Internal Revenue Manual
IRM 4.24.25 — Issue Management System (IMS), Notebook and Workpapers
Part 4. Examining Process
Chapter 24. Excise Tax Section 25. Issue Management System (IMS), Notebook and Workpapers 4.24.25 Issue Management System (IMS), Notebook and Workpapers Manual Transmittal December 03, 2025 Purpose (1) This revises IRM 4.24.25, Excise Tax, Issue Management System (IMS), Notebook and Workpapers. Material Changes (1) Refer to the table below for a description of the material changes made. Subsection Description of Change IRM 4.24.25.1, Program Scope and Objectives Removed the General Overview paragraph as it is not required by IRM 1.11.2.2.4, Address Management and Internal Controls. IRM 4.24.25.1.3, Responsibilities Updated title to Roles and Responsibilities as required by IRM 1.11.2.2.4. IRM 4.24.25.1.4, Program Objectives and Review Updated title to Program Management and Review as required by IRM 1.11.2.2.4 and moved (4) to IRM 4.24.25.1.5. IRM 4.24.25.1.5, Terms/Definitions/Acronyms Updated title to Program Controls, added controls and reference to IRM 4.24.25.1.4. Moved Terms and Acronyms to IRM 4.24.25.1.6. IRM 4.24.25.1.6, Related Resources Updated title to Terms and Acronyms, moved content from 4.24.25.1.5 to here, deleted the terms attribute and Mef (they are clearly defined in content of IRM), deleted IDRS Command Codes and provided a link to the IDRS Command Code Job Aid page instead. Moved Related Resources to IRM 4.24.25.1.7. New IRM 4.24.25.1.7 Added title Related Resources and moved content from IRM 4.24.25.1.6 to here. Added Taxpayer Advocate Service and updated all links. IRM 4.24.25.2, Issue Management System (IMS) Added a reference to IMS Help and IMS Team Website. IRM 4.24.25.2.1, IMS Help Function: A Useful Tool to Navigate IMS Deleted IMS Help Function content because links are now provided in IRM 4.24.25.2. Updated title to Creating Case in IMS and moved content from IRM 4.24.25.2.2 to here. IRM 4.24.25.2.2, Creating a Case in IMS Updated title to Entities: Returns and moved content from IRM 4.24.25.2.3 to here. IRM 4.24.25.2.3, Entities: Returns Updated title to Team Members and Taxpayer Contacts and moved content from IRM 4.24.25.2.4 to here. IRM 4.24.25.2.4, Team Members and Taxpayer Contacts Updated title to Revenue Protection Codes (RPCs) and moved content from IRM 4.24.25.2.5 to here. IRM 4.24.25.2.5, Revenue Protection Codes (RPCs) Updated title to Standard Audit Index Number (SAIN) Codes and moved content from IRM 4.24.25.2.6 to here. IRM 4.24.25.2.6, Standard Audit Index Number (SAIN) Codes Updated title to Uniform Issue List (UIL) and moved content from IRM 4.24.25.2.7 to here. IRM 4.24.25.2.7, Uniform Issue List (UIL) Updated title to Uploading Documents to IMS and moved content from IRM 4.24.25.2.8 to here. IRM 4.24.25.2.8, Uploading Documents to IMS Updated title to Charging Time on Cases/Returns and Issues to IMS and moved content from IRM 4.24.25.2.9 to here. Updated reference to the Examining Officer's Activity Record. IRM 4.24.25.2.9, Charging Time on Cases/Returns and Issues Updated title to Closing Cases in IMS and moved content from IRM 4.24.25.2.10 to here. Updated reference to IRM 4.24.21.4.1. IRM 4.24.25.2.10, Closing Cases in IMS Updated title to Synchronization and moved content from IRM 4.24.25.2.11 to here. IRM 4.24.25.2.11, Synchronization Updated title to Other IMS Issues, File Size, File Limitations and Encryption Policy and moved content from IRM 4.24.25.2.12 to here. IRM 4.24.25.2.12, Other IMS Issues, File Size, File Limitations and Encryption Policy Deleted this subsection and moved content to IRM 4.24.25.2.11. IRM 4.24.25.3, Guide for Using Notebook Removed (4) because content is obsolete. Notebook now updates automatically when opened. Moved the note from (4) to (3). IRM 4.24.25.4, Workpaper Preparation: The General Process Removed paragraphs (7) and (8), a summary of forms deployed from Notebook is not needed. Each form, letter and workpaper are addressed throughout other subsection in this IRM. Reorganized and move Other Resources content to here from IRM 4.24.25.4.1. IRM 4.24.25.4.1, Workpaper Preparation: Other Resources Deleted this subsection and moved content to IRM 4.24.25.4. IRM 4.24.25.5.1, Form 4318-E, Excise Workpapers Index Updated title to Form 15682, Excise Workpaper Index. Replaced reference to Form 4318 with the revised published Form 15682, 000 - Excise 15682 - Workpaper Index. IRM 4.24.25.5.2, Form 9984, Examining Officer's Activity Record Updated title to Examining Officer's Activity Record in IMS. Replaced Form 9984 references with Examining Officer's Activity Record. Eliminated most of the alpha list in (6) by adding a link to the Attribute 702 Employee Case/History Documentation page in the Quality Knowledge Base. IRM 4.24.25.5.3, A105 - Administrative Check Sheet Updated title to A105 - Phase I Preplanning Phase Work Sheet. Replaced the A105 reference with the revised published Form 15682-A, A105 - Phase I Preplanning Phase Work Sheet. Provided guidance on what must be documented on the A105. Removed content that was related to other phases of the examination process or obsolete. Removed content about case file assembly (Excise Tax is closing cases electronically). IRM 4.24.25.5.3.1 - Taxpayer's Right to Representation Replaced Form 9984 references with Examining Officer's Activity Record. Updated IRM references and made small plain language edits. IRM 4.24.25.5.3.2, Processing Power of Attorney Replaced Form 9984 reference with Examining Officer's Activity Record. Move the reference to Letter 937 to here from IRM 4.24.25.5.3.2.3. IRM 4.24.25.5.3.2.1, Form 2848, Power of Attorney and Declaration of Representative Replaced Form 9984 reference with Examining Officer's Activity Record. Moved and updated the POA Fax Sheet content to here from IRM 4.24.25.5.3.2.1.2. Moved the reference to Form 2848 instructions to (4) from IRM 4.24.25.5.3.2.1.1. IRM 4.24.25.5.3.2.1.1, Instructions for Form 2848 Deleted this subsection and moved content to IRM 4.24.25.5.3.2.1. IRM 4.24.25.5.3.2.1.2, Fax Sheet Power of Attorney Deleted this subsection and moved content to IRM 4.24.25.5.3.2.1. IRM 4.24.25.5.3.2.2, Form 8821, Tax Information Authorization Replaced Form 9984 reference with Examining Officer's Activity Record. IRM 4.24.25.5.3.2.3, Letter 937, Transmittal Letter for Power of Attorney Deleted this subsection and moved content to IRM 4.24.25.5.3.2. IRM 4.24.25.5.3.2.4, Letter 3254, Representative Appointment Confirmation Letter Deleted this subsection and content is found in IRM 4.24.25.5.3.4. IRM 4.24.25.5.3.4, Letter 2205-A, Initial Contact Updated title to Initial Contact. Reorganized by moving relevant content from IRM 4.24.25.5.6 and IRM 4.24.25.5.13 to here. IRM 4.24.25.5.4, A110 - Excise Tax Plan to Close Check Sheet Updated title to A110 - Phase II Fact Finding Phase Work Sheet. Replaced the A110 reference with the revised published Form 15682-B, A110 - Phase II Fact Finding Phase Work Sheet. Provided guidance on the Fact-Finding Phase of the examination and what must be documented on the A110. Removed content that was related to other phases of the examination process or obsolete. Moved relevant content from IRM 4.24.25.5.6 to here. New IRM 4.24.25.5.4.1 Added title Interview and moved relevant content form IRM 4.24.25.5.7 to here. New IRM 4.24.25.5.4.2 Added title Tour of Business and moved relevant content from IRM 4.24.25.5.7.1 to here. New IRM 4.24.25.5.4.3 Added title Internal Controls and moved relevant from IRM 4.24.25.5.11 to here. IRM 4.24.25.5.5, A115 - Group Manager Concurrence Meeting Check Sheet Replaced A115 reference with the revised published Form 15682-C, A115 - Group Manager Concurrence Meeting Check Sheet. IRM 4.24.25.5.6, A120 - Initial Appointment Check Sheet Updated title to A120 - Phase III Issue Resolution Phase Work Sheet. Replaced the A120 reference with the revised published Form 15682-D, A120 – Phase III Issue Resolution Phase Work Sheet. Moved relevant content to IRM 4.24.25.5.3.4 and IRM 4.24.25.5.4 from here. Provided guidance on the Issue Resolution Phase of the examination and what must be documented on the A120. Removed content that was related to other phases of the examination process or obsolete. IRM 4.24.25.5.7, A125 - Initial Interview Questions and Notes Updated title to A125 - Phase IV Closing Actions Phase Work Sheet. Moved relevant content to IRM 4.24.25.5.4.1. Replaced reference to the A125 with the revised published Form 15682-E, A125 – Phase IV Closing Actions Phase Work Sheet. Provided guidance on the Closing Action Phase of the examination and what must be documented on the A125. Removed content that was related to other phases of the examination process or obsolete. IRM 4.24.25.5.7.1, Tour of Business Deleted this subsection and moved relevant content to IRM 4.24.25.5.4.2. IRM 4.24.25.5.8, B200-1 - Required Filing Checks Prior/Subsequent Period Returns, Related Excise Tax Returns, Filing Verification Updated title to B200-1 - Required Filing Checks and Referrals. Replaced reference to B200-1 with the revised published Form 15682-F, B200-1 - Required Filing Checks and Referrals. Updated EUP reference found on the Excise Tax Knowledge Base. IRM 4.24.25.5.9, B200-2 - Related Excise Tax Returns Consideration Replaced reference to B200-2 with the revised published Form 15682-G - B200-2 - Related Excise Tax Returns Considerations. IRM 4.24.25.5.10, C300 - Book to Return Reconciliation Check Sheet Replaced reference to C300 with the revised published Form 15682-H, C300 - Book to Return Reconciliation Check Sheet. IRM 4.24.25.5.11, C305 - Internal Controls Check Sheet Moved relevant content to IRM 4.24.25.5.4.3. Updated title to C310 - Fraud Awareness Check Sheet and moved content form IRM 4.24.25.5.12 to here. Replaced reference to C310 with the revised published Form 15682-I, C310 Fraud Awareness Check Sheet. IRM 4.24.25.5.12, C310 - Fraud Awareness Check Sheet Moved content to IRM 4.24.25.5.11. Updated the title to E500 - Penalty Check Sheet and Approval and moved content from IRM 4.24.25.5.14 to here. Replaced the reference to E500 with the revised published Form 15682-J, E500 - Penalty Check Sheet and Approval. Incorporated IGM SBSE-04-0925-0040, Interim Guidance for Excise Tax Examination on Timing of Supervisory Approval of Penalties Subject to IRC 6751(b). Removed excessive details and made a reference to the actual source IRM instead. IRM 4.24.25.5.13, D400 - Initial Taxpayer Contact Check Sheet Moved relevant content to IRM 4.24.25.5.3.4. Updated title to Risk Analysis Workpaper and moved content from IRM 4.24.25.5.15 to here. IRM 4.24.25.5.14, E500 - Penalty Check Sheet and Approval Form Deleted this subsection and moved content to IRM 4.24.25.5.12. IRM 4.24.25.5.15, Risk Analysis Workpaper Deleted this subsection and moved content to IRM 4.24.25.5.13. Exhibit 4.24.25-1, Acronyms Added TC (transaction code) to the table. Removed any unnecessary acronyms from the table. Throughout IRM 4.24.25 Fixed all broken links, updated all outdated IRM references and made editorial corrections. Effect on Other Documents This material supersedes IRM 4.24.25 dated November 23, 2021 and incorporates IGM SBSE-04-0925-0040, Interim Guidance for Excise Tax Examination on Timing of Supervisory Approval of Penalties Subject to IRC 6751(b), dated September 23, 2025. Audience This IRM Section (section) is for Small Business/Self Employed (SB/SE) revenue agents (excise examiners), excise tax managers (excise managers) and personnel at Campus Exam/Automated Under Reporter Cincinnati (CEAC) who process excise tax returns (excise returns), excise tax refunds (excise refunds) and excise tax claims (excise claims). Effective Date (12-03-2025) Heather J. Yocum Acting Director, Examination - Specialty Policy Small Business/Self Employed
Program Scope and Objectives
4.24.25.1 (12-03-2025) Program Scope and Objectives Purpose - This section explains the procedures and updates related to the mandatory use of IMS and Notebook and provides guidance for the preparation of workpapers specific to excise returns, excise refunds and excise claims. Audience - This section is for SB/SE excise managers, excise examiners and personnel at CEAC who process excise returns, excise refunds and excise claims. Policy Owner - Director, Examination - Specialty Policy is responsible for the administration, procedures and updates related to the technical guidance and information processing steps and methods specific to Excise Tax Examination issues. Program Owner - Director, Examination - Specialty Examination owns Excise Tax Examination operations. Primary Stakeholders - Appeals, Agency Wide Shared Services, Counsel, Field and Specialty Exam Quality (FSEQ), Large Business and International, and Specialty Exam are the primary stakeholders for this section.
Background
4.24.25.1.1 (11-23-2021) Background Excise examinations are conducted primarily by excise examiners located in field offices. CEAC personnel conduct correspondence excise examinations and assess excise tax penalties. For compliance purposes, it is essential excise managers, senior management officials, excise examiners and personnel at CEAC understand and follow correctly the responsibilities explained in this section regarding IMS, Notebook and the preparation and use of workpapers to ensure appropriate audit procedures are consistently applied, as well as meet quality standards.
Authority
4.24.25.1.2 (11-23-2021) Authority IRM 4.24 provides Servicewide instructions for all operating divisions with employees involved with the correct filing, reporting and payment of excise taxes. IRM 4.24 serves as the foundation for consistent administration of excise taxes by various IRS operating divisions. By providing one source of authority for all operating divisions, the IRS greatly reduces philosophical and procedural inconsistencies. The Excise Tax Program is governed by Policy Statements and other internal guidance that apply to all IRS personnel regardless of operating division. The Policy Statements found in IRM 1.2.1, Servicewide Policy Statements, apply to all excise tax issues and examinations. Excise examiners should review these Policy Statements to properly perform their examination duties. A website, Delegation Orders by Process, summarizes data relating to Delegation Orders contained in the applicable sections under IRM 1.2 in a single, electronic source. Memorandum of Understanding, Mandatory Use of Issue Management System and the Library of Forms Notebook, dated October 22, 2009, establishes a framework for IMS and Notebook requirements. Note: An excise examination case file may require more (or) less documentation than the outlined IMS upload requirements. Deviations from IMS upload requirements must be pre-approved and fully documented by the excise manager.
Roles and Responsibilities
4.24.25.1.3 (12-03-2025) Roles and Responsibilities Director, Examination - Specialty Policy is responsible for Excise Tax Examination policy and procedures. Director, Examination - Specialty Examination is responsible for operational examination compliance activities. Chief, Estate & Gift/Excise Tax is responsible for ensuring the policies and procedures specific to Excise Tax Examination are communicated to and carried out by excise examiners.
Program Management and Review
4.24.25.1.4 (12-03-2025) Program Management and Review Program Goals - The program goals provided in this section are designed to increase compliance with excise tax laws by applying the tax laws with integrity and fairness and to provide SB/SE taxpayers top quality post-filing services for excise taxes administered by SB/SE. Program Reports - Information reporting of program objectives are included on Program Manager Monthly Briefings provided to Director, Examination - Specialty Policy. Program Effectiveness - Program effectiveness is measured by the Exam Quality Review Staff, located in FSEQ. FSEQ supports the SB/SE Quality Improvement Program utilizing National Quality Review System (NQRS) to conduct independent case reviews from statistically valid samples of examination case work. National, area and territory trend analysis on the quality attributes are used to establish baselines to assess program performance, identify opportunities to improve work processes, analyze causes of failure, assess the feasibility of possible solutions and measure the success of quality improvement efforts. Refer to the Excise Tax Embedded Quality Attributes page on the Quality Knowledge Base for more information about quality attributes.
Program Controls
4.24.25.1.5 (12-03-2025) Program Controls Program Manager - Excise Tax Policy is responsible for reviewing annually the information in this section to ensure accuracy and promote consistent tax administration. Refer to IRM 4.24.25.1.4 for information about program goals, reports, and effectiveness.
Terms and Acronyms
4.24.25.1.6 (12-03-2025) Terms and Acronyms Refer to the IDRS Command Code Job Aid page on the SERP (Servicewide Electronic Research Program) website for more information on IDRS Command Codes used throughout this IRM. Refer to Exhibit 4.24.25-1 for acronyms used throughout this section.
Related Resources
4.24.25.1.7 (12-03-2025) Related Resources The Taxpayer Bill of Rights lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. Refer to IRC 7803(a)(3), or to the Taxpayer Bill of Rights. The Taxpayer Advocate Service is an independent organization within the IRS, led by the National Taxpayer Advocate, that helps taxpayers and protects taxpayer rights. TAS offers free help to taxpayers when a tax problem is causing a financial difficulty, when they've tried and been unable to resolve their issue with the IRS, or when they believe an IRS system, process, or procedure just isn't working as it should. TAS strives to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of Rights. TAS has at least one taxpayer advocate office located in every state, the District of Columbia, and Puerto Rico. Procedures, laws and regulations on a wide variety of excise-related examination issues are addressed on the Excise Tax Knowledge Base.
Issue Management System (IMS)
4.24.25.2 (12-03-2025) Issue Management System (IMS) IMS is a computerized tool required for all excise examinations, including Form 637 registration reviews. IMS is designed to initiate, work and close examinations. For purposes of this section, IMS treats a Form 637 registration review as an "examination" although it is not an examination in the traditional sense of the word. Access to IMS is restricted to authorized users. Permission for IMS access is granted through the Business Entitlement Access Request System (BEARS). The majority of excise cases are established in IMS by CEAC using information provided by Excise Case Selection/Workload Selection and Delivery (ECS/WSD) or the Form 637 Registration Group. One exception is when a paper excise claim is sent to an excise group. If the paper excise claim case is not established in IMS, the excise examiner must manually create it in IMS. For more guidance on IMS refer to the LB&I Source page Issue Management System(IMS). This page contains links to IMS Help and IMS Team Website.
