ET-WSD receives unresolved account referrals from the Accounts Maintenance Research Hold (AMRH) unit for entities that have account freezes on employment tax return modules. Because these cases are resolved internally by ET-WSD or sent to SB/SE Campus Examination Centralized Specialty Tax Operations Centralized Excise Department Team 203 (Team 203) to make the requisite account adjustments, AMRH referrals do not fall under a workplan category. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories. AMRH referrals are reviewed to clear a credit/debit balance or account freeze without taxpayer contact or additional assessments.

AMRH referrals are received in the mail. All AMRH request documentation mailed must be saved and logged consistent with the procedures for referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

AMRH referrals typically include the following documentation:

The ET-WSD Tax Examiner (TE) will notify the ET-WSD AMRH Referral Coordinator via secured email of receipt of the new AMRH referral after the referral is properly scanned and logged consistent with IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

The ET-WSD AMRH Referral Coordinator will research IDRS command code TXMODA to determine whether the account has a debit balance, a credit balance, or a zero balance, as well as the appropriate freeze code on the account.

The ET-WSD AMRH Referral Coordinator will update the electronic AMRH referral log for the fiscal year and quarter the referral was received and save the updated log on the ET-WSD shared drive in the location for AMRH referrals. The referral log will include:

The ET-WSD AMRH Referral Coordinator will send a secured email to Team 203 that includes all the documentation that was received with the AMRH referral and a spreadsheet that includes at least the following information for the referrals being sent:

The AMRH electronic referral log will be updated with the following information:

The AMRH Referral Coordinator will store an electronic copy of the documentation for the AMRH referral and the referral log on the ET-WSD secured shared drive location for AMRH referrals to be retained by ET-WSD for the required retention period. 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.

All AMRH referral reviews are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

Bank Secrecy Act (BSA) Examination provides monthly information reports to ET-WSD on employers suspected of non-compliance with Employment Tax laws. BSA referrals are generated through the BSA Examination compliance reviews at check cashing businesses or other businesses frequented by employers with significant cash transactions. Selected BSA referrals often fall into the plan category "Worker Classification." See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories. See IRM 4.23.5.2.1, Classification of Employment Tax Issues for an explanation of worker classification.

BSA referral documents and spreadsheet are mailed to ET-WSD. BSA referral documentation mailed to ET-WSD must be handled consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals, but follow procedures in paragraph (4) of this section on the proper logging of BSA referrals.

BSA referrals typically include the following documentation:

BSA Examination also sends via secured email an electronic spreadsheet listing information for all referrals to the ET-WSD gatekeeper. The ET-WSD gatekeeper will review the spreadsheet for accuracy and store a copy of the electronic spreadsheet as the log for BSA referrals on the ET-WSD secured shared drive location for BSA referrals to be retained by ET-WSD for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

BSA referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

BSA referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific classification procedures pertaining to BSA referrals. Selected BSA referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-selected BSA referrals are handled consistent with IRM 4.23.23.5.2, Classification.

All BSA selected referrals that required surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All BSA referral classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

All BSA documentation and the BSA referral log will be retained by ET-WSD on the ET-WSD secured shared drive location for BSA referrals for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

ET-WSD receives referrals from SB/SE Field Collection functions on an ad hoc basis based on information learned while working collections cases. These referrals can include any issue or situation involving employment tax non-compliance. As such, selected Collection referrals can fall under any of the plan categories. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

Collection referral documents are mailed to ET-WSD. Collection referral documentation mailed to ET-WSD must be scanned, saved, and logged consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

Collection referrals typically include the following documentation:

Collection referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

Collection referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific classification procedures pertaining to Collection referrals. Selected Collection referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-selected Collection referrals are handled consistent with IRM 4.23.23.5.2, Classification.

All selected Collection referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All Collection referral classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

ET-WSD receives referrals from Criminal Investigation (CI) regarding employment tax issues that CI believes lack criminal potential on an ad hoc basis. When there is a firm indication of substantial civil tax potential, CI will recommend a direct referral in the form of a "prime lead." See IRM 9.4.1.5.1.5, Direct Referrals - Prime Leads, for information regarding CI prime leads. CI prime leads can include any issue or situation involving employment tax non-compliance. As such, selected CI prime leads can fall under any of the plan categories. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

ET-WSD receives criminal restitution referrals on cases worked by CI from SB/SE Technical Services on an ad hoc basis for appropriate civil examination disposition. See IRM 25.26.1, Criminal Restitution and Restitution-Based Assessments, for information regarding criminal restitution cases. See IRM 4.8.6, Criminal Restitution and Restitution-Based Assessments, regarding Technical Services criminal restitution procedures. Criminal restitution referrals can include any issue or situation involving employment tax non-compliance. As such, selected Criminal restitution referrals can fall under any of the plan categories. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

CI prime leads and criminal restitution documents are emailed to the ET-WSD email referral box (*SBSE ET WSD Referrals). All CI referral documentation emailed to ET-WSD must be saved and logged consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

CI prime leads typically include the following documentation:

Criminal restitution referrals typically include the following documentation:

CI referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

CI referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to CI referrals. Selected CI referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases.

All CI selected referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All CI classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

ET-WSD receives penalty abatement requests from SB/SE Field Collection Revenue Officers (RO). See IRM 5.1.15.6, Business Master File (BMF) IRC 6020(b) Adjustments, for procedures followed in SB/SE Field Collection for identifying and routing delinquent returns that have a transaction code (TC) 300 assessment. Penalty abatement requests may also come from the Taxpayer Advocate Service (TAS) with an Operation Assistance Request (OAR), as well as other business units. See IRM 13.1.19.2, TAS OAR Process Overview, for TAS and Operating Division responsibilities for coordinating responses to an OAR. ET-WSD specific instructions for the TAS OAR process are found in IRM 4.23.23.8.1, Operations Assistance Requests from Taxpayer Advocate Services.

