4.24.18  Excise Operations Support (Cont. 1) 
Overview of Workload Classification  (04-09-2014)
Substantial Non-Compliance Factors (SNiF) Criteria

  1. Using all the research information gathered, the EOS employee will screen leads using the SNiF criteria found in IRM before the lead is classified and case built and made available to the field groups. Key SNiF criteria is listed below:

    • Substantial civil tax potential when considering the estimated time to work the issue and anticipated adjustment based on the information provided.

    • Significant dollar amount and/or large, unusual and questionable items based on a review of reported items.

    • Significant potential tax loss and overall impact of noncompliance issue.

    • Local area compliance impact, for example a geographically unique industry.

    • Emerging non-compliance promotions.

    • Allegations of non-tax criminal activity that may have tax implications.

    • Significant potential for fraud.

    • Significant potential for litigation - consider issues with conflicting lower court decisions and/or significant gray areas of law. Always consult with the Excise HQ SME responsible for the issue before proceeding.

    • Evidence of intent to mislead. This may include missing, misleading, or incomplete schedules or incorrectly showing an item on the return.

    • Overriding excise management decision such as training needs, inventory requests, new ideas to test that change the normal professional judgment decision of the EOS employee.  (04-09-2014)
Documenting Classification Dispositions on the EOS Classification Checksheet

  1. An EOS Classification Checksheet is required for all leads classified as "Selects" . The EOS Classification Checksheet is used to:

    1. Inform CSTO to establish case controls with specific coding information including the case status code. Cases should be placed in the appropriate status code for wall inventory or direct referral to the field.


      If the Work Order Request Tracking System (WORTS) shows work requested for the appropriate grade of case for each Select, it will be designated status 10.

      See IRM, Work Order Request Tracking System, for more information.

    2. Update the excise WMS database.

    3. Inform excise employees on any specific information for the case.

  2. EOS employee must indicate in the Checksheet Field Notes section of the EOS Classification Checksheet when -case file is available for group manager download.  (04-09-2014)
Case Coding Procedures

  1. The use of AIMS source, project, and tracking codes for case work is the joint responsibility of Excise Policy and EOS. For a list of approved codes and when they should be applied, see the Codes and Procedures page on the Examining Taxes website at http://mysbse.web.irs.gov/exam/mis/default.aspx.

  2. EOS employees will ensure that the appropriate project and or tracking codes are included on all cases included related pick-ups.

  3. Excise source codes include, but are not limited to:

    Source Code Description
    20 Regular Classification
    24 Non-filer
    30 Claims for Refund/Abatement
    31 Paid Claims
    40 Filed prior and/or Subsequent Year Pick-up
    44 Non-filed Delinquent Return or SFR
    49 Preparer of Return
    71 Specialist Referral System
    73 OIC/Taxpayer Requests
    77 Fed/State Cooperative Agreement
    91 Non-AIMS Misc. Penalty

  4. The use of ERCS status codes is the joint responsibility of Excise Policy and EOS. They include:

    ERCS Status Code Description
    08 Selected-Not Assigned
    10 Assigned-No Time Applied
    66 Correspondence Audit Forwarded
    99 Correspondence Audit Reject

  5. EOS employee will establish case controls on Facility Control Numbers (FCN) by creating a substitute EIN with three leading zeroes and the six numerical digits from the terminal’s FCN number. See IRM, ExSTARS Examination Return Control System (ERCS) Procedures, for additional information.  (04-09-2014)
ERCS/AIMS Controls Procedures

  1. Except for expedites, all cases selected for compliance activity must first be controlled on AIMS/ERCS under the appropriate TIN, MFT and tax period.

  2. If the new case information is identified for an open excise audit for the same MFT and tax period, the EOS employee will:

    1. Send a secure e-mail to the excise group manager with a cc to the assigned excise employee (if known) explaining that new information will be available for insertion into IMS and

    2. attach the information to the e-mail if space persist.

  3. If the new case information is identified for an open excise audit for the same TIN but a different MFT and/or tax period, the EOS employee will:

    1. Prepare the EOS Classification Checksheet and have the ERCS/AIMS controls established.

    2. Send a secure e-mail to the excise group manager with a cc to the assigned excise employee (if known) explaining that new information is available for insertion into IMS, and

    3. attach the information to the e-mail if space permits.

  4. EOS employee will provide to CSTO an electronic version of the EOS Classification Checksheet as well as any data items EOS want added in the IMS case. Case information that will be created at CSTO to be included as additional attachments include such items as:

    • CBRS,


    • 10K,

    • Accurint,

    • Internet research, etc.

  5. For case control procedures related to claims, see IRM, Excise Claim Classification and Control Procedures.  (04-09-2014)
Coordination of Case Controls-Multiple Employee Assignments

  1. Coordination of case assignments is required when multiple employee case assignments are involved as follows:

    • One taxpayer (one TIN) with more than one excise employee assigned, for example when one excise employee is assigned to MFT 03 (Form 720), and a different excise employee assigned to MFT B1, (ExSTARS compliance).

