Internal Revenue Service

Internal Revenue Service

September 30, 2002

Information Quality

INTRODUCTION

The Internal Revenue Service disseminates a variety of information to the public.

Section 515 of the Treasury and General Government Appropriations Act for Fiscal Year

2001 [Public Law 106-554] requires Federal agencies to issue guidelines ensuring and

maximizing the quality, utility, objectivity, and integrity of disseminated information.

Background

In section 515(a) of the Treasury and General Government Appropriations Act for Fiscal

Year 2001(Public Law 106-554), Congress directed the Office of Management and

Budget (OMB) to issue, by September 30, 2001, government-wide guidelines that

“provide policy and procedural guidance to Federal agencies for ensuring and

maximizing the quality, objectivity, utility, and integrity of information (including

statistical information) disseminated by Federal agencies.” The OMB section 515

guidelines have been prepared to ensure and maximize the quality, utility, objectivity,

and integrity of information disseminated by Federal agencies. The guidelines direct

each federal agency to issue its own section 515 guidelines.

In response to the OMB directive, the guidelines presented here describe procedures the

Internal Revenue Service will employ to ensure the quality of its information products,

including their utility, objectivity, integrity, transparency, and reproducibility.

PURPOSE

This guidance should be used to ensure and maximize the quality of disseminated

information. The Internal Revenue Service’s guidelines are based on the Office of

Management and Budget (OMB) guidelines published in the Federal Register on

September 28, 2001, January 3, 2002, and February 22, 2002. These guidelines, as the

name suggests, are in the nature of guidance. They are not intended to be, and should not

be construed as, legally binding regulations or mandates. They are not legally

enforceable and do not create any legal rights or impose any legally binding requirements

or obligations on the agency. Nothing in these guidelines affects any otherwise available

judicial review of agency action.

SCOPE

The Internal Revenue Service will use these guidelines for disseminating quality

information (in the context of Section 515) from its respective organizations. The

guidelines describe the categories of information disseminated by the IRS and its

organizational components, as well as the steps taken to comply with Section 515.

The guidelines apply to information disseminated to the public in any medium including

textual, graphic, narrative, numerical, or audiovisual forms. The guidelines apply to

information that organizations post on the Internet. The guidelines also apply to IRS

sponsored distribution of information – where the IRS directs a third party to distribute

information or the IRS has the authority to review and approve the information before

release.

The guidelines do not override other compelling interests such as privacy, trade secrets,

intellectual property, and other confidentiality protections. The guidelines do not apply to

Hyperlinks to information that others disseminate. The guidelines do not apply to

opinions where the IRS’s presentation makes it clear that the material is an opinion or the

IRS’s views rather than fact. In addition, the guidelines do not apply to information

disseminated in the following contexts:

Agency employees or agency contractors or grantees, when information is

disseminated to only these recipients.

Disseminations intended to be limited to intra- or inter-agency use or sharing of

government information.

Correspondence with individual persons, press releases containing factual

information previously disseminated to the public, archival records, public filings,

subpoenas or adjudicative processes

Testimony of officials, information or drafting assistance provided to Congress

relating to pending or proposed legislation that has not been previously disseminated

to the public in another manner.

Response to requests for agency records under the Freedom of Information Act, the

Privacy Act, the Federal Advisory Committee Act, or other similar laws.

GUIDANCE

STATISTICAL INFORMATION

The modern U.S. income tax was enacted in 1913 with the passage of the sixteenth

amendment to the U.S. Constitution. Subsequently, the Revenue Act of 1916 required the

2

annual publication of statistics. Despite many revisions to the tax law, the original

requirement of that Act continues today. Specifically, the current Internal Revenue Code

states "The Secretary (of the Treasury) shall prepare and publish not less than annually

statistics reasonably available with respect to the operations of the internal revenue

laws..."

The IRS operates a data collection and dissemination system, called the Statistics of

Income (SOI) program, which uses the Federal tax system as a comprehensive source of

economic and financial information. The program collects data from different tax and

information returns that are processed in administrating the tax laws. During its nearly

90-year history, the main emphasis of the SOI program has been individual and

corporation income tax data. Other subjects based on other types of returns for which

data are currently collected, either annually or periodically, include partnerships, private

foundations and other exempt organizations.

The data gathered by the SOI program is used extensively for tax research and for

estimating revenue by tax analysts in the Department of the Treasury’s Office of Tax

Analysis (OTA) and the Congressional Joint Committee on Taxation (JCT). The third

major user is the Department of Commerce’s Bureau of Economic Analysis (BEA) which

relies on SOI data extensively for estimating components in the National Income and

Product Accounts. Many other Federal agencies are also users of SOI data, including the

Federal Reserve Board, the General Accounting Office, the Social Security

Administration, and the Health Care Financing Administration. Outside of the Federal

Government, SOI data are used by a broad array of tax practitioners, policy researchers,

demographers, economic analysts, consultants, business and trade associations, corporate

tax departments, State and local Governments, foreign Governments, universities, public

libraries, and the media, as well as the public at large. In addition, other areas of IRS use

SOI data for their internal operations.

Utility

IRS will make information products widely available and broadly accessible.

Since tax returns are protected from public scrutiny by law, strict procedures govern the

handling of returns and computer files containing such information. SOI's primary

customers (OTA and JCT) are authorized to receive detailed tax return (microdata) files,

so computer files of tax return information are regularly provided to them. However,

most other users of SOI data can only have access to summary tabulations. The purposes

and details describing such access are specified in Section 6103 of the Internal Revenue

Code.

