3.11.6  Data Processing (DP) Tax Adjustments

Manual Transmittal

November 13, 2013

Purpose

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

Material Changes

(1) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.11 change to dollar amounts on routing guide

(2) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.1.1 correct spelling

(3) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.1.2 Delete paragraph 1

(4) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.1.2.1 Add note on case controlled in error

(5) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.1.2.2 clarify form numbers used

(6) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.1.2.4 Add correct form number

(7) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.1.3 add instructions on associating cases with files

(8) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.2.4 Correct year to current processing year

(9) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.3.1 examples of capital loss carryforward

(10) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.3.2 Clarify TC 971 input and history items

(11) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.3.3 clarify when income cannot be verified

(12) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.3.4 correct IRM link

(13) IPU 12U1787 issued 11-01-2012 IRM 3.11.6.3.12 Rewrite of ITIN instructions

(14) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.4 correct IRM links to Cat A criteria and Cat A criteria for FTHBC

(15) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.14 clarify routing instructions to ASFR (2)

(16) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.17.2 (2b) Add paragraph designation to letter

(17) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.17.3 (2) update the dates of disaster claims

(18) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.17.5 (6 )change to paragraph 8 in the 324C letter

(19) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.18 (3) add paragraphs to the 324C letter

(20) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.19 (5) Routing instructions on TC 160

(21) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.21(2) Correct hyperlink

(22) IPU 12U1792 issued 11-02-2012 IRM 3.11.6.3.22.1 (g) change category to activity and add (h) routing instructions to TAS

(23) IPU 12U1820 issued 11-09-2012 IRM 3.11.6.4 Insert OUO signs

(24) IPU 12U1820 issued 11-09-2012 IRM 3.11.6.4.1 Add time frame to suspending cases with no TC 150s

(25) IPU 12U1820 issued 11-09-2012 IRM 3.11.6.4.2 Add signature/jurat instructions and move para 10 to 1, insert OUO

(26) IPU 12U1820 issued 11-09-2012 IRM 3.11.6.4.3 Update fax numbers for CAF Units in 2013

(27) IPU 12U1820 issued 11-09-2012 IRM 3.11.6.4.5.1(3)(a) Delete Process as normal

(28) IPU 12U1820 issued 11-09-2012 IRM Exhibit 3.11.6-5 Delete reference to Philadelphia Submission Processing and change title to International Returns

(29) IPU 12U1820 issued 11-09-2012 IRM 3.11.6.3.11 delete reference to Philadelphia Submission Processing and change exhibit link to Exhibit 3.11.6-5

(30) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.4.5.4 rearrange exceptions

(31) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.4.5.5 (6) strike part of the instruction after RC 012

(32) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.6.1 delete reference to a figure and position note under para (4) table to use posting delay code

(33) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.11 remove instruction and replace with reference to IRM 3.11.6.3.16 for Form 8379 disposition

(34) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.11 remove instruction and replace with reference to IRM 3.11.6.3.5 for disposition of Form 14039

(35) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.6.3 add alpha list and instructions on what part of the entity needs to be present

(36) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.6.4 (2d) editorial change and (3d) insert OUO information

(37) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.6.8 - R Freeze Definition

(38) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.6.9.1 update routing instructions when a TC 160 is present

(39) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8 Strike appropriate reason codes on 2nd adjustment

(40) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.1.3.1 update paragraphs used

(41) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.1.4 Update box numbers on Form 8009-A and change paragraphs

(42) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.1.5 Clarify when reason code 30 is utilized

(43) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.2 Change directions in paragraphs (3), (8) and (10)

(44) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.3 Insert 2012 information and update phase out amounts and years

(45) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.5 Add OUO information and reword note under paragraph (2)

(46) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.5.6 Change paragraphs used and add fill-in paragraph

(47) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.6.2(3) change box number on Form 8009-A

(48) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.6.3 Add note (2) regarding non-business energy credit, delete some credits and update tax years for various credits

(49) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.6.6 Rearrange education credit chart, add info for TY 2012, para (9)(11) correct box numbers and para numbers, para(12) reinforce credit duplication

(50) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.6.7(2) change paragraph numbers in letter

(51) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.6.8 Add 2012 info to table and delete statute years and restrict info in para (5)

(52) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.6.9 correct spelling on table

(53) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.6.10(3) restrict OUO information

(54) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.7 change line number in note

(55) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.7.2 Change wording in para (1) and para letter in table

(56) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.7.2.1 Change instruction on RC 030

(57) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.9.1 add note regarding error message

(58) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.11.1 Insert 2012 credit and maximum

(59) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.13 Delete RRC from list

(60) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.13.1 add RC 057

(61) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.13.5 change form to schedule

(62) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.13.6.1 correct link

(63) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.13.6.2 correct link

(64) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.8.13.7 correct links

(65) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.9.1 Add note regarding suspending cases and delete unnecessary directions

(66) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.9.2 Update paragraph numbers

(67) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.9.4 and IRM 3.11.6.9.10 change paragraphs in letters

(68) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.10 paragraph change paragraphs throughout chart and OUO information restricted

(69) IPU 12U1895 issued 11-30-2012 IRM 3.11.6.9.3 revise Exception

(70) IPU 13U0163 issued 01-18-2013 IRM 3.11.6.1.2.1 add instruction to close to MISC

(71) IPU 13U0163 issued 01-18-2013 IRM 3.11.6.2.1 Change Command Code to IMFOLT

(72) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.3(4) correct IRM link

(73) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.3.1(5) change paragraph designations

(74) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.3.4 reorganize table layout

(75) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.3.10 due to renumbering, now IRM 3.11.6.3.11 update the Frivolous Claim exhibit number

(76) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.3.12 add If/Then table when ITIN Reject is stamped in the secondary's SSN box

(77) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.3.21 correct hyper links to entity IRM and correspondence procedures in IRM 3.11.6

(78) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.3.22.1 add OUO signs to IDRS numbers

(79) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.4.2 para (7)c and (8)c correct hyperlink, correct spelling and put in space

(80) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.6.4 rearrange paragraphs for clarity

(81) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.6.8 delete double instruction for TC 582 and Change E- freeze to follow not TC 150 instructions

(82) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.3 editorial changes in note under paragraph 5

(83) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.6.6 add instructions for the new Form 8863 for TY 2012

(84) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.7.2.1 update hyperlink

(85) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.9 instruction to use RC 051 when adjusting withholding

(86) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.9.1 direction not to return claim to taxpayer for excess social security claim if other issues present

(87) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.11.1 add investment income levels and instruction on disallowing claim

(88) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.12 combining paragraphs for continuity

(89) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.13.5 change paragraphs for 2012 additional child tax credit

(90) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.13.6 clarify where accelerated recapture is reported

(91) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.8.13.7 delete old hyperlink info

(92) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.9.1 clarify and add paragraph to letter

(93) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.10 adjustments to the terminology on the correspondence chart

(94) IPU 13U0266 issued 02-01-2013 IRM 3.11.6.11.1 correct hyperlink

(95) IPU 13U0349 issued 02-14-2013 IRM 3.11.6.1.2.1 - Clarify IDRS controlling instructions and announce the roll out of Where's My Amended Return (WMAR)

(96) IPU 13U0349 issued 02-14-2013 IRM 3.11.6.3.4.2 and IRM 3.11.6.6.7.3 - Clarify requirement for inputting Priority Code 1

(97) IPU 13U0349 issued 02-14-2013 IRM 3.11.6.8.6.3 - Update Residential Energy Credit

(98) IPU 13U0349 issued 02-14-2013 IRM 3.11.6.8.6.1, IRM 3.11.6.8.13.5 and IRM 3.11.6.11.1 - Added the link to Category A criteria for child tax credit/additional child tax credit

(99) IPU 13U0394 issued 02-21-2013 IRM 3.11.6.8.14 Update credit elect instructions for new work being assumed

(100) IPU 13U0394 issued 02-21-2013 Exhibit 3.11.6-3 Form 1040 Reference Guide change line 45 to RC 045 for new work being assumed

(101) IPU 13U0394 issued 02-21-2013 Exhibit 3.11.6-6 IDRS Command Codes change to Scheme Development

(102) IPU 13U0394 issued 02-21-2013 IRM 3.11.6.8.3.1.1 Exam Soft Notices update for new work being assumed

(103) IPU 13U0394 issued 02-21-2013 IRM 3.11.6.8.5 Update instructions to include processing of the Form 6251 Alternative Minimum Tax

(104) IPU 13U0394 issued 02-21-2013 IRM 3.11.6.8.10.1 Update instructions to include processing of the Estimated Tax Penalty Form 2210

(105) IPU 13U0394 issued 02-21-2013 IRM 3.11.6.8.12 Update 1040X routing guide to account for the processing of Form 2210, Form 6151, Exam Soft Notices and Credit Elect

(106) IPU 13U0394 issued 02-21-2013 IRM 3.11.6.8.11 correct years to current

(107) IPU 13U0479 issued 03-06-2013 Exhibit 3.11.6-3 Form 1040 Reference Guide changes to line number and topics

(108) IPU 13U0479 issued 03-06-2013 IRM 3.11.6.8.10.1 changes to estimated tax penalty procedures

(109) IPU 13U0479 issued 03-06-2013 IRM 3.11.6.8.14 Credit Elect changes in procedures

(110) IPU 13U0530 issued 03-13-2013 IRM 3.11.6.3.12(4) and (5) Change instruction on routing ITIN rejects

(111) IPU 13U0547 issued 03-15-2013 IRM 3.11.6.8.10.1 Estimated Tax Penalty adding further instructions and direction on Form 2210

(112) IPU 13U0547 issued 03-15-2013 IRM 3.11.6.8.14 Credit Elect adding instructions and procedures for credit elect and credit transfers

(113) IPU 13U0611 issued 03-26-2013 IRM 3.11.6.1.2.1 Clarify correcting control base

(114) IPU 13U0611 issued 03-26-2013 IRM 3.11.6.6.1(6) Delete TC 971 instruction

(115) IPU 13U0611 issued 03-26-2013 IRM 3.11.6.8.2(8) correct standard deduction amount

(116) IPU 13U0611 issued 03-26-2013 IRM 3.11.6.11.1 Clarify CP 08 and Cat A criteria. Add spaces between words

(117) IPU 13U0611 issued 03-26-2013 Exhibit 3.11.6-3 change line 15a to IRA Distribution

(118) IPU 13U0687 issued 04-04-2013 IRM 3.11.6.8.14(2) (a) and (b) change tax year to 201X and para (3) delete Go to Refund Overpayment (BP-1) etc

(119) IPU 13U0687 issued 04-04-2013 IRM 3.11.6.12 Add new Form 14157-A to routing with current address

(120) IPU 13U0687 issued 04-04-2013 Exhibit 3.11.6-3 Change line 49 to RC 035

(121) IPU 13U0687 issued 04-04-2013 IRM 3.11.6.8.7.1(3) add direction to work withholding with distribution codes other than 1 or 7

(122) IPU 13U0722 issued 04-10-2013 IRM 3.11.6.8.14(2) Clarification of what types of credit transfers can be made and using hold codes

(123) IPU 13U0722 issued 04-10-2013 IRM 3.11.6.8.10.1(3) Clarification of penalty reason codes, reason code positions and link to Penalty Appeals Coordinators

(124) IPU 13U0722 issued 04-10-2013 IRM 3.11.6.1.2.1(4)(c) Add instruction to input the TC 971 action code 120 on an uncontrolled case

(125) IPU 13U0722 issued 04-10-2013 IRM 3.11.6.11.3.1 Update investment income for EIC

(126) IPU 13U0722 issued 04-10-2013 IRM 3.11.6.6.4.1(7) Add note clarifying sequence numbers on 2 separate adjustments

(127) IPU 13U0722 issued 04-10-2013 IRM 3.11.6.12 Update routing guide for Form 2210

(128) IPU 13U0764 issued 04-18-2013 IRM 3.11.6.6.4(4) Correct reference to read correctly when the taxpayer's column A matches the IRS column A

(129) IPU 13U0794 issued 04-24-2013 IRM 3.11.6.8.6.10.1 Update Form 8936 Electric Vehicle credit processing instructions

(130) IPU 13U0794 issued 04-24-2013 IRM 3.11.6.3.3 Change AMTAP to IVO and provide information for ≡ ≡ ≡ ≡ ≡ ≡ ≡

(131) IPU 13U0794 issued 04-24-2013 IRM 3.11.6.3.4.2 change AMTAP to IVO

(132) IPU 13U0794 issued 04-24-2013 IRM 3.11.6.12 change AMTAP to IVO under withholding and W-2 on guide

(133) IPU 13U0840 issued 04-30-2013 IRM 3.11.6.3.5 Update procedures for 1040X Streamline Process (Exam initiative)

(134) IPU 13U0840 issued 04-30-2013 IRM 3.11.6.8.14 (2) (b) update letter and fill-in paragraph for credit transfer

(135) IPU 13U0840 issued 04-30-2013 IRM 3.11.6.3.7 Delete paragraph (5) reference to TC 160,161 and 162 insert space in note under para (1)

(136) IPU 13U0840 issued 04-30-2013 IRM 3.11.6.10 update correspondence chart insert note describing the initiative not to enclose forms in taxpayer correspondence, but to direct them to the IRS website and/or forms and publications contact number for downloading or ordering forms

(137) IPU 13U0935 issued 05-16-2013 IRM 3.11.6.3.4 Add posting delay code on TC 470 input

(138) IPU 13U0935 issued 05-16-2013 IRM 3.11.6.3.4.2 Add link to Exam Employee Group Code listing on SERP under Who/Where

(139) IPU 13U0935 issued 05-16-2013 IRM 3.11.6.6.8 delete reference to Form 2210 and routing

(140) IPU 13U0935 issued 05-16-2013 IRM 3.11.6.8.10.1 Add Penalty Reason Code If/Then chart

(141) IPU 13U0935 issued 05-16-2013 IRM 3.11.6.8.14 Clarify instructions when taxpayer wants credit transfer to pay off tax liability

(142) IPU 13U0935 issued 05-16-2013 IRM 3.11.6.10 Change letter 324C paragraph and add fill-in so correspondence can be sent to taxpayer without having to enclosed blank forms

(143) IPU 13U0935 issued 05-16-2013 IRM 3.11.6.12 Delete routing instructions on FICA claims major league baseball

(144) IPU 13U0942 issued 05-17-2013 IRM 3.11.6.6.8 correct hyperlink and IRM 3.11.6.3.2(10) correct hyperlink

(145) IPU 13U0985 issued 05-23-2013 IRM 3.11.6.4.5.1(5) add instruction if the Form 1040 is a prior year

(146) IPU 13U0985 issued 05-23-2013 IRM 3.11.6.4.5.4 delete note regarding enclosing a Form 1040X

(147) IPU 13U0985 issued 05-23-2013 IRM 3.11.6.3.4 add instruction on revoking ITIN when referring to exam and dependent on account now has a valid SSN

(148) IPU 13U0985 issued 05-23-2013 IRM 3.11.6.8.14 Add instruction to input TC 290 .00 to file case after credit transfer

(149) IPU 13U0985 issued 05-23-2013 IRM 3.11.6.10 and various IRM 3.11.6 concerning the letter 324C changes to paragraphs and fill-ins

(150) IPU 13U1037 issued 06-04-2013 IRM 3.11.6.3.2 Clarify RSED, received dates and RFSCDT on IF/Then table. Moving reference to SFR in a different position

(151) IPU 13U1037 issued 06-04-2013 IRM 3.11.6.6.1(4) Clarify first name changes and clarification of when not to update entity

(152) IPU 13U1037 issued 06-04-2013 IRM 3.11.6.8.10.1(8) Clarify taxpayer figures on estimated tax penalty

(153) IPU 13U1114 issued 06-18-2013 IRM 3.11.6.8.10.1 - Corrected blocking series to first adjustment when two adjustments are required

(154) IPU 13U1114 issued 06-18-2013 IRM 3.11.6.11 - Delete reference to obsolete forms dealing with CP notices and identify Form 8009-A CP notice section

(155) IPU 13U1114 issued 06-18-2013 IRM 3.11.6.11.2 - clarified eligibility requirements for CP 09s

(156) IPU 13U1296 issued 07-30-2013 IRM 3.11.6.7.2.2(5) clarify response screen when changing or deleting a record on DUPED

(157) IPU 13U1296 issued 07-30-2013 IRM 3.11.6.6.1.1 update Caution regarding DOMA claims

(158) IPU 13U1296 issued 07-30-2013 IRM 3.11.6.12 clarify the routing on Form 3949-A and Form 3949. Update routing address on Form 14157 and insert Form numbers for W-7 and W-7 A

(159) IPU 13U1296 issued 07-30-2013 IRM 3.11.6.8.10.1(1) Clarify when Form 2210 was needed and provide penalty reason code when Form 2210 is not provided

(160) IPU 13U1296 issued 07-30-2013 IRM 3.11.6.8.3(7) and (8) insert ITIN and ATIN form numbers

(161) IPU 13U1296 issued 07-30-2013 IRM 3.11.6.8.14 add instruction credit elect reversals

(162) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.1 Update TC 971 action code to 120

(163) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.1.1(12) Clarify instructions when a control base is closed in error

(164) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.1.2.1 Clarify that CPs and Form W-7 returns do not have to be controlled and correcting other case control errors

(165) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.1.4 List correspondence IRM

(166) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.2 Add amended to title

(167) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.2.1 Clarify on ITIN, IRSN, merging and resequencing of accounts, etc.

