4.63.3 Offshore Voluntary Disclosure Program

Manual Transmittal

January 24, 2018

Purpose

(1) This transmits new IRM 4.63.3, Withholding and International Individual Compliance (WIIC), Offshore Voluntary Disclosure Program.

Material Changes

(1) This is a new IRM.

Effect on Other Documents

None

Audience

The intended audience is IRS employees in all operating divisions who are responsible for ensuring compliance with the reporting and record keeping requirements of offshore investments and income, including the Report of Foreign Bank and Financial Accounts (FBAR). It can be referenced by all campus, field compliance personnel, especially in LB&I IIC, and SB/SE Examination.

Effective Date

(01-24-2018)

John V. Cardone
Director, Withholding and International Individual Compliance Practice Area
Large Business and International Division

Program Scope and Objective

  1. The Offshore Voluntary Disclosure Program (OVDP) offers U.S. taxpayers with undisclosed income from offshore assets and undisclosed income from offshore assets a compliance avenue to resolve income tax liabilities, various tax information reporting obligations relating to foreign financial assets, and FBAR reporting requirements. OVDP provides protection from criminal prosecution and a uniform civil penalty structure for taxpayers who come forward voluntarily and report their noncompliance. OVDP is a program approved by the Commissioner which may be changed or terminated at any time.

  2. To date, three separate OVDP programs have been offered and are now closed. The three programs are:

    • 2009 Offshore Voluntary Disclosure Program (OVDP)

    • 2011 Offshore Voluntary Disclosure Initiative (OVDI)

    • 2012 Offshore Voluntary Disclosure Program (OVDP)

  3. The current OVDP is the latest iteration and is generally referred to as the 2014 OVDP although it is technically a continuation of the 2012 OVDP with significant modifications. The 2014 OVDP became effective July 1, 2014 and serves the same policy objectives of earlier OVDPs. Subsequent sections of this IRM discuss key aspects of the 2014 OVDP.

  4. Audience: The primary users of this IRM are IIC examiners.

  5. Policy Owner: Director, Withholding and International Individual Compliance (WIIC)

  6. Program Owner: WIIC is responsible for administering this program.

  7. Stakeholders: The primary stakeholders are OVDP employees.

Background

  1. These programs are described in detail on www.irs.gov. For the significant changes made to the 2012 OVDP, see 2014 FAQ 1.1. See IRM 4.63.3.1.6 for more information on OVDP FAQs.

Authority

  1. See IRM 9.5.11.9, Voluntary Disclosure Practice.

Responsibilities

  1. The Director, Withholding & International Individual Compliance is the executive responsible for all policies and procedures within the Offshore Voluntary Disclosure Program

Program Management and Review

  1. Program Reports: The Director, WIIC prepares periodic briefing reports for the LB&I division commissioner focusing on:

    • Significant accomplishments and opportunities for improvement

    • Changes in programs that have been implemented

    • Identifying future improvements

  2. The OVDP team maintains an "OVDP Active Cases Management Report" that includes the number of active cases in OVDP at any given time as well as the number of cases that have been shipped to the field for certification.

  3. Annual Review: Operational and program reviews are conducted on a yearly basis.

Terms/Definitions/Acronyms

  1. The following is a list of frequently used acronyms in this program:

    Acronym Term
    AOIU Austin Offshore Identification Unit
    ASED Assessment Statute Expiration Date
    BSA Bank Secrecy Act
    CC Correspondence Coordinator
    CL Certification Librarian
    CI Criminal Investigation
    EGC Employee Group Code
    ET Examination Technician
    FADI Foreign Asset Disclosure Initiative
    FAQ Frequently Asked Question
    FBAR Report of Foreign Bank and Financial Accounts
    FinCEN Financial Crimes Enforcement Network
    IDRS Integrated Data Retrieval System
    ICT Image Control Team
    IMF Individual Master File
    IRC Internal Revenue Code
    IRSN Internal Revenue Service Number
    OVDP Offshore Voluntary Disclosure Program
    PFIC Passive Foreign Investment Company
    RA Revenue Agent
    SFR Substitute for Return
    TE Tax Examiner

Related Resources - Frequently Asked Questions and Answers

  1. Each of the offshore disclosure programs are governed by a set of Frequently Asked Questions (FAQs). The FAQs for each program provide the specific procedures for taxpayer to enter into, participate in, and resolve their offshore noncompliance with the Service. The discussion in this IRM section (4.63.3.1.6 et seq) in no way supersedes, changes, or alters any published FAQs for any of the OVDPs. The FAQs are the governing document on OVDP matters; any inconsistency between the IRM and OVDP FAQs must be resolved in favor of the OVDP FAQs.

  2. The 2014 OVDP FAQs are divided into different sections relating to different aspects of the program. For the modified FAQs related to OVDP submissions made on or after July 1, 2014, the sections are as follows:

    • FAQs 1 - 6 General Program

    • FAQs 7 -11 Key Features of Program

    • FAQs 12 –21 Eligibility for the Program

    • FAQs 22 - 30 OVDP Process

    • FAQs 31- 41 Calculating the Offshore Penalty

    • FAQs 42 - 43 Statute of Limitations

    • FAQs 44 - 46 FBAR Questions

    • FAQs 47 - 48 Taxpayer Representatives

    • FAQs 49 - 55 Case Resolution

  3. The FAQs outline the current program including its objectives, the process of making an offshore voluntary disclosure, eligibility, all penalties imposed by the program, statute of limitations issues, FBAR questions, and more.

  4. A taxpayer who made an OVDP submission prior to July 1, 2014 may request to have their case considered under the penalty structure of the Streamlined Filing Compliance Procedures under the Transition FAQs. See 2014 OVDP FAQ 1.3 for more information.

  5. The 2014 OVDP FAQs can be found online at: https://www.irs.gov/individuals/international-taxpayers/offshore-voluntary-disclosure-program-frequently-asked-questions-and-answers-2012-revised

Related Resources - Taxpayer Rights

  1. The IRS adopted the Taxpayer Bill of Rights in June 2014. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), and for additional information about the Taxpayer Bill of Rights see: http://irweb.irs.gov/AboutIRS/tbor/default.aspx.

  2. Per the Taxpayer Bill of Rights (TBOR), taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay, or ability to provide information timely.

  3. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels. Refer taxpayers to TAS when the contact meets TAS criteria. See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria.

  4. When making a TAS referral, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS in accordance with local procedures.

Reporting Offshore Accounts

  1. U.S. citizens, resident aliens and certain nonresident aliens are required to report worldwide income from all sources including foreign accounts and pay taxes on income from those accounts at their individual rates. There are many legitimate reasons for holding offshore accounts, including convenience, investing and to facilitate international transactions.

  2. The OVDP provides a penalty structure that offers clear benefits to encourage taxpayers to disclose previously unreported foreign accounts or assets now rather than risk detection by the IRS and possible criminal prosecution.

  3. Taxpayers with foreign financial accounts with an aggregate value exceeding $10,000 any time during the year must file a Form 114, Report of Foreign Bank and Financial Accounts (FBAR) electronically through FinCEN’s BSA E-Filing System.

  4. The FBAR is not filed with a federal tax return. It must be filed electronically with the United States Treasury.

    • FBARs reporting information for calendar years 2015 and earlier were due by June 30 of the year following the year for which information was reported and there were no extensions of time to file.

    • Beginning with FBARs reporting information for calendar years 2016 or later are due April 15 of the year following the year for which information is reported. However, FinCEN grants taxpayers an automatic six month extension for filing FBARs. The six month extension requires that FBARs be filed by October 15. If a filer fails to file by October 15, the FBAR violation date is effective as of the April 15 due date of the FBAR.

    • Failure to report the existence of offshore accounts or assets or pay taxes on these accounts can lead to civil and criminal penalties.

Other Information Returns

  1. Depending on the taxpayer’s facts and circumstances, various international information returns may be required. Such international information returns include reporting of foreign financial accounts, foreign corporations, foreign partnerships, transactions with foreign trusts, receipt of gifts or inheritances from foreign persons, and more. The failure to timely file international information returns may result in substantial civil penalties. 2014 OVDP FAQ 5 lists some of the most common international information returns and related civil penalties which may apply to a non-compliant taxpayer.

Criminal Penalties

  1. Taxpayers who decide not to participate in the OVDP may face certain criminal penalties along with the civil penalties as presented in FAQ 5 upon an examination of their returns. FAQ 6 discusses potential criminal penalties a taxpayer may face outside of the OVDP.

Program Requirements

  1. Under the terms of the OVDP, taxpayers must fulfill several requirements in order to remain in the program. FAQ 7 for the necessary requirements for taxpayers participating in the OVDP.

Foreign Financial Institutions or Facilitators Under Investigation

  1. Beginning on August 4, 2014, any taxpayer who has an undisclosed foreign financial account will be subject to a 50-percent miscellaneous offshore penalty if, at the time of submitting the preclearance letter to IRS Criminal Investigation an event has already occurred that constitutes a public disclosure that the institution or facilitator is or has been under IRS or Department of Justice investigation. A list of foreign financial institutions or facilitators meeting these criteria is available. See FAQ 7.2 for full details.

Penalty Framework

  1. The OVDP miscellaneous offshore penalty is imposed on the value of "OVDP assets" as defined in 2014 OVDP FAQ 35. 2014 OVDP FAQ 8 provides a comprehensive example of how the penalty framework works.

Disclosure Period

  1. The OVDP disclosure period has changed during the different voluntary disclosure programs. The disclosure period for the 2014 OVDP is the most recent eight tax years for which the due date has already passed; it does not include fully compliant years. See 2014 OVDP FAQ 9.

PFIC Issues

  1. Many OVDP cases involve passive foreign investment companies (PFIC) issues. The most common situation involves foreign mutual funds which must be reported as PFICs. Often individual taxpayers lack historical information on the cost basis and holding period of PFIC investments, making it difficult for taxpayers to prepare statutory PFIC computations and for the Service to verify them. 2014 OVDP FAQ 10 provides an optional, non-statutory method for taxpayers to compute PFIC gain/loss.

  2. There are many tools available on the OVDP SharePoint to assist examiners in certifying cases with PFIC issues.

Eligibility for OVDP

  1. 2014 OVDP FAQs 12, 13, 14, 15, 20, and 21 discuss various eligibility issues relating to which taxpayers may participate in the OVDP.

The OVDP Process

  1. 2014 OVDP FAQs 22 through 24 provide instructions to taxpayers and tax practitioners on making offshore voluntary disclosures.

Submission Requirements

  1. 2014 OVDP FAQ 25 lists documents taxpayers must submit to the OVDP unit in Austin.

Extensions

  1. 2014 OVDP FAQ 25.1 allows taxpayers unable to submit the documents required by 2014 OVDP FAQ 25 within the timeframe specified to request a 90-day extension. The request for a 90-day extension must include a statement of those items that are missing, the reasons why they are not included, and the steps taken to secure them.

Digital Submissions

  1. 2014 OVDP FAQ 25.2 provides a unique procedure for practitioners to submit required documents on electronic media. Practitioners are encouraged to use these procedures in order to save their clients and the IRS the costs of shipping voluminous documents. This procedure also speeds up the IRS’ handling of OVDP submissions.

Calculating the Offshore Penalty

  1. The miscellaneous offshore penalty (MOP) is a central provision of the 2014 OVDP. See 2014 OVDP FAQs 31 through 41 for specific guidance, especially 2014 OVDP FAQ 35 which defines what assets are subject to the MOP; this FAQ defines the term "OVDP assets" .

FBAR Questions

  1. Taxpayers must file delinquent or amended FBARs for the disclosure period according to current FinCEN procedures. See 2014 OVDP FAQs 44 through 46.

Taxpayer Representatives

  1. Taxpayer representatives must complete Form 2848 with specific information for OVDP. The OVDP website on IRS.gov has a pro forma Form 2848 with necessary language for income tax, civil penalties, and FBAR issues.

Case Resolution

  1. Taxpayers must accept the terms of the 2014 OVDP to resolve their cases through this program, 2014 OVDP FAQs 49 and 50. FAQ 51 provides specific procedures for taxpayers that wish to opt out of OVDP or that the IRS may remove from OVDP.

