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4.75.4  Case Selection and Delivery

Manual Transmittal

September 09, 2016

Purpose

(1) This transmits revised IRM 4.75.4, Exempt Organizations Examination Procedures, Case Selection and Delivery.

Material Changes

(1) Renamed IRM 4.75.4 from Planning, Classifying, and Selecting Returns and Processing Claims to Case Selection and Delivery.

(2) Converted IRM 4.75.4 to plain language in order to comply with the Plain Writing Act of 2010, P.L. 111-274.

(3) Renamed 4.75.4.4 to Return Selection Process.

(4) Removed IRM 4.75.4.5.6, EO Penalties, as its content didn’t reflect the purpose of this IRM.

(5) Renumbered IRM 4.75.4.5.7, Joint Committee Claim Cases, to IRM 4.75.4.5.6.

(6) IRM 4.75.4.4 now contains "Examination Process" , which was previously located at IRM 4.75.4.6. This section has also been revised to move the task previously attributed to Examinations Program and Planning (EPP) to Compliance Strategies and Critical Initiatives (CSCI).

(7) Removed IRM 4.75.4.6.1, 4.75.4.6.2, and 4.75.4.6.3 as procedures have changed for processing TEP claims.

(8) Renamed IRM 4.75.4.7 to Whistleblower Form 211 Claim Procedures. Updated information where appropriate.

(9) Renamed IRM 4.75.4.7.1 to Category “A” Whistleblower Claim Procedures. Removed information in reference to Category “B” claims and added information pertaining to Category “A”.

(10) Added subsection IRM 4.75.4.7.1.1, Category “A” Whistleblower Claim Procedures for EO Referrals and CS&D.

(11) Renamed IRM 4.75.4.7.2 to Category “B” Whistleblower Claim Procedures. Updated procedures where appropriate.

(12) Added subsection IRM 4.75.4.7.2.1, Category “B” Whistleblower Claim Procedures - Coordinator Duties Upon Receipt of File from WB Analyst.

(13) Added subsection IRM 4.75.4.7.2.2, Category “B” Whistleblower Claim Procedures - Technical Reviewer Responsibilities.

(14) Added subsection IRM 4.75.4.7.2.3, Category “B” Whistleblower Claim Procedures - EO Referrals and CS&D.

(15) Removed IRM 4.75.4.7.3, Taint Team Reviews

(16) Removed IRM 4.75.4.7.4, Classification Procedures

(17) Removed IRM 4.75.4.7.5, EO Exam Group Procedures

(18) Added Exhibit 4.75.4-2, EO Technical/Taint Review Lead sheet

Effect on Other Documents

This manual supersedes IRM 4.75.4, Planning, Classifying and Selecting Returns and Processing Claims, dated February 12, 2012.
This manual incorporates some content from Interim Guidance Memorandum TEGE-04-1215-0029, dated December 30, 2015, Discontinuance of Referral Committees.
This manual incorporates Interim Guidance Memorandum TEGE-04-1015-0025, dated October 23, 2015, Team Examination Program Claims Processing, which is obsoleted.

Audience

Tax Exempt and Government Entities
Exempt Organizations
Examinations

Effective Date

(09-09-2016)

Signed by
Tamera L. Ripperda
Director, Exempt Organizations
Tax Exempt and Government Entities

4.75.4.1  (09-09-2016)
Introduction

  1. This IRM contains Exempt Organizations (EO) procedures and instructions for researching, classifying and selecting returns and claims.

  2. EO Case Selection and Delivery (CS&D) is the intended audience for these instructions.

4.75.4.2  (09-09-2016)
Background Information

  1. Policy Statement 4-119 (IRM 1.2.13.1.36) states that the primary objective of the EO audit program is regulatory, with emphasis on continued qualification of exempt organizations.

  2. EO’s goals in selecting and auditing returns are to:

    • Promote the highest degree of voluntary compliance with the federal tax laws governing qualification for tax-exempt status.

    • Determine the extent of organizational compliance and the causes of noncompliance with the tax laws.

4.75.4.3  (09-09-2016)
Glossary of Terms

  1. Returns Inventory and Classification System (RICS) - An automated system that provides users access to return and files information related to the filing and processing of returns in the Tax Exempt/Government Entities (TE/GE) operating division.

  2. RICS Condition Code - Codes that identify specific data that are needed to select the returns that fit a project issue.

