- 21.5.11.18 Form 5330 Credit/Debit Module Balance Listing
- 21.5.11.19 Form 5330 Missing Payment Research
- 21.5.11.20 Form 5330 Claim For Refund
- 21.5.11.21 Bankruptcy Cases - Insolvency’s Responsibilities and Authority
- 21.5.11.22 Manual Refunds
- 21.5.11.23 Research
- 21.5.11.24 Plan Number
- 21.5.11.25 Correspondence
- 21.5.11.26 Service Level Agreements
- 21.5.11.27 EPMF Abbreviations and Acronyms
- 21.5.11.28 Area Office (AO)
- Exhibit 21.5.11-1 Quick Reference Chart for Form 5500, Schedules and Attachments
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Refer to the following procedures when attempting to resolve a Form 5330 debit module balance. Secure the original return from Files (two attempts) prior to taking the following action.
Note:
If the debit balance is from a prior Credit/Debit listing and all required actions were taken, input another TC 290 for zero priority code 5, Six weeks from date of last TC 290 for "0" . This will generate a CP161 notice to the filer.
Debit Module Balance If . . . And . . . Then . . . a green rocker is present on the return the payment can not be located through basic IDRS research Refer to Payment Tracer procedures a green rocker is not present on return the payment can not be located through basic IDRS research -
Contact filer to gather additional information relating to the debit balance on the account. hours.
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Suspend the case for 45 days (30/15) pending reply from the filer.
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If the filer responds to the IRS correspondence, follow the filer's response instructions.
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If the filer does not reply ro the IRS correspondence generate letter providing the filer with documents informing them of their appeals rights.
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If a response is received from the filer indicating that a payment will be submitted refer to the procedures in the table below:
If . . . Then . . . The filer states a payment will be submitted -
Instruct the filer to send payment and copy of the letter to the following address:
Internal Revenue Service
1973 Rulon White Blvd
Ogden, UT 84404 -
Annotate the expected date of payment on DI and TXMODA by inputting a history item.
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Close control base on IDRS, monitor account until the payment posts to MF.
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A payment tracer is the process used to locate a missing or misapplied payment made by a filer or organization. A payment tracer case is not resolved until the missing or misapplied payment is correctly applied to the organization’s account. Refer to IRM 21.5.7 Payment Tracers for specific guidelines.
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Search for payment on IDRS and CFOL. Refer to Document 6209, IRM 2.3 and 2.4 for information on displaying and using IDRS/CFOL information.
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Use CC NAMEI, NAMEB, to obtain TIN information.
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Use all appropriate IDRS/CFOL command codes to search for a payment, see examples below:
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SUMRY, TXMOD, to check for possible misapplied payments
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IMFOL, BMFOL, if no open TXMODs, or for the possibility the payment was made at another campus
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INOLET, INOLEX, to check all related TINs, valid or invalid, provided by filer
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URINQ, to research unidentified remittances
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XSINQ, to research excess collections
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SCFTR, Service Center Control File
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UPTIN, to check open and closed unpostables for a specific TIN
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Phone or fax filer for information needed to resolve the case, at least two attempts. If unable to contact the filer, use the appropriate " C" letter.
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TE/GE claims on Form 843, amended TE/GE returns requesting a refund of an amount previously paid or assessed, or any other document sufficiently detailed to be treated as either of the above will be handled by the appropriate TE/GE appointed Office. Campus personnel will not generate over assessment transactions on TE/GE returns unless directed or requested by local TE/GE offices except for math errors or service campus errors.
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TE/GE returns subject to this procedure are:
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Forms 5500 and 5500–C (EPMF).
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Forms 5500–EZ and 5500–R (EPMF).
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Forms 5330 (NMF).
