4.75.10 Exempt Organization Pre-contact Procedures

Manual Transmittal

November 14, 2019


(1) This transmits revised IRM 4.75.10, Exempt Organizations Examination Procedures, Exempt Organization Pre-contact Procedures.

Material Changes

(1) Renamed IRM 4.75.10, Exempt Organizations Examination Procedures, EO Pre-Audit Procedures to Exempt Organizations Examination Procedures, EO Pre-Contact Procedures.

(2) Revised IRM, Statute of Limitations to include IRM; IRM, IRM and, Federal, State and Local Governments, Statute Control Procedures

(3) Revised IRM Audience, to list position titles instead of General Schedule series.

(4) Revised IRM, Acronyms by adding additional terms.

(5) Revised IRM, Related Sources to correct IRM titles.

(6) Removed references to Form 5772 in IRM, IRM, IRM, and IRM

(7) Revised IRM to correct online search information.

(8) Removed IRM 5772, EO Workpaper Summary to comply with Interim Guidance Memorandum, Elimination of requirement to use Form 5772 on EO examinations and modifications to Form 5773, dated April 3, 2019.

(9) Expanded the items considered large, unusual, and questionable in IRM

(10) Revised IRM instructing the use of transmittal Letter 5464, when issuing follow-up IDRs.

(11) Revised IRM and IRM to be consistent with Service-wide requirement to use the entire 10 digits of the SmartID card badge in written and verbal communications with taxpayers. See IRM Examination of Returns, Overview of Examiner Responsibilities: Personal Identification Number and IRM Taxpayer Contacts, Information Returns Reporting Procedures: Communications.

(12) Renamed title name from EO Examination Classification to CP&C EO Referrals in IRM

(13) Revised Exhibit 4.75.10-2, Basic IDRS Information for the EO Revenue Agent.

(14) Revised Exhibit 4.75.10-6, Sample Form 5773.

(15) Revised Exhibit 4.75.10-12, Correspondence Rules removed references to Form 5772.

(16) Incorporated Interim Guidance Memorandum, Elimination of requirement to use Form 5772 on EO examinations and modifications to Form 5773, dated April 3, 2019.

(17) Updated to meet the requirements of P.L. 111-274 (H.R. 946), the Plain Writing Act of 2010. The Act states writing must be clear, concise, well-organized, and follow other best practices appropriate to the subject or field and intended audience.

(18) Replaced the term agent with examiner.

(19) Replaced the term audit with examination/examine.

(20) Removed IRM Exhibit 4.75.10-1, Cross Reference IRC of 1939 to IRC 1986.

(21) Removed IRM Exhibit 4.75.10-3, Alpha Code PP - Examples of Proper Use.

(22) Removed IRM Exhibit 4.75.10-5, Sample Form 5772.

(23) Removed IRM Exhibit 4.75.10-8, Risk Analysis Examples.

(24) Removed IRM Exhibit 4.75.10-9, Sample Risk Analysis Workpaper.

(25) Removed IRM Exhibit 4.75.10-10, Form 14264, Request for EP or EO Determinations Administrative File.

(26) Removed IRM Exhibit 4.75.10-11, Sample 2848.

(27) Updated all reference links.

Effect on Other Documents

This supersedes IRM 4.75.10 dated August 3, 2017.
This supersedes Interim Guidance Memorandum, Elimination of requirement to use Form 5772 on EO examinations and modifications to Form 5773, dated April 3, 2019.


Tax Exempt and Government Entities
Exempt Organizations

Effective Date


Margaret Von Lienen
Director, Exempt Organizations
Tax Exempt and Government Entities

Program Scope and Objectives

  1. Purpose: This IRM focuses on procedures to be performed prior to the initial contact and visitation for a field examination and/or as part of the initial steps in an office correspondence examination.

  2. Audience: The procedures in this IRM apply to Exempt Organizations employees:

    • EO examiners.

    • FSL/ET examiner

    • Tax Law specialist and reviewers.

    • Tax examiners.

    • Front-line examination group managers

  3. Policy Owner: Director, Exempt Organizations.

  4. Program Owner: Exempt Organizations.

  5. Contact Information. To recommend changes or make any other suggestions to this IRM section, email the EO Examinations Mandatory Review office at tege.eo.review.staff@irs.gov.


  1. The primary objective of the EO examination program is regulatory, emphasis on continued qualification of exempt organizations (Policy Statement 4-119, formerly P-7-20). IRM

  2. IRC 7602 gives examiners the authority to:

    1. Examine any books, papers, records or other data necessary to complete an examination.

    2. Take testimony under oath to secure additional needed information.

    3. Issue summons for information necessary to complete an examination.

    4. Ask about any offense connected to the administering or enforcing of the Internal Revenue laws.

  3. Examiners and managers are also responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3).


  1. During an examination, examiners are responsible for:

    1. Analyzing returns assigned for examination.

    2. Preparing an examination plan.

    3. Identifying all potential issues disclosed on the return.

    4. Setting the proper scope for the examination.

    5. Asking appropriate questions during the initial taxpayer contact.

    6. Preparing a clear, concise, and appropriate initial Form 4564, Information Document Request.

    7. Requesting appropriate taxpayer documents to be received and reviewed in advance of the site visitation.

    8. Developing appropriate interview and internal control questions prior to the field visit.

  2. Examiners and managers are also responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3).


  1. The table lists commonly used acronyms and their definitions.

    Acronyms Definition
    ABA American Bar Association
    AIMS Audit Information Management System
    AMDISA Audit Management Display Information System
    ASED Assessment Statute Expiration Date
    BMF Business Master File
    BMFOLI Business Master File Online
    BRTVU Business Return Transaction View
    CAF Central Authorization File
    CAWR Combines Annual Wage Reporting
    CC Command Code
    CCR Case Chronology Record
    CD Compact Disc
    CFOL Corporate Files On-line
    CPA Certified Public Accountant
    CP&C Compliance Planning & Classification
    DC Disposal Code
    DLN Document Locator Number
    DVD Digital Versatile Disc
    EIN Employer Identification Number
    EO Exempt Organizations
    EOAR Examining Officer’s Activity Record
    EOE Exempt Organizations Examinations
    EP Employee Plans
    FIT Focus on Issues and Technology
    FOIA Freedom Of Information Act
    GAAP Generally Accepted Accounting Principles
    GM Group Manager
    HSPD Homeland Security Presidential Directive
    IRC Internal Revenue Code
    IDR Information Document Request
    IDRS Integrated Data Retrieval System
    INOLES Inquiry On-line Entity
    IRM Internal Revenue Manual
    IRPTRR Information Returns Processing Transcript
    IRS Internal Revenue Service
    IT Information Technology
    LB&I Large Business and International
    LUQ Large, Unusual and Questionable Items
    MF Master File
    MFT Master File Tax
    NMF Non Master File
    NRP National Research Program
    OCEP Office/Correspondence Examination Program
    PDF Portable Document Format
    PII Personally Identifiable Information
    PIC Principal Issue Code
    POA Power of Attorney
    RCCMS Reporting Compliance Case Management System
    SAS Statement on Auditing Standards
    SB/SE Small Business and Self Employed
    SBU Sensitive But Classified
    SOL Statute of Limitations
    SRS Specialist Referral System
    TC Transaction Code
    TE/GE Tax Exempt and Government Entities
    TEFRA Tax Equity and Fiscal Responsibility Act of 1982
    TEQMS Tax Exempt Quality Measurement System
    TIA Tax Information Authorization
    TIN Taxpayer Identification Number
    UBIT Unrelated Business Income Tax
    WebETS Web-based Employee Technical Time System
    W&I Wage and Investment

Related Sources

  1. The following are related sources that provide guidance on the procedures outlined in this IRM section:

    1. IRM 1.25.1, Practice Before the IRS, Rules Governing Practice Before the IRS.

    2. IRM 4.10.3, Examination of Returns, Examination Techniques.

    3. IRM 4.23, Employment Taxes.

    4. IRM 4.75.5, EO Examination Procedures, Information Items.

    5. IRM 4.75.11, Exempt Organizations Examination Procedures, On Site Audit Guidelines.

    6. IRM 4.75.12, Exempt Organizations Examination Procedures, Required Filing Checks and Package Audit Procedures.

    7. IRM 4.75.13, Exempt Organizations Examination Procedures, Issue Development and Conclusion.

    8. IRM 4.75.15, Exempt Organizations Examination Procedures, Closing Letters and Audit Reports.

    9. IRM 4.75.16, Exempt Organizations Examination Procedures, Case Closing Procedures.

    10. IRM 4.75.21, Exempt Organizations Examination Procedures, EO Special Examinations Procedures.

    11. IRM 4.75.22, Exempt Organizations Examination Procedures, EO Delinquent, Amended and Substitute for Returns Procedures.

    12. IRM 4.75.27, Exempt Organizations Examination Procedures, Office/Correspondence Examination (OCEP) and Exempt Organizations Compliance Unit (EOCU).

    13. IRM 4.75.31, Exempt Organizations Examination Procedures, Conversion of Returns.

    14. IRM 4.75.32, Exempt Organizations Examination Procedures, Declaratory Judgement Cases and the Administrative Record.

    15. IRM, Taxpayer Recording of Interviews.

    16. IRM 10.8.10, Linux and Unix Security Policy.

    17. IRM 11.3, Disclosure of Official Information.

    18. IRM 21.3.7, Processing Third Party Authorizations onto the Centralized Authorization File (CAF).

    19. IRM 25.6.23, Statute of Limitations, Examination Process-Assessment Statute of Limitations Controls.

    20. IRM 25.27.1, Third Party Contacts.

Use of RCCMS

  1. The Reporting Compliance Case Management System (RCCMS) is used to create and control examination cases.

  2. Cases in RCCMS have an electronic copy of the return and / or related research material regarding the case.

  3. Examiners working cases may prepare, develop and store workpapers within the RCCMS system. Users may also use Microsoft Office software and Adobe pdf files, along with forms, letters, and templates in the RCCMS repository.

  4. Examiners may use Leadsheets, in RCCMS, which correspond to each section of Form 5773, EO Workpaper Summary (EO cases) or Form 4318, Examination Workpapers (FSL/ET cases).

  5. Examiners may maintain in-process and completed workpapers in RCCMS and synchronize with the central database. The synchronization works as an automatic backup of stored data files in the central database server.

  6. A RCCMS electronic case file should closely resemble a paper case file’s content. This includes all workpapers and pertinent source documents you use to determine whether there are any issues or changes that you’ll discuss or resolve before you close the case.


    Refer to case file assembly instructions in IRM 4.75.16, Case Closing Procedures.

RCCMS Tracking Codes

  1. Compliance, Planning and Classification (CP&C) inputs tracking codes on all examination cases before they send them to the field.

  2. The tracking codes identify an issue-category for risk-based compliance strategies approach to prioritizing EO examinations.

  3. CP&C also puts the tracking codes on the cover sheet in the examination case file.


    When you pick up and establish additional returns, use the tracking code of the previously established return that generated the pick-up. Don’t change an assigned tracking code.


  1. Following are definitions of terms essential to use this manual:

  2. Case is defined as the primary return (or other selected return) open for examination for one year (or tax period) plus other returns, if any, involving interrelated interests and/or transactions that require concurrent examinations. Other returns include the taxpayer’s returns subsequent and/or prior to the primary return (or other selected return) and returns for related taxpayers for the primary year and subsequent and/or prior years.

  3. Exempt Organization for this IRM includes organizations exempt from federal income tax under IRC 501, IRC 527, non-exempt charitable trusts described in IRC 4947(a)(1) and split interest trusts described in IRC 4947(a)(2).

  4. Information Document Request (IDR) is Form 4564, Information Document Request. Examiners give this form to taxpayers to request documents and written answers to questions. Examiner’s mail, fax, or hand the form to the recipient.


    Before faxing a document to a taxpayer, make sure the authorized recipient is ready to receive the fax to prevent inadvertent disclosure.

  5. LUQ is an acronym for large, unusual, and questionable items.

  6. National Standard Time Frames are a set of time frames established to evaluate the quality of customer service provided during an examination. See IRM 4.8.3, Technical Services, Examination Quality Measurement Staff, Exhibit 4.8.3-1, Quality Attributes and IRM, examinations, Standard #7 Timeliness. The standard time frames are:

    1. 10 days for the examiner to close agreed or no-change cases, counted from the first date that the examiner receives the signed report back from the taxpayer or determines the case is no-change.

    2. 20 days for the examiner to close unagreed cases counted from the final closing conference or after the closing conference was declined.

    3. 45 days between significant activity (30 days for OCEP examinations).


      Significant activities are considered those in which you perform substantial work on a case file or that require a response in writing.

    4. 10 days for the manager to initial/date the case file after receipt from the examiner.

    5. 3 "business" days to respond to phone calls.

    6. 14 days to respond to correspondence.


      All days are calendar days, except when responding to phone calls.

  7. Primary Return is the annual EO information return under EO jurisdiction and the tax returns under the jurisdiction of FSL/ET around which other returns revolve. Primary returns report all aspects of an organization's financial and/or operational activities. The primary return also serves as the return-of-record for statute purposes. The following returns are primary return types:

    • Form 941, Employer’s Quarterly Federal Tax Return.

    • Form 990, Return of Organization Exempt From Income Tax.

    • Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.

    • Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.

    • Form 990-BL, Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Person.

    • Form 5227, Split-Interest Trust Information Return.

    • Form 1065, U.S. Return of Partnership Income (for IRC 501(d) apostolic organizations).


    Form 990-N (e-Postcard) doesn't constitute a return for SOL purposes; however it’s treated as a primary return for disposal code (DC) purposes upon closure.

  8. Related Return is any return of the same taxpayer. However, discrepancy adjustment returns and Forms 4720-A arising from transactions with the EO are treated as related returns for DC and PIC purposes. Related returns need not be of the same tax year as the primary return. Related returns include returns under the jurisdiction of employee plans and tax-exempt bonds. Related returns also include payee information returns and statements, such as Forms W-3 /W-2, Forms 1096 /1099 series, and includes returns such as Forms 8282, Forms 8899, etc., and secured converted returns.

  9. Scope is the extent and boundaries of an examination. In the context of IRS examinations, the scope of an examination incorporates the:

    • Objectives of the examination.

    • Issues identified in the pre-contact and during the examination.

    • Nature and extent of examination procedures to be performed.

    • Tax periods to be examined.

    • Identification of activities which the examination will or won't cover.

  10. Workpaper is a document created by examiners to document:

    1. All examination procedures completed to test account balances being scrutinized.

    2. The "facts, law, argument, taxpayer's position, government's position, and conclusions" of each issue raised.

    3. Any analysis, analytical review, or computations completed to support a proposed adjustment.

  11. See below additional definitions grouped for better understanding.


  1. Administrative File refers to the file folders containing the:

    • Examination reports.

    • Information/tax return.

    • Form 4318, Examination Workpapers Index (FSL/ET cases).

    • Form 5773, EO Workpaper Summary Continuation Sheet.

    • Form 5774, Private Foundation Workpapers (private foundations only).

    • Form 5464, Case Chronology Record (CCR).

    • Form 9984, Examining Officer’s Activity Record (EOAR) (FSL/ET cases).

    • Supplemental workpapers.

    • Correspondence exchanged with the taxpayer. For correspondence rules, see Exhibit 4.75.10-3.

    • Other documents.


    Refer to case file assembly instructions in IRM 4.75.16, Case Closing Procedures.

  2. Administrative Record File refers to the file folders prepared for Counsel in declaratory judgment cases, which may apply to any organization exempt under IRC 501(c), due to the enactment of the PATH Act. See IRM 4.75.32, Declaratory Judgment Cases and the Administrative Record.

  3. Determination Administrative File is a file Rulings and Agreements, EO Determinations, Cincinnati, OH keeps. It contains the:

    • Exemption application.

    • Attachments to the application (articles of incorporation, charter, bylaws, etc.).

    • The initial determination letter (advance ruling letter, if applicable).

    • Any subsequent determination letters (final ruling letter).

    • Amendments to organizing documents.

    • Other historical information.


      The Records Unit no longer processes requests to add materials collected during examinations into the files. However, existing administrative files may be requested through the *TEGE Determinations Processing. Include completed Form 14264, Request for EP or EO Determination Administrative File in the email.

