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Part 7. Rulings and Agreements

Chapter 21. Exempt Organizations Automated Processing Procedures

Section 6. Inventory Control Subsystem

7.21.6  Inventory Control Subsystem

7.21.6.1  (01-01-2003)
Overview

  1. The EDS inventory control subsystem (ICS) tracks exempt organization determination letter applications from transcription through closing.

    1. ICS replaces the EP/EO Application Control System (EACS) as the inventory control system for determination letter requests.

    2. EACS continues to exist in the processing centers but is now referred to as the Masterfile Pipeline System (MPS).

    3. MPS functions as the link between EDS and the Exempt Organizations Business Master File (EO/BMF) in Martinsburg, West Virginia.

  2. An entity is electronically transferred to the master file for each case closed on ICS with closing codes 01, 02, 04, 06, 08, 11 and 12. EO entities are transferred to EO/BMF.

    1. The EO closing establishes either a new entity on EO/BMF (Transaction Code 000); or

    2. Updates the existing entity (Transaction Code 016) if the applicant’s EIN is included on the National Account Profile (NAP).

  3. Use IDRS terminals to access the master files for research and to update or correct unrestricted fields on the master file, when necessary.

  4. Access to ICS is available to each employee (whether clerical technical or managerial) based on the permissions set (profile) for that employee.

  5. The Transmittal Sheet (Form 8327), may be printed after the case has been transcribed. This Transmittal Sheet has a case chronology section. The Transmittal Sheet may be printed multiple times and, although not necessary or recommended, the duplicate copy of this document can be folded and used as a control card. The use of this option is not required.

  6. Management information reports (MIRs) previously generated by Detroit Computing Center will continue to be produced (with modifications) by that office based on data transmitted from EDS through the service centers. Through future enhancements, these reports will be produced locally.

    1. MIRs previously generated by the processing centers and newly developed MIRs are now generated in the area offices from FDS inventory control.

    2. In addition, area offices are able to develop local reports (ace) or to generate local reports by executing structured query language (SQL) queries. MIRs are discussed, in detail, in Chapter 9.

7.21.6.2  (01-01-2003)
Status/Action Codes

  1. Update the status/action codes each time the case is moved from one location, process, or specialist. The status/action code for tracking EO cases are as follow:

    1. 31 — (In Quality Assurance) This status is automatically generated on EDS for cases selected for sample, mandatory, or manager review.

    2. 32 — (Returned on Review Memo from Quality Assurance) This code will be used by Quality Assurance to update the record from Code 31 before a case file is returned to the specialist with a Reviewer’s Memorandum for additional consideration.

    3. 33 — (Returned from Quality Assurance) This code will be used by Quality Assurance to update the record of a case that is being returned to the group without a Reviewer’s Memorandum.

    4. 34 — (In Area Counsel for Approval) This code will be used by Quality Assurance to update the record of any case that must be sent to Area Counsel for Approval before the letter is issued and the case closed. Cases included in this category are favorable letter prepared based on Tax Court findings and final adverse letter prepared based on Technical Advice.

    5. 35 — (30-Day Letter Mailed by Quality Assurance) This code will be used by Quality Assurance to update the record when the proposed adverse letter is mailed.

    6. 37 — (Suspense in the Group) This code will be issued by the specialist or group clerk to update the record of any case placed in suspense at the group level.

    7. 38 — (Suspense in Quality Assurance) This code will be used by Quality Assurance to update the record of any case placed in suspense at the Quality Assurance level.

    8. 39 — (Suspense in Technical Screening) This code will be used to update the record of any case placed in suspense at the technical screening level.

    9. 40 — (Proposed Adverse Determination) This code will be used by the specialist to update the case record when a proposed adverse determination letter is prepared and ready for managerial review. For all cases except 501(c)(3) cases, the proposed adverse letter is mailed in the group and the case is placed in the Group 30-Day Suspense file. Section 501(c)(3) cases are automatically selected for mandatory review. The specialist must also enter all closing data, except the 02 or 08 Closing Code, before releasing the case for managerial approval. The Closing Code 02 or 08 will be entered by Quality Assurance, when appropriate.

    10. 41 — (Proposed Technical Advice) This code will be used by the specialist to update the case record when technical advice request is prepared and ready for managerial review, approval and transmission to Quality Assurance

    11. 50 — (Area Office Receipt) This code is automatically generated by ICS when a case is entered on DTS.

