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 PCS is a separate database that interacts with AIMS. Establishing the AIMS record indirectly through the PCS instead of directly through AIMS does not change the normal AIMS processing.

A PCS record may only be established by inputting information from PCS forms. Once the record is established on the PCS, the record will remain on the PCS for six months even if the record does not establish on AIMS. Appropriate AIMS procedures must be taken for all PCS records that do not establish on AIMS.

Investor records are established on the PCS by the use of CC TSLOD. The PCS will access the local Taxpayer Information File (TIF) to determine if an account exists on Master File (MF) for an investor. The PCS also verifies the name control. If the TIF information does not match MF, AIMS creates a 424 Reject Record.

The PCS receives certain database elements from AIMS and carries specific database elements that are unique and exclusive to the PCS.

The PCS key case records (TEFRA and Investor Level Statute Control (ILSC)) must be a full record on AIMS before investor records can be established and linked to the key case record on the PCS. When investor records establish, AIMS requests the investor tax returns unless an AIMS database already exists or the case is on the LB&I Imaging Network (LIN). If the AIMS database already exists, a "Flow-Through Notification" (Form 5546) is produced.

Exhibit 4.29.2-1, Establishing PCS Key Case and Investor Records, summarizes how to establish PCS records.

Form 14090, TEFRA Linkage Check Sheet (LB&I) or, Form 14091, TEFRA Linkage Package Check Sheet (SBSE), (TSLODK) are used to establish a TEFRA key case record (already open on AIMS) on the PCS.

Form 14092, ILSC Linkage Check Sheet (SBSE) or, Form 14093, ILSC Linkage Check Sheet (LB&I), is used to establish a ILSC key case record (already open on AIMS) on the PCS.

Add TMP info via TSCHG

See IRM 4.31.2 and 4.31.3 for more information about the electronic linkage process.

Form 8340, PCS TEFRA Establish or Add, is used to establish TEFRA notice investor records on the PCS and AIMS using CC TSLODK. AIMS then requests the investor tax returns. Exhibit 4.29.2-2 provides instructions for completing Form 8340, and the Upper Section of the Electronic Linkage Forms.

The Form 8340 was incorporated into the Form 14090 and Form 14091, TEFRA Linkage Package Check Sheets, and Form 14092 and Form 14093, Investor Level Statute Control Linkage Check Sheets. If the new forms are used, the Form 8340 is not necessary.

The display information for TSLODK is located in IRM 2.2.2, Command Code TSCLS.

The key case must be a full record on AIMS before the investor records can be established and linked on the PCS. If the key case has closed and is in status code 90 on AIMS, the investor records can be created and linked without changing the status code of the key case.

The key case examiner completes Form 14090 or Form 14091 and forwards it with a copy of the key case return including the Schedules K-1 to the appropriate campus. The Campus TEFRA or Notice Coordinator reviews the package to ensure all items included on the check sheet are included.

Prior to establishing the linkage, the CPF inputs AIMS Freeze Code "H" (TEFRA key case), using CC AMFRZ.

Input of the CC TSLODK automatically generates:

A CPF uses Form 8341 with CC TSLOD to link TEFRA notice investors if the NBAP was mailed to the investor before the record was established on the PCS.

CC TSLOD accesses the master files to verify the TIN, name control and Master File Tax Account Code (MFT), and rejects any input that does not match the master file.

Form 8341, PCS Establish or Add, is used to establish:

The Form 8341 was incorporated into the Form 14092 and Form 14093, ILSC Linkage Package Check Sheets.

The key case record must be on AIMS, or already on PCS, before the investor records can be established and linked on the PCS.

Form 8341, item 1, is used to select CC TSLOD.

CC TSLOD accesses the master files to verify the investor TIN, name control, and MFT and rejects any input that does not match.

Exhibit 4.29.2-3 provides instructions for completing Form 8341, and the Upper Section of the Electronic Linkage Forms.

When a subsidiary return is identified, both the parent and the subsidiary need to be linked.

