Excise taxes are imposed on the sale or use of various products and services (IRC sections 4041 through IRC 5881). See IRM 4.24.1, Introduction to Excise Taxes, for information on the excise taxes administered by the IRS. Excise taxes imposed on alcohol, tobacco, and firearms are not administered by the IRS.

It is important to consider the applicable excise tax requirements for different market segments. Pub 510, Excise Taxes, provides useful information on excise taxes.

Certain excise tax activities require registration with the IRS. Information on registration may be found in IRM 4.24.2, Form 637 Excise Tax Registrations.

Policy Statement 4-21, Selection of Returns for Examination, states the primary objective in selecting returns for examination is to promote the highest degree of voluntary compliance on the part of taxpayers. This requires the exercise of professional judgment in selecting sufficient returns of all classes of returns, 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 1.11.2.2.1, 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 sources must comply with published guidance and not supersede the IRM.

Consider these factors when determining whether to incorporate information into the IRM or publish it in another source:

The Director, Exam Case Selection - Specialty, is responsible for oversight of Excise Case Selection.

The Program Manager, Excise Case Selection, is responsible for oversight of the JOC and WSD operations.

The JOC and WSD group managers, are responsible for oversight of the JOC and WSD, respectively.

The mission of the JOC is to provide a technical foundation for a common data repository that supports the innovative use of technology to collect, analyze, and share information to provide qualified tax compliance leads. To accomplish its mission, the JOC:

The mission of WSD is to manage the classification and delivery of excise tax-related inventory. To accomplish its mission, WSD:

Program Reports: Information regarding the reporting of program objectives are included on, but not limited to the following reports:

Program Effectiveness: Program goals are measured by analysis of excise tax compliance to:

Data sources used to identify compliance leads include excise tax return filings and third-party data primarily from other federal agencies used to corroborate taxable events. See IRM 4.24.18.5, JOC Network, for additional information.

Quality review is conducted on program processes to ensure requirements are met for fairness in case selection. See IRM 4.24.18.16, Quality Review, for additional information.

All information management systems have safeguard measures in place that address key components of Information Technology (IT) security requirements to restrict access to sensitive data.

See Exhibit 4.24.18-1, Terms/Definitions, and Acronyms, for a list of acronyms and definitions used in this IRM.

Excise Case Selection 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.

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. See IRC 7803 (a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see 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 base inventory levels. The WSD group manager is responsible for coordinating with the JOC group manager to ensure delivery of sufficient and appropriate lead inventory.

Review may result in changes to the next RFI (request for information) on projects that have charters and have an initiative number. If the charter needs updating to account for the changes, see IRM 4.24.18.7, Charters section regarding documenting such changes.

Monitor workplan goals by reviewing:

Ensure workplan delivery by conducting a monthly review of:

The WSD group manager monitors ETE inventory to determine the need and availability of work necessary to meet the workplan and reports to the ECS Program Manager monthly. The following monthly reports assist with monitoring and are provided by PPA:

Primary Data Source Tables (PDST) are the primary data sources for JOC data analysts. They combine various Excise Tax, ExFIRS, and IRS data on the CDW into a set of tables to create data and processing efficiencies and allow JOC data analysts to easily query excise data for analysis.

ExFIRS data on the CDW creates redundancies since many of the IRS data in ExFIRS are also available on other CDW tables. Additionally, more accurate data is available on the CDW. To create new data analytical efficiencies PDST were created.

JOC data analysts create table queries that are used by JOC database administrators to create and maintain PDST on the CDW.

Access to the PDST is restricted to JOC data analysts. Other IRS data scientists may request access by submitting a Business Entitlement Access Request System (BEARS) request.

PDST includes:

Network data is refreshed monthly when the CDW data are refreshed. This ensures lead generation and case selection efforts are made using the most recent data available. JOC analysts collaborate with database administrator to complete this task.

