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Part 21. Customer Account Services

Chapter 6. Individual Tax Returns

Section 7. Adjusting Individual Tax Accounts

21.6.7  Adjusting Individual Tax Accounts

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21.6.7.1  (08-21-2008)
Adjusting Individual Tax Accounts Overview

  1. Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See IRM 21.1.3,Operational Guidelines Overview. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1,Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 11.3.1.10,Facsimile Transmission of Tax Information, must be reviewed prior to faxing confidential information to the taxpayer.

  2. This section presents information on adjusting individual tax accounts. There are various reasons a tax account may need to be adjusted.

  3. If the taxpayer's issue can't be resolved in the same day AND Taxpayer Advocate Service (TAS) referral criteria is identified, it may be necessary to prepare and forward Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order) (ATAO), to the Local Taxpayer Advocate per IRM 13, Taxpayer Advocate Service. See IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, for complete information. The following require TAS referral:

    • It appears there may be a hardship situation

    • The taxpayer requests a referral to TAS

    • The contact meets TAS criteria per IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines

      Note:

      Form 911 is on the Account Management Service (AMS) system for on-line completion.

21.6.7.2  (10-01-2002)
What Are Adjustments to Individual Tax Accounts?

  1. Adjustments to individual tax accounts are changes required because of the following:

    • An amended or duplicate return filed

    • Taxpayer call

    • Taxpayer written request

    • Face-to-face request

21.6.7.3  (10-01-2006)
Individual Tax Accounts Research

  1. To adjust individual tax accounts you may have to research the following:

    • Source and Reason Codes — Computer Paragraph (CP) 21/22

    • Amended Return — No Original – CP 29

    • Post Refund Case — Form 1040X

    • Duplicate or Amended Return — CP 36

    • Superseding Return

    • State Tax Return Posts to Account

    • Presidential Election Campaign Fund

    • Return for Each Form W—2

    • True Duplicate

    • Duplicate or Amended — Transaction Code (TC) 420–CP 93

    • Duplicate Assessment — Document (Doc) Code 51 – CP 35/35A

    • Net Operating Loss (NOL) — Carryforward

    • Original Return — IRS Error Delays Refund – CP 33

  2. See IRM 21.5.2.3, Adjustment Guidelines - Research, for additional research information.

21.6.7.4  (10-01-2002)
Adjusting Individual Tax Accounts Procedures

  1. This section explains the procedures for adjusting individual tax accounts.

21.6.7.4.1  (10-01-2002)
Source and Reason Codes — CP 21/22 Notices

  1. A taxpayer is issued a notice of adjustment when the IRS takes an action on the taxpayer's tax account. The notice, Computer Paragraph (CP) 21 or CP 22, is sent with an explanation of the action. The explanation is specified on the notice by use of one Source Code (SC) and one to three Reason Codes (RC). The SC and RC advise the taxpayer of the tax return account action taken.

    Note:

    A CP 21/22 is not issued if the account balance is zero and an adjustment (CC ADJ54) for TC 290.00 is input with ONLY Item Reference Numbers (IRNs) changing numerical data - NOT TAX (e.g., IRN 886, 887, 888, 889, 892, 895, 896, etc.).


    Caution : For the TC 290 .00 conditions related in the previous NOTE, a CP 21/22 WILL be issued if the account was in balance due status before the adjustment was input. If the input operator chooses NOT to send a notice to the taxpayer, Hold Code 3 must be included in the adjustment.

21.6.7.4.1.1  (10-01-2002)
Action for CC ADJ54

  1. Enter a SC and at least one RC on Command Code (CC) ADJ54 when inputting:

    1. TC 29X for an amount with or without secondary transactions and/or credit/item reference numbers.

    2. TC 290 for zero with secondary transactions and/or credit/item reference numbers.

    3. TC 290 to disallow a claim.
      Reminder: When disallowing a claim or releasing a freeze it is NOT necessary to enter a SC; SC 0 generates.

21.6.7.4.1.2  (10-01-2006)
Source Code (SC)

  1. Source Code selection designates which opening statement will be used on a taxpayer’s notice.

  2. The valid range for the SC is 1 through 9.

  3. When the taxpayer's filing requirement code is "7," a SC marked with two asterisks (**) prints in Spanish.

  4. Use the SC with the highest numeric code if more than one SC applies.

  5. Application of SC(s):

    If Then
    Releasing a freeze on the account, disallowing a claim or inputting RC 054, RC 093 or RC 096 (for tax year 2000), RC 097, or RC 098 SC 0 generates.
    Adjustment is exactly what the taxpayer requests on a claim or duplicate/amended return

    Note:

    SC 2 may indicate an adjustment was made based on an internally generated notice. SC 2 is the default if an incorrect or invalid SC was input.

    		Input SC 1.
    CP 09/27 Input SC 1.
    Taxpayer replies to a prior notice (e.g., math error notice) and SC 3 or 4 do not apply. Input SC 2.
    Adjustment is due to new legislation which changes the law too late to update current tax forms or makes an issue effective retroactively Input SC 3.
    Adjustment is the result of an error by an IRS employee Input SC 4.
    Adjustment is a carryback claim Do not use a SC; SC 5 generates.
    Adjustment reflects a math error made by the taxpayer on a claim or duplicate/amended return Input SC 6.
    Reminder : DO NOT use SC 6 for adjustments based on a taxpayer's reply to a previous math error notice.
    Adjustment is an offset reversal, TC 897, or TC 766 with an Offset Trace Number (OTN)

    Note:

    SC 7 may only be used with RCs 086, 087, 089, 090 and 091.

    		 Input SC 7.
    Adjustment results from taxpayer contact with the Taxpayer Advocate Service (TAS) Input SC 8.
    Adjustment is made by the Underreporter function Input SC 9.

  6. For Source Code notice verbiage, see Document 6209, Section 8, Subsection 16, (1) IMF Source Codes.

21.6.7.4.1.3  (10-01-2008)
Reason Code (RC)

  1. Reason Code selection designates the end of the statement that will be printed on the taxpayer's notice.

    1. The RC should describe the area(s) of the return affected by the adjustment action.

    2. Use the RC(s) which best describes the cause of the adjustment.

    3. A RC is not required for a ripple effect change.

    Example:

    The taxpayer provides an additional Form W–2 which changes wages and withholding. A change to EITC results. Use RC 007, wages, and RC 051, withholding; the EITC change will not require RC 053.

    Caution:

    If any section of the return is changed as a result of the additional Form W–2, causing a difference in the taxpayer's figures, the taxpayer must be notified.

  2. The valid range for the RC is 001 through 220.

  3. A maximum of three RCs may be used. If more than three are necessary, use the three which most clearly explain the reason for the adjustment.

  4. For information regarding Economic Stimulus Payment reason codes, see IRM 21.6.3.6.4.1, Economic Stimulus Payment Reason Codes.

  5. See Exhibit 21.6.7–1 for RC language. RCs are marked with:

    1. One asterisk (*) for international accounts (PSC only).

    2. Two asterisks (**) to print in Spanish when the taxpayer's filing requirement code is "7" ; RC 042 only prints in Spanish.

    3. Three asterisks (***) when reversing offsets through the Treasury Offset Program.

      Note:

      RCs 086, 087, 089, 090 and 091 are the only RCs permitted to be used with SC 7; no other SC may be used.

21.6.7.4.1.4  (02-12-2004)
Penalty Reason Code

  1. The penalty RC does not print on the Individual Master File (IMF) taxpayer's notice.

  2. Only enter a penalty RC if the adjustment includes a penalty change.

  3. The penalty RC is input in the fourth RC position on the CC ADJ54 format. Use the regular RC 062 or RC 065 (071 for Spanish) in the first, second, or third position.

  4. See IRM 20.1, Penalty Handbook for complete penalty relief criteria, valid range of penalty RCs, and an exhibit for penalty RC language. Penalty RCs are explained in Document 6209, Chapter 8, Section 16(3), Penalty Reason Codes.

21.6.7.4.2  (01-17-2008)
Amended Return — No Original — CP 29 (Amended Return Posts to an Account With No Original Return Present)

  1. When an amended return posts on an account with no original return present, Master File generates:

    • A CP 29

    • An "E–" freeze on the account. See IRM 21.5.6.4.7, E– Freeze

  2. A CP 29 notice generates as follows:

    1. Fifteen (15) cycles after the Return Due Date (RDD), when an amended/"G" coded return (TC 977) or a duplicate return (TC 976) posts to an account with no original return (TC 150).

    2. Four (4) cycles after the return due date when an amended return is blocked in 93.

  3. CP 29 notices are forwarded to the Files function. The returns are pulled, batched, and routed to Accounts Management (AM) for assignment.

21.6.7.4.2.1  (10-01-2008)
Analyzing CP 29 Notices

  1. Analyze the return generating the CP 29 notice. Cases may be resolved at this level. Check the Form(s) W–2.

    If the Form(s) W–2 Then
    For the primary spouse is a copy and the filing status is joint The original return may be filed under the other spouse's Taxpayer Identification Number (TIN).
    Have a different year than the return Refer to IRM 21.6.4.4.16, Tax Period Changes.
    Is an original (Copy B of W–2) The amended return may be an original return prepared by taxpayer.

