4.10.15. Report Generation Software

(1) This IRM provides requirements and instructions for using RGS and CEAS.

(1) In keeping with the Federal Records Act of 1950, as amended, and pursuant to Title 44, USC 3102, the IRS established the Records and Information Management (RIM) program to ensure the economical and efficient management of its records. RIM provides IRS business units with records and information guidance that can be used to efficiently run their organizations as required by National Archives and Records Administration (NARA) laws and regulations, including guidance for storing and managing records through the use of electronic storage such as approved record keeping systems. CEAS is an approved electronic record keeping system that meets the record keeping and records retention requirements established by the NARA.

(2) 36 CFR Chapter XII, Subchapter B - 1222.34 - How must agencies maintain records?

(3) 36 CFR Chapter XII, Subchapter B - 1236.20 - What are appropriate record keeping systems for electronic records?

(4) 44 USC Chapter 31

(1) The Director, Examination Headquarters, is the executive responsible for providing policy and guidance for field employees and ensuring consistent application of policy, procedures and tax law to effect tax administration while protecting taxpayers’ rights. See IRM 1.1.16.5.5, Examination Headquarters, for additional information.

(2) The Director, Examination Field and Campus Policy (EFCP), reports to the Director, Examination Headquarters, and is responsible for the delivery of policy and guidance that impacts the field examination process. See IRM 1.1.16.5.5.1, Examination Field and Campus Policy, for additional information.

(3) Field Examination General Processes (FEGP), which is under the Director, Examination Field and Campus Policy, is the group responsible for providing policy and procedural guidance on standard examination processes to field employees. See IRM 1.1.16.5.5.1.1, Field Examination General Processes, for additional information.

(4) All examiners must perform their professional responsibilities in a way that supports the IRS Mission. This requires examiners to provide top quality service and to apply the law with integrity and fairness to all.

(5) Examiners, their managers, and clerical support staff should thoroughly acquaint themselves with the procedures and information contained in this IRM.

(1) Area Functional Automation Support (FAS) staff can create various reports by area, if needed. Reports address:

• Cases that have been closed on Examination Returns Control System (ERCS) to Centralized Case Processing (CCP), but have not been closed to CCP on RGS.

• Cases that have been closed on ERCS to Technical Services, but have not been closed to Technical Services on RGS.

• Cases that have been closed on AIMS, but remain open on RGS.

• Cases open on RGS, but there is no record on ERCS in status 12-18.

• Cases open on ERCS in status 12-18, but not open on RGS or in the wrong group on RGS.

• Cases that have not been backed up to the file server for an extended period of time by the examiner.

• Cases open on RGS that are large (usually over 50 MB).

(1) Employees in SB/SE Field Examination and LB&I WEIIC are required to use RGS and CEAS to create, maintain, and store electronic examination case files. Access to RGS and CEAS is restricted to employees who have a documented, valid business reason to access examination case files and requires an approved Business Entitlement Access Request System (BEARS) entitlement. Managers complete access reviews annually in BEARS to recertify their employees’ continued business need for the RGS/CEAS entitlement.

(2) Annually, FEGP will recertify employees who have the CEAS Universal Access entitlement (see IRM 4.10.15.4 (4)) to ensure the employee still has a business need for access.

(3) CEAS users are assigned permission levels to ensure users can only access and/or make changes to examination case files to accomplish their normal and recurring work assignments.

(1) The table lists commonly used acronyms and their definitions:

(1) The following table lists commonly used terms and their definitions used throughout this IRM.

(1) The Report Generation Software (RGS) & CEAS book on the Exam Systems Knowledge Base (KB) is the main online resource for all employees who use RGS and CEAS. The book contains a variety of information to assist users such as news articles, frequently asked questions, contacts, training material, and quick reference guides. Chapters and pages (articles) from the RGS and CEAS book are linked to throughout this IRM.

(2) The Electronic Case Procedures book on the Exam Procedures KB contains supplemental information, resources, and tools for maintaining and closing RGS electronic case files. Pages (articles) from the Electronic Case Procedures book are linked to throughout this IRM.

(3) Additional IRM sections examiners may reference for procedures related to RGS include:

• IRM 4.10.2, Pre-Contact Responsibilities

• IRM 4.10.8, Report Writing

• IRM 4.10.9, Workpaper System and Case File Assembly

• IRM 4.10.10, Standard Paragraphs and Explanation of Adjustments

• IRM 4.10.11, Claims for Refund, Requests for Abatement, and Audit Reconsiderations

• IRM 4.10.16, Examination Operational Automation Database (EOAD)

• IRM 4.10.27, Identity Theft Case Processing for Field Examiners

• IRM 4.22.6, Examination of Individual Income Tax Returns

• IRM 4.63.4, International Individual Compliance Examination Procedures

(1) RGS support consists of FAS staff, CCP Functional Automation Coordinators, and the Customer Service Liaison team.