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Form 5330 (BMF)
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All Form 5330 Claims for Refund must be forwarded, via Form 3210, to OAMC - EP Accounts M/S 6270
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EP Accounts Unit will screen TE/GE claims to ensure that a specific return was filed with payment of an amount at least equal to the amount claimed. Attach all research to the claim form, amended return, or correspondence. The original return will be obtained (if pre-EFAST or Form 5330), recharged to the Area Office, and also attached to the claim form, amended return, or correspondence. If the original return involved was processed as a NMF return (for example, Form 5330), secure a copy of the index card and NMF Transcript (if available) and attach it to the claim documents. Establish on AIMS and forward the entire package to the TE/GE program analyst with oversight of project, M/S 1110.
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All IRS offices, other agencies or filers who are sending items through a vendor (other than the U.S. Postal Service) the following address will be used:
Ogden IRS Campus
Attn.: Claim For Refund - Form 5330
Mail Stop 6270
1973 North Rulon White Blvd.
Ogden, Utah 84404 -
filers or anyone sending the information through the U.S. Postal Service, use the following address,
Note:
The 84201 zip code must be used with this address.
Internal Revenue Service
Mail Stop 6270
Attn: Claim for Refund - Form 5330
Ogden, Utah 84201 -
If an amended Form 5330 return is filed to claim a refund or credit, the claim "must" state in detail the reasons for claiming the refund, and provide the appropriate supporting evidence. See Regulations section 301.6402-2 for more details.
Note:
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Form 5330 claims listed below will be worked by OAMC.
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IRC 4975 - Prohibited Transactions - Abstract 159
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IRC 4971 - Minimum Funding Deficiencies - Abstract 163
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IRC 4980 - Reversions - Abstract 204
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The following claims for the Form 5330 will be considered / disallowed by the EP classifier in the field.
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IRC 4972 - Tax on Nondeductible Employer Contribution to Qualified Plans
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IRC 4973 - Tax on Excess Contributions to Section 403(b)(7)(A) Custodial Accounts
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IRC 4976 - Tax on Disqualified Benefits for Funded Welfare Plans
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IRC 4978 - Tax on Certain ESOP Dispositions
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IRC 4979 - Tax on Certain Prohibited Allocations for Qualified ESOP Securities
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IRC 4977 - Tax on Excess Fringe Benefits
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IRC 4980F - Tax on Failure to Provide Notice of Significant Reduction in Future Accruals
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IRC 4971(f) - Tax on Failure to Pay Liquidity Shortfall
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IRC 4971(g) (2) - Tax on failure to comply with a funding improvement or rehabilitation plan
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IRC 4971(g) (3) - Tax on failure to meet requirements for plans in endangered or critical status.
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IRC 4971(g)(4) - Tax on failure to adopt rehabilitation plan.
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IRC 4965 - (Abstract 237) Prohibited Tax Shelter Transaction for Entity Managers
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According to IRC § 6511(a), a claim for credit or refund must be filed by the later of:
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Three years from the date on which the original return was filed, or
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Two years from the date on which the tax was paid
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In the case of a claim filed within the three year period, the amount to be credited or refunded is limited to the tax paid during the three years immediately preceding the filing of the claim, plus the period of any extension of time to file. IRC 6511(b)(2)(A).
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In the case of a claim filed within the two year period, the amount is limited to the portion of tax paid during the two years immediately preceding the filing of the claim. IRC 6511(b)(2)(B).
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The filing of a claim for refund keeps the statute open only with respect to the item(s) described in the claim. A supplemental claim filed after the expiration of the statute that requires the investigation of facts or legal positions that would not have been disclosed by the investigation of the original claim will generally be considered an untimely new claim.
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A consent to extend the statute of limitations on assessment (e.g., the Service and the filer sign a Form 872, Consent to Extend the Time to Assess Tax) extends the statute of limitations for claiming a credit or refund to six months after the expiration of the assessment period. IRC 6511(c). If the filer and the Service executed a restricted consent, the filer’s ability to claim a credit or refund during the extended period of limitation on assessments is limited to the same item(s) covered by the restricted consent.
