1.4.54 Offer in Compromise Managers - Centralized Offer in Compromise Program

1.4.54.1  (10-01-2005)
Responsibilities of an OIC Team Manager

  1. In accomplishing the mission of the Internal Revenue Service, OIC managers must provide oversight and direction in a number of areas. The oversight responsibilities include, but are not limited to:
    1. ensuring employee case actions are timely and in accordance with current law, policies, and procedures;
    2. ensuring employees maintain high standards of professionalism in all their contacts with the public, internal customers, and co-workers;
    3. ensuring employees observe taxpayer rights;
    4. ensuring employees are aware of the role of the Taxpayer Advocate Service and the Low Income Tax Clinics (refer to Publication 4134, Low Income Taxpayer Clinic List), and that they properly communicate the service that these two functions provide during their communication with taxpayers and representatives;
    5. ensuring employees are aware of ongoing changes to the laws, policies, and procedures that relate to their responsibilities;
    6. addressing systems issues that impact either internal or external customer needs;
    7. ensuring cases are assigned timely and that employee’s workload:
      • reflects employee experience and skills,
      • addresses Service-wide objectives,
      • protects public interest;
    8. helping COIC Examiners make the right next case decision;
    9. ensuring employees are accountable for the appropriateness of their actions;
    10. providing ongoing employee feedback that is candid, meaningful, and will establish a basis for determining an accurate assessment of performance and developmental needs;
    11. issuing the Critical Job Elements (CJE) timely and evaluating employees performance against their CJEs;
    12. creating and maintaining a work environment that will promote teamwork, positive working relationships, and increased employee satisfaction;
    13. ensuring employees have necessary equipment and supplies; and/or
    14. providing technical guidance to internal customers, and others, as necessary, relative to the COIC program.
  2. When a new team is established or a new manager is assigned to an existing team, a meeting with the employees must be held within the first 30 days. At this meeting the manager will communicate expectations about the following suggested topics:
    • team procedures,
    • case work,
    • use of time,
    • timeliness of case activity,
    • timeframes for case actions, and
    • case review schedule.
  3. When a new employee is assigned to an existing team, the team manager must meet with the new employee to discuss managerial expectations (see paragraph 2 above) and ensure appropriate Form 5081, Automated Information System (AIS) User Registration/Change Request, is completed and processed.

    Note:

    These meetings are considered 7114 meetings and the local National Treasury Employees Union (NTEU) chapter(s) must be notified of the meeting in accordance with Article 8, Union Rights, of the IRS/NTEU National Agreement, unless the manager is meeting one-on-one with the employee.

  4. Regular team meetings will be held as necessary to review items such as the following:
    • directives from the Operation Manager, Director, and Headquarters;
    • procedural memoranda;
    • IRM changes;
    • changes in condition of employment;
    • automation issues; and/or
    • certain mandated topics (i.e. UNAX, POSH, Computer Security) not available on other media.

    Note:

    Some of these meetings are considered 7114 meetings (e.g. changes in condition of employment and certain mandated topics) and the local National Treasury Employees Union (NTEU) chapter(s) must be notified of the meeting in accordance with Article 8, Union Rights, of the IRS/NTEU National Agreement.

1.4.54.2  (10-01-2005)
Time Reporting in the COIC Program

  1. Managers should utilize Form 3081, Employee Time Report, weekly to ensure accurate time reporting. Discrepancies should be addressed, as needed. Ensure direct and indirect time is reported using the appropriate time, function and program codes (OFP’s). Be alert for the reporting of what could be considered excessive administrative or miscellaneous direct time.
  2. OFP time code 810–66030 covers all actions related to the time spent by Process Examiners working on a newly receipted Form 656, Offer in Compromise. This includes all research in making a process determination, processing application fees and deposits, loading the offer to AOIC, case building for additional financial documentation, entering final dispositions and generating the appropriate correspondence based on the process determination.
  3. OFP time code 810–66020 covers all actions related to the time spent by Process Examiners reviewing the taxpayer’s response to our request for additional financial verification. Based on the response of the taxpayer, the offer is either forwarded for further processing or a final disposition recommendation for return.
  4. OFP time code 810–66021 covers all actions related to the time spent by Process Examiners monitoring the Toll Free customer service telephone line. Process Examiners take incoming calls from taxpayers or their representatives, and answer their questions with regard to the Offer in Compromise, or forward the caller to the appropriate office. In addition, Process Examiners respond to taxpayer inquiries received on Form 4442, Inquiry Referral.
  5. OFP time code 810–66035 covers all actions related to the time spent by Process Examiners correcting input problems that have generated on the IDRS transaction error listings.
  6. OFP time code 810–66010 covers all actions related to the time spent by Offer Examiners working on an assigned offer in compromise submitted on Form 656, Offer in Compromise,. This includes receiving and analyzing the form and all required documentation, determining Reasonable Collection Potential (RCP), making disposition recommendations and reviewing requests for Appeal consideration, etc.
  7. OFP time code 810–66011 covers all actions related to the time spent by Offer Examiners working the Screen for Obvious Full Pay process on an assigned offer in compromise submitted on Form 656, Offer in Compromise. This includes receiving and completing the Full Pay worksheet to determine RCP using only the taxpayer’s figures, making disposition recommendations and reviewing requests for Appeal consideration, etc.
  8. OFP time code 790–00000 covers time spent by clerical employees related to time spent in support of COIC including, but not limited to:
    1. maintaining filing systems,
    2. filing documents or cases,
    3. processing closed files,
    4. typing or inputting hardcopy or electronic information,
    5. processing and routing mail,
    6. conducting research, and
    7. processing remittances.

