4.103.2 CDE Procedures18.104.22.168 Overview22.214.171.124 Access to CDE126.96.36.199 DIF Order Approval188.8.131.52 CDE Research Request Overview184.108.40.206.1 Research Request Approval Process220.127.116.11.2 CDE Research Request Form18.104.22.168.3 Paper Trail and Retention22.214.171.124 CDE Extract Request Overview126.96.36.199.1 Extract Request Approval Process188.8.131.52.2 CDE Extract Request Form184.108.40.206.3 Use and Disposition of CDE Extracts220.127.116.11 Codes Used in CDE18.104.22.168.1 Selection Reason, Source, Project and Aging Reason Codes22.214.171.124.2 Tracking codes126.96.36.199.3 Disposal Codes188.8.131.52.3.1 Accepted as Filed184.108.40.206.3.2 Survey220.127.116.11 Erroneous Accesses18.104.22.168 Information Reports22.214.171.124 Employee Returns126.96.36.199 Proper Handling of CDE Facsimiles and Other CDE Documents188.8.131.52 Disclosure of CDE Facsimiles184.108.40.206 Time Reporting220.127.116.11 CDE Procedures/System Change Request Part 4. Examining ProcessChapter 103. 3 Compliance Data Environment (CDE)Section 2. CDE Procedures 4.103.2 CDE Procedures Manual Transmittal May 13, 2011 Purpose (1) This transmits new IRM 4.103.2, Compliance Data Environment (CDE), CDE Procedures. Material Changes (1) CDE is a new system that replaced the Midwest Automated Compliance System (MACS). This IRM provides operating procedures for CDE Users. Effect on Other DocumentsNone AudienceSmall Business and Self Employed (SB/SE), Wage and Investment (W&I), and Large Business and International (LB&I) employees that use the CDE application. Effective Date(05-13-2011) Karen SchillerDirector, Operations Support SE:S:E:OSSmall Business/Self Employed Division 18.104.22.168 (05-13-2011) Overview This section contains operating procedures for CDE Users. These procedures apply to all persons authorized to access CDE. They may also apply to others who use CDE information. CDE Users are prohibited from accessing information not needed to perform official duties. Unauthorized access to accounts is a fundamental violation of the public trust in the confidentiality of returns and return information, one of the foundations of sound tax administration and public confidence in that system. It also violates both privacy and disclosure rules and may result in removal from the Service and/or criminal prosecution. 22.214.171.124 (05-13-2011) Access to CDE A CDE User is an individual who has been granted authority to access CDE. No one may conduct any type of research on CDE until they have been established as a User by the System Administrator. All prospective Users must first register with the Employee User Portal (EUP) and then complete an Online Form 5081, Information System User Registration/Change Request (https://ol5081.enterprise.irs.gov/ ), before they can access CDE. The individual will be set up as an Area User, National User, or Campus User and will only have access to applicable data. For each CDE session, Users are required to log into the EUP to access CDE with their Standard Employee Identifier (SEID) and password. Users are responsible for all their activities performed in CDE. 126.96.36.199 (05-13-2011) DIF Order Approval Form 6356Individual Return DIF Orders, or its equivalent is to be completed before creating any DIF workload sets. See IRM 188.8.131.52, Guidelines for Ordering Returns, for more information. 184.108.40.206 (05-13-2011) CDE Research Request Overview Research is defined as any Filter activity on the CDE system. All filtering on CDE requires a signed CDE Research Request except: Case building for returns already on AIMS. DIF Classification. Form 5346, Information Reports and Other Type Referrals. Periodic validity testing of new data or program updates. Subsequent repetitive profiling requests. Minor modifications may be made to the original Research Request without submitting a new request. This should be documented by notation or addendum to the request form. Minor modifications must not change the intent of the original request. Examples of minor modifications include: Extension to other years Refinements of dollar criteria Expansion to other PODs 220.127.116.11.1 (05-13-2011) Research Request Approval Process All CDE Research Requests should first be submitted to the requester’s manager for approval. The approved request will then be routed to the local PSP TM or delegate for signature. If the requester is a first line manager or above, the Research Request may be routed directly to the PSP TM or delegate for signature. All CDE Research Requests from outside of SB/SE Examination should first be submitted to the requester's manager for approval. The request will be routed through appropriate channels to the servicing PSP TM. CDE Research Requests containing taxpayer identifying information must be routed securely (e.g. secure messaging). A request originating within PSP may have the same person provide both levels of authorization. CDE Users will not be allowed to authorize, even in an acting managerial capacity, any CDE Research Requests which will be assigned to them. Once the PSP TM or delegate approves the request, it is routed to the Headquarters, Exam Planning and Delivery (EPD) Analyst