25.15.15  Mirror Modules for Requests for Relief from Joint and Several Liability

Manual Transmittal

March 12, 2013

Purpose

(1) This transmits revised IRM 25.15.15, Relief from Joint and Several Liability, Mirror Modules for Requests for Relief from Joint and Several Liability.

Material Changes

(1) Editorial changes have been made throughout this IRM.

(2) IRM 25.15.15.2.1(1) added a caution when the name control on IDRS isn't listed in INOLES.

(3) IRM 25.15.15.2.1.1.2(3) removed.

(4) IRM 25.15.15.2.1.1.3(2) removed.

(5) IRM 25.15.15.2.1.1.4 removed open Collection Due Process as an exception to mirroring.

(6) IRM 25.15.15.2.1.2(2) new.

(7) IRM 25.15.15.2.4.(2)3 changed procedures on re-controlling IDRS.

(8) IRM 25.15.15.3.1(1)8 removed and re-numbered remaining paragraphs.

(9) IRM 25.15.15.3.2 IDRS control information updated.

(10) IRM 25.15.15.3.6(2)5 removed reason code 003 and added paragraph 8.

(11) IRM 25.15.15.4.1(3) revised.

(12) IRM 25.15.15.4.1(4) revised and added paragraph 8 and revised Note.

(13) IRM 25.15.15.4.3(1) added a Note.

(14) IRM 25.15.15.4.4 completely revised.

(15) IRM 25.15.15.5 added reference to Invalid Joint Election instructions.

(16) IRM 25.15.15.7(1) added a Note.

(17) IRM 25.15.15.7.1(3)c revised.

(18) IRM 25.15.15.7.1(6) corrected the explanation for Unpostable code 189–5 and added a Note.

(19) IRM 25.15.15.8 editorial changes.

Effect on Other Documents

IRM 25.15.15, Mirror Modules for Requests for Relief from Joint and Several Liability, dated February 25, 2011, is superseded.

Audience

Examiners processing requests for relief from joint and several liability

Effective Date

(03-12-2013)

Steve Klingel
Director, Reporting Compliance
Wage and Investment Division

25.15.15.1  (03-12-2013)
Overview

  1. Mirroring modules became effective in cycle 4 of 2005. Mirror modules are created as a result of a taxpayer action which could result in one or both taxpayers being held fully or partially liable. The purpose of mirroring a joint Master File Tax (MFT) Code 30 module into two MFT 31 modules, is to reflect each individual's separate tax liability, collection statute expiration date (CSED), and assessment statute expiration date (ASED). Mirroring will also allow collection activity to continue for the Non-requesting Spouse (NRS).

  2. Innocent Spouse, Bankruptcy, Installment Agreements, Offer in Compromise, and Taxpayer Advocate Service are the principle programs currently creating mirror modules. Examination and Appeals may also mirror accounts.

  3. Benefits of this process include:

    • Eliminating the need to prepare Form 12810, Account Transfer Request Checklist

    • Mirroring status and freeze codes

    • Eliminating the need for manual restriction of penalty and interest and manual computation of accrued statutory additions

    • The ability to systemically continue collection activity on one spouse while the claim or petition of the other spouse is pending

    • Replication of MFT 30 module transactions with associated coding

    • Subsequent payments are automatically cross-referenced

    • Systemic computation of CSED and ASED for both spouses

    • The ability to manage and update each spouse’s module separately if required

    • Improving ability to provide accurate and prompt service to taxpayers and their representatives

    • Increasing employee job satisfaction by providing easy accessibility to account information

  4. When it is necessary to do an adjustment to correct an account problem, you need to adjust both MFT 31 accounts unless one MFT 31 account has been satisfied in full.

  5. Information input to MFT 31 is not transmitted to the Social Security Administration (SSA). Do not input item reference numbers to change self employment tax (889), self employment income (878/879) or medicare income (895/896) to MFT 31 accounts. Input the necessary adjustment, without the reference numbers to the MFT 31 account(s). Changes to self employment tax, self employment income, and medicare income must be input to MFT 30. Input transaction code (TC) 290 .00, the appropriate item reference numbers, reason codes and hold code to the joint MFT 30 account.

25.15.15.2  (03-12-2013)
First Read

  1. Once a request for innocent spouse relief has been screened through First Read and determined to be a "qualifying" claim, the joint module will be mirrored into two separate modules on MFT 31. Account Management System (AMS) will generally systemically input the transactions to mirror modules when a claim is opened through First Read.

  2. There are some situations which prevent mirroring of modules, IRM 25.15.15.2.1, Exceptions to Mirroring Modules and other situations where conditions must be resolved prior to mirroring.