(2) Each SB/SE area FAS staff consists of RGS coordinators, RGS specialists, and a Functional Automation Coordinator (FAC) who support users located within their specific geographical area. The LB&I WEIIC FAS staff supports users throughout the country. The FAC’s primary role is to maintain user access to CEAS through the Business Entitlement Access Request System (BEARS) application. FAS staff duties include:

• Troubleshooting RGS and CEAS issues (NOT technical tax issues)

• Providing education on the use of RGS/CEAS processes and procedures in the classroom or other settings

• Interacting with other functions including CCP, Technical Services, Appeals, and IT Desktop Support; and preparing monitoring reports for the area

(3) CCP Functional Automation Coordinators support the users in CCP.

(4) The Customer Service Liaison team (Technology Solutions, RGS Support) supports FAS through a variety of programs and ensures all users have the RGS tools and training necessary to perform their duties. The group’s responsibilities include the following:

• Developing and delivering RGS/CEAS training for users

• Coordinating independent testing of RGS versions and identifying programming changes to improve the functionality of the program

• Coordinating with other teams to support RGS such as Examination Policy, NRP, EOAD, CCP, and IT

(1) The examiner’s CEAS inventory must match their ERCS inventory. The examiner must create cases on RGS upon updating the case to status code 12 on AIMS/ERCS.

(2) CEAS users must back up their RGS inventory to the CEAS file server on the same workday any work is performed, or documents are saved in RGS. This ensures the most recent case information is available on the CEAS file server. Inventory backup is important to safeguard the contents of each case and ensure the current case is available for electronic review.

(3) When a case is backed up, all files (Word®, Excel®, Access®, Adobe®, etc.) stored within Office Documents (OD) and Case File Documents (CFD) are included in the backup. When a user initiates a backup, the system will backup cases that have been accessed since the last backup; however, the examiner may select additional cases for backup. See Backup RGS Inventory for more information about backing up inventory to the CEAS file server, including helpful tips to avoid problems with backing up. Additionally, see IRM 4.10.15.10 (5) for information on how case file size can affect inventory backups.

(4) Case inventory must be moved when an examiner leaves their assigned group. If an examiner:

• moves to another field examination group within the same area and the case inventory is transferring to the new group, refer to Moving to a New RGS Group for instructions.

• leaves their revenue agent (RA) or tax compliance officer (TCO) position, moves to another area, or moves to another business function, the examiner must move their entire RGS inventory to the CEAS file server and verify all cases were properly moved and no "M" hold codes exist.

• is unable to move the inventory, managers should refer to Retrieving RGS Cases from Separated Employee’s Computer for instructions on retrieving the data.

(1) The FAS staff should be contacted for assistance when an RGS or CEAS issue cannot be resolved. The employee should document the problem in the case activity record including the contact with FAS staff.

(2) Generally, RGS issues do not cause a work stoppage for all cases being worked in RGS. Examiners may still access other taxpayers’ data and complete workpapers for other taxpayers while an issue is being reviewed by FAS.

(3) The FAS staff should be contacted immediately if the RGS program stops functioning on the hard drive.

(1) Managers/clerks can retrieve closed cases from CEAS archives when necessary (e.g., for claims, audit reconsiderations, and appeals requests). The case must be returned to archives the same day it is retrieved if it is not controlled by the group. Original audit data must NOT be altered.

1. If information from a prior audit is needed, the case may not need to be retrieved from archives. CEAS users can view certain case information stored on the CEAS server using View Case. See CEAS View Case.

2. If the case is not controlled on ERCS, see Working Cases Not Controlled by Your Group on ERCS.

3. If the case is an audit reconsideration, see Audit Reconsideration Cases and RGS.

4. If Appeals requests assistance on a case which is NOT controlled by the group, see Working Cases Not Controlled by Your Group on ERCS.

5. If Appeals returns a case and releases control to the group, the manager/clerk must retrieve the case from archives and assign it to the examiner to continue the examination.

(2) Users who have access to CEAS View Case can review case documents online. See IRM 4.10.15.11 for how to use CEAS to view case documents.

(3) Users who do not have access to CEAS View Case must have appropriate authority to request case information.

1. If requesting a single RGS case, follow Procedures to Request RGS Cases/Files.

2. If requesting multiple cases (e.g., for a project), contact the FEGP Program Manager to establish a procedure.

3. If requesting EOAD data, contact the EOAD analyst.

(1) Cases created in error on RGS and CEAS must be deleted. To delete a case created on RGS and CEAS in error, the group must email the FAS staff requesting the case be deleted from the CEAS file server.

1. Managerial approval is required for all deletion requests. The group manager can email the FAS staff directly to request the case deletion or the examiner/administrative support staff can obtain managerial approval by email and then forward the request to FAS.

2. The email to the FAS staff must include a narrative explaining why the case needs to be deleted (e.g., wrong taxpayer identification number (TIN) used, wrong tax period established).

3. The FAS staff will not delete a case from the CEAS file server unless it is clear the manager approved the deletion request and a valid reason for deleting the case is provided.

(2) See Deleting Taxpayers from RGS for additional information.

(1) Transfers within the SB/SE area: Once the current examiner moves the case to CEAS file server, the manager/clerk reassigns the case to another group within the area. See IRM 4.11.29.10, Transfer of Return Within Area, for additional information.

