21.3.12  Accounts Management Balance Due Telephone Contacts (Cont. 1)

21.3.12.5 
Taxpayer Calling About An Existing or Defaulted Installment Agreement

21.3.12.5.2  (10-01-2014)
Taxpayer Problems With and Requested Changes to DDIAs

  1. This sub-section provides guidance for addressing taxpayer problems with a DDIA as well as taxpayer requests to change a DDIA. If in regards to an existing DDIA, the taxpayer:

    • requests a change to a payment amount or date, request a skip or discontinue the DDIA, follow procedures in (2), Changes to a DDIA Payment, below

    • reports a problem in debiting an account, multiple payments or required payments not deducted, follow procedures in (3), Problems with a DDIA, below.

    • requests a change to the financial institution or account information, follow procedures in (4), Change to the financial institution or account information, below.

    Note:

    For inquiries on a pre-assessed DDIA and the module is still unassessed, refer to IRM 5.19.1.5.4.14(9), DDIA.

  2. Changes to a DDIA Payment- AM cannot change the terms of a DDIA. All requests for a revision to a DDIA must be made a minimum of 10 business days prior to the payment date for the change to be effective. If the change request is received within ten days of the payment date, advise the taxpayer the change will not take effect until the following month. If the taxpayer requests any changes listed in (a) through (d) below, a Form 4442 Inquiry Referral needs to be completed and faxed to the campus having jurisdiction of the account. The referral should clearly state the nature of the change along with other needed information. The following change requests require the Form 4442:

    1. Requests a payment amount change

    2. Requests a date change

    3. The taxpayer requests a "skip"

      Note:

      Skip criteria must be met, IRM 21.3.12.5.4, Request to Allow a Payment Skip.

      Caution:

      Once the payment request is transmitted to the bank, we cannot stop the payment. If on CC EFTAD, the payment status, literal "STAT", is "A", advise taxpayer that IRS cannot stop the payment and that they should contact their bank to stop the payment.

    4. The taxpayer requests to discontinue the DDIA.

    Note:

    Taxpayers can use the Online Payment Agreement Application (OPA) on www.irs.gov to request a payment amount change or payment date change. If taxpayer agrees to use the OPA system to receive immediate confirmation, a Form 4442 should not be prepared.

  3. Problems with a DDIA- If the taxpayer states there is a problem with the DDIA, CC EFTAD should be used to research the direct debit payments and should be reviewed prior to sending the referral. Problems can include:

    1. An error in debiting the taxpayer's account

    2. Multiple payments deducted from the taxpayer's account in a single month

    3. Required payments not deducted from the designated account

    Prepare Form 4442, Inquiry Referral, and fax to the CSCO, DDIA liaisons at the campus having jurisdiction of the taxpayer account. Forward all pertinent information including:

    1. Nature of the problem

    2. Taxpayer telephone numbers

    3. Both routing number and account number if available

    4. Best time to call

    For additional information see IRM 5.19.1.5.4.14.2, Taxpayer Problems With DDIA.

    Note:

    If the taxpayer states they have incurred bank fees because of a DDIA processing error by IRS, advise the taxpayer to complete and submit Form 8546, Claim for Reimbursement of Bank Charges.

  4. Change to the financial institution or account information- IMPORTANT: If the taxpayer requests to change financial institutions, routing number or account number, a new Form 433-D is needed with original signatures to request the change.

    1. If a new updated Form 433-D and voided check or a new Form 433-D containing the new banking information is received via fax, create a Form 4442 and fax along with the Form 433-D, to CSCO within 24 hours. See SERP Who/Where Tab DDIA Liaisons. Inform the taxpayer their inquiry is being faxed to the campus with jurisdiction over their DDIA.

    2. If the taxpayer can not fax the new Form 433-D, provide them with the correct mailing address. See SERP Who/Where Tab DDIA Liaisons.

    3. If the taxpayer has closed or will be closing the account prior to the next payment:
      a. Prepare a Form 4442. Include the bank routing number and account number on the referral.
      b. Fax the form to the DDIA Liaison at the campus having jurisdiction of the account within 24 hours. See SERP Who/Where Tab DDIA Liaisons

    Reminder:

    The CSCO employee will make contacts with the taxpayer IF additional information is needed or there are problems with the request; CSCO must expedite Form 4442, Inquiry Referral, regarding the DDIA to avoid erroneous withdrawals or defaults.≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

21.3.12.5.3  (04-23-2014)
Taxpayer Request A Change In Payment Date - Regular Installment Agreement

  1. If the taxpayer's request for change in payment date and does not require a payment skip and still meet streamline criteria, no managerial approval is required.

  2. Payment date changes can be made by SIA employees on NSIA agreements.

  3. Use command code IAGRE to change the payment date. See IRM 5.19.1-9, IDRS Input of IAs, CC IAREV.

  4. If the taxpayer wants to change the payment date on a Direct Debit Installment Agreement (DDIA), see IRM 21.3.12.5.2, Taxpayer Problems With and Requested Changes to DDIAs.

    Note:

    Do not charge a user fee if the only action taken is to change a payment date.

  5. Taxpayers can use the Online Payment Agreement Application (OPA) on www.irs.gov to request a payment date change.

  6. Refer to IRM 5.19.1.5.4.22, Revise/Reinstatement of IAs, for more information.

21.3.12.5.4  (07-01-2014)
Request To Allow A Payment Skip

  1. Currently if a customer fails to make an Installment Agreement Payment, the system grants him 1 automatic skip (30 days). Effective February 9, 2009, for IMF cases ONLY, programming was put into place that will give the customer an additional 30 days after his automatic skip, before he goes to status 64 (default). At the beginning of this second 30 days, the system will generate a new Letter 4458C, Second Installment Agreement Skip, and a TC 971 ac 646 to CC ENMOD. This letter acknowledges that the customer may be having difficulty making his payments and encourages him to contact us to possibly re-negotiate his agreement. The customer can get a skip anytime during a rolling 12-month period. The skips can be either consecutive or non-consecutive.

    Caution:

    If the taxpayer requests to skip payment on a DDIA agreement IRM 21.3.12.5.2, Taxpayer Problems With and Requested Changes to DDIAs. Do NOT revise the DDIA using CC IAREV; ONLY CSCO employees input revisions to DDIA agreements.

  2. Check CC IADIS to see if both skips have been used

    • If AGRD SKIP is "ON" the skip is allowed. Inform the taxpayer you are allowing the skip and they must make the next month's payment as scheduled.

    • If only the first skip has been used, advise the caller they can skip the payment.

    • If AGRD SKIP is blank then there is no skip on the account, review IDRS for previous skips before allowing skip.

    • If both AGRD SKIPs have been used, follow the procedures in paragraph 3.

  3. Use the following chart to determine when to allow a skip when the Installment Agreement has not defaulted:

    If And Then
    All the skips have NOT been used The taxpayer requests to skip a payment
    1. Allow the skipped payment request.

    2. Inform the taxpayer you are allowing the skip and they must make the next month's payment as scheduled.

    The skips have been used The taxpayer requests to delay or skip a payment due to a reasonable, unexpected, or emergency financial need
    OR
    the taxpayer requests a one time decreased payment amount due to a change in financial condition
    1. Allow the skip.

    2. If in Status 60, turn on the skip indicator.

    3. Inform the taxpayer you are allowing the skip and they must make the next month's payment as scheduled.

    4. If already defaulted because payment is already late, reinstate.

    5. Input AMS comments for why the skip is required.

    6. If this taxpayer has previously two skipped payments within the past twelve months, manager or manager designee approval is required.

21.3.12.5.5  (10-01-2014)
Adding a New Module to an Existing or Defaulted Agreement

  1. Determine if the taxpayer is in compliance, see IRM 21.3.12.2.1, Full Compliance Check (IMF and BMF). Advise the taxpayer the request to add additional liability(s) or a change to the existing installment agreement due to default may not be made until the reason for non-compliance is corrected.

  2. These procedure are for IMF, Out of Business and BMF income tax ONLY taxpayers. Determine if the payments need to be increased due to the adding of the new module to have the agreement still meet streamline criteria.

  3. If the only module(s) the taxpayer wants to add to the existing agreement is for the Shared responsbility Payment (SRP) on MFT 35, follow procedures in IRM 21.3.12.5.10, Existing Agreements With a New Individual Shared Responsibility Payment Module.

  4. If an IMF taxpayer is adding a new module, determine if making Estimated Tax Payments was a condition in setting up the original agreement. If the account is annotated "ESP required" and the taxpayer owes because s/he did not make the required ES payments or is not making the current year ES payments, do not add module. If the taxpayer meets pending IA criteria follow IRM 21.3.12.4.4.1, Pending Installment Agreement Criteria and IRM 5.19.1.5.4.10, Rejected IA Independent Review. If the taxpayer has not met pending IA criteria advise the caller they must become current with the ES payments before the new module can be added to the IA.

  5. If taxpayer is requesting to add an assessed or unassessed module to a DDIA, see IRM 21.3.12.5.8, Taxpayer Requests Revision to or Reinstatement of a Direct Debit Installment Agreement (DDIA).

  6. For a Payroll Deduction Agreement see, IRM 21.3.12.5.9, Taxpayer Requests Revision or Reinstatement to a Payroll Deduction Installment Agreement (PDIA).

  7. For BMF in−business trust fund balances, follow procedures in IRM 21.3.12.4.7, In-Business Trust Fund (IBTF) Express Agreement Criteria. When adding a new module to Express agreements the new balance must full pay the aggregate balance plus accruals within the original 24 months.

  8. Input the agreement using CC IAGRE which will default to the IAREV screen. Input IA with appropriate changes if necessary. Advise taxpayer of the reinstatement fee, if applicable per IRM 21.3.12.4.8(4), User Fee. Send Letter 2273C, Installment Agreement Accepted - Terms Explained, Letter 3127C, Revision/Reinstatement to Installment Agreement and User Fee Adjustments, Letter 3217C , an automated letter, Installment Agreement Accepted; Terms Explained, or other letter that best describes the situation to the taxpayer and advise them we added the new liability. Refer to IRM 5.19.1-9(17), IDRS Input of IAs, CC IAREV, to determine the entry for the payment skip (″AGRD SKIP″) field.

  9. If the new liability is not assessed (Underreporter , audit , CAWR , or FUTA assessment or current year/tax period return is filed but has not yet posted) see IRM 21.3.12.4.5.1(3), Pre-assessed Installment Agreements (IAPND) and Unassessed Modules.

  10. If the payment agreement proposal, including the new module(s), does not meet streamlined criteria, see IRM 21.3.12.4.6, Proposal Does Not Meet Guaranteed or Streamlined Installment Agreement Criteria.

