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Part 21. Customer Account Services

Chapter 6. Individual Tax Returns

Section 3. Credits (Cont. 3)

21.6.3  Credits (Cont. 3)

21.6.3.6  (10-01-2009)
Economic Stimulus Payment (ESP)

  1. The information in this section will assist in answering taxpayers' questions regarding the Economic Stimulus Payment. Use the information located under Economic Stimulus/Rebate TOC on Servicewide Electronic Research Program (SERP) under IRM Supplements, in conjunction with the IRM instructions when answering taxpayers' questions related to the stimulus payment.

  2. The Economic Stimulus Act of 2008, approved by Congress and signed by President Bush, directed the Treasury to send checks to eligible taxpayers giving them an advance payment of the 2008 Recovery Rebate Credit.

  3. The IRS processed the Economic Stimulus Payments after taxpayers filed his/her returns for Tax Year 2007.

  4. Notice 1377, Economic Stimulus Payment Notice, was mailed in March 2008 to all taxpayers who filed a 2006 Federal income tax return. Notice 1377 was an information only notice that did not require a taxpayer response.

  5. A week before the payment was issued a Notice 1378 was mailed to eligible taxpayers, providing the expected payment amount, the date, and other information.

21.6.3.6.1  (10-01-2011)
General Research

  1. Except as specified in the following instructions, normal procedures should be followed to resolve most account problems or discrepancies. You may need to reference other IRM sections, such as:

    • IRM 21.1.3.20, Oral Statement Authority

    • IRM 21.4.1, Refund Research

    • IRM 21.4.2, Refund Trace and Limited Payability

    • IRM 21.5.5, Unpostables

    • IRM 5.19, Liability Collection

    • IRM 20.2.7, Abatement and Suspension of Interest

    • IRM 20.1, Penalty Handbook

    • IRM 25.6, Statute of Limitations

21.6.3.6.2  (10-01-2011)
Qualifications

  1. Taxpayers with the following qualifications were eligible for the Economic Stimulus Payment (ESP):

    • A Tax Year (TY) 2007 Federal income tax return must have been filed by October 15, 2008. Fiscal year returns 200801 through 200811 were considered for the ESP.

      Note:

      The law states that Treasury make or allow Economic Stimulus Payments after December 31, 2008. Taxpayers who did not file his/her 2007 Federal income tax returns in time for a Economic Stimulus Payment can claim the Recovery Rebate Credit, to the extent he/she qualified for it, on his/her 2008 tax return.

    • A valid social security number (including spouse, if married filing joint). No ITIN, ATIN, IRSN, or invalid SSN.

      Note:

      In certain situations, the IRS can reissue an ESP after December 31, 2008, if it was properly made or allowed before December 31, 2008. See IRM 21.6.3.6.6.8, Claims , for replacement check procedures.

      Exception:

      See IRM 21.6.3.6.2.2, The Heroes Earnings Assistance and Relief Tax Act of 2008, TAssistance and Relief tax Act of 2008, which modified the rules relating to valid identification numbers.

    • All qualifying children must have had a valid social security number.

      Exception:

      See IRM 21.6.3.6.2.2 , The Heroes Earnings Assistance and Relief tax Act of 2008, which modified the rules relating to valid identification numbers.

    • A net income tax liability greater than zero OR qualifying income of $3000 or more.

      Note:

      Net income tax liability = tax before credits + alternative minimum tax - nonrefundable credits except child tax credit.

      Note:

      Qualifying income = earned income, including nontaxable combat pay, Social Security Benefits, certain Tier 1 Railroad Retirement Benefits, and certain Veteran's Benefits.

    • Did NOT indicate he/she could be claimed as a dependent on someone else’s return.

    • Form 1040NR, Form 1040PR, or Form 1040SS filers were not eligible.

    Note:

    Changes made during the processing of a return were considered, even if the change was subsequently reversed. For example: If Error Resolution System (ERS) changed a return which increased/decreased the tax, the ESP was similarly increased/decreased. The ESP was NOT adjusted if the initial change was subsequently reversed. The ESP was based on the originally posted figures.

    Note:

    In general, amended returns or subsequent adjustments for 2007 do not affect the amount of the payment, as the ESP was based on the original 2007 tax return.

21.6.3.6.2.1  (02-12-2010)
Social Security Recipients, Veterans, and Other Beneficiaries

  1. Individuals who did not have to file a 2007 tax return for tax purposes, were required to file a return in order to receive the Economic Stimulus Payment (ESP). In order to qualify, these individuals must have received qualifying income of $3000 or more in Tax Year (TY) 2007.

  2. During processing, these returns were coded with a Special Processing Code "P" to identify them as a claim for the Economic Stimulus Payment (ESP).

  3. The returns receiving this "P" code were filed on a Form 1040 or Form 1040A and typically had "Stimulus Payment" , "Stimulus Plan" , "ESP" , "Payment" , "Rebate" or some similar statement across the top of the form. However, this statement may not have been included on all of these returns.

  4. Additionally, these "P" coded returns should have only showed income on the following lines:

    • Form 1040 – lines 7, 20a, 22, 37, 38, 40-42, 66b, and could have also included direct deposit information

    • Form 1040A – lines 7, 14a, 15, 21, 22-26, 40b, and could have also included direct deposit information

    Exception:

    If the return had income as indicated above, but also listed an amount on line 8a, it was considered a" P" coded return.

    Exception:

    E-file returns entered $1 on line 37 of the Form 1040 or line 21 of the Form 1040A.

  5. When a duplicate filing condition existed and one or both returns involved had been "P" coded, a CP 36P was generated. See IRM 21.6.3.6.7.8, TY 2007 CP 36P.

  6. The first returns received meeting this criterion were not properly coded. If any returns (TC 150 or TC 976 document) meeting the conditions above are identified when working CP 36 (DUPF) cases, reassign the case through CIS immediately to IDRS number 0843123251.

  7. These individuals who had already filed his/her 2007 tax return but did not expect to receive an economic stimulus payment (for example, his/her earned income was less than $3,000 and he/she had no tax liability), were advised to file an amended return, Form 1040X, to report the qualifying income that was not reported on his/her original return. See IRM 21.6.3.6.7.1, Forms 1040X filed by Social Security, Veterans, and Other Beneficiaries.

    Note:

    The last day to adjust an account to allow the ESP was December 9, 2008, except in the case of a decedent's account, where the last day to allow the ESP was December 18, 2008. .

21.6.3.6.2.1.1  (10-01-2011)
Social Security Recipients, Veterans, and Other Beneficiaries Issues

  1. In general, the last day to adjust an account to allow the ESP was December 9, 2008. See IRM 21.6.3.6.6.10 Decedent Account Issues, for an exception involving deceased taxpayers.

  2. Some individuals filed a return only to receive the Economic Stimulus payment reporting qualifying income of $3000 or more but did not indicate he/she could claim his/her own exemption. If the individual contacts the Service and indicates they were eligible to claim his/her own exemption, take the following action:

    • Figure the ESP

    • Adjust the account to allow the ESP, input CRN 256 for $300 ($600 for MFJ) and include Item Reference Number (IRN) 887 for the exemption(s).

    • Input RC 096 and RC 006, SC 2, HC 0

      Note:

      RC 096, when used, must always be in the 1st reason code position.

  3. Individuals who did not have to file a 2007 tax return for tax purposes may correspond or return Notice 1377, Economic Stimulus Payment Notice, indicating they qualify for the stimulus payment. The response must include the following:

    • Individual's Name and Address

    • Amount of qualifying income

      Exception:

      If the amount of income or type of income is not listed then use CC IRPTR to see if taxpayer received qualifying income of $3000 or more in Tax Year (TY) 2006. If so, then notate that amount on the correspondence and continue.

    • Individual's signature

  4. If the response is complete then use the information to complete a dummy Form 1040A. Notate "Stimulus Payment " , across the top of the Form 1040A and notate in the signature section "See Attachment for Signature" . Notate on the correspondence or notice "Attachment to Form 1040A - Do Not Detach" .

  5. If the response is incomplete and the individual was 65 or older in Tax Year (TY) 2007 then:

    • Complete a dummy Form 1040A with all the information provided.

    • Notate "Stimulus Payment" across the top of the Form 1040A.

    • Send the Form 1040A to the individual with a letter requesting he/she resubmit the Form 1040A with the missing information (including signature).

  6. If the individual filed only to receive the ESP and now contacts the Service because he/she received a balance due notice, see paragraph (8) of IRM 21.6.3.6.5, Stimulus Payment Inquiries .

  7. Take the following action if an individual reported his/her nontaxable combat pay of $3000 or more on Line 4b of Form 8812 , Additional Child Tax Credit and expected to receive an Economic Stimulus Payment (ESP):

    Note:

    These accounts can be identified by a TC 290 .00 with a DLN of NN254-999-05099-8 (NN = filing location code) with a Reason Code 204.

    1. Advise the taxpayer that due to a processing problem the amount reported on Line 4b of Form 8812 was not considered earned income when the ESP was figured systemically.

      Note:

      The programming was updated in cycle 200835.

      Note:

      The Service performed a systemic recovery in October of 2008 to correct accounts where the nontaxable combat pay was reported on Line 4b of Form 8812. The systemic recovery included RC 216 in the first RC position.

    2. Advise the taxpayer, included in the systemic recovery, he/she should have received the ESP by the first week of December 2008.

    Note:

    If he/she reported less than $3000 of qualifying income then explain the qualifying income requirement and advise the taxpayer, if eligible, he/she can claim the Recovery Rebate Credit on his/her TY 2008 Federal tax return.

  8. A processing problem was identified when military personnel filed his/her TY 2007 Federal tax return electronically (ELF) and his/her nontaxable combat pay exceeded the income limit allowable for the Earned Income Tax Credit.

    Note:

    These accounts can be identified by a TC 290 .00 with a DLN of NN254-999-05099-8 (NN = filing location code) with a Reason Code 204.


    Take the following action if an individual filed electronically, reported nontaxable combat pay, and expected to receive an Economic Stimulus Payment (ESP):

    1. Use CC TRDBV to verify the Form W-2 information reflects a Contribution Code "Q" .

    2. Verify the taxpayer reported qualifying income of $3000 or more (include the amount shown on the Form W-2 with the Contribution Code "Q" ) .

    3. Determine, if any, the number of qualifying children with a valid SSN that were born 1991 or later claimed on the original return. Multiply the number of qualifying children by $300 to arrive at the allowable CRN 257 amount.

    4. Input TC 290 for zero, CRN 256 for $300 ($600 if MFJ), CRN 257 (if applicable), RC 096, SC 2, and applicable HC.

21.6.3.6.2.2  (10-01-2010)
The Heroes Earnings Assistance and Relief Tax Act of 2008

  1. In order to be eligible for the ESP, taxpayers and their qualifying children had to have a valid Social Security Number (SSN). The President signed H.R. 6081, "The Heroes Earnings Assistance and Relief tax Act of 2008" , which modified the rules relating to valid identification numbers to qualify for the Economic Stimulus Payment (ESP), for members of the Armed Forces for the United States.

  2. The provision provides that the valid SSN requirement for both spouses and children does not apply in the case of a joint return where at least one spouse is a member of the Armed Forces of the United States at any time during the taxable year.

  3. A recovery was performed in October 2008 to systemically correct accounts where the ESP was previously denied because the spouse and/or children did not have a valid SSN. The affected taxpayers should have received his/her ESP by the first week of December.

  4. The systemic recovery adjustment included RC 215. If during original processing a stimulus payment was not figured, the taxpayer received a Notice 1378. All others received an adjustment notice (CP 21/22) based on the RC 215. RC 215 reads "The Heroes Earnings Assistance and Relief Tax Act of 2008 qualifies you for an Economic Stimulus payment, or an additional Economic Stimulus payment. We apologize for any inconvenience."

  5. If the taxpayer omitted a spouse and/or children on the original return because he/she (spouse/child) did not have a valid Social Security Number, the taxpayer cannot file an amended return for the ESP based on this issue. The ESP was based on the original 2007 return and amended returns were not taken into account when determining eligibility for ESP. Instead, if eligible, the taxpayer will need to claim the Recovery Rebate credit on the 2008 federal tax return.

21.6.3.6.3  (05-14-2008)
Economic Stimulus Payment (ESP) Computation

  1. The actual Economic Stimulus Payment (ESP) amount depended on the information on the taxpayer’s 2007 Federal return. Eligible individuals received between $300 and $600. Those who were eligible and filed a joint return received a total of between $600 and $1,200. Those taxpayers with children got an additional $300 for each qualifying child. See Exhibit 21.6.3-2, Eligibility for Economic Stimulus Payment and Exhibit 21.6.3-3, Eligibility For Additional Stimulus Payment for Qualifying Children.

    An Exception to the information above was taxpayers with a net tax liability greater than zero but less than $300 ($600 if filing jointly) with qualifying income less than $3000 and gross income less than:

    • $8,750 (if single or MFS)

    • $17,500 (if MFJ)

    • $11,250 (if HOH)

    • $14,100 (if qualifying widow(er))

    In these cases, the taxpayer’s ESP equaled the amount of his/her net income tax liability. These taxpayers did not qualify for the additional stimulus payment for children even if he/she reported qualifying children on his/her return.

  2. There were three components of the Economic Stimulus Payment.

    • Part One

    • Part Two

    • Part Three

  3. Part One applied to taxpayers who:

    • Had a net tax liability greater than zero

    Taxpayers received the lesser of $600 ($1200, if filing jointly) or his/her net income tax liability.

    Note:

    Net income tax liability was defined as Form 1040 Line 57 plus Line 52 or Form 1040A Line 35 plus Line 32 or Form 1040EZ Line 10.


    Example:

    Single taxpayer’s net tax liability shown on his/her 2007 tax return was $875. Part One of the ESP equaled $600.

    Example:

    Joint taxpayers’ net tax liability shown on his/her 2007 tax return was $500. Part One of the ESP equaled $500.

    A TC 766 with a Credit Reference Number (CRN) 338 indicated the ESP amount attributable to Part One.

  4. Part Two applied to taxpayers who:

    • Received less than $300 ($600 if filing jointly) from Part One and reported qualifying income of $3000 or more
      OR

    • Received less than $300 ($600 if filing jointly) from Part One and reported qualifying income less than $3000 but had gross income exceeding:
      $8,750 (if single or MFS)
      $17,500 (if MFJ)
      $11,250 (if HOH)
      $14,100 (if qualifying widow(er))

    Example:

    Single taxpayer’s net tax liability shown on his/her 2007 tax return was $400. Part One equaled $400. Since s/he received at least $300 from Part One, then Part Two equaled $0.

    Example:

    Joint taxpayers’ net tax liability shown on his/her 2007 tax return was $500 and his/her qualifying income was at least $3000. Part One equaled $500. Part Two equaled $100.

    Example:

    Joint taxpayers’ net tax liability shown on his/her 2007 tax return was $500 and his/her qualifying income was less than $3000. His/her gross income exceeded $17,500. Part One equaled $500. Part Two equaled $100.

    Example:

    Joint taxpayers' net tax liability shown on his/her 2007 tax return was $0 and his/her qualifying income was at least $3000. Part One equaled $0. Part Two equaled $600.

    A TC 766 with a Credit Reference Number (CRN) 256 indicated the ESP amount attributable to Part Two.

  5. Part Three applied to taxpayers who:

    • Reported a qualifying child(ren) on his/her 2007 tax return
      AND

    • Reported qualifying income of at least $3000
      OR

    • Reported qualifying income less than $3000 but had a net tax liability greater than zero AND had gross income exceeding:
      $8,750 (if single or MFS)
      $17,500 (if MFJ)
      $11,250 (if HOH)
      $14,100 (if qualifying widow(er))

    If eligible, the taxpayer received an additional amount of $300 for each qualifying child.

    Example:

    Single taxpayer with a qualifying child had a net tax liability of $875 shown on his/her 2007 tax return and qualifying income of $12,000. Part One equaled $600. Part Two equaled $0. Part Three equaled $300.

    Example:

    Joint taxpayers with three qualifying children had a net tax liability of $500 shown on his/her 2007 tax return. They reported qualifying income less than $3000 and gross income which exceeded $17,500. Part One equaled $500. Part Two equaled $100. Part Three equaled $900.

    Example:

    Joint taxpayers with three qualifying children had a net tax liability of $500 shown on his/her 2007 tax return. They reported qualifying income less than $3000 and his/her gross income did not exceed $17,500. Part One equaled $500. Because his/her qualifying income was less than $3000 and his/her gross income did not exceed $17,500, Part Two equaled zero and they did not qualify for Part Three.

