4.9.1. Outline of System

Return Preparer - Negligent Preparation Penalty - IRC 6694(a)

Used to apply time to Internal Revenue Code (IRC) 6694(a), Understatement of Taxpayer’s Liability Due to Unreasonable Position, preparer penalty investigations. This activity code must be established on ERCS using penalty MFT P1.

Return Preparer - Willful Attempt to Understate Tax Penalty - IRC 6694(b)

Used to apply time to IRC 6694(b), Understatement of Taxpayer’s Liability Due to Willful or Reckless Conduct, preparer penalty investigations. This activity code must be established on ERCS using penalty MFT P2.

Return Preparer - Endorsing or Negotiating Tax Refund Check - IRC 6695(f)

Used to apply time to IRC 6695(f), Negotiation of Taxpayer’s Refund Check, preparer penalty investigations. See Form 5816, Report of Tax Return Preparer Penalty Case. This activity code must be established on ERCS using penalty MFT P3.

Return Preparer - Disclosure Penalties - IRC 6695(a) through IRC 6695(e) and IRC 6713

Used to apply time to the following preparer penalty investigations:

• IRC 6695(a), Failure to Furnish Copy to Taxpayer

• IRC 6695(b), Failure to Sign Return or Claim for Refund

• IRC 6695(c), Failure to Furnish Identifying Number

• IRC 6695(d), Failure to Retain Copy or List

• IRC 6695(e), Failure of Preparer Employer to File Information Returns

• IRC 6713, Disclosure or Use of Information by Return Preparer

See Form 5816, Report of Tax Return Preparer Penalty Case. This activity code must be established on ERCS using penalty MFT P4.

Penalty for Failing to Disclose Reportable Transactions - IRC 6707A

Used to apply time to IRC 6707A, Failure to Include Reportable Transaction Information with Return, penalty investigations. This penalty is imposed for failure to disclose reportable (listed and non listed) transactions as required under IRC 6011, General Requirement of Return, and associated regulations. This activity code must be established on ERCS using penalty MFT P5.

Information Return Penalty Case - IRC 6721, IRC 6721(e), IRC 6722, and IRC 6723

Used to apply time to the following information return penalty cases:

• IRC 6721, Failure to File Correct Information Returns

• IRC 6721(e), Failure to file correct/timely information returns or Form 8300 or W2 due to intentional disregard

• IRC 6722, Failure to furnish correct/timely payee statements

• IRC 6723, Failure to comply with other information reporting requirements - Failure to provide notice of partnership

This activity code must be established on ERCS using penalty MFT P9.

Pricing Issues

Time applied by revenue agents and specialists while considering IRC 482, Pricing Advance Determination Ruling, requests received from HQ office. This time will not be allocated to the examination of the taxpayer’s tax return, whether or not such return is concurrently under examination. This activity code may be established on ERCS as an inventory record using MFT A0.

Economist Studies

Time applied while working on management directed studies, of particular practice areas other than those conducted under the direction of a specialist on matters related to the Industry Specialist Program (ISP). Time charged to this code will require that the economist prepare an industry study report that will be separate from any case. This activity code may be established on ERCS as an inventory record using MFT A1.

Form 8300 Compliance

Time expended in performing Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, program activities, including Form 8300 compliance reviews. Primarily used by SB/SE anti-money laundering activities. This activity code is not to be used for time expended as part of required filing (package audits) checks during an income tax examination. This activity code may be established on ERCS as an inventory record using MFT A2 or MFT PX. MFT PX should be used when statute control is required. See IRM 4.26.10.11, Form 8300 Statutes of Limitations, for further statute control guidance.

Form SS-8 (Information to determine whether a worker is an employee for federal employment tax and income tax withholding)

This activity code is used to apply time by the SS-8 coordinator to Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding activities. This activity code may be established on ERCS as an inventory record using MFT A3.

Technical Guidance

Support time provided to examiners by industry facilitators/experts not charged to a specific return. This activity code may be established on ERCS as an inventory record using MFT A4.

COBRA

Used to apply time spent on examinations to determine employer compliance with the Consolidated Omnibus Budget Reconciliation Act (COBRA). This act provides that employers shall offer continuing health care coverage to employees and their dependants when the employee leaves the job, except when an employee is discharged for gross misconduct. Employees denied coverage may file a complaint with the IRS. In response to these complaints, the IRS conducts an examination of employer to determine compliance. The IRS may also examine employers who claim a credit on employment tax returns for COBRA continuation health coverage payments made for assistance eligible individuals of the employer. This activity code may be established on ERCS as an inventory record using MFT A5.

LCC - EO

Used by Examination employees that are requested to assist the Tax Exempt/Government Entities (TE/GE) in the conduct of an Employee Plans or Exempt Organization (EO) taxpayer examination. This activity code may be established on ERCS as an inventory record using MFT A6.

Specialist Consultations or Informal Assistance

This activity code is to be used by specialists to reflect limited amounts of time expended on consultations or informal assistance with open, active cases in any BOD. This would include time spent determining whether or not formal referral is warranted on a specific case as well as time spent on special projects related to a group of cases. Once it has been determined that a significant amount of time will be expended, time should be charged to the specific case(s). Local support personnel (for example FBAR coordinators) may also use this code for FBAR time. See IRM 4.26.17, Report of Foreign Bank and Financial Accounts (FBAR) Procedures, for additional guidance. This activity code may be established on ERCS as an inventory record using MFT A7.

Diesel Terminal Inspection

Time charged to inspections of fuel terminals. This activity code may be established on ERCS as an inventory record using MFT D5.

Diesel Fleets and Truck Stop Inspection

Time charged to inspections of fleets, truck stops, fuel wholesale distributors, and fuel retail establishments. This activity code may be established on ERCS as an inventory record using MFT D6.

Diesel on Road Inspection

Time charged to on-road inspections. This activity code may be established on ERCS as an inventory record using MFT D7.

