This section outlines the classification guidelines and responsibilities of campuses, Industry Planning and Special Programs Analyst (IPSP), International Territory Managers (ITM), International Team Managers, International Examiners (IE), and the Office of Strategy, Research and Program Planning (SRPP) (LMSB). Each ITM has been designated a campus at which to coordinate international classification.

Procedures related to Coordinated Industry Cases (CIC) are not included in these guidelines, except where specifically noted below.

CIC identified inventory is directly shipped to the respective CIC Controlling Group by Ogden LMSB PSP. CIC Team Coordinators should continue to collaborate with local International Team Managers and Examiners for classification of international issues.

Industry Cases (IC) with international-features will be available for classification at the Ogden Campus. These returns will be delivered for classification pursuant to established criteria.

SB/SE International-feature returns are automatically delivered to Classification Sections at the Campus

1120F returns with assets under $10 million and books and records in the U.S., will be classified at the Philadelphia Campus by combined LMSB and SB/SE Area 15 classifiers. Returns selected for examination will be stored at the Philadelphia Campus and will remain assigned to SB/SE. Selected returns will be available to LMSB as their inventory needs dictate. Refer to Exhibit 4.60.5 - 1 for the Memorandum of Understanding (MOU) between LMSB and SB/SE.

LMSB will provide International Examiners to classify the international issues on SB/SE inventory of domestic returns with international features.

International feature SB/SE returns not classified by International Examiners will follow normal international referral procedures.

International feature SB/SE returns accepted as filed by International Examiner classifiers will be processed by SB/SE without further involvement from LMSB.

SB/SE will consider the domestic issues on all returns selected for examination by the International Examiners no later than the first scheduled SB/SE classification detail following the selection of the international issue. If no action is taken at that time, domestic issues will be accepted as filed.

SB/SE returns selected for examination for both domestic and international issues will be assigned to a SB/SE group in accordance with established SB/SE procedures. When determining priorities for assignment to a group, SB/SE will consider the examination potential of the international issue along with SB/SE priorities and other issues. For cases referred by SB/SE and accepted by LMSB International Examiners, LMSB will ensure that SB/SE is kept apprised as to the status of the referrals.

SB/SE returns selected for examination of international issues but accepted as filed for domestic issues will be made available to LMSB for use as "Limited Scope" inventory. These returns will be stored at the Campus where they were classified. Control of these returns will remain in SB/SE until such time as they are assigned to a LMSB group.

Assignment of "Limited Scope" inventory to a LMSB group will be made in accordance with local procedures and agreements governing the assignment of international workload (domestic vs. international group).

Upon request, LMSB will provide accomplishment data regarding "Limited Scope" examinations to SB/SE.

SB/SE Compliance Area 15 will have jurisdiction of Forms 1120F with assets less than $10M without regard to the location of the books and records; however, an exception will apply to LMSB related taxpayers. For example, in situations where a key case is under the jurisdiction of LMSB, the related 1120F will be under LMSB jurisdiction, without regard to whether the assets of the related Form 1120F are less than $10M.

While the jurisdiction of SBSE Compliance Area 15 includes all Forms 1120F with assets less than $10M, those returns with books and records in the U.S. will be available to LMSB IE’s for examination upon request.

LMSB will have jurisdiction for Forms 1120F with assets of $10M and greater. Forms 1120F having no balance sheet whose assets are subsequently determined to be greater than or equal to $10M will be under the jurisdiction of LMSB

Coordinated Industry Case (CIC) identified inventory is directly shipped to the respective CIC Controlling Group by Ogden LMSB PSP after associated AIMS/ERCS research.

Industry Case (IC) inventory is stored at the Ogden Campus and international-feature returns will be classified according to established procedures.

International-feature SB/SE returns are sent to local SB/SE PSPs automatically for association with appropriate LMSB teams.

LMSB returns are sent to the LMSB PSP at the Ogden Campus and are stored for assignment to LMSB groups.

Form 1120F LMSB returns will be classified by international classifiers at the at the Ogden Campus.

Classification of Form 1040 international feature returns will be performed based upon agreements with local Area SB/SE PSP. It is expected that a DIF cut-off score can be established to identify returns to be made available for classification. The International aspects of the returns will be addressed via referral to LMSB International Groups at the SB/SE and/or W&I Area level pursuant to current IRM procedures.

International Examiners assigned to classifying returns at a campus, should become familiar with the instructions in this Section and any instructions given during the classification detail.

Screen tax returns for international issues. IE classifiers should not evaluate domestic issues; however, if there is a glaring missed domestic issue, the IE classifier will bring it to the attention of the campus manager in charge of classification.

If a tax return is obviously a Coordinated Industry Case (formerly CEP), flag the return and give it to the campus manager in charge of classification.

Select returns according to merit, regardless of the resources available in a particular geographic area.

Stamp front of return "accepted as filed" or "selected for international" .

When a return is selected, complete an International Classification Check-sheet, Form 10436, and attach it to the tax return. The classifier must include sufficient narrative to enable the international manager to prioritize the examination potential of the return.

Separate classified work by:

For Domestic accepted/International selected returns, complete Examination Update Forms 5348 by attaching an AIMS status label, and sort the returns by geographic area. Make a notation on top of each Form 5348 in the following manner: "scope limited to international issues."

For domestic selected/international selected, complete Forms 5348 by attaching an AIMS status label, and sort the returns by industry and by legacy district. Make a notation on the top of each Form 5348 in the following format: "referral."

) For SB/SE international selected work, complete Forms 5348, by attaching an AIMS status label, and sort the returns by geographic area. Make a notation on the top of each Form 5348 in the following format: "SB/SE " . The International Territory Manager is responsible to ensure returns are timely transferred.

Completed Forms 5348 should be given to the International Team Manager in charge of reviewing the quality of the classification.

The various forms that are attached to the tax returns may provide the basis to select returns for audit.

Code and Edit Forms, usually attached to the front of the tax returns, can also provide background information for international screening/classification.

The Law Enforcement Manual (LEM) may provide additional basis for an international selection.

Review the current Classification Procedures IRM, with particular attention to international issue identification and IE Classifier responsibilities.

Ensure returns have been selected according to merit, regardless of the level of resources available in a particular geographic area.

Quality review a representative sample of each IE Classifier’s work as required by the IRM for:

Document the classification reviews on the Form 5126, Classification Quality Review Record, discuss with the classifier, and give them to the campus manager in charge of classification for distribution to the respective managers of the classifiers. See Exhibit 4.60.5-2 for a copy of Form 5126, Classification Quality Review Record.

Compile a summary count of:

Attach copies of the Forms 5348 (from IE Classifiers) on the summary count memorandum only to the International Team Managers impacted.

Transfer and update all SB/SE "limited scope." International selected returns according to current procedures.

Input the following Project Codes:

International Team Manager will periodically run the Awaiting Referral Group 9999 Report in ICMS for his/her geographic area (legacy district), to identify international referral work in all domestic groups in all BOD’s (Business Operating Divisions) in their geographic area.

International selection of LMSB & SB/SE inventory procedures:

"LIFE" (Limited Issue Focus Examinations) inventory procedures: