4.32.3  Coordination and Roles of Cross-Functional Units

Manual Transmittal

June 07, 2012

Note:All future releases of this IRM will be electronic only.


(1) This transmits revised IRM 4.32.3, Abusive Transactions, Coordination and Roles of Cross-Functional Units.

Material Changes

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

(2) Throughout this IRM, references to Large and Mid Size Business (LMSB) were updated to the new organizational name Large Business and International (LB&I).

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

Reference Description
IRM Added section to explain cross-functional units and use of terms ATTI, ATAT, and AT. Remaining sections were renumbered.
IRM Replaced the term ATG Coordinator with Technical Services Coordinator throughout.
IRM Deleted paragraph 1.
IRM Revised paragraph 4.
IRM Added paragraph 3.
IRM Revised this section to remove references to Appeals participating on IMTs.
IRM Added information regarding Frivolous Return Program.
IRM Added new website link.
IRM Deleted old section and renumbered.
IRM Revised title to reflect new committee name.
IRM Corrected reference to SCS, ESC, and AT issues.
IRM Removed paragraphs (3) and (4).
IRM Corrected processes for CI to initiate parallel examination.
IRM Renumbered section.
IRM Corrected titles.
IRM through IRM Added these subsections.
IRM Describes the role of the Alternative Resolution Implementation Program within Technical Services.

Effect on Other Documents

IRM 4.32.3, dated 03-30-2006, is superseded.


This section provides guidance for Small Business and Self-Employed (SB/SE) Examination area office employees, Tax Exempt and Governmental Entities (TE/GE) employees, and Large Business and International (LB&I) examiners.

Effective Date


Tamera L. Ripperda
Director, Abusive Transactions and Technical Issues SE:S:E:ATTI
Small Business/Self-Employed  (06-07-2012)
Definitions of Cross-Functional Units

  1. For ease of use of this document, the following cross-functional unit names and acronyms are provided:

    • Small Business/Self-Employed (SB/SE) Abusive Transactions and Technical Issues (ATTI)

    • Collection Abusive Tax Avoidance Transactions (ATAT)

    • Office of Appeals

    • Large Business and International (LB&I)

    • SB/SE Division Counsel (ATAT)

    • LB&I Division Counsel

    • Tax -Exempt and Government Entities (TE/GE) Counsel (ATAT)

    • Criminal Investigation (CI)

    • Tax-Exempt and Government Entities (TE/GE) (ATAT)

    • Department of Justice (DOJ)

  2. When referring to a specific cross-functional unit, the most appropriate acronym will be used (i.e., ATTI or ATAT).

  3. When a more generic term is necessary, Abusive Transactions or AT may be used.  (06-07-2012)

  1. The Office of Appeals (Appeals) has authority to consider and negotiate tax and penalty settlements as outlined in:

    • Delegation Order 8-8 (formerly DO-66, Rev. 15). See IRM, Delegation Order 8-8.

    • Policy Statement P-8-47, Consideration to be Given to Offers of Settlement. See IRM, Policy Statement 8-47.

  2. See IRM Part 8, Appeals, for a description of Appeals' mission, jurisdiction, and program.  (06-07-2012)
Appeals Role

  1. Appeals provides an independent assessment of litigating hazards related to abusive tax avoidance transactions.

  2. This role is accomplished by using traditional appeals hearings and alternative dispute resolution (ADR) tools.  (06-07-2012)
Appeals Issue Coordination

  1. Appeals coordinates AT issues where there is an approved Coordinated Issue Paper (CIP), otherwise known as a Compliance Coordinated Issue. Appeals also independently coordinates issues that have wide impact or importance, otherwise known as an Appeals Coordinated Issue (ACI). Appeals develops settlement guidelines for each CIP or ACI.

  2. Once there is an approved CIP or ACI, the Appeals Technical Services Coordinator generally has review and concurrence authority for all settlements of the issue. See IRM 8.7.3, Technical Guidance and International Programs, for additional information.