    • More than one taxpayer (multiple TINs) for related entities, both the parent and subsidiary EINs are controlled to different employees, one terminal filer EIN files for multiple Facility Control Numbers (FCN), etc.

    • More than one taxpayer (multiple TINs) for related tax issues, such as in whipsaw cases.

  2. EOS employee will complete the EOS Classification Checksheet with primary and/or related indicator as appropriate.

  3. When only one taxpayer (TIN) is involved:

    If MFT is: And: Then MFT:
    03 any other MFT present , 03 controls coordination
    B0 (Form 637) no 03 but any other MFT present, B0 controls coordination
    B1 or P9 (ExSTARS Penalty) no other MFT present 03 or B0 created as appropriate to control coordination


    Management must ensure that the assigned excise employee grade level is commensurate with the grade level of the case.

  4. When more than one taxpayer (multiple TINs) with related entities or related tax issues are involved:

    If MFT is: And: Then MFT:
    03 on parent EIN any other MFT present, 03 controls coordination
    B0 on parent EIN any other MFT present, B0 controls coordination
    P9 on parent EIN any other MFT present, P9 controls coordination if GS13; otherwise, create MFT 03 or MFT B0 as appropriate
    Any other MFT on parent EIN, or no control on parent EIN no other MFT present 03 or B0 created on parent EIN as appropriate to control coordination

  5. EOS employee will send secure e-mail to excise group manager and excise employee (if known) of the MFT that controls coordination. The secure e-mail will inform them that, "Group managers should ensure coordination is conducted when multiple employee assignments exist for a given taxpayer (one TIN) or when related entities with multiple TINs are involved such as parent/subsidiary relationships or where one terminal operator filer files for multiple terminals."

  6. If the Form 720-TO is a CIC case, all related terminal reviews (FCN's) should be directed by the excise employee assigned to the Form 720-TO case. The receiving excise field group of the FCN review should contact the excise manager and examiner assigned to the open Form 720-TO case. The Form 720-TO excise examiner manager must determine if the related terminal review is to be conducted by them or coordinated with a excise field group manager located nearest the FCN that will conduct the review.

  7. EOS employee will send all leads to the Form 720-TO manager (whether open or not) to coordinate the reviews of FCN's related to that Form 720-TO.

  8. The EOS employee will open excise ERCS controls as appropriate. If the lead tax period is in ERCS status 90, Reject the lead, but consider reopening procedures for significant materiality.

  9. If the lead tax period is not status 90, the EOS employee will:

    1. Classify as a Select.

    2. Research IMS open and closed case data if necessary to identify whether the issue was addressed as part of the examination.

    3. Consider expedite processing if necessary.

    4. Document case coordination information on the EOS Classification Checksheet.  (04-09-2014)
Managing Inventory

  1. Leads classified as Selects will be sent to CSTO for case controls and will specify the case building information to be included in the case file on the EOS Classification Checksheet. CSTO will establish Master File controls using the Examination Returns Control System (ERCS).


    Any changes to processes that affect CSTO must be coordinated with the Excise Tax CSTO Liaison.

  2. Leads will be designated as Status 08 for "Wall Inventory" or Status 10 for "Field Inventory."

  3. Inventory can fall under two categories:

    • EOS-built case files which include Expedites and Forwards where data is sent directly to the field but do not have an IMS case set up at CSTO. Filed groups are responsible for IMS controls.

    Type CSTO Create ERCS/AIMS Controls? CSTO Establish IMS Case? Action
    Expedites No No Field responsible for ERCS and IMS controls
    Forwards Yes if controls do not exist for the data TIN/MFT/TXPD No Field responsible for IMS controls

    • CSTO-built case files are created for all new case controls where there is no current (below status 14) ERCS for TIN/MFT/TXPD.

      If there are CSTO Create ERCS/AIMS Controls? CSTO Create IMS Case? Action
      No current ERCS/AIMS controls below status 14 for the TIN in Excise MFT Yes Yes unless already an existing IMS control excluding any MFT BO cases Wall or field Inventory Status
      Current ERCS/AIMS controls below status 14 for the TIN for any Excise controls other than MFT BO Create new periods as needed No EOS will treat as a Forward case and send to field any new data to be placed into existing IMS case.
      No current ERCS/AIMS controls below status 14 for the TIN for any other excise control but there are MFT BO controls Yes Yes Wall or Field Inventory Status


      EOS employee will review classification dispositions for Forwards to post files and secure e-mail excise group managers that a file is available in IMS or for download from Excise WMS.

  4. CSTO-built case files are built by CSTO for certain leads disposed as Selects and are processed as follows:

    • EOS employee will provide case requirement information to CSTO for needed case data such as IDRS prints, CBRS prints, etc.

    • CSTO-built case files for Wall Inventory will be held in CSTO inventory until needed.

