20.2.1  General and Legal Authorizations

Manual Transmittal

October 07, 2011

Purpose

(1) This transmits revised IRM 20.2.1, Interest, General and Legal Authorizations.

Background

This IRM incorporates legal authorizations and return due date information formerly contained in IRM 20.2.2, Legal Authorization.

Material Changes

(1) The title of this IRM was changed from "General" to "General and Legal Authorizations."

(2) Minor editorial changes have been made throughout this IRM. Also, website addresses, form references, and IRM references were reviewed and updated as necessary. Other significant changes to this IRM are listed below.

(3) IRM 20.2.1.1 - Changed title from "Servicewide Interest Program" to "Office of Servicewide Interest."

(4) IRM 20.2.1.3.1 - Added information from IRM 20.2.2.1, Authorization regarding authorizations to assess and/or refund interest.

(5) IRM 20.2.1.3.1(5) - Added the statement that interest cannot be reduced or abated due to reasonable cause or negotiation.

(6) IRM 20.2.1.3.2 - Removed reference to obsolete Form 5391 and Form 9345.

(7) IRM 20.2.1.5 - Updated procedures regarding hardship and Taxpayer Advocate Service cases.

(8) IRM 20.2.1.6.2 - Revised to state that prior to January 1, 1983, the government was prohibited from computing interest on interest (compounding interest).

(9) IRM 20.2.1.6.1 - Corrected the date in the note from "December 31, 1999" to "December 31, 1998."

(10) IRM 20.2.1.6.4 - Clarified the definition of underpayment interest.

(11) IRM 20.2.1.6.5 - Clarified the definition of restricted interest.

(12) IRM 20.2.1.6.6 - Clarified the definition of annual interest netting.

(13) IRM 20.2.1.6.8 - Modified to discuss only interest rates.

(14) IRM 20.2.1.7 - Incorporated information previously contained in IRM 20.2.2.2, Tax Return Due Dates.

(15) Exhibit 20.2.1-1 - Edited to list only Interest IRMs.

(16) Exhibit 20.2.1-2 - Revised definitions for some of the terms.

(17) Exhibit 20.2.1-3 - Revised and incorporated Exhibit 20.2.2-1, Return Due Date Chart into this IRM.

Effect on Other Documents

This material supersedes IRM 20.2.1, dated July 18, 2008 and incorporates IRM 20.2.2, Legal Authorization, content dated 11/18/2008 that is being obsolesced simultaneously with the release of this IRM.

Audience

This IRM is intended for employees of all operating divisions who work with interest.

Effective Date

(10-15-2011)

Duane M. Gillen
Director, Exam Policy
Small Business/Self-Employed

20.2.1.1  (10-15-2011)
Introduction

  1. This IRM contains information specific to interest computations for all areas of the Service. Instructions for processing cases/adjustments unique to a business operating division can be found in the applicable IRM for the specific business function(s).

  2. The Servicewide Interest Program is now the Office of Servicewide Interest (OSI).

20.2.1.2  (10-15-2011)
Overview

  1. The IRS administers the internal revenue laws, including laws that govern the computation and payment of interest.

  2. This multi-functional IRM provides instructions for computing interest and applies to all functional areas, business operating divisions, Appeals, Taxpayer Advocate Service, and Criminal Investigation.

  3. Policy statements that relate to interest are found in the IRM 1.2.20, Policy Statements for Penalties and Interest Activities.

20.2.1.3  (07-18-2008)
Administrative

  1. This section provides administrative guidelines.

20.2.1.3.1  (10-15-2011)
Authorization

  1. In accordance with IRC 6601(a), IRC 6601(b), and IRC 6611, the payment of interest is required unless otherwise specified by law.

    1. IRC 6601(a) states that if any amount of tax, "Is not paid on or before the last date prescribed for payment, interest on such amount at the underpayment rate established under section 6621 shall be paid for the period from such last date to the date paid."

    2. IRC 6601(b) provides that an extension of time to file or any installment agreement under IRC 6159 does not extend the time to pay.

    3. IRC 6611(a) states, "Interest shall be allowed and paid upon any overpayment in respect of any internal revenue tax at the overpayment rate established under section 6621."

  2. IRC 6621 provides the interest rates on overpayments and underpayments of tax, which are tied to the federal short-term interest rate.

