Part 4. Examining Process

Chapter 75. Exempt Organizations Examination Procedures

Section 17. Mandatory Review

4.75.17 Mandatory Review

Manual Transmittal

October 15, 2019

Purpose

(1) This transmits revised IRM 4.75.17, Exempt Organization Examination Procedures, Mandatory Review.

Material Changes

(1) IRM 4.75.17.1.6: Updated the EO/FSL cases subject to Mandatory Review per Interim Guidance on Cases Subject to Mandatory Review, TEGE-04-0817-0027, dated September 1, 2017.

Effect on Other Documents

This supersedes IRM 4.75.17, Exempt Organizations Examination Procedures, EO Examinations Review Responsibilities and Procedures, dated June 8, 2017.
This revision incorporates Interim Guidance Memorandum TEGE-04-0817-0027, Interim Guidance on cases subject to Mandatory Review, dated July 15, 2019

Audience

Tax Exempt and Government Entities
Exempt Organizations
Examinations

Effective Date

(10-15-2019)

Margaret Von Lienen
Director
Exempt Organizations
Tax Exempt and Government Entities

4.75.17.1 (07-15-2019)

Program Scope and Objectives

  1. Purpose: This manual focuses on the unit in EO, FSL/ET area (pursuant to the TEGE reorganization), responsible for reviewing the field agents cases and providing technical services to the field. Topics addressed include:

    1. Unagreed cases without protest

    2. Preparation and issuance of 90-day letters (including statutory notices of deficiency)

    3. Closing agreements, including Classification Settlement Program (CSP) and walk in requests

    4. Technical advice or assistance requests

    5. Publishing activities (such as the IRM)

    6. Providing coordinators on various issues

  2. Audience: The procedures in this manual apply to EO including FSL/ET Examination employees in the following series:

    • GS-512

    • GS-526

    • GS-987

    • GS-501

  3. Policy Owner: EO Director

  4. Program Owner: EO

4.75.17.1.1 (06-08-2017)

Background

  1. Ensuring technical accuracy for the agent’s field audits is essential for the mission assigned to EO. Producing an accurate work product includes:

    1. Technical positions are well thought out.

    2. The facts are properly developed.

    3. Audit conclusions are fully supported.

    4. The case follows current procedures and legislation.

    5. The case file is complete and in proper order.

4.75.17.1.2 (06-08-2017)

Authority

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

  2. IRC 7602 gives agents the authority to:

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

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

    3. Issue a summons for information necessary to complete an audit.

    4. Inquire into any offense connected with the administration or enforcement of the internal revenue laws.

  3. Reviewers are familiar with and act in accordance with taxpayer rights. See IRC 7803(a)(3).

4.75.17.1.3 (07-15-2019)

Responsibilities

  1. After the audit, the reviewers are responsible to determine if:

    1. The organization meets the requirements for continued tax exempt status.

    2. The organization filed all required tax and information returns.

    3. The organization reported information and tax liabilities correctly.

    4. The agent prepared 90 day and Stat Notices properly.

    5. All FSL/ET obligations have been reported and resolved.

  2. Other review staff members are responsible for publishing matters including:

    1. Writing, editing and updating the IRM

    2. Preparing memoranda and alerts

    3. Preparing and publishing EO Examinations standard letters

  3. One or more members of the review staff are delegated the responsibility of redacting final adverse determination letters for disclosure purposes.

4.75.17.1.4 (06-08-2017)

Program Controls

  1. Agents should consult the K-Net Knowledge Management Network to ensure proper issue development and consistent application of the law.

