3.17.10  Dishonored Check File (DCF) and Unidentified Remittance File (URF)

Manual Transmittal

December 11, 2013

Purpose

(1) This transmits revised IRM 3.17.10, Accounting and Data Control-Dishonored Check (DCF) and Unidentified Remittance File (URF).

Material Changes

(1) Updated contact information for Kansas City Criminal Restitution program in IRM 3.17.10.1.9.

(2) Added instruction for Form 8288 remittances in IRM 3.17.10.1.10(4).

(3) Updated reference to drop listings being viewable on Control in IRM 3.17.10.2.6, IRM 3.17.10.2.19 and IRM 3.17.10.3.15.

(4) Updated CIO contact information in IRM 3.17.10.2.9.2.

(5) Updated bank contact information for foreign check processing in 3.17.10.2.13.

(6) Removed Exhibit 2 in IRM 2.17.10.2.9.1. Form 12993-A is available on the IRS publishing website.

(7) Added penalty instructions for dishonored checks received from federal agencies in IRM 3.17.10.2.18.2(2)(k).

(8) Added instructions for URF case documentation in IRM 3.17.10.3.4.1.

(9) Added instruction for IPAC requests to IRM 3.17.10.3.11(2).

(10) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.2.3 Added instructions for ECP Returned Reason codes.

(11) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.2.9.3(2)(b) Updated address; removed 'Attention:' line.

(12) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.2.18(8) Added note for sending Form 8822/8822B.

(13) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.3.2(6) Updated instructions for undeliverable refunds.

(14) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.3.2(19) Added instructions for Fresno and Cincinnati External Bank Leads.

(15) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.3.2.1 Added new instructions for identity theft.

(16) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.3.6(6) Updated instructions for TE/GE User Fee.

(17) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.3.6(12) Added instructions for HCTC payments.

(18) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.3.13(6) Added new instruction for providing the taxpayer with identity theft information.

(19) IPU 13U1283 issued 07-26-2013 IRM 3.17.10.4.2.1(4) Updated KISAM assignment group.

(20) Throughout the IRM are editorial changes to make the instructions more clear. All dates were changed to January 1, 2014.

Effect on Other Documents

IRM 3.17.10, dated November 9, 2012 (effective January 1, 2013) is superseded. This IRM also incorporates the following IRM Procedural Update (IPU)-13U1283, dated July 26, 2013.

Audience

Wage &Investment, Small Business/Self Employed, Large Business and International, Taxpayer Advocate Service, and Tax Exempt/Government Entities personnel.

Effective Date

(01-01-2014)


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

3.17.10.1  (01-01-2013)
Purpose

  1. This IRM Section provides instructions for the campus to process revenue receipt documents and other documents which are used to input data to revenue receipts computer processing or to campus manual (non-master file) operations.

  2. This IRM describes the processes and procedures for adding and applying to the Dishonored Check File (DCF) and the Unidentified Remittance File (URF).

    • The Dishonored Check File is a separate file within the Integrated Data Retrieval System (IDRS) containing records of all remittances returned to IRS by the depositaries upon which payment has been refused.

    • A record of a check will remain on the file for 367 days (from the debit voucher/bank date) or until its entry has been voided or the amount of the check has been debited to the appropriate account.

    • Each DCF record within the file contains the dishonored check number (DCN), reason code, amount of check, type of check, Internal Revenue Service (IRS) received date and entity information, if known.

    • The Unidentified Remittance File is a separate file within the IDRS containing all remittances received that cannot be immediately identified or applied.

    • Each URF record within the file represents a Revenue Receipt less than one year after the IRS received date

    • Each URF record contains the unidentified remittance number, amount of remittance, type of remittance, received date, taxpayer's name and other identifying information, if known.

3.17.10.1.1  (01-01-2013)
Scope

  1. The instructions contained herein are for processing dishonored checks, unidentified remittances, and unprocessable checks which are not the taxpayer's fault.

  2. Unless otherwise specified, the term "Business Master File" will apply to BMF and "Individual Master File" will apply to IMF, and the term "Non-Master File" will apply to NMF.

3.17.10.1.2  (01-01-2013)
Managerial Reviews

  1. First line managers of personnel working Dishonored Check File (DCF) and Unidentified Remittance File (URF) cases will conduct periodic reviews of cases assigned to all employees. The purpose of the review process is to make certain that employees are properly closing cases in a timely manner, identifying Erroneous Refunds, and referring cases to the Erroneous Refund Unit. Managerial Reviews should be submitted to the DCF/URF Headquarters Analyst via email. Monthly (January to June) for DCF due to HQ by the 15th of the following month. Quarterly (remainder of the year) for DCF and URF due to HQ by the 15th of the month following the quarter.

    1. Reviews should be conducted, at least monthly, during January to June (quarterly for the remainder of the year) for DCF and quarterly for URF.

    2. DCF-Sample cases under 21 days old, including Bank Adjustments. Review all cases over 21 days old.

    3. URF-Sample cases under 10 months old. Review all cases over 10 months old.

    4. All reviews will be documented.

      Note:

      Additional IDRS training on how to identify and stop erroneous refunds, or counseling may be warranted if deficiencies are noted.

  2. In addition to the caseload reviews, samples of the following output listings shall be reviewed quarterly to insure that adequate and proper actions are being taken by all employees.

    1. DCF- Restricted Application Register (DCF03), Applications for IMF/BMF (DCF05) , IMF Erroneous Refund Report (DCF25), BMF Erroneous Refund Report (DCF45) and Dropped Listing/Transfers to Unapplied Debits Account (DCF54).

      Note:

      DCF25 and 45 currently list cycles for the previous 12 months. Research is only required on the current and previous cycle.

    2. URF- Restricted Application Register (URF03) and Dropped Listing/Transfers to Excess Collections (URF50).

  3. First line managers of personnel working Dishonored Check File (DCF) must ensure that erroneous refunds caused by dishonored checks are properly identified and stopped. Management must ensure that tax examiners are trained to identify and intercept pending refund.

3.17.10.1.3  (01-01-2013)
IRM Acronyms and Glossary of Terms

  1. The following table contains a glossary of terms:

    Acronym/Term Definition
    Letter 96C, Acknowledgment Letter For General Use Inquiry Sent to the taxpayer whenever requests for additional information or Campus action is received
    Letter 313(SC), Notification Of Proposed Late Federal Tax Deposit (FTD) Penalty Sent to Federal Tax Deposit (FTD) filers who seem to have made insufficient deposits when due. When remittances for these FTD penalties are received, they are applied to the taxpayer's account with transaction code (TC) 690, Designated Payment of Penalty
    Account 1510 Other Receivables, Regular
    Account 1710 Dishonored Checks
    Account 1720 Dishonored Checks, Adjustments
    Account 2340 Photocopy Fees
    Account 2350 Public Debt
    Account 2355 Federal Court Order Restitution
    Account 2360 Conscience Fund
    Account 2380 Installment Agreement, New
    Account 2385 Installment Agreement, Reinstated
    Account 2395 Enrolled Agent Fee
    Account 4620 Unidentified Remittances
    Account 4710 Offers In Compromise
    Account 4970 Unapplied Refund Reversals
    Account 4975 Liability, DOJ Receipts
    Account 6400 Miscellaneous Revenue Collections
    Account 6540 Small Debits and Credits Cleared
    Account 6800 Excess Collection
    Account 6950 DOJ Civil Debt Collection Holdback (ATSPC only)
    Account 7650 Deposit Discrepancy
    Account Management Services Account Management Services (AMS) formerly known as "Desktop Integration or DI" provides a common Interface that allows users of multiple IRS systems to view history and comments from other systems and to access a variety of case processing tools without leaving AMS.
    Accounting Package Required information, forwarded to Accounting Operations, to control and balance the Campus Revenue Receipts
    Automated Collection System (ACS) Automated Collection System. A computerized system which maintains delinquent taxpayer accounts in TDA status 22
    Agency Location Code (ALC) Agency Location Code. A numeric symbol used to identify accounting reports and documents prepared by IRS. This code consists of eight digits. The fifth and sixth identify a Submission Processing Center
    Automated Lien System (ALS) Unit Automated Lien System Unit, Case Processing, in Accounts Management organization
    Annotate To notate on the listings, action taken
    Area Office Remittance Register (AORR) Area Office Remittance Register, used in Accounting to track revenues generated by the Area Offices, also known as Taxpayer Assistance Centers
    Area Office An office of Internal Revenue Service located in a principal city within each state or part of the state; also known as Taxpayer Assistance Centers
    Assessment Amount of tax charged to taxpayer
    Associate Assemble together the Dishonored Check, Form 2287(CG) and the worksheet
    Automated Collection System (ACS) A paperless inventory system which maintains on computers most delinquent accounts and delinquency investigations formerly handled in paper form in area office Collection Office functions. The computer system is coupled with a concentrated telephone contact effort
    Bank Discrepancy Initial deposits are out of balance due to a difference between deposit tickets and supporting remittances. Errors are caused by improper handling of remittances that result in differences between the records of the depositary bank and the campus. Also known as Deposit Discrepancy
    Batch A group of returns, documents, or checks; IRS batches usually contain 100 or fewer items
    Batch Profile A listing to identify the area in which a certain batch of work is located
    BBTS Batch Block Tracking System
    Business Master File (BMF) A magnetic tape file containing information on each taxpayer's business returns & related documents
    Calendar Year (CY) A tax year ending on December 31
    Cash Conversion A document and check taken in at the area office, but processed at the campus
    CADE 2 Beginning January, 2012, with CADE 2 deployment, IMF will process and post individual submissions on a daily basis. Only accounts and transactions that have met specific criteria will process and post daily. The remaining accounts and transactions will resequence until the end of the cycle
    • With the implementation of CADE 2 the campus cycle will change. The cutoff for the week's processing will move back one day, from Thursday night to Wednesday night for all Master Files. This change allows all Master Files (IMF, BMF, etc.) to be processed by IDRS weekend analysis one week earlier

    • IMF Daily posted transactions will be updated and available for viewing on CFOL by 6 a.m. the following business day providing posted information sooner

    Custodial Detail Data Base (CDDB) The Custodial Detail Data Base is a system created to track all individual payments that comprise a Deposit Ticket
    Check 21 The Check Clearing for the 21st Century Act. Check 21 involves creating digital images of original checks. These images are called "substitute checks"
    Central Image and Research Archive (CIRA) Central Image and Research Archive, available on OTCnet
    Centralized Offers In Compromise (COIC) Centralized Offers In Compromise, a program in Small Business/Self Employment (SB/SE)
    Command Code (CC) A five or six character code used to initiate contact with IDRS, i.e., BDADD, URAPL, etc
    Credit An amount paid or transferred as payment to an account
    Credit Balance A condition in which the amounts of credit on a tax amount exceed the balance due
    Compliance Services Collection Operations (CSCO) Compliance Services Collection Operations
    Collection Statute Expiration Date (CSED) Collection Statute Expiration Date. The last date IRS has to collect on an outstanding balance due on an account. Usually ten years from the Assessment Date
    Dishonored Check File (DCF) Dishonored Check File, an IDRS database for returned checks
    Dishonored Check Number (DCN) Dishonored Check Number, assigned to each dishonored check
    Debit Balance The amount owed on an account. The balance due exceeds the total amount of credits
    Debit Voucher Contains all debit adjustments of revenue receipts previously credited to the account; covers dishonored checks and other charges by depositary banks
    Depository/Depositary The bank contracted by Treasury's Financial Management Services (FMS) to process IRS deposits and established credit for the Treasury into the Treasury's General Account (TGA)
    Deposit Date The calendar date coinciding with the Julian Date in the DLN
    Deposit Discrepancy Initial deposits are out of balance due to a difference between deposit tickets and supporting remittances. Errors are caused by improper handling of remittances that result in differences between the records of the depositary bank and the campus. Also known as Bank Discrepancy.
    Deposit Ticket The form (SF 215-A) the Deposit Function is required to prepare to deposit each day's balanced remittances
    Designated Payment Code (DPC) A two position numeric code designating either the source of a payment or the type of tax liability (levy, seizure, installment, etc.) the payment is to be applied against.
    DPCs 04, 05 or 06 on a line with TC 670, 680, 690, 694 or 700 on CC TXMOD, indicates a payment made by levy
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    Desktop Integration Desktop Integration (DI) system provides a common interface that allows users of multiple IRS systems to view history and comments from other systems. Renamed to Account Management Services (AMS) in FY 2009
    Dishonored Check A check returned unpaid by the bank
    Dishonored Check File (DCF) A separate file within the Integrated Data Retrieval System (IDRS) containing records of all remittances returned to IRS by the depositaries upon which payment has been refused. A record of a check will remain on the file for 367 days (from the debit voucher/bank date) or until its entry has been voided or the amount of the check has been debited to the appropriate account. Each record within the file contains the DCN, reason code, amount of check, type of check, IRS received date and entity information, if known
    Dishonored Payment An electronic payment unpaid by the bank. Beginning January 1, 2011, electronic payments can be charged a dishonored payment penalty
    DM 1 Tape The Social Security Administration tape against which every transaction input is checked by SSN and name control before posting to the Master File
    Document A tax return, schedule or paper which establishes or affects a taxpayer's account
    Document Code (Doc. Code) The fourth and fifth digits of the DLN which identify the type of document used to record tax data information on a taxpayer's account. For example, Doc Code 41 identifies Form 941, Employer's Quarterly Federal Tax Return. Refer to Document 6209, IRS Processing Codes and Information, for a complete listing of doc codes
    Document Locator Number (DLN) A thirteen-digit number which is assigned to every return and document input through the Automatic Data Processing (ADP) System. The DLN is used to identify and locate a document. The campus computer assigns a fourteenth digit—the year of processing
    Due Date The date tax or tax return is due and payable, i.e., Forms 1120 U.S. Corporation Income Tax Return are due two and one-half months after the end of the tax year
    Dummy Return A substitute return prepared by IRS to serve as an input document when certain remittances are received without a return
    Enterprise Computing Centers (ECC) Enterprise Computing Centers. On June 27, 2004, the Martinsburg and Tennessee Computing Centers (previously named MCC and TCC) were realigned into this one organization. Specific sites are referred to as ECC Martinsburg or ECC Tennessee)
       
       
    Edit To underline the name control on a Dishonored Check
    Electronic Funds Transfer (EFT) The transfer of funds electronically.
       