  3. Non-Master File (NMF) - A collection of revenue accounting transactions on a taxpayer account that allows for assessments, liabilities, payments, and credits for transactions not compatible with Master File.

  4. Audit - An examination of a taxpayer’s books, records, and other data to ensure a proper determination of exempt status and tax liability.

    Note:

    IRC 7602 and 26 CFR §301.7602-1(a) provide the authority to audit returns. To distinguish between an audit and other compliance activities, refer to Rev. Proc. 2005-32, 2005-23 I.R.B. 1206.

4.75.4.4  (09-09-2016)
Return Selection Process

  1. The Compliance Strategy and Critical Initiatives (CSCI) area provides the Case Selection and Delivery unit (CS&D) with queries to use to identify returns to fill case order requests when the pending referrals aren’t sufficient.

  2. CS&D uses the queries developed by CSCI for return retrieval. The queries are used to identify returns located in the Area and case grades requested in the case orders. All returns must have a minimum of 18 months remaining on the statute of limitations.

  3. Upon receipt of the returns, CS&D establishes a full account on the Automated Information Management System (AIMS) and Reporting Compliance Case Management System (RCCMS) and transfers the returns to the appropriate audit group.

  4. The audit group conducts the audit on the organization for which the returns were pulled.

    Audit groups aren’t authorized to self-generate audits. Self-generating an audit means starting an audit of a taxpayer without undergoing a classification and assignment process.   A self-generated audit doesn’t include:

    • Pick-up audits of related organizations (see Instructions for Schedule R (Form 990) for the definition of related organization)

    • Related returns (IRM 4.75.16.1(3)c) of the organization you are already auditing

    • Discrepancy adjustment returns

    • Form 4720-A

4.75.4.5  (09-09-2016)
Claims Processing

  1. The Ogden Service Center (OSC) receives and processes claims. If a claim is received by any other group in TE/GE, it should be sent to OSC for processing. See IRM 21.7.7.4.16, EO Claim Procedures.

  2. OSC forwards all claims that can’t be processed by them to CS&D. OSC establishes all such claims on AIMS in the Integrated Data Retrieval System (IDRS) before sending to CS&D. See IRM 21.7.7.4.16.

  3. CS&D establishes the claim on IDRS if received without an AIMS account.

  4. When an AIMS account is present on IDRS, CS&D establishes the claim on RCCMS.

4.75.4.5.1  (09-09-2016)
Claims - Statute of Limitations

  1. The taxpayer must file a claim for refund within three years from the date the original return was filed or two years from the date the tax was paid, whichever is later (IRC 6511).

  2. In the case where no original return was filed but taxes were paid (e.g., withholding, estimated tax payment), a claim is considered timely filed if filed within two years from the date of payment.

  3. Use the following procedure to verify the statute of limitations date for filing claims:

    1. If an original return was filed, check the Assessment Statute Expiration Date (ASED) on IDRS by viewing a TXMODA print.
    2. Compare the claim's OSC received date with the ASED.
    1. If the received date is earlier than the ASED, the claim is filed timely.

    2. If the received date isn’t earlier than the ASED, then check the postmark on the envelope. If the postmark is earlier than the ASED, then the claim is filed timely.

    3. If neither the received date nor the postmark is earlier than the ASED, return the case to the OSC Statute Control Group. CS&D doesn’t have claim disapproval authority.

    3. Check if the claim was signed by the taxpayer:
    1. If not signed, but the received date is before the ASED, send a request to the taxpayer for a signed copy of the claim.

    2. If not signed, and the ASED has already passed, return the case to the OSC Statute Control Group. A claim without a signature isn’t valid.

    4. Print IDRS research (i.e., TXMODA, AMDISA, BMFOLA, BMFOLI, BMFOLR, BMFOLZ, and BMFOLO).
    5. Check TXMODA for transaction code (TC) 976, Posted Duplicate Return. TC 976 creates an -A freeze on accounts when a TC 150, Return Filed and Tax Liability Assessed, is present. -A freeze prevents a refund or offset from posting to the module until an adjustment is made.
    1. If the TC 976 hasn’t posted to the module, make a copy of the claim and send it to the Field Agent Support Team (FAST) for posting.

    2. Assign the claim to the Return Classification Specialist (RCS) for processing.

4.75.4.5.2  (09-09-2016)
Surveyed Claims

  1. If a claim is clearly allowable, CS&D surveys the claim as follows:

    1. Prepare Form 1900, Income Tax Survey After Assignment

    2. Obtain approval by the CS&D Group Manager

    3. Stamp the return "surveyed before assignment"

    Note:

    The manager must approve all surveys before the return is stamped.

