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Judicial Watch • FarahTIGTA 2 of 2

FarahTIGTA 2 of 2

FarahTIGTA 2 of 2

Page 1: FarahTIGTA 2 of 2

Category:Clintons

Number of Pages:47

Date Created:March 10, 2014

Date Uploaded to the Library:March 10, 2014

Tags:referrals, examination, Commissioner, procedures, activity, Internal, interview, Revenue, Division, Department of the Treasury, exhibit, service, Exempt, treasury, National, White House, department, office, district, EPA, IRS, ICE, CIA


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Marcus Owens, Director, dated 3113197 

Type Activity:  Inspection Service  Date and Time  
 Personal Interview  Memorandum Interview Telephone Interview Activity  March 13, 1997 Records Review  l:OOp.m. Other  

Activity Interview of: (Include all necessary data) 
MARCUS OWENS Director Exempt Organizations Division Constitution venue Washington, D.C. 
Conducted by: Sil ROBERT JOHNSON Audit Manager JOE STOLZ 
Location Interview/ Activity 
1111 Constitution venue Rm.6411 Washington, D.C. 
Subject Matter/Remarks the above date, MARCUS OWENS, Director, Exempt Organizations Division, Washington, D.C., was interviewed under oath Special Investigator ROBERT JOHNSON and Audit Manager JOE STOLZ. OWENS was provided with Privacy Act Notice 417. OWENS stated essentially the following: 
The National Office Exempt Organizations Division responsible for programmatic oversight developing and implementing annual workplan which provides direction the Key District Offices (KDOs) time allocation and areas focus. The workplan developed each year obtaining input from the field and various National Office analysts areas they feel should receive emphasis. draft the plan sent out each year and implemented after agreement and comment the KDOs. Current areas focus involve universities and hospitals under the Coordinated Examination Program (CEP). The CEP focuses large tax exempt entities who've been identified the KDOs areas worthy examination. The KDOs detennine which specific entities they examine under the CEP. However, the National Office generally receives list these entities the fonn quarterly reports. Also, there currently National Project involving social clubs and tax exempt bonds. part the project, the National Office provides the KDOs with samples for examination. The KDOs detennine which organizations from the sample they actually examine. Tiie KDOs may choose not examine any the samples. Another area current emphasis involves gaming organizations. Each KDO left coordinate their own program with respect gaming. Other forms exam selection occur the KO.Os using Selection 
Exempt Returns For Examination (SERFE) procedures. This procedure similar the Examination Division's use the 
"DIF score" whereby returns are evaluated and "scored" based certain factors and/or characteristics. 
The National Office does receive numerous referrals infonnation from various sources such the media, other IRS 
divisions, other government agencies, etc.. These referrals are forwarded his office and then the Projects Branch. The 
Projects Branch prepares and sends acknowledgment the source the referral. The only "evaluation" that done 
the National Office level consists obtaining addresses, Integrated Data Retrieval System (IDRS) infonnation, etc 
assist directing tl1e referral. The referral then sent out the appropriate KDO along with any related information 
attached. The referral sent the KDOs for whatever action they deem necessary. has never directed (formally 
informally) KDO initiate specific examination based referral nor does know any other National Office 
employee directing such examination. The only official procedures aware with respect the handling 
referrals are those which are contained the Internal Revenue Manual, Section 7900. not aware any established 
procedures regarding time standards evaluating and/or processing referrals. 111e National Office utilizes 
Name:  Case Number:  
Questionable Exempt Organization  5-9702-0022  
Examination Activities  
Exhibit 15.5  

Fonn 8052 (Rev. 8-/96) Department the Treasury -Internal Revenue Service 
Other than the above situation, unaware any other Internal Revenue Service employees receiving request from any 
outside source requesting that organization audited, receive favorable treatment, etc ... 

Name:  Case Number:  
Questionable Exempt Organization  5-9702-0022  
Examination Activities  
Exhibit 15.5  

Form 8052 (Rev. 8-/96) Ocpartment ofthe Treasury -Internal Revenue Service 

Activity Interview of: (Include all necessary data) Conducted by: 	Sil James Rice Mike Levi 
MARCUS OWENS Location Oflnterview/Activity Director Exempt Organizations Division 111l Constitution Ave, Rm. 6411 Washington, Washington, 
Subject Matter/Remarks 
OWENS was again advised the general nature joint Internal Audit (IA) Internal Security (IS) investigation into questionable Exempt Organizations (EO) Division activities. OWENS was advised was being interviewed second time answer questions that were not covered during his initial interview March 13, 1997. OWENS was provided for review Privacy Act Notice 417. OWENS acknowledged that understood the contents this document. OWENS was then placed 
under oath. OWENS provided essentially the following information: 

field. Since that time, every year handful closing agreements have taken place the national office level. There specific criteria for closing agreements. tax-exempt applicant organization matter under IRS technical advise the national office level and the taxpayer Key District office requests suggests the national office enter into closing agreement, then the closing agreement will handled the national office level. These rare situations usually occur matters that have extreme complex tax issues ones considered highly sensitive. Authority enter into agreements with organizations taxpayers the national office has been delegated down the Special Assistant the Assistant Commissioner, Employee 
Plans and Exempt Organizations (EP/EO) Division level. normally called assist EPIEO Special Assistant STEVEN 
MILLER national office closing agreement matters. the Key District Offices, where the majority closing agreements 
occur, this authority delegated down the Division Chief level. 

