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Part 4. Examining Process

Chapter 71. Employee Plans Examination of Returns

Section 6. Employee Plans Referrals

4.71.6  Employee Plans Referrals

4.71.6.1  (01-01-2004)
Overview Employee Plans Referrals

  1. This section describes the referral procedures between Employee Plans (EP) and:

    1. Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL),

    2. Pension Benefit Guaranty Corporation (PBGC),

    3. Exempt Organizations (EO),

    4. Governmental Entities (GE), and

    5. Large and Mid-Size Business (LMSB), Small Business/Self-Employed (SB/SE), or Wage and Investment (W&I), which are collectively referred to as Exam Functional Units (EFUs).

  2. When dealing with referrals, this section covers the responsibilities of:

    1. EP Classification

    2. EP agents, and

    3. EP group managers.

  3. EP Classification is responsible for the control and processing of referrals that are either initiated by EP or made to EP.

  4. Referrals made from an EP group to DOL (EBSA) (See IRM 4.71.6.7) should be made on Form 6212-B (See Exhibit 4.71.6-2) and forwarded to:

    IRS – EP Classification

    31 Hopkins Plaza

    Room 1550, Group 7693

    Baltimore, MD 21201

  5. All other referrals (See IRM 4.71.6.5, 4.71.6.6, and 4.71.6.8) should normally be routed to:

    IRS - EP Classification

    9350 Flair Drive, 2nd Floor

    El Monte, California 91731-2885
    NOTE:If a direct referral is made, a full copy of the referral must be sent to Classification.

  6. Referrals made by EBSA to EP are prepared on Form 6212-A.

  7. Referrals received from one of the EFUs are normally prepared on Forms 4632 or 5346.

  8. Referrals received from Exempt Organizations (EO), Governmental Entities (GE), or Indian Tribal Governments (ITG) are normally received on Form 5666.

  9. Referrals received from a federal, state or local government (FSLG) related to IRC 403(b) or IRC 457 arrangements are generally received on Form 4632-C (See Exhibit 4.71.6-4).

  10. Referrals made from EP to one of the EFUs, EO, GE or EP (for a future year or to other functions within EP) will be prepared on Form 5666 (See Exhibit 4.71.6-1).

  11. Referrals to PBGC will be prepared on Form 6533 (See IRM 4.71.6.8 and Exhibit 4.71.6-3).

  12. When assistance is needed from a specialist within the IRS but outside of EP, the Specialist Referral System (SRS) should be utilized (See IRM 4.71.6.9).

4.71.6.2  (01-01-2004)
EP Classification Procedures

  1. EP Classification is responsible for the control and processing of referrals that are either initiated by EP or made to EP.

  2. The Referral Specialist (RS) in Classification will:

    1. Promptly review the referral;

    2. Complete the IDRS research necessary to make a determination on examination potential and to determine if there is a related EP examination or determination case open;

    3. Enter all referral information onto a database containing items such as taxpayer name, EIN, type of referral, tax period(s), date received, disposition and date of disposition, and;

    4. Forward all referrals made to DOL on Form 6212-B to the appropriate EBSA Regional Director no later than the last workday of the week in which the referral is received in Classification.

  3. If the RS determines that an examination is warranted:

    1. The year to be audited will be determined;

    2. AIMS control will be initiated for the year to be examined;

    3. A RICS return will be obtained;

    4. The exam will be assigned and mailed to an EP group;

    5. If the referral is a Form 5666 referral, the originator will be contacted by the RS, when appropriate, within 15 workdays of the date that the Form 5666 was sent to Classification. A copy of the referral will be returned to the originator with a note stating the action taken;

    6. If the referral was received from DOL (EBSA), the originator will be contacted by the RS within 20 workdays of the date Form 6212-A was mailed to Classification. The "Action Taken" block on Form 6212-A will be completed and Part Two of the form returned to EBSA;

    7. Upon closure of an examination initiated as the result of a referral from EBSA, a copy of Form 6212-A will be forwarded to the EBSA Regional Director by the RS with comments in the Remarks section briefly stating the results of the exam. If excise tax under IRC 4971 or 4975 is being assessed, the amount of tax should be listed. If the IRS does not propose or assess excise taxes that are referred, then the reasons should be entered in the Remarks section of Form 6212-A;

    8. If the referral was received on Form 4632 or 5346 from an EFU, the originator will be contacted by the RS within 15 workdays of the date the referral was mailed to Classification. A copy of the referral will be returned to the originator annotated with the action taken.

