7 August 2001

See contents of full IRS Handbook of Criminal Investigation: http://cryptome.org/irs-ci/irs-ci.htm

## Handbook 9.8 Criminal Investigation at the Service Center Chapter 2 Criminal Investigation Controls
### Contents [9.8] 2.1 OVERVIEW [9.8] 2.2 CONTROL FUNCTION RESPONSIBILITIES [9.8] 2.3 CRIMINAL INVESTIGATION TRANSACTION CODES (TCs) [9.8] 2.3.1 Explanation of TCs [9.8] 2.3.2 Employee Plans Master File (EPMF) [9.8] 2.3.3 TC 910 [9.8] 2.3.4 TC 911 [9.8] 2.3.5 TC 912 [9.8] 2.3.6 TC 914/916 [9.8] 2.3.7 TC 915 [9.8] 2.3.8 TC 917 [9.8] 2.3.9 TC 918 [9.8] 2.3.10 TC 919 [9.8] 2.4 ISSUANCE/RECEIPT OF FORM 4135 AND FORM 4331 [9.8] 2.4.1 Quarterly Listings--TC 910/914 [9.8] 2.4.2 Quarterly Listings--TC 916/918 [9.8] 2.5 UNPOSTABLES [9.8] 2.5.1 Posting Instructions [9.8] 2.5.2 District Response Time [9.8] 2.6 PROCESSING AMENDED AND DELINQUENT RETURNS AND ADVANCE PAYMENTS RECEIVED AT SERVICE CENTER [9.8] 2.6.1 Received at the CI District Office [9.8] 2.6.2 Computer Condition Codes [9.8] 2.7 UNPROCESSED RETURNS, SUPPRESSED PENALTIES, AND STATUTE CONTROLS [9.8] 2.7.1 Unprocessed Return [9.8] 2.7.2 Suppressed Penalties, Unpostable Returns [9.8] 2.7.3 Statute Controls, TC 914/916/918 [9.8] 2.8 AGED TC 914 CASES
### [9.8] 2.1 (04-14-1998) OVERVIEW
This chapter provides instructions and information for the control function of CIB at the service centers. Topics include: Control function responsibilities Criminal Investigation transaction codes Issuance/receipt of Form 4135 and Form 4331 Unpostable procedures Processing amended returns, delinquent returns, and advance payments Unprocessed returns, suppressed penalties, and statute controls Aged TC 914 cases
### [9.8] 2.2 (04-14-1998) CONTROL FUNCTION RESPONSIBILITIES
The CIB control function supports the investigative efforts of district CI by establishing controls on master file for taxpayer accounts under investigation. The CIB control function performs these basic duties: Inputting controls. Verifying controls over Individual Master File (IMF), Business Master File (BMF) and Individual Retirement Account (IRA). Advising Chiefs, CI, or other Chiefs, CIB, of activities on accounts under investigation (unpostables, correspondence, etc.). Informing the district Chief, CI, of problems and consequences of different posting actions. Terminating controls. Establishing new accounts on Master File, adjusting accounts and performing credit transfers.
### [9.8] 2.3 (04-14-1998) CRIMINAL INVESTIGATION TRANSACTION CODES (TCs)
CI uses nine transactions codes: TC 910, 911, 912, 914, 915, 916, 917, 918 and 919.
### [9.8] 2.3.1 (04-14-1998) Explanation of TCs
TC 910 code monitors the entire account but does not generate unpostables. TC 914, 916, and 918 codes monitor accounts and generates unpostable 183 (IMF) or 333 (BMF). These controls are effective in all service centers after they post to master file--a universal control. Request(s) to input TC 916 and TC 918 require the approval of the Chief, CIB, on Form 4135. All others require the approval of the Chief, CI, on Form 4135. TC 910, 911, 918, and 919--Entity transactions on IMF, BMF and IRAF. TC 918 cannot be used on IRAF. TC 912 and 914--Modular transactions on IMF, BMF, IRAF, and MFT 55, civil penalties. TC 915, 916, and 917--Modular transactions for IMF only.
### [9.8] 2.3.2 (04-14-1998) Employee Plans Master File (EPMF)
CI transaction codes are not valid for EPMF and Non Master File (NMF) accounts.
