4.50.1 Campaign Development Process

Manual Transmittal

December 03, 2020

Purpose

(1) This transmits revised IRM 4.50.1, LB&I Compliance Integration, Campaign Development Process.

Material Changes

(1) Changed references from the Program Management Office (PMO) to Strategy, Policy & Governance (SPG).

(2) Changed references from Campaign Development and Administration (CD&A) to Workload Development and Delivery (WD&D).

(3) Removed Assistant Deputy Commissioner International from the list of Compliance Strategy Council members in IRM 4.50.1.1.1, Authority, because the organization has been disbanded.

(4) Added new subsection IRM 4.50.1.2.2.1, Separation of Duties Application to incorporate relevant content from Exhibit 4.50.1-2, Guidance With Respect to Separation of Duties and Exhibit 4.50.1-3, Guidance with Respect to Participation in Campaign Related Activities and removed Exhibits 4.50.1-2 and 4.50.1-3.

(5) Editorial and terminology changes made throughout.

Effect on Other Documents

IRM 4.50.1 dated May 04, 2018 is superseded.

Audience

LB&I employees

Effective Date

(12-03-2020)

John V. Cardone
Assistant Deputy Commissioner Compliance Integration
Large Business and International Division (LB&I)

Program Scope and Objectives

  1. This IRM provides an overview of the Campaign Development Process. The Assistant Deputy Commissioner Compliance Integration (ADCCI) is responsible for administering the campaign development, administrative and governance processes.

  2. A key focus of LB&I’s mission is to identify the highest potential compliance risks among LB&I taxpayers and to assign resources to address these potential risks. Campaigns are a component of this strategy.

  3. ADCCI ’s responsibilities include planning, guiding, developing, directing and implementing a comprehensive and integrated strategic research and compliance program, including campaign project management activities.

  4. ADCCI will monitor the process to ensure that LB&I’s focus is on identifying compliance risks that impact material segments of LB&I taxpayers, rather than risks determined at the individual taxpayer level. This will allow LB&I to assign its limited resources to the greatest potential compliance risks in the LB&I taxpayer population.

  5. Audience: The primary users of this IRM are LB&I examiners and personnel in examination-related functions. Other IRS employees affected by LB&I’s shift toward issue-based identification of highest compliance risk and implementation of campaigns will also use this IRM.

  6. Policy Owner: Assistant Deputy Commissioner Compliance Integration (ADCCI), LB&I

  7. Primary Stakeholders: All LB&I personnel.

  8. The ADCCI organization is comprised of three components:

    • Strategy, Policy & Governance (SPG)

    • Data Solutions (DS)

    • Compliance Planning and Analytics (CP&A)

  9. Campaigns involve a thorough analysis of data to support the identification and evaluation of potential compliance risk within the LB&I filing population. Campaigns consider potential treatment streams, deployment of resources, identification and delivery of training, mentoring, networking, audit tools, metrics, as well as a robust feedback mechanism to ensure all elements of a campaign are effective and continuously improved. The Campaign Development Process incorporates the agile model by requiring input from users of the Campaign Development Process. Agile development is a methodology that anticipates the need for flexibility and applies a level of pragmatism into the delivery of the finished product. The agile model promotes an environment of continuous collection, review and analysis of data and feedback to enhance selection of work.

  10. Work identified under the Campaign Development Process is completed within the approved treatment streams. Questions on the campaign should be referred to the Campaign Owner, including the nature (mandatory or discretionary) and priority of the work.

  11. The Campaign Portal was opened to all LB&I employees on April 18, 2016 for inputting campaign submission ideas. Campaign submission ideas can be submitted to the new LB&I Campaign Management System at:https://program.ds.irsnet.gov/sites/lbiCampaignManagementSystem/SitePages/gmhwiki.aspx.

  12. The Campaign Development Process objectives include:

    • Providing LB&I workload focusing on strategic issues while balancing resources

    • Providing a robust feedback mechanism for capturing input on the effectiveness of data analysis, issue identification filters, treatment streams, training, tools, and other matters so that campaigns can be refined, improved or reconsidered quickly.