    A TC 766 with a Credit Reference Number (CRN) 257 indicated the ESP amount attributable to Part Three.

  6. The stimulus payment phased out based on the Adjusted Gross Income (AGI). The phase out was 5% of the adjusted gross income above $75,000 for individuals and $150,000 for those filing jointly. The phase out rule eliminated the Credit Reference Number (CRN) 338 first, CRN 256 second, and CRN 257 last.

    Example:

    Joint taxpayers reported an AGI of $160,000. Their ESP before the phase out equaled $1200. $160,000 exceeds $150,000 by $10,000. 5% of $10,000 is $500. $1200 - $500 = $700. After the phase out, their ESP Part One equaled $700.

    Example:

    Joint taxpayers reported an AGI of $190,000 and four qualifying children. their ESP before the phase out equaled $2400 (Part One of $1200 + Part Three of $1200). $190,000 exceeds $150,000 by $40,000. 5% of $40,000 is $2000. $2400 - $2000 = $400. After the phase out, their ESP Part One equaled zero and Part Three equaled $400.

21.6.3.6.4  (10-01-2011)
IDRS Account Information

  1. The Economic Stimulus Payment (ESP) posted to the 2007 tax module as an adjustment transaction TC 290.00 and:

    • TC 766 with credit reference number (CRN) 338 attributable to Part 1 of the ESP

    • TC 766 with CRN 256 attributable to Part 2 of the ESP

    • TC 766 with CRN 257 attributable to Part 3 of the ESP

  2. If the amount attributable to Part 1/2/3 of the ESP equaled zero the applicable CRN will not be shown.

    Example:

    Taxpayer qualified for $500 from Part 1 of the ESP, $0 from Part 2 and $300 from Part 3 of the ESP. The account reflected CRN 338 and CRN 257 only.

  3. The date of the transaction was the posting date.

  4. The last two digits of the primary taxpayer identification number (TIN) determined when the systemic transactions posted.

  5. For the systemically posted TC 290 .00 Credit Reference Number (CRN) 338/256/257, a Document Locator Number (DLN) of NN254-999-05099-8 was used for the 2007 tax year. (NN was the file location code (FLC) portion from the control DLN).

    Note:

    The systemically posted TC 290 .00 CRN 338/256/257 for the ESP did not release a freeze condition, if present, on the module.

  6. Reason Codes (RC) 200 through RC 213 were used on the systemically posted ESP for tax year 2007. See IRM 21.6.3.6.4.1, Economic Stimulus Payment Reason Codes, for additional information. The stimulus programming analyzed the 2007 tax module, systemically posted the payment, and generated a Notice 1378 to the taxpayer. This was not a masterfile notice and was notated in the Notice History Section on CC TXMOD.

  7. Computer Paragraph notice (CP) 21/22 only generated if all or part of the ESP was applied to a balance due on the Tax Year (TY) 2007 account. The following message was displayed on the CP 21/22: "We applied a credit to your 2007 tax account due to new legislation. We used (offset) all or part of your economic stimulus payment to pay your federal tax as the law allows. We will send another notice to you if we make this offset to other amounts you owe."

    • Note:

      Undeliverable CPs 21/22 are destroyed, if a different address is not found.

      Note:

      If any portion or the entire ESP offset to another IRS tax account, a CP 49 was issued from the account to which the overpayment was applied.

  8. Reason Code (RC) 096 or RC 093 was used when manually adjusting the ESP for tax year 2007. See IRM 21.6.3.6.4.1, Economic Stimulus Payment Reason Codes.

  9. The ONLY instances the caseworker allowed the payment manually or adjusted a previously posted payment was for mixed entities/periods, scrambled ssn cases, account back-outs, "O" coded returns, qualifying children not identified properly on 2007 original returns, nontaxable combat pay issue, social security number and name control mismatch issues, individuals who filed only to receive the Economic Stimulus payment but in error did not indicate he/she could claim his/her own exemption, Peace Corps Volunteers and ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  10. If a taxpayer calls or writes because his/her stimulus payment is less than the full amount due to a change during the processing of the return, do not adjust the ESP, even if the error has been corrected. The taxpayer, if eligible, will need to claim the Recovery Rebate credit on his/her 2008 Federal income tax return.

  11. December 9, 2008, was the last date an IDRS transaction could be input to transfer or release the TC 766, Economic Stimulus Payment. See IRM 21.6.3.6.4.2, End of Year Reversals.

    Exception:

    ESP issues involving deceased taxpayers. See IRM 21.6.3.6.6.10, Decedent Account Issues.

21.6.3.6.4.1  (10-01-2011)
Economic Stimulus Payment Reason Codes

  1. Reason Codes (RC) 200 through RC 213 were used on the systemically posted ESP for tax year 2007.

    • The number of children the payment was computed on was generated in the first RC position. i.e. 001, 002, 003, etc.

    • RC 206, 210 - 213 was generated in the second RC position and was associated with the number of children in RC position 1.

    • RC 200 - 209 was generated in the third RC position and was associated with the amount of the ESP attributable to Part 1 and Part 2.

    Example:

    MFJ taxpayers with 4 qualifying children received $1200 from Part 1 and $1200 from Part 3. "004" generated in the 1st RC position, "213" generated in the 2nd RC position, and"209" generated in the 3rd RC position .

    Example:

    Same scenario, but 1 of the 4 dependents had an ATIN. "003" generated in the 1st RC position. "211" generated in the 2nd RC position, and "209" generated in the 3rd RC position.

    Example:

    Same scenario, but spouse had an ITIN. "000" generated in the 1st RC position, "000" generated in the 2nd RC position, and "202" , generated in the 3rd RC position.

  2. RC 214 was generated in the first RC position with the systemic Recovery to correct accounts where the qualifying children were not originally identified properly. RC 214 reads "We changed your account to include the qualifying child portion of the Economic Stimulus Payment. We apologize for any inconvenience" .

  3. RC 215 was generated in the first RC position with the systemic Recovery to correct accounts based on The Heroes Earnings Assistance and Relief Tax Act of 2008. RC 215 reads "The Heroes Earnings Assistance and Relief Tax Act of 2008 qualifies you for an Economic Stimulus payment, or an additional Economic Stimulus payment. We apologize for any inconvenience." See IRM 21.6.3.6.2.2, The Heroes Earnings Assistance and Relief tax Act of 2008.

  4. RC 216 was generated in the first RC position with the systemic Recovery to correct accounts where the nontaxable combat pay was reported on Line 4b of Form 8812. RC 216 reads "The nontaxable combat pay reported on Line 4b of the Form 8812 was not considered when we initially figured your Economic Stimulus payment. We have corrected your account and you will receive an Economic Stimulus payment, or an additional Economic Stimulus payment. We apologize for any inconvenience." See IRM 21.6.3.6.2.1.1, Social Security Recipients, Veterans, and Other Beneficiaries.

  5. RC 217 was generated in the first RC position with the systemic Recovery to correct Married Filing Joint accounts where the spouse'sname/TIN were mismatched and a Return Processing Code (RPC) "E" is present. The affected taxpayers will be issued the vendor Notice 1378. See IRM 21.6.3.6.5.1.3.2, Return Processible Code "E" Accounts.

  6. The reason code table should be used when answering taxpayer questions to determine how the ESP was calculated. These reason codes were provided to the automated systems (Where is My Rebate? on IRS.gov and the automated phone applications) and determined the response provided to the taxpayer.

    Reason Code (RC) Credit Reference Number Language
    200 - no credit N/A You did not qualify for the economic stimulus payment because your adjusted gross income exceeded the maximum allowable amount to receive any credit
    201 - no credit N/A You did not qualify for the economic stimulus payment because you were claimed as a dependent by another taxpayer

    Note:

    The programming does not access the Duplicate TIN Database. The account reflects reason code 201 when the individual fails to check box 6a on Form 1040 or Form 1040A indicating someone else can claim them as a dependent.

    202 - no credit N/A You did not qualify for the economic stimulus payment because the Taxpayer Identification Number shown on your tax return for yourself or your spouse was not valid. Your last name and/or Social Security Number (SSN) did not agree with either our records or those of the Social Security Administration, or you used an IRS issued number such as an Individual Taxpayer Identification Number (ITIN) or IRS Number. You must have a valid SSN to qualify for the stimulus payment.
    203 - no credit N/A You did not qualify for the economic stimulus payment because you filed a Form 1040NR, Form 1040PR, or Form 1040SS. These returns are normally filed by Nonresident Aliens, residents of Puerto Rico and residents of the U.S. Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands (CNMI). Residents of U.S. possessions will be receiving his/her payments directly from the possessions.
    204 - no credit N/A You did not qualify for the economic stimulus payment because qualifying income, such as wages and net earnings from self-employment that is includable in taxable income, Social Security benefits, certain Tier 1 Railroad Retirement benefits and Veterans disability compensation, disability pension, and survivors benefits received from the Department of Veterans Affairs, was not high enough.

    Note:

    See IRM 21.6.3.6.2.1.1 , Social Security Recipients, Veterans, and Other Beneficiaries.

    Note:

    See IRM 21.6.3.6.5.1.4, Peace Corps Volunteers

    205 - no credit N/A We are sorry but we are not able to provide any information regarding the status of your economic stimulus payment. Please call the number below for more information.
    206 - reduced credit

    Note:

    If in third RC position

    		 338 Your economic stimulus payment was reduced because your adjusted gross income exceeded the maximum allowable amount to receive the full credit.
    The maximum amount to receive the full credit for each filing status is:

    • $150,000 for married filing joint

    • $75,000 for all other filing statuses
    207 - reduced credit 338 Your economic stimulus payment was limited to the amount of your net income tax liability.
    208 - minimum credit 256 Your economic stimulus payment was limited to $600 for filing status 2 or $300 for all other filing statuses, based on your 2007 qualifying income or net tax liability.
    209 - maximum credit 338 You qualified for the maximum economic stimulus payment of $1200 for filing status 2 or $600 for all other filing statuses, based on your 2007 qualifying income and net tax liability.
    206 - child credit

    Note:

    If in second RC position

    		 257 The child credit portion of your economic stimulus payment was reduced because your adjusted gross income exceeded the maximum allowable amount to receive the full credit. The maximum amount to receive the full credit for each filing status is:

    • $150,000 for married filing joint

    • $75,000 for all other filing statuses
    210 - child credit 257 You do not qualify for any additional payment for your qualifying children due to your economic stimulus payment being limited to the amount of your net income tax liability because you did not have qualifying income of at least $3,000 or gross income of:

    • $8,750 for filing status 1, 3 or 6

    • $17,500 for filing status 2

    • $11,250 for filing status 4

    • $14,100 for filing status 5
    211 - child credit 257 Your economic stimulus payment was reduced because one or more of the children shown on your 2007 tax return did not have a valid Social Security Number. The Social Security Numbers were not valid because the child’s last name and/or the number did not match either our records or the records of the Social Security Administration. A child with only an Adoption Taxpayer Identification Number or Individual Taxpayer Identification Number does not qualify for the child credit portion of the stimulus payment.
    212 - child credit 257 Your economic stimulus payment was reduced because your adjusted gross income exceeded the maximum allowable amount to receive the full credit. It was also reduced because one or more of the children shown on your 2007 tax return did not have a valid Social Security Number. The Social Security Numbers were not valid because the child’s last name and/or the number did not match either our records or the records of the Social Security Administration. A child with only an Adoption Taxpayer Identification Number or Individual Taxpayer Identification Number does not qualify for the child credit portion of the stimulus payment.
    213 - child credit 257 You received $300 for each child on your 2007 tax return who qualified for the Child Tax Credit

  7. RC 096 or RC 093 was used when manually adjusting the ESP.

    • RC 096 was used when correcting account information (i.e. Mixed Entity and Mixed Period cases). For 2008, RC 096 generated the verbiage "Economic Stimulus Payment" on the notice issued to the taxpayer.

      Note:

      RC 096 when used must always be in the 1st reason code position.

    • RC 093 was used ONLY when reversing the Credit Reference Number (CRN) 338, CRN 256, or CRN 257 because it is later than 12/31/2008 and the ESP cannot be refunded due to legislative requirement. RC 093 generates verbiage "We are required by law to mail the Economic Stimulus Payment by December 31, 2008. We could not issue the check by this date so you will not get the payment based on your 2007 tax account. However, you may be able to claim a credit on your 2008 Federal return."

      Note:

      RC 093 was also used when the ESP was systemically reversed in cycle 200852.

  8. Certain original returns required manual verification of the qualifying children reported so that the systemic ESP adjustment would reflect the correct amount for the child portion (Part 3/CRN 257). These accounts were identified by the following:

    • The ESP was not addressed (no systemic ESP adjustment / no TC 290 with RC 200 -205) AND

    • 5 or more dependents were claimed OR

    • 1 - 4 dependents were claimed and CC RTVUE indicates one or all of the dependents' information (Name/TIN) was not transcribed when the return was processed


    Once identified these accounts were sent to the applicable campus contact for manual verification. This process was completed by selected Accounts Management employees at the applicable campuses. When the number of qualifying children had been verified the employee input:

    • TC 290 .00

    • RC XXX in position one. XXX = the number of qualifying children (i.e. 001 indicated one qualifying child)

    • RC 071 in the second position

    The adjustment above, which did not generate a notice, was used by the programmer to figure the appropriate CRN 257 amount for the systemic ESP adjustment.
    If one of these accounts was identified during telephone/walk-in contact or while working correspondence and the taxpayer asked why he/she had not received his/her ESP, the Service explained that his/her return required manual verification to determine the number of qualifying children and he/she should allow until mid October 2008 to receive his/her stimulus payment.

21.6.3.6.4.2  (10-01-2011)
End of Year Reversals

  1. December 9, 2008, was the last date an IDRS transaction could be input to transfer or release the TC 766, Economic Stimulus Payment.

    Exception:

    ESP issues involving deceased taxpayers. See IRM 21.6.3.6.6.10 , Decedent Account Issues.

  2. Any ESP remaining on a Tax Year (TY) 2007 tax account was systemically reversed in cycle 200852 to ensure that the Service did not issue any ESP after December 31, 2008 deadline. After cycle 200852, determine if an overpayment on a TY 2007 account is composed entirely or partially of the ESP. Manually reverse any ESP.

    Exception:

    In certain circumstances, the Service can reissue the ESP. If the ESP check was returned, see IRM 21.6.3.6.6.5, Returned Refund Checks , or if the ESP check was lost, stolen, destroyed or not received, see IRM 21.6.3.6.6.4, Refund Traces, and IRM 21.6.3.6.6.8, Claims, to determine if ESP can be reissued. Instructions where the ESP can be reissued, the fact the reversal occurred is irrelevant.

    Exception:

    If an overpayment that included ESP was originally applied to pay tax or non-tax debt, and subsequently refunded, treat the ESP part as a regular overpayment and use normal procedures. See IRM 21.6.3.6.8, Tax Year 2007 Offset Reversal Issues: Injured Spouse/Innocent Spouse/EITC, Etc., for specific information.

    • Determine the amount of ESP.

    • Input TC 290 .00 and Credit Reference Number (CRN) 338, CRN 256, CRN 257 (as applicable) for the ESP amount with a minus sign (-) after the amount.

    • Use SC 2, RC 093 ,blocking series 05 (or 00 if the original return is present), and NSD or SD, as appropriate.

    • In Remarks, note: "Reverse ESP on account after 12-31-2008."

      Note:

      When the reversal occurred, a notice was generated which informed the taxpayer that we are required by law to mail ESP checks by 12/31/2008. If we cannot issue the ESP check by this date the taxpayer will not get the payment based on his/her 2007 tax account. However, if eligible, the taxpayer can claim the Recovery Rebate Credit on his/her 2008 Federal return.

      Note:

      If the taxpayer has filed a return for Tax Year (TY) 2008 but did not claim the RRC, calculate the Recovery Rebate Credit based on the information on the return and adjust the account accordingly. Do not advise the taxpayer to claim the Recovery Rebate Credit on his TY 2008 return if the TY 2008 return has been filed.

    • If the taxpayer contacts by telephone, give the explanation above.

    • If a regular overpayment remains, work the case according to normal procedures.

      Note:

      Use RC 093 only when reversing the Credit Reference Number (CRN) 338/256/257 because it is later than Dec. 31, 2008 and the ESP cannot be refunded due to legislative requirement. RC 096 is for ADJ54 adjustments to correct account information such as Mixed Entity and Mixed Periods.