  3. Appeals also identifies emerging issues that are not officially coordinated within Compliance. This determination is based on the need to address some of the key aspects of an issue with appeals officers, assist them in the early stages of consideration of an issue, and promote consistency in the treatment of the issue in Appeals. In these cases, the Appeals Technical Services Coordinator serves as an information resource.  (06-07-2012)
Alternative Dispute Resolution Tools

  1. Appeals has additional tools available for moving cases through the system: Fast Track Mediation, Fast Track Settlement, and Servicewide Delegation Order 4-25. See IRM, Delegation Order 4-25 (Rev. 2).

  2. Fast Track Mediation (FTM) - Appeals facilitates communication between taxpayers and SB/SE Compliance to help resolve factual issues. FTM, described in Rev. Proc. 2003-41, Appeals Fast Track Mediation Procedure, is designed to help SB/SE taxpayers resolve disputes resulting from examination and collection actions. Most non-docketed cases qualify for FTM.

  3. Announcement 2008-105 provides an opportunity for entities with issues under examination by the Tax Exempt and Governmental Entities Division (TE/GE) to use Fast Track Settlement (FTS) to expedite case resolution.

  4. Fast Track Settlement (FTS), described in Rev. Proc. 2003-40, LMSB/Appeals Fast Track Settlement Procedure, is a broader process that can be elected by taxpayers. FTS is a collaborative alternative dispute resolution process that uses mediation techniques to focus on issues and lead the parties to earlier resolution of the dispute. FTS takes place while the case is in Compliance jurisdiction and is designed to be completed in approximately 120 calendar days. Refer to IRM 4.51.4, LMSB/Appeals Fast Track Settlement Program (FTS), for further information on the FTS process.


    While the title of the division has changed from Large and Mid Size Business Division (LMSB) to Large Business and International (LB&I), as of the date of publication the title of IRM 4.51.4 remains as shown.

  5. Under Servicewide Delegation Order 4-25 Rev. 2, Settlement Offers, Closing Agreements, and Settlement Agreements under Section 6224(c) in Cases with Technical Advisor (TA) Program Issues and Appeals Technical Guidance Program (Compliance Coordinated and Appeals Coordinated) Issues, LB&I team managers and SB/SE territory managers offer a settlement using an approved Appeals Settlement Guideline (ASG). The manager must get the review and concurrence of both the Technical Services Coordinator and the SB/SE program analyst or LB&I technical advisor for the specified industry or issue before finalizing a settlement with a taxpayer.

  6. Under Servicewide Delegation Order 4-25, IRM (14)Settlement Offers, Closing Agreements, and Settlement Agreements under Section 6224(c) in Cases with Technical Advisor (TA) Program Issues and Appeals Technical Guidance Program (Compliance Coordinated and Appeals Coordinated) Issues, technical advisors and managers may offer a settlement using an approved ASG, without need for concurrence of the Technical Services Coordinator, for specific coordinated issues designated by the Chief Appeals.  (06-07-2012)
Appeals Interaction with Abusive Transaction Issues

  1. Appeals no longer participates on Issue Management Teams.

  2. Appeals interaction includes:

    • Tax administration within Appeals;

    • Providing direction to appeals officers as quickly as possible about potentially significant or strategically important issues;

    • Identifying inventory that may be forthcoming in Appeals;

    • Listening to factual and legal presentations, making inquiries to facilitate understanding or clarification of facts surrounding a particular issue, and reviewing redacted or non-case specific forms, pro-forma revenue agent reports, and coordinated issue papers;

    • Issuing an Appeals Settlement Guideline (ASG) or determining an Appeals Settlement Position (ASP) where the issue is not well -defined by Compliance and Counsel has not addressed the legal aspects of the issue(s) raised by Compliance;

    • Evaluating and resolving issues on a case-by-case basis where no uniform settlement position has been identified and approved;

    • Obtaining information from outside stakeholders via taxpayer protests, alternative dispute resolution programs (see IRM, Alternative Dispute Resolution Tools), hosting external stakeholder meetings, soliciting information directly from external stakeholders, and adopting other approaches as deemed necessary.