1.4.54.3  (10-01-2005)
Workload Management

  1. Managers are responsible for effectively managing the team’s workload. To accomplish this, managers should:
    1. ensure cases are assigned promptly.
    2. maintain appropriate inventory levels at appropriate grade levels and make adjustments as necessary.
    3. ensure case activity is progressing toward resolution by timely conducting the required case reviews, monitoring team controls, as well as having ongoing dialogue with each employee to adequately assess the individual progress of each case assignment.
    4. ensure suspense files are monitored for timely actions with no unwarranted inactivity gaps to ensure casework progression moves expeditiously. Alert management to situations where inventory backlogs may delay the timely assignment of or progression of cases.

1.4.54.3.1  (10-01-2005)
Field Transfers

  1. Managers are responsible for reviewing cases when they are submitted for transfer to the field to ensure cases meet transfer criteria. Case transfer should be based on criteria outlined in the IRM.

    Offers that are transferred to the Field operation contain financial statement documents submitted by taxpayers, as well as information obtained by COIC Process and Offer Examiners through internal case building. Team managers should ensure internal case building documents have been included prior to transfer. Generally, the following issues/processes, once identified in an OIC investigation, may warrant, on a case-by-case basis, transfer:

    • income tax returns liabilities that cover a diversified spectrum of individual and business taxpayers (e.g. Schedule C with multiple and/or consecutive years of non-compliance requiring more analysis and evaluation to ascertain issues such as commingling of assets, income, expenses, etc.)
    • estates, decedents, international, incarcerated and DATL/TFRP combo offers.
    • entity could consist of the following: trusts, municipalities, educational institutions, LLC’s, partnerships, corporations, all of which require more specialized knowledge on tax laws.
    • complexity of issues include, but are not limited to, valuation of on-going businesses; income determination when excessive accumulation of retained earnings is identified; closely held entities, specialized or very valuable assets.
    • presence of transferees, nominees, and/or alter egos requiring identification, research, and valuation in making final compromise decision.
    • presence of complex accounting practices, tax law, or investigative issues of more than usual difficulty or complexity.
    • OICs filed by individuals and business taxpayers (e.g. partnerships, corporations) involved in complex activities or transactions designed or structured to hide or conceal income, such as offshore activities, disguised withdrawals in the form of shareholder loans, or multiple related entities, requiring a thorough knowledge of the different fraud indicators, as well as working knowledge on a wide range of financial and investigative skills.
    • involvement of numerous creditors requiring a working knowledge of lien law in order to determine appropriate lien priority.
    • need for comprehensive reviews to determine that other required returns such as Form 1040, excise, or specialty returns, are filed, and need to conduct thorough analyses of these returns to identify omitted assets, and/or improper transfers.
    • presence of tools used to conceal and/or cloud taxpayer’s true financial condition requiring the development of appropriate referrals once the indicators of fraudulent activity have been verified.
    • comprehensive and complex financial statements requiring knowledge of accounting and business principles in order to determine the taxpayer’s actual income and expense and thereby determine true Reasonable Collection Potential (RCP).
    • need to gather, research, inspect, and validate data from a variety of sources through internal sources and personal contacts. The data may, in some instances, be unique to a particular trade or industry.
    • potential for media scrutiny due to type of taxpayer vis-a-vis final case disposition.

1.4.54.3.2  (10-01-2005)
Assigning Work

  1. Managers are responsible for ensuring that cases are assigned in a timely manner. Assignments are made on the Automated Offer in Compromise (AOIC) system.

1.4.54.3.3  (10-01-2005)
Maintaining Appropriate Inventory Levels

  1. Offer in Compromise is a high profile program, in which the timeliness of case processing and resolution are highly significant customer service issues. It is the manager’s responsibility to ensure all cases are assigned upon receipt, or as soon as reasonably possible.
  2. Target levels have not been determined for the inventories of cases assigned to Examiners. Managers need to ensure that Examiner inventories are maintained at levels that ensure timely contact and efficient casework, while maintaining high levels of quality and customer service in the work performed by these employees.

1.4.54.3.4  (10-01-2005)
COIC Suspense/Hold Files

  1. The AOIC 51XX inventory is the electronic suspense file for Process Examiner work. This inventory is used as a temporary control point for offers awaiting response to a request for additional financial verification including items considered critical verification.
  2. The AOIC 5200 inventory is the electronic suspense file for Federal Emergency Management Agency (FEMA) cases.
  3. The AOIC 5300 inventory is the electronic suspense file for Process Examiner work. This inventory is used as a temporary control point for offers awaiting response to a request for additional financial verification that did not include any critical verification. Offers in this inventory are reassigned directly to the Offer Examiner 6100 Assignment if there is no response to Process Examiner correspondence.
  4. The AOIC 5500 inventory is the electronic suspense file for offers that have been reassigned from the 51XX inventory once a response is received from the taxpayer. Cases are assigned to Process Examiners from the 5500 inventory based on the IRS received date of the original offer.
  5. The AOIC 5199 inventory is the electronic file for offers that have been returned via the No-Reply Program. This inventory includes those offers originally assigned to 51XX. Offers in this inventory are closed ” No-Reply” when no response is received to the request for critical verification and the follow-up date has expired.
  6. The AOIC 6000 inventory is the electronic suspense file for Offer Examiner work. This inventory file is used as a temporary control point for new case assignments. Cases are assigned from the 6000 inventory to Offer Examiners based on first-in-first out (FIFO) basis, unless exceptional circumstances warrant assignment of another priority assignment. These instances should be rare.
  7. COIC managers are responsible for assigning work and ensuring cases are routinely assigned for investigation without delay. Clerical staff ensures cases are distributed based on weekly work order requests submitted by Team Managers.