    Note:

    If a transfer to NSIA is necessary, advise taxpayer to have all necessary financial information available.

  11. If it is determined the IMF taxpayer is attempting to forestall or avoid collection procedures, SIA will transfer to NSIA. NSIA will make determination to submit to manager if taxpayer is forestalling or avoiding collection procedures. BMF will create Form 4442 and forward to ACS for review. Forestall tactics can be determined by:

    1. Multiple MFT 55 for IA fees

    2. IADIS shows several reinstatement of IAs

    3. The taxpayer repeatedly defaults on their IA and requests a new agreement or reinstatement without any change in circumstances.

    4. TC 971 ac 043 has posted on IDRS more than two times

    5. The taxpayer request was rejected and they submit a second request without addressing the changes, information, tax returns, etc.

    6. The request is unreasonable and does not reflect the taxpayer's ability to pay, or nominal amount is requested ($1 per month), or made without reference to their true ability to pay with no financial information supporting the request.

      Example:

      The taxpayer continuously makes none, one or two payments and defaults, subsequently requesting reinstatement or taxpayer continues to add new modules but fails to correct federal withholding or make estimated quarterly deposits.

    7. Because the agreement request is not valid, it is unnecessary to reject the request. Because it is not rejected, neither an independent review nor appeal (CAP) of a rejection is appropriate. Such appeals will not be accepted. Submit request to manager for approval.

      Note:

      NSIA personnel should follow IRM 5.19.1.5.4.7, Pending IA Criteria, and IRM 5.19.1.5.4.9(3), IA Rejection Criteria.

21.3.12.5.6  (04-23-2014)
Taxpayer Requests A Reduction in Payment Amount

  1. If the taxpayer is requesting a reduction in the payment amount:

    • Determine if the aggregate assessed balance will still be full paid within the 72 months.

    • Ensure all CSEDs are protected. Use command code ICOMP or Decision IA to verify that the new payment amount will full pay the account before the CSED.

  2. If the reduced payment amount proposed still meets streamline criteria and the account is in collection status 60 or 63:

    1. Allow the decrease in payment.

    2. Input the change using CC IAGRE which will default to IAREV.

    3. Waive the restructuring fee.

    4. Do not reset the payment skip indicator if already used.

    5. Send Letter 3127C, Revision/Reinstatement to Installment Agreement, or other letter that best describes the situation, confirming the payment amount change.

  3. If the reduced payment agreement proposal is for BMF accounts:

    1. Determine if the agreement still meets streamline or for IBTF Express agreements. The reduction in the payment amount for IBTF Express agreements must full pay the aggregate balance plus accruals within the 24 months of the original installment agreement.

    2. If the account does not qualify as a IBTF, advise taxpayer you are unable to change payment amount.

    3. If unable to make the payment reduction, provide the taxpayer with Form 433–B , Collection Information Statement for Businesses.

    4. Advise taxpayer to return completed Form 433–B with all documentation as noted on form along with proposed payment amount and payment date within 30 days.

    5. Document due date for Form 433–B , proposed payment amount and date.

  4. If the reduced payment agreement proposal does not meet streamlined criteria, see IRM 21.3.12.4.6, Proposal Does Not Meet Guaranteed or Streamlined Installment Agreement Criteria, for IMF accounts.

  5. Taxpayers can use the Online Payment Agreement Application (OPA) on www.irs.gov to request a payment reduction.

21.3.12.5.7  (10-01-2014)
Taxpayer Requesting Reinstatement of Defaulted Installment Agreement

  1. When an installment agreement is defaulted (Status 64), a CP 523, Installment Agreement Default Notice, is issued to the taxpayer. Review CC IADIS to determine the reason for default.

  2. IAs are terminated for various reasons:

    • Missed payments (usually the skipped payment and a second missed payment)

    • New liabilities are not paid when due

    • Bad check - The bad check will cause an immediate default. The skip will not be used.

    • Taxpayer failed to provide financial update when requested - Collections will send out a request for financial information if it appears the taxpayers financial situation has changed. If the taxpayer fails to provide the information the IA will be defaulted.

  3. If the default was an IRS error, you may reinstate the IA even when the normal authority level is exceeded. Correcting account errors when the default was a mistake is not subject to dollar authority criteria.

  4. If the taxpayer requests a Full Pay within 60 or 120 days agreement for a suspended installment agreement in status 61, 63 or 64, deny the request and inform them a full pay agreement does not extend their time for collection appeal rights. Remind the taxpayer of their right to appeal IRS collection actions as outlined in Pub 1660, Collection Appeals Rights. Refer to IRM 21.3.12.6.7.3.1, Collection Appeals Program (CAP), if appropriate.

  5. Prior to reinstating the agreement, discuss the reason for default. If the account history shows a multiple defaults over the last 12–18 months, determine if the taxpayer needs to modify the agreement. This could include:

    1. Lowering the payments: If the taxpayer needs the payments lower, determine the minimum payment needed to remain in a streamlined agreement. If the taxpayer still can not make the minimum, advise the taxpayer s/he can be transferred to NSIA but must provide financial information. Follow normal NSIA transfer procedures in IRM 21.3.12.2(3), Balance Due Research.

    2. Determine if the taxpayer may need to be placed in CNC. See IRM 21.3.12.4.12, Taxpayer Cannot Make Payments- IMF Accounts.

    3. Determine if the taxpayer is attempting to forestall or avoid collection procedures. For example, the taxpayer has defaulted more than once and never made a payment. See paragraph (15) below.

  6. If the request for reinstatement falls under streamlined authority and the taxpayer is able to make payments:

    1. Reinstate the agreement.

    2. Advise taxpayer of the amount of the user fee.

    3. Send letter confirming reinstatement of the agreement.

  7. If the request for reinstatement does not fall under streamlined authority, follow procedures in IRM 21.3.12.4.6, Proposal Does Not Meet Guaranteed or Streamlined installment Agreement Criteria.

  8. If the taxpayer can correct the reason for default within 45 days of notice date (i.e., make up missed payment, or has paid the new balance in full) the IA can be reinstated regardless of unfiled returns or CSED issues. The computer will reinstate the agreement automatically if the cause of the default has been corrected within the 45 days. This does not include IAs that have defaulted for a bad check. If the taxpayer calls within the 45 day time frame and the agreement can be reinstated, input the agreement. Advise the caller of the user fee. Do Not allow another skip on the reinstatement unless the account left status 6X and the taxpayer is negotiating a new IA.

    Note:

    If the IA defaulted due to a bounced check, taxpayer should send a replacement check. Encourage the taxpayer to use IRS Direct Pay to submit payment. See IRM 21.2.1.48.1, IRS Direct Pay. The IA will not automatically reinstate when payment is received. Reinstate the installment agreement.

  9. If the taxpayer is unable to correct reason for default within 45 day criteria the IA does not have to be reinstated if there are unfiled returns or a CSED issue. If the taxpayer can not correct the reason for default the service has the right to reject the request for reinstatement if rejection criteria exists. If it is determined the account should be reinstated, reinstate the agreement and advise the caller of the $50 user fee. If the account is no longer in status 6X, the original user fee will be charged to reinstate the agreement and the skip will be allowed. Refer to the If...And...Then table in IRM 5.19.1.5.4.22(6), Revision/Reinstatement of IAs, for additional information on reinstatement criteria and when to charge the user fee.

  10. If a PDIA is being reinstated see IRM 21.3.12.5.9, Taxpayer Requests Revision or Reinstatement to a Payroll Deduction Installment Agreement (PDIA).

  11. BMF- If the taxpayer had a previous IBTF Express Agreement

    If And Then
    Aggregate unpaid balance of assessment is under $10,000 that defaulted or was terminated
    1. The taxpayer re-qualifies for an agreement under the IBTF Express Agreement guidelines

    2. The CSED is protected

    3. Taxpayers owing less than $10,000 are requesting the option of a direct debit payment. See IRM 5.19.1.5.4.14, DDIA.

    Reinstatement of a new agreement may be granted immediately.
    The taxpayer had a previous IBTF Express Agreement with an aggregated unpaid balance of assessment between $10,000 and $25,000 The CP 523 was issued and the account is in status 64 or status 22 Do not allow a reinstatement or new agreement. Accelerate the case to the field:
    1. Advise taxpayer that they are being assigned for field contact by a revenue officer.

    2. Notate caller's name and position on AMS and proposal exceeds your agreement authority.

    3. If in status 64, input STAUP 22 00.

    4. Input ASGNB 6501.

      The CP 523, Installment Agreement Default Notice, has not been issued and the account is in any status other than status 64 or status 22 A reinstatement of a new agreement may be granted.
  12. Determine on reinstatements and revisions if the user fee needs to be charged. See IRM 21.3.12.4.8, User Fee.

  13. If the request for reinstatement does not meet streamlined installment agreement criteria, follow the procedures in IRM 21.3.12.4.6, Proposal Does Not Meet Guaranteed or Streamlined installment Agreement Criteria.

  14. If the taxpayer is unable to make payments, follow the procedures in IRM 21.3.12.4.12, Taxpayer Cannot Make Payments - IMF Accounts.

  15. If it is determined the IMF taxpayer is attempting to forestall or avoid collection procedures (SIA will transfer to NSIA). NSIA will make determination to submit to manager if taxpayer is forestalling or avoiding collection procedures. BMF will create Form 4442 and forward to ACS for review. Avoidance tactics can be determined by:

    1. Multiple MFT 55 Installment Agreement fees.

    2. IADIS shows several reinstatements of Installment Agreement.

    3. The Taxpayer repeatedly defaults on their Installment Agreement and requests a new agreement or reinstatement without any change in circumstances.

    4. TC 971 AC 043 has posted on IDRS more than two times.

    5. The taxpayer request was rejected and they submit a second request without addressing the changes, information, tax returns, etc.

    6. The request is unreasonable and does not reflect the taxpayer's ability to pay, or nominal amount is requested ($1 per month), or made without reference to their true ability to pay with no financial information supporting the request.

      Example:

      The taxpayer continuously makes none, one or two payments and defaults, subsequently requesting reinstatement or taxpayer continues to add new modules but fails to correct federal withholding or make estimated quarterly deposits.

      Note:

      NSIA personnel should follow IRM 5.19.1.5.4.9(3), IA Rejection Criteria.

    7. Because the agreement request is not valid, it is unnecessary to reject the request. Because the requested IA is not rejected, neither an independent review nor appeal (CAP) of a rejection are appropriate. Such appeals will not be accepted by either party. Submit request to manager for approval and notation on AMS.