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The statute of limitations for claiming a credit or refund may be extended by agreement only by the execution of a consent to extend the statute of limitations on assessment on or before the expiration of the assessment period.
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The general period of limitations on claims for credit or refund is suspended during the period that an individual is "financially disabled." IRC 6511(h). Financially disabled means being unable to manage financial affairs. The inability must be due to a medically determinable mental or physical impairment. The impairment must have one of the following effects:
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The impairment must be expected to result in death
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The impairment must have already lasted for a continuous period of not less than 12 months, or
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The impairment must be expected to last for a continuous period of not less than 12 months.
Proof of the medically-determined impairment must be submitted with the filer’s claim for credit or refund and the procedures for the submission are published in Rev. Proc. 99-21, 1999-1 C.B. 960 (or its successor). The period does not include the time in which the filer’s spouse or any other person is authorized to act on behalf of the filer in financial matters (e.g., a guardian).
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A Prohibited Transaction is a transaction between a plan and a disqualified person that is prohibited under Internal Revenue Code section 4975. A "Disqualified Person" is usually someone who has control over the business such as an Employer.
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One of the most common Prohibited Transactions is where the Employer holds on to employees' contributions to a 401(k) plan. This is considered a violation due to the use of money for the Employer's benefit.
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The excise tax for a prohibited transaction arising from the use of money is calculated based on the "amount involved" which is the greater of the amount paid for the use or the fair market value of the use for the period for which the money or other property is used. The "amount involved" is not the actual money held on to by the disqualified person. In addition, transactions involving the use of money or other property will be treated as giving rise to a prohibited transaction occurring on the date of the actual transaction plus a new prohibited transaction on the first day of each succeeding tax year or portion of a succeeding tax year which is within the taxable period. Filers filing Form 5330 use the actual money held on to and apply the excise tax of 15% when filing the original Form 5330. The Form 5330 was filed incorrectly and the filer amends the Form 5330 to accurately show the use of the money apply the excise tax of 15%.
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Statute period for Section 4975 tax will begin the date the related Form 5500 was filed if the prohibited transaction was disclosed on the Form 5500.
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Prior to working the claim the following steps must be taken:
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Secure the original return from Files, two attempts will be made to secure the original return
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If unable to secure the original return, the charge out document will be part of the package
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Verify that the filer has provided the appropriate supporting evidence
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Validate the supporting documentation
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Verify the filer's calculations
Note:
Filer's calculations should be verified utilizing the "Claims Calculation" program approved by Employee Plans.
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If additional filer contact is needed See IRM 21.5.11.20.7.
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If no filer contact is needed See IRM 21.5.11.20.6.
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Request copies for supporting documentation such as, of bank statements, copies of checks, supporting documentation for distributions, documentation of their calculations.
Note:
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When a pension plan is over funded at the time of termination, excess assets may be returned to the employer if the plan so provides. The excess assets are determined after the satisfaction of all liabilities to participants and their beneficiaries. The Employer is required to report the reversion on Form 5330 by the last day of the month following the month in which the reversion occurred. The excise tax is 50% of the reversion amount.
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The Employer may be eligible for a 20% excise tax rate instead of the 50% rate if one of the following occurs:
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The employer establishes or maintains a qualified replacement plan following the plan termination and 25% of the reversion amount is transferred to this plan before the reversion. Also, at least 95% of the employer's employees are participating under the new plan. Or
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The employer provides certain pro-rata benefit increases in connection with the plan termination.
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If the Employer uses an excise tax rate other than 50%, the employer is required to explain why they qualify to use a rate other than 50% . This must be part of his supporting documentation. See IRM 21.5.11.20.5. for additional information on " Supporting Documentation" .
Note:
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Send letter to filer, See IRM 21.5.11.20.7.
