Part 3. Submission Processing

Chapter 11. Returns and Documents Analysis

Section 6. Data Processing (DP) Tax Adjustments

3.11.6 Data Processing (DP) Tax Adjustments

Manual Transmittal

November 06, 2023

Purpose

(1) This transmits revised IRM 3.11.6, Returns and Documents Analysis, Data Processing (DP) Tax Adjustments.

Material Changes

(1) IRM 3.11.6 - Updated CIS to CII throughout the IRM because the name of the system changed. IPU 23U0060 issued 01-09-2023.

(2) IRM 3.11.6 - Updated Correspondence Imaging System (CIS) to Correspondence Imaging Inventory (CII) throughout the IRM because the name of the system changed. IPU 23U0060 issued 01-09-2023.

(3) IRM 3.11.6 - Updated CIS/AM to AM throughout the IRM because the name of the system changed. IPU 23U0060 issued 01-09-2023.

(4) IRM 3.11.6 - Updated routing instructions to Correspondence Imaging System (CIS) has been changed to Image Control Team (ICT) throughout the IRM because the system changed. IPU 23U0060 issued 01-09-2023.

(5) IRM 3.11.6 - Updated CIS AM to AM throughout the IRM because the name of the system changed. IPU 23U0060 issued 01-09-2023.

(6) IRM 3.11.6 - Replaced CISAMTOADJ notation with TOAMTOADJ throughout the IRM because the name of system changed. IPU 23U0060 issued 01-09-2023.

(7) IRM 3.11.6 - Changed MEFP or MEFS to CII throughout the IRM. In some instances the phrase was removed instead of replaced to provide clarity. IPU 23U0277 issued 02-17-2023.

(8) IRM 3.11.6.1(1), Program Scope and Objectives - Removed ISRP since there are no processing instructions for ISRP to follow.

(9) IRM 3.11.6.1.1(1), Background - Removed old paper processing instructions now that all SP 1040-X workflows are scanned to CII. IPU 23U0658 issued 05-25-2023.

(10) IRM 3.11.6.1.6(1), Acronyms - Updated the table to address the CIS update. IPU 22U1142 issued 12-01-2022.

(11) IRM 3.11.6.1.7, Related Resources - Removed local procedure instructions since all SP 1040-X cases are worked through CII and removed extra links.

(12) IRM 3.11.6.1.7(1), Related Resources - Updated the table to address the CIS update. IPU 22U1142 issued 12-01-2022.

(13) IRM 3.11.6.1.7, Related Resources - The entire subsection was revised to consolidate the various resources used when processing amended returns. IPU 23U0277 issued 02-17-2023.

(14) IRM 3.11.6.2, General Form 1040-X Information - The subsection has been rewritten to make it more user friendly.

(15) IRM 3.11.6.2(6), General Form 1040-X Information - Removed CP notice information to consolidate instructions. IPU 23U0106 issued 01-17-2023.

(16) IRM 3.11.6.2(3), General Form 1040-X Information - The entire subsection was revised to consolidate instructions now that all SP 1040-X workflows are accessed through the Correspondence Imaging Inventory system. IPU 23U0277 issued 02-17-2023.

(17) IRM 3.11.6.2.1, Processing Time Frames and Suspense Time Frames - Removed paper processing instructions from since all SP 1040-X cases are worked through CII. The tax year has been updated for the new filing season.

(18) IRM 3.11.6.2.1, Processing Time Frames and Suspense Time Frames - The subsection was revised to make the processing time frame consistent. IPU 23U0277 issued 02-17-2023.

(19) IRM 3.11.6.2.1.1, 1040-X Suspense Activity Codes - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(20) IRM 3.11.6.2.4, Integrated Data Retrieval System (IDRS) Access - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(21) IRM 3.11.6.2.5, Document Perfection Operation (DPO) Submission Processing (SP) 1040-X Organization Function Program (OFP) Information - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(22) IRM 3.11.6.2.5(3), Document Perfection Operation (DPO) Submission Processing (SP) 1040-X Organization Function Program (OFP) Information - Added category codes to the table to help clarify which OFP to use. IPU 23U0060 issued 01-09-2023.

(23) IRM 3.11.6.2.5, Document Perfection Operation (DPO) Submission Processing (SP) 1040-X Organization Function Program (OFP) Information - Moved the subsection (formerly 3.11.6.1.8) and the OFP for CP Notices received through the DUT has been added. IPU 23U0277 issued 02-17-2023.

(24) IRM 3.11.6.2.5(3), Document Perfection Operation (DPO) Submission Processing (SP) 1040-X Organization Function Program (OFP) Information - Removed the Austin only designation since all sites will process all SP 1040-X workflows. IPU 23U0611 issued 05-09-2023.

(25) IRM 3.11.6.2.5.1, Daily Work Record (DWR) - New subsection to describe the DWR. IPU 23U0277 issued 02-17-2023.

(26) IRM 3.11.6.2.6, Systems - New subsection to describe the various systems used when processing amended returns. IPU 23U0277 issued 02-17-2023.

(27) IRM 3.11.6.2.6.1, IDRS Command Codes (CC) - New subsection to list all CCs used when processing amended returns. IPU 23U0277 issued 02-17-2023.

(28) IRM 3.11.6.2.6.1(1), IDRS Command Codes (CC) - Removed CC no longer needed for Austin to review SP 1040-X Memphis due to system change. IPU 23U0611 issued 05-09-2023.

(29) IRM 3.11.6.2.6.2, Integrated Automation Technologies (IAT) Tools - New subsection to list all IAT tools used when processing amended returns. IPU 23U0277 issued 02-17-2023.

(30) IRM 3.11.6.2.6.3, Correspondence Imaging Inventory (CII) Roles- Updated title and instructions to address the change to CIS. IPU 22U1142 issued 12-01-2022.

(31) IRM 3.11.6.2.6.3, Correspondence Imaging Inventory (CII) Roles - Moved and revised subsection to included CII System. IPU 23U0277 issued 02-17-2023.

(32) IRM 3.11.6.3, Controlling CII Cases on the Integrated Data Retrieval System (IDRS) - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(33) IRM 3.11.6.3, Controlling CII Cases on the Integrated Data Retrieval System (IDRS) - Moved and renamed the subsection (formerly Controlling Cases on the Integrated Data Retrieval System (IDRS)). Then revised the subsection to reflect the systemic controlling of CII cases, and to add the Memphis remote site. IPU 23U0277 issued 02-17-2023.

(34) IRM 3.11.6.3(2), Controlling CII Cases on the Integrated Data Retrieval System (IDRS) - Removed Memphis from the table to reflect the current generic queues. IPU 23U0386 issued 03-13-2023.

(35) IRM 3.11.6.3(2), Controlling CII Cases on the Integrated Data Retrieval System (IDRS) - Site queue number updated, and instructions were added to address queue number changes to ensure consistency. IPU 23U0611 issued 05-09-2023.

(36) IRM 3.11.6.3(5), Controlling CII Cases on the Integrated Data Retrieval System (IDRS) - Deleted paragraph 5 and incorporated information into a new subsection. IPU 23U0763 issued 06-22-2023.

(37) IRM 3.11.6.3(1), (2), and (5), Controlling CII Cases on the Integrated Data Retrieval System (IDRS) - Paragraphs 1 and 2 were rewritten to address CII auto-distribution. The note in paragraph 2 has been deleted and the information rewritten and added to new paragraph 5. IPU 23U0883 issued 08-10-2023.

(38) IRM 3.11.6.3.1, Submission Processing CII Generic Queue Management - Deleted subsection to remove manual distribution instructions.

(39) IRM 3.11.6.3.1, Auto-Distribution - New subsection to address SP 1040-X's auto-distribution of cases using the Correspondence Imaging Inventory (CII) system. IPU 23U0883 issued 08-10-2023.

(40) IRM 3.11.6.3.1(3) and (6), Auto-Distribution - Paragraph 3 has been updated to add an exception to the MUI limit for TEs on learning curve. Paragraph 6 has been updated to ensure cases being manually reassigned follow FIFO. IPU 23U0894 issued 08-16-2023.

(41) IRM 3.11.6.4, Amended Return Preliminary Review - The subsection has been renamed (formerly Preliminary Review of Form 1040-X/Amended Return) and rewritten to remove paper processing instructions.

(42) IRM 3.11.6.4, Amended Return Preliminary Review - The entire subsection was revised to remove paper instructions and to move split image instructions to a new subsection. IPU 23U0277 issued 02-17-2023.

(43) IRM 3.11.6.4(6), Amended Return Preliminary Review - Revised the classified waste instructions because a new subsection specifically for classified waste has been added. IPU 23U0984 issued 10-02-2023.

(44) IRM 3.11.6.4.1, CII Split Image Request - New subsection to simplify the split image process. IPU 23U0277 issued 02-17-2023.

(45) IRM 3.11.6.4.1(3), CII Split Image Request - Revised instruction to provide clarity of whom to notify. IPU 23U0611 issued 05-09-2023.

(46) IRM 3.11.6.4.2(1), Associating Forms, Schedules, and Other Documents to CII Cases - The subsection has been renamed (formerly Associating Forms, Schedules, and Other Documents to MEFP and MEFS Cases). Paragraph 1 has been updated to remove "MEFP or MEFS" case. IPU 23U0277 issued 02-17-2023.

(47) IRM 3.11.6.4.3, Tax Period - Deleted paper processing instructions and added correspondence instructions because cases are worked through CII.

(48) IRM 3.11.6.4.3(1), (2), and (4), Tax Period - Paragraph 1 note has been revised to remove "MEFP or MEFS" . Paragraphs 2 and 4 were revised to reflect CII processing. IPU 23U0277 issued 02-17-2023.

(49) IRM 3.11.6.4.4, Taxpayer Identification Number (TIN) - The subsection has been rewritten to remove paper processing instructions. Instructions on how to research a scrambled SSN have been added.

(50) IRM 3.11.6.4.4(4), Taxpayer Identification Number (TIN) - Revised to reflect CII processing. IPU 23U0277 issued 02-17-2023.

(51) IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act) - The subsection has been revised to ensure consistent application of the PATH Act.

(52) IRM 3.11.6.4.4.2, TIN requirements for Exemptions and Credits - The subsection has been revised to simplify processing instructions.

(53) IRM 3.11.6.4.5, Received Date - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(54) IRM 3.11.6.4.5(3), (5), and (10), Received Date - Paragraphs 3 and 5 have revised to reflect CII processing. Paragraph 10 has been deleted because all SP 1040-X workflows are controlled systemically. IPU 23U0277 issued 02-17-2023.

(55) IRM 3.11.6.4.5.2, Superseding Returns - Deleted prior year information and revised routing instructions to ensure consistency.

(56) IRM 3.11.6.4.6, Signature - The subsection has been updated to simplify processing instructions and remove paper processing instructions.

(57) IRM 3.11.6.4.6(1) and (2), Signature - Moved CP notice instructions from paragraph 1 to a new paragraph 2. IPU 23U0277 issued 02-17-2023.

(58) IRM 3.11.6.4.6.1, Centralized Authorization File (CAF) - Form 2848, Power of Attorney (POA) and Form 8821 (TIA) and General /Durable POAs - The subsection has been updated to simplify processing instructions.

(59) IRM 3.11.6.4.6.1(6), (7), (9), and (11), Centralized Authorization File (CAF) - Form 2848, Power of Attorney (POA) and Form 8821 (TIA) and General /Durable POAs - Paragraphs 6 and 11 have been revised to reflect CII processing. Paragraph 7 has been deleted to remove paper processing instructions. Paragraph 9 was updated to add instructions for the SP 1040-X Memphis remote site. IPU 23U0277 issued 02-17-2023.

(60) IRM 3.11.6.4.7, Processing Presidential Election Campaign Fund (PECF) Requests - Removed prior year instructions and paper routing instructions, and added correspondence instructions for consistency.

(61) IRM 3.11.6.4.7(7), Processing Presidential Election Campaign Fund (PECF) Requests - Removed paper processing instructions because all SP 1040-X workflows use the CII system. IPU 23U0277 issued 02-17-2023.

(62) IRM 3.11.6.4.8, Discovered Remittances - Deleted the subsection to remove paper processing instructions.

(63) IRM 3.11.6.4.8(1) and (2), Updating Case Data - Paragraph 1 has been updated to include case error instructions.

(64) IRM 3.11.6.4.8(2) and (3), Updating Case Data - Updated OFPs in paragraph 2 due to realignment. Removed paragraph 3 CC ACTON instructions due to tool update. IPU 23U0060 issued 01-09-2023.

(65) IRM 3.11.6.4.8(2) and (4), Updating Case Data - Paragraph 2 was updated to remove the Austin Only designation to prepare for auto-distribution and to add the program code for CP 08 and CP 09 notices received through the DUT. Paragraph 4 was revised to specify CII processing. IPU 23U0277 issued 02-17-2023.

(66) IRM 3.11.6.4.8(2), Updating Case Data - Paragraph 2 was updated to ensure case data is consistent. IPU 23U0984 issued 10-02-2023.

(67) IRM 3.11.6.4.8.1, CII Cases with an E-1 Error - New subsection with instructions on how to resolve a CII case error.

(68) IRM 3.11.6.5, Screening Criteria for Processable Return - The note in paragraph 1 has been deleted and the information has been included in the paragraph.

(69) IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150) - The subsection has been rewritten to consolidate research instructions.

(70) IRM 3.11.6.5.1(6) and (8), Transaction Code (TC) 150 Research (No TC 150) - Paragraph 6 was revised to remove paper processing instructions. Paragraph 8 was updated to add instructions for SP 1040-X Memphis tax examiners. IPU 23U0277 issued 02-17-2023.

(71) IRM 3.11.6.5.1(6), Transaction Code (TC) 150 Research (No TC 150) - Paper processing instructions were removed. SERP Feedback # 9237. IPU 23U0386 issued 03-13-2023.

(72) IRM 3.11.6.5.1(9), Transaction Code (TC) 150 Research (No TC 150) - Added E- freeze instructions when sending to batching. IPU 23U0611 issued 05-09-2023.

(73) IRM 3.11.6.5.1(9), Transaction Code (TC) 150 Research (No TC 150) - Revised TC 971 AC 002 instructions for consistency. IPU 23U0658 issued 05-25-2023.

(74) IRM 3.11.6.5.2, Form 1040 Attached to Form 1040-X - The subsection has been rewritten to improve routing instructions and to remove paper processing instructions.

(75) IRM 3.11.6.5.2(2), Form 1040 Attached to Form 1040-X -Deleted paragraph to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(76) IRM 3.11.6.5.2(5), Form 1040 Attached to Form 1040-X - Added reminder to input a TC 971 AC 002 for consistency. IPU 23U0658 issued 05-25-2023.

(77) IRM 3.11.6.5.3, Amended Form 1040 without Form 1040-X Attached - The subsection has been rewritten to improve routing instructions and to remove paper processing instructions.

(78) IRM 3.11.6.5.3(1), Amended Form 1040 without Form 1040-X Attached - Paragraph 1 was revised to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(79) IRM 3.11.6.5.3(1), Amended Form 1040 without Form 1040-X Attached - Added reminder to input a TC 971 AC 002 for consistency. IPU 23U0658 issued 05-25-2023.

(80) IRM 3.11.6.5.4, Form 1040-X without Form 1040 Attached (No TC 150) - has been revised to specify when a case is to be suspended. The correspondence instructions have also been updated to ensure consistency.

(81) IRM 3.11.6.5.4(1) and (2), Form 1040-X without Form 1040 Attached (No TC 150) - Paragraph 1 was revised to remove paper processing instructions. Paragraph 2 updated to correspondence format to help copy paragraphs to the IAT Letters tool. IPU 23U0277 issued 02-17-2023.

(82) IRM 3.11.6.6(2), Master File Verification and Math Verification Screening - Revised to reflect CII processing. IPU 23U0277 issued 02-17-2023.

(83) IRM 3.11.6.6.1, Duplicate Returns and Identical Open CII Cases - Removed duplicated routing instructions and local procedure instructions since all SP 1040-X cases are worked through CII.

(84) IRM 3.11.6.6.1(1), (3), and (4), Duplicate Returns and Identical Open CII Cases - Each paragraph has been updated to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(85) IRM 3.11.6.6.1(2), Duplicate Returns and Identical Open CII Cases - Updated routing instructions to remove paper processing instructions. IPU 23U0763 issued 06-22-2023.

(86) IRM 3.11.6.6.1(5), Duplicate Returns and Identical Open CII Cases - Revised the classified waste instructions because a new subsection specifically for classified waste has been added. IPU 23U0984 issued 10-02-2023.

(87) IRM 3.11.6.7, Sorting, Routing, and Priority Processing Screening - The subsection has been rewritten to improve routing instructions and to remove paper processing instructions.

(88) IRM 3.11.6.7(3), (4), and (5), Sorting, Routing, and Priority Screening - Each paragraph has been updated to make instructions CII specific. IPU 23U0277 issued 02-17-2023.

(89) IRM 3.11.6.7.1, SP 1040-X Routing When a TC 150 Isn’t Present - New subsection to improve No TC 150 routing instructions.

(90) IRM 3.11.6.7.2, SP 1040-X Routing When a TC 150 Is Present - New subsection to improve routing instructions when a TC 150 is present.

(91) IRM 3.11.6.7.3, International Return Screening - Consolidated the International Returns and the International Return Criteria subsections. The consolidation resulted in the deletion of the International Return Criteria subsection (formerly IRM 3.11.6.7.21.1).

(92) IRM 3.11.6.7.5, Office of Fraud Enforcement (OFE), Suspicious Case Referral Screening - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(93) IRM 3.11.6.7.5(2) and (3), Office of Fraud Enforcement (OFE), Suspicious Case Referral Screening - Removed paper processing instructions. IPU 23U0277 issued 02-17-2023.

(94) IRM 3.11.6.7.6, Disaster Claim Screening - The subsection has been rewritten to improve the screening process.

(95) IRM 3.11.6.7.7, Carryback and Carryforward Screening - Removed local procedure and paper processing instructions since all SP 1040-X cases are worked through CII. Cares Act information has also been added to the subsection to ensure consistency when screening cases.

(96) IRM 3.11.6.7.7(2), Carryback and Carryforward Screening - Updated to make instructions CII specific. IPU 23U0277 issued 02-17-2023.

(97) IRM 3.11.6.7.7(13), Carryback and Carryforward Screening - Updated Form routing instructions. SERP Feedback # 12257. IPU 23U0844 issued 07-24-2023.

(98) IRM 3.11.6.7.7.1, List of Frivolous Claims - This subsection has been deleted as a result of the instructions being consolidated into IRM 3.11.6.7.11, Frivolous Claims Screening.

(99) IRM 3.11.6.7.8, Identity Theft (IDT) Screening - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(100) IRM 3.11.6.7.8(7), Identity Theft (IDT) Screening - Updated the table to make instructions CII specific and to add instructions for SP 1040-X Memphis. IPU 23U0277 issued 02-17-2023.

(101) IRM 3.11.6.7.9, Statute Review Screening - The subsection has been revised to improve the screening process.

(102) IRM 3.11.6.7.9, Statute Review Screening - The entire subsection has been revised due to updated routing procedures. IPU 23U0106 issued 01-17-2023.

(103) IRM 3.11.6.7.9, Statute Review Screening - The subsection has been revised to prevent cases from being routed incorrectly. IPU 23U0277 issued 02-17-2023.

(104) IRM 3.11.6.7.9(7), Statute Review Screening - Added E- freeze instructions when sending to batching. IPU 23U0611 issued 05-09-2023.

(105) IRM 3.11.6.7.9(7), Statute Review Screening - Updated note concerning the input of a TC 971 AC 002 for consistency. IPU 23U0658 issued 05-25-2023.

(106) IRM 3.11.6.7.10, Examination Case Screening - The title has been changed (formerly Examination) and the subsection has been revised to improve the screening process.

(107) IRM 3.11.6.7.10(2), Examination Case Screening - Updated to clarify what is to be considered a SP 1040-X complete claim. IPU 23U0277 issued 02-17-2023.

(108) 3.11.6.7.10.2, Exam/-L Freeze Claim Processing - This subsection has been incorporated into IRM 3.11.6.7.10, Examination Case Screening, causing this subsection to be deleted.

(109) 3.11.6.7.10.2(4), Exam/-L Freeze Claim Processing - Updated instruction to reflect CII case processing. IPU 23U0894 issued 08-16-2023.

(110) IRM 3.11.6.7.11, Frivolous Claims Screening - Consolidated and revised the Frivolous Returns and the List of Frivolous Claims subsections. The consolidation and revision resulted in the deletion of the List of Frivolous Claims subsection (formerly IRM 3.11.6.7.7.1).

(111) IRM 3.11.6.7.11(2) and (4), Frivolous Claims Screening - Paragraphs 2 and 4 have been updated to add a new freeze code and TC for FRP cases. IPU 23U0277 issued 02-17-2023.

(112) IRM 3.11.6.7.7(2) (3), Frivolous Claims - Paragraphs 2 and 3 have been updated to reflect out-of-scope processing instructions for SP 1040-X. SERP Feedback: 13383. IPU 23U0956 issued 09-13-2023.

(113) IRM 3.11.6.7.12, Criminal Investigation (CI) Scheme Development Center (SDC) Screening - Deleted paper processing instructions since all SP 1040-X cases are worked through CII, and revised the tables to clarify routing conditions.

(114) IRM 3.11.6.7.12(2), Criminal Investigation (CI) Scheme Development Center (SDC) Screening - Removed paper processing instructions. IPU 23U0277 issued 02-17-2023.

(115) IRM 3.11.6.7.12.1, International Return Criteria - This subsection has been deleted as a result of the instructions being consolidated into IRM 3.11.6.7.3, International Return Screening.

(116) IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Case Screening - The subsection has been revised to break-up instructions into a narrow focus to ensure consistency.

(117) IRM 3.11.6.7.13(2), Return Integrity and Verification Operation (RIVO) Case Screening - Added Memphis to the table. IPU 23U0277 issued 02-17-2023.

(118) IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening - The subsection has been rewritten to improve CAT-A screening and routing procedures.

(119) IRM 3.11.6.7.14.1(6), Category A (CAT-A) Criteria Screening - Removed paper processing instructions. IPU 23U0277 issued 02-17-2023.

(120) IRM 3.11.6.7.14.1(1), (2), and (3), Category A (CAT-A) Criteria Screening - Paragraph 1 has been rewritten and new paragraphs 2 and 3 have been added to improve the CAT-A screening process. New paragraph 3 removed the need for the instructions in paragraphs 5 and 6 causing them to be deleted. IPU 23U0883 issued 08-10-2023.

(121) IRM 3.11.6.7.15(3), Automated Underreporter (AUR) Screening - Revised the table to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(122) IRM 3.11.6.7.16, Accounts Management Case Screening - The subsection has been rewritten to improve claim screening and to remove paper processing instructions since all SP 1040-X cases are worked through CII.

(123) IRM 3.11.6.7.16(4) and (6), Accounts Management Case Screening - Removed paper routing instructions and specified CII routing procedures. IPU 23U0277 issued 02-17-2023.

(124) IRM 3.11.6.7.17, Open Case and Open Control Base Screening - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(125) IRM 3.11.6.7.17(4) and (7), Open Case and Open Control Base Screening - Paragraph 4 was updated to specify CII cases. A reference title was updated in paragraph 7. IPU 23U0277 issued 02-17-2023.

(126) IRM 3.11.6.7.17(4), Open Case and Open Control Base Screening - Updated routing instructions to remove paper processing instructions. IPU 23U0763 issued 06-22-2023.

(127) IRM 3.11.6.7.17.1, Cases Open to an SP 1040-X Tax Examiner - The subsection (formerly 3.11.6.7.13.1) has been updated to reflect auto-distribution of CII cases to SP 1040-X tax examiners.

(128) IRM 3.11.6.7.17.1, Cases Open to an SP 1040-X Tax Examiner - New subsection created to address multiple open CII cases and to remove paper processing instructions. IPU 23U0763 issued 06-22-2023.

(129) IRM 3.11.6.7.18, All Other Claims Screening - New subsection to categorize various other routing conditions.

(130) IRM 3.11.6.7.18.1, Killed in Terrorist Action (KITA) Screening - Deleted paper processing instruction since all SP 1040-X cases are worked through CII.

(131) IRM 3.11.6.7.18.3.(2), Collection Function Case Screening - Removed paper processing instructions. IPU 23U0277 issued 02-17-2023

(132) IRM 3.11.6.7.18.3.1, Compliance Services Collection Operations (CSCO) Screening - The subsection has been rewritten to improve claim screening and to remove paper processing instructions since all SP 1040-X cases are worked through CII.

(133) IRM 3.11.6.7.18.3.2, Automated Collection Systems (ACS) Screening - The subsection has been rewritten to improve claim screening and to remove paper processing instructions since all SP 1040-X cases are worked through CII.

(134) IRM 3.11.6.7.18.3.3, Offer In Compromise (OIC) Screening - The subsection has been rewritten to improve claim screening and to remove paper processing instructions since all SP 1040-X cases are worked through CII.

(135) IRM 3.11.6.7.18.3.4, Field Collection Case Screening - The subsection has been rewritten to improve claim screening and to remove paper processing instructions since all SP 1040-X cases are worked through CII.

(136) IRM 3.11.6.7.18.3.5(5), Automated Substitute For Return (ASFR) and Non-Filer Return (NFR) Screening - Specified CII processing instructions. IPU 23U0277 issued 02-17-2023.

(137) IRM 3.11.6.7.19, Releasing Screened Returns - The subsection has been revised to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(138) IRM 3.11.6.7.19, Releasing Screened Returns - Deleted a duplicate instruction found elsewhere in the IRM.

(139) IRM 3.11.6.7.19.1, Working Trail and Action Trail - The subsection has been revised to break-up instructions into several subsections ensure consistency.

(140) IRM 3.11.6.7.19.1, Working Trail and Action Trail - The subsection has been revised to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(141) IRM 3.11.6.7.19.1.1, Working Trails and Action Trails When Reassigning a Case - New subsection for working trails and action trails when reassigning a case.

(142) IRM 3.11.6.7.19.1.2, Working Trails and Action Trails When Rerouting a Case - New subsection for working trails and action trails when rerouting a case.

(143) IRM 3.11.6.7.19.1.3, Working Trails and Action Trails When Sending an E-fax or Secure Message - New subsection for working trails and action trails when sending an e-fax or secure message.

(144) IRM 3.11.6.7.19.2, Transaction Code (TC) 971 and Action Codes - Deleted paper processing instruction since all SP 1040-X cases are worked through CII.

(145) IRM 3.11.6.7.19.2(2), Transaction Code (TC) 971 and Action Codes - Added action code to be used on certain No TC 150 cases. IPU 23U0611 issued 05-09-2023.

(146) IRM 3.11.6.8, 1040-X Routing Guide - The routing criteria has been updated to be consistent with Mef segmentation.

(147) IRM 3.11.6.8, 1040-X Routing Guide - Added Form 8915-F and renumbered the table. IPU 22U1142 issued 12-01-2022.

(148) IRM 3.11.6.8(7), 1040-X Routing Guide - Digital Assets routing condition has been added for consistency. IPU 23U0611 issued 05-09-2023.

(149) IRM 3.11.6.8(7), 1040-X Routing Guide - Added additional routing criteria to ensure consistency. IPU 23U0658 issued 05-25-2023.

(150) IRM 3.11.6.8(7), 1040-X Routing Guide - Updated routing criteria to ensure consistency. IPU 23U0763 issued 06-22-2023.

(151) IRM 3.11.6.9, 1040-X Reassignment and Reroute Guides - Revised the subsection now that SP 1040-X processes all cases through CII.

(152) IRM 3.11.6.9.1(4), MEFP Reassignment and Reroute Guide - Updated suspense instructions to ensure consistency. IPU 23U0106 issued 01-17-2023.

(153) IRM 3.11.6.9.1(4) MEFP Reassignment and Reroute Guide - Updated reassignment instructions due to procedure change by receiving area. IPU 23U0611 issued 05-09-2023.

(154) IRM 3.11.6.9.1(4), MEFP Reassignment and Reroute Guide - Updated priority code usage instructions for consistency. IPU 23U0763 issued 06-22-2023.

(155) IRM 3.11.6.9.2, MEFS Reassignment and Reroute Guide - Revised the subsection to clarify routing procedures.

(156) IRM 3.11.6.9.2(4), MEFS Reassignment and Reroute Guide - Updated suspense instructions to ensure consistency. IPU 23U0106 issued 01-17-2023.

(157) IRM 3.11.6.9.2(4), MEFS Reassignment and Reroute Guide - Added reassignment procedures for CP notices received through the DUT. IPU 23U0277 issued 02-17-2023.

(158) IRM 3.11.6.9.2(4), MEFS Reassignment and Reroute Guide - Updated reassignment instructions due to procedure change by receiving area. SERP Feedback# 10200. IPU 23U0611 issued 05-09-2023.

(159) IRM 3.11.6.9.2(4), MEFS Reassignment and Reroute Guide - Updated priority code usage instructions for consistency. IPU 23U0763 issued 06-22-2023.

(160) IRM 3.11.6.9.4, MEFP and MEFS Secure Messaging and E-fax Routing - Revised the subsection to clarify routing procedures.

(161) IRM 3.11.6.10, Correspondence Procedures - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(162) IRM 3.11.6.10(1), (2), and (10), Correspondence Procedures - Paragraph 1 was updated to reflect CII processing instructions. Paragraph 2 was updated to remove Surge team information and add SP 1040-X Memphis remote site information. Paragraph 10 was updated to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(163) IRM 3.11.6.10(2) and (8), Correspondence Procedures - Paragraph 2 was updated due to a system change. Paragraph 8 was updated to remove paper processing instructions. IPU 23U0611 issued 05-09-2023.

(164) IRM 3.11.6.10.1, Multiple Correspondence Issues - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(165) IRM 3.11.6.10.1(1) and (2), Multiple Correspondence Issues - Removed paper processing instructions. IPU 23U0611 issued 05-09-2023.

(166) IRM 3.11.6.10.2, Spanish Correspondence - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(167) IRM 3.11.6.10.2(4), Spanish Correspondence - Added new C-letter to the table. IPU 23U0106 issued 01-17-2023.

(168) IRM 3.11.6.10.2(4), Spanish Correspondence - Paper processing instructions have been removed. IPU 23U0611 issued 05-09-2023.

(169) IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(170) IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C) - The subsection was revised to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(171) IRM 3.11.6.10.3.1, Letter 178C, Amended (Unnumbered) Return Incomplete for Processing - This subsection has been deleted and the contents consolidated into IRM 3.11.6.10.3. IPU 23U0611 issued 05-09-2023.

(172) IRM 3.11.6.10.3.2, Form 8009-A, We Need More Information to Process Your Amended Return or CP Notice - This subsection has been deleted to remove paper processing instructions since all SP 1040-X inventory is worked through CII. IPU 23U0611 issued 05-09-2023.

(173) IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(174) IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C) - The entire subsection has been revised to remove all paper processing instructions and to consolidate correspondence instructions. The title to the subsection has also been changed (formerly Corresponding on Net Refund and Zero-Balance Returns (Form 8009-A and Letter 178C)) to reflect the revision, and the updated title has been changed to reference links throughout the IRM. IPU 23U0611 issued 05-09-2023.

(175) IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP) - The subsection has been revised to break-up the correspondence and input instructions. The correspondence instructions have been revised to reduce possible delays when C-letters are updated. The input instructions have been moved to a new subsection (Inputting a Disallowance Adjustment).

(176) IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP) - The subsection was revised to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(177) IRM 3.11.6.10.5(3), Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP) - Removed paper processing instructions. IPU 23U0611 issued 05-09-2023.

(178) IRM 3.11.6.10.6, Correspondence for Correcting a Claim (Letter 474C and 474SP) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(179) IRM 3.11.6.10.7, Correspondence for Requesting Credit Previously Received (Letter 76C) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(180) IRM 3.11.6.10.7, Correspondence for Requesting Credit Previously Received (Letter 76C) - New subsection to address 76C Letter correspondence. IPU 23U0106 issued 01-17-2023.

(181) IRM 3.11.6.10.7, Correspondence for Requesting Credit Previously Received (Letter 76C) - The entire subsection was updated. Paragraph 1 was updated to address the Letter 76C update. SERP Feedback# 10515. Paragraphs 2 through 4 were added to include CP notice correspondence instructions. IPU 23U0611 issued 05-09-2023.

(182) IRM 3.11.6.10.7(4), Correspondence for Requesting Credit Previously Received (Letter 76C) - Updated correspondence fill-in instructions. SERP Feedback # 12119. IPU 23U0844 issued 07-24-2023.

(183) IRM 3.11.6.10.7(3), Correspondence for Requesting Credit Previously Received (Letter 76C) - Correspondence for Requesting Credit Previously Received (Letter 76C) - Updated correspondence instructions for consistency. SERP Feedback# 13158. IPU 23U0945 issued 09-11-2023.

(184) IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(185) IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP) - The subsection has been updated to add instructions for a new TC 971 maker, update the correspondence fill-ins (SERP Feedback# 8141), and to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(186) IRM 3.11.6.10.8(3), Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP) - Updated correspondence paragraphs due to letter update. IPU 23U0712 issued 06-08-2023.

(187) IRM 3.11.6.10.9, Correspondence for Estimated Tax Penalty (Letter 369C) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(188) IRM 3.11.6.10.9, Correspondence for Estimated Tax Penalty (Letter 369C) - The subsection was updated to reflect CII processing instructions. IPU 23U0277 issued 02-17-2023.

(189) IRM 3.11.6.10.10, Correspondence for Excess Social Security and Railroad Retirement Tax (Letter 404C) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(190) IRM 3.11.6.10.10(1), Correspondence for Excess Social Security and Railroad Retirement Tax (Letter 404C) - Revised the correspondence fill-in for consistency. IPU 23U0700 issued 06-05-2023.

(191) IRM 3.11.6.10.11, Correspondence for Dependent Documentation (Letter 3050C and Letter 3050SP) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(192) IRM 3.11.6.10.12, Illegible Amended Return (Letter 418C) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(193) IRM 3.11.6.10.12(1) and (2), Illegible Amended Return (Letter 418C) - Paragraph 1 was updated to remove paper processing instructions. Paragraph 2 was updated to specify the suspense period. IPU 23U0277 issued 02-17-2023.

(194) IRM 3.11.6.10.13, Unable to Locate Amended Return Procedures (Letter 282C and Letter 282SP) - This subsection has been deleted because all SP 1040-X cases are worked through CII.

(195) IRM 3.11.6.10.13, Undelivered Correspondence - Deleted paper processing instructions since all SP 1040-X cases are worked through CII, and simplified processing instructions.

(196) IRM 3.11.6.10.13(3), Undelivered Correspondence - Removed Form 9856 instructions and replaced them with paragraph references. IPU 22U1142 issued 12-01-2022.

(197) IRM 3.11.6.10.13, Undelivered Correspondence - The subsection was updated to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(198) IRM 3.11.6.10.13(5), Undelivered Correspondence - Paragraph 5 was deleted to remove paper processing instructions. The deletion caused the paragraphs in the subsection to be renumbered. The new paragraph 5 has been updated to remove Form 8009-A instructions. IPU 23U0611 issued 05-09-2023.

(199) IRM 3.11.6.10.13(5), (6), and (8), Undelivered Correspondence - Revised the classified waste instructions because a new subsection specifically for classified waste has been added. IPU 23U0984 issued 10-02-2023.

(200) IRM 3.11.6.10.14, Correspondence Received - The subsection has been renamed (formerly MEFP and MEFS Correspondence) and revised to reflect SP 1040-X processing cases through CII.

(201) IRM 3.11.6.10.14(1) and (2), Correspondence Received - Both paragraphs have been updated to remove individual MEFP and MEFS instructions. IPU 23U0277 issued 02-17-2023.

(202) IRM 3.11.6.11, Correspondence Table of Issues, C-Letter and Paragraph Fill-ins - Revised the subsection to specify CII cases. IPU 23U0277 issued 02-17-2023.

(203) IRM 3.11.6.11.1, Letter 178C Correspondence Table of Issues - The correspondence instructions have been revised to update form titles and reduce possible delays when C-letters are updated.

(204) IRM 3.11.6.11.1(1), Letter 178C Correspondence Table of Issues - Updated correspondence fill-in. IPU 23U0611 issued 05-09-2023.

(205) IRM 3.11.6.11.1, Letter 178C Correspondence Table of Issues - Renamed the subsection (formerly MEFP and MEFS Case Correspondence Table of Issues) and revised it to improve correspondence and reflect CII case processing. IPU 23U0277 issued 02-17-2023.

(206) IRM 3.11.6.11.1(1) (2), and (3), Letter 178C Correspondence Table of Issues - Revised the correspondence fill-in to account for the IAT Letters tool open paragraph limitation. IPU 23U0658 issued 05-25-2023.

(207) IRM 3.11.6.11.2, Letter 324C Correspondence Table of Issues - The correspondence instructions have been revised to update form titles and reduce possible delays when C-letters are updated.

(208) IRM 3.11.6.11.2, Letter 324C Correspondence Table of Issues - Renamed the subsection (formerly Paper Case Correspondence Table of Issues) and revised it to improve correspondence and reflect CII case processing. IPU 23U0277 issued 02-17-2023.

(209) IRM 3.11.6.11.2(2), Letter 324C Correspondence Table of Issues - Revised the correspondence fill-in to account for the IAT Letters tool open paragraph limitation. IPU 23U0658 issued 05-25-2023.

(210) IRM 3.11.6.12, Updating Taxpayer Information Using CC ENMOD - The subsection has been revised to narrow focus.

(211) IRM 3.11.6.12.1, Entity Changes - The subsection has been revised to break-up instructions into several subsections ensure consistency.

(212) IRM 3.11.6.12.1(1) (4) and (5) Entity Changes - The instructions in paragraphs 1 and 4 have been incorporated into new paragraphs 4 and 5 to ensure Entity related research and changes are consistent. IPU 23U0945 issued 09-11-2023.

(213) IRM 3.11.6.12.1.1, Address Changes - New subsection specifically for address changes.

(214) IRM 3.11.6.12.1.2, Filing Status Changes - New subsection specifically for filing status changes.

(215) IRM 3.11.6.12.1.2.1, Filing 2 Status Changes - This subsection has been revised to ensure consistency when inputting FS 2 changes.

(216) IRM 3.11.6.12.1.2.1(6), Filing Status 2 Changes - Corrected a reference. IPU 23U0242 issued 02-06-2023.

(217) IRM 3.11.6.12.1.2.1(7), Filing Status 2 Changes - Added an exception to paragraph 7 because of changes made to IRM 21.6.1.5.3.2 and IRM 21.6.1.7.2. Paragraphs 4, 5, 6, and 7 have been rearranged. IPU 23U0700 issued 06-05-2023.

(218) IRM 3.11.6.12.3(2), Form 9000, Alternative Media Preference - REQ77/FRM77 Programming was updated to require an entry in the Secondary Date field. IPU 22U1142 issued 12-01-2022.

(219) IRM 3.11.6.13, Personal Exemption or Dependent Changes - Moved instructions on revoking an ITIN to a new subsection.

(220) IRM 3.11.6.13.1, Revoking a Dependent’s ITIN - New subsection with instructions on how to revoke an ITIN.

(221) IRM 3.11.6.13.3(7), Updating the Duplicate Taxpayer Identification Number (TIN) OnLine (DUPOL) Database - Added a reminder to paragraph 7 because of changes made to IRM 21.6.1.5.3.2 and IRM 21.6.1.7.2. IPU 23U0700 issued 06-05-2023.

(222) IRM 3.11.6.13.4, Command Code DDBCK (Dependent Database Check) - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(223) IRM 3.11.6.13.4(5), Command Code DDBCK (Dependent Database Check) - Added a reminder to paragraph 3 because of changes made to IRM 21.6.1.5.3.2 and IRM 21.6.1.7.2. IPU 23U0700 issued 06-05-2023.

(224) IRM 3.11.6.13.4(8), Command Code DDBCK (Dependent Database Check) - Updated instruction to reflect CII case processing. IPU 23U0894 issued 08-16-2023.

(225) IRM 3.11.6.13.5, Command Code DUPED - Deleted manual processing instructions since IAT tools are mandated.

(226) IRM 3.11.6.13.5(3), Command Code DUPED - Added a reminder to paragraph 3 because of changes made to IRM 21.6.1.5.3.2 and IRM 21.6.1.7.2. IPU 23U0700 issued 06-05-2023.

(227) IRM 3.11.6.13.5.1, Add a Record - Deleted manual processing instructions since IAT tools are mandated.

(228) IRM 3.11.6.14, Specific IMF Adjustments - The subsection has been revised to move AGI verification instructions to another subsection and duplicate instructions found elsewhere in the IRM have been deleted.

(229) IRM 3.11.6.14(8), Specific IRM Adjustments - Direct deposit instructions have been added. IPU 23U0242 issued 02-06-2023.

(230) IRM 3.11.6.14 (3) and (4), Specific IMF Adjustments - Added new TC 971 marker instructions to both paragraphs. IPU 23U0277 issued 02-17-2023.

(231) IRM 3.11.6.14.1.1, Adjusted Gross Income (AGI) - (Line 1) - AGI verification instructions have been added.

(232) IRM 3.11.6.14.1.1.1, Earned Income - Revised the subsection to improve screening procedures.

(233) IRM 3.11.6.14.1.1.3(2) and (3), Unemployment Compensation Exclusion (UCE) - Tax Year 2020 Only (Line 1) - Added note to paragraph 2 and deleted the table in paragraph 3 because the UCE recovery has ended. IPU 23U0106 issued 01-17-2023.

(234) IRM 3.11.6.14.1.1.4(4), Notice 2014-7, Qualified Medicaid Waiver Payments/Difficulty of Care - Added reason code instructions to be consistent with AM processing of 2014-7 cases. IPU 22U1142 issued 12-01-2022.

(235) IRM 3.11.6.14.1.1.5, Employer Provided Education Assistance (IRC 127) - (Line 1) - The subsection has been revised to simplify processing instructions.

(236) IRM 3.11.6.14.1.1.8, Student Loan Interest Deduction (Line 1) - Updated the table amounts for the new filing season.

(237) IRM 3.11.6.14.1.1.10, Form 2106, Employee Business Expenses (Line 1) - The subsection has been revised to additional qualifying individuals and processing instructions.

(238) IRM 3.11.6.14.1.1.11, Refund of State Taxes Paid - Tax Year 2022 Only - New subsection to address returns where taxpayers are not required to report state refunds as taxable income. IPU 23U0386 issued 03-13-2023.

(239) IRM 3.11.6.14.1.1.12, General Welfare and Disaster Relief Payments - Tax Year 2022 Only - New subsection to address returns where taxpayers are not required to report their payments received for the promotion of the general welfare or as a disaster relief payment. IPU 23U0386 issued 03-13-2023.

(240) IRM 3.11.6.14.1.1.12, General Welfare and Disaster Relief Payments - Tax Year 2022 Only - Updated the research instruction because different states used different forms. IPU 23U0844 issued 07-24-2023.

(241) IRM 3.11.6.14.1.2.1, Standard Deduction - Updated the deduction amounts for the new filing season.

(242) IRM 3.11.6.14.1.2.2, Itemized Deductions (Line 2) - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(243) IRM 3.11.6.14.2.1.1, Form 6251, Alternative Minimum Tax - Deleted duplicate instruction within the subsection.

(244) IRM 3.11.6.14.2.2.1, Form 2441, Credit for Child and Dependent Care Expenses - Updated tables for the new filing season.

(245) IRM 3.11.6.14.2.2.3, Form 8863, Education Credits - Updated tables for the new filing season.

(246) IRM 3.11.6.14.2.2.3.1, Lifetime Learning Credit (LLC) - Revised correspondence instructions for consistency.

(247) IRM 3.11.6.14.2.2.3.1(3), Lifetime Learning Credit (LLC) - Added correspondence instructions. IPU 23U0277 issued 02-17-2023.

(248) IRM 3.11.6.14.2.2.3.1(1) and (3), Lifetime Learning Credit (LLC) - In paragraph 1, a link to Form 8863 eligibility criteria has been added. In paragraph 3, the verbiage was updated to reflect the change in the eligibility instructions. IPU 23U0386 issued 03-13-2023.

(249) IRM 3.11.6.14.2.2.3.2, American Opportunity Tax Credit (AOTC) - Non-refundable - Revised correspondence instructions for consistency.

(250) IRM 3.11.6.14.2.2.3.2(7), American Opportunity Tax Credit (AOTC) - Non-refundable - Added correspondence instructions. IPU 23U0277 issued 02-17-2023.

(251) IRM 3.11.6.14.2.2.3.2(6) and (7), American Opportunity Tax Credit (AOTC) - Non-refundable - In paragraph 6, a link to Form 8863 eligibility criteria has been added. In paragraph 7, the verbiage in the table has been updated to reflect the change in the eligibility instructions, and a new box was added with correspondence instructions. IPU 23U0386 issued 03-13-2023.

(252) IRM 3.11.6.14.2.2.5, Credit for Other Dependents (ODC) - Revised routing instructions and removed informational verbiage to simplify processing instructions.

(253) IRM 3.11.6.14.2.2.6, Child Tax Credit (CTC) - Removed tax year 2019 information.

(254) IRM 3.11.6.14.2.2.9.19, Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(255) IRM 3.11.6.14.2.2.9.20, Elective Payment Election (EPE) - Revised the subsection to specify how the election is claimed for tax year 2022.

(256) IRM 3.11.6.14.3.2.9.20, Elective Payment Election (EPE) - New subsection to address the Elective Payment Election for certain taxpayers. IPU 23U0763 issued 06-22-2023.

(257) IRM 3.11.6.14.2.4, Line 10 - Other Taxes - Revised the screening instructions to ensure cases are being routed correctly.

(258) IRM 3.11.6.14.2.4.1, Additional Tax on Early Distribution - Form 5329 and Form 1099-R (Line 10) - Revised the subsection to ensure consistency in research and correspondence procedures.

(259) IRM 3.11.6.14.2.4.2, Self-Employment (SE) Tax (Line 10) - Updated instructions to address undelivered correspondence and no-reply procedures.

(260) IRM 3.11.6.14.2.5, Total Tax (Line 11) - Deleted instructions duplicated elsewhere in the IRM.

(261) IRM 3.11.6.14.3.1, Federal Income Tax Withholding (Line 12) - Revised the subsection to simplify research, correspondence, and processing procedures.

(262) IRM 3.11.6.14.3.1, Federal Income Tax Withholding (Line 12) - Revised the entire subsection to add a new TC 971 markers. IPU 23U0277 issued 02-17-2023.

(263) IRM 3.11.6.14.3.1.1, Excess Social Security and Railroad Retirement Tax Act (RRTA) - Revised the subsection to simplify routing and math verification processing instructions.

(264) IRM 3.11.6.14.3.2(2), Estimated Tax Payments (Line 13) - Added SP 1040-X Memphis instructions. IPU 23U0277 issued 02-17-2023.

(265) IRM 3.11.6.14.4, Earned Income Credit (EIC) - Line 14 - Revised the subsection to ensure consistency when routing and math verification is required.

(266) IRM 3.11.6.14.4.1, Earned Income Tax Credit (EITC) Eligibility Criteria - Revised the subsection to simplify processing instructions.

(267) IRM 3.11.6.14.4.3, Taxpayer with Qualifying Child(ren) on Schedule EIC - Revised the subsection to simplify processing and correspondence instructions.

(268) IRM 3.11.6.14.4.4, Adjusting the Earned Income Tax Credit (EIC) - Line 14 - Revised the subsection to simplify processing and routing instructions.

(269) IRM 3.11.6.14.5.1, Schedule 8812, Additional Child Tax Credit (ACTC) - Deleted duplicate instruction found elsewhere in the IRM, and updated routing instructions for consistency.

(270) IRM 3.11.6.14.5.1.1, Schedule 8812, Refundable Child Tax Credit (Tax Year 2021) - Added screening instruction for consistency.

(271) IRM 3.11.6.14.5.2, American Opportunity Tax Credit (AOTC) Refundable Portion - Updated table for the new filing season and simplified processing instructions..

(272) IRM 3.11.6.14.5.5, Premium Tax Credit (PTC), Form 8962 - The routing criteria has been updated to be consistent with Mef segmentation.

(273) IRM 3.11.6.14.5.7, Recovery Rebate Credit (RRC) - Tax Years 2020 and 2021 Only - Updated research reference instructions.

(274) IRM 3.11.6.14.5.8, Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals - Tax Years 2020 and 2021 Only - Revised the entire subsection to ensure consistency when processing and corresponding. IPU 23U0277 issued 02-17-2023.

(275) IRM 3.11.6.14.5.8, Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals - Tax Years 2020 and 2021 Only - Added instruction to look for additional routing criteria. IPU 23U0611 issued 05-09-2023.

(276) IRM 3.11.6.14.6.8(3), Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals - Paragraph 3 has been updated to reflect an out-of-scope processing instruction for SP 1040-X. IPU 23U0956 issued 09-13-2023.

(277) IRM 3.11.6.14.5.8.1, Credit for Qualified Sick and Family Leave Wages - Tax Year 2022 - New subsection to address the credit for TY 2022. IPU 23U0277 issued 02-17-2023.

(278) IRM 3.11.6.14.5.8.1, Credit for Qualified Sick and Family Leave Wages - Tax Year 2022 - Added instruction to look for additional routing criteria. IPU 23U0611 issued 05-09-2023.

(279) IRM 3.11.6.14.6(2), Overpayment Amount on This Amended Return (Line 21) - Removed IRN 872 instructions due to programming delay. IPU 23U0042 issued 01-05-2023.

(280) IRM 3.11.6.14.6.1, Direct Deposit - Revised correspondence instructions to reduce possible delays when C-letters are updated.

(281) IRM 3.11.6.14.6.1, Direct Deposit - Removed IRN 872 instructions and revised the entire subsection due to programming delay. IPU 23U0042 issued 01-05-2023.

(282) IRM 3.11.6.14.6.1, Direct Deposit - The entire subsection was revised to add direct deposit processing instructions. IPU 23U0242 issued 02-06-2023.

(283) IRM 3.11.6.14.6.1(2) and (4), Direct Deposit - Paragraph 2 has been revised to update the routing instruction. Paragraph 4 has been revised to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(284) IRM 3.11.6.14.6.1(2) and (4), Direct Deposit - Removed the IAT tool information now that the IAT tools have been updated. IPU 23U0386 issued 03-13-2023.

(285) IRM 3.11.6.14.6.2, Credit Elect (Line 23) - Deleted paper processing instructions since all SP 1040-X cases are worked through CII. The correspondence instructions have also been revised to reduce possible delays when C-letters are updated.

(286) IRM 3.11.6.14.6.2.1, Credit Elect Availability Dates - Updated example for the new filing season.

(287) IRM 3.11.6.15.1(2), Integrated Data Retrieval System (IDRS) Freeze Codes - Added new freeze code to the table for FRP cases. IPU 23U0277 issued 02-17-2023.

(288) IRM 3.11.6.15.1(2), Integrated Data Retrieval System (IDRS) Freeze Codes - Updated E- freeze instructions and included link to processing instructions. IPU 23U0611 issued 05-09-2023.

(289) IRM 3.11.6.15.2, Integrated Data Retrieval System (IDRS) Transaction Codes - Updated research instructions to ensure consistent screening.

(290) IRM 3.11.6.15.2(2), Integrated Data Retrieval System (IDRS) Transaction Codes - Added new TC to the table for FRP cases. IPU 23U0277 issued 02-17-2023.

(291) IRM 3.11.6.15.3(3), Transaction Codes (TC), Item Reference Numbers (IRN), and Credit Reference Numbers (CRN)- Removed IRN 872 instructions due to programming delay. IPU 23U0042 issued 01-05-2023.

(292) IRM 3.11.6.15.3(3), Transaction Codes (TC), Item Reference Numbers (IRN), and Credit Reference Numbers (CRN) - Direct deposit instructions have been added. IPU 23U0242 issued 02-06-2023.

(293) IRM 3.11.6.15.4, Source Codes (SC) - Removed information not necessary for processing a case.

(294) IRM 3.11.6.15.5, Reason Codes (RC) - Revised reason codes usage to ensure consistency.

(295) IRM 3.11.6.15.5(3), Reason Codes (RC) - Added reason code for 2014-7 income exclusion so ensure consistency with AM. IPU 22U1142 issued 12-01-2022.

(296) IRM 3.11.6.15.6, Blocking Series (BS) - Revised blocking series usage to ensure consistency.

(297) IRM 3.11.6.15.9, Priority Codes (PC) - Removed instruction to not change the priority code used by the IAT tool to reflect the way the xMend to currently works.

(298) IRM 3.11.6.15.10, Category Codes - Revised the subsection to consolidate instructions.

(299) IRM 3.11.6.15.10(2), (3), and (4), Category Codes - Paragraph 2 was updated to remove paper processing instructions and add DUT instructions. Paragraphs 3 and 4 was revised to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(300) IRM 3.11.6.15.11, Correspondence Imaging Inventory Indicator (CII IND), Source Document Attached Indicator (SD), and Remarks - Updated the title (formerly Correspondence Imaging System Indicator (CIS IND), Source Document Attached Indicator (SD), and Remarks) and the CII indicator to reflect the current field name.

(301) IRM 3.11.6.15.11(1), Correspondence Imaging System Indicator (CIS IND), Source Document Attached Indicator (SD), and Remarks - Updated the subsection title. Paragraph 1 was updated to clarify what to input in the CIS-IND field on CC REQ54. IPU 23U0060 issued 01-09-2023.

(302) IRM 3.11.6.15.11, Correspondence Imaging Inventory Indicator (CII IND), Source Document Attached Indicator (SD), and Remarks - Renamed the subsection (formerly correspondence Imaging System Indicator (CIS IND), Source Document Attached Indicator (SD), and Remarks) and revised the subsection. IPU 23U0277 issued 02-17-2023.

(303) IRM 3.11.6.16(1), (5),and (8), Form W-7 and ITIN Research - This subsection has been deleted and the instructions have been incorporated into IRM 3.11.6.16.14, Returns With an Individual Taxpayer Identification Number (ITIN) and IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7).

(304) IRM 3.11.6.16(1), (5), and (8), Form W-7 and ITIN Research - Updated to remove the Austin Only designation, remove paper processing instructions and to added CII instructions. IPU 23U0277 issued 02-17-2023.

(305) IRM 3.11.6.16(5) Form W-7 and ITIN Research - The processing references have been updated to ensure consistency. IPU 23U0945 issued 09-11-2023.

(306) IRM 3.11.6.16, Cases Requiring Special Handling - New subsection to identify cases that require extra research or adjustment steps to be taken.

(307) IRM 3.11.6.16.1, Processing Statute Cases - The subsection has been revised to simplify processing instructions.

(308) IRM 3.11.6.16.1, Processing Statute Cases - This subsection has been revised to prevent cases from being routed incorrectly. IPU 23U0277 issued 02-17-2023.

(309) IRM 3.11.6.16.1(1) and (3), Processing Statute Cases - Paragraph 1 has been updated to correct a reference. SERP Feedback# 9208. Paragraph 6 has been updated to correct a reference. IPU 23U0386 issued 03-13-2023.

(310) IRM 3.11.6.16.1(4), Processing Statute Cases - Updated correspondence paragraphs due to letter update. IPU 23U0712 issued 06-08-2023.

(311) IRM 3.11.6.16.2, Processing a Disaster Claim - The subsection has been revised to simplify processing instructions.

(312) IRM 3.11.6.16.3, Cases Returned From CAT-A Suspense - The subsection has been revised to ensure consistency.

(313) IRM 3.11.6.16.3(1), SP Cases Returned From CAT-A - Renamed the subsection (formerly SP MeF and SP CII Cases Returned From CAT-A) and No Consideration instructions were added. IPU 23U0277 issued 02-17-2023.

(314) IRM 3.11.6.16.4, Combat Zone - The subsection has been revised to simplify processing instructions.

(315) IRM 3.11.6.16.5, Inputting a Corrected Adjustment - The subsection has been revised to simplify processing instructions.

(316) IRM 3.11.6.16.5(1), Inputting a Corrected Adjustment - Added new Letter 76C instructions. IPU 23U0106 issued 01-17-2023.

(317) IRM 3.11.6.16.5, Inputting a Corrected Adjustment - The subsection was updated to remove paper processing instructions. IPU 23U0277 issued 02-17-2023.

(318) IRM 3.11.6.16.6, Math Error Response Cases - The subsection has been renamed (formerly Math Error Response) and revised to break-up instructions into several subsections simplify processing instructions.

(319) IRM 3.11.6.16.6(4), Math Error Response Cases - Corrected a bad reference. IPU 23U0106 issued 01-17-2023.

(320) IRM 3.11.6.16.6(5), Math Error Response Cases - Removed paper processing instructions. IPU 23U0277 issued 02-17-2023.

(321) IRM 3.11.6.16.6.1, The Amended Return Agrees with, or Doesn’t Address, the Math Error(s) - New subsection specifically address cases when the taxpayer agrees with or doesn’t address a math error.

(322) IRM 3.11.6.16.6.2, Processing a Timely Substantiated Protest to a Math Error Set on the Original Return - New subsection specifically address cases when the taxpayer submits a timely substantiated response.

(323) IRM 3.11.6.16.6.3, Processing a Late Substantiated Protest to a Math Error Set on the Original Return - New subsection specifically address cases when the taxpayer submits a late substantiated response.

(324) IRM 3.11.6.16.6.4, Processing a Timely Substantiated Protest to a Math Error Set on an Amended Return - New subsection specifically address cases when the taxpayer submits a timely substantiated response.

(325) IRM 3.11.6.16.6.5, Processing a Late Substantiated Protest to a Math Error Set on an Amended Return - New subsection specifically address cases when the taxpayer submits a late substantiated response.

(326) IRM 3.11.6.16.7, Inputting a Disallowance Adjustment - The subsection has been revised to simplify processing instructions.

(327) IRM 3.11.6.16.8, Estimated Tax Penalty (ETP) - The title has been updated and the subsection revised to specify ETP changes can be processed on superseding returns. IPU 23U0973 issued 09-22-2023.

(328) IRM 3.11.6.16.10, Decedent Returns - Revised correspondence instructions to ensure letters appropriately addressed.

(329) IRM 3.11.6.16.11(1), Form 8857, Request for Innocent Spouse Relief - Removed paper processing instructions. IPU 23U0277 issued 02-17-2023.

(330) IRM 3.11.6.16.12, Form 8379, Injured Spouse Allocation - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(331) IRM 3.11.6.16.14, Returns With an Individual Taxpayer Identification Number (ITIN) - New subsection to address cases with an ITIN present.

(332) IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7) - Revised the subsection (formerly titled Form W-7 and ITIN Research) to simplify research and processing instructions.

(333) IRM 3.11.6.16.14.1(8), Returns Received From the ITIN Unit (Form W-7), Revised the correspondence fill-in to account for the IAT Letters tool open paragraph limitation. IPU 23U0658 issued 05-25-2023.

(334) IRM 3.11.6.16.14.2, Individual Taxpayer Identification Number (ITIN) Status - Revised the subsection to simplify research and processing instructions.

(335) IRM 3.11.6.16.14.2(6), Individual Taxpayer Identification Number (ITIN) Status - Removed paper processing instructions. IPU 23U0611 issued 05-09-2023.

(336) IRM 3.11.6.16.15, Computer Paragraph (CP) Notices - The subsection has been revised to ensure consistent processing.

(337) IRM 3.11.6.16.15, Computer Paragraph (CP) Notices - The subsection has been moved (Formerly 3.11.6.2.2). In addition to moving the subsection, it has been entirely revised to consolidate procedures. IPU 23U0106 issued 01-17-2023.

(338) IRM 3.11.6.16.15, Computer Paragraph (CP) Notices - The entire subsection has been revised to add Document Upload Tool (DUT) information. IPU 23U0277 issued 02-17-2023.

(339) IRM 3.11.6.16.15(1), Computer Paragraph (CP) Notices - Updated to reflect the how responses are to be filed by tax year. IPU 23U0386 issued 03-13-2023.

(340) IRM 3.11.6.16.15(1), (6), (10), and (14), Computer Paragraph (CP) Notices - Revised the classified waste instructions because a new subsection specifically for classified waste has been added. IPU 23U0984 issued 10-02-2023.

(341) IRM 3.11.6.16.15.1, CP 08, You May Qualify for Child Tax Credit (CTC), and Form 15110, Additional Child Tax Credit Worksheet - The subsection has been revised to ensure consistent processing of responses.

(342) IRM 3.11.6.16.15.1, CP 08, Additional Child Tax Credit, and Form 15110 - The subsection has been moved (Formerly 3.11.6.13.6.1.2). In addition to moving the subsection, it has been entirely revised to consolidate procedures. IPU 23U0106 issued 01-17-2023.

(343) IRM 3.11.6.16.15.1(4), CP 08, Additional Child Tax Credit, and Form 15110 - Updated signature instructions. IPU 23U0277 issued 02-17-2023.

(344) IRM 3.11.6.16.15.1(4), CP 08, Additional Child Tax Credit, and Form 15110 - The correspondence instructions were updated because of the Letter 76C update. IPU 23U0611 issued 05-09-2023.

(345) IRM 3.11.6.16.15.2, CP 09, Earned Income Credit - You May Be Entitled to EIC, and Form 15111, Earned Income Credit Worksheet - The subsection has been revised to ensure consistent processing of responses.

(346) IRM 3.11.6.16.2, CP 09, Earned Income Credit, and Form 15111 - The subsection has been moved (Formerly 3.11.6.13.5.5). In addition to moving the subsection, it has been entirely revised to consolidate procedures. IPU 23U0106 issued 01-17-2023.

(347) IRM 3.11.6.16.15.2(5) and (8), CP 09, Earned Income Credit, and Form 15111 - Paragraph 5 has been revised to added new signature instructions. Paragraph 8 reason codes have been updated to ensure consistency. SERP Feedback# 8172. IPU 23U0277 issued 02-17-2023.

(348) IRM 3.11.6.16.15.2(8), CP 09, Earned Income Credit - You May Be Entitled to EIC, and Form 15111, Earned Income Credit Worksheet (CP 09) - Updated to address instances when only the taxpayer(s) qualify for EIC. IPU 23U0386 issued 03-13-2023.

(349) IRM 3.11.6.16.15.2(2) and (8), CP 09, Earned Income Credit - You May Be Entitled to EIC, and Form 15111, Earned Income Credit Worksheet (CP 09) - Paragraph 2 was updated to remove paper processing instructions now that all SP 1040-X workflows are scanned into CII. Paragraph 8 correspondence instructions were updated because of the Letter 76C update. IPU 23U0611 issued 05-09-2023.

(350) IRM 3.11.6.16.15.3, CP 27, EIC Potential for Taxpayer Without Qualifying Children, and Form 15112, Earned Income Credit Worksheet (CP 27) - The subsection has been revised to ensure consistent processing of responses.

(351) IRM 3.11.6.16.15.3(5), CP 27, EIC Potential for Taxpayer Without Qualifying Children, and Form 15112 - Revised the correspondence fill-in to prevent erroneous correspondence. IPU 22U1142 issued 12-01-2022.

(352) IRM 3.11.6.16.15.3, CP 27, Additional Child Tax Credit, and Form 15112 - The subsection has been moved (Formerly 3.11.6.13.5.6). In addition to moving the subsection, it has been entirely revised to consolidate procedures. IPU 23U0106 issued 01-17-2023.

(353) IRM 3.11.6.16.15.3(4) and (7), CP 27, Additional Child Tax Credit, and Form 15112 - Paragraph 4 has been revised to added new signature instructions. Paragraph 7 has been reason codes have been updated to ensure consistency. IPU 23U0277 issued 02-17-2023.

(354) IRM 3.11.6.16.15.3(2) and (7), CP 27, Additional Child Tax Credit, and Form 15112 - Paragraph 2 was updated to remove paper processing instructions now that all SP 1040-X workflows are scanned into CII. Paragraph 7 correspondence instructions were updated because of the Letter 76C update. SERP Feedback# 10516. IPU 23U0611 issued 05-09-2023.

(355) IRM 3.11.6.16.16, Processing Loose Form 8606 - Revised the subsection to ensure consistency in research and correspondence procedures.

(356) IRM 3.11.6.16.16(3), Processing Loose Form 8606 - Replaced Alpha File instruction with CII instructions. IPU 23U0277 issued 02-17-2023.

(357) IRM 3.11.6.16.17, Prisoner Returns - Combined instructions to ensure consistent processing. Additionally, the correspondence instructions have been revised to reduce possible delays when C-letters are updated.

(358) IRM 3.11.6.16.17(3), Prisoner Returns - Adding the new MISC field descriptors used with the TC 971 AC 123. IPU 22U1142 issued 12-01-2022.

(359) IRM 3.11.6.16.17(6), Prisoner Returns - Reformatted correspondence processing instructions. IPU 23U0277 issued 02-17-2023.

(360) IRM 3.11.6.16.17(6), Prisoner Returns - Updated correspondence paragraphs due to letter update. IPU 23U0712 issued 06-08-2023.

(361) IRM 3.11.6.16.18, Exam Soft Notices - CP 85A, CP 85B, CP 85C, CP 87A, CP 87B, CP 87C, and CP 87D - New subsection to address various Exam soft notices.

(362) IRM 3.11.6.16.19, Taxpayer Advocate Service (TAS) Cases - Deleted paper processing instructions since all SP 1040-X cases are worked through CII.

(363) IRM 3.11.6.16.20(4) and (6), Taxpayer Advocate Service (TAS) Cases - Paragraph 4 has been updated to remove paper processing instructions. Paragraph 6 has been to reflect CII processing and to add SP 1040-X Memphis instructions. IPU 23U0277 issued 02-17-2023.

(364) IRM 3.11.6.16.21, Loose Correspondence and Documents - The correspondence instructions have been revised to reduce possible delays when C-letters are updated.

(365) IRM 3.11.6.18, Classified Waste - Added a new subsection to include classified waste procedures. IPU 23U0984 issued 10-02-2023.

(366) IRM 3.11.6.17.1(6), CII Case Unpostable Resolution - The notation CIS AM TO ADJ was changed due to the system update. IPU 23U0060 issued 01-09-2023.

(367) IRM 3.11.6.17.2, Paper Case Unpostable Resolution - Deleted subsection to remove paper processing instructions since all SP 1040-X cases are worked through CII.

(368) IRM 3.11.6.18.4, For Lead Tax Examiners - Other Category Code Cases - Deleted subsection because SP 1040-X has switched to auto-distribution through CII.

(369) IRM 3.11.6.18.2(5), For Lead Tax Examiners - Reversing an Erroneous Adjustment - Added direct deposit. IPU 23U0277 issued 02-17-2023.

(370) Editorial changes have been made throughout the IRM to:

  • Reorganize the IRM structure without changing any substantive content or meaning. Sections flow in processing order and follow the Form 1040-X so tax examiners (TEs) can easily find needed information. During the reorganization, some subsections have been renamed.

  • Correct spelling and grammatical errors.

  • Add or correct references citations and links to the forms that are currently in the IRM so tax examiners can access the forms with ease.

  • Update information more subject to frequent changes such as queue numbers, tax years, and line-items on forms for the new tax filing season.

  • Update organizational terms, titles, and acronyms that are relevant for the 1040-X TEs.

  • Convert graphics to text and converting text to tables so that TEs will better understand our processes.

  • Improve the quality of an existing graphic or adding alternative text.

Effect on Other Documents

IRM 3.11.6, dated October 19, 2022 (effective January 3, 2023), is superseded. This IRM incorporates IRM Procedural Update (IPU): 22U1142 issued December 12, 2022, 23S0003 issued January 3, 2023, 23U0042 issued January 5, 2023, 23U0060 issued January 9, 2023, 23U0106 issued January 17, 2023, 23U0242, issued February 6, 2023, 23U0277 issued February 17, 2023, 23U0386 issued March 13, 2023, 23U0611 issued May 9, 2023, 23U0658 issued May 25, 2023, 23U0700 issued June 5, 2023, 23U0712 issued June 8, 2023, 23U0763 issued June 22, 2023, 23U0844 issued July 24, 2023, 23U0883 issued August 10, 2023, 23U0894 issued August 16, 2023, 23U0945 Issued September 11, 2023, 23U0956 Issued September 13, 2023, 23U0973 Issued September 22, 2023, and 23U0984 Issued October 2, 2023.

Audience

Wage and Investment Submission Processing Tax Examiners

Effective Date

(01-02-2024)


James L. Fish
Director, Submission Processing
Wage and Investment

3.11.6.1 (01-02-2024)

Program Scope and Objectives

  1. Purpose: This IRM covers Form 1040-X, Amended U.S. Individual Income Tax Return, Computer Paragraph (CP) CP 08, You May Qualify for a Refund From the Additional Child Tax Credit, CP 09, You May Be Eligible for the Earned Income Credit (EIC), and CP 27, You May be Eligible for the Earned Income Credit (EIC) - Complete EIC Worksheet, processing procedures for Integrated Data Retrieval System (IDRS).

  2. Audience: These procedures apply to SP 1040-X employees such as Supervisory Tax Examining Technicians, Lead Tax Examining Technicians, and Tax Examining Technicians, who are responsible for processing amended tax returns and related correspondence.

  3. Policy Owner: Director, Submission Processing

  4. Program Owner: Submission Processing, Post Processing Section, Specialty Programs Branch

  5. Primary Stakeholders: SP 1040-X employees, Accounts Management (AM), Small Business/Self-Employed (SBSE), Large Business and International (LB&I), Return Integrity Compliance Systems (RICS), Chief Financial Officer (CFO), Taxpayer Advocate Service (TAS), Chief Counsel, Information Technology programmers, Compliance, Submission Processing (SP)

  6. Program Goals: This IRM provides the fundamental knowledge and procedural guidance for employees who work Form 1040-X. By following the processes and procedures provided in this IRM, employees will adjust tax accounts using documents provided by the taxpayer in a manner that follows IRS policy and procedures while promoting the best interests of the Government.

3.11.6.1.1 (05-25-2023)

Background

  1. Employees in the Submission Processing (SP) 1040-X organization:

    • Perform a preliminary review of Form 1040-X.

    • Screen, sort, route, and prioritize the forms for processing.

    • Process Form 1040-X using AMS, CII, EUP, RRD, IDRS, and IAT tools.

    • Input specific Individual Master File (IMF) Adjustments.

    • Correspond for missing required forms and signatures.

    • Aid in determining fraud and frivolous positions.

    • Input adjustments from CP Notices.

3.11.6.1.2 (06-03-2021)

Authority

  1. Authority for these procedures is found in the following sections of the Internal Revenue Code (IRC) and their corresponding Treasury regulations.

    • IRC 6201(a)

    • IRC 6213(b)

    • IRC 6402(a)

    • IRC 6511

    • Protecting Americans from Tax Hikes Act (PATH Act) enacted December 18, 2015

    • The Disaster Tax Relief and Airport and Airway Extension Act of 2017, enacted on September 29, 2017

    • The Tax Cuts and Job Act (TCJA) enacted on December 22, 2017

    • The Bipartisan Budget Act of 2018 enacted February 9, 2018

    • The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of 2020, enacted March 27, 2020

    • The Consolidated Appropriations Act, 2021, enacted December 27,2020

    • American Rescue Plan Act of 2021, enacted March 11, 2021

3.11.6.1.3 (11-09-2017)

Roles and Responsibilities

  1. The Director of Submission Processing is responsible for monitoring operational performance for the Submission Processing campuses.

  2. The Operations Manager is responsible for monitoring operational performance.

  3. The Team Managers and Leads are responsible for performance monitoring and ensuring employees have the tools to perform their duties.

  4. Employees are responsible for following the instructions contained in this IRM and maintaining updated IRM procedures.

3.11.6.1.4 (11-21-2019)

Program Management and Review

  1. Program Reports: ERS Draft language - System control reports are on the Control-D, WebAccess (CTDWA).

  2. Program Effectiveness: Program effectiveness is determined by Submission Processing’s employees successfully using IRM guidance to perform necessary account actions and duties. The following are used to ensure program effectiveness:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

  3. Annual Review: Review the processes included in this manual annually to ensure accuracy and promote consistent tax administration. This may be included under responsibilities for a manager.

3.11.6.1.5 (07-19-2022)

Program Controls

  1. Federal Managers Financial Integrity Act (FMFIA) of 1982 requires federal agency executives to periodically review and annually report on the agency's internal control systems.

  2. The Government Accountability Office (GAO) sets forth the standards for an effective internal control system for federal agencies in the Standards for Internal Control in the Federal Government.

  3. Systemic controls are embedded in the Integrated Automation Technologies (IAT) tools and the Integrated Data Retrieval System (IDRS).

3.11.6.1.6 (01-03-2023)

Acronyms

  1. Acronyms commonly used include the following:

    Acronym Definition
    AC Action Code
    AIMS Audit Information Management System
    AM Accounts Management
    AMS Account Management Services
    AQC Automated Questionable Credit (RIVO)
    ASED Assessment Statute Expiration Date
    ATIN Adoption Taxpayer Identification Number
    BS Blocking Series
    CC Command Code
    CII Correspondence Imaging Inventory
    CRN Credit Reference Number
    DDBCK Dependent Database Check
    DUPOL DUPlicate TIN OnLine
    EIP Economic Impact Payment
    EITC Earned Income Tax Credit
    ERO Electronic Return Originator
    EUP Employee User Portal
    HC Hold Code
    HOH Head of Household
    IAT Integrated Automation Technologies
    IDRS Integrated Data Retrieval System
    IMF Individual Master File
    IRN Item Reference Number
    ITIN Individual Taxpayer Identification Number
    FS Filing Status
    MAGI Modified Adjusted Gross Income (always greater than the AGI)
    MFJ Married Filing Joint
    MFS Married Filing Separate
    MFT Master File Tax
    NC Name Control
    NSD No Source Document
    O/S Original Signature
    ODC Credit for Other Dependents
    PIN Personal Identification Number
    POA Power of Attorney
    QND Qualifying Non-Dependent
    QSS Qualifying Surviving Spouse
    RC Reason Code
    RRD Return Request Display
    RSED Refund Statute Expiration Date
    RTS Real Time System
    SC Source Code
    SDI Source Document Indicator
    SP Submission Processing
    SSN Social Security Number
    TC Transaction Code
    TCD Technical Communication Document
    TIN Taxpayer Identification Number

  2. For a comprehensive listing of any IRS acronyms, please refer to the Acronym Database.

3.11.6.1.7 (01-02-2024)

Related Resources

  1. Use the following IRMs when guidance isn't provided within IRM 3.11.6:

    • IRM 2.4, IDRS Terminal Input

    • IRM 3.10.72, Receiving, Extracting, and Sorting

    • IRM 3.10.72-1, Routing Guide/Local Maildex

    • IRM 3.10.72-2, Correspondex C Letters - Routing Guide

    • IRM 3.10.72-3, Computer Paragraph CP Notices - Routing Guide

    • IRM 3.10.72-4, Miscellaneous Documents/Forms/Correspondence - Routing Guide

    • IRM 3.11.3, Individual Income Tax Returns

    • IRM 3.11.249.3.2.1, Document Locator Number (DLN)

    • IRM 3.12.37.25, Correspondence

    • IRM 3.12.179, Individual Master File (IMF), Payer Master File (PMF) Unpostable Resolution

    • IRM 3.13.5, Individual Master File (IMF) Account Number

    • IRM 3.24.3, Individual Income Tax Returns

    • IRM 21.6.1, Filing Status and Exemption/Dependent Adjustments

    • IRM 21.6.2, Adjusting TIN-Related Problems

    • IRM 21.6.3, Credits

    • IRM 21.6.4, Tax Computation / Accounting Period Changes

    • IRM 21.6.6, Specific Claims and Other Issues

    • IRM 21.6.7, Adjusting Individual Tax Accounts

    • IRM 21.5.3-2, Examination Criteria (CAT-A) - General

    • IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits

  2. Websites and electronic tools used to process adjustments include:

    • Accounts Management Services (AMS)

    • Campus Document Routing Guide and Maildex Listings

    • Correspondence Imaging Inventory (CII)

    • Correspondex Letters

    • Employee Use Portal (EUP)

    • IMF 1040X Research Portal

    • Integrated Automation Technologies (IAT)

    • Integrated Data Retrieval System (IDRS)

    • Interactive Tax Law Assistant (ITLA)

    • IPUs and Prior IRM Revisions

    • IRC 30D New Qualified Plug-In Electric Drive Motor Vehicle Credit

    • IRS Certified Professional Employer Organizations Public Listings

    • IRS Disaster Assistance Program

    • IRS Tax Publications

    • Modernized e-File Return Request Display (RRD)

    • Servicewide Electronic Research Program (SERP)

    • SERP Feedback

    • Servicewide Notice Information Program (SNIP)

    • USPS.com

    Note:

    References to tools and websites used aren’t exhaustive or complete. See the training materials and job aids for more Information.