    Electronic Federal Tax Payment System (EFTPS) Electronic Federal Tax Payment System. The following types of payment methods fall within this category: ACH Debit, ACH Credit, FR-ETA, Levy, EFTPS-Online, Credit Card, RRB Link, Government and E-File Debit (EFW)
    Electronic Check Presentation (ECP) Electronic Check Presentation. Beginning July, 2011, Lockbox checks are processed using ECP
    Electronic Verification and Image Service (ELVIS) Electronic Verification and Image Services used to view payments processed through Paper Check Conversion (PCC)
    Encoding The money amount printed at the bottom of a Check or the IRS printed information on the back of a check
    Endorsement The authorized name of payee on the back of a remittance in order to obtain the cash or credit represented on the front. Each check deposited must show the IRS endorsement, date of deposit (manual endorsements excluded) and legend, and must contain the same ALC and depositor address as shown on Form SF215-A, Deposit Ticket
    Estimated Tax (ES) Tax due on income not subject to tax withholding
    Excess Collections File (XSF) A file within the IDRS containing non-Revenue Receipts which cannot be identified or applied. Each record within the file contains the XS control number, amount of credit, type of credit, received date and other identifying information, if known. XSF reflects contents of Accounts 6800 and 9999 less than seven years and more than one year after the IRS-received date except in true statute cases, where it may be under one year
    Expedite To speed up processing of any urgent or involved document
    Federal Tax Deposit (FTD) The PAYTAX system that processed FTD payments was decommissioned in January, 2011. Deposits should be made using the Electronic Federal Tax Payment System (EFTPS)
    Filing Requirements (FR) A list of the numbers of all forms which a particular taxpayer is required to file
    Fiscal Year (FY) A tax year covering any twelve-month period other than a calendar year
    Fiscal Year Ending (FYE) Or Month (FYM) A two-digit number indicating the final month of a fiscal year. Certain tax returns (Forms 1040, 1065, 1120, 1120S) are filed at the end of the fiscal year. For example: Fiscal year begins April 1 and ends March 31; FYM is 03
    FMS Form 197, Judgment Fund Voucher for Payment Modified and used to secure payment of taxpayer claims pursuant to IRS Policy Statement P-5-39 through Beckley Finance Center, Beckley, WV under the Judgment Fund , 31 U.S.C. 1304 (a) (3).
    Form 783, Remittance Register Used to list IMF and BMF remittances
    Form 784, Recapitulation Of Remittances Used to daily summarize and balance remittances by type and amount
    Form 809, Receipt For Payment Of Taxes Used as a taxpayer's receipt for cash payment of Federal taxes
    Form 813, Document Register Used to list transaction amounts for remittance or assessment documents
    Form 813-A, Recapitulation Of Document Registers Used to summarize the Form 813 totals included in a particular deposit ticket
    Form 1963, Collection Register-Deposit Funds Refund Repayments, General Fund Receipts Records receipts and deposits of general fund remittances
    Form 2287(CG), Notice Of Check Not Accepted By Bank Sent to the taxpayer with the dishonored check to notify him/her that the check was not accepted for payment by their bank. The dishonored check penalty is shown, and repayment is requested by certified check, cashier's check or money order
    Form 2345, Batch Transmittal Used to list and control batches of documents in campus processing operations. Information from this form can be transferred to the dishonored check worksheet during research
    Form 3210, Document Transmittal Used as a control for transfer of TDAs, TDIs, RCPs and other types of Collection investigations. Used to transmit and control accounts from area offices to the campus
    Form 3244, payment Posting Voucher Used to post payments to taxpayers' accounts; not a taxpayer receipt
    Form 3244-A, Payment Posting Voucher-Examination Primarily used to post an advance payment to the taxpayer's account via IDRS as a result of an audit
    Form 3245, Posting Voucher-Refund Cancellation Or Repayment Used to input refund cancellations and repayment transactions to a taxpayer's account on the IMF or BMF master files
    Form 3699, Return Of Documents To Taxpayer Used to return documents to the taxpayer for the reason indicated on the form
    Form 3731(C), Unidentified Remittance Notice Used to request information from the taxpayer about unidentified tax payments
    Form 3893, Reentry Document Control Used to reinput documents/blocks or to reprocess documents
    Form 4221, Remittance Control Number Record Used to control blocks of remittances processed through encoder machines
    Form 4338, Information Or Certified Transcript Request Used to request information on or a transcript of an Automated Data Processing (ADP) or non-ADP account
    Form 4830, IDRS Multi-Purpose Posting Document Used to identify cases which dropped to the Excess Collections account from the Unidentified Remittance File (URF); also used to identify transfers, NMF cases and NMF dishonored checks
    Form 8157, Check For Copy Of Tax Return Not Accepted By Bank Used to return check to the taxpayer intended to pay for copies of tax return which the taxpayer's bank did not honor
    Form 8250, Request To Redeposit Checks Used to request preparation of a replacement deposit ticket when accompanied by checks for which the bank has debited IRS
    Form 8252, Dishonored Check Worksheet A transparency to be photocopied with a dishonored check to create a worksheet for recording research performed; also available in paper
    Form 8269, Notice Of Dishonored Check For More Than One Tax Form Sent to taxpayer with dishonored check and Forms 2287(CG) when the check was intended to pay more than one tax account. Notice includes information about repayment and penalties
    Form 8290, Returned Check Repayment Notice Sent to the taxpayer with Form 2287(CG) when a dishonored check penalty is not assessed because the check was dishonored for a reason that was not the taxpayer's fault. Form 8290 also states that the repayment will be credited to the account with the date of the original payment if repayment is made within 10 days of the date of the notice
    Form 8546, Claim For Reimbursement Of Bank Charges Submitted by taxpayer with documentation to claim reimbursement for expenses incurred when the Campus lost or misplaced the taxpayer's remittance pursuant to IRS Policy Statement 5-39
    Form 8758, Excess Collections File Addition Prepared to request inclusion of a credit on the XSF and to debit the account from which it is to be transferred. Designed to mirror CC XSADD format to reduce input errors
    Form 8765, IDRS Control File Credit Application Prepared to request application of a credit from the XSF or the URF. Designed to mirror CC URAPL and XSAPL formats to reduce input errors
    Form 8822, Change Of Address Completed and submitted by taxpayer to change official IRS record of his/her address
    Form 12993, Check for Installment Agreement User Fee Not Accepted By Bank Used to return check to the taxpayer intended to pay for installment agreement user fees which the taxpayer's bank did not honor
    Form 12993-A, Check for Offer in Compromise Payment Not Accepted By Bank Used to notify the taxpayer that a check for an Offer In Compromise application was not accepted by the bank
    FRB Federal Reserve Bank. A bank designated to process IRS bank deposits
    Freeze A restrictive action applied to a Master File account to prevent normal computer actions of offsets or refunds
    Freeze Code A transaction code restricting the computer from refunding or offsetting from an account or from sending notices to the taxpayer
    Government On Line Accounting Link (GOALS) Government On-Line Accounting Link System, used to transfer funds between government agencies
       
    Holds Automated Listing (HAL) Holds Automated Listing used by Notice Review to intercept a refund. Beginning January, 2013, HAL will no longer be available
    Individual Master File (IMF) A magnetic tape file containing information concerning all taxpayers who file individual tax returns
    Individual Master File Individual Retirement Account File (IMF IRAF) A magnetic tape file containing information containing individual retirement accounts. Refers to MFT 29 records
    Input Documents Approved documents which contain information to be fed into the computer, such as tax returns and posting vouchers
    Installment Agreement An arrangement set up between taxpayers and IRS, whereby taxpayers make partial payments until their balance of debt is paid in full
    Integrated Data Retrieval System (IDRS) A computer system with the capability to instantaneously retrieve or update stored information which will work in harmony with the Master File of taxpayer accounts
    Integrated Submission And Remittance Processing (ISRP) System A computerized system which will convert paper tax and information documents and remittances received by IRS into perfected electronic records of taxpayer data. This system will capture, store, retrieve, archive (vouchers and check images) and route source data through processing activities which subsequently posts to the taxpayer's account on Master File
    Intra-Government Payment and Collection (IPAC) Intra-Governmental Payment and Collection (IPAC) System. This is a major component of the GOALS II System. It provides a standardized interagency fund transfer mechanism for Federal Program Agencies (FPAs)
       
       
    Internal Revenue Service Number (IRSN) Temporary identification number used to post a payment for a taxpayer with no Taxpayer Identification Number.
    Individual Taxpayer Identification Number (ITIN) Identification number for taxpayers who are not United States citizens
    Journalization The process of debiting and crediting General Ledger accounts. Every tax transaction that involves money must be journalized to maintain accounting control
    Julian Date A system of numbering the days of the year from 001 through 365 (or 366). The Julian Date number is the 6th, 7th, and 8th digits of the DLN
    Letter 2179(P) Used to transmit FMS Form 197 vouchers to the taxpayer for his/her signature upon approval of claim pursuant to IRS Policy Statement P-5-39
    Letter 2180(P) Used to transmit signed FMS Form 197 vouchers to the Beckley Finance Center, Beckley, WV for payment to the claimant pursuant to IRS Policy Statement P-5-39 under the Judgment Fund, 31 U.S.C. 1304 (a) (3)
    Letter 2349CG Generated through CC URAPL to inform taxpayer of disposition of payment
    Levy To collect by attachment or seizure from the taxpayer or a third party holding assets belonging to the taxpayer. Usually refers to collecting tax from the taxpayer's bank account or from wages to be paid by the taxpayer's employer. Property such as a car or house may be sold
    Lockbox The process whereby remittances and documents are mailed to a designated P.O. Box at a commercial bank. The remittances are deposited in an expedite manner with immediate credit availability for the Treasury. Source documents are processed simultaneously and forwarded to campuses
       
    Magnetic Tape Plastic tape, coated with magnetic material, on which information is recorded by a process of electrical impulses forming minute polarized characters. The tape is used in computers. Much the same as the tape used in a standard tape recorder
    Manual Processing The type of deposit consisting of manually numbering source documents, manually preparing separate documents and remittance registers and separately recapping both the registers. These deposits will be assigned a Trace ID using Batch Block Tracking System (BBTS). BBTS will create both a 14 digit Trace ID (to be transcribed on the deposit ticket and entered into RRACS) and a 20 digit Trace ID to be stamped on the individual payments that will be processed for posting to MF
    Master File (MF) A magnetic tape record containing entity and accounting information concerning taxpayer's tax returns and related documents, including Business (BMF) and Individual (IMF)
    Master File Tax Code (MFT Code) A two-digit number which identifies the type of tax. (Form 941, MFT Code 01)
    Magnetic Ink Character Recognition (MICR) Print used in the encoding of the payment amounts, Routing Transit Number, and Account Number shown on the remittance
    Microfilm A photographic record of printed data on a reduced scale
    Mixed Data This occurs when an operator has transcribed the data from one document and the remaining information from another document
    Mixed Entity This occurs when an operator has transcribed entity from one document and the remaining information from another document
    Module The part of a taxpayer's account which reflects tax data for one tax class (MFT) and one tax period
    Monitored Offer In Compromise (MOIC) Monitored Offer In Compromise a program in SB/SE
    Multiple Remittance A remittance that did not completely pay an account and was accompanied by one or more additional remittances to make the payment on a single document or module
    Name Control The first four characters of the principal name of the taxpayer. Blank spaces will be included if the principal name consists of less than four characters
    National Archives and Record Service (NARS) Agency which stores IRS documents at Federal Record Centers.
    Non-Master File (NMF) A file containing records of returns for which manual procedures must be maintained
    Non-Remittance (NR) A document received without a payment
    Non-Revenue Receipts Payments received for items other than taxes, i.e., bulk forms, photocopy fees, court fines, installment user fee, erroneous refund repayments, etc
    Notice 942, Proper Credit For Your Tax Payments Notice to be sent to taxpayer who did not sufficiently identify his/her payment to allow prompt crediting of the correct account. Will advise appropriate taxpayer action to facilitate crediting of subsequent payments. To be sent only with Letter 2349CG
    Offer In Compromise (OIC) A proposal for settlement of tax liability for an amount less than that previously assessed (or unassessed) or a liability for specific penalties assessed (or unassessed)
       
    OTCnet FMS Over The Counter Channel Application integrates the Paper Check Conversion Over the Counter and Treasury General Account Deposit Reporting Network systems
    Paper Check Conversion (PCC) Paper Check Conversion System. PCC scans checks and automates the receipt, acceptance, transferring and recording of funds
    Pending Transaction A transaction input to IDRS but not yet effective at the Master File Account
    Period Ending The ending year and month indicating the period covered by a tax return; i.e., 200909 indicates a return for the period ended September 30, 2009
    Payment Expired Collection Statute Expiration Date (PMTEXPCSED) A Payment Expired CSED (PMTEXPCSED) transcript will generate when a payment is applied to a module after the Collection Statute Expiration Date (CSED) has expired
    Reason Code A two-digit number representing the reason a check was dishonored; not used to determine penalty assessment
    Received Date The earliest date payment or document is received by any IRS office
    Redesign Revenue Accounting Control System (RRACS) System used by make journal entries to the IRS General Ledger
    Refund Money returned to the taxpayer as a result of overpayment of a tax liability
    Reject A document which did not post to an account because of incomplete information
    Remittance Amount An amount of money received from a taxpayer. Can be a check, money order, cashiers check, treasury bond or cash
    Remittance Processing System (RPS) A combination of computerized equipment and procedures designed to improve the processing of taxpayer's documents and remittances
    Remittance Transaction Research System (RTR) The Remittance Transaction Research (RTR) application consolidates all Integrated Submission Remittance Processing and Lockbox Bank remittance transaction data and images and makes them available to authorized users who need to research remittance transactions
    Renumbered Document Locator Number New DLN assigned as a result of an audit or adjustment. The document can be located in the file under the new number
    Resequence The moving of data from one location on the Master File, rearranging it in another sequence, and applying it to another location on the Master File. (This is also known as a consolidation.) Term also refers to data which is unable to post in the current cycle and is "resequenced" to the next cycle
    Restricted Application Register Computer-generated reports, DCF03, 1710 Account Transaction Register; and, URF 03, 4620 Account Transaction Register, which includes "D" (dishonored check) applications, "V" (voided record) applications and "Z" (corrected erroneous money amount) applications
    Return A legal form used by the taxpayer to report tax liabilities
    Remittance Strategy for Paper Check Conversion (RS-PCC) Remittance Strategy for Paper Check Conversion (RS-PCC) interfaces with EFTPS to post taxpayer information to Master File. The checks are scanned; taxpayer accounts are debited; and the posting information is sent to EFTPS for account posting.
    Servicewide Electronic Research Program (SERP) Research tool,
    http://serp.enterprise.irs.gov/
    Single Deposit Shortage Only one check is returned per debit voucher/SF 5515, as opposed to multiple checks being returned and included in the total for a specific debit voucher. Single deposit shortages do not affect other payments per the debit voucher
    Slipped Blocks/Mixed Data/Mixed Entity This occurs when an operator has mixed data or mixed entity on several documents within a block
    Split Remittance A single remittance, the amount of which is to be applied to two or more documents or modules
    Standard Form (SF) 215, Replacement Certificate Of Deposit Forwarded to the campus from the depositary bank and containing information about treasury bonds or account discrepancies
    Standard Form (SF) 215-A, Deposit Ticket Completed by area office and campus teller and cashier functions to make deposits. Includes information on treasury codes and money amounts divided into tax classes
    Standard Form (SF) 1081, Voucher And Schedule Of Withdrawal And Credits Used to transfer charges and credits between the various Treasury agencies, i.e., payment for bulk forms transferred from IRS to the appropriate distribution center. Complete instructions are in IRM 3.17.79
    Standard Form (SF) 5515, Debit Voucher Contains all debit adjustments of revenue receipts previously credited to the account; covers dishonored checks and other charges by depositary banks
    Statute of Limitations The Internal Revenue Code states that the IRS will assess tax, issue refunds or credits and collect taxes within a specific timeframe. This limit is known as the "Statute of Limitations" . The statute expiration differs for assessment (ASED), refund (RSED), and collection (CSED)
    Substitute Return A return prepared by the Service from information sufficient to compute the taxpayer's tax liability
    Tax Account A record of all tax data recorded on the Master File, showing all classes of tax and all tax periods identified by one Social Security Number (SSN) or one Employer's Identification Number (EIN). Separate tax accounts are maintained on the Business Master File (BMF) and the Individual Master File (IMF). A person who has both an individual account under their SSN, and a business account under their EIN, has two separate accounts
    Tax Class Code The third digit of the DLN which identifies the type of tax each transaction involves
    Tax Module A record of tax data for a taxpayer covering only one type of tax for one tax period. A module consists of the MFT Code and the tax period (i.e., 30 [Form 1040] for 200912)
    Taxpayer Advocate Service (TAS) An independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should
    Taxpayer Identification Number (TIN) Every taxpayer on the Master File has a permanent number for identification of the taxpayer's tax account
    1. The Employer Identification Number (EIN), assigned by IRS, is used to identify taxpayers on the Business Master File. For Example: The format of an EIN is: XX–XXXXXXX

