3.17.79  Accounting Refund Transactions

Manual Transmittal

December 12, 2013

Note:Requests for IRM text changes must be received by the IRM author no later than early June each year to meet course design and publishing time frames for the current year IRM revision.

Purpose

(1) This transmits revised IRM 3.17.79 Accounting and Data Control, Accounting Refund Transactions.

Scope

This is a combination-IRM. This IRM serves as a training guide and provides procedural and processing instructions to Accounting Operations to approve, schedule and certify refunds. This IRM also provides instructions for employees to schedule and certify generated refunds and related processing (e.g., posting refund cancellations, manual, journal and other posting actions). Manual refunds are considered post-journal actions for RRACS, (Redesign Revenue Accounting Control System).

Material Changes

(1) Editorial changes and procedural clarifications throughout text

(2) IRM 3.17.79.1.1 Training - Clarified training requirements

(3) IRM 3.17.79.1.7 Authorized Signatures and Delegations of Authority - Made the following changes:

  1. Removed the USR or designated management official, quarterly review and validation of the Restricted Command Code listing to Headquarters analyst requirement from (2)d)

  2. Removed last sentence referring to future enhancements from (2)e)

  3. Added "See IRM 3.17.221.30 for a sample of FMS Form 210 and IRM 3.17.221-33 for a sample of FMS Form 2958" to (3)b)

(4) IRM 3.17.79.1.8 Designating Certifying Officers (CO) and CO Review - Clarified procedures

(5) IRM 3.17.79.3.2 Processing Manual Refunds - Made the following changes:

  1. Clarified procedures

  2. Added TC 971 AC 664 clarification statement to (8) and (17)

(6) IRM 3.17.79.3.2.1 Rejecting Manual Refunds - Made the following changes:

  1. Removed requirement to complete a Manual Refund Reject Feedback document on CC REFAP errors and clarified should only record errors on daily and weekly report in (4)

  2. Added exception processing for Philadelphia SBSE only in (4)

  3. Replaced "weekly" with "upon request" for when report data will be shared in (8)

  4. Updated BOD point of contact list in (9)

(7) IRM 3.17.79.3.3 Issuing Hardship Refunds - Clarified procedures

(8) IRM 3.17.79.3.3.1 Actions Required of Initiators Before Requesting Refunds - Clarified procedures

(9) IRM 3.17.79.3.4 Manual Refund Report to Headquarters Chief Financial Office (CFO) - Weekly - Clarified procedures

(10) IRM 3.17.79.3.4.2 Reporting of Manual Refunds without Open Control Base - Clarified procedures

(11) IRM 3.17.79.3.4.3 Manual Refund Monthly Monitoring (10 Cases) - Submission Processing - Clarified procedures

(12) IRM 3.17.79.3.4.4 Managerial Review - Monitoring Requirements - Clarified procedures

(13) IRM 3.17.79.3.5 Employees Authorized to Sign Requests for Refunds - Made the following changes:

  1. Edited text and clarified Form 14031 requirements in (2), (3), (4), (5), (11)a), (12)a), and (14)

  2. Added clarification statement to (5) Note

  3. Removed note related to yearly memo requirement in (6)

  4. Added statement to be included in Head of Office quarterly validation email to (7)

  5. Added specific documentation requirement to (8)

  6. Clarified pseudonym documentation requirement in (10)i)

  7. Added clarification statement to (10)k) Note

  8. Added new email contact to (11)a)

  9. Added note to (11)b) "The Sharepoint, Form 14031 repository file should reflect the same information as the hardcopy maintained in Accounting. No modifications are allowed on the Form 14031, see para (3) above"

  10. Added a 100 percent review of the RSTRK(M) listing must be performed quarterly by comparing all active Form 14031s to the RSTRK(M) listing in (12)c)

  11. Added the RSTRK(M) listing must also reflect all active Certifying Officers with an FMS 210CO on file at your site and the quarterly RSTRK(M) review must be completed upon completion of all quarterly Head of Office validations in (12)c)

  12. Added "This memorandum must state the following: This is to certify completion of the quarterly Head of Office validation of manual refund Approving Officials (Form 14031) and the 100 percent review of the RSTRK(M) listing. Submit the quarterly memorandum certifying completion of the Head of Office quarterly validations and completion of the quarterly 100 percent review of the RSTRK(M) listing no later than January 1, April 1, July 1, October 1." to (12)d)

  13. Added a note "Any discrepancies identified while performing the 100 percent review of the RSTRK(M) listing must have documentation of findings, all corrective actions taken and maintained with the quarterly Head of Office validation file." to (12)d)