  3. Additional CII information, including the CII Performance Guide (Course Number 6902c-203 CSR Guide), can be found under the Local/Sites/Other tab on SERP, followed by the Correspondence Imaging Inventory (CII) tab. The CSR Guide provides additional explanations, information, and instructions.

  4. RRD is accessed through EUP. The RRD application displays specific tax return and status information for tax returns/extensions processed by the MeF application. This application allows IRS employees to view 100% of the data transmitted on MeF tax returns/extensions (including attachments) in a format that resembles paper forms.

  5. Use Document 6209, IRS Processing Codes and Information, 1040 attachment guide, Tax Form and Instructions (accessible through the IRS Home Page), and Pub 17, Your Federal Income Tax (For Individuals), when processing amended returns. These are valuable resources for obtaining additional information, resolving questions and completing math verification.

  6. This IRM doesn't cover all scenarios. See your lead or manager when clarification is needed.

3.11.6.2 (01-02-2024)

General Form 1040-X Information

  1. Taxpayers can add, delete, update, or change tax information reported on their original tax return, including amounts adjusted by the IRS, by filing an amended return. Generally, taxpayers need to complete and submit, electronically or by mail, a Form 1040-X, Amended U.S. Individual Income Tax Return, to amend their original return, but they do have the option to use Form 1040, U.S. Individual Income Tax Return, Form 1040-SR, U.S. Tax Return for Seniors, or Form 1040-NR, U.S. Nonresident Alien Income Tax Return. Regardless of the filing method used, Submission Processing (SP) 1040-X tax examiners use the Correspondence Imaging Inventory (CII) system when processing amended returns.

    Note:

    Amended returns received electronically are automatically transferred to the CII system and those received by mail are scanned into the CII system.

  2. Page 1 of Form 1040-X contains three columns to help taxpayers calculate changes:

    1. Column A, Original amount, shows amounts originally claimed by the taxpayer, amounts adjusted by the IRS (math error on original return) or amounts adjusted from a previously filed Form 1040-X for the same tax period.

    2. Column B, Net change, shows the amount of change (increase or decrease) for each line the taxpayer is changing. Taxpayers are instructed to show decreases in parenthesis, explain each change in the Explanation of Changes on page 2 of Form 1040-X or attached statement and attach any schedule and/or form related to the change.

    3. Column C, Correct Amount, shows the amended figures.

  3. All references to line numbers are for the current revision of the form or schedule unless otherwise specified.

  4. The operational instructions in this IRM determine if the adjustment request can be made in Submission Processing or if it must be sent to another area or function.

  5. General SERP Alerts issued for IRM 3.11.6 are additions to the IRM and are followed as part of IRM 3.11.6.

  6. The operational guidance in this IRM takes precedence over any conflicting IRM. The specific section instructions take precedence over any general instruction.

    Note:

    This IRM does link to specific subsections in other IRMs. When following links to other subsections, typically, the instructions are within that subsection. Occasionally, there are instances in which you must follow a link within the subsection.

    Example:

    When researching Child Tax Credit to determine eligibility, you refer to IRM 21.6.3.4.1.24.1, Child Tax Credit (CTC) - Qualifications. If the eligibility criteria are met, you continue processing the claim per IRM 3.11.6. If eligibility isn't met and you're instructed to disallow, you refer to IRM 3.11.6.14.2.2.6, Child Tax Credit (CTC), and IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), for instructions on disallowing the claim.

  7. Not all scenarios are covered by this IRM. Follow IRM 3.11.6.1.7, Related Resources, when this occurs. If clarification is needed, contact your lead for assistance. Leads follow IRM 3.11.6.18.1, For Lead Tax Examiners - Related IRMs and Resources.

  8. Edit your Tax Examiner (TE) number in the top left margin of amended returns when documents are being detached, printing a paper copy, rerouting, or sending an e-fax or secure message.

  9. When processing an amended return, the CII Case ID is required in the remarks section of all IDRS transactions, such as REQ54, ENREQ, REQ77, and credit transfers.

  10. The general sequence is to determine if:

    1. Routing criteria is met

    2. The claim is complete

    3. The claim is allowable

    4. The claim is processable

  11. When processing amended returns and CP Notices, use IDRS, AMS, CII, EUP, and RRD.

  12. Use of IAT tools is required. IRM instructions take precedence over any instructions, directions or default inputs the IAT tools provide. If specific IRM instructions are not present, accept the IAT Tool results.

    Note:

    Prior to using the IAT tools, you must complete setup and complete your IAT profile.

  13. Researching previous tax years may assist in processing a return. Tax examiners must have a valid business reason to access related accounts.

3.11.6.2.1 (01-02-2024)

Processing Time Frames and Suspense Time Frames

  1. Form 1040-X, Amended U.S. Individual Income Tax Return, Computer Paragraph (CP) CP 08, You May Qualify for a Refund From the Additional Child Tax Credit, CP 09, You May Be Eligible for the Earned Income Credit (EIC), and CP 27, You May be Eligible for the Earned Income Credit (EIC) - Complete EIC Worksheet, notices must be processed in first in/first out (FIFO) order by oldest IRS Received Date regardless of the filing method in accordance with the timeframes described in this section. For additional information on processing timeframes, see IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates.

  2. Cases that have been received through the mail that have the same received date are batched together. Cases received from areas within the IRS are identified as Inter office (I/O); Such as, Work I/O, Statute I/O, and W-7 I/O. When creating an I/O batch, use the current date as the Julian Date in BBTS.

  3. Form 1040-X, CP notices, and I/O work all have the same processing timeframe.

    Work type... Then ...
    Form 1040-X Process the Form 1040-X within 30 calendar days from the IRS received date (day one) to the date the CII Case is reassigned or rerouted to another area (ending day), the CII case is closed (ending day), or the input of a TC 29X.
    CP 08, CP 09, or CP 27 Process the CP case within 30 calendar days from the IRS received date (day one) to the date the CII Case is reassigned or rerouted to another area (ending day), the CII case is closed (ending day), or the input of a TC 29X.
    I/O Process the I/O case within 30 calendar days from the IRS received date (day one) to the date the CII Case is reassigned or rerouted to another area (ending day), the CII case is closed (ending day), or the input of a TC 29X.
    Form 4442, Inquiry Referral, or E-4442 Process the referral within 30 calendar days.

  4. Amended return suspense time frames are as follows:

    Note:

    C-Letter correspondence suspense time frames are applicable to the SP-Letter version.

    Reason for Suspense ... Time Frame ...
    No TC 150

    • 60 days from the received date

    • ERS Status is "100", suspend for 5 working days

    • If the tax data is present and/or is pending, 60 days from the received date
    TC 150 posting date shows 00000000 or is blank

    • For TY 2024 and prior, suspend the amended return until Posting Cycle 22

    • If the amended return is received during Posting Cycle 21 or later and the posting date shows 00000000 or is blank, then suspend the case for 14 days
    Unpostable TC 150 45 days from today.
    Corrected Unpostable TC 150 10 days from today.
    Pending TC 150 10 days from today.
    RETREG 21 days from today.
    Letter 324C per IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C). 45 days from the date the letter sent on IDRS.
    Letter 324C or Letter 916C per IRM 3.11.6.16.1, Processing Statute Cases. 45 days from the date the letter sent on IDRS.
    Credit transfer during "Dead Cycles" Suspend until after the "Dead Cycles"
    Undelivered correspondence per IRM 3.11.6.10.13, Undelivered Correspondence If the case is in suspense, 45 days from the date of your newly issued letter.
    Unemployment Compensation Exclusion (UCE) per IRM 3.11.6.14.1.1.3, Unemployment Compensation Exclusion (UCE) - Tax Year 2020 Only (Line 1) Suspend for 10 working days.

3.11.6.2.1.1 (01-02-2024)
1040-X Suspense Activity Codes

  1. When suspending a case, use the appropriate suspense reason from the "Suspense" drop-down listed below.

    If ... And ... Then use ...
    No TC 150

    1. The case is in ERS Status 100.

    2. If tax data is present and/or is pending (must be present on primary taxpayer for FS 3), per IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150)

    1. "No TC 150 ERS Status 100" .

    2. "No TC150" .
    TC 150 posting date shows 00000000 or is blank   "No TC 150 Posting Date" .

    Note:

    If the return is received in Cycle 21 or later, use "No TC 150 Posting Date Received in Cycle 21 or Later"
    Unpostable TC 150   "Unnn TC 150" .
    Corrected Unpostable TC 150   "CU TC 150" .
    Pending TC 150   "PN TC 150" .
    Statute return on retention   "RETREG" .
    Letter 324C   "324C-SNT" .
    Letter 916C or Letter 916SP   "916C-SNT" .
    Credit transfer during "Dead Cycles"   "Dead Cycle" .

    Note:

    If a suspense reason listed above not available in the drop-down menu, use "MONITOR" as the reason for suspense.

3.11.6.2.2 (11-09-2017)

Internal Revenue Manual (IRM) Deviations

  1. Service Center Directors, Headquarter Branch Chiefs, and Headquarter Analysts don't have the authority to approve deviations from IRM procedures. Any request for an exception or deviation to an IRM procedure must be elevated through appropriate channels for executive approval. This ensures other functional areas are not adversely affected by the change, and it doesn't result in disparate treatment of taxpayers.

  2. See specific guidelines in IRM 1.11.2, Internal Revenue Manual (IRM) Process. Request for an IRM deviation must be submitted in writing and signed by the field director, following instructions from IRM 1.11.2.2.4(3). Any disclosure issues must be coordinated by the program owner. No deviations can begin until reviewed by the program owner and approved at the executive level. All requests must be submitted to the Submission Processing Headquarters IRM Coordinator.

3.11.6.2.3 (09-25-2020)

IRS Employees and Covered Relationships

  1. IRS employees can be identified from the IRS-EMP-CD on CC TXMOD and on CC IMFOLT. There are special procedures that you must follow to protect the taxpayer employee, as well as to protect yourself.

  2. If you access an account of an IRS employee that you don't know, work the case and see (4) below.

  3. If you access an account of an IRS employee that you do know, or if you access an account of someone that falls under a covered relationship such as family members, friends, or neighbors, refer the case to your lead or manager and see (4) below.

  4. Completing Form 11377-E, Taxpayer Data Access, is voluntary but highly recommended. The purpose is to document the reason(s) that the tax return and/or information on IDRS was accessed when the case wasn't assigned directly to you.

3.11.6.2.4 (01-02-2024)

Integrated Data Retrieval System (IDRS) Access

  1. While working cases, SP employees may encounter modules that are blocked on IDRS. These modules are identified by an IDRS security violation message, "Unauthorized to Access This Account" . Reassign the CII case ID to your manager. Managers must notify the local Planning & Analysis staff who must send the CII case ID as encrypted information to the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ mailbox requesting access to the account. Managers must retain the original case in CII inventory, awaiting access that can take up to five business days. Once notified that access has been granted, the case can be transferred back to the tax examiner to work following applicable procedures.

3.11.6.2.5 (01-02-2024)

Document Perfection Operation (DPO) Submission Processing (SP) 1040-X Organization Function Program (OFP) Information

  1. SP 1040-X OFP codes are used for reporting work closed by individual Tax Examiners.

  2. SP 1040-X OFP codes are used in conjunction with the weekly WPC (Work Planning and Control) reporting system.

  3. The following represent the codes used for reporting the work performed:

    Work Type ... OFP...
    MeF (MEFP)

    • 710-44490 - 1040-X MeF processing
    Paper cases scanned into CII (MEFS)

    • 710-44450 - 1040-X scan processing

    • 710-44452 - W-7 scan processing
    DUT CP Notices (MEFS)

    • 710-40411 - CP 27

    • 710-40412 - CP 09

    • 710-40413 - CP 08
    Paper CP Notices scanned into CII (MEFS)

    • 710-40000 - CP 27

    • 710-40002 - CP 09

    • 710-40003 - CP 08

  4. For additional information regarding OFP codes, refer to IRM 3.30.20, Work Planning and Control - Organization, Function, and Program (OFP) Codes.

3.11.6.2.5.1 (02-17-2023)
Daily Work Record (DWR)

  1. The daily work record (DWR) is used to report the volume of work processed by work type. Every tax examiner is responsible for completing a DWR and submitting it to their manager or lead.

3.11.6.2.6 (02-17-2023)

Systems

  1. The IRS uses a network of tax account and information systems to maintain communication with and service to the taxpaying public. This section gives condensed descriptions and explanations of many of the systems, databases, files and processes used or researched by Customer Account Services (CAS) employees. Although this list isn't all-inclusive, these systems are used to:

    • File tax returns

    • Process tax returns

    • Process information returns

    • Issue notices, refunds, and letters

    • Store and retrieve information

    • Process adjustments to information

    • Provide information for other official purposes

  2. 1040-X personnel need a general understanding of the systems and the ability to research for more specific information when needed, using these and other systems.

    • Master File (MF) – MF is the official repository of all taxpayer data extracted from magnetic tape records, paper and electronic tax returns, payments, and related documents, is maintained at Enterprise Computing Center - Martinsburg (ECC-MTB) and /or Enterprise Computing Center - Memphis (ECC-MEM). For more information about MF, see IRM 21.2.1.2, Master File.

    • Integrated Data Retrieval System (IDRS) – IDRS accesses Master File account information using IDRS Command Codes (CCs) to take control of and take action on cases, request and receive printouts of modules, research accounts, research or extract from MF tapes, and to issue letters to taxpayers. For more information about IDRS, see IRM 21.2.1.3, IDRS.

      Note:

      There are various Integrated Automation Technologies (IAT) tools available that automate specific IDRS actions. Refer to IRM 3.11.6.2.6.2, Integrated Automation Technologies (IAT) Tools, for more information

    • Account Management Services (AMS) – AMS provides a common user interface that allows users to update taxpayer accounts, view history and comments from other systems and access a variety of case processing tools. For more information about AMS, see IRM 21.2.1.8, Account Management Services (AMS).

    • Correspondence Imaging Inventory (CII) – CII is a document imaging and workflow system. All incoming paper correspondence, notice replies, amended returns, internal transcripts, and internal Computer Paragraph (CP) notices are scanned and processed as digital images. CII interacts with IDRS to control cases and distribute cases electronically to tax examiners for resolution. The digital cases are assigned to tax examiners who work the cases online using the workflow software. CII interacts with IDRS to initiate various command codes and can be used to capture the request completed screens as a part of the digital case. CII inventory is accessed using the AMS system. Users must access AMS first and then select the CII inventory link. For more information about CII, see IRM 21.2.1.9, Correspondence Imaging Inventory (CII).

      Note:

      There are different roles assigned in CII that allow users to perform certain actions. Refer to IRM 3.11.6.2.6.3, Correspondence Imaging Inventory (CII) Roles, for more information.

    • Name Search Facility (NSF) – The NSF contains the full taxpayer or business names used and the most current Master File addresses. For more information about NSF, see IRM 21.2.1.13, Name Search Facility (NSF).

    • Taxpayer Information File (TIF) – The TIF consists of multiple areas of information. The TIF provides tax account information for certain taxpayers (generally involving only active accounts) on the database. Balance due notices are issued from the TIF. For more information about TIF, see IRM 21.2.1.14, Taxpayer Information File (TIF).

    • Fact-Of-Filing (FOF) – The FOF file contains timely filed IMF/CADE2 refund returns (original only), usually posted within three weeks of processing. For more information about FOF, see IRM 21.2.1.16, Fact-Of-Filing (FOF).

    • Tax Return Data Base (TRDB) – TRDB contains all of the tax return data for electronically filed returns and subsequent corrections. Reject codes are displayed for research. For more information about TRDB, see IRM 21.2.1.21, Tax Return Data Base (TRDB).

    • Modernized e-File (MeF/TRDB) – MeF/TRDB is a web-based system that allows electronic filing of Individual, Corporate, Partnership, Exempt Organizations, Excise, Estate and Trusts, and Employment Tax Returns through the Internet. For more information about MeF/TRDB, see IRM 21.2.1.22, Modernized e-File (MeF/TRDB).

    • Modernized e-File Return Request Display (RRD) – The RRD application displays specific tax return and status information for original and amended tax returns/extensions processed by the MeF application. This application allows IRS employees to view 100% of the data transmitted on MeF tax returns/extensions (including attachments) in a format that resembles paper forms. Access to RRD is through the Employee User Portal (EUP). For more information about the RRD, see IRM 21.2.2.4.4.9, Modernized e-File Return Request Display (RRD).

    • E-File Services (eFS) System – The eFS System offers several methods for filing taxes and transferring funds electronically. eFS uses several multi-functional Electronic Filing Systems (EFS) to receive and process individual and business returns. For more information about the eFS System, see IRM 21.2.1.38, E-File Services (eFS) System.

    • Where’s My Amended Return (WMAR) – The WMAR is an Integrated Customer Communication Environment (ICCE) application, established March 18, 2013, to provide automated access to the processing status of Form 1040-X, US Amended Return. It is available in English and Spanish and allows taxpayers to track the status of their Form 1040-X for the current year and up to three prior years. They must wait three weeks after filing the form before using WMAR. Consistent messages are provided by the phone and web versions of WMAR. For more information about the WMAR, see IRM 21.2.1.59, Where’s My Amended Return (WMAR) .

3.11.6.2.6.1 (05-09-2023)
IDRS Command Codes (CC)

  1. All SP 1040-X tax examiners, quality reviewers and leads use the following IDRS command codes. See the IDRS Command Code Job Aid for detailed information on the command codes. There are various Integrated Automation Technologies (IAT) tools available that automate specific IDRS CC actions.

    Command Codes required for all Tax Examiners Additional Command Codes required for all Lead and Quality Review Tax Examiners

    • ACTON

    • ADD24

    • ADD34

    • ADD48

    • ADJ54

    • AMDIS

    • BMFOL

    • CFINK

    • DDBCK

    • DDBKD

    • DRT24

    • DRT48

    • DUPED

    • DUPOL

    • EICMP

    • ENMOD

    • ENREQ

    • ERINV

    • FFINQ

    • FIEMP$

    • FINDS

    • FRM34

    • FRM77

    • FTBOL

    • IMFOL

    • INCHG

    • INOLE

    • IRPTR

    • LETER

    • LPAGD

    • LPAGE

    • MESSG

    • MFREQ

    • NAMEB

    • NAMEE

    • NAMEI

    • NAMES

    • PGNUM

    • REQ54

    • REQ77

    • RTVUE

    • SFDISP

    • SUMRY

    • TERUP$

    • TPIIP

    • TRDBV

    • TRDPG

    • TXCMP

    • TXMOD

    • UPTIN

    • ESTAB

    • QRACN

    • QRADDG

    • RVIEW

3.11.6.2.6.2 (02-17-2023)
Integrated Automation Technologies (IAT) Tools

  1. The use of Integrated Automation Technologies (IAT) Tools is required by all SP 1040-X employees. IAT tools are desktop productivity enhancing tools and simplify taxpayer account processing by assisting the user with IDRS research and input. If IDRS or a command code (CC) is down or not functioning properly, IAT won’t function correctly. If you're having a problem with an IAT tool, try entering the command code manually using IDRS. If there are no IDRS or CC issues, continue processing the case manually and notify your lead or manager there's a problem with IAT. If an IAT tool isn't available, or an employee has a problem with the IAT Tool Manager, the case should be processed through IDRS following established procedures.

    Caution:

    IRM instructions take precedence over any instructions, directions or default inputs the IAT tools provide. If specific IRM instructions are not present, accept the IAT Tool results.

  2. The IAT tools used are:

    • ACT ON

    • Address

    • Code Search Index (CSI)

    • Credit Transfer

    • eClerical

    • Fill Forms

    • IAT

    • Letters

    • Name Search

    • Quick Command Code (QCC)

    • REQ54

    • REQ77

    • RESULT

    • Stop Refund (NOREF)

    • xMend

      Note:

      The xMend tool incorporates access to several of the IAT tools.

3.11.6.2.6.3 (02-17-2023)
Correspondence Imaging Inventory (CII) Roles

  1. Each site will designate the employees assigned to one of the following roles.

    • Site User Manager (SUM)

    • Back-up SUM (BSUM)

    • Manager

    • Lead

    • Tax Examiner

    • Clerk

  2. The SUM:

    1. Has the ability to see all CII profiles for the site and can update all profiles for the site.

    2. Can distribute cases to a SUM, BSUM, manager, lead, and tax examiner.

  3. The BSUM:

    1. Has the ability to see all CII profiles for the site and can update all profiles for the site.

    2. Can distribute cases to a SUM, BSUM, manager, lead, and tax examiner.

  4. The manager:

    1. Has the ability to see all CII profiles for their employees and can update their profiles.

    2. Can distribute cases from the CII system to a SUM, BSUM, manager, lead, and tax examiner.

  5. The lead:

    1. Has the ability to see all CII profiles for their employees and can update their profiles.

    2. Can distribute cases from the CII system to a lead, and tax examiner.

    3. Can process cases.

  6. The tax examiner processes cases assigned to them by the:

    1. CII system

    2. SUM

    3. BSUM

    4. Manager

    5. Lead

  7. The clerk:

    1. Can scan and validate documents.

    2. Can do research on CII cases.

3.11.6.3 (01-02-2024)

Controlling Cases on the Correspondence Imaging Inventory (CII) System

  1. All Submission Processing (SP) 1040-X inventories, received on paper and scanned into the Correspondence Imaging Inventory (CII) system, received through the Modernized e-File (MeF) system, or the Document Upload Tool (DUT) are held in a generic central CII queue. The central queue is commonly referred to as the Global Queue (GQ) and can be identified by the unique Integrated Data Retrieval System (IDRS) number, 0938000000.

  2. Each case in the GQ is controlled systemically on the Integrated Data Retrieval System (IDRS) when the CII case is created. Cases in the GQ are considered unassigned (UA) and pending assignment through auto-distribution. For more information on controlling CII cases or auto-distribution, see IRM 3.13.6.2.7, Preparing Documents for Scanning - General Instructions, IRM 3.13.6-1, APPENDIX A - DOCUMENT TYPES, CATEGORY CODES, IMF DOMESTIC, and IRM 3.11.6.3.1, Auto-Distribution.

  3. If any part of the CII case data is incorrect, follow to IRM 3.11.6.4.8, Updating Case Data, before completing your case action.

  4. If the case has multiple control bases with the same received date, close all bases upon case completion.

  5. If you receive an inquiry from another area concerning controlled cases, the inquiry must be on Form 4442, Inquiry Referral, or E-4442. Refer to IRM 3.11.6.16.9, Form 4442 and E-4442, Inquiry Referrals.

3.11.6.3.1 (08-16-2023)

Auto-Distribution

  1. The Correspondence Imaging Inventory (CII) system’s auto-distribution functionality is used in Submission Processing (SP) to distribute cases to a SP 1040-X tax examiner (TE) for processing. Cases are distributed during the evening, Monday through Friday, based on the TE’s CII profile. It’s the responsibility of the TE’s manager to set and adjust the TE’s CII profile settings:

    1. Availability (AVBL)

    2. Max User Inventory limit (MUI)

    3. Volume per Day limit (VpD)

    4. Skill Set

  2. The AVBL setting must be set to "Available" for a TE to receive cases through auto-distribution. Using the "Unavailable" setting prevents the system from auto-distributing cases to the TE, and cases can’t be manually assigned to or reassigned from the TE. This setting should only be used when a TE is detailed to another area or is placed in non-duty status.

    Caution:

    If changing a TE’s Availability to "Unavailable" , all cases, if any, in the TE’s inventory must be reassigned manually by the manager to another TE before making the profile change.

  3. The MUI limit is 500 cases. This limit is the total number of cases a TE can have in inventory and cases in suspense count against this limit. If a TE’s inventory reaches the limit, the TE is excluded from distribution until the TE’s inventory falls below the limit. Cases that are created using TE’s number in CII at validation are still distributed to the TE, if active and available, without regard to the limit.

    Note:

    The MUI may be modified when appropriate, but not below the 500-case minimum for SP 1040-X TEs.

    Exception:

    The MUI for TEs that have finished their new hire training class and are on Skill Set "a" and "b" learning curve, the MUI minimum is 200 cases.

  4. The VpD limit is 75 cases. This limit is total number of cases a TE receives daily through the auto-distribution process. Cases that are created using TE’s number in CII at validation are still distributed to the TE, if active and available, without regard to the limit.

    Note:

    The VpD may be modified when appropriate, but not below the 75-case minimum for SP 1040-X TEs.

  5. The Skill Set is used by the CII system to identify the Document Type (Doc Type) to be auto-distributed to a TE. The CII Skill Sets for SP 1040-X are:

    1. SP 1040X

    2. SP 1040X W7

    3. SP 1040X CP 08

    4. SP 1040X CP 09

    5. SP 1040X CP 27

    Note:

    All TEs, once finished with their new hire training class, are required to have their CII profile setup for CII Skill Sets "1" and "2" shown above. Once a TE’s learning curves for skills “1” and “2” have been completed, the CP notice skill sets are to be add to the TE’s CII profile.

  6. In the event a TE depletes their active inventory and TE needs cases before the next auto-distribution, a manager, or lead, is able to manually reassigns cases from the auto-distribution queue directly to the TE. When manually reassigning cases from the auto-distribution queue to a TE:

    1. Verify what Doc Types the TE is profiled to process. Refer to paragraph 5 above.

    2. Determine which cases in the auto-distribution queue contains the oldest cases the TE is eligible to process based on the TE’s profile.

    3. Reassign the oldest cases by Doc Type to the TE.

    Note:

    If manually reassigning cases, the MUI limit may need to be increased.

  7. To temporarily stop distribution of cases to a TE, when on leave for example, set the volume per day to zero. Don’t set TE’s CII Availability to "Unavailable" for brief, temporary absences.

3.11.6.4 (01-02-2024)

Amended Return Preliminary Review

  1. Occasionally, taxpayers file multiple returns or CP Notices and each require a Document Type (Doc Type) for the Correspondence Imaging Inventory (CII) system. Refer to IRM 3.11.6.4.8 (2), Updating Case Data, for the CII Doc Types used by Submission Processing (SP) 1040-X.

  2. Multiple filings for the same tax year (TY) requiring the same Doc Type, result in a CII case having multiple return images. Multiple filings requiring different Doc Type will have a have multiple CII cases.

    If ... And ... Then ...
    The taxpayer filed an amended return for TY 2023 on paper The taxpayer submits another amended return for TY 2023 on paper and the CII case for the first return is still open The second return will be present on the existing CII case.
    The taxpayer filed an amended return for TY 2023 on paper The taxpayer submits another amended return for TY 2023 on paper and the CII case for the first return is closed The second return creates a new CII case.
    The taxpayer filed an amended return for TY 2023 on paper The taxpayer submits another amended return for TY 2023 electronically and the CII case for the first return is still open The second return will be present on the existing CII case.

    Caution:

    You need to search RRD for an amended return for the same TY.

    Exception:

    If the paper filed amended return is received from the ITIN, then a new case is created for the second return.
    The taxpayer filed an amended return for TY 2023 electronically The taxpayer submits another amended return for TY 2023 on paper and the CII case for the first return is still open The second return will be present on the existing CII case.
    The taxpayer responds to a CP notice The taxpayer submits an amended return for the same TY on paper or electronically Then a new CII case is created for the amended return.

  3. If a CII case has more than one imaged return follow the table.

    If ... And ... Then ...
    The imaged returns are duplicates   Process the case using the earliest complete return.
    The imaged returns are not duplicates They are for the same taxpayer, tax year, and routing criteria isn't present Process each case separately.

    Reminder:

    When inputting multiple adjustments, a posting delay code is required.

    Caution:

    Don't close the CII case until all adjustments have been completed.
    The imaged returns are not duplicates They are for the same taxpayer, tax year, and routing criteria is present Route the entire CII case following normal procedures.

  4. When multiple CII cases are present, determine if the other case(s) are unassigned. See the generic queue list in IRM 3.11.6.3, Controlling Cases on the Correspondence Imaging Inventory (CII) System.

  5. Determine if the CII case return is a superseding, duplicate, or amended return.

  6. Before an adjustment can be input or sent to another function, check the return for the following elements:

    • Taxpayer Identification Number (TIN)

    • Tax period

    • Received date

    • Control base

    • Presidential Election Campaign Fund (PECF) requests

    • TC 150 posted

  7. When instructed to treat a case as classified waste, see IRM 3.11.6.16.22, Classified Waste.

3.11.6.4.1 (05-09-2023)

CII Split Image Request

  1. A split image request is required when two or more unrelated cases have been erroneously scanned as one CII image. There are two types of split requests, simple and complex.

    • A simple split request can be done on cases when two or more cases are in sequential order with all forms and schedules.

    • A complex split request is where two or more cases or images are commingled in one case.

    Note:

    Refer to the 1040-X Job Aid for more information on splitting a CII image.

  2. A simple split request is submitted as follows:

    1. The TE must choose "SPLIT-IMAGE" from the "Suspend" drop-down list to open the "Split Image Details" screen. On the "Split Image Details" screen take the following actions:
      • Click the radio button next to the CIS image icon to start the simple split process.
      • In "Step 1" indicate the last page included with the current case by clicking on the appropriate page number and click the "Add Split" button.

    2. The lead or manager must retrieve the request from their "Approval" inventory and determine if the request is be accepted or denied. If denying the request leave a case message stating the reason for the denial.

      Note:

      Once the approval or denial process has been completed, the case must be sent back to the TE’s "Active" inventory.

    3. The TE must retrieve the case and review the case for any case messages from the lead or manager. If the request was denied, review the reason for the denial and submit another request if needed. If the request was approved, continue processing the case.

  3. A complex split request is submitted as follows:

    1. The TE must enter a case message stating "Complex split request. Pages (XX -XX) belong with the current case. Pages (XX - XX) belong to New Case (A, B, C, etc.)." Then, the TE notifies the lead or manager that (CII case number) requires a complex split.

    2. The lead or manager must search for the case in the TE’s inventory and review the case message. After reviewing the case message, the lead or manager must use the Split Image tool located in the "CII Administration" menu to verify the split information to determine if the request should be approved or denied.
      • If approved, the tool must be used to split the case. Once the case has been split, the TE must be notified.
      • If denied, leave a case message stating the reason for the denial and inform the TE.

    3. The TE must, upon receiving notification, retrieve the case and review the case for any case messages from the lead or manager. If the request was denied, review the reason for the denial and submit another request if needed. If the request was approved, continue processing the case.

3.11.6.4.2 (02-17-2023)

Associating Forms, Schedules, and Other Documents to CII Cases

  1. Occasionally, when working a case, tax examiners will need to send a form, schedule, and other document to associate with the case they’re working. The CII case association process must be completed prior to the case being reassigned, rerouted, or closed.

  2. The tax examiner must prepare the CII Association Header Sheet and input a case note stating what form(s), schedule(s), or other document(s) are being sent for association to the case.

    • TIN - Use the primary TIN

    • Name Control - Use the primary name control

    • MFT - Use "30"

    • Tax Period - Use the tax period of the case

    • Case ID - Use the CII Case ID of the case being worked

    • Employee number- Use your IDRS employee number

  3. Send the case to ICT for association through the exception scanning.

3.11.6.4.3 (01-02-2024)

Tax Period

  1. Amended returns must be for a specific tax period. When the tax period is missing and you can't determine the tax period from return information or attachments, research IDRS for matching tax data.

    Note:

    If the tax period is incorrect on a case, update the case data to the correct tax period per IRM 3.11.6.4.8, Updating Case Data.

  2. If the tax period can be determined, edit the tax period on the front of the return above the Entity section in YYMM or YYYYMM format or mark the appropriate box, if available, even when reassigning, rerouting and suspending case to another function.

  3. If you can't determine the tax period through IDRS research, correspond unless return is being sent to another function. Correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins, and use the tax period of the CII case when sending the letter.

  4. If the taxpayer submitted an amended return for multiple tax periods on a single amended return, correspond. See IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

3.11.6.4.4 (01-02-2024)

Taxpayer Identification Number (TIN)

  1. To process a return, the taxpayer must have a Taxpayer Identification Number (TIN). The IRS uses four different types of TINs when processing Individual Master File (IMF) Taxpayer accounts. The following table contains the type of TINs and their format:

    Taxpayer Identification Number (TIN) Type Format
    Social Security Number (SSN) - If followed by an asterisk (*) it is a temporary or "invalid" number. xxx-xx-xxxx
    Individual Taxpayer Identification Number (ITIN) - This number is assigned by the Austin campus ITIN Operation as a result of an accepted W-7, Application for IRS Individual Taxpayer Identification Number, or W-7SP application. 9xx-NN-xxxx

    Note:

    The fourth and fifth digits of a valid ITIN range are:
    - 50 through 65
    - 70 through 88
    - 90 through 92
    - 94 through 99
    Adoption Taxpayer Identification Number (ATIN) - This number is assigned by the Austin campus as a result of an accepted W-7A application. 9xx-93-xxxx
    (always "93" for 4th and 5th digits)
    Internal Revenue Service Number (IRSN) - This number is assigned by the IRS. 9xx-NN-xxxx

    Note:

    The fourth and fifth digits of an IRSN are the IRS Service Center code. See IRM 3.13.5.23, Internal Revenue Service Number (IRSN) Format.

  2. For ITINs, see IRM 3.11.6.16.14.2, Individual Taxpayer Identification Number (ITIN) Status.

  3. If the Primary TIN (P-TIN) or secondary TIN (S-TIN) is missing, incorrect, or illegible for a taxpayer with the filing status of married filing jointly, research per IRM 3.11.6.12.1, Entity Changes. If found, edit to the appropriate field on the amended return.

    Note:

    When processing a case, update the Case Data to correct P-TIN per IRM 3.11.6.4.8, Updating Case Data.

  4. If you have exhausted all resources and are still unable to determine the P-TIN and/or S-TIN, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  5. Send to AM, if:

    1. The taxpayer makes changes to the primary or secondary taxpayer's TIN.

    2. The P-TIN or S-TIN is invalid.

    3. The primary or secondary taxpayer is changing from an ITIN or IRSN to an SSN.

    4. The primary or secondary taxpayer’s account is set up on the invalid segment of master file (which requires an asterisk after the TIN (000-00-0000*). A pound sign after the TIN (000-00-0000#) is an indication of a newly assigned TIN. Don't treat as an invalid TIN.

      Exception:

      If the filing status is MFS (FS 3), the spouse's TIN may show an asterisk after the TIN. This should not be considered an invalid TIN and can be worked as normal.

    5. A filing status change to Married Filing Jointly (MFJ) and both taxpayers have already filed.

    6. The case involves merged (re-sequenced) account and an update to CC DDBCK or CC DUPED is required.

      Note:

      A merged (resequenced) account will have a transaction code 011, 013, 040 or 041 on CC ENMOD.

    7. Mixed entity cases where more than one taxpayer has attempted to file under the same TIN and:
      • It isn't possible to verify the correct TIN through research, or
      • Research verifies that both individuals have used the TIN in other tax years, or
      • CC INOLES shows that both taxpayers have been listed under this TIN

    8. Scrambled SSN cases where CC INOLES has an entry beside the Scrambled SSN Prompt and Numeric Indicator, except blank, 00, 08, 21, or 22.

    9. For TY 2019 and later, if the taxpayer indicates a religious (e.g., "Amish" , "Mennonite" , or "Form 4029" , Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits) or conscience-based objection to obtaining a taxpayer identification number (TIN).

  6. If the taxpayer is filing MFJ and there's no TC 150 posted for the primary's TIN, research the secondary's TIN for a TC 150. TC 594 may be present. See IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150).

3.11.6.4.4.1 (01-02-2024)
Protecting Americans from Tax Hikes (PATH Act)

  1. The Protecting Americans from Tax Hikes Act (PATH Act) was enacted December 18, 2015. The PATH Act prohibits taxpayers from retroactively claiming certain credits for any tax year in which the taxpayer, spouse or qualifying child doesn't have a valid TIN issued on or before the due date, or extended due date, of the return or, if the taxpayer, spouse, or qualifying child has an inactive TIN.

  2. The PATH Act applies to:

    • Child Tax Credit (CTC)

    • Additional Child Tax Credit (ACTC)

    • Credit for Other Dependents (ODC)

    • American Opportunity Credit (AOTC) - both refundable and non-refundable

    • Earned Income Tax Credit (EITC)

    • CP notices 08, 09 and 27

  3. Credit-specific eligibility requirements apply in addition to the PATH Act criteria. A TIN that is valid to claim a particular credit may not be valid to claim a different credit.

  4. The PATH Act prohibits current year refunds of EITC or ACTC before February 15. All amended returns without a C- freeze that add EITC or ACTC must be held until then.

  5. The TIN validations required by the PATH Act isn’t applied to superseding returns that have already passed TIN validations.

    Exception:

    If there’s a TIN present on the superseding return that wasn’t on the original return, the new TIN requires PATH Act validation.

  6. If processing W-7 returns, see IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7).

  7. Don't remove PATH Act credits previously allowed due to a filing status change to married filing jointly (MFJ) unless initiated by the taxpayer. Apply the PATH Act using the following table:

    Exception:

    If EITC is involved, see IRM 3.11.6.14.4, Earned Income Credit (EIC) - Line 14.

    If ... And ... Then ...
    The spouse has a newly assigned ITIN The XRET is for the current processing year, or the assignment date is more than 90 days after the return due date or due date as extended for a prior year Disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and follow (8) below.
    The spouse has an SSN The SSN was issued after the return due date Disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and follow (8) below.
    The spouse has an SSN The SSN was issued on or before the return due date or due date as extended Process the return.
    The spouse has a newly assigned SSN The SSN was issued after the return due date and EITC is increasing Disallow the additional EITC. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Don't remove existing EITC.
    The spouse has a newly assigned SSN The SSN was issued after the return due date and EITC is decreasing Decrease the EITC.
    The spouse has a newly assigned SSN The SSN was issued on or before the return due date Process the return.

  8. Research is required prior to adding PATH Act credits. To qualify, the correct TIN required for the particular credit(s) claimed must have been assigned on or before the due date, or due date as extended, of the return being processed. Use CC INOLES - TIN ASGNMT to research when the TIN was issued.

    If ... Then ...
    The "TIN ASGNMT" field contains a date on or before the due date of the return

    Note:

    ITINs assigned within 7 days of the return due date are considered timely.

    		 Allow the credit if all other criteria are met.
    The "TIN ASGNMT" field is all zeros Allow the credit if all other criteria are met.
    The "TIN ASGNMT" field contains a date after the due date of the return Disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP) and follow (9) below.

  9. When a PATH Act credit(s) has been disallowed, input a TC 971 AC 113.

    • Use the received date for the transaction date.

    • Enter the total of all PATH Act credit(s) claimed on Form 1040-X that are being disallowed in the "Freeze Release>" field.

3.11.6.4.4.2 (01-02-2024)
TIN requirements for Exemptions and Credits

  1. The tables below provide a quick reference to determine the TIN requirements for exemptions and certain credits. Always research for specific requirements including but not limited to the form, statute, and PATH Act.

    Note:

    For EITC, CTC, ODC, AOTC, and RRC, all TINs must be issued before the due date, or extended due date, of the return.

  2. For Exemptions

    Note:

    The Tax Cuts and Jobs Act of 2017 (TCJA), enacted on Dec. 22, 2017, suspended personal and dependent exemptions for tax years beginning on January 1, 2018, and before Jan. 1, 2026. For tax years 2018-2025, dependents are for credit eligibility.

    Type of TIN Valid SSN Valid ITIN (active) Valid ATIN
    Primary TIN Yes Yes N/A
    Secondary TIN Yes Yes N/A
    Dependent TIN Yes Yes Yes

  3. Earned Income Tax Credit

    Type of TIN Allowed with valid SSN Allowed with valid ITIN (active) Allowed with valid ATIN Allowed with FS 3 (MFS) for TYs 2020 and prior Allowed with FS 3 (MFS) for TYs 2021 and later
    Primary TIN Yes No N/A No No, unless taxpayer files Schedule EIC
    Secondary TIN Yes No N/A No No, unless taxpayer files Schedule EIC
    EITC qualifying child Yes No No No Yes

    Note:

    The SSNs for the primary, secondary (if FS 2), and the EITC qualifying child(ren), must all be valid for EITC to be allowed. An SSN is valid for the EITC unless it was issued after the due date of the return (including extensions), or it was issued solely to apply for or receive a federally funded benefit and does not authorize the individual to work.

  4. Child and Dependent Care Expenses

    Type of TIN Allowed with valid SSN Allowed with valid ITIN (active) Allowed with valid ATIN Allowed with FS 3 (MFS)
    Childcare provider on Form 2441 Yes Yes N/A Yes
    Child’s TIN on Form 2441 Yes Yes Yes Yes

    Note:

    For the provider TIN requirement, see IRM 3.11.6.14.2.2.1, Form 2441, Credit for Child and Dependent Care Expenses.

  5. Other Credits

    Credit Allowed with valid SSN Allowed with valid ITIN (active) Allowed with valid ATIN Allowed with FS 3 (MFS)
    Child Tax Credit / Additional Child Tax Credit (tax years 2018 - 2025) Yes

    • Primary - Yes

    • Secondary - Yes

    • Dependent - No

    • No

    		 Yes
    Lifetime Learning Credit (LLC) Yes Yes Yes No
    American Opportunity Tax Credit (AOTC) Yes Yes Yes No
    Credit for Other Dependents (ODC) Yes Yes Yes Yes
    Recovery Rebate Credit Yes No, but the RRC is not disallowed to a taxpayer with an ITIN if the spouse or qualifying dependent on the return has a TIN (SSN or ATIN) that is valid for the RRC. The allowable RRC amount is based on the number of taxpayers and dependents on the return who qualify and have a valid TIN, except that if one spouse is a member of the military and the spouses file jointly, then only one spouse needs to have a valid SSN for the couple to claim RRC for both spouses. Yes

    Note:

    The ATIN could be issued at any time.

    		 Yes

3.11.6.4.5 (01-02-2024)

Received Date

  1. Every return should be stamped with a received date stamp. An Official Received Date Stamp must consist of no less than:

    • The word "Received"

    • Month (alpha or numeric)

    • Day - (for example, can be "1" or "01" )

    • Year - four digits

    • "Area Office (AO)" , "Lockbox (LB)" , Campus, "Field Office" , "Taxpayer Assistance (TAC)" plus the location city, or functional area within one of these sites (e.g., Compliance Service Collections Operation (CSCO), Exam, Information and Communication Technology (ICT), Collection Information System (CIS), Accounts Management (AM), etc.)

      Note:

      Not all IRS offices are designated places for filing, and not all IRS employees are authorized to accept a tax return for processing. If a return contains a received date stamp from other than a Taxpayer Assistance Center (TAC), Lockbox, or IRS campus (Compliance, Accounts Management (AM), or Submission Processing (SP)), circle out the invalid received date and edit the correct received date according to instructions in paragraph 4 below. For example, returns received by Taxpayer Advocate Service (TAS) or the IRS Office of Chief Counsel are not properly filed and a received date by that office isn't the official "IRS Received Date."

  2. On MEFP cases, the RRD field labeled "Received Date" is the received date of the return. The RRD field labeled "IRS Received Date" is an electronic postmark used to determine return timeliness.

    Note:

    See the 1040-X Job Aid for additional information.

  3. If the Received Date stamp on a MEFS case is missing from the front page, or is illegible, but is found elsewhere in the return packet, add the received date to the front of the return in MMDDYY or MMDDYYYY format in the blank space above line 1.

    Caution:

    When editing the received date, check the case data and update if needed.

  4. Use the following table for CII cases processed by SP 1040-X:

    If ... Then ...
    Editing a received date is required on a case imaged into CII. Use the CII “Annotation Toolbar” to add the received date.
    A case has multiple identical images with multiple received dates. Use the received date from the earliest complete return.

  5. Honor received dates that are handwritten in the center portion of the amended return edited in:

    • Green ink on current year returns received with payments as the return received date.

    • Red ink located in the center portion of the amended return.

    Caution:

    When working a scanned CII case, the image is in black and white. Honor the received date handwritten in the center portion of the amended return.

  6. If the Received Date stamp isn't found or is obviously incorrect, edit the received date based on the order of precedence below in the same format and location as stated in (3) above.

    1. Latest postmark or designated private delivery service mark on the envelope

    2. IRS Service Center Automated Mail Processing System (SCAMPS) date

    3. Signature Date (only if the return was signed in the current year)

    4. Current date

  7. When there are multiple received dates stamped, or edited, on the return and you're adjusting or sending an amended return to another area, use the earliest received date. When processing replies to correspondence, see IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C), IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C), or IRM 3.11.6.7.9, Statute Review Screening.

  8. Input the received date of the return you're processing as the received date on IDRS. If the received date of the return doesn't match the established control base, see IRM 3.11.6.3, Controlling Cases on the Correspondence Imaging Inventory (CII) System.

    Exception:

    For Statute returns, see IRM 3.11.6.7.9, Statute Review Screening.

  9. OVERRIDE CODE - An Override Code is required when the IRS Received Date is over one year old and on cases when the Refund Statute Expiration Date (RSED) has expired.

    1. R - Allows IRS Received Date to be older than a year in the past.

    2. S - Allows current date and the Refund Statute Control Date (RFSCD) to be later than the RSED. Refer to IRM 3.11.6.7.9, Statute Review Screening.

3.11.6.4.5.1 (08-11-2021)
Determining Timeliness

  1. Always use the received date when determining timeliness of the claim. If the received date is missing, see IRM 3.11.6.4.5, Received Date. When the postmark is missing or illegible consider any return received within ≡ ≡ ≡ ≡ ≡ ≡ ≡calendar days of the due date of the return timely.

    Reminder:

    On MEFP cases, the RRD field labeled "Received Date" is the received date of the return. The RRD field labeled "IRS Received Date" is an electronic postmark used to determine return timeliness. See the 1040-X Job Aid for additional information.

  2. April 16 is Emancipation Day in Washington D.C., a legal holiday. This may affect when a return is considered to be timely filed for taxpayers throughout the United States. See also IRM 25.6.1.6.18, List of Legal Holidays.

    1. When April 15 falls on a Sunday, the following Monday is generally the day on which returns are timely filed; however, in Washington D.C., April 16 is Emancipation Day, a legal holiday. All taxpayers have until Tuesday April 17 to file a timely return.

    2. When April 16 falls on a Saturday, Friday April 15 is considered the holiday. All taxpayers have until Monday April 18 to file a timely return due to the Emancipation Day holiday.

    3. When April 16 falls on a Sunday, Monday April 17 is the date of the Emancipation Day holiday. All taxpayers have until Tuesday April 18 to file a timely tax return due to the Emancipation Day holiday.

  3. Use the following table to determine if the claim is considered timely filed:

    If April 15 falls on ... Then the postmark must be ...
    Friday April 18 or earlier.
    Saturday April 18 or earlier.
    Sunday April 17 or earlier.

    Caution:

    Disaster declarations may impact return due dates.

  4. According to Notice 2020-23, the due date for TY 2019 tax returns was postponed to July 15, 2020.

  5. According to Notice 2021-21, the due date for TY 2020 tax returns was postponed to May 17, 2021.

  6. These timeliness instructions affect the processing of:

    • Statute returns, see IRM 3.11.6.16.1, Processing Statute Cases

    • Superseding returns, see IRM 3.11.6.4.5.2, Superseding Returns

    • Returns involving PATH Act credits, see IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act)

3.11.6.4.5.2 (01-02-2024)
Superseding Returns

  1. The due date of a calendar year individual income tax return is April 15.

    Note:

    A fiscal year individual income tax return is due the fifteenth day of the fourth month following the close of the fiscal year.

  2. The due date may be changed due to Presidential disaster declarations.

  3. An amended return:

    • Filed on or before the due date or the extended due date is a superseding return.

    • Postmarked on or before the due date or extended due date, is processed as a superseding return.

  4. Send to AM any superseding return if:

    • The adjustment would result in an unpaid net balance due increase on the module.

    • The refund claim must be disallowed, partially disallowed, or not considered, leaving the account with a balance due instead of a refund.

3.11.6.4.5.3 (09-25-2020)
Amended Claims Date

  1. The Amended Claims Date is a REQ54 field that is used by Master File to apply the 45-day interest free period.

    1. Use the IRS Received Date as the Amended Claims Date.

    2. For suspended correspondence, the Amended Claims Date is the received date of the taxpayer’s reply that allows you to process the return.

    3. An Amended Claims Date is required on every adjustment unless specifically noted otherwise.

  2. Don't use an Amended Claims Date when processing CP 08, CP 09, CP 27 or Math Error Corrections (only when the math error was set on the original return).

  3. When making a received date determination, see IRM 3.11.6.4.5, Received Date.

3.11.6.4.6 (01-02-2024)

Signature

  1. The claim or amended return requesting an adjustment must be signed by (1) the taxpayer or (2) a person holding a valid Power of Attorney (POA) who has been authorized by the taxpayer to sign the taxpayer’s return by checking box on Form 2848, line 5a. The signature(s) is required anywhere below the jurat (perjury statement), but not in the paid preparer section on amended returns. If an original signature isn't present on a CII case, correspond per IRM 3.11.6.10, Correspondence Procedures, IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C), IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C), and IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 3.11.6.16.15 (7), Computer Paragraph (CP) Notices, for CP 08, CP 09, and CP 27 signature requirements.

  3. All accepted e-filed returns have a valid signature.

    Caution:

    Rejected e-filed returns may also be present on RRD. Only accepted returns are sent to SP 1040-X for processing.

  4. If the jurat has been altered, treat it as a Frivolous claim.

  5. If the jurat is missing, treat it as an unsigned return and correspond for the missing signature(s) using Letter 324C to obtain the signature. Process the net balance due per IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C).

    Exception:

    If page 2 is missing on the new Form 1040-X, don't treat as missing jurat. Follow procedures for missing signature.

  6. Don't correspond for a missing or incorrect signature(s) if:

    1. A "Dummy" return was prepared by the IRS.

    2. A fiduciary representative or parent for other than a minor child signs for a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    3. Form 2848, Power of Attorney and Declaration of Representative, with specific authorization on line 5a to sign a return, and including completed Part II, is attached to the return. See IRM 3.11.6.4.6.1, Centralized Authorization File (CAF) - Form 2848, Power of Attorney (POA) and Form 8821 (TIA) and General /Durable POAs.

    4. The return is a duplicate.

    5. Taxpayer files MFS (FS 3) and spouse didn't sign the return.

    6. The return is a substantiated math error response.

    7. The claim meets routing criteria unless otherwise specified.

      Note:

      For decedent returns, see IRM 3.11.6.16.10, Decedent Returns.

  7. If Form 1040-X isn't signed, however a Form 1040 matching the Correct Amount column of Form 1040-X is attached and signed, accept the signature and continue processing the return. Edit a notation onto the signature line, if present, on Form 1040-X indicating that the Form 1040 is signed. Otherwise edit the notation on the front bottom portion of Form 1040-X.

  8. Correspond for the signature of two witnesses when the taxpayer signs with a mark such as an "X" . See IRM 3.11.6.10, Correspondence Procedures.

  9. Joint returns require the signature of both taxpayers unless one of the taxpayers falls into one of the categories below:

    1. One spouse is overseas, and the signing spouse is authorized by a power of attorney (e.g., Form 2848) or similar signed document which clearly defines the scope of authorization granted to the POA.

    2. One spouse is in a combat zone/qualified hazardous duty area and the signing spouse attaches a statement.

    3. One spouse is incapacitated. The signing spouse should attach a dated statement explaining the reason the incapacitated taxpayer can't sign. The signing spouse signs on the signature line as well as the spouse's signature line.

      Caution:

      Incapacitated means the taxpayer is physically unable to sign the return. In the case of a mentally incompetent taxpayer a court appointed representative who can act for the taxpayer must sign the tax return.

    4. If MFJ return with only one signature and the taxpayer is divorced or separated, send the case to AM.

  10. If the taxpayer is a minor (there must be a clear indication the child is a minor) the return must be signed by one of the following:

    • The minor child

    • A parent

    • A guardian or other fiduciary representative ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • A guardian or other fiduciary representative with documentary evidence is attached

      Note:

      Fiduciary representatives include:
      • Administrator (ADM)
      • Conservator (CONS)
      • Custodian (CUST)
      • Executor (EXEC)
      • Guardian (GDN)
      • Personal Representative (PER REP)
      • Trustee (TTEE)

  11. If taxpayer is a minor and the return is not signed, correspond for a missing signature. See IRM 3.11.6.10, Correspondence Procedures.

3.11.6.4.6.1 (01-02-2024)
Centralized Authorization File (CAF) - Form 2848, Power of Attorney (POA) and Form 8821 (TIA) and General /Durable POAs

  1. The CAF maintains a database of authorized representatives who are permitted to sign for the taxpayer. The CAF unit assigns unique identifiers (CAF numbers) to the representative(s) based on Form 2848, Power of Attorney and Declaration of Representative (POA), and acceptable General/Durable POAs submitted.

  2. Taxpayers occasionally submit a tax return that has been signed by their enrolled agent or some other representative. The taxpayer must attach a Form 2848 or other acceptable power of attorney that specifically authorizes the representative to sign a return on the taxpayer’s behalf. See Form 1040 (and 1040-SR) Instructions. Or a Form 2848 authorizing the representative to sign a return may be on file with the CAF unit.

    Note:

    For married filing joint (FS 2) accounts, each taxpayer must execute their own power of attorney or tax information authorization on a separate Form 2848 even if the same representative/appointee is provided.

  3. Taxpayers may also submit a Form 8821, Tax Information Authorization and Declaration of Representative (TIA), as documentary evidence for signing the tax return; however, Form 8821 doesn't authorize the signing of the return. If Form 8821 is present, detach and follow the routing instructions in paragraph 8.

  4. Correspond for a Form 2848, per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins, if the taxpayer submits a Form 8821 and the return is signed by someone other than the taxpayer.

  5. When the taxpayer submits a General/Durable POA, leave the document attached to the return and continue processing.

  6. If Form 2848 is attached specifically authorizing a representative to sign a return, follow the table below when processing a CII case.

    If ... And ... Then ...
    The signature on the return matches a representative listed on CC CFINK or the Form 2848 is already on file, including specific authorization to sign a return. SIGN: field on CC CFINK is marked YES Continue processing the return.
    The signature on the return doesn't match a representative listed on CFINK, or no record is found,
    or SIGN: field on CC CFINK is marked "NO"    		 Form 2848 is attached specifically authorizing the representative to sign a return Print the case to PDF and follow the steps below.

    1. Go to the page(s) with Form 2848 and print just the Form 2848 to a PDF.

    2. E-fax the Form 2848 PDF to the CAF unit per paragraph 9 below.

    3. Leave a case note stating, "Form 2848 sent to CAF" .

    4. Continue processing the case.
    The signature on the return doesn't match a representative listed on CFINK, or no record is found,
    or SIGN: field on CC CFINK is marked NO    		 Form 2848 isn't attached Correspond IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.
    Taxpayer signs the return and Form 2848 is attached The representative(s) isn't listed or there's a change to the type of "Authorization" on CC CFINK

    1. Print the case to PDF and follow the steps below.

      1. Go to the page(s) with Form 2848 and print just the Form 2848 to a PDF.

      2. E-fax the Form 2848 PDF to the CAF unit per paragraph 9 below.

      3. Leave a case note stating, "Form 2848 sent to CAF" .

      4. Continue processing the case.

  7. If line 4 of Form 2848 or Form 8821 is checked, continue processing the return, don't detach or send to the CAF unit.

  8. Use the following addresses when routing a Form 2848 or Form 8821 to a CAF Unit:

    SP 1040-X Site Fax Numbers Address
    Austin, Kansas City, and Memphis 855-214-7519 Internal Revenue Service
    5333 Getwell Rd.
    Mail Stop 8423
    Memphis, TN 38118
    Ogden 855-214-7522 Internal Revenue Service
    1973 N Rulon White Blvd
    Mail Stop 6737
    Ogden UT 84201

  9. Don't detach any "Worksheets" provided by the military to personnel assigned to a Combat Zone. They aren’t considered a POA in lieu of Form 2848. See IRM 3.11.6.16.4, Combat Zone.

  10. If correspondence attached to the return is unrelated to the amended return and must sent to another functional area, attach a PDF copy of the POA or TIA to the correspondence. Indicate that the form has been detached and sent to the CAF unit.

3.11.6.4.7 (01-02-2024)

Processing Presidential Election Campaign Fund (PECF) Requests

  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.
      • For calendar year 2023, this period ends on December 30, 2025.
      • For calendar year 2022, this period ends on December 30, 2024.
      • For calendar year 2021, this period ends on December 30, 2023.
      • For calendar year 2020, this period ends on December 30, 2022.

  2. If the PECF request isn't received timely and the only change is to the PECF, then "no consider" the claim and use the fill-in: We were unable to honor your Presidential Election Campaign Fund (PECF) request. On an amended return, PECF requests must be filed within 20 and one-half months after the original due date for filing the return.

  3. The taxpayer may request that $3 go to the Presidential Election Campaign Fund (PECF) by checking one or both boxes on page 1 of Form 1040-X, Amended U.S. Individual Income Tax Return, or an amended Form 1040, U.S. Individual Income Tax Return, and amended Form 1040-SR, U.S. Tax Return for Seniors.

  4. Research the “POLITICAL CHECKOFF” field on CC IMFOLR to determine if a change to the election is required. The field is coded as follows:

    Code Election Type
    0 None elected.
    1 One elected on original return.
    2 Two elected on original return.
    3 One elected on amended return, none on original return.
    4 Two elected on amended return, none on original return.
    5 Two elected on amended return, one original return.

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

  6. Don't process a PECF request on any return that is being routed.

  7. If the return meets correspondence criteria and an adjustment isn’t input, don't process the PECF request. Correspond as required.

  8. Prepare a "dummy" Form 1040-X when the taxpayer indicates an addition to the PECF and send the case to Batching. Prepare the “dummy” as follows:

    1. Edit "Dummy PECF" in the top margin of a blank Form 1040-X.

    2. The tax period

    3. The primary name control

    4. The primary SSN and secondary SSN.

    5. Check the appropriate filing stratus check box

    6. IMF Condition Code (CCC) "5" to the right of filing status just above Column C if one PECF box is checked. Edit CCC "6" if two boxes are checked.

    7. The received date in MMDDYY format in the center portion.

    8. Check the appropriate PECF box(es), in Part II on the second page of the Form 1040-X.

    9. Edit "CII case - Don't correspond for signature" in the signature area.

    10. Your employee number/stamp in the upper left margin.

    11. Input Case Note "PECF Prep" .

3.11.6.4.8 (01-02-2024)

Updating Case Data

  1. The case data for cases received in Submission Processing (SP) 1040-X have the following elements:

    Note:

    An E-1 error can occur when there is an issue the case data. refer to IRM 3.11.6.4.8.1, CII Cases with an E-1 Error.

    • TIN (Taxpayer Identification Number)

    • MFT (Master File Tax)

    • TXPD (Tax Period)

    • NC (Name Control)

    • IRS Rcvd Dt (IRS Received Date)

    • Work Type

    • Doc Type (Document Type)

    • Category

    • Program

    • Function

  2. Use the following table to ensure the case data is correct and update as appropriate.

    If the CII case is a ... Then use ...
    1040-X or amended 1040

    1. The TIN of the Primary Taxpayer

    2. MFT "30"

    3. The TXPD of the return

    4. The NC of the Primary Taxpayer

    5. The IRS Rcvd Dt of the return

    6. Work Type "IMF"

    7. Doc Type "SP 1040X"

    8. Category "MEFP" for MeF cases, and "MEFS" for scanned cases

    9. Program "44490" for MEFP cases, and "44450" for MEFS cases

    10. Function "ADJ-710"
    W-7 1040-X or amended 1040

    Note:

    A W-7 return can be identified by a "W-7" stamp on the return image. Generally, the stamp is located in the lower left corner of the return.

    1. The TIN of the Primary Taxpayer

    2. MFT "30"

    3. The TXPD of the return

    4. The NC of the Primary Taxpayer

    5. The IRS Rcvd Dt of the return

    6. Work Type "IMF"

    7. Doc Type "SP 1040X W7"

    8. Category "MEFS"

    9. Program "44452"

    10. Function "ADJ-710"
    Computer Paragraph (CP) 27 Notice

    1. The TIN of the Primary Taxpayer

    2. MFT "30"

    3. The TXPD of the CP Notice

    4. The NC of the Primary Taxpayer

    5. The IRS Rcvd Dt of the return

    6. Work Type "IMF"

    7. Doc Type "SP 1040X CP 27"

    8. Category "MEFS"

    9. Program "40000"

    10. Function "ADJ-710"
    CP 09

    1. The TIN of the Primary Taxpayer

    2. MFT "30"

    3. The TXPD of the CP Notice

    4. The NC of the Primary Taxpayer

    5. The IRS Rcvd Dt of the return.

    6. Work Type "IMF"

    7. Doc Type "SP 1040X CP 09"

    8. Category "MEFS"

    9. Program "40002" or "40412" if the case is received through the DUT

    10. Function "ADJ-710"
    CP 08

    1. The TIN of the Primary Taxpayer

    2. MFT "30"

    3. The TXPD of the CP Notice

    4. The NC of the Primary Taxpayer

    5. The IRS Rcvd Dt of the return

    6. Work Type "IMF"

    7. Doc Type "SP 1040X CP 08"

    8. Category "MEFS"

    9. Program "40003" or "40413" if the case is received through the DUT

    10. Function "ADJ-710"

  3. The data displayed in the Case Data section must be updated by clicking the "Update Data" button, when reassigning a case. See IRM 3.11.6.9, 1040-X Reassignment and Reroute Guides.

  4. The Statute Search field must be changed to Yes, once a CII case has been returned from the statute unit indicating "No Statute Issue(s)."

3.11.6.4.8.1 (01-02-2024)
CII Cases with an E-1 Error

  1. An E-1 error occurs when:

    1. The name control (NC) used to create the case doesn’t match IDRS.

    2. The taxpayer identification number (TIN) used to create the case is incorrect.

    3. The case control was closed on IDRS, but not closed in CII.

  2. The issue causing the E-1 error must be resolved before taking action on the case. If you’re unable to resolve the E-1 error take the following action:

    1. Input a case messages stating "E-1 error."

    2. Suspend the case to your lead or manager to resolve the error. Once the error has been resolved, the case will be returned to you for processing.

3.11.6.5 (01-02-2024)

Screening Criteria for Processable Return

  1. Screen the amended return and research IDRS for any Transaction Code(s) or Freeze Code(s) that require special attention to determine if:

    1. Routing criteria is present

    2. The claim is complete

    3. The claim is allowable

    4. The claim is processable

  2. Before inputting any changes to a Form 1040-X, check for any issue(s), freeze codes, transaction codes, math error condition, tax period, No TC 150, etc. that require routing to another area. See IRM 3.11.6.8, 1040-X Routing Guide.

  3. If the return isn't sent to another area, check for the following items that may require correspondence or additional action if missing or invalid:

    • Primary TIN

    • Tax period

    • Signature

    • Received date

    • Presidential Election Campaign Fund (PECF) boxes checked requiring preparation of a "dummy return"

    • Forms, schedules, or other required information

  4. Unless otherwise specified, input the adjustment if the claim is processable, doesn't meet routing criteria, or require correspondence.

  5. If working a MEFS case and the case requires Form 1040-X be converted to a Form 1040 or Form 6114, follow the association process in IRM 3.11.6.4.2, Association, Forms, Schedules, and Other Documents to CII Cases, prior to routing.

3.11.6.5.1 (01-02-2024)

Transaction Code (TC) 150 Research (No TC 150)

  1. All amended claims require a posted TC 150, unless specifically instructed. Specific instructions to route a case without a posted TC 150 take priority. Research IDRS using the primary taxpayer’s TIN to locate a TC 150 for the tax period indicated on the return. Researching for a TC 150 includes researching both the valid and invalid sides of Master File. To research the invalid side, input an asterisk after the TIN.

    Note:

    It might be necessary to research different tax years if the information on the return or the data on IDRS support a different tax period.

    If ... And ... Then ...
    Researching the primary taxpayer’s TIN A TC 150 wasn’t found under the primary taxpayer’s TIN Research CC TRDBV for tax data. If the tax data is present or is pending (must be present on primary taxpayer for MFS (FS 3)) suspend the case for 60 days from the received date and monitor for the TC 150 to post. Don’t consider REJECTED, DELETED OR VOIDED on CC TRDBV as tax data. Follow paragraph 9 below for instructions on suspending the return.

    Note:

    A Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, won’t post as a TC 150, and should be considered tax data.

    Exception:

    If you find master file information on CC TRDBV, but there's not information posted on MFT 30 research CC IMFOLI to see if information has posted to MFT 32 and if present, treat the case as identity theft. See IRM 3.11.6.7.8, Identity Theft (IDT) Screening.
    Researching the primary taxpayer’s TIN A TC 150 wasn’t found under the primary taxpayer’s TIN Look though the entire return for a different TIN for the primary taxpayer, including taxpayer’s explanation. If a different TIN is found, research for a TC 150 using the discovered TIN.
    A TC 594 is present The case is a married filing joint return Research for a TC 150 using the cross-reference TIN.
    A TC 594 is present The case isn’t a married filing joint return Research for a TC 150 using the cross-reference TIN.
    The case is a married filing joint return A TC 150 hasn’t been found Research for a TC 150 using the secondary taxpayer’s TIN.
    There are dependents present on the return A TC 150 hasn’t been found Research the dependent(s) TIN using CC DDBKD or CC DUPED for different primary TIN.
    There are dependents present on the return A different TIN wasn’t found for the primary taxpayer and the case is a married filing joint return Research the dependent(s) TIN using CC DDBKD or CC DUPED for different secondary TIN.
    A TIN for the primary taxpayer, or secondary taxpayer if applicable, hasn’t been found A TC 150 hasn’t been found Use IAT Name Search Tool to locate a different TIN. It may be necessary to use multiple name combinations in order to locate a different TIN. If research shows the TC 150 for the primary or secondary taxpayer was filed under a different TIN:
    - Update the CII case data to the reflect the taxpayer with the TC 150 present.
    - Input a TC 971 AC 120.
    - Send the case to AM.

    Exception:

    When the secondary taxpayer is changing from FS 2, don’t update the TIN.
    A different TIN hasn’t been located A TC 150 isn't present Research ERS inventory. See paragraph 4 below.

  2. If a TC 150 is present, follow the table.

    If ... Then ...
    The posted date is all zeros or blank and the return was received before cycle 21 Suspend the case using the "No TC 150 Posting Date" activity in the suspense menu.
    The posted date is all zeros or blank and the return was received in cycle 21 or later Suspend the case using the "No TC 150 Posting Date Received in Cycle 21 or Later" activity in the suspense menu.
    The TC 150 is showing as an unpostable (Unnn 150) See IRM 3.11.6.7.4, Taxpayer Protection Program (TPP) Screening, to determine if the case must be sent to AM. If it doesn’t, suspend the case using the "Unnn TC 150" activity in the suspense menu.
    The TC 150 is showing as a corrected unpostable (CU 150) Suspend the case using the "CU TC 150" activity in the suspense menu.
    The TC 150 is showing as a pending transaction (PN 150) Suspend the case using the "PN TC 150" activity in the suspense menu.
    The TC 150 is showing as rejected (RJ 150) See paragraph 4 below for ERS research. If the case isn’t in ERS, send to AM.
    None of the above apply Continue processing.

    Note:

    If the TC 150 hasn’t posted after the suspense period, send to AM

  3. If a TC 150 isn’t present, follow the table.

    If ... Then ...
    A TC 971 AC 124 is present See IRM 3.11.6.7.4, Taxpayer Protection Program (TPP) Screening.
    Form 4684 is present or the taxpayer indicates the case is a disaster claim See IRM 3.11.6.16.2, Processing a Disaster Claim.
    A TC 971 AC 506, 522, or 524 is present on CC ENMOD See IRM 3.11.6.7.8, Identity Theft (IDT) Screening.

    • A TC 971 AC 111 is present on CC IMFOLT or CC TXMODA

    • CC IMFOLI indicates the return is on MFT 32

    • Form 14039 is attached or mentioned or the taxpayer indicates identity theft

    		 See IRM 3.11.6.7.8, Identity Theft (IDT) Screening.
    The case is for a Statute year See IRM 3.11.6.7.9, Statute Review Screening.

  4. Use the following table to research ERS inventory.

    1. If processing a ... Then ...
      MEFP case Take the following action:

      1. Research RRD to see if the original return was e-filed. If the original return is present on RRD and the "Processing Status" field is "ERS SUSPENDED" or similar, send the case to your local ERS per IRM 3.11.6.9.1, 1040-X MEFP Reassignment and Reroute Guide

      2. If the original return was paper filed, research ERS inventory using CC ERINV and CC ERINV@. If in ERS, send the case to your local ERS per IRM 3.11.6.9.1, 1040-X MEFP Reassignment and Reroute Guide
      MEFS case Take the following action:

      1. Research RRD to see if the original return was e-filed. If the original return is present on RRD and the "Processing Status" field is "ERS SUSPENDED" or similar, send the case to your local ERS per IRM 3.11.6.9.2, 1040-X MEFS Reassignment and Reroute Guide

      2. If the original return was paper filed, research ERS inventory using CC ERINV and CC ERINV@. If in ERS, send the case to your local ERS per IRM 3.11.6.9.2, 1040-X MEFS Reassignment and Reroute Guide

    Note:

    Refer to the 1040-X Job Aid for IMF File Location Codes for use with CC ERINV@

    .

  5. If the ERS Status is "100" or "900," suspend for 5 working days. If after the suspense period a TC 150 is still not on the account, send the case to ERS.

  6. Use the following stop numbers when sending a case to ERS per paragraph 4 above. Prior to sending to ERS, change the case control activity to "SNT2ERS."

    Reminder:

    The only suspend ERS cases that are in ERS Status "100" or "900." All other ERS Statuses must be sent to ERS without delay.

    If ... Then ...
    The original return was e-filed

    • Austin – Mail Stop 6122 AUSC

    • Kansas City – Mail Stop 6120 KCSC

    • Ogden – Mail Stop 6120 OSC

    • Memphis – Mail Stop 6122 AUSC
    The original return was paper filed

    • Austin – Mail Stop 6122 AUSC

    • Kansas City – Mail Stop 6120 KCSC

    • Ogden – Mail Stop 6120 OSC

    • Memphis – Mail Stop 6122 AUSC

  7. If no TC 150 is found after all research has been exhausted:

    1. If no Form 1040 is attached, see IRM 3.11.6.5.4, Form 1040-X without Form 1040 Attached (No TC 150).

    2. If Form 1040 is attached, see IRM 3.11.6.5.2, Form 1040 Attached to Form 1040-X.

    3. If no Form 1040-X is attached, see IRM 3.11.6.5.3, Amended Form 1040 without Form 1040-X Attached.

    4. For a Statute year return see, IRM 3.11.6.7.9, Statute Review Screening.

    Note:

    When routing a no TC 150 case to Batching and there's an E- freeze on the account, input a TC 971 AC 002 to indicate the amended return is being reprocessed as the original (to post as TC 150). The TC 971 AC 002 releases the E– freeze. When inputting the TC 971 AC 002 take the following action:
    • In the "TRANS-DT" field, input the TC 976/977 date associated with the case you’re processing as the transaction date.
    • In the "XREF-TIN" field, input the TIN of the primary taxpayer.
    Note: If the cross-reference TIN is the same as the account TIN, enter "R" to automatically populate the field.
    • In the "XREF-TX-PRD" field, input the correct tax period.
    Note: If the cross-reference tax period is the same as account tax period, enter "R" to automatically populate the field.

3.11.6.5.2 (01-02-2024)

Form 1040 Attached to Form 1040-X

  1. After researching for a TC 150 per IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150), determine if the attached Form 1040 and Form 1040-X is for the same or different tax period.

  2. If the Form 1040 is for a different tax period than the Form 1040-X and:

    1. Form 1040 is being used as "support" for a carryback loss, keep the two returns together and treat as a carryback claim.

    2. No TC 150 has posted for the tax period of Form 1040, detach Form 1040. Continue processing Form 1040-X.

  3. When processing a case and no TC 150 has posted for the same tax period, follow the table below.

    Reminder:

    When routing a no TC 150 case to Batching and there's an E- freeze on the account, input a TC 971 AC 002 to indicate the amended return is being reprocessed as the original (to post as TC 150). The TC 971 AC 002 releases the E– freeze. When inputting the TC 971 AC 002 take the following action:
    • In the "TRANS-DT" field, input the TC 976/977 date associated with the case you’re processing as the transaction date.
    • In the "XREF-TIN" field, input the TIN of the primary taxpayer.
    Note: If the cross-reference TIN is the same as the account TIN, enter "R" to automatically populate the field.
    • In the "XREF-TX-PRD" field, input the correct tax period.
    Note: If the cross-reference tax period is the same as account tax period, enter "R" to automatically populate the field.

    If ... And ... Then ...
    MEFP  

    1. Print the entire amended return from RRD to PDF

    2. Edit the PDF to circle any indication that the return is amended such as, "e-file GRAPHIC print - DO NOT PROCESS."

    3. "X" Form 1040-X

    4. Edit the PDF to add the received date

    5. Edit the PDF the working/action trail information

    6. Line through the direct deposit fields

    7. Edit "MeF Return - Don't correspond for signature" in the signature area

    8. Send the document to Batching
    MEFS Form 1040 matches the Correct Amount, Column C, of Form 1040-X Take the following action:

    1. Use the CII Annotation tool to circle any indication that the return is amended such as, "e-file GRAPHIC print - DO NOT PROCESS."

    2. "X" Form 1040-X

    3. Annotate the received date if needed

    4. Annotate the working and action trail information

    5. Line through the direct deposit fields

    6. If the case is signed, annotate "CIS Image- Don't correspond for signature" in the signature area

    7. Send the document to Batching
    MEFS Form 1040 doesn't match the Correct Amount, Column C, of Form 1040-X
    Note:Form 1040 may be notated As originally filed    		 Take the following action:

    1. Convert taxpayer's Correct Amount figures using a Form 6114 or current year Form 1040, as appropriate

    2. Use the CII Annotation tool to circle any indication that the return is amended such as, "e-file GRAPHIC print - DO NOT PROCESS"

    3. "X" Form 1040-X and the Form 1040(s) that doesn't match.
      Exception: When using Form 6114, don’t "X" the Entity section

    4. Annotate the received date

    5. Annotate the working and action trail information

    6. Line through the direct deposit fields

    7. If the case is signed, annotate "CIS Image- Don't correspond for signature" in the signature area

    8. Send the document to Batching
    MEFS Two Form 1040s are attached to a Form 1040-X

    • One may be notated "As originally filed" and doesn't match the correct amount column

    • The second may be notated "As amended" and matches the correct amount column

    		 Take the following action:

    1. Use the CII Annotation tool to circle any indication that the return is amended such as, "e-file GRAPHIC print - DO NOT PROCESS"

    2. "X" Form 1040-X and the Form 1040s notated "As originally filed"

    3. Annotate the received date

    4. Annotate the working and action trail information

    5. Line through the direct deposit fields

    6. If the case is signed, annotate "CIS Image- Don't correspond for signature" in the signature area

    7. Send the document to Batching

3.11.6.5.3 (01-02-2024)

Amended Form 1040 without Form 1040-X Attached

  1. Research for a TC 150 per IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150). If no TC 150 has posted, take the following action:

    1. Use the CII Annotation tool to circle any indication that the Form 1040 is amended such as, "e-file GRAPHIC print - DO NOT PROCESS" .

    2. Edit your TE number.

    3. Annotate the received date if needed.

    4. Edit "No TC 150" and the current date in the upper left margin.

    5. Line through the direct deposit fields.

    6. If the case is signed, annotate "CIS Image- Don't correspond for signature" in the signature area.

    7. Send the document to Batching.

      Reminder:

      When routing a no TC 150 case to Batching and there's an E- freeze on the account, input a TC 971 AC 002 to indicate the amended return is being reprocessed as the original (to post as TC 150). The TC 971 AC 002 releases the E– freeze. When inputting the TC 971 AC 002 take the following action:
      1) In the "TRANS-DT" field, input the TC 976 or 977 date associated with the case you’re processing as the transaction date.
      2) In the "XREF-TIN" field, input the TIN of the primary taxpayer.
      Note: If the cross-reference TIN is the same as the account TIN, enter "R" to automatically populate the field.
      3) In the "XREF-TX-PRD" field, input the correct tax period.
      Note: If the cross-reference tax period is the same as account tax period, enter "R" to automatically populate the field.

    Note:

    When it appears that Code & Edit has corresponded for a signature (i.e., Form 3531 attached or notated in the working trail) and the return is still unsigned follow normal procedures to send the case to Entity.

  2. If an undeliverable return is received, see IRM 3.11.6.10.13, Undelivered Correspondence.

3.11.6.5.4 (01-02-2024)

Form 1040-X without Form 1040 Attached (No TC 150)

  1. After researching for a TC 150 per IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150), if no return has been filed and there’s no specific instruction to route a case without a TC 150 present, suspend the case for 60 days from the IRS received date. Use the appropriate suspense activity code per IRM 3.11.6.2.1.1, 1040-X Suspense Activity Codes.

