PWS DAI Computation Services -RFI Draft.pdf

Performance Work Statement

Digital Asset Computation Support Services

January 21, 2026

Version 1.0

Table of Contents

1. General Information

1.1 Scope of Work

1.2 Background

1.3 Constraints

1.4 Description of Services

1.5 Non-Personal Services

1.6 Period of Performance

1.7 Place of Performance

1.8 Hours of Operation

1.9 Special Qualifications

1.10 Post Award/Kickoff Conference

1.11 Status Meetings

1.12 Contractor Travel

1.13 Transition In

1.14 Transition Out

2. Definitions and Acronyms

2.1 Definitions

2.2 Acronyms

3. Government-Furnished Property and Services

3.2 Facilities

3.3 Equipment

3.4 Materials and Information

3.5 Quality Assurance (QA)

4. Contractor-Furnished Items and Services

4.2 Equipment

4.3 Materials

4.4 Contractor Responsibilities

4.5 Contractor Personnel

4.6 Identification of Contractor Employees

4.7 Quality Control

5. Specific Tasks

5.1.3 Data Ingestion

5.1.4 Digital Asset Computation Report

5.1.4.1 Report Technical Standards

5.1.4.2 Data Inconsistencies

5.1.4.3 Error Resolution and Report Revision

5.1.4.4 Case Complexity

5.2.2 Timing of Litigation Support Services

5.2.3 Collaboration and Communication

5.3 Task 3 – Resubmission of Case work

5.4 Task 4 – Additional Digital Asset Case Work

6. Deliverables

6.3 Acceptance Criteria

7. Related Documents

8. Billing and Case Status Report Expectations

9. Performance Requirements Summary

10. Contractor Onboarding Requirements

10.1 Paperwork Completeness and Accuracy

10.2 Contractor Eligibility

10.3 Timeliness

11. Investigative Forms/Documentation, Fingerprinting, and eAPP

11.1 Investigative Forms/Documentation

11.2 Fingerprinting and eAPP

11.3 Electronic Questionnaires for Investigations (eAPP)

11.4 Contractor Training Requirements

11.5 Security Badges

11.6 Contractor Separation

Performance Work Statement

Vision Statement The Internal Revenue Service (IRS) seeks Digital Asset Computation and Data Analysis services to support examination activities involving digital assets. The services will assist the IRS in calculating taxpayers' taxable income and gains and/or deductible losses resulting from digital assets transactions.

1. General Information

2. Scope of Work The Contractor shall provide Digital Asset Computation Support. This includes the specific case support as detailed in various tasks below. The Contractor shall always maintain an adequate workforce for the uninterrupted performance of all tasks defined within this PWS.

The Contractor shall provide all personnel, equipment, supplies, facilities, transportation, tools, materials, supervision, and other items and non-personal services necessary to perform Digital Asset Computation Services as defined in this Performance Work Statement except for those items specified as IRS furnished property and services. The Contractor shall perform to the standards in this contract and the Quality Assurance Surveillance Plan (QASP provided separately).

3. Background Virtual currency is defined in Notice 2014-21, 2014-16 I.R.B. 938 as modified by Notice 2023-34, 2023- 19 I.R.B. 837 (Notice 2014-21), as a digital representation of value that functions as a medium of exchange, a unit of account, or a store of value other than the U.S. dollar or a foreign currency (fiat currency). The Notice 2014-21 provides that convertible virtual currency (that is, virtual currency that has an equivalent value in real currency or that acts as a substitute for real currency) is treated as property for Federal income tax purposes. Digital assets, which are broadly defined as any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary, are generally treated as property for Federal income tax purposes. See generally Notice 2014-21.

On June 28, 2024, final regulations addressing basis (T.D. 10000) were filed with the Federal Register (2024 final regulations) implementing, in part, the changes made to IRC section 6045 by section 80603 of the Infrastructure Investment and Jobs Act (IIJA). The 2024 final regulations apply to all acquisitions and dispositions of digital assets on or after January 1, 2025. Under the 2024 final regulations, if a taxpayer sells, disposes of, or transfers less than all the units of the same digital asset held within a single wallet or account, the units disposed of for purposes of determining basis and holding period are determined by a specific identification of the units of the particular digital asset in the wallet or account that the taxpayer intends to sell, dispose of or transfer. If a specific identification is not made, the units in the wallet or account disposed of are determined in order of time from the earliest purchase dates of the units of that same digital asset (“first in, first out”).

To comply with their income tax obligations, taxpayers must track their digital assets transactions. The transactions referenced in this Performance Work Statement (PWS) occur on various commercial digital asset exchanges or are reflected on public ledgers (such as a blockchain and other public distributed ledgers).

While every examination is unique, the examinations relevant to this PWS have common elements which include, a potential failure to report digital assets transactions in accordance with the Internal Revenue Code, large transaction data volume, and the inherent complexity of valuing certain digital assets.

Additional considerations include interactions with noncustodial protocols (so called “DeFi transactions), potential illegal or other fraudulent activity, basis tracking, and future changes to laws and regulations regarding digital assets.