(2) Transfers out of the SB/SE area: Once the current examiner moves the case to CEAS file server, the manager/clerk archives the case. The receiving area will retrieve the case from archives and assign it when appropriate. See IRM 4.11.29.11, Transfer of Return Outside Area, and Transfers to Another Area on CEAS for additional information.

(3) Transfers from campus: Contact the FAS staff to obtain a case from a campus.

(1) Examiners must add or modify the data in Case Information as necessary or as indicated below:

1. Taxpayer name: Update for separated taxpayers or taxpayers with multiple names. For examples, see the FAQ for different last names.

2. Taxpayer telephone number: Enter the most current telephone number. Multiple telephone numbers may be entered.

3. Taxpayer address: Enter all known addresses. The "This is a current address" box must be checked for the appropriate address. If joint taxpayers are separated or divorced, enter addresses for each person using the primary or secondary address options.

4. Potentially dangerous taxpayer: Check the box when appropriate.

5. Extended due date and received date: Enter appropriate dates.

6. Statute Date: If Form 872, Consent to Extend the Time to Assess Tax, is received extending the statute, enter the extended statute date. Otherwise, the statute date is automatically calculated from the extended due date field or return received date field, whichever is later.

7. Filing state and filing zip code: Enter appropriate information.

8. North American Industry Classification Code System (NAICS) code: Enter the code found on BMF returns (Form 1065, Form 1120, and Form 1120S).

9. Form type: Change to another form in the same series as necessary.

   Example: A Form 1040-PR case is created as a Form 1040 in RGS so that CFOL data will populate Return Setup, Case Information, and Contacts (see Create a Form 1040PR in RGS). After the case is created and CFOL data populated, the form type is changed to Form 1040-PR from the Case Information screen.

(2) All case Information as shown above must be manually entered for generic workcenter cases.

(3) See Case Information in RGS and How to Update RGS Case Input Fields for additional information.

(1) Examiners must enter return preparer information if disclosed on the return.

1. A "to be completed" (TBC) contact, populated by CFOL during case creation (see IRM 4.10.15.6) must be updated with the preparer’s name and address.

   Note: The TBC contact may be deleted if the preparer is also the representative and the "Representative is also the preparer" check box is selected.

2. "Illegible" is an acceptable entry if the name cannot be determined.

3. If only an employer identification number (EIN) is provided, enter 000-00-0000 as the preparer taxpayer identification number (PTIN).

(2) Examiners must enter representative information from Form 2848, Power of Attorney and Declaration of Representative, Form 8821, Tax Information Authorization, or other document.

1. Enter the name, address, phone number, and tax periods covered for each representative.

2. When a taxpayer notifies the examiner that representation has been revoked, select the "Revoke Index" check box for the applicable tax period on the Contacts screen. To preserve the audit trail, do not delete the entry.

3. Update the representative information as additional years are picked up for audit.

(3) Examiners should enter case contact and examination team member information, if applicable.

(4) All contact information must be manually entered for generic workcenter cases.

(5) See Contacts for additional information.

(1) Examiners use Form 9984, Examining Officer's Activity Record, to document case activity. See IRM 4.10.9.5, Activity Record. However, examiners may use Case History in RGS in lieu of Form 9984. Users (examiners, managers, reviewers, etc.) must use caution when using Case History because the entries can be lost.

(2) If Case History is used, examiners must create and save a new Case History Report (PDF file) each time an entry is made. The Case History Report is available from the Reports menu. CEAS users must back up to the CEAS file server each time a new RGS Case History Report is saved per IRM 4.10.15.3.1 (2).

(3) Case History may also be used to enter information about third party contacts during the examination. Once data is entered, the Form 12175, Third Party Contact Report Form, can be created from the Reports menu.

(4) Case History is available in the generic workcenter.

(1) Information from Form 1040 series returns is entered manually or populated by CFOL. For Form 1065, Form 1120, and Form 1120S, information is entered manually since CFOL is not available for these returns. Examiners must:

1. Enter the data as required or verify the fields to ensure all are complete and correct even if there is no variance with CFOL data. Incomplete Return Setup, including the detail screens, may result in an incorrect examination report. For example, the student loan interest deduction requires that the total interest paid be entered in a detail screen for that return item. The total interest paid is not entered on the tax return and therefore not populated by CFOL.

2. Include changes posted to the taxpayer’s Master File account (e.g., by a subsequent return, amended return, claim, prior adjustments, or examinations) in the respective fields.

3. Ensure adjusted gross income, taxable income, credits, and total tax match the taxpayer’s account on Master File (use TXMODA).

(1) Shareholder and partner information is entered in Shareholder Setup and Partner Setup respectively, in the Form 1120S/1065 workcenter. Examiners must enter Schedule K-1 information for each year for:

• TIN

• Name

• Address

• Ownership percentages

(1) Before issues are entered, examiners must run a variance analysis for Form 1040 and Form 1120 to verify the accuracy of the Return Setup data. Any differences to the computed amounts are shown in the variance column. All variances must be resolved or identified as a "true variance" (rare).