    If ... Then ...
    The taxpayer previously had an ITIN or IRSN and is switching to a valid SSN Suspend the case using the SSN for 60 days from the IRS received date. Use the appropriate suspense activity code per IRM 3.11.6.2.1.1, 1040-X Suspense Activity Codes.
    If there’s no specific instruction to route a case without a TC 150 present Suspend the case for 60 days from the IRS received date. Use the appropriate suspense activity code per IRM 3.11.6.2.1.1, 1040-X Suspense Activity Codes.

  2. After the 60-day suspense period has ended and there's still no posted or pending TC 150 follow the table below.

    If ... Then ...
    There are payments on the account indicating a balance due, or a tax increase, or credit decrease on the amended return Route the return to AM.
    There are no payments on the account, or no tax increases, or credit decreases on the amended return Don't input a TC 290 for .00. Send Letter 178C with the following fill-in: We’ve no record of receiving your original return, therefore we can't process your Form 1040-X, Amended U.S. Individual Income Tax Return. Please complete and submit a new Form 1040, U.S. Individual Income Tax Return, being sure to include your amended changes and your original signature(s). Please don't attach a Form 1040-X to your new Form 1040.

3.11.6.6 (02-17-2023)

Master File Verification and Math Verification Screening

  1. Master file verification is required on all amended returns, CPs, and any miscellaneous claim adjustment prior to:

    • Inputting an adjustment

    • Initiating correspondence

      Exception:

      Master file verification isn't required when corresponding for a missing tax period or TIN, or when a return has been perfected

  2. Master file verification requires the comparison of lines 1-15 Column A on Form 1040-X, with CC IMFOL or CC TXMOD.

    Caution:

    The American Rescue Plan Act of 2021 allows the taxpayer to exclude $10,200 (MFJ - $10,200 for each spouse) of Unemployment Compensation from income for the tax year 2020. Taxpayers may file a Form 1040-X with an incomplete Column A or incorrect Column A due to systemic recovery performed on these accounts. Refer to IRM 21.6.6.2.54, Unemployment Compensation Exclusion due to American Rescue Plan Act (ARPA) of 2021, and the 2020 Unemployment Compensation Exclusion (UCE) FAQs found on irs.gov for additional information regarding the UCE.

    1. If any combination of lines in Column A don't match CC TXMOD and no math error (MTH-ERR) is present, then Math verification is required.

    2. Review AMS and CII Case Notes on cases worked by SP 1040-X.

    3. Be sure to consider all previous adjustments. If no changes can be identified see IRM 3.11.6.6.1, Duplicate Returns and Identical Open CII Cases.

    4. When Column A doesn't match and an amended Form 1040 series is attached matching Column C, adjust to the Column C amount(s).

    5. For single page returns with a payment made within a few days of the received date or "W-7" stamped returns, research IDRS to determine if it was for a payment or ITIN renewal only. If the preceding scenarios are applicable, treat as a duplicate return. See IRM 3.11.6.6.1, Duplicate Returns and Identical Open CII Cases.

  3. When the amount shown on a supporting form or schedule differs from the amount shown on the Form 1040-X:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ adjust using the 1040-X amount.

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  4. When a dependent is being removed, verify the taxpayer is removing credits associated with that dependent.

  5. Math verification is required when one or more of the following are met:

    1. There’s a total tax change (positive or negative) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Column A entries don't match TXMOD or IMFOL (no math error code is present) and paragraph (2)(d) above doesn't apply.

    3. A math error is present. Also see IRM 3.11.6.16.6, Math Error Response Cases.

    4. There are amounts that are blank, illegible or incorrect.

    Exception:

    Math verification isn't required when the claim doesn't meet SP criteria, the entry is off by a dollar due to rounding, or the error can be identified as a misplaced entry that results in no difference between the taxpayer’s expected refund or balance due and the overall adjustment being made.

  6. Math verification includes doing the following:

    1. Verifying the math on the entire amended return, including any forms, schedules and worksheets that are related to the change.

    2. Verifying the taxpayer’s modified entries using the forms attached to the claim, schedules, worksheets, taxpayer remarks, and IDRS research.

    3. Verifying the corrected tax computation.

    4. Verifying any additional taxes on line 10 as reported by the taxpayer are calculated correctly.

    5. Verify all income-based items on claims involving an income change. Recalculate the items when the income changes, even if the taxpayer doesn't address them.

  7. If you're unable to "perfect" the return based on information submitted and through IDRS research, correspond requesting clarification:

    If ... Then ...
    there's an unexplained amount that results in a change ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ to lines 11-15, Column B Accept the amount and adjust using the taxpayer’s Column B figures.
    The taxpayer's Column A figures (original amount) don't match IDRS Correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.
    For any other reason Correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  8. When math verifying the return and an error is discovered, re-compute the correct amounts using the information supplied and IDRS research. After perfecting the Total Tax (line 11), if the recomputed lines 12 - 15 amounts are:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, adjust using the taxpayer’s figures.

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, adjust the account using your recomputed figures. See IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

3.11.6.6.1 (01-02-2024)

Duplicate Returns and Identical Open CII Cases

  1. A duplicate condition occurs when:

    • Multiple open CII cases are identical

    • An amended return matches the most recent adjustment/filing figures

  2. When other open CII case(s) are present and assigned to the generic queue, determine if the other case(s) are identical to your case. If so, process as follows:

    1. Link the cases using the "Link" function on the "Active Case" page.

    2. In the Link Case popup, input the CII Case ID of the case(s) to be linked, one at a time.

    3. Notate "duplicate amended return" in the notes section of the identical case(s).

    4. Reassign the unassigned case to your CII case inventory.

    5. Close each CII case linked to the original case using the "Close as Misc" button.

    6. Continue processing the original CII case per normal procedures.

    Reminder:

    If a case is open to another SP 1040-X tax examiner, refer to IRM 3.11.6.7.17.1, Cases Open to an SP 1040-X Tax Examiner.

  3. Prior to treating an amended return as a duplicate, review the return and attachments for routing criteria.

    1. If the return is a duplicate but the taxpayer is requesting an additional action, follow general processing procedures.

    2. Research IDRS for taxpayer correspondence. Research the type of letter(s) that have been sent. Send the case to the originating area. This includes the Letter 12C requesting a taxpayer signature.

    3. When it appears that Code and Edit has corresponded for a signature (Form 3531 attached or notated in the working trail) and the return is still unsigned, follow normal procedures and send the case to Entity.

    4. If the return is a duplicate, don't correspond for missing forms, schedules, or signature(s).

  4. When processing a CII case, continue researching to determine the reason the taxpayer filed the form.

    If ... And ... Then ...
    The taxpayer has requested a processable change that doesn't cause a change to a line-item dollar amount The change has a specific reason code (RC) Input a TC 290 .00 with the appropriate RC.
    The taxpayer has requested a processable change that doesn't cause a change to a line-item dollar amount The change doesn't have a specific reason code Use RC 099.
    No change or action is required   Input a TC 290 .00 without a reason code.

    Note:

    If there's a prior pending adjustment, input a post delay code.

  5. Once a Form 1040/A/EZ/SR is identified as an amended return and that reverts the module back to the original filing, look for any indication as to why. If no indication is found, then treat the return as classified waste. See IRM 3.11.6.16.22, Classified Waste.

    Exception:

    If an active Combat Zone return, per IRM 3.11.6.16.4, Combat Zone, will revert the module to the original filing, input a TC 290 .00 without a reason code.

3.11.6.7 (01-02-2024)

Sorting, Routing, and Priority Screening

  1. Before inputting an adjustment or corresponding, screen the case to identify all documents and IDRS conditions requiring actions by another area.

  2. Occasionally, a Form 4442, Inquiry Referral, or E-4442, may be received from another area. Expedite the processing of these requests.

  3. When screening a case:

    • Identify all possible route out criteria, then send to the highest priority as stated in paragraphs 4 and 5 below

      Note:

      Specific routing instructions found within the designated priority order take on that priority.

      Example:

      A case has a -W freeze and a -L Freeze (status code 12) on the account, and it also meets AUR open case criteria. In this instance, the three possible routing destinations for this claim are Exam, AUR, and AM. Since Exam is the highest priority and has specific instructions regarding the -W freeze, the case bypasses the AUR criteria and will be sent to AM.

    • Follow specific IRM instructions

    • CII cases are reassigned or rerouted through CII whenever possible. See IRM 3.11.6.9, 1040-X Reassignment and Reroute Guide

      Caution:

      When reassigning a case through CII, don't close the case control. Closing the case control causes an "E-1" error.

    • If the TC 150 has not posted, see IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150)

    • Don't input or update CC REQ54, CC DUPED, CC DDBCK or CC ENREQ unless otherwise instructed by a specific IRM section

    • Input a case note and see IRM 3.11.6.7.19.1, Working Trail and Action Trail

    Note:

    Keep all related tax years together if possible.

    Exception:

    Don't route non-statute year returns to the Statute unit unless they are attached to a statute year return for informational purposes. Don't route a non-AUR cases to AUR unless they are attached for informational purposes

  4. If Form 1040-X needs must be converted to a Form 1040 or Form 6114, follow the association process in IRM 3.11.6.4.2, Association, Forms, Schedules, and Other Documents to CII Cases, prior to routing.

  5. See IRM 3.11.6.7.19.2, Transaction Code (TC) 971 and Action Codes, for TC 971 Action Codes and routing destination for specific items.

  6. See IRM 3.11.6.4.7, Processing Presidential Election Campaign Fund (PECF) Requests, for "Dummy PECF" editing instructions.

3.11.6.7.1 (01-02-2024)

SP 1040-X Routing When a TC 150 Isn’t Present

  1. When a TC 150 isn’t present, the priority of routing is as follows.

    Priority ... Condition ... Follow ...
    1 Taxpayer Protection Program (TPP) IRM 3.11.6.7.4, Taxpayer Protection Program (TPP) Screening.
    2 ID Theft (IDT) IRM 3.11.6.7.8, Identity Theft (IDT) Screening.
    3 Disaster Claims IRM 3.11.6.7.6, Disaster Claim Screening.
    4 Statute IRM 3.11.6.7.9, Statute Review Screening.
    5 All other cases IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150).

3.11.6.7.2 (01-02-2024)

SP 1040-X Routing When a TC 150 Is Present

  1. When a TC 150 is present, the priority order for routing is as follows.

    Priority ... Condition ... Follow ...
    1 International case IRM 3.11.6.7.3, International Return Screening.
    2 Taxpayer Protection Program (TPP) case IRM 3.11.6.7.4, Taxpayer Protection Program (TPP) Screening.
    3 Identity Theft (IDT) case IRM 3.11.6.7.8, Identity Theft (IDT) Screening.
    4 Office of Fraud Enforcement (OFE) case IRM 3.11.6.7.5, Office of Fraud Enforcement (OFE) - Suspicious Case Referral Screening.
    5 Disaster Claim case IRM 3.11.6.7.6, Disaster Claim Screening, and IRM 3.11.6.16.2, Processing a Disaster Claim.
    6 Carryback (CB) or Carryforward (CF) Claim case IRM 3.11.6.7.7, Carryback and Carryforward Screening.
    7 Statute case IRM 3.11.6.7.9, Statute Review Screening.
    8 Examination case IRM 3.11.6.7.10, Examination Case Screening.
    9 Frivolous (FRIV) case IRM 3.11.6.7.11, Frivolous Claims Screening.
    10 Criminal Investigation (CI) Scheme Development Center (SDC) case IRM 3.11.6.7.12, Criminal Investigation (CI) Scheme Development Center (SDC) Screening.
    11 Return Integrity and Verification Operation (RIVO) case IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.
    12 Category A (CAT-A) case IRM 3.11.6.7.14, Category A (CAT-A) criteria Screening
    13 Automated Underreporter (AUR) case IRM 3.11.6.7.15, Automated Underreporter (AUR) Screening.
    14 Adjustment Function Criteria (AM) case IRM 3.11.6.7.16, Accounts Management Case Screening.
    15 Open case to an employee in an area not listed above IRM 3.11.6.7.17, Open Cases and Open Control Base Screening.
    16 Collection Function case IRM 3.11.6.7.18.3, Collection Function Case Screening.
    17 All other case types Various.

3.11.6.7.3 (01-02-2024)

International Return Screening

  1. Send all International returns to AM. This includes duplicate returns.

  2. Don’t process an amended return if all the Forms W-2 and Forms 1099 attached are from the Virgin Islands (regardless of the address). Send these returns to the following address:
    Virgin Islands Bureau of Internal Revenue
    6115 Estate Smith Bay, Ste. 225
    St. Thomas, U.S. Virgin Islands 00802

  3. Send to AM if "dual status" is indicated by the following conditions on an "amended" Form 1040:

    Form 1040 Revision is Filing Status Box is checked and Line is blank or zero
    2019 and later Other than Married filing separately (FS 3) In entity section for "Your spouse itemizes on a separate return or you were dual-status alien" 8

  4. If any of the following are attached or mentioned, send the amended return to AM..

    • Claims with foreign addresses on either the original or amended return (other than APO, DPO, and FPO addresses)

    • Form 1040 GUAM, Guam Individual Income Tax Return

    • Form 1040C, U.S. Departing Alien Income Tax Return

    • Form 1040-NR, U.S. Non-resident Alien Income Tax Return

    • Form 1040NR-EZ., U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents

    • Form 1040PR, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bone Fide Residents of Puerto Rico)

    • Form 1040SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico)

    • Form 1042S, Foreign Person's U.S. Source Income Subject to Withholding

    • Form SSA-1042S, Social Security Benefit Statement

    • Form RRB-1042S, Railroad Retirement Benefits

    • Form 2555, Foreign Earned Income

    • Form 2555EZ, Foreign Earned Income Exclusion (attached or noted on the return)

    • Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts

    • Form 3520-A, Annual Return of Foreign Trust With a U.S. Owner

    • Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa

    • Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)

    • Form 8288A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests (IRC 1445)

    • Form 8288B, Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests

    • Form 8689, Allocation of Individual Income Tax to the Virgin Islands

    • Form 8804, Annual Return for Partnership Withholding Tax (Section 1446)

    • Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax

    • Form 8813, Partnership Withholding Tax Payment Voucher (Section 1446)

    • Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)

    • Form 8854, Initial and Annual Expatriation Information Statement

    • Form 8858, Information Return of U.S. Persons with Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs)

    • Form W-2AS, American Samoa Wage and Tax Statement

    • Form W-2GU, Guam Wage and Tax Statement

    • Form W-2VI, U.S. Virgin Islands Wage and Tax Statement

    • Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)

    • Claims involving IRC 911, IRC 931, or IRC 933

    • A notation on the return of "Dual Status"

    • Claims for an exemption or exclusion of the tax or income due to an international treaty or United States Tax Treaty

    • Claims involving Treaty Trader or Fulbright Grantee

    • Claims citing income from Johnston Island (26 CFR 1.931-.1)

    • Income paid in foreign currency, whether or not it was converted to U.S. currency

    • Primary, secondary, or both taxpayers are Non-Resident Aliens (NRA)

    • Any indication on the Form 1040-X the taxpayer originally filed an International return and is requesting a conversion to a Domestic return (i.e., originally filed Form 1040-NR and request conversion to Form 1040)

3.11.6.7.4 (01-09-2023)

Taxpayer Protection Program (TPP) Screening

  1. The Taxpayer Protection Program (TPP) is for cases where potential IDT has been identified. The taxpayer is sent a Letter 4883C requiring the taxpayer to authenticate through the TPP.

  2. Send all cases selected for the TPP to AM. TPP cases can be identified by the following:

    • Unpostable TC 150 with unpostable code (UC) 1260

    • TC 971 AC 124

    • TC 971 AC 124 with either an unpostable TC 150 UC 1260 or CC TRDBV shows the return is unpostable

    • TC 971 AC 129 with Misc>"NNNNNNNNNNNNNN 1040X" on CC IMFOL and CC TXMOD

    Note:

    NNNNNNNNNNNNNN = DLN of MeF Return

3.11.6.7.5 (02-17-2023)

Office of Fraud Enforcement (OFE), Suspicious Case Referral Screening

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    Note:

    If the case meets Exam or CAT-A routing criteria, don't send to OFE. Send the case to Exam or CAT-A as appropriate.

    Exception:

    If the case meets Identity Theft criteria, send the case per IRM 3.11.6.7.8, Identity Theft (IDT) Screening.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, follow the table below:

    Note:

    Form 13549, Campus Fraud Lead Sheet, must be completed electronically.

    If processing a ... Then ...
    MEFP case

    1. The tax examiner must:

      1. Complete Form 13549, Sections I, II, Section III item 1, and Section IV. In Section IV, make the following notations:

        • The case is on Modernized e-File Return Request Display

        • CII case ID

        • Describe the suspicious elements on the case. Refer to page 4 of Form 13549

      2. Leave a Case Message stating, "Form 13549 approval request."

      3. Suspend the case to your lead and send a secure e-mail with Form 13549 attached. Remember to indicate the CII Case Id in the e-mail.

    2. The lead must:

      1. Verify Form 13549, Sections I, II, Section III item 1, and Section IV have been completed correctly. If incomplete, return to the TE for corrections. If complete, review the case

      2. If you approve, reassign the case back to the TE with a case message stating, "Form 13549 referral approved, close the CII case."

      3. Complete Form 13549 Section III item 2 c and send the case to the appropriate fraud advisor based on your site. Your site’s advisor can be found using this link Campus Fraud Examination and Fraud Enforcement Advisor Contacts

      4. If you don't approve, complete Form 13549 Section III Item 2 a, and Section V and e-mail the form back to the TE. Reassign the case back to the TE with a case message stating, "Form 13549 referral denied, continue processing."

    3. When the lead returns the case, take the following action:

      1. If the referral is approved, leave a case note stating, "Form 13549 referral" and close the case

      2. If the referral is denied, continue process per normal procedures
    MEFS case

    1. The tax examiner must:

      1. Complete Form 13549, Sections I, II, Section III item 1, and Section IV. In Section IV, make the following notations:

        • The case is on CII

        • CII case ID

        • Describe the suspicious elements on the case. Refer to page 4 of Form 13549

      2. Leave a Case Message stating, "Form 13549 approval request."

      3. Suspend the case to your lead and send a secure e-mail with Form 13549 attached. Remember to indicate the CII Case Id in the e-mail

    2. The lead must:

      1. Verify Form 13549, Sections I, II, Section III item 1, and Section IV have been completed correctly. If incomplete, return to the TE for corrections. If complete, review the case

      2. If you approve, take the following actions:

        • Reassign the case back to the TE with a case message stating, "Form 13549 referral approved, close the CII case."

      3. Complete Form 13549 Section III item 2 c and send the case to the appropriate fraud advisor based on your site. Your site’s advisor can be found using this link Campus Fraud Examination and Fraud Enforcement Advisor Contacts

      4. If you don't approve, take the following actions:

        • Complete Form 13549 Section III Item 2 a, and Section V. Then e-mail the form back to the TE

        • Reassign the case back to the TE with a case message stating, "Form 13549 referral denied, continue processing."

    3. When the lead returns the case, take the following action:

      1. If the referral is approved, leave a case note stating, "Form 13549 referral" and close the case

      2. If the referral is denied, continue process per normal procedures

3.11.6.7.6 (01-02-2024)

Disaster Claim Screening

  1. A qualified disaster loss is an individual’s casualty or theft loss of personal-use property that’s attributable to a major disaster declared by the President under section 401 of the Stafford Act in 2016, and January 1, 2018, through February 18, 2020. Verify the taxpayer had a loss in a qualified disaster area via the IRS Disaster Assistance Program.

  2. The Disaster Tax Relief Airport and Airway Extension Act of 2017, the Tax Cuts and Jobs Act (TCJA), the Bipartisan Budget Act of 2018, and the Further Consolidated Appropriations Act, 2020 provide special rules for some qualified disaster losses. For a list of the qualifying disasters, see the IRS Disaster Assistance Program. The special rules include:

    • The $100 limitation per casualty increased to $500

    • The 10 percent of AGI limit doesn't apply

    • The standard deduction is increased by the net qualified disaster loss

    A qualified disaster loss is a personal casualty loss caused by:

    • A federally declared disaster that occurred in 2018 or 2019, but before December 21, 2019

    • A federally declared disaster that occurred beginning January 1, 2020, but before February 26, 2021

    • Hurricane Ida disaster after August 28, 2021

  3. For tax years 2018 through 2025, an individual’s loss of personal-use property is deductible only if the loss is attributable to a federally declared disaster.

    Exception:

    Personal casualty or theft loss can only be deducted to the extent of casualty gains.

  4. Taxpayers who live in a Federal "Declaration of Emergency or Major disaster" area may file disaster claims. The IRS may place a -O or -S freeze on the module for the zip codes of the affected areas to indicate the taxpayer resides in a disaster area. Disaster claims are identified by either:

    • -O and/or -S freeze on the module

    • Taxpayer mentions the loss is attributable to a federally declared disaster

  5. When instructed to send a disaster claim to AM, use category code "KATX" if the disaster claim meets the criteria listed in paragraph 2 above, and use category code "DSTR" for all other cases.

  6. If a TC 150 hasn’t posted on a disaster claim, send the case to AM.

  7. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  8. Taxpayers claiming a disaster loss must file Form 4684, Casualties and Thefts. The taxpayer may file a claim for the year of the disaster or may elect to claim the loss in the tax year preceding the disaster year.

    If ... Then ...
    The loss is claimed for the tax year in which the disaster occurred The return must be filed within three years of the due date of the return for the tax year in which the disaster occurred, without extensions.
    The loss is claimed for the tax year preceding the tax year in which the disaster occurred The election must be made on or before 6 months after the due date for filing your original return (without extensions) for the tax year in which the disaster occurred.
    A disaster claim isn’t filed within the timeframes above Send the case to AM.
    The disaster claim is timely filed Process the claim following IRM 3.11.6.16.2, Processing a Disaster Claim.

    Example:

    A disaster occurs in August 2020, and the loss is sustained in 2020. The taxpayer can elect to timely file the disaster loss for 2019 until October 15, 2021. Alternatively, the taxpayer could choose to file the loss for the 2020 tax year and has until April 15, 2024, to claim the loss via an amended return.

  9. Correspond using Letter 324C if:

    • The Form 4684 is missing

    • The disaster claim is missing a signature. Suspend the return until you secure a signature only on refund returns
      - If a reply is received within 45 days, continue processing the return and input under Blocking Series 05
      - If no reply is received after 45 days, send a Letter 916C, per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP). Input a TC 290 .00 to file the return

    • The federally declared disaster designation isn't listed in Section A(1) of Form 4684 (for 2018 through 2025)

  10. Follow normal processing procedures if the return isn't a disaster claim as defined in (1) or (2) above.

    Note:

    A non-disaster claim is a casualty loss that isn't attributable to a federally declared disaster.

3.11.6.7.7 (01-02-2024)

Carryback and Carryforward Screening

  1. ALL Carryback or Carryforward (CB/CF) claims are sent to AM.

    Note:

    If the case is 60 days or less before the ASED expires, or if the ASED has expired, leave a case note stating, "CB/CF/Statute Imminent" . Leave a CC ACTON history item "STAT IMNT" .

  2. Identify if the claim is Carryback or Carryforward. Then reassign the case to the appropriate queue per IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2, MEFS Reassignment and Reroute Guide, as appropriate.

    Note:

    For more information on how to identify a Carryback or Carryforward claim, see Technical Communication Document (TCD) 0212

    .

  3. A taxpayer who has an overpayment of tax as a result of a Net Operating Loss (NOL), Net Capital Loss (NCL), Unused Credits, or a Claim-of-Right adjustment can file an application or claim, also referred to as a carryback claim (RINT) or tentative refund (TENT), for adjustment or refund. The tax year in which the loss occurred is the loss year. The tax year the loss is applied to is the gain year.

  4. An NOL occurs when deductions exceed income from all sources. In computing an NOL, non-business deductions, such as the deduction for mortgage interest on a personal residence, are deductible only to the extent of non-business income, such as investment income on a personal investment. Deductions that relate to a trade or business, work as an employee, or casualty or theft are not limited in computing an NOL.

    Note:

    For 2018 through 2025, miscellaneous itemized deductions such as the deduction relating to work as an employee are not allowed, and thus are not considered in determining an NOL for those years. For 2021 and after, most NOLs may only be carried forward. After 2020, only NOLs attributable to the trade or business of farming and NOLs incurred by non-life insurance companies are eligible for carryback.

    .

    Exception:

    The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of 2020, enacted March 27, 2020, temporarily repealed some of the TCJA provisions that limited carrybacks, including the disallowance of NOL carrybacks for entities other than farming businesses and non-life insurance companies. For claims involving an NOL incurred in a tax year beginning in 2018, 2019, or 2020, see IRM 21.5.9.5.10.8.

  5. A RINT is claimed on Form 1040-X, U.S. Individual Income Tax Return, an amended Form 1040, U.S. Individual Income Tax Return, an amended Form 1040-SR, U.S. Tax Return for Seniors, or an amended Form 1040-NR, U.S. Nonresident Alien Income Tax Return, resulting from a carryback of:

    • An NOL

    • An NCL

    • Unused general business credits and other credits

    • Section 1256 contract losses

    • Claim-of-right

  6. A TENT is claimed on Form 1045, Application for Tentative Refund. A Form 1045 can be filed by individuals, estates or trusts to apply for a quick tax refund resulting from the carryback of:

    • An NOL

    • Unused general business credits

    • A net section 1256 contract loss

    • An overpayment of tax due to a claim of right adjustment under section 1341(b)(1)

  7. An NOL occurs when certain deductions exceed income from all sources. Only deductions that relate to a trade or business, work as an employee, or casualty or theft losses can create an NOL. Once computed, an NOL is carried to other tax years as an NOL deduction. An NOL deduction reduces the taxable income for the taxable year to which the NOL is carried and may allow a refund for taxes already paid if the NOL is carried back to an earlier year. Any NOL remaining after computing the amount of the NOL absorbed in preceding years may be carried to later years.

    Note:

    Miscellaneous itemized deductions such as work as an employee are disallowed for tax years 2018 through 2025 and thus are not considered in determining an NOL for those years.

  8. An NCL for individuals occurs when capital losses exceed capital gains, plus a limited amount of ordinary income ($3,000 Married Filing Joint, or $1,500 Married Filing Separately). A NCL can only be carried forward on an IMF (Individual Master File) return.

  9. Unused general business credits and other credits.

    Credits Carry Back Carry Forward
    Form 1116, Foreign Tax Credit

    Note:

    Certain taxpayers may file Form 1118, Foreign Tax Credit - Corporations. Route these cases to AM.

    		 1 year 10 years
    Form 3800, General Business Credit 1 year 20 years
    Form 5695, Residential Energy Credits No Unlimited
    (until used)
    Form 8396, Mortgage Interest Credit No 3 years
    Form 8839, Qualified Adoption Expenses No 5 years
    Form 8859, Carryforward of the District of Columbia First-Time Homebuyer Credit No Unlimited
    (until used)

  10. An individual taxpayer can carryback section 1256 contract(s) losses three years but can only apply them to section 1256 contract(s) gains.

  11. A claim of right adjustment under IRC 1341(b)(1) is mentioned in the explanation of changes or attachments.

  12. Indications that a taxpayer is trying to take a carryback are:

    • The Form 1040-X line 1 carryback box is checked

    • The Form 1040-X line 7 carryback box is checked

    • A notation of NOL Carryback on the return, in the Form 1040-X, Part III, Explanation of Changes, or other attached documents

    • Form 1045, Application for Tentative Refund, and/or supporting schedules (Schedule A-NOL, Schedule BNOL Carryover, or Schedule D) are attached

    • Schedule K-1 from a partnership, S corporation, estate, trust, or similar wording is attached for the year of the loss

    • Typically, section 1256 contract losses are reported on Form 6781, Gains and Losses from Section 1256 Contracts and Straddles, with box D checked. The losses might also be mentioned in the explanation of changes or other attachments

    • Claim-of-right adjustment under IRC 1341(b)(1) is mentioned in the explanation of changes or attachments.

      Note:

      A Claim of Right Adjustment can be entered on line 2 or line 15 of the 1040-X, with an amount in an attached Schedule 3 (Form 1040), line 13b, or Schedule A (Form 1040) line 16.

    • Form 1116, Foreign Tax Credit. Part III line 10

    • Form 3800, General Business Credit, Part I lines 5, Part II line 35, and Part III box D is checked

  13. Indications that a taxpayer is trying to take a carryforward are:

    • A notation of NOL Carryforward, or Carryover on the return, in the Form 1040-X, Part III, Explanation of Changes, or other attached documents

    • A notation of an election to forgo the carryback period for any tax year and carry the entire NOL forward

      Reminder:

      Check TRDBV for e-filed returns look for the literal "ELECTION" . If present, the election has already been made. Don't send the as CB/CF.

    • Form 1040 has a change on line 21, Other income

    • Schedule K-1 from a partnership, S corporation, estate, trust, or similar wording is attached for the year of the loss

    • Typically, section 1256 contract losses are reported on Form 6781, Gains and Losses from Section 1256 Contracts and Straddles, with box D checked. The losses might also be mentioned in the explanation of changes or other attachments

    • Claim-of-right adjustment under IRC 1341(b)(1) is mentioned in the explanation of changes or attachments. The taxpayer might mention Regulation 5.6.411.1(d)

      Note:

      A Claim of Right Adjustment can be entered on line 2 or line 15 of the 1040-X or Schedule A line 16.

    • Form 1116, Foreign Tax Credit, Part III line 10

    • Form 3800, General Business Credit, Part I line 4 or Part I line 5 box is checked, Part II line 34 or Part II line 35 box is checked, Part III box C is checked, and Part III credit identified as "carryforward only"

    • Form 5695, Residential Energy Credits, Part I lines 12 and 16

    • Form 8396, Mortgage Interest Credit, Part I lines 4, 5 and 6, and Part II lines 14, 16, and 17

    • Form 8839, Qualified Adoption Expenses, Part II line 13

    • Form 8859, Carryforward of the District of Columbia First-Time Homebuyer Credit

  14. Don't treat the following claims as CB/CF claims:

    • The term "carryforward" can be used when identifying certain credits that can apply to future tax years. Since these are not restricted interest claims they are not CB/CF claims

    • Schedule D loss that exceeds the $3,000 loss limit. Taxpayers are entitled to "roll-over" or "carryforward" any Schedule D loss that is greater than $3,000. Process these cases with RC 013

    • Carryover of an IRA

    • Schedule A, Itemized Deductions, with an entry in the Gifts to Charity section on "Carryover from prior year."

    • Cases where none of the CB/CF issues are changing (e.g., An NOL is indicated on line 21 of Schedule 1 but isn't changing)

3.11.6.7.8 (01-02-2024)

Identity Theft (IDT) Screening

  1. Identity Theft (IDT) can be indicated by the taxpayer’s explanation, by markers on the account, or by suspicious changes identified by tax examiners.

  2. Accounts the IRS has identified as IDT contain one of the following indicators. If one of the following indicators is found, see paragraphs 3 and 7 below.

    • CC ENMOD, IMFOL, or TXMOD: TC 971 with AC 506, 522 (with the literals UNWORK or IRSID), or 524 (if the 1040X is for a tax year after the date of death). See paragraph 3 below for additional information

      Note:

      The Secondary Date (SECONDARY-DT>) field of one of the above indicators reflects the tax year affected by identity theft. If the tax period in question matches the year of the Secondary Date, see paragraphs 3 and 7 below.

      Exception:

      AC 524 may or may not have a SECONDARY-DT field entry. AC 524 is an identity theft indicator used to lock the account of deceased taxpayers. It prevents a deceased taxpayer’s TIN (SSN or ITIN) from being used as the primary, secondary, or dependent TIN on a current or subsequent year federal income tax return. The TC 971 AC 524 indicator is applied systemically to the account and is effective the following year after the date of death.

      Example:

      Taxpayer’s date of death is 6/03/2020. A return for TY 2020 can post but a return for TY 2021 won’t.

    • CC TXMOD or IMFOLT: TC 971 AC 111

    • CC IMFOLI: MFT 32 is indicated for the Tax Year and No TC 150 is present on MFT 30. See paragraph 7 below

    Note:

    The IDT literal on CC ENMOD, CC IMFOLE, or other TC 971 Action Codes should not be used as an IDT indicator.

  3. Verify IDT indicators have not been reversed prior to routing. If a TC 972 is present reversing the IDT indicator, don't route the return unless there are additional indicators present.

  4. A taxpayer can self-identify as a victim of IDT by:

    • Stating in the Explanation of Changes on Form 1040-X or a separate statement

    • Completing Form 14039, Identity Theft Affidavit

    • Responding to IRS correspondence related to IDT

  5. If the taxpayer indicates their dependent is a victim of IDT, send the case to AM. The taxpayer can indicate their dependent is a victim of IDT by:

    • Stating in the Explanation of Changes on Form 1040-X or a separate statement

    • Completing Form 14039, Identity Theft Affidavit

    • Responding to IRS correspondence related to IDT

  6. Tax Examiners may identify suspected IDT when the return doesn't master file verify and when certain account changes seem suspicious such as large, unusual or questionable line-item changes. When this occurs use the following research steps to aid in determining if the return should be routed as IDT:

    1. Use CC RTVUE to verify:
      - Address for the first return(s) filed
      - Dependents
      - Type of Income
      - Filing Status
      - Schedules and Forms filed

    2. Use CC TRDBV to verify:
      - Significant changes in the filing history
      - Occupation
      - Requested method of refund payment
      - Tax Preparer
      - Multiple attempts to file a rejected return

    3. Use CC DDBCK to verify:
      - Dependents and/or credits claimed on the original return

    4. Use CC IMFOLI to verify:
      - Number of years the TIN has been used
      - Filing status changes
      - Method of filing: paper or e-file

    5. Use CC IRPTR to verify:
      - Comparative review of reported income and payor information
      - Previous and current employer
      - Previous address

    Reminder:

    Before routing as IDT, you must have multiple suspicious changes between the original filing and the amended filing.

  7. Once a return is identified as being an IDT return:

    If ... Then ...
    Form 1040-X

    1. Input "IDT" in the case notes.

    2. Send the case to AM.
    Form 1040 series

    1. In the upper left-hand corner of the return notate PAO (Process as Original).

    2. Circle out any notation that suggests the return was previously filed.

    3. Send the case to Batching.
    Form 1040-X with Form 1040

    1. If a TC 150 is posted (or pending):

      1. Input "IDT" in the case notes.

      2. Send the case to AM.

      If no TC 150 is posted or pending:

      1. "X" Form 1040-X.

      2. Edit PAO in the upper left-hand corner of the Form 1040.

      3. Circle out any notation that suggests the return was previously filed.

      4. Send the case to Batching.
    Undeliverable Send the case to Entity.
    Statute returns Send the case to IDTVA Statute:

    • Austin - 6539 AUSC

    • Kansas City - 6507 C2 KCSC

    • Ogden - 6507 C2 KCSC

    • Memphis - 6539 AUSC

3.11.6.7.9 (01-02-2024)

Statute Review Screening

  1. Beginning January 1, 2024, all returns for tax year 2020 and prior are considered statute year returns.

  2. Send any statute year case involving any of the following to AM:

    • A signed consent or request to extend the statute of limitations

    • Filing status changes to MFJ

    • Cases requiring a manual refund

    • A statement of Financial disability

  3. If the case is a Substitute for Return (SFR), see IRM 3.11.6.7.18.3.5, Automated Substitute For Return (ASFR) and Non-Filer Return (NFR) Screening.

  4. Per IRM 25.6.1.9.9, Procedures for Processing Amended Returns - in General, if a tax increase or credit decrease is required and the ASED is within 90 days of expiration, the case must be sent to the Statute function. Cases where the ASED is within 90 days of expiration or expired are considered statute imminent (SI) cases. Amended returns that are SI must be hand carried by a manager to Statute, per IRM 25.6.1.9.9.2, After Hours and Imminent Assessments.

    Exception:

    The hand carry requirement doesn't apply to cases on the CII system.

  5. IDRS research is required to determine if the amended return is a tax increase or credit decrease and to verify the ASED. When verifying the ASED, use today’s date.

    Exception:

    A claim to decrease withholding isn't considered a credit decrease and is processable without statute involvement.

    If IDRS shows Form 1040-X ... And the ASED ... Then ...
    Line 11 is a total tax increase Expired Take the following action:

    1. Input a TC 971 AC 014

    2. Suspend the case to Statute.
    Line 14 or line 15 is a refundable credit decrease

    Note:

    Be sure to consider hidden changes to refundable credits.

    		 Expired Take the following action:

    1. Input a TC 971 AC 014.

    2. Suspend the case to Statute.
    Line 11 is a total tax increase and line 14 or line 15 is a refundable credit decrease

    Reminder:

    Be sure to consider hidden changes to refundable credits.

    		 Expired Take the following action:

    1. Input a TC 971 AC 014.

    2. Suspend the case to Statute.
    Line 11 is a total tax increase Expires in 90 days or less Take the following action:

    1. Input a TC 971 AC 014.

    2. Suspend the case to Statute.
    Line 14 or line 15 is a refundable credit decrease

    Reminder:

    Be sure to consider hidden changes to refundable credits.

    		 Expires in 90 days or less Take the following action:

    1. Input a TC 971 AC 014.

    2. Suspend the case to Statute.
    Line 11 is a total tax increase and line 14 or line 15 is a refundable credit decrease

    Reminder:

    Be sure to consider hidden changes to refundable credits.

    		 Expires in 90 days or less Take the following action:

    1. Input a TC 971 AC 014.

    2. Suspend the case to Statute.
    Line 11 is a total tax increase Expires in 91 days or more Process per IRM 3.11.6.16.1, Processing Statute Cases.
    Line 14 or line 15 is a refundable credit decrease Expires in 91 days or more Process per IRM 3.11.6.16.1, Processing Statute Cases.
    Line 11 is a total tax increase and line 14 or line 15 is a refundable credit decrease Expires in 91 days or more Process per IRM 3.11.6.16.1, Processing Statute Cases.

  6. Follow the procedures in the table below in cases when a TC 150 isn't present:

    Exception:

    Due to the continued impact of COVID-19 and processing delays, SP and AM have developed procedures for IMF tax year 2019 and prior year original delinquent returns (No TC 150) to bypass AM Statute clearance and be processed as original returns. In addition, any 2019 and prior year returns previously cleared by AM Statute won’t be returned by SP to AM for clearance again if the 90-day statute stamp has expired. If a tax return is later considered a barred assessment due to this process change, the barred case won’t be charged to SP or AM. The barred case is considered systemic and reported on the quarterly barred statute report under the responsible area "N/A".

    If ... And ... Then ...
    Statute year Form 1040 There's no Form 1040-X attached.

    1. Input a TC 971/014.

    2. Suspend the case to Statute per IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2, MEFS Reassignment and Reroute Guide, as appropriate.

    Exception:

    If the return is stamped "Statute Cleared" or "No Statute Issue(s)" send to Batching.
    Statute year Form 1040-X There's an original Form 1040 or an "As Amended" Form 1040 is attached

    1. Follow the procedures in IRM 3.11.6.5.2, Form 1040 Attached to Form 1040-X, paragraph (5) except suspend the case to Statute Unit for clearance.

    2. Input a TC 971 AC 014.

    3. Suspend the case to Statute per IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2, MEFS Reassignment and Reroute Guide, as appropriate.

    Exception:

    If the return is stamped "Statute Cleared" or "No Statute Issue(s)" , then send to Batching. When routing a no TC 150 case to Batching and there's an E- freeze on the account, input a TC 971 AC 002 to indicate the amended return is being reprocessed as the original (to post as TC 150). The TC 971 AC 002 releases the E– freeze. When inputting the TC 971 AC 002 take the following action:
    • In the "TRANS-DT" field, input the TC 976/977 date associated with the case you’re processing as the transaction date.
    • In the "XREF-TIN" field, input the TIN of the primary taxpayer.
    Note: If the cross-reference TIN is the same as the account TIN, enter "R" to automatically populate the field.
    • In the "XREF-TX-PRD" field, input the correct tax period.
    Note: If the cross-reference tax period is the same as account tax period, enter "R" to automatically populate the field.
    Statute year Form 1040-X There's no Form 1040 attached

    1. Convert Form 1040-X to a Form 1040 or Form 6114.
      Exception: When using Form 6114, don’t X the Entity section.
      Reminder: If working a MEFS case, follow the association process in IRM 3.11.6.4.2, Association, Forms, Schedules, and Other Documents to CII Cases, prior to sending to Statute.

    2. Input a TC 971 AC 014

    3. Input a CC ACTON history of "X21502STAT."

    4. Suspend the case to Statute per IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2, MEFS Reassignment and Reroute Guide, as appropriate.

    Exception:

    If the return is stamped "Statute Cleared" or "No Statute Issue(s)" , input a TC 971 AC 002 and use the posted TC 976/977 date as the transaction date. This is done to indicate the amended return is being reprocessed as the original (to post as TC 150) which releases the E– freeze. Then send to Batching.

  7. If an amended Form 1040 is received in the 1040-X unit and the amended Form 1040 is stamped ""Statute Cleared" " , return the document to the Statute Unit.

3.11.6.7.10 (01-02-2024)

Examination Case Screening

  1. Review all claims and amended returns for examination involvement.

    • An open TC 420 on the account

    • An open TC 424 on the account

    • A -L freeze on the account

  2. If a case meets examination criteria and it’s incomplete, correspond following IRM 3.11.6.10, Correspondence Procedures.

    Caution:

    If the response to the correspondence is incomplete, send the claim to Exam.

  3. Use CC AMDISA to determine the AIMS status when a -L freeze is present on the account.

    If ... Then ...
    There’s a CI SDC open control Follow IRM 3.11.6.7.12 (3), Criminal Investigation (CI) Scheme Development Center (SDC) Screening.
    There’s not a TC 420 or TC 424 on the account Suspend the case the CAT-A.
    There’s a -W freeze present Send the case to AM as Out of Scope.
    There’s an open control base or CC AMDISA, shows an appeals case (IDRS number 66XXX) Send the case to AM as Out of Scope.
    The AIMS status is 90 Send the case to AM as Out of Scope.
    there's a TC 300 - 361 on the account Send the case to AM as Out of Scope.
    The AIMS status is 08 or less and CAT-A criteria is present. Follow IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.
    The AIMS status is 08 or less and CAT-A criteria isn’t present. Process as normal. If inputting an adjustment, use hold code 1.
    The AIMS status is 09 or more, but less than 90 Take the following action:

    1. Input a TC 971 AC 013 and use the received date of the amended return for the transaction date.

    2. Send the case to Exam based on the current Employee Group Code (EGC) in AIMS. Use the following link to the EGC list found on the SERP Who/Where tab to see where to send the case. Exam Employee Group Code.

3.11.6.7.11 (01-02-2024)

Frivolous Claims Screening

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. See paragraph 7 below for a list of frivolous arguments.

  2. A -E freeze is set by a posted TC 810 with a Responsibility Code (Res C). A TC 810 with Res C indicates a frivolous return, and the entire account is frozen. Adjustments shouldn’t be made to accounts showing an -E freeze. Send all cases with a TC 810 with a Res C to AM.

  3. F- freezes are set by a posted TC 971 AC 089 and indicates that a frivolous return has been received and the entire account is frozen. Adjustments aren’t made to accounts showing an F- freeze.

  4. Send any "suspicious" return or case with an F- freeze to the local Frivolous Return Program (FRP) Coordinator to review as follows:

    1. Input a case message stating the "case meets requirements to send to the FRP coordinator" and suspend the case to your lead or manager.

    2. The lead or manager must input a TC 971 with AC 013 with "SENT TO FRP" in the remarks area and forward the case to the local FRP coordinator.

  5. The FRP Coordinator reviews any case sent in which the taxpayer:

    1. Argues for any reason against filing a tax return or the paying of taxes.

    2. Uses one of the frivolous arguments or statements listed in paragraph 7 below.

    3. Marks out or alters in any manner, the penalty or perjury statement (i.e., the jurat) in the signature area.

  6. If a non-frivolous claim is received with an open control base to an employee in the FRP Unit (IDRS Numbers begin with 14867, 14868, or 14869) send the case to FRP at the following address:

    IRS Frivolous Return Program
    1973 N Rulon White Blvd
    Mail Stop 4450
    Ogden, UT 84404

    Input a TC 971 with AC 013 and enter "Sent to FRP" in the remarks area.

  7. The following list includes Recognized known frivolous arguments made by both individuals and businesses are included and is not inclusive of all frivolous arguments. Notice 2010-33 also is a non-exclusive source for identifying frivolous arguments..

    • Alleged Churches/First Amendment - Taxpayer receives income from non-religious sources, may claim a vow of poverty, and may submit a tax return with all or substantially all of the gross income claimed as a contribution on Schedule A.

    • Altered Form - Taxpayer submits a tax return altering any or all line-items with the intent of showing non-compliance with the tax laws.

    • Altered Jurat/Uniform Commercial Code (UCC) 1-207 - Taxpayer submits a tax return that contains income and deductions and alters or lines through all or part of the jurat. The return may include a reference to UCC 1-207 or a statement that the return wasn't signed under penalties of perjury. The alteration may be located elsewhere on the return and an arrow to the jurat.

    • Amended Returns/Form 843 Claim - Taxpayer files an amended return or Form 843 to obtain a refund of all taxes paid in prior years based on a tax avoidance argument.

    • American Indian Employment Credit - Taxpayers submit returns and claims reducing taxable income by substantial amounts and citing an American Indian Employment Credit. Although there's an Indian Employment Credit available for business that employ American Indians or their spouses, there's no provision for its use by the actual employee.

    • Argument against Government Action/Inaction - Taxpayer claims a deduction or credit on the tax return based on dissatisfaction with government actions or spending.

    • Bosnian Refugees - Taxpayer filing claim eliminating tax based on their status as a Bosnian refugee.

    • Certain instances of misuse or excessive use of the section 6421 fuels credit.

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

    • Challenges to Authority/Title 26 or "Law" in Other Documents - Taxpayer may argue that Title 26 of the United States Code (USC) isn't law because it was never enacted as named. They may also argue that other laws or documents prevent the IRS from assessing and collecting tax, such as the Bible, Bill of Rights, Declaration of Independence, etc.

    • Disclaimer - Taxpayer submits a disclaimer. The disclaimer states they "disclaim the liability of the tax due" , making the liability on the tax return zero.

    • Employment Tax/CFR 1.861 - No employer is legally obligated to withhold income or employment taxes on employees’ wages.

    • Erroneous claims that taxes are only owed by persons with a fiduciary relationship to the United States or the IRS.

    • Federal Reserve Notes Are Not Legal Tender - Taxpayer argues that Federal Reserve notes are not money, so they are not income when received.

    • Fifth Amendment - Taxpayer makes an improper blanket assertion of the Fifth Amendment right against self-incrimination as a basis for not providing financial information.

    • Form 1099 MISC -Form 1099 MISC -The Frivolous Form 1099 is used to claim large refunds based on false income amounts and withholding. The false income typically is reported as Other Income. Typically, the Form 1099 MISC payer (issuer) is a large bank, loan, and/or mortgage company and the income and withholding may be substantiated on IRPTR. The fraudulent withholding is generally 33 percent of the reported income but may be up to 100 percent. The taxpayer may include other issues on these fraudulent claims.

    • Form 2555 Deduction - Taxpayer submits a return showing income and deducts the same amount (or a large portion of the amount) by adding "Form 2555" to Schedule 1. Form 2555, Foreign Earned Income, is usually attached showing the taxpayer’s "foreign address" is in the United States. The taxpayer also shows his income on Form 2555 as "foreign earned income" even though the employer's address is also in the United States.

    • Fuel Tax Credit Returns - Taxpayers submit returns that reflect fuel tax claimed for occupations that would not justify the use of fuel used for non-taxable purposes, such as hairdressers, housekeepers, nurse, etc. Realistically, the taxpayers would not have money sufficient to live on, if indeed they had purchased the amount of fuel on which they claimed the credits. Therefore, the claims remain so far beyond a reasonable range as to doubt good faith on the return in general.

    • In Lieu of - Taxpayer submits a document containing personal identifying information and a summary of income received "in lieu of" an official income tax form.

    • IRC 1001 -Taxpayer claims on Schedule A under "Other Miscellaneous Deductions" no gain realized for even exchange of property-Labor (property)-Employer's (property) with NO GAIN REALIZED Butcher's Union Co. v. Crescent City Co., 111 US 746 S.CT.Rptr., pp.660-661.

    • IRC 83 - Claims, generally in the form of Form 843, Claim for Refund and Request For Abatement, request abatements of previously assessed taxes and/or penalties using IRC 83 as justification. The claims further describe that the abatement is based on an allegation that the taxpayer previously failed to compute, under IRC 83, the amount of property transferred in connection with the performance of services.

    • IRC 1341 - Taxpayer claims compensation for personal labor isn't taxed by Title 26, IRC 1341, sometimes arguing that the taxpayer has a "claim of right" to exclude the cost or value of the labor..

    • IRC 3121 - Taxpayer contends that IRC 3121 exempts the Federal Insurance Contribution Act (FICA) portion of earnings from the definition of "wages" and therefore from "gross income" for federal income tax purposes. The taxpayer attempts to reduce taxable income by their portion of withheld Social Security tax.

    • IRS is a Private Organization/Collects Tribute, Not Taxes - Taxpayer argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc. and since the IRS deposits its revenues in the Federal Reserve Bank, it is a collection agency for the Federal Reserve Bank. Additionally, the taxpayer argues the Department of Treasury is part of the United Nations and secretly leading the tax-paying public into a "New World Order" .

    • Native American Indian Treaty- The filings usually include Form 1099-MISC or other income documents that include withholding and results in a refund.

    • Mariner's Tax Deduction (or the like) related to invalid deductions for meals.

    • Misinterpretation of the 9th Amendment to the U.S. Constitution Taxpayer's objection to military spending.

    • Non-negotiable Charge Back - Taxpayer attempts to sell their birthright back to the government for a large dollar amount and requests that a "Treasury Direct Account" be set up to hold the money.

    • Not a Citizen/Free Citizen/Not a Resident of Federal Zone - Taxpayer argues they are not a citizen of the United States and received no income or benefits from sources within the United State.

    • Not a Person or Individual - Taxpayer argues that he or she isn't a "Person" or "Individual" within the meaning of the IRC; therefore, he or she isn't subject to income taxes.

    • Obscene, Vulgar, Harassing - Taxpayer submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often this argument is expressed in an extremely demeaning manner with obscene, vulgar, or crude language and characters.

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

      Example:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    • Outlandish and/or Unsubstantiated Credits - Taxpayers submit returns and claims that generally reflect income, but also claim the exact amount of income entered as withholding. Oftentimes the filing contains Forms 1099-OID (Original Issue Discount). In some instances, the 1099-OID is shown generated to a payee unrelated to the taxpayer (such as the Department of the Treasury or various judges or attorneys), yet the withholding is claimed on the taxpayer’s return. The refunds claimed, resulting from these filings, are large.

    • Prisoners and substitute W-2-- Prisoners supplying a substitute W-2 (Form 4852) with the explanation portion of the Form 4852 stating the income is based on computation of minimum wage for hours worked within the prison. the Form 4852 lists a withholding amount that allegedly represents the amount an employer would withhold from an employee’s wages if working for minimum wage. The inmate then claims a refund based on the data for income and withholding they say that the prison should have reported. Prisons never withhold tax from pay and don't issue Form W-2.

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

    • Services Not Taxable/Thirteenth Amendment/Form of Servitude - Taxpayer argues that income results from the sale of goods; therefore, the value of services isn't taxable. This includes indentured servitude arguments and barter offsets. The taxpayer may also argue that the Thirteenth Amendment outlawed slavery. They may claim to be a "natural enfranchised individual and freeman" who is a resident of a state and therefore a nonresident alien for the purpose of the IRC.

    • Sixteenth Amendment - Taxpayer argues the Sixteenth Amendment wasn't properly ratified; therefore, the federal government doesn't have the legal authority to collect an income tax without apportionment.

    • Taxes are Voluntary/Law doesn't Require - Taxpayer submits a tax return, amended tax return, or correspondence that argues income taxes are voluntary.

    • Thumbprint in lieu of a signature - Thumbprint is present in the signature area on a return.

    • Trusts - Taxpayer attempts to flow income through the trust to avoid personal tax liability. Promoters use "business trusts" as a means of evading income tax.

    • U.S. vs. Long - Taxpayer submits a tax return with zero money amounts and refers to U.S. vs. Long.

    • Unsigned Tax Returns - Taxpayer submits a completed unsigned tax return. A statement why the return isn't signed is attached or added to the return indicating disagreement with the tax system.

    • Unsupportable non-taxable compensation - Taxpayer reports wages but deducts all or a portion of the income as non-taxable compensation.

    • Untaxed - Taxpayer argues that they should be "untaxed" and attempts to drop out of the Social Security system. They withdraw or rescind their Social Security Number (SSN), claiming they are a sovereign citizen.

    • Valuation - Taxpayer argues that income isn't taxable because of the declining fair market value of the dollar. They state the dollar isn't backed by gold/silver, or the value of services is offset by the value of the labor (barter income).

    • Wages Deducted in Cost of Goods Sold - Taxpayer submits a return with a Schedule C claiming a deduction equal, or nearly equal, to the amount reported as wage income. The deduction is usually included in the cost of goods sold but could appear under a different deduction category.

    • Wages/Receipts Not Income - Taxpayer argues that salaries and wages are not "income" within the meaning of the Sixteenth Amendment. Taxpayer may also argue that labor worth a certain amount is exchanged for money worth the same amount, so there's no income to be taxed.

    • Wages, tips, and other compensation received for the performance of personal services - Taxpayer argues that the wages, tips or other compensation received are not taxable income or are offset by an equivalent deduction for the personal services rendered, including an argument that a taxpayer has a “claim of right” to exclude the cost or value of the taxpayer’s labor from income or that taxpayers have a basis in their labor equal to the fair market value of the wages they receive, or similar arguments described as frivolous in Rev. Rul. 2004–29, 2004–1 C.B. 627, or Rev. Rul. 2007–19, 2007–1 C.B. 843.

    • Zero Returns - Taxpayer submits a tax return with zero money amounts and attaches a statement claiming there's no section of the IRC that establishes an income tax liability. The statement may also contain arguments regarding the definition of income. Taxpayer may cite the Latin phrase "Nunc Pro Tunc" ("Then and Now" ) on the return, Form 1096 and/or 1099. Taxpayer may list all zeros and claim a refund of all Federal Withholding, or claim an amount for wages, AGI and Standard Deduction, enter no tax and claim a refund of all Federal Withholding, or taxpayer claims wages and AGI, but carries AGI to refund line.

    • Zero Wages on a Substitute W-2 - Filer generally attaches either a substitute Form W-2, Form 1099, or Form 4852 that shows "$0" wages or no wage information. Entries are usually for Federal income tax withheld but can be Social Security tax withheld or Medicare tax withheld. An explanation on the Form 1040-X or Form 4852 may cite "statutory language behind IRC 3401 and IRC 3121" or include some reference to the company refusing to issue a corrected Form W-2 for fear of IRS retaliation.

3.11.6.7.12 (01-02-2024)

Criminal Investigation (CI) Scheme Development Center (SDC) Screening

  1. The Criminal Investigation (CI) Scheme Development Center (SDC) identifies and assembles information on individuals and entities involved in civil and criminal noncompliance with the Internal Revenue Code (IRC) and other related statutes.

  2. Send claims meeting SDC criteria to your local SDC:

    • Austin: ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Kansas City: ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Ogden: ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Memphis: Follow instructions for Austin

  3. Use the following table to determine if the case must be sent to CI SDC:

    If ... Then ...
    IDRS shows a "-Z or Z-" freeze Send to the SDC. Input a CC ACTON history item To CISDC.

    Exception:

    If the tax module shows Project Code 0173, 0263, 0390, 0584, 0603, or 0611 on CC AMDISA, send the case to CAT-A regardless of the claim amount.

    Exception:

    If the return meets both Frivolous and SDC criteria, send the case to Frivolous.
    CC TXMOD has an unreversed pending or posted TC 914 or TC 916 Send to the SDC. Input a CC ACTON history item "To CISDC" .
    CC ENMOD has an unreversed pending or posted TC 918 Send to the SDC. Input a CC ACTON history item "To CISDC" .

  4. Claims returned from the CI SDC may have a stamp indicating they have been reviewed.

    If ... And ... Then ...
    The CI SDC returns the claim with instructions for the 1040-X team to work the case Other routing criteria is present Follow normal processing procedures. The case should be annotated with the routing criteria and the CI SDC processing instructions should be left attached.
    The CI SDC returns the claim with instructions for the 1040-X team to work the case The processing instructions conflict with IRM instructions Send the case to AM. The case should be annotated with the issue that doesn't meet SP 1040-X criteria and the CI SDC processing instructions should be left attached.
    The CI SDC returns the claim with instructions for the 1040-X team to work the case The case will be processed Follow normal processing procedures and add "Per CISDC" in the remarks.

    Note:

    When a Z freeze is present, the case must be manually input
    CI SDC returns the claim with instructions for the 1040-X team to send the case to Files   Then input a TC 290 .00 and add "Per CISDC" in the remarks.

3.11.6.7.13 (01-02-2024)

Return Integrity and Verification Operation (RIVO) Case Screening

  1. The Return Integrity Verification Operation (RIVO) identifies, and intercepts refunds from returns with questionable wage and/or withholding claims, which may include identity theft related issues.

  2. Use the following chart to on cases with RIVO involvement:

    Note:

    RIVO should not receive any CP notices or returns that have already been stamped by RIVO.

    If ... And ... Then ...
    RIVO is holding the refund with a TC 971 AC 134

    Note:

    Cases with a TC 971 AC 134 are pre-refund wage verification, not ID theft.

    		 Wages and withholding in Column C of the Form 1040-X can be verified per CC IRPTR
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡    		 Process the Form 1040-X using normal procedures.
    RIVO is holding the refund with a TC 971 AC 134

    Note:

    Cases with a TC 971 AC 134 are pre-refund wage verification, not ID theft.

    		 Wages and withholding in Column C of the amended return can’t be verified per CC IRPTR. Take the following action:
    Exception: If there's additional routing criteria and RIVO takes priority, then route the claim based on the second routing criteria. See IRM 3.11.6.7, Sorting, Routing, and Priority Screening, for routing priority.

    1. Adjust the account to the Form 1040-X figures following normal procedures.

    2. Use HC 4 to set the -K freeze.

    3. Open an IDRS control to:
      C#,AQC6X,A,AQC2
      1487877777,*

    4. Close the CII case.
    RIVO is holding the refund with a TC 971 AC 134

    Note:

    Cases with a TC 971 AC 134 are pre-refund wage verification, not ID theft.

    		 There’s an AQC marker (TC 971 AC 122, 140, or 128) and the account has not been adjusted by RIVO
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡    		 Take the following action:
    Exception: If there's additional routing criteria and RIVO takes priority, then route the claim based on the second routing criteria. See IRM 3.11.6.7, Sorting, Routing, and Priority Screening, for routing priority.

    1. Adjust the account to the Form 1040-X figures following normal procedures.

    2. Use HC 4 to set the -K freeze.

    3. Open an IDRS control to:
      C#,AQC6X,A,AQC2
      1487877777,*

    4. Close the CII case.
    There's an open case to RIVO Automated Questionable Credit (AQC), QRPA, or the account was previously adjusted by the AQC program. (The account will show a closed AQC control with a TC 971 AC 122, 140, or 128.) (The TC 971 AC 128 must contain a MISC field of AQCPTC191 or AQCPTC195 and a TC 810 with a memo amount.) The amended return:

    • Addresses income, withholding, or credits

    • Addresses the previously adjusted issues

    • Has Letter 4800C or Letter 3219C attached or mentioned.

    		 Don't input an adjustment. Send the entire case to RIVO AQC program:
    RIVO AQC Program
    Stop 763 ATSC
    4800 Buford Hwy
    Atlanta, GA 39901
    There's an open case to RIVO Automated Questionable Credit (AQC), QRPA, or the account was previously adjusted by the AQC program. (The account will show a closed AQC control with a TC 971 AC 122, 140, or 128.) (The TC 971 AC 128 must contain a MISC field of AQCPTC191 or AQCPTC195 and a TC 810 with a memo amount.) The amended return is changing items other than income, withholding, or credits. Follow normal processing procedures.
    Note: For open controls, place the case in "B" status, input the adjustment, and then return the case to its original status.
    There are Estimated Tax (ES) Payments on the module, but the taxpayer isn't claiming ES payments on the amended return. Or the taxpayer is claiming a small portion of the ES payments on the module. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Send the case to your local RIVO. Input a CC Acton history item "TO RIVO."

    • Austin: 6574 AUSC

    • Kansas City: 6574 S-2 KCSC

    • Ogden: 9002 OSC

    • Memphis: 6574 AUSC

  3. When verifying documents on CC IRPTR, if an information document (IDOC) contains one of the following statements, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡:

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

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

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

  4. Claims returned from RIVO may have a stamp indicating they have been reviewed.

    If ... And ... Then ...
    RIVO doesn't

    • Provide any specific processing instructions

    • Indicate "No RIVO Potential " or similar statement

    		 The claim still appears suspicious Elevate to your Lead or Manager. The Lead or Manager must check with the local P&A Analyst ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
    RIVO indicates the wages and/or withholding can't be verified, 1040-X can't be verified/disallow, or similar wording The wages or withholding are the only issue Take the following action:

    1. Input a TC 290 .00.

    2. Send a Letter 916C using the following fill-in: We can’t verify your claim for wages or withholding. Please verify your information.
    RIVO indicates the wages and/or withholding can’t be verified, 1040-X can’t be verified disallow, or similar wording The claim has a mix of items that can or can’t be verified on IRPTR Take the following action:

    1. Input the processable changes and allow items that can be verified through IRPTR.

    2. Disallow items that can't be verified on IRPTR. Send a Letter 106C disallowing the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), using the following fill-in: We can’t verify your claim for (fill in the blank). Please verify your information.
    RIVO indicates "RIVO is no longer interested in the return."   Follow normal processing procedures.
    RIVO returns the claim with instructions for the 1040-X team to work the case Other routing criteria are present Follow normal processing procedures. The case should be annotated with the route criteria and the RIVO processing instructions should be left attached.
    RIVO returns the claim with instructions for the 1040-X team to work the case The processing instructions conflict with IRM instructions Send the case to AM. The case should be annotated with the issue that doesn't meet SP 1040-X criteria and the RIVO processing instructions should be left attached.
    RIVO returns the claim with instructions for the 1040-X team to work the case The case will be processed
    Note: If a Z freeze is present on the case, see IRM 3.11.6.7.12, Criminal Investigation (CI) Scheme Development Center (SDC) Screening.    		 Follow normal processing procedures and add "Per RIVO" in the remarks.
    RIVO returns the claim with instructions for the 1040-X team to send the case to Files   Input a TC 290 .00 and add "Per RIVO" in the remarks.

3.11.6.7.14 (01-02-2024)

Category A (CAT-A) Criteria Screening

  1. To determine if a case meets Category A (CAT-A) criteria, see IRM 21.5.3-2, Examination Criteria (CAT-A) - General, and IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits. "CAT-A criteria" cited refers to the amount of the tax decrease, credit increase, or certain other changes. Criteria apply to both refund and balance due returns. Only complete claims can be referred to CAT-A. A claim is considered complete if it has all information required to process the return.

  2. Only complete claims can be referred to CAT-A. A claim is considered complete if it has all information required to process the return. If the claim is incomplete, correspond following IRM 3.11.6.10, Correspondence Procedures.

    Caution:

    If the response to the correspondence is incomplete, send the claim to CAT-A.

  3. When screening a case for CAT-A criteria, ensure the change isolated from any other change on the return meets the criteria listed.

  4. If a CAT-A criteria is met and there is an increase to Earned Income Tax Credit (EITC), unless a CAT-A EITC exception is present, screen the case through CC DDBCK. If the case is selected, follow DDBCK Selected procedures in IRM 3.11.6.13.4 (7), Command Code DDBCK (Dependent Database Check). If the case is not selected, send the case to CAT-A.

  5. Don't apply CAT-A criteria to:

    • Combat Zone returns when the TP is actively serving in a Combat Zone. See IRM 3.11.6.16.4, Combat Zone

    • CP notices

    • Credits that are being disallowed

    • Credits that are being reduced below the CAT-A tolerance due to master file or math verification

  6. If the case is being forwarded to CAT-A, do not input a TC 971 AC 013.

  7. If a dependent’s TIN is being changed from an ITIN to SSN, follow IRM 3.11.6.13.1, Revoking a Dependent’s ITIN, before sending the claim to CAT-A.

  8. If the claim meeting CAT-A criteria is complete, follow the table.

    If ... Then ...
    The CAT-A issue meets SP criteria Suspend the case to CAT-A.

    Caution:

    If Schedule C meets CAT-A criteria and EIC is increasing, input CC DDBCK to check the validation results prior to referring the case to CAT-A.
    The CAT-A issue doesn’t meet SP 1040-X criteria Send to AM as Out of Scope. Follow IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2, MEFP Reassignment and Reroute Guide, as appropriate.
    An AUR criteria is present per IRM 3.11.6.7.15, Automated Underreporter (AUR) Screening Send to AUR following IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2, MEFP Reassignment and Reroute Guide, as appropriate.
    There’s also an out-of-scope issue present on the case Send to AM as Out of Scope. Follow IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2, MEFP Reassignment and Reroute Guide, as appropriate.

3.11.6.7.15 (02-17-2023)

Automated Underreporter (AUR) Screening

  1. When working accounts with Automated Underreporter (AUR) involvement, research the account to determine where the account is in the AUR process. This can be determined by reviewing the AUR Process Code (PC) listed under the Transaction Code (TC) 922 on the account. The status of an AUR case is determined by the last PC posted. Use the table below when determining if the PC meets routing requirements to AUR.

    Note:

    The process codes are the two-digit numbers below the TC 922.

    If the last TC 922 process code is: Then
    No process code (PC) is shown or any PC not listed below Process as normal.
    01, 03, 06 Process as normal.
    09 Process as normal.
    07, 19, or 49 Process as normal.
    10 –14, 16, or 21 – 29 Process as normal.
    15 or 18 If the PC immediately preceding PC 15 or PC 18 is other than 01, 03, or 06, route as an open case. If the preceding PC isn't 01, 03, 06, process as normal.
    17 Route as ID Theft. See IRM 3.11.6.7.8, Identity Theft (IDT) Screening.
    35, 36, 38, 62–64, 66 or 82, 83, 85 or 86 Send the case to Exam per IRM 3.11.6.7.14, Examination Case Screening.
    44, 72 or 84 Send the case to AM.
    46, 65 or 76 Send the case to AM.
    80 Send the case to AM.
    30, 34, 54, 55, 57–60, 75, 77–79, 81, 95, 96, 97–99 Send the case to AUR as an open case.
    96 If there’s an open control to an AUR employee on IDRS, send the case to AUR as an open case. If there’s no open control, process as normal.
    47, 48, 51, 52, 70, 71, 73, 74, 91, 92 or 93 Process as normal.
    20, 39, 53, 67- 69, 87 - 90, or 94 Send as a reconsideration case.

  2. If an AUR case meets CAT-A criteria, don't send the case to CAT-A. The case must be sent to AUR for CAT-A determination.

  3. When sending a CII case to AUR, determine the routing destination by using the first two digits of the TC 922 DLN and follow the table below.

    If processing a ... And the AUR case is ... Then ...
    MEFP case An open case Follow the table in IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, and reroute per the AUR – Open Cases instructions.
    MEFP case A reconsideration case Follow the table in IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, and reroute per the AUR – Reconsideration Cases instructions.
    MEFS case An open case

    Caution:

    If the return is in the "Attached Files" and not in the "Document Images" section of the CII case, follow the MEFP instructions above.

    		 Follow the table in . IRM 3.11.6.9.2, MEFS Reassignment and Reroute Guide, and reroute per the AUR – Open Cases instructions.
    MEFS case A reconsideration case

    Caution:

    If the return is in the "Attached Files" and not in the "Document Images" section of the CII case, follow the MEFP instructions above.

    		 Follow the table in IRM 3.11.6.9.2, MEFS Reassignment and Reroute Guide, and reroute per the AUR – Reconsideration Cases instructions.

3.11.6.7.16 (01-02-2024)

Accounts Management Case Screening

  1. Cases are sent to Accounts Management (AM) based on the issue, the dollar tolerance, IDRS conditions, and other various reasons.

  2. A TC 150 must be posted before sending a case to AM, unless specific instructions are provided.

  3. Don't input a TC 971 AC 010 when routing a case to AM.

  4. If there’s an open case to AM, send the case to AM.

  5. Send cases to Accounts Management for a Manual Refund if:

    1. The taxpayer requests the refund issued in a name other than shown on master file.

    2. The taxpayer requests the refund issued to a temporary address.

    3. Refund is less than one dollar.

    4. Refund is $10 million or more.

  6. SP 1040-X tax examiners process cases using CII, and during processing, CII imaged returns might be generated. Use the table below to determine how to process CII imaged returns:

    If the CII image originated from... Then ...
    Another area Send the case to AM.

    Exception:

    If a CII imaged return is notated "Process as Original (PAO)" or similar verbiage and there's not a TC 150 posted or pending, then send the case to Batching. When needed, use the Prior Year and Conversion Form 1040 Edit Sheet for Tax Year YYYY. If the case is for the current year and the conversion form isn't available, then "dummy" a current year Form 1040 for processing.
    SP 1040-X Process following normal procedures.

3.11.6.7.17 (01-02-2024)

Open Case and Open Control Base Screening

  1. Generally, if an account has an open control base on CC TXMOD you’ll send the return to the assigned employee or a specified department. An open case can be in any of the following status: "A" Active; "B" Background; "S" Suspense; or "M" Monitor.

    Note:

    Don't route cases that are open in CC ENMOD.

  2. Cases in A or S status should be routed based on the ASSIGN-TO field of the open control.

  3. Don't send cases open in B or M status; continue to process if routing criteria isn't present.

  4. The following exceptions apply to A, B, S, and M status:

    1. If the open control is in B status due to a P- freeze/TC 841 and the case is a net refund, then send the case to AM.

    2. Refer cases with a category code NLUN to the assigned IDRS number to process.

    3. Cases open to Accounts Management should be sent to AM. See (7) below to identify Accounts Management cases, more Accounts Management routing criteria might be identified through research found in (6) below.

    4. For cases open to a 1040X SP employee see IRM 3.11.6.7.17.1, Cases Open to an SP 1040-X Tax Examiner.

    5. Cases open to RIVO AQC or QRPA should be screened following IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

    6. For cases that are processable place the case in B status, input the adjustment, and then return it to its original status.

    7. Cases with Activity 9465 should be placed in "B" status and processed.

    8. Cases controlled to Appeals IDRS number 66XXX, send the case to AM.

    9. AUR controlled cases should be screened following IRM 3.11.6.7.15, Automated Underreporter (AUR) Screening.

  5. If the open control is assigned to your current or previous IDRS number, close your open control before continuing to take any action on the return.

  6. Use CC MESSG or the IDRS Unit and USR Database, IUUD, web site to determine the appropriate campus location and stop number based on the IDRS number in the ASSIGN-TO field of the open control.

    Note:

    If unable to locate the stop number, see your lead.

  7. Accounts Management IDRS numbers are identified by the service center two-digit code and 301-399 series. For instance, a Customer Service Representative (CSR) in Kansas City would be 093XX. Submission Processing 1040X Units use the SC code and the 200-244 series. This includes cases open to the AM suspense queue that don't contain 301-399 series:

    Campus Generic IDRS number
    Atlanta 0739900025
    Andover 0848900000
    Austin 0686100000
    Brookhaven 0138640000
    Cincinnati 0237500000
    Fresno 1042000000
    Kansas City 0938000000

    Reminder:

    This number is also used by SP 1040-X. See IRM 3.11.6.3, Controlling Cases on the Correspondence Imaging Inventory (CII) System.
    Memphis 0339300000
    Ogden 0439800000
    Philadelphia 0544300093

3.11.6.7.17.1 (01-02-2024)
Cases Open to an SP 1040-X Tax Examiner

  1. If there’s a CII case open to another 1040-X SP tax examiner (TE) for the same tax year, reassign the case to the SP 1040-X TE with the oldest case control. If the other open case is in suspense to a SP 1040-X TE, refer your case to your lead or manager. The lead or manager must ensure the case in suspense is the oldest case. If the case in suspense is the oldest case, the lead or manager must take the following action:
    a. Enter a case note that states, "Case reassigned to TE with the oldest case control."
    b. Reassign the case to the TE with the oldest case.

    Note:

    When using the CII auto-distribution function, cases for the same taxpayer are sent to the same TE.

  2. Ensure all open controls associated with the case(s) that you’re processing are closed. Associated cases are those that have an:

    • Open control to your local 1040-X department

    • Open XRET control base with an Activity that has a "SPX" designation and is assigned to a SP 1040-X employee or SP 1040-X queue

      Example:

      An Austin TE is working a MEFS case and notices there are two open controls. One of the open controls is for the MEFS case being worked, and the other is an XRET control assigned to the Kansas City generic queue. See Figure 3.11.6-1, The XRET Control and Open CII Case Match.

    Figure 3.11.6-1

    This is an Image: 33455001.gif

    Please click here for the text description of the image.

3.11.6.7.18 (01-02-2024)

All Other Claims Screening

  1. Screen cases for all other specialized routing conditions.

3.11.6.7.18.1 (01-02-2024)
Killed in Terrorist Action (KITA) Screening

  1. Send all claims identified (on the return or on IDRS) as Killed in Terrorist Action (KITA), Killed in Action (KIA) or Victim of Terrorist Attack to AM, notate "KITA" in the working trail.

    Note:

    The literal "KITA" appears on CC ENMOD, CC IMFOLE, CC TXMOD and CC SUMRY as an indicator.

  2. Other terminology may include:

    • Anthrax

    • Oklahoma City

    • IRC 104(a)

    • 9 / 11

    • 911 Disability

    • 911 Rescue Workers

    • Publication 3920

    • September 11th Victim Compensation Fund

    • Tax Forgiveness Victims of Terrorist Act

    • World Trade Center (WTC)

    • Zadroga Act

  3. Place a CC ACTON history item, "2KITA" , on CC TXMOD.

3.11.6.7.18.2 (01-09-2023)
Affordable Care Act and Possible Health Professional Claim Screening

  1. The Affordable Care Act enacted April 2010 expanded tax benefits for health professionals working in some communities. Health care professionals who received student loan relief under various state programs and work in under-served communities may qualify for refunds on their 2009 federal income tax returns. If you receive the Form 1040-X, Amended U.S. Individual Income Tax Return, referencing the "Excluded student loan amount under 2010 Health Care Act" , "Affordable Care Act" , or "Student Loan Forgiveness" , send the case to AM.

3.11.6.7.18.3 (02-17-2023)
Collection Function Case Screening

  1. All amended returns must be screened for the following collection function criteria.

    • Compliance Services Collection Operations (CSCO)

    • Automated Collection Systems (ACS)

    • Offer In Compromise (OIC)

    • Field Collection Cases

    • Automated Substitute For Return (ASFR) and Non-Filer Return (NFR)

  2. When sending a case to one of the Collection functions listed in paragraph 1 follow the table. If the entire return is being routed to one of the collection areas described in paragraph 1 above, input a TC 971 AC 012.

    If sending the case to... Then ...
    Compliance Services Collection Operations (CSCO) Send the case using e-fax to the number specified per IRM 3.11.6.7.18.3.1, Compliance Services Collection Operations (CSCO) Screening.
    Automated Collection Systems (ACS) Send the case using e-fax to the number specified per IRM 3.11.6.7.18.3.2, Automated Collection Systems (ACS) Screening.
    Offer In Compromise (OIC) Screening Send the case using e-fax to the number specified per IRM 3.11.6.7.18.3.3, Offer In Compromise (OIC) Screening.
    Field Collections Send the case using e-fax to the number specified per IRM 3.11.6.7.18.3.4, Field Collection Case Screening.
    Automated Substitute For Return (ASFR) and Non-Filer Return (NFR) Send the case using e-fax to the number specified per IRM 3.11.6.7.18.3.5, Automated Substitute For Return (ASFR) and Non-Filer Return (NFR) Screening.

3.11.6.7.18.3.1 (01-02-2024)
Compliance Services Collection Operations (CSCO) Screening

  1. The following must be detached from an amended return and sent to the Compliance Services Collection Operations (CSCO). See IRM 3.11.6.7.19.1, Working Trail and Action Trail, prior to sending to CSCO.

    1. Form 9465, Installment Agreement Request.

      Exception:

      Don't detach and send Form 9465 when:
      • Received with MeF amended returns (MEFP cases), continue processing. The MeF system automatically sends the CSCO a copy of the Form 9465. When Form 9465 is attached to a MeF case (MEFP case) as a PDF, a copy of the form must be sent to the CSCO.
      • When sending a case to be processed as an original.