21.3.12.5.8  (10-01-2014)
Taxpayer Requests Revision to or Reinstatement of a Direct Debit Installment Agreement (DDIA)

  1. Any subsequent revisions to a DDIA can only be input through IDRS by the receiving CSCO site. Taxpayers can use the Online Payment Agreement (OPA) application to revise a payment date or payment amount if the agreement is not defaulted. If you receive a request for a change or reinstatement of DDIA, prepare Form 4442 and fax it to the Campus DDIA Liaison (Andover, Atlanta or Kansas City for W & I; Brookhaven, Memphis, Ogden and Philadelphia for SB/SE ) at the campus having jurisdiction of the taxpayer account within 24 hours. Taxpayer must be informed if the DDIA is reinstated there is a fee of $50. If the request is for a change in payment date, a change in payment amount, payment skip or a termination of a DDIA, follow procedures in IRM 21.3.12.5.2(2), Taxpayer Problems with and Requested Changes to DDIAs.

  2. If the taxpayer is requesting a revision to financial institutions, routing number or account number, an original signature requesting the change is required:

    • Secure a new Form 433–D with a new signature and a voided check or routing and account number. Notate "REVISED DDIA" at top of form.

    • Inform the taxpayer he/she will receive a letter of confirmation from CSCO once the DDIA has been converted to the new bank account

    • Prepare Form 4442, Inquiry Referral, and fax within 24 hours.

      Note:

      If taxpayer is unable to fax the DDIA request, then send the taxpayer a Form 433-D, Installment Agreement with correspondence Letter 2273C to complete, sign and appropriate CSCO return address. Create and forward Form 4442 with new bank account and routing number to CSCO.

  3. Inform the taxpayer, if form is received during phone contact, their inquiry is being faxed to the campus with jurisdiction over their DDIA (Andover, Atlanta, or Kansas City for W & I; Brookhaven, Memphis, Ogden and Philadelphia for SB/SE). If additional information is needed the receiving campus will contact the taxpayer. Inform the taxpayer their inquiry will be processed with in 72 hours (3 business days) from the date received. The time frame for contact is only for the initial referral to CSCO for DDIA. Taxpayer should receive contact information for assigned CSCO site upon receipt of correspondence letter from CSCO.

  4. Refer to IRM 21.3.12.5.2, Taxpayer Problems With and Requested Changes to DDIAs, for more information.

21.3.12.5.9  (10-18-2012)
Taxpayer Requests Revision or Reinstatement to a Payroll Deduction Installment Agreement (PDIA)

  1. Taxpayers, who are wage earners, can voluntarily enter into a Payroll Deduction Installment Agreement (PDIA) to satisfy a outstanding liability. The taxpayer can stop a payroll agreement at any time but would then have to make payments themselves to maintain the agreement.

  2. If the taxpayer's account is full paid (Status 12) but the employer is still sending payments, notify the employer the installment agreement is full paid with Letter 2571C, To Employer: Discontinue/Adjust Payroll Deduction.

  3. If the taxpayer requests a revision to a PDIA for a change to the payment amount, send Form 2159, Payroll Deduction Agreement to the taxpayer. The agreement should not be changed on IDRS until the Form 2159 is received. Ensure that the new payment amount still meets streamlined criteria.

  4. If taxpayer is only adding a new liability and the payment amount and date remain the same an updated Form 2159 is not needed. Send the employer Letter 2571C informing them of the new balance. If adding the new liability increases the payment amount, a new Form 2159 is needed. Input the agreement and advise the taxpayer s/he will need to make the payments until the new Form 2159 is received. Advise the caller of the reinstatement fee.

  5. If the taxpayer is only requesting a payment date change input the change. When inputting the change on the IAREV screen, ensure the employer information is still present at the bottom of the screen. Advise the taxpayer to notify their employer of the payment date change. If the information is present, then change the payment date. If it is not present, change the date but advise the caller to submit a new Form 2159. Advise the caller of the reinstatement fee.

    Reminder:

    Do not change the ALN. It must be left as "11" for the employer information to stay on the account.

  6. If the agreement is in default due to insufficient payments, research the account to determine if the payments are received and posted to the wrong year or not posting to the taxpayer's account.

    If Then
    The PDIA is defaulted due to non-receipt of payments
    1. Reinstate the agreement, if the employer information is on the IAREV screen a new Form 2159 is not needed.

    2. Ask the taxpayer if the payments are still being taken from their check.

    3. If the payments are still being sent, research IDRS to determine if payments can be located. If they cannot be located, the employer will need to provide a copy of the front and back of the cancelled check used to make the payment(s) in question.

    4. Advise the taxpayer that the checks need to be annotated with their SSN for correct posting.

    5. If the payment(s) are located, move the payment(s). Waive the user fee.

    6. If the payments are not being sent, reinstate the IA as a regular IA and advise the taxpayer to resubmit the Form 2159. The taxpayer will have to make the payments until the employer begins withholding the payment and submits it to the service.

    .
    The IA has been defaulted due to IRS error

    Example:

    Payments are posted in wrong year.

    1. As long as the conditions of the agreement are the same, reinstate the agreement.

    2. Take the account actions to correct the situation.

    3. Waive the user fee.

  7. When reinstating a PDIA, suppress the skip indicator and review notices.

  8. If a taxpayer who is currently on a Payroll Deduction Agreement requests to convert their agreement to a regular IA, allow the request. Re-input the agreement as a regular IA. Issue Letter 2571C, To Employer: Discontinue/Adjust Payroll Deduction, to the employer.

  9. Determine on PDIA reinstatements and revisions if the user fee needs to be charged. See IRM 21.3.12.4.8, User Fee.

21.3.12.5.10  (10-01-2014)
Existing Agreements With a New Individual Shared Responsibility Payment Module

  1. Existing installment agreements will not default due to a new balance due for an individual shared responsibility payment (SRP).

  2. For taxpayer contacts with an existing agreement and a new SRP assessment on MFT 35 that is not included in the agreement, determine if the taxpayer wants the MFT 35 balance added to the agreement.

    • If yes and the new agreement meets streamlined criteria, input CC IAGRE, which will default to the IAREV screen, to include the MFT 35 module. Input the agreement with appropriate changes as necessary and waive the revision fee. Send Letter 3127C or other letter that best describes the situation.

    • If yes but the new agreement does not meet streamlined criteria and the taxpayer cannot increase the monthly payment amount to get within streamlined criteria, advise the taxpayer that the agreement proposal is being referred for independent review. Follow procedures in IRM 21.3.12.4.4.1(4), Pending Installment Agreement Criteria.

    • If no, document AMS refer for independent review. Follow procedures in IRM 21.3.12.4.4.1(4), Pending Installment Agreement Criteria.

21.3.12.6  (10-17-2011)
Accounts Requiring Special Handling

  1. This section contains procedures for accounts that may require you to transfer or refer the call. These accounts include Status 22, Status 26, bankruptcy, Offer In Compromise (OIC), Non-Master File, levy release, lien release, federal payment levy program (FPLP), Manually Monitored Installment Agreements and other situations that require special case processing. Full Compliance, Cause and Cure are not necessary for transfer of contact.

  2. If CC SUMRY contains one or more of the following situations or module statuses, the account requires special handling and may require you to transfer or refer the account to another function. Follow the specific instructions below for each status. Notate all information on AMS or IDRS if AMS is not available.

21.3.12.6.1  (07-09-2013)
Status 22 Modules

  1. If one or more modules are in Status 22 on IDRS (CC SUMRY/TXMOD), see (2) below and as appropriate transfer the call to either W & I ACS or SB/SE ACS depending on the BOD of the account.

    Exception:

    Transfer Status 22 accounts with a FERDI indicator to Jacksonville ACS. See IRM 5.19.18.2(3), Identifying FERDI Cases, for how to identify FERDI accounts.

    Use the Telephone Transfer Guide to obtain the transfer phone number. Full compliance check and cause and cure does not need to be done as ACS will complete this research. If unable to transfer give the ACS phone numbers: W & I - 1-800-829-7650 or SB/SE - 1-800-829-3903: Advise the taxpayer to call as soon as possible Monday through Friday from 8:00 AM to 8:00 PM, local time. Annotate AMS, no IDRS history is needed.

    Note:

    If there is no IDRS module in Status 22, but there is a master file Status 22 module, do not transfer the call to ACS. Generally, this will occur when the module has a TC 530 with no subsequent TC 531 or 532. In these cases, follow the balance due procedures described in IRM 21.3.12.4, Determine The Earliest The Taxpayer Can Full Pay.

  2. REMINDER - Address all non-ACS (non-collection) related account issues before transferring to ACS. Only transfer a call to ACS if the taxpayer has questions or issues related to the collection of the balance due. If a taxpayer can not or does not want to be transferred to ACS, refer to (3) below.

    If And Then
    The taxpayer agrees with the balance due The purpose of the call is to request a payment arrangement or prevent collections actions, e.g., levy or lien Offer to transfer the call to ACS.
    The taxpayer does not agree with the amount of the balance due The unagreed balance due issue can be resolved on the phone, e.g., math error, payment tracer, penalty abatement request, etc., Complete the account actions following normal procedures. If a balance due still remains, refer to the last row of this table.
    The taxpayer does not agree with the amount of the balance due The balance due issue can not be resolved on the call, e.g., Exam reconsideration, AUR issue, TDI, etc Offer to transfer the call to ACS.
    All account actions have been completed, e.g., math error adjustment, credit transfer, transcript order, etc. A balance due still exists Advise the taxpayer you do not have authority to initiate a payment arrangement or prevent collection actions, e.g., levy or lien, and offer to transfer the call to ACS.
  3. If you are unable to transfer the call to ACS, take the following actions:

    1. Give the taxpayer the appropriate ACS telephone number W & I - 1-800-829-7650 or SB/SE - 1-800-829-3903. Annotate AMS, no IDRS history is needed.

    2. Advise the taxpayer to call as soon as possible Monday through Friday from 8:00 AM to 8:00 PM, local time.

    3. If the taxpayer's request for an IA meets pending criteria, input TC 971 ac 043, using CC REQ77.

21.3.12.6.2  (03-05-2014)
Status 26 Modules

  1. Status 26 usually means that a Revenue Officer (RO) has been assigned to the account. However, there are two exceptions in which this is not the case. In either of the two cases described below, the account is not assigned to an RO and should not be referred to an RO.

  2. There are two exceptions where the status 26 accounts are not assigned to a revenue officer:

    • Status 26 with a collection assignment number ending in 8000. Collection assignment numbers can be located on CC TXMOD by the literal "CL-ASGMT>" and on CC ENMOD by the literal "COLL-ASGMT>" . These cases are open in SFR. See IRM 21.3.12.6.2.2, The Collection Assignment Number (TXMOD) is 8000.