(168) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.2.2 Change to Box 10 on Form 8009-A

(169) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.2.4 Add if the IRS received date is obviously in error

(170) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.3(1) Strike unnecessary words and reference to FTHBC

(171) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.3.1 Clarify and rearrange the carryback explanation and section

(172) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.3.3(7) Add link to when EIC is involved 3.11.6.8.12

(173) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.3.4 Clarify filing status instructions on partial adjustments

(174) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.3.6 Clarify and rearrange ID Theft section

(175) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.3.7 Format AUR table

(176) IPU 13U1322 issued 08-06-2013 IRM 3.11.6.3.8 Replace Adjustment Function Criteria with Accounts Management and CIS and directions on an open CIS base

(177) IPU 13U1329 issued 08-07-2013 IRM 3.11.6.3.6 strike Affidavit from the section title

(178) IPU 13U1329 issued 08-07-2013 IRM 3.11.6.4.5.3 rearrange and change content

(179) IPU 13U1329 issued 08-07-2013 IRM 3.11.6.3.15 add T Freeze instructions

(180) IPU 13U1329 issued 08-07-2013 IRM 3.11.6.3.18.5 delete Midwestern disaster

(181) IPU 13U1329 issued 08-07-2013 IRM 3.11.6.6.7.3 Update priority code tables

(182) IPU 13U1329 issued 08-07-2013 IRM 3.11.6.6.8 change freeze code directions

(183) IPU 13U1332 issued 08-08-2013 IRM 3.11.6.8.11(4) provide instances when EITC cases are routed to CIS/AM

(184) IPU 13U1332 issued 08-08-2013 IRM 3.11.6.6.7.3 and IRM 3.11.6.6.8 correct link

(185) IPU 13U1332 issued 08-08-2013 IRM 3.11.6.3.2 Clarify instructions and rearranging statute direction and information

(186) IPU 13U1336 issued 08-09-2013 IRM 3.11.6.3.2 Rearrange, clarify and restructure IF/THEN table

(187) IPU 13U1336 issued 08-09-2013 IRM 3.11.6.8.6.2 Earned income clarification for Form 2441

(188) IPU 13U1340 issued 08-12-2013 IRM 3.11.6.3.2 Add direction on inputting override code

(189) IPU 13U1340 issued 08-12-2013 IRM 3.11.6.8.6.6 Clarify and update Education Credits

(190) IPU 13U1340 issued 08-12-2013 IRM 3.11.6.8.6.10.1 rearrange Form 8936 paragraphs and clarify processing instructions

(191) IPU 13U1340 issued 08-12-2013 IRM 3.11.6.8.8(3) rearrange table

(192) IPU 13U1340 issued 08-12-2013 IRM 3.11.6.8.10.1 update, clarify and rearranged estimated tax penalty section

(193) IPU 13U1346 issued 08-13-2013 IRM 3.11.6.8.6.10.1 correct hyperlink to Alert 13A0258

(194) IPU 13U1346 issued 08-13-2013 IRM 3.11.6.8.11.2 rearrange table

(195) IPU 13U1346 issued 08-13-2013 IRM 3.11.6.8.13.5 Update making work pay section

(196) IPU 13U1346 issued 08-13-2013 IRM 3.11.6.9.4, IRM 3.11.6.9.5 and IRM 3.11.6.9.10 update fill in paragraphs and various letter instructions

(197) IPU 13U1350 issued 08-15-2013 IRM 3.11.6.3.3(4) correct note regarding IRPTR data

(198) IPU 13U1350 issued 08-15-2013 IRM 3.11.6.11, 3.11.6.11.1, IRM 3.11.6.11.2, IRM 3.11.6.11.3.1 and IRM 3.11.6.11.4 moved to new sections.

(199) IPU 13U1350 issued 08-15-2013 IRM 3.11.6.8.10.1 rearrange, update and clarify estimated tax penalty procedures.

(200) IPU 13U1358 issued 08-16-2013 IRM 3.11.6.8.10.1 delete paragraph (3) direction on routing Cat A

(201) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.3.17 provide directions on Injured Spouse when it meets SP criteria, but is incomplete

(202) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.4.5.1 moved to new section IRM 3.11.6.5.3

(203) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.4.5.4 moved to new section IRM 3.11.6.5.4

(204) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.4.5.5 moved to new section IRM 3.11.6.5.5

(205) IPU 13U1368 issued 08-19-2013 IRM 3.11.5.4.5 moved to new section IRM 3.11.6.5.6

(206) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.4.2 moved to new section IRM 3.11.6.5.7

(207) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.4.3 moved to new section IRM 3.11.6.5.8

(208) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.4.5.2 moved to new section IRM 3.11.6.5.9

(209) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.9.4(3) delete note concerning BS

(210) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.9.1 clarify direction on routing when a taxpayer replies after the case is closed

(211) IPU 13U1368 issued 08-19-2013 IRM 3.11.6.6.5.1 add section Math Error Response

(212) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.3 - Delete incorrect link

(213) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.3.2 - Correct links and added direction on statute stamp

(214) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.3.4 - Clarify procedures for routing to Exam

(215) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.3.4.1 - Rearrange and clarify Category A procedures

(216) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.3.7 - Reinforce procedures on AUR referrals

(217) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.3.17 - Add details for referring Injured Spouse claims with 1040X involvement

(218) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.3.22 - Clarify Reminder

(219) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.5.1 - Correct links in 6(a), (b) and 7 (a), (b)

(220) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.5.3 - Add reminder on Form 6114

(221) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.5.5 - Delete para (8)

(222) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.5.6 - Insert section title

(223) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.6.1 - Delete blank notes and clarified P.O. box, city, and zip code

(224) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.6.3 - Correct rounding error verbiage

(225) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.3.20(4) - Delete blank note

(226) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.6.4 - editorial change

(227) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.6.8 - Add -G freeze to freeze codes

(228) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.2 and IRM 3.11.6.8.3 - Update the years on the std deduction and exemptions for 2013

(229) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.6.2 - Insert ditorial insert space between to and verify

(230) IPU 13U1465 issued 09-16-2013 Exhibit 3.11.6-1 - Correct links

(231) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.7.1 - editorial changes

(232) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.5 - delete para and note above it

(233) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.6.6 - update for 2013 on Education Credit

(234) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.7 - remove AEIC after 2010

(235) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.7.2.2 - input max social security income for 2013

(236) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.10.1(4) - add note under exception

(237) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.11 - add updates to EIC procedures

(238) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.13 - editorial change, remove blank bullet

(239) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.13.4.2(1)(a) - rearrange spaces

(240) IPU 13U1465 issued 09-16-2013 IRM 3.11.6.8.14 - add clarification on procedures on Credit Elect

(241) IPU 13U1472 issued 09-18-2013 IRM 3.11.6.3.2 Add clarification for the RFSCDT in the table paragraph (13)

(242) IPU 13U1472 issued 09-18-2013 IRM 3.11.6.3.4.2 rewrite section for Exam/-L claim processing

(243) IPU 13U1472 issued 09-18-2013 IRM 3.11.6.2.4(6) add W-7 instructions on using the amended claims date from Form 3471

(244) IPU 13U1472 issued 09-18-2013 IRM 3.11.6.3.13(6) Add for W-7 cases, enter the date from Form 3471, if attached, as the Amended Claims date

(245) IPU 13U1487 issued 09-19-2013 IRM 3.11.6.3.18 thru IRM 3.11.6.18.4 move to IRM 3.11.6.3.1 to IRM 3.11.6.3.1.4 respectively

(246) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.3.1.3 - Updated disaster dates

(247) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.3.3(12) box 5 - Incomplete response clarified

(248) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.3.4(7) - Guidance on when claims are returned From CI and IVO

(249) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.3.5(5) - Added line to 2nd table

(250) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.3.7 - More instructions on Identity Theft

(251) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.3.8 - Note added on AUR adjustment

(252) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.5.2 - Updated instructions no TC 150

(253) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.5.3 - Updated instructions on 1040 attached to Form 1040X

(254) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.5.4 - Updated instructions on Form 1040 no Form 1040X attached

(255) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.8.5.1(3) - Math Verify Instructions for AMT

(256) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.8.11.4 - Revised title and letter fill-in

(257) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.8.13.3.1 - Updated paragraph fill-in

(258) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.8.14 - Added new paragraphs and clarified superseding returns

(259) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.9.1(6) - Added 916C option

(260) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.9.2(3) - Added 916C option

(261) IPU 13U1498 issued 09-23-2013 IRM 3.11.6.9.9 - Added verbiage, correct assessment was not made

(262) IPU 13U1498 issued 09-23-2013 Exhibit 3.11.6-4 - Corrected hyperlink on FRP

(263) IPU 13U1498 issued 09-23-2013 Exhibit 3.11.6-6 Exhibit IDRS CC Function deleted

(264) IPU 13U1545 issued 10-22-2013 IRM 3.11.6.3.7(1) - Note change AMTAP to IVO

(265) IPU 13U1545 issued 10-22-2013 Exhibit 3.11.6-4 - Restrict Frivolous listing

(266) IPU 13U1545 issued 10-22-2013 IRM 3.11.6.3.3 - Correct link to Collection Function Cases

(267) IPU 13U1545 issued 10-22-2013 IRM 3.11.6.8.14 - Clarify procedures on making a credit transfer to a full paid module

Effect on Other Documents

IRM 3.11.6, Data Processing (DP) Tax Adjustments, dated October 16, 2012 (effective January 1, 2013), is superseded. This IRM incorporates the following IRM Procedural Updates (IPUs), issued between November 1, 2012 through September 19, 2013: 12U1787, 12U1792, 12U1820, 12U1895, 13U0163, 13U0266, 13U0349, 13U0394, 13U0479, 13U0530, 13U0547, 13U0611, 13U0687, 13U0722, 13U0764, 13U0794, 13U0840, 13U0935, 13U0942, 13U0985, 13U1037, 13U1114, 13U1296, 13U1322, 13U1329, 13U1332, 13U1336, 13U1340, 13U1346, 13U1350, 13U1358, 13U1368, 13U1465, 13U1472, 13U1487, 13U1498 and 13U1545.

Audience

Wage and Investment Submission Processing Tax Examiners

Effective Date

(01-01-2014)


Paul J. Mamo
Director, Submission Processing
Wage and Investment

3.11.6.1  (08-06-2013)
Submission Processing (SP) Returns and Document Analysis Overview

  1. Internal Revenue Manual (IRM) 3.11.6 covers Form 1040X, CP 08, 09 and CP 27 processing procedures for Integrated Data Retrieval System (IDRS) and Integrated Submission and Remittance Processing (ISRP) input by Submission Processing (SP).

  2. This section provides instructions for:

    • Form 1040X, Amended U.S. Individual Income Tax Return

    • Computer Paragraph (CP) 08, CP 09 and CP 27 Notices

  3. The following subsections cover:

    • General Information for Submission Processing Returns and Document Analysis Overview

    • Controlling of 1040X cases on IDRS and input of the TC 971 action code 120

    • Preliminary Review of Form 1040X

    • Sorting, Routing, and Priority Processing

    • Screening Criteria for Processable Return

    • Form1040X Processed through ISRP Input

    • Processing Form 1040X Using IDRS for Input of Adjustment

    • Command Codes DUPED and DDBCK

    • Specific Individual Master File (IMF) Adjustments

    • Correspondence Procedures

    • CP Notices

  4. References to the Integrated Automation Technologies (I.A.T) xClaim tool functionality are not intended to be exhaustive or complete. Refer to xClaim training and local procedures for more complete information about the functionality and use of this tool.

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

  6. The specific section instructions take precedence over any general instruction.

3.11.6.1.1  (08-06-2013)
General Form 1040X Information

  1. In tax year 2009 the IRS adopted a newly designed Form 1040X (Rev. January 2010). As a result the Service received both old and new amended forms to process. Beginning in tax year 2010 the IRS will return to a more traditional Form 1040X (Rev November 2010) that contains a 3 column format. To accommodate the different revisions this IRM is addressing the procedures for the old as well as the new direction.

  2. An individual taxpayer may file an Amended US Individual Income Tax Return to correct Forms 1040, 1040A, 1040EZ or a 1040-N. Taxpayers may add, delete, update, or change tax information reported on their original tax return or amounts previously adjusted by the IRS.

  3. When present on Form 1040X, Column A is used to report amounts originally claimed by the taxpayer, amounts adjusted by the IRS (math error on original return), or amounts adjusted from a previously filed Form 1040X for the same tax period.

  4. When present on Form 1040X, Column B, is used to report 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, of the Form 1040X or attached statement, and attach any schedule and/or form related to the change.

  5. The Correct Amount column of the Form 1040X, Column C, is used to show amended figures or to figure the amounts reported in Columns A and B when these columns are present:

    1. Adding increases in Column B to Column A.

    2. Subtracting decreases in Column B from Column A.

    3. No change, entering the amount from Column A.

  6. The operational instructions in this IRM will determine if the adjustment request can be made in Submission Processing or if it must be routed to another area or function. Returns which can be adjusted in Submission Processing (commonly referred to as "workable " ) are either input on-line using IDRS or sent to ISRP for input.

  7. The general sequence you will follow is:

    1. Determine if route out criteria is met.

    2. Determine if the claim is complete.

    3. Determine if the claim is allowable

    4. Determine if the claim is processable.

  8. If a taxpayer files an amended Form 1040 series, Individual Income Tax Return, in lieu of a Form 1040X, you must determine if it is an original, duplicate, or amended return. If an original return, route to Receipt and Control for processing under the correct Program Code. Refer to IRM 3.11.6.5.5 for duplicate or IRM 3.11.6.5.4" amended" procedures.

  9. Form 1040X and CP notices are to be processed within 12 calendar days from the IRS received date (day one) to the date the document is delivered to the CIS (Corresponding Imaging System) Unit (ending day) or input of a TC 29X. See IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates. During the peak period the 12 day time frame will be expanded to 20 days. Peak period is defined as March 1st through June 30th.

  10. Occasionally multiple Forms 1040/A/EZ/X are attached. For example:

    • Two or more returns from the same taxpayer are mailed in the same envelope

    • Two or more family members' returns are mailed by the tax preparer in the same envelope

    • Two or more unrelated returns are mailed by the tax preparer in the same envelope

      Note:

      Detach the returns leaving an action trail on each document, then sort, work or route the returns as appropriate.

      Exception:

      For transactions that require routing to another function, if two or more returns are for the same taxpayer keep all tax years together.

  11. The correspondence procedures throughout the IRM do not address every scenario. Use of Correspondex , available on Servicewide Electronic Research Program (SERP), is helpful in accommodating different scenarios that may occur. If unable to determine the correct correspondence procedure consult your manager or lead.

  12. Once a return that has been suspended is returned to be processed close any open controls you have to yourself before routing, corresponding, or inputting the adjustment.

    Caution:

    Do not close a control base open to an area other than Form 1040X. If a control base to another area is closed in error it must be reopened before taking the appropriate action.

  13. Do not input an adjustment on REQ54 or ENREQ for an account that will be routed or when returning the claim to the taxpayer unless otherwise instructed by a specific section.