Diesel All Other Dyed Fuel Inspection

Time charged to all other types of fuel inspections (end users of fuel). This activity code may be established on ERCS as an inventory record using MFT D8.

Information Returns Processing (IRP) Compliance Check

Used for time applied to IRP compliance checks. This initiative includes backup withholding compliance checks as well as other information reporting compliance checks including; state and federal agency compliance and locally developed compliance projects. This activity code may be established on ERCS as an inventory record using MFT A8.

Unmatchable Information Return Follow-Up

Time applied making payor and payee contacts to decrease the number of information returns that have dropped out of the IRP pipeline because they were unmatchable to Social Security or TIN records and could not be perfected by the IRS. This activity code may be established on ERCS as an inventory record using MFT A9.

Excise Compliance

Used by excise tax analysts and dyed fuel compliance officers to identify compliance activities which are not return related, such as meetings with industry representatives, ISP meetings and outreach and education programs in the excise tax area. The following SSCs are valid with this activity code. They are used to differentiate between Federal Highway Administration (FHWA) and non-FHWA:

• 000 - Registry and Exemptions (non-FHWA)

• 040 - Fed State Motor Fuel Project (FHWA)

This activity code may be established on ERCS as an inventory record using MFT B7.

Return Preparer Multi Functional Monitoring Team

Used by examiners who participate on multi-functional teams to visit electronic filers to determine their compliance with the IRS e-file program procedures. This activity code may be established on ERCS as an inventory record using MFT AB.

LCC Chief Counsel

Used by LCC program examiners to assist Chief Counsel, and attorneys on cases under Counsel's jurisdiction. Generally these are cases that had previously been closed out of Examination and are being prepared for litigation or trail or are being litigated or tried. This activity code may be established on ERCS as an inventory record using MFT B8.

Earned Income Tax Credit (EITC) Return Preparer

Time applied in developing penalty cases against a return preparer involved in preparing fraudulent or negligent EITC returns. This activity code may be established on ERCS as an inventory record using MFT B9.

Prefiling Agreement

Time applied by revenue agents and specialists in obtaining agreements on cases accepted in the Pre-filing Agreement Program. This includes time spent on reviewing the requests, developing the facts and issues, coordinating with other functions, attending conferences, preparing the closing agreement, and evaluating the program. Time will be charged to this activity code, but it will be linked to the case in ERCS. These activities should not be charged to the case currently under examination. This activity code may be established on ERCS as an inventory record using MFT C1.

Prefiling Technical Guidance

Time spent by revenue agents and specialist in providing pre-filing technical guidance to taxpayers not part of the Pre-filing Program. Time will be charged to this activity code, but it will be linked to the case on ERCS. Time is not charged to the case currently under examination. This activity code should be established on ERCS as an inventory record using MFT C2.

Industry Issue Resolution

Time spent by revenue agents and specialists in finding solutions to issues under the Industry Issue Resolution Program. This includes time spent on reviewing industry requests, developing the facts and issues, drafting and clearing the resolution and evaluating the program. This activity code may be established on ERCS as an inventory record using MFT C3.

Comprehensive Case Resolution

Time applied by revenue agents and specialists to resolve all open issues on all open years under the Comprehensive Case Resolution Program. This includes time spent reviewing the request, planning, developing the facts and issues, drafting reports and closing agreements, and evaluating the program. Once the taxpayer's request has been approved, time should be charged to the taxpayer's return currently under examination. Time to other cycles should be charged to this activity code that will be linked to the ERCS case. This activity code may be established on ERCS as an inventory record using MFT C4.

Corporate Tax Shelters

Time applied by revenue agents and specialists in developing information with respect to a tax shelter promotion or an investigation. This does not include time spent on the examination of corporations and individuals that participate in the corporate tax shelter transactions and the promoters of those transactions. Time related to the examination of a return containing a tax shelter issue should be charged to the case, and not this activity code. This code is exclusively for developing information from leads. This activity code may be established on ERCS as an inventory record using MFT C5.

Global High Wealth (GHW)

This code is used by the field for detailed inspection or review of returns that may subsequently be put in process or closed using Disposal Code 43.

Report of Foreign Bank and Financial Accounts (FBAR) and Compliance Activity

Time applied to the examination of Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts. These examinations are conducted to determine compliance with the reporting and record keeping requirements found in 31 Code of Federal Regulations (CFR) 103.24. FBAR examinations are conducted by LB&I, SB/SE, and TE/GE (including Bank Secrecy Act, Abusive Transaction Investigations (ATI) income tax examiners. Instructions for FBAR examinations are found in IRM 4.26.16, Report of Foreign Bank and Financial Accounts (FBAR), and IRM 4.26.17, Report of Foreign Bank and Financial Accounts (FBAR) Procedures. This activity code must be established on ERCS as an inventory record using MFT Y0.

Fraud Development

Used when fraud technical advisors or field examiners provide assistance in developing Fraud Potential. This activity code may be established on ERCS as an inventory record using MFT C7.

Form 720-TO/CS

Used to report time spent onForm 720-TO, Terminal Operator Report, and Form 720-CS, Carrier Summary Report, compliance reviews. This activity code may be established on ERCS as an inventory record using MFT B1.

Certified Profession Employer Organization (CPEO)

Used to account for time spent conducting field follow-up on CPEO. Specific activities include: bond verification, financial review, verification of appliance enrollment in Electronic Federal Tax Payment System, review of service contracts, review of client lists, discussions with applicant, corresponding with applicants, documenting case file, and making determination. See Exhibit 4.9.1-3, SSCs for Activity Code 548.

Promoter Penalty - IRC 6707 Failure to Register Tax Shelter Transaction

Used for IRC 6707 penalty investigations. This activity code must be established on ERCS as a penalty record using penalty MFT P0. IRC 6707 imposes a penalty of $10,000 per day on any person required to maintain an investor list who fails to make such lists available within 20 business days after receiving a written request from the IRS. The penalty also applies to persons who maintain incomplete lists. If statute control is required, this activity code must be established on ERCS using penalty MFT PI; otherwise, use MFT P0. See IRM 20.1.6.21, Statute of Limitations, for additional guidance.