### [9.8] 2.3.3 (04-14-1998) TC 910
TC 910 is an entity control used to monitor accounts of taxpayers on probation (relating to settlement of civil liabilities and fines), racketeers, and strike force subjects. TC 910 prevents the removal of tax filing or payment data from master file to the retention register, providing immediate access to needed information. Data is routinely removed for taxpayers whose tax modules have no tax liability (zero balance), no controls, and no unsettled conditions. TC 910 retains all posted transactions on master file and any subsequent account activity. CIB sends the district a complete, automatically generated, Martinsburg Computing Center (MCC) transcript (entity and all tax modules) after the TC 910 has posted. No unpostable conditions occur when a TC 910 is in place. This control will not prevent other functions from posting actions to the account. CIB sends the district an automatically-generated quarterly listing. The listing provides document locator numbers (DLN) of all returns, payments, etc., currently posted to the master file of all accounts with TC 910 for that district.
### [9.8] 2.3.4 (04-14-1998) TC 911
TC 911 reverses TC 910. TC 911 allows issuance of a Taxpayer Delinquent Account (TDA) for modules in notice status subject to a 7-cycle delay--about 7 weeks.
### [9.8] 2.3.5 (04-14-1998) TC 912
TC 912 reverses a TC 914.
### [9.8] 2.3.6 (04-14-1998) TC 914/916
TC 914/916 provides all of the controls as above for TC 910. TC 914 is initiated by the district office on an open investigation. TC 916 is initiated by the service center on a questionable refund investigation and/or false or fictitious returns and requires the written approval of a first line manager or the Chief, CIB. TC 914/916 prevents posting of most original input transactions on tax modules. A tax module is a record of tax data for a taxpayer covering one type of tax for one tax period. TC 914/916 permits posting of input transactions which were reviewed and are acceptable for posting. This allows normal processing operations to proceed. NOTE: If a balance due return is posted, a first notice to the taxpayer will generate. If a refund return is posted, a refund check to the taxpayer is generated if a TC 914 is present. A TC 916 will not allow a refund check to generate. TC 914/916 prevents a merge of modules if one or both modules has a TC 914 or TC 916 present. TC 914/916 prevents the computerized Form 5546, Examination Return Charge Out, from issuing and prevents establishment of the Audit Information Management System (AIMS) database, unless the push/special handling code 49 is present. TC 914/916 prevents the issuance of Taxpayer Delinquency Investigations (TDI) or the operation of delinquency check procedures on the BMF and controls outputs from the Information Returns Program (IRP) and the IMF delinquency check. TC 914/916 ends any further collection activity by generating a TDI recall for all tax modules in TDI notice status. TC 914/916 ends any further collection action by preventing further TDA notices from generating. If a tax module is in TDA status, the TDA will be placed in an inactive status. TC 910/914/916/918, when posted, produce a complete MCC transcript of tax modules titled INTEL-910, INTEL-914, INTEL-916, and INTEL-918. TC 914/916, when posted, produces an Information Returns Transcript (IRMF) for a certain tax year titled Monthly-New CI Case. NOTE: These transcripts will generate monthly on accounts with new controls until all open IRAF years are obtained. NOTE: The transcripts will provide payee, entity, payer entity, and income information. They will be sorted by service center, district office, agent ID number and then forwarded to the district by CIB. A TC 914 or TC 916 control on IMF will automatically place a control for the same taxpayer on the IRAF. Controls may also be placed directly on IRAF accounts. The IRAF is a separate master file for savings plan information for retirement contributions made by employees and self-employed persons. CIB must use TC 916 for QRP cases, including perpetrators. NOTE: There should be no TC 914s on these types of cases. TC 914 will cause all transactions to unpost on an MFT 55, civil penalties, case on the taxpayer under control. However, the penalty notices will still generate. The TC 914 will automatically post to MFT 55 when a civil penalty name line exists, and it will stop penalty notices. If there is no civil penalty name line, the TC 914 will unpost and a penalty name line will need to be established. When the MFT 55 TC 914 is inputted after the MFT 30, the transaction will unpost and will need to be force posted to master file.