The JOC is responsible for acquiring data from other government agencies or third-party vendors. Employees are encouraged to suggest new data sources and/or data applications that may assist with identifying excise tax compliance leads.

Email requests with the following information, if known, to the JOC group mailbox at sbse.excise.joc@irs.gov.

Requests will be reviewed by the JOC group manager and, if approved, assigned through the JOC Task Tracker for completion.

The proposed acquisition will be vetted with the respective subject matter experts in JOC, WSD and EXTP, to determine whether the data may be used for other efforts and/or whether similar data has already been obtained.

Data will be acquired according to procedures at the Office of the Chief Procurement Officer website.

Federal, state, and local agency data requests and most requests for external data require coordination with the Governmental Liaison (GL) for completion of the GLIDe template. See IRM 11.4.1.13, Initiative Development Guide (GLIDe), for information on this process.

Approved GLIDes should be posted to the ECS SharePoint JOC site.

Data transfers refer to the movement of data to and from the JOC. Examples of data transfers include fulfilling an RFI for chartered initiatives, case-related, and ad hoc data analysis assistance, and are made using a Request for Information (RFI) form. Data analyses from chartered initiatives commonly result in anomaly identification for lead development.

JOC Data Coordination includes performing targeted data testing following data refreshes and coordinating with IT and JOC data analysts on data-related issues to help drive issues to resolution.

Coordination activities include:

Data quality is an important factor that directly relates to lead output. Validating data assures that it is consistently verifiable and reliable. Data obtained from internal, external, commercial, and other government agencies sources should be reviewed for quality issues.

The JOC group manager is ultimately responsible for mitigating data quality risk. The JOC group manager reviews reported issues and works with the data analyst to assess business risks and the potential for timely resolutions and takes actions as necessary.

As data quality issues are identified, employees should forward the following information to the JOC group mailbox at sbse.excise.joc@irs.gov.

A charter formalizes a routine business operation project that has an initiative number.

Once a charter is approved, the ECS charter coordinator assigns a compliance initiative number for inventory tracking.

Charters must be completed on the current approved template.

New charter development should address whether:

Charters should be reviewed during initiative reviews discussions and revised, as needed.

New charter development or revision requires:

A charter agreement requires the approval of the managers involved in the development or revision of the charter and the ECS Program Manager. The charter must be forwarded to the appropriate offices to obtain the signatures of the managers (or a designee), who will indicate their approval by signing their names within the signature area of the charter. The approval of the ECS Program Manager is obtained after the other managers have signed the charter.

The ECS charter coordinator will post approved charters to the ECS SharePoint Charters library and update the “Master List of Charters” spreadsheet to reflect new or revised charters (including archived charters and their effective dates).

Charters that are discontinued require documentation as to the reason for discontinuation and management approval.

Documentation of discontinued charters must be saved on the ECS SharePoint Charters library.

With charter approval, all initiatives that develop leads for examination should have a WSD manager-approved corresponding Case Assignment Sheet (CAS) for inclusion in examiner case files. The CAS provides initiative-specific information for use in examination activities.

A CAS should be prepared by WSD during the initiative lead development or review process. A copy should be shared with EXTP for law discussion concurrence.

The approved CAS must be saved in the WSD section of the ECS SharePoint site.

A CAS should be included in all case files sent for compliance action where lead-producing charters exist.

The JOC and WSD group managers or designee, are responsible for conducting and documenting the assessments of all charters and the related initiatives, with the goal of identifying opportunities for improving the case selection process.

Charter assessments should be documented by a cross-functional team of JOC, WSD, and EXTP to assess excise tax abstract and activity coverage on an annual basis or whenever changes in tax law or facts and circumstances surrounding any excise abstract are identified. The following items should be considered:

JOC and WSD group managers or designee, are responsible for updating the names of analysts and classifiers assigned to initiative teams from their respective groups. The managers also coordinate with the EXTP Manager to update the list of policy analysts assigned to the initiative teams.