Foreign Initiated Adjustments

Use to apply support time applied and not charged to a specific return by examiners on competent authority requests for evaluation of positions and/or more detail information on foreign initiated adjustments.

Tip Reporting Compliance

Used to track the time invested instituting and enforcing the IRS' Voluntary Tip Agreement Program. This includes contacts with the taxpayer about a new tip agreement, updating an existing agreement, responding to a taxpayer inquiry related to questions or issues with a tip agreement, performing a rate review for a new or existing agreement, or performing a compliance review on an existing agreement. The activity code should be used for Gaming Industry Tip Compliance Agreements, Tip Rate Determination Agreements, Tip Reporting Alternative Agreements, Employer Tip Reporting Alternative Agreements, or Voluntary Tip Reporting Agreements from the past/designed in the future. This activity code may be established on ERCS using MFT C0 or MFT C6.

Substantial and Gross Valuation Misstatement Attributable to Incorrect Appraisals - IRC 6695A

Time spent on IRC 6695A penalty investigations. This activity code may be established on ERCS using MFT PB.

Failure to Exercise Due Diligence - IRC 6695(g)

Used to apply time working cases where an income tax preparer fails to comply with due diligence requirements for determining eligibility for, or the amount of, the EITC. This activity code must be established on ERCS using penalty MFT PC.

Penalty for Erroneous Claim for Refund or Credit - IRC 6676

Used to apply time to IRC 6676 penalty investigations. This penalty applies when a taxpayer submits a claim for refund or credit of income tax that is an excessive amount and that has no reasonable basis. This activity code must be established on ERCS using MFT PD.

Other Penalties - Form 8278

This code is used to charge time spent on penalties not specifically listed within this section and are on Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties. This activity code must be established on ERCS using penalty MFT PE or MFT PH. The MFT used is dependent on the penalty section under examination. See Penalty Codes for ERCS for more information.

Return Preparer Visitation Program

This activity code is used by revenue agents and tax compliance officers on education/outreach and compliance/enforcement activities pertaining to the Return Preparer Visitation Program (education visits). Use this code for planning, meetings, visitations and other activities for the visits. This activity code may be established on ERCS using MFT AC.

Identify Theft

Used to apply time spent on the identity theft aspect of an examination:

• when there is an open examination on AIMS and ERCS for a tax period where the taxpayer has documented the identity theft and

• when there is no open examination on AIMS and ERCS and the field receives a referral from the Identity Protection Specialized Unit pertaining to a taxpayer who has claimed identity theft.

If there is an open examination controlled on AIMS and ERCS for a taxpayer which identity theft work is being performed, an inventory control record for this activity code also needs to be established on ERCS using MFT AD.

Form 8939, Allocation of Increase in Basis for Property Acquired From a Decedent

Use to apply time when reviewing Form 8939 for accuracy of value and basis adjustment. This activity code may be established on ERCS using MFT AE.

PTIN Compliance Visits

Used to apply time to visits with tax return preparers to educate them on their responsibility to identify themselves with a Preparer Tax Identification Number (PTIN) as required under IRC 6109. This activity code may be established on ERCS using MFT AF.

EITC/Electronic Return Originator Combinations Visits

Time applied by SB/SE examiners to review EITC due diligence and Electronic Return Originator requirements with return preparers.

Individual/Employer Shared Responsibility Payment

Used to apply time for IRC 5000A, 6056 or 4980H issues. This activity code must be established on ERCS using MFTs PZ - "Individual Shared Responsibility Payment", Y1 - "Investigation of Information Return Filing Case", or Y2 - "Provision 4980H Employer Shared Responsibility Payment".

Employment Credits

Used by SB/SE to establish Employment Credit non-AIMS DET cases on ERCS. MFT CA is used for the Employee Retention Credit - Voluntary Disclosure Program cases.

Compliance Outreach

Used by technical personnel on outreach activities which promote compliance. This activity code requires a specific entry for the fourth digit which will identify specific type of tax entity or activity. The fifth and sixth digits will define the specific market segment impacted. See Exhibit 4.9.1-4, SSCs for Activity Code 575.

International Penalties - Form 8278

Used to apply time spent investigating various International penalties. This activity code must be established on ERCS using one of the following penalty MFTs: PQ, PR, PS, PT, PU, PV, or PW. The MFT used is dependent on the penalty section under examination and whether statute control is required. See Penalty Codes for ERCS for more information.

Coordinator Activity

Used by TS when performing coordinator activities other than those of Tax Equity and Fiscal Responsibility Act (TEFRA). A review SSC must be input with this activity code to correspond to the type of activity performed. The SSC must be a review type preceded by a single zero (ex. 011). See the Codes chapter of the ERCS Review Handbook for a list of SSCs.

Registry with Exemptions

Time spent on coordination and follow-ups conducted in relation to the Registration Program (Form 637, Application for Registration (For Certain Excise Tax Activities). This activity code may be established on ERCS using MFT B0. This activity code is valid with the following two SSCs:

• 000 - Registry and Exemptions (non-FHWA)

• 040 - Fed State Motor Fuel Project (FHWA)

Offer-In-Compromise

Used by TS to further classify the type of review performed on a return. This code is entered as the SSC when applying time to a return. This activity code may be established on ERCS using MFT C8.

Abatement of Interest

Used by TS to further classify the type of review performed on a return. This code is entered as the SSC when applying time to a return. This activity code may be established on ERCS using MFT C9.

Title 31 Compliance Checks

Time expended in performing Title 31 Bank Secrecy Act (BSA) program activities including Title 31 BSA Compliance examinations. Primarily used by SB/SE anti-money laundering examiners. This code is not to be used for time expended as part of the required filing package audit checks during an income tax examination.

