Statutory Authority:

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 Service are program owners. They are responsible for:

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.

The Director, Exam Case Selection is responsible for oversight of Estate and Gift Case Selection.

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.

To accomplish the mission of Exam Case Selection, EG WSD will perform the following:

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, The EG WSD CMC Manager will review 10% of classification efforts and survey decisions for the prior month of their employee cadre to ensure selects and non-selects adhere to examination 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.

The EG WSD Group Manager (or designee) will conduct quarterly reviews of the CMC Manager reviews completed pursuant to paragraph (2) of this section to ensure such reviews adhere to examination 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 (see IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns), and classification completed by EG WSD Coordinators. These reviews by the EG WSD Group Manager (or designee) will be documented in a memorandum provided to the CMC Managers/EG WSD Coordinators.

As part of the Program Review process, the Program Manager (or designee) will conduct a review of the reviews in subsections (2), (3), and (4) of this section to ensure these reviews adhere to the examination case selection policy.

Program Reports: Information regarding inventory levels and program workplan progress are included on, but not limited to, the following reports:

Monthly Briefings:

Below are acronyms and definitions for terms frequently used throughout this IRM:

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 Homepage at https://portal.ds.irsnet.gov/sites/vl043/pages/default.aspx.

Refer to IRC 7803, which is also known as The Taxpayer Bill of Rights (TBOR), https://www.irs.gov/taxpayer-bill-of-rights, 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.

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 found at https://www.irs.gov/taxpayer-bill-of-rights.

Workplan monitoring includes reviewing the number of returns and taxpayers started each month, the number of returns and taxpayers closed each month, and the number of returns and taxpayers in process to maintain optimal status 10 inventory in Estate and Gift Examination (EG Exam) for purposes of the new starts and closure plan.

The EG WSD Group Manager is required to review the reports in IRM 4.25.3.1.5, Program Reports and Monthly Briefings, for workplan and inventory monitoring purposes.

The EG WSD Group Manager is responsible for delivery of sufficient status 10 inventory to EG Exam for purposes of the new starts and closure plan.

The EG WSD Group Manager and EG WSD National Gatekeeper are responsible for ensuring sufficient wall inventory to fill EG Exam orders. To ensure sufficient wall inventory to fill EG Exam orders:

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 Wage and Investment, Submission Processing (see IRM 3.11.106, Estate and Gift Tax Returns), and Research Applied Analytics and Statistics (RAAS).

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 code (EGC).

Returns in Status 08 and in LWIS:

Returns in Status 06 in CMC:

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.

CMC Classifier (or Classifier): the CMC classifier (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.

CMC Manager: 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:

EG WSD Compliance Clerk: The EG WSD Compliance clerk is available to provide additional research to classifiers:

If a classifier needs additional research while classifying a return, the classifier should send a secure email to the EG WSD Compliance Clerk with a carbon copy to the CMC Manager, detailing the request that is needed. In addition to the request, include the following information with the request:

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:

Form 706, Form 706-NA (referred to collectively as "estate tax returns" ) and Form 709 returns that meet EG WSD’s 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 for classification in LIN should be loaded into CMC for the following month’s classification based on the following priorities:

After the review in paragraph (2) of this section is complete, if there are estate tax returns that will not be placed in classification, the EG WSD Examination Analyst will determine whether those returns have a IRC 6166 or IRC 2032A election. Follow procedures in IRM 4.25.3.5.4, Classification of IRC section 2032A Elections, for accepted as filed returns with an IRC 2032A election and IRM 4.25.3.5.5, Classification of IRC section 6166 Elections, for accepted as filed returns with a IRC 6166 election. All other returns will be given to the EG WSD Compliance Clerk to close consistent with IRM 4.25.3.6.3, Updating Returns After CMC Classification.

For estate tax returns to be placed into CMC, the EG WSD Examination Analyst will within one week:

For Form 709 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 establish them in status 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) of this section for the Form 709 return.