  3. If it is necessary to manually input (i.e., the primary taxpayer is deceased and the mail filing requirement (MFR) is 08 or AMS is down) the transactions to mirror the modules, follow the steps below:

    1. Input Transaction Code TC 971 Action Code (AC) 065 with the cross-reference taxpayer identification number (TIN) of the requesting spouse (RS) unless the RS is the primary taxpayer.

    2. Input TC 971 AC 104 with the cross-reference TIN for the primary spouse.

      Caution:

      If a TIN is invalid, which means there is an * behind it, you can not create a MFT 31 module.

    3. Input TC 971 AC 104 with the cross-reference TIN for the secondary spouse.

    4. Input TC 971 AC 145 with a posting delay code (PDC) of 1. This creates the mirror modules for each spouse on MFT 31.

    5. Input TC 131 with a PDC of 3 on the NRS's Integrated Data Retrieval System (IDRS) command code (CC) ENMOD.

      Caution:

      If the primary taxpayer is deceased and there is a Mail Filing Requirement of 08 you will have to wait until the MFT 31 module has been established before posting the TC 131.

    6. A TC 370 will systemically generate to both MFT 31 mirror modules. The TC 370 on the primary TIN will have a document locator number (DLN) of NN25199995000Y. The TC 370 on the secondary TIN will have a DLN of NN25199900000Y. "NN" identifies the location digits of the controlling Julian date of 999 identifies a mirror module. The "950" blocking series denotes the primary TIN. The "000" blocking series denotes the secondary TIN. The "Y" denotes the current processing year.

    7. The MFT 30 and both MFT 31 modules will have a posted TC 400 at this point. All three modules will be in zero balance. The TC 400s generate an M- freeze code so the modules are restricted from any further action unless a TC 402 is input to reverse the TC 400.

    8. Input TC 972 AC 145 with a PDC of 3 on the MFT 30 and both MFT 31 modules.

      Caution:

      If the primary taxpayer is deceased and there is a MFR of 08 you will have to wait until the MFT 31 module has been established before posting the TC 972 AC 145.

    9. Input TC 972 AC 065 with a PDC of 4 on the MFT 30 and the NRS's MFT 31 module.

      Caution:

      If the primary taxpayer is deceased and there is a MFR of 08 you will have to wait until the MFT 31 module has been established before posting the TC 972 AC 065.

    10. Each of these transactions is input separately via the IDRS CC REQ77. Use the claim received date as the transaction date for each transaction.

    11. A TC 971 AC 110 will generate in each MFT 31 module with the cross-reference TIN of the other spouse. This causes the two MFT 31 modules to point to each other. Payments posted to one MFT 31 module should be systemically duplicated as a credit on the other MFT 31 module as long as the TC 971 AC 110 transactions are not reversed off the MFT 31 modules or there is a designated payment code of 31. The cross-reference payment will be identified by TC 290 .00 and TC 766 $$$ credit reference number (CRN) TC 337. The credit reduces the module balance but is not refundable.

25.15.15.2.1  (03-12-2013)
Exceptions to Mirroring Modules

  1. There are some situations preventing mirroring of modules . The modules which can’t be mirrored will have to be transferred to Non-Master File (NMF), see IRM 25.15.9.1.22, Form 12810 - Special Considerations. The situations preventing mirroring and requiring transfer to NMF are:

    • If the primary or secondary taxpayer has an Internal Revenue Service Number (IRSN), Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number.

    • Do not mirror or attempt to validate a TIN if either taxpayer has an invalid TIN because the taxpayer did not update their name with SSA. If the case is fully or partially allowed, send case to Processing when you are ready to close the case. If case is fully or partially allowed, the module will be transferred to NMF. Indicate "Invalid TIN" on non-mirrored Form 3465, Adjustment Request. If case is disallowed, input TC 290 .00 on MFT 30 modules.

      Caution:

      There might not be an * behind the TIN indicating that it is invalid. If the name control on IDRS isn't listed in INOLES category IMF name control or SSA name control, it is considered an invalid TIN.

    • Secondary taxpayer is deceased.

    • MFT 31 transactions were already generated, e.g., TC 971 AC 100, AC 102, AC 103, AC 104, etc. was previously input to generate MFT 31.

    • Any innocent spouse claim with a Criminal Investigation (CI) freeze (-Z/Z-) requires contact with CI to determine if the taxpayers can be contacted. If CI agrees contact with the taxpayers can be made, continue screening but do not mirror the module. Note on Innocent Spouse Tracking System Record (ISTSR) Input Record the module will not be mirrored.