  4. EO BMF Extract is a Business Master File (BMF) list of exempt organizations. The EO BMF Extract doesn’t include "self-declared" organizations. Refer to http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Business-Master-File-Extract-EO-BMF.

  5. Tax Exempt Organization Search is an on-line search tool that allows users to select an exempt organization and check certain information about its federal tax status and filings. Refer to https://www.irs.gov/charities-non-profits/tax-exempt-organization-search. Tax Exempt Organization Search (formerly Select Check) consists of the following databases:

    • Organizations eligible to receive tax-deductible contributions (Pub. 78 data). Subordinate organizations in a group ruling aren't listed in this database. Refer to the EO BMF Extract.

    • Automatically revoked organizations (even if they subsequently acquire a new tax-exempt status).

    • IRS determination letters dated on or after January 1, 2014.

    • Form 990 series returns.

    • Organizations that have filed a Form 990-N (e-Postcard).

  6. On-Line SEIN is a database containing images of all Forms 990, 990-EZ, 990-PF, 990-T, 4720, 1120-POL, and 8872. All images are scanned during processing in the Ogden Service Campus. No portions are redacted.

  7. Filed Forms 8871 and 8872 is used to search for and view copies of all submitted Forms 8871, Political Organization Notice of Section 527 Status, and Forms 8872, Political Organization Report of Contributions and Expenditures (both paper and electronic filings). Refer to http://forms.irs.gov/app/pod/basicSearch/search?execution=e2s1.

  8. Suspensions Pursuant to IRC 501(p) is provided on-line at http://www.irs.gov/charities-non-profits/charitable-organizations/suspensions-pursuant-to-code-section-501p.


  1. IDRS is the Integrated Data Retrieval System, a major application of databases and operating programs that support IRS employees working active tax cases. This system allows IRS employees to take specific actions on 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. Employees take actions via IDRS for:

    • Notice issuance.

    • Installment agreement processing.

    • Offers in compromise.

    • Adjustment processing.

    • Penalty and interest computations and explanations.

    • Credit and debit transfers within an account.

    • Other related accounts and research of taxpayer accounts to resolve taxpayer inquiries and problems.

  2. AIMS is the Audit 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.

  3. RCCMS is the acronym for the Reporting Compliance Case Management System. This system is used for electronic transmission of administrative files between the various examination functions (for example, classification to the examination group to the closing unit and then to special review) as well as the generation of workpapers.


    Refer to electronic case file assembly instructions in IRM 4.75.16, Case Closing Procedures.

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

    1. Establish cases.

    2. Maintain inventory.

    3. Report time as it is applied.


      To access WebETS, visit http://ea.web.irs.gov/ABA/index.html?mainpageurl=SA/ea-panel1_main-application_10651.htm WebETS


Integrated Data Retrieval System (IDRS) Terminology
  1. MF is Master File, a record containing all information for the taxpayer’s filing of returns and related documents. MF can be specified further – such as Individual Master File, Business Master File, etc.

  2. BMF is the Business Master File, which contains information on taxpayers who file business returns (940, 941, 990, 1120, 1065, etc.) and related documents.

  3. NMF is the Non-Master File, which includes those returns that have not yet been programmed to the Master File (MF). This includes Forms 4720-A (MFT 66) and 990-BL (MFT 56). To obtain NMF transcripts, you may email your request to wi.kcspc.nonmaster.file.team@irs.gov or fax request using Form 3210 Document Transmittal, to IRS Accounting Operations ANMF Team, 333 W. Pershing Rd. Kansas City, MO 64999, (888) 981-6483. To follow-up on a request, call (816) 499-5445. Identify an IDRS NMF account by the TIN followed by the letter N.

  4. Command codes (CC) are used to access taxpayer account information through IDRS. The codes consist of five alpha characters in a specific input format. Specific information can be obtained through an additional character called a definer code.

  5. Definer codes are typically alpha characters placed at the end of a command code to obtain more specific information.

  6. MFT is short for Master File Tax, a specific type of account code required in each transaction to identify the specific type of return module to which a transaction is being posted. For example, Form 990 returns have an MFT of 67 and Form 990-T returns have an MFT of 34.

  7. Tax module is the part of a taxpayer’s account which reflects tax data for one tax class (MFT) and one tax period. For example, a taxpayer has filed three Forms 990. The taxpayer has only one account, but three tax modules.

  8. Transaction Codes (TC) are three-digit codes used to identify actions taken on a taxpayer’s account. Transaction codes are most commonly posted to specific tax modules.

  9. Document Locator Number (DLN) is a controlled number assigned to every return or document input through the Account Data Processing system. The fourteenth (last) digit is the year of processing and is assigned by the Campus computer at the time of the original input.

IDRS Command Codes
  1. The first five letters constitute the command code, and the sixth character is a definer code.

  2. AMDISA (Audit Management Display Information System) displays a summary of the AIMS file.

  3. BMFOLI (Business Master File On-Line) gives the status of entity and tax modules, tax module balances, posted return indicators, and IDRS service centers.

  4. BMFOLO provides information on an exempt organization.

  5. BMFOLR is the return information screen, containing a brief summary of key entries from the return.

  6. BMFOLT provides a transcript of transactions on a tax module.

  7. BMFOLU is used to view Combined Annual Wage Reporting (CAWR) information.

  8. BMFOLZ is the examination history screen, displaying the closing codes and assessment amounts of prior examinations.

  9. BRTVU (Business Return Transaction View) provides an in-depth display of business return information. It is only available for the three most recent tax years.

  10. INOLES (Inquiry On-Line Entity) displays the online entity screen, providing much of the same data as BMFOLO. It can be used for any individual or business.

  11. IRPTRR (Information Returns Processing Transcript) provides a hardcopy printout of the requested information returns (Forms W-2, 1099, etc.) issued by an organization. For online transcripts of documents received by a taxpayer, IRPTRO is used.

  12. TXMOD provides a history of a tax module, which can include campus notices issued.

  13. For NMF transcripts, email your request to wi.kcspc.nonmaster.file.team@irs.gov or fax request using Form 3210 Document Transmittal, to IRS Accounting Operations ANMF Team, 333 W. Pershing Rd. Kansas City, MO 64999, (888) 981-6483. To follow-up on a request, call (816) 499-5445. Identify an IDRS NMF account by the TIN followed by the letter N.

Examiner Workpapers

  1. From the start to the finish of an examination, examiners generate workpapers. Upon case assignments, they create case chronologies, using CCRs or EOARs, to document receipt of the files, before even reviewing the files.

  2. Workpapers provide the principal support for the examiner's report. They document the:

    1. Issues identified.

    2. Procedures applied.

    3. Examination tests performed.

    4. Information obtained.

    5. Documents inspected.

    6. Conclusions reached.

  3. Provide adequate documentation in the workpapers for any conclusions drawn.

  4. Quality workpapers have the following characteristics:

    Workpaper Quality Action
    Accurate Use the RGS system for adjustments to Forms 1040 and 990-T, and SB/SE employment tax Excel templates for employment tax assessments.
    Legible Generate all workpapers electronically, as they can be imported into RCCMS. Handwritten workpapers, while still permissible, are required to be legible to other readers. Scan (or digitally photograph) these workpapers to import them into RCCMS.
    Clear Note all steps taken to explain how the conclusion was reached.
    Concise Write concise entries in the Forms 5464 and 5773 (described below). If an entry requires in-depth explanations, create a separate workpaper.
    Organized Assemble closed case files per IRM 4.75.16, Case Closing Procedures.
    Properly Labeled Use RCCMS folders to organize the documents uploaded to RCCMS. See IRM 4.75.16, Case Closing Procedures.
    Professional Avoid prejudice, bias, or animus in any statements concerning any organizations or individuals. The organization can request a copy of the examiner's workpapers through the Freedom of Information Act. Additionally, a court review of the workpapers and other IRS employee statements which are part of an administrative file could result in a finding against the IRS.
  5. Workpapers serve multiple purposes, such as:

    1. Helping reviewers, managers, or others in determining the sufficiency of the examination.

    2. Providing a source of information for subsequent year examinations.

    3. Becoming a part of the administrative record, if shared with the organization, in the event the case is litigated.

  6. Prepare separate case file folders if you examine multiple types of returns.


    Keep all Form 990 in one folder; place Form 990-T in a separate folder; and place Form 941 in another folder. Eachfolder should have its own separate Form 5773 or Form 4318 (FSL/ET cases) and CCR or EOAR (FSL/ET cases). Only one set of forms per folder is necessary.

  7. See IRM 4.75.16, Case Closing Procedures, for instructions on case file assembly and guidelines on organizing electronic records in RCCMS.

Workpaper Preparation

  1. Prepare workpapers from the moment the case is assigned through case closing. Record your actions as soon as you take them.


    Don’t rely on memory. After you conduct the field visitation you generally can’t access the books and records. You rely solely on the copies of documents you made and any workpapers generated during the on-site examination.

  2. The workpapers consist of standardized forms for EO and FSL/ET (Form 4318, 5773, 5464, 9984), examiner generated supporting workpapers, and when appropriate, copies of documents or other materials secured during the examination.

Standard Forms

  1. Prepare the following standardized forms, listed in order of importance, for EO examination cases:

    • Form 4318, Examination Workpapers Index (FSL/ET cases only).

    • Form 5464, Case Chronology Record.

    • Form 5773, EO Workpaper Summary.

    • Form 5774, Private Foundation Workpapers (applicable in private foundation cases only).

    • Form 9984, Examining Officer’s Activity Record.(FSL/ET cases only).

  2. Form 5773 or Form 4318 and Form 5774 present an indexed system of the workpaper material. These forms are designed as working tools for pre-contact planning and to use during the examination. Their purpose is to organize the examiner's workpapers, provide a summary of the findings, and provide reminders as to procedures to perform or issues to consider.

Case Chronology Record (CCR) and Examining Officer’s Activity Record (EOAR)

  1. Use Form 5464 Case Chronology Record (CCR) or Form 9984 Examining Officer’s Activity Record (EOAR) (FSL/ET cases) to record actions taken on the case, contacts made, follow-up dates and time expended. The form is a historical record and a quick reference for Tax Exempt Quality Measurement System (TEQMS) attributes. Update the CCR at the same time you take actions.

  2. Include on the CCR/EOAR all direct examination time charged to the case. The time must agree with the direct examination time as reported on WebETS. When you’re ready to close the case reconcile the total time on the CCR/EOAR and WebETS to the total time on Form 5599, EO Examined Closing Record.

  3. Indicate on the CCR/EOAR the date that you received the case and dates of pre-contact planning activities.

  4. Include in the CCR/EOAR, at a minimum, the following entries for pre-contact work:

    1. Work you performed before taxpayer contact.

    2. Date you put the case in status 12 on AIMS.

    3. Dates IDRS and AIMS research are requested, received, and reviewed.

    4. Dates of conversations with the organization's contact persons and/or representatives and their phone numbers.

    5. Date you mail initial contact letter, initial IDR, and other enclosures.

    6. Appointments scheduled including the date, place, time and contacts.

  5. Include in the CCR/EOAR, at a minimum, the following entries for work performed after initial contact:

    1. Work you performed during and after taxpayer contact.

    2. Dates of contacts with taxpayers, representatives, and third parties, whether in person or by phone.

    3. Date of receipt and processing of Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization.

    4. Date you toured the organization's site.

    5. Dates you sent or received correspondence to/from the taxpayer and/or representative.

    6. Date you issued and received Form 872, Consent to Extend Time to Assess Tax.

    7. Dates you issued and followed up on subsequent IDRs.

    8. Delays or lack of cooperation by the taxpayer and/or representative.

    9. Explanations for delays of significant action on the case by the examiner.

    10. Explanations of any delays in completing the examination resulting from both actions by the IRS (training, details, etc.), and/or the taxpayer/representative.


      Document taxpayer/representative’s lack of cooperation.

  6. Include in the CCR/EOAR, at a minimum, the following entries for management involvement:

    1. Description of GM involvement, including informal discussions about case development and quality.

    2. Dates of formal, in-process case reviews, on-the-job-visitations, and workload reviews. The GM should notate the CCR at the time of involvement.


      As cases are electronic in RCCMS, email your CCR/EOAR to your manager for comments, or note in the CCR/EOAR places for the manager to record approval.

    3. Date you closed the case to GM.

    4. Date GM approved the case for closing.

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

  8. It’s critical to properly document all delays in case the CCR/EOAR is used in an interest abatement case. See IRC 6404(e) to determine if a deficiency is attributable in whole or in part to any unreasonable error or delay on the IRS’s part.

EO Workpaper Summary and Examination Workpapers Index

  1. Form 5773 EO Workpaper Summary (EO cases) or Form 4318, Examination Workpapers Index (FSL/ET cases) are vital elements of the entire examination process. Use the Form 5773 or Form 4318 to:

    • Provide summaries of the planned actions (pre-contact comments).

    • Record the procedures performed.

    • Discuss findings reached.

    • Document examination conclusions.

  2. The header contains the name of the organization, the Taxpayer Identification Number (TIN) and the page number of the Form 5773.

  3. The table that makes up the main body of the workpaper is split into four columns:

    1. The workpaper index.

    2. The items to be verified.

    3. The examination procedures and conclusions.

    4. Workpaper/References.

  4. Each section of the main body of the Form 5773 contains pre-contact comments in each examination topic.

    1. If blank, add proposed pre-contact comments on planned examination procedures.

    2. If comments are listed, revise the comments, as applicable, to the type of examination, entity, and/or issues you expect to encounter.


    When using a pro forma pre-contact plan developed for organizations exempt under a specific IRC section, customize the pre-contact for the organization and return under examination.

  5. In the subsections after the pre-contact comments, summarize the procedures you took and conclusions reached and have fully documented in a separate workpaper. Sometimes, you may not have a separate workpaper, as the findings may be summarized in a single sentence.


    In section C-8, Legislative Activities, an examiner notes that there were no legislative or lobbying activities conducted, nor legislative expenditures.


    Do not use Form 5773 in lieu of a workpaper when you’ve performed an in-depth process. Generally if the summary takes more than five brief sentences, include a separate workpaper in the file.

  6. If an examination subtopic doesn’t apply, enter "Not applicable" or "N/A" in the blank examination procedure/conclusion cell (beneath the pre-contact comments), and explain briefly why it’s not applicable.

  7. Use the fourth column to reference workpapers using an index.


    An examiner indexes the initial interview as C-1-1 through C-1-5 (number pages in the interview). See IRM

  8. Complete the relevant sections of Form 5773 as you complete each workpaper. If you later revise the workpaper, update the Form 5773 to make it consistent with the workpaper.

Form 5774, Private Foundation Workpapers

  1. Use this form in examinations of private foundations. Prepare it in addition to the Form 5773.

  2. Complete Form 5774 as follows:

    1. Consider each "Action" under the "Examination Program Guide" and place an "X" or check mark in the appropriate block for each completed action.

    2. Write a comment in the workpapers for each action you took.

Supporting Workpapers

  1. Prepare workpapers describing the examination techniques, research conducted and the conclusions reached.

  2. Your supporting workpapers consist of:

    1. Descriptions of the issues identified on the Pre-Exam Issue Identification Sheet, in the pre-contact phase, and any pre-planned procedures.

    2. Descriptions of the issues identified during the examination.

    3. Documentation of examination techniques (taxpayer interviews, review of minutes, analysis of financial statements, etc.). Be specific as to what records you reviewed.


      When reviewing travel reimbursements, indicate which travel vouchers were reviewed, whether the expenses were valid expenses, and whether the expense amount tied to the organization's books and records.

    4. Summaries of information provided through interviews, minutes, etc., which you used to draw conclusions about exemption, tax gap, protection of assets other identified issues, or identified on the Pre-Exam Issue Identification sheet.


      A workpaper describing the organization's activities.

    5. Copies of a taxpayer's records used in the analysis of books and records.


      A statement of income and expenses used to reconcile the return to the books.


      See IRM 4.75.11, On-Site Examination Guidelines, for a discussion of copying taxpayer records.

  3. Use judgment in determining workpaper content. Every workpaper in the file should have some relevance to accomplishing the examination objectives.

  4. It’s rarely necessary to have a large amount of transcriptions of minutes or governing instruments in your file. Prepare a brief description of the information in the governing instruments, minutes, etc. Documents can be scanned and saved as supporting documents, if necessary.

