Part 7. Rulings and Agreements

Chapter 14. Employee Plans EDS User Manual

Section 4. Letter Generation

7.14.4 Letter Generation

Manual Transmittal

June 04, 2021

Purpose

(1) This transmits revised IRM 7.14.4, Employee Plans EDS User Manual, Letter Generation.

Material Changes

(1) Added Internal Controls. Amended and renamed IRM 7.14.4.1, Program, Scope and Objectives. Added IRM 7.14.4.1.1, Background; IRM 7.14.4.1.2, Authority; IRM 7.14.4.1.3, Responsibilities; and IRM 7.14.4.1.4, Acronyms.

(2) Material contained in prior IRM 7.14.4.1, Overview, and IRM 7.14.4.1.1, Letter Generation Screens, is now contained in IRM 7.14.4.1.1, Background.

(3) Updated for plain language and editorial changes.

Effect on Other Documents

This supersedes IRM 7.14.4 dated September 2, 2015.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(06-04-2021)

Eric D. Slack
Director, Employee Plans
Tax Exempt and Government Entities

7.14.4.1 (06-04-2021)

Program Scope and Objectives

  1. Purpose: This IRM lists procedures for EP specialists, reviewers, managers and other authorized users for the Employee Plans/Exempt Organization Determination System (EDS) Letter Generation System (LGS).

  2. Audience: Employee Plans (EP) Determinations and Quality Assurance (QA) staff

  3. Policy Owner: Director, EP

  4. Program Owner: EP

  5. Program Goals: The goal of EP Determinations is to ensure that plans are in compliance with the tax laws by reviewing applications for Determination Letters (DL), and opinion letters, and to protect the public interest by applying the tax law with integrity and fairness to all.

7.14.4.1.1 (06-04-2021)

Background

  1. LGS is a subsystem of the Inventory Control System (ICS). At the ICS Main Menu (See Exhibit 7.14.4-1), select option 4 to access the Letter Generation (LG) Menu (Exhibit 7.14.4-2).

  2. At the LG Menu, you can access these screens:

    1. Create/Update Entity Information - (Exhibit 7.14.4-3)

    2. Create/Update Letter - (Exhibit 7.14.4-4)

    3. Letter Format and Printing - (Exhibit 7.14.4-5)

  3. Specifically, we use LGS to:

    1. Update entity information.

    2. Generate letters.

    3. Update previously created letters.

    4. Reprint letters.

    Caution:

    Do not update entity information in EDS on any case you are working in TEDS. Use TEDS to create/update all entity information or an EDS block will be created.

  4. Letter records are stored on EDS until the EDS System Administrator runs an archiving program. Records are only archived if a closing letter is created for the case.

7.14.4.1.2 (06-04-2021)

Authority

  1. Delegation Order 7-1, IRM 1.2.2.8.1, states the Director, Employee Plans has authority to issue favorable DLs on the qualified status of:

    1. Pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans under IRC 401, IRC 403(a), IRC 409, IRC 4975(e)(7).

    2. The status for exemption of any related trusts or custodial accounts under IRC 501(a).

  2. Find a complete list of delegation orders governing EP Rulings and Agreements at https://www.irs.gov/privacy-disclosure/delegation-orders-and-policy-statements-by-process

  3. See IRM 7.1.1, Exhibit 7.1.1-1 for a complete list of the major EP revenue procedures currently in effect.

7.14.4.1.3 (06-04-2021)

Responsibilities

  1. The Director, EP supervises and is responsible for:

    1. EP Rulings and Agreements

    2. EP Examination functions

    3. EP Program Management Staff

  2. The Director, EP Examination, supervises and is responsible for:

    1. EP Examinations

    2. EP Examinations, Area Managers

7.14.4.1.4 (06-04-2021)

Acronyms

  1. The table lists commonly used acronyms and their definitions.

    Acronym Definition
    DL Determination Letter
    EP Employee Plans
    EDS EP/EO Determination System
    ICS Inventory Control System
    LG Letter Generation
    LGS Letter Generation System
    QA Quality Assurance
    TEDS Tax Exempt Determination System

7.14.4.2 (09-02-2015)

Creating or Updating Entity Information

  1. Entity information is automatically transferred from the Data Transcription System (DTS) or TEDS to LGS. If entity information is not present or is incorrect for a case, you can add/correct it in LGS before you create a letter.

  2. Select option 1 (Create or Update Letter) to update entity information and create a letter.

  3. Select option 3 (Create or Update Entity) to update entity information without creating a letter.

    Caution:

    Do not use option 3 to create an entity because it creates an application in status 90 which can't be worked.

