This section contains operating procedures for MACS users. These procedures apply to all persons authorized to access the MACS system. They may also apply to others who use MACS information.

MACS users are prohibited from accessing information not needed to perform official duties. Unauthorized access to accounts is a fundamental violation of the public trust in the confidentiality of returns and return information, one of the foundations of sound tax administration and public confidence in that system. It also violates both privacy and disclosure rules and may result in removal from the Service and criminal prosecution.

A MACS user is an individual who has been granted authority to directly access MACS. No one may conduct any type of research on a MACS computer until they have been established as a user by the system administrator. All prospective users must submit an approved Form 5081, Information System User Registration/Change Request, before they can access the MACS system (see Section 4.3.3.2.2, Controlled Access). The system administrator must not be a MACS user.

For each research session on the MACS system, users are required to log on to MACS with their unique login name and password. Users must not disclose their password to anyone, including the system administrator and are responsible for all research performed under their login name. A shared password could result in the user being held liable for unauthorized access to taxpayer data.

A MACS terminal must never be left unattended in an unlocked window. While conducting a research session, the user has access to four windows in which four separate processes may be performed simultaneously. The user will not allow others to use open windows on their terminal. If the user must leave the terminal unattended, even momentarily, while one or more processes are running, the terminal should be locked from an idle window. This prevents all other persons from accessing that terminal, but allows processing to continue. The terminal can only be unlocked with the password assigned to the active login name, or by rebooting the entire system which terminates the current processing.

Research is defined as any user activity on the MACS system. All research on MACS, except for the demo database, requires a properly approved, written MACS Research Request. Case building for returns already on AIMS requires a written request but no approval. See Exhibit 5.3.4–1, MACS Research Request. The research request may be submitted from within Compliance/Compliance Services or from another function outside of Compliance/Compliance Services.

Research requests for filters should be specific, identifying the market segment and/or issues to be researched. For example: method of accounting issues in the construction industry.

All requests from within Compliance /Compliance Services should first be submitted to the requester’s manager for approval. The approved request will then be routed to PSP Area/Compliance Services Exam Operation. If the requester is a first line manager or above, the research request may be routed directly to PSP Area/Compliance Services Exam Operations with only that person’s signature. Prior to research by the MACS user, the research request must be approved by the PSP Area Support Manager /Compliance Center Exam Operation Program Manager or delegate.

All requests from outside of Compliance/Compliance Services should first be submitted to the requester's manager for approval. The request will be routed through appropriate channels to PSP Territory Manager-East/West/Compliance Services Exam Operations for approval prior to routing to PSP Area/Compliance Services Exam Operations. Approval of outside requests may be delegated to PSP Area Support Manager/Compliance Services Exam Operation Program Manager.

A request originating within PSP Area Support/Compliance Services Exam Operation may have the same person provide both levels of authorization. MACS users will not be allowed to authorize, even in an acting managerial capacity, any research requests which will be assigned to them.

Requests containing taxpayer identifying information cannot be routed via fax or other electronic means.

(6) Minor modifications may be made to the original research request without submitting a new request. This should be documented by notation or addenda to the request form. Examples of minor modifications include: extension to other years, refinements of dollar criteria and expansion to other POD’s. Minor modifications must not change the intent of the original request.

Each approved research request will be assigned a control number. The control number is required to be input at each stage of the MACS research session and provides an audit trail to the research request form.

One person in each area/compliance service campus will be responsible for assigning control numbers to approved research requests. This person may be the system administrator or some other locally designated person. The designated person will maintain a log book that is accessible by the system administrator and security officer and contains at least the following:

Control numbers should be assigned sequentially as research requests are received. Each research request should have a unique control number except:

General or "generic" control numbers may be used only in the following situations:

After the control number is assigned, a copy of the approved research request form should be assigned to a MACS user for action. Addenda must be attached to the request to record additional authorized users, minor filter modifications and other changes. The original research request form and addenda must be kept by the system administrator in a secure area.

Upon receipt of an approved research request, the MACS user should determine whether the system is capable of filling the request. Factors include:

Once an area’s returns are stratified using a filter, MACS can select a statistical sample from the returns identified by the filter. The user can determine the number of returns to sample from each stratum. The MACS program generates a sample seed as the starting point for the sample selection process. Using the seed from a previous sample, the user may increase the original sample to select additional returns. The sample seed is located in the header of the TIN list. See Exhibit 4.3.4–4, TIN List.

