- 4.21.1.25 Level of Infractions
- 4.21.1.26 Appeals Process
- 4.21.1.27 Formal Appeal
- 4.21.1.28 Master Log of Cases
- 4.21.1.29 Master Log of Requests for EFIN Suspensions
- 4.21.1.30 EMC's Responsibilities
- 4.21.1.31 Employee User Portal (EUP)
- 4.21.1.32 Visits to VITA and TCE Locations
- Exhibit 4.21.1-1 Monitoring Visit - Non Compliance Diagram
- Exhibit 4.21.1-2 Sample Letter - Warning
- Exhibit 4.21.1-3 Sample Letter - W-2 Pay Stub Warning Letter
- Exhibit 4.21.1-4 Sample Letter - Written Reprimand
- Exhibit 4.21.1-5 Sample Letter - Proposed Suspension
- Exhibit 4.21.1-6 Sample Letter - Suspension
- Exhibit 4.21.1-7 Samples of Appeal's Letters
- Exhibit 4.21.1-8 E-file Monitoring Visitation Checksheet
- Exhibit 4.21.1-9 File Sample Reviewed
- Exhibit 4.21.1-10 Summary of Findings
- Exhibit 4.21.1-11 E-file Monitoring Sanctions
- Exhibit 4.21.1-12 Time and Action Report
- Exhibit 4.21.1-13 EMC's Master Log of Cases
- Exhibit 4.21.1-14 EMC's Control Log for Suspensions Sent to E-help Campus
- Exhibit 4.21.1-15 IRS e-File Monitoring Referral and Follow Up
- Exhibit 4.21.1-16 Administrative Review Reversing a Sanction Letter
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If the monitoring team determines the violation(s) is serious enough to warrant "immediate suspension" or "expulsion " , the monitoring team should immediately contact the EMC. The monitoring team will discuss their recommendation with the provider during the visit. The provider should be made aware the recommendation is subject to the approval of the EMC. The EMC is responsible for the necessary actions to complete the suspension.
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The provider should be made aware of their appeal rights regarding a written reprimand, suspension or expulsion. There are two levels of appeal for suspension and expulsion of participation in IRS e-file .
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The first level of appeal is the "Administrative Review Process" . A provider that has been advised of a proposed sanction has the right to an administrative review. When the provider receives the letter proposing sanctions, the provider may submit a detailed written explanation with supporting documentation as to why the proposed sanction action should be withdrawn within thirty (30) calendar days of the date of the letter proposing sanctions from the EMC. This written response should be sent to the EMC’s office that issued the proposed sanctioning letter. A local Administrative Review Panel will review the provider’s written response and will either withdraw the proposed sanction (see Exhibit 4.21.1–16), or affirm it. The Administrative Review Panel generally consists of the EMC and the Penalty Screening Committee.
Note:
If the sanction is a written reprimand, the provider’s appeal rights end with the Administrative Review Process.
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If the Administrative Review Panel upholds the sanction (suspension or expulsion), then the provider may proceed to the second level of appeal to the Office of Appeals. The appeal must be in writing and mailed to the IRS office that issued the recommended sanctioning letter within thirty (30) calendar days of the date of the letter recommending sanctions. The provider’s written appeal must contain detailed reasons, with supporting documentation, to show why the recommended sanctioning should not be imposed.
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Failure to respond within thirty (30) days beginning with the date of either the proposed suspension letter or the recommended suspension letter irrevocably terminates the provider’s right to an administrative review or an appeal.
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A provider that receives a recommended or continued suspension or expulsion letter after the administrative review, has a right to a formal appeal.
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The appeal must be written and filed with the Area office that issued the suspension or expulsion. A letter requesting formal appeal must be submitted to the EMC within 30 days of the date of the final sanctioning letter. A provider’s written appeal must contain a detailed explanation, with supporting documentation, of why the suspension or expulsion should be reversed
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In order for the Office of Appeals to sustain a suspension, the EMC must provide full documentation of the facts used in determining that the provider violated Revenue Procedure 2007-40, Publication 3112, or Publication 1345. In situations where the provider is alleged to have had knowledge of a specific fact, the EMC should provide substantiation of the provider's purported knowledge. The territory office must provide a TPDS summary of the provider's IRS e-file Application and a copy of the initial and final suspension or expulsion letters.
