5.1.18. Locating Taxpayers and their Assets

(1) IRM 5.1.18, Locating Taxpayers and their Assets provides guidance and information for revenue officers. The content includes information on how to access the national asset locator tool, real and personal property records, historical travel information, and credit bureau requests. The value and applicability of these taxpayer and asset locator procedures, services and sources depend upon the nature, complexity and the stage of each Collection investigation.

(1) 31 USC 3711(h), Collection and Compromise

(2) 603 of the Fair Credit Reporting Act 15 USC 1681a, Definitions; Rules of Construction

(3) 604 of the Fair Credit Reporting Act 15 USC 1681b, Permissible Purposes of Consumer Reports

(4) IRC 6103, Confidentiality and Disclosure of Returns and Return Information

(5) IRC 7602(c), Notice of Contact of Third Parties

(6) IRC 6321, Lien for Taxes

(7) IRC 6020(b), Execution of Return by Secretary

(8) IRC 7609, Special Procedures for Third-party Summonses

(9) Treasury Regulation 301.6323(f)-1, Place for Filing Notice; Form

(1) The Director, Collection Policy is the executive responsible for the policies and procedures to be employed by Collection personnel.

(2) Collection area directors, territory managers and group managers are responsible for ensuring compliance by Collection personnel with these procedures.

(3) Revenue officers conducting research using the locator tools and processes discussed in this section will observe the Taxpayer Bill of Rights listed in Publication 1, Your Rights as a Taxpayer, particularly with respect to confidentiality and privacy. See IRM 25.27.1, Third-Party Contact Program and IRM 5.1.1.12, Third-Party Contacts for more information on third-party contacts.

(1) Program Reports: Collection area directors and territory managers conduct operational reviews annually to evaluate program delivery and conformance to administrative and program requirements. Group managers use the Embedded Quality Review System (EQRS) to assist with periodic case and performance reviews as described in IRM 1.4.50, Resource Guide for Managers, Collection Group Manager, Territory Manager and Area Director Operational Aid. Collection managers utilize reports from EQRS to provide information for managerial use in guiding revenue officers to locate taxpayers and their assets. Collection managers of employees with access to the FinCEN Query system conduct annual online reviews using the audit trail report.

(2) Program Effectiveness: National Quality Reviews and consistency reviews are routinely conducted to measure consistency, efficacy, and compliance with policy and procedures. Trends reported in these reviews are used to promote and improve program effectiveness.

(1) Collection managers verify program and procedural compliance through case consultations, case reviews, and performance reviews. Collection manager’s internal controls are detailed in IRM 1.4.50, Resource Guide for Managers, Collection Group Manager, Territory Manager and Area Director Operational Aid.

(2) There are several program controls developed to oversee the various programs referenced in this IRM:

• Managerial approval is required for certain actions that include the requirement for specific locator source checks to be completed;

• Manager approval is required to issue a third-party summons to locate assets and records;

• Managerial approval is required for consumer credit report requests;

• Managerial approval through BEARS is required to access the online national asset locator tool;

• Managerial approval is required to obtain a passport check;

• Managerial approval is required to request entry of a taxpayer on TECS;

• Managerial approval through BEARS is required for direct access to FinCEN, and

• Managers review the annual audit trail for FinCEN Query request.

(1) This table below lists commonly used acronyms and their definitions.

(1) IRM Resources:

(2) Web resources:

(3) The Internal Revenue Code (IRC) provides taxpayers specific rights. The Taxpayer Bill of Rights groups these rights into ten fundamental rights. See IRC 7803(a)(3). IRS employees are responsible for being familiar with and following these rights. For additional information about your taxpayer rights, please see Pub 1, Your Rights as a Taxpayer, or visit www.irs.gov/taxpayer-bill-of-rights.

(1) You must comply with existing security and legal requirements regarding access to taxpayer data/information when you access taxpayer data, including locator services information. Relevant disclosure (IRM 5.1.18.2.1.1), privacy (IRM 5.1.18.2.1.2), and third-party contact procedures (IRM 5.1.18.2.1.3) apply when using these locator sources.

(1) The national asset locator tool is an important resource for locating taxpayers or their assets. This tool provides the capability of searching several asset/locator services, credit bureau services, and tax law research services, including the following public records:

• Real property

• Real estate transactions

• Corporate officers

• Vehicles and aircraft

• Information on people and businesses

(2) Servicewide Policy, Directives and Electronic Resources (SPDER) manages the national asset locator tool and contracts with various subscription search services. See https://irsgov.sharepoint.com/sites/raas/SitePages/Legal-and-tax-research-services-help-is-available.aspx.

(1) Headquarters will issue an Interim Guidance (IG) Memorandum (memo) to provide the most up-to-date guidance about a particular subject.

(2) Access Interim Guidance Directives from the Internal Management Documents Search Interim Guidance web page at https://imdtrack.web.irs.gov/search.aspx.

(3) Determine if an IG Memo provides more up-to-date guidance about a particular subject when you search the IRM.

(4) Consider adding the Internal Management Documents page to your list of internet favorites.

(1) Knowledge Management has developed a Servicewide Knowledge Repository – The IRS Virtual Library. This library has floors for various operating divisions of the IRS. Collection has a floor on the virtual library. Seehttps://irsgov.sharepoint.com/sites/ETD-KMT-VirtualLibrary/SitePages/Collection.aspx. Consider adding this site to your list of favorites in your internet browser.

