The Tax Exempt & Government Entities (TE/GE) Division serves charities and non- profits, small local community organizations, major universities, large pension funds, small business retirement plans, federal, state, and local governments, participants in complex tax-advantaged bond transactions, and Indian tribal governments and their entities. The overall TE/GE examination program’s goal is to promote the highest degree of voluntary compliance with:

This IRM provides an overview of the responsibilities that examiners should understand and apply in the performance of their duties in executing the TE/GE examination process.

Examination of exempt organizations will be conducted to determine whether such entities meet continued qualification of exempt status, compliance and the causes of noncompliance with the tax laws and applicable resolutions.

Examination of employee benefit plans is regulatory, with emphasis on continued qualification of employee benefit plans. The IRS selects and examines returns to:

Examination of governmental entities will be conducted to determine whether such entities are in compliance with their employment tax filing, reporting, and payment requirements.

The Tax Exempt Bond Examination Program is to identify and correct noncompliance in tax-advantaged bonds.

TE/GE Examiners should refer to IRM 4.23.3, Exam Program and Procedures when examining employment tax cases in addition to this IRM section.

The procedures contained in this IRM are not intended to be all inclusive. Examiners must use their professional judgment in completing their exam cases and other compliance activities.

For ITG:

Examinations are conducted according to Policy Statement 1-236 (IRM 1.2.1.2.36), Fairness and Integrity in Enforcement Selection, and the Taxpayer Bill of Rights per IRC 7803(a)(3). The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights.

Policy Statement 4-4 (IRM 1.2.1.5.2) provides package audit requirements, that:

Under Policy Statement 4-117 (IRM 1.2.1.5.34), examiners and managers:

Policy Statement 4-119 (IRM 1.2.1.5.36) provides that the primary objective of the TE/GE program is regulatory, with emphasis on the continued qualification of exempt organizations and employee benefit plans, and continued compliance of governmental entities (federal, state, and local governmental entities, Indian tribal governments and tribal entities, and entities or organizations that issue tax advantaged bonds). The IRS selects and examines returns to:

IRC 7602 gives examiners the authority to:

IRC 7605 - Time and Place of Examination. Gives examiners authority to choose the time and place of the examination as is reasonable under the circumstances.

IRC 7803 - Commissioner of Internal Revenue; Other Officials. Execute duties in accordance with taxpayer rights as afforded by other provisions of this title.

IRC 6201 - Assessment Authority, which falls under Chapter 63 - Assessment.

Delegations of Authority are the official documents the IRS uses to delegate authority. They’re published as Delegation Orders. See IRM 1.2.2, Servicewide Policies and Authorities, Servicewide Delegations of Authority.

The Directors, EO/GE and EP, are the executives responsible for providing policy and guidance for field employees and ensuring consistent application of policy, procedures and tax law to effect tax administration while protecting taxpayers’ rights. See IRM 1.1.23, Tax Exempt and Government Entities Division, for additional information.

The Directors, EO Examinations, GE, and EP Examinations reports to the Directors, EO/GE and EP respectively, and are responsible for the delivery of policy and guidance that impacts the field examination process. See IRM 1.1.23, Tax Exempt and Government Entities Division, for additional information.

All examiners must perform their professional responsibilities in a way that supports the IRS Mission. This requires examiners to provide top quality service and to apply the law with integrity and fairness to all.

Examiners and their managers should thoroughly acquaint themselves with the examination procedures and information contained in this IRM, as well as other resources.

CP&C administers examination inventory control.

The FAC coordinates the assignment of examination inventory.

Two review groups make sure examiners conduct examinations per technical, procedural and administrative requirements:

In order to ensure a consistent level of managerial engagement in the process of making key strategic decisions during an exam, the examiner submits requests for approval by their manager through RCCMS.

The manager approves or rejects any request through RCCMS.

The IRS is fully committed to protecting the privacy rights of taxpayers and employees. Privacy laws are included in the IRC, the Privacy Act of 1974, the Freedom of Information Act, and IRS policies and practices. For more information about these laws, visit the IRS Electronic Freedom of Information Act Reading Room.

The following tables lists acronyms, abbreviations, forms, and publications used in this manual along with their definitions:

The following table provides definitions for the terms identified below:

The Tax Exempt & Government Entities (TE/GE) Division serves charities and non- profits, small local community organizations, major universities, large pension funds, small business retirement plans, federal, state, and local governments, participants in complex tax-exempt bond transactions, and Indian tribal governments and their entities. The overall TE/GE examination program’s goal is to promote the highest degree of voluntary compliance with:

Examiners should consult the Knowledge Management Virtual Library to ensure proper issue development and consistent application of the law.

To ensure that the IRM is always current, future revisions of the IRM will refer you to one of the books below for the correct codes to use in lieu of specifying an activity code, disposal code, source or status code. The IRM will specify the section of the document to reference and the type of activity, disposition, source and status code to look up.

TE/GE Examinations process provides an organizational approach for conducting professional examinations from the first contact with the taxpayer through the final stages of issue resolution and case closure.