SOI information is made publicly available through both printed publications and

electronic media. The Statistics of Income (SOI) Bulletin is published quarterly, with each

issue containing four to eight articles and data releases of recently completed studies, as

well as historical tables covering a variety of subject matter, from Treasury Department

3

tax collections to taxpayer assistance and tax return projections. IRS produces separate

annual "complete reports" on individual and corporation income tax returns, which

contain more comprehensive data than what are published in the Bulletin. The

Corporation Source Book is also published annually, presenting detailed income

statement, balance sheet, and tax data by industry and asset size. Periodically, IRS

produces special compendiums of research and analysis, covering topics such as

nonprofit organizations, estate taxation and personal wealth, and international business

activities. Research articles documenting technological and methodological changes in

SOI programs and other related statistical uses of administrative records are also

published in a series of reports. SOI is also responsible for releasing other IRS

information, including the Internal Revenue Service Data Book (containing tax

collections and other tax administration data), tax return projections, and microdata

records of exempt organizations.

SOI data on individuals, corporations, and other entities are available to the public on the

IRS World Wide Web site. Electronic media products available from SOI also include

magnetic tapes, CD-ROM's, diskettes, and files sent via e-mail. These products include

the Individual Public-Use Microdata File (for which taxpayer identifiers have been

removed); Exempt Organizations and Private Foundations Microdata Files (whose

returns are open to the public); the Corporation Source Book; individual income tax

return data shown by State, county, or ZIP code; and individual migration data shown on

either a State or county basis. SOI also has a Statistical Information Services (SIS) office

to facilitate the dissemination of SOI data.

IRS will keep informed of information needs through active and ongoing contact

with the user community and will provide vehicles for user input into our

information programs.

IRS keeps abreast of information needs through a variety of means, including meeting

with our customers, conducting user surveys, working with advisory committees, and

convening and attending conferences. Contact information is available, where

appropriate, on a variety of information products to allow for questions, comments, and

suggestions from users.

IRS statistical publications and other information products will be reviewed to

ensure that they remain relevant and timely and that they address current

information needs.

On the basis of internal product reviews and consultation with users, and in response to

changing needs and emphases, the content of ongoing information products is changed,

new products are introduced, and some products are discontinued.

Objectivity

Objectivity, as defined in the OMB quality guidelines (V.3.B), involves a focus on

ensuring that information is accurate, reliable, and unbiased and that information

products are presented in a clear, complete, and unbiased, well-documented manner.

4

Objectivity is achieved by using reliable data sources and sound statistical techniques, by

having information products prepared by qualified people using proven methods, and by

carefully reviewing the content of all information products.

Information products disseminated by IRS will be based on reliable, accurate data

that have been validated.

All of the information disseminated by IRS is based on reported data on tax or

information returns submitted by taxpayers. SOI data are collected only from nonamended and non-audit returns. The United States uses a system of self-assessment for

the collection of most federal taxes. Under this system, taxpayers, whether individuals or

corporations, compile the facts about their income, claim allowable deductions, and

calculate taxes they must pay, using forms provided for this purpose and filing all

documents by the date determine by tax laws. The facts are later checked against reports

of payers and recipients. Selected data items are computer entered for administrative

purposes, to determine the correct tax liability. Every week, as data are posted, a

probability sample from tax returns is selected for each SOI study. These sampled

returns are subject to additional data abstraction for SOI by specially trained technicians.

The data thus extracted from the sampled returns are tested for consistency and any errors

detected are then resolved. Due to substantial penalties for misreporting, the income and

expenditure data reported on tax returns have proven to be more reliable than comparable

survey data.

IRS samples will be conducted using methodologies that are consistent with

generally accepted professional standards for all aspects of sampling design and

implementation.

IRS employs and documents accepted professional standards and practices for all its SOI

studies, including sample frame development, sample design, testing sample selection

computer programs, data editing, analysis of sampling and coverage errors, imputation of

missing data, weighting, and variance estimation.

Tax returns are filed and administratively processed at one of ten IRS regional sites,

called "service centers." Once processed, IRS compiles selected information from most

return forms into a computerized "master file" system, which is the informational

backbone of the agency. Most SOI operations begin by sampling returns from the master

file system; the master file offers a sampling frame that enables use of sophisticated and

efficient sample designs.

Statistics compiled for the SOI studies are generally based on stratified Bernoulli samples

of tax or information returns. As returns are processed into the master file system, they

are assigned to sampling classes (strata), based on criteria such as size of income or assets

(or other measures of economic size), industrial activity, accounting period, or the

presence of certain supplemental forms or schedules. Each taxpayer, whether an

individual or a business, has a unique number--- the social security number (SSN) for

individuals or the employer identification number (EIN) for businesses. These unique

5

taxpayer identification numbers are used as the seed to generate a pseudo-random number

which, along with the sampling strata, determines whether a given return is to be selected

for the SOI sample. The probability of a return being designated for the SOI sample

depends on the sampling rate prescribed for its sample class or stratum and may range

from a fraction of 1 percent to 100 percent.

The samples are selected from each stratum over the appropriate filing periods. Thus,

sample selection can continue for a given study for several calendar years because of the

prevalence of fiscal (non-calendar) year reporting.

All data employed in the preparation of information products will be compiled

using acceptable procedures implemented by qualified professional staff.

After sampling, the relatively few data items pulled electronically from the master file

system are substantially augmented with additional items key-entered from hardcopies of

taxpayers' returns. Statistical abstracting can take as little as a few minutes for a simple

return, to as long as several days for a large corporate return.