4.75.17.1.5 (06-08-2017)

Acronyms

  1. The table lists commonly used acronyms and definitions.

    ACRONYM DEFINITION
    AIMS Audit Information Management System
    EO Exempt Organizations
    FSL/ET Federal, State and Local Governments/Employment Tax Area
    K-NET Knowledge Management Network
    SME Subject Matter Expert
    RAR Revenue Agent Report
    RCCMS Reporting Compliance Case Management System
    TAM Technical Advice Memorandum
    TE/GE Tax Exempt/Government Entities
4.75.17.1.6 (10-15-2019)

Introduction

  1. Mandatory Review provides technical guidance for examiners in EO, including FSL/ET. Generally, Mandatory Review staff conducts:

    1. Procedural reviews of certain types of cases.

    2. Develops technical guidance such as IRMs, Alerts, IGMs, etc.

    3. Performs duties related to closing agreements.

  2. Cases subject to Mandatory Review are listed below:

    1. Unagreed exam closures without protest to Appeals requiring the issuance of:

      • A Statutory Notice of Deficiency, or

      • Letter 3523, Notice of Determination of Worker Classification

      Note:

      However, all AGREED worker classification cases will close directly to the closing unit for immediate assessment.

    2. Unagreed claim disallowances (full or partial) without protest to Appeals requiring the issuance of

      • Letter 905 Final Partial Claim Disallowance, or

      • Letter 906, Final Full Claim Disallowance

    3. All revocations or any other loss of tax-exemption (even if agreed)

    4. All foundation reclassifications (even if agreed)

    5. Management requests (senior manager’s approval required)

  3. In addition to management requests (requiring senior managements approval), management may designate any type or group of cases as a 100% review category if deemed essential.

  4. Mandatory Review performs the final review of the case before it closes to the EO Closing Unit (formerly Examination Special Support (ESS)), or GE Closing Unit. Mandatory Review also handles requests for:

    • Closing agreements

    • Forms 1254, Examination Suspense Report

    • Published instructions (IRM and interim guidance memoranda)

    • EO letter revisions

    • Redactions of final audit reports, 90-day letters, and corresponding cover letters

    • Responding to procedural questions via mailbox *TEGE EO Review Staff

    • Non-standard unpublished letters assistance

  5. Mandatory Review also coordinates:

    • Closing agreements

    • Internal Revenue Manuals

    • Technical advice requests (see IRM 4.75.36 for requesting technical rulings)

    • Closing letters

    Note:

    For a complete list of collateral duties, refer to Exhibit 4.75.17-1, below; Table of Collateral duties of Review Staff

  6. -Mandatory Review has subject matter experts (SMEs) for various procedural topics discussed in IRM Chapter 4.75, EO Examination Procedures. SMEs answer questions sent to the *TEGE EO Review Staff mailbox, normally within three business days.

  7. The term Examiner in this IRM refers to the individuals assigned to EO Examination including FSL/ET cases, regardless of whether the employee is in the General Series (GS) 0501, 0512, 0526, 0592, or 0987 occupational series.

4.75.17.2 (07-15-2019)

Cases Submitted to Mandatory Review

  1. Groups closing cases subject to Mandatory Review follow the directions in IRM 4.75.16.9, Shipping from the group, and IRM 10.2.13.4.4.1, Shipping Personally Identifiable Information (PII).

  2. EO employees, including FSL/ET, will send their cases subject to Mandatory review to:

    Internal Revenue Service
    TE/GE Mandatory Review
    MC: 4920 DAL
    1100 Commerce St.
    Dallas, Texas 75242

  3. Mandatory Review Statute Coordinator- When you receive a case from a group:

    1. Acknowledge receipt of Form 3210, Document Transmittal.

    2. Return one copy of the Form 3210 to the group.

    3. Upload it to the Reporting Compliance Case Management System (RCCMS).

    4. Verify the assessment statute of expirations date (ASED). Notify the Mandatory Review manager if statute procedures (including proper use of alpha code "PP" ) aren’t followed.

      Note:

      For cases involving imminent statute returns refer to IRM 4.75.16.4.2.4

    5. Hand the case file to the Mandatory Review manager to assign to a reviewer.

    Caution:

    If the case file lacks Form 3210 or the group didn’t close the module(s) to Mandatory Review on RCCMS, prepare Form 3210, forward an e-mail to the group.