(2) The Collection floor contains Knowledge Bases on topics related to collection. Each Knowledge Base has a section to engage with content creators and subject matter experts by using the sections on the page:

• FAQs

• Contact An Expert

• Provide Feedback

• Site Contacts

(3) Each Knowledge Base contains books and chapters that provide subsections of the topic. The information found within Knowledge Management contains information such as job aids or other reference materials that support day-to-day duties.

(1) The IRS has current corporate contracts for tax and legal research services. These services are managed by SPDER and provide the following:

1. An up-to-date, searchable web-based version of the Internal Revenue Manual (IRM) at https://irm.web.irs.gov/.

2. Primary and secondary federal tax resources, news, business, and legal on the ReferenceNet Legal and Tax Research Services at https://irsgov.sharepoint.com/sites/RNet.

(2) These electronic research services are fully linked to cited references which allow access to all tax law research material from one place.

(3) Follow the steps below if the information you seek is not reasonably available through the contracted subscription search services:

1. Use discretion and consider on a case-by-case basis what return information or PII (i.e., name, address or Employer Identification Number) needs to be entered when using public internet search engines.

2. See IRM 11.3.21.12, Internet Research.

(1) Local courthouse records often contain the most recent and accurate information regarding real and personal property, as well as other types of documents and information that merit or require official recordation.

(2) Courthouse records checks can be conducted online if you have access to the index of transactions and copies of the actual documents. If the IRM requires a courthouse records check and you do not have the ability to research both the index and the actual documents online, make a field visit to perform a courthouse records check.

(3) Make a field visit to perform a courthouse records check in-person prior to a seizure. See IRM 5.10.1.5.3.3, Equity Determination - Verify Ownership and Identify Encumbrances.

(4) Treat all data secured from locator services as sensitive but unclassified (SBU) data.

(1) Title reports provide the following information:

• Liens and Judgments — Listing of recorded property liens, tax certificates, and claims against the property.

• Legal — Full real estate legal description.

• Current Owner — Identification of the actual owner of the subject property and ownership structure (i.e., joint, individual, trust, etc.).

• Purchase Price / Date — Reveals what the current owners paid, seller information, and deed document details.

• Mortgage Amount — Mortgage details for open loans against the property with lender name, amounts, and dates. Copy of current deed showing conveyance with abstract of all current liens, mortgages, and recorded documents.

(2) Secure a title report as provided in your area.

(1) Limited Liability Company (LLC) Information is maintained by each individual state's Secretary of State, or equivalent, often in the same database as corporation records. These organizations provide information regarding the date of organization and the members and/or managers of the LLC.

(2) Information available from state records may assist you in identifying if a taxpayer is liable for certain employment taxes. See IRM 5.1.21, Collecting from Limited Liability Companies, for additional information.

(1) An address change resulting from the NCOA^Link update generates a unique Transaction Code (TC) 014 (Address Change) and document locator number (DLN). All DLNs created by NCOA^Link have a common DLN format:

• IMF — XX 2 63 995 999 99 Y

• BMF — XX 9 63 995 777 66 Y

• EPMF — XX 0 63 995 777 66 Y

Note: "XX" represents the File Location Code (Internal Revenue Service Campus (IRSC) Code). "Y "represents the year of the NCOA^Link update.

(1) The only appropriate use of Form 4759, Address Information Request - Postal Tracer is to request information from USPS. Form 4759 can be used to:

• Confirm the Master File address of record when the Letter 725-B is returned undeliverable, and an observational drive-by field call indicates that the taxpayer is unable to locate or unable to contact at that address.

• Obtain a possible non-Master File address for the taxpayer when the Letter 725-B is returned undeliverable.

(2) NCOA^Link substantially reduces the need for using Form 4759 but does not eliminate the need for using Form 4759. You may obtain valuable information in response to Form 4759, which may not be included on returned mail:

1. Change of address date

2. Forwarding order expiration date

3. Expired forwarding address(es).

(3) Form 4759 is helpful as USPS will:

• Provide the forwarding address on returned mail for 12 months

• Confirm whether mail is delivered to the taxpayer at that address

• Provide the new address if the address was changed within the past 48 months.

(4) USPS mail carriers may provide additional useful information. The carrier may annotate the returned correspondence with an extra note, such as "moved two years ago," "gone for over five years," or other information that will assist you in establishing the "timeline" of various addresses. USPS will:

• Provide the forwarding address on returned mail for 12 months.

• Provide the forwarding address for 48 months in response to Form 4759.

(5) USPS will take one of the following actions when you send correspondence to one or several alternate addresses:

1. Forward the correspondence to the taxpayer but not send you notification of a new address.

   Note: Form 4759 may be helpful since it may provide new address information (if mail was forwarded) or confirm whether mail is delivered to the taxpayer at that address.

2. Return the correspondence to you with the annotation "Forwarding order expired," if it has been more than 12 months since the forwarding order was filed.

   Note: Form 4759 may be helpful because it may provide the new address if the address was changed within the past 48 months.

3. Return the correspondence to you with the annotation "Moved, left no forwarding."

(6) Do not use Form 4759 to verify a taxpayer's Master File address. This will add more processing time and postal costs to our cases without providing value. The taxpayer's Master File address will be updated by NCOA^Link if the taxpayer has submitted a change of address form to USPS within the previous 48 months.

(7) Confirm the Master File address in accordance with paragraph (5) of IRM 5.16.1.2.1, Unable to Locate and Unable to Contact, before you close the case with TC 530 when you have made a field call and verified the taxpayer is UTL or UTC at the Master File address of record.

(8) Follow the procedures below when it is necessary to send Form 4759 to the USPS.

(9) Use Form 4759 to obtain the physical address of a Post Office (PO) Box holder from USPS.