o.s 
Name: 
Case Number: 
Questionable Exempt Organization 
5-97020022 
Examination Activities 
Exhibit 15.5 
Fonn 8052 (Rev. 8-/96) 	Department the Treasury-Internal Revenue Service 

correspondence control system track the receipt correspondence relating referrals. They also maintain copies all referrals. There procedure whereby the KDOs report back the National Office whether not referral was accepted for examination. However, would possible compare the correspondence files the AIMS system detennine those referrals that resulted examination. The KDOs should following IRM Section 7900 with respect referrals. The IRM says that when examination opened result referral, the referral attached the return. the referral provides information that particular issue regarding organization may arise the future, that infonnation should entered into "tickler file" for future retrieval and follow-up. the referral closed/surveyed, the information not maintained. unaware whether not the KDOs maintain log surveyed referrals. unaware any other established procedures regarding National Office field referral processing. unaware any operational quality reviews having been done the area information items the referral process. However, they are the process putting together "best practices" study this area. 
With respect detennination letters, the Exempt Organizations Division handles approximately 70,000 applications per year. The majority these are received and worked the appropriate KDO. Approximately 2,000 these per year are sent the National Office. These are applications involving issues where there clear precedent for the field base determination and/or large complex cases. Those applications 
which can "screened out" where determination can made based the face the application generally take approximately thirty sixty days process. Those which require legal analysis, taxpayer contact, etc can take several years. There process whereby organization can apply have their application expedited. The most common reason that application expedited when organization has grant pending determination their exempt status. believes that this procedure contained the IRM. has never been contacted anyone from within outside 
the Internal Revenue Service asking that delay particular organization's 
application detennination nor aware any other IRS employee receiving such request. 

{)_ 
o.s 
Name:  Case Number:  
Questionable Exempt Organization  5-9702-0022  
Examination Activities  
Exhibit 15.5  

Fonn 8052 (Rev. 8-/96) Department the Treasury -Internal Revenue Service 
Q_S 

Name:  Case Number:  
Questionable Exempt Organization  5-9702-0022  
Examination Activities  
Exhibit 15.5  
Fonn R052 (Rev 8-196) 

Subject Matter/Remarks the above date, EVELYN PETSCHEK, Assistant Commissioner, Employee Plans/Exempt Organizations Division, was interviewed under oath Special Investigator ROBERT JOHNSON and Audit Manager JOE STOLZ. PETSCHEK was provided with Privacy Act Notice 417. PETSCHEK stated essentially the following: 
The Exempt Organizations Division the National Office primarily responsible for developing annual workplan which provides direction the field with respect their time allocations. TI1e workplan directs the Key District Offices (KDOs) spend certain amount time various areas. These areas include Coordinated Exam Program (CEP) cases and National Projects. CEP cases are identified the field the KDO. The organizations are selected based their meeting certain Internal Revenue Manual (IRM) criteria for examination. National Projects are selected based suggestions from the field and National Office analysts. Once the project areas are agreed upon and included the workplan, the National Office pulls random samples and sends these the field for examination. The KDOs determine which organizations from the sample they actually examine. The KDOs may choose not examine any the samples. Another time allocation listed the workplan called Unallocated Time. The KDOs determine their own how direct their Unallocated Time. Examinations selected based referrals from outside sources fall within the KDO' Unallocated Time. The actual classification process the process selecting particular entities for examination conducted the KDO. She has never nor she aware anyone the National Office ever directing any KDO (formally informally) examine any specific organization. 
Information items/referrals are received the National Office from variety sources. They are derived from media press coverage, referrals from other IRS divisions, other government agencies and from private citizens. When such referrals are received, they are sent the appropriate KDO for whatever action they deem appropriate. some cases, the National Office may some preliminary research such determining whether the subject the referral fact tax exempt organization and/or research determine the appropriate KDO for referral. There are classification decisions made the National Office nor does the National Office direct the field work any particular referral. She unaware any formal procedures governing National Office's handling referrals. She believes there are IRM procedures which cover the KDO' processing referrals. There formal system place whereby referrals from the National Office the field are tracked. Any referral accepted the Ir n.. (..4-({ "'- ,,..;  Tre-.. "'? 
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