Creating a Case in IMS
4.24.25.2.1 (12-03-2025) Creating a Case in IMS A new IMS case can be created from existing ERCS Case Inventory or manually. Note: Under no circumstance is a Form 637 IMS case to be created locally by the excise examiner. The Form 637 Registration Group must create and assign all Form 637 IMS cases to the excise groups. IMS will generate a Case Tree when the case is created. The Case Tree contains auto-populated Case Attributes. The Case Attributes apply to all returns included in the case folder. For the Case Tree, the Case Attributes menu contains the following options: Workpaper Index Entities Note: This is categorized by Returns and Other Type. Team Members Note: This is categorized by IRS and Taxpayer Contacts. Issues Note: This is categorized by Activity Record, IDRs and Workpapers. Documents to Taxpayer Correspondence Letters Useful Links Recycle Bin IMS has features that allow the user to customize the grids displayed on several of the screens. Once the grid is customized, IMS will show the information for all cases in that format.
Entities: Returns
4.24.25.2.2 (12-03-2025) Entities: Returns The Entities section of the case tree is used to show the returns in the case. The Entities screen is where additional returns can be added or copied for a case. ERCS update forms can be created and the taxpayer closing data can be imported from Notebook into IMS. Additional topics relevant to Entities are: View - Edit Entities Manage Entity - Coordinators Populate Closed Dates Populate Planned Close Date Verify Entity Export Taxpayer Entity Data Manage Claim The Returns section of the case tree has two grids, a top and bottom grid. The top grid is the Returns grid, which lists all the Tax Returns within the IMS case. The Returns grid is only a listing of ERCS and manual tax returns already added to the IMS case. It will not include Other Type Entities. The bottom grid is the Returns Document grid, which lists all documents associated to the return highlighted in the Returns grid.
Team Members and Taxpayer Contacts
4.24.25.2.3 (12-03-2025) Team Members and Taxpayer Contacts The IMS Team Members screen is used to add, edit and remove IRS Members contacts from the case. IRS Team Members screen is used to add Team Member, Populate Planned Completion Date, Delete (an IRS Team Member), Customize Grid and Export Grid to Microsoft Excel. Team Coordinator permissions are not automatically given to IRS Team Members but may be granted to each Team Member as appropriate. Team Coordinator Permissions are managed from the Case Attributes screen. Manage Entity Coordinators is managed on the Entities Screen. The Taxpayer Contacts screen portion of IMS is used to add New Taxpayer Contact, Delete Contact, Copy Taxpayer Contact, Customize Grid and Export Grid to Microsoft Excel. Note: The authorized contact person or personal representative contacts are added so they are displayed on the Examining Officer's Activity Record in IMS. Only one contact can be listed for the taxpayer and the taxpayer's representative.
Revenue Protection Codes (RPCs)
4.24.25.2.4 (12-03-2025) Revenue Protection Codes (RPCs) Time spent examining claims is tracked using three different tracking codes. These codes are referred to as Protection of Revenue Base (P of RB). Time spent examining the P of RB issues is separate from regular examination time. The P of RB indicator in ERCS allows tracking of claim examinations. On IMS, these indicators are Revenue Protection Codes (RPCs). The three codes are: N = Neither (i.e., no claim filed) − Used when there is no filed request for refund. "N" applies to regular examination activities prior to any request for refund. Once there is a request for refund, all subsequent time charges should be made to either "P" or "R." P = Claims Issues (Protection) – Used to record time spent protecting the revenue base (i.e., working the claim issue). Excise examiners cannot charge "N" and "P" time for the same return; however, "N" can change to "P" during an examination when the issue is identified from the Entities Screen. R = Related – Used to record time spent examining regular (non P of RB) issues on returns where a claim has been filed. ERCS allows time charges to "P" and "R" for the same return on the same day. Once an excise examiner charged either "P" or "R" time to a return, ERCS will no longer allow "N" time to be charged. The "N" time charges become invalid and will be converted to "P." Once a protection code issue is identified, IMS users should refer to IMS Help under Update RP Code for assistance. RPC's are no longer modified at the issues level. Issue changes are done on the Entities screen when a claim is filed. All Issues related to the claim must be identified and edited for the claim amount. The RPC for the claims will change from an "N" to a "P" and the remaining issues will change to an "R." Any additional issues created will show an "N" until the case is synchronized and then "N" will change to "R." Manually entered claims will automatically change when the ERCS case is updated to the IMS case.
Standard Audit Index Number (SAIN) Codes
4.24.25.2.5 (12-03-2025) Standard Audit Index Number (SAIN) Codes Time is charged to the issues identified in the case. Issues are classified by selecting a Standard Audit Index Numbers (SAIN) or a number from the Uniform Issue List (UIL). Generally, the SAIN relates to how an issue is reported on a return. Tracking issues using both the SAIN and the UIL number will allow the IRS to plan and allocate resources more efficiently. Consequently, at least one SAIN and one UIL number must be selected for each return within a case. Excise examiners will use their professional judgment to determine the appropriate SAIN codes to apply to the case issues. SAIN codes will be entered for case issues; however, all mandatory and administrative workpapers will be associated with the Administrative SAIN code. For situations where an excise examiner spends a significant amount of time on a particular issue, the time charged should be associated with the SAIN code for that issue. In situations where a case is not started on IMS and therefore time needs to be entered retroactively, these time charges may be input in IMS in blocks of up to 99 hours and a specific SAIN code need not be identified. An Administrative Issue (EX080) and Case Issues (Classified Issues for Issue Tracking and Feedback Form purposes) are required on all cases. An Administrative Issue (EX080) is created automatically. All case issues (classified issues) for the return and major issues that were not classified in the case file (i.e., any issues in the case that resulted in significant time expenditures regardless of change that was not identified during classification) must be added. Administrative Issues and Case Issues may be established for the Team Coordinator or assigned to other Team Members. From the Add Issue screen, select the Team Member to be assigned to the issue from the drop-down list. IMS defaults to the user adding the issue and can be changed by clicking the drop-down list and selecting a different Assigned Team Member. In the Add Issue Screen, enter the date the examination began in the Start Date and one year out for the from the Start Date for the End Date field. Having the dates consistently entered will keep the detailed case issue(s) from being displayed when time is entered into the time sheet screen.
Uniform Issue List (UIL)
4.24.25.2.6 (12-03-2025) Uniform Issue List (UIL) The UIL number relates the issue or SAIN to the applicable primary section. If not already populated in the Add Issue screen, add a UIL code that corresponds to the Issue from the pull-down menu. A UIL Code is required to close all cases off IMS. The Search UIL screen enables users to find the correct UIL code for the issue without scrolling through the entire UIL listing. To limit the number of UIL codes displayed, enter an Internal Revenue Code section in the Code box and/or a description of the issue in the Description box and click on the Search button. Select the appropriate UIL code for the issue from the grid and click OK to add the UIL code to the issue. Access this screen by clicking the Find UIL button on the Add Issue or Issue Details screen.
Uploading Documents to IMS
4.24.25.2.7 (12-03-2025) Uploading Documents to IMS The excise examiner will export entity data from IMS into Notebook or manually input case specific information into Notebook and generate the appropriate mandatory workpapers, lead sheets and letters. The excise examiner will then upload these documents into IMS from Notebook. The excise examiner will upload applicable source documents to support the examination findings. IMS lead sheets and workpapers should support the audit trail. Mandatory workpapers and all supporting documents should be maintained within IMS; however, when warranted, the excise examiner may obtain and document managerial authorization to deviate from IMS/Notebook guidance. To ensure consistency, all excise examiners will maintain Information Document Requests (IDRs) within IMS, including annotating the Form 4564, Information Document Request, as appropriate (e.g., Date IDR Issued, Information Due Date).
Charging Time on Cases/Returns and Issues
4.24.25.2.8 (12-03-2025) Charging Time on Cases/Returns and Issues To charge time to a case within IMS, issues will be entered for each tax period and issue examined. The time spent on the case will be charged to the examined EX issue(s) that are reflected on the key return(s), as appropriate. Each return or claim must have time charged except when the return is closed using a non-examined disposal code, such as Disposal Code "32" or "34." Note: Time must be charged for each abstract examined. For charging time, refer to IRM 4.9.1.7.2, Time Input on ERCS and IMS, through IRM 4.9.1.7.2.2, Inputting Time into IMS. The Examination Returns Control System (ERCS) Group Handbook also addresses ERCS time entry and fractional hours. The Time Sheet in IMS Client allows the IMS user to enter all categories of daily time applied, including case time and below the line (BTL) time. Note: Time can be in increments of .3 = 15 minutes, 0.5 = 30 minutes, 0.7 = 45 minutes or in hourly increments. The Examining Officer's Activity Record in IMS Client is used to document each action taken on the Entity/Return issues. Documentation should include the date, location, contact, time charged and an explanation of each activity. The activity record should provide a complete and concise case history. Recordation of events should be made by excise examiners or other employees responsible for activity on the case as warranted (e.g., excise managers, team members, etc.).
