8.1.8 Employee Tax Compliance

Manual Transmittal

September 28, 2016

Purpose

(1) This transmits revised IRM 8.1.8, Appeals Function, Employee Tax Compliance.

Material Changes

(1) Revised IRM 8.1.8.1, Employee Tax Compliance Cases - Background, to change "the examination findings" to "Compliance’s findings" .

(2) Revised IRM 8.1.8.2, Receiving ETC Cases, to include additional information on routing cases within Appeals.

(3) Revised IRM 8.1.8.3, Working ETC Cases, for clarification.

(4) Revised IRM 8.1.8.4, Requesting Computations, to include current procedures for requesting TCS assignment.

(5) Deleted IRM 8.1.8.5, Unagreed Non-Docketed ETC Exam Cases, since the process is the same for non-ETC cases. Also, this section duplicates information in IRM 8.1.8.4, Requesting Computations. Added new IRM 8.1.8.5, Installment Agreements, applicable to IRS employees.

(6) Deleted IRM 8.1.8.6, Unagreed Non-Docketed ETC Timely CDP Cases, since the process is the same for non-ETC cases. Renumbered IRM 8.1.8.9, Closing ETC Cases, as IRM 8.1.8.6.

(7) Deleted IRM 8.1.8.7, Unagreed Non-Docketed ETC CDP Cases That Require an Equivalent Hearing, since the process is the same for non-ETC cases.

(8) Deleted IRM 8.1.8.8, Docketed ETC Cases, since the process is the same for non-ETC cases.

Effect on Other Documents

This IRM section supersedes IRM 8.1.8, dated October 17, 2014.

Audience

Appeals

Effective Date

(09-28-2016)

John V. Cardone
Director, Policy, Quality and Case Support

Employee Tax Compliance Cases - Background

  1. Employee Tax Compliance (ETC) cases involve an examination or collection activity of Internal Revenue Service (IRS) employees. When a taxpayer employee does not agree with Compliance’s findings, they have the option of exercising their right to an appeal. When working ETC cases, Appeals limits its scope to:

    1. Facts of the case

    2. Applicable law

    3. Appropriate resolution

  2. Appeals is not involved in potential disciplinary actions.

Receiving ETC Cases

  1. Compliance routes all appealed ETC cases to the Account and Processing Support (APS) in Atlanta, Georgia using a Form 3210, Documental Transmittal. For employee audits, IRM 4.2.6.4 , Closing an Employee Examination, instructs the examiner to check the "employee audit" box on Form 3198, Special Handling Notice for Examination Case Processing. Also, IRM 5.1.7.8, IRS Employee Cases, contains information for identifying IRS employees’ accounts. See routing information below for Atlanta APS:

    Internal Revenue Service
    Atlanta Appeals Office
    401 W. Peachtree St., NW
    Suite 1455, Stop 1100-D
    Atlanta, GA 30308-3539

  2. Upon receipt of the case, Atlanta APS will:

    1. Acknowledge receipt of the case by returning to Compliance a signed Form 3210

    2. Card the case on ACDS

    3. Assign the case based on the pre-approved assignment list

    4. Send an encrypted message to the Appeals Team Manager (ATM), the Appeals Technical Employee (ATE), and the designated Tax Policy & Procedure (TPP) Program Analyst notifying them of the case assignment

    5. Mail the case file directly to the ATE assigned to work the case

    Note:

    Due to the sensitive nature of these cases, they can only be assigned to Appeals employees pre-approved to work them. Access the list of designated Appeals employees from the Appeals Intranet Home Page < Exam (AO) tab < Employee Tax Compliance - Intra Appeals Routing < Employee Tax Compliance Case Routing for Appeals.

  3. The TPP Program Analyst updates the case in ACDS to designate it as an employee audit case using the Special Project Update menu. Cases are generally coded as A1 to denote employee audit. Other codes may be used for special projects as needed. This code is not visible on the ACDS CASES screen.

Working ETC Cases

  1. Only designated ATEs, ATMs, and Tax Computation Specialists (TCS) are assigned these highly sensitive cases. The ATE works the ETC case following the tax law and procedural guidance to the same extent that apply to other taxpayers, based on the work stream and case type. See IRM 8.1.8.5, Installment Agreements, for information applicable to IRS employees. Priority treatment is given to the extent possible.

    Note:

    Due to the sensitive nature of these cases, Appeals employees are prohibited from identifying the case in the "Notes" section of ACDS or in any other way as an employee audit case.

  2. The ATE ensures the complete case is sent for review and approval to a designated ATM reviewer. See Note in IRM 8.1.8.2 (2) e) regarding designated employees. The ATE sends an encrypted email notifying the designated ATM reviewer that a file is being forwarded for review. In the email, include the statute on the case and any other priorities.

  3. There are designated ATM reviewers for the examination and collection work streams. The ATM will:

    1. Review and approve the case

    2. Return the approved closed case to Atlanta APS. See IRM 8.1.8.2 for routing information

    3. Input the ACAPDATE on ACDS

    Note:

    If the ATE is not a direct report to the ATM Reviewer, then the ATM Reviewer may need to send a secure email to the assigned ATM for the ACAP date to be entered.

  4. If APS assistance is needed to reverse a premature assessment for a docketed case, forward the appropriate documents to Atlanta APS to abate the premature assessment.

  5. If Compliance’s assistance is needed, follow the normal procedures that apply for a non-IRS employee case.

Requesting Computations

  1. If a computation is needed, the ATE will complete Form 3608, Request for TCS Service, in APGolf and select the designated TCS manager in the drop down list. See Note in IRM 8.1.8.2 (2) e) regarding designated employees. On Form 3608 under Priority Indications, enter "Employee Tax Case" in the "Other" field and check the box.

  2. The designated TCS manager will assign the case to an approved TCS, who will prepare the settlement computation or Notice of Deficiency, and forward them to the ATE.

Installment Agreements

  1. Per IRM 8.1.8.3, Working ETC Cases, the ATE works the ETC case following the tax law and procedural guidance to the same extent as for other taxpayers. For an installment agreement with an IRS employee, include a completed Form 2159, Payroll Deduction Agreement. See IRM 5.1.7.8 (7), IRS Employee Cases.

Closing ETC Cases

  1. The approved case will be forwarded to Atlanta APS, who will process, suspend, and/or route the case following normal procedures based on the work stream and case type. See exception in paragraph (2).

    Internal Revenue Service
    Atlanta Appeals Office
    401 W. Peachtree St., NW
    Suite 1455, Stop 1100-D
    Atlanta, GA 30308-3539

  2. For Examination-sourced cases, Atlanta APS will forward the closed case to Baltimore Technical Services at the following address:

    Internal Revenue Service
    Attn: Technical Services
    31 Hopkins Plaza
    Room 1108
    Baltimore, MD 21201