(10) Refer to IRM 5.1.18.11.2.3, Verify Possible Non-Master File Addresses, to appropriately use Form 4759 in other situations.

(1) This IRM subsection provides strategies and information for locating a taxpayer.

1. Requesting assistance to locate a taxpayer's address

2. Private mailbox companies

3. Tracking online mail

(1) Do not update the Master File address with information received from Form 4759 unless the taxpayer provides clear and explicit written or oral notification as provided by Rev. Proc. 2010-16.

(2) Updating a taxpayer's address with a new address received from a third party, even when verified by a postal tracer, is not permitted without that notification. See IRM 5.11.1.3.2.1, Last Known Address.

(1) To request a copy of the passport file:

1. Prepare Letter 4263 to request a passport check. See IRM 5.1.18.12.1.1, Preparing Letter 4263.

2. Obtain managerial approval/signature via secure email.

   Note: To signify approval, your manager will digitally sign the PDF file of Letter 4263, include your email address on the "Cc" line, and send the email message, including the digitally signed Letter 4263 as an attachment, to the International Passport coordinator at "*SBSE International Passport Coordinator "via secure email.

3. Send an email message to "*SBSE International Passport Coordinator" if you need to contact the coordinator.

   Reminder: Be sure to send any email message via secure email when you include Sensitive but Unclassified (SBU) taxpayer data in the message.

(1) The International Passport coordinator will send the information obtained from the passport application on Form 14223, Taxpayer Locator Information Request.

(1) Use any new address or new asset information received from the passport office as discussed above.

(2) See IRM 5.21.7.4, Mutual Collection Assistance Requests (MCAR), if you determine that the taxpayer:

1. Resides in a treaty country, or

2. Has assets in a treaty country.

(1) International and domestic taxpayers can be placed on the TECS lookout indicator list. For domestic taxpayers consideration should be given if it is believed the domestic taxpayer travels frequently outside the U.S. or Commonwealth Territories and contact cannot otherwise be made. Information derived from DHS can facilitate contact with the taxpayer or discovery of asset information which may facilitate payment of the outstanding liability.

(2) Consider using TECS to place the taxpayer on the TECS lookout indicator list early in the case. If the taxpayer does not provide the information requested by your deadline, and the case meets the criteria to be placed on TECS, enter the taxpayer on TECS for a lookout indicator. The following example is an illustration of how using TECS early in the case could help in your casework.

(3) Some of the information from a TECS lookout is time sensitive and requires immediate action by the RO and/or GM. The following example is an illustration where the GM and the RO took immediate action.

(1) Taxpayer’s name, date of birth, place of crossing, date and time of crossing, and document number can be disclosed to the taxpayer and/or their representative.

(1) Access the TECS web page on the Collection Floor of the Virtual Library, International Tools and Actions Knowledge Base, Travel Record Tools book. See https://irsgov.sharepoint.com/sites/ETD-KMT-KB110.

(1) The TECS coordinator:

• Will coordinate the investigation of TECS cases,

• Is responsible for informing SB/SE Collection group managers and revenue officers upon receipt of notifications of imminent taxpayer arrival into the U.S. from DHS.

Note: The TECS coordinator will open an OI or courtesy investigation on ICS to input the TECS lookout information. If the case is archived on ICS, the TECS coordinator will create a case on ICS and open an OI or courtesy investigation and input the TECS lookout information in the ICS case history.

• Will review all cases referred from revenue officers requesting that a taxpayer be entered on TECS to ensure that they meet the TECS lookout indicator criteria,

• Maintain a spreadsheet of taxpayers placed on TECS, and

• Will handle the referred cases as displayed in the following table:

(2) The table below describes the actions the TECS coordinator takes for accepted referrals and referral that do not meet TECS criteria.

(3) Contact the TECS coordinator via email at: *SBSE International TECS Coordinator.

(1) Once the TECS coordinator notifies the GM and RO of the TECS lookout information, and the case is assigned to a revenue officer, the revenue officer will analyze the information and take prompt action as needed. This may include attempting contact with the taxpayer or issuing an Other Investigation (OI) to have a RO at the taxpayer’s location contact the taxpayer. See IRM 5.1.8, Courtesy Investigations, for procedures on creating and working Courtesy Investigations.

(2) If the case is closed, the GM will determine whether assignment of the case within their group or issuance of an OI to the location of the taxpayer is warranted. If no action will be taken on the information secured by DHS, the GM will document the ICS case history with the reason no action is being taken regarding the TECS lookout information.

(3) Once the GM or RO has determined the appropriate action to take on the information secured by DHS, the GM or RO will advise the TECS coordinator whether the taxpayer will be retained or removed from the TECS lookout indicator list.

(1) DHS will notify the TECS coordinator when U.S. Immigration and Customs Enforcement (ICE) becomes aware that a balance due taxpayer on TECS is arriving in the US.

(2) DHS may provide the TECS coordinator with some or all of the following information:

• The taxpayer's address while in the United States

• Nature of visit

• Transportation of any currency over $10,000.00

• Any other available travel and/or asset information.

(1) Entering a taxpayer on TECS allows DHS to notify the IRS in the future (via TECS coordinator) about when and where a taxpayer has entered the United States.

(2) Use TECS information to facilitate the collection of delinquent liabilities from taxpayers.

(3) Follow the procedures below to request that a taxpayer be entered on or removed from TECS.

(1) TECS also is a database that tracks historical travel information about taxpayers. This IRM subsection provides guidance for using the historical travel information available in TECS. This information may also help you attempt taxpayer contact and/or locate asset information as it can contain extensive records of commercial airline flight arrivals and departures. TECS also contains other records of air and sea travel, records of border crossings, and the specific dates that individuals have traveled to and from the United States.