25.15.15.2.1.1  (03-21-2008)
Modules Requiring Additional Actions Prior to Mirroring

  1. Modules requiring additional actions prior to mirroring are:

    1. Modules with a credit balance. The credit balance must be resolved prior to mirroring the module. IRM 25.15.15.8 Resolving Credit Balance.

    2. Modules with an unresolved unpostable condition. The unpostable condition must be resolved prior to mirroring the module. IRM 25.15.15.7, Resolving Mirroring Unpostable Transaction Codes.

25.15.15.2.1.1.1  (07-17-2009)
Open Audit Information Management System (AIMS)

  1. Do not mirror these modules.

25.15.15.2.1.1.2  (03-12-2013)
Open Offer in Compromise (OIC)

  1. Modules containing an open TC 480 (-Y freeze) indicate a processable pending Offer in Compromise (OIC) filed by the Requesting Spouse (RS) will be mirrored without making contact with OIC.

  2. Modules containing an open TC 780 (-Y freeze) indicate an allowed OIC for the NRS will not be mirrored during First Read. Note in the upper right corner of the ISTSR Input Record "not mirrored/TC 780 NRS."

25.15.15.2.1.1.3  (03-12-2013)
Open Bankruptcy

  1. Modules containing an open bankruptcy for the NRS, TC 520 with closing codes 60-67, 81, 83, or 85-89 will not be mirrored during First Read. Continue screening. Note in the upper right corner of the ISTSR Input Record "not mirrored/bankruptcy."

25.15.15.2.1.2  (03-12-2013)
Modules Requiring Additional Actions After Mirroring Transactions Failed to Create Master File Tax (MFT) 31 Modules

  1. When TC 971 AC 104 for both taxpayers are posted to the MFT 30 module, but mirroring failed and it can't be corrected, you must input a TC 972 AC 104 for both taxpayers back on the MFT 30 module. This leaves an audit trail showing mirroring was attempted but failed and can't be corrected.

  2. If a case could not be mirrored because it met one of the exceptions for mirroring, but no longer meets that exception and the case is being disallowed, you do not need to mirror it.

25.15.15.2.2  (03-21-2008)
Posting Transaction Code (TC) 400

  1. This will post systemically due to the TC 971 AC 145.

25.15.15.2.3  (03-21-2008)
Posting Transaction Code (TC) 402

  1. When the M- freeze is present, take the following actions using the claim received date for all IDRS CC REQ77 transaction date entries.

    1. Verify there is one joint MFT 30 module and one MFT 31 module for each spouse.

    2. Input TC 972 AC 145 to the joint MFT 30 module and both MFT 31 modules. This will post the TC 402 on the modules. A TC 971 AC 132 will systemically post to the joint MFT 30 module only. This will generate a TC 604 credit, creating a zero balance.

    3. Input TC 972 AC 065 to the joint MFT 30 modules and the NRS's MFT 31 module. The date will be the same date as the TC 971 AC 065. Use a PDC of 1 cycle. This will reverse the L- freeze on the joint MFT 30 and the NRS's MFT 31 module.

    4. Reverse the TC 130 on the NRS's entity module if it was input as a result of the innocent spouse claim and all additional innocent spouse claims have been mirrored or closed.

25.15.15.2.4  (03-12-2013)
Purging First Read Inventory

  1. Once all documents and taxpayer responses have been received or 45 days have elapsed, the case is ready to be purged from First Read inventory and forwarded to Full Scope for a determination.

  2. Prior to purging the case:

    1. Update the Innocent Spouse Tracking System (ISTS) to Stage 05 and appropriate team number.

    2. Note the innocent spouse (IS) case history sheet with the date and your initials.

    3. Re-control IDRS control to 0297955555.

25.15.15.3  (07-17-2009)
Full Scope

  1. When granting full or partial relief and the module has not been mirrored, IRM 25.15.15.2, First Read for procedures on mirroring the modules. Some modules have conditions prohibiting mirroring.

25.15.15.3.1  (03-12-2013)
Relief Allowed in Full and No Refund Due

  1. When relief has been allowed in full and there is no refund to be issued, the case will be closed by using the claim received date as the transaction date for all IDRS CC REQ77 inputs.

    Exception:

    When inputting the TC 972 AC 110 use the same date as the TC 971 AC 110 date.

    1. Input TC 971 AC 131 on the RS’s MFT 31 module. Enter "98" as the cross reference (XREF) MFT. In Remarks enter "NSD - IS claim" This will generate a TC 604 (credit) to zero out the module balance.

