1.5.3 Certification and Independent Review Processes

1.5.3.1 (04-01-2007)
Overview

  1. This section provides guidance and instructions for the Restructuring and Reform Act of 1998 (RRA 98) Section 1204 certification and independent review processes. It identifies Section 1204 program responsibilities for the Chief Financial Officer (CFO) and other IRS Section 1204 Operational/Functional Divisions. In addition to specific implementation guidelines, this section provides Section 1204 reporting requirements.

1.5.3.2 (04-01-2007)
Section 1204 of the Restructuring and Reform Act of 1998

  1. The quarterly certification process is a formal process required by statute to ensure managerial accountability for compliance with Section 1204. The process specifically addresses the following:
    1. Section 1204(a) in General — The IRS shall not use records of tax enforcement results (1) to evaluate employees, or (2) to impose or suggest production quotas or goals with respect to such employees.
    2. Section 1204(b) Taxpayer Service — The IRS shall use fair and equitable treatment of taxpayers as one of the standards for evaluating employee performance.
    3. Section 1204(c) Certification — Each appropriate supervisor shall certify quarterly by letter to the Commissioner of the Internal Revenue whether or not tax enforcement results are being used in a manner prohibited by subsection (a).

1.5.3.3 (04-01-2007)
Section 1204 Program Responsibilities

  1. The CFO provides overall program direction with support of IRS Section 1204 Operational/Functional Divisions.
  2. IRS organizations are responsible for Section 1204 program implementation in their respective areas. Organizations will :
    1. Advise all executives and managers of Section 1204 requirements.
    2. Provide Section 1204 executives and managers with technical guidance and direction.
    3. Update the IRM 1.5 section for the organization.
    4. Develop and present Section 1204 organizational training.
    5. Coordinate certification activity.
    6. Support the annual Servicewide independent review process.

1.5.3.4 (06-01-2007)
Key Terms

  1. Appropriate Supervisor is the highest-ranking Section 1204 executive in an operational/functional division that supervises directly or indirectly one or more Section 1204 employees. In addition, the highest ranking organizational executive can identify as Appropriate Supervisor other organizational leaders needed to ensure successful implementation of Section 1204.
  2. Operational/functional divisions include the Commissioner, Deputy Commissioners, National Taxpayer Advocate, Functional Chiefs, and Division Commissioners.
  3. Records of Tax Enforcement Results (ROTERs) are data, statistics, and compilations of information or other numerical or quantitative recordations of the tax enforcement results reached in one or more cases. See also IRM 1.5.2.7 for examples of ROTERs.
  4. Section 1204 employee/activity is an employee who exercises judgment in recommending or determining whether or how the IRS should pursue enforcement of tax laws, or who provides direction/guidance for Section 1204 program activities (including IRM guidance). Section 1204 activity is determined by the tasks performed by an employee, not by the title or operational/functional division of the employee.
  5. Section 1204 manager is a manager at any level who supervises one or more Section 1204 employees.
  6. Section 1204 organizational unit is an organizational unit that includes at least one employee who conducts Section 1204 activities.

1.5.3.5 (04-01-2007)
Section 1204 Program Manager and Coordinator Roles and Responsibilities

