3.14.2  Notice Review - Business Master File (BMF) Notice Review

Manual Transmittal

November 04, 2014

Purpose

(1) This transmits revised IRM 3.14.2, Notice Review - Business Master File (BMF) Notice Review.

Material Changes

(1) Editorial changes have been made throughout this IRM. Other significant changes to this IRM are shown below.

(2) All references to FMS (Financial Management Service) changed to BFS (Bureau of the Fiscal Service).

(3) All references to NOREF cutoff day changed to Thursday.

(4) IRM 3.14.2.5.3 Corrected CAF/RAF Instructions. IPU 14U0408

(5) IRM 3.14.2.6.1 Updated NOREF Cutoff Chart. IPU 14U1131

(6) IRM 3.14.2.6.1 and 3.14.2.7.1.4.3 Removed IMF links. IPU 14U0408

(7) IRM 3.14.2.6.1(1) Removed instructions to route NOREF requests for APO, FPO and International addresses to Ogden. IPU 14U1268

(8) IRM 3.14.2.6.1(7) Added instructions to keep NOREF control base open and monitor until TC 841 posts

(9) IRM 3.14.2.6.2.1(7) Changed Category A Erroneous Refund tolerance to $500.00. IPU 14U0459

(10) IRM 3.14.2.7.1.2.3.(2)a Clarified instructions for sending first name line changes to Entity.

(11) IRM 3.14.2.7.1.2.3.(6)e Removed instructions to abbreviate North, South, East and West when shown at the beginning of city name.

(12) IRM 3.14.2.7.1.2.3 Removed Sort Name Instructions. IPU 14U1131

(13) IRM 3.14.2.7.1.6.2.2 Clarified Doc Code 24 procedures. IPU 14U0278

(14) IRM 3.14.2.7.1.9.3 Removed non applicable section -Taxpayer Correspondence and Reply Instructions. IPU14U1268

(15) IRM 3.14.2.7.4.4(1)(b) Revised Large Dollar Review-If more information is needed, give the case to the work lead for taxpayer contact. IPU14U1268

(16) IRM 3.14.2.7.4.9 Removed "PII Fraudulent Return" section.

(17) IRM 3.14.2.7.5.2 Added instructions to void refund notices with -B Freeze. IPU14U1268

(18) IRM 3.14.2.7.5.22 and 3.14.2.5.23 Corrected phone number for Appeals Customer Service Line. IPU 14U1131

(19) IRM 3.14.2.7.5.25 Changed Offer-in-Compromise instructions. IPU 14U0761

(20) IRM 3.14.2.7.7.1 Added link to Exhibit 3.14.2–5 NRPS Selection Keys. IPU 14U0188

(21) IRM 3.14.2.7.7.1(6) Added new procedures for 706/709 adjustments. IPU 14U1131

(22) IRM 3.14.2.7.7.1(8) Clarified CP 102 and CP 112 math error instructions. IPU 14U0459

(23) IRM 3.14.2.7.7.3 Missing Credit-Revised Decision Table. IPU 14U0278

(24) IRM 3.14.2.7.7.3 Added instructions to close control base. IPU 14U1369

(25) IRM 3.14.2.7.7.3(8)f Combined Decision Tables. IPU 14U0328

(26) IRM 3.14.2.7.8(5)b Revised procedures for setting -K Freeze. IPU14U1268

(27) IRM 3.14.2.7.8(6)a Changed amount to "within $10.00." IPU 14U0761

(28) IRM 3.14.2.7.8(16) Clarified CP 260 credit reversal instructions. IPU 14U0761

(29) IRM 3.14.2.7.9 Removed conflicting paragraph. IPU 14U0408

(30) IRM 3.14.2.7.10 Clarified various penalty instructions. Added link to Penalty Computation Tool in IRM 20.1.2.3.2

(31) IRM 3.14.2.7.10.6 Added IRM reference for reprocessing returns. IPU 14U0408

(32) IRM 3.14.2.7.10.6 Added instructions for number of partners. IPU 14U0408

(33) IRM 3.14.2.7.10.7 Changed Key 53 time frame for Form 1120–S to within 18 months. IPU 14U0761

(34) IRM 3.14.2.7.10.8 Added Ogden Accounts Management address

(35) IRM 3.14.2.7.10.8 Clarified routing and faxing instructions for Form 1065 Reasonable Cause Statements. IPU 14U0761

(36) IRM 3.14.2.7.12(6) Added instructions for TC 570 blocking series 55555 on BMF accounts. Do not release refund.

(37) IRM 3.14.2.7.15 Added TPNC 90 procedures. IPU 14U0188

(38) IRM 3.14.2.7.15.1 Added PCOR procedures. IPU 14U0188

(39) Clarified various penalty instructions. Added link to Penalty Computation Tool in IRM 20.1.2.3.2

(40) IRM 3.14.2.7.17.3 Corrected reference for Form 1120-S. IPU 14U0408

(41) IRM 3.14.2.7.18.1 Added instructions for obtaining e-filed prints via EUP. IPU 14U0408

(42) IRM 3.14.2.7.19.1(1) Added reminder to close control base when all actions have been taken. IPU 14U1369

(43) IRM 3.14.2.7.19.5.6 Added instructions for Abstract 133-PCOR Returns. IPU 14U0188

(44) IRM 3.14.2.7.20(12)b Added link to Document 6209 for complete listing of DPCs. IPU 14U0188

(45) IRM 3.14.2.7.23(12) Deleted conflicting instructions for holding notices. IPU 14U0459

(46) IRM 3.14.2.7.23.7(1) Added reminder to close control base when all actions have been taken. IPU 14U1369

(47) IRM 3.14.2.7.24 Removed IMF instructions. IPU 14U0408

(48) IRM 3.14.2.10.1(6) Added reference to 3.14.2.10(4), Action 61 exceptions. IPU 14U1380

(49) IRM 3.14.2.10.4(5) Added clarification for determining Third Party Authorization. IPU 14U1380

(50) IRM 3.14.2.10.4(6) Added interest (TC 770) to be allowed with refund. IPU 14U0188

(51) IRM 3.14.2.10.7 Added instructions to send Trustee name change requests to Entity (CP 267 replies). IPU 14U1131

(52) Exhibit 3.14.2-3 Updated BMF Notices and Refund Transcripts Table. IPU 14U1131

(53) Exhibit 3.14.2-5 Clarified Category C corrected tolerance amounts-Category G Key 24 Pending debit transaction present. IPU 14U0761

(54) Exhibit 3.14.2-24 Added link to Labeling Notices. IPU 14U0408

(55) Exhibit 3.14.2-24 Updated flow chart LCF cutoff times. IPU 14U0459

Effect on Other Documents

IRM 3.14.2 dated November 8, 2013 (effective January 1, 2014) is superseded. The following IRM Procedural Updates (IPUs), issued from January 27, 2014 through June 13, 2014, have been incorporated into this IRM: IPU 14U0188, IPU 14U0278, IPU 14U0328, IPU 14U0408, IPU 14U0437, IPU 14U0459, IPU 14U0761, IPU 14U0999, IPU 14U1131, IPU 14U1268, IPU 14U1369, IPU 14U1380.

Audience

Business Master File (BMF) Notice Review Tax Examiners primarily in Cincinnati and Ogden, Submission Processing Campuses.

Effective Date

(01-01-2015)

Paul J. Mamo
Director, Submission Processing
Wage and Investment Division

3.14.2.1  (01-01-2015)
Notice Review Overview

  1. This section provides instructions to the Notice Review function for reviewing Business Master File (BMF) Computer Paragraph (CP) notices. These notices are selected for review by the Notice Review Processing System (NRPS).

    Note:

    Notices may also be mandated for review by Treasury Inspector General for Tax Administration (TIGTA), management, policy statements, etc.

  2. Reviews are conducted with the goal of improving both the accuracy and quality of information the IRS sends to taxpayers.

3.14.2.1.1  (01-01-2015)
Prioritization of Work for BMF Service Centers

  1. The goal of the Notice Review Departments is to complete their BMF selected notices by the established cutoff times.

  2. Starting in 2012 the cycle load and close out times have changed due to Customer Account Data Engine 2 (CADE). For BMF - the cycle will load Saturday at 10:00 PM following Master File cycle processing beginning on Thursday evening and close out the second Monday at 2:00 AM.

  3. If there is a possibility that the entire cycle will not be reviewed, the centers cannot extend the cycle and must prioritize the work in the following order:

    • Large Dollar key codes regardless of the accuracy rate.

    • Key 90

    • Refund Key Codes with lowest accuracy rates first, keeping in mind Command Code (CC) NOREF cutoff times. Bypass reviewing any key code with an accuracy rate of 94% or higher.

    • Balance Due Key Codes with lowest accuracy rates. Bypass reviewing any key code with an accuracy rate of 94% or higher.

    • CP 267 Key 12

    • Skipped key codes.

3.14.2.2  (01-01-2015)
What Is Notice Review?

  1. Notice Review is the process where tax accounts with specific, pre-decided account activity occurring after notice generation, are selected for manual review. This process allows tax examiners (TEs) to analyze the account and the notice to decide if the information on the notice to be mailed is complete and represents the most current and up to date account information. Tax modules are also selected to intercept and correct possible processing errors and potential erroneous refunds.

  2. The ultimate goal of this process is to allow the Service the opportunity to change inaccurate information on the notice before mailing to reduce taxpayer inquiries, both written and by phone. The end result will give the taxpayer with the most accurate and current tax account information available at the time of mailing. The review of refund transcripts can decrease taxpayer burden and reduce the cost to the Service for recovery efforts.

  3. Notice Review employs the following to achieve its goal:

    • Quality

    • Timeliness

    • Interest Reduction

    • Effectiveness

    • Completeness

3.14.2.2.1  (01-01-2015)
Quality

  1. Notice accuracy is increased when appropriate feedback is provided to all areas that contribute to the generation of erroneous notices or refunds.

  2. An effective method must be developed to provide feedback to the responsible processing functions at a local level.

    Reminder:

    This feedback must be provided weekly during the current filing season.

  3. In order for the process to work, Notice Review TEs must be allowed time to assemble and provide feedback information to the team lead, who will contact the appropriate functional area.

  4. The NRPS Notice Disposition Reports are used as a feedback tool. There are two basic formats for these reports:

    1. The CP Format provides a breakdown of each notice by selection key for a given cycle.

    2. The Key Total Format provides a breakdown of each selection key by CP number for a given cycle.

  5. The Cumulative history reports show year-to-date totals for the above reports. The weekly reports only show data for those keys with current cycle activity. The history reports show data for keys that have had activity at any time during the year.

  6. The historical records are used to assist in feedback sessions with functional areas that cause the generation of notices. Provide your Headquarters Analyst a monthly list of error trends so that it can be shared with the appropriate Headquarters processing analyst.

  7. If the IRM contains inconsistencies and/or conflicting information, immediately submit this information to the Headquarters Analyst for resolution.

    Caution:

    Do not establish local procedures without first contacting the Headquarters Analyst.

  8. The Servicewide Electronic Research Program (SERP) is the vehicle that IRM changes and IRM alerts are distributed to the service centers. IRM changes are sent to the SERP Area who then posts the updated version on SERP the next business day. IRM alerts are issued for a variety of reasons and generally will not update the IRM with its content. These include changes that affect only the current cycle. Examples can be Command Code NOREF day or time change due to Holiday processing.

3.14.2.2.1.1  (01-01-2015)
Quality Assurance Research

  1. Information common to all returns must be verified and compared to the CP notice as well as the information contained in the NRPS package . Research is required to ensure that the information contained on the tax return is processed as the taxpayer intended.

  2. Some of the most common IDRS research command codes used by Notice Review can be found in IRM 3.14.2.7.2, Common Command Codes Used in Notice Review.

3.14.2.2.2  (01-01-2015)
Timeliness

  1. ALL selected notices must be reviewed, corrected and timely mailed to minimize any negative impact to the taxpayer. For Notice Review, timely means ALL of the following:

    • Marking the disposition of ALL selected notices on the OLNR Retype Application on or before the closeout .

    • Completing ALL adjustments affecting refunds within one week of the transaction code (TC) 841 posting

    • Inputting adjustment actions on ALL other cases by the notice 23C Date

3.14.2.2.3  (01-01-2015)
Interest Reduction

  1. To help reduce the amount of interest IRS pays on refunds:

    1. IRS has a 45 day interest-free period (from the later of the return due date, return received date, or the date the return was received in processable form) in which to process taxpayer refunds. By law, refunds not issued within the 45 day period (180 days for tax deducted and withheld under Chapter 3) must include credit interest.

    2. Revisions to the process are made when necessary to review AND correct overpaid accounts without paying unnecessary interest.