  5. You may develop your own format, as long as you include all the necessary information and adequately document the actions you took.

Workpaper Format

  1. Examiner’s workpapers format can vary. However, generally, each workpaper has the following:

    • A heading.

    • A body and conclusion.

    • An index and file name.

  1. Every schedule and workpaper in the case file should contain the following information in the heading:

    • Taxpayer's name.

    • Subject heading.


      The subject can match a subsection title (item to be verified) from the Form 5773 /Form 4318, or can identify an account or item examined.

    • Form number.

    • Year examined.

    • Examiner’s initials (or name) and date.

  2. Examiner’s initials and date can be on the top or bottom of the workpaper. These dates should reconcile to the dates documented on the CCR.


    The date can be either the workpaper start or completion date.

Body and Conclusion
  1. State in the body of the workpaper the examination steps and techniques you performed. Document the tests performed, procedures applied, and/or oral testimony received.

  2. Include in the body of the workpaper any analysis of issues.


    When developing a case for assessing unrelated business income tax, the examiner's workpaper is titled Unrelated Business Income Computations. In the body of the document, the examiner identifies the taxable revenues and related expenses, computes allocations of overhead expenses that are used for both exempt and non-exempt purposes, and calculates the total tax due.

  3. Include in each workpaper, a conclusion summarizing the issue or line item verified and state what action, if any, is needed. If you have multiple workpapers for an issue or line item, state the conclusion on the last workpaper.

Index and File Name
  1. Index all workpapers. Use an index reference on the supporting workpapers that matches the Form 5773 /Form 4318. It’s up to you where to place the index on the workpaper.

  2. Number pages consecutively within each section. A workpaper on "Initial Interview" might be indexed C.1.1. If it requires more than one page, the next pages might be indexed C.1.2, C.1.3, etc.

Multiple Returns

  1. When there are multiple returns in an examination, such as a Form 990 and a Form 990-T, prepare a separate Form 5773 / Form 4318 and separate set of workpapers for each type of return.

  2. The primary case file, generally the Form 990, should contain a complete set of workpapers that adequately addresses all issues raised. Related case files for Forms 990-T, 941, 940, etc. need only contain workpapers relevant to the issues on the related returns.

  3. You may copy and include in the related case files relevant portions of the Form 990 examination file.


  1. Secure confidential information for the case file from unauthorized disclosure. Generally, consider information that wouldn’t be disclosed to the taxpayer, if a request were made under provisions of the Freedom of Information Act (FOIA), as confidential or sensitive in nature.


    Informant’s claims and fraud referrals.

  2. Secure confidential information in To Be Opened by Addressee Only envelopes. Use Sensitive But Unclassified (SBU) Cover Sheet as a cover for the case file, to alert others to the sensitive nature of the information.

General Examination Objectives

  1. The primary objectives for the examination of an exempt organization are to determine if:

    1. The organization is organized and operated in accordance with its exempt purpose(s), thus continuing to be recognized as exempt from federal income taxes.

    2. The Form 990, Form 990-EZ, Form 990-PF, or Form 5227 is complete, correct, and contains all public information required by IRC 6033.

    3. The exempt organization has properly filed all returns and forms for which it is liable. See IRM 4.75.12, Required Filing Checks, for required filing checks.

    4. The exempt organization or its related entities are liable for other taxes and if so, the correct amount of tax under:

      IRC Sections Type of Tax
      511-514 Unrelated Business Taxable Income
      527(f) Political Activities (non-501(c)(3))
      3101, 3111 Federal Insurance Contribution Act (FICA)
      3301 Federal Unemployment Tax (FUTA)
      3402 Income Tax Withholding
      3406 Backup Withholding
      4401, 4411 Gaming Activities
      4911, 4912 Lobbying Activities (501(c)(3))
      4940–4948 Transactions by Private Foundations
      4951–4953 Transactions by Black Lung Benefit Trusts
      4955 Political Activities (501(c)(3))
      4958 Excess Benefit Transactions
      4959 Failures to meet the Community Health Needs Assessment Requirements (501(r)(3))
      4965 Tax Shelter Transactions
      4966, 4967 Transactions by Donor Advised Funds
      4976 Disqualified Benefits from Funded Welfare Benefit Plans
      6033(e)(2) Lobbying Activities (non-501(c)(3)) (Proxy Tax)

Overview of Pre-contact and Pre-Field Visitation Procedures

  1. If, after considering the SOL (see IRM, examination cycle, conflict of interest possibilities, consecutive examinations, repetitive or prior examinations, you decide to survey the return, see IRM 4.75.16, Case Closing Procedures, for survey procedures.

  2. The pre-contact process consists of a number of phases:

    1. Initial analysis.

    2. Drafting the initial IDR.

    3. Completing and sending the appropriate examination letter.

    4. Contacting the taxpayer.

    5. Reviewing taxpayer documents received in advance of the visit.

    6. Drafting the initial interview questions.

    7. Drafting the internal controls questions.

  3. As all cases are transmitted to and from the groups via RCCMS, all returns under examination can be provided as PDF files. These cases are worked within RCCMS, and in certain situations, can be closed as paperless files. Certain types of cases, such as referrals and claims, have historically been sent to groups with the paper referral and the original return.


    Certain procedures that were traditionally acceptable, such as handwritten notes on IDRS prints and Forms 5773, aren't recommended. To ensure that a case can be closed as paperless, upload all workpapers to RCCMS. Include relevant copies of taxpayer documents and handwritten workpapers, if scanned or digitally photographed and uploaded as PDF files.

  4. Time on pre-contact analysis must be commensurate with actions taken. Clearly explain each action and its need. Workpapers and conclusions for issues discovered during the pre-contact analysis become part of the case file.

  5. An important thing to remember is there’s a difference between a preplanning and planning. Planning continues throughout the examination even though you’ve done the pre-contact analysis and a preplan. The initial plan may be amended and supplemented several times during the conduct of a typical examination.

Initial Analysis

  1. A good pre-contact analysis saves time during the on-site examination by helping you:

    • Organize the work.

    • Recognize and concentrate on significant issues.

    • Prepare for the initial appointment.

    • Document the examination's course.

    • Ensure the application of quality examination standards.

  2. The pre-contact analysis helps identify the facts you need to develop during the examination to resolve the identified issues.

  3. Below are initial analysis steps, that are also found on Form 5773, EO Workpaper Summary. The steps are:

    1. Determining the statute.

    2. Requesting the determination administrative file.(optional).

    3. Reviewing information from IDRS.

    4. Analyzing the referral package and any documents received with the case.

    5. Identifying the organizational requirements.

    6. Reviewing the returns and any attached schedules.

    7. Conducting research using additional sources.

  4. Consider whether to consult a specialist on a particular issue.

Statute of Limitations

  1. The protection of the SOL is a high priority for all employees. Once assigned, you are primarily responsible for properly identifying the statute of limitation period in order to protect the government's interests. You are responsible for protecting the SOL on:

    1. Any assigned returns.

    2. Any prior or subsequent year returns if the adjustments to the examination year create adjustments for the prior or subsequent year and an examination of the prior or subsequent year is justified.

    3. Any income, employment, or excise tax returns filed or required to be filed by the organization if the examination of a primary return may result in an adjustment to the tax liability on such tax returns.

    4. Any income or excise tax returns filed or required to be filed by related individuals or entities, if the examination of a primary return may result in an adjustment to the tax liability on such returns.

    5. Civil penalty cases.


    Be familiar with situations where the filing of a primary return by an exempt organization, a private foundation or a non-exempt charitable trust can start the running of the SOL for other returns. Protect the SOL on these returns as necessary.

  2. As soon as a case is assigned:

    • Verify the SOL date.

    • Ensure there’s sufficient time to conduct a quality examination.

    • Verify the SOL date, even if the physical return isn’t in the case file.

    • Protect the SOL for prior and subsequent tax periods and related activities that are open.

    • Monitor and maintain appropriate statute controls.

  3. Review the following sources, as appropriate and document in the case file:

    • IDRS.

    • AIMS.

    • Received date stamped by the campus on the face of the original return.

    • Postmark date on the envelope in which the return was mailed, if attached.


    If unable to determine the actual postmark date and/or received date, use the most conservative date.


    If the statute date on AIMS is incorrect, request correction in RCCMS.

  4. Don’t initiate an examination of a return:

    • With less than 12 months remaining on the SOL.

    • That you can’t expect to complete within the current examination cycle.

  5. If the criteria in (3) applies, but not conducting an examination may result in a. through d. below, get your GM’s approval if you determine an examination should be done. Document the approval and basis for the decision in the CCR/EOAR, the Form 5773 / Form 4318 or a separate workpaper:

    1. Serious criticism of the IRS’s administration of the tax law.

    2. Inconsistent treatment of similarly situated taxpayers.

    3. The establishment of a precedent that seriously hampers IRS subsequent attempts to take corrective action.

    4. The loss of a substantial amount of tax revenues.

  6. Control the SOL on each return assigned. Per IRM, Statute Controls in Examination, perform the following procedures for returns with less than 180 days prior to the statute expiration date. For EO and FSL/ET purposes, do these actions when 270 days remain on the SOL:

    1. Verify the statute date.

    2. Flag the case.

    3. Complete Forms 895, Notice of Statute Expiration.

    4. Notify the GM and taxpayer, as necessary.

    5. Secure a consent to extend the statute when appropriate. Extensions shouldn’t be longer than is needed to complete the examination and to administratively close the case.

    6. Update AIMS.

  7. If you request a consent to extend the statute, advise the taxpayer of their rights to:

    1. Decline to extend the statute date.

    2. Request that any extension be limited to a specific period of time.

    3. Request that any extension be limited to specific examination issues.

  8. Use the proper extension form to extend the SOL:

    Form Form Title Extends
    Form SS-10 Consent to Extend the Time to Assess Employment Taxes The following taxes/forms:
    • Federal Contributions Act (FICA).

    • Federal Unemployment Contributions Act (FUTA).

    • Income Tax Withholding provisions (FITW).

    • Railroad REtirement Tax Act (RRTA).

    • Back-up Withholding (BUWH).

    • See IRM 25.6.22, Statute of Limitations, Extension of Assessment Statute of Limitations by Consent.

    Form 872 Consent to Extend the Time to Assess Tax
    • SOL for Form 990, Return of Organizations Exempt from Income Tax.

    • Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Trust Treated as Private Foundation.

    • Form 990-T, Exempt Organization Business Income Tax Return.

    • Form 1040, U.S. Individual Income Tax Return.

    • Form 1041, U.S. Income Tax Return for Estates and Trusts.

    • SOL for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.

    • Form 1120, U.S. Corporation Income Tax Return.

    • Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 & 42 of the IRC.

    • See IRM, Form 872, Consent to Extend the Time to Assess Tax, for Form 1042.

    • See IRM 25.6.22, Statute of Limitations, Extension of Assessment Statute of Limitations by Consent.

    Form 872-B Consent to Extend the Time to Assess Miscellaneous Excise Taxes
    • SOL for Form 720, Quarterly Federal Excise Tax Return.

    • SOL for Form 730, Monthly Tax Return for Wagers.

    • SOL on IRC 6721 and IRC 6722 penalties.

    • See IRM, Penalties under IRC 6721 and 6722.

    • See IRM 25.6.22, Statute of Limitations, Extension of Assessment Statute of Limitations by Consent.

  9. Give the taxpayer a copy of Publication 1035, Extending the Tax Assessment Period. Document actions you took in the case file.

  10. If you discover a potentially expired SOL, complete Form 3999, Statute Expiration Report.

Responsibility for Preparation of Form 3999
  1. If the statute expires after the case was assigned to you, complete Form 3999 explaining the facts and circumstances with a time line, leading up to the expired SOL.

  2. If the statute expired before you received the return, prepare a "Preliminary Report Form 3999" . Give it to your GM.
    ◂GM: Forward the preliminary Form 3999 to the group/area that had possession of the return when the statute expired.


    Don’t complete Form 3999 if:
    • Total tax, penalty and interest is less than the amount stated in IRM
    • A case is no change.
    • A case is opened on AIMS after the statute has expired.

Instructions for Preparation of Form 3999
  1. When completing Form 3999, be sure to address the following line items:

    Box # Entry
    Box 12
    • (a) Years or periods expired.

    • (b) Date of statute expiration.

    • (c) Amount of deficiency or (overassessment).

    Box 13 "Status and location of return at time of expiration"
    • State the RCCMS and AIMS status code, physical location of the case file and type of employee who had control of the case.

    • Use the location of the return at date of discovery if it is not determinable where a case was on the date of expiration.

    • Include any reference that might indicate location and status prior to expiration.

    Box 14 "The Statute expired because of"
    • This section must show a chronological narrative of the status, location and types of employees controlling or affecting the physical case file since it entered the examination stream.

    • Once this is performed, provide a summary statement referencing these facts and primary and secondary factors resulting the expired SOL.

    Box 15 "Corrective action taken or recommended to prevent recurrence of statute expiration."
    • State systemic or personnel changes to be made to this problem in the future.

    • Include each type of employee and each function considered responsible for the SOL expiration.

    • Explain if disciplinary action was considered and recommended without identifying the responsible employee. The disciplinary action taken will be the subject of a separate report.

    Signature required
    • Manager of the group that identified the expired SOL.

    • Manager of the group that had control of the account the time the SOL expired.

    • FOM (if statute expired in a field group).

    • FSL/ET Manager

Preliminary Report, Form 3999
  1. Boxes 1 through 12 are completed when the preliminary report is submitted.

  2. The Preliminary Report includes a:

    • Brief narrative of why the SOL expired.

    • Time line illustrating the processing of the case leading to the expiration of the SOL.

Final Report, Form 3999
  1. Complete all items including the following additional information:

    • Any change in the facts of the case discovered subsequent to the initial report, (if applicable).

    • Narratives from other affected functions cited in the Preliminary Report, (as applicable).

Determining the Statute of Limitations Expiration Date
  1. Exempt organizations required to file a primary return must file the return by the 15th day of the 5th month (4th month for Forms 5227 and 1065) after the close of their business year. See IRC 6033 to identify exempt organizations required to file primary returns.

  2. The general rule for the SOL expiration date is three years from the due date of the return or the date filed, whichever is later.

  3. The guidelines to determine the three year SOL for assessment are in IRC 7502. The law states that a timely mailed return is treated as timely filed. The Assessment Statute Expiration Date (ASED) is computed as shown below:

    If the return is postmarked: And the return is received: The statute date is based on:
    On or before the normal due date Before, on or after the normal due date Normal due date
    After the normal due date (No extension) After the normal due date Service Center received date
    On or before the extension date (After the normal statute date) On or before the extension due date Service Center received date
    On or before the extension date (After the normal statute date) After the extension due date Postmark date
    After the extension date After the extension due date Service Center received date
  4. For purposes of the SOL, IRC 6501(b)(2) provides a "deemed" filing date for taxes imposed by the following chapters of the Internal Revenue Code:

    • Chapter 3 - Withholding of Tax on Nonresident Aliens and Foreign Corporations.

    • Chapter 4 - Taxes to Enforce Reporting on Certain Foreign Accounts.

    • Chapter 21 - Federal Insurance Contributions Act.

    • Chapter 24 - Collection of Income Tax at Source on Wages.

  5. If a Form 941, Form 943, Form 944, Form 945, or Form 1042 for any period ending with or within a calendar year is filed before April 15 of the succeeding calendar year, the return is considered filed on April 15 of such calendar year. If the return is filed after April 15 of the succeeding calendar year, the period of assessment is three years from the date the return is filed 26 CFR 301.6501(b)-1(b).

  6. The SOL expiration date is extended from three years to six years in the following circumstances:

    1. Income Taxes: If the taxpayer omits from gross income an amount properly includible in excess of 25 percent of the amount of gross income stated in the return, the tax may be assessed without obtaining an extension, at any time within six years after the return was filed. See IRC 6501(e)(1) and 26 CFR 301.6501(e)-1(a).

    2. IRC 4940 Tax: If a private foundation omits from its primary return tax imposed by IRC 4940 an amount of tax properly includible which is in excess of 25 percent of the amount of tax imposed by IRC 4940 which is reported on the return, the tax may be assessed at any time within six years after the return was filed. If a private foundation discloses in its return (or in a schedule or statement attached thereto) the nature, source, and amount of any income giving rise to any omitted tax, the tax arising from such income is counted as reported on the return in computing whether the foundation has omitted more than 25 percent of the tax reported on its return. See 26 CFR 301.6501(e)-1(c)(3)(i) and IRC 6501(e)(3).

