Part 21. Customer Account Services

Chapter 3. Taxpayer Contacts

Section 1. Taxpayer Contacts Resulting From Notice Issuance (Cont. 1)

21.3.1  Taxpayer Contacts Resulting From Notice Issuance (Cont. 1)

21.3.1.4 
Notice Descriptions

21.3.1.4.32  (10-01-2012)
CP 42 Secondary SSN Offset Notice

  1. A CP 42, Secondary SSN Offset Notice, is issued to notify taxpayer of an offset of an overpayment for the return that is the subject of the notice to satisfy a Federal tax obligation for a joint return for another tax year on which the taxpayer was the secondary SSN. Be aware of disclosure criteria. Refer to IRM 21.1.3.2, General Disclosure Guidelines.

    If And Then
    Taxpayer agrees with notice An overpayment remains; Advise the taxpayer he should receive a refund within 4 weeks, if he owes no other taxes.
    Note: Advise taxpayer of a possible TOP offset for child or spousal support, Federal non-tax debts, or state income tax.
    Four weeks have passed the taxpayer did not receive refund check; Advise the taxpayer to check and see if he owes other taxes (e.g., state or are they behind on child support).
    If not; refer to IRM 21.4.2, Refund Trace and Limited Payability .
    Taxpayer agrees with the notice. The balance due remains on a prior year account. Request payment in full.
    Refer to IRM 21.3.12.4 , Determine the Earliest the Taxpayer Can Full Pay.
    Taxpayer indicates he sent in a payment There is no payment (TC 670) posted on the account Research to locate the missing payment.
    Refer to IRM 21.5.7, Payment Tracers.
    Taxpayer disagrees Taxpayer states spousal obligation is not correct 1. Request taxpayer to supply justification to the Account Management function.
    2. Request written documentation only if the issue cannot be resolved with oral statement.
    Taxpayer disagrees Balance due arose from a return filed by one spouse 1. Advise the spouse who is not liable to file Form 8379, Injured Spouse Claim Allocation.
    2. Refer to IRM 21.4.6.5.3, Injured Spouse Inquiries .

    Note:

    For an audit reconsideration, refer to IRM 21.5.10, Examination Issues. For a Substitute for Return (SFR), refer to IRM 5.19.2 , Return Delinquency. For AUR issue refer to IRM 21.3.1.4.5Resolving or Referring Underreport Cases


21.3.1.4.33  (10-04-2011)
CP 44 Credit Available For Application to Non-IMF Account

  1. A CP 44, Credit Available For Application to Non-IMF Account, is issued when there is a refundable credit of ≡ ≡ ≡ ≡ ≡ ≡ ≡ on a tax module and there is a TC 130 present in the entity module. This is a three part notice; Part 1 is sent to the taxpayer and Parts II and III are generated to the Service.

    1. Informs the campus that an IMF overpayment is available for application to a non-IMF outstanding liability, or of an overpayment available to use in an Offer-in-Compromise.

    2. Informs taxpayer an available overpayment was applied to an outstanding balance on another account.


  2. After application of credit, remaining overpayment is refunded.

    1. Advise taxpayer to allow six to eight weeks on a non-individual account for IRS to determine if a tax liability exists.

    2. If more than 8 weeks have elapsed and taxpayer has not received any information, prepare Form 4442 , Inquiry Referral and send to Collection function in the Atlanta campus. Include taxpayer's day and evening telephone numbers.


21.3.1.4.34  (10-01-2012)
CP 49 Overpayment Adjustment-Offset

  1. A CP 49, Overpayment Adjustment - Offset, is issued to notify taxpayer the overpayment on an individual return was applied to a prior year’s unpaid IMF liability.

    If And Then
    Taxpayer agrees with notice A balance due remains on prior year Request full payment. Refer to IRM 21.3.12.4 , Determine the Earliest the Taxpayer Can Full Pay.
    Taxpayer agrees with notice An overpayment remains 1. Advise taxpayer a refund will be issued within six weeks if no other Federal taxes or obligations are owed (TOP offset for child or spousal support, Federal non-tax debts, or state income tax).
    2. Refer to IRM 21.4.1, Refund Research , if 4 weeks have passed.
    Payment was made Was NOT properly credited to the prior year account 1. Research IDRS to locate payment (e.g., TC 670).
    2. Refer to IRM 21.5.7, , Payment Tracers.
    Taxpayer disagrees with notice Supplies supporting information 1. Adjust the account as appropriate.
    2. Send the taxpayer a notice explaining the adjustment to tax.
    3. Advise the taxpayer about Penalty and Interest is charged until the account is paid in full. Refer to IRM 20.1, Penalty Handbook and IRM 20.2, Interest.

21.3.1.4.35  (10-01-2012)
CP 51A Non-Compute, Balance Due of $5 or more

  1. A CP 51A, Non-Compute, Balance Due of $5 or more, is issued to notify taxpayer the IRS computed their tax and gives balance due. Interest or penalty for late payment is not charged if amount due is paid within 30 days of notice date or by due date of return.

  2. Use the chart below to assist in the working of CP 51A responses.

    If Then
    Taxpayer agrees with notice Request payment in full per IRM 21.3.12.4,Determine the Earliest the Taxpayer Can Full Pay..
    Payment was not properly credited to account Research IDRS for missing payment per IRM 21.5.7, Payment Tracers.
    Taxpayer disagrees Request taxpayer supply justification to Customer Service. Request written documentation only if issue not covered by oral statement.
    Taxpayer's disagreement involves an item not reported on original return Advise taxpayer to file amended return, Form 1040X, Amended U.S. Individual Income Tax Return.

21.3.1.4.36  (01-26-2010)
CP 51B Non-Compute, Overpayment of $1 or more

  1. A CP 51B, Non-Compute, Overpayment of $1 or more, is issued to notify taxpayer the IRS computed their tax and also provides refund amount. Advise taxpayer the refund should be received within 2 weeks of the date of the notice if no other Federal taxes or obligations are owed and a refund amount remains.

    If Then
    Taxpayer agrees with notice No action is necessary.
    Taxpayer disagrees with notice Follow instructions for in previous section.