1.4.54.3.5  (10-01-2005)
Workload Management Using AOIC

  1. AOIC is the primary Management Information System for COIC team managers. Managers should be proficient with the AOIC system.
  2. In the COIC program, team managers use AOIC to assign and monitor inventory, as well as conduct reviews. All offer casework, as well as the management of inventory, is completed through AOIC.
  3. The AOIC application is the official system of records for COIC’s offer program.

    AOIC systemically:

    1. produces taxpayer letters/forms,
    2. provides inventory control,
    3. uploads/downloads transactions to/from IDRS,
    4. produces numerous management reports,
    5. records and tracks taxpayer payments (Application Fee, Deposits, payments on accepted offers, recoupments), and
    6. allows for automated monitoring of the taxpayer’s offer status.
  4. Use AOIC to:
    • assist employees in managing their inventories
    • identify cases or types of cases where it appears the Examiner needs assistance
    • determine age of inventory assigned to Examiners, Counsel, Appeals, and other inventories
    • examine historical inventory levels to support a request for additional staffing or grade structure change. (Operation Manager)
    • quickly identify inventory levels for any assignment number
    • conduct on-line case reviews
    • generate IDRS transaction error listings to correct input problems
    • generate Quality Review Listing
    • monitor aging on Rejected with Appeal Rights cases
    • monitor status of closed offers (MOIC)
    • manage address and signature information for correspondence
    • systemically update balances on tax modules
    • generate transcripts for Counsel and Public Inspection File
    • systemically download tax period information and automatically load that information to the MFT screen

1.4.54.3.6  (10-01-2005)
AOIC Reports

  1. Reports are accessed through the Main AOIC Menu. Selecting Maintenance, Accept Transfers, and Application Fee accesses other features.
  2. Typically, reports have to be (G)enerated (one of the various commands available) first, then they can be (V)iewed on-line or (P)rinted.
  3. Multiple reports/listing can be (G)enerated at the same time, then (V)iewed or (P)rinted when ready.
  4. It is possible to (G)enerate a report/listing, go to other AOIC screens or functions, then return to the Area Office Reports/Listings Menu to (V)iew or (P)rint the requested item. This works as long as the AOIC session remains active (i.e., a user does not log out, then log back in).
  5. The Area Office Reports/Listing Menu contains the following listings/reports:
    1. 4196 Summary Page - a two page summary version of the much longer Monthly 4196 Report. The report is labeled Monthly Offer in Compromise Activity. The report shows a brief inventory analysis for beginning inventory, receipts, dispositions (including dollar amounts), ending inventory, and age (open and disposed cases).
    2. Quality Review Listing - provides a list of the cases randomly selected for quality review. The size of the list is based on parameters provided by the Quality Review organization.
    3. Closed Offers - a listing by Name, IDRS and Offer TIN, AO Closed Date and Final Disposition, of offers closed for your area, for the time frame specified, by disposition specified, and sorted by name control or TIN.
    4. Total Liabilities - a report, broken out by range of liability, giving case count and percentage, for all processable offers received during a timeframe specified by the user. This can quickly provide the user a snapshot of dollar receipts, by range, into inventory.
    5. Undetermined Offers - a summary or detail report listing cases in “U” status. This report is useful in managing inventory in COIC.
    6. Area & Territory Listing - a list of the Area Offices and their Territory Offices by number. This report is useful in determining where an offer is assigned.
    7. Disposition Codes List - a complete listing of the disposition codes used in the Area Offices along with a complete listing of the various status codes used to control inventory in the Campuses.
    8. Fill-in Paragraph List - paragraph text, by letter, of the AOIC letters. This can be useful in determining text to use for specific situations, if the user is not familiar with the AOIC letters.
    9. Assignment List - a complete listing of an Area Office’s assignment number showing Assignment Number, Badge Number, Name, Phone Number, and Stop Number.
    10. Signature List - a complete listing (by Signature Number, Title, and Name) of everyone in an Area Office set up on AOIC to have their information automatically print on AOIC letters. Signature information can be added and deleted using the Maintenance function.
    11. Address List - a list of all of the IRS addresses used on AOIC correspondence by an area when transferring case work from one IRS location to another.
    12. Transaction Listing - an error register for transactions sent from AOIC to IDRS where there was a posting error. This report identifies transactions that need correcting so that they can properly post, and it must be worked routinely.
    13. OIC Inventory Listing - this list includes Offer Number, Assignment Number, Assignment Date, Name Control, Offer TIN, IRS Received Date, Processability Code, and Age Code. This report can be produced for an entire Area, Territory, Group, or Individual Employee depending on the selection criteria used for the Assignment Number when creating the report. It can be sorted by Assignment Date, Name Control, and IRS Received Date. This report can be used to quickly check inventory levels and potential overage/overage cases within a particular inventory assignment number.
    14. Monthly 4196 Report - this is the most comprehensive report produced for analysis of inventory receipt and disposition patterns. The report shows a similar inventory analysis as the 4196 Summary Page (beginning inventory, receipts, dispositions [including dollar amounts], ending inventory, and age of open and disposed cases), but greatly expands on the level of detail provided. The Monthly 4196 report additionally provides a breakout of various dollar ranges for the accepted, rejected, returned, and withdrawn closures. It also provides a detailed listing of the reasons for returns (both processable and non-processable). Age of inventory is similar to that found in the 4196 Summary Page, but includes a separate breakout for offers in Appeals.
    15. Inventory Management Report - this report provides an easy to read list, by assignment number, of the total offers assigned, how many are processable or not, and the number of potential or overaged cases in that inventory. This snapshot view of assigned inventory levels and overage is a useful tool for managers.
    16. OIC Follow-up Report - AOIC allows the user to input follow-ups which are used in assisting the case worker with inventory management. This report provides a quick and complete method for tracking the follow-ups so that timely actions can be taken. When used properly, the follow-ups and report can assist in decreasing casework lapses that lead to overage.
    17. OIC Case History Report - this report provides the entire case history for an offer. It can be useful in reviews, ensuring that AOIC has the required documentation when closing, comparing against the paper case file, etc. The report is very useful when looking at the entire case on AOIC is not required.
    18. Reject W/Appeal Rights Aged - this report tracks all cases closed as rejected with appeals rights and lists Offer Number, Age, Proposed Reject Date, Offer TIN, and Owner Code (AOIC assignment number). A useful tool in helping to ensure that cases are timely worked and resolved after initial rejection.
    19. Transfers Not Accepted - this report shows cases sent from another area that have not yet been accepted into inventory. The report lists Sent From AO Number, Offer Number, Offer TIN, Name Control, Transfer Date, and NW Sub Code. The NW Sub Code is used by the Service Centers. This report should be used to ensure that you are timely receiving and assigning work transferred into your function.
    20. Analysis Not Complete Listing - this report was developed for use in tandem with the Data Request function in AOIC. The report is for use when Data Request is used on initial loading of the offer and lists those cases where data have been received back from Masterfile/IDRS, but our analysis of that data has not been completed. This report is helpful in ensuring that cases ready for analysis are not overlooked.
    21. Data Download Listing - this report was designed for use with cases loaded using Data Requests. It provides a complete list of offers, by Offer Number and Name Control, of those cases where data was requested through Data Request and is now present on AOIC and ready for analysis. This report works in close conjunction with the Analysis Not Complete Listing.