    • Providing information about Appeals, alternative dispute resolutions, Delegation Order 4-25 and taxpayers' appeal rights, as explained in Pub 5, Your Appeal Rights and How To Prepare a Protest If You Don't Agree, and Pub 4227, Overview of the Appeals Process Brochure; and

    • Assisting in writing settlements and/or resolutions that are simple to administrate, as well as easily understood by Compliance, Appeals and taxpayers.  (06-07-2012)

  1. Participant/investor case building is centralized to better facilitate the initiatives for abusive tax avoidance transactions. The Ogden Campus builds participant/investor cases from lists secured from promoter investigations. The ATTI Senior Program Analyst assigned to perform listkeeper functions works closely in conjunction with Campus and PSP operations to facilitate case selection and classification. For additional information regarding case building and participant lists, see IRM, Participant/Investor/Advisee Lists.

  2. The Campus Frivolous Return Program (FRP) also coordinates with AT investigations. The FRP identifies individuals or promoters preparing or promoting frivolous returns, claims or documents and educates them on their tax responsibilities.

  3. All frivolous documents received in the Campuses are processed at the Ogden Compliance Services Campus.

  4. The program participates in coordinating new system identification of frivolous filings whenever possible and makes referrals to affected stakeholders such as OPR, CI, SB/SE LDC, OTSA and Communications and Government Liaison.

  5. For additional information regarding the FRP, see IRM, Frivolous Return Program (FRP).  (06-07-2012)

  1. Collection’s early involvement is an important and necessary step in working ATAT cases to ensure all issues are addressed.

  2. SB/SE should coordinate with the Area ATAT Collection Coordinator at the start of a promoter investigation. A list of Collection ATAT Coordinators can be found on the IRWeb at MySB/SE, Abusive Transactions and Technical Issues, Collection AT Contacts.

  3. Area Collection Coordinators will in turn determine if an ATAT revenue officer should be assigned to assist in the investigation. If deemed beneficial to the investigation, the ATAT Collection Coordinator will assign the case to a revenue officer.

  4. LB&I Team Managers assigned to promoter investigations also should coordinate with the Area ATAT Collection Coordinator whenever the collectibility of a potential penalty is in question or assistance from Collection would be beneficial.

  5. SB/SE and LB&I should contact the ATAT Collection Coordinator and request that a revenue officer be assigned to assist in the investigation when the following circumstances are present:

    • The promoter has existing balance due liabilities.

    • The examiner is having difficulty locating the promoter and requests assistance.

    • The examiner has knowledge the promoter is liquidating assets or otherwise attempting to place them beyond the reach of the government.

  6. If a revenue officer is assigned to assist in the investigation, the SB/SE or LB&I examiner is responsible for arranging a meeting with Collection to be held within two weeks of case assignment. The purpose of these meetings is to exchange information between Examination or LB&I and Collection and to formulate a promoter investigation strategy. The attendees generally include the examiner, the revenue officer, their respective managers, Counsel and, if possible, the Area ATAT Collection Coordinator. The revenue officer should be prepared to identify any outstanding assessments against the promoter, and the examiner should be prepared to provide information available in the investigation case file.

  7. If it is determined the Service’s ability to collect is jeopardized by the promoter moving assets outside the reach of the Service, the examiner is responsible for any jeopardy assessment actions. The revenue officer is responsible for any required jeopardy levy actions. The examiner and revenue officer should coordinate their respective actions.

  8. When the examiner has completed the promoter investigation and is considering asserting penalties under IRC 6700 or IRC 6701, the examiner should notify the local Collection ATAT Coordinator, who, in most cases, will assign a revenue officer if one has not already been assigned.

  9. Current collectibility should not be a consideration when determining whether to assert a penalty under IRC 6700 or IRC 6701. There may be rare situations when it is appropriate to consider collectibility, such as when the promoter is deceased and there are no assets in the promoter's estate. Unless such a rare situation exists, the penalty should be assessed regardless of current collectibility.

  10. Refer to IRM 5.20.8, Promoter/Preparer Investigations, for more information on Collection ATAT casework.  (06-07-2012)

  1. This section provides information on Counsel's role in the ATAT process.  (06-07-2012)
SB/SE Division Counsel

  1. SB/SE Division Counsel provides legal support and guidance during each step of a promoter investigation and/or a participant examination case.  (06-07-2012)
Servicewide Support

