PCS was created to monitor and control pass-through entity investors. Pass-through entities can have many partners and many levels of tiering. Tiering occurs when an investor in a pass-through entity is also a pass-through entity. This complexity can make it difficult to keep track of statutes and monitor all the investors.

PCS control is a policy that was established in response to the partnership provisions of the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982. It has been expanded to cover other pass-through entities that fall outside of TEFRA.

The Director, SB/SE, Headquarters, Examination Field and Campus Policy (SE:S:E:HQ:EFCP) is responsible for:

The SB/SE Program Manager, Examination Field and Campus Policy, Campus Exam & Field Support (SE:S:E:HQ:EFCP:CEFS) is responsible for:

Field Territory Managers, Field Area Directors, Director over LB&I Ogden and Director, Examination - Brookhaven, are responsible for ensuring that:

Area office Examination Managers and campus Field Support Operations managers are responsible for:

The campus PCS Coordinator works with:

The campus PCS Coordinator is charged with:

Following are specific campus PCS Coordinator responsibilities:

Program Reports: PCS generates a variety of reports used to monitor the inventory and related statutes. These reports are explained in detail in IRM 4.29.4, PCS Reports.

Program Effectiveness: PCS is used to help identify the effectiveness of the CPF program. PCS shows the number of investors linked within a pass-through structure. Failing to link partner returns timely can result in barred statutes or the need to follow burdensome procedures such as manual assessments or untimely notice procedures.

PCS is a Integrated Data Retrieval System (IDRS) based system. Access to command codes are restricted based upon need. For example, generally only the PCS Coordinator is allowed to delete records from the system.

There are several terms unique to PCS. Examples of these words:

See IRM Exhibit 4.29.1-1 for a list of acronyms.

The following IRM cross references may be helpful to PCS coordinators:

The elements in this sub-section relate to assessment statute date, assessment amount and time spent on case.

The 120–Day Date is the date that is 120 days after the Notice of Beginning of Administrative Proceeding (NBAP) is issued to the last notice investor. It signifies the earliest date that a Final Notice of Partnership Administrative Adjustment (FPAA) can be issued to the Tax Matters Partner (TMP).

The key case CPF manually inputs the 120–day date to the key case record by CC TSCHG using Form 8339, PCS Change.

The PCS will not allow generation of FPAAs for investors before the 120–day date. Input of Form 8342, PCS Notice Generation, before the 120–day date generates an error message on the terminal screen — Notice Will Be Issued After YYYYMMDD—, which is the 120–day date. Do not input the Form 8342 a second time, because the FPAAs will automatically generate when the 120–day date is reached.

The 120–day date may be updated or changed using Form 8339, but only when the date is incorrect.

The 120–day date appears on PCS Report 22–3 and on CC TSINQP.

The 60–day date is the date that the FPAA was mailed to the TMP. The FPAAs for the investors must be mailed within 60 days of mailing the FPAA to the TMP. If the 60 day date is not met, untimely notice procedures must be followed; refer the key case to the TEFRA Coordinator for guidance.

The key case CPF manually inputs the 60–day date to the key case record by CC TSCHG using Form 8339, PCS Change. The 60–day date may be updated or changed using Form 8339, but only when the date is incorrect

The 60–day date must be added to the key case record by CC TSCHG using Form 8339 before the Form 8342, PCS Notice Generation, is input. This is required because the 60–day date is printed by the computer on the copies of the FPAA sent to the investors.

The 60–day date appears on PCS Reports 21–3 and 22–3 and on CC TSINQ P.

The elements in this sub-section relate to assessment statute date, assessment amount and time spent on case.

The 120–day date is used for TEFRA only.

See IRM 4.29.3.3.2, 120–Day Date, for an explanation of the 120-day date.

The 60–day date is used for TEFRA only.

See IRM 4.29.3.3.3, 60–Day Date, for an explanation of the 60-day date.

Record Indicators are database elements that notify users that there is a unique relationship between the PCS record and other databases or files (AIMS) or between one PCS record and another.

The record indicators are displayed to assist the user in obtaining information on the account for processing purposes.

The 424 indicator indicates that a full record has not established on AIMS.

When the 424 indicator appears on the PCS record, only AIMS status code, special project code, name control, source code, employee group code, TIN, MFT, tax period, primary business code, and activity code are displayed on the PCS record.

The AIMS name and statute date for the account will not appear on the PCS until the record is fully established on AIMS.

The Partnership Investor Control File (PICF) indicator prevents an AIMS account from closing until all linkage record freezes are released using CC TSCLS. See text at IRM 4.29.2.3.2, Establishing ILSC and TEFRA Non-Notice Investor Records, of this Handbook for information on CC TSCLS.

