21.3.12  Accounts Management Balance Due Telephone Contacts

Manual Transmittal

September 10, 2013

Purpose

(1) This transmits revised IRM 21.3.12, Taxpayer Contacts, Accounts Management Balance Due Telephone Contacts.

Material Changes

(1) Formatting and made editorial changes throughout the document.

(2) IPU 12U1744 issued 10-18-2012 IRM 21.3.12 Editorial changes

(3) IPU 12U1863 issued 11-20-2012 IRM 21.3.12.1 Added references to Form 8821 and oral consent authorities.

(4) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.2(3) Clarified NSIA transfer criteria and procedures.

(5) IPU 12U1744 issued 10-18-2012 IRM 21.3.12.2(3) Changed should be offered to must be offered the options prior to transferring to NSIA.

(6) IPU 12U1744 issued 10-18-2012 IRM 21.3.12.2 Added IRM reference for guidance for working status 53 accounts.

(7) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.2(9) Clarified procedures for current year balance due returns with no other balance.

(8) IPU 13U1002 issued 05-29-2013 IRM 21.3.12.2 Clarified Masterfile resequencing process for e-file balance due returns.

(9) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.2 Added link to IRM 21.3.12.6.1 for ACS transfer procedures

(10) IRM 21.3.12.2 Removed statement regarding obtaining levy sources on Fresh Start agreements between $25,000 and $50,000.

(11) IPU 13U0306 issued 02-07-2013 IRM 21.3.12.2.1(8) Clarified instructions for addressing unfiled returns with an open TDI.

(12) IRM 21.3.12.3 Added reminder about Low Income Taxpayer Clinics.

(13) IPU 12U1863 issued 11-20-2012 IRM 21.3.12.3.1 Added procedures advising AM to have taxpayer mail Form 14039 to SFR in lieu of requesting fax.

(14) IRM 21.3.12.3.7(2)b Removed requirement for PPS assistors to consider partial pay installment agreements.

(15) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.4.1(4) Clarified procedures for computing payoff balances for payments submitted by EFTPS.

(16) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.4.1 Added Note that taxpayers can be referred to payment notation information on notice payment stub instead of verbally listing.

(17) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.4.3(6) Added link to IDRS TIF Processing Cycle Chart for inputting 60 - 120 day extensions.

(18) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.4.4(12) Changed criteria for streamlined agreements above $25,000 effective March 1, 2013.

(19) IPU 13U1002 issued 05-29-2013 IRM 21.3.12.4.4 Added link to IRM 5.19.1.5.5.3.

(20) IPU 12U1863 issued 11-20-2012 IRM 21.3.12.4.4.1 Added reference advising AM is not required to attempt a call back in these situations.

(21) IRM 21.3.12.4.4.1 Changed Example for clarification and added requirement to request missing pending IA information.

(22) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.4.5.1(2) Added links to IRM 5.19.1 exhibits for CC IAPND and IAREV.

(23) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.4.5.1 Added clarification about adding current year unassessed balance dues to an existing balance.

(24) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.4.5.1 Added reference to IRM 21.3.12.2(9) for IMF current year returns.

(25) IPU 12U1863 issued 11-20-2012 IRM 21.3.12.4.5.1(3) Removed reference to Letter 3217C to be used for unassessed modules.

(26) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.4.5.2 Removed paragraph (e) in (1) for clarity.

(27) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.4.5.2.1 Added instructions for taxpayers wanting to fax Form 2159 to AM.

(28) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.4.5.2.1(1) Revised PDIA procedures for clarity and removed reference to IRM 5.19.1.

(29) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.4.5.2.2(4)g Changed Form 433-D mailing address to CSCO locations.

(30) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.4.5.3(2) Clarified requirements for front end mirror assessments processing.

(31) IPU 13U1093 issued 06-13-2013 IRM 21.3.12.4.6 Removed financial analysis exception for PPS employees per a change to IRM 21.3.10.

(32) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.4.6 Added requirement to ask for pending IA information.

(33) IPU 13U0306 issued 02-07-2013 IRM 21.3.12.4.8 Added note for clarification on charging the user fee when the response to the CC IAGRE is IAORG.

(34) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.4.9 Added clarification on how IA payments are applied.

(35) IRM 21.3.12.4.9(5) Clarified that the address for mailing payments can be provided orally or in writing.

(36) IRM 21.3.12.4.10(8) Removed requirement for managerial review of open paragraphs in outgoing correspondence.

(37) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.4.11 Clarified BMF out-of-business installment agreement procedures.

(38) IPU 12U1863 issued 11-20-2012 IRM 21.3.12.4.12(10) Added reference to verbally provide CNC conditions for tolerance/deferral criteria.

(39) IPU 13U1002 issued 05-29-2013 IRM 21.3.12.4.12 Corrected CNC tolerance criterion for IRAF accounts.

(40) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.4.12(6) Update to IMF CNC criteria for closing accounts table.

(41) IPU 12U1744 issued 10-18-2012 IRM 21.3.12.4.12.1 Inserted note for managerial approval.

(42) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.4.12.2(5) Updated to BMF CNC criteria for closing accounts table.

(43) IPU 13U1002 issued 05-29-2013 IRM 21.3.12.4.12.2 Clarified CNC procedures for individuals responsible for business tax liabilities.

(44) IPU 13U1093 issued 06-13-2013 IRM 21.3.12.4.12.2 Corrected CNC dollar amount and made changes to BMF CNC procedures.

(45) IPU 13U0306 issued 02-07-2013 IRM 21.3.12.5.1 Removed duplicate procedures for payments by credit cards.

(46) IPU 13U0306 issued 02-07-2013 IRM 21.3.12.5.2 Clarified procedures to handle taxpayer problems with DDIAs.

(47) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.5.2(3) Added instructions for submitting Form 8546 and DDIA payment skip requests.

(48) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.5.2 Added reference to IRM 5.19.1.5.5.13 for preassessed DDIA inquiries.

(49) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.5.7(5) Reworded Note for clarification and to correct syntax error.

(50) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.5.7(8) Clarified procedures for responding to taxpayers with a defaulted IBTF Express Agreement.

(51) IPU 12U1744 issued 10-18-2012 IRM 21.3.12.5.9 Added reminder to leave ALN "11" when reinstating a PDIA.

(52) IPU 13U0842 issued 05-01-2013 IRM 21.3.12.6.1 Added reminder to address non-collection account issues before transferring a call to ACS.

(53) IPU 13U1002 issued 05-29-2013 IRM 21.3.12.6.1 Clarified procedures for when to transfer a call to ACS.

(54) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.6.1 Added ACS transfer procedures for FERDI accounts.

(55) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.6.3.1 Removed reference that Letter 278C automatically includes Form 656–B.

(56) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.6.3.3 Added link to COIC toll free phone numbers.

(57) IRM 21.3.12.6.3.3 Added TAS Form 911 referral criteria.

(58) IPU 13U0619 issued 03-27-2013 IRM 21.3.12.6.4(5) Reworded for clarification and to correct syntax error.

(59) IPU 12U1744 issued 10-18-2012 IRM 21.3.12.6.4.1 Corrected procedures for sending Form 4442.

(60) IPU 13U0306 issued 02-07-2013 IRM 21.3.12.6.4.4 Added for guidance for Insolvency Debt-Discharged, Written Off or Forgiven.

(61) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.6.4.4 Added link to IRM 21.3.12.6.1 for ACS transfer procedures.

(62) IPU 12U1863 issued 11-20-2012 IRM 21.3.12.6.6 Corrected sentence to read "we do NOT have the authority:"

(63) IPU 13U0306 issued 02-07-2013 IRM 21.3.12.6.6 Added time frame for levy release.

(64) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.6.6 Added link to IRM 21.3.12.6.1 for ACS transfer procedures.

(65) IPU 12U1863 issued 11-20-2012 IRM 21.3.12.6.7 Added reference to give phone number for lien pay off figure.

(66) IPU 13U0306 issued 02-07-2013 IRM 21.3.12.6.10 Added Balance Due Accounts Involving Identity Theft.

(67) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.6.10 Added link to IRM 21.3.12.6.1 for ACS transfer procedures.

(68) IPU 12U1744 issued 10-18-2012 IRM 21.3.12.6.11 Clarified when to transfer call to NSIA on deceased taxpayer's account.

(69) IPU 13U1206 issued 07-09-2013 IRM 21.3.12.6.11 Added reference to Form 1127.

Effect on Other Documents

IRM 21.3.12, Accounts Management Balance Due Telephone Contacts, dated August 31, 2012 (effective date 10-01-2012) is superseded. IRM Procedural Updates (IPUs): 12U1744 issued October 18, 2012, 12U1863 issued November 20, 2012, 13U0306 issued February 7, 2013, 13U0619 issued March 27, 2013, 13U0842 issued May 1, 2013, 13U1002 issued May 29, 2013, 13U1093 issued June 13, 2013 and 13U1206 issued July 9, 2013 have been incorporated into this IRM.

Audience

Accounts Management employees who answer collection telephone contacts

Effective Date

(10-01-2013)

Ivy S. McChesney
Director, Accounts Management
Wage and Investment Division

21.3.12.1  (11-20-2012)
Overview

  1. The purpose of this IRM section is to provide Accounts Management customer service representatives (CSRs) with the required procedures for the resolution of Individual Masterfile (IMF) and Business Masterfile (BMF) balance due accounts on the toll-free customer assistance phone line. It is divided into five sections:

    1. Balance Due Research- outlines the needed research to be completed on all balance due inquiries.

    2. Taxpayer Disagrees with Notice or Balance Due contains links to other IRM sections that give instructions for resolving Automated Substitute for Returns (ASFR), IRC 6020(b), Automated Underreporter (AUR), Audit, Math Error, Missing Payment, Innocent Spouse, FUTA assessments, CAWR assessments, and Penalty and Interest Abatement issues.

    3. Determine the Earliest the Taxpayer Can Full Pay contains instructions for payment agreements which includes, full pay agreements, streamlined Installment Agreements, Currently Not Collectible (CNC) exception procedures, and instructions if financial analysis is required.

    4. Taxpayer Calling about an Existing Or Defaulted Installment Agreement contains procedures for accounts with an existing or defaulted Installment Agreements.

    5. Accounts Requiring Special Handling 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) and other situations that require special case processing. Full cause and cure, and compliance check is not necessary for transfer or referral of contact

  2. For purposes of identification, preventing unauthorized disclosures of tax information and protecting the taxpayer's right to representation, follow procedures in IRM 21.1.3.2.3, Required Taxpayer Authentication, before disclosing any account information.

    • Third party designees (check box authority), Forms 8821, Tax Information Authorization, or authorization received through oral consent do not have the authority to enter the taxpayer into an extension or a formal installment agreement for either IMF or BMF. See the Disclosure Website for more information on what can be disclosed to the various authorities.

    • Always check the authority level of a valid Power of Attorney, per CC RFINK and CFINK, before granting an extension or an installment agreement.

      Note:

      If both (BMF and IMF), both EIN and SSN must be reviewed to ensure POA is applicable for multiple entities.

21.3.12.2  (10-01-2013)
Balance Due Research

  1. When a taxpayer calls stating they have a balance owed it is necessary to access the account. Access the account to determine if there have been changes to the collection status, to provide the taxpayer correct payoff figure, determine if the user fee has been paid, if offsets have occurred or any other changes have been made on the account that will affect the balance owed. To provide the correct mailing address the account needs to be accessed to determine the BOD as well as the state.

  2. Before discussing any type of payment arrangement it will be necessary to fully research the account. This research includes:

    1. What is the current status on the account? See IRM 21.3.12.6, Accounts Requiring Special Handling.

      If And Then
      Status 22 One or more modules on CC TXMOD or SUMRY show status 22 Refer to IRM 21.3.12.6.1, Status 22 Modules, and if appropriate, transfer the call to ACS.
        The status 22 module is only appearing on CC IMFOLI/T and there are no modules on CC TXMOD or SUMRY that show status 22 Research the account to determine if the account was made Currently Not Collectible and follow normal balance due procedure.
      Status 24 There are no modules in status 22 or status 26, assigned to an RO These cases are to be worked following normal collection procedures. Exception: If the account has a FERDI indicator, transfer to FERDI in Jacksonville ACS. Refer to the Telephone Transfer Guide for transfer number.
        The collection assignment number shows that account is assigned to an RO. Provide the contact information for the RO assigned to the case. See RO by TSIGN/ZIP/State on the Who/Where tab on SERP
      Status 26IRM 21.3.12.6.2Status 26 Modules The collection assignment number on CC TXMOD/SUMRY shows 8000 in the last four digits This account is assigned to SFR. Work case based on the procedures in IRM 21.3.12.3.1, Substitute for Return (SFR). If taxpayer agrees with balance follow normal collection procedures.
        The collection assignment number on CC TXMOD/SUMRY shows 35XX6XXX These cases are in Manually Monitored IAs. See IRM 21.3.12.4.5.4, Manually Monitored Installment Agreement.
      Status 53 The closing code is 03,06,09,10,12,13,39 (See IRM 5.19.9.3.2, FPLP Selection Criteria), These accounts have either been shelved or closed as CNC but collection action can still be taken, such as the Federal Payment Levy Program (FPLP). Follow normal balance due procedures. Taxpayer may still meet criteria for normal CNC closure or installment agreement. See IRM 21.3.12.4.4 (6), Taxpayer Can Make Payments- Installment Agreements, for procedures for working accounts in status 53.
      Status 71 - OICIRM 21.3.12.6.3Status 71 -Y Freeze or Taxpayer's Issue is an Offer In Compromise (OIC) There is a -Y freeze on the account Follow the procedures in IRM 21.3.12.6.3.5, Taxpayer has Subsequent Liability After an Approved OIC, if the taxpayer's issue is related to the Offer.
      Status 72 - Bankruptcy There is a TC 520 on the module Follow the procedures in IRM 21.3.12.6.4, Status 72 Account(s) or Taxpayer Has a Bankruptcy Issue.
      Balance involves Trust Fund Recovery Penalty- MFT 55/13   Follow normal collection procedures. IRM 21.3.12.3.8, Trust Fund Recovery Penalty.

    2. What is the aggregate assessed balance (CC SUMRY) on the account? The balance on the account will help determine what type of agreement the taxpayer qualifies for or if the call needs to be transferred. See IRM 5.19.1.5, Methods of Payment, for dollar criteria on all available Installment Agreements. This includes reviewing CC INOLES to research for all cross reference accounts. If the taxpayer is a Sole Proprietor (Schedule C filer), check the EIN to determine if there are any balances that need to be addressed using CC BMFOLI. IMF employees who are not trained in BMF can transfer the call to #92025, ONLY if there are open TDIs/balances under the EIN that must be addressed. BMF CSRs must also check the IMF side for possible balances owed. If there is an open TDI on the IMF side, IMF assistors must handle the TDI issue prior to transferring the call to BMF. Only transfer calls to BMF if the IMF side of the account qualifies for a payment agreement at the time of the transfer.

      Note:

      No matter what the balance is on the account, IMF taxpayers are eligible for Full Pay agreements up to 120 days.

      Reminder:

      Taxpayers who are in−business with an open trust fund tax filing requirement are not eligible for a 10 to 120 day full pay agreement for past due trust fund taxes.

    3. Are all returns filed for which the taxpayer is responsible for? See IRM 21.3.12.2.1, Full Compliance Check.

    4. Is there any other account action that must be addressed or would prevent setting up of a payment arrangement? This would include any freezes such as a -A freeze for an amended return. See IRM 21.5.6.4, Freeze Code Procedures. If there is a situation such as this, ask the taxpayer probing questions to see if there is balance that needs to be included in the agreement or will possibly pay off the balance sooner.

