4.24.24 Form 637 Registration Files: Administrative Procedures for Initial Applications and Case Reviews 4.24.24.1 Program Scope and Objectives 4.24.24.1.1 Background 4.24.24.1.2 Authority 4.24.24.1.3 Roles and Responsibilities 4.24.24.1.4 Program Management and Reviews 4.24.24.1.5 Terms and Definitions 4.24.24.1.6 Acronyms 4.24.24.1.7 Related Resources 4.24.24.2 Creating, Maintaining and Monitoring Form 637 Registration Files 4.24.24.3 Form 637 Registration Group - IMS Process 4.24.24.4 Form 637 Registration Group - IMS Workflow Processes 4.24.24.4.1 Status 10 Pending - Assignment of Form 637 IMS Cases Queue Manager Q1 4.24.24.4.2 Status 15 Territory Assigned - Form 637 IMS Case Assignments by LT 4.24.24.4.3 Status 20 Compliance Check - Overview Initial Application and Sample Reviews Conducted by Form 637 Registration Group TE 4.24.24.4.3.1 Status 20 - Initial Application Procedures Specific to the Form 637 Registration Group TE 4.24.24.4.3.2 IMS Status 20 - Initial Compliance Review Procedures Specific to Form 637 Registration Group Cases 4.24.24.4.3.3 IMS Status 20 - Compliance Review Procedures for Excise Group Cases 4.24.24.4.4 Status 30 LT Review - Form 637 Case Criteria 4.24.24.4.4.1 Status 30 - Procedures for Form 637 Registration Group Cases 4.24.24.4.4.2 Status 30 - Procedures for Excise Group Cases 4.24.24.4.5 Status 65 Q Manager Denial, Revocation or Suspension - Overview 4.24.24.4.5.1 Status 65 - Denial of Applications or Revocation of Registrations for Form 637 Registration Group Cases 4.24.24.4.5.2 Status 65 - Required Actions to Deny Applications or Revoke Registrations for Form 637 Registration Group Cases 4.24.24.4.5.3 Status 65 - Procedures for Applications Denied for a Form 637 Registrant 4.24.24.4.6 Status 70 LT Review from Field - Procedures Relating to Changes in Ownership or Denial of Appeal 4.24.24.4.7 Status 80 Final Determination by LT - Procedures 4.24.24.4.8 Status 85 Final Disposition by TE - Procedures 4.24.24.5 Monitoring Registrants Using Form 637 Indicator on Business Master File (BMF) 4.24.24.5.1 Procedures to Post or Delete Form 637 Indicator on BMF 4.24.24.5.2 Notice CP 241 Procedures Exhibit 4.24.24-1 IMS Workflow Status Codes Part 4. Examining Process Chapter 24. Excise Tax Section 24. Form 637 Registration Files: Administrative Procedures for Initial Applications and Case Reviews 4.24.24 Form 637 Registration Files: Administrative Procedures for Initial Applications and Case Reviews Manual Transmittal August 25, 2021 Purpose (1) This transmits the new IRM 4.24.24, Excise Tax, Form 637 Registration Files: Administrative Procedures for Initial Applications and Case Reviews. Material Changes (1) As part of the expansion and restructuring of IRM 4.24.2, Form 637 Excise Tax Registrations, selected new guidance was added and the following parts were removed from IRM 4.24.2 and were moved to and incorporated and/or modified in new IRM 4.24.24. (2) Guidance incorporated and/or modified is described in the table below. New IRM Subsection Description of Change 4.24.24.1 Program Scope and Objectives Incorporated guidance that addresses: Administrative procedures for Form 637 Registrations, initial applications and case reviews. Form 637 Registration Group Issue Management System (IMS) processes and workflow. Monitoring Form 637 registrants using the Form 637 indicator on Business Master File (BMF). Identification of Service employees directly impacted by this IRM Section (section). Identification of the executive responsible for the administration, procedures and technical guidance specific to Excise Tax issues. Identification of the executive who owns Excise Tax Examination operations. Identification of the Business Operating Divisions that are primary stakeholders in section’s subject matter. 4.24.24.1.1 Background Incorporated guidance that discusses administrative procedures for Form 637 initial applications and case reviews. 4.24.24.1.2 Authority Incorporated guidance that identifies the foundational support under IRM 4.24 series, specific Policy Statements and Delegation Orders that authorizes Form 637 initial applications and case reviews. 4.24.24.1.3 Roles and Responsibilities Incorporated guidance that identifies the executives responsible for Excise Tax Examination policy and procedures, operational examination compliance activities, as well as the policies communicated and carried out by excise examiners. 4.24.24.1.4 Program Management and Reviews Incorporated guidance that addresses Program Reports, Program Effectiveness and the Annual Review. 4.24.24.1.5 Terms and Definitions Incorporated guidance listed in the table that itemizes the terms and definitions used throughout this section. 4.24.24.1.6 Acronyms Incorporated guidance listed in the table that itemizes the acronyms used throughout this section. 4.24.24.1.7 Related Resources Incorporated guidance that includes the electronic links to statutory and regulatory authority for the Form 637 registration program, as well as the statutory authority for the Taxpayer Bill of Rights. 4.24.24.2 Creating, Maintaining and Monitoring Form 637 Registration Files Moved guidance from 4.24.2.13. Clarified that Campus Input Operators, the Form 637 Registration Group Manager, Queue Managers and LTs create Form 637 Registration case files. 4.24.24.3 Form 637 Registration Group - IMS Process Moved guidance from 4.24.2.9. Incorporated new guidance that the group managers will prepare and issue denials of registration to an applicant and letters of revocation to a registrant. 4.24.24.4 Form 637 Registration Group - IMS Workflow Processes Moved guidance from 4.24.2.10. Provided general guidance about the case processing procedures and workflow for Form 637 IMS case work. 4.24.24.4.1 Status 10 Pending - Assignment of Form 637 IMS Cases Queue Manager Q1 Moved guidance from 4.24.2.10.1. Incorporated new guidance that the Queue Manager, as well as the Form 637 Registration Group Manger, are authorized to make territory assignments on status 10 cases. 4.24.24.4.2 Status 15 Territory Assigned - Form 637 IMS Case Assignments by LT Moved guidance from 4.24.2.10.2. Emphasized that excise groups must establish ERCS controls for discretionary reviews. 4.24.24.4.3 Status 20 Compliance Check - Overview Initial Applications and Sample Reviews Conducted by Form 637 Registration Group TE Moved guidance from 4.24.2.10.3. Incorporated new guidance if third party contacts are necessary, then the TE has 120 days to close an initial application. An extension to the closing time may be approved by the LT. This meets the requirement under SB/SE 04-0220-0002, Form 637 Initial Application Timeframes and Registration Indicators, dated February 21, 2020. 4.24.24.4.3.1 Status 20 - Initial Application Procedures Specific to the Form 637 Registration Group TE Moved guidance from 4.24.2.10.3.1. Incorporated new guidance that extends time frame for the TE to issue Letter 3681 from 5 to 10 days from the assignment of the case file. This meets the requirement under SB/SE 04-0220-0002, Form 637 Initial Application Timeframes and Registration Indicators, dated February 21, 2020. 4.24.24.4.3.2 IMS Status 20 - Initial Compliance Review Procedures Specific to Form 637 Registration Group Cases Moved guidance from 4.24.2.10.3.2. 4.24.24.4.3.3 IMS Status 20 - Compliance Review Procedures for Excise Group Cases Moved guidance from 4.24.2.10.3.3. Incorporated new guidance that if unresolved deficiencies were discovered on the IDRS compliance check or the applicant failed to respond, then the application will be denied and not forwarded to an excise group unless the applicant or registrant is under exam. 4.24.24.4.4 Status 30 LT Review - Form 637 Case Criteria Moved guidance from 4.24.2.10.4. 4.24.24.4.4.1 Status 30 -Procedures for Form 637 Registration Group Cases Moved guidance from 4.24.2.10.4.1. 4.24.24.4.4.2 Status 30 - Procedures for Excise Group Cases Moved guidance from 4.24.2.10.4.2. 4.24.24.4.5 Status 65 Q Manager Denial, Revocation or Suspension - Overview Moved guidance from 4.24.2.10.5. Incorporated new guidance that group managers will issue denials, revocations or suspensions for cases assigned to their groups. 4.24.24.4.5.1 Status 65 - Denial of Applications or Revocation of Registrations for Form 637 Registration Group Cases Moved guidance from 4.24.2.10.5.1. 4.24.24.4.5.2 Status 65 - Required Actions to Deny Applications or Revoke Registrations for Form 637 Registration Group Cases Moved guidance from 4.24.2.10.5.2. Incorporated new guidance that if compliance issues are identified, then Letter 3696 must be issued and resolved within 30 days. If the registrant failed to resolve compliance issues after 30 days, then the LT or TE will recommend revocation of the approved registration. 