21.3.1.4.37  (01-26-2010)
CP 51C Non-Compute, Balance Due < $5, Overpayment <$1

  1. A CP 51C, Non-Compute, Balance Due < $5, Overpayment <$1, is issued to notify taxpayer the IRS computed their tax and account balance is zero.

    If Then
    Taxpayer agrees with notice Advise that no action is required.
    Payment was not properly credited Research IDRS for missing payment. Refer to IRM 21.5.7 , Payment Tracers.
    Taxpayer disagrees with notice Follow procedures for CP 51A.

21.3.1.4.38  (10-01-2002)
CP 53 Unable to Direct Deposit

  1. A CP 53, Unable to Direct Deposit, is issued to notify taxpayer an electronic funds transfer was not honored. Advise taxpayer:

    1. No action is required. Because the financial institution could not accept direct deposit of the refund, IRS is issuing a paper check.

    2. Taxpayer will receive refund within 3 weeks if no other Federal taxes or obligations are owed and a refund amount remains.

    3. If three weeks have passed, refer to IRM 21.4.1, Refund Research.

21.3.1.4.39  (10-01-2011)
CP 54x Series Notices, Inquiry Regarding Name and SSN

  1. There are four notices in the CP 54x series: CP 54B, Inquiry Regarding Name and SSN - Refund, CP 54E, Inquiry Regarding Name and SSN on ES Tax Payments, CP 54G , Inquiry Regarding Name and SSN - Even/Balance Due and CP 54Q, SSN and Name Inquiry - Second Request .

  2. These notices are issued to taxpayer when a return with an invalid primary SSN posts. The taxpayer may receive a math error notice instead. Refer to IRM 21.5.4, General Math Error Procedures , for more information.

  3. The account is invalid (found on the invalid segment of MF). The CP 54x series notices advise the taxpayer to compare the name and Identifying Number with the SSN on their most recent social security card so the Service can release a refund. Refer to IRM 21.6.1.5.6 , Resolving CP 54 Notices with Math Error Involvement Procedure and IRM 3.13.5.136, CP 54 Notice Overview.

  4. Refer to IRM 3.13.5.20 , IRS Individual Taxpayer Identification Number (ITIN) Format for information on ITINs and IRM 21.5.6, Freeze Codes, for information on "I" Freeze. Usually an account with an invalid SSN also has a "G" Freeze (math error), refer to IRM 21.5.4, General Math Error Procedures.

21.3.1.4.39.1  (01-08-2008)
CP 54B Inquiry Regarding Name and SSN - Refund Delayed

  1. A CP 54B, Inquiry Regarding Name and SSN - Refund Delayed, is issued to notify taxpayer of a problem with name and SSN on a refund return.

    1. Research IDRS to verify name and SSN. Refer to IRM 3.13.5, Individual Master File (IMF) Account Numbers, for procedures.

    2. If you are unable to verify entity information and resolve issue with oral statement, advise taxpayer to complete, sign, and return second page of the notice.

    3. Taxpayer will receive refund within 30 days of receipt of reply if no other Federal taxes or obligations are owed and a refund amount remains.

    4. Refer to IRM 21.5.6, Freeze Codes, if there is a "G" Freeze on the module.

21.3.1.4.39.2  (01-08-2008)
CP 54E Inquiry Regarding Name and SSN on ES Tax Payments

  1. A CP 54E , Inquiry Regarding Name and SSN on ES Tax Payments, is issued to notify taxpayer of a problem with name and SSN on estimated tax payment.

    1. Research IDRS to verify name and SSN. Refer to IRM 3.13.5, Individual Master File (IMF) Account Numbers , for procedures.

    2. If you are unable to verify entity information and resolve issue with oral statement, advise taxpayer to complete, sign and return second page of the notice.

    3. If the payment is on the wrong TIN, input a credit transfer. Refer to IRM 21.5.8Credit Transfer.

21.3.1.4.39.3  (10-19-2010)
CP 54G Inquiry Regarding Name and SSN - Even/Balance Due

  1. A CP 54G , Inquiry Regarding Name and SSN - Even/Balance Due, is issued to notify taxpayer of a problem with name and SSN on return with an even balance or a balance due.

    1. Research IDRS to verify name and SSN. Refer to IRM 3.13.5, Individual Master File (IMF) Account Numbers, for procedures.

    2. If you are unable to verify the entity information and resolve issues with oral statement, advise taxpayer to complete, sign and return second page of the notice.

    3. If the taxpayer agrees with the balance due, request full payment. Refer to IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay .

    4. If the taxpayer disagrees with the balance due because of a misapplied payment, research for the payment and input a credit transfer. Refer to IRM 21.5.8, Credit Transfers.

21.3.1.4.39.4  (10-01-2011)
CP 54Q SSN and Name Inquiry - Second Request

  1. A CP 54Q , SSN and Name Inquiry - Second Request, is an automatic follow-up notice (second request) to the CP 54B .

  2. Automatically generates one year after the CP 54B if the taxpayer still resides on the invalid segment of Master File.

  3. Refer to IRM 21.3.1.4.39.1, CP 54B Inquiry Regarding Name and SSN - Refund Delayed .

21.3.1.4.40  (10-01-2012)
CP 57 Electronic Fund Transfer - Notice Of Insufficient Funds on a DDIA Payment (IMF)

  1. A CP 57, Electronic Fund Transfer - Notice Of Insufficient Funds on a DDIA Payment (IMF), is issued to notify taxpayer a direct debit installment agreement payment was not honored due to insufficient funds.

    If Then
    Taxpayer agrees Request submission of missing payment.
    Taxpayer is experiencing difficulty that will prevent further installment payments from being honored Refer to IRM 21.3.12, Accounts Management Balance Due Telephone Contacts .
    Taxpayer has reasonable cause for removal of penalty Refer to IRM 20.1.10.4.3, Penalty Relief.
    Taxpayer insists there were sufficient funds in their account Advise the taxpayer to contact their bank.