    5. Determine if BMF balance due includes trust fund modules and if taxpayer has any open trust fund tax filing requirements. For the purpose of this IRM section, the term "trust fund account" applies to Masterfile Tax Code (MFT) 01, 03, 09, 11, 12, 14, 16 and 72 accounts. The type of BMF account the taxpayer owes will determine the type of agreement available.

  3. Transferring calls to Non-Streamlined Installment Agreement (NSIA) Application (IMF only): It is the responsibility of the CSR, staffing a streamlined installment agreement (SIA) application, to target the problem by asking the necessary questions. The CSR must ensure that the taxpayer cannot be placed into a full pay up to 120 day agreement, a SIA or does not meet CNC exception criteria prior to transferring the call. CSRs must determine if the account meets NSIA criteria before transferring calls to the non-streamlined application.

    Reminder:

    If the taxpayer owes more than $25,000, it is not an automatic transfer to NSIA.

    1. NSIA transfer criteria are:
      1. The SUMRY balance is over $25,000 and the taxpayer does not want an extension to pay or cannot make a lump sum payment to qualify for a streamlined agreement. See (2) below.
      2. The SUMRY balance is $25,000 and under but the taxpayer cannot make the minimum payment that would have the aggregate assessed balance full paid within the 72 months, or cannot make increasing payments.
      3. The balance will not be full paid within the CSED.
      4. Taxpayer can not make payments but DOES NOT qualify for CNC exception criteria. See IRM 21.3.12.4.12.1, Exception Criteria, and (c) below.
      5. Taxpayer can answer questions relating to their monthly income and expenses while on the telephone. See (4) below.

      Reminder:

      For employees with SIA authority only, once you determine that all NSIA criteria is met, advise the taxpayer that their account exceeds your authority and transfer the call.

    2. There are several options that must be offered to the taxpayer prior to transferring the call if the balance is over $25,000.
      1. Can the taxpayer full pay the account in 120 days? There is no dollar criterion for a full pay in 60–120 day agreement.
      2. Can the taxpayer make an initial lump sum payment to bring the balance below the $25,000, followed by a monthly amount that will meet SIA criteria? If the taxpayer can make a lump sum payment, set the lump sum payment as the first payment and the second as the SIA amount. If they can’t make a lump sum payment, advise the caller they need to be transferred to NSIA and a Federal Tax Lien may be filed.

    3. If the taxpayer is having a temporary financial hardship, advise the taxpayer the IA can be set up to have the payments increase over time. Compute the amount needed to qualify for a SIA. Structuring the agreement this way will allow the taxpayer to qualify for a SIA and enable the taxpayer to make lower payments to begin the agreement. See IRM 5.19.1-7(5), IDRS Input of Installment Agreements. Ask questions pertinent to the inquiry in order to obtain the information.

    4. Prior to transferring the call to NSIA, ask the taxpayer if they can answer questions relating to their monthly expenses. Examples would include: mortgage/rent payments, utility bills, food, and car payments. If the taxpayer cannot provide this information do not transfer and see IRM 21.3.12.4.6, Proposal Does Not Meet Guaranteed or Streamlined Installment Agreement Criteria.

    5. If the taxpayer currently has a non-streamlined agreement and is in status 60, it doesn’t mean that the call should automatically be transferred. The taxpayer’s request may be one that can be handled on a SIA balance due application. For example:
      1.If the taxpayer is requesting a payoff figure, a CSR on a SIA application can provide this information. See IRM 21.3.12.5.1, Taxpayer Requests An Installment Agreement Payoff Amount.
      2.Requests for changes on the payment due date or requests for a skip can be handled on a SIA application. See IRM 21.3.12.5.4, Request To Allow A Payment Skip.

    Only calls that meet NSIA criteria, as listed above, should be transferred to NSIA unless otherwise directed by the IRM.

  4. If the taxpayer is interested in filing an Offer In Compromise see IRM 21.3.12.6.3.1, Taxpayer Is Requesting an OIC.

  5. Obtaining or verifying Levy sources (IMF & BMF): Levy sources should be obtained or verified only when a financial statement is being taken by an Account Management CSR who staffs the NSIA application. All other Accounts Management CSRs should not obtain or verify levy sources. Assistors working NSIA applications are not required to obtain levy sources on the following:

    • AMS or CC ENMOD indicate levy sources were confirmed or updated within the last three months or 13 cycles

    • The total accrued balance is below deferral. (See paragraph 6 for deferral amounts)

    • When transferring the call to ACS

    • Status 26 and the case is assigned to a RO

    • Status 71- OIC

    • Status 72- bankruptcy only (review the TC 520 closing code to determine if TC 520 is for a bankruptcy and not litigation)- If there is one balance due module in a status other than 72, levy sources must be taken

  6. Obtaining or verifying phone numbers (IMF & BMF): Is required on IMF and BMF accounts with an aggregate balance (CC IMFOLI/BMFOLI) above deferral level. Obtain phone numbers on unassessed balances above deferral, if a full pay or installment agreement has been established. Accounts are considered above deferral if the aggregate balance for:

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Obtain or verify one best day time phone number and input the phone number or history of verification onto IDRS. If IDRS or AMS history indicates the telephone number was secured, verified, or updated within the past 13 cycles, there is no need to secure or verify a telephone number.

    Exception:

    CSRs are not required to obtain or verify telephone numbers on accounts in the following:

    • IMF assessed balance due is $100,000 or more, except for request for extensions to pay.

    • Status 22- CSRs transferring cases to ACS without ACS access. See IRM 21.3.12.6.1, Status 22 Modules.

    • Status 02/03- with no other account balances over deferral.

    • Status 26- If the account is assigned to a RO see IRM 21.3.12.6.2, Status 26 Modules.

    • Status 71- See IRM 21.3.12.6.3, Status 71 -Y Freeze or Taxpayer's Issue is an Offer In Compromise (OIC).

    • Status 72- See IRM 21.3.12.6.4, Status 72 Account(s) or Taxpayer Has a Bankruptcy Issue.

  7. Cause and Cure (IMF & BMF) must be addressed and notated on AMS, unless the taxpayer corrected the problem and the current year return is full paid or a refund return. Review comments on AMS to determine if Cause and Cure was previously performed. If previously completed, then Cause and Cure is not necessary unless new delinquencies occurred. If the IA is in good standing and the taxpayer is calling for an unrelated issue or is not revising the IA, cause and cure does not need to be addressed. Advise taxpayer to avoid future balance dues by ensuring they have sufficient withholding or estimated tax/FTD payments to satisfy any future tax liabilities. Cause and Cure is not required if the call is being transferred and the taxpayer's issue is not being worked by the AM CSR.

    Cause Cure
    IMF If account research determines the taxpayer is under withheld
    • Explain that Form W-4 may need to be corrected.

    • If the taxpayer has a history of under withholding of federal tax for IMF returns refer to IRM 5.19.11.6.1.1. Referral Criteria. for possible WHC referral.

    • If the taxpayer meets the criteria refer to IRM 5.19.11.6.1.2. Completing Form 9045.

    IMF Taxpayer should be making Estimated Tax Payments
    • Explain that the taxpayer may need to make ES payments. If needed offer to send the taxpayer Pub 505, Tax Withholding and Estimated Tax.

    • If the taxpayer's situation has not changed for the current filing year (for example: The taxpayer is still self employed), make ES payments a condition for granting the agreement. Annotate AMS stating TP is required to make ES payments. For example: "ESPYMTREQD"

    BMF The taxpayer is not making FTDs as required
    • Advise the taxpayer of FTD requirements. IRM 21.7.2.3.4, Deposits.

    • Offer to send Pub 15, Employer Tax Guide

    • For all businesses, with the exception of a sole proprietorship, explain that the officers or partners of the business can be held personally liable for unpaid trust fund taxes and may be assessed a Trust Fund Recovery Penalty.

  8. When you receive an inquiry about a current year balance due and find no record of the balance due account, ask the taxpayer if they filed electronically. If the taxpayer responds the return was filed electronically:

    • Use CC TRDBV or MeF through EUP to research.

    • When the TRDBV screen shows the account as “MF RESEQUENCED”, the taxpayer has a balance due account; page down to the end of the form and the refund or balance due amount is displayed.

    • Follow normal procedures for setting up an Installment Agreement using CC IAGRE/IAPND. IRM 21.3.12.4.5.1, Pre-assessed Installment Agreements (IAPND) and Unassessed Modules.

      Reminder:

      Balance due electronically filed returns do not post to the master file until cycle 20, or one cycle after full payment posts, whichever occurs first.

  9. When an IMF taxpayer calls in reference to a current year balance due return and IDRS shows no other balance due, ask the taxpayer if they filed:

    If Then
    The taxpayer has not mailed the return and the balance is $50,000 or less Advise them to attach Form 9465, Installment Agreement Request, if available, or correspondence to the front of their tax return requesting the installment agreement. Advise the taxpayer to include a payment amount and date.
    The taxpayer has not mailed the return and the balance is greater than $50,000 Advise them to attach Form 433-F, Collection Information Statement, and Form 9465, Installment Agreement Request, if available, or attach correspondence to the front of their tax return requesting an installment agreement. Advise the taxpayer to include a payment amount and date,
    The taxpayer already mailed the return, knows the balance due amount and the agreement request meets streamlined criteria or will full pay within 60–120 days Establish the installment agreement using command code IAGRE which defaults to IAPND and follow normal collections procedures. See IRM 5.19.1-9, IDRS Input of Pre-assessed IAs and Full Pay Agreements. Explain to the caller when the return is processed they will be receiving the first notice as required by law and no response is necessary.
    The taxpayer already mailed the return, knows the balance due amount and the agreement request does not meet streamlined criteria
    SIA employees, working streamline applications, if the taxpayer can provide basic expense information transfer call to NSIA if the taxpayer can not full pay in 120 days.
    NSIA employees, complete the required financial analysis and if the taxpayer qualifies, establish the installment agreement using command code IAGRE which defaults to IAPND. See IRM 5.19.1-9, IDRS Input of Pre-assessed IAs and Full Pay Agreements.
    If the taxpayer already mailed the return and is unsure of the amount owed Research IDRS to determine if the return is received using CC TRDBV and/or, FFINQ. Also use MeF system by accessing it through EUP. If the balance can not be determined, advise the taxpayer to call back when they receive the first notice. If the balance due can be obtained, follow normal collection procedures for setting up a payment agreement.
    The taxpayer is a first-time filer Research the account to determine if the account has been established on IDRS.
    • If the account has not yet been established on IDRS. Explain to the taxpayer that the IA cannot be set up at this time. Advise the taxpayer to contact us when they receive the first notice

    • If the account has been established, follow normal collection procedures.

21.3.12.2.1  (02-07-2013)
Full Compliance Check (IMF & BMF)

  1. Full Compliance Check (FCC) is required on all balance due calls to identify if the taxpayer filed and paid all types of tax, penalties and interest for which the service has identified them as potentially liable. Research the account for return delinquency modules, including cross-reference taxpayer identification numbers displayed on all Master Files. If a taxpayer is self employed and has a cross reference Employer Identification Number (EIN), research the BMF side of the account to determine if the taxpayer has any outstanding balances/open Taxpayer Delinquency Investigations (TDI) that must be addressed. For sole proprietors, if research shows there are balances due or return delinquencies on both the IMF and BMF accounts, IMF can transfer the call to BMF #92025.

    Note:

    Prior to transferring the call to BMF ensure all IMF issues have been addressed with the taxpayer. For example open TDI. Follow normal procedures for determining if the taxpayer is liable. If the taxpayer is required to file do not transfer the call. Determine if the taxpayer is required to file following normal procedures. If the TDI can be closed take the appropriate action and then transfer the call so the IA can incorporate the IMF and BMF accounts. If the TDI cannot be closed, explain to the taxpayer they cannot have an IA at this time and follow normal TDI procedures.

    Always review comments on AMS to determine whether a FCC was previously performed within the last 30 days. If annotated within 30 days no full compliance check is needed. Open return delinquency modules are:

    • IMF- TC 140 or TC 474 in IDRS Status Codes 02, 03, or 06 (closed with a TC 597 cc 12 or TC 598) and no older than 6 years from the current calendar year.

    • BMF-TC 140 or TC 474 in IDRS Status Codes 02, 03 or 06 (closed with a TC 590 cc 19, 593, 597 or 598) for the business, and not older than 6 years from the current calendar year.

  2. Determine liability based on the information in IRM 5.19.2.5.4.5IMF-Determining Liability.

    If the determination shows Follow the procedures in
    Taxpayer not liable. IRM 5.19.2.5.4.5.1, IMF Response Taxpayer Not Liable.
    A refund due. IRM 5.19.2.5.4.5.2, IMF Refund Due.
    Little or no tax due. IRM 5.19.2.5.4.5.3, IMF Little To No Tax due.
    Taxpayer liable. IRM 5.19.2.5.4.5.4, IMF Taxpayer Liable . If account is in status 02, attempt to input CC ASGNI. If error message is received and ASGNI cannot be input annotate attempt on AMS.
    Special situations, e.g deceased, incarcerated etc. IRM 5.19.2.5.4.5, IMF- Determining Liability.

  3. If the IMF TDI can not be closed and the taxpayer is requesting an IA, take the following actions on the balance due account:

    1. Input a STAUP for the next notice status for 9 cycles.

    2. Document on AMS the return request and deadline.

    3. Advise taxpayer an IA can not be granted until all required returns have been filed.

    4. Advise taxpayer to call back in approximately 8 weeks. This will allow time for posting the return and the closing of the TDI.

    5. Advise taxpayer how to make and notate interim payments. See IRM 21.3.12.4.1(6 and 7), Can Full Pay Balance Due Now (Payoff within 1 to 10 days). Explain to the taxpayer that making interim payments would be in their best interest, until an IA can be established.

  4. IMF taxpayers may still qualify for the Full Pay within 60 to 120 day agreement even with an open TDI. IRM 21.3.12.4.3 (5), Taxpayer Can Full Pay Within 60 to 120 Days - IMF, BMF Out-of-Business or BMF In-Business Non-Trust Fund Accounts.

  5. AM employees including those that work NSIA do not have the authority to open a TDI.

  6. BMF-Establish whether the taxpayer filed all returns identified as delinquent. Determine liability based on the information in IRM 5.19.2.5.5.4, BMF Determining Liability.

    1. If the taxpayer states they are out of business, AM assistors are not required to research the account to determine if the taxpayer is liable to file. Assist the taxpayer with filing and/or advise taxpayer to respond to the notice with supporting documentation to validate the reason for not filing the return. Document AMS with the pertinent information.

    2. It is not necessary to create a TDI module or ask for a tax return on modules not in TDI status if it has been determined the taxpayer is not required to file. In addition, employees are not required to request a return for the current processing year until after 20 weeks past the return due date.

  7. To address unfiled current year IMF/BMF returns, see the table below.

    If Then
    • IMF- Before April 15th due date

    • BMF-Before the return due date.

    Ask the taxpayer if the return was filed:
    • If "Yes", ask if it is a balance due or refund return

    • If a balance due return and filed less than ten weeks ago, include the liability in the case disposition

    • If "No", continue with normal case processing; securing the return is not required

    IMF and BMF- A TC 460 is present for the current year return and it is before the extension due date
    • Ask if the return is going to be a balance due return or refund return.

    • If a balance owed, this will have to be included in the overall balance and payment agreement if appropriate. Set the agreement up to include the unassessed module, using Agreement Locator Number (ALN) XX32, input a "1" in the assessment indicator. Annotate AMS with the year, for example "UM30YYYY" , and amount of the balance owed.

    IMF and BMF- After April 15th due date and there is no TC 460 on the module or TC 460 is present on the current year module and October 15 is past Ask the taxpayer if the return was filed:
    • If "Yes", ask if it is a balance due or refund return

    • If a balance due return and filed less than ten weeks ago, include the liability in the case disposition. Set the agreement up to include the unassessed module, using ALN XX32, input a "1" in the assessment indicator. Annotate AMS with the year, for example "UM30YYYY" and balance owed.

