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Part 21. Customer Account Services

Chapter 4. Refund Inquiries

Section 4. Manual Refunds

21.4.4  Manual Refunds

All Official Use Only content has been replaced with ≡.

21.4.4.1  (10-01-2006)
What is a Manual Refund

  1. A Manual Refund (TC 840) is a refund that is not generated through normal Master File processing (TC 846). Manual refunds are requested on either Form 3753,Manual Refund Posting Voucher , or Form 5792,Request for IDRS Generated Refund.

  2. Employees from all functions can initiate requests for manual refunds. The Form 3753 or Form 5792 manual refund requests are prepared by the initiator and are processed by the Accounting Function of the Submission Processing Campus who schedules and certifies manual refunds.

  3. All requests for manual refunds must be controlled and monitored on the Integrated Data Retrieval System (IDRS) by the initiator (or other management designated employee) to prevent duplicate, erroneous refunds.

  4. This IRM provides information on the types of manual refunds, and the actions needed to initiate one. Other IRM sections will give specific situations when a manual refund is required.

21.4.4.2  (10-01-2009)
Why Would A Manual Refund Be Needed?

  1. The most frequent causes of manual refunds are:

    1. The refund will be going to someone other than the entity name on the master file;

    2. A hardship situation necessitates a quicker refund than normal systemic processing can provide;

    3. The refund is not for a Master File account (e.g. Photocopy Fees or Credit Card Chargebacks); or

    4. Systemic limitations prevent a normal computer generated refund.

  2. When it is necessary to expedite a refund, the use of Form 3753 can provide a refund to the customer within 2 to 3 business days. The Taxpayer Advocate Service (TAS) can initiate a hardship direct deposit via Form 3753. See IRM 3.17.79.5.4.2, Certifying ACH/Direct Deposit Hardship Refunds, for manual refund procedures to issue an Automated Clearing House (ACH) / Direct Deposit Hardship Manual Refund. The use of Form 5792 will provide a refund to the customer within 7 to 10 days.

  3. Caution: Manual refunds improperly controlled and monitored can result in erroneous refunds. A manual refund should not be initiated if an IDRS generated refund will be issued within two cycles. Hardships and other circumstances do warrant exception to this requirement. If a manual refund needs to be initiated, all efforts should be made to prevent a duplicate systemic refund from being issued. .

  4. The completed Form 3753 or Form 5792 is processed by the Submission Processing Accounting Function. Although the manual refund will be issued within a few business days, it may take up to six weeks for the Transaction Code (TC) 840 to post to Master File.

  5. Some circumstances (not an all inclusive list) that may warrant the issuance of a manual refund:

    1. Hardship (See Note below)

    2. Dual Status Returns. See IRM 3.17.79.3.17, Non-Resident Alien and Dual Status Refunds.

    3. Civil Cases

    4. Form 4466,Corporation Application for Quick Refund of Overpayment of Estimated Taxes. See IRM 3.17.79.3.12, Form 4466, Corporation Application for a Quick Refund of Overpayment of Estimated Tax.

    5. Form 8302,Direct Deposit of Tax Refund of $1 Million or More. See IRM 3.17.79.3.10.1 ,Form 8302, Electronic Deposit of Tax of $1 Million or More.

    6. Form 8050,Direct Deposit of Corporate Tax Refund. See the link in (e) above.

    7. Refunds less than $1.00

    8. Any refund of $10 million or more must be issued as a manual refund.

    9. Non Master File Refunds

    10. Congressional Inquiries

    11. Gasohol Claims. See IRM 21.7.8.4.5.4,Form 8849, Schedule 3, Certain Fuel Mixtures and the Alternative Fuel Credit.

    12. Offers in Compromise. See IRM 5.19.7.3.13.3,Disposition of OIC Deposits.

    13. State Income Tax Levy Program. See IRM 5.19.9.2, State Income Tax Levy Program (SITLP).

    14. Return of levied property to taxpayer. See IRM 5.19.4.4.12, Wrongful Levies.

    15. Statute Imminent cases

    16. Injured Spouse Claims. See IRM 21.4.6,Refund Offset.

    17. Tentative Carryback Cases. See IRM 21.5.9.5.12,Carryback Manual Refund

    18. Deceased taxpayers. See IRM 21.6.6.4.18.2, Processing Decedent Account Refunds

    19. Reimbursement of return photocopy fees. See IRM 21.4.4.6.2, Photocopy Fee Refunds.

    20. Chargeback for unauthorized credit card payments. See IRM 21.4.4.6.3, Credit Card Chargebacks.

    21. Taxpayers in bankruptcy (see note below)

    22. Non-receipt of direct deposit refunds due to IRS error. See IRM 21.4.1.4.7.4, Treasury Assistance for Direct Deposits

    23. To release an X- freeze.

    Note:

    Taxpayers requesting manual refunds for hardship reasons should be referred to TAS for hardship determination. Areas referring these cases to TAS, should ensure they have thoroughly documented the Form 911,Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), when an apparent hardship exists.

    Note:

    All taxpayer inquiries regarding bankruptcy should be referred to the Insolvency Field Office servicing the taxpayer. Route according to the SERP Website under "Who/Where " http://serp.enterprise.irs.gov/databases/who-where.dr/inslvncy-bnkrptcy/national_insolvency_field.htm .

21.4.4.3  (10-01-2003)
What Research is Required?

  1. Thorough IDRS research must be completed before submitting a manual refund request to the Accounting Function. IDRS research is not required if the refund is being prepared for the Bureau of Public Debt.

  2. This section details the research needed for all others.

  3. Failure to perform the necessary IDRS research or to provide the supporting documentation when the manual refund is submitted to the Accounting Function will result in the manual refund request being rejected back to the initiator.