The OVDP Hotline

  1. The OVDP Hotline phone number is (267) 466-0020. The hotline phone number is included in the 2014 OVDP FAQs on www.irs.gov.

  2. Taxpayers or representatives may call the OVDP Hotline for information on case status and to answer procedural questions. The OVDP Hotline does not provide legal advice or case-specific guidance.

  3. The OVDP Hotline is not manned by live operators. Rather, it is a voice mailbox on which messages may be left. OVDP personnel in Austin have the responsibility of returning messages received on the OVDP Hotline.

  4. Each Hotline call is logged in the OVDP Hotline Call Log. The log includes the time and date of the call, the caller’s name, the caller’s phone number, the subject of the call, the OVDP employee returning the call, the date that the call was returned and the answer given to the caller by the OVDP employee returning the call.

  5. The OVDP Hotline also handles calls related to the Streamlined Filing Compliance Procedures.

Overview of the OVDP Case File Development Process

  1. OVDP case file development consists of four stages. We address these stages from the IRS’ perspective as relating to case files.

    1. Taxpayers submit documents and information to IRS’ Criminal Investigation Global Financial Crimes Unit in Philadelphia. See 2014 OVDP FAQ 24.

    2. Once preliminarily accepted by CI to OVDP, CI forwards the taxpayer’s voluntary disclosure to the OVDP Unit in Austin for case establishment.

    3. Once the case file has been established, case building begins which consists of associating required documents with the case file. See OVDP FAQ 25.

    4. Once the case file is built or substantially built, the case is sent to a field exam group for certification. See IRM 4.63.3.19.8.1, Domestic Cases.

Making an Offshore Voluntary Disclosure

  1. The process for making an offshore voluntary disclosure is provided in 2014 OVDP FAQ 24. Some taxpayers may wish to verify that they are eligible to make a voluntary disclosure; 2014 OVDP FAQ 23 provides the procedures for preclearance.

Establishing the OVDP Case File

  1. The establishment of the OVDP case takes place in three distinct steps:

    1. Indexing: the process of building the taxpayer’s OVDP submission in the e-Trak database. Indexing requires that the steps in Exhibit 4.63.3-1 be completed.

    2. File Completion: the process of creating the physical case folders that will contain the OVDP submission documents and burning a CD with all the documents that CI sent to OVDP after preliminarily accepting the taxpayer into OVDP. See Exhibit 4.63.3-2.

    3. AIMS Establishment: the process of establishing AIMS controls on the taxpayer’s OVDP case. See Exhibit 4.63.3-3.

OVDP Case Building

  1. The case building process for taxpayers participating in OVDP continues after the initial set-up by the OVDP team. Once the physical folder is created and initial controls for these cases are finalized through AIMS, these cases are transferred to the case building group. The case building process begins with receipt of documents from the taxpayer as required for participation in the program as discussed in the 2014 OVDP FAQs 7 and 25. The process is divided into the following categories:

    1. Mail processing and DHL procedures

    2. Identification and IDRS update of statute extensions

    3. Identification of domestic vs international cases

    4. Controlling multiple years for international cases

    5. ASED determination

    6. YY memos

    7. Statute sweeps/continuous monitoring for quick assessments

    8. Case building and correspondence for missing documents

    9. Case shipments to the field

Mail Processing

  1. OVDP mailing procedures are divided into incoming and outgoing procedures.

    1. Incoming mail primarily consists of the submission documents, either as a result of initial requirements per FAQ 25 or as a result of OVDP team outreach in the form of correspondence when documentation remains outstanding. Refer to Exhibit 4.63.3-4, Incoming Mail Procedures, for specific procedures regarding the processing of incoming mail.

    2. Outgoing mail consists of internal and external correspondence as well as large shipments containing case orders for the field. OVDP services two internal customer groups: LB&I IIC RA groups and SB/SE RA exam groups. Refer to Exhibit 4.63.3-5, Outgoing Mail Procedures, for specific procedures regarding the processing of outgoing mail.

    3. All outgoing correspondence to an international business address is to be sent via DHL. Shipping letters using DHL to international addresses requires access to the DHL website and specific login information. See OVDP Team 1 manager for access to the website, password and specific instructions.

      Note:

      DHL can only be used when sent to a physical business address because a signature upon receipt is required.

Identification and IDRS Update of Statute Extensions

  1. Upon receipt of mail, all documents must be date stamped. The following documents, requiring signature and managerial review, must be identified:

    1. Form 872, Consent to Extend the Time to Assess Tax

    2. Consent to Extend the Time to Assess Civil Penalties Provided by 31 U.S.C. § 5321 for FBAR Violations (aka "FBAR consent" )

    Forms 872 are extremely time sensitive as they are not legally effective until signed by an IRS official. Taxpayers or representatives prepare Forms 872 for OVDP; this process differs from standard IRS procedures which require the IRS to prepare and solicit Forms 872. See IRM 25.6.22 for general procedures. Any Forms 872 with typographical errors must be elevated to a team manager who may seek SB/SE counsel advice, as needed.

    Note:

    Refer to https://www.irs.gov/newsroom/2012-offshore-voluntary-disclosure-program for a template of this form with OVDP-specific language.

Identification of Domestic vs. International Cases

  1. Personnel in the OVDP Unit determine whether an OVDP participant is characterized as domestic or international. This designation is important because it determines which group will be responsible for certifying the case in the field and the manner in which the case is prepared for the field.

  2. For OVDP a "domestic case" is defined as any taxpayer currently living in any of the 50 states of the U.S. These cases are worked in the field by SB/SE revenue agents.

  3. For OVDP an "international case" is defined as any taxpayer currently not living in the U.S. This also includes U.S. Protectorates such as Guam and the U.S. Virgin Islands, or the Commonwealth of Puerto Rico. These cases are worked in the field by LB&I IIC revenue agents.

Controlling Multiple Years for International Cases

  1. All cases received for case building are controlled on a singular year through AIMS. Domestic cases do not require any additional years controlled. International cases, on the other hand, require controls on all participating tax years as well as the MFT 55 Civil Penalty module. Opening of these additional years is a part of the case building procedures.

  2. Case controls are opened using Form 5345-D, Examination Request – ERCS Users. Follow the procedures in Exhibit 4.63.3-6, Controlling Multiple Years for International Cases.

ASED Determination

  1. Determining the end of the period of limitations on assessment, referred to internally as the Assessment Statute Expiration Date (ASED), for tax returns received and processed through the OVDP is of utmost importance. A correct ASED is necessary to properly maintain electronic controls — controlled case years should never have an expired period of limitations on assessment, and a case control should never be established if the ASED has passed. Many factors play into determining the correct ASED.

  2. Taxpayers accepted into the OVDP are required to submit:

    1. Copies of their previously filed Forms 1040 for all years in the disclosure period

    2. Original Forms 1040 for any non-filed years

    3. Amended return Forms 1040X for tax years in the disclosure period requiring correction

  3. When making an ASED determination for a previously filed return the following steps are taken:

    1. Determine the received date of the original tax return by reviewing the IDRS IMFOLT module. It will contain the received date of the return and also indicate the original ASED for that tax year.

    2. Determine if a Form 872 extension is in the case file and if the controlled year can be extended. Make sure the Form 872 was received and counter-signed by a manager before the ASED barred on the tax year. For example, a timely filed tax return for 2012 will have a standard three-year ASED of 4/15/2016; if the valid Form 872 was fully executed on or before 4/15/2016 it will be eligible to extend to the established date on the form. This example does not consider other possible ASED extenders.

    3. Complete the ASED Determination worksheet. Once completed, this form will be reviewed by a revenue agent or manager for accuracy.

  4. For Forms 1040X, Amended Returns:

    1. Taxpayers are instructed to submit amended returns for all years in the disclosure period. Since the OVDP disclosure period is eight years, some of the amended returns may have statutes that would be barred if the ordinary three-year period of limitations under IRC 6501(a) applied.

    2. In general, the ASED is determined by the originally filed tax return. An amended return will typically not affect the ASED. However, information shown on an amended return, such as previously undisclosed income, might indicate that an ASED extender applies. Review the tax module’s ASED and the existence of a valid Form 872 in order to determine whether the statute is barred. This is an important step especially if the amended return indicates an additional assessment.

    3. IRS cannot assess on tax years with barred statutes. Determine if an open statute is available to apply Quick Assessment procedures.

    4. Very often in OVDP cases, extended assessment statutes of limitations are present. The two most common are IRC 6501(c)(8) and IRC 6501(e)(1)(A)(ii). Be aware of these exceptions to the general three-year ASED. See IRM 4.63.3.19.7.1, Statutes and Extensions.

YY Memos

  1. The 2014 OVDP requires an eight-year disclosure period, and generally participants must submit eight years of amended or delinquent income tax returns. Some amended returns will arrive in the OVDP Unit with previously expired statutes and others will have imminent statutes that will need to be addressed. IRM Exhibit 25.6.23-3 discusses the use of alpha codes for statute controls under special circumstances. The YY alpha code designates Participation in Abusive Offshore Arrangements. The YY code is also used in OVDP cases so that open cases do not appear to have expired statutes. OVDP procedures require that all tax years in the disclosure period must be under AIMS/ERCS controls. For international cases, all years are opened prior to shipment to the field; tax years for domestic cases are opened once the certification process begins

  2. Before using a YY statute, a YY memo must be completed. The YY memo is used when:

    1. Tax years being addressed were already barred when received by OVDP. This is an automatic process and does not require correspondence to the taxpayer.

    2. Tax years have imminent statutes of limitation when they are within 90 days of expiration. Form 872, Consent to Extend the Time to Assess Tax, and Letter 907, Request to Extend Assessment Statute, are required to be sent to the taxpayer prior to submitting this form for approval.

    The statute appears in the form 04/YY/2014, where the month and year are representative of the original or latest statute. An example: A taxpayer’s original statute expired 04/15/2014. The YY statute would appear as 04/YY/2014. If the statute had already been extended to 12/31/2014, the YY statute would be 12/YY/2014.

  3. The YY Memo is completed by the tax examiner, signed by an OVDP manager (first level), and finally signed by the program manager (second level). Once the completed and signed YY Memo is electronically returned to the originating TE, Form 5348 is used to update AIMS/ERCS to reflect this new statute.

OVDP Statute Protection

  1. The OVDP Unit monitors the ASED. The 2014 OVDP includes a disclosure period of eight years. Therefore, determining the ASED is essential in order to protect the government’s interest.

Statutes and Extensions
  1. IRC 6501 provides the assessment statute of limitations rules for taxes, but not for FBAR penalties. IRC 6501(a) provides that the ASED is three years from the later of the due date of the return or the date the return was filed as the general rule for filed returns.

    Note:

    The ASED extension does not concurrently extend the RSED.

  2. IRC 6501 provides for various extended limitations periods beyond the general rule of three years. In nearly every OVDP case, one or more extended limitations periods will apply. Statute analysis requires attention to detail. The most common assessment statute of limitation provisions used in OVDP are:

    1. IRC 6501(c)(4) – extended by agreement using Form 872. All OVDP participants are required to submit completed Forms 872 for the entire eight-year disclosure period, so this provision must be analyzed in all cases.

    2. IRC 6501(c)(8) – failure to notify the IRS of certain foreign transfers

    3. IRC 6501 (e)(1)(A)(i) – 25% omission of gross income

    4. IRC 6501 (e)(1)(A)(ii) – omission of $5,000 or more of income from an unreported foreign financial asset

    Refer to the ASED Determination Worksheet. All ASED determinations made by tax examiners must be reviewed and approved by a tax compliance officer, revenue agent, or manager.

Statute Sweep Procedures
  1. Monitoring for imminent statutes is an ongoing process in the OVDP Unit. Statute monitoring processes have been incorporated into the case building procedures, and most statute issues will be addressed early in the process. To assure that all statutes have been addressed, and at least once per year, before April 15, personnel complete a review of all documents and case files in the OVDP Unit. Since the clear majority of taxpayers participating in OVDP are individuals, nearly all tax returns in OVDP are calendar year returns. Hence, ASEDs typically fall between April 15 and October 15.

