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Part 5. Collecting Process

Chapter 1. General Collecting Procedures

Section 20. Collection Inventory

5.1.20  Collection Inventory

5.1.20.1  (05-27-2008)
Collection Inventory — Overview

  1. As the tax gap grows, it becomes increasingly important that our inventory selection and delivery systems work to deliver current, potentially collectible inventory to Collection Field function (CFf). This IRM provides information and guidance for CFf employees regarding collection inventory selection, delivery, and management.

5.1.20.2  (05-27-2008)
Collection Inventory Management

  1. Collection inventory is managed by the Inventory Delivery System (IDS). IDS is the inventory delivery system for collection cases. IDS uses decision analytics and established business rules to route cases to:

    • the Automated Collection System (ACS),

    • the Queue, or

      Note:

      The Queue is a function of IDRS; cases remain in the Queue until requested.

    • direct assignment to Collection Field function (CFf) as noted in IRM 5.1.20.2.3.1 .

  2. IDS uses the Address Research (ADR) application and outside vendors (such as the National Change of Address from the United States Postal Service) to locate good addresses for undelivered mail.

  3. IDS also uses the Telephone Number Research (TNR) application to locate current phone numbers for taxpayers.

  4. IDS receives data from the Automated Collection System (ACS), Automated Substitute for Return (ASFR), Taxpayer Delinquent Account (TDA), and Taxpayer Delinquency Investigation (TDI) by those application systems passing their data to IDRS. IDRS picks up relevant information from Corporate Files On Line (CFOL) and the Taxpayer Information File Data Store (TIF DS) before passing the data to IDS.

5.1.20.2.1  (05-27-2008)
Collection Inventory Management — Prioritization

  1. Risk-Based Collection is the way inventory is prioritized in the field; cases are categorized according to their risk level. The Inventory Delivery System (IDS) routes cases according to Risk-Based Collection criteria and decision analytics. Risk-Based Collection is a program of integrated policy, strategy, and measures that emphasizes long-term compliance solutions through the development and application of risk-based decision support tools.

    • High Risk: 100-108

    • Medium Risk: 201-208

    • Low Risk: 301-303 and 399

  2. Decision analytics uses advanced modeling techniques to identify the most productive cases. These cases are then accelerated for immediate issuance to front line collection employees.

5.1.20.2.2  (05-27-2008)
Collection Inventory Management — Tools

  1. Several tools are available to field employees to assist with inventory management. The available tools are:

    • the Integrated Collection System (ICS), and

    • the Entity Case Management System (ENTITY).

5.1.20.2.2.1  (05-27-2008)
Integrated Collection System

  1. The Integrated Collection System (ICS) provides workload management, case assignment/tracking, inventory control, electronic processing, and case analysis tools to support the SB/SE organization collection fieldwork. ICS is a two-tier system supporting detached/docked laptops.

  2. ICS is part of the Internal Revenue Service’s plan for overall automation of its activities.

  3. National Headquarters (HQ) employees in Collection and MITS continually strive to meet the ICS objective to deliver a computer system that automates many labor-intensive Collection tasks and provide benefits such as:

    1. Elimination of redundant data capture and entry

    2. Reduction of document transfer

    3. Automated computations

    4. Aid in timely response to employee and taxpayer requests

    5. TIN-based time reporting

  4. The latest application changes are the result of Headquarters-requested enhancements, user-requested enhancements, and new functionality developed by the ICS/Collection Services Branch.

  5. Access the ICS website for further information including updates about ICS changes: http://icsweb.web.irs.gov/default.htm.

5.1.20.2.2.2  (05-27-2008)
Resources and Workload Management System (RWMS)

  1. The Resources and Workload Management System (RWMS) used to be a case scoring and ordering system. RWMS is currently used as one of several factors to determine the grade and risk levels of cases.

    Note:

    Future enhancements to the Inventory Delivery System (IDS) include the use of Consolidated Decision Analytics (CDA). RWMS data will no longer be used as the primary source to determine grade and risk level.

5.1.20.2.2.3  (05-27-2008)
ENTITY

  1. The ENTITY Case Management System is an automated system used at the group, territory, Area, and National level. The ENTITY system uses data from ICS and IDRS (Delinquent Investigation/Account Listing (DIAL) extracts) for case management, report compilation, and management information.