Narcotics/Information Gathering Projects - No Return Examined

Time spent on an approved information gathering or narcotic project where there is no tax return. This activity code may be established on ERCS using MFT B2.

Promoter Penalty

Time spent by examiners for researching and developing leads or conducting investigations for activities which warrant sanctions under IRC 6700, Promoting Abusive Tax Shelters, or IRC 7408, Action to Enjoin Promoters of Abusive Tax Shelters. Time charged to this activity code will be non-case specific until the Lead Development Center (LDC) has formally approved an investigation. Once the LDC has authorized the investigation, time should be charged directly to the case. Upon receipt of the case file by the area PSP, the ATI coordinator will establish an investigation penalty case on ERCS with the appropriate TIN and tax period using this activity code and MFT P6.

Aiding and Abetting Penalty

Used for reporting time researching and developing leads or conducting investigations for activities which may warrant sanctions attributed to IRC 6701, Penalties for Aiding and Abetting Understatement of Tax Liability, or IRC 7407, Action to Enjoin Income Tax Return Preparer, resulting from an IRC 6701 investigation. Time charged to this activity code will be non- case specific until the LDC has formally approved an investigation. Once the LDC has authorized the investigation, time should be charged directly to the case. Upon receipt of the case file by the area PSP, the ATI coordinator will establish an investigation penalty case on ERCS with the appropriate TIN and tax period using this activity code and MFT P7.

Promoter Penalty - IRC 6708, Failure to Maintain List of Investors/Advisees with Respect to Reportable Transactions

Time spent working issues where the promoter fails to make lists available within 20 business days after written request. This activity code must be established on ERCS using MFT P8.

Joint Committee Survey

Time spent for the survey of all Joint Committee cases. A Joint Committee case is identified on AIMS with Project Code 0077. This activity code may be established on ERCS using MFT B3.

SEP - Non Case

Time spent on a specific Special Enforcement Program (SEP) or project other than time directly applicable to assigned returns. It includes time spent by project coordinators, group managers and examiners on such matters as: advising United States attorneys, Strike Force attorneys and others regarding the civil tax potential of proposed projects or investigations; evaluating civil tax potential of information obtained by Criminal Investigation from Grand Jury actions and other sources; developing the examination portion of project plans, and attending IRS Strike Force or other meetings concerning program priorities, progress of objectives. This activity code may be established on ERCS using MFT B4.

LCC Pre and Post Conference Meetings

Time applied while holding pre and post conference discussions with Appeals with respect to an examination cycle previously closed by examination and now controlled by Appeals. The pre-conference serves as a form for discussing issues, the taxpayer's protest, the Examination team's written rebuttal to the protest, and the anticipation of problems and concerns. The post-conference is to discuss the settlement reached in Appeals and its impact on the subsequent examinations as well as to identify issues susceptible to Examination settlement authority. This activity code may be established on ERCS using MFT B5.

Industry Specialist Program

Time applied by the ISP coordinators while working on matters identified as pertaining to the ISP. This includes time spent working with area revenue agents on industry cases and issues involving the National Industry Specialist, National Issue Specialist or other area coordinators. This activity code may be established on ERCS using MFT B6. See Exhibit 4.9.1-5 for the SSCs valid for Activity Code 599 and the special guidance for 59998X.

General - Campaign Development

Time spent on non-examination work performed on Campaign Development. This activity code should be used only for the following Campaign development activities:

• Developing training

• Developing tools be used in a campaign

• Developing workload selection filters

• Assessing resources available and/or deployed to campaigns

• Developing treatment streams

• Developing classification tools and guidelines

• Identifying and assessing unique funding requirements

• Developing goals, metrics, and feedback for campaigns

• Other similar Campaign development activities

General - Indirect

Time spent on technical duties that cannot be charged to a specific case or activity. Generally, this includes attending group meetings, reading procedural/technical material, preparing and attending technical/procedural conferences, completing forms, working on committees, managing records, preparing time reports/travel vouchers, general housekeeping (e.g., moving, ordering supplies and surveying space) and answering email or phone messages. Group managers will not charge time to this code.

General - Automated Data Processing (ADP) Coordination

Time devoted to liaison and coordination or procedures involving flow of work between area and campus. This item includes "trouble shooting" activities for Examination functions. Other trouble shooting activities are reported under Activity Code 826. Coordination of classification matters are reported under Activity Code 624.

General - Inventory on AIMS

Time spent taking physical inventory of returns on hand or supplying necessary data to convert manual inventories to computerized perpetual inventories.

General - Report Generation Software (RGS) Coordination

Time spent on RGS coordination and non-case related usage of the system by RGS coordinators, RGS support technicians or their designated representatives. This includes trouble shooting activities for Examination personnel. Any application development which is not related to a current case must be approved by the group manager:

• All case related RGS time spent by examiners will be charged to the activity code of the specific return.

• All RGS training as specified in the course instructions will be charged to Training - Other, Activity Code 683.

General - Freedom of Information Act and Privacy Act

Time spent processing requests under Freedom of Information Act and the Federal Order Information and Privacy Act.

General - Survey

Time devoted to survey of returns after assignment and claims for refund in which no contact has been made with the taxpayer. This includes time spent in processing (screening) questionnaires, inquiry letters, etc., related to Form 990, Return of Organization Exempt from Income Tax. Time spent on claims surveyed at campuses is reported using Activity Code 622, Classification - Adjustments.

General - Direct Release Request

Time spent on Direct Release Request related activities when responding to taxpayers’ requests for examination files after the examination case is closed from an employee's inventory in IMS or ERCS.

General - Project Coordination

Used by project coordinators to coordinate their specific projects. These include National Research Program (NRP), tax shelter, deferred adverse tax consequences (DATC) and other coordinators. This code is not be used for RGS coordination. Also included in this activity code is time spent by Voluntary Disclosure Program coordinators not working their cases or assisting other examiners with their cases.

