Compliance Data Environment (CDE) is a workload identification, planning, and delivery system that operates in a web-based environment. It is used to filter, order, classify, and deliver returns. It also allows for the electronic assignment to examiners of returns which will be uploaded into RGS. CDE also provides a secure environment for input and data retention of LIHC program data.

IRM 1.1.16.5.5.3, Exam Case Selection

IRM 1.1.16.6.1.6, Examination System & Projects

IRM 1.2.1.2.36, Policy Statement 1-236, Fairness and Integrity in Enforcement Selection

IRM 1.2.1.5.7, Policy Statement 4-9, Highest Integrity Expected

IRM 1.2.1.5.10, Policy Statement 4-21, Selection of Returns for Examination

The Director SB/SE Examination is the owner of CDE. The office of the Director SB/SE Examination is responsible for setting national standards and policies for the implementation and operation of CDE. This office is responsible for providing staffing and funding to ensure the ongoing operation of CDE.

The Director SB/SE Operations Support (OS), Technology Solutions (TS) has overall authority and responsibility for the security and proper operation of CDE. TS ensures the following national guidelines and standards are met:

The Director SB/SE Operations Support, Technology Solutions, Exam Systems & Projects (ESP) is responsible for the development, enhancement, and maintenance of CDE which includes:

Director, Exam Case Selection (ECS) is responsible for providing policy guidance, assistance, and oversight to the areas and campuses.

Program Manager, Field Case Selection (FCS) is the program manager responsible for providing guidance on the selection of cases and delivery of inventory for SB/SE Field Exam. FCS serves as a liaison between the CDE users and ESP on policy related issues.

The Planning and Special Programs (PSP) Territory Manager (TM) is responsible for the selection of cases and delivery of inventory within their exam area. The responsibility for the proper use and administration of CDE includes the following:

The Director, Security Operations & Standards Division, Associate Chief Information Officer (ACIO) certifies CDE operates within all IRS security parameters.

The PSP coordinator responsibilities are dependent on their authorized CDE user role. A coordinator's responsibilities can include the following:

The following program reports can be generated in CDE:

Only certain CDE users can create these reports.

Other reports can be created outside of CDE using a standalone program linked to specific data exported by CDE.

The reports can be used to analyze inventory, classification selection, issue identification, surveys, and other trends related to the selection of inventory.

Access to CDE is through the Employee User Portal(EUP). Request this access first.

Then submit a BEARS request (Business Entitlement Access Request System) for the requested user roles. See IRM 4.103.1.4, CDE Roles for examples of the available roles.

Security features include:

This table lists commonly used terms in CDE and their definitions:

This table lists commonly used acronyms and their definitions:

IRM 4.1.2, Workload Identification and Survey Procedures

IRM 4.1.5, Case Building, Classification, Storage and Delivery

Electronic Delivery SharePoint

CDE SharePoint

Exam Systems Knowledge Base - Home (sharepoint.com)

The table below highlights the benefits of CDE:

Data is available for the most current year and prior three years.

The following return types are available:

The CDE database contains tax return data from the return posted to Master File using TC 150. Subsequent amendments, duplicates, claims, etc. are not included in the database.

Tax return data refers to those lines that are transcribed at the campus during processing (located in the RTF), as well as certain information from the Master File such as POD, date of birth, audit history, and DIF score.

Data is available for the most current year and prior years per Document 12990, Records Control Schedules, which directs IRS functions on record retention and disposition. The LIHC tax forms are addressed in this document and each have their own computed compliance schedule of retention and disposition.

The following LIHC forms are input into the database:

The LIHC database contains tax form data transcribed by the LIHC data entry team.

On a yearly basis (from October 1st to December 31st of each calendar year) the HQ CDE Customer Service analyst will generate a user reconciliation report in Excel format. This yearly user listing reconciliation report will be:

This listing should be worked within 90 days of receipt. For retention information see IRM 4.103.1.3.1.3, Document Retention.

Workload creators begin the return identification process by identifying inventory either by criteria search, TIN list upload, or XML file. After the workload creator inputs and saves a new workload set, the classification coordinator takes over responsibility for the classification and review process.

It is recommended the role of workload creator be assigned to the positions commonly referred to as:

The workload creator duties within CDE include:

The classification coordinator manages the progress of workload sets, through CDE from the time the workload sets are created until moved to virtual inventory.

It is recommended the role of classification coordinator be assigned to the positions commonly referred to as:

The classification coordinator duties within CDE include:

The classifier classifies tax returns assigned within the CDE system. The classifier can be assigned to classify one or more CDE workload sets.