  13. Fairness and integrity are built into the foundation of the Campaign Development Process. See IRM 1.2.1.2.36, Policy Statement 1-236. Throughout the Campaign Development Process there are checks and balances with decisions being documented at many points. For example:

    • Triage of the issue

    • Prioritization of the issue

    • Approvals of return selection filters for the population

    • Compliance Strategy Council’s decision to move forward or not with the campaign

    • Using tailored treatment streams

    • Resource needs

    • Identification and classification of returns

  14. Program Owner: Strategy, Policy & Governance (SPG) within ADCCI is responsible for the administration, procedures and updates to campaigns.

  15. The following are commonly used terms and acronyms.

    Term Definition
    Campaign A campaign is a plan focused on compliance issues, using the appropriate resources and a combination of treatment streams to achieve a desired outcome.
    Campaign Owner A campaign owner is the practice area responsible for the execution and reporting of campaigns approved by the Compliance Strategy Council. Once a campaign submission is approved, it becomes an official campaign.
    Proposal Owner The proposal owner is the practice area that has been assigned to review and assess the campaign submission. The submission does not become a campaign until the Council approves it.
    Acronym Definition
    ADCCI Assistant Deputy Commissioner Compliance Integration
    Council Compliance Strategy Council
    CDF Campaign Development Form
    CDP Campaign Development Process
    CMS Campaign Management System
    CP&A Compliance Planning & Analytics
    DS Data Solutions
    PA Practice Area
    PBS Program and Business Solutions
    PSP Planning and Special Projects
    RICB Risk Identification Control Board
    RICB Part I Approval to Develop and Test Filter
    RICB Part II Approval of the Campaign Filter
    RICB Part III Modifications (Previously Approved Part I or Part II Changes)
    SME Subject Matter Expert
    SPG Strategy, Policy & Governance
    WD&D Workload Development and Delivery

Authority

  1. The authority for the Campaign Development Process comes from the Compliance Strategy Council (the "Council" ). The Council serves as the governing body for the identification, selection, assignment, and allocation of resources for all compliance and enforcement activities for LB&I taxpayers. The Council considers campaign submissions and recommends approval or other actions commensurate with analyzing campaign and compliance risk.

  2. At the direction of the Council, the Campaign Development Process (CDP) has replaced the Compliance Initiative Process (see IRM 4.17.1) for the identification of potential areas of non-compliance in LB&I.

  3. The Council Charter lists the following LB&I officials as members of the Council:

    • Division Commissioner

    • Deputy Division Commissioner

    • Assistant Deputy Commissioner Compliance Integration – Council Chair

    • Director, Program and Business Solutions

    • All Practice Area Directors

    • LB&I Division Counsel

ADCCI Responsibilities within Campaign Development Process

  1. ADCCI plays a critical role in the CDP, aligning work with LB&I’s strategic goals and collaborating across the various areas of LB&I to improve taxpayer compliance.

  2. ADCCI is responsible for several actions within the CDP, including but not limited to:

    • Analyzing the submissions by triaging

    • Developing return selection filters

    • Supporting the practice areas with metrics, feedback mechanisms, campaign development form (CDF) review and presentation to the Council

    • Managing data sources

    • Delivering workload

    • Assisting the Council

    • Maintaining the campaign information in the Campaign Management System (CMS)

Practice Area (PA) Proposal and Campaign Owner Responsibilities

  1. Each proposal owner is responsible for the development and assessment of the campaign submission, including documentation of these steps on the CDF in the CMS. PAs will collaborate with ADCCI as outlined above.

  2. Each campaign owner is responsible for the execution of the campaign, including periodic reporting to the Council. Modifications of the campaign may require subsequent Council approval. The decision to conclude or discontinue the campaign also requires Council approval.

Risk Identification Control Board (RICB)

  1. The mission of RICB is to ensure the enforcement selection process is an equitable and fair process to all taxpayers under Policy Statement 1-236, Fairness and Integrity in the Enforcement Selection. RICB will only approve work using criteria based on tax laws and treasury regulations and not on organization names or their policy positions. The goal of RICB is to ensure that the criteria used for workload selection promotes public confidence that tax laws are being applied impartially.

