20.2.3  PINEX and Related Command Codes

Manual Transmittal

February 22, 2012

Purpose

(1) This transmits revised IRM 20.2.3, Interest, PINEX and Related Command Codes.

Material Changes

(1) This transmittal reissues existing information and reflects minor editorial changes throughout this section. Form references and IRM references were reviewed and updated as necessary.

(2) This IRM section title was changed from Command Code PINEX to PINEX and Related Command Codes because this section discusses more than just the one command code.

(3) IRM 20.2.3.1 provided a definition of PINEX. It is both a program and a command code.

(4) IRM 20.2.3.2 listed additional command codes that can be used to access penalty and interest computations.

(5) IRM 20.2.3.2.2 (3) revised the sentence regarding locating the list of messages for Command Code PICRD.

(6) IRM 20.2.3.2.3 added to explain Command Code (CC) INTST.

(7) IRM 20.2.3.2.4 added to explain CC PIEST.

(8) IRM 20.2.3.2.5 added to explain CC PIFTD.

(9) IRM 20.2.3.2.6 added to explain CC PIFTF.

(10) IRM 20.2.3.5 changed the format and order. Corrected Form 4442, Inquiry Referral, to state that it is available in both paper and electronic versions.

Effect on Other Documents

This material supersedes IRM 20.2.3, dated November 18, 2008.

Audience

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

Effective Date

(02-22-2012)

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

20.2.3.1  (02-22-2012)
PINEX Overview

  1. PINEX stands for "Penalty and Interest Notice and Explanation." PINEX uses the Integrated Data Retrieval System (IDRS) to compute penalties and interest. It is also a command code (CC) that explains the debit or credit interest computations to a taxpayer upon request. However, this command code can only be used if the module is not restricted from systemic computation of penalties or interest. A "-I Freeze" or Transaction Code (TC) 340/341 on a transcript (e.g., TXMOD, IMFOL, BMFOL, MFTRA) indicates interest is restricted from being systemically computed/updated. A failure to pay (FTP) penalty restriction is indicated with a TC 270/271, which generates a "G- Freeze" on a module. TC 160/161 indicates the failure to file (FTF) penalty is restricted, while TC 170/171 indicates that the estimated tax (ES) penalty is restricted. For cases on the Audit Information Management System (AIMS), adjustments made to tax must also be made to any penalties and/or interest that are restricted. See IRM 20.1, Penalty Handbook, for more specifics.

  2. See Document 6209, Section 8, Master File Codes, for further explanations.

20.2.3.1.1  (02-22-2012)
PINEX Computations

  1. PINEX computations are IDRS calculations of penalties and interest using both posted and pending transactions. The specific tax module requested must be on the IDRS Taxpayer Information File (TIF) database in order for PINEX to return a calculation and at least one unreversed penalty or interest transaction must be posted. PINEX is not available for Master File Tax (MFT) Codes 13, 40, 42, 46, 55, 68, and 74, or for tax periods 198212 and prior.

    Caution:

    Prior to mailing any notices, ensure only the last four digits of the taxpayer's social security number (SSN) is reflected in the document being mailed (Office of Management and Budget Memorandum M-07-16, Safeguarding Against and Responding to the Breach of Personally Identifiable Information).

    See IRM 2.4.43, Command Code PINEX, for instructions to:

    • Use CC PINEX to access screen displays.

    • Secure hardcopy notices.

20.2.3.2  (02-22-2012)
PINEX Command Codes

  1. There are additional command codes (CC) besides CC PINEX that can be used to access penalty and interest computations in IDRS. Some of these command codes are: FTPIN, INTST, PIEST, PIFTD, PIFTF, and PICRD. These command codes produce a screen display of computations to explain any unrestricted interest or penalty charges. Command codes FTPIN and INTST are used for debit interest, while CC PICRD is used for credit interest. See IRM 2.3.39, Command Code FTPIN, IRM 2.3.29.3, Command Code INTST, and IRM 2.3.40, Command Code PICRD, for specific instructions related to these command codes.

20.2.3.2.1  (02-22-2012)
Command Code FTPIN

  1. Command code FTPIN displays the computation of failure to pay (FTP) penalty and debit interest (interest charged to the taxpayer), when there are no restricted conditions in the module.

  2. When only one restricting condition is present, FTPIN may attempt to make a computation and thus generate an incorrect report. In cases where there are multiple restricted conditions, all non-compute conditions are reflected in the messages displayed on the screen. See IRM 2.3.39.2, Terminal Responses-CC FTPIN, for a list of these messages. See IRM 20.1.2 , Failure to File/Failure to Pay Penalties, for additional information on FTP computations.