(2) The travel information in TECS can facilitate collection of delinquent liabilities from taxpayers who are not subject to ordinary administrative and judicial collection procedures because they often reside outside the jurisdiction of the US Courts.

(3) TECS provides information that may not otherwise be available to the IRS, such as where a taxpayer has traveled. This travel information may lead to the discovery of where the taxpayer has assets or conducts business activity. Additionally, TECS travel information can help determine the taxpayer's correct country of current residency.

(4) TECS provides information in the following ways:

• Employees can query TECS for historical travel information as discussed below.

• The IRS may also receive "current" travel information from the TECS coordinator when taxpayers with a TECS lookout indicator are traveling into the United States, as was discussed above (IRM 5.1.18.13.1, TECS Lookout Indicators).

(5) Use TECS historical travel information to do the following:

1. Learn possible address information to attempt taxpayer contact or identify assets

2. Determine a taxpayer's status regarding their contention regarding US residency or non-residency

3. Confirm the validity of information on the taxpayer's returns or collection information statement .

Note: TECS historical travel information will provide both U.S. entrance and exit information for U.S. Citizens, resident aliens and non-resident aliens.

(6) You can request TECS historical travel information on any taxpayer case. You do not have to have a BAL DUE case with a Notice of Federal Tax Lien on file. You can request TECS historical travel if you only have a DEL RET case and where requesting the information would be helpful in your investigation.

(1) Use secure email (encrypted messages) to transmit any request for historical TECS travel information.

(2) Use secure files and folders to store any TECS travel information.

(3) Stamp all historical travel information retrieved from TECS " OFFICIAL USE ONLY" if you receive a hardcopy not already stamped as such or if you create a hardcopy.

(4) Maintain the security of TECS travel information at all times.

(1) Advise the taxpayer to do the following if a taxpayer asks how you learned about their past travel:

1. Write a letter requesting source information under the Freedom of Information Act (FOIA)

2. Send the letter to the address provided at The U.S. Customs and Border Protection website: https://www.cbp.gov/site-policy-notices/foia.

(1) TECS contains information about specific dates of past international travel and locations of travel for individuals over a period of several years. It has extensive information concerning airline travel and also contains some information on other modes of travel into the US. A request for this information will provide the revenue officer (RO) with all travel information that is available; there is no need to specify particular time periods of travel.

(2) Note the following examples of how TECS historical travel information may be helpful to you:

(3) Use any new address or new asset information received from TECS research as discussed above in IRM 5.1.18.13.11, Using TECS Historical Travel Information.

(4) See IRM 5.21.7.4, Mutual Collection Assistance Requests (MCAR), if you determine that the taxpayer:

1. Resides in a treaty country (which are Canada, Denmark, France, The Netherlands, Japan or Sweden), or

2. Has assets in a treaty country.

(1) Prepare Form 13931, TECS Historical Travel Request, for submission to the TECS coordinator and include the following information:

• Taxpayer Name (Last, First, Initial)

• Known Alias(s)

• SSN

• Place of Birth (City & State or Country)

• Passport Number

• Citizenship (if not U.S.)

(2) Input "Request For TECS Historical Travel Information" in the subject line of the email.

(3) Include all applicable, available information about the traveler on Form 13931.

(4) Send the Form 13931 via secured email to your group manager for approval and signature.

(5) Once managerial approval and signature has been secured, send Form 13931 via secure email to the TECS coordinator at *SBSE International TECS Coordinator.

(1) The FCQ system provides authorized users with access to currency and other Bank Secrecy Act reports, such as the following:

• Currency Transaction Report (CTR) - Cash transactions over $10,000

• Report of Foreign Bank and Financial Accounts (FBAR) - Foreign bank accounts with a total value over $10,000

• Designation of Exempt Person (DOEP)

• Registration of Money Services Businesses (RMSB)

• Report of International Transportation of Currency and Monetary Instruments (CMIR)

• Report of Cash Payments Over $10,000 Received in a Trade or Business (Form 8300)

• Suspicious Activity Report (SAR)

(1) Once the briefings have been completed, submit a BEARS request for the application titled: SYS USER FINCEN QUERY SYSTEM -IRS COLLECTION FUNCTIONS (FINCEN QUERY -CURRENCY AND BANKING RETRIEVAL SYSTEM).

(2) After the RO submits the BEARS request and it is approved, the IRS Collection Division Agency Coordinator will create the user’s account in the FinCEN Portal. See Exhibit 5.1.18-3, FinCEN Query Authorized User Training and Access Procedures, for next steps in finalizing access to the FCQ system.

(1) FCQ information is useful in identifying cash activity that may not be accurately reported on the income tax return or disclosed on financial statements. FCQ information is a "window" on the underground economy, with invaluable information not obtainable elsewhere.

(2) Authorized users have the ability to select from one of four search options and use enhancements, such as filters, wild cards, operators and import lists, to facilitate search efforts. Revenue officers can refer to the FCQ User Manual for guidance in interpreting FCQ extracts. The FinCEN User Manual is located under the Training/Help Tile on the FinCEN Portal home page.

(3) New search justification data fields must contain the following:

• Agency Reference box: acceptable language includes “IRS Official Matter”, “IRS Collection Division Investigation” or the RO can use a personalized letter/number combination, such as a case control number, so long as it does not contain SBU data or PII information.

• Brief Description box: acceptable language includes “IRS Official Matter” or “IRS Collection Division Investigation”.

(4) For additional information refer to the FinCEN Collection Requests book on the Collection Investigation Tools Knowledge Base on the Collection Floor of the Knowledge Management Virtual Library.