21.4.4.3.1  (10-01-2008)
Refund Statute Expiration Date

  1. Before initiating a manual refund, verify that the Refund Statute Expiration date (RSED) has not expired.

  2. The RSED for prepaid credits must be checked for limitations on the amount claimed. The amount to be credited or refunded is limited to the tax paid (which includes tax, penalties, and interest) during the three years immediately preceding the filing of the claim, plus the period of any extension of time to file. See IRM 25.6.1.10.2.7.2.1, Three-Year Rule, for additional information.

  3. If a return is not filed, the amount is limited to the portion of tax paid (the payment of tax could be for tax, penalty, or interest) during the two years immediately preceding the filing of the claim. See IRM 25.6.1.10.2.7.2.2, Two-year Rule, for additional information.

  4. Questionable RSED issues should be referred to the Statute Coordinator in your area.

21.4.4.3.2  (10-01-2006)
Outstanding Balances/Duplicate Refunds

  1. Tax offset capability is lost when a manual refund is issued. Verify the taxpayer has no outstanding tax liabilities that must be satisfied. Generally, all debit balances must be satisfied before issuing a manual refund if the assessed balance is ≡ ≡ ≡ ≡ ≡ ≡ or more and /or accruals are ≡ ≡ ≡ ≡ ≡ or more. When an outstanding tax debt is identified, a manual refund may only be issued for the amount of overpayment in excess of the balance due. (Exception: an Offset Bypass Refund (OBR) indicator may be used to bypass outstanding debts when economic hardship exists.) For procedures on processing an original return with an offset bypass refund, see IRM 21.4.6.5.12.1,Offset Bypass Refund (OBR).

  2. Initiators must review the account using IDRS research to ensure there are no prior, duplicate, manual (TC 840) or computer generated (TC 846) refunds issued at any campus for the credit you are refunding. Research all related accounts using appropriate command codes the same day a manual refund is prepared to verify that a duplicate refund will not be issued.

  3. Verify that the claimed credits (payments) are available for refund and provide documentation (e.g. Command Code (CC) TXMOD print) showing the available credit. Research for any open control bases and coordinate as necessary. The first two digits of the employee IDRS number (Office Identifiers) will identify the employee's location:

    Office Identifiers Campus
    01 Brookhaven
    02 Cincinnati
    03 Memphis
    04 Ogden
    05 Philadelphia
    06 Austin
    07 Atlanta
    08 Andover
    09 Kansas City
    10 Fresno
    63 Taxpayer Advocate Service

  4. All records of accounts must be researched including:

    • Individual Master File (IMF)

    • Business Master File (BMF)

    • Non Master File (NMF)

21.4.4.3.3  (10-01-2006)
Non Master File Research

  1. Research is needed to identify any outstanding balances on Non Master File. Indicators of Non Master File account activity include the presence of an M- Freeze on an account, or a TC 130 on CC ENMOD. Non Master File accounts present on IDRS can be identified using CC TXMOD, ENMOD and SUMRY with the definer "N" after the Taxpayer Identification Number (TIN). When the indicator is present, the initiator of the manual refund must contact the Non Master File Function to request a transcript of all open NMF accounts. NMF accounts are now centralized in Cincinnati.

  2. Consider any outstanding balances or prior TC 840 when determining the amount of the manual refund which can be initiated. The refund amount may be reduced or not approved if there are NMF debts.

  3. If research indicates the taxpayer is eligible for all or a portion of the refund, attach the NMF transcript to the Form 3753, with an explanation of why it qualifies for a manual refund.

21.4.4.3.4  (10-01-2007)
FMS Non-Tax Debts

  1. The Financial Management Service (FMS) issues IRS refunds and maintains the Treasury Offset Program (TOP) for child support, non-tax federal agency debts and state income tax offsets. See IRM 21.4.6.4.2.2, IMF TOP Offset andIRM 21.4.6.4.2.3 , BMF & Civil Penalty TOP Offset, for types of refunds eligible for offset.

  2. If the manual refund is eligible for TOP offset, initiators of manual refunds must inform taxpayers they are still subject to TOP offsets by FMS.

  3. The Bypass indicator can be used with Form 5792, to prevent a TOP offset in limited circumstances. Refer to IRM 21.4.6,Refund Offset, for more information.

  4. Only the bypass indicators 0 or 3 should be used with the Form 3753. SeeIRM 21.4.4.4.2 (7), Preparation of the Form 3753, Manual Refund Posting Voucher .

21.4.4.3.5  (10-01-2009)
Approval From Other Functions

  1. Certain conditions on a module require coordination with other areas before a manual refund can be requested. All information received from these areas must be a part of your manual refund case documentation.

    • Obtain approval from the Fraud Detection Center when an account shows no filing requirements

    • Approval must be requested from the Technical Unit on large corporation (LCI) accounts

    • An M- freeze indicates a Non Master File freeze. See IRM 21.4.4.3.3, Non Master File Research

    • -Z Freeze must be coordinated with Criminal Investigation, Fraud Detection Center

    • -U Freeze must be coordinated with the Erroneous Refund team in Accounting.

    • -V bankruptcy freeze. See IRM 21.5.6.4.35, -- V Freeze

    • -W litigation pending freeze. See IRM 21.5.6.4.37 , --W Freeze

    • - R Refund Hold freeze. A Refund Hold -R freeze can be identified by TC 570 with 999 in the Julian Date field of the Document Locator Number (DLN) (digits 6, 7, and 8). Refund Hold coordinators can be found at http://serp.enterprise.irs.gov/databases/who-where.dr/refund-hold.dr/refund-hold-coordinators.htm

  2. The following account conditions require approval from the Examination function:

    • Computer Condition Code (CCC) "X" for Form 1120 with a Tax Shelter Activity Code

    • Audit Information Management System (AIMS) indicator on the account with AIMS-CD "1" , "3" , or " 5"

    • An AIMS SC is present on CC BMFOL

    • Manual refunds issued to entities with names indicating financial institutions (e.g. Savings and Loan, Bank, Savings Bank)

    • -E Freeze with TC 810 (with Code 1, 2, 3 or 4). See IRM 21.5.10.3.1, IDRS Research Exam Issues, and IRM 21.5.10.4.1.2, Examination Refund Hold Projects.

