Evaluation of Performance of Revenue Examiners, Supervisors and Section Chiefs in the Assessment Branches

June 15, 1977 REVENUE MEMORANDUM ORDER NO. 30-77 TO : All Revenue Regional Directors, Chiefs of Assessment Branches and all others Concerned. SUBJECT : Evaluation of Performance of Revenue Examiners, Supervisors and Section Chiefs in the Assessment Branches. I. Purpose : This Revenue Memorandum Order is hereby promulgated for the purpose of encouraging maximum performance from revenue examiners assigned in the Assessment Branches in revenue regions and of providing a more accurate and realistic standard to be used as a basis for evaluating performance and/or measuring efficiency of revenue examiners, supervisors and Section Chiefs in the Assessment branches II. Guidelines : Since it is performance that is being evaluated, all activities in which revenue examiners are actually engaged in, as well as special assignments and/or campaigns shall be considered in measuring performance and efficiency. Other factors like punctuality and attendance, attitudes, decorum, discipline, etc. which affect accomplishments shall also be given corresponding weights in judging personnel performance. Motivations to encourage better performance and sanctions that would discourage haphazard or desultory jobs or performance below par have been provided for. cdta Measure of performance is goal and objective oriented. Evaluation is to be made semestrally to coincide with the giving of performance rating. III. Procedure : With these guidelines in mind, the following procedure in evaluating performance shall be followed by all concerned. A. Performance evaluation of revenue examiners assigned in the Assessment Branches of Revenue Regions shall be based on the following: 1. Assessment Functions: a. Number of cases investigated, reviewed, pre-audited 15 points b. Assessments per investigation, review, pre-audit, 20 points c. Collections per investigation, review, pre-audit 20 points d. Quality of investigation, review, pre-audit 15 points _____ TOTAL 70 points 2. Special Campaigns/Assignments 10 points 3. Other Factors: a. Punctuality and attendance 4 points b. Cooperation and job attitude 3 points c. Public relations, general appearance 3 points. ___ TOTAL 10 points 4. Bonus 10 points TOTAL OF POINTS 100 points ======= B. Determination of Points Earned: 1. Number of cases investigated, reviewed, pre-audited.: (a) Ascertain the prior and current years' returns both for interview and, correspondence available for office audit investigation. Determine the number of returns that can normally be terminated by a revenue examiner during the semester or year. Assign an equal number of returns to each group or examiner. (b) Determine the number of reports of investigation transmitted to the Branch which should be reviewed. Evaluate the reports according to complexity, tax potential and priority. Take into consideration the number of reports an individual examiner-reviewer can review effectively under normal conditions. This shall be his allotted goal in the review of reports for the period under evaluation. In the allocation of goals to the examiner-reviewer take into consideration the individual differences of examiners such as their capabilities, educational attainment and experience. Thus their goals may not necessarily be the same. (c) With the previous experience and records in the pre-audit of income tax returns as basis, determine the number of income tax returns that an individual examiner can pre-audit daily, weekly and so on, until all the tax returns shall have been pre-audited. This shall be the basis for the determination of the pre-audit goal of each revenue examiner. (d) The determination of the goal shall be ascertained by the Chief, Assessment Branch, together with the Section Chiefs of the Branch, subject to the approval of the Assistant Regional Director. (e) The total number of cases investigated, reviewed and pre-audited as determined shall be the goal of all the revenue examiners assigned in a group and this shall constitute the group goal, for which the group supervisor shall be responsible. (f) In order that a more accurate basis in the determination of the equivalent points earned by the examiners can be made, first get the average percentage of the three undertakings: investigation, review and pre-audit functions. The Chief of the Assessment Branch shall exercise the discretion as to whether to use the average of the three undertakings or to give credit to only one or two of the undertakings depending on the activities being actually performed by the examiner. (g) The equivalent points earned by the revenue examiners shall be measured as follows: If the examiner meets: The Goal he earns 12 points 20% above the goal, he earns 13 points 40% above the goal, he earns 14 points 60% above the goal, he earns 15 points 10% below the goal, he earns 11 points 20% below the goal, he earns 10 points 30% below the goal, he earns 8 points 40% below the goal, he earns 6 points 50% below the goal, he earns 4 points 60% below the goal, he earns 2 points 70% below the goal, he earns 1 point and 80% or more below the goal, he gets 0. 