  4. The Create or Update Entity Information screen (Exhibit 7.14.4-3) displays after you select these options. When you enter any character (lower or upper case) on this screen, the system automatically converts it to upper case when saved. Make any necessary changes and press F1 to advance to the next screen.

    Caution:

    Do not update entity information in EDS on any case you are working in TEDS. Use TEDS to create/update all entity information or an EDS block will be created.

7.14.4.3 (09-02-2015)

Creating Letters

  1. The Create/Update Letter screen (Exhibit 7.14.4-4) displays after you select option 1 (Create or Update Letter) on the LG Menu and update any entity information.

  2. The two major parts to create a letter are selecting the addressee(s) and entering the letter text.

  3. Select the addressee by placing an "X" before the Taxpayer, POA 1 and/or POA 2 boxes. The POA(s) information must be displayed on the Create or Update Entity Information screen before you can enter an "X" .

  4. Add any paragraph codes in the Para/Variable section of the screen. See IRM 7.13.5, Letter Generation, for a description of automatic, required, selective, and customized paragraphs.

  5. After you complete the Create/Update Letter screen and press F5 key, the Letter Format Screen (Exhibit 7.14.4-5) displays.

Exhibit 7.14.4-1

Letter Generation System (LGS) - Inventory Control System Main Menu (ICS)

(1) The ICS Menu displays when you select option 3 on the EDS Main Menu. Select option 4 to get to the LG Menu.

 
EDS-ICS-40ep EP DETERMINATION SYSTEM (EDS)
INVENTORY CONTROL SYSTEM MENU (ICS)
  (01) Query/Update Master Record and Status
  (02) Reserved
  (03) Multiple Case Assignment
  (04) Letter Generation System
  (05) Reprint Transmittal Sheets
  (06) Reserved
  (07) Print Closing Forms
  (08) Approval of Closed Cases
  (09) Reserved
  (10) Multiple Status 51/58/60/75 Updates
  (11) Re-Open To Review
  (12) Multiple Merit Closure Assignment
   
  (00) EXIT
   
  ***Select one of the above:__
Hit F1:Execute F10:Exit



(2) Press the F1 key.
Validity Checks
ITEM PROMPT DESCRIPTION
1 Select one of the above Must be one of the valid option numbers (00 - 12).

Exhibit 7.14.4-2

Letter Generation Menu

(1) Select option 4 on the ICS Menu and you'll see the LG Menu.

EDS-LGS-3 LETTER GENERATION MENU
   
LETTERS ENTITIES
(01) Create/Update Letter (03) Create/Update Entity
(02) Reprint a Letter  
MISCELLANEOUS
(00) Exit
   
***SELECT ONE OF THE ABOVE:__
DLN: ______ Letter Number: __
EDS Case No: ___TEDS Case No: ______
   
Hit F1: Execute F10:Exit  
NOTE: The DLN search will NOT find cases that are older than 9 years.

(2) Enter option number 1, 2, or 3, the DLN, EDS or TEDS case number, and letter number. Press F1. If you don't enter the DLN, EDS/TEDS case number, or enter them incorrectly, or if the entity does not exist, an error message displays.

Note:

NEVER use option 3 to create an entity. It will create an application in status 90 which cannot be worked. However, you may use option 3 to update an existing entity.



(3) If you select option 1 and there aren't input errors, the Create/Update Entity Information - Employee Plans screen (Exhibit 7.14.4-3) displays. If there is an input error, correct the search information and press F1.

(4) If you select option 2 and there aren't input errors, the Print Format/Selection screen (Exhibit 7.14.4-5) displays. If there is an input error, correct the search information and press F1.

(5) If you select option 3 and there aren't input errors, the Create/Update Entity Information - Employee Plans screen (Exhibit 7.14.4-3) displays. If there is an input error, correct the search information and press F1.

Caution:

Only update an existing application if you aren't working the case in TEDS. Otherwise, an EDS block is created.

Validity Checks
ITEM PROMPT DESCRIPTION
1 Select one of the above Must be one of the valid option numbers (0, 1, 2, or 3).
2 Document Locator Number (DLN) Use with options 1, 2, or 3. If not used, enter EDS Case Number or TEDS Case Number - must be numeric.
3 Letter Number Enter the letter number created or reprinted for options 1 and 2 and it must be numeric. The letter number must exist in the EDS letter text. See IRM 7.13.5, Letter Generation for available letter numbers.
4 EDS Case Number Use with options 1, 2, or 3. If not used, enter DLN or TEDS case Number - must be numeric.
5 TEDS Case Number Use with options 1, 2, or 3. If not used, enter DLN or EDS Case Number - must be numeric.
Exhibit 7.14.4-3

Create or Update Entity Information

(1) Select option 1 or 3 from the LG Menu and this screen displays. Use this screen to update entity information.