  3. While the above paragraphs deal mostly with "normal interest" computations, information on "restricted interest" and other complex interest computations can be found in later sections of IRM 20.2, Interest. The types of interest are defined in IRM 20.2.1.6, Terminology.

  4. Campus directors are authorized to perform all administrative actions on all interest cases/adjustments including restricted interest conditions, except those:

    • Involving suits for refund filed by taxpayers in which a credit (overpayment) is determined by a court, or

    • Requiring review by the Joint Committee on Internal Revenue Taxation.

  5. Interest is statutory. Interest cannot be reduced or abated due to reasonable cause. It also cannot be negotiated. See IRM 20.2.7, Abatement and Suspension of Interest: IRC 6404 and 7508, for reasons interest can be reduced or abated.

  6. All reference materials involving interest must be consistent with the procedures in this IRM and must be approved by management in SB/SE, Examination, Exam Policy, Office of Servicewide Interest (SE:S:E:EP:OSI).

20.2.1.3.2  (10-15-2011)
Feedback and Issue Reporting

  1. To maintain the accuracy of IRM 20.2, Interest, send corrections, change requests, and inquiries to the Office of Servicewide Interest (OSI) via the Servicewide Electronic Research Program (SERP) Feedback System. The SERP Staff submits the SERP feedback requests to the appropriate IRM author for consideration. This process of submitting feedback to the OSI is easy to use and provides continuous tracking that allows viewing the status of any feedback inquiries. SERP feedback issue reporting can be used to address concerns with IRMs posted on SERP. Follow guidelines contained in IRM 21.1.2.2.2, IRM 21 - Change Requests, to submit feedback issues.

    Note:

    Before you submit questions regarding interpretation of IRM instructions via the SERP feedback form, please consult your lead or manager for assistance.

  2. When it is necessary to seek Chief Counsel advice on an interest issue, the request needs to be shared with the OSI as it is being forwarded to Chief Counsel. The request may also be sent through the OSI for submission of the request to Chief Counsel. This action ensures the OSI staff stays abreast of emerging issues that impact interest computation and provide for distribution of that information to all area offices and campuses.

  3. Employee suggestions should continue to be sent through the Employee Suggestion Program for consideration.

  4. Other methods that may be used to contact the Office of Servicewide Interest are shown below.

    • Report Programming Problems: Use Form 5715, Systems Production Evaluation Report, (also in electronic version) to report systemic programming and operational problems that need immediate attention (work stoppage situations only). See IRM 3.0.273.3.3, Form 5715, Systems Production Evaluation Report.

    • Ask an Analyst: Questions are entered on the Office of Servicewide Interest website http://sbseservicewide.web.irs.gov/interest/default.aspx. Responses are posted to the website as well as to the individual who asked the question. Basic requests on how to compute interest must not be submitted to the site. If the question asked is taxpayer or tax module specific, it will be edited so that it may be viewed on the website by a wider audience.

20.2.1.3.3  (10-15-2011)
References

  1. Use the following materials to help understand this IRM:

    • Exhibit 20.2.1-1, IRM 20.2 Reference List by Section

    • Exhibit 20.2.1-2, Definition of Terms

    • Exhibit 20.2.1-3, Return Due Date Chart

20.2.1.4  (10-15-2011)
Taxpayer Communication Guidance for IRS Personnel

  1. Use the Penalty and Interest Notice and Explanation (PINEX), or a legible print from Command Code (CC) COMPAD, INTSTD or the Automated Computation Tool (ACT/DMI) 490 Report to provide a taxpayer a calculation of credit or debit interest related to a tax module. See IRC 6631 and IRM 20.2.8.3, Manual Computations. See also IRM 20.2.3, Command Code PINEX, for PINEX instructions and IRM 20.2.2, Methods of Computing Interest. Remove the taxpayer's SSN, except for the last four digits, prior to mailing any correspondence per OMB Memorandum M-07-16, Safeguarding Against and Responding to the Breach of Personally Indentifiable Information.

    If And Then

    a taxpayer inquires about computer generated interest by telephone,

    you are unable to match the interest on their notice by using CC INTSTD, COMPAD, or ACT,

    prepare Form 4442Inquiry Referral, (paper or electronic versions) and send to an interest specialist within your campus.

    a taxpayer inquires about manual computation of interest,

    you are unable to match the interest assessed,

    obtain the original source document that outlines how the interest was computed. Verify it and provide a copy of this information to the taxpayer, or send to a Field Office Resource Team (FORT) manager at the Memphis or Ogden Campus.

