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Part 4. Examining Process

Chapter 81. Tax Exempt Bonds (TEB)

Section 10. Quality Review

4.81.10  Quality Review

4.81.10.1  (11-01-2008)
TEB Quality Measurement Program

  1. (1) The incentive for developing new quality standards was initiated by the enactment of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA 98) and the Service's increased awareness of the need to focus on customer service and satisfaction. Balanced Measures consists of Customer Satisfaction, Employee Satisfaction and Business Results.

  2. (2) Business Results include a Balanced Performance Measurement System which requires that organizational case quality and quantity be numerically scored. Organizational measures serve as an indicator of the progress the Service is making in achieving high-level strategic goals.

  3. (3) Tax Exempt Bonds Quality Measurement Program (TEBQMP) is a management tool used to measure case quality and identify trends. Management will use TEBQMP to:

    1. Identify improvement opportunities in case quality,

    2. Increase customer satisfaction by identifying common examination procedures needing improvement,

    3. Identify possible training and Continuing Professional Education (CPE) needs, and

    4. Increase consistency in examinations.

  4. (4) Compliance and Program Management ("CPM" ) is responsible for the administration and oversight of TEBQMP.

4.81.10.2  (11-01-2008)
Quality Review Standards

  1. Examination cases are rated for seven quality standards. For a detailed discussion of the quality standards for examination cases refer to the Tax Exempt Bonds Quality Measurement Program Student Guide.

  2. Standards can be rated either "Yes" or "No" . The desired answer to all questions is "Yes" . Each quality standard is weighted equally.

  3. The organizational score for examinations is calculated by dividing the total number of standards passed by the total number of standards rated.

    Example:

    During the fiscal year, 50 examination cases are sampled for quality review. The total number of standards rated equals 350 (50 x 7). Of the 350 standards rated, 300 standards are passed (i.e. answered "Yes" ). The organizational score would be 86% (300/350).

4.81.10.3  (11-01-2008)
Case Selection

  1. A statistically valid sample will be selected, using a random number generator. The sample size will vary each fiscal year as the workplan changes. TEBQMP Coordinator will make changes to the sample rate, as needed.

  2. The population consists of all closed cases; excluding surveyed cases.

4.81.10.4  (11-01-2008)
Reviewers

  1. Reviewers should be experienced and highly competent personnel who:

    1. Possess a comprehensive knowledge of generally accepted accounting and auditing principles or possess superior skill in interpreting and applying tax laws, regulations, and court decisions;

    2. Are knowledgeable in Service policies and procedures;

    3. Have a fair and impartial attitude;

    4. Merit the highest respect and cooperation of TEB personnel;

    5. Have demonstrated an ability to assume responsibility and take positive action when warranted;

    6. Communicate ideas and opinions clearly, tactfully, and objectively; and

    7. Apply good judgment and exercise individual initiative.

4.81.10.5  (11-01-2008)
Review Process

  1. As the case file is reviewed, reviewers will prepare a TEBQMP Examination Case Review Input Form and record the rating for each quality element and standard. When preparing the Form, reviewers will use the TEBQMP Student Guide.

  2. Reviewers will email the TEBQMP Form to the Coordinator and forward the case for disposition.

  3. The Coordinator will consolidate and analyze the data and provide reports to management.

4.81.10.6  (11-01-2008)
Reports

  1. Quarterly reports will provide an indicator of the extent to which completed work meets quality standards. These reports will not provide evaluative information for individual employees. The reports will include:

    1. The percentage of "Yes" answers for each standard and element, as well as the organizational score

    2. A summary of the narrative comments entered on the checksheets explaining the "No" answers, and

    3. Suggestions for improvement

  2. The Quarterly reports will also provide a trend analysis comparing:

    1. The results for the current quarter,

    2. The results for the fiscal year to date, and

    3. The results for the prior fiscal year.

4.81.10.7  (11-01-2008)
Tools to Ensure Data Reliability

  1. Each selected case will be reviewed by two reviewers to enhance consistency in applying the quality standards. The two reviewers independently review the same randomly selected case and prepare a checksheet. The two scores will be averaged for a final score.

4.81.10.8  (11-01-2008)
Case Return Criteria

  1. Generally quality review cases are not returned to the group for further development.

  2. Cases will be returned to the group, with the concurrence of the Manager, Field Operations, when any of the following conditions exist:

    1. There is clear evidence that an incorrect determination has been reached with regard to the exempt status of a bond, (i.e., an underdeveloped case will not be returned unless it is evident in the case file that the bond is not tax-exempt).

    2. There is a "clearly defined substantial" error based on an established Service position existing at the time of the examination. Clearly defined means the error is clearly apparent as opposed to being vague or uncertain. Substantial refers to the dollar amount of an arbitrage or rebate violation. Any proposed tax change should involve an additional amount of arbitrage or rebate of $10,000 to be considered "substantial" .

    3. There is evidence of fraud, malfeasance, collusion, concealment, or misrepresentation by the taxpayer or representative.

    4. Other circumstances exist that indicate failure to return the case would be a serious administrative omission.

  3. Prior to a case being returned for further development, a Reviewer's Memorandum will be prepared and issued to the manager, through the Manager, Field Operations under the Manager, CPM signature.


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