    3. IRC Chapter 41 and 42 Excise Taxes (Other than IRC 4940): If a public charity or a private foundation, trust, or other organization, as the case may be, fails to disclose an item subject to tax under IRC 4911, IRC 4912, IRC 4941(a), IRC 4942(a), IRC 4943(a), IRC 4944(a), IRC 4945(a), IRC 4951(a), IRC 4952(a), IRC 4953, and/or IRC 4958 in its primary return (or a schedule or statement attached thereto), the tax arising from any transaction not disclosed may be assessed at any time within six years after the return was filed. See IRC 6501(e)(3), 26 CFR 301.6501(e)-1(c)(3)(ii).


      Never rely on the existence of a six-year statute without the concurrence of Area Counsel, as documented in a counsel memorandum or secured e-mail (attached to Form 895).

  7. As a general rule if no return is filed, the SOL doesn't start to run. Primary returns filed by a public charity, private foundation, or non-exempt charitable trust are an exception to the general rule as the filing of a primary return by these entities starts the running of the SOL for some income and excise tax returns in the circumstances described below:

    1. The filing of a primary return which discloses sufficient facts to apprise the IRS of the potential existence of unrelated business taxable income begins the running of the period of limitations on assessment of tax on Form 990-T. Rev. Rul. 69-247, 1969-1 C.B. 303.

    2. The filing of a primary return which discloses sufficient facts to apprise the IRS of the potential existence of tax on political expenditures may begin the running of the period of limitations on assessment of tax on Form 1120-POL even though Form 1120-POL was not filed based on the rationale applied to unrelated business income in Rev. Rul. 69-247, 1969-1 C.B. 303.

    3. A primary return filed by a public charity, a private foundation, a non-exempt charitable trust, or a IRC 501(c)(4) starts the running of the period of limitations on the assessment of excise tax on a Form 4720 filed or required to be filed by the organization, private foundation or trust and on Forms 4720 filed or required to be filed by foundation managers and/or disqualified persons. The filing of the primary return starts the running of the period of limitations on assessment of excise tax on Form 4720 even if the transaction, act, or failure to act that gives rise to the excise tax on Form 4720 isn’t disclosed on the primary return. The filing of a Form 4720 by the organization, foundation manager or disqualified person doesn't start the running of the SOL. See IRC 6501(l)(1) and 26 CFR 301.6501(n)-1.

    4. The filing of a primary return by a taxpayer, who determines in good faith that they are an exempt organization under IRC 501(c), starts the running of the SOL, if the organization is later held to be a taxable organization. See IRC 6501(g)(2) and 26 CFR 301.6501(g)-1(b). (Applies to both organizations ruled as exempt by EO Determinations and to AIMS status 36 cases.)

  8. The filing of a Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, doesn't start the running of the SOL. The Form 990-N is recorded on BMFOLT with a Transaction Code (TC) 150 and a DLN sequence that begins with "93489" . The Form 990-N isn’t actually a form, and doesn't constitute a return for statute purposes. However, for DC purposes, Form 990-N is treated as a primary return.

  9. An amended return doesn't extend the statute expiration date unless the return meets both of the following conditions:

    1. An income tax return received within 60 days before the ASED.

    2. The amended return shows the taxpayer owes additional tax.

  10. If an amended return meets both conditions in IRM (9), the assessment period is extended to 60 days after IRS receives the amended return. See IRC 6501(c)(7).

  11. A substitute for return prepared by the IRS, under the authority of IRC 6020(b), is treated as if no return was filed. If a taxpayer signs an IRS prepared return, it becomes a regular return and the SOL begins on the signature date.


    See IRM, Substitute for Return Package, for instructions on the preparation of a substitute for return package.

  12. An incomplete return may not start the running of the SOL. Under the present case law, the following factors must exist for the return to be valid.:

    1. There must be sufficient data to calculate the tax liability.

    2. The document must purport to be a return.

    3. There must be an honest and reasonable attempt to satisfy the requirements of the tax law.

    4. The taxpayer must execute the return under penalties of perjury.


    These factors don't take into account the processing concerns that an incomplete return presents for the Service. Therefore, approach any question concerning the validity of a return missing a form or schedule with the presumption that there’s sufficient data to calculate the tax liability.

  13. See IRM 25.6.23, Examination Process - Assessment Statute of Limitations Controls, for additional guidance concerning statutes.

Statute of Limitations: Assessment Statute Expiration Date (ASED) Alpha Code "PP"
  1. Use ASED alpha codes to indicate that special conditions exist that affect a statute expiration date. See IRM Exhibit 25.6.23-3, Instructions for Updating the Statute on AIMS.

  2. If authorized, you can use alpha code PP for TE/GE non-taxable returns, if there is no income tax, such as an MFT 67 converted to a taxable return.

Alpha Code "PP" Authority
  1. The authority to approve updating the ASED to alpha code PP is granted as follows:

    Authority # Authority Delegated to Approving Documents
    1 Form 990-N Group Manager On Form 895
    2 Form 990 or Form 990-EZ.

    Area Manager On Form 895
    Memorandum of Explanation
    3 Form 990 or Form 990-EZ in Mandatory Review’s (MR’s) inventory The Manager, MR with returns in his/her inventory with less than 270 days remaining before ASED. On Form 895
Authority #2: Conditions for Approval
  1. You must satisfy the following conditions before using alpha code PP:

    1. Only Form 990 or Form 990-EZ is eligible. Don’t include those filed by private foundations by mistake.

    2. Request must be made to the area manager with no less than 60 days remaining on the statute, andno more than 270 days remaining on the statute.

    3. All reasonable attempts were made to extend the ASED and documented the reasons for not extending.

    4. Certain the Form 990 or Form 990-EZ won’t convert to a tax return (Form 1120, 1041 or 990-PF).

    5. Certain that if there’s to be a converted return, the tax will be within the tolerance described in IRM (1)a.

    6. Have a valid reason to keep the Form 990 or Form 990-EZ examination open. Simply needing or wanting more time to close an examination without further justification isn’t a valid reason to use alpha code PP.


      A valid reason includes your need to further develop the facts for the examinations of related returns, which are best gathered within the context of the Form 990 examination. Note than an examination of a related return could affect the findings of the Form 990 examination.

Authority #2: Steps for Obtaining Approval
  1. Follow the steps below for obtaining approval to use alpha code PP:

    1. Examiners. Obtain Area Counsel’s written opinion on the use of alpha code PP. Area Counsel requires 45 days to provide a written opinion. Submit your request for a written opinion in enough time to allow your manager to comply with the timeframe window in the previous paragraph.

    2. Examiners. Prepare, sign and date a memo of explanation certifying that the conditions in the previous paragraph were satisfied (except for the timeframe condition).

    3. GMs. Within 7 calendar days of receipt, approve the request by signing and dating the memo. Submit the memo to the area manager. The area manager won’t accept a request if it isn’t received within the timeframe window in the previous paragraph.

    4. Area Managers. Within 7 calendar days of receipt, approve the request by signing and dating the memo. A non-response is not approval.

    5. Examiners. If approved, immediately update the statute date to alpha code PP on AIMS, RCCMS and on Form 895. Attach the memo to Form 895 and log the approval on CCR..

Authority #2: Memorandum of Explanation
  1. Include the following items in Memo of Explanation:

    • The returns and years for which alpha code PP is requested

    • Estimate of any penalty for each return, and a description of reasonable cause if so established

    • Actual statute expiration date for each return

    • The reason for the request to use alpha code PP

    • The examination steps and issues that remain, and an estimated closing date

    • The dates a statute extension was solicited

    • An explanation why a statute extension wasn’t needed or wasn’t executed after extension requests

    • Statement of certainty the Form 990 or 990-EZ won’t result in a converted tax return

    • If there will be a converted income tax and penalty, an estimate of the tax and penalty. See IRM, Determination of Tax Liability

    • Signature lines for the examiner, GM, and area manager

    • Attach area counsel’s written opinion

  2. The use of alpha Code PP doesn’t relieve you from carefully monitoring normal statute expiration dates for all examined returns.

Request the Determination Administrative File

  1. When an organization applies for exempt status, the application, related paperwork, and the disposition of the application are retained. This file is referred to as the "determination administrative file." In the pre-contact planning stage, secure and request a copy of the organization's determination administrative file. This helps you determine whether the organization is operating in the manner for which it was originally given exemption.

  2. Cincinnati will send the determination administrative file via OCS, CD-ROM, or secured email.

  3. Receipt of the determination administrative file isn’t necessary before the initial contact. When you receive the file see IRM

Request and Review of IDRS Information

  1. For basic information on EO examinations and researching the IDRS account information, see Exhibit 4.75.10-1 Examiners without IDRS access are to use the forms listed in the exhibit to request basic information and submit to their manager for approval. The manager then forwards the form to a designated individual with IDRS access to do the research.


    Become familiar with restrictions on accessing taxpayer information and the applicable penalties for misuse. See Exhibit 4.75.10-1 for a summary.

  2. At a minimum, IDRS research requests should include AMDISA, BMFOLO/INOLES, BMFOLI, and BMFOLT. BMFOLR, BRTVU, and BMFOLU as needed to provide supplemental information. For specific command codes, use the IDRS Command Code Job Aid, at http://serp.enterprise.irs.gov/databases/irm-sup.dr/job_aid.dr/command-code.dr/idrs_command_codes_job_aid.htm.

  3. Use the table below to see common command codes and the information they produce:

    Use Command Code: Verify These Items:
    1. Establishment of the case on AIMS

    2. Name

    3. Address

    4. Return received date

    5. Status code

    6. Source code

    7. Activity code

    8. Project code

    9. Statute date

    1. Current name of the organization

    2. Address of the organization

    3. Group exemption number (GEN)

    4. Exemption subsection

    5. Foundation status (if applicable)

    6. Ruling date of the determination letter

    7. Lobbying election

    8. Filing requirements


    INOLES additionally provides the previous fiscal year month and any cross reference Taxpayer Identification Numbers.

    1. Activity codes

    2. Pension plan indicator

    3. Deductibility code

    4. National Taxonomy of Exempt Organizations (NTEE) code


    Find the NTEE codes at http://nccs.urban.org/classification/NTEE.cfm, which provides an overview of the NTEE system, a search engine, and a full list of the NTEE codes.

    1. Which returns were filed.

    2. Which returns have a current balance due.

    3. Which returns have been fully paid.

    4. Which returns are delinquent.

    5. The existence of civil penalties.


    If the organization filed related returns, review BRTVU or BMFOLR printouts of the related returns if available on-line.

    1. Return received date.

    2. Amount of tax paid.

    3. Determine if there is an amended return available.

    4. Whether penalties have been assessed.

    5. Whether there is a representative on file in the CAF.


    If there is a CAF indicator, request the detailed information.


    If a Form 990-N was filed, the DLN starts with "93489" .

  4. To obtain NMF transcripts, you may email your request to wi.kcspc.nonmaster.file.team@irs.gov or fax request using Form 3210 Document Transmittal, to IRS Accounting Operations ANMF Team, 333 W. Pershing Rd. Kansas City, MO 64999, (888) 981-6483. To follow-up on a request, call (816) 499-5445. Identify an IDRS NMF account by the TIN followed by the letter "N."

  5. The explanation of the codes displayed in BMFOLO and INOLES can be found in Document 6379, Exempt Organizations Management Information Systems Codes.

  6. Verify the taxpayer filed all returns they are liable to file, including prior and subsequent year returns.

  7. Determine if the organization has any past due balances. If they do, this might be something to investigate further during the examination. Consider whether inurement or private benefit played a role in the organization being unable to pay the balance.

  8. Consider all returns filed by the taxpayer. Some may not necessarily appear under filing requirements. These include related entity returns, employment tax returns, information returns, excise tax returns, pension plan returns, and political returns. This is important when drafting the initial IDR.

  9. Use three additional command codes depending on the issues presented in the case file. These command codes are BMFOLU, PMFOLS, and IRPTRR.

    1. BMFOLU provides the Combined Annual Wage Report information, matching the Forms 941 to the Form W-3 and the Forms W-2. If Forms 941 have been filed, the second through fifth screens give the tax amounts reported each quarter, and the sixth screen provides the total number of Forms W-2 filed.

    2. PMFOLS displays the total amounts reported on the Payor Master File system, presenting the total compensation paid on Forms 1099.

    3. IRPTRR is used to request transcripts of any and all information returns, such as Forms W-2 and 1099.

  10. IRPTRR prints can be sent to the RICS (Return Inventory Control System) using destination code R. To get IRPTRR prints sent to RICS, contact an examination Planning and Review analyst.

  11. Document the pertinent information reviewed and conclusions reached. You may document this information in a pre-contact workpaper, on the IDRS/AIMS printouts or in the appropriate sections of Form 5773 / Form 4318. If marked on the IDRS printouts, scan and upload the documents to RCCMS, unless the markup is performed within a PDF file.

Filing Check

  1. A filing check is verifying the filing of a return.

  2. A filing check can be as simple as reviewing IDRS printouts with return information, such as BMFOLI and BMFOLU, but may also include inspecting filed returns, BRTVU prints or images of filed returns, obtained first from non-taxpayer sources.

Conducting Filing Checks
  1. Examiners must:

    1. Conduct filing checks for both full scope and focused examinations.

    2. Determine whether the taxpayer complies with federal tax and information return filing requirements.

    3. Ensure returns within the taxpayer’s sphere of influence have been filed.

    4. Assess examination potential.

Characteristics of a Filing Check
  1. A filing check is used to determine voluntary compliance with filing requirements.

  2. Requires minimal time.

  3. Doesn’t require a supplemental workpaper, but an explanation of the work completed on Form 5773, Section G / Form 4318, Section 130.

  4. May include the inspection of actual returns, BRTVU prints or images of filed returns, obtained from non-taxpayer sources.

  5. Always required for annual returns and notices and employment tax returns.


    Waiving a Filing Check requires managerial approval and documentation.

Review of the Classification Sheet or Referral Package

  1. Review other documents that accompany the return, including:

    1. Classification sheets.

    2. Other information, such as referral packages.

  2. If items are identified on the Classification sheets, document the decision as to whether to examination the items.

  3. If the examination is a referral, consider what information to obtain to address the issues raised and determine the viability of the referral. Consider a third-party contact with the informant if warranted.

  4. If the group receives a fed/state referral case per IRM

    • The GM immediately evaluates the case, and per the Annual Examination Program Priority Memorandum, assigns it to an examiner.

    • The examination GM and examiner determine the appropriate examination technique.

    • A referring official may invite the IRS to review and copy documents in the fed/state official investigative files. The assigned examiner coordinates with the EO Fed/State Liaison to do this.

Organizational Requirements

  1. Before you review a primary return, or Form 990-T, it is important for you to become familiar with the requirements for exemption for that entity, as well as any related issues of a taxable nature (employment taxes, unrelated business income, excise taxes, etc.).

  2. Create a workpaper briefly documenting the various requirements and examination guidelines for the type of organization. Include a brief summary of the key requirements on Form 5773.

Review of the Return

  1. Review the return for completeness to determine if all required line items and attachments are present. If information is missing, make a note to question the organization and organization's representative and obtain it.

  2. Review schedules, statements, extensions and return attachments for questions and possible issues:

    • Do the yes/no questions raise any issues?

    • If the organization is a public charity, is the public support schedule complete?

    • Does the taxpayer information agree with the EOBMF information?

    • Was the return timely filed? If not, did they obtain as approved extension?

  3. Use Form 5773 / Form 4318, to note potential examination concerns as you review the return.

  4. Review the organization's statement of accomplishing its program services.

  5. Analyze the income sources such as "other revenue."

  6. Review the compensation section to determine if compensation is reasonable or if there are questionable sources of compensation.

  7. Consider any LUQ items. LUQ should include anything unusual that potentially impacts tax-exempt status or foundation status. LUQ items include income, disbursements, assets, liabilities and fund balance. Document the reason for any LUQ item that wasn’t considered an issue. LUQ items fall into at least four categories:

    1. Dollar amount - The item may be a large dollar amount or it may be unusual or disproportionate to the income or disbursements shown on the return. It might be a large or unusual expense for the type of organization.


