The production of this IRM is to provide instructions to screen individual and/or business allegations on Form 3949-A for factual potential tax violations. The IDRS research involves tax module analysis to warrant the submission meets examination standards based on criteria submitted from the receiving BODs. This BOD support will reduce the number of unfounded allegations and misroutes. Document Perfection Operation (DPO), Entity Tax Examiners in the Ogden Submission Campus will conduct the research. Due to the decision to consolidate additional campuses in Submission Processing, Fresno Campus closed in 2021. The Form 3949-A Information Referral Program has transitioned to the end state site Ogden Submission Processing Center.

Title 26 of the United States Code (USC) 7801 and Code section 6103.

Submission Processing, Specialty Programs Branch, Post Processing Section is responsible for the content in this IRM. The IRM Author will make changes as needed and revise entire content once a year effective August 1st of each calendar year.

The Director of Submission Processing is responsible for policy related to this IRM.

The Post Processing Section manager is responsible for ensuring the IRM is timely submitted to Publishing each year.

Manager is responsible to expedite all referrals by assigning, and monitoring the workflow to accomplish timely completion of the tasks required through this IRM.

Managers are responsible for ensuring quality reviews are performed.

Managers will monitor the reasons for referrals being destroyed and utilize a mechanism to track reasons the referrals were retained for destruction. Refer to Document 12990, Records and Information Management Records Control Schedules (RCS) 23, Item 64 c) Administration (NARA) to avoid inadvertent/unlawful destruction of records.

Managers will monitor referrals returned and record the date, quantity, area and reason the referral was returned.

Managers must ensure internal control responsibilities are carried out in relation to Separation of Duties. Key duties and responsibilities in authorizing, processing recording, reviewing transactions and handling related assets (e.g., preparing inventory reports), must be separated among individuals to reduce the risk of error or fraud. No one individual should control all key aspects of a transaction or event.

Entity Tax Examiners are responsible for following instructions contained in the IRM.

Entity Clerical is responsible to expeditiously route all completed referrals to the appropriate BOD a minimum of once a week.

A list of some of acronyms used in this IRM are found below. This list is not all inclusive. For details on other acronyms, please refer to the Acronym Database at http://rnet.web.irs.gov/Resources/Acronymdb.aspx

The following IRMs and publications are used in conjunction with this IRM section:

Service Center Directors, Headquarters Branch Chiefs, and Headquarter Analysts do not have the authority to approve deviations from IRM procedures. Any request for an exception or deviation to an IRM procedure must be elevated through appropriate channels for executive approval. This will ensure other functional areas are not adversely affected by the change, and it does not result in disparate treatment of taxpayers.

See specific guidelines in IRM 1.11.2, Internal Management Documents System, Internal Revenue Manual (IRM) Process. Request for an IRM deviation must be submitted in writing and signed by the Field Director, following instructions from IRM 1.11.2.2.4, when procedures deviate from the IRM.

The Program Owner will coordinate any disclosure issues. No deviations can begin until reviewed by the Program Owner and approved at the Executive Level. All requests must be submitted to the Submission Processing Headquarters IRM Coordinator.

The modules accessed on IDRS is only permitted to accomplish the official duties of the examiner.

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Form 3949-A is used to report potential tax violations but does not have to be included when reporting a tax violation. When Form 3949-A is submitted, the submissions will be worked by tax examiners reviewing Section B 3 “Alleged Violation” and/or keywords/key phrases in Section B 5 on Form 3949-A.

Consider each form on its own merit when multiple Forms 3949-A are attached.

Review the submission against IDRS to determine whether the submission contains specific and credible data for a potential federal tax issue.

If analysis disproves the allegation as factual, route to retention.

When a Form 3949-A information referral requires conversion, notate in the top left corner of the document what you are converting the referral to. Include referring BOD in the top right corner. Make sure that all edit marks are made in RED pen only and date stamp in the top left.

Identify multiple issues and determine if it involves multiple BODs. If analysis disproves the authenticity on one sort, continue with analysis to authenticate all issues.

If the issues identified concern multiple BODs, identify all BODs and prioritize and route appropriately following If Then table.

Form 3949-A referrals may be received digitally through the Document Upload Tool (DUT) from the taxpayer or uploaded digitally by an IRS employee.

Digitally received referrals follow the same routing process as the paper referral process. However, the following differences exist:

Referrals should be processed in a First-In, First-Out (FIFO) order.

When a Form 3949-A is received written in a language other than English, please follow the guidelines located in IRM 22.31.1.5.1.1, Requesting Translations of Non-Vital Documents from Certain Languages into English. These should be routed weekly. See Forms And Publications - Request Translation Services (irs.gov)

Each BOD determines the acceptance criteria of the Information Referral. Criteria differs for each sort and should be followed as outline in the IRM.

Use the initial research steps on all issues.