The EG WSD Group Manager will use the completed spreadsheet in paragraph (4)(d) to assign returns to CMC Managers. For Form 709 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.

When the returns are in ready for assignment status, the EG WSD Group Manager will send an email to the CMC Managers that includes the classification assignment instructions for the upcoming month.

Prior to the first of the month, the CMC Managers will assign returns to their classifiers consistent with EG WSD Group Manager’s instructions and notify the classifiers via email of the month’s classification assignment and due date. Guidance on CMC return assignment 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 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 4.25.3.1.5, Program Reports and Monthly Briefings, for information on the Weekly CMC Report.

If classifiers complete 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 classifiers as needed. The EG WSD Examination Analyst and EG WSD Group Manager will follow the procedures in paragraph (2) of section 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.

Classification is the process of determining whether a return should be selected for audit, the initial issues to be audited, and who should conduct the audit. See IRM 4.1.5.3, Classification, for additional information regarding the classification process.

Classifiers under the direction of EG WSD, are responsible for determining if cases should be selected for examination or non-selected

All classifiers have access to the following desk guides located in the Estate and Gift sub-industry folder of the CMC main page:

It is the responsibility of 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.

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 classifier will email the CMC Manager for assistance. The CMC Manager will work with the EG WSD 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 the LIN Help Desk.

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, paraprofessional issues, and training issues (when applicable). Guidance on these issues is found in the EG WSD Classification Guide.

For selected returns, the classifier will document the selection classification in the following manner:

For accepted as filed returns, the classifier will document the classification decision in the following manner:

After documenting the classification decision, the classifier will (instructions for this process can be found in the LB&I CMC User Guide):

If a classifier is accepting as filed an estate tax return with administration fees to private executors over a threshold as provided in the EG WSD Classification Guide, the classifier will take the additional steps:

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 in ECS as outlined 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.

If the classifier determines that the return requires perfection, see IRM 4.25.3.5.2, Perfection.

If the classifier determines that the return requires stock valuation, see 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 4.25.3.1.4, Program Controls.

Perfection is the process of obtaining missing documents required to be filed with the return that are required to make a classification decision. Perfection is completed by the Cincinnati Centralized EG Campus Operation. See IRM 4.25.2.9.2.1, Perfection and Campus Classification. In order for a return to be perfected, it must be missing a document that is required to be included with the return (e., death certificate, will, trust, schedules, and appraisals for assets listed on the return).

If the return is missing a required document and the 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 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:

The EG WSD Compliance clerk monitors the EG WSD Perfection mail box weekly and will perform the following steps:

The Cincinnati Centralized EG Campus Operation will complete perfection requests consistent with IRM 4.25.2.9.2.1, Perfection and Campus Classification. Completed perfection requests are routed to the EG WSD Perfection mailbox.

The EG WSD Compliance Clerk will take the following steps for completed perfection requests received from Cincinnati Centralized EG Campus Operation:

The classifier will upload a copy of the perfection documentation received from Cincinnati Centralized EG Campus Operation to the taxpayer folder. Refer to the LB&I CMC User Guide instructions for completing this step .

The classifier will complete the classification of the return consistent with IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns . If the return is selected, the classifier will check in the perfection documentation uploaded to the taxpayer folder to include in the CBF.

It is the responsibility of CMC Managers to monitor the perfection requests of their 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.

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.

Classifiers will determine whether a return needs stock and 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 bond valuation assistance and the 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 classifier will take the following actions to request stock valuation for the return:

The EG WSD Compliance clerk monitors the EG WSD Stock Valuation mail box weekly and will perform the following steps:

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 to the EG WSD Stock Valuation mailbox.

The EG WSD Compliance Clerk will take the following steps for completed stock valuation requests received from the Cincinnati Centralized EG Campus Operation:

The classifier will upload a copy of the stock valuation documentation received from the Cincinnati Centralized EG Campus Operation to the taxpayer folder. Refer to the LB&I CMC User Guide instructions for completing this step .