    • If "No", and you determine the taxpayer is not required to file, continue with normal processing.

    • If the taxpayer has not filed the return but indicates the return will be a balance due, you cannot grant an installment agreement without securing the current year return. Notate on AMS taxpayer's statement of potential balance due amount and deadline agreed upon for return submission. If taxpayer indicates the current tax year return will either be a refund or little or no tax due, notate on AMS taxpayer's statement then complete installment agreement.

  8. For IMF taxpayers, if the return is not filed but no TDI has been open, address the unfiled return by advising the taxpayer of the missing return and the possible need to file. Then continue with normal collection procedures for balances owed.
    For BMF accounts, taxpayers must be in compliance in filing all tax returns. Determine if an open TDI exists. If there is no open TDI follow normal collection procedures.

  9. Annotate FCC completed on AMS. If the returns are missing but there are no open TDIs annotate AMS that the missing returns have been addressed.

21.3.12.2.2  (10-01-2012)
Explaining Failure To Pay (FTP) Penalty

  1. Many times a taxpayer will request an explanation on how the penalties are assessed on a balance owed.

  2. Failure to pay penalty is charged on unpaid tax only (Unlike interest which is charged on the total balance owed). For each month or part of a month the tax remains unpaid the taxpayer is subject to FTP penalty. The normal rate for FTP penalty is 1/2% per month. The total FTP charged can not exceed 25% of the total tax owed.

  3. The penalty is charged for the month if the balance remains unpaid from the first day of the month. This means if the taxpayer owes on 4–15 and then full pays the account on 5–16, the taxpayer will owe 2 months of FTP. This is because as of the first day of the next month (5–15) the balance went unpaid.

    Example:

    If the taxpayer owes $1,000.00 dollars and full pays the account on 7–18, the taxpayer will owe $20 in FTP. The tax was not paid for April, May, June and part of July, therefore 4 months of FTP will be charged at 1/2% (.005) for each month for a total of 2%.

    1000 X [(4 months late) X 1/2%]= $20.00

  4. The FTP penalty will increase to 1% for any month following:

    • 10 days after the IRS gives notice of intent to levy. The CP 504 is considered a notice of intent to levy.

    • ACS sends a LT11. This is identified by a TC 971 ac 069. See IRM 20.1.2.2.8.1.1, 1 Percent Penalty Rate- IRC 6651(d) for more information.

  5. FTP is module specific. This means the amount of FTP charged is unique to each module. All modules are not necessarily charged at the same rate.

  6. For any taxpayer that files a return on or before the due date (including extension) and requests an installment agreement the penalty will decrease to 1/4 percent for any month that begins on or after the taxpayer has entered into an installment agreement. Taxpayers charged a Failure to File Penalty are not eligible for the FTP decrease. The date the agreement goes into effect is identified by a TC 971 ac 063. The 1/4 percent rate will end the month following a termination of the agreement. See IRM 20.1.2.2.8.1.2, 1/4 Percent Penalty Rate- IRC 6651(h), for more information.

  7. CC INTSTD will show the current FTP rate and accruals.

21.3.12.3  (10-01-2013)
Taxpayer Disagrees With the Notice or Balance Due

  1. Follow the procedures in this sub-section when contacted by a taxpayer who disagrees with a notice received or the balance due on the account.

    Note:

    If the taxpayer has other balance due modules that are not in dispute, you must resolve them before you terminate the call. This means resolving the balance due through an extension, IA, or CNC. The unagreed balance due may be included in the agreement with the understanding it will be eliminated if the taxpayer's claim is sustained.

    Reminder:

    If a taxpayer is not represented, he or she 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. Some LITCs also provide services to taxpayers who speak English as a second language, including education about taxpayer rights and responsibilities, and consultations on individual tax issues. LITC 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. Although there is at least one LITC in each state, Puerto Rico, and the District of Columbia, 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. If appropriate, you can refer taxpayers to Publication 4134, but you can not direct taxpayers to a specific LITC.

21.3.12.3.1  (11-20-2012)
Automated Substitute for Return (ASFR)

  1. An ASFR assessment can be identified by the following:

    • TC 150 for .00 with literal "SFR" next to it

    • Tax class 2 with Doc Code 10 in the DLN

    • Blocking series 000-299

    • No AGI present on the module

    .

  2. If the taxpayer disputes a balance due as a result of an Substitute For Return (SFR) assessment, research the account to determine if the taxpayer filed a return.

    • A TC 599 with cc 88 on the account indicates a no response to ASFR notifications and the account was assessed by default. If the account shows a TC 599 with cc 88, advise them to prepare and file an original return showing the correct income, exemptions, filing status, and deductions. See IRM 4.13.7-1, ASFR-Reconsideration Returns- Centralized Processing Sites, to provide the taxpayer with the correct mailing address.

    • A TC 599 with cc 89, taxpayer agreed to the ASFR assessment or filed an original return.

      Note:

      If the taxpayer files another return after TC 599 cc 89 is input, it will be considered an amended return, not a reconsideration.

    • If the taxpayer disputes the assessment based on Identity Theft, see IRM 5.19.1.9.5, Identity Theft Automated Substitute for Return (ASFR) and Substitute for Return (SFR). AM is to follow the procedures in "the taxpayer wants to mail ID theft documentation" section of the If/Then chart. AM will not accept a faxed Form 14039, Identity Theft Affidavit, in these situations. The taxpayer is better served having the form mailed directly to SFR along with any supporting documentation.

  3. If taxpayer has filed a tax return under the spouse's SSN but there is an SFR assessment on the taxpayer's account:

    1. Confirm tax return is filed under spouse's SSN and all of the income for both taxpayers is included on the joint return. Verify this by reviewing CC IRPTR for both spouse's and comparing them to the joint return. Also determine if the taxpayer is crossed referenced on CC INOLES. If the cross reference is not present, input a TC 017, see IRM 3.13.5.132, Add, Delete or Change Spouses' TIN (generates a TC 017).

    2. If all income is reported on the joint return, input a TC 470 with cc 90 on the SFR account to prevent notice issuance and offsets into the account. Create a Form 4442 providing both SSNs and forward to:
      Brookhaven SFR unit for SB/SE cases.
      Fresno SFR unit for W & I cases.

    3. If all of the income is not included, advise the taxpayer they need to amend the joint return to reflect the appropriate income. Input CC STAUP for six cycles on the SFR account to next notice status.

    4. Document information on AMS.

  4. If the taxpayer wants to enter a payment agreement for any balance due including the SFR assessment, follow the procedures in IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay.

  5. For more information on taxpayer disputes involving a balance due as a result of a SFR assessment IRM 5.19.1.3.3.2, Adjusting Tax for a Balance Due.

21.3.12.3.2  (10-01-2012)
Returns Filed Under IRC section 6020(b)

  1. When a taxpayer fails to file required returns, files false or fraudulent returns, IRS prepares returns under IRC section 6020(b) and processes them as originals. A 6020(b) return is identified on a tax module by the literal 6020(b) at the end of the TC 150 Document Locator Number (DLN), Computer Condition Code (CCC) 4 and certain closing codes posted with TC 59X. Some of the most common closing codes are 08, 09, 38, 39, 63, and 64.

  2. If the taxpayer disputes a balance due as a result of a return filed under IRC section 6020(b), take the following actions:

    1. Advise them to prepare and file an original return.

    2. Input TC 470 cc 90 if there won't be a balance owed after the taxpayer's return posts. This will allow time for the return to be processed and prevent offsets.

    3. If the taxpayer is going to still have a balance owed after the filing of the return, continue with normal collection procedures.

    4. Document AMS with the taxpayer's name, position and promise to file date with form as well as tax period and balance due amount if applicable.

  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.

21.3.12.3.3  (02-16-2012)
Automated Underreporter (AUR) CP 2000

  1. If the taxpayer disputes a balance due as a result of an AUR assessment, the taxpayer must substantiate the reason for their disagreement with the AUR assessment.

  2. If the taxpayer requests a copy of the AUR notice, follow procedures in IRM 21.3.1.4.56, Copies of CP 2000/2501/2893C.

  3. If the taxpayer's contact is in reference to a CP 2000, follow the procedures in IRM 21.3.1.4.55, Resolving or Referring Underreporter Cases.

  4. If the taxpayer wants to enter into a payment agreement for any balance due including the AUR assessment, follow the procedures in IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay.

  5. If the taxpayer wants to enter into an agreement but the assessment has not posted to IDRS, see IRM 21.3.12.4.5.1, Pre-assessed Installment Agreements (IAPND) and Unassessed Modules.

  6. 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.

21.3.12.3.4  (10-28-2010)
Audits

  1. If the taxpayer disputes a balance due as a result of an audit assessment, take the following actions:

    • If the taxpayer understands the audit issue, refer to IRM 4.13.2.3, Role of Contact Employees when a Reconsideration Request is Received and the Examination was Performed in the Area Office or Campus Examination Function.

    • If the taxpayer needs a copy of the audit report, refer to IRM 21.5.10.4.4, Copies of Audit Reports.

  2. If the taxpayer wants to enter a payment agreement for any balance due including the audit assessment, follow the procedures in IRM 21.3.12.4, Determine the Earliest The Taxpayer Can Full Pay.

21.3.12.3.5  (10-17-2011)
Math Errors

  1. If the taxpayer disputes a balance due as a result of a math error and can substantiate why the math error assessment is not correct, refer to IRM 21.5.4.4.4, Math Error Substantiated Protest Processing.

  2. If the taxpayer disputes a balance due as a result of a math error but cannot substantiate why the math error assessment is not correct, refer to IRM 21.5.4.4.5, Math Error Unsubstantiated Protest Processing.

    Note:

    Under IRC Sections 6213(b)(2)(A), math errors may be assessed without using the deficiency procedures, but the taxpayer has 60 days from the issuance of a math error notice to request abatement and trigger the deficiency procedures. Under IRC Sections 6213(b)(2)(B), collection is stayed during the 60 days.

    Note:

    IRC Sections 6213(b)(2)(A) and (B) do not apply to math errors on employment tax returns or certain excise tax returns that are not subject to the deficiency procedures. Refer to IRM 21.7.2.1, Employment and Railroad Tax Returns Overview, for more information on employment tax returns.

21.3.12.3.6  (10-17-2011)
Missing Payment

  1. If the taxpayer disputes a balance due as a result of a missing payment or Federal Tax Deposit (FTD), attempt to locate the payment per IRM 21.5.7.3, Missing Payments Research.

  2. If the payment is found, refer to IRM 21.5.8.4, Credit Transfer Processing.

21.3.12.3.7  (10-01-2013)
Innocent Spouse

  1. If the taxpayer disputes owing a balance due because they are an innocent spouse, follow procedures in IRM 21.6.8.7(5), MFT 31 Procedures.

  2. If the spouse requests an installment agreement and there is an unreversed TC 971 ac 065 (Innocent Spouse request completed/reversed) on any balance due module, take the following actions:

    1. Follow normal procedures to determine if the taxpayer qualifies for an installment agreement, but exclude any module with an unreversed TC 971 ac 065; establish the installment agreement as an Manually Monitored Installment Agreement (MMIA) see IRM 21.3.12.4.5.4, Manually Monitored Installment Agreements.

    2. When determining if the installment agreement will be full paid within the CSED, include all modules including those with TC 971 ac 065. The CSED is suspended during the Innocent Spouse determination. However, we must determine if the account will be full paid within the CSED if the determination is to disallow the claim and the TC 971 ac 065 is reversed If the account will not full pay within the CSED, NSIA assistors should follow partial pay installment agreement procedures in IRM 5.19.1.5.6, Partial Payment Installment Agreement (PPIA).

    3. If the taxpayer qualifies for an installment agreement, see IRM 21.3.12.4.5.4, Manually Monitored Installment Agreements.

    4. Once the Innocent Spouse determination is made, and the TC 971 ac 065 is reversed, this MMIA agreement can be input on IDRS.

    5. If the Innocent Spouse claim is later denied, and the taxpayer requests to add this new liability to the installment agreement, follow normal procedures for adding a new liability.

21.3.12.3.8  (10-01-2012)
Trust Fund Recovery Penalty (TFRP) Assessments

  1. The Service, under IRC 6672, is permitted to assess a Trust Fund Recovery Penalty (TFRP) against any person required to collect, account for and pay over taxes held in trust who willfully fails to perform any of these activities, or willfully attempts to evade or defeat any such tax or its payment. This penalty applies to employers who are required to file employment tax returns and are responsible for withholding Federal Tax from their employees and depositing the tax timely. TFRP is a “pecuniary” penalty, meaning the government has suffered an actual monetary loss for unpaid trust fund taxes. The penalty is equal to the total amount of tax evaded, not collected, or not accounted for and paid over. For more information, see IRM 5.19.14, Trust Fund Recovery Penalty (TFRP).

  2. The responsible person may be one or more of, but not limited to, the following:

    • officer or employee of a corporation

    • partner or employee of a partnership

    • employee of a sole proprietorship

    • corporate director

    • surety lender

    • Limited Liability Company (LLC) member, manager, or employee

    • other person(s) or entity outside the delinquent business

    • responsible parties within a PSP:
      a. Professional Employer Organization (PEO)
      b. responsible parties within a PEO
      c. responsible parties within the common law employer (client of PSP/PEO)

  3. When more than one individual is assessed a TFRP, each responsible party may be assessed all or only a portion of the unpaid trust fund liability. Liability for each party is determined for each tax period with unpaid trust fund liability. A responsible party may have left the business and only owe for tax periods during the time they were involved with the business.

  4. Though TFRP may be assessed against several individuals, the total liability is collected (ultimately retained) only once from either:

    • the business

    • one or more responsible individuals, or

    • the business and one or more responsible individuals

    Example:

    If the total business unpaid trust fund liability is $20,000, the business remains liable for the unpaid trust fund amount, and each responsible party may also be assessed an amount up to the $20,000 in unpaid trust fund liability.

  5. When more than one individual is assessed the penalty (transaction code (TC) 240 with reference number (RN) 618), the amount collected is equal to the unpaid trust fund owed by the business entity, plus interest and fees owed by the individuals trust fund portion of the business, plus accruals for each quarter involved. This assessment will appear under the taxpayer's SSN as a MFT 55 account, or for BMF under MFT 13.

  6. If the taxpayer is questioning the assessment, complete a Form 4442 and fax to TFRP liaison. See TFRP Liaison.

  7. 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. For more information, see IRM 5.19.1.4.4, Trust Fund Recovery Penalty Issues.

21.3.12.3.9  (10-17-2011)
Federal Unemployment Tax Act (FUTA) Assessments

  1. FUTA discrepancy cases result from the computerized and manual certifications of payments to State Unemployment Insurance Agencies.

  2. Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, adjustments processed under this program can be recognized by the following non-refile blocking series on Masterfile Tax Code (MFT) 10 accounts:

    • 50-Non-zero certification

    • 51-Zero certification

  3. If the taxpayer disputes a balance due as a result of a FUTA assessment, follow procedures in IRM 21.7.3.4.10, FUTA Certification Program − Discrepancy Cases.

21.3.12.3.10  (11-10-2011)
Combined Annual Wage Reporting (CAWR) Assessments

  1. The purpose of the IRS CAWR program is to ensure that employers paid and reported the proper amount of taxes, withholding, and advanced earned income credit. CAWR cases result from a discrepancy between information reported on the employment tax returns for entire year and informational returns, such as Form W-2, Wage and Tax Statement, Form W-3, Transmittal of Wage and Tax Statements to the Social Security Administration (SSA), Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., and Form W-2G, Certain Gambling Winnings, withholding amounts to the amounts reported on the Form 94X (Form 941, 943, 944, 945 , Schedule H (Form 1040 and Form 1041 )) employment tax returns.

