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Part 25. Special Topics

Chapter 15. Relief from Joint and Several Liability

Section 7. Compliance Campus Functions (Cont. 1)

25.15.7  Compliance Campus Functions (Cont. 1)

25.15.7.6 
Special Handling

25.15.7.6.12  (03-21-2008)
Collection Due Process

  1. Collection Due Process "CDP" is identified by Form 12153, Request for Collection Due Process or Equivalent Hearing, TC 971 AC 275, TC 971 AC 278 or TC 520 with closing code 70, 76 or 77. There should be an IDRS control whose activity begins with CDP or EH (equivalent hearing). The final activity on that control should be 2APPLS indicating Automated Collection System sent the CDP to Appeals. The CDP must be for the RS. Notate CDP on top of the ISTSR input record sheet and highlight. Put in appropriate folder. If you receive the original Form 12153:

    1. Make a copy of Form 12153 for your case file.

    2. Send original Form 12153 received with original envelope and copy of Form 8857 to ACS, Stop 813G.

  2. If the claim meets non-qualifying criteria, issue the appropriate letter. Update ISTS through Stage 30.

  3. If the claim should be built for Full Scope:

    1. Follow case building procedures. See IRM 25.15.7.7.

    2. Place in appropriate folder if CDP is for the RS.

    3. Note on ISTSR Input Record "CDP" .

    4. Expedite "built" case to full scope. A case is considered built when all letters have been sent, administrative file has been requested and the appropriate time has been granted to allow receipt of replies.

  4. If the claim should be disallowed:

    1. Continue following IRM (example - prepare Form 3198 to disallow the case) but do not send letters. The letters will be issued by CDP

    2. Assure case file has a copy of the Form 8857.

    3. Attach a Form 1725 addressed to Appeals.

    4. Update ISTS to Stage 11 with "CDP" in the Code Section area. Do not input Stages 13 and/or 14.

    5. Recharge documents to the appropriate appeals office using ESTAB to recharge documents.

    6. Attach a Form 1725 with name and address for Appeals. Check the Innocent Spouse Website for the CDP Appeals Contact.

    7. Complete Form 3210, Document Transmittal. Keep two copies with the case and retain one copy for the team. Always use the primary TIN on Form 3210.

    8. Remove the folder.

    9. Send to the appropriate Appeals office and recharge documents to that office. Update ISTS accordingly.

      Note:

      Research for TXMOD controls "TCPI status M" , which indicates a Collection Due Process already in progress.

25.15.7.6.13  (03-21-2008)
Amended Return

  1. A balance due amended return is considered an underpayment case. Relief is only available under IRC 6015(f).

    Note:

    If an amended return is filed (prior to issuance of a Statutory Notice of Deficiency) and the amended return satisfies all issues raised by AUR or Examination; consider it an underpayment case. If the amended return does not satisfy all the issues, the difference is worked as an understatement case.

  2. Date stamp Form 1040 or Form 1040X and Form 8857.

  3. These cases must be worked within seven days upon receipt. Review the Form 1040 or Form 1040X to determine the correct action. If the Form 1040 or Form 1040X is to be sent to Submission Processing, forward the original to the appropriate campus after making a copy of Form 1040 or Form 1040X. Note on the copy in red ink that it is a copy and the action taken with the original and the date you took the action. Keep with the case file.

25.15.7.6.14  (03-21-2008)
Current Filed Return - Overpayment Offset After Claim Filed

  1. If the RS’s overpayment from a current return was offset after the date the claim was filed, determine if the overpayment needs to be refunded, i.e., whether the overpayment was applied to a liability from a joint return the RS filed with the NRS. Ensure the TC 971 AC 065 (L- freeze) has posted on the year for which relief was requested.

    Note:

    For purposes of determining the date of payment when there is a TC 706 (offset of overpayment from the RS's account) use the cycle the offset posted. Monday's date is considered the first day of the cycle and the date the offset occurred.

    1. If RS's overpayment was from a non-joint return, refund the payment.

    2. If RS's overpayment was from a joint return filed with a different spouse, refund the payment.

    3. If RS's overpayment was from a joint return filed with the NRS, do not refund the payment. If the RS is granted relief he/she can complete an injured spouse form to claim his/her portion of the refund.