  4. Mandatory Review Statute Coordinator- If the case doesn’t belong in Mandatory Review:

    1. Prepare a transmittal (Form 3210).

    2. Complete Form 9814, Request for mail/shipping service (if sending the case outside of Dallas).

    3. Double package the file (if sending the case outside Dallas).

    4. Transfer the case on RCCMS to the appropriate unit.

    5. Send the case to appropriate unit.

  5. Mandatory Review Statute Coordinator- When you prepare the case to send to the reviewer:

    1. Prepare a case closing check-sheet, noting the name and employer identification number (EIN). See IRM Exhibit 4.75.20-1, Mandatory Review Cover Sheet.

    2. On the check sheet, indicate the date of case assignment.

    3. On the check sheet, list each tax module assigned to the reviewer by master file type (MFT), tax period, and ASED.

    4. Research the Integrated Data Retrieval System (IDRS) and generate AMDISA, BMFOLI, BMFOLT, and INOLES prints.

    5. Include the IDRS prints in the file or secure e-mail them to the assigned reviewer.

    6. Get the Mandatory Review manager’s signature on the case closing cover sheet.

    7. Place the check sheet on the outside of the case file folder.

    8. Transfer the modules in RCCMS to the assigned reviewer's inventory.

    9. Prepare Forms 3210 and 9814.

    10. Double package the file per the instructions at IRM 10.2.13.4.4.1.

    11. Put the package into the outgoing mail.

  6. Mandatory Review Manager- Upon receipt of the case file:

    1. Inspect the case file.

    2. Determine the issue(s).

    3. If the case belongs in Mandatory Review, assign to a reviewer.

    4. Give the case to a tax examining assistant/clerk indicating to whom and where to send it.

    Note:

    The Mandatory Review manager assigns cases based on reviewer workload and doesn’t consider geographical location, unless the closed case comes from a reviewer's post of duty, in which case they assign it to another reviewer. Reviewers don’t review cases they worked on before joining Mandatory Review.

  7. Reviewer, Mandatory Review - When you receive the case file:

    1. Sign the Form 3210.

    2. Prepare a fax cover sheet, attention: tax examining assistant/clerk’s e-fax number.

    3. Fax the cover sheet and Form 3210 to the tax examining assistant/clerk’s e-fax number.

    4. In MS Outlook, instruct the assistant/clerk to send the signatures to your inbox.

    5. Review the case file to verify the statute of limitations.

    6. Document in a new Form 5464 the completion of steps a through e above.

4.75.17.2.1 (07-15-2019)

Reviewing a Case

  1. The Reviewer performs the actions throughout this subsection.

  2. When reviewing the case, focus on technical and procedural accuracy. Special Review performs quality reviews of closed cases. No need to duplicate by doing a quality review on a Mandatory Review case.

  3. Focus on these key areas:

    • Verify the statute(s) of limitations.

    • Verify the proper use of alpha code "PP" for consistency.

    • Collect sufficient facts.

    • Identify direct applicable law.

    • Explain the law as applied both clearly and plainly.

    • Compute the correct amount of tax, penalties, and interest (if applicable).

    • Prepare the correct forms.

    • Review the administrative record for completeness (if applicable).

    • Determine if the case is PATH Act compliant (if applicable).

    • Help to develop the package audit.

    • Obtain missing schedules and attachments (if applicable).

  4. During the review, ensure the case contains properly:

    • Executed Forms 872, Consent to Extend the Time to Assess Tax or 872-A, Special Consent to Extend the Time to Assess Tax, if needed.

    • Completed Forms 895, Notice of Statute Expiration, if applicable.

    • Completed Form SS-10 Consent to Extend the Time to Assess Employment Taxes.

    • Assembled tax returns for all years on the Audit Inventory Management System (AIMS)/RCCMS.

    • Signed and executed Forms 2848, power of attorney and/or Forms 8821, Tax Information Authorization.

    • Documented Forms 5773, EO Workpaper Summary (modified), and Forms 5464, Case Chronology Record.

      Note:

      FSL agents will have documented Form 9984, Case Chronology, Form 4318, Workpaper Summary.

