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Part 21. Customer Account Services

Chapter 5. Account Resolution

Section 2. Adjustment Guidelines

21.5.2  Adjustment Guidelines

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21.5.2.1  (10-01-2003)
Account Management — Adjustment Guidelines Overview

  1. This Internal Revenue Manual (IRM) contains the guidelines to follow when processing adjustments to any tax account or MFT. These guidelines will often advise you if an action may or may not be taken. If you need to make an adjustment on an account, you will find links to the different IRM subsections and often to the individual subsection that will help you complete your action.

21.5.2.2  (10-01-2003)
What Are Adjustment Guidelines?

  1. Adjustment guidelines are a set of Internal Revenue Service (IRS) rules to follow when working with adjustments. Specific topics are explained in more detail in chapters dealing with those topics.

21.5.2.3  (10-01-2007)
Adjustment Guidelines — Research

  1. When processing general requests, all Customer Service Representatives (CSRs) and Tax Examiners (TEs) must:

    1. Obtain all documents, returns, and taxpayer supplied information necessary to make adjustments.

      Exception:

      If you are staffing the toll-free lines and a document is needed, do not order any document that will not be received by close of business on the day of the taxpayer telephone contact. Complete Form 4442, Inquiry Referral, or e-4442, and route to the Campus AM paper function within your Directorate. Some local procedures allow for campus employees to order the document and keep the case in their individual inventory.

      Reminder:

      Employees should NOT pull the taxpayers returns unless all other research fails to resolve the issue or as instructed by a subject specific IRM.

    2. Research IRS Publications, IRS Codes and other IRMs as appropriate.

    3. Obtain technical assistance, if the issue is beyond training level.

  2. Taxpayer Inquiries are completed by the site receiving the call or correspondence. DO NOT refer cases to another campus or call site unless an IRM specifically instructs you to do so.

    Exception:

    Your campus may have a local agreement to send paper cases to another site or group. Those cases must be worked following the rules in the local agreement and not shipped to the campus that processed the original return.


  3. Returns are kept at campuses for only a short time, dependent upon the storage space in Files at that campus. Returns are subsequently sent to the Federal Records Center (FRC). The Service also transships returns from one campus to another to perform the original processing.

  4. If there is a TC 604 on the module, check with the proper Collection insolvency group to obtain approval to adjust the account. Ask Collection to reverse the TC 521 and TC 971-AC 031. This action needs to be taken to allow your adjustment to post. If this is an International account, contact the proper Collection insolvency group at the Philadelphia Campus, who processes and adjust these type of accounts. See Document 6209, IRS Processing Codes and Information, Section 8, Master File Codes, 1 Transaction Codes or check your IDRS message screen for updated telephone numbers.

  5. Research may show an OPEN control base. ALWAYS contact the employee with an open control base prior to taking any action on a case, except in the following instances:

    1. DO NOT initiate contact if there is a HISTORY item but NO OPEN control.

    2. DO NOT initiate contact if the control is in "B" monitoring status.

      Exception:

      If there is a TC 841 and a P freeze on the taxpayers’ account, complete Form 4442,Inquiry Referral, with the information you obtain from the taxpayer and refer the case to the Refund Inquiry employee or unit with the open control.

    3. DO NOT initiate contact if the only open control is a nullified unpostable with category code NLUN

    4. DO NOT initiate contact with the employee if the control is to a clerical unit. See IRM 2.9.1.14.3(2), Case Assignee Number, for information on clerical IDRS controls. See IRM 21.5.2.4.3 (5-7),Adjustments Requiring an Amended Return or Taxpayer Documentation, for further information in resolving the telephone inquiry.

    5. DO NOT initiate contact with an employee if a Form 4442, Inquiry Referral, is the proper action based on IRM 21.3.5-1, Referral IRM Research List.