for approval. After National approval the Research Request will be sent to the requesting PSP. 18.104.22.168.2 (05-13-2011) CDE Research Request Form Research is requested using the CDE Research Request Form. The following information should be included on the request form: Name of requester Date of request Group POD Telephone Number Manager signature and date PSP/Campus Compliance Signature Type of research requested Type of return Tax period(s) Explanation of information requested Note: The explanation should be specific and identify issues to be researched. Factors to consider or include when preparing this section are: tax periods or file years to be researched, appropriate data fields and filter logic required, and geographic areas for inclusion. TIN, if appropriate The CDE Research Request form can be found in the CDE website "Job Aids" folder at http://mysbse.web.irs.gov/exam/tip/cde/jobaids/default.aspx. 22.214.171.124.3 (05-13-2011) Paper Trail and Retention The Research Request form should include the: date received date assigned assigned Filter Creator name CDE ID number and CDE filter name to maintain an audit trail and support research conducted on CDE. CDE security requires documentation be kept for a period of six years. This includes the original approved Research Request forms along with modifications and addenda. 126.96.36.199 (05-13-2011) CDE Extract Request Overview A CDE Extract Request is required for requests meeting any of the following criteria: It is requested by a function that does not have CDE access. It includes tax return data outside the requester's Area or Campus. It requests data comparison from one year to another. It will not reside within the CDE application. 188.8.131.52.1 (05-13-2011) Extract Request Approval Process All CDE Extract profiling requests from SBSE Examination, Campus Compliance, Headquarters, or other functions will be submitted to the appropriate Territory Manager, Area Director or equivalent for approval and then forwarded to the CDE Development Center for processing. CDE Extract Requests, excluding profiles, originating in SBSE Examination or Campus Compliance will be submitted to the appropriate PSP or Campus Compliance TM for approval. The request will then be forwarded to the Director of Exam Planning and Delivery (EPD) for concurrence. After full approval, the CDE Extract Request will be forwarded to the CDE Development Center for processing. CDE Extract Requests, excluding profiles, outside of SBSE Examination or Campus Compliance will be submitted to the appropriate Territory Manager, Area Director or equivalent. The request will then be forwarded to the appropriate Headquarters Executive for concurrence. After full approval, the CDE Extract Request will be forwarded to the CDE Development Center for processing. 184.108.40.206.2 (05-13-2011) CDE Extract Request Form Requests for CDE Extracts will be made by completing the CDE Extract Request form and will include the following information as appropriate: A copy of the CIP or other approved project authorization, if appropriate The requesting function, location, name and telephone number of the contact person who can answer questions about the request A description of the request including complete query criteria or filter definition, if appropriate Fields to be included in the output A statement that electronic data received as a result of the extract request containing taxpayer specific data will be kept in an encrypted directory on the requesters local machine A statement that the extract data will be deleted or destroyed when the project is completed, abandoned or data is no longer needed for the project and that the data may not be used for any purpose other that the original project A statement that all necessary actions will be taken regarding privacy and safeguarding data in compliance with IRM 10.8.1, Information Technology Security, Policy and Guidance The CDE Extract Request form can be found in the CDE website "Job Aids" folder at http://mysbse.web.irs.gov/exam/tip/cde/jobaids/default.aspx. CDE Development Center will take the following actions upon the receipt of the request: Review for completeness and proper approval. CDE personnel will contact the person indicated on the request form that the form has been received, the action that will be taken or if the request is incomplete. Process requests in order of the date received on a "first in/first out" basis unless otherwise instructed by the CDE Program Manager. Retain the ability to recreate electronic extracts for three years. 220.127.116.11.3 (05-13-2011) Use and Disposition of CDE Extracts Electronic data received as a result of the CDE Extract Request containing taxpayer specific data will be kept in an encrypted directory on the requesters local machine and can only be used for the specific purpose stated on the extract request. This data should be deleted when the project is completed, abandoned or no longer needed. CDE security requires documentation be kept for a period of six years. This includes the original approved Extract Request form along with modifications and addenda. 