General - LCC Case Management

Time spent by managers overseeing LCC cases in planning, developing and supervising the examination of an LCC case.

General - Group Management

Time devoted to management duties by group managers or persons acting in such capacity. This includes time devoted to surveys before assignment, attending meetings (except training) at territory and area levels, preparation and analysis of statistical reports, etc. Members of cadres under the Management Careers Program assigned as assistant to group managers will also charge their time to this code in a similar manner.

General - Quality Initiative Project

Used to report time expended by managers and examiners on all quality improvement projects and related activities.

Classification - Returns

Time spent on classification of returns. This includes time spent on screening discriminant function (DIF) returns, time spent by engineering and valuation revenue agents classifying returns involving engineering issues, and orientation sessions for classifiers.

Classification - Adjustments

Time devoted to classification of taxpayers requests for adjustments (both formal and informal) and related returns. Included in this item are classification of claims for refund, amended taxable returns, applications for tentative refunds, and other items showing an adjustment (increase or decrease) in tax liability. Form requests for adjustments include Form 843, Claim For Refund and Request for Abatement; Form 1040-X, Amended U.S. Individual Income Tax Return; Form 1120-X, Amended U.S. Corporation Income Tax Return; Form 1045, Application for Tentative Refund; and Form 1139, Corporation Application for Tentative Refund.

Classification - Other

Time expended on all other classification activities such as processing and reviewing Form 3449, Referral Report, and Form 966, Corporate Dissolution or Liquidation, and similar items.

Classification - Management

Time spent by classification personnel devoted to management functions such as planning, programming, and supervising the classification activity at areas and campuses. This includes conducting orientation sessions for classifiers, reviews of returns classified, closed case reviews and evaluation of classifiers. The Chief, Classification Section PSP and the PSP support manager will use this code except for staff assignments other than classification.

Classification - Compliance Data Environment (CDE)

Used to apply time when classifying returns on the CDE System.

Examination Support Staff (ESS)/Examination Support Unit (ESU) - Tax Shelter

Time expended on tax shelter cases by ESS personnel.

ESS/ESU - Other

Time expended on cases other than tax shelter cases by ESS personnel.

Quality Assurance - Case Review

Time expended by TS reviewing reports of examination for compliance with the auditing standards. Includes time spent determining the accuracy of procedural and case management practices of an examination, and time expended by reviewers preparing, completing, reviewing, controlling or processing special reports, forms or the functions associated with a return under review. Examples include jeopardy assessments, NRP and DATC check sheets, approval of language for restricted consent, closing agreements, inadequate records, joint committee reports, reopening requests, and restricted interest computations. Also included is time spent on research and preparation of the reviewer's reports.

Quality Assurance - Notice of Deficiency (90 Day)

Time expended by TS in preparing, reviewing and signing notices of deficiency. This includes coordination of the 90 day letters with other IRS functions, such as case processing and Counsel, and time spent by reviewers answering telephone and letter inquiries from taxpayers regarding 90 day letters.

Quality Assurance - Coordinator Activity

Time spent by reviewers interrelating with examination activities effecting a particular program for which TS has primary program responsibility. Examples include fraud, informants communications and rewards, and technical coordination and suspense. This item includes coordination, control, reporting and management of the program. Also included is time expended by reviewers in furnishing formal and informal technical advice and assistance to IRS personnel; gathering, processing, writing, reviewing, coordinating, and otherwise preparing material for technical or procedural publication or issuance; researching, gathering, processing, meeting, discussing, organizing, writing, reviewing, or otherwise assisting management with management studies and assignments. Examples include review digests, analysis of reviewers reports, internal management documents, and territory, area, or national publication. Time expended by reviewers furnishing information to, corresponding, working, or coordinating with other divisions, areas, HQ office or other agencies on projects, programs, assignments, returns, reports or requests for information.

Other - 30 Day Letter Activities

Time spent by examiners preparing, reviewing, and following up on 30 day letters. This includes time spent screening protests for adequacy.

Quality Assurance - Abatement of Interest

Time expended by reviewers to coordinate or work claims with respect to IRC 6404, Abatements.

Quality Assurance - Review Management

Time devoted to management duties as a TS manager including persons acting in such capacity.

Other - Tax Examiner

Time applied by tax examiners on non return related work.

Other - General Management

Time applied to management by technical personnel assigned permanently or acting in the following positions:

• Territory Manager (LB&I only)

• TS Management

• Chief, Technical Support

• Chief, PSP (Classification)

• Other supervisory or staff personnel who cannot be identified with a specific group

This item also includes time spent by non-supervisory personnel and group managers participating with field territory manager in team meetings to resolve management problems. For example, members of a task force appointed to consider solutions to problems identified by an attitude survey would charge their time to this activity code. Also to be included in this item are employees in leadership programs such as the Frontline Leadership Readiness Program and the Leadership Succession Review who are assigned to assist any of the positions listed above.

Other - Technical Referrals

Time spent by Examination technical personnel servicing taxpayers by participating in and preparing material for radio, television and other public appearances. Compliance technical employees working technical paper referrals from the Taxpayer Services functions which require special expertise, outside the scope of the Taxpayer Services programs (e.g., such as estate and gift taxes). Note that calls from taxpayers or representatives on filed returns not being examined must be referred to the campus for all account information, including status of closing letters.

Other - Taxpayer Advocate

Used by full or part time Taxpayer Advocate Service (TAS) liaisons for time spent controlling cases, making assignments, analyzing trends, reviewing cases, or coordinating cases referred by TAS. See IRM 13.1, Taxpayer Advocate Case Procedures. Also applies to case work time spent on Form 12412, Operations Assistance Request (OAR), when a return is not presently open to examination. If the return is open, charge time spent examining a return which was referred by TAS on Form 12412 to the activity code of the specific return. Charge formal details to TAS to Activity Code 826, Details Out - All Other.