  2. For more information refer to IRM 20.1.10.4, IRC section 6657 Bad checks (Dishonored Checks or Other Forms of Payment)

21.3.1.4.41  (10-01-2012)
CP 58 Notice of Spouse’s Missing SSN

  1. A CP 58, Notice of Spouse’s Missing SSN, is issued to notify taxpayer spouse's SSN is missing. These accounts should show a math error freeze (G). Refer to IRM 21.5.4, General Math Error Procedures, for instructions on how to work math errors. Refer to IRM 3.13.5, IMF Account Numbers, for more information on entity changes.

    If And Then
    Spouse has a valid SSN Neglected to enter it on the return. Validate SSN and determine that no other taxpayer is found under the number. Input TC 017 with oral statement Refer to IRM 3.13.5.132 Add, Delete or Change Spouses' TIN (generates a TC 017)
    Spouse does not know or have an SSN   Advise taxpayer to contact the Social Security Administration (SSA) to obtain a Social Security Number.
    Spouse is not eligible for an SSN   Refer to IRM 3.13.5.82, Individual Taxpayer Identification Numbers (ITINs) , for W–7 procedures

21.3.1.4.42  (10-01-2012)
CP 60 Credit Reversal Adjustment Notice

  1. A CP 60, Credit Reversal Adjustment Notice, is issued to notify taxpayer when a credit is transferred out creating a debit balance of $5.00 or more. Informs taxpayer of a credit reversal.

    If Then
    Taxpayer agrees with notice Request full payment. Refer to IRM 21.3.12.4Determine the Earliest The Taxpayer Can Full Pay
    Payment was not properly credited 1. Research IDRS for missing payment.
    2. Refer to IRM 21.5.7, Payment Tracers.

21.3.1.4.43  (10-19-2010)
CP 62 Notice of Credit Transfer

  1. A CP 62, Notice of Credit Transfer, is issued to notify taxpayer a payment they inquired about was located and applied to a specific account. The notice also advises of one of the following:

    • A balance due

    • An even balance

    • A refund has been or will be issued subject to offset for any Federal tax or other obligations owed (i.e., a TOP offset for child or spousal support, Federal non-tax debts, or state income tax).

  2. Research IDRS and explain reason for notice. Follow procedures in table below.

    If And Then
    Taxpayer agrees with notice There is an overpayment 1. Advise refund will be issued within two to four weeks. Warn of possible offset.
    2. If more than four weeks have passed, refer to IRM 21.4.1, Refund Research.
    Taxpayer agrees with notice There is a balance due 1. Request full payment.
    2. Refer to IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay .
    Payment was made Was not properly credited to the account 1. Research IDRS for payment.
    2. Refer to IRM 21.5.7 , Payment Tracers.
    Taxpayer disagrees with notice for a reason other than a missing payment Provides justification Refer to appropriate IRM and take action necessary to correct account.


21.3.1.4.44  (10-19-2010)
CP 71 Reminder Notice

  1. A CP 71, Reminder Notice, is issued to taxpayer once a year to remind taxpayer of a balance due, including penalty and interest. The notice is generated on accounts previously in a deferred Status (Status 23).

    If And Then
    Taxpayer agrees with notice Taxpayer’s financial status has not changed No action is necessary.
    Taxpayer indicates their financial status has changed Payments can now be made 1. Request payment.
    2. Refer to IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay.
    Taxpayer indicates a payment was made Was not properly credited to account 1. Research for payment.
    2. Refer to IRM 21.5.7, Payment Tracers.
    Taxpayer disagrees with notice for reasons other than missing payment Provides justification Refer to appropriate IRM and take action necessary to correct account.

21.3.1.4.45  (10-01-2012)
CP 71A Reminder Notice

  1. A CP 71A, Reminder Notice, is issued to taxpayer once a year on tax modules in Status 53 (currently not collectible). Status 53 is an IDRS status and the module may show another Master File status.

    If Then
    Taxpayer offers to make payments 1. Establish installment agreement.
    2. Refer to IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay.
    Taxpayer requests a final payoff Compute payoff amount.
    Taxpayer is unable to pay 1. Explain CP 71A is an annual notice. No enforcement action will be taken at this time.
    2. Ask taxpayer to make payments whenever possible.
    3. Refer to IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay .

21.3.1.4.46  (10-01-2002)
CP 71C and CP 171 Annual Reminder Notices

  1. A CP 71C, Reminder Notice - Balance Due, and CP 171, BMF Annual Reminder Notice, is issued to taxpayer annually for all Taxpayer Delinquent Accounts (TDA) in the queue that have been in status 24 for at least one year. The Compliance Services Collection Operations (CSCO) return address will be on the notice along with an Automated Collection System (ACS) telephone number. These notices are issued from February through November based on the Taxpayer's Identification Number (TIN).

21.3.1.4.47  (10-01-2004)
CP 71D Reminder Notice - Balance Due

  1. A CP 71D, Reminder Notice - Balance Due , is issued to taxpayer once a year on accounts in collection Status 22 and 26. A separate notice is issued for each module in Status 22 or 26.

    If Then
    Taxpayer has recently been contacted by IRS and has paid or arranged to pay Advise taxpayer that notice is required by law and to disregard.
    Call received on Toll Free numbers (other than ACS) If in Status 22 transfer to ACS.
    If Status 26 and is assigned to an Revenue Officer (RO), provide the taxpayer with the RO phone number. RO Lookup
    Calls received on Collection Function-field (CFf) Refer to ACS on Form 4442, Inquiry Referral.
    Taxpayer offers to make payments Refer to IRM 5.19.1, Balance Due
    Taxpayer requests a final payoff Compute payoff amount.
    Taxpayer is unable to pay Refer to IRM 21.3.12.4, Determine the Earliest the Taxpayer Can full Pay.

21.3.1.4.48  (10-01-2009)
CP 75 Exam Initial Contact Letter – EIC – Refund Frozen

  1. A CP 75, Exam Initial Contact Letter – EIC – Refund Frozen, is issued to notify taxpayer that their refund will be held pending an examination. The case will be open in the Audit Information Management System (AIMS) in Origination Code 5041, Project Code 0261, and source code 06. Refer to IRM 21.5.10.4.1, EITC and Other Projects , for information on how to handle these cases.

