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Part 4. Examining Process

Chapter 19. Liability Determination

Section 23. FUTA Control

4.19.23  FUTA Control

4.19.23.1  (04-02-2008)
Taxpayer Advocate Service

  1. Even though the IRS strives to improve its systems and provide better service, some taxpayers still have difficulty in getting solutions to their problems or appropriate, timely responses to their inquiries. The purpose of all Taxpayer Advocate Service (TAS) is to give taxpayers someone to speak for them within the IRS. Information on the new TAS Case Acceptance Criteria and how and when to refer a taxpayer to TAS is available in IRM 13.1.7. The TAS toll-free case intake line is 1–877–777–4778 or TTY/TDD 1–800–829–4059. Service Level Agreements between TAS and the Operating Divisions are available at the TAS web site.

4.19.23.2  (04-02-2008)
Clerical Duties Overview

  1. The Federal Unemployment Tax Act (FUTA) provides for cooperation between state and federal governments in the establishment and administration of unemployment insurance.

  2. The success of the FUTA Operation depends directly on the work performed by the clerical staff. FUTA clerks are called upon to multi-task in order for the FUTA units to function. They are a vital element in successfully achieving service wide program goals.

  3. Each clerk performs assigned tasks and on occasion will be directed to other phases of similar but not familiar activities. For that reason cross training is essential. FUTA units may not be identical, but the clerical support activity is uniform in nature. This clerical section has been written as an indication and guide regarding most of the common duties and assignments of a clerk. It is not all-inclusive.

  4. The FUTA Case Processing (FCP) system is a computer application that houses the FUTA programs (inventory, correspondence, reporting, updating and document preparation). FUTA clerks will update FCP in the FUTA process.

  5. The following tridocs outline specific tasks to be performed by the clerical staff.

4.19.23.3  (04-02-2008)
FUTA Correspondence

  1. The bulk of FUTA receipts will be responses to:

    1. 4010C - "FUTA Certification - Proposed Increase to FUTA Tax."

    2. 4011C - "FUTA Certification - Proposed Decrease to FUTA Tax."

      Note:

      You may also receive the Spanish versions of either letter.:
      4010SP - "FUTA Certification - Proposed Increase to FUTA Tax - Spanish Version."
      4011SP - "FUTA Certification - Proposed Decrease to FUTA Tax - Spanish Version ."

  2. In addition, Taxpayers may also respond to 380C - "State Certification Tax Adjustment Explained: Form 940C" ,adjustment notices, notices of intent to levy, or balance due notices. Further research may be needed to identify and process these cases.

  3. Correspondence may be received by mail, fax and/or referrals.

  4. FUTA cases can be defined as Reply, Late Reply, or Prior Late reply.

    1. A reply is any case without a date on FCP.

    2. A Late Reply is any case that has a closing date on FCP.

    3. A Prior Late Reply is any case no longer on FCP.

4.19.23.3.1  (04-02-2008)
Processing Incoming Receipts

  1. Upon receipts of all correspondence:

    1. Stamp correspondence with the date received in the FUTA area.

    2. Determine if the correspondence is in response to a FUTA discrepancy.

      Example:

      4010C or 4011C. See http://serp.enterprise.irs.gov/databases/forms-ltrs-pubs.dr/crxltrs.dr/c.dr/4010c.htm or http://serp.enterprise.irs.gov/databases/forms-ltrs-pubs.dr/crxltrs.dr/c.dr/4011c.htm

      .

4.19.23.3.1.1  (04-02-2008)
4010C/4011C and Miscellaneous Controlling Procedures

  1. All receipts must be controlled by the later of 14 days from the earliest IRS received date or 3 business days from receipt into the department.

    1. On FCP, click on "EDIT."

    2. Choose "Reply/Undeliverables Rcvd."

    3. Click "Reply" .

    4. Enter earliest IRS received date.

    5. Enter EIN and Tax Period.

    6. Click "QUERY."

    When you are prompted .... Then ...
    "Update the reply date on this 4010C/4011C issued"

    1. click "OK."

    2. choose Cancel when prompted to add a case to a batch.

    3. keep cases sorted by program and received date in groups of no more than 20.

    4. See IRM 4.19.23.3.3.1 Batching and Controlling Replies.
    No matching correspondence records are found....
    AND
    you have double checked the EIN and the tax period for accuracy and it is correct

    1. you have an additional reply which needs to be associated with the existing case file.

    The "case is already closed in FCP"

    1. click "OK" to add to the Late Reply Table.

    2. keep cases sorted by program and received date in groups of no more than 20.