Quick Assessment Procedures
  1. OVDP processing requires that all original tax returns or amended tax returns received from the taxpayer are maintained in the case file until the case is certified. Given these special processing requirements for OVDP cases, the OVDP Unit relies on quick assessment procedures found in IRM 3.17.244, Manual Assessments. W&I will accept quick assessments from the OVDP Unit with more than 60 days left on their ASED. When an amended return is received by the OVDP Unit, a quick assessment should be considered if:

    1. The amended return has an imminent statute (e.g., within 12 months), AND

    2. The amended return shows additional tax to be assessed.

  2. All ASED extensions should be taken into consideration when determining whether a quick assessment is necessary to protect the government’s interest. Amended returns which are covered by a consent on Form 872 or on tax years determined to have an extended ASED do not require quick assessments. Quick assessments are prepared on Form 2859, Request for Quick or Prompt Assessment. Complete instructions for completing this form for OVDP purposes can be found in Exhibit 4.63.3-7, Instructions for Completing Form 2859.

Unprocessed Forms 1040
  1. Many OVDP participants, in particular non-residents, submit delinquent original returns. General delinquent and SFR processing instructions can be found in IRM 4.4.9, Delinquent and Substitute for Return Processing. When participating in OVDP, however, these delinquent returns are not sent through regular processing. These returns are held in the case file and an SFR module is opened on IDRS for case control purposes and certification.

    1. Review the tax return for the earliest stamped received date. This will typically not be the OVDP date received.

    2. These returns are also typically late filed returns. The ASED will be determined based on three years from the received date. For example, previously non-filed return for 201012 is received on 5/12/2013, the ASED will be 5/12/2016.

    3. Typically, Form 872 extends the ASED to December 31 of the year two years after the Form 872 is submitted. Thus, it typically will not extend the ASED of a recently-filed original delinquent return, because the ASED of that return under section 6501(a) would be later than the ASED on the Form 872. The receipt of Form 872 does not always supersede the existing ASED.

      Example:

      A Form 1040 for 201012 is filed on 5/12/2013; the correct ASED based on IRC 6501(a) is therefore 5/12/2016. A Form 872 received on 5/12/13 would typically extend to 12/31/2015. The ASED of 5/12/2016 of the late filed return is beyond the extended ASED on the Form 872 of 12/31/2015. Using the date of extension from the Form 872 would shorten the ASED in this case..

    4. Once a correct ASED is determined, it can be updated on the tax module using Form 5348, AIMS/ERCS Update.

Correspondence for Missing Documents

  1. Once documents have been received for a particular taxpayer, the case will be built using a check-off worksheet. Documents submitted will be identified and placed in the order as listed in FAQ 25.2 in the file.

  2. Forms 2848 will be processed in accordance with IRM 4.11.55, Power of Attorney Rights and Responsibilities.

  3. We no longer correspond for missing documents in OVDP.

Domestic Cases
  1. After the allowed timeframe for receiving documents has elapsed, the OVDP Unit will proceed with preparing cases for shipment.

    1. If the case is complete, it will be considered "Ready to Ship - Complete" and scheduled for shipment to the field.

    2. If after the timeframe has elapsed (including the optional extension, if received in writing), and the case is still missing documents, the case is deemed "Ready to Ship – Incomplete" and scheduled for shipment to the field.

    Note:

    The taxpayer is given 90 days from the date of the CI acceptance letter to submit documents. A one-time extension of an additional 90 days may be requested in writing by the taxpayer.

Case Shipments to the Field

  1. Orders for cases are received from either SB/SE division or LB&I IIC division. Cases are selected and prepared for shipment per Document 13056, Shipping Procedures for Personally Identifiable Information (PII). See instructions for outgoing shipments of cases in Exhibit 4.63.3-5, Outgoing Mail Procedures.

Quiet Disclosures

  1. A quiet disclosure is made when a taxpayer files a series of amended tax returns to report previously unreported income from previously undisclosed foreign financial assets outside of the formal voluntary disclosure process with the IRS provided for by IRM 9.5.11.9.6. In most quiet disclosure cases, taxpayers also file delinquent FBARs to report previously undisclosed foreign accounts.

  2. IRM 3.11.6.4.5.3, Offshore Voluntary Disclosure Program - Quiet Disclosure Cases, requires the campuses that receive amended tax returns reporting foreign attributes to forward them to the Quiet Disclosure Coordinator in OVDP for review.

  3. See Exhibit 4.63.3-8, Quiet Disclosure Review Process.

Opt-Out and Removal

  1. 2014 OVDP FAQ 51 provides a procedure for a taxpayer participating in OVDP to opt-out of the program and procedures for the Service to remove a taxpayer from OVDP. Once a taxpayer opts out of OVDP or the Service removes a taxpayer from OVDP, full scope income tax, penalty, and FBAR examinations will commence. See 2014 OVDP FAQ 51 for opt-out and removal criteria.

FinCEN Requests from the Field Exam Groups

  1. When an IIC revenue agent needs access to the BSA FinCEN database, the agent makes a request, approved by the agent’s manager, to the FinCEN Coordinator in Philadelphia. The FinCEN Coordinator forwards the request to the FinCEN gatekeeper in OVDP. This procedure was established to limit the number of people in IIC who have access to the FinCEN database because of the sensitive data contained in this database.

  2. The FinCEN research process consists of the following steps:

    1. Agents requesting FinCEN data send a Form 10509 or 10509-A (FinCEN Query (FCQ) Request or FinCEN Query SAR Request) to the FinCEN coordinator in Philadelphia. The FinCEN coordinator forwards the Form 10509 or 10509-A request to the FinCEN gatekeeper in OVDP in an encrypted e-mail to the OVDP Team Mailbox in Outlook.

    2. When the OVDP gatekeeper receives the Form 10509 or Form 10509-A FinCEN request from the FinCEN coordinator in Philadelphia, certain information from the request is entered into a control log.

    3. The gatekeeper researches the FinCEN database and downloads the results of the search. The agent may request FBARs and other information reports on Form 10509 or Form 10509-A, as appropriate. When an agent makes a request using a Form 10509 and the search identifies SARs for the taxpayer, the gatekeeper notes on the copy of the Form 10509 that is returned to the agent that "additional information for the taxpayer is available in FinCEN but a Form 10509-A is required to request the information."

    4. If the agent is requesting SAR reports, the request is made on a Form 10905-A and must be approved by the FinCEN coordinator in Philadelphia. In order to receive SARs, the agent and the agent’s manager must have completed the FinCEN SAR training.

    5. Once the results of the FinCEN research are obtained, they are sent back to the requesting agent by means of an encrypted e-mail from the OVDP Team Mailbox.

Commonly Used OVDP Forms and Letters

  1. The following table summarizes letters and forms specific to the Offshore Voluntary Disclosure Program and the Streamlined Filing Compliance Procedures.

    Form/Letter Title Description
    Letter 5089 Offshore Voluntary Disclosure Initial Letter Letter is sent to taxpayers and/or Power of Attorney to request additional documentation related to acceptance into the Voluntary Disclosure Program.
    Letter 5178 Potential Offshore Voluntary Disclosure Initiative (OVDI) Letter is sent when submission documents are received but it does not appear that the taxpayer has formally made a voluntary disclosure.
    Letter 5371 Insufficient Statement of Facts on Streamlined Submission Letter is sent to taxpayers who fail to provide a sufficient statement of facts pursuant to the Streamlined Filing Compliance Procedures.
    Letter 5498 Potential Streamlined Filing Compliance Letter sent to taxpayers who sent information to the IRS Austin Campus. It is believed that they want to participate in the Streamlined Filing Compliance Procedures but have not submitted the required documentation.
    Letter 5555 Incomplete / Non-Processible Streamlined Certification Letter is sent to taxpayers who fail to provide a completed signed certification pursuant to the Streamlined Filing Compliance Procedures.
    Letter 5595 Streamlined Certification with Potential Canadian Retirement Plan Letter is sent to taxpayers who appear to have included their Canadian Retirement Plan as part of their Miscellaneous Offshore Penalty calculation under the Streamlined Filing Compliance Procedures. This letter provides instructions on how to request reconsideration of the previously assessed penalty for such taxpayers.
    Form 14452 OVDP Foreign Account or Asset Statement A required submission document. Taxpayers must prepare a separate form for each foreign account or asset they are reporting.
    Form 14453 OVDP Penalty Computation Worksheet A required submission document. Taxpayers must use this form to annotate all foreign account balances for their disclosure period and calculate correct miscellaneous offshore penalty.
    Form 14454 Attachment to Offshore Voluntary Disclosure Letter To be submitted along with the Form 14457 (see below). An attachment should be completed for each undeclared foreign bank account.
    Form 14457 Offshore Voluntary Disclosure Letter This letter is available to be used by the taxpayer when preparing to request participation in the OVDP through CI.
    Form 14653 Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures The certification to be used for participation into the Streamlined Foreign Offshore Procedures.
    Form 14654 Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures The certification to be used for participation into the Streamlined Domestic Offshore Procedures.
    Form 14708 Streamlined Domestic Penalty Reconsideration Request Related to Canadian Retirement Plans This form is to be used by taxpayers requesting a reconsideration of their previous Streamlined Filing Compliance Submission due to the inclusion of Canadian retirement plan in the Streamlined Domestic Offshore penalty base.

Streamlined Filing Compliance Procedures

  1. An earlier version of the Streamlined Filing Compliance Procedures was made available beginning September 2012. However, the IRS significantly expanded the procedures effective July 1, 2014 to accommodate taxpayers that did not need the protection from criminal prosecution offered by the Offshore Voluntary Disclosure Program and that acted non-willfully. The governing documents for the Streamlined Filing Compliance Procedures consist of the websites on IRS.gov outlining the Streamlined Filing Compliance Procedures and interpretative FAQs. The discussion in this IRM section (4.63.3.24 et seq) in no way supersedes, changes, or alters the Streamlined Filing Compliance Procedures published on IRS.gov and related FAQs. Any inconsistency between the IRM and the Streamlined Filing Compliance Procedures published on IRS.gov and related FAQs must be resolved in favor of the Streamlined Filing Compliance Procedures published on IRS.gov and related FAQs.

  2. The Streamlined Filing Compliance Procedures consists of two procedures: Streamlined Foreign Offshore Procedures (SFO) and Streamlined Domestic Offshore Procedures (SDO). See IRS.gov for complete information on SFO and SDO. See IRM 21.8.2.17.1 for basic information summarizing SFO and IRM 21.8.2.17.2 for basic information summarizing SDO.

Streamlined Filing Compliance Procedures – W&I Processing

  1. Taxpayers are instructed to mail their completed Streamlined Filing Compliance Procedures submission to Mail Stop 6063 AUSC. The following table provides links to the W&I IRM procedures that can be used to assist in determining if correct actions have been taken on accounts submitted under Streamlined Filing Compliance Procedures.

    IRM Reference Title
    IRM 3.8.45.31 Campus Deposit Function – Expanded Streamlined Filing Compliance Procedures
    IRM 3.10.72.16.9 Receipt & Control – "Streamline" Return Procedures (AUSPC Only)
    IRM Exhibit 3.10.72-2 Receipt & Control – Correspondex "C" Letters - Routing Guide
    IRM Exhibit 3.10.72-4 Receipt & Control – Miscellaneous Documents/Forms/Correspondence - Routing Guide
    IRM 3.21.3.9.1 International Code and Edit – Streamlined Filing Compliance Procedures
    IRM 3.22.3.6 International Error Resolution – Streamlined Filing Compliance Procedures
    IRM 21.8.1.27 IMF International Adjustments – Streamlined Filing Compliance
    IRM 21.8.2.17 BMF International Adjustments – Streamlined Filing Compliance Procedures

Large Business and International Processing (OVDP Unit)

  1. Members of the LB&I OVDP Unit handle processing of documents and correspondence relating to the Streamlined Filing Compliance Procedures.

Determining ASED for Streamlined Cases
  1. Personnel in the OVDP Unit correct ASEDs for tax returns submitted through the Streamlined Filing Compliance Procedures. Submissions must be screened to determine the appropriate ASED.

