part4-279

The National Engineering Program Manager provides management oversight
on all aspects of the Engineering Program, including budget and staffing.

The Engineering Program Manager ensures that the Program addresses:

Management of the Engineering Program includes:

The Engineering Program Manager oversees design and delivery of Engineering
Training. Training in the Engineering Program includes Continuing Professional
Education (CPE), Recruit Training, and Outservice Training.

The Engineering Program Manager provides oversight by:

The Engineering Program Manager communicates directly with Engineering
Territory Managers and Engineer Team Managers when necessary.

The Engineering Program Manager represents the Engineering Program to
the Director of Field Specialists by:

The Engineering Program Manager represents the Engineering Program to
external stakeholders such as appraisal and valuation societies, associations
of tax personnel, and other professional societies.

Territory Managers directly supervise Engineer Team Managers. The Territory
Managers perform Operational Reviews of Engineer Team Managers.

Territory Managers ensure that appropriate resources are assigned to
issues including resources in other Engineering Territories.

Territory Managers recommend policy changes and procedures to the Program
Manager.

Territory Managers, the Program Analyst, and the Program Manager work
as a team to insure that the Engineering Program functions efficiently and
effectively. This team considers and recommends changes in policy or procedure
to improve the overall effectiveness of the Engineering Program.

Territory Managers perform periodic workload reviews to provide current
staffing needs to the Program Manager.

Territory Managers oversee travel, supplies, training, Outside Expert
Program (IRM 4.46.3.9.11, Outside Experts), and other budgetary issues for
their respective territories.

Territory Managers work with Industry Territory Managers to resolve
differences as necessary.

Territory Managers participate in Engineering Program work groups and
Program initiatives.

Territory Managers serve as Acting Program Manager when necessary.

The Engineer Program Analyst supports the Program Manager and Territory
Managers to facilitate the implementation and completion of program objectives
and initiatives.

The Engineer Program Analyst works with analysts from other Field Specialist
Programs, with analysts in Field Specialist Headquarters, and with analysts
from the several industries.

The Engineer Team Manager is responsible for the overall management,
operations, and quality of the work product of the Engineering Program at
the examination team level. The Engineer Managers responsibilities include:

With respect to CIC (Coordinating Industry Case) examinations, the Engineer
Team Manager’s involvement includes:

The Engineer Team Manager will ensure that all Engineering employees
assigned to any CIC examination are familiar with the roles and responsibilities
of the various team members as specified in IRM 4.46.3, Planning the Examination.

IRM 4.46.3, Planning the Examination provides specific procedures for
preparation of the plan, development of issues, and issue resolution.

IRM 4.46.3, Planning the Examination addresses issues related to specific
involvement in CIC examinations. Some of the responsibilities of the Engineer
Team Manager include:

After receiving the case assignment, the Engineer will perform a Risk
Analysis with the referring agent/attorney or CIC Team (IRM 4.46.3). The Engineer
will conduct and document the Risk Analysis regardless of the type of examination
or source of referral. Unless specifically prohibited, examinations performed
through LMSB initiatives (such as cycle time initiatives) will require Risk
Analyses. The process will be revisited at a point when approximately 50 percent
of the planned hours have been charged to the case. During the review of the
examination at the 50 percent point, the potential benefits will be reassessed
as described below. After the reassessment, the scope of the examination of
the issue(s) may be expanded or reduced. The Engineer Team Manager will review
and approve the Risk Analysis.

A large, unusual, or questionable (LUQ) item will depend on the Engineers
perception of the return as a whole and the separate items that comprise the
return. Some factors to be considered when identifying these items are:

Regardless of the type or class of return, the Engineer should first
review the return in its entirety. This review should include the line items
and credits claimed. Balance sheets, elections, schedules, or any other documents
attached to the return are included in the review. The review also should
include any relevant items from other sources.

The Engineer should compare the potential benefits from examining a
return to the resources required to perform the examination. After the potential
benefits and resources are considered, the Engineer will rank the issues in
priority order. Generally, the Engineer will examine the issues with higher
audit potential before those with lower potential. The Engineer Team Manager
may request the Engineer to reprioritize based on other factors.

The Engineer should review all large, unusual, and questionable items.
However, the Engineer cannot examine every possible issue. For instance, it
is not proper for the Engineer to make a detailed analysis, unless the potential
adjustments will materially affect the tax liability or will be important
from a compliance viewpoint. The Engineer is expected to adequately explain
both examined items and the large, unusual, or questionable items that are
accepted without examination. The case file and workpapers will clearly indicate
the scope of every examination, the depth of the examination, and the reasons
for the decisions.

The Audit Plan should contain a description of the issue(s), reasons
for the examination of the issue(s), estimated completion date, and planned
hours to complete the examination. The Engineer Team Manager will approve
the Audit Plan prior to submission to the referring agent/attorney or CIC
Team.

The scope of the examination may be expanded or limited during the examination
based on the facts of the issue. For more information concerning Risk Analysis,
(See IRM 4.10.2.4.1, Risk Analysis).

The following should be considered during the initial contact/interview
with the taxpayer:

Written requests should be in the form of an Information Document Request
(IDR). The Engineer should know the requirements of the Team Coordinator or
referring agent for preparing and tracking IDRs. The Engineer will offer
to meet with the taxpayer or taxpayers representative to discuss the IDR
before it is formally presented to the taxpayer.