      Note:

      If the module is completely mirrored and there is no balance due or is in credit status, do not input TC 971 AC 131 when granting relief (full or partial) because it will go unpostable. Verify there is no balance due by checking IDRS CC INTST.

      Note:

      For a TC 971 AC 131 to post there must be an L- freeze code. If no L- freeze code, input TC 971 AC 065 with no PDC, TC 971 AC 131 with a PDC of 1, and TC 972 AC 065 with a PDC of 2.

    2. Input TC 972 AC 065 (PDC of 1) on the RS’s MFT 31 module to release the L- freeze. See IRM 25.15.2.4.2(7) and (8), Innocent Spouse Indicator TC 971/972 for additional information for what date to enter.

    3. Input TC 972 AC 110 on the RS’s MFT 31 module with a cross-reference to the NRS’s TIN. Use a PDC of 1. The TC 971 AC 110 causes the MFT 31 modules to point to each other. Since the RS has been relieved of this debt, this is no longer required.

    4. Input TC 972 AC 110 on the NRS’s MFT 31 module with a cross-reference to the RS’s TIN.

    5. Input TC 290 .00, blocking series 05 on the RS’s MFT 31 module to close the case. Use a PDC of 2 cycles. Follow IRM 25.15.9.1.23, Final Purge/Transfer Complete for complete closing instructions.

    6. Note the innocent spouse case history sheet with the date, your initials and all actions taken.

    7. Update the ISTS to Stage 30.

    8. Close the IDRS control base.

    9. Send the case to Files.

25.15.15.3.2  (03-12-2013)
Relief Allowed in Full and Refund Due

  1. When relief has been allowed in full and there is a refund to be issued, the Form 3465, Adjustment Request, will be sent to the Processing Team for resolution. The Full Scope Technician will:

    1. Prepare Form 3465 requesting the Processing Team transfer offset or manually refund specific credits/payments.

    2. Update the IDRS control 02XXX00201. XXX will be the number for your team.

25.15.15.3.3  (03-21-2008)
Partial Relief Allowed and No Refund Due

  1. When relief has been allowed in part (true partial, see IRM 25.15.9.1.6(2), Partially Allowed Requests Full Scope Examiners, for definition) but the Full Scope Technician can determine there are enough credits and payments to fully satisfy the RS’s liability, the case will be closed in Full Scope.

  2. IRM 25.15.15.3.1, Relief Allowed in Full and No Refund Due, for closing the case except in Step 1 use "96" as the XREF MFT when inputting TC 971 AC 131 to generate a TC 604 (credit) to zero out the module. This indicates relief was allowed in part but the RS’s liability has been fully satisfied.

25.15.15.3.4  (07-17-2009)
Partial Relief Allowed with Refund or Balance Due

  1. When relief has been partially allowed, the case will be sent to the Processing Team for resolution. The Processing Examiner will make a tax adjustment to the RS’s MFT 31 module for the tax, and reverse the Earned Income Tax Credit (EITC) and penalties the RS is no longer responsible for. The NRS’s MFT 31 module will not be adjusted. Full Scope will:

    1. Prepare Form 3465, Adjustment Request, requesting the Processing Team adjust the RS’s MFT 31 module to show the corrected liability as listed below.

    2. Provide the Processing Examiner with the amount of relief allowed for each of the following transactions: TC 150, TC 290, TC 300, TC 765, TC 240, TC 360, and TC 350. A TC 806 must be addressed if it is to be reversed or reduced as part of the relief.

    3. The remarks section of Form 3465 should be used to provide all adjustment information.

    4. Address all payments and credits to be refunded or offset.

    5. Note the innocent spouse case history sheet with the date, your initials, and all actions taken.

    6. Update the IDRS and the ISTS to Stage 27.

    7. Update the IDRS control base.

    8. Forward the case to the Processing Team.

25.15.15.3.5  (11-20-2009)
Relief Disallowed

  1. When relief has been disallowed, Full Scope will close the case by taking the following actions:

    1. Input TC 972 AC 065 on the RS’s MFT 31 module to release the L- freeze. Refer to IRM 25.15.2.4.2(7), Innocent Spouse Indicator Transaction Code (TC) 971/972, for instructions on the correct transaction date to use.

    2. Input TC 290 .00, blocking series 05 on the RS’s MFT 31 module to close the case.

    3. Note the innocent spouse case history sheet with the date, your initials, and all actions taken.

    4. Update the ISTS to Stage 30.

    5. Close the IDRS control base.

    6. Send case to Files.

      Note:

      The CSED will be systemically extended for the number of days between the TC 971 AC 065 and the TC 972 AC 065.