1.4.54.3.7  (10-01-2005)
AOIC Maintenance Menu

  1. To access this menu, the user must be profiled on AOIC for Maintenance Access.
  2. The items found in this menu are typically those used to update entries used by AOIC in processing accounts, transfer addresses, for example.
  3. This menu is also accessed where accepted offers are closed and transferred to the Centralized Backend function.
  4. A list of its functions include:
    1. Assignment Info for all RO/TE’s
    2. Batch Run (Return Ltr) - this report is run on a weekly basis for offers assigned to the 51XX Inventory with expired follow-up dates. A cut off date is entered for a specified date in the prior week when it has been verified that all mail/correspondence has been associated as the date specified. The Batch Run function is used to systemically generate and print the Return Letters for all No-Reply cases.
    3. IRS Return Address for All Letters
    4. Open a Closed Offer (Reopen) - to change a non-processable determination to processable or to reopen a returned offer or an offer closed in error.
    5. Remove Offers from Database - accessed to remove offers from the AOIC database that were loaded in error.
    6. Signatures for All Letters
    7. Transfer To IRS Address
    8. Update Liab (Add/Update MFT Modules)
    9. Validate/Release Closed Offers (AO Only) - after carefully checking that AOIC is accurately documented with the offer terms and amount and all other required information is reflected, the Validate and Release Closed Offers Screen is used to approve closure of the accepted offer. The screen displays Release Code, Offer Number, Offer TIN, Name Control, AO Closed Date, and Owner Code (AOIC Assignment Number of person closing offer).

1.4.54.3.8  (10-01-2005)
AOIC Application Fee Menu

  1. There are several features on this menu, among them:
    1. Application Fee Report - this report lists the Offer Number, Fee Required, Waiver Criteria, Fee Account, Refund/Apply Code, Amount, and Reference Master Offer Number. It is used for monitoring, reviewing, and tracking Application Fee records and actions taken on specific offers as it relates to the Application Fee. This report is used in the COIC sites to assist in managing the Application Fee process.
    2. Application Fee Analysis Report - this report provides a means of tracking offer receipts during a specified period, then broken out by processable versus non-processable, undetermined, with application fee, without application fee, and the reason (doubt as to liability only, low income, master offer referenced, or master offer closed in error). This report also provides a breakout of the number of days we take to make our receipts either processable or non-processable. The COIC sites and Headquarters principally use this report.

1.4.54.3.9  (10-01-2005)
Semi-Annual Inventory Matches

  1. Centralized OIC (COIC) managers should perform an AOIC inventory match on a semi-annual basis.
    1. The 100 percent inventory match must include all of the team’s assigned offer cases, including those in suspense in the Offer Examiner’s assignment number, offer files assigned to Examination, offers assigned to Appeals over 270 days old, and site Revenue Officer’s assignment numbers.
  2. Documentation of the completion of the AOIC semi-annual match and the correction of all discrepancies must be submitted to the Department manager. Operation/Department will ensure that suspense files, i.e. 6045, 6945, 5100, are reconciled on a quarterly basis. Operation/Department will ensure that the AOIC record is closed when applicable.

1.4.54.3.10  (10-01-2005)
Quality and Inventory Controls

  1. The Service’s vision focuses on three high level goals — service to each taxpayer, service to all taxpayers, and productivity through a quality work environment. The IRS has developed a set of Balanced Measures in three major areas: Customer Satisfaction, Employee Satisfaction, and Business Results, with Business Results comprised of measures of quality and quantity. In reaching our goals, we consider our impact on customer and employee satisfaction while we strive to improve quality and achieve quantifiable results.
  2. Managers are responsible for the quality of all work assigned to the team and for all work which leaves the team. This is true regardless of the measures that are used; therefore, managers must devise a system which works for them. Managers should:
    1. solicit suggestions from Examiners to address ways that can improve the quality of their work.
    2. devise a plan to ensure a high level of quality in the team.
    3. use EQ results as a diagnostic tool to focus attention on specific quality issues.
    4. ensure that appropriate time is devoted to coaching and mentoring Examiners, as well as providing guidance that will assist the employee in resolving their most difficult assignments.
  3. An important area of workload management and quality control for COIC managers is the establishment of inventory controls. It is recommended that the Operation designate staff to retrieve and distribute controls for the offer teams. The following controls should be retrieved from the appropriate AOIC database on a monthly basis.
    • Cases assigned to COIC, but not received or not accepted (Source: AOIC Reports Menu, Accept Transfer Option).
    • Inventory Hold File Case Listing (Source: AOIC N, P, etc. Reports)

      OIC Operation Managers should use the ” corporate inventory” approach when addressing hold file situations in their respective groups, and consider reassignment of work from one team to another, or one examiner to another, whenever necessary.