  2. Check for taxpayer notes or explanations.

    If the return causing the CP 29 Then
    Indicates "Injured Spouse" or the CP 29 indicates "Debtor Master File Case (DMFC)" Work according to the procedures in IRM 21.4.6, Refund Offset.
    Is a tentative return (filed prior to due date and lacking sufficient information to process as an original return)

    1. Process as an application for an extension to file.

    2. Photocopy the return and correspondence indicating an extension request.

    3. Write "photocopy" on the copy.

    4. Route the copy to Taxpayer Relations with instructions to process as an extension request.

    5. Input TC 971, Action Code 002, to release the "E-" freeze.

    6. Enter "extension request" in the CC FRM 77 remarks area.

    7. Send the return back to files.

  3. If the original return was filed with International file location codes 66 or 98 (first 2 digits of Document Locator Number (DLN)):

    1. Route the case to the Philadelphia Campus (PSC).

    2. Recharge the amended return to PSC. See IRM 21.2.4.3.7, Transmitting Cases to Another Campus and IRM 21.5.1.4.9, Recharging and Re-filing Documents, for additional information.

    3. Send an 86C Letter to the taxpayer.

21.6.7.4.2.2  (10-01-2009)
Locate an Original Return (TC 150)

  1. Request additional information via Integrated Data Retrieval System (IDRS) to locate the taxpayer's original return. Check the following:

    • CC FFINQ for returns in processing. The return DLN is displayed on IDRS

    • CCs SUMRY, TRDBV, REINF, RTVUE, IMFOL, and ENMOD to research for any current year information under the CP 29 TIN (valid or invalid)

    • CCs NAMES, INOLE and ATINQ for any other TINs (valid and invalid) under all names pertaining to the CP 29 case

    • CC ERINV for unprocessed returns in the reject area. Follow local procedures for completing open reject cases

    • CCs IMFOL for a spouse's TIN (valid and invalid)

    • CCs IMFOL for the posting of TC 150, 977, or 976 with a current list year DLN on any TIN located in the above steps

    • CCs IMFOL for a complete record of the entity and tax periods for the CP 29 TIN when the above steps show no data available

    • CC UPTIN for an unpostable return with a current list year. Follow unpostable procedures if original return is unpostable

  2. If there are payments (credits) on the module, and a TC 150 cannot be located:

    1. Request the payment posting document(s).

    2. Review for any indication of another name or TIN.

      Exception:

      If the payment is an ISRP or Lockbox payment and you have access to the Remittance Transaction Research (RTR) system, research RTR for the posting document and notes indicating changes or deletions. See IRM 21.5.7.3.1, Remittance Transaction Research (RTR) System, for additional information.

    Note:

    During filing season, a return other than "refund" may be delayed in processing. If TC 610 (remittance with return) posted, the return may be in-house awaiting processing. See IRM 21.2.4.3.41.1 , AM12 Resolution Transcripts with $100,000 or More Credit Balancesfor additional information on TC 610 remittances.

  3. If you need more information to process the CP 29, contact the taxpayer. Take the following action to correspond.

    1. Photocopy the return.

    2. Write "Copy" on the photocopy.

      Caution:

      Do not send a CP 29 to the taxpayer.

    3. Prepare Form 8009, We Need More Information to Process Your Amended Return , or the appropriate C-Letter to send the photocopy to the taxpayer.

      Note:

      If using a copy of a numbered return to respond to a taxpayer inquiry, or sending a copy back for any reason, make sure the Document Locator Number (DLN) is not visible.

    4. Request all needed information.

    5. Enclose the appropriate schedules or forms.

    6. Enclose a return envelope.

    7. Suspend the case for 40 days; 70 days for overseas taxpayers.

      Caution:

      Extreme care must be taken to ensure that only the material relative to the taxpayer(s) to which the correspondence is addressed is enclosed in the envelope. See IRM 21.3.3.4.26, Breaches of Personally Identifiable Information (PII) Caused by Manual Stuffing Errors, for additional information.

  4. If taxpayer does not respond or submits an incomplete response:

    1. Perfect the document for input as an original.

    2. Attach a copy of the C-Letter, if available.

    3. Prepare for reprocessing following procedures in IRM 21.6.7.4.2.5, TC 150 Not Located - Duplicate or Amended Return Obtained..

21.6.7.4.2.3  (10-01-2006)
TC 150 — Different Year or Different SSN

  1. If you identify a Different Year or Different Social Security Number (SSN) case while responding to inquiries on the AM toll-free telephone line, prepare Form 4442, Inquiry Referral, and route it to the Campus AM Account Paper function at the campus where the CP 29 was generated.

    Exception:

    If there is an open control on the account, refer Form 4442 to the employee who has the open control. If no open control and a CP 36 was not generated, then route Form 4442 to the AM Account Paper function at the campus that processed the original return.

  2. If the original return is posted on a different year, take the following action:

    If the original return is located on a different year and the duplicate or amended return posted to Then
    The correct period

    1. Request the original return using CC ESTAB.

    2. Back out the original return from the incorrect tax period. Follow procedures in IRM 21.6.4.4.16, Tax Period Changes.

    3. Compare the returns for any adjustments.

    4. Correct the posted account to include any changes on the duplicate or amended return.

    5. Edit the original return for reprocessing to the correct tax period, prepare Form 3893, Re-Entry Document Control, and forward for processing.

    An incorrect period

    1. Transfer any misapplied payments to the correct tax period.

    2. Adjust the correct tax period to include any changes on the duplicate or amended return.

    3. Input TC 971, Action Code 002, on the incorrect tax year to cross-reference the correct tax period.

  3. If the original return is found on another TIN, determine if the accounts can be resequenced. Follow procedures in IRM 21.6.2.4.1, Resequencing Accounts.

    If the accounts Then
    CAN be resequenced

    1. Follow the instructions in IRM 21.6.2.4.1, Resequencing Accounts.

    2. Work as a duplicate filing condition after the account has resequenced.

    CANNOT be resequenced

    1. Compare the duplicate or amended return with the posted TC 150.

    2. Transfer any misapplied payments to the correct SSN. Follow procedures in IRM 21.5.8, Credit Transfers.

    3. Adjust the posted tax module to include any changes on the duplicate or amended return, if necessary.

    4. Input TC 971, Action Code 002, on the incorrect TIN to cross-reference the correct TIN; and release the "E–" freeze.

  4. When working filing status changes involving a joint account, follow procedures in IRM 21.6.1, Filing Status and Exemption Adjustments.

21.6.7.4.2.4  (10-01-2002)
TC 150 — Original Return Not Obtained

  1. If a TC 150 is located and there is no reason to request the original return for verification, make the adjustment using the appropriate blocking series.

    If the original return is requested but not received and Then
    The return is charged out to another area Contact the area for the return or a complete copy.
    The return is not charged out to another area Request the return a second time.
    A second request does not secure the return

    1. Use "Special Search" procedures.

    2. Send a 418C Letter to the taxpayer.
      Note : Exhaust all in-house means to secure the return before contacting the taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers.

    4. If no reply to the 418C Letter, follow procedures in IRM 21.5.3, General Claims Procedures.

21.6.7.4.2.5  (10-01-2009)
TC 150 Not Located — Duplicate or Amended Return Obtained

  1. If the duplicate or amended return is received and is intended to be an original return:

    1. Determine if the return is complete and processable.

    2. Telephone or correspond for missing forms, schedules, or signatures.

    3. Suspend for 40 days; 70 days for overseas taxpayers.

    4. If no correspondence was necessary (return was complete and processable as filed) or if there is no reply to correspondence, process the return as follows:

    If Then
    The return is a Form 1040

    1. Circle out in red, all "G" coded marks and/or notations on the return (e.g., "Duplicate," "Copy," "Amended," etc.).

    2. Retain the original DLN.

    3. Enter Computer Condition Code (CCC) "3" on refund returns, when the signature and/or Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, is missing.

      Reminder:

      CCC "3" generates a TC 570 and a "–R" freeze on the account when the TC 150 posts. The overpayment will not refund until the freeze is released.

      Note:

      Computer Condition Codes (CCCs) are entered in the upper portion of the filing status area of Form 1040/A, and above the dotted line of the Presidential Election Campaign Fund (PECF) area on Form 1040EZ. See IRM Exhibit 3.11.3–2, Computer Condition Codes, for additional information.

    4. Enter CCC "U" when there are missing forms or schedules needed to support the return entries.

    5. Prepare Form 3893, Re-Entry Document Control, to reprocess the return as the original and forward for processing.

    6. Input TC 971 Action Code (AC) 004 to indicate the duplicate return is being reprocessed as the original (to post as TC 150) and release the E– freeze

    The return is a Form 1040X

    1. Circle out, in red, the word "Amended" and the "X" in the return title.

    2. Prepare a blank Form 1040 or conversion Form 6114 with all relevant tax data.

    3. Reprocess the return as an original. Refer to IRM 21.5.2.4.23, Reprocessing Returns/Documents.

    4. Input TC 971 Action Code (AC) 004 to indicate the amended return is being reprocessed as the original (to post as TC 150) which will release the E– freeze.

    5. Enter CCC "U" when forms or schedules, to support the return entries, are missing.

  2. In cases where the TC 971, Action Code 010, created an "E–" freeze because no TC 150 posted, research CC FFINQ:

    If Then
    Original return is in processing Monitor IDRS until the TC 150 posts.
    TC 610 is posted and there is no information on CC FFINQ, the return may be a balance due e-filed return that has not posted, or the original return due date has not expired Push code the return with your IDRS number. Follow procedures in IRM 21.5.1.4.4.1, TC 930 Push Codes or IRM 21.5.1.5.7 , CIS Push Codes.
    None of the above apply and Form 1040X is for the current year

    1. "G" code the Form 1040X.