21.3.1.4.49  (01-14-2009)
CP 81 We may have a refund for you

  1. A CP 81, We may have a refund for you, is issued to notify taxpayer when the refund statute is within six months of Refund Statute Expiration Date (RSED). The CP 81 informs the taxpayer "We May Have A Refund For You" . The CP 81 is issued to coincide with news and press releases to remind taxpayers:

    1. A return has not been filed

    2. The time to file a claim for a refund/overpayment is about to expire

    3. A return/claim must be filed to claim the overpayment before the RSED.

  2. Refer to IRM 25.6.1.6.17 , CP 81, CP 081 for additional information.

21.3.1.4.50  (01-08-2008)
CP 85 and CP 87 (Exam Soft Notices)

  1. A CP 85, Exam EIC "Soft" Notice and CP 87, Exam Dupe TIN Notice are issued to taxpayer as soft notices by Examination. They are sent for information purposes only and inform the taxpayer they may have claimed one of several tax benefits in error.

  2. No adjustments are made to the return, nor will be made, unless the taxpayer initiates an adjustment. For additional information and adjustment procedures, refer to IRM 21.5.10.4.2, Exam Soft Notices CP 85 A, B and C and CP 87 A, B, C and D.

21.3.1.4.51  (10-01-2011)
CP 86 Restricted Interest/Penalty Conditions

  1. A CP 86, Restricted Interest/Penalty Conditions, is an internal notice and as of 01/01/2001 this notice should generate in the same cycle as the TC 150. Research to determine the reason for the restriction and compute the current amount of interest to assess or abate.

  2. Do not recompute assessed interest unless you discover an obvious error when performing normal interest update procedures.

    Reminder:

    Do not use complete recomputation as a review procedure. Finding previous errors is not the purpose of recomputations.

  3. Update interest from the last interest update on manually computed accounts. Request return and source documents if necessary.

  4. Refer to IRM 20.2, Interest for interest computation.

  5. Refer to IRM 21.7.11.4.5.1, Routing of CP 186 with U-, -V, -W, -Y, or TC 521 with Closing Codes 81.

21.3.1.4.51.1  (10-01-2004)
CP 86 FTP Restriction

  1. Failure to Pay (FTP) penalty must be manually reviewed when the penalty is restricted from computer computation. Input changes to penalty manually.

  2. Analyze module to determine if Failure-to-File (FTF) penalty was correctly reduced to 22.5% (4.5% per month) when the TC 270 was assessed. If the maximum FTP penalty has been assessed and there is no TC 971 ac 262 on the account, input TC 971 ac 262 using CC REQ77.

21.3.1.4.51.2  (10-04-2011)
Adjusting CP 86 Accounts

  1. Analyze tax module, transcript, and source document to determine if you should manually adjust interest or penalty. Refer to IRM 5.19.10, Collection Operations Transcript Processing, to resolve the "-C" freeze conditions. Do the following:

    Note:

    CP 86 modules which are now or have been in Taxpayer Delinquent Account (TDA) status (Collection statuses 22, 24, 26 or 60) will be transferred to Atlanta CSCO. Do not close the Submission Processing control base nor send any paper to Atlanta CSCO. Accounts Management technicians must reassign to a unique IDRS number, 0765500001. Close your CIS case then reassign as new control to 0765500001.

    If Then
    No additional interest or penalty adjustment is necessary Input TC 290 for .00 with blocking series 05 (Use Blocking Series 00 if you have original return) and Hold Code (HC) 3.
    Manual action is necessary 1. Recompute interest or FTP penalty as applicable following IRM 20.1, Penalty Handbook, or IRM 20.2, Interest
    2. Input necessary adjustments.
    3. Use Hold Code 0.
    4. Refer to IRM 20.2.8.3(1) a and b, Manual Computations, when manually computing and adjusting interest and IRM 20.1.2.1.5, Manual Penalty Adjustments, for appropriate Blocking Series when adjusting FTF and/or FTP penalty.
    Available credit is less than the additional amount Assess total additional amount.

    Exception:

    If the additional amount exceeds available credit by ≡ ≡ ≡ ≡ ≡ , assess only the available credit. Do not assess zero balance account for ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Available credit is more than the additional amount. Assess only the additional amount due and let the remainder be refunded.

    Reminder:

    Per IRC § 6631 anytime interest is manually computed as in the case of the CP 86, an explanation must be sent to the taxpayer. Refer to IRM 20.2.8.3, Manual Computations .

21.3.1.4.52  (10-01-2004)
CP 89 Annual Installment Agreement Statement

  1. A CP 89, Annual Installment Agreement Statement, is issued to taxpayer as an annual reminder notice sent on all accounts with installment agreement activity. This notice is sent annually and required by Section § 3506 of RRA '98. The notice provides the following information:

    • For your Records—This is not a Bill

    • Provides a one year accounting of all payments submitted

    • Shows modules to which payments were applied

    • Shows all balance due periods

  2. The notice instructs the taxpayer to:

    If And Then
    The notice shows restricted interest and/or penalty The taxpayer wants a balance with the penalty and interest Contact the Service at the telephone number on the notice
    The notice does not show all of the payment(s) they made during the year.   Contact the Service at the telephone number on the notice

21.3.1.4.53  (10-01-2007)
Form 9774 Annual Reminder Notice on NMF Accounts

  1. The Form 9774, Annual Reminder Notice For Automated Non-Master File (ANMF ) / Non-Master File (NMF), is sent to all Non-Master File (NMF) accounts, including TDAs and those in Status 53. Refer to IRM 21.3.1.4.109, Non-Master File (NMF) Notices, for more information.

21.3.1.4.54  (10-01-2012)
CP 314 IRA Balance Due For Form 5329

  1. A CP 314, IRAF Notice of Balance Due, is issued to taxpayer as a first notice to notify taxpayer of a balance due when there is no math error. Advise taxpayer this is a request for payment of Individual Retirement Account (IRA) Taxes.