(1) The internal sources for CARS are as follows:

• Information Returns Master File (IRMF) for W-2 and 1099 information (IRP)

• FTD Levy Program (FTD) for BMF deposit information

• Remittance Processing System (RPS) for information on payments made through service centers

• Federal Contractor File (FCF)

• Electronic Filing System (ELF)

• Federal Payment Levy Program (FPLP)

(1) The external sources for CARS are as follows:

• State employment commissions (EC)

• Office of Personnel Management (OPM) for federal employees

• United States Postal Service (USPS) for postal employees

• Defense Manpower Data Center (DMDC) for retired federal employees (military or civil service)

(1) The Taxpayer Information File (TIF) can hold a maximum of fifteen levy sources. The type of source is identified by a literal. This literal appears on the far right of the levy source screen.

(2) The TIF levy sources are re-prioritized when a new levy source is added to the TIF.

(3) The TIF levy sources have the following literals and priority:

1. FCF — Federal Contractor File

2. FPLP — Federal Payment Levy Program

3. RT — Real time non-wages sources manually loaded to IDRS

4. EC, FTD, RPS, DMDC, OPM, and USPS

5. RT — Real time Wage Sources

6. ELF — Electronic Filing System

7. IRP — Information Reporting Program

(4) IRP has the following additional priorities:

1. INT — interest

2. W-2 — wage document

3. 1099-R — document

4. CTR — Currency Transaction Report

5. All other documents

(1) Some businesses have multiple locations but want all levies sent to one centralized address. You may be contacted by a levy recipient or other business contact to provide a centralized address.

(2) Handle any request for centralized address as follows:

1. Load the centralized address information into the centralized address subroutine of CARS when you initially create and upload the levy source address to IDRS, or

2. Update the levy address on ICS to the centralized address for the specific case.

   Note: When you update ICS for the specific case, that update will not upload the centralized address information to IDRS.

(1) The Fair Credit Reporting Act (FCRA), an amendment to the Consumer Credit Protection Act in effect since April 24, 1971, defines those individuals and organizations who are entitled to receive consumer credit information. The FCRA further defines the nature and extent of the information which can be given out by these consumer reporting agencies.

(2) The FCRA was intended to apply only to reports relating to a consumer's eligibility for personal credit or commercial benefits as a consumer and not to the consumer's business transactions. Accordingly, the FCRA does not restrict the availability of consumer credit reports of corporations, partnerships or trusts.

(3) See IRM 5.17.6.9, Fair Credit Reporting Act, for further information.

(4) Do not violate the FCRA. Unauthorized access to credit bureau data is a violation of the FCRA. The Act provides both civil and criminal penalties for obtaining information under false pretenses and for unauthorized disclosure by officers and employees of the consumer reporting agencies.

(5) An unauthorized access occurs when you obtain a consumer credit report that does NOT involve efforts to collect assessment liens as provided under IRC 6321, or the use of a summons, IRM 5.1.18.19.2.7, Summons for Credit Information.

(6) Report any and all willful violations of the FCRA to TIGTA.

(1) Order a consumer credit report to receive information about a particular taxpayer only to collect a BAL DUE assessment as provided in IRC 6321. You may request and obtain a consumer credit report if such an assessment exists and you are attempting to collect it on behalf of the IRS.

(2) Do not access credit reports for any person when there is no open BAL DUE or combination BAL DUE/DEL RET. See IRM 6.735.1.1.4, Ethics and Conduct Matters: Guidance, Related Resources, regarding conflicts of interest.

(3) Do not attempt to secure consumer credit reports on DEL RETs or Other Investigations (OIs) that do not include BAL DUEs unless you serve a summons.

(4) Do not attempt to secure consumer credit reports on a NON-BAL DUE SPOUSE, except in those instances where the taxpayers reside in a community property state. (See IRM 5.1.18.19.2.2, Non-liable Spouse).

(5) You cannot secure a consumer credit report using a foreign address. See IRM 5.1.18.19.2.1, Credit Bureau Requests for Foreign Taxpayers, below for further information on obtaining credit reports on taxpayers with foreign addresses.

(6) In combination (combo) cases (i.e., cases with both a BAL DUE and DEL RET for the same taxpayer), the consumer credit report can only be used to assist in collecting on the BAL DUE portion of the assignment.

(7) Do not order or use a consumer credit report to establish the basis for an assessment under IRC 6020(b) or the Substitute for Return Program (SFR).

(8) Do not order or use a consumer credit report as the basis for a referral to Examination or Criminal Investigation.

(9) If a consumer credit report is needed as the basis for a referral to the Examination or Criminal Investigation or as the basis for an SFR assessment, you must issue a summons per IRC 7609 to obtain one. (See IRM 5.1.18.19.2.7, Summons for Credit Information below.)

(10) Become familiar with consumer credit reports.

1. Learn to use consumer credit reports appropriately and effectively.

2. Interpret the data correctly.

3. Use the consumer credit report data, including the subscriber information, to locate taxpayers and/or their assets.

(11) Credit reports are limited to one request per taxpayer every 30 days. Use discretion and consider on a case-by-case basis the need to request multiple credit reports on the same taxpayer.

(1) Access to the national contract credit bureau is controlled by the credit bureau web browser.

(2) To ensure compliance with the Fair Credit Reporting Act, IRS policy limits access to consumer credit report data to employees who:

• Are authorized to access the credit bureau web browser

• Are gathering information to assist in collecting an assessed BAL DUE.