  2. To refund the payment, prepare Form 3465, Adjustment Request, input adjustment and place Form 3465 in case file.

25.15.7.6.15  (09-01-2006)
Math Error

  1. Math error with Earned Income Credit (EIC) reversal only (taxpayer erroneously entered EIC on return but is not entitled to it due to failure to meet the adjusted gross income (AGI) requirements, because the AGI exceeds the maximum AGI for EIC) is considered an understatement.

  2. Math error with TC 806 (withholding credit) reversal only is considered an underpayment.

  3. Math error due to overstated estimated tax payments is considered an underpayment.

  4. Math error due to tax figured incorrectly is considered an understatement.

  5. Math error due to rebate credits being disallowed is considered an understatement.

  6. Math error due to exemptions being disallowed is considered an understatement.

  7. Math error due to EIC being disallowed because Form 8862, Information to Claim Earned Income Credit After Disallowance, was missing must be considered on a case—by—case basis to determine whether it is an underpayment or understatement. Any questions should be referred to the Headquarters analyst.

  8. Math error due to Schedule D (Capital Gains and Losses) tax worksheet figured incorrectly is considered an understatement.

  9. Math error due to social security benefits figured incorrectly is considered an understatement.

  10. Math error due to Schedule A (Itemized deduction sheet) which is not attached is considered an understatement.

  11. Math error due to student loan interest deduction disallowed is considered an understatement.

25.15.7.6.16  (03-21-2008)
AUR and Open AIMS with EGC Code 5XXX and Status 12 or Greater

  1. Open AUR (Automated Underreporter) cases and AIMS cases with employee group code 5XXX and Status 12 or greater cases will remain in CCISO to be worked. The faxed Form 8857 from the AUR unit is an acceptable signature since AUR has the original.

  2. Open AUR cases are identified by TC 922, see Document 6209, IRS Processing Codes and Information, for process codes. A TC 290 posted after the TC 922, closes the TC 922. A TC 300 closes a case in Exam.

    Note:

    Check TXMOD to ensure there are no pending transactions.

  3. If AUR is still open, See IRM 25.15.7.7.

  4. If process code indicates the TC 922 is closed, taxpayer has not been contacted, there is no process code, or the process code is 03 with no other number, continue screening.

  5. If the Process Code is 66, input TC 971 AC 065 and contact AUR servicing center for details on processing the claim..

  6. If you have multiple years, keep the AUR year and the non-AUR year(s) (you are building) in separate case files. Place copies of everything, i.e. Form 8857, correspondence, etc. in the non-AUR file, rubber—banded together. Any year that can be disallowed or non-qualified will be separated.

25.15.7.7  (03-21-2008)
Case Building - General

  1. The following actions should be taken on all cases being built for a determination. Notate the primary TIN on the left side of the folder. Notate the RS's TIN right below the primary TIN (these may be the same). Highlight the TIN with the open control.

  2. Complete ISTSR Input Record through the appropriate stage. Each year must be updated on ISTS:

    1. Stage 01 with earliest IRS received date.

    2. Stage 02 if received from another campus/Area Office.

    3. Stage 03 with date claim was stamped into the IS team.

    4. Stage 04 date administrative file was requested. If PANES case, input history item on IDRS.

    5. Stage 06 date administrative file was requested for case being built for the field or if the case has been built but can’t be worked right away i.e. —O Freeze indicating a disaster case.

      Note:

      If there is no —O Freeze or there is information from the taxpayer or POA that it is okay to proceed, continue processing.

    6. Add Time on Case label.

  3. Input TC 971 Activity Code 065 on MFT 30, 31, and NMF 20 as appropriate. Initial and date ISTSR Input Record when TC 971 AC 065 is input. For additional information on TC 971 AC 065 see IRM 25.15.2.4.2. TC 971 AC 065 will not be input in the following situations:

    • The case has been removed to retention register or vestigial

    • Invalid joint election

    • No return filed (no TC 150)

    • -Z or Z- freeze

    • Cases in Collection Status 29 (TC 400 on the module). The TC 971 AC 065 will not post to the MFT 30 account. TC 971 AC 065 will be put on the NMF account by preparing Form 3177, Notice of Action for Entry of Master File. Fax to appropriate NMF unit to input. Build ISTS on MFT 30 and note history "ASSMNT/NMF " . If multiple years are on NMF, a Form 3177 must be completed for each year.