  2. CAWR tax assessments can be found on MFTs 01, 11, 14 and 16 and identified by blocking series 55 after a TC 290 assessment. CAWR civil penalty assessments can be found on MFT 13 and identified by a TC 240 with penalty reference number of 549 or 550. For a listing of 500 Series Penalty Reference Numbers refer to IRM 20.1.7-5, 500 Series Penalty Reference Numbers.

  3. If the taxpayer disputes a balance due as a result of a CAWR assessment, instruct taxpayer to mail or fax their information to the CAWR Unit per IRM 4.19.4.11.1, CSR - Researching IRS-CAWR/SSA-CAWR Issues, with correspondence explaining the reason for lack of or late filing of documentation as demanded by law for reconsideration of assessment.

21.3.12.4  (10-01-2012)
Determine the Earliest The Taxpayer Can Full Pay

  1. The taxpayer may indicate through discussion they either can't pay, won't pay or will pay later the balance of tax they owe. See IRM 5.19.1-3, Tiered Interview- Strategies to Use When Responding to Taxpayer Calls, for some suggestions on handling collections issues. Explain to the taxpayer the benefits of paying as soon as possible:

    • Explain to the taxpayer penalties and interest continue to accrue even if they are in an installment agreement (IA). Use CC INTST or the pay-off calculator on AMS to provide the current outstanding balance to the taxpayer. CC ICOMP or Decision IA can be used to project the penalties and interest charged over the life of the IA.

    • A user fee will be charged for the cost of establishing an IA.

    • In addition, a lien may be filed on non-streamlined IAs with balances of ≡ ≡ ≡ ≡ ≡ or more.

    If the taxpayer cannot full pay today, advise the taxpayer to consider alternative ways to raise revenue needed to pay the debt such as the following:

    • Getting a loan

    • Borrowing from friends or family

    • Selling assets

    • Deferring payments on other debts

    • Using available credit on a credit card

  2. If the taxpayer is not familiar with the various types of payment plans available, provide the caller with a brief explanation of the types of agreements. See IRM 5.19.1.5, Methods of Payments, for the dollar criteria.

    • Full pay up to 120 days- This can allow time for the taxpayer to attempt to obtain a loan. There is no fee for this type of agreement.

    • Installment agreements (IA)- Verbally advise the taxpayer of the user fee IRM 21.3.12.4.9, Installment Agreement Terms and Conditions.

  3. Determine the taxpayer’s maximum ability to pay. Be sensitive to what the taxpayer has indicated and conduct a tiered interview accordingly. Examples of questions to ask the taxpayer are:

    • Can you full pay today?

    • Can you pay within 60–120 days?

    • What is the maximum payment you can send each month?

    • Can you make a lump sum payment if the balance is over streamline criteria?

    • Can you make low payments now and increase them over time?

    Example:

    If the taxpayer states s/he is having financial difficulty, ask if they can make a minimum payment of $25 a month and then increase the payment over time. As long as the agreement still meets streamlined criteria, this will allow them to start reducing the balance.

  4. If the inquiry is regarding a BMF account and the balance due exists because the taxpayer is not making Federal Tax Deposits for employment, excise or corporate income taxes:

    • Advise the taxpayer of FTD requirements, see IRM 21.7.2.3.4, Deposits, for more information.

    • For additional information the taxpayer can go to Pub 15, Circular E, Employers Tax Guide, which can be accessed via WWW.IRS.GOV.

    • If a business, other than a sole proprietorship, explain to officer, partners or those responsible for financial decisions for the business can be held personally liable for Trust Fund Recovery Penalty (TFRP). The TFRP is the unpaid federal withholding and half of FICA (Social Security and Medicare) which is assessed by a Revenue Officer. See IRM 21.3.12.3.8, Trust Fund Recovery Penalty (TFRP) Assessments, for more information.

  5. If the taxpayer refuses to pay (this is for all MFTs) document the taxpayer’s refusal to pay on AMS comments. If the account is in notice status input a STAUP 2201 which generates a final notice to the taxpayer and sends the account to the Automated Collection Service (ACS). If the account is in status 24 warn the taxpayer of potential enforcement actions.

21.3.12.4.1  (07-09-2013)
Can Full Pay Balance Due Now (Payoff within 1 to 10 days) IMF and BMF

  1. This section is for IMF and all BMF taxpayers. The following procedures are for taxpayers making full payment on the account within 10 days. If the taxpayer is requesting a payoff figure and the accounts are in status 60, see IRM 21.3.12.5.1, Taxpayer Requests An Installment Agreement Payoff Amount.

  2. If there is no balance present:

    1. Advise the caller the return/assessment has not yet posted on the account.

    2. Advise the caller to make the payment for the expected tax owed.

    3. Provide check annotation and mailing address as listed in paragraphs 6 and 7.

    4. If the taxpayer asks, compute the penalty and interest, using CC COMPA, if possible. If penalty and interest cannot be computed, advise caller they will receive a notice for any penalties and interest charged.

  3. Ask the taxpayer if there is any recent payment(s) or levy(s) potentially affecting their account balance. Reduce the payoff amount by anticipated credits not yet pending on IDRS.

  4. Before determining the payoff amount, it is necessary to ask the taxpayer how they will be making the payment (for example: mailing, credit card, etc.) See the table below to determine the computation date to be used for each method of payment.

    Method of Payment Payoff Computation
    If the taxpayer is mailing their payment Compute the payoff balance 10 days from the anticipated mailing date.
    Taxpayer taking payment to TAC Office Compute the payoff balance to the day the taxpayer plans on going to the TAC office.
    EFTPS payments Compute the payoff balance to the date the payment is requested.

    Reminder:

    Payments using the EFTPS Web site or voice response system must be scheduled by 8 p.m. ET the day before the due date to be received timely.

    Credit Card payments Compute the payoff balance to the date the taxpayer states they will authorize the payment.

  5. Research the account to ensure all balances are included in the payoff calculation. If there are accounts in status 23 or 53 and there is no TXMOD for the accounts, additional steps must be taken to include these modules:

    If Then
    There is no TXMOD and IMFOLI/T shows account in status 23 MFREQ the account to create the TXMOD. Use CC INTST or the AMS/IAT payoff calculator to compute payoff figure.
    There is no TXMOD and IMFOLI/T shows account balance and there is TC 530 on the account. MFREQ the account to create the TXMOD. Use CC INTST or the AMS/IAT payoff calculator to compute payoff figure.

    Caution:

    Prior to inputting CC MFREQ make sure the taxpayer is going to full pay and does not want an installment agreement. The computer will not allow IAGRE input with a MFREQ'd account.

  6. Advise the taxpayer to make the check or money order payable to "United States Treasury." The following should be notated on the check or money order:

    • Taxpayer's name and address

    • SSN or EIN (specify the primary TIN or the TIN on the return), please explain the primary SSN on installment agreement should be annotated

    • Daytime telephone number and type, e.g., cell, business, or home

    • Tax form(s) including business and individual as possible on memo area

    • Tax periods for which they are making payment(s) including business and individual as possible on memo area. AM should suggest including CP notice if possible.

    • If the payment is for an MFT 31 account, advise the caller to notate "PTNL" "Primary Taxpayer Name Line" after the SSN and "MFT 31" in the memo section.

    Note:

    If the taxpayer has a balance due notice with them, you can refer them to the check or money order notation information located on the notice payment stub rather than verbally stating it.

  7. Provide the taxpayer with correct mailing address. See SERP Who/Where-Where to File- Forms and Payments for the correct mailing address.

  8. If the taxpayer is full paying the account, input CC STAUP (do not input if account is in status 6X) to hold the collections notices and allow time for the payment to post.

    If Then
    The account is in Status 21 Input CC STAUP 5808 so the taxpayer receives the last balance due notice.
    The account is in other notice status Input CC STAUP 2208 so the account will roll into ACS if the account is not full paid as promised.

    Reminder:

    If the response on CC INTST is "Within the grace period of the notice" , the request date to full pay falls within the notice grace period, no STAUP is required.

  9. Document the amount and computation date on AMS or CC ENMOD if AMS is not available.

21.3.12.4.2  (10-01-2012)
Taxpayer Can Full Pay Within 11 to 59 Days - IMF, BMF Out-of-Business or BMF In-Business Non-Trust Fund Accounts

  1. IMPORTANT − The procedures in this sub-section apply only to IMF, BMF out of business or BMF in−business non−trust fund accounts . Taxpayers who are in−business with an open trust fund tax filing requirement are not eligible for a 11 to 59 day full pay agreement for past due trust fund taxes. In these cases, follow procedures in IRM 21.3.12.4.7, In-Business Trust Fund (IBTF) Express Agreement Criteria.

    Reminder:

    For the purpose of this IRM section, the term "trust fund account" applies to Masterfile Tax Code (MFT) 01, 03, 09, 11, 12, 14, 16 and 72 accounts.

  2. Compute the payoff using the If and Then chart in IRM 21.3.12.4.1(4), Can Full Pay Balance Due Now (Payoff within 1 to 10 days). Document the amount and computation date on AMS.

  3. Provide the taxpayer with correct mailing address. See SERP Who/Where-Where to File- Forms and Payments for the correct mailing address.

  4. Advise the taxpayer to make the check or money order made payable to "United States Treasury." Provide the taxpayer with the check/money order annotations. See IRM 21.3.12.4.1(6), Can Full Pay Balance Due Now (Payoff within 1 to 10 days).

  5. If the taxpayer is full paying the account input CC STAUP to hold the collections notices and allow time for the payment to post.

    If Then
    The account is in Status 21 Input CC STAUP 5809 so the taxpayer receives the last balance due notice.
    The account is in other notice status Input CC STAUP 2209 so the account will roll into ACS if the account is not full paid as promised.

    Reminder:

    If the request date to full pay falls within the grace period of the notice, no STAUP is required.

21.3.12.4.3  (03-27-2013)
Taxpayer Can Full Pay Within 60 to 120 Days - IMF, BMF Out-of-Business or BMF In-Business Non-Trust Fund Accounts

  1. IMPORTANT − Taxpayers who are in−business with an open trust fund tax filing requirement are not eligible for a 60 to 120 day full pay agreement for past due trust fund taxes. In these cases, follow procedures in IRM 21.3.12.4.7, In-Business Trust Fund (IBTF) Express Agreement Criteria. The procedures in this sub-section apply only to IMF, BMF out of business or BMF in−business non trust fund accounts.

  2. Such agreements may be granted on assessed or pre-assessed balances. If the balance has not yet been assessed see Exhibit 5.19.1-9, IDRS Input of Pre-assessed IAs and Full Pay Agreements.

    Reminder:

    A 60–120 Full Pay Agreement can be set up for returns not yet posted, using CC IAGRE, which will default to CC IAPND. The taxpayer does not need to wait and call back when they receive the bill.

  3. These procedures also include taxpayers who claim they are filing a refund return or an amended return that will full pay their balance due.

  4. The taxpayer can request more than one full pay agreement provided the total time does not exceed maximum 120 days.

  5. If the taxpayer has an open TDI, s/he may still qualify for the Full Pay within 60 or 120 day agreement. However, the agreement cannot be input using CC IAGRE. Advise the caller a hold will be placed on the account for 9 weeks and establish a firm date for filing the missing returns. Once the return is filed, they may call back for the additional 30–60 days if necessary . Input STAUP for 9 cycles and notate AMS with date the Full Pay Agreement began. Update AMS with the date for filing the missing return along with the full pay information. Input CC STAUP following the guidelines in IRM 21.3.12.4.2, Taxpayer Can Full Pay Within 10 to 59 Days, and send a Letter 681C.

  6. If the taxpayer qualifies for a 60 to 120 days full pay agreement:

    1. Compute the payment amount for input on CC IAGRE using CC INTST, to the expected payoff date.

    2. Input agreement using CC IAGRE. See IRM 5.19.1-5, IDRS Input of Full Pay Agreements, 120 Days or Less, CC IAORG for AM/ACS/ACSS/CSCO/FA, for instructions on inputting the 120 day agreement. Use the IDRS TIF Processing Cycle Chart to determine the correct payment posting cycle.

    3. Send the taxpayer a Letter 681C per IRM 21.3.12.4.10, Balance Due Outgoing Correspondence.

    4. Advise the taxpayer, verbally or by correspondence, to make the check or money order made payable to "United States Treasury.". For the check annotation information see IRM 21.3.12.4.1(6), Can Full Pay Balance Due Now (Payoff within 1 to 10 days).

    5. If verbally providing the mailing address. See http://serp.enterprise.irs.gov/databases/who-where.dr/where_to_file.htm for the correct mailing address.

    Note:

    If sending Letter 681C, verbally advising the taxpayer the mailing address and check annotation information is contained in the letter, covers this requirement. It is not necessary to provide the detailed information listed above.

  7. If there are any accounts with balances showing on IMFOLI but there is no TXMOD available, the accounts are either in status 53, TC 530 present, or 23. Input the CC IAGRE prior to using CC MFREQ to create the accounts on IDRS. If there are other balances on the account the IA will have to be input as an un-assessed module. This will allow the MFREQ'd accounts to be added into the agreement after the accounts return to IDRS. See IRM 21.3.12.5.5, Adding a New Module to an Existing or Defaulted Agreement, for information on the input an unassessed module. If the only modules involved in the agreement are in status 23 or 53, and they are not current on IDRS, you must reverse the TC 530 or CC MFREQ the status 23 accounts. Create an in-house Form 4442 referral to have the full pay agreement input once the accounts return to IDRS.

21.3.12.4.4  (05-29-2013)
Taxpayer Can Make Payments- Installment Agreements

  1. For IMF: If the assessed balance due is $100,000 or more, and the taxpayer can not full pay in 120 days, transfer the call to:

    • W & I- #92080

    • SB/SE- #92085

  2. When inputting an installment agreement (IA) on an account for which there is no prior installment agreement or full pay within 120 days information on IDRS, CC IAGRE defaults to CC IAORG. See IRM 5.19.1-7, IDRS Input of Installment Agreements, CC IAORG. Use the IDRS TIF Processing Cycle Chart to determine the payment posting cycle.

  3. When a request for an IA involves a SSN and EIN (both IMF and BMF) for a sole proprietor, combine the aggregate assessed balance of assessment (CC SUMRY balance) of all modules. Determine if the taxpayer meets the requirements to qualify for an IA. An IMF account and related BMF account must be included in one agreement. Employees on IMF applications can transfer calls to BMF (#92025) if a BMF balance due or return delinquency exists. Refer to IRM 5.19.1.5.5.3, IMF/BMF Related Accounts, for additional information.

    Note:

    Establish the IA on the account having the earliest Collection Statute Expiration Date (CSED) expiration date and input of cross-reference agreement. This will place the account where the IA was input in Status 60 and the other account will be placed in Status 63. See IRM 5.19.1-7, IDRS Input of Installment Agreements, CC IAORG,

    for information in inputting a cross reference IA.

  4. If there are 2 related IMF accounts, determine the account with the earliest CSED and input the IA under that SSN with the cross reference to the other SSN. See IRM 5.19.1-7, IDRS Input of Installment Agreements, CC IAORG.

  5. Research the accounts to determine if there is a potential Collection Statute Expiration Date (CSED) issue. The CSED is usually 10 years from the date of assessment. CC IMFOLT will show up to three CSED for the given tax module.

    • Review the account for multiple CSEDs. Each assessment will carry its own CSED. See IRM 25.6.1.12, Collection Statute Expiration Date (CSED), for a list of transactions codes that carry their own CSED.

      Caution:

      Do not go by the filing year of the account. An earlier tax year may post after a later year. If the taxpayer filed his 2010 return timely but didn't file his 2009 until 2012, the 2010 year will have an earlier CSED.

    • Review the account for transactions that will postpone the running of the CSED. See IRM 25.6.1.12.2.1, Conditions Postponing Collection or Suspending the 10 Year Collection Period.

      Caution:

      Use command code ICOMP or Decision IA to verify that the payment amount will full pay the account before the CSED(s).