    6. DO NOT give employee phone numbers to taxpayers.

  6. Disclosure guidelines apply to ALL adjustment actions taken. Do not discuss the account with unauthorized parties.

21.5.2.4  (10-01-2007)
Adjustment Guidelines — Procedures

  1. Use the guidelines in IRM 21.5.1, General Adjustments, when making account adjustments.

  2. For information on received dates when adjusting an account, refer to IRM 21.5.1.4.2.4, Received Date - Determination, and IRM 21.5.1.4.2.5, Received Date — Grace Periods.

  3. IRM 21.3.3.4.10, Taxpayer Inquiries and Complaints, contains information on the reasons taxpayers contact the IRS. It provides the IRMs, forms, letters, technical functions for referrals, and telephone numbers, which will enable you to contact a specific function for technical help.

21.5.2.4.1  (10-01-2007)
Statutory Exceptions & Administrative Waivers

  1. Various administrative waivers and statutory exceptions assist in processing adjustment requests timely and efficiently. For additional information, refer to IRM 20.1.1.3.2, Statutory Exceptions & Administrative Waivers.

  2. We receive requests for adjustments to tax, penalty, interest, and other issues, in two main forms:

    • Written

    • Oral

  3. Authorities and waivers are sometimes granted:

    1. For the good of the taxpayers

    2. For the good of the Service

    3. Or both

21.5.2.4.1.1  (10-01-2007)
Designation of Federal Tax Deposits

  1. Under IRC § 6656 (e) and Rev. Proc. 2001-58, taxpayers may designate the period or periods to which the Service should apply a deposit.

  2. The designation may be made orally or in writing. Oral statement ceiling amounts do not apply.

21.5.2.4.1.2  (10-01-2003)
Administrative Waivers

  1. Administrative Waivers and Reasonable Cause abatements are granted by the Service for the benefit of the Taxpayer, the Service, or both. Refer to IRM 20.1.1.3.2, Statutory Exceptions & Administrative Waivers, for additional information.

  2. Action can be taken if criteria given in the Waiver apply.

  3. Oral statement ceilings apply. Refer to IRM 20.1.1.3.5.3, Increase in Oral Statement Ceiling, for additional details.

21.5.2.4.1.3  (10-01-2007)
Service Errors (Effect on Penalty and Interest)

  1. Sometimes the Service makes errors in the assessment of tax, penalty, or interest.

  2. When correcting these errors, oral statement ceilings do not apply. For details, refer to IRM 20.1.1.3.5.3, Increase in Oral Statement Ceiling.

  3. For additional information regarding the effects of service errors on penalty and interest, refer to the following:

    • IRM 20.2.7, Abatement and Suspension of Interest: IRC 6404 and 7508

    • IRM 21.7.2.4.9.1, Administrative Errors

    • IRM 20.1.1.3.3, Service Error

21.5.2.4.1.4  (10-01-2003)
Reasonable Cause

  1. For Reasonable Cause Criteria see IRM 20.1.1.3.1, Reasonable Cause.

  2. For Tolerance amounts and instructions see IRM 21.5.1.4.12,Tolerances.

21.5.2.4.2  (12-13-2006)
Adjustments With Oral Statement

  1. The IRM 21.1.3.20, Oral Statement Authority, outlines the oral statement authorities for Accounts Management. This IRM contains the procedures Account Management must apply to any questions concerning oral statement.

    1. Payment/Credit Transfers -- There are no oral statement ceiling amounts/dollar limits. See IRM 21.5.8.1, Credit Transfers Overview.

    2. Credit Elect Problems -- See IRM 21.4.1.4.6, Credit Elect Problems.

    3. Reverse Credit Elect Payments Shown on the Return -- See IRM 21.4.1.4.6.1, Credit Elect Reversals.

    4. Invalid SSN refund releases -- See IRM 21.6.1.5.6, Resolving CP 54 Notices with Math Error Involvement Procedure.

    5. Withholding Adjustment (To ceiling amount) -- See IRM 21.6.3.4.2.2, Withholding (W/H) Tax Credit, or IRM 21.5.1.4.12, Tolerances.