25.15.15.3.6  (03-12-2013)
Barred Statute One Signature (BSOS)

  1. As recently as 1998, deficiency assessments sometimes were made on joint accounts based on one signature on a waiver of assessment form if certain criteria were met. This procedure is no longer allowed. Some of these erroneous assessments against the non-signing spouse cannot be reassessed correctly and must be abated. These cases are referred to as "Barred Statute One Signature (BSOS)" . These barred statutes are attributable to a policy decision and not to any employee actions or lack of actions. In lieu of completing Form 3999, Statute Expiration Report , a copy of the memorandum found on the innocent spouse website http://win.web.irs.gov/innocent_spouse.htm. must be completed, approved by the manager, and placed in the administrative file.

  2. If the module has been mirrored, the case will be closed by Full Scope following the procedures listed below:

    1. Input TC 971 AC 131 on the RS's MFT 31 module. Enter 98 as the XREF MFT. In "Remarks" enter NSD-IS claim. This will generate a TC 604 (credit) to zero out the module balance.

    2. Input TC 972 AC 065 with a PDC of 1 on the RS's MFT 31 module to release the L- freeze. See IRM 25.15.2.4.2(7), Innocent Spouse Indicator Transaction Code (TC) 971/972, for additional information for what date to enter.

    3. Input TC 972 AC 110 on the RS's MFT 31 module with a cross-reference to the NRS's Taxpayer Identification Number (TIN). Use a PDC of 1. The TC 971 AC 110 causes the MFT 31 modules to point to each other. Since the RS has been relieved of this debt, this is no longer required.

    4. Input TC 972 AC 110 on the NRS's MFT 31 module with a cross-reference to the RS's TIN.

    5. Input TC 290 .00, blocking series 05, reason code 097, source code 2 and appropriate hold code on the RS's MFT 31 module to close the case. Use a PDC of 2 cycles.

    6. Update the ISTS to Stage 29 with activity "BSOS" and Stage 30 with activity "ACCTCORR" .

    7. Close the IDRS control base.

    8. Notate the innocent spouse case history sheet with the date, your initials and all actions taken.

    9. Send case to Files.

  3. If the module was not mirrored follow procedures in IRM 25.15.9.1.4, Barred Statute One Signature (BSOS) .

25.15.15.4  (03-21-2008)
Processing Team

  1. The procedures in this Internal Revenue Manual (IRM) are only for mirrored modules. Follow IRM 25.15.9, Account Processing of Requests for Relief from Joint and Several Liability, for procedures involving only 1 MFT 31 module or a Non Master File (NMF) module.

  2. Processing Team will close the partially allowed claims when there is still a balance due for the RS or a refund is or may be required.

  3. Processing Team will process Form 3465, Adjustment Request, on fully allowed claims with a refund due to the RS.

25.15.15.4.1  (03-12-2013)
Partially Allowed Claims

  1. You can now make a tax adjustment to reduce the liability for one taxpayer while leaving the other taxpayer fully liable for the balance due.

  2. Full Scope will prepare Form 3465, Adjustment Request, requesting a tax adjustment be made to the RS’s MFT 31 module. Full Scope is responsible for providing all tax, return related penalty, withholding credit transaction codes and amounts to be adjusted.

  3. If a restricted TC 340 exists, refer to IRM 25.15.9.1.14 , Interest Consideration, for additional information.

    Note:

    Do not address computer generated penalties. Unrestricted penalties (TC 166, TC 276, and TC 176) will adjust systemically with your tax adjustment. You must address restricted failure to pay and estimated tax penalties (TC 160, TC 270, and TC 170).

  4. All closing transactions will be made to the RS’s MFT 31 module. If RS is entitled to a refund, input credit transfer or manual refund as appropriate. For additional information on manual refunds, IRM 25.15.15.4.3., Manual Refund of TC 670 Payments, after refund posts, or if no refund due, take the following actions on RS's MFT 31 module:

    1. Prepare Form 11272, Associable IDRS Input Document Label, to adjust the RS’s MFT 31 module. Use the figures provided by Full Scope.

    2. Input the adjustment on the IDRS using CC REQ54. Use Source Code (SC) 2, Reason Code (RC) 097/098 and Hold Code (HC) 0 on the adjustment. Use of this HC will allow the RS to receive an adjustment notice with the corrected balance due. Research the module to determine if a Priority Code (PC) is needed on the adjustment.