      Note:

      TC 971 AC 065 is not required when there is not a need to stop collection activity (e.g., no balance due or no pending assessment when a claim is received). This can occur if the tax is full paid when the claim is filed, if the claim is an injured spouse claim, if the claim is unprocessable, or the claim is premature as there is no deficiency or underpayment.

  4. If the RS’s current filed return has a TC 570 holding the refund, research the account prior to reversing the TC 570 to determine if there is another reason for the hold besides the innocent spouse claim.

    1. A DLN with a 92 in the 9th & 10th positions indicates an injured spouse claim.

    2. A debt indicator of "F" or "B" for our RS indicates an outside liability. Indicator of "I" indicates another IMF tax liability. Indicator of "N" means there is no other debt owed.

    3. A DLN with 999 in the 6th, 7th and 8th positions indicates a taxpayer delinquent investigation (TDI)/Refund Hold.

      If you can clearly determine the TC 570 was input on the account because of the innocent spouse claim, release the hold by inputting a TC 571. Note action on ISTSR Input Record. Input TC 971 AC 065, at the same time input TC 571 with a PDC (Posting Delay Cycle) of 02.

  5. Issue Letter 3662C as appropriate to the RS unless community property is involved, then issue Letter 3665C.

  6. Issue Letter 3284C to NRS unless a section 66(c) claim is involved, then issue Letter 3665C. See IRM 25.15.7.2.1. for addressing letters to taxpayers when the last name has changed.

    Note:

    If the claim is for the NRS and you already have a claim for the RS it is not necessary to issue Letter 3284C, send an interim letter.

    1. Verify the address for the NRS by checking ENMOD and INOLES. If the address for the NRS is the same as the RS and you can determine that they no longer live together, check IRPTR for a more current address to the NRS. If the RS has provided a new address, send Letter 3284C to that address. Do not update ENMOD unless the address is verified by the NRS.

    2. Document at the bottom of the ISTSR Input Record if Letter 3284C is sent to an address other than the address of record.

    3. Do not send Letter 3284C in the following instances: a section 66(c) case or PANES cases until PANES procedures have been followed.

  7. Requesting documents. Enter the date the administrative file was requested on ISTSR Input Record, Stage 04.

    1. Generally the controlling DLN is the document you will request when there is an understatement, taxpayer is claiming forgery or there is an underpayment and the year is not available on RTVUE. The controlling DLN is shown on the second line of TXMOD. Be alert to the following TCs that can be the controlling DLN: 150, 290, 291, 300, 301, or 421.

      Note:

      If no administrative file is received, ESTAB again in 30 days and request a special search be completed. If the special search is unsuccessful, discuss with the Lead examiner.

    2. If the year you need to request is for an underpayment and the year is on RTVUE, print RTVUE for each year requested on Form 8857 and place in case file. It is not necessary to ESTAB for the controlling DLN when the information is available on RTVUE.

    3. For 1998 and subsequent, if the return was electronically filed, do not ESTAB. Use Command Code TRPRT to obtain the electronically filed return (ELF) . ELF returns can be identified by the TC 150 DLN, see Document 6209 pg. 4-4 and 4-5. Research command code IMFOLI, the "Posted Returns" column will show ELF.

      Caution:

      If forgery is claimed and the return was electronically filed, ESTAB for the Form 8453, U.S. Individual Income Tax Declaration for an IRS e-filed Return. These records are destroyed after 6 years after the end of the processing year.

    4. When requesting a document for an NMF account, ESTAB as normal for the TC’s on Master File. In addition, ESTAB for the DLN on the NMF account. Enter "NMF" on the ISTSR Input Record behind this DLN and make sure it is the correct TIN for that account.

    5. If "SFR" is noted on TXMOD after the DLN or if the DLN begins with 43-210, do not request this document.

    6. If a Correspondence Imaging System (CIS) print is needed, complete Form 2275, Records Request, Charge and Recharge, and write CIS print in the DLN section.

    7. If ESTAB received from Files with the remarks NSD, check the adjustment sheet and TXMOD for Correspondence Imaging System (CIS). If CIS is indicated, follow (f) above.