4.24.24.4.5.3 Status 65 - Procedures for Applications Denied for a Form 637 Registrant Moved guidance from 4.24.2.10.5.3. 4.24.24.4.6 Status 70 LT Review from Field - Procedures Relating to Excise Tax Field Group Recommendations Moved guidance from 4.24.2.10.6. Incorporated guidance that status 70 cases will only include changes in ownership or denials of appeals from excise groups. 4.24.24.4.7 Status 80 Final Determination by LT - Procedures Moved guidance from 4.24.2.10.7. 4.24.24.4.8 Status 85 Final Disposition by TE Procedures Moved guidance from 4.24.2.10.8. 4.24.24.5 Monitoring Registrants Using Form 637 Indicator on Business Master File (BMF) Moved guidance from 4.24.2.17. 4.24.24.5.1 Procedures to Post or Delete the Form 637 Indicator on BMF Moved guidance from 4.24.2.17.1. Incorporated new guidance that the E-Fax number for CCP can be found on Knowledge Management. 4.24.24.5.2 Notice CP 241 Procedures Moved guidance from 4.24.2.17.2. Incorporated guidance from SB/SE 04-0220-0003, Computer Paragraph (Notice CP 241) Procedures for 637, Registrations, dated February 25, 2020, and clarified that a sample of condition code 1 reviews satisfies the IGM requirements. Exhibit 4.24.24-1 IMS Workflow Status Codes Moved guidance from Exhibit 4.24.2-3. Incorporated new guidance that described status 70 cases as changes in ownership or denials of appeals from excise groups. Effect on Other Documents This material supersedes selected subsections that are identified in the Material Changes above from IRM 4.24.2, Form 637, Excise Tax Registrations, dated July 17, 2018. This includes SB/SE 04-0220-0002, Form 637 Initial Application Timeframes and Registration Indicators, dated February 21, 2020, and SB/SE 04-0220-0003, Computer Paragraph (Notice CP 241) Procedures for 637 Registrations, dated February 25, 2020. Audience SB/SE Specialty Examination, Excise Tax Examination employees and personnel at the Centralized Specialty Tax Operations (CSTO). Effective Date (08-25-2021) Kellie L. McCann Acting Director, Examination - Specialty Policy Small Business/Self Employed 4.24.24.1 (08-25-2021) Program Scope and Objectives Purpose - This section describes the administrative procedures for Form 637 initial applications and case reviews, that include creating, maintaining and monitoring Form 637 Registration files, Form 637 Registration Group Issue Management System (IMS) process, Form 637 Registration Group IMS Workflow Processes and monitoring registrants using the Form 637 indicator on Business Master File (BMF). Audience - The audience for this section includes the SB/SE Director, Examination - Specialty, Chief, Estate & Gift/Excise Tax, Form 637 Registration Group employees, Excise Territory Managers, Excise Group Managers (hereinafter referred to as "group managers" throughout this section), Excise Revenue Agents (RAs), Fuel Compliance Agents (FCAs) and Fuel Compliance Officers (FCOs) (collectively and hereinafter referred to as "excise examiners" throughout this section) and CSTO employees. Policy Owner - Director, Examination - Specialty Policy is responsible for the administration, procedures and updates related to processing Form 637 applications and follow-up compliance reviews. Program Owner - Director, Examination - Specialty Examination owns Excise Tax Examination operations. Primary Stakeholders - Primary stakeholders include the Chief, Estate & Gift/Excise Tax, Excise Territory Managers, Form 637 Registration Group Manager, Excise Group Managers, CSTO and Excise Case Selection (ECS). Other Stakeholders - Other areas that follow these policies and procedures include Appeals, Agency Wide Shared Services, Counsel, SB/SE Examination, Large Business & International and Tax Exempt and Government Entities. Program Goals - The processes and procedures provided in this section are consistent with the objectives or goals for Excise Tax - Examination that are addressed in IRM 1.1.16.3.3.1, Organization and Staffing, Small Business and Self/Employed Division, Excise Tax Examination. 4.24.24.1.1 (08-25-2021) Background The Internal Revenue Code (IRC) requires each person who engages in certain activities subject to federal excise tax (FET) to be registered by the IRS as a taxpayer who engages in these activities. The taxpayer must register with the IRS before undertaking the activity. In other situations, a person must register with the IRS as a taxpayer who conducts certain activities to receive an excise tax benefit that may come with such activity, such as, buying or selling an article tax-free or filing a claim for refund or credit. The taxpayer must use Form 637 to apply for registration under IRC 4101, Registration and bond, IRC 4222, Registration, or IRC 4682, Definitions and special rules, for the specified activity. Form 637 includes a listing of activities for which registration is required or allowed. Refer to the tables found in new IRM 4.24.2.3, Applications under IRC 4101, and IRM 4.24.2.4, Applications under IRC 4222 and IRC 4682, that list all applicable activity letters. Letter 3689, Approval of Excise Tax Registration, is issued when an application is approved. A copy of the Form 637 application is not considered proof of registration. Letter 3689 should be retained as proof of registration. Letter 3689 does not constitute a determination letter. For example, an approval of an AB, NB or AL registration does not mean all future product produced unequivocally qualifies for the biodiesel mixture credit/alternative fuel mixture credit. If an application for registration is denied or an approved registration is revoked or suspended, then the applicant or registrant will be notified in writing and the reason for the denial, revocation or suspension will be provided. An approved registration remains valid until revoked or suspended. Registration status can be found at Confirm Online Form 637 Registration Status. All Form 637 registration numbers issued after February 1, 2004, are comprised of 10 digits. For registration numbers issued prior to the preceding date: The non-UV/UP registration number has eight digits. The activity letters UP and UV registration numbers are comprised of nine digits. 4.24.24.1.2 (08-25-2021) Authority Form 637 registrations are processed under the following authorities: IRC 4101 - Registration and bond with respect to the tax imposed by IRC 4041(a)(1), Tax on diesel fuel and kerosene in certain cases, or IRC 4081, Imposition of tax, every person producing or importing biodiesel (as defined in IRC 40A(d)(1), Biodiesel and renewable diesel used as fuel; biodiesel), or alcohol (as defined in IRC 6426(b)(4)(A), Credit for alcohol fuel, biodiesel, and alternative fuel mixtures: alcohol), and every person producing second generation biofuel (as defined in IRC 40(b)(6)(E), Alcohol, etc. used as fuel; second generation biodiesel). Treas. Reg. 48.4082-5 - Registration relating to diesel fuel or kerosene removed, entered or sold in Alaska for ultimate sale or use in an exempt area of Alaska. IRC 4222 - Registration for certain tax-free sales under IRC 4221, Certain tax-free sales. Treas. Reg. 52.4682-5(d) - Exports; registration relating to the tax imposed, under IRC 4681, Imposition of tax, on ozone-depleting chemicals (ODC's) that are exported. Delegation Order SB/SE-1-23-7 (formerly SB/SE DO 4.36, Rev. 3), Approval or Rejection/Disapproval or Revocation of Form 637, delegates the authorities for approving, denying, revoking and suspending Form 637 registrations. Delegation Order 4-6 ( Rev. 1), Taxable Fuel Bond, delegates the authority to make the final determination as to the amount of bond required to be given by an applicant or existing registrant, to satisfy certain registration requirements under IRC 4101 with respect to the tax imposed by IRC 4041(a)(1) or IRC 4081. This delegation order also delegates the authority to require the posting of a bond to satisfy certain registration requirements under IRC 4101 for Form 637 registration and to set the value of such bond. This section is tailored for the administrative procedures for Form 637 initial applications and case reviews. Refer to IRM 4.24.2 for a general overview of Form 637 Registrations, including applications under IRC 4101, IRC 4222 and IRC 4682, as well as for general guidance. Refer to IRM 4.24.23, Operational Procedures and Responsibilities for Form 637 Registrations and Secure Airport Terminals (SAT), for information about the operational roles, responsibilities and procedures for Form 637 Registrations and