Section 50. Redesigned Revenue Accounting Control System (RRACS) Procedures

(1) This transmits revised IRM 3.17.50, Accounting and Data Control, Redesigned Revenue Accounting Control System (RRACS) Procedures.

The RRACS system is an automated system used to provide accounting control for all custodial accounting transactions. Data is entered into the system primarily at the CFO RACS (Revenue Accounting Control System) Units. The database, located at ECC-MTB, consists of general ledger accounts and a variety of internal records used for balancing and reporting.

(1) IRM 3.17.50.1(3), Program Scope and Objective, updated policy owner to reflect CFO reorganization.

(2) IRM 3.17.50.1.2(1) (a)(b)(c)(d), Authorities, fixed broken links - IPU 24U0761 issued 06-13-2024.

(3) IRM 3.17.50.1.3 (c)(d), Responsibilities, removed responsibilities for Senior ACFO for Financial Management and ACFO for Revenue Financial Accounting due to CFO reorganization.

(4) IRM 3.17.50.1.3, Responsibilities, added Financial Management Systems Office to reflect CFO reorganization and to be in accordance with the revised IRM 1.1.21, Organization and Staffing, Chief Financial Officer - IPU 24U0148 issued 01-29-2024.

(5) IRM 3.17.50.1.3.1, CFO, reviewed and updated responsibilities for clarity and to be in accordance with the revised IRM 1.1.21, Organization and Staffing, Chief Financial Officer - IPU 24U0148 issued 01-29-2024.

(6) IRM 3.17.50.1.3.3, Senior ACFO for Financial Management, removed subsection to reflect CFO reorganization.

(7) IRM 3.17.50.1.3.3, Senior ACFO for Financial Management, reviewed and updated responsibilities for clarity and to be in accordance with the revised IRM 1.1.21, Organization and Staffing, Chief Financial Officer - IPU 24U0148 issued 01-29-2024.

(8) IRM 3.17.50.1.3.4, ACFO for Revenue Financial Accounting, removed subsection to reflect CFO reorganization.

(9) IRM 3.17.50.1.3.4, ACFO for Revenue Financial Accounting, reviewed and updated responsibilities for clarity and to be in accordance with the revised IRM 1.1.21, Organization and Staffing, Chief Financial Officer - IPU 24U0148 issued 01-29-2024.

(10) IRM 3.17.50.1.3.5, Financial Management Systems Office, added responsibilities to reflect CFO reorganization and to be in accordance with the revised IRM 1.1.21, Organization and Staffing, Chief Financial Officer - IPU 24U0148 issued 01-29-2024.

(11) IRM 3.17.50.1.3.6, Revenue Systems Section, reviewed and updated responsibilities for clarity and to be in accordance with the revised IRM 1.1.21, Organization and Staffing, Chief Financial Officer - IPU 24U0148 issued 01-29-2024.

(12) IRM 3.17.50.1.5(2), Program Controls, reviewed and updated to reflect RRACS implementation of Executive Order (EO) 14028 for Multi-Factor Authentication (MFA) - IPU 24U0761 issued 06-13-2024.

(13) IRM 3.17.50.1.6(1) (b)(j)(k)(n)(o), Terms/Definitions, reviewed and updated due to RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(14) IRM 3.17.50.1.7, Acronyms, added MFA - Multi-Factor Authentication and PRT - PassTicket Requestor Tool due to RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(15) IRM 3.17.50.1.8(1) (a)(c)(i), Related Resources, reviewed and updated resources list for clarity, removed obsolete IRM 1.34.1 and fixed broken link - IPU 24U0761 issued 06-13-2024.

(16) IRM 3.17.50.3.6(1) (k), Section 508 Compliance, minor editorial changes due to RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(17) IRM 3.17.50.4.1, Disclosure Requirements, reviewed and updated for accuracy - IPU 24U0761 issued 06-13-2024.

(18) IRM 3.17.50.4.2, General Security, reviewed and updated to reflect RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(19) IRM 3.17.50.4.3, RRACS Security, reviewed and updated to reflect RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024 and IPU 24U0949 issued 08-29-2024.