TE/GE Examinations compliance program takes a strategic approach to effective tax administration.

Not all examinations are the same in scope, size, and complexity; therefore, portions of this guidance may be more applicable to some cases than others.

There are three phases to an examination:

The planning phase of the examination process determines the scope of the examination.

The execution phase of the examination involves reviewing records and developing issues.

The goal of the resolution phase is to reach agreement, if possible, on the tax or compliance treatment of each issue examined and if necessary, issue a Revenue Agent Report (RAR) or Closing Agreement to the taxpayer.

In accordance with Policy Statement 4-117, Examination Authority to Resolve Issues, examiners, and managers:

The IRS employees must be familiar with and act according to the TBOR. Every employee must consider these rights in carrying out their duties. See IRC 7803(a)(3).

The IRS employees working tax related matters must identify themselves (The Restructuring and Reform Act of 1998 (RRA 98) Section 3705(a)).

During an examination, examiners are responsible for:

SB/SE is the program owner for employment tax issues and penalties. FSL/ET maintains responsibility for handling employment tax issues and penalties for government entities. ITG maintains responsibility for handling employment tax issues and penalties for any federal tax issues involving federally recognized Indian tribes. The Bureau of Indian Affairs (BIA) maintains a list of federally recognized tribes and a Tribal Leader's Directory on their website at Tribal Leader's Directory.

The correct and timely reporting of employment taxes are the key to our voluntary compliance system as well as the cornerstone of the Social Security System. Studies show that the issuance of Forms W-2 greatly increases the likelihood that the income will be reported. Employment taxes include:

Examiners are responsible for determining if penalties are applicable in cases such as, but not limited to:

IRC 6751 requires written supervisory approval for all penalties except penalties or additions to tax under IRC 6651, IRC 6654, IRC 6655, or IRC 6662(a)(9) or IRC 6662(a)(10); or penalties automatically calculated through electronic means.

IDRS is the acronym for Integrated Data Retrieval System, a major application of databases and operating programs that support the IRS employees working active tax cases. This system allows the IRS employees to research taxpayer account issues, track status and post transaction updates to the Master Files (MF). IDRS updates are done in both a batch process and through online interactive real-time programs Command Codes.

AIMS is the acronym for the Examination Information Management System, which provides inventory and activity controls of active examination cases. AIMS links to IDRS to input status changes, adjustments, and case closing actions. Compliance checks are not tracked on AIMS.

WebETS is the acronym for the Web-based Employee Technical Time System. WebETS provides TE/GE employees a web-based application to:

The IRS employees are required to ensure that sensitive information is protected from unauthorized disclosure and access. This includes returns and return information but also includes other non-tax information, documents, records and processes.

For information on protecting and safeguarding Sensitive But Unclassified (SBU), Personally Identifiable Information (PII) and Other Sensitive Information, refer to the Think Data Protection website, IRM 10.5.1, Privacy and Information Protection, Privacy Policy and IRM 10.5.8, Safeguarding Sensitive But Unclassified (SBU), Personally Identifiable Information (PII) and Other Sensitive Information.

An official chronology should be included in every case file to record actions taken on the case, contacts made, follow-up dates and time expended. The form is a historical record. Update the chronology at the same time you take actions.

The RCCMS embedded chronology:

Include on the chronology, at a minimum, the following entries:

Include in the chronology, at a minimum, the following entries for management involved:

Since it is part of the examination trail, the chronology may be disclosed to the taxpayer under the Freedom of Information Act. Ensure entries are professional, accurate, and concise. Omit personal opinions. If an entry is lengthy (for example, a long phone call), place this information on a separate workpaper indexed to the chronology.

A clear, concise chronology is particularly important in sensitive or high-profile cases, and when the case involves uncooperative taxpayers or representatives (or issuers in TEB cases),or will be the subject of litigation.

It is critical to properly document all delays in cases, the chronology may be used in an interest abatement case. See IRC 6404(e) (providing for the abatement of interest when any assessment of interest on a deficiency is attributable in whole or in part to an unreasonable error or delay on the IRS’s part in performing a ministerial or managerial act).

The following are related resources that provide additional guidance on procedures related to TE/GE Examinations:

Examination Knowledge base on the IRS Virtual Library.

TEQMS on TE/GE Connect TEQMS, TE/GE TEQMS User Guide is available on the TEQMS website.

TEB: If the issuer or conduit borrower is an Indian tribal government, notify the Indian Tribal Governments function within the Government Entities division of TE/GE:EO/GE before you contact the tribal government to ensure compliance with all government-to-government relationship protocols.

TEB: If the issuer is a territory or possession of the United States of America or the case otherwise impacts international tax administration:

TEB: If the borrower is a church, notify the FAC for Exempt Organizations’ Examinations before you make contact to ensure compliance with protocols involving churches.

The IRS is governed by consultation policies that may be adopted by the Department of the Treasury. Indian Tribal Governments (ITG) continues this dialogue to ensure we constantly evolve to reflect tribal, the IRS, and stakeholder needs.