    If Then
    Taxpayer agrees with balance due 1. Request full payment.
    2. Refer to IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay .
    A payment is missing Research IDRS for payment, and refer to IRM 21.5.7, Payment Tracers.
    Taxpayer disagrees with notice Refer to the appropriate IRM and take action necessary to correct the account.

21.3.1.4.55  (10-01-2002)
CP 321 / CP 322 IRA Exam/DP Adjustment

  1. The CP 321, IRAF Notice of Account Adjustment and CP 322, IRAF Notice of Account Adjustment, are issued to notify taxpayer of an adjustment to their account (printed on Form 8488). Research IDRS and explain reason for notice.

    If Then
    Taxpayer agrees with notice No response is necessary.
    A refund is due 1. Advise it will be received within four weeks if no other federal taxes or obligations are owed and a refund amount remains.
    2. If four weeks have passed and taxpayer has not received refund. Refer to IRM 21.4.1, Refund Research.
    Adjustment is the result of an examination and taxpayer disputes deficiency assessment Advise under certain conditions, you may request an audit reconsideration. Refer to IRM 21.5.10, Examination Issues.

21.3.1.4.56  (10-01-2012)
CP 2057 - Soft Notices Income Discrepancy

  1. The CP 2057 is a soft notice which informs the taxpayer there appears to be a discrepancy with income reported by third party. The CP 2057 instructs the taxpayer to review and compare the income they reported and income reported by a third party. The notice provides the third party information IRS received such as the name of the Third Party and address. The issuance of the CP 2057 is identified by Transaction Code 971 Action Code 922 on Command Code TXMODA. The CP 2057 notice will not be available for viewing on AMS so it will be necessary to review CC IRPTR for the additional income information reported under the taxpayer's SSN. The notice provides the toll free number of 1-800-830-5084.

    Note:

    "Soft Notice″ means no adjustment will be made to the account unless taxpayer initiates adjustment.

  2. CP 2057, requests that the taxpayer review their records and if the income reported on their return is CORRECT to:

    • Not call or respond to the IRS in reference to this notice.

    • Contact the third party if the income was incorrectly reported to the IRS and request that the third party payer verify and correct their records.

    • If no action is taken expect to continue to have reporting problems if the income is not corrected before filing future returns.

  3. CP 2057, requests that the taxpayer review their records and if the income reported on their return is NOT CORRECT to:

    • File an Amended Return, Form 1040X.

    • Securely attach the Form 1040X behind a copy of the CP 2057 and to mail it the address on the CP 2057.

    Caution:

    Do not refer the case to AUR. Process the Form 1040X , see IRM 21.5.3, General Claims Procedures, for additional information for processing Form 1040X.

  4. See chart below for handling of calls received pertaining to the CP 2057.

    If the Taxpayer Calls and States: Response:
    The income on tax return they filed is correct.

    • Inform taxpayer to contact the third party payer stating the income reported to IRS is incorrect. Payer must correct their records if determined incorrect and submit corrected documentation to taxpayer and IRS.

    • If the taxpayer indicates a need to contact a W-2 payer, advise the taxpayer of different sources to obtain this information, Yellow Pages, the World Wide Web, directory assistance. If the taxpayer has tried these sources and failed, research CC IRPTR and provide the address if available

    • Record a history on AMS of the actions taken.
    The income on tax returns is not correct. Correct your tax account by submitting Form 1040X to amend the return. Securely attach the completed Form 1040X to a copy of the CP 2057 and send to the address on the CP 2057. Record a history on AMS of the actions taken.
    Taxpayer needs copy of tax return.

    • Taxpayer wants copy of the originally filed return inform taxpayer to submit Form 4506 and fee to address notated on form.

    • Taxpayer wants copy of filed return and does not need original return. Inform taxpayer requested transcript can be secured from WWW.IRS.GOV. If taxpayer does not have ability to secure from website see, IRM 21.2.3.4, Transcript Procedures.

    • Record a history on AMS of the actions taken.

    Taxpayer needs a Form 1040X. Direct taxpayer to call 1-800-829-3676 or go to WWW.IRS.GOV to secure form. Record a history on AMS of the actions taken.
    Taxpayer states did not bank with financial institution, did not work for employer, income is not taxpayer's, etc.,

    • Advise the taxpayer How To Report Identity Theft, see Exhibit IRM 21.3.4-40.

    • Never refer the taxpayer back to the employer/payer if there is any indication of identity theft.

    • Substantiation data can be accepted from the taxpayer or someone who has power of attorney for the taxpayer (per Form 2848, not Form 8821).

    • Record a history on AMS of the actions taken.

    Taxpayer is submitting Form 1040X and needs payment plan. Inform taxpayer to complete Form 9465 or a statement requesting payment plan detailing payment amount and due date of payment. Taxpayer can secure form from WWW.IRS.GOV or calling 1-800-829-3676. Record a history on AMS of the actions taken.

21.3.1.4.57  (10-01-2011)
CP 2000 Issued to Taxpayer to Request Verification for Unreported Income, Payments, or Credits

  1. A CP 2000, Issued to Taxpayer to Request Verification for Unreported Income, Payments, or Credits, is issued to notify taxpayer of a proposed change to tax liability because of income that is not identifiable or apparently not fully reported on the return and/or credits and deductions that appear overstated.

  2. When a CP 2000 is issued, the Automated Underreporter (AUR) function puts a control on the module. IDRS research shows:

    • A TC 922

    • An open IDRS control Base established to XX88002000 (XX is the Campus Location Code)

    • An underreporter process code of 55 or 57


    Note:

    The penalty explanation line on the CP 2000 is used only when the taxpayer owes a penalty.

    Note:

    If only the TC 922 (no process code) is on the account, do not refer case to AUR. Work following normal procedures.