Other - Compliance Outreach

This code is used primarily by management, but can also be used by technical personnel, who are engaged in outreach activities. See definition for Activity Code 575.

Training - Recruit- Classroom

Classroom time (including pre-classroom and related travel time) applied by instructors and students needed to get examiners up to the working level for that position (e.g., Revenue Agent Phases I, II, III, IV; Tax Compliance Officers Phases I, II, III; Engineer Revenue Agent Training; Estate and Gift Tax Law for Attorneys; Income Tax Law for Estate Tax Attorneys).

Training - Recruit-On The Job Training(OJT)

On the job time (including related travel time) is time applied to courses referred to in Activity Code 681 above. Includes all instructor OJT time for these courses and student OJT time for these courses during formal OJT workshops. Examination time (including related travel time) applied by students during OJT is charged to cases using direct examination activity codes.

Training - Other

Time (including related travel time) applied by instructors and students to approved training, except recruit training reported under Activity Codes 681 and 682, continuing professional education (CPE) training reported under Activity Code 684; and training for details to Taxpayer Service reported under Activity Code 811.

Training - Continuing Professional Education (CPE)

Time (including related travel time) applied by instructors and students for CPE training.

Other - Engineering and Valuation

Used by engineering revenue agents to apply time to engineering and valuation work not in connection with the examination of a specific tax return. Engineering and valuation time devoted to a specific return charged to the agents own area will be entered as DET.

Other - Information and Collateral Reports

Used by technical personnel to apply time devoted to information reports which do not involve a specific tax return. It also applies to time spent by revenue agents protecting the government's interest in tax liabilities arising from special events such as rock music festivals, championship boxing promotions, and other entertainment or sports events. Only time which cannot be charged to a specific return is reported under this code.

Other - System Administration

Computer audit specialists and computer systems analysts designated as systems administrators will use this code to report time spent on the following duties; installing system software, providing user assistance or technical support, performing security related tasks, resolving equipment problems and troubleshooting.

Other - Computer Audit Specialists (CAS) ADP Projects

Time of computer audit specialists revenue agents, and computer systems analysts devoted to computer application work that is not in connection with the examination of a specific return. Computer audit specialists will also use this code for time spent on all area office approved ADP projects which are not case related.

Other - CAS ADP Evaluations

Computer audit specialists will use this code to report time spent on all ADP evaluations performed when the taxpayer's return is not currently under examination.

Other - Offers in Compromise

Time spent by technical personnel in the examination, quality assurance and disposition of offers in compromise.

Other - Administrative Duties

The time reported in this item pertains to duties such as:

• Combined Federal Campaign

• Participation in attitude surveys (survey and meetings)

• Commissioner representative duties

• National Treasury Employees Union (bank and official, which includes time spent by designated union representatives as provided for in the union contract)

• Special emphasis program time

• Computer breakdowns and refresh (the sub-category code of "IT" can be entered on ERCS and IMS to further classify the time)

• Mandatory briefings (e.g. Unauthorized Access (UNAX), Privacy, Information Protection and Disclosure, etc.)

• Performance discussions with managers (e.g. revenue agent/tax compliance officer workload reviews, etc.)

• Time of technical personnel engaged in personnel investigations and interviewing applicants

• Time expended on assignments for the Office of Personnel Management or the Resources Management Division

The time of technical personnel acting as:

• Executive Secretary or as a member of the Office of Personnel Management Panel

• Secretary or as a member of the Incentive Awards Committee and Performance Rating Committee

Training - Recruit New Hires

Examination employees who participate in recruiting new hires should charge time to this activity code. This code is also used when visiting college campuses, preparing for visits, and any activity directly related to the recruitment of new hires.

Other - Innocent Spouse

Time charged by TS when performing the streamline review process for innocent spouse cases. The term reviewing is used in the traditional sense i.e., reviews that take place outside the group.

Details Out of Division or Area to: Large Business & International

Time applied by technicians detailed to assist or management assigned to act for the LB&I operating division.

Details Out of Division or Area to: Small Business Self Employed

Time applied by technicians detailed to assist or management assigned to act for the SB/SE operating division.

Other- Individual TIN /Certifying Acceptance Agent (CAA) Compliance Program

SB/SE examiners conducting compliance checks with CAAs must charge their time to this activity code. A CAA is an individual, business or organization authorized by the IRS to assist alien individuals and other foreign persons in obtaining ITINs. They are subject to suitability checks (Federal Bureau of Investigation and tax compliance) and must renew their agreement every four years. A CAA has added responsibilities, including: certain records retention and being subject to IRS compliance checks.

General - Group Management Case Review

Used by managers for activities directly related to taxpayers' cases. Activity Code 619 will continue to be used for the traditional management activities within the group. This code will not include activities already chargeable to other current time codes such as Compliance Outreach, Leave, etc. Activity Code 740 time shall not be included as part of time charged by examiners to a case. Examples of where managers would charge time to this activity code include; pre-assignment case reviews and case surveys, (meeting, discussing, and reviewing) cases with revenue agents, tax compliance officers, tax examiners; meeting/discussing cases with other IRS representatives (appeals officer, special agent), and other governmental or third party representatives; meeting/discussing cases with taxpayers or their representatives, on-site visits with taxpayers and examiners, post closing case review and researching issues on taxpayers cases.

General - Referral Mail (R-mail)

Technical employees temporarily assigned or formally detailed to work R-mail.

General - Electronic Tax Law Administration (ETLA)

Technical employees temporarily assigned or formally detailed to ETLA.

General - Volunteer Income Tax Assistance (VITA )

Technical employees providing support on Taxpayer Education Programs such as VITA, Tax Counseling for the Elderly, Small Business Programs; Workshops, Your Business Tax Kit, Individual Tax education; workshops, practitioners institutes, school programs, and fundamentals of tax preparation and understanding taxes.