When a penalty abatement request is received from SB/SE Field Collection, it is the result of an RO securing one of the following Employment Tax return types that were previously assessed under a Substitute for Return with a TC 300 assessment by Employment Tax Examination:

Penalty abatement requests from SB/SE Field Collections are received in ET-WSD either in the mail or by the email referral box (*SBSE ET WSD Referrals). All penalty abatement request documentation mailed or emailed to ET-WSD must be saved and logged consistent with the procedures for referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

Penalty abatement requests typically include the following documentation:

The ET-WSD TE will notify the ET-WSD Penalty Abatement Coordinator via secured email of receipt of the new penalty abatement request after the request is properly scanned and logged consistent with IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

The ET-WSD Penalty Abatement Coordinator will conduct the following research on penalty abatement requests:

The ET-WSD Penalty Abatement Coordinator will print the researched IDRS transcripts and notate them to indicate which tax periods present a penalty abatement issue and the relevant freeze code.

If the research conducted by the ET-WSD Penalty Abatement Coordinator determines that there are issues on the account requiring taxpayer contact, the ET-WSD Penalty Abatement Coordinator will handle the Penalty Abatement request consistent with cases selected at classification. See IRM 4.23.23.5.3, Procedures for Selected Cases.

If the research conducted by the ET-WSD Penalty Abatement Coordinator does not determine that the account requires taxpayer contact, the ET-WSD Penalty Abatement Coordinator will forward the Form 3870, attached documents, and IDRS transcripts via secured email to Team 203 to make the requisite account adjustments.

The ET-WSD Penalty Abatement Coordinator will update the spreadsheet log stored on the ET-WSD secured shared drive location for penalty abatement requests with the disposition of the penalty abatement request. All penalty abatement documentation is stored in the ET-WSD secured shared drive location for penalty abatement requests to be retained by ET-WSD for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

All penalty abatement dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

A prompt determination request is made by trustee for any unpaid tax liability of the bankruptcy estate under Bankruptcy Code 505(b)(2). See IRM 4.8.2.11.4.5, Prompt Determinations. ET-WSD receives prompt determination requests from the Centralized Insolvency Operation (CIO) in Campus Collections. CIO screens each prompt determination request to ensure it meets the requirements outlined in Rev. Proc. 2006-24. See IRM 5.9.4.9.1, Processing Prompt Determination Requests, for CIO’s review of prompt determination requests. Selected prompt determination requests fall under the "Other" plan category. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

ET-WSD reviews prompt determination requests for the following returns:

The IRS has 60 days from the date of receipt of a request to advise the trustee of the decision to examine a tax return or accept it as filed. The IRS must notify the trustee within 180 days (or any additional time permitted by the bankruptcy court) after the request has been received of any tax, interest, and penalties due. Failure to notify the trustee within 60 days or to complete the examination within 180 days discharges the estate, the trustee, the debtor, and any successor to the debtor from any liability for the tax. See IRM 5.9.4.9, Prompt Determination Requests from Trustee, for information regarding prompt determination timeframes.

Prompt determination requests are sent via overnight mail to ET-WSD and must be scanned and saved consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals. The ET-WSD TE will deliver the paper copy of the prompt determination request to the ET-WSD Prompt Determination Coordinator.

Upon receipt of the paper copy of the prompt determination request, the ET-WSD Prompt Determination Coordinator will log the request on the electronic spreadsheet consistent with procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

Prompt determination documentation generally includes:

For all returns other than Form 941-X, the ET-WSD Prompt Determination Coordinator will monitor the taxpayer account using IDRS command code BMFOLT to confirm when the TC 150 posts. After the TC 150 post date, the Prompt Determination Coordinator will prepare an electronic selected case folder for the ET-WSD gatekeeper to forward to Campus to establish the case on ERCS. See IRM 4.23.23.5.3, Procedures for Selected Cases.

The Prompt Determination Coordinator will review the request to confirm that the requirements of Rev. Proc. 2006-24 are met. See IRM 5.9.4.9.1, Processing Prompt Determination Requests, for a list of the elements for a prompt determination request.

If the prompt determination does not meet the requirements of Rev. Proc 2006-24, the Prompt Determination Coordinator will complete Letter 5531, Prompt Determination of Tax Liability, in the following manner:

If the prompt determination request meets the requirements of Rev. Proc 2006-24, the Prompt Determination Coordinator will follow the classification steps found in the ET-WSD Desk Guide for reviewing the prompt determination request to determine whether to select or accept the return.

If the return is accepted as filed, the Prompt Determination Coordinator will:

If the prompt determination request is selected, the Prompt Determination Coordinator will:

Complete the appropriate electronic spreadsheet log on the ET-WSD secured shared drive. The date the Letter 5351 is prepared is used to complete the following fields:

All prompt determination request dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

All electronic prompt determination documentation and the electronic prompt determination log will be retained by ET-WSD on the ET-WSD secured shared drive location for prompt determinations for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

ET-WSD receives return preparer referrals from the Return Preparer Office (RPO). RPO maintains a central depository for these referrals which may originate from other sources, including the Office of Professional Responsibility (OPR), the Lead Development Center (LDC), other business units, and the public. See IRM 25.20.1, Complaint Referrals, for RPO procedures for processing and reviewing complaint referrals. Selected return preparer referrals fall under the "Other" plan category. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

Return preparer referrals from RPO are received in ET-WSD either in the mail or by email. All return preparer referral documentation mailed or emailed to ET-WSD must be saved and logged consistent with the procedures for referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

Return Preparer referrals from RPO may include the following documentation:

The ET-WSD TE will notify the ET-WSD Return Preparer Coordinator (RPC) via secured email of receipt of the new referral after the referral is properly scanned and logged consistent with IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

Within 30 days of receipt, the ET-WSD RPC will review the referral for audit potential, which is limited to the application of penalties per IRC 6694 and IRC 6695 (preparer), and IRC 6701 (aiding and abetting).

The ET-WSD RPC should be familiar with IRM 20.1.6, Preparer, Promoter, Material Advisor Penalties, and IRM 4.11.51, Return Preparer Program, dealing with preparer penalties.

The statute of limitations on assessment for IRC 6694 and IRC 6695 expires three years from the date the related return or claim for refund was filed. See IRC 6696(d) and Form 872-D, Consent to Extend the Time on Assessment of Tax Return Preparer Penalty. There is no statute of limitation on assessment of penalties under IRC 6694(b) and IRC 6701 because the penalty does not depend on the filing of a return.