    • Status 26 when there is a Manually Monitored Installment Agreement (MMIA). The collection assignment number will be 35XX6YYY with a history item on ENMOD identifying it as a MMIA. See IRM 21.3.12.6.2.1, Collection Assignment Number (TXMOD) is 35XX6YYY.

21.3.12.6.2.1  (10-01-2012)
Collection Assignment Number (TXMOD) is 35XX6YYY

  1. If the collection assignment number on CC TXMOD is 35XX6YYY (XX identifies the location and YYY is the ASGNI that begins with 6), the account contains a Manually Monitored Installment Agreement (MMIA) or a continuous levy that is manually monitored by Centralized Case Processing (CCP).

  2. If the taxpayer requests reduction in payment amount or taxpayer requests to add a new liability on a MMIA:

    1. If new proposal meets Streamlined Installment Agreement Criteria, prepare Form 4442, Inquiry Referral, indicating the new IA terms.

      Note:

      The Form 4442 cannot be faxed. It must be sent via Form 3210, Document Transmittal, to:
      IRS
      19104 Mail Stop 5-E04,117
      2970 Market Street
      Philadelphia, PA 19104

    2. If the new proposal does not meet Streamlined Installment Agreement Criteria and the taxpayer has financial information available (income and necessary living expenses), transfer the call to the non-streamlined IA application at the number in the Telephone Transfer Guide.

    3. If the new proposal does not meet Streamlined IA and the taxpayer does not have financial information available (income and necessary living expenses), provide Form 433-F to the taxpayer and advise them to call back as soon as it is completed. W & I taxpayer call 1-800-829-0922 and SB/SE taxpayers call 1-800-829-8374.

    4. BMF accounts will create Form 4442 and forward to CSCO.

  3. If the secondary taxpayer can no longer make payments, prepare Form 4442 indicating the secondary taxpayer can no longer make payments.

    Note:

    The Form 4442 can not be faxed. It must be mailed with Form 3210 to:
    IRS
    19104 Mail Stop 5-E04,117.
    2970 Market Street
    Philadelphia, PA 19104

  4. If the taxpayer has other problems with an MMIA, prepare Form 4442 indicating what the taxpayer's problem is.

    Note:

    The Form 4442 cannot be faxed. It must be mailed with Form 3210 to:
    IRS
    19104 Mail Stop 5-E04,117
    2970 Market Street
    Philadelphia, PA 19104.

21.3.12.6.2.2  (03-05-2014)
The Collection Assignment Number (TXMOD) is 8000

  1. If the last four digits of the collection assignment number on CC TXMOD is "8000", the balance due is the result of an Automated Substitute for Return (ASFR).

  2. If there is a TDI and an SFR assessment on the account, prepare Form 4442 and fax it to the ASFR Unit at the controlling campus using IRM 21.3.12.3.1, Automated Substitute for Return (ASFR), as a reference. Advise the taxpayer:

    • Someone will contact them within 30 days

    • To file the delinquent return as soon as possible

    • Make check(s) or money order(s) payable to "United States Treasury" , see IRM 21.3.12.4.1(6), Can Full Pay Balance Due Now (Payoff within 1 to 10 days) IMF and BMF, for check annotation.

    • Mail payment to the Controlling Campus.

  3. If the taxpayer claims to be a victim of identity theft after the balance due notice is explained, see IRM 21.9.2.3, Identity Theft - Telephone Overview.

  4. If the collection assignment number on TXMOD is 8000 and the issue is other than a TDI/TDA combination, follow normal balance due procedures and take the following steps:

    1. Change the collection assignment number to 7000 using CC ASGNI

    2. CC STAUP 2400

    Note:

    If the account has a module that is Status 26 without ASGNI 8000 or 35XX6XXX, the account is assigned to a Revenue Officer.

21.3.12.6.2.3  (10-01-2014)
Status 26 - Case Assigned to a Revenue Officer

  1. If the taxpayer has not had contact with an Revenue Officer (RO), advise them:

    • Another office has jurisdiction of the account and the taxpayer will be contacted when the account is assigned to a RO.

    • It is in their best interest to pay as much and as often as possible.

    • Make the check(s) payable to "United States Treasury", see , IRM 21.3.12.4.1(6), Can Full Pay Balance Due Now (Payoff within 1 to 10 days) IMF and BMF, for check annotation.

    • Send payment to the controlling campus.

    • Remind taxpayers that their rights in the collection process can be found in Pub 1, Your Rights as a Taxpayer.

    Note:

    Do not give specific time frame for when the taxpayer will be contacted and do not transfer the call to the RO or give the RO's phone number.

  2. If the taxpayer has had contact with an RO, advise the taxpayer:

    • To contact the RO at the phone number given them by the RO.

    • If the taxpayer has misplaced the RO's phone number, give them the RO phone number for the taxpayer's Zip Code.

  3. If there are modules that are in notice status in addition to the status 26 modules, input STAUP 22 01 to accelerate those modules to status 26.

21.3.12.6.3  (02-16-2012)
Status 71 -Y Freeze or Taxpayer's Issue is an Offer In Compromise (OIC)

  1. The IRS has the authority to settle, or compromise, federal tax liabilities by accepting less than full payment under certain circumstances. The IRS may legally compromise for one of the following reasons:

    • Doubt as to Liability: Doubt exists that the assessed tax is correct

    • Doubt as to Collectibility: Doubt exists that the taxpayer could ever pay the full amount of tax owed. The minimum offer amount must generally be equal to (or greater than) the taxpayer's reasonable collection potential (RCP). The RCP is defined as the total of the taxpayer's realizable value in real and personal assets, plus his/her future income.

    • Effective Tax Administration

  2. The following transaction codes are associated with Offer In Compromise (OIC):

    • TC 480 - OIC has been received

    • TC 481 - OIC has been rejected

    • TC 482 - OIC has been withdrawn

    • TC 780 - OIC has been accepted and is now waiting for all the conditions to be met (OIC payment, etc.)

    • TC 781 - OIC has defaulted

    • TC 788 - All conditions of the OIC have been met. There is or will be a corresponding credit transaction to clear the liability.

  3. Rejection of OIC request: If the request is rejected, appeal rights will be included in the rejection letter.

21.3.12.6.3.1  (10-01-2014)
Taxpayer Is Requesting an OIC

  1. Before an offer can be submitted, all tax returns are required to be filed, all estimated tax payments for the current year must be made, and all required federal tax deposits for the current quarter must be made, if the taxpayer is a business owner with employees.

  2. If you are speaking to the taxpayer, they request an OIC and the account is in notice status or status 24, analyze the taxpayer's ability to full pay. If the taxpayer is willing to be transferred to complete the financial analysis, those working SIA applications, transfer the call to NSIA. NSIA will complete the initial financial analysis to determine if the taxpayer can full pay, be set up in an installment agreement or possibly a partial pay installment agreement. Explain to the taxpayer a financial analysis should be completed prior to the submission of the offer and of the following:

    • If the liability can be paid in full or the taxpayer qualifies for an Installment Agreement, the taxpayer does not qualify for an OIC unless it is an OIC concerning doubt as to liability or there is evidence that paying the liability in full would cause economic hardship.

    • Encourage a taxpayer qualifying for a partial payment installment agreement to enter into one; however, they may choose to submit an OIC instead.

    • Explain to the taxpayer if the financial analysis shows the taxpayer has the ability to pay, while they may submit an offer, it is unlikely the offer will be accepted. Explain an application fee of $186 (effective January 1, 2014; $150 prior) is charged and the IRS will also keep the application fee unless the offer is not accepted for processing.

    • Remind the taxpayer that their rights in the collection process are found in Pub 1, Your Rights as a Taxpayer, and Pub 1660, Collection Appeal Process.

    Note:

    The IRS will not accept an OIC where the taxpayer is in bankruptcy or where the taxpayer is not current with all filing requirements.

  3. If the taxpayer is willing to be transferred to complete the financial analysis, those working SIA applications, transfer the call to NSIA. They will complete the initial financial analysis to determine if the taxpayer can full pay, be set up in an installment agreement or possibly a partial pay IA.

  4. If the taxpayer does not want to be transferred and is only interested in filing an OIC, follow the procedures below:

    1. Send Letter 278C. As appropriate offer to send Form 656-B, Offer in Compromise Booklet, which is a package that includes the offer submittal forms Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, and Form 433-B, Collection Information Statement for Businesses, and detailed instructions about the application and the fee.

    2. Advise the taxpayer of the $186 application fee.

    3. They should be sent to the Centralized Offer in Compromise Campuses (COIC) for Initial Offer-in-Compromise Submissions. These addresses are listed in the Form 656–B. These are addresses are also listed on SERP, Centralized Offer in Compromise Campuses (COIC) for Initial Offer-in-Compromise Submissions.

    4. Input STAUP 2209 for notice status accounts.

    5. Instruct the taxpayer to return the application forms within 30 days. If the forms are not returned the account will go into collections.

    6. If enforcement action was previously taken, a levy will not be released solely based on the taxpayer’s request for an OIC.

    Note:

    The fee for processing an offer in compromise is $186, except that no fee will be charged if an offer based solely on doubt as to liability, or made by a low income taxpayer, see Form 656, Offer in Compromise

    .

  5. Taxpayers may pay the amount offered in the following ways:

    • Payment Option 1: Must be paid in five or fewer installments.

    • Payment Option 2: Must be paid in more than five months and in monthly installments. The taxpayer must continue to make monthly payments while the IRS is considering their offer. Failure to make regular monthly payments will cause the offer to be returned.

  6. Because acceptance of an offer will provide a "fresh start" to the taxpayer, an offer requires future compliance for a period of five (5) years from the date of acceptance of the OIC or until the offer is paid, whichever is longer.

  7. The IRS will keep any overpayment of any tax or other liability including interest for tax periods extending through the calendar year that IRS accepted the offer.

  8. The IRS may reinstate the entire tax liability, less all payments and credits received including those made on the offer if the taxpayer does not abide by ALL the terms of the offer including 5-year compliance after acceptance.

  9. Generally, the IRS will not levy to collect the liability which is the subject of the offer during the period the offer is pending for 30 days following rejection and for any period when the Office of Appeals is reviewing a rejected offer.

  10. Common errors that delay processing of an OIC:

    • Failure to include the Tax Increase Prevention and Reconciliation Act (TIPRA) payment (20%) or initial payment

    • Failure to send in two Forms 656 with related payments (TIPRA and application fee) if the taxpayer owes joint and separate liabilities and is filing with a spouse.

    • Failure to continue making TIPRA payments during the investigation of the offer.

    • Failure to include up-to-date financial statements and documentation.