(2) Most variances result from input errors or incomplete data in Return Setup. If variances exist, take the following actions:

1. Go back to Return Setup and correct any errors or supply missing data. Additional information may be required from the taxpayer to complete certain fields.

2. Run the variance analysis again to see if all variances have been resolved.

   Note: A variance analysis must be run every time the Return Setup is modified.

3. If a variance still exists, click on "Issues" (under the Workpaper/Adjustments in the workcenter menu) to generate the administrative issues (if not already created) and then run a tax computation to generate an examination report. Use the report and the supporting schedules to determine the origin of the variance.

   Note: It is important that the administrative issues are generated prior to running a tax computation. Otherwise, the administrative issues will not automatically create and must be manually added.

4. Run the variance analysis again to see if all variances have been resolved.

5. If the variance(s) still exists, contact the FAS staff for assistance in resolving the variance(s).

(3) A "true variance" may exist when there is a mathematical error or omission that was not corrected by the Campus when the return was processed. Document the reason for the "true variance" in the workpapers or activity record.

(4) Since a variance analysis is not available for Form 1120S and Form 1065, examiners must run the shareholder or partner distributive share computation and create an "All Items" report prior to entering any adjustments. Use this report to verify the accuracy of Return Setup and Partner/Shareholder Setup. Rename (see IRM 4.10.15.10.1) and save this shareholder or partner report to CFD as the variance report.

(5) The Return Setup and Variance chapter in the RGS and CEAS book has multiple articles about variances that examiners may refer to when trying to resolve a variance.

(6) Examiners must save the final variance report to CFD. If a physical (i.e., paper) administrative case file is required, the final variance must also be printed and included in the paper case file.

(1) All workcenters in RGS include an IDR application, which can be used to prepare a properly formatted Form 4564, Information Document Request. RGS populates the header with the taxpayer’s information and footer with the examiner’s information. The IDR application in the Form 1040 workcenter includes a focused IDR option, which is used to populate issue-specific text in the IDR.

(2) Examiners must save all IDRs (RGS generated and manually prepared) issued to the taxpayer to CFD. If a physical (i.e., paper) administrative case file is required, all IDRs must also be printed and included in the paper case file.

(3) Examiners may create an IDR log report from the "Reports" menu.

(1) Examiners must open and save the Administrative screen to populate the header information of the Form 4318, Examination Workpapers Index.

(1) Examiners must create issues and properly complete required fields for a correct examination report and to capture EOAD data. See IRM 4.10.16, Examination Operational Automation Database (EOAD).

(2) To ensure accurate data capture, examiners must create separate issues for different line items on the tax return. See IRM 4.10.16.1.1, Requirements for Completion of EOAD Data. This includes issues like not-for-profit activities (hobby losses), fictitious Schedule C or F, rental expenses, etc. For example, examiners cannot use "net profit or loss" to combine all the issues and make only one entry/adjustment.

(3) Instructions for unique situations requiring special procedures (e.g., delinquent or substitute returns, audit reconsiderations, not for profit activities, passive activities, alternative minimum tax, etc.) are posted in the Issue-Specific and Special Procedures chapters in the RGS and CEAS book.

(1) Examiners assess penalties either on specific issues or the entire return. Refer to IRM 4.10.6, Penalty Considerations, and the IRM penalty handbook sections (IRM 20.1.2, Failure to File/Failure to Pay Penalties, IRM 20.1.3, Estimated Tax Penalties, and IRM 20.1.5, Return Related Penalties), for when to assert the appropriate penalties.

1. Assert issue-related penalties (e.g., accuracy-related and fraud) within the issue in RGS. These penalties apply only on the tax related to that particular issue.

2. Assert return-related penalties (e.g., failure to file, estimated tax, and accuracy-related) through the workcenter menu. These penalties apply to the total corrected tax.

   Note: Manually computed penalties should only be used in rare circumstances. See Manually Computed Penalties or contact the FAS staff for assistance.

(2) When penalties are asserted, examiners must create a separate issue in RGS to document the assertion of the penalty. Penalty issues are created using specific IMF/SAIN codes. See Documenting Penalties - Creating A Penalty Issue for instructions on how to create and categorize a penalty issue. Also see IRM 4.10.9.8.6, Workpapers: Documenting Penalties, for additional information.

(1) Examiners must run a tax computation and/or share computation before generating an examination report.

1. For Form 1040 and Form 1120 returns, run the "Tax Computation."

2. For Form 1120S returns, run the "Pro Rata Share/Tax Computation."

3. For Form 1065 returns, run the "Distributive Share Computation."

(2) When "Other Information" is required on the Form 1040 examination report, the information is entered in the "Tax Computation" screen. See IRM 4.10.8, Report Writing, for specific situations.