    2. Send to Numbering for processing.
      Note: This action allows the "E–" freeze to remain on the module awaiting TC 150 posting.

    None of the above apply and Form 1040X is for a prior year Follow procedures under (1) above.

21.6.7.4.2.6  (10-01-2006)
TC 150 Not Located — Duplicate/Amended Return Not Obtained

  1. When there is no TC 150 and the duplicate or amended return cannot be obtained, take the following action:

    If Then
    TC 971 created the TC 977

    1. Correspond with the taxpayer using a 418C Letter to request copies of the original and duplicate amended return.

    2. Suspend case for 40 days; 70 days for overseas taxpayers.
    TC 971 did not create the TC 977

    1. Request TC 976/977 DLN.

    2. If unable to obtain the duplicate or amended return, use "Special Search" procedures.

    3. Send a 418C Letter to the taxpayer to request copies of the original and duplicate amended return.

      Note:

      Do not send 418C Letter if return is charged out to another area. Contact the area for the return or a complete copy.

    4. Suspend case for 40 days; 70 days for overseas taxpayers.

  2. If there is no reply to the correspondence and you have not received the duplicate or amended return take the following action:

    If unable to obtain the return or a copy and Then
    No credits posted on the account

    1. Input a dummy return.

    2. Use the DLN of the TC 976 or 977 to post a TC 150 and release the freeze.
    Credits posted on the account

    1. Input a dummy return, with a tax liability equal to the credits.

    2. Use the DLN of the TC 976 or 977.
    TC 971 created the TC 977

    1. Input a dummy return with a new DLN to post a TC 150 and release the freeze.

    2. Input TC 971, Action Code 004, to release the E– freeze and prevent the issuance of an erroneous "–A" freeze.

    Caution:

    This procedure is used only if insufficient information is available to process the return as an original. This action satisfies the filing requirement for the module. Ensure the return was not intended for another module.

21.6.7.4.3  (10-02-2008)
Post Refund Case — Form 1040X

  1. Forms 1040X, for which refunds are issued by Document Perfection, are received in the Adjustment function when a TC 150 is not present on the module.

    1. The Form 1040X is processed with Document Code 54.

    2. The adjustment resequences for 10 cycles.

    3. The adjustment then unposts if no TC 150 is present.

    4. A TC 977 and CP 29 notice is generated.

    5. The CP 29 is sent to Accounts Management.

  2. Contact the Unpostable function if Form 1040X and the deleted adjustment document are not received in Customer Account Services (CAS) :Accounts Management (AM).

  3. Review the Form 1040X and the CP 29 to determine the correct TIN or tax period. Follow CP 29 research procedures in this section.

  4. Take the following action to resolve the case:

    1. Math verify the Form 1040X.

    2. Obtain the original return, as necessary.

    3. Determine if an incorrect refund was issued due to a math error or erroneous refund. See IRM 21.5.4.4, Math Error Procedures Processing.

    4. Input the adjustment to the correct account.

    5. Use the appropriate blocking series, RC and SC.

21.6.7.4.4  (10-02-2008)
Duplicate or Amended Returns — CP 36 (Duplicate Filing Condition)

  1. A duplicate filing condition (TC 976/977) occurs when a duplicate or amended return posts to an account with an original return (TC 150) posted. Consider all of the following when working duplicate filings:

    • Computer Paragraph (CP) 36, Duplicate Filing Condition

    • Follow procedures in IRM 21.6.3.6.7, Amended Returns/Superseding Returns/Subsequent Adjustments and IRM 21.6.3.6.7.8 , TY 2007 CP 36P, for cases involving Economic Stimulus Payments.

    • Superseding returns

    • Return filed for each Form W–2

    • True duplicate returns

    • CP 29, Duplicate/Amended Return Posts to an Account with No Original Return Present

    • Penalty and interest

    • Math Errors. Follow procedures in IRM 21.5.4.4, Math Error Procedures Processing.

  2. When a duplicate filing occurs, master file generates:

    • A CP 36, Duplicate Filing Condition (associated with the amended or duplicate return)

      Note:

      When the original return (TC 150) posts after multiple amended/duplicate returns, only one CP 36 Notice will generate based on the last TC 976/977. You must consider all posted TC 976/977's when adjusting the account.

    • A "—A" freeze on the account

    • A CP 36A to pull the original return

    Note:

    Local servicing campus procedures may provide for pulling only the duplicate or amended return.

  3. CP 36S and CP 36B notices generate after a master file comparison of the TC 150 and the TC 976.

    1. The generation criteria is a mismatch of the filing status, address, and the secondary SSN.

    2. The CP 36S is associated with the duplicate or amended return.

    3. The CP 36B pulls the original return.

21.6.7.4.4.1  (05-07-2007)
CP 36 — Control

  1. Control the duplicate filing case on IDRS and assign for review. The control base remains open until:

    • The "–A" freeze is released, or

    • The case is referred to the appropriate area

  2. The release of the "–A" freeze allows the computer to generate a refund or offset of any credits.

    Caution:

    If CP 36 is on invalid SSN, DO NOT release a refund unless the taxpayer responded to CP 54B.

  3. Input CC ESTAB to request the amended or duplicate return if not received with the CP 36 unless the TC 976 generated as a result of TC 971 AC 141 (automated Substitute For Return (SFR)) or the module had history item "REPRXAS150" .

    If Then
    TC 971 AC 141 or history item "REPRXAS150" is present Release the –A freeze.
    The return is charged out to another area Contact the area to determine the actions to be taken.
    Unable to secure the return

    1. Follow up with a "special search" request.

    2. Send a 418C Letter to the taxpayer.

      Note:

      Exhaust all in-house means to secure the return before contacting taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers.
    No reply to the Letter 418C Assess the amount of the payment received with the amended return.
    Unable to determine the adjustment needed and the taxpayer did not submit a payment Release the "–A" freeze. Caution: If CP 36 is on invalid SSN, DO NOT release refund unless the taxpayer responded to CP 54B ; use Hold Code (HC) 4.

21.6.7.4.4.2  (02-20-2003)
Unnumbered Forms 1040X

  1. Unnumbered Forms 1040X meeting Adjustment Function Criteria (AFC) may be directly routed or hand carried to Accounts Management. See IRM 3.11.6, DP Tax Adjustments - SP Returns and Document Analysis.

  2. Code and Edit function inputs a TC 971, Action Code 010 on these cases.

    • A TC 977, with Document Code 77, generates indicating a return is "in house"

    • The appropriate freeze code also generates

  3. Process these returns in the same manner as duplicate or amended returns received with a CP 36 or 29.

  4. Input the appropriate TC 971 code when rerouting misdirected Forms 1040X. See Document 6209, Chapter 8, Section 22, TC 971 Action Codes.

21.6.7.4.4.3  (10-01-2005)
Preliminary Verification Procedures

  1. Compare the duplicate or amended return with the CP 36 notice or TXMOD. Note any discrepancies in the:

    • Document Locator Number (DLN)

    • Year

    • Name

    • TIN

    • Address

    • Filing Status

  2. Review the case for any missing forms and schedules. Follow procedures in IRM 21.5.3.4, General Claims Procedures, for numbered and unnumbered claims when information is missing.

21.6.7.4.4.4  (12-22-2008)
Entity Verification

  1. Compare the Forms 1040X entity with the posted account information.

    If Then
    Entity does not match Search for any other TIN or names entered on the return.
    Another TIN is found

    1. Use CC NAMES, INOLE, or ATINQ to locate the correct account.

    2. Request IMFOL for any newly found TIN.

  2. Compare the address, filing status and exemptions. Follow procedures in IRM 3.13.5.14.1, Updating Address Records and IRM 21.6.1, Filing Status and Exemption Adjustments , for Entity corrections.

  3. If a new address is shown on Form 1040X and CC ENMOD does not reflect the change, then update the entity. Form 1040X instructions advise the taxpayer if they check the "Yes" box or fail to check either box on Form 1040X, Line A, we will update their address in our system to that shown on the Form 1040X. Any refund or correspondence will be sent to the new address. If the taxpayer checks the "No" box, we will retain the address currently in our system and any refund or correspondence will be sent to that address.

    Note:

    Do not update the address if an address change has posted after Form 1040X was filed.

21.6.7.4.4.5  (10-01-2002)
Income, Tax, Deductions, and Credits Verification

  1. Follow procedures in IRM 21.5.3.4.5, Math and Master File Verification of Claims and Amended Returns.

21.6.7.4.5  (06-26-2009)
Multiple Uses of Taxpayer Identification Numbers - CP 36F (DUPTIN Filing Condition)
(Worked in Andover and Brookhaven Accounts Management Only).

  1. A multiple (DUPTIN) filing condition occurs when the same TIN (Taxpayer Identification Number) is used as a primary taxpayer on one return and a secondary taxpayer on another return for the same tax year.

  2. When a DUPTIN filing condition occurs, master file will post the second return and:

    • Generate a CP 36F / TRNS36F notice that goes to Files for paper return(s) to be pulled. CP 36F's are displayed on Servicewide Notice Information Program (SNIP) as TRNS36F.