  2. The OVDP Unit has observed five recurring scenarios involving submissions to the Streamlined Filing Compliance Procedures:

    1. Only delinquent Forms 1040

    2. Only amended Forms 1040-X

    3. A mix of forms including Forms 1040 and 1040X

    4. Forms 1041

    5. A mix of returns including Forms 1040-PR, 1040-NR, 1040-SS, 1065, 1120, 720, 709 and 706

    Note:

    Some of the tax returns listed above are not accepted by the Streamlined Filing Compliance Procedures. Such tax returns will not receive the beneficial terms of the Streamlined Filing Compliance Procedures and will be sent for normal processing. Additionally, sometimes taxpayers who do not qualify to use the Streamlined Filing Compliance Procedures (because, for example, they have submitted a voluntary disclosure letter under the OVDP) will attempt to use the Streamlined Filing Compliance Procedures. Their returns should also be sent for normal processing.

  3. Check e-trak VDP to determine if the TP is in OVDP. If the TP is in OVDP, then it may be a Transition Streamlined request. If the TP is NOT in OVDP, (No e-trak #) then continue ASED clearance.

ASED for Form 1040 Submission Packages
  1. For packages containing ALL Forms 1040, U.S. Individual Income Tax Returns, and any Forms 1040 in a mixed package including any Form 1040-X that is to be processed as a Form 1040, determine if the 1040 is an original filed tax return by checking each Tax Module using CFOL Command Code (CC) IMFOL with definer T. Look for the Transaction Code (TC) 150 and verify the received date. (Substitute for Returns listing TC 150 are not original returns)

  2. Each Form 1040 submitted in Streamlined must have in red ink along the top center of the 1st page either of the following:

    • Streamlined Domestic Offshore (SDO)

    • Streamlined Foreign Offshore (SFO)

    Determine if the package is a Streamlined Submission; then proceed to write the applicable phrase in red ink on the top center of the 1st page of each Form 1040.

  3. Determine if there is a valid non-willful certification included in the TP’s Streamlined Submission Package:

    • Make 3 photocopies

    • Attach a copy of each valid non-willful certification to the back of each 1040 and/or 1040-X

    • Log the information regarding the certification into the assigned Excel spreadsheet located on OVDP SharePoint.

    • Give the original non-willful certification to Certification Librarian, or place in the designated basket.

    • If there is not a valid non-willful certification included in the TP’s submission package, do not take any action with respect to the non-willful certification.

ASED for Form 1040X Submission Packages
  1. For packages containing ALL Forms 1040-X, Amended U.S. Individual Tax Returns, and any Forms 1040-X in a mixed package including any Forms 1040 that is required to be processed as a Form 1040-X, determine if the 1040-X is request to amend the originally filed Form 1040, U.S. Individual Income Tax Return, for each respective tax module by researching CFOL CC IMFOL with definer T for TC 150.

  2. Each Form 1040-X submitted in Streamlined must have in red ink along the top center of the 1st page with either of the following:

    • Streamlined Domestic Offshore (SDO)

    • Streamlined Foreign Offshore (SFO)

    Determine if the package is a Streamlined Submission; then proceed to write the applicable phrase in red ink on the top center of the 1st page of each Form 1040.

  3. Determine if there is a valid non-willful certification included in the TP’s Streamlined Submission Package:

    • Make 3 photocopies

    • Attach a copy of each valid non-willful certification to the back of each 1040 and/or 1040-X.

    • Log the information regarding the certification into the assigned Excel spreadsheet located on OVDP SharePoint.

    • Give the original non-willful certification to Certification Librarian, or place in the designated basket.

    • If there is not a valid non-willful certification included in the TP’s submission package do not take any action with respect to the non-willful certification.

  4. Ascertain if the ASED has expired and make a determination to extend the date legally.

  5. If the ASED has not expired and there is more than 15 days left but less than 90 days, in addition to writing "ASED has Not Expired" , check the Short Statute box on the AM Coversheet to expedite processing.

  6. If the ASED has not expired and there is less than 15 days left, the applicable year will be forwarded for Quick Assessment.

  7. If the ASED has expired then you will have to make a determination if it can be extended based on the provisions of IRC 6501. There are three primary Internal Revenue Code Sections we will use to extend the ASED for expired years for Streamlined Submission Packages.

    • If there is an original Form 5471, 5472, 3520, 3520-A, 8865 or 926 included with the streamlined submission package, the ASED can be extended under IRC 6501(c)(8).

    • If there is more than $5,000.00 in unreported interest income from a foreign financial institution (FFI), the ASED can be extended under IRC 6501(e)(1)(A)(ii).

    • If there is more than 25% omission in income the ASED can be extended under IRC 6501(e)(1)(A)(i).

  8. There are numerous IRC sections that allow for extending the ASED. We will work the three previously discussed. If you determine that another code section applies to extend the ASED; submit the code section and criteria met to the RA for review after first completing all of the processing procedures for ASED clearance for each Form 1040, 1040-X, and 1041.

ASED for Form 1041 Submission Packages
  1. For packages containing any Form 1041, determine if the Form 1041 is an original return or an amended return. The procedures for Form 1041 are the same as the procedures for Form 1040. Original Forms 1041 included in streamlined submission packages need to be routed to Ogden.

  2. Form 1041 can be amended. You can identify an amended Form 1041 by the "F" section on page 1. There is a box for "Amended return" that will be checked if it is amended. There is no Form 1041-X. The ASED determination procedures for amended Forms 1041 are the same for Forms 1040-X.

  3. All of the same applicable legal extensions in IRC 6501 that are applicable to Form 1040-X are applicable to Form 1041 amended returns.

    Exception:

    Form 1041 is considered a BMF return and to access the ASED information you will need to use CFOL Command Code BMFOL with definer T and MFT 05. There is also a separate Accounts Management Coversheet for Forms 1041.

  4. Complete the AM Streamlined Cover Sheet for each Form 1041 that is amended.

  5. Complete Form 3210, Document Transmittal. Route to ICT if package contains all Forms 1040X and No Forms 1040. Route to Batching if package contains any Forms 1040.

  6. If amended Form 1041 returns are included, route amended Form 1041 returns to ICT (with the Form 1041 AM Coversheet attached). Route all original Forms 1041 included in a Streamlined submission package to:

    Batching M/S 6054
    1973 North Rulon White Blvd.
    Ogden, UT 84404-7843

  7. If the ASED was extended, place in the designated basket for RA review. All extensions require revenue agent concurrence.

  8. If Form(s) 2848 are included with a streamlined submission package, the Form(s) 2848 must be "detached" and routed to the CAF Unit for processing. An action trail should be included which indicates the Form(s) 2848 were detached.

  9. If it is determined a return should be processed as normal, without streamlined treatment, an action trail should be placed on the lower left hand corner of the return(s) and return(s) routed for normal processing.

Correspondence for Streamlined Filing Compliance Procedures
  1. OVDP Unit personnel working on Streamlined Filing Compliance Procedure cases have three bins for daily mail receipt: two for Statute Control (tax returns) and one for Streamlined Filing Compliance Procedures correspondence. The bins are located in Room 545.

  2. Mail is received with a Form 3210 indicating the number of return packets for Statute Control and/or number of Streamlined Correspondence. The mail is usually delivered in the afternoon.

  3. The Tax Examiners (TEs) will verify that the Form 3210 is correct, sign it, give Part 1 – Recipient’s Copy to the group secretary and mail Part 3 – Acknowledgement Copy to the originator.

  4. Because correspondence generally is not statute sensitive, TEs will monitor the basket and work correspondence as other priority work allows.

  5. Each TE will record their work and the status of the case on their Correspondence Log according to Exhibit 4.63.3-10, How to Log Correspondence. If possible, the TE will close the case using the steps outlined below.

  6. If the TE is unable to resolve the case immediately, the TE will submit the case to the Correspondence Coordinator (CC) to place into suspense.

  7. The CC will put the suspended case in a folder labeled with the taxpayer’s TIN; the folders will be organized by TIN order on the correspondence suspense shelves.

  8. If additional information pertaining to a suspended case is received by Streamlined, either via mail or the telephone hotline, the CC will retrieve the case file from suspense and work the case.

  9. Any correspondence that cannot be resolved by the CC will be referred to a revenue agent (RA) to work.

  10. The CC will monitor the follow-up dates of cases in suspense. If the case is not resolved prior to the follow-up date the CC will retrieve the case from suspense and follow up on it.

  11. Each TE’s individual Correspondence Log should be uploaded to the SharePoint site at the end of their TOD so the most current copy is available to the CC.

  12. The CC will merge the TE’s individual Correspondence Log into the Master Correspondence Log on a regular basis based on the amount of correspondence received.

  13. See Exhibit 4.63.3-9, Streamlined Filing Compliance Procedures - Steps for Tax Examiners, for tax examiner procedures for handling streamlined correspondence.

Correspondence for Streamlined Filing Compliance Procedures – Steps for Tax Examiners
  1. All tax examiners (TEs) will maintain their individual Correspondence Log. When applicable, each step should be input as the TE performs the task using the procedures described in Exhibit 4.63.3-9, Streamlined Filing Compliance Procedures - Steps for Tax Examiners.

  2. All TEs will upload their individual Correspondence Log to the OVDP SharePoint daily before the end of their tour of duty.

Correspondence for Streamlined Filing Compliance Procedures - Steps for Correspondence Coordinator
  1. The Correspondence Coordinator (CC) has two main responsibilities, which encompass several different tasks. The CC is responsible for:

    • Compiling all the individual logs into one master log

      Note:

      The Streamlined correspondence master log is an Excel spreadsheet utilized to track all outgoing Streamlined correspondence sent from the Austin OVDP/Streamlined Unit

    • Managing the correspondence held in suspense

Compiling Logs
  1. Each tax examiner has a file with their name on the SharePoint site (Streamlined Correspondence – TE Name.xlsx). On a bi-weekly basis the CC is responsible for transferring the information from the individual logs to the master log. Within the master log there are tabs with each TE’s name.

    • Copy the information from each individual log and paste it into the corresponding TE’s tab in the master log.

    • Mark the last row copied on the individual’s log with a heavy black line to mark it as the last row copied.

    • Continue copying, pasting and marking from individual logs into related tabs in the master log until all new information has been transferred.

    • The individual tabs will be compiled in the “SDO-SFO contact log” tab within the master log file.

    • Review the individual tab information as it is transferred to ensure that all applicable fields have been addressed.

    • Ensure the columns on the SDO-SFO tab are marked accordingly (Follow-Up, OVDP, MFT 55, RESOLVED, etc.).

    • Highlight each row according to legend

      Color Meaning
      Yellow Intent to submit Streamlined submission
      Blue Follow-up
      White No response
      Purple Left message
      Orange OVDP
      Mauve MFT 55
      Melon Follow up with RA
      Green Resolved
    • Save the document bi-weekly, changing the date to the current Friday’s date.

      Example:

      2014 Streamlined Correspondence - Master 10-24-14.xlsx updated to 2014 Streamlined Correspondence - Master 11-7-14.xlsx.

Manage Correspondence in Suspense
  1. After the correspondence has been addressed by the TEs, additional time may be needed for taxpayer action; hence correspondence may need to be suspended for further action. Some reasons include:

    • Unassociated forms that may belong to a previous submission

      Example:

      Information returns, FinCEN reports, a letter indicating they’ve filed Form 1040 or 1040X.

    • Sent in old Streamlined questionnaire

    • Correspondence that is not easily identifiable

    • Waiting for response to Letter 5498

    For each correspondence, a manila folder will be labeled with the taxpayer’s SSN and placed in order on the Suspense Wall. For correspondence received without an SSN, the file will be organized by last name.

Miscellaneous Correspondence
  1. If a taxpayer or representative sends a letter indicating that they will be submitting a submission in the future, such correspondence has no legal or procedural impact. Input the letter in the log, treat the letter as classified trash and monitor as follows:

    • After 90 days from the TE review date, check to see if any returns have been posted or a Certification received.

    • If a packet has been submitted the case can be marked as "Resolved" and highlighted in green.

