Promote the highest degree of voluntary compliance with the tax laws on plan qualification.

Determine qualified plans’ extent of compliance and the causes of noncompliance with the tax laws.

Determine whether such plans meet the applicable qualification requirements in operation.

Given broad authority to consider and weigh conflicting information, data, and opinions.

To use professional judgement according to examination standards to make findings of fact and apply the IRS’s position on issues of law to determine the correct tax liability.

To exercise this authority to obtain the greatest number of tax determination agreements without sacrificing the quality or integrity of those determinations and to dispose of tax differences at the lowest level.

Mandatory Review, see IRM 4.71.14, Employee Plans Examination of Returns, EP Mandatory Review.

Special Review, see IRM 4.70.7, Special Review (SR) and Tax Exempt Quality Measurement System (TEQMS) Procedures.

Analyzing plan and trust bank and other financial accounts and records

Assisting with the computation of criminal tax liability for the Special Agent's Report (SAR)

Computing civil tax liabilities addressed by EP for a pre-prosecution report

Determining if the plan secured a favorable determination letter

Determining if there is any unrelated business taxable income

Determining if there are any transactions that may give rise to excise tax

Determining plan form and operational issues that affect the plan’s qualified status under IRC 401(a) and the trust’s exempt status under IRC 501(a)

Examining plan and trust books and records to determine adjustments

Maintaining a chronological record of time charged to the case

Participating in interviews of the taxpayer and witnesses

Preparing an administrative file and an administrative record prior to placing case in fraud suspense

Protecting the statute of limitation (SOL)

Providing original tax returns to the Special Agent (SA) within 30 days of the joint investigation initiation or when received

Reconciling the plan and trust books and records to the return

Reviewing the handling of the plan and trust assets

Reviewing prior and subsequent period returns, and related returns for examination potential

Verifying assets held by the plan and trust

Arrests

Computing the criminal tax liability

Conducting necessary surveillance and undercover work

Developing and documenting evidence of intent

Executing search warrants and/or seizures of property

Obtaining testimony of witnesses

Preparing and issuing Form 2039, Summons

Providing the agent with copies of original tax returns for all open periods and related taxpayers within 30 days of the joint investigation initiation or when received

Advising the “non-custodial rights" as it relates to a jointly-conducted interview of the subject during the course of an investigation.

Scheduling and prioritizing investigative actions

Ensuring both the SA and EP agent are present at taxpayer and witness interviews when feasible

Planning the joint investigation

Using non-technical employees to perform voluminous and/or clerical tasks

Coordination of related investigations with other field offices (venue issues, similar investigative agendas/plans)

Discussions of civil actions (statute extensions, statutory notices of deficiency, prior/subsequent year and related return considerations)

Investigative obstacles (technical issues, noteworthy defenses)

Planned activities of both the SA and the cooperating EP agent

Status/progress of the investigation

Secure all returns related to those included in the joint investigation, including prior and subsequent year returns and related returns, and review them for examination potential.

Determine if examination controls need to be established for an initial year examination, prior or subsequent year examinations or any related examinations.

Ensure administrative actions on prior and subsequent year returns and related returns do not imperil a prosecution before establishing any examination controls. Establish examination controls only after securing CI’s approval.

See IRM 4.71.1.14.1, Prior Year, Subsequent Year and Related Returns, for instructions for opening a Form 5500 examination.

See IRM 4.71.5, Employee Plans Examination of Returns - Form 5330 Examinations, for Form 5330 examination procedures.

See IRM 4.71.10, Employee Plans Examination of Returns - Form 990-T Examinations, for Form 990-T examination procedures.

Secure CI's approval prior to establishing the return(s) on AIMS.

Request Master File controls of the return after securing CI’s approval by submitting a request to EP Classification to establish the return.

See IRM 4.71.25.7.4, Prior, Subsequent and Related Returns including the Use of Form 10498-A, and IRM 4.4.9.2.3.1, CI Freeze, for further information.