    2. The Social Security Number (SSN), assigned by the Social Security Administration, is used as the account number of the taxpayer on the Individual Master File. For Example: The format of a SSN is: XXX-XX-XXXX

       
    (Taxpayer Information File) TIF A record of tax data under a specific taxpayer identifying number
    Tax Increase Prevention and Reconciliation Act (TIPRA) Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), enacted on May 17, 2006
    Trace ID Number Trace ID is a tracking mechanism to identify each Deposit Ticket (DT) with its corresponding payments and each Debit Voucher (DV) with its corresponding debits. It is mandatory that every DT and DV have a Trace ID number. As of January 2008, all input payment systems automatically assign a 20 digit Trace ID number to each deposit ticket
    a. 14 digits for the Deposit Ticket
    b. 20 digits for the individual payments associated with a Deposit Ticket
    The unique Trace ID will allow all payments to be identified and added to the CDDB. The format of the Trace ID number is: Site ID, System ID, Deposit Date, Seq Number, and Transaction Seq Number
    Transaction Code (TC) A three-digit number which defines the precise nature of the transaction. For example, TC 150 indicates "Return Filed & Tax Liability Assessed " . Refer to Document 6209, IRS Processing Codes and Information, for complete listing of transaction codes
    Treasury Web Application Infrastructure (TWAI) The Treasury Web Application Infrastructure (TWAI) is an environment that houses Treasury web application of all types, including OTCnet
    Twenty-Three C Date (23C) The date a liability is assessed
    Unidentified Remittance (UR) A remittance received by the IRS which cannot be positively identified and/or applied to its proper account
    Unidentified Remittance File (URF) A separate file within the Integrated Data Retrieval System containing all remittances received that cannot be immediately identified or applied. Each record within the file represents a Revenue Receipt less than one year after the IRS-received date and contains the UR control number, amount of remittance, type of remittance, received date, taxpayer's name and other identifying information, if known
    Unidentified Remittance List Computer-generated report, URF 50, Unidentified Remittance Dropped List, which includes all URF applications that drop from the URF to the XSF
    UNKN Unknown
    Unpostable (UP) The transactions which do not post at Enterprise Computing Center because of an inconsistency with the Master File
       
    Validation Digit Indicates whether a SSN is valid or invalid. There are two digits:
    0—Valid SSN. Indicates that this SSN and name control match on the Social Security Administration records
    1—Invalid SSN. Indicates that the SSN and name control failed to match Social Security Administration records
    With-Remittance Document (W/R) Any document received with cash, check, money order or other forms of payment
    Excess Collections File (XSF) A control file within IDRS containing all non-revenue receipt credits that cannot be identified or applied to their proper tax account. XSF contains both Account 6800 , Excess Collections, and Account 9999 , Revenue Clearance Accountability, data for seven years after the entry date of the payment to the XSF

3.17.10.1.4  (01-01-2013)
IDRS Notice Issuance Criteria

  1. All employees must be aware of IDRS notice issuance criteria and the input of CC STAUP on a module if closing action cannot be accomplished before the next notice is issued.

  2. The number of cycles must be for a sufficient period to ensure that balance due notices will not be issued prematurely. It may be necessary to extend the previously input STAUP if the transfer procedure is lengthy.

3.17.10.1.5  (01-01-2013)
Research

  1. The extent of research conducted on both dishonored checks and unidentified remittances will not depend upon the dollar amount of the item. Both large and small cases are to receive equal attention, but large-dollar cases will be worked first.

3.17.10.1.6  (01-01-2013)
Processing Timeframes For URF

  1. Valid CC URADD cases must be added to the URF within five workdays of receipt of Form 2424, Account Adjustment Voucher, in the Unidentified function. This procedure includes any action necessary to remove the credit from its previous location. (SeeIRM 3.17.10.3.3 Unidentified Remittance File).

  2. All CC URADD cases must be thoroughly researched to the standard outlined in IRM 3.17.10.3.5 (Initial Processing by UR Technicians). Substantial efforts to attain this research standard must be initiated within two workdays of their addition to the URF. SeeIRM 3.17.10.3.2 (Receiving Unidentified Remittance Cases) for exceptions.

  3. CC URAPL cases must be applied from the URF within one workday of receipt of Form 8765, IDRS Control File Credit Application, in the Unidentified function.

3.17.10.1.7  (01-01-2013)
Taxpayer Advocate Service Case (TAS) Procedures, National Service Level Agreements (SLAs)

  1. The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. TAS criteria include economic burden, systemic burden, best interest of the taxpayer, and public policy (as determined solely by the National Taxpayer Advocate (NTA)). TAS is responsible for assisting taxpayers who have unresolved problems with the IRS. See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, if additional information is required.

  2. While the Internal Revenue Service (IRS) is continually working to serve customers in a quality manner, some taxpayers still have difficulty getting solutions to their problems or getting timely and appropriate responses to their inquiries. Per IRC § 7803(c), Congress established the office of the National Taxpayer Advocate (NTA) and its functions within the IRS to assist these taxpayers. TAS has identified criteria that qualify taxpayers for TAS assistance. The Case Advocate will conduct an independent review of actions that have been taken or need to be taken to resolve the problems taxpayers are experiencing.

  3. Employees should not view TAS Case Criteria as a means of excluding taxpayers from TAS, but rather, as a guide to TAS case acceptance. The criteria under which TAS accepts a case should not govern whether a taxpayer is entitled to relief.

  4. If the IRS employee can resolve a taxpayer’s inquiry or provide the relief requested, as outlined in IRM 13.1.7.4, Same Day Resolution by Operations a referral to a TAS office is not necessary even if TAS case criteria are met. The definition of "same day resolution" is "within 24 hours." However, cases where the employee cannot completely resolve the issue within 24 hours, but has taken steps within 24 hours to resolve the taxpayer’s issue, also meet the definition of "same day." Do not refer these cases to TAS unless the taxpayer asks to be transferred to TAS.

    Note:

    It is important that all IRS employees handle potential TAS cases with the taxpayer's best interest in mind. Refer also to IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, for more information. Provide the taxpayer with the number for the NTA toll-free case intake line, 1-877-777-4778 or TTY/TDD 1-800-829-4059. The taxpayer should be advised that TAS is available if the taxpayer is not satisfied with the service he or she received.

  5. An IRS employee should make a referral to a TAS office if the employee receives a taxpayer contact, and cannot initiate action to resolve the inquiry or provide the relief requested. A taxpayer does not have to specifically request TAS assistance to be referred to TAS. IRS employees will advise taxpayers of the option to seek TAS assistance when appropriate. TAS will request documentation from the taxpayer if it is needed to support the requested relief, or required by the IRM.

  6. TAS has Service Level Agreements (SLAs) with W&I, SB/SE, LB&I, TE/GE, CI and Appeals to ensure that standards are established within the business operating divisions/functions to process TAS casework when the authority to complete transactions rests with the division/function.

  7. The SLAs are located on the TAS intranet homepage under the heading "Service Level Agreements" .

3.17.10.1.8  (01-01-2013)
Related IRMs

  1. The following IRMs are referenced and may be required to research specific instructions or may be used as resources:

    1. Document 12990, Records and Information Management Records Control Schedules

    2. IRM 11.3.1, Introduction to Disclosure

    3. IRM 11.3.3, Disclosure to Designees and Practitioners

    4. IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria

    5. IRM 2.3, IDRS Terminal Responses

    6. IRM 2.4, IDRS Terminal Input.

    7. IRM 20.1, Penalty Handbook

    8. IRM 20.2, Interest Handbook

    9. IRM 21.1.1.7, Communication Skills

    10. IRM 21.10, Quality Assurance

    11. IRM 21.2.2, Research

    12. IRM 21.3.3, Incoming and Outgoing Correspondence/Letters

    13. IRM 21.4, Refund Inquires

    14. IRM 21.4.5, Erroneous Refunds

    15. IRM 21.5, Account Resolution

    16. IRM 21.5.7, Payment Tracers

    17. IRM 3.0.167, Losses and Shortages

    18. IRM 3.12.32, General Unpostables

    19. IRM 3.17.220, Excess Collections File

    20. IRM 3.17.46, Automated Non-Master File

    21. IRM 3.17.63, Redesigned Revenue Accounting Control System

    22. IRM 3.17.64, Accounting Control General Ledger Policies and Procedures

    23. IRM 3.17.79, Accounting Refund Transactions

    24. IRM 3.17.80, Working and Monitoring Category D, Non-Rebate Erroneous Refund Cases in Accounting Operations

    25. IRM 3.30.123, Processing Timeliness: Cycles, Criteria, Critical Dates

    26. IRM 3.8.45, Manual Deposit Process

    27. IRM 5.1.19, Collection Statute Expiration

    28. IRM 5.19.1, Balance Due.

    29. IRM 3.30.50, Project PCA Production Control Accounting

    30. IRM 5.19.9, Automated Levy Programs

    31. IRM 5.19.10, Collection Operations Transcript Processing

    32. Document 6209, IRS Processing Codes and Information

3.17.10.1.9  (01-01-2013)
Criminal Restitution Payments

  1. IRS has a specific office to collect and process all criminal restitution payments in which the IRS is the victim of a crime. These restitution payments should be processed by the Kansas City IRS Center only. See IRM 3.17.243, Miscellaneous Accounting, for further information regarding Criminal Restitution Payments and Department of Justice (DOJ) receipts.

  2. If criminal restitution payments are routed to an IRS office or campus other than Kansas City, per IRM 3.8.45.6.26, Manual Deposit Process, they must be transshipped via overnight traceable method to:
    IRS - RACS
    Attn: Mail Stop 6261, Restitution
    333 W. Pershing Ave
    Kansas City MO 64108

  3. For any questions about the receipt and reconciliation of criminal restitution payments please contact Kansas City Accounting at internal IRS mailbox *W&I CriminalRestitution.

3.17.10.1.10  (01-01-2013)
Form W-7, Application for an Individual Taxpayer Identification Number, Procedures for Processing (For Campuses Other Than Austin)

  1. Form W-7 is an application for an Individual Taxpayer Identification Number (ITIN) for non-citizens. ITINS may not be issued without a return or some proof of a need for an ITIN. That means ITINS will not be issued for two to three weeks from receipt of the request. Remittances received with Form W-7 will be added to the Unidentified Remittance File (URF) at the receiving campus. Form W-7 with all documentation and a photocopy of the check should be routed to the Austin campus per IRM 3.8.45.4.16, Manual Deposit Process.

  2. All Form W-7 packages should have been forwarded from Receipt & Control via Form 3210 to the ITIN Unit at the Austin Campus. If Form W-7 is received with a remittance, add the credit to the URF. Route Form W-7, attachments, and a photocopy of the check received with Form W-7 to the following address:

    IRS-Austin Submission Processing Center (AUSPC)
    3651 South Interregional Hwy 35
    Austin, Texas 78741
    Attn: ITIN Extraction Stop 6052

  3. Remittances received with original Form W-7 packages should remain in the receiving campus's URF inventory until an ITIN is assigned by that campus's Entity function.

    Note:

    Research of the ITIN system may be used to possibly identify the ITIN for payment application. Online Form 5081 must be input to gain access to the ITIN system for research capabilities. The application "ITIN Other RTS Users (ITIN Real-Time System)" must be used during input of the 5081. Employees must have access to the Employee User Portal (EUP) before completing the 5081 for the ITIN system. Employees can register for access to EUP at https://eup.eps.irs.gov/eup_login.

  4. When the ITIN or IRSN information is received from the AUSPC ITIN Unit the remittance should be applied to the taxpayer even if the Account is not established on the MF, except when Form 8288 is received with the Form W-7. Wait to apply the remittance until after Form 8288 has posted to masterfile.

    Note:

    An Unpostable might be caused. The Unpostable units are aware that they may see an increase and have procedures to follow for resolution.

3.17.10.1.11  (01-01-2013)
Processing Time Frames For Dishonored Check File (DCF)

  1. Valid CC BDADD cases must be added to the DCF within one day of receipt of the debit voucher/SF 5515. Checks should be processed from addition to application within 21 days from the date the original debit voucher/SF 5515 was prepared.

  2. Encoding errors, piggy backs, and improper SF 5515 charge backs must be resolved within 45 calendar days of the date the discrepancy was identified.

  3. Single deposit shortages must be resolved within 90 days.

  4. Slipped blocks must have all avenues of research exhausted within 150 calendar days of the date the discrepancy was identified.

3.17.10.2  (01-01-2013)
Dishonored Check File (DCF)

  1. Checks deposited to the credit of the Campus Director, on which payment is refused, are returned directly to the campus by the depositary. The depositary is charged with the preparation of the debit voucher/SF 5515. Debit vouchers/SFs 5515 will also be received for foreign check collection costs, but these will not be accompanied by the checks unless payment is refused by the drawee bank in addition to the collection cost. See IRM 3.17.10.2.13.1 (5) (Other Dishonored Check Processing Actions). All IRS offices will furnish their depositaries with the agency location code of their respective campuses since the campus is the "accountable office" used in the preparation of the debit voucher/SF 5515.

  2. The Dishonored Check File (DCF) is a separate file within IDRS, established to maintain control of dishonored checks. The debit for the dishonored check can be applied via IDRS and the 2287(CG) notice generated. The DCF provides registers and listings for control and balancing. See IRM 3.17.10.2.19 (Dishonored Check Computer-Generated Reports) for description of available DCF computer reports. Revenue Receipts information will be provided on a monthly basis, from the Monthly DCF Analysis. The Balancing Function, Accounting control or designated personnel within the Dishonored Check Function will perform the balancing operations. See IRM 3.17.10.2.6 (Balancing to the Transaction Register) and 2.18 (Dishonored Check Computer-Generated Reports) for balancing within the unit.

    Note:

    When researching and processing dishonored checks, the dishonored checks should never leave the DC Function. If there is a need to take the check's image to a different area, make a photocopy of the check. Secure all checks at the end of the day. This practice will help prevent the loss of a dishonored check. See IRM 3.17.10.2.10. (Researching Dishonored Checks-General Instructions).

    1. The IDRS DCF contains three separate files on disk: the DC Name File, DC Amount File, and the DC Control Number File.

    2. Subsequent activity to the DCF is automatically recorded via the computer and, if appropriate, balance amounts are also adjusted, thus becoming the official DCF.

  3. Campuses may endorse for deposit checks which have been returned for lack of endorsement; and may also request payment of the correct amount when the written amount and the numeric amount do not agree.