21.6.3.6.5  (10-01-2011)
Stimulus Payment Inquiries

  1. For inquiries regarding eligibility, do not provide detailed eligibility information unless the taxpayer insists or the taxpayer is a recipient of Social Security or Veterans Benefits without a filing requirement, identified below. Please provide only basic information to include:

    • The vast majority of taxpayers do not need to do anything other than file a 2007 tax return. Stimulus payments will be calculated automatically based on the 2007 tax return.

    • An advance notice was mailed in March to all taxpayers who filed a TY 2006 return, explaining general eligibility for the stimulus payment.

    • Approximately a week before the stimulus payment is mailed, a second notice will be issued to eligible taxpayers, providing the expected payment amount, the mailing date, and other information. Checks and direct deposits will be issued starting in May, and staggered over multiple weeks.

    • In general, individuals who had taxable income and paid federal income taxes in 2007, and who could not be claimed as a dependent on someone else’s tax return, are eligible to receive the payment.

    • Recipients of Social Security, certain Railroad Retirement or Veterans benefits, who normally do not file a tax return, will need to send in a simple tax return for 2007 in order to receive a check. Provide eligibility information and specific return filing instructions as identified on the FS-2008–16 Fact Sheet (in the news release).

    • Taxpayers can be referred to IRS.gov, which is the best source of information for all rebate questions.

  2. For taxpayers who insist on an eligibility determination, DO NOT calculate the Economic Stimulus Payment amount, only determine the taxpayer’s eligibility. Use the "Am I Eligible for the Stimulus?" job aids located under the Economic Stimulus/Rebate TOC found on SERP under IRM Supplements to determine eligibility.

  3. When responding to a refund inquiry for an Economic Stimulus Payment (ESP) you need to know the following information:

    • Was the return filed electronically or paper?

    • Was the return filed only to receive the ESP?

    • Was direct deposit information included?

    • When was the return filed?

    • What are the last two digits of the primary SSN?

  4. The ESP is calculated and based on information reported on the 2007 return. Therefore, to respond to the taxpayer inquiries, first you must determine if time frames for processing the return have been met. Use the following to determine the processing time frames:

    • Paper return (with filing requirement) - allow 6 - 8 weeks to process

    • Paper return (filed only to receive the ESP) - allow 6 - 8 weeks from April 15, 2008, to process

    • E-file return - allow 3 weeks to process

    • Form 1040X - allow 12 to 16 weeks to process


    If the time frame above has not been met, advise the taxpayer of the applicable time frame and that he/she should wait to call back once the time frame has lapsed and the ESP has not been received.
    If the time frame above has been met, the account reflects an ESP adjustment (CRN 338/256/257), and the taxpayer states the ESP has not been received, see IRM 21.4.1, Refund Research.

    Note:

    For taxpayers who filed only to receive the ESP, verify disclosure using the taxpayer's Name, Address, Filing Status, Date of Birth, and the amount of the Qualifying Income reported on the return.


    If the time frame above has been met and the account indicates the ESP has not been addressed, see paragraph (5) of IRM 21.6.3.6.4.1, Economic Stimulus Payment Reason Codes.

  5. For original returns processed April 15, 2008 and prior, use the following table to respond to taxpayer inquiries regarding the issue date for his/her ESP:

    IF THEN
    Taxpayer's original refund was:

    • Paper check
      OR

    • RAL/RAC (refund anticipation loan or check) - CC TRDBV will show a RAL indicator of "1" or "2" .
      OR

    • A split refund or Taxpayer requested a split refund

    • Direct deposit but was rejected by his/her bank


    		 Taxpayer's ESP will be issued via paper check.
    Payment will be issued based on the last two digits of the primary SSN. Refer to IRM 21.6.3.6.6.2, Refund Schedule.
    Taxpayer's original refund was direct deposit Taxpayer's ESP will be issued via direct deposit.
    Payment will be issued based on the last two digits of the primary SSN. Refer to IRM 21.6.3.6.6.2, Refund Schedule.

    Exception:

    If the return was processed using Customer Account Data Engine (CADE) then the taxpayer may receive his/her payment sooner than the schedule indicates since CADE payments are processed daily.

    Taxpayer received refund on a debit card from his/her tax preparer (i.e. H&R Block Emerald Card)
    AND
    CC TRDBV shows a RAL indicator of"0"

    Note:

    If RAL indicator is "1" or "2" then see first IF/THEN

    		Taxpayer's ESP will be issued via direct deposit into his/her Emerald Card Account.
    Payment will be issued based on the last two digits of the primary SSN. Refer to IRM 21.6.3.6.6.2 , Refund Schedule.

    Exception:

    If the taxpayer closed the Emerald Card account the direct deposit will be rejected and reissued as a paper check.

    Note:

    If the taxpayer states they have lost or destroyed his/her Emerald Card, advise them to contact H&R Block at 1-866-353-1266.

    Taxpayer filed only to receive the ESP and filed electronically Payment will be issued based on the last two digits of the primary SSN. Refer to IRM 21.6.3.6.6.2, Refund Schedule.
    All others Refer to IRM 21.6.3.6.6.2, Refund Schedule.

  6. The IRS will transmit direct deposit stimulus payments starting May 2, 2008, for those taxpayers with no other account issues (e.g. freeze codes). Paper checks will be mailed beginning May 16. These payments will be sent out in the order of the last two digits of the primary SSN used on the tax return. See IRM 21.6.3.6.6.2 , Refund Schedule, for additional information regarding the refund issue dates.

  7. If the taxpayer contacts (walk-in/call/correspondence) the Service in regards to his/her Economic Stimulus Payment (ESP) and the TY 2007 module indicates a CP 36P open control, the ESP is being held by the -A freeze, the taxpayer indicates he/she filed the duplicate returns, and you are trained to input an adjustment then:
    If you have access to CIS AND the CP 36P case is assigned to the generic Andover employee number 0848900000 then:

    • Recontrol the CIS case to yourself. DO NOT change the category code.

      Note:

      Recontrolling the case on CIS will automatically recontrol the case on IDRS. See IRM 21.5.1.5.1, CIS General Guidelines, for additional information on CIS.

    • Update the address on file, if applicable.

    • The ESP cannot be refunded after December 31, 2008. Therefore, the ESP must be reversed and the TY 2008 Recovery Rebate Credit adjusted, if applicable. See paragraph (2) of IRM 21.6.3.6.4.2 , End of Year Reversals.


    Prepare a Form 4442 Inquiry Referral, and route it to the employee/unit with the open case control located at the Andover Campus if:

    • You are not trained to input an adjustment, or you do not have access to CIS, or the CP 36P case is not assigned to the generic Andover employee number 0848900000 or the ESP is not present on the account or the taxpayer indicates he/she did not file both returns or the taxpayer indicates he/she did file both returns but the returns are not duplicate
      AND

    • The taxpayer provides additional information

  8. If the taxpayer filed only to receive the ESP and now contacts the Service because he/she received a balance due notice:

    • Input a STAUP for 6 cycles, if applicable.

    • Complete an e-4442 and notate "ESP balance due taxpayer" in the remarks, See IRM 21.3.5.4, Referral Procedures.

      Exception:

      If an open CIS case is involved then an e-4442 or Form 4442 is not needed. Reassign CIS case to ANSC AM, Stop 709, employee 0843175944.. Notate in the remarks "ESP balance due taxpayer" .

    • Route e-4442 as an IRM required referral using drop down menus:
      1. Add issue titled "Economic Stimulus Payment"
      2. Select referral Type "IRM"
      3. Select category "Economic Stimulus Payment"
      4. Select "P Code Returns With Balance Due"
      5. Select "08 Andover - Electronic "

    • If unable to use e-4442, then complete a Form 4442Inquiry Referral , and fax to 978-474-5401, Attention ANSC AM, Stop 709, Employee 0843155100.

    • Advise taxpayer his/her case is being referred for special service and he/she will be contacted within 30 days

  9. If the taxpayer filed only to receive the ESP and now contacts the Service and claims:

    • The nontaxable benefits of $3000 or more was reported on his/her original return but per CC RTVUE the income was not transcribed (shows all zeros)
      OR

    • The nontaxable benefits of $3000 or more was reported on his/her original return but per CC RTVUE the income was transcribed incorrectly

      Example:

      Taxpayer reported veterans' benefits of $12,000 but CC RTVUE shows benefits of $1,200

      Note:

      If the transcription error resulted in a balance due then stop here and see paragraph (8) above.


      OR

    • In error, he/she reported the benefit amount he/she receives monthly

      Example:

      Taxpayer reported Veteran's benefits of $412 which is the amount he/she receives monthly from the VA. $412 x 12 (months) = $4,944 benefits received yearly which is the amount he/she should have reported.


    Take the following actions if trained to input an adjustment:

    1. If the individual received Social Security or Railroad Retirement benefits use CC IRPTR to verify the benefits total $3000 or more.

      Note:

      If the individual received Veterans Benefits assume the individual received qualifying income of $3000 or more.


      If the benefits total less than $3000 then explain the qualifying income requirement and advise the individual, if eligible, he/she can claim the Recovery Rebate Credit on his/her TY 2008 Federal tax return.

    2. Determine, if any, the number of qualifying children with a valid SSN that were born 1991 or later claimed on the original return. Multiply the number of qualifying children by $300 to arrive at the allowable CRN 257 amount.

    3. Input the following:
      TC 290 .00
      CRN 256 for $300 ($600 if MFJ)
      CRN 257 (if applicable)
      RC 096
      SC 2 and applicable HC

      Note:

      The last day to adjust this type of account was December 9, 2008. The ESP cannot be refunded after December 31, 2008. If December 10th or later, advise the individual, if eligible, to claim the Recovery Rebate Credit on his/her TY 2008 Federal tax return.

      Exception:

      ESP issues involving deceased taxpayers. See IRM 21.6.3.6.6.10, Decedent Account Issues .


    If not trained to input an adjustment then take the following actions:

    • Complete an e-4442, notate "ESP Processing Error" and whether income was not transcribed, income was transcribed incorrectly or monthly benefit amount was reported in remarks. See IRM 21.3.5.4, Referral Procedures

    • Route e-4442 as an IRM required referral using drop down menus:
      1. Add issue titled "Economic Stimulus Payment"
      2. Select referral Type "IRM"
      3. Select category "Economic Stimulus Payment"
      4. Select "P Code Returns With Balance Due"
      5. Select "08 Andover - Electronic "

    • If unable to use e-4442, then complete a Form 4442 , Inquiry Referral and fax to 978-474-5401, Attention ANSC AM, Stop 709, Employee 0843155100

    • Advise taxpayer his/her case is being referred for special service and he/she will be contacted within 30 days

  10. If the taxpayer calls or writes to say his/her ESP was not for the correct amount see IRM 21.6.3.6.5.1, Taxpayer Disputes.

21.6.3.6.5.1  (10-01-2011)
Taxpayer Disputes

  1. Taxpayers may disagree with the Notice 1378 or Economic Stimulus Payment (ESP) check they receive. Analyze the 2007 tax module. Use the information in IRM 21.6.3.6.2 ,Qualifications,IRM 21.6.3.6.3,Economic Stimulus Payment (ESP) Computataion, and IRM 21.6.3.6.4.1,Economic Stimulus Payment Reason Codes, to explain to the taxpayer why he/she did not qualify for the ESP or how the ESP amount was calculated. The ESP calculator may be used to respond to taxpayer inquiries regarding the calculation of the payment.

  2. If research indicates that the taxpayer did not receive the proper ESP for the child portion of the credit (CRN 257) then see IRM 21.6.3.6.5.1.1, Qualifying Child Not Identified Properly On Original Returns.

  3. For disputes involving individuals who receive Social Security benefits, certain Tier 1 Railroad Retirement benefits, nontaxable combat zone pay, or certain Veteran's benefits see IRM 21.6.3.6.2.1.1, Social Security Recipients, Veterans, and Other Beneficiaries Issues.

  4. For disputes involving accounts where the social security number (SSN) and name shown on the 2007 original return does not match the information the Social Security Administration provides the Service, see IRM 21.6.3.6.5.1.3, Social Security Number (SSN) and Name Control (NC) Mismatch.

    Note:

    These accounts can be identified by a TC 290 for zero with a RC 202

  5. Offer to send the taxpayer a transcript of his/her account as verification of the ESP amount he/she received.

    1. If the taxpayer refuses to accept an account transcript as verification of the ESP amount, prepare Form 4442, Inquiry Referral, to have a copy of the check sent to the taxpayer.

    2. If the taxpayer contacts the IRS after receiving a copy of the check and claims he/she did not endorse the check, send the taxpayer Form 3911, Taxpayer Statement Regarding Refund, and follow the procedures in IRM 21.4.2, Refund Trace and Limited Payability.

21.6.3.6.5.1.1  (10-01-2011)
Qualifying Children Not Identified Properly On Original Returns

  1. Due to taxpayer and/or software error when completing the 2007 original return, qualifying children for the Economic Stimulus Payment were not identified properly and the child portion (Part 3/CRN 257) of the stimulus payment was not computed correctly.

    Reminder:

    This process ONLY applies to original returns where the qualifying child was not identified properly. It DOES NOT apply to original returns with a dependent based TIN related math error involving the qualifying child.

  2. A recovery was performed in cycle 200827 to systemically correct accounts where the qualifying children were not identified properly. The recovery adjustment shows on the account as a TC 290 .00, CRN 257, and RC 214. RC 214 reads "We changed your account to include the qualifying child portion of the Economic Stimulus Payment. We apologize for any inconvenience" . The affected taxpayers should have received the child portion of the Economic Stimulus Payment by the end of July 2008.

    Exception:

    Taxpayers who claimed 5 or more dependents or claimed 1 - 4 dependents but CC RTVUE indicates one or all of the dependents' information (Name/TIN) was not transcribed when the return was processed, cannot be corrected through the systemic recovery process. A manual process was used to correct these accounts and these taxpayers were advised to allow until the end of September 2008 to receive his/her refund.

    Exception:

    Beginning November 17, 2008, do not order the original return. Instead close the case using the information you are able to verify using CC RTVUE/TRDBV. This exception applies to a new case or one that has been in suspense awaiting the document. Notify the taxpayer of the following:
    If adjusting for the ESP - "We have adjusted your account to allow an Economic Stimulus Payment of $XXX. If the maximum stimulus payment was not received and if you are eligible, you can claim the Recovery Rebate Credit on your 2008 Federal tax return. "
    OR
    If not adjusting for the ESP - "We are required by law to mail the Economic Stimulus Payment checks by 12/31/2008. Since we were unable to issue the check by this date, you will not get the payment/additional payment based on your 2007 tax account. However, if eligible, you can claim the Recovery Rebate Credit on your 2008 Federal tax return."

  3. Any remaining accounts not identified and corrected in the systemic recovery process need to be manually corrected. If one of these accounts is identified during telephone contact or while working correspondence, take the following actions:

    Note:

    December 9, 2008, was the last day to adjust the account to allow the ESP. Advise the taxpayer, if eligible, to claim the Recovery Rebate Credit on his/her TY 2008 Federal tax return.

    First, determine the number of qualifying children. Qualifying children have a valid SSN and were born 1991 or later.

    Exception:

    See IRM 21.6.3.6.2.2, The Heroes Earnings Assistance and Relief Tax Act of 2008,, which modified the rules relating to valid identification numbers.

    • If the original return was filed electronically, then all dependents claimed are shown on CC TRDBV. Use CC TRDBV to determine the number of qualifying children.

    • If the original return was a paper filed return and the total number of exemptions shown on master file does not exceed 6 if MFJ, or 5 if S/HOH/MFS/QW then use CC RTVUE/TRDBV to determine the number of qualifying children.

    • If the original return was a paper filed return and the total number of exemptions shown on master file exceeds 6 if MFJ, or 5 if S/HOH/MFS/QW then the original return is needed to determine the number of qualifying children.

      Exception:

      If the taxpayers states they have 4 or less qualifying children and the qualifying children are listed in the 1st four dependent field positions on CC RTVUE/TRDBV and then the return is not needed. Use CC RTVUE/TRDBV to determine the number of qualifying children.

    Follow these procedures once you determine the number of qualifying children, a CRN 338 or CRN 256 is present on the module AND the AGI is less than $75,000 ($150,000 for MFJ) since phase out will not apply:

    Note:

    If a CRN 338 or CRN 256 is not present then follow the procedures below for accounts where the AGI is $75,000 ($150,000 for MFJ) or greater.