    12. 51 — (Awaiting Assignment After Technical Screening) This code is used to update the record of cases identified for assignment by technical screeners.

    13. 52 — (Case Assignment) This code is used to update the case record when the case is assigned to a specialist or reviewer.

    14. 53 — (Returned to Specialist by Manager) The case record is updated with this code by the manager or group clerk when a case is to be returned to the specialist.

    15. 54 — (Transferred to Appeals) Quality Assurance will update the case record with this code before transferring a case to Appeals.

    16. 55 — (Awaiting Closing Approval) This code removes the case from the specialist’s inventory and places at the managerial level. It is generated automatically by ICS when the specialist updates the case record with any closing code.

    17. 56 — (Technical Advice Request-Suspense) Quality Assurance will update the case record with this code when the technical advice request is ready to be mailed to the EO Technical (Code 41 must be previously entered by specialist.)

    18. 58 — (Workload Transfer) This code is used to update the case record for cases transferred to another area office or EO Technical for development.

    19. 60 — (Open in Technical Screening) This code is used when the case is initially received in Centralized Files in EO Determination Processing. Update to status 60 indicates that the case is available for assignment to a technical screener. No specialist number is assigned.

    20. 62— (Assigned in Technical Screening) This code is used when the case is assigned to a technical screener. A specialist number always accompanies this status.

    21. 75 — (Unassigned Inventory) This code is used when a case is received by a specialist group, but has not yet been assigned to a specialist. The code is primarily used by area office groups, but is also used in limited situations by groups in Cincinnati.

  2. The following status codes will automatically update to status 55 when entered:

    1. 40 (Proposed Adverse Determination

    2. 41 (Proposed Technical Advice)

    3. 01 (Favorable Determination)

    4. 02 (Final Adverse Determination)

    5. 03 (Returned Incomplete)

    6. 04 (Withdrawn by Taxpayer)

    7. 06 (Closed on Merit)

    8. 08 (Refusal to Rule)

    9. 11 (Failure to Establish)

    10. 12 (Other Closing)

    11. 30 (Correction Disposal)

  3. Status Code 75 is used for unassigned inventory.

    1. Code 75 is made available primarily for area offices who receive determination cases shipped from Cincinnati. The cases shipped in Status 58, are updated to Status 75 within one day of receipt.

    2. To facilitate research during periods of high inventory, the area office should consider using code 75 for cases that have been technically screened but not closed on merit or assigned to a specialist.

  4. Ideally, all cases that are not closed on merit should be assigned to a specialist. This may not be practical or possible during periods of high inventory.

    1. Case assignment requires the entry of a specialist number; therefore, if the area offices prefers to keep unassigned inventory at the group level rather than at the technical screening level as discussed in (2), above, a "dummy" specialist number can be established for each group and used for this purpose.

7.21.6.3  (01-01-2003)
Case Tracking

  1. Cases transcribed in DTS are automatically placed in status 50 (area office receipt). Cases, unless specifically excluded, are updated to status 60 (Open in Technical Screening) when received in Cincinnati. Cases not eligible for technical screening should be assigned to a specialist.

    1. To assign several cases access the Multiple Assignment Screen to update status.

    2. Cases may be individually updated through the Query/Update Master File Screen.

    3. All other cases are physically transported to the technical screening area and updated to status 60.

  2. To produce meaningful determination cycle tables on ICS, it is important to update ICS when the case is physically removed from the technical screening area.

    1. Cases in technical screening are assigned in status 62 and a specialist number.

    2. Cases that are returned to unassigned inventory are updated to status 51 and the Centralized Files specialist number.

    3. Cases shipped to area offices will be held in status 75 and the group unassigned inventory specialist number until assigned to a specialist.

  3. Cases meeting the conditions for merit closure can be updated for closing.

    1. ICS will prevent cases from closing before the expiration of the 30-day hold period required for user fee purposes.

    2. The user fee holding period must be manually controlled.

  4. The Multiple Assignment Screen can be used at the group level to assign several cases to one specialist or the cases can be individually assigned through the Update Master Record Screen.

  5. Cases placed in suspense must be updated with the appropriate suspense code.

  6. Each action and update (e.g., assigning cases, creating letters or correcting entity information) entered on EDS creates a case history record reflecting the information entered into the system and the identity of the employee who entered the information.

    1. This case history can be displayed on the Update Master Record Screen by depressing a function key.

    2. The history record can be printed (see the Exempt Organizations EDS User Manual for printing instruction).


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