Closing Cases in IMS
4.24.25.2.9 (12-03-2025) Closing Cases in IMS To close a case in IMS the excise examiner will take the following actions on the Edit Entity screen: Access the Edit Entity screen from the Entities section. Double click on an entity period. This will open the Edit Entity screen. Complete the Disposal Code field under the ERCS Data Tab. This will activate the Entity Closing Data Tab. Complete the appropriate adjustment information under Issue Closing Data Tab for each issue. Complete the Entity Closing Data Tab with applicable data. If a data field is not applicable to the return, enter zero in the field. Note: Amount Claimed cannot be edited. The Amount Claimed field is populated from ERCS. Note: Complete the IRC section, Penalty and Penalty Abatement data fields, if applicable. Zeros are not required in these data fields, if they are not relevant or applicable to the return. Note: Reference Form 5384 or Form 5385 and penalty workpapers generated from Notebook to complete these entries. Complete any applicable fields on the 5344 Data Tab. Note: There will be an Edit Entity screen for every return/period in the IMS case. The case will not close in IMS until this closing data is entered for each return on the Issue Data screen. The excise examiner must also add return closing documents under Entities section to close a case in IMS. The excise examiner must select Returns and then select the Add Return Documents icon (which is the + symbol). There may be different types of closing documents (e.g., Form 3198, Form 5344, Form 5351 or Form 8278 ). Certain closing documents are required for each return period. For example, a Form 5344 is entered for each return period, but a Form 3198 is only entered for the primary period. Note: Every return period in the IMS case must have the required closing documents or the case will not close in IMS. Synchronize and check in all checked out items. Once all closing data is entered under the Entity tab and closing documents are created in the Entities/Returns, the excise examiner must enter the closing date in Case Attributes and populate the closing date in Entities. Excise examiners must close their cases in IMS to correspond with closure of the electronic case file to the excise manager. Excise managers can then perform their reviews and indicate concurrence with the closure of cases from the group using the Manager Concurrence feature on the Team Website (TWS) and selecting yes. These timely steps allow other stakeholders (e.g., Appeals, Technical Services, FSEQ and Centralized Case Processing) to access cases electronically in IMS/TWS. IMS case closing procedures and processes are described in more detail in EX IMS course books, job aids, and check sheets. Refer to IRM 4.24.21.4.1, Electronic Issue Management System Closing, for additional information.
Synchronization
4.24.25.2.10 (12-03-2025) Synchronization Synchronization is the process of transferring specific information and documents to/from the excise examiner's computer and the IMS Server. Once the synchronization is complete, any information and documents synchronized on the excise examiner's computer will be identical to the information and documents on the IMS Server. There are five types of synchronizations performed in IMS: Summary ERCS Case (Express or Detailed) Time Sheet Reminder Summary Synchronization downloads the case information for any case for which the user is a Team Member or Manager. ERCS Synchronization downloads the return data assigned to the user in ERCS. IMS receives a download from ERCS nightly. ERCS changes made in IMS will not appear in ERCS. If information from ERCS is incorrect, the excise examiner should complete Form 5348, AIMS/ERCS Update, to change the data on ERCS. The ERCS record will be updated and downloaded through the ERCS synchronization. If the recorded Taxpayer Identification Number (TIN) is incorrect in ERCS, the excise examiner must complete Form 5351 to dispose the wrong record on ERCS. Excise examiners can also establish a new record on ERCS with the correct TIN using Form 5345-D, Examination Request - ERCS (Examination Return Control System Users). Case Synchronization allows the excise examiner to ensure that all uploaded work is saved to the IMS Server in the event of computer failure. Case specific information such as Issues, Information Document Requests (IDRs) and Workpapers upload and download using the Case Synchronization process. Excise examiners must run an IMS case synchronization at least once every week that they have taken action on a case. Excise examiners are not required to synchronize a case if no action was taken on that case since the last synchronization. The excise examiner will also check-in and synchronize all case documents at the time the case is closed. Time Synchronization − The IMS timekeeping system will track Direct Exam Time, Miscellaneous Direct Exam Time (MDET) and BTL time. To input time on a return, the user must have created issues for the return. All Direct Exam Time applied on IMS is by EX-Issue, SAIN and UIL code. The time needs to be on the IMS Server by Thursday at 8:00 p.m. EST. Note: Time entered in IMS and not entered in ERCS will transfer. Corrected time does not transfer from IMS to ERCS after time for that period has been synchronized and transferred. The user must communicate any time sheet correction made to a time charge in IMS that transferred to ERCS with the timekeeper. Reminder Synchronization − The IMS Reminder menu is located on the IMS Toolbar. Users may view, edit, add, delete, activate or deactivate reminders. Others cannot view an excise examiner's reminders. IMS also generates system reminders. The user should run a Reminder Synchronization to view the IMS generated reminders. These system reminders include: A reminder five days prior to the end of each ERCS monthly reporting cycle. A reminder for any case not having a new activity record (or modifying an existing activity record) or a case comment on a particular case for more than 25 days.
Other IMS Issues, File Size, File Limitations and Encryption Policy
4.24.25.2.11 (12-03-2025) Other IMS Issues, File Size, File Limitations and Encryption Policy Do not add/import/upload large files (over 40 megabytes per file) to IMS. Do not import databases of any size (e.g., a Microsoft Access file) or IRS databases (e.g., IRPTR-I or IRAS). Excise examiners may add/import/upload reports generated from databases. Do not import zipped files of any size; they cannot be unzipped within IMS. Do not import password-protected files; they are not viewable on the Team Website. Excise examiners may add/import/upload encrypted files directly from the Sensitive But Unclassified folder in IMS.
Guide for Using Notebook
4.24.25.3 (11-23-2021) Guide for Using Notebook Notebook is a mandatory computerized tool that guides and directs users in preparing tax reports and documents, which creates mandatory administrative and lead sheets addressed in the paragraphs below. Notebook, which is used in all excise case work, pre-populates many of the headers and footers on workpapers and the contact information on letters. Documents are imported into IMS from Notebook by excise examiners and should be organized in a logical manner. Notebook contains: Audit Technique Guides Standard Forms and Letters Mandatory and Discretionary Administrative Forms Issue Lead Sheets Reference Materials Suggested IDR Language (for some Excise issues) Note: If an excise examiner has an issue with Notebook forms, letters or rates, notify the Notebook Policy Analyst and copy the Excise Tax Policy Program Manager on the communication.
Workpaper Preparation: The General Process
4.24.25.4 (12-03-2025) Workpaper Preparation: The General Process Issue-specific workpapers, letters, forms and other documents are generated and imported from Notebook into IMS as a part of the pre-audit process. All excise examiners must have access to Notebook. Workpaper preparation is generally completed within IMS. The workpapers should be completed contemporaneously with the excise examination process. Note: IMS has a synchronization feature that saves the excise examiner's work to the IMS Server automatically. The information saved at the IMS Server is protected from loss. Notebook can be accessed by clicking on the Notebook desktop icon. The excise examiner may create a case in Notebook by exporting data from IMS or by establishing it manually in Notebook. Once a case is created, the excise examiner must select the appropriate Mandatory Admin Forms from one of six available drop-down menu choices: 637 Admin Forms 720CS Admin Forms 720TO Admin Forms CIC Admin Forms FCO Admin Forms POA Admin Forms RA Admin Forms Note: The POA Admin Forms are classified as mandatory only if an active valid POA is on file. The selection of Mandatory Admin Forms will deploy the appropriate Excise Tax Case Lead Sheets (lead sheets) also known as Excise Tax Case Check Sheets (check sheets). The lead sheets are tailored to the type of excise tax case being examined. Note: The Mandatory Admin Forms are not uniform among the drop-down menu choices (1-7). Therefore, it is essential the excise examiner choose the appropriate area of classification. Note: The Mandatory Admin Forms folder contains the RA Admin Forms folder, which contains the Examination Forms and Initial Contact Letters folders. The content of these folders is discussed in the subsections that follow. Refer to the IRM sections listed in the table below for more information about the mandatory admin forms required for use in other case workload types: Workload Type Section Fuel Compliance Officer Inspections IRM 4.24.13, Overview of Excise Fuel Compliance Program, IRM 4.24.14, Excise Fuel Compliance Safety, Uniform and Motor Vehicle Requirements, IRM 4.24.15, Excise Fuel Compliance Inspection, Sampling and Shipping Coordinated Industry Examinations IRM 4.24.5, Large Business and International (LB&I) Examination Program Procedures for Excise Employees Form 637 Registration Cases IRM 4.24.2, Form 637 Excise Tax Registrations, IRM 4.24.23, Form 637 Registration and Secure Airport Terminal Operational Procedures and Functions, IRM 4.24.24, Form 637 Registration Files - Administration and Required Documentation ExSTARS Compliance Examinations IRM 4.24.17, Excise Summary Terminal Activity Reporting System (ExSTARS) Compliance Examination Procedures The excise examiner may access additional resources by selecting "NB Menu" in the Excise Tax IMS Notebook, and then "References" (e.g., Audit Guides, Rate Reference, FCO Tool Kit, RA Tool Kit and Forms Library Updates). For each option, the excise examiner will find reference materials useful in successfully completing the appropriate lead sheets.