    9. If the referral was received on Form 4632-C from a FSLG, the referral will be logged in by the RC and forwarded immediately to the analyst in EPP responsible for IRC 403(b) and IRC 457 arrangements.

  4. If the RS determines that an examination is warranted but the referral is for a future year or resources are not available to conduct the examination, the referral will be placed in suspense. Future year referrals held in suspense will be reviewed periodically to ensure that the exam is done as soon as possible.

  5. If the RS determines that an examination is not warranted, the referral will be disposed of as follows:

    1. A copy of Form 5666, annotated with the action taken, will be returned to the originator by the RS within 15 workdays of the date the referral was sent to Classification. The original Form 5666 referral will be maintained in Classification for three years in a system of records. The record keeping system will include an explanation of the reason the referral was screened out.

    2. Forms 6212-A not selected for exam, will be annotated with the reason for nonexamination. The originator will be notified by the RS within 20 workdays of the date the referral was mailed to Classification. The appropriate "Action Taken" block on Form 6212-A will be selected and Part Two of the form will be returned to EBSA. Part One will be maintained for three years in a system of records that permits the retrieval of the Form 6212-A;

    3. Forms 4632 or 5346 not selected for exam will be annotated accordingly and a copy returned to the applicable EFU within 15 workdays of the date the referral was mailed to Classification. The referral will be maintained for three years in a system of records.

4.71.6.3  (01-01-2004)
Group Procedures – Referrals Received From EP Classification

  1. Upon receipt of a referral in the group, the manager should immediately assign the referral to an agent.

  2. The agent will contact the EFU examiner or DOL (EBSA) investigator within 15 workdays of receipt in the group of Form 4632, Form 5346, or Form 6212-A if the related case is being held open in the EFU or in EBSA. The agent should periodically provide an update to the EFU examiner or EBSA investigator of the status and results of the EP exam.

  3. In instances where a related examination is open in any EFU or in EBSA, every effort should be made to resolve the issue within 90 days of receipt in the group. If the case is not closed within 90 days, the EP group manager should contact the group manager in the referring group to give feedback on the status of the exam.

  4. Once the EP agent resolves a referred issue:

    1. A brief exam report should be prepared regarding the findings related to the referred issue. This report can be done on Form 886-A or in memo form;

    2. If an EFU agent or an EBSA investigator has a related exam open and is anticipating feedback, the exam report and a copy of the referral (Form 4632 or 6212-A) should be sent by the EP agent directly to the agent/investigator;

    3. The case chronology should be documented accordingly, and;

    4. A copy of the exam report and referral package should be included in the EP case file.

4.71.6.4  (01-01-2004)
EP Group Procedures – Referrals from Other Sources

  1. Occasionally EP groups will receive referrals directly from local agencies (i.e., DOL or FSLG), individual taxpayers, or agents from an EFU. All such referrals should be sent directly to the appropriate Classification office.

  2. If the applicable referral form was not prepared by the referring entity or individual then the receiving group should prepare the applicable referral form and forward it to Classification. For example, if a referral is received from an individual taxpayer, the agent or group receiving the referral should prepare Form 5666 and forward the referral to Classification.

  3. If the receiving group has made a decision to conduct an examination based on the referral that is received directly by the group from an entity or individual, it should be noted on the referral form when it is forwarded to Classification. (See IRM 4.71.6.4 (5) below)

  4. All such referrals should be sent directly to the appropriate Classification office.

    1. DOL referrals and referrals that are not taxpayer specific should be sent to Baltimore (See IRM 4.71.6.1(4), above).

    2. All other referrals should be sent to El Monte (See IRM 4.71.6.1(5), above).

  5. No manager or agent should begin any compliance activity regarding a referral unless the referral has been received from EP Classification (or approval has been given by EP Classification).

4.71.6.5  (01-01-2004)
EP Group Procedures – Making Referrals Within EP

  1. EP agents or tax law specialists generating referrals to groups within EP should complete Form 5666 and submit it to the group manager for approval. The issue(s) should be fully explained and the Code section(s) violated should be specified.

  2. At a minimum the following line items should be completed on Form 5666: items 1, 5, 6, 14, 15, 16, 17, 21, 22, and 32. The name of the referring agent should be legibly printed in item 21. Make sure the group manager signs in item 22. See Exhibit 4.71.6–1 for an example.