Secure CI's approval prior to establishing the return(s) on AIMS.

Request Master File controls of the return after securing CI’s approval by submitting a request to EP Classification to establish the return.

Use push code 049 (Joint Investigations/CI Freeze) to overcome a TC 914/-Z freeze on the module. This push code should be used only if there is a TC 914/-Z freeze on the return module and after consultation with the EP SME.

The IRC 6501(a) statute (three-year statute for filed returns) expires three years after the date the tax return was due or filed, whichever is later.

If the three-year SOL has expired or the taxpayer refuses to extend the period for assessment, the six-year SOL (omission of income in excess of 25% of reported gross income), under IRC 6501(e), should be considered. See IRM 4.71.25.7.7.1, Six-Year Statute of Limitations, and IRM 25.6.22.6.17.2, More Than 25% Omission of Gross Income.

All efforts should be made to secure the taxpayer's consent to extend the period for assessment before the normal three-year SOL expires (or six-year if the three has already expired). The fraud SOL under IRC 6501(c) should be relied upon only as a last resort.

The completed Form 10498-B will be sent by your group manager to your Area Manager for signature. The EP SME can help you complete and forward this form. See IRM 4.71.25 Exhibit 13 at IRM 4.71 - Employee Plans Examination Exhibits for an example of a completed Form 10498-B.

The Area Manager will forward the signed Form 10498-B to the SAC to request a decision on EP’s intent to solicit the taxpayer's consent to extend the statute of limitations period for assessment or on EP’s intent to issue a notice of deficiency.

CI must accept or decline the request within 10 workdays after receipt of the Form 10498-B.

Any required statute updates must be made on AIMS through RCCMS. See IRM 4.71.9, Employee Plans Examination of Returns, Statute Control Procedures and the Form 10498-B instructions for the procedures used to extend the period for assessment.

If the statute is being extended for a trust, including the statute for the Form 5500/1041 or Form 990-T, use Letter 907-A, Request to Extend Statute, Form 56, Notice Concerning Fiduciary Relationship, and Pub 1035, Extending the Tax Assessment Period.

If the statute is being extended for Form 5330, Form 1040 or Form 1120, use Letter 907-A and Pub 1035.

If the consent is solicited by mail, send Letter 907-A, Form 56 (if applicable), and Pub 1035 to the last known address of the taxpayer.

Document solicitation of the consent and the required notification of taxpayer's rights on Form 5464 and Form 895-EP, Notice of Statute Expiration. See IRM 4.71.9, Employee Plans Examination of Returns, Statute Control Procedures, and IRM 25.6.22.5.11, Extension of Assessment Statute of Limitation By Consent.

A copy of Letter 907-A, Form 56, (if applicable) and Pub 1035 must be maintained in the case file and in the electronic RCCMS. Any subsequent inquiries received from the taxpayer should be referred to the SA assigned to the case.

CI should be informed of the results of solicitation of the taxpayer's consent.

This decision must be approved by the EP agent’s Area Manager. TE/GE Division Counsel may need to be consulted.

Document the decision in the Form 5464 and on Form 895-EP.

Refer to IRM 4.71.25.7.4, Prior, Subsequent and Related Returns - Including the Use of Form 10498-A, IRM 25.6.23.6.6.2, Reliance on IRC Provisions Which Extend Normal Assessment Statute, and IRM Exhibit 25.6.23-3, Instructions for Updating the Statute on AIMS.

Attach the properly executed Form 10498-B to page two of the applicable return.

Update the SOL immediately on AIMS through RCCMS using the appropriate alpha code (if applicable). Consult TE/GE Division Counsel if there are any questions concerning the statute.

Update Form 895-EP to reflect the correct statute expiration date using the procedures in IRM 4.71.9.4, Agent Responsibilities and Procedures.