    The website link is: http://sbse.web.irs.gov/CCP/Exam/Exam.htm.

20.2.1.5  (10-15-2011)
Taxpayer Advocate Service (TAS)

  1. If, during a taxpayer contact, it appears the taxpayer may meet Taxpayer Advocate Service (TAS) criteria (see IRM 13.1.7.2, TAS Case Criteria, and you are unable to resolve the issue within 24 hours, you may refer the taxpayer to TAS. If it is not a hardship case, do not refer the taxpayer to TAS unless the taxpayer requests to be transferred to TAS and meets the criteria.

  2. When you refer cases to TAS, complete Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), and forward to TAS.

20.2.1.6  (10-15-2011)
Terminology

  1. The terminology used in this handbook is described in Exhibit 20.2.1-2.

20.2.1.6.1  (10-15-2011)
Types of Interest

  1. The statutory requirements for calculating interest on underpayments and overpayments are contained in IRC 6601 and IRC 6611, respectively. The payment of interest on underpayments and overpayments under these provisions is mandatory unless specifically prohibited by law.

  2. The two types of interest are:

    • Credit Interest (overpayment) - Interest paid to the taxpayer by the IRS on an overpayment of any internal revenue tax, and

    • Debit Interest (underpayment) - Interest charged to the taxpayer when tax, penalty, addition to tax, or interest is owed to the government.

      Note:

      Different interest rates may apply to underpayments and overpayments. See IRC 6621. After December 31, 1998, the interest rates for non-corporate taxpayers became equal for both underpayments and overpayments, while they are still different for corporate taxpayers.

20.2.1.6.2  (10-15-2011)
Simple Interest

  1. The term "simple interest" refers to interest that is computed only on the principal amount owed. Simple interest accrued on overpayments and underpayments of tax and penalties before January 1, 1983. At that time, the government was prohibited from computing interest on interest (compounding interest).

20.2.1.6.3  (07-18-2008)
Compound Interest

  1. The term "compound interest" refers to interest that accrues on both the principal amount and on any interest charged on the principal (i.e., interest on interest).

    • The IRS is required to compound interest daily, effective January 1, 1983.

    • When it is necessary to manually compute interest, use Command Code (CC) COMPA or the Automated Computational Tool (ACT/DMI).

20.2.1.6.4  (10-15-2011)
Normal Interest

  1. The term "normal interest" refers to interest that is computed without regard to any restrictions.

    • On an underpayment, normal interest is computed from the date the liability is due to the date the liability is fully paid, taking into account any payments, credits, and suspensions.

    • On an overpayment, normal interest is computed from the availability date of the overpayment to the date provided by IRC 6611(b), depending on whether the amount is credited (offset) or refunded.

  2. Generally, it is not necessary to manually compute and adjust normal interest. Master File programming will compute normal interest based on debits and credits posted to the tax module.

20.2.1.6.5  (10-15-2011)
Restricted Interest

  1. The term "restricted interest" refers to any interest that is manually computed because the IRS computer is unable to identify all conditions necessary to make an accurate interest computation.

  2. Restricted interest is subject to the same three variables (time, rate, and amount) as computer generated interest. However, the rules that govern restricted interest are more complex than those for normal interest; the variables of time and rate may differ.

  3. In many instances, Master File programming cannot compute restricted interest. Therefore, you must manually compute and adjust interest when Master File limitations prevent systemic generation of interest. See IRM 20.2.8, Restricted Interest.

20.2.1.6.6  (10-15-2011)
Annual Interest Netting

  1. The term "annual interest netting" refers to a method of computing interest which equalizes the difference between credit and debit interest rates within a single tax module on the same amount during overlapping periods. For example, if a taxpayer received a refund with interest and it is later determined that an underpayment exists in that module during the same time period, the debit and credit interest rates will be "netted or equalized" within that tax module during the overlapping period. If there is no reason to otherwise manually compute and restrict interest, then it is not necessary to manually compute interest to make an annual netting adjustment. See IRM 20.2.14, Netting of Overpayment and Underpayment Interest.