    • CSTO-built case files for field group inventory will be merged with prints for full AIMS, updated to ERCS status 10 and sent to the appropriate field group via Form 3210 procedures.  (04-09-2014)
Work Order Request Tracking System (WORTS)

  1. Excise group managers submit inventory order requests to their territory manager for approval. Territory managers utilize the WORTS to place orders with EOS. WORTS will enable the territory manager to monitor their field groups inventory requests as they are filled.

  2. Territory managers should review the ERCS IVL report for their field groups. The ERCS IVL provides information on available inventory to complete a WORTS request.

  3. If Wall Inventory is not available to meet the WORTS request, the EOS employee shall research other resources to identify work. If an inventory request cannot be filled due to the lack of inventory, the EOS manager will contact the territory manager to discuss methods to identify inventory to fulfill requirements.

  4. When Wall Inventory is requested for a specific excise field group, the EOS employee will:

    1. Refresh any needed additional data for the EOS or CSTO-built files.

    2. Update excise WMS database to reflect the WORTS number to generate into WORTS system that case was selected from Wall inventory to Field inventory.

    3. Request CSTO update case to ERCS status to 10 and appropriate EGC which will result in CSTO sending the file and notification to the group manager.

  5. An inventory requisition that has not been filled is considered "open/back ordered." EOS will monitor WORTS and prepare a monthly open/back ordered inventory report to the territory manager and Excise HQ.

  6. Group managers should be aware of the timeframes for inventory being shipped after submitting their requests and make every effort to timely order inventory.

  7. EOS will semi-annually evaluate aging inventory and make appropriate dispositions.

  8. During classification, EOS employee will grade cases and review WORTS orders to designate status code of 08 or 10.  (04-09-2014)

  1. Case building is the process of assembling available taxpayer-specific research for excise employees to consider when conducting their audits/investigations/reviews.

  2. Cases built by CSTO will contain information specified by the EOS employee.

  3. Cases built by EOS employee will contain the following information if available:

    • EOS Classification Checksheet and/or Case Index. which contains entity data and summary of compliance initiatives that identified the entity.

    • Case Assignment Information which explains why the case was identified.

    • Anomaly Data summarized by TIN.

    • Anomaly Detail Data which is transaction-level data that resulted in the anomaly.

    • Data Dictionaries which describe fields in anomaly detail data.

    • Other Information which includes other documentation such as questionnaires, satellite images, etc.


      Joint audits will include disclosure and joint audit procedures and state manager contact information.  (04-09-2014)
Correspondence Audits

  1. Correspondence audits may be worked by CSTO employees and require coordination with Campus Compliance Services, Campus Reporting Compliance, and Workload Selection and Delivery. If the work is within the CSTO workplan, EOS will forward information on the issue.

  2. Any requests that require additional coordination should include the Excise SME.

  3. EOS will monitor the case results and request CSTO provide feedback on productivity.  (04-09-2014)
Overview of Disclosures of Federal Tax Information (FTI)

  1. Release of tax data to any other federal or state government entity shall be effected in accordance with the disclosure requirements in IRC 6103, Confidentiality and Disclosure of Returns and Return Information, and IRM 11.3, Disclosure of Information. Disclosure of returns and return information is permitted subject to established safeguards of the information and subject to other statutory restrictions with the authority to release found in Delegation Order 11-2.

  2. The JOC Memorandum of Understanding (MOU) Section 9D states that the Senior IRS Representative will ensure that all requirements for recordkeeping and accounting for disclosures are met in accordance with 6103(p)(3), 6103(p)(4) and all applicable IRC 6103 implementing regulations.

  3. In general, the following two items should be in place prior to sharing information with any state:

    • The Basic Agreement, which is an agreement on coordination of tax administration executed by the Commissioner of the Internal Revenue Service and the head of a state tax agency, which encompass the required procedures and safeguards. See IRM, Basic Agreements, for detailed procedures.

    • The Implementing Agreement, which is developed and negotiated with each state tax agency that wants to receive federal returns and return information on a continuing basis. This agreement supplements the basic agreement by specifying the detailed working arrangements and items to be exchanged. See IRM, Implementing Agreements, for detailed procedures.

  4. IRC 6103(d), Disclosure to state tax officials and state and local law enforcement agencies, permits the disclosure of returns and return information with respect to taxes imposed by chapters 31, 32, and subchapter D of chapter 36 to any state agency, body or commission, or its legal representative, charged under the laws of the state with the responsibility for administration of any state tax law. The state's ability to receive excise tax information will be listed in the Basic Agreement and/or the respective Implementing Agreement.

