RFI Tax Calculators for IRS Examination/Audit Business Processes

This is a Request for Information (RFI) (hereinafter Notice) pursuant to Federal Acquisition Regulation (FAR) Part 10, Market Research. This is NOT a solicitation for proposals, proposal abstracts, request for bids or quotations, nor, a promise to issue a solicitation in the future. This notice shall not be construed as either a solicitation or the obligation on the part of Government. The purpose of this RFI is to obtain knowledge and information for project planning and market research purposes only. Any response to this RFI will be treated as information only. No entitlement to payment of direct or indirect costs or charges by the Government will arise as a result of contractor submission of responses to this notice, any follow up information response, or the Government use of such information. Responses to this notice are not offers and cannot be accepted by the Government to form a binding contract or agreement. The IRS will not be obligated to pursue any particular acquisition alternative as a result of this notice. Interested parties are solely responsible for adequately marking proprietary or competition sensitive information contained in their response. All data received in response to this notice that is marked or designated as corporate or proprietary information will be fully protected from release outside the Government. The Government shall not be liable for or suffer any consequential damages for any proprietary information not properly identified. Proprietary information will be safeguarded in accordance with all applicable Government regulations. All documentation shall become the property of the Government and will not be returned. Interested parties are advised that the Government is under no obligation to acknowledge receipt of the information received or provide feedback with respect to any information submitted. Further, respondents will NOT be notified individually of the results of the analysis or their specific response. The Government may issue an update to this notice highlighting non-proprietary, generic information around the information gathered (i.e., number of RFI responses) or updates to the program (i.e., the IRS anticipates pursuing X acquisition strategy through Y vehicle). Additionally, the Government reserves the right as a part of Market Research to contact and obtain additional information with all or some of the firms that respond to this RFI. FAR Clause 52.215-3 --Request for Information (Oct 1997) (a) The Government does not intend to award a contract on the basis of this solicitation or to otherwise pay for the information solicited except as an allowable cost under other contracts as provided in subsection 31.205-18, Bid and proposal costs, of the Federal Acquisition Regulation. (b) Although proposal and offeror are used in this Request for Information, your response will be treated as information only. It shall not be used as a proposal. (c) This solicitation is issued for the purpose of identifying information on Tax Calculators for IRS Examination/Audit Business Processes as listed below: Background: The Department of Treasury, Internal Revenue Service (IRS) in support of Enterprise Case Management as well as its examination units (i.e., Large Business and International (LB&I)) is seeking information on potential solutions to automate tax calculations (tax calculators) and generate associated tax reports for IRS examiners in support of exams/audits of individual, business, pass-through and other tax entities. Although there are several technological and conceptual guardrails within which the solution would likely need to function, the IRS does not have a predefined idea of how a successful solution would need to function. IRS personnel currently perform tax calculations associated with examinations of tax returns and records. Calculations may include standard / frequent calculations based on individual forms, and ad hoc computations based on specific tax attributes. Currently these tax calculations are generated manually or through various applications and tools. The current IRS tax calculators have limited to no ability to interface with legacy case management systems, requiring the user to perform additional manual work. Although this concept is also related to the overarching ability of tax calculator to limit manual or low-value work, it is an area of emphasis for the IRS due to the transition to Enterprise Case Management (ECM), which is currently PegaSystems and more than 60 legacy case management systems. The IRS is seeking a solution that will integrate (plug and play) with both legacy case management systems as well as ECM and has the capability to transition from legacy case management systems to ECM. The goal is for a seamless user experience which, allows access directly from their case management system with minimal to no manual transitioning of data (i.e., cutting and pasting from the case management system to the tax calculation tool). Similarly, the user must be able to perform - what-if analyses and integrate the results into the case file that resides in the case management system. The IRS does not have a predefined idea of how the solution should work as there are numerous specialized tax computation software products, each designed for specific audit types (individual returns, business returns, estate and gift tax returns, etc.). The IRS is open to a single solution/provider but recognizes this may not be possible due to the number and types of calculations, and existing case management systems. IRS is looking for a solution/provider that addresses three overarching needs: 1) reduce the need to do manual calculations; 2) generate audit reports with tax calculation and supporting worksheets; and 3) maximize the ease of interface with IRS systems. Responses: The IRS is seeking the submission of technical capabilities relative to the questions provided in this notice. Although the IRS has myriad and specific questions in regard to particular processes and forms, the questions below are fairly broad in nature. If your firm is familiar with specific situations for which a tax calculator is useful, please consider including evidence of that in your response(s). The IRS understands that responding to RFIs requires significant effort on the part of our industry