    • Time Sensitive Work - offers submitted with application fees, deposits or expedites (offers received at the Centralized Site with an aged IRS received date).
    • Closed Accepted – Not Validated/Released by Team (Source: AOIC Main Screen – Not Validated Option)
    • Assessment Statute Expiration Date (ASED) Report (Source: ENTITY/ICS)
    • Collection Due Process (CDP) from Appeals
    • Appeal 30-Day Hold File
    • AOIC Error Report - This report requires weekly reconciliation to ensure all IDRS modules and respective notice/collection status codes match AOIC. It is suggested that designated Process Examiners perform this reconciliation.

1.4.54.4  (10-01-2005)
Case Reviews and Employee Performance Discussions

  1. At the discretion of local management, managers may be required to perform more or less of a particular type of review from the samples below.
  2. All case reviews and performance discussions should focus on providing the employee with proper guidance and case direction, while conveying the importance of timely and effective case actions and any performance related issue. They must also clearly emphasize the manager’s expectations concerning required case actions and completion timeframes.
  3. Work reviews are an integral part of the team manager’s responsibilities. At the beginning of an employee’s annual rating period, the manager will develop and implement a review plan. The review plan should provide for a fair and accurate assessment of the employee’s overall performance throughout the rating period. The system of review should seek to:
    1. assess the employee’s effectiveness in meeting the expectations established in the Critical Job Elements.
    2. assess the employee’s efficiency in carrying out the laws, procedures, and policies of the Service.
    3. identify and address performance problems.
    4. assess the employee’s ability to properly plan and schedule workload inventory activity.
    5. ensure the employee is taking timely and appropriate actions to bring the case to a prompt and proper resolution.
    6. assess employee effectiveness in developmental assignments.
    7. assess the employee’s effectiveness in meeting the IRS Retention Standard for the Fair and Equitable Treatment of Taxpayers.
    8. assess the employee’s performance in relation to customer satisfaction and the protection of taxpayer rights, whenever applicable in an investigation.
  4. Reviews can help a manager determine an employee’s needs for training and development. In turn, case reviews will help the manager ascertain how much time to devote to each employee, as well as design an individual review plan to assist the employee’s identified need(s). Managers may choose from the following review categories in designing an employee’s review plan:
    1. Technical case reviews
    2. Telephone monitoring
    3. Work Leader review
    4. Time Utilization review
    5. On-The-Job-Visit
    6. Bin review
    7. Clerical review
    8. Data Security review
    9. Form 3081, Employee Time Input, review

1.4.54.4.1  (10-01-2005)
Documentation

  1. It is required that COIC managers use the Embedded Quality Review System (EQRS) to conduct technical case reviews. The EQRS system is an on-line quality review database accessed through the IRS intranet via the URL address . Managers use EQRS and the EQRS Data Collection Instrument (DCI) to input case review/analysis results. Managers should become familiar with the options available on EQ.
    1. The attributes on the EQ system correspond with the performance standards of the Process and Offer Examiner’s critical job element performance aspects. Both in-process and closed case reviews will be documented in EQRS. Review results are generated on an EQ “Employee Individual Evaluative Feedback Report.”
    2. In general, deficiencies relating to a critical job element should be noted as an area of concern.
    3. There may be instances where a single deficiency is critical, i.e. taxpayer impact vs. non-impact errors.
    4. The program allows the manager to roll-up an employee’s performance in relation to his/her CJE’s based on statistical data over a period of time using the EQ “Employee Cumulative Evaluative Feedback Report ” .
  2. In addition to EQ reviews, other types of reviews such as ” bond” paper and inventory reviews are permissible, and encouraged, as long as they address case performance based on the employee’s CJE’s.
  3. Regardless of the format used, COIC managers should summarize observations they have derived from a case review. For cases reviewed using EQ, use the DCI Feedback Summary Section to record your remarks. When performing an EQ DCI,”bond” or inventory review, the summary should:
    • outline the performance in relation to the employee’s CJE’s, and address positive, as well as negative, aspects of an employee’s performance.
    • provide clear managerial guidance on those cases requiring actions, as well as establish expectations concerning the time and type of disposition required.
    • be concise in documenting serious performance deficiencies.
  4. All cases that are reviewed should reflect the action and the date when the review was performed. The manager should not enter any evaluative entries on the AOIC case history.
  5. Individual case reviews should include all applicable case data. The manager and the employee must sign the documents. Signature on the part of the employee will not necessarily mean agreement, but merely the acknowledgment of document receipt.
  6. Original documents of paper reviews should be issued to the employee within 15 days of the review event. Original documents of telephone monitoring reviews should be issued to the employee within three workdays of the review event. However, if the employee has provided incorrect information to a taxpayer, the manager will inform the employee as son as possible, but no later than eight work hours after the review event. The manager should retain the review in the Employee’s Performance File (EPF) for follow-up, and discuss all recommended actions entered on the review document with the employee to ensure that there is a complete understanding about how, what, when, and why to take specific actions.