    1. Multiply the number of qualifying children by $300 to arrive at the allowable CRN 257 amount.

    2. Adjust the account using TC 290 .00, CRN 257, RC 096, SC 2, and applicable HC.

      Note:

      Never decrease the CRN 257.

    Follow these procedures once you determine the number of qualifying children AND the AGI is $75,000 ($150,000 for MFJ) or greater:

    1. •Complete the worksheet http://serp.enterprise.irs.gov/databases/irm-sup.dr/ec_stimulus.dr/ec_stimulus_proc/ec_stimulus_calculate.htm located on SERP.

    2. •Adjust the account using TC 290 .00, CRN 338 if applicable, CRN 256 if applicable, and CRN 257, RC 096, SC 2, and applicable HC.

      Note:

      Never decrease the CRN 257.

      Reminder:

      When phasing out the ESP, the order is 1st CRN 338, 2nd CRN 256, 3rd CRN 257.

    If you are not trained on adjusting accounts and this condition occurs then complete an e-4442 or Form 4442 and refer to your local AM campus for resolution. Advise the taxpayer that he/she will receive a response within 45 days.

21.6.3.6.5.1.2  (10-01-2011)
Nontaxable Combat Pay

  1. See IRM 21.6.3.6.2.1.1, Social Security Recipients, Veterans, and Other Beneficiaries Issues..

21.6.3.6.5.1.3  (01-05-2009)
Social Security Number (SSN) and Name Control (NC) Mismatch

  1. Taxpayers may have been denied the Economic Stimulus Payment (ESP) because the name associated with the Primary, Secondary, and/or Qualifying Dependent SSN did not match the National Account Profile (NAP) which created an invalid condition. In these cases an invalid condition is created when either:

    • The taxpayer provides the correct SSN but the name associated with the SSN has not been updated on the NAP
      OR

    • The taxpayer provides an incorrect SSN

  2. If the taxpayer contacts the Service because he/she was denied the ESP and the correct SSN was listed on the original return see IRM 21.6.3.6.5.1.3.1, Name Control Mismatches.

  3. If the taxpayer contacts the Service because he/she was denied the ESP and the correct SSN was not listed on the original return, follow appropriate procedures to correct the TIN but DO NOT allow the ESP. Advise the taxpayer he/she can claim the Recovery Rebate Credit on his/her TY 2008 Federal return, if eligible.

  4. All ESP adjustments must have been input no later than December 9, 2008. The ESP cannot be refunded after December 31, 2008. If December 10th or later, advise the taxpayer, if eligible, to claim the Recovery Rebate Credit on his/her TY 2008 Federal return.

    Exception:

    ESP issues involving deceased taxpayers. See IRM 21.6.3.6.6.10, Decedent Account Issues

  5. If you are not trained in adjusting accounts and an ESP adjustment is needed, then complete an e-4442/ Form 4442Inquiry Referral, and refer to your local Accounts Management (AM) Campus for resolution. Advise the taxpayer he/she will receive a response within 45 days.

21.6.3.6.5.1.3.1  (10-01-2011)
Name Control Mismatches

  1. Taxpayers who were denied the ESP because the name associated with the primary, secondary, and/or qualifying dependent SSN did not match the NAP, but the SSN(s) provided the correct SSN(s) on the original return, were eligible for the ESP.

  2. When the primary and/or secondary taxpayer's name is involved, these accounts can often be identified by the issuance of a CP 54, an I- freeze, Computer Condition Code (CCC) "U" , Return Processible Code (RPC) "E" , and/or math error. In a case involving the primary TIN/Name mismatch the account posts originally to the invalid segment of the IMF.

    Note:

    If a RPC "E" is present see IRM 21.6.3.6.5.1.3.2, Return Processible Code "E" Accounts

  3. When the qualifying dependent's name is involved, these accounts can often be identified by math error notice codes 604 or 605 or by NAP Access Indicator "9" associated with a dependent SSN on CC RTVUE.

  4. When contacted by a taxpayer who was denied the ESP because the primary, secondary, and/or qualifying dependent's SSN was invalid, take the following actions:

    • If the invalid SSN condition was due to a name mismatch only (i.e. taxpayer provided the correct SSN but the name did not match SSA records) follow appropriate procedures and ALLOW the ESP.

      Example:

      Mary Doe's SSN is 222-22-2222. She filed a joint return with her husband John Doe and reported her SSN as 222-22-2222. However, Mary did not update her last name with SSA when she got married which created an invalid condition on the joint return.

      Note:

      In general, all ESP adjustments must have been input no later than December 9, 2008. For ESP issues involving deceased taxpayers, December 18, 2008 was the cut off. If December 10th or later, advise the taxpayer, if eligible, to claim the Recovery Rebate Credit on his/her TY 2008 Federal return

    • If the invalid SSN condition was due to a taxpayer error (i.e. taxpayer provided an incorrect SSN on the original return) follow appropriate procedures to correct the TIN but DO NOT allow the ESP. Advise the taxpayer he/she can claim the Recovery Rebate Credit on his/her TY 2008 Federal return, if eligible.

      Example:

      Same scenario as above except Mary reported her SSN as 222-22-2223.

21.6.3.6.5.1.3.2  (10-01-2011)
Return Processible Code "E" Accounts

  1. If the spouse's social security number (SSN) and name shown on the 2007 original return did not match the information the Social Security Administration provided the Service, the taxpayer was excluded from the systemic Economic Stimulus Payment (ESP) programming.

  2. These accounts can be identified by a TC 290 for zero with a RC 202. See IRM 21.6.3.6.4.1, Economic Stimulus Payment Reason Codes.

  3. A Recovery was performed in cycle 200842 (posted October 13, 2008) to systemically correct Married Filing Joint accounts where the spouses name/TIN were mismatched and a Return Processible Code (RPC) "E" was present. The affected taxpayers should have received his/her ESP by the end of November 2008. The systemic adjustment (TC 290 .00) included a RC 217. The Recovery adjustment did not generate a CP 21/22 notice; instead the taxpayers were issued the vendor Notice 1378.

  4. If the taxpayer contacts the service (TAC, Toll-Free) as a result of RC 202, and RPC "E" is present advise the taxpayer of the systemic recovery and that he/she should have received his/her ESP by the end of November 2008 along with Notice 1378.

  5. Advise the taxpayer that to avoid these problems in the future, the name and social security number shown on his/her tax return must exactly match the name and number shown on his/her Social Security Card. If he/she changes his/her name because of marriage, divorce, etc., he/she should report the change to his/her local Social Security Administration (SSA) office before filing his/her tax return. Notifying SSA ensures that SSA’s records and the Service's records coincide.

21.6.3.6.5.1.4  (02-12-2010)
Peace Corps Volunteers

  1. Peace Corps Volunteers, in some cases, did not receive an economic stimulus payment (ESP) because he/she reported the taxable amount of his/her living allowance as Other Income on line 21 of Form 1040. These accounts can be identified by a TC 290 .00 with a DLN of NN254-999-05099-8 (NN = filing location code) with a Reason Code 204.

  2. The Service is being contacted by Peace Corps Volunteers who reported their living expenses on Line 21 of Form 1040 and expected to receive the ESP.

  3. If a call/walk-in/correspondence is received from a Peace Corps Volunteer, take the allowing action:

    • Verify that the taxpayer reported qualifying income of $3000 or more including the amount show on line 21 of Form 1040

      Note:

      Less than $3000 qualifying income – then explain the qualifying income requirement and advise the taxpayer, if eligible, he/she can claim the Recovery Rebate Credit on his/her TY 2008 Federal tax return.

    • Determine, if any, the number of qualifying children with a valid SSN that were born 1991 or later and claimed on the original return. Multiply the number of qualifying children by $300 to arrive at the allowable CRN 257 amount.

    • Input the following:
      TC 290 .00
      CRN 256 for $300 ($600 for MFJ)
      CRN 257, if applicable
      RC 096
      SC 2 and applicable HC

    Note:

    In general, all ESP adjustments must have been input no later than December 9, 2008. For ESP issues involving deceased taxpayers, December 18, 2008 was the cut-off. The ESP cannot be refunded after December 31, 2008. If December 10th or later, advise the taxpayer, if eligible, to claim the Recovery Rebate Credit on his/her TY 2008 Federal return.

21.6.3.6.5.1.5  (10-01-2011)
Deceased Child

  1. Parents may not have had a Social Security Number (SSN) for a child if that child was born and died in 2007. In this case, the SSN was either not applied for or not received prior to death. The parent(s) may have filed his/her return without an SSN for the deceased child. If contacted by the taxpayer:

    • Verify that the account contains a Return Processible Code (RPC) "I"

      Note:

      RPC" I" indicates the taxpayer entered "Died" in the SSN field for the dependent and either a supporting birth certificate or a death certificate was present.

    • Adjust the account to allow the ESP for this child. See IRM 21.6.3.6.3(5) for ESP Computation Part 3.

    • Input CRN 257 for $XXX (XXX = $300 x the number of children who were born and died in 2007)

    • Use RC 096, SC 2, and applicable HC

  2. The last day to adjust this type of account was December 9, 2008. The ESP cannot be refunded after December 31, 2008.

  3. If not trained to adjust in adjusting accounts and an ESP adjustment is needed, then complete an e-4442/ Form 4442Inquiry Referral, and refer to your local Accounts Management (AM) Campus for resolution. Advise the taxpayer he/she will receive a response within 45 days.

21.6.3.6.6  (10-01-2010)
Refund Issues

  1. According to IRC §6428(g)(4), interest is not allowed on the 2007 Economic Stimulus Payment (ESP).

    Note:

    ESP offset to pay a tax or non-tax debt loses its identity as ESP. Therefore, credit interest is appropriate if any or all of the offset amount is subsequently refunded. Example: ESP was offset by Financial Management Service (FMS) to pay child support. The taxpayer files an injured spouse claim and part of the credit is returned to the 2007 account. Interest should be paid on the overpayment.

21.6.3.6.6.1  (10-01-2010)
Direct Deposit

  1. The Treasury did issue the Economic Stimulus Payment (ESP) by direct deposit.

  2. Stimulus payments were directly deposited for taxpayers who selected only one account for his/her entire refund to be direct deposited when filing his/her 2007 tax returns.

  3. Bank account information provided by the taxpayer when filing his/her original 2007 tax return was used when issuing the ESP.

  4. Paper checks were issued in the following instances:

    • Taxpayers who received a RAL or RAC

    • Taxpayers who had his/her direct deposit refund traced

    • Taxpayers whose direct deposit refund was rejected by the bank

  5. Individuals without a filing requirement for Tax Year (TY) 2007 who filed only to receive the ESP could have listed his/her bank account information on the return to have his/her ESP directly deposited.

  6. Individuals who used the H&R Block Emerald Card to receive his/her regular tax refunds may have been issued a paper check. Generally, the ESP for these taxpayers was issued as a direct deposit into his/her card account. These cards remain active even if there is a zero balance on the card. The most common situations in which the funds were not deposited into the Card account were:

    • If the taxpayer’s account showed a RAL indicator of "1" or "2" on CC TRDBV (in which case the stimulus payment went straight to a paper check) or

    • If the taxpayer had closed the Emerald Card account (in which case the direct deposit was rejected and reissued as a paper check).

    If the taxpayer reports he/she has lost or destroyed his/her Emerald Card, he/she should contact H & R Block at 1-866-353-1266.

  7. Unlike the Emerald Card, the Jackson Hewitt iPower Card is always tied to a RAL or RAC, so the stimulus payments for these taxpayers were issued as a paper check.

  8. A TC 971 Action Code (AC) 850 is used when making adjustments to accounts where an incorrect taxpayer posts first to the account (i.e. Mixed Entity, Identity Theft, Scrambled SSN cases) and requests direct deposit. Subsequently, the correct taxpayer files which creates an - A freeze (CP 36 / CP 36P). When adjusting the account to reflect the correct taxpayer's information input a TC 971 AC 850. Input of the TC 971 AC 850 ensures a subsequent refund will flip to a paper check and will not be direct deposited. Also, be sure that the entity information has been updated to reflect the correct taxpayer's address.

21.6.3.6.6.2  (01-05-2009)
Refund Schedule

  1. The stimulus payment refund schedule for returns processed prior to April 15, 2008 is shown below:

    Direct Deposit Payments
    If the last two digits of the taxpayer's Social Security Number are: Then the economic stimulus payment was deposited in the bank by:
    00 - 20 May 2
    21 - 75 May 9
    76 - 99 May 16
    Paper Checks
    If the last two digits of the taxpayer's Social Security Number are: Then the economic stimulus payment mailed by:
    00 - 09 May 16
    10 - 18 May 23
    19 - 25 May 30
    26 - 38 June 6
    39 - 51 June 13
    52 - 63 June 20
    64 - 75 June 27
    76 - 87 July 4
    88 - 99 July 11

  2. Taxpayers with a filing requirement, who filed a refund return after April 15, 2008, could expect to receive the stimulus payment in approximately two weeks after receiving his/her tax refunds, but not before the date he/she would have received the payment had his/her return been processed by April 15, 2008.

  3. Taxpayers with a filing requirement, who filed on or after April 15, 2008, a zero balance, full paid or balance due return should have allowed 6 to 8 weeks to receive the stimulus payment from the date he/she mailed his/her return.

  4. Individuals filing electronically only to receive the stimulus payment, were issued his/her payment based on the refund schedule above.

  5. Individuals filing only to receive the stimulus payment, who filed a paper return should have allowed 6-8 weeks from April 15, 2008, or from the date he/she filed, whichever is later, to receive his/her stimulus payments.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Therefore, if research indicates a return filed only to receive the ESP has not been received, do not advise the taxpayer to refile until the 6–8 week time frame above has been met.

    Note:

    If the return was filed after October 15, 2008, see IRM 21.6.3.6.6.2.1 , Tax Year 2007 Original Returns Filed After October 15, 2008, for more information.

21.6.3.6.6.2.1  (10-01-2010)
Tax Year 2007 Original Returns Filed After October 15, 2008

  1. By law, the IRS had to make or allow any economic stimulus payment (ESP) by December 31, 2008. Therefore, individuals who filed a Tax Year (TY) 2007 original return after October 15, 2008, may not have received the Economic Stimulus Payment in 2008. If eligible, those individuals who did not receive the ESP could claim the RRC on their TY 2008 tax returns.

    Note:

    Submission Processing continued to process TY 2007 returns filed by taxpayers with a filing requirement. See IRM 21.6.3.6.6.2.1.1, "ESP Only" Returns, for information concerning returns filed only to receive the ESP.

  2. If the return was processed by December 5, 2008 (cycle 200850 or prior), the economic stimulus payment was systemically generated, if applicable. If the return was not processed by December 5, 2008 (cycle 200851 and subsequent), the individual did not receive an economic stimulus payment.

    Reminder:

    Advise taxpayerswith a filing requirement, who will not receive an economic stimulus payment to claim the Recovery Rebate credit, if eligible, on his/her TY 2008 Federal Tax return.

21.6.3.6.6.2.1.1  (10-01-2011)
"ESP Only" Returns

  1. The information and procedures in this subsection apply to Tax Year (TY) 2007 original returns filed only to receive the economic stimulus payment (referred to as "ESP Only" returns).

  2. November 14, 2008, was the last day that "ESP Only" original returns were processed by Submission Processing. Therefore, some"ESP Only" original returns filed after October 15, 2008, were not be processed in time to issue the stimulus payment by the December 31, 2008, deadline. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. If working a telephone contact, correspondence or walk-in involving an ESP refund inquiry and the individual filed an ESP Only return, take the following actions to determine if the ESP was issued in 2008:

    1. Was the return filed on or before October 15, 2008?
      •Yes - stop and follow normal refund inquiry procedures located in IRM 21.4.1, Refund Research
      •No - continue to number 2

    2. Was the return filed before November 14, 2008?
      •Yes - continue to number 3
      •No - advise the individual that his/her TY 2007 return was filed too late to receive the Economic Stimulus Payment this year however; he/she should have received a refund of the Recovery Rebate Credit by February 20, 2009. He/she does not need to file a TY 2008 return to receive the Recovery Rebate Credit and no further action is required on his/her part at this time.