  3. Form 5666 referrals should be sent to:

    IRS – EP Classification

    9350 Flair Drive – 2nd Floor

    El Monte, CA 91731-2885

4.71.6.6  (01-01-2004)
EP Group Procedures – Making Referrals to Exam Functional Units

  1. Income tax issues not within the scope of discrepancy adjustments will be referred to an EFU on Form 5666. See Exhibit 4.71.6-1. See IRM 4.71.4 for discrepancy adjustment procedures (See IRM 4.71.4.2 for a list of issues that do not fall within the scope of discrepancy adjustments).

  2. A description of the issue along with the amount of unreported income and/or tax consequences should be clearly stated on Form 5666.

  3. At a minimum the following items should be completed on Form 5666:
    1, 5, 6, 14, 15, 16, 17, 21, 22, and 32. The name of the referring agent should be legibly printed on item 21. The group manager should sign item 22. See Exhibit 4.71.6-1 for an example.

  4. A copy of the applicable RTVUE or BRTVU print and any other relevant IDRS research will be attached to the referral.

  5. The Form 5666 will be approved and dated by the group manager.

  6. Form 5666 should be forwarded to EP Classification in El Monte, California, unless the agent is working directly with another agent in the EFU. If the agent is working directly with the EFU, the referral should be given directly to the EFU and a copy of the Form 5666 sent to Classification. See IRM 4.71.6.5 for the Classification address in El Monte, CA.

  7. A copy of the Form 5666 should be placed in the related EP case file.

  8. The case is required to be held open until the earliest of 15 workdays, or until the EP agent receives feedback from the EFU.

4.71.6.7  (01-01-2004)
EP Group Procedures – Making Referrals to the Department of Labor (DOL)

  1. Form 6212-B should be completed for all EP exams. See Exhibit 4.71.6-2.

  2. A referral is required to be made to Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL) when a question on Form 6212-B is answered in the right hand column or when plan revocation/non-qualification is being proposed. When a referral to EBSA is required to be made, the following items should be mailed to EP Classification in Baltimore:

    1. Two copies of Form 6212-B;

    2. A copy of the applicable Form 5500, and;

    3. Any relevant information pertaining to the issue being referred, including a copy of the Revenue Agent’s Report (RAR) if there is an unagreed IRC 4971 or IRC 4975 issue or a proposed revocation.

    4. The "DOL Participation Requested" block on Form 6212-B should be selected for all unagreed cases involving IRC 4971 or IRC 4975 tax.

  3. The address for EP Classification in Baltimore is:

    IRS – EP Classification

    31 Hopkins Plaza

    Room 1550, Group 7693

    Baltimore, MD 21201

  4. Any examination for which Form 6212-B is referred must remain open until the earlier of twenty days from the date mailed to Classification, or the date feedback is received.

  5. When a referral is required to be made, a copy of the Form 6212-B should be maintained in the case file as part of the workpapers. When a referral is not required to be made, the original Form 6212-B should be maintained as part of the workpapers. "File Copy" should be written on the top of the form.

  6. IRS will defer action in a case when, as a result of a referral of a checksheet between the agencies, the EBSA Regional Office advises the Manager, EP Classification, in writing that the case has been referred to the DOL National Office. IRS will not take further action in the case until the date when EBSA notifies the EP Classification Unit of EBSA's final action in the case, unless collection of a tax is in jeopardy, the running of the statute of limitations is imminent, or plan assets or the interests of plan participants must be protected. In such a case, the IRS will immediately notify DOL of the action by telephone and confirm the notification in writing within five workdays.

4.71.6.8  (01-01-2004)
EP Group Procedures – Making Referrals to Pension Benefit Guaranty Corporation (PBGC)

  1. Form 6533 should be completed for all EP examinations of plans that are subject to PBGC. See Exhibit 4.71.6-3.

  2. Most defined benefit pension plans are covered by PBGC insurance. ERISA 4021(b) lists plans that are not covered. Defined benefit plans that are not covered include:

    1. Plans offered by professional service employers (i.e. doctors and lawyers) that have never had more than 25 active participants,

    2. Plans outside the United States for nonresident aliens,

    3. Plans established exclusively for one or more substantial owners,

    4. Church plans as defined by IRC 414(c) unless the plan has made an election under IRC 410(d) to be covered and has notified PBGC that it wishes to be covered, and

    5. Plans of federal, state and local governments.

  3. When a referral is warranted per Form 6533, the Form should be mailed to:

    Pension Benefit Guaranty Corporation

    1200 K Street, NW

    Washington, DC 20005-4026

  4. When a referral is made, a courtesy copy of the Form 6533 should be forwarded to EP Classification in El Monte, California (See IRM 4.71.6.1(5), above, for the address) with a note stating when the original referral was forwarded to PBGC.