The documentation will be posted by abstract and activity code in the Master List of Initiative spreadsheet on the ECS SharePoint site:

The charter status will be documented on the ECS SharePoint Charters library Master List of Initiatives as:

Data analyses for chartered initiatives are used to develop CAS and identify potential leads for classification to ETE. JOC and WSD collaborates with EXTP to review data analyses to verify reasonableness and accuracy based on filters noted in charter document. Review procedures for new or revised initiatives are as follows:

The JOC developed the Fuel Inspection Data Gathering Project (FIDGAP) for the dyed fuel inspection program. The FIDGAP system was developed to assist ETE in identifying optimal fuel inspection sites for the Fuel Compliance Inspection Program to assist with workload planning. See IRM 4.24.13, Overview of Excise Fuel Compliance Program, for more information.

FIDGAP uses Dyed Diesel Inspection Scheduler (DYEDIS) to compile location information from different sources to identify potential inspection sites for dyed diesel compliance. Potential inspection sites are matched to the geographical location of the employees conducting fuel inspections.

The inspection locations identified using FIDGAP are not cases classified or selected by the JOC. The sites selected by FIDGAP are proposed sites chosen based on the workplan, other parameters (e.g., employee location), and information provided by ETE. The ETE group managers and the Fuel Compliance Officers (FCOs) and Fuel Compliance Auditors (FCAs) determine the sites selected for inspection.

The fuel inspection site selections are posted to the FIDGAP SharePoint site semi-annually.

FCOs and FCAs provide feedback to the JOC via spreadsheets that are uploaded to the FIDGAP SharePoint site. The JOC inputs the feedback data into the DYEDIS to refine the site data.

The WSD manager is responsible for monitoring lead activity to ensure workplan goals are met. When additional leads are needed, WSD manager will initiate a request for information from the JOC.

Selecting entities for compliance action involves making the most efficient use of staffing.

The selection process should also consider the substantial non-compliance factors (SNiF) found in IRM 4.1.1.6.21, Special Enforcement Program (SEP).

Monitor progress of leads from classification to completion including case building and posting case files for uploads.

Cases selected for compliance action require a determination on the compliance approach. There are several potential approaches including:

The ECS Program Manager in collaboration with other excise tax stakeholders is responsible for determining case compliance approach.

Ensure a review of the decision to survey an established case under WSD control is approved by an appropriate level of management. See IRM 4.24.18.2, Fairness in Case Selection, for additional information. Semiannually, WSD reviews all inventory in its control to determine if it will be needed by Excise exam or should be surveyed and replaced with newer tax periods. The Disposal Code 35 is used.

If the status of a case in WSD control changes in between reviews (bankruptcy, change from non-filer to filer) and it is determined that the file should be surveyed, Disposal Code 33 is used.

WSD will prepare the Form 10904 for approval and signature of the WSD manager for Disposal Code 33 cases only.

Certain initiatives require an approved CIP when they involve groups of taxpayers that have unique excise tax compliance issues. CIP procedures are not required in the case of “routine business operations” as defined in IRM 4.17.1.3, Activities Not Subject to CIP Procedures. The criteria in IRM 4.17, Compliance Initiative Projects (CIP), must be used to determine when CIP procedures apply for excise tax projects.

Refer to WSD for assistance with determining the need for a CIP. Upon receipt of Form 13502, Compliance Initiative Project Authorization - Part One, Form 13498, Compliance Initiative Project Authorization - Part Two, extensions or Form 13497, Compliance Initiative Project Authorization - Termination Report.

WSD will coordinate the implementation and approval of any new CIPs with the National CIP coordinator.

Leads from approved CIPs follow routine classification procedures.

See IRM 4.24.18.7, Charters, for routine procedures used to identify excise tax compliance issues.

The IRS Fed/State Program partners with state government agencies to enhance voluntary compliance with tax laws. This includes facilitating the exchange of taxpayer data, leveraging resources, and assisting taxpayers to improve compliance and communications. Consideration should be given, at least annually, to state government audit results as a source of leads for all relevant excise tax abstracts.