18.104.22.168 (05-13-2011) Codes Used in CDE The following codes are used in CDE: Selection Reason code Source code Project code Aging Reason code Tracking code Disposal code 22.214.171.124.1 (05-13-2011) Selection Reason, Source, Project and Aging Reason Codes A listing of selection reason codes, sources codes, projects codes, and aging reason codes used in CDE can be found in the CDE website "Job Aids" folder at http://mysbse.web.irs.gov/exam/tip/cde/jobaids/default.aspx 126.96.36.199.2 (05-13-2011) Tracking codes Tracking codes can also be input into CDE, but are not required. 188.8.131.52.3 (05-13-2011) Disposal Codes The following disposal codes are used in CDE: Disposal Code 23 Disposal Code 24 Disposal Code 31 Disposal Code 35 184.108.40.206.3.1 (05-13-2011) Accepted as Filed Disposal Code 23 - Accepted as Filed by Classification for returns other than DIF. This disposal code is used only when the return is not on AIMS. Disposal Code 24 - Accepted as Filed by Classification for DIF returns. This disposal code is used only when the return is not on AIMS. 220.127.116.11.3.2 (05-13-2011) Survey Disposal Code 31 - Survey Before Assignment by PSP - input by Virtual Inventory Administrator (VIA) when deleting a case file(s). Disposal Code 35 - Survey Excess Inventory - input by VIA when deleting a case file(s). 18.104.22.168 (05-13-2011) Erroneous Accesses All attempts to access IRS returns are recorded by CDE in its audit trail file. Users should follow the procedures for Form 11377-E, Taxpayer Data Access, to document accesses that are erroneous or may not otherwise have sufficient documentation. 22.214.171.124 (05-13-2011) Information Reports If, while conducting research on CDE, a return is noted that contains potential issues not necessarily relevant to the purpose of the research, but does have indications of significant noncompliance, then information reporting procedures contained in IRM 126.96.36.199.5, Information Reports/Referrals - Other Types, should be followed. 188.8.131.52 (05-13-2011) Employee Returns Employee returns and their spouses are included in the CDE database and are subject to the same research processes as other returns. Employee returns must be treated like all other returns identified during research on CDE. Filters should never be rerun for the purpose of eliminating Employees from a TIN List. When an employee's tax return is viewed or printed, this fact will be noted on CDE facsimile. See IRM 184.108.40.206, Examination of Employee Returns, for guidance on employee audits. An indication whether the tax return is an IRS employee's tax return is included in the sample report. On the Form 3210, Document Transmittal the comments field is populated if the return belongs to an employee. Complete Form 11377-E, Taxpayer Data Access, to document. See IRM 220.127.116.11.10.1, Employee Audit Classification, for additional procedures. 18.104.22.168 (05-13-2011) Proper Handling of CDE Facsimiles and Other CDE Documents The same security should be provided for any document produced by CDE containing taxpayer identifying information as is given actual tax returns and all other confidential taxpayer information. This includes transmittal via Form 3210, Document Transmittal, for any documents containing taxpayer identifying information distributed outside of the PSP Area Support/Campus Exam Operations. All electronic CDE documents must be encrypted before being sent. All CDE electronically stored documents must be encrypted. CDE documents containing taxpayer information such as TIN Lists, should be properly disposed of by the recipient following IRS security procedures. 22.214.171.124 (05-13-2011) Disclosure of CDE Facsimiles Standard Disclosure practices should be followed. The examiner cannot share with the taxpayer or representative, the Taxpayer Identifying Information Sheet contained within the CDE Case File. IRC 6103(b)(2) specifically prohibits disclosing the DIF score which is included on the Taxpayer Identifying Information Sheet. 126.96.36.199 (05-13-2011) Time Reporting The following activity codes should be used for time spent on CDE activities: Project Coordination, Activity Code 617 (Project Coordination) Classification Management, Activity Code 624 is used when reviewing CDE returns. Return Classification, Activity Code 625 (Classification) to be used when accessing CDE as a classifier. Return Coordination, Activity Code 621 (Classification Returns) to be used by the Returns Classification Coordinator. See IRM Exhibit 4.9.1-2, Definitions of Miscellaneous Examination Activity Codes (Direct and Non Direct). 188.8.131.52 (05-13-2011) CDE Procedures/System Change Request CDE Users are encouraged to suggest enhancements or modifications to CDE. CDE Procedures/System Change Request form is available for making these suggestions. The request should be routed to the CDE Development Center. CDE Procedures/ System Change Request form should be used to: Request clarification of existing procedures Request new or additional procedures Identify procedural problems Request system changes A copy of the CDE Procedures/System Change Request form can be found in the CDE website "Job Aids" folder at http://mysbse.web.irs.gov/exam/tip/cde/jobaids/default.aspx.