  8. Refer to IRM 25.15.15 for procedures on mirroring modules.

25.15.7.7.1  (03-21-2008)
Case Building - AUR/Exam Case

  1. Input TC 971 AC 065 on MFT 30, 31, and NMF 20 as appropriate. Initial and date ISTSR Input Record when TC 971 AC 065 is input. For additional information on TC 971 AC 065 see IRM 25.15.2.4.2.

  2. Notify AUR/SCEB via secure e-mail to the primary and back-up contact person that you have received Form 8857.

  3. Update ISTS through Stage 04.

  4. Input comment entry on ISTS using "Open AUR" or "Open AIMS" .

  5. Input the appropriate team number on the ISTS Input Record.

  6. Do not ESTAB because AUR/Examination should have the return.

  7. Do not mirror the account.

  8. Send Letter 3659C to the RS.

  9. Send Letter 3284C to the NRS.

  10. If multiple years, keep the AUR/Examination year and the non-AUR/Examination years together but in separate folders. Any years that can be disallowed or non-qualified should be separated. Request ESTAB for the non-AUR/Examination years.

  11. Screen the correspondence to determine if the RS provided information needed by the campus to work the AUR/Examination issue. If so, the correspondence needs to be sent to AUR/Examination. Note ISTSR Input Record with " send copy of correspondence to AUR/Exam" Fax the correspondence to AUR/Examination.

  12. If the original AUR/Examination agreement with a signature or Last Will is attached to the Form 8857. Notate ISTSR Input Record with "Send copy of correspondence to AUR/Exam" . Fax the correspondence to AUR/Examination.

25.15.7.8  (03-21-2008)
Non-qualified and Disallowed

  1. Do not place non-qualified claims in a folder.

  2. Do not input TC 971 AC 065 on non-qualified claims.

    Exception:

    Input TC 971 AC 065 when the RS will be issued a preliminary disallowance letter or in cases where the CSED is open for the NRS only (this will prevent an offset from the RS’s account until the CSED is expired for the NRS).

  3. Follow procedures in IRM 25.15.9.1.2 and IRM 25.15.9.1.5 for closing instructions, and IRM 25.15.14.2 for ISTS instructions.

  4. There may be more than one reason a Request for Innocent Spouse Relief is non-qualified or disallowed. Choose the most definitive reason and address it accordingly. "Definitive" means it can not be disputed through Appeals.

    Example:

    A request is not timely, and there is no joint return (not a section 66(c) case). First, determine whether the claim is non-qualified. If the claim is non-qualifying, there is no reason to further determine whether it would be disallowed on other grounds. Non-qualify the request as no joint return filed.

  5. When inputting a TC 290 .00 on a module with a -A freeze you must also enter TC 971 AC 010 with a posting delay code of 1. The TC 290 .00 releases the -A freeze and the TC 971 AC 010 resets the -A freeze.

  6. When non-qualifying a tax year opened on AIMS, you must use priority code 1 when inputting TC 290 .00.

  7. Refer to IRM 25.15.15 for procedures on mirroring modules.

25.15.7.8.1  (09-01-2006)
Full Paid, CSED and RSED Expired

  1. When the Collection Statute Expiration Date (CSED) is expired and there is No open Refund Statute Expiration Date (RSED) (no payments made within 2 years of the claim date or 3 years from the date the return was filed, whichever is later) the request for relief should be closed as non-qualified. Most of the cases will show the balance due has been cleared via TC 608.

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record through Stage 29 with Activity Description "CSED" & Stage 30 with applicable Activity Description.

    Note:

    Cases with an understatement and open RSED payments must be built for full scope determination. See IRM 25.15.7.7. for Case Building instructions.

25.15.7.8.2  (03-21-2008)
Full Paid and No Payments from the RS

  1. If a tax module reflects that an account is full paid (Status 12):

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record through Stage 29 with Activity Description "FP" and Stage 30 with applicable Activity Description.

    Exception:

    If open TC 420, See IRM 25.15.7.5.3 or TC 922, See IRM 25.15.7.11.14.1.

25.15.7.8.3  (03-21-2008)
Full Paid with Payments from the RS, RSED Expired

  1. If an account is full paid and RS’s payments do not fall within 2 years of the claim date or 3 years from the date the return was filed, whichever is later:

    1. Issue Letter 3279C with the following language: "Your claim is denied because the taxes are fully paid, and you did not file your claim within the required time period to get a refund. IRC 6511 requires that a claim for refund must be filed:
      Within 2 years from the date of payment, or
      Within 3 years from the date the return was filed whichever is later.
      You did not file your claim within these dates."