21.3.12.6.3.2  (10-01-2014)
Taxpayer Requests Help in Preparing Form 656

  1. The Form 656−B, Offer in Compromise Booklet, contains information and Forms that the taxpayer needs in order to prepare a complete and accurate Offer in Compromise. If taxpayer needs further clarification of the tax law or which forms to use have them contact the nearest IRS Taxpayer Assistance Center.

    Note:

    Taxpayer Assistance Center personnel do not prepare Form 656.

  2. If a taxpayer is not represented, they may be eligible for assistance from a Low Income Taxpayer Clinic (LITC). LITCs:

    • Assist low income individuals in resolving federal tax problems such as audits, appeals, litigation, and tax collection disputes.

    • Provide services to taxpayers who speak English as a second language, including education about taxpayer rights and responsibilities, and consultations on individual tax issues.

    • Services must be free or cost only a nominal fee. LITCs receive funding from the IRS and the program receives oversight from the National Taxpayer Advocate, but the clinics are wholly independent of the IRS.

    • are located in each state, Puerto Rico, and the District of Columbia, but not every clinic offers a complete range of services. For a complete list of LITCs, services offered, and contact information, see Pub 4134, Low Income Taxpayer Clinic List. Irs employees should not direct taxpayers to a specific LITC.

21.3.12.6.3.3  (10-01-2013)
Taxpayer Is inquiring about the status of an OIC Application

  1. If it has been less than 45 days since the taxpayer submitted the Form 656, Offer in Compromise, advise the taxpayer that they should be contacted within the 45 days.

  2. If it has been 45 days or more since the taxpayer submitted the Form 656, offer to prepare Form 4442 and fax to the appropriate Centralized Offer in Compromise Campus (COIC): Memphis or Brookhaven. Advise the taxpayer that a call-back should be received within the next 5 business days. Also offer the taxpayer the appropriate COIC toll free phone number. If the taxpayer insists on contacting the COIC themselves, the Form 4442 referral is not necessary.

  3. If the taxpayer indicates two previous attempts have been made to resolve the issue and there has been no response or the taxpayer states they are experiencing an economic hardship, and the taxpayer’s issue cannot be resolved within 24 hours, prepare and forward Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), to the Local Taxpayer Advocate.

21.3.12.6.3.4  (10-01-2010)
Refund has offset After OIC Approved

  1. If the taxpayer contacts because his/her refund was applied to balance due after OIC was accepted advise the taxpayer that as part of the OIC contract agreement which they signed, the IRS will keep any overpayment of tax or other refund including interest for tax periods extending through the calendar year that IRS accepted the offer. This does not apply if the offer was accepted under the basis of doubt as to liability.

    Example:

    A taxpayer's OIC application was approved on 7-10-10. The IRS is authorized to keep overpayments from tax year 2010 and prior.

  2. If the refund corresponds to a calendar year beyond the calendar year that the IRS accepted the offer:

    • Determine the taxpayer's home state and BOD (W & I or SB/SE)

    • Give the taxpayer the appropriate phone number from SERP Who/Where Tab, Offer-in-Compromise (OIC) Compliance Campus Locations for the Monitoring of Accepted Offers for OICs.

21.3.12.6.3.5  (10-01-2010)
Taxpayer has Subsequent Liability After an Approved OIC (ST 71 or –Y Freeze)

  1. Advise the taxpayer it is in their best interest to pay the subsequent liability as soon as possible.

  2. Determine the taxpayer's home state and BOD (W & I or SB/SE) and provide them with the appropriate Offer-in-Compromise (OIC) Compliance Campus Locations for the Monitoring of Accepted Offers for final resolution. Take no other action.

  3. When providing the telephone number, advise the taxpayer that generally their case could take approximately 30 days from the issuance of the IRS OIC Acceptance Letter to reach the monitoring OIC campus. Thus, they should allow at least 30 days from this date before contacting the respective campus.

21.3.12.6.4  (10-01-2014)
Status 72 Account(s) or Taxpayer Has a Bankruptcy Issue

  1. Do not automatically refer the taxpayer to Centralized Insolvency Operation (CIO) when contacted and all or part of the account is in Status 72. First, determine the reasons for the call and address any non-insolvency related issues as appropriate.

  2. If the taxpayer filed Chapter 13, utilize the tool, available under the Who/Where tab on the SERP home page titled Insolvency (Bankruptcy) Tools/Installment Agreement Requests When in Bankruptcy, to determine if a installment agreement can be granted.

    1. For other bankruptcy chapters have the taxpayer call the Centralized Insolvency Operation (CIO) at 1–800–973–0424 (Hours: M-F, 7:00 a.m. — 10:00 p.m. EST).

  3. DO NOT prepare a Form 4442, Inquiry Referral, if the tool:

    • Allows you to establish an IA; or

    • Instructs you to refer the taxpayer to the CIO toll free number.

  4. If the tool determines the taxpayer can be granted on the post-petition liabilities follow normal collection procedures.

  5. When the taxpayer needs immediate resolution to a lien or levy, provide the CIO toll free number, 1-800-973-0424 (Hours: M−F, 7:00 a.m. − 10:00 p.m. Eastern Time), if

    • The account is in status 72 with a TC 520 closing code 60–67, 81, or 83–89 or

    • The taxpayer claims they are currently in bankruptcy.

    Note:

    If the taxpayer indicates that the lien or levy is causing a hardship, follow the procedures in IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, to refer them to Taxpayer Advocate Service.

  6. If the IMF taxpayer is not in compliance, follow the procedures in IRM 5.19.2.5.4.5, IMF - Determining Liability, to resolve the unfiled returns. Advise the taxpayer the request for an installment agreement may not be made until the reason for non-compliance is corrected.

21.3.12.6.4.1  (10-18-2012)
Bankruptcy Filed

  1. If the taxpayer states they already filed bankruptcy, but the account is not Status 72, use AMS Form 4442, Inquiry Referral, to document the following information from the caller:

    1. Current status of the taxpayer’s bankruptcy (either opened or closed)

    2. Date the petition was filed

    3. Court location where the bankruptcy was filed

    4. Case (docket number)

    5. Chapter under which the bankruptcy was filed

    6. Discharge date if applicable

    7. Taxpayer Identification Number(s)

    8. Method of closure (dismissal or discharge) and the closure date (or general time frame) if the case is closed.

    Fax the Form 4442 to Philadelphia, Directory Insolvency (Bankruptcy) National Field/Centralized Site within 24 hours. The appropriate fax number can be found on Insolvency (Bankruptcy) National Field/Centralized Site Directory . These numbers are official use only and should not be given to taxpayers.

  2. For notice status modules, input a CC STAUP to the next status for nine cycles

21.3.12.6.4.2  (12-31-2013)
Taxpayer to File Bankruptcy

  1. When the taxpayer states they will file bankruptcy, follow the appropriate procedures outlined in this subsection. Advise the taxpayer, as soon as the bankruptcy is filed, to immediately mail a copy of the bankruptcy to:

    Centralized Insolvency Operation

    Post Office Box 7346

    Philadelphia, PA 19101-7346

  2. A Lien determination must be made.

    1. If not trained in filing a Federal Tax Lien, transfer the call to NSIA for the lien determination. All others follow (b) through (e) below.

    2. Advise the caller of the lien filing if determination shows the need for the lien.

    3. Remind the taxpayer of their right to appeal IRS collection actions as outlined in Pub 1660, Collection Appeals Rights. Refer to IRM 21.3.12.6.7.3.1, Collection Appeals Program (CAP) and IRM 21.3.12.6.7.3.2, Collection Due Process (CDP), if appropriate.

    4. Annotate AMS with the lien determination information.

    5. See IRM 5.19.4.5.2 (7)Lien Filing Determination and IRM 5.19.4.6.1 How to File a Lien.

  3. Input a STAUP on the account.

    1. For notice status accounts, input CC STAUP 09 to the next status

    2. For Status 64, input CC STAUP 2209

  4. For more information, see IRM 5.19.1.4.2.1.3 Will File Bankruptcy.

21.3.12.6.4.3  (10-17-2011)
Status 72 Taxpayer Requests Payoff or Has a Technical Question

  1. If the taxpayer is requesting a payoff balance or has a technical question about their bankruptcy, give the taxpayer the telephone number for the Centralized Insolvency Operation (CIO), 1-800-973-0424 (Hours: M−F, 7:00 a.m. − 10:00 p.m. Eastern Time).

21.3.12.6.4.4  (10-01-2014)
Insolvency Debt- Discharged, Written Off or Forgiven

  1. When the taxpayer states all of the debt was discharged, written off, forgiven, etc., follow the procedures in the chart below.

    If Then
    All notice statuses
    1. Advise the taxpayer the Service will suspend collections until the issue is resolved and you will be sending a referral over to the insolvency area. They should receive a response within 30 days.

    2. Complete Form 4442 and fax it to Centralized Insolvency Operation(CIO).

    3. Input a STAUP 2209.

    4. Document comments on AMS.

    If at least one module is in status 22 Transfer the call to ACS, as appropriate, per IRM 21.3.12.6.1, Status 22 Modules.
  2. If the taxpayer indicates previous attempts have been made to resolve the issue and there has been no response or the taxpayer states that the lien or levy is causing a hardship, follow the procedures in IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, to refer them to Taxpayer Advocate Service.

21.3.12.6.5  (10-01-2010)
Module(s) on Non-Masterfile (NMF)

  1. Non-Master File (NMF) accounts are established by the Accounting function and maintained on the Automated NMF Data Base for the purpose of accounting for the assessment of taxes and collection of revenue.

  2. Two common examples of NMF accounts are when one spouse is in bankruptcy or one spouse has been granted an installment agreement.

  3. Frequently, NMF accounts will appear on IDRS and can be located by adding an "N" to the taxpayer's SSN (i.e., 000-00-7777N).

    Caution:

    Any NMF account on IDRS, regardless of the status, will only be an information tool and not necessarily an accurate picture of the current status of the account.

  4. If a taxpayer contacts concerning a NMF account take the following actions:

    • Advise the taxpayer to call the Non-Master File function at 1-888-829-7434.

    • If the taxpayer has other issues besides the NMF account, resolve them before releasing the call.

    • Do not refer the taxpayer to the NMF telephone number for any issue other than NMF.

    Note:

    If you receive a call from a taxpayer who states they have received a balance due notice and there are no balances showing on IDRS ask the taxpayer if the notice has an N after the Social Security Number. There may be an M- or V- freeze on the account.

21.3.12.6.6  (10-01-2014)
Levy Release Request

  1. If the taxpayer is requesting a levy release and the account is Status 22 or Status 26, refer the caller to the appropriate function:

    • Status 22 (ACS) - Transfer the taxpayer to ACS, as appropriate, per IRM 21.3.12.6.1, Status 22 Modules.

