- 4.75.5 Information Items
- 188.8.131.52 Introduction
- 184.108.40.206 Information Items Defined
- 220.127.116.11 General Procedures
- 18.104.22.168 EO Referral Procedures Timeframes
- 22.214.171.124 Political Activities Referral Committee (PARC)
- 126.96.36.199 EO Referrals Group - Peer Review Team
- 188.8.131.52 Information Items Recordkeeping on RCCMS
- 184.108.40.206 Referral Case Delivery
- 220.127.116.11 Other Operating Divisions
- Exhibit 4.75.5-1 Incoming Referral Cover Sheet
- Exhibit 4.75.5-2 Classification Lead Sheet
Part 4. Examining Process
Chapter 75. Exempt Organizations Examination Procedures
Section 5. Information Items
August 19, 2016
(1) This transmits revised IRM 4.75.5, Exempt Organizations Examination Procedures, Information Items.
This IRM provides procedures for processing, controlling, and tracking information items received by EO Examinations concerning the activities of exempt organizations.
(1) IRM 4.75.5 has been converted to plain language to comply with the Plain Writing Act of 2010, P.L. 111-274.
(2) All EO referral committees other than the Political Activities Referral Committee (PARC) are discontinued.
(3) Removed IRM 18.104.22.168. New IRM 22.214.171.124 defines information items.
(4) All references to "EO Classification-Referrals" are deleted and replaced by "EO Referrals Group."
(5) Renumbered IRM 126.96.36.199 to 188.8.131.52. Also added reference to IRM 25.27.1, Third Party Contact - Third Party Contact Program.
(6) Added paragraph (12) to new IRM 184.108.40.206, introducing the peer review team of classification specialists within the EO Referrals Group.
(7) Renumbered IRM 220.127.116.11 to 18.104.22.168 and retitled to EO Referral Procedures Timeframes.
(8) Renumbered IRM 22.214.171.124 to 126.96.36.199 and retitled to Political Activities Referral Committee (PARC).
(9) Incorporated in new IRM 188.8.131.52 the contents of Interim Guidance Memorandum TEGE -04-0715-0018, Political Activities Referral Committee.
(10) Incorporated in new IRM 184.108.40.206, classifiers will only refer information items containing evidence or allegations of political or lobbying activities to the PARC.
(11) Added IRM 220.127.116.11, EO Referrals Group - Peer Review Team to include referral items previously contained in IRM 18.104.22.168(9).
(12) Removed IRM 22.214.171.124. The Information is now contained in IRM 126.96.36.199.
(13) Removed contents in IRM 188.8.131.52 as churches are no longer automatically subject to committee review. Churches are discussed in IRM 184.108.40.206.
(14) Renumbered IRM 220.127.116.11 to 18.104.22.168 and retitled to Information Items Record Keeping on RCCMS. Instructions simplified.
(15) Renumbered IRM 22.214.171.124 to 126.96.36.199. Replaced contents with new content to provide instructions specifically to the EO Referrals Group
(16) Created IRM 188.8.131.52 to include information previously located in IRM 184.108.40.206(8).
(17) Exhibit 4.75.5-1 - Removed Information Item Tracking Sheet (obsolete) and replaced with Incoming Referral Cover Sheet.
(18) Exhibit 4.75.5-2 - Removed OUO content, Information Items Record Keeping System - Information Database (obsolete), and replaced with Classification Lead Sheet.
This manual incorporates and supersedes Interim Guidance Memorandum TEGE-04-1215-0029, dated December 30, 2015, Discontinuance of Referral Committees
This manual supersedes IRM 4.75.5, Exempt Organizations Examination Procedures, Information Items, dated 08-07-2013.
Tamera L. Ripperda
Director, Exempt Organizations
Tax Exempt and Government Entities
This IRM section establishes procedures to review, evaluate, and preserve information items received by Exempt Organizations (EO). In following these procedures EO’s goals are to:
Operate in an unbiased and appropriate manner.
Protect against impropriety in its compliance programs.
Protect against undue influence in its compliance programs.
The Director, EO Examinations, has broad discretion to coordinate and develop procedures for an effective referral program.
