Part 7. Rulings and Agreements

Chapter 13. Employee Plans Automated Processing Procedures

Section 7. Moving Cases through the EDS Inventory Control Subsystem

7.13.7 Moving Cases through the EDS Inventory Control Subsystem

Manual Transmittal

August 15, 2025

Purpose

(1) This transmits revised IRM 7.13.7, Employee Plans Automated Processing Procedures, Moving Cases through the EDS Inventory Control Subsystem.

Material Changes

(1) Updated IRM 7.13.7.1(1), Program Scope and Objectives, Purpose.

(2) Updated IRM 7.13.7.1(5), Program Scope and Objectives, Primary Stakeholders.

(3) Added IRM 7.13.7.1.3, Roles and Responsibilities.

(4) Added IRM 7.13.7.1.4, Program Management and Review.

(5) Added IRM 7.13.7.1.5, Program Controls.

(6) Changed the name of IRM 7.13.7.1.6 from Acronyms to Terms and Acronyms and added Office of Associate Chief Council (Employee Benefits, Exempt Organizations and Employment Taxes) (EEE) and Rulings and Agreements (R&A).

(7) Added IRM 7.13.7.1.7, Related Resources.

(8) Various edits have been made throughout the IRM for clarity.

Effect on Other Documents

This supersedes IRM 7.13.7 dated May 13, 2024.

Audience

Tax Exempt and Government Entities
Employee Plans

Effective Date

(08-15-2025)

Eric D. Slack
Director, Employee Plans
Tax Exempt and Government Entities

7.13.7.1 (06-03-2021)

Program Scope and Objectives

  1. Purpose: This IRM describes the procedures and guidelines for updating case statuses on applications in the EP/EO Determination System (EDS). Inventory Control System (ICS) has many features that allow users to manage, track, and control applications from transcription through closing on EDS.

  2. Audience: Employee Plans (EP) Determinations and Quality Assurance (QA) staff

  3. Policy Owner: Director, EP

  4. Program Owner: EP

  5. Primary Stakeholders:

    1. Internal - Director, Employee Plans; Director, Employee Plans Rulings and Agreements; EP Tax Law Specialists and Agents; Actuaries; Associate Chief Counsel (EEE), TE/GE Division.

    2. External - Plan sponsors, plan representatives, and plan participants.

  6. Program Goals: The goal of EP Determinations is to ensure that plans are in compliance with the tax laws by reviewing applications for Determination Letters (DL), opinion letters, and to protect the public interest by applying the tax law with integrity and fairness to all.

7.13.7.1.1 (06-03-2021)

Background

  1. EP Determinations processes most applications through the automated system, the Tax Exempt Determination System (TEDS). However, EDS continues to play a major role in working paper cases and in closing all cases, including those reviewed in TEDS. The procedures in this IRM mostly apply to working EDS (paper cases) but certain sections apply to both systems. For more information on TEDS, see IRM 7.15.1, Employee Plans TEDS User Manual, Employee Plans User Manual Introduction.

    Note:

    Do not update a status or change entity information in EDS on any case you work in TEDS because this will cause TEDS to stop transferring status information to EDS (called an EDS block).

  2. This IRM supplements IRM 7.14.5, Employee Plans EDS User Manual, ICS, and provides additional instructions for EP specialists, reviewers and managers for moving cases using the ICS part of EDS.

    Note:

    lCS replaced the EP/EO Application Control System (EACS) as the inventory control system for DL requests. EACS still exists in the service centers but is now referred to as the Masterfile Pipeline System (MPS). MPS is the link between EDS and the Employee Plans Master File (EPMF) in Martinsburg, West Virginia. An entity is electronically transferred to the master file for each case closed on ICS with closing codes 00, 01, 02, 04, 06, and 09. EP entities are transferred to EPMF.

7.13.7.1.2 (08-15-2025)

Authority

  1. Delegation Order 7-1, in IRM 1.2.2.8.1 states that the Director, Employee Plans has authority to issue favorable DLs on IRC 403(b) plans and on the qualified status of:

    1. Pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans (ESOPs) under IRC 401, IRC 403(a), IRC 409 and IRC 4975(e)(7).

