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Tax Performance System handbook updates for SUTA dumping reviews
Summary ETA sent states replacement pages for the Tax Performance System handbook. They revise reviews of state systems for detecting unemployment tax-rate manipulation and sampling employer payments. ETA still lists the letter as Active, but its printed expiration date was August 4, 2011; current applicability is unclear.
Document
Federal guidance
Agency
U.S. Department of Labor, Employment and Training Administration (ETA)
Document number
UIPL No. 29-10
Date issued
August 4, 2010
Status
Unknown
ETA lists this letter Active as of 2026-10-24, but its PDF prints an expiration date of August 4, 2011. Current applicability is unclear.
Status last verified October 24, 2026
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About this page: The full text below is the official document from U.S. Department of Labor, Employment and Training Administration (ETA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
UIPL29-10acc.pdf (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2010/UIPL29-10acc.pdf)
CLASSIFICATION
UI
Employment and Training Administration
CORRESPONDENCE SYMBOL
Advisory System OUI DUIO
U.S. Department of Labor
DATE
Washington, D.C. 20210 August 4, 2010
ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 29-10
TO: STATE WORKFORCE AGENCIES
FROM: JANE OATES /s/
Assistant Secretary
SUBJECT: Tax Performance System Handbook Updates, ET HANDBOOK NO. 407,
4th EDITION, CHANGE 5
1. Purpose. To provide updated pages for the Unemployment Insurance (UI) Tax Performance
System (TPS) Handbook, ET Handbook No. 407, 5th Edition.
2. References. ET Handbook No. 407, 4th Edition, November 20, 2003; ET Handbook No.
407, 4th Edition, Change 1, December 9, 2004; ET Handbook No. 407, 4th Edition, Change 2,
July 31, 2006; ET Handbook No. 407, 4th Edition, Change 3, December 11, 2007;
Unemployment Insurance Program Letter (UIPL) No. 25-09, and UIPL No. 13-10.
3. Background. TPS is part of the comprehensive UI performance management system “UI
Performs”. ET Handbook No. 407, Edition 5, provides standard instructions for operating TPS in
each state. This advisory transmits a number of modifications, and replacement pages for the
Handbook. Included in the changes are instructions for the review of State Unemployment Tax
Act (SUTA) Dumping detection activity. Subsequent to the original instructions released with
UIPL No. 13-10, a small workgroup of state and Federal tax experts was convened and the
workgroup proposed several modifications to the instructions. Those changes are reflected in the
changed pages (see attached). For states that have already applied instructions contained in
UIPL No. 13-10 as part of the 2010 Calendar Year (CY) TPS review, no further review is
necessary and, if no problems or significant changes have taken place in the state’s SUTA
dumping detection system, the next regularly-scheduled review would take place in concert with
all other aspects of the TPS Systems Reviews (i.e., once every four years).
Unless otherwise noted, the changes will take effect as of the date of this Advisory.
RESCISSIONS EXPIRATION DATE
None August 4, 2011
4. Handbook Modifications Summary.
• Chapter III, Status Determination. SUTA Dumping detection activity questions have
been modified.
o Verbiage was added to clarify that states must have an automated system in place
that tracks movement of employees.
o Instructions for the examination of SUTA dumping detection query
documentation were changed to remove references to tracking changes to
reimbursing status and tracking excess voluntary contributions, if such factors are
not applicable to a state’s particular tracking system.
o Further details were added regarding the timing and number of cases to examine
when verifying the existence of a SUTA dumping detection system. While the
TPS review itself may take place any time during the calendar year, SUTA
dumping investigations that have been completed during the four quarters
immediately preceding the TPS review are to be examined. For instance, if the
TPS review takes place in November, the quarters examined would be the third,
second, and first of that calendar year, plus quarter four of the preceding calendar
year. For each quarter, a minimum of two SUTA dumping investigations should
be examined.
o Instructions were changed to explain that the TPS review confirms that SUTA
dumping investigations have been conducted in compliance with the state’s own
written procedures and guidelines.
• Chapter IV, Cashiering.
o Text in the sampling instructions has been modified to remove reference to
sampling 100 employer remittances per day. During the sampling period of the
five busiest days, remittances arrive at different levels each day and sampling
should more closely follow this trend. Instructions now focus on the desired total
of 500 remittances.
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: June 30, 2012.
6. Action Requested. Administrators are requested to distribute this advisory and the attached
replacement pages to the TPS reviewer(s) and appropriate tax staff. These updates are also
available electronically at: http://wdr.doleta.gov/directives under Employment and Training
Handbooks.
7. Handbook Maintenance. ET Handbook 407, 4th Edition, Change 4, should have the
following pages removed and replaced with the attached pages.
