sbse 04 0111 002

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					                                        DEPARTMENT OF THE TREASURY

                                         INTERNAL REVENUE SERVICE 

                                            Washington, D.C. 20224 

                                               January 4, 2011

                                                         Control Number: SBSE-04-0111-002
                                                         Expiration Date: 01-04-2012
                                                         Impacted IRM:, and


FROM: 	       John H. Imhoff, Jr “/s/ John H. Imhoff, Jr.”
              Director, Specialty Programs

SUBJECT: 	 Interim Guidance on Referrals for Engineering Services, when a referral to
           Engineering is required

The purpose of this memorandum is to provide interim guidance to all Group Managers and
Examiners regarding when a referral to Engineering is required. The Estate and Gift Tax
Program will modify IRM and (3) to provide the following:

(2) 	 IRM 4.48, Engineer Program, describes the referral process and requirements for
      engineer assistance on audits. The Engineering program encourages referrals.

           a. 	 In cases where the focus of the audit includes corporate or valuation issues,
                the Supervisory Attorney and Examiner must confer by or on the date of the
                Plan to Close Meeting regarding a referral to Engineering. At a minimum, an
                Engineering consultation utilizing the SRS system should be made to
                determine if the underlying asset valuations and discounts applied are
                reasonable under the circumstances. The referral may include a request for
                various types of assistance ranging from a consultation to an appraisal report.
                The Supervisory Attorney must notate on the Plan to Close document the
                reason for not referring a case in the above situation.

           b. 	 Where there are real property assets valued on the return for over five
                hundred thousand dollars, a referral should be made to Engineering. The
                Supervisory Attorney must notate on the Plan to Close document the reason
                for not referring a case in the above situation. Supporting documentation
                must be included in the case file.
          c. 	 For personal property art assets valued on the return, the Art Appraisal
               Guideline referral process should be followed. All other personal property
               referrals should be made after a cost-benefit analysis.

(3) 	 Requests for engineer assistance must be made through the Specialist Referral
      System (SRS). This includes consultation services for assistance. The SRS is an
      online automated system that allows for all submissions and approvals for specialist
      assistance. It automates the referral request process. SRS is accessed from the
      intranet at SRS Referral. When an online request is submitted, SRS automatically
      notifies the appropriate specialist manager of the request. The system is totally
      electronic and web-enabled and can provide management necessary information
      reports of Engineer resources utilized by E&G. The Examiner will include a copy of
      the SRS referral in both the hard copy and IMS case file.

Please ensure that this information is distributed to all affected employees within your

This change is effective with the issuance of this Interim Guidance, SBSE-04-0111-002,
which will be incorporated into Internal Revenue Manual 4.25.1 to reflect the above
procedures by 01-04-2012.

If you have any questions, please contact Estate & Gift Tax Policy, Attorney-Advisor, Trina


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