7.11.9 Mandatory and TEQMS Case Reviews

Manual Transmittal

February 22, 2018

Purpose

(1) This transmits revised IRM 7.11.9, Employee Plans Determination Letter Program, Mandatory and TEQMS Case Reviews.

Material Changes

(1) Updated various sections for grammatical rules in the IRS Style Guide.

(2) Updated various sections to meet the requirements of P.L. 111-274 (H.R. 946), the Plain Writing Act of 2010.

(3) Updated and renamed IRM 7.11.9.1, Introduction, to Program Scope and Objectives. Also moved the Background to IRM 7.11.9.1.1, Background, and added IRM 7.11.9.1.2, Acronyms, to satisfy the internal controls requirement of IRM 1.11.2.2.5.

(4) Updated IRM 7.11.9.2, Mandatory and TEQMS Case Reviews, to show that TEQMS cases are closed before Quality Assurance review and updated the list of applications that are subject to mandatory review to remove:

  1. Foreign plans.

  2. Cash balance conversion plans or pension equity plans.

  3. Volume submitter and Master & Prototype plans initially reviewed by the pre-approved plans cadre.

  4. Terminations with over 1,000 participants.

  5. Variable annuity plans.

(5) Updated IRM 7.11.9.2.2, Reviewers Case Return Procedures, to clarify that TEQMS cases may only be re-opened and returned to the specialist if they meet the criteria in IRM 7.11.3.9.2, Procedures for a Returned Case criteria.

Effect on Other Documents

This supersedes the following:
• IRM 7.11.9, dated March 24, 2016.
• Interim Guidance Memorandum #TE/GE-07-0417-0018, dated April 28, 2017.
• Interim Guidance Memorandum #TEGE-04-0817-0027, dated September 1, 2017.

Audience

Tax Exempt and Government Entities
Employee Plans
Determinations

Effective Date

(02-22-2018)

Catherine L. Jones
Acting Director, Employee Plans
Tax Exempt and Government Entities

Program Scope and Objectives

  1. Purpose: This IRM lists procedures for employees when their determination letter case is selected for mandatory or Tax Exempt Quality Measurement System (TEQMS) case review.

  2. Audience: Employee Plans (EP) Determinations and Quality Assurance (QA) staff

  3. Policy Owner: Director, EP

  4. Program Owner: EP

  5. Program Goals: The goal of EP Determinations is to ensure that plans comply with the tax laws by reviewing applications for determination letters, opinion letters, and advisory letters, and to protect the public interest by applying the tax law with integrity and fairness to all.

Background

  1. EP Determinations Quality Assurance staff (QA) is responsible for assessing case quality, identifying best practices, and providing recommendations for quality improvement and consistency in the determination letter program.

  2. To help achieve these responsibilities, QA performs mandatory and TEQMS reviews of EP Determinations cases.

  3. TEQMS is a system designed to measure the quality of the EP Determination letter program. QA reviews a sample of both Technical Screening and EP Determination cases for TEQMS. See IRM 7.11.3, Employee Plans Determination Letter Program, Tax Exempt Quality Measurement System (TEQMS), for more information on how TEQMS cases are selected and reviewed.

Acronyms

  1. These acronyms are used in this IRM:

    Acronym Term
    DOL Department of Labor
    EDS Employee Plans/Exempt Organizations Determination System
    EP Employee Plans
    PBGC Pension Benefit Guaranty Corporation
    POD Post of Duty
    QA Quality Assurance staff
    RRA '98 Internal Revenue Service Restructuring and Reform Act of 1998
    TEQMS Tax Exempt Quality Measurement System
    WebETS Web-Based Employee Technical Time System

Mandatory and TEQMS Case Reviews

  1. QA reviewers are responsible for analyzing EP Determinations open mandatory cases and closed TEQMS cases for quality and technical soundness:

    1. Mandatory Review - complex issue cases that require extra review (see list in IRM 7.11.9.2 (2) below)

    2. TEQMS Review - cases randomly selected by the Employee Plans/Exempt Organizations Determination System (EDS) and updated to status 31 to measure the quality of EP Determinations work as required by the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA '98)

      Note:

      EP Determinations cases may be selected for both mandatory and TEQMS reviews at the same time.

  2. The following applications are subject to mandatory review:

    1. Cases with interested party comments. See IRM 7.11.1.29, Interested Party Comments.

    2. Terminations with reversions of more than $5,000,000 and two percent of all other terminations.

    3. Technical advice requests. See IRM 7.11.12, Technical Advice Requests.

    4. Proposed adverse determination cases. See IRM 7.11.11, Proposed Adverse Cases.

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

QA Reviewer Responsibilities

  1. Complete full reviews on TEQMS and mandatory review cases to ensure that each case reviewed complies with:

    1. Applicable Law/Cumulative List/Required Amendments List for qualified retirement plans.

    2. TEQMS elements and standards. QA reviewers complete an electronic checksheet (called a survey) for all TEQMS review cases.

    3. Document processing rules, such as notifying of DOL, PBGC or interested parties, when applicable.

    4. Applicable procedures in IRM 7.11.1, Employee Plans Determination Letter Program.

  2. Monitor and record if the IRS position was properly applied before the case was closed.

  3. Report any emerging technical/procedural issues you find during case reviews to the EP Determinations QA manager.

Reviewers Case Return Procedures

  1. If you determine that a case should be returned to the specialist for further development, follow these steps:

    Note:

    TEQMS cases may only be re-opened and returned to the specialist if they meet the criteria in IRM 7.11.3.9.2, Procedures for a Returned Case criteria.

    1. Complete a Form 5456, Reviewer's Memorandum - EP/EO.

    2. Prepare a summary of the items on Form 5456, line 12 or attachment that the specialist should address.

    3. Forward the Form 5456 to the EP Determinations QA manager for approval.

    4. If the specialist who closed the case is not located in the same Post of Duty (POD) as his/her manager, return the paper case, orange folder and approved Form 5456 to the specialist and secure email with the Form 5456 attached to the specialist's manager. If the specialist who closed the case is in the same POD as his/her manager, return the paper case, orange folder and approved Form 5456 to the specialist's manager.

    5. Keep a copy of Form 5456 in a central QA location.

    6. Update the case status on EDS.

  2. When QA receives the case back:

    1. Update the case on EDS to status 31.

    2. Review the submitted recommendations and conclusion.

    3. The QA manager and reviewer approve Form 5457, Response to Reviewer’s Memorandum - EP/EO.

    4. Close the case and issue the favorable determination letter, if applicable.

Group Procedures - Case Returned by QA

  1. When a case is returned to a specialist, it’s generally returned to the original specialist. If assigned to another specialist in the group, the group secretary updates to that specialist's number on EDS and keeps the case in status 32.

  2. The specialist must:

    1. Re-open the case on Form 6490, Web-Based Employee Technical Time System (WebETS), using the procedures in the WebETS user guide, chapter four, paragraph five.

    2. Consider all the issues the reviewer raised and complete all necessary action as soon as possible.

    3. If applicable, prepare a revised determination letter and place it in the file.

    4. Complete a Form 5457, Response to Reviewer’s Memorandum - EP/EO addressing all reviewer listed issues. Include reasons for not following the reviewer's recommendations.

    5. Attach the Form 5457 to the front of the case file and forward to your group manager for review and approval.

  3. The group secretary or clerk returns the case to the reviewer.

  4. If the case becomes unagreed or adverse actions are proposed, follow the procedures in IRM 7.11.11, Proposed Adverse Cases. The reviewer’s memo remains open until all issues have been resolved.