    • Freeze any overpayment on the second return with a TC 570 (-R freeze)

    • Post a TC 971 Action Code (AC) 151 to indicate there is a multiple TIN filing condition. The primary TIN from the X-Ref return will be reflected in the TC 971

    • For information on the Economic Stimulus Payments (ESP) and CP 36F/TRNS36F, see IRM. 21.6.3.6.7.6, ESP & CP 36F Cases.

  3. Telephone assistors should advise taxpayer they should respond to the 31C Letter. Once taxpayers have responded to the letter, they should hear something within 30 - 45 days.

  4. Below are definitions for use when working CP 36F transcripts:

    • DUPTIN return is the return that posted second and generates the CP 36F

    • X-Ref return is the return that posted first

    • Common taxpayer is the taxpayer found on both returns

      Note:

      This taxpayer will always be referred to as the common taxpayer even when discussing their separate return (primary filer).

    • Primary taxpayer is the taxpayer which filed the joint return with the common taxpayer

  5. There are two scenarios involved when working DUPTIN Filing Conditions.

    • Scenario 1 - DUPTIN return is FS (Filing Status) 1 (Single), 3 (Married Filing Separate), or 4 (Head of Household)

    • Scenario 2 - DUPTIN return is FS 2 (Married Filing Joint) or 6 (Married Filing Joint and your spouse cannot be claimed as a dependent on another person's return)

  6. When working CP 36F cases, it may be necessary to follow procedures in other IRM sections such as IRM 21.5.2, General Adjustments , IRM 21.6.1, Filing Status and Exemption Adjustments , IRM 21.6.2, Adjusting TIN-Related Problems, and IRM 25.6, Statute of Limitations.

  7. The DUPTIN case is controlled on IDRS/Correspondence Imaging System (CIS) and assigned for review. The control base should be established on the Common Taxpayer's TIN (DUPTIN) and should remain open until:

    • The "-R" freeze is released, or

    • The case is referred to the appropriate area

  8. The release of the "-R " freeze allows the computer to generate a refund or offset credits.

    Note:

    If CP 36F is on an invalid SSN, DO NOT

    release the refund unless the taxpayer responded to CP 54B.

  9. Route cases with a Z freeze, -R freeze created by CI and/or a P- freeze (P- freeze with IDRS category code PFRZ), to the Fraud Detection Center (FDC). Take no action unless the Z and/or P freeze is released. Close the DUPTIN control base.

    Note:

    Accounts with category code "CRIM" that do not have one of the above freeze codes, may be worked by AM employees.

  10. If at any point the taxpayer explicitly states fraud or forgery, refer the case to Exam if the additional assessment (net increase) is as least ≡ ≡ ≡ ≡ . Use the "CAT-A Other" option on CIS.

  11. If there is any indication the taxpayer is in a combat zone and the CP 36F is the only issue, release the -R freeze and take no further action.

  12. Input CC ESTAB to request the return posted on the DUPTIN if not received with the CP 36F.

    If ... Then ...
    The return is charged out to another area Contact the area to determine the actions to be taken.
    Unable to secure the return

    1. Follow up with a "special search" request.

    2. Send a Letter 418C , to the taxpayer.

      Note:

      Exhaust all in-house means to secure the return before contacting the taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers.
    No reply to Letter 418C 1. Assess the amount of any payment received with the return on the X-Ref SSN.
    2 .If there is a credit on the module, transfer the credit following instructions in IRM 21.2.4.3.10 , Applying Unresolved Credits.
       

21.6.7.4.5.1  (01-17-2008)
CP 36F Entity Verification

  1. Review both the DUPTIN and X-Ref return to see if the name of the Common Taxpayer matches on both returns. Examples:

    • Jane Smith and Jane Smith - matches

    • Jane E Smith and Jane A Smith - does not match

    • Jane Smith and J Smith - does not match

    • Kathy Smith and Kathleen Smith - does not match

    • Kathy Smith and Cathy Smith - does not match

  2. If the Common Taxpayer's name does not match see IRM 21.6.2 , Adjusting TIN Related Problems.

  3. If the Common Taxpayer's name does match then determine if Scenario 1 or Scenario 2 exist and follow procedures below.

21.6.7.4.5.2  (06-26-2009)
Telephone Inquires Regarding CP 36F / TRNS36F

  1. A TC 971 — AC 151 on the module. If you receive a telephone contact regarding these cases, follow the chart below:

    If ... Then ...
    The call is regarding a refund and this is the first contact Do not complete a Form 4442. Advise the caller they will be receiving a letter and they must complete the questionnaire and return it to the address on the notice.
    Do not release any freeze conditions on the account.
    45 days have passed since the first contact and a letter has not been issued to the caller Complete a Form 4442 and forward to the site with the CP 36F control. Advise the caller they should be receiving a letter within 30 days and they must complete the questionnaire and return it to the address on the notice.
    Do not release any freeze conditions on the account
    If more than 30 days have passed from the Form 4442 referral date and taxpayer has not received a letter Prepare Form 911 , or e-911 and forward to your local Taxpayer Advocate Service (TAS). Advise the taxpayer they will be contacted within 7 working days.
    Do not release any freeze conditions on the account
    The caller states they are a victim of identity theft. Complete Form 4442 and forward to the site with the CP 36F control. Advise the caller to send a copy of one or more valid U.S. Federal or State Government - issued forms of identification (such as a social security card, passport, driver's license, or state identification card, etc.), and a copy of a police report, or a Federal Trade Commission ID Theft Affidavit.

    Do not release any freeze conditions on the account.
    The caller states an incorrect SSN was used on their return. Complete Form 4442 and send to the site with the CP 36F control advising of both the incorrect SSN and the correct SSN.

    Do not release any freeze conditions on the account.

21.6.7.4.5.3  (07-20-2009)
DUPTIN Return is FS 1/3/4 (Scenario 1) X-Ref Return is FS 2/6

  1. Follow the procedures below when working cases where the DUPTIN on a FS 1/3/4 return has already been used as a secondary TIN on another return.

  2. Correspond with the Common Taxpayer using 31C Letter.

    Note:

    Correspondence should be sent to both addresses as shown on the DUPTIN and the X-Ref return if different. Correspondence should be addressed to Common Taxpayer only.

  3. Suspend the case for 40 days; 70 days for overseas taxpayers.

  4. If a reply is received, or the suspense period has expired, follow the table below:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net increase) must be at least ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ remaining. If the net increase is less than ≡ ≡ ≡ ≡ ≡ , or the ASED is within ≡ ≡ ≡ ≡ , release the -R freeze and take no further action. Do not send tax decreases or credit increases to Exam, Accounts Management has the authority to work these cases.

    If ... And ... Then ...
    #1 Reply indicates the common taxpayer filed both returns The X-Ref return, FS 2/6, is the correct filing

    1. See IRM 21.6.1.4.3.1, Separate to Joint and Both Taxpayers Have Filed Previously.

    2. Back out FS 1/3/4 return on the common taxpayer SSN

      Note:

      If income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures. Do not back out the FS 1/3/4 return.

    3. Send 673C Letter to notify the taxpayer of your action. Inform the taxpayer if changes are needed to the FS 2/6 return, a Form 1040X, Amended U.S. Individual Income Tax Return, must be filed.

    #2 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 Refer the primary taxpayer on the joint return to Exam (CAT-A Other) for deficiency procedures.
    #3 Reply indicates the common taxpayer filed both returns The DUPTIN Return (FS 1/3/4) is the correct filing but was filed after the due date 1. Compare return information to verify if all income reported on the DUPTIN return was reported on the joint return (CC IRPTR information can also be used).
    2. If all income was reported, disallow the claim in full and send 105C Letter. Back out the DUPTIN return.
    3. If all income was not reported, the joint return may be assessed using deficiency procedures. Refer the case to Exam as a CAT-A Other.
    #4 Reply indicates common taxpayer did not file one of the returns 1. The FS 2/6 return is not valid



    2. If the taxpayer has no knowledge of one of the returns and it appears 2 taxpayers are using the same SSN     		1. Follow procedures in IRM 21.6.1.4.7, Claims of Joint to Single or Head of Household Where Joint Election is Invalid, if the taxpayer explicitly states fraud or forgery. If the taxpayer does not state fraud or forgery, refer the primary taxpayer on the joint return to Exam for deficiency procedures.

    2. Follow procedures in IRM 21.6.2, Adjusting TIN- Related Problems
    #5 No reply from common taxpayer Return was timely filed Refer to #2 above.
    #6 No reply from common taxpayer Return was filed after the due date Refer to #3 above.

  5. When a return claiming only the telephone excise tax credit (TETR) is the DUPTIN return, release the -R freeze and allow the credit to refund unless there is a clear indication the credit belongs on the X-REF return.

21.6.7.4.5.4  (07-20-2009)
DUPTIN Return is FS 2/6 (Scenario 2) X-Ref Return is FS 1/3/4

  1. Follow the procedures below when working cases where the DUPTIN Return is FS 2/6 (Scenario 2) and has already been used as a primary TIN on a FS 1, 3, or 4 return for the same year.

  2. Correspond with the common taxpayer using 31C Letter.

    Note:

    Correspondence should be sent to both addresses as shown on the DUPTIN and X-Ref return if different. Correspondence should be addressed to common taxpayer only.

