DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
Washington, D.C. 20224
January 4, 2011
SMALL BUSINESS/SELF-EMPLOYED DIVISION
Control Number: SBSE-04-0111-002
Expiration Date: 01-04-2012
Impacted IRM: 22.214.171.124.8.3(2), and
MEMORANDUM FOR CHIEF, ESTATE AND GIFT TAX
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 126.96.36.199.3(2) 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