  2. If the claim can’t be surveyed, the Return Classification Specialist (RCS) will:

    1. Prepare a statement explaining why the claim is being sent to the field. Include all concerns/questions found from the preliminary overview of the claim.

    2. Update AIMS and RCCMS.

      Note:

      Examination Special Support (ESS) accepts Statistics of Income Exempt Organizations Return Image Net (SEIN) copies for closing purposes. BRTVU is also acceptable if SEIN isn’t available.

  3. If there is no AIMS account on IDRS, CS&D will create an AIMS account on RCCMS.

  4. In situations where expedited processing is required, (e.g., Taxpayer Advocate case), CS&D processes the claim without establishing it on AIMS. This requires managerial approval. Use Form 3870, Request for Adjustment, to process.

  5. See IRM 4.75.16, Case Closing Procedures, for general survey procedures.

4.75.4.5.3  (09-09-2016)
Requests for Abatement Under IRC 4962

  1. IRC 4962(a) provides discretionary authority to the Service not to assess, or to abate or refund, certain "qualified" Chapter 42 first-tier taxes if the organization establishes that a taxable event:

    • Was due to reasonable cause;

    • Was not due to willful neglect; and,

    • Has been corrected within the correction period for the taxable event.

      Note:

      Refer to IRC 4962(c) for substitute language regarding the IRC 4955 tax.

  2. CS&D follows the procedure for claims shown in IRM 4.5.3, TE/GE AIMS Manual, TE/GE AIMS Special Processing Procedures. Agents follow the procedures in IRM 4.75.37.8, Claims, Requests for Abatement and Audit Reconsiderations - Requests for Abatement under IRC 4962.

  3. If audit controls aren’t already established upon receipt of the abatement request, CS&D establishes the audit controls as follows:

    • If the tax was assessed against a disqualified person or organization manager, establish on NMF (MFT 66, Form 4720-A).

    • If the tax was assessed against a private foundation or exempt organization, establish on AIMS Master File (MFT 50, Form 4720).

  4. If Form 4720-A, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the IRC (MFT 66), reflects assessment of both first and second-tier tax:

    1. Include a Manual Accounting Replacement System (MARS) transcript with the request for abatement, showing the assessment of excise tax against a disqualified person or other related person. The EIN or SSN must be included. Process the second-tier abatement using Form 3870.

      Note:

      The MARS transcript is for AIMS NMF accounts.

    2. If the request for abatement has a second-tier tax assessment, but doesn’t have an Automated NMF transcript attached, send the request for abatement back to OSC for processing on Automated NMF. Upon receipt of the transcript, process the second-tier tax abatement.

4.75.4.5.4  (09-09-2016)
Net Operating Loss (NOL) or Capital Loss Carrybacks

  1. A Net Operating Loss (NOL) occurs when trade or business deductions exceed income. An NOL lowers taxes in an earlier year, allowing a refund for taxes already paid. Any loss remaining after applying the NOL to preceding years is carried forward to lower taxes in a succeeding year. The taxpayer must use the NOL before applying unused credits.

  2. An NOL arising in taxable years beginning after August 5, 1997 can be carried back 2 years and forward 20 years. Prior to this change, a taxpayer could take an NOL back 3 years and forward 15 years.

  3. Carryback claims differ from other claims for years beginning after November 10, 1978. An extension of time to file which has been granted does not terminate on the date the return is filed. The claim is valid if filed on or before the extended due date, regardless of the filing date of the original tax return.

  4. The procedure to verify the statute is the same as for other claims except for the extension issue. Use alpha code BB, which represents a Carryback Update.

  5. Prepare Form 2285, Concurrent Determinations of Deficiencies, when:

    • There is a carryback of two loss years to one year.

    • There is a carryback and a general adjustment to the receiving year.

    See IRM 20.2.9, Interest on Carryback of Net Operating Loss, for instructions and examples regarding the completion of Form 2285.

  6. Prepare Form 5599, TE/GE Examined Closing Record, to show the needed adjustment(s). Use Form 5599 for all claims that have an AIMS account. Use TC 309, Abatement of Prior Tax Assessment by Examination Div. with Interest Computation Date, for NOL tax adjustment postings on Form 5599. TC 301, Abatement of Tax by Examination or Appeals, is used for non-NOL tax adjustments.