The PICF indicator is automatically set on the AIMS record by establishing the record on the PCS. See Exhibit 4.29.3-2, PICF Indicator Codes and Conditions, for a list with definitions for the PICF indicator codes.

The PICF indicator appears on an AIMS AMDISA display by the literal PICF Code X on page 1.

The clean case indicator identifies investor accounts with only one remaining open linkage record. This information is useful when determining the number of returns, not linkages, that may close. This information is used when the closed returns objective is determined for each CPF.

The clean case indicator considers a linkage open if:

The clean case indicator appears as "*" on PCS Reports 21–2, 22–2, and 22–3.

The TEFRA indicator identifies key case, tier, and other investor records as TEFRA or ILSC.

The TEFRA indicator appears on the key case, tier, and other investor records as a "T" on PCS reports. On CC TSINQ the literal "TEFRA" is followed by the literal "YES" if the pass-through record (PS) or partner record (PN) is TEFRA. If the PS or PN is ILSC, the literal “NO” appears after TEFRA. On a TSUMY screen the TEFRA indicator is "T" . The literal "TEFRA" is not displayed.

TEFRA indicators are set on the PCS records using Form 8340, PCS TEFRA Establish or Add, and Form 8341, PCS Establish or Add, when T is entered in the TEFRA indicator field. It can also be added or deleted using Form 8339, PCS Change, item 09 or Form 8336 , Mass Change, item 04.

Removal of the TEFRA indicator on an investor’s linkage record excludes the report writing accomplishments from PCS Reports 8–3, 8–3A, and 8–5. Normally, the only situations that require the removal of the "T" indicator are when the CPF is notified or becomes aware of a bankruptcy proceeding or after coordination with Criminal Investigation when a TC 914 freeze is present. It will also be removed if partnership items are converted to nonpartnership items, unless it is due to a settlement.

If the TEFRA indicator was removed from an investor’s linkage record, no TEFRA notices will generate.

The tier indicator identifies investor records that are pass-through entities. These records appear in the PCS as a key case record and as an investor record.

The tier indicator appears as a pound sign "#" , "P" (Parent), "S" (Subsidiary) or "X" (No Load) on PCS reports, and CC TSINQ and CC TSUMY terminal displays.

PCS Report 8-6, No Load Report, shows the number of tier returns with a no load indicator. PCS Report 8-7, Unperfected Tier Report, shows the number of tiers without a tier indicator.

The affected item/ partner level penalty report indicator identifies one-year assessment statute dates that are present only for penalty, or other affected items, purposes. The information is used in monitoring TEFRA OYDs on the PCS 4-4 Report. When the indicator is present, it alerts the CPFs to the fact that the one-year assessment statute date is for a penalty and/or an affected item issue, and that the TEFRA tax adjustment issue is already complete.

The penalty/affected item report indicator "P" is input along with the OYD after the TEFRA assessment is made.

The penalty/affected item report indicator is displayed on PCS reports and CCs TSINQ and TSUMY screens immediately after the one-year assessment statute date, i.e., MMDDYYYYXP (04151998XP) (Where X = the Investor Closing Code)

The indicator causes penalty/affected item records to sort to separate pages on PCS Report 4–4, and that allows monitoring of the penalty/affected item one-year assessment statute dates separately from the TEFRA one-year assessment statute dates.

The TEFRA Penalty/Affected Item code determines the type of notice generated for investors in a key case.

There are five different penalty/affected item codes. Each code has a significant meaning and causes different notices and attachments to be generated. The codes A, P, and X are all applied at the key case level. The codes have the following significance:

The codes are input to the key case record using CC TSCHG, item 14–"N" on Form 8339, PCS Change. Where N = A, D, P or X.

To remove or change a Penalty/Affected Item code,

The notice codes will cause the generation of the following notices:

The notice code must be present on the key case record for the PCS to generate the appropriate settlement agreements and attachments.

The attachments are generated with FPAAs where partner level affected items or penalties apply.

The notice code is displayed on CC TSINQ and CC TSUMY screens, PCS Reports 4–4, 6–9, 22–3, and National Directory Reports (Reports 22–1 and 22–2).

Indicates that all pass-throughs that are linked to the investor have been closed. This is determined by checking the PN CLSD PS IND of the linkage records which are linked to the investor. CC TSCLS sets it to closed if there are no more open linkages.

The TEFRA Indicator is displayed on the CC TSUMYP screen and the Sum Closed Indicator is displayed on the CC TSUMYI screen. This field is in the same place but depending on whether the definer is a "P" or "I" .

The partnership assessment amount is an accumulation of all assessments made at the partner level as the result of adjustments made at the partnership level. The assessment amount is recorded on PCS by the input of CC TSCHG item 05 on an investor. The amount of the assessment input on the partner is added to the last partnership assessment amount.