The Treasury Department has a consultation process to dialogue with Indian tribes on a government-to-government basis. This allows better understanding and response to their needs on Treasury regulations, legislative comments, proposed legislation, and policy statements that have Tribal implications, impacts Tribal economy, or preempt Tribal law. The Office of Economic Policy and led by the Assistant Secretary for Economic Policy is responsible for coordinating consultation between the Indian tribes and Treasury Department bureaus and offices. Please use the e-mail below to contact the Treasury’s official point of contact for tribal consultation if you have any questions, concerns or comments.

A government-to-government relationship is a bilateral recognition of the respective parties’ sovereignty. The IRS must interact in a way that respects the tribe’s position as a sovereign entity. Follow these guidelines when working with tribal governments:

ITG specialists trained in tribal protocols are the primary IRS point of contact for all interactions with federally recognized Indian tribes and are responsible for:

ITG specialists are specially trained in the unique areas of tax law and protocols applicable to Indian tribes.

To alleviate potential problems and ensure that the IRS complies with existing legal requirements, all IRS employees must contact Indian Tribal Governments before initially contacting any Indian tribal government/enterprise account(s). Sometimes, a tribe may request that all IRS employees get the tribe’s approval before entering tribal lands when conducting IRS business.

When the IRS issues a Declaration Notice under IRM 25.16.1.5.3, Internal and External Notification Process, a freeze code is placed on all IMF and BMF accounts with addresses in the area affected by the federally declared disaster (the "covered disaster area" ) designated by FEMA as qualifying for "individual assistance" for the period specified in the Declaration Notice (the "postponement period" ).

An affected taxpayer under IRM 25.16.1.3, Identification of Covered Disaster Area, Postponement Period, and Affected Taxpayers, may contact the IRS to self-identify as eligible for relief under a Declaration Notice.

Use Letter 6017, Taxpayer Contact after Disaster - TE/GE, from the IRS, for cases in status 12, when communicating with affected taxpayers. Be considerate and sensitive to personal circumstances such as stress and fatigue even if the taxpayer didn’t experience any personal, monetary, or physical damage from the declared disaster.

Include Notice 1155, Disaster Relief from the IRS, in any subsequent correspondence (such as IDRs cancelling an appointment, postponing an IDR deadline, or requesting additional information when the taxpayer opts out of the postponement period) that you send to the taxpayer/POA during the postponement period.

Cases not subject to suspension of examination activities:

If you have been assigned a case and you have not contacted the taxpayer, do not make contact. Place the case in status 38 suspense, cease all activity until the first business day after the close of the postponement period and document the CCR.

Cases in development:

Cases in 30-day processing (preliminary notice of deficiency, revocation or non-qualification) offering opportunity to appeal:

If Mandatory Review issued a 90-day letter before the postponement period, and the 90-day period will end within the postponement period:

If Mandatory Review issued a 90-day letter before the postponement period, and the 90-day period ended before the postponement period, the defaulted notice of deficiency can be assessed. However, you must contact the FAST Unit to re-input the disaster-related freezes with the original suspension start and end dates to delay collection actions.

You must suspend the following activities during the postponement period:

Secure approval from your Area or Program Managers to solicit a consent to extend the statute. If you solicit a statute extension, follow the procedures in IRM 4.70.12.3.7, Statute of Limitations and Statute Control Procedures.

If your Area or Program Managers approves a statute extension during the postponement period, document the CCR accordingly.

If you can’t contact the taxpayer or the taxpayer refuses to extend the statute of limitations, close the case to Mandatory Review or the Closing Unit following the procedures in IRM 4.70.14.3.4, Unagreed Resolution.

Federally authorized practitioners are individuals authorized to practice under 31 U.S.C. 330. Generally, this means attorneys, CPAs, enrolled examiners, enrolled actuaries and enrolled retirement plan examiners as set forth in Circular 230.

Refer to TEGEDC questions as to whether the taxpayer confidentiality privilege applies to communications made to other individuals.

The term “tax advice” means advice given by an individual with respect to a matter which is within the scope of the individual’s authority to practice before the IRS per IRC 7525(a)(3). Information disclosed for the purpose of preparing a tax return would not be privileged. This provision was not intended to provide tax practitioners a greater privilege than currently exists between attorneys and their clients.

The American Jobs Creation Act of 2004 amended IRC 7525(b) by stating that the federally authorized tax practitioner privilege doesn’t apply to any written communication in connection with the promotion of the direct or indirect participation of the person in any tax shelter between a federally authorized tax practitioner and any person, director, officer, employee, agent, or representative of the person.

In general, communications from a taxpayer to an attorney made in confidence while obtaining legal advice are privileged. The attorney can’t be compelled to disclose that information to the IRS. The privilege is a provision of common law upheld by the courts.

If the taxpayer creates records to facilitate the exchange of privileged communications with a federally authorized tax practitioner, those records are privileged.

If a taxpayer turns over pre-existing records to a federally authorized tax practitioner, the IRS can obtain those records by summons, unless the records were otherwise privileged from production while in the taxpayer’s possession.