1.4.54.4.2  (10-01-2005)
Mandatory Reviews

  1. OIC managers will conduct a Mid-Year and Annual Review on each of their employees. A managers observations and recordations will accurately assess the employees performance. The listed items below are the types of reviews needed to accurately evaluate an employee’s performance.
    1. Technical Case Reviews - The minimum number of EQ reviews is two per month, per employee, during the rating period. There should be a representative sample of closed and in-process case reviews. Bond paper reviews are in addition to the minimum of two EQ reviews for each employee each month.
    2. Process Examiner Telephone Monitoring Reviews - For telephone teams, EQ reviews should be split between paper and phones. Since the minimum number of reviews is two per Process Examiner per month, one should be a telephone review. More reviews should be conducted with employees who have exhibited problems in the area of communications with taxpayers and/or representatives. Managers responsible for phone teams must perform and document monthly mass monitoring sessions in conjunction with EQ reviews.
    3. On-The-Job Visit Review - Performed annually, this review allows the manager to observe the employee’s performance while performing their normal and routine duties and must be performed for each Examiner during the rating period. The review must address employee’s time utilization, inventory management abilities, inventory verification, quality of work completed, and a review of the employee’s suspense file organization.
    4. Time Utilization - Performed annually, this review evaluates the employee’s workload management, overall efficiency and technical competence.
    5. BIN Review - Performed annually, a Bin (segmented storage systems such as file cabinets, desk drawers) review evaluates the condition of employees’ physical files and overall file maintenance along with an inventory verification.
    6. Inventory Management Reviews- All employees with cases controlled and reflected in these listings need to be reviewed and documented. COIC managers should review these listings weekly by assignment date to ensure there are no unwarranted inactivity gaps in case actions. Using these reports, managers should hold discussions with the employee assigned to the case and evaluate the progress of cases listed on these reports. Managerial observations should be summarized on the margins of these reports, or on a ” bond” paper review. A monthly review must be performed and annotated. Lists with the employee’s and manager’s comments must be kept as documentation.
    7. Security Reviews - Managers must access the IORs system on a weekly, monthly and quarterly basis to perform required electronic security reviews for employees with access to the IDRS system. Managers will perform physical security reviews to evaluate an employee’s compliance with security rules and regulations, and to ensure compliance with the Clean Desk Policy.
    8. Clerical - Performed monthly, clerical reviews ensure accuracy and timeliness of the employee’s work.
    9. Form 3081, Time Reporting Review- Performed monthly as a non-evaluative review and evaluatively quarterly, these reviews ensure timely reporting of time codes and function code accuracy.
    10. Work Leader Review- Performed monthly, work leader reviews can include work distribution planning, inventory management and monitoring, completion of work assignments, the ability to identify training needs, the ability to perform accurate EQ reviews, and technical accuracy of reviews.
    11. Bond Paper Reviews - Bond paper reviews can consist of other tasks, activities and duties within the scope of the examiners CJE’s that cannot be captured on the EQ system. These may be Special Case processing of CDP offers, the work performed by the unit Bankruptcy coordinator, input from other teams/departments, taxpayer acknowledgements of customer service, special projects, case history documentation, workload inventory management, Inventory Report Listings reviews, IDRS Security reports, time input by the work leader and inventory assignment by the work leader.
  2. Emphasize cases that are generally reflective of the employee’s typical performance.
  3. Scheduling of the review may be announced or unannounced, at the option of local management.
  4. Follow-ups should be conducted on reviews, as appropriate.

1.4.54.4.3  (10-01-2005)
COIC Department Manager Annual Operational Review

  1. Operational Review - Department Managers should conduct a minimum of one annual Operational Review on each of their COIC teams. An Operational Review should assess how well the manager completes administrative duties, the effectiveness of their assigned programs, compliance with review schedules, mid-year and annual appraisals, time and attendance records, coordination with other areas within and outside the operation, and commitments on their performance plan.

    Department managers will verify team leaders are performing the required performance reviews for their employees in a timely manner. Department managers will also ensure individual team leader’s documentation of these reviews is sufficient to effectively evaluate employees’ performance. This should be accomplished as the department manager reviews performance appraisals, required monthly review schedules, and EQRS reports.

    Department managers will review EPFs and drop files prior to signing as the second level approver for performance appraisals in order to verify that all required reviews were completed and there is sufficient documentation to substantiate the ratings for each CJE performance aspect.

    Department managers should also use EQRS reports to determine if their team leaders are completing the required number of paper case reviews and telephone monitorings. EQRS roll-up reports should be printed for each team and reviewed on a quarterly basis. If the required reviews have not been completed, the department manager should annotate valid reasons for deviation from the monthly schedules on the printed reports. A copy of the annotated report should be provided to the Operation Manager within 15 days after the end of the quarter.

  2. Program Review - Each department will ensure that a review of each of their programs is conducted to ensure effectiveness of their assigned programs. These reviews should include methodology, findings, and recommendations. As part of a program review, Department Managers will utilize EQ reports to identify error trends and ensure consistency among teams.
  3. 3081 Review - For work plan and resource allocations, 3081s are reviewed weekly by Team Leaders for accuracy.
  4. In addition, Department Managers must control the three mandatory reviews listed above that are performed within their department. All reviews must be submitted to the department and reviewed by the Department Manager. A file must be maintained by the Department Manager with copies of program reviews performed.

1.4.54.4.4  (10-01-2005)
COIC Operation Manager Requirements

  1. Operation Managers are required to perform an Operational Review for each Department Manager within the operation. Operational reviews for each Department Manager must be performed annually, as outlined above. A yearly schedule of Operational Reviews must be submitted to the Directorship as required, and may be submitted to the Planning and Analysis staff according to local procedure. A copy of the operational reviews performed by the Operation Manager must be sent to the Planning and Analysis staff, upon completion.