Workpaper and Lead Sheet Expectations
4.24.25.5 (11-23-2021) Workpaper and Lead Sheet Expectations Use of lead sheets helps the excise examiner meet all workpaper requirements. The use of non-standard workpapers does not relieve the excise examiner from meeting workpaper requirements. Properly prepared workpapers must provide adequate documentation to support conclusions. Sufficient documentation allows reviewers to verify whether the scope of the excise examination is appropriate or the basis of a proposed adjustment is accurate. The excise examiner should always cite legal authority to support the conclusions (e.g., IRC sections, applicable regulations, court cases, revenue rulings and/or revenue procedures). Workpapers and reports must be neat, legible, clear and concise and are an important aspect of the overall quality of the examination. Workpapers and lead sheets must contain headers that identify: Taxpayer Name TIN Tax Period Examined Date Workpapers were Prepared, or Start and End date of Examination Phase Name or Initials of the Excise Examiner Issues or Items Examined (lead sheets) Workpapers must be indexed and numbered. If an issue cannot be fully explained on the specific issue Lead Sheet, supporting workpapers must be prepared, indexed and identified as an attachment to the respective Lead Sheet. Supporting workpapers provide detailed explanations, analyses, schedules and/or computations. The number of supporting workpapers prepared during an excise examination depends on the size and complexity of the entity, as well as, the number and type of issues developed. While no fixed requirement exists to include specific schedules or analyses in the supporting workpapers, the excise examiner must include suitable and appropriate information to support the conclusion documented on the lead sheet. Any notes taken during interviews conducted must be included in the case file as additional support for the final case resolution. Workpapers should reflect actual accomplishments during the excise examination. The workpapers should exclude unnecessary documentation or data. For example, copies of the Certified Public Accountant's workpapers or reports should not be included in the workpapers, if they do not contribute to the development of an issue. The excise examiner's personal opinions relating to a taxpayer are not appropriate. Case file workpapers are included under the Freedom of Information Act. If the case was initiated by a referral, the excise examiner must include a copy of the referral from the Specialist Referral System in the IMS MFT B5 case file.
Form 15682, Excise Workpaper Index
4.24.25.5.1 (12-03-2025) Form 15682, Excise Workpaper Index Form 15682, 000 - Excise 15682 - Workpaper Index, refers to the examination workpapers cover sheet that indexes the lead sheets, issue workpapers and supporting workpapers (e.g., appointment letters, IDRs, correspondence, case building materials, etc.) for each excise examination case file. Adjustments reported on Form 5384, Excise Tax Examination Changes and Consent to Assessment & Collection, and/or Form 5385, Excise Tax Examination Changes, are documented on Form 15682. The explanations must correspond chronologically to the issue workpapers and supporting workpapers.
Examining Officer's Activity Record in IMS
4.24.25.5.2 (12-03-2025) Examining Officer's Activity Record in IMS The Examining Officer's Activity Record, is generated in IMS under the Time Reports feature. The excise examiner must document each substantive action taken on a case on the Examining Officer's Activity Record in IMS. It is required for uniform case file documentation of examination activities, NQRS case reviews, determining whether taxpayers cooperated fully with reasonable requests for information and the possibility of responding to a taxpayer's claims for interest abatement under IRC 6404. In some situations, the Examining Officer's Activity Record will reference other workpapers or relevant lead sheets for more detail. Note: Appropriate documentation on lead sheets does not need to be repeated on the Examining Officer's Activity Record. The Examining Officer's Activity Record should be prepared contemporaneously with the actions taken on the case and provide a complete and concise case history. It chronicles all substantive actions taken during the course of an examination by excise examiners, excise managers, clerical support staff, the taxpayer and/or the representative. Alternatively, in lieu of the Examining Officer's Activity Record, excise managers may use the Case Level Activity Record feature at the IMS Team website. All entries on the Examining Officer's Activity Record should be written factually and professionally. It is used to document activity including the date of the activity, location of the activity, contact code, time charged and remarks and/or substantive actions taken. Entries on the Examining Officer's Activity Record should not be so brief as to be meaningless, i.e., "worked on case." If no significant activity occurs on a case for 45 days, the excise examiner must provide a written comment on the Examining Officer's Activity Record fully explaining why this occurred and whether the delay was communicated to the affected parties. Significant activity includes any activity where the excise examiner performed substantial work that moved the case toward a conclusion. This does not include telephone calls to or from the taxpayer to cancel or change an appointment. It would, however, include telephone calls if issues were discussed that helped move the case toward a conclusion, such as appointments were arranged, information requested, research conducted, etc. This requirement includes leave and extended temporary detail assignments. Each action taken on the case must be documented on the Examining Officer's Activity Record or the Case Level Activity Record feature in IMS. These actions include but are not limited to the "Points to Consider" in Attribute 702 Employee Case/History Documentation page in the Quality Knowledge Base. In addition to actions mentioned in Attribute 702, excise examiners must document: Pre-contact examination steps. Note: Refer to IRM 4.10.2.8, Initial Contact: Overview, for additional information about initial contact with taxpayers. Any evaluation of collectibility and any decision to survey or examine a return. Significant travel time to and from the examination location. Verification the taxpayer and/or the representative has the excise examiner's correct name, telephone number and unique employee identification number at the inception of the examination. Confirmation of taxpayer receipt of Pub 1, Your Rights as a Taxpayer, Notice 609, Privacy Act Notice, and the related discussion held with the taxpayer and/or the representative. Reasons for expanding or contracting the examination and the related discussions with the excise manager. The completion of the required filing checks, actions taken and the decisions made by the excise examiner, including internal documents secured and any analysis performed or workpapers created by the excise examiner in making this determination. Note: If the required filing checks are not completed, the excise examiner must document the reasons why and the extent of managerial involvement. If the facts and circumstances warrant the assertion of penalties, related actions and decisions. If a deficiency results, the discussions about the solicitation of payment and payment options.
A105 - Phase I Preplanning Phase Work Sheet
4.24.25.5.3 (12-03-2025) A105 - Phase I Preplanning Phase Work Sheet The Pre-Planning Phase of the examination includes the time charged prior to the first appointment. If there was no appointment, this includes the time charged up to the date when records were first received/reviewed. This work paper should be completed contemporaneously with the Pre-Planning Phase of the excise examination process. The excise examiner must use Form 15682-A, A105 - Phase I Preplanning Phase Work Sheet, to document and address the following: Statute of Limitations, refer to IRM 4.24.6, Technical Guidance and Information Processing for Excise Tax Examination Issues Collectability, refer to IRM 4.20.1, Examination Collectibility Procedures Pre-contact Analysis, refer to IRM 4.10.2, Pre-Contact Responsibilities Large Unusual or Questionable (LUQ) Items, refer to IRM 4.10.2 Consideration of Form 637 Registration, refer to IRM 4.24.2, Introduction to Form 637 Excise Tax Application for Registration for Certain Excise Tax Activities, IRM 4.24.23, Operational Procedures and Responsibilities for Form 637 Excise Tax Registrations and Secure Airports Terminals (SATs), and IRM 4.24.24, Form 637 Registration Files: Administrative Procedures for Initial Applications and Case Reviews. Initial Taxpayer Contact, refer to IRM 4.10.2.8 and IRM 4.24.25.5.3.4 Initial Telephone Conversation to Schedule Initial Appointment, refer to IRM 4.10.2 Note: Import, prepare and mail the approved taxpayer and/or the representative an appointment letter. Refer to IRM 4.10.2.5.5, Surveying International Feature Returns, for exceptions for international excise examination cases. Note: If the appointment must be scheduled or re-scheduled beyond 45 days after the initial contact, managerial involvement must be documented in the case file. Power of Attorney (POA) and Taxpayer Information Authorization (TIA) Miscellaneous Procedural Actions (e.g., Master File updates) Excise examiners need to be aware of the Potentially Dangerous Taxpayer and Caution Upon Contact Programs. Refer to IRM 25.4.1, Potentially Dangerous Taxpayer, and IRM 25.4.2, Caution Upon Contact Taxpayer.
Taxpayer's Right to Representation
4.24.25.5.3.1 (12-03-2025) Taxpayer's Right to Representation Taxpayers have the right to retain an authorized representative at any time during an examination. Both excise managers and excise examiners are responsible for ensuring this right. Refer to IRM 4.10.1.2.1.9, Right to Retain Representation. Prior to issuing Letter 2205-A, Initial Contact, excise examiners must determine if a valid POA is on file for the tax periods under examination. If a Transaction Code (TC) 960 is posted to the account, the excise examiner must secure a Command Code (CC) CFINK and include it in the file. If a valid POA is on file for the tax periods under examination, Letter 2205-A should be mailed to the taxpayer and a copy to the POA using Letter 937, Transmittal for Power of Attorney. Refer to IRM 4.10.2.8.1, Making Initial Contact. The excise examiner must be willing to communicate with any POA authorized by the taxpayer. Refer to IRM 4.10.2.9.1(3), Scheduling the Initial Appointment with the Taxpayer and/or Representative. When a taxpayer has executed a valid POA, the taxpayer's presence at the interview cannot be required without the issuance of a summons. However, the POA must demonstrate first-hand knowledge of the taxpayer's business operations and provide reliable information to the questions asked. Refer to IRM 4.11.55.3.1, Taxpayer's Presence Required. If the taxpayer states during the interview that they wish to consult with a representative, the interview must be suspended to allow 10 business days to consult or secure representation. Refer to IRM 4.10.3.4.5.2, Request for Representation - Suspension of Interview; see exception. Excise examiners must document requests to consult or secure representation on the Examining Officer's Activity Record or the appropriate workpapers.
Processing Power of Attorney
4.24.25.5.3.2 (12-03-2025) Processing Power of Attorney The excise examiner should check Centralized Authorization File (CAF) using the Integrated Data Retrieval System (IDRS) CC CFINK to determine if a POA exists for the taxpayer and for which types of tax returns and periods. This action should be documented and the finding documented on the Examining Officer's Activity Record in IMS. Note: POAs for Form 637 and Form 8849 are not posted to CC CFINK in IDRS. If the taxpayer retained representation, the excise examiner must select the POA Admin Forms and deploy the appropriate POA lead sheets. Letter 937 transmits copies of correspondence addressed to the POA.