  1. Each organizational leader will identify a Section 1204 Program Manager for their organization. In addition, each Section 1204 Appropriate Supervisor will identify a Section 1204 Coordinator for their organizational area.
  2. Operational/Functional Divisions will inform the CFO when there is a change in Section 1204 Program Manager.
  3. Operational/Functional Divisions Section 1204 Program Managers serve as liaisons to the CFO and manage their organization’s Section 1204 program. Section 1204 Program Managers will:
    1. Serve as primary contact from the Operational/Functional Division to the CFO staff on Section 1204 issues.
    2. Provide Section 1204 guidance and direction to their immediate offices and to their Section 1204 Coordinators.
    3. Support their organizations with Section 1204 updates (e.g., oversight reviews), organizational IRM 1.5 section revisions, training updates, certification and waiver activity, and the annual Servicewide independent review process.
    4. Guide Section 1204 Coordinators in researching technical questions and resolving organizational Section 1204 issues.
    5. Support the annual Servicewide independent review process.
    6. Direct questions with Servicewide impact or legal implications to the Organizational Performance Division for guidance.
    7. Maintain a list of Section 1204 coordinators.
  4. Operational/Functional Divisions Section 1204 Coordinators serve as liaisons to their organization’s Section 1204 Program Manager and provide guidance and direction to their immediate offices. Section 1204 Coordinators will:
    1. Support Section 1204 managers at all levels with quarterly certification activity and the annual Servicewide independent review process.
    2. Provide Section 1204 managers with appropriate guidance and direction.
    3. Schedule Section 1204 training and briefings as appropriate.
    4. Support the annual Servicewide independent review process.
    5. Validate status of Section 1204 and non-Section 1204 managers.
  5. Both Section 1204 Program Managers and Coordinators will support Section 1204 Appropriate Supervisors with program activity. They will:
    1. Support quarterly certification activity and prepare the standardized summary reports provided in IRM 1.5.3.
    2. Monitor the quarterly certification process to ensure that managers complete requirements as scheduled.
    3. Maintain the spreadsheet list of all managers and executives in the specified format.
    4. Maintain Section 1204 files as IRM 1.5.3 directs.
    5. Advise Section 1204 managers of due dates that Section 1204 Appropriate Supervisors establish.

1.5.3.6 (04-01-2007)
Retention Standard Requirement

  1. The Retention Standard was developed in response to Section 1204(b). The Standard states: “Administer the tax laws fairly and equitably, protect all taxpayers’ rights, and treat each taxpayer ethically with honesty, integrity, and respect.”
    1. A Memorandum of Understanding between IRS and NTEU established a set of ratings to measure employee’s performance against the Standard. The ratings—Met, Not Met, Not Applicable—are based on the employee’s position and performance.
    2. Employees complete a Retention Standard Document to acknowledge receipt of the Standard.
    3. The Retention Standard has been incorporated into the forms used for annual employee performance plans. Managers indicate on the document whether the Standard is Met, Not Met, or Not Applicable.
  2. Behaviors that meet the Standard:
    1. Responds to customers in a timely manner.
    2. Discusses specific customer cases with other employees on a need-to-know basis only.
    3. Responds verbally or in writing with appropriate tone, courtesy and respect, and states facts accurately.
    4. Advises customers of full personal impact, such as interest and penalty accumulation, when the customer advises they cannot pay their liability in full.
  3. Behaviors that fail to meet the Standard:
    1. Fails to respond in a timely manner to customers.
    2. Discusses specific customer information with others who do not have an official “need to know.”
    3. Responds verbally or in writing with a tone or wording which is discriminatory, discourteous, disrespectful, intimidating, and/or which misstates the facts.

    Note:

    Infrequent lapses that are inadvertent or unavoidable acts should not result in a “Not Met” rating. In this case, an employee is coached on how to prevent a future occurrence of unacceptable customer treatment and the importance of adhering to the retention standard information.