    • If nothing has been received notate "no additional follow-up" in the resolution column and fill row with grey lines.

Separated Submission
  1. Forms that are received in correspondence that appear to be part of a submission may be suspended until the packet posts on IDRS.

    • Research the years associated with the correspondence using IMFOLT.

    • If a packet has posted then the correspondence can be associated with the most recent return by using Form 9856, Attachment Alert.

      Note:

      If an original 1040 was submitted, the DLN will correspond with a TC 150.

      Note:

      If an amended 1040X was submitted, the DLN will correspond with a TC 977.

    • If after review, the forms are misrouted or incomplete submissions then send Letter 5498. Notate date of letter on the spreadsheet and change category to Follow-Up.

      Note:

      Mark Follow-Up date as 60 days for domestic and 90 days for international.

2012 Streamlined Filing Compliance Procedures Questionnaire
  1. The 2012 Streamlined Filing Compliance Procedures Questionnaire is obsolete. When a taxpayer submits a 2012 Streamlined Filing Compliance Questionnaire, contact the taxpayer to determine their intent. First try to make contact by phone. Research CFINK if a name of a representative is given. Otherwise, send Letter 5498 and note date of letter on the spreadsheet and change category to Follow-Up. Allow 60 days for domestic and 90 days for international.

Follow-Up
  1. After response periods lapse or actions are taken, update the master log. Update for items including:

    • Follow-Up - highlighted in blue

    • Referred to RA - highlighted in melon

    • Left message - highlighted in purple

    • No response - highlighted in white

    • Intent to submit - highlighted in yellow

  2. Each week the master log should be reviewed for upcoming "Follow-up" dates and any other actions.

Streamlined Certifications Excel Spreadsheet
  1. Taxpayers submitting returns through the Streamlined Filing Compliance Procedures are required to include, among other things, a signed certification form that represents:

    1. The taxpayer is eligible for the Streamlined procedure.

    2. All required FBARs have been filed.

    3. Any tax and FBAR compliance failures resulted from non-willful conduct.

    Note:

    Forms 14653 and 14654 recite various statements adopted by the taxpayers.

  2. Personnel in the OVDP Unit log and file original certifications received from taxpayers as part of the Streamlined filing procedure. Original certifications are received in several ways.

    • Internal – Original certifications are detached by another function and sent to AUSC 4305 in a sealed envelope or with an internal routing coversheet. The Certifications Librarian has primary responsibility for logging internally received certifications. As work priorities allow, TEs and Examination Technicians (ETs) may assist with logging certifications.

    • Statute Clearance - As part of the Statute Clearance work stream, TEs are instructed to detach original certifications from statute cleared submission packages containing 1040X returns exclusively.

    • Correspondence – Original certifications may also be sent directly to the OVDP Unit by taxpayers and received as correspondence. After following correspondence procedures, these original certifications will be logged and filed.

Logging Certifications – Individual Spreadsheets
  1. The OVDP SharePoint site contains an Excel spreadsheet for each TE and ET for certifications. Record original certifications received on such spreadsheets. The Certification Librarian will log certifications in the Master Log.

  2. The Certification Librarian or assigned ET should periodically check the incoming mail basket for certifications routed to AUSC 4305 from other areas. Check certifications against the Master Log to identify possible duplicates, misidentified responses to correspondence or subsequent certifications with additional information. In all cases of duplicate certifications, if an original copy is already on file, dispose of the exact photocopy as classified waste. Refer responses to correspondence to the TE tasked with correspondence review.

  3. An "Instructions" tab is available in each file.

    • Enter new certifications on the appropriate worksheet as you receive them (tabs for Streamlined Foreign Offshore – SFO or Streamlined Domestic Offshore – SDO).

    • Spouses on joint certifications should be logged in the columns next to the primary taxpayer.

    • If the taxpayer indicates they are not filing returns for the previous 3 years and owe zero tax because the non-willful conduct occurred prior to the most recent 3 years, but within the FBAR disclosure years, place an "X" in the No Returns Filed column.

    • Enter the total Tax and Interest paid in the Tax + Interest column. This amount is usually found on page 1 of the SFO and SDO certifications.

    • Enter the total MOP in the Total MOP column. The taxpayer’s MOP calculation is usually found on page 3 of the SDO certification (Form 14654).

    • If the taxpayer calculated the MOP based all or in part on a Canadian RRSP, place an "X" in the MOP Paid on RRSP column.

    • Be sure to save your file after entering certifications.

    • After logging, sort the paper certifications in numerical order by SDO or SFO, TIN, and month received. Bundle the certifications by month, and mark with the month received. Place the certifications in the 2014 STREAMLINED ORIGINAL CERTIFICATIONS basket or give directly to the Certifications Librarian. Do not place unlogged certifications directly into the files or the basket.

Logging Certifications – Master Spreadsheet
  1. The Streamlined certifications master spreadsheet is located on the OVDP SharePoint site and maintained by the Certifications Librarian. The file is organized with tabs for updates to the log. Periodic updates of certifications received should be emailed to the supervising manager.

    • Check out and open the master spreadsheet file from the SharePoint site. Click on the tab for the latest update period, SFO or SDO as needed.

    • Open each individual spreadsheet and copy new entries over to the master list tab for the current update period. Place a solid line or other notation on the individual spreadsheet to indicate which entries have been copied.

    • Save and check-in the updated file.

Statistical Sampling
  1. The Certification Librarian is responsible for preparing the log for certifications from which a statistical random sample will be selected for further analysis. These samples occur twice a year - June 30 and December 31. Any updates from the individual spreadsheets must be copied over on the closing date and then checked for duplicate entries. A separate file should be created with only the most recent SDO and SFO lists. This file is sent to the supervising manager as the population for the statistical random sample.

Filing Certifications
  1. Logged certifications are organized by SDO or SFO, TIN, and month received.

    • Check the 2014 STREAMLINED ORIGINAL CERTIFICATIONS basket regularly for newly logged certifications.

    • Organize certifications by TIN and month received. Certifications with no TIN should be placed in the folder marked 900-999/NO TIN.

    • In all cases of duplicate certifications, if an original copy is already on file, dispose of the exact photocopy as classified waste.

    • Interfile with existing filed certifications.

    • Add folders when additional space is needed for certifications and for each new month.

Removing Certification from the Files
  1. When a certification is permanently removed from the files, document the reason for removal (e.g. OVDP Transition) in the "Certification Removed from File" column under the "Complete" list tabs.

OVDP Transition

  1. Transitional treatment under OVDP allows taxpayers participating in OVDP, prior to July 1, 2014, who meet the eligibility requirements for the expanded Streamlined Filing Compliance Procedures, an opportunity to remain in the OVDP while taking advantage of the favorable penalty structure of the expanded Streamlined Filing Compliance Procedures. Transitional treatment is governed by the Transition Rules Frequently Asked Questions (FAQs) found on IRS.gov.

Indexing

(1) Indexing is the process of building the taxpayer’s OVDP submission in the e-Trak database.

(2) Indexing requires that the following steps be completed:

  1. Copying the Submission Folders from CI Foreign Asset Disclosure Initiative (FADI) Date Folder:

    1. Access the CI FADI Date Folder that contains the next set of Submission folders to be indexed. The CI FADI Date Folder is available in the FADI Shared folder. Copy the entire CI FADI Date Folder to the Indexer’s hard drive; never work from or alter the CI FADI Date Folder.

    2. Each FADI Date Folder includes a Submission folder for each taxpayer coming into OVDP. Within each Submission folder there will be several PDF scans of the documents that the taxpayer sent to CI, plus documents and correspondence created by CI related to the submission.

  2. Indexing Research:

    1. It is the responsibility of the Indexer to assign each OVDP submission an e-Trak Submission Index number (SI number). The Indexer is also responsible for determining the taxpayer’s correct name, correct TIN, correct filing status - i.e. Single or Married Filing Joint, etc., determining whether the taxpayer is a filer, non-filer, or stop filer, and determining the taxpayer’s most current address. It is critical that the data entered into the e-Trak database be current and correct.

    2. No TIN: When a submission is received but the taxpayer’s application does not include a TIN, the Indexer will first determine whether the taxpayer has an SSN. If the taxpayer has an SSN but has not filed a tax return under the SSN and, therefore, there is no record of the taxpayer in the IMF database, the taxpayer’s case file will be established as a non-filer. If the taxpayer has an SSN and there is a record of the taxpayer in the IMF database, the case file will be established using the taxpayer’s SSN.

      Note:

      If an IRS number (IRSN) needs to be issued to the taxpayer to establish the case file, follow the appropriate procedures for requesting an IRSN.

  3. Research Tools: To meet the requirements stated above, the indexer will research the following sources:

    • Form 14457: Offshore Voluntary Disclosure Letter: Review the Offshore Voluntary Disclosure Letter to determine the Primary Taxpayer’s correct name, TIN, address, the existence of possible related submissions, and other pertinent information.

    • CI Formal Acceptance letter: Confirm that the taxpayer has been accepted into OVDP. Also, note the date on the formal Acceptance letter.

    • CI List Database: From the CI List, verify that the submission is for an International disclosure rather than for a Domestic disclosure. Both are on the CI list and, on occasion, a Domestic disclosure is sent to OVDP by mistake.

    • e-Trak: Check the e-Trak database to determine whether the case has already been established. In some cases, the Submission folder from CI is either additional documentation for an established taxpayer or was already sent to OVDP and is for an already established case.

    • AMDISA: Verify that the taxpayer is not under examination in another exam group.

    • IMFOLI: Verify whether the taxpayer has filed tax returns.

    • IMFOLT: Review the IMFOLT for the tax years covered by the taxpayer’s submission to determine the taxpayer’s filing status.

    • INOLES: Verify the taxpayer’s correct name and address.

  4. Related Submissions and Related Index Numbers: Related submissions refer to submissions that should be certified together. For OVDP submissions, this is normally because the taxpayers are reporting the same OVDP assets , i.e. a married couple, siblings or families with joint offshore accounts. It is the indexer’s responsibility to determine whether there are related submissions and, if so, to determine the controlling submission and the primary taxpayer’s TIN for each submission. It is extremely important that the correct primary TIN is identified because this is the TIN that is built in AIMS. Each group of related submissions must be assigned its own, unique, Related Index (RI) number in addition to an e-Trak SI number.

  5. Identifying the Primary TIN: Every submission will have a primary TIN. When a tax return(s) includes both a primary and secondary TIN, even if the OVDP submission was only filed on behalf of the secondary taxpayer, the primary TIN will be the first TIN listed on the tax return. If there are multiple related taxpayers for a submission, review IDRS and determine how the taxpayers filed and under what TIN.

  6. Assigning an e-Trak Submission Index Number: It is the indexer’s responsibility to assign the e-Trak Submission Index (SI) numbers. The e-Trak report "Submission Index VDP Last Input Rept." shows the last e-Trak SI number that was assigned. Using this report, assign each submission the next sequential Submission Index Number.

  7. Recording the Submission in e-Trak: All OVDP cases must be recorded in the e-Trak database. It is the indexer’s responsibility to establish the case in the e-Trak database by completing the "Taxpayer" tab and part 1 of the "Controls" tab; part 2 of the "Controls" tab is completed during the AIMS establishment step. The e-Trak recordation process begins once an e-Trak SI number is assigned. The "Taxpayer" tab and both parts of the "Controls" tabs in e-Trak must be completely filled out before the cases are given to Team 1 for case building.

    1. "Taxpayer" Tab: Enter the following data on the "Taxpayer" tab:

      • Submission Index Number - record the e-Trak SI number assigned to the case.

      • OVDP Submission TIN - This is the TIN that is shown on the CI List. The TIN is usually, but not always, the same as the primary TIN. The purpose of this field is to be able to reconcile the indexed TINs with those that have been provided by CI.

      • Related Index Number - record the Related Index Number, if applicable. Each group of related cases must be assigned its own, unique Related Index Number. Additionally, every case within a group of related cases must have the same, identical Related Index Number.