Form 2848, Power of Attorney and Declaration of Representative
4.24.25.5.3.2.1 (12-03-2025) Form 2848, Power of Attorney and Declaration of Representative Form 2848, Power of Attorney and Declaration of Representative, authorizes an individual to represent the taxpayer before the IRS. The individual authorized by the taxpayer must be a person eligible to practice before the IRS. The eligible individuals are listed in Part II, Declaration of Representative, items a-h. For guidance about fax signatures, refer to IRM 4.11.55.2.6.1, Form 2848 - Power of Attorney and Declaration of Representative. The excise examiner will process Form 2848 to the CAF as soon as possible or within 24 hours of the receipt date. Delays should be documented on the Examining Officer's Activity Record. If the POA is not properly executed, return it to the taxpayer for corrections and document the Examining Officer's Activity Record. Note: Fax cover sheets are automatically generated when using EEFax. If EEFax is not available, prepare a fax cover sheet manually. Requirements for faxing are found on the Disclosure and Privacy Knowledge Base, Faxing page. The excise examiner will check CC CFINK to ensure Form 2848 was processed by the CAF. Note: If this did not occur, the excise examiner will re-submit Form 2848 and re-check CC CFINK to ensure the document was processed by the CAF. For guidance about Form 2848 and the POA, refer to IRM 4.11.55.2.6.1 and the Instructions for Form 2848, Power of Attorney and Declaration of Representative.
Form 8821, Tax Information Authorization
4.24.25.5.3.2.2 (12-03-2025) Form 8821, Tax Information Authorization Form 8821, Tax Information Authorization, provides the authority for any individual, corporation, firm, organization or partnership designated by the taxpayer to inspect and/or receive confidential information for the type of tax returns and the years or periods authorized. The taxpayer must include all of the information requested on Form 8821. If incomplete, the excise examiner must return it to the taxpayer for corrections and document the Examining Officer's Activity Record accordingly. Form 8821 is not used to appoint a representative. Refer to IRM 4.11.55.2.6.2, Form 8821 - Tax Information Authorization.
Pre-Audit Issues Collectibility
4.24.25.5.3.3 (11-23-2021) Pre-Audit Issues Collectibility ECS/WSD uses collectibility factors to determine if a case should be selected for examination. Cases selected for field examination that have known collectibility issues are identified on the Classification Checksheet included in the case file. The Classification Checksheet also documents how the collectibility problem was overcome (with ECS/WSD Management support) to justify case selection for field examination. This information is found in the Classification Checksheet Field Notes section. Collectibility must be considered when setting the scope of an examination. Collectibility is based on current financial condition and not the tax return reflecting the taxpayer's earlier financial condition. Excise examiners must document collectibility evaluation during the pre-planning phase of the examination using A105. Refer to IRM 4.20.1.2.1, Examination Collectibility, Examination Collectibility Procedures, Collectibility Considerations, for collectibility indicators and steps to take when evaluating collectibility potential during the pre-planning phase. The excise examiner should obtain a CC AMDIS with definer A (AMDISA) print, which will display collectibility indicators such as: BANKRUPTCY (taxpayer is currently in bankruptcy or bankruptcy discharge in a prior period) CURNOTCOLL (prior period was closed as currently not collectible) COLLSTCD26 (open collection status, i.e., assigned to revenue officer, automated collection, or is in collection queue) Offer-In-Compromise (OIC) Pending If collectibility indicators are present or there are reasons to believe the taxpayer has liabilities outstanding for other tax periods, CC SUMRY, CC IMFOLI (for information on sole proprietor or individual account balances) or CC BMFOLI should be obtained. They reveal any previous tax periods with account balances. A CC TXMODA for those tax periods reveals account activity. If TC 480 is present on any of the modules, an OIC is under consideration. The group and employee number of the revenue officer charged with the account is reflected on CC TXMODA. Not all taxpayers lacking the means to satisfy additional tax liabilities are identified. Excise examiners should be alert for indications in the case file that collectibility may be a consideration (i.e., the taxpayer is deceased, the taxpayer is a defunct corporation and/or the issue of transferee liability is not present). Form 9439, Collectibility Evaluation Form, may be used to accurately document collectibility. If collectibility is an issue for an assigned case, alert the excise manager as soon as the issue is discovered. Excise managers will make the final determination whether to survey the return or to limit the examination scope/depth. A return may be surveyed due to an absolutely uncollectible assessment or subjected to a limited scope examination when there is lack of collectibility. Returns should not be surveyed based solely on collectibility when a limited examination has the potential for developing leads to other non-compliant taxpayers or for cases involving fraud or special cases referred by Counsel.
Initial Contact
4.24.25.5.3.4 (12-03-2025) Initial Contact Excise examiners must follow the initial contact procedures described under IRM 4.10.2.8.1, Making Initial Contact. All initial taxpayer contacts must be made by mail. For this reason, the excise examiner will issue Letter 2205-A, Initial Contact Letter, or Letter 2205-E, Excise Initial Contact, with Pub 1 and Notice 609. Prior to contacting the taxpayer, the excise examiner must determine if a POA is on file before mailing Letter 2205-A or Letter 2205-E. Note: Letter 2205-E was prepared to respond to challenges created by the COVID 19 pandemic that could impact the taxpayer's ability to effectively prepare for an examination. If facts and circumstances warrant the use of this letter, excise examiners may issue it in lieu of Letter 2205-A. If a valid POA is on file, refer to IRM 4.24.25.5.3.1. The initial IDR is not issued with the initial contact letter except for situations involving excise international examinations. The IDR is instead sent with the appointment confirmation letter after contact with the taxpayer is established and the appointment is scheduled. Note: When the taxpayer responds to the initial contact letter, the excise examiner will follow the A105 and address all required information. If the taxpayer responds timely, issue Letter 3253, Taxpayer Appointment Confirmation, to confirm the appointment. Note: If the taxpayer has an authorized representative, then the initial appointment for an examination is confirmed on Letter 3254, Representative Appointment Confirmation. The letter is used for individual, corporate, partnership or other types of tax returns. If the taxpayer fails to respond to the initial contact letter after 14 calendar days, and it was not returned as undeliverable, refer to IRM 4.10.2.8.3, No Response/No Show Procedures. If the initial contact letter or certified (or registered) return receipt is returned undeliverable, refer to IRM 4.10.2.8.4, Undeliverable Initial Contact Letters.
A110 - Phase II Fact Finding Phase Work Sheet
4.24.25.5.4 (12-03-2025) A110 - Phase II Fact Finding Phase Work Sheet The Fact-Finding Phase of the examination includes the time charged beginning with the first appointment and/or first review of records, if there is no initial appointment, through the last fact-finding activity. This work paper should be completed contemporaneously with the Fact-Finding Phase of the excise examination process. The excise examiner must use Form 15682-B, A110 - Phase II Fact Finding Phase Work Sheet, to document and address the following: Initial Interview, refer to IRM 4.10.3 Note: Obtain the excise manager's audit plan concurrence within 30 business days after initial appointment if case is not closed. General Interview Ownership and Related Entities Tour of Business Internal Controls Miscellaneous Procedural Actions (e.g., scope, fraud, summons, whipsaw issues, third party contacts, etc.) At the beginning of the initial appointment, the excise examiner will discuss and document the following: The mutual responsibilities (i.e., what the taxpayer can expect from the excise examiner and what the excise examiner can expect from the taxpayer). The excise examiner's availability to meet and resolve issues, the normal working hours of the excise examiner and the contact information for the excise manager, including name, address and telephone number. The excise examiner will discuss the excise examination issues and explain the scope of the excise examination may expand as additional issues arise. Prior to concluding the initial appointment, the excise examiner will work with the taxpayer and/or the taxpayer's representative to set the MCD. Consideration must be given to the number of expected field visits, the availability of the excise examiner and the taxpayer. Every effort should be made to complete the excise examination as soon as possible. Note: If the MCD is later changed by more than 30 calendar days, the excise examiner must discuss the new date with the excise manager and the taxpayer.
Interview
4.24.25.5.4.1 (12-03-2025) Interview If not already addressed during the pre-contact phase of the excise examination, the excise examiner must take the following actions during the initial interview: Verify the taxpayer's receipt of Pub 1 and Notice 609. Briefly describe the rights described in Pub 1 and Notice 609 and respond to any questions. Briefly describe the excise examination process and inform the taxpayer and/or the representative of the options available for resolving unagreed cases. Document confirmation of receipt of Pub 1 and Notice 609 and the discussion held with the taxpayer and/or the representative on Examining Officer's Activity Record in IMS. Interviews provide information about the taxpayer's financial history, business operations, use of internal controls and books and records not available from other sources. Interview questions are planned to address items specific to the taxpayer under excise examination. The type of return and relevant facts and circumstances need to be considered in the interview plan. Interviews should be documented in sufficient depth to give a clear understanding of the taxpayer and the taxpayer's operations. Interviews should obtain the information needed to make informed judgments about the scope and depth of the excise examination and to correctly resolve issues. Questions specific to the abstracts should be incorporated into A110. Note: The completion of A110 does not necessarily constitute a complete interview. Appropriate follow-up questions should be asked. The person interviewed should have sufficient knowledge of the taxpayer's operations to answer questions. Adequate narrative and specific abstract commentary is essential. Excise examiners need to follow the interview guidance contained in IRM 4.10.3.3, Examination of Returns, Examination Techniques, Interviews: Authority and Purpose.
