Internal Revenue Manual
IRM 4.25.3 — Planning, Classification, and Selection
Part 4. Examining Process
Chapter 25. Estate and Gift TaxSection 3. Planning, Classification, and Selection 4.25.3 Planning, Classification, and Selection Manual Transmittal May 27, 2026 Purpose (1) This transmits revised IRM 4.25.3, Estate and Gift Tax, Planning, Classification and Selection. Material Changes (1) Added IRM 4.25.3.1.1 providing an overview of EG WSD functions. (2) Removed IRM 4.25.3.9.1 as obsolete. (3) Revised IRM 4.25.3.10.2.5.3 to comply with interim guidance control number SBSE-04-0126-0021 issued January 25, 2026 authorizing digital processing of the Form 3949-A, Information Referral. (4) Revised IRM 4.25.3.11 to reflect current return delivery procedures. (5) Editorial changes have been made throughout this IRM. Web page links, business unit title changes, legal references, and IRM references were reviewed and updated as necessary. IRM Section Material Change IRM 4.25.3.1.1, Background Added new subsection providing an overview of EG WSD functions. IRM 4.25.3.9.1, Fed/State Non-Filer and Under-reporter Estates Deleted subsection due to expiration of the MOU; EG WSD does not currently receive information from the IRS Governmental Liaison Operations. IRM 4.25.3.10.2.5.3, Informant Form 3949-A Referrals Revised subsection to incorporate interim guidance SBSE-04-0126-0021 issued January 25, 2026. IRM 4.25.3.11, Delivery of Estate and Gift Returns Revised subsection to reflect current return delivery procedures. Effect on Other DocumentsIRM 4.25.3 dated July 13, 2023 is superseded and interim guidance SBSE-04-0126-0021 issued January 25, 2026 is incorporated into subsection 4.25.3.10.2.5.3. AudienceThis section contains instructions and guidelines for Small Business/Self-Employed Estate and Gift Tax Specialty Programs' employees. Effective Date(05-27-2026)Katherine L. FoxDirector, Exam Case SelectionSmall Business/Self-Employed Division
Program Scope and Objectives
4.25.3.1 (07-13-2023) Program Scope and Objectives Purpose - IRM 4.25.3 Planning, Classification and Selection, establishes clear and consistent procedures for documentation of case selection, non-selection and survey decisions. IRM 4.25.3 also establishes the related review and approval requirements for those decisions when providing cases for compliance activity. It: Establishes standards and procedures for classifying filed estate and gift tax returns, prompt assessment requests, referrals, and Servicewide initiatives. Establishes the standards and procedures for managerial quality reviews of classified cases to ensure that cases with the best examination potential are being sent for examination review. Establishes the standards and procedures for the content management and collaboration (CMC) manager(s) review of selected returns and prioritization of returns to send for examination review. Establishes the standards and procedures for surveying selected cases. Provides direction for delivering selected cases to the field for audit. Audience - These procedures apply to the IRS employees responsible for identifying and classifying filed estate and gift returns, referrals, project cases, and Servicewide initiatives, including: EG WSD coordinators CMC managers EG Exam / CMC classifiers Transfer tax technician classifiers Administrative personnel EG WSD Group Manager and EG WSD staff Policy Owner - Estate and Gift Workload Selection and Delivery manages the selection, classification, and delivery of inventory for Specialty Examination, Estate and Gift. Program Owner - The Director, Exam Case Selection - Specialty owns Estate and Gift Workload Selection and Delivery (EG WSD). Primary Stakeholders - Estate and Gift Workload Selection and Delivery, Specialty Examination - Estate and Gift Tax, and Specialty Examination Policy, Estate and Gift Tax Policy. Program Goals - The goals of EG WSD are consistent with the mission of Exam Case Selection: to provide policy guidance on selection of cases and delivery of inventory for EG Exam, to support the creation of the EG workplan, and to set direct assignment criteria for routing examination work.
Background
4.25.3.1.1 (05-27-2026) Background This section provides instruction to EG WSD for the classification of Form 706 and Form 709 returns, delivery of classified inventory to EG Exam, and ancillary matters for returns not delivered to EG Exam for audit.
Authority
4.25.3.1.2 (07-23-2018) Authority Statutory Authority: Internal Revenue Code Chapter 11 provides the statutory authority for the taxation of estates. Internal Revenue Code Chapter 12 provides the statutory authority for the taxation of gifts. Internal Revenue Code Chapter 13 provides the statutory authority for the taxation of generation-skipping transfers. Note: the Internal Revenue Code is Title 26 of the U.S. Code. Policy Statement 4-21, Selection of Returns for Examination, states that the primary objective in selecting returns for examination is to promote the highest degree of voluntary compliance on the part of the taxpayers. This requires the exercise of professional judgment in selecting sufficient returns of all classes of returns in order to assure all taxpayers of equitable consideration, in utilizing available experience and statistics, indicating the probability of substantial error, and in making the most efficient use of examination staffing and other resources. IRM 1.11.1.6.5, General Management Responsibilities, provides that all IRS managers must ensure that their employees have access to internal management documents defining policies and procedures necessary to perform their jobs. IRS managers who are responsible for establishing the program, policy, process and procedures necessary to implement and manage a program area for the IRS are program owners. They are responsible for: Ensuring IRM content is reviewed annually for accuracy and completeness. Analyzing issues that may provoke a change to the IRM, such as new or revised legislation, court opinions, issuance of regulations, or changes in procedure that result from other factors (organizational, operational, technology, etc.). Ensuring IRM authors and/or coordinators reporting to them are properly trained. IRM 1.11.2.2.1, Supplemental Guidance, provides that organizations may issue supplemental guidance and local procedures to employees when the primary guidance is in the IRM. Supplemental guidance contains information that details how to perform or review a task. Supplemental guidance must comply with published guidance and not supersede the IRM.
Roles and Responsibilities
4.25.3.1.3 (07-13-2023) Roles and Responsibilities The Director, Exam Case Selection is responsible for oversight of EG WSD. The Employment Tax and Estate & Gift Tax Exam Case Selection Program Manager (Program Manager) is responsible for oversight of EG WSD operations. The EG WSD Group Manager is responsible for the oversight of the EG WSD group.
Role of Estate and Gift Workload Selection and Delivery
4.25.3.1.4 (07-23-2018) Role of Estate and Gift Workload Selection and Delivery To accomplish the mission of Exam Case Selection, EG WSD will: Implement policies related to case selection and review progress towards the EG Exam workplan. Provide centralized oversight and program coordination of workload selection, classification, and delivery for EG Exam, including information-reporting compliance. Develop standardized policy and program direction for classifying and delivering workload to support plan goals. Monitor EG Exam inventory and timely deliver inventory on an as-needed basis, to support program goals, and strategic plan objectives. Support development of workload initiatives to identify areas of non-compliance. Provide input to develop the SB/SE Division Strategic Plan, the EG Exam workplan, and/or EG Exam workload studies.
Program Controls
4.25.3.1.5 (07-13-2023) Program Controls All information management systems that are utilized have safeguard measures in place that address all key components of information technology (IT) security requirements to restrict access to sensitive data. By the 15th of each month, CMC manager(s) will review 10% of classification efforts and survey decisions for the prior month of their employee cadre to ensure classification decisions adhere to EG WSD case selection policy. The review will be documented in a memorandum or feedback form, that will be maintained in digital format on the EG WSD shared drive. For reviews of EG Exam classifiers, the EG WSD Group Manager will provide a copy of the documentation to the Chief, Estate and Gift Tax and Excise (or designee). The CMC manager will provide a copy to the classifier via secure email. For reviews of the Cincinnati Centralized Estate and Gift Campus Operation (Cincinnati Centralized EG Campus Operation) classifiers, the EG WSD Group Manager will provide monthly documentation to the Cincinnati Centralized EG Campus Operation Department Manager. The CMC manager will provide a copy to the classifier via secure email. The EG WSD Group Manager (or designee) will conduct quarterly reviews of the CMC manager reviews completed pursuant to paragraph (2) of this subsection to ensure such reviews adhere to EG WSD case selection policy. These reviews by the EG WSD Group Manager (or designee) will be documented in a memorandum. The EG WSD Group Manager (or designee) will also conduct a 10% quarterly review of classification efforts. This includes classification completed in CMC and classification completed by EG WSD Coordinators; see IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. These reviews by the EG WSD Group Manager (or designee) will be documented in a memorandum provided to the CMC managers and/or EG WSD coordinators. The Program Manager (or designee) oversees the reviews in paragraphs (2), (3), and (4) of this subsection to ensure these reviews adhere to the examination case selection policy.
Program Reports and Monthly Briefings
4.25.3.1.6 (07-13-2023) Program Reports and Monthly Briefings Program Reports: information regarding inventory levels and program workplan progress are included on, but not limited to, the following reports: Internal Inventory Monitoring Reports Generated by the EG WSD Examination Analyst Monthly: Status 10 Report, Inventory Wall Report, Summary Information Report from AIMS Centralized Information System (A-CIS), Awaiting Classification Report, Disaster Area Return Listings. Monthly Reports from Performing Planning and Analysis (PPA): Base Inventory Work in Process, New Starts, and Director's Briefing. Classification Data report prepared by the EG WSD Examination Analyst. Weekly Examination Returns Control System (ERCS) report prepared by the EG WSD Examination Analyst. CMC Weekly Report prepared by LB&I that includes the CMC inventory, the LB&I Workload Identification System (LWIS) inventory, and the LB&I Image Network (LIN) inventory. Monthly Briefings: EG WSD Coordinators/Gatekeeper/Analysts: by close of the 15th day of each month, a monthly briefing document is due to the EG WSD Group Manager that may be submitted by secure email. A template for this purpose will be provided by the EG WSD Group Manager. EG WSD Group Manager: based on a schedule as determined by the Program Manager, at the beginning of the fiscal year, a monthly briefing document must be timely submitted to the Program Manager. This monthly briefing may be submitted by secure email. A template for this purpose will be provided by the Program Manager.
Terms/Definitions and Acronyms
4.25.3.1.7 (07-13-2023) Terms/Definitions and Acronyms Below are acronyms and definitions for terms frequently used throughout this IRM: Acronym Definition A-CIS AIMS Centralized Information System AIMS Audit Information Management System AOIC Automated Offer in Compromise ASED Assessment Statute Expiration Date BMF Business Master File CBF Case Built File CMC Content Management and Collaboration DATL Doubt as to Liability DC Disposal Code DIN Document Image Network DLN Document Locator Number DSUE Deceased Spousal Unused Exclusion ECS Exam Case Selection EGC Employee Group Code EG Exam Specialty Examination, Estate & Gift/Excise Exam EG WSD Estate and Gift Workload Selection and Delivery ERCS Examination Returns Control System GHW Global High Wealth IAR Independent Administrative Review IDRS Integrated Data Retrieval System JOC Joint Operations Center LB&I Large Business and International LIN LB&I Image Network LWIS LB&I Workload Identification System MFTRA Master File Transcript Request MOU Memorandum of Understanding OAR Operations Assistance Request OVDI Offshore Voluntary Disclosure Initiative PDF Portable Document Format POC Point of Contact PPA Performance, Planning and Analysis PSP Planning and Special Programs RAAS Research, Applied Analytics & Statistics RPO Return Preparer Office SAIN Standard Audit Index Number SFR Substitute For Return SME Subject Matter Expert SOI Statistics of Income SRS Specialist Referral System TAS Taxpayer Advocate Service TBOR Taxpayer Bill of Rights TDI Tax Delinquency Investigation TIN Taxpayer Identification Number TIPRA Tax Increase Prevention Reconciliation Act of 2005 UNAX Unauthorized Access UIL Uniform Issue List
Related Resources
4.25.3.1.8 (07-13-2023) Related Resources For general guidance, procedures, tax law, and regulations on a wide variety of estate and gift tax issues, refer to the Estate and Gift Tax Knowledge Base SharePoint. Refer to IRC 7803 and the Taxpayer Bill of Rights (TBOR) for information about how IRS employees are expected to carry out their duties with integrity and fairness. The IRS must administer the law with integrity and fairness to all taxpayers. Under TBOR, IRS employees must exercise professional judgment in conducting enforcement activities.
Fairness in Case Selection
4.25.3.2 (07-13-2023) Fairness in Case Selection Policy Statement 1-236, Fairness and Integrity in Enforcement Selection, emphasizes the IRS mission statement that includes "enforcing the tax law with integrity and fairness to all." A "fair and just tax system" is also a cornerstone in the Taxpayer Bill of Rights (TBOR). IRS employees are expected to carry out their duties with integrity and fairness. Fairness and integrity, therefore, apply to how the IRS administers tax laws to all taxpayers as well as how IRS employees interact with each taxpayer and tax professional. Employees must exercise their professional judgment, not personal opinions, in conducting their enforcement responsibilities. There are three parts to enforcing the tax law with integrity and fairness: To ensure fairness to the taxpaying public, employees must consider the responsibilities and obligations that all taxpayers share and pursue those individuals and businesses who don't comply with their tax obligations. In this way, employees are being fair to those who are compliant and that, in turn, helps promote public confidence in our tax system for all taxpayers. To ensure an equitable process for all taxpayers, fairness and integrity are built into the foundation of our enforcement selection processes. These processes operate under a comprehensive set of checks and balances and safeguards to identify the highest potential non-compliance using scoring mechanisms, data driven algorithms, third party information, whistleblower information and information provided by the taxpayer. No one individual can control the enforcement selection decision-making processes, and involvement is limited to only those employees whose duties require involvement. This produces processes that are impartial and applied consistently to each taxpayer. To ensure fairness to each taxpayer, IRS employees do their jobs with a focus on taxpayer rights, including due process and appeal rights. The Internal Revenue Code grants taxpayers certain rights when working with the IRS, and these rights are embodied in Pub 1, Your Rights as a Taxpayer. In addition, managers and employees adhere to administrative and legislative procedures. Managerial as well as quality reviews of selection decisions occur during each phase of the selection and assignment process. IRS employees are managed and evaluated on how well they provide fair and equitable treatment of taxpayers as required by the Restructuring and Reform Act of 1998. Also, taxpayers may administratively appeal most IRS decisions, including the assessment of additional tax or penalties, the denial of a refund claim, or the issuance of a lien or levy. An employee in the Office of Appeals, an independent and impartial function within the IRS, will contact the taxpayer, hear the case and decide whether to sustain the enforcement action. Most taxpayers can also petition the U.S. Tax Court for a pre-assessment review of any proposed or additional tax or seek a refund in other federal courts. SB/SE supports administration of tax law by selecting returns to audit. The primary objective in selecting returns for examination is to promote the highest degree of voluntary compliance on the part of taxpayers while making the most efficient use of finite examination staffing and other resources. Employees must exercise their professional judgment, not personal opinions, when making return selection decisions and carry out their duties with integrity and fairness: To ensure fairness to the taxpaying public, our Examination Workplan provides a balanced approach for return delivery and allocation of resources to address areas of the tax gap by considering factors such as income levels, geographic locations, and return types. To ensure an equitable process for all taxpayers, return selection decisions are made utilizing available experience and/or statistics indicating the probability of substantial error. No one individual can control the examination selection decision-making process. We limit involvement to only those employees whose duties require them to be included. To ensure fairness to each taxpayer whose return is selected, individual return selection decisions are based on the information contained on the taxpayer's return and/or the underlying relevant tax law. Managerial as well as quality reviews of selection decisions occur during each phase of the selection and assignment process. SB/SE program-level objectives ensure examinations are initiated based on indicators of non-compliance or on other criteria (such as selection for the National Research Program) identified in the Internal Revenue Manual. In addition, program objectives ensure a review of the decision to survey a return (i.e., not initiate an examination) is based upon factors outlined in the Internal Revenue Manual and approved by an appropriate level of management. Identification of cases – To ensure an equitable process for all taxpayers, fairness and integrity are built into the return identification process. The primary source of cases with examination potential are filed estate (Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return) and gift (Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return) tax returns. For filed Form 706 and Form 709 returns, a combination of methods, including automated processes, historical data, data-driven algorithms, employee technical expertise, and third party information is used to identify cases for classification. The identification of cases for classification is documented and contains the following: Data source Selection methods Selection authority Classification results Program Manager and EG WSD Group Manager approval
Taxpayer Rights
4.25.3.2.1 (07-23-2018) Taxpayer Rights EG WSD employees have the ongoing responsibility to ensure that all taxpayer rights are protected and observed, whether these rights are mandated by statute or provided as a matter of policy. For more information refer to IRM 4.10.1.2, Taxpayer Rights. Employees should review the Taxpayer Bill of Rights (TBOR).