(14) IRM 3.17.79.3.6 Manual Refunds $1 Million or More and $10 Million or More - Clarified procedures

(15) IRM 3.17.79.3.10.1 Form 8302, Electronic Deposit of Tax Refund of $1 Million or More - Clarified procedures

(16) IRM 3.17.79.4.1 Case Review and Command Code (CC) REFAP (Refund Approval) - Made the following changes:

  1. Added TC 971 AC 664 clarification statement to (2)r)

  2. Revised (2)v)

  3. Revised (2)ab) Note

(17) IRM 3.17.79.4.1.1 Form 3753 - Refund Activity Report End of Day (EOD) 0635 - Removed section

(18) IRM 3.17.79.4.1.2 Duplicate Refund Transcript (DUPREF) - Removed section

(19) IRM 3.17.79.5 Accounting Review of Manual Refund Requests, Form 3753 - Made the following changes:

  1. Added TC 971 AC 664 clarification statement to (5)

  2. Remove requirement to populate "Misc" field with the input of TC 971 AC 664

(20) IRM 3.17.79.6.1 Scheduling Refunds - Made the following changes:

  1. Added TC 971 AC 664 clarification statement to (4)

  2. Remove requirement to populate "Misc" field with the input of TC 971 AC 664

(21) IRM 3.17.79.7.1.2 Releasing Perfected Form 1099INT For Manual Refunds - Clarified procedures

(22) IRM 3.17.79.9 Preventing Duplicate Refunds (2)d) added TC 971 AC 664 clarification statement

Effect on Other Documents

IRM 3.17.79 Accounting Refund Transactions dated November 15, 2012 (effective January 1, 2013) is superseded. The following IRM Procedure Updates (IPUs), issued from January 2, 2013 through October 18, 2013 have been incorporated into the revised IRM: 13U0011, 13U0068, 13U0128, 13U0153, 13U0415, 13U0851, 13U0983, 13U1039, 13U1070, 13U1228, 13U1304, 13U1479, 13U1493, 13U1513, and 13U1531.

Audience

IRM 3.17.79 is used primarily by Submission Processing Accounting Operations employees for pre-journal (or Master File generated refunds, transaction code (TC) 846) and post-journal refund activities (also known as TC 840). All managers and employees involved in processing and initiating manual refunds are required to have annual manual refund training (as recommended by the Government Accountability Office).

Effective Date

(01-01-2014)

Related Resources

These procedures should be used in conjunction with IRM 3.17.63 Redesign Revenue Accounting Control System and IRM 3.17.64, Accounting Control General Ledger Policies and Procedures

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

3.17.79.1  (01-01-2013)
Overview

  1. This IRM describes procedures used by Submission Processing Centers to process refund approval documentation, prepare refund schedules and issue related information documents.

3.17.79.1.1  (01-01-2014)
Training

  1. All Accounting Operation employees that will be involved in processing manual refund requests must complete training Course 10784 Processing Manual Refund Requests, annually and prior to any employee being assigned Integrated Data Retrieval System (IDRS) command code(s) (CC) RFUND or CC REFAP.

  2. All Submission Processing employees involved in initiating, authorizing and/or processing manual refund requests must complete Enterprise Learning Management System (ELMS) Course 30914 Manual Refunds, annually and prior to being assigned IDRS CC RFUND, CC REFAP or IDRS CC restriction RSTRKM (manual refund authorizer/Certifying Officer).

  3. All Submission Processing employees involved in monitoring manual refund requests must complete ELMS Course 42841 Monitoring Manual Refunds, annually. This Course is also Lesson 6 in ELMS Course 30914. This Course requirement is fulfilled if the employee has completed ELMS Course 30914, annually.

  4. Documentation of all training must be maintained, available for review and recorded in ELMS.

3.17.79.1.2  (01-01-2014)
Refund Types and Methods - Treasury Disbursing, Bureau of Fiscal Services

  1. ELECTRONIC FUNDS TRANSFER (EFT) identifies delivery systems used to transfer payment or funds electronically. These systems are a faster, more secure way of transferring funds in contrast to issuing paper checks.

    1. The Kansas City, Bureau of Fiscal Services (BFS) (formerly known as Financial Management Service (FMS)) and the Federal Reserve Bank (FRB), are directly involved in two types of EFT services: Automated Clearing House (ACH), and Wire Transfers (FEDWIRE).

  2. AUTOMATED CLEARING HOUSE (ACH) REFUNDS FOR RETURNS FILED ELECTRONICALLY transfers funds electronically for participating depository financial institutions.

    1. ACH primarily functions through the FRB. Rules, procedures, and programs were developed by the Regional ACH Association, National Automated Clearing House Association (NACHA).