Tour of Business
4.24.25.5.4.2 (12-03-2025) Tour of Business Tours of business sites should be conducted during examinations of all business entities. Touring the business as part of the initial interview process helps the excise examiner obtain a better understanding of the taxpayer's operations and business flow. Generally, the principal location and any pertinent locations acquired during the period under excise examination should be visited. However, consideration should be given to the cost effectiveness and practicality of conducting the tour. Consideration should be given to the taxpayer's right to privacy, which under the Taxpayer Bill of Rights, ensures any inquiry or excise examination will be no more intrusive than necessary. When appropriate, alternatives should be considered. The excise examiner needs to document all findings and conclusions on the A110. Refer to IRM 4.10.3.5, Tours of Business Sites and Inspection of Residences, for more guidance. Regardless of where an examination takes place, the IRS may visit the taxpayer's place of business to establish facts that can only be established by direct visit. Refer to Treas. Reg. 301.7605-1(d)(3)(iii).
Internal Controls
4.24.25.5.4.3 (12-03-2025) Internal Controls An analysis of internal controls must be performed to assess the level of control risk. It is important to obtain sufficient evidence to determine the accuracy of the taxpayer's return(s). The examiner must determine the appropriate amount of evidence to accumulate and establish the proper depth of the excise examination. This decision is a matter of judgment and importance because of the prohibitive cost of examining and evaluating all available evidence. Factors to consider when establishing the depth of the excise examination include: The risk of taxpayer errors that are individually or collectively material. The risk that excise examination tests will fail to uncover material errors (e.g., the excise examination techniques used, the nature of the errors (intentional or unintentional) and the reliability of available evidence). In addition to selecting an overall internal controls assessment on the A110, the examiner must provide either a flowchart of key business operations or document in narrative form (with sufficient detail) a summary of the analysis. If an attachment is needed, provide the work paper reference. Examples of areas to be assessed include (but are not limited to): Overall company structure and assignment of responsibilities related to excise tax. Accounting system utilized and how transactions flow to the excise return. The taxpayer's filing process for reporting excise tax or claims.
A115 - Group Manager Concurrence Meeting Check Sheet
4.24.25.5.5 (12-03-2025) A115 - Group Manager Concurrence Meeting Check Sheet Form 15682-C, A115 - Group Manager Concurrence Meeting Check Sheet, documents the group manager concurrence meeting (GMCM). This occurs between the excise examiner and the excise manager within 30 business days after the initial meeting with the taxpayer or the first receipt of information from the taxpayer in a correspondence case. The GMCM will cover the: Initial appointment meeting with the taxpayer or the first receipt of information from the taxpayer in a correspondence case. Reasonableness of the MCD established. Accomplishments and planned actions for completing the case. Issues identified. Location of the examination work. Concerns or barriers to closing the case. Note: In situations where it takes more than one meeting with the taxpayer to complete the planning tasks, the GMCM should be scheduled 30 business days after the completion of those tasks. The GMCM may not necessarily occur after the initial meeting with the taxpayer. Excise examiners (GS-12 and below) must document the GMCM on Form 15682-C, A115 - Group Manager Concurrence Meeting Check Sheet. Excise examiners, GS-13, are encouraged to utilize a GMCM process to provide updates on cases and to obtain guidance from excise managers. When the 30 business day requirement cannot be met, reasons for the delay must be documented sufficiently. Only in rare circumstances should the meeting occur prior to the initial meeting with the taxpayer or the first receipt of information from the taxpayer in a correspondence case. The excise manager acknowledges completion of the GMCM by initialing and dating the A115. Refer to IRM 1.4.40.7.6, Resource Guide for Managers, SB/SE Field and Office Examination Group Manager, Group Manager Concurrence Meeting (GMCM) for Revenue Agents. Note: A GMCM is not required, if the case is closed to the excise manager within 30 business days of the initial appointment or the first receipt of information from a taxpayer in a correspondence case.
A120 - Phase III Issue Resolution Phase Work Sheet
4.24.25.5.6 (12-03-2025) A120 - Phase III Issue Resolution Phase Work Sheet The Issue Resolution Phase of the examination includes time charged beginning after the last fact-finding activity through the closing status determined date. This work paper should be completed contemporaneously with the Issue Resolution Phase of the excise examination process. The excise examiner must use Form 15682-D, A120 – Phase III Issue Resolution Phase Work Sheet, to document and address the following: Penalties Closing Conference, refer to IRM 4.10.7 Report Issuance Soliciting Examination Deficiency Payments, refer to IRM 4.24.20 Note: Refer to IRM 4.20.1, Examination Collectiblity, Soliciting Payment, for guidance on using the tiered interview approach for soliciting payment, securing levy source information and coordinating with Collections. Note: The substance of the discussion with the taxpayer or the representative as to payment options, how the taxpayer indicates the deficiency will be addressed and acknowledgement of the obligations must be documented on Examining Officer's Activity Record in IMS. Audit Report Required Language For additional procedural items, including third party contacts, inadequate records notice and conversion of QuickBooks accounting software, refer to IRM 4.24.6.
A125 - Phase IV Closing Actions Phase Work Sheet
4.24.25.5.7 (12-03-2025) A125 - Phase IV Closing Actions Phase Work Sheet The Closing Action Phase of the examination includes the time charged beginning after closing status was determined through the date the case is submitted to the manager. This work paper should be completed contemporaneously with the Closing Action Phase of the excise examination process. Refer to IRM 4.24.21, Case Closing, for more guidance. The excise examiner must use Form 15682-E, A125 – Phase IV Closing Actions Phase Work Sheet, to document and address the case closing procedures.
B200-1 - Required Filing Checks and Referrals
4.24.25.5.8 (12-03-2025) B200-1 - Required Filing Checks and Referrals The excise examiner documents evidence of voluntary compliance on Form 15682-F, B200-1 - Required Filing Checks and Referrals. Excise examiners should perform taxpayer filing verification checks to determine taxpayers are in compliance with all federal tax return filing requirements and all returns reflect the substantially correct tax. Refer to IRM 4.10.5, Examination of Returns, Required Filing Checks, for more guidance. The excise examiner will: Identify all prior, subsequent and related returns. Include a summary of the analysis performed. Document the conclusions reached. The excise examiner will indicate why a prior or subsequent period is not picked up when an adjustment is proposed in the current period. Required filing checks include the analysis of prior, subsequent and related returns. The analysis and pick-up of prior, subsequent and related returns, when warranted, is an excise examiner's primary responsibility. Limited scope examinations do not eliminate the need to perform required filing checks. The inspection of a return is not an examination. The excise examiner may question the taxpayer concerning items on the return in an attempt to understand how or why they occurred. The excise examiner may not request documentation concerning items on the return. If documentation is requested, an examination has been opened. When possible, excise examiners should use external sources of information, (e.g., FinCEN, Accurint, internet research, K-1s, etc.), as well as internal sources of information, (e.g., IDRS, Modernized e-File (MeF) and Compliance Data Environment), to complete the required filing checks. Filing should be verified for prior and subsequent period returns, related returns, information returns, employment tax returns, gift tax returns, other excise tax returns, pension plan returns, etc. Case file documentation should include key or summary documents when necessary to document identified filing issues. Such as prints from IDRS command codes: BMFOLI BMFOLT SUMRY MeF is a web-based system that allows electronic filing of corporate, individual, partnership and other returns, including excise returns. The MeF system provides the excise examiner original transmitted tax return data in various formats, including a Form View, which resembles a tax return. If a return was filed using MeF, an excise examiner can access the Employee User Portal (EUP) to view the return. For additional information, refer to the Employee User Portal (EUP) page in the Excise Tax Knowledge Base.
Form 5346, Examination Information Report
4.24.25.5.8.1 (11-23-2021) Form 5346, Examination Information Report When the excise examiner receives information containing sufficient compliance value that may warrant another compliance action, that excise examiner completes Form 5346. Examples include: Non-related taxpayers having similar audit issues present. A referral of the taxpayer for non-excise related issues (i.e., income tax or employment tax referrals). Note: If the excise examiner has related tax periods for the same taxpayer, those tax periods are established on Form 5345-D, Examination Request - ERCS (Examination Returns Control System) User. This would include parent/subsidiary relationships and brother/sister businesses, as well as prior and subsequent tax periods for the primary entity. Form 5346 must be electronically submitted to the excise manager. Once approved, the excise manager submits Form 5346 along with supporting documents, to Workload Selection and Delivery (WSD) at *SBSE Excise WSD. Refer to IRM 4.24.18.5.3, Data Acquisition, for additional information.
B200-2 - Related Excise Tax Returns Considerations
4.24.25.5.9 (12-03-2025) B200-2 - Related Excise Tax Returns Considerations Form 15682-G - B200-2 - Related Excise Tax Returns Considerations documents the excise examiner's appropriate follow-through, i.e., whether the taxpayer: Manufactures, produces, recycles or imports items for sale or use subject to excise taxes. Uses products subject to excise taxes. Receives payment for services subject to excise taxes. As a retailer or importer, engages in the sale, lease or use of goods subject to excise taxes. Has been a party to transactions subject to excise taxes. Engages in miscellaneous activities subject to excise taxes.