SATs. 4.24.24.1.3 (08-25-2021) Roles and Responsibilities Director, Examination - Specialty Policy is responsible for the procedures and policies addressed in this section. Program Manager, Excise Fuel Policy is responsible for ensuring the procedures are accurate and updated regularly as needed. The Chief, Estate & Gift/Excise Tax is responsible for ensuring the procedures within this section are adhered to by employees in Excise Tax Examination. Form 637 registration case work is processed by the following areas: Centralized Specialty Tax Operations (CSTO) - All initial Form 637 applications are received by the Cincinnati IRS Center (CIRSC), date stamped and forwarded to CSTO for initial processing. Refer to IRM 4.24.23.5, Responsibility of Centralized Specialty Tax Operations. Excise Case Selection (ECS) and Workload Selection and Delivery (WSD) - The selection of sample review cases and monitoring the Annual Form 637 Registration Work Plan is conducted by ECS/WSD. Refer to IRM 4.24.23.4, Responsibility of Excise Case Selection (ECS) and Workload Selection Delivery (WSD). Form 637 - The Form 637 Registration Group administers and maintains Form 637 registrations. The Form 637 Registration Group consists of Lead Technicians (LTs), Tax Examiners (TEs), an Exam Technician and a Management and Program Assistant. Refer to IRM 4.24.23.6, Responsibility of the Form 637 Registration Group. Excise Groups - Form 637 compliance reviews assigned to excise groups are conducted by excise examiners. Group managers are responsible for concurring with the excise examiner's compliance review recommendation and approving penalty determinations, if applicable. Refer to IRM 4.24.23.7, Role and Responsibilities for Excise Groups. 4.24.24.1.4 (08-25-2021) Program Management and Reviews Program Reports - Information regarding the reporting of program objectives are included on, but not limited to: Examination Headquarters Monthly Briefing. Program Manager Monthly Briefing. SB/SE and Examination Operational Reviews and Business Performance Review. Program Effectiveness - Program goals are measured with Excise Embedded Quality Performance Reports that monitor whether quality attributes are applied uniformly and consistently. Annual Review - Excise Tax Policy - Program Manager is responsible for reviewing the information in this section annually to ensure accuracy and promote consistent tax administration. 4.24.24.1.5 (08-25-2021) Terms and Definitions Below are definitions for terms frequently used throughout this section: Term Definition Applicant A person that has applied for registration on Form 637. Form 637 Form 637, Application for Registration (For Certain Excise Tax Activities), is used to apply for excise tax registration for activities under IRC 4101, IRC 4222 and IRC 4682. Letter of Registration Letter 3689 is issued when an application is approved for registration. Notice CP 241 Notice that is generated indicating a registrant may no longer meet the registration requirements and follow-up actions may be required. Registrant A person that has been issued a letter of registration (Letter 3689). 4.24.24.1.6 (08-25-2021) Acronyms Below are the acronyms and their definitions used throughout this section. Acronym Definition BMF Business Master File CCP Centralized Case Processing CID Criminal Investigation Division CIRSC Cincinnati IRS Center CLA Case Level Activities CP Computer Paragraph CSTO Centralized Specialty Tax Operations ECS Examination Case Selection EEFax Enterprise e-Fax EIN Employer Identification Number ERCS Examination Returns Control System FCA Fuel Compliance Agents FCO Fuel Compliance Officers IDRS Integrated Data Retrieval System IMS Issue Management System IRC Internal Revenue Code LT Lead Technician Q Manager Q2 Queue Manager Q2 RA Revenue Agent TE Tax Examiner WSD Workload Selection and Delivery 4.24.24.1.7 (08-25-2021) Related Resources Form 637 registrations are processed under the following authorities: IRC 4101 - Registration and bond with respect to the tax imposed by IRC 4041(a)(1), Tax on diesel fuel and kerosene in certain cases, or IRC 4081, Imposition of tax. Treas. Reg. 48.4082-5 - Diesel fuel and kerosene; Alaska relating to qualified retailer of diesel fuel or kerosene sold in Alaska for nontaxable uses. IRC 4222 - Registration for certain tax-free sales under IRC 4221, Certain tax-free sales. Treas. Reg. 52.4682-5(d) - Exports; registration relating to the tax imposed, under IRC 4681, Imposition of tax, on ozone-depleting chemicals (ODC's) that are exported. Form 637 registration status can be located at Confirm On-line Form 637 Registration Status. For general information about basic excise examiner responsibilities, excise IRM Sections, primary excise returns and claims forms, as well as materials about excise fuel abstracts and issues, refer to IRM 4.24.4 , Excise Fuel Taxes Workload, Policies and Procedures. For general guidance, procedures, tax law and regulations on a wide variety of excise issues, refer to Excise Tax Knowledge Base. The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. Refer to IRC 7803(a)(3), Commissioner of Internal Revenue; other officials, execution of duties in accord with taxpayer rights. For additional information about the TBOR, refer to Taxpayer Bill of Rights. For information relating to identity theft, refer to IRM 25.23, Special Topics, Identity Protection and Victim Assistance. 4.24.24.2 (08-25-2021) Creating, Maintaining and Monitoring Form 637 Registration Files Form 637 Registration case files are created by Campus Input Operators, the Form 637 Registration Group Manager, Queue Managers and LTs. Form 637 Registration case files are maintained and updated by the Form 637 Registration Group Manager, Queue Managers and LTs. If a Form 637 application is received by an excise group, then the excise examiner will scan and forward the application to the Form 637 Registration Group via secure e-mail. The original application will be mailed to the Form 637 Registration Group. Note: Form 637 Registration Group Contacts may be found on Knowledge Management at the Registration Information Shelf, Other Related Resources book on the Form 637 Registration Group Contact Information page. All contacts with applicants or registrants by the Form 637 Registration Group during or after reviews will be documented on Form 637 IMS case file Case Level Activities (CLA). All contacts with applicants or registrants by excise examiners will be documented on Form 9984 or the Form 637 IMS activity record. Contacts with registrants by the excise examiner between compliance reviews will be documented on Form 9984 and e-mailed to the LT to upload into the Form 637 IMS case file. Upon completion of a sample review, discretionary review or an examination, which requires an update to the Form 637 registration number due to a change in the IRS registration numbering system, the excise examiner will inform the registrant that a national registration number will be issued, if applicable. At that time, the manager or the Form 637 Registration Group will issue Letter 5023, Change in Form 637 Registration Number, along with Pub 5039, Terms and Conditions for Form 637 Registration. The excise examiner will include this information in the recommendation section on Form 13499-C, 637 Recommendation. Refer to IRM 4.24.23.7.4(11), Excise Group Procedures - Initial Application, for more information. Note: TEs will include this information under their recommendation in IMS and document it in the CLA. 4.24.24.3 (08-25-2021) Form 637 Registration Group - IMS Process All Form 637 Registration case files are maintained and monitored electronically utilizing the IMS Team Website. These files contain scanned documents from historical paper files, previous reviews and electronic case documents. All Form 637 Registration cases are designated as one of the following review types on IMS: 588I - Initial Application Review. 588S - Sample Review. 588D - Discretionary Review. The IMS Team Website is utilized by Form 637 Registration Group LTs and Queue Managers to assign cases to the group manager’s queue or to a Form 637 Registration Group TE. IMS is utilized by the Form 637 Registration Group to work all aspects of initial applications and sample reviews. IMS is utilized by group managers to: Assign cases to excise examiners. Review cases currently in process. Approve the excise examiner’s recommendation regarding an applicant or registrant. Issue Letter 3689, Approval of Excise Tax Registration, Letter 3696, Form 637 Compliance Review Summary, and/or Letter 5023, Change in Form 637 Registration Number, to the applicant or registrant, as warranted. Issue Letter 3685, Denial of Excise Tax Registration, or Letter 3691, Letter of Revocation, using the Form 637 registration manager’s contact information. Return the Form 637 IMS case file to the excise examiner, if warranted. Form 637 Registration Group and excise group cases are controlled on IMS under status codes. Refer to Exhibit 4.24.24-1 for a table containing a list of IMS status codes and a brief description about their uses and purposes. 