    2. The status for exemption of any related trusts or custodial accounts under IRC 501(a).

  2. A complete list of delegation orders governing EP Rulings and Agreements (R&A) can be found at Delegation Orders and Policy Statements by Process.

  3. See IRM 7.1.1, Exhibit 7.1.1-1 for a complete list of the major EP revenue procedures currently in effect.

7.13.7.1.3 (08-15-2025)

Roles and Responsibilities

  1. The mission of Employee Plans is to provide EP’s customers top-quality service by helping them understand and comply with applicable tax laws and to protect the public interest by applying the tax laws with integrity and fairness to all.

  2. The Director, EP, reports to the Deputy Commissioner, TE/GE, and is responsible for planning, managing, directing and executing nationwide EP activities.

  3. EP responsibilities include:

    1. Employee plans (including the qualification of pension, annuity, profit-sharing, and stock bonus plans, simplified employee pensions, saving incentive match plans for employees, and tax-sheltered annuities) and related trusts.

    2. Tax treatment of participants and their beneficiaries and deductions for employer contributions.

    3. Procedural and administrative provisions with respect to such plans.

  4. The Director, EP R&A, reports to the Director, EP, and is responsible for three types of services for retirement plans - voluntary compliance, determination letters, and technical guidance.

  5. Responsibilities of the EP R&A staff include:

    1. Processing determination letter requests from employers regarding the qualified status of their pension, annuity, profit sharing and stock bonus plans.

    2. Issuing opinion and advisory letters to specific requestors regarding preapproved pension, annuity, and profit-sharing plans, including individual retirement accounts, simplified employee pensions and savings incentive match plans for employees, and tax-sheltered annuities.

    3. Developing and operating voluntary correction programs, such as the Employee Plans Compliance Resolution System (EPCRS) program and issuing compliance statements or entering into closing agreements under these programs.

    4. Processing requests for changes in funding method and making other actuarial determinations and interpretations.

    5. Coordinating with Chief Counsel on requests for funding waivers.

    6. Developing and maintaining responsibility for actuarial publications and other standards for the valuation of transfers of future interests for income, estate and gift tax purposes.

    7. Coordinating with TE/GE Division Counsel, Associate Chief Counsel and the DOJ on litigation issues and declaratory judgment cases under the Internal Revenue Code. (IRC 7476).

7.13.7.1.4 (08-15-2025)

Program Management and Review

  1. Program reports:

    1. The EP Determinations program uses Business Objects to view, create, and modify inventory and employee records. Business Objects uses tools to provide a built-in interface to query and analyze data and to build reports.

    2. Monthly reports detailing the current inventory of cases by area and their status are produced and provided to the Director, EP R&A, Area Managers, and frontline managers.

    3. Ad-hoc reports are produced as requested by determinations personnel with appropriate permission.

    4. Each quarter, EP Determinations Quality Assurance issues reports to summarize the results of their TEQMS reviews. See IRM 7.11.3, Tax Exempt Quality Measurement System (TEQMS).

  2. Program effectiveness:

    1. EP Determinations monitors business unit progress toward completing and closing cases in inventory. They provide status and progress reports to IRS leadership on a regular, recurring basis. Effectiveness is measured by analysis of compliance trends and results.

7.13.7.1.5 (08-15-2025)

Program Controls

  1. The IRS receives EP determination letter applications and user fees from taxpayers on Pay.gov

  2. The user fee information is then transferred to LINUS to ensure it is properly recorded.

  3. The application information from Pay.gov is transferred to Tax Exempt Determination System (TEDS) and EP/EO Determination System (EDS), which are the systems that EP Determinations uses to control their inventory.

  4. TEDS contains roles and permissions to ensure proper separation of duties IRM 7.15.4

  5. The EP Determinations Area Managers coordinate the assignment of inventory.

  6. In order to ensure a consistent level of managerial engagement in the process of making key strategic decisions during a determination letter review, the specialist submits requests for approval by their manager through TEDS.

  7. The manager approves or rejects any request through TEDS.

  8. EP Determinations QA reviewers perform reviews on mandatory review cases and for cases selected for the Tax Exempt Quality Measurement System (TEQMS) to ensure that specialists are conducting their determination letter reviews per technical, procedural and administrative requirements. See IRM 7.11.3 and IRM 7.11.9 for more information.