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Prior to working the claim the following steps must be taken:
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Secure the original return from Files, two attempts will be made to secure the original return
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If unable to secure the original return, the charge out document will be part of the package
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Verify that the filer has provided the appropriate supporting evidence, See IRM 21.5.11.20.5.
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Validate the supporting documentation
Note:
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Verify the filer's calculations
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If additional filer contact is needed See IRM 21.5.11.20.7.
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If no filer contact is needed See IRM 21.5.11.20.6.
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A Minimum Funding Deficiency exists whenever an Employer fails to contribute the required funding for the plan which is either a Defined Benefit Plan or a Defined Contribution Plan by the funding deadline.
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The funding deadline is the 15th day of the 9th month following the plan year end.
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In most cases, the liabilities resulting from either Reversions or Minimum Funding Deficiencies will generate large dollar adjustments.
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Prior to working the claim the following steps must be taken:
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Secure the original return from Files, 2 attempts will be made to secure the original return
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If unable to secure the original return, the charge out document will be part of the package.
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Verify that the filer has provided the appropriate supporting evidence, See IRM 21.5.11.20.5.
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Validate the supporting documentation
Note:
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Verify the filer's calculations
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If additional filer contact is needed See IRM 21.5.11.20.7.
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If no filer contact is needed See IRM 21.5.11.20.6.
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If an amended return to claim a refund or credit is filed, the claim "MUST" state in detail the reason(s) for claiming the refund and provide the appropriate supporting evidence. See Regulations section 301.6402-2 for additional details.
Note:
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The following are recommended guidelines for "the appropriate supporting evidence"
IRC 4975 Prohibited Transactions - Abstract 159 Claims Detailed breakdown of the original calculations initially computed and the revised computations. Working a Claim IRC 4971 Minimum Funding Deficiencies - Abstract 163 Canceled check(s) and bank statements showing payment of the funding deficiency IRC 4980 Reversion of Qualified Plan Assets to an Employer - Abstract 204 List of names of participants enrolled in new plan
Proof that a new plan was established, ie adoption agreement
Bank Statements or cancelled checks showing proof the 25% funding going into the new plan.
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After you have obtained the original return and verified that all of the appropriate documentation was provide and no additional contact with the filer is needed, proceed as follows:
Note:
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Input TC 29X or appropriate credit adjustment
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Use Blocking Series 15 for BMF without the original return
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or Blocking Series 00 with the original return
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Prepare Manual Refund if account is in credit status, See IRM 21.5.11.22.
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Close Control
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If it is determined that it is necessary to contact the filer (or POA) to obtain additional information, proceed as follows:
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Send letter 0324C utilizing the appropriate paragraphs
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Suspense case for 45 days, this allows 30 days for the filer to respond
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If filer does not reply, annotate on the history sheet, " NO REPLY" and work the claim as a "No Consideration" See IRM 21.5.11.20.8.
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When filer provides you with the additional information requested work claim as a Claims Allowed in Full, No filer Contact, See IRM 21.5.11.20.6.
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Send appropriate disallowance letter 105C/106C, or no consideration letter 916C to advise the filer why we cannot consider the claim.
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Input a TC 290 for 00 in the appropriate blocking series
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File the claim, or amended return and a copy of the no consideration letter with the original return if the original return was filed electronically associate the copy of the no consideration letter with the adjustment DLN
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All claim disallowance letters must contain the specific reason for the claim disallowance. Appeal rights and the right to file suit should also be included. An IRC section should be cited if known and appropriate.
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See IRM 20.1.14, Methods of Appealing Penalties, for Appeal Claim procedures and IRM 21.5.3 General Claims Procedures for additional information.
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Review claim and determine:
If . . . Then . . . Issue being considered is not allowable based on law or regulation Disallow the Claim, and send 105C, or 106C letter. Include appeal rights and the right to file suit. Claim not filed timely -
Disallow as instructed
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Send 105C or 106C letter include appeal rights and the right to file suit.