1.5.3.7 (06-01-2007)
Certification Requirements

  1. Section 1204(c) requires that Appropriate Supervisors certify on a quarterly basis that they have not used Records of Tax Enforcement Results (ROTERs) in a manner prohibited by Section 1204(a). Section 1204(a) prohibits the use of ROTERs to evaluate employees or to impose or suggest production quotas for those employees. See IRM 1.5.2.7. Section 1204(b) requires the Service to use fair and equitable treatment of taxpayers by employees as a standard for evaluating employee performance. Management will assess compliance with Section 1204 requirements in the quarterly certification reviews and the annual independent review. See IRM 1.5.2.6 and 1.5.2.7 for definitions of Tax Enforcement Result (TER) and Records of Tax Enforcement Results (ROTERs).
  2. All IRS Operational/Functional Divisions must determine if Section 1204 activities are performed in areas of their organization, or if they provide guidance or direction for Section 1204 activities. Organizations involved in Section 1204 activities or in providing guidance/direction for these activities will follow the required quarterly Section 1204 certification process and identify Section 1204 Appropriate Supervisors. Organizations not involved with Section 1204 activities will maintain an awareness of Section 1204 requirements, and compliance with Section 1204(b).
  3. During the first quarter of each fiscal year and as appropriate, each head of an Operational/Functional Division will re-evaluate the status of their organization regarding Section 1204 to:
    • Identify the subordinate organizations where Section 1204 activity does and does not take place
    • Provide a list of such subordinate organizations to the CFO
    • Prepare a list of all subordinate managers indicating their status as either a Section 1204 manager or a non-Section 1204 manager
    • Provide an updated list to the CFO quarterly (the CFO will provide a template for this list)
  4. Beginning with first-line Section 1204 managers, all levels of management (including appropriate supervisors) must conduct a quarterly review to determine whether they used ROTERs to evaluate employees or to impose or suggest production quotas or goals, and whether they evaluated all employees using the fair and equitable treatment of taxpayers as a performance standard. Section 1204 managers will then complete the self-certification to summarize their findings. See IRM 1.5.3.8 for information on the certification process.
  5. Next-Level managers and Appropriate Supervisors (those subordinate to the heads of operational/functional divisions) will self-certify quarterly for their immediate office (including review of employee performance folders of direct reports), will summarize their findings and those from the organizational units below them, and certify to the Commissioner.
  6. Heads of operational/functional divisions will self-certify quarterly for their immediate office (including review of employee performance folders of direct reports), will summarize their findings and those from the organizational units below them, and certify to the Commissioner. For example, the LMSB Commissioner will self-certify for his immediate office, while the LMSB Headquarters Directors and other subordinate Appropriate Supervisors will self-certify for each of their offices individually.

1.5.3.8 (04-01-2007)
Quarterly Certification Reviews

  1. All Section 1204 managers, including Appropriate Supervisors, will review all of their management activities for the entire quarter and complete a certification for the quarter. The certification will identify whether managers used ROTERs in a manner prohibited by Section 1204(a), whether managers evaluated employees using the fair and equitable treatment of taxpayers as a performance standard, and whether managers briefed employees as to how to meet that standard (e.g., completed Form 6774 or Form 12450 series).
  2. Quarterly reviews will cover 100 percent of a Section 1204 manager’s verbal and written communications. This includes employee evaluations as defined in Regulation §801.3T, other documented input (e.g., workload reviews, individual case reviews), and all other activity, such as verbal communications (e.g., meetings, employee discussions) and written documents (e.g., program guidance, business/program reviews, meeting minutes). Evaluations for all Section 1204 employees who reported to the manager on the last day of the quarter will be included in the review.
  3. The following items should be included in the manager’s self-certification review:
    • Employee Performance Folders
    • Employee Evaluations
    • Operational Reviews/Business Reviews
    • Read/Correspondence Files
    • Drop Files
    • Grievances and Hearing Narratives
    • Comments/Reports offered by NTEU
    • Visitation Reports
    • Group Discussions
    • Meeting Minutes (Group/Branch/Territory/Area/Division/Director/etc.)
    • Local Guidance Memorandums
    • Other Items (e.g., filed copies of e-mail, voice mail messages)
  4. Employee Performance Folders, Employee Evaluations, and other documented reviews include the following:
    • Performance Agreements
    • Retention Standard – Fair and Equitable Treatment of Taxpayers Employees must receive or acknowledge the retention standard.
    • Performance Appraisals — Managers must check retention standard rating and managers/employees must sign appraisal.
    • Self-Assessments
    • Recognition/Award Recommendations
    • Mid-Year Reviews/Assessments
    • Narrative Feedback to Evaluations
    • 4502 Reviews
    • Workload Reviews
    • Individual Case Reviews
    • Operational Reviews/Business Reviews (Managers’ EPFs)
    • Assessments for promotion/reassignment, incentives/allowances/bonuses, release/recall, and reductions in force

    Note:

    For the definition of employee evaluation, see Regulation §801.3T. Exhibit 1.5.2-1.