  5. The JOC participating agency employees will have access to federal tax information (FTI) as contractors to the IRS under provisions of IRC 6103(n), Certain other persons. The following codes sections apply to situations where the JOC refers federal tax information contained in leads developed by the JOC to a participating state agency employee:

    1. IRC 6103(d) will replace IRC 6103(n) as the governing disclosure opinion where the state employee is a contractor for the JOC acting on behalf of the IRS. Participating state agencies may use FTI obtained from the lead referral for their state tax administration purposes as provided for under IRC 6103(d) and their individual MOU's, Implementing Agreements, and Fed/State Basic Agreement on Coordination of Tax Administration executed with the IRS.

    2. State employees acting as IRS contractors are subject to the terms and conditions of the federal tax regulations found in Treasury Regulation 301.6103(n)-1, Disclosure of returns and return information in connection with procurement of property and services for tax administration purposes. The self disclosure for FTI accessed for lead generation is not governed by IRC 6103(d) but IRC 6103(n). As an IRS contractor, all state employees are allowed to access the entire universe of FTI. Once the lead is developed, the disclosure is governed by IRC 6103(d). The Basic and Implementing Agreements in effect govern the release of tax information to the participating states as well as the JOC MOU. Since the underlying disclosure instruments allowing the disclosure were signed by those in authority under the delegation order 11-2 (the JOC MOU and the other normal state agreements) that authority is covered.


      State personnel and agency contractors must complete necessary background investigations prior to having access to FTI.

    3. Records and documents collected, maintained, or generated by the IRS and/or disclosed to participating state agencies under the JOC MOU and any information collected as a result of joint correspondence, joint interview, or IRS administrative summonses will be subject to the confidentiality requirements of IRC 6103(a).  (04-09-2014)
Guidance on Disclosures of Federal Tax Information to Non-Participating and Participating State Partners

  1. The following contains guidance on how to make disclosures of federal tax information and related joint audit activities from the JOC to state taxing agencies that are either non-participating or participating state partners.

  2. Participating state partners are states that have signed a MOU to participate in the JOC. Some participating state partners have employees who have completed background investigations for staff-like access to federal tax information (FTI) and are JOC employees.  (04-09-2014)
Disclosures of FTI to Non-Participating and Participating State Partners with Taxpayer Consent

  1. Disclosures of FTI to both non-participating and participating state partners with taxpayer consent may be conducted under the JOC MOU if the taxpayer under audit agrees to execute a Form 8821, Tax Information Authorization, and consent conforms with the regulations found at 26 CFR 6103(c)-1(b) and designates the receiving state agency as the appointee to receive the federal tax information.

  2. IRS may release information to the state without having the state subject to safeguards for the data and without the need for the accountings for the disclosure. The taxpayer must do this willingly without coercion. The consent must include all state agencies that may have an interest in the information. The JOC Program Manager must review the consent for validity prior to any release of data.  (04-09-2014)
Disclosures of FTI to Non-Participating State Partners

  1. Disclosures of FTI to non-participating state partners require coordination with the state’s servicing disclosure office.

  2. A non-participating state is a state that has not signed the JOC MOU.

  3. The state partner must solicit a specific request for FTI from the state disclosure office after determining if the state agency has the required written agreement in place to allow disclosures of excise tax information.

  4. If approved, the Disclosure office will make the disclosure and complete the required accountings.

  5. Disclosures will only apply to leads identified at the JOC National Data Center (NDC) and will be initiated by JOC management.

  6. EOS employee will draft a memorandum that explains the need to contact the state to solicit a specific request including a list of the data that the Disclosure office should transmit. The Disclosure office, after determining the state can obtain the information, should then solicit a specific request for the information and have the state submit that request to that office for release. The Disclosure office will then take care of the release and the Disclosure accounting requirement. Disclosure office contact information may be found at http://discl.web.irs.gov/contact.asp  (04-09-2014)
Disclosures of FTI to Participating State Partner Non-JOC Employees

  1. Disclosures to participating state partner non-JOC employees are the same as disclosures of FTI to non-participating state partners above.

  2. A state partner non-JOC employee is an employee of a state who has signed the JOC MOU, but the employee has not completed an IRS background investigation and does not have IRS staff like access.  (04-09-2014)
Disclosures of FTI to Participating State Partner JOC Employees

  1. Disclosures to participating state partner JOC employees are authorized under IRC 6103(d) through a combination of the state's current Basic and Implementing agreements along with permissions outlined in the JOC MOU and By-Laws, and approved via signature of the IRS, states and the IRS Commissioner.  (04-09-2014)
Disclosure Accounting Package

  1. For each disclosure, the EOS employee will prepare a disclosure accounting package to be routed through the JOC Operations Manager. The disclosure accounting package will consist of:

    1. Form 5466-B, Multiple Records of Disclosure,

    2. FTI, and

    3. Form 3210, Document Transmittal.  (04-09-2014)
Instructions for Completion of Form 5466-B

  1. Generally, this form is used to account for tax disclosures, although in situations where a large volume of records are disclosed at one time, a narrative accounting may be used. See IRM for narrative accounting procedures.