    2. If Original Assessment, complete ISTSR Input Record through Stage 12 with Activity Description "6015FORB" .

    3. If Understatement, complete ISTSR Input Record through Stage 12 with Activity Description "D6015BRB" .

    4. Update ISTSR Input Record to Stage 14 with the disallowed amount, See IRM 25.15.14.4.1.14.

      Note:

      Understatement cases with open RSED payments from the RS must be built for full scope determination. See IRM 25.15.7.7. for case building instructions.

25.15.7.8.4  (03-21-2008)
Full Paid, No Pending AUR Assessment or TEFRA Issue Still Pending

  1. If the original return was fully paid and the AUR case is now closed with no additional assessment or TEFRA issue still pending, the request for relief is considered a Pre - Assessment No Deficiency (PAND) request. To identify TEFRA issue See IRM 25.15.7.5.3.1(3).

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. If there is a TEFRA issue still pending, advise the taxpayer that he/she may file a request for relief once they are issued a report proposing the assessment.

    3. Complete ISTSR Input Record through Stage 29 with Activity Description "PAND" and Stage 30 with applicable Activity Description.

25.15.7.8.5  (03-21-2008)
Full Paid and RS not Eligible for Refund Because Payments were Jointly Made — Underpayments

  1. When the RS is not entitled to a refund because the payments were jointly made, issue Letter 3661C advising the RS that he/she is not entitled to a refund because the payments were made with joint funds.

    Note:

    Complete ISTSR Input Record through Stage 11 with Activity Description "D6015FORB" for underpayments. Enter the disallowed amount in Stage 14.

25.15.7.8.5.1  (09-01-2006)
Full Paid - Understatement and RS Did Not Solely Make the Payments but is Requesting a Refund

  1. Continue screening case. This is not an automatic disallowance. If the RS is granted relief and there are joint payments, it is up to the RS to prove how much of the joint payment he/she is entitled to and that he/she paid the funds.

25.15.7.8.5.2  (03-21-2008)
Full Paid - Understatement, RS Did Not Solely Make the Payments and is not Requesting a Refund

  1. Close this as non-qualifying with activity "FP" . Update ISTS Stage 29 and Stage 30.

  2. Issue Letter 3657C advising the RS that he/she is not entitled to a refund because the payments were made with joint funds.

25.15.7.8.6  (09-01-2006)
Community Property

  1. If the RS requested relief for a year and there is no issue to consider under IRC 66(c), issue Letter 3666C. Non-qualify the request as full paid due to no balance due and no Community Property Issue. Letter 3666C should be issued.

    Note:

    Payments made by the RS would be an issue to consider

  2. Update ISTSR through Stage 29 with Activity Description " FP" and a History item "COMM PROP" .

  3. Complete Stage 30 with applicable Activity Description.

25.15.7.8.7  (03-21-2008)
Not Timely Filed

  1. IRC 6015 requires a request for relief be filed no later than 2 years from the beginning of the first collection activity after July 22, 1998, against the RS.

  2. See IRM 25.15.3.4.4for information on what constitutes collection activity.

  3. If the request for relief is not filed within 2 years for the first collection activity against the RS:

    1. Issue Letter 3661C and Letter 3279C with the appropriate paragraphs. Address all code sections that apply in the letter.

    2. Complete ISTSR Input Record through Stage 11 with Activity Description

      • "D6015FOS" for underpayment

      • "D6015BS" for understatement

      and Stage 14 with the amount disallowed. See IRM 25.15.14.4.1.11 and IRM 25.15.14.4.1.14 .

      Caution:

      Only use D6015BS when the RS elected IRC 6015(b) and/or IRC 6015(c).

    3. Complete history sheet with the dates of the TC 971 AC 069 with the RS's social security number or the TC 706. Attach TXMOD print with TC 971 AC 069 or TC 706 highlighted as an audit trail.

      Note:

      There must be (2) TC 971 AC 069 present on the account with a corresponding code (i.e. TC 971 AC 066, 067 or 068). One for primary (no X-reference social security number) and one with the x-reference of the secondary taxpayer's social security number. If you are unsure if the RS has received a notice, build the case.

