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Part 4. Examining Process

Chapter 81. Tax Exempt Bonds (TEB)

Section 2. Examination Selection

4.81.2  Examination Selection

4.81.2.1  (11-01-2008)
In General

  1. This section sets forth procedures for the TEB classification program through which examinations pertaining to tax-exempt bond transactions are selected in accordance with inventory requirements.

  2. The Tax Exempt Bonds Compliance & Program Management (" CPM" ) function is responsible for the administration and oversight of the classification program. The TEB Classification Coordinator will review the operations of the program and report to the Manager, Compliance & Program Management.

  3. The Tax Exempt Bonds Field Operations ("FO" ) function will provide assistance and support to CPM in regards to this program.

4.81.2.2  (09-01-2008)
Implementation of the Annual Workplan Compliance Activities

  1. The annual workplan provides program guidance and direction to all TEB employees with respect to TEB's fiscal year operating priorities in support of the IRS strategic goals.

  2. The annual workplan, in part, initially determines the examination inventory needs based on issues and trends identified from examinations, compliance questionnaires, voluntary resolution programs, outreach activities, and other internal or external sources.

  3. CPM will coordinate the selection and classification of returns to ensure adequate levels of inventory are maintained in CPM for future assignment to FO groups.

4.81.2.3  (11-01-2008)
Case Selection

  1. Cases selected for examination originate from the following sources:

    1. Information gathering projects and compliance initiatives;

    2. Classification of returns filed by issuers;

    3. Referrals from other Federal agencies, informants, news articles, or internal IRS sources; and

    4. Cases related to current examinations, including examinations of claims.

  2. Cases selected for examination will include:

    1. Returns;

    2. Claims for recovery of arbitrage payments;

    3. Information items and referrals; and

    4. Non-return units including, but not limited to, IRC 6700 related cases.

4.81.2.4  (11-01-2008)
Classification

  1. The Classification Coordinator is responsible for reviewing inventory needs to ensure adequate levels of inventory are available to fulfill the operating priorities in the annual workplan.

  2. In classifying returns as part of a compliance initiative, CPM will select returns for examination by:

    1. Formulating selection criteria based on the initiative in coordination with the Manager, Field Operations;

    2. Using the selection criteria to mark returns on RICS for download of return information into the TE/GE Reporting & Electronic Examination System ("TREES" ) and establishment on AIMS;

    3. Posting official statements and material event notices obtained from commercial sources, initiative examination checksheets, initiative classification forms, and other initiative documents into the Case File Documents folder of each TREES case selected for classification;

    4. Assigning classifiers, when applicable, to review information contained in each TREES case file and selecting those cases for examination based on established criteria;

    5. Verifying project codes for those cases not selected for an initiative, but selected for examination;

    6. Updating cases selected for examination to AIMS status 8 and transferring them to the TREES Unassigned Inventory Folder of FO groups upon commencement of the initiative for assignment to agents; and

    7. Surveying cases not selected for examination.

  3. In classifying returns for general program work in accordance with the annual workplan, CPM will select returns for examination by:

    1. Formulating selection criteria based on the workplan program requirements in coordination with the Manager, Field Operations;

    2. Using the selection criteria to mark returns on RICS for download of return information into TREES and establishment on AIMS;

    3. Posting official statements and material event notices obtained from commercial sources, and classification forms into the Case File Documents Folder within each TREES compliance activity established for classification;

    4. Assigning classifiers to review information contained in each TREES case file and selecting those cases for examination based on established criteria;

    5. Verifying project codes of the cases selected for examination;

    6. Updating cases selected for examination to AIMS status 8; and

    7. Surveying cases not selected for examination.

4.81.2.5  (09-01-2008)
Unassigned Inventory Management

  1. CPM will maintain within TREES adequate inventory levels for future assignment to FO groups. The Classification Coordinator will advise and recommend that the Manager, Compliance & Program Management initiate the classification of additional returns when unassigned inventory levels become insufficient to fulfill the operating priorities of the annual workplan.

  2. Quarterly, the Manager, Field Operations, will request the Coordinator to initiate transfer of cases to the TREES Unassigned Inventory Folder of FO groups to maintain prescribed unassigned inventory levels. Upon verifying the transfer request, the Coordinator will request the TEB Inventory Processing Unit to transfer the specified number of cases within TREES to the FO groups.

  3. Cases surveyed after transfer to FO groups will be closed within TREES using the appropriate closing codes. The reason for survey will be noted in the comments section of the Close To dialogue box in TREES. Upon closure, the Inventory Processing Unit will forward such comments to the Coordinator. The Coordinator will review the comments of surveyed cases to reassess selection criteria for future classification.


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