    • Status 26 (RO) - Give the taxpayer the Revenue Officer's telephone number based on the taxpayer's Zip code. If there is no TSIGN or if the TSIGN ends in 00, the case is not assigned to a RO and you should follow the instructions in IRM 5.19.1.3.1(4) , Account Actions on Referral/Redirects.

    • Status other than 22 or 26, prepare Form 4442 with the reason you are requesting the levy release, e.g., Account Full Paid, TP has IA, etc., and fax it to the appropriate ACS Support Site Liaison. See the ACS Support Site Liaison listing on SERP.

    Note:

    The levy source should receive the levy release in 7 to 10 days.

  2. Common reasons the account would not be in Status 22 or 26 but there is a levy outstanding:

    • A continuous wage levy was input. IADIS shows Agreement Locator Number (ALN) XX08 or the account is in ST 24 and the taxpayer states there is a levy on his/her wages.

    • The account is full paid (Status 12), but the payer did not receive the levy release.

    • The taxpayer entered into an IA (Status 60), but the employer did not receive the levy release.

    • The taxpayer is in bankruptcy.

  3. Request a levy release in the following situations:

    • There is no balance due.

    • The account is Status 60, but not a continuous wage levy (Agreement Locator Number (ALN) XX08)

    • The CSED has expired for a continuous wage levy served before the expiration of the collection statute.

    • A secondary spouse received the levy, but is no longer residing with the primary spouse and was not sent a final notice. See IRM 5.11.1.3.3.4, Issuing Notice of Intent to Levy/Notice of a Right to a Hearing for Joint IMF Bal Due account), for more information.

    • Taxpayer is in bankruptcy.

    • The levy is creating an economic hardship, i.e., the levy will cause the individual to be unable to pay their necessary living expenses. Applies to the account for an individual or joint IMF assessment, sole proprietorship, general partnership, or a Single Member Owner who is liable for the tax obligations of the Limited Liability Company (LLC).

      Note:

      If the taxpayer claims immediate economic hardship documentation is necessary to release the levy. Advise taxpayer they can fax the information while on the call or be ready to provide the relevant information when requested from ACS. This information would include; the eviction notice, disconnect notice, etc. or other document(s) showing evidence of economic hardship. IRS employees make the determination whether the circumstances warrant the levy release, not the taxpayer. Consider referral to TAS per IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, if it appears the IRS will be unable to resolve the taxpayer’s claim of economic hardship within 24 hours.

    Note:

    If the taxpayer is in bankruptcy, but not in Status 72, have the taxpayer contact CIO at 1-800-973-0424 (Hours: M-F, 7:00 a.m. - 10:00 p.m. Eastern Time) and advise them of the levy.

  4. If the taxpayer states he or she is in bankruptcy or the account is in status 72 with a TC 520 closing code of 60–67, 81, or 83–89, have the taxpayer call CIO at 1-800-973-0424 (Hours: M-F, 7:00 a.m. - 10:00 p.m. Eastern Time).

  5. If there is a continuous wage levy (ALN XX08), you must resolve the account, i.e., enter taxpayer into payment agreement or CNC, before requesting the levy be released. Take the following actions as appropriate:

    • Convert the continuous wage levy to an IA

    • CNC if appropriate. Follow the procedures in IRM 21.3.12.4.12, Taxpayer Cannot Make Payments - IMF Accounts.

    • You can make revisions to a continuous wage levy by using CC IAREV (see regular procedures for extension, IAs).

    • After you have entered the payment agreement, notify ACS Support to have the levy released per (6).

  6. If taxpayer states release of levy has not been received by employer and/or taxpayer and call is unable to be transferred to ACS:

    Note:

    Ensure the 7–10 day time frame has elapsed.

    1. Review AMS to ensure release of levy was previously sent

    2. Review IDRS all modules are in full paid status or status 60 (review IADIS)

    3. Secure fax number and mailing address for levy source and taxpayer

    4. Manually prepare Form 4442 and fax it to ACS if unable to transfer to ACS.

      Note:

      Releasing levies that have been issued through an Automated Levy Program (ALP) such as the State Income Tax Levy Program (SITLP), the Federal Levy Payment Program (FPLP), and the Alaska Permanent Fund Dividend Levy Program (AKPFD) require special handling. Transfer call to ACS based on BOD code for taxpayer assistance.

  7. If the taxpayer requests a levy of their retirement funds to avoid the early withdrawal penalty, advise the taxpayer we do NOT have the authority to make this request.

21.3.12.6.7  (11-20-2012)
Lien Release Request

  1. A lien will be released only if one of the following situations apply:

    • Liability has been satisfied, Status 12 or 10, taxpayer will receive notification 30 days after full payment of liability

    • Liability has become legally unenforceable (e.g., CSED has expired)

    • Taxpayer has posted a bond with Appeals

    Note:

    Refer to Centralized Lien Unit, 800-913-6050, 8 a.m. to 5 p.m. local time for the contiguous United States, 7 a.m. to 4 p.m. for Alaska and 5 a.m. to 2 p.m. for Hawaii to secure copy of release of lien. If the taxpayer is calling for a payoff figure give the number listed above.

  2. Specialized circumstances arise where it is in the best interest of the government to withdraw the Notice of Federal Tax Lien (NFTL). The Service has authority to "withdraw" a Notice of Federal Tax Lien, in certain circumstances per IRC § 6323(j). The withdrawal of the NFTL only withdraws public notice of the lien; it does not extinguish the underlying liability, nor does it release the underlying federal tax lien.

    Note:

    If taxpayer is in a Direct Debit Installment Agreement (review IADIS) $25,000 or less and made at least three timely electronic payments, a withdrawal of lien is applicable. Provide taxpayer with Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien and Pub 4235, Collection Advisory Group Addresses. Inform taxpayer to complete Form 12277 and submit to Advisory for withdrawal consideration. Advisory information is located on this website.

  3. The Service may withdraw a notice of federal tax lien if the appropriate official determines that the following conditions are met for DDIA provision:

    Note:

    The following types of taxpayers qualify for withdrawal of the NFTL under this DDIA provision: Individual Master File (IMF), Business Master File (BMF income tax only) or BMF out of business (any type of tax).

    1. Aggregate unpaid balance of assessments is $25,000 or less.

    2. The aggregate unpaid balance of assessments will be fully paid in 60 months, or the agreement will be fully paid prior to the CSED, whichever comes first (Use IDRS CC ICOMP);

    3. If pre-assessed taxes are included, the pre-assessed liability plus unpaid balance of assessments must be $25,000 or less;

      Note:

      The unpaid balance of assessments includes tax, assessed penalty and interest, and all other assessments on the tax modules. It does not include accrued penalty and interest

    4. The taxpayer is in compliance with other filing and payment requirements

    5. At least three consecutive electronic payments (generally received on a monthly basis) have been processed under the DDIA and there have been no defaults in payment and

    6. The taxpayer did not previously have a withdrawal of lien for any of the liabilities included in the DDIA (e.g., TC 583 disposal code = 03 on module).

    7. If taxpayer agrees to terms of DDIA and revision of agreement is necessary follow IRM 21.3.12.5.8, Taxpayer Requests Revision to or Reinstatement of a Direct Debit Installment Agreement (DDIA), CSCO will update and then take necessary action for lien determination.

  4. Taxpayers meet the eligibility criteria; inform taxpayer all requests for withdrawal of the Notice of Federal Tax Lien must be in writing. Provide the taxpayer the following:

    • Form 12277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien

    • Pub 4235, Collection Advisory Group Addresses

  5. If taxpayer is in Offer In Compromise, status 71, refer to IRM 21.3.12.6.3.5, Taxpayer has Subsequent Liability After an Approved OIC (ST 71 or –Y Freeze).

21.3.12.6.7.1  (11-10-2011)
Balance Due Paid in Full

  1. Check CC INTST for $0 balance if IDRS indicates potential balance due.

  2. Check command codes TXMODA, IMFOLT, or BMFOLT for TC 583 (Lien Release)

    • If there is a TC 583 on all TXMODs, advise the taxpayer to check county records where the lien was filed (county where the taxpayer has property). The taxpayer can obtain copy of lien release from the county and present to the credit bureau.

      Note:

      Filing of a NFTL makes a taxpayer’s account delinquency a matter of public record. It remains in effect until the account is paid in full, including accrued interest and penalty. See IRM 5.19.1.8, Warning of Enforcement Action and Enforced Collection, for more information on the consequences of a NFTL.

    • If there is no TC 583 on the account and it has been less than 30 days since the account balance (all modules) has been full paid; advise taxpayer the time frame for release of lien is 30 days after full payment. Taxpayer should contact again if after 30 days the taxpayer does not receive correspondence confirming release of lien.

    • If there is no TC 583 on the account and it has been more than 30 days since the account has been full paid, give the taxpayer the phone number for the Centralized Lien Unit, 800-913-6050.

      Note:

      Do not give this number out unless the balance due is full paid or the taxpayer intends to pay the balance due by a specific date.

  3. If the taxpayer requests a lien payoff balance, provide the taxpayer the phone number for the Centralized Lien Unit, 800-913-6050.

21.3.12.6.7.2  (10-01-2010)
Taxpayer Advocate Criteria

  1. If the taxpayer's inquiry meets TAS criteria, follow the procedures for Taxpayer Advocate Service referrals. See IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines.

21.3.12.6.7.3  (07-05-2011)
Appeal Right for Lien Filing and Levy Action

  1. There are three ways to appeal a lien filing or potential levy action that taxpayers must be informed of if actions are to be taken:

    • Collection Appeals Program (CAP)

    • Collection Due Process (CDP)

    • Equivalent Hearing

21.3.12.6.7.3.1  (10-17-2011)
Collection Appeals Program (CAP)

  1. CAP is an informal process that allows the taxpayer to get relief from a collection action, such as a lien or levy, in a fairly short time frame.

  2. The CAP process allows the taxpayer to appeal before the lien is filed. Taxpayers who dispute the filing of the lien should be advised of their CAP rights. The taxpayer can appeal under CAP after the lien is filed. If it's the initial lien filing, the taxpayer also has CDP rights.

  3. If the taxpayer wishes to file an appeal with the CAP coordinator, take the following steps:

    1. Prepare and print Form 4442, Inquiry Referral, making sure to include the taxpayer's name, address, a good daytime phone number with the best time to call between 8:00 AM and 4:00 PM and a clear and concise description of why the taxpayer believes they are entitled to relief.

    2. Advise the taxpayer your manager will contact them by the end of the next business day.

    3. If the manager agrees with the taxpayer, he or she will submit a request to Collection Advisory, who has the authority to approve withdrawals.