(3) Examiners must ensure the interest rate table in RGS is up-to-date before running a tax computation. Generally, interest should be computed and shown on a proposed deficiency report. When IRC 6404(g) applies, the examiner must check the 6404(g) box in tax computation (Form 1040 workcenter) and a statement will print on the examination report. See IRM 20.2.7.8, IRC 6404(g) Interest Suspension, for when 6404(g) applies. If examiners are unable to compute interest, such as in the case of restricted interest, they must provide an explanation in the "Other Information" section of the Form 4549. See IRM 4.10.8.14.3.4(5), Restricted Interest, and IRM Exhibit 4.10.8-1, Preparation of Form 4549 / Form 4549-A, for required comments on cases with restricted interest.

(4) A new tax computation is required if there are changes to Return Setup, the return received date, adjustments, or penalties. A new tax computation is also required when a new version of RGS is released after tax computation was run in a prior RGS version, but before the final Form 5344 is validated. This is because certain required transaction codes or reference numbers (e.g., credit reference numbers (CRN) for adjustments made to tax credits) may not populate on Form 5344 when the form is created in the new RGS version but the tax computation was run in an older RGS version. See Closing Cases After an RGS Version Release.

1. If a new tax computation is completed after the Form 5344 was validated, the Form 5344 must be revalidated. See IRM 4.10.15.8.13.

2. If a new tax computation is completed after the Form 3198 was created, the Form 3198 must be recreated.

(1) Examination reports are available from the Reports menu. The most commonly used reports are listed in the table below:

1. The reports are populated based on information entered in RGS. Examiners must ensure the report is accurate before issuing it to the taxpayer. Incorrect categorization or inaccurate per return and per exam amounts can result in an inaccurate report.

2. Taxable income per return or as previously adjusted and tax shown on the return or as previously adjusted must match Master File. Examiners must verify these amounts using a current TXMODA, IMFOLT, or BMFOLT.

3. Examiners must save all reports issued to the taxpayer or representative to CFD. See IRM 4.10.15.10 (2). Also see IRM 4.10.8.2.2, Preparation of Audit Reports, for information required for a complete report.

   Note: Signed reports received by e-fax as Adobe documents must also be saved to CFD.

   Note: If the signed agreement forms are scanned, the complete signed report should be scanned and saved to CFD.

4. Examiners should select the no-change report for Form 1040 and Form 1120 returns when applicable. For Form 1065 and Form 1120S cases, required no-change language (see IRM 4.10.8.3.1, No-Change (No Adjustments), must be manually input in the "Remarks" section on the "Create Report" screen. Refer to the FAQ for No-Change Report for 1065 and 1120S Instructions.

5. Partially agreed cases require two reports. See IRM 4.10.8.6, Partially Agreed Cases, and Partial Agreements and RGS.

(2) Form 4318 is available under "Workpaper/ Adjustment" on the Reports menu and is populated based on information entered in RGS. Examiners must review the form and if any item needs to be modified, return to the appropriate screen within RGS. Examiners must only save the final version to CFD and name the file following the appropriate naming conventions as described in IRM 4.10.15.10.1.

1. A validated Form 5344 populates the total time shown on Form 4318.

2. Representative contact information populates from the Administrative screen. See IRM 4.10.15.8.8.

3. A list of issues created from the "Issues" application on the workcenter menu will display on Form 4318.

   Note: Issues (including penalty and miscellaneous issues) must be created from the "Issues" application. Do not add issues directly to the Form 4318.

4. The examination issues (affecting the tax or share computation) and adjustments shown on Form 4318 should reconcile to the examination report.

(1) Examiners must ensure Form 5344, Examination Closing Record, is accurate and validated for all examined cases as an inaccurate Form 5344 can result in an incorrect assessment posting to a taxpayer’s account. Tax computation or share computation must be run before accessing the Form 5344 application in RGS.

1. When completing Form 5344 in RGS for paperless electronic closures, select the "Paperless "option in the "Closed on (choose one)" field of the "TC12/Interest Dates" tab. This will generate the correct blocking series 10X (protested cases) or 40X (all other closure types, e.g., agreed, unagreed, no-change) in the TC 300 DLN that identifies the case as electronic only with no physical administrative (i.e., paper) case file.

2. Review Items 12 and 15 for taxable returns and Item 34 for nontaxable returns to ensure the correct tax, penalties, and credits are assessed or abated. Refer to Document 6209, IRS Processing Codes and Information, for identification of appropriate transaction, reference, penalty reference, and credit reference codes.

3. Refer to IRM 4.4.12.5, Examined Closings, and the RGS Form 5344 - Help Sheet for SBSE for assistance with individual Form 5344 entries.

(2) Partially agreed cases require one Form 5344 for the agreed portion and one Form 5344 for the unagreed portion. RGS only prepares a Form 5344 for the agreed portion of a partial agreement. Follow the procedures in Partial Agreements and RGS, IRM 4.4.12.2, Partial Assessments, and IRM 4.4.12.5, Examined Closings, to prepare both required forms.

(3) Examiners must preview and save Form 5344 to CFD after validation. The Form 5344 saved to CFD and the printed Form 5344 (when required) must reconcile with the entries in the RGS "Form 5344 Examination Closing Record" screen. The amounts on the electronic and printed Form 5344 must agree with the examination report. Generally, no manual changes are permitted to any item (e.g., Item 12 (transaction codes), Item 15 (reference numbers), etc.) on the final Form 5344.