    6. Math Error Substantiated Protests -- See IRM 21.5.4.4.4, Math Error Substantiated Protest Processing.

    7. Certain freeze releases -- See IRM 21.5.6.4, Freeze Code Procedures.

    8. True duplicate return (Except Form 1065, U.S. Return of Partnership Income) -- For IMF, see IRM 21.6.7.4.13, True Duplicate Return. For BMF, see IRM 21.7.9.4.9.1, True Duplicate.

    9. Math errors/IRS errors/Decimal point errors -- See IRM 21.5.4, General Math Error Procedures.

    10. Penalty Relief Request -- See IRM 21.5.2.4.9.2, Oral Statement and Penalty Relief Request.

    11. Name, TIN, address, filing status, and filing requirement changes -- See IRM 3.13.5, IMF Account Numbers, and IRM 3.13.2, BMF Account Numbers, and IRM 21.6.1.3, Filing Status Research.

    Note:

    The request for a transcript of the account DOES NOT constitute an adjustment or account issue.

  2. If an address change is necessary and the taxpayer requests the address change using oral statement, complete an oral address change only if a taxpayer’s account is open on IDRS. Refer to the table in IRM 3.13.5.11, Acceptable Address Changes from Oral Statements, which contains examples of IDRS "open issues" . Note that the table does not list every IDRS open issue.

21.5.2.4.2.1  (10-01-2004)
Case Files/Actions on-line with Oral Statement

  1. Adjustment actions completed on-line with an oral statement do not require case files unless required in specific IRM procedures. Do not prepare unnecessary case files.

  2. Create case files for actions not completed on-line. Using Form 4442, Inquiry Referral, describe inquiry and actions taken to resolve the account. Destroy the Form 4442 after review.

21.5.2.4.3  (12-13-2006)
Adjustments Requiring An Amended Return or Taxpayer Documentation

  1. Adjusting an item not shown on the original return requires a signed amended return, such as a Form 1040X, Amended U.S. Individual Income Tax Return. Inform the taxpayer and order the tax forms if needed. See IRM 21.3.6, Forms and Information Requests.

  2. An amended return is not necessary:

    If .. Then ..
    The taxpayer listed the item on Form 1040, U.S. Individual Income Tax Return, but did not include the necessary schedule 1. A math error notice will be issued.
    2. The item may not appear on RTVUE.
    The taxpayer provides substantiation in the case of a math error 1. Accept oral statement (up to the amount shown on the original return) even if the "–G" Freeze is no longer on the account.
    2. See IRM 21.5.4, General Math Error Procedures.

  3. The following actions require a written request:

    1. Penalty abatements (above ceiling amounts) for reasonable cause.

    2. Abatements of interest.

  4. Use the taxpayer’s written request as a source document. Refer to the following IRMs for additional information:

    • IRM 4.19.3, IMF Automated Underreporter

    • IRM 4.19.3.20.1.2, Abatement of Interest

    • IRM 20.1, Penalty Handbook

    • IRM 20.2.7, Abatement and Suspension of Interest: IRC 6404 and IRC 7508

    • IRM 4.19.10, Examination General Overview

  5. If during the telephone inquiry, you realize the taxpayer's request requires written documentation, (e.g. penalty abatement based on reasonable cause over the oral statement allowable amount) request the taxpayer to FAX the information to you. Complete a Form 4442, Inquiry Referral. See IRM 21.3.5, Taxpayer Inquiry Referrals Form 4442.