    4. If the manager does not agree with the taxpayer, they will forward the appeal to the CAP coordinator.

    5. The CAP coordinator will contact the taxpayer within 5 business days.

    6. If the CAP coordinator agrees with the taxpayer, they will submit a request to Collection Advisory, who has the authority to approve withdrawals.

    7. If the CAP coordinator does not agree with the taxpayer, he or she will follow procedures in IRM 5.19.8.4.16.3, CAP Coordinator Duties. If it is the initial lien filing, the taxpayer may prefer to request a Collection Due Process Hearing (CDP), instead of a CAP appeal. The taxpayer is only entitled to CDP for 30 days after the lien filing. The taxpayer is not entitled to CDP rights when a CAP is denied, see IRM 21.3.12.6.7.3.2, Collection Due Process (CDP).

21.3.12.6.7.3.2  (10-17-2011)
Collection Due Process (CDP)

  1. CDP is a formal process that allows the taxpayer to appeal an adverse collection action. The taxpayer does not need to go through the CAP process before using CDP.

  2. To appeal an adverse collection action through CDP, the taxpayer must have received one of the following:

    • Notice of Federal Tax Lien Filing and Your Right to a Hearing Under IRC 6320

    • Notice of Intent to Levy and Your Notice of Your Right to a Hearing

    • Notice of Jeopardy Levy and Right of Appeal

    • Notice of Levy on Your State Tax Refund

    • Notice of Levy and Notice of Your Right to a Hearing

  3. If the taxpayer has received one of the notices in (2) above and wishes to appeal the collection action he or she must:

    • Complete Form 12153, Request for a Collection Due Process Hearing. You can order the form for the taxpayer or they may download it from www.irs.gov or

    • Send a signed letter, fax is acceptable, with a minimum of the following information: Name, address, daytime telephone number and a statement that clearly identifies the letter as a request for a CDP hearing.

      Note:

      The address for where to submit Form 12153 is on the Letter 3172, Notice of Federal Tax Lien Filing and your Rights to a Hearing Under IRC 6320, which is sent to the taxpayer with the lien.

  4. The request must be made within the time period specified in the Letter 3172, Notice of Federal Tax Lien and Your Right to a Hearing Under IRC 6320. If the request is made after that time period, the taxpayer can request an equivalent hearing. See IRM 21.3.12.6.7.3.3, Equivalent Collection Due Process Hearing.

  5. The CSED is suspended while a timely CDP appeal is being considered.

  6. If there is an open control for CDP hearing and/or a TC 520 cc 76/77 refer the telephone call information to the ACS CDP Coordinator found in the ACS Support CDP Coordinator, listing on SERP. Do not transfer the call to the CDP Coordinator.

    • When speaking to the taxpayer complete Form 4442, Inquiry referral, with all pertinent information and fax to the ACS support/CDP site having jurisdiction of the account. Inform the taxpayer someone will contact them in 5 business days.

    • When working correspondence fax the correspondence to the ACS support/CDP site having jurisdiction of the account.

21.3.12.6.7.3.3  (10-01-2010)
Equivalent Collection Due Process Hearing

  1. If the taxpayer does not file his/her request for a Collection Due Process (CDP) hearing timely (within 30 days of the NFTL being filed), they may request an Equivalent CDP hearing. Refer to IRM 5.19.8.4.3, Equivalent Hearing (EH) Requests and timeliness of EH Requests.

  2. The Equivalent Hearing (EH) is similar to the CDP hearing except:

    • The CSED is not suspended during the consideration period

    • The decision cannot be appealed through the court system

    • Other technical reasons

  3. Advise the taxpayer to send the request to the address on Letter 3172, Notice of Federal Tax Lien Filing and your Rights to a Hearing Under IRC 6320, which is sent to the taxpayer with the lien and that they will be contacted within 30 days of receipt.

21.3.12.6.8  (10-01-2012)
Trust Fund Recovery Penalty (TFRP)

  1. The Trust Fund Recovery Penalty (TFRP) is a penalty typically assessed against any officer, person or business determined responsible for non-payment of income and employment tax withheld from an employee's check. The responsible party is personally liable for the penalty which equals the amounts withheld and not turned over to the government. The assets of the responsible party may be used to satisfy the TFRP liability. The TFRP is not limited to the amount actually withheld (i.e., the trust funds); it also covers the amount that should have been withheld.

  2. TFRPs can be identified by a TC 240 with Penalty Reason Number (PRN) 618. Two Master File Tax Codes (MFT) record assessments, abatements and other account actions:

    • MFT 13: processed on BMF

    • MFT 55: processed on IMF (RO determined responsible person)

  3. Balance due issues regarding TFRP assessments, whether "can't pay" , "won't pay" , "will pay later" or "bankruptcy" should be worked per normal procedures provided elsewhere in this IRM Section.

  4. TFRP accounts can and should be incorporated into an IA.

21.3.12.6.9  (10-01-2014)
Federal Payment Levy Program (FPLP)

  1. Accounts where the taxpayer is subject to FPLP can be identified on TXMOD or IMFOLT by a TC 971 ac 060 or FMS CD 3. FPLP payments are designated as TC 670 DPC 18 or 19 as a posted levy payment. This indicates the taxpayer has been sent a CP 90, CP 91, CP 297, or CP 298 stating that a levy on federal payments will be imposed unless the taxpayer takes action to resolve the balance due. A FPLP levy will attach 15 percent of the taxpayer's federal payments. Certain circumstances allow for a 100 percent levy on most military contractor and USPS supplier/vendor payments.

  2. The following federal payments are subject to FPLP:

    • Federal retirement income disbursed for the Office of Personnel Management (OPM)

    • Federal (non military) vendor payments

    • Federal employee travel voucher advances and reimbursements

    • Federal employee salaries disbursed through the US Department of Agriculture National Finance Center and the US Department of Interior National Business Center

    • Military (Defense Finance Accounting Service) contractor payments

    • Medicare Provider Payments

    • Social Security benefit payments under Title II (Old Age, Survivors and disability Insurance) of the SS Act. Dependent child benefits, lump sum death payments and Prouty benefits (recipients who are aged 72 on or before 1971), under Title II are NOT subject to the levy. Supplemental Security Income (SSI) payments and payments with partial withholding to repay a debt owed to Social Security are also not subject to the FPLP.

  3. If a taxpayer contacts as a result of a FPLP levy, follow normal balance due procedures. Determine the soonest the taxpayer can full pay and set the taxpayer up on an extension, IA, or make a CNC determination. Once the appropriate input has been made, the FPLP levy will be stopped.

    Note:

    If, however, any of the following conditions are met the levy must be released immediately:

    • The levy was issued prior to the expiration of the taxpayer's 30 day notice period in a non−jeopardy situation

    • The liability is no longer owed (or a pending adjustment will fully satisfy liability)

    • The FPLP levy is creating an economic hardship within the meaning of IRC Section 6343

      Note:

      If the taxpayer claims immediate economic hardship from a FPLP levy documentation is necessary to release the FPLP levy. Ask the taxpayer to fax all relevant information while on the phone; the eviction notice, disconnect notice, etc. or other document(s) showing evidence of economic hardship. IRS employees make the determination whether the circumstances warrant the FPLP levy release, not the taxpayer. Consider referral to TAS per IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, if it appears the IRS will be unable to resolve the taxpayer’s claim of economic hardship within 24 hours.

    • The CP 90/CP 297 (or equivalent) was sent, but not to the most recent taxpayer confirmed address that was available to us when we requested the letter.

    • Release facilitates the collection of the liability. The IRS, not the taxpayer, makes the determination that a levy release facilitates collection.

    • Statutory collection period has expired.

    • The taxpayer enters into an approved installment agreement.

    • The taxpayer indicates that bankruptcy has been filed.

    • Wrongful levy (i.e., LLC entity inquiries) or erroneous levy conditions apply.

    • The taxpayer makes an Offer in Compromise (Status 71 with a post TC 480). See IRM 5.19.9.3.6.1, Taxpayer Contact - Prior to Levy.

  4. A FPLP exclusion TC or TC 971 ac 061 must be posted before the next payment is processed by Financial Management Service (FMS). FMS has different cutoff dates before they process the federal payments to the taxpayer and IRS. Therefore the TC must be posted for the following types of payments by:

    • OPM two weeks before payment date

    • SSA six business days before the payment date

    • Federal Salaries 14 days before payment date

    Note:

    Accounts selected into the FPLP are also the tax source records for the GSA’s Central Contractor Registration (CCR) Federal debt indicator that is on Federal contractors or grantees who register in WWW.CCR.GOV. The CCR Federal debt indicator only displays either ‘YES’ or ‘NO’ that a non-specific Federal debt (tax or nontax) exists on that contractor or grantee. GSA/CCR issues e-mail notifications (from ccr.dfd@bpn.gov) to contractors/grantees with a ‘YES’ on the Federal debt indicator. These e-mails will not contain the Taxpayer Identification Number (TIN) of the contractor/grantee, therefore research of the TIN may be necessary from the caller.

  5. Refer to IRM 5.19.9.3, Federal Payment Levy Program, and IRM 5.19.9.3.3, FPLP Systemic Processes and Indicators, for additional information.

21.3.12.6.10  (07-09-2013)
Balance Due Accounts Involving Identity Theft

  1. Situations occur where taxpayers with an agreed balance due have an issue with identity theft (IDT) on their account. To the extent possible, the impact of IDT on a taxpayer should be minimized in an effort to foster voluntary compliance. When these situations arise it is necessary to perform complete research to ensure you are speaking with the good taxpayer.

    Note:

    If there is an open control for IDT, update AMS with the information as to what actions were taken and why, along with any other pertinent information.

  2. In situations where the taxpayer makes an allegation of identity theft follow the procedures in IRM 21.9.2.3, Identity Theft - Telephone Overview, then continue with the following procedures.

  3. If there is a module in IDRS status 22 transfer the call to ACS, as appropriate, per IRM 21.3.12.6.1, Status 22 Modules.

  4. In situations where there is a legitimate balance due for the good taxpayer and the filing of the fraudulent return resulted in changes to the entity, the information from the balance due return can be used to complete taxpayer authentication. If the information matches then assume you are speaking with the good taxpayer. It will be extremely rare for an identity thief to file a fraudulent balance due return or be looking to pay off a balance.

    Example:

    The taxpayer owes for 2010 but a fraudulent return was filed for 2011 which changed the entity information on the good taxpayer’s account. When asking the required disclosure probes the address information doesn’t match and the taxpayer can not provide any information from the current return. The address matches the information on the 2010 return and the taxpayer identified the year for which they owed and provided the balance on that account.