A federally authorized tax practitioner’s client in an examination may be any officer or employee of the taxpayer. You can obtain underlying factual information from the employees whether they’ve communicated this same information to the taxpayer’s federally authorized tax practitioner.

The taxpayer confidentiality privilege is not all-inclusive and does not protect everything a federally authorized tax practitioner may do for a client. The privilege is limited to communications the client made in confidence to obtain legal advice from an attorney, or to obtain tax advice from a non-attorney federally authorized tax practitioner.

The following items are also not covered by the taxpayer confidentiality privilege:

The preparation of a tax return is primarily an accounting service. The taxpayer confidentiality privilege does not cover:

An officer, director, trustee, or representative may attempt to hinder or halt an examination by various methods, including:

The person can assert these privileges orally or in writing.

A person can’t successfully refuse to testify or provide information solely based on the facts that he/she stands in a confidential relationship with another person. The burden is on the witness to:

The federal tax practitioner-client privilege may only be asserted in:

The federal tax practitioner-client privilege may not be asserted to prevent disclosing of information to any regulatory body (i.e., the Securities and Exchange Commission) other than the IRS, including in an administrative or court proceeding.

When a taxpayer or federally authorized tax practitioner declines to provide testimony or documents citing IRC 7525 confidentiality privileges as the reason:

See IRM 4.10.1.2, Taxpayer Rights, and IRM 5.17.6, Legal Reference Guide for Revenue Officers, for additional information, including court case citations and additional analyses.

Employees working tax related inquiries must provide taxpayers with information to identify the appropriate employee who can address any further questions (Section 3705 the Restructuring and Reform Act of 1998 (RRA ‘98)).

For face-to-face and telephone contacts, all the IRS employees will provide the following information:

For all manually generated correspondence sent to a taxpayer, all IRS employees will provide the following information:

Employees must repeat their name and unique identification number (Smart ID card badge number) to each new and subsequent contact made during the work assignment.

Examiners should document their CCR with the person’s name, title and date when you gave them your contact information.

If a case is reassigned to another examiner, the new examiner must also give their name and unique identification number (Smart ID badge number) to the taxpayer.

Examiners should ensure verbal communication is firm, courteous, and professional by:

Answering machines and voice mail are frequently used when communicating with taxpayers, representatives, and other IRS employees. These systems are not secure and may not be used to transmit sensitive information, including tax information, except under the provisions of IRC 6103. Guidelines for leaving information on answering machines/voice mail are located in IRM 10.5.1.6.7.2, Answering Machines or Voice Mail.

Written communication to the taxpayer or representative must:

All correspondence must contain the name of the person to contact (examiner or group manager depending on the type of letter), telephone number, unique identification number, and a signature.

When possible, all correspondence with taxpayers should be prepared using approved form letters, since the specific language in these documents has been approved for general public use.

All correspondence generated by examiners is considered manually generated correspondence.

If mail is returned as undeliverable after the case is closed, follow the procedures in IRM 4.70.11.8.3.1, Returned or Undeliverable Mail.

IRC 6103 provides details on the confidentiality and disclosure rules that must be followed when working with taxpayer return or taxpayer return information. Examiners must remember to protect tax information when using the fax machine or EEFax, which provides the ability to send, receive, route and deliver fax documents electronically using Microsoft Outlook.

See IRM 4.10.1.3.6, Use of Fax Machine or Enterprise e-Fax (EEFax) for Outgoing Taxpayer Communications. See IRM 4.10.1.3.7, Policy for Use of Fax in Taxpayer Submissions.

Examiners may send and receive emails from the taxpayers or POA; however, the procedures found in IRM 10.5.1.6.8, Email, and IRM 10.5.1.6.9, Other Forms of Transmission, must be followed.

This section contains guidance regarding the appropriate use of electronic signatures on letters, forms and other documents.

To sign documents electronically, the following procedures must be followed to comply with the Government Paperwork Elimination Act (GPEA):

Examiners and managers should use Adobe to create digital signatures that meet the requirements of GPEA. Adobe can create a digital signature that displays the signer’s Standard Employee Identifier (SEID), typewritten name, or an image of the signer’s handwritten signature. For assistance in creating digital signatures, including a graphical image of a handwritten signature, refer to the IT4U Self Help Website, and type in Adobe in the Search field, then select the appropriate option based on the Adobe version.

Internal use documents can be signed electronically by using a digital signature that displays the signer’s SEID or typewritten name.

Generally, letters, forms and other documents issued to the taxpayer and representative can be signed digitally. However, the digital signature should display an image of the signer’s handwritten signature in the signature block. Under no circumstances should a letter or document provided to the taxpayer reflect the SEID as the signature.

For additional details refer to IRM 10.10.1.3, IRS Electronic Signature (eSignature) Program.

The taxpayer's and representative’s dated signatures are required. An electronically signed, printed or stamped signature is not acceptable. A hand printed (not typed) signature is acceptable.

See IRM 21.3.7.5.1, Essential Elements of Form 2848 and Form 8821 and IRM 21.3.7.1.4, Taxpayer Digital Communication (TDC) CAF Overview for more information.

The office of ITG will provide assistance throughout Indian country as needed.