  3. Suspend the case for 40 days; 70 days for overseas taxpayers.

  4. If a reply is received, or the suspense period has expired, follow the table below:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net increase) must be at least ≡ ≡ ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ ≡ ≡ remaining. If the net increase is less than ≡ ≡ ≡ ≡ ≡ , or the ASED is within ≡ ≡ ≡ ≡ ≡ ≡ ≡ , release the -R freeze and take no further action. Do not send tax decreases or credit increases to Exam, Accounts Management has the authority to work these cases.

    If ... And ... Then ...
    #1 Reply indicates the common taxpayer filed both returns FS 2/6 DUPTIN return is the legally valid filing and the statute for filing a joint election has not expired

    Note:

    If the taxpayer wants to change the filing status of a legally filed FS 2/6 return, an amended return will have to be filed.

    1. See IRM 21.6.1.4.3.1, Separate to Joint and Both Taxpayers Have Filed Previously.

    2. Back out FS 1/3/4 return on the common taxpayer SSN.

      Note:

      If income on FS 1/3/4 was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures. Do not back out the 1/3/4 return.

    3. Send Letter 673C to notify the taxpayer of your action. Inform the taxpayer if changes are needed to the FS 2/6 return, a Form 1040X, Amended U.S. Individual Income Tax Return, must be filed.

    #2 Reply indicates common taxpayer filed both returns The FS 2/6 DUPTIN return is the legally valid filing, but was filed after the statute for filing a joint election expired, and one taxpayer has not previously filed 1. Compare the income on the joint return to the income on the separate return.
    2. If the separate return has reported all of the common taxpayer's income, send a 105C letter to the common taxpayer disallowing the filing status change.
    3. If the common taxpayer's income on the joint return was not reported on separate return, refer the case to Exam for deficiency procedures.
    4. Refer the primary taxpayer on the joint return to Exam (CAT-A Other) for deficiency procedures.
    #3 Reply indicates the common taxpayer filed both returns The FS 1/3/4 X-Ref return is the legally valid filing, was filed prior to the due date, and the FS 2/6 return is not a legally valid return.

    Caution:

    If the common taxpayer states they were married, the FS 2/6 return filed becomes the legally valid filing since the taxpayer has three years to make this election.

    		Refer the primary taxpayer to Exam (CAT-A Other) for deficiency procedures.
    #4 Reply indicates the common taxpayer did not file the FS 1/3/4 return It appears multiple individuals are using the same TIN Refer to IRM 21.6.2.4.2, Multiple Individuals Using the Same TIN
    #5 Reply indicates the common taxpayer did not file the DUPTIN FS 2/6 return 1. The FS 2/6 return is not valid




    2. If the taxpayer has no knowledge of the FS 2/6 return and it appears 2 taxpayers are using the same SSN     		1. Follow procedures in IRM 21.6.1.4.7, Claims of Joint to Single or Head of Household Where Joint Election is Invalid, if the taxpayer explicitly states fraud or forgery. If the taxpayer does not state fraud or forgery, refer the primary taxpayer on the joint return to Exam for deficiency procedures.

    2. Follow procedures in IRM 21.6.2, Adjusting TIN-Related Problems
    #6 No reply from common taxpayer 1. Common taxpayer signed joint return or return was electronically filed and the statute has not expired


    2. Common taxpayer signed joint return or return was electronically filed and the statute has expired


    3. Common taxpayer did not sign joint return.     		1. Refer to #1 above.




    2. Refer to #2 above.




    3. Refer the case to Exam as CAT-A Other.

  5. When a return claiming only the telephone excise tax credit (TETR) is the DUPTIN return, release the -R freeze and allow the credit to refund unless there is a clear indication the credit belongs on the X-REF return.

21.6.7.4.5.4.1  (07-20-2009)
DUPTIN is FS 2/6 (Scenario 2) X-Ref Return is FS 2/6

  1. Follow the procedures below when working cases where the same TIN is used as a primary TIN on a FS 2 or 6 return and as a secondary TIN on another FS 2 or 6 return for the same tax year:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net increase) must be at least ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ ≡ remaining. If the net increase is less than ≡ ≡ ≡ ≡ , or the ASED is within ≡ ≡ ≡ ≡ ≡ ≡ , release the -R freeze and take no further action. Do not send tax decreases or credit increases to Exam; Accounts Management has the authority to work these cases.

    If ... And ... Then ...
    #1 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)

    1. Compare figures on both returns to verify they are the same.

    2. If same, back out DUPTIN return.

    3. If figures are not the same, See IRM 21.6.7.4.13 , Returns for Each Form W-2, to adjust the filing that posted first to include any unclaimed income, withholding, etc. shown on the second return.

    4. Input adjustment on account where second return posted to back it out; use Hold Code 3. For additional information on inputting adjustments, See IRM 21.6.7.4, Adjusting Individual Tax Account Procedures

    5. Send 673C Letter to notify taxpayers of actions taken.
    #2 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)

    1. Correspond with the common taxpayer to determine if taxpayer filed both returns. Send 31C Letter.

    2. Send correspondence to both addresses as shown on the DUPTIN and the X-Ref returns, if different. Address correspondence to the common taxpayer only. Send correspondence under the common taxpayer's SSN.

    3. If the taxpayer is due a refund, advise the refund will be held until the matter is resolved.

    4. Suspend the case for 40 days; 70 days for overseas taxpayers.
    #2a. Reply indicates common taxpayer did not file one of the returns 1. One of the returns is not valid.












    2. Common taxpayer has no knowledge of one of the returns and it appears two taxpayers are using the same SSN.     		1. Follow procedures in IRM 21.6.1.4.7, Claims of Joint to Single or Head of Household Where Joint Election is Invalid, if the taxpayer explicitly states fraud or forgery. If the taxpayer does not state fraud or forgery, refer the primary taxpayer on the invalid return to Exam for deficiency procedures.

    2. Follow procedures in IRM 21.6.2, Adjusting TIN-Related Problems
    #2b. No reply from common taxpayer Research indicates a mixed entity Follow procedures in IRM 21.6.2 , Adjusting TIN-Related Problems.
    #2c. No reply from common taxpayer and research indicates the common taxpayer is the same person 1. One return is not signed by the common taxpayer

    2. Both returns are signed by the common taxpayer and IDRS history indicates the correct spouse






    3. Both returns are signed by the common taxpayer and IDRS history does not indicate the correct spouse

    Note:

    Treat electronically filed returns the same as signed returns

    		1. Refer the unsigned return to Exam for deficiency procedures.

    2. Refer the incorrect filing to Exam for deficiency procedures.

    Note:

    If the common taxpayer has income on the incorrect return that was not reported on the return deemed to be the correct filing, refer both accounts to Exam.



    3. Refer the first return filed to Exam for deficiency procedures.

    Note:

    If the common taxpayer has income on the first return that was not reported on the second return, refer both accounts to Exam.

    #3 No reply from common taxpayer   See your lead. Case is to be referred to the P&A Staff.
    #4 Reply indicates common taxpayer did not file one of the returns

    1. One of the returns is not valid.

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

    1. Follow procedures in IRM 21.6.1.4.7, Claims of Joint to Single or Head of Household Where Joint Election is Invalid.

    2. Follow procedures in IRM 21.6.2, Adjusting TIN- Related Problems

    Note:

    See IRM 4.13.2.2, Function Responsibility & Routing Instructions for TC 300 Automated Substitute For Return (ASFR) Reconsideration cases.

21.6.7.4.6  (05-08-2009)
Adjustment Considerations

  1. Review the account for freeze conditions. Follow procedures in IRM 21.5.6, for Freeze Codes, and see Document 6209, Chapter 8, Section 4, Master File Freeze Codes and IDRS Status 48, for the following items:

    • A list of freeze codes

    • A brief explanation of why they generate

    • Releasing freeze conditions

      Note:

      If the taxpayers previously filed a joint return, are currently filing separate returns, and a credit is being refunded, verify the refund is issued to the taxpayer entitled to the credit. A credit transfer may be necessary.

      Example:

      A single filer’s overpayment credit was transferred from her 2008 Form 1040 account and applied against a prior married filing joint (MFJ) tax liability for 2005. The 2005 tax liability was later reduced on the MFJ account and the credit was erroneously refunded from the MFJ account. The credit should have been reversed back to the single filer’s 2008 account before refunding.

  2. Use hold codes and priority codes when necessary.

  3. Use posting delay codes when necessary. Transactions may need to post later than others when multiple transactions are input. A posting delay code can be entered for 1 to 6 cycles.

  4. Notice Review may delete a refund and assign a case to Accounts Management because of a TC 976 or 977.

    1. Ensure the TC 841 ("P–" freeze) is posted.

    2. Input necessary credit transfers or adjustments after the TC 841 posts.

  5. If a return is "U" coded during processing, the "U" coding does not display on the CP 36 , but is displayed on CC TXMOD and MFTRA. Update the Return Processable Date (RPD) as applicable. Follow procedures in IRM 20.2.4.4, Availability Dates for Unprocessable Returns.

  6. If the adjustment notice does not give a clear explanation and/or a notice will not be issued, provide the taxpayer with an explanation by phone or letter. Follow procedures in IRM 21.5.4.4, Math Error Procedures Processing.

    Example:

    There is a difference between the taxpayers figures and the adjustment made.