3.11.6.1.1.1  (08-15-2013)
CP Notices

  1. The CP 08, You May Qualify for a Refund From the Additional Child Tax Credit, is generated from criteria on the original return. Taxpayers will be issued a CP 08, informing them of their potential eligibility to claim the Additional Child Tax Credit, when they:

    1. Compute an amount for the Child Tax Credit, have no total tax liability, and fail to use the remaining portion of the credit to claim the Additional Child Tax Credit, or

    2. Indicate eligibility for the Child Tax Credit (by checking the boxes on line 6c), do not claim the Child Tax Credit due to no tax before credits and do not claim the Additional Child Tax Credit.

  2. Beginning January 2012 certain CP notices mailed to taxpayers will contain 2D bar codes. Some of the notices will display the entire Social Security Number (SSN) while some will have the SSN masked (e.g. XXX-XX-1234). This will apply to CP 08, 09 and 27 notices. Hand held scanners will be available for reading the barcode. If the hand held scanner is unable to read the bar code Command Code (CC) TPIIP must be used to determine the SSN. For additional information on CC: TPIIP refer to IDRS Command Code Job Aid located on the Servicewide Electronic Research Program (SERP) under IRM Supplements.

    Note:

    Take care not to write, mark or stamp over the bar code as this could make it unreadable.

  3. Generally, a completed CP notice is considered an informal claim. However, if the taxpayer returns the CP notice indicating he/she is not eligible for the specific credit (no other issues involved), a reply is not necessary. Destroy as classified waste per local procedures. Form 1040X procedures are to be applied to CP 08, 09, and 27 notices, as they are considered a Form 1040X.

    Exception:

    If some of the children qualify for the credit but others do not then process the CP notice for the qualifying child(ren).

  4. If the taxpayer attached the CP 08, 09, or 27 notice to Form 1040X and there are additional issues, convert the credit to the attached Form 1040X and process the Form 1040X. "X" the CP notice and staple behind the Form 1040X.

  5. If the taxpayer attached the CP 08, 09, or 27 notice to Form 1040X and there are no additional issues, process the CP notice. "X" the Form 1040X and staple behind the CP notice.

  6. Taxpayers must return the completed and signed (both Primary and Secondary if FS2, Married Filing Joint) CP notice, if qualified. If the CP notice is incomplete, return to the taxpayer using the check boxes on the Form 8009-A pertaining to the CP notices.

  7. When sending a C letter do not include an amended claims date on the adjustment.

  8. If the pre-printed AGI and/or EI on a CP notice does not match IDRS use the AGI and EI from the Per Computer Column of CC RTVUE.

  9. If the taxpayer alters the address on a CP notice and an address change can be made per IRM 3.11.6.6.1 then use CC INCHG to update the taxpayer's address.

  10. If there is a previously posted adjustment on IDRS review the adjustment to determine if the CP notice issue has already been adjusted for, see IRM 3.11.6.4.5.5. If the CP notice has already been adjusted for treat the CP notice as classified waste per local management. Otherwise, continue to process the CP notice.

3.11.6.1.2  (01-01-2014)
General Instructions

  1. Use an erasable red pen for any editing markings.

  2. Edit your Tax Examiner (TE) number in the top left margin of Form 1040X or CP 08, 09 and 27, or follow any local procedures that ensure the integrity of the batch for routing to Files (e.g. number returns, enter IDRS employee number, and date)

  3. Follow local procedures for routing to other functions.

3.11.6.1.2.1  (08-06-2013)
Controlling Cases on IDRS

  1. Submission Processing will control ALL amended returns received in the 1040X teams on IDRS within 5 days of receipt. The purpose of this initiative is to enhance the tracking and recording of inventory within Submission Processing. This will also allow the Corporate inventory of Form 1040X to be tracked and analyzed from the enterprise level.

    Exception:

    CP Notices and Form W-7 returns do not have to be controlled on IDRS.

  2. In addition to establishing an IDRS control base a TC 971 action code 120 will be input to further identify which processing area has the case in possession. The current definition of the action code 120 reads: 120 Amended return/claim in Submission Processing. All other areas have a specific action code to indicate possession of the claim.

  3. Beginning in March 2013 the on line/ telephone initiative Where's My Amended Return (WMAR) will be launched. The taxpayer by entering their SSN, Date of Birth and Zip Code will be able to find out the status of their amended return(s). It is imperative that all cases are controlled on IDRS with the action code 120. WMAR keys off the action code to provide the taxpayer case status. Form 1040X claims are worked on a first In/first Out (FIFO) basis using the IRS Received Date. There will be instances where cases will be received in Submission Processing with an IRS Received Date older than current receipts i.e. Statute Cases cleared by the Statute Teams in Accounts Management. These cases once identified will need to be expedited to the controlling process.

  4. The process of controlling 1040X cases and the ensuing TC 971 AC 120 will be accomplished with these methods:

    1. SP clerical function using a GII Batch Control Tool (IAT) will control cases on IDRS. The IDRS numbers used will be group/team IDRS numbers followed by 00000 (see paragraph 5). In addition to the control base the tool will input a TC 971 action code 120. The Category will be "XRET" and the Activity will read "SPX-00005" the number 00005 standing for the SP batch number.

    2. In the event the SP tax examiner receives an uncontrolled case, the tax examiner will process the case and the ensuing adjustment action will open and close an IDRS control base under the TE’s IDRS number with a Category of “XRET”. The xClaim tool will input a TC 971 action code 120 as part of the process.

    3. In the event the SP tax examiner receives an uncontrolled case and determines it needs to be returned to the taxpayer or to go to another area. Using xClaim the TE will have the tool open a control case Category "XRET" and close a control base changing the Category to "MISC" and the tax examiner should input a TC 971 action code 120 on the account. The tax examiner will route as normal.

    4. SP tax examiner receives a case controlled to a group number (06XXX00000) and determines it is SP criteria. xClaim will take over the control base under the TE’s IDRS number. TE will process case which will open/close a control base with a Category "XRET" . The Activity will state "SP-X-00005."

    5. SP tax examiner receives a case controlled to a group number (06XXX00000) and determines it is NOT SP criteria or needs to be returned to the taxpayer. xClaim will take over the control base under TE's IDRS number and will close the control base changing Category to "MISC"

    6. On cases that need to be suspended, the tax examiner will re-assign the open control from the suspense queue to their IDRS number and change the activity as appropriate based on the type of suspense.

    7. If the case is determined to be classified waste and is uncontrolled. Treat as classified waste and do not open and close a control base or input an TC 971/120.

    8. When inputting a partial adjustment on a return that will be routed, the xClaim tool will close the open control to XRET. It is not necessary to open and close a control to MISC before routing.

    Note:

    When routing is required the Category of the case needs to be changed to "MISC" in order to prevent IDRS from recording the case as a closure.

    Note:

    If the case is controlled to the wrong taxpayer, MFT or tax year then close the incorrect base to "MISC" and work the case as uncontrolled. Correct other case control input errors using IAT ACTON before completing your case action. This would include incorrect IRS Received Dates and incorrect service center IDRS numbers.

  5. The group/teams numbers used by the SP clerical staff to control 1040X cases on IDRS are listed below:

    Campus IDRS Group/Team Numbers
    Austin 06224, 06233, 06238
    Fresno 10215, 10216, 10217
    Kansas City 09215, 09216, 09217

    Note:

    As these are group numbers the claims have not been assigned to a specific tax examiner in Submission Processing. These are 1040X claims controlled to the 1040X area in SP. Routes or Form 4442 will not be accepted from other areas for either controlled group numbers as well as specific tax examiner IDRS numbers. A disclaimer to this effect is on IDRS Message under the group numbers.

3.11.6.1.2.2  (01-01-2014)
When a Working Trail is Required

  1. Leave a working/action trail in the left margin of Form 1040X when:

    1. You detach a form, schedule, or notice per IRM instruction (i.e., Form 2848 POA, or a Form 8821 (TIA to CAF)

    2. You prepare a form.

      Example:

      Form 4442, payment plan request, Presidential Election Campaign Fund (PECF) dummy return

    3. Routing Form 1040X as instructed per local procedures (CB/CF, CIS, etc.)

    4. Any action trail required by local procedures.

  2. Edit the following on the Form 1040X:

    1. Detached item description - (i.e. Detached Form 2848)

    2. Routing destination

    3. Date or action trail if required by local procedures.

  3. Edit the following on the detached form, schedule, or notice, if the information is not present on the document:

    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. Form 1040X

    7. TE stamp

    8. Any action trail required by local procedures

3.11.6.1.2.3  (01-01-2014)
Reversing an Erroneous Adjustment

  1. These manual instructions are intended for work leaders. xClaim has the capability of performing this same operation. The reversal button on the xClaim tool is not available until the tax adjustment is input and posted to the tax account. Once the adjustment posts the reversal button becomes active.

  2. In the course of an internal quality review occasions will arise where erroneous adjustments are identified. If the tax adjustment cannot be deleted a reversal of the adjustment must be made by the quality reviewer, lead or designated tax examiner. If the erroneous adjustment will generate an incorrect TC 846 the Lead or Manager should initiate a Refund Intercept when possible using IDRS Command Code (CC) NOREF to stop the refund. See Refund Intercept CC NOREF (IRM 3.11.6.1.2.4) for time frames and time constraints.

    Exception:

    Do not input a corrective adjustment for changes to reason codes, received date, or amended claims date.

    Exception:

    It is not necessary to input CC NOREF if a TC 846 is not 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 is 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.

  3. When an account needs to be reversed, take the following actions to back out the erroneous adjustment.

    1. As a result of the incorrect adjustment reverse the affected portion of the tax, adjusted gross income, taxable income, self-employment tax, any credits, exemptions and federal withholding. Below is a listing of the appropriate transaction and reference codes.

    • Adjusted Gross Income will be reversed with a Reference Code 888.

    • Taxable Income will be reversed with a Reference Code 886.

    • Tax will be reversed with a Transaction Code (TC) 29X. (Opposite of erroneous TC 29X)

    • Exemptions will be reversed with a Reference Code 887.

    • Withholding will be reversed with a Reference Code 806 or 807. Depending on the error to withholding.

    • Primary self-employment income will be reversed with Reference Code 878

    • Secondary self-employment income will be reversed with Reference Code 879

    • Self-employment tax will be reversed with Reference Code 889 in conjunction with the TC 29X.

    • Self-employment tax will be reversed with Reference Code 889 in conjunction with the TC 29X.

    • Include any necessary priority codes on the corrective adjustment. See IRM 3.11.6.6.7.3

    Note:

    Whenever reversing an adjustment on an account some of the transaction codes and the reference codes cited above will have a minus behind the money amounts. The Reference Code for Exemptions will have a minus behind the exemption number. 291 and 807 are the reversal codes. For other reversal codes especially credits see Document 6209 as they also have specific reversal codes.

    Example:


    •887 .02- (Deleting 2 exemptions)
    •888 28,467.00- (Reducing AGI)
    •886 7,654.00-(Reducing taxable income)

    Caution:

    Always verify the erroneous adjustment did NOT create an unpostable condition before reversing an adjustment. If an unpostable condition was created monitor the account until the adjustment unposts, then input the correct adjustment. Hold the return until the Form 4251 return Charge-out is received and match the return with the Form 4251.

    Note:

    Use Hold Code 4 to prevent incorrect refunds or notices from being issued. In certain cases the Hold Code 4 will not stop the refund and/or the notice, but should be input on all reversals regardless.

3.11.6.1.2.4  (01-01-2014)
Refund Intercept CC NOREF

  1. Effective January 1, 2012, with the implementation of CADE 2 processing for all IMF accounts, only CC NOREF, definer "P" can be used by authorized employees to stop a refund. See the charts below for CC NOREFP input time frames. Refunds on original returns can also be stopped by using CC NOREFP prior to the posting of the return on IDRS.

    Caution:

    If a TC 846 is showing on CC TXMOD/IMFOLT, the refund record has already been sent to Financial Management Services (FMS), and the refund cannot be stopped.

  2. 2.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 will look for a matching refund and, when a match is found, will stop the refund. If no match is found within these time frames, the CC NOREFP will be dropped from IMF processing.

  3. 3.While an IDRS control base needs to be established for CC NOREFP, no systemic updates are received to indicate whether or not the input was successful at stopping the refund. Since the TC 846 will post on the module up to 5 business days before the TC 841, the account must be monitored for the TC 841 posting to determine if CC NOREFP was successful.

  4. 4.The following chart is provided to clarify when CC NOREFP can be used to intercept a refund that will result from an adjustment input before 5:00 PM CT on an IMF WEEKLY account:

    Note:

    Most accounts worked in SP will be designated as WEEKLY accounts. See Exhibit 2.3.51-12, Command Code IMFOL Output Display - Entity, Line 14, for more information about the position of the Daily Eligible Indicator. The literals "00" indicate an account is not eligible for daily processing; "01-99" indicates an account is eligible for daily processing. Any TC 29X input with a money amount will cause the account to become weekly; whereas a TC 290 .00 will not change the existing status.

    Transaction Input TERUP Review CCs Available From 5:00 AM CT on the following: NOREFP (until 9:00 PM CT) on the following: Adjustment Posts to MF on the following:
    Friday (Day 1) Friday (Day 1) Monday and until 5:00 PM CT Tuesday Thursday, week 1 (4 days after input of adjustment) Friday, week 1 (5 days after input)
    Monday (Day 2) Monday (Day 2) Tuesday and until 5:00 PM CT Wednesday Thursday, week 1 (3 days after input of Friday, week 1 (4 days after input)
    Tuesday (Day 3) Tuesday (Day 3) Wednesday and until 5:00 PM CT Thursday Thursday, week 2 (7 days after input of adjustment) Friday, week 2 (8 days after input of adjustment)
    Wednesday (Day 4) Wednesday (Day 4) Thursday and until 5:00 PM CT Friday Thursday, week 2 (6 days after input of adjustment) Friday, week 2 (7 days after input of adjustment)
    Thursday (Day 5) Thursday (Day 5) Friday and until 5:00 PM CT Monday Thursday, week 2 (5 days after input of adjustment) Friday, week 2 (6 days after input of adjustment)

    Example:

    If an adjustment is input on Friday, the adjustment can be deleted by CC TERUP until 5:00 PM CT. After that, REVIEW command codes can be used to review/delete the adjustment starting at 5:00 AM CT on Monday and ending at 5:00 PM CT on Tuesday. After 5:00 PM CT on Tuesday and until 9:00 PM CT on Thursday, CC NOREFP can be used to stop a refund. After 9:00 PM CT on Thursday the refund can no longer be stopped.

  5. The following chart is provided to clarify when CC NOREFP can be used to stop a refund resulting from a transaction (e.g., TC 290 .00, TC 571, etc.) input before 5:00 PM CT on an IMF DAILY account:

    Transaction Input TERUP Review CCs Available From 5:00 AM CT on the following: NOREFP (until 8 PM CT) on the following: Transaction posts to IMF on the following
    Friday Friday Monday and until 5:00 PM CT Tuesday Wednesday Thursday
    Monday Monday Tuesday and until 5:00 PM CT Wednesday Thursday

    Exception:

    available until 9:00 PM CT

    Friday
    Tuesday Tuesday Wednesday and until 5:00 PM CT Friday Monday
    Wednesday Wednesday Thursday and until 5:00 PM CT Friday Monday Tuesday
    Thursday Thursday Friday and until 5:00 PM CT Monday Tuesday Wednesday

  6. With Taxpayer Information File (TIF) centralization, it is no longer necessary to contact the issuing center or your local Notice Review to stop the refund. Input of CC NOREFP will stop a refund regardless of the Campus and will be evident when viewing the account. Use the Command Code (CC) "NOREFP" to intercept erroneous refunds and update the Refund Information File (RFIF). Refer to IRM 2.4.37, Command Code NOREF Overview for a complete description and input requirements.

  7. Employees stopping the refund will maintain an open control on all cases where a CC "NOREF" is input. The employee places the open control in "B" or "M" status (monitoring). The case can be closed when confirmation is received that the refund has been stopped.

  8. The controlling employee must monitor for the TC 841. When the TC 841 posts to the account, take the necessary action to release the "P" Freeze and close the control base. A “P” freeze will be released by the input of a TC 29X.

    Exception:

    If the adjustment cannot be processed by SP, such as a manual refund, then close the open control and forward the case to the appropriate area. Leave an ACTON history on TXMOD.