  5. Relating to the Retention Standard – Fair and Equitable Treatment of Taxpayers, managers will review the Employee Performance Folder (EPF) to verify that:
    • Employees received or acknowledged the retention standard
    • Managers (e.g., rater, rating official) checked the retention standard rating
    • Employees and managers (e.g., rater, rating official, approval official) signed the performance appraisal

    Managers should review the following forms as appropriate:

    Employee Receipt or Acknowledgement:
    Form 6774, Performance Plan Receipt Employee’s initials and supervisor’s signature on original form filed in the EPF indicates employee receipt of Form 6774.
    Form 12450, Executive Performance Agreement Signatures of employee, rating official, and reviewing official in Part 1: Critical Performance Expectations indicates employee acknowledgement.
    Form 12450–A, Manager Performance Agreement Signatures of employee, rating official, and reviewing official in Part 1: Critical Performance Expectations indicates employee acknowledgement.
    Form 12450–B, Management Official Performance Agreement Signatures of employee, rating official, and reviewing official in Part 1: Critical Performance Expectations indicates employee acknowledgement.
    Performance Appraisal Checked and Signed:
    Form 6850, Performance Appraisal and Retention Standard Rating The rater checks the retention standard rating (not applicable, met, not met), and the rater, reviewing official, and employee sign the appraisal.
    Form 12450, Executive Performance Agreement The rating official checks Part III Retention Standard Rating (not applicable, met, not met), and the rating official, reviewing official, and employee sign the agreement.
    Form 12450–A, Manager Performance Agreement The rating official checks Part III Retention Standard Rating (not applicable, met, not met), and the rating official, approving official, and employee sign the agreement.
    Form 12450–B, Management Official Performance Agreement The rating official checks Part III Retention Standard Rating (not applicable, met, not met), and the rating official, approving official, and employee sign the agreement.
  6. Managers will correct situations of non-compliance with the Retention Standard – Fair and Equitable Treatment of Taxpayers as appropriate.
  7. During the quarterly self-certification review, managers will review documents that are signed and finalized within the quarter of the review.

    Note:

    ALL documents within an EPF for new employees must be reviewed. Past reviews have shown that EPFs of new employees were found to be a significant source of 1204(a) violations.

    Note:

    New managers and managers moving to a new group should review EPFs for ALL employees.

1.5.3.8.1 (06-01-2007)
Identifying and Addressing ROTER Violations

  1. If, during the quarterly certification review process managers identify a ROTER violation(s), they will report the violation(s) and completed corrective action(s) in the RRA 98 Section 1204 Manager’s Quarterly Certification. ROTER violations include any verbal or written use of a ROTER to evaluate an employee or to impose or suggest a production quota or goal with respect to such an employee.
  2. If a ROTER(s) is identified during the quarterly certification review process, the manager will:
    1. Correct a verbal ROTER violation(s) by retracting the violation(s) and informing the recipient(s) of the correct information.
    2. Correct a written ROTER violation(s) by retracting the violation(s) and the document (e.g., meeting minutes, appraisal, mid-year or progress review) and sharing the correct information with the appropriate recipient(s). When removing a ROTER violation from a performance appraisal, the manager must consider whether the numerical rating for a particular job element will change. Managers should consult Labor Relations staff as appropriate.
    3. Retain only the corrected documents in the appropriate files. Managers will attach copies of documents with a ROTER violation(s) with the Section 1204 Manager’s Quarterly Certification (Form 1204-MV) for review and follow-up action by the Appropriate Supervisor.
  3. If managers identify a prohibited use of ROTERs at times other than the quarterly certification review, they will correct the situation immediately and report the violation during the next quarterly certification process.
  4. A reviewing official may identify a ROTER in a proposed narrative of an employee appraisal or award nomination during the routine review process. However, because the document is not final, the reviewer should return it to the originator who should revise it immediately. In this case, the identification of a ROTER would not be reported as a violation during the quarterly certification process. If a manager issued an employee appraisal in final form and included a ROTER, the manager and other appropriate officials will identify it as a violation in the quarterly certification. Note: Prior to signing, Reviewing Officials can prevent violations by conducting a thorough review of the evaluation.
  5. If a manager inadvertently quotes a ROTER as a program goal during a meeting but corrects the statement during the discussion, this would not be a violation.