An information item is a document or other communication (including electronic) that is:
Received by EO Referrals Group (Referrals) from a source outside the Internal Revenue Service (IRS). The information item alleges possible noncompliance with a tax law by an exempt organization, political organization, taxable entity, or individual.
Received by Referrals from an IRS employee who identifies current or potential noncompliance discovered during the performance of official duties.
IRC 7217 prohibits Executive Branch influence over taxpayer audits and other investigations. Immediately report any such incidents to the Treasury Inspector General for Tax Administration (TIGTA). See IRM 220.127.116.11.1(3)c, TE/GE Division Organization and Management, TE/GE Roles and Responsibilities. In addition to contacting TIGTA, elevate the occurrence of such contact up the chain of command for informational purposes.
Referral Classification Specialists (Classifiers) review and sort the incoming information items.
Classifiers store electronic data on the Dallas shared drive and prepare the Incoming Referral Cover Sheet. See Exhibit 4.75.5-1.
A tax examiner (TE):
Uses the Incoming Referral Cover Sheet to input the referral information into Reporting Compliance Case Management System (RCCMS).
Uploads referral documents to RCCMS from the Dallas shared drive.
Moves the completed referral to the unassigned inventory folder.
Mails acknowledgement letter to third party informant. See IRM 25.27.1, Third Party Contact - Third Party Contact Program.
The TE places the case in "classifier" status within 30 days of receipt.
Classifiers work referrals from the unassigned inventory on a first in, first out basis.
The classifier determines the entity type as one of the following:
An organization recognized as tax-exempt and described under IRC 501(c) or IRC 501(d)
A church or other organization described in IRC 508(c)(1)
A political organization
A taxable private foundation
An EO Business Master File (BMF) status 36 organization (self-declarer of tax-exempt status)
An EO BMF status 40 organization
An IRC 4947(a)(1) non-exempt charitable trust
An IRC 4947(a)(2) split-interest trust
A disqualified person, self-dealer, manager, donor or donor advisor for purposes of Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the IRC
A whistleblower as described in IRM 4.75.4, Exempt Organization Examination Procedures - Case Selection and Delivery, and IRM 25.2.2, Information and Whistleblower Awards, Whistleblower Awards.
If the classifier determines the referred entity isn’t any of the types listed in paragraph (6) above, the mis-routed information item is given to the TE who then routes it to the appropriate division.
The classifier determines whether the information item:
Has audit potential based on the available information.
Should be considered in a future year.
Needs additional information before a decision can be made.
Should be referred to the EO Political Activities Referral Committee (PARC) (See IRM 18.104.22.168).
"Status 97" indicates an automatic revocation on the EO BMF status code field. With the passage of the Pension Protection Act of 2006, tax-exempt organizations that fail to file an annual return or electronic postcard (Form 990-N) for three consecutive years are subject to automatic revocation of tax-exempt status. Classifiers shouldn’t select status 97 referrals for audit unless there is a compelling reason.
If the classifier identifies information items having audit potential, a closing record is created and the interim action code is updated to "pending" . The case is transferred to Group 7998 where it remains until assigned to a field group.
If an audit isn’t warranted, the classifier creates a closing record and closes the referral on RCCMS (status 90).
A designated classifier reviews all Specialist Referral System (SRS), fraud, Financial Investigative Unit (FIU), and Criminal Investigation (CI) cases. The classifier reviews incoming information items on a daily basis and identifies those requiring prompt handling. All classifiers are cross-trained to review these types of information items.
An authorized classifier name-checks suspected terrorist connections against the Specially Designated Nationals (SDN) list at Office of Foreign Assets Control website. If confirmed, the authorized classifier will bring the information to the attention of the Referrals’ unit manager who works with FIU to process the information item accordingly.
In cases of uncertainty, the initial classifier or the Referrals Group Manager may recommend information items to be reviewed by a peer review team of three other classifiers within the EO Referrals Group.
The tasks necessary to process information items will be completed within the following time frames:
Actions to be completed Time frame*
• Initial mail categorization (including identification of entity and appropriate process)
• Creation of referral on RCCMS in "classifier" status
• Acknowledgement letter to external informants
• Transfer to unassigned
30 days The classifier:
• Makes a determination
• Completes RCCMS record
75 days *All deadlines are counted in business days after the date of receipt in EO Referrals Group
Classifiers in the EO Referrals Group will refer information items containing evidence or allegations of political or lobbying activities to the Political Activities Referral Committee (PARC).