  3. FTPIN computes the FTP penalty for all balance due accounts. FTPIN will match Master File only when the Master File Status is 10 or 12 and the Master File and IDRS module balance are both zero.

20.2.3.2.2  (02-22-2012)
Command Code PICRD

  1. Command code PICRD displays the calculation of credit interest (interest paid to the taxpayer) on refunds and offsets when there are no restricted conditions in the module to prevent its computation.

  2. Only tax periods after 198212 will be considered for PICRD refund interest computations. PICRD cannot compute credit interest on offsets posted before July 1986 (Cycle 198629).

  3. For a list of messages and responses which explain how credit interest is computed or why it is restricted, see IRM 2.3.40.3, Informational Messages Displayed After Computation Breakdown on the Screen, and IRM 2.3.40.2, Terminal Responses-CC PICRD.

20.2.3.2.3  (02-22-2012)
Command Code INTST

  1. Command code INTST is similar to FTPIN, except that it displays the debit interest computation first and then the FTP penalty computation.

  2. This command code can only be used when interest and/or FTP penalty is not restricted.

  3. It computes accruals for FTP and interest up to 60 days in the future.

  4. See IRM 2.3.29.3, Command Code INTST, for more information on this command code.

20.2.3.2.4  (02-22-2012)
Command Code PIEST

  1. Command code PIEST displays the computation of systemically generated estimated tax (ES) penalty. The computation uses the information on Master File, plus any pending transactions.

  2. See IRM 2.3.41, Command Code PIEST, for more information.

20.2.3.2.5  (02-22-2012)
Command Code PIFTD

  1. Command Code PIFTD displays the computation of failure to deposit (FTD) penalty for MFT 01 (Form 941, Employer's QUARTERLY Federal Tax Return), MFT 16 (Form 945, Annual Return of Withheld Federal Income Tax ), MFT 10 (Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return), and MFT 12 (Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons).

  2. See IRM 2.3.28, Command Code FTDPN, for more information.

20.2.3.2.6  (02-22-2012)
Command Code PIFTF

  1. Command Code PIFTF displays the computation of failure to file (FTF) penalty.

  2. See IRM 2.3.43, Command Code PIFTF, for more information.

20.2.3.3  (02-22-2012)
Hardcopy Notices

  1. Use CC PINEX to request a hardcopy notice of selected penalty and interest explanations and computations.

    1. The notice is returned to the requestor for review prior to mailing to the taxpayer.

    2. Notices are generated for the taxpayer and the taxpayer's authorized representatives as recorded on the centralized authorization file (CAF) and, for MFT 01 and 10, on the reporting agents file (RAF).

      Note:

      If a valid Power of Attorney (POA) is received with the taxpayer's correspondence and is not already recorded on the CAF, input two identical requests for a PINEX notice and use local procedures to mail the duplicate notice to the authorized representative. For additional information, see IRM 4.11.55, Examining Officers Guide (EOG), Power of Attorney Rights and Responsibilities, or IRM 3.11.3.7.1.3.3, Power of Attorney (POA).

    3. When the tax module is on IDRS, the notice should be generated the next day following input of CC PINEX.

    4. Notify the IDRS control staff if the notice is not received by Wednesday of the week following the date of input.

  2. When the tax module requested is not on IDRS, PINEX creates a dummy module generating a TC 902 (Campus IDRS Indicator) to Master File so that the module, if posted, can be extracted to the TIF for completion of the PINEX request.

    Note:

    Consider use of CC MFREQ to immediately create an IDRS module. See IRM 2.3.10, Command Code MFREQ and RECON.

  3. If the module is not extracted to the TIF within four weeks, PINEX will purge the request and issue an action sheet to the requester.

  4. The PINEX notice includes:

    1. PINEX Requestor Action Sheet (if required)

    2. The letter page

    3. A literal transcript of transactions on the module

    4. Penalty and interest explanations

  5. PINEX notices must be manually date stamped. Review the notice and, if appropriate, date and mail by the first Friday following the weekend the notice was generated. Follow local procedures to manually mail the notice.

  6. See IRM 2.4.43, Command Code PINEX, for instructions on input of CC PINEX.

  7. When a PINEX request is completed, the notice history section of the tax module is systemically updated. On balance due modules, the next IDRS notice is automatically delayed one week for BMF and five weeks for IMF after the PINEX notice is generated.