  2. Reviewing, correcting, and mailing ALL notices timely allows the taxpayer the full allotted time to pay any outstanding balances. Generally a taxpayer has 21 calendar days from the date of the notice (10 business days for notice amounts of $100,000 or more) to pay the outstanding balance without incurring additional interest charges. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. For proper guidance when reducing, computing or discussing interest, refer to IRM 20.2.

3.14.2.2.4  (01-01-2015)
Effectiveness

  1. The review of Math Error notices helps to identify those notices that historically have high error rates. It also provides valuable feedback that is used to refine selection criteria.

3.14.2.2.5  (01-01-2015)
Completeness

  1. Generally, you must review the entire tax return, and ALL tax modules related to a notice or transcript selected for review by utilizing the NRPS Package and IDRS . The review can include, but is not limited to the review of items below:

    • Entity Module(s)

    • Outstanding Credit Balance Modules

    • Cross-reference Taxpayer Identification Numbers (TINs)

    • Related Names

    • Freeze Conditions

  2. See IRM 3.14.2.7.1 (General Review Procedures), for additional guidance.

  3. The ultimate goal of Notice Review is to verify the accuracy of the information contained in all notices selected for review before mailing. All changes made to the taxpayer's account must be correct and completed before cycle close out. (There are some exceptions.)

3.14.2.3  (01-01-2015)
Computer Paragraph (CP) Notices

  1. A CP notice is a computer generated message resulting from:

    • A tax examiner entering taxpayer notice codes (TPNCs) on a return

    • A Master File analysis of a taxpayer’s account

    • Certain transactions posting to an account

  2. Notices can generate to:

    • Request information or payment from a taxpayer

    • Educate a taxpayer

    • Clarify an issue (i.e., explain a Math Error identified on their tax return)

  3. Most notices contain the following information:

    • Taxpayer’s name

    • Address

    • Employer Identification Number (EIN) or Social Security Number (SSN) for Form 706 and Form 709

    • Tax period

    • Tax form

    • A computer generated message

  4. Settlement Notices-Tell the taxpayer of payments due, interest and/or penalties due, math errors, or adjustments the Campus has made to the taxpayer’s account. The three types of settlement notices reviewed by Notice Review are:

    1. Math Error Notices-Generate when a tax return, containing a math error, posts to the Master File. Error Resolution normally identifies the math errors. The tax module may include math, clerical, or credit errors.

    2. Non-Math Error Balance Due Notices -Generate when a return, with no math error, posts to the Master File. The tax module may include tax, credits, penalties, interest, or a combination of all four. The CP 161 is the balance due notice for all BMF forms except for Form 1065.

    3. Adjustment Notices-Generate when certain types of Data Processing (DP) or Examination adjustments post to an account. All adjustments made in Notice Review are Data Processing adjustments.

      Reminder:

      All Settlement Notices are subject to review.

  5. Information Notices-Generate when information needs to be sent to a taxpayer. Notice Review selects Informational type notices that explain credit elect and the offsetting of money to other balance due tax modules within the account. These notices are referred to as Associated Notices.

  6. Campus Notices-Generate to notify the Campus, Territory Office, or Area Office of a condition that needs further action to bring the taxpayer’s Master File account into current status. This category includes Refund Transcripts, which are the only Campus notices reviewed in Notice Review.

    Note:

    For a description of all notices, see Document 6209. To view an exhibit of a notice go the Office of Taxpayer Correspondence Web Site.

3.14.2.4  (01-01-2015)
Notice Review Processing System (NRPS)

  1. The Notice Review Processing System (NRPS) selects settlement notices, adjustment notices, associated notices and refund transcripts for review by analyzing data from the following sources:

    1. CP Notice Records-NRPS also uses this information to print a copy of selected notices for the review.

    2. Entity and Tax Modules-NRPS uses the Transcript Request System (TRS) to obtain data. This information is sent to each campus exclusively for NRPS processing. NRPS prints this information in transcript format as part of the NRPS package.

    3. Return Transaction File (RTF) -NRPS extracts RTF data records for each selectable settlement notice. NRPS packages also contain printouts of this information.

    4. Pending Transactions-NRPS uses data from transactions that have not yet posted at the campus as part of the selection criteria for certain keys.

      Pending Transactions
      Pending Transaction Sources Possible Pending Transactions
      Enterprise Computing Center at Martinsburg (ECC-MTB) Resequence File Adjustments (TC 29X/30X)
      Unidentified Remittance Files (URF) Extensions (TC 460)
      Tape Edit Program (TEP) (pipeline and corrected unpostable files) Merge Transactions (TCs 001, 011, and 04X)
      Generalized Unpostable Framework (GUF) and Current Cycle ECC-MTB Unpostable Files Credit Transfers [Document Codes (DC) 24, 34, 48, or 58 transactions]
      Excess Collection (XSC) File
      Generalized Mainline Framework (GMF) Error File All other significant (non-zero) transactions
      Reject File  

3.14.2.4.1  (01-01-2015)
Notice Selection Process

  1. Notices are selected based on established selection criteria. These criteria are divided into categories. Each category contains a list of Keys that have been assigned specific selection criteria. The categories were established to separate notice types and help establish a priority of review. Notices are selected in category order as follows:

    • Category A - Special Handling Required

    • Category B - High Priority Selection-Local Selection

    • Category C - Federal Tax Deposit (FTD) Rollover

    • Category D - Balance Due and Even Balance Notices

    • Category E - Overpaid Notices

    • Category F - Adjustment Notices

    • Category G - Refund Transcripts

    • Category H - Low Priority Local Selection

    • Category I - Balance Due Low Priority

  2. Within each category the notice is analyzed in sequence by selection priority. Once a notice meets the criteria for a key within a category, the remaining selection keys in that category are bypassed and the analysis continues through the remaining categories. If the notice meets selection criteria in another category, it is assigned a secondary selection key; all remaining categories are bypassed, and analysis stops. (Analysis is limited to one primary and one secondary selection key.)

  3. The selection process continues from category to category in alphabetical order. When completed, the process will result in one of the following conditions:

    1. All selection criteria were applied to the notice, but the notice was not selected for review.

    2. The notice was selected for review meeting only one selection criteria.

    3. The notice was selected for review meeting two selection criteria.

  4. During the selection process:

    1. The first selection criteria causing a notice to be selected for review is named the Primary Selection Key.

    2. The second (if applicable) selection reason is named the Secondary Selection key.

    3. Once a Secondary Selection key is assigned to the notice, the selection process is terminated.

    4. Any remaining selection criteria both within the category or in remaining categories is bypassed.

  5. Selection Criteria-The NRPS selection criteria is only applied to selectable notices and transcripts.

    1. The selection criteria is divided into categories containing similar conditions or notice types.

    2. Each category is assigned a priority based on the importance of the selection criteria within the category.

    3. Each selection criteria is assigned a two-digit numerical selection key and a numerical priority.

    4. The selection criteria is applied against the notice in ascending priority order until either the notice is selected for review or the selection criteria for the category is exhausted.

    5. If the notice is selected for review, the remaining selection criteria for the category is not applied against the notice.

      Note:

      A numerical group number is assigned during the selection analysis, and is used to sort and batch the NRPS packages. The group number is decided by the priority of the review and is used to associate similar selections together.

  6. The selection process requires the following:

    1. Entity and Tax Modules-The Transcript Request System provides Master File data for use in the analysis process. This data is separated from other Master File data, then shipped to each Campus for use by NRPS processing and displayed in transcript format as part of the NRPS package.

    2. Transcribed Tax Return Data-an RTF data record is extracted for each settlement notice subject to NRPS selection. This data is used in the selection process and included in the NRPS package for selected notices.

  7. The selection process requires in-house transactions-certain transactions which have not posted to the Master File by the notice cycle are required by NRPS processing, they include:

    • Adjustments (TC 29X) (TC 30X)

    • Credit Transfers (Document Codes 24, 34, 48, and 58)

    • Merge Transactions (TCs 001, 011, 04X)

    • Extensions of Time to File (TC 460)

    • Any transactions with non-zero transaction amounts

  8. The transactions listed above are extracted from the following files:

    • ECC-MTB Resequence

    • Unpostables (current cycle at ECC-MTB and GUF)

    • TEP (all pipeline transactions)

    • Unidentified Remittance File

    • Excess Collections (XSC)

    • GUF Error

    • Rejects-Transaction failed Campus validity check

    • FTD File

  9. Notice Data-All selected notices are displayed in the NRPS package.

  10. The NRPS package will include all current cycle notices, selected/associated notices and/or refund transcripts.

  11. A contents sheet will be included with each package, and will provide the following information:

    • Selected notice

    • Selection Key and literal key description

    • Pending transactions

    • Documents requested

    • Other (non-selected) notices

  12. A NRPS batch consists of the following:

    • NRPS Batching Sheet-Identifies the beginning of each batch

    • NRPS Packages- 1 to 20 notices per batch

    • NRPS Selection List-A list of the notices contained within the batch

  13. Manual Intervention List-Lists, in notice sequence number order, all notices that were not selected for review but require manual intervention for any of the following conditions:

    1. Central Authorization File (CAF) Mismatch-Central Authorization File name/address information to be added.

    2. Reporting Agent File (RAF) Mismatch-Reporting Agent File name/address information to be added for Form 940, Form 941, Form 944, and Form 945.

  14. NRPS Batch Control Sheet-Contains a line for each batch (Notice Review copy) or a line for each batch with a document request (Files copy). It is also used as an assignment control document.

3.14.2.4.2  (01-01-2015)
Selection Keys

  1. For specific information on NRPS Selection Keys, Exhibit 3.14.2-5

    Note:

    For detailed information on the Local Control File, see IRM2.4.45 . For detailed information on the Notice Review Processing system, See Program Requirement Package (PRP) 160 Section 54. Valid percentages for Local Control File: 1%, 10%, 25%, 33%, 50%, 75%, and 100%.

3.14.2.4.3  (01-01-2015)
Output Files

  1. After NRPS completes the selection process, it combines all of the selection information into NRPS Batches. A NRPS Batch consists of the following:

    • NRPS Batching Sheet

    • NRPS Packages

    • NRPS Selection List

  2. NRPS are viewed using Web Control-D . Refer to the On-line Notice Review (OLNR) User Guide and Job Aid for additional information.

  3. NRPS produces several additional types of output:

    • NRPS Batch Control Sheet

    • NRPS Document Charge-Out

    • NRPS Batch Return Request List

    • Manual Intervention List

    • NRPS Selection Report

    • NRPS Non-package Selection List

    • NRPS Duplicate Selection List

    • NRPS Associated Notice Listing

      Note:

      A description of each of these is in IRM 3.14.2.4.7 (Other Output).

  4. All of the above print-outs generate from the following output files:

    Listing of Output Files
    File Name Description
    NOT 1320/P Notice [Quick (Q) Print] Listing
    NOT 1330 NRPS Selection
    NOT 3431 Back-end Notices
    NOT 3440 Back-end Notices
    NOT 3445 Back-end Assistant Commissioner International (ACI) Notices - Ogden Service Center (OSC)
    NOT 3446 Back-end ACI CP 220 (OSC)
    NOT 3480 Back-end Routing and Stuffer
    NOT 394/AG Redesign Notices (CPs 101, 102, 103, 104, 105, 106, 107, 110, 111, 112, 113, 114, 115, 116, 117, 118, 123, 124, 125, 128, 134 R/B, 138, 145, 161,162, 169, 173, 210, 215, 220, 225, 260, 267, 268)
    NOT 3135 CPs 297 and CP 297A Selected Certified Mail Listing
    NRP 1410/20 NRPS Selected and Associated Report
    NRP97 Command Code used to update, add, delete or change requested NRPS Packages
    NRP 9841 Local Control File records
    NORI - B NOREF Tape
    NOR0 142 Refund Intercept
    1603D12 NRP CP Totals

3.14.2.4.4  (01-01-2015)
NRPS Batch Sheet

  1. The Batch Sheet is the first sheet of each batch. It contains the following information:

    • Page Number

    • Batch Number

    • Sort Group- Special, BALANCE DUE NOTICE or OVERPAID NOTICE

    • Current Cycle

  2. See exhibit below for what is contained in the NRPS Batch Sheet.

    Figure 3.14.2-1

    This image is too large to be displayed in the current screen. Please click the link to view the image.

3.14.2.4.5  (01-01-2015)
NRPS Packages

  1. NRPS packages contain various types of information needed to review each selected CP Notice or Refund Transcript. Each batch may contain up to 20 selected notices.