25.15.7.8.8  (03-21-2008)
Taxpayer Request for Withdrawal of Claim

  1. When the RS has notified us verbally or by letter to withdraw their claim:

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record through Stage 29 with Activity Description "WITH" and Stage 30 with applicable Activity Description.

    3. The CSED will be extended to 60 days after the date the request to withdraw was received.

    4. If an open AUR case, e-mail the information to the appropriate primary contact person.

    5. If the RS withdraws the claim after the NRS has been notified, send Letter 3323C to advise the NRS the claim has been withdrawn.

      Note:

      If the withdrawal is done by phone, be sure to document it on Desktop Integration Notes.

      Note:

      A claim cannot be withdrawn after a preliminary determination letter has been issued.

25.15.7.8.9  (09-01-2006)
No Joint Return/RS Filed Own Return

  1. If there is no joint return, RS filed own return and does not qualify for consideration for relief from the operation of community property law under IRC 66(c):

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record with RS as primary TIN through Stage 29 with Activity Description "FS" and Stage 30 with applicable activity description.

25.15.7.8.10  (03-21-2008)
No Return Filed or Account is on Retention Register/Vestigial

  1. If the request for relief includes a year where no return was filed or the account is on the Retention Register/Vestigial, and other years with a return posted will be disallowed per the table below:

    For Non-Filed Year:

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record under RS’s TIN as primary through Stage 29 with Activity Description "NORF" and Stage 30 with applicable description.

    For Retention Register:

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record under primary’s TIN with the appropriate stages and appropriate activity description.

    For Vestigial Years:

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record under the primary’s TIN through Stage 29 with Activity Description "CSED" and Stage 30 with the applicable description.

    Note: Keep years together and if possible, post TC 290 to year where return has been filed that is not on retention register or vestigial.

  2. If the request for relief is for a year where no return was filed or the account is on the Retention Register/Vestigial and no other year is being disallowed, follow the above procedures and place in the No Post File.

25.15.7.8.11  (09-01-2006)
Civil Penalty

  1. If the request is for relief of a Civil Penalty Assessment (MFT 55) or (NMF Civil Penalty MFT 28):

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record through Stage 29 with Activity Description "OT" and Stage 30 with the applicable activity description.

    3. Create ISTS on MFT 30 on calendar year being requested.

    4. Post TC 290 to MFT 30.

      Examples:

      IF THEN
      Claim is for Civil Penalty and RS lists 2004 on Form 8857. RS has balance due on 200406 MFT 55. Joint return was filed for 200412. Create ISTS on 200412 under MFT 30.
      Claim is for Civil Penalty and RS lists 2004 on Form 8857. RS has balance due on 200406 MFT 55. Last joint return filed was 200212, RS filed separately for 200412. Create ISTS on RS’s TIN for 200412 MFT 30.

25.15.7.8.12  (09-01-2006)
Business Master File (BMF) Assessment

  1. If the request is for relief of a BMF assessment (do not control any BMF modules):

    1. Issue Letter 3657C with the appropriate paragraphs.

    2. Complete ISTSR Input Record on MFT 30 for the year requested through Stage 29 with Activity Description "OT" and Stage 30 with the applicable activity description.

25.15.7.8.13  (03-21-2008)
Offer In Compromise (OIC)

  1. If an OIC was previously filed by the RS, look at the indicator on TXMOD to determine who filed the claim: P-Primary taxpayer or S-Secondary taxpayer or B-Both taxpayers. Listed below are OIC transaction codes and their explanation.

    • TC 480 - OIC filed

    • TC 481 - OIC rejected

    • TC 482 - OIC withdrawn

    • TC 483 - TC 480 posted in error

    • TC 780 - OIC accepted (-Y freeze)

    • TC 781 - Defaulted OIC

    • TC 782 - TC 780 processed in error

    • TC 788 - Closing of accepted OIC, removes the Y freeze

  2. If the RS’s offer was denied, continue screening.

  3. If the OIC is pending, LEM 25.15.1.3. .

  4. If the RS was granted an OIC (regardless if defaulted), issue Letter 3661C. See IRM 25.15.7.11.9..

    1. Complete ISTSR Input Record to Stage 11 with the Activity Description "OC" and applicable code section. Use "6015(b) " if understatement and "6015(f)" if underpayment.