    2. A written request for an Installment Agreement.

    3. CP 503 or CP 504, Taxpayer Notification of Federal Tax Not Received, with a statement of, or similar to:
      • Can’t pay
      • Won’t pay
      • Want to pay
      • Form 9465 is attached

      Caution:

      If the case status is 22 or 24 in the "SC-STS" field on CC TXMOD or "STATUS" field on CC IMFOLT or the "STAT HIS" on CC IMFOLI, follow IRM 3.11.6.7.18.3.2, Automated Collection Systems (ACS) Screening. If the case status is 26, follow IRM 3.11.6.7.18.3.4, Field Collection Case Screening.

    4. CP 523, Past Due Payment Default Notice.

    5. Form 433-D, Installment agreement.

  2. Take the following action if Form 15103, Form 1040 Return Delinquency, or CP 59, First Notice - Return Delinquency, Unfiled Tax Return(s), is present and is:

    1. Attached to an amended return: disregard.

    2. Attached to an original return: send the case to Batching.

  3. When sending a case to CSCO, take the following action:

    • Research the Business Operating Division (BOD) code using the CSCO addresses found on SERP to identify the correct Service Center

      Note:

      The BOD code will be SBSE or W&I and is located in the "BOD-CD" field of CC TXMODA.

    • Identify the appropriate Service Center based on the state in which the taxpayer resides

      Example:

      If the BOD code is W&I, and the taxpayer resides in TX, the case would be sent to the Atlanta Service Center.

  4. Follow the table below when a T- freeze is present.

    If ... Then ...
    There’s not a Letter 1058, CP 90 or notation such as:
    • Can’t pay
    • Won’t pay
    • Want to pay
    • Form 9465 is attached    		 Workable.
    A Letter 1058, CP 90 is attached and there’s notation such as:
    • Can’t pay
    • Won’t pay
    • Want to pay
    • Form 9465 is attached    		 See IRM 3.11.6.7.18.3.2, Automated Collection Systems (ACS) Screening.

3.11.6.7.18.3.2 (01-02-2024)
Automated Collection Systems (ACS) Screening

  1. When T- freeze is present, review the case status in the SC-STS field on CC TXMOD or STATUS field on CC IMFOLT or the STAT HIS on CC IMFOLI shows the case is in Status 22 or 24, follow the instructions below.

    And ... Then ...
    The IRS address is on the top of the letter

    • Detach the correspondence and send the case to the appropriate ACS support site based on the BOD-CD on CC TXMODA. The ACS support site can be found on SERP in the Who/Where tab under ACS Support and Status 22 TAS Liaisons.

    • Input TC 470, no closing code using CC REQ77.

    • Leave a working trail on the correspondence and the Form 1040-X. See IRM 3.11.6.7.19.1, Working Trail and Action Trail.

    • Continue processing Form 1040-X.
    The IRS address isn't on the top of the Letter 1058 and correspondence is attached

    Exception:

    If a letter or correspondence isn’t attached, continue processing Form 1040-X.

    • Research the appropriate ACS support site based on the BOD-CD on CC TXMODA. The ACS support site can be found on SERP in the Who/Where tab under ACS Support and Status 22 TAS Liaisons.

    • Detach the correspondence.

    • Input TC 470, no closing code, using CC REQ77.

    • Leave a working trail on the correspondence and the Form 1040-X. See IRM 3.11.6.7.19.1, Working Trail and Action Trail.

    • Mail the correspondence to the ACS Correspondence Address indicated on SERP.

    • Continue processing Form 1040-X.

  2. When sending a case to ACS, take the following action:

    • Research the Business Operating Division (BOD) code using the ACS CDP Coordinators site found on SERP to identify the correct Service Center.

      Note:

      The BOD code will be SBSE or W&I and is located in the "BOD-CD" field of CC TXMODA.

    • Identify the appropriate Service Center based on the state in which the taxpayer resides.

      Example:

      If the BOD code is W&I, and the taxpayer resides in TX, the case would be routed to the Fresno Service Center.

3.11.6.7.18.3.3 (01-02-2024)
Offer In Compromise (OIC) Screening

  1. The following should be sent to OIC if a -Y freeze is present on the module.

    If ... Then ...
    There’s an unreversed TC 480 on the module but no TC 780. The case is workable.
    There’s an unreversed TC 480 on the module and a TC 780. Send the case to the appropriate campus based on the Monitoring Offer in Compromise (MOIC) Compliance Campus Locations for Offers in Compromise. Offer-in-Compromise (OIC) Compliance Campus Locations for the Monitoring of Accepted Offers

  2. When sending a case to OIC, take the following action:

    • Offer-in-Compromise (OIC) Compliance Campus Locations for the Monitoring of Accepted Offers found on SERP to identify the correct Service Center.

    • Identify the appropriate Service Center based on the state in which the taxpayer resides.

      Example:

      If the taxpayer resides in TX, the case would be sent to the Memphis Service Center.

3.11.6.7.18.3.4 (01-02-2024)
Field Collection Case Screening

  1. When T- freeze is present, review the case status in the SC-STS field on CC TXMOD or STATUS field on CC IMFOLT or the STAT HIS on CC IMFOLI shows the case is in status 26, follow the instructions below.

    If ... Then ...
    The last four digits of the Collection-Asgmt>field is 8000 (xxx8000).

    Note:

    The Collection-Asgmt>field is located at the top right-hand side of CC TXMOD.

    		 Take the following action:

    • Research the first two digits of the DLN using the following link to determine where the case must be sent.
      ASFR Centralized Processing Sites

    • Input a TC 971 AC 012.
      Exception: Don't send returns with imminent or expired ASED. Suspend the case to Statute per IRM 3.11.6.7.9, Statute Review Screening.
    The last four digits of the Collection-Asgmt>field isn't 8000 (xxx8000). Take the following action:

    • Research the appropriate Revenue Officer Group office address using the following link.
      RO by TSIGN/ZIP/STATE

    • Input TC 470, no closing code, using CC REQ77.

    • Input TC 971 AC 012.

    • Send the entire case to the address obtained from SERP.

    Note:

    If the Revenue Officer (RO) inquires why the 1040-X was sent to them, explain we can't process the amended return without their approval since it’s assigned to them.

  2. When sending a case to Field Collections, take the following action:

    • If the Collection-Asgmt>field is 8000 (xxx8000), research the first two digits of the DLN using the following link to determine where the case must be sent. ASFR Centralized Processing Sites

    • If the last four digits of the Collection-Asgmt>field isn't 8000 (xxx8000)

    • Research the appropriate Revenue Officer Group office address using the following link. RO by TSIGN/ZIP/STATE

3.11.6.7.18.3.5 (01-09-2023)
Automated Substitute For Return (ASFR) and Non-Filer Return (NFR) Screening

  1. ASFR returns are prepared by an IRS employee under IRC 6020(b) when a taxpayer fails to file. The taxpayer is given the opportunity to file a valid voluntary return to correct the proposed assessment, or to agree to the proposed assessment. A NFR is a return that’s received in the Service after the posting of the TC 150 Dummy SFR but prior to the issuance of the Initial Contact Letter (ICL) by Exam.

    Note:

    For more information on SFR returns, see IRM 21.5.3.4.10, Returns Prepared Under IRC Section 6020(b). For more information on NFR returns, see IRM 21.5.3.4.10.1, Non-Filer Reject Returns.

  2. When sending a case to ASFR or NFR:

    1. ASFR cases are sent to one of the following areas per paragraph 5 below:
      - Exam per IRM 3.11.6.7.10, Examination Case Screening
      - CSCO per IRM 3.11.6.7.18.3.1, Compliance Services Collection Operations (CSCO) Screening.

    2. NFR cases are sent to one of the following areas per paragraph 5 below:
      - AM
      - The Fresno Campus ASFR unit.

  3. Identify returns for ASFR as follows:

    • CC TXMOD - The TC 150 for .00 has the literal "SFR" to the right of the Document Locator Number (DLN).

    • CC IMFOLI - The "Vestigial:" field has the literal "SUBST4" .

  4. Identity returns for NFR as follow:

    • A TC 976 is present

      Note:

      Not all NFR returns include a Transaction Code (TC) 976 on the module.

    • CC TXMOD - The TC 150 has the literal "SFR" to the right of the Document Locator Number (DLN).

    • AIMS status of 08 or less. (open TC 420/424).

    • AIMS Status 90 with a Non-Examined Disposal Code.

      Note:

      Refer to Examination Disposal codes, for a complete list of Non-Examined Disposal Codes

    • Some cases have the letters NFR across the front of the return.

  5. Route ASFR and NFR returns per the table below:

    If ... And ... Then ...
    SFR returns There’s an unreversed TC 420 and a -L freeze

    Exception:

    If CC AMDISA status is 08 or less then see Non-filer Reject below.

    		 See IRM 3.11.6.7.10, Examination Case Screening.
    SFR returns There’s an unreversed TC 420 present Send the case to CSCO per IRM 3.11.6.7.18.3.1, Compliance Services Collection Operations (CSCO) Screening, and input a TC 971 AC 012.
    NFR returns Identified per paragraph 2 above Send the case to AM.
    Posted TC 599 cc 89 on CC TXMODA   Send the case to AM.
    Posted TC 599 cc 88 on CC TXMODA Without a subsequent TC 599 cc 89

    • If working a CII case, fax the case≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
      Reminder: Input TC 971 AC 012.

    • If working paper, send the case to:
      Fresno Campus
      ASFR Unit Stop 81304
      5045 E Butler Ave
      Fresno, CA 93727
      Reminder: Input TC 971 AC 012.

3.11.6.7.19 (01-02-2024)

Releasing Screened Returns

  1. All SP 1040-X cases are screened and released in the Correspondence Imaging Inventory (CII) system.

3.11.6.7.19.1 (01-02-2024)
Working Trail and Action Trail

  1. When sending a case, detachment, or prepared form to another area, a working trail or action trail is required.

  2. If any of the following elements are missing, edit the missing element(s) on the return, form, schedule, notice, or prepared form.

    Exception:

    Don't edit Personally Identifiable Information (PII) on detached forms that belong to different taxpayers.

    1. Taxpayer's name

    2. Taxpayer's address

    3. Taxpayer Identification Number (TIN), (e.g., SSN, IRSN, ITIN)

    4. Received date

    5. Tax Year

    6. TE number

    7. Annotate the CII Case Id next to your TE Number.

    8. Annotate "CII Image- Don't correspond for signature" or Edit "MeF Return - Don't correspond for signature" in the signature area if the case is signed as appropriate.

  3. Official Use Only (OUO) information mustn’t be included in a working trail, action trail, or CII case note. If you're unsure how to identify OUO, see your lead or manager.

3.11.6.7.19.1.1 (01-02-2024)
Working Trails and Action Trails When Reassigning a Case

  1. When reassigning an entire case, input a CII case note.

  2. When the entire case isn’t being reassigned, follow the table.

    If ... Then ...
    Detaching a form, schedule, or notice from a return

    1. Input a CII case note that specifies:

      1. Detached item description.

      2. Routing destination of detachment.

    2. Complete Form 12305, Routing Slip, and include the CII case number the form, schedule, or notice was detached from.
    Preparing a form or schedule

    1. Input a CII case note that specifies:

      1. The prepared item.

      2. Routing destination of the prepared item.

    2. Complete Form 12305, Routing Slip, and include the CII case number used to prepare the form or schedule.

3.11.6.7.19.1.2 (01-02-2024)
Working Trails and Action Trails When Rerouting a Case

  1. A CII case, a portion of a case, or a prepared document rerouted through CII is converted to paper for the receiving area.

  2. When rerouting an entire case, input a CII case note and complete the Routing Slip Data screen.

  3. When using the Reroute EITC, or Reroute Exam functions, input a CII case note and complete the Routing Slip Data screen as appropriate.

  4. When a portion of a case, or a prepared document, is being rerouted, see IRM 3.11.6.7.19.1.3, Working Trails and Action Trails When Sending an E-fax or Secure Message.

3.11.6.7.19.1.3 (01-02-2024)
Working Trails and Action Trails When Sending an E-fax or Secure Message

  1. When a CII case, a portion of a case, or a prepared document is being sent to the receiving area via e-fax or secure messaging, follow the table.

    If ... Then ...
    Detaching a form, schedule, or notice from a return

    1. Input a CII case note that specifies:

      1. Detached item description.

      2. Routing destination of detachment.

      3. The method used, e-fax or secure message.
        Example:Form 9465 sent via e-fax to CSCO on 01/02/202X.
        Exception: If routing to OFE, input a case message and not a case note.

    2. Complete Form 12305, Routing Slip. When filling out the Remarks section include the following:

      1. CII Case ID number.

      2. The number of pages being sent to the receiving area.

      3. The method used, e-fax or secure message.
    Preparing a form or schedule

    1. Input a CII case note that specifies:

      1. Detached item description.

      2. Routing destination of detachment.

      3. The method used, e-fax or secure message.
        Example:Form 9465 sent via e-fax to CSCO on 01/02/202X.
        Exception: If routing to OFE, input a case message and not a case note.

    2. Complete Form 12305, Routing Slip. When filling out the Remarks section include the following:

      1. CII Case ID number.

      2. The number of pages being sent to the receiving area.

      3. The method used, e-fax or secure message.

3.11.6.7.19.2 (01-02-2024)
Transaction Code (TC) 971 and Action Codes

  1. A TC 971, when input with one of the action codes (AC) below, indicates the taxpayer filed an amended return and begins an action trail for the document. The action code indicates where the return was routed. Since some of these actions generate a TC 977 on master file and a -A or E- freeze on IDRS, the received date of the Form 1040-X must be input for the transaction date. If you’re only routing correspondence or a form attached to a Form 1040-X , you generally don't need to enter an action code unless instructed to do so.

  2. The most common TC 971 action codes are:

    Action Code Description
    002 Used when routing a return with No TC 150 to Batching to prevent the E- Freeze from switching to a -A Freeze when the return posts.
    010 MeF amended returns, scanned cases processed in SP, and paper filed amended return claims forwarded to Accounts Management (Automatically input by CII).
    012 Collection (When routing the entire return).
    013 Exam or Frivolous.
    014 Statute function .
    015 Underreporter function.
    016 Destination International Cases amended returns/claims go to Philadelphia (Automatically input by CII).
    065 Form 8857, Request for Innocent Spouse Relief (and Separation of Liability and Equitable Relief), filed. Send the case to Covington, KY. (Input by Cincinnati Centralized Innocent Spouse Operation).
    071 Form 8379, Injured Spouse Claim and Allocation.
    111 ID Theft.
    113 Total AOTC, CTC and/or EIC amounts that were disallowed due to the PATH Act.
    120 Amended return/claim in Submission Processing.
    123 Unemployment Compensation Exclusion Recovery can be identified by the MISC field entry, UCERECOVERY03112021. See IRM 3.11.6.14.1.1.3, Unemployment Compensation Exclusion (UCE) - Tax Year 2020 Only (Line 1).
    134 RIVO or CI SDC. See IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.
    137 Refer to IRM 3.11.6.12.1, Entity Changes.
    192 Schedule LEP, Request for Alternative Language Products by Taxpayers With Limited English Proficiency (LEP). See IRM 3.11.6.12.2, Schedule LEP, Request for Change in Language Preference.
    592 Form 9000, Alternate Media Preference. See IRM 3.11.6.12.3, Form 9000, Alternative Media Preference.
    698 Form 8938, Statement of Foreign Financial Assets, attached to Form 1040-X. See IRM 3.11.6.16.13, Form 8938, Statement of Foreign Financial Assets.

    Note:

    For further information, see TC 971 action codes in Document 6209, IRS Processing Codes and Information, Section 8C, Master File Codes.

3.11.6.8 (01-02-2024)

1040-X Routing Guide

  1. Dollar ($) Tolerance is the change to Total Tax (line 11) unless otherwise indicated. CAT-A tolerances refer to Total Tax decrease as a direct result of the specific condition without regard to the module balance.

  2. If an IRM subsection and the Routing Guide contain conflicting information, the specific section instructions take precedence over the general instructions contained in the Routing Guide.

  3. When multiple routing conditions are present, see IRM 3.11.6.7, Sorting, Routing, and Priority Screening. The Maildex IRM 3.10.72, Receiving, Extracting, and Sorting, contains a complete list of forms, letters, CPs and their routing.

  4. If unable to locate instructions for a specific form in this IRM, check the Maildex/Correspondex for handling instructions. The Maildex IRM 3.10.72-1, Routing Guide/Local Maildex, contains instructions for forms and CPs while IRM 3.10.72-2, Correspondex C Letters – Routing Guide, contains instructions for correspondence.

  5. Routing criteria is located throughout this IRM. This Routing Guide is a reference list of forms, schedules, documents, and tolerances that have route out criteria not mentioned elsewhere. Specifically, lists of routing criteria are found in:

    • IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening

    • IRM 3.11.6.7.11, Frivolous Claims Screening

    • IRM 3.11.6.7.3, International Return Screening

    • IRM 3.11.6.15.1, Freeze Codes

    • IRM 3.11.6.15.2, IDRS Transaction Codes

  6. The common "When to Route" conditions in the Routing Guide are defined as follows:

    • Always: If the conditions are met, route without regard of any changes to the taxpayer’s figures even if the condition doesn't appear amended.

    • If Changing: There must be a change to the dollar amount reported on the tax return. This doesn't include changes within the Form or Schedule that have no effect on the outcome.

    • See IRM 3.11.6.X.X: Review the IRM reference for specific instructions prior to routing.

    • All other situations should fully describe the appropriate "Route if" condition.

  7. The following table contains routing instructions for cases not worked by SP 1040-X.

    Condition When to Route Where to Route
    Age discrimination claims (IRC 104(a)(2)) Always AM
    Alimony paid deduction (TIN of recipient provided) If changing AM
    Archer MSA ( Form 8853) Always AM
    Basket Option Transactions

    • Filed under Notice 2015-73

    • Filed under Notice 2015-74

    		 Always AM
    Claim reducing capital gain preference items for the Alternative Minimum Tax (AMT) (PL 99-272) If changing AM
    Clean-Fuel Vehicle - (IRC 179A) Always AM
    CP 2000

    Reminder:

    Check last process code of the TC 922

    		 See IRM 3.11.6.7.15, Automated Underreporter (AUR) Screening. Underreporter
    CP 2006

    Reminder:

    Check last process code of the TC 922

    		 See IRM 3.11.6.7.15, Automated Underreporter (AUR) Screening. Underreporter
    CP 2501

    Reminder:

    Check last process code of the TC 922

    		 See IRM 3.11.6.7.15, Automated Underreporter (AUR) Screening Underreporter
    Disabled Combat Veteran, Combat Injured Veteran (or similar),
    Letter 6060-A or Letter 6060-D letter attached
    (taxable to nontaxable)
    Disability Severance Pay
    Military Retirement
    Military Disability Pay
    VA Claim
    St. Clair vs US
    Strickland Claim    		 Always AM
    Domestic Production Activities Deduction (Form 8903) Always AM
    Erroneous Refunds Always AM
    Examination Classification Disallowed or Rejected Always AM
    Excess Contributions to an IRA Always AM
    Exonerated Prisoner, Incarceration Exclusion PATH Act, or similar notation Always Send the case to AM with EXPR as the working trail
    Extraterritorial Income exclusion (Form 8873) Always AM
    Fiscal Year Filer Always AM
    Form 499/W-2PR/W-3PR Withholding Statement Always AM
    Form 843, Claim for Refund and Request for Abatement Always AM
    Form 926, Return by a U.S. Transferrer of Property to a Foreign Corporation Always AM
    Form 965 or IRC 965 notated Always AM
    Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) Always AM
    Form 1099-Q, Payments from Qualified Education Programs Always AM
    Form 1116, Foreign Tax Credit

    Note:

    If Form 1118, Foreign Tax Credit - Corporations, is attached, always send the case to AM

    		 Always AM
    Form 1310, Statement of Person Claiming Refund Due to a Deceased Taxpayer Always AM
    Form 2159, Payroll Deduction Agreement Always Detach Form from the amended return and send the case to Collection Operation.
    Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen Always AM
    Form 3115, Application for Changing in Account Method Always AM
    Form 3911, Taxpayer Statement Regarding Refund Always Detach and send the case to Refund Inquiry.
    Form 3949, Information Report Referral Always Detach and send the case to your local function based on the checked box on line 9-14 on the second page.
    Form 3949-A, Information Referral Always Send the case to OSC
    Mail Stop: 6273
    Form 4137, Social Security and Medicare Tax on Unreported Tip Income Always AM
    Form 5405, First Time Home Buyer Credit Recapture/Repayment Always AM
    Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations Always AM
    Form 5884-B, New Hire Retention Credit Always AM
    Form 8288, Withholding on Distributions by Foreign Persons of U.S. Real Property Interests Always AM
    Form 8288-A, Withholding on Distributions by Foreign Persons of U.S. Real Property Interests Always AM
    Form 8288-B, Withholding on Distributions by Foreign Persons of U.S. Real Property Interests Always AM
    Form 8615, Tax for Certain Children Who Have Unearned Income Always AM
    Form 8801, Credit Paid for Prior Year Minimum Tax Always AM
    Form 8839, Qualified Adoption Expenses Always AM
    Form 8853, Archer MSAs and Long-Term Care Insurance Always AM
    Form 8854, Initial and Annual Expatriation Information Statement Always AM
    Form 8859, District of Columbia First-Time Home Buyer Credit Always AM
    Form 8862, Information To Claim Certain Refundable Credits After Disallowance Always AM
    Form 8873, Extraterritorial Income Exclusion Always AM
    Form 8885, Health Coverage Tax Credit Always AM with HCTC in the working trail.
    Form 8889, Health Savings Account Always AM
    Form 8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans Always AM
    Form 8903, Domestic Production Activities Deduction Always AM
    Form 8915-A, Qualified 2016 Disaster Retirement Plan Distributions and Repayments Always AM
    Form 8915-B, Qualified 2017 Disaster Retirement Plan Distributions and Repayments Always AM
    Form 8915-C, Qualified 2018 Disaster Retirement Plan Distributions and Repayments Always AM
    Form 8915-D, Qualified 2019 Disaster Retirement Plan Distributions and Repayments Always AM
    Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments Always AM
    Form 8915-F, Qualified 2021 Disaster Retirement Plan Distributions and Repayments Always AM
    Form 8919, Uncollected Social Security and Medicare Tax on Wages Always AM
    Form 8939, Allocation of Increase in Basis for Property Received from a Decedent Always Process the amended return as normal. Send Form 8939 to:
    Estate and Gift Tax Operation
    Internal Revenue Service
    201 W Rivercenter Blvd
    Covington, KY 41011
    Attn.: Stop 824G
    Form 8959, Additional Medicare Tax Always AM
    Form 8960, Net Investment Income Tax Always AM

    Caution:

    Screen the case for CAT-A criteria. See IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.
    Form 8962, Premium Tax Credit (PTC) Always AM and notate in the working trail PTCX.
    Form 8994, FMLA Always AM
    Form 8996, Qualified Opportunity Fund Always AM
    Form 14157 Complaint: Tax Return Preparer

    Note:

    If Form 14157-A is also attached, follow the Form 14157-A procedures

    		 Always Send the case to: Attn: Return Preparer Office
    401 W Peachtree Street NW
    Mail Stop 421-D
    Atlanta, GA 30308
    Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit Always Route completed form along with any supporting information to AM.
    Fulbright Grantee Always AM
    Health Care Act excluding student loan amount Always AM
    Household Employee Income, Household Help, (HSH)

    • If the HSH amount is changing

    • HSH is present and there's a change to any credit

    		 AM
    "ICT/IVO" notation on the amended return or in the remarks Always Send the case to AM with "ICT/IVO" as the working trail. See IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.
    Immediate disallowance requested Always AM
    Insolvent Farmer If changing AM
    IRA Rollover If changing AM
    IRA Deduction If changing AM
    IRC 26 CFR 1.931.1 Always AM
    IRC 104(a)(2) – Claim that income from payments based on age discrimination are excludable Always AM
    IRC 134 – Claim that compensation as JROTC instructors is tax exempt Always AM
    IRC 179A – Clean Fuel Vehicle Always AM
    IRC 301 – Veteran’s Disability Compensation is excluded from gross income (This includes St Clair vs. US claims, IRS Ruling 80-9)
    CSRC or CDRP
    X% disabled (or VA disability X%)
    taxable to non-taxable
    Strickland Claim
    Pub 525    		 Always AM
    IRC 692 – Federal Income Tax Forgiveness for Certain U.S. Military and Civilian Employees and Other Individuals Always AM with KITA as a working trail.
    IRC 803 – Victims of Nazi Regime Always AM
    IRC 911, IRC 913, IRC 931, or IRC 933 Always AM
    IRC 1341 – Repayments of Debt Cancellation Always AM
    "Letter 6173" , "Letter 6174" , "Letter 6174-A" , "Digital Assets" (e.g., Virtual Currency or Crypto) Always AM
    Lottery Winnings (lump sum payment change from ordinary income to capital gain) Always AM
    Lump sum payment excluded from income Always AM
    Manual adjustment to penalties and/or interest on tax liabilities. Not adjustment for ES Penalties (TC170/176). Always AM
    Maritime Claims

    1. With a breakdown of days, localities, and rates

    2. Without a breakdown of days, localities, and rates

    1. See IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

    2. All others

    1. CAT-A

    2. AM
    May Dept. Store vs. Sequa Rev. Rul. 99-40 Always AM
    Medical/Dental Resident FICA Claims, includes:

    • Mayo Clinic

    • Minnesota vs. Apfel

    		 Always AM
    "Microcaptive" Always Send the case to:
    Internal Revenue Service
    2970 Market Street
    Philadelphia, PA 19104
    Misapplied Payment See IRM 3.11.6.14.3.2, Estimated Tax Payments (Line 13). AM
    Net Operating Loss (NOL) or any indication of an NOL loss If changing Carryback or Carryforward, refer to IRM 3.11.6.7.7, Carryback or Carryforward Screening.
    Pension Protection Act PL 109-280 Always AM
    Personal injury damages excluded from income (IRC 104(a)(2)) Always AM
    Pigford vs. USDA
    Pigford vs. other
    Black Farmers Suit
    Keepseagle vs. USDA
    Native Americans vs. USDA
    Pigford II vs. USDA    		 Always AM
    Police Meal Expense Always AM
    Public Law 99-272 Insolvent Farmer / AMT Always AM
    Public Safety Officer PSO Exclusion indicated on return Always AM
    Reconsideration Letter attached Always Input TC 971 AC 010.
    Send to:
    IRS Andover Campus
    310 Lowell St
    Andover, MA 01810
    Refund Less than $1.00 or greater than $10 million, always AM
    Refund Inquiry Always AM
    Registered Domestic partners (RDPs). Can also be identified as CCA201021050 or CCA. Another indication is Form 8958 is mentioned or attached. Always AM
    Resubmitted Claim/Re-submission or Appeal of a previously rejected claim Always AM
    Rev. Rul. 57-383 (Strike Fund Benefits Claim for Refund) Always AM
    Rollover of Airline Payments to Traditional IRAs If changing AM
    ROTH IRA If changing AM
    Safe Harbor Always AM
    Schedule H, Household Employment Taxes Always AM
    Seller Paid Points (also see Schedule A)

    • Claimed for tax period other than year of purchase

    • HUD-1 or Settlement Statement not attached

    • Loan origination fees, Loan discount, Discount Points, Paid Points, not mentioned on HUD-1 or Settlement Statement

    • Property taxes, appraisals, inspections, title, or attorney fees included as deductible points

    		 If changing AM
    Student Loan Forgiveness If changing AM
    Tax Equity and Fiscal Responsibility Act

    • TEFRA

    • Letter 3906

    • Letter 4505 (any)

    		 Always AM
    Treaty Trader Always AM

    • Tribal General Welfare Exclusion Act of 2014

    • General Welfare

    • H.R. 3043

    • Notice 2012–78

    • Revenue Procedure 2015–35

    		 Always OSPC
    1973 Rulon White Blvd.
    Ogden, UT 84201
    M/S 7700, Attn: GECS
    Unemployment compensation repayments Always AM
    United Mine Workers of America (UMWA) Refunds claimed for premiums paid If changing AM
    UDC - Unlawful Discrimination Claims, identified as a write in of "UDC" Always AM
    W-7, Application for IRS Individual Taxpayer Identification Number

    • Attached, or the taxpayer requests additional information to complete processing

    		 Always Austin Submission Processing Campus
    ITIN Operation
    Stop: AUSC 6090
    3651 S IH 35
    Austin, TX 78714-9342

    Note:

    Keep all documentation provided by the taxpayer with the application; this may include original passports and birth certificates.
    W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions (ATIN), is attached to a Form 1040-X Always Austin Submission Processing Campus
    Internal Revenue Service
    ATIN Unit
    3651 S IH 35
    Stop 6182
    Austin, TX 78767
    Walker Tax Court decision transportation expense tax deduction Always AM
    Williams Claims Always AM
    Zero Return- Transcription Error See IRM 21.4.1.4.1.2.2, Return Found - Processing Errors Identified AM
3.11.6.9 (01-02-2024)

1040-X Reassignment and Reroute Guides

  1. The MEFP and MEFS reassignment and reroute guides are used when sending CII cases to other areas. Each guide is specific to the category code of the case being processed.

    Note:

    When using the "Reroute" option in CII, a hardcopy of the case image, the case notes, if selected, and a a routing slip are printed.

    Caution:

    Reassigned cases that don't have a "valid AM CII combination" are rejected by AM and returned to the MEFP and MEFS AM rejected queue, and then to the TE for correction. See IRM 3.11.6.9.3, MEFP and MEFS Accounts Management Rejected Queue.

  2. Routing priority applies to reassigning and rerouting cases. When International is one of the routing conditions, refer to IRM 3.11.6.9.1 (2), 1040-X MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2 (2), 1040-X MEFS Reassignment and Reroute Guide, as appropriate.

  3. See IRM 3.11.6.7.19.1, Working Trail and Action Trail, prior to using the CII Reassign and Reroute functions.

3.11.6.9.1 (01-02-2024)

MEFP Reassignment and Reroute Guide

  1. Follow the instructions below when reassigning or rerouting a MEFP case.

  2. If International routing criteria per IRM 3.11.6.7.3, International Returns Screening, is present with one of the other routing conditions below, reassign the case based on the additional issue instructions.

    • Disaster Claim per IRM 3.11.6.7.6, Disaster Claim Screening

    • Carryback per IRM 3.11.6.7.7, Carryback and Carryforward Screening

    • Carryforward per IRM 3.11.6.7.7, Carryback and Carryforward Screening

    • Identity Theft per IRM 3.11.6.7.8, Identity Theft (IDT) Screening.

    • Injured Spouse per IRM 3.11.6.16.12, Form 8379, Injured Spouse Allocation.

    • Zero Return per IRM 21.4.1.4.1.2.2(1), Return Found - Processing Errors Identified.

    Example:

    If a case has both International and Carryback criteria, reassign the case per the Carryback International instructions in paragraph 4 below.

  3. When reassigning a case, don't close the open control base.

  4. When reassigning a case, update the case data per IRM 3.11.6.4.8, Updating Case Data, and follow the table below:

    Note:

    Update the required "MFT" , "Work Type" , "Function" , and "Statute Search" fields as appropriate

    Caution:

    If the case data is updated incorrectly, the case will be sent back to you for correction.

    If ... And ... Then ...
    Carryback Domestic Use:

    1. Doc Type "Carryback MeF" .

    2. Category "MEFC" .
      Exception: If Form 1045 or Form 1139 is attached, use:
      • Doc Type "Carryback"
      • Category "TENT" .

    3. Priority Code: Enter the appropriate priority code per the table in IRM 21.5.1.5.2, Cases Currently Assigned in CII.
    Carryback International Use:

    1. Work Type "IMF INTL" .

    2. Doc Type "Carryback MEF" .

    3. Category "MEFR" .
      Exception: If Form 1045 or Form 1139 is attached, use:
      • Doc Type "Carryback"
      • Category "ITCB" .

    4. Priority Code: Enter the appropriate priority code per the table in IRM 21.5.1.5.2, Cases Currently Assigned in CII.
    Carryforward Domestic Use:

    1. Doc Type "Carryforward" .

    2. Category "CFWD" .
    Carryforward International Use:

    1. Work Type "IMF INTL"

    2. Doc Type "Carryforward" .

    3. Category "ICFD" .
    CAT-A The CAT-A issue would normally meet SP criteria. Suspend to CAT-A. Don’t change the:

    • Doc Type Don't change.

    • Category Don't change.
    CAT-A The CAT-A issue would normally meet SP criteria if the tolerance wasn't met, and there's also an out-of-scope issue present on the case. See Out of Scope below.
    CAT-A The CAT-A issue would not normally meet SP criteria. See Out of Scope below.
    CAT-A There’s an open AUR case that meets CAT-A criteria. See paragraph 6 below.
    Combat Injured Veterans Tax Fairness Act of 2016, St Clair Claims - SPC8   Use:

    1. Doc Type "1040X Veteran Claim" .

    2. Category "VRET" .
    Disaster Claim Domestic Use:

    1. Doc Type "1040X" .

    2. Category "DSTR" or "KATX" per IRM 3.11.6.7.6, Disaster Claim Screening.
    Disaster Claim International Use:

    1. Doc Type "1040X" .

    2. Category "DSTR" or "KATX" per IRM 3.11.6.7.6, Disaster Claim Screening.
    Form 14039 Non-tax related (English) Use:

    1. Doc Type "ID Theft IDT4" .

    2. Category "IDT4" .
    Identity Theft Domestic - Taxpayer Identified Use:

    1. Doc Type "ID Theft IDT1" .

    2. Category "IDT1" .
    Identity Theft Domestic- IRS Identified. Use:

    1. Doc Type "ID Theft IDT3" .

    2. Category "IDT3" .
    Identity Theft International- Taxpayer Identified. Use:

    1. Doc Type "ID Theft IDT1" .

    2. Category "IDT1" .
    Identity Theft International- IRS Identified. Use:

    1. Doc Type "ID Theft IDT3" .

    2. Category "IDT3" .
    Injured Spouse Domestic Use:

    1. Doc Type "Injured Spouse Claim" .

    2. Category "DMFC" .

    3. Program Code "97140" .
    Injured Spouse International Use:

    1. Doc Type "Injured Spouse Claim" .

    2. Category "DMFC" .

    3. Program Code "97140" .
    International Carryback See Carryback above.
    International Carryforward See Carryforward above.
    International Identity Theft See Identity Theft above.
    International Injured Spouse See Injured Spouse above.
    International Zero Return See Zero Return below.
    International Form 1040-X or Amended Form 1040 not meeting the criteria directly above. Use:

    1. Work Type "IMF INTL"

    2. Doc Type "1040X MEF" .

    3. Category "MEFI" .

    4. Campus "PSC" .

    5. Reassign.
    IRC 965 IRC 965 is mentioned or Form 965 is attached. Use:

    1. Doc Type "IRC 965 1040X" .

    2. Category "965X" .
    KITA   Use:

    1. Doc Type "1040X" .

    2. Category "KITA" .
    Out of Scope   Use:

    1. Doc Type "1040X MeF" .

    2. Category "MEFA" .
    Premium Tax Credit   Use:

    1. Doc Type "ACA-1040X" .

    2. Category "ACAX" .

    3. Program Code "40320" .

    4. Reassign to the "MEFS/MEFP" Out of Scope queue.
    Scrambled SSN cases   Use:

    1. Doc Type "1040X" .

    2. Category "SCRM" .
    TAS   Use:

    1. Doc Type "1040X MEF" .

    2. Category "MEFA" .
    VA Claims Veterans Disability Claims   Use:

    1. Doc Type "1040X Veteran Claim" .

    2. Category "VRET" .
    Zero Return- Transcription Error. Tax year 2018 only. See IRM 21.4.1.4.1.2.2 (1), Return Found - Processing Errors Identified. Domestic Use:

    1. Doc Type "1040X" .

    2. Category "SPC5" .
    Zero Return- Transcription Error. Tax year 2018 only. See IRM 21.4.1.4.1.2.2(1), Return Found - Processing Errors Identified. International Use:

    1. Doc Type "1040X" .

    2. Category "SPC5" .

  5. When reassigning a case, use the appropriate CSR queue number from the AM Site Specialization Temporary Holding Numbers list on the SERP that correlates to the Doc Type and Category from paragraph 3 above.

    Note:

    When reassigning a case to TAS, CAT-A, or Premium Tax Credit, use the Out of Scope CSR queue number.

    Exception:

    When reassigning a case to the International queue, select "PSC" in "Campus" field when updating the case data.

    Exception:

    When reassigning an open case to AM, use the CSR number in the" ASSIGN-TO" field of the open control. If the case is open to a generic AM queue, reassign the case to the Out of Scope (All Other Claims) queue.

  6. When rerouting a case, follow the table below:

    If ... Then ...
    Reroute EITC Follow IRM 3.11.6.13.4, Command Code DDBCK (Dependent Database Check).
    Reroute Exam

    1. Complete the "Exam Referral Data" section as follows:

      1. Complete the "To Stop number " field per IRM 3.11.6.7.10, Examination Case Screening.
        Note: If the "SBC" isn't all zeroes, input the address in the "Comments" field. If there's not a stop number available, input "N/A" in the "To Stop number field" .

      2. Complete the "From Stop number" field.

      3. Complete the "Phone number" field.

      Note:

      Some of these fields may populate by default.

    2. Complete the "Action" section as follows:

      1. Check the "Tax Decrease has NOT Been Made" check box.

      2. Check the "TC971-013" check box.

      3. Input a TC 971 AC 013 per IRM 3.11.6.7.10, Examination Case Screening.

    3. Complete the "Reason Referred" section as follows:

      1. Check the "Open AIMS" check box.

      2. Use CC AMDISA to complete the following:

        • EGC field.

        • Source Code field.

        • Status Code field.

        • Date field using the Current Status Code Date

      3. In the "Remarks" field, notate as follows: "The case is on Modernized e-File Return Request Display" .

    4. Select the appropriate campus from the "Print" drop-down menu and then click "Reroute" to send the case to Exam.
    AUR – Open Case

    1. Take the following action

      1. Print the return to pdf.

      2. Edit any required working trail information. Refer to IRM 3.11.6.7.19.1, Working Trail and Action Trail.

      3. Complete Form 12305, Routing Slip

      4. Send the Form 12305, Routing Slip, and the return to the appropriate fax number found in the AUR Addresses (Open Cases) list on SERP.

      5. Input a case note per IRM 3.11.6.9.4, MEFP and MEFS Secure Messaging and E-fax Routing.

      6. Input a TC 971 AC 015

      7. Close the CII case.
    AUR – Reconsideration

    1. Take the following action

      1. Print the return to pdf.

      2. Edit any required working trail information. Refer to IRM 3.11.6.7.19.1, Working Trail and Action Trail.

      3. Complete Form 12305, Routing Slip.

      4. Send the Form 12305, Routing Slip, and the return to the appropriate fax number found in the AUR Reconsideration list on SERP.

      5. Input a case note per IRM 3.11.6.9.4, MEFP and MEFS Secure Messaging and E-fax Routing.

      6. Input a TC 971 AC 015.

      7. Close the CII case.
    Reroute

    • CI/SDC

    • COLLECTIONS

    • ERS

    • FRIVOLOUS

    • RIVO

    • Any other area not listed.

    Exception:

    Some of the areas listed above may accept secure message or e-fax routing. See IRM 3.11.6.9.4, MEFP and MEFS Secure Messaging and E-fax Routing

    1. Complete the "Routing Slip Data" as follows:

      1. Complete the "To Stop number " field per the specific IRM subsection.

      2. Complete the "From Stop number" field.

      3. Complete the "Phone number" field.

      4. Complete the "Comments:" field, "The case is on Modernized e-File Return Request Display" . Add required working trail or action trail information.
        Note: Some of these fields may populate by default.

    2. Select the appropriate campus from the "Print" drop-down menu and then click "Reroute" .

  7. To send a MEFP case to Statute per IRM 3.11.6.7.9, Statute Review Screening, take the following actions:

    1. Select "2Statute" from the "Suspend" drop-down list.

    2. Click the tax increase/credit decrease check box, if appropriate.

    3. Complete the ASED field.

    Note:

    If Statute determines that they must work the case, they print a hardcopy for their use and return the case with instructions to close the case.

3.11.6.9.2 (01-02-2024)

MEFS Reassignment and Reroute Guide

  1. Follow the instructions below when reassigning or rerouting a MEFS case.

  2. If International routing criteria per IRM 3.11.6.7.3, International Return Screening, is present with one of the other routing conditions below, reassign the case based on the additional issue instructions.

    • Disaster Claim per IRM 3.11.6.7.6, Disaster Claim Screening

    • Carryback per IRM 3.11.6.7.7, Carryback and Carryforward Screening

    • Carryforward per IRM 3.11.6.7.7, Carryback and Carryforward Screening

    • Identity Theft per IRM 3.11.6.7.8, Identity Theft (IDT) Screening.

    • Injured Spouse per IRM 3.11.6.16.12, Form 8379, Injured Spouse Allocation.

    • Zero Return per IRM 21.4.1.4.1.2.2(1), Return Found - Processing Errors Identified.

    Example:

    If a case has both International and Carryback criteria, reassign the case per the Carryback International instructions in paragraph 4 below.

  3. When reassigning a case, don't close the open control base.

  4. When reassigning a case, update the case data per IRM 3.11.6.4.8, Updating Case Data, and follow the table below:

    Note:

    Update the required "MFT" , "Work Type" , "Function" , and "Statute Search" fields as appropriate

    Caution:

    If the case data is updated incorrectly, the case will be sent back to you for correction.

    If ... And ... Then ...
    Carryback Domestic Use:

    1. Doc Type "Carryback" .

    2. Category "RINT" .
      Exception: If Form 1045 or Form 1139 is attached, use Category "TENT" .

    3. Priority Code: Enter the appropriate priority code per the table in IRM 21.5.1.5.2, Cases Currently Assigned in CII.
    Carryback International Use:

    1. Work Type "IMF INTL" .

    2. Doc Type "Carryback" .

    3. Category "IRNT" .
      Exception: If Form 1045 or Form 1139 is attached, use Category "ITCB" .

    4. Priority Code: Enter the appropriate priority code per the table in IRM 21.5.1.5.2, Cases Currently Assigned in CII.
    Carryforward Domestic Use:

    1. Doc Type "Carryforward" .

    2. Category "CFWD" .
    Carryforward International Use:

    1. Work Type "IMF INTL"

    2. Doc Type "Carryforward" .

    3. Category "ICFD" .
    CAT-A The CAT-A issue would normally meet SP criteria. Suspend to CAT-A. Don’t change the:

    • Doc Type.

    • Category.
    CAT-A The CAT-A issue would normally meet SP criteria if the tolerance wasn't met, and there's also an out-of-scope issue present on the case. See Out of Scope below.
    CAT-A The CAT-A issue would not normally meet SP criteria. See Out of Scope below.
    CAT-A There’s an open AUR case that meets CAT-A criteria. See paragraph 6 below.
    Combat Injured Veterans Tax Fairness Act of 2016, St Clair Claims   Use:

    1. Doc Type "1040X Veteran Claim" .

    2. Category "VRET" .
    CP 08, CP 09, and CP 27 Notices   Use:

    1. Doc Type "Correspondence" .

    2. Category "TPRQ" .
    Disaster Claim Domestic Use:

    1. Doc Type "1040X" .

    2. Category "DSTR" or "KATX" per IRM 3.11.6.7.6, Disaster Claim Screening.
    Disaster Claim International Use:

    1. Doc Type "1040X" .

    2. Category "DSTR" or "KATX" per IRM 3.11.6.7.6, Disaster Claim Screening.
    Form 14039 Non-tax related (English) Use:

    1. Doc Type "ID Theft IDT4" .

    2. Category "IDT4" .
    Identity Theft Domestic - Taxpayer Identified. Use:

    1. Doc Type "ID Theft IDT1" .

    2. Category "IDT1" .
    Identity Theft Domestic- IRS Identified. Use:

    1. Doc Type "ID Theft IDT3" .

    2. Category "IDT3" .
    Identity Theft International- Taxpayer Identified. Use:

    1. Doc Type "ID Theft IDT1" .

    2. Category "IDT1" .
    Identity Theft International- IRS Identified. Use:

    1. Doc Type "ID Theft IDT3" .

    2. Category "IDT3" .
    Injured Spouse Domestic Use:

    1. Doc Type "Injured Spouse Claim" .

    2. Category "DMFC" .

    3. Program Code "97140" .
    Injured Spouse International Use:

    1. Doc Type "Injured Spouse Claim" .

    2. Category "DMFC" .

    3. Program Code "97140" .
    International Carryback See Carryback above.
    International Carryforward See Carryforward above.
    International Identity Theft See Identity Theft above.
    International Injured Spouse See Injured Spouse above.
    International Zero Return See Zero Return below.
    International Form 1040-X or Amended Form 1040 not meeting the criteria directly above. Use:

    1. Work Type "IMF INTL"

    2. Doc Type "1040X" .

    3. Category "IXRT" .

    4. Campus "PSC" .

    5. Reassign.
    IRC 965 IRC 965 is mentioned or Form 965 is attached. Use:

    1. Doc Type "IRC 965 1040X" .

    2. Category "965X" .
    KITA   Use:

    1. Doc Type "1040X" .

    2. Category "KITA" .
    Out of Scope   Use:

    1. Doc Type "1040X" .
      Exception: If the Category is "ACAX" , follow Premium Tax Credit below.

    2. Category "XRET" or "ACAX" per IRM 3.11.6.15.10, Category Codes.
    Premium Tax Credit   Use:

    1. Doc Type: "ACA-1040X" .

    2. Category "ACAX" .

    3. Program Code "40320" .

    4. Reassign to the "MEFS/MEFP" Out of Scope queue.
    Scrambled SSN cases   Use:

    1. Doc Type "1040X" .

    2. Category "SCRM" .
    TAS   Use:

    1. Doc Type "1040X" .

    2. Category "XRET" .
    VA Claims Veterans Disability Claims   Use:

    1. Doc Type "1040X Veteran Claim" .

    2. Category "VRET" .
    Zero Return- Transcription Error. Tax year 2018 only. See IRM 21.4.1.4.1.2.2 (1), Return Found - Processing Errors Identified. Domestic Use:

    1. Doc Type "1040X" .

    2. Category "SPC5" .
    Zero Return- Transcription Error. Tax year 2018 only. See IRM 21.4.1.4.1.2.2(1), Return Found - Processing Errors Identified. International Use:

    1. Doc Type "1040X" .

    2. Category "SPC5" .

  5. When reassigning a case, use the appropriate CSR queue number from the AM Site Specialization Temporary Holding Numbers list on the SERP that correlates to the Doc Type and Category from paragraph 3 above.

    Note:

    When reassigning a case to TAS, CAT-A, or Premium Tax Credit, use the Out of Scope Paper CSR queue number.

    Exception:

    When reassigning a case to the International queue, select "PSC" in "Campus" field when updating the case data.

    Exception:

    When reassigning an open case to AM, use the CSR number in the" ASSIGN-TO" field of the open control. If the case is open to a generic AM queue, reassign the case to the Out of Scope (All Other Claims) queue.

  6. When rerouting a case, follow the table below:

    If ... Then ...
    Reroute EITC Follow IRM 3.11.6.13.4, Command Code DDBCK (Dependent Database Check).
    Reroute Exam

    1. Complete the "Exam Referral Data" section as follows:

      1. Complete the "To Stop number " field per IRM 3.11.6.7.10, Examination Case Screening.
        Note: If the "SBC" isn't all zeroes, input the address in the "Comments" field. If there's not a stop number available, input "N/A" in the "To Stop number field" .

      2. Complete the "From Stop number" field.

      3. Complete the "Phone number" field.
        Note: Some of these fields may populate by default.

    2. Complete the "Action" section as follows:

      1. Check the "Tax Decrease has NOT Been Made" check box.

      2. Check the "TC971-013" check box.

      3. Input a TC 971 AC 013 per IRM 3.11.6.7.10, Examination Case Screening.

    3. Complete the "Reason Referred" section as follows:

      1. Check the "Open AIMS" check box.

      2. Use CC AMDISA to complete the following:

        • EGC field.

        • Source Code field.

        • Status Code field.

        • Date field using the Current Status Code Date.

    4. Select the appropriate campus from the "Print" drop-down menu and then click "Reroute" to send the case to Exam.
    AUR – Open Cases

    Caution:

    If the return is in the "Attached Files" section and not in the "Document Images" section of the CII case, follow the MEFP reroute instructions in IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide.

    1. Take the following action

      1. Edit any required working trail information. Refer to IRM 3.11.6.7.19.1, Working Trail and Action Trail.

      2. Input a TC 971 AC 015.

    2. Complete the "Routing Slip Data" as follows:

      1. Complete the "To Stop number " field per the AUR Addresses (Open Cases) list on SERP.

      2. Complete the "From Stop number" field.

      3. Complete the "Phone number" field.


      Note: Some of these fields may populate by default.

    3. Select the appropriate campus from the "Print" drop-down menu and then click "Reroute" .
    AUR – Reconsideration Cases

    Caution:

    If the return is in the "Attached Files" section and not in the "Document Images" section of the CII case, follow the MEFP reroute instructions in IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide.

    1. Take the following action

      1. Edit any required working trail information. Refer to IRM 3.11.6.7.19.1, Working Trail and Action Trail.

      2. Input a TC 971 AC 015.

    2. Complete the "Routing Slip Data" as follows:

      1. Complete the "To Stop number" field per the AUR Reconsideration list on SERP.

      2. Complete the "From Stop number" field.

      3. Complete the "Phone number" field.


      Note: Some of these fields may populate by default.

    3. Select the appropriate campus from the "Print" drop-down menu and then click "Reroute" .
    Reroute

    • CI/SDC

    • COLLECTIONS

    • ERS

    • FRIVOLOUS

    • RIVO

    • Any other area not listed.

    Exception:

    Some of the areas listed above may accept secure message or e-fax routing. See IRM 3.11.6.9.4, MEFP and MEFS Secure Messaging and E-fax Routing

    1. Complete the "Routing Slip Data" as follows:

      1. Complete the "To Stop number" field per the specific IRM subsection.

      2. Complete the "From Stop number" field.

      3. Complete the "Phone number" field.


      Note: Some of these fields may populate by default.

    2. Select the appropriate campus from the "Print" drop-down menu and then click "Reroute" .

  7. To send a MEFS case to Statute per IRM 3.11.6.7.9, Statute Review Screening, take the following actions:

    1. Select "2Statute" from the "Suspend" drop-down list.

    2. Click the tax increase/credit decrease check box, if appropriate.

    3. Complete the ASED field

    Note:

    If Statute determines that they must work the case, they print a hardcopy for their use and return the case with instructions to close the case.

3.11.6.9.3 (10-12-2021)

MEFP and MEFS Accounts Management Rejected Queue

  1. Reassigned cases that don't have a valid "AM CII combination" are rejected by Accounts Management (AM) back to Submission Processing (SP) for correction. These rejected cases are sent by AM to the SP Reject queue, 0623804109.

    Note:

    You must notify the headquarter 1040-X analyst immediately upon learning the current SP Reject queue owner will no longer hold a position with SP 1040-X duties. When notifying the headquarter analyst, a new queue number must be provided to ensure that cases can be transferred without interruption.

  2. The 1040-X quality review (QR) manager or another designated person(s) at each site must review the SP Reject queue daily. The cases must be cleared out of the rejected queue by 9:00 am local time.

  3. When a rejected case from your site is discovered:

    1. Input a case message stating, "Rejected by AM for invalid AM CII combination."

    2. Reassign the case to the tax examiner to take corrective action.

3.11.6.9.4 (01-02-2024)

MEFP and MEFS Secure Messaging and E-fax Routing

  1. SP 1040-X uses secure messaging and e-fax routing when directed by the specific IRM subsection.

    Note:

    This subsection isn't all-inclusive and may change frequently.

  2. Current areas accepting secure message routing from SP 1040-X are:

    • OFE

    • TAS

    • SP 1040-X

  3. Current areas accepting e-fax routing from SP 1040-X are:

    • AUR

    • CAF

    • CI-SDC

    • Collection Functions
      – CSCO
      – ACS
      – OIC
      – Field Collections
      – ASFR and NFR

    • SP 1040-X

    Note:

    If there's a problem with an e-fax number, refer the case to your lead or manager. The lead or manager must contact the appropriate AUR coordinator using the AUR Coordinators list on SERP.

  4. When routing via secure messaging or e-fax, see IRM 3.11.6.7.19.1.3, Working Trails and Action Trails When Sending an E-fax or Secure Message.

  5. To send a case to your site’s secure mailbox use the following:

    • ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡

  6. The mailbox owners or other designated personnel such as clerical staff, must monitor their respective site mailbox throughout the day. They will print the documents and send them to the destination indicated on the attached Form 12305, Routing Slip.

3.11.6.10 (01-02-2024)

Correspondence Procedures

  1. When required to send correspondence to the taxpayer(s), you must select the correct paragraphs from the IAT Letters tool or the Correspondex Letters on SERP.

  2. Each letter is to include the following:

    1. The appropriate signature code and return address code per paragraph 4 below.

    2. The CII case ID number.

    3. An appropriate opening paragraph that includes the received date of the return.

    4. Appropriate paragraphs for the body of the letter to detail the purpose of the correspondence.

    5. If a fill-in is required, use the designated open paragraph. If an additional space is needed to fill-in paragraphs, use the asterisk to insert another paragraph then continue with the fill-in(s).

    6. If multiple correspondence issues are present with multiple fill-ins, modify the fill-ins by combining them to remove repeated statements.

    7. Use the appropriate closing paragraph to include the "0922" toll-free phone number.

  3. Use the following guidance for correspondence unless otherwise directed with a specific instruction.

    1. Correspondence must be professional (i.e., correct spelling, punctuation, and grammar).

    2. Don't correspond when you can "dummy" the form or schedule from the information attached or through IDRS research.

    3. Don't correspond when the change is the result of a ripple effect and the forms or schedules needed to support the change are missing.

    4. When sending correspondence, print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

  4. When sending C-letter correspondence, use the appropriate Correspondex Signature Code and Correspondex Return Address Code.

    If ... Then ...
    Sending a C-letter as certified or registered mail Use the signature code for your site’s Submission Processing (SP) field director.

    • Austin - Correspondex Signature Codes.

    • Kansas City - Correspondex Signature Codes.

    • Ogden - Correspondex Signature Codes.

    • Memphis - Use Austin’s SP 1040-X Signature Code.
    Not sending a C-letter as certified or registered mail Use the signature code for your site’s operations manager.

    • Austin - Correspondex Signature Codes.

    • Kansas City - Correspondex Signature Codes.

    • Ogden - Correspondex Signature Codes.

    • Memphis - Use Austin’s SP 1040-X Signature Code.
    Your site requires a return address code Use the appropriate code for your site.

    • Austin - Return Address Codes

    • Kansas City - Return Address Codes

    • Ogden - Return Address Codes

    • Memphis - Use Austin’s SP 1040-X Return Address Code.
    Your site doesn't require a return address code Then leave the field blank.

  5. Correspondence for missing information takes priority over all other correspondence conditions unless otherwise specified.

  6. When multiple correspondence issues are met, see IRM 3.11.6.10.1, Multiple Correspondence Issues.

  7. Not all correspondence scenarios are covered by the IRM. See your lead if clarification is needed.

  8. If correspondence has been issued on a claim with CAT-A criteria or an Exam case and an incomplete response has been received, forward the claim to CAT-A or Exam, as appropriate. See IRM 3.11.6.7.14, Examination.

  9. All correspondence issues must be identified prior to initiating correspondence to ensure all items are requested at the same time.

    Note:

    Ignore dollar limit tolerances once correspondence has been initiated.

    Example:

    Correspondence is initiated because Form 1040-X is missing a Schedule EIC but there's also an unexplained entry on line 7 of $400. Correspond addressing both issues.

  10. In general, correspondence is issued on:

    1. Letter 178C for net result refund or zero-balance on Form 1040-X. See IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C).

    2. Letter 324C for net result balance due on Form 1040-X, APO/FPO/DPO, and Disaster claims. See IRM 3.11.6.10.3 Corresponding on Net Balance Due Returns (Letter 324C).

      Exception:

      Letter 178C, can be sent to an APO/FPO/DPO address when there's no attachment and no reply is expected.

    3. Letter 105C or Letter 105SP for fully disallowed claims. See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

    4. Letter 106C or Letter 106SP for partially disallowed claims. See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

    5. Letter 474C or Letter 474SP for correcting a claim and general correspondence. See IRM 3.11.6.10.6, Correspondence for Correcting a Claim (Letter 474C and 474SP).

    6. Letter 916C or Letter 916SP for “No Considering” a claim. See IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

    7. Other letters as specified.

    Note:

    Check the CC MESSG "Correspondence News" page for updates to applicable C-Letters and SP-Letters.

  11. Prior to issuing any correspondence, CC ENMOD must be reviewed to determine the LEP indicator. If the LEP indicator is blank, CC INOLES must be reviewed. When reviewing CC INOLES, if the MFR code is 07, correspondence must be sent in Spanish, if available. See IRM 3.11.6.10.2, Spanish Correspondence.

  12. Follow the instructions below when the address on the Form 1040-X doesn't match IDRS.

    If ... Then ...
    An address change can be made per IRM 3.11.6.12.1, Entity Changes. Correspond using the address on the Form 1040-X. See IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C).
    An address change can't be made for reasons other than missing signature Correspond using the address of record on IDRS. See IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C).
    An address change can't be made due to a missing signature Correspond using the address of record on IDRS and suspend the return.

  13. If a taxpayer is incarcerated, the taxpayer’s "prisoner number" must be included on the second name line of any correspondence being issued, if present. Don't update IDRS to add the prisoner number.

3.11.6.10.1 (01-02-2024)

Multiple Correspondence Issues

  1. Correspond for missing information before addressing any other correspondence issues, unless otherwise specified. If there are identifiable issues on the return that cause a disallowance, no consideration, or a corrected adjustment once the response is received, include appropriate narrative fill-in from other “C” letters that addresses the issue(s) with the Letter 324C, or Letter 178C.

    Reminder:

    Don't follow the instructions below until all correspondence for missing information is complete, see IRM 3.11.6.10, Correspondence Procedures.

  2. If the return is processable and multiple correspondence conditions exist, the fill-ins or paragraphs might require they be combined from the specific instructions. Use open paragraph(s) when needed.

    • If one of the issues is a formal disallowance, send the Letter 106C.

    • When a Letter 105C or Letter 106C, formal disallowance letter, is required and other issues on the return require a math error to be set, send both the Letter 105C or Letter 106C and the Letter 474C. See (3) below.

    • In all other instances, send the Letter 474C using the open paragraphs to address all issues.

      Exception:

      The Letter 369C, Letter 404C, and Letter 3050C used to return original documents, can't be combined. They must be used in addition to any other letter.

  3. When an amended return requires both a formal disallowance and a math error, two letters and two adjustments are required:

    1. The first adjustment to address the math error and any other issue(s) that may be present. Send a Letter 474C per IRM 3.11.6.16.5, Inputting a Corrected Adjustment, and address all issues not related to the disallowance. Use the additional fill-in: You should’ve received a separate notice that part of your claim was disallowed.

    2. The second adjustment to address the disallowance issue. Send a Letter 106C per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

3.11.6.10.2 (01-02-2024)

Spanish Correspondence

  1. If a letter requires an open paragraph to be filled in, consider the letter as not available in Spanish.

  2. CC ENMOD must be reviewed to determine the LEP indicator.

    If the LEP indicator is ... And ... Then ...
    001   Send correspondence in Spanish.
    Blank The MFR code is 07 on CC INOLES Send correspondence in Spanish.

  3. If corresponding on a married filing joint return, the LEP and MFR indicators must be checked for both the primary and secondary taxpayer. In some instances, two letters must be sent, one in English and one in Spanish, because each taxpayer can file a Schedule LEP to designate their language preference.

  4. Currently, the following SP 1040-X correspondence letters are available in Spanish.

    Correspondence Letter Spanish Version Available
    Letter 76C N/A
    Letter 105C Letter 105SP
    Letter 106C Letter 106SP
    Letter 178C N/A
    Letter 282C Letter 282SP
    Letter 324C N/A
    Letter 369C N/A
    Letter 404C N/A
    Letter 418C N/A
    Letter 474C Letter 474SP
    Letter 916C Letter 916SP
    Letter 3050C Letter 3050SP

  5. When sending correspondence in Spanish:

    1. The same C-letter paragraphs are used.

    2. Use "Formulario 1040-X" instead of "Form 1040-X."

    3. Enter the date in DD-month-YYYY format.

      Example:

      If required to send a Letter 105SP, the opening paragraph should read:
      Gracias por su Formulario 1040-X del 04 de mayo de 2022.

  6. Use the table below for converting months Spanish.

    If ... Then ...
    January enero
    February febrero
    March marzo
    April abril
    May mayo
    June junio
    July julio
    August agosto
    September septiembre
    October octubre
    November noviembre
    December diciembre

3.11.6.10.3 (01-02-2024)

Corresponding on Net Balance Due Returns (Letter 324C)

  1. When an amended return reflects an overall balance due that is missing required forms, schedules, signature(s), or other necessary information, request the missing information using a Letter 324C, Amended (Numbered) Return Incomplete for Processing. When sending Letter 324C:

    1. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page"

    2. Leave a CII Case Note, describing the items requested

    3. Suspend the CII case for 45 days from today’s date. If paragraph 2 below applies, don't suspend

  2. If the only correspondence issue on a balance due or zero-balance return is a missing signature, issue a Letter 324C at the same time you input your adjustment. When the taxpayer responds, associate the information with the adjustment document.

  3. When a reply to a Letter 324C is received within the 45-day suspense period, follow the table.

    If ... Then ...
    All the requested information is supplied

    1. Retrieve the suspense case from the CII suspense Queue.

    2. Use the earliest received date from the return as the received date.

    3. Use the received date from the taxpayer’s reply as the amended claims date.

    4. Use CII Indicator "1" .

    5. Use Source Document Indicator "N" .

    6. Input the appropriate remarks.
    It is determined that correspondence was unnecessary, and all issues can be determined.

    1. Retrieve the suspense case from the CII suspense Queue.

    2. Use the received date from the return as the received date.

    3. Use the received date from the return as the amended claims date.

    4. Use CII Indicator "1" .

    5. Use Source Document Indicator "N" .

    6. Input the appropriate remarks.
    The taxpayer doesn't supply all the requested information and the return is still incomplete.

    1. Retrieve the suspense case from the CII suspense Queue.

    2. Input only the issues that can be determined per normal procedures.

    3. Use CII Indicator "1" .

    4. Use Source Document Indicator "N" .

    5. Input the appropriate remarks.

    6. Send a Letter 474C, per IRM 3.11.6.6, Master File Verification and Math Verification Screening, and IRM 3.11.6.16.5, Inputting a Corrected Adjustment, using the fill-in: You didn't provide (insert a description of the missing information).

  4. If no reply is received, after the 45-day suspense period:

    If ... Then ...
    There are issues that can be determined on the return Send a Letter 474C per IRM 3.11.6.16.5, Inputting a Corrected Adjustment, using the fill-in: You didn't provide (insert a description of the missing information).

    Note:

    Don't allow any credits if part of the correspondence was for a missing signature.
    All issues on return can be determined Process the return using the original received date as the received date and the amended claims date.
    None of the issues on the return can be determined Send Letter 916C per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

  5. Use the table below if a reply is received after the amended return is closed per either paragraph 2, 3, or 4 above:

    If ... Then ...
    The Letter 324C wasn't sent by SP 1040-X Send the case to AM.
    The Letter 324C was sent by SP 1040-X Process as normal.

    1. Retrieve the original case from CII and link it to the late reply case.

    2. Use the received date from the reply as the received date.

    3. Use the received date from the reply as the amended claims date.

    4. Use CII Indicator "1" .

    5. Use Source Document Indicator "N" .

    6. Add "324C LATE REPLY" to the remarks.

3.11.6.10.4 (01-02-2024)

Corresponding on Net Refund and Zero-Balance Returns (Letter 178C)

  1. When an amended return reflects a net overall refund or zero-balance and is missing required forms, schedules, signature(s), or other necessary information, correspond using Letter 178C. When sending Letter 178C:

    1. Use the open paragraph to request the missing information

    2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page."

    3. Leave a CII Case Note describing the items requested

    4. Input a TC 290 for .00. Use Hold code 1 if the module is in a credit balance

      Caution:

      If there’s not a TC 150 present on the account, don't input a TC 290 for .00.

    5. Close the CII case

  2. If the amended return is reporting additional income and is missing required forms, schedules, and documentation, send Letter 324C per IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C).

  3. If the only issue on a zero-balance return is a missing signature, send Letter 324C per IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C), to request the signature and process the adjustment at the same time. When the taxpayer responds, associate the information with the adjustment document.

  4. If a signature is missing on an APO, FPO, DPO or a Disaster Claim, suspend the return and correspond using a Letter 324C.

  5. When the taxpayer responds with all the requested information:

    1. Create a new case.

    2. Process the claim.

    3. Use the received date of the reply as the received date and amended claims date.

    4. Link the case to the original amended return.

  6. If the taxpayer responds with required forms and/or documents and doesn't address items within tolerance, continue processing the return.

    Reminder:

    Don't use the original received date. Use the received date of the reply as the received date and amended claims date.

  7. If the taxpayer’s reply on a refund return is incomplete or unprocessable:

    1. Adjust the account for only the issues that are processable and send Letter 474C per IRM 3.11.6.16.5, Inputting a Corrected Adjustment, with the fill-in: You didn't provide [insert a description of the missing information].

    2. If no issues are processable, send a Letter 916C per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

    3. If the correspondence involves PATH Act issues, see IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

  8. When it is determined that the correspondence was sent by the IRS in error, follow the table:

    If ... Then ...
    All issues can be determined, and the return is incomplete Send another Letter 178C to request the correct information.
    All issues can be determined, and the return is complete Process the return using the earliest received date as the received date and amended claims date.
    None of the issues can be determined Send Letter 916C per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

3.11.6.10.5 (01-02-2024)

Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP)

  1. Taxpayers are sent disallowance letters for fully disallowed or partially disallowed claims:

    • Letter 105C is used for fully disallowed claims

    • Letter 106C is used for partially disallowed claims

    • Letters must be sent certified or registered mail

    • Letters must contain the specific reason for the claim disallowance as well as the claim amount

    • Letters must include appeal rights and the right to file suit

  2. If an amended return is received that has previously been disallowed, send the case to AM. A previous disallowance can be determined by:

    • Reviewing the Blocking Series of the previous adjustment. See IRM 3.11.6.15.6, Blocking Series (BS).

    • Researching CC ENMOD for an indication that a Letter 105C or Letter 106C has been sent.

  3. If the signature is missing on a full or partial disallowance, correspond per IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C).

    Reminder:

    If processing a Statute case, see IRM 3.11.6.16.1, Processing Statute Cases.

  4. See IRM 3.11.6.16.7, Inputting a Disallowance Adjustment, for processing instructions.

3.11.6.10.6 (01-02-2024)

Correspondence for Correcting a Claim (Letter 474C and 474SP)

  1. The Letter 474C is used to correct a claim and general correspondence as instructed.

  2. A Letter 474C is used in the following:

    • For a corrected adjustment, see IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

    • When a taxpayer claims a credit they already received, see IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

    • CP 08, CP 09, or CP 27 correspondence.

    • When specific instructions are provided.

    Note:

    Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page."

3.11.6.10.7 (01-02-2024)

Correspondence for Requesting Credit Previously Received (Letter 76C)

  1. When instructed to send Letter 76C, Correspondence for Claim for Refund Approved/Correct/Reduced/Math Error, for an amended return, see IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

  2. If instructed to send a Letter 76C when processing a CP 08, You May Qualify for Child Tax Credit (CTC), follow the table.

    If corresponding because ... And ... Then ...
    Taxpayer claims additional children on the CP 08 or Form 15110 that were not claimed on the original return
    OR
    Taxpayer claims ANY children on the CP 08 or Form 15110 that were disallowed as exemptions    		 The claim is being partially denied. Use the appropriate paragraphs and include the refund amount.
    Taxpayer claims additional children on the CP 08 or Form 15110 that were not claimed on the original return
    OR
    Taxpayer claims ANY children on the CP 08 or Form 15110 that were disallowed as exemptions    		 The claim is being completely denied. Use the appropriate paragraphs and don’t include the denied amount.
    Some of the children that the taxpayer claimed on the CP 08 notice or Form 15110 are eligible, allow the ACTC for those dependents. The claim is being partially denied Use the appropriate paragraphs and include the following fill-in: We disallowed part of your claim for the Additional Child Tax Credit because not all the children claimed on your CP 08 notice were eligible.

  3. If instructed to send a Letter 76C when processing a CP 09, Earned Income Credit - You May Be Entitled to EIC, follow the table.

    If corresponding because ... And ... Then ...
    The taxpayer claims a child on the CP 09 or Form 15111 that wasn't claimed on the original return No other qualifying child from the original return is being claimed. Use the appropriate paragraphs.
    The taxpayer claims a child on the CP 09 or Form 15111 that wasn't claimed on the original return There’s a qualifying child that was claimed on the original return. Use the appropriate paragraphs.
    The child(ren) the taxpayer claims as children on the CP 09 or Form 15111 were claimed on the original return The child(ren) are not eligible for EITC based on eligibility criteria or our computations and you have verified the taxpayer(s) are not eligible Use the appropriate paragraphs, include the refund amount, and include the fill-in: We're writing as a follow-up to the (CP 09 notice or Form 15111) we recently mailed. We're sorry to inform you that you don't qualify for the Earned Income Tax Credit. We apologize for this inconvenience.

  4. If instructed to send a Letter 76C when processing a CP 27, EIC Potential for Taxpayer Without Qualifying Children, Use the appropriate paragraphs, include the refund amount, and include the fill-in: We're writing as a follow-up to the (CP 27 notice or Form 15112) we recently mailed. We're sorry to inform you that you don't qualify for the Earned Income Tax Credit. We apologize for this inconvenience.

3.11.6.10.8 (01-02-2024)

Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP)

  1. A Letter 916C informs the taxpayer we can't process the claim and a new claim with the requested information may be filed.

  2. For statute year returns, see IRM 3.11.6.16.1, Processing Statute Cases.

  3. Follow the table below when sending a Letter 916C.

    If ... Then ...
    The claim is being no considered per IRM 3.11.6.14.1.1, Adjusted Gross Income (AGI) - (Line 1)

    1. Input the adjustment as follows:

      1. Input a TC 290 for .00.

      2. Use the applicable Reason Code(s).

      3. Input the appropriate remarks.

    2. Send Letter 916C using the fill-in: We're unable to process your amended return because we can’t verify the income amount claimed. If you have more information you didn't send to us, you can file another amended return that includes all your supporting information.

      1. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page"

      2. Leave a CII Case Note describing the issue.
    The claim is being no considered per IRM 3.11.6.14.3.1, Federal Income Tax Withholding (Line 12)

    1. Input the adjustment as follows:

      1. Input a TC 290 for .00.

      2. Use the applicable Reason Code(s).

      3. Input the appropriate remarks.

    2. Send Letter 916C using the fill-in: We're unable to process your amended return because we can’t verify the withholding amount claimed. If you have more information you didn't send to us, you can file another amended return that includes all your supporting information.

      1. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      2. Leave a CII Case Note describing the issue.
    The entire claim is being no considered

    1. Input the adjustment as follows:

      1. Input a TC 290 for .00

      2. Use the applicable Reason Code(s).

      3. Input the appropriate remarks.

    2. Send Letter 916C using the fill-in: You didn't provide [insert a description of the missing information]. If you have more information you didn't send to us, you can file another amended return that includes all your supporting information.

      1. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      2. Leave a CII Case Note describing the issue.

  4. If a reply to the Letter 916C is received and the taxpayer still has not submitted the requested information, then:

    1. Input a TC 290 for .00.

    2. Use the applicable Reason Code(s).

    3. Input the appropriate remarks.

  5. If a response to a Letter 916C is received without an amended return attached, follow the table below.

    If ... Then ...
    The Letter 916C wasn’t sent by SP 1040-X Send the case to AM.
    The Letter 916C was sent by SP 1040-X Process the case as follows:

    1. Retrieve the case from CII and link it to the new case.

    2. Use the received date of the reply as the received date.

    3. Use the received date of the reply as the amended claims date.

    4. Input a TC 29X for the appropriate amount.

    5. Use the applicable Reason Code(s).

    6. Use CII Indicator "1" .

    7. Use Source Document Indicator "N" .

    8. Add "916C REPLY " to the remarks.

    Exception:

    For Statute cases, follow IRM 3.11.6.16.1, Processing Statute Cases.

3.11.6.10.9 (01-02-2024)

Correspondence for Estimated Tax Penalty (Letter 369C)

  1. When instructed to send Letter 369C per IRM 3.11.6.16.8, Estimated Tax Penalty, use the fill-in: If you qualify for one of the exceptions in Part II of Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, you may be able to reduce your penalty. Complete and submit Form 2210 according to the instructions.

3.11.6.10.10 (01-02-2024)

Correspondence for Excess Social Security and Railroad Retirement Tax (Letter 404C)

  1. When instructed to send Letter 404C per IRM 3.11.6.14.3.1.1, Excess Social Security and Railroad Retirement Tax Act (RRTA), follow the table.

    If the reason for correspondence is ... Then ...
    Excess Social Security was withheld by only one employer and there's one W-2

    1. Input a TC 290 .00. If additional issues are present, continue to process for the remaining issues.

    2. Send Letter 404C.
    The taxpayer is MFJ and used earnings / Social Security from both the primary and secondary taxpayers to calculate excess Social Security

    1. Input a TC 290 .00. If additional issues are present, continue to process for the remaining issues.

    2. Send Letter 404C.

3.11.6.10.11 (01-02-2024)

Correspondence for Dependent Documentation (Letter 3050C and Letter 3050SP)

  1. When instructed to send Letter 3050C per IRM 3.11.6.13, Personal Exemption or Dependent Changes, be sure to address all dependent related issues.

3.11.6.10.12 (01-02-2024)

Illegible Amended Return (Letter 418C)

  1. Occasionally, an amended return is received that is illegible. In this instance, send Letter 418C, Amended/Original Return Unavailable; Copy Requested, to request another amended return. When sending Letter 418C:

    1. Use the appropriate paragraphs.

    2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

    3. Leave a CII Case Note, stating "Amended return was illegible requesting another amended return."

    4. Select Monitor from the suspense drop down menu and suspend the case for 45 days from today’s date.

  2. If a reply to Letter 418C, Amended/Original Return Unavailable; Copy Requested, isn't received and the 45-day suspense period has lapsed, suspend the case for an additional 90 days. Change the case activity to "418C-90DAYS" .

  3. If the 90-day suspense period has lapsed and a reply has still not been received, close the case with a TC 290 for .00.

3.11.6.10.13 (01-02-2024)

Undelivered Correspondence

  1. When undelivered correspondence is received, see IRM 3.11.6.10.14, Correspondence Received, then follow the instructions below.

  2. Research for a better address using IDRS, the return, the envelope, or use the yellow address change sticker provided by the U.S. Postal Service on the envelope. Compare the address on the yellow sticker to the name and address using CC ENMOD to verify it is the same taxpayer.

    Reminder:

    When an undelivered mail piece has an affixed USPS yellow label, see IRM 3.11.6.12.1.1, Address Changes.

  3. When a new address is found, input a new letter using the new address; don't update the address in IDRS. If an adjustment related to the undelivered correspondence is on the module, see paragraph 6 and 7 below. For Letter 105C/Letter 106C undelivered correspondence, see the following paragraph.

    Note:

    If the case is in suspense, close then reopen the suspended case to allow the taxpayer 45 days to respond from the date of your newly issued letter.

  4. For a Letter 105C or Letter 106C, Disallowance Letter, don't reinput the letter. Print the entire (original) letter, include the returned envelope, unchanged, and send all to the new address in another envelope per local procedures.

  5. When working an undeliverable piece of correspondence and a new address isn't found:

    If ... Then ...
    The return was determined processable Process the case as normal using the original received date as the amended claims date.
    The return is a zero-balance return Adjust the account per the return using the earliest received date (that has not been circled out).
    Correspondence was a Letter 178C or a Letter 324C requesting missing information

    • Input a case note stating "Letter (178C/324C) dated (MM-DD-YYYY) returned undelivered. No new address found."

    • Treat the case as classified waste per IRM 3.11.6.16.22, Classified Waste.
    Correspondence was a Letter 916C for missing information

    • Input a case note stating "Letter 916C dated (MM-DD-YYYY) returned undelivered. No new address found."

    • Treat the case as classified waste per IRM 3.11.6.16.22, Classified Waste.
    Correspondence was a Letter 916C no consideration, or a Letter 474C

    • Input a case note stating "Letter (916C/474C/4364C) dated (MM-DD-YYYY) returned undelivered. No new address found."