20.2.1.6.7  (10-15-2011)
Net Rate Interest Netting

  1. The term "Net Rate Interest Netting" refers to the method of computing interest to equalize/eliminate the interest rate differential between overpayments and underpayments (for the same taxpayer for the same or different types of tax). The overlapping debit and credit interest computation periods occur between different tax modules on equivalent amounts. See IRM 20.2.14, Netting of Overpayment and Underpayment Interest, for instructions on making net rate interest netting adjustments.

    Note:

    Modules requiring net rate interest adjustments are always restricted from systemic computation and require a manual calculation of interest. Since IDRS interest computation command codes are not suited to perform net rate calculations, use the Automated Computational Tool (ACT/DMI).

20.2.1.6.8  (10-15-2011)
Interest Rates

  1. Interest rates for tax overpayments and underpayments are established under IRC 6621. The interest rates are determined quarterly.

  2. The normal overpayment and underpayment interest rate is three percentage points above the federal short-term rate. The corporate credit interest rate is one percent less than the normal debit interest rate, while the General Agreement on Tariffs and Trade (GATT) rate is an additional one and half percent below the corporate credit interest rate. The large corporate underpayment rate (LCU) is two percent more than the normal underpayment interest rate. See Exhibit 20.2.1-2, for the explanation of these terms.

20.2.1.7  (10-15-2011)
Tax Return Due Dates

  1. This section explains the due dates of various types of tax returns. See Exhibit 20.2.1-3 for return due dates.

  2. When a due date falls on a Saturday, Sunday, or legal holiday, the return will be considered timely filed if it is filed on the next succeeding day that is not a Saturday, Sunday, or legal holiday. See IRC 7503.

    Note:

    This rule does not change the actual due date of the return. However, the application of IRC 7503 may relieve the taxpayer of the liability for late filing and payment penalties.

  3. The term "legal holiday" means a legal holiday in the District of Columbia and, in the case of an act required to be performed in any office of the Internal Revenue Service located outside the District of Columbia, a statewide holiday in the state where such office is located. Holidays that fall on a Saturday are observed the previous Friday and those that fall on a Sunday are observed the following Monday.

  4. Statewide legal holidays and legal holidays in the District of Columbia are:

    • January 1 - New Year's Day

    • Third Monday in January - Martin Luther King Jr. Day

    • January 20 - Inauguration Day (every fourth year following a Presidential election) in the District of Columbia and certain counties in Maryland and Virginia

    • Third Monday in February - Washington's Birthday (also known as President's Day)

    • April 16 - Emancipation Day in the District of Columbia

    • Last Monday in May - Memorial Day

    • July 4 - Independence Day

    • First Monday in September - Labor Day

    • Second Monday in October - Columbus Day

    • November 11 - Veterans Day

    • Fourth Thursday in November - Thanksgiving Day

    • December 25 - Christmas Day

    • Certain statewide legal holidays (e.g., Patriot's Day - third Monday in April for those filing at the Andover Campus).



    See IRM 25.6.1.6.18, List of Legal Holidays.

  5. If a federal holiday is declared by the President or Congress due to the death of a former president, a return filed by the next business day will be considered timely. The following are considered federal holidays:

    • April 27, 1994 - Former President Richard M. Nixon.

    • June 11, 2004 - Former President Ronald W. Reagan.

    • January 2, 2007 - Former President Gerald R. Ford.

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Exhibit 20.2.1-1 
IRM 20.2 Reference List by Section

Interest IRM Reference List

IRM TITLE
20.2.1 General and Legal Authorizations
20.2.3 Command Code PINEX
20.2.4 Overpayment Interest
20.2.5 Interest on Underpayments
20.2.6 Methods of Computing Interest, Including Suspensions
20.2.7 Abatement and Suspension of Interest
20.2.8 Restricted Interest
20.2.9 Interest on Carryback of Net Operating Loss
20.2.10 Interest on Estate Tax, Foreign Tax, and Excise Tax
20.2.11 Miscellaneous Interest Provisions
20.2.12 Employment Taxes
20.2.14 Netting of Overpayment and Underpayment Interest