If Cl withdraws from the joint investigation, the SA will notify all cooperating agents and their group managers by preparing a discontinued investigation report stating the reason(s) for the withdrawal. CI will notify SB/SE Technical Services (TS) of the formal closing of the criminal case by use of Form 13308, Criminal Investigation Closing Report (Tax and Tax Related Only), and advise that civil actions on the case should resume. See IRM 4.71.25 Exhibit 15 at IRM 4.71 - Employee Plans Examination Exhibits for a copy of this form.

CI will notify EP of the discontinuance through a centralized TE/GE mailbox or at least through the required quarterly conference, and provide a copy of the Form 13308 package to the TE/GE Fraud Specialist or EP SME.

The TE/GE Fraud Suspense Coordinator will return the suspended case to the field with a memorandum explaining the required procedures for civil resolution.

If EP is proposing income tax adjustments, prepare Form 4549-E and an RAR on Form 886-A, Explanation of Items, explaining all tax adjustments and penalties in detail. The top of the report should be labeled "Pre-Prosecution Report" . See IRM 4.71.4.4.5, Employee Plans Examination of Returns, Discrepancy Adjustments for additional information on the preparation of this type of report.

If EP is proposing excise tax, prepare an RAR on a Form 886-A, explaining all excise tax and penalties in detail. See IRM 4.71.5.9.1.1, Revenue Agent Report (RAR), for additional information on the preparation of this type of report.

With TE/GE Division Counsel’s approval, civil fraud penalties and/or fraudulent failure to file penalties should be asserted for all applicable years. TE/GE Division Counsel’s approval of the assertion of these penalties should be documented in the Form 5464. Accuracy-related and/or delinquency penalties should be proposed as an alternative position.

Sufficient documentation in the workpapers to fully support the adjustments and penalties in the RAR. See IRM 4.71.25.7.9, Preparation of the Pre-Prosecution Report, for additional information on report preparation

Original tax returns or documented requests for the tax returns, if they are not already in the possession of CI or TE/GE Division Counsel and Counsel has concurred in requesting the returns.

A signed Form 2797 reflecting "Accepted for Investigation" by CI

A current transcript (that may or may not reflect a TC 914) for each tax period in the case file

Copies of sensitive documents should have a Form TDF 15-05.11 attached and must not be included in the workpapers. Examples of SBU data include fraud referrals and informant data. The workpapers should make no mention of an informant or specific agencies.

If the Form 4665 contains confidential information, it should be placed into a confidential envelope with a Form TDF 15-05.11 attached to the envelope

Documentation of the manager’s approval of the case file’s readiness to be placed into suspense.

If there is not at least one year remaining on the SOL, you should secure joint approval (CI and EP) for the Service's reliance on the fraud statute (IRC 6501(c)(1) and/or IRC 6501(c)(2)) to keep the civil action (assessment and right to collect) open. See Form 10498-B and paragraph (4) of IRM 4.71.25.7.7, Statute Protection - Including the Use of Form 10498-B, for detailed instructions.

Advise the TE/GE Fraud Suspense Coordinator if you are unable to ensure that there is more than a one year remaining on the SOL for any year before transferring the case to the TE/GE FSU.

The group will transfer the case in its current AIMS status code to TE/GE FSU.

The Manager, CP&C (or designee) will accept the transfer and assign the case(s) to the TE/GE Fraud Suspense Coordinator.

The TE/GE Fraud Suspense Coordinator will review the case for statute considerations within three business days, using a review template specific to this purpose. The results of the statute review will be forwarded to the Manager, CP&C by the end of that three-day period.

The TE/GE Fraud Suspense Coordinator will review the file for readiness to be placed into fraud suspense.

If the case is ready to be placed into administrative fraud suspense, the TE/GE Fraud Suspense Coordinator will update the through RCCMS to AIMS status code to 32 to place the case in administrative fraud suspense and prepare the manual updates of the organization code on AIMS and RCCMS.

Maintain a separate Form 5464, headed "Suspense Case Chronology Report" to document all administrative work done with the case while it is in status 32.