    2. ACH payment files received by the BFS on any business day allows for payee accounts to be credited the next business day. ACH payment processing can accept payment amounts up to $99 million.

  3. WIRE TRANSFER (FEDWIRE) is one of the major wire transfer systems directly connected to the FRB.

    1. Known as the Federal Reserve Communications Systems (FRCS), wire transfers are executed through the FEDWIRE network.

    2. The BFS uses FEDWIRE extensively to disburse and collect funds. BFS uses the Treasury FEDLINE to transmit funds through the FEDWIRE System.

  4. THE TREASURY FEDLINE PAYMENT SYSTEM (FEDLINE) processes requests for wire transfer on refunds of $1 million or more. Requests are received from the taxpayer on Form 8302, Electronic Deposit of Tax Refund of $1 Million or More, Form 8302 cites the restrictions and conditions which may result in a refund by check. The FEDLINE process requires supporting documentation and is considered on a case by case basis only. (SeeIRM 3.17.79.3.10.1, Form 8302, Electronic Deposit of Tax Refund of $1 Million or More.)

    1. Treasury FEDLINE is an EFT system that has a direct line to the FRCS through the Federal Reserve Bank of New York (FRBNY).

    2. Wire transfer payment schedules are routed to the Kansas City, BFS.

    3. Payment amounts are limited to $999 million and are credited to payee accounts on the same business day.

  5. TREASURY CHECKS

    1. Treasury checks are drawn on the U.S. Government and issued from a refund appropriation or other Treasury account symbol on a Secured Payment System (SPS) Refund Schedule submitted to the Kansas City, BFS.. Treasury tax refund and other check payments are certified through the Kansas City, BFS, SPS. The SPS screen print of the SPS Refund Schedule serves as supporting documentation for check-issue media submitted to the Kansas City, BFS. The SPS Refund schedule is created and matched to tape reel number or other transmission record, check volume, amount, and date certified. Individual payment detail data for check inscription, are included on the file. All refund schedules are certified by a designated "Authorized Certifying Officer" of the agency.

    2. Form 3753, Manual Refund Posting Vouchers, are processed through the Internal Revenue Service (IRS) Integrated Submission and Remittance Processing system (ISRP) using Document Code 45 in the document locator number (DLN) for posting to the Master File. The SPS Refund Schedule is sent to the Kansas City, BFS for disbursement of the refund.

    3. Forms 5792, Request for IDRS Generated Refund (IGR), are input via Integrated Data Retrieval System (IDRS) (CC RFUNDR) and transmitted to the Kansas City, BFS. Files are sent simultaneously to the Enterprise Computing Center for posting the TC 840 to the Master File.

    4. Miscellaneous refund payments such as Photocopy Fee (Form 4506) reimbursements, are certified by the Internal Revenue Service (IRS) and sent to the Kansas City, BFS, to issue a check. Miscellaneous refund payments are issued from General Ledger Accounts and are not reflected on the Master File.

  6. Secure Payment System (SPS) is an application that provides a mechanism by which government agencies can create payment schedules in a secure fashion, and with a strictly enforced separation of duties. This application allows personnel at Federal Program Agency (FPA) locations to submit schedules to the Kansas City, BFS over a browser/web interface. Two different user-types are required and responsible for an FPA to submit schedules to SPS. First, a Data Entry Operator (DEO) creates a schedule and submits the schedule for certification. Next a Certifying Officer (CO) examines the schedule and upon verification, certifies the schedule which results in the schedule being submitted to Kansas City, BFS. See IRM 3.17.79.6.4 Bureau of Fiscal Services Secure Payment System.

3.17.79.1.3  (01-01-2013)
Related IRMs

  1. This IRM chapter includes instructions for Submission Processing, Accounting Operation, accounting and refund approval. Related processing information is located in the following IRMs (this list is not all inclusive):