  1. SB/SE Area and Division Counsel are integral partners in the Service’s efforts to combat abusive tax avoidance transactions. SB/SE Counsel coordinates with the Department of Justice (DOJ) and all operating divisions, counsel divisions and Associate Chief Counsel offices. SB/SE Counsel provides coordination and guidance on the early identification of abusive tax avoidance transactions, including formulation of policy and legal positions and continues its support throughout the ATAT process.  (06-07-2012)
Servicewide Compliance Strategy Executive Steering Committee (SCS ESC)

  1. SB/SE Division Counsel serves as a member of the SCS ESC, which provides leadership, Servicewide coordination, and policy regarding the Service’s methods of addressing abusive tax avoidance transactions.  (06-07-2012)
Emerging Issues Group

  1. SB/SE Division Counsel receives information on emerging abusive tax avoidance transactions, refers that information to the Senior Counsel to the Chief Counsel, and provides early leadership and guidance regarding appropriate methods to address ATAT issues.  (06-07-2012)
Issue Management Teams (IMT)

  1. SB/SE Counsel attorneys serve as supporting members and legal advisors on all IMTs.  (06-07-2012)
SB/SE Lead Development Center (LDC)

  1. SB/SE Counsel provides program advice to the SB/SE LDC on promoter investigations (authorizations, processing and closing). SB/SE Counsel also assists in SB/SE training programs and interactive video teletrainings (IVTs).  (06-07-2012)
Promoter/Preparer Investigations

  1. SB/SE Counsel attorneys provide legal support and guidance to the Service’s promoter investigations, including first amendment issues. Counsel assists the Service as necessary in every aspect of its ATAT investigations. Examiners, revenue officers, and other support functions should not hesitate to call on SB/SE Counsel for advice.  (06-07-2012)
Initiation of Investigation

  1. SB/SE Area Counsel attorneys and managers provide input and guidance during six-way conferences and examination/collection meetings.  (06-07-2012)
Promoter Meetings

  1. SB/SE Area Counsel attorneys generally review and provide assistance in preparing information document requests (IDRs), summonses, and interview questions.

  2. SB/SE Area Counsel attorneys are available to attend initial meetings with promoters or preparers, to answer questions, and to assist examiners in interviewing promoters or preparers.  (06-07-2012)

  1. SB/SE Area Counsel attorneys review and refer all summonses related to promoter investigations directly to Department of Justice (DOJ) Civil Trial Section, Central Region for summons enforcement. This directive does not change any of the general rules regarding level of review or required coordination within Chief Counsel, e.g., John Doe summonses or cases involving first amendment issues.  (06-07-2012)
Ongoing Investigation

  1. SB/SE Area Counsel attorneys are an integral part of the Service’s team and are available to provide assistance during each ATAT investigation.  (06-07-2012)
Injunction Referral to Counsel

  1. SB/SE Area Counsel attorneys assist examiners in determining whether there is sufficient evidence to refer a case to Area Counsel to prepare an injunction suit letter to DOJ.  (06-07-2012)
Injunction Referrals to DOJ

  1. Once a promoter case is referred to SB/SE Area Counsel, the assigned attorney analyzes the evidence to determine if is sufficient to warrant an injunction. If the evidence is deemed sufficient, the Area Counsel attorney prepares an injunction suit letter and refers the case directly to DOJ, Civil Trial Section, Central Region.

  2. Counsel, designated as the referral authority pursuant to IRC 7401, authorizes DOJ through the injunction suit letter to file a complaint for injunctive relief against the promoter under one or more of the following code sections:

    • IRC 7402

    • IRC 7407

    • IRC 7408

  3. SB/SE Area Counsel provides a copy of all injunction suit letters to the SB/SE LDC Senior Program Analyst. The attorney assigned should coordinate with the Issue Management Team (IMT), if one has been established, and also should provide a copy of the injunction suit letter to the IMT Lead Counsel. If no significant issue requiring Associate Chief Counsel office review is involved, SB/SE Area Counsel may send a shorter, less detailed injunction suit letter to DOJ. These referrals are sometimes called expedited referrals.