The ET-WSD RPC will consult with 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 will provide important information regarding any prior complaints or examination 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 ET-WSD RPC must also determine whether there is currently a Program Action Case (PAC) pending for the preparer. See IRM 4.23.23.3.1.1.7.1, Program Action Case (PAC) Procedures for Employment Tax, for information on PAC procedures.

Selected RPC referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. The following additional procedures will be followed:

Non-Selected RPO referrals are handled consistent with IRM 4.23.23.5.2, Classification.

The ET-WSD RPC will update the spreadsheet log stored on the ET-WSD shared drive with the disposition of the penalty abatement request. All electronic RPO documentation and the RPO referral log will be retained on the ET-WSD secured shared drive location for RPO referrals for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

All return preparer referral dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

Additionally, the ET-WSD RPC provides the following to Employment Tax Exam regarding RPO referrals:

Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, requests to determine the proper classification of workers (i.e. employee or independent contractor) for federal employment tax and income tax withholding are processed by SB/SE Exam Field Support Operations at the Brookhaven Campus. See IRM 7.50.1.1.1, Background, for information on the SS-8 program. Selected SS-8 Unit referrals fall under the "Worker Classification" plan category. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

Referrals are made from the SS-8 Unit to ET-WSD for the following reasons:

SS-8 Unit referrals are received in the mail. All SS-8 Unit referral documentation sent to ET-WSD must be saved and logged consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

SS-8 Unit referrals typically include the following documentation:

SS-8 Unit referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

SS-8 Unit referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to SS-8 Unit referrals. Selected SS-8 Unit referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-Selected SS-8 Unit referrals are handled consistent with IRM 4.23.23.5.2, Classification.

All SS-8 Unit referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All SS-8 Unit referral classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

If Employment Tax Examination cannot secure Form W-2 or Form W-2c, Corrected Wage and Tax Statement, at the conclusion of an agreed case, the examiner will prepare a "Tickler File" to send to ET-WSD for monitoring. See IRM 4.23.8.10.2, Delinquent Forms W-2/W-2c Not Secured by Examiner, for instructions to Employment Tax Examination on preparing the Tickler File referrals. Tickler File referrals are penalty cases and fall under the "Other" plan category. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

The Tickler File referral is made to ET-WSD in order to monitor whether the employer files the Forms W-2/W-2c by January 31 of the subsequent year.

Tickler File referrals are e-mailed to ET-WSD. All Tickler File referral documentation sent to ET-WSD must be saved and logged consistent with the procedures for electronically received referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

Tickler File referrals typically include the following documentation (see IRM 4.23.8.10.2, Delinquent Forms W-2/W-2c Not Secured by Examiner, for Employment Tax examiner procedures):

Upon receipt of the Tickler File referral, the ET-WSD Tickler File Coordinator will log the referral on the electronic Tickler File spreadsheet log consistent with procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals, by recording the following fields on the Tickler File log for the appropriate year that the Forms W-2/W-2c are due, based on the Form 4668:

When the data becomes available on IDRS, typically by the end of May after the January 31 due date for the Forms W-2/W-2c, the ET-WSD Tickler File Coordinator will research IDRS Command Codes

If IDRS research determines that the taxpayer is in compliance with the Form 4668, this determination is notated on the Tickler File log and the case is not selected.

Additional reasons that a Tickler File referral is not selected include:

The ET-WSD Tickler Filer Coordinator will select the Tickler File referral based on the current selection criteria tolerances contained in the Employment Tax WSD Handbook. Select determinations will be notated on the Tickler File log.

For selected Tickler File referrals, an electronic case file will be created and will be established consistent with the procedures for selected cases found in IRM 4.23.23.5.3, Procedures for Selected Cases.

Instruction will be provided to ET-WSD Gatekeeper to establish on ERCS only selected Tickler File referrals with the following information:

All Tickler File selected referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All Tickler File referral classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

All electronic Tickler file documentation and the Tickler File referral log will be retained by ET-WSD on the ET-WSD secured shared drive location for Tickler File referrals for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

This section provides information on procedures for

The mission of the Return Integrity and Compliance (RICS) fraud referral program is to provide a formal mechanism for receiving, evaluating, and prioritizing new and emerging refund fraud referral issues, as well as to develop and communicate servicewide solutions in real-time to protect revenue. The RICS Fraud Referral program provides several services, including:

Pursuant to the mission of the RICS fraud referral program, ET-WSD receives RICS referrals related to refundable employer credits resulting from the Coronavirus Disease 2019 (COVID-19) legislation enacted in 2020 and 2021, specifically the Employer Retention Credit (ERC) (from section 2301 of P.L. 116-136, Coronavirus Aid, Relief and Economic Security (CARES) Act) and sick and family leave credit (from sections 7001, 7003, and 7005 of P.L. 116-127, Families First Coronavirus Response Act (FFCRA))"COVID-19 Employer Credits" ). For general information regarding COVID-19 Employer Credits, see IRM 3.14.2.7.4.10.2, Employee Retention Credit and IRM 3.14.2.7.4.10.1, Credits for Qualified Sick and Family Leave Wages.

COVID-19 RICS referrals fall under the "Employment Tax Credits" plan category. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

COVID-19 RICS referrals are uploaded by RICS to the designated location on the ET-WSD shared drive. RICS employees requiring access to the ET-WSD shared drive should contact the ET-WSD Manager.

The following process is used by RICS to upload referrals:

The following documents should be included by RICS with the referral:

Daily, the ET-WSD Tax Examining Technician checks the designated location for COVID-19 RICS referrals and takes the following steps:

Weekly, the ET-WSD tax examining technician will send a secured email to the ET-WSD COVID-19 Employer Credits Coordinator with the total number of COVID-19 RICS referrals received in the past week.