The Privacy, Governmental Liaison and Disclosure Program (PGLD) is responsible for the coordination of activities between the IRS and state and local governments, as well as other federal agencies.

The Specialist Referral System (SRS) is an online automated system that allows for submission and approval for specialist assistance. SRS is used to provide mandatory excise lead referrals on Large Corporate Compliance (LCC) from LB&I as well as Industry Cases (IC) from LB&I, SBSE and TEGE. See IRM 4.10.2.7.5.1, Specialist Referral System (SRS) Online Referrals, and IRM 4.24.5.3, Excise Examinations- Specialist Referral System (SRS) - Overview, for additional information.

SRS excise referrals are centralized in WSD.

The SRS system is programmed to route referrals directly to the Manager Designee. Referrals are received via email from SRS@IRS.gov and should be acted upon within 15 days by either transfer to an ETE group manager or rejection of the referral. Management may extend the deadline to take action on specific referrals, at their discretion, but should notify the SRS Administrator of this decision. Territory manager approval is required for any referral rejected due to resource limitation.

WSD provides an MFT B5 ERCS control as well as the SRS referral control, which is transferred to the excise group. The excise examiner is responsible for setting up the IMS file. All WSD rejections of an SRS referral require WSD manager approval.

If the SRS referral is related to an open examination in the field, the SRS referral must be sent to the Excise Tax Examination manager assigned to the claim or other examination periods already controlled.

Information report leads may be received on Form 3449, Referral Report, or Form 5346, Examination Information Report. The reports provide information of sufficient compliance value to warrant enforcement follow-up. Excise field examiners submit information report leads electronically through their group manager to the WSD group mailbox: *SBSE Excise WSD.

Process requests within five business days, when possible.

Forms clearly marked as "Time-Sensitive" such as jeopardy assessments or wagering cases involving coordination with law enforcement agencies should be processed within two business days, when possible, with the receiving field group establishing ERCS controls and IMS controls.

Monitor completion to ensure timely actions and document delays.

Whistleblower claim leads are received from the IRS Whistleblower Office when Form 211, Application for Award for Original Information, is received and deemed related to excise tax.

Claims should be classified and documented per IRM 25.2.1, General Operating Division Guidance for Working Whistleblower Claims.

Whistleblower cases should be controlled with ERCS tracking codes 7882 for IRC 7623(a) claims and 7894 for 7623(b) claims.

WSD is responsible for monitoring the annual ETE workplan including the 637 Registration Program accomplishments.

WSD is responsible for identifying and selecting some sample review cases. Others are identified by the 637 team when the 637 team needs Field ETE interaction on a CP-241 letter registrant that cannot be handled at the 637 team level. WSD will coordinate with the ETE program manager to ensure that sufficient cases are identified to meet workplan goals.

IRM 4.24.2, Form 637, Excise Tax Registrations, provides additional information on the 637 Registration Program including three types of 637 reviews as follows:

Case selection responsibilities include identifying entities for classification using a risk-based approach to identify the next best available case. Consideration shall be given to:

In addition to routine classification criteria, cases selected for examination should be based on the following selection factors:

All classification decisions/dispositions of regular non-JOC initiative leads (selected, forwarded or rejected) must be documented in the Leads Tracking Database System (LTDS) system.

All initiative leads will be documented on the leads list and the selects must be documented in LTDS.

Classifiers should update the initiative leads list as follows:

Leads have multiple data points that should be reviewed prior to determining dispositions including:

IRM 25.16, Disaster Assistance and Emergency Relief, provides policies and procedures employed by the Disaster Assistance and Emergency Relief Program office for responding to federally-declared disasters and other significant emergencies in disaster areas. When the President declares a federal disaster or emergency, the Director of the Federal Emergency Management Agency (FEMA) will assign a designation of "Individual Assistance" and/or "Public Assistance" to define the type of relief offered to a specific disaster area. This information is cascaded through management via a Disaster Relief Memorandum. The information includes the affected zip codes, relief to be provided and duration of the relief. The IRS will issue a supplemental memorandum if additional information indicates a need for extended relief. NOTE: Not all disaster areas have compliance activity suspended.

