WHY?

ICO received a Personally Identifiable Information (PII) return from

WHAT?

I became involved when my manager, Sylvia Mincy approached me with the document in question. She wanted to know what would I have done had I received this document in the raw work. I performed the following steps:

o I first looked at the return and deduced that it came up for either error code 002 or error code 004. Because, these two error codes are very similar in resolution I concentrated on Error Code 002. o Secondly, I saw that there was a digit missing from the EIN, so I could not verify anything using the EIN, I would have to use the name line . o Next, I used command code NAMEB and saw an EIN of 20-123456 that the EIN the taxpayer had on the return (22-012345). Using the information on the return and common sense, I concluded that the taxpayer’s EIN was off by two digits compared to what I found in NAMEB.

First, a discussion was held involving all subject matter experts (SMEs), leads, Sylvia Mincy (ICO Quality Manager), and Karen Everson ( ). This was primarily a brainstorming session to determine: 1. Are the tax examiners using their research skills to the fullest extent?, 2. Are they even aware of the research capabilities they have available to them?, 3. Do we need to come up with local procedures regarding research?, Do we need to teach research either as a separate class or in conjunction with the class of the form being taught?

Beginning on June 8th, 2009 we began reviewing all 1041 returns that were suspended to entity to verify the validity of the suspense. If returns were found to be erroneously suspended, they were sent back to the tax examiner along with screen prints of the research performed by Margaret (Peggy) Nelson and myself. It was expected that the tax examiner would look at the command codes used and process. We performed this over a 5 day period and will continue to do so until further notice.

Below is a sample of 415 returns that were reviewed for the week and the number that were erroneously suspended to entity.

We used qualitative data: 1041 being suspended to entity for further research.

We then proceeded to gather quantitative data: The number of returns that were erroneously suspended due to lack of research

| |MON. |TUES. |WED. |THUR. |FRI. |Total |
|CORRECT |70 |71 |118 |62 |20 |341 |
|INCORR. |32 |14 |23 |15 |5 |89 |

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Observations

Several observations were observed by Peggy and myself:

1. Particularly with 1041s certain parts of the name line must be abbreviated (I.e. Trust = TR, Irrevocable = Irr, Under Will Of = UWO, For Benefit Of = FBO, etc.).

2. In researching if the tax examiner is not aware of or simply is not using the abbreviations, then they will not find any information in NAMEE. If not found, then they are suspending the document to entity and not doing further research.

3. The tax examiners are do not know how to input a command code or they do not have that command code in their profile.

4. The tax examiner does not know how to read the information that is on the screen under that command code.

5. The tax examiner is disregarding the “Merge To - MT” and “Merge From - MF” area found under the command code INOLES.

6. The tax examiner is not using simple “common sense” in linking the information on the return to what is on IDRS.