Confidentiality of Taxpayer Information – Taxpayer Privacy
4.25.3.2.1.1 (07-23-2018) Confidentiality of Taxpayer Information – Taxpayer Privacy The obligation to protect taxpayer privacy and to safeguard the information taxpayers entrust to us is a fundamental part of the mission of the IRS which requires that employees apply the tax law with integrity and fairness to all. Taxpayers have the right to expect that the information they provide will be safeguarded and used only in accordance with the law. For unauthorized access (UNAX) requirements, refer to IRM 4.10.1.2.1.12, Unauthorized Access (UNAX). For information relating to Identity Theft and Incident Management Program, see IRM 25.23.1.2.2, Identity Theft Victim Assistance (ITVA)- Program Responsibilities.
Workplan Development and Inventory
4.25.3.3 (07-13-2023) Workplan Development and Inventory An annual EG Exam workplan is developed by PPA that determines workstream volumes by program and location. Workplan information is used to determine program priorities with the allocation of resources, workload selection, and assessment of program effectiveness within Exam Case Selection (ECS). The Program Manager, the EG WSD Group Manager, and the EG WSD Examination Analyst are all responsible for providing input and assumptions to PPA towards development of the EG Exam workplan. Input traditionally provided by ECS includes: Workstream coding information Anticipated mix and volume of workstreams Delivery of workstreams information Identification of work
Workplan and Inventory Monitoring
4.25.3.3.1 (07-13-2023) Workplan and Inventory Monitoring Workplan monitoring includes reviewing the number of returns started by EG Exam each month, the number of returns closed by EG Exam each month, and the number of returns in process with EG Exam to maintain optimal exam status code 10 inventory. The EG WSD Group Manager is required to review the reports in IRM 4.25.3.1.6, Program Reports and Monthly Briefings, for workplan and inventory monitoring purposes. The EG WSD Group Manager is responsible for delivery of sufficient exam status code 10 inventory to EG Exam. The EG WSD Group Manager and EG WSD National Gatekeeper are responsible for ensuring sufficient wall inventory as follows: Prior to the beginning of the fiscal year, the EG WSD Group Manager will determine the resources needed for classification. Such resource needs will take into consideration the time it takes to classify, anticipated delivery needs, and anticipated classification volume based on current screening criteria, and return filing volumes. Resource needs also take into consideration EG Exam priorities. The EG WSD Group Manager will work with EG Exam to secure resources for classification. Monthly, the EG WSD National Gatekeeper and EG WSD Group Manager will determine monthly classification assignments for the EG Exam cadre of classifiers based on paragraph (a) of this subsection. It is the responsibility of the EG WSD National Gatekeeper that there are sufficient returns loaded into CMC for the monthly classification assignment. Weekly, the EG WSD Group Manager, EG WSD Examination Analyst, and EG WSD National Gatekeeper will review the inventory awaiting in LIN, and the inventory available in exam status code 08 in LWIS. Concerns regarding insufficient inventory will be raised to the Program Manager to address resource needs. Coordination with EG Exam will occur as needed to address classification resource concerns. The EG WSD Group Manager and EG WSD National Gatekeeper will deliver returns to EG Exam consistent with IRM 4.25.3.11.1, Program Workplan and Case Delivery. At least annually, the EG WSD Group Manager, EG WSD Coordinators, and EG WSD National Gatekeeper will conduct a review of business results as compared to the EG WSD prioritization of cases sent to EG Exam and make recommendations to changes to case prioritization based on this review. This review must be documented in a memorandum to the Program Manager. Changes to the prioritization must be approved in writing by the Program Manager prior to implementation. At least annually, the EG WSD Group Manager must review the current screening criteria for Form 706 and Form 709 returns. This review must be documented in a memorandum to the Program Manager. Changes to the prioritization must be approved in writing by the Program Manager before implementation. Any changes to the current screening filters may require coordination with Taxpayer Services, Submission Processing, and Research Applied Analytics and Statistics (RAAS). Note: see IRM 3.11.106, Estate and Gift Tax Returns, for current code and edit procedures.
Statute Control for EG WSD Inventory
4.25.3.3.2 (07-13-2023) Statute Control for EG WSD Inventory The EG WSD Group Manager is responsible for reviewing weekly an ERCS inventory report of all assessment statute expiration dates (ASED) within EG WSD employee group codes (EGC). LWIS / ERCS exam status code 08 inventory: Weekly, the EG WSD Group Manager will verify the ASED of returns in exam status code 08 and/or in LWIS by referring to the ERCS inventory report and the "Available in LWIS" tab of the Weekly CMC report. See IRM 4.25.3.1.6, Program Reports and Monthly Briefings, for a list of monitoring reports in EG WSD. For any return that has less than 18 months remaining on the ASED, the EG WSD Group Manager will provide a listing to the EG WSD National Gatekeeper. The EG WSD Gatekeeper will have one week to review the return listing. If the return prioritization is the lowest priority tier or if EG Exam is otherwise unable to examine the return, it should be surveyed consistent with IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. In all other cases, the EG WSD National Gatekeeper should discuss with the EG WSD Group Manager the appropriate action. If it is decided that the return should be sent to EG Exam, the EG WSD National Gatekeeper will work with EG Exam to determine where the return file should be sent. CMC / ERCS exam status code 06 inventory: Weekly, the EG WSD Group Manager will verify the ASED of returns in CMC for classification by referring to the weekly ERCS inventory report and/or the "Weekly Report After" tab of the Weekly CMC Report. See IRM 4.25.3.1.6, Program Reports and Monthly Briefings, for a list of monitoring reports in EG WSD. For any return that has less than 18 months on the ASED, the EG WSD Group Manager will provide a listing to the CMC manager owning the case in CMC to provide direction to the CMC classifier to prioritize classification of the short statute case. The EG WSD Group Manager will review selected cases from the prior week to ensure that there is at least 18 months on the ASED. Selected cases from the prior week with less than 18 months on the statute will be handled consistent with IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. Monthly, the EG WSD Group Manager and EG WSD Compliance Clerk will receive a 4.1 Table report for EG WSD EGC's from the AIMS/ERCS Program Analyst. See IRM 4.4.27.5.1, Table 4.0 and 4.1 - Statute Control Reports, for information regarding 4.1 Table reports. Within 5 business days of receipt, the EG WSD Compliance Clerk will follow the instructions in IRM 4.4.27.5.1.1, Procedures for Working the Statute Control Report, to review and reconcile the 4.1 Table report. The completed report will be signed by the EG WSD Compliance Clerk and sent via secure email to the EG WSD Group Manager for review and signature. The EG WSD Group Manager is responsible for the review and signature of the 4.1 Table report. Completed 4.1 Table reports are stored in the designated folder on the EG WSD shared drive.
CMC Classification - Roles, Training and Assignments
4.25.3.4 (07-13-2023) CMC Classification - Roles, Training and Assignments This section provides information on roles, training, and assignments for the classification of filed estate and gift tax returns in CMC. Classification is the process of determining whether a return should be selected for audit, the initial issue(s) to be audited, and who should conduct the audit; see IRM 4.1.5.3, Classification, for additional information regarding the classification process.
Classification Roles
4.25.3.4.1 (07-13-2023) Classification Roles CMC Classifier: the CMC classifier is responsible for classifying returns in CMC. Prior to beginning of the fiscal year, the EG WSD Group Manager will determine the resources needed for CMC classification and work with EG Exam to secure resources for classification; see IRM 4.25.3.3.1, Workplan and Inventory Monitoring. Selection of the CMC classification cadre and the length of the classification detail is determined by EG Exam, with input by EG WSD. The Form 706 and Form 709 returns meeting EG WSD screening criteria are classified by EG Exam employees. The Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, and Form 709-NA, United States Gift (and Generation-Skipping Transfer) Tax Return, are classified by Cincinnati Centralized EG Campus Operations. CMC Manager: the CMC managers are the EG WSD National Gatekeeper and Coordinators on the EG WSD staff. CMC managers are responsible for the following tasks as it pertains to their classification cadre: Creating the list of classification efforts for the EG WSD Group Manager to review (see IRM 4.25.3.1.5, Program Controls) Assigning CMC classifier inventory (see IRM 4.25.3.4.3, CMC Classification Assignments) Reviewing classification determinations for approval or disapproval and acting as the manager designee for classification reviews Monitoring perfection and stock valuation requests (see IRM 4.25.3.5.3, Valuation of Listed and Over-the-Counter Securities, and IRM 4.25.3.5.2, Perfection) Providing general support for CMC issues/errors Note: CMC managers should refer to the EG WSD CMC Manager/LWIS Delivery Desk Guide for troubleshooting tips on common CMC issues/errors. See also IRM 4.25.3.6.1, CMC Manager Review and Approval of Classified Returns. EG WSD Compliance Clerk: the EG WSD Compliance Clerk is available to provide additional research to CMC classifiers as follows: IDRS research to determine whether there are related returns and verification of income tax liability Real estate research to determine if property has been sold and the amount of property taxes paid Stock valuation research to determine whether the return should be submitted for verification of stock valuation Verification of Schedule O Charities/Foundations Note: CMC classifiers may request research assistance from the EG WSD Compliance Clerk via secure email with a copy to the CMC manager documenting the request, including return information (i.e. taxpayer name, TIN, MFT, and tax period). CMC classifiers should also document the request on the risk summary.
Classification Training
4.25.3.4.2 (07-13-2023) Classification Training Each CMC classifier will be assigned a CMC manager. It is the responsibility of the CMC manager to provide monthly assignments as directed by the EG WSD Group Manager; see IRM 4.25.3.4.3, CMC Classification Assignments. Training of newly selected CMC classifiers will be conducted by EG WSD at least two weeks prior to the start of the classification detail. The training will include: Obtaining access to CMC as a classifier Obtaining access to LIN (if the classifier does not previously have access) Navigating CMC and the fields required to be completed for selected and accepted returns (i.e. risk summary) Relevant project and tracking codes Converting the risk summary into a portable document format (PDF) Prioritization/risk rating for selected and accepted returns Uploading the risk summary to the taxpayer folder and transfer of documents to the case built file (CBF) for selected cases Perfection and Stock Valuation request procedures
Classification Assignments
4.25.3.4.3 (07-13-2023) Classification Assignments Estate tax returns (i.e., Form 706 and Form 706-NA ) and gift tax returns (i.e., Form 709 and Form 709-NA) that meet EG WSD screening criteria are scanned in Kansas City by RAAS on a continuous basis. Scanned returns are uploaded to the Document Image Network (DIN), converted to PDF, and uploaded to LIN. By the 15th day of the month, the EG WSD Group Manager and EG WSD Examination Analyst will determine which returns available in LIN should be loaded into CMC for classification based on the following priorities: Progress towards the EG Exam workplan Available classification resources Time left on the ASED for available returns Potential for examination adjustment Current CMC classifier and CMC manager inventory level After the review in paragraph (2) of this subsection is complete, if there are estate tax returns that will not be considered for classification by EG WSD, the EG WSD Examination Analyst will review those returns for Part 3 elections (i.e., IRC 2032A, IRC 6166 or IRC 6163 election) by reviewing the DLN blocking series; see IRM 3.10.73.8.2, DLN Assignment for BMF. Follow procedures in IRM 4.25.3.5.4, Classification of IRC 2032A Elections, for accepted as filed returns with an IRC 2032A election and IRM 4.25.3.5.5, Classification of IRC 6166 Elections, for accepted as filed returns with a IRC 6166 election. For estate tax returns to be placed into CMC, the EG WSD Examination Analyst will: Provide the return listing to the EG WSD Compliance Clerk to update the EGC to 1899. The EG WSD Compliance Clerk will have one week to complete this task. Use ERCS data to obtain the formatted taxpayer identification number (TIN) including the validation digit. Obtain INOLES and AMDISA data for the returns. Provide completed data spreadsheet to the EG WSD Group Manager via secure email. For gift tax returns to be placed into CMC, the EG WSD Examination Analyst will provide the return listing to the EG WSD Compliance Clerk to create an AIMS base for the returns and establish them in exam status code 06, EGC 1087 using the database tool. The EG WSD Compliance Clerk will complete this task within one week and monitor the returns until they have an established AIMS base. Once the returns have an established AIMS base, the EG WSD Examination Analyst will follow the steps (b) through (d) in paragraph (4). The EG WSD Group Manager will use the completed spreadsheet in paragraph (4)(d) to assign returns to CMC managers. For gift tax returns, the EG WSD Group Manager should first sort the list by address before making assignments. Each CMC manager assignment should be on a separate tab. The completed assignment spreadsheet will be stored on the EG WSD shared drive. The EG WSD Group Manager will send the assignment spreadsheet from paragraph (6) of this section to the LB&I CMC analyst indicating that the CMC strat file should be created for the returns listed on the spreadsheet and that the returns should be place in "Ready for Assignment" status on CMC. The EG WSD Group Manager will notify and instruct the CMC managers of the classification assignment for the upcoming month. Prior to the first of the month, the CMC managers will assign returns to their CMC classifiers consistent with EG WSD Group Manager's instructions and notify the classifiers via email of the classification assignment and due date. Guidance on CMC return assignments can be found in the EG WSD CMC Manager/LWIS Delivery Desk Guide; see IRM 4.25.3.6.1, CMC Manager Review and Approval of Classified Returns, for information on this desk guide. It is the continuing responsibility of the CMC manager to ensure that CMC classifiers have sufficient inventory of returns to classify. This responsibility requires timely assignment of returns for the monthly classification assignment and reviewing the Weekly CMC Report to monitor the current status of classifier inventories; see IRM 4.25.3.1.6, Program Reports and Monthly Briefings, for information on the Weekly CMC Report. If a CMC classifier completes their assignments prior to the end of the month, the CMC manager should coordinate with the EG WSD Examination Analyst and EG WSD Group Manager to secure additional inventory for the classifier as needed. The EG WSD Examination Analyst and EG WSD Group Manager will follow the procedures in paragraph (2) to determine which returns to place into CMC and the procedures in paragraphs (3) through (7) to have those returns sent to CMC for classification.
CMC Classification - Filed Estate and Gift Tax Returns
4.25.3.5 (07-13-2023) CMC Classification - Filed Estate and Gift Tax Returns This section provides procedures on classification of filed estate and gift tax returns in CMC.