It is recommended the role of classifier be assigned to the positions commonly referred to as:

The classifier duties within CDE include:

The reviewer evaluates a sample of classified returns in each workload set and determines whether the classifier made an appropriate decision to select or accept the return.

The CDE ECC includes a section for reviewer feedback. This reviewer feedback section should include comments related to the return and issues only and not specific evaluative feedback to the classifier. Form 5126, Classification Quality Review Record is to be used for evaluative feedback to classifiers. Classifiers will receive an e-mail on any comments included in the reviewer feedback section. It is recommended that the reviewer maintains a spreadsheet of reviewed returns with the information which will be required to complete Form 5126. They will need to review 10 percent of each classifiers’ classified returns AND at least one return in each workload set.

It is recommended the role of reviewer be assigned to the positions commonly referred to as:

The reviewer duties within CDE include:

The delivery coordinator delivers the case files once the workload sets are moved to VI.

The delivery coordinator role can only be assigned to an area user or campus user. An area delivery coordinator can only deliver returns in their area. A campus delivery coordinator can only deliver case files from workload sets created by campus workload coordinators within their same BOD.

It is recommended the role of delivery coordinator be assigned to the positions commonly referred to as:

The delivery coordinator duties within CDE include:

The VIA manages the CDE virtual inventory. Case files selected for audit and moved to VI by the classification coordinator sit in a virtual shelf until ready for delivery. Case files that are not delivered by the delivery coordinator remain in VI until the VIA deletes (surveys) them.

The VIA role can only be assigned to an area user or campus user. An area VIA can only delete case files in workload sets created by workload creators in their area. A campus VIA can only delete case files in workload sets created by campus workload coordinators within their same BOD.

It is recommended the role of VIA be assigned to the positions commonly referred to as:

The VIA duties within CDE include:

A strategy creator creates a strategy set by entering the required information and uploading a TIN list. The TIN list is created in an external text file. TIN lists can be for CIPs, RPPs, training returns, employee audits, other strategic initiatives or to get supplemental case building information on previously built returns. AIMS controls are not requested for tax returns included in a strategy set. However, CDE can check for AIMS controls, if requested.

A strategy creator can create a non-filer set by entering required information and uploading a csv file. The non-filer set builds a case file for each TIN and specified tax years where no return is filed. AIMS controls are not requested for tax returns included in a non-filer set.

It is recommended the role of strategy creator be assigned to the positions commonly referred to as:

The strategy creator duties within CDE include:

The filter creator creates, executes, tests, analyzes, and modifies Filters in CDE.

It is recommended the role of filter creator be assigned to the positions commonly referred to as:

The filter creator duties within CDE include:

A user administrator manages the user profiles within CDE.

The user administrator role can only be assigned to the Technology Solutions staff.

The user administrator duties within CDE include:

The system administrator role can only be assigned to the Technology Solutions staff.

The system administrator adds additional classification coordinators to a workload set.

The system administrator can run all CDE reports at the national level.

The CDE group manager/proxy assigns electronic case files to examiners in their group.

It is recommended the role of CDE group manager/proxy be assigned to the positions commonly referred to as:

The CDE group manager/proxy duties pertaining to electronic case file delivery:

The CDE examiner downloads assigned electronic case files for upload to RGS.

It is recommended the role of CDE Examiner be assigned to the positions commonly referred to as:

The CDE examiner duties pertaining to electronic case file delivery include:

The LIHC user inputs data from LIHC Form 8610, Annual Low-Income Housing Credit Agencies Report, Form 8610(Schedule A), Carryover Allocation of Low-Income Housing Credit, Form 8609, Low-Income Housing Credit Allocation and Certification, Part 1 and Part 2, and Form 8823, Low-Income Housing Credit Agencies Report of Noncompliance or Building Disposition, into the CDE LIHC database.

It is recommended the role of the LIHC user be assigned to the positions commonly referred to as:

The LIHC user duties within CDE include:

The LIHC manager/analyst manages the LIHC data input process. This may include the input of data from the LIHC forms.

It is recommended the role of the LIHC manager/analyst be assigned to the positions commonly referred to as:

The LIHC manager/analyst duties within CDE include:

The inventory report lists the case files in CDE VI. An inventory report example can be found in the CDE portion of the Knowledge Management Site.

The classification coordinator, delivery coordinator, or VIA can create an Inventory report.