    • Developed workpapers documenting the audit and supporting the agent's determinations.

    Note:

    For cases with 990 series returns or Form 4720, Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the IRC, a scanned copy downloaded from the Statistics of Income EO Image Net (SEIN) suffices. For other types of issues, the original return needs to be in the file.

  5. Every effort will be made by the reviewer to complete the work on a case within 60 days.

4.75.17.2.2 (09-25-2014)

Preparing a Memorandum

  1. The reviewer performs the actions throughout this subsection.

  2. You may contact groups informally via e-mail, Skype, phone calls, or in person. When providing formal guidance or feedback, prepare Form 5456, Reviewer's Memorandum - EP/EO.

  3. In preparing the form, determine the type of feedback to provide:

    1. Advisory: Errors don’t require agent action(s).

    2. Inquiry: Errors require agent action(s), based on your initial review of a case.

    3. Correction: Errors still require agent action(s), based on your subsequent review of a case you previously returned to the group.

  4. Advisory memoranda may also be commendatory. You may prepare a commendatory advisory memo if you believe the agent has performed exceptionally well on a case. Group managers may place these memos in the agent's employee personnel folder.

  5. Before determining which memo to prepare, determine whether the error involves an agreed issue. In general, don’t instruct the agent to reopen an agreed issue, or create a new issue, unless your grounds are substantial and/or the potential effect upon the tax liability is material.

    Example:

    You review an unagreed case involving employment taxes for a CEO's compensation. The agent proposed full rates, explaining the organization failed to treat the CEO as an employee and issue a Form W-2, Wage and Tax Statement. You research the CEO's records in IDRS and discover the CEO filed a Form 1040 Schedule C, Profit or Loss from Business (sole proprietorship), and received a Form 1099-MISC, Miscellaneous Income, from the organization. This case involves worker reclassification, using the reduced IRC 3509(a) rates. This case would merit a return to the group.

  6. Complete the Form 5456 as follows:

    1. Check advisory, correction, or inquiry.

    2. Box 1: Insert the group number after the group manager salutation.

    3. Box 2: Identify the last agent to work the case.

    4. Box 3: Enter the date of completion of the memo.

    5. Box 4: Indicate whether the case has a short statute.

    6. Box 5: List the name, EIN, and tax modules.

    7. Box 6: Enter the year, using hyphens if multiple periods.

    8. Box 7: Check examination.

    9. Box 8: Check mandatory review.

    10. Box 9: Check the applicable box.

    11. Box 10: Enter a date and initials if indicating an error in the agent's computations.

    12. Box 11: List the pages of the agent's report that have computational errors.

    13. Box 12: Write the text of the memo, indicating a continuation on Form 886-A, Explanation of Items, if necessary.

    14. Box 13: Electronically sign (e-sign) the memo (3 times) after completing the remaining boxes.

    15. Box 14: Leave blank.

    16. Box 15: Check the type of error(s).

    17. Box 16: Check the specific error, if applicable.

  7. When writing an inquiry or correction memo:

    1. Use plain language.

    2. Provide a brief history of why Mandatory Review has the case.

    3. Outline the errors identified in the case file.

    4. Outline a course of action for the agent to complete.

    5. Provide corrected computations, if applicable.

    6. Give directions on how to prepare Form 5457, Response to Reviewer's Memorandum - EP/EO.

    7. List your mailing address.

    Note:

    Reviewers would reference an attachment on Form 5456 and write all additional comments on a Word file which can be converted to a PDF file if necessary.

  8. For advisory memos, identify the error(s). Show where to find directions to avoid the errors in the future. (Cases without errors may merit a commendatory advisory memo).

  9. For inquiry and correction memos, continue to IRM 4.75.17.2.3, Returning a Case. For advisory memos, skip to IRM 4.75.17.2.4, Closing a Case.