Classification Responsibilities
4.25.3.5.1 (07-13-2023) Classification Responsibilities CMC classifiers, under the direction of EG WSD, are responsible for determining if a case should be selected for audit or not selected for audit. All CMC classifiers have access to the following desk guides located in the Estate and Gift sub-industry folder of the CMC main page: The EG WSD Classification Guide is owned by EG WSD and includes the process for classifying estate and gift tax returns in CMC, with specific references to the LB&I CMC User Guide where applicable. The EG WSD Classification Guide is stored in the sub-industry folder on the main CMC page. It is the responsibility of the EG WSD National Gatekeeper to ensure that this desk guide is updated and that the most recent version is available in the sub-industry folder. The LB&I CMC User Guide is owned by LB&I and provides information on the functions of CMC. The LB&I LIN User Guide is owned by LB&I and provides information on access to and navigation in LIN. It is the responsibility of CMC classifiers to read and be familiar with the information found in the desk guides located in the Estate and Gift sub-industry folder of the CMC main page. CMC classifiers access their assigned return inventory in CMC. Procedures for accessing assigned inventory can be found in the LB&I CMC User Guide. Classifiers experiencing issues in CMC should contact their CMC manager for assistance. Each assigned return in CMC will include a LIN link to view a scanned image of the return. If an assigned return does not include a LIN link, the CMC classifier will email the CMC manager for assistance. The CMC manager will work with the EG WSD Group Manager and the LB&I CMC Analyst to obtain the LIN link in CMC. Classifier guidance for specific issues with the return image in the LIN link can be found in the EG WSD Classification Guide. LIN access issues should be addressed to *LB&I PSP LIN and/or the LIN SharePoint. CMC classifiers are required to review all return schedules to identify up to three significant tax and compliance issues. Before accepting a return as filed, the classifier should review the return for frequently missed issues, limited-scope issues, and training issues (when applicable). Note: see the EG WSD Classification Guide for guidance on frequently missed, limited-scope, and training issues. The CMC classifier will document the classification decision for selected returns in the following manner: Include their first initial and last name in the Taxpayer Overview box to identify who classified the return. Add a UIL (uniform issue list) code and SAIN (standard audit index number) code for each selected issue; see IRM 4.46.6.3.4, Relationship Between SAIN, UIL and ITA, for general information regarding these codes. Note: all SAIN and UIL codes used for estate and gift tax returns are available in the EG WSD Classification Guide. Select the risk rating for the issue and the appropriate treatment stream based on the guidelines in the EG WSD Classification Guide. In the Analysis box, provide a brief narrative of the selected issue(s), the issue type (a list of current issue types can be found in the EG WSD Classification Guide), and the potential adjustment amount based on the current thresholds found in the EG WSD Classification Guide. Select the overall risk of the case based on the guidelines in the EG WSD Classification Guide. Complete the Tax Form and Areas of Interest box by including the schedule, item number, and the relevant PDF page numbers for each selected issue. In the Recommended Treatment Stream Rationale box, include all applicable project and tracking codes for the case and brief synopsis of the selected issues. A list of current estate and gift project and tracking codes can be found in Document 6209, IRS Processing Codes and Information. For every selected case with a project or tracking code, the CMC classifier will also complete the code table found in the sub-industry folder. The classifier will secure email the completed code table to the CMC manager at the completion of classification for the week. The CMC classifier will document the classification decision for accepted-as-filed returns in the following manner: Include their first initial and last name in the Taxpayer Overview box to identify who classified the return. Add a UIL and SAIN code for the predominant issue on the return. Note: if the return has an IRC 6166 or IRC 2032A election, the classifier will select the UIL and SAIN associated with these elections regardless of the classification outcome. Select a risk rating of "Low" for the issue and the appropriate treatment stream based on the guidelines in the EG WSD Classification Guide. Select an overall risk rating of "Low" for the case. In the Recommended Treatment Stream Rationale box, provide a justification for accepting the return as filed based on the justifications listed in the EG WSD Classification Guide. If the classifier selects "Other" , the classifier is required to provide a further description substantiating the classification decision. After documenting the classification decision, the CMC classifier will: Create a PDF of the risk summary. Upload the risk summary PDF to the taxpayer folder on CMC. Synchronize the risk summary PDF in the taxpayer folder to the CBF. If a CMC classifier is accepting as filed an estate tax return with administration fees to any private executor over a threshold as provided in the EG WSD Classification Guide, the classifier will take the additional steps: Complete a fillable PDF of Form 5346, Examination Information Report, located in the sub-industry folder. Make PDF copies of the relevant pages of the Form 706 and digitally attach those pages to the Form 5346. Save a copy of the completed Form 5346 with attachments to the taxpayer folder. At the end of the weekly classification, secure email the EG WSD Compliance Clerk all of the completed Form 5346 for the week using the email subject line, "Form 5346 Referrals for the Week of xx/xx/xxxx" with "xx/xx/xxxx" representing the Monday date for the week. The EG WSD Compliance Clerk will submit the completed Form 5346 to the EG WSD Group Manager for signature and forward via secure email to the appropriate contact as outlined in the EG WSD CMC Manager/LWIS Delivery Desk Guide. If the CMC classifier determines that the return requires perfection, follow procedures under IRM 4.25.3.5.2, Perfection. If the CMC classifier determines that the return requires stock valuation, follow procedures under IRM 4.25.3.5.3, Valuation of Listed and Over-the-Counter Securities. All returns classified at classification are subject to the review requirements in IRM 4.25.3.1.5, Program Controls.
Perfection
4.25.3.5.2 (07-13-2023) Perfection Perfection is the process of obtaining missing documents required to be filed with the return that are needed to make a classification decision. Perfection is completed by the Cincinnati Centralized EG Campus Operation; see IRM 4.25.2.9.2.1, Perfection. Examples of required documents may include: a copy of the death certificate, a decedent's will and/or trust, return schedules, or appraisals.). If the return is missing a required document and the CMC classifier finds an audit issue, the return should be selected as discussed in IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. The classifier should note the perfection documents needed in the Recommended Treatment Stream Rationale box. If the CMC classifier is unable to determine whether an examination issue exists without the missing documents, the classifier will take the following actions to request perfection for the return: Complete the perfection cover sheet for the return type being classified (perfection for Form 706-NA should use the Form 706 perfection cover sheet) found in the sub-industry folder. Upload a copy of the completed perfection cover sheet to the taxpayer folder. At the end of the weekly classification assignment, secure email the CMC manager and *SBSE EG WSD Perfection with the subject heading: "Perfection Requests for the Week of xx/xx/xxxx" with "xx/xx/xxxx" representing the Monday date for the week of classification; the classifier may submit multiple perfection cover sheets at once. Maintain all returns requiring perfection in classification inventory while the perfection request is outstanding. The EG WSD Compliance Clerk monitors the EG WSD perfection mail box weekly and will perform the following steps: Log the perfection request on the EG WSD perfection log maintained on the EG WSD SharePoint. Ensure that the CMC classifier properly completed the perfection cover sheet and included relevant documentation when required; all incomplete perfection requests will be routed back to the classifier via secure email to address missing information. Consolidate the perfection requests and email the requests to *SBSE EEF E&G Campus Classification. The subject line of the email is "Perfection Requests for Week of xx/xx/xxxx" with "xx/xx/xxxx" representing the Monday date for the week of classification. Log the date that the perfection request was sent to Cincinnati Centralized EG Campus Operation on the EG WSD perfection log. The Cincinnati Centralized EG Campus Operation will complete perfection requests consistent with IRM 4.25.2.9.2.1, Perfection. Completed perfection requests are routed back to the EG WSD perfection mailbox. The EG WSD Compliance Clerk then takes the following steps: Log the receipt date of the perfection request on the EG WSD perfection log stored on the EG WSD SharePoint. Forward the completed perfection request to the CMC classifier and CMC manager. Archive the CMC classifier perfection request email and Cincinnati Centralized EG Campus Operation email response in the EG WSD perfection mail box. The CMC classifier will upload a copy of the perfection documents to the taxpayer folder and synchronize them to the CBF. It is the responsibility of CMC managers to monitor the perfection requests of their CMC classifiers. If a classifier has not received a response on perfection request six weeks after making the request, the CMC manager will follow up with the EG WSD Compliance Clerk for a status of the perfection request.
Valuation of Listed and Over-the-Counter Securities
4.25.3.5.3 (07-13-2023) Valuation of Listed and Over-the-Counter Securities Requests to verify the valuation of listed and over-the-counter securities as part of the estate and gift tax return classification process are routed to the Cincinnati Centralized EG Campus Operation; see IRM 4.25.2.9.2.2, Stock Valuations, for the Cincinnati Centralized EG Campus Operation stock valuation procedures. CMC classifiers will determine whether a return needs stock and/or bond valuation assistance based on the guidelines provided in the EG WSD Classification Guide. This guide includes examples of when it is appropriate for the classifier to conduct research on the valuation of listed and over-the-counter securities instead of making a stock valuation request to the Cincinnati Centralized EG Campus Operation. If the return requires stock and/or bond valuation assistance and the CMC classifier finds an additional audit issue, the return should be selected as discussed in IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. The classifier should also select and notate the stock valuation issue as a second issue. If the only potential issue is the valuation of listed and over-the-counter securities requiring the Cincinnati Centralized EG Campus Operation assistance, the CMC classifier will take the following actions to request stock valuation for the return: Complete the stock valuation cover sheet found in the sub-industry folder. Create a PDF file of the pages of the return needed for the stock valuation request. At the end of the weekly classification assignment, secure email the CMC manager and *SBSE EG WSD Stock Val with the subject heading: "Stock Valuation Requests for Week of xx/xx/xxxx" with "xx/xx/xxxx" representing the Monday date for the week of classification; attach all stock valuation cover sheets and PDF files of the pages needed for the stock valuation requests to the email. Maintain all returns requiring stock valuation assistance in classification inventory while the stock valuation request is outstanding. The EG WSD Compliance Clerk monitors the EG WSD stock valuation mail box weekly and will perform the following steps: Log the stock valuation request on the EG WSD stock valuation log stored on the EG WSD SharePoint. Ensure that the CMC classifier properly completed the stock valuation cover sheet and included relevant documentation; all incomplete stock valuation requests will be routed back to the classifier via secure email to address missing information. Consolidate the stock valuation requests and email the requests to *SBSE EEF E&G Campus Classification. The subject line of the email is "Stock Valuation Requests for Week of xx/xx/xxxx" with "xx/xx/xxxx" representing the Monday date for the week that the classification was started. Log the date that the stock valuation request was sent to the Cincinnati Centralized EG Campus Operation on the EG WSD stock valuation log. The Cincinnati Centralized EG Campus Operation will complete stock valuation requests consistent with IRM 4.25.2.9.2.2, Stock Valuations. Completed stock valuation requests are routed back to the EG WSD stock valuation mailbox. The EG WSD Compliance Clerk then takes the following steps for completed stock valuation requests received from the Cincinnati Centralized EG Campus Operation: Log the receipt date of the stock valuation request on the EG WSD stock valuation log stored on the EG WSD SharePoint. Forward the completed stock valuation request to the CMC classifier and CMC manager. Archive the CMC classifier stock valuation request email and the Cincinnati Centralized EG Campus Operation email response in the EG WSD stock valuation mail box. The CMC classifier will upload a copy of the stock valuation documentation received from the Cincinnati Centralized EG Campus Operation to the taxpayer folder and complete the classification of the return consistent with IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns, and synchronize the stock valuation documentation uploaded to the taxpayer folder to the CBF. It is the responsibility of CMC managers to monitor the stock valuation requests of their CMC classifiers. If a classifier has not received a response on a stock valuation request six weeks after making the request, the CMC manager will follow up with the EG WSD Compliance Clerk for a status of the stock valuation request.
Classification of IRC 2032A Elections
4.25.3.5.4 (07-13-2023) Classification of IRC 2032A Elections To make a qualified IRC 2032A election, the decedent must have been a United States citizen or resident at the time of death, and a completed Schedule T and lien agreement, with all necessary signatures, must be attached to the Form 706. Additionally, the 50-percent and 25-percent liquidity tests of IRC 2032A(b) must be met. During classification, the CMC classifier will consider whether the initial eligibility requirements to make the IRC 2032A election have been met. If the CMC classifier determines that the IRC 2032A initial eligibility requirements are not met, or cannot make this determination without taxpayer contact, then the classifier will select the return for the IRC 2032A issue consistent with IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. The classifier will select the UIL code, SAIN code, and risk assessment for the IRC 2032A issue consistent with the procedures in the EG WSD Classification Guide. If the CMC classifier determines that the IRC 2032A initial eligibility requirements are met and there are no other classification issues identified on the return, then the return may be accepted as filed following the procedures in IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. The classifier will select the UIL code, SAIN code, and risk assessment for the IRC 2032A issue consistent with the procedures in the EG WSD Classification Guide. Note: all returns accepted as filed or otherwise not selected for audit by the CMC classifiers should be risked "Low" in CMC. Weekly, the EG WSD National Gatekeeper will review the Weekly CMC Report to find accepted as filed Form 706 returns that have an IRC 2032A election. All accepted as filed Form 706 returns with an IRC 2032A election will be sent via secure email on a spreadsheet listing to *SBSE EEF E&G Campus Classification for processing of the lien package, as outlined in IRM 4.25.2.8.7, Lien Packages to Advisory. The spreadsheet listing should include: Taxpayer name TIN Election type LIN link to the Form 706
Classification of IRC 6166 Elections
4.25.3.5.5 (07-13-2023) Classification of IRC 6166 Elections Prior to classification, the Cincinnati Centralized EG Campus Operation reviews all Form 706 returns disclosing an election under IRC 6166 as described in IRM 4.25.2.8.3, IRC 6166 Installments. The Cincinnati Centralized EG Campus Operation sends a Letter 2568-C to provide notice that the election was tentatively granted pending review by an EG Exam group. See IRM 4.25.2.8.3.7, Case Establishment. Generally, an estate qualifies for an IRC 6166 election if : The value of the decedent's interest in a closely-held business exceeds 35 percent of the adjusted gross estate (not including passive assets) The decedent was a United States citizen or resident at the time of death The estate made a timely filed IRC 6166 election by attaching a full and complete notice of election with a timely filed estate tax return The business qualifies as a closely-held business as defined in IRC 6166 (b) In certain cases there may be additional eligibility requirements; see IRC 6166 (b) through (h). During classification, the CMC classifier will consider whether the initial eligibility requirements to make the IRC 6166 election have been met. If the CMC classifier determines that the IRC 6166 initial eligibility requirements are not met, or cannot make this determination without taxpayer contact, then the classifier will select the return for the IRC 6166 issue consistent with IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. The classifier will select the UIL code, SAIN code, and risk assessment for the IRC 6166 issue consistent with the procedures in the EG WSD Classification Guide. If the CMC classifier determines that the IRC 6166 initial eligibility requirements are met and there are no other classification issues on the return, then the return may be accepted as filed following the procedures in IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. The classifier will select the UIL code, SAIN code, and risk assessment for the IRC 6166 issue consistent with the procedures in the EG WSD Classification Guide. Note: all returns accepted as filed or otherwise not selected for audit by the CMC classifier should be risked "Low" in CMC. Weekly, the EG WSD National Gatekeeper will review the Weekly CMC Report to find accepted as filed Form 706 returns that have an IRC 6166 election. All accepted as filed Form 706 returns with an IRC 6166 election will be sent via secure email on a spreadsheet listing to *SBSE Estate & Gift 6166 for processing of the lien package, as outlined in IRM 4.25.2.8.7, Lien Packages to Advisory. The spreadsheet listing should include: Taxpayer name TIN Election type LIN link to the Form 706
Classification of IRC 6163 Elections
4.25.3.5.6 (07-13-2023) Classification of IRC 6163 Elections Taxpayers may seek an extension of time to pay estate tax under IRC 6163 attributable to a reversionary or remainder interest included under Chapter 11 in the value of the gross estate. A taxpayer requests the extension by filing a Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes, and indicates the election on Part 3, question 4 of the Form 706 return. Tax returns indicating an IRC 6163 election are routed to Cincinnati Centralized EG Campus Operation for monitoring and transferred to WSD National Gatekeeper for review; see IRM 3.11.106.18.8, Deferment of Payment (Extension of Time to Pay) - Form 706, for Submission Processing procedures and IRM 4.25.2.8.2.6, Estate Tax Extension of Time to Pay Under IRC 6163, for Cincinnati Centralized EG Campus Operation procedures. The EG WSD National Gatekeeper serves as the subject matter expert (SME) and reviews any IRC 6163 elections routed to EG WSD. The EG WSD National Gatekeeper will review the election for validity and provide a response to the Cincinnati Centralized EG Campus Operation within five (5) business days of receiving the request.