4. Constraints The services identified in this PWS will adhere to the rules, regulations, laws, standards, and conventions identified by IRS as well as within the Federal Government. Constraints include the following:

• Procurement laws and regulations, including the Federal Acquisition Regulations (FAR)

• Appropriations and fiscal law requirements, including the Anti-Deficiency Act

• Federal Risk and Authorization Management Program (FedRAMP)

• Reference the Attachments

5. Description of Services Services are covered under the following areas:

• Digital Asset Computation and report generation

The detailed tasks of each area can be found in Section 5 of the PWS.

6. Non-Personal Services The Government will neither supervise Contractor employees nor control the method by which the Contractor performs the required tasks. Under no circumstances shall the Government assign tasks to, or prepare work schedules for, individual Contractor employees. It shall be the responsibility of the Contractor to manage its employees and to guard against any actions that are of the nature of personal services or give the perception of personal services.

If the Contractor believes that any actions constitute, or are perceived to constitute personal services, it shall be the Contractor's responsibility to notify the Contracting Officer (CO) immediately. These services shall not be used to perform work of a policy, decision making, or management nature, i.e., inherently Government functions. All decisions relative to programs supported by the Contactor shall be the sole responsibility of the Government.

7. Period of Performance The period of performance shall consist of one base period of 12 months and four 12-month option years.

Base Year: August 13, 2026 to August 12, 2027 Option Year 1: August 13, 2027 to August 12, 2028 Option Year 2: August 13, 2028 to August 12, 2029 Option Year 3: August 13, 2029 to August 12, 2030 Option Year 4: August 13, 2030 to August 12, 2031

8. Place of Performance

9. Hours of Operation Government agencies will not be available during scheduled holidays, inclement weather, weekends, and after duty hours.

The Contractor shall maintain an adequate workforce for the uninterrupted performance of all tasks defined within the contract. When hiring personnel, the Contractor shall keep in mind that the stability and continuity of the workforce is essential.

10. Special Qualifications Special qualifications shall be identified within each task as required.

11. Post Award/Kickoff Conference Within fourteen (14) days after the contract award, the Contractor shall schedule, coordinate, and host a Project Kick-Off Meeting at the time and location approved by the IRS. The meeting shall provide an introduction between the Contractor personnel and IRS personnel who will be involved with the PWS and to assure a common understanding of the project requirements and objectives. The meeting shall provide the opportunity to share and discuss scope, resources (including roles and responsibilities), key milestones and timeline, and technical, management, and security topics, as well as any travel authorization and reporting procedures. At a minimum, the attendees shall include the Contractor’s Key Personnel, the Program Manager(s), other relevant IRS personnel, the CO, and the COR.

At least three (3) days prior to the Project Kick-Off Meeting, the Contractor shall provide a Project Kick- Off Meeting Agenda and presentation material for review and approval by the COR and the PM. The agenda shall include, at a minimum, the following topics/deliverables:

a. Points of Contact (POCs) for all parties

b. Project Scope, objectives, and deliverables

c. Project Personnel roles and responsibilities

d. Project Staffing Plan

e. Financial reporting and invoicing requirements

f. Quality Assurance Surveillance Plan (QASP) discussion

g. IRS access to documentation delivery/backup plan

The Contractor shall provide a Project Kick-Off Meeting Minutes Report, within three (3) business days following the Kick-off Meeting, documenting the Project Kick-Off Meeting discussion and any action items and/or decisions.

12. Status Meetings The Contracting Officer, Contracting Officer’s Representative (COR), and other Government personnel, as appropriate, may meet periodically with the Contractor to also review Contractor performance, requirement status, etc. At these meetings, the Contracting Officer will apprise the Contractor of how the Government views the Contractor's performance or progress of the requirement. The Contractor will apprise the Government of problems, if any, being experienced. Appropriate action shall be taken to resolve outstanding issues. These meetings shall be at no additional cost to the Government. Post Award Conference and subsequent meetings may be held via teleconference at the Contracting Officer's discretion.

13. Contractor Travel Prior to travel, the Contractor shall coordinate with and receive Government authorization from the COR for all travel. Reimbursement of travel costs will be in accordance with the Federal Travel Regulation and in accordance with FAR 31.205-46.

14. Transition In Prior to contract award, the Contractor shall complete the following tasks:

The Contractor shall, upon the Contracting Officer's written notice, furnish Transition-In services during the 90-calendar day Transition-In period. As a successor, the Contractor shall have sufficient personnel onboard during the Transition-In period to ensure a smooth transition with the incumbent Contractor.

The Contractor shall provide an orderly transition of work acceptance and accomplishment such that any impact to the program is minimized. During the Transition-In period, the Contractor shall become familiar with the requirements to commence full performance of services by the end of the Transition-In period. Transition-In is not required if the successor Contractor is the incumbent Contractor.

