Tax-Exempt Bond Employees Must Consider Fraud, Abuse in Exams

Expiration Date: August 27, 2022
Affected IRM: 4.81.5

August 27, 2020

MEMORANDUM FOR
ALL TAX EXEMPT BONDS EMPLOYEES

FROM:
Angela Gartland 
Acting Director, Government Entities

SUBJECT:
Interim Guidance on TEB Examination Procedures

This memorandum issues guidance on certain examination procedures for Tax Exempt Bonds (TEB) until we revise IRM 4.81.5. Please distribute this information to all affected employees in your organization.

Purpose 

This memo clarifies TEB examination procedures on considering elements of fraud and imposing 6700 promoter penalties.

Background/Source(s) of Authority

IRM 4.81.5.18(1) states: In every examination, consider whether there are elements of fraud or whether the imposition of the 6700 penalty is warranted.

Procedural Change/Clarification

 Under this memo, we're changing IRM 4.81.5.18(1) to read: “To foster voluntary compliance, examiners have a role in the IRS fraud and promoter penalty programs. Examiners should refer to the Service-wide policies and procedures in IRM 25.1 (with respect to fraud), IRM 20.1.6 (with respect to 6700 penalties), and follow the provisions in this section 4.81.5.18.” The IRS has these policies and procedures in place to consider and document fraud and penalties when warranted by the facts. IRM 4.81.5.18 doesn't expand such consideration and documentation requirements for TEB examinations.

Effect on Other Documents

We'll incorporate this guidance into IRM 4.81.5, Tax Exempt Bonds Examination Program and Procedures, Conducting the Examination by August 27, 2022.

Effective Date

This interim guidance is effective immediately.

Contact

Contact TEB Technical if you have any questions about this change in procedures.

Distribution:
IRS.gov (http://www.IRS.gov)