4.75.17.2.3 (09-25-2014)

Returning a Case

  1. Unless otherwise indicated, the reviewer, Mandatory Review performs all actions indicated in the paragraphs below:

  2. When you complete the memo and insert any additions to a Word file, e-sign the memo. Each page of the Form 5456 contains a separate signature field in Box 13.

  3. For EO and FSL/ET cases, will secure e-mail the memo to the Mandatory Review manager. In the e-mail identify the group manager and area manager.

  4. When you receive a digitally signed memo from the Mandatory Review manager:

    1. Print the memo.

      Caution:

      You may need to separately print various pages of the memo if your printer prints double sided by default.

    2. Place the memo on the front of the file.

    3. Import -the Form 5456, Reviewers Memorandum-EP/EO, to the RCCMS case file to become part of the official RCCMS file.

    4. For both EO and FSL/ET cases, notate receipt of the digitally signed memo on Form 5464, Case Chronology Record.

    5. Prepare Form 3210, using the most recent organizational chart to find the group manager's address.

    6. Complete Form 9814, checking the appropriate UPS/Fed Ex option.

    7. Double package the file per IRM 10.2.13.4.4.1.

    8. Request a transfer of the files in RCCMS.

    9. Place the case in the mail.

    10. E-mail a copy of the Form 3210 to the Mandatory Review statute coordinator. In the e-mail, provide the group number and request a transfer of the case.

    Note:

    Some managers prefer you to ship the case to the agent. When preparing the transmittal, consult the manager as needed to determine where to ship the case.

4.75.17.2.3.1 (07-15-2019)
Group's Response

  1. The group manager considers the reviewer’s memorandum. The group must submit their reply within 60 days of receipt.

    1. If the group manager considers the reviewer's memorandum inappropriate, refer to IRM 4.75.17.2.3.2, Dispute Resolution.

    2. Otherwise, forward Form 5456 via secure e-mail to the agent. Return the case to the agent via RCCMS, and maintain appropriate AIMS controls.

  2. The agent: Upon receipt of the returned case:

    1. Reopen the case on Web ETS.

    2. Flip the Form 5456 over to see if there is a word file printed on the back.

    3. Review the memo.

    4. Note the directions provided in the memo.

    5. Contact the reviewer if you have any questions about the directions.

  3. Confer with your manager about the requested actions. If you and your manager disagree with the course of action, proceed to IRM 4.75.17.2.3.2, Dispute Resolution. Otherwise, perform the actions requested.

    Caution:

    If you don’t do the actions requested, you may receive the case back again, with a correction memo attached.

  4. If unable to complete the actions requested, ask the reviewer for an alternative course of action.

  5. Request and secure a statute extension, if needed.

  6. Before you close your case to your manager:

    1. Fully document your actions taken in your Form 5464 and on Form 5457.

    2. Verify that the hours on your Form 5464 agree with the time input on Web ETS.

    3. Update and print your Forms 5599, 5773 and related workpapers.

    4. Electronically sign and print the Form 5457.

    5. Upload the Form 5457 and the other updated documents to RCCMS.

    6. Reassemble your case file. See IRM 4.75.16.7, Case File Assembly.

  7. Close the case file to your manager.

    Note:

    If located in a different post of duty than your manager, prepare a transmittal package (Forms 3210 and 9814) to ship the case via UPS to your manager. Double package the case file using approved materials. See IRM 10.2.13.4.4.1.

  8. Reply to Mandatory Review within 60 days of receipt of a reviewer's memo.

  9. FSL/ET groups will alternatively take the appropriate action per Form 5456’s directions. Accordingly:

    1. E-mail an information copy of the Form 3210 to the Mandatory Review manager, so he/she will be aware the case has been returned to the Reviewer.

    2. Close the examination case if the group’s reply to the Mandatory Review reviewer addresses all issues in a satisfactory way.

    3. Forward the case to the Mandatory Review manager, for additional guidance and direction if one or more issues remain unresolved.

    4. FSL/ET groups will also reply to Mandatory Review within 60 days of receipt of a reviewers memo.

      Note:

      FSL/ET may continue to use Form 9984 in lieu of EO’s Form 5464 and Form 4318 in lieu of Form 5773.