4.75.4.5.5  (09-09-2016)
Protective Claims

  1. Protective Claims are formal claims or amended returns for credit or refund which are filed normally based on expected changes in a:

    • Current IRC section

    • Current regulation

    • Pending legislation

    • Current litigation

  2. Consider the following as "protective claims" :

    • Claims identified as a pending court case or decision

    • Claims that recalculate the Foreign Tax Credit based on the foreign taxes "deemed paid" per IRC 902

    • IRC 403(b) claims

  3. Update AIMS and RCCMS to status 38 for identified protective claims and place in suspense.

4.75.4.5.6  (09-09-2016)
Joint Committee Claim Cases (IRC 6405)

  1. Process any case that involves a request for the return of overpayment of $2 million or more and send to the appropriate EO audit group. Once the audit group has completed its audit and report, send the case file to the Joint Committee representative for review. See IRM Chapter 4.36, Joint Committee Procedures.

4.75.4.6  (09-09-2016)
Team Examination Program (TEP) Claims Processing Procedures

  1. Like other taxpayer claims in IRM 4.75.4.5, CS&D surveys claims once considered TEP claims that:

    • Don’t involve technically complex issues

    • Contain adequate documentation and substantiation in the case file

    Note:

    TEP as a program within EO Examinations has been discontinued. IRM 4.75.29, Exempt Organization Team Examination Program Procedures, has been obsoleted. Agents are required to follow regular audit procedures and guidelines in other manuals within IRM Chapters 4.75 and 4.76.

  2. Claims once considered TEP claims that are not surveyed by CS&D are assigned to the field group in the geographic location of the taxpayer. Refer to IRM 4.75.37, Exempt Organization Examination Procedures - Claims, Requests for Abatement and Audit Reconsiderations.

4.75.4.7  (09-09-2016)
Whistleblower Form 211 Claim Procedures

  1. Whistleblowers (WB) submit claims on Form 211, Application for Award for Original Information.

  2. There are two types of WB Form 211 claim cases:

    1. Discretionary award IRC 7623(a) cases (Category A cases). IRC 7623(a) provides for payment of discretionary awards to a WB.

    2. Mandatory award IRC 7623(b) cases (Category B cases). IRC 7623(b) provides for mandatory payment of an award to a WB where the amount recovered by IRS is over $2 million (including tax, interest, penalties, and additional amounts). If the taxpayer is an individual, the individual’s gross income must exceed $200,000 for any taxable year at issue.

  3. There is no additional priority given to WB claim cases simply because a WB is involved. Existing audit priorities and workload govern the decision to audit a WB claim.

  4. On occasion, the Political Activities Review Committee (PARC), will review WB claims.

  5. These procedures supplement those found in IRM 25.2.1, Information and Whistleblower Awards, Receiving Information, and IRM 25.2.2, Information and Whistleblower Awards, Whistleblower Awards.

4.75.4.7.1  (09-09-2016)
Category "A" Whistleblower Claim Procedures

  1. The WB office initially processes all WB claims. For specific procedures, see IRM 25.2.2.4, Initial Form 211 Processing.

  2. If the WB Office determines that the case is a Category "A" , the WB office routes the case to the Informant Claims Examinations Unit (WB ICE Unit) in the Ogden Service Center for processing.

  3. For cases under EO’s jurisdiction, the WB ICE Unit will prepare a Category "A" WB case file (Form 211 and any supporting information) and send it to the Manager of EO Referrals at the following address:

    IRS - EO Referrals
    MS 4910 DAL
    1100 Commerce St.
    Dallas,TX 75242

4.75.4.7.1.1  (09-09-2016)
Category "A" Whistleblower Claim Procedures - EO Referrals and CS&D

  1. Claim is received from the WB Office.

  2. EO Referrals (Referrals) inputs the case into Reporting Compliance Case Management System (RCCMS).

  3. Referrals assigns the case to a designated classifier responsible for WB cases. All classifiers are cross-trained to review these cases.

  4. Normal classification procedures are followed. No special priority is given to WB cases.

  5. If a decision is made to survey or not audit/assign the WB Category "A" case, Referrals will:

    1. Complete items 1-9 and 12 of Form 11369, Confidential Evaluation Report on Claim for Award, and attach an explanation as to why an audit isn’t recommended.