If a report is being processed which has more than one key case adjustment passing to the taxpayer, then each assessment must be entered separately. If the incorrect amount is entered when inputting an assessment amount, the amount needs to be corrected. CC TSINQP needs to be researched to determine the Partnership Assessment amount. This is the accumulation of all partner assessments related to the key case. To correct this amount, the correct accumulated amount needs to be entered using CC TSCHG item 18. For example, if a CC TSCHG item 05 assessment was entered that reflected assessments from two different key cases, then the amount of the overstatement needs to be backed out of the Partnership Assessment Amount reported for the key case entered on the Form 8339, PCS Change. A CC TSINQ must be reviewed to determine the current total in the Partnership Assessment amount. If the Partnership Assessment amount is $200,000, and the amount of the overstatement is $1,000, then a CC TSCHG item 18 entry of $199,000 needs to be made to reset the Partnership Assessment amount total to the correct amount. This entry should only be made by the PCS Coordinator.

This amount can be viewed using CC TSINQP.

The partnership adjustment amount reflects the amount of adjustment made at the partnership level. This amount is input using CC TSCHG item 08 when the key case Notice/Closing package is received from the Technical Services (Field) TEFRA Coordinator.

The CC TSCHG 08 must be entered before a CC TSNOT can be input to generate a 60-day Letter or an FPAA.

A dollar amount or "NC" for no-change can be entered.

The amount to enter as the adjustment amount will vary. As a rule, all adjustments should be combined to arrive at one net adjustment. Adjustments to credits will be divided by 30% (credit amount / 30% = credit adjustment amount). This will allow credits and ordinary income/expense adjustments to be combined without skewing the results due to the credits.

This amount can be viewed using CC TSINQP.

The PCS provides a unique field to add an optional message to a linked record. Up to 70 characters, letters or numbers, can be used. "Sub. of (TIN of parent company)" is an example.

User special messages for key case or investor records are added and updated using Form 8339, PCS Change, item 07, and appear on the CC TSINQ display.

The package received date is the date the report package is received by the campus. The report package received date can be input by CCs TSCHG, TSCHGM or MSCHG. If input via CCs MSCHG or TSCHGM, the Report Package Indicator Code will automatically be input on all investors controlled by the campus initiating the CC MSCHG or TSCHGM. If input by CC TSCHG, the Report Package Received Indicator Code and Report Package Received Date will have to be updated separately.

The Report Package Received Indicator Code is input by CC TSCHG (item 22) using Form 8339, PCS Change, when the investor campus receives the complete report writing package. An incorrect report package received indicator can be removed by inputting a "D" in item 22.

When the report writing package is received in the CPF, the Report Package Received Indicator Code is immediately updated to "Y" . If input using CC TSCHG, item 22, then the Report Package Received Date must also be updated using CC TSCHG, item 27. This prevents requests to the key case CPF for report packages that were received in the investor CPF, but were not associated with the investor returns.

CC TSCHGM can be used to input the Report Package Received Date. The Report Package Received Indicator will automatically be updated to a "Y" .

The report package received indicator field for the investor linkage record is also used to indicate that the return is not under control of the CPF or the statute was protected. See Exhibit 4.29.3-3, Report Package Received Indicator Codes, for the listing of these additional indicators and their meaning.

Records with a report package received indicator code other than "Y" are listed on separate pages, by indicator, on PCS Report 4–4, TEFRA One-Year Assessment Statute Date Listing.

The report package received indicator code may be displayed using CC TSUMYI and CC TSINQI.

The TMP name and address is input on the key case record by CC TSCHG, items 20, 23, 24, and 25.

The TMP name field must NOT include the words Tax Matters Partner.

These data elements are used by the PCS to generate TMP settlement letters and docketed appeals settlement offers.

The following elements discuss automatic system actions that are time sensitive.

This data element, found on each pass-through and partner record, is the count of linkages to that record.

The number of linkages is displayed on each CCs TSINQ and TSUMY output screen and on the PCS IVL reports.

The promoter number is used to link horizontally related key case returns on the PCS. The numbers are assigned by the Headquarters SB/SE TEFRA Analyst .

CC TSLOD requires the input of one of the following promotion numbers:

The promotion number present on the key case PCS record must be used when subsequent key case years are input using CC TSLOD. It can also be changed using CC TSCHG, item 10.

The promoter number must also be used when loading tiers (and sub-tiers, etc.) of a key case.

PCS Report 8–5 is used to monitor inventory and accomplishments of records with a promotion number.

The special project code is a four digit code. All old project codes will be preceded by a zero. There is also a related Examination Returns Control System (ERCS) tracking code that is part of the Special Project Code. The ERCS tracking code can be found using CC TSINQ.

