Bond Promoter Misconduct Procedures Should Be Improved.

The Commissioner, TE/GE Division, should update guidance to require examiners to document their consideration of whether promoter penalties are warranted, or not, in every examination and in the same file location (e.g., the CCR). Provide examiners training on guidance updates.

The Commissioner, TE/GE Division, should ensure that quality reviewers determine whether examiners consider promoter penalties and provide corrective actions when appropriate.

The Commissioner, TE/GE Division, should develop a comprehensive training program for TEB office examiners that:. Prepares examiners to consider whether promoter penalties are warranted, or not.. Prepares examiners to accurately document their consideration of promoter penalties and all other required case actions in every tax-advantaged bond examination.. Trains examiners to develop promoter penalty referrals for the LDC.. Trains examiners to properly complete and document their workpapers, including the CCR and the TEB Penalties and Fraud Workpaper Summary.. Uses Tax Exempt Quality Measurement System reports to evaluate the training program and make changes as necessary and offers periodic refresher courses as needed.. Tracks and documents attendance and subject matter.

The Commissioner, TE/GE Division, should develop a data-driven method to track and quantify specific noncompliance issues, i.e., the promoter penalty, that are otherwise embedded in generic reference numbers, and update related guidance and train employees as needed.

The Commissioner, TE/GE Division, should improve identification of TEB office examination inventory by considering the merits of cases pursued by the SEC or reported by media outlets.