  6. If there are any accounts with balances showing on IMFOLI but there is no TXMOD available, the accounts are either in status 53, TC 530 present, or 23. Input the CC IAGRE prior to using CC MFREQ to create the accounts on IDRS. If there are other balances on the account the IA will have to be input as an un-assessed module. This will allow the MFREQ'd accounts to be added into the agreement after the accounts return to IDRS. See IRM 21.3.12.5.5, Adding a New Module to an Existing or Defaulted Agreement, for information on the input an unassessed module. If the only modules involved in the agreement are in status 23 or 53, and they are not current on IDRS, you must reverse the TC 530 or CC MFREQ the status 23 accounts. Create an in-house Form 4442 referral to have the IA input once the accounts return to IDRS.

  7. Determine if BMF account balance due includes trust fund modules and taxpayer has an open trust fund tax filing requirement (i.e., MFTs 01, 03, 09, 11, 12, 14, 16 and 72):

    • if Yes refer to IRM 21.3.12.4.7, In-Business Trust Fund (IBTF) Express Agreement Criteria.

    • If No, continue on to (8) below.

  8. Determine if taxpayer's BMF account is in business:

    • If YES, follow procedures in IRM 5.19.1.5.5.2, Installment Agreement Requirements — In Business, Non Trust Fund, and or Form 1120, U.S. Corporation Income Tax Return Only.

    • If NO, follow procedures in IRM 21.3.12.4.11, BMF In-Business Non-Trust Fund Modules Only, Taxpayer is Out of Business and/or Form 1120 Accounts Only.

    Note:

    If the taxpayer states they are out of business, do not perform any research and accept taxpayers response. Document on AMS the taxpayer's call and information given concerning when business closed. Advise the taxpayer to send in correspondence including all cross reference TINs and the information for closed business.

  9. If the IMF only taxpayer is in compliance, determine if the balance due and payment proposal meet guaranteed or streamlined installment agreement criteria.

  10. Guaranteed Installment Agreement, IRC 6159(c), requires the IRS to accept the taxpayer's proposal of an IA if the following conditions are met:

    • The taxpayer is an individual and owes income tax of $10,000 or less, excluding penalties and interest. Unlike the criteria for streamlined agreements, the dollar limit for guaranteed agreements of $10,000 or less only applies to tax. The taxpayer may owe additional amounts in penalty and interest (both assessed and accrued) and qualify for a guaranteed agreement, so long as the tax liability alone is not greater than $10,000.

    • During the preceding five taxable years, the taxpayer (and, if the liability relates to joint return, the taxpayer's spouse) has not failed to file any income tax return, failed to pay any income tax, or entered an installment agreement for payment of income taxes.

    • The IA provides for full payment of the tax liability within three (3) years.

    • The taxpayer agrees to continue to comply with the tax laws and the terms of the agreement for the period (up to three years) the agreement is in place.

      Note:

      A Guaranteed Installment Agreement must be allowed even if it is determined the taxpayer is trying to delay collections; accept the IA regardless of the amount proposed. The guaranteed IA is the only type of agreement for which we will accept a payment of less than $25; use the same ALN for these agreements as for streamlined agreements, see IRM Exhibit 5.19.1-10, Installment Agreement Locator Numbers.

  11. Streamlined Installment Agreement (SIA) is considered when the aggregate assessed balance (CC SUMRY) is $25,000 or less, can be paid in full within 72 months and the CSED is protected. The type of taxpayers that qualify for a SIA are: IMF, Out of Business and BMF income tax ONLY (Form 1120) see, IRM 5.19.1.5.5.3, IMF/BMF Related Accounts, for additional information.

    • Ensure the CSED is protected by using CC ICOMPF or Decision IA. If using CC ICOMPF, first use the oldest CSED (not necessarily the oldest module) then recalculate, adding each balance due year into the ICOMP calculation separately.

    • No financial statement is required.

    • The payment amount does not need to be the same throughout the 72 months; it can be an agreement with increasing payments provided the aggregate assessed balance of assessment (CC SUMRY) is full paid within 72 months.

    • If the taxpayer can make a voluntary lump sum payment (VLSP) to reduce the balance due to meet SIA criteria; use CC ICOMP or IA Decision to give accurate lump sum amount necessary. When inputting IAGRE the first payment amount will correspond with the lump sum then second payment will be the agreement amount.

  12. In January 2012 and revised March 1, 2013, all NSIA employees are authorized to establish streamlined IAs between $25,001 and $50,000 when the taxpayer meets the following criteria:

    • IMF and Out of Business Sole Proprietor taxpayers only.

    • The aggregate unpaid balance (CC SUMRY combined module balance) is between $25,001 - $50,000.

    • The aggregate assessed balance (CC SUMRY) will be full paid within 72 months.

    • The full liability (including penalties and interest) will be full paid within the CSED(s).

    • A DDIA or a PDIA (effective after March 1, 2013) is a required condition to avoid the filing of a Federal Tax Lien.

    • For assistors working any streamline applications, taxpayers who owe more than $25,000, once it has been determined the taxpayer can not full pay or make a lump sum payment to qualify for an under $25,000 streamline agreement, see IRM 21.3.12.2(3), Balance Due Research, and transfer the call to NSIA, if appropriate.

    • For assistors working NSIA, refer to IRM 5.19.1.5.5.24, Streamline Installment Agreements over $25,000.

  13. Non-streamlined Installment Agreement (NSIA) is considered when the IMF, sole proprietorship, and out of business only taxpayer cannot qualify for a SIA. A complete financial statement must be completed to determine the monthly payment amount. See IRM 21.3.12.4.6, Proposal Does Not Meet Guaranteed or Streamlined Installment Agreement Criteria.

  14. If a BMF taxpayer owing more than $25,000 aggregate unpaid balance of assessment, they can choose to reduce their liability to $25,000 or less making a lump sum payment in order to participate. Accounts Management (AM) employees cannot process the lump sum option. See IRM 5.19.1.5.5.1.1 , Lump Sum Payment for IBTF Express ONLY. AM employees will:

    • Notice Status – Prepare Form 4442 and fax to the appropriate SB/SE Service Center Collection Campus, or

    • ST 22 – Transfer call to ACS. See IRM 21.3.12.6.1, Status 22 Modules.

  15. For a BMF taxpayer only: In-Business Trust Fund (IBTF) Agreement can be considered for businesses who have an unpaid balance of assessment of $25,000 or less. AM employees are authorized to establish IBTF Express Agreements up to $10,000 in unpaid balance of assessments, see IRM 21.3.12.4.7, In-Business Trust Fund (IBTF) Express Agreement Criteria.

21.3.12.4.4.1  (10-01-2013)
Pending Installment Agreement Criteria

  1. A pending installment agreement is an IA that cannot be input immediately. This is going to occur when the taxpayer has met the criteria for the formal IA request (criteria listed below) but either can not or will not meet the terms of an agreement. An IA may be rejected if the taxpayer can not or will not comply with the IA requirements, but if the taxpayer has formally requested an IA they are entitled to an independent review of the rejection and receive appeal rights.

    Example:

    The taxpayer must submit financial information for a non-streamlined IA.

    Note:

    A pending IA would also include an account where the CSR MFREQ'd the account prior to inputting the IA. If the taxpayer meets the criteria and the IA cannot be input, the TC 971 ac 043 should be input on all balance due modules (this includes those MFREQ'd) and reversed when IA is set up. The input of the TC 971 ac 043 prevents collection activity from occurring. However, independent review procedures would not need to be followed since the IA is not being rejected.

  2. To qualify for a pending IA, including independent review with appeal rights, the taxpayer must provide all of the following elements below:

    1. Provide information sufficient to identify the taxpayer. (This is completed during disclosure).

    2. Identify the tax liability to be covered by the agreement.

    3. Propose a monthly payment amount.

    4. Is in compliance with the filing of all required returns (IMF and BMF).

      Example:

      The IA defaults due to the filing of a current return with a balance owed. The original IA required the taxpayer to make ES payments. The taxpayer is still self-employed but has made no ES payments for the current year. If the taxpayer has not provided a monthly payment figure, it does not meet pending IA criteria and independent review procedures do not need to be followed. The request for the IA to be reinstated can be refused due to the fact the taxpayer has not complied with the terms of the agreement by incurring a new balance and not making ES payments.

      (For more information see IRM 5.19.1.5.5.6, Pending Installment Agreement Criteria).

  3. If the taxpayer has not provided the four elements for a pending IA request, then ask probing questions to request the missing information. If the taxpayer is unable or unwilling to provide the information needed then the IA can not be input:

    1. Advise the caller for the reason why the agreement can not be input or reinstated.

    2. Advise the taxpayer they will need to correct the situation that is preventing the input of the agreement.

    3. Input a STAUP for 2209, if accounts is in notice status, to provide the taxpayer time to submit the requested information or take the necessary actions.

  4. If the taxpayer has provided the four elements, the request for an IA is considered a pending IA.

    1. Input a TC 971 ac 043 using REQ77 on all balance due modules. The TC 971 ac 043 stops collection actions and protects taxpayers rights while installment agreement is being reviewed. The TC 971 ac 043 is only input when taxpayer provides the information for a formal request.

    2. Open a control using the unique employee number (selected by the site) for Independent Review and input "IAPND" in the activity code field.

    3. Advise the caller their request needs to be reviewed. Advise the taxpayer they will receive a letter from us with our determination on their request for an IA within 14 days. AM is not required to attempt a call back in these situations.

    4. Cases meeting pending IA criteria are not to be transferred to NSIA unless they meet NSIA criteria also.

    5. Input a STAUP 2209.

    6. If the IA meets rejection criteria follow the procedures in IRM 5.19.1.5.5.8, Installment Agreement Rejection Criteria and IRM 5.19.1.5.5.9, Rejected Installment Agreement Independent Review.

21.3.12.4.5  (10-01-2012)
Proposal Meets Guaranteed or Streamlined Installment Agreement Criteria

  1. Advise the taxpayer of the three types of installment agreements available:

    • Regular Installment Agreement. (Taxpayer pays through Electronic Federal Tax Payment System (EFTPS), sends check or money order or uses a credit card.)

    • Direct Debit Installment Agreement (DDIA) is an agreement for which the taxpayer authorizes the IRS to request electronic transfer of funds from their checking account or shared draft account to the IRS; such payments are withdrawn on the same date each month. Advantages to the taxpayer include:
      1. A reduced user fee (from $105 to $52)
      2. No checks to be mailed, postage savings
      3. No check processing charges and
      4. No need to remember to make the monthly payment.

    • Payroll Deduction Installment Agreement (PDIA) is an agreement for which the taxpayer's employer will withhold the necessary payments and mail them directly to the service.

  2. In accordance with the law, each year the IRS mails a CP 89, Annual Installment Agreement Statement, to every taxpayer with an IA. The statement provides:

    • the dollar amount of beginning account balance(s) due

    • an itemized listing of payments

    • an itemized listing of penalties, interest and other charges

    • the dollar amount of ending account balance(s) due.

21.3.12.4.5.1  (07-09-2013)
Pre-assessed Installment Agreements (IAPND) and Unassessed Modules

  1. There will be times when a taxpayer requests a payment plan or a full pay agreement for balances that have yet to be assessed. Requests may result from current year returns that have been filed but not yet processed, AUR, ASFR or any other pending assessment which is being proposed. For IMF taxpayers calling in reference to a unassessed current year balance due return, refer to the table in IRM 21.3.12.2(9), Balance Due Research.

  2. Pre-assessed agreement - A pre-assessed agreement is used when there is currently no balance showing on the account.

    1. Ask the taxpayer amount of tax that will be owed. Follow normal dollar criteria for setting up the IA.

    2. Follow all normal collection procedures.

    3. If the taxpayer is setting up a 60–120 day or qualifies for an SIA, advise the caller the payment plan will be set up but by law they will still receive the settlement notice when the balance posts to the account. Advise the taxpayer they can disregard that notice.

    4. Input the installment agreement using CC IAGRE which will default to IAPND.

    5. Refer to the chart in IRM 21.3.12.2.1(7), Full Compliance Check, for procedures for taxpayers filing a balance due return.

    6. If the balance is from a proposed assessment (ASFR, Underreporter, Examination, etc.), or the taxpayer filed a Form 1040X, follow the chart below:

      If Then
      The agreement meets streamlined criteria
      1. Input the IA using CC IAGRE which will default to CC IAPND. See IRM 5.19.1-9, IDRS Input of Pre-assessed IAs and Full Pay Agreements. Use the IDRS TIF Processing Cycle Chart to determine the payment due cycle.

      2. Follow all normal collection procedures.

      The agreement does not meet streamline criteria and the taxpayer can provide expense information Follow procedures in IRM 21.3.12.4.6, Proposal Does Not Meet Guaranteed or Streamlined installment Agreement Criteria.

  3. Unassessed Modules- An unassessed module is when the taxpayer filed a return with a balance owed or has a proposed assessment and is already in an IA or has other balance due modules.

    • Research the account. For researching balance due returns use CC TRDBV or MeF accessed through EUP/Return Request and Display, to determine if the return has been received and possibly resequencing. For potential AUR assessments review the CP 2000 on AMS if available, to determine the balance due.

    Follow the steps below to set up an unassessed installment agreement
    1. Use command code ICOMP or Decision IA to verify that the payment amount will full pay the account, including the new module(s), within the CSED(s).

    2. Add the new liability using CC IAGRE to generate CC IAREV. See IRM 5.19.1-8, IDRS Input of Installment Agreements, CC IAREV. Use the IDRS TIF Processing Cycle Chart to determine the payment due cycle.

    3. Revise the agreement locator number to "XX32"

    4. Change the assessment indicator to "1", allowing the new assessment to post without suspending the agreement.

      Note:

      Do not reset the skip indicator if already used.

    5. Inform taxpayer concerning reinstatement fee for installment agreement.

    6. Enter history on AMS indicating the proposed assessment amount EXAMPLE: "UM30200612 $$$$$"

    7. Send Letter 2273C, Installment Agreement Accepted; to the taxpayer advising them we added the new liability.

21.3.12.4.5.2  (03-27-2013)
Streamlined Installment Agreements

  1. Once it is determined the taxpayer meets streamlined criteria, complete the following actions:

    1. Input the installment agreement using CC IAGRE (see IRM 5.19.1-7, IDRS Input of Installment Agreements, CC IAORG, for input guidance). If the taxpayer is increasing the payments or making a lump sum payment, make sure to set the agreement up appropriately.

    2. Send Letter 2273C, Installment Agreement Acceptance and Terms Explanation, or equivalent letter such as the systemically generated Letter 3217C. If the taxpayer's payments are increasing or the taxpayer is making a lump sum payment make sure the letter includes this information.

      For additional information on setting up an installment agreement see:
      • IRM 5.19.1-10, Installment Agreement Locator Numbers

      • IRM 5.19.1-11, Installment Agreement Originator Codes

      • IRM 5.19.1-12, Installment - Agreement User Fee Codes

    3. Advise the caller of the user fee. When speaking to the taxpayer, advise them verbally a user fee is charged and is taken from their first payment(s). Research the account to determine if the taxpayer qualifies for the reduced fee. CC ENMOD will show the Low Income Indicator (LII). Inform the taxpayer of the appropriate user fee being charged.

    4. Advise the taxpayer verbally or in writing the terms of the agreement. See IRM 21.3.12.4.9, Conditions and Terms of an Installment Agreement. If sending a Letter 2273C or the equivalent letter such as the systemically generated Letter 3217C use the return address for the CSCO location having jurisdiction of the taxpayer account; Campus Balance Due Accounts "Where to Send Payments" under the "Who/Where" tab on SERP. It is only necessary to advise the taxpayer a confirmation letter is being sent and contains the terms of the agreement to satisfy this requirement.

    5. Explain to the caller a monthly notice will be sent but the payment is still due even if they do not receive the monthly reminder notice.