4.24.24.4 (08-25-2021) Form 637 Registration Group - IMS Workflow Processes The sections below address case processing procedures and workflow for Form 637 IMS case work. Each subsection describes the IMS life cycle of a case from the time a case is created on IMS until it is moved to closing status. 4.24.24.4.1 (08-25-2021) Status 10 Pending - Assignment of Form 637 IMS Cases Queue Manager Q1 The Form 637 Registration Group Manager's Queue Manager Q1 displays all Form 637 IMS case files in Status 10 (Pending) that have been input by CSTO or created by an LT. Status 10 cases include new applications and follow-up compliance reviews. The Form 637 Registration Group Manager and/or Queue Manager shall assign territory assignments on all Form 637 IMS cases in Status 10. Territory assignments are based on the geographical location of the applicant or registrant. Once the territory has been assigned, the Form 637 IMS case file will be placed in Status 15 (Territory Assigned) in the case inventory for the LT assigned to the territory. 4.24.24.4.2 (08-25-2021) Status 15 Territory Assigned - Form 637 IMS Case Assignments by LT Status 15 Form 637 IMS case files include initial applications, discretionary and sample reviews. The LT will assign Form 637 IMS case files in Status 15 to TEs in the Form 637 Registration Group and to excise groups from LT Assignment Queue 1. Under LT Assignment Q1, the LT will assign initial applications in Status 15 to the TE and update to Status 20 (Compliance Check). Note: When a case is updated to Status 20, IMS automatically generates an e-mail to the TE assigned the case. Form 637 Registration Group sample reviews in Status 15 will be assigned by the LT to a TE and updated to Status 20 (Compliance Check). Note: Sample reviews that are to be worked by the Form 637 Registration Group do not require ERCS controls. The LT assigning a sample review to an excise group will: Establish the case file on Examination Returns Control System (ERCS) and verify the correct project and tracking code(s) are assigned to the case. Refer to IRM 4.24.23.10, Recording Time Charged to Form 637 Registration Program. Upload the Form 637 historical file into the Form 637 IMS case file, if applicable. Update the Form 637 IMS case file to Status 40 (GM Compliance Review) and select the appropriate team code. Place the Form 637 IMS case file in the designated group manager queue. The LT assigning a discretionary review to an excise group will: Upload the Form 637 historical file into the Form 637 IMS case file, if applicable. Update the Form 637 IMS case file to Status 40 (GM Compliance Review) and select the appropriate team code. Place the Form 637 IMS case file in the designated group manager queue. 4.24.24.4.3 (08-25-2021) Status 20 Compliance Check - Overview Initial Application and Sample Reviews Conducted by Form 637 Registration Group TE A Form 637 IMS case file in Status 20 is either an initial application or a sample review assigned to the Form 637 Registration group. This will allow the TE to: Conduct an Integrated Data Retrieval System (IDRS) compliance check on the applicant or registrant and all related persons. Conduct an Accurint search on the applicant or registrant. Complete the initial application or sample review. If the initial application or sample review is designated a Form 637 Registration Group case, then the TE will complete the initial application or sample review. The TE will: Conduct the applicable registration tests. Verify satisfactory tax history. Recommend approval or denial on an initial application. Recommend continuing, suspending or revoking a registration on a sample review. The initial application or sample review will only be designated as an excise group case, if there is an open excise examination, no compliance issues have been identified and Letter 3681 was not returned "undeliverable" for an initial application only. If the initial application or sample review is designated an excise group case, then the appropriate registration tests and final determination will be conducted by the excise group. If the LT returns an initial application or sample review to the TE for corrections, then it will be updated to Status 20 and returned to the TE. The TE must take action within 10 days of assignment. The Form 637 review of an initial application in IMS Status 20 designated as a Form 637 Registration Group case will be completed within 45 days of assignment on IMS. If deficiencies are discovered, then the TE has 60 days from the date of assignment to complete the initial application review. If third-party contacts are necessary, then the TE has 120 days from the date of assignment to complete the initial application review. Extensions to these timeframes may be approved by the LT. TE’s must document the Form 637 IMS case file CLA with the reasons for the delay and the estimated completion date. The IDRS compliance check for an initial application in Status 20 designated as an excise group case will be completed within 45 days of assignment on IMS. If deficiencies are found on an application designated as an excise group case, then the TE will attempt to resolve the deficiencies and recommend denial if the deficiencies are not resolved. At that time, the TE will document the Form 637 IMS recommendation screen and the Form 637 IMS case file CLA accordingly. Applications in Status 20 that contain mixed activity letters assigned to both the Form 637 Registration Group and excise groups will be worked as an excise group case. For example, an application with Activity Letter "A" for the manufacturer of sports fishing equipment and Activity Letter "D" buyer of sports fishing equipment for export will be worked as an excise group case. The excise group will make the final determination on all activity letters, which were applied for on the application. The TE is not required to complete the activity letter Job Aid. These types of applications will be processed as an excise group case following procedures found in IRM 4.24.24.4.3.3. 4.24.24.4.3.1 (08-25-2021) Status 20 - Initial Application Procedures Specific to the Form 637 Registration Group TE The following procedures apply to all initial applications processed in Status 20 by the Form 637 Registration Group TE. The TE will: Review the original Form 637 application in IMS on the "Original Form 637 Application" screen. Print the "F637.pdf" file for reference when conducting the compliance check and use it when completing the "Form 637" screen in IMS. Prepare and mail Letter 3681, Notification for Form 637, within 10 calendar days from assignment of the Form 637 IMS case file and include his or her name, employee ID number, telephone and fax numbers in the contact information. If the application is a Form 637 Registration Group case, then the TE must enclose Pub 5170 and Notice 609, Privacy Act Notice, with Letter 3681. The signed copy of Letter 3681 must be uploaded into the Form 637 IMS case file. Note: Pub 5170 and Notice 609 should not be enclosed with Letter 3681 for excise group cases. These documents will be enclosed with Letter 5708, Initial Contact - Form 637 Reviews, which is mailed by the excise examiner. Complete the "Form 637 Data Screen" by verifying the name and address on the application with the name on IDRS, obtain an "INOLES" and upload it into the Form 637 IMS case file and complete the General Information - Part III. Note: The "Form 637 Data Screen" content mirrors that on a Form 637 application. The TE must transcribe all information submitted by the applicant on the original Form 637 application onto the "Form 637 Data Screen" in IMS, thus capturing it for processing purposes. If an initial application is incomplete, then secure the information necessary to complete the application. The case will be placed in suspense for two weeks to allow the applicant sufficient time to provide necessary information. Information obtained will be added to the "Form 637 Data" screen. If an application does not contain a valid signature, then secure a new signature and dated application from a person whose signature binds the applicant. If additional