Exhibit 20.2.1-2 
Definition of Terms

DEFINITION OF TERMS

TERM DEFINITION
ABATED INTEREST The portion of the interest liability on a given module or account which has been reversed.
ACCRUED INTEREST The unassessed portion of the total interest liability on a specified module or account at any given date. It is the difference between interest assessed and total interest due.
ADDITIONS TO THE TAX Amounts imposed and added to the tax as a result of a taxpayer's failure to comply with specific laws and/or regulations. These additions are commonly referred to as penalties.
ADVANCE PAYMENT A payment made prior to assessment of a determined, pending, or proposed liability.
ALLOWABLE INTEREST Interest (provided by law) which is allowed on an overpayment. Also known as overpayment or credit interest.
ANNUAL INTEREST NETTING Method of computing interest which equalizes the rate difference between credit and debit interest within a single tax module during periods of mutual indebtedness.
ASSESSMENT STATUTE EXPIRATION DATE (ASED) The date established by law by which the Service must assess any tax due for a given tax period.
ASSESSED INTEREST The portion of the interest liability on a given module or account which has been recorded to a given assessment date (23C Date).
ASSESSMENT DATE (23C DATE) The date that a taxpayer's liability for tax, penalty, and applicable interest is recorded. It is also the date that the notice and demand for payment of that amount is issued to the taxpayer.
AVAILABILITY DATE OF CREDIT The date an amount becomes available to credit against an outstanding IiabiIity or refund to the taxpayer.
CARRYBACK The application of a net operating loss, net capital loss, and certain unused non-refundable tax credits to taxable years preceding the year in which the excess amount is generated. (See Exhibit 20.2.1-2, Losing Module and Gaining Module).
CARRYBACK YEAR The year to which a net operating loss, net capital loss, or certain other unused non-refundable tax credits is carried.
CARRYFORWARD A carryover of unused net operating loss, net capital loss, or other unused non-refundable tax credits to years following the tax year in which the excess amount is generated.
CASH BOND Payment to stop interest on tax only, but taxpayer does not agree with a deficiency notice (taxpayer retains appeal rights). After 10/22/2004, the cash bond terminology is obsolete and IRC 6603 deposits are used to stop the running of debit interest on disputed tax liabilities.
CLAIM A request by a taxpayer to reduce a liability owed through crediting of an overpayment for refund of an amount previously paid or an interest netting request . A claim may be formal or informal. See IRM 25.6.1.10.2.6, Claims for Credit or Refund - Form and Content.
COMPOUND INTEREST Interest computed on interest already assessed or accrued. Compound interest applies to interest accruing after December 31, 1982.
CREDIT INTEREST Interest on an overpayment allowed under IRC 6611. Also known as overpayment or allowable interest.
CREDIT INTEREST RULES The rules that define how credit interest is computed on overpayments.
COLLECTION STATUTE EXPIRATION DATE (CSED) The date established by law by which the Service must collect any amount due from a taxpayer for a given tax period. Interest can be assessed to the CSED date.
CYCLE One week's processing at a Campus, Martinsburg, or Tennessee Computing Center. There are 52 cycles in a year. With CADE, Customer Account Data Engine, implementation processing will become daily.
DEBIT INTEREST Interest charged when the taxpayer owes a liability to the government. Also known as deficiency or underpayment interest.
DEBIT INTEREST RULES The rules that define how debit interest is computed on underpayments under IRC 6601.
DEFICIENCY The amount by which the tax imposed by Subtitle A or B, or Chapter 41, 42, 43, or 44 exceeds the excess of the sum of the amount shown as the tax on a return filed by a taxpayer, plus any amounts previously assessed (or collected without assessment) as a deficiency over the amount of rebates made. (See Exhibit 20.2.1-2, Rebate). See IRC 6211.
DESIGNATED PAYMENT A payment designated by a taxpayer to be applied to a particular tax, penalty, or interest liability. These payments are identified by TC 640, 680, or 690.
DESIGNATED PAYMENT CODES (DPC) A two digit code which identifies a payment designated by a taxpayer for a type of tax. See Document 6209, IRS Processing Codes and Information, for a listing of specific designated payment codes.
DIFFERENTIAL INTEREST RATES The rate difference between debit and credit interest rates. Differential interest rates began on January 1, 1987 and ended only for non-corporate taxpayers on December 31, 1998.
DUE DATE The date a liability is due.
EFFECTIVE DATE Generally, the date a transaction (either debit or credit) posts to a taxpayer's module. The effective date for beginning a computation of debit or credit interest may be different than the posted transaction date.
ERRONEOUS REFUND A refund to which a taxpayer is not entitled under IRC 6532(b), IRC 6602, and IRC 7405.
EXTENDED RETURN DUE DATE The date for which an extension of time to file a return has been granted. The extended return due date affects the date interest begins on certain penalties.