Monitor the civil statutes to ensure that the civil assessments can be made upon the completion of the criminal case.

Monitor and update RCCMS as necessary.

Make any required follow-ups with, and provide any necessary assistance to the SA, FTA, EP agent, EP group manager, TE/GE Division Counsel or an EFU, in order to ensure that the civil assessments can be made upon completion of the criminal case and that the case progresses.

Submit Form 10498-A or Form 10498-B, and follow up on those forms as necessary.

CI will send the Form 13308 to TS to notify SB/SE of the completion of the criminal prosecution aspects of the case.

CI will also notify the TE/GE Fraud Specialist through a centralized TE/GE mailbox or, at least through the required quarterly conference, of the conclusion of its investigation and provide a complete copy of the Form 13308 package to the TE/GE Fraud Specialist for processing.

The TE/GE Fraud Specialist will forward the Form 13308 package to the TE/GE Fraud Suspense Coordinator. The TE/GE Fraud Suspense Coordinator will review the case to make a recommendation for examination potential given the results of the criminal investigation and will transfer the case back to the EP group to complete the civil examination. In addition, the TE/GE Fraud Suspense Coordinator will prepare a memorandum advising the EP group manager of pertinent information for the examination resolution.

The order of probation may contain special conditions relating to the settlement and/or payment of civil tax liabilities and penalties.

The SAC will notify TS via Form 13308, of the special conditions of probation.

CI will also notify the TE/GE Fraud Specialist, through a centralized TE/GE mailbox, or at least through the required quarterly conference, of the conclusion of its investigation and provide a complete copy of the Form 13308 to the TE/GE Fraud Specialist for processing. The TE/GE Fraud Specialist will forward a copy of the Form 13308 package to the TE/GE Fraud Suspense Coordinator.

The TE/GE Fraud Suspense Coordinator will prepare a memorandum to the appropriate EP Area Manager to return the case to the field for civil settlement and to consider the taxpayer's conditions of probation. The memorandum will instruct the EP Area Manager to provide a response to the SAC regarding the taxpayer's compliance with the conditions of probation no later than the earlier of the closing of the case or 180 days prior to the probation expiration date.

The TC 910 will not be released until the special conditions of probation have been satisfied or the conditions are terminated by the court.

If TC 914/-Z freezes have been placed on the EP return modules then the TE/GE Fraud Suspense Coordinator will follow up with CI to ensure the release of the freeze codes occurs.

The tax returns and tax return information must relate to a taxpayer convicted of a criminal tax violation.

The U.S. Probation Officer must have the responsibility of determining compliance with the tax-related conditions of probation.

The returns and return information are limited to those years specified in the conditions of probation.

The disclosure would not identify a confidential informant or seriously impair a civil or criminal tax investigation.

Stop all examination activity immediately

Prepare the case for transfer to grand jury suspense

Cease all examination activity and suspend the case (unless a parallel investigation is authorized).

Expeditiously prepare the case to be held in grand jury fraud suspense.

Transfer the case to the TE/GE FSU.

Prepare a Revenue Agent Report (RAR) in accordance with IRM 4.71.3.4.3, Revenue Agent Report, and IRM 4.71.5.9.1.1, Revenue Agent Report (RAR) (as applicable),

Prepare an Administrative Record to the fullest extent possible if there are potential plan qualification issues.

Reflect the results of the examination, as far as it has progressed, and support all known applicable adjustments and penalties in the workpapers. Reflect the date prepared on all workpapers and the date received on all documents in the case file. This helps to establish a demarcation line between the facts developed before the grand jury approval date and any later fact development. If the facts developed before the grand jury approval date are not clearly identified then the Field EP Agent risks having the facts existing prior to the grand jury investigation being deemed “tainted” and not admissible for subsequent civil purposes.

The RAR, administrative record, workpapers and documentation should all be printed as well as retained in electronic format within RCCMS.