The objective of this individualized assistance is to increase voluntary compliance by helping our customers to understand, implement and fulfill their responsibilities. Help may be by phone, correspondence, email, fax, or face-to-face.

If the customer is having difficulty resolving a tax situation, consider whether the situation meets Taxpayer Advocate criteria. See IRM 13.1.7, Taxpayer Advocate Case Procedures and Pub 1546, Taxpayer Advocate Service - We Are Here to Help You.

Customers can also get educational materials and answers to questions about federal tax matters by contacting the office of Indian Tribal Governments in the following manner:
Visit: ITG website at www.irs.gov/tribes
Call: Customer Account Services:
Toll-free 877-829-5500
Not Toll-free 202-317-8900
Fax: Toll-free 855-243-4024

Write:

Before you issue an initial IDR, you should:

Identify alternate means to obtain the needed records.

Preparing the initial IDR:

After securing the information from the initial IDR, it may be necessary to secure additional information. A subsequent IDR should be prepared.

Prior to issuing a subsequent IDR, you and the taxpayer should agree on a response due date.

You may mail, EEFax or hand deliver an IDR that is issued after the initial appointment letter.

As a best practice, call the taxpayer (or POA if there is one) two to three business days prior to the IDR response due date.

When the taxpayer responds to your IDR, review the response within 10 business days of receipt.

If the taxpayer’s response is complete:

If the taxpayer’s response is incomplete or they fail to respond:

If the taxpayer fails to respond to the first extension in IRM 4.70.13.9.3(3), Manager Approval, or if the response is still incomplete you may:

Make every effort to review IDR responses within 10 business days of receipt of documents.

Notify the taxpayer of your review.

If the requested information is not received after a second extension, begin the Enforcement Process.

IDRs must comply with the general IDR procedures before the IRS can issue a summons. The process for enforcing delinquent IDRs from delinquency to summons issuance has three graduated steps:

This process is mandatory and has limited exceptions. It requires managers at all levels to be actively involved early in the process. This ensures that Counsel is prepared to support IDRs through the issuance of a summons when necessary.

The following may be designated in a TIA:

The persons who may be designated as a representative under a POA, as listed and fully described on Form 2848, include:

In Part II, Declaration of Representative of Form 2848, the representative(s) must list the following information in the Designation column:

Only individuals who are recognized to practice before the IRS and aren't under suspension or disbarment from practice can be designated as a recognized representative. Corporations, associations, partnerships, and other persons who aren't individuals can’t be appointed as a recognized representative.

Check to see if the representative has a current, active license using these resources:

If the officers or authorized officials of the entity designate a company employee to represent the taxpayer during the examination, obtain Form 2848 for that employee.

Any person allowed to perform "limited practice" per section 10.7(c)(1) of Product Catalog Information (irs.gov)Circular 230 must be designated on a Form 2848.

If a representative, appointed by the taxpayer, is not qualified to sign Part II of Form 2848, return the form to the taxpayer. You must not treat an invalid Form 2848 as authority for the individual to receive tax information.

For TEB: Issuers and conduit borrowers use Form 2848, Power of Attorney and Declaration of Representative, to authorize an attorney or other qualified person to represent them before the IRS. See IRM 1.25.1, Rules Governing Practice Before the IRS. You may need to solicit a Form 8821, Tax Information Authorization, from the issuer or conduit borrower. This form authorizes the designated individual to receive or inspect tax return information but will not authorize the designee to represent the issuer or conduit borrower before the IRS. Situations requiring a Form 8821 include but are not limited to:

A valid Form 2848 or Form 8821 should contain the following information:

The Centralized Authorization File (CAF) function doesn’t process Forms 2848 submitted using a version older than the October 2011. So, if a POA submits an obsolete form, ask them to resubmit using the most current revision.

Review the form for completeness and validity. For a list of required elements, see IRM 21.3.7.5.1, Essential Elements for Form 2848 and Form 8821. Elements specific to TE/GE Taxpayers are tabled by function in Exhibit 4.70.11-1, TE/GE Form 2848 and Form 8821 Specific Elements by Function.

Taxpayers and representatives may not use signature stamps when signing POA/TIA forms. Original signatures are required.

IRS accepts a faxed POA/TIA form and generally recognizes it. If there is some indication of forgery, the representative can be required to produce the original form.

If the taxpayer wants the representative or designee to receive correspondence from the IRS, he/she must check the box in Part I, Item 2 of Form 2848 (below the representative's name and address) or Item 2 of Form 8821. Only two representatives will receive correspondence.

The IRS will accept a non-IRS form. See IRM 21.3.7.5.1(5), Power of Attorney and Form 2848, for a list of the required information.

A signed and dated statement made by the representative should also be attached to the non-IRS form. The statement must contain the same declarations contained in Part II of Form 2848.

"Pen and ink" changes to Form 2848 or Form 8821 are not acceptable. If you discover imperfections, you must request that the taxpayer submit a new form.

Verify that the individual shown as the representative is in good standing to practice before the IRS by using IDRS Command Code CFINK.