1.4.54.5  (10-01-2005)
Case Documentation, Protecting Taxpayer Rights, and Use of Statistical Data

  1. This section discusses the proper guidelines employees should follow when documenting case files, and the importance of observing the rights of the taxpayer at all times. It also covers the appropriate use of statistical data, by managers, when conducting a review.

1.4.54.5.1  (10-01-2005)
Case Documentation

  1. Specific guidance for case documentation is provided in various sections of the IRM Part 5.8. COIC managers should ensure that employees adhere to the guidance.
  2. The need for accurate, complete, and high-quality case documentation is extremely important in the COIC program. Incomplete documentation will negatively affect subsequent case actions, the ability to review and evaluate case activity, actions by other employees, and quality results.

1.4.54.5.2  (10-01-2005)
Protecting Taxpayer Rights

  1. A primary responsibility of COIC managers is to monitor employee practices and actions to ensure that taxpayer rights are always observed during the offer investigation. Case reviews, as well as managerial observations are vehicles to assess the employee’s performance in this area.
  2. Taxpayer rights include, but are not limited to, the following:
    1. Right to privacy
    2. Right to due process
    3. Fair and courteous treatment
    4. Protection from unauthorized disclosure
    5. Rights to submit a timely appeal on a rejection recommendation
    6. Right to managerial conference
  3. Section 1203 of the Internal Revenue Service Restructuring and Reform Act of 1998 (RRA ‘98) calls for the termination of any employee of the Internal Revenue Service if there is a final administrative or judicial determination that the employee willfully committed any act of omission described below:
    1. Providing a sworn false statement in a “material matter ” concerning a taxpayer.
    2. Violating the constitutional rights of, or discriminating against, taxpayers or employees.
    3. Falsifying or destroying documents to cover a mistake concerning a taxpayer.
    4. Receiving a criminal conviction or civil judgement for assault or battery on a taxpayer or employee.
    5. Violating the Internal Revenue Code, IRS regulations or policies to retaliate against or harass taxpayers or employees.
    6. Misusing Internal Revenue Code section 6103 to conceal information from Congressional inquiry.
    7. Failing to file a federal tax return on or before its due date, unless it is due to reasonable cause.
    8. Understating federal tax liability, unless it is due to reasonable cause.
    9. Threatening an audit for personal gain.

1.4.54.5.3  (10-01-2005)
Use of Statistical Data

  1. IRM 1.5.2, Managing Statistics in a Balanced Measurement System, provides guidance to prevent managers from using statistics to:
    1. evaluate employees, or
    2. impose or suggest production quotas or goals with respect to such employees.
  2. Managers are prohibited from using Records Of Tax Enforcement Results (ROTERs) to evaluate any employee who exercises appropriate judgment with regard to determining tax liability or ability to pay. ROTERs are defined as a figure resulting from the recordation, accumulation, tabulation, or mathematical analysis that is directly related to producing a tax enforcement result. This prohibition includes:
    • self-assessments,
    • awards narratives,
    • case/workload reviews,
    • performance plans, or
    • narrative feedback to evaluations.
  3. Managers are also prohibited from using ROTERs to impose or suggest production goals or quotas for employees or groups of employees. Example of prohibited ROTERs for COIC collection employees include:
    • Number of OICs recommended for acceptance or rejected
    • Dollars compromised
    • Number of closed OICs
  4. For more specific information see IRM 1.5.1, The IRS Balanced Measurement System: A New Approach to Measuring Organizational Performance, and IRM 1.5.7, Section 1204/Regulation 801 Guidance for Small Business/Self-Employed (SB/SE).

1.4.54.6  (10-01-2005)
Other Responsibilities

  1. This section discusses some additional responsibilities required by employees and managers in the COIC program.

1.4.54.6.1  (10-01-2005)
Area Drop Point for OIC Transfers

  1. It is imperative that cases being sent to the field be routed to the correct Area Drop Points. Managers should ensure employees use the most recent Drop Point listings to transfer cases to the field.
  2. The COIC employee’s responsibilities will consist of the following:
    1. Review all Area transfer forms to ensure transfer is appropriate.
    2. If electronic transfer on AOIC is incorrect, accept transfers back on the AOIC system and re-transfer to the correct area.
    3. Interact with Field OIC site personnel to check on the status of transfers, as needed.

1.4.54.6.2  (10-01-2005)
Reconcile and Monitor Team Controls

  1. Designated personnel are assigned to monitor and reconcile various inventory, group and specialized offer issues as listed below.
    1. Cases assigned to Area, but not received or not accepted - AOIC Reports Menu, Accept Transfer Option
    2. Closed Accepted - Not Validated/Released by group (AOIC Main Screen - Not Validated Option)
    3. CDPs
    4. Appeal 30-Day Rejection Hold File
    5. AOIC - IDRS Weekly Error Report