IRS has built a network of mid-range servers in selected service centers that are dedicated

to SOI statistical processing. "Hub" sites are located in Ogden (Utah) and Covington

(Kentucky), with other processing centers located in Atlanta (Georgia), Austin (Texas),

and Kansas City (Missouri). The processing system uses on-line transaction processing,

so that all data capture operations are completed in a single pass. One editor is

responsible for ensuring the validity of all data processing for a given return.

Several extensive quality review processes are used to ensure the quality of the data. The

review processes begin at the sample selection stage with weekly monitoring of the

sample to ensure that the proper number of returns was being selected. They continue

through the data collection, data cleaning, and data completion procedures with

consistency testing. Part of the review process includes extensive comparisons between

the final statistics and previous year statistics as well as external data. Great amounts of

effort are made at every stage of processing by qualified professional staff to ensure data

integrity.

Due to substantial penalties for misreporting, the income and expenditure data reported

on tax returns have proven to be more reliable than comparable survey data. Even so, IRS

employees go to great lengths to protect against nonsampling errors, such as those due to

taxpayer reporting variations or inconsistencies, or data processing errors. In order that

final statistics are consistent and reliable, IRS economists develop extensive on-line tests

and error resolution procedures that are applied to each sampled return. The tests and

correction procedures are based on the structure of the tax laws and forms, generally

accepted accounting principles, and the improbability of various data combinations.

Editors in service centers and IRS economists statistically edit data items in order to

make each sampled return internally consistent. Missing data problems arise, albeit

infrequently (under 1 percent of the time). Missing items can be obtained through direct

contact with taxpayers, or be estimated through imputations based on other return data,

6

prior-year data for the same taxpayer, or same-year data from a "statistically similar"

return. IRS economists serve as subject matter experts to the editors in answering their

questions, and also resolve errors in the more difficult cases.

Subsamples of returns are independently reprocessed and analyzed for a quality

evaluation. Additionally, in order to provide high quality statistics, economists conduct

on-line review trips to the processing centers and review quality logs written by editors.

All estimation procedures will be prepared using statistically sound procedures

designed by qualified professional staff.

On the whole, the IRS approach to making statistical summaries, using design-based

inferences for the calculation of estimates and their standard errors, is quite straightforward. In applications, the probability with which a return is selected for an SOI

sample depends on the sampling rate prescribed for the stratum in which it is classified.

Weights are computed by dividing the population count of returns filed for a given

stratum by the count of sample returns for the same stratum after adjusting for outliers

and missing returns.

In some studies, it is possible to improve the estimates by employing post-strata, based on

supplemental criteria or refinements of those used in the original stratification. Weights

are then computed for these post-strata using additional population counts – oftentimes

with fairly computer-intensive methods, such as raking ratio estimation.

Model-assisted estimates and bootstrapping techniques have been explored for selected

SOI programs, but their deployment remains infrequent. A combination of randomization weighting and model-assisted techniques is now used to make preliminary

estimates prior to the completion of sampling.

Data sources, sampling errors, and disclosure limitation methods will be

documented in publications, either for the publication as a whole or for individual

tables.

Documentation in SOI publications contains information on data sources including

definitions and specifications of variables. Report documentation also includes, where

appropriate, information on sampling errors and data limitation, as well as a description

of rules or techniques for avoiding disclosure of confidential information.

All information products will be edited and proofread before release to ensure

clarity and coherence of the final report.

Text is edited to ensure that the report is easy to read and grammatically correct, thoughts

and arguments flow logically, and information is worded concisely and lucidly. Tables

and charts are edited to ensure that they clearly and accurately illustrate and support

points made in the text and include concise but descriptive titles. Tables and charts

indicate the unit of measure and the universe being examined, and all internal labels

7

(column headings, row stubs, and panel headings) accurately describe the information

they contain. All changes made to a manuscript during the editing process are checked by

a proofreader, reviewed and approved by the author.

A comprehensive errata policy will inform users of both printed and Web-based

publications when an error has been found and corrected.

If an error is detected before an initial mailing, IRS includes an errata notice with the

mailing. If the mailing has been sent out, an errata sheet is issued with all subsequent

publications that are disseminated and, where appropriate, the errata sheet is sent to all

those who received the initial mailing. Errata notices are placed on the first page of the

Web version to inform both new and repeat site visitors about the mistake, and the

corrected version of the document is posted on the Web.

Integrity

Integrity, as defined in the OMB quality guidelines, refers to the security of information

from unauthorized access or revision to ensure that the information is not compromised

through corruption or falsification.

To ensure the integrity of its information, IRS will employ rigorous controls that have

been identified as representing sound security practices.

Tax returns are protected from public scrutiny by law, and strict procedures govern the

handling of returns and computer files containing such information. IRS has programs

and policies in place for securing its resources as required by the Internal Revenue Code.

In order to prevent disclosure of information about specific taxpayers or businesses in

SOI published tables, a weighted frequency (and the associated amount, where

applicable) of less than 3 is either combined with data in an adjacent cell(s) so as to meet

the criteria, or deleted altogether. Similar steps are taken to prevent indirect disclosure

through subtraction. However, combined or deleted data are included in the appropriate

totals. Most data on tax-exempt, nonprofit organization are excluded from disclosure

review because the Internal Revenue Code and regulations permit public access to most

of the information reported by these organizations.