    • Treat the case as classified waste per IRM 3.11.6.16.22, Classified Waste.
    The correspondence was a formal disallowance or contained appeal rights

    • Input a case note stating "Letter (105C/106C) dated (MM-DD-YYYY) returned undelivered. No new address found."

    • Treat the case as classified waste per IRM 3.11.6.16.22, Classified Waste.
    Correspondence was for informational purposes (such as Direct Deposit) Treat as classified waste. See IRM 3.11.6.16.22, Classified Waste.

  6. If the Form 1040-X is returned undelivered and a TC 150 is still not posted on the account, research for a new address and follow the table:

    If ... Then ...
    A new address is found Send correspondence to the new address.
    A new address isn't found and there are payments on the module Send the case to AM.
    A new address isn't found and there are no payments on the module Treat as classified waste. See IRM 3.11.6.16.22, Classified Waste.

  7. If an undeliverable return is identified as an ID Theft return, then send the case to Entity. See IRM 3.11.6.7.8, Identity Theft (IDT) Screening.

  8. For undelivered CP 08, CP 09, and CP 27 notices, treat as classified waste. See IRM 3.11.6.16.22, Classified Waste.

3.11.6.10.14 (01-02-2024)

Correspondence Received

  1. When correspondence is received, it must be sent to the Image Control Team (ICT) for scanning.

    1. If the original case is closed, a new case is created with the reply using Category Code IRRQ.

      Note:

      When working an IRRQ reply, the category code must be updated, and the case linked to original CII case.

    2. If the original case is still open, the reply must be associated to the open CII Case per paragraph 2 below.

      Note:

      When working a reply that is associated to a case, the reply appears in the image section of the open case.

  2. Send all correspondence replies to ICT are scanned through the exception scanning process.

    If correspondence is received on a ... Then ...
    Closed case The clerical staff or tax examiner must prepare a CII Association Header Sheet.

    • TIN - Use the P-TIN which can be found on IDRS.

    • Name Control - Use the Primary name control from the letter, form(s), schedule(s), or other document(s).

    • MFT - Always use "30" .

    • Tax Period - Use the tax period indicated on the letter, form(s), schedule(s), or other document(s).

    • Case ID - Use the CII Case ID indicated on the letter, or the form(s), schedule(s), or other document(s) if present.

    • Employee number - Use the tax examiner’s IDRS employee number from the letter.
    Open case The clerical staff or tax examiner must prepare a CII Association Header Sheet and input a case note stating what type of correspondence is being sent for association to the case.

    Example:

    If a Letter 324C reply is received on MM-DD-YYYY, the case note would be:
    324C reply received MM-DD-YYYY sent to ICT for case association.

    • TIN - Use the P-TIN which can be found on IDRS.

    • Name Control - Use the Primary name control from the letter, form(s), schedule(s), or other document(s).

    • MFT - Always use "30" .

    • Tax Period - Use the tax period indicated on the letter, form(s), schedule(s), or other document(s).

    • Case ID - Use the CII Case ID indicated on the letter, or the form(s), schedule(s), or other document(s) if present.

    • Employee number - Use the tax examiner’s IDRS employee number from the letter.

3.11.6.11 (02-17-2023)

Correspondence Table of Issues, C-Letters and Paragraph Fill-ins

  1. This section contains the most common correspondence issues and is referred to throughout the IRM. When sending:

    1. Letter 178C refer to IRM 3.11.6.11.1, Letter 178C Correspondence Table of Issues.

    2. Letter 324C refer to IRM 3.11.6.11.2, Letter 324C Correspondence Table of Issues.

    Reminder:

    Not all correspondence scenarios are covered by the IRM. See your lead if clarification is needed.

3.11.6.11.1 (01-02-2024)

Letter 178C Correspondence Table of Issues

  1. When sending Letter 178C use the appropriate fill-in from the tables below. These tables address the most common correspondence issues.

  2. The following table is a guide in corresponding with the taxpayer on Entity issues, it isn't all-inclusive.

    If ... And ... Fill-in(s) ...
    Tax Period is missing You can't determine the correct tax period through IDRS research and attachments We’re unable to correct your account with the information you provided on your amended return. Please submit another Form 1040-X being sure to provide the tax period. If amending more than one tax year, you must file a separate return for each year.
    The taxpayer tries to submit an amended return for multiple tax periods on a single amended return   We’re unable to correct your account with the information you provided on your amended return. Please submit another Form 1040-X being sure to provide the tax period. If amending more than one tax year, you must file a separate return for each year.
    Primary TIN and/or Secondary TIN can't be determined ALL attempts have been made (e.g., reviewed attachments, IDRS research, etc.) to secure the TIN We’re unable to correct your account with the information you provided on your amended return. Your Social Security number or your spouse’s Social Security number is missing or doesn't show nine digits. Please submit another Form 1040-X with the correct number(s).
    TP is changing to FS 2 (MFJ) and the Secondary TIN can't be determined ALL attempts have been made (e.g., reviewed attachments, IDRS research, etc.) to secure the TIN We’re unable to correct your account with the information you provided on your amended return. Your Social Security number or your spouse’s Social Security number is missing or doesn't show nine digits. Please submit another Form 1040-X with the correct number(s).
    The TP is changing to FS 4 (HOH) The TP is claiming a qualifying non-dependent and the name of the QND isn't provided. We’re unable to correct your account with the information you provided on your amended return. Your dependent’s name or taxpayer identification number (or both) is missing, incomplete, or doesn’t match our records. Please submit another Form 1040-X with the correct information.
    The TP is changing to FS 4 (HOH) Removing all dependents claimed and doesn't change to FS 1 (Single) or provide the name of the QND. We’re unable to correct your account with the information you provided on your amended return. Your dependent’s name or taxpayer identification number (or both) is missing, incomplete, or doesn’t match our records. Please submit another Form 1040-X with the correct information.
    The dependent name and/or TIN is missing, or TIN and/or name doesn't match CC INOLE, or TIN can't be determined through IDRS research The taxpayer has not indicated a religious (e.g., “Amish,” “Mennonite,” or “Form 4029”) or conscience-based objection to obtaining a taxpayer identification number (TIN), We’re unable to correct your account with the information you supplied on your amended return. The name or taxpayer identification number of the person you claimed as a dependent on Form 1040X, Part I, Page 2 is either missing, incomplete, or doesn't match our records. Please submit another Form 1040-X with the corrected information.
    The dependent name and/or TIN is missing, or TIN and/or name doesn't match CC INOLE, or TIN can't be determined through IDRS research There’s a statement indicating either the dependent isn't deceased or was born before the tax year if deceased We’re unable to correct your account with the information you supplied on your amended return. The name or taxpayer identification number of the person you claimed as a dependent on Form 1040X, Part I, Page 2 is either missing, incomplete, or doesn't match our records. Please submit another Form 1040-X with the corrected information.
    One or more ITIN(s) is Inactive The entire return is unprocessable because of an increase to a credit that is based on an inactive ITIN We’re unable to process your amended return. Please submit a completed Form W-7 application with supporting document(s) to renew the inactive or expired individual taxpayer identification number (ITIN) listed on your return.
    One or more ITIN(s) is Inactive Some issues are processable and the allowable adjustment changes the taxpayer’s expected refund/balance due We’re unable to process your amended return as submitted. There was one, or more, inactive individual taxpayer identification number (ITIN), that caused a change to your return. Please submit a completed Form W-7 application with supporting document(s) to renew the inactive or expired ITIN listed on your return.

  3. The following table is a guide in corresponding with the taxpayer for missing Forms and Schedules, it isn't all-inclusive.

    If ... And ... Fill-in(s) ...
    The amount shown on a supporting form or schedule differs from the amount shown on the Form 1040-X ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We’re unable to correct your account with the information you supplied on your amended return. The information provided on [insert Form or Schedule number, Title] doesn't support the entry made on your Form 1040-X. Please submit another Form 1040-X with any documentation necessary to support your claim.
    Schedule A, Itemized Deductions, is missing The TP is changing from a standard deduction to itemized deduction or TP is increasing deductions on an existing Schedule A and doesn't explain the type of deduction and the change isn't the result of a ripple effect We’re unable to correct your account with the information you provided on your amended return. Schedule A, Itemized Deductions, to support your claim was missing. Please submit another Form 1040-X with Schedule A.
    Schedule EIC, Earned Income Credit Is missing and the change isn't the result of a ripple effect We’re unable to correct your account with the information you provided on your amended return. Schedule EIC, Earned Income Credit, to support your claim was missing, incomplete, or contains incorrect information. Please submit another Form 1040-X with a completed Schedule EIC.
    Schedule EIC, Earned Income Credit The qualifying child's SSN doesn't verify We’re unable to correct your account with the information you provided on your amended return. Schedule EIC, Earned Income Credit, to support your claim was missing, incomplete, or contains incorrect information. Please submit another Form 1040-X with a completed Schedule EIC.
    Schedule LEP, Request for Change in Language Preference Schedule LEP was either illegible, had multiple selections, was incomplete, or missing. We’re unable to process your Schedule LEP, Request for Change in Language Preference, because it was either illegible, had multiple selections, was incomplete, or missing. Please complete and submit a new Schedule LEP, Request for Change in Language Preference.
    Schedule R, Credit for the Elderly or the Disabled, is missing or incomplete Any amount claimed We’re unable to correct your account with the information you provided on your amended return. Schedule R, Credit for the Elderly or the Disabled, to support your claim was missing. Please submit another Form 1040-X with Schedule R.
    Schedule SE, Self-Employment Tax, The schedule is attached and the return is FS 2 and both taxpayers have SE tax they have combined their SE tax onto one Schedule SE We’re unable to correct your account with the information you provided on your amended return. Please submit another Form 1040-X with Schedule SE, Self Employment Tax.
    Note: On a married filing join return and both spouses have self-employment income (SEI) or you're unable to determine which spouse the SEI belongs to, use an open paragraph to add the fill-in: If filing jointly and both spouses have self-employment income (SEI), each spouse must file a separate Schedule SE. If only one spouse has SEI, list only that spouse's name on the Schedule SE.
    Schedule SE, Self-Employment Tax, You can't determine which TP account to adjust We’re unable to correct your account with the information you provided on your amended return. Please submit another Form 1040-X with Schedule SE, Self Employment Tax.
    Note: On a married filing join return and both spouses have self-employment income (SEI) or you're unable to determine which spouse the SEI belongs to, use an open paragraph to add the fill-in: If filing jointly and both spouses have self-employment income (SEI), each spouse must file a separate Schedule SE. If only one spouse has SEI, list only that spouse's name on the Schedule SE.
    Form 1040-X lines 1 – 15 Columns A and C match the information on IDRS There's no explanation of the change, and you're unable to determine through attachments We’re unable to correct your account with the information you supplied on your amended return. There’s not a sufficient explanation to determine the changes you’ve requested. Please submit another Form 1040-X with an explanation telling us what changes you’re making to your income, deductions, or credits, and the reason for each change.
    Form 2106, Employee Business Expenses, is missing; there's no explanation of source of the miscellaneous deductions The amount of the unreimbursed employee expense ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We’re unable to correct your account with the information you provided on your amended return. Form 2106, Employee Business Expenses, to support your claim was missing. Please submit another Form 1040-X with Form 2106.
    Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on line 15 of Form 1040-X We’re unable to correct your account with the information you provided on your amended return. Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, to support your claim was missing. Please submit another Form 1040-X with Form 2439. A duplicate or photocopy of Form 2439 is acceptable.
    Form 2441, Child and Dependent Care Expenses, is missing The change isn't the result of a ripple effect We’re unable to correct your account with the information you provided on your amended return. Form 2441, Child and Dependent Care Expenses, to support your claim was missing. Please submit another Form 1040-X with Form 2441.
    Form 2441, Child and Dependent Care Expenses, is missing Lines 1c or 2b can't be determined through research We're unable to correct your account with the information you provided on your amended return. The name and taxpayer identification number (TIN) of the care provider or individual that qualifies you for the Form 2441, Child and Dependent Care Expenses, was missing. Please submit another Form 1040-X with Form 2441.
    Form 3800, General Business Credit, or the supporting forms are missing for a specific credit The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We're unable to correct your account with the information you provided on your amended return. Form [XXXX], Title, to support the changes you’ve made was missing. Please submit another Form 1040-X along with a completed Form [XXXX].

    Note:

    Request the specific credit form. If the specific credit isn't known, request Form 3800, General Business Credit.
    Form 4136, Credit for Federal Tax Paid on Fuels, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We’re unable to correct your account with the information you provided on your amended return. Form 4136, Credit For Federal Tax Paid on Fuels, to support your claim was missing. Please submit another Form 1040-X with Form 4136.
    Form 4684, Casualties and Thefts Form 4684, Casualties and Thefts, is missing. Send Letter 324C
    Form 4684, Casualties and Thefts The itemized deduction amount was recalculated We changed your total itemized deductions. On your Schedule A, Itemized Deductions, you showed [$XXX] for your Casualty and Theft Losses; however, the correct amount is [$XXX]. For more information, see www.irs.gov/Form4684.
    Form 4684, Casualties and Thefts The standard deduction amount was recalculated When you claim a qualified disaster loss, you’re entitled to your standard deduction plus an increased amount for your net loss. We changed your return to deduct the standard deduction plus the qualified disaster loss because the total was more than your itemized deductions. For more information, see www.irs.gov/Form4684.
    Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts If the taxpayer is reporting they are not subject to the 10 percent penalty, Form 5329 must be attached. See IRM 3.11.6.14.2.4.1, Additional Tax on Early Distribution - Form 5329 and Form 1099-R (Line 10). We’re unable to correct your account with the information you provided on your amended return. Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to support your claim was missing. Please submit another Form 1040-X with Form 5329.
    Form 5695, Residential Energy Credits, is missing The change isn't the result of a ripple effect or ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We’re unable to correct your account with the information you provided on your amended return. Form 5695, Residential Energy Credits, to support the changes you’ve made was missing. Please submit another Form 1040-X along with a completed Form 5695.
    Form 6478, Biofuel Producer Credit, is missing and Form 3800, General Business Credit, isn't attached Any amount claimed We’re unable to correct your account with the information you provided on your amended return. Form 6478, Biofuel Producer Credit, to support the changes you’ve made was missing. Please submit another Form 1040-X along with a completed Form 6478.
    Form 8606, Nondeductible IRAs, isn't attached The taxpayer is reporting or has indicated a change to a Nondeductible IRA in the explanation part of the Form 1040-X We’re unable to correct your account with the information you provided on your amended return. Form 8606, Nondeductible IRAs, to support your claim was missing. Please submit another Form 1040-X with Form 8606.
    Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, is missing A copy of the divorce decree or Form 2120 isn't attached We’re unable to correct your account with the information you provided on your amended return. Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, to support your claim was missing. Please submit another Form 1040-X with Form 8332.
    Schedule 8812, Credits for Qualifying Children and Other Dependents, is incomplete Can't be perfected or "dummied" by using AMS worksheets We’re unable to correct your account with the information you provided on your amended return. Schedule 8812, Credits for Qualifying Children and Other Dependents, to support the changes you’ve made was missing. Please submit another Form 1040-X with a completed Schedule 8812.
    Form 8396, Mortgage Interest Credit, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We’re unable to correct your account with the information you provided on your amended return. Form 8396, Mortgage Interest Credit, to support the changes you’ve made was missing. Please submit another Form 1040-X with a completed Form 8396.
    Form 8826, Disabled Access Credit, is missing and Form 3800, General Business Credit, isn't attached Any amount claimed We’re unable to correct your account with the information you provided on your amended return. Form 8826, Disabled Access Credit, to support your claim was missing. Please submit another Form 1040-X with a completed Form 8826.
    Form 8834, Qualified Electric Vehicle Credit, is missing and Form 3800, General Business Credit, isn't attached The amount claimed isn't the result of a ripple effect We’re unable to correct your account with the information you provided on your amended return. Form 8834, Qualified Electric Vehicle Credit, to support your claim was missing. Please submit another Form 1040-X with a completed Form 8834.
    Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit, is missing and Form 3800, General Business Credit, isn't attached The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We’re unable to correct your account with the information you provided on your amended return. Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit, to support your claim was missing. Please submit another Form 1040-X with a completed Form 8835.
    Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), (line 7 and/or 15 of Form 1040-X) is attached The amount claimed isn't the result of a ripple effect We’re unable to correct your account with the information you provided on your amended return. Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to support the changes you’ve made was missing or incomplete. Please submit another Form 1040-X with a completed Form 8863.
    Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), (line 7 and/or 15 of Form 1040-X) is attached The EIN is missing and can't be determined through attachments or IDRS research, We’re unable to correct your account with the information you provided on your amended return. Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to support the changes you’ve made was missing or incomplete. Please submit another Form 1040-X with a completed Form 8863.
    Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), (line 7 and/or 15 of Form 1040-X) is attached Lines 20 thru 22 in Part III of Form 8863 are not complete We’re unable to correct your account with the information you provided on your amended return. Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to support the changes you’ve made was missing or incomplete. Please submit another Form 1040-X with a completed Form 8863.
    Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), (line 7 and/or 15 of Form 1040-X) is attached The student’s name and/or TIN is missing and can't be determined

    Note:

    Form 1098-T may be used to determine the student’s name or TIN.

    		 We’re unable to correct your account with the information you provided on your amended return. Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), to support the changes you’ve made was missing or incomplete. Please submit another Form 1040-X with a completed Form 8863.
    Form 8864, Biodiesel and Renewable Diesel Fuels Credit, is missing and Form 3800, General Business Credit, isn't attached Any amount claimed We’re unable to correct your account with the information you provided on your amended return. Form 8864, Biodiesel and Renewable Diesel Fuels Credit, to support your claim was missing. Please submit another Form 1040-X with a completed Form 8864.
    Form 8880, Credit for Qualified Retirement Savings Contributions, is missing The amount claimed≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We’re unable to correct your account with the information you provided on your amended return. Form 8880, Credit for Qualified Retirement Savings Contributions, to support the changes you’ve made was missing. Please submit another Form 1040-X along with a completed Form 8880.
    Form 8907, Nonconventional Source Fuel Credit, is missing and Form 3800, General Business Credit, isn't attached Any amount claimed We’re unable to correct your account with the information you provided on your amended return. Form 8907, Nonconventional Source Fuel Credit, to support the changes you’ve made was missing. Please submit another Form 1040-X along with a completed Form 8907.
    Form 8910, Alternative Motor Vehicle Credit, is missing, and Form 3800, General Business Credit, isn't attached Any amount claimed We’re unable to correct your account with the information you provided on your amended return. Form 8910, Alternative Motor Vehicle Credit, to support the changes you’ve made was missing. Please submit another Form 1040-X along with a completed Form 8910.
    Form 8911, Alternative Fuel Vehicle Refueling Property Credit, is missing, and Form 3800, General Business Credit, isn't attached Any amount claimed We’re unable to correct your account with the information you provided on your amended return. Form 8911, Alternative Fuel Vehicle Refueling Property Credit, to support the changes you’ve made was missing. Please submit another Form 1040-X along with a completed Form 8911.
    Form 8917, Tuition and Fees Deduction, is missing Any amount claimed We’re unable to correct your account with the information you provided on your amended return. Form 8917, Tuition and Fees Deduction, to support the changes you’ve made was missing. Please submit another Form 1040-X with Form 8917.
    Form 8936, Clean Vehicle Credits, and/or Form 8936 Schedule A, is missing The Form 8936, and/or Form 8936 Schedule A, is missing We’re unable to correct your account with the information you provided on your amended return. Form 8936, Clean Vehicle Credits, and/or Form 8936, Schedule A, Clean Vehicle Credit Amount, which are required, to support the changes you’ve made was incomplete or missing. Please submit another Form 1040-X along with a completed Form 8936.
    Form 8936, Clean Vehicle Credits, and/or Form 8936 Schedule A, is missing The VIN number is missing We’re unable to correct your account with the information you provided on your amended return. The Vehicle Identification Number (VIN) on Form 8936, Schedule A, Clean Vehicle Credit Amount, which is required to support the changes you’ve made, was made was missing. Please submit another Form 1040-X and a completed Form 8936, Schedule A, with a VIN.
    Form W-2/W-2C is missing or doesn't reflect the exclusion An amended return is filed claiming an IRC 127 exclusion of $5,250 or less We’re unable to correct your account with the information you provided on your amended return. Form W-2, Wage and Tax Statement, to substantiate your reduction of wages due to employer provided educational assistance benefits was missing. Please submit another Form 1040-X with Form W-2 to substantiate your claim. We’ll accept a duplicate from your employer or a photocopy.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There's no explanation of the change and you're unable to determine through attachments We’re unable to correct your account with the information you supplied on your amended return. There’s not a sufficient explanation to determine what changes are being requested. Please submit another Form 1040-X with an explanation to tell us what changes were made to your income, deductions, or credits with the amounts and reason for each change.
    There's a new unsubstantiated credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There's no explanation of the change for the credit We’re unable to correct your account with the information you supplied on your amended return. There’s not a sufficient explanation to determine what changes are being requested. Please submit another Form 1040-X with an explanation to tell us what changes were made to your income, deductions, or credits with the amounts and reason for each change.
    Form 1040-X Column A doesn't match IDRS The return can't be perfected and there's not an amended Form 1040 attached We’re unable to correct your account with the information you provided on your amended return. The amounts entered in Column A, Original amount, don't match our records, and it’s unclear what adjustment(s) are being requested. Please verify your information and submit another Form 1040-X.
    Form 1040-X Column A does match the information on IDRS The return can't be perfected and there's not an amended Form 1040 attached We’re unable to correct your account with the information you provided on your amended return, it’s unclear what adjustment(s) are being requested. Please verify your information and submit another Form 1040-X.
    Any Form or Schedule (not previously listed) is missing to support the change The refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for net balance due. See IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C). We're unable to correct your account with the information you supplied on your amended return. [Form/Schedule XXXX] to support your claim was missing. Please submit another Form 1040-X with [Form/Schedule XXXX].
    Notice 2014-7 exclusion is claimed The required information is missing

    1. First fill-in: Please provide the full name and social security number of the person receiving homecare, copies of third-party documents for you and the person receiving homecare to verify that they resided in the same home for the tax year the is being credit claimed, and evidence the individual receiving care is under a state Medicaid waiver program.

    2. Second fill-in: Acceptable documents are legible copies of governmental and social service documents, medical and utility bills for the tax year the is credit claimed. Verification showing the person receiving homecare, and all payments being claimed for the exclusion were for the tax year are through a qualified state Medicaid waiver program. Handwritten notes and letters won’t be considered.

  4. The following table is a guide in corresponding with the taxpayer for signature issues.

    If ... And ... Fill-in(s) ...
    A signature is missing Conditions in IRM 3.11.6.4.6, Signature, paragraphs 5, 6, 8, and 9 don't apply We're unable to process your amended return because it wasn’t signed. Please complete, sign, and submit another Form 1040-X.
    A signature is missing on a decedent return The return isn't signed by a surviving spouse, an executor, or an administrator We're unable to process your amended return because it wasn’t signed. Please complete, sign, and submit another Form 1040-X. Additionally, if one spouse is deceased, then the surviving spouse must sign the return indicating “Filing as Surviving Spouse” in the signature area and include the date of death.

    Caution:

    Don't address correspondence to the deceased taxpayer.
    The return is signed by someone other than the taxpayer (there's clear indication that the TP is a minor child) A parent didn't sign, or fiduciary relationship such as a Guardian is clearly identified and the tax decrease/credit increase ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ We're unable to process your amended return because it wasn’t signed by you. Please complete, sign, and submit another Form 1040-X. If you’re a parent signing for a minor child, you must sign the child’s name and your name, writing “parent of minor child” in the signature area.
    The return is signed by someone other than the taxpayer The following apply:

    • No General/Durable POA is attached

    • Form 2848 isn't attached

    • Form 8821, Tax Information Authorization, is attached and the appointee signed the return

    • There’s no declaration of good standing attached and POA is granted to an attorney, CPA enrolled agent, or enrolled actuary

    		 We’re unable to process your amended return because it wasn't signed by you. Please complete, sign, and submit another Form 1040-X. If someone signs the return on your behalf, you must send us a power of attorney or court certificate or Form 2848, Power of Attorney and Declaration of Representative.
    The signature on the return doesn't match a representative listed on CFINK, or no record is found,
    or SIGN: field on CC CFINK is marked "NO"    		 Form 2848 isn't attached We're unable to process your amended return because it wasn't signed by you. Please complete, sign, and submit another Form 1040-X. If you can’t write your name, please sign your mark with two witnesses present. The witnesses must also sign next to your mark.
    The return is signed with an “X” Two witnesses didn't sign We're unable to process your amended return because it wasn't signed. Please complete, sign, and submit another Form 1040-X. If you can’t write your name, please sign your mark with two witnesses present. The witnesses must also sign next to your mark.
    The jurat is missing

    Note:

    if the jurat has been altered route as Frivolous

    		 There's no amended Form 1040 attached or if attached the jurat is missing Send 324C letter and don't mail the return back.
    The signature is missing Correspondence is being sent per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP) We're unable to process your amended return because it wasn't signed. Additionally, you can’t claim (what’s being disallowed) because [reason for disallowance]. Please complete, sign, and submit another Form 1040-X.
3.11.6.11.2 (01-02-2024)

Letter 324C Correspondence Table of Issues

  1. When sending Letter 324C use the appropriate fill-in from the tables below. These tables address the most common correspondence issues.

  2. The following table is a guide in corresponding with the taxpayer on Entity issues, it isn't all-inclusive.

    If ... And ... Fill-in(s) ...
    Tax Period is missing You can't determine the correct tax period through IDRS research and attachments Send Letter 178C.
    The taxpayer tries to submit an amended return for multiple tax periods on a single amended return   Send Letter 178C.
    Primary TIN and/or Secondary TIN can't be determined ALL attempts have been made (e.g., reviewed attachments, IDRS research, etc.) to secure the TIN Use the appropriate paragraphs from the Letter 324C .
    TP is changing to FS 2 (MFJ) and the Secondary TIN can't be determined ALL attempts have been made (e.g., reviewed attachments, IDRS research, etc.) to secure the TIN Use the appropriate paragraphs from the Letter 324C .
    The TP is changing to FS 4 (HOH) The TP is claiming a qualifying non-dependent and the name of the QND isn't provided. Use the appropriate paragraphs from the Letter 324C.
    The TP is changing to FS 4 (HOH) Removing all dependents and doesn't change to FS 1 (Single) or provide the name of the QND. Use the appropriate paragraphs from the Letter 324C .
    The dependent name and/or TIN is missing, or TIN and/or name doesn't match CC INOLE, or TIN can't be determined through IDRS research The taxpayer has not indicated a religious (e.g., “Amish,” “Mennonite,” or “Form 4029”) or conscience-based objection to obtaining a taxpayer identification number (TIN) Use the appropriate paragraphs from the Letter 324C.
    The dependent name and/or TIN is missing, or TIN and/or name doesn't match CC INOLE, or TIN can't be determined through IDRS research There’s a statement indicating either the dependent isn't deceased or was born before the tax year if deceased Use the appropriate paragraphs from the Letter 324C .
    One or more ITIN(s) is Inactive The entire return is unprocessable because of an increase to a credit that is based on an inactive ITIN Send Letter 178C.
    One or more ITIN(s) is Inactive Some issues are processable and the allowable adjustment changes the taxpayer’s expected refund/balance due Send Letter 178C.

  3. The following table is a guide in corresponding with the taxpayer for missing Forms and Schedules, it isn't all-inclusive.

    If ... And ... Fill-in(s)
    The amount shown on a supporting form or schedule differs from the amount shown on the Form 1040-X ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .
    Schedule A, Itemized Deductions, is missing The TP is changing from a standard deduction to itemized deduction or TP is increasing deductions on an existing Schedule A and doesn't explain the type of deduction and the change isn't the result of a ripple effect Use the appropriate paragraphs from the Letter 324C .
    Schedule EIC, Earned Income Credit Is missing and the change isn't the result of a ripple effect Use the appropriate paragraphs from the Letter 324C.
    Schedule EIC, Earned Income Credit The qualifying child's SSN doesn't verify Use the appropriate paragraphs from the Letter 324C .
    Schedule LEP, Request for Change in Language Preference Schedule LEP was either illegible, had multiple selections, was incomplete, or missing. Use the appropriate paragraphs from the Letter 324C .
    Schedule R, Credit for the Elderly or the Disabled, is missing or incomplete Any amount claimed Use the appropriate paragraphs from the Letter 324C .
    Schedule SE, Self-Employment Tax The schedule is attached and the return is FS 2 and both taxpayers have SE tax. The taxpayers have combined their SE tax onto one Schedule SE Taxpayers filing jointly must each file a separate Schedule SE if both spouses have self-employment income.
    Note: On a married filing join return and both spouses have self-employment income (SEI) or you're unable to determine which spouse the SEI belongs to, use an open paragraph to add the fill in: Taxpayers filing jointly must each file separate Schedules SE if they both have self-employment income.
    Schedule SE, Self-Employment Tax You can't determine which TP account to adjust Taxpayers filing jointly must each file a separate Schedule SE if both spouses have self-employment income.
    Note: On a married filing join return and both spouses have self-employment income (SEI) or you're unable to determine which spouse the SEI belongs to, use an open paragraph to add the fill in: Taxpayers filing jointly must each file separate Schedules SE if they both have self-employment income.
    Form 1040-X lines 1 – 15 Columns A and C match the information on IDRS There's no explanation of the change, and you're unable to determine through attachments Use the appropriate paragraphs from the Letter 324C .
    Form 2106, Employee Business Expenses, is missing; there's no explanation of source of the miscellaneous deductions The amount of the unreimbursed employee expense ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .
    Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on line 15 of Form 1040-X Use the appropriate paragraphs from the Letter 324C .
    Form 2441, Child and Dependent Care Expenses, is missing The change isn't the result of a ripple effect Use the appropriate paragraphs from the Letter 324C.
    Form 2441, Child and Dependent Care Expenses, is missing Lines 1c or 2b can't be determined through research Use the appropriate paragraphs from the Letter 324C .
    Form 3800, General Business Credit, or the supporting forms are missing for a specific credit The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .

    Note:

    Request the specific credit form. If the specific credit isn't known, request Form 3800, General Business Credit.
    Form 4136, Credit for Federal Tax Paid on Fuels, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .
    Form 4684, Casualties and Thefts Form 4684, Casualties and Thefts, is missing. Use the appropriate paragraphs from the Letter 324C.
    Form 4684, Casualties and Thefts The itemized deduction amount was recalculated Send Letter 178C.
    Form 4684, Casualties and Thefts The standard deduction amount was recalculated Send Letter 178C .
    Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts If the taxpayer is reporting they are not subject to the 10 percent penalty, Form 5329 must be attached. See IRM 3.11.6.14.2.4.1, Additional Tax on Early Distribution - Form 5329 and Form 1099-R (Line 10). Use the appropriate paragraphs from the Letter 324C .
    Form 5695, Residential Energy Credits, is missing The change isn't the result of a ripple effect or ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .
    Form 6478, Biofuel Producer Credit, is missing and Form 3800, General Business Credit, isn't attached Any amount claimed Use the appropriate paragraphs from the Letter 324C .
    Form 8606, Nondeductible IRAs, isn't attached The taxpayer is reporting or has indicated a change to a Nondeductible IRA in the explanation part of the Form 1040-X Use the appropriate paragraphs from the Letter 324C .
    Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, is missing A copy of the divorce decree or Form 2120 isn't attached Use the appropriate paragraphs from the Letter 324C .
    Schedule 8812, Credits for Qualifying Children and Other Dependents, is incomplete Can't be perfected or "dummied" by using AMS worksheets Use the appropriate paragraphs from the Letter 324C .
    Form 8396, Mortgage Interest Credit, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .
    Form 8826, Disabled Access Credit, is missing and Form 3800, General Business Credit, isn't attached Any amount claimed Use the appropriate paragraphs from the Letter 324C .
    Form 8834, Qualified Electric Vehicle Credit, is missing and Form 3800, General Business Credit, isn't attached The amount claimed isn't the result of a ripple effect Use the appropriate paragraphs from the Letter 324C .
    Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit, is missing and Form 3800, General Business Credit, isn't attached The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .
    Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), (line 7 and/or 15 of Form 1040-X) is attached The amount claimed isn't the result of a ripple effect Use the appropriate paragraphs from the Letter 324C.
    Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), (line 7 and/or 15 of Form 1040-X) is attached The EIN is missing and can't be determined through attachments or IDRS research Use the appropriate paragraphs from the Letter 324C.
    Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), (line 7 and/or 15 of Form 1040-X) is attached Lines 20 thru 22 in Part III of Form 8863 are not complete Use the appropriate paragraphs from the Letter 324C.
    Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), (line 7 and/or 15 of Form 1040-X) is attached The student’s name and/or TIN is missing and can't be determined

    Note:

    Form 1098-T may be used to determine the student’s name or TIN.

    		 Use the appropriate paragraphs from the Letter 324C .
    Form 8864, Biodiesel and Renewable Diesel Fuels Credit, is missing and Form 3800, General Business Credit, isn't attached Any amount claimed Use the appropriate paragraphs from the Letter 324C .
    Form 8880, Credit for Qualified Retirement Savings Contributions, is missing The amount claimed≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .
    Form 8907, Nonconventional Source Fuel Credit, is missing and Form 3800, General Business Credit, isn't attached Any amount claimed Use the appropriate paragraphs from the Letter 324C .
    Form 8910, Alternative Motor Vehicle Credit, is missing, and Form 3800, General Business Credit, isn't attached Any amount claimed Use the appropriate paragraphs from the Letter 324C .
    Form 8911, Alternative Fuel Vehicle Refueling Property Credit, is missing, and Form 3800, General Business Credit, isn't attached Any amount claimed Use the appropriate paragraphs from the Letter 324C .
    Form 8917, Tuition and Fees Deduction, is missing Any amount claimed Use the appropriate paragraphs from the Letter 324C .
    Form 8936, Clean Vehicle Credits, and/or Form 8936 Schedule A, is missing The Form 8936, and/or Form 8936 Schedule A, is missing Use the appropriate paragraphs from the Letter 324C.
    Form 8936, Clean Vehicle Credits, and/or Form 8936 Schedule A, is missing The VIN number is missing Use the appropriate paragraphs from the Letter 324C .
    Form W-2/W-2C is missing or doesn't reflect the exclusion An amended return is filed claiming an IRC 127 exclusion $5,250 or less Please provide a copy of your Form W-2, Wage and Tax Statement, to substantiate your claim for a reduction of wages due to employer provided educational assistance benefits. We will accept a duplicate from your employer or a photocopy.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There's no explanation of the change and you're unable to determine through attachments Use the appropriate paragraphs from the Letter 324C .
    There's a new unsubstantiated credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There's no explanation of the change for the credit Use the appropriate paragraphs from the Letter 324C .
    Form 1040-X Column A doesn't match IDRS The return can't be perfected and there's not an amended Form 1040 attached Please verify your information, the amounts entered in Column A, Original amount, don't match our records. Provide a complete copy of Form 1040X, page 1, and attach supporting forms and schedules to support the change(s) you're requesting.
    Form 1040-X Column A does match the information on IDRS The return can't be perfected and there's not an amended Form 1040 attached Use the appropriate paragraphs from the Letter 324C .
    Any Form or Schedule (not previously listed) is missing to support the change The refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for net balance due. See IRM 3.11.6.10.3, Corresponding on Net Balance Due Returns (Letter 324C). Use the appropriate paragraphs from the Letter 324C .
    Notice 2014-7 exclusion is claimed The required information is missing

    1. First fill-in: Please provide the full name and social security number of the person receiving homecare, copies of third-party documents for you and the person receiving homecare to verify that they resided in the same home for the tax year the is being credit claimed, and evidence the individual receiving care is under a state Medicaid waiver program.

    2. Second fill-in: Acceptable documents are legible copies of governmental and social service documents, medical and utility bills for the tax year the is credit claimed. Verification showing the person receiving homecare, and all payments being claimed for the exclusion were for the tax year are through a qualified state Medicaid waiver program. Handwritten notes and letters won’t be considered.

  4. The following table is a guide in corresponding with the taxpayer for signature issues.

    If ... And ... Fill-in(s) ...
    A signature is missing Conditions in IRM 3.11.6.4.6, Signature, paragraphs 5, 6, 8, and 9 don't apply Use the appropriate paragraphs from the Letter 324C .
    A signature is missing on a decedent return The return isn't signed by a surviving spouse, an executor, or an administrator Use the appropriate paragraphs from the Letter 324C .

    Reminder:

    Don't address correspondence to the deceased taxpayer.
    The return is signed by someone other than the taxpayer (there's clear indication that the TP is a minor child) A parent didn't sign, or fiduciary relationship such as a Guardian is clearly identified and the tax decrease/credit increase ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Use the appropriate paragraphs from the Letter 324C .
    The return is signed by someone other than the taxpayer The following apply:

    • No General/Durable POA is attached

    • Form 2848 isn't attached

    • Form 8821, Tax Information Authorization, is attached and the appointee signed the return

    • There’s no declaration of good standing attached and POA is granted to an attorney, CPA enrolled agent, or enrolled actuary

    		 Use the appropriate paragraphs from the Letter 324C .
    The signature on the return doesn't match a representative listed on CFINK, or no record is found,
    or SIGN: field on CC CFINK is marked "NO"    		 Form 2848 isn't attached Use the appropriate paragraphs from the Letter 324C .
    The return is signed with an “X” Two witnesses didn't sign Use the appropriate paragraphs from the Letter 324C .
    The jurat is missing

    Note:

    if the jurat has been altered route as Frivolous

    		 There's no amended Form 1040 attached or if attached the jurat is missing Use the appropriate paragraphs from the Letter 324C .
    The signature is missing Correspondence is being sent per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP) Use the appropriate paragraphs from the Letter 324C.
3.11.6.12 (01-02-2024)

Updating Taxpayer Information Using CC ENMOD

  1. This section provides information on changes made to filing status, Schedule LEP, Request for Change in Language Preference, and Form 9000, Alternative Media Preference. Evaluate each situation to determine when to adjust a taxpayer’s filing status, language and alternative media preference.

3.11.6.12.1 (01-02-2024)

Entity Changes

  1. If the taxpayer requests their refund be issued in a name or address other than the one shown on the adjustment, send the case to AM per IRM 3.11.6.7.16, Accounts Management Case Screening.

  2. When making any Entity changes, input the change on IDRS using CC ENREQ to generate the CC INCHG screen.

  3. A signature (both if MFJ) is required before an address change can be input. If signature correspondence is required, use the address of record.

    Exception:

    A signature isn't required on an undelivered mail piece with an affixed USPS yellow label. Follow paragraph 8 below.

  4. Don't update the Entity section if an adjustment isn't being input or the return is being sent to another area.

  5. Input a posting delay code on any adjustment when making any changes to the taxpayer's address or name line information.

  6. If there's a pending change that affects the return you're processing, input a posting delay code.

  7. Follow the instructions in the table below when a name change is requested:

    If ... Then ...
    Taxpayer files a Form 1040-X to indicate a name change only Check CC INOLE for NEW SSA/NC or SSA:

    1. If the name control on Form 1040-X matches the "NEW" SSA/NC or SSA, input TC 290 .00 and send the case to Files. Don't update the name.

    2. If the name control on Form 1040-X doesn't match the "NEW" SSA/NC or SSA, route the return to Entity with the following notation in the comments section of the routing slip: "Name change request -- don't process 1040-X."
    Taxpayer files a Form 1040-X to indicate a name change and tax changes are also required Check CC INOLE for NEW SSA/NC or SSA:

    1. If name control on Form 1040-X matches the "NEW" SSA/NC or SSA, continue to process the return, if no route out criteria is present. Don't update the name.

    2. If the name control on Form 1040-X doesn't match the "NEW" SSA/NC or SSA, send the case to AM.

    Note:

    Taxpayers sometimes use variations of their first name, including using initials when filing original (verification is performed by matching the name control to the SSN) and amended returns This isn't considered an indication of a name change unless the taxpayer is specifically asking for a name change. If the taxpayer is requesting to change the name the table above would be followed.

    Exception:

    Input name change only if there's a clear indication that the name was transcribed incorrectly (e.g., ANDERSON transcribed as ANDESON).

3.11.6.12.1.1 (01-02-2024)
Address Changes

  1. Don't update the address if an address change has posted after the Form 1040-X received date. Use CC ENMOD to verify cycle date. If the 1040-X is received in the same cycle that an address change has posted then update the address to the address on the 1040-X.

  2. If the address on the 1040-X doesn't match CC ENMOD or one of the conditions below applies, update the address.

    1. Taxpayer alters the address in the Entity of the Form 1040-X or on a CP notice.

    2. Taxpayer specifically indicates in the Explanation of Changes.

    3. Taxpayer attaches a separate sheet or Form 8822 requesting the address change.

    Note:

    If working a Form W-7 to reactivate an ITIN, see IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7).

  3. Upon receipt of any undelivered mail piece with an affixed USPS yellow label, research and update the address following the table. If the case you're working doesn’t fall into one of the issues in table, don't update the address.

    Exception:

    An address on a yellow label becomes the taxpayer's last known address unless taxpayer provides clear and concise notification of a change of address, or the Service properly processes a taxpayer's federal income tax return with a different address per paragraph 4 above.

    If the taxpayer’s... And ... Then ...
    Name printed in the letter What is shown on the "yellow label" are exactly the same Update the taxpayer address to the “yellow label” address.
    Mailing address differs from the "yellow label" The name printed on the "yellow label" is an exact match to the correspondence Update the taxpayer’s mailing address to the “yellow label” address. Then reissue the correspondence to the taxpayer’s updated mailing address.
    First name is similar to the one on the "yellow label" The last name is an exact match Confirm whether IRS records show any other taxpayers with similar first names and the exact same last name at the same address. If not, update the taxpayer address. Otherwise, don't update the taxpayer address.

  4. If both a PO Box and a street address are present on Form 1040-X, input the PO Box on the address line and the street address on the continuation of the name line. If the city and zip code differ between the PO Box and the other address listed use the city and zip code of the PO box.

  5. The In-Care-Of (C/O) is considered part of the address. If the entity information on IDRS shows an In-Care-Of person, but the amended return doesn't, update the Entity on IDRS and vice-versa. Use CC INCHG field "CONTINUATION-OF-PRIMARY NAME" to update In-Care-Of information.

  6. If the address on the amended return appears incomplete, research the return packet for the missing information or use www.USPS.com to verify the address.

  7. For address changes on multiple year returns from the same taxpayer, use the address on the most current return.

  8. If the taxpayer used Form 1040-X instead of Form 8822 to inform us of an address change and there's no tax adjustment, update the address and process the return by inputting a TC 290 .00, Reason Code 099, Source Code 1.

  9. When Form 8822 is attached and the Form 1040-X is being routed, detach Form 8822, send the case to Entity.

3.11.6.12.1.2 (01-02-2024)
Filing Status Changes

  1. If a Form 1040-X is received requesting a filing status change, and a TC 971 AC 137 is present on the module, send the case to AM.

  2. SP won’t adjust an account when both taxpayers previously filed a married filing separate, single, or head of household return and are now filing married filing joint. These cases require backing out tax information or merging accounts. Send to AM.

  3. Use the following chart when making a filing status change:

    If the taxpayer changes the filing status on Form 1040-X ... And ... Then ...
    From FS 0   Update the FS based on Form 1040-X.
    To FS 1 (Single)   Update INCHG to FS 1. Use RC 001.
    To FS 2 (Married Filing Jointly)   Update INCHG to FS 2. Use RC 002. See IRM 3.11.6.12.1.2.1, Filing Status 2 Changes.
    From FS 2 (Married Filing Joint)   Send the case to AM.
    To FS 3 (Married Filing Separate) From FS 1, FS 4, or FS 5 Update INCHG to FS 3. Use Reason Code 003. Enter the spouse’s SSN if known.

    Note:

    When changing to FS 3, review credit eligibility requirements and take appropriate action.
    From FS 3 (Married Filing Separate) Changing to FS 1, FS 4, or FS 5 The spouse’s SSN field may populate with 000-00-0001. This action removes the cross-reference and should not be altered. When manually changing from FS 3, input the spouse’s SSN following this example.
    To FS 4 (Head of Household) The taxpayer is claiming:

    1. A dependent (name/TIN matches CC INOLE)

    2. A non-dependent (name and QND are provided or claimed for EIC)

    3. Any of the information in 1 or 2 is missing or doesn't match

    1. Update INCHG to FS 4. Use RC 004.

    2. Update INCHG to FS 4. Use RC 004.

    3. Correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.
    To FS 5 (Qualifying Surviving Spouse)   Update INCHG to FS 5. Use RC 005.
    To FS 6 Married Filing Separate return and spouse isn't required to file a return and spouse exemption is claimed   Send the case to AM.
    From FS 6 Married Filing Separate return and spouse isn't required to file a return and spouse exemption is claimed   Send the case to AM.
    From FS 7   Update the FS based on Form 1040-X.

3.11.6.12.1.2.1 (01-02-2024)
Filing Status 2 Changes

  1. For FS 2 (MFJ) changes, research for a TC 150 on both the primary and secondary taxpayer's account. Use CC NAME to verify the taxpayer has not previously filed under a different TIN for the tax year that you’re working. If both taxpayers have a TC 150 posted, send the case to AM.

    Note:

    If the spouse’s account is set up on the invalid segment of master file (an asterisk after the TIN (000-00-0000*), send the case to AM.

  2. For the tax year you’re working, if one spouse didn't previously file a return, adjust the established account of the taxpayer that has filed, to reflect the amended joint return.

    Exception:

    If the non-filed taxpayer has income that exceeds the exemption amount in IRM 3.11.6.13, Personal Exemption or Dependent Change, and the ASED is less than one year from the IRS Received Date, then send the case to AM.

  3. Send the case to AM if any of the following conditions apply to the account of the taxpayer who didn't previously file:

    • If a TC 140 is present

    • If a TC 460 is present

    • If an E- freeze is present

    • Any available credit or payments requiring a transfer to the primary account

    Note:

    When researching spouse, search for ID Theft markers. See IRM 3.11.6.7.8, Identity Theft (IDT) Screening.

  4. When adding a spouse, perform thorough research, to verify spouse’s name and TIN using IDRS and attachments. If a TIN is obviously inappropriate, for example (111-11-1111) or (123-45-6789) or a similar TIN configuration, missing, incorrect, or illegible, see IRM 3.11.6.4.4, Taxpayer Identification Number (TIN).

  5. When the taxpayer adds a spouse that has an ITIN, research CC INOLE for the current ITIN status. See IRM 3.11.6.16.14.2, Individual Taxpayer Identification Number (ITIN) Status, for processing instructions.

  6. If the spouse is changing from an ITIN to a valid SSN, send the case to AM. See IRM 3.11.6.4.4, Taxpayer Identification Number (TIN).

  7. When editing (adding, replacing, changing, and/or deleting) a spouse, update the DUPOL database using CC DDBCK to correct the filing status and the secondary’s information (including EX/DP and Education Credit, if applicable). When DDBCK isn't available use CC DUPED. See IRM 3.11.6.13.5, Command Code DUPED.

    Exception:

    If the only change is a filing status change to FS 2, and no credits are being claimed for the spouse, don’t update the DUPOL database.

  8. The Form 1040 has two separate lines available for taxpayers to use when filing jointly, master file contains only one primary name line. There are 35-character spaces available for both taxpayer names. The bracket "]" is interpreted as a space. Don't use the second line as a continuation of the name line.

  9. The entering of two brackets around the PRIMARY taxpayer’s last name is required when the SECONDARY taxpayer’s last name is different than the primary taxpayer’s last name. Don't input an additional space before or after the bracket when entering taxpayer names. The ampersand (&) indicates a break in joint filers’ names.

  10. The correct methods to input name changes are shown below: The italicized print indicates the primary taxpayer’s name control.

    Tax Return Input Format for Joint Filers
    John Owl
    Mary Owl    		 John & Mary]Owl
    John Owl
    Mary Shark    		 John]Owl]& Mary Shark
    John Owl
    Mary Shark-Owl    		 John]Owl]& Mary Shark-Owl
    John D Owl
    Mary Ann Shark- Owl    		 John D]Owl]& Mary Ann Shark-Owl
    John D Owl III
    MaryAnn L Shark    		 John D]Owl]III & MaryAnn L Shark
    John D Owl Jr
    MaryAnn L Owl    		 John D Jr & MaryAnn L]Owl
    MaryAnn L Owl
    John D Owl Jr    		 MaryAnn L & John D]Owl]Jr

  11. Before shortening any taxpayer name(s), all necessary research must be conducted (i.e., CC INOLE, CC RTVUE, CC IMFOL, CC NAMES, CC NAMEI) under both segments of the master file.

  12. When taxpayers file jointly and it’s necessary to reduce the taxpayers’ Name Lines or Name Controls, it’s important to retain the first four characters of the secondary taxpayer’s surname.

  13. If the primary and secondary name(s) exceeds the 35-character space limit, use the following instructions, in the order presented, to correctly reduce the length of the taxpayer’s name:

    1. Substitute the appropriate initial for the secondary taxpayer’s middle name

    2. Delete middle initial of secondary taxpayer

    3. Substitute the appropriate initial for the primary taxpayer’s middle name

    4. Delete middle initial of primary taxpayer

    5. Substitute the appropriate initial for the secondary taxpayer’s first name

    6. Substitute the appropriate initial for the primary taxpayer’s first name

    7. Substitute the appropriate initials for both the primary and secondary taxpayers' first name(s) if their last name(s) total characters exceed the 35-character spaces limit

    8. Abbreviate the secondary taxpayer’s surname. Abbreviate the surname by removing the vowels (begin with the vowels at the end of the secondary taxpayer’s surname first)

      Example:

      Clydesdale becomes Clydesdal or Clydesdl or Clydsdl (if necessary)

    9. Abbreviate the primary taxpayer’s surname as the last step. Abbreviate the surname by removing the vowels (begin with the vowels in the end of the primary taxpayer’s surname)

      Example:

      Appaloosa becomes Appaloos or Appalos or Appals (if necessary).

3.11.6.12.2 (01-03-2023)

Schedule LEP, Request for Change in Language Preference

  1. Refer to IRM 22.30.1.8.16.4.1, Executive Order 13166, Improving Access to Services for Persons with Limited English Proficiency (LEP) and Return Preparation Service, for background information on Schedule LEP, Request for Change in Language Preference.

  2. If the name and TIN that appear on the Schedule LEP don’t match or aren't clearly marked (i.e., illegible or multiple selections), take the following action:

    1. Don't update the language preference.

    2. Input the requested adjustment from the amended return, if applicable.

    3. Send Letter 178C to request a new Schedule LEP per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins. Continue processing the case. Don't send the return or Schedule LEP back to the taxpayer.

  3. When Schedule LEP is attached, review CC ENMOD for a TC 971 AC 192. If present, compare the third, fourth and fifth digits of the MISC field to Schedule LEP to determine if there's a change.

    Caution:

    Both primary and secondary taxpayers may file a Schedule LEP. Be sure to research CC ENMOD for the taxpayer indicated on Schedule LEP.

  4. If a TC 971 AC 192 is present on CC ENMOD, and third, fourth, fifth digits match Schedule LEP, take no action.

  5. If a TC 971 AC 192 isn’t present on CC ENMOD, or the third, fourth, and fifth digits don’t match, input the change using the IAT REQ77 tool for the taxpayer indicated on Schedule LEP as follows:

    Reminder:

    Start the IAT REQ77 tool from the ENMOD screen. If the MFT and TX-PRD fields are not cleared out prior to starting the tool research, an error will occur when making the input.

    1. In the Transaction Code field, input 971.

    2. In the 971/151 code field, input 192.

    3. In the Miscellaneous field, input the three-digit code from Schedule LEP.

      Note:

      Insert two blank spaces before inputting the Schedule LEP code. The first two-digits are reserved for future use.

      Example:

      If the Schedule LEP code is 001, the Miscellaneous field input is xx001(xx = two blank spaces).

    4. Leave the Transaction Date field blank.

    5. In the Remarks field, input "SCH LEP REQUEST"

  6. If present on CC ENMOD, and third, fourth, fifth digits don't match Schedule LEP, input the Schedule LEP Change following paragraph 4 above.

    Note:

    In the Remarks field, input "SCH LEP CHANGE"

3.11.6.12.3 (12-01-2022)

Form 9000, Alternative Media Preference

  1. When a Form 9000 is attached to an amended return, review CC ENMOD for a TC 971 AC 592. If present, compare the first- and second-digits of the MISC field to the Form 9000 to determine if there's a change.

  2. If present on CC ENMOD, and first- and second-digits match Form 9000, take no action.

  3. If not present on CC ENMOD, input the change using the IAT REQ77 tool as follows:

    Reminder:

    Start IAT REQ77 tool from the ENMOD screen. If the MFT and TX-PRD fields are not cleared out prior to starting the tool research an error will occur when making the input.

    1. In the Transaction Code field, input 971.

    2. In the Secondary date field, enter the received date of the amended return.

    3. In the 971/151 code field, input 592.

    4. In the Miscellaneous field, input the two-digit code and the received from Form 9000.

      Example:

      If the Form 9000 code is 01 and the received date is 01012023, then input 01x 01012023 (x= one blank space).

    5. Leave the Transaction Date field blank.

    6. In the Remarks field, input F9000 REQUEST

  4. If present on CC ENMOD, and first- and second-digits don't match Form 9000:

    1. Reverse the TC 971 AC 592 using the IAT REQ77 tool as follows:
      - In the Transaction Code field, input 972.
      - In the 971/151 code field, input 592.
      - In the Miscellaneous field, input the two-digit code from the TC 971 AC 592 MISC field.

      Example:

      If the code is 02, then input, 02.


      - In the Transaction Date field, input the date of the TC 971 AC 592.
      - In the Remarks field, input F9000 REVERSAL

    2. Input the Form 9000 change following paragraph 3 above.

      Note:

      In the Remarks field, input F9000 CHANGE

3.11.6.13 (01-02-2024)

Personal Exemption or Dependent Changes

  1. Send the case to AM if:

    • Advanced Premium Tax Credit is present

    • Premium Tax Credit is present

    • CDR research indicates APTC was paid on behalf of the dependent.

    • Form 8962, Premium Tax Credit (PTC) is attached.

    • The taxpayer has a notation or attachment that states a religious (e.g., “Amish,” “Mennonite,” or “Form 4029”) or conscience-based objection to obtaining TINs for dependents.

  2. For 2018 through 2025, taxpayers are not allowed personal exemptions for themselves, spouses, or dependents. When a taxpayer is trying to amend their dependent status, follow the table below.

    If ... Then ...
    The taxpayer can’t be claimed as a dependent on another return.

    1. Process per normal procedures.

    2. Update the DUPOL database.
    The taxpayer can be claimed as a dependent on another return.

    1. Process per normal procedures.

    2. Update the DUPOL database.

    Reminder:

    Remove any related credits.

  3. If a taxpayer is adding a spouse, see IRM 3.11.6.12.1.2.1, Filing Status 2 Changes.

  4. If there's an indication that the dependent doesn't live with the taxpayer, see IRM 3.11.6.13.2, Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents.

  5. If the taxpayer changes the number of dependents, their filing status may also change.

    Note:

    If taxpayer is filing status 4, HOH, and removes all dependents, correspond for qualifying non-dependent (QND) if the taxpayer doesn't change filing status to FS1.

  6. When adding a dependent, perform thorough research, to verify a dependent’s name and TIN using IDRS and attachments. If a TIN is obviously inappropriate, for example (111-11-1111) or (123-45-6789) or a similar TIN configuration, correspond for the correct TIN per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

    If ... and ... Then ...
    The TIN and Name Control (NC) match any of the CC INOLE information or CC DDBKD The TIN was timely assigned, and the ITIN status (if needed) is active Allow the dependent, adjust the account, and update CC DDBCK.
    The TIN and NC don't match any of the CC INOLE information or CC DDBKD, use the IAT Name Search tool for the correct TIN and NC The correct TIN and NC are found Follow the instructions in the box above.
    The TIN and NC don't match any of the CC INOLE information or CC DDBKD, use the IAT Name Search tool for the correct TIN and NC The correct TIN and NC are not found Correspond IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.
    Exception: When working returns received from the ITIN department, see IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7).
    The taxpayer states they could not obtain a TIN because a child was born and died in the same tax year The taxpayer provides any of the following documentation:

    • Birth certificate

    • Death certificate

    • Doctor/midwife statement on letterhead with business address and telephone number

    • Copies of hospital medical records

    		 Process as normal.
    Note: Don't update the DUPOL database.
    The taxpayer states they could not obtain a TIN because a child was born and died in the same tax year If the taxpayer has not provided the required documentation Input a corrected adjustment per IRM 3.11.6.16.5, Inputting a Corrected Adjustment, and correspond per IRM 3.11.6.10.11, Correspondence for Dependent Documentation (Letter 3050C).

  7. If the taxpayer attempts to add a dependent who that will be born in a future year or who died in a prior year, see IRM 3.11.6.16.5, Inputting a Corrected Adjustment. Use fill-in: We didn't add your dependent as requested based on the dependent's date of birth or date of death.

  8. If the taxpayer is adding, replacing, changing, or deleting a dependent and you can't determine the correct dependent or it is unclear, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

    Exception:

    In a situation in which the dependent(s) being added has a rejected ITIN and therefore won’t have an SSN, see the instructions per IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7).

  9. When adding, replacing, changing, or deleting dependents, see IRM 3.11.6.13.3, Updating the Duplicate Taxpayer Identification Number (TIN) OnLine (DUPOL) Database. For amended returns or claims in which the taxpayer is removing exemptions or dependents, remove any associated credits.

  10. If the dependent previously had an ITIN and now has a valid SSN, follow IRM 3.11.6.13.1, Revoking a Dependent’s ITIN.

3.11.6.13.1 (01-02-2024)

Revoking a Dependent’s ITIN

  1. If a dependent’s TIN is being changed from an ITIN to SSN, the ITIN must be revoked. To revoke the ITIN, prepare Form 4442 and send it to the Austin ITIN Unit. Form 4442, Part III, Section B, must have the following statements:

    • Revoke ITIN (insert the ITIN of the dependent being revoked).

    • New SSN is (insert the dependent’s new SSN).

    • The dependent's name is (insert the dependent’s name) and D.O.B. is (MMDDYYYY).

    • REASON: The dependent now has a valid SSN.

    • See reference: IRM 3.11.6.13

    • Request for dependent - Merge Not Needed

  2. Update the DUPOL database.

3.11.6.13.2 (01-09-2023)

Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents

  1. Send the case to AM if the taxpayer submits a copy of their divorce decree with, or without, Form 2120, Multiple Support Declaration, and doesn't submit Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.

  2. For tax years 2018-2025, due to Tax Cuts and Jobs Act, Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, is used for dependent credit documentation.

  3. When a non-custodial parent claims a child as a dependent who didn't live with them under the rules for children of divorced or separated parents, the taxpayer indicates this by:

    • Attaching Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent

    • Entering an amount on Form 1040-X, page 2, Part I, line 26, Your dependent children who didn’t live with you due to divorce or separation

    • Listing the child on Form 1040-X, page 2, Part 1, line 30, List ALL dependents (children or others) claimed on this amended return

    • Notating in Part III, Explanation of Changes, area of the Form 1040-X

      Reminder:

      Review IRM 3.11.6.13, Personal Exemption or Dependent Changes.

  4. The non-custodial parent must attach a Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  5. Update the DUPOL database.

3.11.6.13.3 (06-05-2023)

Updating the Duplicate Taxpayer Identification Number (TIN) OnLine (DUPOL) Database

  1. The Duplicate TIN OnLine (DUPOL) database contains tax return information for the current and two prior tax processing years and provides duplicate SSN data for research purposes.

  2. Submission Processing is responsible for updating the DUPOL database when editing (adding, replacing, changing, or deleting) records. Use CC DDBCK unless specifically instructed to use CC DUPED.

  3. If instructed to use CC DUPED, update for current year only. If it is a prior year, don't update the DUPOL database, continue processing the return.

  4. When adding a credit or dependent requiring TIN validation, always use CC INOLE or CC DDBKD to verify the TIN, NAME, and date of birth (DOB) prior to updating the DUPOL database.

  5. When deleting a dependent, verify the taxpayer is removing credits associated with the dependent. The credits received on behalf of each dependent are listed on the CC DDBCK screen. The taxpayer should remove all Child Tax Credit (CTC), Additional Child Tax Credit (ACTC), Credit for Other Dependents (ODC), Education Credits, and Adoption Credit that were received based on the dependent. The taxpayer may qualify for the Earned Income Tax Credit (EITC) and Child and Dependent Care Credit in special circumstances. If the taxpayer didn't remove CTC, ACTC, ODC, and Education Credits, you must reverse the credit(s) and input a corrected adjustment following procedures in IRM 3.11.6.16.5, Inputting a Corrected Adjustment. If the taxpayer claimed Adoption Credit, send the case to AM.

  6. When the taxpayer is changing to FS 3, follow IRM 3.11.6.12.1.2, Filing Status Changes.

  7. Send the case to AM if the account has been merged or resequenced and an update to the DUPOL database is required.

  8. Use the following chart for determining when/if to update the DUPOL database:

    If ... Then ...
    Taxpayer is adding or removing:

    • An exemption for primary or secondary taxpayer
      Reminder: If the only change is a filing status (FS) change to FS 2, and no credits are being claimed for the spouse, don’t update the DUPOL database.

    • A dependent

    • Earned Income Credit (for dependents), see IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits.

    • EIC increase due to changes in income other than Form W-2, see IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits.

    • Child and Dependent Care Credit

    • Education Credit

    • Child Tax Credit

    • Additional Child Tax Credit when the qualifying dependent is eligible for CTC, but can't be claimed on line 7

    • Credit reduced to zero

    • EITC TIN-related Math Errors, see IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits.

    • TIN related Math Errors

    • ITIN to SSN for dependents

    		 Update using CC DDBCK then continue processing the return.

    Note:

    For 2019 and subsequent amended returns (or claims) in which the taxpayer is trying to change exemption(s), see IRM 3.11.6.13, Personal Exemption or Dependent Changes.

    • CP 08 responses

    • CP 27 responses

    • Amended return where the taxpayer is claiming EIC for self/spouse only, see IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits.

    • Requesting filing status change which doesn't affect exemption or credit allowance

    • EITC increase due to Form W-2, see IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits.

    • EITC NON-TIN related Math Errors, see IRM 21.5.3-3, Examination Criteria (CAT-A) - Credits.

    		 Continue processing the return.

    Note:

    Don't update DUPOL database.

    • Math error code 653 is posted on IDRS

    • The child failed validation (other than an invalid TIN/Name issue)

    		 Send the case to AM.

    • DDBCK input screen is full (6 dependents were previously claimed)

    • CP 09 responses

    • Child Care Credit and the qualifying dependent is over age of 12 but disabled or turns age 13 in the year being claimed

    • NON-TIN related Math Errors

    • Employee doesn't have access to CC DDBCK

    		 Update using CC DUPED (current year only). See IRM 3.11.6.13.5, Command Code DUPED.

3.11.6.13.4 (01-02-2024)

Command Code DDBCK (Dependent Database Check)

  1. Command Code (CC) DDBCK (Dependent Database Check) is used to update the Duplicate TIN OnLine (DUPOL) database which is used for validating dependents and certain credits. CC DDBCK can be updated for the current tax year and two years prior. DDBCK checks:

    • If the TIN or Name Control doesn't match INOLE data

    • If child is deceased or doesn’t meet the age criteria to qualify the taxpayer for a credit

    • If a DDB rule is broken

    • If DUPTIN database indicates a duplicate use of a TIN

  2. When updating DDBCK, use the primary’s TIN of the return. It displays the dependents and qualifying children from the original posted return or as last modified.

  3. When updating dependent and/or credit information, CC DDBCK must be used prior to inputting an adjustment.

  4. When working EITC TIN-Related Math Error responses, overlay the YYYYMMDD on the CC DDBCK Return Summary Screen, under Change Dates, with the received date of the Form 1040-X.

  5. When required to update CC DDBCK, use the following chart.

    If ... and ... Then Use ...
    EITC is decreasing or isn't involved Dependent and/or spouse is being changed, added, deleted
    Reminder: If the only change is a filing status (FS) change to FS 2, and no credits are being claimed for the spouse, don’t update the DUPOL database.
    or
    there's an increase to ACTC and/or AOTC

    Note:

    For 2018 - 2025 amended returns or claims in which the taxpayer is trying to change exemption(s), see IRM 3.11.6.13, Personal Exemption or Dependent Changes.

    1. CATEGORY: EIC"N" .

    2. CLAIM AMOUNT: "0" .

    3. SCHED C: "N" .

    4. AGI INC/DEC: Skip.

    5. EITC INC/DEC: Skip.

    6. RefCR: Total of increases to ACTC and/or AOTC.
    EITC is increasing and doesn't involve an EITC Math Error Schedule C isn't attached, not changing, or is being removed

    1. CATEGORY: EIC"X" .

    2. CLAIM AMOUNT: The net refund/balance due of the MFT 30 adjustment (dollars only).

    3. SCHED C: "N" .

    4. AGI INC/DEC: xMend, line 1b (use a leading minus sign for decreases).

    5. EITC INC/DEC: xMend, line 14B.

    6. RefCR: Total of increases to ACTC and/or AOTC.
    EITC is increasing and doesn't involve an EITC Math Error

    • Schedule C is changing; or

    • Schedule C is being added; or

    • Claiming additional income (except Schedule F, Schedule E, Schedule K-1 or minister income) that is subject to SE Tax

    Example:

    Form 1040-X shows SE Tax due to non-employee compensation from a Form 1099-MISC. Typically this is other income reported on line 21 of the Form 1040. The Schedule C indicator would be "Y" . The non-employee compensation income shown on the Form 1099-MISC would be the amount of the "Gross Receipts" and the "Net Profit" on the DDBCK Return Update Screen-Schedule C.

    1. CATEGORY: EIC"X"

    2. CLAIM AMOUNT: The net refund/balance due of the MFT 30 adjustment (dollars only).

    3. SCHED C: "Y" .

    4. AGI INC/DEC: xMend, line 1b (use a leading minus sign for decreases).

    5. EITC INC/DEC: xMend, line 14B

    6. RefCR: Total of increases to ACTC and/or AOTC.

    7. GROSS RCPT: Sum of all Schedules C line 1.

    8. COST GOOD SOLD: Sum of all Schedules C line 4.

    9. HOME OFFICE EXPENSE: Sum of all Schedules C line 30.

    10. NET PROFIT: Sum of all Schedules C line 31 or Schedule C-EZ line 3.

    11. WAGES: Amount of W-2 wages being amended, if any (add leading minus sign for decreases).
    EITC is increasing and does involve an EITC TIN related Math Error

    Note:

    EITC TIN related math errors include ME 604 / 605 / 610/ 701 / 702 / 741 / 743 / 745 / 748.

    		 Schedule C isn't attached, not changing, or is being removed

    1. CATEGORY: EIC"C"

    2. CLAIM AMOUNT: Net refund/balance due of the MFT 30 adjustment (dollars only).

    3. SCHED C: "N" .

    4. AGI INC/DEC: 1040-X line 1B (add leading negative sign if the amount is decreasing).

    5. EITC INC/DEC: 1040-X line 14B.

    6. RefCR: Total of increases to ACTC and/or AOTC.
    EITC is increasing and does involve an EITC TIN related Math Error

    Note:

    EITC TIN related math errors include ME 604 / 605 / 610/ 701 / 702 / 741 / 743 / 745 / 748.

    • Schedule C is changing; or

    • Schedule C is being added; or

    • Claiming additional income (except Schedule F, Schedule E, Schedule K-1 or minister income) that is subject to SE Tax

    Example:

    Form 1040-X shows SE Tax due to non-employee compensation from a Form 1099-MISC. Typically this is other income reported on line 21 of the Form 1040. The Schedule C indicator would be "Y" . The non-employee compensation income shown on the Form 1099-MISC would be the amount of the "Gross Receipts" and the "Net Profit" on the DDBCK Return Update Screen-Schedule C.

    1. CATEGORY: EIC"C"

    2. CLAIM AMOUNT: The net refund/balance due of the MFT 30 adjustment (dollars only).

    3. SCHED C: "Y" .

    4. AGI INC/DEC: xMend, line 1b (use a leading minus sign for decreases).

    5. EITC INC/DEC: xMend, line 13B

    6. RefCR: Total of increases to ACTC and/or AOTC.

    7. GROSS RCPT: Sum of all Schedules C line 1.

    8. COST GOOD SOLD: Sum of all Schedules C line 4.

    9. HOME OFFICE EXPENSE: Sum of all Schedules C line 30.

    10. NET PROFIT: Sum of all Schedules C line 31 or Schedule C-EZ line 3.

    11. WAGES: Amount of W-2 wages being amended, if any (add leading minus sign for decreases).

  6. Take the following action when the DDBCK response displays the following literal:

    If ... Then ...
    OK to input ADJ54, if eligibility met Input the adjustment following the appropriate procedures.
    OK to input ADJ54 if eligibility met, enter reason code 103 Send the case to AM. RC 103 indicates that taxpayer is part of the EITC certification program.
    RECERT IND Send the case to AM.
    Date Older Than 18 Months DDBCK won’t allow an entry 18 months or later. Overlay the pre-populated date with the received date of the return.
    Date Can't be a Future Date If working a current processing year claim that is timely filed prior to April 15, use the current date for the input.
    Date Earlier than Return If working a current processing year claim that is timely filed prior to April 15, use the TC 150 date.

    Note:

    If DDBCK won’t accept the TC 150 date, use the current date for the input.

  7. If the response to either the initial DDBCK screen or validation results screen displays "Selected " or "Send As CAT-A" , follow the table below:

    If the DDBCK response is ... Then ...
    "SELECTED DDBCK REROUTE TO EITC"

    1. Return to the "Active Case" page in CII.

      1. Capture the DDBCK response screen.

      2. In the "Actions" section, select" send the case to EITC" from the drop-down list and click "GO" .

    2. On the "send the case to EITC" page in the "TO:" field, choose EITC Selected for your Campus.
    "SELECTED DDBCK REROUTE TO EITC XXXX"

    1. Return to the "Active Case" page in CII.

      1. Capture the DDBCK response screen.

      2. In the "Actions" section, select" send the case to EITC" from the drop-down list and click "GO" .

    2. On the "send the case to EITC" page in the "TO:" field, choose EITC Selected for your Campus indicated in the response.
    "SEND AS CAT A"

    1. Return to the "Active case page" in CII.

      1. Capture the DDBCK response screen.

      2. Suspend to CAT-A.

  8. On CC DDBCK "Selected" cases, input a TC 971 AC 013. A TC 424 is generated automatically in IDRS and places a -L freeze on the account. If DDBCK is updated in error, the input must be deleted to prevent an erroneous case from opening in Exam.

  9. On "Follow IRM" cases, you must use the appropriate section of the IRM 3.11.6 to process the amended return.

  10. If the DDBCK validation passes, and the case isn't selected for Exam or CAT-A, DDBCK updates DUPTIN/DUPOL to reflect any changes that were entered. If the TIN or name control entered failed validation, DUPTIN won’t be updated. Instead, the command code displays a prompt "PROCESS UPDATES (Y/N)?" and waits for the user to respond before continuing. If the validation error is caused by data entry error, the fields can be corrected. When corrections are made and retransmitted, DDBCK validates the input again from the beginning.

    Note:

    If the DDBCK response states that the child failed validation (other than an invalid TIN/Name issue), refer to AM. See IRM 3.11.6.14.4, Earned Income Credit (EIC) - Line 14.

3.11.6.13.5 (01-02-2024)

Command Code DUPED

  1. Command Code (CC) DUPED allows users to edit and correct information contained in the Duplicate TIN OnLine (DUPOL) database which is used for TIN validation. Only update the DUPOL database for a current tax year return after the name and TIN have been verified using CC INOLE.

  2. When a dependent, Earned Income Tax Credit (EITC), or a credit requiring TIN validation for allowance is being changed, use CC DUPED to update the TIN database (DUPOL). If the amount of a "TIN related" credit is changed because of an income change and there's no change to the TIN, you would not use CC DUPED. See (3) for additional conditions.

  3. Don't update CC DUPED if the only reason for the update is:

    1. Claiming EITC for self or spouse only

    2. A filing status change, which doesn't affect dependents/credit allowance

      Reminder:

      If the only change is a filing status (FS) change to FS 2, and no credits are being claimed for the spouse, don’t update DUPOL database.

  4. If the taxpayer doesn't provide the TIN of the dependent being removed, research RTVUE. If found, update the DUPOL database.

  5. The display screen allows users to find the exact record they want to modify. A record number is shown for each record that can be edited. CC DUPED procedures apply only to the current tax year return.

  6. The TIN SOURCE CD field on the edit screen has been expanded to three positions to allow adding and changing of multiple records. To change multiple records for the same TIN from a single return, bring up the change screen for the record. You can then enter two additional TIN SOURCE codes and all three will be changed at the same time.

  7. CC DUPED doesn't replace master file account action and should be updated in addition to any MF adjustment required.

  8. Don't disclose DUPED data. Taxpayers are not entitled to know who has claimed them, their dependents, or EITC.

  9. If the taxpayer clearly indicates who’ll be claiming the dependent, don't update the other account based on this information.

3.11.6.13.5.1 (01-02-2024)
Add a Record

  1. Add a Record is used when adding a dependent, spouse (secondary TIN) or to add a new Form 2441 credit, Form 8863 and/or Schedule EIC.

    Note:

    For 2018 - 2025 amended returns or claims in which the taxpayer is trying to change exemption(s), see IRM 3.11.6.13, Personal Exemption or Dependent Changes.

  2. To add the record, Enter "A" in the "REQUEST TYPE" field.

  3. When the edit screen is displayed, enter the record information on the edit screen and then transmit.

    1. Name Control - Enter the name control of the dependent being added.

    2. Primary SSN on return - Enter the Primary TIN from Form 1040-X.

    3. Service Center CD - Enter the two-digit File Location Code from the TC 150 DLN for the processing center where the taxpayer originally filed. The Edit Screen provides Processing Codes for ELF (Electronic Filing System). Use ELF codes only if appropriate. (Refer to Doc 6209 FLCs for a list of valid File Location Codes).

    4. Filing Status - Enter the "Amended return filing status" from Form 1040-X.

    5. Dependent Status Ind - Enter "0" to indicate the dependent can't be claimed on another return.
      - "0 " – Indicates the dependent can't be claimed on another return
      - "1 " – Used only when the dependent is claimed on another return

    6. TIN Source CD - Enter how the TIN is being applied during this action. This is a required entry.
      "P" = Primary
      "S" = Secondary
      "D" = Dependent
      "B" = Form 2441, Child and Dependent Care Expenses
      "C" = Form 8863, Education Credit
      "E" = EITC, Earned Income Tax Credit

  4. When the information is transmitted, the DUPED response screen is displayed to show the updated information.

    Note:

    Continue to process the return if the message "DUPLICATE USE OF SSN" is displayed after transmitting. This is an indication the added dependent is already being claimed by a different taxpayer, but a soft notice addressing the issue is generated automatically.

3.11.6.13.5.2 (01-09-2023)
Change a Record

  1. Change a Record is used to update the dependent status indicator if a primary taxpayer is adding or removing their own exemption.

    Reminder:

    Personal exemptions are not allowed for TY 2018 - 2025.

    Note:

    For 2018 - 2025 amended returns or claims in which the taxpayer is trying to change exemption(s), see IRM 3.11.6.13, Personal Exemption or Dependent Changes.

  2. To change a record, use CC DUPED, without a definer, and the TIN of the person being claimed to display all the records for that TIN.

    Exception:

    Don't update the DUPOL database on invalid primary or secondary TINs. Send the case to AM.

  3. Enter a "C" in the request type field and the record number in the record number field and then transmit. This is equivalent to entering a CC DUPED with the definer "C" and the record number in line "1" of the command code.

  4. When the edit screen is displayed, enter the appropriate corrected information and then transmit.

    1. Name Control (N/C) - Enter the name control of the dependent/exemption being changed.

    2. Filing Status - If the filing status is changing, enter the appropriate code.

    3. Dependent Status Ind - Enter "1" to indicate the exemption is claimed on another return or enter a "0" to indicate the primary taxpayer is claiming his/her own personal exemption.

  5. If you delete a record, the response is shown with a dash under REC NUM and the Julian date in the REV DATE column. If we "Change a record" , the response shows a Record Number (REC NUM) and under column "DEP STAT IND" shows the change.

    Note:

    Multiple taxpayers may have claimed the same exemption or credit. Only change the records that relate to the account you're working.

3.11.6.13.5.3 (11-21-2019)
Delete a Record

  1. Delete a Record is used when any of the following are removed or when a credit is reduced to zero:

    • Dependents

    • Schedule EIC, Earned Income Credit

    • Form 2441, Child and Dependent Care Expenses

    • Form 8863, Education Credits

  2. When deleting a record, use command code DUPED with the TIN of the dependent for which the action is being taken.

  3. Delete records that you created in error.

  4. Enter a "D" in the "REQUEST TYPE" and the appropriate record number in the "RECORD NUMBER" field and then transmit. This is equivalent to entering a DUPED with the definer "D" and the record number in line "1" of the command code.