3.17.10.2.1  (01-01-2013)
Timely Processing for Dishonored Checks

  1. All dishonored checks should be processed through their release from transcription or through application on IDRS within 21 days from the date on the Dishonored Check Number. This processing cycle starts on the date the original debit voucher/SF 5515 is prepared and continues until the account is closed by an application (CC BDAPL) or a void (CC BDOUT). See IRM 2.4.25, Command Codes BDADDR, BDADD, BDAPLR, BDAPL, BDOUTR, BDOUT, BDENT and BDINQ. Area Office Automated Lien Systems (ALS) Unit, Case Processing, must be notified immediately if certain dishonored checks cause the premature release of federal tax liens. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ IRM 3.17.10.2.13 (10) (Other Dishonored Check Processing Actions.)

  2. Should dishonored checks be frequently received by an incorrect agency, use of the Government On-Line Accounting Link System (GOALS) to IPAC to IRS should be encouraged, along with an immediate FAX of back-up material. The date of the original Debit Voucher must be used for control and aging of these items.

  3. Each record in the DCF will be analyzed DAILY, by the status code and age (Julian Date and year digit), for retention and/or necessary action.

    1. A cumulative aged listing (Control D Report Name "DISHONORED CHK ANALY" ) will be available daily of those OPEN records whose debit voucher date is 15 days old.

    2. The listing will be by employee assignment number, area office, by date, bank, voucher, and serial-number.

    3. This listing will be used to take appropriate follow-up or research action to meet the 21 day cycle and to identify possible erroneous refunds caused by a dishonored check.

      Note:

      Management must ensure erroneous refunds caused by dishonored checks are properly identified and/or stopped.

    4. Use the listing as a source to produce a memorandum to the Director for all checks which have not been applied within the 21 day required cycle. This memo will be generated at the Director's discretion, either based on time or on an inventory level that he or she deems appropriate. The Director may also ask that an early warning system be established before the threshold is reached.

      Exception:

      Missing checks and checks related to out-of-sequence encoding errors will not be expected to meet the 21 day requirement. IRM 3.17.10.2.1.1 (Deposit Discrepancies), IRM 3.17.10.2.8 (Receiving & Researching Form 215, Replacement Certificate of Deposit) and IRM 3.17.10.4.1. (Timeframes for Resolving Deposit Discrepancies). Also excepted are shelved full-paid Forms 1040 received during peak. Peak is defined here as April 15 through the end of Cycle 33, at which time these returns have a Program Completion Date. Unless instructed, these items need not be included in the memo to the Director until the end of Cycle 34. These items are to be monitored on a weekly basis and should be completed as soon as they become eligible.

  4. All items written off to Account 1510, Other Receivables-Regular, at any time, require prior approval from the Campus Director. When a record has aged 367 days from the debit voucher/bank date, the status of the record will automatically be changed to "Unprocessable" . A listing and posting document will be generated to write the amount off to the 1510 Account, and the amount will be removed from the DCF total.

    1. To write off the amount of a check before 367 days, forward the posting documents with the Director's approval to the RACS Unit.

    2. If, however, the Director does not approve the write-off and would like the check to continue to be worked, remove the record from the DCF prior to the 367 days with BDOUTV. Annotate the Restricted Application Register and process the check using manual procedures.

      Note:

      Once CC BDOUTV is input, the systemic dishonored check file (DCF) no longer controls the case. These cases will be subjected to manual internal controls and must be monitored on a regular basis until resolved or approved for write-off.

3.17.10.2.1.1  (01-01-2013)
Deposit Discrepancies

  1. Single deposit shortages will also be debited against the campus via SF 5515. These items will be entered immediately onto the dishonored check file (Account 1710) for control purposes. Perform necessary research to determine the proper application of the debit.

  2. If after 90 days, the debit cannot be resolved, transfer the debit to Account 7650, Deposit Discrepancies.

  3. Case must be documented with all actions taken to resolve the discrepancy. This documentation is needed to request relief of the loss per IRM 3.0.167, Losses and Shortages.

3.17.10.2.1.2  (01-01-2013)
Deposit Discrepancy Case File

  1. The case file documents attempts to resolve the identity of the payment. The case file may include:

    • Copy of the debit voucher.

    • Copy of the deposit ticket.

    • Copy of Form 813.

    • Correspondence to/from depository

    • Correspondence to/from drawee bank.

    • Copy of taxpayer's check (front/back).

    • Transcript of the taxpayer's account.

    • Historical record of attempts to resolve the discrepancy.

3.17.10.2.2  (01-01-2013)
Receiving the Debit Voucher/SF 5515 with Checks

  1. Count checks with each debit voucher/SF 5515. Put total on the back of the debit voucher/SF 5515 and stamp today's date beside the volume.

  2. Balance the checks to the debit voucher/SF 5515 and attach the adding machine tape to the debit voucher/SF 5515 and the checks.

    1. Account 1720 will be used to record any discrepancies between the debit voucher/SF 5515, and the total of the related dishonored checks associated with the debit voucher/SF 5515.

    2. If the debit voucher/SF 5515 is overstated or understated, fill out a Form 2424, Account Adjustment Voucher, to debit or credit Account 1720, Dishonored Checks, Adjustments.

    3. The Dishonored Check File Team is responsible for contacting the bank for an adjustment.

    4. Items in this account will be cleared upon receipt of a supplemental or adjusting DT or DV.

  3. If notification is received that an electronic fund transfer or automated clearing house payment is dishonored, all incoming information should be forwarded to Accounting Control for appropriate action.

  4. Some campuses have a person responsible for contacting the depository banks when there is a discrepancy between IRS and the depository bank. This person may also work with missing checks and other related problems that require contact with banks.

  5. Remittances (usually money orders) which are received without debit vouchers/SFs 5515 should be flagged for "special attention" to avoid applying the same credit twice.

  6. When an IRS campus' agency location code (ALC) is erroneously debited, the total debit should be added to the DCF rather than the individual returned items, pending return of the deposit ticket described below. A letter should immediately be sent to the initiating bank incorporating:

    1. The date the bank's action was taken;

    2. The amount;

    3. The correct and incorrect ALCs.

    4. Copies of the original debit voucher.

    5. The returned remittance(s), and

    6. An SF 215A deposit ticket with a blank date.

3.17.10.2.2.1  (01-01-2013)
Check 21

  1. The Check Clearing for the 21st Century Act was signed into law in October 2003, and became effective October 21, 2004. This act is also known as Check 21. All checks, including cashier's checks, payroll checks, personal checks and business checks are subject to Check 21.

  2. Check 21 involves creating digital images of original checks. They are still processed under the same laws and regulations as paper checks. This reproduction from the digital image of the original check is called a "substitute check" .

  3. Check 21 legislation sets standards for quality and allows for a substitute check to be a legal copy of the original check. A bank that creates a substitute check must warrant that it is accurate. A substitute check should have all endorsements and is about the size of a business check.

  4. A substitute check shall be the legal equivalent of the original check for all purposes if the substitute check:

    1. Accurately represents all of the information on the front and back of the original check as of the time the original check was truncated; and,

    2. Bears the legend: "This is a legal copy of your check. You can use it the same way you would use the original check" .

  5. If a substitute check is received make sure it contains the image of the front and back of the original check, as stated in (4) above, and it bears the MICR (Magnetic Ink Character Recognition) line containing all the information appearing on the MICR line of an original check.

  6. Substitute checks should not be sent for redeposit unless they meet the requirements in IRM 3.17.10, Redepositing Returnable Checks. If a substitute check is returned for any other reason, it should be treated as a dishonored check and subject to the dishonored check penalty.

3.17.10.2.2.2  (01-01-2013)
Electronic Check Processing (ECP)

  1. Lockbox processing sites implemented Electronic Check Processing (ECP) in July, 2011. The Lockbox sites will send electronic check images and corresponding data through the ECP system to the Federal Reserve Bank of Cleveland.

  2. The Federal Reserve Bank of Cleveland is now the bank of first deposit for all Lockbox payments. FRB-C will handle the Cashlink deposit, return and adjustment reporting. The ECP system is managed by Citibank and housed on a secure internet web which will provide direct user access to tax payment information processed by the Lockbox Network.

  3. 215 deposit tickets and 5515 debit vouchers will be downloaded daily from ECP to be journaled into RRACS.

  4. Credit adjustments will be shown at the bottom of the daily 215 Deposit Ticket Report. Debit adjustments will be shown in the 5515 Debit Voucher Report.

    Note:

    Some ECP items that are adjusted after the daily deposit will be received on a Manual Debit/Credit Voucher Report. The report will be received via e-mail from Citibank, FMS_MCA. The voucher is not viewable on ECP, but the item will show as FA Adjusted in the Payment Query screen of ECP.

  5. Dishonored Checks will be downloaded and printed daily from ECP 5515 Check Image Report.

    Note:

    ECP check copies do not contain the Check 21 statement "This is a Legal Copy of your check. You can use it the same way you would use the regular check" . Because ECP checks are processed through the Debit Gateway, the format meets the Check 21 legal requirements. They are considered legal copies, but cannot be redeposited. If the check was dishonored for reasons codes I, J, K or L, open a ticket with Citibank Customer Service requesting that FRB-C represent the check. For all other reason codes a replacement check must be requested from the taxpayer.

  6. Occasionally, FRB-C will reject an item from the daily deposit. When this happens, FRB-C will send an email to the Lockbox and SPC. The item will be viewable on ECP and the Remittance Transaction Research (RTR) system the day before it posts to masterfile. Query ECP in the Payment Query menu for 'Failed Items' for using the date of the deposit ticket. Contact the Data Control function to determine if the item needs to be deleted from the Tape Edit Processor (TEP) per IRM 3.17.30.10.6.

    Note:

    Occasionally a duplicate item will be knowingly processed by ECP. Monitor the taxpayer's account to ensure an erroneous refund is not issued before the debit is received from FRBC.

  7. The ECP website address is https://www.treaslockbox.gov/. A list of Campus ECP Security Administrators is available on the SERP Who/Where website at http://mb01001.mcc.irs.gov:10001/databases/who-where.dr/dishonored_check/ecp_security_adm.htm.

  8. The Citibank Customer Service telephone number is 866-855-5735, and their hours of operation are 6:00 a.m. EST to 7:00 p.m. EST. On-call support will be provided off-hours.

3.17.10.2.3  (07-26-2013)
Coding and Editing the Checks

  1. Write a code for the reason the check was dishonored in upper left front of check. The following is a list of reason codes to use when determining reason codes; do not rely upon it when determining whether a penalty should be applied: ( See IRM 3.17.10.2.18.2 (Assessing a Dishonored Check Penalty) for information on penalizing.)

    Reason Code Definition
    01 Insufficient Funds
    02 Stop Payment
    03 Refer to Maker or Refer to Item
    04 Account Closed or Account Stopped
    05 No Account in Existence
    06 Lien on Account
    07 Signature Missing
    08 Multiple Signatures Needed—at least one, but not all, present
    09 Signature Not Same as Bank Record
    10 Uncollected Funds
    11 Written/Numeric Amount Mismatch
    12 Date Missing
    13 Date Altered
    14 Postdated
    15 Stale Date
    16 Foreign Check
    17 Endorsement Not as Drawn
    18 Guarantee of Amount
    19 Cannot Handle as Cash
    20 Not MICRO-Coded
    21 Maker Deceased
    22 Invalid Power of Attorney
    23 Other (For example, bankruptcy or the reason for the dishonored check must be entered.)
    24 Mutilated Check
    25 Exceeds Cash Advance Limit
    26 Under Minimum Withdrawal Amount

  2. Underline Name Control. Determine name control as directed in Document 7071, Name Control Job Aid. If no name is available, put "UNKN" .

  3. As a general rule, ECP uses alphas as their returned reason codes. The below codes will need to be converted to IRS reason codes for input to the DCF. If you see a returned reason code that is not in the below list, check the Return Reason Code drop down menu in the Payment Query screen in ECP and convert it to the appropriate IRS Return Reason Code.

    Note:

    If the returned reason code is "ADJ" a manual voucher will also be received from Citibank, FMS MCA. Associate the manual voucher with the 5515 debit voucher received on ECP. Do not apply a second debit to the taxpayer's account.

    ECP Reason Code Definition IRS Reason Code
    A Insufficient Funds 01
    ADJ Federal Reserve Bank Adjusted 23
    B Uncollected Funds Hold 10
    C Stop Payment 02
    D Closed Account 04
    E Unable to Locate Account 05 or 23
    F Frozen/Blocked Account 04 or 23
    G Stale Dated 15
    H Post Dated 14
    I Endorsement Missing 17 or 23
    J Endorsement Irregular 17
    K Signature(s) Missing 07
    L Signature(s) Irregular 09
    M Non Cash Item 19
    N Altered/Fictitious Item 09, 13 or 23
    O Unable to Process 23
    P Item Exceeded Dollar Limit 18 or 25
    Q Not Authorized 07, 08, 09, 17 or 23
    R Branch/Account Sold 23
    S Refer to Maker 03
    T Stop Payment Suspect 02 or 23
    U Unusable Image 20, 23 or 24
    V Image Fails Security Check 23
    W Cannot Determine Account 05
    Y Duplicate Presentment 23
    Z An Affidavit Should Be Available Upon Request 22 or 23

3.17.10.2.3.1  (01-01-2013)
Creating the Dishonored Check Number (DCN)

  1. Assign each check a Dishonored Check Number (DCN). The DCN is created from information on the debit voucher/SF 5515. See Figure 3.17.10-1a. and 1b.

    Figure 3.17.10-1a

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

    Incoming SF 5515 with DCN Formation

    Figure 3.17.10-1b

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

    OTCnet Debit Voucher

  2. DCN Element Description:

    1. AREA: The SPC location determines the area number. Refer to Document 6209, IRS Processing Codes and Information, for list of area file location codes.

      Note:

      If your campus is serviced by the same parent bank at different locations you may use different file location codes within your SPC codes to differentiate between them.

    2. BANK DATE: Convert the Voucher Created Date to a Julian Date. For example, if the bank date is February 4, 2011, the Julian Date is "035" . The bank date must be 001 -366 and cannot be greater than the current date.

    3. BANK NUMBER: Each depositary bank has a ABA (American Bankers Association), or routing number.

      Note:

      Debits from ECP are sent through the Federal Reserve Bank of Cleveland. It is acceptable to use the FRB's routing number.

    4. VOUCHER NUMBER: The last three digits in the voucher number box form the voucher number.

    5. CHECK NUMBER: The checks in a batch will be numbered "000" through "099" .

    6. YEAR DIGIT: Always use the last digit of the current fiscal year.

  3. As you number the checks, list the DCNs in the Dishonored Check Log and the Bank Discrepancy Application. IRM 3.17.10.4.2.1. (The Bank Discrepancy Application).

3.17.10.2.3.2  (01-01-2013)
Trace ID Number

  1. As of January 1, 2008, all credits/payments were assigned a Trace ID Number for tracking purposes. The Custodial Detail Data Base (CDDB) was established with the EFTPS payments January 1, 2006. CDDB tracks all individual payments that comprise a Deposit Ticket, balancing the individual transactions against the Deposit Ticket totals, which have been entered in the RRACS General Ledger. The Trace ID Number allows all credits/payments to be identified and added to the CDDB.