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The office that issued the letter will, upon receipt of a written appeal from the provider, forward to the Office of Appeals its file, with all related materials the provider has submitted to the territory office. The case file must contain the following:
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Copy of the provider's appeal to the Office of Appeals;
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A rebuttal to the provider's appeal addressing all of the provider's assertions;
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Any assertion made by the provider which was not previously addressed by the territory office should be addressed in the rebuttal;
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Reason(s) for suspending or expelling the provider from participation (i.e., copy of warning letter, proposed suspension letter, and/or suspension letter);
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Proof that all assertions made in the letters are accurate and well documented
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Complete history or provider's previous violations and suspensions;
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Complete copy of the IRS e-file Application for the provider;
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All IDRS research used in coming to a decision should be included in the files;
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If a representative on behalf of the provider files the appeal, ensure that valid power-of-attorney ( Form 2848) has been filed, and is in the file. The Office of Appeals has determined that a protest filed by a representative without a valid power-of-attorney is not a valid protest. The word Electronic Filing should appear under the heading type of tax on the Form 2848.
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This is especially true if the provider:
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Is suspended for knowingly employing or being employed or otherwise associating with a suspended or denied provider;
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Is suspended for accepting a tax return for e-filing either directly or indirectly from a person who is not in the IRS e-file;
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Is engaged in conduct of a disreputable nature;
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Engages in unethical practices in return preparation, and the provider failed to safeguard its EFIN/ETIN.
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The case file of an appeal to the Office of Appeals must be forwarded within 15 calendar days of receipt of the providers written request for appeal. The EMC should provide the appellant with correspondence stating that their appeal is being forwarded to the Office of Appeals. Forward the case to:
Office of Appeals
Internal Revenue Service, Long Island Appeals
50 Clinton Street, 3rd Floor
Hempstead, NY 11550
Voice: (516) 539-6248, Fax: (516) 539-6220. -
Failure to appeal within 30 days from the date of the suspension or expulsion letter terminates the provider's right to an appeal.
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The Office of Appeals will send a letter to the EMC indicating the results of the formal appeal.
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If the appeal is denied, the Office of Appeals will notify the applicant and the EMC must fax a Sanctioning Request Sheet for level two infractions or level three infractions that were not immediate;
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If the appeal is granted and the provider was immediately suspended or expelled, the EMC will advise the e-help Campus to activate provider's participation in IRS e-file.
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The EMC must send the appeals report to the area office. The area EMC coordinator will forward a consolidated report to Headquarters.
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All cases that go to Appeals must be adequately tracked to insure that the Appeals outcome is properly documented and actions taken if the government's position is sustained in full or part.
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The Area EMC will keep a copy of the case file and document quarterly follow-ups with Appeals as to the case's status.
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The following information on provider cases sent to Appeals will be sent to the HQ Analyst on a quarterly basis at the end of each quarter:
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Control Number
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Firm Name and DBA
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Address
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EFIN
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SSN/PTIN/EIN
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Date Received
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Date Forwarded to Appeals
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Current Status of Case and any Actions Taken
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At the conclusion of the monitoring visit, the monitoring team should submit a complete case file to the territory or area EMC. The case file should include the following items:
Attached to the Left Inside Case Folder:
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A complete "Time and Action Report" , including:
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Monitor's name(s);
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Position Title(s);
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Time charged to the visit;
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Time charged to travel;
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Provider's name and dba;
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Provider's EFIN;
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Date of visit;
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Type of visit;
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Recommended action.
Forms and Other Documents Enclosed Inside the Case:
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Original "Summary Of Findings" ;
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signed and dated; "Daily Activity Record" ;
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Copy of Appointment Letter (if applicable);
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"IRS e-file Monitoring Visit Checksheet " ;
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Any other work papers used to determine compliance;
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E-file application Information;
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IDRS research data or other internal compliance reports used in supplementing this effort.
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Once the provider visit is completed, the monitor should review the case file and ensure all necessary items are fully documented and assembled correctly. The monitor should close the case immediately to the EMC via Form 3210, Routing Transmittal. The EMC must be made aware of the results of the visit as soon as possible. Notify the EMC immediately if a delay in returning the case file is expected.