  6. When requesting FAXED substantiation from a taxpayer, follow the procedures below:

    1. Complete Form 4442.

    2. Open a control base using the appropriate category code.

    3. Provide the taxpayer with a specific FAX number.

    4. Inform the taxpayer that if FAXED substantiation is not received in five business days, the case will be closed.

  7. If the taxpayer can not obtain access to a FAX machine:

    1. Request the taxpayer mail the information to the appropriate campus or call site

    2. Advise the taxpayer of the normal processing time frame for mailed correspondence (30 days)

    3. Do not open a control base

    4. Do not complete a Form 4442

21.5.2.4.4  (10-01-2004)
Document Locator Number (DLN)

  1. The DLN for IMF and BMF account is distinct and contains information useful for processing cases.

  2. The DLN is the 14–digit number assigned to every return or document processed through the Automated Data Processing (ADP) system. DLNs are printed on computer documents in XXXXX—XXX—XXXXX—X format. See Document 6209, IRS Processing Codes and Information, Section 4 for detailed information.

21.5.2.4.5  (12-13-2006)
Source Documents

  1. Source documents are required for some adjustments completed with oral statement:

    1. Credit transfers, where the payment was applied to the wrong TIN (non-related accounts) OR credit transfers on related accounts when the transfer creates a debit balance. See IRM 21.5.8.3.1, Determining Source Document Requirement for Credit Transfers.

    2. If an erroneous refund was issued, follow erroneous refund procedures. See IRM 21.4.5, Erroneous Refunds.

    3. Missing schedules

  2. Verify disclosure requirements before giving account information. See IRM 21.1.3.2.3, Required Taxpayer Authentication, as applicable. See IRM 21.1.3.2.4, Additional Taxpayer Authentication, and see IRM 21.3.7, Processing Third Party Authorizations onto the Centralized Authorization File (CAF).

  3. Request taxpayers send documentation required for adjustments listed in (1) above. The taxpayers may fax information. Provide taxpayers your fax number, including area code. See IRM 21.5.2.4.3 (5–7), Adjustments Requiring an Amended Return or Taxpayer Documentation, for further information. See IRM 21.3.5, Taxpayer Inquiry Referrals Form 4442, for additional instructions.

21.5.2.4.6  (10-01-2007)
Remarks Field

  1. Specific elements in the "Remarks" field are required for each type of IDRS input, (entity, tax, penalty change, or credit transfer). Oral statement authority adjustments have different requirements. See IRM 21.1.3.20.1, Oral Statement Documentation Requirements, when inputting the remarks for an oral statement account change.

  2. If the input is not completed with an oral statement, input the adjustment with "SD" , "NSD" , or "SDR" in the remarks field (or Y, N, or R on the Command Code (CC) ADJ54 screen).

    • SD indicates the document is being forwarded to files for attachment to the IDRS transaction record

    • NSD indicates the document will not be attached to the IDRS transaction record, such as with an image in the Correspondence Imaging System (CIS)

    • SDR indicates the document is being held for follow up case actions, but will later be attached to the IDRS transaction record

    Use the remaining positions in the remarks field to briefly explain the reason for the adjustment or credit transfer.

  3. When completing both an adjustment and a credit transfer, input the required items on the adjustment and reference them in the "remarks" section of the credit transfer.

    Note:

    Input the taxpayer’s telephone number, if available, using command code TELEA for balance due accounts over deferral and delinquent return accounts. Deferral amounts are provided in LEM 5.19.1.3.3.2, Apply Deferral Level(s). Also, see IRM 5.19.1.3.1, Taxpayer Information for additional information on securing telephone numbers.

  4. If the document posts to the wrong Tax Period or Social Security Number (SSN) you must reprocess the TC 976;

    1. Input a TC 290 for .00 to release an "A" Freeze

    2. Use "NSD" in the remarks area

    3. Dispose of the CP 36 as classified waste.

21.5.2.4.7  (10-01-2003)
Remarks on Type of Adjustment

  1. Briefly explain the reason the adjustment was made, such as "credit transfer" . Also, indicate per letter or other justification:

    If And Then
    You are taking multiple actions (i.e., TC 29X, 670/672, 971, etc.) Actions are for the:
    1. Same taxpayer
    2. Same tax period,
    3. Same TIN,
    4. TC 29X is one of the TCs used     		1. Record the necessary elements in Command Code "ADJ54" Remarks Section.
    2. Indicate in the remark’s section for the related transactions, "NSD" and where the backup is for your actions.