General - Disaster Assistance Program

Time devoted to Disaster Assistance and Emergency Relief Programs such as assisting taxpayers at Federal Emergency Management Agency Disaster Recovery Centers assisting affected taxpayers with the preparation of amended returns, etc.

Other - Furlough

Used to apply time during a furlough for employees who apply time in ERCS and IMS.

Details Out of Practice Area or Area to: Taxpayer Services - Taxpayer Service / Taxpayer Assistance

Examination technical personnel assigned or formally detailed to Taxpayer Services who are required to complete a Form 5311, Taxpayer Service Activity Report, will also report time under this code. An assignment or formal detail to Taxpayer Services includes:

• Examination employees formally detailed to Taxpayer Services and performing taxpayer service assistance duties. This may include assisting walk-in taxpayers or taxpayer telephone inquiries.

• Examination employees in small posts of duty who perform duties, such as walk-in or telephone, when the Taxpayer Services employee is not available.

• Employees specifically assigned to be technical backup employees for Taxpayer Services, located within the taxpayer assistance area or in the Examination area. This includes responding to taxpayers who have been referred from the taxpayer assistance area (either walk-ins or telephone calls). These referrals are technical in nature on subject clearly within the scope of the Taxpayer Assistance Program but which cannot be responded to by front-line Taxpayer Services employees because of lack of expertise.

• Formal field assistance training time for instructor and participating technical personnel.

Details Out of Practice Area or Area to: Collection Division

Time of technical personnel detailed to Collection for activities including participating in the primary area's actions to protect the Government's interest in tax liabilities arising from special events such as rock music festivals, championship boxing promotions, and other entertainment or sports events.

Details Out of Practice Area or Area to: TE/GE

Time of technical personnel detailed to assist Employee Plan or Exempt Organizations.

Details Out of Practice Area or Area to: Grand Jury - Non Narcotics Related

Used by technical personnel detailed to Criminal Investigation (CI) and assigned to a Grand Jury investigation which does not involve narcotics related activities or participation in the Drug Enforcement Task Force Program.

Details Out of Practice Area or Area to: Grand Jury - Drug Enforcement Task Force Case

Used by technical personnel detailed to CI and assigned to a Grand Jury investigation involving the Drug Enforcement Task Force Program.

Details Out of Practice Area or Area to: Grand Jury - Narcotics Related - Other

Used by technical personnel detailed to CI and assigned to a Grand Jury investigation which involves narcotics related activities but does not involve participation in the Drug Enforcement Task Force Program.

Details Out of Practice Area or Area to: CI

Time of technical personnel detailed to CI not included in Activity Codes 815-817.

Details Out of Practice Area or Area to: Examination Branch Campus

Time of technical personnel while assisting Campus Examination on classification or other aspects of campus programs. Time applied to classification of area office programs is to be charged to Activity Codes 621-625.

Details out of Practice Area or Area to: Trial Assistance

Time applied to the preparation of cases for trial, including expert witness time and time applied to cases located in fraud suspense; applies only when the return is not assigned to an Examination group. Time spent on trial assistance on a return charged to an Examination group is charged to the activity code of the return.

Details out of Practice Area or Area to: Appeals Division

Time of technical personnel detailed to assist Appeals. Used when additional information is requested from Appeals and the case is not returned.

Details out of Practice Area or Area to: Headquarters

Time of technical personnel detailed to assist HQ office.

Details out of Practice Area or Area to: All Other

Time of technical personnel assigned to details other than time applied to Activity Codes 811–823, 827, and 828.

Details out of Practice Area or Area to: Disclosure

Time applied by employees assisting the Disclosure Officer. Employees who are appointed as part time Disclosure Officers or who are assigned on a part time basis to assist a full time Disclosure Officer will use this code. Full time Disclosure Officers will not prepare a daily time sheet. Examination personnel not detailed as a part time Disclosure Officer or not detailed to assist a full time Disclosure Officer will not use this code. Any time applications by non-detailed technical personnel will use Activity Codes 613 and 614.

Details out of Practice Area or Area to: Return Preparer Program

Time spent prior to assignment of returns for examination, such as activity in obtaining list of preparer's clients returns, assisting Criminal Investigation in identifying suspect preparers, time spent with special agents during interviews and obtaining witness affidavits, and Examination coordinator's time spent managing the program. Time spent on classification is not to be charged to this activity code.

General - Leave

All leave granted to technical personnel. This activity code requires a leave code. Valid leave (and SETR) codes are as follows:

• A - annual leave (59501)

• AA - advanced annual leave (59501)

• ADE - administration/employee relations (disciplinary) (59561)

• AS - advance sick leave (59502)

• BCO - building closure (other than weather) (59512)

• BCT - building closed, telework site unsafe (59514)

• BCW - building closure (weather) (59511)

• BD - blood donation (59568)

• BEN - benefits (59562)

• BOT - building open, telework site unsafe (59515)

• BOU - building open, conditions unsafe for travel (59513)

• C - court/jury duty (59565)

• CA - compensatory time off in lieu of overtime pay taken (59821)

• CAR - comp religious (59825)

• CAT - travel comp time in lieu of overtime (59824)

• CRT - credit hours taken (59831)

• CVA - COVID Vaccine Administrative (85540)

• D - bone marrow, organ donor (59575)

• EL - emergency leave transfer (59578)

• F - Federal Employees' Compensation Act (FECA) continuation of pay (COP) (on the job traumatic injury) (59505)

• FEA - FECA annual leave (59571)

• FER - FECA restored annual leave (59576)

• FES - FECA sick leave (59572)

• FLB - Family and Medical Leave Act (FMLA) leave bank hours (59523)

• FLT - FMLA leave transfer hours (59524)

• FMA - FMLA annual leave (59521)

• FMR - FMLA restored annual leave (59525)

• FMS - FMLA sick leave (59522)

• H - holiday (59503)

• HL - home leave earned overseas (59508)

• LB - use of leave share/leave bank (59509)

• LH - local holiday (used for Inauguration Day holiday for qualified employees) (59577)