The EP group manager will transfer the case in the current AIMS status to the TE/GE FSU. The case will be transferred to the TE/GE FSU on RCCMS with the AIMS box unchecked.

The Manager, CP&C, Classification (or designee) will accept the transfer, update RCCMS and AIMS, and assign the case(s) to the TE/GE Fraud Suspense Coordinator.

The TE/GE Fraud Suspense Coordinator will review the case for statute considerations within three business days. The results of the statute review will be forwarded to the Manager, CP&C, Classification by the end of the three-day period.

The TE/GE Fraud Suspense Coordinator will review the file for readiness to be placed into grand jury suspense.

If the case is ready to be placed into suspense, the TE/GE Fraud Suspense Coordinator will update the AIMS status code to 36 through RCCMS (Suspense, Grand Jury) to place the case in grand jury suspense and prepare the manual updates of the organization code on AIMS and RCCMS.

Maintain a separate Form 5464 headed "Suspense Case Chronology Report" to document all administrative work done with the case while it is in status 36.

Monitor the statutes of the case files and make sure the correct statute dates are reflected on RCCMS and AIMS.

Make any required follow-ups with, and provide any necessary assistance to, the CI Special Agent, FTA, EP agent, EP group manager, TE/GE Division Counsel or EFUs in order to ensure that the civil assessments can be made upon completion of the criminal case and that the case progresses.

Submit Form 10498-A, or Form 10498-B and follow up on those forms as necessary.

There must be an assigned Cooperating Grand Jury EP Agent and group manager who handle the grand jury aspects of the case.

The Cooperating Grand Jury EP Agent assists the Assistant U.S. Attorney (AUSA) with the consideration, review and resolution of technical issues related to the criminal charges being investigated.

The files will not be available for the civil EP examination activity without a Rule 6(e) court order.

Workpapers, however, admitted or referenced and specifically discussed in open court, are available for use in the context of a civil settlement.

The Cooperating Grand Jury EP Agent must be aware of the civil information received or developed during the grand jury investigation since the civil information can be used when the case is sent/returned to the field for the civil case resolution.

Civil information is that information which is a matter of public record, was obtained prior to the convening of the grand jury or was independent of the grand jury. The Field EP Agent is allowed to use this civil information in the civil examination.

One of the Cooperating Grand Jury EP Agent’s most important responsibilities is to ensure this information is gathered and made available for the Field EP Agent’s successful resolution of the civil side of the case.

During these stages pertinent civil assessment information (specific tax information, including the sources of income for each year under investigation), may be developed and preserved.

During these four stages, the Cooperating Grand Jury EP Agent should identify and secure pre-grand jury information and grand jury information that is a matter of public record.

The Cooperating Grand Jury EP Agent must take action to preserve all non-grand jury information for the subsequent civil settlement of the case (i.e., resolution of the EP examination when it recommences).

Identify the records, evidence and other documents secured to date.

Make sure the information secured prior to the grand jury involvement is identified and dated.

The Cooperating Grand Jury EP Agent, in cooperation with the AUSA, should include complete civil assessment information in the indictment.

Depending on the charges alleged in the indictment, the AUSA may or may not be able to include this information in the indictment.

If the case does not go to trial, the next opportunity for the Cooperating Grand Jury EP Agent to ensure that civil assessment information is preserved is during the plea agreement stage.

Even though the Cooperating Grand Jury EP Agent usually does not participate in this stage, it is important that the Cooperating Grand Jury EP Agent convey to the AUSA the importance of including specific civil assessment information in the plea agreement.

Plea negotiations generally result in the defendant pleading guilty to lesser charges.

If there was limited disclosure of civil information in the indictment, the absence of specific civil assessment information in the plea agreement may result in the Field EP Agent not having enough non-grand jury information to propose adjustments, make assessments, address plan issues or provide information needed for the collection of taxes.

Thus, the defendant may receive a criminal sentence but the plan issues may not be addressed or the defendant may not pay any tax and penalties due to lack of information in the public record.