  9. If the TC 841 does not post within 4-6 cycles research for other adjustments, unpostable condition or erroneous refund. If an erroneous refund has been generated forward to CIS/AM.

  10. If CC NOREFP is being used, Form 12783 Request for Notice Pulls/Voids: Master File or IDRS must be hand walked to Notice Review to stop the generated notice to the taxpayer. This must be done by Thursday, 8:00 PM CT in the same cycle of the NOREFP.

3.11.6.1.3  (01-01-2014)
Blocking Series/Routing to Files

  1. Code and Edit processes Form 1040X and CP Notice adjustments in a unique blocking series based on the nature of the claim. Use blocking series 05 for processable Forms 1040X and CP Notices unless otherwise directed.

  2. The Control Unit is charged with the responsibility of associating IDRS Source Documents with their related IDRS Transaction Records (ADJ54 adjustments) that were input on taxpayer accounts. It is vital for the unit to receive source documents in a timely manner. Follow local procedures for routing the source documents to Files within the guidelines in IRM 3.5.61, Files Management and Services.

  3. When routing a document to files that will not be associated with a previously posted adjustment and no adjustment is being made to the taxpayer's account, input a TC 290 .00 with no reason codes.

3.11.6.1.4  (08-06-2013)
Related IRMs

  1. Additional information regarding amended returns may be found in the following IRMs.

    • IRM 3.10.72, Extracting, Sorting, and Numbering

    • IRM 3.11.3, Individual Income Tax Returns

    • IRM 3.24.3, Individual Income Tax Returns ISRP System

    • IRM 21, Customer Account Services

    • IRM 2.4.1 IDRS Terminal Input

    • IRM 3.13.5 IMF Account Numbers

    • IRM 3.12.37.23 Correspondence Manual

  2. The operational guidance in this IRM takes precedence over any conflicting operational procedures in other IRMs. Contact your manager if you have any questions about operational guidance and for clarification between operational issues and statutory requirements.

  3. Document 6209, IRS Processing Codes and Information, 1040 attachment guide, Tax Form and Instructions (accessible through the IRS Home Page), and Publication 17 are valuable resources for obtaining additional information and resolving questions.

  4. General SERP alerts issued for IRM 3.11.6 are additions to the IRM instruction and are to be followed as part of IRM 3.11.6.

3.11.6.1.5  (01-01-2014)
Inquiries from IRS Employees

  1. IRS employees are taxpayers and are entitled to the same security measures to their tax account information in the same manner as other taxpayers who call, write, or visit us.

  2. There are special procedures that you must follow to protect the "taxpayer employee" , as well as to protect yourself. If you receive or initiate telephone contact, or are assigned a case of an IRS employee, take the following actions:

    1. If you do not know the employee, work the case and complete Form 11377.

      Note:

      Completing the Form 11377, Taxpayer Data Access, is voluntary and should be done at the discretion of the employee. The purpose of the form is to document the reason(s) tax return and/or information was accessed by you when the taxpayers case was not assigned directly to you.

    2. If you know the employee, refer the case to your manager.

  3. If your unit has a designated employee who handles all cases from IRS employees, refer these cases to that employee.

  4. IRS Employees can be identified from the IRS-EMP-CD on TXMOD and on IMFOLT.

    • IRS EMPLOYEE:P - Primary taxpayer.

    • IRS EMPLOYEE:S - Secondary taxpayer.

    • IRS EMPLOYEE:B - Both taxpayers.

3.11.6.2  (08-06-2013)
Preliminary Review of Form 1040X/Amended Return

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

    • Taxpayer Identification Number

    • Tax Period

    • Received Date

    • PECF Requests

    • Discovered Remittance

    • TC 150 posted

3.11.6.2.1  (08-06-2013)
Taxpayer Identification Number

  1. In order to process a return, you must have the TIN. The TIN is the Social Security Number (SSN) or IRS Individual Taxpayer Identification Number (ITIN) for IMF accounts.

  2. An ITIN is a nine-digit number issued by the IRS to individuals who are required for U.S. tax purposes to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a SSN issued by the Social Security Administration (SSA). The ITIN will be in the format of a SSN and begin with the number "9". The fourth and fifth numbers will range from:

    • 70-88

    • 90–92

    • 94-99

      Note:

      89 and 93 are NOT used as fourth and fifth numbers for ITINs but are reserved for other programs.

  3. The ITIN is only for federal tax purposes. The ITIN does not:

    • Qualify the applicant for Earned Income Tax Credit (EITC)

    • Make inference to the applicants immigration status

    • Qualify the applicants right to work in the United States

  4. If the Primary TIN (P-TIN) is missing, incorrect, or illegible, research IDRS (Command Code NAMEI or NAMES), attached correspondence, cross reference with the spouse (Command Code INOLE) and/or dependents using DUPED. If you have exhausted all resources and are still unable to determine the P-TIN, correspond per IRM 3.11.6.9 using Form 8009-A, box 12 (do not input TC 971 with AC 270) for all claims.

    Note:

    If found edit to the appropriate field on the Form 1040X or Form 1040 series.

  5. If the taxpayer files an amended return and the primary's or secondary's account is set up on the invalid segment of Master File (which requires an asterisk after the TIN (000-00-0000*)), refer as CIS/AM.

    Exception:

    If the filing status is 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.

  6. Refer to CIS/AM if the case involves a merging or re-sequencing of accounts.

    Example:


    (a) If the primary or secondary taxpayer is changing from an ITIN/IRSN to a SSN then attach an IMFOLT print showing the taxpayer filed under a different TIN.
    (b) Filing status change to MFJ where both taxpayers have already filed.

  7. If the taxpayer is filing MFJ and there is 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 3.11.6.5.3

  8. Refer to CIS/AM if the account has been merged/resequenced and an update to DDBCK is required.

  9. Follow local procedures when routing to files.

3.11.6.2.2  (08-06-2013)
Tax Period

  1. Amended returns must be for a specific tax period. When the tax period is missing, and you cannot determine from return information or attachments, research IDRS (Command Code IMFOL or RTVUE) for matching tax data.

  2. If the tax period is found, edit the tax period on the front of the return above the Entity section in YYMM or YYYYMM format or mark the appropriate box, even when routing document to another function.

  3. If you cannot determine the tax period through IDRS research, correspond unless return is being routed to another function. Correspond per IRM 3.11.6.9 using Form 8009-A, box 10.

    Note:

    Do not input TC 971 AC 270.

  4. If the taxpayer tries to submit an amended return for multiple tax periods on a single amended return, send the return back to the taxpayer. Use Form 8009-A box 3 to inform the taxpayer they must submit a separate amended return for each specific tax period that they are trying to amend.

3.11.6.2.3  (01-01-2014)
Superseding Returns

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

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

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

    Note:

    These amended returns are processed as any other amended return is processed.

  2. Certain information concerning Superseding returns:

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

      Note:

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

    • Returns meeting Examination criteria. Follow procedures inhttp://serp.enterprise.irs.gov/databases/irm.dr/current/21.dr/21.5.dr/21.5.3.dr/21.5.3-2.htm, Examination Criteria (CAT- A)

3.11.6.2.4  (09-18-2013)
Received Date

  1. Every Form 1040X should be stamped with a processing center Received Date stamp. If the Received Date stamp is missing, or illegible, but is found elsewhere in the return packet, edit the date to the front of the return in MMDDYY or MMDDYYYY format in the blank space above Line 1.

    Note:

    Other areas within the IRS may date stamp the return to indicate when the return arrived in that area (e.g. Statute, Adjustments, etc.), do not use that date stamp as the Received Date.

  2. Beginning April 23, 2014, honor received dates that are edited in green ink on current year 1040Xs received with payments as the return received date to be used for processing.

  3. If the Received Date stamp is not 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 (1) above.

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

    2. IRS Scamps date

    3. IRS field office date stamp

    4. IRS field office with a handwritten Received Date on a secured return. Must have "received" and a date with a signature and title of the authoring employee.

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

    6. Current Date

  4. Use the following chart when there are multiple received dates stamped and/or edited on the return:

    IF AND THEN
    Inputting an adjustment or routing a return Refund or Net Zero Return Circle all but the latest received date.

    Example:

    The original received date is March 5, 2014, and the latest received date is April 4, 2014. Edit 040414 as the received date. Circle March 5, 2014.

    Inputting an adjustment or routing a return Balance Due Return Circle all but the earliest received date.

    Example:

    One received date is March 5, 2014, the other received date is April 4, 2014. Circle April 4, 2014.

    Corresponding on a Refund or Net Zero Return Circle all received dates.
    Corresponding on a Balance Due Return Circle all but the earliest received dates.

  5. Input the received date of Form 1040X as the received date on IDRS.

    Exception:

    See IRM 3.11.6.3.3for statute returns.

  6. For W-7 cases, enter the date from Form 3471, if attached, as the Amended Claims date.

3.11.6.2.5  (01-01-2014)
Processing PECF Requests

  1. The taxpayer may request that $3 go to the Presidential Election Campaign Fund (PECF) by checking one or both boxes on Page 2 of Form 1040X.

  2. A PECF request can only be processed for the current tax year and one tax year prior; and if there is a tax change on Line 10 of Form 1040X.

    Exception:

    Do not process a PECF request on any return that is being routed out.

  3. If the return meets correspondence criteria and an adjustment will not be input, do NOT process the PECF request. Correspond as required.

  4. To process a PECF request, edit the following items to a blank Form 1040X as a "Dummy PECF" return.

    1. "Dummy PECF" in the top margin

    2. Tax period

    3. Primary name control

    4. Primary SSN and Secondary SSN

    5. Filing Status Code to the left of the box on Line A

    6. "5" to the right of Line B, if one PECF box is checked.

    7. "6" to the right of Line B, if two PECF boxes are checked.

    8. Received date in MMDDYY format in the center portion

    9. "O/S" on the signature line to indicate the original Form 1040X was signed

    10. Your employee number/stamp in the upper left margin (if required by local procedure)

  5. Edit "PECF Prep" in the left margin of Form 1040X then continue processing the return.

  6. Route "Dummy PECF" to Batching/ISRP per local procedures.

3.11.6.2.6  (01-01-2014)
Discovered Remittances

  1. A discovered remittance is any form of payment (cash, check, money order, stamp, jewelry, etc.) other than credit card that the taxpayer may send in.

    Note:

    When a US Treasury check is returned to the IRS, it is not considered a discovered remittance. Edit "Void" onto the check if it does not already have it. Forward the check and a copy of the return to the Refund Inquiry unit and continue processing the return.

    Exception:

    If the US Treasury check is made payable to the IRS this should be returned to Receipt and Control for proper disposition.

  2. When a remittance is discovered, immediately turn the remittance over to your Manager or Lead.

    Note:

    If your unit has a designated employee who handles all discovered remittances, refer to the designated employee.

    1. If a Form 1040-V, Payment Voucher is attached, only turn in the voucher and the remittance. Edit your TE number on the voucher and continue processing the return.

    2. If a payment voucher is not attached, turn in a copy of the front page of the return with the remittance.

    3. If a "loose" remittance is discovered (not associated with a return), complete Form 3244. Turn in the remittance with Form 3244 and continue processing the return.

  3. Edit the Received Date if missing onto either the discovered remittance, Form 1040-V, or the return.

  4. If the taxpayer sends in a credit card or credit card information, refer the case to the Manager or Lead for a formal 3956C disallowance letter to be issued.

  5. For additional information on discovered remittances, see IRM 3.8.46, Discovered Remittances.

3.11.6.3  (09-16-2013)
Sorting, Routing, and Priority Processing

  1. During the course of processing cases the tax examiner will identify all documents for "route-out " criteria by reviewing the return for attachments, issues, correspondence required, Statute, and researching IDRS for transactions that require routing to another function. Sorting into current and prior years is not necessary. Keep all related tax years together if possible. Notate on Form 1040X any action taken, such as routing to Statute, detached Form 2848 to Centralized Authorization File (CAF), etc.

  2. Identify all possible route out criteria, then route to the highest priority as stated in paragraph 3 below.

  3. The priority order for routing is as follows:

    1. Disaster Claims

    2. Carryback or Carryforward Claims (CIS/AM)

    3. Statute

    4. Open AIMS Cases/Exam

    5. Scheme Development Center/Frivolous

    6. Category A (CAT A)/First Time Homebuyers credit meeting Cat A criteria

    7. Underreporter (AUR/URP)

    8. Adjustment Function Criteria (CIS/AM)

    9. Cases controlled to accounts management route to local CIS/AM

    10. Open cases (open to an employee other than an area listed above)

    11. All other claims

  4. If the TC 150 has not posted suspend return. Do not route until a TC 150 is posted. See IRM 3.11.6.5.2 If the taxpayer submits a Form 1040 series return with no Form 1040X attached and there is no TC 150, see IRM 3.11.6.5.4.

  5. The tax examiners will screen for cases meeting Category A (Cat A) criteria for the examination department. SeeIRM 3.11.6.3.5

  6. See IRM 3.11.6.3.24.1 for TC 971 and Action Codes and routing destination for specific items. Leave a working trail in the left margin indicating the destination or detached item as an audit/working trail, such as " To Statute" , "Form 2848 detached" , etc. See IRM 3.11.6.1.2.2. Follow local procedures.

  7. See IRM 3.11.6.2.5 for editing instructions for ISRP input of "Dummy PECF" instructions.

  8. Always "Hand carry" statute returns to the area following local procedures.

  9. Follow IDRS screening procedures for sorting and routing returns or correspondence to another function. For Carryback/Carryforward claims, Disaster Claims, Injured Spouse, Innocent Spouse, Statute returns, etc., follow local agreements for routing to CIS/AM (e.g. if manual input of TC 971 and additional Action Codes, Category Codes, etc. is required).

3.11.6.3.1  (09-19-2013)
Disaster Claims

  1. Taxpayers who live in an area for which the President issues a "Declaration of Emergency or Major disaster" may file disaster claims. The IRS may place a -O/-S freeze on the module for the zip codes of the affected areas to indicate the taxpayer resides in a disaster area. The -O/-S freeze is only an indicator that the taxpayer resides in a disaster area and does not necessarily mean the taxpayer is filing a disaster claim.

    Note:

    The names and locations of the designated Disaster areas are posted on SERP under the "Who/Where" tab, then the "Disaster Declarations/FEMA " link.

  2. A disaster claim is filed using Form 4684, Casualty and Theft Loss, and is reported in addition to the standard deduction or on Schedule A. A disaster claim can be identified by an amount on line 17 of Form 4684.≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    If processing a Disaster claim and Priority Code 8 is required, expedite to CIS/AM.

  3. Taxpayers who cite Publ 109-7 Proper Tax Treatment of Certain Disaster Mitigation Payments enacted on April 15, 2005, for grant payments under the Flood Mitigation Assistance Program (FMA), the Pre-Disaster Mitigation Program (PDM), or the Hazard Mitigation Grant Program (HMGP) which are grants used to elevate structures located on flood-prone properties owned by individuals and business exempt from tax.

    Note:

    This is sometimes referred to as HR-1134.

    Taxpayers who paid taxes on these payments are eligible to claim a refund. Process these returns using RC 032

3.11.6.3.1.1  (09-19-2013)
Disaster Expedite

  1. All documents that meet the specified criteria to be routed or forwarded to another function to work (i.e. Cat A, Statutes, Underreporter, CIS/AM, etc.) need to remain separate for each area under a routing sheet indicating "Disaster -- Expedite Processing" . Expedite routing, hand walking whenever possible, to the forwarding area. Follow local procedures.

  2. If there are additional prior year Forms 1040X claiming the carryback loss from the casualty, expedite all returns to CIS/AM.

  3. Returns identified as P.L.110-343 Disaster, Emergency Economic Stabilization Act of 2008, Hurricane Grant Relief, Housing and Economic Recovery Act of 2008 or anything similar written on the Form 1040X, expedite to CIS/AM.

3.11.6.3.1.2  (09-19-2013)
Disaster Correspondence

  1. Do not correspond for missing forms or schedules on Disaster claims, unless there is not an explanation for a substantial amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . If unsure about the claim, consult your Manager or Lead.

    Note:

    If the amended return has disaster freeze codes present, but the Form 1040X is not claiming a disaster loss you may correspond if additional information is required to process the claim following normal correspondence procedures.