Classification of IRC 2056A Elections
4.25.3.5.7 (07-13-2023) Classification of IRC 2056A Elections The general rule regarding the marital deduction under IRC 2056 is that no deduction is allowed for property passing to a non-U.S. citizen spouse who does not become a citizen of the United States before the estate tax return is filed. There is an exception to this general rule, allowing a marital deduction on property passing to a Qualified Domestic Trust (QDOT) under IRC 2056A. The estate tax on property transferred to a QDOT is deferred until any of the following: Distributions of principal are made to the non-U.S. citizen spouse The non-U.S. citizen spouse dies The QDOT ceases to be a QDOT The basic requirements for a QDOT election can be found in IRC 2056A, Qualified Domestic Trust. During classification, the CMC classifier will consider whether the requirements to make the 2056A election have been met. If the CMC classifier determines that the 2056A requirements are not met, or cannot make this determination without taxpayer contact, then the classifier will select the return for the 2056A issue consistent with IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. The classifier will select the UIL code, SAIN code, and risk assessment for the 2056A issue consistent with the procedures in the EG WSD Classification Guide. If the CMC classifier determines that the 2056A initial eligibility requirements are met and there are no other classification issues on the return, then the return may be accepted as filed following the procedures in IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. The classifier will select the UIL code, SAIN code, and risk assessment for the IRC 2056A issue consistent with the procedures in the EG WSD Classification Guide. Note: all returns accepted as filed or otherwise not selected for audit by CMC classifiers should be risked "Low" in CMC. Weekly, the EG WSD National Gatekeeper will review the Weekly CMC Report to find accepted as filed Form 706 returns that have an 2056A election. All accepted as filed Forms 706 with a 2056A election will be sent via secure email on a spreadsheet listing to *SBSE EEF E&G Campus Classification for processing of the lien package, as outlined in IRM 4.25.2.8.7, Lien Packages to Advisory. The spreadsheet listing should include: Taxpayer name TIN Election type LIN link to the Form 706
CMC Classification - Ancillary Matters
4.25.3.6 (07-13-2023) CMC Classification - Ancillary Matters This section details procedures following CMC classification of estate and/or gift tax returns.
CMC Manager Review and Approval of Classified Returns
4.25.3.6.1 (07-13-2023) CMC Manager Review and Approval of Classified Returns Once a CMC classifier completes the classification of a return in CMC, the classification effort is automatically routed to the CMC manager for review and approval in CMC. The CMC manager is required to approve the classification decision in CMC. Once approved, the return will be made available for delivery to EG Exam or accepted as filed. The steps for reviewing and approving classification efforts in CMC can be found in the CMC Manager/LWIS Delivery Desk Guide. The CMC Manager/LWIS Delivery Desk Guide provides all the EG WSD CMC manager procedures of working within CMC, as well as the EG WSD National Gatekeeper procedures for delivery in LWIS, and the EG WSD Compliance Clerks responsibilities related to CMC Classification. If the CMC manager notices that the CMC classifier missed any required step in the classification process, then the CMC manager will disapprove the classification effort and notate the reason for disapproval in the "Manager Risk Notes" tab of CMC. Disapproving the classification effort will automatically route the return back to the classifier for action; see IRM 4.25.3.5.1 for classification requirements. If CMC manager does not find any errors in the classification effort, then the CMC manager will approve the classification effort and forward to the EG WSD National Gatekeeper and EG WSD Examination Analyst any project/tracking code tables received from CMC classifiers. The CMC manager is also required to perform a monthly 10% written review of all completed classification efforts; see IRM 4.25.3.1.5 regarding the 10% review requirement.
EG WSD Examination Analyst Review of the Weekly Report and Estate and Gift Tax Return Inventory
4.25.3.6.2 (07-13-2023) EG WSD Examination Analyst Review of the Weekly Report and Estate and Gift Tax Return Inventory The EG WSD Examination Analyst reviews a weekly ERCS listing for all returns in primary business code (PBC) 213. This listing will be compared to the Weekly CMC report to create a listing of the following: Returns available in LIN for classification (see IRM 4.25.3.4.3, CMC Classification Assignments) Returns accepted as filed in CMC to provide to the EG WSD Compliance Clerk for closure (see IRM 4.25.3.6.3, Updating of Returns After CMC Classification) Returns selected for audit in CMC to provide to the EG WSD Compliance Clerk for updating (see IRM 4.25.3.6.3, Updating of Returns After CMC Classification) A listing of returns in ERCS exam status code 08 with less than 18 months on the ASED to provide to the EG WSD Group Manager for review (see IRM 4.25.3.3.2, Statute Control for EG WSD Inventory) Weekly, the EG WSD Examination Analyst will run the automated inventory management report that provides CMC classification metrics to share with the EG WSD Group Manager and CMC managers. The metrics captured in the report include: Weekly classification counts by classifier and return type Selection rates by classifier and return type Weekly CMC manager reviews by CMC manager and return type
Updating of Returns After CMC Classification
4.25.3.6.3 (07-13-2023) Updating of Returns After CMC Classification For returns selected for review in CMC classification, the EG WSD Compliance Clerk will use the listing provided by the EG WSD Examination Analyst to update the ERCS exam status code from 06 to 08 and any applicable project or tracking codes. For returns accepted as filed in CMC classification, the EG WSD Compliance Clerk will use the listing of accepted as filed returns provided by the EG WSD Examination Analyst and complete the following steps separately for estate and gift tax returns: Copy and paste the TIN, MFT, and tax period into the database template located in the "EG Data Import" folder of the database tool. Open the database tool and select DC 20 and follow the database tool steps. Note: Completion of the database tool generates up to three documents: (1) a list of returns that could not be closed successfully, (2) a list of returns that could be closed successfully, and (3) a text file of the returns closed successfully. The EG WSD Compliance Clerk will take the following steps with the spreadsheet listing of returns successfully closed out DC 20: Forward the listing via secure email to the EG WSD Examination Analyst to obtain the open Document Locator Number (DLN) of the closed out returns. The EG WSD Examination Analyst will send the listing, with the open DLNs, back to the EG WSD Compliance Clerk via secure email. Add to the listing received back from the EG WSD Examination Analyst the EG WSD Compliance Clerk's IDRS number and the date that the returns were closed. The EG WSD Compliance Clerk will forward the completed spreadsheet in paragraph (3) of this section, along with the text file print out of the returns successfully closed out DC 20, to Kansas City Files using the contact found in the EG WSD CMC Manager/LWIS Delivery Desk Guide. The EG WSD Compliance Clerk will take the following steps with the spreadsheet listing of returns that did not successfully close out DC 20: Add the returns to a master listing of returns that could not be closed out DC 20 that are being monitored for closure. Research the accounts on IDRS to determine the reason the return will not close out using the database tool and indicate in the notes section the reason the return would not close, using the reasons in paragraph (7) of this section. Provide a copy of the updated master listing of returns that could not be closed out DC 20 via secure email to the EG WSD Examination Analyst. Likely reason(s) a return cannot close under paragraph (2) of this subsection are listed below. In each instance, the account information is required to be sent to *SBSE EEF E&G Campus Classification to address the account issue: Form 706-NA: these accounts require routing to Cincinnati Centralized EG Campus Operation for closure and issuance of transfer certificate (see IRM 4.25.2.8.8, Monitoring International Accounts). Merge Account Issues: an account merge issue exists if the estate has two separate accounts where there should only by one account, (see IRM 4.25.2.5.3, Account Merge Issues). Once EG WSD is notified that the account merge issue is addressed, the EG WSD Compliance Clerk will monitor the account until it can be closed using the procedures in paragraph (2) of this subsection. -R Freeze: see IRM 21.5.6.4.35, -R Freeze, for information on this freeze type. Once EG WSD is notified that the -R freeze is removed, the EG WSD Compliance Clerk will monitor the account until it can be closed using the procedures in paragraph (2) of this subsection. -F Freeze: see IRM 21.5.6.4.12, -F Freeze, for information on this freeze type. Once EG WSD is notified that the -F freeze is removed, the EG WSD Compliance Clerk will monitor the account until it can be closed using the procedures in paragraph (2) of this subsection. -A Freeze: see IRM 21.5.6.4.2, -A Freeze, for information on this freeze type generally and IRM 4.25.2.3.1, Amended Form 706 or 706-NA, for information on this freeze type for estate tax returns. In the case of an -A freeze, the amended filing must have also been reviewed and accepted as filed prior to requesting removal of the -A freeze. A copy of the amended return must also be included with the request to Cincinnati Centralized EG Campus Operation to remove the -A freeze. Note: provide the Cincinnati Centralized EG Campus Operation team with the taxpayer name control, TIN, tax period, LIN link, and an indication that the return has been accepted as filed to clear any account issue(s). Once the issue on the account is addressed, the EG WSD Compliance Clerk can then use the database tool to close out the return and remove the return from the master listing of returns being monitored for closure.
Classification of Prompt Assessment Requests
4.25.3.7 (07-23-2018) Classification of Prompt Assessment Requests This section provides information on procedures for classifying Prompt Assessment Requests from the Cincinnati Centralized EG Campus Operation.
Prompt Assessment Requests in General
4.25.3.7.1 (07-13-2023) Prompt Assessment Requests in General Requests for prompt assessment of gift tax liability under IRC 6501(d) are sent from Cincinnati Centralized EG Campus Operation to the EG WSD National Gatekeeper. Refer to IRM 25.6.1.9.6.1, Request for Prompt Assessment, for procedures on prompt assessment requests generally and IRM 4.25.2.5.6, Form 4810, for the Cincinnati Centralized EG Campus Operation prompt assessment procedures. Within two days of receipt of the prompt assessment request, the EG WSD National Gatekeeper will: Review the prompt assessment request for completeness and input the request on the prompt assessment spreadsheet located on the EG WSD SharePoint. Determine whether any of the gift tax returns subject to the prompt assessment request are on LIN and, if so, provide a copy of the return to the EG WSD Compliance Clerk to associate with the paper prompt assessment request. The EG WSD Compliance Clerk will: Scan the prompt assessment request and all attachments. Scan any available gift tax returns subject to the prompt assessment request if not otherwise available on LIN. Create an electronic case folder for the prompt assessment request in the designated location of the EG WSD shared drive. Upload the scanned prompt assessment request and any scanned gift tax returns in the folder created in paragraph (3)(c) of this section. Send a secure email to the EG WSD Prompt Assessment Coordinator to advise that a new prompt assessment request is available for review, along with a copy of the Form 709 returns and electronic folder location for the prompt assessment request. If the prompt assessment request file cannot be sent electronically to the EG WSD Prompt Assessment Coordinator (e.g., the Form 709 returns are too large and not available on LIN), then the physical file will be mailed by the EG WSD Compliance Clerk to the EG WSD Prompt Assessment Coordinator within two days of receipt, along with a completed Form 3210, Document Transmittal. Within five days of receipt of the prompt assessment request, the EG WSD Prompt Assessment Coordinator will review and make a determination on the request. If the prompt assessment request was mailed to the EG WSD Prompt Assessment Coordinator, the Coordinator will mail back the request to the EG WSD Compliance Clerk, along with a completed Form 3210.
Prompt Assessment Request Classification
4.25.3.7.2 (07-13-2023) Prompt Assessment Request Classification The prompt assessment request file from the Cincinnati Centralized EG Campus Operation must include the following, consistent with IRM 4.25.2.5.6, Form 4810: Form 4810, Request for Prompt Assessment under IRC 6501(d), or a written request for prompt assessment, completed by the estate's fiduciary. Gift tax return(s) for which prompt assessment is being requested. Letters testamentary authorizing the taxpayer to act on behalf of the estate. Upon receipt of any prompt assessment request from the Cincinnati Centralized EG Campus Operation, the EG WSD Prompt Assessment Coordinator will first verify the requirements for making a prompt assessment request and confirm the assessment statute expiration date (ASED) applicable to the gift tax return(s) subject to the prompt assessment request; see IRM 25.6.1.9.6.1, Request for Prompt Assessment. If the requirements for making a prompt assessment are met, then the EG WSD Prompt Assessment Coordinator will: Review all schedules on the return for compliance issues. Draft a memorandum to the file that includes the ASED of the return, summary of the facts, issue(s) presented, and the risk rating consistent with the guidelines in the EG WSD Classification Guide. Save a copy of the memorandum in the electronic case folder created by the EG WSD Compliance Clerk for the prompt assessment request; see IRM 4.25.3.7.1, Prompt Assessment Request in General. Send a copy of the completed memorandum to the EG WSD National Gatekeeper. Update the spreadsheet on the EG WSD SharePoint and include the classification determination. If the requirements for making a prompt assessment request are not met, then the EG WSD Prompt Assessment Coordinator will deny the request. The EG WSD Prompt Assessment Coordinator will advise the EG WSD National Gatekeeper that the memorandum drafted in paragraph (3) of this section should be attached to the prompt assessment request and to mail the request back to the Cincinnati Centralized EG Campus Operation for purposes of denying the prompt assessment request. If the EG WSD Prompt Assessment Coordinator selects the return for examination, the EG WSD National Gatekeeper will, within five days of receipt, review the selected issues and the risk rating to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If this review concludes that the prompt assessment request should not be selected, the EG WSD National Gatekeeper will: Draft an updated memorandum to include in the paper case file and electronic case file. Send the updated memorandum to the EG WSD Group Manager via secure email for approval. Provide a copy of the updated memorandum to the EG WSD Prompt Assessment Coordinator via secure email. Following the EG WSD National Gatekeeper review in paragraph (5) of this subsection, cases made available for delivery to EG Exam will be handled by the EG WSD National Gatekeeper within one day of the completed review in the following manner: Determine which EG Exam group to send the prompt assessment request, bearing in mind that location is a priority consideration in distributing cases. Contact the EG Exam Group Manager receiving the return to inform the manager of all issues and the prompt assessment expiration statute date. Provide the gift tax returns (either the paper filed returns or LIN links) to the EG WSD Compliance Clerk. For prompt assessment requests made available for delivery to EG Exam, the EG WSD Compliance Clerk will within one day of receiving the gift tax return from the EG WSD National Gatekeeper: Establish the gift tax return on AIMS/ERCS in exam status code 08 and EGC 1087. Assemble case building materials and upload to the electronic case folder created by the EG WSD Compliance Clerk for the prompt assessment request. Once the gift tax return is established on AIMS, the EG WSD Compliance Clerk will update the return to ERCS exam status code 10 and the EGC of the EG Exam group receiving the return. Ship any paper gift tax return to the EG Exam group if the return cannot be sent electronically; otherwise re-file any paper return that is delivered to EG Exam via LWIS. Note: See IRM 4.25.3.11.3, Shipment of Cases, for procedures to ship paper case files. Once the gift tax return is fully established on AIMS, the EG WSD National Gatekeeper will: Send the gift tax return to the EG Exam Group via LWIS (if possible). Secure email the EG WSD Group Manager the electronic case file. If the EG WSD Prompt Assessment Coordinator does not select the return for examination, or the EG WSD National Gatekeeper review in paragraph (5) of this subsection determines that the request will not otherwise be delivered to EG Exam, the EG WSD National Gatekeeper will provide the case file and a completed memorandum stating this determination to the Cincinnati Centralized EG Campus Operation for re-filing. Electronic case files in EG WSD custody will be retained by EG WSD for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990, Records and Information Management Records Control Schedules. Prompt Assessment requests are subject to the review requirements found in IRM 4.25.3.1.5, Program Controls.
Selected Claims for Refund from the Cincinnati Centralized EG Campus Operation
4.25.3.8 (07-13-2023) Selected Claims for Refund from the Cincinnati Centralized EG Campus Operation This section provides information on procedures for reviewing and establishing selected claims from the Cincinnati Centralized EG Campus Operation.
EG WSD National Gatekeeper Review of Selected Claims for Refund from the Cincinnati Centralized EG Campus Operation
4.25.3.8.1 (07-13-2023) EG WSD National Gatekeeper Review of Selected Claims for Refund from the Cincinnati Centralized EG Campus Operation Upon receiving a selected claim for refund from the Cincinnati Centralized EG Campus Operation, the EG WSD National Gatekeeper will verify that the claim is properly made and timely filed. Refer to IRM 4.25.9.4, Claims for Refund, for procedures on filing claim for refund requests. If the claim for refund is not properly made, is untimely, or is a protective claim not otherwise appropriate for EG Exam, the EG WSD National Gatekeeper will return the claim to the Cincinnati Centralized EG Campus Operation with documentation as to why the claim is being returned. If the claim for refund is properly made, the EG WSD National Gatekeeper will review the "Selected Claim Transmittal" form to confirm that the proper claim amount is reported and make corrections as necessary to this form. Subsequent to the EG WSD National Gatekeeper's review, selected claims for refund will be forwarded to the EG WSD Compliance Clerk, who will establish the claim on AIMS/ERCS in exam status code 08, EGC 1080. Refer to the EG WSD Handbook on procedures for establishing claims. Once the claim is fully established on AIMS, the claim will be prioritized for delivery to EG Exam. Refer to IRM 4.25.3.11, Delivering Work to EG Exam, for EG Exam delivery procedures. Claims from the Cincinnati Centralized EG Campus Operation not available in electronic format will be mailed to EG Exam at the direction of the EG Exam Group Manager. Refer to IRM 4.25.3.11.3, Shipment of Cases, for the procedures to ship paper case files. Selected claims for refund are subject to the review requirements found in IRM 4.25.3.1.5, Program Controls.