The ET-WSD COVID-19 Employer Credits Coordinator will provide a monthly listing to the ECS senior data analyst or ET-WSD compliance intelligence analyst to upload IDRS and external Paycheck Program Protection (PPP) loan forgiveness data to assist in the classification reviewer. External PPP loan forgiveness data is used pursuant to the MOU between SB/SE and the Small Business Administration for the limited purpose of determining whether a taxpayer’s ERC should be disallowed. The monthly listing is also provided to the Office of Fraud Enforcement (OFE) to filter out cases with fabricated entities or fraud related issues. These cases will be treated as non-selects, consistent with procedures found in IRM 4.23.23.5.2, Classification.

Within two weeks of receipt of the IDRS information and completed filtering by OFE discussed in paragraph (9) of this section, The ET-WSD COVID-19 Employer Credits Coordinator will classify the referral. Refer to the ET-WSD Desk Guide for specific procedures on classifying COVID-19 RICS referrals.

Selected cases are "expedite" cases and follow the procedures found in IRM 4.23.23.5.3, Procedures for Selected Cases, and IRM 4.23.23.6.2, Examination Inventory Order Filling and Delivery. Selected COVID-19 RICS referrals will receive a project code consistent with the guidance found in the ET-WSD Desk Guide and one of the below tracking codes based on the primary selection issue:

Non-selected COVID-19 RICS referrals, except for those filtered out by OFE in paragraph (9) of this section, will be provided back to the referring RICS employee via secured email in order to remove freeze codes, and will otherwise be handled as non-selected referrals consistent with IRM 4.23.23.5.2, Classification.

ET-WSD receives referrals from the United States Department of Labor (DOL) district offices regarding Employment Tax issues. This workstream is maintained through a Memorandum of Understanding (MOU) between the IRS and DOL. The MOU is an agreement of the parties to deliver a joint initiative to improve compliance with laws and regulations administered by the IRS and DOL. DOL referrals often involve worker classification but can include any issue or situation involving Employment Tax non-compliance. As such, selected DOL referrals can fall under any of the plan categories. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

DOL referral documents are mailed to ET-WSD. All DOL referral documentation must be saved and logged consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

The information provided for DOL referrals is not uniform due to the receipt of such referrals from the various district offices around the country. However, the documentation usually includes information regarding the name of the employer that was investigated by DOL and the employer’s TIN.

DOL referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

DOL referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to DOL referrals. Selected DOL referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-Selected DOL referrals are handled consistent with IRM 4.23.23.5.2, Classification.

All DOL selected referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All DOL classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

ET-WSD receives referrals from the United States Occupational Safety and Health Administration (OSHA) within the DOL regarding Employment Tax issues. OSHA referrals often involve worker classification but can include any issue or situation involving Employment Tax non-compliance. As such, selected OSHA referrals can fall under any of the plan categories. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

OSHA referral documents are mailed to ET-WSD. All OSHA referral documentation must be saved and logged consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

The information provided for OSHA referrals is not uniform due to the receipt of such referrals from the various district offices around the country. However, the documentation usually includes information regarding the name of the employer that was investigated by OSHA and the employer’s TIN.

OSHA referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

OSHA referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to OSHA referrals. Selected OSHA referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-Selected OSHA referrals are handled consistent with IRM 4.23.23.5.2, Classification.

All OSHA selected referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All OSHA classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

ET-WSD receives referrals from state agencies pursuant to a MOU with state workforce agencies as part of the Questionable Employment Tax Practices (QETP). QETP referrals often involve worker classification but can include any issue or situation involving Employment Tax non-compliance. As such, selected QETP referrals can fall under any of the plan categories. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

QETP referral documents from state workforce agencies are mailed, sent via secure data transfer (SDT) to ET-WSD, or routed through the Governmental Liaison’s office. All QETP referral documentation must be saved and logged consistent with the procedures for referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

The information provided for QETP referrals varies by state agency and the Employment Tax issues, but frequently contain state agency audit reports.

QETP referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

QETP referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to QETP referrals. Selected QETP referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-Selected QETP referrals are handled consistent with IRM 4.23.23.5.2, Classification.

All QETP selected referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All QETP classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

ET-WSD also receives outgoing QETP referrals from Employment Tax Examination to be mailed to the state workforce agencies as a result of an Employment Tax examination. . The ET-WSD Examiner forwards the documents to ET-WSD via secured e-mail. Like incoming referrals, outgoing QETP referral documentation must be saved and logged consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

Within ten days after the end of the month in which outgoing QETP referrals are received, the ET-WSD gatekeeper transfers the outgoing referrals to the state workforce agencies via SDT.

Quarterly, the ET-WSD gatekeeper prepares a summary of cumulative fiscal year information that includes the following:

The report prepared in paragraph (10) of this section is provided on a quarterly basis to the ET-WSD group manager, the SB/SE Employment Tax policy analyst responsible for QETP, and the Governmental Liaison policy analyst for QETP.

The Classification Settlement Program (CSP) establishes procedures that allow businesses and tax examiners to resolve worker classification cases as early in the administrative process as possible, thereby reducing taxpayer burden. The procedures also ensure that the taxpayer relief provisions under Section 530 of the Revenue Act of 1978 are properly applied. Under the CSP, examiners can offer the business under examination a worker classification settlement using a standard closing agreement. See IRM 4.23.6.1.1, Background, for general information regarding CSP agreements. As such, selected CSP falls under the worker classification plan category. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

Since the CSP closing agreement includes a provision that the taxpayer complies prospectively, taxpayers are monitored to determine if they have complied with the CSP closing agreements.

CSP agreements secured by Employment Tax Examination are sent via secured e-mail to ET-WSD for monitoring. See IRM 4.23.6.17, Monitoring CSP Agreements. All CSP agreements must be saved and logged consistent with the procedures for electronically received referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals. The order of the documents received should be consistent with the order described in paragraph (5) of this section and saved in the CSP folder on the ET-WSD shared drive.

In completing the CSP spreadsheet tracking log as stated in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals, the ET-WSD TE will use the spreadsheet for the appropriate month and signing year of the CSP agreement. The following fields need to be completed on the spreadsheet:

Per IRM 4.23.6.17, Monitoring CSP Agreements, CSP Agreements from Employment Tax Examination should include the following documentation:

Monthly, the ET-WSD CSP Coordinator will update the CSP Index with the data collected during the prior month in the CSP tracking log discussed in paragraph (4) of this section. The CSP Index is an electronic spreadsheet log saved in the CSP folder on the ET-WSD shared drive that records all historical CSP agreements received in ET-WSD.