15. Transition Out The Contractor shall provide Transition-Out support when requested by the IRS. The Contractor shall deliver a Transition-Out plan and shall facilitate the accomplishment of a seamless transition from the incumbent to incoming contractor/IRS personnel at the expiration or termination of the contract. The IRS will work with the Contractor to finalize the plan and at a minimum, shall be review and update it quarterly during the final contract option year. In the Transition-Out plan, the Contractor shall identify how it will coordinate with the incoming contractor and/or IRS personnel to transfer knowledge regarding the following:

a. Project management processes

b. Points of contact

c. Location of technical and project management documentation/deliverables

d. Status of ongoing initiatives

e. Appropriate contractor to contractor coordination to ensure a seamless transition

f. Transition of Key Personnel

g. Schedules and milestones

h. Actions required of the IRS

i. Coordination of related programs

j. Reconciliation of provided material for completeness in Federal archival capabilities

16. Definitions and Acronyms

Definitions Acceptance - Provided when an authorized representative of the Government has inspected and agreed that the work meets all requirements of this contract, including documentation requirements.

Approval - Provided when the Government has reviewed submittals, deliverables, and administrative documents (e.g., insurance certificates, installation schedules, planned utility interruptions, etc.) and has determined the documents conform to contract requirements.

Business/Work Days - Every official work day of the week which are days between and including Monday to Friday. This does not include public holidays and weekends.

Business Day - Every official day of the week which are days between and including Monday to Friday.

This does not include federal holidays and weekends.

Calendar Day - Any day of the week.

Contractor - A supplier or vendor awarded a contract to provide specific supplies or service to the Government. The term used in this contract refers to the prime.

Contracting Program Manager (CPM) An employee of the Contractor to meet program objectives or production requirements. CPMs are responsible for subordinate projects within the scope of the overall program. The CPM is ultimately responsible for effectively managing all Contractor business and technical risks to ensure effective systems and services are delivered to the Government, within budget, and at the required levels of performance.

Contracting Officer (CO) - A person with authority to enter into, administer, and/or terminate contracts and make related determinations and findings on behalf of the Government. Note: the only individual who can legally bind the Government.

Contracting Officer's Representative (COR) - An employee of the U.S. Government appointed by the Contracting Officer to perform contract administration activities in regard to technical issues. This individual has authority to provide technical direction to the Contractor as long as direction is within the scope of the contract, does not constitute a change, and has no funding implications. This individual does NOT have authority to change the terms and conditions of the contract.

Digital Asset Computation Report – A report presenting the information requested in the work order, including gain or loss computation for each asset for each year at issue, transfer analysis for each year identifying all nontaxable transfers between taxpayer accounts identified by Contractor during the analysis of records, and a summary explanation of the methodology used to produce the report.

Defective Service - A service output that does not meet the standard of performance associated with the Performance Work Statement.

Deliverable - Anything that can be physically delivered but may include non-manufactured things such as meeting minutes or reports.

Emergency Callback - A service request or other request for service placed outside of normal working hours and of such a nature that response cannot wait for the resumption of the next day’s normal working hours.

Government Furnished Property (GFP) - Property in the possession of, or directly acquired by, the Government and subsequently furnished to the Contractor for performance of a contract. Government-furnished property includes, but is not limited to, spares and property furnished for repair, maintenance, overhaul, or modification. Government-furnished property also includes contractor-acquired property if the contractor-acquired property is a deliverable under a cost contract when accepted by the Government for continued use under the contract.

Program/Project Manager (PPM) An employee of the U.S. Government with the responsibility, and relevant discretional authority, who is uniquely empowered to make final scope-of-work, capital-investment, and performance acceptability decisions on assigned acquisition programs. The PPM is also responsible for meeting program objectives or production requirements through the acquisition of any mix of in-house, contract, or reimbursable support resources. The PPM is ultimately responsible for effectively managing all business and technical risks of the program to ensure effective systems and services are delivered to the end user on schedule, within budget and at the required levels of performance.

Project Manager (PM) As agreed, an employee of the U.S. Government, and/or Contractor assigned responsibility for accomplishing a specifically designated work effort or group of closely related efforts established to achieve stated or designated objectives, defined tasks, or other units of related effort on a schedule, within cost constraints and in support of the program mission or objective. The PM is responsible for the planning, controlling, and reporting of the project, and for the management of required functions, including acquisition planning, defining requirements, business case development, performance of the schedule, and formulation, justification and execution of the budget. The PM is responsible for effectively managing project risks to ensure effective systems and services are delivered through a total life-cycle approach to the end user on schedule, within budget and at the required levels of performance.

A PPM may also serve as PM for projects within the scope of the program.

Performance Requirements Summary (PRS) - A listing of the performance requirements under the contract that are to be evaluated by the Government on a regular basis, performance indicators for these requirements, performance standards for these requirements and surveillance methods to be used to determine if performance standards are met.

Performance Standard - The Contractor's performance level required by the Government.

Performance Work Statement (PWS) - A statement of work for performance-based acquisitions that describe the required results in clear, specific, and objective terms with measurable outcomes.