      If the return shows total disbursements of $30,000, $6,000 paid in legal fees might be significant.

    2. Description on the return - It may not be possible to determine the validity of the item based on the way it is described on the return.


      The return shows $30,000 of disbursements classified as miscellaneous.

    3. Presence on the return - Some items shown on the return invite close scrutiny simply because they are there.


      The balance sheet for liabilities lists $50,000 under Loans from Officers.

    4. Absence from the return - An item may be unusual because it doesn't appear on the return.


      The balance sheet for assets of an IRC 501(c)(7) organization lists $75,000 in cash but shows no interest or dividend income.

  8. Review the return for missing items. Are items that you would expect to find on the return not there? Check the math. What appears to be an error may actually indicate a missing item.

  9. Look for indications of activities that may affect exempt status or tax liability.


    If the return reports substantial expenses for publications, look for advertising income.

  10. Obtain the prior and subsequent years' returns from On-Line SEIN, either by your own direct authorized access, or by asking your manager, who assigns the request to an authorized employee to retrieve the files and print them to PDF.

  11. Using the Forms 990, complete an analysis, comparing the changes in the revenues, expenses, assets, and liabilities over the three-year period, looking to identify any large or questionable differences. Recognize any trends, either positive or negative, that are present or developing during the three years.

  12. Make note of any items identified that you should incorporate in the initial interview.

Full Scope Examination
  1. A full scope examination requires the examiner to consider all classified issues, LUQ items, and item categories on Form 5773 to determine compliance.

  2. A full scope examination doesn’t mean all issues and items warrant an in-depth review, only that you consider all issues and items with written comments, to determine which items do require an in-depth review.

  3. Full scope examinations are performed only when the facts and circumstances warrant (such as fraud, egregious non-compliance, undisclosed transactions and certain training cases) or when directed.

Focused Examinations
  1. A focused examination is limited to one or more issues that have been pre-identified during a return’s screening, classification or selection process and consideration for LUQs.

  2. It may or may not include an inspection of organizing documents.

  3. Every examination is a focused examination, unless directed to conduct a full scope examination.


    The terms "single issue examination" and "limited scope examination" are obsolete.

Risk Analysis
  1. Risk analysis is a subjective process that compares the potential benefits to be derived from examining an item to the resources required to examination the item.

  2. There is no standard format for a risk analysis. However, any risk analysis includes considering the following:

    Key element Description
    Workpaper reference This ties the risk analysis to the examination plan and/or workpapers.
    Description of the LUQ A brief, but clear description of the issue should be provided.
    Materiality of the issue An assessment of the various relevant materiality factors considered.
    Estimated time to complete An estimate of the time it may take to examination the issue.
    Estimated completion date The estimated date by which the examination of the item should be completed.
    Prioritization The prioritization of the LUQs, often from lowest to highest priority based upon materiality.
    Decision to or not to examination an LUQ A clear yes or no as to whether the issue is to be examined.
    Reasons for selection or non-selection of LUQ for examination Comments and information on why an issue was or wasn’t selected for examination. This is also an excellent place to provide any materiality thresholds that are to be applied to LUQs selected for examination.
  3. Both the examiner and the manager are responsible to do a risk analysis on every examination case. The level of the sophistication of risk analysis depends on the case’s size and complexity and resources being considered for the examination. Depending upon the circumstances, this may range from notations in the CCR or workpapers to a formal risk analysis document.

  4. Materiality is used in risk analysis to prioritize the issues and LUQ items being considered, and to focus on the items of greatest compliance concern. Materiality is both a qualitative and quantitative assessment we use to identify items which are most relevant and consequential in determining:

    1. Continued tax exempt status.

    2. Overall accuracy and completeness of the primary EO information return (Form 990, 990-PF, etc.).

    3. Correct tax liability (income, employment, excise).

  5. The process of evaluating materiality should be consistently applied, but the result is different for each case. Absolute parameters can’t be established or used for every case because of the differences in size, complexity, and exempt status of the organization’s returns being examined, as well as the differences in the experience and professional judgment of the examiners and managers.

  6. In assessing an issue or LUQ’s materiality, consider the factors listed below. This isn’t an exhaustive list and there may be other relevant materiality factors that you should consider.

    Factor Consider
    Significant dollar impact
    • Dollar value of item (sheer size of an item often has a direct impact on materiality).

    • Relative dollar value of an item (% of assets, income, expenses, etc.).

    Compliance impact
    • The item’s potential to affect tax exempt status.

    • The item’s potential to affect the overall accuracy of the return being examined.

    • Adjustments in tax (990-T, 990-PF, 940, 941, etc.).

    • Future compliance impact (immaterial in the current year, but significantly more material in future years – for example, a net operating loss).

    Duration of issue
    • Does the issue extend to years beyond the year being examined, or is it a one time event?

    • Permanency - is the adjustment permanent or will it reverse itself in the future?

    • Timing (for example, items of income or deduction reported in the wrong year).

    Sensitivity or industry issue
    • Abusive tax avoidance transactions.

    • Industry or emerging issues.

    • Market segment study.

    Estimated time to develop issues
    • Outline approach to develop issue.

    • Estimated hours to develop issue.

    • Black and white issue.

    • Not material, but failure to examine would be contrary to public or service policy (for example, discrimination).

    • Fraud.


  1. Research all issues that appear likely to arise based on your review of the return and determination administrative file to the extent necessary to develop the pre-contact plan. Although it’s important to become familiar with identified issues, especially issues that haven’t been previously examined, it is equally important not to expend a large amount of time researching an issue that may become a non-issue once the examination is in process.


    See IRM 4.75.13, Issue Development, for a detailed discussion of researching and citing the tax law.

  2. In your post of duty, you have hardcopy research materials and you have electronic research resources. Some of the electronic research tools currently available:

    1. WestlawNext™, WestlawNext Tax TM and LexisAdvance TM service allows you to research tax law research, for example, the Internal Revenue Code, the IRM, Legal Decisions, News, etc.

    2. Accurint™ Discovery and Probe services offer resources for finding people and businesses and their assets. By automatically searching a variety of databases (Real Property, Motor Vehicle, Social Security, Coast Guard, etc.), the system generates reports giving information on addresses and property owned.

    3. IRS.gov provides current tax information, tax forms and publications and has other information including an on-line searchable version of organizations eligible to receive tax-deductible contributions, and Tax Stats an area that gathers all exempt organization information from the Martinsburg master file by district office, state and region and is updated monthly.

    4. The Statistics of Income Division of the IRS manages the scanning of all Form 990, 990-EZ, 990-PF, 990-T and related tax returns. The images are available to internal users and to the public in various formats. To retrieve information authorized requesters use the On-Line SEIN system. On-Line SEIN gives internal IRS users access to the original 990, 990-EZ, 990-PF, and related tax return images, both paper and e-filed, from 2002 - present. Access to On-Line SEIN must be requested via the Online 5081 system.

    5. TE/GE Connect provides interim guidance, alerts and memos.

  3. State Agencies - In certain examinations, it is prudent to check state, county and local departments that have jurisdiction over exempt organizations, particularly those recognized as exempt under IRC 501(c)(3). Many state agencies maintain internet web sites that provide access to public records such as corporations and property. Also, an increasing number of states and/or counties have departments with which exempt organizations must register if they solicit charitable donations or engage third-party fund-raisers to solicit for them.

  4. Many organizations maintain their own internet web sites. These web sites can provide useful information concerning an organization. You can retrieve images of previous web pages from http://www.archive.org.

  5. Secure copies of Articles of Incorporation from the Secretary of States.

Requesting Assistance from Specialists

  1. If you determine during the pre-contact phase that you need help from a TE/GE field specialist or one in another operating division, submit a request as soon as possible to avoid unnecessary delay in resolving the issues. These may include:

    • Computer Audit Specialists (IRM 4.47).

    • Economists (IRM 4.49.1).

    • Employee Plans Examiner (IRM 4.71.6).

    • Engineers (IRM Chapter 4.48).

    • Federal, State, and Local Government Specialists (IRM 4.90).

    • Financial Products and Transactions Specialists (IRM 4.37.1).

    • Indian Tribal Governments Specialists (IRM 4.86.1 and IRM 4.88.1).

    • International Specialist (IRM 4.60.6).

    • Tax Exempt Bonds Examiners (IRM 4.81).

    • Art Appraisal Services (IRM 4.48.2).

  2. Use the online Specialist Referral System at https://srs.web.irs.gov to request assistance from a field specialist.

  3. Referrals to Employee Plans: When you’re unsure of whether to request EP help for a related plan or to refer to EP Classification to determine the merits of an examination, complete Form 4632, Employee Plans Referral. When completing Form 4632, use Form 4632-A, Employee Plans Referral Checksheet, or Form 4632–B, Employee Plans Referral Checksheet-For EO IRC 403(b)/457 Plans, as appropriate. Special Review has an EP examination tool to help you determine if a referral is necessary. Contact Manager, Special Review for a copy of this tool.

SB/SE Excise Tax Assistance
  1. Prepare a referral requesting SB/SE Excise Tax assistance using the Specialist Referral System at https://srs.web.irs.gov for:

    • Examinations of hospital cases.

    • Examinations of college/university cases.

  2. SRS referrals are mandatory for the above cases.

  3. Referrals are optional for all other cases, unless the organization is a hospital or college/university.

  4. If SB/SE Excise Tax accepts the referral, the excise tax examiner becomes part of the EO examination team. If SB/SE Excise Tax rejects the referral, discuss with your manager.

  5. EO examiners are notified of their referral’s acceptance/rejection within 30 days.

Form 4564, Information Document Request (IDR)

  1. Before you issue an IDR on Form 4564, you must:

    1. Conduct initial research applicable to the taxpayer.

    2. Identify potential issues in order to identify the information that you need.

    3. Consider alternate sources for the information.

    4. Identify alternate means to obtain the needed records.

    5. Prepare the IDR based on your research.

Preparation and Discussion of the IDR

  1. Limit your request for specific items that are pertinent to the purpose of the examination, and that are needed to complete the examination.

  2. Tailor the IDR to the specific organization you are examining. Don’t use a shotgun approach. A shotgun request is based on a pre-set template requesting for every possible record, regardless of whether it’s pertinent to the examination.

  3. Explain in the IDR why items are being requested. This helps to increase customer satisfaction with the examination process.

  4. When preparing an IDR:

    • Use clear and concise language.

    • Group the information requested by issue.

    • Number or letter the requested information.

    • As a best practice, prepare a separate IDR for each issue.

    1. Note:

      Organizing your IDR in this manner will make it easy for the taxpayer to respond to the requested information.

  5. If you request more than one item with regard to a specific issue, group the items on one IDR and number or letter each item on the IDR.

  6. Don’t request documents that are available internally, such as copies of the Forms 941, 940, and other tax returns, unless they contain information not readily available on an IDRS printout.

  7. Prior to issuing an IDR, you and the taxpayer should agree on a response due date, which may also be an appointment date. If you can’t agree on a response due date, assign a reasonable response due date.


    Initial IDRs sent with initial contact letters won’t have an agreed response due date since you are not allowed to call the taxpayer until after you issue such initial contact letter.

  8. Initial IDRs Only. You can elect to issue your initial IDR with your initial contact letter, or after issuing the initial contact letter, such as at the examination site.


    As a best practice, mail the initial IDR with the initial contact letter. The IDR must ask the taxpayer to confirm the availability and format of the books and records and identify the pre-planned issues.

  9. Initial IDRs Only. During the first personal contact or phone-call in IRM, and after you have issued the initial contact letter, discuss:

    • The appointment date, time and place

    • The examination in general

    • The items requested in the initial IDR, or to be requested in the initial IDR

    • The organization’s business operations and familiarity with EO tax law in order to tailor your request for specific documents as identified and described by the organization.


    When mentioning such terms as "adjusted trial balance" or "transaction journal," and the contact person asks questions as to what those documents are, find out the organization’s type of accounting system and records. If the organization only has a check book and check register, instead of a cash disbursements journal, change your request of match their records.


    The first personal contact by telephone is very basic and not a substitute for the opening conference.

  10. Initial IDRs Sent with Initial Contact Letters. Depending on the size of the organization, whether the records are available electronically, and other factors, you can request that the organization mail certain documents in advance of the appointment to help complete the examination as promptly as possible. Inform the organization they can send electronic storage media (CD, thumb drive, flash drive) if the records too voluminous. These documents can include:

    • Financial statements (balance sheet and income statement)

    • Accountant’s workpapers

    • Chart of accounts and the general ledger


    Request the organization mail the documents 10-14 days before the initial examination only if you plan to review the materials before the appointment date.

  11. See Exhibit 4.75.10-2 for a sample IDR.

  12. The contact person may prefer to email documents in response to your IDR. Make sure to inform them that email isn’t a secure method of communication but the IRS will accept information via email.


    In any event, IRS employees may not send confidential tax information to anyone outside of the IRS via email.

  13. If you must issue additional IDRs after your first request, you should use Letter 5464 to transmit the request to the taxpayer.

Content of IDR

  1. The initial IDR must:

    • Identify the books, records, papers, or other data with the particular activity and time period to which they relate.

    • Phrase the request in terms understandable to the taxpayer.

  2. In addition to physical documents, you can request written answers to questions and/or the completion of questionnaires.

  3. Documents to consider requesting based on the facts and circumstances of the case may include the following:

    • Organizational documents (articles of incorporation, bylaws, etc.) including amendments.

    • Minutes of meetings for the board and committees (executive, finance, audit, governance, nominating, etc.).

    • Correspondence (letters to and from the organization).

    • Accountant's workpapers (tax reconciliation, audit, representation letter).

    • Internally generated accounting records (chart of accounts, adjusted trial balance, statement of cash flows, income statement, balance sheet statement, general ledger, subsidiary ledgers, transaction journals, audited financial statements).

    • Third party generated records (bank statements, brokerage statements, invoices, receipts).

    • Financial contracts (employment contracts, mortgages, leases, notes payable, notes receivable, pledge agreements, other contracts).

    • Publications (newsletters, pamphlets, brochures, maps, flyers, calendars, directories, program guides, etc.).

    • Auditor’s report on Internal Controls.


      Only request those documents that are pertinent to the purpose of the examination and are needed to complete the examination

  4. When requesting documents such as invoices, vouchers, and receipts, it’s best to ask for a sample by tailoring the request to a specific account, period of time, or set of documents, in lieu of requesting all invoices, vouchers, and receipts.


    In examining a live performance theater, the examiner asks to review invoices for all sound and lighting services.


    An examiner, who is examining a fraternal organization that has a bar, asks to inspect the invoices for all liquor purchases for the months of May, August, and October.


    The examiner requests all travel vouchers submitted by the top five officers of the organization.


    The examiner asks for the Z tapes for the admissions cash registers at a museum, for the weeks of February 10th, April 10th, June 10th, August 10th, October 10th, and December 10th.

  5. If the list of requested records includes copies, specify if you are requesting the organization to make copies you can:

    • Review during the on-site examination or

    • Keep.

  6. It is advisable to include a statement on the initial IDR indicating that you’ll likely request additional records as the examination progresses.

  7. For all information documents, include the following information in the header of the request:

    1. Request Number: sequence number of the request (0001, 0002, etc.).

    2. Name of the taxpayer/organization.

    3. Subject of the request.

    4. SAIN (Standard Audit Index Number). See IRM, Standard Audit Index Number (SAIN).

    5. Subject of the request.

    6. Name of the person the request is submitted to.

    7. Dates of previous requests. Input N/A, if no prior requests have been made.

    8. Description of documents requested.

  8. Include the following information in the bottom of the request:

    1. Due date (either the appointment date or received by date).

    2. Method of delivery (by mail, in person).

    3. Name of the requester.

    4. Smart Identification Card Number (SmartID).

    5. Date of the request.

    6. Address of the requester.

    7. Contact numbers (phone and fax).

    8. Indicate a date, or the maximum number of days after you receive documents, that you will review the documents for completeness (acknowledgement date).


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

  9. To ensure a taxpayer is properly prepared for an appointment and the requested information is available, it’s a best practice to follow-up with them two or three business days before the IDR response due date.

IDR Follow-up

  1. When the taxpayer responds to your IDR, make your best efforts to review the response by the agreed upon date noted on the IDR.