  2. See IRM 5.3.1, ENTITY Case Management System.

  3. See IRM 5.3.1.2.1, Case Assignment Procedures.

5.1.20.2.3  (05-27-2008)
Collection Inventory Management — Rules

  1. Existing business rules limit or restrict Balance Due Account (BAL DUE) and Delinquent Return Investigation (DEL RET) movement in several different ways.

5.1.20.2.3.1  (05-27-2008)
Cases that Bypass ACS and the Queue that go Directly to ICS

  1. The following BAL DUE or DEL RET cases move directly from notice status to active collection by CFf. These cases bypass both ACS and the Queue and are assigned directly to ICS:

    • Any Non Master File (NMF) account

    • IRS Employee

    • Transaction Code (TC) 148-9 (Letter 903)

    • Any revenue officer manual (quick or prompt) assessment

    • Wage & Investment (W&)I case transferred to SB/SE campus or case transferred outside of current campus with an imbedded field assignment number or last Master File Status was 26

    • Possible problem/duplicate case where there is no Service Center (SC) History and the case is NOT being transferred and the last Master File Status 26

    • Open BAL DUE or DEL RET already assigned to ICS – new module added

    • Current IDRS assignment number to ICS and no open BAL DUE or DEL RET

5.1.20.2.3.2  (05-27-2008)
Cases that Bypass ACS and Go to the Queue

  1. The following BAL DUE and DEL RET cases bypass ACS. They move from notice status directly to the Queue where they await assignment for collection:

    • TC 148-5, 6, 7 or significant account Intelligence code

    • Any DEL RET where the case code is 914 or 3949; Offer in Compromise (OIC) acceptance year is significant; Windfall Profit Tax, MFT 03 with abstract number 50 or 52 and abstract amount (assessment) is significant

    • MFT 12, 15, 31, 52, 61, 63, 64, 77, or 78

      Note:

      For DEL RET, MFT must be 12, 52, 61, 63, or 64

    • Left hand freeze code L , or a posted or pending non reversed TC 971 containing action code 65 – Innocent Spouse

    • Any BAL DUE or Combo payroll tax case, MFT 01, 03, 04, 09, 11, or 16 where the tax period is less than two years old and any payroll tax ‘modular’ balance due is greater than $1,500 (IDS process only)

    • Any Combo case where the DEL RETs controls and the earliest qualifying payroll tax less than two years, MFT 01, 03, 04, 09, 11, or 16 has a last return amount greater than $1,500 (IDS process only)

    • Any BAL DUE or Combo payroll tax case, MFT 01, 03, 04, 09, 11, or 16, where the aggregate balance due is greater than $10,000

    • Any DEL RET only payroll tax case, MFT 01, 03, 04, 09, 11, or 16, where the last return amount is greater than $10,000

    • Any BAL DUE or Combo case where the aggregate balance due is greater than $100,000

      Note:

      Effective January 2002 W&I cases will not follow this rule

    • Any non-W&I BAL DUE or Combo case and the MFT 30 where the tax period is less than two years old and the aggregate balance due is greater than $40,000 (IDS processing only)

    • Any installment agreement needing financial review

    • Effective January 2003: Any W&I BAL DUE with the most recent history record entry of notice type Computer Paragraph (CP) 504 and secondary BAL DUE selection code RP8

    • Any W&I DEL RET where the Repeater Indicator is 4 or 8

    • W&I case transferred to SB/SE campus or case transferred outside of current campus with an imbedded Queue assignment or last Master File Status of 24

    • Master File Collection Location Code (CLC) housekeeping or possible problem/duplicate case where there is no SC Status history and the case is NOT being transferred and the last Master File Status is 24

    • Any DEL RET or COMBO where the DEL RET Selection Code is 38

    • Any DEL RET where the MFT is 03 and the delinquent module filing requirement is 6 or 7

5.1.20.2.3.3  (05-27-2008)
Cases that Cannot be Moved to the Queue

  1. The following cases (whether when directly assigned or later routed to ICS) are restricted from moving to the Queue:

    • Any Non Master File (NMF) account

    • IRS Employee

    • Refund Hold (DEL RET) case

    • TC 148- 9 (Letter 903), reverse with a TC 149 as appropriate

    • MFT 31, 46, or 79 and Collection Statute Expiration Date (CSED) expires within six months

    • Secondary DEL RET Code I

    • DEL RET notice code T (duplicate request)

    Note:

    Most of these cases are currently identifiable by ICS and are blocked up-front. Those cases not blocked will return to ICS or show up on the ICS/ENTITY Quality Analyst (IQA) listing.