Quality Assurance (QA) - Policies and procedures adopted by the Government to ensure that supplies and services acquired under Government contracts conform to the contract’s quality requirements.

Quality Assurance Surveillance Plan (QASP) - A plan describing how the agency will survey, observe, test, sample, evaluate, and document the Contractor's performance in meeting critical performance standards identified in the contract.

Quality Control (QC) - All necessary measures taken by the Contractor to ensure that the quality of an end product of service shall meet contract requirements.

Service Request - A response to an agency request or a response to an observation that performance standards of the contract are not being met. Service-request response involves analysis of the problem and adjustment of operating or monitoring controls or other immediate corrective action.

Subcontractor - Any person, other than the prime Contractor, who offers to furnish or furnishes any supplies, material, equipment, or services of any kind under a prime contract or a subcontract entered into in connection with such prime contract, and any person who offers to furnish or furnishes general supplies to the prime contractor or a higher tier subcontractor. The Government does not have privity of contract with a subcontractor.

Work Order – A submission from the Government to the Contractor that details the service to be completed for a specific case. To include the relevant data and records describing the case(s) to be analyzed including the legal issues involved, the number and identification of relevant tax periods, the number of taxpayers or entities, and a description of the data including whether there are any anticipated challenges.

Work Week - Monday through Friday, unless specified otherwise.

17. Acronyms CO – Contracting Officer

COR – Contracting Officer's Representative

EST – Eastern Standard Time (U.S.)

IT – Information Technology

PM – Project Manager

POC – Point of Contact

PPM – Project Planning and Management

QA – Quality Assurance

QASP – Quality Assurance Surveillance Plan

QCP – Quality Control Plan

TDC – Taxpayer Digital Communication

18. Government-Furnished Property and Services The Contractor shall ensure accurate control and accountability of all Government-Furnished Property in accordance with the terms and conditions of this contract. The Government will furnish, at no cost to the Contractor, the GFP shown below.

There is no expectation the Contractor will require access to IRS equipment or IT environments and infrastructure.

3.1 Government Services

The Government will provide the space, LAN connections, and power supply for all devices.

19. Facilities The Government will provide space in the buildings, when available, and furniture and furnishings for official business only in the performance of this contract.

20. Equipment The Government will provide all required servers.

21. Materials and Information Copies of required materials may be provided to the Contractor in hard, or soft copy. All materials shall remain the property of the Government and shall be returned to the COR upon request and at the end of the contract period.

22. Quality Assurance (QA) The Government shall evaluate the Contractor's performance under this contract in accordance with the Quality Assurance Surveillance Plan. This plan is primarily focused on what the Government must do to ensure that the Contractor has performed in accordance with the performance standards. It defines how the performance standards will be applied, the frequency of surveillance, and the minimum acceptable quality level. As part of the Governments quality assurance program, the Government may:

• Review and, if warranted, reject any reports or other submittals required from the Contractor.

• Review performance and service records, including but not limited to monthly progress reports, and any computerized or hard copy records maintained by the Contractor documenting performance under this contract, and require correction of any unsatisfactory conditions noted.

• Determine the adequacy of the Contractors quality control program and documentation and the overall success of this program. The Government may order improvements if it determines the program is insufficient or ineffective.

Contractor performance shall be evaluated based on performance success or deficiencies, success or failure in meeting contract requirements, and the Contractors record of correcting deficiencies when noted. While corrective actions shall be noted, a record of significant performance deficiencies may lead to a performance evaluation that is less than satisfactory even if the Contractor takes corrective action.

The use or nonuse of any quality assurance methods (e.g., a measurement and verification (M&V) program) by the Government shall not constitute a waiver of, or excuse from contract requirements.

The Government may implement or change quality assurance measures at any time during the term of the contract.

23. Contractor-Furnished Items and Services The Contractor shall furnish, all facilities, equipment, and supplies required to perform the work under this contract that are not listed under Government-Furnished Property and Services.

4.1 Facilities

The Contractor shall furnish all facilities required to perform the work under this contract that are not listed under Government-Furnished Property and Services.

24. Equipment The Contractor shall furnish all equipment required to perform the work under this contract that are not listed under Government-Furnished Property and Services.

25. Materials The Contractor shall furnish materials required to perform the work under this contract that are not listed under Government-Furnished Property and Services.

26. Contractor Responsibilities The Contractor shall only conduct business with designated Government personnel listed as points of contact (POCs). Names of authorized personnel shall be provided to the Contractor by the Government, in writing, and updated as necessary throughout the contract period of performance.

U.S. Government records, copies of original results and reports, verified original data, corrected data, and corrected supporting final reports which are maintained by the Contractor remain the property of the U.S.

Government. These files/results must be surrendered to the COR.

27. Contractor Personnel The personnel listed below are considered essential to the work being performed under this contract due to the technical complexity, litigation sensitivity, large data volumes, digital asset valuation requirements, and performance timelines outlined in this PWS. The Contractor shall ensure that Key Personnel possess the education, certifications, and specialized experience necessary to successfully perform Digital Asset Computation, Data Ingestion, Report Generation, Quality Control, and Litigation Support services.

