SECTION 5. DISTRICT DIRECTOR

TESTING

.01 The District Director may periodically initiate tests of a taxpayer’s imaging system. These tests may include an evaluation (by actual use) of a taxpayer’s equipment and software, as well as the procedures used by a taxpayer to prepare, record, image, index, store, preserve, retrieve, and reproduce imaged documents. In some instances, the District Director may choose to review the internal controls, security procedures, and documentation associated with the taxpayer’s imaging system.

.02 The tests described in section 5.01 of this revenue procedure are not an ‘‘examination,’’ ‘‘investigation,’’ or

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‘‘inspection’’ of the books and records within the meaning of § 7605(b), or a prior audit for purposes of § 530 of the Revenue Act of 1978, 1978–3 (Vol.1) C.B. 119, because the evaluation is not directly related to the determination of the tax liability of a taxpayer for a particular taxable period.

.03 The District Director must inform the taxpayer of the results of any periodic tests.