1.5.3.8.2 (04-01-2007)
Counting and Reporting ROTER Violations

  1. Section 1204 managers will report violations on the Section 1204 Manager’s Quarterly Certification. Managers should attach copies of documentation with violations and corrective actions to the certification form for review and follow-up action by the Appropriate Supervisor and for future oversight reviews (e.g., TIGTA, GAO).
  2. ROTER violations will be counted as follows:
    TYPE OF ROTER HOW TO COUNT
    Multiple ROTERs in one document Count total number of ROTERs in document as violations.
    One ROTER going to multiple individuals Count as one violation.
    One ROTER with multiple managers’ signatures on a document Count total number of signatures as violations.
    Multiple ROTERs and multiple signatures on a document Count total number of violations times the number of signatures.
    Verbal ROTER versus written ROTER Verbal ROTERs are counted the same as written ROTERs.
    Verbal ROTERs confirmed in writing Count total number of verbal ROTERs plus the written ROTERs.
  3. If a Section 1204 manager identifies a prior manager’s violation, the manager will still report the violation on his/her certification. For educational awareness and corrective action, the Appropriate Supervisor will advise the prior manager and his/her supervisor of the violation.
  4. If an employee evaluation contains a Section 1204 violation and was signed by the rater and approving official, two violations would be reported. The rating official and the approving official would report the violation on each of their certifications.
  5. Violation(s) identified in a document signed by both first-level and second-level managers will be reported as multiple violations, e.g., two ROTERs times two signatures reflects four violations. In this example, each level of management will separately report two violations on his/her certification. The corrective action will be appropriately identified for each manager.
  6. As indicated in the above chart, verbal ROTERs confirmed in writing are counted as two violations. For example, if a group manager verbally uses a ROTER to suggest a production goal during a group meeting and documents the statement in minutes distributed to all group employees, this will be identified as two violations, the verbal communication and the documentation in the minutes (although sent to all employees, the minutes represent one violation).
  7. A document including one ROTER violation that is posted to a website or distributed to an e-mail group code is counted as one violation. If the manager included two ROTERs in the document and distributed them similarly, this would constitute two violations.

1.5.3.9 (04-01-2007)
Certification Procedures

  1. After completing the quarterly certification review process described above, Section 1204 Managers at all levels (including Appropriate Supervisors) complete the RRA 98 Section 1204 Manager’s Quarterly Self-Certification (either Form 1204-M or Form 1204-MV as appropriate).
    1. Form 1204-M is to be completed by Section 1204 Managers if they are reporting no violations of Section 1204(a) and are in compliance with Section 1204(b).
    2. Form 1204-MV is to be completed by Section 1204 Managers who are reporting either violations of Section 1204(a) and/or incidents of non-compliance with Section 1204(b).
    3. Detailed instructions for completing these forms may be found on the forms themselves.
  2. Although the certification process is electronic, managers must retain signed copies of completed RRA 98 Section 1204 Manager’s Quarterly Self-Certifications for audit and review.
  3. For the quarterly self-certification review, Section 1204 managers will identify all Section 1204 employees who are assigned to them as of the last day of the quarter. Managers are responsible for reviewing all evaluations and EPFs for these employees and all management activities for their immediate office for the entire quarter.
  4. Acting managers may conduct the self-certification review if the next-level manager determines the acting manager has served sufficient time in the position and has adequate Section 1204 experience or training. Alternatively, that next-level manager may choose to assume responsibility for that work group review and sign the self-certification for the quarter. The next-level manager is also still required to conduct the self-certification for the work group he/she supervises.
  5. Section 1204 managers who were assigned to their position during a quarter will complete the self-certification for the work unit for the entire quarter.