Before removing, replacing, or diverting any Key Personnel, the Contractor shall:

a. Notify the Contracting Officer in advance

b. Submit justification (including proposed substitutions) in sufficient detail to permit evaluation of the impact on this contract.

c. Obtain written acknowledgement from the COR prior to implementing any substitution..

Key Personnel shall be assigned at contract award and remain dedicated to the contract unless otherwise approved.

The following personnel are considered key personnel by the IRS:

4.5a) Lead Digital Asset Tax and Accounting Subject Matter Expert 4.5b) Lead Data Analyst 4.5c) IT Senior Consultant 4.5d) IT Subject Matter Expert 4.5e) Sofware Support Lead

4.5a Lead Digital Asset Tax and Accounting Subject Matter Expert:

• Master’s degree in Accounting, Taxation, Finance, or Juris Doctor (JD) from an accredited institution.

• Active Certified Public Accountant (CPA) license or active bar membership in good standing.

• Continuing Professional Education (CPE) in digital asset taxation or emerging financial technologies within the past three (3) years.

• Minimum five (5) years of progressive tax and accounting experience, including at least three (3) years focused specifically on digital assets as defined under IRC §6045(g)(3)(D).

• Demonstrated experience applying Notice 2014-21, subsequent IRS guidance, and the 2024 final regulations (T.D. 10000) regarding basis tracking and specific identification.

• Experience preparing or reviewing expert-level tax computations suitable for administrative appeals or litigation.

• Experience overseeing large-volume transaction analyses (100,000+ transactions).

• Experience supervising technical teams responsible for producing complex tax computation reports.

• Advanced expertise in cost basis methodologies (FIFO, LIFO, HIFO, Specific Identification).

• Deep knowledge of custodial and noncustodial exchanges, DeFi protocols, staking, lending, NFTs, smart contracts, and cross-chain transactions.

• Ability to certify the technical accuracy of Digital Asset Computation Reports.

• Experience testifying or supporting testimony in civil or criminal tax proceedings preferred.

• Demonstrated knowledge of IRS guidance regarding AI usage and ethical limitations.

4.5b Lead Data Analyst:

• Bachelor’s degree in Data Science, Computer Science, Information Systems, Mathematics, Engineering, or related quantitative field.

• Master’s degree preferred.

• Minimum five (5) years of experience in data analytics, including at least three (3) years working with blockchain data and digital asset transaction datasets.

• Demonstrated experience ingesting and standardizing large, heterogeneous datasets (CSV, API, blockchain explorers, exchange exports).

• Experience analyzing datasets exceeding 1,000,000 transactions.

• Experience applying AI/ML tools for data normalization, anomaly detection, and transaction tracing.

• Strong proficiency in blockchain analytics platforms and forensic tools.

• Knowledge of distributed ledger technologies, consensus algorithms, smart contracts, and cryptographic principles.

• Experience performing reconciliation and transformation processes suitable for evidentiary documentation.

• Experience generating defensible audit trails documenting data ingestion, transformations, and assumptions.

• Ability to detect inconsistencies, missing basis, incomplete transaction histories, and anomalous patterns.

• Ability to clearly document methodologies in support of litigation-ready reports.

• Strong written and verbal communication skills suitable for technical briefings.

4.5c IT Senior Consultant

• Bachelor’s degree in Information Technology, Computer Science, Information Systems, Engineering, or related field.

• Master’s degree preferred.

• Minimum ten (10) years of progressive experience in enterprise IT environments, including at least five (5) years supporting federal IT systems or regulated environments.

• Demonstrated experience implementing or supporting systems subject to FedRAMP, FISMA, NIST 800-series, and federal security requirements.

• Experience architecting or advising on secure data environments handling sensitive but unclassified (SBU) data.

• Experience supporting large-scale data analytics platforms or financial systems.

• Expertise in secure system architecture, cloud environments, and data security controls.

• Knowledge of Publication 1075 requirements for safeguarding tax information.

• Experience ensuring system compliance with Section 508 deliverable standards.

• Ability to advise on system scalability to support high-complexity cases (1,000,000+ transactions).

• Experience supporting systems used in litigation contexts preferred.

4.5d IT Subject Matter Expert

• Bachelor’s degree in Information Technology, Cybersecurity, Computer Science, Data Engineering, or related discipline.

• Minimum five (5) years of specialized IT experience, including at least:

o Two (2) years supporting secure data ingestion, transformation, and analytics systems;

and o Two (2) years working in environments subject to federal or comparable regulatory security controls.

• Demonstrated experience implementing or maintaining FedRAMP-authorized or equivalent secure environments.

• Experience supporting API integrations, encrypted data transfers, and secure data pipelines.

• Expertise in secure data ingestion workflows.

• Knowledge of encryption standards, secure file transfer protocols, and audit logging.

• Experience documenting technical architecture and system controls suitable for Government review.

• Ability to support system modifications required for evolving digital asset technologies.