  2. If a Disaster claim is missing a signature (refund or balance due return), correspond using a 324C letter. Do not mail the return back to the taxpayer. Suspend the return until you secure a signature only on refund returns.

    1. If a reply is received within 45 days, continue processing the return and input under Blocking Series 05.

    2. If no reply is received after 45 days,return the entire claim to the taxpayer using a 916C letter, paragraphs B,F, R, W,4. Include "You did not provide [insert a description of the missing information]." Essentially this tells the taxpayer we cannot process the claim and they will now be required to file a new claim with the required information.

3.11.6.3.1.3  (09-23-2013)
When a Disaster Claim Can Be Filed

  1. Taxpayers may file a disaster claim in either:

    • The same year that the disaster occurred or

    • The year immediately preceding the year in which the disaster occurred

  2. To file a disaster claim in the preceding tax year in which the disaster occurred the claim must be filed by the later of the following due dates shown in the Disaster Timeliness Chart below.

    1040X Filed For Disaster Occurred Processable If Received By
        Normal Due Date w/Extension (TC 460)
    2013 2014 04-15-2015 10-15-2015
      2013 04-15-2017  
    2012 2013 04-15-2014 10-15-2014
    2012 04-15-2016
    2011 2012 04-15-2013 10-15-2013
    2011 04-15-2015
    2010 2011 Disaster CIS/AM Disaster CIS/AM
    2010 04-15-2014

    Example:

    A disaster loss that occurred in 2013 that is being claimed on a 2012 return has until April 15, 2014 (without an extension) or October 15, 2014 (with an extension) to be considered timely filed.

  3. If the claim is filed late, expedite to CIS/AM.

3.11.6.3.1.4  (09-19-2013)
Processing a Disaster Claim (-O/-S Freeze)

  1. To process a Disaster claim, check TXMOD for a TC 150 and -O/-S Freeze on the account. If there is:

    1. A -O/-S Freeze: Continue processing using Blocking Series 05.

      Note:

      If it is a refund return and the refund is to be issued to a name and/or address other than the one shown on Masterfile (e.g. temporary address, taxpayer representative, prior name, in care of name and address), do not continue processing. Keep separate under routing sheet indicating "Disaster" and expedite routing to CIS unit.

    2. No TC 150 posted: Expedite routing to CIS per local procedure. Notate Priority Code "1" on the batch routing slip.

    3. No -O/-S Freeze (Balance Due Only): Expedite routing to CIS per local procedure. Refund returns do not require a -O/-S Freeze to process the return.

    4. No -O/-S Freeze (Refund return): Continue processing the return. Use Blocking Series 05 when inputting the adjustment.

      Note:

      If processing a Disaster claim and Priority Code 8 is required, expedite to CIS/AM.

  2. A new –S freeze has been added to IMF and BMF Master File processing for taxpayer accounts in Presidentially declared disaster areas. The new –S freeze will perform the same functions as the –O freeze for systemic penalty and interest relief. It will not provide compliance relief.

  3. An –S freeze may be systemically set on taxpayer’s accounts whose address of record is in the covered disaster area (set on IDRS by zip code with a TC 971 AC 688 and includes the Federal Emergency Management Agency (FEMA) Emergency Declaration Number).

  4. Affected taxpayers located outside the covered disaster area will be advised to call the toll free number 1-866-562-5227 to self identify for disaster relief.

    Reminder:

    Taxpayers will no longer self identify for disaster relief by writing a disaster designation in red at the top of their tax return.

  5. The –S freeze will ensure that interest and penalties are properly waived if the taxpayer files and/or pays within the prescribed time frame.

  6. The –S freeze is released when the current date is beyond the secondary date (disaster ending date) of the TC 971 AC 688.

3.11.6.3.2  (08-06-2013)
Carryback/Carryforward

  1. A Net Operating Loss (NOL) is created when certain deductions exceed income from all sources. These deductions must relate to a trade or business, work as an employee, or casualty or theft. 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 for adjustment or refund. Any loss remaining after applying the NOL to preceding years lowers taxes in a later year.

  2. ALL Carryback/Carryforward (CB/CF) claims are to be expedited to AM. Follow any local procedures for separating CB/CF claims from other CIS/AM issues.

  3. The taxpayer may elect to forgo the carryback period for any tax year and carry the entire NOL forward. Route all elections to forgo the carryback period to CB/CF unless the election has already been made. (Check TRDBV for efiled returns.)

  4. Do not treat the following claims as CB/CF claims:

    • The terms “carryforward” and “carryback” can be used when identifying certain credits that can apply on different tax years. Since these are not NOLs being applied to a gain year 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 with an entry on Line 18 “Carryover from prior year” for Gifts to Charity.

    • Form 1116 is not a carryback claim.

  5. Indications that a taxpayer is trying to take a loss are as follows:

    • An attached 1040 has a change on Line 21 related to a NOL.

    • Form 1045 and/or supporting schedules (Schedule A-NOL, Schedule BNOL Carryover, or Schedule D) are attached.

    • Taxpayer checks the carryback box of Form 1040X or notates "NOL", "Carryback", "Carryforward", or "Carryover" on the return in the Form 1040X, Explanation of Changes.

      Note:

      Do not treat as a CB/CF return unless the conditions in (1) are met. (e.g. The taxpayer may mark the carryback box of Form 1040X in error.)

    • Schedules K-1 from a partnership, S corporation, estate, trust, or similar wording is attached for either:
      - The year of the loss
      - Credit that contributed to the loss
      Credit that is carryback

      Reminder:

      If none of the CB/CF issues are changing do NOT route to CB/CF. (e.g. A NOL is indicated on Line 21 of Form 1040, but is not changing.)

3.11.6.3.3  (10-22-2013)
Statute Cases

  1. Submission Processing will process 1040X statute year claims. These will consist of tax decreases/credit increases meeting SP's 1040X criteria.

    Note:

    Command Code DDBCK can only be used on current year returns (e.g. 2012) and on returns for the previous two years (e.g. 2012 and 2011). Do not update DDBCK on statute year returns 2010 and prior. Continue to process the return.

  2. Statute year cases will be identified in Receipt and Control and routed to the Statute teams in Accounts Management. The Statute teams will identify tax decreases/credit increases and route to the 1040X teams to be processed. Due to different local configurations at the 3 sites the cases coming from Statute will be routed per local agreement for distribution to the 1040X area. Use the following guidelines when processing a statute year case:

    1. If the case is not stamped with an indication it has been reviewed in the Statute area it should be returned to the Statute Team to be reviewed. The stamp could read statute cleared, no statute issues, campus name followed by statute, etc. and is not limited to the examples provided.

      Note:

      The stamp must have the date it was reviewed and should be within 60 days of the date you are processing the claim, otherwise return the claim to the statute team.

    2. Open cases with a Category Code of ST04 or -X04 meeting SP processing criteria should be worked by putting the statute control base in "B" status and upon completion putting the statute control base back in "A” status.

    3. If instructions are provided by the statute unit, refer the claim to your lead for guidance in processing the claim.

    4. Statute cases not meeting Submission Processing criteria should be expedited routed to the appropriate function.

      Example:

      The statute of limitations has expired and the taxpayer is claiming a Rollover of Airline Payments to a traditional IRA. This does not meet Submission Processing criteria and should be routed to CIS/AM.

  3. An ASED is the Assessment Statute Expiration date on which the time allowed for assessing tax expires. The ASED expires 3 years from the due date or received date of the original return, whichever is later.

  4. An RSED is the Refund Statute Expiration Date. When the statute of limitations for a refund expires, the IRS can no longer allow a claim for refund by the taxpayer. The RSED expires 3 years from the original due date or 2 years from the date the tax was paid, whichever is later. See explanation of 2 year/3 year period below:

    1. In the case of a claim filed within the 3 year period, the amount to be credited or refunded is limited to the tax paid during the 3 years preceding the claim, plus the period of any extension of time to file.

    2. In the case of a claim filed within the 2 year period, the amount is limited to the portion of tax paid during the 2 years immediately preceding the filing of the claim.

    3. The filing of a claim for refund keeps the statute open only with respect to the item(s) described in the claim. A subsequent claim filed after the expiration of the statute that requires the investigation of facts or legal positions that would not have been disclosed by the investigation of the original claim are generally considered an untimely new claim and are officially disallowed.

    Note:

    Always verify the RSED and ASED which can be found on IMFOLT or TXMOD.

    Exception:

    The statute period has been extended for some military reservists. See Military Family Relief Act, IRM 3.11.6.8.1.2 for processing instructions.

  5. The 23C Date is the date an assessment is posted to the Master File as indicated by the TC 150. If no tax is assessed the TC 150 will be for .00. It is also the date the first master file notice is sent on a balance due document and is commonly referred to as the notice date or assessment date. Also shown as Settlement Date.

  6. See IRM 3.11.6.3.16 if the case is a Substitute for Return (SFR).

  7. Route returns discovered with 90 days or less remaining until the ASED with no indication it has been reviewed by the Statute Team to the Statute function. The 90 day period allows the Statute function time to secure any additional information required to clear the return or resolve an issue

    Caution:

    If the ASED is within 17 calendar days, all potential statute cases must be expedited/hand walked to the Statute function.

    Exception:

    A claim to decrease withholding tax is not considered a credit decrease and can be processed without statute involvement.

  8. Send any returns with a total tax increase or refundable credit decrease that are within 90 days of the ASED (or if the ASED is expired) to the Statute Team regardless of any indication that the return has already been cleared by Statute:

    • Input a TC 971 with AC 014.

    • Keep all related statute tax years together just as you keep non-statute years together.

    • If the case is within 17 days of the ASED it needs to be expedited/hand walked to the Statute area.

  9. Route to CIS/AM any case involving any of the following:

    • A signed consent or request to extend the statute of limitations.

    • Filing status changes to MFJ.

    • Any case requiring a transfer to Excess Collections or requiring a manual refund

    • If an individual is "financially disabled." Financially disabled means being unable to manage financial affairs. The inability must be due to a medically determinable mental or physical impairment.

  10. If a Form 1040 is received in the 1040X unit and the Form 1040 is stamped "Statute Cleared" , research IDRS for a TC 150. If a TC 150 has posted, determine if it is a duplicate return or an amended return. If the return is a duplicate follow IRM 3.11.6.5.4 and if it is amended process per normal statute procedures.

  11. When there is no TC 150 posted on the account for a statute year return follow the procedures in the table below:

      IF AND THEN
    1 Statute year 1040 with no 1040X attached No TC 150 posted Route to Statute Unit for Clearance. Input TC 971/014.

    Exception:

    If the return is stamped "statute cleared" send to Receipt and Control to be processed as an original.

    2 Statute year 1040X , an original Form 1040 and an "As Amended" Form 1040 are attached No TC 150 posted Follow the procedures in IRM 3.11.6.5.3paragraph (5) except route to Statute Unit for Clearance. Input TC 971/014.

    Exception:

    If the return is stamped "statute cleared" send to Receipt and Control to be processed as an original.

    3 Statute year 1040X No TC 150 posted Send to Statute Unit for clearance. IRM 3.11.6.5.3 Convert Form 1040X to a Form 1040 or 6114. Input TC 971/014 and ACTON history of "X21502STAT."

    Exception:

    If the return is stamped "statute cleared " send to Receipt and Control to be processed as an original.

  12. If the conditions above are not met, follow the procedures below in order from top to bottom of the chart:

    • If inputting a timely received return after April 15th, input an "S" in the Override Indicator field.

    • See the table in (13) below for instructions on inputting the received and amended claims dates.

      IF AND THEN
    1) The Tax Account for the year you are working has moved to the Retention Register It is a workable case meeting submission processing criteria Use IDRS Command Code IMFOLBxxx-xx-xxxx. to recover the tax module from the retention register. If systemically the case does not move from the retention register to IDRS then route to CIS/AM. Once it is recovered MFREQC or MFREQD the account and take account action. This action has to be taken whether adjusting the account or generating correspondence.
    2) The returns meets CB/CF criteria The case is within 60 days of the ASED 1. Prepare Form 3210 and notate "CB/CF/Statute Imminent " in the remarks area.
    2. Place an ACTON history item " Statute Imminent or SI" on TXMOD.
    3. Expedite / hand walk to CIS/AM perIRM 3.11.6.3.2
    3) There is a total tax decrease or refundable credit increase of≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ The IRS received date on the 1040X is within 60 days of the ASED

    Note:

    When ASED is expired and 1040X is timely filed process the claim

    Route to CAT-A if no specific CAT-A tolerances exist for the issue.

    Note:

    If specific CAT-A criteria exist see IRM 3.11.6.3.5.1 If the CAT-A criteria in IRM 3.11.6.3.4.1 are not met, continue to the next box.

    Exception:

    Do not refer Schedule K-1 changes regardless of the ASED

    4) You are making an adjustment to the account with a TC 290 .00 and adjusting credit reference numbers that will not result in a credit or tax change.

    Example:

    Changing SE tax from primary to secondary taxpayer. No tax change and no credit change.

    The ASED or extended Return Due Date (RDD) is less than 60 days after the current 23C date or has expired. Process using blocking series 05. Do not use priority code 9.
    5) Total tax decrease and/or refundable credit increase resulting in a refund is received before the RSED Claim is incomplete and additional information is required to process the case. 1.Suspend the case for 45 days and request the missing information.

    2.Correspond with the taxpayer using a 916C letter paragraphs B, E, I, Q, R, W.

    - In paragraph Q use specific verbiage requesting required information from Form 8009-A or from the IRM 3.11.6 subsection related to the missing information.

    -In paragraph R use "Please send us the information requested within 30 days from the date of this letter. If we do not hear from you within 30 days we will not 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 or 2 years from the date the tax was paid, whichever is later.”

    Exception:

    If the signature is missing on the claim use the 324C letter paragraphs A, P, V, Y, b. For the fill-in paragraph V use "Please send us the information requested within 30 days from the date of this letter. If we do not hear from you within 30 days we will not 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 or 2 years from the date the tax was paid, whichever is later" .



    3. When the taxpayer responds to the letter or the 45 days has expired and:

    -The response is received after the RSED ( no more than 60 days ) but within 45 days of the IRS request (date the letter was done) then allow the claim.

    -The time frames are not met or the taxpayer did not provide a complete as requested then send 105C letter disallowing claim. Use paragraphs A, R, 4, 5, 6 and e. Follow IRM 3.11.6.9.3
    6) If the RSED is expired and there is a math error on the original return The only change on the 1040X is a correction to the math error from the original return Continue to process the 1040X per IRM 3.11.6.6.5.1

    Note:

    Input the received date of the original return in the "RFSCDT" field.

    Exception:

    If the return was not timely filed (after the RSED) route to CIS/AM

    7) If the RSED is expired and there is a math error on the original return The change on the 1040X is NOT a correction to the math error from the original return and/or also claiming additional changes Route to CIS/AM
    8) The RSED is expired on a Balance Due Module and the Module is not Full Paid.

    Exception:

    See boxes above to address math error corrections

      Route to CIS/AM
    9) The RSED is expired on a Full Paid Module

    Exception:

    See boxes above to address math error corrections

    There are payments, credits, or offsets within the last two years Route to CIS/AM
    10) The RSED is expired on a Full Paid Module There are no payments, credits, or offsets within the last two years and no other route out criteria exists. Send 105C letter disallowing claim. Use paragraphs A, R, 4, 5, 6 and e. FollowIRM 3.11.6.9.3 IRM 3.11.6.9.3
    11) 1. Total tax decrease and/or refundable credit increase, resulting in a refund

    2. Or net zero tax change
    RSED has not expired Process 1040X using instructions in the note below.

    Note:

    If inputting a timely received return after April 15th, input an "S" in the Override Indicator field and complete the RFSCDT as indicated in the table below..

    Reminder:

    Always verify the RSED and ASED dates on TXMOD.

  13. Follow the procedures and examples below for inputting the received date and amended claims date.

    Note:

    If the adjustment is a TC 290 .00 input of the RFSCDT is not required.