    • -L Freeze if AIMS Status Code is other than 00 through 06 or 08.

21.4.4.4  (10-01-2009)
Preparation of Manual Refund Forms

  1. Manual refund is exception processing and has a greater margin for error. When possible, allow the system to generate the TC 846 refund. Do not issue a Manual Refund if a generated refund will be released within two (2) cycles. In addition, extreme caution should be used when initiating manual refunds in an accelerated cycle.

  2. If you are preparing a manual refund for $50 million or more, contact the Campus Accounting Function, Manual Refund Unit, as soon as you know you will be requesting the refund.

    Note:

    Manual refunds may be delayed as a result of insufficient advance notification to Accounting / Treasury. See IRM 3.17.79.3.7, $50 Million or $500 Million or Over Refund Reports to Treasury, for additional information.

  3. Form 5792 and Form 3753 are posting documents used by Accounting to schedule and certify refunds. Accounting will reject any request that:

    1. Is not legible, or contains a strike through or white outs

    2. Is prepared on an obsolete form

    3. Does not have supporting documentation attached

    4. Does not have an authorized approval signature

    All offices requesting manual refunds must have authorized signatures on file per IRM 3.17.79.3.5,Employees Authorized to Sign Requests for Refunds.

  4. Manual refund forms must be either computer generated or written in non-erasable ink. When signing a manual refund form, blue ink is recommended.

  5. Any function initiating a manual refund for $1 million or more that contains credit interest, is required to perform an additional review (to be determined by that function) to verify the accuracy of the interest, and to identify and correct any errors.

  6. Manual refunds of $1 million or more, initiated by Accounts Management employees, and contain credit interest, are required to be reviewed by the Technical Unit. These procedures require the Form 3753 or Form 5792 to be forwarded to the Technical Unit for same day review. These requests must be received by 2:00 PM local time at the receiving campus in order for them to complete same day review. Requests received after 2:00 PM will be completed the following business day.

    1. For employees in sites that have a Technical Unit, the Technical Unit will verify the accuracy of the credit interest, identify and correct any errors and return the refund to the originator.

    2. For employees in sites that do not have a Technical Unit, fax Form 3753 or Form 5792, including a copy of the interest computation to:
      Philadelphia, W&I CAS:PAMC
      Attention: Vanessa Kennelly
      Telephone Number: 215-516-2794
      Fax Number: 215-516-2930

    3. The Technical Team will verify the accuracy of the credit interest, identify and correct any errors and fax the approved Form 3753 or Form 5792 to the initiator the same day. Employees in these sites must attach a copy of the approved faxed Form 3753 or Form 5792 to be forwarded to Accounting. If any corrections were made, a new Form 3753 or Form 5792 will have to be completed.

    4. Each refund reviewed must have the "Interest Approved" signature and date. This signature should be placed above the Signature of the Approving Officer. Accounting will reject any manual refund requested by Accounts Management, in excess of $1 million that has not been reviewed by the Technical Unit.

    5. A copy or fax of any corrections to the interest computation will also be referred to the manager of the initiator.

  7. Before sending manual refunds to Accounting, attach prints of Command Codes INOLE, IMFOL / BMFOL, TXMOD, ENMOD and COMPA (if interest was calculated). Sufficient documentation must also be attached to justify issuing the manual refund (i.e. copy of Forms 1040X, 1045, 8379, 1310, 843, etc.).

  8. Joint Committee Cases per IRC 6405: employees must provide the supporting documentation from the Chief of Staff. See IRM 4.36.4 , Joint Committee Specialist Procedures.

21.4.4.4.1  (10-01-2009)
Preparation of Form 5792, IDRS Generated Refund

  1. The Form 5792 is used with the CC RFUND to request an IDRS refund. This form cannot be used to issue refunds of $10 Million or more. Use the latest revision of the Form 5792. The Form 5792 will be prepared in triplicate. Two copies should be forwarded to the Manual Refund Function along with copies of the supporting documentation. The case file must be sent to the Accounting Function the same processing day the CC RFUND is input. Accounting will reject the Form 5792 if the document contains any alterations such as white out, strike through or correction tape. See IRM 21.4.4.5.1, Monitoring Manual Refunds, for controlling and monitoring requirements.

    Note:

    Accounting validates the CC RFUND input with CC REFAP. The boxed entries on Lines 13,17 and 18 of Form 5792 are primarily used to validate with CC REFAP. If the data inputs for both CC RFUND and CC REFAP do not match, the TC 840 will unpost. It is imperative these entries on Form 5792 are legible. See IRM 3.17.79.4.2, RFUND/REFAP Mismatch

  2. The following are line by line instructions for completing Form 5792:

    1. Section I , Block 1, enter the Taxpayer Identification Number (TIN) and File Source of the account from which the refund will be issued

    2. Block 2, enter the Master File Tax Code (MFT)

    3. Block 3, enter the tax period as YYYYMM. Exception: period ending for MFT 52 is always 000000

    4. Block 4, enter the name control

    5. Block 5, enter the TC 840 amount (overpayment, plus allowable interest)

    6. Block 6, enter the TC 770 amount (allowable interest). If no interest is being computed, enter "0" or " .00"

    7. Block 7, enter the overpayment amount: The amount being refunded, less allowable interest

    8. Block 8, enter the appropriate line number. See Exhibit 12 in IRM 2.4.20, Command Codes RFUND and REFAP

    9. Block 9, Interest indicator must be entered. If interest is paid, an interest "from" date is required. Use an "N" for normal interest when interest is payable. Use a "0" (zero) for no interest. Use an "R" for restricted interest. See IRM 20.2, Interest, for interest computation.