C300 - Book to Return Reconciliation Check Sheet
4.24.25.5.10 (12-03-2025) C300 - Book to Return Reconciliation Check Sheet The excise examiner will use Form 15682-H, C300 - Book to Return Reconciliation Check Sheet, to document the analysis and consideration of the taxpayer's operations and activities for determining the proper excise examination scope. In the course of examining Form 720, Quarterly Federal Excise Tax Return, it is often necessary for the excise examiner to verify the taxpayer's total sales of relevant products for a tax period. The excise examiner will often review the total sales for a year shown on a taxpayer's income tax return and inquire into the purpose of any adjustments. This information helps establish the accuracy of all Form 720 returns filed during the taxable year. Conducting a books-to-return analysis is especially important when the taxpayer has not filed an excise return. Even if the taxpayer has not filed an excise return and there is no amount on the excise return to reconcile, the excise examiner must still perform a books-to-return analysis and document the conclusions reached regarding what sales/revenue should have been reflected on the non-filed return. Note: The inspection of the year-end books and records to determine year-end adjustments and total sales for the year for excise purposes and tying the year-end books and records to reported sales on the income tax return are part of an excise examination. There is no legal requirement to treat a thorough review of the annual sales receipts and any documents related to adjustments as reported on the annual return as a separate income tax examination. When the period under examination is the third quarter, the review of the year-end books and records for sales and adjusting entries does not constitute an examination for the fourth quarter Form 720 return. An excise examination is started when actual books and records of sales are requested and examined for a period for which a return has been filed or is due to have been filed. The excise examiner will reconcile all sales/revenues shown on the excise return with those on the income tax return. The excise examiner will document the justification for any differences between the two amounts. The excise examination should account for all sales/revenues (and sometimes uses) as if they are subject to excise tax until verified and proven otherwise. Through the excise examination process, the excise examiner verifies and eliminates those sales/revenues (and sometimes uses) not subject to excise tax. All remaining items are then taxable. Note: An excise examiner who only verifies the accuracy of the taxpayer-prepared worksheets is not properly considering all sales/revenues and uses that the taxpayer may not have included on those schedules. The excise examiner will document any adjustments made by the taxpayer to the amounts shown for sales/revenues on the books of the taxpayer. An in-depth job aid covering the book to return reconciliation may be found on the Book to Return Reconciliation page in the Excise Tax Knowledge Base.
C310 - Fraud Awareness Check Sheet
4.24.25.5.11 (12-03-2025) C310 - Fraud Awareness Check Sheet The excise examiner will use Form 15682-I, C310 Fraud Awareness Check Sheet, to document actions taken related to fraud and should familiarize themselves with the IRM 25.1, Fraud Handbook, when developing a fraud case. IRM 25.1.7, Failure to File, discusses the various procedures concerning fraud in failure to file cases. To assist in the timely development of fraud cases, the excise examiner, with the excise manager's concurrence, should contact a Fraud Enforcement Advisor (FEA) when initial indicators of fraud are uncovered. A plan of action is developed jointly to document firm indications of fraud. An integral part of the plan requires establishing that sufficient affirmative acts exist confirming fraud. The plan should be a joint effort by the excise examiner, the excise manager, and the FEA. The FEA serves as consultants during case development. The excise examiner will complete Form 11661, Fraud Development Recommendation - Examination, when they suspects fraud. Form 11661 should be forwarded electronically via secure e-mail to the FEA through the excise manager. Upon receipt of an approved Form 11661, the case is placed in status code 17 (Fraud Development Status) on AIMS. When the excise examiner, excise manager and FEA have agreed that the case contains sufficient evidence to prove the existence of firm indicators of fraud, the excise examiner (with the help of the FEA, if needed) prepares Form 2797, Referral Report of Potential Criminal Fraud Cases, to refer the case to Criminal Investigation (CI). The excise examiner will route Form 2797 via secure e-mail to the excise manager, who forwards it to the FEA via secure e-mail. Note: Form 2797 is not required for civil fraud referrals. CI has 10 business days after receipt of the referral to contact the excise examiner, excise manager and FEA and set up a meeting to discuss the case. At the 10-day meeting, the excise examiner provides CI with the entire case file and discusses the issues. If a case referred to CI is accepted for a criminal investigation, the case will be placed in status code 18 (Accepted by CI). The excise manager monitors status code 18 cases through quarterly four-way conferences with CI. The excise examiner is responsible for monitoring all civil assessment Statutes of Limitations (SOLs) during joint investigations, including prior and subsequent tax periods and related tax returns under examination/collection activity. When fewer than 210 days remain on the SOL for assessment, the excise examiner completes Form 10498-B, Joint Investigations Intent to Solicit Consent to Extend Statute, to request CI's permission to solicit the taxpayer's consent to extend the assessment SOL to issue a notice of deficiency. The completed Form 10498-B is sent via secure e-mail by the excise manager to the Supervisory Special Agent (SSA). CI must accept or decline the request within 10 days after receipt of Form 10498-B. The SSA indicates the desired action by checking the appropriate boxes on Form 10498-B. The SSA then forwards via secure e-mail Form 10498-B to the Special Agent in Charge (SAC). The SAC indicates approval by entering his/her signature and the date. The SAC forwards via secure e-mail the completed Form 10498-B to the Compliance Authorizing Official, who is generally the excise territory manager. The Compliance Authorizing Official forwards via secure e-mail the approved Form 10498-B to the excise manager. For instructions on updating the statute on AIMS, refer to Exhibit 25.6.23-3, Instructions for Updating the Statute on AIMS and to Form 10498-B instructions. Refer to IRM 25.1.4.4.9, Statute Protection, for further guidance. For additional information regarding fraud, refer to the Fraud Development Knowledge Base.
E500 - Penalty Check Sheet and Approval
4.24.25.5.12 (12-03-2025) E500 - Penalty Check Sheet and Approval The excise examiner must use the Form 15682-J, E500 - Penalty Check Sheet and Approval, to document the assertion or non-assertion of penalties. IRC 6751(b)(1) states that no penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher level official as the Secretary may designate. Notwithstanding the exception noted in paragraph 4 below, this approval requirement also applies to the imposition of any fraud penalty including fraudulent failure to file penalty under IRC 6651(f). IRC 6751(b)(2) provides an exception to the managerial approval requirement. Refer to IRM 20.1.1.2.3, Approval Prerequisite to Penalty Assessments. For purposes of this section, the term "penalty" includes "any addition to tax or any additional amount." Refer to IRC 6751(c). The excise manager must perform a meaningful review of the excise examiner's penalty determination. The excise manager should verify the penalty impositions are accurate, as well as confirm that the excise examiner documented the findings in the case file including conclusions regarding the assertion or non-assertion of penalties. Refer to IRM 4.24.9.2, Common Penalty Features, for the timing of written supervisory approval of penalties. Refer to IRM 4.10.6, Penalty Considerations, for the assertion and non-assertion of penalties. Refer to IRM 20.1.1.3.2, Reasonable Cause, for penalty relief. Refer to IRM 4.24.9, Excise Tax Penalties Guidance, and IRM 20.1.11, Excise Tax and Estate and Gift Tax Penalties. Refer to the Penalties Knowledge Base for an overview of Penalties Associated with Excise Taxes.
Risk Analysis Workpaper
4.24.25.5.13 (12-03-2025) Risk Analysis Workpaper The excise examiner should compare the potential benefits derived from examining a return to the resources required to perform the excise examination. The excise examiner is expected to effectively manage his or her workload by prioritizing the issues so that issues with higher audit potential are examined compared to those with lower potential. The excise examiner is expected to use professional judgment to determine if it is in the government's best interest to continue the excise examination and to document the excise examiner's risk-based decisions with regard to depth and scope of the excise examination. At the mid-point of the excise examination, using risk analysis, the excise examiner should determine whether the remaining classified/identified issues should be examined. This decision should be based on the facts and circumstances, evaluation of internal controls (refer to IRM 4.24.25.5.4.3) and the excise examiner's judgment. For example, if the resulting additional tax is not expected to be material, or the time to develop additional issues is not justified based on the potential for more tax, further examination steps are not appropriate. Refer to IRM 4.10.2.4, Evaluation of Audit Potential, for more guidance. Refer to IRM 4.10.3.3, Risk Analysis, for more guidance.
Acronyms
Exhibit 4.24.25-1 Acronyms The following table contains acronyms and their definitions used throughout this IRM. Acronym Associated Words or Phrase AIMS Audit Information Management System CAF Centralized Authorization File CI Criminal Investigation CEAC Campus Exam/Automated Under Reporter Cincinnati ECS Excise Case Selection ERCS Examination Returns Control System EUP Employee User Portal ExSTARS Excise Summary Terminal Activity Reporting System FCO Fuel Compliance Officer FEA Fraud Enforcement Advisor FSEQ Field and Specialty Exam Quality GMCM Group Manager Concurrence Meeting IDR Information Document Request IDRS Integrated Data Retrieval System IGM Interim Guidance Memorandum IMS Issue Management System IRC Internal Revenue Code IRM Internal Revenue Manual LB&I Large Business & International MCD Mutual Commitment Date MeF Modernized e-File NQRS National Quality Review System POA Power of Attorney SAC Special Agent in Charge SB/SE Small Business/Self Employed SSA Supervisory Special Agent SOL Statute of Limitations TC Transaction Code TIN Taxpayer Identification Number WSD Workload Selection and Delivery
Source: official text