  2. IRS procedures for creating a record of the disclosure with Form 5466-B are found in IRM 11.3.37, Recordkeeping and Accounting for Disclosure.  (04-09-2014)
Narrative Accounting for Disclosure

  1. If the disclosure is not documented with a Form 5466-B, the EOS employee will prepare a memorandum for the HQ Disclosure Tax Law Specialist from the JOC Operations Manager containing the information listed below:

    • Subject of Memo. Narrative Accounting for Disclosure.

    • Category and Number of Taxpayers. Include the number of Individual Master File or Business Master File records, the number of tax years, and the number of disclosures.

    • Date of Disclosure.

    • ADP Source Codes. Include the number of disclosures for each ADP code used. A list of these codes can be found in IRM Exhibit 11.3.37-2, Recordkeeping and Accounting for Disclosures.


      Some ADP examples are: 116 – Individual Master File Records; 188 – Partnership Returns and Files; 189 – Corporate Returns and Files; 144 – Information Returns Master File. The JOC will likely list all under code 404 - Compliance Programs and Project Files. If the disclosure is for specific tax returns, use the code for that return type.

    • Description of Documents Disclosed. Provide a general description of the information being disclosed. For example, "Lead information for excise tax purposes that includes 2 million gallons of petroleum products imported by Company A into the Port X ."

    • Purpose of Disclosure. IRC 6103(d) Purpose Code 11 to states for state tax administration.

    • Name and Address of Agency Receiving the Information.

    • Location of IRS Office Retaining a Copy of Disclosed Information.

    • Type of Documents Disclosed. Returns and return information (electronic or paper).

  2. Upon receipt and approval of the memorandum, the JOC Operations Manager will sign and forward the memo to:

    Forward memorandum to
    IRS, Attention: Jonathan K. Davis, Tax Law Specialist
    1999 Broadway MS 7001DEN
    Denver, CO 80202-3025  (04-09-2014)
Instructions for Completion of Form 3210

  1. The EOS employee should sign and date the Form 3210 and deliver the completed package to the JOC Program or Operations Manager for approval. The package shall be signed electronically or on paper as needed. The information listed below shall be included on Form 3210:

    • To -a complete and correct address of the person and agency receiving the information.

    • Release Date -complete after approval signature by the JOC Program Manager or their delegate.

    • Remarks -a general description of the data being provided such as, "The data being provided to State Agency B is related to fuel imported by Company A and entering the US through the Port of X ."

    • A testament of research conducted to ensure that no active criminal investigation or federal tax impairment exists -Neither the IRS nor the participating state taxing agencies will disclose return information that would identify a confidential informant or seriously impair any civil or criminal tax investigation. In order to make this testament, the federal examiner must conduct research for any IDRS “Z” freezes.

    • Quantity- provide the number of items being transferred if using electronic media or the number of disks, CDs, pages or other media sources if FTI is being transmitted by another source such as overnight mail (FedEx, UPS, etc.).

    • Code or Type-provide a type description related to the quantity. If x number of files are provided, the Type would be files.

    • Description-describe the content of each type that is being shared, e.g., if four CDs are being provided, the description may read, "CD 1 contains information on fuel imports for 2001106. CD2 contains information on fuel imports for 201109 " .

    • From

    • Releasing Official

    • Originator Telephone Number

  2. Excise examiners assigned to joint activity cases will provide assistance as necessary, i.e., researching for "Z" freezes and completing Form 3210.

  3. The -Z and Z- freeze is set by TC 914, TC 916 or TC 918, initiated by and assigned to Criminal Investigation (CI) Fraud Detection Center (FDC) in the Campuses. TAKE NO ACCOUNT ACTION when a Z freeze is present on a module (Command Code TXMOD or ENMOD). Sensitive freeze conditions must be referred to CI FDC. DO NOT inform the taxpayer of CI involvement. EOS employee will only refer inquiries if the module contains a -Z freeze. Example: If there is a Z freeze on 2008 and 2009 and the case is for 2010 which does not have a -Z freeze, work the case and do not refer to CI. See IRM, Freeze Code Procedures, for additional information.  (04-09-2014)
Release of Information

  1. After receiving approval for the entire disclosure package from the JOC Operations Manager, the EOS will send the original Form 3210 along with the disclosed information to the receiving agency.

  2. EOS employee will ensure receipt of the signed Form 3210 from the receiving agency acknowledging their receipt of the disclosed information.

  3. EOS employee will provide a copy of the Form 3210 to the receiving agency and return the signed, original receipted Form 3210 to the JOC Operations Manager.  (04-09-2014)
Disclosure Scenarios

  1. The scenarios below cover the different disclosure circumstances that may be encountered when working joint federal/state compliance initiatives.

  2. Scenario #1 JOC leads that have federal-only or state-only tax consequences for both participating and non-participating state partners:

    • Federal-only leads will be processed separately through PSP WIC for classification, control and distribution to the field.

    • State-only leads to participating state partners will be disclosed to those states as per procedures found at IRM above.