CC MSCHG, Form 8336, Mass Change, can be used to update the project codes for all CPF controlled investor cases. The only project codes that can be updated are 0013 and 0015.

The tracking code is a four digit code. This code can now be added as part of CC TSLOD and can be applied to campus controlled investors.

The settlement date is the date the settlement agreement is countersigned for the Service on behalf of the Commissioner by the designated official.

The date must be entered within 14 days of execution for the Commissioner.

The name and address of the TMP must be entered before the settlement date is input. Input of the settlement date will generate Letter 2513, Tax Matters Partner Settlement Letter, for the TMP of a partnership.

The date is input by CC TSCHG, using Form 8339, PCS Change, item 21. TSCHGM will not generate the Letter 2513, Tax Matters Partner Settlement Letter .

The docket number is assigned by the Tax Court when a petition is filed.

The docket number is input on the key case record by CC TSCHG, using Form 8339, PCS Change, item 28.

The docket number must be input on the PCS before requesting Appeals Settlement Letters for docketed cases by CC TSNOT.

The bankruptcy indicator identifies records of investors who have filed for bankruptcy.

The bankruptcy indicator is displayed on PCS Reports 4–4, 22–1, 22–2, and 22–3 as a "B" in the appropriate field. The indicator causes the records to appear on separate pages of Report 4–4. This allows the CPFs to maximize statute control of bankrupt taxpayers.

The bankruptcy indicator is displayed on CCs TSUMYI and TSINQI screens as the literal bankrupt.

The indicator appears on the CC TSUMYP as the literal "BKRPT" or "BKRPT RP=X" in lieu of the investor’s name.

This element identifies the campus controlling the key case and the underlying investors. When the CPF or PTE inputs the TSLOD for the key case, PCS assigns the appropriate CTF indicator. Brookhaven is assigned a "B" and Ogden is assigned an "O" .

The CTF indicator can be found on CC TSINQ. This allows the field and appeals offices to identify the controlling campus in the event the need to forward a return. The standard "B" or "O" code is displayed as "BSC" or "OSC" for simplicity.

CC TSCHG and CC TSCHGM can be used by the campus to change the CTF indicator in the event it is not correct, or an investor gets transferred between campuses.

It is important that the CTF indicator be correct. The PCS reports use the CTF indicator to determine which campus the data is reported.

Appeals has special instructions for identifying the proper campus. Because all Appeals cases are controlled under the a 6xx PBC, systemically determining the controlling campus is not as easy. As a result, the computer defaults ownership to BSC if it cannot determine the proper owner. If the CC TSINQ for an Appeals case displays a CTF indicator of BSC, then a CC TXMODC must be pulled to ensure that Brookhaven controls the case.

The database provides four different fields to record the partner Schedule K-1 information. They are:

The first two fields may be 1-35 characters. A "D" may be entered into the fields to delete any stored information.

For K-1 Name, if the MFT is 05, 20, 21, 30, 52, or 53 this line must have a semicolon. Only one blank is allowed, preceding the suffix, and preceding the middle initial. The individual name format is [last name space suffix (if any); first name space initial (if any)] (Public III;Jon Q,)

For K-1 City, State, Zip, the format is CITYbbSTbbZIP. ("b" = space) This can be 1-38 characters.

For parent-sub information IRM 4.29.2.3.3., Establishing Parent/Subsidiary Returns.

This feature allows campuses to generate letters with a variety of employee contacts, rather than just one.

This field is used to designate the employee contact information on generated letters. The field contains three characters, with the first character being a required field. The remaining two fields are optional.

This indicator is used when generating notices. The indicator consists of a three character field, (ANN) where A = alpha and N = numeric.

The first character must be entered, and must be either a "B" for Brookhaven or an "O" for Ogden. This alpha indicator determines the campus where the notices will be printed.

Add CC TSLOD and CC TSNOT Info

The two numeric characters (01 to 99) can be assigned as needed. A specific number can be assigned to an employee, and when that number is entered the employee's name and contact information will appear on the letter. A 99 must be entered on the system with the contact information; all other values are optional. If no number is entered, the contact information assigned to number 99 will serve as the default. All other employees may be assigned numbers 01 through 98.

There must be contact information loaded into number 99. 99 is the default account and will be used when no number is entered.

Campus employees should prepare Form 8346, PCS Notice Parameters, with their appropriate contact information. The form should be approved by the PCS Coordinator, and or the Unit Manager. An ITAMS ticket must then be opened. Include the following information in the ticket along with a copy of the Form 8346:

PCS notices are printed with the name of the campus director or other management official. If a campus experiences a change in directorship, the PCS parameters need to be updated as soon as possible.

Contact the HQ Campus Analyst to discuss the change.