The authority for the procedures of FUTA can be found under Title 26, Subtitle C, Chapter 23 of the Internal Revenue Code (Section 3301 through Section 3311).

The Director, Small Business/Self-Employed (SB/SE), Field Exam and Campus Policy is responsible for the FUTA program.

Management officials are responsible for:

Headquarters plans to conduct program reviews on an as needed basis. The reviews will target recommendations made during prior visitations, adherence to the IRM and Policy directives, movement of inventory, manager and employee reviews and feedback and any areas of concern.

This program is monitored through the FUTA Case Processing System (FCP).

The table below is a list of acronyms with definitions:

IRM 4.19.5, Certification of State Federal Unemployment Tax Act

IRM 4.19.9, FCP (FUTA Case Processing) Technical System Procedures

IRM 4.19.23, FUTA Control

Other resources can include IRM 20.1, Penalty Handbook, IRM 20.2, Interest, IRM 21.5.5, Unpostables and IRM 21.5.7, Payment Tracer.

CRON is a process where the system automatically generates all output files during off work hours. This is referred to as the "Nightly Run Setup" . CRON Run Dates will be established by Headquarters Staff for all Campuses. CRON automatically executes programs during the dates and the time specified for each job. CRON generates reports the Coordinator can access by selecting View on the Menu Bar. Cases will be assigned automatically to IDRS where correspondence has been issued or the cases have been assigned on the FCP System.

There are two different print processes for the FCP System:

When an FCP System problem is identified during FUTA processing, the campus TE/clerk who identified the problem will issue an IT Get It ticket.

Before issuing a ticket, contact a Headquarters Analyst for approval.

To issue a "Get It ticket" , the user will do the following:

Whenever a systemic problem is identified, the tax examiner/Clerk will compile documentation (description of the problem and samples) and give the information to the Site Coordinator who will inform the Headquarters FUTA analyst of the problem and forward the documentation.

Access to FUTA on the CATRS System is restricted to authorized users. The FUTA Site Coordinator, appropriate management official and security personnel must authorize individual user access.

Access to the CATRS System requires a login and password for both Windows 11 and the CATRS System. An Automated BEARS (Formally called Online 5081) Application is required to gain access to the CATRS System if they are a New User, to Set User Active, to Set User Inactive, to Delete User or to Reset User Password.

The Site Coordinator must have BEARS SYSTEM ADMINISTRATOR access to receive and process the BEARS application.

A security profile is established and maintained for each user.

User profiles are established to allow users access to the specific area/functions of the CATRS system needed to perform assigned duties. Users must inform their manager/coordinator if they are prohibited from accessing an area of the CATRS system needed to complete an assigned task. See Exhibit 1.4.23-2 for User Profile Descriptions.

The CATRS system produces audit trail information on any updates/changes to the system. Each user must ensure only authorized accesses are performed. Do not attempt unauthorized system queries.

To ensure the security and integrity of the CATRS system the user must:

To ensure the security and integrity of the CATRS system the coordinator must, on a quarterly basis:

Once the BEARS has been approved and the Local Site Coordinator adds the user to FCP User Profile Table, the BEARS request is automatically forwarded to the network SA to add the user to the "CAWRFUTA_USERS" DS Domain Group. Users will not have visibility to the screens until they have been added by the domain group. For further information contact HQ.

The FUTA program processing start up for all SB/SE campuses is scheduled for October and the PCD is the last day of September each year, unless otherwise directed by SB/SE Headquarters FUTA staff.

This requirement will be considered met if 95 percent of the workable download volume of cases are closed by the August 31 PCD. The remaining 5 percent of the inventory must be completed by September 30. This includes working the No Reply listings on a weekly basis and making any necessary tax adjustments.

If the campus is unable to complete processing by PCD, the Coordinator will notify SB/SE Headquarters FUTA staff and request an extension. The request is to be sent 60 days prior to PCD and should include the following:

SB/SE Headquarters Document Matching staff will issue a formal response on the request for an extension.

The table below provides the schedule for current and subsequent FUTA Certification program case processing.

The FUTA reports serve two distinct purposes:

The FUTA reports are generated weekly on the Business Objects Enterprise (BOE). Until all cases are closed, or up to one year after the PCD, the reports should reflect any changes to the volumes previously reported.

Managers/Coordinators at each site must monitor these reports to ensure the program is meeting the Completion and Benchmark dates.

The reports are generated with information for all sites. If a report or a portion of a report (information from one site) needs to be printed, the user will need to copy and paste the specific information onto a Word Document to print.