  2. The RICB seeks to develop repeatable risk identification methods for integration into ongoing workload identification processes. These efforts might be administered within Compliance Planning and Analytics (CP&A) or by other units in LB&I, including the PAs. The RICB plays a role throughout the enforcement process, not only in the development of a campaign filter but also in monitoring their effectiveness, proposing changes or retiring the campaign filter.

  3. In carrying out its role, the RICB reviews requests for new filters and rules to develop campaigns. The RICB makes recommendations to the PAs whether and how to proceed with, modify, or terminate filters. Only after the RICB approves a filter can return data information be shared with the PA.

  4. The RICB is chaired by the CP&A director’s senior technical advisor and is comprised of five senior program managers from ADCCI and two PA program managers in accordance with the RICB charter.

  5. The RICB process allows the development, refinement and testing of filters.

Program Objectives and Review

  1. Program Reports: Within ADCCI, internal systems are used to house documents related to CDP. Access to these systems requires Online 5081 approval.

  2. LB&I ensures that adequate and effective controls are in place during the development, approval and execution of campaigns. Practice areas will provide resources, monitor and report results, and take appropriate actions as submissions move through the CDP.

  3. Program Effectiveness: The program goals are analyzed and addressed in stages 1-6 described in IRM 4.50.1.2. Documentation will include summary reports from SPG including related campaign metrics as well as periodic feedback from the campaign owner. The Council will consider the information from the Campaign Summary Report to determine whether the campaign should continue. SPG will maintain a portfolio of all active, concluded and discontinued campaigns. SPG will document the decisions of the Council.

  4. Annual Review: The review of this IRM occurs annually to ensure accuracy and promote consistent tax administration. The ADCCI is responsible for this review.

Related Resources

  1. ADCCI home page at: https://irssource.web.irs.gov/LBI/Lists/LBIOrgs/DispItemForm.aspx?ID=7

  2. LB&I Campaign Management System at: https://program.ds.irsnet.gov/sites/lbiCampaignManagementSystem/SitePages/gmhwiki.aspx

  3. Campaign mailbox: *LB&I Campaigns

Campaign Submission Development Process

  1. The Campaign Development Process consists of six stages which are further described in the following subsections.

    1. Campaign Proposal and Triage

    2. Campaign Framework and Approach

    3. Campaign Approval

    4. Campaign Execution

    5. Campaign Monitoring and Assessment

    6. Campaign Conclusion

    These stages are depicted in Exhibit 4.50.1-1, LB&I Campaign Flowchart–High-Level Summary.

Stage 1: Campaign Proposal and Triage

  1. The Campaign Management System is open to all LB&I employees to submit campaign ideas. CP&A reviews all campaign submissions and performs the following functions:

    • Triages all submissions for accuracy and completeness

    • Identifies and assigns the submission to a proposal owner.

Stage 2: Campaign Framework and Approach

  1. The processes included in this stage are not all-inclusive and all are not mandatory. Each campaign proposal is unique and may require different processes or documentation. This document should be used as a guide to help determine what is needed for a campaign proposal.

  2. The proposal owner uses a prioritization scoring matrix and recommends whether the campaign proposal should move forward to development.

  3. The proposal owner forms a campaign development team and receives the appropriate concurrence to develop the submission.

  4. The proposal owner collaborates with CP&A to develop, test, modify or terminate the filters through the RICB process. RICB Part I and II approval is required before a campaign proposal is presented to the Council for approval.

  5. The IRS has three main objectives surrounding workload selection:

    • Selecting returns with the highest positive impact on tax administration

    • Selecting work in an unbiased manner without retaliating against, or harassing a taxpayer (see IRM 4.1.5.3.1(3) and section 1203(b)(6) of the IRS Restructuring and Reform Act of 1998)

    • Protecting the confidentiality of the criteria used to select work so taxpayers cannot easily avoid detection

  6. LB&I personnel must ensure fairness and integrity in the enforcement selection process per IRM 1.2.1.2.36 , IRS Policy Statement 1-236.

  7. The proposal owner will recommend treatment streams and calculate resources, durations and schedules.

  8. The proposal owner will identify training and tools and collaborate with ADCCI in establishing compliance goals, metrics and feedback-gathering frameworks.