First, a CC TSLODP will be input to link the parent to the key case. The existence of a normal tier value ( # or blank) on the key case will result in the establishment of the parent as an investor, but a “P” will be displayed on the tier indicator of the partner record. A CC TSLODP will not generate an NBAP to the parent. The NBAP to the subsidiary returns is all that is needed.

A CC TSLODS will then be used to load the subsidiary return(s). The Non-Master File (NMF) AIMS record must be created, and then the CC TSLODS will be input. The CC TSLODS will establish the NMF linkage, and an "S" will be displayed on the tier indicator of the partner record.

Special User Message should be used to cross reference the parent and subsidiary returns. Use TSCHG item 7 to add Special User Message. For example on parents add “Sub: EIN(s)” and on subsidiary returns add “Par: EIN(s)”. Where Employee Identification Number (EIN) is the actual EIN of the entity.

Next, a CC TSCHG must be done to update the K-1 name and address information for each subsidiary record. The K-1 information of each subsidiary will be altered as follows:

When 60-Day Letters or FPAAs are generated, a CC TSNOT will be input as normal. PCS will identify the parent/sub relationship and generate two copies of the letters and two cover sheets.

For corporate tax years beginning before June 28, 2002, notices should be addressed to and agreements signed by the parent, as the subsidiaries have no legal authority to bind the parent to an agreement. If the agreement is for a partnership year(s) ending on or before the last day of a consolidated return year beginning on or after June 28, 2002, then a currently authorized officer of the subsidiary corporation should sign the agreement and should do so in the name of the subsidiary corporation. See Treas. Reg. 1.1502-77(a)(6)(iii). The signature and title of a current officer of the subsidiary corporation, who is authorized to bind the corporation, should be displayed in the signature block. As a precaution, the agreement should also be signed by a currently authorized officer of the corporation who was the common parent corporation of the consolidated group for the relevant consolidated return year(s). The signature and title of a current officer of the common parent corporation, who is authorized to bind the common parent corporation, should also be displayed in the signature block.

If a subsidiary record is established on AIMS as an NMF account, the record cannot be established on AIMS and the PCS by using a PCS form.

A no-load tier is a tier where a decision is made not to link it's investors. When a campus has properly identified a no-load tier return, a TSCHG 35-X will be entered. This will put an "X" in the tier indicator field. The "X" will establish that the tier was perfected and that no tier investors will be loaded. See IRM 4.31.3.4.2.11, No-Load Tiers, for more information on identifying a no-load tier.

An "X" in the tier indicator field will prevent any investors from being TSLOD'd onto the tier. If the "X" was input in error, it must be removed before any investors can be loaded. The "X" can be removed by using CC TSCHG 35-D.

The PCS has unique database elements and includes AIMS database elements. Database elements unique to the PCS are discussed in section 3 of this chapter.

Updates made to AIMS database elements common to the PCS are reflected on the PCS database records after nightly processing. If the PCS and AIMS records are within the same campus area, AIMS changes are reflected on the PCS after nightly processing.

Form 8339, is used to update or change the PCS database elements. These updates are shown immediately after input. Exhibit 4.29.2-4, Instructions for Form 8339 , PCS Change, provides instructions for completing Form 8339.

Exhibit 4.29.2-5, TSCHG Elements and Valid Range of Values, summarizes the CC TSCHG elements and their valid range of values.

Form 8339, PCS Change (TSCHG), is used to update the PCS database elements for a specific key case or investor record. The elements which can be updated can be found in Exhibit 4.29.2-5.

Updates made through CC TSCHGI, item 05 only when inputting assessment amounts, must provide the TIN, MFT and tax period of the ultimate key case and the TIN, MFT and tax period of the entity to which the taxpayer is directly linked. If the investor is directly linked to the key case, an "S" may be entered in position 34 instead of re-entering the information.

The ultimate key case information is needed in order to track the amounts of the investor's assessments back to the key case. The tier information, if any, is needed for identifying the correct linkage.

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. 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 TSCHG item 18 entry of $199,000 needs to be made to reset the Partnership Assessment amount total to the correct amount.