    2. Mail the Form 11369 and claim file back to the WB Office at:
      Internal Revenue Service
      Whistleblower Office
      c/o Campus Compliance Operations, Ogden
      1973 N. Rulon White Blvd. MS 4110
      Ogden, UT 84404

  6. If a decision is made to assign the Category "A" case for audit, Case Selection and Delivery (CS&D) uses Project Definer Code 4020 on AIMS. This project definer code allows for tracking of the Category "A" cases.

  7. Once the case establishes on AIMS, CS&D sends an e-mail to the attention of the ICE coordinator/lead, with a copy to the EO Exam WB Coordinator, requesting an ICE indicator “1” be placed on AIMS for the primary return being assigned. Include in the e-mail:

    • The WB claim number

    • Taxpayer name

    • EIN

    • MFT

    • Tax year

    Note:

    The ICE indicator prevents the AIMS account from closing until Form 11369 has been submitted to and accepted by the WB office.

  8. For cases selected for audit, there are two files:

    1. The audit case file

    2. The WB case file

      Note:

      The audit case file can’t contain any WB information.

  9. The WB case file will consist of the following:

    • Government Form TDF 15-05.11, Sensitive But Unclassified (SBU) Cover Sheet

    • Form 11369 instructions

    • Form 211

    • Form 211 instructions

    • Documents provided by the WB

    • EO Exam Group Form 211 Whistleblower Category A Claim Case Instructions

  10. CS&D will follow normal procedures for the assignment of the case.

4.75.4.7.2  (09-09-2016)
Category "B" Whistleblower Claim Procedures

  1. The WB Office does the initial processing of all WB claims. For specific procedures, see IRM 25.2.2.4, Initial Form 211 Processing.

  2. If the WB Office determines that the claim meets the criteria for a category "B" case, a WB analyst sends the case file to the EO Exam WB coordinator (coordinator). The coordinator:

    1. Oversees the EO Exam WB process for "B" cases.

    2. Serves as the Subject Matter Expert (SME).

    3. Keeps the WB office informed on the progress of the case.

    4. Tracks the case until it’s closed.

  3. All WB "B" cases are subject to a technical and taint review.

4.75.4.7.2.1  (09-09-2016)
Category "B" Whistleblower Procedures - Coordinator Duties Upon Receipt of File from WB Analyst

  1. Within ten days of receipt of the file, the coordinator performs the following verifications:

    1. The entity involved is a currently recognized tax-exempt organization.

    2. The issue(s) involve matter(s) within the purview of EO.

    3. The case is a WB "B" case.

  2. If the case doesn’t meet all of the criteria listed in (1) above, the coordinator will:

    • Electronically complete and process Form 11369, Confidential Evaluation Report on Claim for Award, (with the required two signatures).

    • Update e-trak, a web-based service-wide document tracking application.

    • Send the Form 11369 and the WB "B" case package to the WB analyst.

  3. If the case does meet all of the criteria listed in (1) above, the coordinator will e-mail the manager of Referrals the following information:

    • WB’s name

    • A copy of INOLE

    • WB claim number

    • Date IRS received the claim

    • Summary of allegations

    • Copy of Form 211, if beneficial

    The Referral unit will log this information into RCCMS.

  4. The coordinator determines if the entity is currently under audit.

  5. The coordinator or back-up coordinator, if needed, conducts the technical/taint review.

4.75.4.7.2.2  (09-09-2016)
Category "B" Whistleblower Procedures - Technical/Taint Review

  1. The coordinator is responsible for conducting a technical review of the WB package and, if necessary, assisting Counsel with the taint review.

  2. The primary objectives of the technical/taint reviews are to:

    1. Review the WB "B" claim package to determine if an audit is warranted.

    2. Interview/debrief the WB to assess the information provided and to see if the WB has other information of value.

    3. Determine if any of the information is tainted.

    Note:

    A WB can have insights and information that can help the IRS understand complex issues or hidden relationships. Debriefing of the WB is an invaluable and crucial component of evaluating the information prior to making a decision on whether to conduct an audit. It allows the WB to clarify documents and information submitted on Form 211. Specific justification is required if a debriefing isn't conducted.

    Note:

    If the WB plans to have an authorized representative during the review of the claim or the debriefing process, a properly executed Form 2848, Power of Attorney and Declaration of Representative, is needed. Date stamp the Form 2848 with the date the form was received. Make a copy of the Form 2848 for the claim file. Use Form 3210, Document Transmittal, to mail the original Form 2848 to the WB Office analyst. Notate the assigned WB claim number on the Form 3210 as well.