    3. Has the 6 – 8 week processing time frame been met?
      •Yes - follow IRM 21.4.1.3.1, Locating the Taxpayer’s Return. If located, continue to number 4. If not located, advise the individual that we apologize but we have no record of receiving his/her TY 2007 return. Advise them that it is too late to receive the Economic Stimulus Payment this year. Instead, he/she should file a TY 2008 return to receive the Recovery Rebate Credit, if eligible.
      •No - advise individual to contact the Service again after the 6 – 8 processing time frame has been met

    4. Does the return have a posting cycle of 200850 or prior?
      •Yes - the ESP will be systemically figured on returns processed by December 5, 2008 (cycle 200850)
      •No - the ESP will not be systemically figured and these individuals should file a TY 2008 return to claim the Recovery Rebate Credit, if eligible

21.6.3.6.6.3  (10-01-2011)
Refund Offsets

  1. If the taxpayer requested a credit elect on his/her original return and the credit elect posted was less than the requested amount, then the Economic Stimulus Payment (ESP) was not be applied as credit elect.

  2. The ESP refund was reduced because of outstanding government debt, such as back taxes, or a student loan, or because of past-due child support obligations.

    • The offset transaction date was the date of the TC 766 Credit Reference Number (CRN) 338, CRN 256, or CRN 257.

    • In the case of offset to Federal debt, a CP 49 was issued from the account to which the payment was applied unless it was applied to the Tax Year (TY) 2007. A CP 21/22 generated if all or part of the payment was applied to a balance due on the TY 2007 account.

    • Financial Management Service (FMS) advised the taxpayer when the payment was offset to non-Federal debts.

    • If the ESP amount was larger than the debt, the taxpayer received a check for the difference. If the full ESP amount was applied to the debt, the taxpayer did not receive a check.

    • Refer to IRM 21.4.6, Refund Offsets, for Injured Spouse procedures.

  3. An ESP was subject to offset by the Treasury Offset Program (TOP). If a taxpayer calls with offset questions, please refer them to the Treasury Offset Program Call Center on 1-800-304-3107.

  4. Prior to the initial posting of the Economic Stimulus Payment (ESP), it was not feasible for the Service to honor early payment of an ESP in situations where a taxpayer meets hardship criteria. The only condition that a manual refund was initiated for taxpayers that met hardship criteria was when the ESP payment was frozen on the account and the case was worked on or before December 18, 2008. If December 18, 2008, or prior and the ESP was frozen and the taxpayer declared a hardship; the caseworker followed normal procedures and expedited the release of the refund using the appropriate process. See IRM 21.6.3.6.6.9, Manual Refund of Stimulus Payment.

    Caution:

    Do not complete a Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance order) , unless the above condition is met.

  5. If December 19, 2008, or later and the ESP is frozen, the ESP must be reversed (if not reversed systemically in cycle 200852) and the taxpayer, if eligible, must claim the Recovery Rebate Credit (RRC) on his/her TY 2008 Federal tax return. See IRM 21.6.3.6.4.2, End of Year Reversals.

  6. The law states that Treasury CANNOT issue an Economic Stimulus Payment (ESP) check after December 31, 2008. In certain situations, however Treasure could issue a replacement ESP check after December 31, 2008. See IRM 21.6.3.6.6.8 for replacement check guidelines.

21.6.3.6.6.4  (02-12-2010)
Refund Traces

  1. Follow procedures in IRM 21.4.2, Refund Trace and Limited Payability, if refund trace action is required to locate a lost, stolen, destroyed, or not received Economic Stimulus Payment (ESP) refund check.

    Note:

    If a taxpayer files a joint return and contacts the Service about a lost, stolen, destroyed, or not received stimulus payment then oral authority can be used to initiate research for the stimulus payment check. The requirement to provide a completed Form 3911, Taxpayer Statement Regarding Refund, can be waived based on a temporary waiver signed by the Commissioner of the Internal Revenue Service, effective April 15, 2008, through November 30, 2008.

    Note:

    If a taxpayer contacts the Service before December 1, 2008, about a lost, stolen, destroyed, or not received stimulus payment and indicates his/her address needs to be updated then the Service can update the address and input CC CHKCL at the same time.

  2. November 30, 2008, was the last date for input of command code (CC) CHKCL using normal procedures. After this date, a written claim must be received to begin the refund trace process for any ESP refund that is reported lost, stolen, destroyed, or not received. See IRM 21.6.3.6.6.8 , Claims, for check replacement guidelines and IRM 21.4.2,Refund Trace and Limited Payability.

  3. In cycle 200852 a systemic reversal occurred for any ESP amount remaining on the account. See the examples listed below:

    • Example 1

      ESP amount is $600
      TC 846 is $600
      TC 841/TC 740 is $600
      TC 767 (reversal) is $600
      The account credit was for $600; all is ESP and will be systemically reversed

    • Example 2

      ESP is $300
      TC 767 (reversal) is $300
      No refund was issued; i.e. freeze condition was present on the account. A systemic reversal will occur.

21.6.3.6.6.5  (10-01-2009)
Returned Refund Checks

  1. The Economic Stimulus Payment (ESP) can be returned for several reasons. Some of the most common are:

    • Incorrect address, U. S. Postal Service was unable to deliver check

    • The check cannot be negotiated (deceased taxpayer)

    • The taxpayer requests the money be applied to another account

    • The check is issued in the wrong name

    • Religious beliefs

    • Subsequent changes to the taxpayer's original filing

    • The taxpayer is not entitled to the stimulus payment

  2. See IRM 21.6.3.6.8, Tax Year 2007 Offset Reversal Issues: Injured Spouse/Innocent Spouse/EITC, Etc, for information on ESP used to pay tax and non-tax debts.

  3. If a TY 2007 ESP is returned:

    • Determine the reason why the ESP was returned.

    • Determine if the ESP can be reissued.

  4. For lost, stolen, destroyed, or not received Economic Stimulus Payment (ESP) refund check, see IRM 21.6.3.6.6.4, Refund Traces and IRM 21.6.3.6.6.8, Claims, to determine if the ESP can be reissued.

  5. If the ESP is returned as undeliverable, see IRM 21.6.3.6.6.7, Undelivered Economic Stimulus Payment Checks, to determine if the ESP can be reissued.

  6. If the ESP is returned and the issue involves a deceased taxpayer, see IRM 21.6.3.6.6.10, Decedent Account Issues , to determine if the ESP can be reissued.

  7. The taxpayer may return the ESP check and request that it be applied as an estimated tax payment, or to another account. Do not reissue the ESP. Instead, consider it a payment made on the date the returned check is received by the Service.

  8. If the ESP is returned because the check was issued in the wrong name, the Service may have authority to issue a replacement check depending upon the specific facts of the case. In this situation, the determination of whether the check can be reissued will depend upon whether the taxpayer's tax account reflects that refund or credit of the ESP was made/issued to the taxpayer. If a check was issued in the wrong name but the taxpayer's account reflects the credit or refund, then a replacement check can be issued, as long as the taxpayer did not already receive the Recovery Rebate Credit (RRC) based on his/her TY 2008 return. If a check was sent to a taxpayer and contained the wrong name AND TIN, then it is treated as though an ESP has not been issued to the taxpayer prior to the deadline, and the ESP must be reversed see paragraph (13) below. By law, the ESP must be allowed and made to the taxpayer on or before December 31, 2008.

  9. Taxpayers may wish to return the ESP check for other reasons, such as religious beliefs or due to subsequent changes to his/her original filing (i.e. 1040X filed to remove qualifying child). In these instances:

    • Tell the taxpayer to keep the ESP check. Explain that if overpaid based on the original return information, the Service will not pursue the erroneous amount.

      Exception:

      If the taxpayer reported non-qualifying income which made them appear to qualify for the ESP, then the taxpayer should return the check.

      Exception:

      Individuals residing in the U.S. territories who received duplicate refunds, see IRM 21.6.3.6.12.1 , Duplicate Refunds, for more information.


    If the taxpayer insists and asks how to return the payment see paragraph (11) below. Once returned, the Service will not reissue the ESP. See paragraph (13) below on how to reverse the ESP.

  10. Individuals, without a filing requirement, may wish to return the ESP check or direct deposit because he/she realize after filing that he/she does not qualify for the stimulus payment. (i.e. Individual reports Supplemental Security Income (SSI). If the taxpayer asks how to return the payment see paragraph (11) below. Once returned, the Service will not reissue the ESP. See paragraph (13) below on how to reverse the ESP.

  11. If the taxpayer or individual asks for guidance in regards to returning the stimulus payment advise them to take the following action:

    Paper Check

    • Mark the back of the check "VOID" and return to the issuing campus which is identified by the Filing Location Code (FLC) of the TC 150.

    • Include a letter stating he/she is returning the stimulus payment and why.

      Reminder:

      Please remind the individual to include his/her name and social security number in the letter.

    Direct Deposit or Cashed Paper Check

    • Return payment in the form of check or money order with name, social security number, and TY 2007 notated on the payment. Send payment to the Internal Revenue Service campus where the 2007 tax return was filed.

    • Include a letter stating he/she is returning the stimulus payment and why.

      Reminder:

      Please remind the individual to include his/her name and social security number in the letter.

  12. If the actual ESP check is returned, it will post to the module as a TC 841. If a check or money order is submitted, those will post to the module as a TC 670 or TC 720.

  13. Take the following actions only after the stimulus payment has been returned (TC 841 or TC 670/TC 720) AND the ESP cannot be reissued:

    • Reverse the economic stimulus payment (ESP).

    • Input TC 290 .00 and CRN 338, CRN 256, CRN 257 (as applicable) for the ESP amount with a minus sign (-) after the amount. Input RC 096 and HC 4.

      Exception:

      If stimulus payment refund check was returned (TC 841), then use HC 3.

    • If TC 841 , input a history item "RETURNBYTP" and no further action is needed.

    • If TC 670/ TC 720, change the date of the payment to the date of the stimulus refund. See IRM 21.5.8.4.3Determining Correct Credit Transfer Format.

    • If the taxpayer has filed a return for TY 2008 and did not receive the RRC, determine if he/she is now eligible since the ESP has been reversed. If applicable, adjust the TY 2008 to allow the RRC. See IRM 21.6.3.4.2.12.7, Adjusting 2008 RRC.

      Note:

      This applies if the taxpayer filed a TY 2008 and received the RRC. In those cases, determine if the taxpayer is entitled to additional RRC since the ESP has been reversed. If applicable, adjust the account accordingly.

  14. In certain circumstances, when the ESP is returned, the Service may reissue the ESP. See Exhibit 21.6.3–4, Rules For Reissuing ESP Checks. The ESP CAN only be reissued if all three additional criterion below are met:

    • The ESP was issued on the taxpayer's account (TIN)

    • The ESP was issued on or before December 31, 2008

    • The Recovery Rebate Credit was not received for TY 2008

    If the ESP can be reissued, a manual refund is required. If a manual refund is not input to refund the stimulus payment a REBATEREV transcript will generate. See IRM 21.6.3.6.13, REBATEREV Transcripts.

  15. DO NOT allow an erroneous refund situation to occur. Follow normal procedures carefully.

  16. If an ESP is reversed and now requires reinstatement, follow the procedures in (c) below when:

    1. A TC 841 is reversed and a subsequent TC 843 posts that now requires reinstatement of the ESP.

      Example:

      The ESP check issued is reported as lost. The TC 841 posts and the ESP reversal posts in cycle 200852. A TC 843 is now on the account and the taxpayer is receiving a bill for the ESP amount. Reinstate the ESP to the TY 2007 account. Advise the taxpayer of action taken.

    2. The cycle 200852 reversal posts before the refund/manual refund posts.

    3. Manually input the ESP for the amount reversed in cycle 200852. Use TC 290 .00 and CRN 338/256/257 as applicable for the ESP amount, SC 0, RC 096, HC 3, BS 05 and NSD "Reinstate ESP previously issued to TP" . Use TC 340 .00 to prevent erroneous generation of debt interest.

    Note:

    If the ESP is reinstated and credit or debit interest systemically generates, abate the interest.

21.6.3.6.6.6  (11-14-2008)
Erroneous Refunds

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Refer to IRM 21.6.3.6.6.5, Returned Refund Checks , if the taxpayer wants to send the check back.

    Exception:

    If a Service error results in duplicate stimulus payments being issued to the same individual under the same TIN then erroneous refund (Category D) procedures apply. See IRM 21.4.5, Erroneous Refunds.

  2. See IRM 21.6.3.6.12.1, Duplicate Refunds, for information regarding individuals residing in the U.S. territories who received ESP from the Service and a stimulus payment from the territory.

21.6.3.6.6.7  (10-01-2010)
Undelivered Economic Stimulus Payment Checks

  1. A TC 740 may consist of the Economic Stimulus Payment (ESP). An ESP in the module as of cycle 200851 resulted in a systemic reversal of the ESP in cycle 200852. In some cases the ESP was not systemically reversed..

  2. Do not input CC CHK64 to release an undelivered ESP check (TC 740 Blocking Series 99999) after December 9, 2008. If December 10, 2008, or later, a review of the taxpayer's TY 2008 account must be made to determine whether the ESP can be replaced.

  3. If the individual has not filed a TY 2008 return and does not appear to have a filing requirement then issue a manual refund of the TY 2007 ESP.

  4. If the taxpayer has filed a TY 2008 return and RRC is present, determine if the taxpayer is entitled to replacement of any portion of the ESP. Use the Recovery Rebate Credit Calculator located on www.irs.gov to figure the RRC (when prompted for the amount of ESP enter zero "0" and when done do not subtract the amount of RRC already allowed) then use the table below to determine the appropriate action:

    If the amount of RRC per the calculator is ... And... Then... And...
    Equal to the amount of RRC present on the account   Do not reissue the ESP
    See paragraph (7)     		 
    Greater than the amount of RRC present on the account Equal to or greater than the ESP Do not reissue the ESP
    See paragraph (7)     		Adjust (increase) the RRC on the TY 2008 account
    Greater than the amount of RRC present on the account Less than the ESP Issue a manual refund of the ESP but only for the difference ESP - RRC (per calculator) = manual refund Adjust (increase) the RRC on the TY 2008 account
    Less than the amount of RRC present on the account The RRC present on the account is equal to or more than the ESP Do not reissue the ESP
    See paragraph (7)     		Do not adjust (decrease) the RRC present on the account
    Less than the amount of RRC present on the account The RRC present on the account is less than the ESP Issue a manual refund of the ESP but only for the difference ESP - RRC (on account) = manual refund Do not adjust (decrease) the RRC present on the account

  5. If the taxpayer filed a TY 2008 return but was not eligible for the RRC due to the fact that his/her circumstances differ from TY 2007 (i.e. AGI exceeds limit, the number of qualifying children decreased, etc.) issue a manual refund of the ESP.

  6. If the taxpayer filed a TY 2008 return but was not eligible for the RRC due to the receipt of the ESP then:

    • Figure the RRC (When prompted for the amount of ESP enter zero "0"

    • Does the amount of RRC exceed the amount of ESP?
      Yes - adjust the TY 2008 account to allow the RRC
      No - Input CC CHK64.

  7. Reverse all or the portion of the ESP not reissued, when applicable.

21.6.3.6.6.8  (10-01-2010)
Claims

  1. The law states that Treasury cannot make an Economic Stimulus Payment (ESP) after December 31, 2008.

  2. Taxpayers who did not file his/her 2007 tax returns in time to receive an ESP check, may claim the Recovery Rebate Credit, to the extent he/she qualified for it, on his/her 2008 Federal income tax return.

  3. The Service can, in some instances, issue a replacement check for the ESP after 12/31/08. To qualify for a replacement ESP check, the taxpayer must file a claim for a replacement check within 1 year after the date of the issuance of the check. Replacement ESP checks can be issued after 12/31/2008 in the following situation:

    • The taxpayer's ESP check was lost, stolen, destroyed or not received.

    • The check was issued in the name of a decedent and cannot be negotiated. See IRM 21.6.3.6.6.10, Decedent Account Issues.

  4. Follow the procedures below to replace a lost, stolen, destroyed or not received ESP check after 12/31/08:

    1. Send the taxpayer a Form 3911, Taxpayer Statement Regarding Refund. Advise the taxpayer to mail or fax the Form 3911. No oral statement is permitted. See paragraph (1)(b) of IRM 21.4.2.4, Refund Trace Actions, for procedures.

    2. When the Form 3911 or written request is received, the Refund Inquiry Unit will input CC CHKCL with the non-receipt code "N" .

    3. If the check was forged, FMS will make the determination and reissue a replacement check to the taxpayer. When the proper disposition code is received, Refund Inquiry will close the case by inputting TC 290 .00.

    4. If the check was not cashed a TC 841 will post to the account, an -R freeze will be set and a REBATEREV transcript will generate. See IRM 21.6.3.6.13, REBATEREV Transcripts.