    3. See IRM 4.19.23.3.3.2 Building and Controlling Late Replies.
    The "case does not exist in FCP"

    1. additional IDRS research is required to determine if this is a Late Reply case belonging to your site.

    2. and it is determined it belongs to your site, add to the Late Reply Table.

    3. keep cases sorted by program and received date in groups of no more than 20.

    4. and it is determined the case Does Not belong to your site, route the case to the appropriate site http://wc.web.irs.gov/CAWR-SSA/Address%20and%20mail%20stop.htm .

    `The case belongs to a different site
    AND
    the correspondence is a Reply

    1. click "OK" to input the reply date on FCP.

    2. route the case to the appropriate site http://wc.web.irs.gov/CAWR-SSA/Address%20and%20mail%20stop.htm .

    `The case belongs to a different site
    AND
    the correspondence is a Late Reply

    1. click Cancel when prompted to add to the late reply table.

    2. route the case to the appropriate site http:wc.web.irs.gov/CAWR-SSA/Address%20and%20mail%20stop.htm .

  2. For cases that are not on FCP, See IRM 4.19.23.3.2.

4.19.23.3.2  (04-02-2008)
Researching on IDRS

  1. Research to determine if the correspondence is in response to a FUTA case by following the steps below:

    1. Research CC TXMOD on MFT 10 for a TC 290/291 adjustment with blocking series 50 or 51 on the Form 940C.

    2. When the taxpayer responds with the SSN used for their Schedule H, research the second page of CC IMFOLR to obtain the X-REF TIN/EIN. This EIN will be used to access the case on FCP. If there is a TC290/291 adjustment on MFT 30 with block series 05 this is a Late Reply or Prior Late Reply.

  2. When it is determined the case is a FUTA case check the first two digits of the DLN and see http://serp.enterprise.irs.gov/databases/irm.dr/current/6209.dr/6209ch04.4.htm to route to the appropriate campus. When the case belongs to your campus, See IRM 4.19.23.3.3"Controlling on IDRS."

4.19.23.3.3  (04-02-2008)
Controlling on IDRS

  1. All replies and late replies must be controlled accurately and timely. Efficient inventory management is essential to meeting your program objectives.

  2. Clerical management must set up and maintain an Inventory Management process to ensure:

    1. A batch consists of no more than 20 cases of the same program and received date.

    2. Each batch will be recorded and tracked utilizing a separate log for each program.

    3. Each batch must be assigned to a tax examiner in received date order.

    4. Each batch number is built according to the program type as outlined in
      See IRM 4.19.23.3.3.1, See IRM 4.19.23.3.3.2. and See IRM 4.19.23.3.3.3.

    5. Designate specific IDRS numbers to maintain your reply, late reply and prior late reply inventory .

4.19.23.3.3.1  (04-02-2008)
Batching and Controlling Replies

  1. Once FCP updates during the overnight process, you can continue to the batching stage.

  2. Issue a 2645C http://serp.enterprise.irs.gov/databases/forms-itrs-pubs.dr/crxltrs.dr/c.dr/2645c.htm interim letter using paragraphs A,B,G,U and c with a time frame of 60 days. Interim letters must be issued within 30 days of the IRS Received date to adhere to Action 61 guidelines.

    Note:

    Management will monitor the CCA listing for any cases assigned to the staging area that are not closed within 60 days and request that a 2644C http://serp.enterprise.irs.gov/databases/forms-ltrs-pubs.dr/crxltrs.dr/c.dr/2644c.htm "Second Interim Response" be issued.

  3. FUTA batches will be numbered as follows:

    Tax year Program Sequence Number
    AA BBBB CCCC

    • AA= the last two digits of the tax year of the cases

    • BBBB= Program type. FUTA Replies will be notated as FUTA .

    • CCCC= Next Sequential Number available in log.

      Example:

      06FUTA0001= first batch created for FUTA Replies for 2006 cases.

  4. Retrieve cases already previously sorted (no more than 20 cases), of the same program and IRS received date and assign the next available batch number from the appropriate log book.

  5. Follow procedures below to update IDRS control.

    1. Access TXMOD

    2. Find C# control

    3. Access CC ACTON

    4. Assign the batch to the appropriate Status "A" control labeled TPCI and reassign it to the number designated for FUTA Replies.

    Example:

    CXX,06FUTA0001. The "XX " will stand for the "C#" and will overlay the existing FUTA control number.

  6. Create a cover sheet listing each EIN/TIN of the batch, IRS Received Date, Batch Number. See Exhibit 4.19.23-1for a sample cover sheet. Place cover sheet on top of the batch.