  2. All Debit Vouchers (Dishonored Checks/Returned Items) should be assigned a new Trace ID Number when received from the Bank. Either the Dishonored Check Function or the RRACS function should generate the Trace ID Number on Batch Block Tracking System (BBTS) depending on the flow of work at each site. The Trace ID Number must be generated from BBTS with System ID 20. The format for this Trace ID Number is:

    Trace ID for Debit Voucher (first 14 characters)
    Parts Characters Definition
    Site ID NN SP Campus FLC or other Site ID
    System ID NN The values are identified as follows:
    01 - EFTPS
    02 - ISRP Payment Transactions
    05 - Lockbox Bank Transactions
    10 - SITLP Levy Payments
    15 - Receipt & Control Manual Deposits
    20 - RRACS DCF Debit Voucher (DV)
    25 - Accounting Deposit Ticket and DV
    30 - FTD Deposit Ticket/Debit Voucher
    35 - IDRS IA User Fee Sweep
    40 - Automated Insolvency Manual DT
    45 - Automated Offer in Compromise Manual DT
    50 - ITIN
    55 - Field Assistance (Share) Function, Taxpayer Assistance Center
    Deposit Date YYYYDDD Julian Date
    Seq Number NNN For each Deposit Date, begin with 001 and increment each additional Deposit by 1.
    Last field for Trace ID Number (6 characters)
    Transaction Seq Number NNNNNN Or zero For each payment summarized in a Debit Voucher, beginning with 000001, sequentially increment the Transaction Seq Number.

    The Trace ID Number assigned from BBTS plus the Transaction Sequence Number will result in a 20 digit Trace ID Number for each dishonored check (example: 00–20–2008023–002–000003 for the third dishonored check in the second debit voucher produced on January 23, 2008). This number will be STAMPED on the lower left front side of the dishonored check/copy of returned item and input to CC BDADD.

    Note:

    All dishonored check items (checks or copies of the checks) that are received with a specific debit voucher must be STAMPED with the same Trace ID Number before being distributed to a technician for input. The first 14 digits of the Trace Id Number should remain the same for all items associated with the Debit Voucher when adding the items to the DCF with CC BDADD.

    Example:

    A Dishonored Check Debit Voucher is received with 20 items attached. The Debit Voucher will be numbered with the 14 digit Trace ID Number. Each of the 20 items associated with the Debit Voucher will be stamped with the SAME 14 digit Trace ID Number plus the additional 6 digit Transaction Seq Number, beginning with 000001 and ending with 000020.

3.17.10.2.4  (01-01-2013)
Entering and Balancing Checks on IDRS

  1. Enter checks on IDRS using CC BDADD (generated by CC BDADDR). See Exhibit 3.17.10-3 As you add the dishonored check on IDRS, you are establishing the check on the DC file. The BDADD format has a running total. This total must balance to the debit voucher/SF 5515. If the total does not balance, look at each check entered by using CC BDINQ. When you find your error, correct the erroneous BDADD by using CC BDOUTZ. See Exhibit 3.17.10-4. It is suggested the Dishonored Checks be input on IDRS in groups of 25. If an error is made, it will be easier to find it in a group of 25 than in a larger group.

    Note:

    If the SF5515 Debit Voucher Date of Deposit and Created Date are different, use the Created Date when entering the check on the DCF.

3.17.10.2.5  (01-01-2013)
Creating a Dishonored Check Worksheet, Form 8252

  1. Create a worksheet using Form 8252, Dishonored Check Worksheet, for each non-ISRP check which cannot be easily applied through IDRS research. If the check is coded in the upper-left hand corner with Multiple/Split Remittance Indicator "S," indicating a split payment, make several copies of the check so each separate application of the check will have its own worksheet.

  2. At campus option, worksheets do not have to be prepared for ISRP encoded checks unless a conflict exists between IDRS research and information on the dishonored check. However, any dishonored check for which a worksheet is not made must have the taxpayer's full name and address input when the item is established on the DC file.

    Exception:

    If it is verified that the name and/or address on the check is identical to the information on IDRS then the Name Control only can be input in the First Name Line.

  3. Action taken on cases for which worksheets have been prepared will be appropriately recorded on the Forms 8252. Few cases will require research in all areas listed on Form 8252.

    Note:

    A pdf fillable Form 8252 is located on the Publishing web site at http://core.publish.no.irs.gov/forms/internal/pdf/61909d11.pdf.

3.17.10.2.6  (01-01-2014)
Balancing to the Transaction Register

  1. Add money totals from all debit vouchers/SFs 5515 input through IDRS with CC BDADD from the previous work day. Balance to DCF 0340, 1710 Account Transaction Register (Dishonored Checks Added to DCF) daily.

  2. Add volume totals (number of checks) from all debit vouchers/SFs 5515 input through IDRS with CC BDADD the previous work day. Balance to DCF 0340.

  3. Subtract corrected money amounts (BDOUT "Z" s) from total on transaction register.

  4. Annotate on the DCF 0341, 1710 Account Transaction Register (Restricted Application From the DCF) any item which has been removed from the DC file using CC BDOUT.

  5. Send all debit vouchers/SFs 5515, transaction registers and analysis to the RRACS function. Attach a Form 2424, Account Adjustment Voucher, for each discrepancy and a Form 4830, IDRS Posting Document, for each NMF application.

  6. File a copy of the debit voucher/SF 5515 in the Accounting Control area by accounting station symbol and date for month-end reporting, and retain another copy of the debit voucher/SF 5515 in the permanent closed file.

  7. IDRS DCF will be received from the Accounting Control clerk daily.

    1. The Balancing Function in Accounting Control will balance the daily and monthly DCF Analysis using the various transaction registers, vouchers and schedule of payments, the IDRS PJ Recap (for DCF) and the controls produced from the DCF Processing.

    2. Monthly Dishonored Check File Analysis (DCF5040)-reports the prior balance, total items and amounts added this month, and items and amounts applied from the DCF. The report also contains a breakout reflecting current year revenue receipts. Forward the Monthly Dishonored Check File and Analysis to the RRACS function after it has been balanced by the Dishonored Check function.

  8. The DC records with a "closed" status for 3 months will be aged out of the DCF monthly Dishonored Check Records Dropped From the File (DCF54). This listing contains two parts. Part one (DCF 5403) contains complete documentation of each record dropped from the DCF in alpha sequence within area order. Part two (DCF 5404) is an abbreviated record of Part one. It is in DC control number sequence and contains DC control number, DC name control, original amount, IRS Received Date, Entry Date. These listings now become the permanent record of the DCF Dropped File. The DCF54 is viewable on Control D.

3.17.10.2.7  (01-01-2013)
Redepositing Returnable Checks

  1. The following are examples of checks that can be returned to the bank:

    • Check with missing IRS endorsement;

    • Uncollected funds (only if the check has not already been redeposited);

    • Shares not held 15 days;

    • Payee not endorsed;

    • Payee missing;

    • Guarantee of amount;

    • Post-dated check.

  2. If the payee is missing, stamp "United States Treasury" in the appropriate line. Complete Form 8250, Request to Redeposit Checks. Make two photocopies of the front and back of check. Make two photocopies of debit voucher/SF 5515. Keep one copy of each and file in a deposit ticket file. Forward check and remaining copies to Receipt and Control to be redeposited. Figure 3.17.10-2.

  3. If the check is returned because a signature is not present on the receipt or voucher that is attached to a check that has been previously endorsed by IRS, the designated space on the front of the receipt must be signed. A local decision will be made as to who will sign the receipt/voucher. Prepare Form 8250 to redeposit the check and proceed as outlined in (2) above.

    Figure 3.17.10-2

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

    Request to Redeposit Checks

  4. Redeposited checks are sent to the campus' bank even though they may have originally been deposited elsewhere.

  5. A copy of the Form 8250, a copy of the redeposited checks and the white copy of SF 5515 are returned to the DC Unit from Receipt and Control when checks are redeposited. When you receive this notification, use CC BDOUT plus code "R" to void these DCs from the Dishonored Check File. Exhibit 3.17.10-4

3.17.10.2.8  (01-01-2013)
Receiving & Researching Form 215, Replacement Certificate of Deposit (Credit Voucher)

  1. When a debit voucher/SF 5515 is overstated, contact the depositary bank. The bank will forward a Form 215 (credit voucher) to DC function which then forwards it to the RRACS function.

  2. When an error is found by the bank, the bank will forward a Form 215 with a copy of the check and a copy of Form 813, Document Register. For example, if a check was written for $2,000.00 and was encoded for $200.00, the Form 215 will indicate a credit for $1,800.00.

  3. When this type of Form 215 is received, research the account to determine if the taxpayer received the correct amount or if the credit is needed. Forward the credit to the RRACS function for input to Account 4620 (Unidentified Remittances) if the original IRS-received date is less than one year or to Account 6800 if the original IRS-received date is one year or more. If the proper application can be determined, apply the credit to the taxpayer's account using CC FMAPL if in URF or CC XSAPLR if in XSF.

    Note:

    When adding the credit to the URF, use "BKCR" or "BANK" as the Name Control to indicate a Bank Adjustment. Use Source Code P1 or P2 to track the adjustment.

  4. In some instances your case work may require DLN assignment. Number Form 3244 using the following series of numbers and date of the Form 215.

    Return Type Tax Class/Doc Code Block
    1040–ES (current year) 220 785-789
    WFP 117 895-899
    IMF, 1040-ES 217 895-899
    Corp 317 895-899
    Excise 417 895-899
    Estate, 1041-ES 217 (BMF) 545-549
    Gift 517 595-599
    CT 717 895-899
    FUTA 817 895-899


    Note: Use TC 670.
    Exception: For Form 1040-ES, TC/DC 220 use TC 430.

3.17.10.2.9  (01-01-2013)
Processing Payments on Offers in Compromise (OIC)

  1. Examine each check to identify payments on offers in compromise. These checks may be processed as BMF, IMF or NMF payments.

    1. OIC payments processed through BMF or IMF will be identified with DPC 09, Offer In Compromise. Do not assess a bad check penalty on credits displayed with DPC 09, 33, 34 or 35.

      Note:

      Correspondence received to abate the dishonored check penalty will be forwarded to Accounting Operations.

    2. The application fee payment processed through the Paper Check Conversion System (PCC) will originally be applied to Account 4710, Offers In Compromise. Under the Tax Increase Prevention and Reconciliation Act of 2006 (TIPRA), enacted on July 17, 2006, the $150 Application Fee for OICs will be applied as a payment to reduce the taxpayer's tax liability as well as serve as a user fee payment. Form 2424 will be prepared to move the payment from Account 4710 to the Master File with TC 670.

      Note:

      TIPRA COIC payments can be identified by the presence of a TC 480 in the tax module and the DPC 09. TIPRA MOIC payments can be identified by the presence of a TC 780 in the tax module.

  2. OIC Payments applied to the Master File should be processed accordingly:

    1. If a check is dishonored after the payment has been applied from Account 4710 to the Master File, or if a subsequent installment payment becomes dishonored, the payment should be reversed with a TC 671. There may be a time delay on cases where the Form 2424 has been prepared to move the payment from Account 4710 to the Master File. The Form 2424 may be in the pipeline at the time the payment is dishonored. The dishonored check process will be suspended until the payment has posted.

      Note:

      If the TC 670 is pending, establish an IDRS control base with a history item of the dishonored payment pending.

    2. Debit the taxpayer's account without assessing the penalty.

    3. Send a copy of the dishonored check and Form 12993-A to COIC/MOIC for monitoring of the replacement payment. The location of the taxpayer's address determines whether the check should go to Brookhaven or Memphis.

      If Then
      there is a TC 480 on the account forward to MOIC -see http://serp.enterprise.irs.gov/databases/who-where.dr/coic_backend.htm
      there is a TC 780 on the account forward to COIC-see http://serp.enterprise.irs.gov/databases/who-where.dr/coic_standup.htm

      Note:

      See the OIC webpages referenced above on SERP Who/What/Where for a listing of where to send the COIC/MOIC dishonored check.

    4. Return the check to the taxpayer with Form 12993-A.

  3. NMF payments have:

    1. Tax class 6 as the third digit of the DLN.

    2. Document code 56 as the fourth and fifth digits of the DLN.

    3. Blocking series 200–249 (ninth, tenth and eleventh digits of the DLN).

  4. NMF Payments identified as made on offers in compromise:

    1. Must be voided from the DCF using CC BDOUTV.

    2. Must be photocopied front and back and the copy hand carried to the RACS Unit for appropriate action on Account 4710 (Offers in Compromise).

    3. The check may be hand carried or faxed to Campus Compliance as local procedures dictate.

    4. COIC function will send a letter to the taxpayer informing them of the returned check.

    5. The Dishonored Check function may return the check to the taxpayer with Form 12993-A.

3.17.10.2.9.1  (01-01-2013)
Processing Payments on Offers In Compromise (OIC) Application Fees

  1. Taxpayers submitting OICs postmarked November 1, 2003, and thereafter, will attach a waiver or a $150.00 application fee with their offer application. Under TIPRA, the $150 Application Fee will be applied as a payment to reduce the taxpayer's tax liability as well as serve as a user fee payment. The application fee will not post to master file or to the taxpayer's account unless a Form 2424 is prepared to move the payment from Account 4710 to the Master File with TC 670.

    Note:

    TIPRA also requires taxpayers submitting requests for lump sum OICs to include a payment equal to 20% of the offer amount. Taxpayers requesting a periodic payment offer in compromise must include the first proposed installment payment.


    Note:

    TIPRA COIC payments can be identified by the presence of a TC 480 in the tax module and the DPC 09.

    1. The taxpayer may send a single check for the OIC application fee and TIPRA payment or a check for the combination of the OIC application fee, TIPRA payment and other tax payments. The portion of the check representing other tax payments will be sent through normal pipeline processing and will be posted to master file and the taxpayer's account.

    2. For checks processed through the Paper Check Conversion System (PCC), IRM 3.17.10.2.9.2. (Payments Processed Through the Paper Check Conversion System).

  2. Examine each check to identify application fee payments on offers in compromise.

    1. Such payments will be identified by a unique offer number hand written on the face of the check. The offer number will be written in the upper left hand corner of the check.

    2. The back of the check should also have the Accounting symbols 20X5432.4.

  3. Payments identified as OIC application fees must be voided from the DCF using CC BDOUTV. Photocopy the front and back of the check.

    1. Hand carry a copy to the RRACS function for appropriate action on Account 4710, Offers In Compromise.

    2. Fax or mail a copy to the Centralized Offers In Compromise function (COIC) at the Brookhaven or Memphis campus. OIC will notify the taxpayer of the closed OIC.

  4. Return the check to the taxpayer with Form 12993-A.

    Note:

    A pdf fillable Form 12993-A is located on the Publishing web site at http://publish.no.irs.gov/forms/public/pdf/37524h10.pdf .

    Note:

    If a payment is received with Form 12993-A and there is correspondence attached requesting an abatement of the dishonored check penalty, a copy of the Form 12993-A and the correspondence will be forwarded to Accounting Operations.

3.17.10.2.9.2  (01-01-2014)
Payments Processed Through The Paper Check Conversion System (PCC) and Remittance Strategy for Paper Check Conversion (RS-PCC)

  1. As of April 1, 2005, IRS began using a new technology to process COIC checks. This technology is known as Paper Check Conversion System (PCC). The PCC system scans checks and automates the receipt, acceptance, transferring and recording of funds. PCC is a process for converting checks into electronic fund transfers. The paper check will no longer be sent to the bank.

  2. COIC payments are processed through Campus Support in Brookhaven and Memphis. As of October 2008, IRS began processing COIC using Remittance Strategy for Paper Check Conversion (RS-PCC). RS-PCC process single payments. Single payments are one check for the offer and one check for the OIC fee. RS-PCC uses Electronic Federal Tax Payment System (EFTPS) to electronically post to master file.