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To ascertain the number of e-file monitoring receipts/dispositions such as planned/actual visits, referrals to CI and other actions during the calendar year, the following procedures will be used:
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EMCs will use Form 3210, Document Transmittal, for all Provider/Preparer Packages sent to CI and/or Lead Development Center in order to maintain a paper trail at the PSP level for the disposition of these cases. Also Form 3210 will be used for all Provider/Preparer Packages sent or moved out from the local PSP to any other individual or function. This may entail creating a dummy file folder with just the parts 3 (Acknowledgement copy) and 4 (To be retained by the originator) of Form 3210 with a copy of the case contact sheet, a copy of the "IRS e-file Monitoring Visit Checksheet" and a copy of the "Summary of Findings " .
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EMCs will maintain a "Master Log of Monitoring Cases" for all provider/preparer packages of random, targeted, referrals of follow-up visits whether the visits were completed or not. See Exhibit 4.21.1–13, EMC's Master Log of Cases. This information will assist you in the calendar year-end reconciliation of area e-file visits. This year-end reconciliation will be forwarded to the HQ Program Analyst to ascertain a final count for the year.
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The log will contain, at a minimum the following information:
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Control number, firm name, dba, EFIN, address, type of visit, IRS team member(s), received date, closed date, and disposition of case.
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EMCs will maintain a "Master Log for Requests for EFIN Suspensions" for all faxes sent to the e-help for EFIN suspensions. See Exhibit 4.21.1–14,EMC's Control Log for Suspensions Sent to e-help Campus. EMCs will document all follow-up contacts needed with the e-help to ensure that the suspension actually occurred as requested EMCs will check the e-file application on TPDS and put an updated print in the provider’s case file.
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The EMC is responsible for coordinating all field aspects of the monitoring of the e-file providers’ operations. Annually, SBSE HQ in conjunction with ETA will establish the number of the total visits required. This number is usually a percentage of the total number of active e-file providers in the database for the territory. Prior to the completion of the monitoring visits, the EMC will:
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Train the monitoring teams;
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Receive and document any referrals;
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Prepare and issue the case files;
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Review any subsequent actions recommended by the monitoring teams;
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Provide reports to HQ Analyst as required;
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Prepare and keep accurate logs;
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Maintain closed case files in accordance with retention requirements.
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Subsequent actions required by the EMC after the monitoring visits are completed may include:
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Monitoring and tracking the cases through completion;
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Issuing proposed suspension and recommended suspension letters;
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Participating on the Administrative Review Panel;
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Preparing the rebuttal documentation to present to the Office of Appeals;
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Preparing, updating and submitting reports to the National Office Program Analyst;
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Contacting e-help Campus, Submission Processing Center to input Status 8 code for immediate suspension or expulsion;
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Follow up on suspensions and expulsions to ensure e-help Campus completed requested actions;
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Tracking cases through the formal Appeals process and ensure appropriate actions are taken;
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Assigning follow-up visits as necessary.
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The majority of the time devoted to coordinating the program will range from October through the end of the filing season in April, but there will be some occasional referrals, quarterly reports, and case tracking after the filing season is complete.
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The EMC will evaluate the geographic locations of the staffing personnel in the area to determine the number of participants to monitor providers. Travel time may be a consideration in the determination of the number of monitors. The EMC should consult the historical files for the number of monitors that participated in prior years. The EMC will schedule, arrange and provide training to the participating monitors. The training should be completed by January 1 to enable the monitors to be available to conduct visits at the start of the filing season.
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The EMC will receive referrals through various sources, such as, the SBSE Headquarters, other practitioners, taxpayers, Criminal Investigation, or internally from operating divisions. All "valid" referrals require a mandatory visit by the monitoring team. The referral suggests non-compliance and these visits should be unannounced. The EMC will use a control system and HQ provided control logs to ensure the visits are timely completed and accounted for all types of visits.
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A follow-up visit will usually be performed when a written warning or written reprimand has been issued to the e-file provider to verify the corrective action was taken. Prior to scheduling a follow-up visit, the EMC should consider the following:
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prior violations
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severity of violations
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The EMC will determine if the follow-up visit should be completed in the current filing season or the subsequent filing season and update the control log for the future action. The EMC will timely reassign the case file to a monitor to conduct the follow-up visit. The monitor should review the noted infractions, ensure the provider is in compliance and make any necessary recommendations to the EMC.
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To select Targeted visits, the EMC must gather information needed to develop a list indicating provider compliance issues may be present in a particular provider's practice.
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For all Targeted visits the established risk-based selection criteria must be followed when selecting providers for a monitoring visit.