Form 8336, PCS Mass Change, is used to make mass change requests for updates to Report Package Received Date, One-Year Assessment Statute Dates, Project Codes, TEFRA indicators and Investor Closing Code on investor accounts that are linked to the specified pass-through record. Mass changes are input via real time by CC MSCHG; updates are made during nightly processing at MCC.

Mass changes do not update multiple linked tier returns. If an investor is also a tier key case, then a mass change must also be input to update the database elements for the investors of the tier.

Mass changes for the TEFRA indicator and special project code update the pass-through record and linked investor records.

The change to the Report Package Received Date will be applied to all investors controlled by the campus inputting the change. This will also automatically update the Report Package Received Indicator of each investor to "Y" .

PCS Coordinators must review and approve all mass change update requests on Form 8336, PCS Mass Change.

Only the campus CPF can initiate and input CC MSCHG. These updates can affect all first tier investors nationwide, unless specifically restricted as with the Report Package Received Date.

CC MSCHG inputs to project codes cause updates to the AIMS database on CPF controlled cases only.

A CC MSCHG for the one-year assessment statute date and applicable Investor Closing Code will be input when a TEFRA key case defaults or when a Tax Court decision is reached.

A CC MSCHG for the Investor Closing Code can only be entered to correct an existing code. It cannot be used to enter the code initially. The initial code must be entered when the OYD is input.

The Form 8336 will be retained for one year after input by the PCS Coordinator. Retention of the forms will provide an audit trail of mass change requests.

Exhibit 4.29.2-6, Instructions for Form 8336, PCS Mass Change, provides instructions for completing Form 8336.

Exhibit 4.29.2-7, Mass Change Elements and Their Characteristics, summarizes mass change elements and their characteristics.

CC MSCHG inputs are restricted to campus PCS Coordinators.

CC TSCHGM can be used to update specific item numbers on multiple investor records. Where CC TSCHG allows the users to update multiple item numbers of one investor record, CC TSCHGM allows the user to update one item number for multiple investors. Form 8344 is the input document for CC TSCHGM.

CC TSCHGM can be used to update only specific Item Numbers. They are:

CC TSCHGM cannot be used to close linkages.

In put of the Item 27 - Report Package Received Date will automatically update the Report Package Received Indicator to a "Y" .

Exhibit 4.29.2-8, Instructions for Form 8344, PCS Change – Multiple Investor Records, provides direction for completing Form 8344

Exhibit 4.29.2-9, TSCHGM Elements, lists the specific item numbers that may be updated using TSCHGM.

The CC TSUMY display gives a summary of linkages for a key case or investor record. In addition to providing entity information for each linkage, the following elements are displayed:

Exhibit 4.29.2-11, Instructions for Form 8623, PCS Summary, provides instructions for completing Form 8623, PCS Summary, which is used to input CC TSUMY.

If a record is a tier (an investor and a pass-through return), inquire on both records to obtain complete information. (TSUMYI and TSUMYP)

The display of CC TSUMY information is provided in IRM 2.2.9, PCS Command Code TSUMY.

Form 8337, PCS Key Case/Investor Inquiry, is a valid form that may be used to request a printed CC TSINQ display. CC TSINQ provides real time access to PCS records.

The display of CC TSINQ information is provided in IRM 2.2.4, PCS Command Code TSINQ.

CC TSUMY is the primary command code for PCS research. CC TSINQ is used when information not available on CC TSUMY is required for a specific investor or pass-through.

If a record is a key case and a tier (an investor and a key case return), inquire on both records to obtain complete information. (TSINQI and TSINQP)

Use the Transaction Code (TC) 424 drop date to remove skeletal records and the purge date to remove linkage for erroneously established investors. The drop date and purge date are input using Form 8339 , PCS Change.

Instructions for completing Form 8339 are in Exhibit 4.29.2-4.

Erroneous investor records, closed from the PCS, must be closed from AIMS using the appropriate AIMS forms and command codes. Refer to IRM 4.29.2.6.4, Removal of Records From the PCS, of this Handbook for closing instructions for AIMS records of erroneously linked PCS investors.

The display of CC TSCHG information is provided in IRM 2.2.3, PCS Command Code TSCHG.