The classifier will complete the classification of the return consistent with IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns . If the return is selected, the classifier will check in the stock valuation documentation uploaded to the taxpayer folder to include in the CBF.

It is the responsibility of CMC Managers to monitor the stock valuation requests of their 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.

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 A-1 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 classifier will consider whether the initial eligibility requirements to make the IRC 2032A election have been met.

If the classifier determines that the IRC 2032A initial eligibility requirements are not met, or that this determination cannot be made in classification, 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 and SAIN codes for the IRC 2032A issue and the issue will risked consistent with the procedures in the EG WSD Classification Guide.

If the classifier determines that the IRC 2032A initial eligibility requirements are met, and there are no other selection issues on the return, 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 and SAIN codes for the IRC 2032A issue and the issue will risked "low."

Weekly, the EG WSD National Gatekeeper will review the Weekly CMC Report to find accepted as filed Form 706 that have a IRC 2032A election. All accepted as filed Form 706 with an IRC 2032A election will be sent via secure email on a spread sheet listing to the Cincinnati Centralized EG Campus Operation Classification mail box for processing of the lien package, as outlined in IRM 4.25.2.8.7, Lien Packages to Advisory. The spreadsheet listing should include:

Prior to classification, the Cincinnati Centralized EG Campus Operation reviews all Form 706 returns, with 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, Follow-up for Installment Billing & Section 6161 Balance Due Billing: Form 706, 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 :

In certain cases there may be additional eligibility requirements. See IRC 6166 (b) through (h).

During classification, the classifier will consider whether the initial eligibility requirements to make the IRC 6166 election have been met.

If the classifier determines that the IRC 6166 initial eligibility requirements are not met, or that this determination cannot be made in classification, 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 and SAIN codes for the IRC 6166 issue and the issue will risked consistent with the procedures in the EG WSD Classification Guide.

If the classifier determines that the IRC 6166 initial eligibility requirements are met, and there are no other selection issues on the return, 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 and SAIN codes for the IRC 6166 issue and the issue will risked low.

Weekly, the EG WSD National Gatekeeper will review the Weekly CMC Report to find accepted as filed Form 706 return that have an IRC 6166 election. All accepted as filed Form 706 with a IRC 6166 election will be sent via secure email on a spreadsheet listing to the Cincinnati Centralized EG Campus Operation Classification mail box for processing of the lien package, as outlined in IRM 4.25.2.8.7, Lien Packages to Advisory. The spreadsheet listing should include:

During the processing of Form 706, those returns with Part 3 (Elections by the Executor) Question 4 (Do you elect to postpone part of the taxes due to a reversionary or remainder interest described in section 6163?) checked “yes” are scanned and set to the Cincinnati Centralized EG Campus Operation to determine if the election is valid.

The Cincinnati Centralized EG Campus Operation will forward such requests to the EG WSD Gatekeeper, who serves as the Subject Matter Expert (SME) for such requests, and will determine whether the election is valid.

The EG WSD Gatekeeper will provide a response to the Cincinnati Centralized EG Campus Operation regarding the validity of the election within five (5) business days of receiving the request.

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:

The basic requirements for a QDOT election can be found in IRC 2056A, Qualified Domestic Trust.

During classification, the classifier will consider whether the requirements to make the IRC 2056A election have been met.

If the classifier determines that the IRC 2056A requirements are not met, or that this determination cannot be made in classification, the classifier will select the return for the IRC 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 and SAIN codes for the IRC 2056A issue and the issue will be risked consistent with the procedures in the EG WSD Classification Guide.

If the classifier determines that the IRC 2056A initial eligibility requirements are met, and there are no other selection issues on the return, 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 and SAIN codes for the IRC 2056A issue and the issue will be risked "low" .