    Exception:

    Disregard the instructions in the table above when making entity adjustments. Always record the necessary elements on all entity changes regardless of the source or the number of actions being taken.

  2. If there is a conflict between oral statement adjustments procedures in this IRM or in the specific IRMs, work the case according to specific IRMs.

21.5.2.4.8  (10-01-2003)
Notice Suppression

  1. Notices are suppressed in various ways depending on the type of notice and the issue. Notices are suppressed with:

    • Command Code (CC) STAUP

    • Hold Codes

    • Notice Suppression Codes or Indicators.

  2. The input screens for some IDRS CCs have a field which is overlaid to indicate if a notice should or should not be issued. Instructions on notice suppression are given as needed throughout the IRM 21.

  3. When CC STAUP cannot be used because action will result in a settled module, and offset is likely (January–May for IMF, about 8 weeks after due dates for BMF), input a TC 470 without closing code.

  4. When a CC STAUP or a TC 470 is used to suppress a balance due notice, input a history item to advise of the reason for the action. (e.g., H#, 2file1040X or H#,TPSENDCK)

21.5.2.4.8.1  (10-01-2003)
Notice Suppression Code

  1. A CP Notice Suppression Indicator is input in the CP-Notice— SUPP—IND field on the Command Code ADJ54 screen to suppress a notice.

  2. For BMF Command Code (CC) ADJ54, the input of Notice Suppression Code one (1) prevents small balances from being printed on notices. The adjustment information is suppressed, not the notice. See IRM 21.7.1.4.2, Notice Suppression Indicator (NSI).

  3. Notice Suppression Codes/Indicators are displayed on CC ENMOD.

21.5.2.4.8.2  (10-01-2007)
Suppressing Balance Due Notices

  1. Suppress balance due IDRS Notices with Command Code (CC) STAUP. This includes cases referred to other functions or sites.

    1. If there is a balance due on the account, and the next Collection status for IMF is 20, 56, 58, or 22, or if BMF Status 58, 21 or 22, input CC STAUP in the next status to prevent further notices.

      Note:

      Command Code STAUP will only prevent an erroneous IDRS notice if it is input by the Friday before the erroneous notice is scheduled to generate (10 days prior to the 23C date).

    2. Use the following chart to determine the number of delay cycles to input:

      If Then
      Requesting documents from files Allow 15 cycles.
      Requesting information from the taxpayer 1. Allow 4 cycles when requesting information by telephone.
      2. Allow 6 cycles when requesting information by correspondence.
      An adjustment or other action will not fully satisfy the balance due, and taxpayer is sending payment Allow 6 cycles.
      The action taken will not fully satisfy the balance due or no STAUP is on the account
      		 Input a STAUP for 3 cycles.

      Note:

      This is in cases where the taxpayer has not promised a payment.
      The action taken creates a zero or credit balance Input STAUP for number of cycles needed for the action to post.

      Note:

      If STAUP is already on the account, no action is needed to release it.
      Correction of unpostable situation will satisfy balance due Allow 9 cycles.
      The taxpayer is submitting any other information to satisfy balance due Allow the number of cycles needed for information to post.
      The taxpayer will full pay the balance due now Allow 5 cycles. Refer to IRM 5.19.1.5.2, Can Full Pay Balance Due Now (Payoff).
      The taxpayer is filing an IMF/BMF Original or Amended Return that will full pay tax, penalty, and interest on the balance due account. Refer to IRM 5.19.1.5.3, Can Pay Balance Due Later (Extension to Pay).
      The taxpayer is filing an IMF/BMF Amended Return that does not full pay the balance due Refer to IRM 5.19.1.5, Methods of Payment.
      Routing cases to other areas Input or reduce the STAUP to 6 cycles.