      Note:

      If any portion of the overpayment in Block 7 is attributable to a Telephone Excise Tax Refund (TETR), see IRM 21.6.3.5.13, TETR Interest - General Information, for information on TETR interest computations.

    10. Block 10, enter the Universal Location Code (ULC) (formerly the District Office code). (This block will generate when the RFUND CC is input to IDRS) See Document 6209, Section 8.23, for listing of ULC's.

    11. Block 11, to be completed by the person who inputs the RFUND command code to IDRS.

    12. Block 12, elective, enter block series if needed. The block series may be 3, 4, 5, 6 or 9 and identifies why the refund is being issued. A 9 entered in this block must be accompanied by a Bypass Indicator (BPI) code of 1, 2, 5 or 6.

    13. Block 13-18, enter the name and address of the payee. Print using capital, block letters. Use the ENMOD or INOLES information unless there is a name change, different address, or the refund is being issued to an injured spouse or third party. For decedent accounts, do not address the first name line to a deceased taxpayer. Use the name and title, if appropriate, of the person claiming the refund as the payee for refunds issued on decedent accounts. For example, Jim Jones, Executor. The deceased taxpayer's name is shown on the second name line. The "Dec'd" in the second name line should be entered after the given name of the deceased taxpayer on a joint account or after the surname of the taxpayer on an individual account. For example, John "Dec'd" and Jane Doe or John Doe "Dec'd."

      Note:

      If the address on anyForm 3753 or Form 5792 does not match the address on Master File, an explanation must be provided in the Remarks section of the form.

    14. Block 19, annotate reason for the refund in the remarks field. Be specific. Include all pertinent information Accounting will need to verify the interest dates are correct and the credit is available for refund.

    15. Block 20, enter the document locator number (DLN) of the return or the credit. Do not use the DLN of an electronically filed return.

    16. Section II , Check all applicable boxes and enter IRM reference in Block 1, c.

    17. Section lll, the preparer must compute all interest for the TC 770 amount. Be sure to attach a copy of the COMPA print to the Form 5792. Large dollar manual refunds of $1 million or more that contain credit interest, must be reviewed and approved by the Technical Unit. See IRM 21.4.4.4(4), Preparation of Manual Refund Forms .

    18. Section IV , Block 1, enter the IDRS number of the employee inputting the CC RFUND. Block 2-3, enter the name and employee IDRS #, or the Badge number, and phone number of the initiator of the request. The employee inputting CC RFUND may or may not be the person requesting the manual refund.

    19. Blocks 4, 4a, and 5, the Approving Official who signs the refund must be on the Authorized Signature List maintained by the Manual Refund Unit in the Campus Accounting Function. The official will sign in block 4, print their name in Block 4a and enter the date in Block 5.

      Note:

      Form 5792, must be reviewed to verify that the manual refund is appropriate, proper IDRS research was completed, and that the form was completed accurately. The Approving Official's signature certifies to the Accounting Function that the form was reviewed and is correct.

21.4.4.4.1.1  (10-01-2009)
IDRS Generated Refund CC "RFUND"

  1. CC "RFUND" is used to generate the IDRS manual refund. This CC is valid for IMF, BMF, NMF, and IRAF accounts. It is limited to refunds from tax accounts and cannot be used for special Accounting Functions such as Excess Collections.

  2. The IDRS action is input from the information on the Form 5792. The Universal Location Code (formerly District Office Code) is displayed as "-" on the RFUND screen. In most cases the RFUND command will generate the appropriate code. Do not overlay the "-" unless prompted to do so.

  3. CC "RFUND" allows input of refunds for International Accounts by all users. For ULC "66" , "97 " or "98" , the IDRS user will be prompted to overlay with the dump "DO" Code for their campus.

  4. The information from Form 5792, Section IV, Block 2, should be entered in the RFUND field containing all "Rs" . If the number in that field is a badge number, omit the dashes and add three zeroes to equal ten digits.

  5. CC "RFUND" will open an IDRS control base. . If a control base other than your own already exists in a status other than B, you will receive an error message.

  6. The RFUND display will show pending address changes unless the address is a foreign address. In that case the display will indicate a pending foreign address change, and you must research CC ENMOD for the correct address.

  7. For detailed information on input of CC "RFUND" , see IRM 2.4.20,Command Codes RFUND and REFAP.

21.4.4.4.2  (10-01-2009)
Preparation of the Form 3753, Manual Refund Posting Voucher

  1. Form 3753 is designed for non-IDRS input. This form must be used when refunds are $10 million or more. It must also be used if a direct deposit is necessary. (Only TAS can request a direct deposit manual refund for hardship conditions.) This form will also be used for all manual refunds refunded from an account that is not on IDRS.

  2. Form 3753 will be prepared in triplicate. Two copies should be forwarded to the Manual Refund Function along with copies of the supporting documentation. Accounting will reject the Form 3753 if the document contains any alterations such as white out, strike through or correction tape.

  3. The following are line by line instructions for completing Form 3753:

    1. The DLN block is completed by the Accounting Function.

    2. Complete the "From and Return to" box with the initiator's information.

    3. Section I, Block 1, enter TIN of the account from which the refund will be issued.

    4. Block 2, enter the return period in YYYYMM format. Exceptions: MFT 52 is always 000000.

    5. Block 3, enter the Master File Tax code.

    6. Blocks 4 and 5 will be completed by the Manual Refund Unit.

    7. Block 6, enter name and address of taxpayer as shown on Master File.

      Note:

      For decedent accounts, enter the deceased taxpayer's name and address as shown on master file. The information of the person claiming the refund will be entered in block 10.

    8. Block 7, enter the return form number.

    9. Block 8, enter the DLN of the return or the claim for refund.

    10. Block 9b, enter amount of check. (TC 770 plus amount of overpayment)

    11. Block 9d, enter TC 770 with amount of allowable interest.

    12. Block 10, complete this block if the payee is other than the taxpayer or the refund is being issued to a different address. Difference must be explained in Section 2.