information is required to complete the activity test or IDRS compliance check, then the TE must allow sufficient time to lapse (14 calendar days after mailing Letter 3681) before contacting the applicant by telephone. Letter 3682, Additional Information Request, must be issued following the telephone call. Refer to IRM 4.24.23.3, Initial Contact, for additional information. Note: When making or receiving phone calls, the TE must follow IRM 21.1.3.2.3, Required Taxpayer Authentication, to ensure he or she is speaking to the appropriate taxpayer or taxpayer's representative to prevent unauthorized disclosure of tax information. Letter 3682 must be used to request information to complete the activity test or IDRS compliance check (e.g., an EIN or SSN, payments or delinquent returns). Letter 3682 may be faxed to the applicant when requesting additional information. The TE will include his or her name, employee ID number, telephone number and fax number in the contact information. If Letter 3682 is faxed to the applicant, then the Department of the Treasury/IRS seal must be on the fax cover sheet. Refer to IRM 4.24.23.2, Use of Fax Machine or Enterprise Electronic Facsimile (EEFax), for additional information on the use of fax machines and EEFax. Secure appropriate IDRS research necessary to complete the IDRS compliance check. If deficiencies are discovered, then the applicable IDRS research documents will be scanned and uploaded in the Form 637 IMS case file to support the TE's findings. This includes: BMFOLT/BMFOLI, IMFOLT/IMFOLI, SUMRY or TXMODA. Scan and upload into the Form 637 IMS case file any information received relating to processing the application, such as corrected signatures, tax returns secured, address change request or verification of payments on tax account balances due. The TE will forward via Form 3210 any non-filed returns secured to the appropriate IRS Submission Processing campus. A copy of any non-filed return(s) that are secured will be uploaded in the Form 637 IMS case file and the word/phrase "Possible Duplicate - Do Not Process" notated in red ink on the face of the return(s). The TE also needs to upload Form 3210 and document the CLA with the date the returns were received and the date they were mailed to the campus. If necessary, a non-filer referral using Form 5346, Examination Information Report, will be prepared for other federal taxes, such as income or employment taxes. At that time, Form 5346 will be prepared by the LT and forwarded to the Form 637 Registration Group manager for approval and submission to Planning and Special Programs (PSP). Refer to IRM 4.4.23.3.4, Form 5346, Examination Information Report, for additional information. Determine if the case file is an excise group case or a Form 637 registration group case and then document all actions taken on the Form 637 IMS case file CLA. 4.24.24.4.3.2 (08-25-2021) IMS Status 20 - Initial Compliance Review Procedures Specific to Form 637 Registration Group Cases The following procedures apply to an application in Status 20 that is designated a Form 637 Registration Group case. After completing the procedures in IRM 4.24.24.4.3.1, the TE will: Perform Internet research. For example, he or she may "Google" the applicant to determine if the entity is (or will) be engaged in the business activity or activities for which the registration was submitted. The Internet can also be used to confirm and establish further facts and information about the applicant, including alternate addresses and operating locations. For example, the web page of a Form 637 applicant, which requests activity letter "F," establishes no information regarding educational activities, thus requiring follow-up actions. Perform Accurint business and people searches. Accurint may reflect name/address/TIN that are geographically or name-linked and may show employees at a given company or location. Research can then be conducted on those names via Command Code IRPTRO to identify W-2's, K1's and TIN. If Accurint research reveals any unusual information about the applicant, such as criminal convictions, then the TE will refer the application to the Form 637 Registration Group manager for follow-up action. Complete the Form 637 Activity Letter Job Aid for each activity letter to establish if the applicant is engaged in the business associated with that activity letter or is likely to be engaged in such activity in the near future. Contact the applicant and/or related person by telephone and issue Letter 3682 to secure any non-filed returns and/or payments that were discovered during the activity test and IDRS compliance check. Upload the Form 637 Activity Letter Job Aid and complete the Form 637 IMS recommendation screen. If the applicant and all related persons of the applicant have a satisfactory tax history and the applicant meets the activity test, then recommend the approval of application. If the applicant does not meet the activity test or the applicant and/or any related person does not have a satisfactory tax history, then solicit a withdrawal statement from the applicant. If no response is received, then document the Form 637 IMS case file CLA and recommend denial of the application. If no response is received to a request for additional information needed to complete the Form 637 Registration process within a reasonable amount of time, then recommend denial of the application. Record all actions taken on the application in the Form 637 IMS case file CLA. This includes the closing recommendation and reasons supporting the recommendation. Close the Form 637 IMS case file to the LT for review and update the IMS status to Status 30 (LT Review). When a Form 637 Registration Group case application is denied by the TE, the TE will: Notate the reasons for the denial on the Form 637 IMS case file CLA, Form 637 Activity Letter Job Aid and Form 637 IMS recommendation screen under the comments section. If denied because of outstanding tax balances, then upload the IDRS research that substantiates the outstanding tax balances. Deny the application on IMS and close the Form 637 IMS case file to the LT for review and update the IMS status to 30. If a Form 637 Registration Group case has multiple activity letters and the TE recommends that certain activities be approved and others be denied, then the TE will close the case to the LT for the final determination on all activity letter(s). The Form 637 IMS case file will be updated to Status 30 and placed in the LT Process Q2. If it is determined that an applicant did not apply for the correct activity letter and may qualify for another activity letter, then the TE will: Secure a new application with the activity letter that applies. Secure a withdrawal statement from the applicant for the application with the incorrect activity letter. Deny the incorrect activity letter on IMS. If a Form 637 Registration Group case is returned to a TE to address an issue or issues that prevented the LT from approving the TE’s recommendation, then the TE must take action on the Form 637 IMS case file within 10 days from reassignment. The TE will: Resolve all issues notated in the Form 637 IMS case file and, if necessary, contact the LT for clarification. Document all actions taken to resolve issue(s) on the Form 637 IMS case file CLA. Upload any documentation requested by the LT or that is necessary to resolve the issue(s). Close the case back to the LT and update the IMS status to Status 30. A Form 637 Registration Group case will not be returned to a TE from Status 30 a second time to address or resolve new issue(s), unless it has been approved by the Form 637 Registration Group manager via the Form 637 IMS case file CLA. Note: The case will be returned a second time to TE, if the TE did not resolve or address the previous issue(s) notated by the LT on the first review. 4.24.24.4.3.3 (08-25-2021) IMS Status 20 - Compliance Review Procedures for Excise Group Cases After the Form 637 Registration Group TE completes the procedures in IRM 4.24.24.4.3.1 the following actions must be taken on applications designated excise group cases. The TE will: Complete the Form 637 IMS recommendation screen for a group case with the filing requirements and payment histories for the applicant and related person(s). If no deficiencies were discovered on the IDRS compliance check, then recommend "Approve" on IMS. If deficiencies were discovered on the IDRS compliance check or the applicant failed to respond, then the application will be denied. The TE will notate the deficiencies discovered on the Form 637 IMS recommendation screen, the Form 637 IMS case file CLA and recommend "Deny" on IMS. If there is an open examination, then the initial application will be assigned to the excise group for resolution. Document the Form 637 IMS case file CLA. Close the IMS case file to the LT. The IMS case file will be updated to Status 30. 