      • Controlling – Enter "Yes" or "No" in this field, using the drop-down feature, only when there are related submissions. When there are related submissions, only one case is designated as the controlling case and is thus marked "Yes" . The other cases can be marked "No" . If related cases have addresses in different parts of the country, the controlling case is where all the related cases should be sent for certification by the field.

      • Disclosure Filed Timely - This was used when there were late submissions under OVDP 2009. There are no late OVDI 2011, OVDP 2012, or OVDP 2014 submissions. Therefore, for OVDI 2011, OVDP 2012, or OVDP 2014 this should be marked "Yes" .

      • Case Type - Choose the appropriate case type, 2011 Initiative, 2012 Program or 2014 Program.

      • TIN - The TIN for only the PRIMARY taxpayer information is entered. It is extremely important that the correct Primary TIN is entered.

      • Last Name/Business - If this is a business (EIN), record the entire name in the Last Name/Business field. Do not enter anything in the first name field. NOTE: Add Title/suffix or "DECD" following the first name.

      • Spouse Information - Self-explanatory

      • Address Information – Use the address found in INOLES

    2. "Controls " Tab: Enter the following data in part 1 of the Controls tab:

      • Office – Use the dropdown feature to enter “AUS” for Austin.

      • CI Memo Date - Use the date of the formal Acceptance Letter from CI.

      • Disclosure Received Date – Enter the date that CI assigned to the Date Folder holding the submission that is being entered into e-Trak.

      • Filer Indicator – both filers and stop filers are entered as "filers" , only non-filers are entered as "non-filer" .

  8. Transferring the Submissions to the VDP2-3 Shared Folder: Once the appropriate information has been entered in the e-Trak database by the Indexer, the Indexer will rename and move the renamed Submission folders from the Indexer’s hard drive to the “VDP2-3 Scans folder” located in the "VDP Shared folder" . The submission is renamed by indicating the e-Trak SI number plus the CIMIS number assigned by CI, for example "81114-1750154630" .

  9. Creating the Blue Folder that is used to maintain the CI documents: The Indexer will print out four sets of documents from each Submission folder, now on the Indexer’s hard drive, and place the paper copies of the documents in a Blue folder for the File Completion step. Record the e-Trak SI number on the tab on the Blue folder. The Blue folder will contain:

    • Offshore Voluntary Disclosure Letter – The Blue folder will contain the earliest perfected Form 14457, Offshore Voluntary Disclosure Letter, that the taxpayer submitted to CI requesting admission to OVDP. On occasion, there will be multiple Offshore Voluntary Disclosure Letters that the taxpayer submitted to CI; the earlier versions usually had to be perfected by the taxpayer before CI would accept them into OVDP.

    • CI Check Sheet(s) showing the various background checks that CI performed

    • CI Acceptance letter to the taxpayer, stamped with the date that the CI folder was received by OVDP

    • Form 2848 Power of Attorney, if applicable

    • Form 56 Notice Concerning Fiduciary Relationship, if applicable

    • Form 9984, Examining Officer's Activity Record is used to communicate notes to other people involved in the OVDP process. The Form 9984 might include the following information:

      • If an -L Freeze is present but the submission was accepted by CI.

      • Any other information that would be helpful for File Completion step, the AIMS/ERCS Establishment step, or information that may be useful for the case builders.

  10. Updating the FADI Control Log: If a Submission folder has not been indexed, the exception must be noted on the FADI Control Log. For example, if a Date Folder includes a Domestic submission and, thus, the submission has not been indexed, this should be noted on the FADI Control Log. If all the Submission folders have been indexed, this should also be noted on the FADI Control Log.

File Completion

The File Completion step is the process of creating the physical case folders that will contain the OVDP submission documents.

  1. Burning the PDF Scans to a CD: All the electronic documents received from CI should be burned onto a CD using the Symantec CD Burn process. All PDF scans for submission folders with an "addl" suffix, i.e. documents received for an already established case, must also be burned to a CD. Each CD is encrypted with a pre-set password.

  2. Determining Whether the Submission is Domestic or International: Determine whether the submission is domestic or international based on the address of the taxpayer in INOLES and the address of the POA. If either address is international, the submission is international.

  3. Creating a Manila Folder to store the CD:
    Outside Front Cover - Top, Left

    • Put the Case Type: VDP 2011, VDP 2012 or VDP 2014

    • Related cases associated with the Primary case file should have a Related Case Cover Sheet attached to the front of the manila folder.


    Outside Front Cover - Top Center

    • Put the Primary TIN, & underline it in red

    • Put the Primary name below it

    • Put the Secondary TIN (if any)

    • Put the Secondary Name below it


    Outside Front Cover - Top Right

    • Put the Submission Index Number (SI number).

    • Below the SI number, next to "Year" on the folder:

      • Write "Filer" if the taxpayer has filed in the past, even if the taxpayer is a stop-filer.

      • Write "Non-Filer" if the taxpayer is a non-filer. Special procedures are required to establish a non-filer case in AIMS.

      • In the "Date Assigned Tax Auditor" section, write the file completer’s initials (first & last) and the date that the manila folder was created.


    Outside Front Cover - Bottom Right

    • In the related taxpayer name section, write pertinent comments. Include:

      • If the secondary TIN is the account holder

      • If any other -L Freezes are present, indicate the year & the project code


    Inside Front Cover

    • Staple the CD and encrypted media instructions sheet to the inside front cover of the manila folder.

    • Include any Form 9984 in the manila folder.

  4. Creating a Brown Folder for each submission entered into the E-Trak database:

    • Each manila folder will have a brown folder even if the related submissions have the same e-Trak number.

    • The blue folder(s) and the Manila folder(s) go into the brown folder.

    • Write the e-Trak number on the spine of each brown folder.

    • Write "INTL" in the upper right corner of the brown folder for all international submissions. If the submission is a domestic submission, write in the state abbreviation in the upper right corner of the brown folder.

    • If there are related submissions, rubber band the brown folders for all the related submissions together; place the controlling submission’s brown folder on top.

Establishing AIMS/ERCS Control

  1. Inputting e-Trak submissions in AIMS: Determine if the taxpayer is a "filer" or "non-filer" using the IMFOLT of the year to be controlled. (If there is a TC 150 without a substitute for return (SFR) indicator posted to the account they are "filers" .) If there is not a TC 150, use IMFOLI to determine if they have filed previously and stopped.

  2. Use IDRS Command Code "AM424" to add the control to AIMS: The submissions will process one at a time using the following information:

    • Source Code: 73 filer & stop-filer or 24 non-filer

    • Primary Business Code: 330

    • Secondary Business Code: 87700

    • Master File Tax Code: 30 for individuals with an SSN, EIN’s will vary

    • Status Code: 6

    • Return Request Indicator: 3 (no return)

    • Project Code: 1123 (2012 Program) or 1153 (2014 Program)

    • Tax Identification Number: SSN, EIN or IRSN

    • Name Control

    • Year to be controlled

    • Activity Code: 272 for SSN’s, EIN’s will vary

    • Push Code: 36 (used for non-filers and stop-filers)

    • Statute Day: EE (used for non-filers and stop-filers)

  3. Establishing a Case in IMF: When INOLES shows that the taxpayer is not established in the IMF database (no account on Master File) because the taxpayer has not filed a tax return, the case must be opened in IMF.

  4. Reviewing IDRS to Verify that Submissions were Fully Established in AIMS: Once a submission is established in AIMS, the AIMS/ERCS establisher will complete part 2 of the e-Trak Controls Tab (disposition section). The steps to perform this task are:

    1. Date to AIMS: This is the date that the case is fully established in AIMS.

    2. Ready to Ship – "Yes" when the case is ready to transfer to the OVDP Case Building team.

    3. Disposal – "Ship"

    4. Disposal Date: This is the date that the Submission was given to the OVDP Case Building team

    5. Comments: Use this field to record all pertinent case comments.

      Note:

      Because there is a 256-character limit in this section, it is important to keep these comments brief and succinct. Do not format the comments by inserting carriage returns or any other formatting methods. Separate thoughts with a period. Use abbreviations when possible.

  5. Transferring the Cases to the OVDP Case Builders: Each week, the AIMS establisher will check the AIMS database to determine which of the submissions that have been input in AIMS through AM424 have been fully established on AIMS. When a submission is fully established on AIMS, the submission is ready to move to the OVDP case building team. When the submission case files are physically moved to the OVDP case building team, a list of the submissions being moved will be given to the OVDP case building team.

  6. Updating the AOIU Status Report on OVDP SharePoint: When all the cases in a CI Date folder are moved to the Case Building team, the AOIU Status Report maintained on SharePoint is updated to reflect the completion of the Date folder. The information in this control log allows management to monitor the status of the Case Establishment work stream. Each time that cases are moved to the Case Builders, the "Monthly" tab should be updated to reflect the number of cases that are being moved.

  7. Sending the Letters 5089: When OVDP cases are ready to transfer to the Case Builders, Letter 5089 is sent to the taxpayer and to the taxpayer’s representative. This letter informs the taxpayer and the representative of the 90-day deadline for submitting the documents required for their OVDP submission. The letter also gives the 180-day final deadline for submitting documents and informs the taxpayer and representative of the process for requesting a 90-day extension beyond the initial 90-day deadline.

  8. Add Cases to the OVDP Active Cases Management Report: See IRM 4.63.3.1.4, Program Management and Review.

  9. Associating OVDP unassociated documents with the case file: Taxpayers will on occasion send documents related to their OVDP submission to the OVDP Unit before they are accepted by CI into the program. When the documents are received, they are placed in a suspense file and recorded on a control log. Each time new cases are ready to transfer to the case builders, the log is checked by the AIMS establisher to determine whether or not the documents associated with a particular case have already been received. If the documents have already been received by OVDP, they are retrieved from the suspense file and associated with the OVDP case file before the case file is given to the case builders.

Incoming Mail Procedures

  1. Mail is received in the campus mailroom.

  2. Mailroom clerk will open the mail and any checks received will be deposited and processed by the mailroom clerk.

  3. Mail is also delivered to the OVDP Team by internal mail or from Receipt and Control function. When possible, mail should be checked and processed daily .

  4. Some mail is not opened and delivered to the OVDP Team. The mailroom will call the team to have it picked up. These are usually flat packages and boxes (primarily internal mail). The tax examiner will go to the mailroom for those items. These packages will be located inside the mailroom, which is a restricted area.

  5. All employees are to review the documents to see if there are any checks that need to be processed. No one is to accept mail that includes remittances. If there are checks, the employee is to give the mail back to the mailroom clerk for deposit and processing.

  6. All mail is date stamped with Receipt and Control stamp given to tax examiner by mailroom clerk per IRS procedures (IRM 3.10.72.3) (e.g. first page of tax returns and correspondence.) Taxpayer original documents such as bank statements are not stamped.

  7. When mail is received in OVDP Team, it is stamped using OVDP stamp as "received in OVDP" .

  8. Using the taxpayer’s SSN, the tax examiner will research all incoming mail by first checking IDRS, and reviewing AMDIS. If there is an AMDIS, tax examiner will look for a Project Code (see list of OVDP Project Codes) and an employee group code (EGC) to determine where the mail should be routed.

  9. If it is in OVDP, (OVDP EGC) the tax examiner will check e-Trak for the e-Trak number. Tax examiner will pull the case file to associate the documents.

  10. If the AMDIS shows an EGC not in OVDP and the examination has not been closed, the mail is routed to the Exam Group controlling that case. When possible, mail should be routed daily and not be allowed to stack up or accumulate. Routing instructions are provided by the tax examiner or employee performing the research.

  11. If there is no control on AMDIS, the tax examiner will research e-Trak to determine if an e-Trak number is assigned.

  12. If there are Forms 1040X with foreign sourced income and/or foreign information returns (5471, 5472, 886, etc.) these may be Quiet Disclosures and will go to the Quiet Disclosure Coordinator. Quiet Disclosures will never be on the CI listing, nor will they have an e-Trak number.

  13. If there is an e-Trak number, the case is an OVDP case and the tax examiner will associate mail with the case file.

    1. A letter in the file with or without an original signed 906 requesting penalty reconsiderations, reductions, and/or removal will be given to the RA working penalty reconsiderations.