    2. Input Stage 14 disallowed amount; see IRM 25.15.14.4.1.14 .

25.15.7.8.14  (03-21-2008)
Injured Spouse Claim

  1. Injured spouse relief applies if an overpayment from a joint module offsets to a separate liability belonging to the other spouse.

  2. When the taxpayer files Form 8857 but it is really an injured spouse claim, the request for relief will be considered non—qualifying. Circle all date stamps in red and issue Letter 3657C to return Form 8857 to RS. Complete ISTSR Input Record through Stage 29 with Activity Description "INJS" and Stage 30 with applicable Activity Description.

  3. If you receive Form 8379, Injured Spouse Claim and Allocation, forward it to the Adjustments area where the return was filed. Issue Letter 3657C with the appropriate paragraphs.

  4. Complete ISTSR Input Record through Stage 29 with Activity Description "INJS" and Stage 30 with the applicable activity description.

  5. Do not input TC 971 AC 065.

  6. Check for TC 570 on the account module. If the Form 8857 was detached from the Form 1040 , you may need to reverse the TC 570 freeze.

25.15.7.9  (09-01-2006)
Forms & File Assembly - First Read

  1. Built and disallowed cases should have the following information:

    1. Folder with the primary TIN on the left side of the folder. Enter the RS’s TIN below the primary TIN (these may be the same). Put the date claim was filed in the middle of the folder.

    2. ISTSR Input Record stapled to front outside.

    3. Activity Record stapled to front inside.

    4. Any CFINK prints or Form 2848 stapled to front of Activity Record.

    5. Claim with correspondence attached in folder.

  2. Non-qualified cases do not require a folder. For case file assembly see IRM 25.15.9.1.25.

    Note:

    It is not necessary to use the Activity Sheet for non-qualified cases. Notate any necessary information i.e. transaction codes input, in "Other Information" on ISTSR Input Record. Attach CFINK print or Form 2848 to the back of the ISTSR Input Record.

25.15.7.10  (03-21-2008)
Full/Limited Scope - Overview

  1. Claims screened by First Read determined to have merit will be built and forwarded for determinations.

25.15.7.11  (03-21-2008)
Cases Assigned to Financial Technicians (FT) for Full Scope Determinations

  1. Cases will be allowed, partially allowed, disallowed or additional information requested from the taxpayer based on the facts and circumstances by applying IRC 6015. Refer to IRM 25.15.3 for information on this IRC section.

    Note:

    When a RS's overpayment offsets to the year for which he/she is requesting relief you will assume he/she wants a refund of the offset that falls within the Refund Statute Expiration Date and work your case accordingly. This applies to IRC 6015(b), (f), and 66(c), if applicable.

  2. Accept oral testimony under penalties of perjury on cases where the evidence warrants. If in doubt, request documentary evidence.

  3. An ISTSR Input Record, Activity Record, and work papers must be completed on all cases.

    Note:

    Work papers are not needed if the information is captured on the history sheet, e.g. full paid closures, CSED expired, etc.

  4. Refer to LEM 25.15.1 for information on Limited Scope.

  5. If the information from the RS and NRS differ (he said/ she said), refer the case to the Financial Specialist.

  6. Refer to IRM 25.15.9.1.12 when the NRS is deceased.

  7. Refer to IRM 25.15.15 for procedures on mirroring modules.

  8. See IRM 25.15.9 for closing instructions if the account is not mirrored.

25.15.7.11.1  (03-21-2008)
Screening Cases - Full Scope

  1. Verify claim is valid. See IRM 25.15.7.5.2.

  2. Check IDRS command codes ISTSRS, TXMOD, IMFOLI, ENMOD or IMFOLE & CFINK. See IRM 25.15.7.5.2.4. for additional information.

  3. Verify questionnaire, letter to the NRS and interim letters were sent to the correct address.

  4. Verify the administrative file ( Form 1040, Form 1040-X, RTVUE and/or examination package) is in case file.

  5. Verify returns in case file have been processed.

  6. Identify and address all other issues.

  7. See IRM 25.15.9 for closing instructions if the account is not mirrored.

25.15.7.11.1.1  (03-21-2008)
No Reply

  1. When there is no reply to requests for information from the taxpayer:

    1. Attempt to contact the RS by telephone to secure the information. Telephone contact attempts must be documented on DI. If no telephone number available or unable to reach the taxpayer, correspond with the taxpayer to secure the information.