  9. The IRS is fully committed to protecting the privacy rights of taxpayers and employees. Privacy laws are included in the IRC, the Privacy Act of 1974, the Freedom of Information Act, and IRS policies and practices. For more information about these laws, visit the FOIA Library\Internal Revenue Service (irs.gov).

    1. For questions about privacy, email *Privacy.

    2. For questions about disclosure, email *Disclosure.

7.13.7.1.6 (08-15-2025)

Terms and Acronyms

  1. The table lists commonly used acronyms and their definitions.

    Acronym Term
    DL Determination Letter
    EEE Office of Associate Chief Council (Employee Benefits, Exempt Organizations and Employment Taxes)
    EPMF Employee Plans Master File
    EP Employee Plans
    EACS EP/EO Application Control System
    EDS EP/EO Determination System
    ICS Inventory Control System
    MPS Masterfile Pipeline System
    QA Quality Assurance
    R&A Rulings and Agreements
    TEDS Tax Exempt Determination System
    TEQMS TE/GE Quality Measurement System
7.13.7.1.7 (08-15-2025)

Related Resources

  1. IRM 7.11.1.5Computer Systems

  2. IRM 7.11.1.5.1Employee Plans/Exempt Organizations Determination System (EDS)

  3. Information Systems Codes Quick Reference for TE/GE Employees

7.13.7.2 (06-11-2013)

Updating a Status on EDS

  1. Make case updates:

    1. To EDS through ICS for cases not worked on TEDS.

    2. In TEDS for cases worked on TEDS. These updates automatically roll over to EDS.

  2. Case updates include: status updates, correcting information on the Master Record and/or closing updates. See Exhibit 7.13.7-1, Open Codes and Descriptions, for a list of open status codes.

  3. Each action and update (such as, assigning cases, creating letters or correcting entity information) entered on EDS creates a case history record showing the information entered and the employee's identity who entered the information. See Exhibit 7.14.5-6, Case History Record Screen, in IRM 7.14.5.

7.13.7.3 (06-11-2013)

Closing a Case on EDS

  1. After the specialist completes a case, the group secretary:

    1. Updates EDS with the proper proposed closing code.

    2. Prints Form 8671, Case Closing Sheet.

    3. Places Form 8671 in the case file.

      Reminder:

      See Exhibit 7.14.4-14, EDS - Employee Plan Case Closing Sheet.

  2. The ICS will automatically update the case status to 55 (Awaiting Closing Approval) when any of the proposed closing codes are entered on the Master Record.

    Note:

    Actions that require QA approval (such as proposed adverse letter or technical advice request) are considered a proposed closing by the ICS even though the case is not actually closed.

  3. Status code 55 is a managerial code. When a case is in this code, the manager can choose any of these options:

    1. Approve and close the case without review.

    2. Review, approve and close the case.

    3. Review and return to the specialist for further analysis.

    Reminder:

    See Exhibit 7.13.7-2, Closing Codes and Descriptions, for a list of closed status codes.

    Note:

    The Area Offices may allow group clerks to close the cases after the group manager has approved the case for closing. See Exhibit 7.14.5-9, Approval of Case Closing Screen.

  4. If the specialist’s actions are acceptable, the manager initials Form 8671 and approves the case on EDS. See Exhibit 7.14.5-9, Approval of Case Closing Screen.

  5. If the manager returns the case to the specialist for further analysis, the group clerk updates the case to status codes 53, 64, or 73. See Exhibit 7.13.7-1, Open Codes and Descriptions.

  6. The specialist must attach a Form 3198, Special Handling Notice, to the front of the file when the case is sent for QA mandatory review. The Form 3198 alerts the manager of the mandatory review requirement. The manager updates the case to status 31 on EDS by entering an "x" next to the case number on the Case Approval Screen. Cases worked on TEDS need the mandatory review indicator checked in lieu of Form 3198. See IRM 7.11.9, Mandatory and TEQMS Case Reviews. Send the case to QA at one of the addresses in Exhibit 7.13.7-3, QA Address List.