      Note:

      For decedent accounts, do not address the first name line on the check to a deceased taxpayer. Use the name and title, if appropriate, of the person claiming the refund as the payee for refunds issued on decedent accounts. For example, Jim Jones, Executor. The deceased taxpayer's name should be entered as the second name line. The "Dec'd" in the second name line should be entered after the given name of the deceased taxpayer on a joint account or after the surname of the taxpayer on an individual account. For example, John "Dec'd" and Jane Doe or John Doe "Dec'd."

    13. Block 11a and 11b, used only when completing Form 3753 for Credit Card Chargeback, by the Manual Refund Unit or by other IRS Offices/Agencies that require funds to be withdrawn from specific Treasury Accounts.

    14. Block 12, enter amount of overpayment. The amount being refunded, less allowable interest.

    15. Block 13, enter the ULC (formerly the district Office code). See Document 6209, Section 8.23, for listing of ULC's.

    16. Block 14, enter line number, see Exhibit 12 in IRM 2.4.20,Command Codes RFUND and REFAP .

    17. Section II, Check all applicable boxes. Enter IRM reference in Block 1, c. Enter By Pass Indicator.

    18. Section III, enter interest computation and include calculator tape or attach IDRS interest computation screen. See IRM 21.4.4.4(5). for requirements on interest computations on manual refunds of $1 million or more. Refer to IRM 20.2, Interest, for methods of computing interest.

      Note:

      If any portion of the overpayment in Block 12 is attributable to a Telephone Excise Tax Refund (TETR), see IRM 21.6.3.5.13, TETR Interest - General Information, for information on TETR interest computations.

    19. Section IV, enter additional information (e.g. cross reference TINs).

    20. Section V, Blocks 1 and 2, the Approving Official must sign and print their name and title. The Approving Official must be on the authorized list maintained by the Manual Refund Unit in the Accounting Function.

      Note:

      Form 3753 must be reviewed to verify that the manual refund is appropriate, proper IDRS research was completed, and that the form was completed accurately. The Approving Official's signature certifies to the Accounting Function that the form was reviewed and is correct.

    21. Section V, Blocks 3, 4 and 5, enter name, IDRS number, badge number, date, and phone number of the originator of the request.

  4. If the account is on IDRS, update the account with a history item, "H,3753Prep" . IDRS will generate a date when the history item is input.

  5. Accounting will input a control base showing "TC840INPUT " when the document is processed.

  6. Both the history item and the control base are imperative to allow monitoring of the manual refund, as the TC 840 may not appear on the account for approximately 6 weeks. Initiators of manual refunds are required to maintain an open IDRS control base until the TC 840 posts. See IRM 21.4.4.5.1, Monitoring Manual Refunds, for controlling and monitoring requirements.

  7. Within limitations, manual refunds requested via Form 3753 are now able to systemically offset to TOP debt. Only the bypass indicators 0 or 3 should be used with the Form 3753. When a Form 3753 manual refund is eligible for offset, notate "Allow Top Offset" on the form and use bypass indicator 0. When the Form 3753 manual refund is not eligible for offset, notate " Do not Allow TOP Offset" on the form and use bypass indicator 3. Hardships, Joint Committee Cases, Direct Deposits, OBR's and Tentative Carrybacks, etc. are all examples of manual refunds issued on Form 3753, in which the offset opportunity could be lost.

    Exception:

    The bypass indicators 0 and 3 are the only bypass indicators that can be used with Form 3753. As a result, employees must continue to contact FMS to verify TOP debt on any manual refunds requested on Form 3753 if the refund is for a hardship refund, an Offset Bypass Refund (OBR), any Business Master File (BMF) tax return or a refund to an Injured or Innocent Spouse.

  8. When necessary, contact FMS at 1-800-304-3107, option 3, to identify FMS debts before the manual refund is issued. In the Remarks Section of Form 3753 notate the FMS contact name, the date of contact and amount of debt. See IRM 21.4.6.4.2.2, IMF TOP Offset, and IRM 21.4.6.4.2.3 , BMF & Civil Penalty TOP Offsets, to verify the IMF and BMF MFT's subject to TOP offset.

    Note:

    FMS does not make a distinction between a Social Security Number and an Employer Identification Number. It will be necessary for employees to provide FMS both the nine digit Taxpayer Identification Number and the taxpayer's last name to ensure the debt information is accurate.

21.4.4.5  (10-01-2009)
Other Manual Refund Requirements

  1. When issuing a manual refund to a person or address other than that of the taxpayer as shown on Master File, input a TC 971 with Action Code 037. Enter the social security number (SSN) of the person receiving the refund unless the refund is being issued to an Executor or court appointed Administrator of a decedent. The Executor or Administrator must have provided a copy of their court appointment. Use the CC RFUND input date as the Transaction Date. When the SSN of a third party is needed, the third party can only be solicited for this information through written correspondence because privacy rights must be given with the solicitation. Since Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, includes the required Privacy Rights provisions, it can be used to request the SSN of a third party.

  2. In addition to explaining why a different entity is necessary on Forms 5792 / 3753, indicate where the supporting documentation can be found (e.g. injured spouse, now separated, attached to nnn-nn-nnnn, 200812, TC 290).

  3. If the manual refund is to be issued to a Power of Attorney (POA), be sure the Form 2848 provides for this action. Indicate the POA information and the location of the supporting documentation in the Remarks area of the Form 5792 or Form 3753.

  4. Forward the completed Form 5792 with all supporting documents to the Accounting Function the same day the RFUND command is input. It must be in the Accounting Function no later than the beginning of business the following day. For sites that do not have an Accounting function, fax the Form 5792 or Form 3753 to the appropriate site and then overnight the original. Sites that are scanning their manual refunds do not need to mail them.