Caution:

Only update an existing application if it is not being worked in TEDS. Otherwise, an EDS block is created.

EDS-LGS-4 CREATE OR UPDATE ENTITY INFORMATION - EP
EIN:_-____ PLAN: __FFN: _____DLN: ______
Plan Sponsor Name: ____________________
  ____________________
  ____________________
  ____________________
In Care Of: ____________________
Address: ____________________
City: ___________ State: _Zip: ___- __
Name of Plan: ___________________
  ___________________
Power of Attorney (1) Name: ____________________
  ____________________
Address: ____________________
City: ___________ State: _Zip: ___- __
Power of Attorney (2) Name: ____________________
  ____________________
Address: ____________________
City: ___________ State: _Zip: ___- __
Hit F1:Execute F10:Exit

(2) If you select option 3 on the LG Menu, this screen displays entity information. If a blank screen displays, the entity does not exist and you should press F10 to return to the LG Menu. If information displays, review the entity information for accuracy and correct any errors (not applicable for TEDS cases) and press F1 to save changes. If EDS does not pass the validity checks (below), an error message displays and the cursor is positioned on the field in error. Correct the error (not applicable for TEDS cases) and press F1. Press F10 if you do not want to save changes. The LG Menu (Exhibit 7.14.4-2) displays when you press either F1 or F10.

(3) If you select option 1 on the LG Menu, this screen displays entity information. The screen functions the same as described in (2) above except that the Create or Update Letter screen (Exhibit 7.14.4-4) displays when you press F1.

Validity Checks
ITEM PROMPT DESCRIPTION
1 EIN Employer Identification Number. Must be a valid EIN. The first two digits must be in the valid range as follows:
    01-06, 11, 13-16, 21-25, 31, 33-39, 41-48, 51-59, 61-64, 66-68, 71-77, 81-88, 91-99.
2 PLAN NUMBER Plan number. If entered, must be numeric.
3 FFN File Folder Number. If entered, must be numeric. First two digits must match the first two digits of the Case Number.
4 Case Number Display only.
5 Plan Sponsor Name (Line 1) Must be entered. If the Plan Sponsor Name is more than 35 characters long, continue on line 2; do not break a word after 35 characters. Carry the full word or grouping to line 2. All 35 positions of line 1 do not have to be filled to continue on line 2. Valid characters are any key on the keyboard, however, the first position must be alphabetic or numeric. No characters may follow two consecutive blanks, except blanks.
6 Plan Sponsor Name (Line 2) If entered, Plan Sponsor Name (Line 1) must be entered. See Plan Sponsor Name (Line 1).
7 Plan Sponsor Name (Line 3) If entered, Plan Sponsor Name (Line 2) must be entered See Plan Sponsor Name (Line 1).
8 Plan Sponsor Name (Line 4) If entered, Plan Sponsor Name (Lines 2 and 3) must be entered. See Plan Sponsor Name (Line 1).
   

Note:

If State is (.), this line should contain the foreign street address. Lines 2 and 3 may then be left blank.
9 Address May or may not be entered. If entered, the valid characters are any key on the keyboard. If any data is entered, the first position must be alphabetic or numeric.
   

Note:

If this is a foreign address, enter the street address on the Sponsor Name (Line 4). Enter the foreign City on this line.
10 City Must be entered. The valid characters are any key on the keyboard, however the first character must be alphabetic or numeric. No characters may follow two consecutive blanks except blanks.
    Note: If this is a foreign address, enter the City on the Address Line. Enter the foreign Country on this line. If this is a MILITARY address, FPO or APO must be entered on this line if State is "AA" , "AE" or "AP."
11 State Must be entered. Must be a valid state abbreviation or for foreign addresses, a period followed by a blank (.). If this is a MILITARY address, enter the following:
    State Code Geographic Region
    AA No & So America
    AE Europe
    AP Pacific
12 Zip Must be entered and numeric. The number making up the first 5 positions must be greater than 00600. If this is a MILITARY address, the zip code must be in the following ranges:
    State Code Zip Code Range
    AA 34001-34099
    AE 09001-09899
    AP 96201-96699
    A validity check is executed on EDS to verify the state and zip code. If an invalid zip code is entered, the system message will ask you to verify the current zip code or correct.
13 Power of Attorney May or may not be entered. If POA Name is more than 35 characters long, continue on Line 2. Do not break a word after exactly 35 characters, carry the full word or grouping to Line 2. All 35 positions of Line 1 do not have to be filled to continue on Line 2. Valid characters are any key on the keyboard, however the first position must be alphabetic or numeric.
14 POA (1) (Line2) May or may not be entered. If entered "POA (1) (Line 1)" must be entered. Valid characters are any key on the keyboard, however if any data is entered, the first position must be alphabetic or numeric. No characters may follow two consecutive blanks except blanks.
15 Address May or may not be entered. If entered, the first position must be alphabetic or numeric. The valid characters are any key on the keyboard.
16 City Must be entered if "POA (1) (Line 1)" is entered. The valid characters are any key on the keyboard, however the first position must not be blank. No consecutive characters may follow two blanks except blanks. If this is a MILITARY address, FPO or APO must be entered on this line if State is "AA" , "AE" or "AP."
17 State Must be entered if "POA (1) (Line 1)" is entered. Must be a valid state abbreviation or, for foreign addresses, a period followed by a blank (.). If this is a MILITARY address, enter the following:
    State Code Geographic Region
    AA No & So America
    AE Europe
    AP Pacific
17 Zip Must be entered if "POA (1) (Line 1)" is entered. Must be numeric. The number making up the first 5 positions must be greater than 00600. If this is a MILITARY address, the zip code must be in the following ranges:
    State Code Zip Code Range
    AA 34001-34099
    AE 09001-09899
    AP 96201-96699
    A validity check is executed on EDS to verify the state and zip code. If an invalid zip code is entered the system message will ask you to verify the current zip code or correct.
18 Power of Attorney (2) See Power of Attorney (1), item 12, above.
19 Power of Attorney (2) (Line 2) See Power of Attorney (1) item 13, above.
20 Address See Address, item 14, above.
21 City See City, item 15, above.
22 State See State, item 16, above.
23 Zip Code See Zip Code, item 16, above.

Exhibit 7.14.4-4

Creating and Updating Letters

(1) Select option 1 on the LG Menu and press F1 in the Create or Update Entity Information screen and this screen displays. Use this screen to create, update and review a letter.

 
EDS-LGS-5 CREATE/UPDATE LETTER
EIN: ____FORM/PLAN: __FFN: ___LETTER CODE:_
Addressee (Place x before) _TAXPAYER
_ POA 1 _POA 2
Para Variable Para Variable Para Variable
__ ______ __ ______ __ _____________
__ ______ __ ______ __ _____________
__ ______ __ ______ __ _____________
__ ______ __ ______ __ _____________
__ ______ __ ______ __ _____________
__ ______ __ ______ __ _____________
__ ______ __ ______ __ _____________

Required Paragraph w/ Variable - Enter Paragraph Number
______________________________
 
  Hit F1-Execute, F4-Delete, F10-Exit

(2) This screen displays letter information if a letter was previously created for the application. Otherwise the screen is blank.

(3) Enter the fields according to the validity checks below. See IRM 7.13.5, Letter Generation, for a list of all available EDS paragraphs and IRM 7.11.5, Proper Use of Determination Letter Caveats, for commonly used EDS paragraphs for Letters 1132 and 5274.

(4) Press F1.

(5) If EDS does not pass the validity checks, an error message displays and the cursor is positioned on the field in error. Correct the error and press F1 again. If there aren't input errors and you entered customized paragraphs numbers, the Create/Update Letter (Continued) screen displays. Continue at (8), below. If there aren't input errors and you didn't enter customized paragraphs numbers, a message to press F5 displays. If you make any additional changes to letter, press F1 again to save the new changes. Once the letter is complete, press F5 to save and print the letter. The Print Format/Selection screen (Exhibit 7.14.4-5) displays.

(6) Press F4 to delete a letter from the system.

(7) Press F10 to exit the screen without saving changes.