  7. File completed batch in inventory staging area separated by program in batch number order.

4.19.23.3.3.2  (04-02-2008)
Batching and Controlling Late Replies

  1. When the late replies are sorted, you can proceed to the batching stage.

  2. Suppress all balance due notices by inputting STAUPS or inputting TC 470 with CC 90.

  3. Issue a 2645C interim letter using paragraphs A,B,G,U and c with a time frame of 60 days. Interim letters must be issued within 30 days of the IRS Received date to adhere to Action 61 guidelines.

    Note:

    Management will monitor the CCA listing for any cases assigned to the staging area that are not closed within 60 days and request that a 2644C "Second Interim Response " be issued.

  4. FUTA Late Reply batches will be numbered as follows:

    Tax Year Program/Late Reply Sequence Number
    AA BBBB CCCC

    • AA= the last two digits of the tax year of the cases

    • BBBB= Program type. FUTA Late Replies will be notated as FULR.

    • CCCC= Next Sequential Number available in log.

      Example:

      06FULR0001= first batch created for FUTA Late Replies for 2006 cases.

  5. Retrieve cases already previously sorted (no more than 20 cases), of the same program and IRS received date and assign the next available batch number from the appropriate log book.

  6. Follow procedures below to create IDRS control.

    1. Access TXMOD

    2. Access CC ACTON

    3. Create a new "A" Status control labeled TPCI and reassign it to the number designated for the program you are working.

      Example:

      C#,06FULR0001,A,TPCI
      IDRS Unit # and TE#,Rec'd Date.

  7. Create a cover sheet listing each EIN/TIN of the batch, IRS Received Date, Batch Number. See Exhibit 4.19.23-1 for a sample cover sheet. Place cover sheet on top of the batch.

  8. File completed batch in inventory staging area separated by program in batch number order.

4.19.23.3.3.3  (04-02-2008)
Batching and Controlling Prior Late Replies

  1. When prior late replies are sorted, you can proceed to the batching stage.

  2. Suppress all balance due notices by inputting STAUPS or inputting TC 470 with CC 90.

  3. Issue a 2645C using paragraphs A,B,G,U and c with a time frame of 60 days. Interim letters must be issued within 30 days of the IRS Received date to adhere to Action 61 guidelines.

    Note:

    Management will monitor the CCA listing for any cases assigned to the staging area that are not closed within 60 days and request that a 2644C "Second Interim Response" be issued.

  4. FUTA Prior Late Reply batches will be numbered as follows:

    Program/Prior Late Reply Sequence Number
    BBBB CCCC

    • AA= is not applicable due to multiple tax years being combined in one batch

    • BBBB= Program type. FUTA Prior Late Replies will be notated as FUPR.

    • CCCC= Sequential Number available in log.

      Example:

      FUPR0001= first batch created for FUTA Prior Late Replies.

  5. Retrieve cases already previously sorted (no more than 20 cases), of the same program and IRS received date and assign the next available batch number from the appropriate log book.

  6. Follow procedures below to create IDRS control.

    1. Access TXMOD

    2. Access CC ACTON

    3. Create a new "A" Status control labeled TPCI and reassign it to the number designated for the program you are working.

    Example:

    C#,FUPR0001,A,TPCI
    IDRS Unit # and TE#,Rec'd Date

  7. Create a cover sheet listing each EIN/TIN of the batch, IRS Received Date, Batch Number. See Exhibit 4.19.23-1 for a sample cover sheet. Place cover sheet on top of the batch.

  8. File completed batch in inventory staging area separated by program in batch number order.

4.19.23.3.3.4  (04-02-2008)
Assigning Work to Tax Examiners

  1. The procedures below must be followed when assigning work to a Tax Examiner:

    1. Pull the batch with the earliest received date from the staging area.

    2. Access CC TXMOD on IDRS and using CC Acton, reassign the cases in the batch to the Tax Examiner's IDRS number.

      Example:

      Batch 06FUTA0001 is assigned to 0123412345. To reassign the cases to 0123455555 enter:
      CXX
      0123455555

      The "XX" represents the appropriate Control number on IDRS to be reassigned.

    Note:

    When assigning a case directly to a Tax Examiner after the sorting phase assign the case on IDRS directly to the specific T/E number.

4.19.23.4  (04-02-2008)
Loose State Certifications

  1. At times, States will send loose State Certifications (Form 940C) for cases not yet in the FCP database. When these are received the information should be input to the FCP 940–C file.

