BSA-CS is responsible for identifying and delivering cases to BSA field exam. Those cases are identified from a variety of sources. For a list of BSA entities, subject to the BSA under Title 31 Chapter X, refer to IRM 4.26.3.2.1 and for Non-Financial Trades and Businesses (NFTBs) subject to Form 8300 reporting requirements under Title 26 IRC 6050I and Title 31 USC 5331, refer to IRM 4.26.3.3.1.

Fairness in case selection. Inventory is selected based on level of risk of non- compliance to ensure "fairness" in the inventory selection processes. There are three aspects which apply to fairness in case selection.

Authority for the IRS to conduct BSA examinations includes the following sources:

Director, Exam Case Selection is the executive responsible for the oversight and program coordination of workload selection and delivery of inventory for SB/SE BSA Examination.

BSA Senior Manager, Case Selection is the manager responsible for the oversight of selection of cases and delivery of inventory for SB/SE BSA Field.

BSA Group Manager, Case Selection is the manager responsible for the selection of cases and delivery of inventory within the SB/SE BSA Territories.

Program Reports-The following reports are used to monitor the identification, selection and delivery of inventory:

Program effectiveness - annual reviews are completed on all operational functions.

All information management systems have safeguard measures in place that address key components of Information Technology (IT) security requirements to restrict access to sensitive data.

The following is a list of acronyms used throughout this IRM:

The IRS adopted the Taxpayer Bill of Rights in June 2014. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of duties in accord with taxpayer rights. For additional information see the Taxpayer Bill of Rights.

Helpful information sources included:

BSA CS identifies entities for which IRS has BSA examination authority. 31 CFR Part 1010 - Enforcement, 31 CFR 1010.81(b)(8), Enforcement, delegates to the IRS examination authority to ensure BSA compliance over all financial institutions except brokers or dealers in securities, mutual funds, futures commission merchants, introducing brokers in commodities, commodity trading, or financial institutions not currently examined by Federal bank supervisory agencies for soundness and safety. Most IRS delegated entities are commonly referred to as NBFIs. NBFIs include, but are not limited to:

MSBs, subject to certain transaction thresholds under IRS jurisdiction include:

The following sources may be used to identify NBFIs:

The Integrated Data Retrieval System (IDRS) or other tax-based systems may not be used to research information for Title 31 BSA compliance.

The Title 31 NBFI Database is updated when a new NBFI entity is identified.

ECS in partnership with Research Applied Analytics and Statistics (RAAS) and Specialty Policy develop and implement workload initiatives which use a series of analytical approaches and tools available on the Compliance Data Warehouse to evaluate FinCEN data for lead identification.

BSA Search is an effective tool in assisting with the enforcement of BSA compliance. For more information on BSA Search and the CS Coordinator’s use of BSA Search, refer to IRM 4.26.4, FinCEN Query (FCQ).

The BSA-CS Group Manager’s general responsibilities include:

The Title 31 Coordinator’s general responsibilities include:

BSA-CS Tax Examiner duties include:

The BSA-CS Group Manager and the Title 31 Coordinator will analyze the most recent Predictive Inventory Reports and discuss the inventory needs of the BSA Field Groups the Title 31 Coordinator supports. The discussion will address the anticipated inventory needs of the field groups and consider changes in the staffing of the group that may impact inventory needs.

The BSA-CS Manager will generate new inventory orders in accordance with the annual starts and closures plans to ensure the field has sufficient inventory for all workstreams. The BSA-CS Manager will discuss the source of leads from which the cases are to be built and selected with the Title 31 Coordinator. Sources of leads include leads lists generated by relevant Workload Initiatives, referrals from FinCEN or other IRS Functions and the Title 31 NBFI Database. The BSA-CS Manager will initiate work orders to maintain the minimum inventory balances for all BSA Field Groups supported by the BSA-CS Group.

The discussions between the BSA-CS Group Manager and the Title 31 Coordinator are documented by the Title 31 Coordinator and a copy shared with the BSA-CS Group Manager via secure email within one business day of the discussion. The documentation must include the rationale for the source and number of leads built and selected. The responsibility for the composition of the work order and its implementation rests with the BSA-CS Group Manager.

On a weekly basis, the BSA-CS Group Manager will analyze the Weekly Predictive Inventory Reports and discuss the inventory needs of the BSA Field Groups the Title 31 Coordinator supports. The discussion will address the anticipated inventory needs of the field groups and consider changes in the staffing of the group that may impact inventory needs. .

The BSA CS Manager will review the new inventory orders in accordance with the starts plan and weekly monitoring reports to ensure the field has sufficient inventory for all workstreams. The BSA CS Manager will discuss the source of leads from which the cases are to be built and selected with the Title 31 Coordinator. Sources of leads include leads lists generated by relevant Workload Initiatives, referrals from FinCEN or other IRS Functions and the Title 31 Database.

The BSA CS Manager will initiate and assign work orders to maintain the minimum inventory balances for all BSA Field Groups supported by the BSA CS Group.

BSA CS Managers check in with their Coordinators, as needed to discuss current workload, rationale, source of leads, and number of leads built and selected may be discussed. The responsibility for the composition of the work order and its implementation rests with the BSA CS Group Manager. The BSA CS Group Manager must approve all initial selections. The BSA CS Manager is the point of contact for any communication from BSA Field concerning inventory. Requests for Saturation Exams where the BSA Field generates an order for a specific workstream in a specific area must be approved by BSA Field TM and BSA-CS SM via email communication.

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Classification is the process of determining whether an entity should be selected for examination.

The Title 31 Coordinator case selection responsibilities include:

The Title 31 NBFI Database serves as an inventory of entities that have been identified as NBFIs by IRS field functions, agent lists, outside data sources and internet research. The Title 31 NBFI Database provides BSA staff with key information on prior examined entities, entities currently being examined and entities currently available for examination selection.

BSA-CS Title 31 Coordinators have direct access to the Title 31 NBFI Database through an BEARS Entitlement and link through Microsoft Access. Title 31 Coordinators use the Title 31 NBFI Database as their main source of field case selection.

BSA procedures require a fully electronic case file. The BSA electronic case file is selected, classified, delivered, assigned, developed, closed, processed, and archived electronically. BSA examiners are required to utilize the BSA Electronic Case File Management (BECM) SharePoint or OneDrive to access the case file, maintain the Form 9984, create and edit workpapers, and close the case file. BSA examiners are required to use the current BSA lead sheet package which can be found on the BECM SharePoint or Knowledge Management SharePoint.

There is an exception to the electronic case file procedures for FBAR paper files.

Case building is the process of researching and assembling entity information for BSA examiners to consider when conducting their examinations.

The BSA CS Title 31 Coordinator will assign the initial grade of case using the case grading guidelines (Case Building Procedures for BSA Exams, II. CLASSIFICATION/ CASE GRADING (Coordinators only)) on both the BECM and BSA Policy SharePoint site.

The Title 31 case file will include the following items as part of the case building process:

The Form 9984 should include completion dates for the following activities: :

Refer to BSA Policy SharePoint site for more information on BSA CS Case Building Procedures.

BSA Case Selection Coordinators will create a secure BSA Search data folder within the electronic case file named BSA Search Confidential. Workpapers and documents to be saved within the BSA Search Confidential file include:

Title 31 cases are assigned to the BSA Field group in status 09 by the BSA-CS GM. The assignment of cases should be completed in accordance with the Electronic Case File Initiative Training PowerPoint. The Electronic Case File Initiative (ECFI) Training is available on the BSA Electronic Case Management SharePoint.

The coordinator will upload the file(s) including the case building documents to the BECM SharePoint Site. An email will be sent automatically from BECM to the BSA GM for confirmation of delivery.

Title 31 cases that warrant re-examination will require the examiner to create a zip file that will be forwarded to the BSA Field group manager for approval. Upon approval, the BSA Field group manager will forward to BSA CS to upload to the historical files. Examiner, with manager consent, will determine if case needs to be revisited in one or two years from the date the case is closed. Risk factors of the case that are determined by the examiner should be considered when making date determination for a follow up examination. The following naming convention is to be used when creating the zip file: Case Control Number_Group Number_Follow up date. For example: 12345_Group1604_12-15-23. Zip file to contain the following files: Closing Letter Lead Sheets Memorandums of Interview

When closing a case out of the group, BSA Field manager will send the zip file to the BSA CS mailbox: *BSA ER. Email subject line to state Closed T31 Follow Up Case.

BSA CS coordinators must include case feedback sheets in electronic case files when building cases for BSA Exam. The purpose of the case feedback sheet to gather information that would assist the BSA CS division in determining the effectiveness of workload initiatives and improve cases selected for BSA Field examination.

Centralized Exam Coordinator responsibilities include:

To ensure fairness in case selection, the BSA-CS Manager will review the decisions to select cases in accordance with IRM 4.26.3.5.

BSA CS, with the assistance from Research, Applied Analytics and Statistics (RAAS), can analyze a large volume of data using the Compliance Data Warehouse (CDW) for analysis and storage. Currently, RAAS analysis is limited to analyzing traditional money transmitters. Virtual currency administrators and exchangers are defined as a money transmitters by FinCEN; however, examiners can use subscription tools, such as advanced blockchain analytical tools, to determine compliance with the BSA requirements until further functionality is added.

BSA CS uses technology to analyze data to identify potentially unusual patterns of transactions and identify high risk branch locations.

List(s) of agents are received from BSA Field Examiners and provided to BSA CS Headquarters Coordinator.

Examiners must follow the BSA CS guidance on which financial services and financial institutions will be supported by these procedures.

The BSA Lead examiner will upload the financial institution’s transactional data and a current agent list into the Share Drive for further analysis. BSA POC will notify BSA CS the data has been posted to the Share Drive.

The BSA CS Centralized Exam Coordinator will work with RAAS to develop a risk based assessment of agents for potential examination.

RAAS/BSA CS will provide a file(s) to the BSA lead examiner via SharePoint portal, which includes the analytical summary of high-risk transactions, networks, and unusual activity for use in the headquarters’ exam. The BSA lead examiner is responsible for reviewing the analysis and selecting an appropriate transactional sample to test for BSA compliance.

BSA CS typically sends out headquarters cases for examination, not individual branches. If during the initial interview examiner determines the case assigned to them is a branch of a headquarters, they must notify the group manager who will reach out to BSA CS and request the headquarters examination be established.

Casino Coordinator duties include:

To ensure fairness in case selection, the BSA-CS Manager will review the decisions to select cases in accordance with IRM 4.26.3.5.

Compliance Initiative Coordinator duties include:

Refer to BSA Policy SharePoint site for more information on building administrative files and preparing monthly reports.

To ensure fairness in case selection, the BSA-CS Manager will review the decisions to select cases in accordance with IRM 4.26.3.5.

The BSA MOU Coordinator is responsible for receiving quarterly reports for each state with which IRS BSA has an MOU. The duties include:

Refer to BSA Policy SharePoint site for more information on procedures for using/updating State Quarterly information.

The State BSA MOU Coordinator is responsible for providing the Violation and Headquarters Reports and a list of MSBs quarterly per the MOU.

Email via encrypted or secure email each state’s quarterly reports to the BSA State MOU Liaison with a copy to BSA-CS Group Manager, by the 15th of the month following the end of the quarter.

Refer to BSA Policy SharePoint site for more information on procedures for preparing the Violation and Headquarters Reports and lists of MSBs.

The FinCEN BSA MOU coordinator provides quarterly reports to the BSA FinCEN Liaison by end of the month, following the end of the quarter.

The FinCEN BSA MOU Coordinator emails reports, via encrypted or secure email, to the BSA FinCEN Liaison, along with copies to the BSA-CS Program Manager and Group Managers quarterly. The Letter 1112, Title 31 Violation Notification Letter, & NI (No Issue) Report Database is also sent with the reports.

Letter 1112, Letter 4029, Bank Secrecy Act No Change Letter, and the L1112 & No Issue (NI) Report Database are burned to a removable storage device and mailed directly to the FinCEN BSA Liaison by the FinCEN BSA MOU Coordinator quarterly.

Refer to BSA Policy SharePoint site for more information on procedures for preparing the FinCEN quarterly reports.

The FinCEN BSA MOU Coordinator provides two annual reports to the BSA FinCEN Liaison for the fiscal year, by October 31, XXXX.

The FinCEN BSA MOU Coordinator will email via encrypted or secure email the two reports to the BSA FinCEN Liaison and copy the BSA-CS Program and Group Managers, Senior Program Analyst along with the Total Title 31 Entities Examined Database and the Total Title 31 Entities Database.

Refer to BSA Policy SharePoint site for more information on procedures for preparing the FinCEN annual reports.

Responsibilities of the New Entity/Entity Update Coordinator include:

Refer to BSA Policy SharePoint site for more information on procedures for new entities and issuance of Letter 1052 procedures.

The Virtual Currency Coordinator duties include:

The BSA CS FBAR Coordinator duties include:

When researching an internet site that is blocked by IRS IT Firewalls, use the Internet Proxy Exception Request Form. First, try to research the site on your IRS laptop using the Microsoft Edge browser or Chrome browser, if installed. If the site is blocked, then use the proxy form. To ensure continued case building activities, multiple websites can be input on the proxy form. This form can be accessed via CSIRC. If IRS IT does not allow access to the site, then examiners are required to either note the site unreachable and/or verify pertinent information (name, address, phone, email, website URL) by other IRS approved means (Accurint, BSA Search, etc.).

BSA-CS is responsible for identifying trades or businesses that may conduct transactions in which they receive in excess of $10,000 in cash or cash equivalents and have a requirement to file Form 8300. Resources that can be used to identify trades or businesses include:

BSA CS in partnership with Research Applied Analytics and Statistics (RAAS) and Specialty Policy develop and implement workload initiatives which use a series of analytical approaches and tools available on the Compliance Data Warehouse to evaluate FinCEN data for lead identification.

BSA CS Form 8300 Coordinator’s general responsibilities include:

Administrative duties of the BSA-CS Form 8300 Coordinator include:

BSA CS Form 8300 Coordinator case selection responsibilities include:

The BSA Form 8300 Coordinator will:

To ensure fairness in case selection, the BSA-CS Group Manager will review the decisions to select cases in accordance with IRM 4.26.3.5.

A non-select determination is made when the Form 8300 Coordinator analyzes case research and deems it low potential based on Form 8300 case selection factors listed in IRM 4.26.3.3.3.1 .

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To ensure fairness in case selection, the BSA CS Group Manager will review the decisions to non-select cases in accordance with IRM 4.26.3.5.

BSA Case Selection Coordinators will create a secure BSA Search data folder within the electronic case file named BSA Search Confidential. Workpapers and documents to be saved within the BSA Search Confidential file include:

The first document in the BSA Search Confidential folder will be the electronic version of Document TDF 15-05.11, Sensitive but Unclassified (SBU) Cover Sheet, catalog 56033J IRM 10.5.1, Privacy Policy.

All Form 8300 case building activities must be recorded on Form 9984 with the date completed.

The Form 8300 case file must include:

Refer to 4.26.6.5.3.15 (10-08-2019) Referrals and Notification and to 4.26.8.6.2 (02-14-2019) Where a Referral to Criminal Investigation is Not Recommended When BSA examiners identify indicators of fraud during an examination a discussion must be held with their BSA manager. If the BSA manager concurs, the manager and examiner will contact the Fraud Technical Enforcement Advisor (FEA) to discuss the exam and fraud indicators.

A Prime Lead Memorandum (PLM) is used on a BSA examination when a criminal fraud referral to Criminal Investigation (CI) is not warranted. This may occur but is not limited to instances when indicators of fraud do not meet the Law Enforcement Manual criteria or local prosecution priorities. In these instances, a PLM is required to transmit evidence of willful violations of BSA laws.

When it is determined the case does not meet the local criminal referral requirements, and BSA and the FEA believe the information should be shared with CI. Refer to IRM 25.1.12.9, BSA Leads to CI - Prime Lead Memo.