WSD shall process leads and cases meeting disaster relief criteria as follows:

Requests for ERCS case controls and IMS case file uploads are sent to CSTO ERCS/AIMS team in the agreed manner. Case files, including checksheets and attachments, will be uploaded to CSTO Server. CSTO will add IDRS and CBRS as necessary into an IMS case, which will be established only after WSD requests the CSTO to ship the file to Excise Field.

Post case files to the CSTO shared server.

ERCS controls and IMS case upload request reports should be generated as directed by the WSD group manager.

Case coding is essential to accurately monitor resources. The use of AIMS and ERCS case codes including project, tracking and source codes is the joint responsibility of ECS and Excise Policy.

Any case controls requested by WSD that require a tracking code should have the tracking code assigned prior to any case controls being established. To obtain a tracking code or project code consult the Tracking Code/Project Code Coordinator for WSD.

Per IRM 4.24.6.2.7, Excise Examinations Relating to Structured Settlement Factoring Transactions, leads for excise tax on structured settlement factoring transactions should be controlled on AIMS and ERCS on Non-masterfile as non-filer leads using MFT 27, Abstract Code 034.

For case control procedures related to Excise Tax claims, see IRM 4.24.8.6, Claim Classification and Control Procedures.

For a list of approved codes, see the Codes and Procedures page on the Examining Taxes website.

Case files should describe how and why a case was selected. Included in the case file should be the checksheet and CAS (tab 2 of the checksheet). Other items commonly included in the IMS case file are the, IDRS and WebCBRS requested research performed by CSTO ERCS/AIMS Team per the requested Checksheet. All WebCBRS and IDRS research is done just prior to case transfer to ETE so the data is up to date.

The following IRMs contain information related to classification:

See specific information available in IRM 4.4.1, AIMS Procedures and Processing Instructions, Introduction, and Exhibit 4.4.1-1, Reference Guide regarding the following codes and associated form numbers:

The WSD Return Preparer Coordinator (RPC) is responsible for coordinating excise tax return preparer penalty cases. The RPC supports and guides employees regarding preparer penalty cases and:

The field group manager will contact the RPC prior to initiating any penalty investigation to ensure there is no open case or investigation.

If during an excise tax audit the excise employee believes a preparer’s misconduct is pervasive and not isolated to a single taxpayer, consideration should be given to initiating a PAC. With managerial approval, excise employees will forward the following information via secure e-mail to the RPC:

The RPC will evaluate each referral and determine if a PAC recommendation is warranted.

The PSC is comprised of:

The PSC will prepare a PAC Request Memo and submit it to the ECS Program Manager for routing and approval by the Director, Examination - Specialty Tax, through Director, Exam Case Selection.

If the PAC is approved, the RPC will notify the group manager and coordinate with WSD to ensure that the necessary returns are selected for compliance action and assigned a unique tracking code.

Source Code 49 is only to be used for the primary returns selected as part of the PAC client sample originating from WSD. In addition, Aging Reason Code 49 should be reflected on all return preparer program returns including the primary and multiple year returns.

Indian Tribal Governments (ITG) cases related to wagering require coordination pursuant to an MOU found at www.irs.gov/Government-Entities/Indian-Tribal-Governments/ITG-Memorandum-of-Understanding/. The MOU between ITG and SB/SE Excise Tax (formerly known as the Office of Excise Taxes (OET)) provides guidance for employees with regard to examination and education activities relating to the federal excise tax responsibilities of Indian tribal governments. See IRM 4.88.1.11.1, Responsibilities and Procedures, for information on coordination activities.