Note:

May also refer to a return due date extended by certain provisions such as for combat zone participants or taxpayers affected by a disaster declaration.

FREEZE An instruction applied to a Master File tax account or module that restricts normal computer actions.
GAINING MODULE The module to which a credit is applied. (See Exhibit 20.2.1-2, Losing Module).
GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT) Interest rate legislation effective after December 31, 1994 for large corporate overpayments exceeding $10,000. The GATT rate is one and a half points below the corporate credit interest rate. See IRM 20.2.4.9.3, GATT Rate.
INSTALLMENT PRIVILEGE The right, as provided in the Internal Revenue Code (IRC), to pay a liability in installments.
INTEREST Generally, the amount computed on an underpayment or overpayment of tax for the time a taxpayer has use of the government's money or for the time the government has use of a taxpayer's money. It is known as underpayment (debit) interest when a taxpayer owes the government and overpayment (credit) interest when the government owes a taxpayer. IRC 6601 and IRC 6611 provide the rules for computing interest on underpayments and overpayments.
INTEREST ABATEMENT The reduction of all or part of previously assessed interest.
INTEREST DUE Total interest due on a module, which includes all assessed and accrued interest less interest paid.
INTEREST-FREE PERIOD ON OVERPAYMENTS Period of time during which credit interest is not allowed (payable). See IRM 20.2.4, Overpayment Interest.
INTEREST-FREE PERIOD ON UNDERPAYMENTS Period of time during which debit interest is not computed (charged); also known as an interest suspension period. See IRM 20.2.6, Computations of Suspensions for Underpayment Interest.
IRC SECTION 6603 DEPOSIT Similar to a cash bond in that it is used to stop the running of interest on an underpayment. However, a taxpayer must specify the "disputable tax" and pay the tax amount shown on a 30-Day Letter. If returned to the taxpayer credit interest is allowed at a reduced rate (federal short-term rate).
IRS COMPUTED FORM A partially completed form submitted by the taxpayer, asking the IRS to figure the tax.
LARGE CORPORATE UNDERPAYMENT (LCU) A 2% increase in the debit interest rate applicable to corporate taxpayers defined as "C" corporations per IRC 6621(c). See IRM 20.2.5.8, Large Corporate Underpayment (LCU).
LIABILITY The amount owed on a tax module or tax account.
LOSS YEAR As it pertains to carrybacks, is the taxable year in which the loss arises per IRC 6611(f)(4)(B)(ii). (See Exhibit 20.2.1-2, Carryback).
LOSING MODULE The module from which a credit originates before being moved to a liability module. (See Exhibit 20.2.1-2, Gaining Module).
MANAGERIAL ACT An administrative act that occurs during the processing of a taxpayer's audit examination involving the temporary or permanent loss of records or the exercise of judgment or discretion relating to management of personnel. A decision concerning the proper application of federal tax law (or other federal or state law) is not a managerial act. Further, interest attributable to a general administrative decision, such as the IRS's decision on how to organize the processing of tax returns or its delay in implementing an improved computer system, cannot be abated. See Treasury Regulation 301.6404-2(b)(1).
MINISTERIAL ACT A procedural or mechanical act that does not involve the exercise of judgement or discretion, that occurs during the processing of a taxpayer's audit examination after all prerequisites to the act, such as conferences and review by supervisors have taken place. A decision concerning the proper application of federal tax law (or other federal or state law) is not a ministerial act. See Treasury Regulation 301.6404-2(b)(2).
MODULE All information contained on the Master File for a specific type of tax for one tax period for one taxpayer. A module is a portion of a Master File tax account.