  7. A refund for ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more will not systemically generate (TC 846). Do not input TC 290 for .00 to release the refund. A manual refund is required using Form 3753, Manual Refund Posting Voucher. Follow procedures in IRM 21.4.4.4.2, Preparation of the Form 3753, Manual Refund Posting Voucher, to prepare the manual refund. If the taxpayer submitted Form 8302, Electronic Deposit of Tax of $1 Million or More, include it with Form 3753 . Follow procedures in IRM 3.17.79.3.10.1, Form 8302, Electronic Deposit of Tax Refund of $1 Million or More.

21.6.7.4.7  (10-01-2009)
Interest and Penalty Considerations

  1. The computer assesses or abates Failure To File (FTF) or Failure To Pay (FTP) penalties according to interest and penalty adjustments made on the module, except when the penalties were manually assessed.

  2. The computer generates assessments and abatements of interest on all transactions.

    1. Usually, adjustments to interest are not necessary.

    2. Follow procedures in IRM 20.1, Penalty Handbook and IRM 20.2 , Interest.

    3. The Desert Storm/Shield or Bosnia "–C" freeze no longer requires manual computation of interest and penalties.

      Note:

      Not all Combat Zone cases (-C Freeze) require manual computation of interest once the taxpayer exits the Combat Zone. Master File (MF) will resume interest once taxpayer exits if the account is not restricted. Follow procedures in IRM 20.2.7.7, Combat Zone - Section 7508. If the account is subject to penalty, Failure to Pay penalty requires manual computation if the taxpayer has exited the Combat Zone. Follow procedures in IRM 20.1.2, Failure to File/Failure to Pay Penalties.

  3. Review amended returns for corrections to estimated tax (ES) penalty.

    1. ES penalty is based on the original TC 150 (minus EITC and Fuel Tax Credit).

    2. Correct the ES penalty if the adjustment is due to a "superseding" or a "Separate to Joint" case.

    3. Correspond with taxpayer, if a requested adjustment to penalty is not allowed.

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. Taxpayer may submit a recomputation of the penalty; math verify.

    If adjusting withholding and Then
    Module shows TC 170/171 with a Document Code 17, 18, 24, 47, 51, 52, or 54

    1. Review the ES penalty.

    2. Determine if the penalty should be adjusted. Refer to IRM 3.14.1.6.21.4.8, ES Penalty Computation, and IRM 3.14.1.6.21.4.9, ES Penalty Command Codes for additional information.

    3. Use priority code 8 to bypass unpostable condition code 158-0.
    Account has a posted TC 176 ES penalty recomputes systemically.

21.6.7.4.8  (10-01-2002)
Special Considerations

  1. Check for decedent refund returns.

    • These returns require special handling

    • Follow procedures in IRM 21.4.1.4.9.4, Deceased Taxpayers

  2. Check for statutes; see IRM 25.6, Statute of Limitations.

    Caution:

    Form 1040X may appear to request a tax decrease, however, when verified against posted data, the actual result may be a tax increase.

    1. Any claim received prior to the Refund Statute Expiration Date (RSED) is considered timely, even if taxpayer contact is necessary to perfect the claim.

    2. Disallow claims filed only to keep the statute open.

    3. If a protective claim is received, follow procedures in IRM 21.5.3.4.7.3, Protective Claims.

  3. Review for credit-elect requests, offsets and reversals.

21.6.7.4.9  (10-01-2002)
Signature Verification

  1. Make sure the signature agrees with the entity. If the signature is a copy, missing, or does not agree with the entity, follow procedures in IRM 21.5.3.4.4, Signature Requirement for Claims.

21.6.7.4.10  (03-28-2007)
Superseding Returns

  1. The due date of a calendar year individual income tax return is April 15. A fiscal year individual income tax return is due the fifteenth day of the fourth month following the close of the fiscal year.

    1. An amended (Form 1040X) or corrected (duplicate) return filed before the due date or the extended due date is a superseding return.

    2. Correspondence postmarked on or before the due date or extended due date, requesting changes to tax returns, is processed as superseding information.

  2. Consider the following when making a superseding adjustment:

    • Changes in irrevocable elections (i.e., Section 179, Joint to Separate)

      Note:

      A return filed after the original due date but on or before the extended due date does not constitute a superseding return in this situation.

    • Manual computation of ES Penalty. Refer to IRM 20.1.3, Estimated Tax Penalties.

    • Reversal of offsets to other Individual Master File (IMF), Business Master File (BMF) , and Debtor Master File (DMF) accounts when increasing the balance due

    • Returns meeting Examination criteria. Follow procedures in IRM Exhibit 21.5.3–2, Examination Criteria (CAT- A)

    • Use the non-refile blocking series

    Exception:

    Use the appropriate refile blocking series when required to be associated with the original return (e.g., separate to joint).

21.6.7.4.11  (08-21-2008)
State Tax Return or State Portion of Form W-2

  1. If the taxpayer submitted a State tax return or State information on a Form 1040 series return and/or the State portion of the Form W–2:

    1. Block out the DLN on the State return and make a copy.

    2. Return the photocopy and/or Form(s) W-2 to the taxpayer using a 315C Letter.

      Caution:

      Extreme care must be taken to ensure that only the material relative to the taxpayer(s) to which the correspondence is addressed is enclosed in the envelope. See IRM 21.3.3.4.26 , Breaches of Personally Identifiable Information (PII) Caused by Manual Stuffing Errors, for additional information.

    3. Consider possible changes to the return processable date (RPD)

    4. Release the "–A" freeze, using the appropriate blocking series.

      Note:

      If CP 36 is on invalid SSN, DO NOT release a refund unless the taxpayer responded to CP 54B ; use HC 4.

21.6.7.4.12  (10-01-2009)
Presidential Election Campaign Fund (PECF)

  1. Congress established the Presidential Election Campaign Fund (PECF) to support financing of presidential election campaigns.

    1. Taxpayers may file an amended return to designate a part of the tax liability to the PECF, if not specified on the original return.

    2. The amended return must be filed within 20 and one half months after the original due date for filing the return.

      Note:

      If claim is not received timely and the only change is to the PECF, then "no consider" the claim.

    3. The PECF fund amount is $3.

  2. Only take action on an amended return with a PECF designation change from "No" to "Yes." A "Yes" designation may not be changed.

  3. Research CC IMFOL to determine any change to the election. Prepare a "dummy" Form 1040X for input whenever the taxpayer indicates an addition to the PECF.

  4. Using a blank Form 1040X, take the following steps:

    1. Write "PECF" and the tax period at the top of the form.

    2. Enter the taxpayer's name control and social security number.

    3. Enter the filing status code.

    4. Edit Return Processing Code (RPC) "G5," in the blank area of column C heading, if the taxpayer checks one box. Edit RPC "G6," if taxpayer checks two boxes.

    5. Enter the received date in the income section.

    6. Use the CIS image Stamp feature or write "0/S" (original signed on taxpayer's Form 1040X) in red ink on the signature line.

    7. Write your employee number at the bottom of the return.

    8. Check the correct box(es) in Part Ill.

    9. Process the return in blocking series 99 to prevent a duplicate filing condition. Use local routing procedures.

21.6.7.4.13  (10-01-2003)
Return for Each Form W–2

  1. Taxpayers may erroneously file a separate return for each Form W—2received. Take the following action to resolve the duplicate filing condition:

    1. Secure returns, if needed, to verify wages, credits, and tax liability.

    2. Combine wages, other income and withholding.

    3. Compute the correct tax liability.

    4. Input the appropriate adjustment transaction to increase or decrease the tax, credits, income, and deductions.

    5. Send the taxpayer a 673C Letter.

    6. Provide a detailed explanation of the changes to the account.

    7. Advise the taxpayer that all Forms W–2 should be filed on one return in the future and that an amended return should be filed for additional Forms W–2 received after the return is filed.

  2. If the correct tax liability is greater than taxpayer expected:

    1. Treat as a math error.

    2. Use blocking series 77 or 78.

    3. Follow procedures in IRM 21.5.4.4.1, Setting the Initial Math Error Action.

  3. If the taxpayer submitted original copy of Forms W–2 to substantiate entries on an original or amended return, do not return them to the taxpayer.

21.6.7.4.14  (02-20-2003)
True Duplicate Return

  1. A true duplicate condition occurs when the taxpayer files two returns with the exact same tax information. The most common reasons for duplicate filings are:

    1. The taxpayer files a copy of the original Form 1040, 1040A, or 1040EZ.

      Note:

      The original return may have been filed electronically.

    2. A return is filed with a payment of an outstanding balance.

    3. The original refund claimed was reduced by a math error.

    4. The taxpayer did not receive a refund within his/her expected time frame and files another return.

    5. Photocopies of Pages 1 and 2, Form 1040, intended for Form 1045,Application for Tentative Refund, are input as an original return.

    6. The taxpayer did not receive the expected refund due to an invalid SSN condition.

    7. The taxpayer did not receive a refund because of a missing signature on Form 1310,Statement of Person Claiming Refund Due to a Deceased Taxpayer ("–R" freeze).

  2. Six common checks for resolving a true duplicate condition are:

    1. Reviewing the account for unreversed penalties.

    2. Checking the received date of both returns to make sure the earliest post marked return posted first.

    3. Searching for taxpayer notes or letters.

    4. Checking for name and address changes.

    5. Making sure no corrected or prior year Forms W—2 are included.

    6. Checking all attachments for Forms 1045 or 1040X claiming a carryback. Follow procedures in IRM 21.5.9, Carrybacks.

  3. Compare the CP 36 and second return to the original return's RTVUE/IMFOL. Amounts for taxable income, adjusted gross income, total tax, self-employment tax, primary and secondary self-employment income as well as the number of exemptions should match before determining it is a true duplicate case.