The inventory report can be used for the following:

The select rate report provides select rates for inventory in active workload sets, VI or both. Training returns can be either included or excluded from the report. A select rate report example can be found in the CDE portion of the Knowledge Management Site.

Only the classification coordinator can create a select rate report.

The select rate report can be used for the following:

The statute report provides the VIA with a listing of CDE cases with short statute dates. A statute report example can be found in the CDE portion of the Knowledge Management Site .

Only the VIA can create a statute report.

The statute report can be used for the following:

The strategy sets report provides a list of strategy sets that have been created in CDE. An area or campus report will only include strategy sets created for their specific area or campus location. A national user can create reports that include all strategy sets created in CDE. A strategy sets report example can be found in the CDE portion of the Knowledge Management Site under Job Aids in the column titled PSP customers.

Only the strategy creator can create a strategy sets report.

The strategy sets report can be used for the following:

A filter summary report provides an overview of returns in a filter result set. This report does not provide any taxpayer identifying information. It summarizes the filter return counts based on non-dollar fields showing the total and average dollar amount for each group. For example, a report analyzing total income may be summarized by activity code. The report will show one line for each activity code with the total income for each activity code, total number returns in each activity code and the average income per return. A filter summary report example can be found in the CDE portion of the Knowledge Management Site.

Only the filter creator can create a filter summary report.

A filter stratification report is used to analyze the data in a filter result set. It is the process of grouping tax returns in a filter result set into homogeneous groups or tiers, also known as stratums. This report does not provide any taxpayer identifying information. A filter stratification report example can be found in the CDE portion of the Knowledge Management Site.

Only the filter creator can create a stratification report.

A filter sample utility report generates a TIN list after a filter has been stratified. The user may choose to select either all returns or a statistical sample. The returns in each stratum of the TIN list are in numerical order by TIN. A filter sample utility report example can be found in the CDE portion of the Knowledge Management Site.

Only the filter creator can create a sample utility report.

CDE Tableau is a commercial-off-the-shelf (COTS) program linked to specific CDE and LIHC data exported by CDE. Approved users run analytical reports based on the CDE or LIHC data. Tableau produces weekly and monthly reports regarding inventory, has copies of four of the standard reports available in CDE, and allows users to create ad hoc reports through flexible query of the data. Request access through BEARS and select entitlement PROD ELEV CDE TEV (TABLEAU ENTERPRISE VISUALIZATION-CDE TEV).

Case building provides additional information related to a tax return for both filed and non-filed returns. The following information is available to order in CDE:

A population analysis is a summary of one or more significant filing characteristics of a population of returns. It is limited to the information contained in the CDE database.

CDE can analyze actual return filings of areas by the makeup of their populations. Understanding the characteristics of a filing population can improve the processes of allocating resources, developing outreach activities, and identifying filing trends.

National users can analyze a multi-area or national level.

Some analysis examples are:

CDE can identify returns containing specific issues. For example, all returns in a specific market segment with a net profit percentage of less than 5 percent.

CDE can statistically stratify a filter result set as well as generate a random sample of returns for testing. The filter result set can be used to create a workload set, a strategy set, a TC 424 request file or tickler file for campus use.

A CIP is required for all CDE identified projects. The exception is for any group of taxpayers that fall within an issue, strategy, or workstream specifically identified on a business operating unit's annual work plan for examination or compliance check - See IRM 4.17, Compliance Initiative Projects.

CDE is used for the online classification of returns. It contains the current processing year and 3 prior years data. It allows for a 3-year comparison of the taxpayer's return information (if it is available and ordered for classification). The multi-year comparison gives the classifier a better financial overview of the taxpayer, improving the selection process.

Through the CDE system, returns are identified and classified for various programs including, but not limited to the following:

When classifying individual returns, CDE can be used to view the K-1's received by that individual and also the related business returns of the K-1 payer, if ordered for classification.

When classifying business returns, CDE can be used to view the K-1's issued by the business, and the related shareholders’ or partners’ (payee) returns, if ordered for classification.

CDE is used to deliver returns electronically to a CDE group manager from the CDE virtual inventory. A user can:

Filters allow CDE filter creators to run queries against tax returns (individuals, business or trust) in the CDE database, then further refine the results of the queries by eliminating tax returns from the results with additional queries. A filter is a set of conditions against which all returns in the filing population are compared. CDE allows users to design filters to identify groups of returns containing particular issues or characteristics. For example, filtering may be used:

CDE has the following thresholds when filtering:

The following filters can be created in CDE:

A filter result set can then be used to create a:

After the filter results and reports have been analyzed, the user can create a workload set or strategy set from the filter result set. Campus users can also create a TC 424 request file or tickler file.