  3. In general, the technical/taint review is completed within 90 days from the date the coordinator received the claim from the WB office. The coordinator will notify the coordinator’s manager if the review will exceed the 90-day deadline.

  4. The coordinator completes the EO technical/taint review lead sheet in Exhibit 4.75.4-2.

  5. The coordinator maintains a case chronology of actions taken on the case as well as interview notes of the debriefing.

  6. Time for the taint review is charged to Classification AC 313 and PC 0999.

    If Then
    An audit isn’t warranted The coordinator completes items 1-9 and 12 of Form 11369, and attaches a brief narrative as to why an audit isn’t recommended and why a debriefing didn’t occur. Form 11369 requires signatures from the coordinator and the coordinator’s manager. Electronic signatures are acceptable. The coordinator updates e-trak, and sends the file to the WB analyst for final processing. The coordinator advises the Referrals manager. Referrals updates RCCMS.
    An audit may be warranted As soon as possible, the coordinator sends an email through the manager to TEGE counsel requesting assignment of an attorney. The email should include the following:
    • The EO Technical/Taint review lead sheet

    • The WB claim number

    • Name and location of the exempt organization

    • A brief description of the potential issues reflected in the claim (e.g., UBI, inurement, employment tax, excess compensation, etc.)

  7. The coordinator provides a complete copy of the WB file to the assigned TE/GE attorney.

  8. The coordinator and attorney conduct a joint review of the claim package relative to the taint aspect. All steps, including conducting a debriefing and preparing a taint review risk analysis, are completed, as necessary. The taint review should be completed as expeditiously as possible.

  9. If the WB claim involves issues within the purview of the PARC as indicated in IRM 4.75.4.7(4), the final decision as to whether an audit is recommended rests with that committee. The coordinator still conducts a taint review and offers an opinion as to whether an audit is recommended.

  10. The WB or their representative signs the Debriefing Checksheet, IRM Exhibit 25.2.2-1. The coordinator forwards the executed check sheet to Counsel for approval.

  11. If additional information is secured from the WB and/or their POA, the coordinator forwards information to the WB analyst assigned the claim and notifies the coordinator.

  12. The attorney completes the risk analysis and sends a memo to the coordinator with a copy to the manager.

  13. The coordinator completes the Summary of EO Taint Review, Exhibit 4.75.4-1 along with the case chronology and any notes prepared during the review of the claim.

    If Then
    An audit isn’t warranted and it shouldn’t be assigned to a committee as identified in IRM 4.75.4.7(4) The coordinator completes items 1-9 and 12 of Form 11369, and attaches a brief narrative as to why an audit isn’t recommended. If a debriefing didn’t occur, an explanation must also be provided. Form 11369 requires signatures from the coordinator and the manager. Electronic signatures are acceptable. The coordinator updates e-trak, and sends the file to the WB analyst for final processing. The coordinator advises the Referrals manager. Referrals updates RCCMS.
    An audit may be warranted or should be assigned to a committee as identified in IRM 4.75.4.7(4) The coordinator will separate any tainted information from the rest of the information.

4.75.4.7.2.3  (09-09-2016)
Category "B" Whistleblower Procedures - EO Referrals and CS&D

  1. If the coordinator recommends an audit or the case involves an entity or issue subject to review by the PARC committee IRM 4.75.4.7 (4), the coordinator removes any tainted information from the file and sends it to the WB analyst. If there is a recommendation to include potentially tainted information in the file, it must include Counsel's risk analysis and approval by Director, EO Examinations.

  2. The coordinator updates E-trak and forwards the claim package to Referrals with:

    • A cover memorandum

    • Summary of EO Taint Review

    • The “EO Exam Group Form 211 Whistleblower Category B Case Instructions”

  3. Upon receipt of the claim package from the coordinator, Referrals adds the case to RCCMS, (if not already entered) and annotates it as a Category "B" case.

  4. Normal classification procedures are followed. No special priority is given to WB cases.

  5. Referrals will send claim packages subject to PARC review to the PARC for final determination as to whether an audit should be conducted.

  6. If a decision is made to survey the WB Category “B” case, the EO Referrals group:

    • Completes items 1-9 and 12 on Form 11369.

    • Attaches an explanation as to why an audit isn’t recommended.