• LT - leave share (59579)

• M - military (59506)

• ME - emergency military leave (59504)

• O - Other/administrative leave Miscellaneous (59566)

• OPM - Office of Personnel Management (59574)

• PBL - Parental Bereavement Leave (59553)

• PLA - Paid Parental Leave (PPL) Adoption Placement (59612)

• PLB - PPL Birth (59611)

• PLF - PPL Foster Placement (59613)

• R - Restored annual leave (59507)

• RL - relocation (59573)

• S - sick leave (59502)

• SAP - sick leave for adoption purposes (59529)

• SDT - self directed training (59564)

• SFB - sick leave general family bereavement (59527)

• SFM - sick leave general family medical (59528)

• SSH - sick leave family serious health (59526)

• TOA - time off for award (59540)

• V - voting (59567)

• VOT - volunteer activities (59563)

General - Leave without Pay

This activity code requires a leave code. Valid leave (and SETR) codes for LWOP are as follows:

• AW - unapproved leave (59841)

• L - LWOP, on board employee only (59811)

• LC - Office of Workers' Compensation Programs LWOP (59813)

• LFM - LWOP FMLA (59812)

• LS - AWOL suspension action (59845)

• LSF - LWOP seasonal furlough (59815)

Hours worked for Overtime, Credit Hours and Comp Time

Used to account for how an employee will be compensated for time worked over the employee's scheduled work hours. This activity code requires a time code. Valid ERCS (and SETR) time codes are as follows:

• CRW - credit hours worked (9)

• CW - comp hours worked (4)

• CWR - religious comp (R)

• CWT - comp for travel (T)

• FL - FLSA law enforcement (2)

• FS - FLSA overtime (2)

• FT - FLSA travel overtime (2)

• OT - overtime (2)

Total Direct Examination Time

The sum of time charged to Activity Codes less than 600. This is automatically generated on ERCS when the SETTS information is extracted.

Total Time (Direct and Non Direct)

The sum of all the time charged in the cycle, excluding Activity Code 840 (Hours worked for Overtime, Credit Hours and Comp Time). This is automatically generated on ERCS when the SETTS information is extracted.

Total Time Accounted for by Area Examination Division Personnel

Activity Code 903 time less the time charged to Activity Code 840. This is automatically generated on ERCS when the SETTS information is extracted. This is the total hours the employee worked during the cycle. It should match the number of hours the employee is scheduled to work in the same cycle.

No Program Monitoring Code. Used with records with Activity Codes 501-520, 522-529, 544-547, 549-559, 561, 562, 586, and 589–598.

Frivolous Filer/Non Filer Program. Returns with Project Codes 0310, 0311 or 0312.

LCC. Returns where the return has been identified on ERCS as a LCC return.

DIF/DIF Related. Returns with Source Codes 02, 05, 10, or 12.

Fraud/Enforcement. Returns with Source Codes 88, 89, or 90 or Project Codes 0001-0006, 0017, 0076, 0095, 0096,0135, 0133, 0146, 0147, 0216-0218, 0442, 0691, 1168, or 1261 or Status Codes 17 or 18.

Local Source. Returns with project codes in the area’s or practice area’s local file, "proj_uip". This code is also used as the default if the return does not fall into any other monitoring code group.

Campus Contacts/IRP. Returns with Source Codes 03, 04, 06, 08, 11, 14, 23, 25, 26, 48, 70 or 85.

Shelters. Returns with Source Codes 17 or 39.

NRP/ Compliance Studies. Returns with Source Codes 80 or 91 or Project Codes 0262, 0637 or 0675.

Training. Returns with Project Code 0204.

No Category - Returns not covered by Categories 1 thru 9 as defined below.

Fraud, Regular - Returns with Project Codes 0017, 0076, 0095, 0096, 0133, 0135, 0216-0218, 0146, 0147, 0442, 0691, 1168 or 1261 or Source Code 90 or Status Codes 17 or 18.

All SEP. Returns with Source Codes 88 or 89.

Joint Committee - Returns with Project Code 0077 or where the return has been identified on ERCS as a joint committee return.

FHWA - Fed State Motor Fuel Project. Returns with Project Codes 0137 or 0139.

Non Drug Enforcement Administration (DEA) Class 1 Violations - Returns with Project Codes 0004, 0005, or 0006.

DEA Class 1 Violations - Returns with Project Codes 0001, 0002, or 0003.

Compliance Research/Strategies - Returns with Project Codes 0674 or 0675.

Nonfiler - Returns with Source Codes 12, 24, 25, 44, or 65 or Project Codes 0149, 0154, 0156, 0277, 0437, 0438, 0449, 0453, 0655, 0669, or 1503 or TC 424 Push Codes 020, 021, 036, 037, 050, or 051.

Claims - Returns with a dollar or more in the amount claim field, or a Source Code 30 or 31, or an "AA" statute.

No Feature - Used for returns not covered by Special Feature Codes 1 thru 9 as defined below.

LCC Case - LCC Returns identified as the primary area of examination. Also applies to time charges to LCC returns if the examiner is assigned to the same PBC of the return. Only valid for Program Monitoring Code of 2.

NRP - Returns with Source Codes 80 or 91.

LCC Case - LCC Returns identified as the support area of examination. Also applies to time charges to LCC returns if the examiner is assigned to the different PBC than on the return. Although it is rare for a return to have this code, it is common for a time charge.

Narcotics Case - Returns with Project Codes 0001 or 0004.

Narcotics Case - Returns with Project Codes 0002 or 0005.

Innocent Spouse - Returns with Project Code 0014 or Tracking Code 9914.

Tax Shelters - Returns with Source Codes 17 or 39.

Compliance Studies - Returns Project Codes 0262, 0637, or 0675.

Foreign Controlled Corporation - This code is not set on the return, but on the ERCS time charge when time is charged by International Specialist (with Position Code 115) to returns which have international features.