If specific civil assessment information is not made a matter of public record through the indictment or plea agreement, the last opportunity to achieve this objective is during formal sentencing proceedings.

There are many statements and documents entered into the public record during this stage.

One of the most important documents entered in the public record is the Government's Version of the Facts. This document is often read into the record by the prosecuting attorney. This document usually summarizes what the government would have proven if the case had gone to trial and covers years and/or charges to which the defendant did not plead.

Because the Federal Sentencing Guidelines advise that the entire loss to the government be disclosed, including years not included in the plea agreement or indictment when sentencing an offender on a tax charge, the Cooperating Grand Jury EP Agent should request the AUSA read this information into the record. This is necessary because this information is often sealed as part of the probationary report.

Assist the SA in preparing a memorandum which informs the EP Area Manager that the grand jury investigation has been concluded and the case should be released for civil settlement if the investigation is discontinued and/or no indictment is returned, and the Cooperating Grand Jury EP Agent previously forwarded non-grand jury information to the EP Area Manager.

Assist the SA in preparing a memorandum to the field stating there are no pre-grand jury documents if the investigation was entirely conducted using grand jury procedures and as a result there are no pre-grand jury documents.

Segregate and assemble non-grand jury documents that will be used in completing the EP examination.

Prepare Form 5666 addressing the civil aspects of the case immediately following the sentencing of the defendant. See IRM 4.71.25 Exhibit 17 at IRM 4.71 - Employee Plans Examination Exhibits for a copy of this form.

A narrative summarizing the case history and the results of the investigation

An index of documents included in the case file, briefly describing the source of the documents and their content

Copies of trial documents such as jury books, evidence admitted during trial, transcripts of the trial proceedings, if available

Cooperating Grand Jury EP Agent workpapers and schedules admitted or referenced, and specifically discussed in open court

Cooperating Grand Jury EP Agent trial notes, if appropriate and useful in civil settlement

Tax computations

Any other pertinent and relevant public documents that the SA did not attach to Form 13308

CI will concurrently send a copy of the Form 13308 and any related documents to a centralized TE/GE mailbox established for such purposes which will be monitored by the TE/GE Fraud Specialist.

The Form 13308 and any related documents will then be forwarded to the centralized TE/GE mailbox for processing. The TE/GE Fraud Specialist will forward a copy of the Form 13308 closing package to the TE/GE Fraud Suspense Coordinator, who will process the suspended examination case back to the field. EP Determinations will also be notified if a related application for a favorable determination letter has been held in suspense.

The memo prepared by the Cooperating Grand Jury EP Agent and sent with the Form 13308 to the EP Examinations group is essential to help ensure that the Field EP Agent receives the non-grand jury material needed to conclude the civil EP examination.

EP agents who had access to grand jury information are considered "tainted" for civil case resolution and cannot be assigned to complete the examination.

Likewise, if the EP group manager had direct or indirect access to grand jury information, the case must be assigned to another manager to oversee completion of the examination.

Rule 6(e) precludes the use of "matters occurring before the grand jury" in any subsequent civil action. Rule 6(e) states, "Any person to whom matters are disclosed under subparagraph (A)(ii) of this paragraph shall not utilize grand jury material for any purpose other than assisting the attorney for the government in the performance of such attorney's duty to enforce federal criminal law" .

As noted above in IRM 4.71.25.8.2, Cooperating Grand Jury EP Agent Procedures, the Cooperating Grand Jury EP Agent will gather this information during the grand jury investigation.

At the conclusion of the grand jury investigation, that information will be given to the SA to attach to Form 13308 and will be forwarded to EP for association with the suspended EP examination file.

A Rule 6(e) order may be requested through the AUSA to disclose grand jury information when the information is needed "preliminarily to or in connection with a judicial proceeding" .

There must be a "particularized need" , meaning that the information cannot be obtained from some other source.

An IRS civil examination does not meet this requirement.

There must be specific litigation, such as a Tax Court or District Court proceeding.