  2. If the taxpayer’s response is complete:

    1. Call the taxpayer to advise that the response was complete.

    2. Notate this action in the CCR.

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

    1. Determine, within 5 business days, if you’ll grant an extension.

    2. Discuss the missing or incomplete items with the taxpayer to determine if an extension is warranted.

    3. If an extension is warranted, you may grant a first extension.

    4. You may grant up to 15 business days for the taxpayer to provide the incomplete or missing information.

    5. You must send an extension approval letter, Letter 5798.

  4. If the taxpayer fails to respond to the extension in IRM (3) or if the response is still incomplete you may:

    1. Determine, within 5 business days, whether to grant a second extension.

    2. Discuss the missing or incomplete items with your GM to determine if you’ll grant a second extension.

    3. If an extension is warranted, you may grant a second extension, but only with your GM’s approval.

    4. You may grant up to 15 business days for the taxpayer to provide the incomplete or missing information.

    5. Send a second extension approval letter, Letter 5798, to the taxpayer.

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

  6. Notify the taxpayer of your review.

  7. If for some reason your review will be delayed, notate the delay in the CCR.

  8. If the requested information isn’t received after a second extension, begin the Enforcement Process.

IDR Enforcement Process: Delinquency Notice

  1. During your review, if you determine the IDR response is incomplete:

    1. Notify your GM.

    2. Prepare a Delinquency Notice.
      Letter 5077-B, TE/GE IDR Delinquency Notice, for items that can’t be summonsed.
      Letter 5077-D, TE/GE Information Document Request Delinquency Notice - Pre-Summons, for items that can be summonsed.

    3. Call the taxpayer to discuss an appropriate due date.

    4. Sign and mail the delinquency notice, with a revised due date.

    5. Obtain GM’s approval if more than 10 business days are needed for the taxpayer to respond.

  2. If the taxpayer responds to the IDR Delinquency Notice, review the response within 10 business days.

  3. If the taxpayer provides a complete response:

    1. Inform the taxpayer their response is complete.

    2. Notate the CCR.

    3. The enforcement process is ended.

  4. If the taxpayer doesn’t respond or the response is incomplete:

    1. Discuss with your GM and Area Counsel within 10 business days.

    2. Determine whether a summons will be needed.

    3. Inform the taxpayer of the next action:

      • Proposal of adjustment

      • Proposal of revocation

      • Summons

IDR Enforcement Process: Pre-Summons and Summons Warranted
  1. If the taxpayer has failed to respond to the IDR Delinquency Notices and the requested items can be summonsed:

    1. Prepare Pre-Summons Notice (Letter 5077-A) within 10 business days of the taxpayer not responding to the Delinquency Notices.

    2. Notify the taxpayer and determine a response date.

    3. Seek GM approval, if response date is more than 10 business days.

    4. Have GM sign Pre-Summons Notice and issue to taxpayer.

  2. If the taxpayer responds to the Pre-Summons Notice, review the response within 10 business days.

  3. If a complete response is provided by the taxpayer:

    1. Inform the taxpayer, their response is complete.

    2. Notate the CCR.

    3. The enforcement process is ended.

  4. If the taxpayer doesn’t respond or the response is incomplete:

    1. Discuss with your GM and Area Counsel, within 10 business days.

    2. Coordinate the issuance of the summons with Area Counsel.

    3. Follow summons procedures in IRM 25.5, Summons.


  1. As a best practice, you may use an IDR Log to help you track the IDRs you issued to taxpayers.

  2. Using an IDR Log is optional and may not be helpful on all cases; however, use it if it helps. See Form 5699, Information Document Request Log.

Organizational Documents

  1. For every examination of an organization described in IRC 501(c), that was granted tax-exempt status after October 2013 (Ruling Date 201310 in the EOBMF) obtain a copy of the organization’s current organizing documents, including amendments, from the state authority online or directly from the organization.

  2. Review the organizing documents to determine whether they contain the required language for the type of exemption granted.

    1. If yes, the organizational requirements have been satisfied.

    2. If not, obtain the Determination Administrative File (determination file) in RCCMS.

    3. If RCCMS doesn’t include the determination file, request a copy of the file by sending a secure email, attaching Form 14264, Request for EP or EO Administrative File form, to *TEGE Determinations Processing.

  3. Review the organizing documents and the application for tax exemption, including supporting documents, in the determination file.

    1. If the determination file indicated the organization attested it made conforming amendments as part of the determination process, but the examination reflects no attempt to implement the required changes, propose revocation after discussion with GM.

    2. If the organization attempted to implement the required changes but wasn’t successful, (e.g., the organization added a dissolution clause, which the examiner concludes still doesn’t satisfy the organizational test), inform the organization that it must amend its organizing document. Prior to closing the case, secure a conformed copy of the amendments consistent with IDR procedures.

    3. If the determination file shows that the organization applied on Form 1023-EZ and doesn’t have organizing documents, propose revocation after discussion with the GM.

  4. If you secure conformed copies of amended organizing documents after the start of the examination to satisfy organizational requirements, issue Letter 3609 No Change Advisory, to the organization.

    1. Close the case with DC 19, Amendment Secured, unless other issues require a higher priority DC.

    2. Use PIC 02B, Org. Req. - Advisory, on Form 5599, TE/GE Examined Closing Record.

  5. If after discussion with the GM, you propose a revocation for not satisfying organizational requirements, issue Letter 3618, 30-Day Letter - Proposed Revocation of Exempt Status.

    1. Close the case with the proper revocation DC.

    2. Use PIC, 02C, Org. Req. - Other, on Form 5599.

  6. For guidance on what constitutes a conformed copy of an organizing or enabling document, see Pub 557, Tax-Exempt Status for Your Organization; Instruction 1023; Instruction 1023-EZ; or Instruction 1024

Accountants' Workpapers

  1. The following is a discussion of workpapers typically prepared by independent accountants:

    1. Tax Reconciliation Workpapers: Workpapers used to assemble and compile financial data to prepare it to place on a return. Typically, these include a final trial balance and/or a schedule of adjusting entries. They include information used to trace financial information to the return.

    2. Examination Workpapers: Documentation kept by an independent accountant as to the procedures followed, tests performed, information obtained, and conclusions they reached. They support the accountant's opinion as to the fairness of the presentation of the financial statements, conformity and compliance with generally accepted accounting principles.

    3. Representation Letter: The 1998 Statement on Auditing Standards (SAS) No. 85 issued by the American Institute of Certified Public Accountants requires a CPA auditor to obtain client management's written representations for all financial statements and periods covered by the auditor's report. The statements include information concerning fraud, material errors, and the belief that the financial statements are fairly presented in conformity with Generally Accepted Accounting Principles (GAAP).


      The representation letter may be a privileged communication under IRC 7525.

  2. Tax reconciliation workpapers, unlike audit workpapers, should be requested at the beginning of an examination. These workpapers are needed since they include the final amounts that should tie the filed return to adjusted trial balance to the general ledger.

Electronic Accounting Records

  1. Using electronic records to conduct examinations makes the examination more efficient.

  2. Determine during the initial contact if the organization uses an electronic records accounting system.

  3. If they do, modify the initial IDR. Examples of items to request:

    • Worksheet reconciling the electronic records to the return.

    • Electronic backup file or working copy of the books and records for the specified period, including any changes to the data entered after year-end. This can be submitted on a CD, DVD, or a flash/thumb drive. If the taxpayer wants to submit it via email, explain that email isn’t a secure method of communication but the IRS accepts information via email.

    • Electronic administrator's user name and password for the file.

    • Version and the edition used for the file.

  4. The legal authority for requesting records in electronic format is IRC 6001, 26 CFR 1.6001-1(a) and -1(e), Rev. Rul. 71–20, 1971-1 C.B. 392, and Rev. Proc. 98-25, 1998-1 C.B. 998. Rev. Proc. 98–25, 1998-1 C.B. 998 doesn't exempt a taxpayer from providing electronic records, if such records exist.

Initial Taxpayer Contact By Letter

  1. The term "initial contact" is the first contact with the taxpayer after the pre-contact analysis. The initial contact notifies the organization of the examination.


    Complete a detailed pre-contact analysis of the information available from internal sources, as detailed above.

  2. You must make ALL INITIAL contact with a taxpayer and POA by mail, using the appropriate initial contact letter.


    When beginning an examination,

    DON’T call the taxpayer.

  3. When making the initial contact with the taxpayer you will:

    1. Mail initial contact letter, Letter 3611.

    2. Enclose an initial IDR to the initial contact letter if you determine it is appropriate for your examination.

    3. Update the AIMS via RCCMS to status 12 when you charge time to the case. Make sure that the "Update AIMS" box is checked.


    As a best practice, mail the initial IDR with the initial contact letter. The IDR must ask the taxpayer to confirm the availability and format of the books and records and identify the pre-planned issues.

  4. After you issue the initial contact letter, the taxpayer or their representative will either:

    • Call you in response to the initial contact letter within 10 business days. See IRM

    • Fail to personally contact you after 10 business days have elapsed. See IRM

  5. IRC 7605(a) gives the IRS the authority to set the time and place of the examination under reasonable circumstances. Field examinations are normally conducted at the taxpayer's place of business or where the books and records are maintained.


    Always determine where the books and records are located, even if the examination is conducted at an alternate location (such as the office of a representative).

Taxpayer Doesn’t Respond to Initial Contact Letter

  1. If the taxpayer fails to contact you after 10 business days have elapsed, call the taxpayer or designated representative. See IRM

  2. Immediately inform them of:

    • Your title (e.g., Mr., Mrs., Ms., Miss), last name and identification (SmartID card badge) number, or

    • Your first name, last name, and identification (SmartID card badge) number.

    • Your phone number and your office post of duty

    • The letter you sent to their address. Ask whether they received a letter from you.


    The Smart Identification (SmartID) card is a standardized identification card for Federal employees and contractors. This new ID card is required by Homeland Security as per Presidential Directive-12. The SmartID has a 10-digit number string called a Personal Identification (PID) Number that is printed on the front of the card. You must use the entire 10-digit SmartID card badge number (including no spaces or dashes, example, 10000XXXXX) when communicating verbally or in writing, with taxpayers.

  3. If both the taxpayer and the representative contend they didn’t receive the initial contact letter:

    • Secure the organization’s correct address.

    • Re-send a copy of the initial contact letter and Pub 1 to the correct address.

    • You can re-send by faxing the letter and Pub 1 if they are willing to accept the fax.

  4. If the taxpayer received the initial contact letter, set an appointment or call the duly authorized designated representative to set an appointment. See IRM and IRM

First Personal Contact by Telephone

  1. Before your first personal contact by telephone:

    • Determine the authorized individuals who can receive confidential information. See IRM

    • Plan what you will say in the first phone call. See IRM

  2. Examiners working tax related matters must immediately provide the taxpayer the following (Restructuring and Reform Act of 1998, Section 3705):

    • Your title (e.g., Mr., Mrs., Ms., Miss), last name and identification (SmartID card badge) number, or

    • Your first name, last name, and identification (SmartID card badge) number.

    • Your phone number and your office post of duty

    • Purpose of your call


      When disclosing the purpose of your call, remember that only authorized individuals are entitled to receive notice of an examination.


      The Smart Identification (SmartID) card is a standardized identification card for Federal employees and contractors. This new ID card is required by Homeland Security as per Presidential Directive-12. The SmartID has a 10-digit number string called a Personal Identification (PID) Number that is printed on the front of the card. You must use the entire 10-digit SmartID card badge number (including no spaces or dashes, example, 10000XXXXX) when communicating verbally or in writing, with taxpayers.

Authorized Individual
  1. The individual you communicate with over an examination must have the authority to receive confidential tax information concerning the organization. The individuals who have the authority to receive confidential tax information are:

    1. A current officer of a corporation (including a parent, subsidiary, or other affiliated corporation), association, or organized group who has authority under the applicable state law to legally bind the entity.

    2. A fiduciary, for example, a trustee or receiver.


      If not attached to the assigned return, secure a Form 56, Notice Concerning Fiduciary Relationship.

    3. An individual, usually a director, officer, or an employee of the entity, specifically authorized to bind the entity in accordance with the entity's organizing documents, a resolution of the governing board, or other legally binding document.

    4. An individual who has a valid POA or Tax Information Authorization on file with the Service for the type of return and years included in the examination. See IRM


    To avoid making an unauthorized disclosure subject to the sanctions of IRC 7213, verify the identity of the individual contacted and determine whether he/she has an ongoing relationship with the organization entitling him/her to receive confidential tax information before discussing the examination. In the case of a corporation, if the corporate officer contacted isn’t an officer designated by state law to bind the corporation, ask the officer if he or she can legally bind the corporation before discussing the examination. If the person contacted doesn't have the proper authority to receive confidential tax information, limit the conversation to determining the name and phone number of an individual who does have the authority to receive confidential information. The questions asked and responses received must be documented in the workpapers.

  2. If there is a representative on file, as indicated on BMFOLT, you normally must contact the representative before you call the organization. To verify whether the representative has authority to receive communications, use IDRS command code CFINK to check the representative's authorizations. See http://serp.enterprise.irs.gov/databases/irm-sup.dr/job_aid.dr/command-code.dr/idrs_command_codes_job_aid.htm IDRS Command Code Job Aid for help with the CFINK command code.

  3. If you aren’t sure whether the individual contacted has the authority to receive confidential information, generally a written statement by the individual, on stationery bearing the entity's letterhead, stating he or she has the authority to legally bind the corporation is sufficient to permit disclosure.

Planning What To Say On The First Phone Call
  1. Identify yourself. See IRM

  2. Inform the authorized individual of the specific returns and tax years under examination.

  3. Try to obtain agreement on the appointment date, time and place. See IRM, Scheduling the Appointment.

  4. During your conversation, perform the following steps:

    1. Briefly explain the examination process.
    2. Identify the returns being examined and the tax periods involved.
    3. Ask if the organization is to be represented by a POA and request Form 2848, Power of Attorney and Declaration of Representative, if applicable. See 1 below.
    4. Confirm whether the organization has been examined in prior years.
    5. Discuss the issues identified during the pre-contact. See 2,3 below.
    6. Explain that additional issues may be examined depending on the information obtained during the examination.
    7. Determine the type and location of the books and records.
    8. Determine if the organization uses an electronic records accounting system, such as QuickBooks, Quicken, etc. If they do, ask if they would be willing to provide a backup copy or the working copy.
    9. Discuss the contents of the IDR and revise it based on the responses received.
    10. Establish the date, time, and location where the examination is to take place. See 4 below.
    11. Ask for clear directions to the examination site.
    12. Explain that you’ll mail a letter confirming the scheduled appointment, along with the IDR.
    13. Explain that you’ll include Pub 1, Your Rights as a Taxpayer, with the letter. Answer any questions about Pub 1.
    1. If the organization will be represented, don’t begin the examination by questioning the officers, during the initial contact. This may appear that you are attempting to bypass the representative. If representation must be secured and the contact person doesn't want to schedule an appointment until after a representative is confirmed, allow a minimum of 10 business days to secure representation before follow-up action to schedule the appointment. Grant extensions on a case-by-case basis.
    2. There may be extenuating circumstances, such as an informant report, that preclude the discussion of the issues before the examination. If you don’t discuss the pre-planned issues before the examination, document the specific reasons in the workpapers.
    3. If a taxpayer requests the specific reason for their examination, you will provide the taxpayer with a response that is as accurate as possible, without revealing restricted use information. You should engage your manager and a disclosure official if assistance is needed in determining what information can or can’t be released. Pub 1, provides a comprehensive explanation of how returns are selected. If the taxpayer continues to request additional information, you can tell them they are permitted to obtain the information through a Freedom of Information Act (FOIA) request, even though portions of it may be redacted by Disclosure.
    4. Field examinations are normally conducted at the organization's place of business and/or where the books and records are maintained.
  5. Before ending the conversation, ask the person if they have any questions.

  6. Document all actions in the workpapers (Forms 4318, 5464, 5773, 9984 and initial contact workpaper).

Scheduling the Appointment

  1. To the extent possible, set your examination appointment at approximately 30 days from the date of contact but no later than 45 days, to allow time for the documents to arrive 10 to 14 days prior to the examination. This will allow time to review documents prior to the field visitation. Shorter time frames are permissible, with managerial approval.