  5. The edit screen is displayed along with a delete confirmation message. Enter "Y" to delete the record, and then transmit. When the information is transmitted the display screen shows with the corrected information.

3.11.6.14 (01-02-2024)

Specific IMF Adjustments

  1. The following subsections contain procedures for processing the Form 1040-X:

    1. Income and Deductions
      - Line 1, Adjusted Gross Income
      - Line 2, Itemized or Standard Deductions
      - Line 4a, Reserved for future use
      - Line 4b, Qualified Business Income Deduction
      - Line 5, Taxable Income

    2. Tax Liability
      - Line 6, Tax (may include ACA)
      - Line 7, Credits (non-refundable)
      - Line 9, Reserved for future use
      - Line 10, Other Taxes (Form 5329/1099R and Self-Employment (SE) Tax)
      - Line 11, Total Tax

    3. Payments
      - Line 12, Federal Income Tax Withheld and Excess Social Security and Tier 1 RRTA Tax Withheld
      - Line 13, Estimated Tax Payments
      - Line 14, Earned Income Credit (EIC)
      - Line 15, Refundable Credits

    4. Refund or amount You Owe
      - Line 23, Credit Elect

  2. Several sections of this IRM advise to review Command Code (CC) IRPTR. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

  3. All credits require that the primary taxpayer, secondary taxpayer, and the qualifying child(ren) have a valid Taxpayer Identification Number (TIN). See IRM 3.11.6.4.4.2, TIN Requirements for Dependents and Credits.

    Note:

    An Internal Revenue Service Number (IRSN) isn't a valid TIN for credit allowance. An IRSN can be identified as beginning with a "9" with the 4th and 5th digits being a campus code.

  4. If the credit requires a qualifying child, use CC INOLE to verify the name control, TIN, date of birth, and date of death of the qualifying child. If the Child and Dependent Care Credit, Child Tax Credit (CTC), Credit for Other Dependents (ODC), Earned Income Tax Credit (EITC), Adoption Credit and/or Education Credit is being claimed for a TIN for which our records indicate a date of death prior to the tax year, send the case to AM.

  5. The American Opportunity Tax Credit (AOTC), Additional Child Tax Credit (ACTC), CTC, ODC, and the EITC have specific TIN requirements. See each individual subsection and IRM 3.11.6.4.4.2, TIN requirements for Exemptions and Credits.

  6. When inputting an adjustment and there are more Item Reference Numbers (IRN) or Credit Reference Numbers (CRN) than fields available, input the adjustment as follows:

    Note:

    If xMend is used, allow xMend to input the two adjustments.

    Input changes from lines 11 - 15.

    1. Appropriate Sequence Number (SEQN)

    2. Appropriate Blocking Series (BS)

    3. Case Status Code

    4. Received Date (RCVDDT)

    5. Control Category

    6. Activity

    7. Return Process Date (RPD), if needed.

    8. Override Code (OC), if needed

    9. Refund Statue Control Date (RFSCDT), if needed

    10. Change to line 11, TC 29X

    11. Change to Estimated Tax Penalty, TC 17X, if needed

    12. Appropriate Source Code (SC)

    13. Appropriate Reason Code (RC)

    14. Hold Codes (HC), if needed

    15. Priority Codes (PC), if needed

    16. Posting Delay Code (PDC), if needed.

    17. Amended Claims Date

    18. Changes to lines 12 -15

    19. Direct Deposit IRN per IRM 3.11.6.14.6.1, Direct Deposit

    20. CII Indicator (CIS IND) "0" , if working a paper filed return. Use "1" , if working an e-filed return or CII case

    21. Source Document Indicator (SD)"Y" , if working a paper filed return. Use SD "N" , if working an e-filed return or CII case.

    22. Appropriate Remarks

    2nd Adjustment:

    1. Appropriate Sequence Number (SEQN)

    2. Appropriate Blocking Series (BS)

    3. Case Status Code

    4. Received Date (RCVDDT)

    5. Control Category

    6. Activity

    7. Return Process Date (RPD), if needed.

    8. Override Code (OC), if needed

    9. Refund Statue Control Date (RFSCDT), if needed

    10. TC 290 for .00

    11. Appropriate Source Code (SC)

    12. Reason Code (RC) 099

    13. Hold Code (HC), if needed

    14. Priority Code (PC, if needed)

    15. Posting Delay Code 1 cycle longer that the first adjustment

    16. Amended Claims Date

    17. Changes to lines 1 -10

    18. CII Indicator (CIS IND) "0" , if working a paper filed return. Use "1" , if working an e-filed return or CII case

    19. Source Document Indicator (SD)"Y" , if working a paper filed return. Use SD "N" , if working an e-filed return or CII case.

    20. Appropriate Remarks

      Note:

      If there's a change to the name line information or taxpayer's address the first adjustment requires a posting delay code. The second adjustment requires a posting delay code one greater than the first adjustment.

3.11.6.14.1 (01-03-2023)

Income and Deductions Line 1 through Line 5

  1. Income and adjustments to income and deductions to income are covered in this section.

  2. Income and adjustments to income are reported on Form 1040 or Schedule 1, Additional Income and Adjustments to Income.

3.11.6.14.1.1 (01-02-2024)
Adjusted Gross Income (AGI) - (Line 1)

  1. Any adjustments to income or deductions to income are reported on line 1 of Form 1040-X, Amended U.S. Individual Income Tax Return.

  2. If there's indication that a taxpayer received wages from ministerial duties, is a minister, or Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, is attached, then send the case to AM.

  3. If the taxpayer indicates they made a Qualified Charitable Distribution, "QCD" , refer the case to your lead. The lead must screen the case through the Interactive Tax Law Assistant, ITLA, on SERP.

  4. If a TC 971 AC 123 with a MISC field entry of "1040X INVALID IDOC" is present, follow the table.

    Caution:

    The taxpayer’s income amount for pensions and annuities may differ because the distribution may be fully taxable or partially taxable. If the only reason the income doesn't match is due to the taxable pension or annuity income amount, consider the income verified.

    If ... And ... Then ...
    All income documents associated with the change are provided You’re unable to verify the income amount on IRPTR Correspond per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).
    All income documents associated with the change are provided You’re able to verify the income amount on IRPTR Process as normal.
    Form W-2, Form 1099 series or other income document(s) associated with the change are missing, handwritten, altered or are a substitute You’re unable to verify the income amount on IRPTR Correspond per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).
    Form W-2, Form 1099 series or other income document(s) associated with the change are missing, handwritten, altered or are a substitute You’re able to verify the income amount on IRPTR Process as normal.

  5. Use Item Reference Number (IRN) 888 for any positive or negative change to AGI.

    Note:

    The AGI can be a negative number or be reduced below zero.

3.11.6.14.1.1.1 (01-02-2024)
Earned Income

  1. Earned income includes all employee compensation subject to income tax, net earnings from self-employment (SE), and gross income received by a statutory employee.

  2. Taxable earned income includes:

    • Wages

    • Salaries

    • Tips

    • Strike pay, other bona fide gifts

    • Sick pay

    • Union strike benefits

    • Net earnings from self-employment (SE) or gross income received by a statutory employee.

    • Disability benefits (not disability Social Security) received by taxpayers under minimum retirement age (normally, this is reported on the Form 1040 as wages).

    Note:

    Minimum retirement age may vary.

  3. An amount paid to an inmate in a penal institution, for work, isn't considered earned income for EITC purposes. Refer to IRM 3.11.6.16.17, Prisoner Returns.

  4. For EITC purposes, use SE income as reported on Schedule SE, minus the deductible part of SE tax or use EIC Worksheet B in Publication 596, Earned Income Credit.

  5. If Schedule SE isn't present because the net earnings from self-employment shown on Schedule C, C-EZ, or F (or the combined net earnings) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, use the amount of net profit or loss reported on Schedule C, C-EZ or F.

  6. If Schedule SE isn't present and there’s a change to income that appears to be from self-employment earnings, screen the case for CAT-A criteria.

  7. If SE income is a loss, subtract the amount from other earned income.

  8. If the optional method is used, use the optional amount as income; don't subtract the SE loss.

  9. If the taxpayer is a statutory employee (indicated on Form W-2, box 13), use Schedule C or C-EZ, line 1, as earned income.

    Note:

    If taxpayer receives wages from ministerial duties, some of the income reported on Form 1040, line 7, may also be shown on Schedule SE, line 2. Send the case to AM.

  10. Native American Tribe Members who report Form 1099-MISC tribal related income on a Form 1040-X are not subject to SE Tax, nor is the amount considered as earned income for EIC purposes. The literals are:

    1. Indian gaming/Indian Gaming Proceeds/IGP

    2. Indian tribal distribution, income, fund, or earnings

    3. Native American

    4. IGE

    5. ITI

    6. Alaska Permanent Fund/APF

    7. Alaska Permanent Fund DIV/APFD

  11. Earned Income includes:

    • Form W-2 or similar statement

    • Form 1099-MISC, Miscellaneous Information

      Note:

      Not all income reported on a 1099-MISC is considered earned income.

    • Form 1099R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., with Distribution Code 3 and/or Disability

    • Form 1099-NEC, Nonemployee Compensation

    • Form 4137, Social Security and Medicare Tax on Unreported Tip Income

    • Form 8919, Uncollected Social Security and Medicare Tax on Wages

    • Schedule C, Profit or Loss From Business (Sole Proprietorship)

    • Schedule E, Supplemental Income and Loss, Part II (line 29a Column k and line 29b Column i) and Part III (line 34a, Column f)

    • Schedule F, Profit or Loss From Farming

    • Schedule SE, Self-Employment Tax

    • Notation of HSH, Household Employee Income, Household Help

    • Notation to the left of Schedule 1, line 8, Other Income, indicating self-employment

    • Notation of prior year earned income (PYEI)

  12. Income that isn't Earned Income:

    • Welfare payments and benefits

    • Pensions

    • Taxable scholarships or fellowship grants not reported on Form W-2

    • Workers’ compensation benefits

    • Alimony and child support

    • Interest and dividends

    • Non-disability pensions and annuities (e.g., Form 1099R showing income other than Distribution Code 3)

    • Nontaxable foster care payments

    • Social Security and railroad retirement benefits (including disability benefits)

    • Unemployment compensation (insurance)

    • Veterans' benefits (including VA rehabilitation benefits)

    • Workfare payments

    • Conservation Reserve Program (CRP) payments

    • Nontaxable military pay

    • Form 1099 C - Cancellation of debt

      Exception:

      Taxpayers can elect to include nontaxable combat pay and Medicaid waiver payments in earned income for the earned income credit.

  13. Earned income generally doesn't include workfare payments to the extent subsidized under a state program for work experience (including work associated with the refurbishing of publicly assisted housing if sufficient private sector employment isn't available), work in community service programs, or certain Medicaid waiver payments (see IRM 21.6.6.2.35, Qualified Medicaid Waiver Payments/Difficulty of Care Payments, for more information). However, the taxpayer may include certain Medicaid waiver payments in earned income if they benefit from the exclusion (even if this payment is excluded on Schedule 1).*
    *Reference - Feigh v Comm, 152 TC No. 15 (2019)

3.11.6.14.1.1.2 (01-09-2023)
Form 8606, Nondeductible IRAs (Line 1)

  1. Nondeductible IRA contributions are those contributions made to a traditional IRA which are within the contribution limit but don't qualify as deductible.

  2. If there's an amount on line 15b or 25b of Form 8606, Nondeductible IRAs, send the case to AM.

  3. Form 8606, Nondeductible IRAs, must be attached if taxpayer is reporting or has indicated a change to a Nondeductible IRA Contribution in the explanation part of the Form 1040-X. If Form 8606 isn't attached, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  4. If Form 8606 is attached and the line 15b is blank, then process using RC 016.

3.11.6.14.1.1.3 (01-17-2023)
Unemployment Compensation Exclusion (UCE) - Tax Year 2020 Only (Line 1)

  1. Taxpayers that received Unemployment Compensation (UC) in tax year 2020 may be able to claim an Unemployment Compensation Exclusion (UCE) of up to $10,200 ($20,400 if FS 2).

    If Filing as ... And ... Then ...
    FS 1   The taxpayer may be able to exclude up to $10,200.
    FS 2 The taxpayers live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) Send the case to AM, if there's a change to UCE.
    FS 2 The taxpayers don't live in a community property state Each taxpayer may be able to exclude up to $10,200 and the total UCE amount can't exceed $20,400.
    FS 3 The taxpayer lives in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) Send the case to AM, if there's a change to UCE.
    FS 3 The taxpayer doesn't live in a community property state The taxpayer may be able to exclude up to $10,200.
    FS 4   The taxpayer may be able to exclude up to $10,200.

  2. See IRM 21.6.6.2.53, Unemployment Compensation Exclusion due to American Rescue Plan Act (ARPA) of 2021, for qualifications, MAGI calculation, and systemic recovery information. For additional information, see IRS Statement - American Rescue Plan Act of 2021 Internal Revenue Service.

    Note:

    If instructed to forward to the AM HQ Analyst take the following action:
    1. Give the case to your lead.
    2. The lead must follow normal procedures to refer the case to HQ and suspend the case for 30-days to allow time for the UCE issue to be addressed.
    3. At the end of the suspense period process the case as normal. If the UCE issue hasn’t been addressed, follow the instructions in the previous step.

  3. Follow IRM 21.6.6.2.53.1, Account Adjustments for the UCE, when adjusting the UCE.

  4. Process using reason code 020.

3.11.6.14.1.1.4 (12-01-2022)
Notice 2014-7, Qualified Medicaid Waiver Payments and Difficulty of Care Payments

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. See IRM 21.6.6.2.35, Qualified Medicaid Waiver Payments/Difficulty of Care Payments, for eligibility and processing instructions.

  3. If the required information to substantiate the claim is missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  4. Process using the following reason code(s):

    • If the income related to the 2014-7 exclusion is being added based on Form W-2, use reason code (RC) 007.

    • If the income related to the 2014-7 exclusion is being added based on Form 1099-MISC, use RC 021.

    • If the income is being excluded under 2014-7, use RC 021.

3.11.6.14.1.1.5 (01-02-2024)
Employer Provided Education Assistance (IRC 127) - (Line 1)

  1. IRC 127 allows employees to exclude from the employee’s taxable income educational expenses paid or incurred by the employer for the employee. The maximum annual exclusion is $5,250.

    If ... And ... Then ...
    An amended return is filed claiming an exclusion of $5,250 or less Form W-2, or Form W-2C, is attached and reflecting the change Adjust the account and use Reason Code 007 and Source Code 1.
    An amended return is filed claiming an exclusion of $5,250 or less Form W-2, or Form W-2C is missing or doesn't reflect the exclusion Correspond, per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.
    An amended return is filed claiming an exclusion of more than $5,250 Employer provided assistance is the only issue Input the adjustment per IRM 3.11.6.16.5, Inputting a Corrected Adjustment, for the exceeded amount. Use fill-in: If your employer pays more than $5,250 for educational benefits for you during the year, you must generally pay tax on the amount over $5,250. Your employer should include in wages the amount that you must include in income.
    An amended return is filed claiming an exclusion of more than $5,250 Employer provided assistance and other issues are involved Input the adjustment per IRM 3.11.6.16.5, Inputting a Corrected Adjustment, for the exceeded amount. Use fill-in: If your employer pays more than $5,250 for educational benefits for you during the year, you must generally pay tax on the amount over $5,250. Your employer should include in wages the amount that you must include in income.

3.11.6.14.1.1.6 (01-09-2023)
Military Family Relief Act (MFRA) (Line 1)

  1. On November 11, 2003, President Bush signed into law the Military Family Tax Relief Act of 2003. Taxpayers have been instructed to write "Military Family Tax Relief Act" in red in the top margin to identify the cases. Send all returns identified as "Military Family Tax Relief Act" to AM.

3.11.6.14.1.1.7 (01-03-2023)
Form 8917, Tuition and Fees Deduction - Tax Year 2020 and Prior (Line 1)

  1. Taxpayers who paid tuition and fees expenses to an accredited post-secondary educational institution (college, university or vocational school) for an eligible student may be eligible to deduct up to $4,000. The availability of this deduction terminated on December 31, 2020.

  2. Taxpayers can claim Tuition and Fees deduction if they meet the following conditions:

    • They paid qualified tuition and fees for themselves, their spouse or dependent(s).

    • Their filing status isn't married filing separately (FS 3 or 6).

    • The student must be claimed as a dependent on the primary taxpayer's tax return.

    • They are not claiming Education Credits for the same student.

    • No deduction is allowed unless the taxpayer provides the name and TIN of the individual for whom the tuition and fees were paid on the tax return

    • No deduction is allowed for the portion of the year that the taxpayer was a nonresident alien.

    • In general, except as otherwise provided by the Secretary, no deduction shall be allowed unless the taxpayer receives a statement as provided under section 6050S(d) which contains all of the information required by paragraph 2 thereof.

  3. Taxpayers can receive up to:

    • $4,000 of deductions if their modified adjusted gross income (MAGI) is $65,000, or less if filing Single or Head of Household or Qualified Surviving Spouse; $130,000 or less if filing Married Filing Jointly.

    • $2,000 of deductions if their MAGI is between $65,001 and $80,000 for filing Single or Head of Household or Qualified Surviving Spouse; between $130,001 and $160,000 if filing Married Filing Jointly.

      Note:

      When MAGI exceed the upper limit for all filing statuses the deduction is zero (0).

  4. If the taxpayer claims both the Education Credit and the Tuition and Fees Deduction and the Form 8917, Tuition and Fees Deduction, indicates that the credits were for the same student, disallow Tuition and Fees deduction. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed your claim on Form 8917, Tuition and Fees Deduction. You may not claim the deduction for Form 8917 and Form 8863, Education Credits, for the same student.

  5. Disallow a deduction for a student if the taxpayer or anyone else has claimed the American Opportunity Credit for that student. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed your claim on Form 8917, Tuition and Fees Deduction. You may not claim the deduction for Form 8917 and Form 8863, Education Credits, for the same student.

    Note:

    Taxpayers may add Form 8863, Education Credits, and remove Form 8917, Tuition and Fees Deduction, see IRM 3.11.6.14.2.2.3, Form 8863, Education Credits.

  6. Form 8917 must be attached if taxpayer is claiming the Tuition and Fees Deduction. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  7. If Form 1098-T is being used to support the Tuition and Fees deductions on line 1 of Form 1040-X, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  8. Since Form 8917 is based on qualified education expenses paid to an eligible post-secondary educational institution, when the age of the student is such that the deduction becomes questionable or there are other circumstances that are questionable and the Form 1098-T isn't present on IRPTR, "no consider" the claim and request a copy of the Form 1098-T, Tuition Statement. Send Letter 916C per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP). Use fill-in: We didn't receive a Form 1098-T, Tuition Statement, from your education institution for the student to support your claim on Form 8917, Tuition and Fees Deduction. This form is used to verify enrollment and qualified educational expenses. Please contact the educational institution and ask them to issue Form 1098-T to the IRS to verify the enrollment status and qualified expense information.

    Note:

    It isn't required to research IRPTR on all claims, the return should be questionable prior to research.

  9. If the taxpayer removes their exemption and doesn't remove the Tuition and Fees deductions, then remove the deduction and send Letter 474C per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

  10. If present, process using RC 030.

3.11.6.14.1.1.8 (01-02-2024)
Student Loan Interest Deduction (Line 1)

  1. Student loan interest is interest paid during the year on a qualified student loan. It includes both required and voluntary payments. Taxpayers are provided Form 1098-E which lists the interest paid on the student loan.

  2. The maximum allowable deduction is $2,500.00.

    • For tax year (TY) 2020 and later, the maximum allowable deduction must be further reduced, but not below zero, by any amount for which an exclusion is allowable under IRC 127 by reason of the taxpayer’s employer making a payment on the taxpayer’s qualified education loan.

    • For TY 19 and later, the maximum allowable deduction must be reduced, but not below zero, by any amount paid from the distribution of earnings from a qualified tuition plan to the extent the earnings are treated as tax-free because the earnings were used to pay student loan interest.

    Note:

    The deduction isn't allowable for FS3, Married Filing Separately.

    Note:

    The MAGI has varying additions to the AGI depending on the situation if computed, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  3. The maximum allowable deduction also begins to phase out if Modified Adjusted Gross Income (MAGI) is greater than:

    Tax Year Single, Head of Household and Qualifying Surviving Spouse Married Filing Joint
    2023 $75,000 $155,000
    2022 $70,000 $145,000
    2021 $70,000 $140,000
    2020 $70,000 $140,000

  4. The $2,500.00 amount is eliminated if the Modified Adjusted Gross Income (MAGI) is:

    Tax year Single, Head of Household and Qualifying Surviving Spouse Married Filing Joint
    2023 $90,000 or more $185,000 or more
    2022 $85,000 or more $175,000 or more
    2021 $85,000 or more $170,000 or more
    2020 $85,000 or more $170,000 or more

  5. For processable claims, use RC 030.

3.11.6.14.1.1.9 (01-03-2023)
Form 3903, Moving Expenses (Line 1)

  1. Form 3903, Moving Expenses, is used only by Members of the Armed Forces.

  2. Form 3903 is required if the taxpayer is deducting/changing moving expenses, correspond if missing. See IRM 3.11.6.10, Correspondence Procedures.

    Note:

    Correspondence isn't required if the taxpayer is amending a previously filed Form 3903 and the nature of the change is explained on the Form 1040-X.

  3. Process using RC 030.

3.11.6.14.1.1.10 (01-02-2024)
Form 2106, Employee Business Expenses (Line 1)

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. Only taxpayers who are Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, or employees with impairment-related work expenses may file Form 2106, Employee Business Expenses. Form 2106 is claimed on Form 1040, Schedule 1, Additional Income and Adjustments to Income.

  3. ) If taxpayers who are not those listed in (2) report employee business expenses on Form 2106, send Letter 105C/Letter 106C per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter, and use the fill-in: We disallowed your claim for Form 2106, Employee Business Expenses, because these expenses aren’t allowed for tax years 2018 and subsequent.

  4. Form 2106 is required for changes ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡. Correspond for the missing Form 2106 per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  5. If there's a notation of Forced Pay Reduction, follow IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and use fill-in: We disallowed your claim citing "Forced Pay Reduction" because it didn't include supporting documentation.

3.11.6.14.1.1.11 (03-13-2023)
Refund of State Taxes Paid - Tax Year 2022 Only

  1. Taxpayers residing in certain states are not required to report their state refunds as taxable income.

  2. If the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but didn't receive a tax benefit (for example, because the $10,000 tax deduction limit applied) the payment isn't included in income for federal tax purposes.

  3. Payments from the following states in 2022 fall in this category and are excluded from income for federal tax purposes unless the recipient received a tax benefit in the year the taxes were deducted.

    • Georgia

    • Massachusetts

    • South Carolina

    • Virginia

  4. If a taxpayer residing in another state has filed an amended return to remove their state refund, research CC IRPTR for a Form 1099-G, Certain Government Payments, issued from one of the states listed in paragraph 3.

    If ... And ... Then ...
    Present The payment is for state taxes Process the claim following normal procedures.
    Not present   No consider the claim per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

3.11.6.14.1.1.12 (07-24-2023)
General Welfare and Disaster Relief Payments - Tax Year 2022 Only

  1. Taxpayers from certain states are not required to report their payments received for the promotion of the general welfare or as a disaster relief payment. For example, payments received related to the Covid pandemic, may be excludable from income for federal tax purposes under the General Welfare Doctrine or as a Qualified Disaster Relief Payment.

  2. For a list of the specific payments to which this applies, please see this chart.

    Note:

    Other payments that may have been made by states are generally includable in income for federal income tax purposes. This includes the annual payment of Alaska's Permanent Fund Dividend and any payments from states provided as compensation to workers.

  3. Payments from the following states fall in this category and the IRS won’t challenge the treatment of these payments as excludable for federal income tax purposes in 2022.

    • Alaska

      Note:

      Only for the supplemental Energy Relief Payment received in addition to the annual Permanent Fund Dividend.

    • California

    • Colorado

    • Connecticut

    • Delaware

    • Florida

    • Hawaii

    • Idaho

    • Illinois

      Note:

      The state issued multiple payments and in each case one of the payments was a refund of taxes, which should be treated as noted above, and one of the payments is in the category of disaster relief payment.

    • Indiana

    • Maine

    • New Jersey

    • New Mexico

    • New York

      Note:

      The state issued multiple payments and in each case one of the payments was a refund of taxes, which should be treated as noted above, and one of the payments is in the category of disaster relief payment.

    • Oregon

    • Pennsylvania

    • Rhode Island

  4. If a taxpayer residing in another state has filed an amended return to remove their general welfare and disaster relief payments, research CC IRPTR for a Form 1099 issued from one of the states listed in paragraph 3.

    If ... And ... Then ...
    Present The payment(s) match the specific chart referenced in paragraph 2 or is one of those listed in paragraph 3 Process the claim following normal procedures.
    Not present   No consider the claim per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

3.11.6.14.1.2 (09-25-2020)
Standard and Itemized Deductions (Line 2)

  1. Taxpayers elect to take either the standard deduction or they can itemize their deductions to reduce their taxable income. Itemized deductions are submitted on a Form 1040, Schedule A.

3.11.6.14.1.2.1 (01-02-2024)
Standard Deduction

  1. The amount of standard deduction depends on the year of the return and the taxpayer’s filing status.

  2. A taxpayer or spouse who is age 65 or older or blind is entitled to a higher standard deduction. The taxpayer checks a box on the Form 1040 to indicate the reason for the additional standard deduction(s). Refer to the table below to determine the correct standard deduction amount.

    FILING STATUS 2023 Standard Deduction 2022 Standard Deduction 2021 Standard Deduction 2020 Standard Deduction
    Single (1) $13,850 $12,950 $12,550 $12,400
    MFJ (2) $27,700 $25,900 $25,100 $24,800
    MFS (3) $13,850 $12,950 $12,550 $12,400
    HoH (4) $20,800 $19,400 $18,800 $18,650
    QSS (5) $27,700 $25,900 $25,100 $24,800

  3. If the taxpayer can be claimed as a dependent on another taxpayer’s return, then the taxpayer’s standard deduction allowed is the greater of the following amounts up to the amount of the regular standard deduction:

    Tax year ... Greater of ...
    2023 $1,250 or $400 + earned income
    2022 $1,150 or $400 + earned income
    2021 $1,100 or $350 + earned income
    2020 $1,100 or $350 + earned income

    Note:

    A taxpayer and/or spouse who is age 65 or older and/or blind is entitled to a higher standard deduction

  4. A taxpayer and/or spouse who is age 65 or older and/or blind is entitled to a higher standard deduction

    If Tax Year ... And ... Then ...
    2023 The FS is 2, 3, or 5 The additional deduction amount is $1,500 per box checked.
    2023 The FS is 1 or 4 The additional deduction amount is $1,850 per box checked.
    2022 The FS is 2, 3, or 5 The additional deduction amount is $1,400 per box checked.
    2022 The FS is 1 or 4 The additional deduction amount is $1,750 per box checked.
    2021 The FS is 2, 3, or 5 The additional deduction amount is $1,350 per box checked.
    2021 The FS is 1 or 4 The additional deduction amount is $1,700 per box checked.
    2020 The FS is 2, 3, or 5 The additional deduction amount is $1,300 per box checked.
    2020 The FS is 1 or 4 The additional deduction amount is $1,650 per box checked.

  5. Use reason code 092 when:

    • There are changes to standard deduction

    • The taxpayer changes from itemized deductions to standard deduction

3.11.6.14.1.2.1.1 (01-03-2023)
Non-itemized Charitable Contribution - Tax Years 2020 and 2021 Only

  1. In tax years 2020 and 2021, taxpayers claiming the standard deduction may also claim a non-itemized charitable contribution.

    • For tax year 2021, the non-itemized charitable contribution is claimed on line 12b of Form 1040 or Form 1040-SR. The deduction is limited to $300.00 ($600.00 for joint filers). Use reason code 092.

    • For tax year 2020, the non-itemized charitable contribution is claimed on line 10b of the Form 1040 or Form 1040-SR. The deduction is limited to $300.00. Use reason code 030.

3.11.6.14.1.2.2 (01-02-2024)
Itemized Deductions (Line 2)

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. Send the case to AM if the taxpayer claims Itemized Deduction expenses less than the Standard Deduction.

    Note:

    This is more common for taxpayers with filing status 3, Married Filing Separate.

  3. Schedule A is required when the taxpayer is changing from a standard deduction to itemized deduction or is increasing deductions on an existing Schedule A and does not explain the type of deduction and the change is not the result of a ripple effect. Correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins, if missing.

    Note:

    The Sales Tax Deduction Calculator can be used to determine unexplained Schedule A changes.

  4. For tax year 2018 through 2025, taxpayers may deduct:

    • Medical and Dental Expenses

    • Taxes You Paid

    • Interest You Paid

      Note:

      Taxpayers may claim seller paid points when purchasing a principal residence. Appraisal, inspection, title, and attorney fees are not deductible. Property taxes paid are not deductible as points even if designated as points. Reject the claim and set the math error per IRM 3.11.6.16.5, Inputting a Corrected Adjustment, if proof of the claim isn't provided. For the fill-in use: Please submit Form HUD-1, Settlement Statement, or other settlement statements to support the changes you’ve made on your Form 1040-X, Amended U.S. Individual Income Tax Return. Form HUD-1 or other settlement statement must explicitly mention Loan Origination Fees.

    • Gifts to Charity

    • Casualty and Theft Losses

      Note:

      Form 4684, Casualties and Thefts, is required to claim certain disaster losses. See IRM 3.11.6.7.6, Disaster Claim Screening, for correspondence procedures.

    • Other Itemized / Miscellaneous Deductions

      Note:

      Gambling losses can only be deducted against gambling winnings. The losses can only reduce the winnings lower or to zero, but never below zero as an outright loss. If the losses claimed exceed winnings, see IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

    • Total Itemized Deductions

    Note:

    The above list isn't all-inclusive of the changes to Schedule A, Itemized Deductions.

  5. For tax years 2018 and subsequent, there's no overall limitation on most itemized deductions.

  6. If the taxpayer is claiming Form 2106, Employee Business Expenses, see IRM 3.11.6.14.1.1.10, Form 2106, Employee Business Expenses (Line 1).

  7. Use Reason Code 076 when:

    • There are changes to itemized deductions

    • Taxpayer changes from a standard deduction to itemized deductions (Schedule A)

    • Taxpayer elects to deduct Foreign income tax as an itemized deduction on Schedule A, line 6.

3.11.6.14.1.3 (01-03-2023)
Line 4a

  1. This line isn’t currently used on the Form 1040-X .

3.11.6.14.1.4 (01-09-2023)
Qualified Business Income Deduction (Line 4b)

  1. The Qualified Business Income Deduction (QBID) is for tax year 2018 and subsequent.

  2. Screen the case for CAT-A criteria. See IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  3. Send the case to AM if:

    • Form 1040-X line 4b is changing

    • Form 8995, Qualified Business Income Deduction Simplified Computation, is attached and Form 1040-X line 4b is changing

    • Form 8995-A, Qualified Business Income Deduction, is attached and line 4b is changing

3.11.6.14.1.5 (09-25-2020)
Taxable Income (Line 5)

  1. Taxpayers use line 5, Taxable Income, to indicate how much taxable income they are reporting. Their initial tax is calculated on taxable income. When adjusting line 5, use IRN 886.

    Note:

    If the adjustment affects the AGI on line 1, Column B, by either a positive or negative amount and there's no change to the taxable income on line 5, Column B, then use IRN 886 with .00 as the amount of change for Column B.

  2. If the taxpayer attempts to adjust taxable income below zero, only make the adjustment to zero.

3.11.6.14.2 (01-01-2020)

Tax Liability

  1. Tax calculations, non-refundable credits, and taxes are reported in this section and include lines 6 through 11 of Form 1040-X, Amended U.S. Individual Income Tax Return.

  2. Credits in the Tax Liability section of Form 1040-X are addressed in the Non-Refundable Credits section at IRM 3.11.6.14.2.2, Nonrefundable Credits (Line 7), and are used to reduce the amount of taxes owed by the taxpayer.

3.11.6.14.2.1 (01-09-2023)
Tax - Calculation of Tax Liability Methods (Line 6)

  1. Line 6, Tax, is the calculation of tax on the taxable income amount shown on line 5, Taxable Income. Generally, the tax tables should be used to figure the tax on the original return. However, a different method may be used if the amended return changes the character of the income such as capital gains or qualified dividends. See the table below for the various methods of tax calculations:

    If the tax was calculated using ... Then the taxpayer enters one of the following methods in the box on line 6 ...
    Tax Table Table
    Tax Computation Worksheet TCW
    Schedule D worksheet Schedule D
    Schedule J (Form 1040) Schedule J
    Qualified Dividends and Capital Gain Tax Worksheet QDCGTW
    Form 2555 or Form 2555-EZ, Foreign Earned Income Tax (Worksheet) FEITW

    Note:

    Send the case to International
    Form 8615, Tax for Certain Children Who Have Unearned Income Send the case to AM

  2. Use the AMS worksheets to verify the tax on line 6 when the taxpayer hasn’t used the tax tables and math verification is required.

3.11.6.14.2.1.1 (01-02-2024)
Form 6251, Alternative Minimum Tax

  1. Alternative Minimum Tax (AMT) is assessed in addition to the tax on taxable income. Form 6251 isn’t a required form.

  2. Form 6251, Alternative Minimum Tax - Individuals, may involve CB and CF issues. See IRM 3.11.6.7.7, Carryback and Carryforward Screening.

  3. If AMT is present, forms and schedules may require recalculation.

  4. Use RC 045 when adjusting AMT.

3.11.6.14.2.2 (01-01-2022)
Nonrefundable Credits - Line 7

  1. Taxpayers use Form 1040-X line 7, Credits, to reduce their tax by claiming non-refundable credits by an amount not to exceed line 6, Tax.

  2. Math verify the form or schedule, if one is required.

  3. If the credit requires a qualifying child, use CC INOLE to verify the name control, TIN, and date of birth of the qualifying child.

  4. If the taxpayer claims credits greater than the tax on line 6 and the full amount of the credit(s) are used to reduce the corrected total tax on line 11 or if the taxpayer isn't eligible for all or part of non-refundable credit(s), see IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

  5. If unable to determine the source of the line 7 change, research IDRS and attachments for indications of routing criteria or other processing. If the cause of the change can't be determined ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, process normally.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  6. If the taxpayer makes an initial claim ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ that can't be substantiated, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  7. Adjust the credit with Transaction Code (TC) 29X, Reason Code (RC) 036, unless a specific RC applies.

  8. Non-refundable credits must be applied in the order that they appear in IRM 21.6.3.4.1(1), Nonrefundable Credits Procedures.

3.11.6.14.2.2.1 (01-02-2024)
Form 2441, Credit for Child and Dependent Care Expenses

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. If the taxpayer indicates a religious (e.g., "Amish," "Mennonite," or Form 4029) or conscience-based objection to obtaining a taxpayer identification number (TIN), send the case to AM.

  3. When processing the Child and Dependent Care Credit (CDCC), there are different rules depending on the year.

    If processing tax year ... And ... Then ...
    2022 and later   The credit is nonrefundable.
    2021 The line B checkbox is checked. The credit is refundable. See IRM 21.6.3.4.1.3.2, Refundable Child and Dependent Care Credit - Tax Year 2021.
    2021 The line B checkbox isn't checked. The credit is nonrefundable.
    2020 and prior   The credit is nonrefundable.

  4. Correspond for Form 2441 per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  5. See IRM 21.6.3.4.1.3, Child and Dependent Care Credit, for eligibility.

  6. Correspond for lines 1(c) and 2(b) per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins, if missing and can't be determined from CCs NAMEI, NAMEB, NAMES, NAMEE, etc. See "NOTE" in paragraph 4 above for line 1(c) on Form 2441.

  7. Update the DUPOL database if a TIN is being added or deleted. See IRM 3.11.6.13.3, Updating the Duplicate Taxpayer Identification Number (TIN) OnLine (DUPOL) Database.

    Exception:

    For the current year only, CC DUPED must be used if the qualifying person was over the age of 12 but disabled or if the child turned 13 during the year.

  8. See IRM 21.6.3.4.1.3.3, Form 2441 - Adjusting the Credit, for processing instructions.

    Note:

    If the taxpayer is reporting Dependent Care Benefits (DCB) on line 1 of Form 1040-X, process using RC 007.

3.11.6.14.2.2.2 (01-09-2023)
Schedule R, Credit for the Elderly or the Disabled

  1. If the taxpayer requests that the IRS compute the credit, send the case to AM.

  2. See IRM 21.6.3.4.1.4, Schedule R, Credit for the Elderly or the Disabled, for eligibility and processing instructions.

  3. If Schedule R is missing or incomplete, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  4. A physician's statement is only required if the taxpayer(s) checked box 2, 4, 5, 6, or 9 in Part I of Schedule R and didn't check box 2 in Part II.

  5. Taxpayers may qualify for this credit, but can't take the credit if the following applies:

    If filing status is ... Adjusted gross income (AGI) is equal to or more than ... Or the total of your nontaxable Social Security and other nontaxable pension(s), annuities, or disability income is equal to or more than ...
    Single, head of household, or qualifying surviving spouse with dependent child $17,500 $5,000
    Married filing a joint return and both spouses qualify $25,000 $7,500
    Married filing a joint return and only one spouse qualifies $20,000 $5,000
    Married filing a separate return and you lived apart from your spouse the entire year $12,500 $3,750

  6. When adjusting the credit:

    1. Use TC 291 with a dollar amount to allow/increase the credit.

    2. Use TC 290 with a dollar amount to decrease the credit.

    3. Use RC 036.

  7. If claim isn't being allowed for any reason, set a math error per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

3.11.6.14.2.2.3 (01-02-2024)
Form 8863, Education Credits

  1. Taxpayers may claim education credits on Form 8863 for qualified education expenses paid to an eligible educational institution including accredited colleges, universities, vocational schools or other postsecondary institution. This credit is composed of two separate credits:

    1. The Lifetime Learning Credit (LLC) where the maximum amount received is up to $2,000 (non-refundable only)

    2. The American Opportunity Tax Credit (AOTC) where the maximum amount received is a combined $2,500:

    • $1,500 for the non-refundable portion

    • $1,000 for the refundable portion

  2. For the Education Credit, the student(s) claimed on Form 8863 must be the primary taxpayer, secondary taxpayer, or claimed as a dependent on the tax return. Taxpayers can't claim the credit if:

    • Student is claimed as a dependent on another person’s tax return

    • Student is a nonresident alien

      Exception:

      If the student is claimed as a dependent on the return and resides in Mexico or Canada, the taxpayer may be able to claim the AOTC for that student.

    • The filing status on the tax return is married filing separate (FS 3)

    • Modified adjusted gross income (MAGI) equals or exceeds the following amounts:

      Credit Filing Status 2023 2022 2021 2020
      AOTC MFJ (2) $180,000 $180,000 $180,000 $180,000
      AOTC All others $90,000 $90,000 $90,000 $90,000
      Lifetime Learning Credit MFJ (2) $180,000 $180,000 $180,000 $180,000
      Lifetime Learning Credit All others $90,000 $90,000 $90,000 $90,000

  3. Students under age 24 don't qualify for the refundable portion of the AOTC if all the following apply:

    • Under age 18 at the end of the year, or age 18 at the end of the year and their earned income was less than one-half of their support, or a full-time student over age 18 and under age 24 at the end of the year and their earned income was less than one-half of their support.

    • At least one of the student's parents was alive at the end of the year.

    • The student isn't filing a joint return.

  4. Use the following table to determine if the education credit claim must be disallowed:

    If ... Then ...
    Through research, it is determined the person listed as the student wasn't a dependent of the taxpayer Disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed your claim on Form 8863, Education Credits. You can claim this credit only if the person listed as a student was (1) yourself, (2) your spouse, or (3) a dependent that was claimed on your tax return.
    The taxpayer didn't phase out the credit amount for the Lifetime Learning Credit. See IRM 3.11.6.14.2.2.3.1, Lifetime Learning Credit (LLC). Disallow the exceeded amount and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed part of your credit on Form 8863, Education Credits, because the credit is reduced when your Modified Adjusted Gross Income (MAGI) exceeds $ (use appropriate amount for filing status and tax year).
    The taxpayer didn't phase out the credit amount for the American Opportunity Credit. See IRM 3.11.6.14.2.2.3.2, American Opportunity Tax Credit (AOTC) - Non-refundable Disallow the exceeded amount and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed part of your credit on Form 8863, Education Credits, because the credit is reduced when your Modified Adjusted Gross Income (MAGI) exceeds $ (use appropriate amount for filing status and tax year).
    The taxpayer meets or exceeds the elimination threshold amount in paragraph 2 above Disallow the credit and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed your claim on Form 8863, Education Credits. You can’t claim the credit because your Modified Adjusted Gross Income (MAGI) exceeds $ (use appropriate amount for filing status and tax year).
    The taxpayer claimed both the American Opportunity Credit and Lifetime Learning Credit for the same student in the same year Disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed your claim on Form 8863, Education Credits. You can't claim both the American Opportunity Credit and the Lifetime Learning Credit for the same student for the same tax year.
    The taxpayer is filing as married filing separate (FS 3) and making an initial claim. Disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed your claim on Form 8863, Education Credits. You can't claim this credit if your filing status is married filing separate.
    The taxpayer is filing as married filing separate (FS 3) and previously had the LLC or AOTC. Remove all the LLC and AOTC and set a math error and send a 474C per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.
    The student indicates that they are claimed on another return Disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed your claim on Form 8863, Education Credits. You can't claim this credit if you're claimed as a dependent on your parent's or another taxpayer’s return.
    The taxpayer previously claimed the Tuition and Fees deduction and is now claiming Education Credit for the same student Disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed your claim on Form 8863, Education Credits. You may not claim both Form 8917, Tuition and Fees Deduction, and Form 8863, Education Credits, for the same student.

  5. The taxpayer must provide the educational institution’s Employer Identification Number (EIN) on Form 8863. If the EIN is missing and can't be determined through attachments or IDRS research, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  6. If unable to determine for whom the credit is being claimed or if the student's name and/or TIN is illegible, missing, or can't be determined, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

    Note:

    Form 1098-T (Tuition Statement) may be used to determine the student's name, TIN, or other required information, if attached. The yes / no questions in Part III can't be dummied.

  7. If Form 1098-T is being used as support for the Tuition and Fees deductions on line 1 of Form 1040-X, correspond for Form 8917, Tuition and Fees Deduction.

  8. If the taxpayer claims more than the maximum credit allowed recalculate and input the correct credit amount. Non-refundable credits must be applied in order. Apply any Credit for Child and Dependent Care Expenses (Form 2441) before recalculating the education credits. Refer to IRM 3.11.6.6, Master File Verification and Math Verification Screening.

  9. Form 8863 must be attached for the initial claim for each dependent. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  10. Update the DUPOL database to add or delete a Form 8863 record using CC DDBCK.

    Note:

    It isn't necessary to update the DUPOL database if the taxpayer is amending a previously claimed education credit amount for the same student that was originally claimed, unless the credit for that student is reduced to zero.

  11. The AOTC phases out when modified adjusted gross income (MAGI) is between:

    Filing Status ... 2018 and later ...
    MFJ (FS 2) $160,000 - $180,000
    All others $80,000 - $90,000

    The LLC phases out when MAGI is between:

    Filing Status 2023 2022 2021 2020
    MFJ (FS 2) $160,000 - $180,000 $160,000 - $180,000 $160,000 - $180,000 $116,000 - $138,000
    All others $80,000 - $90,000 $80,000 - $90,000 $80,000 - $90,000 $58,000 - $69,000

    Each credit is phased out by:

    • 5 percent for every $1,000 that exceeds the threshold amount for FS 2.

    • 10 percent for every $1,000 that exceeds the threshold amount for FS 1, 4, or 5.

    If the taxpayer doesn't phase-out the credits, then disallow. See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter.

3.11.6.14.2.2.3.1 (01-02-2024)
Lifetime Learning Credit (LLC)

  1. See IRM 21.6.3.4.1.5, Form 8863, Education Credits, and IRM 21.6.3.4.1.5.1, Lifetime Learning Credit, for eligibility requirements.

  2. If the taxpayer doesn't complete lines 20 thru 22 in Part III of Form 8863, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  3. If instructed to no consider the credit, follow IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP). Use fill-in: We didn't receive information from the educational institution to verify eligibility for the credit claimed.

  4. To adjust the Lifetime Learning Credit, use a TC 29X with RC 035.

3.11.6.14.2.2.3.2 (01-02-2024)
American Opportunity Tax Credit (AOTC) - Non-refundable

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. PATH Act criteria applies to this credit, see IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act)

  3. Send the case to AM if:

    • There’s a change to the AOTC and the AOTC Recertification indicator is present.

    • Form 8862, Information to Claim Certain Credits After Disallowance, is attached.

  4. The maximum amount for AOTC is $2,500 combined refundable and non-refundable credit per student. The maximum amount of each portion is:

    • $1,500 non-refundable

      Note:

      For information on the refundable portion of the AOTC, see IRM 3.11.6.14.2.2.3.2, American Opportunity Tax Credit (AOTC) Refundable Portion.

    • $1,000 refundable

      Note:

      If the box on Form 8863, Part 1, line 7 is checked, the taxpayer doesn't qualify for the refundable portion, and the entire credit may be non-refundable.

  5. If the taxpayer doesn't complete lines 20 through 26 in Part III of Form 8863, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  6. See IRM 21.6.3.4.1.5, Form 8863, Education Credits, and IRM 21.6.3.4.1.5.2, Form 8863 - Adjusting the Credit, and IRM 21.6.3.4.2.11, Form 8863, American Opportunity Tax Credit, for additional eligibility requirements.

  7. If the requirements for AOTC are not met follow the table.

    If ... Then ...
    Instructed to no consider the claim per IRM 21.6.3.4.1.5.2, Form 8863 - Adjusting the Credit, for additional eligibility requirements. No consider the claim following IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP). Use fill-in: We didn't receive information from the educational institution to verify eligibility for the credit claimed.
    Instructed to disallow the claim per IRM 21.6.3.4.1.5.2, Form 8863 - Adjusting the Credit, for additional eligibility requirements. No consider the claim and input the adjustment per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP). Use fill-in: We didn't receive information from the educational institution to verify eligibility for the credit claimed.
    The student, for which AOTC is claimed, indicates the credit has been claimed for any four prior years Disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed the American Opportunity Tax Credit on your Form 8863, Education Credits, because you can only claim the credit for four years for each student.
    The student, for which the credit is claimed, indicates they were not enrolled at least half-time for at least one academic period (that began during the tax period) at an eligible education institution Disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed the American Opportunity Tax Credit on your Form 8863, Education Credits, because the student listed must be enrolled at least half-time for at least one academic period.
    The student, for which the credit is claimed, indicates they were convicted of a felony for possession or distribution of a controlled substance and the conviction was before the end of the tax period for which the credit was claimed Disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We disallowed the American Opportunity Tax Credit on your Form 8863, Education Credits, because the student listed has been convicted of a felony for possession or distribution of a controlled substance.

  8. To adjust the AOTC non-refundable portion of the credit:

    1. Use TC 291 with a money amount to allow/increase the credit.

    2. Use TC 290 with a money amount to decrease the credit.

    3. Use RC 035.

3.11.6.14.2.2.4 (01-01-2022)
Form 8880, Credit for Qualified Retirement Savings Contributions

  1. Form 8880 must be submitted. If present, math verify the taxpayer's figure. If missing ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. If claim is being disallowed for any reason, see IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

  3. Refer to IRM 21.6.3.4.1.28, Form 8880, Credit for Qualified Retirement Savings Contributions, for eligibility and processing instructions.

3.11.6.14.2.2.5 (01-02-2024)
Credit for Other Dependents (ODC)

  1. Send the case to AM if:

    • There’s a change to Credit for Other Dependents (ODC) and a CTC/ACTC Recertification Indicator is present on IDRS.

    • The taxpayer attaches Form 8862, Information to Claim Certain Credits After Disallowance.

    • The taxpayer indicates a religious (e.g., "Amish," "Mennonite," or Form 4029) or conscience-based objection to obtaining a TIN.

  2. The ODC is a $500 non-refundable credit claimed for those dependents who don't qualify the taxpayer for Child Tax Credit.

  3. The ODC is phased out by $50 for each $1,000 the AGI exceeds $400,000 in the case of a joint return, $200,000 for all other filers.

  4. See IRM 21.6.3.4.1.24.3, Credit for Other Dependents (ODC), for eligibility.

  5. If eligibility requirements are not met, disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

    If the disallowance is related to ... Then ...
    PATH Act See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).
    A dependent not claimed on the return. See IRM 3.11.6.10.5 Correspondence for Disallowing a Claim (Letter 105C and Letter 106C. Use fill-in: We've disallowed your claim for the Credit for Other Dependents because a dependent(s) wasn't listed on your return.

  6. ODC can't be input into CC DDBCK.

  7. When adjusting the credit:

    • Use TC 291 with a money amount to allow/increase the credit (decreases the tax)

    • Use TC 290 with a money amount to decrease the credit (increases the tax)

    • Use RC 173

3.11.6.14.2.2.6 (01-02-2024)
Child Tax Credit (CTC)

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. Send the case to AM if:

    • There’s a change to CTC and a CTC/ACTC Recertification Indicator is present on IDRS.

    • The taxpayer attaches Form 8862, Information to Claim Certain Credits After Disallowance.

    • The taxpayer indicates a religious (e.g., "Amish," "Mennonite," or Form 4029) or conscience-based objection to obtaining a TIN.

  3. Child Tax Credit amounts.

    If processing tax year ... And the qualifying child is ... Then the CTC amount per qualifying child is ...
    2022 through 2025 Under 17 years of age $2,000
    2021 Under 6 years old. $3,600
    2021 Aged 6 to 17 years old $3,000
    2020 Under 17 years of age $2,000

  4. When processing the CTC, the credit has different rules depending on the year.

    If processing tax year ... And ... Then ...
    2022 through 2025

    Note:

    Schedule 8812, Credits for Qualifying Children and Other Dependents, is required.

    		   The CTC is non-refundable, and the taxpayer may qualify for up to $1,500 of ACTC.
    2021

    Note:

    Schedule 8812, Credits for Qualifying Children and Other Dependents, is required.

    		 Schedule 8812 line 13 Box A is checked. The CTC is refundable.
    2021

    Note:

    Schedule 8812, Credits for Qualifying Children and Other Dependents, is required.

    		 Schedule 8812 line 13 Box B is checked Send the case to International.
    2021

    Note:

    Schedule 8812, Credits for Qualifying Children and Other Dependents, is required.

    		 Schedule 8812 line 13 has no boxes checked The CTC is non-refundable and the taxpayer may qualify for up to $1,400 of Additional Child Tax Credit (ACTC).
    2020   The CTC is non-refundable, and the taxpayer may qualify for up to $1,400 of ACTC.

  5. If Schedule 8812 is required but missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  6. Math verify the taxpayer's figures by completing the appropriate AMS worksheet(s).

  7. CTC phase out threshold.

    If processing tax year ... Then ...
    2022 through 2025 The total CTC is phased out by $50 for each $1,000 the AGI exceeds $400,000 in the case of a joint return, $200,000 for all other filers.
    2021 The total CTC is phased out by $50 for each $1,000 the AGI exceeds $150,000 in the case of a joint return, $112,500 for HOH, and $75,000 for all other filers.

    Caution:

    When the 2021 increased CTC credit amount is reduced below what would have otherwise been applicable based on prior legislation, then the rules for tax years 2018-2020 and 2022-2025 apply (as shown below).

     

    Example:

    A married filing jointly filer, 3 children ages 1, 3, and 7, with a MAGI of $250,000. Tentative CTC is $10,200.
    $250,000 - $150,000 income threshold = $100,000
    $100,000 X 5 percent phaseout ($50 for each $1,000) = $5,000
    $10,200 (tentative credit) - $5,000 = $5,200
    The increased credit amount is less than the credit allowed following prior year rules ($2,000 per child), therefore, total allowable CTC is $6,000.
    2020 The total CTC is phased out by $50 for each $1,000 the AGI exceeds $400,000 in the case of a joint return, $200,000 for all other filers.

  8. PATH Act criteria applies to this credit, see IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

  9. See IRM 21.6.3.4.1.24.1, CTC - Qualifications, for eligibility.

  10. If the dependent doesn't qualify the taxpayer for CTC/ACTC, they may qualify the taxpayer for Credit for Other Dependents.

  11. If processing a CTC claim for tax year 2021, see IRM 3.11.6.14.5.1.1, Schedule 8812, Refundable Child Tax Credit (Tax Year 2021), and IRM 3.11.6.14.2.4.3, Reconciling Advance Child Tax Credit Payments (Tax Year 2021).

  12. If instructed to disallow, input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

    If the disallowance is related to ... Then ...
    PATH Act See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).
    Age criteria See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We've disallowed your claim on Form 1040-X. To claim the Child Tax Credit, your dependent must be under the age of (seventeen/eighteen) at the end of the tax year.
    A dependent with an ITIN or ATIN See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: Beginning in 2018, your dependent must have a Social Security number issued before the due date of your return (including extensions) to claim the Child Tax Credit.
    A dependent who doesn't qualify the taxpayer for CTC/ACTC but qualifies the taxpayer for the ODC. See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We've disallowed your claim for Child Tax Credit because the dependent(s) listed don't meet the eligibility requirements; however, we’ve allowed you the Credit for Other Dependents.
    The CTC/ACTC and ODC being claimed for the same dependent, disallow the ODC and allow the CTC/ACTC if qualified. See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use fill-in: We've disallowed your claim for the Credit for Other Dependent. The same dependent(s) can't be claimed for both the Credit for Other Dependent and the (Additional) Child Tax Credit.
    The CTC/ACTC and ODC being claimed for the same dependent, disallow the CTC/ACTC and allow the ODC if qualified. IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use the fill-in: We've disallowed your claim for Child Tax Credit because the dependent(s) listed don't meet the eligibility requirements.

  13. Update the DUPOL database using CC DDBCK prior to inputting adjustment.

  14. When adjusting the credit for:

    Tax Year ... Use ...
    2023 and later

    • IRN 820 with a money amount to record the credit increase or decrease

    • TC 291 with a money amount to increase the credit (decreases the tax)

    • TC 290 with a money amount to decrease the credit (increases the tax)

    • RC 036
    2022 and earlier

    • TC 291 with a money amount to increase the credit (decreases the tax)

    • TC 290 with a money amount to decrease the credit (increases the tax)

    • RC 036

3.11.6.14.2.2.7 (01-01-2022)
Form 8396, Mortgage Interest Credit

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. If Form 8396 isn't attached, correspond per, IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  3. Refer to IRM 21.6.3.4.1.26, Form 8396, Mortgage Interest Credit, for eligibility and processing instructions.

3.11.6.14.2.2.8 (01-01-2022)
Form 5695, Residential Energy Credits

  1. If Form 5695, Residential Energy Credits, is missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. If the taxpayer is claiming more than the maximum allowed for either credit, follow instructions per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

  3. Refer to IRM 21.6.3.4.1.27, Form 5695, Residential Energy Credits, for eligibility and processing instructions.

3.11.6.14.2.2.9 (01-09-2023)
Form 3800, General Business Credit

  1. Carryback or carryforward criteria may apply. See IRM 3.11.6.7.7, Carryback and Carryforward Screening.

  2. Screen the case for CAT-A criteria. See IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  3. Several of the credits claimed on Form 3800, General Business Credit, don't meet SP criteria. Send the case to AM if any of the following are changing:

    • Form 5884-A, Credits for Affected Midwestern Disaster Area Employers (for Employers Affected by Hurricane Harvey, Irma, or Maria or Certain California Wildfires)

      Note:

      Route as KATX.

    • Form 8844, Empowerment Zone Employment Credit

    • Form 8844-A, Empowerment Zone Employment Credit

    • Form 8845, Indian Employment Credit

    • Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips

    • Form 8904, Credit for Oil and Gas Production From Marginal Wells

    • Form 8906, Distilled Spirits Credit

    • Form 8908, Energy Efficient Home Credit

    • Form 8923, Mine Rescue Team Training Credit

    • Form 8932, Credit for Employer Differential Wage Payments

    • Form 8933, Carbon Oxide Sequestration Credit

    • Form 8941, Credit For Small Employer Health Insurance Premiums (SHOP)

      Note:

      Route as ACAX.

    • Form 8994, Employer Credit for Paid Family and Medical Leave

  4. Form 3800, General Business Credit, and if applicable, the appropriate credit form must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  5. Form 3800, General Business Credit, must be math verified.

  6. See IRM 21.6.3.4.1.22, Form 3800, General Business Credit, for eligibility and processing instructions.

  7. When adjusting the credit:

    • Use TC 291 with a money amount to allow/increase the credit.

    • Use TC 290 with a money amount to decrease the credit.

    • Use RC 036.

    Caution:

    Some credits captured on Form 3800 require specific item reference numbers. See the appropriate IRM section before adjusting the module.

3.11.6.14.2.2.9.1 (01-01-2022)
Form 3468, Investment Credit

  1. When there's a change to this credit, Form 3468, Investment Credit, and Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.9, Form 3468, Investment Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.2 (01-01-2022)
Form 5884, Work Opportunity Credit

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. When there's a change to this credit, Form 5884, Work Opportunity Credit, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  3. See IRM 21.6.3.4.1.10, Form 5884, Work Opportunity Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.3 (01-01-2022)
Form 6478, Biofuel Producer Credit

  1. When there's a change to this credit, Form 6478, Biofuel Producer Credit, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.11, Form 6478, Biofuel Producer Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.4 (06-27-2022)
Form 6765, Credit for Increasing Research Activities

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. When there's a change to this credit, Form 6765, Credit for Increasing Research Activities, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  3. See IRM 21.6.3.4.1.12, Form 6765, Credit for Increasing Research Activities, for eligibility and processing instructions.

3.11.6.14.2.2.9.5 (01-01-2022)
Form 8586, Low-Income Housing Credit

  1. When there's a change to this credit, Form 8586, Low-Income Housing Credit, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.13, Form 8586, Low-Income Housing Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.6 (01-01-2022)
Form 8820, Orphan Drug Credit

  1. When there's a change to this credit, Form 8820, Orphan Drug Credit, or Form 3800, General Business Credit, is missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.18, Form 8820, Orphan Drug Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.7 (01-01-2022)
Form 8826, Disabled Access Credit

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. When there's a change to this credit, Form 8826, Disabled Access Credit, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  3. See IRM 21.6.3.4.1.14, Form 8826, Disabled Access Credit, for eligibility and processing instructions.

  4. If instructed to disallow the credit, input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP). Use the following fill-in: We've not allowed your claim for the Disabled Access Credit. The Disabled Access Credit is a business credit. There's no indication of business ownership or activity based on your tax return information for this tax year.

3.11.6.14.2.2.9.8 (01-01-2022)
Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit

  1. When there's a change to this credit, Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit, and Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.8, Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.9 (01-01-2022)
Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit

  1. When there's a change to this credit, Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.15, Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.10 (01-01-2022)
Form 8864, Biodiesel and Renewable Diesel Fuels Credit

  1. When there's a change to this credit, Form 8864, Biodiesel and Renewable Diesel Fuels Credit, and Form 3800, General Business Credit, must be attached. If, missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.32, Form 8864, Biodiesel and Renewable Diesel Fuels Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.11 (01-01-2022)
Form 8874, New Markets Credit

  1. When there's a change to this credit, Form 8874, New Markets Credit, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.31, Form 8874, New Markets Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.12 (01-01-2022)
Form 8881, Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment

  1. When there's a change to this credit, Form 8881, Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.29, Form 8881, Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment, for eligibility and processing instructions.

3.11.6.14.2.2.9.13 (01-01-2022)
Form 8882, Credit for Employer Provided Childcare Facilities and Services

  1. When there's a change to this credit, Form 8882, Credit for Employer Provided Childcare Facilities and Services, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.30, Form 8882, Credit for Employer Provided Childcare Facilities and Services, for eligibility and processing instructions.

3.11.6.14.2.2.9.14 (01-01-2022)
Form 8896, Low Sulfur Diesel Fuel Production Credit

  1. When there's a change to this credit, Form 8896, Low Sulfur Diesel Fuel Production Credit, and Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.33, Form 8896, Low Sulfur Diesel Fuel Production Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.15 (01-01-2022)
Form 8900, Qualified Railroad Track Maintenance Credit

  1. When there's a change to this credit, Form 8900, Qualified Railroad Track Maintenance Credit, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.34, Form 8900, Qualified Railroad Track Maintenance Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.16 (01-01-2022)
Form 8907, Non-conventional Source Fuel Credit

  1. When there's a change to this credit, Form 8907, Non-conventional Source Fuel Credit, or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.7, Form 8907, Non-conventional Source Fuel Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.17 (01-01-2022)
Form 8910, Alternative Motor Vehicle Credit

  1. When there's a change to this credit, Form 8910, Alternative Motor Vehicle Credit, or Form 3800 must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.35, Form 8910, Alternative Motor Vehicle Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.18 (01-01-2022)
Form 8911, Alternative Fuel Vehicle Refueling Property Credit

  1. When there's a change to this credit, Form 8911, Alternative Fuel Vehicle Refueling Property Credit, or Form 3800 must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. Refer to IRM 21.6.3.4.1.36, Form 8911, Alternative Fuel Vehicle Refueling Property Credit, for eligibility and processing instructions.

3.11.6.14.2.2.9.19 (01-02-2024)
Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit - Tax Year 2022 and Prior

  1. When there's a change to this credit, Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit (Including Qualified Two- or Three-Wheeled Plug-in Electric Vehicles), or Form 3800, General Business Credit, must be attached. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  2. See IRM 21.6.3.4.1.38, Form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit, for eligibility and processing instructions.

    Note:

    The credit does phase-out. See IRC 30D New Qualified Plug-In Electric Drive Motor Vehicle Credit.

  3. If the credit amount is exceeded, send a Letter 916C. See IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

3.11.6.14.2.2.9.20 (01-02-2024)
Elective Payment Election (EPE)

  1. For tax year (TY) 2022, the Elective Payment Election (EPE), formerly called the Deemed Payment Election (DPE), is claimed on Schedule 3, Part II, Line 13a, by certain taxpayers filing a superseding fiscal year (FY) or short year (SY) return. Send all EPE and DPE cases to AM.

    Note:

    The EPE and DPE can be identified on the tax module by a TC 766 amount without a CRN.

3.11.6.14.2.3 (01-03-2023)
Line 9

  1. This line isn’t currently used on the Form 1040-X .

3.11.6.14.2.4 (01-02-2024)
Line 10 - Other Taxes

  1. Taxpayers use line 10, Other Taxes, to report additional taxes owed.

    Note:

    Uncollected Taxes (UT) may be reported on line 10 or 11 of Form 1040-X. Use RC 049 when UT is changing

  2. If the taxpayer is amending any of the following, send the case to AM:

    1. Form 4137, Social Security and Medicare Tax on Unreported Tip Income

    2. Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax Favored Accounts-- with Parts III - IX completed

    3. Form 8919, Uncollected Social Security and Medicare Tax on Wages

    4. Form 8959, Additional Medicare Tax

    5. Form 8960, Net Investment Income Tax

    6. Schedule H, Household Employment Taxes

    Note:

    If there's an unexplained entry on line 10, and the type of income or reason for the change can't be determined through attachments or IDRS research, refer to lead.

3.11.6.14.2.4.1 (01-02-2024)
Additional Tax on Early Distribution - Form 5329 and Form 1099-R (Line 10)

  1. Taxpayers use Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to report the amount and the additional tax for early withdrawal/distribution or an excess contribution of their IRA. Taxpayers may explain they are claiming this amount in lieu of submitting Form 5329 or Form 1099-R.

    Note:

    If taxpayer sends in both Form 5329 and Form 1099-R, follow the Form 1099-R instructions.

  2. When a taxpayer submits an amended Form 5329, only process claims that have "Part I" or "Part II" of Form 5329 completed.

  3. If processing a claim based on "Part II" , process only those based on Form 1099-QA, Distributions from ABLE Accounts, Form 1099-1A, Distributions from ABLE Accounts, or Form 5498-QA, ABLE Account Contribution Information.

    Note:

    These forms are not available on CC IRPTR.

  4. Refer to AM any Form 5329 with:

    • Entries in Part II based on a Form 1099-Q, Payments From Qualified Education Programs (Under Section 529 and 530).

    • Entries in Parts III through IX.

  5. Use the following Reason Codes when processing:

    1. RC 016 for the IRA distribution.

    2. For Distribution Code 1, the 10 percent additional tax is required unless exception code 1-12 is provided. If the additional tax is changing, use RC 048.

      Note:

      The full distribution amount should be listed on line 1 and the excluded amount should be listed on line 2, If not, send the case to AM.

  6. If the taxpayer used Form 1099-R instead of Form 5329 to report the amount, process only those claims that have a Distribution Code of "1" or "7" . If Form 1099-R has a Distribution Code other than a 1 or 7 and is changing, send the case to AM. If the taxpayer identifies a change to Form 1099-R, verify the distribution code even if there's no dollar change.

    Exception:

    If the taxpayer is claiming ONLY withholding from a 1099-R that has a distribution code other than a 1 or a 7, continue processing the return. Use reason code 051.

    1. For Distribution Code 1, the taxpayer should report the taxable portion of the distribution (box 2a of Form 1099-R) on line 1 of Form 1040-X. The taxpayer is also generally subject to a 10 percent additional tax for early withdrawal which is reported on line 10 of Form 1040-X as "Other Taxes."

    2. If the Distribution Code is "1" and the taxpayer states they’re not subject to the 10 percent additional tax, Form 5329 must be attached. Correspond if missing per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

    3. If the Distribution Code is "1" and the taxpayer didn’t include the 10 percent additional tax and no Form 5329 is attached, send the case to AM.

    4. For Distribution Code 7, the taxpayer isn’t subject to additional tax. This distribution is a "Normal Distribution" from Education Accounts.

      Note:

      If the taxpayer doesn't provide a Form 1099-R, research IDRS using CC IRPTR to determine the distribution code. If unable to determine the distribution code through IDRS research, send the case to AM. Prior year data is available; however current year data won’t be available until mid-year.

  7. The 10% additional tax is waived for reservists called to active duty.

    1. Taxpayers have been instructed to write "Active-Duty Reservist" in the top margin of the Form 1040-X if the 10% additional tax was already paid on a distribution. Eligible reservists may file Form 1040-X to claim a refund. The words "Active Duty" should be written on the top of the form. Part II, Explanation of Changes, should include:

    • The date they were called to active-duty

    • The amount of the retirement distribution

    • The amount of early distribution tax paid

  8. If the taxpayer doesn’t provide the early retirement distribution amount or tax paid and the distribution can’t be verified through IRPTR or the active-duty date isn’t provided, correspond per the table below.

    If ... Then ...
    Sending Letter 178C Use the fill-in:
    We’re unable to correct your account with the information you provided on your Form 1040-X, Amended U.S. Individual Income Tax Return. You didn’t provide the date you were called to active-duty, the amount of the retirement distribution, and the amount of early distribution tax paid to support your claim. Please submit another Form 1040-X with the date you were called to active-duty, the amount of the retirement distribution, and the amount of early distribution tax paid.
    Sending Letter 324C Use the fill-in:
    Please provide the date you were called to active-duty, the amount of the retirement distribution, and the amount of early distribution tax paid.

  9. Process the claim using reason code 048.

3.11.6.14.2.4.2 (01-02-2024)
Self-Employment (SE) Tax (Line 10)

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. Send the case to AM when SE tax is changing if:

    • There’s an indication the taxpayer is a minister or received wages from ministerial duties.

    • Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, is present.

    • There’s an indication of partnership (i.e., Schedule E) on which the SE tax is based.

    • The Optional Method in Section II of Schedule SE was used to calculate SE tax

  3. Correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins, if on a joint return:

    • Both taxpayers have self-employment income, and the taxpayers combined their SE Tax onto one Schedule SE.

      Exception:

      For tax years 2019 and prior, if one spouse qualifies to use Short Schedule SE and the other must use Long Schedule SE, then both taxpayers can use the same form.

    • You’re unable to determine which taxpayer's account to adjust.

  4. If the correspondence sent per paragraph 5 above is undelivered or no-reply has been received, then assign the SE income following the table.

    If ... And ... Then ...
    The full SE income is assigned to the primary taxpayer Assigning the SE income to the primary doesn’t exceed the maximum amount subject to SE social security Assign the SE income to the primary taxpayer.
    The full SE income is assigned to the primary taxpayer Assigning the SE income to the primary does exceed the maximum amount subject to SE social security Assign the full SE income to the secondary taxpayer
    The full SE income is assigned to the secondary taxpayer Assigning the SE income to the secondary doesn’t exceed the maximum amount subject to SE social security Assign the SE income to the secondary taxpayer.
    Both taxpayers have SE income Assigning the SE income to the primary taxpayer exceeds the maximum amount subject to SE social security Assign the SE income to the primary taxpayer up to the maximum amount and assign the remainder to the secondary taxpayer.
    Both taxpayers have SE income Assigning the SE income to the secondary taxpayer exceeds the maximum amount subject to SE social security Assign the SE income to the secondary taxpayer up to the maximum amount and assign the remainder to the primary taxpayer.

  5. See IRM 21.6.4.4.14, Self-Employment Tax, for filing requirements.

  6. See IRM 3.11.6.14.5.8, Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, for claims involving Form 7202.

  7. See IRM 3.11.6.14.2.4.2.1, Self-Employment Tax Deferment, for deferment claims.

  8. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  9. Income that isn’t subject to SE Tax:

    • Native American Tribal income. For help in determining Native American Tribal income, see Reporting Tribal Per Capita Distributions on Your Tax Return.

    • Statutory employee income indicated on Form W-2, box 13.

  10. See IRM 21.6.4.4.14.2, Self-Employment Tax Adjustments, for adjustment instructions.

3.11.6.14.2.4.2.1 (01-09-2023)
Self-Employment Tax Deferment - Tax Year 2020

  1. The deferral allows self-employed individuals to defer their portion of social security taxes. The deferral is applicable to tax year 2020.

  2. If the deferment amount is being claimed on Form 1040, Schedule H, Household Employment Taxes, send the case to AM.

  3. The amount of deferral for self-employed individuals is 50 percent of the amount reported on line 26 of Schedule SE, Self-Employment Tax. The deferment amount is carried to Form 1040, Schedule 3, Additional Credits and Payments, line 12e, and posted with a TC 766 Credit Reference Number (CRN) 280. CRN 280 acts as a false credit.

    Note:

    Any overpayment offsets to the deferred amount prior to refunding. Generally, the taxpayer only benefits if filing a balance due return. When deferred and recaptured at the same time, IDRS shows the deferred amount (CRN 280), a refundable credit such as the Earned Income Tax Credit or the Additional Child Tax Credit, and a reversal of the deferred amount (TC 767 CRN 280).

  4. The deferred amount must be paid by the following dates: 50% of the deferred amount was due on or before December 31, 2021. The remaining deferred amount was due on or before December 31, 2022. Subsequent payments made, or overpayments arising on the module, trigger CRN 280 reversals (TC 767) for appropriate amounts and dates. If the taxpayer doesn't pay the amount owed, the computer reverses the appropriate amount as of the payment due date and penalties and interest begins to accrue. CC IMFOLM displays the deferred amount and when it is due in the "CARES ACT SECT 2302 DEFERRAL" section.

  5. To adjust the maximum deferred amount for self-employed individuals, input the following:

    • Schedule SE, line 26 - IRN 211

    • Form 1040, Schedule 3, line 12e - CRN 280

    • RC 044

    Note:

    In xMend, the adjustment is input on line 10.

3.11.6.14.2.4.3 (02-10-2022)
Reconciling Advance Child Tax Credit Payments - Tax Year 2021

  1. When filing their amended return, taxpayers who received Advance Child Tax Credit (AdvCTC) payments complete Schedule 8812, Credit for Qualifying Children and Other Dependents, to reconcile the amount of payments received with the amount of Child Tax Credit (CTC) they can properly claim on their 2021 return.

  2. Refer to IRM 21.6.3.4.1.24.2.1, Reconciling the Advance Child Tax Credit Payments, for processing instructions.

  3. The following Item Reference Numbers (IRN) reflect AdvCTC information from the original return or subsequent adjustment:

    • IRN 817 - Excess AdvCTC - Schedule 8812 line 29

    • IRN 818 - AdvCTC Repayment - Schedule 8812 line 40

    • IRN 819 - AdvCTC Limitation amount (write-off/forgiveness due to repayment protection)

  4. When adjusting the AdvCTC:

    • Use TC 29X as appropriate

    • Use appropriate IRN from list in paragraph 4 above

    • Use RC 221 and the appropriate source code and blocking series.

    Reminder:

    Taxpayers who owe additional tax may be eligible for full or partial repayment protection based on their modified adjusted gross income (MAGI).

3.11.6.14.2.5 (01-02-2024)
Total Tax (Line 11)

  1. Line 11, Total tax, is used to indicate the taxpayer's total tax liability. Total tax liability is the sum of:

    • "Tax" before credits (based on taxable income) from line 6

    • Minus (−) any "nonrefundable credits" from line 7

    • Plus (+) any additional "Other taxes" from line 10

    • Equals (=) "Total tax" on line 11

      Note:

      The amount of total tax based on the original filed return is represented by a TC 150 on CC TXMOD or CC IMFOL.

  2. Math verification is required on a total tax change of≡ ≡ ≡ ≡ ≡ ≡ ≡ or more. See IRM 3.11.6.6, Master File Verification and Math Verification Screening, if there's a discrepancy between IRS and taxpayer's figures, or there's a math error.

  3. All processable claims require either a TC 290 or TC 291:

    Transaction Code Tax Adjustment
    Use TC 290

    • Increase in line 11.

    • No change on line 11 (zero tax change).
    Use TC 291 Decrease on line 11

    Note:

    Never adjust line 11 below zero, regardless of what the taxpayer has indicated. If the adjustment can't be input because you can't reduce an item below zero, then adjust the account following IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

3.11.6.14.3 (01-01-2021)

Payments

  1. Federal withholding, estimated tax payments, and refundable credits are reported in the Payments section and include lines 12 through 17 of Form 1040-X.

  2. Credits in the Payments section of Form 1040-X are addressed in IRM 3.11.6.14.4, Earned Income Credit (EIC) - Line 14, and IRM 3.11.6.14.5, Refundable Credits - Line 15.

3.11.6.14.3.1 (01-02-2024)
Federal Income Tax Withholding (Line 12)

  1. Taxpayers use line 12 to report their:

    • Federal Income Tax Withholding - TC 806 or TC 807

    • Excess Social Security/Railroad Retirement Tax Act (RRTA) Tier 1 - TC 766

  2. When using Command Code (CC) IRPTR to verify withholding, refer to paragraph 2 of IRM 3.11.6.14, Specific IMF Adjustments, before beginning the verification process.

  3. When a taxpayer with an ITIN files an amended return, some of the withholding might be reported under either a work assumed SSN or ITIN. When verifying the withholding, the name on the return must match the income document (IDOC).

  4. If withholding is being claimed per Schedule K-1 and the IDOC can’t be verified on CC IRPTR, send the case to AM

  5. If a TC 971 AC 123 with a MISC field entry of "1040X INVALID IDOC" is present on the account, follow IRM 3.11.6.14, Specific IMF Adjustments.

  6. When an amended return with Social Security Administration (SSA) benefits or other types of income where the withholding may be questionable, research CC IRPTR to verify the withholding. If IRPTR doesn't substantiate the withholding, "No Consider" the claim per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP), using the fill-in: Please provide documentation to substantiate your withholding claim such as Form 1099-SSA, or other appropriate documentation and we’ll reconsider your claim.

  7. If a TC 971 AC 123 with a MISC field entry of 1040X INC MISMATCH is present on the account or there’s an increase to withholding of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ follow the table below to verify the change:

    If ... And ... Then ...
    All IDOCs associated with the change are provided You’re unable to verify the withholding amount on IRPTR Correspond per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).
    All IDOCs associated with the change are provided You’re able to verify the withholding amount on IRPTR Process as normal.
    Form W-2, Form 1099 series or other income document(s) associated with the change are missing, handwritten, altered or is a substitute You’re unable to verify the withholding amount on IRPTR Correspond per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).
    Form W-2, Form 1099 series or other income document(s) associated with the change are missing, handwritten, altered or is a substitute You’re able to verify the withholding amount on IRPTR Process as normal.
    If the withholding amount associated with the change is based on Form W-2 whether provided or on IRPTR The withholding amount is equal/similar to the FICA (Social Security and Medicare taxes) on the same amount of income Allow the withholding amount from the Form W-2.

  8. When adjusting line 12, use RC 051 for changes to withholding and RC 055 for Excess Social Security and Tier RRTA:

    Caution:

    Never adjust line 12 below zero.

