made available to the requesting taxpayer. Because they are third-parties and are not assisting in the resolution of a tax matter, a valid written consent from the taxpayer designating the e-fax service provider as a recipient of tax information is required. If the taxpayer is unwilling to submit a written consent, the information cannot be sent via e-fax.

  2. See IRM 11.3.1.11, Facsimile Transmission of Tax Information, and the Start Here for Enterprise e-Fax (EEFax) for Exam Employees website.

Additional Examiner Responsibilities

  1. In addition to taxpayer rights, examiners are responsible for numerous other items, including but not limited to the proper use of:

    • Pocket commissions

    • SmartID cards

    • Personal identification numbers, and

    • Digital Signatures

  2. In addition, examiners should provide taxpayer assistance and quality service in a timely manner. See IRM 4.10.1.4.5, Timely Actions; IRM 4.10.1.4.6, Problem Solving; IRM 4.10.1.4.7, Reporting Bribery Attempts; and IRM 4.10.1.4.8, Assistance to Chief Counsel, for additional information.

Pocket Commissions

  1. An examiner's pocket commission is designed to show proof of the examiner’s authority in the performance of his/her official duties. With few exceptions, pocket commissions are primarily intended to identify Service personnel to the public when dealing with tax matters. See IRM 10.2.6, Non-Enforcement Pocket Commissions.

  2. Examiners are responsible for:

    • Safeguarding their pocket commission

    • Producing their commission at the request of either their group manager or by system notification

    • Reviewing the required training, Document 13094, Holder Responsibility Training for Credentials

    • Returning their pocket commission to their group manager when they no longer meet the criteria in IRM 10.2.6.8, Authorization, Criteria and Eligibility to hold a Non-Enforcement Pocket Commission

      Note:

      Examiners should follow the guidance in IRM 10.2.6.12, Reissuance of Non-Enforcement Pocket Commissions, if the pocket commission is lost or stolen.

SmartID Card

  1. Examiners are issued a SmartID card designed to provide evidence of their identity and contains a certificate in a gold chip that provides access to computer systems and facilities. See IRM 10.2.5, Identification Card, for additional information.

  2. Examiners are responsible for:

    • Safeguarding their SmartID card

    • Properly wearing their SmartID card at all times during work hours

    • Immediately reporting to their group manager the presence of unauthorized personnel in the work area

    • Promptly reporting a lost or stolen SmartID card to their group manager, the local servicing security office and to the Situation Awareness Management Center (SAMC) and Treasury Inspector General for Tax Administration (TIGTA) in accordance with IRM 10.2.8, Incident Reporting

  3. The ten-digit Personal Identification (PID) Number which is reflected on the front of the SmartID card is used as the examiner’s personal identification number.

Personal Identification Number

  1. All examiners who have been issued a SmartID card containing the ten-digit PID must use the entire ten-digits in written or verbal communications with taxpayers. The PID is the only number that may be used by examiners as the personal identification number. No other number (including commission number) is authorized for use.

  2. The use of personal employee identification numbers for telephone/personal contacts will apply to group clerks/secretaries only if they become involved in resolving tax related matters or if they are providing tax law or account information. If group clerks/secretaries are simply providing routine assistance (e.g., providing copies of forms, scheduling appointments) or forwarding messages to another employee, who has responsibility for the resolution of tax issues, then they may continue to answer telephones using locally defined identification procedures.

  3. The examination of returns generally involves re-occurring contacts with a taxpayer by the same examiner. Once the personal employee identification number has been provided to the taxpayer, examiners are not required to provide their personal employee identification number during each telephone or personal contact.

Digital Signatures

  1. This section contains guidance regarding the appropriate use of electronic signatures on letters, forms and other documents.

    Reminder:

    All documents can be signed by manually placing a handwritten signature on a printed copy of the document.

  2. To sign documents electronically, the following procedures must be followed to comply with the Government Paperwork Elimination Act (GPEA):

    1. The signer must use an acceptable electronic form of signature;

    2. The electronic form of signature must be executed or adopted by a person with the intent to sign the electronic record (e.g., to indicate a person’s approval of the information contained in the electronic record);

    3. There must be a means to identify and authenticate a particular person as the signer; and

    4. There must be a means to preserve the integrity of the signed record.

    Note:

    See Use of Electronic Signatures in Federal Organization Transactions, dated January 25, 2013, prepared by the General Services Administration (GSA).

  3. Examiners and managers should use Adobe to create digital signatures that meet the requirements of GPEA. Adobe can create a digital signature that displays the signer’s Standard Employee Identifier (SEID), typewritten name, or an image of the signer’s handwritten signature. For assistance in creating digital signatures, including a graphical image of a handwritten signature, refer to the IT4U Self Help Website and type in Adobe in the Search field, then select the appropriate option based on the Adobe version.

    Caution:

    Original handwritten signatures are required on Form 872, Consent to Extend the Time to Assess Tax, series.

  4. Internal use documents can be signed electronically by using a digital signature that displays the signer’s SEID or typewritten name.

  5. Generally, letters, forms and other documents issued to the taxpayer and representative can be signed digitally. However, the digital signature should display an image of the signer’s handwritten signature in the signature block. Under no circumstances should a letter or document provided to the taxpayer reflect the SEID as the signature

    Caution:

    Original handwritten signatures are required on Form 872, Consent to Extend the Time to Assess Tax, series.

    Reminder:

    Copies of the signed letters and documents must be included in the case file.