  5. There is no need for the group to hold the case for any length of time after a referral is made.

  6. A copy of Form 6533 should be maintained in the case file. " File Copy" should be written on the top of the form.

4.71.6.9  (01-01-2004)
EP Group Procedures – Specialist Referral System

  1. The Specialist Referral System (SRS) is to be used by EP personnel to request assistance on EP exams. It is not a replacement for the procedures contained in this IRM.

  2. Through SRS, agents can generate a referral request for assistance online, which will automatically notify the appropriate Specialist Manager (in LMSB, SBSE, W&I, CAS, EO, or GE) of the request. The manager may then accept or reject that request. If accepted, the manager will assign a Specialist to assist the agent on the case.

  3. Using the SRS, the EP agent can generate a referral request for a Computer Audit Specialist (CAS); Economist; Employment Tax (LMSB); Employment Tax (SB/SE); Employment Tax (TE/GE); Engineering; Excise; Exempt Organizations; Federal, State & Local Government; Financial Products; Indian Tribal Government; International; and Tax-Exempt Bonds.

  4. The intranet address for the SRS home page is: https://srs.web.irs.gov/Default.asp

  5. The SRS home page contains the following links:

    1. Formal Referral Link– This link is used to request the services of a specialist. This will allow a specialist to be assigned to your case;

    2. Informal Assistance Link– This link is used to submit a question to a specialist. This will be an informal system to get your questions answered, and;

    3. Other Resources– This link is used to find other resources or research sites for a specific specialty. For example, a link to the employment tax home page or a specific bulletin board forum for the specialty in which you are interested.

4.71.6.10  (01-01-2004)
Referrals to Correct Master, Prototype and Volume Submitter Plan Language

  1. When errors are discovered in the language of a pre-approved Volume Submitter or Master, Prototype plans, Form 3558 should be completed. See Exhibit 4.71.6-5.

    1. The issue should be clearly explained and the impacted plan sections should be listed.

    2. The name of the referring agent should be legible.

    3. A copy of the opinion letter or volume submitter letter should be attached.

    4. The impacted plan sections should also be copied and attached.

  2. Form 3558 referrals involving Master, Prototype Plans should be forwarded to:
    IRS
    T:EP:RA:ICU, Room 253
    1111 Constitution Ave. NW
    Washington, DC 20224

  3. Form 3558 referrals involving Volume Submitter Plans forwarded to:
    IRS
    Volume Submitter Coordinator
    P.O. Box 2508, Room 5106
    Cincinnati, OH 45201

4.71.6.11  (01-01-2004)
Referrals to Recommend Revisions in Published Guidance

  1. Guidance that impacts EP examinations is provided through various means. This section sets forth procedures for recommending changes in published guidance.

  2. Form 3558 can be utilized to recommend changes to formal published guidance such as the Internal Revenue Code, regulations, revenue procedures, revenue rulings, etc. See Exhibit 4.71.6-5.

    1. The problematic portions of the guidance should be listed and the issue should be clearly explained.

    2. The name of the referring agent should be legible and a contact phone number should be included.

    3. The referral should be mailed to:
      IRS
      Director, Employee Plans Rulings and Agreements
      SE:T:EP:RA
      1111 Constitution Ave. NW
      Washington, DC 20224

  3. Referrals for changes to the IRM should be made to the IRM Coordinator in EP Mandatory Review. This can be done informally by phone or e-mail. The phone number for EP Mandatory Review is 410-962-9560.

Exhibit 4.71.6-1  (01-01-2004)
Form 5666, TE/GE Referral/Information Report

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Exhibit 4.71.6-2  (01-01-2004)
Form 6212–B, Examination Referral Checksheet B

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Exhibit 4.71.6-3  (01-01-2004)
Form 6533, Examination Referral Checksheet

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Exhibit 4.71.6-4  (01-01-2004)
Form 4632-C

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Exhibit 4.71.6-5  (01-01-2004)
Form 3558, Technical Coordination Report

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