  2. If the taxpayer asks how the payments are applied, refer to IRM 21.3.12.4.9(6), Installment Agreement Terms and Conditions.

  3. Taxpayers cannot delegate installment agreement payments. Payments are applied to the balance with the oldest CSED. Payments made in addition to the installment agreement payment or for other reasons can be delegated.

21.3.12.4.5.2.1  (05-01-2013)
Payroll Deduction Installment Agreements

  1. A PDIA is a voluntary election made by the taxpayer. They can stop a payroll agreement at any time but would then have to make payments themselves to maintain the agreement. If the taxpayer is requesting a PDIA:

    1. Input a regular streamlined installment agreement. See IRM 21.3.12.4.5.2, Streamlined Installment Agreements, for additional input information.

    2. Send Letter 2273C, Installment Agreement Acceptance and Terms Explanation. Include the Form 2159, Payroll Deduction Agreement, in the 2273C. Send a return address for the CSCO Operation campus having jurisdiction of the taxpayer account.

    3. Advise the taxpayer to present all parts (copies) of Form 2159, Payroll Deduction Agreement, to their employer and make necessary arrangements to begin payroll deduction. The employer should mark the payment frequency on the form and sign it. The employer should return all parts of the form to the IRS.

    4. If the taxpayer has a completed Form 2159 and wants to fax it, have them fax it to you. AM will then fax the Form 2159 to the appropriate Collection Campus Operation based on the taxpayer's BOD and state.

    5. Explain to the taxpayer they must continue to make the monthly payments until their employer starts withholding and submitting required payment amount as agreed.

    6. Advise the caller of the user fee. When speaking to the taxpayer, advise them verbally a user fee is charged and is taken from their first payment(s). Research the account to determine if the taxpayer qualifies for the reduce fee. CC ENMOD will show the Low Income Indicator (LII). Inform the taxpayer of the appropriate user fee being charged.

    7. Advise the taxpayer verbally or in writing the terms of the agreement. If sending a Letter 3217C or Letter 2273C it is only necessary to advise the taxpayer a confirmation letter is being sent and contains the terms of the agreement to satisfy this requirement. See IRM 21.3.12.4.9, Installment Terms and Conditions.

    8. Advise the caller the letter also contains how to annotate the check/money order and where to send the payments.

  2. The taxpayer can request their employer to stop the payments at any time. If the taxpayer states the employer will not stop the payments without notification from the IRS, send Letter 2571C, To Employer: Discontinue/Adjust Payroll Deduction. Change the IA to a regular agreement and advise the caller they will need to begin making the payments themselves. If the reminder notices have been suppressed, remove the suppression to allow the monthly reminder to be sent to the taxpayer.

21.3.12.4.5.2.2  (07-09-2013)
Direct Debit Installment Agreement

  1. A Direct Debit Installment Agreement (DDIA) is an agreement for which the taxpayer authorizes the IRS to request electronic transfer of funds from their checking account or shared draft account to the IRS; such payments are withdrawn on the same date each month.

  2. If the taxpayer is not currently in an agreement and wants a DDIA, ask the taxpayer if (s)he has completed the Form 433-D , Installment Agreement. If the taxpayer has completed the form and can fax it while on the call, see paragraph (4) below. If the form has not been completed or the taxpayer cannot fax it while on the call, see paragraph 5 below.

  3. Advise the caller a voided check or routing and account number must be submitted with their request.

  4. If DDIA information can be faxed while on the phone and the account is still in notice status:

    1. Input TC 971 AC 043 using REQ77, on each balance due module, which indicates taxpayer proposed a formal request for installment agreement.

    2. Input a STAUP for 9 cycles.

    3. Advise the caller verbally of the $52 user fee that will be taken from their first payment(s). The first CP 521 will no longer be issued to request the user fee.

    4. Advise the taxpayer that a notice will be sent to confirm the terms of the agreement once the agreement has been established.

    5. Document AMS with the terms of the agreement, payment amount(s), payment due date, banking information (DDIA). The assistor should annotate at the top of Form 433-D, "received by fax". Form 433-D, Installment Agreement, must be faxed within 24 hours of receipt. See SERP Who/Where Tab DDIA Liaisons

      Note:

      Command Code IAGRE will not be input on IDRS by the toll free CSR as CSCO will complete CC IAGRE if DDIA is acceptable. If taxpayer does not make a formal request, a TC 971 ac 043 should not be input on IDRS.

    6. Review the Form 433–D to ensure it's completeness prior to sending to CSCO. This includes the banking information, the payment amount is within streamline, and the form is signed by the appropriate parties.

    7. If the taxpayer is calling to request the regular IA be converted to a DDIA, ask them if they can fax form. If faxed follow procedures e thru f above. If they cannot fax the form, advise them to mail the form. Provide the taxpayer with the correct mailing address as listed on SERP under the Who/Where tab - Service Center Addresses for Collection Operations.

  5. If the DDIA information can not be faxed and the account is still in notice status.:

    1. Establish as a regular IA using CC IAGRE.

    2. Follow all normal procedures for setting up an installment agreement.

      Note:

      If the taxpayer cannot download the form, enclose the Form 433–D in the Letter 2273c.

    3. Explain to the taxpayer they must make the payments until they receive the confirmation letter from CSCO

    4. Tell the taxpayer s/he will be billed for the $105 User Fee and CSCO will revise installment agreement to a DDIA upon receipt of the request. CSCO will credit $53 back to the account.

    5. Advise the caller a letter will be sent confirming the conversion of the regular IA to a DDIA

    6. The last payment for a DDIA is automatically computer adjusted based on the remaining balance due, if less than the normal monthly payment amount.

    7. Provide the taxpayer with the terms and conditions of the installment agreement. See IRM 21.3.12.4.9, Installment Agreement Terms and Conditions.

  6. Conversion to a DDIA Agreement: If the taxpayer is requesting a conversion of a current IA to a DDIA:

    1. Ask the taxpayer if they can fax the completed Form 433-D. If they can fax the form, the assistor should annotate at the top of Form 433-D, "received by fax". Form 433-D,Installment Agreement, must be faxed within 24 hours of receipt. See SERP Who/Where Tab DDIA Liaisons. If the taxpayer can not fax the Form 433-D, provide the appropriate mailing address. See Service Center Addresses for Collection Operations

    2. If the taxpayer is converting an established IA to a DDIA the fee will only be reduced if the request is made within six months of the IA establishment date.

  7. If taxpayer wants a DDIA but the tax return has not been mailed, the taxpayer is not currently in an IA and can not full pay the balance due within 120 days, ask the taxpayer what the expected balance owed will be. If the amount owed falls within streamline criteria, advise the caller to attach Form 9465 to the front of the return. If the amount owed does not meet streamline criteria:

    • and the balance is between $25,001 and $50,000, have the taxpayer send in Form 9465-FS.

    • and the balance is over $50,000, have the taxpayer send in Form 9465 and a Form 433-F.

21.3.12.4.5.3  (03-27-2013)
Front End Mirror Assessments Process for Installment Agreements (IA) and Currently Not Collectible Hardship Closures (CNC)

  1. If a customer states they are divorced or separated they may meet the criteria for the MFT 31 mirror process.

  2. When the taxpayers file a joint return, both parties are liable for the tax owed. If one of the taxpayers request separate treatment from their spouse and meet the criteria for having their own Installment Agreement (IA) and /or Currently Not Collectible (CNC), inform the taxpayer of this option and the benefits. A mirrored assessment is identical to the MFT 30 assessment. The MFT 30 joint assessment will be replaced with two separate modules using the MFT 31 account code. The purpose in creating the MFT 31 modules is to pursue collection or withhold collection on each spouse separately, when needed. For example, after a divorce one spouse may call requesting a payment plan. Under the Front End Mirror Process, the joint MFT 30 module will then be split into an MFT 31 module under each party. These modules are considered "Mirrored" . Mirroring of the module means each MFT 31 will reflect the same information as the other. The same liabilities, assessments, payments and offsets will show on both modules. Once the MFT 31 modules are set up, the IA or CNC can be input under the applicable SSN. The other spouse's module will continue through the appropriate collection process.

  3. Payments will show as a TC 670 on the MFT 31 of the person making the payment. This payment will be reflected on the other MFT 31 as a TC 766 cr 337 approximately 2 weeks after the TC 670 posts.

  4. Follow procedures in IRM 5.19.1.5.5.11.1, Front End Mirror Assessments Process for Installment Agreements (IA) and Currently Not Collectible Hardship Closures (CNC), for setting up a "Front End Mirrored IA" and see Exception below.

    Exception:

    AM employees are not required to make and document on Form 4442 a Notice of Federal Tax Lien (NFTL) determination when granting a streamlined IA

    Note:

    If the taxpayer does not meet mirroring criteria, continue with Manually Monitored Installment Agreement (MMIA) process.

  5. If it is determined that one of the taxpayers on the joint return may not be collectible then the MFT 30 joint account will be mirrored into two separate MFT 31 accounts to allow one of the liable taxpayers to be reported CNC and to allow the pursuit of collection on the other liable taxpayer. The CNC mirroring process will be identified by TC 971 ac 109 on each account.

  6. Do not confuse the Front End Mirror Assessments for IA and CNC with the other situations which will create an MFT 31 account. The MFT 31, Separate Assessment Module, contains split spousal assessments which meet one or more of the following conditions:

    • Collection action is prohibited against only one spouse.

      Example:

      Only one spouse filed bankruptcy.

    • Each spouse is liable for different amounts.

      Example:

      One taxpayer filed an innocent spouse claim.

    The Separate Assessments Modules can be included into a regular installment agreement once the MFT module is established. For more information on see IRM 21.6.8, Split Spousal Assessments (MFT 31).

21.3.12.4.5.4  (10-01-2012)
Manually Monitored Installment Agreements

  1. Before determining if the case needs to be a manually monitored IA make sure it does not qualify for the Front End Mirror Assessments Process for Installment Agreements. See IRM 5.19.1.5.5.11.1, Front End Mirror Assessments Process for Installment Agreements (IA) and Currently Not Collectible Hardship Closures (CNC), for the criteria.

  2. Some installment agreements (IA) require special handling. There are rare instances when an IA should not be established through CC IAGRE or does not qualify to be mirrored as in IRM 5.19.1.5.5.11.1, Front End Mirror Assessments Process for Installment Agreements (IA) and Currently Not Collectible Hardship Closures (CNC) .

  3. The types of agreements listed below must be manually monitored ensuring compliance with the terms of the agreement:

    1. Agreements calling for variable amounts

      Example:

      A taxpayer with seasonal income and payment amounts vary from season to season.

    2. Agreements secured from more than one person at different addresses paying on the same liability.

    3. Agreements secured from the secondary taxpayer only (Ensure the taxpayer does not qualify for a "Mirrored IA" prior to requesting a MMIA).

      Note:

      If the secondary taxpayer has a joint and individual tax liability, follow procedures for both primary and secondary taxpayers below.

    4. A balance due on a joint liability, but the primary taxpayer is deceased and has open TDI modules which cannot be resolved.

    5. Agreements on a joint liability from both taxpayers, but one taxpayer has a return delinquency; at the time the MMIA agreement is being established.

    6. Payments at irregular intervals.

    7. Agreements containing both Master File (MF) and Non-Master File (NMF) accounts.

    8. NMF accounts.

    9. The agreement has related modules in Bankruptcy (Status 72).

    10. Agreements from the requesting spouse when there is an unresolved Innocent Spouse claim filed TC 971 ac 065 on the module. Refer to IRM 21.3.12.3.7, Innocent Spouse, for more information.

    11. BMF agreements secured from two or more parties at different addresses on the same liability (partnerships, multiple entities, etc.).

    12. L Freeze modules during pending Joint and Several Liability Relief Under IRC section 6015 claims.

    13. any other agreement not compatible with IDRS monitoring.

  4. For cases meeting MMIA criteria:

    Note:

    If two or more taxpayers are involved prepare one Form 433–D, Installment Agreement, for each taxpayer.

    1. Prepare Form 433–D, Installment Agreement.

    2. Indicate on Form 433–D, Installment Agreement, that the IA request was taken by phone.

    3. Send Letter 2273C, Installment Agreement Accepted; Terms Explained, and include instructions to mail payments to the campus address where the account is located to each party requesting the IA.

      Caution:

      Do NOT provide lockbox addresses for these agreements.

      Reminder:

      If this is a joint account and only one of the taxpayer requests the agreement, ensure only that taxpayer's name appears on the letter.

      Caution:

      If any modules are in bankruptcy Status 72, send all copies of Form 433–D, Installment Agreement, to the Centralized Insolvency Operation.

    4. When the primary taxpayer requests the agreement:

      If Then
      The Collection Location Code (CLC) is 35 Input CC ASGNI 35006996
      The CLC is other than 35 Change the CLC to 35 using CC ENREQ/INCHG , Doc Code 50, CLC 35 Group 00

    5. After the CLC change posts, input CC ASGNI 6996 assigning the account to Centralized Case Processing (CCP). If the request to change the CLC or CC ASGNI does not take because of a freeze code on the account (e.g., A disaster freeze) then send the case to Centralized Case Processing. Include the information regarding the freeze condition and the need to monitor until the freeze is resolved.

    6. When the secondary taxpayer requests the agreement:
      1. Input CC STAUP 2200.
      2. Do not change the CLC or the CC ASGNI so collection action may continue for the primary taxpayer.

      If Then
      The Primary taxpayer requests the agreement Input a history item on CC ENMOD, for example "MMIATFCCP", indicating the MMIA was transferred to CCP.
      The secondary taxpayer requests the agreement
      • Input a history item on CC ENMOD, for example "MMIATFCCP" indicating the MMIA was transferred to CCP.

      • Input a second history, for example "MMIA4SSSN", indicating the MMIA is for the secondary social security number only.

    7. Input TC 971 ac 063 using CC REQ77

      Note:

      If the agreement is for the secondary taxpayer only, input the secondary taxpayer SSN in the XREF-TIN field

    8. Establish the user fee module for all MMIA agreements: IRM 5.19.1.5.5.5.2, Manual Establishment of User Fee Module.

      If And Then
      The MMIA is for the secondary taxpayer only Has an Entity established Create the user fee module under the secondary taxpayer SSN. See IRM 5.19.1.5.5.5.2, Manual Establishment of a User Fee Module.
        Does not have an established Entity
      1. Establish the user fee module under the primary taxpayer SSN

      2. Input a history on CC ENMOD indicating the user fee is for the secondary taxpayer.

    9. Attach the following items to Form 3210, Document Transmittal:
      1. A copy of the completed Form 433–D, Installment Agreement
      2. CC ENMOD print
      3. Any pertinent documentation including financial information if appropriate.

    Note:

    Sometimes it takes more than 30 days for the MMIA set up; notify the taxpayer their first payment should be received by the agreed date even if they do not receive Letter 2273C from the IRS; Provide the taxpayer the payment address to make their first payment

  5. Forward the complete package to Philadelphia Service Center following address within seven days, see: http://mysbse.web.irs.gov/AboutSBSE/aboutccs/ccsprog/casepro/ccpcoll/mailingprocedures/21073.aspx.

21.3.12.4.6  (07-09-2013)
Proposal Does Not Meet Guaranteed or Streamlined installment Agreement Criteria

  1. Prior to transferring the call to NSIA, ask the taxpayer if they can answer questions relating to their monthly expenses. Examples would include: mortgage/rent payments, utility bills, food, and car payments. If the taxpayer cannot provide this information do not transfer the call. Follow the procedures in paragraph (4) below.

  2. If the taxpayer has financial information available and you are on a Non-Streamlined Installment Agreement (NSIA) application, follow non- streamlined procedures in IRM 5.19.1.6, Securing Financial Information.

  3. If the IMF taxpayer has financial information available, but you are on an IMF SIA application, transfer to NSIA per the Telephone Transfer Guide.