Classification of Project Cases
4.25.3.9 (05-27-2026) Classification of Project Cases This section provides information on procedures for the classification of project cases. Project cases are classified and selected by EG WSD Project Coordinators. Current project cases include: Form 706-GS(D) project cases. Project cases are subject to the review requirements found in IRM 4.25.3.1.5, Program Controls. See also IRM 4.25.3.10, Consultations and Referrals from Other Business Units, for procedures applicable to project cases received through referrals and/or consultations.
706-GS(D) Project Cases
4.25.3.9.1 (07-13-2023) 706-GS(D) Project Cases The Cincinnati Centralized EG Campus Operation will forward to the EG WSD Compliance Clerk all of the Form 706-GS(D-1), Notification of Distribution From a Generation-Skipping Trust, where there is no corresponding Form 706-GS(D), Generation-Skipping Transfer Tax Return for Distributions, filed, based on current EG WSD screening criteria. Current screening criteria is maintained by the EG WSD Group Manager on the EG WSD shared drive. The EG WSD Compliance Clerk will maintain the paper Form 706-GS(D-1) filings until one month following the extension deadline for the Form 706-GS(D). After this time period has passed, the EG WSD Compliance Clerk will confirm that a Form 706-GS(D) has not been filed by reviewing the BMFOLT command code on IDRS. If a Form 706-GS(D) has not been filed, the EG WSD Compliance Clerk will: Establish the non-filer case on AIMS/ERCS, in exam status code 08, EGC 1895 along with any applicable tracking code; see Document 6209 for tracking codes used in EG WSD. Assemble and print case building materials. Complete a Form 706-GS (D) classification sheet for each case. Place the case building materials and classification sheet in a separate folder for each case along with the Form 706-GS(D-1) - group together folders for taxpayers receiving a distribution from the same trust in order to be sent to EG Exam together. Note: refer to IRM 4.4.9, Delinquent and Substitute for Return Processing, and the EG WSD Handbook for procedures for establishing and documenting SFR or non-filer cases. When the Form 706-GS (D) cases are fully established on AIMS/ERCS, the EG WSD National Gatekeeper will review the selected cases to ensure the case meets the EG WSD screening criteria. If this review concludes that a case should not have been selected, the EG WSD National Gatekeeper will draft a memorandum to include in the case file and provide a copy of the memorandum to the Cincinnati Centralized EG Campus Operation via secure email. EG WSD Compliance Clerk will place cases selected for audit by EG Exam in a designated location for Form 706-GS (D) cases. The EG WSD National Gatekeeper will consider the case for delivery to EG Exam consistent with delivery procedures. Refer to IRM 4.25.3.11.1, Program Workplan and Case Delivery. Form 706-GS (D) cases surveyed after the EG WSD National Gatekeeper review, or not assigned for examination will be surveyed consistent with the procedures found in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. If the case is not initially surveyed by the EG WSD Gatekeeper after the review in paragraph (4) of this section, but later not sent to EG Exam, the EG WSD National Gatekeeper will document the reason that the case was later surveyed on the classification sheet. The Form 706-GS (D-1) case file will be sent to the Cincinnati Centralized EG Campus Operation for re-filing. Form 706-GS (D) cases are currently paper case files and will be mailed to EG Exam; see procedures in IRM 4.25.3.11.3, Shipment of Cases, for the procedures to ship paper case files.
Consultations and Referrals from Other Business Units
4.25.3.10 (07-23-2018) Consultations and Referrals from Other Business Units This section provides information on procedures for consultations and referrals from other business units.
Consultations from Other Business Units
4.25.3.10.1 (07-13-2023) Consultations from Other Business Units Revenue Agents in other business units may request a four-hour consultation from EG Exam regarding potential estate and gift issues disclosed in the course of their examination by using the Specialist Referral System (SRS). The EG WSD Consultation Coordinator reviews the request on the SRS system to determine if appropriate for EG Exam review. In reviewing the consultation request, the EG WSD Consultation Coordinator may ask the Revenue Agent to provide additional information to help make a determination on the consultation or if a referral is needed. If the EG WSD Consultation Coordinator accepts the consultation request, the request will be transferred on SRS to an EG Exam Group Manager located near the taxpayer, or the Revenue Agent, for consultation. If the EG WSD Consultation Coordinator, or EG Exam, after consultation, determines that a case referral is warranted, the Revenue Agent will be instructed to complete the "Referral to Estate and Gift Tax Program" form and any supporting documentation and submit via secure email to the EG WSD Referral Coordinator. Revenue Officers may request a four-hour consultation from EG Exam regarding assistance with a taxpayer application for estate tax lien discharge, by using SRS. The EG WSD Consultation Coordinator will determine if an estate tax return has been filed for the taxpayer. If an estate tax return was not filed, or if filed but not assigned, the EG WSD Consultation Coordinator will transfer the consultation request to the EG Exam Group Manager located near the taxpayer. If an estate tax return for the taxpayer has been assigned, the EG WSD Consultation Coordinator will transfer the consultation request to the EG Exam Group Manager where the case was assigned.
Referrals from Other Business Units
4.25.3.10.2 (07-23-2018) Referrals from Other Business Units EG WSD receives the following referrals from other business units: General Exam Referrals Global High Wealth Referrals Collection Credit Balance Taxpayer Delinquency Investigation Referrals Offshore Referrals Whistleblower Referrals Offer in Compromise/Doubt as to Liability Referrals Operations Assistance Request Referrals Return Preparer Referrals Referrals from other business units are subject to the review requirements found in IRM 4.25.3.1.5, Program Controls. Referrals from other business units may be submitted to *SBSE EGWSD Referral
General Examination Referrals
4.25.3.10.2.1 (07-13-2023) General Examination Referrals General examination referrals are submitted to the EG WSD Referral Coordinator using *SBSE EGWSD Referral. The referral must include a completed "Referral to Estate and Gift Tax Program" form, found on the EG Exam SharePoint, along with any supporting documentation such as the following: Bank statements Appraisals Deeds Promissory notes Trusts Contracts of sale When an examination referral is received, the EG WSD Referral Coordinator will input related information on the designated spreadsheet maintained on the EG WSD SharePoint. The EG WSD Referral Coordinator will review the referral for audit potential. The spreadsheet will be updated to reflect if the referral has been selected for EG Exam review or rejected. The comment section will include the reason for selection or rejection. For selected referrals, the EG WSD Referral Coordinator will: For filed returns, determine whether the return is available on LIN. Create an electronic case file for the selected case in the designated location on the EG WSD shared drive. Draft a memorandum that includes a summary of the facts, the issues presented, and the risk rating consistent with the guidelines found in the EG WSD Classification Guide. Upload the memorandum and a copy of the LIN link (if available) to the electronic case file created in paragraph (3)(b) of this subsection. Send via secure email to an EG WSD Compliance Clerk the information necessary to establish the AIMS/ERCS record and the location of the electronic case file. For selected referrals, the EG WSD Compliance Clerk will: Establish the examination referral on AIMS/ERCS, in exam status code 08, EGC 1895 along with any applicable tracking code; see Document 6209 for tracking codes used in EG WSD. For filed returns that are not available in digital format (e.g., LIN, Digital Content Retrieval, etc.), obtain the paper return. Follow procedures for completing the Form 2275 found in IRM 4.25.1.3.1, Obtaining Historical Gift Tax Returns (Form 709) and IRM 4.25.1.3.2, Obtaining Estate Tax Returns (Form 706) for Reference. Fax the request to the contact found in EG WSD CMC Manager/LWIS Delivery Guide based on the current exam status code of the return. Assemble case building materials and upload to the electronic case folder created by the EG WSD Referral Coordinator. Note: see Document 6209 for tracking codes used in EG WSD. Refer to IRM 4.4.9, Delinquent and Substitute for Return Processing, and the EG WSD Handbook for establishing and documenting SFR or non-filer referral cases. Once the case is established on AIMS/ERCS, the EG WSD National Gatekeeper will review the selected case issues and the risk rating of the case to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If this review concludes that a case should not have been selected, the EG WSD National Gatekeeper will: Draft an updated memorandum to include in the electronic case file. Send the updated memorandum to the EG WSD Group Manager via secure email for approval. Send a copy of the updated memorandum to the EG WSD Referral Coordinator. Referrals selected for audit after the EG WSD National Gatekeeper review in paragraph (5) of this subsection will be made available to deliver to EG Exam consistent with IRM 4.25.3.11.1, Program Workplan and Case Delivery. Examination referrals surveyed after the EG WSD National Gatekeeper review in paragraph (5) of this subsection, or not assigned for examination, will be surveyed consistent with the procedures found in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. If the case is not initially surveyed by the EG WSD Gatekeeper after the review in paragraph (5) of this section, but later not sent to EG Exam, the EG WSD National Gatekeeper will document the reason that the case was later surveyed in the electronic case file. When a referral is rejected by the EG WSD Referral Coordinator, the EG WSD Referral Coordinator will inform the Revenue Agent and provide the reason for rejection via secure email. Electronic records for general examination referrals are retained by EG WSD for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.
Global High Wealth Referrals
4.25.3.10.2.2 (07-13-2023) Global High Wealth Referrals Global High Wealth (GHW) referrals are submitted to the EG WSD GHW Coordinator using *SBSE EGWSD Referral. The referral must include a completed "Referral to Estate and Gift Tax Program" form, found on the EG Exam SharePoint, along with any supporting documentation. Refer to IRM 4.25.3.10.2.1, General Examination Referrals, for examples of supporting documentation. When a GHW referral is received, the EG WSD GHW Coordinator will input the referral information on the designated spreadsheet maintained on the EG WSD SharePoint. The spreadsheet should be updated to reflect the status of the referral (i.e. SME review, accepted, rejected, etc.), including comment for any EG WSD action taken as a result of the referral. The EG WSD GHW Coordinator will review the referral within five days of receipt to ensure it includes an estate or gift tax issue. If the referral does not include an estate or gift tax issue, the referral should be rejected. For any accepted GHW referral, the EG WSD GHW Coordinator will contact the EG Exam Lead Specialist designated as a subject matter expert (SME) for preliminary review. The EG WSD GHW Coordinator will: For filed returns, determine whether the return is available on LIN. Create an electronic case file for the referral in the designated location on the EG WSD shared drive. Upload a copy of the LIN link (if available) to the electronic case file created in paragraph (4)(b) of this subsection. Send via secure email to the EG WSD Compliance Clerk the information necessary to establish the AIMS/ERCS record and the location of the electronic case file. The EG WSD Compliance Clerk will: Establish the GHW referral on AIMS/ERCS in exam status code 09, source code 45 along with any applicable tracking code; see Document 6209 for tracking codes used in EG WSD. For filed returns that are not available in digital format (e.g., LIN, Digital Content Retrieval, etc.) obtain the paper return. Follow procedures for completing the Form 2275 found in IRM 4.25.1.3.1, Obtaining Historical Gift Tax Returns (Form 709), and IRM 4.25.1.3.2, Obtaining Estate Tax Returns (Form 706) for Reference. Fax the request to the contact found in EG WSD CMC Manager/LWIS Delivery Guide based on the current exam status code of the return. Assemble case building materials and upload to the electronic case folder created by the EG WSD Referral Coordinator in paragraph (3)(b) of this section. Note: refer to IRM 4.4.9, Delinquent and Substitute for Return Processing, and the EG WSD Handbook for procedures establishing and documenting SFR or non-filer referral cases. Once the GHW referral is established on AIMS/ERCS: The EG WSD GHW Coordinator will contact the designated EG Exam SME and EG Exam Group Manager via secure email and request a SME review. The EG WSD GHW Coordinator will send via secure email to the SME and EG Exam Group Manager the electronic case file created in paragraph (3)(b) of this subsection. When the return is not available on LIN, the EG WSD Compliance Clerk will mail the return to the EG Exam Group Manager; see IRM 4.25.3.11.3, Shipment of Cases, for sending returns to EG Exam. The SME will have 45 days to complete the review of the GHW referral. Upon completion of the review, the SME should: Prepare a memorandum including a summary of the facts, issues present, a select or non-select decision, and a risk rating consistent with the guidelines found in the EG WSD Classification Guide. Secure email the memorandum to the EG WSD GHW Coordinator. After the completion of the SME review in paragraph (6) of this subsection, the EG WSD Compliance Clerk will update the AIM/ERCS record to exam status code 08, EGC 1895. The EG WSD GHW Coordinator will update the spreadsheet in paragraph (2) of this subsection to indicate the status of the referral. For GHW referrals selected for audit after SME review, the EG WSD GHW Coordinator will upload the memorandum in paragraph (6)(a) of this subsection to the electronic case file created in paragraph (3)(b) of this subsection. The EG WSD National Gatekeeper will review the selected case file and the risk rating of the case to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If this review concludes that a case should be surveyed, the EG WSD National Gatekeeper will: Draft an updated memorandum to include in the electronic case file. Send the updated memorandum to the EG WSD Group Manager via secure email for approval. Send a copy of the updated memorandum to the EG WSD GHW Coordinator and the EG Exam SME. Following the EG WSD National Gatekeeper review in paragraph (9) of this subsection, cases will be made available for delivery to EG Exam consistent with EG WSD delivery procedures; refer to IRM 4.25.3.11.1, Program Workplan and Case Delivery. GHW referrals not selected for audit in SME review, surveyed after the EG WSD National Gatekeeper review in paragraph (9) of this subsection, or otherwise not delivered to EG Exam will be surveyed consistent with procedures found in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. If the case is not initially surveyed by the EG WSD Gatekeeper after the review in paragraph (9) of this subsection but later not sent to EG Exam, the EG WSD National Gatekeeper will document the reason that the case was later surveyed in the electronic case file. When a GHW referral is rejected or surveyed after SME review, the EG WSD GHW Coordinator will inform the Revenue Agent and provide the reason for rejection or survey via secure email. Electronic records for GHW referrals are retained by EG WSD for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.
Tax Delinquency Investigation Collection Credit Balance Referrals
4.25.3.10.2.3 (07-13-2023) Tax Delinquency Investigation Collection Credit Balance Referrals Tax Delinquency Investigation (TDI) Credit Collection Balance referrals originate when a pre-payment on a Form 706 posts but a Form 706 is not filed on or by the extension date. The EG WSD TDI Coordinator contacts Collection annually to request a list of estate tax return TDI referrals. The EG WSD TDI Coordinator will prepare a spreadsheet with the list of cases, identifying the territory and group, which will be maintained on the EG WSD SharePoint. The most recent territory and group information can be found in the EG WSD Classification Guide. The EG WSD TDI Coordinator will conduct IDRS research to determine whether the estate filed a Form 706 and will select cases where the research indicates that the estate had a filing requirement and no return was filed. For selected cases, the EG WSD TDI Coordinator will: Create an electronic case file for each selected case in the designated location on the EG WSD shared drive. Complete a classification sheet indicating the reason for selection and the risk rating, consistent with the guidelines in the EG WSD Classification Guide. Upload the classification sheet to the electronic case file created in paragraph (4)(a) of this subsection. Send via secure email to an EG WSD Compliance Clerk the location of the electronic case file and a copy of the completed spreadsheet discussed in paragraph (3) of this subsection to establish the AIMS/ERCS record for selected cases. For cases made available for delivery to EG Exam, the EG WSD Compliance Clerk will: Establish the non-filer case on AIMS/ERCS in exam status code 08, EGC 1895 along with any applicable tracking code; see Document 6209 for tracking codes used in EG WSD. Assemble case building materials and upload to the electronic case folder created by the EG WSD TDI Coordinator. Note: refer to IRM 4.4.9, Delinquent and Substitute for Return Processing, and the EG WSD Handbook for procedures establishing and documenting SFR or non-filer referral cases. Once the cases are established on AIMS/ERCS, the EG WSD National Gatekeeper will review the case file and risk rating of each case to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If this review concludes that a case should have been surveyed, the EG WSD National Gatekeeper will: Draft an updated memorandum to include in the electronic case file. Send the updated memorandum to the EG WSD Group Manager via secure email for approval. Send a copy of the updated memorandum to the EG WSD TDI Coordinator. Following the EG WSD National Gatekeeper review in paragraph (6) of this subsection, referrals selected for audit will be made available for delivery to EG Exam consistent with IRM 4.25.3.11.1, Program Workplan and Case Delivery. Cases surveyed after the EG WSD National Gatekeeper review in paragraph (6) of this subsection or otherwise not delivered to EG Exam will be surveyed consistent with the procedures found in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. If the case is not initially surveyed by the EG WSD Gatekeeper after the review in paragraph (6) of this subsection but later not sent to EG Exam, the EG WSD National Gatekeeper will document the reason that the case was later surveyed on the classification sheet. Electronic records for TDI referrals are retained by EG WSD for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.
