Note:

For ITG examination cases, any report that is given to the taxpayer must include the statement, ‘This examination report is subject to the approval of the Program Manager, Indian Tribal Governments.’ Prepare the report forms at the conclusion of the examination.

Use L950-C for Section 7436 issues (worker classification) & L950-D for non-Section 7436 issues

Include a 3198-A Special Handling checksheet in RCCMS:

Protest received: Group Manager notates on 3198-A case is to be closed to Appeals.

No protest received: Group Manager notates 30-day letter was defaulted on 3198-A and closes case to Mandatory Review.

Include a Form 886-A, Explanation of Items for:

Adjustment amount (adjustment, tax, penalties, etc.)

Issues: State what is in dispute

Each different class of worker in Section 7436 cases (be sure to include Section 530 discussion in all).

Each penalty asserted.

Facts: Explain the activity the tribal entity has engaged in and develop the facts to address the taxability issues.

Law: Cite the applicable Code, Regulations, Revenue Rulings and Procedures, etc., that support your position.

Government’s Position: State why the application of the law to the facts supports the conclusion reached by the specialist.

Taxpayer’s Position: What authority does the taxpayer rely upon (as opposed to the Specialist’s conclusions). If possible, secure the position in writing.

Analysis / Conclusion. Comment on the position taken by the taxpayer. After consideration of all items, the proper tax liability or other Service action that is to be sustained.

Alternative position must be discussed with the taxpayer and included on a separate Form 886-A which is sent to the taxpayer with the report. See IRM 4.23.10.16.3, Alternative and Whipsaw Positions in Unagreed Cases.

EO and FSL unagreed employment tax cases with section 7436 issues, without protest to Appeals, will be closed to EO Mandatory Review for the issuance of a SNOD or Letter 3523, Notice of Employment Tax Determination Under IRC section 7436. Unagreed employment tax cases that do not involve IRC section 7436 issues, will be closed to the closing unit, and Letter 950-D will be the closing letter.

ITG unagreed cases, without protest to Appeals will be closed to ITG Mandatory Review.

For ITG on unagreed cases:

Offer the taxpayer a managerial conference.

Determine if the case is wholly or partially agreed.

Solicit the taxpayer’s position on unagreed issues.

Tell the taxpayer about Fast Track Settlement (FTS), if eligible.

Tell the taxpayer of the appellate process and their appeal rights.

For ITG on unagreed cases, If the tribal leader isn’t in the closing meeting, explain your examination results in a letter. Thank the tribal official(s) for their cooperation.

For ITG on unagreed cases, issue all letters, publications and reports per the communication agreement. Send any examination correspondence you send to the designated tribal official also to the tribal leader.