    1. On FCP click on EDIT.

    2. Select FUTA Form 940C from the drop down menu.

    3. Click on the Search String box and type in the EIN in an "XX-XXXXXXX" format in the box.

    4. Click the down arrow next to the Search Field Box and change it to EIN and click theFind button.

    5. Repeat steps 3 and 4 using information like Company Name for the search if the 940C information does not appear.

    6. Click the No button to stop the search if the 940C is not found.

    7. Click New button to enter the new 940C information.

    8. Enter the information from the 940C in the fields. A number will be assigned to that 940C. Write the number at the top of the 940C and file in the staging area using the assigned number.

    9. Click the Apply button to save the Form 940C information, then the Close button

4.19.23.5  (04-01-2008)
Undeliverables

  1. This section is to be used for all FUTA letters returned undeliverable. Undeliverable mail received from the mail room can be identified one of two ways:

    1. Unopened original FUTA correspondence.

    2. An opened original FUTA correspondence with the envelope affixed to the back.

  2. All undeliverable mail is to be reviewed within 7 calender days of the IRS received date. This action will prevent the FCP System from closing the case as a "No Reply" before a new letter can be issued with the new address.

  3. Check the envelope for a yellow Post Office (P.O.) forwarding sticker.

  4. When there is no P.O. sticker research IDRS Command codes ENMOD, INOLES, and NAMEE for a new/better address.

    Note:

    Use the Research Address IDAP when available.

  5. If CC ENMOD shows an SSN that is responsible for the entity, use CC INOLES for the SSN to research for a new/better address. If CC ENMOD shows a Mr. and Mrs. listed, address the notice to only the taxpayer that owns the SSN found on ENMOD for disclosure purposes.

    If ... Then ...
    A new address is found
    AND
    It is within 30 days of the mail out date     		the clerks will re-mail all information, including the original envelope to the new/better address.
    A new address is found
    AND
    it is after 30 days of the mail out date

    1. print the IDRS CC screen containing the new/better address.

    2. attach the print to the Undeliverable mail.

    3. input Undeliverable date onto FCP and batch the Undeliverable to a T/E.

    A new address is NOT found input Undeliverable date and batch for a T/E to work.

4.19.23.6  (04-01-2008)
Routing Documents

  1. Clerical function is responsible for all outgoing mail. This mail may consist of internal mail, misdirected mail, or external mail.

  2. Internal mail is routed to other areas using a Form 3210 " Document Transmittal" . The receiving area will acknowledge the receipt of the cases by sending a signed copy of the Form 3210 back to the originating area. These forms must be maintained in a log in the FUTA unit.

  3. At times misdirected mail may be received. This is mail not related to the CAWR or FUTA programs. This mail will be routed back to the mail room for proper routing.

  4. When the Tax Examiners complete their daily work it is filed in brown folders. Follow local procedures for routing these folders to the Files Function.

4.19.23.7  (04-02-2008)
Discovered Remittance

  1. Cash and non-cash remittances found outside of the Receipt and Control secured/restricted area are "discovered remittances."

  2. When a Remittance is discovered you must:

    1. Immediately notify your manager/lead.

    2. Access CC INOLES to verify the name.

    3. At the bottom of the CC INOLES screen type the MFT, YEAR/Quarter, 670/570, Rec'd date, and money amount.

    4. Print three copies of the CC INOLES screen. One attached to the case and two attached to the Remittance.

    5. Complete a Form 4287 "Record of Discovered Remittances. "

    6. Hand carry the remittance, Form 4287 and INOLES prints to your Manager.

4.19.23.8  (04-02-2008)
Retrieving Phone Messages

  1. At times taxpayers or internal IRS areas may call to inquire about a FUTA issue. The clerical team will be responsible for retrieving and recording the information left on voice mail.

  2. On a telephone message slip record the following information:

    1. Date and time of call

    2. Name of individual calling and company name

    3. Phone number and extension

    4. Best time to reach caller

    5. EIN and tax period

    6. A brief explanation of issue

    7. The name of the clerk retrieving the message

  3. When the case has an open "A" control on IDRS place the message slip in the Tax Examiner's designated mail box.

  4. When the case is not controlled give the message slip to your lead for further research.

Exhibit 4.19.23-1  (04-02-2008)
Batch Control Sheet

Batching Cover Sheet
 
Program_____________
IRS Received Date______________
Batch #_________
TE #_________
 
1 EIN#  
2 EIN#  
3 EIN#  
4 EIN#  
5 EIN#  
6 EIN#  
7 EIN#  
8 EIN#  
9 EIN#  
10 EIN#  
11 EIN#  
12 EIN#  
13 EIN#  
14 EIN#  
15 EIN#  
16 EIN#  
17 EIN#  
18 EIN#  
19 EIN#  
20 EIN#  

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