partners and is taking this approach in an attempt to be respectful of your time and limited resources. Responses should not exceed 10 pages and should not contain any brochures, advertising or any other type of extraneous, graphic literature or documents that have not been requested and are not relevant or essential in demonstrating the company's ability to provide the required services. Vendors may provide links to relevant websites, as appropriate. Responses to this notice should address the above include the following information: a) Company Name, address, DUNS number, and CAGE code, technical and administrative points of contact information, socio-economic status, etc. Possible solutions and approaches that may currently exist in the marketplace, and information regarding innovative ideas or concepts regarding the product or service in question. Especially in regards to custom/bespoke solutions versus COTS-like or configurable solutions. b) Provide the features of your solution regarding its flexibility and ability to handle complex calculations. For instance, does your solution provide the capability to run, compare, and/or save different scenarios for a given tax situation, or perform multiple - what-if scenario calculations? Does your solution allow for the input of multiple tax years, large numbers of flow-through entities, or the ability to compare and contrast different tax forms and their respective calculations for a single tax situation? Examples include(s): - Depreciation / Amortization - Provide a solution for a calculator that will compute depreciation, amortization, and Section 179 deduction for various assets (tangible property, real property, listed property) placed in service after 12/31/2017 and for various assets placed in service prior to 1/1/2018. The calculator should generate schedules / worksheets to support the depreciation deduction. - Simple and Complex Interest - Provide a solution for an embedded calculator that provides computations for both simple and complex interest situations. Complex interest includes restricted interest, interest-free periods, carrybacks, General Agreement on Tariffs and Trade (GATT), and corporate interest rates, netting, etcetera, as well as penalty calculations, which include interest as part of the penalty. - Report Generating - Provide a solution for a tax computation tool that can be utilized by tax compliance officers, revenue agents and tax examiners during the course of an examination. The audit tool must support annual tax law changes; generate audit reports and/or interface with report generating systems itemizing each audit adjustment, computing the proposed tax, penalties and interest. Ideally, the solutions must be able to interface with IRS systems such as the Return Transaction File (RTF) and the Audit Information Management System (AIMS). c) Provide features of your solution regarding its ability to limit the amount of resources and errors associated with manual tax calculations. Does your solution automatically pre-populate calculations from prior years or related forms/situations, automatically generate schedules for carryforward and carryback credits, or provide capabilities to limit cut and paste activities? Examples of the types of forms / situations that IRS expects to see in some RFI responses are: - Provide a solution to allow input of carryforward tax attributes (losses and credits) by type and source year and generate a schedule of carryforward and carryback attributes available e.g. Credits, Net Operating Losses, etc. - Provide a solution to allow input of detail information from more than 100 K-1s and carry the detail to the Form 1040 (including those from Forms 1065, 1120S, and 1041). - Provide inclusion of the Tax Cuts and Jobs Act (TCJA) 2017 provisions, including Global Intangible Low-Taxed Income (GILTI), Base Erosion Anti-Abuse Tax (BEAT), Foreign Derived Intangible Income (FDII), Section 163(j), business interest limitation and section 965, transition tax. - Interest and Penalties - Provide a solution for an automated computational tool to interface with IRS system data, accurately compute interest and penalties, and allow for ongoing customization enhancements to align with IRS system data and interest and penalty policy and guidance. d) Provide the features of your solution regarding its ability to interface with legacy/custom and COTS case management systems, specifically PegaSystems. Provide the features of your solution regarding its ability to work in conjunction with assistive technologies (e.g., Section 508 requirements). Examples include(s): - Data Matching I - Provide a solution for an embedded calculator that can systematically match data (income) from each information return (W-2s, 1099s, etcetera) filed with various institutions and agencies against data (income) reported on individual income tax returns (Form 1040). Based on the results of the match, generate a report and/or interface with report generating systems to show the proposed tax assessments for each individual income tax return. - Data Matching II - Provide a solution for an embedded calculator that can interface with IRS system data to prepare an income tax calculation summary based on reported income (W-2, 1099s, etcetera) when there is no record of a filed individual income tax return (Form 1040). e) Provide a rough order of magnitude for a potential solution of this type, relative to the following: 1) Less than $1M 2) Between $1M and $5M 3) More than $5M Questions in response to the content of this this notice may be submitted electronically on or before November 20, 2020 6:00 PM Eastern Daylight Time (EDT). The Government reserves the right to respond to some, all, or none of the questions submitted and may combine similar questions. The deadline for responses to this notice is 5:00PM EDT, December 7, 2020. Responses should be forwarded via email to both the primary, ann.m.duncan@irs.gov and "cc" to kathleen.a.guyther@irs.gov. Vendors shall reference - RFI Tax Calculators for IRS Examination/Audit Business Processes in the subject line of their response as well as in the subject line of any other e-mail correspondence referencing this notice. ** THE GOVERNMENT WILL NOT RESPOND TO PHONE CALLS. ** Thank you for your interest. Primary Point of Contact: Ann Duncan, Management and Program Analyst, ann.m.duncan@irs.gov