If you receive a form that doesn't contain all the required items, it is invalid. If the form doesn't include all the types of tax, form numbers, and years or periods under examination, the form won't be valid for the missing types of tax, forms and/or tax years or periods. If there is missing information, contact the taxpayer or representative/designee and discuss the missing information.

In addition to following the above guidelines for Disclosure of Official Information, there are specific requirements when working with Indian Tribal Governments.

If a Form 2848 or Form 8821 is complete and valid, complete the block labeled "For IRS Use Only" with the examiner's name, phone number, function, and date the form was received.

If a non-IRS POA form is complete and valid, date stamp the front of the form. Attach a completed Form 2848, with "IRS Use Only" section filled with examiner's name, phone number, function, and date so the form can be processed to the CAF system.

If a non-IRS TIA form is complete and valid, date stamp the front of the form. Attach a completed Form 8821, with "IRS Use Only" section filled with examiner's name, phone number, function, and date so the form can be processed to the CAF system.

In the top margin of the form notate the date the form was sent to the Service Center and the name of the specific Service Center.

Fax a copy of Form 2848, Form 8821 or non-IRS forms, to the Service Center reflected in the table below as soon as possible. Please see the table for specific elements for each TE/GE function in Exhibit 4.70.11-1 below for instruction.

If the CAF unit rejects the form, they issue Letter 861-C to the taxpayer. IDRS command code ENMOD indicates a notice was sent.

Note in the CCR (EP, EO, TEB) or the Examining Officer’s Activity Record (FSL/ET and ITG) the date the form (Form 2848 or Form 8821) was received and the date it was sent to the Service Center.

Maintain copies of all secured Forms 2848 (or Form 8821) in the RCCMS Office Documents folder when you close the case, use the RCCMS naming convention.

Valid POA and TIA forms submitted by a taxpayer are always required to be honored unless the criteria for bypassing are met. See IRM 4.70.11.10.8.1, Bypass Procedures.

Send correspondence and notices to the taxpayer and the authorized representatives/designee as requested in Part 1, Item 2 of Form 2848, per 26 CFR 601.506(a).

Send copies of correspondence and other written communications to the authorized designee if Form 8821 item 2 is checked, or if the TIA is submitted in a document other than Form 8821, the document specifically requests copies be sent to the appointees.

Use Letter 937-A, Transmittal of Information to Power of Attorney, to transmit correspondence to a POA.

Blank forms, notices, and publications available on irs.gov should not be sent to the taxpayer’s representative or designee.

If you expand the examination scope to include additional tax periods or different returns, notify the taxpayer. Give the taxpayer time to secure a new form to cover the additional periods or different return before you take any examination action. A new form should be submitted with the additional periods or different return, signed by both the taxpayer (or officer of the entity) and the representative/designee. If the taxpayer chooses not to have representation or designee for those additional periods/returns, then examination information for those periods/returns won't be disclosed to any person other than the taxpayer.

If the taxpayer chooses to revoke an existing POA and not name a new representative, they must send a copy of the previously executed power of attorney to the IRS along with a cover letter. The taxpayer must:

If the taxpayer chooses to revoke an existing TIA and not name a new designee, they must send a copy of the previously executed Form 8821 to the IRS along with a cover letter. The taxpayer must:

If a representative wants to withdraw from representation, they must send a copy of the previously executed power of attorney to the IRS along with a cover letter. The representative must:

The taxpayer/representative must send the statement of revocation/withdrawal to the TE/GE group responsible for the case.

The examiner or manager will forward the revocation/withdrawal request to the applicable Service Center.

The filing of a Form 2848 automatically revokes all previously submitted Forms 2848 for the same tax matters and years or periods covered unless the box in item 6 of the Form 2848 is checked.

The filing of a Form 8821 automatically revokes all prior TIAs on file unless the box on line 5 of Form 8821 is checked.

If the taxpayer wants to keep previous representatives, they must check the box in Item 6 on Form 2848 and attach copies of the applicable Forms 2848 for those representatives to the new Form 2848 being submitted.

If the taxpayer wants to keep previous designees, they must check the box in Item 5 on Form 8821 and attach copies of the applicable Forms 8821 for retained designees to the new Form 8821 being submitted.

Form 2848 or Form 8821 can indicate a specific use by making an entry on line 4 for a specific issue authorization. For examples of specific-use authorizations, see IRM 21.3.7.8.12, Specific Use Authorizations.

If you receive a specific-use POA/TIA form, save a copy in the RCCMS Office Documents folder indicating its relation to specific documents. The representative keeps the original form. Specific-use forms aren't recorded on the CAF system and therefore, don't have to be forwarded to a CAF unit. A specific-use form doesn't revoke any prior POA/TIA forms.

IRS employees are authorized to accept a taxpayer's verbal consent to disclose return information to parties helping the taxpayer to resolve a federal tax matter (26 CFR 301.6103(c)-1(c)(2)). The regulation also clarifies that the taxpayer can verbally approve IRS disclosures to someone accompanying the taxpayer at in-person meetings with the IRS or participating in a phone conversation between the taxpayer and the IRS.