1.5.3.10 (04-01-2007)
Quarterly Certification Summary Memorandum

  1. Section 1204 higher-level managers (except Appropriate Supervisors) will prepare the RRA 98 Section 1204 Quarterly Certification Summary Memorandum (Form 1204-N or Form 1204-NV as appropriate) and forward to their supervisor. Each Certification Summary Memorandum is a consolidation of the preparer’s own self-certification form and all subordinate managers’ self-certification forms.
  2. There are two forms available for the Next-Level Manager’s Summary:
    1. Form 1204-N is to be completed by Section 1204 higher-level managers (except Appropriate Supervisors) if they are reporting no violations of Section 1204(a) and are in compliance with Section 1204(b).
    2. Form 1204-NV is to be completed by Section 1204 higher-level managers (except Appropriate Supervisors) who are reporting either violations of Section 1204(a) and/or incidents of non-compliance with Section 1204(b).
    3. Detailed instructions for completing these forms may be found on the forms themselves.

1.5.3.11 (06-01-2007)
Certification Review by Appropriate Supervisor

  1. Section 1204 Appropriate Supervisors are responsible for the overall implementation of Section 1204 requirements within their organizations. Appropriate Supervisors will:
    1. Review results of their subordinate managers’ quarterly self-certifications to identify whether violations are recurring and a supplemental review needs to be conducted
    2. Follow up on all reported violations to ensure that corrective actions have been implemented expeditiously
    3. Identify situations where a Section 1204 manager should be held accountable for misuse of enforcement statistics. Refer to IRM 1.5.3.18 on Section 1204 Penalty Determinations for additional information.

1.5.3.12 (04-01-2007)
Consolidated Office Certification Memorandum

  1. Section 1204 Appropriate Supervisors will consolidate the RRA 98 Section 1204 Certification Summary Memoranda received from subordinate managers, their self-certification, and any other self-certifications received for their immediate office into the RRA 98 Section 1204 Consolidated Office Certification Memorandum for the Commissioner (either Form 1204-O or Form1204-OV as appropriate).
  2. Appropriate Supervisors will submit one of the following:
    1. RRA 98 Section 1204 Consolidated Office Certification Memorandum—With No Section 1204(a) ROTER Violations or Section 1204(b) Retention Standard Occurrences of Non-Compliance (Form 1204-O).
    2. RRA 98 Section 1204 Consolidated Office Certification Memorandum—With Section 1204(a) ROTER Violations and/or Section 1204(b) Retention Standard Occurrences of Non-Compliance (Form 1204-OV).
    3. Detailed instructions for completing Form 1204-O and Form1204-OV may be found on the forms themselves.

1.5.3.13 (04-01-2007)
Consolidated Office Certification Transmittal Memorandum

  1. Heads of Operating/functional divisions will prepare the RRA 98 Section 1204 Consolidated Office Certification Transmittal Memorandum (either Form 1204-T or Form 1204-TV as appropriate) to transmit multiple consolidated office certification memoranda from Section 1204 Appropriate Supervisors.
  2. There are two forms available for the Transmittal Memorandum:
    1. Form 1204-T is to be completed by the heads of Operating/functional divisions if they are reporting no violations of Section 1204(a) and are in compliance with Section 1204(b).
    2. Form 1204-TV is to be completed by the heads of Operating/functional divisions who are reporting either violations of Section 1204(a) and/or incidents of non-compliance with Section 1204(b).
    3. Detailed instructions for completing these forms may be found on the forms themselves.
  3. Heads of Operating/functional divisions should send the following electronically to the CFO within 45 calendar days after the end of the quarter:
    • Consolidated Office Certification Transmittal Memorandum
    • All Consolidated Office Certification Memoranda
    • EXCEL Managers list

1.5.3.14 (04-01-2007)
Quarterly Certification Process Flow

  1. This section outlines the flow of forms required for the certification process with violations or without violations.

    Note:

    It is possible to start this certification process flow without violations and then change to the process flow with violations at higher levels within the organization.