    1. CRN 806 for increases to withholding.

    2. CRN 807 for decreases to withholding.

    3. CRN 252 for increases/decreases to Excess Social Security.

    Note:

    Use Priority Code 8 when there's a TC 17X posted on the account to prevent an unpostable condition.

3.11.6.14.3.1.1 (01-02-2024)
Excess Social Security and Railroad Retirement Tax Act (RRTA)

  1. To process an excess Social Security and Railroad Retirement Tax Act (RRTA) claim the individual taxpayer must report wages from more than one employer.

  2. Social Security or RRTA wages and tax withheld must exceed the maximum amount required for the tax year:

    Tax Year Maximum SS/RRTS Wages Maximum SS/RRTA Tax W/H (Tax Limit – 6.2 percent)
    2023 $160,200 $9,932.40
    2022 $147,000 $9,114.00
    2021 $142,800 $8,853.60
    2020 $137,700 $8,537.40

    Note:

    Social Security Wages are found in Box 3 of the W-2 Form.

  3. If more than the maximum Social Security tax (or equivalent portion of the RRTA tax) is withheld from the wages of the employee, the employee can receive a credit for the Social Security or RRTA tax withheld in excess of the maximum Social Security and RRTA tax. This credit is available only if such withholding is the result of the employee working for two or more employers.

  4. Use the following when the taxpayer doesn’t meet the necessary qualifications to claim excess Social Security and RRTA Tier 1:

    If ... Then ...
    The excess Social Security was withheld by only one employer and there’s one W-2

    Exception:

    If the issuer of the W-2 is a Professional Employer Organization (PEO) or Certified Professional Employer Organization (CPEO) (a payroll processing company), they’ll never reimburse the employee. Follow the procedures in the next box below.

    		 Follow IRM 3.11.6.10.10, Correspondence for Excess Social Security and Railroad Retirement Tax (Letter 404C).
    The taxpayer has separate Forms W-2 with the same employer EIN The taxpayer can claim excess Social Security or RRTA Tier I tax withheld if:

    • A parent company and one or more of its subsidiaries are responsible.

    • A company acted as an agent for more than one of the taxpayer’s employers.

    • The W-2 was issued by a Professional Employer Organization (PEO) or Certified Professional Employer Organization (CPEO) (a payroll processing company).

    Note:

    The Form W-2 won’t show it was issued by a PEO or CPEO, but if the taxpayer indicates the W-2 was issued by one allow the credit.
    The taxpayer is MFJ and used earnings / Social Security from both the primary and secondary taxpayers to calculate excess Social Security Follow IRM 3.11.6.10.10, Correspondence for Excess Social Security and Railroad Retirement Tax (Letter 404C).
    The taxpayer’s wages don't exceed the wage base limit for the tax year Disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and use fill-in: We disallowed your claim for excess Social Security withheld. Your wages don't exceed $XXX,XXX. for tax year XXXX. In order to claim excess Social Security, you must have reported wages from more than one employer, your total wages must exceed the wage base limit, and the Social Security tax withheld must exceed the maximum amount required for the tax year.
    The taxpayer’s Social Security withheld doesn't exceed the maximum amount required for the tax year Disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and use the fill-in: We've disallowed your claim for excess Social Security withheld. Your Social Security withheld doesn't exceed $XXXX for tax year XXXX. In order to claim excess Social Security, you must have reported wages from more than one employer, and the Social Security tax withheld must exceed the maximum amount required for the tax year.

  5. If an adjustment is required:

    1. Verify the overpayment of Social Security/RRTA tax withheld based on Forms W–2.

    2. Use Credit Reference Number (CRN) 252 for an increase or decrease to excess Social Security and RRTA. Input CRN 252 with a minus (-) to reduce the previously allowed excess Social Security and RRTA tax. The CRN 252 generates a Transaction Code (TC) 766 or TC 767.

      Note:

      If an error message is displayed, input "N" in the override field.

    3. Use Reason Code (RC) 055.

3.11.6.14.3.2 (02-17-2023)
Estimated Tax Payments (Line 13)

  1. Estimated tax payments are payments made by the taxpayer under certain conditions. The following isn’t an all-inclusive list, but the payments may be recorded as TC 430, TC 660, TC 670, TC 710 or TC 716. Depending on the results of your IDRS research, you may need to use the CSI Tool to determine other payment types.

  2. When making a determination on whether a payment is misapplied, you must look at the overall status of the account and how the payment(s) are being used. To help with your determination, perfect the return, see IRM 3.11.6.6, Master File Verification and Math Verification Screening. Once the return is perfected, compare your perfected line 13 figures with the payments on the module. Be sure to take into account any adjustment that’s being made on the amended return then use the following table.

    If ... And ... Then ...
    The payments don't match the amount claimed after perfecting the return Credit balance is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Follow normal processing procedures.
    The payments don't match the amount claimed after perfecting the return Credit balance is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Send the case to AM.
    There are payments posted The module will be a zero-balance or balance due after the adjustment Process following normal procedures.
    There are payments posted Credit balance is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Process following normal procedures.
    There are payments posted Credit balance is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Send the case to AM
    The taxpayer submits a payment with the amended return (TC 670) The payment matches the adjustment Process following normal procedures.
    The taxpayer submits a payment with the amended return (TC 670) The module is in balance due after the adjustment Process following normal procedures.
    The taxpayer submits a payment with the amended return (TC 670) The remaining credit balance on the module is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Process following normal procedures.
    The taxpayer submits a payment with the amended return (TC 670) The remaining credit balance on the module is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. Process following normal procedures.

    2. Process following normal procedures.

    3. Process following normal procedures.

    4. Send the case to AM.
    The estimated tax payment is the only issue The total posted to the module matches the amount claimed Input a TC 290 .00, RC 61, and SC 1.
    There are estimated tax (ES) payments on the module ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    OR

    Taxpayer is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ from the module    		 The taxpayer is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Send the case to your local RIVO. Input a CC ACTON history item "TO RIVO"

    Austin: 6574 AUSC
    Kansas City: 6574 S-2 KCSC
    Ogden: 9002 OSC
    Memphis: 6574 AUSC
    See IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

3.11.6.14.4 (01-02-2024)

Earned Income Credit (EIC) - Line 14

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. Send the case to AM if:

    • The Earned Income Tax Credit (EITC) is changing and there’s a EITC Recertification indicator is present on IDRS

    • The taxpayer attaches a Form 8862, Information to Claim Certain Credits After Disallowance

    • Math Error Code 100, 653, 814, 815, or 816 is posted on IDRS

  3. PATH Act criteria applies to this credit, see IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

    Note:

    The PATH Act applies to filing status changes only to the extent of any additional EITC claimed. The PATH Act doesn't allow the removal of EITC previously allowed due to a filing status change to married filing jointly unless initiated by the taxpayer.

  4. A special rule applies for certain taxpayers affected by the disasters shown below. Qualified individuals whose earned income for the applicable tax year is less than the earned income in the preceding taxable year may elect to use their preceding taxable year earned income when figuring EITC. Taxpayers should enter "PYEI," and the dollar amount of the prior year earned income on the dotted line for EITC.
    The main home of qualified individuals must have been in:

    • A federally declared disaster that occurred in 2018 or 2019, but before December 21, 2019.

    • A federally declared disaster that occurred beginning January 1, 2020, but before February 26, 2021

    • Hurricane Ida disaster after August 28, 2021

    Note:

    Verify the taxpayer was in the qualified disaster area via the IRS Disaster Assistance Program. Change the category to "KATX" if adjusting.

  5. As part of the Taxpayer Certainty and Disaster Tax Relief Act of 2020, individuals whose earned income for tax year 2020 is less than the earned income for 2019 may elect to use their 2019 earned income when figuring EITC. Taxpayers should enter "PYEI," and the dollar amount of the prior year earned income on the dotted line for EITC. Taxpayers who also claim ACTC aren’t required to follow the election they made when they figured EITC.

  6. For tax year 2021, if earned income is less than the earned income for 2019, individuals may elect to use their 2019 earned income when figuring EITC. Taxpayers should enter "PYEI," and the dollar amount of the prior year earned income on the dotted line for EITC.

  7. When the taxpayer figures EITC using PYEI, taxpayers should use the current year AGI.

3.11.6.14.4.1 (01-02-2024)
Earned Income Tax Credit (EITC) Eligibility Criteria

  1. See IRM 21.6.3.4.2.7.1, EITC Eligibility Criteria, for eligibility.

  2. Taxpayers may be eligible for the Earned Income Tax Credit (EITC) if the following apply:

    1. To claim the EITC, the taxpayer, and spouse if filing jointly, must have valid SSNs. Any qualifying child claimed for EITC must be listed on Schedule EIC and the qualifying child must have a valid SSN in order to be taken into account for purposes of computing the credit. For TIN requirements, see IRM 3.11.6.4.4.2, TIN requirements for Exemptions and Credits, and IRM 21.6.3.4.2.7.3, Earned Income Tax Credit (EITC) - Social Security Number Requirements. For tax years 2021 and later, a taxpayer who does not qualify for the EITC unless they have a qualifying child (e.g., taxpayer does not meet age requirements for EITC without a qualifying child) should be allowed the EITC computed for a taxpayer without a qualifying child if they list a qualifying child on Schedule EIC who meets all of the requirements except the TIN requirement.

      Exception:

      If a child was born and died in the same year, the taxpayer must follow certain rules when claiming the credit. The taxpayer must:
      • Enter "Died" on Schedule EIC, line 2.
      • Attach a copy of the child’s birth certificate, death certificate, or hospital medical records showing a live birth.
      • Enter "12" on Schedule EIC, line 6.

    2. The adjusted gross income (AGI) is less than the established limits in paragraph 3.

    3. Investment income isn’t more than the established limits in paragraph 3.

    4. Earned income is at least $1, but less than the established limits. Refer to IRM 3.11.6.14.1.1.1, Earned Income, when determining earned income.

      Caution:

      In certain instances, taxpayers can use prior year earned income (PYEI). Refer to IRM 3.11.6.14.4, Earned Income Credit (EIC) -Line 14, for PYEI.

  3. Refer to the following for adjusted gross income (AGI) and investment income limits:

    • IRM 21.6.3.4.2.7.6, Earned Income Tax Credit (EITC) - Adjusted Gross Income.

    • IRM 21.6.3.4.2.7.5, Earned Income Tax Credit (EITC) - Investment Income Limitation.

  4. If the taxpayer's investment income is more than the designated limit, disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and use the fill-in: We've disallowed your claim for the Earned Income Tax Credit because your investment income is greater than $XXXX.

  5. For tax years 2020 and prior, taxpayers with Filing Status (FS) 3, Married filing separately, are not eligible for the EITC.

    If ... And ... Then ...
    The taxpayer is changing to FS 3 EIC is already present on the module Remove the EIC and input the adjustment per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.
    The taxpayer is changing to FS 3 The taxpayer is making an initial claim for EIC Disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP) and use the fill-in: We disallowed your claim for the Earned Income Tax Credit because your Filing Status didn’t meet the eligibility requirements.
    The taxpayer is already FS 3 EIC is already present on the module Send the case to AM as an erroneous refund per IRM 3.11.6.8, 1040-X Routing Guide.
    The taxpayer is already FS 3 The taxpayer is making an initial claim for EIC Disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP) and use fill-in: We disallowed your claim for the Earned Income Tax Credit because your Filing Status didn’t meet the eligibility requirements.

3.11.6.14.4.2 (01-03-2023)
Taxpayer without Qualifying Child(ren) on Schedule EIC

  1. See IRM 21.6.3.4.2.7.1.1, Earned Income Tax Credit (EITC) - Taxpayer with No Qualifying Child/ren, for eligibility requirements.

  2. If the taxpayer doesn’t meet the eligibility requirements, disallow the claim and input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and use the fill-in: We've disallowed your claim for the Earned Income Tax Credit. To qualify for this credit, you must meet the age test, live in the United States for more than half the year, and not qualify as a dependent or qualifying child of another person.

3.11.6.14.4.3 (01-02-2024)
Taxpayer with Qualifying Child(ren) on Schedule EIC

  1. See IRM 21.6.3.4.2.7.1, Earned Income Tax Credit (EITC) - Eligibility Criteria, and IRM 21.6.3.4.2.7.1.2, Earned Income Tax Credit (EITC) - Taxpayer with Qualifying Child/ren, for eligibility requirements.

    Reminder:

    The taxpayer's child doesn’t have to be a dependent of the taxpayer in order for the taxpayer to claim the EITC.

    Note:

    The Additional Child Tax Credit may have to be recomputed if the EITC is allowed and the taxpayer claimed three or more qualifying children for the Child Tax Credit. See IRM 3.11.6.14.5, Refundable Credits - Line 15.

  2. If a child doesn’t appear to meet the age requirements, don't assume the child is a student or disabled. The taxpayer must indicate the child meets the age test. If a qualifying dependent doesn't appear to meet the age test, send Letter 474C and use the fill-in: We didn't allow part of your claim for Earned Income Tax Credit because a child you submitted doesn't appear to meet the age requirement. If your child meets this requirement as a student or disabled dependent, you must file a new Form 1040-X, Amended U.S. Individual Income Tax Return, and complete a new Schedule EIC.

    Note:

    If there are multiple children, input an adjustment for any child(ren) that meet all qualifications and send Letter 474C and use the fill-in: We didn't allow part of your claim for the Earned Income Tax Credit because one or more of the children submitted don't meet the age requirement. In order to claim a student or disabled dependent, you must file a new Form 1040-X, Amended U.S. Individual Income Tax Return, and complete Schedule EIC.

  3. If a child doesn't appear to meet the relationship, residency, or joint return test disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and use the fill-in: We've disallowed your claim for the Earned Income Tax Credit because the qualifying person shown on Schedule EIC didn't meet either the relationship, residency, or joint return test requirements needed to claim this credit.

    Note:

    To verify Joint Return test, check IMFOLI for filing status. If FS2 in IMFOLI, see TXMOD.

  4. If the taxpayer claims a kidnapped child, see IRM 21.6.3.4.2.7.2, Earned Income Tax Credit (EITC) - Kidnapped Child, for eligibility requirements.

3.11.6.14.4.4 (01-02-2024)
Adjusting the Earned Income Tax Credit (EITC)

  1. When the taxpayer makes an initial claim for the Earned Income Tax Credit (EITC) or when adding a qualifying child, Schedule EIC, Earned Income Credit, must be attached. If missing correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

    Exception:

    Schedule EIC isn't required when claiming the EITC for self and/or spouse only unless the taxpayer(s) would not be eligible for the credit without claiming a qualifying child.

  2. Before allowing the EITC, verify the qualifying child(ren) name(s), date of birth and SSN(s) using CC DDBCK, CC INOLE and CC NAMES. If the qualifying child's SSN doesn't verify, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  3. Always math verify the EITC amount using either CC EICMP or the EIC AMS worksheet when there's a change to earned income, adjusted gross income (AGI), filing status, or dependents.

  4. After calculating the allowable EITC:

    If ... Then ...
    The EITC amount matches taxpayer's figure Continue processing the return.
    The taxpayer's figure ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the computed EITC

    Caution:

    Don't exceed the maximum EITC per the table in paragraph 6 below.

    		 Accept the taxpayer’s figure and continue processing the return.
    The taxpayer’s figure is less than the computed EITC amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Adjust the EITC amount using the computed figure. Don't correspond or set a math error.
    The taxpayer's figure is greater than the computed EITC ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Adjust the amount to the computed EITC and set the math error per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

  5. The following is the maximum allowable EITC amounts. If the taxpayer’s EITC amount exceeds the maximum allowable amount below, adjust to the computed amount to avoid an unpostable condition.

    Tax Year No children 1 child 2 children 3 or more children
    2023 $600 $3,995 $6,604 $7,430
    2022 $560 $3,733 $6,164 $6,935
    2021 $1,502 $3,618 $5,980 $6,728
    2020 $538 $3,584 $5,920 $6,660

    Note:

    If the taxpayer’s EITC amount exceeds the maximum amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ don't correspond or set a math error.

    Example:

    On a 2022 return the taxpayer with two children claims an EITC amount of $6,167. Your EIC worksheet calculates $6,160 and the maximum EITC for two children in 2022 is $6,164 Adjust to the computed amount and don't set a math error or correspond.

  6. If the taxpayer has already received the EITC, input the adjustment per IRM 3.11.6.16.5, Inputting a Corrected Adjustment. Use fill-in: We didn't allow the Earned Income Tax Credit because our records indicate that you previously received the credit as part of your original or amended return.

  7. EITC allowed on the original return posts as a computer-generated TC 768 with a minus after the amount.

  8. Update the DUPOL database using CC DDBCK prior to making any adjustments when:

    • Adding or deleting a qualifying child for the EITC

    • Increasing the EITC

      Exception:

      Don't update when the EITC increase is due to additional Form W-2, or when working EITC Non-TIN related math error responses except for ME 653. SP is now working TIN related math errors. TIN related math error codes include 604, 610, 605, 654, 667, 701, 702, 741, 743, 745 and 748.

      Note:

      If the DDBCK response states that the child failed validation (other than an invalid TIN/Name issue), send the case to AM.

  9. When making an adjustment to the EITC:

    • RC 053

    • CRN 764 for increases

    • CRN 765 for decreases

    Note:

    Priority code ''8'' is required when a TC 764 is input with TC 29X and there's a prior posted TC 29X (except a previously posted TC 290 with priority code 6 or a TC 290 with Julian Date 999). Use priority code ''1'' if both priority code ''1'' and ''8'' are required to adjust the account. Example: An account with a -L freeze that’s processable and the conditions above would require priority codes ''1'' and ''8'' and therefore ''1'' would be used.

3.11.6.14.5 (01-01-2022)

Refundable Credits - Line 15

  1. A refundable credit isn't limited by the amount of tax owed. If total credit(s) or payment(s) exceed the tax liability, the excess is refundable.

  2. The following subsections provide processing instructions for refundable credits:

    • Schedule 8812, Credits for Qualifying Children and Other Dependents

    • Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

    • Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

    • Form 4136, Credit for Federal Tax Paid on Fuels

    • Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals

    • Recovery Rebate Credit

    • Form 2441, Dependent Care Credit.

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. If the taxpayer claims a non-refundable credit on line 15 of Form 1040-X, move the amount to line 7. See IRM 3.11.6.14.2.2, Nonrefundable Credits - Line 7.

  5. The taxpayer may request all or a portion of their overpayment be credited to the subsequent tax year as an estimated payment. See IRM 3.11.6.14.6.2, Credit Elect (Line 23).

3.11.6.14.5.1 (01-02-2024)
Schedule 8812, Additional Child Tax Credit (ACTC)

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

    Note:

    If there's a math error on the account for CTC or ACTC, send the case to AM, not CAT-A

  2. Send the case to AM if:

    • There’s a change to ACTC and a ACTC Recertification Indicator is present on IDRS.

    • The taxpayer attaches Form 8862, Information to Claim Certain Credits After Disallowance.

    • The taxpayer indicates a religious (e.g., "Amish," "Mennonite," or Form 4029) or conscience-based objection to obtaining a TIN.

  3. Path Act criteria applies to this credit. See IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

  4. See IRM 21.6.3.4.2.8, Additional Child Tax Credit (ACTC), for eligibility.

  5. For tax years 2022 and 2021, Schedule 8812 is required. If missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  6. For Tax years 2020 and prior, Schedule 8812 is required when the taxpayer has 3 or more qualifying children. If a taxpayer fails to submit a Schedule 8812 when required, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  7. To qualify for the ACTC, the taxpayer must meet the qualifications for the CTC in IRM 3.11.6.14.2.2.6, Child Tax Credit (CTC). If the taxpayer doesn't meet all of the criteria, disallow the claim. Input the adjustment per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

  8. If a taxpayer (or the spouse if married filing jointly) received non-taxable combat pay, they must include the amount in figuring their earned income when figuring the ACTC.

  9. If ACTC is changing, math verify the taxpayer's figure by completing the AMS worksheets.

    If ... And ... Then ...
    The allowable ACTC matches taxpayer’s figure   Continue processing the return.
    The allowable ACTC doesn't match taxpayer’s figure The taxpayer's figure is within ≡ ≡ ≡ ≡ of the allowable ACTC Accept the taxpayer’s figure and continue processing the return.
    The allowable ACTC doesn't match taxpayer’s figure The taxpayer’s figure is greater than the allowed ACTC by ≡ ≡ ≡ ≡ ≡ Adjust the ACTC for the correct amount and set the math error per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.
    The allowable ACTC doesn't match taxpayer’s figure The allowed ACTC is greater than the taxpayer’s figure by ≡ ≡ ≡ or more (taxpayer is due more ACTC) Adjust the ACTC amount using your recomputed figure. Don't correspond or set a math error.

    Note:

    Recompute the ACTC if there's a change to other non-refundable credits impacting the amount of CTC allowed.

  10. Update the DUPOL database per IRM 3.11.6.13.3, Updating the Duplicate Taxpayer Identification Number (TIN) OnLine (DUPOL) Database, prior to making any adjustment.

  11. When adjusting the credit:

    • Use CRN 336 to increase the credit

    • Use CRN 336 with a minus (-) to decrease a previously posted credit

    • Use RC 061

3.11.6.14.5.1.1 (01-02-2024)
Schedule 8812, Refundable Child Tax Credit (Tax Year 2021)

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. The taxpayer must check line 13 Box A of Schedule 8812, Credits for Qualifying Children and Other Dependents, for the credit to be refundable.

    Reminder:

    If Box B is checked, send the case to International.

  3. If Box A isn't checked, and the taxpayer is claiming the credit as fully refundable, input a corrected adjustment per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

    Exception:

    If the taxpayer has also claimed Form 2441, Child and Dependent Care Expenses, with Box B checked, correspond using the appropriate missing information letter. When corresponding use the fill-in: We're unable to process your amended return. Please clarify the residency question(s) on Form 2441, Child and Dependent Care Expenses, and Schedule 8812, Credits for Qualifying Children and Other Dependents.

  4. Math verify the taxpayer's figures by completing the appropriate AMS worksheet(s).

  5. To adjust the credit:

    • Input a TC 290 .00, if no other adjustment is required.

    • Use credit reference number 336 to adjust the credit.

    • Use RC 061.

3.11.6.14.5.2 (01-02-2024)
American Opportunity Tax Credit (AOTC) Refundable Portion

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. PATH Act criteria applies to this credit, see IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

  3. Send the case to AM if:

    • There’s a change to the AOTC and the AOTC Recertification indicator is present.

    • Form 8862, Information to Claim Certain Credits After Disallowance, is attached.

  4. For claims involving the non-refundable portion of the American Opportunity Tax Credit, see IRM 3.11.6.14.2.2.3, Form 8863, Education Credits, and IRM 3.11.6.14.2.2.3.2, American Opportunity Tax Credit (AOTC) - Non-refundable.

  5. The refundable portion of AOTC begins to phase-out when the modified adjusted gross income (MAGI) is between the following.

    Filing Status 2023 2022 2021 2020
    MFJ (FS 2) $160,000 - $180,000 $160,000 - $180,000 $160,000 - $180,000 $160,000 - $180,000
    All others
    (FS 1, 4 or 5)    		 $80,000 - $90,000 $80,000 - $90,000 $80,000 - $90,000 $80,000 - $90,000
    The credit is phased out by:

    • 5 percent for every $1,000 that exceeds the threshold amount for FS 2.

    • 10 percent for every $1,000 that exceeds the threshold amount for FS 1, 4 or 5.

    Note:

    If the taxpayer doesn't phase-out AOTC, when required, disallow the exceeded amount. See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

  6. When adjusting the refundable portion of the credit

    1. Use CRN 260 to increase or decrease the credit amount.

    2. Use RC 106

3.11.6.14.5.3 (01-09-2023)
Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

  1. Frivolous criteria may apply. Refer to IRM 3.11.6.7.11, Frivolous Claims Screening.

  2. See IRM 21.6.3.4.2.5, Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, for eligibility and processing instructions.

  3. If the taxpayer is claiming ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 2439 is missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  4. Loose Form 2439, Copy A or B may be received. If "NOMINEE" isn't noted at the top of the form:

    If the Shareholder's name is a ... Then ...
    Taxpayer Input TC 290 for .00 and use RC 057.
    Company Send the case to AM.

3.11.6.14.5.4 (01-01-2022)
Form 4136, Credit for Federal Tax Paid on Fuels

  1. Frivolous criteria may apply. Refer to IRM 3.11.6.7.11, Frivolous Claims Screening.

  2. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  3. See IRM 21.6.3.4.2.6, Form 4136, Credit for Federal Tax Paid on Fuels, for eligibility criteria.

  4. If Form 4136, Credit for Federal Tax Paid on Fuels, is required and is missing, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  5. If Form 4136, Credit for Federal Tax Paid on Fuels, is present, process using RC 061 and the CRNs on Form 4136 . Include priority code 8 when making an adjustment.

  6. If Form 4136, Credit for Federal Tax Paid on Fuels, is missing and under tolerance, process using RC 061 and CRN 362. Include priority code 8 when making an adjustment.

  7. The Fuel Tax Credit posts as a CRN 450. Use the CRN from the Form 4136 to adjust the credit. Don't use CRN 450.

3.11.6.14.5.5 (01-02-2024)
Premium Tax Credit (PTC), Form 8962

  1. Send the case to AM if:

    • Form 8962, Premium Tax Credit (PTC), is attached. See IRM 3.11.6.6.1, Duplicate Returns and Identical Open CII Cases.

    • Form 1040-X line 6 is being increased/decreased and write-in reflects "APTC Repayment" or similar.

    • PTC/APTC is present on CC TXMOD or CC IMFOL, as shown in the table below, and there are changes to adjusted gross income (AGI), filing status, or the taxpayer is changing the size of their tax household. (i.e., adding or deleting an exemption claimed on their return).

    • APTC data is indicated through Coverage Data Repository (CDR) research when adding an exemption.

    • Form 1095-A is submitted with an amount(s) in Part III Column C.

    Note:

    PTC allowed on the original return posts as TC 766 with CRN 262. Posted PTC associated data can be identified by the following data elements:

    Data Element CC TXMOD CC IMFOL
    Advance Premium Tax Credit ADV PTC AMT TOTAL APTC
    Total Premium Tax Credit PTC AMT TOTAL PTC
    Excess APTC Repayment PTC LIAB AMT APTC REPMT
    Excess Advance Payment Above Limitation PTC LIMITATION AMT LIMIT AMT

  2. Notate "PTCX" in the working trail when routing the amended return due to PTC or APTC impact.

3.11.6.14.5.6 (01-09-2023)
Economic Impact Payments (EIP)

  1. Send all tax year 2019 Amended EIP returns to AM.

    Note:

    Taxpayers are instructed to notate "Amended EIP Return", but other indications might be present in the explanation of changes or attached statement. IDRS may show a TC 150 for .00 with:
    • $1 of taxable interest income
    • $1 total income
    • $1 AGI

  2. See IRM 21.6.3.4.2.13, Economic Impact Payments, for eligibility criteria.

  3. To identify an EIP, see IRM 21.6.3.4.2.13.1, Economic Impact Payments - Account Information.

  4. Taxpayers that didn't receive the full amount of their EIP may claim the difference as the Recovery Rebate Credit (RRC) on their tax year 2020 or 2021 return.

3.11.6.14.5.7 (01-02-2024)
Recovery Rebate Credit (RRC) - Tax Years 2020 and 2021 Only

  1. If IRS records show that an EIP was issued, but the taxpayer indicates they didn't receive the EIP, send the case to AM.

  2. Refer to IRM 21.6.3.4.2.14, Recovery Rebate Credit, for eligibility criteria and credit amounts prior to adjusting the credit.

  3. When researching the account to determine if an EIP was issued, refer to IRM 21.6.3.4.2.13.1, Economic Impact Payments - Account Information.

  4. If eligibility for the RRC isn't met, disallow the claim, see IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and use the fill-in: We disallowed your claim for the Recovery Rebate Credit because you didn't meet the eligibility requirements.

  5. Changes to the RRC must be math verified. Use the Recovery Rebate Credit AMS worksheet when math verifying the credit.

  6. When adjusting the RRC, use CRN 256 and RC 096.

3.11.6.14.5.8 (05-09-2023)
Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals - Tax Years 2020 and 2021 Only

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. Send the case to AM if there's an indication that:

    • SE Tax is based on a partnership

    • Schedule H is present, attached, or mentioned

    • The taxpayer received wages from ministerial duties, is a minister

    • Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science. Practitioners, is attached or mentioned

  3. See IRM 21.6.3.4.2.15, Credits for Sick Leave and Family Leave, for eligibility and processing instructions. If paragraph 6 of IRM 21.6.3.4.2.15, Credits for Sick Leave and Family Leave, applies, route the case to AM.

  4. If Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals, isn't attached or incomplete, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

  5. When instructed to disallow the claim, see IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

  6. When adjusting the Form 7202 credit(s):

    • Use CRN 299 for wages paid 4/1/20 - 3/31/21

    • Use CRN 271 for wages paid 4/1/21 - 9/30/21

    • RC 061

3.11.6.14.5.8.1 (05-09-2023)
Credit for Qualified Sick and Family Leave Wages - Tax Year 2022

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. For 2022 the Credit for Qualified Sick and Family Leave Wages is a Schedule H credit and can be found on Schedule 3. If the credit is changing, send the case to AM.

3.11.6.14.5.9 (01-03-2023)
Refundable Child and Dependent Care Credit - Tax Year 2021

  1. Screen the case for CAT-A criteria. Refer to IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.

  2. The Child and Dependent Care Credit is refundable for tax year 2021 only. The maximum credit amount for one qualifying person is $4,000 ($8,000 for two or more qualifying people).

  3. Refer to IRM 3.11.6.14.2.2.1, Form 2441, Credit for Child and Dependent Care Expenses, for eligibility.

  4. The taxpayer must check Box B of Form 2441, Child and Dependent Care Expenses, for the credit to be refundable.

  5. If Box B isn't checked, and the taxpayer is claiming the credit as refundable, input a corrected adjustment per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

    Exception:

    If the taxpayer has also claimed Schedule 8812, Credits for Qualifying Children and Other Dependents, with line 13 Box A is checked, correspond using the appropriate missing information letter. When corresponding, use the fill-in: We're unable to process your amended return. Please clarify the residency question(s) on Form 2441, Child and Dependent Care Expenses, and Schedule 8812, Credits for Qualifying Children and Other Dependents.

  6. Math verify the taxpayer's figures by completing the appropriate AMS worksheet(s).

  7. To adjust the credit:

    • Input a TC 290 .00, if no other adjustment is required.

    • Use credit reference number 273 to adjust the credit.

    • Use RC 061.

3.11.6.14.6 (01-05-2023)

Overpayment Amount on This Amended Return (Line 21)

  1. Taxpayers use line 21 of Form 1040-X to record the overpayment amount (refund) created by the amended return.

3.11.6.14.6.1 (01-02-2024)
Direct Deposit

  1. Starting February 5, 2023, direct deposit is available on certain electronically filed amended returns for tax years 2021 and subsequent.

  2. If an MEFP case with Form 8888, Allocation of Refund (Including Savings Bond Purchases), is attached and Part II or III are completed, send the case to AM.

  3. IRN 872 must be input on all MEFP refund returns with or without direct deposit request.

    Caution:

    If working a case where two adjustments are required because there are more IRNs and Credit Reference Numbers (CRN) than there are fields available, IRN 872 must be input on the first adjustment. Refer to IRM 3.11.6.14, Specific IMF Adjustments, when multiple adjustments are input.

  4. When processing a case with a direct deposit request, follow the table.

    If working a ... And ... Then ...
    MEFP case The return results in a refund Include IRN 872 with the refund amount from the adjustment.

    Reminder:

    When inputting IRN 872, the input screen must be edited until xMend. Refer to paragraph 3 above.
    MEFP case The return doesn’t result in a refund Process as normal.
    MEFS case Form 8888 is attached Send Letter 474C.

    Caution:

    If the amended return is a balance due or zero-balance don't correspond.
    MEFS case Taxpayer requests direct deposit in the remarks area of Form 1040-X. Send Letter 474C.

    Caution:

    If the amended return is a balance due or zero-balance don't correspond.
    MEFS case Taxpayer requests direct deposit on attached correspondence Send Letter 474C.

    Caution:

    If the amended return is a balance due or zero-balance don't correspond.

  5. If a correction to IRN 872 is needed and the CC TERUP timeframe has lapsed, take the following action:

    1. Input a TC 290 for .00

    2. Use RC 199

    3. Use HC 3

    4. IRN 872 for the correction amount.

      Example:

      If the previous IRN 872 amount of $500.00 is incorrect and should have been $200.00, then input IRN 872 for 300.00- to correct the direct deposit information.

3.11.6.14.6.2 (01-02-2024)
Credit Elect (Line 23)

  1. A "credit elect" occurs when the taxpayer requests to have all or a portion of their refund from Form 1040-X credited as an estimated tax (ES) payment to a succeeding tax year. Taxpayers request a credit elect by either entering an amount on line 23 (Amount you want applied to your (enter year) estimated tax) of Form 1040-X, or in a written statement.

    Caution:

    Any attempt to transfer more than the available credit manually results in an unpostable condition.

  2. If the taxpayer requests to skip a consecutive tax year (e.g., 2024 to 2026) send the case to AM.

  3. During "Dead Cycles" the IAT Credit Transfer tool is unavailable, suspend the case until after the dead cycles. For Dead Cycles, see IRM 3.30.123.4.7, Dead Cycles - A Week Counter.

  4. If the taxpayer is making a credit elect request and has a tax liability on another tax year or requests to transfer the credit to a prior year, the computer automatically offsets the correct amount and send a notice to the taxpayer explaining the offset. If the credit elect amount on Form 1040-X is larger than the outstanding tax liability, transfer only the remaining credit amount. If not, continue processing the return.

    Note:

    An outstanding tax liability can be identified by an amount next to “TOTAL MOD BALANCE” field on IMFOLI.

  5. If the taxpayer requests a credit transferred to a full paid module, continue processing the return and input the credit transfer.

  6. If the taxpayer is requesting a credit transfer larger than the refund from the adjustment, transfer only the amount that is available and correspond with the taxpayer explaining the difference in amounts. Send Letter 474C and use the fill-in: We didn't apply the full amount of your credit to your tax for 20XX, because your refund of $X,XXX.XX is less than the amount requested for transfer.
    Or
    We didn't apply a credit to your tax for 20XX, because your amended return didn't result in a refund.

    Note:

    If the taxpayer has a balance due on Form 1040-X, don't transfer any amount.

  7. If the taxpayer is getting a refund larger than expected, transfer only the requested credit elect amount from the amended return.

  8. For the most recent Tax Year with a posted TC 150, check CC TXMOD/IMFOL for the “UNAPPLD-CR-ELECT” amount.

    If line 23 of Form 1040-X is ... Then ...
    Equal to the UNAPPLD-CRELECT amount

    1. Don’t input Credit Elect.

    2. Continue processing the rest of the return.

    3. Use RC 099.
    Less than the UNAPPLD-CRELECT amount

    1. Don’t input Credit Elect.

    2. Continue processing the rest of the return.

    3. Use RC 099.
    Greater than the UNAPPLD-CR-ELECT amount or

    1. Input the adjustment and include a Hold Code "1" to prevent an erroneous refund. Use RC 099.

    2. Move the credit using the IAT Credit Transfer Tool.
    The UNAPPLD-CR-ELECT field isn't displayed

    1. Input the adjustment and include a Hold Code "1" to prevent an erroneous refund. Use RC 099.

    2. Move the credit using the IAT Credit Transfer Tool.

  9. To process the credit transfer, first input the Form 1040-X adjustment. Then process the transfer using the IAT "Credit Transfer Tool" from CC TXMODA of the adjustment to transfer the credit to the year requested.

    1. In the Post Credit To (module) section:
      • Enter the tax year receiving the transfer.
      • Click continue.

    2. In the Transferable Credit section:
      • Click the CR Elect button.

    3. In the Post Credit as section:
      • The TC field must be 710.
      • The Db Date field use the credit availability date. see IRM 3.11.6.14.6.2.1, Credit Elect Availability Dates.
      • The Cr Date field use the credit availability date. See IRM 3.11.6.14.6.2.1, Credit Elect Availability Dates.
      • In the Amt$ field enter the amount being transferred using this credit availability date.

      Caution:

      The tool automatically populates the total amount of credit available which must be changed if the taxpayer is requesting only a portion of their refund as a credit elect.

    4. In the Post Credits With section:
      • The CII Id field populates automatically when working a CII case.
      • Use "SD 1040X" in the Remarks field.

    5. In the Control section:
      • Enter the Received Date in the RCVD Dt field.
      • Enter MISC in the Cat field.
      • Click the Transfer button.

    6. Review the CC DRT48 screen for accuracy and transmit if correct.

      Reminder:

      If you need to TERUP a credit elect, you must TERUP the transfer on both tax years.

    .

  10. A "credit elect" can be recognized by TC 836 on the current year’s module and TC 716 on the following year’s module.

  11. If the taxpayer requests to reverse a previous "credit elect" to either be applied to the balance owed on Form 1040-X or to be refunded and:

    If the taxpayer ... And ... Then ...
    Files a superseding return (see IRM 3.11.6.4.5.2, Superseding Returns) or meets the criteria in number (12) below Requests the previous credit elect to pay the balance due on the amended return

    1. Input the adjustment and include a Hold Code 1 to prevent an erroneous refund.

    2. Move the allowable amount using the IAT Credit Transfer Tool.
    Files a superseding return (see IRM 3.11.6.4.5.2, Superseding Returns) or meets the criteria in number (12) below Requests a refund of the previous credit elect

    1. Input the adjustment without a Hold Code.

    2. Move the allowable amount using the IAT Credit Transfer Tool.

      Note:

      If the taxpayer is only requesting the credit elect be refunded, then move the allowable amount using the IAT Credit Transfer Tool and input a TC 290 .00.
    Doesn't file a superseding return  

    1. Continue processing the return.

    2. Send Letter 247C

    3. Don't input the Credit Transfer.

  12. To process a credit elect reversal, the request must be received before the return for the credit year has posted and before March 1, of the year following the year to which the credit was applied.

    Example:

    A request to reverse a credit elect from a 20223 account back to the 2022 account must be received before the 2023 return has posted and by March 1, 2024.

    Requests received after March 1 with remarks that state the taxpayer or IRS made an error should be sent to AM.

3.11.6.14.6.2.1 (01-02-2024)
Credit Elect Availability Dates

  1. Credit Elect requests require specific date(s) be used in the IAT Credit Transfer Tool for the Debit (Db) and Credit (Cr) date. Using the wrong date may affect the taxpayer’s interest.

  2. The availability date of an amended return’s overpayment is determined by the payment(s) and/or credit(s) of which it is comprised. If your adjustment creates a credit balance comprised of one or more of the following:

    • Prepaid credits - Withholding, EIC, ACTC, AOTC, or other refundable credits always post with the return’s due date without regard to any extension or when the return was filed.

      Example:

      EIC on a 202312 return will always have April 15, 2023.

      Exception:

      The due date for TY 2020 tax returns has been postponed to May 17, 2021. However, to prevent harm to the taxpayer, prepaid credits post with the original due date of April 15, 2021. Also, payment received on or before May 24, 2021, are considered available on April 15, 2021.

      Exception:

      According to Notice 2020-23, the due date for TY 2019 tax returns has been postponed to July 15, 2020. However, to prevent harm to the taxpayer, prepaid credits post with the original due date of April 15, 2020. Also, payment received on or before July 22, 2020, are considered available on April 15, 2020.

      Example:

      A TC 610 on 201912 with a posted date of July 22, 2020, would have an availability date of April 15, 2020. Whereas a TC 670 on the same module with a posted date of July 23, 2020, is considered available on July 23, 2020.

    • Payments TC 610, TC 640 and/or TC 670 post with the date they are received. If a payment shows posted within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡of the return’s due date it’s considered as available on the return due date.

      Example:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. A tax module’s credit balance can be comprised of multiple credits or payments and more than one availability date may be needed. Use the following chart to determine the order of payments and/or credits to transfer and the availability date(s).

    If the entire credit balance of the credit elected is comprised of ... Then ...
    Prepaid credits or payments made by the due date, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    		 Use the due date of the return, April 15, 20XX.

    Exception:

    Notice 2020-23, postponed the due date for TY 2019 tax returns has been postponed to July 15, 2020.
    Payment made ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ after the due date Use the payment posting date.
    Combination of Prepaid Credit(s) or Payments made ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ after the due date Multiple Transfers are required, start with:

    1. The most recent payment, use the payment posting date.

    2. The next most recent payment, if any, using that payments posting date.

    3. Lastly move the Prepaid credits and/or payments made by the due date, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Exception:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Example:

    You have a 20XX XRET with a $950.00 Credit Elect and the module has a $200.00 TC 670 payment dated June 15, 20XX; a $150.00 TC 670 dated May 10, 20XX, and $600.00 of timely credits. Input the first Credit Elect for $200.00 using 061520XX; a second Credit Elect for $150.00 using 051020XX, and a third Credit Elect transfer for $600.00 using 041520XX.

    Example:

    You have a 2015 XRET with a $1,000.00 Credit Elect and the module has a $200.00 TC 670 payment dated July 20, 20XX; a $1,500.00 TC 670 dated May 10, 20XX. Input the first Credit Elect for $200.00 using 072020XX, and a second Credit Elect for $800.00 using 051020XX.

    Reminder:

    All tax liabilities must be satisfied prior to initiating the credit elect.

  4. Always use the same date for the Debit date (TC 830) and Credit date (TC 710).

3.11.6.15 (06-04-2019)

Individual Master File (IMF) Processing Codes

  1. The following subsections give an explanation of each of the different code types used when processing amended returns and their purpose.

3.11.6.15.1 (05-09-2023)

Integrated Data Retrieval System (IDRS) Freeze Codes

  1. Some IDRS Freeze codes require routing or special handling. For definitions of various Freeze Codes or Transaction Codes, refer to Document 6209, IRS Processing Codes and Information, or IRM 21.5.6, Freeze Codes.

  2. The table below lists the common freeze codes used in Submission Processing. The complete list of these codes is contained in Document 6209, IRS Processing Codes and Information.

    Freeze Code Description Action
    -A Duplicate Return Send the case to AM if there's an open control base of DUPF; otherwise, continue to process the return.
    -C Combat Zone See IRM 3.11.6.16.4, Combat Zone.
    - D RSED Expired Suspend the case to Statute.
    E- Amended Return Follow TC No 150 instructions. Refer to IRM 3.11.6.5.1 (7),Transaction Code (TC) 150 Research (No TC 150), for E- freeze instructions.
    -E Compliance, Return Integrity Compliance Services (RICS), or Frivolous Return Program See IRM 3.11.6.7.11, Frivolous Claims Screening.
    F- Frivolous Return Received Send the case to FRP. See IRM 3.11.6.7.11, Frivolous Claims Screening.
    -G Original Return which contains a math error code See IRM 3.11.6.16.6, Math Error Response Cases.
    G- Restricted Failure To Pay Penalty Send the case to AM.
    -I or I- Restricted Credit/Debit Interest Send the case to AM.
    -J Unsubstantiated ME Tax Protest Send the case to AM.
    J- Excess Estimated Tax Credit Freeze Send the case to AM.
    -K Refund/offset is being held as the result of hold code 1, 2 or 4 Send the case to AM.
    -L AIMS Indicator See IRM 3.11.6.7.10, Examination Case Screening.
    M- TC 370/400 MFT 31/No-Merge Send the case to AM.
    -O or -S Disaster Claim See IRM 3.11.6.16.2, Processing a Disaster Claim.
    P- Refund Cancellation

    • Net balance due workable.

    • Net refund, send the case to AM.
    -Q Unallowable Refund Send the case to AM.
    -R Credit Balance Process normally.

    Reminder:

    Check for RIVO and ID Theft indicators. If a TC 971 AC 122 is on the account or a 4800C is attached or mentioned see IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.
    S- Undelivered Refund Check Send the case to AM.
    T- TDA Status See IRM 3.11.6.7.18.3.1, Compliance Services Collection Operations (CSCO) Screening.
    -U Erroneous Refund Send the case to AM.
    -V Bankruptcy Freeze Send the case to AM.
    -W Litigation Pending Freeze Send the case to AM.

    Note:

    A -W freeze set by a TC 520 takes priority over other freeze codes.
    -Y Offer in Compromise Collection. See IRM 3.11.6.7.18.3.3, Offer In Compromise (OIC) Screening.
    Y- Audit Adjustment Send the case to AM.
    -Z or Z- Refund Scheme SDC. See IRM 3.11.6.7.12, Criminal Investigation (CI) Scheme Development Center (SDC) Screening.

    Exception:

    If the tax module shows Project Code 0173, 0263, 0390, 0584, 0603, or 0611, send the case to CAT-A regardless of the claim amount.

3.11.6.15.2 (01-02-2024)

Integrated Data Retrieval System (IDRS) Transaction Codes

  1. Some IDRS Transaction Codes require routing or special handling. For definitions of various Transaction Codes, refer to Document 6209, IRS Processing Codes and Information, or IRM 21.5.6, Freeze Codes.

  2. The table below lists the common transaction codes used in Submission Processing. The complete list of these codes is contained in Document 6209, IRS Processing Codes and Information.

    Transaction Codes Action
    TC 140 is present See IRM 3.11.6.12.1.2.1, Filing Status 2 Changes.
    TC 160 - 162 Send the case to AM.
    TC 170 See IRM 3.11.6.16.8, Estimated Tax Penalty.
    TC 300 - 361 (TC 300 is most commonly used) Send the case to AM

    Exception:

    If an -L freeze or TC 420 is present, see IRM 3.11.6.7.10, Examination Case Screening.
    TC 420 and no 421 See IRM 3.11.6.7.10, Examination Case Screening.
    TC 420 and 421 with no TC 300 Continue processing.
    TC 424 and 425 with no TC 300 Continue processing.
    TC 424 (with no TC 425) See IRM 3.11.6.7.10, Examination Case Screening.
    TC 480 and 780 (with a -Y freeze) See IRM 3.11.6.7.18.3, Collection Function Case Screening.
    TC 520 (without a TC 521 or 522) Send the case to AM.
    TC 520 with a 521 or 522 Continue processing.
    TC 576 (without a TC 577) Send the case to AM.
    TC 576 with a posted TC 577 Continue processing.
    TC 582 Continue processing.
    TC 594 See IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150).
    TC 810 See IRM 3.11.6.7.11, Frivolous Claims Screening.
    TC 841 without a subsequent 846 Send the case to AM.
    TC 885 Send the case to AM.
    TC 896 (relating to MFT 29) Send the case to AM.
    TC 904 See IRM 3.11.6.5.4, Form 1040-X without Form 1040 Attached (No TC 150).
    TC 914, 916 or 918 without subsequent 912, 915, 917 or 919 See IRM 3.11.6.7.12, Criminal Investigation (CI) Scheme Development Center (SDC) Screening.
    TC 922 See IRM 3.11.6.7.15, Automated Underreporter (AUR) Screening.
    TC 971 AC 001 Direct Deposit.
    TC 971 AC 111 See IRM 3.11.6.7.8 Identity Theft (IDT) Screening.
    TC 971 AC 137 with a filing status change See IRM 3.11.6.12.1, Entity Changes.
    TC 976 or 977 Continue processing.

3.11.6.15.3 (01-02-2024)

Transaction Codes (TC), Item Reference Numbers (IRN), and Credit Reference Numbers (CRN)

  1. A Transaction Codes (TC), Item Reference Numbers (IRN), and Credit Reference Numbers (CRN) are a three-digit code input in the CC ADJ54 screen that refer to specific area on an amended return.

  2. IRN 888, Adjusted Gross Income, is the only amount that can be reduced below zero. Reducing any other amount creates an unpostable condition.

  3. The following are codes used when processing amended returns. See the specific IRM subsection(s) for adjustment instructions.

    1. Income and deductions codes.

      If the adjusting the ... Then use ...
      Adjusted Gross Income IRN 888
      Taxable Income IRN 886

    2. Nonrefundable Credit Tax Liability

      If the adjusting the ... Then use ...
      Schedule 8812, Credits for Qualifying Children and Other Dependents. IRN 820 (Nonrefundable CTC tax year 2023 and later)
      Form 8907, Non-Conventional Source Fuel CRN 883
      Form 6478, Biofuel Producer Credit. CRN 884
      Form 8864, Biodiesel & Renewable Diesel Fuels. CRN 884
      Self-Employment (SE) Tax IRN 889
      Primary SE Social Security IRN 878
      Primary SE Medicare IRN 895
      Secondary SE Social Security IRN 879
      Secondary SE Medicare IRN 896
      SE Tax Deferment CRN 280
      Excess Advance Child Tax Credit (CTC) computer

      Note:

      The Advance CTC IRNs are valid for tax period 202112 - 202211.

      		 IRN 817
      Advance CTC Repayment Computer

      Reminder:

      The Advance CTC IRNs are valid for tax period 202112 - 202211.

      		 IRN 818

      Note:

      Reason Code 221 is valid for adjustments input with IRN 818 to MFT 30. However, RC 221 isn't required with IRN 818 due to space limitation.
      Advance CTC Limitation amount (write-off)

      Reminder:

      The Advance CTC IRNs are valid for tax period 202112 - 202211.

      		 IRN 819
      Total Tax Liability TC 290 or 291

    3. Payments and refundable credit codes

      If the adjusting the ... Then use ...
      Federal Income Tax Withheld. CRN 806 or 807
      Excess Social Security Tax CRN 252
      Railroad Retirement Tax Act CRN 252
      Schedule, Earned Income Tax Credit CRN 764 or 765
      Schedule 8812, Credits for Qualifying Children and Other Dependents. CRN 336
      Form 2441, Child and Dependent Care Expenses CRN 273
      Form 2439, Notice to Shareholder of Undistributed Long-term Capital Gains. CRN 766 or 767
      Form 4136, Credit for Federal Tax on Fuels. Use the CRN on Form 4136 if attached. Use CRN 362 if not attached.
      Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits). CRN 260
      Recovery Rebate Credit (RRC) CRN 256
      Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals Use CRN 299 wages paid 4/1/20 - 3/31/21. Use CRN 271 for wages paid 4/1/21 - 9/30/21

    4. Direct deposit and estimated tax payments

      If the adjusting the ... Then use ...
      Direct Deposit IRN 872
      Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts. TC 170 or 171

3.11.6.15.4 (01-02-2024)

Source Codes (SC)

  1. The source code (SC) selection designates which opening statement is used on a taxpayer's notice.

  2. Enter a "1" for the SC, except when setting a math error. When setting a math error, use "6." When correcting a math error use "2."

    Source Code Literal
    0 or Blank None - no notice generated.
    1 As you requested, we changed your account for (YYYYMM) to correct your (RC).
    2 We changed your (YYYYMM) account to correct your (RC).

    Note:

    Use source code 2 when correcting math errors.
    6 You made a mistake on your (YYYYMM) account. We corrected the error when we adjusted your (RC).

3.11.6.15.5 (01-02-2024)

Reason Codes (RC)

  1. Taxpayers receive a notice of adjustment when an action is taken on their account. The Reason Code (RC) designates the end of the statement that is printed on the notice. The RC should describe the area(s) of the return affected by the adjustment action. For audit trail purposes, enter reason codes on inputs. You may use up to three reason codes.

    Exception:

    Reason codes aren’t required for a ripple effect change or when directed not to use one by the IRM.

  2. The fourth reason code position on CC ADJ54 is reserved for penalty reason codes. See IRM 3.11.6.16.8, Estimated Tax Penalty.

  3. The reason code table below, lists the common reason codes used in Submission Processing and the line reference number.

    Reason Code Adjustment Item
    001 Change Filing Status to Single.
    002 Change Filing Status to Married Filing Jointly.
    003 Change Filing Status to Married Filing Separate.
    004 Change Filing Status to Head of Household.
    005 Change Filing Status to Qualifying Surviving Spouse with dependent Child(ren).
    007 Income For Wages, Salaries, Tips, Etc.

    • Bonus (W-2/Wage related)

    • Dependent Care Benefits

    • Disability

    • Employer Provided Education Asst. (IRC 127)

    • Form Wages

    • Grant (Form W-2)

    • Scholarship (Form W-2)

    • Third-Party Sick Pay

    • Salary Deferrals
    008 Interest And/or Dividend Income

    • Form 1099-DIV, Dividends and Distributions

    • Form 1099-INT, Interest Income

    • Form 1099-OID, Original Issue Discount

    • Form 8815, Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989

    • Schedule B, Interest and Ordinary Dividends

    • Schedule K-1 (Form 1041), Beneficiary’s Share of Income, Deductions, Credits, etc.

    • Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc.

    • Schedule K-1 (Form 1120-S),Shareholder’s Share of Income, Deductions, Credits, etc.
    012 Business Income (Or Loss)

    • Form 1099-K, Payment Card and Third Party Network Transactions

    • Form 6198, At-Risk Limitations

    • Schedule C, Profit or Loss From Business (Sole Proprietorship)
    013 Investment Gain (Or Loss)

    • Cost Basis

    • Form 1099-B, Proceeds From Broker and Barter Exchange Transactions

    • Form 1099-S, Proceeds From Real Estate Transactions

    • Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

    • Form 4684, Casualties and Thefts

    • Form 6252, Installment Sale Income

    • Form 4797, Sales of Business Property

    • Form 44952, Investment Interest Expense Deduction

    • Form 8824, Like Kind Exchanges

    • Sale of Home (non-military)

    • Schedule D, Capital Gains and Losses

    • Schedule K-1 (Form 1041), Beneficiary’s Share of Income, Deductions, Credits, etc.

    • Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc.

    • Schedule K-1 (Form 1120-S),Shareholder’s Share of Income, Deductions, Credits, etc.
    016 Pensions and Annuities

    • 401(K)

    • 403(b)

    • Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

    • Form RRB-1099-R

    • Form 5329, Additional Taxes on Qualified Plans (including IRAs) and other Tax-Favored Accounts

    • Form 8606, Nondeductible IRAs

    • IRA Distribution
    018 Schedule E Income (Or Loss)

    • Farm Rental

    • Form 1099-MISC, Miscellaneous Information

    • Form 4835, Farm Rental Income and Expenses

    • Form 4952, Investment Interest Expense Deduction

    • Form 6198, At-Risk Limitations

    • Form 1099-K, Payment Card and Third Party Network Transactions
    019 Schedule F, Profit or Loss From Farming
    020 Unemployment Compensation

    • Form 1099-G, Certain Government Payments

    • Unemployment Compensation Exclusion (UCE)
    021 Other Income

    • 2014-7 Income exclusion for qualified Medicaid waiver payments or difficulty of care payments

    • Alaska Permanent Fund

    • Alimony Received

    • Awards

    • Employee Stock Ownership Plan (ESOP)

    • Form 1099-A, Acquisition or Abandonment of Secured Property

    • Form 1099-C, Cancellation of Debt

    • Form 1099-G, Certain Government Payments

    • Form 1099-MISC, Miscellaneous Information

    • Form 1099-NEC, Nonemployee Compensation

    • Form 8814, Parent’s Election to Report Child’s Interest and Dividends

    • Form W-2G, Certain Gambling Winnings

    • Gifts

    • Jury Duty Pay

    • Medical and Life Insurance Reimbursements

    • Prizes

    • Self-Employment Income (not reported on Schedule C, Schedule E or Schedule F)

    • State and Local Tax Refund

    • Taxable Coverdell Education Savings Account (ESA)

    • Taxable Scholarship / Grants (not reported on Form W-2)

    • Third-Party Sick Pay
    025 Amount Claimed As Payment Made To A Qualified Retirement Plan

    • KEOGH

    • KPERS

    • SARSEP

    • SEP

    • SIMPLE
    027 Additional tax on Early Withdrawal of Savings
    029 Taxable Social Security Benefits

    • Form RRB-1099-R

    • Form SSA-1099

    • Form SSA-1099-SM

    • SSA income for prior years
    030 Adjustments to Income

    • Alimony Paid (without recipient's SSN)

    • Educator Expenses

    • Form 1098-E, Student Loan Interest Statement

    • Form 2106, Employee Business Expenses

    • Form 3903, Moving Expenses

    • Form 8917, Tuition and Fees Deduction

    • Military Family Relief Act

    • SE Tax (Deductible portion)

    • SE Health Insurance Deduction

    • Write-ins on Adjustments to Income
      - Attorney fees
      - Awards
      - Contributions by Chaplains
      - Contributions to Nonprofit Pension Plans
      - Expenses/Rental Personal Property
      - Jury Pay
      - Reforestation
    033 Additional Taxes From Form 4970, 4972 Or 8814

    • Form 4970, Tax on Accumulation Distribution of Trusts

    • Form 4972, Tax on Lump-Sum Distributions

    • Form 8814, Parent’s Election to Report Child’s Interest and Dividends

    • Section 72(m)(5) Penalty
    035 Education Credits

    • Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
    036 Tax Credits

    • Non-refundable Child Tax Credit (CTC

    • Form 2441, Child and Dependent Care Expenses

    • Form 3468, Investment Credit

    • Form 3800 General Business Credit

    • Form 5695, Residential Energy Credit

    • Form 5884, Work Opportunity Credit

    • Form 6478, Biofuel Producer Credit

    • Form 6765, Credit for Increasing Research Activities

    • Form 8396, Mortgage Interest Credit

    • Form 8586, Low Income Housing Credit

    • Form 8820, Orphan Drug Credit

    • Form 8826, Disabled Access Credit

    • Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit

    • Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit

    • Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

    • Form 8864, Biodiesel and Renewable Diesels Fuels Credit

    • Form 8874, New Markets Credit

    • Form 8880, Credit for Qualified Retirement Savings Contributions

    • Form 8881, Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment

    • Form 8882, Credit for Employer Provided Childcare Facilities and Services

    • Form 8896, Low Sulfur Diesel Fuel Production Credit

    • Form 8900, Qualified Railroad Track Maintenance Credit

    • Form 8907, Non-conventional Source Fuel Credit

    • Form 8910, Alternative Motor Vehicle Credit

    • Form 8911, Alternative Fuel Vehicle Refueling Property Credit

    • Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit

    • Schedule 8812, Credits for Qualifying Children and Other Dependents
    043 Schedule D, Capital Gains and Losses, tax computation
    044 Self-Employment Tax (Schedule SE, Self-Employment Tax)
    045 Alternative Minimum Tax(Form 6251, Alternative Minimum Tax - Individuals)
    046 Schedule J, Income Averaging For Farmers and Fishermen
    048 Form 5329, Additional Tax on Early Distributions or Certain Distributions from Education Accounts

    • Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
    049 Total tax

    • Other substantiated taxes on Form 1040-X

    • Uncollected SS Tax / Medicare Tax (UT)
    051 Total Federal Income Tax Withheld
    053 Earned Income Tax Credit (Allowance/Increase/Decrease)
    054 CP 09 or CP 27 Earned Income Credit Disallowed
    055 Excess Social Security Tax Or RRTA Tax Withheld
    057 Regulated Investment Company Credit

    • Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains
    061 Payments

    • Additional Child Tax Credit (ACTC)

    • Refundable Child Tax Credit (RCTC) - Tax Year 2021 only

    • Form 4136, Credit for Federal Tax Paid on Fuels

    • Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals

    • Schedule 8812, Credits for Qualifying Children and Other Dependents

    • Schedule 8812, Additional Child Tax Credit (TY 2020 and prior)
    065 Penalty Charge

    • Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts
    076 Schedule A, Itemized Deductions
    092 Standard Deduction
    096 Tax Relief Credit

    • Recovery Rebate Credit (RRC)
    099 Miscellaneous Account Information

    • Any reason not listed

    • Unexplained Form 1099 income

    • When instructed by a specific IRM
    106 Refundable Education Credit

    • Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)
    173 Credit for Other Dependents
    221 Advance CTC Repayment computer. Valid for tax period 202112 – 202211 adjustments input with IRN 818 to MFT 30.

    Figure 3.11.6-2

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    Please click here for the text description of the image.

    Figure 3.11.6-3

    This is an Image: 33455003.gif

    Please click here for the text description of the image.

3.11.6.15.6 (01-02-2024)

Blocking Series (BS)

  1. A unique Blocking Series (BS) is used when adjusting an account to indicate the type of the adjustment.

    Note:

    The BS listed for correspondence also applies to the Spanish version of the letter. See IRM 3.11.6.10.2, Spanish Correspondence, and the Correspondex Letters for a current list of correspondence letters.

    Blocking Series Usage
    00 Partial claim disallowance (Letter 106C) and the original return was electronically filed.
    05 For most processable Form 1040-X and CP notices unless otherwise directed.
    18 Partial claim disallowance (Letter 106C) and the original return was paper filed.
    77 Setting a math error (Letter 474C) and the original return was filed electronically.
    78 Setting a math error (Letter 474C) and the original return was paper filed.
    98 Complete claim disallowance (Letter 105C) and the original return was paper filed.
    99 Complete claim disallowance (Letter 105C) and the original return was filed electronically.

  2. The ninth and tenth digits of a Document Locator Number (DLN) represent the Blocking Series. See IRM 3.11.249.3.2.1, Document Locator Number (DLN) for detailed information regarding DLNs.

  3. For modules with a prior adjustment:

    If the BS on the prior TC 290 or TC 291 is ... Then ...
    77 or 78 See IRM 3.11.6.16.6, Math Error Response Cases.
    00, 18, 98, or 99 See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

3.11.6.15.7 (07-28-2022)

Hold Codes (HC)

  1. A hold code (HC) is input to prevent or delay the issuance of a refund or Adjustment Notice to the taxpayer and is a required entry when inputting an adjustment. Unless otherwise instructed, use HC 0 when inputting an adjustment.

    Hold Code Refund Action Notice Action Account Action
    0 Allows the refund Allows adjustment notice None.
    1 Holds the refund Allows adjustment notice Sets the -K freeze.
    2 Holds the refund Holds adjustment notice Sets the -K freeze.
    3 Allows the refund Holds adjustment notice None.
    4 Holds the refund Notice won’t be issued at any time Sets the -K freeze.

3.11.6.15.8 (11-21-2019)

Posting Delay Codes (PDC)

  1. A Posting Delay Code (PDC) of 1 to 6 is used to post a transaction later than another transaction when multiple transactions are required on one account. Input transactions don't post to MF until the indicated number of cycles have expired (with respect to the first transaction to be posted).

  2. There’s never a situation where the posting delay code is greater than "1" on MFT 35.

  3. PDCs are applicable for IMF transactions using ADJ54.

  4. The PDC isn't posted with the transaction or shown with the pending transaction. The pending (PN) MF posting cycle for the IDRS status transaction is extended to account for the PDC(s).

    Example:

    A PDC "1" should be used on the adjustment when an address change was input. This allows the adjustment notice to be sent to the new address of record.

3.11.6.15.9 (01-02-2024)

Priority Codes (PC)

  1. A Priority Codes (PC) must be used to post an adjustment to the master file when certain conditions exist. If a PC isn’t used when required, the adjustment will unpost.

    Priority Code When Required
    1 Making an adjustment to an account with a "-L" Freeze.
    2 Use only priority code 2 if both 1 and 3 are required to adjust the account. (Example: Account with -L freeze and the CP notice would require priority codes 1 and 3; therefore only 2 would be used.)
    3 Adjusting CP Notices and when a Letter 5600C is mentioned or attached.
    6 Used to release a math error freeze (-G) only.
    8

    1. CRN 764 is input with a TC 29X and there's a prior posted TC 29X (except a previously posted TC 290 with priority code 6 or a TC 290 with Julian Date 999).

    2. TC 29X is input for a significant amount greater than $10 and is within $10 of a previously posted TC 29X. (EXAMPLE: $55 adjustment and the previous adjustment is $49 would require a PC: 8 on either TC 290/291 adjustment.)

    3. CRN 80X is input and there's a prior TC 17X on the account and the new TC 176 is computer generated.

    4. CRN 806, 807, or 766 is input that is within $10 of a prior posted matching transaction (Example: CRN 806 is within $10 of a prior posted CRN 806, not within $10 of CRN 807).

    5. When adjusting Fuel Tax Credit, Form 4136.

    Note:

    Use Priority Code 1 if both 1 and 8 are required to adjust the account.

    Example:

    An account with -L freeze and the EIC conditions above would require priority codes 1 and 8; therefore, only 1 would be used.

3.11.6.15.10 (01-02-2024)

Category Codes

  1. Category Codes are four letter codes that indicate the type of case. Ensure the appropriate Category Code is used when processing a case.

    If ... Then ...
    Inputting an adjustment.

    1. Use "MEFP" on e-filed cases.

    2. Use "MEFS" on scanned and Document Upload Tool (DUT) cases.
    Inputting an adjustment on a claim related to:

    • A federally declared disaster that occurred in 2018 or 2019, but before December 21, 2019.

    • A federally declared disaster that occurred beginning January 1, 2020, but before February 26, 2021.

    • Hurricane Ida disaster after August 28, 2021.

    		 Use "KATX" .
    Re-inputting an adjustment sent back from a review

    Note:

    When closing the reopened CII case, use "Close As MISC" .

    		 Use the appropriate category code listed above.
    Working a category code IRRQ correspondence reply

    Note:

    Category code IRRQ is used on correspondence replies being scanned when the original CII Case is closed.

    Reminder:

    IRRQ cases must be linked to the original CII Case.

    		 Process the reply per normal procedures and use the appropriate category code listed above.

  2. Follow IRM 3.11.6.9.1, MEFP Reassignment and Reroute Guide, or IRM 3.11.6.9.2, MEFS Reassignment and Reroute Guide, as appropriate. determine the appropriate Category Code when routing an amended return.

  3. If corresponding on:

    1. An e-filed case, use "MEFP" .

    2. A scanned or DUT case, use "MEFS" .

    Exception:

    If inputting an adjustment and corresponding, use the adjustment category code.

3.11.6.15.11 (01-02-2024)

Correspondence Imaging Inventory Indicator (CIS IND), Source Document Attached Indicator (SD), and Remarks

  1. Correspondence Imaging Inventory Indicator (CIS IND) "1" is required in the "CIS-IND" field of the CC ADJ54 screen.

  2. Source Document Indicator (SD) "N " is required in the "SOURCE-DOC-ATTACHED" field of the CC ADJ54 screen.

  3. A remark is required on all IDRS transactions. Use the table below to determine the appropriate remarks. This applies to REQ54, ENREQ, REQ77, and credit transfers.

    If ... Then ...
    If the claim type is a Notice CP 08. Use "CP08" .
    If the claim type is a Notice CP 09. Use "CP09" .
    If the claim type is a Notice CP 27. Use "CP27" .
    A paper filed amended return. Use "1040-X" .
    An e-filed amended return or CII case. Use the CII Case ID.

    Example:

    CISF123456

    Note:

    CII populates the Remarks field with the CII Case ID when initiating the adjustment from CII. When using IAT, enter the CII Case ID in the Remarks field.

    Note:

    Certain IRM subsections require a specific remark be added.

  4. Include "NSD" , before the appropriate remarks.

  5. When inputting an adjustment, complete the “REMARKS” field of the CC ADJ54 screen as follows:

    1. CII Case ID

    2. NSD

    3. Claim type per paragraph 3 above.

    4. Additional remarks per specific subsection.

    Example:

    CISF123456 NSD 1040-X ME RESPONSE

3.11.6.15.12 (09-23-2022)

Business Operating Division Code (BOD CD)

  1. The Business Operating Division Code (BOD CD) identifies the IRS BOD having overall responsibility for the account.

    • LB - Large Business and International (LB&I).

    • SB - Small Business/Self-Employed (SB/SE).

    • TE - Tax Exempt/Government Entities (TE/GE).

    • WI - Wage and Investment (WI).

  2. The BOD CD may be required when updating case date or when routing certain cases. The BOD CD can be found on:

    • CC TXMODA

    • CC ENMOD

    • CC INOLES

    • CC AMDIS

    • CC SUMRY

      Note:

      This isn't an all-inclusive list.

3.11.6.16 (01-02-2024)

Cases Requiring Special Handling

  1. When processing a case requiring special handling, all IRM instructions apply.

3.11.6.16.1 (01-02-2024)

Processing Statute Cases

  1. After completing a statute review per IRM 3.11.6.7.9, Statute Review Screening, use the following instructions to process a statute year case:

    Note:

    If a case is stamped "No Statute Issue(s)" , continue processing the case. If a Form 1040 is stamped "Statute Cleared" see IRM 3.11.6.7.9, Statute Review Screening.

    1. When verifying the ASED, use today’s date.

    2. When verifying the RSED and the received date isn't timely, check the postmark. If the amended return is postmarked on or before the RSED, consider it timely for a refund. See Paragraph 7 below to determine timeliness.

    3. Research the IRS Disaster Assistance Program per paragraph 2 below.

    4. Without regard to the ASED and RSED, Statute cases not meeting SP criteria should be sent to the appropriate function.

    5. If the account is on the retention register, use CC IMFOLB to restore the module before sending correspondence or inputting an adjustment. Once the CC IMFOLB request has been input, suspend the case using "RETREG" as the reason for suspense in CII to allow the TC 370 to post. If the TC 370 hasn’t posted when the suspense period expires, send the case to AM.

    6. Open case controls with a category code "ST04" or "-X04" on a case meeting SP criteria should be placed in "B" status prior to inputting the adjustment. Upon completion of the adjustment, place the control base back in "A" status.

  2. When researching the IRS Disaster Assistance Program, check the current year and one year prior to determine if the taxpayer lived in a federally declared disaster area. If research shows the taxpayer lives or lived in a disaster area, review the disaster declaration for the following statement, and then follow the table below:

    • Affected taxpayers that need to perform time-sensitive actions described in Treas. Reg. 301.7508A-1(c)(1) and Rev. Proc. 2018-58, IRB 2018-50 that fall on or after (the specified date), and before (the specified date), are granted additional time to act through (the specified date).

    If ... And ... Then ...
    The taxpayer doesn't live, or didn't live in a federally declared disaster area   Continue processing per normal procedures.
    The taxpayer lives or lived in a federally declared disaster area The statement above isn't in the disaster declaration Continue processing per normal procedures.
    The taxpayer lives or lived in a federally declared disaster area The statement above is present and the specified dates don't extend the taxpayer’s filing timeframe Continue processing per normal procedures.
    The taxpayer lives or lived in a federally declared disaster area The statement above is present and the specified dates extend the taxpayer’s filing timeframe

    Note:

    See the example below the table.

    		 Continue processing per normal procedures.

    Example:

    If a taxpayer files a TY 2020 return with a Received Date of 06/18/2021, a Postmark date of 06/14/2021, a RSED of 04/15/2021, and research shows the taxpayer lives in a qualified disaster area as noted in disaster declaration excerpt below, then use Override Code S, 06/18/2021 as the Received Date, and 06/14/2021 as the Amended Claims Date and Refund Statute Control Date.

    Note:

    Affected taxpayers that need to perform time-sensitive actions described in Treas. Reg. 301.7508A-1(c)(1) and Rev. Proc. 2018-58, IRB 2018-50 that fall on or after February 11, 2021, and before June 15, 2021, are granted additional time to act through June 15, 2021.

    Note:

    Per Notice 2023 021, due to the postponed due dates of July 15, 2020, for 2019 income tax returns and May 17, 2021, for 2020 income tax returns, taxpayers have three years from the date they filed their original return to claim a credit or refund if their original return was filed by the postponed due dates. See IRM 25.6.1.10.2.7, Claims for Credit or Refund – General Time Period for Submitting a Claim, for more information.

  3. Follow the procedures below to determine if the case should be routed.

    If ... And ... Then ...
    The received date is within 60 days of the ASED or the ASED is expired The RSED is open and there's a total tax decrease or refundable credit increase Screen the case for CAT-A criteria. See IRM 3.11.6.7.14, Category A (CAT-A) Criteria Screening.
    The RSED is expired, and the module is in debit balance Box 4 of paragraph 7 below doesn't apply Send the case to AM.
    The RSED is expired on a full paid module, and your amended return isn't a math error correction There are payments, credits, or offsets posted within two years of your case’s received date

    Note:

    For information on offsets, see IRM 21.4.6, Refund Offset Research, IRM 21.4.6.4.1, Tax Offset, and IRM 21.4.6.4.2, Treasury Offset Program (TOP) Offset.

    		 Send the case to AM.
    The RSED is expired on a full paid module and the return wasn't timely filed "Exonerated Prisoner" , "Incarceration Exclusion PATH Act" , or similar is stated Send the case to AM with EXPR as the working Trail.
    The RSED is expired and there was a math error on the original return The change on the Form 1040-X isn't a math error correction and/or also claims additional changes Send the case to AM.

  4. Follow the procedures below to determine if the case requires correspondence.

    If ... And ... Then ...
    There’s a total tax decrease or refundable credit increase resulting in a refund that was received (or postmarked) before the RSED The claim is incomplete and additional information is required to process the case Suspend the case for 45 days and request the missing information using Letter 324C. Use the fill-in(s) provided in the specific instructions. If a specific fill-in(s) are not provided, use: Please complete Form or Schedule XX to support the changes you have made.
    Be sure to include the following fill-in: Please send us the requested information within 30 days from the date of this letter. If we don't hear from you, we won’t be able to allow your claim if the statute of limitations has expired. Generally, the refund statute expires 3 years from the original due date of the return or 2 years from the date the tax was paid, whichever is later.
    The RSED is expired on a full paid module and the return wasn't timely filed There are no payments, credits, or offsets within the last two years on the module and no other route-out criteria exist Disallow the claim and send Letter 105C per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C and Letter 106C).

  5. If a reply to correspondence is received on a statute year case take the following action.

    If ... Then ...
    A complete response was received before the RSED Allow the claim.
    The return, or Letter 324C if applicable, is not fully signed and the response is received before the RSED No consider the claim and send Letter 916C per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).
    An incomplete response was received before the RSED No consider the claim and send Letter 916C per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).
    A complete response is received after the RSED but within 45 days of the IRS request (date the letter was input) Allow the claim.
    The return, or Letter 324C if applicable, is not fully signed and the response is received after the RSED but within 45 days of the IRS request (date the letter was input) Disallow the claim and send Letter 105C per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).
    An incomplete response is received after the RSED but within 45 days of the IRS request (date the letter was input) Disallow the claim and send Letter 105C or Letter 106C as appropriate per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

  6. If a reply to correspondence on a statute case isn’t received, take the following action.

    If ... Then ...
    A reply hasn’t been received by the requested response date and the RSED is open No consider the claim. Send Letter 916C per IRM 3.11.6.10.8, Correspondence for “No Consideration” of a Claim (Letter 916C).
    A reply hasn’t been received by the requested response date and the RSED has expired Disallow the claim. Send Letter 105C per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

  7. Use the following procedures to determine how to process your case.

    If ... And ... Then ...
    Making an adjustment to the account with a TC 290 .00 and adjusting Credit Reference Numbers that don’t result in a credit or tax change

    Example:

    Changing SE tax from the primary to secondary taxpayer. No tax change and no credit change.

    		 Without regard to the ASED or RSED Process using Blocking Series 05. If the RSED is expired, use the received date as the "RFSCDT" and enter an "S" override.
    The RSED is expired and there was a math error on the timely filed original return The only change is a correction of the math error(s) Process the Form 1040-X. See IRM 3.11.6.16.6, Math Error Response Cases.

    Note:

    Input the received date of the original return in the "RFSCDT" field.

    Exception:

    If the original return was filed after the RSED, send the case to AM.
    The RSED is expired and there was a math error on a timely filed amended return The only change is a correction of the math error(s) Process the Form 1040-X. See IRM 3.11.6.16.6, Math Error Response Cases.

    Note:

    Input the received date of the first amended return in the "RFSCDT" field.
    The ASED is greater than 90 days and the RSED is expired The return is one of the following:

    • A tax increase with a credit increase.

    • A credit increase without a tax increase.

    • A tax decrease with a credit decrease.

    		 Send the case to AM.
    The ASED is greater than 90 days and the RSED is expired The return is one of the following:

    • A tax increase with a credit decrease.

    • A tax increase without a credit decrease.

    • A credit decrease without a tax increase.

    		 Process the Form 1040-X using instructions in the paragraphs below.
    The amended return has a total tax decrease and/or refundable credit increase that results in a refund on a timely filed return No route criteria exist Process the Form 1040-X using instructions in paragraphs below.

  8. An override code is required when the IRS Received Date is over one year old or the RSED is expired.

    1. R - Allows IRS Received Date to be older than a year in the past.

    2. S - Allows current date and the Refund Statute Control Date (RFSCD) to be later than the Refund Statue Expiration Date (RSED).

    Reminder:

    If the taxpayer lived in a qualified disaster area, the due date considered a return timely filed may be different.

  9. Use the table below to determine the received date, amended claims date, and refund statute control date.

    Note:

    Verify postmark date when determining timeliness.

    Reminder:

    Always verify the RSED and ASED dates on CC TXMOD.

    If ... And ... Then ...
    Received date is after the RSED

    Example:

    The received date is 4-20- 20XX.

    		 Postmark shows the claim is timely filed

    Example:

    The RSED is 4-15-20XX, and the postmark date is 4-15-20XX or prior.