The FUTA Reports have a three month retention time frame. The time is determined by using the date the report was created plus two months. The Retention date is displayed on the reports main menu.

This report contains all cases controlled to an IDRS employee number and needs to be reviewed weekly to:

This report is available on Control-D every Monday morning, Report Name: "Overage Report" , Job Name: CCA 4243D

Items on the Report - The table below describes the item name and definition on the report:

The Manager/Lead must review this report to ensure cases are being worked in First In First Out (FIFO) order, this can be done by sorting the report by IRS received date. Annotate cases for follow-up actions by COB Monday. The reports should be maintained for two months. Highlight the cases on the report where:

Manager/Lead will provide the tax examiner with either the printed or electronic pages of their weekly report containing all the cases controlled to their IDRS number. Tax examiner will notate the actions taken on each case worked. Annotations should include C - Closed, U - Update, or S - STAUP input. The report should be signed and returned to the Manager/Lead by close of business Friday. The tax examiner should work cases in the following priority order:

Organization, Function and Program (OFP) codes are recorded on Form 3081, "Employee Time Report" to identify work that employees perform daily.

It is the responsibility of the Coordinator to provide the Reports area with the current OFP codes that will be used at the beginning of each new download. Take the following steps, four weeks prior to the new download to ensure the OFP codes are activated and ready to be input on the 3081. See IRM 3.30.50.3, OFP Consistency File and Reports for additional information.

All OFP codes for FUTA TEs and Clerks are listed in the tables below:

The Site Coordinator has the ability to edit, view, update, request, or batch cases on the CATRS system using the Edit option.

Select one of the following options:

The Site Coordinator is able to Add, Delete, Update, Unlock Users, Change Passwords, Grant Database (DB) Access, and Passwords on the FCP system.

The User Profile screen can be used to determine:

Follow the table below to update user profiles through the BEARS system.:

To access the User Profiles screen:

The "User Profile" screen displays the following:

The FUTA Coordinator, and Managers and Leads with site coordinator access are responsible for batching work from FCP to specific TEs.

The Coordinator has the ability to perform the following actions:

The FUTA Site Coordinator is responsible for monitoring the inventory that is Downloaded into the FCP system. The Site coordinator will use the table below to determine the priority of work and the order in which it will be assigned.

The following table identifies the work and its priority:

The Disaster Areas screen contains Disaster Area information for specific states and/or ZIP Codes. It enables the user to view and to sort information on active and inactive O and S freeze Disaster Areas. This information is used to determine whether or not a case can be updated.

The Disaster Coordinator is responsible for adding Disaster information and editing existing Disaster information.

When new disasters occur, the Disaster Coordinator will receive direction from HQ of the type of freeze (-S or -O) being issued and the actions needing to be taken. Once the directive has been received the Disaster Coordinator will search the FEMA website to identify the information that is needed to add to the FCP system.

The entering and updating of Disaster Area Information is done by specific FUTA Disaster Coordinators who have been assigned by Headquarters. Viewing and searching of Disaster Area Information is accessible to all Coordinators.

The Disaster Areas screen will display the following:

When a case is being worked by the field, the revenue officer will submit a Form 3870"Request for Adjustment" , to request an adjustment or abatement of the FUTA assessment. These requests will either be paper, FAX, or to a secure email box. The clerk or designated official will retrieve the new electronic Form 3870 daily. These cases will be controlled on IDRS using the Category Code "3870" .

These cases must be worked within 45 days of receipt into the department on a first-in-first-out basis while workload permits.

Points of Contact (POCs) were established at each campus to provide assistance for field ROs and/or managers. The POCs are expected to assist the ROs with procedural issues and routing of the cases to the appropriate campuses. POCs can be found on the SB/SE Doc Matching web site: SBSE Doc Matching

Statute Awareness - Communicating the importance of statutes to all employees is very important and the responsibility of every manager/statute coordinator. On an annual basis, management is expected to issue Statute reminders to the employees. These reminders will be procedures which include contact information (phone numbers, coordinator name, tour of duty (TOD), instructions to follow for last minute statutes discovered and the local routing procedures to the statute unit or RACS (depending on the time frame). Contact names and numbers can be located on the CAWR/FUTA Web page. It is the responsibility of the campus to alert the web master if a change in contact information is necessary.

Document 7368, Basic Guide for Processing Statute Cases, is available to all campuses and area offices. Management must maintain a sufficient supply of this document from the National Distribution Center using catalog number 10296C. Document 7368, contains valuable information on statute-specific topics; therefore, a copy will be given to each employee.