If an IRS employee return is identified by a filter and selected by the statistical sample, it will appear on the TIN list with UNAUTHORIZED RETURN in the name column and a TIN of 000000000. Because the TIN lists are in numerical order, employee returns will appear at the top of the stratum. The user should check each stratum for employee returns. See Section 4.3.4.12, IRS Employee Returns in this handbook, for procedures.

A demo database is available for training and filter testing. The demo database is accessed by selecting Area 00. It functions like a full area database but has only 10,000 records. It contains actual return data with fictionalized names, addresses and TIN’s. Users are encouraged to test complicated filters for proper logic and the ability to identify potential issues. Filters for local issues or highly selective criteria, however, may not identify any returns on the demo database because of the limited population. The demo database may be manipulated without a research request, but a control number must be assigned and documented in the control log.

Although taxpayer names, addresses and TIN’s have been fictionalized, the records are still considered sensitive data and must be protected with the same security as all other taxpayer data. This data should never be shared with anyone outside IRS, such as tax practitioner groups.

A filter is a set of conditions against which all returns in the filing population are compared. MACS allows the user to design filters to identify groups of returns containing particular issues or characteristics. The identified returns are those which meet the conditions of the filter. See Section 4.3.4.5–4, Filter Comparisons Available in this handbook. The filter process may be used in many different ways, for example:

Once returns are identified using filters, MACS can also facilitate the classification process. See Section 4.3.4.9, Classifying with MACS in this handbook.

MACS filter criteria are Official Use Only. They must not be transmitted via fax machine. They may only be transmitted electronically to the MACS library on the IS Bulletin Board using the procedures provided in Exhibit 4.3.6–2, Instructions for Uploading Filters.

Most returns identified by MACS filters can be classified without ordering the original returns. Occasionally, it may be necessary to secure original returns to classify issues identifiable by line items not available on MACS prints. Because of costs involved, original returns should be requested only when necessary. MACS offers cost- and time-saving alternatives to traditional classification methods. For example:

A three-year format is available to facilitate multi-year comparisons and trend analysis.

Resources outside the MACS system such as IDRS should be used to determine whether the identified returns have been amended, are currently under examination, were previously examined and closed, etc.

Once a group of returns is identified for compliance contact, a CIP must be approved in accordance with IRM procedures for Compliance Initiative Projects. CIP’s must be approved before any taxpayer contact is made. Prior to compliance contact, no approved CIP is necessary unless MACS is used for matching against external data or unless a MACS extract is requested.

If returns are selected using only the following criteria:

then no CIP authorization is required.

Returns selected using ADDAPT (see IRM section 4.3.6.3.4) do not require a CIP.

If, while conducting research on MACS, a return is noted that contains potential issues not necessarily relevant to the purpose of the research, but does have indications of significant noncompliance, information reporting procedures contained in the IRM Return Selection and Assignment Handbook should be followed. No additional research request or CIP is required unless multiple returns with similar issues are identified or selected.

The returns of IRS employees and their spouses are included in the MACS database and are subject to the same research processes as other returns. IRS employee returns must be treated like all other returns identified during research on MACS. Filters should never be rerun for the purpose of eliminating IRS employees from a TIN List.

The system will notify users prior to accessing IRS Employee tax return or name and SSN information, whether the employee has the primary or secondary (spouse’s) SSN. During SSN searches, name/address searches, batch printing or market research, a message will appear on the screen alerting the user.

Processing will continue, allowing the user to immediately access the return or name and SSN.

Employee accesses should be documented on the MACS Research Request, either by notation, attaching the MACS Documentation of Employee Access (see Exhibit 4.3.4–7), or other documentation.

MACS output documents will contain an employee indicator.

The special handling procedures in the IRM Return Selection and Assignment Handbook will be followed.

The same security should be provided for any document produced by MACS containing taxpayer identifying information as is given actual tax returns and all other confidential taxpayer information. This includes transmittal via Form 3210 for any documents containing taxpayer identifying information that are distributed outside of PSP Area Support/Compliance Services Exam Operations.

All MACS facsimiles distributed via Form 3210 for the purpose of making an audit determination must be returned to the PSP Area Support/Compliance Services Exam Operation within 30 calendar days. The PSP Area Support/Compliance Services Exam Operation will establish them on AIMS if selected for examination, or dispose of them. If the audit determination is made within the PSP Area Support/Compliance Services Exam Operation, the facsimile should be established on AIMS within 30 days if selected, or disposed. Local procedures may be substituted with the written approval from Headquarters Compliance Policy. Facsimiles distributed for case building should be marked "For Information Only."

Other MACS documents containing taxpayer information such as TIN lists, should be disposed of by the recipient.