  4. If the taxpayer does not have financial information available take the following account actions:

    1. Advise the caller they need to obtain the Form 433–F, Collection/Information Statement . Follow IRM 21.3.6.4.1, Ordering Forms and Publications.

    2. Advise the caller to also submit Form 9465, Installment Agreement Request, with the proposed amount they can pay each month.

    3. Input STAUP 22 06. If all modules are Status 21, input STAUP 58 06. Do not input STAUP on Status 60 or 64.

    4. If the taxpayer provided all of the information to be considered a formal request for an installment agreement per IRM 21.3.12.4.4.1, Pending Installment Agreements, input a TC 971 ac 043 using REQ77 on all balance due modules. If the taxpayer does not provide all pending IA information, ask probing questions to request it.

      Caution:

      Before inputting the TC 971 ac 043 make sure the taxpayer provided all of the required information for the request to qualify as a "pending" installment agreement. The taxpayer must: provide information sufficient to identify the taxpayer, identify the tax liability to be covered by the agreement; propose a monthly payment of a specific amount and be in compliance with filing requirements.

    5. Annotate the reason the IA is considered pending on AMS.

    6. Advise the taxpayer to mail back the Form 433–F, Collection Information Statement, within 30 days. Provide the correct mailing address to the taxpayer. See Service Center Addresses for Collection Operations .

21.3.12.4.7  (10-01-2012)
In-Business Trust Fund (IBTF) Express Agreement Criteria

  1. Accounts Management (AM) employees are authorized to establish IBTF Express Agreements up to the aggregate assessed balance (CC SUMRY) of $10,000.

  2. In order to participate in the new IBTF Express Agreements, taxpayers must meet the following criteria:

    • Taxpayers must be in filing compliance with filing and Federal Tax Deposits (FTD). If not, the installment agreement will not be granted.

    • Taxpayers have to meet the dollar criteria at the time the IBTF Express Agreement is granted. The entire liability may not exceed $10,000 (aggregate assessed balance) when the request is made.

    • The entire liability including accruals, must be paid within 24 months, or before the CSED, whichever is earlier. To help determine if the account will be fully satisfied within the 24 months, use Decision IA or CC ICOMP.

  3. If AM receives a request for an IBTF Express Agreement, AM employees will research the account to determine:

    If Then
    Balance due is above $10,000 Prepare Form 4442, Inquiry Referral, and fax to the appropriate SB/SE Service Center Collection Campus
    Balance due is above $10,000- taxpayer is offering a lump sum payment Prepare Form 4442, Inquiry Referral, and fax to the appropriate SB/SE Service Center Collection Campus

    Note:

    See IRM 21.3.12.4.4.1, Pending Installment Agreement Criteria if meets pending installment agreement criteria.

    Balance due is above $25,000
    1. Advise the 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. Input STAUP 22 00.

    4. Input ASGNB 6501.

      Note:

      See IRM 21.3.12.4.4.1, Pending Installment Agreement Criteria if meets pending installment agreement criteria.

    Balance due is above $25,000 and taxpayer wants to make lump sum payment Prepare Form 4442, Inquiry Referral, and fax to the appropriate SB/SE Service Center Collection Campus

    Note:

    See IRM 21.3.12.4.4.1, Pending Installment Agreement Criteria, if meets pending installment agreement criteria.

    Balance due is under $10,000 but taxpayer can not full pay within 24 months or within CSED. This means full paying the balance including accrued penalties and interest.
    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. Input STAUP 22 00.

    4. Input ASGNB 6501.

    Note:

    See IRM 21.3.12.4.4.1, Pending Installment Agreement Criteria, if meets pending installment agreement criteria.

    The taxpayer is not compliant in filing delinquent returns
    1. Advise taxpayer to fax delinquent return(s) if possible or file return(s) and to call within 30 days for a status report on the filing of the delinquent returns.

    2. Input STAUP 2209 on any balance due module in notice status if taxpayer is unable to fax delinquent return(s) while on phone.

    3. Notate AMS with the date the taxpayer promised to file the form(s), tax period(s).

    4. If there is an account in Notice Status 02, input CC ASGNB with delay code C08.

    The taxpayer is not compliant with FTD If the taxpayer does not meet pending IA criteria, see IRM 21.3.12.4.4, Taxpayer Can Make Payments- Installment Agreements,:
    1. Input STAUP 2209

    2. Explain to the taxpayer the IA cannot be granted at this time but will place a hold on the account and allow 30 days to become current. Advise taxpayer to call back when FTDs are current.

      Note:

      See IRM 21.3.12.4.4.1, Pending Installment Agreement Criteria



    If taxpayer meets pending IA criteria:
    1. Input TC 971 ac 043

    2. Complete Form 12233 and forward for Independent Review. See IRM 5.19.1.5.5.9, Rejected Installment Agreement Independent Review, for procedures.

    Reminder:

    Do not send cases to the field, no matter what the balance is if the taxpayer is NOT current with FTDs.

  4. Taxpayer meets all IBTF criteria and is in full compliance:

    1. If the agreement is accepted, input the IBTF Express Agreement using agreement locator number (ALN) 0115 .

    2. Advise the taxpayer verbally about the user fee.

    3. Explain the direct debit option.

    4. Explains terms of agreement verbally or in writing.

    5. Send Letter 2273C or generate Letter 3217C.

    6. Give address to send payment and check annotation information either verbally or in writing.

      Note:

      If sending either the 2273C or 3217C letter, advising them the mailing address and check annotation information is contained in the letter covers this requirement.

  5. If the taxpayer has a IBTF Express Agreement, they can convert to a IBTF Express DDIA per IRM 5.19.1.5.5.13.1, Direct Debit Installment Agreement - Form 433–D , Installment Agreement, and Form 9465, Installment Agreement Request, and meet all of the requirements listed in paragraph (2) above.

21.3.12.4.8  (02-07-2013)
User Fee

  1. The installment agreement (IA) user fee allows the IRS to recover costs of administering the IA program. The IA user fees are structured as follows:

    • Direct Debit Agreements- $52

    • Regular IA- $105

    • Low Income taxpayers- $43

    • Reinstatement- $45

  2. The origination fee is established by regulation and cannot be waived for any reason for any installment agreement. The reinstatement/revision fee can only be waived for those reasons cited in paragraph (5) below. Hardship criteria does not apply to the user fee.

  3. The user fee is non-refundable even if :

    • the taxpayer full pays the account prior to the issuance of the first CP 521 notice, Installment Agreement Reminder Notice.

    • the installment agreement is not immediately input on IDRS and the account has not updated to Status 60.

  4. See the table below for when to charge a user fee.

    If And Then
    The account is not in status 6X (installment agreement status) Intentionally left blank An original user fee must be charged and is never waived. Hardship is not considered a condition to waive the user fee.
    The installment agreement was terminated The status on the account is no longer 64 An original user fee must be charged. The agreement is considered a new agreement.
    The taxpayer requests to add another liability of more than $200 to the agreement The account balance is more than deferral; for deferral levels, see IRM 21.3.12.2(6), Balance Due Research. A reinstatement user fee must be charged.
      OR  
      it requires more than two additional monthly payments to full pay the balance due Exception: If the balance being added is less than $200 or can be full paid in two additional payments, do not charge a reinstatement fee. If the balance is still under deferral with the added liability, waive the reinstatement fee.
    The taxpayer requests to change the monthly payment amount The agreement no longer meets streamlined criteria or the CSED is an issue A reinstatement user fee must be charged.

  5. The user fee can not be waived due to hardship or based on an individual decision from an IRS employee. If the taxpayer qualifies for the reduced user fee, the computer will automatically recognize the situation and charge the appropriate fee. To provide the taxpayer with the correct user fee amount, research CC ENMOD for the Low Income Indicator, (LII). The chart below will provide guidance for when the user fee can be waived.

    Note:

    If the taxpayer had a prior agreement but when inputting CC IAGRE, the response screen is CC IAORG, it is no longer considered a reinstatement. It means the account has left status 6X (more than 8 weeks) or too much time has passed for the agreement to be considered a reinstatement and an original user fee must be charged. If the response is CC IAREV the IA data has been retained and the reinstatement fee can be waived if appropriate.

    If And Then
    The taxpayer requests to revise a payment date or a payment amount The agreement is a SIA and will still meet SIA criteria after the payment decrease Waive the reinstatement user fee.
    The taxpayer is entering into a full pay 60-120 day agreement Intentionally left blank Waive the reinstatement fee.
    The IA was erroneously defaulted by IRS Intentionally left blank Waive the reinstatement fee.
    The IA is reinstated after a bankruptcy is closed Intentionally left blank Waive the reinstatement fee.
    The taxpayer had an IA established prior to entering a combat zone Now exited the combat zone Waive the reinstatement fee.
    Converting an IA to a DDIA within six months of the original IA Intentionally left blank The user fee will be reduced to $52.00 .

  6. The user fee module is created when the CP 521, Installment Agreement Reminder Notice, generates and a TC 694, Designated Payment Code (DPC) 49, 50 or 51 posts to Master File. User fee modules are created on IDRS under MFT 13 (BMF) or MFT 55 (IMF).

    • The user fee payment for a DDIA posts MFT 13 (BMF) or MFT 55 (IMF) as a TC 694 with DPC 49 and a TC 360.

    • The user fee payment for all regular agreements posts to MFT 13 (BMF) or MFT 55 (IMF) as a TC 694 with DPC 50 and TC 360. (This includes reduced fees)

    • The user fee payment for a reinstatement posts to MFT 13 (BMF) or MFT 55 (IMF) as a TC 694 with DPC 51 and TC 360.

  7. The user fee transfer program, or "sweep", is run every weekend after four cycles on accounts with unpaid user fees. The user fee will be systemically screened for payments to satisfy the user fee amount. If during the sweep there is not a sufficient amount of payment to cover the entire user fee amount, the fee will not be taken at all during that sweep. (No partial amount will be taken).

  8. Change the payment amount, payment due date, payment due cycle, and any other data requiring updates using CC IAGRE to generate CC IAREV. If manual transfer of the user fee is necessary see the table below.

    Note:

    If the taxpayer's user fee code, literal "USER FEE PAID" on CC IADIS is "N", the originator fee is due; do not change the user fee code to "R", revised/reinstatement fee due. The taxpayer is responsible for the originator, in this circumstance, has not yet paid it. Do not charge for the originator and the revised/reinstatement fees simultaneously.

    If there is an installment payment available and Then
    The user fee module is established. Input a credit transfer to move the appropriate amount to pay originator fee in the user fee module; for additional information: IRM 5.19.1.5.5.5.3, User Fee Payment Transfer/User Fee Abatements.
    There is no user fee module established. Establish the user fee module and transfer the appropriate fee amount with a posting delay code of "2"; for additional information: IRM 5.19.1.5.5.5.2, Manual Establishment of User Fee Module.

    Once the originator fee is paid, update the user fee to "Y", revised/reinstated fee due.

  9. For additional information on the user fee, see IRM 5.19.1.5.5.5, Installment Agreement Payment Methods and User Fees (UF) Overview.

21.3.12.4.9  (10-01-2013)
Installment Agreement Terms and Conditions

  1. When speaking to the taxpayer, advise them verbally a user fee is charged and is taken from their first payment(s). Research the account to determine if the taxpayer qualifies for the reduce fee. CC ENMOD will show the Low Income Indicator (LII). Provide the taxpayer with the appropriate user fee to be charged.

    Note:

    The first monthly payment should be at least the amount of the user fee when the proposed payment amount is less than the user fee; subsequent payments revert to the requested payment amount. However, the user fee can be taken from more than one payment.

  2. Advise the taxpayer verbally or in writing the terms of the agreement. If sending a Letter 681C or Letter 2273C, it is only necessary to advise the taxpayer a confirmation letter is being sent. Advise the caller the terms of the agreement are explained in the letter.

  3. If verbally providing the caller the terms of the agreement, advise them:

    1. To make payments timely with increases as appropriate.

    2. Advise the taxpayer any future refunds are applied to the balance due, regardless of the IA type established, and these offsets do not replace the monthly payment due.

    3. Advise the taxpayer penalties and interest continue to accrue until the balance is paid in full.

    4. Advise the taxpayer all subsequent returns must be filed and paid in a timely manner.

    5. Failure to receive a reminder notice is not a valid reason for not making timely payment.

  4. Advise the taxpayer verbally or in writing how to annotate the check. If sending a Letter 681C or Letter 2273C it is only necessary to advise the taxpayer the information on how to annotate the check is contained in the letter. If providing the information verbally, advise the taxpayer of the following:

    • To make the check or money order payable to "United States Treasury."

    • Taxpayer's name and address

    • SSN or EIN (specify the primary TIN or the TIN on the return), please explain the primary SSN on installment agreement should be annotated

    • Daytime telephone number, whether IMF or for business

    • Tax form(s) including business and individual as possible on memo area

    • Tax periods for which they are making payment(s) including business and individual as possible on memo area. AM should suggest including CP notice if possible.

  5. Provide the taxpayer verbally or in writing with correct mailing address for the CSCO campus with jurisdiction. See SERP Who/Where-Where to File- Forms and Payments for the mailing address.

  6. If the taxpayer asks how the payments are applied, explain payments are applied in the following order:

    1. User Fee

    2. Oldest tax assessed

    3. Penalties on oldest tax assessed

    4. Interest on oldest tax assessed

    5. Once the oldest assessment is paid in full, payments are applied to the second oldest tax assessed in the same manner outlined above and continue until all balance due modules are paid in full.

  7. Taxpayers cannot delegate installment agreement payments. Payments are applied to the balance with the oldest CSED.

21.3.12.4.10  (10-01-2013)
Balance Due Outgoing Correspondence

  1. When the taxpayer enters into a payment arrangement, either a 60 to 120 day full pay agreement or IA, it is necessary to confirm the conditions of the agreement in writing.

  2. For IA requests the following information should be included in outgoing balance due correspondence (Letter 2273C, Installment Agreement Accepted; Terms Explained, or Letter 3127C, Revision/Reinstatement to Installment Agreement):

    1. Terms of the agreement which include the monthly payment and due date

    2. User fee and eligibility for reduction in User Fee

    3. Inform the taxpayer they will receive a monthly reminder notice

    4. Ensure payments are mailed ten days prior to the due date

    5. If you are adding a pending liability to a current agreement, you must include a paragraph in the letter advising the taxpayer a bill is issued when the tax is assessed, as required by law, but no collection action is taken once we input the agreement and no response to the notice is required

    6. Penalties and interest continue to accrue and how they are calculated

    7. The CSCO campus with jurisdiction mailing address. See SERP - Who/Where Collection Payments/Addresses/Issues.

    8. Check annotation

    9. Any refunds due will be applied to the balance due until paid in full

    10. Appropriate forms if applicable.

    11. Envelopes

  3. Do not provide a lockbox address in any "C" letters. Lockbox will only process payments with the CP 521, Installment Agreement Reminder Notice, or CP 523, Installment Agreement Default Notice.

  4. Providing the taxpayer with their current balance due in outgoing correspondence is not required when the taxpayer has contacted us and set up an agreement which will pay the balances owed.

  5. For Full Pay Within 60 to 120 day Agreement requests the following information should be included in outgoing balance due correspondence Letter 681C, Proposal to Pay Later Accepted:

    1. Inform the taxpayer of the balance due with penalties and interest figured to the payoff date.

      Note:

      On unassessed balances, inform the taxpayer that we accept their request to full pay but can not provide them with a payoff amount. Advise the taxpayer within six to eight weeks they will receive the required notice of assessment. At that time, they should contact our office for a payoff amount.