    1. IRM 1.11.3, Policy Statements

    2. IRM 2.4.19, Command Code REQ77, FRM77 and FRM7A

    3. IRM 2.4.20, IDRS Command Code RFUND and REFAP

    4. IRM 3.0.167, Losses and Shortages

    5. IRM 3.0.257, Systems Accountability Review

    6. IRM 3.11.10, Revenue Receipts

    7. IRM 3.13.62, Media Transport and Control

    8. IRM 3.17.10, Dishonored Check File (DCF) and Unidentified Remittance File (URF)

    9. IRM 3.17.20, The Refund Intercept Program

    10. IRM 3.17.30, SC Data Controls

    11. IRM 3.17.63, Redesign Revenue Accounting Control System

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

    13. IRM 3.17.80, Working and Monitoring Category D, Erroneous Refund Cases in Accounting Operations

    14. IRM 3.17.243, Miscellaneous Accounting

    15. IRM 3.24.7, Delinquent Accounts

    16. IRM 13.1, Taxpayer Advocate Case Procedures

    17. IRM 11.3, Disclosure Of Official Information

    18. IRM 20.1, Penalty Handbook

    19. IRM 20.2, Interest

    20. IRM 21.1, Accounts Management and Compliance Services Operations

    21. IRM 21.2, Systems and Research Programs

    22. IRM 21.3, Taxpayer Contacts

    23. IRM 21.4, Refund Inquiries

    24. IRM 21.4.4, Manual Refunds

    25. IRM 21.4.5, Erroneous Refunds

    26. IRM 21.4.6, Refund Offset

    27. IRM 21.5, Account Resolution

    28. IRM 21.6, Individual Tax Returns

    29. IRM 21.7, Business Tax Return and Non-Master File Accounts

    30. IRM 21.10, Quality Assurance

    31. IRM 25.6, Statute of Limitations

  2. The Internal Revenue Manual Index, Document 10988, Catalog Number 27371W, provides the revision date, catalog number and IRM references.

3.17.79.1.4  (01-01-2014)
Glossary of Terms

  1. Abatements: A reduction of an assessment of tax, penalty, or interest.

  2. Agency Location Code (ALC): The ALC is a number assigned by Treasury's Bureau of Fiscal Services designating the agency identification to account for government payments. The ALC identifies the issuing agency and allows recordation for Treasury of the return of credits and debits for accounting transactions. For example:

    Submission Processing Center (SPC) Agency Location Code (ALC)
    Austin 20091800
    Cincinnati 20091700
    Fresno 20098900
    Kansas City 20090900
    Ogden 20092900

  3. Assessment: The recordation of a tax liability determined by either the Service or the taxpayer.

  4. Automated Non-Master File (ANMF): Subsidiary records of taxpayer accounts established and maintained on Manual Accounting Replacement System (MARS) for the liability period.

  5. Automated Non-Master File (ANMF) Transcript: A NMF record of all transactions, related to a tax liability, maintained at the Cincinnati Submission Processing Center.

  6. Customer Account Data Engine (CADE): Beginning in January 2012 with CADE 2 deployment, IMF will process and post individual taxpayer 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 re-sequence until the end of the cycle and reflect as a weekly account.

    • With the implementation of CADE 2, the cycle cut off for the week’s processing is Wednesday night for all Master Files. This allows all Master Files (IMF-Individual Master File, BMF-Business Master File, etc.) to be processed by IDRS (Individual Data Retrieval System) weekend analysis one week earlier.

    • IMF Daily posted transactions will be updated and available for viewing on CFOL (Corporate Files Online) by 6 a.m. the next business day after IMF processing and available on IDRS by 6 a.m. the following business day providing posted information sooner.

  7. Checks:

    1. Recertification - Effective October 26, 1986, the Department of the Treasury (BFS) re-delegated, to administrative agencies full responsibility for certifying replacement payments to payees who claim non-receipt, lost, stolen, mutilated or destroyed checks. This procedure is known as Recertification. IRS authorizes the re-issuance of a check under Recertification.

    2. Settlement Check - A check issued by BFS Check Claims Branch prior to October 26, 1986, and more recently in 2002 and 2003 when non-receipt claims were determined to be forged. Settlement checks are issued by BFS from the Check Forgery Insurance Fund to replace an original check cashed by an individual other than the taxpayer, the payee. The check number and symbol of the settlement check are different from those on the original check. The recent settlement checks overlay the original check issue symbol and serial requiring in-depth research by BFS for resolving cases.

    3. Substitute Check - A check issued by Check Claims Group (CCG) to replace an original check still outstanding. Substitute checks were also referred to as duplicate checks and were issued from the Washington RFC. The substitute check has the same check number and symbol of the original. Substitute checks are not issued under Recertification.

    4. Recertified Check - A check certified for reissuance by IRS, after October 26, 1986, to replace an original check still outstanding. The result of a non-receipt claim submitted by tape input or Form 1184, Unavailable Check Cancellation.

    5. Altered Check - A check that is changed (defaced) before cashing (for example, the refund amount printed on the check is changed).

    6. Unavailable Check Cancellation Credit - Credit returned to the ALC from a non-receipt claim and it is determined the check is still outstanding. These credits are identified by a Reason for Return Code "9."