      Note:

      Penalty reconsideration was provided for certain taxpayers that participated in the 2009 OVDP after new lower penalty categories were introduced in the 2011 OVDI. See 2011 OVDI FAQs 52 and 53. Penalty reconsiderations, reductions, and removal requests are now extremely rare.

    2. A letter in the file indicating the taxpayer wants to opt-out of OVDP goes to the RA working opt-out cases.

  14. If there is no e-Trak number, the tax examiner is to research the CI List. If on the CI list, the tax examiner is to determine what CI did with the disclosure. The list should tell the tax examiner what CI has done with the voluntary disclosure. (these are considered "unassociated documents" )

    1. Accepted/Direct Referral – we will eventually get an e-Trak number. Documents will be considered Taxpayer’s information is entered on the spreadsheet "Unassociated Documents OVDP with no e-Trak number" by the TE or RA involved in that work stream.

    2. Declined/ Ineligible to Participate or Closed Incomplete – Documents for CI Declined taxpayers are currently handled through the unassociated documents work stream.

    3. Withdrawn – These are considered non-OVDP documents and are given to the Declined & Withdrawals campaign librarian for consideration in the risking process. RA to determine next processing.

    4. Pending – If there is no information on the disposition of the case, this is considered pending. Documents are given to the responsible Sr. RA in the same manner as the Accepted/Direct Referral cases.

  15. If the file is not on the CI List, the tax examiner will research the file for any indication of why we received the documents. If the tax examiner cannot determine where the documents should go, give them to an RA or the Manager for review.

    1. The file may have documents indicating the taxpayer wanted to go into OVDP.

    2. The file may have a letter requesting information on their case.

  16. Tax examiner is to review all documents for amended returns and Forms 872.

    1. Amended returns with a balance due are to be reviewed. Tax examiner will print an IMFOLT for that year and give to the manager.

    2. All Forms 872 and FBAR extensions that are received need to be pulled and go to the manager along with the case file for review and signature. If the taxpayer did not sign and there is no Form 2848 for the POA, then it needs to go to the manager or designated examiner to contact the POA for the proper documentation. Forms 872 that need perfection go to designated person.

  17. All incoming Forms 3210 need to be acknowledged after verifying we have received everything listed. An acknowledgement copy will be returned to the person shipping the documents. Our copy needs to be filed in our OVDP Incoming Form 3210 binder.

    Note:

    Forms 3210 will be received from internal sources only.

Outgoing Mail Procedures

  1. Outgoing mail that needs to be processed will be given to the tax examiner.

  2. Verification of each address and contact person is made prior to shipping and shipping label prepared. Use the Who/Where tab in SERP to look up the address of the EGC to mail the documents

  3. A Form 3210 is prepared with the listing of cases, documents, etc. Information on the Form 3210 will include: e-Trak number (if there is one), SSN (last 4 digits per guidance), Name Control, and description of documents being mailed.

  4. If more than one box, Form 3210 is prepared for each box of documents with the # of boxes in the shipment noted on the shipping label. Confirm SSN/e-Trak for each case in the box is correct.

  5. Part 4 of the Form 3210 is filed in the "Unacknowledged" section of the OVDP Outgoing binder for our records. The Outgoing Binder is divided into two sections: Unacknowledged 3210s and Acknowledged 3210s. The unacknowledged Form 3210 will be pulled and shredded when the acknowledged 3210 is received and filed. The acknowledged copy will then be filed in that section of the binder.

  6. A follow-up will be made in 10 days if Form 3210 is not acknowledged by the person receiving the mail/documents and will continue to follow-up through email and/or phone calls until acknowledged copy is received.

  7. Files to be shipped are double wrapped, as required per IRM 10.2.13.4.4.1, Shipping Personally Identifiable Information (PII). Also see Document 13056, Employee Toolkit on Shipping Procedures for Personally Identifiable Information (PII).

  8. Electronic transfer of database, if required is made on ERCS by tax examiner or initiated by PSP if the transfer is to SBSE.

  9. Mail needs to be in the mailroom by 2 p.m. to be shipped that day. If after 2 p.m., it will be shipped the next day.

  10. Boxes are taken to the mailroom for shipping.

    1. Form 9814 is used to ship documents via UPS, write on top "Tracking Information Please" to receive the tracking information. Form 9814 will be returned from mailroom with tracking number on it. OVDP mailing address should be included on the Form 9814.

    2. Attach a copy of the Form 9814 to the "to be retained copy" of the Form 3210 (part 4 of Form 3210). The Form 9814 will be removed when the acknowledged copy of the Form 3210 is received.

    3. A copy of the Form 9814 will be sent to the OVDP manager from the mailroom and will be filed in OVDP.

      Note:

      Only use DHL when sending to a physical business address as DHL requires a signature.

  11. All outgoing correspondence to an international business address is to be sent via DHL.

Controlling Multiple Years for International Cases

  1. OVDP cases which are identified as International must have all participating years controlled on AIMS/ERCS prior to sending to the field. The cases are opened under the exam freeze –L. OVDP exam group codes (EGC) currently are:

    PBC SBC EGC
    330 87700 1940
  2. Current project codes which are most widely used are:

    1. 1008 – timely filed 2011 OVDI ( Identified by e-Trak number in the 4XXXX series)

    2. 1123 – timely filed 2012 OVDP. Identified by e-Trak number in the 6XXXX series

    3. 1153 – timely filed 2014 OVDP. Identified by e-Trak number in the 8XXXX series

  3. Taxpayer Name, Name Control and Address: To ensure no error message is received when the Form 5345-D is being input, the taxpayer’s name, name control and address should be taken from the INOLES. Enter the taxpayer’s name (LAST, FIRST, MI), street address, city, state, and zip exactly as it appears on the INOLES. On business returns, be sure to check the name control on INOLES, e.g., Tom Jones Company – name control could be TOMJ or JONE.

  4. PBC/SBC/EGC – See above. For domestic cases, use EGC 1942; International cases use 1943

  5. TIN – Use the primary taxpayer’s social security number or ITIN. The penalty module will be opened for the either the primary or, if the voluntary disclosure is only for the secondary spouse for that spouse.

    Note:

    A separate form must be made when TIN or MFT is different, therefore the penalty module will also have its own Form 5345-D due to the civil penalties MFT 55.

  6. MFT – For individuals tax account MFT is 30; for corporations tax account MFT is 02; for partnerships tax account MFT is 06; for trusts tax account MFT is 05; for penalty module MFT is 55/P9.

    Note:

    A separate form must be made when TIN or MFT is different, therefore the penalty module will also have its own Form 5345-D due to the civil penalties MFT 55.

  7. Tax Period: Input YYYYMM (e.g. 201212) for each year and month ending that needs to be controlled. The penalty module tax year is determined by the particular OVDP the taxpayer is participating in.

  8. Activity Code: Use the activity code from the key year for all related years. For the penalty module, activity code is always 506.

  9. Source Code: Refer to the Source Code Job Aid Document 6036.

  10. Status Code: The Status code should be 08 for domestic and 06 for international cases.

  11. Statute Date: Use alpha code if applicable when the statute is within 90 days, for Non-Filed returns in OVDP it will be EE with a Push Code of 036. If a YY memo is necessary due to a barred statute, the statute date will be in the form 04/YY/2014. For the penalty module, the statute date will in the form 04/XX/2015. If you are using a YY statute, you will need to attach a copy of the YY Memo to the Form 5345-D.

  12. Tracking Code: Generally not used by OVDP

  13. Project Code: The key case has a project code. The same code is required on all prior, subsequent returns and the penalty module as well. In most cases, you will use the same project as the currently open control (check AMDISA).

  14. Claim amount: Not used by OVDP POD. AIMS will post the correct POD.

  15. Related Return Indicator: K – key case Y – related year. OVDP forms will normally indicate that these are all related cases by using Y in this box.

  16. Aging Reason Code: Not used by OVDP

  17. Input on ERCS: This section will be initialed by the person who input the request on ERCS. A copy of the Form 5345-D will be returned to the agent for their case file with the IDRS prints.

  18. Related Return Information: The examiner will complete this section to show the key case. This is the authority for opening the related cases.

  19. Reason for Request: A reason must be given. When opening all additional tax years for international cases this should be noted; when opening the penalty module a short sentence indicating this is sufficient.

  20. TEFRA/ Original Return Requested / Labels / Joint Committee/ Foreign Control/ etc.: Enter N in these box(es) for OVDP purposes.

  21. LB&I/CIC: Not used by OVDP

  22. Examiner’s Signature / Manager’s Signature: The examiner is required to sign Form 5345-D before forwarding to the manager for approval. Once approved it is given to the assigned tax examiner for input on ERCS.

  23. If the taxpayer’s filing status has changed, you will need separate forms for each filing status.

  24. International cases require all pertinent tax years to be opened and controlled, including the penalty module (MFT 55). The disclosure period for the current program is 8 years. In addition, it is possible that the taxpayer’s particular situation allows for a different number of years to be opened. You will need to review the case file documents to determine the correct number of years.

Instructions for Completing Form 2859

To complete Form 2859, Request for Quick or Prompt Assessment:

  1. Top Section

    1. Reason for request – Check box by Quick

    2. Check box by 130-132 Exam Agreed

  2. Part A - Taxpayer Information

    1. TIN: Enter first Social Security Number entered on Form 1040X

    2. Name Control: Use first four letters of primary taxpayer’s last name from IDRS. IMFOLT, IMFOLI, and AMDISA – all show the taxpayer’s name control

    3. Name: Enter taxpayer names as found on Form 1040X; First, MI, Last

    4. Address: Enter address as found on Form 1040X

    5. 23C Date: Check the Specify box. Using the space right next to Specify enter appropriate 23C date.

      Note:

      This date changes. Check the posting in office for correct 23C date to use.

  3. Part B – Requester Information

    1. Statute Expiration Date: Use ASED from the IMFOLT print

    2. Requester name/address/phone number: Enter your Name, Unit, Mail Stop and Phone number – Use Ext 8707

    3. Employee assignment number/function: Enter your 10 digit IDRS number. You can find this number by using command code SFDISP in IDRS.

    4. Date: Enter today’s date

  4. Part C – Assessment Information

    1. Section 1. Form No. – Enter 1040

    2. Section 2a. Period ended – Enter tax year (e.g. 200912; 201012, etc.)

    3. Section 4a. Tax Adjustment

      1. If you have a Form 1040X that contains only one column of numbers (Rev. 01-2010), use figure from Amount You Owe, Line 19

      2. If you have a Form 1040X that contains three columns of numbers, look at figures on Total Tax – Net Change, Line 10, Column B or Amount You Owe Line 21 (or Line 19, depending on form revision) WHICHEVER IS GREATER between Total Tax – Net Change and Amount You Owe

    4. Section 18. Total Assessments – Use same figure as Line 4a, above

    5. Section 22. Total Lines – Use same figure as Line 4a

    6. Section 23. Payment on Tax Module – Use same figure as Line 4a

    7. Section 24. Balance of Tax Due – Enter 0.00 (zero)

  5. Remarks: At the very bottom of the form in Remarks – Enter: "OVDI Per Form 1040X – DO NOT BILL"

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    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡


    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡


    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Streamlined Filing Compliance Procedures – Steps for Tax Examiners

All tax examiners (TEs) will maintain their individual Streamlined Correspondence Log. When applicable, each step should be input as the TE performs the task using the standard descriptions described below. All TEs will upload their individual Streamlined Correspondence Log to the OVDP SharePoint daily before the end of their tour of duty.

Step 1 – Process Form 2848 Power of Attorney and Declaration of Representative
The Form 2848 must be verified and submitted to CAF within 5 days of receipt. After the review of Form 2848 is complete, the TE will complete the "IRS Only" box; write "Faxed to CAF" with the date on top of form; and fax the Form 2848 to the appropriate CAF unit.

  1. Check CFINK to verify that the Form 2848 you received has not already been submitted to CAF. If CFINK shows a POA for the taxpayer you must confirm that the information matches the Form 2848 that you received.

    • Use the CFINK IDRS Command Per CFOL Express. This command code provides information on the taxpayer's Powers of Attorney nationwide.