4.75.17.2.3.2 (07-15-2019)
Dispute Resolution

  1. The group manager has two options for resolving disputes with a reviewer's recommended course of action:

    1. Contact the reviewer to discuss the case. Document the outcome of the discussion in the Form 5457. Have the agent complete any agreed upon actions. Sign the Form 5457 and return the case to the reviewer.

    2. Complete the Form 5457 documenting the disputed items and why the group won't take the course of action. Sign the Form 5457 and return the case to the reviewer.

  2. Reviewer: Upon receipt of the case file:

    1. Review the Form 5457 and the case file.

    2. Determine whether to agree with the group manager.

    3. Sign the Form 5457, checking the applicable entries in boxes 8 and 9.

  3. Reviewer: If in disagreement with the group, contact the Mandatory Review Manager. Provide a copy of the Form 5457. Discuss the case.

  4. Mandatory Review manager: Schedule a call with the EO or FSL/ET group manager and his/her area manager. Document the discussion and any resolution agreed upon by the area manager and the EO or FSL/ET manager. If the parties can't agree upon a course of action, the Director EO Examinations makes the final decision on the issue.

  5. Mandatory Review manager: Convey the directions to the reviewer, who either prepares a correction memorandum to return the case, or proceeds to make any necessary corrections before closing the case.

  6. Reviewer: If issuing a correction memorandum, see IRM 4.75.17.2.2, Preparing a Memorandum. If correcting any errors and closing the case, see IRM 4.75.17.2.4, Closing a Case.

4.75.17.2.4 (09-25-2014)

Closing a Case

  1. Reviewer: If there aren’t problems regarding the case, prepare it for closure:

    1. Consider a commendatory memo (If appropriate).

    2. Complete and sign the closing check sheet.

    3. Sign and date the Forms 5599 and 5773.

    4. Upload the 90-day letter package and any workpapers you've created to RCCMS.

    5. For revocations, send the redaction package to the Mandatory Review senior tax analyst.

    6. If available as an option, scan and upload the Area Counsel memorandum to RCCMS.

    7. Print your Form 5464 and place it behind the case closing check sheet.

  2. Reviewer: Prepare the case to ship to Dallas:

    1. Prepare Forms 3210 and 9814. See IRM 4.75.16.9 for where to mail the file and the method of mailing.

    2. Double package the file per IRM 10.2.13.4.4.1.

    3. Place the package in the mail, as per local procedures.

    4. Complete the closing record on RCCMS and close the case.

      Note:

      FSL/ET cases are closed to GE Closing Unit upon case resolution or after 90-day suspense.

4.75.17.2.5 (07-15-2019)

90-Day Letter Preparation and Issuance

  1. The Reviewer prepares and issues 90-day letters in general for unagreed without protest cases.

  2. If you concur with the agent's proposed course of action and you determine that case file has no errors, and if the case wasn’t protested, prepare a 90--day letter for these situations:

    • Foundation status modification of an IRC 501(c)(3) organization

    • Revocation of any tax-exempt organization

    • Disqualification of a status 36 organization

    • Year to year disqualification of a IRC 501(c)(12) or (c)(15) organization

    • Unagreed tax deficiencies (not including non-worker classification employment taxes and miscellaneous excise taxes)

    • IRC 7436 and worker classification issues require a letter 3523.

  3. For guidance on preparing the 90-day letter, consult the following manuals:

    • For all foundation status modifications not protested: IRM 4.75.20, Final Case Processing

    • For all IRC 501(c) or (d) revocations not protested: IRM 4.75.20

    • For unagreed without protest tax deficiencies (income tax): IRM 4.8.9, Statutory Notices of Deficiency

    • For unagreed without protest tax deficiencies (Chapter 41 and 42 excise taxes): IRM 4.75.20 andhttps://www.irs.gov/pub/irs-tege/atg_private_foundations.pdfPDF.