    If Then
    Second return is a true duplicate

    1. Release the "–A" freeze.

    2. Use the appropriate HC and blocking series.
    A true duplicate return posted to an invalid SSN

    1. Review the TXMOD notice section.

    2. Determine if a CP 54 was issued.

    3. DO NOT release the refund if taxpayer did not reply to the CP 54.

    4. Release the "–A" freeze.

    5. Use HOLD CODE 4 to hold the credit.

    6. Initiate taxpayer correspondence.

21.6.7.4.14.1  (10-01-2006)
Systemically Identified True Duplicate Returns

  1. Duplicate returns will be systemically compared to the original return utilizing established criteria. If all items match, the duplicate return will be considered a true duplicate return and systemically closed as a true duplicate return. No CP 36 will generate. Systemically identified and closed true duplicate returns can be identified by TC 971 Action Code 142.

  2. If a systemically identified true duplicate return is later identified as not being a true duplicate, follow established procedures for processing duplicate return and input TC 972 Action Code 142.

    Note:

    If information is received while staffing the AM toll-free telephone line indicating that the duplicate return is not a true duplicate return, prepare Form 4442 and forward to the campus where the duplicate return was processed.

21.6.7.4.15  (10-01-2002)
Duplicate/Amended TC 420 – CP 93

  1. A CP 93 generates when a duplicate or amended return posts to a module which contains an open TC 420 ("–L" freeze). To resolve CP 93:

    1. Use CP 36 procedures in addition to data from the Audit Information Management System (AIMS) file.

    2. Research the AIMS file with CC AMDISA for the current status.

    3. Follow the procedures outlined in IRM 21.5.3, General Claims Procedures .

21.6.7.4.16  (10-01-2002)
Duplicate Assessment – Doc Code 51 – CP 35/35A

  1. Examination and Collection functions, as well as certain servicing campus functions may request an expeditious assessment (Prompt, Quick, Jeopardy) when:

    • The statute is imminent (does not apply to jeopardy)

    • The collection of taxes is in jeopardy

  2. The servicing campus Accounting function makes the assessment.

    1. The tax data necessary for these assessments is transmitted to the Accounting function by telephone, mail, or facsimile (fax).

    2. Tax, penalty, and interest are assessed.

    3. A balance due notice is sent to taxpayer, or given to taxpayer if a jeopardy levy is contemplated.

  3. The information is entered into the Distributed Input System (DIS) to post to the master file.

  4. These pre-journalized transactions are numbered with a Document Code 51.

21.6.7.4.16.1  (10-01-2002)
General – CP 35/35A

  1. A CP CP 35/ 35A generates when a prompt assessment attempts to post as an original return, to a module containing a TC 150. A prompt assessment, identified by TC 370 and Document Code 51:

    • Posts as a TC 290 with all tax, penalty, and interest transactions associated with the TC 370

    • Generates a TC 976 and sets the duplicate filing condition "–A" freeze

  2. Action required:

    1. Follow CP 36 verification procedures.

    2. Determine the reason for the prompt assessment.

    If it is determined that Then
    This is a valid additional assessment Input a TC 290 to release the "–A " freeze.

    Note:

    If CP 35 is on invalid SSN, DO NOT release a refund unless the taxpayer responded to CP 54; use HC 4.
    This is an erroneous assessment Input a TC 291 to abate the assessment.

21.6.7.4.17  (10-01-2006)
Net Operating Loss (NOL) — Carryforward

  1. The taxpayer may carry a Net Operating Loss (NOL) or excess business credit carried forward to the current tax year.

    Reminder:

    Refer to IRM 21.5.9, Carrybacks, for technical background on carryback cases.

  2. Net Capital Losses (NCL) can ONLY be carried forward, not back.

  3. An election made by the due date or extended due date of the loss year return, for NOLs only, enables taxpayer to carry the loss forward. For loss year returns due on or after October 1,1992, provided taxpayer timely files the loss year return, the election may also be made on an amended return filed within six months of the due date of the return, determined without extensions. Follow procedures in IRM 21.5.9.5.2,Carryback/Carryforward Election.

21.6.7.4.18  (10-01-2002)
IRS Error Delays Refund — CP 33

  1. Taxpayers are notified when an IRS error delays the processing of a return.

  2. The input of an Error Delay Code (EDC) by Unpostables or Entity Control generates a CP 33. EDCs are valid only for original refund returns.

  3. Take the following action:

    If Then
    Research indicates the return is pending (PN) or posted Send an appropriate response to taxpayer.
    Return is still unpostable Contact the appropriate function (Unpostables or Entity) for assistance in resolving the CP 33.

Exhibit 21.6.7-1  (03-25-2009)
REASON CODES

Reason Code Literal Which Prints on the CP 21/22 Notice
Filing Status & Exemptions (Use the RC for the new filing status; e.g., single to HOH – use RC 004)
001 Filing status to single.
002 Filing status to married filing a joint return.
003 Filing status to married filing a separate return.
004 Filing status to head of household.
005 Filing status to qualifying widow(er) with dependent child.
006 Total exemption amount.
040* Bona fide and physical presence test.
104 Total exemption amount for Katrina houseguest(s)
Income
007 Income from wages, salaries, tips, etc.
008 Interest and/or dividends income.
012 Business income (or loss).
013 Investment gain (or loss).
014* Form 2555, Foreign Earned Income.
015

Note:

DO NOT use RC 015. RC 015 is reintroduced for tax year 2001, requires no SC, and was systemically generated for a Rate Reduction Credit recovery initiative. The RC 015 was previously used for the tax year 1993 Omnibus Budget Reconciliation Act (OBRA) only.

Note:

The RC 015 read (for tax year 2001): We made an error figuring the allowable rate reduction credit on your 2001 Form 1040, line 47; Form 1040A, line 30; or Form 1040EZ, line 7. We apologize for the error and we're correcting the mistake. If the correct credit results in an overpayment on your 2001 tax return, we will send you a check or notify you if the overpayment was applied to another tax liability. The Treasury's Financial Management Service may reduce your check if you are past due in payments for child support or debts to other federal agencies. You do not have to take any further action on this matter. If you receive a check, do not report the overpayment as income on your 2002 federal tax return.

016 Pensions and Annuities.
017

Note:

Reintroduce RC 017 for tracking purposes only; nothing prints on CP21/22. Used with RC 053 ONLY by Submission Processing for CP 27 or 09.

Note:

The RC 017 was previously used for tax year 1993 OBRA only.
018 Schedule E income (or loss).
019 Farm income (or loss).
020 Unemployment compensation.
021 Other income.
022 Total Income.
023 Interest charged. We reduced the interest because you were located in a Presidentially Declared Disaster Area. We eliminated the interest charged during the time period for which an extension of time to file returns and pay taxes was granted.
Caution : For 1996 (and subsequent) - RC 23 is used ONLY for Legislative interest abatement for taxpayers in Disaster areas; see IRM 20.2, Interest.

For 1993: RC 023 was used with SC 0 and read "You elected on your 1993 federal income tax return to defer two-thirds of additional 1993 tax associated with the tax rate increase imposed by the 1993 Budget Reconciliation Act. The third and final installment of deferred tax is now due."

Note:

RC 023 was used for the tax year 1993 only with the Budget Reconciliation Act wording.
029 Taxable Social Security Benefit.
042** Ingreso por cuenta propia.
Adjustments to Income
025 Amount claimed as payment made to a qualified retirement plan.
027 Interest penalty on early withdrawal of savings.
030 Adjustments to income.
031* Foreign earned income exclusion.
032 Adjusted Gross Income.
052 Roth Individual Retirement Account (IRA) election to reflect that the total taxable conversion amount is subject to tax (Primary Taxpayer).
058 Roth IRA election to reflect that the taxable conversion amount will be reported and any tax due paid over 4 years (Primary Taxpayer).
059 Roth IRA election to reflect that the total taxable conversion amount is subject to tax (Secondary Taxpayer).
060 Roth IRA election to reflect that the taxable conversion amount will be reported and any tax due paid over 4 years (Secondary Taxpayer).
083* Income exempt per tax treaty.
084* Scholarship or fellowship exclusion.
094* Net operating loss carryback or carryforward.
Tax Computation
033 Additional taxes from Form 4970,Form 4972,Form 5544,Form 5405, or Section 72(m)(5) penalty tax.
034* Dual status tax.
043 Schedule D. (Use RC 043 for Schedule D tax computation change; use RC 013 for Schedule D investment gain (or loss).)
046 Schedule J. (Prior to 1999, RC 046 was used for recomputing prior year investment credit.)
070* Zero Bracket Amount.
075 Taxable income.
092 Standard deduction.
Credits
035 Education Credit.
036 Tax credits.
041* Alternative Minimum Tax or Foreign Tax Credit.
063* Virgin Island credit on Form 8689.
Other Taxes
024** Uncollected Social Security and/or Medicare Tax
037* Non-effectively connected tax.
038* Backup withholding.
044** Self-Employment Tax.
045 Minimum Tax or Alternative Minimum Tax.
047 Social Security Tax on Tip Income not reported to employer or uncollected employee Social Security Tax Railroad Retirement Tax Act (RRTA)Tax on Tips.
048 Tax on your Individual Retirement Account.
049 Total tax
050 Household Employment Taxes (Schedule H).
095* Tax computation using the 30% statutory rate or reduced treaty rate.
Payment
051 Total Federal Income Tax Withheld.
053 Earned Income Credit (allowed/increased/decreased).
054 Earned Income Credit (disallowance only). Used with SC 0 and reads: "Your claim for Earned Income Credit is not approved. You will be sent a separate letter formally disallowing your claim."
055 Excess Social Security Tax or RRTA Tax Withheld.
057 Regulated Investment Company Credit.
061 Payments and/or credits.
069* Form 8288 or Section 1446 withholding.
039* Social Security tax withheld based on your visa.
071 Advanced Child Tax Credit
Tax Year 2007 Economic Stimulus Payment
077 Advanced Child Tax Credit
078 Advanced Child Tax Credit
079 Advanced Child Tax Credit
102 Credit for Federal telephone excise tax paid (Effective January 2007)
109 First-time Homebuyer Credit - 2008 Credit required to be repaid
110 First-Time Home Buyer Credit - 2009 Credit not required to be repaid
Penalties, Fees, and Interest.
062** Penalty due to reasonable cause (Interest is charged on any unpaid tax and may not be removed for reasonable cause)