  7. EDS automatically and randomly selects cases for TE/GE Quality Measurement Standards (TEQMS) review. If a case is selected, "SENT FOR TEQMS" shows on the comment line of the Case Approval Screen. The secretary should not mail the DL to the plan sponsor, but instead send the complete case file (the paper case or orange folder, if applicable) to QA on a Form 3210, Document Transmittal. Attach a Form 3198, Special Handling Notice, to the front of the administrative file indicating "TEQMS." See Exhibit 7.13.7-3, QA Address List.

    Note:

    If the automated process doesn’t work properly, QA selects cases manually with the Data Analysis Unit’s help to ensure that TEQMS selections are statistically valid. QA notifies a group when a case has been selected. Groups should send the selected cases to QA using the same procedures described above.

  8. DL applications must be held open for 60 days from the control date to allow interested parties to send comments to the IRS. ICS prevents EP cases from closing before the required 60-day hold period unless the closing code is:

    1. 03 (Returned Incomplete)

    2. 04 (Withdrawn by Taxpayer)

    3. 07 (Form 5310-A, Notice of Plan Merger or Consolidation, Spinoff, or Transfer of Plan Assets or Liabilities; Notice of Qualified Separate Lines of Business, Referral Generated)

    4. 08 (Form 5310-A, Accepted as Filed)

    5. 08 (Form 4461-B, Application for Approval of Master or Prototype or Volume Submitter Plans, Accepted as Filed)

    6. 30 (Correction Disposal)

    7. Any closing code used for group/pool trust cases (Form 5316 or Form 9999)

  9. An unpostable condition code appears in the MF status field if a case opening or closing record was not accepted on the data transfer from EDS to the Master File. The code identifies the unpostable condition and indicates whether it occurred on opening or closing. Groups can update cases for proposed closing but they must resolve the unpostable condition before the manager approves the closing. Contact the Unpostable Clerk to resolve the condition. See IRM 7.13.8, EDS Unpostables.

7.13.7.4 (06-11-2013)

Open Codes

  1. The open status/action code must be updated each time a case is moved from one location, process, or specialist.

  2. See Exhibit 7.13.7-1, Open Codes and Descriptions, for a list of all the available status/action codes for open cases.

7.13.7.5 (06-11-2013)

Closing Codes

  1. The closing status/action code must be entered on the EDS Master record before a case can be closed.

  2. See Exhibit 7.13.7-2, Closing Codes and Descriptions, for a list of all the available status/action codes for closed cases.

Exhibit 7.13.7-1

Open Codes and Descriptions

The status/action codes for tracking open/ongoing EP cases are as follows:

Code/Status Description
31 (In Review) EDS generated for case(s) selected for TEQMS, mandatory, or manager review
32 (Returned on Review Memo) Used only by QA to update the case record from status code 31 when cases file(s) are returned to the specialist with a Reviewer’s Memorandum for additional consideration
33 (Returned from Review) Used only by QA to update the case record from status code 31 to return to the group without a Reviewer’s Memorandum
34 (District Counsel Approval) Used only by QA to update the case record from status code 31 when a case goes to Counsel for approval before the final letter is issued. For example:

  • Final adverse letter has been prepared because the applicant failed to appeal a proposed adverse letter