    1. Complete the required disclosure probes by using the appropriate prior year return information if needed. If the taxpayer provides the balance owed, IA payment amount, payment date, etc., any of these can be considered the two additional items for additional taxpayer authentication. See IRM 21.1.3.2.4, Additional Taxpayer Authentication.

    2. If the information can be verified, change the address back to the good taxpayer’s.

    3. Update AMS to advise why the address was changed.

    4. Update AMS with the information as to what actions were taken and why.

  5. It must first be determined which balances, if any, are the good taxpayers. If the taxpayer states all balance(s) are from ID theft:

    If And Then
    The balance is a result of a math error on the fraudulent return An adjustment to reverse the fraudulent return will eliminate the balance due
    1. Follow IRM 21.9.2.3.2, Tax-Related Identity Theft and then follow (b) and (c) below.

    2. Document AMS with actions taken.

    3. Input CC STAUP to the next notice status for 9 cycles.

    .
    There is an ASFR, Exam or AUR assessment The good taxpayer claims not to be liable for the ASFR, Exam or AUR assessment
    1. Follow IRM 21.9.2.3.2, Tax-Related Identity Theft then follow (b) - (d) below.

    2. Advise the taxpayer they must provide documentation to substantiate identity theft per IRM 10.5.3.2.6, Overview - Identity Theft Supporting Documentation . Advise taxpayer to mail documentation with copy of notice.

    3. Document AMS with actions taken

    4. Input CC STAUP to the next notice status for 9 cycles

21.3.12.6.10.1  (02-07-2013)
Fraudulent Overpayment Offset to Legitimate Balance Due

  1. In situations where the overpayment from the fraudulent return was offset to the good taxpayer’s balance due, take the following actions:

    Example:

    The taxpayer has a legitimate balance due on the 2010 return. The taxpayer is currently on an IA for the 2010 balance. A fraudulent refund return was filed for 2011 and the refund full paid the 2010 account.

    1. Input a credit transfer to reverse the TC 706/826 offset with a TC 701/821 using ADD24. Input the secondary TC 570 to freeze the overpayment and prevent an erroneous refund, as necessary. See IRM 21.5.8.4.6, TC 570 and Bypass Indicator.

    2. If the balance was fully paid by the offset, reestablish the agreement and waive the fee. Annotate AMS with the reason why the user fee was waived. If the response screen to CC IAGRE is CC IAPND, reestablish following pre-assessed installment agreement procedures and waive the fee. See IRM 21.3.12.4.5.1, Pre-assessed Installment Agreements (IAPND) and Unassessed Modules.

    3. Update AMS with the information as to what actions were taken and why, along with any other pertinent information.

  2. If the taxpayer sent in the regular monthly IA or full payment(s) and any of the payment(s) have refunded:

    If Then
    The taxpayer has the refund check(s) Advise the caller to send the check(s) back. See IRM 21.4.3.4.4, Returned Refund Check Procedures. By returning the check(s) the payment will be credited from the original posting date.
    If the refund check was cashed by the good taxpayer Follow normal Category D Erroneous Refund procedures. See IRM 21.4.5.5, Account Actions for Category D Erroneous Refunds. This will allow time for the taxpayer to repay the payments without interest being charged.
    If any of the payments were refunded to the bad taxpayer because the address was changed based on the filing of the fraudulent return and there is an open control for ID theft Update AMS with the information as to what actions were taken and why, along with any other pertinent information. Follow the procedures found in IRM 21.6.2.4.2.3, Preliminary Research, and in IRM 25.25.4.8, Identity Theft CAT 7 Bad Return Posted/Good Return Posted- Lost Refund Process.
    If any of the payments were refunded to the bad taxpayer because the address was changed based on the filing of the fraudulent return and there is not an open control for ID theft
    1. See IRM 21.6.2.4.2.1, Telephone Inquiries Regarding MXEN, MXSP, IDT1, IDS1, IDT3, IDS3, IDT6, IDS6, IDT8, IDTS8, IDT9, IDS9, and Scrambled Cases.

    2. Input TC 971 AC 522. Per IRM 21.9.2.3.2, Tax-Related Identity Theft.

    3. Advise the taxpayer they must provide documentation to substantiate identity theft per IRM 10.5.3.2.6, Overview - Identity Theft Supporting Documentation .

    4. Document AMS with description of the situation and actions taken.

    5. Follow normal refund trace procedures to determine if the check has been cashed. See IRM 21.4.2.4, Refund Trace Actions.

21.3.12.6.10.2  (02-07-2013)
Good Taxpayer Has Agreed Balance Due With Another Balance Due Created By Alleged Identity Theft

  1. If the taxpayer has an agreed balance due on one or more tax modules and wants to set up a payment arrangement, but there is another balance due the taxpayer alleges was created by ID theft:

    1. Follow normal collection procedures

    2. The balance due amount resulting from alleged ID theft must be included when determining if the taxpayer's payment proposal falls under your IA authority. The purpose is to protect the Government's interest if a determination is made later that the taxpayer is liable for the balance due they currently allege is due to ID theft.

    3. Document AMS with the taxpayer's intent e.g., the balances the taxpayer agrees they owe and will make payments on as well as the balances they claim are due to ID theft and will not be making payments on.

    4. Follow procedures in IRM 21.9.2.3.2, Tax-Related Identity Theft, for modules with ID theft created balance due.

    5. Advise the taxpayer they must provide documentation to substantiate identity theft per IRM 10.5.3.2.6, Overview - Identity Theft Supporting Documentation. Advise taxpayer to mail documentation with copy of notice.

    6. Advise the taxpayer that if the balance due related to ID theft is removed, their account balance will be adjusted and their payments applied against any remaining balance due. It may also be possible at that time for them to lower their monthly installment agreement payment amount.

21.3.12.6.10.3  (02-07-2013)
Fraudulent Return Filed First and Balance Due Return Received Second

  1. If the good taxpayer is calling and they state they filed a balance due return and research determines there is a Duplicate filing condition or an ID theft case open and the bad return posted first determine if:

    1. There is either a –A or –R freeze on the account.

    2. Advise the caller there is a processing problem if unaware of the filing of the fraudulent return.

    3. If there is only the –R freeze, set up the agreement as a pre-assessed IA. If the account has not been corrected within 16 weeks the agreement will appear on the weekly Installment Agreement Accounts List (IAAL).

    4. If there is an –A freeze, the taxpayer can make payments. The freeze on the account will hold the taxpayer payments and prevent them from refunding.

    5. Update AMS with the information as to what actions were taken and why, along with any other pertinent information.

  2. Follow procedures in IRM 21.9.2.3.2, Tax-Related Identity Theft, as appropriate.

21.3.12.6.11  (01-29-2014)
Other Situations Requiring Special Handling

  1. This subsection provides additional guidelines for handling balance due accounts for the following types of casework:

    • When a caller states the taxpayer is deceased, probe the caller to determine if the surviving spouse or estate has the ability to pay the liability. If the caller states no assets exist, research the account to verify no assets exist. Use CC IRPTR or RTVUE for prior years. Examples of possible assets would be: TP reported mortgage interest, stocks etc. If the taxpayer has identifiable assets, transfer the call to NSIA for lien determination, see IRM 5.19.1.4.3, Deceased Taxpayers. If it can be determined no assets exist follow procedures in IRM 5.19.1.4.3.1, Deceased Taxpayer- Balance due Actions.

    • Trust Fund Recovery Penalty (TFRP). See IRM 21.3.12.6.8, Trust Fund Recovery Penalty (TFRP).

    • Incarcerated Taxpayers. See IRM 5.19.1.4.7, Incarcerated Taxpayers.

    • Federal Employee/Retiree Delinquency Initiative (FERDI), transfer to ACS only if case is in status 22 and 24 to extension 92082. Follow normal procedures for all other collection statuses.

    • Disaster/Emergency Relief. See IRM 5.19.1.4.8, Disaster/Emergency Relief.

    • Military Deferment. See IRM 5.19.1.4.9, Military Deferment.

    • -C Freeze or Combat Zone Accounts. Combat Zone (CZ) accounts, identified by a -C freeze, indicate a taxpayer who is or was serving in a designated combat zone area.

      Note:

      The -C freeze stays on the account even after the taxpayer is no longer in the CZ. When working an account that contains a –C freeze, additional research is required to determine the taxpayer's CZ status. Research CC IMFOLE for the Combat indicator on Line 11.

      If Combat indicator is "1", then the taxpayer is still serving in a combat zone. Any compliance activity such as assessing or collecting tax is prohibited. However, if the taxpayer has other issues or requests information, you may work these other issues and contact the taxpayer if needed. See IRM 5.19.10.6.5.8 Combat Zone Installment Agreement and 60 or 120 Day Agreement Requests.
      If Combat indicator is "2", then the taxpayer is no longer a combat zone participant. Follow normal IRM procedures to work the case. See IRM 5.19.10.6.3, Combat Zone Freeze Code.

    • Tax Court Cases. See IRM 5.19.1.4.10, Tax Court Cases.

    • Killed in Terrorist Action (KITA), Killed in Action (KIA), and Astronauts Killed in the Line of Duty. See IRM 5.19.1.4.11, Killed in Terrorist Action (KITA), Killed in Action (KIA), and Astronauts Killed in the Line of Duty.

    • Taxpayers Taken Hostage in Terrorist Action (HSTG). See IRM 5.19.1.4.12, Taxpayers Taken Hostage in Terrorist Action (HSTG)

    • Criminal Investigation Division (CID) Indicators on Balance Due Cases. See IRM 5.19.1.4.13, Criminal Investigation Division Indicators (CID) on Balance Due Cases.

    • Stopping a Full Paid PDIA. Send a Letter 2571C to stop a full paid PDIA. See IRM 21.3.12.4.5.2.1, Payroll Deduction Installment Agreements, for more information.

    • Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship, inquiries. Refer to the instructions on pages 3 and 4 of Form 1127 and IRM 5.1.12.26, Form 1127, Application for Extension to Pay Due to Financial Hardship, to address taxpayer inquiries.

    • Criminal Restitution Assessments on MFT 31 or BMF income tax return modules. These assessments are identified by TC 971 ac 102 and a TC 290, 298 or 300 with RC 141 to 150.. Follow procedures for "campus case actions" in IRM 5.19.1.4.15, Criminal Restitution Assessments.

  2. Collection and Installment notices (CPs 50x and 52x) that contain restricted interest and/or penalties will not have the correct balance due on the notice. There is a special paragraph on these notices that tell the taxpayer to contact Accounts Management for a complete pay off amount. If the taxpayer contacts Accounts Management for a pay off that includes restricted interest and/or penalties, prepare a Form 4442 for referral to the specialized unit that works these cases, see IRM 21.5.6.4.13,G- Freeze for additional guidance.


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