  2. When contacting the taxpayer, schedule the initial appointment and any follow-up appointments at a time agreeable to the taxpayer and/or representative. This helps reduce the number of rescheduled appointments and avoid case delays. Schedule the examination during normal business hours and without regard to seasonal fluctuations of the taxpayer's business hours. It is customary to accommodate the taxpayer in the case of religious or secular holidays.

  3. The taxpayer and/or representative may request to postpone the suggested initial appointment date. Allow up to an additional 45 days after the first action on the case. If the taxpayer or representative attempts to further postpone the appointment, discuss with your GM.

  4. Usually the initial appointment is scheduled with the taxpayer, but the taxpayer isn’t required to be present at the initial interview per IRC 7521(c). You may conduct the interview with anyone who is authorized by the taxpayer. However, that person must have firsthand knowledge of the information requested and confirm that the information obtained can be relied upon.

Powers of Attorney and Tax Information Authorizations (TIAs)

  1. The information in this subsection relates to exempt organizations organized as corporations, associations, or trusts. It provides guidelines for situations encountered during the ordinary course of the examination of an exempt organization. If the examination involves other entities or individuals, unusual situations, or issues that aren't addressed here or for additional information, refer to:

    1. IRC 6103.

    2. 26 CFR 301.6103(a) through 26 CFR 301.6103(p).

    3. 26 CFR 601.501 through 26 CFR 601.509, republished as Pub 216 Conference and Practice Requirements.

    4. IRM 11.3, Disclosure of Official Information.

    5. IRM 1.25.1, Practice Before the IRS, Rules Governing Practice Before the IRS.

    6. IRM 21.3.7, Processing Third Party Authorizations onto the Centralized Authorization File (CAF).

    7. Pub 947, Practice Before the IRS and Power of Attorney.

    8. Form 2848 Instructions.

When to Secure a Power of Attorney or Tax Information Authorization (TIA) Form

  1. If at any time the contact person requests the examination be conducted with a person who doesn't have the authority to receive confidential tax information, request them to send proper authorization before you discuss any confidential tax information with the designated individual.

    1. A POA authorizes the designated individual to represent the taxpayer in certain circumstances.

    2. A written or verbal TIA authorizes the designated individual to file the taxpayer's tax information, but it doesn't authorize the designated individual to represent the taxpayer before the IRS.

Comparison of Powers of Attorney and Tax Information Authorizations(TIAs)

  1. The following table shows the primary acts that can or can’t be performed by an individual holding a valid POA or a written or verbal TIA during the examination process.

    Act as a contact point for the organization during the examination YES YES
    Receive and inspect returns and return information YES YES
    Receive tax notices, correspondence and other communications YES YES
      If the check boxes are marked. Can receive copies if specifically authorized.
    Discuss issues with the examiner YES NO
    Represent the organization at conferences YES NO
    Sign agreements YES 1 NO
    Sign a closing agreement YES 1 NO
    File a protest in response to a 30-day letter YES 1 NO
    Record interviews YES NO
    Sign a tax return GENERALLY NO 2 NO
    1. An unenrolled preparer designated on a POA form cannot sign any document for the organization. See Rev. Proc. 81-38, 1981-2 C.B. 592. An unenrolled preparer’s representation is limited to practice before examination officers of TE/GE, LB&I, SB/SE, and W&I operating divisions and in the Office of International Operations, and may only encompass matters concerning the tax liability for returns the unenrolled preparer prepared for the taxpayer. An unenrolled return preparer may not represent the taxpayer before Appeals or Collection or any other IRS function other than the examination functions.

    2. The return is an income tax return received within 60 days before the ASED in which case the assessment period is extended to 60 days after the receipt of the amended return.

  2. A POA may only sign a return on behalf of the taxpayer in very limited circumstances. 26 CFR 1.6012-1(a)(5) permits a recognized representative may sign the return on behalf of a taxpayer if it is specifically authorized in the POA (Form 2848), Power of Attorney and Declaration of Representative and the taxpayer:

    1. Is unable to sign the return due to disease or injury.

    2. Is unable to sign the return by reason of continuous absence from the United States for a period of at least 60 days before the return is due.

    3. Requests permission, in writing, from the area director and the director determines that there is good cause for permission to be granted.

  3. Only individuals who are recognized to practice before the Service 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. See the Form 2848 for a list of individuals who are permitted to practice before the Service.

Power of Attorney and Declaration of Representative

  1. The IRS will accept a non-IRS form. Attach a completed Form 2848 so the form can be processed to the CAF system. See IRM (5), Power of Attorney and Form 2848, for a list of required information.

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

  3. 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, Specific Use Authorizations.

  4. If you receive a specific-use POA form, attach a copy to the document to which it relates. 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 forms. The POA form guidelines and instructions other than this and the preceding paragraph apply to general POA forms only.

  5. The persons who can be designated as a POA, as listed and fully described on Form 2848, include:

    1. Attorneys.

    2. Certified public accountants.

    3. Enrolled actuaries.

    4. Enrolled agents.

    5. Enrolled retirement plans agents.

    6. Family members (for individual income taxes only).

    7. Full-time employees of the organization.

    8. Officers of the organization.

    9. Student attorneys.

    10. Student certified public accountants.

    11. Unenrolled return preparers.

    12. Registered tax return preparer.


      The acts an unenrolled return preparer can perform are limited as discussed in Footnote 1 of the table in IRM (1). The acts the registered tax return preparer can perform is also limited.

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

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

  8. A valid POA form submitted by a taxpayer is always required to be honored unless the criteria for bypassing the POA are met.

Verifying a Power of Attorney
  1. Check to see if the representative has a current, active license using these resources:

    1. Check a Certified Public Accountant's (CPA) license at https://www.aicpa.org/"State Information" section or by calling appropriate state CPA board.

    2. Check an attorney's license by contacting the appropriate state bar association. This information may also be available on the state bar association's website or try the http://apps.americanbar.org/legalservices/findlegalhelp/home.cfm American Bar Association’s (ABA) search engine. The ABA doesn't operate a lawyer referral service, but provides links to the state resources.

    3. Check if someone has enrolled agent status, by searching the CAF. If there is no enrolled agent indicator on the CAF, you may email requests for enrolled agent status verification directly to the Enrolled Practitioner Program mailbox epp@irs.gov.

    4. Include the following:
      First and last name
      Complete address (if available)
      Enrolled agent number (if available)


      To reduce the likelihood of a verification error provide as much information as is available.

    5. To find if a practitioner has been sanctioned by the Office of Professional Responsibility’s (OPR). Visit the OPR website https://www.irs.gov/tax-professionals/search-for-disciplined-tax-professionals


      If the search shows that the representative has lost his or her license (or had it suspended, revoked, or classified as inactive), send the POA form to the Area Return Preparer Coordinator.

  2. Review the form for completeness and validity. For a list of required elements, see IRM, Essential Elements for Form 2848 and Form 8821.

  3. See Form 2848 instructions, as well as Pub 4245, Power of Attorney Preparation Guide, provide guidance as to how the form needs to be filled out. Pub 4019, Third Party Authorization, Levels of Authority, lists guidance on the levels of authority.

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

    1. Requested in Part 1 of the Form 2848, contact the organization.

    2. Requested in Part 2 of the Form 2848, contact the representative.

  5. If the POA form is incomplete, return it to the organization or representative. The organization or representative, may submit a new Form 2848 containing all of the essential information, newly signed and dated. Electronic, printed, and stamped signatures are unacceptable.

  6. If you expand the examination scope to include additional tax periods or different returns, notify the taxpayer. Generally give the taxpayer time to secure a POA form to cover the additional periods or different return before you take any examination action. A new Form 2848 should be submitted with the additional periods or different return, signed by both the taxpayer (or officer of the organization) and the representative. If the taxpayer chooses not to have the POA represent him for those additional periods/returns, then examination information for those periods/returns won't be disclosed to any person other than the taxpayer.


    Don’t make any changes or add any information to the POA form other than completing the information requested in the box labeled, "For IRS Use Only" on Form 2848 or date stamping the front of a non-IRS form.

Subsequent Power of Attorney and Declaration of Representative
  1. Filing a subsequent POA form for the same periods as a previous form automatically replaces and revokes the previous POA unless the organization specified otherwise on the subsequent form. If the POA form was submitted on Form 2848 and the organization doesn't wish to revoke the prior form, attach a copy of the prior Form 2848 to the subsequent Form 2848 before you send it to the appropriate Campus.


    If the organization wishes to revoke an existing POA and doesn't want to name a new representative, follow the instructions in 26 CFR 601.505(a).

Written Tax Information Authorization (TIA)

  1. The IRS is authorized to accept written consents authorizing the disclosure of return information to a designee of the taxpayer (26 CFR 301.6103(c)-1(c)).

  2. Generally, the TIA you receive during an examination is a general-purpose TIA and is recorded on the CAF system. However, you may receive a limited/specific TIA for a specific issue.

  3. If you receive a specific-use TIA attach a copy to the document to which it relates. The appointee keeps the original TIA. You don’t have to send the TIA to the CAF unit because a specific-use TIA isn’t recorded on the CAF system. A specific-use TIA doesn't revoke any prior TIA. The guidelines and instructions for a TIA in IRM 4.75.10 other than this and the preceding paragraph apply to a general TIA only.

  4. Any individual, trust, corporation, association, partnership, and federal, state, local, and foreign government agency or sub-units of such agency can be appointed to receive confidential tax information under a TIA.

  5. The organization can use Form 8821, Tax Information Authorization, or any separate written document meeting the requirements of 26 CFR 301.6103(c)-1(b)(1). For a list of required elements, see IRM, Essential Elements for Form 2848 and Form 8821.

Verifying Tax Information Authorizations (TIAs)
  1. Review the form for completeness and validity.

  2. If the Form 8821 received doesn't contain all of the items listed in IRM, it is invalid.

    If the Form 8821 Then
    Doesn’t include all of the types of tax, form numbers, and years or periods under examination The Form 8821 isn’t valid for the missing types of tax, forms and/or tax years or periods. Contact the organization and discuss the missing information. If the organization wishes to include the missing information, ask them to submit a new form.
    Is incomplete Return the Form 8821 to the organization.
    They may submit a corrected Form 8821 or enter the missing information on the returned Form 8821 and resubmit it.


    Don’t make any changes or add any information to the TIA other than the information requested in the box labeled, "For IRS Use Only" on Form 8821.

  3. IRS accepts a faxed TIA and generally recognizes it. If there is some indication of forgery, the appointee could be required to produce the original.

Processing the Power of Attorney or Written Tax Information Authorization (TIA) Form

  1. If a POA on 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 the TIA isn’t on Form 8821, enter the examiner's name, phone number, function, and date the form was received on the fax cover sheet when you send the information to the CAF unit.

  2. If a non-IRS POA form is complete and valid, date stamp the front of the form.

  3. Fax a copy of Form 2848 or Form 8821 to the CAF unit of the appropriate Campus (Memphis, Ogden or Philadelphia) within 10 workdays of the received date.


    Form 2848 and Form 8821 are filed with the appropriate campus listed in their instructions based on the taxpayer's location rather than on the type of return being examined.

  4. Record on the CCR, the date you received and verified the POA or TIA form and the date you sent it to the appropriate campus.

  5. If the CAF unit rejects the form, they issue L861C to the taxpayer. IDRS command code ENMOD indicates a notice was sent.

  6. Attach the original to the back of the first page of the return. If the form covers more than one tax period, make copies and attach one to each return covered.

  7. The form should be readable without removing staples.

  8. Staple any subsequent POA or TIA form you received to the top of the prior forms in the same manner.

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

  10. Send copies of correspondence and other written communications to the authorized appointee if Form 8821 item 5a is checked," If you want copies of tax information, notices, and other written communications sent to the appointee on an ongoing basis check this box," or if the TIA is submitted in a document other than Form 8821, the document specifically requests copies be sent to the appointees.

  11. Use Letter 3597 to send the correspondence.

Verbal Tax Information Authorization

  1. 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 IRS.

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

    The following examples illustrate potential examination situations when you should secure a POA or TIA form:
    Example 1: The president of the organization advises that Mr. Monroe, the accountant who prepared the organization's returns, will be the contact point for receiving information and correspondence relating to the examination and providing information to and discussing issues. Mr. Monroe is an unenrolled return preparer. Secure a POA form for Mr. Monroe.
    Example 2: The president of the organization advises that Mr. Carroll, the bookkeeper, will be the contact point for receiving tax information and correspondence relating to the examination and providing information. The organization doesn't wish to authorize Mr. Carroll to sign agreements, consents, or represent the organization as a POA. Secure a written or verbal TIA for Mr. Carroll.
    Example 3: The president of the organization brings a number of employees to a meeting. The employees aren't authorized to receive confidential tax information just because the president brought them to the meeting. In this situation, secure a verbal TIA for each of the employees attending the meeting. Record the pertinent information concerning the verbal TIA in the CCR or a separate workpaper as soon as possible.
    Example 4: The organization's attorney has a valid POA form to represent the organization. He has his secretary call to determine the status of the examination. The secretary doesn't have the right to receive confidential tax information concerning the organization. Don’t discuss the status of the examination with the secretary unless you secure a verbal or written TIA.

Receipt of Documents Before the Examination

  1. Receiving certain documents or records before your examination could make the overall examination process faster and more efficient.

  2. However, a taxpayer isn’t obligated to provide documents or records before the appointment or opening conference. For example, some taxpayers may need the time to secure representation.

  3. Before receiving documents before the examination, ensure the taxpayer has received an advance copy of Pub 1.

  4. Record in the CCR the date you receive any documents, and the time you spent reviewing them, completing workpapers and analyzing records.

  5. After you complete a workpaper prepare a summary in the Form 5773, EO Workpaper Summary (EO cases) or Form 4318, Examination Workpapers Index (FSL/ET cases).

  6. Upload any completed workpapers on RCCMS. If available, use an office scanner to scan any relevant correspondence from the organization into PDF documents (no more than 600 dots per inch in black and white), if not provided electronically. Files uploaded to RCCMS are limited to 18 Mb total. (To shrink a PDF file, try compressing the document, by selecting Reduce File Size under the Document menu.)

  7. Make note of any items that you should incorporate in the initial interview.

Review of the Determination Administrative File

  1. Review of the determination administrative file:

    • Application for exemption, Form 1023, or Form 1024

    • Organization Document (Articles of Incorporation, Articles of Association, Charter, or Trust Document)

    • Bylaws

    • Publications

    • Exemption letter

    • Filing requirements

  2. Review any technical advice memoranda and correspondence received from the organization.

  3. Review the organization’s governing instruments to identify:

    1. Any amendments or changes that would jeopardize the organization’s exempt status.

    2. Any committees with special responsibilities.

    3. Who controls the organization, both ultimately and in day-to-day operations?

    4. Duties of officers, especially noting which officials are authorized to disburse funds and make decisions affecting the operations of the organization.

  4. The focus of your determination letter review should verify that the code section recognized matches what is on IDRS, whether there was an addendum (caveats), and when the letter was dated. (In the event of a revocation to the date of exemption, this date will be required to input on Form 6018, Consent to Proposed Action.)


    A caveat is an addendum to the determination letter. If there is an addendum, it will be noted in the heading of the letter, with a separate page attached listing the various addenda to the letter. Determination specialists include these as a warning about issues identified in the determination application.

  5. Verify that the subsection shown in the exemption letter is the same as the subsection shown on IDRS, AIMS and the return.

  6. In reviewing the determination application, note any descriptions of activities that were conducted or were planned on being conducted. Add questions about the activities to the initial interview.

  7. Check for any change in address, accounting periods, activities, and income sources.

Receipt of the Financial Workpapers

  1. Using the tax reconciliation workpapers, if any, reconcile the return to the books and records. If no tax reconciliation workpaper is provided, use the trial balance in conjunction with the income statement and balance sheet. A sample format (not required) is as follows:

    Item description Amount per 990 Amount per books Difference
  2. If you’re unable to complete the reconciliation, or identify material differences, whether by dollar amount or by percentage, make notes of questions to ask of the financial officers (or most knowledgeable person) of the organization.

  3. Scan the general ledger, and select additional LUQ items to sample and/or question the organization at the initial appointment. Pay particular attention to compensation and/or financial transactions with officers. Review the document for possible excess benefit transactions, sources of income that could give rise to UBIT, or other liabilities.

