DIRECTIVE	:	ET HANDBOOK NO. 407, 4th EDITION
TO	:	ALL STATE WORKFORCE AGENCIES
FROM	:	CHERYL ATKINSON s/s Administrator Office of Workforce Security
SUBJECT	:	Tax Performance System Handbook Updates

1. Purpose. To provide updated pages for the Unemployment Insurance (UI) Tax Performance System (TPS) Handbook, ET Handbook No. 407, 4^th Edition.

2. References. ET Handbook No. 407, 4th Edition, November 20, 2003, and Field Memorandum No. 44-97.

3. Background. TPS is part of the comprehensive UI performance management system "UI Performs." ET Handbook No. 407, Edition 4, provides standard instructions for operating TPS in each state. This advisory transmits a number of modifications, clarifications, and replacement pages for the Handbook.

4. Handbook Modifications Summary.

   • Table of Contents: "3rd Edition" has been corrected to say "4th Edition."
   • Chapters II, General Procedures, and VI, Collections: References to the Turnover Computed Measure have been removed, because the measure itself has been removed from the TPS package.
   • Chapter III, Status Determination: 1) Acceptance Sampling instructions have been changed. They now correctly reflect the Edition 3 version, which did not require the replacement of new status determinations that subsequently had become successor or inactivation determinations. 2) Instructions clarify that employer accounts that have not met liability provisions are not to be included in the TPS review.
   • Chapter IV, Cashiering: Text was updated to reflect Field Memorandum No. 44-97 regarding sampling frames and sampling adjustments.
   • Chapter VI, Collections: 1) An example which referenced seven-year old collections cases was removed because the requirement now is to go no further back than two-year old collections cases. 2) Training instructions (question 4) were modified to be consistent with the rest of the Handbook.
   • Chapter VIII, Accounts Maintenance, Credits/Refunds: Sampling instructions have been revised to ensure that when credits or refunds are due, employers are advised.

5. OMB Approval. ET Handbook No. 407 has been approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995, OMB Approval No. 1205-0332, expiration date: December 31, 2005.

6. Action Required. Administrators are requested to distribute this directive, and the attached replacement pages to the TPS reviewer(s) and appropriate tax staff.

7. Handbook Maintenance. ET Handbook 407, 4^th Edition, should have the following pages removed and replaced with the attached pages.

   Remove Pages	Insert Pages
   Table of Contents, front and back	Table of Contents, front and back
   Chapter II
   Pg. 3 and 4 (undated) Pg. 5 and 6 R 04/03	Pg. 3 and 4 (undated) Pg. 5 R 11/04 and 6 R 04/03
   Chapter III
   Pg. 61 and 62 R 04/03	Pg. 61 and 62 R 11/04
   Chapter IV
   Pg. 97 and 98 R 04/03 Pg. 99 and 100 R 04/03 Pg. 101 and 102 R 04/03	Pg. 97 R 04/03 and 98 R 11/04 Pg. 99 and 100 R 11/04 Pg. 101 and 102 R 11/04
   Chapter VI
   Pg. 1 and 2 R 04/03 Pg. 7 and 8 R 04/03 Pg. 9 and 10 R 04/03 Pg. 11 and 12 R 04/03 Pg. 65 and 66 R 04/03	Pg. 1 R 04/03 and 2 R 11/04 Pg. 7 and 8 R 11/04 Pg. 9 and 10 R 11/04 Pg. 11 and 12 R 11/04 Pg. 65 R 11/04 and 66 R 04/03
   Chapter VII
   Pg. 29 and 30 R 04/03	Pg. 29 R 04/03 and 30 R 11/04
   Chapter VIII
   Pg. 181 and 182 R 04/03	Pg. 181 R 04/03 and 182 R 11/04

8. Inquiries. Address all inquiries to the appropriate Regional Office.

9. Attachments. Replacement pages for Handbook 407, Edition 4, Change 1.