    Note:

    Packages for overpayment notices must be viewed on-line first. Most packages contain only one notice. However, the NRPS Package will contain all Selectable or Associated CP Notices that generate in the current cycle for a taxpayer if one or more is selected for review. Each NRPS package contains the following:

    1. Package Contents Page-View online as the first page of each NRPS Package. This page contains the following information:

      Package Contents Page
      NRPS Package Contents:
      A list of all Selected or Associated CP Notices or Refund Transcripts in the package with CP# and Document Locator Number (DLN)
      The Selection Key Number along with a brief description of the Key
      A list of pending transactions
      A list of requested vouchers and documents
      Manual Intervention Indicators
    2. Online Notice Information-Depending on the CP number of the selected notice, this may either be a duplicate of the live notice, or a shortened version. The shortened version, displays only the notice record information, such as dollar amounts and TPNC numbers, as opposed to Taxpayer Bill of Rights language and TPNC explanations.

    3. Entity Transcript-This displays the entity information for the notice Taxpayer Identification Number (TIN).

    4. Tax Module Transcript (optional) -This displays the tax module transactions for the notice TIN.

    5. Transcribed Posted Return Data-This displays transcribed return fields for selected Settlement Notices

    6. 813 List-This list displays only for Remittance Processing System (RPS) Discrepancy cases.

3.14.2.4.6  (01-01-2015)
NRPS Selection List

  1. This list is the last page of each batch. It shows the following information for each Selected CP Notice in the batch:

    • Count (item number on the list)

    • Sequence #

    • DLN

    • CP Number

    • Primary Selection Key

    • Secondary Selection Key

3.14.2.4.7  (01-01-2015)
Other Output

  1. NRPS produces two different (but related) Batch Control Sheets.

    1. The Notice Review copy has one line for each batch, showing the number of Selected and Associated CPs and Document Requests in each batch.

    2. The Files Function copy has a line for each batch, showing the number of Document Charge-outs in each batch.

  2. The NRPS Document Charge-out provides information that the Files Function needs to pull documents for Notice Review to use in reviewing CP Notices.

  3. The NRPS Batch Return Request List is a cover sheet that separates the Document Charge-outs by batch and contains a line for each charge-out.

  4. The Manual Intervention List provides a list (in notice sequence number order) of all notices that were not selected for review but may require manual intervention.

    1. See IRM 3.14.2.5.3 (Manual Intervention List) for additional information and procedures.

  5. The NRPS Selection Report contains various statistical data including the number of CPs selected. This report is sorted by CP # and Selection Key. Exhibit 3.14.2-8 (BMF NRPS Selection Report).

3.14.2.5  (01-01-2015)
Clerical Procedures

  1. This section describes the clerical procedures performed during the Notice Review process.

3.14.2.5.1  (01-01-2015)
Clerical Function

  1. The clerical function provides a wide variety of services critical to the NRPS system. These services, outlined in Sections 4.1 and 4.2, assist Notice Review TEs (and other customers) in providing accurate information to the taxpayer. The clerical support staff:

    • Orders and sorts tax returns

    • Distributes NRPS packages and related documents to the TEs

    • Corrects erroneous, and undeliverable notices

    • Stops refunds

    • Resolves CAF and RAF mismatches on notices that generate on the Manual Intervention List

3.14.2.5.2  (01-01-2015)
Clerical Function Priorities

  1. This subsection contains instructions dealing with clerical function priorities. It includes instructions for associating tax returns and payment vouchers, reviewing priority, intercepting requests from other areas, notice corrections, and releasing notices to Receipt and Control.

3.14.2.5.2.1  (01-01-2015)
Associating Documents from Files

  1. Document Request Forms (Return Charge-outs) and a Batch Return Request List generates weekly.

    1. The Files Function uses these forms to pull returns needed by Notice Review to review notices. They route the returns in batch order (per the Batch Return Request List) to Notice Review.

    2. The Notice Review Clerical Function associates the Batch Return Request List and the attached returns with the corresponding NRPS batch sheets.

  2. All necessary documents (adjustment documents and tax returns) are associated with each batch before releasing to TEs. All NRPS batch sheets that do not need documents are routed directly to Notice Review.

3.14.2.5.2.2  (01-01-2015)
Additional LCF Selection

  1. Error Resolution System (ERS) may request that Notice Review select and correct a specific notice:

    1. ERS Tax Examiner must prepare Form 3465 and send it with the return to Notice Review.

    2. Local Control File (LCF) Key 091 is used to select the notice for review by DLN.

    3. Notice Review Clerical Support will associate the return and Form 3465 with the NRPS batch and release the case to the Tax Examiner Unit.

3.14.2.5.2.3  (01-01-2015)
Priority of Review

  1. The Clerical Support Unit will distribute the work in the following order of priority: Refer to IRM 3.14.2.1.1 for additional information.

    1. Selected Overpayment Notices and Refund Transcripts-Tax examiner must complete this review before the pre-determined cut-off of CC NOREF (4:00 PM Thursday). Local management must decide the disposition of overpayment notices not reviewed by the cut-off. In doing so, consider prior cycle error rates of the individual CP Notices and selection keys

      Caution:

      Treat notices selected by BMF Key 52 as overpayment notices because the current cycle refund is the reason for the review.

    2. Selected Balance Due Notices.

3.14.2.5.2.4  (01-01-2015)
Intercept Requests from Other Areas

  1. Universal Taxpayer Information File (TIF) has made it possible to intercept a refund from any campus. However, not all functional areas within the Service, including Regional and Area Offices, have access to the CC NOREF. If the request is received from one of those areas, service the request. Tell them that the request has to be received by 4:00 PM EST on Thursday before the 23C Date of the notice. The request must also include the following information:

    • Taxpayer Identification Number (TIN)

    • Name Control

    • MFT and Tax Period

    • Cycle of TC 846

    • DLN of the TC 846

    • TC 846 amount

    • Location Code

    • Zip Code - This is no longer a required field.

    • Reason Code

    • RSN (Refund Schedule Number)

    • Requestor's name, telephone number, and employee number

      Note:

      Tell other functions of the CC NOREF cutoff time.

  2. Other functions may request that an incorrect notice be corrected or stopped. However, it has to be a selectable notice, and the request has to be received in Notice Review within established deadline cut off times.

    1. Established deadlines for requesting a notice:

      Deadlines for Requesting Notices
      If the request is for Then the Request Must Be Received By
      A current cycle notice Close of Business (COB) Thursday before the 23C Date of the notice.
      A subsequent cycle notice The request must be received by 12:00 PM Thursday (local time) before the notice cycle.
    2. Notice Review Clerical Team uses Command Code NRP97 (Local Control File) to select the notice.

      Note:

      Tell other functions that the notice request deadline is Thursday 12:00 PM local time per LCF local procedures.

3.14.2.5.3  (01-01-2015)
Manual Intervention CAF/RAF

  1. Perform manual intervention on selected and non-selected notices.

  2. The notices generated on the manual intervention List do not meet NRPS selection criteria. However, it has been decided that they do require some sort of manual review and correction. Manual intervention conditions are as follows:

    1. Central Authorization File (CAF) mismatch.

    2. Reporting Agent’s File (RAF) mismatch.

  3. If the notice is not selected by NRPS, the notice (and the manual intervention condition) appears on the manual intervention List, and in Batches on OLNR beginning in the 9000 series (9xxx).

    1. The list shows one line for each notice, sorted by notice sequence number.

    2. Maximum of 25 to a batch.

  4. If the notice is also selected by NRPS, the manual intervention information will be on the Package Contents page of the NRPS Package/Control D. If a manual intervention condition is present, the tax examiner must resolve it during the review.

  5. The Centralized Authorization File (CAF) is a computerized system of records which houses authorization information from both powers of attorney and tax information authorizations. The CAF system contains several types of records, among them taxpayer and representatives records, tax modules and authorizations. For more information see IRM 21.3.7.

  6. Authorizations recorded on the CAF are generally submitted on:

    1. Form 2848, Power of Attorney and Declaration of Representative

    2. Form 706, U.S. Estate Tax Return

    3. Form 8821, Tax Information Authorization

    4. Oral Tax Information Authorization (OTIA), paperless Form 8821

    5. Via e-services, using Disclosure Authorization (DA)

  7. Form 8655, Reporting Agent Authorization, is used to authorize a designated agent to assist an employer in making required tax deposits and tax information filings to federal, state, and local governments. For more information refer to IRM 21.3.9. The Form 8655 allows a reporting agent the authorities listed below:

    1. File and sign certain tax returns filed electronically.

    2. Make FTDs and submit FTD information electronically.

    3. Receive duplicate copies of official notices, correspondence, transcripts or other information with respect to the electronic returns filed by the agent.

    4. Receive duplicate copies of official notices, correspondence, transcripts, filing frequency information or other information with respect to the FTDs submitted electronically by the agent.

    5. Provide information, as an “other third party”, to assist the IRS in deciding whether or not reasonable cause exists for penalty abatement when related to a filing or payment made electronically by the agent. Under these circumstances, the agent can be advised as to whether or not the penalty will be abated at the time the determination is made.

  8. When the notice with manual intervention criteria is selected based on NRPS key criteria, the tax examiner is responsible for resolving the potential notice issue and the manual intervention conditions. Clerical is only responsible for resolving notices that generate on the manual intervention Listing.

  9. Processing Notices with Power of Attorney (POA) and Central Authorization File (CAF) Mismatch indicators.

    1. The CAF copy of the notices will generate with the representative’s name and address on the notice. If the notice has the representative's name with no address, it is considered a CAF mismatch condition and will be notated on the Notice List. NRPS will compile all CAF mismatch notices and include them on the manual intervention List. A literal will print out on the list indicating the CAF mismatch by notice sequence number and CP number.

    2. Research the CAF mismatches on IDRS. Use CC CFINK to identify the representative name and address.

    3. Using CFINK, request the specific year-ending period.

    4. Check for Y on the receipts line. The Y indicates the representative is authorized to receive notices.

    5. Check for N on the receipts line. The N indicates there is no authorized representative to receive notices.

      CC CFINK Notice Indicators
      If Then
      N is present Void the CAF notice.
      Y is present for one or more representative Type the name and address of each representative(s) on the notice(s) and mail.

      Note:

      If the name of the second representative is the same or similar to the first representative, and the address is identical, do not use the second representative. Void the second CAF copy if applicable. If the representative for the CAF is the same representative for the RAF, void the RAF copy.

    6. Check the Rep-Action line for any of the following words; Undeliverable, Suspended, Deceased, Disbarred, Retired or None. If present follow the instructions in the table below:

      Rep-Action Decision Table
      If Then
      The word Undeliverable is present on the Rep-Action line; Void the CAF notice.
      The words Disbarred, Suspended, Retired or Deceased is present on the Rep-Action line; Void the CAF notice.
      The word None is present on the Rep-Action line; Type the name and address of the representative on the notice and mail it.
  10. If RECORD NOT FOUND for the taxpayer on the CAF file, void the duplicate notice.

  11. Processing Notices with Reporting Agents File (RAF) Mismatch.

    1. Reporting Agents File notices (RAF) are similar to CAF notices, in that a copy of the notice will generate to the taxpayer, and a copy will generate to the Reporting Agent. Reporting Agents (RA) can file the Form 941, Form 941-PR, Form 941SS, Form 941NMI, Form 940, Form 940-PR, Form 943, Form 943-PR, Form 944, Form 945 and Form CT-1 for their clients. An RA can also submit electronic payments for their clients on the previously mentioned forms, as well as Form 720, Form 1042, Form 1041, Form 1120, Form 990-PF, and Form 1120-C.

      Note:

      Form 1120-C replaced Form 990-C. Form 1120-C is valid for all tax periods ending after 200611.

    2. Most notices will have the RA's name and address printed on the notice. A mismatch (MISM) occurs when the RA's name and address do not generate on the RAF copy of the notice. A manual intervention List is produced to identify CAF and RAF mismatches. RAF mismatches are identified with the literal RAF MIS.

    3. The RA information can be obtained on IDRS using CC RFINK. CC RFINK with the definer L requires the taxpayer's EIN on the first line and the RA's EIN on the second line. This will display whether they should receive copies of notices and the beginning and ending tax period and RA has authorization. When the ending period shows all 9's the authorization has not ended.

    4. CC RFINKL will display a notice indicator of N (not authorized to receive notices), or Y (authorized to receive notices). See table below for further instructions.

      CC RFINK Notice Indicators
      If Then
      CC RFINKL shows a notice indicator Y and the tax period on the notice is within the range of beginning and ending tax periods. Type the name and address of each representative(s) on the notice(s) and mail. (CC RFINKR with the RA's TIN will display the agents mailing address.)
      CC RFINKL shows a notice indicator N or the tax period is not within date range. Void Notice

      Note:

      If the representative for the CAF is the same representative for the RAF, void the RAF copy.

    5. The tax period shown on CC RFINK is the Beginning Period the reporting agent has authorization. See table below for further instructions.