Filer requests an immediate disallowance of a claim -
Disallow claim
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Send 105C or 106C letter include appeal rights and the right to file suit.
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Advise the filer you disallowed claim based upon their request.
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A request for an abatement is a request for reduction of tax, penalty, and interest that has not been paid. This includes penalty adjustment requests. If this type of abatement request is not considered, send the letter via regular mail.
Note:
Request for abatement should not be denied consideration solely for non-payment of tax. Process under normal adjustment procedures unless it meets Examination criteria.
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These procedures are for general claims only. Form requests for abatement of interest, follow the procedures in IRM 20.2.7 (Abatement and Suspension of Interest. IRC Sections 6404 and 7508)
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Only disallow claims if all research is done and all contacts have been made for any missing information.
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Upon receipt of the Form 5330 Claim for Refund, EP Accounts must prepare a complete claim package or case file and prepare Form 5597 for AIMS input and establishment prior to routing the claim to the EP Classification Coordinator.
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The following actions will be taken when preparing the claim package:
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Secure the original return from Files, two attempts will be made to secure the original return
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If unable to secure the original return, the charge out document will be part of the package.
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Prepare the Form 5597.
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Close your control as "EP AGENT"
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Sent 086 C informing the filer that the request was forwarded to:
EP Classification Coordinator,
9350 Flair Dr., 2nd Floor
El Monte, CA 91731–2885
626-312-2933 -
Establish on AIMS
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Attach case history sheet, this is required to be included.
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Forward the entire package to the TE/GE program analyst with oversight of project, M/S 1110 via Form 3210
Note:
If "NO" supporting documentation or explanation was provided follow the amended return procedures.
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After the initial claim package preparation is sent to the field, no further action is taken by EP Accounts.
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Responsibilities - Field Insolvency and the Centralized Insolvency Operation (CIO) implement bankruptcy policy guidelines, control and monitor bankruptcy cases for the IRS, and take appropriate case actions on all of the bankruptcy cases assigned to Insolvency.
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Authority - Insolvency personnel have delegated authority to:
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Prepare and file proofs of claim.
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Refer bankruptcy case actions to the Department of Justice or the US Attorney’s Office, either directly or through local Counsel.
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Resolve bankruptcy issues administratively.
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Contacts. Insolvency personnel deal directly with Associate Area Counsel (SB/SE), Department of Justice, Assistant US Attorneys, bankruptcy court employees, trustees, debtors and their attorneys, and IRS employees in other functions throughout the Service.
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Advice and Guidance. Insolvency personnel are trained in specific areas of bankruptcy law that deal with tax administration and debtor protection. When confronted with bankruptcy issues beyond the scope of their knowledge and expertise, they are to seek guidance from the local Counsel office.
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Directions from Insolvency. Insolvency employees provide directions on bankruptcies to other IRS functions. When Service personnel contact Insolvency regarding a bankruptcy-related issue, they should comply with the advice and guidance given by Insolvency. If additional assistance is required, Insolvency employees will contact Counsel on behalf of other IRS employees. (See IRM 5.9.1.3, - The Role of Insolvency.)
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For additional information or clarification on significant processing Bankruptcy procedures refer to IRM 5.9.4,
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A Manual Refund is a refund that is not generated by normal computer processing. The request for a refund by use of a Form 3753, Manual Refund Posting Voucher and a Form 5792, Request for IDRS Generated refund, are commonly referred to as Manual Refunds. ALL requests for manual refunds must be controlled and monitored by the initiator (or other management designated employee) to prevent duplicate, erroneous refunds.
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Because of the potential for erroneous refunds when manual refunds are issued, a manual refund should be a last resort.
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Employees from all functions can initiate requests for manual refunds. The Accounting Function of the Submission Processing Campus schedules and certifies refunds.
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This IRM provides information on manual refunds for EP, and actions needed to initiate a refund. See IRM 21.4.4 for more information on manual refunds.