    Responsible Individual Required Document Electronic Certification Form
    ALL Managers 1) Self-Certification Form Without Violations = Form 1204-M — or — With Violations = Form 1204-MV
    Next-Level Managers (all managers between front-line managers and Appropriate Supervisor) 1) Self-Certification Form Without Violations = Form 1204-M — or — With Violations = Form 1204-MV
    2) Summary Memorandum Without Violations = Form 1204-N — or — With Violations = Form 1204-NV
    Appropriate Supervisors (these appropriate supervisors are subordinate to the Heads of Operating/Functional Divisions) 1) Self-Certification Form Without Violations = Form 1204-M — or — With Violations = Form 1204-MV
    2) Summary Memorandum Without Violations = Form 1204-O — or — With Violations = Form 1204-OV
    Heads of Operating/Functional Divisions 1) Self-Certification Form Without Violations = Form 1204-M — or — With Violations = Form 1204-MV
    2) Summary Memorandum Without Violations = Form 1204-O — or — With Violations = Form 1204-OV
    3) Consolidated Office Certification Transmittal Memorandum Without Violations = Form 1204-T — or — With Violations = Form 1204-TV

1.5.3.14.1 (04-01-2007)
Certification Without Violations

  1. This section outlines the flow of forms required for the certification process where no violations of Section 1204(a) or non-compliance with 1204(b) have occurred.
    1. Form 1204-M - Completed by ALL Section 1204 Managers.
    2. Form 1204-N - Completed by Next-Level Section 1204 Managers

      Note:

      There may be multiples of this form depending on the layers of management.

    3. Form 1204-0 - Completed by Appropriate Supervisors.
    4. Form 1204-T - Completed by heads of Operating/functional divisions.

1.5.3.14.2 (04-01-2007)
Certification With Violations

  1. This section outlines the flow of forms required for the certification process where violations of Section 1204(a) and/or non-compliance with 1204(b) have occurred.
    1. Form 1204-MV - Completed by ALL Section 1204 Managers.
    2. Form 1204-NV - Completed by Next-Level Section 1204 Managers

      Note:

      There may be multiples of this form depending on the layers of management.

    3. Form 1204-0V - Completed by Appropriate Supervisors.
    4. Form 1204-TV - Completed by heads of Operating/functional divisions.

1.5.3.15 (06-01-2007)
Independent Review Process

  1. The Service established the Section 1204 independent review process to monitor the compliance with Section 1204 certification process. A Servicewide independent review team conducts an annual review each fiscal year. The team reviews compliance with Section 1204(a) use of enforcement statistics, Section 1204(b) fair and equitable treatment of taxpayers, and 1204(c) quarterly certification process.
  2. The CFO convenes a review team, comprised of members of the Operating and Functional Divisions, which fund related travel. The CFO issues a memorandum to the Divisions to provide specific details (e.g., team member qualifications) and to request organizational participation. Due to the sensitivity of the EPF data to be reviewed, bargaining unit employees cannot be included on the team.
  3. The CFO establishes methodology and scope to select:
    • Locations (cities) for review
    • A specific number of Section 1204 managers (at all levels) to be reviewed at each location
    • A specific number of Employee Performance Folders (EPFs) to be reviewed for each selected manager
    • A specific number of non-Section 1204 managers to be interviewed to confirm non-Section 1204 status
  4. In addition, the CFO:
    • Issues engagement memo to divisions alerting them of the independent review
    • Secures facilities for the review team at each location
    • Validates status and confirms location of selected managers with assistance of Division’s Section 1204 Program Managers
    • Contacts and schedules each selected manager for interviews
    • Provides detailed instructions to selected managers to assist them in preparing for review
    • Assembles review team for each site
  5. The independent review team reviews selected supervisory and employee documentation.
  6. Pursuant to I.R.C. 6103(h)(1) and 552A(b)(1) of the Privacy Act, the independent review team may examine tax information and information covered by the Privacy Act to the extent that they have a “need to know” the information to discharge their tax administration duties.
  7. Grand Jury investigation information related to the identification of the subject (name, address, doing business as, social security number, date of birth, associates, etc.,) must be manually redacted from the hard copy document. Sensitive personnel issues may also have to be redacted from the review documents. In addition, sensitive information relating to ongoing criminal investigations, informant agreements and related documents, or information concerning undercover operations, cannot be disclosed for purposes of the independent review process. EPF, performance appraisal documents, and other supervisory documents, which are required documents to be reviewed in the independent review process, must be sanitized, purged of any sensitive investigation-specific information, and made available for the independent review.