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The EMC uses the data base to select random visit based upon non-discriminatory sampling of active providers.
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When a Referral is received or a random visit scheduled, research is needed to identify all potential e-file issues that need to be addressed by the monitoring team. This research may also alert the team to potential problems that could warrant a referral to another function.
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If a Referral was received on the provider, the Referral and any documentation provided by the Referral source should be used as the starting point for the case.
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The following research should be done to develop the case file:
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Criminal Investigation to verify there is not a current investigation;
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SPEC Tax Specialist;
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Historic e-file case files for any historic data;
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Return Preparer Coordinator.
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Research TPDS for:
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Current copy of e-file application;
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Historical Comments on past visits and activity related to the EFIN;
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Other EFINs that may be related i.e. same owners, responsible officials, etc.
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Research IDRS for:
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RPVUE for current and prior year will show percentage of refund returns and EIC returns;
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IMFOLI and/or BMFOLI on controlling SSN or EIN. Verify filing of income and payroll tax returns;
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RTVUE or BRTVUE – Is income reported from return preparation/transmission, and is it consistent with the number of returns prepared/transmitted based on fees as reported during the interview?
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Once the case file is assembled, the EMC should prepare Form 3210, and send to the appropriate monitor(s).
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When the monitors conclude the visits, the monitors will send the completed case back to the EMC for processing along with any recommendations for subsequent actions. The EMC will update the activity record with all actions taken and will update the spreadsheet. The spreadsheet is addressed in the Coordinator’s Reports section.
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Maintain all documents in the EMC’s e-file provider records.
Note:
All files should currently be in the possession of the EMC. These files should be disposed of in compliance with the Records Disposition Handbook, IRM 1.15.23, Exhibit 1.15.23-1.
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EMCs are responsible for preparing reports periodically throughout the year using format and instructions issued by SBSE Headquarters. These reports are subject to change by the SBSE HQ Program Analyst. Reports generally include the following (not all inclusive):
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number of W-2 referrals received internally and externally;
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number of referrals received internally and externally;
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number of phone calls made to the providers;
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number of visits performed;
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number of written warnings issued;
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number of written reprimands issued;
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number of proposed suspensions;
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number of immediate suspensions;
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number of expulsions
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number of referrals to CI.
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The "Employee User Portal" is the internal IRS portal that allows employees to access IRS data and systems, such as tax administration processing systems, financial information systems, and other data and applications, including mission critical applications. Registration and authentication are required for access to sensitive and mission critical applications, and all user interactions with those systems are encrypted from workstation to portal across the IRS internal network. The EUP also allows IRS employee users with LAN accounts (Windows Network Login) to access Intranet sites, selected applications, non-sensitive data, and selected sensitive processing where network encryption and modernization logon are not required (e.g., employee access to selected elements of their own personnel data). IRS network authentication is required for access to any secure materials or services, and is required in order to access registration and authentication. IRS employees access internal IRS applications through a portal accessible only from the IRS Intranet. The EUP authenticates internal IRS users and provides role-based access control to modernized applications. All Web sites dealing with sensitive tax, identification, or financial data will be accessed via the EUP. At this time, modernized applications using the EUP for access include e-Services, Modernized e-file and Integrated Financial System (IFS). The database will be updated weekly throughout the year. Access to the website requires completion of Form 5081, Automated Information System (AIS) User Registration/Change Request.
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The e-file application database contains the following information:
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Complete IRS e-file Application information for each EFIN or ETIN.
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History of warnings/reprimands/suspensions and the reason codes.
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Historical information on returns prepared/transmitted for each EFIN.
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Current year filing statistics including:
Total returns transmitted
Total returns accepted
Percentage of transmissions rejected
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The database may be searched by the following parameters:
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EFIN/ETIN
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SSN/EIN
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DBA
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Street address
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City
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Zip code
Note:
A specific report has been designed for the EMC’s that will contain all active ERO’s. This report may be manipulated for use in reports or custom research projects.
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The EMCs should contact the respective SPEC Territory Office prior to visiting IRS sponsored VITA and TCE locations. SPEC is visiting many VITA and TCE locations and conducting Quality Reviews. Consideration must be given to each situation to determine if an e-file Monitoring visit is appropriate. Duplicate visits by SBSE and SPEC may not be necessary. Also, IRS does not want to give the wrong impression to volunteers. In some cases SPEC personnel may want to accompany you.