4.5e Software Support Lead

• Bachelor’s degree in Computer Science, Software Engineering, Information Systems, or related field.

• Minimum eight (8) years of experience in software development and/or application support, including:

o Five (5) years supporting mission-critical systems;

o Three (3) years in a supervisory or lead capacity managing technical teams.

• Experience supporting financial computation systems or analytics platforms.

• Experience managing software updates while maintaining evidentiary integrity of computational outputs.

• Experience managing incident response and defect resolution within strict turnaround times.

• Ability to ensure software outputs are reproducible, auditable, and defensible for litigation.

• Experience coordinating system updates without disrupting ongoing casework.

28. Identification of Contractor Employees All Contractor/subcontractor personnel shall wear company picture identification badges to distinguish themselves from Government employees. When conversing with Government personnel during business meetings, over the telephone, or via electronic mail, Contractor/subcontractor personnel shall identify themselves as such to avoid situations arising where sensitive topics might be better discussed solely between Government employees. Contractors/subcontractors shall identify themselves on any attendance sheet or any coordination documents they may review. Electronic mail signature blocks shall identify their company affiliation. Where practicable, Contractor/subcontractors occupying collocated space with their Government program customer shall identify their workspace area with their name and company affiliation, or at a minimum, "Contractor" after name.

29. Quality Control The Contractor shall establish and maintain a complete quality control program that shall ensure services are performed in accordance with this contract. The Contractor shall develop and implement procedures to identify, prevent, and ensure non reoccurrence of defective services. The Contractor's quality control program is the means to ensure that work complies with the requirements of the contract. The Contractor shall develop, maintain, enforce, and provide to the PPM, or other designee, a Quality Control Plan (QCP) within 30 business days after contract award. The QCP shall be submitted to the COR within five

(5) working days when changes are made thereafter. The QCP shall ensure the Government receives the level of quality that is consistent with the requirements specified in this contract. The QCP shall be sufficiently detailed to provide the Contractor's methodology for identifying and recruiting qualified personnel. The QCP shall also provide the Contractor's methodology for resolving problems identified by the Government during reviews conducted in accordance with its Quality Assurance Surveillance Plan (QASP). The QCP shall also provide the Contractor's methodology for establishing an internal feedback system for support personnel, and for resolving problems identified by that feedback system. The QCP shall demonstrate and validate that the services or deliverables to be provided under the contract are completed with a level of quality that meets the minimum performance threshold established in the Government's QASP. The QCP shall address Quality Management Approach, Quality Assurance, Quality Control and Quality Standards.

30. Specific Tasks The tasks outlined here represent a holistic Digital Asset Initiative by the IRS to analyze, summarize, and expedite necessary data/information related to IRS casework. These cases require highly technical research and reporting for possible litigation. A case consists of the following tasks.

5.1 Task 1 – Digital Asset Computation

5.1.1 Work Order

The Contractor shall provide case examination services support for diverse digital asset cases within IRS.

For services provided, to initiate work, the IRS subject-matter-expert (SME) will send a work order, which includes the relevant data and records, to the Contractor describing the case(s) to be analyzed including the legal issues involved, the number and identification of relevant tax periods, the number of taxpayers or entities, and a description of the data including whether there are any anticipated challenges

(see Appendix A – Sample Digital Asset Case Work Order). If this information is incomplete or abstract, this shall be brought to the attention of PM(s), SME(s), and the COR, within three (3) business days.

A digital assets case may have a variety of transactions that occur on one or more public ledgers (blockchains), non-public transactions facilitated through digital assets exchanges or other intermediaries or peer-to-peer transactions. The Contractor shall provide examination case support as outlined in the complexity ratings, below, for each taxpayer digital asset examination case.

A digital asset examination case for purposes of the number of cases supported in this contract is defined as an original submission from IRS consisting of a unique taxpayer (including joint filers) and any number of tax years. Examination case support includes, but is not limited to: ad hoc case discussions, bulk data analysis, data ingestion, data standardization, valuation in fiat currencies, and generating reports to support income and gain and/or loss computations for digital asset activities.

5.1.2 Case Ingestion Conference and Ad Hoc Meetings

The Contractor shall participate in a case ingestion conference with the IRS at the commencement of each case. During the conference, the Contractor and IRS will establish case complexity standards, timeframes, and scope of the case, determine the appropriate digital asset valuation sources, and determine case complexity. The Contractor shall apply its business domain expertise and advise the IRS on issues that may result in an incomplete or inaccurate computation. The Contractor will provide guidance on how these issues will be mitigated and will identify the methodologies to be used in the computation. This conference would take place within five (5) days of the IRS sending over the work order. Hours and timelines are negotiable provided the IRS approves, in writing, a change in response timelines.

The Contractor shall provide a written case computation plan within 3 workdays after the case ingestion conference that includes the following:

a. A summary of the case ingestion conference including key decisions, agreed assumptions, and scope exclusions,

b. Cost basis method(s) (i.e. LIFO, HIFO, etc.) to be used,

c. An estimate of the number of hours to ingest all relevant data provided by the IRS, as well as any attendant or related data the Contractor collects through their systems,

d. An estimate of the number of hours to produce the report described.