    IF... THEN...
    a longer delay is needed, input CC STAUP for the appropriate number of cycles.

    Note:

    CC STAUP for a longer period has priority over the automatic PINEX delay of the next IDRS notice.

    CC STAUP for a longer period was previously input to the module and is no longer needed, be sure to release the STAUP.

20.2.3.4  (02-22-2012)
Requestor Action Sheet

  1. A Requestor Action Sheet is generated whenever a PINEX request is input.

    IF... THEN...
    the PINEX notice is generated, the Requestor Action Sheet transmits the PINEX notice to the requester.
    the PINEX notice is not generated, the Requestor Action Sheet explains why it did not generate.

  2. The action sheet displays freeze codes, manually restricted penalty and interest transactions and amounts, and the module balance.

    1. The system uses the PINEX computations to determine the module balance. The balance is not taken from the amount shown as the module balance on TXMOD.

    2. Messages further explaining the reason for the action sheet may also be printed.

  3. An action sheet alone is returned to the requestor when:

    • The PINEX request is four weeks after a TC 902 is generated,

    • A return has not posted to the module, and/or

    • There is bad data on the TIF.

20.2.3.5  (02-22-2012)
Interest Computation Explanations

  1. The PINEX notice provides the taxpayer with dates and transactions of all systemically generated penalty and interest computations, including accruals.

  2. The requestor must analyze the module and the PINEX notice to determine if it can be mailed to the taxpayer or if further action is necessary.

    Caution:

    Verify the module balance against IMFOLT/BMFOLT before mailing the notice to the taxpayer.

  3. Take one of the following actions:

    • Mail the notice as is

    • Manually perfect, then mail the notice

    • Destroy the notice (do not mail), and prepare a manual computation instead

  4. Manually perfecting or preparing the notices may be required if:

    1. The PINEX amount is incorrect. (Do not mail the notice. Manually review any discrepancy with a manual computation in order to determine whether the PINEX computation is correct).

    2. The requested penalty or interest transaction is restricted from Master File computation. (The balance shown on the PINEX notice will then always differ from Master File. In this situation, the balance must be manually computed).

    Note:

    Beginning May 1, 2003, inquiries received by Accounts Management (AM) toll-free telephone staffers that require a manual computation of interest must prepare Form 4442, Inquiry Referral, (available in both electronic and paper versions) and route the form to the Campus AM Account Paper function within the phone staff Directorate.

  5. Manually recompute the balance, prepare the explanation for any applicable penalty and interest, and insert the figures onto the notice. (Several blank lines appear on the notice following the general explanation. Use these lines to insert the manual computation).

    Note:

    A print from CC COMPAD or the automated computational tool (ACT/DMI) InterestNet 490 report, may be sent to the taxpayer in lieu of a PINEX notice. If these are unavailable, any of the interest command codes showing a correct computation may be given to the taxpayer.

  6. See IRM 20.2.8.3, Manual Computations, for instructions regarding manual interest computations and adjustments to interest transactions.

  7. Request the return or other adjustment document, if necessary, in order to correctly compute and explain restricted interest and penalties.

  8. Interest discrepancies between the PINEX computation and the module balance posted on Master File may be attributable to:

    1. Interest continuing to accrue until the balance due is fully paid, or

    2. Pending transactions used in the PINEX computations which are not used by Master File or IDRS. (A discrepancy attributable to a pending transaction will not require an adjustment to the module).

  9. When the PINEX result differs from the Master File result by one dollar or more:

    1. Manually compute to determine if the Master File posting is valid. If the computation is valid, mail it to the taxpayer.

    2. If the computation is not valid, prepare a manual computation to send to the taxpayer.

  10. If the Requestor Action Sheet contains bankruptcy, abusive tax shelter or intelligence freeze codes, contact Collection, Examination, or Criminal Investigation, as appropriate, to determine if the case should be referred to them before the notice is mailed.

  11. A credit balance on either IDRS or Master File may signify:

    1. A discrepancy between the PINEX and Master File computations, or

    2. Other conditions requiring adjustment action.

  12. If the credit balance is an accurate reflection of the taxpayer's module status, mail the notice without further action.

  13. If the notice is mailed, remove the action sheet and manually date the notice.

    Reminder:

    Report procedural or systems problems, identified through PINEX, to the IDRS Control Staff, to management or Office of Servicewide Interest.


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