2. Assessments/Collections per investigation, review and pre-audit: aisa dc At the start of the semester determine the assessment and collection goals as follows: (a) The Revenue Regional Director shall allocate the enforcement goals of the Assessment Branch in the same manner that those of the other investigating units of the region were determined. These shall be the assessment and collection goals of the revenue examiners in the Branch for investigation. The goal shall then be allocated by the Chief, Assessment Branch in consultation with the Chiefs of Sections depending upon the activities actually engaged in by the examiners. (b) It is expected that every revenue examiner assigned to review reports of investigation fully understands proper audit procedures and standards. If in the review of reports he discovers items of income and deductions which, if taken into consideration would result in additional assessment and collection of deficiency taxes then such shall be recorded in favor of the revenue examiner-reviewer. There are instances when there is no need for the reports under review to be referred back to the revenue districts because the same are apparently due from information indicated in the return or in the examiner's report, as deficiency taxes can immediately be collected. In such case, a preliminary notice of assessment shall have to be sent. Whatever is the deficiency tax in these cases that can be collected shall be credited to the accomplishment of the revenue examiners. As a basis of measurement of this function, determine the sum total of all the accomplishments of the revenue examiners in the branch in this particular undertaking then compute the average goal of each revenue examiner. The result shall be the allotted goal. (c) An assessment and collection shall be credited to the revenue examiner only after the Chief, Assessment Branch has endorsed the corresponding reports or findings upon review. (d) Assessments and collections on pre-audit cases shall be measured by the amount of deficiency taxes assessed or collected by the revenue examiners. (e) The accomplishments of the revenue examiners in the group shall be considered in the determination of the equivalent points that shall be given to the group supervisors. (f) The points earned by the revenue examiner shall be computed as follows. Assessment and Collections When the revenue examiner makes: 50% over the Goal, he earns 20 points 40% over the Goal, he earns 19 points 30% over the Goal, he earns 18 points 20% over the Goal, he earns 17 points 10% over the Goal, he earns 16 points The Goal 15 points 10% below the Goal, he earns 12 points 20% below the Goal, he earns 9 points 30% below the Goal, he earns 6 points 40% below the Goal, he earns 3 points 50% below the Goal, he earns 1 point More than 50% below the Goal he gets 0 3. Quality of investigation, review, pre-audit: The importance of quality in the performance of revenue examiners should not be overlooked. While the prime factor in the investigation, review and pre-adit functions, are the discrepancies verified and the amount of deficiency taxes collected or assessed, nevertheless adherence to the reporting procedures should be emphasized. Quality reports should be submitted and taxes assessed must be able to stand judicial scrutiny. Arbitrary assessment must be avoided. (a) Quality of investigation The standard to be used in evaluating quality in the investigation of tax cases shall be the percentage of increase of deficiency taxes assessed or collected over the tax due per return. The determination of points earned shall be based on the average percentage of all returns investigated for the period. (b) Quality of Review The quality of the review functions of the revenue examiners shall be measured by the time and the effort exerted in the review of the reports, the methods of analysis applied in the review (whether or not the standard auditing techniques have been applied) and the accomplishment of the objectives of the region as a result of the review. The number of points to be given to the revenue examiner shall be determined by the Adit Review and Evaluation Section Chief subject to the approval of the Branch Chief. (c) Quality of Pre-Adit The pre-adit functions being a routinary activity of the Branch can be evaluated in terms of administrative performance. The measurement of the results of the pre-adit of income tax returns will depend largely on the quality and quantity of returns pre-audited. The number of points to be given to the revenue examiner shall be determined by the Adit Review and Evaluation Section Chief subject to the approval of the Branch Chief. 