(20) IRM 3.17.50.4.3.1(3) (j), RRACS Security Accreditation and Authorization, reviewed and updated for clarity.

(21) IRM 3.17.50.4.3.1(3) (h), RRACS Security Accreditation and Authorization, reviewed and updated for accuracy - IPU 24U0949 issued 08-29-2024.

(22) IRM 3.17.50.4.3.2(3), RRACS Single Workstation Login - Access Control Policy, updated incorrect reference to IRM 10.8.1.4.1.9, Information Technology (IT) Security, Policy and Guidance: AC-10 Concurrent Session Control.

(23) IRM 3.17.50.4.4, Local Area Network (LAN) Server User ID Procedures, minor editorial changes due to RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(24) IRM 3.17.50.4.5, Resource Access Control Facility (RACF) User ID Procedures, reviewed and updated due to RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024 and IPU 24U0949 issued 08-29-2024.

(25) IRM 3.17.50.4.7, RRACS Access Procedures, reviewed and updated to reflect RRACS implementation of EO 14028 for MFA and removed outdated subsections for clarity - IPU 24U0761 issued 06-13-2024.

(26) IRM 3.17.50.4.7.1, Martinsburg Computing Center (MCC) Logon, reviewed and updated due to RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(27) IRM 3.17.50.4.7.2, Logoff, reviewed and updated due to RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(28) IRM 3.17.50.5.1(2), Miscellaneous, Non-Master File (NMF), and Cover Over Refunds, added journaling procedures to ensure consistency with subsections process - IPU 24U0761 issued 06-13-2024.

(29) IRM 3.17.50.5.1.3(2), Cover Over Refunds, moved journal table to IRM 3.17.50.5.1(2) for accuracy - IPU 24U0761 issued 06-13-2024.

(30) IRM 3.17.50.5.2(2), Excess Collections and Unidentified Refunds, added journaling procedures to ensure consistency with subsections process - IPU 24U0761 issued 06-13-2024.

(31) IRM 3.17.50.5.2.2(2), Unidentified Refunds, moved journal table to IRM 3.17.50.5.2(2) for accuracy - IPU 24U0761 issued 06-13-2024.

(32) IRM 3.17.50.5.3, Photocopy, Arbitrage Refunds and Miscellaneous (MISC) Revenue Refunds, added journaling procedures to ensure consistency with subsections process - IPU 24U0761 issued 06-13-2024.

(33) IRM 3.17.50.5.3.3(2), Miscellaneous (MISC) Revenue Refunds, moved journal table to IRM 3.17.50.5.3(2) for accuracy - IPU 24U0761 issued 06-13-2024.

(34) IRM 3.17.50.5.4(2), Enterprise Computing Center (ECC) Refund and Oil Spill Refund, added journaling procedures to ensure consistency with subsections process - IPU 24U0761 issued 06-13-2024.

(35) IRM 3.17.50.5.5(2)(3), User Fee Refund, added journal accounts for accuracy and replaced 514 with 517 to reflect correct journal number - IPU 24U0761 issued 06-13-2024.

(36) IRM 3.17.50.5.11(2), Intra-Governmental Payment and Collections Receipts (IPACR) and Treasury Receivable, Accounting and Collection System (TRACS) Intra-Governmental Payment and Collections Disbursements (IPAC D), updated to the correct IRM reference.

(37) IRM 3.17.50.5.12(5), Federal Payment Levy Program (FPLP), added journaling procedures to ensure consistency with subsections process - IPU 24U0761 issued 06-13-2024.

(38) IRM 3.17.50.5.12.1(1), Intra-Governmental Payment and Collections Receipt (IPACR) Financial Management Service (FMS) Levy, replaced account 2910 with 2926 due to procedural changes - IPU 24U0761 issued 06-13-2024.

(39) IRM 3.17.50.5.12.2(1), Intra-Governmental Payment and Collections Disbursement (IPACD) FMS Levy, replaced account 2910 with 2926 due to procedural changes and moved journal table to IRM 3.17.50.5.12(5) for accuracy - IPU 24U0761 issued 06-13-2024.

(40) IRM 3.17.50.9.2.1(2), Debit Voucher (DV), added journaling procedures.