    3. Use Blocking Series 05 and re-file the original document.

    4. Input TC 972 AC 065 on the RS’s MFT 31 module to release the L- freeze. Use a PDC of 1 cycle.

    5. Note the innocent spouse history sheet with actions taken, date, and your initials.

    6. Close the IDRS control base.

    7. Update the ISTS to Stage 30.

    8. When all closing actions have been completed, send the case to Files.

    Note:

    The CSED will systemically update if the transaction date on the TC 972 AC 065 is later than the posted TC 971 AC 065. The CSED will be extended for the number of days between the TC 971 AC 065 and the TC 972 AC 065.

25.15.15.4.2  (03-21-2008)
Mirrored Payments and Credits

  1. Any payment or credit without a designated payment code of 31 posting to a MFT 31 mirror module with an unreversed TC 971 AC 110 will be systemically cross-referenced to the related mirror module.

  2. Credits and payments transferred in or out of the module should be credited or debited, as appropriate, on the cross-reference module systemically.

  3. The mirrored credit or debit should post systemically to the cross-reference spouse’s MFT 31 mirror module as an adjustment. See below for an example of how this will work.
    Credit - TC 290 .00, TC 766 $XXX.00 CRN 337
    Debit - TC 290. 00, TC 767 $XXX.00, CRN 337
    The transaction date will match the payment date on the cross-reference MFT 31 module.

    Example:

    John and Mary Newcomb filed a joint 2008 balance due tax return. Mary filed an innocent spouse claim on 3-24-2011. The claim is qualifying and First Read input the transaction codes to mirror the module.
    Before the TC 971 AC 065 and the mirroring transaction codes can post, Mary’s refund from her 2010 return claiming single, head of household or married filing separate is offset to the joint 2008 module on 3-28-2011. This payment is mirrored to both MFT 31 modules along with the rest of the MFT 30 transactions.
    Mary’s MFT 31 module shows a TC 706 credit dated 03282011 for $1,000.
    John’s MFT 31 module shows a TC 706 credit dated 03282011 for $1,000.
    The Processing Examiner will reverse Mary’s TC 706 credit with a TC 701 and post it back to Mary’s 200812 module as a TC 821 refund.
    When Mary’s MFT 31 credit transfer posts, John’s MFT 31 module will post a TC 290 .00, TC 767 $1,000 CRN 337 (debit)

    Note:

    If a systemic debit or credit does not post to either MFT 31 then a manual adjustment may be required.

  4. Payments posting to one MFT 31 module will not mirror to the cross-reference MFT 31 module for one cycle. TC 706 takes two cycles to mirror to the cross-reference MFT 31 module.

    Note:

    TC 806 should systemically mirror, a TC 807 will not systemically mirror.

  5. The TC 971 AC 110 should remain on both taxpayers’ MFT 31 mirror modules until one of the modules reach zero or credit balance. Once either of the modules reach zero balance, both TC 971 AC 110 transactions should be reversed using TC 972 AC 110 and the appropriate cross-reference Taxpayer Identification Number (TIN).

25.15.15.4.3  (03-12-2013)
Manual Refund of Transaction Code (TC) 670 Payments

  1. TC 670 payments to be refunded as part of the innocent spouse claim determination will require a manual refund. Use existing procedures to prepare a manual refund, see IRM 25.15.9.1.18, Manual Refunds.

    Note:

    Certain designated payment codes can't be refunded. For additional information see IRM 25.15.9.1.16, Credit and Payment Disposition.

  2. Additional steps must be taken to correct the cross-reference MFT 31 module. A manual refund (TC 840) will not cause a systemic debit of the cross-reference MFT 31 payments.

  3. Tax adjustments must be made to the cross-reference MFT 31 to debit the module for each payment, or part of a payment included in the manual refund.

    Example:

    A $100.00 payment dated 6-25-2009 is manually refunded from the secondary spouse’s MFT 31 module.
    On the primary spouse’s MFT 31 mirror module, input an IDRS CC REQ54 adjustment. Input TC 290 .00,() CRN 337 $100.00-, Return Processable Date (RPD) 06-25-2009.

    Note:

    For every TC 670 payment refunded from one MFT 31 module, a separate IDRS CC REQ54 adjustment must be made to the other MFT 31 module. The RPD must match the received date of the TC 670 payment being debited/reversed. Also, a CRN 337 can be input as a positive or negative figure. A negative figure (-) is required in these situation.

25.15.15.4.4  (03-12-2013)
Closing a Fully Allowed Claim After Issuing a Refund

  1. On a fully allowed claim where a TC 971 AC 131 will be input after the credit transfer, complete the credit transfer and debit the X-REF Master File Transcript (MFT) 31 at the same time. Reverse the TC 971 AC 110 on both taxpayers' MFT 31 to stop any further mirroring. Close the case following the steps in IRM 25.15.15.3.1, Relief Allowed in Full and No Refund Due.