Form 8335, PCS Linkage Delete, is not used to remove investors from the PCS database. It is used to delete an erroneous investor linkage where the investor is linked to more than one key case. Only the key case CPF PCS Coordinator can delete investor linkages. The erroneously linked investor records are removed immediately.

Form 8335 only deletes the linkage between the investor record and the specific key case. Deleting the linkage does not delete the investor record nor the key case record from the PCS or from AIMS. However, the investor record will drop from the PCS if there is no open linkage to a key case after deleting the erroneous linkage.

Deleted investors are shown on PCS Report 7-3, Deleted Investors, which is an action report that must be worked by the PCS Coordinator. Detailed information about Report 7-3 is provided at IRM 4.29.4.4.3, Deleted Investors, Report 7–3.

See Exhibit 4.29.2-10, Instructions for Form 8335, PCS Linkage Delete, provides instructions for completing Form 8335.

If a TEFRA investor linkage is input incorrectly by CC TSLODK and is deleted the same day, the TEFRA notice will still be generated, and the 424 request will still go to MF, creating an AIMS database if all data was input correctly. The entire record can be removed by notifying the PCS Coordinator and having the record removed on the day of initial input. If the record is removed by 6:00pm EST on the day of input, neither the notice nor a full AIMS will generate. The record will only be removed on an F1 (skeleton 424) record only, and there may be only one key case linkage. After the CC TSDEL, only a Campus PCS Coordinator may enter a TSCLSE. After input and error message will generate that states, "PICF-CD CHANGED TO ZERO ON AIMS. YOU MUST INPUT AM424D" . The AM424D must then be input to completely reverse the TSLOD.

Input of Form 8335 by CC TSDEL is restricted to the campus PCS Coordinator. A request to delete a PCS record can be made using Form 14520, Pass-Through Control System (PCS) Linkage Deletion Request. The request can be completed and emailed, using encryption, to the PCS Coordinator. A hard copy of the request will be kept in the key case administrative file for historical purposes.

The display of CC TSDEL information is provided in IRM 2.2.5, PCS Command Code TSDEL.

The display of the CC TSCLSE information is provided in IRM 2.2.7, PCS Command Code TSCLS.

CC TSCLS is used to release the key case linkage freeze on AIMS investor records controlled on the PCS. Releasing the linkage freeze allows the investor return to process through full closure on AIMS.

CC TSCLS does not remove key case linkages, it only releases the linkage freeze. To remove an erroneous linkage refer to the previous subsections.

When processing Form 5344, Examination Closing Record, with an entry in the CC TSCLS block at the top of page 1, input the CC TSCLS before AMCLS. AIMS closing command codes should be input immediately after input of CC TSCLS.

AIMS closure of any PCS linked return requires the input of CC TSCLS as part of the final closing action. When an investor return is closed non-examined and there is a valid linkage to an ILSC key case, forward to the appropriate campus.

TEFRA investors linked directly to a key case may never be closed without being examined.

CC TSCLS CANNOT be used when a partial assessment is made or when a return is transferred to another area or closed to Appeals, unless all TEFRA and ILSC linkages are closed.

CC TSCLS will not be allowed when 55555555s are entered. See IRM 4.29.3.3.1.1, One-Year Assessment Statute Date.

The display of CC TSCLS information is provided in IRM 2.2.7, PCS Command Code TSCLS.

Key case and investor records are removed from the PCS database automatically at the expiration of the purge date, if there is a full AIMS record. See IRM 4.29.2.6.1, Purge Dates and TC 424 Drop Dates, (TSCHG), of this Handbook for information about the purge date.

The purge date is automatically set on the PCS record as the case is processed to closing on AIMS, status code 90. The purge date is set at two months from when status code 90 was entered.

The 424 drop date is set on the PCS record at 90 days from the request for AIMS establishment of the investor record. Once an AIMS record is fully established, the 424 drop date is no longer retained on the PCS database.

A record can be removed from the PCS without closing the AIMS record by input of a date in the future (using Form 8339, PCS Change) that extends the purge date or 424 drop date to the selected future date when the record will close from the PCS.