  5. If an offset credit is being refunded, the offset must be reversed back to the original module, and a TC 570 input with the reversal to prevent re-offset or refund. If credit interest was allowed on the offset, the credit interest must also be reversed with TC 772.

  6. Follow the research checklist on Form 5792 or Form 3753 and ensure all necessary documentation is attached to the request you forward to the Accounting Function.

  7. The request will be forwarded to the Submission Processing Accounting Function servicing your operation. When TAS determines economic hardship exists and a paper check refund must be issued within 3-5 days, see IRM 3.17.79, Accounting Refund Transactions.

21.4.4.5.1  (07-06-2009)
Monitoring Manual Refunds

  1. After you have closed your case on IDRS and the Correspondence Imaging System (CIS), and issued the manual refund (Command Code (CC) RFUND input or Form 3753 has been prepared), the following actions must be taken:

    • Establish a new control on IDRS using the team number and five unique numbers not being used by the team.

      Example:

      0345200000

      Use "M" status, activity code "WT840" , category code "MISC" , and the current date as the received date.

      Note:

      Controlling to a centralized number will generate a single " Manual Refund" inventory listing used for monitoring and documentation.

    • Monitor the account each week (Monday - Wednesday) until the transaction code (TC) 840 posts.

      Note:

      It is managements responsibility to ensure accounts are monitored each week, however, the actual monitoring can be delegated.

    • Document the monitoring actions on the Manual Refund listing. Each line of the listing must be documented. To simplify the documenting process, it is acceptable to notate the first pending TC 840 account as " TC 840 pending" and the draw a vertical line down to the last account with a pending TC 840 (ditto marks may also be used). If a Form 3753 was prepared, notate "Form 3753" . This action must be taken on each page of the listing.

  2. Use management discretion for treatment of the third copies of the Form 5792 and Form 3753 (i.e. incorporate into the local manual refund review process or treat as classified waste). However, use of the Manual Refund listing is mandatory for documenting the monitoring process.

  3. If a TC 846 appears after initiating the manual refund:

    • Contact the manual refund function at the servicing campus to stop the manual refund, if possible, or;

    • Input CC NOREF to stop the refund (TC 846). Refer to IRM 21.4.1.4.10, Refund Intercept CC NOREF, and IRM 21.4.1.4.11, IRS Holds Automated Listing (HAL), or;

    • If unable to input CC NOREF, call Notice Review in the servicing campus to stop the generated refund;

    • If unable to stop either refund, contact the taxpayer to recover the duplicate refund. See IRM 21.4.5, Erroneous Refunds, for erroneous refund procedures.

  4. When the TC 840 posts to the module, the following actions must be taken:

    • Close the control base.

    • Notate on the Manual Refund listing "TC 840 posted" .

    • Notate if an erroneous refund was issued. If no erroneous refund was issued, notate "No E/R" . If an erroneous refund was issued, notate "E/R" and corrective actions taken to resolve the erroneous refund. An attachment can be used to document corrective actions.

      Note:

      Notating the inventory report with "TC 840 posted" , " No E/R" and "E/R" eliminates the need to attach an IDRS print.

      Note:

      When a TC 840 posts, two notations are required on that line of the inventory report; one stating "TC 840 posted " and one indicating if an erroneous refund was issued. You can simplify the documenting process in the same manner as (1).

    • Initial and date each page of the listing.

  5. Managerial review of the manual refund monitoring and documentation is required. The manager must:

    • Randomly review the documentation on the Manual Refund listing by accessing IDRS to verify the notations are correct.

    • Complete a random review at least once a month.

    • Initial and date his / her review on the Manual Refund listing.

    • Hold each listing for a period of three months.

    • Destroy the Manual Refund listing as classified waste after the retention period.

21.4.4.6  (10-01-2003)
Other Manual Refund Programs

  1. The following sections provide information on programs which may not be readily available in other IRM chapters. Programs discussed here are Duplicate Refund Transcripts, Credit Card Chargebacks, and Photocopy Fee Refunds.

21.4.4.6.1  (10-01-2008)
Duplicate Refund Transcripts

  1. Duplicate Refund Transcripts generate weekly prior to the refund 23C date. This was designed to detect potential duplicate / erroneous refunds by generating a transcript when a TC 840 or TC 846 posts to an account and there is a previous TC 840 or TC 846 within $100. The "DUPREF " transcripts require 100% review.

  2. If a duplicate refund is discovered, the reviewer will photocopy the appropriate part of the transcript and reassign the control base to the originator of the duplicate refund.

  3. The originator of the duplicate refund will take all actions necessary to resolve the case. If the case resulted in an erroneous refund, refer to IRM 21.4.5,Erroneous Refunds, for procedures.

21.4.4.6.2  (10-01-2007)
Photocopy Fee Refunds

  1. When a photocopy fee refund is returned to the Regional Finance Center (RFC) by the postal service as undeliverable, the RFC returns a cancellation credit for the check to the appropriate campus on Form SF 1098. A copy of the Form SF 1098, is sent to the Return and Income Verification Services (RAIVS) Unit. See IRM 3.5.20.12.10.3,Undelivered or Returned Checks, for further information.

  2. If a taxpayer returns a photocopy refund check, process as follows:

    1. Send the taxpayer a "C" letter acknowledging receipt of the check.

    2. If the check is less than one year old, send to the RFC for cancellation, annotate on the transmittal Form 3210 to redeposit to "20X0903 Account."

    3. If the check is one year old or more, stamp the check "non negotiable" and leave it in the case file.

    4. Forward case file to the RAIVS Unit.

    5. When the credit is returned on Form SF 1098, a copy of the listing will be forwarded to the RAIVS unit for processing.