    3. When the STAUP is input for more than 9 cycles, a control base is needed or the STAUP will be released after 9 cycles.

    4. Advise the taxpayer another notice may come (STAUP may be input too late to stop the next notice). Also advise:

      If Then
      The action taken satisfies the balance due Advise taxpayer this notice may be ignored.
      Taxpayer submits the payment/information as you requested. Advise taxpayer this notice may be ignored.

    5. If the time frame remaining before the next scheduled notice will allow time to complete the action, a STAUP is unnecessary.

      Note:

      A STAUP need only to be input if you want to delay the next notice from generating. If it will take more than two weeks for the account to settle and it is in NOTICE status, YOU need to input a STAUP if another NOTICE is due to generate.

21.5.2.4.8.3  (05-10-2006)
Clearance Tolerances

  1. When a module is in status 12, accrual amounts under ≡ ≡ ≡ ≡ ≡ are not displayed on TXMOD due to Master File tolerances. Accruals under this tolerance are displayed on BMFOLI/IMFOLI. Accounts in status 12 which contain accrual amounts less than ≡ ≡ ≡ will not continue to accrue penalty and interest. Overpayments which may become available will not offset to the status 12 account.

  2. Status 12 accounts are considered full paid and should not be addressed in balance due pay-off requests or installment agreements. See IRM 5.19.1.5.4.4(5), Installment Agreement Requirements-IMF & Out-Of-Business Sole Proprietor No Trust Fund.

    Note:

    A taxpayer may be aware of the unpaid accruals on a module in status 12 and request a notice or amount of the balance. See the first If/Then in (4) below.

  3. When inputting the PC 5 on multiple modules, allow proper offsets in the subsequent cycle by taking the following actions:

    1. Input a TC 290 .00

    2. Use the appropriate Hold Code (HC) for credit/notice

    3. Use appropriate Blocking Series (BS). See Document 6209, IRS Processing Codes & Information, Section 4 for a listing of adjustment blocking series

    4. Use a Posting Delay Code (PDC) of one cycle on the credit module

  4. Below are status 12 procedures to follow:

    If And Then
    Taxpayer requests a balance due notice no other adjustment issue is involved 1. Check BMFOLI or IMFOLI for accruals; and
    2. Input a TC 290 .00 with PC 5 to force the computer to post unrestricted failure to pay penalty and interest; and
    3. Issue a balance due notice to the taxpayer.
    A payment posts to the account the posted module balance is under ≡ ≡ ≡ ≡ ≡ and the accruals are less than ≡ ≡ ≡ ≡ ≡ 1. A TC 606 will systemically generate to clear the account of the posted balance due.
    2. Input a TC 290 .00, PC 5, to force a reversal of the TC 606.
    3. Issue a correct balance due notice.
    You are telling the taxpayer his or her account is paid in full the account contains modules with accruals under ≡ ≡ ≡ Input a TC 290 .00, PC 5 and HC 3. The balance due will post and clear with a TC 606.
    NOTE: A notice will not be issued to the taxpayer.


  5. If the account is in Status 23, the balance due is under Taxpayer Delinquent Account (TDA) tolerance, the input of a TC 290 for zero with PC 5 will generate a balance due notice to the taxpayer and update accruals. See IRM 5.19.1.5.2(4), Can Full Pay Balance Due Now (Payoff), for additional information.

21.5.2.4.9  (10-01-2004)
Penalty Overview

  1. See IRM 20.1, Penalty Handbook, for more information. Always advise the taxpayer if there is a possibility of a penalty assessment. Explain why a penalty was asserted or assessed.

  2. To explain how a penalty was computed, use IDRS Command Code (CC) "INTST" or "PINEX" for FTP and Failure to File (FTF) and CC "FTDPN" , "Definer B" , for Failure to Deposit (FTD), "PIFTF" , "PIFTD" , and "PIEST" can be used to research penalty assessments.