4.24.24.4.4 (08-25-2021) Status 30 LT Review - Form 637 Case Criteria The criteria for what constitutes a Form 637 Registration Group or an excise group case will be reviewed as warranted based on the needs of the Excise Tax Program. If excise groups need additional work, then cases that were previously considered Form 637 Registration Group cases may be reclassified as excise group cases. Conversely, if a case has been assigned to a particular excise group that has other higher priority workload, then the case may be reassigned to the Form 637 Registration Group. Both Form 637 Registration Group and excise group Form 637 IMS case file initial applications completed and approved by the TE will be updated to IMS Status 30 for an LT review. The Form 637 IMS case file is returned to the LT that assigned the Form 637 IMS case file to the TE in Status 20. The LT will confirm the determination by the TE that the Form 637 IMS case file is: An excise group case. A Form 637 Registration Group case. Form 637 Registration Group cases are kept within the Form 637 Registration Group, and the LT will make the determination to approve the application for registration. All cases that are denied on IMS by the TE are updated to Status 65 (Q Manager Deny/Revoke) and placed in the Form 637 Registration Group Manager Queue Manager Q2 for concurrence and to make the final determination. If a Form 637 Registration Group case has multiple activity letters and some are denied and others are approved, then the Form 637 IMS case file will be updated to Status 30 and placed in the LT Process Q2 for a final determination on the activity letter(s) that the TE recommended be approved. The denied activity letters will be forwarded to Status 65. 4.24.24.4.4.1 (08-25-2021) Status 30 - Procedures for Form 637 Registration Group Cases Form 637 IMS case files in Status 30 will be reviewed in IMS by the assigned territory LT. If the LT agrees with the TE's recommendation to approve the Form 637 application, then the LT will make a final determination and approve the application on IMS. Upon the approval of an application, the LT (or TE) will: Prepare and issue Letter 3689 to the applicant and enclose Pub 5039. Letter 3689 contains the approved registration number and the effective date of registration. Upload the signed Letter 3689 into the Form 637 IMS case file. Complete and forward the Form 2363, Master File Entity Change, to have the Form 637 indicator added to IDRS. Refer to IRM 4.24.24.5.1, Procedures to Post or Delete the Form 637 Indicator on BMF, for detailed guidance. Document Form 637 IMS case file CLA of all actions taken. If the LT assigns procedures in (2) above to a TE, then the LT will: Update the Form 637 IMS case file status to Status 85 (Final Disposition by TE) and assign to the TE. Provide closing instructions to the TE via Form 637 IMS case file CLA, if applicable. When a Form 637 Registration group case has multiple activity letters and some are being approved and others are being denied by the TE, the final determination on the activity letter(s) recommended for approval will be made by the LT. If the LT concurs with the TE recommendation to approve, then the LT will: Approve the activity letter(s) on IMS. Follow the procedures in (2) above. Update the Form 637 IMS case file to Status 65. When the LT reviews a Form 637 Registration group case and issues are discovered, which prevent the LT from approving the application, it will be returned to the TE in Status 20 for corrective actions. The LT will: Notate the issue(s) and actions the TE should take, if applicable, on the Form 637 IMS case file CLA. Update the Form 637 IMS case file to Status 20. If the issue(s) can be resolved via phone or e-mail with the TE, then the LT will contact the TE, resolve the issues, document his or her actions in the Form 637 IMS case file CLA and approve the registration. The LT will not send a Form 637 IMS case file back to the TE a second time for new issues identified unless the LT has the approval of the Form 637 Registration Group Manager. If approval is not received, then the LT will address the new issue. If the TE did not resolve or address the original issue(s) notated by the LT on the first review, then the LT may return a Form 637 IMS case file to the TE a second time. At that time, any disagreements between the LT and the TE on case actions will be elevated to the Form 637 Registration Group Manager for resolution. 4.24.24.4.4.2 (08-25-2021) Status 30 - Procedures for Excise Group Cases Status 30 Form 637 IMS cases that are considered excise group cases will be sent to the excise groups to make the final determination on the application. This includes: Initial applications without compliance issues designated as an excise group case. Initial applications with mixed activity letters, i.e., containing an excise group and Form 637 Registration Group activity letters. Initial applications without compliance issues received from an approved registrant adding an excise group activity letter(s) to its current registration. Initial applications deemed a Form 637 Registration Group case that cannot be processed by the Form 637 Registration Group. Initial applications that have an open excise examination. Form 637 IMS cases will be assigned to an excise group from the LT Process Queue 2. The LT assigning an initial application to the excise group must: Establish the case file on Examination Returns Control System (ERCS) and verify the correct project and tracking code(s) are assigned to the case. Refer to IRM 4.24.23.10, Recording Time Charged to Form 637 Registration Program. Upload the Form 637 historical file into the Form 637 IMS case file, if applicable. Update the Form 637 IMS case file to Status 40 (GM Compliance Review) and select the appropriate team code. Assign the Form 637 IMS case file to the group manager queue. 4.24.24.4.5 (08-25-2021) Status 65 Q Manager Denial, Revocation or Suspension - Overview When it is determined a Form 637 Registration should be denied, revoked, suspended or the taxpayer requests withdrawal of a registration, the Form 637 IMS case file is updated to Status 65 and placed in IMS Queue Manager Q2 (Q Manager Q2), Deny and Revoke/Suspend queue to make the final action on IMS. The term Q Manager Q2 is IMS’s queue name for the Deny and Revoke/Suspend queue within IMS and has certain administrative permissions for processing Form 637 IMS case files. The Q Manager Q2 is assigned to the Form 637 Registration Program with oversight by the Form 637 Registration Group manager. Note: Group managers also have an IMS Deny and Revoke/Suspend queue and must close Form 637 IMS case files that are denied, revoked or suspended. Refer to IRM 4.24.23.9, Procedures Relating to Denials, Revocations and Suspensions of Registrations, for additional guidance. The Form 637 Registration Group manager's concurrence is required on all Form 637 IMS case files that are denied, revoked or suspended in his or her group. He or she will: Review the Form 637 IMS case file and TE’s recommendation to deny, revoke or suspend registration. Document his or her concurrence in the Form 637 IMS case file CLA. Take final action on IMS. Update the Form 637 IMS case file to Status 80 (Final determination by the LT) or Status 85 (Final disposition by the TE) for the appropriate registration letter(s) to be issued. 4.24.24.4.5.1 (08-25-2021) Status 65 - Denial of Applications or Revocation of Registrations for Form 637 Registration Group Cases When it is determined that an applicant or registrant, including a related person as defined under Treas. Reg. 48.4101-1(b)(5), does not meet the applicable registration tests, or has not responded to a request for additional information, the application or registration will be denied or revoked. The applicant or registrant must be notified in writing that the application or registration is denied or revoked and the basis for the denial or revocation provided. Letter 3685 is used for denials and Letter 3691 is used for revocations. An application should be denied or registration revoked, if an applicant or registrant: Does not meet the applicable registration tests. Refer to IRM 4.24.23.9, Procedures Relating to Denials, Revocations and Suspensions of Registrations, for registration tests not met. Meets the exceptions to the requirement for registration under Treas. Reg. 48.4222(b)-1. Note: Only applies to manufacturer's excise taxes. Has requested, in writing, to withdraw the Form 637 application or registration. Applied for the wrong activity letter(s). Fails to respond to the initial contact letter after 14 calendar days and it was not returned as "undeliverable" or an initial contact letter is returned "undeliverable" and the address matches that on IDRS. Has not provided additional information within 30 days of the request. Exceptions to the requirement for registration under Treas. Reg. 48.4222(b)-1, which apply only to manufacturer's retailer's excise taxes, are: State and local governments. Foreign purchasers for export. United States. Supplies for vessels and aircraft. 