21.3.1.4.58  (10-01-2012)
Status of Underreporter Cases

  1. When working accounts with AUR Involvement, it is necessary to research the account to determine where the account is in the AUR process. This can be determined by reviewing the Underreporter Process Codes listed under the Transaction Code (TC) 922 on the account. The status of an Underreporter case will be determined by the last process code posted. The definitions of the Underreporter Process Codes can be found in Chapter 8, Section 19 of Document 6209, IRS Processing Codes and Information, and in IRM 4.19.3-5, AUR Process Codes. Refer to the chart in paragraph 4 to determine if a case should be processed or referred to AUR.

    Note:

    If additional assistance is required, contact the appropriate Automated Underreporter (AUR) Coordinator. A listing is provided under the "Who/Where" tab (AUR Coordinatorson the Servicewide Electronic Research Program (SERP) home page. Do not share the telephone contact information with the taxpayer.

  2. When working phones: Review the account and determine the last processing code. Refer to the chart in paragraph 4 to determine if the call meets AUR criteria and should be transferred to AUR. If it is determined the AUR criteria has been met, the call can be transferred to the following AUR numbers:
    WI Taxpayer – The first two digits of the TC 922 DLN are 07, 08, 18 or 89.

    • #92241 English

    • #92242 Spanish


    SB Taxpayer – The first two digits of the TC 922 are 19, 28 or 29.

    • #92341 English

    • #92342 Spanish

    Note:

    The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation, advise taxpayer of the AUR hours of operation and to call the appropriate AUR toll free number listed below:

    • SBSE — 1-800-829-8310

    • W and I — 1-800-829-3009



  3. When working paper: All correspondence and Forms 1040X must be reviewed to determine if the response is related to the AUR issue or account change. Refer to the chart in paragraph 4 to determine if case meets AUR criteria. Referring the case back to the open control in AUR should be only for cases where the status allows for the referral and the case meets AUR criteria. If the change is for filing status, dependents, exemptions, claiming a credit, correcting math error etc., DO NOT refer case to AUR, follow normal adjustment procedures.. AUR will return all Forms 1040X and correspondence if it does not meet their criteria causing additional aging of the case. When working Form 1040X (only), if it is determined the case meets AUR transfer criteria, Input a TC 971 ac 015 to indicate the case has been forwarded to Underreporter.

  4. Once the status of the AUR issue is determined, use the following chart to determine the correct action to be taken.

    If Then
    The last process code (PC) is 01, 03 or 06

    1. The AUR issue or case is pending, and the taxpayer may or may not receive a notice. Do not refer the case to AUR.

    2. Respond to the taxpayer following normal procedures.

    • Tax year 2007, TC 922 and a process code string of 03, 16

    • Tax year 2008 and 2009, TC 922 and a process code string of 07, 19.

    		 There is no AUR case. This designates a soft notice, CP 2057. .

    1. If contact is a 1040X , do not refer to AUR. Work and respond to the taxpayer following normal procedures.

    2. If a phone contact and the taxpayer asks about the CP 2057, transfer the call to AUR:
      WI Taxpayer

      • #92241 English

      • #92242 Spanish


      SB Taxpayer

      • #92341 English

      • #92342 Spanish

      Note:

      All correspondence received by AM will be reviewed to determine if there is an AUR criteria involved. All situations other than AUR will be addressed by AM before routing to AUR to complete.

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time.
    Tax Year 2008 and 2009, a TC 922 and a process code string of 07, 49

    1. There is no AUR case or taxpayer contact. This designates a soft notice, CP 2057 was not mailed to the taxpayer. Do not refer the case to AUR.

    2. Continue to process the Form 1040X.
    The last process code is 10–14,15*,16, 17,18*, or 21–29

    Note:

    *PC 15/18: If the PC immediately preceding PC 15 or 18 is 01, 03, or 06 the case was closed without taxpayer contact.

    1. The AUR issue or case was closed, and taxpayer will not receive a notice. Do not refer case to Underreporter.

    2. Respond to the taxpayer following normal procedures.

    TC 922 but no process code is shown Underreporter does not have a case.

    1. Do not send a Form 4442 , Inquiry Referral.

    2. Work following normal procedures.
    The last process code is 35, 36, 38, 44, 46, 62–66, 72, 80, 82–86, Case was transferred to another area. Contact that area (to change information). Request a copy of the CP 2000 .
    The last process code is 09, 30, 34, 54, 55, 57–60, 75, 77–79, 81, 95, 97–99 Case is open in Underreporter.

    1. If this is a telephone contact and the taxpayer's Underreporter issue is beyond the scope of your training, transfer the call to AUR:
      WI Taxpayer (the first two digits of the TC 922 DLN are 07, 08, 18 or 89)

      • #92241 English

      • #92242 Spanish


      SB Taxpayer (the first two digits of the TC 922 are 19, 28 or 29)

      • #92341 English

      • #92342 Spanish

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time.

      Exception:

      If the contact is an International caller, create Form 4442, Inquiry Referral , hand write "IRM reference 21.3.1.4.57" in Section B and include the complete foreign address of the taxpayer. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .


      Caution:

      If the last process code is 09, the taxpayer has not yet been contacted by AUR. Only transfer calls to AUR if they are calling about the Underreporter issue.

    2. If this is a paper case, route the correspondence or Form 1040X to the campus where the case is assigned. The first two digits of the TC 922 DLN indicate where the case is assigned. Input a TC 971/015 to indicate case has been transferred to AUR (Forms 1040X only).

    Caution:

    If it can be determined that the AUR issue is not included, do not route the Form 1040X to AUR. If AUR returns the Form 1040X because it is unrelated to their issue, complete processing of Form 1040X

    The last process code is 15*, 18*, 39, 47, 48, 51, 52, 69, 70, 71, 73, 74, 89, 91, 92, 93 or 96

    Note:

    PC *15/18: If the PC immediately preceding PC 15 or PC 18 is other than 01, 03 or 06, the taxpayer was contacted by AUR.

    		 Case was worked and closed by Underreporter with no change to the tax liability and/or refundable credits.

    • Do not refer the case to AUR.

    • Respond to the taxpayer following normal procedures.
    The last process code is 20, 53, 67, 68, 87, 88, 90 or 94

    Note:

    The following are the definitions of three process codes. They are:
    67 - Fully agreed (CP 2000 Notice)
    87 - Fully agreed (Stat Notice)
    90 - Tax assessed by default

    		Case was worked and closed by Underreporter with an adjustment to tax liability and/or refundable credits.