    Note:

    Ogden Only - As of July 1, 2007, IRS also began using this same technology to process Centralized Insolvency Operation (CIO) checks. As of January 2008, CIO began processing single payments using RS-PCC.

    1. When a complete, signed check is presented, the information from the check is scanned into the PCC computer and used to generate an electronic transfer of funds from the taxpayer's account. The electronic funds transfer will usually occur within 24 hours.

    2. The captured data is uploaded into the Financial Management Service Electronic Verification (ELVIS), where the payments will be applied against the taxpayer's accounts or to the General Ledger Accounting String. At the end of the day, the information will be transmitted to the Treasury-Financial Management Service (FMS) or a specified Financial Agent.

    3. A deposit or deposit ticket (SF 215) is automatically created and a computerized confirmation is provided if any check is drawn on insufficient funds, closed accounts, or any type reason that makes it dishonored.

    4. If the Treasury-Financial Management Service (FMS) can not collect the funds upon initial presentment, it may try to collect them through re-presentment up to two additional times. If the Treasury-Financial Management Service (FMS) can't collect the funds, it debits the agency's account in CA$H-LINK and emails a debit voucher/SF 5515 to the designated agency official.

  3. The PCC payment will go into the appropriate General Ledger Account. The RRACS function will receive notification by email of a returned item.

    1. The RRACS function will forward this email to the specified COIC or CIO contact person.

      Note:

      For Brookhaven, the COIC contact person is Carol Todd.

      Note:

      For Memphis, the COIC contact persons are Catrina Dugger and Karen Shields.

      Note:

      For Philadelphia, the CIO contact person is Samantha Ricca.

    2. A print of the Detailed Report and the debit voucher will be sent to the DCF Unit for processing. There should only be one check assigned to a debit voucher number.

      Reminder:

      There will not be a paper check associated with the listing received.

      Note:

      The check may be a split remit. IRM 3.17.10.2.9.1. (1) a (Processing Payments on Offers in Compromise (OIC) Application Fees) for instructions on split remits.

    3. The PCC payment must be voided from the DCF using CC BDOUTV. Hand-carry a copy of the debit voucher to the RACS Unit.

    4. For COIC payments, prepare Form 12993-A to inform the taxpayer that the bank did not honor the check sent for the application fee. COIC will inform the taxpayer of the closed offer.

    5. For CIO payments, prepare Form 3699, Return of Documents to Taxpayer, to inform the trustee that the bank did not honor the check sent. Communications with CIO regarding dishonored checks is vital. Contact information is as follows:

      CIO Payment Team
      Voice (267) 941-5181
      Fax (855) 383-9728

3.17.10.2.9.3  (07-26-2013)
Paper Check Conversion Standard Operating Procedures (SOP) — Cincinnati Submission Processing Campus Accounting Operations Only

  1. The following procedures are for the Accounting Operations functional area for processing a deposit ticket or debit voucher via ELVIS (Electronic Verification and Image Services), Treasury-Financial Management Service (FMS). These procedures are for OIC payments processed through PCC.

  2. On a daily basis the Brookhaven and Memphis Campus Perfection/OIC Team will fax a copy of the PCC Deposit Breakdown Sheet and Forms 13479 for the current day deposit for PCC/OIC to the RACS function at the Cincinnati Campus.

    1. They will send via overnight mail delivery the PCC/OIC package which will include the batch listings, Form 13479 (COIC Application Fee Tracking Report) and the original Forms 2515 (Record of Offer in Compromise).

    2. The address for the package is:

      Internal Revenue Service

      Stop 21 RRACS Team 101

      201 West Rivercenter Blvd.

      Covington, Kentucky 41011

  3. RRACS, on a daily basis, will access the ELVIS system and retrieve all electronic deposit tickets associated with the Offer in Compromise payments from the Brookhaven and Memphis Campuses.

    1. The RACS Accounting Technician will print a copy of the Deposit Ticket and Download the Deposit Ticket Report to a file.

    2. The technician will balance the PCC/OIC package to the Deposit Ticket and journal to RACS.

  4. The Dishonored Check (DC) Accounting Technician, on a daily basis, will retrieve all electronic debit vouchers associated with Offer in Compromise and download the Debit Voucher to a file and print the Debit Voucher.

    1. Using the Central Image and Research Archive (CIRA) feature on ELVIS the DC Accounting Technician will query the 21 digit Unique Transaction ID from the Debit Voucher to retrieve a copy of the dishonored check.

    2. The DC Accounting Technician will fax a copy of the debit voucher, the detail report, and a copy of the dishonored check to COIC in BSC and/or MSC and send the Debit Voucher to RRACS for journalization.

    3. Prepare Form 12993-A to notify the taxpayer of the dishonored check.

  5. The contacts are as follows:

    • PCC HQ Analyst, Valerie Jones, (202) 283-4167.

    • The Treasury OTC Support Center, (866) 945-7920.

    • BSC, Carol Todd, (631) 687-3951

    • MSC, Sonya Gilliam, Voice (901) 395-0310; Fax (901) 395-0515.

    • MSC, Catrina Dugger, Voice (901) 395-1480; Fax (901) 546-3797.

    • MSC, Karen Shields, Voice (901)395–0231

3.17.10.2.10  (01-01-2013)
Researching Dishonored Checks-General Instructions

  1. When researching and processing dishonored checks, the dishonored checks should never leave the DC function. If a photocopy is not made on the worksheet, make a photocopy of the check if there is a need to take the check's image to a different area. Secure all checks at the end of the day. This practice will help prevent the loss of a dishonored check.

  2. Transfer the DLN from the DC to the DC worksheet Figure 3.17.10-3.

    Figure 3.17.10-3

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

    Transferring DLN to DC Worksheet

  3. The DLN will be one of the following:

    1. Manual Encoding DLN—located on back of check. Figure 3.17.10-4.

      Figure 3.17.10-4

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

      Finding Manual Encoding DLN

      Note:

      Using the deposit information on the back of the check and data on Form 4221, Remittance Control Number Record, the block number for this document can be reconstructed. The block in which this document is located is 253.

    2. IDRS processed DLN-—13-digit remittance sequence number stamped on face of check. Figure 3.17.10-5.

      Figure 3.17.10-5

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

      IDRS-Processes DLN

    3. Stamped "split" number. See Figure 3.17.10-6. It can be IMF, BMF or NMF.

      Figure 3.17.10-6

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

      Stamped "Split" DLN

    4. In Figure 3.17.10-6 above, on the check, position 1 is the Area Number, position 2 is the Julian Date, and position 3 is the Sequence Number.

    5. Area Office Remittance Number. See Figure 3.17.10-7

      Figure 3.17.10-7

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

      DLN and Area Office Remittance Number

    6. Compare the numbers on the check to the numbers in the box to see how this number is divided.

    7. Match the number on the check to the number in the Area Office Remittance Register. Copy the information from the Area Office Remittance Register onto the DC worksheet. See Figure 3.17.10-8

      Figure 3.17.10-8

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

      Area Office Remittance Register

    8. DLN of remittance processed by Integrated Submission and Remittance Processing (ISRP) - located across middle of back of remittance. See Figure 3.17.10-9

3.17.10.2.11  (01-01-2013)
Researching Dishonored Checks for Payment of IRS Tax Liability

  1. The sequence that should be used when researching Dishonored Checks for payment of IRS tax liabilities is outlined in 3.17.10.2.11(2) (Researching Dishonored Checks for Payment of IRS Tax Liability) through 3.17.10.2.11.1.1.2 (Research Other Areas) below.

  2. Examine the audit trail on the reverse of all Integrated Submission and Remittance Processing (ISRP) and Lockbox checks. Complete information to reverse a payment is printed on each check processed via ISRP. Figure 3.17.10-9.

    Figure 3.17.10-9

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

    ISRP Audit Trail and Endorsement

    Item # Description
    1 RPSID Number
    2 Sequence Number
    3 Name Control
    4 DLN
    5 Transaction Code
    6 MFT
    7 TIN
    8 Deposit Date
    9 Tax Period
    10 Multiple/Split Indicator
    M = Multiple
    S = Split
    11 Transaction Date

3.17.10.2.11.1  (01-01-2013)
Command Codes to Research

  1. Research as many checks as possible on IDRS using all available pertinent CCs. IDRS is the place to begin your research.

    Note:

    Refer to IRMs 2.3 (IDRS Terminal Responses) and 2.4 (IDRS Terminal Input) for specific instructions in using these CCs.

    1. NAMES to research a nationwide database (Name Search Facility (NSF) at ECC-MTB) of taxpayers' SSNs or NAMEE to research a nationwide database of EINs. NAMEI (IMF) and NAMEB access the NSF of names and addresses to locate an SSN or an EIN. NAMES and NAMEI search for both the primary and secondary filer names. The hardcopy options are NAMEIX and NAMEBX.

    2. FINDE to research the NSF for the business' name and address information, using the EIN and FINDS to research for the taxpayer's name and address information, using the SSN.

    3. AMDIS to list all records that are on AIMS under the TIN.

    4. INTST to compute the correct outstanding balance, including interest and failure to pay accruals, to the date specified in the CC.

    5. COMPA to compute interest or estimated tax penalty for a specific amount for a specific period of time.

    6. COMPAF to compute failure to pay penalty.

    7. COMPAD displays the detail used to compute the interest.

    8. EFTPS to research all electronic payments made via EFTPS for the current and/or previous four years. Payment data will be available the day following the settlement date.

    9. TDINQ requests display of entity and module data, if present, on the TIF account which is pertinent to delinquent return investigations.

    10. STAUP is used to update the status of a module and may be used to accelerate, delay or skip routine notice issuance.

    11. ACTON to establish case control and history of cases.

    12. LEVYS to research levy source information on the TIF.

    13. IADIS to display active or defaulted installment agreements.

    14. SCFTR to research Campus Control File and overnight research of records that have been moved to the historical SCCF.

    15. CFINK to research the Centralized Authorization File.

    16. INOLE to research the National Account Profile (NAP). This CC is particularly helpful in locating information for all Master File accounts.

    17. IRPTR (with definer L) to provide two payee addresses, if present; filing status; one payer name and address; cross reference information; and a summary of up to 36 IRP money amounts by income type.

    18. IMFOL/BMFOL and RTVUE/BRTVU to do on-line research of master file account and return data.

    19. DMFOL to research individual obligations to agencies other than IRS.

    20. PMFOL to research Form 1096s filed.

    21. HCFOL (Help) and ICFOL (Information) to help utilize the CFOL CCs.

    22. TXMOD to research specific tax modules which contain pending and posted transactions and to determine the status of an account.

    23. SUMRY to review pending transactions and currently active tax modules under a specific TIN.

3.17.10.2.11.1.1  (01-01-2013)
Research NMF

  1. Research the NMF data base using procedures outlined in IRM 3.17.46, Automated Non-Master File Accounting, or request Non-Master File research on Form 4338, Information or Certified Transcript Request. ( Figure 3.17.10-37)

3.17.10.2.11.1.1.1  (01-01-2013)
Research the Area Office Remittance Register

  1. Research the Area Office Remittance Register (AORR) or IDRS for information needed and a complete DLN for the area office checks. Match the area office number on the front of the check to the AORR to find information. Figure 3.17.10-8 Copy information from the AORR onto the DC worksheet. The Julian Date is inflated by 400, i.e., if the Julian Date is 123, the DLN will show 523. Research for name and address on IDRS using CC INOLE or ENMOD. You may need to get the return for clarification and/or verification of information.

3.17.10.2.11.1.1.2  (01-01-2013)
Research Other Areas

  1. Research by Telephone-Telephone taxpayer if you need to verify information or get additional information. Before phoning the taxpayer, always discuss the case with the lead. Be very careful not to make an unauthorized disclosure. Refer to IRM 11.3.1, Introduction to Disclosure and IRM 11.3.3, Disclosure to Designees and Practitioners for additional information.

  2. Research with the Return-If the return information cannot be found by regular research methods, you may wish to request the tax return from Files; use IDRS CCs RTVUE/BRTVUE or ESTAB.

    Note:

    If SCCF shows the document was worked in ERS or Rejects, contact the Payment Tracer function to access the DLN with the Payment Tracer Tool.

  3. Research a "Cash Conversion" (CC)—A cash conversion is a check with a return or payment voucher taken in at an area office. This check will not have a DLN or any encoding for a DLN. There may be a stamped received date on the back of the check. There may also be a deposit ticket number. Figure 3.17.10-10. The same deposit ticket number will be on the adding machine tape attached to the Form 783, Remittance Register for the date indicated on the back of the check. To find the Form 813 that matches a Cash Conversion:

    Figure 3.17.10-10

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

    The Reverse of a Cash Conversion Check

    1. Look for Forms 813 that are dated the same as the back of the check.

    2. Look for "CC" on the bottom left portion of the Form 813.

    3. If "CC" is present, match the money amounts.

    4. If you can match all of the above, copy the DLN and research the document. If you cannot find the Form 813 with the money amount you are researching, go to the Receipt and Control Unit and use the Cash Conversion Book as a research tool.

    5. Match the date on the back of the check to the date on the Form 783. Match the number on the back of the check to the adding machine tape for the date. The money amount will be on the adding machine tape attached to the Form 783 listed according to tax class.

    6. After you match the money amount on the Form 783, go to the Numbering Unit in Receipt and Control Operation and ask for the DLNs for the date and tax class of the Form 783.

    7. Batch the DLN and look on the Batch Profile to determine where the return is located.

    8. Go to the area indicated on the Batch Profile and research the return for information.

    9. At local option, Forms 813A may be retained in the Accounting function.

  4. Processing checks for erroneous refunds. Checks originally received for repayment of erroneous refunds may have been credited to a master file account or to Account 1510 , Other Receivables, Regular. When such a check is returned as dishonored, you must first determine where the original credit was posted. If the credit was posted to a master file account, debit that account using TC 721. If the original credit is located in Account 1510, take the following actions:

    1. Input BDOUT "V" to remove the check from the DCF.

    2. Prepare a Form 2287(CG). Hold the check with Form 2287(CG) until the next day when the "Void" appears on the transaction register.

    3. Attach the check to the Form 2287(CG) to be mailed to the taxpayer.

    4. Annotate a copy of Form 2287(CG) in bold print DR 1510 A/C. This should be forwarded to the RACS Unit for input of the payment reversal.

    5. Annotate the transaction register with the copy of the Form 2287(CG), i.e., Form 2287(CG) DR 1510 A/C.

    6. Forward a copy of Form 2287(CG) with listing to the RACS Unit.

    7. Input history item on IDRS, indicating Dishonored Check Debit to Account 1510.

    8. Notify the erroneous refund function that the payment is dishonored, Form 2287(CG) has been issued and the debit has been applied to Account 1510 .

  5. Researching checks with an old dishonored check number. If you receive a check having an "old" DCN, IRS has had this check previously. Request master file account information for the taxpayer. If the old DCN has been debited, look for a new DLN for this transaction.

  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  7. Researching unidentified checks. "009" as the 3rd, 4th and 5th numbers of a DLN, i.e., 8000924132600, indicates an unidentified check. Follow these steps when researching an unidentified check:

    1. Use CC URINQ on IDRS to determine if this case is open or closed. Exhibit 3.17.10-9 for CC URINQ.

    2. If the case is closed, the information will be on IDRS for research.

    3. If the case is open, take a copy of the check, front and back, and the worksheet to the Unidentified Remittance Unit. UR will close the case to DC. Void off the DCF with a BDOUT "D" . This void must be done the same day UR closes the case to DC.