See IRM 11.3.3.2.1, Requirements for Oral Authorization for procedures on verbal authorizations.

IRC 7521(c) states that an examiner, with the approval of the group manager, may notify the taxpayer directly that such officer or employee believes such representative is responsible for unreasonable delay or hindrance of an IRS examination or investigation of the taxpayer.

If taxpayer notification does not resolve the delays, the procedures to by-pass the power of attorney (POA) permit the examiner to contact the taxpayer directly and to request any information necessary to complete the examination. See IRM 4.11.55.4, Examining Officers Guide, Power of Attorney Rights & Responsibilities, By-Pass of a Representative.

Under the "By-Pass Procedures" the POA continues to represent the taxpayer, and you must send all correspondence issued to the taxpayer to the representative. The taxpayer may at his/her discretion forward the requested information/documentation to you through the representative.

The by-pass procedures do not constitute a disbarment or a suspension of the practitioner. The taxpayer still has a statutory right to representation per IRC 7521(c).

To properly develop examination issues sometimes you may need to request:

Use collateral examinations when:

A collateral examination is justified when:

ITG specialists trained in tribal protocols are the primary IRS point of contact for all interactions with federally recognized Indian tribes and are responsible for:

ITG employees are specially trained in the unique areas of tax law and protocols applicable to Indian tribes.

To alleviate potential problems and ensure that the IRS complies with existing legal requirements, all IRS employees must contact the Office of Indian Tribal Governments before initially contacting any Indian tribal government/enterprise account(s). Sometimes, a tribe may request that all IRS employees get the tribe’s approval before entering tribal lands when conducting IRS business. Contact: The IRS Office of Indian Tribal Governments.

Because ITG coordinates all aspects of tax administration impacting tribes, ITG entered into a Memorandum of Understanding (MOU) with these parts of Small Business/Self-Employed (SB/SE) for the following:

ITG interacts with other IRS offices:

When making referrals within the IRS, research IDRS before you initiate a referral to see if the taxpayer is currently under examination in another business operating division. If so, contact the examiner to exchange information.

Refer issues not within the scope of the current examination using a Form 5666, TE/GE Referral Information Report. “Complete Form 5666: IRM Exhibit 4.5.1-12” to “Complete Form 5666. IRM Exhibit 4.5.1-12 for instructions for preparing Form 5666.”

As part of an examination, the examiner must determine whether an issue exists on a return that is not under the jurisdiction of their functional area.

When dealing with referrals, this section covers the responsibilities of:

Referrals should be made as soon as possible during the examination but no later than 30 days after you identify an issue.

Save a copy of any applicable referral forms in the RCCMS Office Documents folder using the RCCMS Naming Convention.

Indicate on RCCMS 3198-A Checksheet that the case file contains referral information.

Document in the CCR the actions taken in making any referral.

Complete Form 5666. See IRM Exhibit 4.5.1-12, Instructions for Preparing Form 5666, TE/GE Referral/Information Report.

Securely email Form 5666 to Classification at *Manager EO Classification. Include a description of the referral, e.g., EP Referral, EO Referral, LB&I Referral, SBSE Referral, etc., in the subject line of the email.

After making the referral, keep the case open until you receive feedback from the Business Unit or 20 workdays, then close the case.

Use Form 8484, to report a complaint of suspected cases of misconduct by tax practitioners (attorney, CPA, enrolled agent, enrolled actuary, or enrolled retirement plan agent.

Use Form 5666, to report a complaint about an unenrolled return preparer’s conduct to SB/SE Area Planning and Special Programs Office.

EOE - Mandatory to prepare a referral requesting SB/SE Excise Tax using SRS for:

Referrals to EP Determinations:

Referrals to EP Examinations:

Fraud Referrals:

Promoter and Abusive Transaction Referrals:

Tax Exempt Bonds:

Emerging Issues:

Exam Functional Units:

For assistance from another Business Unit when a referral is not warranted, use the Specialist Referral System (SRS) online at the SRS home page. See IRM 4.70.12.3.5, Specialist Referral System.

If the taxpayer refuses to file a required return and the return is:

Department of Labor/Employee Benefits Security Administration (DOL/EBSA):

Pension Benefit Guaranty Corporation (PBGC).

When a group receives a referral, the manager should immediately evaluate and assign the case.

The examiner responsible for the case will contact the EFU examiner, Determinations specialist, ep/EO Examinations, FSL/ET, ITG, TEB examiner, or EBSA investigator within 30 workdays of the group's receipt of Form 4632 Employee Plans Referral (with checksheet 4632-A, 4632-B, or 4632-C, as applicable), Form 5346 Examination Information Report, Form 5666 TE/GE Referral Information Report or Form 6212-A Examination Referral Checksheet A if the related case is being held open in the EFU or in EBSA.

If a related examination is open in EP, EO, FSL/ET, ITG, TEB, EBSA, or an EFU, or determination is open in EP or EO Determinations, make every attempt to resolve every issue within 90 days of your group’s referral receipt. If the case is not closed within 90 days, the group manager should contact the referring group manager to update them on the status of the examination.