Information items that contain one or more of the following criteria, along with implied or explicit allegations of impermissible political or lobbying activities may also be referred to the PARC:
Items submitted by a member of Congress (or congressional staff)
Sensitive cases (e.g., the information was submitted by an elected official (other than Congress or the Executive Branch))
Other factors indicating that review by the PARC would be desirable for reasons of fairness or integrity
The PARC is composed of three members selected at random from a pool of all EO Examinations and Ruling and Agreements front-line IR-04 managers. Each member receives appropriate training and serves on a PARC for 24 months as a collateral duty. The volume of political activity referrals received will determine the number of PARCs established and the time commitment of the members.
A PARC’s responsibility is to consider the audit potential of referrals in a fair and impartial manner. PARC members are expected to use their experience, judgment and concern for fairness in making this determination.
Classifiers will follow normal referral case-building procedures prior to submitting a referral to a PARC. This includes, but is not limited to:
Completion of the Classification Lead Sheet Exhibit 4.75.5-2
A PARC will determine audit potential based on whether information establishes a "reasonable belief" that warrants further action by the Service. To meet the "reasonable belief" standard, the information needs to:
Show a violation of EO tax laws may have occurred
Appear likely to lead to the discovery of a violation of EO tax laws upon audit
Two out of three PARC members must make a forwarding recommendation (majority rule) for the referral to be forwarded to an EO Examination group.
PARC members will use RCCMS to document their activities and conclusions.
The peer review team is a team of three classifiers within the EO Referrals Group rotated on an annual basis. The peer review team will be responsible for reviewing high-profile referrals.
High-profile referrals include information items containing or involving the following:
Evidence or allegations of non-compliance involving a church
Evidence or allegations of financial transactions with, including contributions to, individuals or organizations with known or suspected terrorist connections
High-impact issues (e.g., the decision may result in media attention)
For more information on churches or organizations claiming to be a church, see IRM 22.214.171.124.2, Church Information Referrals.
Two out of three peer review team members must make a forwarding recommendation (majority rule) for the referral to be forwarded to an EO Examination group.
All classification referrals will be maintained on RCCMS.
RCCMS allows management to track:
The date the information item was received by IRS and Referrals.
The source of the item.
Who made the decision to audit, or not, and the reason.
The present location of the item.
Referral determination and issue codes.
The following items are kept for seven years on RCCMS from the last action date on the file:
Information items and related documents
Incoming referral cover sheet
Once the classifier recommends a referral for audit, the EO Referrals Group will transfer the RCCMS controls to Case Selection and Delivery (CS&D).
When the referral is pulled for a case order, CS&D establishes the case on Audit Information Management System (AIMS) and transfers the RCCMS controls to the assigned field audit group.
Other operating divisions submitting EO information items should do so by using Form 5666, TE/GE Referral Information Report, or any other equivalent information report. EO information items should be sent to:
Internal Revenue Service
EO Referrals Group
1100 Commerce St.
Dallas, TX 75242
|Cat Code/Referral type|
|IRS received date|
|*Class received date|
|Form 13909 __|
|Source document||Form 3949A __|
|Form 5666 __|
|Classifications Lead Sheet for Committee Cases|
|COMPLETED BY REVENUE AGENT (Sections I - III)|
|SECTION I - RECOMMENDATION|
|Not Selected||Selected||Other Actions Deemed Necessary|
|RECOMMENDATION: Referred Issue/Facts/Law/Conclusion|
|FORM 990 REVIEW/EXAM POTENTIAL/LARGE UNUSUAL QUESTIONABLE ITEMS|
|SECTION II - WEBSITE INFORMATION|
|Does the organization have a valid website? If so, enter web address:|
|Describe contents (activities, programs/services) and list any significant items of interest (upload relevant information to RCCMS)|
|SECTION III - OTHER RESEARCH|
|Search for information regarding the EO, Related EO, and Interested Individuals|
|Internet Search||Date||Research and Issues Found (upload relevant information to RCCMS)|