Validity Checks
ITEM PROMPT DESCRIPTION
1 EIN Display only. Employer Identification Number.
2 FORM/PLAN Display only. Plan number for EP.
3 FFN Display only. File folder number. Will be blank if FFN was not entered in the Create/Update Entity screen.
4 LETTER CODE Display only. Letter number entered in the Letter Generation Menu screen.
5 TAXPAYER Enter an "X" if a copy of the letter is to be sent to the Plan Sponsor or Organization.
6 POA 1 Enter an "X" if a copy of the letter is being sent to the POA. If the POA Name is not displayed, an "X" may not be entered.
7 POA 2 Enter an "X" if a copy of the letters is being sent to a second POA. If the POA Name is not displayed, an "X" may not be entered.
8 Para Paragraph codes. Enter all 8000 series paragraphs displayed, any selective or customized paragraphs.
9 Variable Variable text consisting of 1 to 20 characters that is inserted in the paragraph number entered. Enter the text that should be inserted into the variable. The text is printed exactly as entered. Upper and lower case characters must be entered where desired.
10 Required Paragraph Codes Display only. Paragraph codes that must be entered in item 8 above. All "Required" paragraphs must have variable text entered.


(8) When you enter a customized paragraph code (9000-9999) on the Create/Update Letter screen, this screen displays.
EDS-LGS-6 CREATE/UPDATE LETTER (CONTINUED)
EIN: ____FORM/PLAN: __FFN: ___LETTER CODE: __ORG NAME:____________________
Customized Paragraph Code: __
Enter Text Below:
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
______________________________________
Hit F1-Execute, F4-Delete, F10-Exit


(9) This screen displays customized paragraphs if one was previously created. Otherwise the screen is blank.

(10) Enter or correct the customized paragraph. See IRM 7.11.5.5, Additional Guidance / Common Errors, when adding customized paragraphs.

(11) Press the F1 key. You'll see one of the following:

  1. Another customized paragraph if you created more than one.

  2. Another blank screen if you entered more than one 9000 series paragraph number on the Create/Update Letter screen.

  3. The Create/Update Letter screen if you didn't enter any more 9000 series paragraphs. The message to press the F5 key displays.


(12) Press F4 to delete a 9000 paragraph from the letter.

(13) Press F10 to exit this screen without saving changes.

(14) Once the Create/Update Letter screen displays, a message to press F5 displays. If you change any other items on the letter, press F1 again to save the new changes. If you press F1, continue at (8), above. When you complete the letter, press F5 to save and print it. The Print Format/Selection screen (Exhibit 7.14.4-5) displays.

 
Validity Checks
ITEM PROMPT DESCRIPTION
1 EIN Display only. Employer Identification Number.
2 FORM/PLAN Display only. Plan number for EP.
3 FFN Display only. File folder number. Will be blank unless a FFN has been entered in the Create/Update Entity screen.
4 LETTER CODE Display only. Letter number entered in the Letter Generation Menu screen.
5 ORG NAME Display only. Plan Sponsor or Organization name.
6 Customized Paragraph Code Display only. 9000 series paragraph number entered in the previous screen.
7 Enter Text Below Enter the text of the paragraph in exact format it should be printed. The text can be up to ten (10)* lines of 79 characters each.
    *NOTE: When beginning a paragraph, always leave the first line blank. Begin text on the second line. If the paragraph is long enough to require two screens (two 9000 series) enter a second paragraph number.

Exhibit 7.14.4-5

Printing Letters

(1) Press F5 in the Create/Update Letter screen and this screen displays. Use this screen to print the letter.

EDS-LGS-10 LETTER FORMAT SCREEN
   
  * Employee Number ___
  * Left Margin __
  * Print Mode _
  * Device Number __
  * Address Paragraph for Form 9098 ___
   
   
Hit F1:Execute


(2) The last line "Address Paragraph for Form 9098" only displays if you add paragraphs 6 and 8503 to a Letter 1132.

(3) Enter the fields according to the validity checks below. See your manager for the left margin and print mode used in your Post of Duty.

(4) Press F1.

(5) When there aren't input errors, more print screens will display. See your manager for the correct information to add to these print screens. The LG Menu (Exhibit 7.14.4-3) displays after the letter prints.

(6) When there is an input error, the error message displays and the cursor is positioned on the field in error.

  1. Correct the input error.

  2. Continue at (4), above.

Validity Checks
ITEM PROMPT DESCRIPTION
1 Employee Number Must be numeric. Enter the five digit EDS Employee/Specialist number.
2 Left Margin Must be numeric. Maximum margin is 19 spaces. See your manager for the margin to use in your Post of Duty (POD).
3 Print Mode Valid entries are B, N, S, T, V, 1 - 9 or blank. Blank will default to "B." See your manager for the mode to use in your POD.
    T - send to a text printer
S - sent to a slaved printer
B - set up letter for batch print
N - save letter but not print it
V - view a letter just created
1 - 9 - locally defined print modes
4 Device Number If "T" entered in the print mode, must be a printer number. Must be numeric.