4.24.24.4.5.2 (08-25-2021) Status 65 - Required Actions to Deny Applications or Revoke Registrations for Form 637 Registration Group Cases If the Form 637 Registration Group manager concurs with the denial or revocation of registration, then he or she will: Detail his or her concurrence and the basis for the denial or revocation on the Form 637 IMS case file CLA. Update the Form 637 IMS case file to Status 80 (Final Determination by LT) or Status 85 (Final Determination by TE). The LT or the TE will: Prepare and issue Letter 3685 or Letter 3691 to the applicant or registrant with reasons for the denial or revocation. Upload a copy of the signed letter into the Form 637 IMS case file. Update the Form 637 IMS case file to Status 90 (Complete). The applicant or registrant will have 10 days from the post mark date on the letter to submit a written appeal regarding the denial or revocation. If an applicant or registrant does not respond within 10 days, then he or she will be required to reapply for registration. If an applicant appeals the denial or revocation in writing within 10 days, then the appeal will be uploaded into the Form 637 IMS case file. At that time, the LT will review the appeal. If the LT determines the Form 637 Registration process should continue, then he or she will take the appropriate actions to continue the registration process and document his or her actions via the Form 637 IMS case file CLA. If the LT determines that the registration process should not continue, then the LT will forward the Form 637 IMS case file to the Form 637 Registration Group manager who will follow the contested denials and revocations procedures found in IRM 4.24.23.9, Procedures Relating to Denials, Revocations and Suspensions of Registrations. If an applicant is denied a registration due to deficiencies (e.g., unfiled tax returns or balances due) and such deficiencies are satisfied within 30 days from the date of Letter 3685, then the LT will approve the registration. At that time, the LT will document actions taken in the Form 637 IMS case file CLA and upload any correspondence submitted by the applicant in the Form 637 IMS case file and update to Status 85 to have registration letter issued. If an application is denied or a registration revoked due to missing information and such information is provided within 30 days from the date of Letter 3685, then the LT will update the Form 637 IMS case file to Status 20 and assign a TE to complete the Form 637 review. If the Form 637 Registration Group manager does not concur with the denial or revocation of a registration, then the Form 637 IMS case file CLA will be documented and the case sent back to the TE for follow-up actions. The Form 637 IMS case file will be updated to Status 20. 4.24.24.4.5.3 (08-25-2021) Status 65 - Procedures for Applications Denied for a Form 637 Registrant If a current Form 637 registrant submits an application designated a Form 637 Registration Group case and compliance issues are found or a related person has compliance issues, then the application will be denied by the TE. At that time, the LT or TE will: Prepare and issue Letter 3685 for the activity letter(s) denied (refer to IRM 4.24.24.4, Status 65 - Action to Deny Form 637 Registration Group Cases). Prepare and issue Letter 3696 and Pub 5039, notating the compliance issues. Upload signed copies of Letter 3685 and Letter 3696 into the Form 637 IMS case file. The Form 637 IMS case file will not be closed to Status 90. It will remain in Status 80 or 85 for follow-up action by the TE or LT on the compliance problems identified in Letter 3696. The registrant will be given 30 days to resolve compliance issues. If the Form 637 registrant becomes compliant within 30 days of the issuance of Letter 3696, then the additional activity then will be approved. Letter 3689, will be issued for the approved activity along with Pub 5039. At that time, the LT or TE will update Form 637 IMS case file to Status 90. If after 30 days, the registrant has not resolved the compliance issue(s) and has not responded, then the LT will recommend revocation of the approved registration. At that time, the LT will document the basis for the revocation in the Form 637 IMS case file CLA and update the case to Status 65. If Form 637 Registration Group manager concurs with the revocation, then he or she will: Detail his or her concurrence and basis for the revocation in the Form 637 IMS case file CLA. Revoke the approved registration on IMS. Assign the Form 637 IMS case file back to the LT in Status 80 or the TE in Status 85 to issue Letter 3691. Refer to IRM 4.24.23.9, Procedures Relating to Denials, Revocations and Suspensions of Registrations, for additional information. 4.24.24.4.6 (08-25-2021) Status 70 LT Review from Field - Procedures Relating to Changes in Ownership or Denial of Appeal Status 70 cases are Form 637 IMS case files with a change in ownership closed by an excise group to the LT or a recommended denial of an appeal. If it is a change in ownership case, then the LT will: Process the change in ownership in the Form 637 IMS case file. Prepare and issue Letter 3689 and Letter 3691. Update the Form 637 IMS case to Status 90. If it is a recommend denial of an appeal case, then the LT will: Review the Form 637 IMS case file for the response from the excise examiner. Document the Form 637 IMS case file CLA with the findings. Update the Form 637 IMS case to Status 65. 4.24.24.4.7 (08-25-2021) Status 80 Final Determination by LT - Procedures Form 637 IMS case files assigned to an LT in Status 80 include, but are not limited to, ownership changes, name changes, or those ready for final disposition. The LT will document all actions taken and contacts made in Form 637 IMS case file CLA. When a Form 637 IMS case file is assigned to Status 80 for a final disposition, the LT (or delegate) will: Prepare the applicable Form 637 Registration letter(s) or other correspondence to the applicant or registrant and sign the Form 637 Registration Group manager’s name or stamp the Form 637 Registration Group manager’s name using a signature stamp, if available. Scan and upload signed letter(s) into the Form 637 IMS case file under "administrative issue section," and mail original letter to the applicant or registrant. Input or remove the Form 637 indicator. Refer to IRM 4.24.24.5.1, Procedures to Post or Delete the Form 637 Indicator on BMF, for additional information. Once all actions are completed, the LT will change the Form 637 IMS case file status to "Complete Review" and update the Form 637 IMS case file to Status 90. The Form 637 IMS case file is now finalized in IMS. 4.24.24.4.8 (08-25-2021) Status 85 Final Disposition by TE - Procedures Once the final determination has been made by the LT to approve a registration or the Form 637 Registration Group manager to deny, revoke or suspend a registration, applicable Form 637 Registration correspondence will need to be prepared and sent to the applicant or registrant. The TE assigned to a Form 637 IMS case file in IMS Status 85 will: Prepare the applicable Form 637 Registration letter(s) or other correspondence to the applicant or registrant and sign the Form 637 Registration Group manager’s name or stamp the Form 637 Registration Group manager’s name using a signature stamp, if available. Scan and upload signed letter(s) into the Form 637 IMS case file under "administrative issue section" and mail original letter to the applicant or registrant. Forward the Form 2363 request to have the Form 637 indicator added to or removed. Refer to IRM 4.24.24.5.1 for additional information on removing or adding the Form 637 indicator. Document all actions taken on Form 637 IMS case file CLA. Once the above actions are completed, the TE will change the Form 637 IMS case file status to "Complete Review" and update the Form 637 IMS case file to Status 90 (Complete). The Form 637 IMS case file is now finalized in IMS. 4.24.24.5 (08-25-2021) Monitoring Registrants Using Form 637 Indicator on Business Master File (BMF) A Form 637 indicator can be placed on Business Master File (BMF). The Form 637 indicator is designed to aid in monitoring Form 637 registrants for compliance. Eleven conditions have been defined that monitor registrants. When any of these conditions are met, Notice CP 241 is generated indicating the registrant may no longer meet the registration requirements and follow-up actions may be required. Refer to IRM 4.24.24.5.2(3) for a description of these condition codes. The Notice CP 241 monitoring system does not override the requirement to conduct periodic Form 637 compliance reviews. 