Filter results sets are maintained on the system for two weeks and are automatically deleted if not accessed within this time. If the filter result set is deleted, the filter can be re-executed to create a new filter result set.

Areas should submit a Return Needs Analysis, or equivalent, which must be approved prior to creating any DIF workload sets - See IRM 4.1.2.7, Guidelines for Ordering Returns, for more information.

A CDE research request is required for all filtering requests.

Research is defined as any filter activity on the CDE system. All filtering on CDE requires a signed CDE research request except:

Minor modifications may be made to the original research request without submitting a new request. This should be documented by notation or addendum to the request form. Minor modifications must not change the intent of the original request. Examples of minor modifications include:

An Exam Systems & Projects Data Request for CDE Data form is required for additional CDE data not available through normal channels.

The Exam System & Projects (ESP) Data Request can be completed and submitted on the Intake System. The link to this submission can be found on the CDE Knowledge Management Site home page on the right side under Other Related Resources.

Use the Intake System to submit a change request form and request changes to CDE.

The following codes are used in CDE:

All attempts to access IRS returns are recorded by CDE in its SPLUNK audit log file. Users should follow the procedures for Form 11377-E, Taxpayer Data Access, to document accesses that are erroneous or may not otherwise have sufficient documentation.

If, while conducting research on CDE, a return is noted that contains potential issues not necessarily relevant to the purpose of the research, but does have indications of significant noncompliance, then information reporting procedures contained in IRM 4.10.5.14, Form 5346, Examination Information Report, should be followed.

Employee returns and their spouses are included in the CDE database and are subject to the same research processes as other returns. Employee returns must be treated like all other returns identified during research on CDE. Filters should never be rerun for the purpose of eliminating employees from a TIN list.

When an employee's tax return is viewed, this fact will be noted on the CDE facsimile. See IRM 4.2.6.3, Examination of Employee Returns, for guidance on employee audits.

An indication whether the tax return is an IRS employee's tax return is included in the sample report.

On the Form 3210 the comments field is populated if the return belongs to an employee.

Complete Form 11377-E, Taxpayer Data Access, to document.

See IRM 4.2.6.2, Employee Tax Compliance, for additional procedures.

The same security should be provided for any document produced by CDE containing taxpayer identifying information as is given actual tax returns and all other confidential taxpayer information. This includes transmittal via Form 3210 for any documents containing taxpayer identifying information distributed outside of the PSP area support/campus exam operations.

All electronic CDE documents must be encrypted before being sent. All CDE electronically stored documents must be encrypted.

CDE documents containing taxpayer information such as TIN lists, should be properly disposed of by the recipient following IRS security procedures.

The same security should be provided for any document produced by CDE containing taxpayer identifying information as is given actual tax returns and all other confidential taxpayer information. This includes transmittal via Form 3210 for any documents containing taxpayer identifying information distributed outside of the PSP area support/campus exam operations.

All electronic CDE documents must be encrypted before being sent. All CDE electronically stored documents must be encrypted.

CDE documents containing taxpayer information such as TIN lists, should be properly disposed of by the recipient following IRS security procedures.

The following activity codes should be used for time spent on CDE activities:

See IRM Exhibit 4.9.1-1, Definitions of Miscellaneous Examination Activity Codes.

For CDE system operation questions/issues contact the CDE help desk via email at *SBSE Exam CDE Development Center.

CDE examples of reports can be found on the following website: CDE portion of the Knowledge Management Site under PSP Best Practices and Sample Reports.

Contact the CDE help desk at *SBSE Exam CDE Development Center for CDE training materials.

The PSP CDE SharePoint provides PSP users a single work space to coordinate schedules, organize documents, and participate in discussions within the organization and over the Intranet. Specific PSP user role handbooks can be found on the following SharePoint site: PSP CDE SharePoint.

The Electronic Delivery SharePoint provides job aids, training courses, and discussions relating to CDE electronic delivery. It is found on the following SharePoint site: Electronic Delivery SharePoint.

The CDE program contains a virtual tour for various roles. A virtual tour is an approach to learning CDE that uses a hands-on process without viewing or accessing live data. All the screens are pictures of actual screens. These screens have hot spots where you can click on the screen, usually an icon, to replicate the CDE program. The CDE virtual tours are accessed through the Help button in CDE.