(4) Technical Services and other groups, which access the RGS data, must review and revalidate the Form 5344 to ensure accuracy before closing. See IRM 4.10.15.12.1 (6) for additional requirements for Technical Services employees.

(5) For information about Form 5344 for generic workcenter cases, refer to IRM 4.10.15.9.

(1) Form 3198, Special Handling Notice for Examination Case Processing, partially populates based on information in RGS. Not all required information will populate, therefore examiners must complete or modify any fillable field in the Adobe file as necessary. Examiners must save the completed form to CFD.

(2) Form 3244-A, Payment Posting Voucher, is available for payments received from the taxpayer. If used, examiners must save a copy to CFD.

(3) Form 3198 and Form 3244-A can be completed in RGS for generic workcenter cases.

(1) Examiners may access "Waivers" for miscellaneous forms not found elsewhere in RGS. If used, examiners must save a copy of the forms to CFD. Some of the forms included are:

• Form 870, Waiver of Restrictions on Assessment & Collection of Deficiency in Tax & Acceptance of Overassessment

• Form 2797, Referral Report of Potential Criminal Fraud Cases

• Form 13496, IRC Section 6020(b) Certification

(1) A compliance evaluation is required on all examined returns, including no-change cases. Examiners must ensure the final compliance evaluation is validated, printed (if required for a paper case file), and saved to CFD. See IRM 4.10.16, Examination Operational Automation Database (EOAD).

(1) Examiners may access Correspondence to prepare letters that are populated based on information entered in the case in RGS.

(2) Examiners must save communications with the taxpayer, representative, or a third party to CFD, whether or not the documents were created in RGS. Emails should be saved using Adobe.

(3) Examiners must save any taxpayer letter to be issued by CCP to CFD.

(1) Examiners may create Form 433-D, Installment Agreement, in the Form 1040 workcenter in RGS. The form is populated based on information initially entered in RGS as well as financial and employment information that is added on the installment agreement screen. Examiners must verify the populated information and add additional information to the form as required. See IRM 4.20.1.4.5, Complete Form 433-D, Installment Agreement, for additional information.

(1) Examiners may use the "General Income" option on the workcenter menu under "Special Applications" to reconcile Information Returns Processing (IRP) and Information Returns Master File (IRMF) income items (e.g., interest income, wages, etc.) to the tax return. RGS automatically creates a new issue for any adjustments identified in General Income. Changes to these adjustments must also be made using the General Income option. The adjustments cannot be changed in the Issues screen.

(1) This subsection provides instructions for specific naming conventions that must be used for all documents and subfolders saved to OD and CFD in the RGS electronic case file. Naming conventions contribute to an organized case file and assists users in easily locating specific documents. Examiners should refer to the RGS File Naming Conventions job aid for supplemental guidance and additional examples for the instructions provided in this subsection.

(2) All documents in OD (including zipped files) must use the following file naming convention: [Reference code] - [Document number] - [Descriptive Name].

1. The reference code (also commonly referred to as an issue number) is the three-digit code RGS assigns to the issue (e.g., 100 through 400 for administrative issues, 4XX for classified issues, 5XX for new issues, 6XX for miscellaneous issues). See IRM 4.10.15.8.9.1.

2. The document number is the sequential two-digit numbering (e.g., 01, 02, 03, etc.) of all related documents associated with a particular reference (issue) code. Document number "01" is generally reserved for the issue lead sheet.

3. The descriptive name of lead sheets and issue workpapers must include the issue name (e.g., Car and Truck Expense, Bad Debt Expense, etc.). See Lead Sheets and Workpapers in RGS for instructions on renaming lead sheets. The new name populates the footer of the lead sheet after the issue is saved.

(3) If workpapers supporting multiple issues are in one Excel workbook, the workbook must be saved to OD using the following naming convention: "WORKBOOK - [Descriptive name]". The descriptive name should include the tax year and reference codes for workpapers included in the workbook. The worksheets (tabs) in the workbook should be named to include the reference code, document number (in sequential order), and a brief descriptive name for each workpaper.

(4) All documents in CFD (including zipped files) must use the following file naming convention: [Category Name] - [Descriptive Name]. The RGS File Naming Conventions job aid includes a list of required category names and the documents to save under each category name.

(5) In addition to the category and descriptive names, files saved to CFD may also require a reference code in the file name. The file name of items required to be indexed using a "6XX" reference code must begin with the applicable "6XX" reference code assigned to the issue. Examples of items requiring a "6XX" reference code include (not all-inclusive):

• Bipartisan Budget Act of 2015 (BBA) check sheets and forms. See IRM 4.31.9.2(9), General Guidelines.

• Tax Equity and Fiscal Responsibility Act (TEFRA) check sheets and forms. See IRM 4.31.2.3.5(5), Mandatory Completion of Check Sheets.

• Investor Level Statute Control (ILSC) check sheets and forms. See IRM 4.31.5.2(2), ILSC Pass-through Entity Defined.