  3. If the taxpayer claims non-receipt of a photocopy refund, see IRM 3.5.20.12.10.3,Undelivered or Returned Checks.

21.4.4.6.3  (03-06-2009)
Credit Card Chargebacks

  1. Credit card payments are accepted through private industry credit card processors (also known as service providers). The credit card processor provides IRS the necessary payment information to update the taxpayer's Master File account. Accepted credit card payment processors are:

    • Official Payments Corporation

    • Link 2 Gov Corporation

    • FileYourTaxes.com

    • BullseyeTax.com

  2. If the payment is in error or the taxpayer did not authorize the payment, the payment processor can request a refund. ALL claims for credit card chargebacks are worked ONLY in the Ogden Accounts Management Campus, Taxpayer Relations Department.

  3. Treasury Regulation 301.6311-2(d)(2), makes returns of funds, or chargebacks, available for errors such as the following:

    • An incorrect amount posted to the taxpayer's account as a result of a computational error, numerical transposition, or similar mistake

    • An amount posted to the wrong taxpayer's account

    • A transaction posted to the taxpayer's account without the taxpayer's authorization

    • Similar types of errors that would be subject to the error resolution procedures of the Truth in Lending Act, the Electronic Fund Transfer Act, or similar provisions of state or local law, in ordinary commercial transactions.

  4. Chargebacks can only be provided where the cardholder has established an erroneous or unauthorized charge, and not merely because the taxpayer has made an overpayment and is entitled to a refund. An overpaid account as a result of a credit card payment should refund to the taxpayer from the account as usual.

  5. Credit card chargebacks are only authorized for the entire amount of the payment. Partial credit card chargebacks are not permitted.

21.4.4.6.3.1  (03-06-2009)
How is a Chargeback Initiated?

  1. If the taxpayer contacts the IRS to initiate a request for a credit card chargeback, refer the taxpayer to the credit card issuer's customer service number on the back of the card or on the billing statement. Taxpayers can also visit the Electronic Payment Option page, http://www.irs.gov/efile/article/0,,id=97400,00.html , on IRS.gov for service provider information. Taxpayers should contact these companies to report problems such as unauthorized charges or concerns regarding payment errors not related to the tax liability. Generally, credit card payments cannot be cancelled. See IRM 21.2.1.50.2, Payment by Credit Card or Debit Card (General) , for additional information regarding credit card payments.

  2. The credit card company must submit the claim within 150 days from date of payment. The request must contain the signature of one or more company authorized employees. If the payment is over 150 days old, the Lead Examiner must contact Headquarters for approval.

  3. The following procedures outlined in this section and ( See IRM 21.4.4.6.3.2.) are used exclusively by employees in the Ogden Accounts Management Campus, Taxpayer Relations Department, when working credit card chargeback claims submitted by credit card companies.

  4. For Official Payments Corporation the following signatures are acceptable:

    1. Liz Gregg, Primary Point of Contact, (334) 321–7362

    2. Dianne Hood, (334) 321–4582

    3. Marian Browne, (334) 321–7350

    4. Steve Johnson, (925) 855−5040

  5. Chargeback cases for Link2Gov must be authorized by one of the following company employees:

    1. Stephanie Greer, Primary Point of Contact, (615) 297−2770, Ext 250

    2. Helen Justice, Senior Point of Contact, (615) 297−2770 Ext 282

  6. For FileYourTaxes.com the following signatures are acceptable:

    1. Timur Taluy, (805) 644−9398

    2. Atilla Taluy, (805) 644−9398

  7. For BullseyeTax.com, the following signature is acceptable:

    1. Jeff Gardner, (615) 730–6367, Ext 226

  8. The company must submit the following required documentation with the form (See Exhibit 21.4.4-1, Chargeback Request Form):

    • Copy of the dispute letter from the credit card holder or letter from credit card issuer describing the problem

    • Date the company received the dispute letter

    • Date sent to Internal Revenue Service

    • Card holder's name and address

    • Credit card number

    • Date of payment

    • Amount of payment

    • Credit card payment confirmation number

    • Social Security Number (SSN) or Employer Identification Number (EIN) of the account

    • History of company action taken to prove the taxpayer's dispute

    • Optional Form 8302,Direct Deposit of Tax Refund of $1 Million or More, for a refund of $10 million or more

  9. IRS employees may provide only the minimum return information necessary in order to resolve credit card payment errors. IRC 6103 (k)(9) provides that the Service may disclose return and return information to financial institutions and others to the extent the Service deems necessary for the administration of Section 6311. This exception to the general confidentiality accorded to returns and return information does not require a Power of Attorney or other written consent of the taxpayer. Example: The Service may disclose whether or not our records show the posting of a credit card payment to a tax account, if that information was the minimum necessary to resolve the issue.

21.4.4.6.3.2  (10-01-2008)
How is a Chargeback Request Processed?

  1. The basic research requirements within IRM 21.4.4.3, do not apply to chargeback cases. Once the company provides all the necessary verification, research the identified account for the erroneous payment. To identify a credit card payment on the account the common transaction codes are:

    • TC 640, Advanced payment of determined deficiency, Form 1040

    • TC 660, 1040 Estimated Tax payment

    • TC 670, Subsequent payment Form 1040, Trust Fund Recovery Penalty (MFT 55), Form 940, Form 941, and Form 944.

    • TC 670 or TC 640, Payment with Extension to File, Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return

  2. Electronic payments will contain an EFT-Trace number. If the fourth position of the EFT-Trace number is a "6" the payment was a credit card payment.

  3. Control the case when received. Use a unique case control numbering system. Associate the control number with source documentation (e.g. Forms 3753, 2424, 3210, etc.). For the processing time frames of these cases, follow the guidelines in IRM 21.5.1, General Adjustments, and IRM 21.5.2, Adjustment Guidelines. The case will age in 45 days.