      Note:

      Electronic Federal Tax Payment System (EFTPS) modules will have a payment indicator of P.

    6. For paper filed returns, if the CC RFINK screen shows the representative’s address is undeliverable, associate the duplicate notice to the return with a print of the undeliverable address. For electronically filed returns, do not use the attachment or association form. A TC 290 .00, Blocking Series 15 or 17 (non-refile DLN) will be input. Attach the print of the undeliverable address to the adjustment tag.

3.14.2.5.4  (01-01-2015)
NRPS Local Control File

  1. The NRPS Local Control File processing is designed to allow each Campus the option to obtain additional notices for review. BMF has a priority option that when exercised, moves the analysis for the selection from Category H to the second highest Category B. The Local Control File priority option does not override the Category A selection criteria.

  2. There are three programs used by Clerical to update and maintain the NRPS Local Control Database.

    1. Program NRP97 is used by Notice Review to add, change and delete records on the Local Control Data base. Program NRP97 is an IDRS Command Code accessed from any IDRS terminal. The request must be done by 12:00 PM (local time) Thursday before the new cycle is loaded.

    2. Program NRP98 is a batch processing program executed by operations each Friday. This program creates Local Control File tapes for input into the weekly NRPS processing. Local control reports are produced detailing the contents of the Local Control File. These reports are intended to be reviewed by Notice Review before the input of the Local Control tape files into the weekly National Account System (NAS) program. NRP98 is run on Saturday AM before running NRP11.

    3. Program NRP99 is a batch processing program executed by Operations after the completion of the weekly NRPS processing. This program deletes records from the Local Control Data Base as a result of the NRPS processing, or when a TIN or DLN record has remained on the Data Base for six weeks. Local Control reports are produced by this processing. These reports show which records were deleted and why they were deleted and detail the records remaining on the Data Base.

      Note:

      Refer to IRM 2.4.45, IDRS terminal input of CC NRP97.

  3. NRPS Local Control Data Base consist of ten NRPS record types:

    • NRPS-TIN-REC

    • NRPS-DLN-REC

    • NRPS-TPNC-REC

    • NRPS-MFT-TAXPRD-REC

    • NRPS-CPNUM-REC

    • NRPS-BAL-DUE-REC

    • NRPS-LG-CORP-REC

    • NRPS-ADJ-REC

    • NRPS-Employment-CD-REC

    • NRPS-MISC-REC

  4. Each record type may be updated by command code NRP97 with a unique command code definer. The following is a list of both the definer codes and the record types:

    NRP97 CC Definer
    Definer Record Type
    T EIN option
    D DLN
    N TPNC
    M MFT/TAXPRD
    C CP NUMBER/ZIP CODE
    B Balance due amount
    L Large Corporation
    A Adj reason code
    E Employment code
    I Miscellaneous BMF
    1. These command code literals appear on the BASIC OPTIONS menu screen generated by command code NRP97.

    2. Besides the updating options (display, change, add, delete), there are two options provided on the command code screens. The OPTION-MENU is used to display the Basic Options menu screen on which the user may select another option to continue updating another NRPS record type. The EXIT TAP option is used to clear the entire screen and continue to input another command code if desired, or to sign off the IDRS terminal.

  5. Do not run NRPS command code to update records in between the weekly runs NRP98 and NRP99. However, you can use them for research during this period. If any records have been updated in between these two runs, these updated records will not appear on the NRPS Data Base after NRP99 run. This restriction will ensure continuity in the data base throughout the weekend NRPS runs.

  6. Data Retention- Records will only be deleted from the NRPS Local Control Data Base under the following circumstances:

    1. EIN (except Large Corporation), ERS DLN and Full DLN records are automatically deleted when selected for review or after six weeks if not selected.

    2. Any record may be manually deleted by selecting the appropriate Option from the Option Menu, keying in enough information to identify the record. Then use the X to select the Delete action and hit XMIT key.

  7. Data change- Any existing local control record may be altered as desired. To use this capability:

    1. Select the appropriate Option from the Option Menu.

    2. Enter enough information to identify the record.

    3. Alter the record as desired and use X to select the change action.

    4. Hit the XMIT key to save the changes.

  8. Selection Keys- The following is a list of the Selection Keys assigned when a notice is selected for review by Local Control:

    1. 06 -Large Corporation selection

    2. 90 -EIN Selection

    3. 91 -ERS DLN selection

    4. 92 -CP number Selection

    5. 93 -Balance Due Amount Selection

    6. 94 -Full or Partial DLN Selection

    7. 95 -Penalty Code Selection

  9. Substitute Keys- Selection Keys 85, 86, 87, 88, 89, and 99 are reserved for use as Substitute Selection Keys. Substitute Keys can only be used to replace Selection Keys 90 through 96. Large corporation, TPNC, Exception Override and normal criteria selections do not have substitute keys. Terminology:

    1. Batch processing is simply a computer term for any computer program that executes without human intervention except for duties normally performed by a computer operator.

    2. Interactive Processing is the opposite of Batch processing. This is a computer program designed to interact with a person, normally using a remote terminal as the interactive device.

    Note:

    Percentages valid on Command Code NRP97 (Local Control File) -1%, 10%, 25%, 33%, 50%, 75%, and 100%.

3.14.2.6  (01-01-2015)
Refunds

  1. This section describes procedures for:

    1. Refund Intercepts

    2. Erroneous Refunds

    3. Manual Refunds

3.14.2.6.1  (01-01-2015)
Refund Intercepts using Command Code (CC) NOREF

  1. Use CC NOREF to input all refund intercept requests.

    Note:

    To intercept an International refund, input the DLN of the TC 846 as the LOC code on the NOREF screen.

  2. The cutoff for BMF Refunds utilizing CC NOREF is Thursday 4:00 PM (Eastern Time). Refer to chart in IRM 3.14.2.6.1 (7) for exact day and times.

    Note:

    Due to the 2013 cutoff day change of CC NOREF, the HAL program will no longer be used in Notice Review.

  3. CC NOREF cannot be used to intercept refunds during accelerated refund cycles. During these cycles, the refund checks are mailed one week early to reduce credit interest paid on the refund. Follow normal review procedures in conjunction with Erroneous Refund procedures (see IRM 3.14.2.6.2.1).

    Exception:

    Notice Review may contact the Financial Center directly for unusual intercept requests. Contact the team lead to decide if the case meets the criteria for this exception.

  4. The following CC NOREF definers are used in Notice Review:

    • CC NOREF intercepts refunds and updates the Refund Information File.

    • CC NOREFD deletes an intercept request in the same cycle the request was input.

    • CC NOREFC updates the Refund Information File when an intercept is requested by phone.

    • CC NOREFM updates the Refund Information File if a check was not intercepted by the Regional Disbursing Office.

    CC NOREF EXAMPLE:
    CC NOREF Format
    1. NOREF

    2. C#,Cycle#N,B,RFDL

    3. 10 Digit TE#, * (Use*,* When TE does own NOREF)

    4. Leave Blank

    5. TC 846 Amount

    6. LOC Code

    7. XX (Refund Deletion Code)

     
     
     
     
     
     
     
     
     
    1. Overlay TXMOD with Command Code NOREF  
    2. Type C#,. The Cycle (i.e., 200303)N (T or P),B, RFDL  
    3. Campus TE ten digit number,* (Use*,* When TE does own NOREF)  
    4. Leave Blank  
    5. TC 846 amount in dollars and cents (must include credit interest if any)  
    6. Territory Office Code  
    7. Refund Deletion Code (Use 81 for all NOREFs called in)  
    (See below for a list of Processing Refund Deletion Codes).  
    #2 above: T=Transcript, N=Notice, P=Call-in  

    Figure 3.14.2-2
    This image is too large to be displayed in the current screen. Please click the link to view the image.
  5. The chart below contains a list of refund deletion codes.

    Code Reason For Delete
    00 No Signature
    13 Schedule D
    21 Other Income
    22 Total Income
    31 Total Adjustments to Income
    32 Adjusted Gross Income
    34 Tax Computation
    38 Investment Credit
    39 Foreign Tax Credit
    43 Total Credits
    45 Minimum Tax on Alternative Tax
    51 Withholding
    52 Estimated Tax Payments
    56 Tax on Special Fuels and Oils (Form 4136)
    58 Total Payments
    75 Taxable Income
    77 Credit Elect
    78 Payment with Return
    79 Incorrect Tax
    80 Manual Refund
    81 Phone request to stop Refund
    82 Bad Check
    83 FTD Payment
    84 Misapplied Credit
    85 Correspondence with Taxpayer
    86 Assessment to Post
    87 Duplicate Filing
    88 670 Verification
    89 Transfer Payment to Another Period
    90 No Document
    99 All Other Reasons
  6. Use the chart below for new CC NOREF cutoff day and time.

      CC NOREF CUTOFF
    CYCLE DAY AND TIME 4:00 PM ET
       
    201503 02/05/2015
    201504 02/12/2015
    201505 02/19/2015
    201506 02/26/2015
    201507 03/05/2015
    201508 03/12/2015
    201509 03/19/2015
    201510 03/26/2015
    201511 04/02/2015
    201512 04/09/2015
    201513 04/16/2015
    201514 04/23/2015
    201515 04/30/2015
    201516 05/07/2015
    201517 05/14/2015
    201518 05/21/2015
    201519 05/28/2015
    201520 06/04/2015
    201521 06/11/2015
    201522 06/18/2015
    201523 06/25/2015
    201524 07/02/2015
    201525 07/09/2015
    201526 07/16/2015
    201527 07/23/2015
    201528 07/30/2015
    201529 08/06/2015
    201530 08/13/2015
    201531 08/20/2015
    201532 08/27/2015
    201533 09/03/2015
    201534 09/10/2015
    201535 09/17/2015
    201536 09/24/2015
    201537 10/01/2015
    201538 10/08/2015
    201539 10/15/2015
    201540 10/22/2015
    201541 10/29/2015
    201542 11/05/2015
    201543 11/12/2015
    201544 11/19/2015
    201545 11/26/2015
    201546 12/03/2015
    201547 12/10/2015
    201548 12/17/2015
    201549 12/24/2015
    201550 12/31/2015
    201551 01/07/2016
    201552 01/14/2016
  7. CC NOREF will establish a case control base on TXMOD. This case control must be left open and monitored until TC 841 posts. See IRM Figure 3.14.2-2 (CC NOREF) for input format.

3.14.2.6.1.1  (01-01-2015)
CC NOREFD

  1. CC NOREFD will cancel a NOREF intercept request if input before the Thursday cutoff. See table titled, CC NOREFD Example for NOREFD input.

    Note:

    If the control base has been closed and a CC NOREF was erroneously input, You must re-establish a new control base using CC ACTON to input the CC NOREFD . This must be done within the same cycle the CC NOREF was input. If there is any doubt on how to perform this procedure, contact the team lead for assistance.

    NOREFD
    Cancels a NOREF but it must be input before Thursday's deadline.
    • NOREFD

    • Cxx, Cycle#c,c

    • 10 digit TE# (or *,*)

3.14.2.6.1.2  (01-01-2015)
CC NOREF Activity Code

  1. CC NOREF creates an activity code in the format, ppxxxxxxyy. See below:

    CC NOREF Activity Code
    PP Activity:
      RR - Initial Refund Intercept Request
      RD - Intercept Request Deleted
      RC - Intercept Request Correct
      RM - Intercept Request Missed
    xxxxxx TC 846 (refund) posting cycle
    yy Refund Deletion Code refer to IRM 3.14.2.6.1, Processing Refund Deletion Codes.

3.14.2.6.2  (01-01-2015)
Reconciling Refund Deletion Requests

  1. Regional Financial Centers will generate a Control D file to the Campuses of the refunds that were not intercepted. Conduct research on the Missed refunds to determine if Erroneous Refunds procedures need to be followed. Refer to IRM 3.14.2.6.2.1. Use CC NOREFM to update the IDRS account information for the refunds that were missed.

  2. Campuses must contact the area office nearest the taxpayer’s home. See Document 6209, Section 11 for phone numbers. (Local Procedures may dictate which checks require area office contact.) Provide the following information to the area office and request that a Revenue Officer contact the taxpayer to secure the refund check or a cash equivalent:

    1. Taxpayer’s name

    2. EIN

    3. Address

    4. Business address

    5. Refund amount

    6. Tax Class

    7. Tax Period

    8. Date of the erroneous refund

3.14.2.6.2.1  (01-01-2015)
Erroneous Refunds

  1. This section provides information on processing erroneous refunds. The IRS sometimes issues a refund to a taxpayer who is not entitled to the money. When this occurs, the refund is known as an Erroneous Refund. See IRM 21.4.5 for more detailed instructions on classifying and processing Erroneous Refunds and for procedures not listed below.

