Memorandum of Agreement re: Electronic Tax Administration - Internal Revenue Service and US Audiotex LLC
IR-99-03
MODIFICATION #01
ELECTRONIC TAX ADMINISTRATION
MEMORANDUM OF AGREEMENT
BETWEEN THE INTERNAL REVENUE SERVICE,
US AUDIOTEX, LLC
1. INTRODUCTION:
This Electronic Tax Administration ("ETA") Memorandum of Agreement ("Agreement")
between the Internal Revenue Service ("IRS") and US Audiotex ("USA"), sets forth
the complete agreement of the parties with regard to USA's participation as an
"Industry Partner" of the IRS with respect to credit card payments for
electronically filed returns (1040 series) during the 1999 filing season which
covers the 1998 tax year. The implementation of this Agreement is consistent
with the US Treasury's regulations implementing the credit card language
included in the Taxpayer Relief Act of 1997 (TRA). The parties agree that,
except as provided below, USA agrees to comply with all relevant statutory,
regulatory, and administrative requirements relating to the electronic filing
program and to the Taxpayer Relief Act of 1997.
2. AUTHORITY:
This Agreement is entered into pursuant to the authority vested in the
Commissioner of the IRS by Treasury Order 150-10 to administer and enforce the
internal revenue laws and revenue procedures for electronic filing. Authority is
also vested in the Commissioner of IRS by the statutory authority 26 U.S.C.
6311(d)(2), to enter into contracts to obtain services related to receiving
payment by credit cards.
This Agreement is not an "acquisition" as that term is defined in the Federal
Acquisition Regulation ("FAR") 2.101; therefore, the FAR does not apply to this
Agreement.
3. BACKGROUND AND PURPOSE:
This Agreement results from the evaluation and selection by the IRS of a
proposal received in response to a solicitation or Request for Proposals ("RFP")
for ETA Partnerships. Proposals were sought for non-monetary Agreements formally
described as approach 2 in the IRS Draft RFP ("DRFP") for ETA contracts and
agreements.
The purpose of this Agreement is to engage in a Pilot Test for the 1999 filing
season which may result in either the reduction or removal of barriers to use of
the existing ETA program.
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4. DEFINITIONS:
N/A
5. APPLICABLE DOCUMENTS:
N/A
6. AUTHORIZED REPRESENTATIVES:
Communication between the Participant and the IRS shall be conducted through the
points of contact listed below unless otherwise agreed upon by the parties.
IRS TECHNICAL REPRESENTATIVE:
The IRS Authorized Technical Representative designated for this agreement is:
Linda Rickard
Telephone: (202) 283-6852
FAX: (202) 283-4786
email: linda.rickard@ccmail.irs.gov
The Technical Representative is responsible for the management of the technical
details within the scope of this agreement. This individual shall be responsible
for the overall management and coordination of this agreement and shall act as
the central point of contact with the Participant. This representative is
responsible for the inspection and acceptance of all reports, and such other
responsibilities as may be specified in the agreement.
The Technical Representative does not have authority to alter the Contractor's
obligations or to change the agreement specifications, terms or conditions. If,
as a result of technical discussions, it is desirable to modify agreement
obligations or the statement of work, changes will be issued in writing and
signed by the IRS Signatory Authority.
The Technical Representative for this agreement may be changed at any time by
the Government and without prior notice to the participant.
IRS SIGNATORY AUTHORITY:
The IRS Signatory Authority designated for this agreement is:
Stephen Holden, National Director
Electronic Program Enhancement Office
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The Signatory Authority is the only person authorized to make or approve changes
in the requirements of this agreement, and notwithstanding any clauses contained
elsewhere in this agreement, the said authority remains solely with the
Signatory Authority. In the event the Participant makes any changes at the
direction of any person other than the Signatory Authority, the change will be
considered to have been made without authority and no compensatory allowance
will be made to cover any costs incurred as a result thereof.
PARTICIPANT'S AUTHORIZED REPRESENTATIVE:
Craig White, Account Executive
US Audiotex, LLC
18 Crow Canyon Road, Suite 300
San Ramon, CA 94583
Telephone: 1-800-434-4567
Fax: 1-800-434-4913
email: cwhite@usaudiotex.com
The individual designated above as the Participant's Authorized Representative
shall have the authority to agree to changes in the agreement on behalf of the
Participant. This individual shall be responsible for the overall management and
coordination of this agreement and shall act as the central point of contact
with the Government. This individual shall have full authority to act for the
Participant in the performance of the agreement and shall meet with the IRS
Technical Representative to discuss problems as they occur. The Participant's
Authorized Representative shall respond within four work hours after
notification of the existence of a problem.