4.24.24.5.1 (08-25-2021) Procedures to Post or Delete Form 637 Indicator on BMF The indicator on the BMF account should be updated when: A new applicant is registered. A registration is revoked. Note: The Form 637 IMS case file will be documented via Form 637 IMS case file CLA, Form 9984 or CLA record that this procedure was completed. Form 2363 must be completed and faxed to Centralized Case Processing (CCP) that will update the indicator on the BMF account. Note: If the Form 637 Registration Group manager or delegate has the necessary IDRS Command Codes BNCHG and ENREQ in his or her IDRS profile, then this can be accomplished without preparing Form 2363. The E-fax number for CCP may be found on Knowledge Management at the Form 637 Registration shelf, Current Issues book on the Where to send the Form 2363 page. The Form 637 Registration Group manager or delegate will: Verify the accuracy of the EIN, name of the applicant or registrant and name control. Ensure that the Form 637 indicator is added or removed from the registrant’s BMF account using "1" to turn on the indicator or "9" to turn off the indicator. The Form 637 Registration Group manager or delegate will use command codes ENMOD or BMFOLE to verify the BMF account has been updated with the Form 2363 information. 4.24.24.5.2 (08-25-2021) Notice CP 241 Procedures Form 637 registrants whose indicators are active will be monitored for compliance. A Notice CP 241 is generated when one or more of the eleven conditions listed below is met. The condition printed on the notice identifies the reason it was generated. On a monthly basis, the Form 637 Registration Group Manager or delegate will download the Notices CP 241 from the Control D WebAccess Server. Notice CP 241 will be reviewed by the Form 637 Registration Group manager or delegate and appropriate action as described in IRM 4.24.24.5.2(4) below are taken. The 11 conditions listed below indicate that excise involvement may be required for the registrant's account: (1) FTD PENALTY ASSESSED. The deposit penalty can be for any type of tax including income, excise or employment tax. The return for which a deposit was not made is listed in the information section of the notice. (2) RETURN NOT FILED. Failure to file a return of any type. This indicator is designed to protect unpaid taxes in a delinquency situation. The type of return not filed is indicated in the information section of the notice. (3) FORM 720 FILED-TAX OWING. Form 720 is filed reflecting a tax liability, but no payments or deposits have been made. (4) FORM 720 NO DEPOSITS. Form 720 was filed with full payment of tax liability with return, but the applicant or registrant is required to make deposits. (5) FINAL RETURN. Form 720 was filed noting "final return." (6) DELINQUENCY-THIRD NOTICE. The registrant is in collection Status Code 56, which indicates a third notice for payment has been issued. The delinquent taxes can be for any type of return. The form number and tax period are shown in the information section of the notice. (7) DUPLICATE REGISTRATION. The registrant has either attempted to obtain, or has obtained, a second registration using the same EIN. (8) DEPOSITS NOT RECEIVED. Two months after the date the Form 637 indicator was input to BMF, the registrant did not make a deposit of excise tax. (9) FORM 720 NOT FILED. Eight months after the date the Form 637 indicator was input on BMF, a Form 720 was not filed by the registrant. (10) BANKRUPTCY. The registrant filed for bankruptcy. (11) CID FREEZE. A CID freeze code has posted. When a Notice CP 241 is generated, the Form 637 Registration Group manager or delegate will review, prioritize and determine the next action required for each notice. If conditions code 1 is indicated, then a representative sample will be selected and the following actions will be completed: Review the Form 637 IMS case file for prior activity addressing the condition. Secure appropriate IDRS research necessary to ensure all tax modules requiring attention are known. If after reviewing the IDRS research and the condition has not been resolved, then contact the registrant using Letter 3696 notating the items to be addressed. Note: Allow 14 days from the date of the letter for a response and document all actions on the Form 637 IMS case file CLA. If after reviewing IDRS research it is determined that the condition has been resolved or is not applicable, then document all actions on the Form 637 IMS case file CLA and no further action is required. If conditions 2, 3, 4, 6, 8 and/or 9 are indicated, then the following actions will be completed: Review the Form 637 IMS case file for prior activity addressing the condition. Secure appropriate IDRS research necessary to ensure all tax modules requiring attention are known. If after reviewing the IDRS research and the condition has not been resolved, then contact the registrant using Letter 3696 notating the items to be addressed. Note: Allow 14 days from the date of the letter for a response and document all actions on the Form 637 IMS case file CLA. If after reviewing IDRS research it is determined that the condition has been resolved or is not applicable, then document all actions on the Form 637 IMS case file CLA and no further action is required. If conditions 1, 2, 3, 4, 6, 8 and/or 9 are not addressed in a satisfactory manner within 30 days of contact, then action must be initiated to revoke or suspend the registration until the condition is corrected. If condition 5 is indicated, then review IDRS to ascertain it is a final return. If so, then send Letter 3687, Verification of Excise Tax Registration, to the registrant to confirm whether the registration is still needed. If it is determined (after reviewing IDRS) this is not the final return, then document the Form 637 IMS case file CLA and no further action is needed. If condition 7 is indicated, then this case will be worked as a sample review by the Form 637 Registration Group or forwarded to the excise group. If condition 10 is indicated, then the Form 637 Registration Group manager or designee will review IDRS information, document the Form 637 IMS case file CLA and take appropriate actions. If condition 11 is indicated, then the Form 637 Group Manager or designee will contact CID to determine the reason for its involvement. At that time, obtain required CID approval before any actions are taken and document accordingly the Form 637 IMS case file CLA. All decisions, actions and contacts with the registrant will be documented on the Form 637 IMS case file CLA. If the registrant has been contacted, then written notification of the final determination will be provided using Letter 3696. Exhibit 4.24.24-1 IMS Workflow Status Codes IMS Status Code Use by Form 637 Group Use by Excise Group Description 10-Pending Yes No Initial status after input by CSTO. Cases are sent to Form 637 Registration Manager Queue 1. 15-Territory Assigned Yes No Assignment to an excise territory. Cases are sent to the territory LT Assignment Queue 1 (general) or Queue 2 (fuel). 20-Compliance Check Yes No Assign to TE for compliance check. 30-LT Review Yes No TE has completed the compliance review and sent to LT. LT will send cases to excise groups. 40-GM Compliance Review Yes Yes LT has assigned the case to the excise group manager’s queue. 50-RA Compliance Review No Yes Excise group manager has assigned case to excise examiner. 60-GM Final Review No Yes Excise examiner has closed case back to group manager. 65-Deny/Revoke Yes Yes Manager Deny/Revoke Form 637 Registration. 70-LT Review from Field Yes Yes Used for change in ownership or recommended denial of an appeal by excise groups. 80-Final Determination by LT Yes No LT final review of case. 85-Final Disposition by TE Yes No Final actions assigned by LT or Form 637 group manager. 90-Complete Yes Yes Form 637 IMS case file closed. More Internal Revenue Manual