    1. If this is a telephone contact for other than payment information or options, transfer the call to AUR:
      WI Taxpayer

      • #92241 English

      • #92242 Spanish


      SB Taxpayer

      • #92341 English

      • #92342 Spanish

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time.

    2. If the taxpayer files a claim or amended return requesting a refund or abatement of tax previously assessed by AUR , route the case to AUR at the campus where the case was worked. Input a TC 971/015 to indicate case has been transferred to AUR. Do not route cases to AUR that do not address or do not request reconsideration of the AUR assessment. Refer to Examples below of case types NOT to be sent to AUR. If the taxpayer is denying receipt or disagrees with the amount of the AUR identified income, route the correspondence or Form 1040X, Amended U.S. Individual Income Tax Return, to AUR at the campus where the case was worked. The first two digits of the TC 922 DLN indicate where the case is assigned. Refer to the AUR Addresses (Open Cases) for open cases and AUR Reconsideration Request Contact Information for closed cases.

    3. The Examples below are situations where the taxpayer is not denying the receipt or disagreeing with the amount of the AUR identified income. Do not route these types of cases to AUR. Other Category A (CAT-A) criteria may exist for the requested changes. Refer to Exhibit 21.5.3–2, Examination Criteria - General. These Examples are not intended to be all inclusive.

      Example:

      Form 1040X received with a Schedule C, reducing income through expense reporting and subsequently reducing self-employment tax.

      Example:

      Form 1040X received with Schedule D, adjusting the basis on the Underreport capital gain.

      Example:

      Form 1040X filed only to change filing status and/or add a dependent.

      Reminder:

      A TC 240 penalty assessed by AUR for substantial understatement of income must be adjusted when decreasing the previous AUR assessment. If the adjustment is not related to the AUR assessment, do not adjust the TC 240 penalty. Refer to IRM 20.1.5.8, IRC Section 6662(d): Substantial Understatement, for more information on calculating the penalty. Refer to IRM 20.1.5.3.2, Penalty Assessment, for information on adjusting the penalty.

      Note:

      If additional assistance is required, contact the appropriate AUR Coordinator. A listing is provided under the "Who/Where" tab on the SERP home page. Do not share the telephone contact information with the taxpayer.

21.3.1.4.59  (08-17-2010)
Resolving or Referring Underreporter Cases

  1. Explain reason for notice. Ask taxpayer to compare their records with income and withholding listed on the CP 2000. You can often resolve the discrepancy based on the taxpayers response.

  2. If you cannot resolve the discrepancy based on the taxpayers response, transfer the call to AUR:
    WI Taxpayer

    • #92241 English

    • #92242 Spanish


    SB Taxpayer

    • #92341 English

    • #92342 Spanish

    Note:

    Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time.

  3. If taxpayer requests a copy of their tax return, use the TDS system to provide a copy of the return per IRM 21.3.4.1.14.4Tax Return and Tax Account Transcript Requests. .

  4. If the taxpayer indicates a need to contact a W-2 payer, advise the taxpayer of different sources to obtain this information, Yellow Pages, the World Wide Web, directory assistance. If the taxpayer has tried these sources and failed, research IDRS using CC IRPTR and provide the address if available.

21.3.1.4.60  (08-17-2010)
Copies of CP 2000, CP 2501, 2893C Letter

  1. For copies of the CP 2000/2501/2893C , refer to table below.

    Caution:

    On jointly filed returns when the requestor is the secondary taxpayer and provided an address that is different from the primary's because of a divorce or separation- When sending a copy of the CP 2000, sanitize the primary's address from the letter to prevent inadvertent disclosure.

    Note:

    Users having access to Integrated Automation Technologies (IAT)/Accounts Management Services (AMS) may print and provide a copy of the CP 2000 and the CP 2501 to the taxpayer if the notice is for tax year 2003 or subsequent.

    Caution:

    When using IAT/AMS to provide the taxpayer with a copy of CP 2000 or CP 2501, review the notice date. If the taxpayer has not had enough time to receive the AUR notice, do not disclose any AUR notice information including the presence of the notice.


    If Then
    Taxpayer requests a copy of a CP 2000, CP 2501, or Letter 2893C,Underclaimed/Overclaimed Withholding Excess Social Security or Medicare Tax Closure.

    1. If this is a telephone contact, transfer the call to AUR:
      WI Taxpayer

      • #92241 English

      • #92242 Spanish


      SB Taxpayer

      • #92341 English

      • #92342 Spanish

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time

    2. If this is a paper case, route the correspondence or Form 1040X, Amended U.S. Individual Income Tax Return, to the campus where the case is assigned. The first two digits of the TC 922 DLN indicate where the case is assigned.

  2. Advise taxpayer to expect a reply within 60 days unless the call was transferred to the AUR transfer number.

21.3.1.4.61  (08-17-2010)
Underreporter Letters

  1. In addition to CP 2000, Underreporter uses other letters to request and gather information. If taxpayer indicates they received these letters, explain based on the following:

    • Letter 1802C— Used to notify taxpayer of conclusion of their Underreporter case. No response is expected.

    • Letter 2625C— Used to correspond with an employer/payer to clarify income from Form W-2 , Wage and Tax Statement, and the Form 1099 series. Ask employer/payer to complete form and return.

    • Letter 2626C — Used to correspond with taxpayer to obtain additional information or to provide further explanation subsequent to a CP 2000 or CP 2501 notice. A response is usually expected.

    • Letter 2627C— Used to obtain missing information when an incomplete Power of Attorney (POA) is submitted by taxpayer. A response is expected.

    • Letter 4314C — Used to inform taxpayer the case is not yet resolved. This is issued from AUR when another action is being taken on a case at the same time (e.g., when a letter to validate income or additional research is being conducted).

      Note:

      Assistors may see older cases (pre-2007) where Letter 2645C was used to inform the taxpayer the case is not yet resolved.

