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Part 3. Submission Processing

Chapter 45. TE/GE Processing

Section 2. TE/GE Systems Review

3.45.2  TE/GE Systems Review

3.45.2.1  (01-01-2006)
Service Level Agreements (SLAs)

  1. National Service Level Agreements (SLAs) have been established between Operating Divisions. This section contains specifics regarding SLAs that pertain to activities performed by use of this IRM.

3.45.2.1.1  (01-01-2006)
Taxpayer Advocate Service (TAS) SLA

  1. The Taxpayer Advocate Service (TAS) SLA contains basic requirements for handling TAS-referred cases, and include specific actions to take on TAS referrals and specific timeframes for completing those actions.

  2. The SLA can be found at http://advocate.no.irs.gov/Library/Library.htm#Service Level Agreement and procedures can be found in IRM 13, Taxpayer Advocate Service.

3.45.2.1.1.1  (01-01-2006)
Operations Assistance Requests (OARs)

  1. TAS uses the Operation Assistance Request (OAR) process to refer cases when TAS lacks either the statutory or delegated authority to resolve a taxpayer's problem. TAS utilizes Form 12412, Operations Assistance Request to initiate the OAR process.

  2. In cases requiring an OAR, TAS will complete Form 12412 and forward the case to the Operating Division Liaison via Form 3210. The Operating Division Liaison will review the case, assign it to the appropriate area, and monitor the case through its conclusion.

  3. Every effort must be made to expedite completion of OAR cases. Timeframes for the assigned area to complete the case will be indicated on Form 12412.

    1. If resolution of a taxpayer's case cannot be completed by the requested timeframe or by a negotiated extension date, the employee will immediately notify his or her manager.

    2. The manager/employee will work with the TAS contact listed on Form 12412 to arrive at agreed upon timeframes for follow-up based on the facts and circumstances of the particular case.

    3. The manager/employee assigned the case will discuss the findings and recommendations on the final disposition of the case with the appropriate TAS contact. The TAS contact is responsible for " communicating the final decision on the case to the taxpayer however," this does not prohibit the manager/employee from also communicating that decision to the taxpayer.

    4. If the TAS contact and the manager/employee assigned the case cannot agree upon the resolution to the taxpayer's problem, the TAS employee will elevate this disagreement to the manager who will discuss it with the appropriate Operating Division manager. The manager/employee assigned the case will also elevate any disagreement to his or her manager.

  4. For more information, please refer to: IRM 13, Taxpayer Advocate Service and http://advocate.no.irs.gov/Library/Library.htm#Service Level Agreement.

3.45.2.2  (01-01-2006)
Introduction

  1. This chapter provides instructions for performing accuracy reviews on return information processed to various systems. This analysis will involve comparing the information on the return/determination as filed, line-by-line, with the information posted to the various systems listed in 3.45.2.2.1. The information gathered from the reviews will be used to evaluate the systems involved and make corrections, improvements, and enhancements where necessary. The original return will be used for comparison for the Exempt Organization (EO), and Tax Exempt Bond (TEB) reviews. The Employee Plan (EP) Forms 5500 are processed by a vendor (EFAST) for the Department of Labor. These returns will be printed from the vendors system and used for review purposes in lieu of the original return. A print will be made of the scanned original return as it was received by the vendor and a print of a facsimile of the return after processing through their system. The Political Action Committee (PAC) 527 review will be done using a photocopy of the original paper return or a list of electronically filed returns. These will be provided for you prior to the review.

  2. A random sample of the various forms will be provided for each review. The sample size will be based on the type of return being reviewed.