Examiner: Once you resolve the referral:

If a TE/GE function receives a referral directly from one of those listed here, then the group should email referrals to the TE/GE Referrals group in Classification at the email address in paragraph (4) of IRM 4.70.11.15.3, General Referral Process within the IRS.

If a referring entity does not prepare a referral form, the receiving group should prepare the applicable referral form and send it to the TE/GE Referrals group.

An examiner will prepare and mail Letter 4426 Acknowledging Receipt of Information from Third Party about Tax Exempt or Government Entities if classification doesn’t prepare the letter for referrals received by TE/GE from the public or other government entities.

Do not begin any compliance activity for a referral unless you receive it from Classification or Classification approves the decision to examine.

These procedures apply to EP Large Case Support Examinations coordinated with LB&I or EO Exam.

The three types of EP Large Case Support Examinations are:

Every EP Large Case Support Examination with LB&I or EO Exam requires examiners to complete and include an exam plan in the EP examination case file, which at a minimum should describe the extent of the EP examination activity.

After debriefing, taint review, and selection for examination, CP&C, Classification and Case Assignments (C&CA) assigns the case to an examination group.

When the examination group receives a WB examination case, the group manager must contact the appropriate C&CA manager to request the WB electronic file be sent to the group. The group will generally receive two files:

An ICE indicator code “1” will be on the primary return on AIMS. The freeze code will need to be changed on AIMS as shown below, before the case can be closed from group level.

Except as detailed below, follow the normal examination procedures.

The WB case file instruction should be in the WB case file. This document gives the examination group basic procedures and guidance for the WB aspects of the examination.

WB communications are confidential. If there are paper files, transmit all claims, reports, and information from office to office in double sealed confidential envelopes marked, “To be Opened by Addressee Only” and keep them locked in file cabinets. Use secure email for all electronic submissions.

Keep all WB information separate from the examination case file. If there is a hard copy WB case file, keep it locked up when not in use.

DO Not mention the WB in either the examination case file in RCCMS or in the hard copy examination case file. This includes not mentioning the existence of a WB in any of the examination files such as the Case Chronology Record and workpapers. The taxpayer can’t be informed there is a WB.

The examiner shouldn’t make any contact with the WB. If the examiner wants to interview the WB, contact your WB Coordinator.

Develop the issues by seeking independent corroboration and/or refutation of the WB provided information. Independently developed information must form the basis for any proposed adjustments.

Electronically prepare Form 11369, Confidential Evaluation Report on Claim for Award, when the examination is fully concluded, but prior to final closing. You and your manager must sign the form.

The WB Office uses information on Form 11369 Confidential Evaluation Report on Claim for Award, as well as any relevant workpaper information to determine if an award is paid.

DO NOT leave WB information or references to a WB in the closed examination case file; even if you close the case unagreed.

If the examination case file is going to Appeals, DO NOT include any WB information or the Form 11369 Confidential Evaluation Report on Claim for Award in the examination case file sent to Appeals.

WB Awards must consider proceeds, which may include penalties, fines and forfeitures. See IRC 7623(c).

If the WB claim has any actions outside of U.S. Code Title 26, like Title 18 or Title 31, attach additional information to Form 11369 Confidential Evaluation Report on Claim for Award, that documents:

Refer to the Whistleblower Office website for additional guidance.

A Category “A” case is any WB Claim that isn’t a Category “B” case.

If you open additional years or returns, contact the Informant Claims Examination (ICE) unit to add the ICE indicator on AIMS for the additional years or returns. Find the contact information for the ICE unit in the instructions for Form 11369 Confidential Evaluation Report on Claim for Award.

If at any time, the amount of potential proceeds (e.g. taxes, interest and penalties) is $2 million or more, contact the WB Coordinator.

After you prepare Form 11369 send the following information to the ICE unit:

The WB Coordinator reviews the information, makes sure it’s complete, then sends it to the WB Analyst.

Once the ICE unit has all the necessary information, they change the ICE indicator to “2”. Once the indicator is changed, close the case under normal closing procedures.

A Category “B” case is one in which the proceeds in dispute exceed $2,000,000. In the case of an individual, the individual’s gross income must also be greater than $200,000 for any taxable year subject to the action. An informant submits Whistleblower (WB) claims on Form 211, Application for Award for Award for Original Information.

WB claims are either “A” or “B” Claims. These letters refer to the applicable sub-sections of IRC 7623. A WB action against an individual is only a “B” case if the individual’s gross income exceeds $200,000 for any taxable year subject to the action.

If you open additional years or returns, contact the WB Coordinator. The Coordinator will contact the ICE unit to add the ICE indicator on AIMS for those additional year or returns.

After Form 11369 Confidential Evaluation Report on Claim for Award is prepared and the examiner has ensured that no WB materials remain in the case file, the following information is sent to the WB Coordinator:

The WB Coordinator reviews the information, makes sure it’s complete, then sends it to the WB Analyst.

Once the WB Analyst has all the necessary information, they change the ICE indicator to “2.” Once the indicator is changed, close the case under normal case closing procedures.