Weekly, the EG WSD National Gatekeeper will review the Weekly CMC Report to find accepted as filed Form 706 returns that have an IRC 2056A election. All accepted as filed Forms 706 with an IRC 2056A election will be sent via secure email on a spreadsheet listing to the Cincinnati Centralized EG Campus Operation Classification mail box for processing of the lien package, as outlined in IRM 4.25.2.8.7, Lien Packages to Advisory. The spreadsheet listing should include:

Once a 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 in CMC the classification decision before the return can be selected for examination 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 classifier missed any required step in the classification process (see IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns, for required classification steps), 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.

If CMC Manager does not find any errors in the classification effort, the CMC Manager will approve the classification effort.

The code tables received by the CMC Manager for approved classifications efforts (see IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns) will be forwarded to the EG WSD Examination Analyst for inclusion on the selected return listing (see IRM 4.25.3.6.2, EG WSD Examination Analyst Review of the Weekly Report and Estate and Gift Tax Return Inventory).

The CMC Manager is also required to perform a 10% written review of all completed classification efforts. See IRM 4.25.3.1.4, Program Controls, regarding the 10% review requirement.

Upon approval of classification efforts, the CMC Manager will forward to the EG WSD National Gatekeeper and EG WSD Examination Analyst any code tables received from classifiers for the prior week for approved classification efforts. See IRM 4.25.3.5.1, CMC Classification of Filed Estate and Gift Tax Returns, regarding the code table.

The EG WSD Examination Analyst will weekly pull an 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:

Weekly, the EG WSD Examination Analyst will run a report that provides CMC classification metrics to share with the EG WSD Group Manager and CMC Managers. The metrics captured in the report include:

For returns selected for EG Exam consideration during CMC classification, the EG WSD Compliance Clerk will use the listing provided by the EG WSD Examination Analyst (see IRM 4.25.3.6.2, EG WSD Examination Analyst Review of the Weekly Report and Estate and Gift Tax Return Inventory), to update the selected return to status 08 on AIMS/ERCS. The EG WSD Compliance Clerk will update on ERCS any tracking and project codes on selected returns.

For returns accepted as filed during CMC classification, the EG WSD Compliance Clerk will use the listing of accepted as filed returns provided by the EG WSD Examination Analyst (see IRM 4.25.3.6.2, EG WSD Examination Analyst Review of the Weekly Report and Estate and Gift Tax Return Inventory) and preform the following steps separately for estate and gift tax returns:

Completion of the database tool steps generates up to three documents:

The EG WSD Compliance Clerk will take the following steps with the spreadsheet listing of returns successfully closed out DC 20:

The completed spreadsheet in paragraph (4) of this section, along with the text file print out of the returns successfully closed out DC 20, are forwarded via secure email 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:

The reasons that a return often cannot close are listed below. In each instance, the account information is required to be sen to the Cincinnati Centralized EG Campus Operation to address the account issue. The EG WSD Examination Analyst will prepare a Cincinnati Centralized EG Campus Operation Action Request form and a spreadsheet that includes the taxpayer name control, TIN, tax period, LIN link, and an indication that the return has been accepted as filed. This request is sent via secure email to Cincinnati Centralized EG Campus Operation Classification mail box:

Once the error 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.

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:

The EG WSD Compliance Clerk will:

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. See IRM 10.5.1.6.9.3, Shipping, for guidance on completing the Form 3210 .

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 .

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:

The EG WSD Prompt Assessment Coordinator will confirm the prompt assessment statute on the Form 709 returns subject to the prompt assessment request and will confirm the correct statute date is reflected on AIMS/ERCS.

The EG WSD Prompt Assessment Coordinator will:

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:

Approved selects after the EG WSD National Gatekeeper review in paragraph (5) of this section will be handled by the EG WSD National Gatekeeper within one day of the completed review in the following manner:

For selected prompt assessment requests, the EG WSD Compliance Clerk will within one day of receiving the Form 709 returns from the EG WSD National Gatekeeper (see paragraph (6)(c) of this section):

Once the Form 709 returns are full AIMS, the EG WSD National Gatekeeper will:

If the EG WSD Prompt Assessment Coordinator determines that the prompt assessment request should not be selected for examination, or the EG WSD National Gatekeeper review in paragraph (5) of this section determines that the request will not be sent to EG Exam, the EG WSD National Gatekeeper will provide the case file, with the 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 4.25.3.1.4, Program Controls.