    7. Available Check Cancellation Credit (ACC)- Credit(s) returned to the Service from an intercepted refund check (Reason for Return Code "1" ), undelivered refund check (Reason for Return Code "2" ) or other reasons not identified above (Reason for Return Code "3" ).

    8. Unavailable Check Cancellation (UCC)- credits are returned to the Service via Form 1098 cancellations from a non-receipt claim and it is determined the check is still outstanding. These credits are identified by a Reason for Return Code "9"

  8. Erroneous refunds: Category A1, A2, B and C are assessable refunds under the Internal Revenue Code (IRC). These erroneous refunds require recalculation of the tax liability, including refundable credits and non-refundable credits. Category A1 and A2 refunds are sent to Examination for deficiency processing. Category B and C can be assessed by any IRS function. Unassessed erroneous refunds (formerly Non-Rebate): are unassessable refunds that can not be recovered by tax assessment procedures under the IRC. These refunds are currently categorized as "Category D" erroneous refunds. These funds can only be recovered by limited actions performed by Submission Processing. See IRM 21.4.5, Erroneous Refunds, for erroneous refund types, categories and recovery processing procedures.

  9. Bureau of Fiscal Services (BFS): BFS is within the Department of the Treasury. the Bureau of Fiscal Services (BFS) issue and process claims on most U.S. Government checks, including all IRS tax refund checks. Because of the role of BFS in issuing and cancelling refund checks, most Refund Activity processing involves a great deal of interaction with BFS. Accounting documentation via Form 1098 and Form 1081 for credits and debits are transmitted by BFS to ECC Submission Processing Centers download Accounting disbursement and cancellation credits and debit documentation via the ECC, Control-D.

  10. Financial Processing Division: formerly Adjudication Division, a division of BFS, processes non-receipt claims (from Form 3911 and CC CHKCL) Form FMS 1133, to determine if the taxpayer benefited from the proceeds of the refund. If the taxpayer did not benefit from the refund, BFS authorizes IRS to settle with the taxpayer (issue another refund). Administrative action is taken by BFS through the banking system to recover funds from the bank that are paid over forged endorsements.

  11. Heads of Office: the management official who presides over a particular Business Operating Division; e.g., Area Director, Field Director, Commissioner, Assistant Commissioner, or other functional equivalents at the Area, National levels. Only those individuals would be accountable for any necessary corrective actions, when errors occur in processing cases. Field offices will provide authorized signatures to appropriate Submission Processing Center, Manual Refund function.

  12. Integrated Data Retrieval System (IDRS): A computer system with the capability to instantaneously retrieve or update stored information in harmony with the Master File of taxpayer accounts. This system is aimed at quick resolution of problems and queries concerning current taxpayer accounts. It furnishes information immediately for IRS personnel in their work assignments.

  13. Integrated Submission and Remittance Processing (ISRP): is used for inputting document transactions and remittances.

  14. Journalization: The process of debiting and crediting General Ledger accounts. Every tax transaction involving money must be journalized to maintain account control.

  15. Julian Date: A system of numbering the days of the year from 001 through 365 (or 366). The 6th, 7th, and 8th digits of the DLN are the Julian date.

  16. Limited Payability (LP): On October 1, 1989, the Competitive Equality Banking Act of 1987, changed many aspects of the law relating to banking and refund processing. The portions of the law affecting refunds are commonly referred to as "Limited Payability" . There are three primary ways the Limited Payability law affects IRS tax refunds:

    1. U.S. Treasury checks (including all IRS tax refund checks) are negotiable for one year from the date of issuance or one year from the effective date of the new law, for those checks issued on or after October 1, 1989. BFS returns LP credits to the agency that authorized issuance of the check and is similar to returning credits on check claims when the check is outstanding (Status 32). No credits are returned on canceled checks issued before October 1, 1989.

    2. Claims "on account of a Treasury check" must be presented to IRS for tax refund checks within one year from the date of issuance (or one year from the effective date of the new law) for checks issued before the law took effect. Different procedures apply to these claims. BFS involvement is much more limited than claims made within 1 year.

      Note:

      This provision of the law will not limit the time a taxpayer has to make a non-receipt claim. Because the law does not affect the "underlying obligation" for which a check is issued (for IRS, this obligation is the obligation to refund an overpayment of tax), IRS will process claims made after the one year period.

    3. Reclamation actions by BFS through the banking system to recover funds on forged checks are limited to 1 year (or 1 1/2 years if a timely claim, as described in (2), above, is filed). When BFS cannot recover funds, a credit will not be returned to IRS, even though settlement was authorized. Procedures for handling this situation are included in IRM 21.4, Refund Inquiries.