(1) A digital asset account or wallet generally provides its owner or custodian with the ability to store the public and private keys and thus to control the ability to transfer those digital assets. Wallets can be digital (software) or physical (hardware) and can be connected to the internet (hot) or disconnected from the internet (cold). Wallets can be custodial (hosted) or non-custodial (unhosted). Non-custodial (unhosted) wallets are sometimes referred to as self-hosted or self-custodial wallets.

• Both the public and private keys are a long string of random alphanumeric characters. Every public key is paired with a corresponding private key and together, they are used to encrypt and decrypt data.

• The public key is like a bank account number and can be shared by the owner to receive digital assets.

• The private key is like a bank account password or PIN and should be kept secret because it’s used to transfer the digital assets.

(2) Some owners use the services of a custodial (hosted) wallet provider that stores their public and private keys. A hosted wallet provider may also maintain balance information, provide cybersecurity services, and facilitate the owners’ ability to own, and conduct transactions using, digital assets.

(3) Other owners do not use the services of a custodial (hosted) wallet provider and instead store private keys in a software program, often referred to as a non-custodial (unhosted) wallet, or written record. In general, only the user of a non-custodial wallet has access to both the public and private keys necessary to effect transactions of the digital assets associated with those keys.

(4) A digital asset wallet is needed to perform certain actions such as buying and selling digital assets or interacting with decentralized applications. Many wallets have quick response (QR) codes and near-field scanner technology that allow users to scan a code, select an amount, enter the key, select the transaction fee, and transfer the digital assets.

(5) A third-party custody service offers a way to store digital assets without the responsibility of managing the private key. An example is a Virtual Asset Service Provider (VASP) or trading platform also referred to as an Exchange. A VASP is a business that conducts one or more of the following actions on behalf of its clients: exchange between digital assets and fiat currencies, exchange between one or more forms of digital assets, transfer of digital assets, safekeeping and/or administration of digital assets or instruments enabling control over digital assets, and participation in and provision of financial services related to an issuer’s offer and/or sale of digital assets. A VASP can be either centralized or decentralized.

1. A trading platform that provides a custodial (hosted) wallet service and maintains control over both the public and private keys with the assets under their control may sometimes be referred to as a centralized exchange (CEX). ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ A CEX generally charges a transaction fee and often accepts payments by debit or credit card, wire transfers, money orders, digital assets or other payment methods. The CEX oversees the transactions and establishes the rules and fees.

2. Some digital asset trading platforms do not have access to the private keys and, therefore, do not take custody of their users’ digital assets. These platforms may sometimes be referred to as decentralized exchanges (DEX). Owners of digital assets using these non-custodial (unhosted) digital asset trading platforms can buy, sell, and trade digital assets directly with others using automatically executing contracts (called smart contracts) to ensure that transactions are executed as agreed.

3. Many DEX do not truly embody decentralization. A considerable portion of these platforms are under the control of a small number of individuals or investors. Generally trading platforms are categorized into two distinct types: custodial (hosted) and non-custodial (unhosted). The concept of centralization and decentralization exists on a spectrum.

(1) Digital assets may be identified through normal collection investigative techniques which include interviews, bank or credit card analysis, summons and investigations. Appropriate research may be required when digital assets are confirmed or suspected (e.g., IDRS, FinCEN, and Abusive Schemes Tracking and Reporting System (ASTARS)).

(2) While interviewing the taxpayer to secure a Collection Information Statement (CIS) inquire about ownership in digital assets (e.g., convertible virtual currency and cryptocurrency such as Bitcoin, Ethereum, or Litecoin; stablecoins such as Tether and USD Coin; and NFTs).

1. It’s important to establish a taxpayer’s exposure to and understanding of digital assets. This includes asking questions directed at understanding what terminology is used by the taxpayer when referring to digital assets. Make sure the taxpayer understands the term digital assets includes convertible virtual currency, stablecoins, NFTs, and any other digital representations of value that is recorded on a cryptographically secured distributed ledger or any similar technology.

   Example: If the taxpayer refers to a specific digital asset (e.g., Bitcoin), ask additional questions directed at understanding whether the taxpayer deals only in that specific digital asset or any other digital assets.

2. Ask the taxpayer probing questions to determine their level of involvement with digital assets (e.g., received as payment for goods or services, used to pay expenses such as rent or payroll, investment, operating a mining rig, etc.). Additional questions may be required, based on the taxpayer’s answers.

   Example: You ask the taxpayer if they or their business transact in digital assets. If yes, then ask if they or their business sold any goods or services in exchange for digital assets that were never converted into U.S. dollars or fiat currency. If yes, then ask how much and what type of digital assets they are currently holding and what trading platform they go through and the types of digital asset wallets they have.

   Example: You ask the taxpayer if they or their business use a smart contract. If yes, then ask for what purpose and what are the terms of the smart contract. Ask for the public key and the nature of the tokens used and request the summary ledger showing the transactions. This may be a potential levy source. See IRM 5.19.4.3.5.2, Levy on Virtual Currency.

(3) While conducting bank and/or credit card statement analysis, look for words that identify a digital asset exchange or marketplace showing the taxpayer is buying and/or selling digital assets. Also, review online payment systems that allow digital asset transfers. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ You want to conduct a “follow the money” approach when digital assets are located.

(4) Digital assets aren’t financial assets. They aren’t cash, they don’t represent an ownership in an entity, and they don’t provide a right to receive cash or another financial instrument. Instead, they are generally considered an intangible asset and would be recorded at acquisition cost (e.g., price paid, or consideration given).

1. Look for digital assets on the business balance sheets and income statements (aka profit and loss statement) and ask the taxpayer questions to clarify any digital asset reporting (e.g., received as payment for goods or services, used to pay expenses such as rent or payroll, investment, operating a mining rig, etc.).