7. DUTIES AND RESPONSIBILITIES OF THE PARTICIPANT:
USA agrees for one year from the date of this agreement, at no charge to
the IRS, to provide:
A. Taxpayer access to the credit card transaction processing network employed
in the pilot exceeding 95% availability (total number of customers
accessing the Participant's credit card transaction network on the first
attempt/total number of attempts).
B. Taxpayer access to the credit card transaction processing network from
January 15, 1999, 12:01 am eastern time, through April 15, 1999, midnight
Hawaii time.
C. Documentation, upon request by the Government, of the transaction
processing networks employed in the pilot and the networks' interface
including testing certification plan and procedural guide.
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D. Retention of credit card authorization logs for 72 months from the date of
each transaction. The information in such logs shall include the
transaction dates, times cardmember account number and expiration date,
amount of transaction, and approval code.
E. Pay credit card discount fees and other transaction fees.
F. A merchant descriptor on the taxpayer's credit card statement indicating
the tax payment amount as a unique line item entitled "US Treasury Tax
Payment."
G. A merchant descriptor on the taxpayer's credit card statement indicating
the convenience fee amount as a unique line item.
H. A report including all daily activity settled under the participating
merchant number and sent to the settlement account at US Audiotex's
designated financial institution. Reports to the Government shall be done
on an ad hoc basis to compare and contrast market patterns and market
penetration on a state by state basis. Reports, if requested by the
Government, shall include the date that the US Treasury's financial agent
accepted each payment, the taxpayer's social security number, and the
amount of income tax charged.
I. Conversion of credit card transactions to ACH debit authorizations and
settle funds to US Treasury's Financial Agent (FA). The FA will initiate
bulk debits to the account established for this purpose. The Participant
shall adhere to EFTPS Bulk Filer Procedures and all format specifications
provided by the Government on July 29, 1998 and October 7, 1998. No
additional format changes are required.
J. Only guaranteed payments to the government for taxes owed.
K. Prior to transmitting payment settlement data, a file of Taxpayer
Identification Numbers (TINs) will be provided to the designated US
Treasury Financial Agent (FA) for entity validation. The FA will provide a
file to U.S. Audiotex identifying rejected TINs. US Audiotex will contact
the taxpayers to notify each taxpayer of rejected transactions. If the FA
is unable to validate the TINS within 48 hours of receipt of a file,
payment data for the applicable TINs will be transmitted to the IRS
through the FA without entity validation. This may require US Audiotex to
provide telephone numbers for the taxpayers to the IRS if a TIN
subsequently proves to be invalid.
L. A means for taxpayers to call at a later time to confirm payment
transaction.
M. All of the information contained in the "US Treasury General Information
to Taxpayers Regarding Credit Card Payments" upon request from taxpayers.
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N. Reports of any material network outages or work stoppages and all reports
(EDI.X.12) as stated in "bulk debit" specifications received from the
Government. No additional "bulk debit" reports are required.
O. Reasonable efforts to make any necessary modifications to software,
systems, and services in accordance with its commercial business practices
to conform to the provisions of IRS regulations promulgated under U.S.C.
6311(d)(1). This contract is considered modified automatically to conform
to the provisions of such IRS regulations.
P. Submit final VRU script related to federal taxes for approval to the IRS
by 12/03/98.
Q. Maintain the confidentiality of any information relating to credit card
transactions with absolutely no disclosure or use except to the extent
authorized by written procedures promulgated by the IRS pursuant to 26
U.S.C. 6311(e)(3). This applies to all employees and contractors
associated with US Audiotex.
R. Settle all credit card payment transactions to one account on day four of
the payment cycle (the payment cycle begins with a successful call
initiated by the taxpayer on day one). The acquiring bank will pay
interest to the Treasury's General Fund on all overnight balances to the
account at the 90-Day Treasury Bill rate.
S. Status reports (daily, weekly and monthly) containing, at a minimum, the
number of taxpayers using the system and total dollar amount of payments
sent to the IRS, and any problems encountered.
T. A Pilot Finding Report by June 30, 1999, containing the conduct and
findings of the pilot (including any problems, changes made during the
pilot, lessons learned and recommendations for improvement), client
feedback, recommendations for extended pilot options and resulting or
required IRS system procedural changes.
U. Support and facilitation of public awareness efforts related to marketing
the pilot. Submit all marketing material to IRS for pre-approval of
content.
V. Project plans in accordance with guidelines and other requirements as
specified by IRS.
8. DUTIES AND RESPONSIBILITIES OF THE IRS:
The IRS agrees, for the 1999 filing season, to provide:
A. Record specifications necessary for settlement of funds and posting of tax
records related to the credit card payments.
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B. Business requirements in compliance with the regulations governing credit
card payments.