NET RATE INTEREST NETTING The interest computation method to equalize/eliminate the interest rate differential between equal amounts of overpayments and underpayments during overlapping interest computation periods.
NON-MASTER FILE A manual accounting system which processes documents, returns, or adjustments that cannot be posted to the Individual or Business Master File.
NORMAL INTEREST Debit or credit interest that is not restricted.
NOTICE DATE The date a notice (bill) for payment is issued to a taxpayer.
OFFER-IN-COMPROMISE (OIC) An offer is an agreement between a taxpayer and the government to settle a tax liability for payment of less than the full amount.
OFFSET The transfer of an available credit from one type of tax or tax period to an outstanding liability of another/same type of tax or another tax period.
OUTSTANDING BALANCE The unpaid amount of overpayment or underpayment existing in a module. On IDRS or Master File transcripts, a hyphen (-) following the figure indicates a credit balance while a figure standing alone will indicate a debit balance.
OUTSTANDING LIABILITY Total amount of unpaid tax, penalties, and interest due.
OVERPAYMENT Any payment in excess of the total liability including tax, penalties, and interest for a specific type of tax and taxable period.
PAYMENT DATE The received date of a payment.
REBATE The amount of an abatement, credit, refund or other payment made on the grounds that the tax imposed by subtitle A or B, or Chapter 41, 42, 43, or 44 was less than the excess of the amount shown as the tax on a return filed by a taxpayer plus amounts previously assessed (or collected without assessment) as a deficiency over the rebates previously made. (See Exhibit 20.2.1-2, Deficiency).
RECOMPUTATION The computation of interest after all transactions with monetary amounts are sorted in effective date sequence.
REFUND An overpayment, plus any credit interest, which is issued to the taxpayer.
RESTRICTED INTEREST Interest computed from other than the normal start and stop dates. Interest may be restricted because it is prohibited or limited to specific time periods by law or when conditions exist in which the computer cannot systemically calculate the interest.
RETURN DUE DATE (RDD) The required date by law that a return must be filed (with regard to extensions).
RETURN RECEIVED DATE The date the return is received by the Service. If the return is received before the due date (excluding extensions), it will be the same as the return due date.
REFUND STATUTE EXPIRATION DATE (RSED) The date established by law that a taxpayer must file a claim for a credit or refund for a given tax period.
RUNNING MODULE BALANCE The balance of tax, penalty and interest, occurring as monetary amounts are sorted in effective date sequence.
SCHEDULE DATE The date on which an overpayment is certified for refund.
SIMPLE INTEREST Interest computed on a principal amount only. The Service computed simple interest prior to January 1, 1983.
SUBSEQUENT PAYMENT A payment (TC 670) made after a return is filed or in response to a subsequent liability.
SUBSTITUTE FOR RETURN (SFR) A return prepared by the Service under the authority of IRC 6020(b). The assessment can be based on information gathered from third party sources when the taxpayer fails to file his own return.
TAXPAYER DELINQUENT ACCOUNT (TDA) A computer generated print out stating that a taxpayer's balance due account or module has reached delinquent status. They are received systemically via the Integrated Collection System (ICS) in a revenue officer's inventory.
WAIVER A document (usually a Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment) signed by a taxpayer certifying proposed overassessments as correct or consents to the assessment and collection of a proposed deficiency.
WAIVER DATE The date a waiver is effective. This is usually the IRS received date. In TEFRA or Appeals, it is the date the form is counter-signed by an IRS official. The waiver date is also referred to as the "870 Date" or "Agreement Date."