5.1.20.2.3.4  (05-27-2008)
Cases with Restricted Assignment

  1. The following cases (whether directly assigned or later routed to ICS) are restricted from moving from their present assignment. These cases cannot be sent to the Queue and they are not transferable, etc., when the following conditions are present:

    • Disaster code 1, 2, or 3

    • Left hand freeze code O

    • Any IMF case with a Killed in Terrorist Action (KITA) indicator 2

5.1.20.2.4  (05-27-2008)
Collection Inventory Management— Assignments and Inventory Levels

  1. Inventory is delivered to CFf in different ways; there are various types of revenue officer assignments. Target Inventory Levels were implemented to establish consistent inventory levels for revenue officers nationwide. Additionally, targeted inventory levels have been developed to maximize productivity.

5.1.20.2.4.1  (05-27-2008)
Revenue Officer Assignments

  1. Revenue Officer assignments consist of the following:

    1. Balance Due Accounts (BAL DUEs)

      Note:

      The dollar criteria for routine BAL DUE issuance is included in LEM 5.1.20.2.4.1, Routine BAL DUE Issuance Criteria.

    2. Delinquent Return Investigations (DEL RETs)

    3. Courtesy Investigations (OIs)

    4. Federal Tax Deposit Alerts (FTD Alerts)

    5. Offers in Compromise (Form 656, Offer in Compromise, and Form 2525, Record of Offer in Compromise)

    6. Compliance Initiative (or Improvement) Projects (CIPs) (formerly known as Returns Compliance Programs)

  2. Campuses and field offices use Form 3210, Document Transmittal, to transmit assignments and other tax related items.

  3. Compliance Services Collection Operation (CSCO) is to transmit items to field offices for assignment as appropriate:

    1. Case assignments are attached to Form 1976, Assignment Slip, for routing to the proper responsibility unit and then batched for shipment to the field office on Form 3210.

    2. Other work items, such as Offers in Compromise, estate tax extensions and CP-44s, are attached to Form 1725, Routing Slip, and then transmitted on Form 3210.

    3. Delinquent Investigation/Account Listings (DIALS) are attached to Form 3210.

  4. Field offices are to use Form 3210 to transmit all tax related documents to the campus. Use of Form 3210 is not required for intra-office routing of tax related documents in the same territory.

  5. The ENTITY Case Management system is the primary method by which managers assign cases to the revenue officers. Once cases have been assigned, they are reassigned using ICS.

5.1.20.2.4.2  (05-27-2008)
Targeted Inventory Levels

  1. Targeted Inventory Levels are used in an effort to secure maximum productivity for Collection Field function (CFf) without a cost to quality. National inventory ranges are established to provide a measure of uniformity between the various field offices. The national ranges are as follows:

    • Grade 13 — 34 to 50 taxpayer cases

    • Grade 12 — 34 to 50 taxpayer cases

    • Grade 11 — 53 to 79 taxpayer cases

    • Grade 9 — 70 to 95 taxpayer cases

    • Grade 5/7— 59 to 89 taxpayer cases

  2. The following factors must be considered to determine the appropriate inventory level:

    • National targeted inventory ranges

    • Level of case difficulty

    • Geographical area covered

    • Collateral duties, e.g., official union duties, Equal Employment Opportunity (EEO) assignments, on-the-job instructor assignments, and quality improvement assignments.

  3. When your assigned inventory is in excess of the national maximum level (or other appropriate reduced level) for your grade for more than 10 workdays, the IRM requirements relating to prompt initial and follow-up contacts will be suspended for the time period that you carry the higher inventory level.

  4. Bring situations that may represent unmanageable inventory levels and/or mis-graded case levels to your manager's attention.

    Note:

    Reports are available on ENTITY to help managers monitor inventory levels.


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