  2. An Erroneous Refund is defined as any receipt of money from the Service to which the recipient is not entitled. This definition includes all erroneous payments to taxpayers, even if the non-entitlement could not have been known at the time of the refund. The taxpayer may or may not have made an intentional misstatement of income or credits to the IRS.

  3. There are two types of Erroneous Refunds:

    1. Rebate Erroneous Refunds: are Categories A1, A2 , and C requiring a recalculation of the tax liability. Generally these occur when the taxpayer incorrectly computes the tax calculation. Refer to IRC § 6211(b)(2) .

    2. Non-Rebate Erroneous Refunds: are Categories B, and D and sometimes C, from clerical or administrative mistakes that do not involve a redetermination of the tax liability. Generally, these occur when there is a payment or a processing error NOT affecting the tax calculation.

  4. The following situations may cause or create an erroneous refund. This list is not all encompassing and other causes and effects do exist.

    1. Misapplied payments - A payment applied to the wrong TIN. The misapplied payment overpays the account, causing an erroneous refund.

    2. A taxpayer's designated payment posts to the correct TIN but the wrong type of tax or tax year.

    3. A credit refund, of any type, if the taxpayer is not entitled.

    4. Return of court ordered restitution .

    5. An incorrect tax assessment, such as an incorrect use of Hold Codes or Priority Codes causing an incorrect refund.

    6. An incorrect tax adjustment causing an erroneous refund.

    7. Two taxpayers file refund returns , using the same TIN, and the refund goes to the wrong taxpayer.

    8. A taxpayer fraudulently or by mistake, receives refunds from more than one TIN for the same tax period.

    9. A taxpayer receives a manual refund (TC 840) and a computer- generated refund (TC 846) for the same overpayment.

    10. A taxpayer files a claim on a lost check, receives a replacement check, finds the original check and cashes both.

    11. A taxpayer makes an advance payment against a pending tax increase, and the money refunds before tax assessment posts.

    12. Incorrectly computed interest.

    13. A Direct Deposit is applied to the wrong taxpayer's account due to IRS error. (Owner of account may or may not be known.)

    14. Improper release of the TC 700 (false credit) -U Freeze. See Document 6209 for a complete description of TC 700.

      Note:

      On Category D Erroneous Refunds, the Submission Processing Accounting/Erroneous Refund Unit (A/ER), inputs a TC 700 to remove the erroneous refund amount on Master File and the account is reestablished in Accounting. This action is taken to prevent administrative collection action (liens or levies) from occurring on the erroneous refund liability. Do NOT release the TC 700 credit.

    15. Statute Barred Refunds.

    16. Taxpayer receives erroneous Health Care Tax Credit (HCTC) .

  5. Erroneous refund procedures are not necessary in the following situations:

    1. A signature is missing.

    2. Credit elect requested by the taxpayer has refunded.

    3. In a situation, where an error found in Notice Review increases the original tax (TC 150) and there was not a previous tax decrease, treat the tax increase as a regular turnaround case instead of an erroneous refund. Make the adjustment using Blocking Series 00 (non-income tax returns) or 77 (income tax returns) with Hold Code 0. Apply Label #16 and mail the original notice.

  6. Route returns that need to be reprocessed that also have an erroneous refund to Accounts Management follow the procedures listed below:

    1. Order the return if it is not already with the case.

    2. Complete Form 3465, explaining the erroneous refund and the reason for the adjustment.

    3. Void the notice.

    4. Recharge and route the case to Accounts Management.

  7. Once an Erroneous Refund has been identified, it must be categorized to decide what further actions will be taken. The most common categories worked in Notice Review are A1 , A2 , B, C, and D.

    Note:

    Input TC 971 action code (AC) 663 on the erroneous refund module, regardless of the category. AC 663 is used for reporting purposes. Refer to IRM 21.4.5-1 for input instructions.

    Erroneous Refund Categories
    If Example Then the Category is
    The Erroneous Refund relates to TCs 150, 29X, and/or 30X and the MFT's are not 01, 09, 10, 11, 12, 16, or 88. 1. The IRS lowered the tax when originally processing the Form 1120.
    2. Incorrect tax assessment or incorrect adjustments (TC 29X or TC 30X), on a Form 1120X.
    A1
    Rebate Erroneous Refund 1 and 2 Refer to Exam for deficiency processing. (Only refer cases if ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , do not pursue. See, IRC §6211 (b) (2) and IRM 21.4.5.4.2(7).
    The erroneous refund relates to disallowed EITC, TCs 764, 766 OR 768 or disallowed refundable or nonrefundable tax credits. The taxpayer income tax return not claiming any Rate Reduction Credit (RRC). An error was made during processing and IRS allowed $300 in RRC causing a refund of $300 RRC. TP contacts IRS explaining that he or she has already received the maximum amount of credit the previous year and is not entitled to the credit. A2 Rebate Erroneous Refund. This was an IRS error. Refer to Exam for deficiency processing. (Only refer cases if ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ do not pursue, See IRC 6211 (b) (2) and IRM 21.4.5.4.2.
    The Erroneous Refund relates to taxpayer overstatement of withholding (TC 80X) or ES payments (TC 66X). The taxpayer claimed withholding of $1000 on Form 1041 and the supporting documentation only states $500, B
    Non-rebate Erroneous Refunds
    The Erroneous Refund relates to TCs 150, 29X, and/or 30X and the MFTs are 01, 09, 10, 11, 12, 16 or 88. 1. The IRS makes an incorrect tax assessment (TC 150) on Form 940 or Form 941.
    2. The IRS makes an incorrect adjustment to tax (TC 29X or TC 30X) on Form 940 or Form 941.
    C
    Rebate Erroneous Refunds 1 and 2 Refer to Exam for deficiency processing.
    The Erroneous Refund relates to any error not included in the above categories. 1. A misapplied payment (TCs 6XX).
    2. Incorrect refundable credits (HCTC) or other credits not included in Category "B " .
    3. TC 840 and TC 846 posted for the same overpayment, or
    4. Refunds issued after expiration of the Statute of Limitations, or
    5. Entity errors.
    D
    Non-rebate Erroneous Refunds
  8. Category A1 -- Rebate Erroneous Refunds

    1. Do not input the adjustment.

    2. Mail the notice with no changes or labels.

    3. Input history item CATA1/XXXM or IDRS. (XXX=CP#)

    4. Recharge the return to Exam using CC ESTABDT.

    5. Prepare Form 3465 showing the adjustment action to be taken. Staple the Form 3465 to the front of the return (or to the back of a print of CC BRTVU for Electronic File (Electronic File (ELF)) returns) below the Entity. ( Figure 3.14.2-3 Form 3465 A1).

    6. Staple a copy of TXMOD to the front of the return (or to the back of the BRTVU print for Electronic File (ELF) returns).

    7. Route the Erroneous Refund package to Exam.

      Figure 3.14.2-3

      This image is too large to be displayed in the current screen. Please click the link to view the image.
  9. Category B- Non-rebate Erroneous Refunds for income tax returns.

    Caution:

    If the IRS caused the overstated amount (key input error or misapplied payments), this case is considered a Category "D" (Non-rebate) case. Follow procedures for Category D cases.

    1. Add erroneous refund label to the notice. Mark the disposition online L. If the notice has already been mailed, skip this step. Figure 3.14.2-4 (Labels 15 and 16).

      When to Use Erroneous Refund Labels
      If Then
      The entire refund is erroneous Use Label #15.
      A part of the refund is erroneous Use Label #16.

      Figure 3.14.2-4

      This image is too large to be displayed in the current screen. Please click the link to view the image.
    2. Input the adjustment on IDRS with Hold Code 0. Use the return (or a print of BTRVU for Electronic File (ELF) returns) as a source document. Attach adjustment tag to return/BRTVU and refile as usual.

    3. If any offsets have occurred due to the erroneous credits, reverse the offsets.

  10. Category C - Rebate Erroneous Refunds limited to MFTs 01, 09, 10, 11, 12,16 or 88:

    Caution:

    If the IRS caused the overstated amount (key input error or misapplied payments), this case is considered a Category D (Non-rebate) case. Follow procedures for Category D cases.

    1. Add erroneous refund label to the notice. Mark the disposition online L. If the notice has already been mailed, skip this step. Refer to Figure 3.14.2–3.

      When to Use Erroneous Refund Labels
      If Then
      The entire refund is erroneous Use Label #15.
      A part of the refund is erroneous Use Label #16.
    2. Input the adjustment on IDRS with Hold Code 0. Use the return (or a print of BTRVU for Electronic File (ELF) returns) as a source document. Attach adjustment tag to return/BRTVU and refile as usual.

  11. Category D -- Non-rebate Erroneous refunds

    1. Add erroneous refund label to the notice. Mark the disposition online L. If the notice has already been mailed, skip this step. Refer to Figure 3.14.2– 3.

      When to Use Erroneous Refund Labels
      If Then
      The entire refund is erroneous Use Label #15.
      A part of the refund is erroneous Use Label #16.
    2. If the erroneous refund involves misapplied payments, reverse the payment(s) on IDRS using ADC/ADD24. Input a TC 570 on the debit side of the credit transfer to suppress a CP 260. Transfer the credit only if it belongs to another taxpayer.

    3. If the erroneous refund is due to an incorrect tax or credit, input the adjustment with a Hold Code 3. Use a copy of the return or a print of BRTVU for Electronic File (ELF) returns as a source document. Attach the adjustment tag to the source document.

    4. If any offsets have occurred due to the erroneous credits, reverse the offsets.

    5. Input TC 470 on REQ77 with closing code 93, Posting Delay Code 1. This holds notices for 26 cycles.

    6. Send 510C Letter to tell the taxpayer of the erroneous refund.

    7. Input TC 844 on REQ77. Do not input until after the TC 846 date.

      TC 844 Decision Table
      If Then Input
      The taxpayer is not at fault and the amount of the refund is $50,000.00 or less
      1. TC 844

      2. Extension Date: Use the date of input of 510C Letter plus 5 working days

      3. Transaction Date: Use the date of TC 846

      4. Freeze Release Amount: Erroneous part of the refund (including any erroneous credit interest)

      5. Remark: Erroneous Refund

      The taxpayer is at fault or the amount of the refund is more than $50,000.00
      1. TC 844

      2. Transaction Date: The date of TC 846

      3. Remarks: Erroneous Refund

    8. Complete Form 3465. See IRM Figure 3.14.2–4, Form 3465 D).

    9. Attach a print of TXMOD, a copy of the 510-C Letter, a copy of the payment voucher or check (if caused by a misapplied payment), and any other pertinent documentation to Form 3465. If the adjustment involves withholding, attach a copy of the return (or BRTVU for Electronic File (ELF) returns).

    10. Route the Erroneous Refund package to Accounting. If sending the original return, recharge the document.

      Figure 3.14.2-5

      This image is too large to be displayed in the current screen. Please click the link to view the image.

3.14.2.6.2.2  (01-01-2015)
Manual Refunds

  1. A manual refund is an IDRS generated refund request (TC 840). Thorough analysis of the case is required before requesting a manual refund as it can greatly increase the possibility of a duplicate refund situation and can increase the processing cost of issuing a refund to the taxpayer.

    • When the front line manager reviews the timeliness of the monitoring process he or she will initial and date the manual refund transmittal sheet. The manager will monitor the account with the use of IDRS weekly (Monday - Wednesday) until the TC 840 posts. This is a necessary action that must be carried out to prevent duplicate refunds from occurring. Refer to IRM 21.4.4.5, Other Manual Refund Requirements, for further guidelines on this mandate.

    Note:

    If your center's Notice Review inputs manual refunds, the use of the IAT Tool for both input and monitoring is mandatory.

  2. All Manual Refunds require management approval. Issue the manual refund under the following conditions:

    Manual Refund Decision Table
    If Then
    A refund must be issued before or instead of computer generated refunds (TC 846) Issue a manual refund.
    A refund was intercepted to verify unclaimed payments; the documents were unavailable and the taxpayer did not respond to requests for clarification Issue a manual refund for the substantiated payments.

    Example:

    A taxpayer claims three payments of $2000 each that are verified. The account shows an additional payment of $2,260 that cannot be verified. If the verifiable payment exceeds $5,000 issue a manual refund for $6,000 the amount that the taxpayer claimed. See IRM 3.12.38.5.4 for additional information

    A refund is for $10,000,000 or more See the IRM 3.14.2.7.1.5 ($10,000,000 Refunds).
    The refund is for a prior year return with an original name line that has changed Issue a manual refund in the taxpayer's current name.

    Caution:

    Do not take any action on a case controlled by the Technical or Taxpayer Advocate Service (TAS) Functions. Contact the controlling area and take action only if instructed by the area to do so.