  9. LB&I personnel must also adhere to guidance regarding separation of duties involving campaign workload selection. LB&I personnel are precluded from performing an examination of a taxpayer and advising, consulting, or mentoring during the examination of a taxpayer if they:

    • Classified that taxpayer’s return, disclosure filing, or response to a soft letter for the purpose of selecting the taxpayer for examination

    • Reviewed or approved the classification of the return

    • Worked with unredacted RICB Parts I, II, or III data as part of the filtering process

Separation of Duties Application
  1. The following paragraphs contain examples of how separation of duties applies in different scenarios.

  2. Campaign Subject Matter Experts and Filter Development: A revenue agent submits a campaign suggestion to the portal. As part of the prioritization and triage, CP&A requests the involvement of a PN SME to assist in developing a filter that will identify returns with the issue identified in the campaign submission. The SME works with CP&A to develop a formula based on items anticipated to be on tax returns. Part I of the RICB form requesting approval for the filter is prepared. The purpose of the initial filter is to generally identify the population from tax return and other data. This step may include consideration of possible interaction of various tax return line items and forms to incorporate areas the field typically considers in risking for the issue. None of these activities are workload selection that will cause separation of duty concerns. SMEs may also be involved in analyzing the redacted results of the Part I filter output. They can provide input to further refine the filter to narrow results and provide more focus. However, SMEs may NOT be involved in reviewing un-redacted output of filters. SMEs can assist CP&A in preparing the Part II RICB request, but cannot see the Part II filter results (where taxpayer identifying information is involved). If SMEs review un-redacted filter results, or participate in classification (see below) of particular taxpayers, they cannot participate in examining or mentoring examining agents in connection with those taxpayers. They can participate in generic network calls, and discuss and consult on issues arising in the campaign, to the extent not taxpayer specific. They may also mentor and advise with respect to other taxpayers.

  3. Disclosure Reviews: Some campaigns involve review of disclosures that are mandated by formal IRS guidance (such as a listing notice, or an identified transaction of interest). Other disclosures can come from a variety of sources such as a treaty or an agreement to exchange information with a foreign country, an OECD BEPS Action 5 disclosure of rulings, or a John Doe summons. In these situations, a policy decision has been made that certain information should be received by the IRS to assist compliance efforts. These disclosures frequently contain identifying information, including names and EINS of promotors and participants. For instance, if the campaign involves a transaction of interest or listed transaction notice, the participant and material advisor disclosures are reviewed. This screening, sorting, or grouping process is typically performed by examiners or SMEs. Reviews at this stage are generally intended to sort the population into more manageable groups, but not for the purpose of selecting them for examination. Usually, the goal is to narrow the population by risk and select participants (and their returns) or materials advisors to forward for classification. Individuals involved in disclosure reviews for triage and developing a campaign submission or developing classification materials for classifiers to use in determining which cases to audit will not be considered by LB&I to be involved in workload selection. Accordingly, they are permitted to participate and advise in network calls, and may consult on taxpayer-specific issues arising in the campaign. Sometimes, however, the disclosure review directly identifies returns for examination without the need for further classification. In those instances, the individuals involved may not consult on taxpayer-specific issues arising in the campaign.

  4. Participation in Governing Bodies: LB&I PA Directors and other executives participating in steering committees, CISC, and the Council provide oversight over the entire campaign process. Their roles in reviewing and approving campaigns, including filter reviews, considering appropriate treatment streams, monitoring, modification and discontinuing campaigns does not require any direct involvement in workload selection or execution of treatment streams. Accordingly, their activities should not pose any separation of duty risk.

  5. Classifiers: PA personnel classify returns for taxpayer-specific treatment streams. Because classifying is performing workload selection, classifiers and those reviewing classifications will not be permitted to participate in examination or execution of taxpayer specific treatment streams (with respect to returns they classified). In addition, they cannot participate in advising or mentoring with respect to returns they classified. Classifiers and their reviewers can participate in network calls and discuss issues arising in campaigns but cannot consult on specific taxpayers if they classified the return. They can participate in examination and mentoring involving returns they did not classify. For example, an examiner from CBA DFO-W that classifies campaign returns to be worked by CBA DFO-E, could examine returns that were classified by CBA DFO-E. Classifiers cannot participate in initial prioritization and triage, Campaign Submission Owner development, Part I and Part II filtering, advising in campaign calls (with respect to returns they classified), monitoring, modification and discontinuing the campaign, given their involvement in taxpayer specific activities.