    2. Penalties and interest continue to accrue and how they are calculated

    3. The CSCO campus with jurisdiction mailing address. See SERP - Who/Where Collection Payment Addresses

    4. Check annotation

    5. Ensure payments are mailed ten days prior to the due date

    6. Envelope

  6. Currently Not Collectible send the Letter 4624C, Case Closed -- Currently Not Collectible; Lien Filing Notification on Currently Not Collectible, which should include the following information for the taxpayer:

    1. No collection action will take place at this time

    2. An annual notice will be issued reminding them of their balance owed

    3. Penalties and interest continue to accrue

    4. The CSCO campus with jurisdiction mailing address. See SERP - Who/Where Collection Payment Addresses.

  7. All other issues should be handled accordingly and address the taxpayer's requests and concerns.

  8. If multiple issues are involved, select the letter that best addresses the main issue. Use open paragraphs to address any additional IRS or taxpayer issues.

21.3.12.4.11  (05-01-2013)
BMF In-Business Non-Trust Fund Modules Only, Taxpayer is Out of Business and/or Form 1120 Accounts Only

  1. Determine if the taxpayer has filed all returns as of the date of the contact or through the date of business closure as appropriate. If Yes, continue on to (2) below. If No take the following actions:

    1. Advise taxpayer to file returns and to call within 30 days with a status report on the filing of the delinquent returns.

    2. Input STAUP 2209 on any balance due module in notice status.

    3. Notate AMS with the caller's name, position and deadline to file the return(s).

    4. If there is an account in Notice Status 02, input CC ASGNB with delay code C08.

  2. Determine if the aggregate assessed balance (CC SUMRY) is $25,000 or less and the taxpayer agrees to an agreement that will full pay within 72 months or before the CSED, whichever is earlier. If No, continue on to (3) below. If Yes, take the following actions:

    1. Input the agreement using Agreement Locator Number (ALN) 0136.

    2. Send Letter 2273C or generate Letter 3217C.

    3. Give address to send payment either verbally or in writing, see Campus Balance Due Accounts "Where to Send Payments".

    4. Advise how to notate payments either verbally or in writing, see IRM 21.3.12.4.1, (6) Can Full Pay Balance Due Now (Payoff within 1 to 10 days) IMF and BMF.

  3. If the aggregate assessed balance (CC SUMRY) is more than $25,000 and/or the taxpayer does not agree to an agreement that will full pay within 72 months or before the CSED, whichever is earlier, take the following actions:

    1. Advise taxpayer to complete Form 433−B, Collection Information Statement for Businesses, and return form with all documentation as noted on the form within 30 days.

    2. Input history on AMS noting caller's name, position and proposal amount and due date which exceeds AM agreement authority.

    3. Input STAUP 22 00 on all balance due modules.

    4. Input TC 971 ac 043 on every balance due module if it meets criteria in IRM 21.3.12.4.4.1, Pending Installment Agreement .

21.3.12.4.12  (05-29-2013)
Taxpayer Cannot Make Payments-IMF Accounts

  1. If the assessed balance due is ≡ ≡ ≡ ≡ ≡ or more, transfer the call to:

    • W & I- #92080

    • SB/SE- #92085

  2. Accounts that can not be closed Currently Not Collectible by Compliance and AM:

    • Accounts with an OIC indicator on IDRS

    • If the taxpayer/POA refuses to pay or file

    • If the taxpayer claims Frivolous Tax Arguments

  3. Accounts can be removed from the collection process. Accounts may be reported CNC for a variety of reasons using transaction code (TC) 530 on a REQ77. It is a requirement that TC 530 be defined by the appropriate closing code. The correct closing code is important because it sets a minimum total positive income amount the taxpayer can report before the TC 530 is systemically be reversed.

  4. Determine if the taxpayer meets Front End Mirror Assessments Process for Currently Not Collectible Hardship Closures (CNC). See IRM 21.3.12.4.5.3, Front End Mirror Assessments Process for Installment Agreements (IA) and Currently Not Collectible Hardship Closures (CNC), for the criteria.

  5. A taxpayer must be in full compliance with the filing of the returns to be placed in CNC unless the collection determination is hardship. If there are accounts in status 02/03, determine if the TDI can be closed per IRM 5.19.2.5.4.5, IMF-Determining Liability.

    If Then
    The TDI can be closed. Input the FRM49 with appropriate closing transaction codes. IRM 21.3.12.2.1, Full Compliance Check, and continue with CNC procedures.
    the open TDI can not be closed.
    1. Allow the taxpayer 30 days to file the missing return and

    2. Input a STAUP, if the account is in status 21, input STAUP 5809, all others input STAUP 2209 and

    3. Advise the taxpayer a temporary hold has been placed on the account and

    4. Advise the taxpayer to call back in approximately 8 weeks to allow the processing of the return and closing of the TDI.

    Note:

    Accounts for certain individuals also responsible for business tax liabilities may be reported as CNC hardship. Refer to IRM 21.3.12.4.12.2, BMF Accounts Closed as Hardships - Taxpayer Cannot Make Payments.

  6. CNC criteria for closing accounts CNC:

    If balance including prior CNCs is Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Close as tolerance criteria, with TC 530 cc 09. Managerial approval not required.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Close as tolerance criteria, with TC 530 cc 24. Managerial approval not required.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Consider CNC Exception processing as shown in IRM 21.3.12.4.12.1, Exception Criteria- CNC. Managerial approval required.

    Note:

    If criteria for CNC Exception processing is not met, transfer call to non-streamlined installment agreement application if taxpayer has financial information available. A financial analysis needs to be completed.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Transfer call, as appropriate, to NSIA per IRM 21.3.12.4.6(4), Proposal Does Not Meet Guaranteed or Streamlined installment Agreement Criteria. Also see IRM 5.19.4.5.2, Lien Filing Determination.

  7. When reporting an account as CNC input the TC 530 using REQ77. Input the appropriate closing code and Responsibility Unit Code 9.

  8. For cases that do not meet exception criteria, a financial analysis must be completed. Employees working SIA applications, if the taxpayer states they cannot pay but do not meet exception criteria, transfer the call to NSIA. For employees working NSIA or PPS applications, see IRM 5.19.1.7.1.5, CNC Unable to Pay – Hardship.

  9. For accounts being closed CNC, unable to pay- hardship, send a Letter 4624C providing the taxpayer with the CNC terms. If you advise the taxpayer the CNC terms are in the letter, then verbal review of the terms with the taxpayer is not required. See IRM 21.3.12.4.10, Balance Due Outgoing Correspondence.

  10. If closing as tolerance/deferral CNC, no letter is required. Verbally provide the conditions of CNC. See IRM 21.3.12.4.12.1 (3), Exception Criteria- CNC, for the conditions.

  11. For other issues relating to CNC see:

    • IRM 5.19.1.7.1.7, Cases reported CNC Based on Prior CNC

    • IRM 5.19.1.7.1.10, CNC Assessment Against Two or More Taxpayers

21.3.12.4.12.1  (10-18-2012)
Exception Criteria- CNC

  1. Exception Criteria- : Under certain conditions, securing financial information is not required before reporting an account CNC. CNC Exception cases have an aggregate assessed (SUMRY) balance including any prior CNCs, less than ≡ ≡ ≡ and one or more of the following conditions exist:

    • Taxpayer has a terminal illness or excessive medical bills.

    • Taxpayer is incarcerated.

    • Taxpayer’s only source of income is Social Security, welfare, or unemployment.

    • Taxpayer is unemployed with no source of income (excluding the seasonal unemployed which fall under normal CNC consideration and processing).

    For additional information see IRM 5.19.1.7.1.4, CNC Exception Processing.

    Note:

    These accounts require managerial or designee approval.

  2. If it has been determined the account(s) can be closed under Exception Criteria:

    1. Input TC 530 using REQ77 on all balance due modules. Use cc 24 and responsibility code 9.

    2. For all cases being closed CNC, document all appropriate information on AMS.

    3. If the case meets Exception Criteria, it is not necessary to send Letter 4624C, Case Closed -- Currently Not Collectible; Lien Filing Notification on Currently Not Collectible. Verbally advise the taxpayer the conditions of CNC determination are as follows:

      • If your financial condition improves, we may reopen your case to determine if you can pay the tax.

      • We will apply any refunds due on future federal returns to the outstanding liability.

      • We will continue to add penalties and interest to the account; however, making regular payments will help to reduce the balance and minimize additional penalties and interest.

      • It is very important that you file all future tax returns and pay any amounts you owe on time.

      • We will send you an annual notice to remind you of the balance due, including penalties and interest.

      • You don’t need to take any action at this time. However, it is to your advantage to make voluntary payments towards the amount you owe, if possible, to minimize additional penalties and interest.

21.3.12.4.12.2  (06-13-3013)
BMF Accounts Closed as Hardships - Taxpayer Cannot Make Payments

  1. Accounts that can not be closed Currently Not Collectible (CNC) by Compliance (ACS, ACSS and CSCO) and AM are:

    • BMF In-Business taxpayers

    • Accounts with an OIC indicator on IDRS

    • If the taxpayer/POA refuses to pay or file

    • If the taxpayer claims Frivolous Tax Arguments

  2. If the taxpayer meets the following criteria consider reporting the account as CNC:

    • The taxpayer is a sole proprietorship, general partnership or Single Member Owner (SMO) Limited Liability Company (LLC) , where the SMO is determined to be liable for the tax liability.

    • The taxpayer is out of business.

    • The business has no assets or income.

    • The sole proprietor, general partners, or SMO have no assets or income.

    • Taxpayer is not in an Offer In Compromise.

    • All filing requirements are in compliance.

      Note:

      Accounts for certain individuals responsible for business tax liabilities may be reported as CNC hardship if 433–B , Collection Information Statement for Businesses, verifies the business is unable to pay and Form 433–A, Collection Information Statement for Wage Earners and Self-Employed Individuals, verifies the individual is unable to pay, even if there are unfiled returns , see IRM 5.19.1.7.1.5, CNC Unable to Pay – Hardship. This applies to an account for an individual or joint IMF assessment including an account for a sole proprietorship, a general partner, or a Single Member Owner who is liable for an LLC liability.

  3. A taxpayer must be in full compliance with the filing of the returns to be placed in CNC. If there accounts in status 02/03, determine if the TDI can be closed per IRM 5.19.2.5.5.4, BMF-Determining Liability. If the account being reported CNC is a BMF out of business account, ensure all filing requirements are closed.

    If Then
    The TDI can be closed
    1. Input the appropriate closing transaction codes.

    2. Continue with CNC procedures. Input TC 530 with the appropriate closing code. Use Responsibility code 9.

    The open TDI can not be closed
    1. Allow the taxpayer 30 days to file the missing return and

    2. Input a STAUP, if the account is in status 21, input STAUP 5809, all others input STAUP 2209 and

    3. Advise the taxpayer a temporary hold has been placed on the account and

    4. Advise taxpayer to call back in approximately eight weeks to allow the processing of the return and closing of the TDI.

  4. When closing a BMF account as a hardship, input the appropriate TC 130s. There may be 2 separate TC 130 inputs required.

    1. The TC 130 input on the BMF entity to offset IMF refunds to the BMF balance owed. The action is required on all cases if not previously input.

    2. The TC 130 input on the IMF entity. The TC 130 on the IMF account will cause the BMF accounts to come out of CNC if the taxpayer files a personal return that shows the ability to pay the BMF obligation. The TC 130 must be input on all BMF accounts involving sole proprietors, general partners or sole members of an LLC (where the owner is identified as the liable taxpayer).


    When a TC 130s is required, use the following chart for the input information:

    REQ77- Field input TC 130 on BMF Entity TC 130 on IMF Entity
    TC 130 130
    TRANS-DT Date of TC 530 input Date of TC 530 input
    CLOSING CODE   Closing code used for the input of the TC 530 on the BMF account.
    DLN 000 000
    XREF-TIN SSN EIN
    NM-CTRL IMF name control BMF name control

  5. CNC criteria for closing accounts CNC:

    If balance due including prior CNCs is Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Close as tolerance criteria, with TC 530 cc 09. Managerial approval is not required.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Close as tolerance criteria, with TC 530 cc 24. Managerial approval is not required.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Consider CNC Exception processing as shown in IRM 21.3.12.4.12.1, Exception Criteria- CNC. If CNC Exception Criteria is met, managerial approval is not required. If CNC Exception criteria is not met:
    • a financial analysis must be completed

    • sole proprietors must complete Form 433–A, including the self-employment sections

    • general partners and sole members of LLCs must complete Form 433–B for the business and Form 433–A for the partners or sole member

    • provide the taxpayer with the appropriate mailing address.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ A financial analysis must be completed:
    • sole proprietors must complete Form 433–A, including the self-employment sections

    • general partners and sole members of LLCs must complete Form 433–B for the business and Form 433–A for the partners or sole member

    • provide the taxpayer with the appropriate mailing address.

21.3.12.4.12.3  (10-01-2012)
CNC Options For Defunct Corporations, Exempt Organizations, Limited Partnerships, and Limited Liability Companies (LLC)

  1. Defunct corporation applies to:

    • Any corporation or exempt organization that is no longer operating and from which all assets have been dispersed.

    • Corporations dissolved under state receivership proceedings or other state dissolution proceedings.

    • Limited partnership cases when the partnership agreement limits the liability of the partners under local law, when the business is no longer operating and from which all assets have been dispersed.

    • LLC cases (where the LLC is identified as the liable taxpayer), when the business is no longer operating and from which all assets have been dispersed.

    ≡ ≡ And Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ A person legally authorized to act for the business (partner, officer, etc.) states the company is defunct and all assets were dispersed. Document AMS with NC10 request and provide IDRS print to the Manager. If approved input TC 530 cc10 to IDRS via CC REQ/FRM77
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ A person legally authorized to act for the business (partner, officer, etc.) states the company is defunct and all assets were dispersed. Input history on AMS of TFQU (to field queue) request and send for manager approval. Manager will document approval on AMS. If approved input CC STAUP 2400 and ASGNB AOTO7000

21.3.12.5  (10-01-2010)
Taxpayer Calling About An Existing or Defaulted Installment Agreement

  1. This sub-section contains procedures for accounts where the taxpayer has an installment agreement but is requesting a change. This section also provides initial procedures for defaulted IAs.

21.3.12.5.1  (02-07-2013)
Taxpayer Requests An Installment Agreement Payoff Amount

  1. Ask the taxpayer if there is any recent payment(s) or levy(s) potentially affecting their account balance. Reduce the payoff amount by anticipated credits not yet pending on IDRS. All information must be documented on AMS.

  2. Determine if user fee has been paid by checking CC IADIS.

    • If the user fee has not been paid advise the taxpayer once the IA has been established the user fee must be paid even if the balance is full paid before the first payment is due.

    • The user fee has not been paid if the user fee indicator is N and account is not in status 6X. Do not transfer a payment from a full paid account to the user fee; IRS must collect the fee while the account is in status 6X.

    • Add the appropriate user fee to the computed balance due. See IRM 5.19.1-12, Installment Agreement User Fee Codes.

  3. For phone contact compute payoff amount using CC INTST or AMS/IAT payoff calculator:

    • Add 10 days to date the taxpayer is mailing a check or money order

    • For credit card payments, use the date the taxpayer states they will authorize the payment, see IRM 21.2.1.48.4, Credit or Debit Card Payments (Pay by Phone or Internet), for more information.

    • Electronic Federal Tax Payment System (EFTPS) compute the payoff amount to the date the payment is requested by the taxpayer unless requested after 8:00 PM ET; if so, use the next day.

  4. Advise the taxpayer where to send the payment. See SERP - Who/Where-Where To Send Payments .

  5. Advise the taxpayer verbally how to annotate all payments with necessary information if needed., see IRM 21.3.12.4.1 (6), Can Full Pay Balance Due Now (Pay Within 1–10 Days).

  6. Enter the promise to pay date and amount on AMS comments or ENMOD if no access to AMS.

21.3.12.5.2  (07-09-2013)
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 5.19.1.5.5.13(9), Direct Debit Installment Agreement (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 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.

  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 5.19.1.5.5.13.2, 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.≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡


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