The Contractor shall provide technical and computational support only. The Contractor shall not make or direct Government decisions regarding tax positions, enforcement actions, examination scope, penalties, or determinations. All such decisions remain solely with the IRS. The Contractor shall be available to support the IRS in advance of meetings with taxpayers or their representatives and during any administrative appeal proceeding or litigation (as described in Task 2). This support includes but is not limited to:

a. Explaining the methodology used in arriving at the conclusions in the report

b. If blockchain data is included in the report, explaining any assumptions made by the

Contractor’s algorithms or methodology in creating the report (including data inconsistencies, resolution, and report revisions)

Meetings shall be held by teleconference or an internet-based meeting platform at the discretion of the IRS, mainly Microsoft Teams.

The following performance standards will be met:

a. The Contractor demonstrates expertise with facts pertinent to the report

b. The Contractor demonstrates professionalism in effective verbal communication and interpersonal team skills

c. The Contractor, responds within three (3) business days to IRS written or oral inquiries

Additionally, ad hoc meetings will be held with Business Operating Divisions (BOD) leadership when warranted. These ad hoc meetings will include periodic and scheduled “office hours” or related meetings and trainings to promote communication and engagement and facilitate efficient case support to IRS case agents / SMEs.

The Contractor could be required/requested to participate in taxpayer meetings with the IRS employees.

The Contractor cannot hold taxpayer meetings without the presence of IRS representatives.

31. Data Ingestion Prior to ingesting the data provided by the IRS, the Contractor and IRS will hold an ingestion conference.

The absence of an industry standard for data formatting creates challenges for the IRS in interpreting and analyzing data generated by digital assets transactions. Contractors in the digital asset market, generally have proprietary means to standardize data formats from diverse sources, making the information readable on IRS systems and available for analysis. The Contractor shall provide support to ingest data that are in addition to the Contractor’s current ability to ingest data from third parties such as any asset or blockchain that is listed on a major exchange.

Taxpayer digital assets activity may involve numerous digital asset transactions yearly. The transactions may cross multiple exchanges and digital wallets. For analysis, the Contractor shall aggregate transactions, and value the assets involved as an essential part of computing gains and losses. This includes but is not limited to transactions that are considered realization events under the Internal Revenue Code. The Contractor shall provide to the IRS SME an ingestion report in CSV format, within 5 workdays of receiving the data, listing all ingested transactions. The IRS SME will review the report and respond back to the Contractor within 5 workdays noting potential additional data sources or missing transactions. This process may be repeated as needed, as information becomes available. The Contractor shall not prepare the digital asset computation report until the IRS SME confirms the transaction report includes all known transactions.

Datasets for the purpose of casework will be transferred to the Contractor through encrypted communications, most commonly email transactions, Taxpayer Digital Communication (TDC), or Kiteworks.

Specialized technology and infrastructure are required to digest, contain, and subsequently analyze digital assets data due to its unique requirements, including decimal place precision, varying field characteristics, and file formats.

The data ingested may include, but is not limited to:

a. Publicly available on-chain data and private off-chain data

b. Application Programming Interface (API) keys obtained through exchanges, wallets, or other sources

c. Comma Separated Values (CSV), Excel, or Portable Document Format (PDF) files from various sources

d. Data obtained through merchant electronic systems

e. Related data obtained by the Contractor for valuation purposes

f. Relevant data from evolving and yet unidentified sources

g. Digital asset lending activities, trading involving margin, and foreign currency transactions

Data storage shall comply with Publication 1075, Tax Information Security Guidelines for Federal, State and Local Agencies. Final or completed cases shall be formatted per the request of the IRS for archival purposes and then become the sole property of the IRS.

32. Digital Asset Computation Report For services provided, the Contractor shall provide a digital asset computation report presenting the information requested in the work order, including gain or loss computation for each asset for each year at issue, transfer analysis for each year identifying all nontaxable transfers between taxpayer accounts identified by the Contractor during the analysis of records, and a summary explanation of the methodology used to produce the report. The report shall be formatted in Word, Excel, CSV, PDF, or a combination of these formats. The Contractor shall transmit all underlying data to prepare the report, and the report itself, to the IRS in a format specified in the work order. The Digital Asset Computation Report shall include the following key elements:

a. File Index – Listing of the files and wallet addresses included in the computation as source accounts and supporting documents

b. Ingestion Report – Listing of all ingested transactions

c. Gain/Loss Computation – Computation of gains and losses from digital asset transactions that traces acquisitions and dispositions back to the Ingestion Report

d. Transfer Analysis – Listing of all transfers between accounts (potentially non-taxable transfers) and transfers in and out of the source accounts (potentially taxable transfers).