  6. Examiners: Once classifiers have selected taxpayers for examination (or other taxpayer specific treatment streams), or the case is sent directly to the field for risk analysis after being selected for examination, subject matter and geographic PA personnel (Examiners) will execute the campaign. Examiners will, where appropriate for the campaign, risk returns, conduct exams, be involved in campaign calls as advisors and listeners and act as formal campaign mentors. They can also participate in Campaign Submission Owner development and Part I filtering, monitoring, modification and discontinuing campaigns. Examiners cannot participate in Part II filtering. They cannot classify returns they will examine

  7. Managers: Frontline managers typically will have direct involvement in many of the steps previously described. Senior Managers, for example territory or program managers, may also have direct involvement in certain campaign activities. Managers with such direct involvement will be subject to the same limitations as the personnel they manage. For example, the manager reviewing return classification will be subject to the same limitations as the classifier performing that function. Managers who do not have direct involvement in a taxpayer specific function (Part II filtering or classification), but who rather perform a general oversight function, will not be limited in their participation in other campaign activities.

  8. Counsel: Counsel generally acts as advisors to LB&I and are not the decision makers with respect to campaigns, including campaign execution, monitoring, modification and discontinuing campaigns. Counsel may consult on all campaign activities in accordance with their internal guidance.

Stage 3: Campaign Approval

  1. The proposal owner presents the campaign proposal, with SPG’s assistance if needed, to the Council for approval consideration.

  2. SPG may review campaign proposals for presentation to the Council and posts the submission-related documents and final deck for presentation to the Council’s SharePoint site (restricted access).

  3. SPG also provides the Council with summary reports of submission and proposal statistics.

  4. The Council reviews all parts of the CDF through the signature section, considers recommendations and votes to approve proposals as campaigns.

  5. Once a proposal is approved by the Council, the CDF is completed and the campaign proceeds to Stage 4, Campaign Execution.

Stage 4: Campaign Execution

  1. The campaign owner determines how to execute the campaign based on the approved CDF. If filtering is involved, the campaign owner contacts CP&A to conduct return identification. CP&A assists with:

    • Securing project and tracking codes

    • Workload identification using approved return selection filters

    • Classification of returns

    • Assigning returns to the field

  2. If filtering is not involved, the campaign owner continues with the approved treatment stream.

  3. The campaign owner develops any relevant tools, documents, and other campaign information needed to conduct the campaign.

  4. The campaign owner periodically reports out progress made on the campaign to the Council.

  5. If a campaign needs to be modified, the campaign owner submits the recommended changes for Council approval through CMS. Examples of changes are:

    • Deviations in the number of returns for workload selection

    • Impact on resources

    • Changes in treatment streams

Stages 5 and 6: Campaign Monitoring, Assessment and Conclusion

  1. The Council considers progress and summary reports on all campaigns.

  2. SPG provides the Council with campaign feedback and metrics to assist in that determination.

  3. The Council determines whether a campaign should be continued, modified, or concluded. SPG records the Council’s determinations.

  4. CP&A provides post-campaign monitoring and periodic updates to the Council.

Additional Work Sources

  1. In addition to the high-risk returns identified by campaigns, additional work sources may be used to supplement inventory and balance coverage of the LB&I population.

  2. ADCCI may identify issues of significant impact to the LB&I population from additional work sources that warrant screening for all taxpayers within this population. These issues can be identified from all areas and individuals within LB&I, and/or networking interactions with specialists in technical areas. As issues are identified, further research and analysis are undertaken to determine whether the scope of the issue is significant to warrant campaign consideration.

LB&I Campaign Flowchart – High-Level Summary

This is an Image: 69791001.gif

Please click here for the text description of the image.