    4. Limited Payability Cancellation (LPC) Credits are transmitted monthly, provided that an LPC occurred. Credits originate from BFS to ECC. Cancellation data generates a TC 740 to the Master File via Form 1081 TRACS with block and serial number 66666 and will set an "S" Freeze on the account.

    5. Reclamation (REC) Credits are transmitted monthly, provided an UCC occurred. Credits originate from BFS to ECC. ECC generates a TC 841 to the Master File via Form 1081 TRACS with block and serial 88000 and are the result of a non-receipt claim which secured recovery of funds through the banking system on a forged check. When BFS cannot recover funds, no credit will be returned to IRS, even though BFS authorizes settlement with the taxpayer.

  17. Master File (MF): Subsidiary records of taxpayer accounts established and maintained on magnetic tape at the ECC.

  18. Offer-In-Compromise (OIC): A proposal for settlement of a liability for tax or specific penalties for an amount less than previously assessed (or unassessed).

  19. Payment Over Cancellation (POC): This situation occurs when a second check is issued after an Unavailable Check Cancellation Credit (Form 1185) is returned to IRS via the Form 1081 TRACS Cancellations. This is a result of a non-receipt claim when both the original and second checks are subsequently cashed, creating a debit on the account.

  20. Posting Vouchers: Various procedures require the Deposit Activity to prepare a source document (Posting Voucher), containing the required information for input.

  21. Pre-search: Searching for required data not present on the source document, via IDRS and Automated Collection System (ACS) terminals, prior to the actual deposit of the remittance.

  22. Qualifying Intermediary: Term used for foreign banks to participate in Electronic Federal Tax Payment System (EFTPS).

  23. Reclamation Credit (REC): Credit is returned to the Service following a non-receipt claim ( Form FMS 1133) filed with BFS.

    1. Funds are recovered by BFS from the financial institution when a Treasury check is paid over a forged endorsement.

    2. Credits are returned to IRS Master File via the Treasury Receivable and Accounting Collection System (TRACS) Form 1081 process.

  24. Supporting Documentation: The document(s) that support the refund credit. These documents are viewed by auditors to justify the disbursement of funds.

  25. For additional terms, see Glossary of Terms in Exhibit 3.17.79-1.

3.17.79.1.5  (01-01-2014)
Taxpayer Information, Returns and Refund Documents

  1. Service officials and managers must communicate security standards contained in IRM 1.4.6, Managers Security Handbook, to employees and establish methods to enforce the standards. Employees must take precautions in providing security for the documents, information, and property which they handle in performing official duties.

    1. Any email containing PII must be encrypted (secured).

    2. All shipment of tax returns and return information between Submission Processing, Accounts Management, Compliance Services Operations, the IRS National Office, IRS field areas and territories, the Enterprise Computing Centers, Bureau of Fiscal Services or other government agencies and jurisdictions are documented, accomplished and accounted for as required by IRM 1.4.6, Managers Security Handbook.

  2. All IRS employees must consider ethical issues when following these procedures to prevent fraud, abuse and waste.

3.17.79.1.6  (01-01-2014)
Sequence of Refund Records

  1. The Enterprise Computing Center (ECC) generates Individual Master File (IMF) and Business Master File (BMF) refund records in ZIP Code sequence within the two-digit center code. Direct deposits are in Bank Account/Routing Transit Number (RTN)/Service Center order.

  2. The IDRS Generated Refund (IGR) records are in account number, employer identification number (EIN) or social security number (SSN) sequence.

3.17.79.1.7  (01-01-2014)
Authorized Signatures and Delegations of Authority

  1. Do not allow unauthorized persons access to certain posting and sensitive documents requiring authorized signatures between signing and transmission of the SPS Refund Schedule to the BFS.

    1. Submission Processing Director (and/or other supervisory levels) will ensure the integrity of signatures by establishing procedures for signing Form 3753 and/or Form 5792 and appointments/terminations of designated Certifying Officers.

    2. Refer to IRM 3.17.79.1.8, Designating Certifying Officers (CO) and CO Review.

  2. The Submission Processing Director may delegate authority to review and approve a Form 3753 and/or Form 5792 refund request. The approving official cannot be the Certifying Officer.

    Note:

    Certifying Officers are no longer authorized to sign manual refund requests. The Government Accountability Office (GAO) has determined this is a direct conflict of separation of duties.

    1. Employees authorized to approve a manual refund request cannot also have authorization to adjust and/or initiate a manual refund request.