  4. Honor the request for the chargeback even if the payment is no longer available on the taxpayer's account.

  5. If the unauthorized payment is still on the taxpayer's account take the following actions:

    1. If payment will refund or offset, input a TC 570 on the account where the erroneous payment resides until the case can be resolved

    2. Prepare Form 2424, Account Adjustment Voucher, to correct the account

    3. Debit the taxpayer's account with the corresponding TC of the payment

    4. Credit Account 6910 with the TC of the payment

    5. Use date of the payment as the transaction date for both the debit and credit

    6. Notate "chargeback for credit card payment" in the comments area

  6. If the taxpayer received a refund due to the unauthorized credit card overpayment on the account, follow the erroneous refund procedures. If the refund is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , refer the case to the Refund Crime Unit using normal referral procedures.

  7. If the money is offset to another account, complete the credit transfer back to the original account module, and adjust the account as outlined above.

  8. To refund the payment to the card processor, complete Form 3753 as follows:

    1. Section l, Block 1, enter the company TIN

    2. Block 6, enter complete name and address of company

    3. Block 10, enter "same as Block 6" and include Routing Transit Number and DAN

    4. Block 11a. enter 20X1807 as the symbol and 11b, enter the chargeback amount

    5. Block13, enter the Universal Location Code (formerly the district Office code). See Document 6209, Section 8.23, for a listing of ULC's.

    6. Section ll, Block 1, check "other " and notate "Chargeback, IRM 21.4.4 "

    7. Block 2, check "other" and notate "credit card chargeback"

    8. Block 3, check "not allowable"

    9. Check all blocks as appropriate

    10. Section lII, block out entire section. It is not applicable

    11. Section IV, enter ACH deposit and credit card company account number

    12. Section V, complete all blocks

  9. Prepare Form 3210, Document Transmittal, as follows:

    1. In the remarks block enter Company name and TIN and note " chargeback of credit card payment"

    2. In the quantity block enter the document count

    3. In the "code" or "type" block enter 3753 in the first block only

    4. Enter each case separately using company TIN and money amounts for each individual case

    5. Total amount for the Form 3210 and enter the amount in the Remarks box at the top of the document

    6. Enter complete information in the from box

    7. Releasing Official must sign the Form 3210

  10. Route or hand carry the chargeback case to the Manual Refund Function. Ensure the case is complete and all requirements are fulfilled.

  11. If any of the required documentation is missing in the request from the card processor, call or write the credit card company requesting the missing information. (See IRM 21.4.4.6.3.1,How is a Chargeback Initiated?)

    1. Request the information be supplied within 10 days

    2. Allow 15 days for response. If no response within the 15 days, follow-up with a second request to the company

    3. Allow another 15 days for response to second request

    4. If no response to the second request, do not honor the chargeback request

    5. Advise company of the Service's denial and the reason(s) for the denial

    6. Do not issue a Claim Disallowance Letter

    7. Secure managerial approval and close the case

Exhibit 21.4.4-1  (10-01-2003)
CHARGEBACK REQUEST FORM

CHARGEBACK FOR UNAUTHORIZED OR ERRONEOUS CREDIT CARD PAYMENT
Copy of the dispute letter attached: ____Yes ____No
(Dispute letter is required and must contain the name and address/credit card number of the cardholder)
Date of the dispute letter:
Date received by Credit Card Company:
Date sent to Internal Revenue Service:
PAYMENT INFORMATION
Date of the payment:
Amount of the payment:
Credit Card Number used in the transaction:
Credit Card Confirmation Number:
Social Security Number:
(payment was applied )
History/Research taken to substantiate the claim:

Under penalties of perjury, I declare that I have examined this form and accompanying statements, and to the best of my knowledge and belief, they are true, correct, and accurately represent the amount of Chargeback, caused by either erroneous or unauthorized use of the credit card listed on this form and applied to the identified taxpayer's account.
SIGNATURE OF COMPANY OFFICIAL:DATE:____________
Title:
ELECTRONIC FUNDS TRANSFER (EFT) REPAYMENT REQUEST
EFT Requested: ____Yes ____No
If yes is checked, the bank account information must be completed:
Routing and Transit Number:
Bank Account Number:
Check Attachments:
Dispute letter (Required)
Form 8302, Direct Deposit of Tax Refund of $1 Million or More
(Optional only required when a 10 million or less and $1 million interest due repayment is being requested.)
Other, Please identify

Exhibit 21.4.4-2  (10-01-2008)
MANUAL REFUND CHECKLIST

IDRS Research
__ INOLES Verify Payee Name, Address, Debt Indicators, XREF TINS. Attach copy. __ ENMOD TC 130 Indicator. Attach copy.
__ CFINK Current and Valid POA. Attach copy. Is TC 971 Action Code 037 needed. __ SUMRY / TXMOD / IMFOLI OBLS, PN TC 840 / TC 846, Any pending TC that will release Hold / Freeze. Attach copy.
__ RSED Open/Expired __ FFINQ Return pending
__ Open IDRS control base. Addressed other open IDRS control bases __ OBLS ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Attach copy.
__ IMFOBT Current Direct Deposit data __ TC 570 or Hold Codes Needed
__ 0 Coded Return. Attach copy. __ Research IMF, BMF, NMF
__ OBR or Hardship Verification. Attach copy TC 971 Action Code 036 __ Compa Verify Credit Interest Computation. Attach copy.
__ Contact FMS for TOP Debt for Form 3753 __ INOLES TOP Debt Form 5792
__ >$1 million Technical Unit Review of Credit Interest __ CC RFUND input (Form 5792 only)
__ TC 291, 295 or 299 input with hold code 1, 2 or 4. Attach copy __ TC 766 Input Applicable
Form 5792 or 3753 Requirements
 
__ Other Functional Approval Needed __ Blocking Series  
__ Line Number __ Authorized Signature  
__ Explanation of Alternate Payee Name __ Bypass Indicator Needed  
__ Math verification Monitoring Date:  
Monitoring Date: Monitoring Date:  

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