Note:
Form 5330s do qualify for the GATT interest rate.
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Before sending a request for a manual refund to the Accounting Function, thorough research must be completed. If the refund is being prepared for the Bureau of Public Debt, no research is required.
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Failure to perform complete research, or if supporting documentation is not provided when the manual refund is submitted to the Accounting Function, the manual refund request will be rejected back to the originator.
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Tax offset capability is lost when a manual refund is issued. Ensure the filer has no outstanding tax liabilities that must be satisfied. Initiators must review the account using universal IDRS research. Ensure that there are no prior, duplicate, manual (TC 840) or generated refunds (TC 846) issued at any campus for the credit you are refunding, Research all related accounts using appropriate command codes the same day a manual refund is prepared to verify that a duplicate refund will not be issued.
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You must verify that the claimed credit (payments) are available for refund. Research for any open control bases and coordinate as necessary. The first two digits of the employee IDRS number (Office Identifiers) will identify the employee’s location:
Office Identifiers Campus 01 Brookhaven 02 Cincinnati 03 Memphis 04 Ogden 05 Philadelphia 06 Austin 07 Atlanta 08 Andover 09 Kansas City 10 Fresno 11-17 W&I Area Offices 1-7 21-36 SB/SE Area Offices 1-16 -
All records of accounts "MUST" be researched including:
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IMF
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BMF
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NMF
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IRAF
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Before initiating a manual refund, verify that the Refund Statute Expiration date (RSED) has not expired.
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Questionable RSED dates will not be processed unless cleared by the Statute function. The clearance must be attached to the refund document forwarded to Accounting.
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Research Non Master File MFT 74 & 76 account (NMF) to determine if there is a NMF account. When research shows a manual refund is needed you must contact the Non Master File Function to request a transcript of all open NMF accounts.
Note:
Agreement was made with NMF to utilize print screens for MFT 74 & 76.
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Consider any outstanding balances or prior TC840s when determining the amount of the manual refund which can be initiated. The refund amount may be reduced or not approved if there are NMF debts.
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If research indicates the TP is eligible for all or a portion of the refund, attach the NMF transcript to the Form 3753, with explanation of why it qualifies for a manual refund (Sec III, Form 3753).
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Establish an IDRS History Item, 5792 to SC Acct., via CC ACTON, to alert employees that a manual refund is in process.
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Follow-up to ensure the manual refund was issued and the proper posting of credits to Master File. Verifying that the credit posted will ensure the filer is not billed erroneously in addition to preventing issuance of a duplicate refund.
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Monitor accounts weekly (Monday-Wednesday) until the manual refund (TC840) posts to Master File and the account is in "0" balance. It may take 4-6 weeks for the TC840 to post when issued via Form 3573.
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If the manual refund has not posted to ANMF for the Form 5500 account within 20 days contact the lead or manager of the Manual Refund Unit to resolve why the request has not been completed.
Note:
DO NOT prepare duplicate request without complete research and managerial approval.
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Continue to work the case after the TC 840 posts, or, if the only action requested was the manual refund, close the IDRS control base.
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Form 5792 is used to request an IDRS Master File manual refund whenever possible. Form 5792
Note:
Refunds of less than one dollar can be processed via Form 5792, using the Form 3753 is not necessary.
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After completing Form 5792, the Team Lead will review and initial the form verifying that the manual refund is appropriate, that the research is complete, and the form is completed accurately. The Approving Official’s signature certifies to the Accounting Function that the form was reviewed and is correct.
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Complete the Form 5792 as follows:
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Section I, Block 1, enter the filer Identification Number (TIN) and File Source of the account from which the refund will be issued.
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Block 2, enter the Master File Tax Code (MFT)
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Block 3, enter the tax period as YYYYMM, Exception: period ending for MFT 52 is always 000000
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Block 4, enter the name control
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Block 5, enter the TC840 amount: overpayment, plus allowable interest
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