  3. Before requesting an IDRS refund:

    1. Make sure that a computer generated refund will not generate.

    2. Intercept the refund (TC 846).

      Note:

      Monitor the account if a pending transaction may cause another refund to generate before the TC 840 posts.

  4. Be sure the case is complete and correct before issuing a manual refund. To avoid the generation of an 846:

    1. Use a Hold Code 1 (if original notice was mailed) or 4 (as appropriate) on a CC ADJ54 adjustment.

    2. Use a TC 570 on a credit transfer.

3.14.2.6.2.2.1  (01-01-2015)
Manual Refund Research

  1. Obtain all necessary documents.

  2. Use the IDRS research Command Codes to review the taxpayer's account for a debit balance on another module.

    1. Do not transfer credit to satisfy a balance due if the assessed liability on TXMOD is less than ≡ ≡ ≡ and the accrued liability on INTST is less than ≡ ≡ ≡ ≡ .

    2. All Freeze Codes must be addressed before a manual refund is issued. Consult IRM 3.14.2.7.5 (Reviewing Notices With Freeze Codes) for additional Freeze Code information.

    3. Do not transfer payments/credits to a module containing a freeze code that would prevent the computer from offsetting credits unless it is certain the payments belong on the debit module.

      Note:

      For Z- Freeze, contact the Fraud Detection Function.

    4. For parent-subsidiary cases, only research the parent EIN for open liabilities.

    5. Large Corp cases are identified on TXMOD as LARG-CORP> , These notices should be route to the Large Corp/Technical Function in the center.

    6. Do not transfer money to accounts in Installment Status 14.

  3. Decide whether to allow credit interest. See IRM 3.14.2.6.2.2.3 (Computing Credit Interest On Manual Refunds).

3.14.2.6.2.2.2  (01-01-2015)
Resolving a Manual Refund

  1. Complete Form 5792, Request for IDRS Generated Refunds (IGR). ( Refer to Exhibit IRM 3.14.2-7, Form 5792 Request for IDRS Generated Refund).

    1. Take all necessary action to prevent an erroneous refund or erroneous notices from generating.

    2. In the remarks area of the Form 5792, write the taxpayer's TIN, the tax period, and the transaction code where the supporting document will be filed.

    3. If a manual refund will be issued to an address other than the Master File address, explain the different address in the remarks area and indicate where the supporting documentation will be filed.

    4. Monitor the case until the TC 840 posts. Input CC NOREF if necessary to prevent a duplicate TC 846 from generating.

      Caution:

      Treasury Inspector General for Tax Administration (TIGTA) and Headquarters program reviews have discovered an unacceptably high number of erroneous refunds issued due to inadequate monitoring and control of manual refunds.

  2. Input the Return Processable Date (RPD) on IDRS if the correspondence was received after the Return Due Date.

    Changing the Correspondence Date
    If Then
    A CC REQ54 adjustment is needed Include the Return Processable Date with that adjustment. Use Hold Code 1 or 4, if necessary.
    A CC REQ54 adjustment is not needed Use CC REQ54 to input the Return Processable Date. Input a TC 290 .00, Blocking Series 15, NSD, and a Hold Code 4.
  3. Use CC RFUNDR to input the information from Form 5792 on IDRS. The CC RFUNDR entity must exactly match the entity on Form 5792.

    1. If the manual refund will be issued to someone other than the taxpayer, (i.e., Executor or Executrix) the title must be indicated on the Form 5792 and CC RFUNDR.

      Note:

      CC RFUNDR will close the case unless the status is changed from C.

  4. Attach a copy of the IDRS screen prints for the following Command Codes: COMPA, ENMOD, TXMODA, RFUNDR, REQ54/ADJ54, credit transfers (if input), and any additional supporting documents, as required by your local Accounting Branch.

  5. Submit the completed Form 5792 to your team lead for signature.

3.14.2.6.2.2.3  (01-01-2015)
Computing Credit Interest On Manual Refunds

  1. Credit interest is mandatory on an overpayment or refund if certain conditions specified in the Internal Revenue Code (IRC 6611) are met. Compute credit interest using CC COMPA , CC COMPAC and/or CC COMPAG. Currently, the Service currently approves and supports the use of IDRS (e.g., CC COMPA) and a commercial off-the-shelf (COTS) software program, Interest Net by Decision Modeling, Inc., which is commonly referred to as ACT/DMI, to perform manual interest computations. See IRM 20.2.4, Overpayment Interest, for more details.

  2. An overpayment is defined as an amount paid in excess of the tax liability. Tax liability includes tax, penalties and interest. Interest is paid on the available net overpayment.

  3. No interest is allowed on an original return overpayment if the refund of that overpayment is issued within 45 days after the later of the return due date, return received date, or the date the return was received in processable form.

  4. If the return is not in processable form, suspend the 45 day interest-free period. The return or case is not considered to be in processable form until all the required information, correspondence, or supporting documentation is received. On these cases, the start date for the 45 day interest-free period is the correspondence received date (CRD).

  5. If the date of the manual refund check (certification/scheduled date) is not on or before 45 days from the later of the return due date, return received date, or the date the return was received in processable form, interest must be allowed on the refund.

    Determining the "From" Date
    If the Taxpayer Then Allow Interest From the Later of
    Timely filed (i.e., return received by the original or extended due date) The original due date, the payment date, or the CRD/RPD (if after the extension date).
    Late filed (i.e., return not received by the original or extended due date) The late return received date, the payment date, or the CRD/RPD (if present).
    Determining the Payment Date
    If the Payment is a Then the Payment Date is the
    Prepaid or timely credit, e.g., estimated tax payment, withholding (Form 1041), or a payment before the due date (determined without regard to any extension of time for filing) Due date of return. (determined without regard to any extension of time for filing).
    Subsequent payment made after the due date (determined without regard to any extension of time for filing) Payment received date.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Determining the To Date
    If the Return Then
    Indicates an overpayment The interest To date is the date certified by the Accounting Function for allowing the refund.

    Note:

    The Manual Refund scheduled Date cannot be a Saturday, Sunday, or Holiday.

    Reminder:

    Night shifts must use local procedures.

  6. Use the appropriate CC COMPA definer to compute credit interest for the period decided in (6) above. See the following chart.

    IF THEN
    Credit interest before 1/1/99 for a "Non-Corporate" taxpayer Compute using COMPAC
    Credit interest on or after 1/1/99 for a "Non-Corporate" taxpayer Compute using COMPA or COMPAD.
    Credit interest before 1/1/95 for a "Corporate" taxpayer, regardless of the overpayment amount (See IRM 20.2.4.9 , Special Credit Interest Rules for Corporations, for the definition of a "Corporate" taxpayer.) Compute using COMPAC
    Credit interest on or after 1/1/95 for a "Corporate" taxpayer and the overpayment amount is less than or equal to $10,000

    Caution:

    If the General Agreement on Tariffs and Trade (GATT) threshold has been met, the overpayment will be computed at the GATT interest rate (COMPAG), regardless of the overpayment amount. See IRM 20.2.4.9.2, Determining the GATT Threshold.

    Compute using COMPAC
    Credit interest after 12/31/94 for a "Corporate" taxpayer and the overpayment amount is greater than $10,000, or the GATT threshold has previously been met (See IRM 20.2.4.9.2, Determining the GATT Threshold.) Compute using COMPAG (GATT).

    Note:

    Add the COMPAC (first $10,000) with the GATT interest (over $10,000) for the total interest allowed

3.14.2.7  (01-01-2015)
Tax Examiner Review Procedures

  1. The following section contains procedures Notice Review TEs should follow when reviewing notices and transcripts.

3.14.2.7.1  (01-01-2015)
General Review Procedures

  1. TEs must verify the tax return information, if available, contained on the notice by utilizing the information in the NRPS Package and IDRS research Command Codes to ensure the notice contains correct information.

  2. At the beginning of each cycle, NRPS provides a charge out sheet to Files for a list of returns that are required for review based on the assigned key code. For 2015, the keys are 01, 03, 09, 10, 11, 17, 20, 21, 23, 26, 49, 50, 53, 54, 56, 61, 62, 64, 71, 75, 85, 87, and 90.

    Reminder:

    When the tax return is not provided you must research all available information to determine if the notice is correct. This includes but not limited to CC BRTVU and/or IDRS.

  3. Beginning in 2014, all math error notices will have a charge out sheet sent to files to pull the return for association.

  4. A TE must order a document from Files if they deem it necessary for review to ensure the taxpayer will receive a correct notice. Failure to do so will result in incorrect notices being sent to the taxpayer. If document is not received before closeout you must input an H Disposition. Use CC ESTAB when requesting these documents.

  5. If the return is not provided by NRPS the entity portion must be reviewed to ensure that the taxpayer will receive the notice and it is correct.

  6. If you are reviewing a math error notice with a balance due of $250,000 or more or an overpayment of $100,000 or more, then you are required to have the return. If it is not provided based on the list of keys above, then you should request the document by using CC ESTAB, Records Request, Charge and Recharge. If the review can not be completed before close out, you must input CC NOREF and use an H Disposition.

  7. All related tax modules associated with the notice module as well as any associated notices must be reviewed and resolved, as applicable, with the resolution of the notice issue. Only one count will be allowed when associated notices and or modules have to be resolved in conjunction with the notice module.

  8. The notice module may contain multiple issues. All issues must be resolved before marking notice disposition. Refer to all appropriate sections of IRM 3.14.2 to ensure proper analysis and resolution of notice issue(s).

  9. Use the appropriate CC (TERUP, NOREFD, etc.,) to reverse actions that may have been performed in error. Be mindful of specific time frames associated with your reversing actions. Contact your team lead for clarification if unsure. Some of the more common Command Codes used by Notice Review can be found in IRM 3.14.2.7.2, Common Command Codes used in Notice Review.

  10. History Items are required when taking action on your notice module. If notice module is not available on CC TXMOD, A history item is not necessary. Do not create a module just to leave a history item.

  11. Take the following actions with regards to contacting another functional employee that has an open control over the module your are reviewing:

    • Always contact employees in A status.

      Note:

      For exceptions, refer to IRM 3.14.2.7.5 Freeze Codes. Certain Freeze Codes require contact regardless of status code on the module.

    • After two attempts at contact, if no response is received within two days after contact initiated, note contact information on quick print

    • If none made, indicate CNM (contact not made) on the quick print

    • If contact was made, indicate notice disposition and the contacted employee's name and phone number must be written on the quick print.

    • Take the necessary action to resolve the notice.

    • If any of the two day waiting period falls on the day cycle closes no response received, take your action on the day cycle closes.

  12. If the IRM contains inconsistencies and/or conflicting information, immediately submit this information to the Headquarters Analyst for resolution.

    Caution:

    Do not establish local procedures without first contacting the Headquarters Analyst.

  13. The following information and instructions attempt to address situations that are encountered most often when reviewing notices. These instructions cannot address every possible situation and/or issue encountered . They are to be used in conjunction with all the information contained in IRM 3.14.2 and classroom training. When in doubt, contact your team lead or manager.

3.14.2.7.1.1  (01-01-2015)
Manual Intervention Centralized Authorization File (CAF) and Reporting Agents File (RAF)

  1. If Manual Intervention conditions on the notice module are identified on the NRPS contents page, use the following to aid in notice resolution and disposition:

    1. The Centralized Authorization File (CAF) is a listing of all Power of Attorneys (POA) information.

    2. The Reporting Agents File (RAF) is a listing of all agents that are authorized to receive notices. It is limited to filers of Forms 940, 941, 943, 944, 945, 720, 1041, 1120, 2290 and CT-1, for both paper and electronically submitted returns.

    3. If the notice generates with the representative's name and address in the entity, manual intervention will indicate match.

    4. If the notice generates with the representative's name and address blank, manual intervention will indicate mismatch

    5. manual intervention may indicate any combination of CAF Match, CAF Mismatch, RAF Match, or RAF Mismatch.

    6. Use CCs CFINK and RFINK on IDRS to decide notice disposition for CAF/RAF mismatch and locate an authorized representative's name and address.

    Note:

    For more complete instructions for reviewing CAF/RAF notices please refer to IRM 3.14.2.5.3.

  2. Research a CAF mismatch on CC CFINK with Taxpayer's TIN, and the specific MFT and tax period of the notice module.

    1. If CFINK response screen indicates, RECORD NOT FOUND, there is no authorized representative.

    2. If a representative is found, check the RECEIPTS line to decide if the representative is authorized to receive notices:

      Receipts Line Decision Table for CC CFINK
      If Then
      YES is present in the NOTICE field. The representative is authorized to receive notices. Place the representative's name on the Sort Name Line and include the representative's address, city, and state on the appropriate lines under the CAF Mismatch Tab.