    4. Mail Correspondex Letter 1687(C) and the check to the taxpayer.

    5. If the check is a partial unidentified (i.e., part of the check is unidentified and the rest is to pay the taxpayer's Form 1040), apply the debit to the taxpayer's account for the identified parts, and UR will close their amount of the check to DC. Void the unidentified amount of the check with BDOUT "D" . Mail the check, Form 2287(CG) and Letter 3731(C) to the taxpayer.

  8. Researching a "multiple" check.

    1. A "multiple" check is one of two or more checks submitted to pay for one tax account and may be processed via IDRS, RPS or manually. A check of this type can be identified by a letter "M" and the number of checks received with one document in the upper left corner of the remittance. Figure 3.17.10-11. for an example of one of three checks received with one return.

      Figure 3.17.10-11

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

      "Multiple" Check

    2. Obtain the DLN from the check.

    3. Research the return by IDRS or other means. Verify that the check amount was one of two or more remittances submitted to pay one tax account. The largest remittance has been processed with the return (TC 610) and the smaller remittance(s) as subsequent payments (TC 670).

    4. Follow the steps shown in Figure 3.17.10-12.

    5. Checking RTR can also show this breakdown.

    Figure 3.17.10-12

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

    Researching "Multiple" Check on Form 813

    To research a multiple check:
    1 Compare the money amounts on the encoding tapes to the money amounts on the Form 813.
    • Documents 00, 01, 02, and 03 match the first four money amounts on the encoding tape.

    • Document 04 is for $1,725.90; and the encoding tape shows three amounts for $1000.67, $225.23, and $500.00 (which total to $1725.90).

    • Document 05 on the Form 813 is for $87.00 and the new money amount on the encoding tape is $87.00.

    2 List the money amounts from the encoding tape on the worksheet.
    3 Line through the amounts that match on the Form 813 and the encoding tape. The tape shows the following amounts:
    5023. Line through this amount.
    15000. Line through this amount.
    183457. Line through this amount.
    30000. Line through this amount.
    100067.
    22523.
    50000.
    8700. Line through this amount.
    The remaining amounts are $1000.67, $225.23, and $500.00 (which total to $1725.90).
    4 This proves that the amount of Document 04 as $1725.90.
    5 A dishonored check for $225.23 was one of the payments made for Document 04.

  9. Researching a "split" check.

    1. A "split" check is one remittance paying for two or more returns and is processed via ISRP or manually. A split check will have "S" and the number of documents received with the remittance in the upper left corner.

    2. Obtain the DLNs from the check.

    3. Research the returns by IDRS or other means.

    4. Run an adding machine tape totaling the money amounts for all returns involved in the split. Balance the total of the worksheets to the amount of the check; the total of the worksheets and the amount of the check must balance exactly.

    5. Information for applying all amounts to the various accounts must be accumulated before any debits are made.

  10. A multiple/split remittance indicator input via ISRP at the time the remittance was processed will appear in various research tools:

    1. On transcripts between the money amount and the cycle number as "M" (multiple) or "S" (split). Refer to IRM 2.3, IDRS Terminal Responses;

    2. On CC TXMOD on the line subsequent to the money amount following the literal "MSRI—" as "M" (multiple) or "S" (split).

  11. Researching Non-Master File (NMF) (CSPC Only)

    1. Research NMF from AORR, IDRS, etc. These NMF documents must have a new DLN before you can close your case. Take the worksheet to Numbering and get a new DLN with 624 (tax class and document code).

    2. For NMF not on IDRS, you will need a new DLN, a 687 tax class and document code. Get this number from the work leader or from Numbering.

    3. Close the NMF on IDRS using the new DLN in the remarks area of the Dishonored Check Worksheet for Non-Master File.

    4. Enter "N" (Non-Master File) for type of application.

    5. Enter "N" after the TIN to indicate NMF.

    6. Enter 1300 or 23C date or 53C and the new DLN received from Numbering.

    7. Other sites should void debit and transfer to CSPC via Form 2158.

  12. Researching Non-Master File (NMF) (All other sites)

  13. Research the Remittance Transaction Research (RTR) System. RTR is a database which stores information from the Remittance Register Report (F813) and the Endpoint Master Listing Report. This system replaces the printing process of these reports produced by ISRP and allows for research to be done on-line. Checks processed by Lockbox, EFTPS and RSPCC are also available for viewing on RTR.

3.17.10.2.11.1.1.3  (01-01-2013)
IMF Erroneous Refunds caused by Dishonored Checks

  1. Erroneous refunds occur when a second payment immediately follows a payment with a dishonored check or when a refund is generated before the Campus receives notification that a check has been dishonored. It is imperative that additional IDRS research be performed in every dishonored check case to identify any pending or posted TC 840 or TC 846 on Master File that was issued in error. If no pending or posted TC 840 or TC 846 has been issued, input IDRS CC NOREFP.

    Note:

    Management must ensure that tax examiners are trained to identify and intercept pending refunds.

    1. DCF IMF Erroneous Refund Report (DCF 25) should be researched weekly. The IMF DCF Erroneous Refund Report contains a listing of all taxpayer accounts that have a TC 280/286 and TC 840/846.

    2. Tax Examiners should research IDRS with CC IMFOLT and CC TXMOD to identify and stop the release of erroneous refunds.

      If Then
      No return is posted input CC NOREFP with Reason Code 82
      Refund hold and no control base input CC NOREFP with Reason Code 82
      Refund hold and control base contact originator

    3. Refer to IRM 2.4.37, CC NOREF Overview for a complete description and input requirements. Cutoff times are outlined in IRM 21.4.1.4.10, Refund Intercept CC NOREF.

      Note:

      If CC IMFOLT shows TC 846 is posted, the refund cannot be stopped.


    4. If the cutoff time to stop the refund has expired, issue Letter 510 C to the taxpayer to advise them of the dishonored check/erroneous refund situation. Letter 510 C is generated using CC LETER and is the way IRS "demands" the erroneous refund be repaid. The date of the letter is considered to be the Date of Demand.

  2. Tax Examiners must prepare and forward required documentation to the Erroneous Refund Team to initiate procedures to recover erroneously issued refunds. Erroneous Refund cases must be forwarded to the respective Submission Processing Campus Erroneous Refund function. The case must be documented and accurately prepared, as outlined in IRM 21.4.5, Refund Inquires - Erroneous Refunds.

    1. The Category Type of Erroneous Refund must be identified. These cases have already been determined to be Category D (Unassessable) since we failed to stop the refund(s). The Erroneous Refund Categories are explained in IRM 21.4.5.4.1 through 21.4.5.4.5, Erroneous Refund Categories and Procedures.

    2. History Sheets must be prepared from the point of discovery.

    3. Documentation of actions taken, pending actions, telephone calls, copies of letters, etc. must be annotated on the History Sheet and be retained in the case file.

  3. Detailed procedures for processing erroneous refunds are outlined in IRMs 21.4.5, Refund Inquires and Erroneous Refunds and 3.17.80, Working and Monitoring Category D, Non-Rebate Erroneous Refund Cases in Accounting Operations.

3.17.10.2.11.1.1.4  (01-01-2013)
BMF Erroneous Refunds caused by Dishonored Checks

  1. Research and identify any pending or posted TC 840 and TC 846.

    1. DCF BMF Erroneous Refund Report (DCF 45) should be researched weekly. The BMF DCF Erroneous Refund Report contains a listing of all taxpayer accounts that have a TC 280/286 and TC 840/846.

    2. Tax Examiners should research IDRS with CC BMFOLT and CC TXMOD to identify and stop the release of erroneous refunds.

      If Then
      Refund hold and no control base input CC NOREF with Reason Code 82
      Refund hold and control base contact originator

    3. Refer to IRM 2.4.37, Refund Intercept CC NOREF Overview, for a complete description and input requirements. Cutoff times are outlined in IRM 21.4.1.4.10, Refund Intercept CC NOREF.

      Note:

      CC NOREF for BMF must be input by 4:00 p.m. EST the Friday after the cycle posted date.

    4. If the cutoff time to stop the refund has expired, issue Letter 510 C to the taxpayer to advise them of the dishonored check/erroneous refund situation. Letter 510 C is generated using CC LETER and is the way IRS "demands" the erroneous refund be repaid. The date of the letter is considered to be the Date of Demand.

  2. Tax Examiners must prepare and forward required documentation to the Erroneous Refund Team to initiate procedures to recover erroneously issued refunds. Erroneous Refund cases must be forwarded to the respective Submission Processing Campus Erroneous Refund function. The case must be documented and accurately prepared, as outlined in IRM 21.4.5, Refund Inquires - Erroneous Refunds.

    1. The Category Type of Erroneous Refund must be identified. These cases have already been determined to be Category D (Unassessable) since we failed to stop the refund(s). The Erroneous Refund Categories are explained in IRM 21.4.5.4.1 through 21.4.5.4.5, Erroneous Refund Categories and Procedures.

    2. History Sheets must be prepared from the point of discovery.

    3. Documentation of actions taken, pending actions, telephone calls, copies of letters, etc. must be annotated on the History Sheet and be retained in the case file.

  3. Detailed procedures for processing erroneous refunds are outlined in IRMs 21.4.5, Refund Inquires and Erroneous Refunds and 3.17.80, Working and Monitoring Category D, Non-Rebate Erroneous Refund Cases in Accounting Operations.

3.17.10.2.12  (01-01-2013)
Processing Dishonored Checks for Payments Other Than IRS Tax Liabilities

  1. Processing Dishonored Checks Received for Shipment of Forms—If you receive any such checks, add these checks to DCF and return the check to the bank. On the Request to Redeposit, indicate the distribution center to which the check should be forwarded. When the SF 5515 is returned, void the checks off the DC file with BDOUT "R" . All checks received for shipment of forms should have been forwarded to the National Distribution Center at the address below:
    National Distribution Center
    2402 E. Empire
    Bloomington, IL 61799.

  2. Processing dishonored checks intended as voluntary contributions to reduce the public debt-Void check from DCF. Send copy of front and back to RACS Unit for journalization to Account 2350, Public Debt. Return check to the taxpayer with a brief explanation. Do not assess a bad check penalty.

  3. Processing dishonored checks intended to pay for a photocopy of a tax return.

    1. Remittances will be manually deposited and encoded on the reverse as 4506. Void from DCF. Make two photocopies of the front and back of the check and forward one copy to the Photocopy Unit and one copy to the RACS Unit.

    2. Return check to the taxpayer using Form 8157, Check for Copy of Tax Return Not Accepted by Bank. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Figure 3.17.10-13. Send Parts 1 and 2 to the taxpayer with the check.

    Figure 3.17.10-13

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

    Form 8157, Check for Copy of Tax Return Not Accepted by Bank

  4. Processing a non-IRS check which was originally deposited by IRS—Void check from the DCF using CC BDOUT "I," when returned as "not payable to IRS." Prepare Form 2424, to credit Account 1710 (Dishonored Checks) and to debit the taxpayer account that received the credit when the check was originally processed by IRS. Return the check to the taxpayer with an explanatory letter containing an appropriate apology for processing the remittance in error.

  5. Processing a non-IRS check which was not originally deposited by IRS-Contact bank, explaining situation, and ask for the preferred procedure by which the bank will issue a confirmed Form 215 to reverse the SF 5515. Follow the procedure indicated. Void the item from the DCF using CC BDOUT "V," entering "Unprocessed non-IRS check" in Comments section. Prepare Form 8250 for Deposit function, explaining situation and describing bank procedure to be followed in "Reason" section. Annotate in red with "DO NOT ENDORSE." Flag the Form 8250 for special handling. Do not contact the payor.

  6. Processing checks intended to pay EP/EO user fees for letter rulings and for determination, notification, advisory and opinion letters.

    1. Void check from the DCF using CC BDOUT "V."

    2. Photocopy the front and back of the check, forwarding copies with the DCF03, 1710 Account Transaction Register, to the RACS Unit for journalization. Annotate the report to show "User Fees" .

    3. Return the original check with transmittal to the TE/GE area office to which the original ruling, determination, notification, advisory or opinion letter request was sent.

  7. Processing checks intended to pay Examination and Chief Counsel. Processing checks intended to pay user fees for letter rulings and for determination and opinion letters.

    1. Void check from the DCF using CC BDOUT "V" .

    2. Photocopy the front and back of the check, forwarding the copies with the DCF03, 1710 Account Transaction Register, to the RACS Unit for journalization. Annotate the report to show "User Fees. "

    3. Return the check to the taxpayer using Form 12993, sending Parts 1 and 2 to the taxpayer.

3.17.10.2.12.1  (01-01-2013)
Processing Dishonored Checks for Installment Agreement User Fees (IAUF)

  1. Since March 1,1995, taxpayers are charged a fee for establishing and monitoring Installment Agreements (IA). On January 1, 2007, these fees were increased. In addition to the increase, a new user fee was established for Direct Debit Installment Agreements (DDIA). A reduced fee was also established for taxpayers with income at or below certain U.S. Department of Health and Human Services poverty guidelines.

    Note:

    The user fees, including the DDIA and reduced fee, were established on January 1, 2007.

    Note:

    Both the old and new fee amounts are valid in 2007. If the installment agreement was made prior to January 1, 2007, the old user fee amount was valid if paid in 2007. Installment agreements made after January 1, 2007, were subject to the increased fee.

    Note:

    Previously, taxpayers were required to submit a paper Form 13844 to request a reduced user fee. Now, a taxpayer may qualify for the reduced fee automatically if there is a Low Income Indicator on IDRS.

    1. The Installment Agreement user fee for IMF and BMF taxpayers was $43 if the agreement was made before January 1, 2007. After January 1, 2007, the user fee increased to $105. Designated Payment Code (DPC) 50 will be used to identify the origination fee.

    2. If the taxpayer qualifies for a reduced IA user fee, the reduced fee will be $43. DPC 47 will be used to identify the reduced fee.

    3. If the taxpayer defaults on an Installment Agreement and applies for and is granted a reinstatement, a reinstatement/restructure fee of $24 will be charged to the taxpayer before January 1, 2007. After January 1, 2007, the reinstatement/restructure fee increases to $45. DPC 51 will be used to identify the reinstatement fee.

    4. The new user fee for a DDIA is $52. DPC 49 will be used to identify the DDIA user fee.

    5. If the taxpayer qualifies for the new reduced user fee for a DDIA, the new fee will be $43. DPC 48 will be used to identify the DDIA user fee.

    6. The Treasury Accounting Symbol for Installment Agreement user fees (and DDIA origination fees) is 20X5432.1 and 20X5432.3 for reinstatement/restructure fees.

    7. Dishonored checks for Installment Agreement user fees are returned to the campus via Debit Voucher/SF 5515.

    8. The user fee transaction will post with TC 694 as the primary transaction code and TC 360 as the secondary transaction code. Designated Payment Code (DPC) 50 (new agreement, $43 or $105), 47 (reduced new agreement, $43), 51 (reinstatement, $24 or $45), 49 (DDIA new agreement, $43 or $52), or 48 (reduced DDIA, $43) will be present on the module.

      Note:

      User fees may be made as split/multiple payments and the total must be equal to the required fee: $43 or $105; $24 or $45; or $52.

      Example:

      A TC 694 for $25 and a TC 694 for $80, with the corresponding TC 360 amounts for $25 and $80, may be on the user fee module to cover the $105 fee.