  5. According to IRC §6428(g)(4), interest is NOT allowed on the ESP check.

21.6.3.6.6.9  (02-12-2009)
Manual Refund of Stimulus Payment

  1. If a manual refund of the Economic Stimulus Payment (ESP) or a manual refund includes the ESP, DO NOT issue the manual refund until after the transaction date of the ESP adjustment as shown on IDRS. If the manual refund is input before the transaction date, interest will be assessed in error.

  2. Credit Interest is not allowed on the ESP portion of an overpayment.

    Exception:

    ESP offset to pay a tax or non-tax debt loses its identity as ESP. Therefore, credit interest is appropriate if any or all of the offset amount is subsequently refunded. Example: ESP was offset by FMS to pay child support. The taxpayer files an injured spouse claim and part of the credit is returned to the 2007 account. Interest should be paid on the overpayment.

  3. The only condition that a manual refund can be initiated for taxpayers that meet hardship criteria is when the ESP payment is frozen on the account. If the ESP is frozen, follow normal procedures if a taxpayer declares a hardship and expedite the release of the refund using the appropriate process.

    Caution:

    Do not complete a Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance order), unless the above condition is met.

  4. The law states that Treasury cannot make an Economic Stimulus Payment (ESP) check after December 31, 2008.

    Exception:

    However, the Treasury in some circumstances can issue a replacement check after December 31, 2008 if the original ESP is lost, stolen, destroyed, or not received. See IRM 21.6.3.6.6.4, Refund Traces

21.6.3.6.6.10  (10-01-2011)
Decedent Account Issues

  1. The following guidance applies ONLY to cases involving an Economic Stimulus Payment (ESP) for a deceased taxpayer.

    Note:

    If the Mail Filing Requirement (MFR) is "08" you do not have to input a TC 012 or TC 542 before issuing a manual refund or adjusting the account.

  2. If the ESP needs to be adjusted/allowed on the decedent account then:

    • Input the ESP adjustment. See http://serp.enterprise.irs.gov/databases/irm-sup.dr/ec_stimulus.dr/ec_stimulus_proc/ec_stimulus_calculate.htm located on SERP.

    • Include HC 1 or HC 4, as applicable.

    • Include a TC 340 for zero (.00) to prevent debit interest from generating.

    • Issue a manual refund for the ESP. See IRM 21.4.4 , Manual Refunds. Field Assistance see IRM 21.3.4.3.10.1, Manual Refunds Using IDAP.

    • Adjustment and refund must be input by 6:00 pm EST on December 18, 2008.

  3. If the TC 840 has not posted to master file by cycle 200851 and the ESP adjustment is systemically reversed in cycle 200852 then the ESP must be reinstated. Manually input the ESP for the amount reversed in cycle 200852. Include a TC 340 for zero (.00) and NSD "Reinstate ESP previously issued to TP" as the remarks.

    Caution:

    If the TC 840 did not post by cycle 200852 and the ESP adjustment was systemically reversed, then the estate must claim, if eligible, the Recovery Rebate Credit (RRC) on the decedent's TY 2008 Federal tax return (if a TY 2008 return can be filed).

  4. If a surviving spouse or executor of a decedent, return an ESP check to the Service and requests that the check be reissued in the name of the person legally entitled to the check, the Service is authorized to issue a replacement check, but only in those circumstances where the person's situation changed so that they were no longer eligible for the RRC on the 2008 return.

    Caution:

    In all events, the caseworker must be careful not to replace a ESP payment and allow the same credit as RRC on the TY 2008 account.

    Example:

    Returned ESP check for a deceased taxpayer on a 2007 married filing joint tax return. The ESP was reversed as of cycle 200852. IRS files reflect no ESP payment was made. The surviving spouse files a joint TY 2008 tax return and claims the RRC. If the surviving spouse is no longer eligible for the same amount of credit (RRC) on the 2008 return , the caseworker must issue a replacement ESP for the difference between the amount of RRC allowed and the original ESP based on the 2007 tax return.

    Example:

    Returned ESP check for a deceased taxpayer on a 2007 single (MFS,HOH,QW) tax return. The ESP was reversed as of cycle 200852. IRS files reflect no ESP payment was made. A TY 2008 tax return cannot be filed for the deceased taxpayer because he/she died in 2007 or he/she died in 2008 but did not receive enough eligible income or benefits in 2008, then the caseworker must issue a replacement ESP check in the name of the person legally entitled to the decedent's ESP.

    Example:

    Returned ESP check for a deceased taxpayer on a TY 2007 married filing joint tax return. The ESP credit was not reversed as of cycle 200852. IRS files reflect that the surviving spouse received an ESP. If the surviving spouse files a 2008 return claiming the RRC, the Service will disallow all or part of the RRC and issue a math error notice. The caseworker must issue a replacement ESP check to the surviving spouse (assuming he/she is legally entitled to the decedent's portion of the ESP refund.

    Example:

    Returned ESP check for a deceased taxpayer on a 2007 single (MFS,HOH,QW) tax return. The ESP was not reversed as of cycle 200852. IRS files reflect an ESP payment was made to the deceased taxpayer. If the taxpayer dies in 2008 and a TY 2008 return is filed for decedent and claims RRC, the Service will disallow all or part of the RRC. The caseworker must issue a replacement ESP check to the person legally entitled to the ESP refund.

  5. See Exhibit 21.6.3-4, Rules For Reissuing ESP Checks , for additional information.

21.6.3.6.7  (09-28-2008)
Amended Returns/Superseding Returns/Subsequent Adjustments

  1. The Economic Stimulus Payment (ESP) was figured and based on the first return information, including any changes IRS made during processing . Amended returns or subsequent adjustments did not affect the calculation of the ESP.

    Exception:

    In some cases, taxpayers who received Social Security benefits, certain Tier 1 Railroad Retirement benefits, nontaxable combat zone pay, or certain Veteran's benefits income could have filed an amended return which affected the ESP. See IRM 21.6.3.6.7.1, Forms 1040X filed by Social Security, Veterans, and Other Beneficiaries .

  2. In most instances, the ESP was not adjusted based on an amended return or superseding return.

  3. If the taxpayer files an amended return or superseding return which indicates the taxpayer was entitled to more or less of an ESP than what was originally figured, do not adjust the ESP for the difference.

21.6.3.6.7.1  (02-12-2009)
Forms 1040X filed by Social Security Recipients, Veterans, and Other Beneficiaries

  1. Taxpayers who did not report his/her Social Security benefits, certain Tier 1 Railroad Retirement benefits, nontaxable combat zone pay, or certain Veteran's benefits income on his/her original return, which if reported, would have qualified them for the Economic Stimulus Payment (ESP) were advised to file an amended return ( Form 1040X) to report this income for purposes of the ESP.

    Caution:

    All ESP adjustments must be input no later than December 9, 2008. The ESP cannot be issued after December 31, 2008. If December 10th or later, advise the taxpayer, if eligible, to claim the Recovery Rebate Credit on his/her TY 2008 Federal return.

  2. The taxpayer identified these Forms 1040X by notating "Stimulus Payment" across the top of the form. However, some of the forms only reported the qualifying income with no explanation.

  3. Take the following action:

    If the original return (TC 150) has not posted or there is no indication an original return has been received (i.e. no TC 610 or no info on CC FFINQ).

    Note:

    Refer to IRM 21.5.1.5.7, CIS Push Codes, for processing if the original return has been received but not processed.

    • Convert the Form 1040X to a Form 1040A.

    • Notate "Stimulus Payment" across the top of the form, complete the entity section, report the social security, tier 1 railroad retirement, and veterans disability and death benefits on line 14a and the nontaxable combat pay on line 40b.

    • Notate under the jurat that the signature is located on the attached Form 1040X.

    • Attach the Form 1040X to the back of the Form 1040A.

      Note:

      " X" through and notate down the side of the Form 1040X "Attachment to Form 1040A. Do not detach."

    • Route the package to Code and Edit


    If the TC 150 is present and the account also has a TC 766 with a Reference Code 338, 256, and/or 257.

    Note:

    The stimulus payment has posted to the account


    • If applicable, input adjustment for non stimulus payment changes following normal procedures.

    • Input a second adjustment (290 .00). Indicate in the remarks that the stimulus payment was previously issued.

    • Send a Letter 76C using paragraphs A, L, O. Include the following in the open paragraph:
      "Our records indicate an economic stimulus payment was previously issued based on your original filing. Additional changes to income will not result in an additional economic stimulus payment. Any additional credit, if eligible, should be included on your 2008 tax return."


    If Form 1040X is submitted with "Stimulus" indicated, but claim is incomplete (i.e. no amounts of additional qualifying income provided, missing signature(s), etc).

    • Claim is considered incomplete. See IRM 21.5.3.4.2 , Tax Decrease or Credit Increase Processing, for rejection procedures.


    If Form 1040X is submitted and personal exemption is not taken and was not taken on original return.

    • Process the claim as though the individual is eligible to claim his/her personal exemption unless information provided clearly indicates otherwise.

    If Form 1040X is submitted reporting Supplemental Social Security Income (SSI).

    Note:

    SSI is not considered qualifying income for purposes of the stimulus payment.

    • Input a TC 290 .00

    • Indicate in the remarks the SSI is not qualifying income for purposes of the stimulus payment.

    • Send a Letter 76C using paragraphs A, L, O. Include the following in the open paragraph:
      "The Supplemental Social Security Income (SSI) is not considered qualifying income for purposes of the economic stimulus payment. Therefore, the Form 1040X you submitted did not change your account"


    If the TC 150 is present and the account does not have a TC 766 with Reference Code 338, 256, and/or 257.

    Note:

    The stimulus payment has not posted to the account.

    Note:

    Stimulus payments are generated systemically based on the taxpayer’s original return. They generate in different cycles based on when the return posts and other factors, such as the last digits of the taxpayer’s TIN. If a stimulus payment will generate at a later date, no adjustment to the stimulus payment is needed.

    • Determine if a stimulus payment will generate based on the original filing.

      Note:

      Prior to processing the Form 1040X, use the ESP calculator to determine if the taxpayer is eligible for a stimulus payment based on the original filing.

      Note:

      Assume the taxpayers cannot be claimed as a dependent by someone else and that the taxpayers are not nonresident aliens (unless information provided clearly indicates otherwise)

    • If the calculator indicates the taxpayer is eligible for the stimulus payment based on the original return (CC RTVUE):
      1. Input adjustment for non stimulus payment changes following normal adjustment procedures

      2. If applicable, send a Letter 76C using paragraphs A, L, O. Include the following in the open paragraph:
      "Our records indicate an economic stimulus payment will be issued based on your original filing. Additional changes to income will not result in an additional economic stimulus payment. Any additional credit, if eligible, should be included on your 2008 tax return."

    • If the calculator indicates the taxpayer is not eligible for the stimulus payment based on the original filing:
      Then add the qualifying income reported on the original return to the qualifying income reported on the Form 1040X.
      If the total qualifying income is less than $3000 then the taxpayer does not qualify for the stimulus payment.
      1. Input a TC 290 .00
      2. Send a Letter 76C using paragraphs A, L, O. Include the following open paragraph:
      "Your combined qualifying income, including the additional income reported on your Form 1040X, is less than $3,000. Therefore, you are not eligible for the economic stimulus payment. A credit, if eligible, can be claimed on your 2008 tax return."

      If the total qualifying income is at least $3000 then the taxpayer does qualify for the stimulus payment .

      Reminder:

      Use the qualifying income and children (if any) reported on the original return information along with the Security Social Security benefits, certain Tier 1 Railroad Retirement benefits, nontaxable combat zone pay, or certain Veteran's benefits income reported on the Form 1040X when figuring the stimulus payment.


      1. Adjust the account to allow the stimulus payment.
      2. Input a TC 290 .00, use RC 096, and source code 2
      3. Input Credit Reference Number (CRN) 256 for $300 ($600 if filing jointly)
      4. If applicable, input Credit Reference Number (CRN) 257 for $300 x # of qualifying children claimed on original return
      5. Indicate in the remarks that taxpayer qualifies for ESP due to SS/RR/VA

      Example:

      Single taxpayer with no children reported $500 wages on the original and no other income. Form 1040X submitted to report additional SS benefits of $10,000. TP is eligible for $300 ESP.
      TC 290 .00
      RC 096, SC 02, HC 0
      Credit Reference Number (CRN) 256 for $300
      Remarks: TP qualifies for ESP due to SS benefits

      Example:

      Married taxpayer with 2 qualifying children reported $500 wages on the original return and no other income. Form 1040X submitted to report additional VA benefits of $10,000. TP is eligible for $600 basic ESP and an additional $600 for the 2 qualifying children ($300 for each child)
      TC 290 .00
      RC 096, SC 02, HC 0
      Credit Reference Number (CRN) 256 for $600
      Credit Reference Number (CRN) 257 for $600
      Remarks: TP qualifies for ESP due to VA benefits

21.6.3.6.7.2  (04-21-2008)
Filing Status Issues

  1. The Economic Stimulus Payment may or may not be affected by filing status or filing status changes; changes include:

    • Martial status changes

    • Separate to Joint filing status change

    • Joint to Separate

21.6.3.6.7.3  (04-21-2008)
Marital Status Change

  1. Issuance of the Economic Stimulus Payment (ESP) was based on the filing status of the 2007 Federal income tax return as originally filed or changed by the IRS during processing. Calls from taxpayers who are divorced or separated may be received requesting separate checks.

    • Separate checks will not be issued.

    • The check is issued in both taxpayer names as shown on the 2007 Federal income tax return.

    • The check is mailed to the address of the first TIN shown on the 2007 Federal income tax return.

    • Disputes surrounding this check are civil matters for which IRS has no jurisdiction.

    • Direct the taxpayer to seek legal counsel as in other civil matters.

21.6.3.6.7.4  (11-12-2010)
Separate to Joint/Joint to Separate

  1. The amendment of individual filing statuses has no bearing on the Economic Stimulus Payment (ESP).

  2. If both taxpayers file original Tax Year (TY) 2007 returns as single, separate or head of household, the ESP is based on the original return for each taxpayer; even if amended joint return is superseding.
    When working a separate to joint amended return and backing out the separate account information, if a stimulus payment has been previously refunded/offset from the separate account:

    • Do not back out the ESP

    • Do not move the ESP refund to the joint account

      Note:

      Manually refund the ESP if the credit was on an account that was in a balance due or zero module and did not result in an overpayment situation.


    When adjusting the primary account do not increase or decrease the stimulus payment based on the joint return.

  3. If originally, the taxpayers file a joint Tax Year (TY) 2007 return and subsequently file as single, separate, or head of household, the ESP is based on the joint return. Subsequent amended returns and/or Forms 1040X, even if superseding, do not change the ESP.

    Reminder:

    Taxpayers cannot amend returns to change filing status from FSC 2 to FSC 3 after the due date of the original return.

21.6.3.6.7.5  (11-14-2008)
Superseding Returns and Subsequent Taxpayer Contact

  1. Taxpayers may disagree with the Economic Stimulus Payment (ESP) they receive based on the fact they filed a superseding return which, if considered when figuring the ESP, would have resulted in a different ESP amount. See IRM 21.6.7.4.10, Superseding Returns , for the definition of a superseding return.

    Caution:

    Do not refigure the ESP when processing the superseding return unless the taxpayer makes subsequent contact. The ESP is always based on the taxpayer's first return. The procedures below apply when the taxpayer contacts the Service after his/her superseding return has been received and/or processed and questions the amount of his/her ESP.

  2. Take the following action if the taxpayer calls on or before December 9, 2008:

    • Advise the taxpayer, if eligible, the Recovery Rebate Credit can be claimed on his/her TY 2008 Federal return.

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

    • Advise the taxpayer of the action taken.

  3. Take the following action if the taxpayer calls after December 9, 2008:

    • Advise the taxpayer, if eligible, the Recovery Rebate Credit can be claimed on his/her TY 2008 Federal return.

      Note:

      The ESP cannot be refunded after December 31, 2008 therefore, the last day to adjust the ESP is December 9, 2008.

21.6.3.6.7.6  (04-21-2008)
ESP and CP 36F Cases

  1. When working a CP 36F case which involves an Economic Stimulus Payment (ESP) use the tables in the following sections. See IRM 21.6.7.4.5, Multiple Uses of Taxpayer Identification Numbers - CP36F (DUPTIN Filing Condition) , for instructions on how to correct the accounts involved.