The tax examiner will use red pencils on the paper referral to indicate:

Using IDRS, validate the taxpayer or business matches the Form 3949-A. Perform additional research to identify and validate the taxpayer, spouse or business. If TIN is not on Form 3949-A but a TIN is located, please write correct TIN on Form 3949-A. If TIN identification cannot be made, return to clerical for retention.

Some categories require validation of the appropriate responsibility for the account by reviewing the BOD. The following describes the BOD code and defines the organization.

Validate the tax year and/or tolerance if BOD criterion is applicable on Form 3949-A, using IDRS or as instructed in the specific sort.

If verification of the taxpayer, business or allegation cannot be made, no other issues are listed in the information referral, and/or the criteria is not met, return the case to the clerical for retention. Do not identify any possible tax violations that are not relevant to the allegation indicated in the Information Referral.

File Maintenance Retention files are maintained per IRM 3.28.2., Form 3949-A Information Referral Program. Specify one of the reasons listed below and write ”2” on the Information referral as to why the case is placed in retention.

Dependent without Earned Income Tax Credit (EITC) criteria only applies to current processing tax year or the immediate prior tax year when the year is specified. If the allegation does not list a tax year, consideration should only be made to the current processing tax year. If the tax year listed is not the current processing tax year or the immediately prior tax year (when specifically addressed in the referral), review the allegation to determine if other BOD criteria exists.

Follow If Then Table: Follow If Then Table:

When the allegation consists of Non-Filing for an Individual Tax Return, review the tax module to determine if the alleged has filed ≡ ≡ ≡ ≡ ≡ ≡ (regardless of the tax year referenced in the referral).
Note:When CC IMFOL with definer “I” Posted Return Value is SUBST4 or TC 150 posted for a particular year, consider that year as a filed year.
Note:Research CC IMFOL with definer “T” for non-filed years. If there is a TC 594, consider that year as a filed year.

If the alleged has not filed a return for tax years #2018-2021#, continue to the “If…And…Then” chart below.

When the year is specified, Dependents with Earned Income Tax Credit (EITC) criteria only applies to current processing tax year or the immediate prior year. If the allegation does not list a tax year, consideration should only be made to the current processing tax year. If the tax year listed is not the current processing tax year or the immediate prior tax year (when specifically addressed in the referral), review the allegation to determine if other BOD criteria exists.

Conduct Initial review for selected referrals.

Research IDRS using command code (CC) IMFOL with definer “T” to verify that the tax year contains a posted, unreversed, TC 764 and/or TC 768, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

If there is a posted, unreversed, TC 764 and/or TC 768,≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ continue processing as W&I Campus Exam criteria.

For referrals that do not meet W&I criteria, refer to IRM 3.28.2.5.1, Dependent without Earned Income Tax Credit (EITC) for Current Processing Tax Year and the prior tax year to determine if allegation meets SBSE Campus Exam criteria.

If the allegation of unreported income on Form 3949-A is verified through IDRS for the following conditions below, accept the sort as CI Financial Crimes, if conditions below are not met remove from sort.

Use the following If And Then table to determine the correct sort

If the allegation relates to failure to file W-2s, research filings on CC PMFOL with definer “S”. If the “W-2” row reflects a number other than “00” in the “Documents” column, the allegation is invalid. Route to retention.

If the allegation relates to failure to file Forms 1099, use CC PMFOL with definer “S”. If either the “MISC” or “NEC” rows reflect a number other than “00” in the “Documents” column, the allegation is invalid. Route to retention.

If the allegation is not routed to retention based on the criteria above, continue to the “If…And…Then” chart below.

Estate Tax referrals

Gift tax referrals

If the allegation is not routed to retention based on the criteria above, continue to the “If…And…Then” chart below.

Excise taxes are taxes paid on the manufacture, sale or use of particular supplies or services. To identify if the issue is an Excise Tax issue All the following conditions must be met:

If the allegation is not routed to retention based on the criteria above, continue to the “If…Then” chart below.

Referrals mentioning Offshore, overseas or a foreign country or a U.S. Citizen living abroad are considered Withholding Exchange International Individual Compliance (WEIIC) issues. Remove from the sort and route for proper routing per IRM 3.28.2.14, Form 3949-A Information Referral Clerical Routing Guide.

Large business acceptance criteria for Information referrals:

Locate the EIN on the referral. If the EIN is not present, conduct research using CC NAMEE to locate the business.

Determine the filing requirements using CC INOLES. If research reveals filing requirements are only for Employment Taxes, Form 940 , Employer’s Annual Federal Unemployment (FUTA) Tax Return, and or for Form 94X , Employer’s Quarterly Federal Tax Return, research cross references to locate the parent EIN or to determine if the business is a Schedule C business.

If the allegation is not routed to retention based on the criteria above, continue to the “If…Then” chart below.