Multiple employee case controls require coordination when the following conditions exist:

Email all group managers with case controls and inform them of the multiple employees/groups assigned to one TIN so coordination can take place. Group managers should coordinate to determine whether one of the cases will be transferred or the cases will be worked independently.

If a Form 720-TO case is a LCC entity currently under examination, all related terminal reviews should be directed by the excise employee assigned to the LCC case.

Inadequate records notices place taxpayers on notice that their record keeping practices are deficient and must be improved to meet the requirements of the law. The issuance of an Inadequate Records Notice may result in a follow-up examination and is a tool to enforce taxpayer compliance with legal requirements to keep adequate records and properly report tax liabilities. Generally, Letter 979, Inadequate Record Notice, requesting a follow-up statement of corrective action from the taxpayer within six months is used to notify the taxpayer of the deficiency by the excise tax field group.

If the taxpayer is within the racketeer classification, engaged in illegal activities, or is willfully disregarding the law, the field examiner will prepare Form 2807, Agreement to Maintain Adequate Books of Account and Records, and Letter 978, Notice of Inadequate Records, which includes a description of exact records required and penalties for failure to keep records.

Letters 978 and 979 are issued by field agents with the WSD Inadequate Records classifier as the designated contact who is responsible for coordinating and monitoring future compliance requirements.

Notification of inadequate records cases will be received on Form 5346, Examination Information Report, or via the copy of Letters 978/979. The taxpayer has 6 months after being served to follow-up with WSD regarding the corrective actions they will take to correct their inadequate books and records. WSD will monitor taxpayer’s compliance with the Inadequate Records Notice.

If no response is received from the taxpayer within the six month timeframe, WSD issues Letter 1022, Inadequate Records Notice Follow-up, which gives the taxpayer an additional 15 days to respond.

If there is no response to the Letter 1022, the WSD Inadequate Records Notice Coordinator will initiate a lead to be assigned to the field group for evaluation of compliance with the Inadequate Record Notice non-response.

A Doubt as to Liability (DATL) Offer in Compromise (OIC) case exists where there is a genuine dispute as to the existence or amount of the correct tax debt under the law. Taxpayers who have a legitimate doubt that they owe part or all of a tax debt may file an OIC under the DATL basis. The Tax Increase Prevention and Reconciliation Act (TIPRA) of 2005 established legislation requiring the Service to render a decision and notify the taxpayer on all OIC requests within 24 months of the date the Service received the offer, or the offer will be considered to be accepted (IRC 7122(f)).

Per IRM 4.8.8.8, Offer in Compromise Cases, the Examination function is responsible for processing and investigating offers submitted based on DATL. Doubt as to Liability offers, except offers with a trust fund recovery penalty issue, are forwarded to the centralized DATL processing unit located at the Brookhaven Campus for screening and processing.

If the DATL group makes the determination the offer is valid, it is sent to WSD to be processed as follows:

Once the field examiner or reviewer has examined the offer and determined the disposition, they should close the case and forward it to WSD.

When the case file is received by WSD, the administrative input to the AOIC database is completed for closing. The case file should then be transferred to Technical Services for review and shipment to Appeals or Closed Case Processing depending on the disposition.

If the offer is rejected, WSD will forward the case via Form 3210 to the Excise Policy SME for an independent review. Refer to the SBSE Examining Excise Taxes SME contact web page for a list of SME contacts.

For additional information, refer to IRM 4.24.6.5, Procedural Guidance Relating to OIC and DATL.

IRM 21.4.5.5, Erroneous Refund Categories and Procedures, provides that erroneous refunds must be recovered with a deficiency assessment. Erroneous refund cases require coordination with ETE.

Case controls should be established, and copies of the original documents secured and sent to the field with the case file.