21.6.3.6.7.6.1  (10-01-2009)
DUPTIN Return Tables

  1. Use the tables below when working a CP 36F which includes an Economic Stimulus Payment (ESP).

    Caution:

    All ESP adjustments must be input no later than December 9, 2008. The ESP cannot be made after December 31, 2008. However, there are instances where the ESP can be reissued, see Exhibit 21.6.3-4, Rules for reissuing ESP checks. If December 10th or later, advise the taxpayer, if eligible, to claim the Recovery Rebate Credit on his/her TY 2008 Federal return.

    DUPTIN return is FS 1/3/4 (Scenario 1) X-Ref Return is FS 2/6 (See IRM 21.6.7.4.5.3

    IF AND THEN
    Reply indicates the common taxpayer filed both returns The X-Ref return, FS 2/6, is the correct filing

    • Back out ESP, if present and not refunded, on FS 1/3/4 return account

    • If ESP has refunded from FS 1/3/4 return account do not back out ESP and do not move ESP refund
    Reply indicates the common taxpayer filed both returns The DUPTIN Return (FS 1/3/4) is the correct filing and was filed prior to the due date

    • Do not adjust ESP on FS 2/6 return account

    • If eligible, ESP will systemically generate on FS 1/3/4 return account and should be allowed
    Reply indicates common taxpayer did not file the FS 2/6 return The FS 2/6 return should not stand

    • Do not adjust ESP on FS 2/6 return account

    • If eligible, ESP will systemically generate on FS 1/3/4 return account and should be allowed
    No reply from common taxpayer  

    • Do not release ESP, if present

    • Do not transfer the payment out of the account. If the ESP is still present in cycle 200852, it will be systemically reversed.


    DUPTIN Return is FS 2/6 (Scenario 2) X-Ref Return is FS 1/3/4 (See IRM 21.6.7.4.5.4)

    IF AND THEN
    Reply indicates the common taxpayer filed both returns FS 2/6 DUPTIN return is correct

    • Back out ESP on FS 1/3/4 return account, if present and not refunded

    • If refunded then do not back out ESP and do not move refund to FS 2/6 return account

    • If eligible, ESP will systemically generate on FS 2/6 return account and should be allowed
    Reply indicates the common taxpayer filed both returns The FS 1/3/4 X-Ref return is the correct filing and was filed prior to the due date

    • Do not adjust ESP on FS 2/6 return account

    • If eligible ESP will systemically generate on FS 1/3/4 return account and should be allowed
    Reply indicates the common taxpayer did not file the FS 1/3/4 return It appears multiple individuals are using the same TIN

    • Follow normal procedures for determining if a refund should be released.

    Reply indicates the common taxpayer did not file the DUPTIN FS 2/6 return The FS 1/3/4 filing should stand

    • Adjust ESP on FS 2/6 return account, if applicable

    • If eligible, ESP will systemically generate on FS 1/3/4 return account and should be allowed


    DUPTIN is FS 2/6 (Scenario 2) X-Ref Return is FS 2/6 (See IRM 21.6.7.4.5.4.1)

    IF AND THEN
    FS on DUPTIN return is 2/6 FS on the X-Ref return is 2/6 and taxpayers on both returns are the same (e.g. John & Mary Birchtree; Mary & John Birchtree)

    • If figures are the same on both returns then back out ESP on DUPTIN return, if present and not refunded

    • If figures are not the same on both returns and combining accounts then back out ESP on DUPTIN return, if present and not refunded

    • In both scenarios, if present and refunded then do not back out ESP and do not move refund
    FS on DUPTIN return is 2/6 FS on the X-Ref return is 2/6 and common taxpayers on both returns but with different spouses. (e.g. John & Mary Birchtree; Mary Birchtree & Bob Greenleaf

    • Follow procedures below based on taxpayer response or lack of response

    No reply from common taxpayer  

    • Do not release ESP, if present

    • Do not transfer the payment out of the account. If the ESP is still present in cycle 200852, it will be systemically reversed.

    Reply indicates common taxpayer did not file one of the returns

    • One of the returns is not valid
      OR

    • If taxpayer has no knowledge of one of the returns and it appears 2 taxpayers are using the same SSN.

    • If first bullet from "AND" column then adjust ESP on the invalid return account, if present and not refunded
      OR

    • If second bullet from "AND" column then follow normal procedures for determining if a refund should be released

21.6.3.6.7.7  (01-05-2009)
ESP and Multiple Taxpayers Using the Same TIN

  1. If a TY 2007 case involving multiple taxpayers using the same Taxpayer Identification Number (TIN) is identified, consider the Economic Stimulus Payment (ESP) issue.

  2. Cases involving multiple taxpayers using the same Taxpayer Identification Number (TIN) are classified as mixed entity or scrambled SSN cases and can involve Identity Theft. See IRM 21.6.2.4.2, Multiple Individuals Using the Same TIN.

    • Take all proper action to reconcile the Mixed Entity Condition using procedures located in IRM 21.6.2.4.3, Mixed Entity Procedures.

    • Take all proper action to reconcile the Mixed Period Condition using procedures located in IRM 21.6.4.4.16.1, Mixed Periods.

    • Take all proper action to reconcile the Scrambled SSN Condition using procedures located in IRM 21.6.2.4.4, Scrambled SSN Case Procedures.

    • Consider all No Merge Conditions and reconcile using procedures located in IRM 21.6.2.4.5, No Merge (NOMRG) Procedures.

    • Review IRM 21.6.3.6.6.10, Decedent Account Issues, if case involves a deceased taxpayer.

21.6.3.6.7.7.1  (11-14-2008)
Adjustment Requirements

  1. To reverse all or part of a posted Economic Stimulus Payment (ESP), use TC 290 .00 and the applicable Credit Reference Number (CRN) 338, CRN 256, and/or CRN 257 with a minus (-) sign. See IRM 21.6.3.6.4.2 for more information.

  2. Adjust the common number owner's account, once identified, to allow the Economic Stimulus Payment (ESP) if on or before December 9, 2008, AND

    • The Common Number (CN) owner posted second to the TY 2007 account under the CN

      Note:

      If the CN owner posted first to the TY 2007 account, under the CN, then the ESP will be figured systemically

      OR

    • The Common Number (CN) owner's original return was processed using an Internal Revenue Service Number (IRSN) and is now being moved to the CN

    Note:

    If it is after December 9, 2008, then advise the taxpayer, if eligible, he/she can claim the Recovery Rebate Credit on his/her 2008 Federal tax return.

  3. An economic stimulus payment will not systemically generate when the original return is processed using an IRSN.

  4. For all Mixed Entity/Period adjustments and Scrambled SSN or Identity Theft case adjustments include annotation "ESP considered" in the remarks of CC ADJ54.

21.6.3.6.7.7.2  (08-13-2008)
ESP - Mixed Entity Procedures

  1. Instructions in this subsection specifically detail the action to take when a return is processed using a valid Social Security Number (SSN), an Economic Stimulus Payment issue is involved, the wrong taxpayer posted first, and instructions are to follow Mixed Entity Procedures. For example when working:

    • Mixed Entity Cases

    • Scrambled SSN Cases and one taxpayer claims Identity Theft and provides documentation

    • Scrambled SSN Cases and one taxpayer provides the "Social Security Administration Social Security Number Verification" printout

  2. Taxpayer A is the taxpayer who correctly used the Taxpayer Identification Number (TIN) and is to remain on the Common Number (CN). Taxpayer B is the taxpayer who incorrectly used the TIN and must be reprocessed to his/her valid TIN, if located, or to an Internal Revenue Service Number (IRSN).

  3. If working a Condition 2 Scrambled SSN case, follow the same procedures used for Mixed Entity Conditions.

21.6.3.6.7.7.2.1  (02-12-2009)
Mixed Entity Procedures - Taxpayer B Posted First

  1. If the Economic Stimulus Payment (ESP), based on Taxpayer B's return is not posted:
    Use the ESP calculator and CC RTVUE to determine if an ESP will systemically generate based on Taxpayer B's information.
    If the calculator indicates an ESP will generate then:

    1. Suspense the case to wait for the systemic ESP to post based on Taxpayer B’s return.

    2. Update activity code to "WAIT4ESP" and use the information located in IRM 21.6.3.6.6.2, Refund Schedule, to figure suspense date.

    3. Once the systemic ESP posts then follow paragraph (2) below.


    If the calculator indicates an ESP will not generate then:

    1. If Taxpayer B requested direct deposit, then input TC 971 AC 850.

    2. Follow normal Mixed Entity procedures to adjust the Common Number (CN) to reflect Taxpayer A's tax data, if not previously resolved.

    3. If Taxpayer A is eligible for the ESP, then adjust the account to allow Taxpayer A's ESP. See paragraph (5) below.

    4. Issue manual refund(s) to Taxpayer A, if applicable.

      Note:

      Issue separate manual refunds if refunding the ESP and a tax refund.

      Caution:

      Credit interest is not allowed on the ESP.

      Caution:

      If it is after December 9, 2008, DO NOT input an adjustment to allow the ESP. The ESP cannot be refunded after December 31, 2008. Advise the taxpayer, if eligible, he/she can claim the Recovery Rebate credit on his/her 2008 Federal income tax return.

    5. Reprocess Taxpayer B's return.

    6. Move Taxpayer B's tax refund, if applicable, to his/her SSN or IRSN.

  2. If the ESP, based on Taxpayer B's return, is posted but not refunded:

    1. Follow normal Mixed Entity procedures to adjust the Common Number (CN) to reflect Taxpayer A's tax data, if not previously resolved.

    2. If Taxpayer B requested direct deposit, then input TC 971 AC 850.

    3. Back out the posted ESP that was computed based on Taxpayer B's return. See paragraph (6) below.

    4. Reprocess Taxpayer B's return. If the return is reprocessed with Computer Condition Code (CCC) "O" , see IRM 21.6.3.6.7.7. 4, Return Posting with Computer Condition Code (CCC) "O" .

    5. If Taxpayer B's return is reprocessed with CCC "O" , then monitor for the return to post. When Taxpayer B's return posts adjust the account to allow Taxpayer B's ESP. See paragraph (5) below.

      Note:

      This only applies if reprocessing the return to a Social Security Number.

    6. If eligible, figure the ESP for Taxpayer A.

    7. Adjust the Common Number (CN) to show the ESP for Taxpayer A. See paragraph (5) below.

    8. Issue manual refund(s) to Taxpayer A, if applicable.

      Note:

      Issue separate manual refunds, if refunding the ESP and a tax refund.

      Caution:

      Credit interest is not allowed on the ESP.

      Caution:

      If it is after December 9, 2008, DO NOT input an adjustment to allow the ESP. The ESP cannot be refunded after December 31, 2008. Advise the taxpayer, if eligible, he/she can claim the Recovery Rebate credit on his/her 2008 Federal income tax return.

  3. If the ESP, based on Taxpayer B's return, is posted and refunded:

    1. Follow normal Mixed Entity procedures to adjust the Common Number (CN) to reflect Taxpayer A's tax data, if not previously resolved.

    2. If Taxpayer B requested direct deposit, then input TC 971 AC 850.

    3. Back out the posted ESP that was computed based on Taxpayer B's return. See paragraph (6) below.

    4. Reprocess Taxpayer B's return with Computer Condition Code (CCC) "O" .

    5. The ESP refund issued to Taxpayer B must be moved to his/her SSN or IRSN.

    6. Once Taxpayer B's return posts, adjust the account to allow the ESP that was previously refunded. See paragraph (5) below.

    7. If eligible, figure the ESP for Taxpayer A.

    8. Adjust the CN to show the ESP for Taxpayer A. See paragraph (5) below.

    9. Issue manual refund(s) to Taxpayer A.

      Note:

      Issue separate manual refunds, if refunding the ESP and a tax refund.

      Caution:

      Credit interest is not allowed on the ESP.

      Caution:

      If it is after December 9, 2008, DO NOT input an adjustment to allow the ESP. The ESP cannot be refunded after December 31, 2008.

  4. If reprocessing a return October 15, 2008, or later then the account transactions must be moved to settle the module. The TC 766 with applicable ESP CRNs must be moved as well. Monitor the account until everything posts. If the module is not settled by cycle 200852, any ESP remaining on a TY 2007 account will be systemically reversed. If this occurs, reinput the ESP to settle the module.

  5. When working these type cases and allowing ESP:

    • Input TC 290 .00

    • Input CRN 338, if applicable

    • Input CRN 256, if applicable

    • Input CRN 257, if applicable

    • Use RC 096 and SC 2

    • Use HC 3 (if not issuing manual refund) OR HC 4 (if issuing manual refund)

    • Remarks: ESP considered/Mixed Entity

  6. When working these type cases and backing out a previously posted ESP:

    • Input TC 290 .00

    • Input CRN 338, if applicable, with a minus sign (-)

    • Input CRN 256, if applicable, with a minus sign (-)

    • Input CRN 257, if applicable, with a minus sign (-)

    • Use RC 096 and SC 0

    • Remarks: ESP backout/Mixed Entity

21.6.3.6.7.7.3  (04-21-2008)
Mixed Period Procedures

  1. Subsequent instructions in this subsection detail the action to take when working ESP issues for tax year 2007 which involve Mixed Period conditions.

21.6.3.6.7.7.3.1  (04-21-2008)
Correct Return Posts First

  1. The correct tax return posts first.

  2. The Notice 1378 is sent to the taxpayer based on the correct return.

  3. The TC 290 .00, Credit Reference Number (CRN) 338/256/257 is for the correct amount of Economic Stimulus Payment (ESP).

  4. Follow normal procedures to release the duplicate filing condition. See IRM 21.6.7.4, Adjusting Individual Tax Accounts Procedures.

21.6.3.6.7.7.3.2  (11-14-2008)
Correct Return Posts Second

  1. The incorrect tax return posts first AND the Economic Stimulus Payment (ESP) does refund or offset.

    1. The taxpayer receives a Notice 1378 based on information from the incorrect return.

    2. The taxpayer might be provided the wrong ESP amount or considered ineligible.

    3. The TC 766 Credit Reference Number (CRN) 338/256/257 and refund/offset is issued based on the incorrect return.

    4. If the taxpayer receives too much ESP or is not entitled to ESP, DO NOT reverse the payment.

    5. If the taxpayer does not receive all the ESP s/he is eligible for and we are correcting the account on or before December 9, 2008, adjust ESP to allow additional amount.

    6. If the taxpayer does not receive all the ESP s/he is eligible for and we are correcting the account after December 9, 2008, do not adjust the ESP. Advise the taxpayer, if eligible, he/she can claim the Recovery Rebate Credit on his/her 2008 Federal tax return.

  2. The incorrect tax return posts first AND the Economic Stimulus Payment (ESP) does not refund or offset.

    1. The taxpayer receives a Notice 1378 based on information from the incorrect return.

    2. The taxpayer might be provided the wrong ESP amount or considered ineligible.

    3. The TC 766 Credit Reference Number (CRN) 338/256/257 is issued based on the incorrect return.

    4. If correcting the account on or before December 9, 2008, adjust to correct the ESP amount.

    5. If correcting the account after December 9, 2008, advise the taxpayer, if eligible, he/she can claim the Recovery Rebate Credit on his/her 2008 Federal tax return.

21.6.3.6.7.7.4  (02-12-2009)
Return Posting with Computer Condition Code (CCC) "O"

  1. If the Economic Stimulus Payment (ESP) posts to the Common Number (CN) and a TC 846 generates for the ESP amount or is offset to another liability, it is directed to the taxpayer which posts first to the CN.

    1. If the return for the taxpayer (a.k.a. Taxpayer B) who posts first to the CN is reinput to a different TIN, that return would generate another ESP refund when processed to that different TIN.

    2. In order to eliminate this erroneous refund, the program for the extract bypasses all accounts containing CCC "O" .

  2. The CCC "O" may also be present if a taxpayer is issued a manual refund before the return posts.

    1. This account is excluded from the ESP extract.

    2. A taxpayer may inquire why he/she did not get the ESP.

    3. Determine if the taxpayer is eligible for the ESP.

    4. If the taxpayer is not eligible, explain why.

    5. If the taxpayer is eligible, then manually compute and input the ESP.

      Note:

      The ESP cannot be made after December 31, 2008. If eligible, the taxpayer can claim the Recovery Rebate Credit on his/her TY 2008 Federal tax return.