1.4.54.6.3  (10-01-2005)
Closing and Review Actions

  1. COIC Managers are responsible for all cases in their team’s control. The following list, although not all-inclusive, are tasks to perform to ensure a quality product prior to taking closing actions. Tasks may be assigned to specific managers at local discretion.
    1. COIC managers should review all acceptance, rejection, return, and withdrawal case files to ensure all letters/forms have appropriate signatures, and inputs appropriate disposition codes on AOIC, as appropriate for Examiners.
    2. For all dispositions except acceptances, review Form 656, Offer in Compromise, to determine whether all periods have been listed; if not, remove all periods that are not listed from the AOIC MFT screen so that CSED is not unlawfully extended.
    3. Processes requests for NFTL.
    4. On rejection recommendations, analyze case files prior to assigning to IAR inventory.
    5. Mail Rejection Letters to taxpayer/practitioner and monitor Rejection 30-Day Appeals files.
    6. Reviews taxpayer/practitioner’s written request for appeal.
    7. Upon request, forwards case to Appeals for review, reassign case to Appeals, systemically, on AOIC.
    8. Input appropriate disposition code on AOIC. If no taxpayer protest is received, review Form 656, Offer in Compromise, to determine if all periods were listed, if not, periods not listed are removed from the AOIC MFT Screen so that CSED is not unlawfully extended.
    9. Clerical staff closes the offer on AOIC as “TP did not exercise appeal rights.”
    10. Upon receipt of case from Appeals, Offer managers review case file to ensure all necessary documentation, closing reports and correspondence is contained in the case file.
    11. Examination Division is responsible for contacting the manager periodically to secure status report on combination DATL offers.
    12. Ensure all necessary closing AOIC letters and forms to taxpayer/tax practitioner.
    13. Handle all taxpayer/practitioner inquiries that might be generated as a result of this correspondence, or if a request to speak to a manager is requested.
    14. Monitors AOIC CQMS/EQ Sample Reports on a weekly basis.
    15. Prepare closed case files per established guidelines and transmit selected offer cases for CQMS review or retention files.
    16. Based on established procedures, initiate AOIC Closed Case Validation Process. This might be delegated to one manager to perform for the Operation.
    17. Determine, based on taxpayer designation (e.g., W&I or SB/SE), the appropriate Back-End Service Campus that will monitor offer acceptance terms and mails necessary documents based on established procedures.
    18. Close accounts on AOIC.
    19. Receive and resolve all taxpayer/practitioner inquiries regarding the status of offer deposits that have not been refunded through the Coordinator.
    20. According to procedure, ship closed cases to Federal Records Center.

1.4.54.6.4  (10-01-2005)
Post-closure Case Action Activities

  1. The following actions should be taken once the case has been closed.
    1. Receive and resolve all taxpayer/practitioner telephone inquiries involving offer-related calls by checking applicable systems (e.g. IDRS, AOIC, etc.,) and/or redirecting the call to the appropriate Service personnel.
    2. Analyze accounts on AOIC and IDRS systems to resolve issues involving misapplied or un-refunded payments/deposits.
    3. Communicate directly with Monitoring Offer in Compromise (MOIC) campuses to resolve problems involving misapplied payments; late payments; changes in taxpayer financial conditions, etc.

1.4.54.7  (10-01-2005)
Clerks in the COIC Program

  1. A group clerk plays a key role in a COIC group. As a support clerical employee, he/she assists the manager in all administrative assignments, and also handles the numerous clerical processes that are involved in managing an offer team operation. Listed below are the clerical tasks that consist, but are not limited to the following:
    1. File all documents, manuals, etc., per established policies.
    2. Input cases on AOIC as assigned.
    3. Assign casework to employees upon managerial request.
    4. Reassign offers from Hold File to employee, upon managerial request.
    5. Control Form 3210, Document Transmittal , on all incoming work.
    6. Forward rejection offer case files to IAR and change assignment on AOIC to IAR.
    7. Make appropriate copies of casework for CQMS review.
    8. Mail taxpayer correspondence, and provide assistance in the handling of extensive mail distribution; duplication of necessary documents, etc.
    9. Retrieve reports upon management request.
    10. Retrieve Inventory Reports from AOIC on weekly basis.
    11. Match AOIC Inventory for each Offer Examiner on a weekly basis.
    12. Route all correspondence corrections.
    13. Provide secretarial phone coverage upon request.

1.4.54.8  (10-01-2005)
Shipment of Closed Cases to Federal Records Center (FRC)

  1. Campus procedures require that closed cases be retained at the local area office for two years, plus the current year.
  2. The IRM 1.15.28, item 50, and IRM 1.5.29, allows local offices to retain closed files until “there is no longer a business need” to retain them at the local level.
  3. Bases on the “business need” provision, and as a general rule, closed COIC files (other than acceptances) are to be retained in a local office for a period of no less than six months, or for a longer period, should there be a business need.
  4. The following procedures should be followed when mailing closed cases to the FRC:
    1. On Form 3210, record cases shipped, including taxpayer’s Name Control and TIN. Clearly note a “From” and a “to date” . Cross-reference this information on the FRC box.
    2. The taxpayer’s name and TIN must be on the FRONT TAB of each offer file. Complete SF-135 and include the ORG Code, Fiscal Year, Volume, Box Numbers, Series Description, Disposal Authority, and Disposal Date. Fax this information to Facilities Management to receive an accession number from FRC prior to shipping to FRC. When the accession number is received from FRC, it is written on each white box and SF-135.
    3. Retain a binder containing a listing of SF-135s and copies of From 321 for each shipment.
    4. Documents are place in a standard white 14 3/4 x 12 x 9 1/2 box - Catalog # 322538.
    5. Each box should be packaged to avoid the contents shifting or moving. ALLOW ABOUT ONE INCH TOP SPACE IN EACH BOX.
    6. Attach Form SF-135 in BOX 1 only.
    7. Note the front of the box with the accession number. Ensure that the Box #, along with the ORG Code and Fiscal Year is written on the front of the box.
    8. The white box must be taped down the middle and across the box to resemble the letter H. Tape used is 1.88 inches by 50 yards (tear-by-hand).
    9. UPS Ground is used for shipment.
    10. If retrieval of a case is needed from FRC, a Form 2275, Records Request, Charge and Recharge, sheet must be completed.

      Note:

      Contents that these files contain are easily retrievable by FRC, should the need arise for an individual case file.

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