C. No consideration to the Participant for credit card related transactions.
D. Financial agent(s) to act on the IRS's behalf for settlement of funds of
individual tax payments. The financial agent(s) will have no authority to
access accounts, use information, or place requirements on any person or
organization to use the taxpayer's credit card to collect any amount
beyond what has been authorized by the taxpayer.
E. A mechanism for returning funds received by credit card payment in order
to correct an error (as defined in the US Treasury Regulation T.D. 8795;
REG 111435-98) which can be resolved under the Truth in Lending Act, 15
U.S.C. 1666 et. seq. Return of funds received erroneously or without
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authorization will be made as authorized by section 6311(d)(3)(E) of the
Internal Revenue Code and in accordance with the implementing credit card
regulations.
F. Required information or instructions for the Participant to communicate to
taxpayers (including the "US Treasury General Information to Taxpayers
Regarding Credit Card Payments").
G. Required reporting criteria and formats.
9. PUBLIC RELEASE OF INFORMATION:
A. The Participant shall obtain the written permission of the IRS before
releasing or using any information regarding work on the Agreement.
Information including, but not limited to, product packaging,
advertisements, unclassified speeches, articles, press releases,
presentations, displays or demonstrations developed or proposed for
release to the public must be submitted in their entirety to the IRS. The
Participant shall request, in writing, permission to release information
describing the scope of the information to be released and the purpose for
its release.
B. In the event of a termination for the convenience of the Government, the
Government shall be responsible for press releases, jointly prepared with
the Participant, declaring the termination of the pilot by the Government.
Such releases shall be placed where determined by the Participant; except
that the Government reserves the right to either place such releases
itself in a reasonable number of new media or paying for the participant's
placement of such releases. The Government shall consider the
participant's reasonable request for the number of news media to receive
such releases. The Government shall also consider the participant's
reasonable request that it not issue a public release or public
announcement of the termination of the contract for the Government's
convenience.
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10. LIABILITY:
A. Each party to this agreement shall be responsible for the acts and
omissions of its own employees.
B. The IRS shall not be liable for any injury to the Participant's personnel
or damage to the Participant's property unless such injury or damage is
due to negligence on the part of the Government and is recoverable under
the Federal Tort Claims Act {28 U.S.C. 1346(b)}, or pursuant to other
statutory authority.
11. THIRD PARTY RIGHTS:
This Agreement does not confer any rights or benefits on any taxpayer or any
third party.
12. PERIOD OF PERFORMANCE AND TERMINATION:
A. This Agreement shall be in effect from the date executed by both parties
through October 14, 1999, renewable for one additional one-year option
period by mutual consent.
B. During the period beginning January 12, 1998 and ending April 17, 1999,
there shall be no opportunity for the Participant, U.S. Audiotex, to
terminate this Agreement. Otherwise, this Agreement may be terminated by
either party upon 30 days after receipt of written notice signed by either
of the signatories to this Agreement or by their successors or designees.
The Participant understands that in the event the IRS terminates this
Agreement, the Participant has no right to any claim against the
Government, including a claim for termination costs.
13. MODIFICATION OF AGREEMENT:
This Agreement is considered modified automatically to conform to any provision
of the regulations promulgated under 26 U.S.C. 6311(d)(1). Otherwise, this
Agreement may be modified by either party, but only upon mutual agreement. All
modifications must be in writing and signed by both of the signatories to this
Agreement or by their successors.
14. INSPECTION RIGHTS:
A. The IRS may inspect the work performed by the Participant upon reasonable
notice to the Participant's Authorized Representative and in a manner that
will not interfere with the Participant's performance of this Agreement.
The Participant shall provide access for this purpose to the IRS's
Authorized Representatives(s) to the location where the work is being
performed. The IRS shall also have the right to inspect the Participant's
Report of the work performed as a result of this Agreement. The IRS's
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Authorized Representative shall provide the results of any inspections to
the Participant's Authorized Representative for any necessary resolution.
B. The IRS may evaluate the Participant's performance of this Agreement and
may provide the results of this evaluation to the Participant, in writing,
on a quarterly basis for written comment and return to the IRS. The
evaluation, including the Participant's comments, may be used by the IRS
in considering the Participant for future Agreements or Contracts.
15. REMEDIES:
There are no additional remedies other than the termination rights as defined in
11(B).
16. LIMITATIONS:
The terms of this Agreement are not intended to alter, modify, or rescind any
current Agreement or provision of Federal law now in effect. Any provision of
this Agreement which conflicts with Federal law will be null and void.
17. DISPUTE RESOLUTION:
N/A
18. SIGNATURES:
/s/ Stephen H. Holden Date: 1/17/99
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Internal Revenue Service
Stephen Holden, National Director
Electronic Program Enhancement Office
/s/ Kenneth Stern Date: 1-19-99
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US Audiotex, LLC
Kenneth Stern, President
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