    • Mails Form 11369 and the claim file back to the coordinator.

    The coordinator reviews the file and, if complete, updates e-trak, and sends the file to the WB analyst for final processing of the claim.

  7. If a decision is made to assign the WB Category “B” case for audit, CS&D uses special definer code 4030 when the case is established on AIMS. This allows for tracking of the Category “B” case.

  8. Once the case has been established on AIMS, CS&D sends an email to the ICE coordinator, with a copy to the EO Exam WB coordinator, requesting ICE indicator “1” be placed on AIMS for the primary return. Include in the e-mail:

    • The WB claim number

    • Taxpayer name

    • EIN

    • MFT

    • Tax year

    Note:

    The ICE indicator prevents the AIMS account from closing until the required Form 11369 has been submitted and accepted by the WB office.

  9. For cases selected for audit, there are two files:

    • The audit case file

    • The WB case file

    Note:

    The audit case file cannot contain any WB information.

  10. The WB case file will consist of the following:

    • Sensitive but Unclassified (SBU) Cover Sheet

    • Form 211

    • Form 211 instructions

    • Documents provided by the WB

    • EO Exam Group Form 211 Whistleblower Category B Case Instructions

  11. CS&D will follow normal procedures for the assignment of the case.

  12. CS&D notifies the coordinator by e-mail of the case assignment.

Exhibit 4.75.4-1 
Summary of EO Taint Review

This cover sheet is completed for all Whistleblower B cases and contains the following information:

  • Claim number

  • EO name

  • Taint reviewer’s name

  • Manager’s name

  • Area counsel’s name

  • Recommendation for audit

  • Assignment to GL/FIU group

  • Debriefing held

  • Significant issues

SUMMARY OF EO TAINT REVIEW
(Prepare for all reviews)
WB Office Claim #:  
Name of EO:  
EIN:  
 
Taint Reviewer:  
Manager:  
TE/GE Counsel Attorney:  
 
Recommended for exam? ___No __Yes
Assign case to GL/FIU Group? ___No __Yes to GL/FIU group # ____
Debriefing Conducted? ___No __Yes (Attach Debriefing notes checklist)
Brief description of significant issues. (Do not reference or discuss tainted information, documents or issues.)
List Specific Entities, Tax Returns Recommended for Exam (If Referral Committee case or Critical Initiatives Project Committee case include whether you recommend or do not recommend an exam. This is not the final determination.)
Taint 's Signature Manager's Signature
Date: Date:

Exhibit 4.75.4-2 
EO Technical/Taint Review Leadsheet

This is a lead sheet used by the technical reviewer upon receipt of a WB "B" claim from the WB "B" coordinator.

WB Claim # Taint Reviewer:
Date Received:
Date Completed:
EO Technical/Taint Review Lead Sheet
WB Claim #
Name and EIN of Taxpayer and related taxpayers identified on Form 211
Address
 
Name and EIN of Taxpayer and related taxpayers identified on Form 211
Address
 
Name and EIN of Taxpayer and related taxpayers identified on Form 211
Address
 
Statute Date
BRTVU for ASED Date
 
Is the taxpayer(s) currently under audit?
AMDISA (Open Exam)
BMFOLZ (Audit History)
 
Notes/Comments from EO Exam WB Coordinator  
Memorandum from Whistleblower Analyst  
WB Claim Analysis/Summary Sheet Prepared by Whistleblower Office Allegations:


Alleged Tax Impact:


Risk Factors:
Information Taken From Form 211

Describe how you learned about and/or obtained the information that supports this claim and describe your present or former relationship to the alleged noncompliant taxpayer.
Name of Claimant:
Form 211 Quick Summary of Facts and Issues  
Description of Evidence
(Source)
 
Technical Reviewer Research
(Internet, Accurint, Lexis/Nexis, etc)
 
Is the information timely?

Even if dated information, could it help focus on similar conduct in current year?
 
Technical and Taint Conclusions

State Issue
Cite law and potential return to the Service.

Is the exam worthy of pursuing?

Does the Whistleblower offer information that may be relevant to exam issue?

Determine if information materially contributes to identification, development or resolution of taxpayer liability or collection of issues.

Are there any potential limitations on interaction with the Whistleblower (tax professional, current employee)?

Is the WB a current employee of the TP or TP rep? (See one bite and no-bite rules-Chief Counsel Notice 2008-011)
 

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