  4. Identify accounts or transactions to sample test the organization's internal controls. Prepare a second IDR, listing the items to be sampled. At the examination, you can use the request as a checksheet. As you sample items, remove them from the request, put them in the workpaper and note any items unavailable during the examination. Issue an IDR for the remaining issues before you leave the examination.

  5. Record summaries on the Form 5773 or Form 4318 for the reconciliation of revenues and expenses, reconciliation of net worth, and method of accounting/internal controls. Add additional summaries for examination reports, sources of income, expenditure analysis, and nature of liabilities, as merited.

Receipt of the Electronic Accounting Records File

  1. Scan the file for viruses while off the network.

  2. If there are no viruses, save the file to your SBU folder. Keep the file for the duration of the examination. Only include relevant items from the taxpayer's data in RCCMS. Return the CD, DVD, or a flash/thumb drive to the taxpayer. If the taxpayer doesn't want it returned, follow established guidelines for disposing external media with PII.

  3. Contact one of the QuickBooks User Team Members in your Area to convert the file and create reports in Excel.

Planning the Initial Interview

  1. Examiners have the authority to take testimony as may be relevant to determine any return’s correctness, make a return where none has been made, and determine the liability for any internal revenue tax (IRC 7602).

  2. As part of the pre-contact planning, form questions to ask in the initial interview. The primary reason for an initial interview is to help confirm the reliability of the books and records. It also gives you knowledge about the organization's history, its activities, the type and source of income generated, the extent of its internal control, and types of books and records maintained.

  3. Planning and organizing questions to ask in the initial interview is as important as the initial IDR. Preparation gives you freedom to listen more carefully and proceed efficiently with the examination.

  4. Use the information developed in the prior analysis, along with items noted in the documents you received and processed in the days leading up to the interview. Be prepared to modify the interview at any time up to and during the interview.

  5. If the IRS, taxpayer, or representative wants to audio record the in-person interview, use the techniques in IRM, Taxpayer Recording of Interviews.

Formulating the Questions

  1. Base the questions on your observations during the pre-contact analysis and issues that you’ll develop. Write them down or outline them. Leave enough space to jot down brief notes during the interview. Keep in mind that this doesn't limit the ability to ask additional questions. Be ready to ask for clarification or to follow up on responses.

  2. Some main areas to cover are:

    • Representation.

    • Pub 1.

    • History of the organization.

    • Organizational document modifications.

    • Activities (day-to-day and special events).

    • Governance.

    • Internal controls.

    • Package audit.

    • Unrelated business income activities.

    • Any issues identified by an informant.


    You can use pro forma interviews, but customize them to fit the taxpayer under examination and make them open to follow-up questions.

  3. At the start of any interview, ask about representation (if not already represented) and determine the knowledge of the persons being interviewed with respect to Publication 1.

  4. Questions about the history of the organization can either be general, such as asking for a complete history, or more pointed, discussing any items noted in the determination application, website of the organization or on the Forms 990.

  5. Plan to discuss whether any changes were made to the organizing documents that weren’t already identified in the initial analysis and obtain explanations of any major changes.

  6. In discussing the activities, include questions for any activities not clearly explained on the Form 990. Also, include follow up questions to obtain an overview of any activities that have been identified as potentially being non-exempt.

  7. IRM, Internal Controls, discusses the internal controls portion of the initial interview.

  8. IRM 4.75.12, Required Filing Checks, provides information on package audit procedures.

  9. For any unrelated business activities, questions should focus questions on the six "W" questions: when, where, who, what, why and how.

  10. If you need help developing questions, consult an assigned mentor, on-the-job instructor, or the GM.

Additional Issues

  1. The following sections describe scenarios that can impair the examiner's ability to conduct the examination.
    Scenario #1: What to do when you can’t find an organization, or the initial letter is returned undeliverable. This scenario can occur for several reasons:
    1. The organization may recently have gone out of business, and hasn’t formally dissolved.

    2. The organization has no permanent physical address, with the address shifting to the address of a newly elected officer each year.

    3. The organization may have merged with another exempt organization, such as the forced mergers of lodges or posts, directed to do so by parent organizations.

    4. The address of an organization is intentionally misleading, referencing a mailbox as a suite.

    5. The officers of the organization are involved in tax avoidance transactions and are attempting to make locating the organization difficult.


      Examples d. and e. are indicators of organizations that may not be operated for the exempt purposes outlined in the determination application. When you encounter these cases, ask the Forensic Investigations Unit (FIU) for suggestions.

    Scenario #2: When the organization requests the case be transferred to either another examiner, to another office in the area or to another area altogether. Some of these requests for transfers may be valid if the records are physically located other than where they are listed on the Form 990 or if a related examination is already being done by another examiner in another office. Others of these requests may constitute attempts by the officers, trustees, employees, or representatives of the organization to delay, hinder, or derail the examination. In all transfer situations, discuss with your manager. See IRM, Request for Transfer.

Locating the Taxpayer

  1. If unable to locate the taxpayer and/or the initial contact letter is returned by the Post Office as undeliverable, find the taxpayer's current address using these steps:

    1. Inspect any correspondence in the case file for any change of address noted by the U.S. Postal Service.

    2. Review the case file for possible sources of information that may lead to the taxpayer's whereabouts.

    3. Use Accurint™ to find the organization's or an officer's, director's, or trustee's current address and phone number.

    4. Check phone and/or city directories for names and addresses of officers, directors, or trustees as well as the organization.

    5. Check the current address by researching IDRS command code INOLES.

    6. Contact the Post Office for a current address using Form 4759, Address Information Request.

    7. Check internet resources for possible leads.

    8. If the organization is a corporation, check the state annual corporate registration for the name of the current corporate agent.

    9. Contact third parties such as current or former employees or return preparers.


      Be sure to follow all third-party procedures in 26 CFR 301.7602-2. See IRM 25.27.1, Third Party Contacts.


      See IRM 4.75.16, Case Closing Procedures, for the procedures to follow if you can’t locate the taxpayer.

  2. If you can’t locate the taxpayer after following the applicable procedures in IRM (1) above, send examination letters by certified mail to the organization’s last known address and the last known officers, as reported to the state or to the IRS, whichever was most recently reported.

  3. List a response date on the letters, such as 30 days after the letter’s date.

Request for Transfer

  1. In setting the initial appointment, you may receive a taxpayer request to transfer to another location. IRC 7602 gives the Secretary authority to reasonably set the time and place of an examination. Usually, the examination is conducted in the area where the taxpayer is physically located, has its principal office, carries out business transactions, and maintains its books and records.

  2. For guidance on processing taxpayer and/or representative to transfer the place of examination, see 26 CFR 301.7605-1(e)(2). Generally, the IRS grants a request under the following circumstances:

    • The taxpayer's address is no longer where an examination has been scheduled.

    • The taxpayer's books, records, and source documents are maintained at a location other than where the examination has been scheduled.

  3. Evaluate a request for transfer on a case-by-case basis. Consider these factors that must be considered are:

    • Organization's current address.

    • Location of the organization's business.

    • Location of the organization's books and records, including vouchers, invoices, cancelled checks, and other documents usually maintained at the business site.

    • Location where the IRS can perform the examination most efficiently.

    • Availability of the IRS's resources at the location to which the organization requests a transfer.

    • Other circumstances that indicate conducting the examination at a particular location would create undue inconvenience to the organization.

Representative's Request for Transfer
  1. Generally, the IRS won’t transfer the location of an examination for the convenience of a taxpayer's representative, nor will the representative's place of business determine the place of the examination ( 26 CFR 301.7605-1(e)(3)). However, the IRS may consider the request by the organization or its representative to transfer the place of examination to the representative's office after weighing all factors.

  2. The representative must submit a valid Form 2848, Power of Attorney and Declaration of Representative, with the request for transfer. Requests won't be approved for Form 8821, Tax Information Authorization.


    For the purpose of case transfers, "representative" means an attorney, certified public accountant, enrolled agent, officer, full-time employee, or actuary of the organization. It doesn't include an unenrolled tax return preparer.

Written Requests
  1. The request to transfer the place of the examination must be in writing ( 26 CFR 301.7605-1(e)). It must include the following information:

    1. Reason the requested location is more efficient for the examination.

    2. Taxpayer's current address, phone number, and current principal place of business.

    3. Address/location of taxpayer's books, records, and source documents.

    4. Information as to who possesses the required records and is available to expediently resolve issues.

    5. Available resources in the area to which the taxpayer requests transfer, if known.

    6. Other factors that show how conducting the examination at a particular location poses undue inconvenience to the taxpayer.

Transfer of Examination Initiated By the Service
  1. You may transfer an examination if it promotes effective and efficient conduct of the examination. If the taxpayer requests that a transfer not be made, consider the request according to the required factors. IRM

  2. Management can initiate the transfer of an unopened examination to another group when requested.


    Examples include transfers of cases from groups with high case inventory levels to groups with low case inventory levels and related examinations conducted by examiners in another office.

  3. Management initiates a case transfer from one examiner to another if for whatever reason the current examiner can’t complete the work.

Requirements To Transfer Examination Out of Area
  1. In addition to the written request, the case must meet other requirements to transfer an examination from one area to another.

  2. A minimum of 13 months must remain on the SOL at the time of the transfer ( 26 CFR 301.7605-1(e)(4)). If all other considerations are satisfied except the 13 month period, obtain the taxpayer's written agreement to secure a one-year extension of the SOL.

  3. Don’t grant a transfer request if IRS issued a statutory notice of deficiency (SNOD), 90-day letter.

Procedures for Transfer of Examination
  1. If the transfer request is honored, contact your GM to discuss the transfer with the receiving GM for intra-area transfers or area manager for out-of-area transfers.

  2. Upon agreement for transfer:

    1. Secure a SOL extension, as necessary.

    2. Complete Form 2363-A, Request for IDRS Input for BMF-EO Entity Change, if a transfer is due to a permanent change of address.

    3. Notify CP&C EO Referrals if the case is the result of a referral.

  3. The manager transfers the case via RCCMS.

Basic IDRS Information

  1. Some of the most commonly used forms to request research from IRS' internal sources are listed below:

    • Form 6882, IDRS/Master File Information Request.

    • Form 5644, EP/EO Inquiry Request.

    • Form 11377, Taxpayer Data Access Form.

  2. IDRS is the Service's system that enables employees to have access to taxpayer accounts and information. Some of its capabilities are:

    • Researching account information.

    • Requesting returns.

    • Entering transactions.

    • Entering collection information.

    • Generating notices and documents.

  3. Different files comprise the IDRS database. Two of the most familiar files used by all IRS operating divisions are:

    1. AIMS - This file manages IRS' inventory of open returns (and closed returns for a limited time). For example, the examiner can check the status of a return on AIMS by requesting command code AMDISA.

    2. CFOL - This file provides MF information on line immediately and is used for research only. No data can be entered on the account. For example, the examiner can request account and return information through command codes BMFOLT and BRTVU.

  4. The examiner must use the forms listed above to access information for various pre-contact planning purposes, such as verification of establishment on AIMS, SOL date, penalties assessed (or not), POA on file, amount of tax paid, filing status and statute dates of related returns, exempt status of an organization and more.

  5. Command codes and their descriptions are listed in Document 6209 (ADP and IDRS Information). This book also contains exhibits and keys to the information displayed from research results, which helps the examiner interpret the data obtained.

  6. Although IRS examiners have a wide variety of information available to them and should use it when needed, the confidentiality of tax return information and the taxpayer's privacy are of utmost importance. Unauthorized access to taxpayer account information, browsing, is illegal, and offenders are prosecuted under the provisions of RRA 1998. See IRM 10.8.10, Information Technology (IT) Security, Linux and Unix Security Policy.

  7. It is important to document case files regarding the account and related account information accessed during the examination.


    See http://irm.web.irs.gov/link.aspx?link=2 IRM Part 2, Information Technology, for further information.

Sample IDR

This exhibit illustrates a properly prepared initial IDR.


This isn’t intended to be nor should it be used as a pro forma initial IDR for an IRC 501(c)(7) or any other type of organization.

The background information for preparing the initial IDR is shown in the sample pre-contact and the initial contact workpapers. These workpapers are NOT all inclusive as to the information that should be reviewed during the pre-contact analysis or the topics to be discussed during the initial contact with the taxpayer.

The sample IDR is designed to meet TEQMS standards and to provide the taxpayer with the information necessary to comply with the request. Specific points to be noted are:

  • The return and the year under examination are identified in the first paragraph.

  • The pre-planned issues and the required filing checks are listed on the IDR.

  • The date the records are to be available is provided in the second paragraph.

  • The specific periods the records are being requested for are clearly set forth.

  • The information developed during the pre-contact analysis was used to tailor the IDR specifically to this taxpayer. It wasn’t necessary to condition the records requested with phrases such as, "if available" or "if applicable." The description of the records requested was tailored to the description provided by the taxpayer during the initial contact.


    The examiner didn’t request Forms 990-T or pension plan returns and documents because she determined during the pre-contact analysis that the Club hadn’t filed Forms 990-T and didn’t have a pension plan.

  • Only records necessary to examine the preplanned issues were requested.

  • The last paragraph notifies the taxpayer that additional records may be needed.


    It wasn’t necessary for the examiner to request the employment tax returns or the Forms W-2/1099 because the information was secured through IDRS.

Form 4564 Department of the Treasury - Internal Revenue Service Request Number
(Rev. September 2006) Information Document Request 0001
To: (Name of Taxpayer and Company Division or Branch) Subject
Any Country Club Initial appointment
  SAIN Number Submitted to:
  004 Mr. Mainstreet
  Dates of Previous Requests (mmddyyyy)
Description of documents requested
Tax Period(s): 12/31/2012
The following information is being requested for the examination of the Club's Form 990, Return of Organization Exempt From Income Tax, for the year ended December 31, 2010. The information requested is used to verify the accuracy of the Form 990 and to determine whether:
  1. The Club is properly organized and doesn't have a written discrimination policy.

  2. The Club has interest income and receipts from non-members for use of its facilities subject to the tax on unrelated business income under IRC 511.

  3. The Club has total receipts from investments and/or non-members use of its facilities that may jeopardize its exempt status.

  4. The Club has filed all required information and tax returns.

Please have the following books, records and other information available for review on May 7, 2012. All records requested are for the year ended December 31, 2010 unless otherwise indicated.
1) Articles of Incorporation and any amendments to date.
2) Bylaws in effect during 2010 and any amendments to date.
3) Membership rules including but not limited to guest policies.
4) List of all members during 2010 and a sample membership application.
5) Publications, such as newsletters, flyers, membership brochures, etc. printed by the organization.
We’ll review the requested documents and inform you of their completeness within 10 business days of receipt or by 5/17/2012 if received on the due date.
Information due by: 5/7/2012 At next appointment X Mail in
  Name and title of requester: Employee ID Number Date
From: J, EO Examiner 00–00000 4/27/2012
  Office Location: 1100 Commerce Street MC 49XX Phone: (555) 555–5555
    Dallas, TX 75242 Fax: (555) 555–5551
Catalog No. 23145K Form 4564 (Rev. 9-2006)

Correspondence Rules

What Address Goes in the Heading of Letters?

  • All examination closing letters (except letters issued by MR) must have MS 4900 DAL in the heading.

  • All examination closing letters issued by MR.

  • 30-day letters must have the mailing address of the examiner in the heading because they solicit a reply.

  • All other examination letters must have the mailing address of the sender in the heading.

What Goes in the Signature Block?

  • The Director, EO Examinations applies to all examination closing letters and 30-day letters.

  • All other letters will have the signature block of the sender.

Letters that are issued by the "group" at "group level" are considered letters issued with the GM's approval.

For letters issued by the examination group, the contact at the heading will reflect the examiner’s name.

For letters issued by a review function, the contact at the heading will reflect the reviewer's name.

For closing letters to be issued by MR, indicate the letter number in the Examination results section of Form 5773 and in the MR section of Form 3198-A.

Examiners need not print letters to be issued by MR, unless the statute date for assessment is imminent and the letter is a 90-day letter.

With respect to 30-day letters, examiners grade 11 and above in offices that don't have access to the director’s stamp may handwrite their signature in the signature block with the word "for" before the name of the Director with the GM's approval.

If correspondence rules and procedures are issued which contain different guidance be sure to follow that guidance instead.