Transparency and Reproducibility

For the purpose of these guidelines, transparency refers to a clear description of the

methods, data sources, assumptions, outcomes, and related information that will allow a

data user to understand how an information product was designed and produced. SOI

guidelines call for clear documentation of data and methods used in producing estimates

and projections. Their implementation will ensure the transparency of our disseminated

information.

Reproducibility of information refers to the ability, in principle, for a qualified individual

to use the documentation of methods, assumptions, and data sources to achieve

comparable findings subject to an acceptable degree of imprecision. In practice,

8

opportunities for direct reproducibility are often limited by restrictions on access to

confidential information. Nevertheless, the procedures described above for data

selection, preparation and dissemination provide sufficiently robust checks at all stages of

the process to insure the highest quality information products possible.

INFORMATION IN THE INTERNAL REVENUE MANUAL (IRM)

The IRM is the single official source for IRS policies, directives, guidelines, procedures

and delegations of authority in the IRS. The IRM represents the keystone of a suite of tax

administration tools that meet the needs of the IRS business unit employees. The public

and practitioners have access to most of the IRM via the official IRS web-site and the

IRS public Reading Room. Other information in the IRM is classified as Official Use

Only. The IRM consists of the following:

•

•

•

Policy statements are major decisions of the Commissioner and other specified

executives that govern and guide personnel in the administration of the tax laws.

Procedures and guidelines tell IRS employees how to serve taxpayers in

administering the nations’ tax laws.

Delegations of authority are official notification by the Commissioner of certain

rights and responsibilities delegated to subordinate officials. Delegations of authority

effecting taxpayers are also published in the Federal Register.

The IRM is broken down into parts, chapters and sections. Being very structured, authors

must adhere to a specific page format and numbering scheme. A review process is in

place where stakeholders are provided the chance to correct or modify potential changes

to the procedural guidance before publication. The specific business unit owner within

the IRS is responsible for ensuring that all IRM content is accurate, up to date, and

cleared through proper stakeholders. The modernization of the IRS required a redesigned

IRM based on business processes. This will simplify researching the IRM for everyone.

Within the IRS, the Servicewide Policy, Directives and Electronic Research organization

is responsible for overseeing the content owners and authors of the IRM to ensure they

publish information that is current and correct. The goal is to eliminate non-value added

and duplicative information. A network of business unit coordinators has been

established throughout the IRS to oversee their respective organizations’ portion of the

IRM. Authors are also taught writing techniques to improve quality. The IRS holds

annual symposiums with commercial vendors of the IRM to increase its utility to

practitioners by striving to make sure the IRM is consistent across all of the vendors.

During these meetings vendors are provided with plans for process improvements, new

technologies and at the same time the IRS listens to feedback to improve the accuracy

and timeliness of the public IRM. A historical file of the IRM is also maintained.

RESEARCH INFORMATION

The IRS National Research Program (NRP) disseminates some information about the

Program including a description of its objectives, the guiding principles under which it

operates, the design of studies, and the nature of its products. This information is shared

9

with the public through press releases, presentations made to external stakeholder groups,

program description in the Internal Revenue Manual (IRM) and various written reports,

including those issued by GAO. The quality of the disseminated information is based on

knowledge of its developers subject to extensive review and approval by senior

management in the IRS.

The IRS NRP also disseminates some products for public use. To date, NRP has

produced top-level compliance rates for return filing (individuals only) and tax payment.

The measurements were added to the Organizational Performance web-site which

provides other top-level IRS measures, e.g. customer satisfaction ratings. In the future

NRP will also produce and disseminate a measurement of the top-level voluntary

reporting rate. All of the compliance measurements will be produced based on

requirements that are reviewed, approved, programmed and thoroughly tested to ensure

accuracy.

In general, NRP does not release micro-level data to non-IRS individuals (except,

possibly, GAO or TIGTA). NRP , on occasion, provides summary-level data with

appropriate statements about statistical reliability of the data. In addition, to obtain

analytical assistance form the academic community, IRS may enter into agreements with

academia researchers (and their employers-universities) to complete needed reasearch.

The work of these researchers will be supervised by the IRS and they will adhere to all

restrictions on disclosure of taxpayer information.

PROCUREMENT INFORMATION

The IRS disseminates information to an audience of potential contractors and other

interested parties in the form of solicitations and pre-solicitation announcements,

including:

Request for Proposal (RFP)

Invitation to Bid (IFB)

Request for Quotations (RFQ)

Request for Information (RFI)

Request for comments (RFC)

The issuances of these announcements are governed by the Federal Acqusition

Regulation (FAR). FedBizOpps is the single government point-of-entry (GPA) for

Federal government procurement opportunities over $25,000. Government buyers are

able to publicize their business opportunities, including solicitations, by posting

information directly to FedBizOpps via the Internet. Commercial vendors use

FedBizOpps to identify Federal markets for their products and services.

All announcements include a point of contact for inquiries. The FAR, as well as

Departmental and IRS policies and regulations establish procedures that can be used to

address the complaint process requirements of the Data Quality Act.

10

IRS also posts many solicitations and announcements on its own Internet site. As noted

above, Federal, Departmental and local policies and regulations establish procedures that

can be used to address the complaint process requirements of the Data Quality Law.

Utility

The information is useful to its intended audience because it is a self-selecting audience,

including vendors and potential offerors who are interested in entering into contracts with

the IRS.

Objectivity

The Competition in Contracting Act (CICA) and the Federal Acquisition Regulation

(FAR) govern contracting in the Federal government and ensure that competition is

maximized.

Integrity

Information security is maintained in accordance with applicable policies and regulations,

including the Privacy Act, FAR requirements, IRS Disclosure requirements and

information security requirements.

The IRS also publishes a Guide for Preparing and Submitting Unsolicited Proposals

which is posted on the Procurement Internet site. In accordance with FAR Part 15.6, it

establishes procedures for the submission of an unsolicited proposal and its consideration

within the IRS. The guide provides a point of contact in the Office of Procurement

Policy.

OPERATIONAL INFORMATION

The four Operating Divisions within the IRS serve the various taxpayer segments of the

public including small businesses, large and small corporations as well as tax-exempt

organizations and government entities. On their own, the Operating Divisions issue only

a limited number of information products to the public as stand-alone products. These

products include reports to Congress, publications, customer outreach documents, media

releases, and presentations made to professional and practitioner organizations

concerning tax law and Service initiatives.

Information shared with the public:

•

Tax Forms and Publications enable taxpayers to understand and meet reporting

requirements set forth in the Internal Revenue Code and related Treasury regulations.

11

•

Public Guidance includes formal guidance, often published in the Internal Revenue

Bulletin, as to the correct interpretation and application of tax law. It includes

regulations, revenue procedures, announcements, and notices.

•

Operational Guidance and Educational Materials include instructions provided to

employees to assist them in carrying out the technical aspects of their responsibilities.

It includes examination guidelines, alert guidelines, and other technical training

materials. It also includes continuing professional education texts, and materials

prepared for technical workshops around the country. This material usually finds its

way to the public.

•

Outreach Documents include material, usually less technically complex and inclusive

than that identified above as public guidance, which is prepared to provide the

interested public with an introduction to the tax laws administered by the Service. In

some instances, outreach documents are issued jointly with other federal agencies.

Outreach Documents may be in paper or electronic format. Electronic format

documents include websites, electronic newsletters, educational videos, and CD

Roms.

Operating Divisions Data Sources

Data is collected primarily from sources throughout the Operating Divisions. Depending

on the subject matter, information may also be obtained from other IRS functions or

external sources such as other federal agencies or professional or practitioner groups.

The information gathered and disseminated is used to respond to specific requests for

information on IRS activities, to provide advance information on upcoming IRS

programs and/or activities, and to assist taxpayers in complying with tax law.

Utility

Operating Division information is made available to the appropriate audience through

internal contacts. Information is also distributed publicly through websites, publications,

media contacts, and ongoing outreach efforts with professional and practitioner groups

and other stakeholder groups.

The Operating Divisions stay abreast of information needs through a variety of means

including ongoing stakeholder relationships, speeches before professional and

practitioner groups, measurements of customer satisfaction, consultation with advisory

committees, and convening and attending conferences with professional and practitioner

groups.

All information products go through multiple layers of review (including Operating

Divisions, and, as appropriate, other IRS functions, the Department of Treasury, and

other federal agencies. On the basis of internal product review, consultation with users

12

and other interested parties, and in response to changing tax law, needs and emphases, the

content of information products is changed, new products are introduced, and some

products are discontinued.

Objectivity

Information disseminated by the Operating Divisions is based on data obtained during

program administration or program or issue analysis. Statistical data is obtained from

returns or case information obtained from either the field or headquarters, and validated

by analysts prior to issuance of any information products. In addition, data may also be

reviewed and validated by other IRS functions or federal agencies.

The Operating Divisions use quality review processes to ensure the quality of data used

or produced. Subject matter experts are responsible for ensuring the accuracy and

integrity of all information products.

Documentation in products contains information on sources, limitations inherent in the

sources, and, where appropriate, on the sampling techniques used.

Text is edited to ensure that the information products are easy to read and grammatically

correct, that thought and arguments flow logically, and that information is worded

concisely. Tables and charts are edited to ensure that they clearly and accurately

illustrate and support points made in the text and include concise but descriptive titles.

Tables and charts indicate the unit of measure, and all internal labels (column headings,

row stubs, and panel headings) accurately describe the information they contain.

Changes made to an information product during the review process are also checked for

accuracy, clarity and coherence with the entire product.

Integrity

The Operating Divisions have programs and policies in place for securing resources as

required by the Internal Revenue Code and the Internal Revenue Manual. Information is

protected from unauthorized access or revision, to prevent corruption of falsification of

information. The Operating Divisions ensure compliance with Government-wide,

Treasury-wide and IRS security requirements and OMB Circulars A-123, A-127 and A130 when disseminating information.

CRIMINAL INVESTIGATION INFORMATION

Criminal Investigation (CI) is the law enforcement arm of the IRS. It is CI alone that is

charged with investigating potential criminal violations of the Internal Revenue Code

(IRC). CI's top priority is the investigation of violations of the tax laws. However, CI

special agents (SAs) lend their financial investigative expertise to money laundering and

narcotics investigations conducted in conjunction with other law enforcement agencies at

the local, state and federal levels.

13

Although the investigation of people with illegal income is an important aspect of CI

enforcement activities, it is only one part of a balanced enforcement program that

attempts to ensure compliance among all groups of taxpayers. Over the years,

investigative activity has resulted in individuals being convicted for tax evasion in almost

every occupation, profession and segment of the economy, and has also resulted in the

convictions of several corporations.

Information shared with the public:

•

•

•

•

CI maintains a web site that is accessible to the public that describes what CI does,

keeps the public apprised of potential tax scams, and makes the public aware of

current enforcement efforts.

CI develops brochures that describe the role and purpose of CI in the IRS and federal

law enforcement for distribution to the public. The documents also encourage

compliance with the tax laws.

CI provides Asset Forfeiture data, in standardized reports, prepared from CI’s Asset

Forfeiture Tracking System (AFTRAK) database, to the Treasury Executive Office of

Asset Forfeiture, who produces reports that are shared with the public.

CI publishes an annual report that highlights CI’s national operations for distribution

to the public. Data for the report comes from the Criminal Investigation Management

Information System (CIMIS). In general, CI only shares information from

investigations that are public record. Criminal Investigation statistics are reported as

aggregated information and non public record statistics from specific investigations

are never shared.

CI Data Sources

CI Management Information System

Effective implementation of the mission of CI requires accurate, real-time information to

be available to all levels of management throughout CI. The CI Management

Information System provides the vehicle to collect, compile, and deliver this information.

Much of the data contained in this system is also gathered in response to congressional

mandates, Treasury regulations, OMB requirements, and IRS directives. It is relied upon

heavily for preparing congressional testimony and in releasing information to the media.

CI Management Information System is currently the management tool used for tracking

the type, status and progress of CI investigations as well as the time expended on

investigations by CI employees. The current system has been operational for a number of

years and is the backbone of the CI information management function.

Asset Forfeiture Tracking

Internal Revenue Code 7301 provides for the forfeiture of taxable property, which is used

to defraud the United States of tax. Internal Revenue Code 7302 provides for the seizure

and forfeiture of property intended for use in violation of the Internal Revenue laws.

Title 18 United States Code (USC) provides for the forfeiture of property intended for use

14

in violation of the Money Laundering laws. Title 31 USC provides for the forfeiture of

property intended for use in violation of the Currency laws.

Seizures are numbered and tracked on CIMIS and AFTRAK. Criminal Investigation

Management Information System tracks the time spent on the forfeiture actions and

AFTRAK tracks the assets themselves.

The CIMIS and AFTRAK databases are the primary source of data for information that is

shared with the public. What follows are descriptions of how these two databases

incorporate the OMB and IRS information quality guidelines.

Utility

Information from CI databases achieves its usefulness by being customer defined.

Customers make specific requests for the information they need from CIMIS and

AFTRAK databases and they determine the format of information. The information

derived from CIMIS is used in the CI Annual Report and the information derived from

AFTRAK is used in the Treasury Forfeiture Fund Accountability Report.

Treasury publishes the Treasury Forfeiture Fund Accountability Report and the

information provided by CI from AFTRAK is based on Treasury requests. Treasury

determines the utility of the AFTRAK data provided by CI.

Criminal Investigation determines the utility of (1) the Annual Report, and (2) brochures,

through meetings with its customers and internal reviews of the products.

Criminal Investigation Management Information System and AFTRAK are scheduled to

undergo a software and hardware upgrade to integrate into one system. Aside from

security enhancements, there will be an increase in data that is captured and stored in the

new system. This can be a source of new information for CI customers.

Objectivity

Criminal Investigation Management Information System and data (including information

derived from CIMIS and AFTRAK) is population data and is not subject to errors from

sampling.

Information from CIMIS achieves reliability and accuracy through managerial review at

the field office prior to and after data is input into CIMIS. Criminal Investigation’s

Review and Program Evaluation (RPE) section regularly reviews CI investigations, of

which input into CIMIS is a part. Review and Program Evaluation, with the assistance of

a select group of field personnel, reviews field offices on a three-year cycle.

Information from CIMIS achieves reliability and accuracy through internal CIMIS

validity checks that compare data input to valid values and identifies errors at the time of

input.

15

To ensure CIMIS reliability, once a fiscal year’s data has been secured and validated, a

‘snapshot’ of that data is kept and this is constantly referred to when comparing fiscal

years. Since investigations can occur across fiscal years, from initiation to final

resolution, investigations are continuously updated. The ‘snapshot’ data is never changed

and is consistently used to report CI statistics for that fiscal year.

Asset Forfeiture Tracking undergoes a yearly audit by Treasury as well as monthly

reconciliation by the Warrants and Forfeitures section to achieve reliability and accuracy.

Asset Forfeiture Tracking reports are based on Treasury guidelines from the Treasury

Executive Office of Asset Forfeiture. Treasury sets the requirements for accuracy of data

provided to that office. In addition, to insure the accuracy of the database, each field

office conducts semi-annual physical inventories of seized assets.

Independent appraisals of seized assets are used as input into AFTRAK.

Asset Forfeiture coordinators in each field office provide information to

CI Headquarters. Criminal Investigation headquarters and Asset Forfeiture coordinators

in the field review AFTRAK for accuracy.

To achieve accuracy and reliability published material goes through several levels of

review prior to publication.

All case related statistics derived from CIMIS that are used in published material are

reviewed by CI’s research section.

Published material in the form of brochures undergo managerial review within CI’s

Office of Communications and Education and IRS Office of Chief Counsel as well as

final review by CI senior management prior to release to the public.

Published material in the CI Annual Report also undergoes the same level of review.

Criminal Investigation’s office of Financial Crimes has responsibility for the CI Annual

Report. Aside from statistics from CIMIS, information about CI’s investigations that are

published in CI’s Annual Report is from public court records. Criminal Investigation

analysts write the published material in the Annual Report, it undergoes review within

Financial Crimes as well as by CI’s Office of Communications and Education and final

review by IRS Senior Management prior to release.

Information on CI’s web site is published by CI’s Office of Communications and

Education and undergoes managerial review within that office prior to publishing on CI’s

web site. Information about investigations published on CI’s web site is also from public

court records.

Integrity, Transparency, and Reproducibility

Meeting C-2 security guidelines ensures integrity of CI data in CIMIS and AFTRAK.

Access to the systems are provided by:

•

Criminal Investigation’s National Operations Center—to give access to CI’s domain.

16

•

•

•

Asset Forfeiture Tracking security coordinators who provide access to AFTRAK

through the software by assigning passwords.

Criminal Investigation Management Information System security coordinators who

provide access to CIMIS through the software by assigning passwords.

Access to CIMIS and AFTRAK are controlled and monitored.

As part of the upgrade to CIMIS and AFTRAK, security and audit capabilities will be

enhanced. These increased capabilities can track users accessing the system, to ensure

integrity.

Since access to CI data is highly restricted, CI can explain how data is derived. The IRM

describes what data CI captures in CIMIS and AFTRAK. Internal Revenue Manual

descriptions of what are captured in CIMIS and AFTRAK ensures transparency.

Researching public records can reproduce information in CI publications. Data is backed

up and secured to be able to reproduce reported statistics.

PROCESS

Information Collection Quality Review

The IRS is already required to demonstrate in their Paperwork Reduction Act (PRA)

submissions to OMB the ‘practical utility’ of a proposed collection of information the

IRS plans to disseminate. Additionally, for all proposed collections of information that

will be disseminated to the public, IRS should demonstrate in their PRA clearance

submissions to OMB that the proposed collection of information will result in

information that will be collected, maintained and used in a way consistent with OMB

and IRS information quality guidelines.

Administrative Complaint Mechanism

In accordance with Section 515 of Public Law 106-554, codified at 44 U.S.C. Paragraph

3516, note, IRS has developed a procedure to allow affected persons to seek and obtain

correction of information IRS maintains and disseminates. This may vary according to

the frequency by which the data is disseminated and will be determined by IRS officials.

The IRS will respond to complaints and/or requests for correction within 60 days of

receipt.

To seek a correction of information under Section 515 parties must:

•

State that the request for correction of information is submitted under Section 515 of

Public Law 106-554.

•

Include name, mailing address, telephone number and organizational affiliation, if

any. (Optional –fax number and e-mail address). This information is needed to

respond to the request and contact parties, if required.

17

•

Clearly describe the information believed to be in error and wanted corrected.

Include the name of the report or data product where the information is located, the

date of issuance and a detailed description of the information to be corrected.

•

State how the data affected the party and how correction would benefit the party,

Treasury or the IRS.

•

State specifically why the information should be corrected and, if possible,

recommend specifically how it should be corrected for failure to comply with OMB,

Treasury, or IRS information quality standards. Provide supporting documentary

evidence, such as comparable data or research results on the same topic, to help in the

review of your request.

Based on a review of the information provided, the IRS will:

•

Determine whether a correction is warranted and, if so, what action to take. The

nature, influence and timeliness of the information involved, the significance of the

correction on the use of the information, and the magnitude of the correction will

determine the level of review and corrective action. Requests for correction will be

sent to the office that originally disseminated the information for a determination on

the corrective action to be taken.

•

Respond by letter, e-mail, or fax. The response will explain the findings of the

review, and the actions IRS will take.

•

Respond to request for correction of information within sixty calendar days to

resolve, you will be notified that more time is required, state the reason why, and

include an estimated date.

If the request for correction of data is denied, parties will be informed of their rights to an

administrative appeal and told how to apply for it.

Correction of information under Section 515 must be in writing and sent to IRS by mail

at the following address:

Chief Information Officer

Information Quality Program Coordinator

Internal Revenue Service, OS:CIO:I

1111 Constitution Ave. NW, IR 3137

Washington, DC 20224

Correction of information under Section 515 may also be faxed to the IRS at (202) 6225029.

18

The IRS is authorized to collect the information provided under Section 515 of the

Treasury and General Government Appropriations Act for Fiscal Year 2001 (Public Law

No. 106-554 codified at 44 U.S.C. paragraph 3516). It is needed to process requests and

allows the IRS to reply accordingly. The information is not required, but failure to

provide it may prevent your request from being processed. The information you furnish

is rarely used for any purpose other than to process and respond to requests. However,

IRS may disclose information provided if authorized or required by Federal Law, such as

the Privacy Act.

After the petitioner receives a response or decision from the IRS on a complaint, the

incumbent must send their appeal of the ruling within 45 days. The agency must respond

to appeals and/or requests for correction within 60 days of receipt. If the appeal requires

an extended period of time for processing, the IRS must notify the petitioner.

Information on which the Agency Requested Public Comments

Certain disseminations of information include a comprehensive public comment process

(e.g., notices of proposed rulemaking (NPRM), regulatory analyses, and requests for

comment on an information collection subject to the Paperwork Reduction Act). The

administrative complaint mechanism described in these guidelines normally would not

apply to such documents. Persons questioning information disseminated in such a

document should submit comments as directed in that document. However, in cases

where the IRS disseminates a study, analysis, or other information prior to the final IRS

action or information product, requests for correction will be considered prior to the final

IRS action or information product in those cases where the IRS has determined that an

earlier response would not unduly delay issuance of the IRS action or information

product and the complainant has shown a reasonable likelihood of suffering actual harm

from the IRS’s dissemination if the IRS does not resolve the complaint prior to the final

IRS action or information product.

REPORTING REQUIREMENTS

On a fiscal-year basis, the IRS will submit a report to the Deputy Assistant Secretary for

Information Systems and Chief Information Officer (DASIS/CIO). The report shall

identify the number and nature of complaints received regarding compliance with the

guidelines and explain how the complaints were resolved. The IRS will submit the report

by November 1, of each following year with the first report due November 1, 2003.

Periodically, there will be internal review and update of the guidelines to ensure and

maximize the quality of disseminated information.

19

APPENDIX A - DEFINITIONS

Affected Persons are people who may benefit or be harmed by the disseminated

information. This includes persons who are seeking to address information about

themselves as well as persons who use information.

Quality is an encompassing term comprising utility, objectivity, and integrity. Therefore,

the guidelines sometimes refer to these four statutory terms, collectively, as "quality."

Utility refers to the usefulness of the information to its intended users, including the

public. In assessing the usefulness of information that the agency disseminates to the

public, the agency needs to consider the uses of the information not only from the

perspective of the agency but also from the perspective of the public. As a result, when

transparency of information is relevant for assessing the information's usefulness from

the public's perspective, the agency must take care to ensure that transparency has been

addressed in its review of the information.

Objectivity involves two distinct elements: presentation and substance.

“Objectivity” includes whether disseminated information is being presented in an

accurate, clear, complete, and unbiased manner. This involves whether the

information is presented within a proper context. Sometimes, in disseminating certain

types of information to the public, other information must also be disseminated in

order to ensure an accurate, clear, complete, and unbiased presentation. Also, the

agency needs to identify the sources of the disseminated information (to the extent

possible, consistent with confidentiality protections) and, in a scientific, financial, or

statistical context, the supporting data and models, so that the public can assess for

itself whether there may be some reason to question the objectivity of the sources.

Where appropriate, data should have full, accurate, transparent documentation, and

error sources affecting data quality should be identified and disclosed to users.

In addition, "objectivity" involves a focus on ensuring accurate, reliable, and unbiased

information. In a scientific, financial, or statistical context, the original and

supporting data shall be generated, and the analytic results shall be developed, using

sound statistical and research methods.

Integrity refers to the security of information -- protection of the information from

unauthorized access or revision, to ensure that the information is not compromised

through corruption or falsification.

Information for purposes of the data quality law, Section 515, means any communication

or representation of knowledge such as facts or data, in any medium or form, including

textual, numerical, graphic, cartographic, narrative, or audiovisual forms. This definition

includes information that an agency disseminates from a web page, but does not include

the provision of hyperlinks to information that others disseminate. Unlike the OMB

Circular 130 definition, this definition does not include opinions, where the agency's

20

presentation makes it clear that what is being offered is someone's opinion rather than

fact or the agency's views.

Government information means information created, collected, processed, disseminated,

or disposed of by or for the Federal Government.

Information dissemination product means any book, paper, map, machine-readable

material, audiovisual production, or other documentary material, regardless of physical

form or characteristic, an agency disseminates to the public. This definition includes any

electronic document, CD-ROM, or web page.

Dissemination means agency initiated or sponsored distribution of information to the

public (see 5 C.F.R. 1320.3(d) (definition of "Conduct or Sponsor"). Dissemination does

not include distribution limited to: government employees or agency contractors or

grantees; intra- or inter-agency use or sharing of government information; and responses

to requests for agency records under the Freedom of Information Act, the Privacy Act,

the Federal Advisory Committee Act or other similar law. This definition also does not

include distribution limited to: correspondence with individuals or persons, press

releases, archival records, public filings, subpoenas or adjudicative processes.

Influential, when used in the phrase "influential scientific, financial, or statistical

information", means that the agency can reasonably determine that dissemination of the

information will have or does have a clear and substantial impact on important public

policies or important private sector decisions.

Reproducibility means that the information is capable of being substantially reproduced,

subject to an acceptable degree of imprecision. For information judged to have more

(less) important impacts, the degree of imprecision that is tolerated is reduced

(increased).

21

APPENDIX B – LAWS, REGULATIONS, AND REFERENCES

Public Law 106-554; H.R. 5658, “Treasury and General Government Appropriations Act

for Fiscal Year 2001, Section 515.”

Public Law 104-13, “Paperwork Reduction Act of 1995.”

Public Law 104-182, Sec. 103, Subsec. 1(b)(3), “Safe Drinking Water Act Amendments

of 1996.” (Risk assessment, management, and communication.)

Public Law 100-235, “Computer Security Act of 1987.”

(Site for public laws: http://www.gpoaccess.gov/plaws/index.html)

OMB Circular A-130, “Management of Federal Resources.” (Appendix III, Security of

Federal Automated Information Resources)

OMB Circular A-110, “Uniform Administrative Requirements for Grants and Other

Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit

Organizations.”

(OMB circulars can be found at: http://www.whitehouse.gov/omb/circulars/index.html.)

Federal Register Vol. 66, September 28, 2001, “Guidelines for Ensuring and Maximizing

the Quality, Objectivity, Utility, and Integrity of Information Disseminated by Federal

Agencies.”

Federal Register Vol. 67, No. 2, page 369, January 3, 2002, “Guidelines for Ensuring

and Maximizing the Quality, Objectivity, Utility, and Integrity of Information

Disseminated by Federal Agencies; Final Guidelines.”

Federal Register Vol. 67, No. 36, page 8452, February 22, 2002, “Guidelines for

Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of Information

Disseminated by Federal Agencies; Republication.”

(OMB site for Federal Register announcements can be found at

http://www.whitehouse.gov/omb/fedreg/index.html)

22