(41) IRM 3.17.50.9.2.2(2), Debit Voucher (DV) Adjustment, removed duplicate journaling procedure table.

(42) IRM 3.17.50.14.1.2(2), Month-End Reports, renamed report 100 and replaced 101 with 103 to reflect correct reports - IPU 24U0761 issued 06-13-2024.

(43) Exhibit 3.17.50-1, General RRACS Definitions, reviewed and updated RRACS Module definition due to RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(44) Exhibit 3.17.50-2, Chart of Accounts, added IRS Accounts due to IRA & CHIPS for Applicable Energy Credits Downward Adjustments and updates to Posting Model for Appropriation Withdrawn and Downward Adj of Prior Year. Added IRS Accounts due to CHIPS & IRA legislation and to ensure the accuracy of the suspense accounts related to IPAC Receipts - IPU 24U0148 issued 01-29-2024. Added IRS Accounts due to IRA legislation for Clean Vehicles and for accuracy - IPU 24U1201 issued 12-11-2024.

(45) Exhibit 3.17.50-3, RRACS Input Journals and Journal Numbers, added Journals 023, 039, and 069 for accuracy. Updated the journal Names for 094, 095 and 096 due to CHIPS & IRA legislation - IPU 24U0148 issued 01-29-2024.

(46) Exhibit 3.17.50-4, Account Numbers and Associated Journals, added account numbers and associated journals due to IRA & CHIPS for Applicable Energy Credits Downward Adjustments and updates to Posting Model for Appropriation Withdrawn and Downward Adj of Prior Year. Added account numbers and associated journals due to CHIPS & IRA legislation and updates to the suspense accounts related to IPAC Receipts - IPU 24U0148 issued 01-29-2024. Updated account 2910 associated journals due to procedural changes - IPU 24U0761 issued 06-13-2024. Added account numbers and associated journals due to IRA legislation for Clean Vehicles and for accuracy - IPU 24U1201 issued 12-11-2024.

(47) Exhibit 3.17.50-6, RRACS Menu Icons, reviewed and updated to reflect RRACS implementation of EO 14028 for MFA - IPU 24U0761 issued 06-13-2024.

(48) The following changes made throughout:

Hyperlinks and references revised and updated throughout the IRM.

Tables merge or span cells updated to comply with IRM 1.11.2.5.4.1(2), Internal Revenue Manual (IRM) Process and Section 508 of the Rehabilitation Act.

Editorial changes to language and grammar to improve clarity.

Anthony S. Chavez Chief Financial Officer

Purpose: This IRM provides policies and procedures for RRACS. These procedures explain the various components of RRACS. The system reflects all accounting principles and standards prescribed by the Government Accountability Office (GAO).

Audience: CFO RACS Unit.

Policy Owner: CFO.

Program Owner: Financial Management Systems.

Primary Stakeholders: CFO Revenue Accounting Operations RACS units, HQ Accounting analysts, accounting technicians and database administrators.

Primary Goals: To provide efficient workflow guidance, ultimately achieving reporting accuracy for revenue and refunds.

The RRACS system is the system of record for IRS custodial accounting. The Custodial Detail Database (CDDB) is the subledger to the RRACS system. CDDB is a repository of data extracts from all master file systems which includes revenue, refunds, unpaid assessments, and frozen credits. CDDB also summarizes data traceable to specific revenue operations.

The authorities for this IRM include:

31 United States Code (USC) Chapter 11, The Budget and Fiscal, Budget and Program Information

31 USC 3512, Executive Agency Accounting and Other Financial Reports and Plans

44 USC 3309, Preservation of Claims of Government Until Settled in Government Accountability Office (GAO)

5 USC 552a, The Privacy Act of 1974

This section provides responsibilities for:

CFO

Deputy CFO

Financial Management Systems Office

Revenue Systems Section

Enterprise Computing Center, Martinsburg (ECC-MTB)

CFO RACS Units

The CFO is responsible for overseeing the IRS’s budget and planning, financial management and reporting, internal control practices and provides expert planning and financial advice to IRS leadership.

The Deputy CFO provides direction on financial management, ensures financial products are properly presented and maintained, and ensures financial systems are compliant with federal standards.