Annually, the ET-WSD gatekeeper will identify the CSP agreements on the spreadsheet tracking log that are subject to review that were entered for the two prior years. At this time, CSP agreement referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers See IRM 4.23.23.5.1, Pre-Classification Planning.

CSP agreement referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to CSP agreement referrals. Selected CSP agreement referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. In addition, the CSP Index will be updated with the classification determinations. Non-selected CSP Agreement referrals are handled consistent with IRM 4.23.23.5.2, Classification.

If classification determines the taxpayer is no longer operating and is not operating the same business under a new entity, the ET-WSD TE will mail the original CSP agreement to the Federal Records Center.

All electronic CSP documentation, including the electronic spreadsheet log for CSP agreements, will be saved on the ET-WSD secured shared drive location for CSP agreements to be retained by ET-WSD for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

All CSP agreement selected referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All CSP agreement classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

Quarterly, the ET-WSD CSP Coordinator provides an updated copy of the CSP Index to the ET policy analyst responsible for worker classification programs.

Voluntary Classification Settlement Program (VCSP) is an optional program that provides taxpayers that meet the program’s criteria with an opportunity to voluntarily reclassify their workers as employees. The settlement offers limited federal employment tax liability for past non-employee treatment. This program is meant to be easy, quick, and inclusive for taxpayers to provide for future compliance with employment tax laws, while remaining consistent with the program’s objectives and constraints. To participate, the taxpayer must apply to participate in the program, meet certain eligibility requirements, and enter into a closing agreement with the IRS. See IRM 4.23.20.1.1, Background, for general information regarding VCSP agreements. Selected VCSP agreement cases fall under the worker classification plan category. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

Applications for VCSP agreements are received and reviewed by the Centralized Employment Tax Operation (CETO). CETO will determine whether the taxpayer meets the requirements to enter into a VCSP agreement. See IRM 4.23.20.7, Eligibility Review – General, regarding the requirements to enter a VCSP agreement. CETO will also arrange for the execution of the VCSP agreement. See IRM 4.23.20.3, Location of VCSP Files.

Since the VCSP closing agreement includes a provision that the taxpayer complies prospectively, taxpayers are monitored to determine if they have complied with the VCSP closing agreements.

VCSP agreements secured by CETO are sent via secured e-mail to ET-WSD for monitoring. All VCSP agreements must be saved and logged consistent with the procedures for electronically received referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals. The order of the documents received should be consistent with the order described in paragraph (6) of this section and saved in the VCSP folder on the ET-WSD shared drive.

In completing the VCSP spreadsheet tracking log as stated in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals, the ET-WSD TE will use the spreadsheet for the appropriate month and signing year of the VCSP agreement. The following fields need to be completed on the spreadsheet:

Refer to IRM 4.23.20.14, Monitoring Closing Agreement-Post Assessment, for the documentation that should be included from Employment Tax Examination.

Monthly, the ET-WSD VCSP Coordinator will update the VCSP Index with the data collected during the prior month in the VCSP tracking log discussed in paragraph (5) of this section. The VCSP Index is an electronic spreadsheet log saved in the VCSP folder on the ET-WSD shared drive that records all historical VCSP agreements received in ET-WSD.

Annually, the ET-WSD gatekeeper will identify the VCSP agreements on the spreadsheet tracking log that are subject to review that were entered for the two prior years. At this time, VCSP agreement referrals are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

VCSP agreement referrals are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to VCSP agreement referrals. Selected VCSP agreement referrals will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. In addition, the VCSP Index will be updated with the classification determinations. Non-selected VCSP Agreement referrals are handled consistent with IRM 4.23.23.5.2, Classification.

All electronic VCSP documentation, including the electronic spreadsheet log for VCSP agreements, will be saved on the ET-WSD secured shared drive location for VCSP agreements to be retained by ET-WSD for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

All VCSP agreement selected referrals that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

All VCSP agreement classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

Quarterly, the ET-WSD VCSP Coordinator provides an updated copy of the VCSP Index to the ET policy analyst responsible for worker classification programs.

The Voluntary Closing Agreement Program (VCAP) offers a process whereby certain employment tax issues not involving worker classification issues can be permanently and conclusively resolved through a voluntary closing agreement process. See IRM 4.23.25.1.1, Background, for information on VCAP. As a result, selected VCAP cases can fall under any of the plan categories, other than worker classification. See IRM 4.23.23.2.1, Examination Workplan Development, for a list of all current plan categories.

VCAP request documents are mailed to ET-WSD. See IRM 4.23.25.4, Process for Submission of Voluntary Closing Agreement Requests to Resolve Employment Tax Issues (Non-Worker Classification), for guidance on submitting a VCAP request. All VCAP documentation must be saved and logged consistent with the procedures for mailed referrals found in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals.

Refer to IRM 4.23.25.4, Process for Submission of Voluntary Closing Agreement Requests to Resolve Employment Tax Issues (Non-Worker Classification), for what is included in a VCAP request.

In completing the VCAP spreadsheet tracking log as stated in IRM 4.23.23.3.1.4, Receipt and Tracking of Referrals, the ET-WSD TE will use the spreadsheet for the appropriate year of the VCAP request. The following fields need to be completed on the spreadsheet:

Within 60 days of receipt, the ET-WSD Voluntary Request Coordinator will take the following actions:

For VCAP requests that are denied, the ET-WSD Voluntary Request Coordinator will

For VCAP requests that are initially accepted, the ET-WSD Voluntary Request Coordinator will

The ET-WSD Voluntary Request Coordinator will complete the VCAP spreadsheet tracking log by entering in the following fields:

The ET-WSD gatekeeper will take the following steps for VCAP requests initially accepted:

All electronic VCAP documentation, including the electronic spreadsheet log for VCAP requests, will be saved on the ET-WSD secured shared drive location for VCAP requests to be retained by ET-WSD for the required retention period. Refer to IRM 1.15.3.2, Destroying Records in the Custody of the IRS, and Document 12990.