  3. The review will compare the information from the different sources to look for discrepancies in the posted data versus what was originally filed to determine if it is due to:

    1. An internal processing problem.

    2. Incorrect information posted on the RICS database.

    3. A problem with vendor processing for Forms 5500.

    4. A problem with the Tax Exempt Determination System (TEDS).

    5. A problem posting information to the e-forms website.

3.45.2.2.1  (01-01-2006)
Systems Involved

  1. The following is a list of the systems involved in the review:

    1. Returns Inventory Classification System (RICS).

    2. Employee Plans Master File (EPMF).

    3. Business Master File (BMF).

    4. Tax Exempt Determination System (TEDS).

    5. Digital Daily E-Forms Website.

3.45.2.2.2  (01-01-2006)
Forms Reviewed

  1. FORMS
    TEB Forms 8038, 8038-G, and 8038-T
    EO Forms 990, 990-EZ, and 990-T
    EP Forms 5500
    Political Organizations Forms 8871 and 8872
    EP and EO Determinations processed through TEDS

3.45.2.3  (01-01-2006)
RICS Review

  1. This section provides instructions for reviewing and comparing originally filed return information with posted and displayed data on the RICS system.

  2. The purpose of this review is make sure the return data being downloaded to the RICS system is accurate and complete. The RICS system is used by TE/GE to classify returns for potential audit investigation. It's also used extensively to do research and analysis within TE/GE.

  3. A random sample of returns from one of the following groups, EO Forms 990, 990EZ, 990T, TEB Forms 8038, 8038G, and 8038T, or EP Forms 5500 will be printed from the RICS system each month. This will be done according to the schedule of reviews shown in Exhibit 3.45.2-1.

  4. A list of return DLNs will print out when each sample is printed, and the original returns will be ordered from this list using the ESTAB procedures through IDRS. This procedure will differ on the EP review because the Forms 5500 are not processed by the Service. These returns will be printed from the EFAST system and provided for the review.

  5. The original return or EFAST printed return will be compared line by line to the information on the RICS printed return and the posted data on BMF/EPMF using IDRS and the BRTVU/ERTVU commands.

  6. Only transcribed data will be compared from these sources, since only data that's transcribed from the return will be posted to the BMF and displayed on the RICS printed return. The data posted to the EPMF is transmitted to IRS by the EFAST vendor after they process the returns.

3.45.2.3.1  (01-01-2006)
Printing Returns

  1. The returns used for RICS review will be printed using Web-RICS.

    1. You will access Web-RICS via Internet Explorer and select the category you wish to print, EO, EP, or TEB.

    2. Next, select the browse button on the Bulk File Request to locate the file for printing. The Bulk PDF files for each monthly review will have been created and placed on the Common all users S: drive for you to access.

    3. Once you have located and selected the file you want to print, click on the process file button. A list of all the documents in that particular file will be displayed.

    4. You will then select the Bulk Print option. This will bring up a Create a Print File Screen.

    5. Next you will select the Print Without Marking option and enter the number of forms you want in the bulk sample area. The number of forms you need will depend on the type of review you are doing for that particular month.

    6. WebRICS will create a PDF file of all the printed returns in the sample. The PDF file is then opened and printed.

3.45.2.3.2  (01-01-2006)
Ordering Returns

  1. A list of return DLN's will be created using BI Query and provided each month. This list will be used to order the original returns when doing the EO and TEB reviews. The returns will be ordered using the ESTAB procedures through IDRS.

  2. Once the original returns have been received, associate them with the RICS printed returns in preparation for the review. Returns should be ordered at least three times if they do not come in with the original ESTAB. Make a list of returns you do not receive after three attempts. (List the EIN, DLN, Type of return, and Tax Period for each return). Further research may then be done by TE/GE.

  3. If returns from any previous review are received after the review has been completed, the comparison will be done and any discrepancy found will be included on the next monthly report for that type of return.

3.45.2.3.3  (01-01-2006)
Comparing the Data

  1. The sources to be compared in the review will be:

    1. The original return or EFAST printed return which is supplied to you prior to the review.

    2. The return printed from the RICS system. Instructions for printing returns are in 3.45.2.3.1 above.

    3. The data posted to BMF or EPMF depending on the type of review utilizing IDRS. You will mainly use the BRTVU and ERTVU command codes however there will be times when other commands will be used in researching accounts.

    You will compare the data line by line - from all sources to ensure consistency.