The Financial Management Systems office oversees IRS’s data integrity and user security controls for Financial Management.

The Revenue Systems Section ensures revenue accounting systems remain compliant with all relevant rules and regulations, along with implementing, updating and managing new system requirements mandated and/or requested by business stakeholders.

The Enterprise Computing Center, Martinsburg (ECC-MTB) oversees and is responsible for:

Maintaining Master File (MF) and Customer Account Data Engine (CADE) records for taxpayers.

Accounting and data control for Individual Master File (IMF), Business Master File (BMF) and CADE records.

Processing systemic accounting adjustments, transactions and abstracts of revenue receipts.

Maintaining a Reciprocal Accounting Control Record (RACR) with each CFO RACS Unit.

Producing automated SF 1166 (Voucher and Schedule of Payments) or Secure Payment System (SPS) prints for the total amounts of overpayment principal and interest transcribed to BMF and IMF refund files.

Each CFO RACS Unit is responsible for functioning as a separate accounting operation, using an identifiable numeral.

Together, each unit is responsible for:

Maintaining a general ledger and subsidiary records, reconciling the general ledger accounts and subsidiary records or files each month.

Controlling all accounting documents within the CFO RACS Unit for entry to the BMF, IMF, NMF accounts and for journaling and posting to the general ledger.

Receiving or initiating control and processes for all BMF, IMF, and NMF accounting transactions involving other CFO RACS Units.

Receiving and controlling BMF, IMF, NMF accounting outputs including required journaling and posting to the general ledger.

As necessary, initiating or processing account transfers, account adjustments, debit or credit transfers, statutory clearances, etc., related to BMF, IMF and NMF accounts.

Preparing Form 23C, Summary Record of Assessment/Assessment Certificate (RACS Report 006) and Form 2188, Voucher and Schedule of Overpayment and Overassessments (RACS Report 024) schedules for manual refunds, transcripts and accounting reports and other accounting documents, as required.

Program Reports: In accordance with Management Accountability Review regulations, managers are responsible for ensuring that internal controls are effective and efficient in day-to-day operations and safeguarded against waste, fraud and abuse. The following daily, weekly, and monthly reports are generated by CFO RACS units and assist with managing workflow processes.

Daily Posting Summary report generated weekly. This report is validated to ensure the preparer and reviewer have completed all journals per the checkoff list.

Central Accounting Reporting System (CARS)/RACS Reconciliation generated daily. This report identifies any out of balance account discrepancies for the current month.

CARS/RACS Reconciliation Fiscal Year to Date generated daily and monthly. This reconciliation identifies any cumulative out of balance discrepancies for the fiscal year to date.

Program Effectiveness: Managers are responsible for conducting operational or management control reviews to identify weaknesses and mitigate known risks. Managers must perform program or ad hoc reviews for accuracy and completeness. Monthly scorecards communicate critical information on the timeliness, completeness and accuracy of the overall processes.

Federal Government Accounting Requirements, 31 USC 3512, places the responsibility for establishing and maintaining adequate systems of accounting and internal control upon the head of each executive agency, and states that the head of each executive agency shall establish and maintain systems of accounting and internal control that provide:

Full disclosure of the financial results of the agency's activities.

Adequate financial information needed for the agency's management purposes.

Effective control over, and accountability for, all funds, property, and other assets for which the agency is responsible, including appropriate internal audit.

Reliable accounting results serving as the basis for preparation and support of budget requests, controlling the execution of its budget, and providing financial information required by the President or other designated authority.

Suitable integration of the agency's accounting with Treasury’s accounting in connection with the central accounting and reporting responsibilities imposed by the Secretary of the Treasury.

RRACS users must adhere to the security rules and separation of duties that exist within the system granting different types of authority/access through the Business Entitlement Access Request System (BEARS):

RRACS users apply to receive a User ID on the BEARS system.

Quarterly monitoring occurs to ensure adherence to internal controls regarding access levels of users.

Systems must conform to the accounting principles, standards, and related requirements, as prescribed by the Comptroller General of the United States. The following controls are in place to ensure compliance with the financial statement audit program:

Monthly Checklist - Validation check on the business activities that should be completed for an accounting period, to ensure proper reporting of events.