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 that is not yet ripe for examination, 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 hand delivered to the EG WSD Compliance Clerk, who will establish the claim on AIMS/ERCS in status 08, EGC 1080. Refer to the EG WSD Handbook on procedures for establishing claims.

Once the claim is full AIMS, the claim will be placed in the designated location for claims to be used in filling EG Exam orders. Refer to IRM 4.25.3.11.2, Filling Orders and Surveying Cases, for EG Exam order filling procedures.

Claims from the Cincinnati Centralized EG Campus Operation 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.

Selected claims for refund are subject to the review requirements found in IRM 4.25.3.1.4, Program Controls.

The EG WSD Fed/State Coordinator receives state estate tax return data from the IRS Governmental Liaison pursuant to an existing Memoranda of Understanding (MOU) with the states. IRM 11.4.1, Governmental Liaison Operations, for information regarding the Office of the Governmental Liaison.

The EG WSD Fed/State Coordinator will save the data on the EG WSD shared drive and send the data to the ECS Senior Tax Analyst. The ECS Senior Tax Analyst will compare the state data to available IRS data to determine if there are any non-filers or potential under-reporter cases. Any non-filer or potential under-reporter leads are returned to the EG WSD Fed/State Coordinator. All data reviewed by the ECS Senior Tax Analyst will be saved on the EG WSD shared drive.

The EG WSD Fed/State Coordinator will conduct IDRS research to determine whether the estate filed and will select cases where the lead indicates that the estate had a filing requirement and no estate tax return was filed. The EG WSD Fed/State Coordinator will also select cases where the lead indicates that the estate under-reported the amount of its gross estate on its federal estate tax return, based on tolerances provided in the EG WSD Handbook. For each selected case, the EG WSD Fed/State Coordinator will complete a classification sheet indicating the reason for selection and the risk rating, consistent with the guidelines in the EG WSD Classification Guide.

The EG WSD Fed/State Coordinator will enter the decedent estate information for each lead on the Fed/State spreadsheet located on the EG WSD SharePoint, https://irsgov.sharepoint.com/sites/SbEHqStpq_EgtPsp/SitePages/Home.aspx, and document the reason for the select or non-select decision.

For selected cases, the EG WSD Fed/State Coordinator will:

For selected cases, the EG WSD Compliance Clerk will

When the case is established on AIMS/ERCS, the EG WSD Fed/State Coordinator will request a copy of the state filing from the state by completing the Form 8796, Request for Return/Information, Federal/State Tax Exchange Program - IRS Use Only. The EG WSD Fed/State Coordinator will send the completed Form 8796 via secure email to the EG WSD Group Manager. The signed Form 8796 is submitted by the EG WSD Fed/State Coordinator to the IRS Governmental Liaison to request a copy of the original return filed with state.

Upon receipt of the state return, the EG WSD Fed/State Coordinator will

The EG WSD National Gatekeeper will review all selected case files and the 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 be surveyed, the EG WSD National Gatekeeper will

Approved selects after the EG WSD National Gatekeeper’s review in paragraph (9) of this section will be made available to fill EG Exam group orders consistent with procedures for filling orders. Refer to IRM 4.25.3.11.2, Filling Orders and Surveying Cases.

Fed/State cases surveyed after the EG WSD National Gatekeeper review in paragraph (9) of this section, or not assigned for examination, will be surveyed consistent with the procedures found in IRM 4.25.3.11.2, Filling Orders and Surveying Cases. If the case is not surveyed by the EG WSD Gatekeeper after the review in paragraph (9) 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.

Paper and 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.

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

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 paper 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 selected cases in a designated location for Form 706-GS (D) cases. The EG WSD National Gatekeeper will fill EG Exam orders with these cases consistent with procedures for filling orders. Refer to IRM 4.25.3.11.2, Filling Orders and Surveying Cases.