    2. A manual refund authorized official or Certifying Officer, must not have the following sensitive command codes in their IDRS command code profiles: ADC24, ADC34, ADC48, ADD24, ADD48, BNCHG, INCHG, ADJ54, DRT24, FRM34, DRT48, AMCLS, URAPL, URREF, XSAPL, XSREF, RFUND, and REFAP, this list is not all-inclusive. The Taxpayer Identification Number (TIN) of the authorizing official must be provided to the Accounting Operation, Manual Refund function to verify the above information. The TIN information must be provided even when the authorized official does not have IDRS access.

    3. The internal control separation of duties was established by GAO to protect the integrity of government funds. This IDRS Security review is not a new requirement. This automated security review, Automated Command Code Access Control (ACCAC) reduces potential for financial mismanagement. The ACCAC database is maintained by Information Technology (IT), Cyber Security Division.

    4. The Accounting Operation, Unit Security Representatives (USR) will perform IDRS actions per the IRM 10.8.34IDRS Security Controls. See IRM 10.8.34-5, Sensitive Command Code Combinations. ACCAC provides ability to automatically activate, deactivate or bypass Command Code profiles and to limit access for IDRS security profiles.

    5. The ACCAC was developed by IDRS Security with the affected business operating divisions to initiate a standard procedure to ensure that restricted combination sensitive command codes were not in the employee's profiles.

    6. IRM 10.8.34, IDRS Security Controls has been updated to incorporate the requirements for management officials to provide personal information to the Unit Security Representative (USR). The system is designed to update the Restricted Command Code Access Lists for each Center. Employees must protect the integrity of all personal information. Unit Security Representatives are designated to key enter and remove restricted command code access data into and from the database. Standard information and IDRS Security review actions by Unit Security Representatives are found in IRM 10.8.34-5, Sensitive Command Code Combinations.

      Note:

      Manual Refund Authorizers and Certifying Officers must provide TIN information to be included in the Restricted Command Code Access List for each Center. The access list will update the Manual Refund authorizer/Certifying Officer if (s)he has IDRS; and the access list will add the Manual Refund authorizer/Certifying Officer if not an IDRS user.

    7. The Submission Processing, Accounting Operation, Manual Refund function continues to maintain and secure original signatures of officials authorized to approve refund requests per IRM 3.17.79.3.5, Employees Authorized to Sign Requests for Refunds.

  3. The Department of the Treasury, Bureau of Fiscal Services (includes the Bureau of the Public Debt (BPD) and BFS), issues procedures for delegations of authority (Transmittal Letter Part 4 Chapter 1140).

    1. These procedures include instructions for Form FMS 2958, Delegation of Authority. The purpose of this form is to establish the name and title of the individual that is the head of the Federal Agency, and to obtain signature samples from that individual.

    2. Automated Federal Agency enrollment requires Certifying Officers to file and maintain a valid Form FMS 210CO, Signature/Designation for Certifying Officer (Form FMS 210CO) signed by their Delegating Official who must have a current Form FMS 2958 on file. A delay in the receipt of this form (a transmittal memorandum on the appropriate letterhead is acceptable) by BFS will cause a delay in the issuance of refunds. The purpose of Form FMS 210CO is to designate a certifying officer that will sign and have access to certify authorizations.

3.17.79.1.8  (01-01-2014)
Designating Certifying Officers (CO) and CO Review

  1. 31 USC §3528 states a Certifying Officer is held responsible for the existence and correctness of the facts stated on the refund voucher, in the supporting documents, and for the legality of the proposed payments, under the Refund Appropriation fund involved. Certifying Officers will take whatever action they deem appropriate to ensure the vouchers they certify for payment are correct and proper. Periodically, the EOD26 listing may not be run because of mid-year programming changes etc. This may delay IDRS refunds. If this occurs the Certifying Officer should refer to IRC 6611(b) to determine if further steps are required to include any additional interest due the taxpayer in the amount to be refunded.

    1. ECC designates Certifying Officers and certifies refund schedules (via SPS) for generated refunds (TC 846).

    2. Submission Processing Center Directors designate Certifying Officers to certify manual refunds (TC 840). BFS recommends designated Certifying Officers are management level or equivalent within an accounting function or data processing organization. The supporting documents for these disbursements are SPS Refund Schedules, Voucher and Schedule of Payments, or SPS screen print, Form 3753, Form 5792 and related credit (Form 3809, Form 3245) or file source documentation (e.g., cross reference).

    3. Delegations of Authority designating Certifying Officers are submitted to OS:CFO:FM:P, for approval from Submission Processing Centers and ECC.

    4. See IRM 1.2.40.34, Delegation Order 1-41 (formerly DO-28 REV. 11), Designation of Officers and Employees as Authorized Certifying Officers.

  2. Certifying Officers must have a current Form FMS 210CO, Signature/Designation for Certifying Officer, on file and update these designations as-needed.