  2. When comparing data, keep in mind that the discrepancy may result from an error made on the original return as filed. You will need to verify that the discrepancy in question is not a math error or some other Taxpayer entry that was changed or corrected during processing. Make sure you are looking at the same tax period on all sources.

  3. EP Forms 5500 are not only filed by tax period ending date, they also have a plan number. TEB Forms 8038, 8038-G and 8038-T also have a report number. A filer could have numerous plans\/reports with different due dates for which they are required to file a return. You need to verify that the return was posted to the correct plan\/report number and tax period. When you cannot locate a particular return you need to check other plan\/report numbers with similar due dates to see if the return was posted under a different plan\/report number. Returns can also post to the correct plan\/report and incorrect tax period at times. You may need to look at the entire account to try and locate a return.

  4. Check to see that the entity name and address fields from all sources match. A discrepancy in these fields could be due to a transcription error in processing or a systemic problem in transferring the data to one of the other sources.

    1. If a discrepancy is found between the original return entity information and master file, check to see when the last entity update took place. If a recent return was filed or some other account action has taken place, it could have updated the entity information. If it cannot be determined why this discrepancy occurred, list it on the report as a potential problem.

    2. In any other situation where the entity information differs between sources, list the return on the report as an error.

  5. Compare all Dollar amounts, Checkboxes, and Text entries to verify that all sources agree. A discrepancy in any of these fields could be due to a transcription error, a systemic problem with the transfer of data from one source to another, or a programming problem with the way the data is captured or displayed.

    1. Look to see if numbers were transposed, checkboxes were missed, or other transcription errors were made.

    2. Check to see if the same dollar amount appears on a nearby transcription line to see if the wrong line was transcribed during processing.

    3. Check to see if Dollars and Cents were transcribed in a Dollars only Field or if the reverse may have occurred.

  6. Whenever a discrepancy is found between the sources it should be listed on the report along with a brief description of the error. An example of the report is shown in Exhibit 3.45.2-2.

  7. Always make a print showing the discrepancy from the system involved such as BRTVU, ERTVU, ENMOD, etc. The prints will be kept with the return and included with the report.

3.45.2.3.4  (01-01-2006)
Report Preparation

  1. A report will be prepared on a monthly basis. A sample report is shown in Exhibit 3.45.2-2.

  2. The report will be done on an EXCEL spreadsheet which will be provided for you.

  3. It will be easier if the discrepancies are recorded on the report as they are found when doing the review. It would be more difficult and time consuming to keep track of the discrepancies and write the report after the review is completed.

  4. Discrepancies will be listed in the appropriate spaces by EIN and Tax Period Ending Date, the type of discrepancy such as address or incorrect amount, and the actual posted entry from each system.

  5. The completed report will be sent via E-mail to the designated TE/GE CAS Analyst. A paper copy of the report along with the review documents will be picked up by TE/GE CAS.

3.45.2.3.5  (01-01-2006)
Report Package

  1. The completed report package should include the following:

    1. All original returns or EFAST photocopies.

    2. A print of BRTVU, ERTVU, ENMOD, or any supporting documentation for each discrepancy.

    3. The RICS printed return with notations for discrepancies, if necessary.

    4. A paper copy of the EXCEL spreadsheet report showing the discrepancies found.

3.45.2.4  (01-01-2006)
527 Review

  1. This Section provides instructions for reviewing and comparing electronically submitted Forms 8871/8872 and paper filed Forms 8872.

    1. A Form 8871 is a Political Organizations Notice of Section 527 Status. This form is filed by a Tax Exempt Political Organization unless it is excepted from complying with the filing requirements, when there has been a material change in the information previously reported on Form 8871, and upon termination of the organization.

    2. A Form 8872 is a Political Organizations Report of Contributions and Expenditures. This form is filed to report the contributions and expenditures of the organization.