4. The Chief of the Assessment Branch shall determine the manner of allocation of the equivalent points with respect to number of cases investigated, pre-audited, or reviewed by the examiners 5. Other factors a. Punctuality and attendance (1) Perfect attendance 4 points (2) Average of 4 monthly absences and/or tardiness 3 points (3) Average of 5 monthly absences and/or tardiness 2 points (4) Average of 6 monthly absences and/or tardiness 1 point (5) Average of more than 6 monthly absences and/or tardiness 0 In the determination of the number of points an examiner has earned for the rating period, the Chief, Assessment Branch shall be given the discretion to exclude absences due to reasonable cause such as actual illness of the fieldman himself or of the immediate members of his family requiring personal presence, provided that the Office is duly informed of the absence. b. Cooperation and job attitude, and c. Public relations, general appearance, etc. are factors which would be measured collectively by the Supervisor and Chief of Section and concurred in by the Chief, Assessment Branch. 6. Bonus a. Bonus points are given for outstanding achievements like the development of a good fraud case or outstanding accomplishments in special campaigns initiated by the Central Office on a nation-wide basis or involvement. b. Other meritorious accomplishments of fieldmen like doubling or tripling goals may be given bonus points. c. The following procedures shall be followed in giving bonus points: (1) The Group Supervisor shall initiate the recommendation to give any of his examiners bonus points. The recommendation shall cite specific achievements of the examiner to justify the giving of bonus points. The Group Supervisor may recommend the number of bonus points to be given. (2) The Chief of the Assessment Branch must fully concur with the recommendation of the Group Supervisor and Section Chief. (3) The Assistant Regional Director as Chairman, with the Section Chief and the Chief of the Assessment Branch as members shall constitute the Evaluation Committee which shall pass upon and approve, modify, or reject the recommendation. 7. Demerits a. Demerits in the form of reducing the number of points earned by not more than 5 points shall be made under any of the following circumstances: (1) Substantial reductions in recommended assessments, except when the reduction is due to the interpretation of legal issues without precedents or when an assessment is arbitrarily recommended because of non-cooperation of a taxpayer. In the latter case, the records should show the steps the examiner has taken to secure the taxpayer's cooperation in the presentation of his records. Likewise the records should attest to the full compliance with existing procedures. (2) Repeated non-compliance with reporting requirements and other deficiencies in the reports found during review, duly approved by the Regional Director. b. Just like in the granting of bonus points, demerits shall be passed upon by the Evaluation Committee. c. Demerits shall be initiated by the Chief, Adit and Evaluation Section or any official passing upon the correctness of reports of investigation based on authentic records of such deficiencies or reductions in recommended assessments. IV. Evaluation of Performance of Supervisory Officials A. Group Supervisors The performance of a Group Supervisor shall be evaluated on the basis of the total performance of all the examiners in his group in all aspects. His performance rating shall be computed in the same manner as that of individual examiners. The only difference is that the basis of computing the number of points earned by the Group Supervisors would be the comparison between the total of the actual accomplishments of the examiners in his group and the group goal. B. Section Chiefs In the same manner that the performance of Group Supervisors is evaluated on the basis of the accomplishments of the examiners in his group, the evaluation of the performance of a Section Chief shall be based on the totality of the performance of all examiners under his supervision. C. For both the Group Supervisors and the Section Chiefs, evaluation of their supervisory functions would take the place of bonus points as follows: (1) Administrative ability 5 points (2) Timeliness in the submission of administrative reports 5 points ________ TOTAL 10 points This Memorandum Order takes effect starting July 1, 1977 and supersedes all memorandum orders, circulars and issuances inconsistent hereto. EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8 ANNEX A-1 RECORD OF INVESTIGATIONS ANNEX A-2 RECORD OF INVESTIGATIONS ANNEX B RECORD OF EXAMINER'S REPORTS APPROVED AND ASSESSED ANNEX C ANNEX C-1 ANNEX D ANNEX E ANNEX F ANNEX H RECORD OF SUBMISSION AND REQUESTING OF REPORTS OF INVESTIGATION