Offshore Referrals
4.25.3.10.2.4 (07-13-2023) Offshore Referrals Offshore referrals, including but not limited to Offshore Voluntary Disclosure Initiative (OVDI) and Treaty referrals, are submitted to the EG WSD Offshore Referral Coordinator using *SBSE EGWSD Referral. The procedures under this heading apply to all offshore referrals. The referral must include documentation supporting the referral. Refer to IRM 4.25.3.10.2.1, General Examination Referrals, for examples of supporting documentation. When an offshore referral is received, the EG WSD Offshore Referral Coordinator will input information on the designated spreadsheet maintained on the EG WSD SharePoint. The EG WSD Offshore Coordinator will review the referral for audit potential and update the spreadsheet to reflect classification decision. For all selected cases, the EG WSD Offshore Referral Coordinator will create an electronic case file in the designated location on the EG WSD shared drive and determine whether the return is available on LIN. For selected offshore referrals with a filed Form 706 with an expired statute, a Form 906, Closing Agreement on Final Determination Covering Specific Matters, signed by the taxpayer, is first required to establish the return on AIMS/ERCS. For returns requiring a Form 906: The EG WSD Offshore Referral Coordinator will draft a memorandum that includes a summary of the facts and issues, including a statement that the estate tax return is not established on AIMS/ERCS, and that the EG WSD Offshore Referral Coordinator should be notified when a Form 906 agreement is secured. The memorandum should also include a risk rating, consistent with the guidelines found in the EG WSD Classification Guide. The EG WSD Offshore Referral Coordinator will upload to the electronic case file in paragraph (3) of this subsection a copy of the memorandum in paragraph (4)(a) of this subsection, a copy of the LIN link (if available), the documentation provided with the referral, and instructions on obtaining a Form 906 agreement. The EG WSD Offshore Referral Coordinator will notify the EG WSD Compliance Clerk via secure email the information necessary to establish the account on AIMS/ERCS and the location of the electronic case file. The EG WSD Compliance Clerk will research IDRS to determine if any advance payment on the deficiency has been made by the taxpayer. If a payment is posted to the account, the EG WSD Offshore Referral Coordinator will send a request to *SBSE EEF E&G Campus Classification, with "Offshore" in the subject line, for input of transaction code 570. Note: transaction code 570 ensures the payment on the account is not refunded and held until the examination is completed. For returns that are not available on LIN, the EG WSD Compliance Clerk will obtain the estate tax return. Follow the procedures for completing the Form 2275 found in IRM 4.25.1.3.2, Obtaining Estate Tax Returns (Form 706) for Reference, and fax the request to the contact located in EG WSD CMC Manager/LWIS Delivery Guide for closed returns. The EG WSD Compliance Clerk will assemble case building materials and upload to the electronic case folder created by the EG WSD Offshore Referral Coordinator in paragraph (3) of this subsection. Refer to the EG WSD Handbook for case building materials for offshore referrals. The EG WSD National Gatekeeper will review the issue(s) and the risk rating of the case to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If the EG WSD National Gatekeeper's review in paragraph (4)(g) of this subsection concludes that a case should not have been selected, the EG WSD National Gatekeeper will draft a memorandum and provide to the EG WSD Group Manager for approval. Upon approval, the EG WSD National Gatekeeper's memorandum will be uploaded to the electronic case file and provided to the EG WSD Offshore Referral Coordinator via secure email. If the EG WSD National Gatekeeper's review in paragraph (4)(g) of this subsection concludes the selection is appropriate, the EG WSD National Gatekeeper will work with the EG WSD Offshore Referral Coordinator to determine where the case should be sent for examination. The EG WSD National Gatekeeper will send a secure email to the EG Exam Group Manager to advise that the case is being sent to the group without being controlled on ERCS and that any paper filed returns will be mailed to the EG Exam Group Manager. The electronic case file will be attached to the email. Any paper filed returns will be mailed by the EG WSD Compliance Clerk; see IRM 4.25.3.11.3 Shipment of Cases. When the EG WSD Offshore Referral Coordinator receives notification from EG Exam that the Form 906 agreement has been secured, the EG WSD Offshore Referral Coordinator will notify the EG WSD Compliance Clerk to establish the return in exam status code 10 along with any applicable tracking codes; see Document 6209 for tracking codes used in EG WSD. Refer to the EG WSD Handbook for instructions on establishing offshore referrals with an expired statute. For offshore referrals not delivered to EG Exam, the EG WSD Compliance Clerk will re-file any ordered estate tax returns. Refer to the EG WSD CMC Manager/LWIS Delivery Desk Guide for the location of re-filing. For all other selected offshore referrals, including non-filer cases or filed cases with sufficient time on the ASED: The EG WSD Offshore Referral Coordinator will draft a memorandum that includes a summary of the facts, the issues presented, and the risk rating consistent with the guidelines found in the EG WSD Classification Guide. The EG WSD Offshore Referral Coordinator will upload to the electronic case file in paragraph (3) of this subsection a copy of the memorandum in paragraph (5)(a) of this subsection, a copy of the LIN link (if available), and the documentation provided with the referral. The EG WSD Compliance Clerk will establish the case on AIMS/ERCS in exam status code 08, EGC 1895 along with any applicable tracking code; see Document 6209 for tracking codes used in EG WSD. Note: refer to IRM 4.4.9, Delinquent and Substitute for Return Processing, and the EG WSD Handbook for procedures establishing and documenting SFR or non-filer referral cases. Once the case is established on AIMS/ERCS, the EG WSD National Gatekeeper will review the referral to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If the EG WSD National Gatekeeper's review in paragraph (5)(d) of this subsection concludes that a case should not have been selected, the EG WSD National Gatekeeper will draft a memorandum and provide to the EG WSD Group Manager for approval. Upon approval, the EG WSD National Gatekeeper's memorandum will be uploaded to the electronic case file and provided to the EG WSD Offshore Referral Coordinator via secure email. If the EG WSD National Gatekeeper's review in paragraph (5)(d) of this subsection concludes the selection is appropriate, the case will be made available to EG Exam consistent with procedures outlined in IRM 4.25.3.11.1, Program Workplan and Case Delivery. The EG WSD National Gatekeeper will deliver the referral to an EG Exam Lead Specialist designated as a subject matter expert (SME). The EG WSD National Gatekeeper will notify the EG Exam Group Manager and deliver the referral electronically (if possible) or otherwise by physical delivery at the direction of the EG Exam Group Manager. See IRM 4.25.3.11.3, Shipment of Cases. Offshore referral cases surveyed after the EG WSD Gatekeeper review in paragraph (5)(d) of this subsection or not otherwise delivered to EG Exam for audit will be surveyed consistent with the procedures found in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. If the case is not initially surveyed by the EG WSD Gatekeeper after the review in paragraph (5)(d) of this subsection, but later not sent to EG Exam, the EG WSD National Gatekeeper will document the reason that the case was later surveyed in the electronic case file. Electronic and paper records for offshore referrals are retained by the EG WSD Offshore Referral Coordinator for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.
Whistleblower and Informant Referrals
4.25.3.10.2.5 (07-13-2023) Whistleblower and Informant Referrals This section provides information on procedures for. Whistleblower Type A referrals Whistleblower Type B referrals Form 3949-A, Information Referral Whistleblower and Informant referrals are subject to the review requirements found in IRM 4.25.3.1.5, Program Controls.
Whistleblower Type A Referrals
4.25.3.10.2.5.1 (07-13-2023) Whistleblower Type A Referrals Whistleblower referrals where the amount in dispute is less than $2 million are designated as "Whistleblower Type A" referrals and the amount of the award is determined under IRC 7623(a). Refer to IRM 25.2.2.1.1.2, IRC 7623(a) Overview, for more information on the Whistleblower Program. The Whistleblower Office will notify the EG WSD Whistleblower Coordinator when a new Whistleblower Type A referral is available on e-Trak and it will be designated as a Whistleblower Type A referral. Within 90 days of receipt of a Whistleblower Type A claim, the EG WSD Whistleblower Coordinator will: Input related information on the designated spreadsheet maintained on the EG Whistleblower SharePoint. Review the referral for audit potential and confirm a federal estate and/or gift tax matter. Draft a memorandum including a summary of the facts, and issue(s) presented, and a risk rating consistent with the guidelines in the EG WSD Classification Guide. Update the spreadsheet in paragraph (3)(a) of this subsection to reflect whether the referral has been selected for audit by EG Exam and include the reason for the decision. For surveyed Whistleblower Type A referrals, the EG WSD Whistleblower Coordinator will prepare the Form 11369, Confidential Evaluation Report on Claim for Reward, and submit via secure email with the memorandum in paragraph (3)(c) of this section to the EG WSD Group Manager for review and approval. Upon EG WSD Group Manager approval, the EG WSD Whistleblower Coordinator will forward the completed Form 11369 and memorandum by secure email to the Whistleblower Analyst assigned to the referral. Refer to IRM 25.2.2.5, Post Field Review, for procedures on completing and submitting the Form 11369. For selected Whistleblower Type A referrals, the EG WSD Whistleblower Coordinator will: Determine whether any filed return is available electronically. Create an electronic case file for the referral in the designated location on the EG WSD shared drive. Upload the memorandum drafted in paragraph (3)(c) of this subsection, referral information received from the Whistleblower Office, and a copy of any filed return(s) to the electronic case file created in paragraph (5)(b) of this section. Direct the EG WSD Compliance Clerk to establish the AIMS/ERCS record. For selected Whistleblower Type A referrals, the EG WSD Compliance Clerk will: Establish the case on AIMS/ERCS in exam status code 08, EGC 1895 along with any applicable tracking code; see Document 6209 for tracking codes used in EG WSD. For filed returns not available on LIN, obtain the paper filed return. Follow procedures for completing the Form 2275 found in IRM 4.25.1.3.2, Obtaining Estate Tax Returns (Form 706) for Reference and/or IRM 4.25.1.3.1, Obtaining Historical Gift Tax Returns (Form 709). Fax the request to the contact found in EG WSD CMC Manager/LWIS Delivery Guide based on the current exam status code of the return. Assemble case building materials and upload to the electronic case folder created by the EG WSD Whistleblower Coordinator. Note: refer to IRM 4.4.9, Delinquent and Substitute for Return Processing, and the EG WSD Handbook for procedures establishing and documenting SFR or non-filer referral cases. Once the selected Whistleblower referral is established on AIMS/ERCS, the EG WSD National Gatekeeper will review selected issues and risk rating of the case to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If this review concludes that a case should be surveyed, the EG WSD National Gatekeeper will: Draft an updated memorandum and Form 11369 to include in the electronic case file. Send the updated memorandum and Form 11369 to the EG WSD Group Manager via secure email for approval. Send a copy of the updated memorandum and Form 11369 to the EG WSD Whistleblower Coordinator, who will forward these documents to the Whistleblower Analyst assigned to the referral. Refer to IRM 25.2.2.5, Post Field Review, for procedures on completing and submitting the Form 11369. Provide the Whistleblower referral to the EG WSD Compliance Clerk to follow survey procedures in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases, to close out the referral. Cases selected for audit after this review will be delivered to EG Exam consistent with procedures outlined in IRM 4.25.3.11.1, Program Workplan and Case Delivery. For Whistleblower Type A referrals delivered to EG Exam, the EG WSD National Gatekeeper will notify the EG Exam Group Manager and provide a copy of the electronic case file created in paragraph (5)(b) of this subsection; a copy of the notice must also be provided to the EG WSD Whistleblower Coordinator who will upload this correspondence into e-Trak. Delivery of the referral is completed electronically (if possible) or otherwise mailed at the direction of the EG Exam Group Manager; see IRM 4.25.3.11.3, Shipment of Cases. EG Exam should refer to IRM 4.25.11.10, Whistleblower Examinations, and the Whistleblower Type A case insert provided by EG WSD, for procedures on examining and closing Whistleblower case files. At the conclusion of the examination, EG Exam will secure email the completed Form 11369 to the EG WSD Whistleblower Coordinator. It is the responsibility of the EG WSD Whistleblower Coordinator to review this form for completeness and to secure email the Form 11369 to the Whistleblower Office. Electronic records for Whistleblower referrals are retained by EG WSD for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.