• Disaster compliance relief determinations. See IRM 4.2.2.6(2), Compliance Relief Determination.

(6) Additionally, Technical Services employees must include "TS" and PSP employees must include "PSP" at the end of the file name of all documents saved in OD or CFD. This will ensure documents created and/or saved in the case file by Technical Services and PSP staff are easily identifiable and will prevent a possible overwrite of similarly named documents saved by the Field group.

(7) Case file indexes for electronic case files (see IRM 4.10.9.11, Case File Indexing) must be named as specified below. Refer to Create Case File Indexes job aid and RGS File Naming Conventions job aid for additional information and examples.

1. The file name must always begin with a prefix that includes reference code "000," the two-digit document number (the document number for the original index should always be "01"), and "OD" or "CFD" (depending on the folder for which the index is being created) (e.g., "000-01-OD", "000-01-CFD").

2. The file name must include the date the index was created.

3. Additional indexes created by Technical Services or PSP must have "TS" or "PSP" added to the end of the file name.

(8) Form 4318, Examination Workpapers Index, saved to CFD (see IRM 4.10.9.11, Case File Indexing) must begin with the prefix "001-01."

(9) Generally, examiners must not use special characters (e.g., code section symbol, pound sign, question mark, comma, apostrophe, ampersand, Spanish characters with accents or tildes, etc.) in the file name of documents or subfolders saved in OD and CFD. See Special Characters in File Names for additional information, including the limited special characters allowed in file names.

(10) Examiners must be mindful of the length of the file name. Windows® limits the length of file names to 255 characters. The name of a file saved in RGS also includes the characters in the name of the folder (OD or CFD) and subfolder where the file is stored. Excessive characters in a file name may cause problems with moving the case to the CEAS file server and viewing case documents in CEAS View Case. See Subfolders in RGS.

(1) All information needed to support audit findings and process a closed case must be saved in the RGS case file. Examiners must perform the following steps before forwarding the electronic case file to the manager for closure:

1. Ensure the statute date shown in the RGS case information screen is correct.

2. Confirm all necessary lead sheets, workpapers, forms, reports, letters, taxpayer correspondence and any relevant documents are correctly named, signed (if applicable), and saved in OD and CFD. See IRM 4.10.15.10 and IRM 4.10.15.10.1.

3. Follow guidance in IRM 4.10.15.10 (5) for reducing the size of the case file.

4. If the RGS case file is larger than 400 MB, notate the Special Features section of Form 3198, Special Handling Notice for Examination Case Processing, by checking the box for "Other Instructions" and including the following statement: "Large case file. CCP should not merge the RGS file into inventory. Manual closure is required." See Closing Large Cases (Larger than 400 MB) for more information on closing large cases.

5. Back up the case to the CEAS file server before moving the case to the CEAS file server.

   Caution: Before backing up the case to the CEAS file server in preparation of forwarding the case to the group manager for closure, the examiner must determine if the case needs to be split and take necessary actions to split the case. See paragraph 2 below.

6. Immediately address RGS error messages received during the backup process. Examiners should contact the FAS staff if needed.

(2) The case must generally be split if one or more years are closed separately (e.g., one no-change (no adjustments) year and one unagreed deficiency year). See IRM 4.10.8.7, Splitting Multi-Year Examination Cases, for additional information and exceptions. Also see CEAS and Splitting Case Files for how to split a case in RGS.

(3) The examiner must complete the "Case forwarded to the file server/date" field on Form 3198 and move the case to the CEAS file server. RGS error messages received when moving the case should be immediately addressed. Once the case is moved to the CEAS file server, the examiner should notify the group manager that the case has been moved to the CEAS file server and is ready for closure.

(4) When closing cases, examiners must ensure the most recent data is moved to the CEAS file server successfully. If the case does not leave the Case Management screen, the electronic data did not move to the CEAS file server and a hold code "M" will be placed on the case. See RGS Inventory Clean Up and Hold Codes for actions to take.

(5) See IRM 4.10.15.12.2 (5) for required steps to take if the examiner receives documentation relevant to the case after the case is closed out of the group.

(6) When closing a case, Technical Services employees must update the disposal code for the final closure on Form 5344, validate, print (if required), and save the form to CFD.

(1) The manager is responsible for ensuring the examiner completed the appropriate case closing procedures and successfully moved the case to the CEAS file server. The examiner certifies, and the manager initials, that the case has moved successfully by indicating on Form 3198 the "Case forwarded to the file server/date."

(2) Prior to closing the case out of the group, the manager must review the case for accuracy and completeness. Closed cases display on the manager’s Close/Review screen. Managers may review the entire electronic case by merging the case from the Close/Review screen. Managers may also use CEAS View Case to review documents saved in OD and CFD without merging the case. See IRM 4.10.15.11 and CEAS View Case. At minimum, managers must take the following actions for all cases before the case is closed out of the group:

1. Verify the appropriate disposal code is present on the Close/Review screen. If no disposal code is present, Form 5344 was not validated and the case should be returned to the examiner. This generally applies to cases worked in the Form 1040, Form 1120, and Form 1120S/1065 workcenters, but may apply to generic workcenter cases if the Form 5344 was prepared in RGS. See IRM 4.10.15.9 (4).