All VCAP request classification dispositions are subject to the review requirements found in IRM 4.23.23.1.4, Program Controls.

The Employment Tax Examination Program’s (ETEP) source of work is derived from IRS data sources. This work source identifies employers that are likely misclassifying their payees as contractors. Criteria used in the filters vary annually depending on work plan needs, volume of source data, evaluation of prior year(s) results, and other factors as determined by the ET-WSD group manager. See IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention, regarding the annual process for reviewing lead filters.

The internal data includes information from various forms, including but not limited to:

Current steps, filters, and tolerance thresholds for the ETEP work source are detailed in the ETEP process document, that is subject to the review and update requirements found in IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention. It is the responsibility for the ECS senior data analyst or ET-WSD compliance intelligence analyst to maintain the ETEP process document. All ET-WSD process documents are stored on the ET-WSD SharePoint site.

Internal data for the ETEP work source is stored in the Compliance Data Warehouse (CDW) and is available in April for those forms filed in the previous calendar year.

The ET-WSD group manager will decide when and whether to request a data run of the ETEP lead inventory based on the review status 08 inventory as described in IRM 4.23.23.2.3, Monitoring ET-WSD Inventory. The ET-WSD group manager or ET-WSD gatekeeper will request an ETEP lead run using the data request process in IRM 4.23.23.4.1.1, Procedures for Making Data and Lead Requests.

The ECS senior data analyst or ET-WSD compliance intelligence analyst will provide the leads to the ET-WSD group manager and ET-WSD gatekeeper that meet the current filters in a spreadsheet that includes the following columns for the classifier to complete:

Once the leads are received by the ET-WSD group manager and ET-WSD gatekeeper, ETEP are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

ETEP leads are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to ETEP leads. Selected ETEP leads will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-selected ETEP leads are handled consistent with IRM 4.23.23.5.2, Classification.

All ETEP leads that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

Form SS-8 requests to determine the proper classification of workers (i.e., employee or independent contractor) for federal employment tax and income tax withholding are processed by SB/SE Exam Field Support Operations at the Brookhaven Campus (SS-8 unit). See IRM 7.50.1.1.1, Background, for information on the SS-8 program.

ET-WSD has access to e-Trak data from the SS-8 unit which is used in case selection to identify if a worker relationship still exists after the IRS has determined an employer-employee relationship. Additionally, SS-8 data is used by ET-WSD to identify additional payers that might have worker misclassification issues.

In addition to the Form SS-8, internal data for Form SS-8 leads include various forms, including but not limited to

Current steps, filters, and tolerance thresholds for the Form SS-8 work source are detailed in the Form SS-8 process document that is subject to the review and update requirements found in IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention. It is the responsibility of the ECS senior data analyst or ET-WSD compliance intelligence analyst to maintain the Form SS-8 work source process document. All ET-WSD process documents are stored on the ET-WSD SharePoint site.

Internal data for the Form SS-8 work source is stored in the SS-8 unit e-Trak and the CDW. All data for this work source is available in April for those forms filed in the previous calendar year.

The ET-WSD group manager will decide when and whether to request a data run of the Form SS-8 lead inventory based on the review status 08 inventory as described in IRM 4.23.23.2.3, Monitoring ET-WSD Inventory. The ET-WSD group manager or ET-WSD gatekeeper will request a Form SS-8 lead run using the data request process in IRM 4.23.23.4.1.1, Procedures for Making Data and Lead Requests.

The ECS senior data analyst or ET-WSD compliance intelligence analyst will provide the leads to the ET-WSD group manager and ET-WSD gatekeeper that meet the current filters in a spreadsheet that includes the following columns for the classifier to complete:

Once the leads are received by the ET-WSD group manager and ET-WSD gatekeeper, Forms SS-8 are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

Form SS-8 leads are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to Form SS-8 leads. Selected Form SS-8 leads will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-selected Form SS-8 leads are handled consistent with IRM 4.23.23.5.2, Classification.

All Form SS-8 leads that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

The Form 8919 allows workers receiving a Form 1099-MISC with non-employee compensation to self-report their share of FICA and Medicare tax, which is an attachment to the worker’s Form 1040. A worker can report income from up to five separate employers on the form. Workers who receive a Form 1099-MISC (or Form 1099-NEC for income received after January 1, 2020) who take the position that they are not an employee and correspondingly report the employee’s share of social security tax with their Form 1040 must also file a Form SS-8.

The Form 8919 is often filed by taxpayers who filed a Form SS-8, or by taxpayers who received both a Form W-2 and Form 1099-MISC for the same tax year.

The Form 8919 work source seeks to identify taxpayers whose workers have filed Form 8919 for income received from the taxpayer, indicating that the worker was not properly treated as an employee.

Current steps, filters, and tolerance thresholds for the Form 8919 work source are detailed in the Form 8919 process document, which is subject to the review and update requirements found in IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention. It is the responsibility for the ECS senior data analyst or ET-WSD compliance intelligence analyst to maintain the Form 8919 process document. All ET-WSD process documents are stored on the ET-WSD SharePoint site.

Internal data for the Form 8919 work source is stored on the Compliance Data Warehouse. All data for this work source is available in February for those forms filed in the previous calendar year.

The ET-WSD group manager will decide when and whether to request a data run of the Form 8919 lead inventory based on the review status 08 inventory as described in IRM 4.23.23.2.3, Monitoring ET-WSD Inventory. The ET-WSD group manager or ET-WSD gatekeeper will request a Form 8919 lead run using the data request process in IRM 4.23.23.4.1.1, Procedures for Making Data and Lead Requests.

The ECS senior data analyst or ET-WSD compliance intelligence analyst will provide to the ET-WSD group manager and ET-WSD gatekeeper the leads that meet the current filters in a spreadsheet that includes the following columns for the classifier to complete:

Once the leads are received by the ET-WSD group manager and ET-WSD gatekeeper, Form 8919 leads are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

Form 8919 leads are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to Form 8919 leads. Selected Form 8919 leads will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-selected Form 8919 leads are handled consistent with IRM 4.23.23.5.2, Classification.