Note:

Use RC 062 only when Penalty Reason Code (PRC) is in the "Reasonable Cause" category.

065 Penalty charge.

Note:

Use RC 065 only when PRC is NOT in the "Reasonable Cause" category.

071** Reserved
072 Health Insurance Credit.

Note:

RC 072 is valid for tax year 2001 and subsequent.
073 Assessment of fee.
074 Interest Charges.
077** Reserved
Treasury Offset Program
086*** An Injured Spouse Claim was filed, requesting a refund of the non-obligated spouse's share of the amount applied against the non-tax debt.

Note:

RC 086 used only with SC 7.
087*** We have corrected a math or processing error on your return.

Note:

RC 087 used only with SC 7.
089*** The offset was done in violation of the automatic stay of bankruptcy.

Note:

RC 089 used only with SC 7.
090*** The offset resulted from a payment which was specifically intended for application to an outstanding IRS balance.

Note:

RC 090 used only with SC 7.
091*** Based on the superseding tax return you filed, we have adjusted the tax, withholding, or credits reported on your original tax return.

Note:

RC 091 used only with SC 7.
Miscellaneous and Special Projects
064 Reconsideration No-Response. (Compliance Examination use only.)
066 Reconsideration disallowed in full. (Compliance Examination use only.)
067 Reconsideration disallowed in part. (Compliance Examination use only.)
068 Reconsideration allowed in full. (Compliance Examination use only.)
076 Schedule A.
080 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CPs 21/22.
081 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CPs 21/22.
082 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CPs 21/22.
085 Taxable income. You reported refunds of state and local income taxes as income on your return. Since you did not itemize deductions in the year and state tax was paid, you are not required to include these refunds as income.
093 Immediate Tax Relief credit — RELIEF Act 2001
For tax year 2000 (ONLY):RC 093 is generated if the TC 290 .00 CRN 338 was systemically reversed (cycle 200151 or 200152). RC 093 can be manually input; SC 0 generates.
For tax year 2000, RC 093 reads:"We reversed the Immediate Tax Relief credit on your 2000 tax account since it was not refunded to you by December 31, 2001, as the law requires. We are sorry the refund was not issued in time to meet this requirement."
Economic Stimulus Act of 2008
Economic Stimulus Act H.R. 5140. For Tax Year 2007 Only. RC 093 is generated if the TC 290 .00 CRN 338/256/257 was systemically reversed (Cycle 200852). RC 093 can be manually input in certain situations; SC 0 generates. See IRM 21.6.3.6.
For Tax Year 2007, RC 093 reads:
"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" .
096 Tax Relief Credit.
Immediate Tax Relief credit — RELIEF Act 2001

For tax year 2001: Use RC 096 with the appropriate SC and any other RCs; RC 096 reads: Tax Relief Credit.
For tax year 2000: RC 096 alone will generate (no manual input of RC 096) ONLY with the systemic posting of TC 290 .00 CRN 338 (DLN of NN254-999-05099-1). RC 096 read: "We applied a credit to your 2000 tax account due to new legislation. We used (offset) all or part of your credit to pay your past due Federal tax as the law requires. We will send a separate notice to you about the offset."
Economic Stimulus Act of 2008.
For Tax Year 2007: RC 096 is used when correcting account information. Use RC 096 with the appropriate SC and any other RCs. RC 096 reads:
"Economic Stimulus Payment" .
See IRM 21.6.3.6
097 Innocent Spouse Claim-Disallowed (Never prints a CP 21/22. RC 098 used for tracking purposes.)
098 Innocent Spouse Claim-Allowed (Never prints a CP 21/22. RC 098 used for tracking purposes.)
099** Account Information.
Note : Use ONLY when RCs above do not apply.
100 Form 1040 filer converted to Form 1040NR filer - used by PSC.
101 Form 1040NR filer converted to Form 1040 filer - used by PSC.
176 Home Grant Penalty and Interest Free Adjustment
177 Home Grant with Carryback Criteria Penalty and Interest Free Adjustment
200 Economic Stimulus Payment - No Credit. (Never prints a CP 21/22. RC 200 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes.
201 Economic Stimulus Payment - No Credit. (Never prints a CP 21/22. RC 201 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
202 Economic Stimulus Payment - No Credit. (Never prints a CP 21/22. RC 203 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
203 Economic Stimulus Payment - No Credit. (Never prints a CP 21/22. RC 203 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
204 Economic Stimulus Payment - No Credit. (Never prints a CP 21/22. RC 204 used for tracking purposes). See IRM 21.6.3.6.4.1Economic Stimulus Payment Reason Codes
205 Economic Stimulus Payment - No Credit. (Never prints a CP 21/22. RC 205 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
206 Economic Stimulus Payment - Reduced Credit if in third RC position and CRN 338. (Never prints a CP 21/22. RC 206 used for tracking purposes). See IRM 21.6.3.6.4.1
207 Economic Stimulus Payment - Reduced Credit. CRN 338. (Never prints a CP 21/22. RC 207 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
208 Economic Stimulus Payment - Minimum Credit. CRN 256. (Never prints a CP 21/22. RC 208 used for tracking purposes). See IRM 21.6.3.6.4.1
209 Economic Stimulus Payment - Maximum Credit. CRN 338. (Never prints a CP 21/22. RC 209 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
206 Economic Stimulus Payment - Child Credit if in second RC position and CRN 257. (Never prints a CP 21/22. RC 206 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
210 Economic Stimulus Payment - Child Credit. CRN 257. (Never prints a CP 21/22. RC 210 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
211 Economic Stimulus Payment -Child Credit. CRN 257. (Never prints a CP 21/22. RC 211 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
212 Economic Stimulus Payment -Child Credit. CRN 257. (Never prints a CP 21/22. RC 212 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
213 Economic Stimulus Payment -Child Credit. CRN 257. (Never prints a CP 21/22. RC 213 used for tracking purposes). See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
214 Economic Stimulus Payment - Child Credit. CRN 257. RC 214 verbiage used on CP 21/22 notice when the qualifying children portion of the Economic Stimulus Payment was systemically adjusted. RC 214 should not be used with any other RC or SC. RC 214 reads: "We changed your account to include the qualifying child portion of the Economic Stimulus Payment. We apologize for any inconvenience."
See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
215 Economic Stimulus Payment — RC 215 is generated in the first RC position with the systemic Recovery to correct accounts based on the Heroes Earning Assistance and Relief Tax Act of 2008. RC 215 should not be used with any other RC or SC. RC 215 reads:"The Heroes Earning 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 21.6.3.6.4.1Economic Stimulus Payment Reason Codes.
216 Economic Stimulus Payment — RC 216 is 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 should not be used with any other RC or SC. 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 21.6.3.6.4.1Economic Stimulus Payment Reason Codes
217 Economic Stimulus Payment
For Tax Year 2007, RC 217 is generated in the first RC position with the systemic Recovery to correct accounts with a RPC E and a spousal invalid TIN/Name present. RC 217 will not generate on CP 21/22 notice. Instead these taxpayers will receive a 1378 vendor notice. RC 217 should not be used with any other RC or SC.
See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
220 Economic Stimulus Act 2008
Economic Stimulus Payment - For tax year 2007, RC 220 verbiage used only on the CP 21/22 notice when the stimulus payment was applied to a balance due on the TY 2007 tax account. RC 220 should not be used with any other RC and no SC.
RC 220 reads: "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."
See IRM 21.6.3.6.4.1 Economic Stimulus Payment Reason Codes
Reserved:RCs 009, 010, 011, 026, 028, 056, 078, 88, 117 through 199, and 218 through 219.

Note:

*RCs marked with one asterisk (*) for international accounts (PSC) only.
** RCs marked with two asterisk (**) print in Spanish when the entity filing requirement is '7'.
***RCs marked with three (***) for reversing offsets through the Treasury Offset Program.
RC 042 prints in Spanish only.
RCs 086, 087, 089, 090, and 091 are the only RCs permitted to be used with SC 7; no other SC may be used.


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