2. A business that accepts digital assets might have a QR code near the cash register and/or advertise the type of digital asset they accept on their website. IDRS command code (cc) IRPTR may show Form 1099-K, Payment Card and Third Party Network Transactions, Form 1099-B, Proceeds from Broker and Barter Exchange Transactions, or Form 1099-MISC, Miscellaneous Information, relative to businesses that use and/or invest in digital assets.

3. Digital assets can be transacted in a centralized or decentralized manner. Centralized transactions are regulated by a centralized repository (like a digital asset trading platform) with a central administrator. The administrator oversees all the transactions and establishes the rules and fees.

4. If a business or individual participates in a mining pool or receives staking rewards the income may be reported on Form 1099-MISC, Miscellaneous Information, or Form 1099-NEC, Nonemployee Compensation, and will be located on IDRS cc IRPTR. This may be a potential levy source. See IRM 5.19.4.3.5.2, Levy on Virtual Currency.

(5) Research the Compliance Data Warehouse (CDW) Knowledge Graph Environment (CKGE). Look for the virtual currency alert, represented by a green wallet. It will appear on the Return and SSN Nodes. When present, it means the taxpayer confirmed digital asset involvement by checking “Yes” on the Form 1040, U.S. Individual Income Tax Return, digital asset question. Interview the taxpayer and ask probing question concerning digital assets.

(6) Review Financial Crimes Enforcement Network (FinCEN) for Suspicious Activity Reports (SARs). The VASPs must comply with the Bank Security Act (BSA) standards, including being registered as a money service business. FinCEN SARs are filed by VASPs to report suspicious activity that might signal criminal activity (e.g., digital asset related money laundering, tax evasion).

1. The SAR might contain information to assist in your investigation (e.g., the taxpayer’s email address, the transaction ID/hash or digital asset wallet address used in the buy/sell transactions, and a possible nexus). The additional information located can be used to do additional FinCEN research.

2. If a transaction ID/hash or digital asset wallet address is located, contact a digital asset SME to conduct a blockchain analysis to follow the funds. This research may lead to a potential levy source.

Note: ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(7) Research the Offshore Compliance Initiatives Information Database (OCI) aka Abusive Schemes Tracking and Reporting System (ASTARS). It contains account and transactional records on taxpayers with a financial interest in specific offshore financial centers, commonly called “tax havens.” It also contains account records from certain VASPs. If information from a VASP is located, you will want to ask the taxpayer about it and/or issue a summons to the VASP to obtain the most current information. See IRM Exhibit 25.5.2-15 for sample wording on the summons. This database can be used in identifying possible assets and hidden income that can be used to satisfy a tax deficiency. The VASP is a potential levy source. See IRM 5.19.4.3.5.2, Levy on Virtual Currency.

(8) Review IDRS cc RTVUE and look for the Virtual Currency Code (VCC). The VCC is numeric and is one character in length. When present, it means the taxpayer confirmed digital asset involvement by checking “Yes” on the Form 1040, U.S. Individual Income Tax Return, digital asset question. Interview the taxpayer and ask probing questions concerning digital assets. The VCC codes are:

• 0 is the default if no box is checked

• 1 is present if the “yes” box is checked

• 2 is present if “no” box is checked

• 3 is present if both the “yes” and “no” boxes are checked

(9) Research the taxpayer’s current (and prior) Form 1040, U.S. Individual Income Tax Return, to identify digital assets as potential levy sources. For example, the taxpayer can receive digital assets through staking or mining rewards which are treated as other income. This may be a potential levy source. See IRM 5.19.4.3.5.2, Levy on Virtual Currency.

(10) Research Open-Source Intelligence (OSINT) information. OSINT is publicly available information that is gathered and available to analyze. People often place their digital asset footprint alongside their social media footprint. A wealth of valuable information can be uncovered and used to determine collectability. It may lead to unknown eCommerce transactions and business entities with links to the direct source of the information.

1. Search the internet using both the taxpayer’s personal and business name. Look for news articles, websites, or other information to see if you can identify if they use and/or accept digital assets or talk about non-fungible tokens they may have purchased or are selling.

2. If you locate a website, look for any public keys. Also, look to see if they utilize smart contracts.

   Example: OSINT information is used for research and information located shows the taxpayer mentioned they purchased an expensive NFT on a public social media discussion group and plans to sell it at an upcoming digital asset conference in Las Vegas. The taxpayer listed their public key to their digital asset wallet that will be used for the sale of the NFT. This may be a potential levy source. See IRM 5.19.4.3.5.2, Levy on Virtual Currency.

(11) If the taxpayer is uncooperative, you will want to issue a summons to any third parties (e.g., VASPs or digital asset marketplaces). They can provide information on financial institutions, credit cards, or investment accounts that are linked to the taxpayers’ digital assets. See IRM Exhibit 25.5.2-15 for sample wording on the summons.

1. The statement from a VASP might reflect a zero balance. It’s important you contact your area digital asset SME to conduct a blockchain analysis on some of the higher digital asset transactions to follow the funds. This can lead to potential levy sources. See IRM 5.19.4.3.5.2, Levy on Virtual Currency. You may need to issue additional summonses as needed. See IRM Exhibit 25.5.2-15 for sample wording on the summons.

   Note: The IRS cannot issue a summons directly to any individual or entity located outside the U.S. If you are seeking foreign-based information refer to IRM 25.5.8.5, Records Outside the United States, and contact the EOI Program to determine what information could be obtained through a request for information under an international exchange agreement.