21.6.3.6.7.8  (04-18-2011)
TY 2007 CP 36P

  1. Individuals with no tax liability, such as recipients of Social Security, certain Railroad Retirement and certain veterans' benefits, were eligible to receive an Economic Stimulus Payment (ESP) of $300 ($600 if MFJ), if he/she had at least $3000 of qualifying income. These individuals were required to file a TY 2007 return, to report his/her qualifying income, in order to receive the ESP. When these returns were received they were "P" coded in processing.

  2. When a duplicate filing condition occurred and one or both returns involved were "P" coded a CP 36F generated.

  3. CP 36P cases were worked in ANSC.

    Note:

    The first returns received meeting this criterion were not properly "P" coded and therefore generated a CP 36 instead of the appropriate CP 36P. See IRM 21.6.3.6.2.1, Social Security, Veterans, and Other Beneficiaries. If a return (TC 150 or TC 976 document) which should have been "P" coded is identified while working a CP 36 (DUPF) case, reassign the case through CIS immediately to IDRS number ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  4. If an international return (Form 1040PR / Form 1040NR ONLY) is identified while working the CP36P then reassign the case in CIS to employee≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . If the case is not on CIS then mail to:
    IRS/PAMC/International IMF
    2970 Market Street
    BLN 1-D08, 113
    Philadelphia, PA 19106

21.6.3.6.8  (10-01-2009)
Tax Year 2007 Offset Reversal Issues: Injured Spouse/Innocent Spouse/EITC, Etc.

  1. Once the Economic Stimulus Payment (ESP) is used to "pay" (through credit to the account) either tax or non-tax debt AND a subsequent event results in the account being in a credit balance, the refund is then a return of overpaid taxes (or child support or student loan).

  2. The ESP loses its identity because it was used to pay a debt.

  3. Normal interest considerations applies when the overpayment is offset to other tax or non-tax debts. See IRM 21.4.6.5.31, Injured Spouse Allocation/Stimulus Payment and IRM 20.2, Interest.

  4. The following is an example of when the Economic Stimulus Payment (ESP) cannot be reinstated and reissued:

    Example:

    An —A freeze is on an account, created by an amended 200712 return. The amended return is processed, but the —A freeze is not released. The ESP is frozen because of the —A freeze and reversed in cycle 200852. The ESP cannot be reinstated/reissued.

21.6.3.6.9  (08-13-2008)
Address Issues

  1. Taxpayers who have moved since his/her last tax return should receive the Economic Stimulus Payment (ESP) if he/she filed a change of address with the U.S. Postal Service or the IRS.

  2. As of April 15, 2008, in order to provide expedited service to individuals who qualify for ESP and to assist in reducing taxpayer burden, the Commissioner of Internal Revenue Service issued a temporary waiver under certain circumstances, allowing the Service to change the taxpayer’s address with oral statement on a non-account related call. The circumstances are:

    • Taxpayer contact is about the Economic Stimulus Act of 2008, requesting the IRS to make an address change. (See IRM 3.13.5, IMF Account Numbers, for instructions on the input of the address change.)

    • Taxpayer filed a joint return and contacts us about a lost, stolen, not received, or destroyed stimulus payment. Oral authority can be used to initiate research for the stimulus payment check. The requirement to provide a completed Form 3911, Taxpayer Statement Regarding Refund, can be waived.

    Note:

    This is a temporary deviation (effective April 15, 2008 through November 30, 2008) to IRM 21.1.3.20 Oral Statement Authority, only for calls concerning the Economic Stimulus Act of 2008. All other address change requests must be addressed using the current procedures.

21.6.3.6.10  (10-01-2010)
Notice 1378

  1. Notice 1378 was mailed approximately one week prior to the issuance of the Economic Stimulus Payment (ESP), to taxpayers who met the qualifications listed in IRM 21.6.3.6.2, Qualifications. This notice was not a masterfile notice and therefore, is not shown on IDRS. The notice included the number of qualifying children shown on the 2007 tax return, the amount of the payment, a toll free telephone number, and offset and delay information.

  2. In the case of payments which were direct deposited, the notice may have been received after the payment.

  3. The notice was not mailed to authorized representatives and dual notices were not mailed to the spouse.

  4. Taxpayers were advised to keep the notice for reference when completing his/her Tax Year (TY) 2008 Federal income tax return.

  5. Undeliverable Notice 1378 were destroyed in Receipt and Control.

21.6.3.6.11  (10-01-2009)
MSC-AM QRP and ESP

  1. The following procedures are for use EXCLUSIVELY and ONLY in MSC-AM to work Tax Year (TY) 2007 QRP cases which involve the Economic Stimulus Payment (ESP). See IRM 21.5.6.4.26.4, -R Freeze Modules , Memphis Campus Accounts Management Questionable Refund Program Procedures.

  2. Determine if the taxpayer, based on the spreadsheet information, qualifies for none, some, or all of the ESP shown on the module. See IRM 21.6.3.6.2, Qualification, and the Economic Stimulus Payment Worksheet located under IRM Supplements on Servicewide Electronic Research Program (SERP), to figure the applicable ESP amount the taxpayer is entitled to based on the QRP adjustment.

  3. To adjust the ESP:

    • Input TC 29X

    • Input Credit Reference Number (CRN) 338, if applicable, which indicates the amount of ESP associated with Part 1 of the payment

    • Input CRN 256, if applicable, which indicates the amount of ESP associated with Part 2 of the payment

    • Input CRN 257, if applicable, which indicates the amount of ESP associated with Part 3 of the payment

    • RC 096 must be included

    • Include in remarks "ESP considered"

  4. The ESP cannot be made after December 31, 2008. If eligible, the taxpayer can claim the Recovery Rebate Credit on his/her TY 2008 Federal tax return.

21.6.3.6.12  (05-14-2008)
Residents of Puerto Rico, US Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands

  1. Special rules in the law applied to residents of Puerto Rico, US Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. In general, the tax authorities in each of these five U.S. possessions made stimulus payments to eligible residents. The law provided guidelines under which the Treasury Department made payments to each possession for this purpose. People in these areas with questions about the economic stimulus payments should contact his/her local tax authority.

21.6.3.6.12.1  (09-22-2008)
Duplicate Refunds

  1. Individuals residing in the U.S. territories should have received his/her economic stimulus payment from the territory. If a stimulus payment is received from the United States Treasury, the Treasury payment must be returned to the Internal Revenue Service immediately.

  2. If an individual, residing in the U.S. territories, calls or writes asking for guidance in regard to the receipt of or returning a U.S. Treasury stimulus payment then see paragraph (11) of IRM 21.6.3.6.6.5 , Returned Refund Checks.

  3. Take the following action, if an individual, residing in the U.S. territories, calls or writes asking for guidance in regard to the U.S. Treasury stimulus payment and the payment was offset to pay outstanding Federal tax debt, child support, Federal agency non-tax debt or State Income Tax obligation:

    • Reverse the offset

      Note:

      See IRM 21.5.8, Credit Transfers, IRM 21.4.6, Refund Offset

      , IRM 21.4.6.5.13 , TOP/DMF Offset Reversals.

      Note:

      If TOP Offset Reversal (TC 766 with OTN) use RC 87 on the reversal adjustment.

      Exception:

      If you are not authorized or trained to reverse TOP offsets then complete an e-4442 or Form 4442, Referral Form, and fax to your local Accounts Management (AM) campus. If using Desktop Integration (DI)/ Account Management Service (AMS), choose the "ESP TOP/DMF offset" IRM referral on e-4442. See IRM 21.3.5, Taxpayer Inquiry Referrals Form 4442 .

    • Reverse the Economic Stimulus Payment

      Note:

      Input TC 290 .00 and CRN 338, CRN 256, CRN 257 (as applicable) for the ESP amount with a minus sign (-) after the amount. Input RC 096 and appropriate HC.

  4. Use posting delay codes and hold codes to prevent the issuance of erroneous notices and/or erroneous refunds.

21.6.3.6.13  (02-05-2010)
REBATEREV Transcripts

  1. In processing year 2009, a REBATEREV transcript will generate from the Tax Year (TY) 2007 account to ensure the Economic Stimulus Payment (ESP) is not made to the individual after December 31, 2008. A TC 570 posts to the 2007 account and creates a" -R" freeze. Selection criteria includes:

    • A TC 766 with credit reference number (CRN) 338, CRN 256, or CRN 257 posts to the module after the credit was reversed in Cycle 200852
      OR

    • A TC 740/841 credit posts to the module, AND

    • An ESP is in the module, AND

    • The module contains a TC 846 with a "999" julian date, AND

    • The transaction date of the TC 740/841 matches the transaction date of the TC 846 with the "999" julian date

  2. If the ESP refund check was not cashed and the check is more than one year old, a "Limited Payability" (LP) cancellation credit will post to the account as a TC 740 with a blocking series "66666" . Follow the procedures in paragraph (5) below.

  3. Review the REBATEREV transcript:

    1. Determine, if any ESP amount is included in the credit causing the transcript.

    2. If the ESP amount is not included in the credit, release the "R" freeze by inputting a TC 571.

      Caution:

      Be sure to consider all account information that may be affected by the release of the" R" freeze and use normal procedures for those issues.

    3. If the ESP amount is included in the credit, determine the amount of the ESP.

      Reminder:

      If the ESP overpayment originally was applied to pay tax or non-tax debt, and subsequently refunded, treat the ESP part as a regular overpayment and use normal procedures.

    4. Determine if the ESP can be reissued. The ESP can be refunded after December 31, 2008, only in certain circumstances.

  4. The Service can reissue the ESP (TC 740/841) if review of IDRS and the REBATEREV transcript indicates:

    • The ESP was issued on the correct taxpayer's account (TIN) AND

    • The ESP was issued on or before December 31, 2008, AND

    • The RRC was not received for TY 2008

    And the case involves one of the following:

    • A decedent - See IRM 21.6.3.6.6.10, Decedent Account Issues

    • An undelivered refund check - See IRM 21.6.3.6.6.7 , Undelivered Economic Stimulus Payment Checks

    • A lost, stolen, destroyed, or not received refund check - See IRM 21.6.3.6.6.8, Claims

      Reminder:

      A TC 841 can involve an intercepted refund (55555 in DLN blocking series), a returned refund check (99999 in DLN blocking series), or a refund trace (88888 or 88899 in DLN blocking series). Intercepted refunds cannot be reissued and the ESP must be reversed.

    To reissue the ESP input a TC 290 for zero (.00).

    Caution:

    Do not reissue the ESP if the RRC on the taxpayer's TY 2008 account HAS been adjusted to include the ESP that would have been payable based on the 2007 return.

  5. In all other cases, the ESP amount must be reversed. Input TC 290 .00 and Credit Reference Number (CRN) 338, CRN 256, CRN 257 (as applicable) for the ESP amount with a minus sign (-) after the amount. Use SC 2, RC 093 ,blocking series 05 (or 00 if the original return is present), and NSD or SD, as appropriate. In Remarks, note: "Reverse ESP on account after 12-31-2008" .

  6. If the ESP is reversed review the TY 2008 account to determine if the taxpayer is entitled to an increased Recovery Rebate Credit (RRC) on TY 2008. If the taxpayer is eligible for an increased RRC on the TY 2008 return, then adjust the TY 2008 to allow/increase the RRC as applicable. See IRM 21.6.3.4.2.12, Recovery Rebate Credit . Send a "C" letter with this statement in the open paragraph: "We have corrected your 2008 account to allow/increase the Recovery Rebate Credit. If this credit results in an overpayment on your 2008 account, we will send you a check or notify you if the overpayment was applied to another tax liability." Hold the adjustment notice.

    Note:

    If the taxpayer is NOT eligible for an increased RRC on his/her 2008 return, it is not necessary to contact the taxpayer after reversing the ESP on the 2007 account.

    Note:

    If the taxpayer has not yet filed the 2008 return and we reversed the TY 2007 ESP, advise the taxpayer that he/she should claim the recovery rebate credit, if eligible, when filing his/her 2008 tax return.

  7. If the taxpayer contacts the Service by telephone, give the explanation above.

  8. If the taxpayer is eligible for the RRC and there is an open TC 420 (-L freeze) on the account , send the taxpayer a letter advising them we removed the ESP that was not refunded before December 31, 2008 and to file a claim for the RRC on their 2008 return

Exhibit 21.6.3-1 
TIN REQUIREMENTS FOR EXEMPTIONS AND CREDITS

Error Allow with Valid SSN Allow with Valid ITIN Allow with Valid ATIN
Exemption
Primary TIN Yes Yes N/A
Secondary TIN Yes Yes N/A
Dependent TIN Yes Yes Yes
Earned Income Tax Credit
Note: The SSNs for the primary, secondary (if a joint return), and the EITC qualifying child(ren) ALL must be valid before EITC can be allowed.
Primary TIN Yes No No
Secondary TIN Yes No No
EITC qualifying child(ren) TIN Yes No No
Child and Dependent Care Expense
Child care provider TIN Form 2441 Yes Yes Yes
Child's TIN- Form 2441 Yes Yes Yes
Other Credits
Child Tax Credit Yes Yes Yes
Lifetime Learning Credit Yes Yes Yes
Hope Scholarship Credit Yes Yes Yes
Recovery Rebate Credit Yes No ** See Exception below No

Exception:

The Heroes Earnings Assistance and Relief tax Act of 2008 provides the identification number requirement for both spouses and children to have valid SSNs does not apply in the case of a joint return where at least one spouse is a member of the Armed Forces of the United States at any time during the taxable year.

Exhibit 21.6.3-2 
Eligibility for Economic Stimulus Payment

If the taxpayer's net income tax liability* is: And the taxpayer's qualifying income** is at least $3000 then: And the taxpayer's qualifying income** is less than $3000 then:
More than zero The taxpayer's stimulus payment is his/her net income tax liability up to $600 ($1200 for joint filers) but not less than $300 ($600 for joint filers)

Exception:

If the taxpayer's qualifying income is less than $3000 and he/she does not meet the gross income test***, then his/her stimulus payment will be his/her net income tax liability which can be less than $300 ($600 for joint filers)

Zero Taxpayer's stimulus payment will be $300 ($600 for joint filers) Taxpayer will not receive a stimulus payment

*Net income tax liability is tax before credits, including the alternative minimum tax, less all nonrefundable credits except for the allowable child tax credit.

**Qualifying Income is earned income and includes social security benefits, Tier 1 railroad retirement benefits, nontaxable combat zone pay and certain VA benefits.

***A person meets the gross income test if your gross income is more than $8,750 if single or married filing a separate return, $17,500 if married filing joint return, $11,250 if head of household, or $14,100 if qualifying widow(er).

Exhibit 21.6.3-3 
Eligibility For Additional Stimulus Payment for Qualifying Children

If the taxpayer's net income tax liability* is: And the taxpayer's qualifying income** is at least $3000 then: And the taxpayer's qualifying income** is less than $3000 then:
More than zero and he/she meets the gross income test*** Yes Yes
More than zero and he/she does not meet the gross income test*** Yes No
Zero Yes NO

*Net income tax liability is tax before credits, including the alternative minimum tax, less all nonrefundable credits except for the allowable child tax credit.

**Qualifying Income is earned income and includes social security benefits, Tier 1 railroad retirement benefits, nontaxable combat zone pay, and certain VA benefits.

***A person meets the gross income test if your gross income is more than $8,750 if single or married filing a separate return, $17,500 if married filing joint return, $11,250 if head of household, or $14,100 if qualifying widow(er).

Exhibit 21.6.3-4 
Rules For Reissuing ESP Checks

The ESP check can be reissued if ALL of the following conditions are met:

• The ESP check was issued on or before December 31, 2008

• The ESP check was issued on the taxpayer's account (TIN)

• The RRC was not received for the full amount allowed as ESP

The table below provides specific scenarios but this is not an exclusive list of the scenarios when a replacement check may be issued..

IF THEN
The ESP check was not issued prior to December 31, 2008 (e.g. freeze code held the credit, etc.) The ESP cannot be issued
The ESP check was issued in the wrong taxpayer's name (e.g. John Doe's ESP check was issued in Mary Doe's name) but was issued under John's TIN The ESP can be reissued because the ESP has been made to the taxpayer on or before December 31 ,2008. However, an ESP replacement check can only be issued to the extent the full amount of ESP is not allowed as RRC for 2008
The ESP was direct deposited into the wrong bank account due to IRS error The ESP can be reissued. A replacement check can be issued to the taxpayer who we intended to pay in the first instance.
A surviving spouse/executor requests that an ESP check be reissued in the name of the person legally entitled to the check. The ESP can be reissued in the name of the person legally entitled to the check

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