Timely Actions

  1. Examiners must focus on timely actions to provide prompt assistance. The proper and efficient use of examination time is an essential element of a quality examination. Examiners are responsible for the day-to-day management of their cases and are accountable for completing their work in the least amount of time necessary to perform a quality examination. A focus on timely actions will reduce taxpayer burden.

    Note:

    Refer to Attribute 509, Time Charged, and Attribute 510, Time Span, in Document 13128, Field Compliance Embedded Quality, Field Examination Attribute Job Aid, or Document 13127, Field Compliance Embedded Quality, Office Examination Attribute Job Aid, for additional information.

  2. Examiners must complete open examinations within a reasonable period of time considering all factors within the case and strive to limit the number of overage cases in their inventory.

    Note:

    In-process cases will be considered overage when they have been in status 12 (started) in excess of 180 days for office examination cases and 270 days for field examination cases.

Problem Solving

  1. Examiners should assist taxpayers in solving all tax problems identified during an examination, even if the problems are not associated with the examination. If the problem is beyond the examiner's scope of responsibility, the examiner should discuss the issue with the group manager, then if applicable, the taxpayer should be referred to the appropriate function as follows:

    1. Taxpayer Advocate Service (TAS) - Make a referral to TAS when appropriate. Examiners should refer to IRM 4.2.1.19, Taxpayer Advocate Program, for additional information.

    2. Collection - Make a referral to the appropriate Collection personnel if taxpayers have questions about current or past collection actions.

    3. Wage and Investment (W&I) - For other non-examination inquiries refer the taxpayer to their local Taxpayer Assistance Center (TAC), or to irs.gov.

  2. Examiners should refer to IRM Exhibit 4.9.1-1, Definitions of Miscellaneous Examination Activity Codes, to determine the appropriate time reporting codes to use when assisting taxpayers in solving problems unrelated to an ongoing examination.

Reporting Bribery Attempts

  1. The Treasury Inspector General for Tax Administration (TIGTA) is primarily responsible for investigating all attempted bribery cases.

  2. Attempted bribery is an offer to give something of value with the intent the recipient will do something improper, or will fail to do something that should be done in discharging the duties of the position. An offer of a bribe to Government official or employee is a Federal offense, punishable by a substantial term of imprisonment and a fine.

  3. Bribe offers are often made indirectly and subtly, rather than in a direct fashion. Attempts to bribe examiners represent flagrant attacks on the integrity of the Service and its employees. Examiners need to be perceptive and alert to such overtures and take the following actions when bribery offers are received.

    1. Avoid any statement or implication that you will or will not accept the bribe.

    2. Attempt to hold the matter in abeyance.

    3. Report the matter immediately to the nearest TIGTA office.

    4. Avoid any unnecessary discussions of the matter with anyone.

Assistance to Chief Counsel

  1. When examiners are needed to assist Area Counsel or the Office of the United States Attorney, the Area Director will honor requests and assign an examiner to provide the services needed in the litigation of cases.

  2. Examiners will not discuss the merits of the case with the taxpayer or his/her attorney when consulting with them or examining pertinent books and records.

  3. Every effort will be made to comply with a request by the date specified. If is not possible to comply with the request for assistance, the party who initiated the request will be notified.

Embedded Quality (EQ)

  1. EQ is a way of doing business that builds commitment and accountability for continuous improvement in the organizational balanced measures (customer satisfaction, employee satisfaction, and business results).

  2. EQ encompasses two systems that use a common set of quality attributes and create a link between individual performance and organizational goals.

    • Embedded Quality Review System (EQRS) is used to capture and share individual performance review feedback as it relates to case actions (see IRM 4.10.1.5.2 for additional information).

    • National Quality Review System (NQRS) is used to capture national program review data obtained through closed case reviews (see IRM 4.10.1.5.3 for additional information).

Quality Attributes

  1. EQRS and NQRS use a set of quality attributes with common definitions to measure case actions against adherence to existing policies and procedures.

  2. For detailed information about the quality attributes, refer to:

    • Document 12354, Field Compliance Embedded Quality, Field and Office Examination Job Aid

    • Document 13127, Field Compliance Embedded Quality, Office Examination - Tax Compliance Officer/Tax Auditor (0526/0501), CJE Order Quality Attributes, and

    • Document 13128, Field Compliance Embedded Quality, Field Examination - Revenue Agent (0512), CJE Order Quality Attributes

Embedded Quality Review System (EQRS)

  1. EQRS is a system used by group managers and on-the-job instructors (OJIs) to input and capture performance feedback. EQRS automatically links the quality attributes to an examiner’s critical job elements (CJE).

  2. EQRS allows a group manager to generate reports on the results of reviews that have been entered into the system. These reports can be used to:

    • Share the results of individual reviews with employees;

    • Compile the results of multiple reviews during a rating period for use when preparing an employee's mid-year review or annual performance appraisal provided that the reviews have been shared timely with the employee;

    • Identify the top-scoring and bottom-scoring quality attributes within their group; and

    • Compare the group results to territory, area and National results.

National Quality Review System (NQRS)

  1. NQRS is a parallel system to EQRS and is used to collect data from national quality reviews. NQRS data is used to provide quality scores for field and office examination that are included as a component of the Business Results measurement.

  2. NQRS is used to gather data that helps identify trends regarding SB/SE Examination case quality. The emphasis is on providing management with information and analysis to determine root causes of quality concerns.

  3. National quality reviews are not used to evaluate individual employee performance.