(12) Contact your area digital asset SME with any questions you have concerning digital assets. They have received specialized training and are available to assist with complex digital asset issues and can guide you with the next steps to take in your collection investigation. Contact information is located in the Servicewide Compliance Programs - Digital Asset Knowledge Base.

1. The digital asset SMEs have access to third party blockchain tracing software and can conduct blockchain analysis that can lead to potential levy sources (e.g., a NFT purchase or additional VASP). See IRM 5.19.4.3.5.2, Levy on Virtual Currency.

Example: You contact a digital asset SME to have them do blockchain analysis using the statement you received from a VASP. Information is located showing the taxpayer moved digital assets to another VASP. You can issue a summons and levy to the newly located VASP based on the analysis provided.

(1) IDRS command code RTVUE will indicate that a taxpayer has filed Form 8938. The "CC CD" indicator (or Computer Condition Code) will include an "H" to indicate that Form 8938 was filed. If Form 8938 has been filed, ESTAB the return or use the Employee User Portal (EUP) to view the foreign account or asset listed on the form. Information derived from Form 8938 is considered return information provided by the taxpayer and its disclosure requirements are consistent with general case processing.

(1) An employee in the Field Collection or Specialty Collection programs may request Form 8966 FATCA Report data research on their assigned taxpayer case by sending an encrypted email request to their Super User (listed at: FATCA Super Users-Collection) with a completed FATCA Information Request for Collection Employees. The form is available at: FATCA Information Request-Collection.

(2) Prior to requesting Form 8966 FATCA Report data, employees must complete course number 82470, SBC:FC Foreign Account Tax Compliance Act (FATCA) for Revenue Officers, which will assist you in determining applicable treaty restrictions on the use and disclosure of the information. Course completion must be recorded in the requesting employee’s Learning History in the Integrated Talent Management (ITM) system.

(1) Approval from Automatic Exchange of Information (AEOI) must be secured prior to submission of any suit recommendation or criminal fraud referral containing any Form 8966 FATCA Report information. The AEOI office may request consent from the host country to use the Form 8966, FATCA Report, or coordinate with the Office of Associate Chief Counsel (International) in connection with civil litigation or a criminal proceeding. Please see IRM 4.60.1.10, Automatic Exchange of Information (AEOI) Program, for additional information.

(1) CKGE is provided by the Data Management Division (DMD) of Research, Applied Analytics, and Statistics (RAAS).

(2) Executive level approval is required for access to CKGE. The user requesting access must complete the RAAS Logical Access Request (RLAR) Template and forward through their management chain to secure first-level executive approval. The RLAR and instructions can be found on the Compliance Data Warehouse web page at https://cdw.web.irs.gov/newsAlerts/recertify.aspx. The IRS Executive Biographical Information page (http://hco.web.irs.gov/apps/sprc/dev/IRSExecAlpha.asp) can assist in determining the appropriate executive to approve.

(3) Include the signed RLAR as an attachment to the BEARS access request. The entitlement to request CKGE in BEARS is PROD ELEV PII CKGE MAIN GRAPH (RAAS DMD).

(4) Access to CKGE is through the CKGE Main Graph Portal at https://ckge.enterprise.irs.gov/. The site uses login from the user’s SmartID and PIV for access. No separate password is required.

(5) The CKGE Manager Audit Module (CMAM) is available to front line managers an internal control for review of employee search history in CKGE.

(1) CKGE provides the ability to interact with connected data. This can help to quickly identify compliance issues that should be addressed, and to support effective case actions based on the information. A search in CKGE can be an efficient way to quickly visualize useful information and may identify related information that would not be easily found in other collection research.

(2) Research on CKGE can help to visualize and identify:

• Bank accounts, wage, and income sources

• Spousal and dependent relationships

• EIN applications

• Ownership relationship to other businesses or entities

• Real property

• Tax return information

• Employer and employee relationships

• Address information from the USPS delivery point (zip codes)

(3) The CKGE graph visualization can help a financial analysis determination by visualizing the flow and relationship of the taxpayer to other assets, businesses or income. CKGE research can be beneficial in investigations that address non-compliance such as pyramiding, concealment of assets, or potential badges of fraud. In situations where a revenue officer has been unable to contact a taxpayer, this tool may help provide new leads, or support that all previously identified sources have been appropriately exhausted.

(4) Within the graph visualization, nodes related to the taxpayer can be expanded or filtered down to assist in prioritizing the most relevant information. CKGE includes reports within the nodes that can view groups of information (such as W2 & 1099 records or Form 941/944 returns). Alerts use picture images and color schemes to identify account indicators such as categories of balances due, FATCA records, bankruptcy, CTR info, CI freeze codes, etc.

(1) Information located in CKGE comes from the Compliance Data Warehouse (CDW), which sources data from existing IRS databases and external sources, then outputs the search results viewable in an interactive graph. Users have the ability to export the graph images and data from their search.

(2) CKGE is only a respository of records, it is not a primary source of information and does not create any original records. The official/authorized source of reference would be the actual forms or registration systems that the data originated from. CKGE outputs do not serve as official records. When records are needed to support collection actions, the underlying source documents should be secured from the appropriate IRS systems. IDRS will often be the production system that would be cited as the source for the CKGE data displayed.

(3) Access to information in CKGE is subject to UNAX guidelines and must only be researched in connection with specific and assigned cases. Queries in this system are logged and systemically shared with Cyber IT. The RO will ensure that the ICS history is documented with specifics of the research including what nexus of information was identified and details of the searched information.

(4) Do not provide CKGE prints of graphs or tables to taxpayers or representatives pursuant to IRC 6103, IRC 7213, and IRC 7431 as these prints may contain tax return information of other taxpayers.