2. Verify the AMCLS indicator is "Y" on the Close/Review screen, for Form 1040, Form 1120, Form 1120S, and Form 1065 cases where tax and share computations are run. Cases with an "N" indicator must be returned to the examiner since the tax or share computation was re-run but Form 5344 was not re-validated.

   Exception: An "N" indicator is acceptable if the message is received that a manual closure is required.

3. Verify the final electronic Form 5344 saved to CFD agrees with the examination report to ensure the correct examination results post to the taxpayer's account.

4. Verify blocking series number 40X (or 10X for protested cases with disposal code 07) is shown in the "P38-40" field on Form 5344 for paperless electronic case closures, when appropriate.

5. Verify documents saved in OD and CFD are properly named using required naming conventions. See IRM 4.10.15.10.1.

6. Confirm PDFs have been optimized and flattened. A quick way to confirm whether PDFs have been optimized and flattened is to open a form or letter (e.g., Form 3198, Letter 987, etc.) saved to CFD and verify there are no fillable fields.

   Reminder: The Optimize and Flatten Tool will skip any PDF files with an embedded digital signature in order to preserve the digital signature. If a PDF was not optimized and flattened prior to a digital signature being placed in the document, it may still have fillable fields.

7. Verify applicable case closing documents (e.g., Form 5344, Form 8278, Form 3198, compliance evaluation, etc.) were completed and saved to CFD.

8. Confirm the statute date is correct in the RGS case information screen.

(3) The manager/clerk must forward the case to CCP, PSP, or Technical Services on CEAS and close the case on ERCS the same day. If the case is excluded from paperless electronic closure (see Cases Currently Excluded From Paperless Electronic Closure), the physical (i.e., paper) administrative file should also be shipped on the same day.

1. When closing an RGS case file larger than 400 MB to CCP, the manager/clerk must eFax the Form 3198 to CCP the same day the case is updated to ERCS Status Code 51 since CCP must manually close these large cases. Form 3198 should be notated that large case manual closure is required by CCP. See IRM 4.10.15.12.1 (1) for the required language on Form 3198. Also see Closing Large Cases (Larger than 400 MB).

   Note: When closing large cases (larger than 400 MB) on ERCS, do not include the "E" indicator for paperless electronic closures on the ERCS record.

2. CCP, PSP, or Technical Services may return cases to the group if the RGS data is incomplete, inaccurate, or corrupt. This includes not receiving the RGS data with a physical administrative case file when the case is excluded from paperless electronic closure.

(4) To identity the correct closing RGS group in CEAS, use the following links:

• CCP Groups

• PSP Groups

• Technical Services Code (TSC) Lists

• NRP Coordinator Help Sheet

(5) If documentation relevant to the case is received after the case is closed from the group, the following actions should be taken (after the RGS case is archived by CCP or Technical Services):

1. The manager must retrieve the RGS case from archives and assign to the examiner. See Manager/Clerk RGS Reference Guide for instructions on retrieving a case from archives.

2. The examiner must merge the case (see IRM 4.10.15.7) and save the document(s) in OD or CFD using the proper naming convention(s).

3. The examiners must notate the activity record with actions taken.

4. The examiner must back up the case to the CEAS file server and confirm the documents are available for review in CEAS.

5. The examiner must move the case to the CEAS file server and notify the manager the case is ready to be re-archived.

6. The manager must confirm the case was successfully moved to the CEAS file server and return the case to the archives. See Archiving Cases in RGS.

(6) Technical Services managers/clerks must archive protested cases when closed to Appeals.

(7) For additional information and resources, refer to IRM 1.4.40.4.11, Closing Returns - General, and Manager/Clerk/Secretary Training.

(1) Survey after assignment (SAA) cases must be created in RGS and include all required documentation. See IRM 4.10.2.5.2, Procedures for Surveying Returns After Assignment, for SAA requirements. Also see Survey Stamp. These cases must be closed to CCP.

(2) Surveyed claims (disposal code 34) must be created in RGS and all documents required to process the claim must be saved in OD or CFD using required file naming conventions. Surveyed claims are closed to CCP.

1. Survey after assignment - Refer to IRM 4.10.2.5.3, Surveying Claims, and IRM 4.10.2.5.2, Procedures for Surveying Returns After Assignment, for guidance on the required documents to process the claim.

2. Survey before assignment(SBA) – Managers should refer to IRM 1.4.40.4.6.3.2.3, Survey Before Assignment - Claims for Refund and Requests for Abatement, for guidance on the required documents to process the claim.

(3) Managers must review SAA cases for accuracy and completeness following applicable procedures outlined in IRM 4.10.15.12.2. Managers/clerks must ensure the ERCS record reflects the "E" indicator for paperless electronic closures and is closed on the same day as the RGS case.

(4) If a case exists on RGS and is surveyed before assignment, the manager/clerk must archive the RGS case. See Archiving Cases in RGS.