### [9.8] 2.3.7 (04-14-1998) TC 915
TC 915 releases a credit for refund or offset in the cycle of posting if a TC 916/918 is on the module/entity. TC 915 is effective for the one cycle in which it posts. If a TC 916/918 is present on another module with a balance due, the refund will not offset to that module. The credit will refund to the taxpayer.
### [9.8] 2.3.8 (04-14-1998) TC 917
TC 917 reverses the TC 916 on the tax module.
### [9.8] 2.3.9 (04-14-1998) TC 918
TC 918 is used to control Questionable Refund investigations, fugitives or fictitious entities on IMF and BMF. The Chief, CIB, must approve the input of TC 918 on BMF accounts. TC 918 posts to the entity and establishes a CI control on the entire account. The TC 918 will provide all of the controls described above for the TC 914/916, and it removes the mail filing requirements. This eliminates a tax package from being sent to the taxpayer until the TC 918 is reversed. The mail filing requirements can be reestablished by inputting the correct transaction by cycle 29 of the current processing year. TC 918 prevents refunds, credit elects, and offsets to BMF or IRAF and suppresses activity on all modules. It causes an entity transcript entitled INTEL-918 each time one of the following entity changes occur: Primary SSN change Address change Location and zip code change Addition, change or deletion of spouse's SSN Name change
### [9.8] 2.3.10 (04-14-1998) TC 919
TC 919 posts to the entity module and reverses the TC 918. The TC 919 reestablishes the mail filing requirements.
### [9.8] 2.4 (04-14-1998) ISSUANCE/RECEIPT OF FORM 4135 AND FORM 4331
When initiating or reversing TC 910/914 controls, CI will send the original signed Form 4135 and one copy to CIB. CIB will: Input the controls. Notate the cycle of posting on Form 4135. Return Form 4135 copy to the district with two copies of the automatically generated MCC transcript for TC 914/910. Return Form 4135 copy to the district for TC 912/911. Keep a copy of the Form 4135 and MCC transcript, if applicable, in the CIB case file. The initiation or reversal of the TC 916/918 is requested on a Form 4135, or facsimile, signed by the Chief, CIB, or his or her designees. This designation can be no lower than first line managers. The signed Form 4135 becomes part of the QRP case folder in CIB.
### [9.8] 2.4.1 (04-14-1998) Quarterly Listings--TC 910/914
Each quarter CIB receives two listings containing all modules under TC 910/914 controls. One is in agent ID number order and the other in alphabetical order. The listings are sent to the appropriate districts where CI verifies the accuracy of the modules under control. If controls were not properly implemented or reversed, CI will contact the service center. If any changes are needed, CI will send a signed Form 4135 to the service center with instructions.
### [9.8] 2.4.2 (04-14-1998) Quarterly Listings--TC 916/918
Each quarter CIB Questionable Refund Detection Team (QRDT) receives two listings containing all modules under TC 916/918 control. One is in scheme number order and the other in alphabetical order. When CIB inputs TC 916/918, the Questionable Refund Program (QRP) scheme number will be inputted as follows: Example 29970001 (29)--First two digits of the controlling center (97)--Processing year (0001)--Scheme number. These listings are not to be mailed to the districts, but will be retained by QRDT. The listings to be used to screen for credits and control bases older than 2 years as well as assist in monitoring cases. The listings should be reconciled quarterly.
### [9.8] 2.5 (04-14-1998) UNPOSTABLES
CIB will send copies of unpostable documents, requesting posting instructions, to the Chief, CI, with Form 4331, Document Transmittal Criminal Investigation Control.
### [9.8] 2.5.1 (04-14-1998) Posting Instructions
The control tax examiner will attach one copy of the unpostable document to two copies of Form 4331. The Chief, CI, or his or her designee will return one signed copy of Form 4331 indicating the course of action to be taken by CIB. If the original unpostable document is needed, district CI will check the applicable box on Form 4331 and return it to the service center. CIB will recharge the original document to the district and send it with two copies of Form 4331. The district will return one signed and dated Form 4331 to the service center as a receipt. If CIB becomes aware of service center actions which may affect the case, CIB should notify the affected district as soon as possible via Form 4331. CIB will keep copies of all resolved unpostable documents and correspondence or other service center issues in their case folders until the case is closed and retention periods for the CIB case files have expired.