  2. On a true partial claim with a refund, do the credit transfer and/or manual refund. Monitor the account to ensure the credit transfer or manual refund posts in 2-3 weeks, then close the case following the steps in IRM 25.15.15.3.1, Relief Allowed in Full and No Refund Due.

25.15.15.5  (03-12-2013)
Forgery or Duress

  1. When it has been determined that the RS is not liable because he/she did not sign the joint return and there was no tacit consent, or it was signed under duress, leave the module mirrored. Zero out the RS's module by following the instructions in IRM 25.15.15.3.1, Relief Allowed in Full and No Refund Due. If RS was the secondary taxpayer, then remove RS's name and correct the filing status on the NRS's IDRS CC ENMOD. If a change in the NRS's filing status results in an increased tax liability, a notice of deficiency may be required.

  2. If RS was the primary taxpayer, then remove the NRS's name and correct the filing status on the primary taxpayer's IDRS CC ENMOD.

  3. See IRM 25.15.7.10.13.6 Correcting an Invalid Joint Election for more information.

25.15.15.6  (07-17-2009)
Reversing a Mirrored Module

  1. Verify that the module should be reversed. To reverse a mirrored module you must input the transactions on MFT 30 and wait until all transactions posted before inputting transactions to MFT 31.

  2. On the MFT 30 module input:

    1. Two TCs 972 AC 104 with the XREF Taxpayer Identification Number (TIN) of the primary and secondary taxpayer.

    2. TC 972 AC 132 (the date of the TC 972 AC 132 should be the same as the original TC 971 AC 132) using a PDC of 1 cycle. This will generate a TC 605 (debit). This reopens the module balance on MFT 30.

  3. After verifying all required transactions listed above posted to the MFT 30 module, input the following transactions on both MFT 31 modules,

    1. TC 972 AC 104(s) with appropriate X-reference.

    2. TC 971 AC 065 (if there is no L- freeze). This is required before the next transaction listed below will post.

    3. TC 971 AC 131. This will adjust the MFT 31 modules to zero.

    4. TC 972 AC 065.

    .

25.15.15.7  (03-12-2013)
Resolving Mirroring Unpostable Transaction Codes

  1. If the mirroring process should be stopped (tried to mirror a module that will not mirror because it is an exception to mirroring, etc.), close the mirroring monitor control base and update the case file. Prepare Form 3465, Adjustment Request, if the module needs to be set-up on Non Master File (NMF) because it can’t be set up on MFT 31.

    Note:

    Reverse any TC 971 AC 104 when the mirroring process will not be completed.

  2. To determine which transaction code went unpostable, match the DLN on the listing with the IDRS CC TXMOD.

  3. If the unpostable transaction code occurred in another campus, you need to input @ with the campus code on IDRS CC UPTIN.

  4. To determine the cycle the transaction code went unpostable, look up IDRS CC UPTIN, there is a sequence number of the unpostable transaction code under the taxpayer’s Taxpayer Identification Number (TIN). The first six numbers identifies the cycle the TC went unpostable.

    Example:

    201232002672 means the transaction code went unpostable in cycle 201232. The posting cycle next to the Deleted Unpostable (DU) on IDRS CC TXMOD is the cycle it came back to TXMOD, not the actual cycle it went unpostable. If the TC 400 posted in cycle 201232 and the TC 971 AC 145 shows a sequence number on IDRS CC UPTIN of 201232, you know the PDC was not input. Re-input the TC 971 AC 145, but you no longer need a PDC.

  5. If you have an unpostable transaction code, verify that the CSED is still open. You cannot correct an unpostable TC if the CSED has expired. A TC 608 will be posted when the CSED expires.

  6. Verify all mirror transactions codes have posted correctly, not just the unpostable transactions. Start at the TC 971 AC 065 and work down the IDRS CC TXMOD to ensure all prior required transaction codes have posted.

    Note:

    If a TC 402 will not post, you cannot move module to NMF, you will have to reverse the mirrored module, IRM 25.15.15.6, Reversing a Mirrored Module.

  7. If the L- freeze was released in error, it needs to post back to the module until the balance due is gone.

  8. Do not re-input transactions unless you know why they went unpostable.

  9. Note the correction and reason for the unpostable on your weekly unpostable listing.

25.15.15.7.1  (03-12-2013)
Common Mirroring Unpostable Transaction Codes

  1. Listed below are the most common mirroring transaction codes that go unpostable, and procedures on how to correct them.

  2. TC 971 AC 104

    1. Check for exceptions to mirroring, -L, -V, -W, -Z or Z- freezes on the IDRS CC TXMOD, and previous TC 971 AC 10X prior to 2005, etc.