  2. Unless it is covered by a specific exception, a political organization must file Form 8871 to be tax-exempt. A tax-exempt political organization that does not timely file Form 8872 or that fails to include information that is required on the form, must pay an amount calculated by multiplying the amount of contributions and expenditures that are not disclosed by the highest corporate tax rate, currently 35 percent. The forms are disclosed to the public and can be viewed on the IRS Digital Daily website by anyone with access to the Internet.

  3. The purpose of this review is to ensure that filings submitted either electronically or on paper are processed and posted to the website, timely and accurately. All Forms 8871 and 8872 are processed and posted to a website accessible through the IRS Digital Daily.

  4. This review will be done on a monthly basis with a report being submitted to the 527 compliance committee contact and the 527 website technical contact.

  5. Returns must be processed and posted to the website as follows:

    1. Electronically filed Forms 8871 and 8872 must be posted to the website within 48 hours of submission.

    2. Processable paper filed Forms 8872 should be posted to the website within 5 working days of receipt.

  6. Paper filed returns should be processed using the following guidelines:

    1. Receipt & Control has two days to send the return to Imaging.

    2. Imaging has three days to image the form, send the return to be processed and post to image on the website.

3.45.2.4.1  (01-01-2006)
Electronically Filed Form 8871/8872 Review

  1. Political Organizations can log onto the Internet website and electronically file their Forms 8871 and 8872. The returns are processed by a vendor and posted to the IRS Digital Daily website.

  2. A list of all electronically submitted Forms 8871 and 8872 will be sent to TE/GE CAS on a weekly basis.

  3. TE/GE CAS will compile the lists, and a random sample of 20 of each form will be selected for the monthly review.

  4. The sample will be sent to the Imaging function to do the website review and to EO Entity to check that the TC 150 posted to Master File.

3.45.2.4.2  (01-01-2006)
Verifying the Data

  1. Imaging will log onto the Digital Daily website each month and verify that the forms submitted from the listing provided have posted to the website timely and accurately. Returns can be located using the following search criteria:

    1. Organization Name

    2. EIN

    3. Date the form posted in MMDDYY format.

  2. The easiest way to begin the search is by EIN only. If the organization filed using the correct EIN and the form posted without problems or corrections, the EIN should locate the filers information. There could be many returns filed under a particular EIN, so you will want to look for the specific return and period ending date from your review sample.

  3. You will need to search by name in some cases because the Service may have made changes to correct the EIN after the return was filed. When searching by the organizations name you will want to leave the EIN field blank so any organization with a name similar to what you are looking for will be found. You can search by the organizations whole name or part of it. If a return cannot be located, try searching by using different combinations of the name to see if the return posted under a different EIN. If you search by EIN you will get all the combinations of the name the organization has used to file under this EIN.

  4. The following elements should be verified for each return.

    1. Verify that the posted Name, EIN, and Tax Period Ending Date match the information for the return being reviewed from the sample listing.

    2. The date of transmission shown on the sample listing should be checked against the date the form posted to the website to verify the return was posted timely. Electronically filed Forms 8871 and 8872 should be posted to the website within 48 hours of submission.

    3. Each weekly sample should be kept by the Imaging area to verify that the website postings do not drop off over a period of time. After 60 days the samples from preceding months will be checked again to ensure they are still available to view on the website. Use the following table as a guide and include the previous samples in the current months review.

    8871/8872 Sample Date: Re-check the website in:
    January March, May
    February April, June
    March May, July
    April June, August
    May July, September
    June August, October
    July September, November
    August October, December
    September November, January
    October December, February
    November January, March
    December February, April

  5. After verification that a particular sample has remained on the website for 4 months, the listing can be destroyed. Any returns that drop off the website should be shown on the current months report as a discrepancy.

    Note:

    In addition to listing the discrepancy on the report, contact TE/GE CAS at (801) 620-5044 if a return drops from the website.

  6. All discrepancies found in the verification steps above will be shown on the report each month. A sample report is shown in Exhibit 3.45.2-3.