When requesting information, the Engineer should:

Quality factual development should be the foundation of the Engineers
work. The extent of factual development depends on the relative potential
of the issue. Factual development may include reviewing:

The Engineer may tour the taxpayer’s plant, laboratory, or other
facilities and hold meetings with:

The Engineer should conduct research, including the following sources:

Additional actions may include:

The Engineer should analyze the information gathered, based on established
methodologies and procedures, in a logical and scientific manner to provide
reliable determinations that are well-supported and documented.

Reevaluate the time utilization and the need to continue the examination
as issue potential is refined through the development of facts during the
examination.

Share findings with the taxpayer with the objective of early issue resolution.

The issue narrative will be developed according to the guidelines found
in IRM 4.46.6. Each proposed issue will be developed and presented to the
taxpayer on a Form 5701. Every Form 5701 must be reviewed and approved (or
signed) by the Engineer Team Manager before it is presented to the Team Coordinator,
Industry Team Manager, or revenue agent. A Table of Contents will be included
if it is appropriate or necessary in the judgment of the Engineer Team Manager.
If the Narrative has exhibits, a List of Exhibits will follow the Conclusion.

The content will follow this format:

The first section, Title, will frame the issue with a brief conclusion
of the results of the examination. The issue statement will identify the dollars,
the year(s) at issue, the code section and the specific issue being addressed.
The context of everything that follows in the narrative on this issue should
focus on this commentary. The Title should clearly and briefly state a question
followed by an answer. For example:
Is Taxpayer, Inc., entitled to deduct
$80X in 2001 and $75X in 2002 for depreciation under Section 168 (MACRS) of
the Internal Revenue Code? No. The correct amounts are $65X in 2001 and $60X
in 2002 because Taxpayer, Inc., incorrectly included costs attributable to
land and buildings as personal property.

The next section discusses the Facts of the issue. State the facts of
the case as those facts affect the outcome of the issue. In addition, a brief
description of the taxpayer’s business may help a reader understand
the context of the issue. The purpose of an examination is to correctly apply
the law to the facts. Do not discuss factual materials that are not relevant
to the issue. Following are examples of appropriate presentations of facts:

The discussion of Applicable Law will contain the Commissioner’s
position as established by Treasury Regulations, the Internal Revenue Code,
Revenue Rulings, and Revenue Procedures. Technical Advice, Field Service Advice,
Private Letter Rulings, and other similar publications may not be included
unless the document is specific to the taxpayer and the issue under examination.
Specific case citations may be used if the examiner uses the citations to
apply the Code or Regulations. Lengthy quotations of the Code, Regulations,
or cited cases are not relevant or helpful and will not be included in this
section.

The next section is titled “Taxpayer’s Position
”
. The purpose of this section is to explain why the taxpayer believes
their position with respect to the issue is correct. For example, in this
hypothetical lab described above, the taxpayer believes that 100 percent of
the cost of the walls of the building should be associated with the crane.
They cite Case 1, Case 2 and Case 3 to support their position. If the taxpayer
will not provide a clear explanation of their position, this section will
include a discussion of the steps taken to obtain the information from the
taxpayer.

The “Argument”
section answers the Taxpayer’s
Position. The Engineer’s position should be persuasive in nature and
tie together the facts and law without reiterating the law. There should be
enough information to tell a story. The narrative will be well organized.
The purpose is to explain the disagreement with the taxpayer and provide the
specific reasons for the proposed adjustment. One of the purposes of this
section is to provide the Engineer’s response to the Taxpayer’s
position. Comments should be objective and professional. A personal denigration
or attack on the taxpayer or the taxpayer’s expert will demonstrate
bias to the reader. If the reader perceives bias, the credibility of the arguments
is substantially reduced. If technical information is necessary, use a plain
English explanation of the item in the narrative. Use footnotes to describe
or define technical terms.

Conclusion – The Conclusion briefly summarizes the results of the examination
and the reasons for the proposed adjustment.

Write the issue narrative using prescribed standards for grammar, wording,
references, quotations, and other style elements. The style of writing will
be a business style. Compose the narrative in the first person. The approved
Engineering Program writing style manual will be the authority for the English
composition aspects of the narrative.

Report the results of appraisals of properties or valuations of interests
using professional appraisal or valuation report standards. If the appraiser
or valuator is certified, the report will comply with the requirements of
the certifying organization. Otherwise, the report will comply with the appropriate
valuation guidelines contained in IRM 4.48.3 through 4.48.6.

Expert reports may be prepared for non-valuation issues as necessary
or as requested.

Appeals or Counsel may request an Engineer to prepare an Expert Report
in preparation for litigation. As with any other written work product, the
Engineer Team Manager will review and approve the Expert Report prior to submission
to the requestor. This step is necessary to insure that the Expert Report
is technically accurate and is consistent with policy and procedures. This
report may be presented to the Court as an Expert Witness Report. Generally,
the Expert Report must present the facts. It must be free of subjectivity
and unfounded opinion. The Expert Report must not advocate any interpretation
of the facts as they may apply to the law or any application of the law. If
the Engineer is certified, the report should conform to the specifications
or requirements of the certifying organization. It is the responsibility of
the Engineer to provide the best service to the requesting client by ensuring
that the Expert Report complies with the Federal Rules of Evidence, Article
VII.