    • For unagreed without protest worker classification determinations: IRM 4.8.10, Notice of Employment Tax Determination Under IRC 7436 and IRM 4.23.22, Employment Tax, Unagreed Employment Tax Procedures.

    • For issuing 30-day letters where no worker classification issues are present: IRM 4.23.10.10, 30-Day Letters

    • For issuing 30-day letters when both IRC 7436 and non-IRC 7436 issues are present: IRM 4.8.10.1.3.1, 30-Day Letters.

    Note:

    Don’t prepare 90-day letters for unagreed employment tax deficiencies - non-worker classification, and for miscellaneous excise taxes, such as gaming excise taxes. In these situations, the 30-day letter serves as the final letter if not protested.

  4. When you've finished creating the 90-day letter package:

    1. Print one copy of the proposed 90-day letter package, along with any power of attorney cover letters.

    2. Place the letter in front of the case file.

    3. Reassemble the file, if necessary, in the proper order. See IRM 4.75.16.7, Case File Assembly.

    4. Reassemble and re-index the administrative record, if necessary. See IRM 4.75.32.5, Preparation of the Administrative Record.

  5. Prepare a brief memo to Area Counsel requesting pre-issuance review of the 90-day letter. See IRM 4.75.20-2, Memorandum to Area Counsel. Consult Chief Counsel's website for the appropriate Area Counsel office: http://ccintranet.prod.irscounsel.treas.gov/OrgStrat/Offices/TEGE-DC/General%20Documents%20and%20Links/Area%20Counsel%20Geographic%20Jurisdiction%20Map.pdf

    Note:

    It’s recommended the reviewer first review the file to see if Area Counsel previously had been involved in advising Exam in the case. The file should be sent to the Area Counsel office attorney who originally worked on the case.

  6. After consulting the map, prepare a Form 3210 and Form 9814 to ship the case to the identified Area Counsel office. For a list of Area Counsel office addresses, see http://ccintranet.prod.irscounsel.treas.gov/OrgStrat/Offices/TEGE-DC/Pages/AreaCounselOffices.aspx.

  7. Double package the file per IRM 10.2.13.4.4.1. Send the file to Area Counsel per the time frames listed at IRM 4.75.16.9.

  8. When Area Counsel returns the file, acknowledge receipt on the Form 3210 and return the form. Retain a copy of the Form 3210 as per local procedures.

  9. Review the memorandum from Area Counsel. Make any corrections to the 90-day letter package as directed. If you have questions, consult the memo author.

  10. Anytime an EO or FSL specialist, reviewer or field manager discusses an issue with Area Counsel it is documented in the file (such as the case chronology record), indicating Area Counsel had been consulted, the name of the attorney, contact number, etc.

  11. For final adverse determination letters, grade 12 reviewers and above may authorize and sign. If needed, make copies of the letters for distribution to powers of attorney.

  12. Print and date stamp the completed final 90-day letter package. Use the method provided in IRM Exhibit 4.8.9-2, Computation of Last Day to File a Petition with United States Tax Court and Computation of Default Date, to determine the last day for filing a petition.

  13. For statutory notices of deficiency and notices of worker classification determination, signature stamp the letter with the Director, EO Examinations signature.

  14. Make additional copies of the 90-day letter as indicated in the enclosure statements at the end of the letter. Make a copy of the 90-day letter package for the case file, and one for the administrative record if necessary. If available as an option, scan the 90-day letter and upload it to RCCMS.

  15. Prepare the 90-day letter package for mailing, either certified for domestic addresses, or registered for foreign addresses:

    1. Follow local procedures for obtaining postage and mailing the package.

    2. Obtain a stamped certified or registered mail receipt. (For countries that don't permit registered mail, get a certificate of mailing).

    3. Complete Postal Service (PS) Form 3877, Firm Mailing Book for Accountable Mail.

    4. Copy the receipt and staple the photocopy to the back of the retained 90-day letter package. (Make two photocopies if an administrative record is involved).