Exhibit 20.2.1-3 
Return Due Date Chart

FORM MFT TYPE OF RETURN PERIOD DUE DATE OF RETURN
11-C 63 Occupational Tax and Registration Return for Wagering July 1st through June 30th Date business commences or before the wagers are accepted and yearly thereafter on July 1st.
706 52 United States Estate (and Generation- Skipping Transfer) Tax Return   Nine months after the exact date of death.
706–A 52 United States Additional Estate Tax Return   Six months after the taxable disposition or cessation of qualified use.
709 51 United States Gift (and Generation-Skipping Transfer) Tax Return Calendar Year The later of the due date of the donor's estate tax return or the 15th day of the 4th month after the end of the tax year (April 15th).
720 03 Quarterly Federal Excise Tax Return Quarterly Last day of the month following the end of the quarter (April 30th, July 31st, October 31st, or January 31st).
730 64 Monthly Tax Return for Wagers Monthly Last day of the month following the month in which the earned income becomes taxable.
940 10 Employer's Annual Federal Unemployment (FUTA) Tax Return Calendar Year Last day of the month following the end of the calendar year (January 31st).
941 01 Employer's Quarterly Federal Tax Return Quarterly Last day of the month following the end of the quarter (April 30th, July 31st, October 31st or January 31st).
943 11 Employer's Annual Federal Tax Return for Agricultural Employees Calendar Year Last day of the month following the end of the calendar year (January 31st). If made timely full paid deposits, then have 10 extra days.
944 14 Employer's Annual Federal Tax Return (if instructed by IRS) Calendar Year Last day of the month following the end of the calendar year (January 31st). If made timely full paid deposits, then have 10 extra days.
945 16 Annual Return of Withheld Federal Income Tax Calendar Year Last day of the month following the end of the calendar year (January 31st). If made timely full paid deposits, then have 10 extra days.
990 67 Return of Organization Exempt from Income Tax Calendar Year or Fiscal Year 15th day of the 5th month after the end of the accounting period (calendar year - May 15th).
990-PF 44 Return of Private Foundation or Section 4947(a)(1) Non-exempt Charitable Trust Treated as a Private Foundation Calendar Year or Fiscal Year 15th day of the 5th month after the end of the accounting period or no longer an organization (calendar year - May 15th).
990-T 34 Exempt Organization - Pension Plans per section 401(a), IRAs and Scholarships Calendar Year or Fiscal Year 15th day of the 4th month after the end of the accounting period or no longer an organization (calendar year - April 15th).
990-T 34 Exempt Organization Business Income Tax - All other Businesses Calendar Year or Fiscal Year 15th day of the 5th month after the end of the tax year (calendar year - May 15th).
1040 30 U.S. Individual Income Tax Return Calendar Year or Fiscal Year April 15th (unless in a Combat Zone or Disaster Area during filing season).
1040-C 30 U.S. Departing Alien Income Tax Prior to Departure Prior to Departure.
1040NR 30 U.S. Nonresident Alien Income Tax Return Calendar Year or Fiscal Year 15th day of the 6th month after the end of the tax year, unless the taxpayer received wages subject to withholding, then it is the 4th month.
1041 05 U.S. Income Tax Return for Estates and Trusts Calendar Year or Fiscal Year 15th day of the 4th month after the end of the tax year (calendar year - April 15th), unless it is a foreign trust which does not have an office in the U.S., then it is the 6th month.
1041-A 36 U.S. Information Return Trust Accumulation of Charitable Amounts Calendar Year April 15th.
1042 12 Annual Withholding Tax Returns for U.S. Source Income of Foreign Persons Calendar Year March 15th.
1042-S 12 Foreign Person's U.S. Source Income Subject to Withholding Calendar Year March 15th.
1065 06 U.S. Return of Partnership Income Calendar Year or Fiscal Year 15th day of the 4th month after the end of the tax year (calendar year - April 15th). If books and records are outside of U.S., then there is an automatic 2 month extension.
1120 02 U.S. Corporation Income Tax Return Calendar Year or Fiscal Year 15th day of the 3rd month after the end of the tax year (calendar year - March 15th).
1120-C 02 U.S. Income Tax Return for Cooperative Associations (Replaces 990C) Calendar Year or Fiscal Year 15th day of the 9th month after the end of the tax year provided the requirements of IRC 6072(d) are met (calendar year - September 15th), otherwise the same as Form 1120.
2290 60 Heavy Vehicle Use Tax Return First Use, or when first determined that vehicle will exceed 5,000 miles (7,500 for agricultural vehicles). July 1st through June 30th. Last day of the month following the month of the first use (vehicle first used in February - return due March 31st). After first use return, all subsequent returns are due the last day of the month following the first month of the tax year (August 31st). Returns with due dates for periods beginning July 1st, August 1st, and September 1st, 2011 will be extended to November 30, 2011.
4720 50 Return of Certain Excise Taxes under Chapters 41 and 42 of the Internal Revenue Code Calendar Year or Fiscal Year 15th day of the 5th month after the end of the accounting period (calendar year - May 15th). Or by due date of organization's Form 990-PF, Form 990, Form 990-EZ, or Form 5227.
5227 37 Split-Interest Trust Information Calendar Year April 15th.
CT-1 09 Employer's Annual Railroad Retirement Tax Return Calendar Year Last day of the 2nd month after the end of the tax year (February 28th or 29th).

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