  3. IRC § 6656, as amended by Act Section 3304 (a) of the IRS Restructuring and Reform Act of 1998 (RRA98) provides a new "FTD Penalty" abatement/deposit correction. FTD penalty provisions provide that a taxpayer may designate the application of federal tax deposits for a particular return period. See IRM 20.1.4.16.4, Statutory Penalty Relief (RRA98).

21.5.2.4.9.1  (10-01-2003)
Unique Action Code (AC)

  1. TC 971 with AC 262 generates when the maximum FTP penalty accrues.

  2. When the account drops from IDRS the AC 262 will be visible on "CFOL" .

  3. The code will show on both BMF and IMF.

  4. When figuring FTP manually, AC 262 can be input manually.

21.5.2.4.9.2  (10-01-2007)
Oral Statement and Penalty Relief Request

  1. The Service considers granting penalty relief for several reasons:

    • Administrative Waivers

    • Reasonable Cause

    • Designation of federal tax deposits


  2. Reasonable cause penalty relief can be granted with oral statement for the following penalties:

    • Failure to Pay (FTP)

    • Failure to File (FTF)

    • Failure to Deposit (FTD)

    • Daily Delinquency Penalty (DDP)


  3. Reasonable cause must be established before penalty relief can be considered with an oral statement, as referenced in IRM 21.1.3.20, Oral Statement Authority. For additional information on reasonable cause, refer to IRM 20.1.1.3.1, Reasonable Cause.

  4. The automated Reasonable Cause Assistant (RCA) program must be used if available at the work site. RCA will determine when the oral ceiling is exceeded. RCA analyzes the account including the return Processing Codes and Computer Condition Codes (CCC) to determine if reasonable cause is met. See IRM 20.1.1.3.5.3, Increase in Oral Statement Ceiling, and IRM 21.1.3.20, Oral Statement Authority, to determine if oral statement is acceptable or if a written request for penalty abatement is required.

  5. For Service errors or designation of Federal tax deposits, use oral statement for penalty relief even if the penalty or total penalties per module exceed the ceiling amount(s).

  6. If penalty relief criteria are met, but the amount is over the oral statement ceiling, ask the taxpayer to submit the penalty relief request in writing.

    Authority Contact is Then
    Under IRC § 6656 (e) and Rev. Proc. 2001-58, taxpayers may designate the period or periods to which the Service should apply a deposit. Written Deposits can be moved as indicated in the designation.
    Oral Deposits can be moved as indicated in the designation.

    Note:

    Oral statement ceiling does not apply.
    Administrative Waivers or Reasonable Cause abatements are granted by the Service for the benefit of the taxpayer, the Service, or both. Written Penalties can be abated if the criteria given in the waiver apply.
    Oral Penalties can be abated if the criteria given in the waiver apply.

    Note:

    Oral Statement ceiling applies to Reasonable Cause requests. The ceiling does not apply to First Time Abatements. See IRM 20.1.1.3.5.1, First Time Abate, for more information.


    Oral statement ceiling amounts Oral contact See IRM 20.1.1.3.5.3, Increase in Oral Statement Ceiling, and IRM 21.1.3.20, Oral Statement Authority.
    Written See IRM 20.1.1.3.5.3, Increase in Oral Statement Ceiling, and IRM 21.1.3.20, Oral Statement Authority.
    Service error Either Any amount.

21.5.2.4.9.3  (10-01-2003)
Partnership Penalty

  1. When a partner requests abatement of a partnership penalty for failure to file, Form 1065, U.S. Return of Partnership Income, see IRM 20.1.2.2, Minimum Failure to File, and also refer to LEM 20.1.2, Part 20 Penalty and Interest.

21.5.2.4.10  (10-01-2005)
Interest Explanation

  1. IRM 20.2, Interest, provides detailed interest instructions. Interest is mandatory unless there is a legal exception. Read and become familiar with the IRM 20.2. Interest, and use this IRM following the general interest procedures when answering telephone calls and related interest questions.