All Form 8919 leads that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

Employers in Puerto Rico (PR) are required to pay FICA taxes on wages paid to their employees. The FICA taxes paid by employers in Puerto Rico can be reported on

If a PR resident taxpayer is not required to file a Form 1040 and is self-employed, the taxpayer would still need to report and pay self-employment tax. A taxpayer from Puerto Rico can report self-employment tax on

The Departmento de Hacienda de Puerto Rico (the Hacienda) is the Puerto Rico Department of Treasury, which oversees Puerto Rico’s administration of the tax laws. The Hacienda requires information reporting for payments made to individuals over $500 and requires that the taxpayer specify the amount of withholding. Two of the Hacienda information reporting forms are

Data from the Form 480.6A and Form 480.6B has occasionally been provided to ET-WSD from the Hacienda. This information is compared with IRS internal data sources to identify potential employment tax noncompliance, including worker misclassification, by businesses in Puerto Rico.

Current steps, filters, and tolerance thresholds for the Form 480 work source are detailed in the Form 480 process document, which is subject to the review and update requirements found in IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention. It is the responsibility for the ECS senior data analyst or ET-WSD compliance intelligence analyst to maintain the Form 480 process document. All ET-WSD process documents are stored on the ET-WSD SharePoint site.

Internal data for this work source is stored on the Compliance Data Warehouse. Internal data sources include, but are not limited to

Internal data for this work source is available in April for those forms filed in the previous calendar year. Data for the Form 480.6A and Form 480.6B is provided from the Hacienda on an ad hoc basis.

The ET-WSD group manager will decide when and whether to request a data run of the Form 480 lead inventory based on the review status 08 inventory as described in IRM 4.23.23.2.3, Monitoring ET-WSD Inventory. The ET-WSD group manager or ET-WSD gatekeeper will request a Form 480 lead run using the data request process in IRM 4.23.23.4.1.1, Procedures for Making Data and Lead Requests.

The ECS senior data analyst or ET-WSD compliance intelligence analyst will provide the leads to the ET-WSD group manager and ET-WSD gatekeeper that meet the current filters in a spreadsheet that includes the following columns for the classifier to complete

Once the leads are received by the ET-WSD group manager and ET-WSD gatekeeper, Form 480 leads are considered by the ET-WSD group manager, ET-WSD gatekeeper, and ET-WSD compliance intelligence analyst during weekly classification planning calls in determining and sending classification assignments to classifiers. See IRM 4.23.23.5.1, Pre-Classification Planning.

Form 480 leads are classified consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to Form 480 leads. Selected Form 480 leads will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-selected Form 480 leads are handled consistent with IRM 4.23.23.5.2, Classification.

All Form 480 leads that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

The Form 4137 is completed by employees, in conjunction with a Form 1040, to report and pay Social Security and Medicare taxes on tips, as well as federal income tax withholding, on tips not reported to the employer. The Form 4137 notice allows the IRS to aggregate unreported tips reported on the Form 4137 for each employer in order to provide the Section 3121(q) Notice and Demand for the employer’s share of the applicable FICA due on the unreported tips. See IRM 4.23.7.4.1, Form 4137 Compliance Program, regarding the Form 4137 compliance program administered by the NTRCP.

Current steps, filters, and tolerance thresholds for the Form 4137 Compliance Program are detailed in the Form 4137 Compliance Program process document, which is subject to the review and update requirements found in IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention. It is the responsibility for the ECS senior data analyst or ET-WSD compliance intelligence analyst to maintain the Form 4137, Compliance Program process document. All ET-WSD process documents are stored on the ET-WSD SharePoint site.

Internal data for the Form 4137, Compliance Program is stored in CDW . Internal data sources include, but are not limited to:

Data pulls for the Form 4137 compliance program are completed annually by the ECS senior data analyst or ET-WSD compliance intelligence analyst and sent to NTRCP Form 4137 point of contact via a secured email on a schedule agreed upon by the NTRCP and ET-WSD.

The NTRCP makes selection decisions based on the data provided in paragraph (4) of this section and sends the list of selected cases, including examiner assignment information, back to the ECS senior data analyst or ET-WSD compliance intelligence analyst via secured email.

Selected cases are assigned to the examining employee in the Form 4137 database by the ECS senior data analyst or ET-WSD compliance intelligence analyst.

The ECS senior data analyst or ET-WSD compliance intelligence analyst will establish selected cases in status 10 and EGC of the assigned employee using an AM424 database tool with the following coding information:

The ECS senior data analyst or ET-WSD compliance intelligence analyst sends back to the Form 4137 point of contact the following via secured email:

The Form 8027 is filed annually by certain large food or beverage establishments to report to the IRS on its food or beverage operations and employees’ reported tips, consistent with the reporting requirement found in 26 CFR 31.6053-3. See IRM 4.23.7.5.1, Form 8027 Requirements, for information regarding who is required to file the Form 8027 and what information is reported.

On the Form 8027, large food or beverage establishment employers may be required to allocate among tipped employees an amount equal to the excess of eight percent of gross receipts of the establishment for the payroll period over the aggregate amount of tips reported by the employees. See 26 CFR 31.6053-3(d).

This allocation of a percentage of gross receipts to tipped employees is entered into the employee’s Form W-2, Box 8. The employee is required to report this allocation on Form 4137.

The employer is not liable for the Social Security and Medicare taxes on allocated tips because the tips were not reported by the employee on a written statement. If unreported tips are determined through the Form 4137 Tip compliance program, the employer is liable for Social Security and Medicare taxes on unreported tips. See IRM 4.23.7.4.1, Form 4137 Compliance Program, regarding the Form 4137 compliance program administered by the NTRCP.

Form 8027 leads are generated based on internal data that determines whether a large food or beverage establishment employer has potentially underreported tips, or has potentially failed to file a Form 8027. Data from the Form 8027 is used by the NTRCP for various works sources.

The ECS senior data analyst retrieves the annual raw extract of processed Form 8027 data in a specified folder on the ECS shared drive.