3.45.2.4.3  (01-01-2006)
Paper Filed Form 8872 Review

  1. All paper filed Form 8872s are processed in Ogden. The returns flow through the processing system as follows:

    1. The forms are received in Extracting and forwarded to Batching.

    2. The forms are batched and forwarded to Imaging.

    3. Imaging makes an image of the returns and the electronic image is transferred to a system located at the Western Development Center (WDC).

    4. WDC converts the images to a format acceptable for posting to the website and forwards them to TCC for posting. As the images are transferred to TCC they are also loaded onto a local intranet site.

    5. After Imaging is completed, the forms are sent to processing.

  2. A photocopy of the first page of paper filed Form 8872s will be made by Batching and forwarded to TE/GE CAS on a monthly basis.

  3. The copies will be compiled and a random sample of 20 Form 8872s will be selected.

  4. The sample will be sent to the Imaging function to do the website review and to EO Entity to check that the TC 150 has posted to Master File.

3.45.2.4.4  (01-01-2006)
Photocopying Returns

  1. Batching will begin photocopying all Form 8872s received during the first week of each month until 20 have been copied. Once 20 have been copied, they will continue to copy 15 a week for the remaining 3 weeks of the month.

  2. Ideally 20 forms will be copied during the first week of each month and 15 a week for the rest of the month. However, due to the filing requirements of this form, receipts will vary from week to week throughout the year. There may be times when 20 returns are not received during the entire month.

  3. The front page of each Form 8872 will be photocopied and a count of the total number of pages received with each return will be written on the front of each copy.

    Note:

    Only write the number of pages on the copy. We do not want this written on the original document and shown on the website. It is critical to have the total number of pages received written on the front of each copy. This count will be used to verify that every page is imaged and posted to the website.

  4. Each weeks' copies will be placed in an envelope with the week ending date noted on the front. These will be picked up by TE/GE CAS unless other arrangements are made.

3.45.2.4.5  (01-01-2006)
Verifying the Data

  1. Imaging will log onto the Digital Daily website each month and verify that the forms in the review sample have posted to the website timely and accurately. Returns can be located using the following search criteria:

    1. Organization Name

    2. EIN

    3. Date the form posted in MMDDYY format.

  2. If the return is not posted on the Digital Daily website, check to see if it was imaged and is present on the local Intranet site.

    1. If the return is present on the local site something has happened in the transmission of the file from our local system to TCC or between TCC and the vendor. List the return as a discrepancy on the report and further research will be done.

    2. If the return is not present on our local website check to see if a TC 150 has posted to Master File. If there is no TC 150 the return may be in ERS or Rejects. Add the return to the list of errors for further research.

    3. If there is a TC 150 on the account the return may have been misrouted and was never imaged. Try searching by using different combinations of the name to see if the return posted under a different EIN.

    4. If a return cannot be found in Entity and did not post to the local website or another EIN, you will need to order the document from files. Order the DLN of the TC 150, have the return imaged and send the return back to files. List the return on the report as a discrepancy if the return was misrouted and did not go through Imaging.

  3. The following elements should be verified for each return.

    1. Verify that the posted Name, EIN, and Tax Period Ending Date match the information from the return being reviewed.

    2. The total number of pages shown on the front of the copy should be checked to verify that all pages are posted to the website. If the number of pages on the copy is different than what posted to the website, check to see if another type of return posted to the website on or about the same date. The filer may have sent another Form attached to the 8872 such as an 8871 or 990 that was separated and processed. You may be able to account for the total number of pages submitted by finding another form posted to the website and adding the pages numbers together. If you cannot account for the discrepancy it should be listed on the report.

    3. The Ogden Submission Processing Center (OSPC) return received date should be checked against the date it posted to the website to verify that the return was processed timely. Paper filed Forms 8872 must be processed and posted to the website within 5 working days of receipt.

  4. Each monthly sample should be kept by the Imaging area to verify that the website postings do not drop off over a period of time. After 60 days the samples from the preceding months' reviews will be checked again to ensure they are still available to view on the website. Use the table shown above in 3.45.2.4.2 (2) (c) as a guide and include the previous samples in the current months review. This will be for done 4 months or twice for each monthly sample.