    IF AND THEN
    The received date is 4-20-- 20XX Postmark date is 4-15- 20XX or before Input 4-15-20XX as the RFSCDT and amended claims date.
    The received date is 3-30- 20XX Postmark date is 3-28- 20XX and the return is received in the 1040X unit to be processed 6-05-20XX Input 3-30-20XX as the amended claims date and the RFSCDT.
    The received date is 6-01- 20XX. The RSED/ASED is 10-15- 20XX Process the return following standard 1040X procedures..
    The received date is 10-20- 20XX The RSED is 10-15- 20XX and the postmark date is 10-15- 20XX or prior Input 10-15-20XX as the amended claims date, and RFSCDT.
    The received date is 4-15- 20XX The claim was incomplete (requiring correspondence) because it is missing the required information necessary to process the claim. The response was received 6-1-20XX Input 4-15-20XX as the RFSCDT. Input 6-1-20XX as the amended claims date.
    No envelope is attached and no postmark date stamp is present. The return was received before 4-20-20XX Input 4-15-20XX as the received date, amended claims date, and RFSCDT.

    Note:

    If inputting a timely received return after RSED, input an "S" in the Override Indicator field.

3.11.6.3.4  (09-23-2013)
CI Scheme Development Center and Integrity and Verification Operation (IVO) (formerly AMTAP) Guidance

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. When Form 1040X is routed to IVO based upon the criteria in this section, the return will be reviewed to the determine if the claim should be processed or is "bad". IVO will annotate the return and provide the status using the established referral form.

    Exception:

    If the W-2 has an SSN and the return has an ITIN, do NOT refer to IVO.

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

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

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

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

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

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  7. If a claim is returned from CI or IVO without any specific processing instructions or words that state "No CI Potential" or similar language and the claim still appears to be suspicious then elevate to your Lead or Manager. The Lead or Manager then needs to check with their local P&A Analyst to see if there are any treatment streams for these types of cases.

  8. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.11.6.3.5  (09-23-2013)
Examination Category A/Technical Assistance Requests/Voluntary Disclosure Off Shore Cases/Claim Processing with Exam Involvement

  1. Review all claims and amended returns for Examination involvement. This may include:

    1. Returns with an open TC 420 or -L freeze see IRM 3.11.6.3.5.2

    2. Returns meeting Category A criteria IRM 3.11.6.3.5.1

      Note:

      Do NOT refer incomplete claims to Exam or CAT-A. Follow correspondence procedures in IRM 3.11.6.9 Do NOT input a partial adjustment until a reply is received..

    Reminder:

    Correspond for all missing forms or schedules needed to support the change(s) being requested.

  2. If the case has a -W freeze which is set by the TC 520 this will take priority and the case should be routed to CIS/AM as a -W freeze.

  3. A partial adjustment is required when a CAT A or Exam case involves tax increases/ credit decreases.

    Exception:

    Certain adjustments are not processable based on SP criteria. Route any returns needing a partial adjustment that do not meet SP criteria to CIS/AM.

  4. Follow the instructions below for inputting a partial adjustment on cases that are being forwarded to Examination or CAT A.

    1. Input any tax increase or credit decrease.

    2. When adjusting for the tax increase/credit decrease, include any updates to AGI, TXI, and other applicable reference numbers.

    3. Use the appropriate blocking series and priority codes as necessary.

    4. Input the adjustment with a hold code 4 and a TC 470. Use CC REQ77 to input TC 470 and use the current date in the TRANS-DT field.

      Note:

      Use a posting delay code on the input of the TC 470 to delay by one cycle.

    5. Include source document "N".

      Note:

      When inputting a partial adjustment update the DUPOL database for all issues related to the 1040X including any items not adjusted during the partial adjustment per IRM 3.11.6.7. (When DDBCK is unavailable use DUPED on current year returns only.)

  5. See following table for more detailed instructions for inputting partial adjustments as described above.

    Lines 11 – 14 Column B (Separate Credits on Line 14):  
    Any lines decrease Input TC/RN/CRN = XXXX.00- for only the credits that are decreasing (See Changes to lines 1-10 below for TC 29X input)
    Increase or no change Do not adjust (See Changes to lines 1-10 below for TC 29X input)

    Changes to lines 1 – 10:
    Separate Credits on Line7
       
    IF Line 10 AND THEN
    Increases   Adjust lines 1 – 9 excluding increases to line 7
    No Change/Decreases
    1. Line 6B Increases
    1. Adjust lines 1- 5. Input TC 290 for line 6B amount (include and adjust for any increases to line 9 and do NOT include increases to line 7).
    No Change/Decreases Line 6B no change or decrease Input TC 290 for .00 if there is a decrease to lines 11-14.* (See Filing Status Changes below.) Otherwise, do not input an adjustment.

    *Filing Status Changes : If the only reason for the partial adjust is a credit decrease from lines 11 – 14 and the taxpayer is changing Filing Status then change the filing status and use the following instructions:

         
    IF AND THEN
    TP is claiming a Standard Deduction
    1. FS1/4 to FS 2/5

    Allow the standard deduction change and 1 exemption for Spouse only (FS 5 allow exemption for dependent).
    - Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    TP is claiming a Standard Deduction
    2. FS 4/5 to FS 1

    Allow the standard deduction and remove the exemptions indicated.
    - . Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    TP is claiming a Standard Deduction FS 1 to FS 4
    Allow the standard deduction change and do NOT adjust for the increase to exemption.
    Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    TP is claiming itemized deductions FS1/4 to FS2/5
    Allow 1 exemption for Spouse only (FS 5 allow exemption for dependent). Do NOT adjust for line 2.
    - Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    TP is claiming itemized deductions FS 4/5 to FS 1
    Remove the exemptions indicated. Do NOT adjust line 2.
    - Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    TP is claiming itemized deductions FS 1 to FS 4
    Input TC 290 for .00
    - Do not adjust for lines 1 – 9.

  6. Refer Forms 1040X to the Lead, Manager, and Planning Analysis Analyst, if necessary, for any of the following reasons, provided the case does not meet Cat A criteria and is not open in AIMS:

    1. There is a technical issue

    2. There is a questionable issue

    3. You need a legal interpretation

  7. The lead will forward the case to Examination Classification function for technical assistance, use a CAT-A cover sheet, marking the Other box. The Examination Classification function should respond within 3 days. Do not input TC 971.

    1. Clearly state the question or problem on the CAT-A cover sheet.

    2. Attach any pertinent background information or research.

3.11.6.3.5.1  (09-16-2013)
Category A criteria

  1. To determine whether a return meets Cat-A criteria see Examination Criteria (CAT-A) – General and seeExamination Criteria Cat A - credits.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. 3.For Form 5405 Cat-A criteria see IRM 3.11.6.8.13.4.1

    Reminder:

    The xClaim tool will identify Cat-A criteria for FTHBC and identify if there was an audit in a prior or current year for this issue. The response screen will provide information if there was a prior year audit. A prior year audit does not qualify for audit reconsideration since different years are involved. The response screen states continue with the Cat-A assessment which means route as Cat-A. If the audit occurred in the same tax year the response would state route to audit reconsideration.

  4. 4.For CC DDBCK Cat-A criteria see IRM 3.11.6.7.1

  5. When EIC is increasing and Schedule C meets Cat A criteria input CC DDBCK prior to referring the case to Cat A. If the DDBCK validation results screen shows the case as "Selected" refer the case to Exam using the "Selected" cover sheet. Otherwise refer the case as Cat Afor the Schedule C.

  6. If the case is being forwarded to Cat-A:

    • A partial adjustment may be required, see IRM 3.11.6.3.5

    • Do not input a TC 971 AC 013.

  7. Once identified these cases will be placed in a special sort identified as Cat A and the issue will be identified by checking a box as to its category on a summary sheet. This will be expedited to CIS/AM for disposition to exam.

3.11.6.3.5.2  (09-18-2013)
Exam/-L Freeze Claim Processing

  1. 1.Accounts with a –L freeze indicate they have been selected for potential audit.

  2. 2.If an –L freeze is present use CC AMDISA to determine the AIMS status. The AIMS status will determine the current status of the potential audit; therefore, processing procedures differ based on the AIMS status.

    Note:

    If there is an open IDRS control base to CI-SDC continue to follow processing procedures outlined in IRM 3.11.6.3.4.2 Do NOT refer the case to IVO.

  3. 3.For accounts with a –L freeze and the AIMS status is 08 or less:

    • If the claim does NOT meet CAT-A criteria, process the claim following normal processing procedures. (Ensure the -L freeze / TC 420 was not generated by DDBCK prior to processing.)

    • Include PC 1 to prevent an unpostable condition (automatically input by xClaim).

    • Do NOT forward the case to Exam.

    Reminder:

    If both a priority code 8 and priority code 1 are needed on an adjustment use priority code 1.

    Exception:

    A TC 290 for zero without credit reference number 766 or 806 will post without a priority code.

  4. 4.For accounts with a –L freeze and the AIMS status is greater than 08:

    • Route based on the Exam Employee Group Code (EGC) identified on AIMS. See link to the EGC which is located on SERP under Who/Where Exam Employee Group Code.

    • Follow local procedures for routing See IRM 3.11.6.3.4 paragraph (3).

    Exception:

    If the AIMS status is 90 indicating a closed audit or there is a pending TC 300 - 361 refer the case to CIS/AM so they can make the determination if the 1040X is an audit reconsideration.

  5. 5.If the case is being forwarded to Exam:

    • A partial adjustment may be required, see IRM 3.11.6.3.4.

    • Input a TC 971, AC 013. Use the received date of the amended return for the transaction date.

    Exception:

    On CC DDBCK “Selected” cases IDRS will automatically input the TC 971 / 013 when a TC 971, 010 is not present on the account.

    Caution:

    If a dependent on the account previously had an ITIN and now has a valid SSN, DDBCK must be used to update the exemption to the SSN. Send a Form 4442 to the Austin ITIN Unit to have the ITIN revoked. Annotate both TIN’s on the Form 4442 referral and specify which TIN should be revoked. The reason for revoking the ITIN is the dependent now has a valid SSN per IRM reference 3.11.6.8.3(4).

3.11.6.3.5.3  (01-01-2014)
Taxable Amended Return Program

  1. Examination started an initiative related to taxpayers filing amended returns with income "increases" .

  2. Examination wants to review amended returns meeting the following criteria:

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

    Note:

    The amended return criteria is based on gross income changes, without regard to any related deductions, offsets, or the amount of change in any tax or credits.

  3. Accounts Management and Submission Processing will continue to process the amended returns following normal procedures. CAT-A criteria still applies. If the account already has Exam involvement, refer to IRM 3.11.6.3.5.2, Processing Amended Returns With Examination Involvement and IRM 3.11.6.3.5.3 Claim Processing for additional details.

    Example:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. Upon completion, a copy of the amended return should be forwarded to Examination for inclusion in the program.

    Note:

    Do not input a Transaction Code 971 Action Code 013 when forwarding this copy to Examination.

  5. Processing the 1040X:

    • Complete all necessary case actions.

    • Fax a copy of the amended return to theTaxable Amended Return ProgramThe fax number is≡ ≡ ≡ ≡ ≡ ≡ ≡ and is for internal use only.

      Note:

      The faxing of these documents can be assigned to the clerical function depending on local procedures. The copy produced by the fax machine should be destroyed as classified waste after the fax transmission is confirmed.

    Note:

    Only the first 10 pages of the amended return need to be faxed on large documents.

    • Forward the closed case to files following normal procedures.

3.11.6.3.5.4  (08-06-2013)
Voluntary Disclosure

  1. Voluntary Disclosure cases refer to amended returns reporting "Off Shore" income that had previously not been reported.

  2. Route all Voluntary Disclosure claims to:
    LB and I, Austin Campus
    Offshore Voluntary Disclosure Initiative
    Mail Stop: 4301 AUSC
    Austin, Texas 73301

  3. Some cases will not meet voluntary disclosure criteria. These will be returned/routed to us on a routing slip with the Remarks: "This tax return does not meet OVDI criteria. OK to process"

    Caution:

    Normal criteria and verification procedures still have to be followed.

3.11.6.3.6  (08-06-2013)
Processing of Form 1040X Returns submitted under the Streamlined Program

  1. 1040X returns submitted under the Streamlined program need to be processed by Philadelphia Accounts Management (AM) as they are considered International returns. However, Large Business and International (LB and I) is requesting that all refunds be frozen until classification is performed by LB and I. These submissions will consist of original returns as well as Form 1040X/Amended Returns.

  2. LB and I will be reviewing these returns/claims to see if they qualify for the streamlined program. They are also requesting that original returns and amended returns from the same taxpayer be maintained as a package. If a 1040X meets the criteria of the streamlined program it will be sent to the Austin Submission Processing 1040X area along with any related original returns to have a TC 290 .00 input for the Form 1040X. There are different processes depending on whether or not the 1040X is alone or is accompanied by a 1040:

    1. If the 1040X returns need a TC 290 .00 as determined by LB and I as a notation on the route slip the 1040X area will input the TC 290 .00 and the 1040X will go to files if no original 1040 is attached.

    2. If the package is mixed 1040Xs and 1040s, the package will be kept together. The 1040X will have the TC 290.00 input by the 1040X area indicating “NSD” (No Source Document) on the input and the 1040X(s) will then accompany the original 1040(s) to pipeline for processing. The entire package will be sent to PIN Unit.

3.11.6.3.7  (09-23-2013)
Identity Theft

  1. The IRS will track identity ID) theft or data loss incidents using service wide indicators on the IMF. Specifically, these codes will be placed on the IMF as Transaction Code (TC) 971 with an Action Code (AC) of 501, 504, 505, 506, 522, 523 or 524.

    Note:

    TC 971 AC 134 on account Indicates IVO or criminal investigation, -R freeze and indication of Letter 4464C sent.

  2. Identifying and discovering Identity Theft is everybody's responsibility. This is not a straight forward or clear cut process, however, there are certain indicators that will suggest possible identity theft. Please see the list in IRM 3.11.6.5.4 This list is used in the section covering amended Form 1040 with no 1040X attached/True Duplicates, but applies to Form 1040X as well.

  3. If the taxpayer indicates in the Explanation of Changes section of Form 1040X that they were a victim of identity theft or on a separate note, treat as an identity theft case.

  4. Form 14039, Identity Theft Affidavit, is completed by taxpayers and sent to the IRS to identify themselves as victims of ID Theft. Some of these forms involve tax related issues. Taxpayers send this form in by itself or attached to a letter or notice. They also will send them in attached to Form 1040 series returns. Returns with Form 14039 attached should be treated as identity theft cases. This would apply to loose forms as well as forms attached to a letter or notice.

  5. Once an amended 1040X is identified as being an ID Theft return, route to CIS/AM, notating "ID Theft"

  6. Once a Form 1040 series is identified as being an ID theft return it needs to be routed to batching. In the upper left hand corner of the return notate "PAO” (Process as Original).

    Note:

    These returns may or may not have a TC 150 posted.

3.11.6.3.8  (09-23-2013)
Underreporter Function Cases

  1. All correspondence and Forms 1040X must be reviewed for a change to AUR criteria. Referrals to AUR should only be for AUR criteria which involve verifiable information. Verifiable information is any information that can be verified on IRPTR by AUR (i.e income, withholding, mortgage interest). Verifiable information does not include changes to filing status, dependents, exemptions or correcting a math error. AUR will return all Forms 1040X and correspondence if it does not meet their criteria.

    1. When the taxpayer is NOT changing verifiable information, process the return without regard to AUR. Do NOT route cases to AUR that do not address or do not request reconsideration of a previous AUR adjustment.

      Note:

      Do not reverse an AUR adjustment.

    2. If there is reasonable doubt as to whether the change is AUR criteria or not, refer to your workleader or manager for determination. If additional assistance is required, contact the appropriate Automated Underreporter (AUR) Coordinator. A listing is provided under the http://serp.enterprise.irs.gov/databases/who-where.dr/aur-coordinators.htmon the Servicewide Electronic Research Program (SERP) home page. Do not share the telephone contact information with the taxpayer.

  2. If it is determined that AUR criteria has been met, check TXMOD/IMFOL for a TC 922 on the module. Identify the Underreporter Process Code associated with the TC 922. The last process code (2 – digit) shown beside the TC 922 will determine its status. Use the chart below when determining the course of action to be taken.

    Note:

    Please route and notate the appropriate AUR stop number to prevent the mail function from identifying the route as a 1040X. The case needs to go directly to the respective AUR team. See for a list of AUR stop numbers.

    If: Then:
    TC 922 and the last process code is 09, 30, 34, 54, 55, 57-60, 75, 77-79, 81, 95, 97-99 Case is open in Underreporter:
    RouteForm 1040X to the campus where the case is assigned. First two digits of the TC 922 DLN identifies where the case is assigned.