Statute Searches must be performed beginning 90 days prior to statute expiration date. All inventories (paper and electronic) must be reviewed for statute imminent criteria and documented.

No case is to be transshipped to a different POD if it is within 90 days of statute expiration.

In addition, all new receipts must be reviewed as received, prior to controlling to a tax examiner beginning with the dates above and continuing through to the statute expiration date. If the case is statute imminent, it needs to be labeled as such and expedited for processing.

Use the following Forms and Procedures for Statute Searches:

Utilizing Form 6759, Request Taxpayer Data, management must request running a monthly IDRS utility run for the FUTA program, beginning 90 days prior to the statute expiration date. These runs should be increased to weekly beginning 30 days prior to the Statute expiration date. Form 6759, requests an output file showing the following information:

This report is used to identify FUTA adjustments input to statute imminent accounts and will eventually become unpostables. Accounts identified must have quick assessments input to protect the statute.

Review the case to ensure that contact with the Large Corporation Technical Unit (LCTU) is needed.

For valid cases take the following action:

The LCTU has 10 business days to supply any additional information.

Follow the table below when a response is received from LCTU:

The Training Coordinator will be responsible to ensure training is administered annually to all employees. New hires will receive Basic Training and all other employees will receive CPE training. The duties of the Training Coordinator are listed below:

Reserve Training Rooms: Reserve training rooms sufficient for delivering FUTA training. Reserve the rooms far enough in advance to ensure they are available for your September training. These Computer Based Training rooms need to have FCP, IATS, IDRS and ORS (for the overhead) to be able to explain the different systems and use them throughout the class. Ensure you prepare for employees with disabilities accordingly.

Order supplies for students and instructors: Students will need paper, pens, highlighters, tabs and course training material.

Supply Forms needed for ELM/ITM credit: Ensure the following forms are available for class startup: Form 12466, Integrated Training Evaluation and Measurement Serves (Classroom), Form 12464, Integrated Training Evaluation and Measurement Serves (Classroom CBT), Form 10268, Training Registration Record, and Form 6554, Name Tent. These forms are to be brought to the CMLC staff upon completion of the class.

Solicit Operation for SMES: Contact the Operation for employees having received Certified Instructor Training (CIT) and are most qualified to instruct.

Assist with the preparation of training plans for students and instructors: Assist with the development of course material, handouts, disclosure. Review nature of changes listing in the most current IRM available to include in the course material. Discuss with the instructors the delivery method you will be using and what phases of the program will be covered.

Monitor/Evaluate Training: Supply the manager/instructors with OJI and OJT Guidelines. Ensure guidelines are being followed and progress can be tracked for individual employees.

Training Resources: Prepare a report for submission to your Operation detailing the number of hours used at the end of the classes. Participate in the completion of the Operation’s Training Work Plan.

Whenever a "trend" seems to be emerging for a specific type of taxpayer and/or their Payer Agent, Power of Attorney (POA) or Reporting Agent Authorization (RAA), TE's will compile documentation to show the "trend" and give the information to the Site Coordinator.

The Site Coordinator will inform the Headquarters FUTA analyst of the trend and forward the documentation..

Tax examiners will conform to Policy Statement P-21-3 requirements by responding to the taxpayer within 30 days of the received date for each piece of taxpayer correspondence. Policy Statement P-21-3 requires an interim Letter 5825-C to be issued if unable to close the taxpayer's response within 30 days. FCP automatically issues a Letter 5825-C as it batches all open replies if the case reaches 25 days old as long as the IAT CAWR/FUTA Batcher Tool is used to streamline the clerical process.

Discovered remittance is a response and/or correspondence with an original form of payment attached such as a personal check, money order or cashier’s check. Also, a loose check(s) discovered in an envelope or attached to a blank piece of paper.

If any of the items listed in (1) are discovered, both the Form 3244, Payment Posting Voucher and Form 4287, Record of Discovered Remittance must be completed.

Two copies of Form 3244, must be completed for each discovered remittance and contain entries in the following fields:

Form 4287, Record of Discovered Remittance, must be completed to log all discovered remittances. The following fields must have entries:

If remittance is found attached to a case while working in the office, take the following steps:

If the remittance is found attached to a case while tele working, immediately take the following steps:

IRS CHECKS- Returned IRS refund checks are handled differently than regular discovered remittance. If an IRS refund check is found, take it to the team Manager/Lead Tax Examiner to be routed to the Refund Inquiry Unit.