Trace ID (TID) Manual Balancing reconciliation - Reconciles deposit tickets and debit vouchers from the Integrated Submission and Remittance Processing (ISRP), Lockbox, and Electronic Federal Tax Payment System (EFTPS).

Collections Information Repository (CIR) - Calculates cumulative CARS amounts against RRACS calculated amounts to reconcile deposit differences recorded monthly.

Refund Match - Reads the TDO payment file and match them against the refund records on RRACS. This process confirms refunds disbursed from Treasury and reports the funds on the statement of transactions.

Statement of Difference (SOD) - Identifies, reconciles, and resolves differences between IRS deposits and collections as reported on the statement of transactions and Fiscal Service.

Suspense Account – Suspense accounts 20F3885/20F3500/20F3502 reviewed monthly. CFO RACS units verify account balances post correct adjustments, verify suspense accounts 20F3500 and 20F3502 contain zero balances and accounts 20F3885 meet threshold requirements.

Negative Disbursements – CFO RACS Units generate CARS/RACS Reconciliation and Fiscal Year to Date CARS/RACS Reconciliation reports to verify specific accounts on the report match. CARS and RRACS must balance.

Beginning of Day/End of Day (EOD) Balancing - Daily reports generated at the beginning and end of each day to ensure RRACS balances reconcile to tax modular transactions entered.

RACR - Reconciles daily and monthly general ledger accounts to the master file at each submission processing CFO RACS Unit.

3997 Balancing – Reconciliation of general ledger and Subsidiary Accounts imbalances that break out the difference as reconciled, aged reconciled or unreconciled monthly. This is used to highlight reconciliation issues.

Subsidiary Ledger- Provides detailed support to the general ledger accounts as reconciled for reporting accurately. It further authenticates the integrity of the general ledger accounts and assists the Service in providing accurate financial reporting to Treasury.

The following terms and definitions apply to this program.

Assessment Main Menu - RRACS Module used for service center assessments and abatements.

RRACS Application - RRACS Module used to log in to RRACS. Note: A login must be performed through RRACS Application prior to accessing any of the other RRACS modules.

DBA Main Menu - Module used to perform administrator level functions, most commonly to change the accounting month or reverse accounting journal entries.

HQ Reports Main Menu - Module used to print all RRACS headquarters reports.

IRS Account - General ledger account.

Journal Control - Identifying information relating to transaction activity. Note: For RRACS, transaction activity includes journals, reversals or confirmations. The journal number includes activity count, posting number and system date.

Journal Entry - A generic journal used for all RRACS transactions. This journal records the dollar amounts for a specific ledger posting to the IRS Account.

Journal Number - The unique number that identifies a RRACS journal entry. The format is XXX-MMDDYYYY-ZZZ, where X is the three-digit posting number, MMDDYYYY is the date, and ZZZ is the sequential instance of identical posting numbers that happened on the same date.

Journal Research - Module used to retrieve previously entered journals.

Current Local Agency Location - Module/utility that logs the user into a specific location (service center or headquarters).

MBI2 - A terminal emulator that allows direct access to the RACS IBM host mainframe. Runs using terminal commands. Most commonly used to transfer files or to run SQL queries.

RACS Main Menu - Module used to perform accounting entries and journals.

Posting Number - The first three numbers of the RRACS journal number. Represents the category of journal.

RRACS Production Menu - The main folder that contains the RRACS Application icon.

RRACS Module - Also referred to as a RRACS Menu, a program within the RRACS Application Menu screen that performs a specific set of tasks. For example, the RRACS Main Menu provides journal entry and CFO RACS Unit Reports Main Menu provides options for service center report printing. A button represents each module within the main RRACS Application Menu screen.

RRACS Production Environment - The version of RRACS that is put into operation for end users in a real-time situation.

SPC Reports Main Menu - Module used to print all RACS Service Center reports.

Trial Balance - Module used to display debit, credit and net account balances for a given service center or headquarters.

Update User Workstation ID - A module/security utility that updates current workstation and disconnects any other workstations that the user may be logged into.

The following acronyms apply to this program.

Acronym

Definition