    • Letter 2893C— Used to notify taxpayer of adjustment due to Underclaimed or Overclaimed Withholding, Excess Social Security, or EITC.

  2. AUR sends CP 2005 to taxpayers to thank them for information and to inform them that AUR is closing the case.

  3. If taxpayer has questions about these notices, transfer the call to AUR:
    WI Taxpayer

    • #92241 English

    • #92242 Spanish


    SB Taxpayer

    • #92341 English

    • #92342 Spanish

    Note:

    Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time.

21.3.1.4.62  (08-17-2010)
Oral Statement

  1. AUR accepts oral statements for resolution of a number of issues. Refer to IRM 4.19.3.20.2, Telephone Responses.

    Caution:

    Many of these oral statements involve Official Use Only (OUO) information. Please be careful not to release OUO information to taxpayers.

  2. Transfer the call to AUR:
    WI Taxpayer

    • #92241 English

    • #92242 Spanish


    SB Taxpayer

    • #92341 English

    • #92342 Spanish

    Note:

    Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time.

  3. Oral statements are accepted from a designated third party only if taxpayer has completed the Authorization Statement on the CP 2501/ CP 2000 or submitted a valid Power of Attorney (POA).

21.3.1.4.63  (10-01-2011)
CP 2501 Pre-CP 2000 Contact Letter

  1. A CP 2501, Initial Contact to Resolve Discrepancy Between Income, Credits, and/or Deductions Claimed on Return and Those Reported by Payer, is an initial contact letter requesting additional information. In certain situations, issuance of a CP 2501 provides better customer service since it is an inquiry instead of a proposal of assessment.

    1. Explain why the notice was received. Ask taxpayer to compare their records with the payer information listed on the CP 2501. If taxpayer agrees with information on notice transfer the taxpayer to AUR.
      AUR Transfer Numbers:
      WI Taxpayer
      •#92241 English
      •#92242 Spanish
      SB Taxpayer
      •#92341 English
      • #92342 Spanish

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time.

    2. If taxpayer does not totally agree, they should respond as in , IRM 21.3.1.4.59 Resolving or Referring Underreporter Cases.

21.3.1.4.64  (10-01-2011)
AUR Special Handling

  1. Do not refer Tentative Carrybacks (TENTs,) Restricted Interest Claims (RINTs), payment tracers, or entity change only requests to AUR. Handle as follows:

    If And Then
    Correspondence relates to two different tax periods, only one of which relates to the AUR Program. You can separate issues by tax period 1. Photocopy the correspondence related to the URP issues.
    2. Route as appropriate.
    3. Work other issue or tax period following normal adjustment procedures.

21.3.1.4.65  (10-01-2002)
BMF Notices

  1. Information in this section applies to Business Master File (BMF) notices and other business notices. Each subsection presents an overview of a specific notice, general procedures for working the notice, and a reference to the IRM containing detailed procedures.

21.3.1.4.66  (10-01-2009)
CP 081 REFUND and RSED within Six Months

  1. A CP 081, We may have a refund for you, is issued to notify taxpayer the RSED is within 6 months of expiration. Titled "We May Have a Refund for You" , this notice informs the taxpayer that:

    • a return has not been filed

    • the time to claim an overpayment/credit is about to expire, and

    • a return/claim must be filed to claim the overpayment before the RSED.

    Note:

    Refer to IRM 25.12, Delinquent Return Refund Hold Program.

  2. Refer to IRM 25.6.1.8.4, Processing Original Delinquent Returns.

21.3.1.4.67  (01-08-2008)
CP 101 Math Error, Balance Due of $5 or More on Form 940

  1. A CP 101, Math Error, Balance Due of $5 or More on Form 940, is issued to notify taxpayer of an error on Form 940 and Form 940–EZ, Employer's Annual Federal Unemployment Tax (FUTA) Return, that resulted in a balance due. After researching IDRS, explain reason for math error. Follow actions in table in IRM 21.3.1.4.71, CP 112 Math Error, Overpayment of $1 or More on Forms 941, 941SS, 942, 943, 945.

21.3.1.4.68  (01-08-2008)
CP 102 Math Error, Balance Due of $5 or More on Forms 941, 941SS, 943, 944, 944SS, 945

  1. A CP 102, Math Error, Balance Due of $5 or More on Forms 941, 941SS, 943, 944, 944SS, 945, is issued to notify taxpayer of an error on Form 941, Employer's Quarterly Federal Tax Return , Form 941-SS , Employer's Quarterly Federal Tax Return American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands, Form 944, Employer's Annual Federal Tax Return, Form 943, Employer's Annual Tax Return for Agricultural Employees, or Form 945, Annual Return of Withheld Federal Income Tax that results in a balance due. For resolution, refer to table in IRM 21.3.1.4.71, CP 112 Math Error, Overpayment of $1 or More on Forms 941, 941SS, 942, 943, 945.

21.3.1.4.69  (10-01-2006)
CP 108 Problem With Your Federal Tax Deposit (FTD)

  1. A CP 108, Problem With Your Federal Tax Deposit (FTD), is issued to notify taxpayer when Service Center Recognition Image Processing System (SCRIPS) processing does not find the type of tax and/or tax period on the deposit coupon or cannot be determined on an Electronic Federal Tax Payment System (EFTPS) payment.

  2. This notice advises taxpayer where the credit has been posted and provides a tear-off portion to be returned if payment was applied incorrectly. Refer to IRM 21.7.11.4.1, CP 108 - Error on FTD Coupon/EFTPS Payment, for resolution.

21.3.1.4.70  (10-01-2002)
CP 111 Math Error, Overpayment of $1 or More on Form 940

  1. A CP 111, Math Error, Overpayment of $1 or More on Form 940, is issued to notify taxpayer of an error on the Forms 940 and 940–EZ, Employer's Annual Federal Unemployment Tax (FUTA) Return, resulting in a change in the amount of the refund. For resolution, of the CP 112 see IRM 21.3.1.4.71 CP 112 Math Error, Overpayment of $1 or more on Forms 941, 941SS, 943 and 945.


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