The raw data extract is converted by the ECS senior data analyst. The steps for this process are detailed in the Form 8027 process document, which is subject to the review and update requirements found in IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention. It is the responsibility for the ECS senior data analyst or ET-WSD compliance intelligence analyst to maintain the Form 8027 process document. All ET-WSD process documents are stored on the ET-WSD SharePoint site.

The converted Form 8027 file is uploaded to a secured server to be imported into the Service-Wide Employment Tax Research System (SWETRS) in January or in May. The secured server location and SWETRS contacts for the Form 8027 data are located in the Form 8027 process document.

After the Form 8027 data is converted, the ECS senior data analyst or ET-WSD compliance intelligence analyst creates the Form 8027 Annual Database (Single Year Tables) for End-Users and sends an email to the NTRCP, CETO, and Tax Exempt and Government Entities contacts named in the Form 8027 process document, notifying these contacts that the database is ready for transfer.

Form 8027 leads are delivered annually to the ET-WSD Tip Coordinator by the ECS senior data analyst and are classified by the ET-WSD Tip Coordinator consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to Form 8027 leads. Selected Form 8027 leads will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Non-selected Form 8027 leads are handled consistent with IRM 4.23.23.5.2, Classification.

All Form 8027 lead selects that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.

Through January 31, 2022, common law employers could request and receive advanced ERC and sick and family leave credits through the filing of the Form 7200. If the common law employer uses a third-party payer (TPP) for filing the employment tax return, the common law employer is required to state this on the Form 7200.

In the context of TPPs, the advanced credits paid to the common law employer are reported on the third-party payer’s aggregate employment tax return on Schedule R, Allocation Schedule for Aggregate Form 94X Filers.

The COVID-19 true-up work sources ensures that the advanced payments made to common law employers are reconciled with amounts reported on the TPP employment tax return on Schedule R.

Current steps, filters and tolerance thresholds for the COVID-19 true-up work source are detailed in the COVID-19 true-up process document that is subject to review and update requirements found in IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention. It is the responsibility for the ECS senior data analyst to maintain the COVID-19 true-up process document. All ET-WSD process documents are stored on the ET-WSD SharePoint site.

Internal data for the COVID-19 true-up work source is updated by cycle date and uploaded to the business objects environment.

The ECS senior data analyst takes the following actions weekly to prepare COVID-19 true-up classification leads:

Systemic non-selects through the filtering process are updated as non-selects, which is based on current thresholds and tolerances listed in the COVID-19 true-up process document.

Weekly, the ECS senior data analyst will provide the classification leads by secure email to the ET-WSD COVID-19 Employer Credits Coordinator for review in a spreadsheet that includes the following columns for the ET-WSD COVID-19 Employer Credits Coordinator to complete:

Weekly, the ET-WSD COVID-19 Employer Credits Coordinator will review all leads consistent with the procedures in the COVID-19 true-up job aid. If the ET-WSD COVID-19 Employer Credits Coordinator determines that the lead is a potential fabricated entity, this information is sent to the RICS analyst for review via secured email.

All select and non-select decisions are documented by the ET-WSD COVID-19 Employer Credits Coordinator on the classification assignment sheet.

All classification decisions are sent by secured email by the ET-WSD COVID-19 Employer Credits Coordinator to the ECS senior tax analyst for review and input in the true-up database.

After the review by the ECS senior tax analyst in paragraph (11) of this section, selected cases are sent to Campus by the ET-WSD COVID-19 Employer Credits Coordinator via secured email for letter delivery. A non-response by the taxpayer to the Campus letter may result in the lead being sent back to ET-WSD for Employment Tax Examination assignment. See IRM 4.23.23.5.3, Procedures for Selected Cases, to select non-response COVID-19 true-up cases for Employment Tax Examination.

The COVID-19 Employer Credits work source considers whether an employer correctly reported COVID-19 Employer Credits on their employment tax return or claimed ERC wages on PPP wages used for PPP loan forgiveness.

Current steps, filters, and tolerance thresholds for the COVID-19 Employer Credit leads are in the COVID-19 Employer Credits process document, which is subject to the review and update requirements found in IRM 4.23.23.4.2, Lead Process Documentation, Security, and Retention. It is the responsibility of the ECS senior data analyst or ET-WSD compliance intelligence analyst to maintain the COVID-19 Employer Credits process document. All ET-WSD process documents are stored on the ET-WSD SharePoint site.

Internal data for the COVID-19 Employer Credits work source is stored in CDW and SWETRS. This data includes:

Internal fabricated entities data, generated as part of RICS referral processing, and maintained by ET-WSD, is also used for the COVID-19 Employer Credits work source. See IRM 4.23.23.3.1.1.11, COVID-19 Return Integrity Compliance Services (RICS) Referrals.

External PPP loan forgiveness data is also used for the COVID-19 Employer Credits work source per the MOU between SB/SE and the Small Business Administration for the limited purpose of determining whether a taxpayer’s ERC should be disallowed.

The data filtered by the ECS senior tax analyst is used to generate leads for both Campus and Employment Tax Examination COVID-19 Employer Credits work sources. In both instances, leads that are identified are sent to the ET-WSD COVID-19 Employer Credits Coordinator for classification by secured email. If PPP loan forgiveness data is necessary for the review of the lead, this information is provided to the ET-WSD COVID-19 Employer Credits Coordinator to review and include in the case building materials for selected cases.

The ET-WSD COVID-19 Employer Credits Coordinator will classify leads consistent with procedures found in IRM 4.23.23.5.2, Classification. Refer to the ET-WSD Desk Guide for specific procedures pertaining to COVID-19 Employer Credit leads. Selected COVID-19 Employer Credit leads will be handled consistent with IRM 4.23.23.5.3, Procedures for Selected Cases. Selected cases will have a project code consistent with the guidance found in the ET-WSD Desk Guide, and a tracking code depending on the main issue of selected case based on the procedures found in the ET-WSD Desk Guide:

Non-selected COVID-19 Employer Credit leads are handled consistent with IRM 4.23.23.5.2, Classification.

All COVID-19 Employer Credit leads that require surveying should follow the procedures found in IRM 4.23.23.7, Surveying Cases.