Whistleblower Type B Referrals
4.25.3.10.2.5.2 (07-13-2023) Whistleblower Type B Referrals Whistleblower referrals where the amount in dispute is $2 million or more are designated as "Whistleblower Type B" referrals and the amount of the award is determined under IRC 7623(b). Refer to IRM 25.2.2.1.1.1, IRC 7623(b) Overview, for more information on the Whistleblower Program. The Whistleblower Office will notify the EG WSD Whistleblower Coordinator when a new Whistleblower Type B referral is available on e-Trak and it will be designated as a Whistleblower Type B referral. Within 5 days of receipt of the Whistleblower Type B referral, the EG WSD Whistleblower Coordinator will: Input related information on the designated spreadsheet maintained on the EG Whistleblower SharePoint. It is the responsibility of the EG WSD Whistleblower Coordinator to update the spreadsheet as necessary throughout the review process of the Whistleblower Type B referral. The spreadsheet will be updated to reflect if the referral has been made available for delivery to EG Exam or surveyed, including comment explaining the reason(s) for any classification decision or any action taken by EG WSD. Review the referral for audit potential and confirm a federal estate and/or gift tax matter. Draft a memorandum including a summary of the facts, issue(s) presented, and a risk rating consistent with the guidelines in the EG WSD Classification Guide. Update the spreadsheet in paragraph (3)(a) of this subsection to reflect whether the referral has been selected for audit by EG Exam and include the reason for the decision. If the EG WSD Coordinator determines that the referral should be surveyed, the EG WSD Whistleblower Coordinator will: Draft a memorandum as described in paragraph (3)(c) of IRM 4.25.3.10.2.5.1, Whistleblower Type A Referrals. Prepare the Form 11369. Submit the memorandum and Form 11369 by secure email to the EG WSD Group Manager Approval. Forward the completed Form 11369 and memorandum to the Whistleblower Analyst assigned to the referral. Refer to IRM 25.2.2.5, Post Field Review, for procedures on completing and submitting the Form 11369. For selected Whistleblower Type B referrals, the EG WSD Whistleblower Coordinator will: Determine whether any filed return is available electronically. Create an electronic case file for the referral in the designated location on the EG WSD shared drive. Upload the memorandum drafted in paragraph (3)(c) of this subsection, the referral information received from the Whistleblower Office, and a copy of any filed return(s) to the electronic case file created in paragraph (5)(b) of this subsection. Direct the EG WSD Compliance Clerk to establish the AIMS/ERCS record. For referrals selected for SME review, the EG WSD Compliance Clerk will: Within 5 days of receipt of the Whistleblower referral, establish the case on AIMS/ERCS in exam status code 09, EGC 1895 along with any applicable tracking code; see Document 6209 for tracking codes used in EG WSD. For filed returns not available on LIN, obtain the paper return. Follow procedures for completing the Form 2275 found in IRM 4.25.1.3.2, Obtaining Estate Tax Returns (Form 706) for Reference and/or IRM 4.25.1.3.1, Obtaining Historical Gift Tax Returns (Form 709). Fax the request to the contact found in EG WSD CMC Manager/LWIS Delivery Guide based on the current exam status code of the return. Assemble case building materials and upload to the electronic case file created by the EG WSD Whistleblower Coordinator in paragraph (5)(b). Mail the paper filed return to the EG Exam group for the SME in instances where a LIN link is not available; see IRM 4.25.3.11.3, Shipment of Cases. Note: refer to IRM 4.4.9, Delinquent and Substitute for Return Processing, and the EG WSD Handbook for procedures establishing and documenting SFR or non-filer referral cases. The EG WSD Whistleblower Coordinator has the following responsibilities in relation to the EG Exam SME review: Once the referral is established on AIMS/ERCS by the EG WSD Compliance Clerk, send a secure email to the EG Exam Territory Manager, Group Manager, and SME assigned to the Whistleblower Type B referral to advise that there is a referral that EG WSD would like to assign to the SME, and request that the EG Exam Group Manager confirm assignment to the SME. This email will provide the deadline for completion of the SME review. Secure email the SME the electronic case file created in paragraph (5)(b) of this subsection. Provide a follow-up email to the EG Exam Territory Manager, Group Manager and SME two weeks after assignment to confirm the deadline for completion of the SME review. Confirm that the SME completes the review of the Whistleblower Type B referral 10 days prior to the 90-day SME review deadline. Indicate in the case comment section on e-Trak whether a debriefing occurred, and, if not, the reason why a debriefing was not necessary. The SME will review the case file, conduct a taint review along with Operating Division Counsel, and, if necessary, a debriefing. The SME will determine whether the referral should be surveyed or selected for audit by EG Exam. Refer to IRM 25.2.1.4.1, Roles and Responsibilities, for SME responsibilities. Upon completion of the SME review, the SME will: Prepare a memorandum consistent with paragraph (3)(c) of IRM 4.25.3.10.2.5.1, Whistleblower Type A Referrals. This memorandum will be sent via secure email to the EG WSD Whistleblower Coordinator If a paper filed return is mailed to the SME, mail the return back to the EG WSD Compliance Clerk. For Whistleblower Type B referrals surveyed by the SME: The SME will prepare the Form 11369 and submit this form, along with the memorandum in paragraph (9)(a) of this subsection, by secure email to the EG WSD Whistleblower Coordinator who will submit to the Whistleblower Analyst assigned to the referral. Refer to IRM 25.2.2.5, Post Field Review, for procedures on completing and submitting the Form 11369. The EG WSD Whistleblower Coordinator will notify the EG WSD Compliance Clerk via secure email to close the reference return on ERCS with DC 45 and re-file the return. If the case was established as an SFR, the EG Compliance Clerk will follow procedures in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. For Whistleblower Type B referrals selected by the SME, the EG WSD Whistleblower Coordinator will advise the EG WSD Compliance Clerk to update the referral on AIMS/ERCS to exam status code 08 and update the case building materials in the electronic case file created in paragraph (5)(b) of this subsection. Refer to the EG WSD Handbook for case building materials for selected Whistleblower Type B cases. Once the selected Whistleblower referral is updated to exam status code 08 on AIMS/ERCS, the EG WSD National Gatekeeper will review selected issues and risk rating of the case to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If this review concludes that a case should be surveyed or the case is later not delivered to Exam, the EG WSD National Gatekeeper will: Draft an updated memorandum and Form 11369 to include in the electronic case file. Send the updated memorandum and Form 11369 to the EG WSD Group Manager via secure email for approval. Send a copy of the updated memorandum and Form 11369 to the EG WSD Coordinator via secure email. The EG WSD Whistleblower Coordinator will forward these documents to the Whistleblower Analyst assigned to the referral. Refer to IRM 25.2.2.5, Post Field Review, for procedures on completing and submitting the Form 11369. Provide the Whistleblower referral to the EG WSD Compliance Clerk to follow survey procedures in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases, to close out the referral. Following the EG WSD National Gatekeeper review in paragraph (12) of this subsection, referrals selected for audit will be delivered to EG Exam consistent with procedures outlined in IRM 4.25.3.11.1, Program Workplan and Case Delivery. For Whistleblower Type B referrals sent to EG Exam, the EG WSD National Gatekeeper will send the electronic case file created in paragraph (5)(b) of this subsection via secure email to the EG Exam Group Manager and the copy EG WSD Whistleblower Coordinator. The EG WSD Whistleblower Coordinator will upload this correspondence to e-Trak. Electronic delivery of the return will be completed via LWIS. The EG WSD Compliance Clerk will mail the paper filed return to the EG Exam group in instances where a LIN link is not available; see IRM 4.25.3.11.3, Shipment of Cases. EG Exam should refer to IRM 4.25.11.10, Whistleblower Examinations, and the Whistleblower Type B case insert provided by EG WSD, for procedures on examining and closing Whistleblower case files. At the conclusion of the examination, EG Exam will secure email the completed Form 11369 to the EG WSD Whistleblower Coordinator. Refer to IRM 25.2.2.5, Post Field Review, for procedures on completing and submitting the Form 11369. It is the responsibility of the EG WSD Whistleblower Coordinator to review this form for completeness and to secure email the Form 11369 to the Whistleblower Office. Electronic records for Whistleblower referrals are retained by EG WSD for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.
Informant Form 3949-A Referrals
4.25.3.10.2.5.3 (05-27-2026) Informant Form 3949-A Referrals An informant with information regarding an alleged violation of tax law files a Form 3949-A, Information Referral. The Form 3949-A is filed on paper through submission to the Ogden Processing Center or digitally through the Document Upload Tool (DUT); see IRM 3.28.2.3.3, Form 3949-A Digital External Referral Process. Referrals including alleged violations of federal estate or gift tax laws are routed to the Cincinnati Centralized EG Campus Operation; see IRM 3.28.2.4, Initial Screening Criteria, and IRM 3.28.2.10.2, Issue Identification Estate Tax Form 706 and Gift Tax Form 709. Electronic referrals are routed to EG WSD using the Enterprise Case Management (ECM) portal. Note: access to the ECM portal is by BEARS application permission: PROD USER ECM EXT REFERRALS SPEC TAX EMP (ENTERPRISE CASE MANAGEMENT ECM). The EG WSD National Gatekeeper will review referrals submitted to EG WSD to confirm a federal estate or gift tax matter suitable for consideration by EG Exam. For any referral rejected by EG WSD for failure to disclose a tax matter suitable for EG Exam, the EG WSD National Gatekeeper will return the rejected referral to its originator with comment, including the reason(s) for the rejection. Rejections for a referral submitted via the ECM portal should route the referral as "not for business unit" with comment explaining the reason(s) for the rejection. After confirming a federal estate or gift tax matter suitable for referral to EG Exam, the EG WSD National Gatekeeper will route the referral to the EG WSD Information Referral Coordinator for review. Note: DO NOTrecommend a proper routing in the ECM portal for any case that should be rejected for referral to EG Exam. The EG WSD Information Referral Coordinator reviews confirmed referrals for audit potential and tracks referral progress on a spreadsheet maintained on the EG WSD SharePoint. The spreadsheet should track referral progress and include comment for any EG WSD decision or action regarding the referral. Paper referrals rejected by EG WSD are returned to the originator with comment explaining the decision. Referrals received via the ECM portal should be included on the spreadsheet but are maintained separately on the ECM portal. The EG WSD Information Referral Coordinator will create the EG WSD electronic case file for any accepted referral(s), including a digital copy of any return from LIN (if available) and/or other paper records provided with the Form 3949-A referral. For referrals submitted via the ECM portal, include a copy of the ECM portal information itself (i.e. pdf print to file) as well as any supporting documents provided with the referral in the electronic case file. The electronic case file should include a summary of the facts and risk assessment of the potential examination issues consistent with the guidelines in the EG WSD Classification Guide. The EG WSD Information Referral Coordinator will store the electronic case file in the EG WSD shared drive and provide access as needed. For accepted referrals, the EG WSD Information Referral Coordinator will direct the EG WSD Compliance Clerk in establishing each referral on AIMS/ERCS using delinquent and substitute for return (SFR) procedures; see IRM 4.4.9, Delinquent and Substitute for Return Processing, and the EG WSD Handbook for procedures establishing and documenting SFR or non-filer referral cases. Accepted referrals should be established on AIMS/ERCS in exam status code 08, EGC 1895 along with any applicable tracking code; see Document 6209 for tracking codes. The referral will be available to the EG WSD National Gatekeeper once established under paragraph (5) and delivered to EG Exam consistent with procedures outlined in IRM 4.25.3.11.1, Program Workplan and Case Delivery. If the case is not initially selected for examination by the EG WSD National Gatekeeper or subsequently not delivered to examination, the case will be surveyed consistent with the procedures found in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. The EG WSD National Gatekeeper will document the reason for any surveyed return in the electronic case file. All originally filed Form 3949-A and electronic records for information referrals are retained by EG WSD for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.
Doubt as to Liability Referrals
4.25.3.10.2.6 (07-13-2023) Doubt as to Liability Referrals All Doubt as to Liability (DATL) offers involving federal estate and/or gift tax matters should be sent to the EG WSD DATL Coordinator using *SBSE EGWSD Referral. Refer to IRM 4.18.1, Exam Offer-in-Compromise, Offers in Compromise Received in Exam. Within 10 days of receipt, the EG WSD DATL Coordinator will review the offer to determine if appropriate for assignment to an EG Exam group. The EG WSD DATL Coordinator will input related information on the designated spreadsheet maintained on the EG WSD SharePoint. The spreadsheet will be updated to reflect if the referral has been selected for audit by EG Exam review or surveyed, including comment explaining the reason(s) for any classification decision or any action taken by EG WSD. If the offer is not appropriate for assignment to EG Exam, then the EG WSD DATL Coordinator will contact the DATL unit manager to discuss returning the offer and, if agreed, will: Return the offer to the centralized DATL processing unit on a Form 3210. Update the Automated Offer in Compromise (AOIC) database assignment number to 190100000. Document the AOIC database remarks section indicating why the offer was returned. If the offer is appropriate for assignment to EG Exam, then the EG WSD DATL Coordinator will: Determine if the return is available on LIN. Create an electronic case file for the DATL offer in the designated location on the EG WSD shared drive. Draft a memorandum explaining the facts and issues to be resolved and procedures for DATL cases. If the return was previously audited by EG Exam, download the electronic examination file from the Issue Management System (IMS) team website. Upload a copy of the referral document(s) to the electronic case file created in paragraph (4)(b) of this subsection. Mail the DATL paper case file from the DATL unit to the EG WSD Compliance Clerk on a Form 3210. When the case is fully established on AIMS, advise the EG WSD National Gatekeeper that the DATL offer is ready to send to EG Exam. Update AOIC database remarks section to reflect the appropriate EGC contact point and generate an Exam/Specialty Checklist if one was not provided. The EG WSD Compliance Clerk will take the following steps for DATL offers to be sent to EG Exam: Establish the case on AIMS/ERCS, in exam status code 08, EGC 1895, as a claim for abatement or audit reconsideration, using project code 0264, freeze code 9, tracking code 6506, and source code 73. Input the appropriate TIPRA statute. Note: the TIPRA statute is two years from the IRS received date of the offer and will carry an "R" as part of the statute date (e.g. 04152022R). See IRC 7122(f). Alpha statute "AA" should not be used. Verify the posting of TC 480 jurisdiction 2 on the account. If not yet posted, advise the EG WSD DATL Coordinator to inform the DATL group. For returns that are not available on LIN, obtain the paper return. Follow procedures for completing the Form 2275 found in IRM 4.25.1.3.1, Obtaining Historical Gift Tax Returns (Form 709) and/or IRM 4.25.1.3.2, Obtaining Estate Tax Returns (Form 706) for Reference. Fax the request to the contact found in EG WSD CMC Manager/LWIS Delivery Guide based on the current exam status code of the return. Assemble case building materials and upload to the electronic case folder created by the EG WSD DATL Coordinator in paragraph (4)(b). Refer to the EG WSD Handbook for case building materials for DATL offers. The paper DATL offer file sent to EG Exam must contain the following notice: "On July 16, 2006, the Tax Increase Prevention Reconciliation Act of 2005 (TIPRA) was implemented. TIPRA mandates an acceptance of any offer where a decision is not made in 24 months. If a liability included in the offer is disputed in any court proceeding, that time period is not included when calculating the two-year time frame. Issuance of a determination letter stops the 24-month time frame. The 24 months does not include the time that a protested, rejected offer is under consideration in Appeals. See IRC 7122(f)" . When the DATL offer case is fully established on AIMS, the EG WSD National Gatekeeper will notify the EG Exam Group Manager via secure email of the DATL offer and electronically send the electronic case file to the EG Exam Group Manager. Electronic delivery of the return will be completed via LWIS whenever possible. The EG WSD Compliance Clerk will mail the paper DATL file, and return (when an electronic image is not available) to the EG Exam Group Manager; see IRM 4.25.3.11.3, Shipment of Cases. The DATL offer can be rejected, accepted, withdrawn or returned for failure to respond. The offer can be terminated if the taxpayer dies during the investigation. Refer to IRM 4.18.1, Offers in Compromise Received in Exam, on examining and closing DATL cases and IRM 5.19.24.7, Processing DATL Offers, for returned offers. It is the responsibility of the EG WSD DATL Coordinator to monitor the AOIC database monthly to ensure all cases are assigned to EG Exam by the centralized DATL processing unit. If the EG Exam rejects the offer: The case file will be closed to the Technical Services office responsible for the assigned group for the Independent Administrative Review (IAR) of the examiner's decision. See IRM 4.18.1, Offers in Compromise Received in Exam. EG Exam will notify the EG WSD DATL Coordinator by secure email that a proposed rejected offer was sent to Technical Services for review. See IRM 4.25.9.5, Offers In Compromise. For Technical Services IAR procedures, see IRM 4.8.8.8.3, Independent Administrative Review Procedures for Rejected Offers. Upon receiving email notification from EG Exam, and subsequent notifications from Technical Services, the EG WSD DATL Coordinator will make the necessary status updates to AOIC: DATL AOIC Status Updates Remarks: Date proposed rejection is sent to Technical Services Date rejection is mailed to the taxpayer Date the case is returned to EG Exam for further investigation Date the protest was received Date the case is sent to Appeals or closed to the Campus Assignment - will be either Appeals or Closure Proposed Disposition Final Disposition IAR Specialty Checklist - including the date the case was forwarded to Appeals, if applicable, or final disposition. If the taxpayer withdraws the offer: EG Exam will close the case file to Technical Services (see IRM 4.18.1, Offers in Compromise Received in Exam) and advise the EG WSD DATL Coordinator by secure email of the withdrawal effective date in order for the Coordinator to update AOIC remarks and assignment; see IRM 4.25.9.5, Offers in Compromise. Technical Services will issue the withdrawal acknowledgment letter to the taxpayer and notify the EG WSD DATL Coordinator by secure email that these actions have been taken. The EG WSD DATL Coordinator will update AOIC remarks with the withdrawal (letter or other form) effective date and date withdrawal acknowledgment letter mailed to the taxpayer, and assignment to "EG Close." AOIC remarks must indicate that the taxpayer was advised that a withdrawal waives taxpayer appeal rights. For Technical Services withdrawal procedures, see IRM 4.8.8.8.4, Withdrawn Offers. The EG WSD DATL Coordinator will update the AOIC IAR Checklist to reflect the withdrawal of offer. If the offer is accepted by EG Exam: EG Exam will close the case to Technical Services (see IRM 4.18.1, Offers in Compromise Received in Exam) and advise the EG WSD DATL Coordinator by secure email of the proposed disposition for the Coordinator to update the AOIC database: remarks, proposed disposition, and assignment; see IRM 4.25.9.5, Offers in Comprise. Once the proposed acceptance has been approved and the acceptance letter mailed to the taxpayer, Technical Services will secure email the EG WSD DATL Coordinator, indicating that these actions have been taken; see IRM 4.8.8.8.5, Accepted Offers. The EG WSD DATL Coordinator will update the final disposition on AOIC to "accepted by Exam" and close the offer off AOIC by updating the assignment to "Estate and Gift Close." If the proposed acceptance is not approved and the case is returned to EG Exam for further action, Technical Services will email the EG WSD DATL Coordinator who will remove the proposed disposition and update the AOIC remarks accordingly; see IRM 4.8.8.8.5, Accepted Offers. The EG WSD DATL Coordinator will update the AOIC Exam/Specialty Checklist to reflect the acceptance of offer, if applicable.