States with an approved MOU by EXTP for fuel sampling and results sharing send fuel samples to to the Pacific Northwest National Laboratory (PNNL), which will test the samples under an interagency agreement with IRS. PNNL is referred to as the Excise Forensics Laboratory (EFL) throughout this section

State e-faxes, emails, or mails information/case file to WSD .

State mailed paper information/case file is scanned and emailed to WSD Classifier.

EFL emails fuel sample results by fuel sample number to the WSD Mailbox at *SBSE Excise WSD.

If WSD Classifier determines a penalty may be warranted, a checksheet with EFL fuel sample results and State information/case file attached is prepared for ERCS/IMS controls and assignment to an FCO group.

If no penalty is warranted, WSD Classifier will email the FCO Group Manager the electronic documents and EFL fuel sample results for consideration as a fuel inspection lead.

FCO Group Manager (or designee) provides the State with EFL fuel sample results. Per the MOU there are only certain designated personnel who can provide fuel sample results to the states. WSD is not on that list.

FCO Group Manager is required to email the Form 5466-B, Multiple Records of Disclosure, to WSD at *SBSE Excise WSD when state fuel sample results are disclosed to the state. WSD will record the disclosure.

New state taxing agency partnership requirements are to:

If the agency does not meet these basic requirements, they are ineligible to join the JOC. The agency will be notified of their ineligibility.

For more information, refer to IRM 11.3.32, Disclosure to States for Tax Administration Purposes, for the specific sub-sections related to Basic and Implementing agreements and MOUs.

For more information related to Safeguards requirements, refer to IRM 11.3.36, Safeguard Review Program.

Coordination with the PGLD should be initiated whenever agencies indicate a sincere interest in joining the JOC. When questionnaires or letters of application are provided by the JOC to an agency, the ECS employee will notify the PGLD office of the agency name, date, and agency employee contact. The PGLD will contact the local field PGLD to alert them that the agency has received the questionnaire/letter.

If necessary, the local field PGLD can research the status of the agency's Basic and Implementing agreements, the status of the Office of Safeguard issues, any Office of Disclosure issues, and any relationship issues with the agency.

If the agency contacts the field PGLD with questions they cannot answer, the field PGLD will contact the JOC. Field PGLD employees are relationship managers, facilitators, and marketers of all the initiatives stakeholders. The field PGLD will facilitate a call with the JOC point of contact and the agency to answer questions.

When the agency is notified of the JOC Steering Committee decision to accept/reject the application, the GL Headquarters and field PGLD offices should also be notified. If the agency is accepted, the field PGLD will provide copies of the IRS/FHWA signed MOU and Bylaws to the state and initiate the process to secure agency signatures on the JOC MOU and Bylaws as well as the completed Safeguards Procedure Report (SPR) certification.

The JOC MOU Section 9A states that agencies that access federal tax information are subject to the provisions and safeguards of IRC 6103, Confidentiality and Disclosure of Returns and Return Information. The participating agency employees will initially have access to federal tax information as contractors to the IRS under provisions of IRC 6103(n), Certain Other Persons. All participating agency personnel who are designated as IRS contractors must receive security clearances prior to having access to federal tax information.

For state safeguard procedures, see IRM 4.24.18.15.4, State Partner Safeguards Requirements.

All information obtained by the agencies must be safeguarded in accordance with the contract language for general services contained in exhibit 5 (or as may be renumbered and updated) of Pub 1075, Tax Information Security Guidelines for Federal, State and Local Agencies and Entities, and the agency’s current Safeguard Procedures Report (SPR). An agency’s SPR must describe their current operating procedures and safeguards measures.

Agencies are required to amend or revise their SPR to include a full description of the self-disclosure process and use of the federal tax information. They must include the name, title, and phone number of the person within the agency who coordinates and logs the receipt as well as the distribution of the federal tax information self-disclosed.

A copy of the signed and dated MOU must be included with the amendment or their revised SPR. The SPR or its amendment must be submitted to the IRS Office of Safeguards within 30 days after the MOU becomes effective.