      • Format: CFINK 000-11-2222

      • Comment: The periods shown will be the only modules covered by the Power of Attorney. The output will look like this: 30 200912. In this instance the fiscal year ended in the 12th month.

    • Next, input:

      • Format: CFINK 000-11-2222
        30 200912

      • Comment: This will provide the name of the representative and his/her representative ID number.

    • To obtain the address and phone, input:

      • Format: CFINK 4000-12345R

      • Comment: Number is representative ID number.

      CFINK can also be researched using the IAT tool.

  2. Verify - Per 4.11.55.1.7.1, the F-2848 must contain:

    • The taxpayer’s identity

    • The Power of Attorney/representative’s identity

    • The type of tax or tax form number

    • The applicable tax periods

    • The taxpayer’s dated signature

    • The representative’s designation, jurisdiction, and dated signature

    Specific instructions

    • Per OVDP’s 2014 FAQ 48, Form 2848, Line 3 "Description of Matter" should list "Income, Civil Penalties, and Report of Foreign Bank and Financial Accounts (FBAR) Matters" . (A sample is provided through a link in the FAQ.) The use of terms such as "all taxes" is not acceptable.

    • The tax forms for the respective matters are 1040, N/A (for civil penalties), and TD F 90-22.1/FinCEN Form 114.

    • The years should name the specific years covered by the Form 2848; the use of terms such as "all years" is not acceptable.

    • The representative must be an individual; a firm or corporation cannot be designated a representative.

    • Make sure the Form 2848 is the current form.

    • Verify that both the taxpayer and the representative(s) signed the Form 2848.

    • Joint filers must complete and submit separate Form 2848s.

    • Verify that the representative’s designation is valid. Most of the representatives for OVDP are attorneys (designation "a" ) or CPAs – both are required to hold a valid license in the state that they list for their licensing jurisdiction or authority.

      Example:

      To research an attorney licensed in California, Google "State Bar of California" . Click on attorney search and enter the bar number listed on the Form 2848. The results will indicate if the attorney is active and currently allowed to practice law in California.

      Example:

      To research the license of a Texas CPA, Google "Texas State Board of Public Accountancy" and click on "License Lookup" . Click on "Individual Licensee – Lookup" and search by the license number listed on the Form 2848

    • If the license number is incorrect, search using the representative’s name and address. If you can’t find anything, bring it to the RA.

    • Form 2848 may be a fax or a copy.

  3. Process - Per IRM 4.11.55.1.8.2

    • Upon receipt of a POA (Form 2848), the employee must ensure that all required elements are properly completed and the form must be date stamped.

    • Once it’s determined that the POA is valid and can be submitted to CAF, the employee should take the following actions:

      • Enter the name, telephone number, function of the person reviewing the POA and date of the review in the space provided on the first page.

      • Note across the top of page 1 "Faxed to (Appropriate Campus) on (Date)" .

      • Domestic Form 2848s should be faxed to the Ogden CAF unit at 855-214-7522

      • Foreign Form 2848s should be faxed to the Philadelphia CAF unit at 855-772-3156

      • Receipt, review and forwarding of the POA to the CAF unit must be completed within five workdays of IRS receipt.

      • Retain the Form 2848 and fax sheet with the correspondence

Step 2 – Input & Verify the Taxpayer Name(s) and TIN(s)

  • Input the taxpayer’s name and TIN into the correspondence log. If the correspondence is for a married couple, input the primary name and TIN first, the spouse name and TIN second.

  • Use INOLES to verify that both the primary and the secondary taxpayers’ names and TINs are correct on the correspondence.

  • If the TIN is not on the correspondence or attached documents use the command code NAMES to research the TIN. See CFOL Express or use the IAT tool if you are not familiar with the IDRS command code NAMES.

  • If you are unable to locate the taxpayer using NAMES, then document that fact in the correspondence log.

Step 3: Determine if the taxpayer’s case is an OVDP case.

Research steps Research Notes
Is the taxpayer on the most current CI list?

If yes, is the taxpayer CI pending? (Does the taxpayer have an “End Date”? This is the date the taxpayer was either accepted or rejected by CI.)
  • If yes – the taxpayer has been accepted by CI and is NOT CI Pending.

  • If no – the taxpayer has not been accepted by CI and is labeled CI Pending. Attach a printout of the section from the CI list, write TE’s name and take to senior revenue agent (SRA) . Note CI Pending and date submitted to SRA on correspondence log.


If no, move to Step 4 - Non-OVDP correspondence
On CI list
Not on CI list





CI pending: submitted to SRA (date)
Is taxpayer established on AMDISA?
  • AMDISA is created by Team 1 when they build the OVDP case. If AMDISA is present on IDRS, make a print of the AMDISA screen.

  • If the taxpayer has an end date and is not yet established on AMDISA, print out their section of the CI list.

AMDISA
No AMDISA
Is taxpayer established on e-trak?
  • Note the e-trak number on the AMDISA printout or printout of CI list.

  • Include the e-trak number on the correspondence log.

No e-trak;
e-trak #xxxxx
If an OVDP case, determine where the case file is located.
Austin OVDP: PBC-330, SBC-87700, EGC-1940, 1942, 1943
  • Attach the AMDISA screen print or CI printout to the correspondence and write the e-trak number on upper right corner

  • Place the correspondence in Team 1’s “Incoming Mail” basket.


In the Field:
  • Attach the AMDISA screen print to the correspondence and write the e-trak number on upper right corner.

  • AMDISA contains the Employee Group Code (EGC) of where the case is assigned.

  • Use the Who/Where tab in SERP to locate the manager of the exam group where the case has been assigned. Click on “Exam Employee Group Code (EGC) Contacts”; click on Excel link “Employee Group Code Contacts”; click on PBC listed on AMDISA; search EGC for group number and name of Group Manager.

  • Email the Group Manager to notify them that the correspondence is being sent to them. Include the e-trak number.

  • Take the correspondence to the Exam Tech to be sent to the field using Form 3210.




Forward to Team 1

Step 4 – Determine what the Non-OVDP Taxpayer letter says:

Research steps Research notes
Taxpayer is responding to Letter 4087.
  • When Submission processing receives a Streamlined submission and it is missing any requirements, Letter 4087 is sent requesting the needed documents. At times, these responses are misrouted to LB&I.

  • If a SDO/SFO certification is received along with a copy of Letter 4087:

    • Check ERS inventory using ERINV XXXXXXXXX@18 and print response screen. Make copy of certification and forward response screen, copy of certification, and any additional documents received with certification to Correspondence Coordinator.

    • Log original certification accordingly and send original certification through to Certification Librarian.

ERINV
The taxpayer will be submitting a package.
  • Research IMFOLT and TXMODA to determine if returns and/or amended returns have been processed.

  • Streamlined returns will have a DLN that has a range of 850-899 in the 9th through 11th numbers.

    Example:


    DLN: 20221-306-88301-3

  • If you can determine that they’ve already submitted a package and the correspondence does not contain a certification, an information return or tax return, then log the correspondence as resolved per How to Log Correspondence below and “classify waste” the correspondence.

  • Classified waste is documentation containing taxpayer entity or account information not needed for audit trail purposes. See IRM 21.5.1.4.10 for information on classified waste.

  • If you determine that they haven’t filed, then suspend the case for 90 days from the review date to give them time to submit and/or W&I time to process returns.

IMFOLT
TXMODA











Log per HTLC



Log per HTLC
Note Follow-up date
The taxpayer previously submitted a package and is providing additional forms/information.
  • Research IMFOLT and TXMODA to determine whether any returns and/or amended returns have been processed. (i.e. Streamlined DLN, amended return on CIS, TC 977 with applicable date.)

  • Research ERINV XXXXXXXXX@18, to determine whether ERS is waiting for a response. If the SSN is in ERS, then print out the response screen and take it to the CC. The CC will contact ERS and take the correspondence to ERS clerical.

  • If a submission has been processed, send the correspondence to be associated with the most recent year of the packet using Form 9856, Attachment Alert.

    • If a submission has not been processed, notate the research completed on the log and forward it to CC to suspend for future action.





IMFOLT



Forwarded to CC for ERS



Associate with return, RESOLVED



Suspend
The taxpayer is submitting only a Certification for the Streamlined Domestic Offshore Procedure (SDO) or the Streamlined Foreign Offshore Procedure (SFO).
  • Research ERS inventory, if returns are in ERS suspense the certification may be in response to Letter 4087. Print ERINV response screen, make copy of certification and forward both to CC.

  • Research IMFOLT and TXMODA to determine whether original tax returns and/or amended returns have been processed with a Streamlined DLN (See sample of Streamlined DLN above.)

  • If the tax returns have posted with the Streamlined DLN, verify on the Master Certification Log on SharePoint whether a certification has been received. Log the correspondence per How to Log Correspondence below.

  • If a certification has already been received, log the certification as correspondence and take to Certification Librarian with a note indicating that a copy has already been logged.

  • If a certification has not already been received, log the Streamlined Certification in your individual TE Correspondence log, as well as your individual Certifications log on the SharePoint site. Transfer the Streamlined Certification to the Certification Librarian.

  • If there aren’t any tax returns posted or pending, examine the certification for the 5% Miscellaneous Offshore Penalty (MOP).

  • Research IMFOLI and IMFOLT MFT 55 to determine whether a MOP has been paid.

  • If the MOP is the only reason for submitting a certification, then mark the MFT 55 column in the Correspondence Log.

  • Log the certification and deliver it to the Certification Librarian.






ERINV



IMFOLT, TXMODA




Forward to CL, RESOLVED



Forward to CL, RESOLVED









MFT55
Taxpayer correspondence is a partial submission, old Streamlined or undeterminable.




Letter 5498


Date of Letter




Follow-up date

How to Log Correspondence

Correspondence Log Columns Research Notes
Last Name Taxpayer’s last name
First Name Taxpayer’s first name
TIN/SSN Taxpayer’s TIN
IRS Received Date From date stamp
Tax Examiner Initial Review Date Date tax examiner first works the case
Docs Received in Austin Date documents received in Austin if sufficiently different than first received date.

SFO/SDO Cert., Form 709, Letter, Form 3520, etc.
Research Notes Notate if you checked the CI list, AMDISA or IMFOLT, notate e-Trak number if applicable, state “streamlined DLN” if the returns are posted with a streamlined DLN. Notate any other relevant information that you find.
POA Provide the name and contact phone number of the POA. Addresses are NOT needed.
Resolution Notate the actions taken on the case (i.e. transferred to Team 1, Suspended, referred to revenue agent).
Follow-up Date If the case requires any type of follow-up (waiting for returns to post, waiting for submission, waiting for response from TP, etc.) mark "Follow-Up Date" as 60 days for domestic and 90 days for international.
Resolved Date The Resolved Date is the date the case is completely closed and we do not have to take any further action or monitor for action.
CI Pending/Accepted Place an "X" in the column if the SSN is on the most recent CI list.
Referred to Revenue Agent Place an "X" in the column if the case has been referred to an RA. Indicate which RA in the Resolution column.
Date Mailed to TP Notate the date Letter 5498 was mailed out. Mark 60 days for domestic and 90 days for international for "Follow-Up Date" .
Intent to Submit Streamlined Place an "X" in the column if the TP and/or POA indicate they will be submitting a streamlined packet. These should be followed up in 90 days from the review date.
Follow-up Place an "X" in the column if follow up is needed.
No Response If contact with the TP has been made by phone and/or a letter and nothing has been received from the TP after 90 days from the latest contact, place an "X" in the column.
Left Message If telephone contact has been made and you left a message, place an "X" in the column. Be sure to notate the date you left the message in the research/resolution column(s).
OVDP Place an "X" in the column if the case has an e-trak and was placed in Team 1’s incoming mail basket.
MFT 55 Place an "X" in the column if the only submission was to pay the 5% Miscellaneous Offshore Penalty.
Follow-up with RA For cases that are not easily determined or were forwarded to the RA for a decision, place an "X" in the column and notate a follow-up date in the research and/or resolution column(s).
Resolved Place an "X" in the column once the case is completely resolved and we are no longer monitoring the case for timing or action.