Operations Assistance Request Referrals from Taxpayer Advocate Service
4.25.3.10.2.7 (07-13-2023) Operations Assistance Request Referrals from Taxpayer Advocate Service The EG WSD Taxpayer Advocate Service (TAS) Point of Contact (POC) is the EG WSD National Gatekeeper who reviews all Operation Assistance Requests (OAR) from the Taxpayer Advocate Service to EG WSD. OAR requests are received on a Form 12412 sent to *SBSE EGWSD OAR Requests. Refer to IRM 13.1.19, Advocating with Operations Assistance Requests (OARs), for the OAR process. The EG WSD National Gatekeeper will determine the action required to resolve the OAR and assign the case to the appropriate party within 72 hours of receipt. If the Form 12412 has "EXPEDITE" notated in the criteria code box, then the determination and assignment must be completed within 24 hours of receipt. Refer to IRM 13.1.19.6.2, Business Operating Division (BOD)/Function OAR Liaison Responsibilities. It may be necessary to request that the EG WSD Compliance Clerk establish AIMS/ERCS control before assignment. Also, if the case was previously examined and closed, it may be necessary to designate the case as "audit reconsideration," "claim for refund," or "abatement" based on the facts of the request. The EG WSD National Gatekeeper will: Create an electronic case file for the selected case in the designated location on the EG WSD shared drive, including a copy of the OAR and a copy of the return from LIN (if available). Send via secure email to an EG WSD Compliance Clerk the information necessary to establish the AIMS/ERCS record (if needed), or update the AIMS/ERCS record to exam status code 08, and the location of the electronic case file. The EG WSD Compliance Clerk will: Establish or update the OAR on AIMS/ERCS, in exam status code 08, EGC 1895 along with any applicable tracking code; see Document 6209 for tracking codes used in EG WSD. Refer to the EG WSD Handbook for procedures for establishing examination OAR cases. For returns that are not available on LIN, obtain the paper return. Follow procedures for completing the Form 2275 found in IRM 4.25.1.3.1, Obtaining Historical Gift Tax Returns (Form 709) and/or IRM 4.25.1.3.2, Obtaining Estate Tax Returns (Form 706) for Reference. Fax the request to the contact found in EG WSD CMC Manager/LWIS Delivery Guide based on the current exam status code of the return. The EG WSD National Gatekeeper will send the electronic case file created in paragraph (4)(a) of this subsection via secure email to the EG Exam Group Manager receiving the referral. The referral will be sent to EG Exam based on the location of the taxpayer. The email subject line will include the word "Expedite" to ensure priority consideration by the receiving EG Exam Group Manager. If a paper filed return is mailed to the receiving manager, the EG WSD National Gatekeeper will notify the manager of the incoming return. Delivery of an electronic return (if available) will be completed via LWIS. The EG WSD Compliance Clerk will mail paper filed return to the EG WSD Group Manager; see IRM 4.25.3.11.3, Shipment of Cases. The EG WSD National Gatekeeper will request regular status updates from the EG Exam Group Manager, up to and including the final exam determination. When the requested action has been completed, the EG WSD National Gatekeeper will complete Form 12412 and return it to the Taxpayer Advocate Service (TAS).
Return Preparer Referrals
4.25.3.10.2.8 (07-13-2023) Return Preparer Referrals Return preparer referrals may be sent to the EG WSD Return Preparer Coordinator using *SBSE EGWSD Referrals. Referrals may be submitted by the Return Preparer Office, which maintains a central depository for return preparer referrals originating from other sources, including the Office of Professional Responsibility, the Lead Development Center, other Business Units, and the public. Referrals from RPO may include Form 14157, Return Preparer Complaint, or a Form 14426, Return Preparer Office (RPO) Referral. The EG WSD Return Preparer Coordinator should be familiar with IRM 20.1.6, Preparer and Promoter Penalties, and IRM 4.11.51, Return Preparer Program, addressing preparer penalties. Referrals from EG Exam may be submitted using *SBSE EG WSD Referrals, including a Return Preparer/Appraiser Referral form signed by the EG Exam Group Manager. The referral should include all relevant workpapers, correspondence, interview notes, tax return information, and appraisal information regarding the applicable penalty. When a return preparer referral is received, the EG WSD Return Preparer Coordinator will input related information on the designated spreadsheet maintained on the EG WSD SharePoint. The spreadsheet will be updated to reflect if the referral has been selected for EG Exam review or rejected, including comment explaining the decision. The EG WSD Return Preparer Coordinator will review the referral for audit potential, including the applicable statute and assessment statute expiration date (ASED): If... Then... And... referral relates to a return preparer penalty case penalty is applied under IRC 6694(a) and/or IRC 6695 ASED is three years after return or claim for refund with respect to which penalty is assessed was filed; see IRC 6696(d) referral relates to an appraiser penalty case penalty is applied under IRC 6695A ASED is three years after return or claim for refund with respect to which penalty is assessed was filed; see IRC 6696(d) referral relates to aiding and abetting understatement of tax liability penalty case penalty is applied under IRC 6701 ASED is not applicable referral relates to a return preparer penalty case (willful or reckless conduct) penalty is applied under IRC 6694(b) ASED is not applicable Note: a Form 872-D, Consent to Extend the Time on Assessment of Tax Return Preparer Penalty, is used to extend the ASED under IRC 6694(a) and/or IRC 6695. The EG WSD Return Preparer Coordinator will consult with the RPO to determine if there is any available information regarding the preparer on the Return Preparer database maintained by RPO and SB/SE Research. This consult will provide important information regarding any prior complaints, examinations, or criminal investigation for this preparer. This inquiry may indicate a need to coordinate the referral with other pending exams to eliminate duplication of work. The EG WSD Return Preparer Coordinator must also consider if there is currently a Program Action Case pending for this preparer/appraiser. For all return preparer referrals, the EG WSD Return Preparer Coordinator will draft a memorandum, including a summary of the facts and the issues presented, and a risk rating, consistent with the guidelines found in the EG WSD Classification Guide. For selected referrals, the EG WSD Return Preparer Coordinator will create an electronic case file on the designated location in the EG WSD shared drive. The EG WSD Return Preparer Coordinator will upload the following documents to the electronic case file: The memorandum drafted in paragraph (6) of this subsection Documents relevant to the penalty, including a copy of any tax return(s) prepared by the preparer who is being considered for the penalty, workpapers or transcripts, or any information received directly from the preparer. A Form 5809, Preparer Penalty Case Control Card. Note: multiple penalties can be included on the card for one preparer. The EG WSD Group Manager will forward the Form 5809 to the ECS Program Manager for approval and signature. The Form 5809 will be uploaded and retained in the electronic preparer penalty case file. See IRM 20.1.6, Preparer and Promoter Penalties, and IRM 4.1.10.7.1, Creating Return Preparer Penalty Cases. After receiving the approval of the ECS Program Manager for the return preparer penalty referral, the EG WSD Return Preparer Coordinator will send via secure email to the EG WSD Compliance Clerk the information necessary to establish the ERCS record. Penalty cases are established on ERCS only, not on AIMS with a MFT between P1 and P4, PC, PJ, PK, PL, PM and PN depending on the type of penalty. A separate ERCS record is created for each penalty. For instruction on creating a case on ERCS, see the EG WSD Handbook and IRM 4.1.10.7.1, Creating Return Preparer Penalty Cases. The EG WSD Compliance Clerk will: Establish the case on ERCS, in exam status code 08 and EGC 1895. Assemble case building materials, and place in the electronic file folder created by the EG WSD Return Preparer Coordinator in paragraph (7) of this section. Once the case is established on ERCS, the EG WSD National Gatekeeper will review selected issues and risk rating of the case to ensure it is consistent with the guidelines found in the EG WSD Classification Guide. If this review concludes that a case should not have been selected, the EG WSD National Gatekeeper will: Draft an updated memorandum to include in the electronic case file. Send the updated memorandum to the EG WSD Group Manager via secure email for approval. Send a copy of the updated memorandum to the EG WSD Referral Coordinator. Following the EG WSD National Gatekeeper review in paragraph (11), cases selected for audit will be delivered to EG Exam consistent with procedures outlined in IRM 4.25.3.11.1, Program Workplan and Case Delivery. However, if the referral originated from EG Exam, the EG WSD National Gatekeeper should send the referral to the EG Exam group that provided the referral. Return preparer referrals surveyed after the EG WSD National Gatekeeper review in paragraph (11) of this subsection, or not assigned for examination, will be surveyed consistent with the procedures found in IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. If the case is not initially surveyed by the EG WSD Gatekeeper after the review in paragraph (11) of this subsection, but later not sent to EG Exam, the EG WSD National Gatekeeper will document the reason that the case was later surveyed in the electronic case file. Electronic records for return preparer referrals are retained by EG WSD for the required retention period and then destroyed. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.
Delivering Cases to EG Exam
4.25.3.11 (05-27-2026) Delivering Cases to EG Exam This section provides information on procedures for supplying EG Exam with returns for audit.
Program Workplan and Case Delivery
4.25.3.11.1 (05-27-2026) Program Workplan and Case Delivery EG WSD provides returns selected for audit to EG Exam in regular intervals to ensure program workplan progress. See IRM 4.25.3.3, Workplan Development and Inventory. The number of returns delivered to any examination group in a given interval is determined by EG WSD relying upon: EG Exam workplan progress Volume of assigned and unassigned inventory Examiner availability and staffing data provided by EG Exam The EG WSD National Gatekeeper is primarily responsible for effecting the return delivery to EG Exam and completes the return delivery in a manner determined by the EG WSD Group Manager. The EG WSD National Gatekeeper is additionally supported by the EG WSD Examination Analyst and the EG WSD Compliance Clerk. The EG WSD Group Manager and/or the EG WSD National Gatekeeper may consult with EG Exam prior to any return delivery to confirm current data, including staffing changes, unassigned inventory requirements, or special circumstances impacting return delivery (e.g., training). The EG WSD Examination Analyst generates a delivery form at the request of the EG WSD National Gatekeeper prior to return delivery. The form(s) report data for each examination group, including the volume of unassigned returns and program workplan progress (i.e. new starts, closures, etc.). Delivery forms should also report returns available for delivery in CMC/LWIS and any pending closures under IRM 4.25.3.11.2, Post-Delivery and Surveying Cases. Returns should be delivered electronically to the CBF using the CMC/LWIS system whenever possible, including a copy of the risk summary or other documentation of the EG WSD classification outcome for each delivered return; see IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns. EG WSD will also deliver any other file(s) considered by EG WSD through the classification process. If a return is not available for delivery via CMC/LWIS, return delivery may be completed using secure email sent directly to the EG Exam Group Manager(s). If a return cannot be delivered electronically, the EG WSD National Gatekeeper and EG WSD Compliance Clerk must arrange for physical delivery of the paper return directly with the EG Exam group with notice to the EG WSD Group Manager. Note: specific guidance using the CMC/LWIS system is available in the EG WSD CMC Manager LWIS Delivery Desk Guide. In delivering work to EG Exam, the EG WSD National Gatekeeper gives priority to the following: Claims for refund, either from the Cincinnati Centralized EG Campus Operation or identified during EG WSD classification Global High Wealth referrals (see IRM 4.25.3.10.2.2, Global High Wealth Referrals) Offshore referrals (see IRM 4.25.3.10.2.4, Offshore Referrals) Whistleblower Type A or Type B referrals (see IRM 4.25.3.10.2.5, Whistleblower and Informant Referrals) DATL Offers (see IRM 4.25.3.10.2.6, Doubt as to Liability) Other returns selected for examination through classification not delivered under paragraph (4) are delivered to EG Exam adhering to the following considerations: Risk Rating: a risk rating is completed for all classification efforts based on the guidelines on the EG WSD Classification Guide. Higher-risked returns should be selected over lower-risked returns when delivering work to EG Exam. Returns are delivered by geographic proximity to an examination group when possible, but higher-risked returns take precedence over lower-risked returns regardless of location. The risk rating considers both the quality of the issue selected and the degree of the potential adjustment. Location: while the EG Exam program has a national inventory and delivers returns based on national workload priorities, it is most economical and efficient for examiners to work returns in their respective localities due to familiarity with their own area, local issues, valuations, state law issues, taxpayers, and representatives which makes for a more effective and efficient examination. To deliver work to EG Exam, the EG WSD National Gatekeeper will: Review priority work and select returns for delivery Transfer selected work to EG Exam (via LWIS and CBF, if possible, or secure email) Direct the EG WSD Compliance Clerk to update the ERCS record Monitor completion of delivery to EG Exam To deliver work to EG Exam, the EG WSD Compliance Clerk: Mails paper files for work that cannot be sent to EG Exam electronically (see IRM 4.25.3.11.3, Shipment of Cases) Updates the ERCS exam status code from 08 to 10 for returns delivered to EG Exam Updates the ERCS secondary business code (SBC) and employee group code (EGC) at the direction of the EG WSD National Gatekeeper Notifies the EG WSD National Gatekeeper upon completion
Post-Delivery and Surveying Cases
4.25.3.11.2 (05-27-2026) Post-Delivery and Surveying Cases The EG WSD National Gatekeeper should complete a review of the ERCS exam status code 08 inventory following each return delivery. For any returns classified and selected for audit under IRM 4.25.3.5 (i.e. source code 20 regular classification), the EG WSD National Gatekeeper may survey any return due to insufficient time remaining on the assessment statute expiration date (ASED) and/or quality of selected issue using DC 35 without prior approval from the EG WSD Group Manager. Note: refer to the EG WSD CMC Manager/LWIS Delivery Guide for guidelines for closing returns due to the ASED. To survey a return, the EG WSD National Gatekeeper provides to the EG WSD Compliance Clerk the MFT, Name Control and/or Taxpayer Name, Tax Period, and TIN for each surveyed return. The EG WSD Compliance Clerk will close each return using the IDRS command code AMSOC as soon as practical. Follow procedures in IRM 4.25.3.6.3, Updating Returns After CMC Classification, to resolve any issues preventing closure (i.e. freeze code). For returns successfully closed using the IDRS command code AMSOC, the EG WSD Compliance Clerk will: Monitor the return account for transaction code 421 Reverse Examination Indicator. Document the TC421 DLN on Form 9856, Attachment Alert, and forward to Kansas City Files for processing. Note: See Estate and Gift Tax Knowledge Management, EG Contacts, for Kansas City Files contact information. For any surveyed return classified by EG WSD under IRM 4.25.3.9 (i.e. substitute-for-return, non-filer or other project cases), or IRM 4.25.3.10 (i.e. referrals/consultations), the EG WSD National Gatekeeper will draft a memorandum documenting the reason(s) for closure. A copy of the memorandum should be signed by the EG WSD Group Manager and included in the electronic case file maintained on the EG WSD shared drive for record retention. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990. For returns surveyed under this paragraph (4), the EG WSD Compliance Clerk will close the return by following the procedures detailed in paragraphs (1)-(3) with the following additional instructions: If ... Then ... Surveyed return is a source code 24-25, 44 substitute-for-return or non-filer case Complete a Form 10904, Request for Record Deletion from AIMS/ERCS, and to submit to the Cincinnati Centralized EG Campus Operation AIMS/ERCS analyst for closure of the AIMS/ERCS record with DC 33 (Error Account With No Return). Note: Refer to IRM 4.4.2.1. Non-Examined Closures and Deleting AIMS Records . Surveyed return is in paper format Write "Surveyed, DC 35" in red ink on the front of the return. Complete the Form 9856, Attachment Alert, for each tax period and deliver the paper file to the Kansas City mailing address listed in the EG WSD CMC Manager/LWIS Delivery Guide.
Shipment of Cases
4.25.3.11.3 (07-13-2023) Shipment of Cases When EG WSD has a paper case file to send to EG Exam, the EG WSD Compliance Clerk will send cases to the appropriate EG Exam office, accompanied by a Form 3210, indicating the number of returns included with each shipment. An AIMS status label will be attached to the Form 5348, AIMS/ERCS Update (Examination Update), for each return. For electronic case files, the EG WSD National Gatekeeper will provide an electronic Form 3210 via secure email to the EG Exam Group Manager indicating for each return transmitted: Taxpayer name Taxpayer TIN Tax Period MFT
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