  • Favorable letter has been prepared based on Tax Court findings

  • Final adverse letter has been prepared based on a Technical Advice
35 (30 Day Letter Sent) Used only by QA to update the case record when the proposed adverse letter is mailed
37 (Group Suspense) Used by the specialist or group clerk to update the case record when case(s) are placed in suspense in the group
38 (Review Suspense) Used only by QA to update the case record when case(s) are placed in suspense in QA
39 (Technical Screening Suspense) Used by the specialist or group clerk to update the case record when case(s) are placed in suspense in technical screening
40 (Proposed Adverse Determination) Used by the specialist to update the case record when a proposed adverse DL is prepared and ready for managerial review
Specialists should enter all closing data except the status 02 closing code before releasing the case for managerial approval
41 (Proposed Technical Advice) Used by the manager to update the case record after the specialist has completed all actions necessary to request technical advice and sent the case to their manager for review.
Once approved by the group manager, the case is sent to QA, who updates and sends it to the TE/GE Office of Division Counsel
50 (New Case Establishment) ICS is automatically generated on EDS when a case is entered on the Data Transcription System
51 (Unassigned Inventory) Used to update the case record when identified for assignment
Unassigned non-merit cases and cases that must go full review are in this status
52 (Case Assignment) Used to update the case record when the case is assigned to a specialist for full review
53 (Manager Returned to Specialist) Used by the manager or group clerk to update the case record when returning a case to the specialist
54 (Transferred to Appeals) Used only by QA to update the case record that is being transferred to Appeals
55 (Waiting for Closing Approval) Automatically generated by ICS when the case record is updated with any closing code
This action removes the case from the specialist’s inventory and updates it to the managerial level
56 (Technical Advice Transfer-Suspense) Used only by QA to update the case record when a technical advice request is ready to be mailed to the TE/GE Office of Division Counsel (Code 41 must be previously entered)
57 (For Closure on EDS) Used to update the TEDS case record when the manager determines a case is ready to be closed
58 (Workload Transfer) Used to update the case record for cases transferred to/from an Area Office
59 (EDS Manual Process) Used to update the TEDS case record when the manager determines a case will not be worked in TEDS but must be worked in EDS as a paper case
60 (Open Hard Copy Case) Used by the technical screening group to update the record of any open technical screening case
61 (Unassigned Limited Review Inventory) Used to update the case record identified as a merit or screening case but still awaiting assignment
62 (Assigned Limited Review) Used to update case record to a specialist for limited review
63 (Case Established MEDS) Used to update the case record, which has been fully processed and has been uploaded into the TEDS repository
64 (Manager Returned Limited Review Case to Specialist) Used by the manager or group clerk to update the case record of screening case that is returned to the specialist
71 Reserved
72 Reserved
73 Reserved
74 (For Managerial Review) Used by specialist to update the TEDS case record when submitting the case to the manager for proposed closure, reassignment, or other reason
75 (Group Inventory) Used to update the record of case that is assigned to the group inventory
91 (Unassigned Inventory) Used to update the record of screened case that will be assigned to a specialist in status code 52
Exhibit 7.13.7-2

Closing Codes and Descriptions

The status/action codes for closing EP cases are as follows:

Code/Status Description
00 (Approved - Issue Only) Don’t use this status code after September 28, 2015
01 (Approved - Fully Worked) Used to update the case record for approval of the application assigned in status 52 after completing an issue only or full analysis

Note:

Don’t use for a case in status 62
02 (Final Adverse) Used only by QA to update the case record when an adverse letter is issued for a case
03 (Returned Incomplete) Used to update the case record when the application is returned to the applicant as incomplete or for applications returned because the IRS is not authorized to rule
04 (Withdrawn by Taxpayer) Used to update the case record when the IRS returns the application when the sponsor withdraws their application
05 (Substantially Deficient - converted to 03) Used to update the case record of a technically deficient application returned to the applicant and/or if the application cannot be reviewed in a reasonable amount of time
06 (Approved - Closed with limited review, no contact) Used to update the case record for approval of a technical screening case assigned in status 62 and closed with no contact

Note:

Don’t use for a case in status 52
07 (Form 5310A - Referral Generated) Used to update the case record after preparation of Form 5666, TE/GE Referral Information Report, when the specialist recommends subsequent follow-up for a Form 5310-A application
08 (Form 5310A - Accepted As Filed) Automatically generated to update the case record for closing a Form 5310-A or Form 4661-B after the notification letter is prepared
09 (Approved - Closed with limited review, with taxpayer contact) Used to update the case record for approval of a technical screening case assigned in status 62 and closed with contact

Note:

Don’t use for a case in status 52
13 (Auto - Closure) Used to update the case record when using the auto closure procedures
30 (Correction Disposal) Used to update the record of an erroneously established case(s)
These cases are not counted as Management Information Reports (MIR) accomplishments
Exhibit 7.13.7-3

QA Address List

Division Address
EP Determinations QA express mail or private delivery address Internal Revenue Service
550 Main Street
EP Determinations Quality Assurance - Room 6-403
Cincinnati, OH 45202
EP Determinations QA mailing address Internal Revenue Service
PO Box 2508
EP Determinations Quality Assurance - Room 6-403
Cincinnati, OH 45201