    • State-only leads to nonparticipating state partners will be disclosed to those states as per procedures found at IRM above.

  3. Scenario #2 JOC leads that have both federal excise and state tax consequences that are audited by a team comprised of excise and state JOC employee examiners:

    • The audit will always begin under federal jurisdiction. The team will prepare generic workpapers that can be utilized to support both federal and state issues and that can be further documented signifying the jurisdictional agency at a later time.

    • At completion of the audit, a federal excise audit report can be issued by the federal agent only. Before a state audit report can be issued, a disclosure needs to be made to the state by the state field examiner as per procedures found at IRM above.

  4. Scenario #3 Same facts as Scenario 2 facts but before the federal audit report is delivered to the taxpayer, it is determined that the federal and state issues no longer coincide or the state examiner identifies a new or separate issue with state-only tax consequences. As a result, the state examiner wishes to obtain additional information in pursuit of a state-only tax determination

    • Before any action to pursue the state-only issue can be taken by the federal excise or state examiner, the state field examiner must perform a self-disclosure of the necessary FTI or lead information obtained in the federal examination utilizing the procedures found at IRM above.

  5. An alternative method to perform a disclosure of FTI in Scenarios 2 and 3 above is for the federal excise employee to utilize Form 8821. See procedural guidance found at IRM  (04-09-2014)
Unauthorized Disclosures

  1. Disclosure is prohibited for:

    • non-tax purposes unless there are specific provisions in IRC 6103 that allow disclosure,


      coordination must take place with the HQ Disclosure point of contact.

    • information obtained pursuant to tax treaties,

    • wagering tax information,

    • Currency Transaction Report information,

    • Grand Jury information,

    • information obtained under immunity procedures, and

    • information that would identify a confidential informant or impair a criminal/civil investigation.

  2. Any state agency contractor, or federal employee who misuses FTI including state information that becomes FTI or makes an unauthorized access or disclosure of such information will be subject to the civil and criminal penalties under IRC 7213, 7213A, and 7431.

  3. Upon discovering a possible improper inspection or disclosure of FTI including breeches and security incidents by a federal employee, a state employee, or any other person, the individual making the observation or receiving information should contact the office of the appropriate Special Agent-in-Charge, Treasury Inspector General for Tax Administration (TIGTA). The TIGTA contact page on their web site is located at http://www.treasury.gov/tigta/oi_office.shtml.

  4. All unauthorized disclosures should be coordinated with the Office of Safeguards.

  5. For additional information on unauthorized disclosures, see IRM, Information Technology (IT) Security, Policy and Guidance, and IRM 11.3, Disclosure of Official Information.  (04-09-2014)
Overview of EOS Quality Review

  1. EOS employee will conduct quality review on each step of EOS processing including the following:

    • Leads classification,

    • ERCS case controls, and

    • Data used in EOS initiatives.  (04-09-2014)
Quality Review of Leads Classification

  1. The EOS manager is responsible for the quality of returns selected. A quality review covering the classification of leads will be conducted by the EOS manager or designee. The review will cover:

    • Performance of each EOS employee,

    • Orientation on classification objectives,

    • Instructions to EOS employee, and

    • Quality review procedures and documentation requirements.

  2. A 10 percent sample of each EOS employee's returns is recommended for review. Through classification reviews, the EOS manager or designee will determine whether:

    • Returns are selected for examination or accepted as filed in accordance with established procedures.

    • Accepted returns have little or no examination potential.

    • EOS Classification Checksheets are properly completed by including all Large, Unusual or Questionable (LUQ) issues.

    • The potential tax change is sufficient to warrant selection of returns.

    • EOS employee is maintaining a high level of technical proficiency, exercising good judgment in accepting and selecting returns, and effectively utilizing their time.

    • EOS employee needs additional training.  (04-09-2014)
Quality Review of Data Used in EOS Initiatives

  1. Data quality is an important factor that directly relates to EOS initiatives. Data must be accurate to prevent unnecessary risk events especially when the data serves as evidence for agency program objectives. Inconsistent data may be disputed and crippling to the Service and all stakeholders. Validating data assures that it is consistently verifiable and reliable. Data obtained from internal, external, commercial and other government agencies sources will be reviewed for quality issues.

  2. As data quality issues are identified, excise employees should forward the following information to the EOS Data Quality Coordinator:

    • What appears to be the problem with the data?

    • What appears to have caused the problem?

    • What is required to correct the problem?

    • Does the problem put any initiative at risk for achieving its objective?

  3. The EOS Data Quality Coordinator will provide a monthly summary report of the accumulated data quality issues to EOS management. The EOS Data Quality Coordinator and management will collaborate on the following questions:

    • Are there errors in the data sources and, if so, can they be resolved?

    • Will the data problems create barriers to completing initiative objectives?

  4. The EOS Data Quality Coordinator will maintain a status report on each issue.

  5. EOS management will provide direction on which data quality problems should be addressed in a prioritized manner according to available resources.