e. Summary of Adjustment (IRS template available) – A separate Excel workbook for each tax period that includes a separate tab for each of the following:

a. Summary – Total gains, losses, and ordinary income

b. Ordinary Income Detail – Listing of digital asset income including awards, rewards, rebates, and earnings as well as unexplained deposits

c. Capital Gains/Losses by Asset – Listing of each asset, quantity, proceeds, cost basis, gain/loss, and holding period (short/long term)

d. Form 8949 Detail – Detail listing of transactions that includes the information necessary for IRS Form 8949

e. Missing Basis – Listing of assets where no basis information is available

f. End-of-Year Asset Balances

The Contractor shall report instances where the taxpayer’s data deviate from expected values and/or from normal accounting practices or include potential gaps in the completeness and/or accuracy of the data. If the Contractor foresees the report output taking more time than the agreed upon timeframe, the Contractor will present a reasonable timeframe to the IRS for consideration and formal approval. The Contractor shall be available to discuss in detail the digital asset computation report as well as any standardization issues so they can be promptly addressed.

The Contractor shall provide its own digital asset computation software and any related hardware for use in the performance of these digital asset computations. The Contractor will not have access to any IRS software, systems or hardware. The software capability is required to generate the reports, and other requests, outlined here. The Contractor software capability is required to meet FedRAMP standards.

FedRAMP authorization shall be provided in response to any participation in this project. FedRAMP authorization process is outlined here (fedramp.gov).

https://www.fedramp.gov/rev5/agency-authorization

33. 5.1.4.1 Report Technical Standards The digital asset computation report, shall reflect the Contractor’s ability to:

1. Identify and track cost basis (in US Dollar (USD)) for each unit (or fractional unit) of digital assets by specific identification and as of the date of the transaction. In doing so, the following information shall be included:

a) Type of digital assets

b) Quantity (in fractional units)

c) Transaction date

d) Value in USD

e) Identifying information for the unit (or fractional unit)

f) Lot selection methodology shall be identified

2. Provide computations for digital assets lacking a USD analog or trading pair and support the computation with archived information suitable for introduction as evidence in litigation

3. Provide information on the acquisition of digital assets. In doing so, the following information must be included:

a) Type of digital assets

b) Quantity (in fractional units)

c) Transaction hash when available, including date and time of the acquisition

d) Value in USD at acquisition

e) Identifying information for the unit (or fraction) of asset

4. Provide tracking information for all sales or other disposition transactions, including but not limited to buy, sell, send, and receives, across multiple platforms, wallets, peer-to-peer transactions, and exchanges. This may include both on-chain (Blockchain) and off-chain transactions to the extent feasible. The following information shall be included:

a) Type of digital assets

b) Quantity (in fractional units)

c) Transaction hash with date and time of the disposition

d) Value in USD at disposition

e) Identifying information for the unit (or fractional unit) of digital assets

f) Cost basis methodology applied (FIFO, LIFO, specific ID, average cost)

g) Foreign currency conversions, if applicable

5. Permit manual adjustments by IRS SME or Case Agent to the tax character and/or basis of the asset (e.g., classifying an asset as inventory versus non-inventory)

6. Identify asset holding periods and character

7. Identify assumptions made by the Contractor or its systems in creating the report, if any

5.1.4.2 Data Inconsistencies

The Contractor shall report on instances where the taxpayer’s data are inconsistent with normal accounting practices and provide an explanation of the discrepancy. The Contractor shall provide documentation sufficient to allow for the replication and verification of computations, including:

a. Data sources used (APIs, CSVs, PDFs and blockchain records)

b. Transformation and reconciliation steps performed

c. Assumptions, manual adjustments and classification decisions

5.1.4.3 Error Resolution and Report Revision

The Contractor will collaborate with the IRS to resolve any data that are discrepancies from normal accounting practices. For example, disposition of digital assets where no acquisition information of the assets is available. This work could include, but is not limited to, obtaining more information from the Case Agent or Subject Matter Expert (SME), or adjusting the data under the direction of the Case Agent or SME. Thereafter, the Contractor will produce a revised report reflecting the resolutions discussed with the IRS.

The following performance standards will be met:

a. The Contractor demonstrates expertise with facts pertinent to the report

b. The Contractor demonstrates professionalism in effective verbal communication and interpersonal team skills

c. The Contractor, within (3) business days, responds to IRS written or oral inquiries

5.1.4.4 Case Complexity

Case work approved by the IRS cannot exceed the agreed hours listed in the complexity rating below.

Any adjustments to the complexity are at the discretion of the IRS and will be authorized in writing by the Contracting Officer.

Level # of

Transactions Platforms/Datasets DeFi transactions Hours Work Days

Low Under 100,000 Under 5 No <10 <15

Medium 100,000 to 1,000,000 6 to 10 No >10 & <40

>15 & <20

High Over 1,000,000 10 and over Yes >40 < 30

A digital asset computation is deemed complete once the Contractor has produced a digital asset computation report from the datasets produced by the IRS, performed a quality control check that certifies the completeness and accuracy of that report, and reviewed by IRS personnel for completeness and accuracy.

5.2 Task 2 – Litigation Support…