    5. Staple the original receipt to the PS Form 3877 and place the form in the front of the case file.

  16. See IRM 4.75.17.2.4, Closing a Case.

    Note:

    Remember to verify the last known address prior to sending the notice. See IRM 4.8.9.8.2.1, Last Known Address.

  17. All EO and FSL/ET Statutory Notices of Deficiency will be maintained by Mandatory Review staff in Dallas during their 90-day period. See IRM 4.75.20.6.2, Procedures Following the 90 Day Period.

4.75.17.2.6 (07-15-2019)

Redaction Procedures

  1. Reviewer: After you issue the final adverse determination letter to the taxpayer, prepare an electronic redaction package with copies of the following documents:

    1. 30-day letter issued by the group.

    2. Explanation of items (Form 886-A or its equivalent).

      Note:

      The Microsoft Word version of Form 886-A is required for the redaction package. Be aware if the PDF documents aren’t fillable, then a Word version of the 30-day and 60-day letters are required.

    3. Final adverse determination letter sent to the taxpayer with its issuance date.

    4. Form 4194, Revocation of IRC § 170(c) Status, (if contributions are deductible under IRC 170).

    Note:

    Other attachments to the 30-day letter, such as Forms 4621-A, Report of Examination-Exempt Organizations, and 6018, Consent to Proposed Adverse Action, don’t need redaction.

  2. For 501(c) "Other" revocations, we now issue a 90-day final letter which is included in the redaction package.

  3. Send the redaction package via secure messaging to the IRC 6110 Redactions Coordinator. Don’t use personally identifiable information in the subject line of the e-mail.

  4. See IRM 4.75.20.5.1, Publication of the Determination for further procedures.

4.75.17.3 (06-08-2017)

Responding to Questions

  1. Mandatory Review encourages all EO Examination employees to submit their procedural questions to the *TEGE EO Review Staff mailbox.

  2. Examination employees first consider submitting their technical questions by clicking on "ask a question" on the relevant Knowledge Network (K-Net) site on the KM portal.

  3. Before you submit a question, review the available materials on the topic, such as:

    • Internal Revenue Code sections

    • Treasury Regulations

    • Applicable court cases

    • Other legal guidance

    • Continuing professional education materials

    • Internal Revenue Manuals

    • Interim guidance memoranda

    Reminder:

    See IRM 4.10.7.2, Researching Tax Law for a comprehensive listing of available legal resources.

  4. Please list the resources you researched when submitting your question.

  5. The mailbox coordinator either answers or forwards the question to a SME, with an expected response of three business days. SMEs aren’t limited to members of Mandatory Review.

  6. When an agent or manager directly contacts a reviewer, whether by Skype, in person, or by phone, the reviewer documents the question (such as copying the conversation from Skype to e-mail) and forwards the question with the reviewer's response to the mailbox.

  7. Mandatory Review maintains a table of previously asked questions and responses. The reviewer may access this table to see if a previously provided answer is available and applies it to the current question.

4.75.17.4 (09-25-2014)

Form 1254 Suspense Procedures

  1. For guidance on suspending cases using Form 1254 see IRM 4.2.1.4, 1254 Suspense and IRM 4.8.2.11, Suspense Cases. Examination Technical Services is the SB/SE counterpart to EO Examinations Mandatory Review.

  2. When preparing Form 1254, replace the salutation from "SB/SE, Technical Services Group Manager" to "Mandatory Review manager" .

  3. When following IRM 4.8.2.11.1.1, Placing the Case in Suspense, put the case into status 38 in lieu of status 30.

Exhibit 4.75.17-1

Table of Collateral Duties of Review Staff

Duties Special Review Mandatory Review
Audit hour presentations X  
Churches   X
Claims   X
Closing agreements   X
CPE and group presentations X X
Develop operating procedures X X
Fraud   X
Internal Revenue Manual updates X X
Newsletters X  
Notices of worker classification determination   X
Restricted Interest X  
Statute of limitations X X
Statutory notices of deficiency   X
Technical advice memoranda   X
*TEGE EO Review Staff mailbox questions   X