  6. On a quarterly basis, EOS management should issue a report identifying issues with the quality of data including recommendations for corrections.  (04-09-2014)
Manager/Employee Security Responsibilities for NDC Information

  1. EOS management will ensure that all their employees:

    • Receive a briefing or training annually on the responsibilities and rules of security.

    • Provide written acknowledgment that they will protect the JOC database system and all information stored therein by completing hard copy acknowledgments for the use of removal media for data transfer, rules of behavior, and On-Line 5081 access request.

    • Re-validate annually their user ID's.  (04-09-2014)
Data Transfers to and from the NDC

  1. Data transfer to and from the NDC database must:

    • Not violate license or usage agreements.

    • Be labeled with the nature of the data and clearly marked SBU.

    • Be extracted to either CD, DVD, USB flash, or external disk drive using the Guardian Edge Removable Storage (GERS) encryption. 

    • Be delivered by an IRS-authorized carrier with delivery only to the authorized recipient as identified in the approved removal e-mail.

    • First be approved by the EOS JOC Operations Manager via e-mail request with a copy to the JOC Information System Security Officer (ISSO). The request must include the data source(s), the need for the data, how it is to be used, and by whom.  (04-09-2014)
JOC Partner Administrative Processes

  1. The JOC Steering Committee is responsible for approving membership with all new state taxing agency partners. Agencies must undergo a membership application process to join the JOC

  2. Agencies must complete a questionnaire indicating interest in learning more about joining the JOC. The questionnaire solicits information from the agency regarding:

    1. Organizational contacts,

    2. operations information, and

    3. technical structure.

  3. An agency completing the questionnaire confirms that agency executives responsible for committing resources are aware of the application submission and the potential commitment of resources in the future.

  4. Questionnaires are reviewed by the JOC Steering Committee with rejected questionnaires resulting in an oral and written notification to the agency from the JOC Steering Committee.

  5. Approved questionnaires result in the forwarding of a letter of application to the agency for membership into the JOC. Applications received must them be forwarded to the IRS HQ Governmental Liaison (HQ GL).

  6. The JOC Steering Committee will review application for membership and respond to applicants within 30 days of receipt. If membership application is approved, coordination shall take place with the HQ GL to secure MOU and Bylaws signatures.

  7. Approval of membership applications requires a two-thirds majority by the JOC Steering Committee. There are no predefined criteria against which an agency's application will be evaluated. A portfolio approach based on existing agency members along with agencies to be added will be used to evaluate applicants. Considerations will include, but not be limited to,

    • How similar or different the agency applying for membership is compared to existing member agencies,

    • point of taxation,

    • landlocked versus coastal agency,

    • neighboring agencies (with existing member agencies or other agency applicants),

    • fuel tax strategies utilized,

    • agency data available, and

    • commitment of resources.  (04-09-2014)
New Partner Requirements

  1. New state taxing agency partnership requirements are to:

    1. Have a current Basic and Implementing Agreement with the IRS for sharing confidential tax information.

    2. Sign the JOC MOU and Bylaws.

    3. Provide a list of individual representatives and team members to the IRS disclosure managers and the agency disclosure officers in the affected jurisdictions. A copy of the list must be submitted to the JOC Steering Committee co-chairs and published as team rosters to be distributed to all JOC team members.

    4. Be in compliance with federal safeguards requirements including receiving confirmation from the IRS Office of Safeguards that the agency has a current, approved Safeguard Procedures Report (SPR) to cover the self-disclosure process and use of federal tax information.  (04-09-2014)
Partnership Coordination with Privacy, Governmental Liaison, and Disclosure Office (PGLD)

  1. Coordination with the HQ PGLD Excise Tax Program Liaison will be initiated whenever agencies indicate a sincere interest in joining the JOC. When questionnaires or letters of application are provided by the JOC to an agency, the EOS employee will notify the PGLD office of the agency name, date, and agency employee contact. The PGLD will contact the local field PGLD to alert them that the agency has received the questionnaire/letter.

  2. If necessary, the local field PGLD can research the status of the agency's Basic and Implementing agreements, the status of the Office of Safeguard issues, any Office of Disclosure issues, and any relationship issues with the agency. If the agency does not have a Basic/Implementing Agreement or finds there are Safeguard issues, that information will be shared with the JOC as it will directly impact the agency's eligibility for joining the JOC. The JOC should contact the agency and inform them that they would be ineligible to apply for membership to the JOC without meeting the requirements as set forth in the MOU or Bylaws.

  3. If the agency contacts the field PGLD with questions they cannot answer, the field PGLD will contact the JOC. Field PGLD employees are relationship managers, facilitators, and marketers of all the initiatives stakeholders.. The field PGLD will facilitate a call with the JOC point of contact and the agency to answer questions.