      Note:

      More than one representative may be authorized to receive notices.

      NO is present in the NOTICE field. The representative is not authorized to receive notices.
      Rep-Action Line Decision Table
      If Then
      Undeliverable, Disbarred, Suspended , or Deceased is present The representative can no longer represent the taxpayer or the mail is undeliverable.
      None is present The representative is an authorized POA.
    3. Use CC CFINK with the REP-number to view display of each representative's address.

  3. Research a RAF mismatch on CC RFINK with taxpayer's TIN

    1. If CC RFINK response screen indicates, NO DATA AVAILABLE , there is no authorized representative.

    2. If a representative is found, CC RFINK will display the Reporting Agent's name and EIN as well as the MFTs and tax periods they are authorized to receive notices for. (See RFINK Notice Indicators table below).

      RFINK Notice Indicators
      If RFINK Then
      Shows a notice indicator of Y The representative is authorized to receive notices. Check the tax period to decide if the RAF is valid for the notice module.
      If the tax period of the notice Then
      Is the period of or later than the tax period on RFINK This Reporting Agent is authorized to receive the notice. Place the representative's name on the Sort Name Line and include the representative's address, city and state on the appropriate lines under the CAF Mismatch Tab.
      Is the period before the tax period on RFINK A new agent has been authorized. This agent is not authorized to receive the notice.
      Shows a notice indicator of N The representative is not authorized to receive notices.

      Note:

      The tax period shown on CC RFINK is the beginning period the Reporting Agent has authorization.

    3. Use CC RFINK with definer R and the representative's EIN to view display of the representative's name and address.

  4. Notice disposition when a valid Authorized Representative is not located. (See Invalid Representative Disposition table below).

    Invalid Representative Disposition
    If And disposition of original CP is Then
    NO is present on CFINK or NO is present on RFINK Print Select OLNR disposition E (Entity) and void the CAF or RAF Entity copy.
    NO is present on CFINK or NO is present on RFINK Label Select OLNR disposition R (Retype) and void the CAF or RAF Entity copy. Then select the appropriate label from the Label Drop Down Menu.
    NO is present on CFINK or NO is present on RFINK Retype Select OLNR disposition R and void the CAF or RAF Entity copy.
    NO is present on CFINK or NO is present on RFINK Void No action required.
    Disbarred, Suspended or Deceased is indicated Print Select OLNR disposition E and void the CAF or RAF Entity copy.
    Disbarred, Suspended or Deceased is indicated Label Select OLNR disposition R and void the CAF or RAF Entity copy. Then select the appropriate label from the Label Drop Down Menu.
    Disbarred, Suspended or Deceased is indicated Retype Select OLNR disposition R and void the CAF or RAF Entity copy.
    Disbarred, Suspended or Deceased is indicated Void No action required.
    If the representative address is undeliverable Print Select OLNR disposition E and void the CAF or RAF Entity copy by checking the box located on the Entity Tab Screen.
    If the representative address is undeliverable Label Mark OLNR disposition R and void the CAF or RAF Entity copy by checking the box located on the Entity Tab Screen. Then select the appropriate label from the Label Drop Down Menu.
    If the representative address is undeliverable Retype Mark OLNR disposition R and void the CAF or RAF Entity copy by checking the box located on the Entity Tab Screen.
    If the representative address is undeliverable Void No action is required.
  5. Notice disposition when an authorized representative's address is located. (See CAF/RAF Notice Disposition table below)

    CAF/RAF Notice Disposition
    CAF/RAF NOTICE DISPOSITION
    (when an authorized representative's address is located)
       
    Disposition of Original CP CAF/RAF Match Additional Action Required CAF/RAF Mismatch Additional Action Required
    PRINT None
    1. Select the OLNR disposition E.

    2. Add the CFINK or the RFINK address information to the CAF or RAF Entity Copy on the OLNR server.

    VOID None None
    RETYPE None
    1. Select OLNR disposition R.

    2. Add the CFINK or the RFINK address information to the CAF or RAF Entity copy on the OLNR server.

    LABEL None
    1. Select OLNR disposition R.

    2. Add the CFINK or the RFINK address information to the CAF or RAF Entity copy on the OLNR server.

    3. Select the appropriate label.

3.14.2.7.1.2  (01-01-2015)
Account Information

  1. Verify the following items for each selected notice:

    • Employer Identification Number

    • Document Locator Number

    • Name

    • Address

    • Return Received Date

    • Tax period

    • Signature(s) for refund returns only

    • Taxpayer correspondence (if applicable)

    • Payments and credits

    • Discovered remittance (if applicable)

    • Dishonored payments and bad check penalties

    • Offsets

    • $10,000,000 refunds

    • Pending transactions

    • Slipped blocks and mixed data blocks

3.14.2.7.1.2.1  (01-01-2015)
Employer Identification Number (EIN)

  1. Compare the EIN on the return to the notice quick print. EIN discrepancies must be routed to Entity Control. The majority of business returns require an EIN, but an SSN followed by a one letter code is used for Forms 8288, 709 and 706 (V for valid SSN and W for an invalid SSN on BMF). Use CC NAME with the proper definer if you have reason to believe the EIN may have been changed. It may be necessary to use CC BMFOL if the account is for an EIN that is not available on CC TXMOD.

3.14.2.7.1.2.2  (01-01-2015)
Document Locator Numbers (DLN)

  1. Always verify the DLN on your return with the DLN on the notice or NRPS package to ensure that you are reviewing the proper document. If the DLNs do not match, follow local procedures to request the correct document.

3.14.2.7.1.2.3  (01-01-2015)
Name and Address

  1. The Entity area of the notice is an extremely important part of any correspondence we send to the taxpayer. We must always make sure the entity is correct because your notice may be the only contact we will have with them. Failure to have even the most basic address items correctly shown on the notice can affect taxpayers confidence in the agency.

  2. Name–When the return is available compare the name on the tax return to the name on the notice or entity part of the refund transcript. The name on the notice should match the name on the return. If the name on the return is illegible, check the signature, return envelope or other attachments to decide the taxpayer's name. If the name on the notice is different, check CC INOLE under the EIN for the correct Master File name.

    1. If there is a misspelling or typographical error in the first or continuation of first name line (when the first name line is too long), correct the misspelling or typo using CC ENREQ. Because of the nature of BMF tax accounts, ALL OTHER FIRST NAME LINE CHANGES MUST BE SENT TO ENTITY FOR CONSIDERATION. An error will be charged if name changes other than those listed above are initiated by a Notice Review employee.

    2. If the Continuation of first name line is the identical to the first name line, delete the continuation line.

    3. If the Continuation of first name line contains address information, delete the continuation line.

    4. Before deleting a refund for name corrections, decide if the taxpayer will be able to cash the check. If yes, allow the refund, then use CC ENREQ to correct the taxpayer's account if the difference is a misspelling or typographical error.

      Note:

      Follow your local procedures when routing your document to Entity.

  3. Address-Compare the address on the tax return if available with the notice or refund transcript address. The notice must match the return. If the address is illegible, check the return and all attachments for clarification. Use the zip code directory to verify the zip code if the notice and the return do not agree, as well as the spelling of streets, cities and states.

    Note:

    The Integrated Automation Technologies (IAT) tool MUST be used by the centers to make address changes.

  4. The FINALIST program is standardization software used by the United States Postal Service (USPS) to ensure addresses are valid and correct. FINALIST knows if building numbers are valid and is used to ensure the IRS’s outgoing mail, notices, tax packages, etc. comply with the USPS address standards.

    1. An address that is entered into IDRS and does not meet the USPS standards WILL NOT update and/or post with the input address.

    2. The USPS allows thirteen characters (including spaces) for city names. FINALIST will abbreviate city names if needed to reduce the number of characters to thirteen.

    3. FINALIST will also abbreviate street names if over 13 characters. However, a list of abbreviations used by FINALIST is not available.

      Note:

      Abbreviated street or city names are acceptable regardless of the FINALIST program or Pipeline processing. Do not change allow the abbreviation.

      Example:

      PENNSYLVANIA AVE posts as PENN AVE; WASHINGTON DR is posting as WA DR

  5. The general guidelines to follow when making address changes are below:

    1. Never change an address to an in care of unless the request is signed by the taxpayer or authorized representative. If a return, extension, etc., is received with an in care of address and is signed by the taxpayer, process the change.

    2. Change the address if signed correspondence is received from the taxpayer with the old street address lined through and a new address is written in.

    3. If the return has a response written on it, accept the information as coming from the taxpayer. Process the change even if the return is not signed.

    4. If a photocopy is received without an original signature, do not change.

    5. Requests for changes of address from Certified Public Accountants (CPAs), attorneys, etc., will be honored only if we have a valid Power of Attorney on file. Use CC CFINK to check for Power of Attorney.

  6. The entity must be changed in the following instances:

    1. The notice contains an incorrect or misspelled street suffix. Even though the Post Office can deliver by street name alone in most cases, all street suffixes (e.g. Avenue, Boulevard, Circle, Drive, Road, Street etc., or their acceptable abbreviations) must be correct on the notice, regardless of where the error originates

    2. If the notice has incorrect or missing bldg./trailer/apartment number/Suite/Room you must make the correction;

    3. If the return or notice contains both a PO Box number and a numbered street address, put the PO Box in the street address field and the street address in the location address on ENMOD. Correct the address on OLNR to the PO Box.

    4. If a number is shown as part of the city, it must be spelled out. See sample in paragraph 7 below.

    5. If North, South, East or West, (or N, S, E or W) is shown at the beginning of the city name, no change is necessary.

    6. A city or town name (that is too long) will only be abbreviated for lack of space in the IDRS field

    7. Correct obviously misspelled cities and incorrect abbreviations. If you have any questions about valid abbreviations refer to IRM 3.24.38.4.4.14.8. Use the USPS web site or other internet search engines to determine the correct the correctness of an address.

      Note:

      Use of the USPS web site is not required on every notice. Refer to the team leader if in doubt about any part of an address.

  7. Use the chart below for a guide on changing the city.

    Address on Notice Corrected to Notice
    29 PALMS TWENTY NINE PALMS
    1000 OAKS THOUSAND OAKS

    Exception:

    Ft and St are allowable exceptions to the above procedure.

  8. When notices are printed with LOCAL as the address. The following instructions must be followed:

    1. Use CC ENMOD to find the latest entity information on a taxpayer.

    2. Input a CC FINDS/FINDE to obtain the taxpayer's current address information.

    3. Follow local procedures to find the location address if available.

    4. If none of the procedures shown above give a current address to use, then change the address to GENERAL DELIVERY after using the United States Postal Service (USPS) web-site to verify the zip code.

      Note:

      Do not mail a notice with LOCAL as the address.

3.14.2.7.1.2.4  (01-01-2015)
Return Received Date

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Any return received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ after the RDD must have the envelope attached and will carry the stamped IRS Received Date as the return received date unless the postmark date is on or before the RDD (as extended).

    Exception:

    A late filed return that was overlooked in processing may not be stamped. An incorrect received date will adversely affect penalty and interest computations.

    IRS Received Date Decision Table
    If the postmark date is Then the return received date is
    On or before the RDD and the postmark was made by the United States Postal Service, or a designated private delivery service under IRC Section 7502(f) The RDD regardless of when the return was received.
    After the RDD The IRS Received Date.
  2. The TC 610 date on the tax module is the return received date. The DUE/RCVD DATE field in the NRPS package also shows the received date.

  3. If there is a question about the received date, decide the correct received date in the following priority:

    Note:

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

    1. Earliest postmark date on envelope, if there is no postmark on or before the RRD.

    2. Taxpayer signature date; and

    3. Julian control date minus 10 days in the DLN, or

    4. Current date minus 10 days.

  4. IRC 7503 provides that, in the case where the due date for filing or paying falls on a Saturday, Sunday, or legal holiday, the return or payment is considered to have been filed or made on the due date if it is mailed on the next succeeding day which is not a Saturday, Sunday, or legal holiday. “Legal holiday” means any legal holiday in the District of Columbia, or any Statewide legal holiday of the State where the taxpayer files his returns.

  5. The Failure to File (FTF) penalty is the only penalty that should be adjusted manually for Return Received Date recomputation issues. Interest should not be adjusted manually. When the FTF is adjusted manually the computer will adjust the interest. (See IRM 3.14.2.7.17.1, Recomputation of Interest and Penalties-General.)

3.14.2.7.1.2.5  (01-01-2015)
Tax Period

  1. For Business Returns, the type of return filed can have varied period/year endings. They are:

    1. Calendar Year-These are for a consecutive 12 month period ending on December 31. The tax period for this type of return is in the format CCYYMM. The acronym CCYYMM stands for the Century (CC), the Year (YY). the Month (MM). Each acronym is represented in 2 digit format, so it would appear on Business Returns as 201012.