  4. If a promotion involves a significant issue requiring Associate Chief Counsel office review, it is deemed a coordinated referral case. SB/SE Area Counsel attorneys must coordinate technical legal positions in these cases with the IMT Lead Counsel, or, if none, with the SB/SE Assistant Division Counsel, ATAT, and the appropriate Associate Chief Counsel Office as early as possible. Counsel prepares a more detailed injunction suit letter in these cases and follows existing Chief Counsel coordination procedures before referring these cases to DOJ.  (06-07-2012)
Post Referral

  1. SB/SE Area Counsel continues to assist examiners and DOJ throughout the litigation process.  (06-07-2012)

  1. SB/SE Area Counsel provides advice regarding promoter and participant penalty assessments.  (06-07-2012)
Examination of ATTI Participants

  1. SB/SE Counsel is available to provide support for ATTI participant examinations, such as:

    • Summons language and enforcement

    • Taxpayer meetings

    • Statutory Notice of Deficiency language

    • Designating cases for litigation  (06-07-2012)

  1. SB/SE Area Counsel defends the Service’s positions and facilitates its goals through litigation and other alternatives.  (06-07-2012)
Collection of Assessments

  1. SB/SE Division and Area Counsel provide guidance on the collection of assessments, liens, levies, other collection avenues, and program management.

  2. See IRM, Collection, and IRM 5.20, Abusive Tax Avoidance Transactions (ATAT), for further information on the role of Collection in the ATAT process.  (06-07-2012)

  1. The United States Attorney's Office, including certain SB/SE Counsel attorneys designated as Special Assistant United States Attorneys (SAUSAs), represent the United States in Bankruptcy Court to protect the Service’s claims and interests regarding AT penalties and unpaid taxes arising from participation in abusive tax avoidance transactions.  (06-07-2012)
LB&I Division Counsel

  1. LB&I Division Counsel advises the LB&I member of the Servicewide Compliance Strategy Executive Steering Committee (SCS ESC) and helps to coordinate a Servicewide response to abusive tax avoidance transactions and promotions.  (06-07-2012)
LB&I Oversight

  1. LB&I Division Counsel has involvement in the following LB&I functions.  (06-07-2012)
LB&I Tax Shelter Steering Committee

  1. LB&I Division Counsel serves as a member of the LB&I Tax Shelter Steering Committee, which provides leadership and executive oversight in implementing LB&I’s tax shelter program. For more information on the LB&I Tax Shelter Steering Committee, see IRM, LB&I Tax Shelter Committee.  (06-07-2012)
Office of Tax Shelter Analysis (OTSA)

  1. A Special Counsel designated by the LB&I Division Counsel serves as counsel to OTSA, which plans and coordinates LB&I’s tax shelter operations. For more information on OTSA, see IRM, Office of Tax Shelter Analysis (OTSA), LB&I Tax Shelter Committee and LB&I Technical Tax Shelter Promoter Committee (TTSPC).

  2. The designated LB&I Special Counsel works with OTSA and the LB&I Emerging Issue Process Group to identify, coordinate, and gather information on emerging tax shelter issues. The issues are referred to the Chief of Branch 3 in the Office of Associate Chief Counsel (Passthroughs and Special Industries), who forms task forces including LB&I and LB&I Division Counsel personnel to determine the Service’s response to the issues.  (06-07-2012)
Executive Issue Owners

  1. Within LB&I Division Counsel, attorneys are assigned to serve as counsel to the Executive Issue Owners by the LB&I Tax Shelter Steering Committee when a particular issue becomes significant enough to warrant executive oversight and direction. See IRM, Issue Management Team, for more information on IMTs. Contact OTSA for more information on Executive Issue Owners.  (06-07-2012)
Assistance to Audit Teams and Coordination

  1. LB&I Counsel attorneys are available to provide legal support and guidance to audit teams during each step of a promoter investigation and/or a participant examination. They may also coordinate with LB&I technical advisors, Executive Issue Owners, OTSA, and other Counsel divisions and Associate offices, as appropriate.  (06-07-2012)
Coordination with the Department of Justice (DOJ)

  1. LB&I Division Counsel confers with the DOJ on a regular basis to coordinate the litigation of ATAT cases and provides cohesive processes in promoter cases.

  2. LB&I Division Counsel attorneys serve on DOJ trial teams for selected ATAT cases.

  3. LB&I Division Counsel coordinates with DOJ on a continuing basis regarding the issuance and enforcement of promoter summonses.  (06-07-2012)
Promoter Investigations

  1. This section provides information on LB&I Counsel's role in LB&I promoter investigations.

More Internal Revenue Manual