    Note:

    Input TC 971 AC 015.

    TC 922 and the last process code is 18 Refer to local KITA Coordinator.
    TC 922 and the last process code is 25, 46 or 65 Continue to process the Form 1040X unless there is a Z freeze on the module. If Z freeze is present, refer to Criminal Investigation (CI) Fraud Detection. See IRM 3.11.6.3.5 Note under paragraph 1.
    TC 922 and the last process code is 35, 36, 38, 44, 62-64, 66, 72, 80 or 82-86 Route to exam. Input TC 971 013.
    TC 922 and the last process code is 20, 53, 67, 68, 87, 88, 90, or 94 The AUR issue or case was closed. AUR reconsideration cases are routed to AUR. Please see paragraph (4) below for identifying and routing AUR reconsideration claims.

    Note:

    If you are unable to determine if the claim is related to the AUR issue continue to process the Form 1040X.

  3. The only process codes listed on the chart above are the codes submission processing needs to route to other areas. For a complete listing refer to Chapter 8, Section 19 of Document 6209.

  4. Many times a Form 1040X will be filed as an AUR reconsideration case. Form 1040X should be considered an AUR reconsideration case if AUR criteria as stated in paragraph (1) above and the following additional criteria are met:

    • TC 922 for the referenced tax period

    • TC 29X (subsequent to the TC 922) with any of the following blocking series:
      050-070, 500-519, 550-589, 600-619, 650-679, 980-999

      Note:

      Cases meeting the above criteria should be routed directly to the controlling AUR site based on the location code of the TC 922 DLN. See Who/Where on SERP When routing input a TC 971 / AC 015 to indicate case referral to AUR. Follow local procedures for routing.

    Note:

    xClaim will issue a caution with the same instructions for AUR reconsideration as above.

3.11.6.3.9  (08-06-2013)
Accounts Management Cases

  1. Cases are referred to Accounts Management (AM) based on the issue, the dollar tolerance, computer program capabilities (e.g. Blocking Series), and other various reasons. Refer to the specific IRM instruction or the 1040X Routing Guide see IRM 3.11.6.12. Also see IRM 3.11.6.3.4 on screening and sorting Cat A criteria.

  2. Route all AM returns to Correspondence Imaging System (CIS) to be scanned. Follow any local procedure for separating the "Carryback/Carryforward" , "Disaster Claims" , etc. that require special handling.

    Note:

    In the history section of IDRS a CIS number will identify a case that has been CIS imaged. There can be multiple CIS cases. The number will consist of "CIS and 7 numbers/letters"

  3. If a return has an open case to CIS/AM see IRM 3.11.6.3.23.

  4. If a return has been CIS imaged then refer to CIS/AM.

  5. A return must have a TC 150 posted before routing. See IRM 3.11.6.5.2 and IRM 3.11.6.5.2 .

    Exception:

    If a CIS imaged return is stamped/edited "Process as Original" or similar verbiage and there is no TC 150 posted/pending then route the document to Receipt and Control to be processed as an original. When feasible use Prior Year and Conversion Form 1040 Edit Sheet for Tax Year XXXX See Form 1040 Edit Sheet. If it is current year and the conversion form is not available then "dummy" a current year Form 1040 for processing.

3.11.6.3.10  (01-01-2014)
Affordable Care Act and Possible Health Professional Claims

  1. The Affordable Care Act enacted April 2010 expanded tax benefits for health professionals working in under served 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 1040X, 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”, please route the claim to CIS/AM as they will be processing these claims.

3.11.6.3.11  (01-01-2014)
Taxpayer Advocate Service Cases (TAS)

  1. When a taxpayer asks to be referred to TAS or the taxpayer meets TAS criteria (listed below), refer the case to the unit manager. Review all attachments for taxpayer notations/correspondence to determine whether the taxpayer meets TAS case criteria or requests TAS assistance.

    • 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 is not granted (including fees for professional representation)

    • The taxpayer will suffer irreparable injury to, or long term adverse impact if relief is not 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 taxpayers problem or dispute within the IRS.

  2. If the taxpayer's issue cannot be completely resolved within 24 hours, but steps are taken to begin resolving the taxpayers issues within 24 hours, then do not forward Form 911 unless the taxpayer asks to be referred to TAS. The unit manager will ensure that a Form 911, Application for Taxpayer Advocate Assistance Order (ATAO), is timely forwarded to the local TAS office when necessary. (For additional information see IRM 13.1.7.4)

  3. Follow local procedures for routing to TAS.

    Note:

    Open controls to TAS can be identified by Control Category of ATAO or the Assigned to Employee IDRS number starts with 63.

3.11.6.3.12  (02-01-2013)
Identifying Frivolous Claims

  1. The IRS is faced with a growing number of individuals who file frivolous tax returns based upon tax avoidance arguments that are not supported by law. Internal Revenue Code (IRC) Section 6702 (a) provides for the assessment of penalties for filing frivolous tax returns.

  2. 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. Recognized frivolous arguments made by both individuals and businesses are included, but are not limited to, a list in Exhibit 3.11.6-4 Frivolous Claims.

  3. Effective January 1, 2010, a new action code, TC 971 AC 089, was implemented to indicate to IDRS users that a frivolous return has been received. An F- freeze is generated on all tax periods and a CP 72 is issued to the taxpayer. The TC 971 AC 089 will freeze the entire account. Adjustments should not be made to accounts showing an F- freeze.

  4. Route any "suspicious" return to the designated boxes in Submission Processing as well as claims with an F- freeze. The same boxes can be used for original returns, as well as claims (e.g. Forms 1040X) identified as "frivolous claims" , or follow the most efficient local procedure. The Frivolous Return Programmer (FRP) Coordinator will review any return which the taxpayer:

    1. Argues for any reason for filing a tax return or the paying of taxes.

    2. Uses one of the frivolous arguments or statements in Exhibit 3.11.6-4 Exhibit, Frivolous Claims.

    3. Marks out or alters in any manner, the penalty or perjury statement (i.e. the jurat) in the signature area.

    4. Input TC 971 with Action Code 013. Enter "Sent to FRP" in the remarks area.

  5. If a non-frivolous claim is received and CC TXMOD shows an open control base to an employee in the FRP (Unit Numbers: 04690, 04691, 04692, 04693 or 04694, route to FRP.
    IRS Frivolous Return Program
    1973 N Rulon White Blvd
    Mail Stop 4390
    Ogden, UT 84404

3.11.6.3.13  (01-01-2014)
International Returns

  1. Route all International returns to CIS so they can be scanned and shipped electronically to the International Department Accounts Management in Philadelphia. The public is instructed to send international 1040Xs to Austin so they can be scanned into CIS. Philadelphia does not have a scanning operation.

    Note:

    A list of the International claims is included in Exhibit 3.11.6-5 PSPC International Returns. Common indicators of claims or forms to be routed are Foreign Addresses and Dual Status.

  2. Do not process any Form 1040X if all the Forms W-2, and Forms 1099 attached are from the Virgin Islands (regardless of the address). Pull these returns and transship to the following address:
    Virgin Islands Bureau of Internal Revenue
    9601 Estate Thomas
    Charlotte Amalle
    St. Thomas, U.S. Virgin Islands 00802

  3. Route to CIS/AM if dual status is indicated by the following conditions on an "amended" Form 1040:

    Form 1040 Revision is: Filing Status Line is checked and Line is blank or zero
    2006 and subsequent Other than 3 39b 40

  4. Do not True Dupe International returns.

3.11.6.3.14  (09-18-2013)
Form W-7 and ITIN Research (Austin Only)

  1. Form 1040/A/EZ/NR/X that have a red W-7 stamped in the bottom left corner of the return have been received from an ITIN Unit. IDRS research is needed to determine whether there is a TC 150 posted on the TIN provided or under a different TIN.

    • If the primary and/or secondary taxpayers have a newly issued ITIN, follow the instructions below in addition to normal processing procedures..

    • If only the dependents have a newly issued ITIN, follow normal 1040X procedures. (If the dependent has “ITIN REJECT” stamped in the TIN area of the form, follow the procedures outlined in IRM 3.11.6.8.3.1 (4- Exception)

  2. W-7 returns that meets CIS/AM criteria should be placed on the CIS/AM cart. When a W-7 return is a duplicate, "TRUE DUPE" , research IDRS for ANY changes. If there are NO changes, treat as classified waste.

    Exception:

    If attaching an IMFOLR screen print per instructions below, route to CIS/AM using the current ITIN/IRSN DUPS cover sheet.

  3. Research IDRS (e.g., CC NAME, INOLE, DUPED and DDBKD, etc.) for a TC 150 under the primary (and secondary) taxpayer(s) for multiple issued TIN’s and route according to the chart below.

    IF AND THEN
    A TC 150 is posted The return is a TRUE DUPE Treat as Classified Waste
    A TC 150 is posted The return is NOT a TRUE DUPE Continue to research Primary (and Secondary) TIN for multiple TIN(s)
    A TC 150 is posted The Primary (or Secondary) TIN is different than found on the return Attach an IMFOLR screen print (for each TIN, if more than one) to the return and route to CIS/AM
    A TC 150 is posted The Primary (or Secondary) TIN is the same, but other issues Process the return as a Form 1040X
    No TC 150 is posted There is more than one TIN for the taxpayer Route to Receipt & Control to be processed as an original return, using the ITIN
    No TC 150 is posted 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, and route to Receipt & Control to be processed as an original return
    No TC 150 is posted The return contains both an ITIN and SSN are found for the primary taxpayer Circle the primary taxpayer’s ITIN, edit the SSN and route to Receipt & Control to be processed as an original return

    Note:

    When performing your research on IDRS for a TC 150, use Primary, Secondary and Dependent information from the return and IDRS to exhaust all filings from the taxpayer, remembering that different Command Codes have different information:

    • CC NAME gives many names that the taxpayer may be using; therefore, when a last name has multiple names, it is necessary to use all names – by themselves and together – to ensure correct research. Do NOT let address differences get in the way of correct TIN determination.

    • CC INOLE gives all associated TINs under which the taxpayer filed returns.

    • CC DUPED and DDBKD for each of the dependents, if any, may help determine a correct TIN for the primary taxpayer.

  4. When “ITIN REJECT” is stamped in the primary taxpayer’s SSN box and:

    • You cannot locate a TIN after researching IDRS, route the return to Entity using local procedures.

    • You locate the correct TIN, circle “ITIN REJECT”, editing the correct TIN, and follow the chart in paragraph (3) above.

  5. When “ITIN REJECT” is stamped in the secondary taxpayer’s SSN box and:

    IF AND THEN
    You cannot locate a TIN after researching IDRS Income subject to SE tax is being reported for the secondary taxpayer Route the return to Entity using local procedures.
    You cannot locate a TIN after researching IDRS A math error already exists for the secondary TIN Route to CIS/AM
    You cannot locate a TIN after researching IDRS Neither condition previously listed applies  
    You locate a TIN after researching IDRS   Continue to process per the chart in paragraph 3 above

    • You cannot locate a TIN after researching IDRS, correspond and set a math error per IRM 3.11.6.6.5

    • Through your IDRS research, you locate the correct TIN, continue to process per the chart in paragraph (3) above.

  6. For W-7 cases, enter the date from Form 3471, if attached, as the Amended Claims date.

3.11.6.3.15  (01-01-2014)
Killed in Terrorist Action (KITA)

  1. Route all claims identified as "Killed in Terrorist Action (KITA)" , "Killed in Action (KIA)" to the KITA Coordinator in Accounts Management for processing.

    Note:

    A list of current KITA/KIA Coordinators can be found at the SERP homepage under the "Who/Where " tab. Do not input a TC 971. Place an ACTON history item " TO KITA" on TXMOD.

  2. If "KITA" is indicated on TXMOD (upper right corner on first line), route to KITA Coordinator.

3.11.6.3.16  (08-07-2013)
Collection Function Cases

  1. The following should be detached and routed to the Collection Function if attached to the Form 1040X. Continue processing the amended return.

    1. Form 9465, Installment Agreement Request, or a written request for an Installment Agreement located in the Form 1040X, Explanation of Changes, or a separate attachment. Detach any Installment Agreement request and route to Collection as soon as you identify it, even if you suspend the Balance Due return for correspondence.

      Note:

      When the taxpayer does not submit a Form 9465 but has requested an installment agreement follow local procedures.

    2. CP 503/504, Taxpayer Notification of Federal Tax Not Received

    3. CP 523, Past Due Payment Default Notice

      Note:

      Verify that the taxpayer's name, TIN, and tax period are present on any detached item; perfect as necessary.

  2. Route all Automated Substitute For Return (ASFR) to Collections. The most distinctive way to identify an ASFR account is the TC 150 for .00 with an "SFR" literal to the right of the Document Locator Number (DLN) on TXMOD or the " SUBST4" on IMFOLI "Vestigial: Assessed Posted Return" column.

    Exception:

    Research TXMOD. If there is a TC 599 cc: 89 which indicates a return has been processed, the 1040X must be routed to CIS/AM. Notate on case per IRM 21.3.4.14.1.1 If there is a TC 599 cc: 88 on TXMOD this is an ASFR Reconsideration and should be routed to:
    Fresno Campus
    ASFR Unit Stop 81304
    PO Box 24015 Fresno, CA 93779–4015

  3. Input TC 971/AC 012 only when sending the entire return to Collection.

  4. The T- Freeze is a TDA Status alpha indicator showing the account is assigned to Collections. The module is not frozen. T- Freeze accounts are assigned to specific Collection functions which are indicated by the Status Code: Status 22 is in ACS (Automated Collection System), Status 24 is in the Queue, and Status 26 is in the Collection Field Function (CFF) a revenue officer assignment.

    Note:

    Route to CIS/AM if a T- freeze is present and NO Letter 1058, CP 90, or other correspondence is attached (See 5 below.)

  5. If Letter 1058, Notice of Intent to Levy (Final Notice) or CP-90 Notice of Intent to Levy is attached to Form 1040X, and other correspondence such as request for payment plan, "can’t pay" , "won’t pay" , or "will pay later" , etc., route to Automated Collection System (ACS) as follows:

    Note:

    For IMFOLT the case status can be found under: STATUS:. For TXMOD the case status can be found under: Status. SC-STS. For IMFOLI the case status can be found under: STAT HIS

    If And Then
    IMFOL/TXMOD shows the case is in Status 22 or 24 The IRS address is on the top of the letter
    1. Detach the correspondence.
    2. Input TC 470, no closing code using REQ77.
    3. Leave a working trail on the correspondence and the Form 1040X. IRM 3.11.6.1.2.2
    4. Route the correspondence to the IRS address on the top of the letter.
    5. Continue processing Form 1040X.
    IMFOL/TXMOD shows the case is in Status 22 or 24 The IRS address is not on the top of the letter 1058 and correspondence is attached

    Exception:

    If no letter or correspondence is attached, continue processing Form 1040X.


    1. Research the appropriate ACS Support Site on SERP (http://serp.enterprise.irs.gov) under the Who/Where tab, select the link to ACS Support Liaison.

    Note:

    The BOD Code (W&I or SB/SE) will be needed to select the appropriate link.


    2. Detach the correspondence.
    3. Input TC 470, no closing code, using REQ77.
    4. Leave a working trail on the correspondence and the Form 1040X. IRM 3.11.6.1.2.2
    5. Mail the correspondence to the ACS Correspondence Address indicated on SERP.
    6. Continue processing Form 1040X.
    IMFOL/TXMOD shows the case is in Status 26 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 TXMOD.

    Route entire package to ASFR at either Austin or Fresno based on State mapping. See exceptions below because ASFR generally does not work 1040X claims.

    Exception:

    Research TXMOD. If there is a TC 599 cc: 89 which indicates a return has been processed, the 1040X must be routed to CIS/AM. Notate on case per IRM 21.3.4.14.1.1 If there is a TC 599 cc: 88 on TXMOD this is an ASFR Reconsideration and should be routed to:
    Fresno Campus ASFR Unit
    Stop 81304
    PO Box 24015 Fresno, CA 93779–4015

    Caution:

    Do not route returns with imminent or expired ASED. Bring returns imminent or expired ASEDs to Statute Coordinator or manager.

    IMFOL/TXMOD shows the case is in Status 26,

    Note:

    Route all amended returns when at least one tax period is in status 26.

