One of the enforcement actions that FAA can take against a pilot is known as a "709 ride" in which your certifications and rating are reevaluated by the FAA.
The regulatory basis for the exam comes from 49 USC 44709 (hence the name), which states:
(a) The Administrator of the Federal Aviation Administration may reinspect at any time a civil aircraft, aircraft engine, propeller, appliance, design organization, production certificate holder, air navigation facility, or air agency, or reexamine an airman holding a certificate issued under section 44703 of this title.
The outcomes and procedures are handled as show here.
Possible Outcomes (5-1424, 5-1428):
TL;DR: As shown in 5-1428, the results are:
Issuance of a letter of results to the airman;
Possible issuance of a Temporary Airman Certificate; or
Possible downgrade of the airman’s certificate.
If the airman satisfactorily completes the reexamination (5-1424(A)), then the inspector will issue a letter of results. If the certificate had been temporarily suspended, then the FSDO forwards a copy of the letter of results to the Regional Assistant Chief Counsel, who then takes appropriate action to terminate the suspension. If the airman needs use of the certificate immediately, the Regional Assistant Chief Counsel may authorize the inspector to issue a temporary certificate that bears all ratings and limitations from the original certificate. Otherwise, if the certificate had not been suspended, the airman is free to exercise the privileges of the certificate and/or ratings.
If the airman does not satisfactorily complete the reexamination (5-1424(B)), then:
The airman must be informed in detail of each deficiency. Additionally, if the airman’s certificate had been temporarily deposited at the FSDO and the temporary deposit term is nearing expiration, a decision must be made to suspend the certificate or to extend the temporary deposit period for another 30 days. If, in the opinion of the inspector, the airman could successfully complete another reexamination by obtaining additional instruction, every effort must be made to encourage the airman to do so.
Depending on what the inspector decides, one of two things happens:
1) When the inspector decides to allow the airman additional time, the inspector takes the airman's certificate for temporary deposit at the FSDO and issues a temporary certificate. The temporary certificate must have a limitation against carrying passengers and a 30-day expiration date. The airman has 30 days in which to practice or obtain additional dual instruction before being reexamined again.
2) If the inspector determines the airman is unable to establish qualification to hold the certificate or rating, legal enforcement action must be taken to revoke the airman’s certificate and/or ratings. (See FAA Order 2150.3, Chapter 8.)
When is the enforcement action issued?
This is mostly covered in the above sections. Essentially, if you are not found deficient, a revocation of your suspension will begin to be processed or you can just proceed on your merry way. If you are found deficient, then you will either be immediately be issued a temporary certificate with limitations so you can practice to pass another re-exam, or your certificate will revoked as soon as can be legally done (presumably the inspector will tell you not to fly, but I don't have backing for that).
What happens during a 709 ride? (5-1423)
Part (A) of 5-1423 deals with this, and states:
Extent of Reexamination. The inspector should test the airman only in the areas specified in the letter of notification. However, if other deficient areas are noted during the reexamination, these would also be the basis for failure of the test. For example, during a reexamination when the airman was to be tested on the ability to recognize and recover from stalls, the inspector noted that on takeoff the airman over-rotated to a dangerously high pitch attitude, requiring the inspector to take corrective action. In this situation the reexamination should be discontinued, and the airman should be informed of failing the test because of deficient skills exhibited while en route to demonstrate the maneuvers.
Part (B) notes that the inspector can place special emphasis on certain areas based on the reason for the letter being issued. You can fail if you are unqualified for any maneuver contained in the PTS for the certificate/rating you are being tested for, as Part (C) notes.
Part (D) notes that the test does not have to be flight-based, though presumably one that did would have some portion of oral examination. (Part (E) allows the test to be taken in a simulator, if it is requested by the airman and approved by the inspector).
Knowledge Reexamination. The reexamination may be conducted using an oral or knowledge test, devised by the inspector, if the area to be reexamined is one of knowledge rather than skill or flight proficiency.
Reference: http://www.law.cornell.edu/uscode/text/49/44709
The regulatory basis appears to be 49 U.S. Code § 44709 - Amendments, modifications, suspensions, and revocations of certificates
When might a 709 ride happen:
The Administrator of the Federal Aviation Administration may reinspect at any time a civil aircraft, aircraft engine, propeller, appliance, design organization, production certificate holder, air navigation facility, or air agency, or reexamine an airman holding a certificate issued under section 44703 of this title.
Generally only as the result of some (alleged) violation. I've found references to CFIs receiving 709's as a result of actions performed by not only their students, but former students as well.
Possible outcomes:
The FAA may amend, modify, suspend, or revoke the certificate in question.
What happens: I haven't found a definitive source to this but rather anecdotal evidence to suggest the pilot being examined is subject to the PTS of the certificate in question, but this is not to imply that a full check ride will be required. Rather, the extent of the examination is up to the inspector.