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, Filling Orders and Surveying Cases. If the case is not 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 cases 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 cse files.

Revenue Agents in other business units may request a four-hour consultation from EG Exam regarding potential estate and gift issues in the course of their examination by using the Specialist Referral System (SRS).

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.

EG WSD receives the following referrals from other business units:

Referrals from other business units are subject to the review requirements found in IRM 4.25.3.1.4, Program Controls.

On the first day of the month, the EG WSD Examination Analyst will generate electronic spreadsheet order forms. There will be a spreadsheet for each EG Exam territory and a separate tab for each group. These forms will contain data concerning group inventory levels (statuses 10 and 12), an analysis of EG Exam group new start trends, and estimated ordering needs based on this analysis.

The EG WSD Group Manager will provide the order forms via secure email to the Technical Advisor for the Chief, Estate and Gift/Excise Tax Exam (Technical Advisor), with a request that the order be completed and returned to the EG WSD Group Manager, Examination Analyst, and National Gatekeeper on the tenth day of the month.

Upon receipt of the completed order forms from the Technical Advisor, the EG WSD Examination Analyst will have three days to consolidate the order and provide guidance to the EG WSD Group Manager of instances where order requests are inconsistent with status 10 levels and new start data.

The EG WSD Group Manager will provide the consolidated order form to the EG WSD National Gatekeeper by the 15th of the month along with any instructions concerning filling the order (e.g., claims/referral cases to consider, returns with short statutes that need to be sent or surveyed, or special instructions specific to a particular EG Exam group).

Within two days of receipt of the consolidated monthly order, the EG WSD National Gatekeeper will solicit a meeting with the Technical Advisor to discuss the order form, any concerns or questions related to filling EG Exam’s request for returns, and any potential adjustments, if any, to the number of returns ordered. The EG WSD Group Manager and EG WSD Examination Analyst will also be included in the meeting.

The EG WSD National Gatekeeper will fill EG Exam orders from the requisition in a manner determined by the EG WSD Group Manager.

In delivering returns:

All memoranda, case inserts, transcripts, and other case building materials for prompt assessment requests (see IRM 4.25.3.7, Classification of Prompt Assessment Requests), project cases (see IRM 4.25.3.9, Classification of Non-Filer and Under-Reporter Project Cases), and referrals (see IRM 4.25.3.10, Consultations and Referrals from Other Business Units), will be delivered electronically when possible.

The following cases are assigned the highest priority in sending cases to EG Exam:

All other selected cases are sent out adhering to the following considerations:

After the EG WSD National Gatekeeper determines which returns will be delivered to meet the return order, the following will be delivered to the EG WSD Compliance Clerk:

The EG WSD Compliance Clerk will perform the following tasks for the order:

After all cases have been updated to status 10 on AIMS/ERCS, the EG WSD National Gatekeeper will electronically deliver the order, using LWIS, when possible, or through secure email. See IRM 4.25.3.11.3, Shipment of Cases, for Form 3210 procedures for electronic delivery.

After the EG WSD National Gatekeeper completes the monthly order requisition, a review of the available inventory will be conducted. Those returns that the EG WSD National Gatekeeper will not send to EG Exam due to time on statute (refer to the EG WSD CMC Manager/LWIS Delivery Guide for guidelines for surveying a case based on time left on statute) or quality of selected issues after the EG WSD Gatekeeper review will be surveyed in the following manner:

For surveyed project cases and referrals established as an SFR:

For surveyed project cases and referrals where EG WSD has the paper filed return:

For surveyed project cases and referrals where EG WSD does not have the paper filed return:

For all other cases, the EG WSD National Gatekeeper will provide the EG WSD Compliance Clerk a list of returns to survey that will include:

The EG WSD Compliance Clerk will close the return(s) using the IDRS command code AMSOC, disposal code 35. Follow procedures in IRM 4.25.3.6.3, Updating Returns After CMC Classification, for procedures on post-closing procedures and addressing return closure issues.

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: