The FPS program’s primary responsibility is to support field examinations focusing on financial products tax issues. Field employees in the FPS program consist of FP specialists.

FP specialists are experienced revenue agents that have completed special training in financial instruments and terminology, financial industry practices, and the taxation of financial instruments and markets. While the primary activity of FP specialists is supporting large and medium sized corporate and partnership examinations, they also work on assigned projects requiring this expertise across all operating divisions.

By law, the IRS has the authority to conduct examinations under Title 26, Internal Revenue Code, Subtitle F - Procedure and Administration, Chapter 78, Discovery of Liability and Enforcement of Title, Subchapter A, Examination and Inspection, which includes but is not limited to:

All IRS personnel have the responsibility to ensure all taxpayer rights are protected and observed. See IRM 4.10.1.2, Taxpayer Rights and Pub 1, Your Rights as a Taxpayer.

For additional information see IRM 4.10, Examination of Returns, and IRM 4.46, LB&I Examination Process.

The Director, Enterprise Activities Practice Area, is responsible for the policies and procedures in this IRM section.

The Director, FIP, is responsible for providing oversight of FP territory managers and the policies and procedures in the IRM. See IRM 4.37.1.3.1, Director, Financial Institutions and Products (FIP), for additional information.

FP territory managers (TTMs) supervise FP team managers (TMs). FP TTMs are responsible for providing oversight and administration for the procedures in this IRM. See IRM 4.37.1.3.2, Financial Products (FP) Territory Manager, for additional information.

FP TMs supervise FP specialists. FP TMs are responsible for monitoring and overseeing work of the FP specialists. See IRM 4.37.1.3.3, FP Team Manager, for additional information.

FP specialists are responsible for developing and resolving financial products tax issues for cases assigned. See IRM 4.37.1.3.4, FP Specialist, for additional information.

The FPS program seeks to identify, develop, and resolve financial products tax issues that are:

FPS participates in the LB&I Examination Process (LEP), generally as issue team members and issue team managers. FPS collaborates with the geographic practice area managers in review of potential tax risks. FPS efficiently performs the examination of financial products and related transactions. This provides for a quality work product and a minimization of burden to both the LB&I examination team and the taxpayer.

FPS accumulates and disseminates examination techniques, information about tax avoidance and evasion schemes, and other information useful in planning and conducting examinations.

FPS monitors the progress and results of issues through various information management systems.

FPS works closely with geographic practice area exam teams, international examiners, subject matter experts within the practice networks, and the Office of Chief Counsel in order to achieve FPS objectives and goals.

The Issue Management System (IMS) is a case management application sponsored by LB&I. IMS provides case management functionality to LB&I, SB/SE specialty groups, and Appeals. IMS is used to monitor various elements of FPS inventory. For example, status of Information Document Requests (IDRs), approving examination plans, risk analysis, and Notice of Proposed Adjustment (NOPAs).

FP management periodically reviews reports using the Issue Based Management Information System (IBMIS). IBMIS is a reporting tool containing day-to-day information gathered on the Audit Information Management System (AIMS). The system provides team managers, territory managers, executives, and analysts a centralized system for managing case information for tracking, planning, and reporting.

The table below defines commonly used acronyms in this IRM:

See the Financial Products SharePoint for additional information.

Additional information can also be found on the Financial Institutions & Products Knowledge Base.

The FIP director provides management oversight of the FPS program and of the FIP practice networks.

The FIP director ensures the FPS program provides:

The FIP director has a responsibility to:

The FIP director oversees design and delivery of FPS training programs, in coordination with Learning & Education.

To provide FPS program oversight, the FIP director will:

The FIP director communicates directly with the FP TTMs and TMs when warranted.

Additional FIP director responsibilities include:

A FP TTM is responsible for their respective territory to achieve maximum utilization of specialist staff days and case coverage.

A FP TTM periodically conducts workload studies to determine the number and location of FP specialists needed for their territory.

The following duties are specific to how a FP TTM supports the FPS program within their territory.

A FP TM will follow the fundamental responsibilities provided in:

In addition, a FP TM will:

FP specialists have the following duties and responsibilities:

For LB&I cases, FP specialists will adhere to IRM 4.46.1.1.3.5, Issue Team Member Roles and Responsibilities, and to IRM 4.46, LB&I Examination Process.

The role of the FP High Income Initiative (HII) Cadre is to assist examiners in addressing FP related questions and identify the most effective resources available to address identified issues.

Resources may include inquiries to the FIP practice networks or referrals to assign a FP specialist to the case.

FPS workload is identified through various processes.

Large Corporate Compliance (LCC) cases are a mandatory FPS referral at the beginning of the examination to allow the FP specialist to participate during the planning phase.

HII cases are a mandatory FP SRS referral for all new starts, including related pick-ups, as of June 21, 2022.

The FPS program encourages referrals. Returns not requiring mandatory referrals may be referred if FP specialist assistance is appropriate. Examiners should make referrals as early as possible upon identification of a FP issue. Informal assistance is available to determine if a referral should be made. Informal assistance may not be used in lieu of mandatory referral requirements.

Although not identified as mandatory referrals on SRS, the FPS program recommends that case-built file (CBF) assignments be made for Form 1065 partnerships and joint ventures with assets greater than $10 million in order for an initial risk assessment to be conducted.

FP specialists will follow IRM 4.46.6.2, Workpaper Organization and Considerations. This includes the workpaper (WP) naming convention and the requirement to have documents uploaded to IMS.

Upon completing an assignment, the FP specialist will prepare an FP specialist's report. The report will be prepared for all referrals, including no changes.

The FP specialist's report will use the proper forms required in IRM 4.46.6, Workpaper and Reports Resources, and IRM 4.10.8, Report Writing, depending on the nature of the referral.

The FP report must include a cover sheet, listing administrative data such as date started, date completed, time charged and proposed adjustments by uniform issue list (UIL) code and disposition. See Exhibit 4.37.1-1 for a sample FP specialist's report cover sheet.

The FP specialist's report will be routed to the FP TM for review and approval.

The FP TM, or designee, will review and approve the FP specialist's report promptly (generally within five business days) to avoid any delay in disposition and closure of the case.

The final FP specialist’s report will be forwarded to the referring manager.