Remove Pages Insert Pages
Chapter III
Pg. 47 R 10/09 and 48 R 10/09 Pg. 47 R 06/10 and 48 R 06/10
Chapter IV
Pg. 99 R 11/04 and 100 R 11/04 Pg. 99 R 06/10 and 100 R 06/10
8. Inquiries. Address all inquiries to the appropriate Regional Office.
9. Attachment. Replacement pages for Handbook 407, Edition 4, Change 5.
UIPL29-10a1.pdf (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2010/UIPL29-10a1.pdf)
ET HANDBOOK NO. 407 CHAPTER THREE
TAX PERFORMANCE SYSTEM
STATUS DETERMINATION PROGRAM REVIEW
SYSTEMS REVIEW QUESTIONS
9. If procedures are automated, is a systems check performed every time a program is changed?
Yes ____ No ____
VS: (Question 9) .
10. Does the state have an automated system in place and operating that tracks movement of
employees to detect tax rate manipulation (i.e., SUTA Dumping)?
Yes____ No ____
If Yes, answer below.
a. Have written procedures or guidelines been developed to document requirements for
identification and investigation of potential rate manipulators?
Yes ____ No ____
VS: Examine operating instructions to confirm rule criteria for SUTA dumping detection.
(Question 10 a.)______________________________________________________________
b. Does the agency follow its procedures for compiling a data base of employers who
indicate excessive movement of employees from one quarter to the next?
Yes ____ No ____
VS: Examine query documentation for tracking movement of employees and changes in tax rate.
If other factors are examined such as changes to reimbursing status and excess voluntary
contributions, confirm that queries are in place.
(Question 10 b.) ________________________________________________________________
III – 47 R 06/10
ET HANDBOOK NO. 407 CHAPTER THREE
TAX PERFORMANCE SYSTEM
STATUS DETERMINATION PROGRAM REVIEW
c. Are potential rate manipulators routinely investigated every quarter?
Yes ____ No ____
VS: Locate a minimum of eight completed cases from the four most recently completed calendar
quarters (two cases per quarter) and confirm they have been investigated in compliance with
state procedures. Post-investigative activity such as posting and appeals do not have to be
included in this verification.
_(Question 10 c.) ______________________________________________________________
11. If any of the preceding evaluative questions are answered No, does the state have a
substitute or compensating control?
Yes No N/A __
If Yes, describe in the Narrative Section following the questions.
VS: __(Question 11) _________________________________________________________
III – 48 R 06/10
ET HANDBOOK NO. 407 CHAPTER FOUR
TAX PERFORMANCE SYSTEM
CASHIERING PROGRAM REVIEW
ESTIMATION SAMPLE INSTRUCTIONS
Sampling Procedures contd.
STEP 2. Notify Regional Office of sample period.
Reviewers must inform the Regional Office of the days selected for
sampling and provide information to support the selection,
including an estimate of the percentage of total dollar amount that
will be received during the selected period.
STEP 3. Determine if mail is presorted.
Determine if checks are sorted for special handling prior to opening
the envelopes based on predetermined indicators such as color
coded envelopes or a separate mailing address for large employers.
Reviewers must insure that the overall sample is representative of
the population of all payment items in terms of these large
employers.
For example: if 10 percent of the payment items are from these
large employers, 10 percent of the total sample must come from
them as well. To manage this 10 percent, 50 items (10% of the total
of 500) must be selected from the large employer group. The
remaining 450 sample items will be taken from the "regular" flow
of contribution items.
Estimate the number of projected items in each of the two groups.
Using the example and assuming 10 percent are large employers,
there would be 5,000 large employers and 45,000 "regular"
employers. Fifty (10%) items should be selected from the large
employer group and 450 from the remainder. Calculate the Check
Interval Number and Random Starting Number using the same
method. The same or a different Random Number can be used for
the two groups.
IV – 99 R 06/10
ET HANDBOOK NO. 407 CHAPTER FOUR
TAX PERFORMANCE SYSTEM
CASHIERING PROGRAM REVIEW
ESTIMATION SAMPLE INSTRUCTIONS
Sampling Procedures contd.
STEP 4. Determine which sample selection method will be used.
. The state may use either one of the following sampling
methodologies: a. Check Interval, b. Mail Tray.
For either method, the goal is to select 500 sample items in total for
the 5 days. This requires the reviewer to estimate the amount of
mail or number of mail trays to be received for the 5-day period and
then to establish a sample interval, or to establish the number of
sample items to be selected from each tray. Either method can be
used for selecting samples; however, the Mail Tray method may be
easiest to estimate.
Once a method is selected, it should be used for all of the 5 days.
Do not switch back and forth between methods.
In some state agencies, mail is received around the clock or is
received before or after the reviewer is on site. Under these
circumstances, the reviewer must make a “best guess” of how much
mail will be received while he or she is available and select an
appropriate number of sample items from mail incoming during that
time period. For example, the reviewer is on site 7:00 AM to 4:00
PM, and the total number of mail trays for the five day period
between the hours the reviewer is on site is expected to be 45. Since
the sample is set at 500 items, divide 500 by 45. The result is 11.1
therefore the reviewer would randomly select 11 items from each
mail tray delivered between 7:00 AM to 4:00 PM for each of the
five days.
To use the Check Interval method:
(1) Project the total number of contribution payments (less EFT
payments) to be received during the designated time frame by one of
IV – 100 R 06/10
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