  4. When the agency is notified of the JOC Steering Committee decision to accept/reject the application, the HQ and field PGLD offices should also be notified. If the agency is accepted, the field PGLD will provide copies of the IRS/Federal Highway Administration (FHWA) signed MOU and Bylaws to the state and initiate the process to secure agency signatures on the JOC MOU and Bylaws as well as the completed Safeguards Procedure Report (SPR) certification.

  5. The field PGLD will secure the list of individual state representatives and team members from the state per the Bylaws and provide the list to the IRS disclosure managers, state agency disclosure officers in the affected jurisdictions, and the JOC Operations Manager.

  6. The PGLD employee will send the signed JOC MOU and JOC Bylaws to the JOC point of contact.  (04-09-2014)
State Partner Disclosure Requirements

  1. The JOC MOU Section 9A states that agencies that access federal tax information are subject to the provisions and safeguards of IRC 6103. The participating agency employees will initially have access to federal tax information as contractors to the IRS under provisions of IRC 6103(n). All participating agency personnel who are designated as IRS contractors must receive security clearances prior to having access to federal tax information.

  2. The JOC MOU constitutes a contract between the agencies and the IRS. Agency contractors are subject to the terms and conditions of the federal tax regulations at Section 301.6103(n)-1.

  3. The participating agency contractors will have access to various federal tax information using IRC 6103(n) as the basis for allowing disclosure of tax information that may go beyond their state jurisdiction. After a lead is developed and determined to be worked by a particular state tax agency, the assigned state employee will be permitted to self-disclose and use federal tax information for their agency tax administration purposes as provided for under IRC 6103(d) and in their individual MOU, Basic Agreement, and Implementing Agreement on Coordination of Tax Administration.

  4. Any agency or agency contractor who misuses federal tax information (which includes agency information that becomes IRC 6103 information), or makes an unauthorized access or disclosure of such information will be subject to the civil and criminal penalties described in IRC 7213, 7213A, and 7431. All records and documents collected, maintained, or generated by the IRS and/or disclosed to the participating agency and any information collected as a result of joint correspondence, joint interviews, or IRS administrative summonses, will be subject to the confidentiality requirements of IRC 6103(a).

  5. Federal tax returns and tax return information will not be disclosed to agency contractors without prior written approval of the IRS.

  6. Neither the IRS nor the participating agency tax agency will disclose return information that would identify a confidential informant or seriously impair any civil or criminal tax investigation.

  7. For state disclosure procedures, see IRM, Overview of Disclosure.  (04-09-2014)
State Partner Safeguards Requirements

  1. All information obtained by the agencies must be safeguarded in accordance with the contract language for general services contained in exhibit 5 (or as may be renumbered and updated) of Pub 1075, Tax Information Security Guidelines for Federal, State and Local Agencies and Entities, and the agency’s current Safeguard Procedures Report (SPR). An agency’s SPR must describe their current operating procedures and safeguards measures.

  2. Agencies are required to amend or revise their SPR to include a full description of the self-disclosure process and use of the federal tax information. They must include the name, title, and phone number of the person within the agency who coordinates and logs the receipt as well as the distribution of the federal tax information self-disclosed.

  3. A copy of the signed and dated MOU must be included with the amendment or their revised SPR. The amendment or SPR must be submitted to the IRS Office of Safeguards within 30 days after the MOU becomes effective.  (04-09-2014)
EOS Shared Site

  1. EOS internal process information will be posted to the EOS shared site. The site will be maintained by the Excise webmaster to whom changes must be submitted after approval from management. The EOS shared site includes, but is not limited to, the following items:

    • inventory reports,

    • compliance initiative charters,

    • abstract summary reports,

    • common EOS forms such as inventory templates, group mailbox request form, feedback sheet, excise group manager listing, zip code decoder, etc.

    • WORTS request site for managers, and

    • data source information.  (04-09-2014)
EOS Program Monitoring

  1. EOS will develop an annual return delivery plan in accordance with guidelines found in IRM 1.5, Managing Statistics in a Balanced Measurement System. Plan information should be used for allocation of resources, workload selection, and assessment of program effectiveness.

  2. Non-filer workload can be estimated based on historical data. Historical data is available on the AIMS IVL by source code.

  3. EOS will provide monthly reports to Excise HQ management on the following:

    1. Delivery of leads/returns for classification,

    2. classification selection rates,

    3. survey rates before and after assignment and survey of excessive inventory,

    4. volume and timing of return orders, and

    5. accomplishment of excise examination goals.

  4. At a minimum, the EOS should monitor the following for cycle time:

    1. Average cycle time for open and closed cases, and

    2. average days in process for open and closed cases.

  5. At a minimum, each month, the EOS should monitor returns in the excise WMS by status codes 08, 10 and 12.

  6. At a minimum, the EOS should monitor the following for business results:

    1. Dollars per hour by activity code and project code,

    2. dollars per return by activity code and project code,

    3. return accomplishments,

    4. time applied, and

    5. large assessment cases.

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