  2. IDRS Command Code (CC) PICRD: Use CC PICRD to explain credit interest to the taxpayer. CC PICRD provides a computation display of computer generated interest (TC 776) allowed on the refund.

  3. Penalty and Interest Explanation (PINEX): Use IDRS CC PINEX, Definer F (CP 569), to explain how credit and debit interest was computed on an IMF account. CC FTDPN, Definer B ( CP 568), is used to explain the Failure to Deposit (FTD) penalty.

21.5.2.4.10.1  (10-01-2007)
Ministerial/Managerial Interest Abatement

  1. The taxpayer may request abatement of interest due to an error or delay in the performance of a ministerial or managerial act. Additional details can be found in IRM 20.2.7.4, Errors or Delays in Performance of a Ministerial or Managerial Act, IRC 6404(e)(1).

    Caution:

    Different rules will apply to different tax periods.

  2. Requests for interest abatement will be referred to the Examination Interest Abatement Coordinator (IAC).

  3. This does not include inquiries concerning the computation of interest or restricted interest. See IRM 20.2, Interest, for calculation information and explain to the taxpayer.

  4. Taxpayers may phone in with a request for abatement of interest. Advise the taxpayer to submit the request in writing. Send the taxpayer Form 843, Claim for Refund and Request for Abatement, to request the interest abatement.

  5. If the taxpayer submits a Form 843 or other written request for interest abatement, refer the case to the local Examination IAC.

    1. If the request concerns an interest assessment made with an audit (TC 30X), close the case to Examination using activity code "2EXAM-IAC."

    2. If the request concerns an interest assessment made with an ordinary adjustment (TC 29X), treat as a technical question using activity code "2EXAM-IAC." See IRM 21.5.3.4.7.2.1, Examination Technical Assistance Request.

    3. If the request concerns an interest assessment made with an ASFR adjustment, close the case to Collection using activity code "2COLL-IAC."

  6. If the request referred as a technical question is returned, follow the Examination determination to abate or not to abate. Examination will provide the reason not to abate.

21.5.2.4.11  (12-13-2006)
Over ≡ ≡ ≡ ≡ ≡ ≡ Dollar Assessments

  1. Send copies of all supporting documentation for each case over ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ assessment where the taxpayer did not full pay in advance to:

    Internal Revenue Service
    CFO, Business Analysis & Support Section
    Kansas City Campus
    ATTN.: Mari McMahon
    Stop S–2 1035
    333 W. Pershing Rd.
    Kansas City, MO 64108

21.5.2.4.12  (10-01-2004)
Form 8485, Assessment Adjustment Case Record— Purpose and Preparation

  1. The Form 8485, Assessment Adjustment Case Record, is the worksheet used by employees to record actions taken on taxpayer accounts. The case may be from taxpayer inquiries or in house transcripts. Employees may use other forms, notices, or transcripts to record information as noted in specific procedures.

  2. Prepare Form 8485 -- Required entries include Fields 1 through 4,17, and 18 and the following numbered boxes:

    • The name of the Tax Examiner

    • Employee Number

    • Blocking Series

  3. All other fields are used as applicable:

    • Section II is used to record secondary transaction codes.

    • Section III and IV are used to record the appropriate Credit or Item Reference Numbers.

    Note:

    When a TC 340 or TC 341 is on the account, the interest-to-date is entered at the center of the bottom margin.

21.5.2.4.13  (10-01-2005)
Reinstating Retention Register Accounts

  1. If a module is removed from the MF to Retention Register, you can bring it back by inputting Command Code IMFOLB. For additional information, see IRM 21.2.2.5, Retention Register Research, and IRM 3.17.243.15, Reestablishment of Retention Register Accounts.

21.5.2.4.14  (10-01-2004)
Retention Register, Penalty Computation Effect

  1. Freezes "G" and "I" are set on the module when it is restored from the Retention R