1.5.3.16 (04-01-2007)
Servicewide Fiscal Year Independent Review Results

  1. The CFO will provide the heads of Operating/Functional Divisions with independent review results related to their organizations. Where applicable, heads of Operating/Functional Divisions will follow up on all Section 1204(a) ROTER violations and Section 1204(b) Retention Standard occurrences of non-compliance to ensure that all corrective actions are completed.
  2. The CFO will provide a fiscal year independent review summary memorandum to the Commissioner with Servicewide results within 60 days following completion of General Legal Service (GLS) review of the findings.

1.5.3.17 (06-01-2007)
Higher-Level Executive Reviews of the Certification and Independent Review Processes

  1. Heads of Operating/Functional Divisions must review the quarterly certification results provided by Section 1204 Appropriate Supervisors and the annual independent review results to identify possible areas of concern. They will:
    1. Ensure that all identified Section 1204(a) ROTER violations and Section 1204(b) Retention Standard occurrences of non-compliance have been corrected.
    2. Assess educational needs regarding Section 1204 awareness and respond appropriately.
    3. Resolve situations where Section 1204 managers have misused ROTERs (see IRM 1.5.3.18 on penalty determinations).

1.5.3.18 (04-01-2007)
Section 1204 Penalty Determinations

  1. Executives will identify situations where Section 1204 managers at all levels should be held accountable for misuse of tax enforcement results. Potential misuse could be identified during the certification process, annual independent review, or at any other time during the fiscal year.
  2. Executives must assess the severity of the Section 1204 violation and take appropriate corrective or disciplinary action. Section 1204 managers, particularly new managers, might incur a violation due to the lack of knowledge or training on Section 1204 requirements. The appropriate corrective action may be technical counseling or training. In other situations, depending on the nature of the offense and frequency of offenses, actions can range from reprimand to removal.
  3. Executives must consider each situation based upon its own merit. The following factors should be considered in determining appropriate corrective action:
    1. What is the nature of the violation?
    2. What is the manager’s position?
    3. What is the extent of deviation from the law or regulation on enforcement statistics?
    4. How were taxpayers impacted by this action?
    5. Does the action appear to be intentional/overt (e.g., repeated violations, prior higher-level management guidance regarding incorrect use of statistics)?
    6. Did the manager identify the violation in the self-certification process?
    7. Has the manager received Section 1204 training?
    8. What is the span of time from the receipt of training and application?
    9. What is the level of managerial experience?
    10. If the manager received no Section 1204 training, was he/she briefed on Section 1204 upon accepting his/her current position?
    11. Was the violation the result of direct guidance from higher-level management?
    12. What is the impact of the violation to the group, organizational unit, and Service?
    13. Have similar violations occurred in the Service, and if so, what corrective or disciplinary actions were applied?
  4. Executives should notify the CFO of situations requiring disciplinary action.

1.5.3.19 (04-01-2007)
Retention of Records

  1. All Section 1204 related documentation, including quarterly certification and independent review documents, should be considered temporary records and must be closed out at the end of the fiscal year and destroyed 3 years after closure.
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