    9. To reverse the user fee transaction, use CC BDAPL with TC 695 and the appropriate DPC. TC 360 must be reversed using CC REQ54.

  2. Do not assess a bad check penalty against dishonored checks for user fees or portions of split payments representing user fees. Only the portion of the check representing tax payments may be subject to the dishonored check penalty. See IRM 3.17.10 below for additional instructions.

    Note:

    Correspondence received to abate the dishonored check penalty will be forwarded to Accounting Operations.

  3. Existing receipt, balancing and CC BDADD procedures should be followed when adding these checks to the DCF.

  4. Prepare Form 12993, Check for Installment Agreement User Fee Not Accepted by Bank. Figure 3.17.10-14. Mail Parts 1 and 2 of Form 12993 and the dishonored check to the taxpayer.

    Figure 3.17.10-14

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

    Form 12993 Check for Installment Agreement User Fee Not Accepted By Bank

  5. If the dishonored check includes a tax payment(s) as well as Installment Agreement user fees, process the check as a split payment.

    1. Additional research may be required to identify the portion of a payment received through the Lockbox that includes both taxes and user fees. The portion of a Lockbox payment representing a tax payment will automatically be posted to the taxpayer's account.

    2. In order to determine the portion of the payment that represents tax payments, it may be necessary to review the taxpayer's account(s), to request the tax return(s), and/or to research the support listing which accompanies the SF 215A, Deposit Ticket.

    3. The support listing is maintained in the Campus Accounting Operations and shows the individual TIN/Payment amount and provides a summary report showing the amount collected and deposited for each account. Payments received that contain both tax payments and user fees will be identified on the listings with an "F" .

    4. When researching payments and requesting returns, it is important to remember that the DLN assigned to a payment made through the Lockbox will not be the same as the DLN assigned to the return.

    5. Debit the taxpayer's account(s) using CC BDAPL for the portion of the payment intended to satisfy the tax liability or liabilities. Compute dishonored check penalties on only the portion of the payment that represents taxes as outlined in IRM 3.17.10 (Assessing a Dishonored Check Penalty). A Form 2287(CG) will be generated for each account to which a debit has been applied.

    6. Prepare Form 12993 for the amount of the payment representing user fees only.

    7. Return the original check to the taxpayer along with Parts 1 and 2 of Form 12993 and the related Form(s) 2287(CG). If taxes for more than one account are included in the payment, also send the taxpayer Form 8269, Notice of Dishonored Check for More than One Tax Form. Form 8269 will reflect the amount of the dishonored check, penalties assessed, and the total taxes due with Forms 2287(CG) only. Do not include the amount of the payment representing user fees in the box labeled "Total due with Forms 2287(CG)" . The total shown on Form 12993 added to the total shown on Form(s) 2287(CG) must equal the total amount of the check.

    8. Dishonored checks for Installment Agreement user fees received by the campus will be researched per instructions outlined in IRM 3.17.10 (Researching Dishonored Checks for Payment of IRS Tax Liability). It may be necessary to request the return(s) to determine the individual amounts comprising the total paid. Return the check to the taxpayer following either the Form 12993 or split payment procedures, as appropriate, outlined above.

3.17.10.2.13  (01-01-2013)
Other Dishonored Check Processing Actions

  1. Identifying an Encoding Error-An Encoding Error is a check encoded for a money amount different than that for which the check was written. To process an Encoding Error type check, you will need to get "back-up" documentation. Back-up consists of a copy of the document, a copy of the Form 813 and a copy of the encoding tape, if the document is manually encoded. Obtain an IDRS printout of the tax module, using CC TXMODA, to see if the taxpayer was given the correct credit. If the module is not on IDRS, request information from the Master File using CCs IMFOL/BMFOL.

  2. Identifying an "Amounts Differ" Check-An "Amounts Differ" check occurs when the written amount differs from the numeric amount. Process amounts differ checks using the same procedures for Encoding Error. ( Figure 3.17.10-15.)

    Figure 3.17.10-15

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

    "Amounts Differ" Check

  3. Identifying a "Guarantee Amount " —A "guarantee amount" is an amounts differ check i.e., the written amount differs from the numeric amount. You can guarantee a check only if the written amount and the numeric amounts are different. Process Guarantee Amount checks as indicated for Encoding Error.

  4. After you research checks for encoding errors, amounts differ and guarantee amounts, take the cases to the work leader. Each case is different. In some instances, the taxpayer will have received the correct credit and you will not debit the account. Send these checks back to the bank on Form 8250, Request to Redeposit Checks. On other cases, the taxpayer's account did not receive the correct credit. Debit the taxpayer's account and prepare Form 3244, Payment Posting Voucher, and carry the Form 3244 and the check to Receipt and Control. List the check being redeposited in the redeposit book for our records and for Receipt and Control to initial.

  5. Processing a Mutilated Check—A mutilated Check will not be accepted by the bank because it has been partially destroyed. From what is left of the check, find the return and get "back-up" documentation. Debit the taxpayer's account and mail a letter of explanation to the taxpayer. Send Form 2287(CG) and 8290, Returned Check Repayment Notice, to the taxpayer to request that a new check be mailed to IRS. Do not assess a bad check penalty.

  6. Identifying 941M–720M—When you are researching CC INOLE or ENMOD, the filing requirements (FR) will show FR 941–09 or 10 or FR 720–09. This indicates the taxpayer is a monthly filer. When you see this, "flag" the check to indicate the taxpayer is a monthly filer. There will be no contact between taxpayer and campus at this point. Forward check and Form 2287(CG) to the Area Collection Office Function, on Form 3210, Document Transmittal. Figure 3.17.10-16.

    Figure 3.17.10-16

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

    Forms 3210 and 2287(CG)

  7. Processing Foreign Checks

    1. Foreign remittances are deposited with
      Bank of America
      Foreign Transit Items
      CA9-705-LA-17
      1000 W Temple St
      Los Angeles CA 90012

      Note:

      Bank of America Customer Service: Karen Delores at 888-715-1000 ext 21600.

    2. Dishonored foreign remittances made payable in foreign currency will be returned to the taxpayer with a request to resubmit the remittance in US dollars made payable through a US bank.

    3. Any collection costs charged to process foreign remittances will be charged back on a SF 5515. Void the charges using CC BDOUT "V" and forward to RRACS.

    4. Foreign checks made out in US dollars, but made payable through a foreign bank, will be debited against the taxpayer's module as any other dishonored check.

    Note:

    If the foreign check has been rejected by Bank of America, do not redeposit it.

  8. Processing a Levy Check-A levy check will have the following endorsement on the back: "This check (money order, draft) and the proceeds thereof have been seized under authority of Title 26, United States Code, Section 6331, for application on the unpaid tax liability of (name of taxpayer), and is herewith deposited to the credit of the Treasurer of the United States (name of Area Director) Area Director of the Internal Revenue Service (City or State)" .

    1. If the check was returned for personal endorsement missing, although endorsed as above, telephone the bank and alert them of our authority. Whenever a check is stamped as above, the check does not need an endorsement for the bank to honor it.

    2. Redeposit the check.

    3. Void off DC file with CC BDOUT "R " when Form 215 is received.

    4. When a cash register seizure is made, the Revenue Officer stamps each check with a levy endorsement stamp. If the stamp is missing, research further to make certain this is a seizure check. An indication would be if the check is made out to a business or an individual other than IRS. Handle as a check from other than the taxpayer (see 9. below).

    5. Other levy checks may be submitted to IRS directly by a third party in response to a Notice of Levy; these remittance may not bear the endorsement described in a. above. ALL levy checks will, however, be identifiable by a designated payment code (DPC) on CC TXMOD. The DPC appears on the line following, TC 670, 680, 690, 694, or 700 as a literal followed by one of the following: 04, 05, or 06. If a third party remittance carries a levy endorsement stamp OR if one of the above DPCs is present on CC TXMOD, do not assess a bad check penalty. Otherwise, handle as a check from other than the taxpayer. (See 9. below).

  9. Processing Checks from Other than the Taxpayer-A check submitted by one party to pay another taxpayer's liability or a third-party check (one originally written payable to someone other than IRS but endorsed "payable to IRS" by the taxpayer) are to be handled the same way. When one of these checks is received as dishonored, do not contact the original maker of the check. Such contact could have disclosure implications. Only the taxpayer should be contacted and asked to submit another remittance. Send the check back to the original maker using Form 3699 only if the check was made out to the IRS by the third party. If the check was made out to the taxpayer and subsequently endorsed over to the IRS, send the check back to the taxpayer using Form 3699.

    Note:

    Although Form 3699 is entitled "Return of Document to Taxpayer" , its use in returning documents to third parties has been confirmed as standard practice.

  10. Missing Date on Check-If a check is returned for a missing date, enter the original deposit date (from the back of the check). These checks should then be promptly delivered to the Deposit Activity for redeposit.

  11. Deposit discrepancy situations described above differ from those described in IRM 3.17.10 in that these are errors on single payments which do not affect other payments in the block.

  12. If research of CC ENMOD/TXMOD indicates only check digits or no name control on the module, before using CC BDAPL, you must change the name control on the dummy module to correspond to that shown on the ACTRA hard copy transcript. To do this, use CC ACTON.

  13. If research indicates that a refund may be issued from the account before application of the dishonored check debit, follow the instructions in IRM 3.17.10.2.11.1.1.3 for IMF and the instructions in IRM IRM 3.17.10.2.11.1.1.4 for BMF.. IRM 3.17.10.2.11 (Researching Dishonored Checks for Payment of IRS Tax Liability).

3.17.10.2.13.1  (01-01-2013)
Processing Missing Checks

  1. A missing check is a check listed on the deposit ticket, but is not in the batch of checks attached to the deposit ticket. It may have been lost by IRS or the bank. Take the following steps when processing Forms SF 5515 for missing checks:

    1. Add items to the DCF using the name "Unknown" .

    2. Search for return reflecting the related credit to identify the taxpayer. Correct the name with CC BDENT.

    3. In cases in which Federal Reserve Bank records have been destroyed, the information should be requested from the taxpayer's financial institution on Correspondex Letter 1992 (SC). See Figure 3.17.10-17

  2. Figure 3.17.10-17

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

    Letter 1992(SC)

    Items To Complete For Letter 1992(SC)
    1 Person to contact.
    2 Hours.
    3 Telephone Number.
    4 Reply to.
    5 Account #.
    6 Maker.
    7 Payee.
    8 Amount.
    9 Check #.
    10 Date Drawn.
    11 Financial Institution.
    12 Date of Deposit Ticket.

  3. If the chargeback item is resolved quickly between IRS and the bank, it will not be necessary to debit the taxpayer's account. If the taxpayer must be contacted to resolve the problem, the taxpayer's account will be debited at the time the taxpayer correspondence or telephone contact is initiated as described in (7) below. This will preclude an erroneous refund if the taxpayer sends another remittance that posts to his/her account before IRS has reversed the previous credit.

  4. Initiate correspondence with the taxpayer advising him/her of the processing problem regarding a missing check and request that reply be made within 10 days to avoid interest and penalties.

    1. Request a photocopy of the front and back of the check.

    2. If the taxpayer has not received the cancelled check, request the taxpayer to reissue a new check.

    3. Telephone the taxpayer if a reply is not received within 18 days of the initial correspondence date.

    4. Send a follow-up letter to the taxpayer if telephone contact cannot be made.

    5. Close case if no reply is received to the follow-up letter after 15 workdays of its sending.

  5. Upon receipt of the requested photocopies from the taxpayer, initiate correspondence with the IRS depositary bank to request the proper credit in accordance with the enclosed evidence submitted. Telephone the depositary bank if a reply is not received within 10 working days of the correspondence date.

  6. An unpaid missing bank money order may require an indemnity agreement. (Refer to IRM 3.0.167, Losses and Shortages.)

  7. Upon receipt of the requested credit from the depositary bank, remove it from the DCF with CC BDOUT "X" if the account has not been debited. If the account has been debited, credit the account using Form 3244 with the original received date.

  8. Missing checks will be included on the weekly report to the Director. (This memorandum will be generated at the Director's discretion, either based on time or on an inventory level that he or she deems appropriate.) They will not be expected to meet the 21 day cycle. They should be categorized by unknown, in correspondence with taxpayer, or in correspondence with the bank.

3.17.10.2.13.1.1  ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡

    Figure 3.17.10-18

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

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

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    Figure 3.17.10-19

    Figure 3.17.10-20

3.17.10.2.14  (01-01-2013)
Penalties on Electronic Payments

  1. Beginning January 1, 2011, legislation was approved to allow penalties on electronic payments.

  2. The penalty is systemically generated with Transaction Code 286.

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. If the electronic payment unposts and needs to be transferred to Cincinnati Non Master File, the penalty will also need to be computed and transferred. Compute the penalty per instructions in 3.17.10.18.2, and then input the amount on Form 3465. Forward Form 3465 with the completed Form 2158 and backup to Cincinnati.

3.17.10.2.15  (01-01-2013)
Applying the Debit to the Taxpayer's Account

  1. Take all the ISRP checks and researched worksheets to IDRS and verify entity and payment to ensure that the credit is still on the account which you are about to debit. An unpostable condition is created if a dishonored check debit (TCs 611, 621, 641, 661, 671, 681 or 691) attempts to post in the absence of a matching credit. Such unpostables will be returned to the DC function to be added back to the DCF and for reprocessing. Particular care should be taken when applying money orders to ensure that the same remittance is not debited twice.

  2. Input CC BDAPLR to request CC BDAPL. Transfer information from the worksheet to the IDRS screen. Exhibit 3.17.10-5

  3. If you find when closing a case, the taxpayer used an incorrect TIN and you find the correct TIN, use the correct TIN for application. You may wish to enter in the Remarks area, "X–ref t/p used incorrect TIN" . Ensure corrective action has been taken on the incorrect posting.

  4. If research indicates NMF account, void debit w CC BDOUT "V" and transfer debit to CSPC via Form 2158.

  5. At the end of the fiscal year, if October 1 falls on a Monday thru Friday, do not input applies with a current julian date until after the following Sunday. Applies with current julian dates that are input before the first Sunday in October will be considered 'prior year' and will not appear on DCF0540 until the second working day following the first Sunday in October.

3.17.10.2.16  (01-01-2013)
Changing Entity Information on the DCF

  1. Change entity information, the Employee Number or Trace ID Number of a record on the Dishonored Check File with CC BDENT. Exhibit 3.17.10-6

  2. For Deceased taxpayers, see instructions in IRM 3.13.5.30.

3.17.10.2.16.1  (01-01-2013)
Processing Unpostables Involving Dishonored Checks

  1. With the exception of unpostables resulting from incorrect or unavailable money amounts, the Unpostable function will perform research to determine if they can correct the unpostable condition. For all unpostable conditions they are able to correct, Unpostables will prepare a Form 11358, Excess Collection Unpostable Conditions, and forward it to the Dishonored Check function. Form 11358 will be prepared weekly, which will list each unpostable that has been corrected. The DLN, name control, TIN, and the data element that was corrected along with remarks will be noted on Form 11358. Exhibit 3.17.10-1

  2. Upon receipt of Form 11358, correct the erroneous data on the DCF database using CC BDENT. Do not void and re-add the credit to the DCF.

  3. Unpostables resulting from incorrect or unavailable money amounts will be returned to the Dishonored Check function for resolution.


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