    2. Fiscal Year-These are for a consecutive 12 month period ending on the last day of a month other than December.

      Example:

      A return with a tax period ending January 31, 2011, would indicate a tax period of 201101.

    3. Short Year-These are for a consecutive period of fewer than 12 months. (See IRM 3.14.2.7.4.5 Short Period Returns.)

    4. Quarterly-These returns are filed 4 times a year (within a consecutive 12 month period beginning January 1, and ending December 31)

      Example:

      A first quarter return (January - March 31) would indicate a tax period of 1103 in format YYMM; second quarter, (April -- June 30) would indicate a tax period of 1106 in format YYMM, etc.

  2. Compare the year on the tax return to the tax period on the notice or on the NRPS Package Contents Page.

    1. Look for cross-outs and changes to the tax period part of the return.

      Note:

      Taxpayers often use current year tax forms to file prior year returns.

    2. Fiscal year returns are indicated at the top of the tax return.

    3. If the return is posted to the wrong tax period, reprocess the return to the correct tax period. (See IRM 3.14.2.7.18 Reprocessing Returns.)

3.14.2.7.1.2.6  (01-01-2015)
Signatures

  1. Tax returns are legal documents and must have a signature.

    Exception:

    Taxpayer signatures are not required for the following types of returns:

    • Returns filed under IRC 6020(b) or prompt assessment is notated.

    • Returns prepared by Examination, for example SFR (Substitute for Return).

    • Dummy returns filed by IRS.

    • Correspondence is attached to the return showing that the taxpayer is responding to an IRS letter.

  2. Constructive Signatures (signature on an attached check, letter, etc.) are not acceptable unless there is a perjury statement JURAT on the document which contains the signature. Otherwise the signature must be on the return.

  3. Tax return preparers may use a signature stamp. Taxpayers, however, must continue to sign returns with original signature.

  4. Facsimile signatures -Internal Revenue Procedure 2005–39 outlines the use of facsimile signatures by corporate officers or duly authorized agents when filing certain employer information returns. The Revenue Procedure includes the following tax forms:

    • Form 94X series, including but not limited to Form 940, Employer's Annual Unemployment (FUTA) Tax Return; Form 941, Employer's QUARTERLY Federal Tax Return; Form 943, Employer's Annual Federal Tax Return for Agricultural Employees; Form 944, Employer's ANNUAL Federal Tax Return; Form 945, Annual return of Withheld Federal Income Tax, and Form 941X, Form 943X, Form 944X, Form 945X and Form CT-1X.

    • Form 1042, Annual Withholding Information Return for U.S. Source of Foreign Persons.

    • Form 8027, Employer's Annual Information Return of Tip Income Allocated Tips.

    • Form CT-1, Employer's Annual Railroad Retirement Tax Return.

    • Form 941SS, Employer's QUARTERLY Federal Tax Return.

      The facsimile signature may be in the form of a rubber stamp, mechanical device or computer software program. The corporate officer or authorized agent is responsible for ensuring their facsimile signature is affixed to return. For more detailed information, please refer to Revenue Procedure 2005–39.

  5. If the signature is missing on a tax return requesting a refund or indicating a balance due and the tax module does contain a Computer Condition Code (CCC) 3 or E, process the notice module as if the tax return was signed. If CCC 3 or E are NOT present, consider those conditions when resolving the notice issue(s).

3.14.2.7.1.2.7  (01-01-2015)
Taxpayer Correspondence

  1. If taxpayer correspondence is discovered attached to the return, review it and follow through as necessary. Follow Action 61 (Policy Statement P-6-12) requirements if more than 25 days have elapsed from the date the return was received.

  2. If the correspondence is requesting action to be taken on the notice module:

    Correspondence Decision Table
    If Then
    The action can be taken Take the necessary action.
    Retype the notice as appropriate.
    Update History on IDRS, indicting CORRW/RTN as first History Item; indicate notice disposition with second History Item.
    Mailing of the notice within cycle will satisfy the Action 61 (Policy Statement P-6-12) requirement.
    The action cannot be taken Photocopy the tax return and the original letter.
    Attach the photocopy of the letter to the original tax return.
    Route the original letter with a copy of the tax return to Accounts Management. (Write photocopy on the copy of the tax return.)
    An Interim letter is required if more than 25 days have elapsed from the return received date.
    Update the account History to indicate action(s) taken.
  3. If the taxpayer is requesting an Installment Agreement or indicates an inability to pay and there is no indiction the letter was forwarded to Collections:

    1. Copy the letter and attach the copy to the return.

    2. Notate the original letter was sent to collections.

    3. Route the original letter to Collections.

    4. Make sure the taxpayer's name, address, and EIN is indicated on the correspondence.

    5. Input a CC STAUP for 9 cycles.

    6. An Interim letter is required if more than 25 days have elapsed from the return received date.

    7. Update the account History to indicate action(s) taken.

  4. Route Reasonable Cause requests to Accounts Management.

    1. If the account is in balance due status, input CC STAUP for 9 cycles.

    2. An Interim letter is required if more than 25 days have elapsed from the return received date.

    3. Update the account History to indicate action(s) taken.

  5. If correspondence indicates missing information that was not added when the tax return was processed, or requests assistance in computing tax or credits that is beyond the scope of Notice Review:

    1. Void the notice.

    2. Route to Accounts Management.

    3. Make sure the taxpayer's name, address, and EIN is indicated on the correspondence.

    4. Input CC STAUP for 9 cycles if the account is in balance due status.

    5. An Interim letter is required if more than 25 days have elapsed from the return received date.

    6. Update the account History to indicate action(s) taken.

  6. If the correspondence is referencing a tax module(s) other than the notice module:

    1. Check IDRS for an open control base.

      IDRS Open Control Base Decision Table
      If Then
      There is an open control base Route the original letter to the tax examiner who has the case controlled.
      Indicate correspondence attached to original return on routing document.
      There is no open control base and the requested action has not been taken Input CC STAUP for 9 cycles.
      Route case to Accounts Management.
      Indicate correspondence attached to original return on routing document.
  7. The guidelines for Action 61 (Policy Statement P-6-12) are established to ensure the taxpayer receives an accurate, professional and timely response to correspondence submitted to the Service. In Notice Review, we will be responsible for sending interim responses to correspondence attached to original tax returns when it is decided the action requested has not been taken. If it can be decided the action requested has been taken, the mailing of the notice will satisfy our responsibility for the requirement.

3.14.2.7.1.3  (01-01-2015)
Payments and Credits

  1. This subsection contains instructions dealing with payments and credits. It includes information on discovered remittance, dishonored payments, Bad Check Penalties and Bank Adjustments.

3.14.2.7.1.3.1  (01-01-2015)
Discovered Remittance

  1. When reviewing tax returns, especially Non-Math Error Balance Due notices, thoroughly search all attachments (including envelopes) for payments.

  2. Use the following procedures to process a discovered remittance:

    1. Prepare Form 3244 (Payment Voucher) in duplicate.

    2. Attach the carbon copy to the front of the tax return under the Entity section.

    3. Use CC ACTON to input a history item of DISCREMIT on IDRS.

    4. Input CC STAUP for 8 cycles on all balance due modules.

    5. Void, retype, or label the original notice as required.

    6. Prepare Form 4287 - Record of Discovered Remittance.

    7. Give remittance and the original copy of Form 3244 to team lead.

3.14.2.7.1.3.2  (01-01-2015)
Dishonored Payments and Bad Check Penalties

  1. If a Dishonored Payment transaction (TCs 611, 641, 651, 661, 671, 681, or 691) and penalty (TC 280 or 286) are pending on the notice module:

    1. Delete any refund.

    2. If the refund was deleted, wait for the TC 841 to post.

    3. Input CC STAUP for 6 cycles if a balance due remains.

    4. Retype the notice to include the Dishonored Payment Penalty (Notice Penalty Code 04). Update the balance due, refund amount, or credits on the notice using CC COMPA and CC INTST.

      Note:

      Use CC COMPA to update the module since CC INTST will not be accurate until the TC 280 or 286 posts.

3.14.2.7.1.3.3  (01-01-2015)
Bank Adjustments

  1. There may be instances where payments are encoded incorrectly on a taxpayers account. If an obvious encoding error is discovered, do the following:

    If And Then
    The payment can be located on Remittance Transaction Research (RTR) system The amount of the check matches the amount posted to the account No further research is needed. Resolve the notice issue.
    The payment can be located on RTR The amount of the check does not match the amount posted to the account This may be an encoding error. Print a copy of the check from RTR and follow the directions in the boxes below.
    Math error notice and the notice module is overpaid and a refund is scheduled to be released The payment is less than what the taxpayer is claiming 1. Allow the refund.
    2. Mail the notice.
    3. Send the necessary information to the functional area that resolves Bank Adjustment issues.
    Math error notice and the notice module is overpaid and a refund is scheduled to be released The payment is more than what the taxpayer is claiming

    Note:

    If the verified payments total $5,000.00 or more, issue a manual refund for the corrected refund amount. Void the notice, leave a history and follow Item 4 in next box.

    1. Intercept the refund using CC NOREF.
    2. Use Refund Deletion code 99.
    3. Close your control base.
    4. Send necessary information to the functional area that resolves Bank Adjustment issues.
    The notice is a non-math error notice Notice is balance due Void notice.
    Leave History Item
    Input CC STAUP for 9 cycles.
    Send necessary information to the functional area that resolves Bank Adjustment issues.
    Notice is a non-math error notice Notice is credit or even balance Void notice.
    leave History Item.
    Intercept Refund and/or freeze credit on module.

    Note:

    When working CP 267 or CP 210, if there is a bank adjustment, the credit must be frozen or refund intercepted so the bank adjustment can be done prior to the credit being erroneously refunded.


    Send necessary information to the functional area that resolves Bank Adjustment issues.
    The notice is a math error notice with a balance due The notice has EFTPS payment(s) Mail the notice. Send necessary information to the functional area that resolves Bank Adjustment issues.

3.14.2.7.1.4  (01-01-2015)
Offsets

  1. Internal Revenue Code (IRC) section (§) 6402 (a), (c), (d) and (e) require a taxpayer’s overpayment to be applied to any outstanding Federal tax, non-tax child support, Federal agency non-tax debt, or State income tax obligation prior to crediting the overpayment to a future tax or making a refund. This application of a tax overpayment is called a refund offset. Refund offsets to child support, Federal agency non-tax debts and State income tax obligations are handled by the Bureau of the Fiscal Service (BFS) through the Treasury Offset Program (TOP). This occurs after a refund is certified by Internal Revenue Service (IRS) for payment by BFS, but before the refund check is issued or direct deposit is transferred to the taxpayer’s bank account. For additional information see IRM 21.4.6.

  2. There are three types of refund offsets:

    • Tax offset,

    • Treasury Offset Program (TOP) offset, effective 01/11/1999

    • Debtor Master File (DMF) offset, prior to 01/11/1999

  3. A tax overpayment must offset to an outstanding tax debt before it offsets to non-tax debts or is applied to a credit elect.

  4. The priority of offsets within TOP are:

    • Office of Child Support Enforcement Temporary Assistance to Needy Families (TANF) (payments to the state).

    • Federal Agencies.

    • Office of Child Support Enforcement Non-TANF (payments to the custodial parent through the state).

    • State tax debts

  5. Command Code (CC) INOLE contains debt liability indicators based on information received from BFS. BFS debt records are updated daily; however, IRS CC INOLE is only updated weekly. Therefore, CC INOLE may not have the most current debt information. The indicators are used to identify an IRS freeze or tax debt, TOP non-tax debt, or both. These indicators are shared with Electronic Return Originators (EROs) on the Electronic Filing (ELF) acknowledgement file, and used by the EROs to determine whether to approve a Refund Anticipation Loan (RAL) The indicators are the letters: “N”,“ I”,“ F”,“ B”. For a complete explanation of each code refer to IRM 21.4.6.4 (6).

  6. CC TXMOD also contains debt liability indicator, found directly below the TC 846 and is displayed in the form of the number “0” or “1”. The indicator is set at the time the TC 846 is generated on the module and is shown as: DMFLIAB-> 1 or DMF-LIAB-IND>0.

  7. Offsets occur when credit is moved between different tax modules and/or taxpayer accounts. Credits can be moved manually, or are computer generated.

    Note:

    "Money should not be moved manually with offset or lump sum transaction code if the Refund Statute Expiration Date (RSED) has expired, unless the payment was made less than 2 years before the claim was filed."

    Caution:

    All existing modules with a balance due≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ must be satisfied before inputting a manual refund or manually transferring a credit elect.


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