    Example:

    The RSED is 10-15-20XX, and the postmark date is 10-13-20XX.

    		 Use the received date as normal. Use the postmark date as the amended claims date and as the RFSCDT.

    Example:

    Input 4-15-20XX as the RFSCDT and the amended claims date.

    Example:

    Input 10-13-20XX as the amended claims date and RFSCDT.
    The received date is prior to the RSED

    Example:

    The received date is 3-30-20XX.

    		 You are processing the claim after the RSED

    Example:

    Postmark date is 3-28-20XX and the return is received 6-05-20XX.

    		 Use the received date as normal and as the amended claims date and RFSCDT.

    Example:

    Input 3-30-20XX as the amended claims date and the RFSCDT.
    Received date is prior to the RSED

    Example:

    The received date is 6-01-20XX and the RSED/ASED is 10-15-20XX.

    		 You are processing the claim prior to the RSED

    Example:

    The claim is processed 6-20-20XX.

    		 Process the return following standard 1040-X procedures.
    Claim is timely received

    Example:

    The received date is 4-15- 20XX or prior.

    		 The claim is incomplete, and correspondence is required per paragraph (4), box 1. Response is received after the RSED, but within the time frames in paragraph (4), box 1.

    Example:

    Correspondence was sent and the reply was received 6-1-20XX.

    		 Use the original received date as the received date and RFSCDT. Use the response date as the amended claims date.
    There’s no envelope or postmark present, or the postmark is illegible, and the received date is after the RSED ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Example:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    		 Use the RSED date as the received date, amended claims date, and RFSCDT. Edit the RSED date onto the return and circle any other received date stamps.

    Note:

    Input 4-15-20XX as the received date, amended claims date, and RFSCDT.

3.11.6.16.2 (01-02-2024)

Processing a Disaster Claim

  1. Refer to IRM 3.11.6.7.6, Disaster Claim Screening, prior to processing a disaster claim.

  2. Qualifying individuals may be identified by a posted TC 971 AC 086 or 087 on the eligible module. Qualified individuals include those individuals that lived in a Federally Declared Disaster area on or near the time of the disaster.

  3. A disaster claim is filed using Form 4684, Casualties and Thefts, and is reported in addition to the standard deduction or as an itemized deduction. If Form 4684, Casualties and Thefts, isn’t attached correspond.

  4. To process a disaster claim, check CC TXMOD for an -O or -S Freeze on the account.

    If ... And ... Then ...
    -O or -S freeze code is present The taxpayer requests the refund be issued to a name or address other than the one shown on Master File (e.g., temporary address, taxpayer representative, in care of name and/or address) Send the case to AM.
    -O or -S freeze code is present   Process the claim.
    -O or -S freeze code isn’t present The return is a balance due Send the case to AM.
    -O or -S freeze code isn’t present The return is a refund Process the claim.

  5. If processing a disaster claim and Priority Code 8 is required, send the case to AM.

  6. If the disaster claim meets the special rules for recalculation as stated in IRM 3.11.6.7.6 (2),Disaster Claims Screening, follow the table.

    If ... And ... Then ...
    The taxpayer claimed itemized deductions The taxpayer qualified for the modified computation but didn’t use it Take the following action:

    1. Recompute the amount shown on Form 4684, Casualties and Thefts. When recalculating, change line 11 from $100 to $500 and change line 17 to $0.

    2. Recompute Schedule A using the recomputed Form 4684, Casualties and Thefts, amount.

    3. When inputting an adjustment, use the recomputed Schedule A amount.
      Exception: If the total itemized deduction is less than the standard deduction, see the box below.

    4. Use RC 076 and Category Code to "KATX"

    5. If the taxpayer’s refund amount is changed because of the recalculation, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.
    The taxpayer claimed the standard deduction The taxpayer qualified for the modified computation but didn’t use it Take the following action:

    1. Recompute the amount shown on Form 4684, Casualties and Thefts. When recalculating, change line 11 from $100 to $500 and change line 17 to $0.

    2. Recompute Schedule A using the recomputed Form 4684, Casualties and Thefts, amount.

    3. When inputting an adjustment, use the recomputed Schedule A amount.

    4. Use RC 092 and Category Code to "KATX" .

    5. If the taxpayer’s refund amount is changed because of the recalculation, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

3.11.6.16.3 (01-02-2024)

Cases Returned From CAT-A Suspense

  1. Cases suspended to CAT-A are returned by CAT-A classifiers with the following processing instructions.

    If the CAT-A response is ... Then ...
    "Selected" Take the following action:

    1. Input the necessary audit trail with a TC 971 and Action Code (AC) 013.

    2. Close the CII case.
    "Rejected" Take the necessary action to resolve the reason for rejection and resubmit the claim as Category A.

    Note:

    If additional information is needed from the taxpayer, reject the claim and request the information.
    "Accepted" Take the necessary action to adjust the account.

    Reminder:

    If other routing criteria is present, route the case per normal procedures.
    "Disallowed" Take the necessary action to disallow the claim per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).
    "No Consider" No consider the claim per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

3.11.6.16.4 (01-02-2024)

Combat Zone

  1. Submission Processing only processes Combat Zone (CZ) claims that result in a net refund or zero-balance.

    Caution:

    Don't confuse CZ cases with the Military Family Relief Act (MFRA) cases. For MFRA cases, see IRM 3.11.6.14.1.1.6, Military Family Relief Act (MFRA) (Line 1).

  2. If a -C freeze is displayed on CC TXMOD or CC IMFOL, verify the taxpayer is actively serving in a designated CZ. Treat the return as a CZ case if:

    • There’s a -C freeze with a Combat Indicator of 1 on CC IMFOLE.
      or

    • Taxpayer notates actively serving in a CZ on the return.

  3. If a -C freeze with a Combat Indicator of "1" is present, then CC IMFOLE or CC ENMOD shows a TC 500 with a Closing Code (cc). There may be several entry and exit dates present. Use the most recent TC 500 to determine current CZ status.

    • If the closing code is an even number, treat the case as a CZ return.

    • If the closing code is an odd number, don't treat case as a CZ return.

    Note:

    If the literal "Combat Zone" is present on IDRS ensure there's a -C freeze before treating the case as a CZ return. The literal without the freeze is only an indication of prior CZ status.

  4. If an active CZ case results in a net balance due, send the case to AM.

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  6. If a -C freeze isn’t on the account for a CZ case, send the case to AM.

  7. When required information is missing from the return, follow IRM 3.11.6.10, Correspondence Procedures.

  8. When processing a CZ case, don't enter an Amended Claims date.

  9. A taxpayer (or the spouse, if married filing jointly) receiving nontaxable combat pay may elect to include the amount when figuring their earned income for purposes of computing EITC.

  10. Don't confuse Combat Zone with the Military Family Relief Act, see IRM 3.11.6.14.1.1.6, Military Family Relief Act (MFRA) (Line 1).

3.11.6.16.5 (01-02-2024)

Inputting a Corrected Adjustment

  1. Follow the table when inputting a corrected adjustment.

    If ... Then ...
    Lines 16 - 22 of Form 1040-X don't match Don't issue a Letter 474C or set a math error. Continue processing the return following normal procedures.
    Missing or incorrect entries don't affect the overall adjustment Don't issue a Letter 474C or set a math error. Continue processing the return following normal procedures.
    The corrected adjustment result does not differ from the taxpayer’s expected refund or balance due Don't issue a Letter 474C or set a math error. Continue processing the return following normal procedures.
    The taxpayer is requesting a credit already received and it is the only issue Input the computed adjustment using:

    1. Blocking Series "05" .

    2. Source Code "1" .

    3. The appropriate IRN(s), CRN(s), and RC(s).

    4. CII Indicator "1" .

    5. Source Document Indicator: "N" .

    6. The appropriate remarks.

    7. Send Letter 76C

      1. Use the fill-in: We didn't allow (appropriate title) Credit because our records indicate that you previously received the credit as part of your original or amended return.

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page."

      3. Leave a CII Case Note.
    There’s only a correction to withholding Don't set a math error. Input the corrected adjustment using:

    1. Blocking Series "05"

    2. Source Code "1" .

    3. CII Indicator "1" .

    4. Source Document Indicator: "N" .

    5. The appropriate remarks.

    6. Send Letter 76C

      1. Use the fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, isn't being returned with this letter. We corrected line number (fill-in line number), because (description of error).

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      3. Leave a CII Case Note.
    A tax decrease results in a larger refund than the taxpayer requested Don't set a math error. Input the corrected adjustment using:

    1. Blocking Series "05"

    2. Source Code "1" .

    3. CII Indicator "1" .

    4. Source Document Indicator: "N" .

    5. The appropriate remarks.

    6. Send Letter 76C

      1. Use the fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, isn't being returned with this letter. We corrected line number (fill-in line number), because (description of error).

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      3. Leave a CII Case Note.
    The taxpayer requests the IRS to complete a form, even when the tax change is $100 or more Don't set a math error. Input the corrected adjustment using:

    1. Blocking Series "05"

    2. Source Code "1" .

    3. CII Indicator "1" .

    4. Source Document Indicator: "N" .

    5. The appropriate remarks.

    6. Send Letter 76C

      1. Use the fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, isn't being returned with this letter. We corrected line number (fill-in line number), because (description of error).

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      3. Leave a CII Case Note.
    The corrected adjustment is a balance due Input the corrected adjustment using:

    1. Blocking series:

      1. 77 if the original return was e-filed.

      2. 78 if the original return was paper filed.

    2. Source Code "6" .

    3. The appropriate IRN(s), CRN(s) and RC(s) to process the return for the corrected amount(s) and any other issues.

    4. CII Indicator:" 1" .

    5. The appropriate remarks.

    6. If using xMend, click the "Letter" button and select "Write Your Own" .

    7. Send Letter 474C.

      1. Use the fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, isn't being returned with this letter. We corrected line number (fill-in line number), because (description of error).
        Exception: For "ITIN reject" cases, see IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7).

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      3. Leave a CII Case Note.
    The corrected adjustment reduces the refund amount Input the corrected adjustment using:

    1. Blocking series:

      1. 77 if the original return was e-filed.

      2. 78 if the original return was paper filed.

    2. Source Code "6" .

    3. The appropriate IRN(s), CRN(s) and RC(s) to process the return for the corrected amount(s) and any other issues.

    4. CII Indicator:" 1" .

    5. The appropriate remarks.

    6. If using xMend, click the "Letter" button and select "Write Your Own" .

    7. Send Letter 474C.

      1. Use the fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, isn't being returned with this letter. We corrected line number (fill-in line number), because (description of error).
        Exception: For "ITIN reject" cases, see IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7).

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      3. Leave a CII Case Note.

3.11.6.16.6 (01-02-2024)

Math Error Response Cases

  1. When a math error (ME) is present on the taxpayer's account, determine if the amended return is a ME response and addresses the error(s) on the account.

    1. The taxpayer is allowed 60-days from the date of the math error notice (the 23C date) to request abatement of the additional tax specified in the notice. If the request is submitted via U.S. mail, use the postmark date to determine if the response was timely. Refer to IRC 6213(b)(2)(A).

    2. The taxpayer is allowed a stay of collection during the 60-day time period described above during which collection of the assessment shall not be made, begun or prosecuted. If the taxpayer makes a request for an abatement within 60 days, treat the response as a protest. Refer to IRC 6213(b)(2)(B).

  2. An amended return isn’t considered an ME response if the date of the ME notice is later than the date the taxpayer signed the amended return. When an ME is set a TC 971 with one of the following CP notices is generated:

    Notice ... Description ...
    CP 10 ME on an overpaid module, which causes a reduction of credit elect.
    CP 11 ME on a module with a balance due of $5 or more.
    CP 12 ME on a module with an overpayment of $1 or more.
    CP 13 ME on a module with an even balance, an overpayment of less than $1, or a balance due of less than $5
    CP 16 ME on an overpaid module, and part or all of the overpayment is offsetting to satisfy another tax module liability.

  3. There are two types of responses to MEs, a substantiated protest and unsubstantiated protest. However, when a taxpayer files an amended return when an ME is present on the account, the return could be a response that:

    1. Doesn’t address the ME(s) on the account.

    2. Agrees with the ME(s) on the account.

    3. Is a substantiated protest. A substantiated protest occurs when a taxpayer provides supporting documentation which proves the IRS ME calculation is incorrect. Validate the substantiation by reviewing qualifications needed to allow adjustment.

    4. Is an unsubstantiated protest. An unsubstantiated protest occurs when a taxpayer is unable or unwilling to provide the required supporting documentation and still requesting the claim.

    5. Is an unsubstantiated response. An unsubstantiated response is an unsubstantiated protest that occurs when the taxpayer addresses the ME(s) but doesn't provide required supporting documentation.

    If ... Then ...
    The amended return is an unsubstantiated protest Send the case to AM.
    Any additional changes on the amended return result in an ME Send the case to AM.
    The amended return is an unsubstantiated response, and no additional changes are requested Send the case to AM.
    The amended return is an unsubstantiated response, and additional changes are requested Send the case to AM.
    The amended return is a partially substantiated response, and partially unsubstantiated response Send the case to AM.
    The amended return a partially agreed, or substantiated response, and partially unsubstantiated Send the case to AM.
    The ME is caused by an "ITIN Reject" or "No W-7" See IRM 3.11.6.16.14.1, Returns Received From the ITIN Unit (Form W-7).
    The ME is caused by ITIN status See IRM 3.11.6.16.14.2, Individual Taxpayer Identification Number (ITIN) Status.

3.11.6.16.6.1 (01-02-2024)
The Amended Return Agrees with, or Doesn’t Address, the Math Error(s)

  1. When taxpayer agrees with the ME(s), the action needed depends on the account balance.
    • If the account isn’t in a debit balance, follow the table.

    If ... Then ...
    There are no additional changes requested on the amended return One adjustment is required. Input a TC 290 for .00.
    There are additional changes requested on the amended return One adjustment is required. Input the adjustment following normal processing procedures.

    • If the account is in a debit balance, follow the table.
    If ... Then ...
    There are no additional changes requested on the amended return Two adjustments are required.

    1. Input the first adjustment to release the "-G" freeze with:

      • A TC 290 for ".00" .

      • Source Code: "1" .

      • Priority Code "6" .

      • No Amended Claims Date.

      • "ME AGREED" to the remarks.

    2. Input the second adjustment to release the "-A" freeze following normal procedures with:

      • A posting delay code for 1 cycle more than the first adjustment.
    There are additional changes requested on the amended return

    1. Input the first adjustment to release the "-G" freeze with:

      • A TC 290 for ".00" .

      • Source Code: "1" .

      • Priority Code "6" .

      • No Amended Claims Date.

      • "ME AGREED" to the remarks.

    2. Input the second adjustment for the additional changes following normal procedures with:

      • A posting delay code for 1 cycle more than the first adjustment.

  2. When the taxpayer doesn’t address the ME(s) on the account, take the following action.

    If ... Then ...
    There are no additional changes being requested See IRM 3.11.6.6.1, Duplicate Returns and Identical Open CII Cases.
    There are additional changes being requested Input the adjustment following normal processing procedures.

3.11.6.16.6.2 (01-02-2024)
Processing a Timely Substantiated Protest to a Math Error Set on the Original Return

  1. A timely substantiated protest is a protest that is received within the 60-day time period stated in IRM 3.11.6.16.6 (1), Math Error Response Cases.

  2. A correction of a math error (ME) on an original filed return is not an amended return or claim for which the amended claims date is required. When processing a response to a ME set on the original return, don't correspond for forms, schedules, or signatures that were on the original return.

    Reminder:

    Taxpayers often use their original figures in column A instead of the IRS corrected figures when correcting a ME. In some instances, a taxpayer may have multiple MEs on the account.

  3. If a taxpayer substantiates the ME set on the original return follow the table below.

    If ... Then ...
    The substantiated response is to ME on the original return One adjustment is required with:

    • Source Code 2.

    • No Amended Claims Date.

    • "ME RESPONSE" in the remarks.

  4. If the taxpayer files a substantiated response to ME on the original return and additional changes are requested, follow the table below.

    If ... Then ...
    The additional changes result in a refund Two adjustments are required.

    1. Input the ME correction on the first adjustment with:

      • Source Code: "2" .

      • Hold Code "4" .

      • No Amended Claims Date.

      • "ME RESPONSE" to the remarks.

    2. Input the additional changes on the second adjustment with:

      • Normal processing procedures.

      • A posting delay code for 1 cycle more than the first adjustment.
    The ME correction and the additional changes don’t result in a refund One adjustment is required with:

    • Use Source Code "2" .

    • No Amended Claims Date.

    • Add "ME RESPONSE" to the remarks.
    The substantiated response results in a refund and the additional changes don't One adjustment is required with:

    • Source Code "2" .

    • No Amended Claims Date.

    • Add "ME RESPONSE" to the remarks.
    The substantiated response doesn't result in a refund, but the additional changes do One adjustment is required with:

    • Source Code "2" .

    • The received date as the Amended Claims Date.

    • "ME RESPONSE" to the remarks.

  5. If the taxpayer substantiates some of the MEs on the original return, but doesn’t substantiate all the MEs on the account, see IRM 3.11.6.16.6 (3), Math Error Response Cases.

3.11.6.16.6.3 (01-02-2024)
Processing a Late Substantiated Protest to a Math Error Set on the Original Return

  1. A substantiated protest is considered late if it’s received after the 60-day time period stated in IRM 3.11.6.16.6 (1), Math Error Response Cases.

  2. When a late substantiated protest to a ME set on the original return is received and there’s not a -G freeze on the module, follow IRM 3.11.6.16.6.2, Processing a Timely Response to a Math Error Set on the Original Return.

3.11.6.16.6.4 (01-02-2024)
Processing a Timely Substantiated Protest to a Math Error Set on an Amended Return

  1. A substantiated protest is considered timely if it’s received within the 60-day time period stated in IRM 3.11.6.16.6 (1), Math Error Response Cases.

  2. If a taxpayer substantiates the math error (ME) set on an amended return.

    Reminder:

    Taxpayers often use their original figures in column A instead of the IRS corrected figures when correcting a ME. In some instances, a taxpayer may have multiple MEs on the account.

    If ... Then ...
    The substantiated response is to ME on an amended return Input the adjustment with:

    • Source Code 2.

    • The received date of the TC 29X that set the ME as the Amended Claims Date.

    • CII indicator "1" .

    • Source Document Indicator "N" .

    • "ME RESPONSE" in the remarks.

  3. If the taxpayer files a substantiated response to ME on an amended return and additional changes are requested, follow the table below.

    If ... Then ...
    The additional changes result in a refund Two adjustments are required.

    1. Input the ME correction on the first adjustment using:

      • Source Code "2" .

      • Hold Code "4" .

      • The received date of the TC 29X that set the ME as the Amended Claims Date.

      • CII indicator "1" .

      • Source Document Indicator "N" .

      • "ME RESPONSE" in the remarks.

    2. Input the additional changes on the second adjustment with:

      • A posting delay code (PDC) for 1 cycle more than the first adjustment.

      • CII indicator "1" .

      • Source Document Indicator "N" .
    The ME correction and the additional changes don’t result in a refund One adjustment is required with:

    • Source Code: "2" .

    • The received date of the TC 29X that set the ME as the Amended Claims Date.

    • CII indicator "1" .

    • Source Document Indicator "N" .

    • "ME RESPONSE" in the remarks.
    The substantiated response results in a refund and the additional changes don't One adjustment is required with:

    • Source Code: "2" .

    • The received date of the TC 29X that set the ME as the Amended Claims Date.

    • CII indicator "1" .

    • Source Document Indicator "N" .

    • "ME RESPONSE" in the remarks.
    The substantiated response doesn't result in a refund, but the additional changes do One adjustment is required with:

    • Source Code "2" .

    • The received date as the Amended Claims Date.

    • CII indicator "1" .

    • Source Document Indicator "N" .

    • "ME RESPONSE" in the remarks.

  4. If the taxpayer substantiates some of the MEs on the amended return, but doesn’t substantiate all the MEs on the account, see IRM 3.11.6.16.6 (3), Math Error Response Cases.

3.11.6.16.6.5 (01-02-2024)
Processing a Late Substantiated Protest to a Math Error Set on an Amended Return

  1. A substantiated protest is considered late if it’s received after the 60-day time period stated in IRM 3.11.6.16.6 (1), Math Error Response Cases.

  2. When a late substantiated protest to a ME set on an amended return is received and there’s not a -G freeze on the module, follow IRM 3.11.6.16.6.4, Processing a Timely Substantiated Protest to a Math Error Set on an Amended Return.

3.11.6.16.7 (01-02-2024)

Inputting a Disallowance Adjustment

  1. Follow the table below when sending a Letter 105C:

    If ... Then ...
    The disallowance is for PATH Act

    1. Input the adjustment as follows:

      1. Use Blocking Series:

        • 98 if the original return was paper filed.

        • 99 If the original return was e-filed.

      2. Input a TC 290 for .00.

      3. Use Source Code 0.

      4. Use the applicable Reason Code(s).

      5. Use CII Indicator "1"

      6. Use Source Document Indicator "N" .

      7. Input the appropriate remarks

    2. Correspond as follows:

      1. Send a Letter 105C

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page"

      3. Leave a CII Case Note describing the issue.
    The disallowance is for all other claims

    1. Input the adjustment as follows:

      1. Use Blocking Series:

        • 98 if the original return was paper filed.

        • 99 If the original return was e-filed.

      2. Input a TC 290 for .00.

      3. Use Source Code 0.

      4. Use the applicable Reason Code(s).

      5. Use CII Indicator "1" .

      6. Use Source Document Indicator "N"

      7. Input the appropriate remarks.

    2. Correspond as follows:

      1. Send a Letter 105C.

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      3. Leave a CII Case Note describing the issue.

  2. When the partial disallowance of a claim results in a balance due or zero-balance, send a Letter 105C as outlined in paragraph 1 and input the adjustment following Letter 106C adjustment procedures outlined in paragraph 3 below.

  3. Follow the table below when sending a Letter 106C:

    Note:

    When sending Letter 106C the:

    • "Amount of Claim" is the total the taxpayer is expecting.

    • "We only allowed" amount is the result of the adjustment.

    If ... Then ...
    The disallowance is for PATH Act

    1. Input the adjustment as follows:

      1. Use Blocking Series:

        • 18 if the original return was paper filed.

        • 00 If the original return was e-filed.

      2. Input a TC 29X for the corrected total tax.

      3. Use Source Code 1

      4. Use the applicable Reason Code(s).

      5. Use CII Indicator "1"

      6. Use Source Document Indicator "N" .

      7. Input the appropriate remarks.

    2. Correspond as follows:

      1. Send a Letter 106C.

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      3. Leave a CII Case Note describing the issue.
    The disallowance is for all other claims

    1. Input the adjustment as follows:

      1. Use Blocking Series:

        • 18 if the original return was paper filed.

        • 00 If the original return was e-filed.

      2. Input a TC 29X for the corrected total tax.

      3. Use Source Code 1.

      4. Use the applicable Reason Code(s).

      5. Use CII Indicator "1" .

      6. Use Source Document Indicator "N" .

      7. Input the appropriate remarks.

    2. Correspond as follows:

      1. Send a Letter 106C.

      2. Print the C-Letter to PDF and attach it to the case with the "Attach File" button on the "Active Case Page" .

      3. Leave a CII Case Note describing the issue.

3.11.6.16.8 (09-22-2023)

Estimated Tax Penalty (ETP)

  1. Estimated tax penalty (ETP) is computed based on the tax shown on the taxpayer’s original filed return. However, if the taxpayer files a superseding return, the penalty is computed on the tax shown on that superseding return.

  2. The ETP is posted as a TC 170 or TC 176.

    • A TC 170 is a manual assessment of an ETP by the IRS, or a self-assessment via Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts.

    • A TC 176 is a computer-generated assessment of an ETP.

  3. Route to AM if the taxpayer is requesting a change to the ETP for the following:

    • A filing status change to married filing jointly (FS 2)

    • A change in withholding

    • A checked box A, B, or E in Part II, Form 2210

    Note:

    If routing a return to EXAM or CAT-A, do not correspond for a Form 2210.

  4. When the taxpayer is changing their ETP ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and a Form 2210 is not attached or none of the boxes in Part II are checked:

    • Do not adjust the penalty

    • Adjust the return for all other allowable issues

    • Send Letter 369C per IRM 3.11.6.10.9, Correspondence for Estimated Tax Penalty (Letter 369C).

  5. Math verify the ETP using the AMS worksheets when Form 2210 is attached and at least one of the boxes in Part II is checked. If the difference between the AMS penalty amount and the taxpayer’s amount is:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ – adjust the account using the recomputed amount. See IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ – adjust the account using the taxpayer’s amount.

  6. If you’re unable to math verify the ETP, correspond per IRM 3.11.6.6, Master File Verification and Math Verification.

  7. To adjust the ETP use:

    • TC 170 to increase the penalty

    • TC 171 to decrease the penalty

    • RC 065 is required when a TC 17X is input

    If the ETP is reducing, include a Penalty Reason Code (PRC) in the fourth position, see below:
    If ... And ... Then use ...
    A TC 170 is posted on the account

    1. The taxpayer is filing a superseding return

    2. The ETP is being adjusted because the taxpayer or IRS is providing a corrected computation. For example, if the IRS is adjusting withholding or estimated payments, and IRS is manually correcting the ETP.

    1. PRC 010

    2. PRC 016
    A TC 176 is posted on the account The ETP is being adjusted due to either of the following:

    • The taxpayer is filing a superseding return or

    • The taxpayer is providing their own penalty computation on Form 2210

    		 PRC 013
    A TC 170 or 176 is posted on the account Correcting an IRS computational error in the ETP computation PRC 045

3.11.6.16.9 (07-28-2022)

Form 4442 and E-4442, Inquiry Referrals

  1. Submission Processing (SP) may receive Form 4442, Inquiry Referral, or E-4442 from another Business Operating Division (BOD) regarding cases in SP 1040-X inventories. These referrals must be expedited and addressed within 20 days of receipt.

    Note:

    Review AMS for E-4442 referrals.

    If ... And ... Then ...
    Form 4442 or E-4442 is received The referral is requesting the case be transferred to the requestor Route or reassign the case to requestor as requested.
    Form 4442 or E-4442 is received The referral is requesting the case be transferred to another area Route or reassign the case to the other area as requested with the referral.
    Form 4442 or E-4442 is received The referral is requesting an action be taken on the account that doesn't meet SP criteria Route or reassign the case to AM with the referral.
    Form 4442 or E-4442 is received The referral is requesting an adjustment action be taken on the account that meets SP criteria Process as normal and complete Part III Section A, items 26 through 29, and C, item 31, on the referral.

    Note:

    In the Response/Final Resolution section, briefly describe the adjustment action taken.

    Example:

    Adjusted EIC and CTC as requested on Form 1040-X.

3.11.6.16.10 (01-02-2024)

Decedent Returns

  1. Submission Processing only processes balance due and zero-balance decedent 1040-X returns.

  2. Indications of a deceased taxpayer may include any of the following:

    1. Date of death is present

    2. "Deceased" written on the top of the form

    3. "Deceased, Filing as surviving spouse," or similar notation in the signature area

    4. Death certificate, Form 1310, or other documentation is attached

    5. "DECD" on an IRS label or written after a person’s name

    6. "Estate of" is present

  3. Send the following to AM:

    1. Refund returns for deceased taxpayers

    2. If MFR 08 is present on CC INOLES indicating the primary taxpayer is deceased

    3. Returns with Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, attached

  4. If the signature of the deceased taxpayer is present on the signature line of the return, the signature must precede the date of death of the taxpayer. If it doesn't, correspond for a valid signature.

  5. If the return isn't signed by a surviving spouse, an executor, or an administrator, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.

    Reminder:

    On MFJ claims, the surviving spouse must sign as a surviving spouse. Correspond if missing.

  6. If correspondence is required, don't address the correspondence to the deceased taxpayer.

    1. If the return is filing status 2, then address correspondence to surviving spouse

    2. For all other filing status, address correspondence with "Estate of" placed in front of the taxpayer's name (e.g., Estate of John Smith Decd)

      Note:

      A Power of Attorney (POA) becomes void upon taxpayer's death.

  7. Documentary evidence isn't required for the authority to sign the following:

    1. Balance due returns

    2. Zero balance returns

    3. Married filing joint (FS 2) or married filing separate (FS 3) returns signed by the surviving spouse

3.11.6.16.11 (02-17-2023)

Form 8857, Request for Innocent Spouse Relief

  1. Process Form 8857, Request for Innocent Spouse Relief, or Form 1040-X referencing innocent spouse (with or without Form 8857 attached) per the following table.

    If ... Then ...
    Innocent spouse is the only issue Process the case as follows:

    1. Input a TC 290 .00, Blocking Series 05 and no RC.

    2. Input a TC 470 for all years listed on Form 8857, Request for Innocent Spouse Relief. Include closing code 90 if the "SC-STS." field on CC TXMODA is other than "26" .

    3. Input a case note stating, "TC 470 has been input." If closing code "90" was input, include it in the case note.

    4. Complete Form 4442, Inquiry Referral, stating "TC 971 AC 065 is required due to receipt of Form 8857 available on (RRD or CII as appropriate)."

    5. Fax Form 4442 to the Cincinnati Centralized Innocent Spouse Operation (CCISO):≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
    Other issue(s) present Process the case as follows:

    1. Input the adjustment.

    2. Input a TC 470 for all years listed on Form 8857, Request for Innocent Spouse Relief. Include closing code 90 if the "SC-STS." field on CC TXMODA is other than "26" .

    3. Input a case note stating, "TC 470 has been input." If closing code "90" was input, include it in the case note.

    4. Complete Form 4442, Inquiry Referral, stating "TC 971 AC 065 is required due to receipt of Form 8857 available on (RRD or CII as appropriate)."

    5. Fax Form 4442 to CCISO: ≡ ≡ ≡ ≡ ≡ ≡ ≡.

3.11.6.16.12 (01-02-2024)

Form 8379, Injured Spouse Allocation

  1. Input a TC 971 AC 071 and send the case to AM if:

    • The taxpayer files a return with the sole purpose of filing the Injured Spouse Claim

    • The return needs a corrected adjustment

    • The return doesn't meet SP criteria

    • Form 8379, Injured Spouse Allocation, is loose

    • The taxpayer indicates an Injured Spouse Allocation but doesn't submit Form 8379

  2. If the taxpayer files Form 8379 Injured Spouse Allocation, with their return that has a processable adjustment:

    1. Input the adjustment as "No Source Document" (NSD).

    2. If the adjustment results in a credit balance or the account is in a credit balance, include a hold code 1 with the adjustment to prevent refund issuance, this applies to both MFT 30 and MFT 35.

      Note:

      If there's a refund for MFT 30 and 35 and Form 8379 is attached/indicated, don't input a credit transfer. Send the case to AM.

    3. Input a TC 971 AC 071.

    4. Upon completion of the processable adjustment, send the entire case to Injured Spouse.

    Note:

    Correspond for missing information or signature(s) per normal procedures. See IRM 3.11.6.10, Correspondence Procedures.

3.11.6.16.13 (07-28-2022)

Form 8938, Statement of Specified Foreign Financial Assets

  1. A Transaction Code (TC) 971 Action Code (AC) must be input on all cases with a Form 8938, Statement of Specified Foreign Financial Assets, attached. Input a TC 971 AC 698 even when routing.

  2. If Form 8938, Statement of Specified Foreign Financial Assets, is the only issue, input a TC 290 for .00. If other issues are involved, process as normal and keep Form 8938, Statement of Foreign Financial Assets with claim.

3.11.6.16.14 (01-02-2024)

Returns With an Individual Taxpayer Identification Number (ITIN)

  1. PATH Act requirements may apply, see IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

  2. Cases with an ITIN can be received from:

    • The ITIN unit after the taxpayer has gone through the ITIN process. These returns can be identified by a W-7 stamped in the bottom left corner of the return.

    • The taxpayer files an amended return that didn’t need to go through the ITIN process.

  3. Cases that have an Individual Taxpayer Identification Number (ITIN) present require additional research for each ITIN to determine the following.

    1. If the ITIN status is:
      • Active
      • Inactive
      • Unvalidated

    2. If the ITIN unit has indicated:
      • "ITIN Reject"
      • "No W-7"

    3. If the ITIN has been timely issued by the ITIN unit.

    4. If another TIN has been used for each ITIN on the return.

3.11.6.16.14.1 (01-02-2024)
Returns Received From the ITIN Unit (Form W-7)

  1. When a return has a red W-7 stamped in the bottom left corner of the return it has been received from the ITIN Unit. Signature correspondence isn't required when a return has been received from the ITIN unit.

    Note:

    On CII cases, the stamp looks black and white.

  2. If the taxpayer has submitted a copy of a previously filed Form 1040 and the address is different from IDRS, research CC FINDSD. If CC FINDSD has a subsequent address update since the original filing, then don't update the address.

  3. If the primary taxpayer, or secondary taxpayer if married filing joint, has a newly issued ITIN, research for a different TIN.

  4. After the TIN research has been completed, process the return using the following instructions when a TC 150 is posted.

    And ... Then ...
    The return is a duplicate return. See note below. Input a TC 290 .00 with no reason code.
    The Primary (or Secondary) TIN is different than found on the return Capture an IMFOLR screen print (for each TIN, if more than one) for the case, leave a case note stating "ITIN/IRSN DUPE" , and send the case to AM.
    The Primary (or Secondary) TIN is the same as the original filing, and other issues are present Process the return as an amended return.

  5. After the TIN research has been completed, process the return using the following instructions when a TC 150 isn’t posted.

    If ... Then ...
    There’s more than one TIN for the taxpayer Send the case to Batching.
    The return contains an IRSN for the primary taxpayer, but an ITIN/SSN is found Circle the primary taxpayer’s IRSN, edit the ITIN/SSN to the return then send the case to Batching.
    The return contains an ITIN for the primary taxpayer and an SSN is found Circle the primary taxpayer’s ITIN, edit the SSN then send the case to Batching.

  6. When “ITIN REJECT” is stamped or "No W-7" is indicated for the primary taxpayer box take the following action:

    In ... Then ...
    You can't locate a TIN after researching IDRS Send the case to Batching.
    You find the correct TIN Update the "Case Data" to the correct TIN. Then continue processing the case.

  7. If “ITIN REJECT” is stamped or "No W-7" is indicated for the secondary taxpayer, take the following action:

    If ... Then ...
    You can't locate a TIN after research and income subject to SE Tax is reported for the secondary taxpayer Send the case to Batching.
    You can't locate a TIN after research and a math error already exists for the secondary TIN Input per paragraphs 10, 11, and 12 below. Allow the standard deduction and don't allow the exemption.
    You can't locate a TIN after research and none of the previous conditions exist Input per paragraphs 10, 11, and 12 below. Allow the standard deduction and don't allow the exemption.
    You locate a TIN after research Continue processing.

  8. If “ITIN REJECT” is stamped or "No W-7" is indicated for the dependent(s) take the following action:

    If ... Then ...
    There’s a math error for the dependent See paragraph 10 below and 11 if applicable.
    There’s not a math error for the dependent See paragraph 10 below and 11 if applicable.

  9. If the dependent(s) has a newly issued ITIN(s), follow normal 1040-X procedures.

    Exception:

    If the TIN the ITIN unit assigned doesn't match CC INOLES, research CC NAMES for the correct TIN. If unable to determine, send the case to the ITIN department, Stop 6085 AUSC with "ITIN N/C mismatch" in the Remarks area or Comments field.

  10. If a return is received from the ITIN department that is workable:

    1. Input any allowable adjustment(s). See IRM 3.11.6.16.6, Math Error Response Cases, for inputting a substantiated math error response. PATH Act criteria applies for certain credits.

    2. Include entity changes.

    3. Update the DUPOL database if necessary.

    4. Enter the appropriate reason code(s).

    5. Enter the date from Form 3471-E, if attached, as the Amended Claims Date. If the case is a substantiated math error response, see IRM 3.11.6.16.6, Math Error Response Cases, to determine the appropriate Amended Claims date.

  11. When the allowable adjustment changes the taxpayer’s expected refund or balance due:

    Reason for Change Action
    ITIN Reject Send an informational Letter 178C with fill-in: Your amended return isn't being sent back with this letter. You should’ve received a separate notice informing you that one or more of your Form W-7, Application for IRS Individual Taxpayer Identification Number, applications were rejected. This caused a change to your amended return.

    Exception:

    If the issue is related to the spouse’s ITIN being rejected, see paragraph below for additional processing instructions.
    For any math error (ME) related to the dependents/credit because the ITIN was rejected
    Or
    They didn't have an application, "No W-7"
    Or
    They have a newly issued ITIN    		 Process for the dependents if applicable and send an informational Letter 178C with fill in: Your amended return isn't being sent back with this letter. The PATH Act prohibits taxpayers from retroactively claiming certain TIN related credits for any tax year in which the taxpayer, spouse, or qualifying child didn't have a valid SSN assigned, or ITIN/ATIN application, received by the return due date or due date as extended. This may have caused a change to your amended return.
    Path Act disallowance

    1. Correspond per IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP).

    2. Input a TC 971 AC 113 per IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).
    Math error(s) for issues other than ITIN rejects

    1. Process per IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

    2. Use the date from Form 3471-E, Edit Sheet, if attached, as the Amended Claims Date.

  12. When using xMend to allow the FSC 2 change and the spouse has "ITIN REJECTED" :

    1. Enter all zeros for the spouse’s TIN (000-00-0000) in xMend.

    2. When reviewing the Entity change on CC INCHG remove the zeros then transmit.

3.11.6.16.14.2 (01-02-2024)
Individual Taxpayer Identification Number (ITIN) Status

  1. Verify the current status of each ITIN on the return as of today’s date using CC INOLES. The status indicators are:

    • A - Active

    • I - Inactive

    • U - Unvalidated

  2. If any ITIN is unvalidated, send the case to AM.

  3. If the number of dependents or the following credits are increasing, the ITIN must be in "A" status for the primary taxpayer, the secondary taxpayer (if applicable), and the dependent(s). For the Child and Dependent Care Credit for dependents, the ITIN status applies to the individual(s) claimed.

    • Child Tax Credit (CTC)

    • Additional Child Tax Credit (ACTC)

    • Credit for Other Dependents (ODC)

    • Education Credits
      – Lifetime Learning Credit (LLC)
      – American Opportunity Tax Credit (AOTC)

    • Dependents

    • Child and Dependent Care Credit

  4. For any inactive ITIN(s), the dependent or credit increases are not allowed.

  5. Use this table to determine processing based on the ITIN status:

    Note:

    If a -R freeze is present on a module and the account remains in a credit balance after your adjustment, use a hold code "1" .

    ITIN Status And ... Then ...
    All ITINs are Active  

    1. If a math error is present, follow math error response procedures to resolve the math error for any associated active ITIN.

    2. If no math error is present, continue processing.
    One or more ITIN(s) is Inactive The entire return is unprocessable because of an increase to a credit that is based on an inactive ITIN Input a TC 290 for .00 and send Letter 178C per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.
    One or more ITIN(s) is Inactive Some issues are processable Process any allowable adjustment unrelated to the inactive ITIN(s). If the allowable adjustment changes the taxpayer’s expected refund/balance due, correspond per IRM 3.11.6.11, Correspondence Table of Issues, C-Letters and Paragraph Fill-ins.
    Caution: If a TIN related math error was set on the original return, use source code 2 on the adjustment.

  6. When the adjustment changes the expected refund or balance due and:

    Reason for change Action
    Inactive ITIN Process per paragraph 5 above.
    PATH Act disallowance Send a Letter 105C or Letter 106C. See IRM 3.11.6.10.5, Correspondence for Disallowing a Claim (Letter 105C, Letter 105SP, Letter 106C, and Letter 106SP), and input the TC 971 AC 113 per IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).
    Math error(s) for issues other than the inactive or unvalidated ITIN Process following IRM 3.11.6.16.5, Inputting a Corrected Adjustment.

3.11.6.16.15 (01-02-2024)

Computer Paragraph (CP) Notices

  1. The Computer Paragraph (CP) notices listed below are generated based on criteria from the original return and are processed by SP 1040-X tax examiners. Generally, a CP notice response is considered an informal claim and are processed following normal procedures.

  2. Starting January 27, 2023, taxpayers that receive a CP 08 or CP 09 may respond to these notices using the Document Upload Tool (DUT). SP 1040-X tax examiners process CP notice responses received through the DUT using Correspondence Imaging Inventory (CII). The DUT isn’t available for CP 27 responses.

    Note:

    There are differences when processing CP notice response depending on the format in which it is received. The differences are in how a case is sent to another area and how the case adjustment is input into the Integrated Data Retrieval System (IDRS).

  3. Don't send CP 08, CP 09, or CP 27 responses to CAT-A.

  4. Don't suspend CP 08, CP 09, or CP 27 responses to Statute. If the notice response is received after the RSED, the claim should be worked following procedures in IRM 3.11.6.16.1, Processing Statute Cases.

  5. If there’s an indication on the CP notice response that the taxpayer isn't eligible for the specific credit (no other issues involved) and a reply isn't necessary, treat the case as classified waste. See IRM 3.11.6.16.22, Classified Waste.

    Note:

    If some of the children qualify the taxpayer for the credit but others don't, then process the CP notice for the qualifying child(ren).

    Caution:

    Occasionally taxpayers get confused with the earned income and excess investment income statement and check the box on CP 09, Form 15111, Earned Income Credit Worksheet (CP 09), CP 27 and Form 15112, Earned Income Credit Worksheet (CP 27). Refer to IRM 3.11.6.16.15.2, CP 09, Earned Income Credit - You May Be Entitled to EIC, and Form 15111, Earned Income Credit Worksheet (CP 09), and Form 15111, or, CP 27, EIC Potential for T/P Without Qualifying Children, and Form 15112, Earned Income Credit Worksheet (CP 27), as appropriate, when the earned income and excess investment income statement box is checked.

  6. Edit your Tax Examiner (TE) number in the top left margin of CP notice response when documents are being detached, when printing a paper copy, rerouting, sending an e-fax, or secure message.

  7. The CP 08 and Form 15110, Additional Child Tax Credit Worksheet, CP 09 and Form 15111, Earned Income Credit Worksheet (CP 09), CP 27 and Form 15112, Earned Income Credit Worksheet (CP 27), signature requirement differs by tax year.

    • A signature isn’t required for tax years 2022 and subsequent, and the signature area on Form 15110 and Form 15111 has been removed.

      Caution:

      For tax years 2022 and subsequent, Form 15112 is required to be signed. If the signature is missing, follow the table in paragraph 11 below.

    • A signature is required for tax years 2021 and prior in the signature area on either the CP 08 or Form 15110, CP 09 or Form 15111, and CP 27 or Form 15112. If the signature is missing, follow the table in paragraph 11 below.

  8. If the taxpayer alters the address on a CP notice and an address change can be made per IRM 3.11.6.12.1.1, Address Changes, then use CC INCHG to update the taxpayer address.

  9. Use the AGI and earned income (EI) from the Per Computer Column of CC RTVUE for CP Notice calculations. If there's a previously posted adjustment on IDRS, review the adjustment to determine if the CP notice issue has already been adjusted. If the CP notice has already been adjusted, treat as classified waste. See IRM 3.11.6.16.22, Classified Waste.

  10. Don't include an amended claims date on CP notice adjustments.

  11. If a response to CP notice is incomplete, correspond.

    If ... Then ...
    The signature is missing Correspond per IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C), and use the fill in: We're unable to process your CP XX, for tax year 20XX because it wasn't signed. Please complete Form 1511X, and return it to us along with this letter, Letter 178C.
    Form 1511X is incomplete Correspond per IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C), and use the fill in: We're unable to process your CP XX, for tax year 20XX. Please complete Form 1511X, and return it to us along with this letter, Letter 178C.
    Schedule 8812 is missing Correspond per IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C), and use the fill in: We're unable to process your CP 08, for tax year 20XX because Schedule 8812 is missing. Please complete Schedule 8812, and return it to us along with this letter, Letter 178C.

    Note:

    If the taxpayer’s response is still incomplete, send Letter 916C per IRM 3.11.6.10.8, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP).

  12. If the taxpayer attached the CP 08, CP 09, or CP 27 notice to Form 1040-X take the following action:

    Note:

    If the taxpayer has additional issues in addition to the CP notice and doesn't provide Form 1040-X, process the CP notice and correspond for a Form 1040-X for the other issues.

    If ... Then ...
    There are additional issues Convert the credit to the attached Form 1040-X and process. "X" the CP notice.
    There are no additional issues Process the CP notice. "X" the Form 1040-X.

  13. If there's a previously posted adjustment on IDRS, review the adjustment to determine if the CP notice issue has already been adjusted. If the CP notice has already been adjusted, treat the CP notice as classified waste. See IRM 3.11.6.16.22, Classified Waste.

3.11.6.16.15.1 (01-02-2024)
CP 08, You May Qualify for Child Tax Credit (CTC), and Form 15110, Additional Child Tax Credit Worksheet

  1. Taxpayers are issued a CP 08, informing them of their potential eligibility to claim the Additional Child Tax Credit (ACTC). The following are required for tax year:

    • 2020 and later, Form 15110 and Schedule 8812 must be attached to the CP 08 response.

    • 2019, Schedule 8812 must be attached to the CP 08 response.

  2. If a taxpayer submits CP 08 or Form 15110 without the Schedule 8812 when required, correspond for the missing schedule per IRM 3.11.6.16.15, Computer Paragraph (CP) Notices.

  3. For CP 08 or Form 15110 signature requirements, see IRM 3.11.6.16.15 (7), Computer Paragraph (CP) Notices.

  4. Path Act criteria may apply to this credit. See IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

  5. Partially or completely deny the claim per paragraph 7 below if:

    • the taxpayer claims additional children on the CP 08 for whom the taxpayer didn't claim a dependency exemption on the original return

    • the taxpayer claims any children on the CP 08 for whom a dependency exemption was disallowed to the taxpayer

    • the taxpayer doesn't meet all of the qualifications for the CTC in IRM 3.11.6.14.2.2.6, Child Tax Credit (CTC)

  6. Compute the amount of the credit based on the qualifying children claimed on the CP 08 or Form 15110 that meet the following criteria:

    1. The same children were allowed as dependents on the original return.

    2. The children are less than 17 years old at the end of the calendar year.

  7. Follow the procedures below to process CP 08 and Form 15110 claims:

    If ... Then ...
    The taxpayer claims additional children on the CP 08 or Form 15110 that were not claimed on the original return

    1. Adjust for the originally claimed child(ren) who qualify by taking the following action.

      1. BS 05.

      2. TC 290 for .00.

      3. SC 1.

      4. RC 061.

      5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

      6. Use Priority Code 3.

      7. Use CRN 336 to allow the credit for the qualifying child(ren).

      8. Don't input the amended claims date.

    2. Partially or completely deny the claim by taking the following action:

      1. Send Letter 76C per IRM 3.11.6.10.7 (2), Correspondence for Requesting Credit Previously Received (Letter 76C).
    The taxpayer claims any children on the CP 08 or Form 15110 that were disallowed as exemptions

    1. Adjust for the originally claimed child(ren) who qualify by taking the following action.

      1. BS 05.

      2. TC 290 for .00.

      3. SC 1.

      4. RC 061.

      5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

      6. Use Priority Code 3.

      7. Use CRN 336 to allow the credit for the qualifying child(ren).

      8. Don't input the amended claims date.

    2. Partially or completely deny the claim by taking the following action:

      1. Send Letter 76C per IRM 3.11.6.10.7 (2), Correspondence for Requesting Credit Previously Received (Letter 76C).
    Some of the children that the taxpayer claimed on the CP 08 notice or Form 15110 are eligible, allow the ACTC for those dependents

    1. Adjust for the originally claimed child(ren) who qualify by taking the following action.

      1. BS 05.

      2. TC 290 for .00.

      3. SC 1.

      4. RC 061.

      5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

      6. Use Priority Code 3.

      7. Use CRN 336 to allow the credit for the qualifying child(ren).

      8. Don't input the amended claims date.

    2. Partially deny the claim by taking the following action:

      1. Send Letter 76C per IRM 3.11.6.10.7 (2), Correspondence for Requesting Credit Previously Received (Letter 76C).
    All of the children that the taxpayer claimed on the CP 08 notice or Form 15110 are eligible Allow the claim and input the adjustment as follows:

    1. BS 05.

    2. TC 290 for .00.

    3. SC 1.

    4. RC 061.

    5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

    6. Use Priority Code 3.

    7. Use CRN 336 to allow the credit for the qualifying child(ren).

    8. Don't input the amended claims date.
    There are other issues in addition to the taxpayer claiming more children on the CP 08 or Form 15110 than were claimed on the original return Send the case to AM.

  8. If the taxpayer requests direct deposit, correspond per IRM 3.11.6.14.6.1 (4), Direct Deposit.

3.11.6.16.15.2 (01-02-2024)
CP 09, Earned Income Credit - You May Be Entitled to EIC, and Form 15111, Earned Income Credit Worksheet (CP 09)

  1. Taxpayers are issued a CP 09, informing them of their potential eligibility to claim the Earned Income Tax Credit (EITC).

  2. All CP 09 responses for tax year 2020 require correspondence. The dependent qualification questions on Form 15111, Earned Income Credit Worksheet (CP 09), with revision date March 2021, is asking about the incorrect year. Certain CP 09 responses for tax year 2021 also require correspondence. The second dependent qualification question for "Dependent Number 3" on Form 15111, Earned Income Credit Worksheet (CP 09), with revision date January 2022, has an incorrect qualifying date.

    If the CP 09 response is for tax year ... Then ...
    2020 Correspond per IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C), and use the fill in: We apologize for the delay in processing your CP 09, Earned Income Credit, claim for tax year 2020. Please complete Schedule EIC, Earned Income Credit, for tax year 2020, and return it to us along with this letter, Letter 178C.
    2021 Correspond per IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C), and use the fill in: We apologize for the delay in processing your CP 09, Earned Income Credit, claim for tax year 2021. Please complete Schedule EIC, Earned Income Credit, for tax year 2021, and return it to us along with this letter, Letter 178C.

  3. PATH Act criteria may apply to this credit. See IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

  4. Follow instructions in IRM 3.11.6.14.4.1, Earned Income Tax Credit (EITC) Eligibility Criteria, and IRM 3.11.6.14.4.3, Taxpayer with Qualifying Child(ren) on Schedule EIC, for determining taxpayer's EITC eligibility.

    Note:

    Occasionally taxpayers get confused with the earned income and investment income statement and check the box. If CC IRPTR verifies earned income, continue processing the claim.

  5. For CP 09 or Form 15111 signature requirements, see IRM 3.11.6.16.15 (7), Computer Paragraph (CP) Notices.

  6. Compute the EITC amount using IDRS CC EICMP definer "R" or the EIC worksheet on AMS then adjust the account accordingly.

    Note:

    The Additional Child Tax Credit may have to be recomputed if EITC is allowed and the taxpayer claimed three or more qualifying children for the Child Tax Credit.

  7. If the CP 09 response is for the current year, update Command Code DUPED when allowing the EITC.

  8. Follow the procedures below to process CP 09 or Form 15111 claims:

    If ... And ... Then ...
    The taxpayer claims a child on the CP 09 or Form 15111, Earned Income Credit Worksheet (CP 09), that wasn't claimed on the original return No other qualifying child from the original return is being claimed. Deny the claim.

    1. Input the adjustment as follows:

      1. BS 05.

      2. TC 290 for .00.

      3. SC 0.

      4. RC 054.

      5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

      6. Don't input the amended claims date.

    2. Send Letter 76C per IRM 3.11.6.10.7 (3), Correspondence for Requesting Credit Previously Received (Letter 76C).
    The taxpayer claims a child on the CP 09 or Form 15111, Earned Income Credit Worksheet (CP 09), that wasn't claimed on the original return There's a qualifying child that was claimed on the original return. Partially deny the claim.

    1. Input the adjustment as follows:

      1. BS 05.

      2. TC 290 for .00.

      3. SC 1.

      4. RC 017 and 053.

      5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

      6. Use Priority Code 3.

      7. Use CRN 764 to allow the credit for the qualifying child(ren).

      8. Don't input the amended claims date.

    2. Send Letter 76C per IRM 3.11.6.10.7 (3), Correspondence for Requesting Credit Previously Received (Letter 76C).
    The child(ren) the taxpayer claims a child on the CP 09 or Form 15111 were claimed on the original return The child(ren) are not eligible for EITC based on eligibility criteria or our computations
    Exception: If the child(ren) claimed are not eligible, verify if the taxpayer(s) are eligible. If determined to be eligible, follow instructions in the next row’s "Then" box.    		 Deny the claim.

    1. Input the adjustment as follows:

      1. BS 05.

      2. TC 290 for .00.

      3. SC 0.

      4. RC 054.

      5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

      6. Don't input the amended claims date.

    2. Send Letter 76C per IRM 3.11.6.10.7 (3), Correspondence for Requesting Credit Previously Received (Letter 76C).
    The child(ren) the taxpayer claims a child on the CP 09 or Form 15111 were claimed on the original return Taxpayer is eligible for EITC based on eligibility criteria and our computations Allow the claim and input the adjustment as follows:

    1. BS 05.

    2. TC 290 for .00.

    3. SC 1.

    4. RC 017 and 053.

    5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

    6. Use Priority Code 3.

    7. Use CRN 764 to allow the credit for the qualifying child(ren).

    8. Don't input the amended claims date.

  9. If the taxpayer requests direct deposit, correspond per IRM 3.11.6.14.6.1 (4), Direct Deposit.

3.11.6.16.15.3 (01-02-2024)
CP 27, EIC Potential for Taxpayer Without Qualifying Children, and Form 15112, Earned Income Credit Worksheet (CP 27)

  1. Taxpayers are issued a CP 27, informing them of their potential eligibility to claim the Earned Income Tax Credit (EITC).

  2. Certain CP 27 responses for tax year 2021 require correspondence. Some taxpayers received Form 15112, Earned Income Credit Worksheet (CP 27), with revision date March 2021, which asks qualifying questions for tax year 2020. If a CP 27 response for tax year 2021 is received with Form 15112 with revision date of March 2021, correspond per IRM 3.11.6.10.4, Corresponding on Net Refund and Zero-Balance Returns (Letter 178C), and use the fill in: We apologize for the delay in processing your CP 27, Earned Income Credit, claim for tax year 2021. Please complete Form 15112, Earned Income Credit Worksheet (CP 27), for tax year 2021, and return it to us along with this letter, Letter 178C.

  3. PATH Act criteria may apply to this credit. See IRM 3.11.6.4.4.1, Protecting Americans from Tax Hikes (PATH Act).

  4. For CP 27 or Form 15112 signature requirements, see IRM 3.11.6.16.15 (7), Computer Paragraph (CP) Notices.

  5. Follow instructions in IRM 3.11.6.14.4.1, Earned Income Tax Credit (EITC) Eligibility Criteria, for determining taxpayer's EITC eligibility.

  6. Compute the EITC amount using IDRS CC EICMP definer "R" or the EIC worksheet on AMS then adjust the account accordingly.

  7. Follow the procedures below to process CP 27 or Form 15112 claims:

    If ... Then ...
    The taxpayer(s) don't qualify for the credit Deny the claim.

    1. Input the adjustment as follows:

      1. BS 05.

      2. TC 290 for .00.

      3. SC 0.

      4. RC 054.

      5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

      6. Don't input the amended claims date.

    2. Send Letter 76C per IRM 3.11.6.10.7 (4), Correspondence for Requesting Credit Previously Received (Letter 76C).
    The taxpayer(s) qualify for the credit Allow the claim and input the adjustment as follows:

    1. BS 05.

    2. TC 290 for .00.

    3. SC 1.

    4. RC 017 and 053.

    5. HC 4 if a refund on the module is being held by Return Integrity Verification Operations (RIVO). Refer to IRM 3.11.6.7.13, Return Integrity and Verification Operation (RIVO) Screening.

    6. Use Priority Code 3.

    7. Use CRN 764 to allow the credit for the qualifying child(ren).

    8. Don't input the amended claims date.

  8. If the taxpayer requests direct deposit, correspond per IRM 3.11.6.14.6.1 (4), Direct Deposit.

3.11.6.16.16 (01-02-2024)

Processing Loose Form 8606, Nondeductible IRAs

  1. TC 150 research is required. See IRM 3.11.6.5.1, Transaction Code (TC) 150 Research (No TC 150).

  2. If the taxpayer has an amount on line 15b or 25b of Form 8606, Nondeductible IRAs, send the case to AM.

  3. Form 8606 processed as a loose form doesn't require Statute clearance.

  4. Follow instructions below for processing loose Form 8606.

    If ... Then ...
    A return was filed Input the adjustment with RC 016.
    No return was filed

    1. Leave a case note stating, "Loose Form 8606" , and close the CII case.

    2. If tax is indicated by entries on line 15c, 18, or 25c, send the case to AM.
    Taxpayer submits $50 penalty payment

    1. Send Letter 474C with the fill-in: We're returning your payment of $50.00 submitted with the Form 8606, Nondeductible IRAs, because the penalty isn’t currently being assessed.

    2. Input TC 290 .00 BS 05 RC 016.

      Note:

      The TC 290 .00 releases the payment for refund.

3.11.6.16.17 (01-02-2024)

Prisoner Returns

  1. IDRS CC FTBOL definer P indicates whether a taxpayer is or has been incarcerated (prisoner) and the release date if appropriate. CC FTBOL may not always pick up that a claim is from a prisoner. Other indications of a prisoner return are:

    • TC 971 AC 123 with one of the following MISC field descriptions indicates a full-year prisoner:
      – 1040X FYP Both
      – 1040X FYP Primary
      – 1040X FYP Secondary

    • Marking on envelope that indicates prisoner mail

    • PRI written on claim or Form 1040, line 1.

    • Form W-2 indicates wages earned in prison or the address indicates a prison or other correctional facility

    • Address on return or envelope identifies a prisoner

    • Address on 1098-T identifies a prisoner or a prison or other correctional facility

  2. A person is considered a full year prisoner if CC FTBOLP indicates the person was incarcerated as follows:

    • Incarcerated on or before ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, or

    • Incarcerated on or before ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, or

    • Incarcerated on or before ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. If a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡. Researching for a Date of Release (DOR) isn't necessary. This includes married filing jointly returns.

  4. If a full-year prisoner claims the Earned Income Tax Credit, Additional Child Tax Credit when claiming one or two children, Form 8863, Education Credits, or if income earned while incarcerated is used to qualify for a credit, send a Letter 916C, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP) with the fill-in: Our records indicate that you're a prisoner and therefore don't qualify for certain credits.

  5. If taxpayer isn't a full-year prisoner and there's no indication they were paid for work while incarcerated, follow table below.

    If ... Then ...
    IRPTR data is available for the year of the tax return and the return verifies Continue processing claim.
    IRPTR data isn't available for the tax year of the return or unable to verify wages Input a TC 290 .00 and send Letter 916C, Correspondence for No Consideration of a Claim (Letter 916C and Letter 916SP), using fill-in: We can't verify your claim for wages or withholding. Please verify your information.

    Reminder:

    On a married filing jointly return verify CC IRPTR information for both spouses.

3.11.6.16.18 (01-02-2024)

Exam Soft Notices - CP 85A, CP 85B, CP 85C, CP 87A, CP 87B, CP 87C, and CP 87D

  1. Exam currently has two Soft Notices; CP 85 based on rules concerning the Earned Income Tax Credit (EITC) and CP 87 based on rules that apply when two or more taxpayers claim the same individual for the EITC or an exemption under IRC 151. These notices inform the taxpayer that they’ve claimed one of the various tax benefits for a qualifying child, exemption, and filing status. When one of these notices is attached to an amended return, process the case following normal procedures.

    Note:

    A TC 971 AC 138 generates when one of the Exam soft notices listed below is generated.

    • CP 85A, Exam EIC Soft Notice - Please Help Us Confirm Your Filing Status. Taxpayer claimed Head of Household filing status and may be married.

    • CP 85B, Exam EIC Soft Notice - Please Help Us To Confirm Your Qualifying Child. Taxpayer claimed a qualifying child for EITC that may not be correct.

    • CP 85C, Exam EIC Soft Notice - Please Help Us Confirm Income You Reported on Schedule C. Taxpayer filed a Schedule C with little or no expenses and may not have a business.

    • CP 87A, We Need to Verify Your Dependents or Qualifying Child. Taxpayer claimed an exemption and/or qualifying child for EITC that is duplicated on another return.

    • CP 87B, Exam DUPE TIN Notice - Please Help Us Confirm You Can Claim Yourself. Taxpayer claimed an exemption for themselves, and another taxpayer also claimed the exemption.

    • CP 87C, We Need to Verify Your Dependents. Taxpayer claimed an exemption that is claimed on another return. The exemption claimed is over the age of 23 and filed a tax return reporting more than the exemption amount in gross income.

    • CP 87D, We Need to Verify Your Dependents. Taxpayer claimed an exemption for self and is also claimed on a joint return.

3.11.6.16.19 (01-02-2024)

Taxpayer Advocate Service (TAS) Cases

  1. The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For more information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights.

  2. Review all attachments for taxpayer notations and correspondence to determine whether the taxpayer meets TAS case criteria per IRM 13.1.7.3, TAS Case Criteria, or requests TAS assistance. TAS criteria is defined as any of the following:

    • Taxpayer is experiencing economic harm or is about to suffer economic harm.

    • The taxpayer is facing an immediate threat of adverse action.

    • The taxpayer will incur significant costs if relief isn't granted (including fees for professional representation).

    • The taxpayer will suffer irreparable injury to, or long-term adverse impact if relief isn't granted.

    • The taxpayer has experienced a delay of more than 30 calendar days to resolve a tax account problem.

    • The taxpayer has not received a response or resolution to their problem or inquiry by the date promised.

    • A system(s) or procedure(s) has either failed to operate as intended or failed to resolve the taxpayer’s problem or dispute within the IRS.

  3. Don't send original returns or amended returns to TAS.

  4. Follow the table below when a case is open to TAS. A case open to TAS can be identified by a control category of "ATAO" or the assigned to employee IDRS number begins with "63" .

    If processing a case that ... Then ...
    Doesn't meet SP criteria. Route the case per IRM 3.11.6.7, Sorting, Routing, and Priority Screening.
    Meets SP criteria. Process the case following normal procedures.

    Reminder:

    If inputting an adjustment, place the "ATAO" case in "B" status and then return it to its original status once you have completed the adjustment.

  5. When processing a case and the taxpayer requests to be referred to TAS or the taxpayer meets the above criteria:

    If a Taxpayer... And ... Then ...
    Sends a Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order) No other documentation is attached Take the following steps:

    1. Print the Form 911 to PDF.

    2. E-mail the Form 911 PDF as an attachment to TAS based on your site.

      • ≡ ≡ ≡

      • ≡ ≡ ≡ ≡

      • ≡ ≡ ≡


      • Memphis- Follow instructions for AUSC.

    Sends a Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order) An original return or Form 1040-X is attached Take the following steps:

    1. Print the Form 911 to PDF.

    2. E-mail the Form 911 PDF as an attachment to TAS based on your site:

      • ≡ ≡ ≡

      • ≡ ≡ ≡ ≡ ≡

      • ≡ ≡ ≡ ≡


      • Memphis- Follow instructions for AUSC.

    3. Continue processing the case as normal.
    Sends correspondence meeting TAS criteria or requests TAS assistance No other documentation is attached Take the following steps:

    1. Print the correspondence to PDF.

    2. E-mail the correspondence PDF as an attachment to TAS based on your site.

      • ≡ ≡ ≡ ≡

      • ≡ ≡ ≡ ≡ ≡

      • ≡ ≡ ≡


      • Memphis- Follow instructions for AUSC.

    Sends correspondence meeting TAS criteria or requests TAS assistance An original return or Form 1040-X is attached Perform the following steps:

    1. Print the correspondence to PDF.

    2. E-mail the correspondence PDF as an attachment to TAS based on your site.

      • ≡ ≡ ≡ ≡

      • ≡ ≡ ≡ ≡ ≡

      • ≡ ≡ ≡ ≡


      • Memphis- Follow instructions for AUSC.

    3. Continue processing the return as normal.
    Provides an explanation on the amended return that indicates TAS assistance is being requested
    OR
    The request meets TAS criteria    		 Form 911 or correspondence isn't attached

    1. Perform the following steps:

      1. Complete sections I, II, and III of Form 911. The Form 911 must state the taxpayer’s problem and the relief requested.

      2. Print Form 911 to PDF.

      3. E-mail the Form 911 PDF as an attachment to TAS based on your site.

        • ≡ ≡ ≡ ≡ ≡

        • ≡ ≡ ≡ ≡

        • ≡ ≡


        • Memphis- Follow instructions for AUSC.


      Note: If a Form 2848, Power of Attorney and Declaration of Representative, is attached to the Form 1040-X, notate in Section II of Form 911"2848 to CAF."

    2. Continue processing the return as normal.

3.11.6.16.20 (01-09-2023)

Claims Returned from Other Areas

  1. Claims sent to another area may be returned for processing.

  2. Determine if the case requires:

    • Routing to the next highest priority. Circle out previous working trails.

    • Additional research.

    • Input the adjustment (the return has been cleared from the area it was routed).

  3. If an adjustment is input, add "Adjusted per (name of area)" in the remarks.

  4. Cases returned from another area for processing may not meet SP criteria. If so, send the case to AM.

3.11.6.16.21 (01-02-2024)

Loose Correspondence and Documents

  1. When associating correspondence or loose documents, those that became detached in error, follow the table.

    If ... Then ...
    The CII image for the case is a loose form(s).

    Example:

    The CII image on the case doesn't contain an amended return and is a Form W-2.

    1. Send Letter 178C with the fill-in: Please include (form/schedule)when submitting your original return or your amended return.

    2. Close the case.
    If the image is other than a loose form or schedule (e.g., a driver’s license) and an amended return isn't found.

    1. Input a case note describing what the image is and indicate no amended return located.
      Example: Copy of driver’s license. No amended return located.

    2. Close the case.

3.11.6.16.22 (10-02-2023)

Classified Waste

  1. When the IRM instructions say to treat as classified waste, follow the table:

    If ... And ... Then ...
    Working an amended return There isn’t a -R freeze present Take the following action:

    1. Input "CW" as a case note.

    2. Input a TC 290 for .00.
    Working an amended return There is a -R freeze present and the module is in a credit balance Take the following action:

    1. Input "CW" as a case note.

    2. Input a TC 290 for .00 and include HC 1.
    If working a CP notice There isn’t a -R freeze present Take the following action:

    1. Input "CW" as a case note.

    2. Input a TC 290 for .00.
    If working a CP notice There is a -R freeze present and the module is in a credit balance Take the following action:

    1. Input "CW" as a case note.

    2. Input a TC 290 for .00 and include HC 1.

3.11.6.17 (01-02-2024)

Unpostable Conditions

  1. An unpostable condition is created when a transaction can't post (update) to master file due to an unprocessable condition. The most common causes of an unpostable condition are:

    1. Reducing an amount below zero

    2. Removing an amount that didn't previously exist

    3. Adjusting an account without a posted TC 150

    4. Not using a priority code when required

  2. A transaction which can't post to master file creates an open unpostable case on IDRS. The open control base is in "A" status with category NLUN which represents the unpostable condition and then assigned to the tax examiner who input the unpostable condition.

  3. See Document 6209, IRS Processing Codes and Information, or IRM 3.12.179, Individual Master File (IMF) Unpostable Resolution, for a more detailed explanation.

3.11.6.17.1 (01-09-2023)

CII Case Unpostable Condition Resolution

  1. When an unpostable condition occurs, a Charge-Out sheet (Form 4251) is generated and contains an Unpostable Code (UPC) to identify the condition that caused the transaction to unpost.

    Note:

    If the Charge-Out sheet shows the ASED indicating an imminent statute date (within 90 days) route the case to the Statute Unit for quick assessment.

  2. Retrieve the closed CII case from archive.

  3. Determine the reason for the unpostable based on the "UPC" and/or "TC-S" code on the Charge-Out sheet, IDRS, and/or the return itself. Perform master file verification to determine if there are any other reasons the return may not be processable. The IAT CSI tool can be used to help in determining the unpostable reason. Input the unpostable code and unpostable reason code in the search field.

    Example:

    UPC 158 RC 1 would be entered as 1581.

    Reminder:

    If you have an unpostable on an account with a -L freeze verify that it wasn't the result of CC DDBCK Selected case. If it was the result of a CC DDBCK Selected case it must be sent as a CC DDBCK Selected case. See IRM 3.11.6.13.4, Command Code DDBCK (Dependent Database Check).

  4. Review CC ENMOD for unpostable conditions as this may have caused the adjustment on CC TXMOD to unpost.

    Note:

    If an unpostable condition exists in CC ENMOD close the open case when correcting the account.

  5. If there's a previous TC 160 or 161 (late filing penalty) on the account, send the case to AM.

  6. Use the following tables to take the appropriate corrective action. Be sure to adjust the correct amount and tax period.

    If ... IDRS Transaction ... Then ...
    The return meets AM criteria ACTON
    C02,TOAMTOADJ,C

    1. Input case note "AM to ADJ."

    2. Reassign the case to the appropriate queue.
    The return meets route out criteria other than AM ACTON
    C02,TO(destination),C

    1. Input case note "Case sent to (destination)."

    2. Reassign or reroute as appropriate.
    The error can be corrected ACTON
    C02,UNPCORR,C

    1. Input the Nullified Unpostable (NU) DLN as a case note. The NU DLN is the DLN of the unpostable TC 29X. The NU DLN should match the DLN on Form 4251.

      Example:

      Unpostable correction - NU 12345.

    2. Input the correct adjustment.
    The return was posted to the wrong SSN

    • Pull up TXMOD using the wrong SSN.

    • ACTON C02,WRONGSSN,C

    1. Input the Nullified Unpostable (NU) DLN as a case note. The NU DLN is the DLN of the unpostable TC 29X. The NU DLN should match the DLN on Form 4251.

      Example:

      Unpostable correction - NU 12345.

    2. Input the correct adjustment using the correct SSN.
    Someone else has changed your control base  

    1. Input a case: "Action was taken on my open control base by (employee IDRS number)- please take any required corrective action."

    2. Close your unpostable case (if not already closed).

    3. Send the case and charge-outs to the person who took action on your unpostable case.

    Exception:

    If the corrective adjustment has already been completed, close the CII case to MISC.
    Unable to determine the appropriate corrective action   See your lead.

3.11.6.18 (01-01-2021)

Lead Tax Examiners Only

  1. The following subsections are for Lead Tax Examiners when:

    • The IRM doesn't address all issues and additional research is needed.

    • Reversing an erroneous adjustment.

    • The time frames for CC TERUP and CC RVIEW have expired and CC NOREF must be used.

3.11.6.18.1 (01-01-2021)

For Lead Tax Examiners - Related IRMs and Resources

  1. Additional IRM references used when the IRM doesn't address all issues and additional research is needed:

    • IRM 2.4, IDRS Terminal Input

    • IRM 3.10.72, Receiving, Extracting, and Sorting

    • IRM 3.11.3, Individual Income Tax Returns

    • IRM 3.12.37.25, Correspondence

    • IRM 3.13.5, Individual Master File (IMF) Account Numbers

    • IRM 3.24.3, Individual Income Tax Returns

    • IRM 21, Customer Account Services

  2. The following are additional resources when the IRM doesn't address all issues and additional research is needed:

    • Campus Document Routing Guide and Maildex Listings

    • Employee Use Portal (EUP)

    • Integrated Automation Technologies (IAT)

    • IPUs and Prior IRM Revisions

    • Interactive Tax Law Assistant (ITLA)

    • SERP Feedback

    • Servicewide Notice Information Program (SNIP)

    • IRS Tax Publications

3.11.6.18.2 (02-17-2023)

For Lead Tax Examiners - Reversing an Erroneous Adjustment

  1. In the course of an internal quality review, occasions arise where erroneous adjustments are identified. If the tax adjustment can't be deleted, a reversal of the adjustment must be made by the production lead of the tax examiner that created the erroneous refund or other designated production lead.

  2. Don't input a corrective adjustment for changes to reason codes, received date, or amended claims date.

  3. If the erroneous adjustment generates an incorrect TC 846, the production lead of the tax examiner that created the erroneous refund or other designated production lead must initiate a Refund Intercept when possible using IDRS Command Code (CC) NOREF to stop the refund. See IRM 3.11.6.18.3, For Lead Tax Examiners - Refund Intercept CC NOREF, for time frames and time constraints.

    Exception:

    It isn't necessary to input CC NOREF if a TC 846 isn't generated or the TC 846 is for the correct amount, in these cases only input the corrective adjustment.

    Note:

    Correspond using a 324C letter if there's a missing signature, form/schedule/ or other issue. Suspend the return waiting for the reply. Input CC NOREF at the same time as issuing the correspondence, if necessary.

  4. Verify the erroneous adjustment didn't create an unpostable condition before reversing an adjustment. If an unpostable condition was created:

    1. Monitor the account until the adjustment unposts

    2. Hold the return until the Form 4251, Return Charge-Out, is received and match the return with the Form 4251

    3. Take the necessary corrective action on the account

  5. When an account requires a reversal adjustment:

    1. The following must be reviewed:
      - Adjusted Gross Income (AGI)
      - Dependents
      - Taxable income
      - Non-refundable credits
      - Other Taxes and Self-Employment Tax
      - Total Tax
      - Withholdings
      - Earned Income Credit
      - Refundable Credits
      - Direct deposit IRN amount

    2. Reverse all items adjusted. When inputting the reversal:
      - Include any necessary priority codes on the corrective adjustment. See IRM 3.11.6.15.9, Priority Codes (PC).
      - Use Hold Code 4

      Note:

      In certain cases, the Hold Code 4 won’t stop the refund and/or the notice, but it must be input on all reversals regardless.

  6. xMend has the capability of reversing an erroneous adjustment. The reversal button on the xMend tool isn't available until the tax adjustment is input and posted to the tax account. Once the adjustment posts the reversal button becomes active.

3.11.6.18.3 (01-09-2023)

For Lead Tax Examiners - Refund Intercept CC NOREF

  1. Use the IAT Stop Refund tool to prevent an erroneous refund from generating if the time frames for CC TERUP and CC RVIEW have expired. The IAT Stop Refund tool uses CC NOREF to stop a refund.

    Caution:

    If a TC 846, in the amount of the erroneous refund, has posted to the module after the erroneous TC 29X adjustment, the refund record has already been sent to Financial Management Services (FMS), and the refund can't be stopped.

  2. CC TERUP and CC RVIEW must be used if available:

    1. CC TERUP can be used to TERUP the adjustment on the day of input, but it must:
      - Be input by the TE that input the adjustment
      - Be input before 5:00 PM CST on the day the adjustment was input

      Note:

      If the erroneous adjustment was input after 5:00 PM CST, CC TERUP may be used until 5:00 PM CST the next day.

    2. CC Review can only be used after the time frame for CC TERUP has expired
      - CC Review is only available for 2 days after the input of an adjustment

  3. CC NOREFP will resequence for 14 days for daily IMF accounts and, depending on the day of input, up to 20 days for weekly IMF accounts. Each day, CC NOREFP looks for a matching refund and, when a match is found, it’ll stop the refund.

    Note:

    If no match is found within these time frames, the CC NOREFP is dropped from IMF processing.

  4. Use the following table to determine if the IAT Stop Refund tool can be used to prevent an erroneous refund from generating. If the erroneous adjustment was input before 5:00 PM CST on:

    Day of Week: Use IAT Stop Refund tool before 9:00 PM CST on the following ... Transaction Posts to MF on the following ...
    Friday (Day 1) Thursday, week 1 (4 days after input) Friday, week 1 (5 days after input)
    Monday (Day 2) Thursday, week 1 (3 days after input) Friday, week 1 (4 days after input)
    Tuesday (Day 3) Thursday, week 2 (7 days after input) Friday, week 2 (8 days after input)
    Wednesday (Day 4) Thursday, week 2 (6 days after input) Friday, week 2 (7 days after input)
    Thursday (Day 5) Thursday, week 2 (5 days after input) Friday, week 2 (6 days after input)

    Example:

    If an adjustment is input on Friday, the IAT Stop Refund tool may be used after 5:00 PM CST on Tuesday and until 9:00 PM CST on Thursday.

    Caution:

    After 9:00 PM CST on Thursday the refund can no longer be stopped.

  5. To input the stop refund request, see the IAT Stop Refund tool:

    1. Select the "Stop Refund" radio button

    2. Cycle: Select the same posting cycle as the pending erroneous adjustment (PN TC 29X)

    3. Status: "M"

    4. Category: "RFDL"

    5. Originating Service Center Code: "AUSC" or "KCSC" or "OSC"

    6. Reason Code: "81- Refund Stop request"

  6. The controlling employee must monitor for the posting of a TC 841. TC 841 verifies the refund was stopped. If the TC 841:

    1. Posts to the module then close the "RFDL" control base and work the case per IRM instructions. Don't route based on -P freeze instructions.

    2. Doesn’t post within 6 cycles send the case to AM.