  5. After verification that a particular sample has remained on the website for 4 months the copies can be discarded.

  6. Any returns that drop off the website should be shown in the current months report as a discrepancy.

    Note:

    In addition to listing the discrepancy on the report, contact TE/GE CAS at (801) 620–5044 if a return drops from the website.

  7. All discrepancies found in the verification steps above will be shown on the report each month. A sample report is shown in Exhibit 3.45.2-3 and 2-4.

3.45.2.4.6  (01-01-2006)
Report Preparation

  1. A report including both electronic and paper returns will be prepared on a monthly basis. Sample reports are shown in Exhibits 3.45.2-3 and 3.45.2-4. The report format will differ depending on the type of filing.

  2. The report will be done on an EXCEL spreadsheet which will be provided for you to be stored on your PC.

  3. It will be easier if the discrepancies are recorded on the report as they are found when doing the review. It may be more time consuming to keep track of the discrepancies and do the report after the review is completed.

  4. Discrepancies will be listed in the appropriate spaces by EIN and Name of the Entity and Tax Period Ending Date. The type of discrepancy will be shown on the report for example: not posted to the Digital Daily Website or did not post timely. The electronic report will show the transmission date and the paper report will show the OSC received date. There will also be a column for any additional comments to be added.

  5. The completed report will be sent via Secure Messaging to the designated TE/GE CAS Analyst.

3.45.2.5  (01-01-2006)
TEDS Review

  1. This Section provides instructions for reviewing and comparing TE/GE Determination applications submitted to IRS.

  2. The TEDS system is still in the developmental stage and instructions for this review will be forthcoming.

Exhibit 3.45.2-1  (01-01-2006)
Schedule of RICS Reviews

Type of Review Form Perform Review Sample Size
 
EP   January  
  5500   50
EO   February  
  990   50
  990 EZ   50
  990 PF   50
GE   March  
  8038   10
  8038 T   20
  8038 G   10
EP   April  
  5500   50
EO   May  
  990   50
  990 EZ   50
  990 PF   50
GE   June  
  8038   10
  8038 T   20
  8038 G   10
EP   July  
  5500   50
EO   August  
  990   50
  990 EZ   50
  990 PF   50
GE   September  
  8038   10
  8038 T   20
  8038 G   10
EP   October  
  5500   50
EO   November  
  990   50
  990 EZ   50
  990 PF   50
GE   December  
  8038   10
  8038 T   20
  8038 G   10

Exhibit 3.45.2-2  (01-01-2006)
Example of RICS Report

EIN & Tax Period Ending Date Type of Discrepancy ERTVU RICS View RICS Print EFAST Scanned Original EFAST Facsimile
xx-xxxxxxx 200103 Address 1611 N. Dorothy Dr. 92821 1611 N. Dorothy Dr. 92821 1611 N. Dorothy Dr. 92821 1611 N. Dorothy Street 92621 1611 N. Dorothy Dr. 92821
xx-xxxxxxx 200212 Line 7d Line 7e 15 8 15 8 15 8 18 0 No page 2
             
             
             
             
             
             

Exhibit 3.45.2-3  (01-01-2006)
Example of Electronic 8871/8872 Report

EIN & Name of Filer Description of Discrepancy Transmission Date Date Posted TC 150 Posting Date and Additional Remarks
xx-xxxxxxx Jones Company Not posted to website timely 7/25/2003 7/30/2003 Return should have posted by 7/28/03
xx-xxxxxxx Smith Company Not posted to the website 7/27/2003    
         
         
         
         
         

Exhibit 3.45.2-4  (01-01-2006)
Example of Paper 8871/8872 Report

EIN & Name of Filer Description of Discrepancy OSC Received Date Date Posted TC 150 Posting Date and Additional Remarks
xx-xxxxxxx Jones Company Not posted to website timely 7/25/2003 7/30/2003 Return should have posted by 7/28/03
xx-xxxxxxx Smith Company Not posted to the website 7/27/2003    
         
         
         
         
         

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