### [9.8] 2.5.2 (04-14-1998) District Response Time
The CI district office must respond to the service center with posting instructions within 20 workdays. The service center will begin follow-up contact with the district when the 20 workdays have elapsed and a reply has not been received. This should be done by sending a Second Notice copy of Form 4331 to the district.
### [9.8] 2.6 (04-14-1998) PROCESSING AMENDED AND DELINQUENT RETURNS AND ADVANCE PAYMENTS RECEIVED AT SERVICE CENTER
CIB will notify the CI district office via Form 4331 when amended or delinquent returns are received at the service center for accounts under control. When CIB receives a payment without any accompanying return relative taxpayer accounts under CI control, CIB will forward Form 4331 to the appropriate CI district office for posting instructions.
### [9.8] 2.6.1 (04-14-1998) Received at the CI District Office
CIB will process amended returns, delinquent returns, and advance payments submitted to CIB from the CI district office for accounts under CI control based on instructions on the Form 4331.
### [9.8] 2.6.2 (04-14-1998) Computer Condition Codes
CIB will input the appropriate computer condition codes required to suppress the assessment of all applicable civil penalties as requested on Forms 4135 or 4331. CIB will enter computer condition codes on delinquent returns before further service center pipeline processing occurs.
### [9.8] 2.7 (04-14-1998) UNPROCESSED RETURNS, SUPPRESSED PENALTIES, AND STATUTE CONTROLS
This section will discuss unprocessed returns, suppressed penalties, and statute controls.
### [9.8] 2.7.1 (04-14-1998) Unprocessed Return
If an unpostable return is not to be processed per instructions from the district CI, the service center will: Delete the unpostable document. Attach statute expiration notice cover sheet to the front of the original and the copy of the return already in the CIB folder. Input normal statute expiration date to a local database or other tracking system. Send original return, attached to Form 4331, to CI in the district. CIB will notify the district when a statute situation is eminent (120 days or less).
### [9.8] 2.7.2 (04-14-1998) Suppressed Penalties, Unpostable Returns
Suppressed (or abated) penalties are as important to service center processing as unassessed taxes. CIB should: Follow local procedures for input of computer condition codes and reprocessing. Input normal statute expiration date to a local database or other tracking system. Attach statute expiration notice cover sheet to the front of the original and the copy of the return already in the CIB folder. Send original return, attached to Form 4331, to CID in the district. CIB will notify the district when a statute situation is eminent (120 days or less).
### [9.8] 2.7.3 (04-14-1998) Statute Controls, TC 914/916/918
CIB should maintain a tracking system for unassessed returns and suppressed penalties. The majority of statute situations will involve TC 914 cases, but TC 916/918 cases are not exempt. To determine other statute situations, check MCC/INTEL-914/916/918 transcripts for any A freeze situations which indicate an unresolved TC 976 (posted duplicate return). Case folders (history sheets) should be checked for any unusual situations. When the district is notified of the pending statute situation and they want the tax and/or penalties assessed, CIB will follow local procedures in conjunction with the Statute Unit at the service center. If the district does NOT want tax or penalties assessed and the statute is about to expire, the Chief, CI, must send a memo to the Chief, CIB, stating the civil statute will be allowed to expire due to the criminal case. NOTE: Keep this memo in the case folder.
### [9.8] 2.8 (04-14-1998) AGED TC 914 CASES
CIB should conduct period reviews to determine if investigations were closed by the CI district office and remain on the CI (TC 914) control inventory. These TC 914s should be purged. Ways of purging TC 914 closed cases are: Maintaining a database of TC 914 cases with actual control input dates so a report of old cases can be reviewed. Indicating date of TC 914 input on case folder which can be manually pulled for review. Using CIMIS National Query Screen, if no other screens are available, to determine the latest status of the criminal case. Calling the case agent to discuss control reversal and request a signed Form 4135. NOTE: Refer to the Criminal Investigation Branch Desk Procedures for the Controls Program for detailed procedures and examples.
### Internal Revenue Manual | ### Hndbk. 9.8 Chap. 2 Criminal Investigation Controls | ### (04-14-1998)

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