Voided Checks- If the response has a "VOIDED" personal check attached, remove the check from the response and attach it to the Installment Agreement (IA) request. Route the VOIDED check with the IA to Collections.

Initial Operations Assistance Request (OARS), requests are assigned to the TAS Coordinator and placed in a designated ATAO in box.

Log all requests to an Excel tracking document notating EIN, Program, Tax Year, Date Received, Remarks, and TE assigned.

Daily review OARS received for attachments that would be applicable to resolve the discrepancy i.e., Form 940B Request for Verification of Credit Information Shown on Form 940, Form 940C Employer Account Abstract or tax returns submitted, etc. If they are asking for an abatement of a FTD penalty, or FUTA adjustment, and the documentation received had no bearing to reconsider, notify TAS of the documents needed and suspend for three days. If documents are not received, then reject back to TAS, close the case and update the Excel tracking log.

As TAS Coordinator it is your responsibility to ensure the TAS cases are worked promptly. The cases can be assigned out to tax examiners based upon their program skill.

When TAS has requested expedite processing, the Coordinator will acknowledge receipt of the OAR to the designated TAS Liaison via Form 3210, "Document Transmittal" , secure messaging e-mail, facsimile or by telephone, within one (1) workday of receipt of the OAR. The TAS coordinator will provide his or her relief/no relief decision within three (3) workdays by telephone, facsimile, secure messaging e-mail, or hand delivery to the TAS employee. Telephone responses are acceptable if followed up, within the time agreed upon, and with the necessary documentation.

Update the Excel tracking log with all actions taken to the TAS case and ensure OARS assigned to tax examiners are closed within the negotiated completion date. Verify to ensure the EXCEL tracking log balances to the ATAO cases listed on your CCA42-43 weekly.

Managers are required to perform a minimum of two workload reviews per quarter for each employee.

For Tax Examiners (GS-0592), the workload reviews will consist of one bin review and one time utilization review per quarter per employee.

Managers should also review FUTA cases for proper and consistent application of reasonable cause criteria for abatements. All tax examiners should be ensuring that FUTA tax and corresponding Federal Tax Deposit (FTD) penalties are only abated if the taxpayer responds with amended /corrected information, the IRS incorrectly assessed the FUTA tax or the taxpayer meets reasonable cause criteria.

The number of reviews should be increased when warranted; for example, when quality results are below the target set for the year. These reviews should include open and closed case reviews.

These reviews, as in all case reviews should be documented.

Inventory reviews are applicable for FUTA Lead Tax Examiners, Tax Examiners and Clerks. The purpose of these reviews is for the manager to determine whether the employee is:

Managers are responsible for routine and periodic review of each employee’s assigned inventories. This is accomplished through reviewing various types of reports and comparing the information to the employee’s physical and virtual inventory. For successfully achieving program goals and to improve employee satisfaction/engagement, it is critical each employee’s inventories are monitored and that effective performance feedback is provided on an individual case progression, as well as overall inventory management practices.

When completing the inventory reviews, ensure:

Clerical employees perform various administrative duties which support the FUTA program. Clerical reviews must address the clerical work processes. The reviews include the following:

Clerical reviews should focus not only on the employee’s ability to complete their assignments, but also on their ability to set priorities and complete assignments independently and expeditiously. You must conduct Weekly/Monthly reviews to determine the accuracy and timeliness of employees’ work.

Managers will conduct a yearly On-the-Job review to evaluate employees. This review will evaluate employee performance as it relates to:

The review will include a time or period when the employee is assigned to work inventory. This review can be performed by directly observing the employee (side-by-side) during a defined period. Typically, this would be a block of time ranging from one to four hours or two complete cases.

Evaluative reviews must be recorded in accordance with the National Agreement established between National Treasury Employees Union (NTEU) and management.

Conduct a minimum of two evaluative reviews for each employee per month.

Evaluative reviews must be shared with the employee by a manager or individual in an official acting manager capacity.

When conducting reviews, ensure recordation is input into the Embedded Quality Review System (EQRS).

Use the Employee Feedback Report on EQRS for sharing evaluative monitoring results. Share results of the review within three workdays. (If incorrect information is given, the results must be shared within eight (8) business hours). Notate the reason on the review sheet if you do not meet these time frames, (i.e., due to unexpected leave, etc.).

Obtain the employee’s acknowledgment on the designated form. Provide one copy to the employee and retain the other copy for the EPF.