    The last four digits of the Collection-Asgmt>field is NOT 8000, i.e. xxxxxxx
    1. Research the appropriate Revenue Officer Group office address on SERP (http://serp.enterprise.irs.gov) under the " Who/Where " tab, select the link RO by TSIGN/ZIP/STATE.

    2. Input TC 470, no closing code, using REQ77.
    3. Input TC 971 AC 012 for audit trail purposes to show where claim was sent.
    4. Route the entire case to the address obtained from SERP.
    5. If the RO calls to inquire why the 1040X was routed to them explain we cannot process the amended return without their approval since it is assigned to them.

    Note:

    At times even with it in status 26 the account is not assigned to a RO. Once it is placed in status 26 it is assigned to a group the very next cycle.

  6. Adjustment procedures when a -Y freeze is present on the module:

    1. If there is a unreversed TC 480 (OIC pending) alone on the module normal processing procedures should be followed as there is no prohibition on making adjustments to the module.

    2. If there is a unreversed TC 480 and TC 780 (accepted OIC), refer the case to the appropriate campus based on the Monitoring Offer in Compromise (MOIC) Compliance Campus Locations for Offers in Compromise. See the Monitoring Offer in Compromise (MOIC) Compliance Campus Locations for Offers in Compromise located on SERP under the Who/Where tab, to determine the appropriate campus site.

  7. If unable to determine the correct adjustment consult your work leader or manager.

3.11.6.3.17  (01-01-2014)
Innocent Spouse (Form 8857)

  1. Innocent spouse/joint and several liability relief claims and Forms 8857, Request for Innocent Spouse Relief, are centralized at Covington, KY. Route innocent spouse claims on Forms 8857, or Form 1040X referencing innocent spouse (with or without Form 8857 attached) as follows:

    If Then
    The only issue is innocent spouse/joint and several liability relief and there is no adjustment to be made to the account (e.g."True Duplicate" ) 1.Photocopy the Form 1040X. Edit/Stamp "No action/issue" across the top of the photocopy. File the return with a TC 290 .00 or attachment Form 9856 , use the DLN of the TC 150. Input TC 470 (using REQ77) for all tax periods listed on the Form 8857. Include closing code 90 UNLESS the account is in status 26. To determine the status, refer to the fifth line on TXMOD " SC-STS>" . On those accounts showing status 26, input TC 470 with no closing code.
    2. Input TC 971 with action code 065 for all tax periods listed on the Form 8857 .
    3. Notate TC 971/470 and appropriate closing code and the date in the upper left margin of Form 1040X.
    4. Mail Form 8857/Form 1040X to (must be mailed daily):
    IRS
    Stop 840F
    P.O. Box 120053
    Covington, KY 41012
    Form 1040X is filed and involves both the innocent spouse issue AND another separate issue(s) that requires an adjustment to the account 1. Photocopy the Form 1040X. Edit/stamp "Copy - Do Not Process" across the top of the photocopy.
    2. Detach Form 8857 and attach a copy of Form 1040X to the front of Form 8857. If Form 8857 is not attached, notate "No Form 8857 Received " on the copy of Form 1040X.
    3. Input the adjustment(s).
    4. Follow 1 through 4 in the preceding IF/THEN statement. Mail Form 8857 with the photocopy of the and the copy of Form 1040X.

    Note:

    EXPEDITE routing is now required on Form 8857 and claims should be mailed daily.

3.11.6.3.18  (09-16-2013)
Injured Spouse Allocation (Form 8379)

  1. If the taxpayer files Form 8379 with Form 1040X, process the Form 1040X. If the adjustment will result in a credit balance or the account is in a credit balance input a hold code 1 to prevent refund issuance and allow AM to allocate the credits correctly per the Form 8379.

  2. Input the adjustment as "No Source Document" (NSD). Once the adjustment is complete bring the Form 8379 to the top of the claim and route the entire original package to CIS/AM. Input a TC 971 AC 071.

  3. If the taxpayer is filing a Form 1040X with the sole purpose of filing the Injured Spouse Claim and no other issue is involved then input a TC 290 .00 as "No Source Document" (NSD) and close the control base and change the Category Code to MISC. Bring the Form 8379 to the top of the claim and route the entire original package to CIS/AM. Input a TC 971 AC 071.

    Note:

    The TC 290 .00 does not require a reason code.

  4. If the return does not meet SP criteria, do not input an adjustment or a 290 .00. Bring the Form 8379 to the top of the claim and route the entire original package to CIS/AM. Input a TC 971 AC 071.

  5. If the return meets SP criteria but is incomplete, correspond for the missing information or signature per normal procedures. See IRM 3.11.6.9 Conversely if the return does not meet SP criteria do not correspond for missing information or signatures as there could be additional information required for the Injured Spouse claim that accounts management would correspond.

  6. If the taxpayer indicates an Injured Spouse Allocation, but does not submit Form 8379 route the entire package to CIS/AM.

    Note:

    Do not input a TC 971 AC 071.

  7. Do not confuse Injured Spouse and Innocent Spouse although both forms will be routed out

3.11.6.3.19  (08-06-2013)
Pension Protection Act of 2006 (Active Duty Reservist)

  1. The Pension Protection Act of 2006 waives the ten-percent penalty tax that normally applies to most retirement distributions received before age 59 1/2. This law provides this penalty relief to reservist called to active duty for at least 180 days or for an indefinite period of time beginning after September 11, 2001.

  2. Taxpayers have been instructed to write "Active Duty Reservist " in the top margin of the Form 1040X. If the 10% tax was already paid on a distribution. Eligible reservists may file Form 1040X Amended U.S. Individual Income Tax Return, 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

    Note:

    Process claim using reason code 048.

  3. If the taxpayer does not provide the early retirement distribution amount or tax paid and the distribution cannot be verified through IRPTR or the active duty date is not provided, correspond using Form 8009-A box 25 or 324C Paragraphs: A, V, Y. Use 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.

3.11.6.3.20  (09-16-2013)
Combat Zone

  1. Submission Processing will only process Combat Zone claims with net refund or zero balance. Any balance due Combat Zone returns must be routed to CIS/AM

    Note:

    When processing do not enter an Amended Claims date.

    Note:

    Do not apply CAT A criteria to Combat Zone returns, but continue to route to CIS if they meet CIS/AM.

    Note:

    A taxpayer (or the spouse, if married filing jointly) receiving nontaxable combat pay may elect to include the amount when figuring his/her earned income for purposes of computing EITC.

    Exception:

    All protective claims must be referred as CAT-A even if the taxpayer is actively serving in a Combat Zone.

  2. Several clues to determine if Form 1040X is a Combat Zone return are:

    1. "-C freeze"

    2. Taxpayer has indicated Combat Zone on the return.

      Note:

      If the literal "Combat Zone" is present on IDRS ensure there is a -C freeze before processing as Combat Zone. The literal without the freeze code is only an indication of past Combat Zone status on the account.

  3. If a -C Freeze , is posted on TXMOD/IMFOL, then IMFOLE or ENMOD will show a TC 500 with one of the following Closing Codes

    • CC 56 (Enduring/Iraq Freedom/No Specific Campaign)

    • CC 57 (Exit Date)


    If present, continue processing the return.

  4. If there is no -C freeze on a return that has been identified as a Combat Zone return, input a TC 500 with closing code 56 using REQ77. If the taxpayer provided a Date of Entry or Deployment, use that date for the TRANS-DT; otherwise use the IRS Received Date.

  5. If a TC 160 is already present on the account route to CIS/AM.

  6. If a "-I/I-" or "G-" Freeze Code is present, refer to CIS/AM

  7. Follow correspondence procedures (IRM 3.11.6.9) when required information is missing from the return.

  8. Do not True Dupe Combat Zone returns.

  9. Refer to IRM 3.11.6.8.1.2 if "Military Family Tax Relief Act" is indicated on the Form 1040X.

3.11.6.3.21  (01-01-2014)
Military Retirement Benefit Claims

  1. Taxpayers file Form 1040X claims based on a recalculation of disability retirement income received from the Government for their military retirement. These claims are based on IRC section 122 and recalculate the amount of taxable versus non-taxable income received. This is a misinterpretation of the Code section and is not allowable. The Form 1099-R issued by the Government does not include any amounts received as disability and the taxpayer in actuality is attempting to take a double deduction.

  2. Disallow any claim citing "Internal Revenue Service Section 1.122-1" or "Pursuant to 26 CFR", unless the VA Determination letter with entitlement award is included with the claim. The letter will show the award amount and the monthly entitlement award. If the letter and entitlement award are present route to CIS/AM, otherwise follow paragraph (3) for disallowance procedures.

  3. Refer to IRM 3.11.6.9.3 for disallowance letter and use fill-in: "You are incorrectly applying the formulas under section 122 to your retirement pay that was reported on Form 1099-R. The nontaxable amount (if any) was already deducted by the Department of Defense from the amount shown on your Form 1099-R. You are not entitled to any further reduction."

3.11.6.3.22  (09-16-2013)
Processing Decedent Returns

  1. Submission Processing will only process Balance Due and Zero Balance decedent 1040X 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 persons name.

    6. "Estate of" is present.

    Note:

    For further information see Inputting Name Changes for Deceased Taxpayers

  3. Correspond for missing signature if return is not signed by a surviving spouse, an attorney, CPA or representative of bank/fiduciary institution (credit union, pension funds, etc.). Correspond per IRM 3.11.6.9 using a 324C letter, paragraphs A, P, Y, b. "The return must be signed below the jurat but not on the paid preparer line."

    Reminder:

    On MFJ claims, the surviving spouse must sign for the deceased spouse as a surviving spouse. It should clearly state the taxpayer's name filing as surviving spouse. Correspond if missing.

  4. If correspondence is required for any missing forms/schedules; do not address the correspondence to the deceased taxpayer.

    1. Filing status 2 -- address correspondence to surviving spouse

    2. All other filing status -- address correspondence to the " Estate of" ;place in front of taxpayer's name (e.g. Estate of John Smith Decd)

      Note:

      Power of Attorney (POA) becomes void upon taxpayer's death.

  5. Documentary evidence is not required for the authority to sign the following:

    1. Balance due returns

    2. Zero/even balance returns

    3. Joint (FS 2) or married filing separate (FS 3) returns signed by the surviving spouse.

  6. Route the following to CIS/AM:

    1. Refund returns

    2. MFR 08 is present on INOLES indicating taxpayer is deceased

    3. Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, is attached.

3.11.6.3.23  (08-16-2013)
Open Cases / Open Control Base

  1. Generally, if an account has an open control base in TXMOD you will need to route 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:

    Do NOT route cases that are open in ENMOD.

  2. There are 3 types of open cases:

    1. Cases that will be routed.

    2. Cases that can be worked.

    3. Cases controlled to your IDRS number.

  3. Cases in status A, S, or M should be routed based on the ASSIGN-TO field of the open control. Do NOT route cases open in B status; continue to process. 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 route to CIS/AM.

    2. Refer cases with a category code NLUN, to the assigned IDRS number to process

    3. Cases open to accounts management should be routed to your local CIS/AM. See (8) below.

    4. Cases open to a 1040X SP employee at your local campus should be referred to the manager or lead following local procedures.

    5. Follow local procedures for cases that are processable by placing the case in B status, inputting an adjustment and then returning it to its original status.

    6. For cases open to an SP suspense queue see IRM 3.11.6.1.2.1

    7. Cases with Activity 9465 should be placed in “B” status and processed

    8. Follow local procedures for routing cases open to TAS.

  4. 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.

  5. When routing an open case, follow local procedures for completing Form 5102, 12305, 3210, etc.

    Exception:

    See (10) below and IRM 3.11.6.3.6 for routing cases to Underreporter.

  6. Use command code MESSG and/or the IUUD website to determine the appropriate campus location and stop number based on the IDRS number in the ASSIGN-TO field of the open control.

    Caution:

    Stop numbers are not always updated timely. CC MESSG and IUUD may show conflicting information. Consult your lead or manager if different.

  7. When there are multiple open cases route the return based on the most recent open control in A, S, or M status.

  8. Accounts Management IDRS numbers are identified by the service center 2 digit code and 301-399 series. For instance a CSR in Fresno would be 103XX. Submission Processing 1040X Units would use the SC code and the 200-244 series. This includes cases open to the AM suspense queue that do NOT contain 301-399 series:

    Campus Generic IDRS number
    Atlanta 0739900025
    Andover 0848900000
    Austin 0686100000
    Brookhaven 0138640000
    Cincinnati 0237500000
    Fresno 1042000000
    Kansas City 0938000000
    Memphis 0339300000
    Ogden 0439800000
    Philadelphia 0544300093

    Note:

    See IRM 21.5.1.5.1 for a current listing

    Specialized Site IDRS Number
    Andover ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Atlanta ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Austin ≡ ≡ ≡ ≡ ≡
    Brookhaven ≡ ≡ ≡ ≡ ≡
    Fresno ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Kansas City – Carrybacks ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Kansas City – Injured Spouse ≡ ≡ ≡ ≡ ≡ ≡
    Memphis ≡ ≡ ≡ ≡ ≡
    Philadelphia ≡ ≡ ≡ ≡ ≡

    Note:

    See IRM 21.5.2.3 for a current listing.

  9. To put a case into suspense use CC ACTON. Follow local procedures for suspending and monitoring cases.

  10. When routing open cases to Underreporter use Form 12305 and route based on the DLN of the TC 922. See IRM 3.11.6.3.6 for further information. AUR Stop numbers:

    Campus Stop Number Reconsideration Cases
    Austin 6692 - AUSC 6692-AUSC
    Atlanta 45A-ATSC 84-ATSC
    Andover 860-ANSC 860-ANSC
    Brookhaven 620-BSC 622-BSC
    Fresno 86106-FSC 86106-FSC
    Ogden 6653 - OSC 6652-OSC
    Philidelphia 5-EO8.113 - PSC 5-EO8.113-PSC

  11. Follow local procedures when routing open cases.

3.11.6.3.24  (01-01-2014)
Releasing Screened Returns

  1. To release forms that are screened, sort into batches for each category and follow local routing procedures (including Batch Transmittal).

  2. "Hand carry" statute returns to the area following local procedures.

  3. For "PECF Dummy" returns to be processed through ISRP, notate the correct Program Code and Blocking Series for Batching and Numbering function.

  4. Follow IDRS screening procedures for sorting and routing returns or correspondence to another function. For Carryback/Carryforward claims, Disaster Claims, Injured Spouse, Innocent Spouse, Statute returns, etc., follow local procedures for routing to CIS/AM.

3.11.6.3.24.1  (08-16-2013)
TC 971 and Action Codes

  1. A TC 971, when input with one of the action codes shown in (2) 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 1040X must be input for the transaction date. For Action Code 270, the current date is entered when mailing a refund return back to the filer. Generally do not enter an action code if you are only routing correspondence or form attached to a Form 1040X.

  2. The action codes most frequently used by Code and Edit in conjunction with TC 971 are as follows:

    ACTION CODE DESTINATION
    010 Amended return/claim forwarded to Accounts Management (Automatically input by CIS)
    120 Amended return/claim in Submission Processing
    012 Collection (When routing the entire return)
    013 EXAM/Frivolous
    014 Statute function
    015 Underreporter function
    016 Destination International Cases amended returns/claims go to Philadelphia (Automatically input by CIS)
    065 Form 8857, Request for Innocent Spouse Relief (and Separation of Liability and Equitable Relief) filed. Route to Covington, KY.
    071 Form 8379, Injured Spouse Claim and Allocation.
    270 Amended return sent back to the taxpayer for additional information. Enter the current date as TRANS-DT.

    Note:

    For further information see TC 971 action codes in 6209

3.11.6.4  (08-16-2013)
Forms 1040X Processed through ISRP Input

  1. Before inputting any changes to a Form 1040X, check for the issue(s), freeze codes, transaction codes, math error condition, tax period, No TC 150, etc. that require routing to another area. (See IRM 3.11.6.12)

  2. If the return is not routed to another area, then check for the following items that may require correspondence or additional action:

    • Primary TIN

    • Tax period

    • Signature

    • Received date

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

    • Missing forms, schedules or other required information

    Note:

    When any Schedule or Form needed to support the change is missing and the refund is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or needed to complete a claim for CAT-A / EXAM., correspond per IRM 3.11.6.9 using Form 8009-A, box 4 or 5.


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