    2. Check IDRS CC IMFOLT and look at the name line and secondary spouse’s Taxpayer identification Number (TIN), follow procedures on exceptions to mirroring if invalid secondary TIN. If secondary spouse’s TIN is missing, input TIN on IDRS CC ENREQ and wait to see if it is valid before mirroring. Look for errors with the name line, e.g., spacing. Correct the name line prior to mirroring.

  3. TC 971 AC 065, TC 972 AC 065, TC 971 AC 110, TC 972 AC 110, TC 971 AC 145, and TC 972 AC 145:

    1. Ensure both TC 971 AC 104(s) have posted.

    2. Look at posting cycle of TC 402 and compare with your transaction code. You may need to update IDRS CC UPTIN for the cycle the transaction unposted.

    3. Look for possible invalid secondary TIN that was validated. This can be identified by SSA name controls not matching the current name control on IDRS CC INOLES. Nothing will post after a TC 400, if invalid. Stop trying to mirror. Confer with your Lead for resolution.

  4. TC 971 AC 131 will not post if there is no balance due or if there is no TC 971 AC 065 posted. It may be necessary to re-input TC 971 AC 065, then input TC 971 AC 131 with a PDC of 1 and a TC 972 AC 065 with a PDC of 2.

  5. TC 972 AC 065 may have already posted. If there is no open L- freeze on the account the TC 972 AC 065 will not post. Ensure there is no data input error and the XREF TIN is correct.

  6. See the table below for common unpostable codes for mirroring, the explanation and the resolution:

    Unpostable Code Explanation Resolution
    151 159-0 Secondary taxpayer is deceased or has an invalid TIN Check IDRS CC INOLES for SSA name controls under the secondary taxpayer, if the TIN does not have an "*" , but the name control is valid per SSA, it was manually validated. The account will mirror but nothing will post after the TC 400.
    168 Name Mismatch TIN on TC 972 AC 065 must be corrected to match the TC 971 AC 065 you are trying to reverse.
    171-2 TC 971 AC 131 attempting to post to a module without an L- freeze Input TC 971 AC 065, TC 971 AC 131 with a PDC of 1, and TC 972 AC 065 with a PDC of 2.
    186-0 Post delay problem Need to look at the cycles on IDRS CC UPTIN to ensure the transaction codes posted in order.
    189-5 Item doesn’t exist, e.g., TC 971 AC 131 trying to post when there is no balance due Verify there is no balance due by checking IDRS CC INTST.
    197-5 TC 400 or TC 971 AC 145 tried to post to a module with a credit balance Resolve credit balance.

    Note:

    Determine if the transactions should be re-input. If the case is progressed enough, it may not be necessary to mirror the modules. Check IDRS CC ISTSR. Close the mirroring monitor control base and update the case file. Example: If it is close to the end of the 90 day period when a case was disallowed for an underpayment, there is no need to mirror the module. Another example would be if we are granting full relief and the MFT 31 module for the NRS was established, there is no need to try to get the MFT 31 module for the RS to post because you would later input a false credit to relieve him/her of the liability.

    Example:

    If it is close to the end of the 90 day period when a case was disallowed for an underpayment, there is no need to mirror the module. Another example would be if we are granting full relief and the MFT 31 module for the NRS was established, there is no need to try to get the MFT 31 module for the RS to post because you would later input a false credit to relieve him/her of the liability.

    Note:

    When an account should not have been mirrored in First Read because it met an exception for mirroring, but it no longer meets the exception for mirroring when Full Scope has determined to disallow the claim; it is not necessary to mirror. If the claim is allowed or partially allowed, mirror the case.

25.15.15.8  (03-12-2013)
Resolving Credit Balance

  1. Check for payments, was the taxpayer making regular payments or a very large payment and the account is now full paid? If yes, look for another balance due and transfer the money as long as the payment is less than the balance due. Transfer credit to the oldest remaining balance due.

  2. If the IDRS CC INTST shows the module is not full paid, prepare Form 3465, Adjustment Request, and request that the accruals be forced to post to the module. To force accruals to post:

    1. on unrestricted modules, input TC 290 .00, priority code 5 and hold code 4.

    2. on module in IDRS Status 23, use IDRS CC MFREQC.

  3. If the payment on MFT 30 was intended for that tax year but the balance due is on MFT 31, transfer the payment to the MFT 31 module.

    Note:

    When transferring payments or overpayments as a result of an adjustment, the Refund Statute Expiration Date (RSED) must be taken into consideration. If the RSED has expired the money cannot be transferred to another module. Move the money to Excess Collection.


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