    1. When personnel changes occur, a new, original Form FMS 210CO for each Certifying Officer, must be submitted to IRS Headquarters Chief Financial Officer, Policy and Business Analysis. All Forms FMS 210CO must be submitted timely to ensure there are no delays processing refund schedules at the beginning of the new Fiscal Year. BFS will return a validation sticker for all newly assigned and renewed Form FMS 210CO. Review site file monthly and take action if necessary to ensure Forms FMS 210CO are valid.

      Note:

      Detail or temporary work assignments exceeding 120 days, Forms FMS 210CO must be revoked.

    2. Section IV, Delegator Signature, use the following: Typed Name: William H. Maglin II; Title: Associate Chief Financial Officer; Agency: Department of the Treasury; Bureau: Internal Revenue Service; Division; Chief Financial Officer OS:CFO:FM:P.

    3. Section VI, Return Address of Delegator, should be the mailing address and telephone number of the respective Submission Processing (SP) Center Director, Manual Refund function, or the area most knowledgeable about the Form FMS 210CO and Form FMS 2958 delegation requirement. The local SP Site preference: may use the return address of the Planning and Analysis or Director Staff.

    4. All Forms FMS 2958 and Forms FMS 210CO will be completed using black ink.

    5. Send Form FMS 2958 and/or Form FMS 210CO in their entirety to the following address:
      Internal Revenue Service
      Attn: Cynthia Carver, OS:CFO:FM:P
      77K Street, NE, 6th Floor
      Washington, DC 20002

    6. CFO, Director, Policy and Business Analysis, maintains all IRS records of Certifying Officer delegations and Form FMS 210CO. These documents must be renewed or revoked every two (2) years. Designees are notified by BFS directly when Certifying Officer delegations are due to expire. All new delegations Form FMS 2958, Form FMS 210CO and revocations are submitted through the Office of the CFO (see above).

      Note:

      If notified by BFS of expiration and there is no change in status for the Certifying Officers listed, prepare a letter over the Director's signature to the Chief Disbursing Officer, Bureau of Fiscal Services. State that the status is unchanged for the following Certifying Officers at the Internal Revenue Service Submission Processing Site or Computing Center. Request that BFS renew the Form FMS 210CO for each name listed. Provide contact name and telephone number. Forward a copy of the letter to CFO (see above) to alert them regarding the status to the Certifying Officers at the Site level.

    7. Forms FMS 210CO are forwarded by the CFO to Bureau of Fiscal Services, Chief Disbursing Officer. Forms FMS 210CO are prepared in duplicate and used for submitting assignments or revocations of each Certifying Officer. The Submission Processing Site address is shown on the transmittal form.

    8. CFO and BFS signs, dates and returns one copy of the Form FMS 210CO to the submitting agency, indicating the Form FMS 210CO was received and entered into the BFS file (either current or revoked). Submit one transmittal form, noting "See attached list," accompanied by a list of Certifying Officers names and the Agency Location Code (ALC) for which they are certifying payments.

    9. Form FMS 210CO must bear the Certifying Officer original signature. The Form FMS 210CO must be signed in black or blue-black nonerasable ink.

    10. BFS will reject the Form FMS 210CO if submitted with facsimile signatures, evidence of corrections, erasures or alterations.

    11. BFS will approve the Form FMS 210CO by returning a validated copy of the Form FMS 210CO. Allow four weeks for BFS to return validated copy to the Site and if not received within this period contact BFS. Maintain validated copy of the Form FMS 210CO in a file accessible for review by internal and external customers.

  3. Due to the high volume of refunds certified, it is impossible for a Certifying Officer to do a complete review of all refunds certified daily.

    1. The Certifying Officer must make monthly inspections to ensure processed refund vouchers conform to prescribed requirements. The CO must perform an unannounced review of processed Master File Form 3753 Manual Refunds. The CO will verify that Accounting, Manual Refund function included required history actions on the taxpayer account (including refund schedule number).

    2. The Certifying Officer will review a sample of source documents and verify that refund vouchers are complete, accurate, and that procedures are being followed.

    3. The Certifying Officer will maintain a record of reviews. It is recommended that a log be kept in addition to the reviews.

      Review must include the following:
      1. Schedule Number(s)

      2. Date

      3. Type of Refunds

      4. Principal and Interest

      5. Number of IDRS items (verify accuracy of line items on the refund document)

        Note:

        Review 5 percent or more of items in schedule.

      6. Form 3753 items require 100 percent review (verify each form against SPS input for accuracy).

      7. Findings (list errors found or annotate comments).

      8. Certifying Officer signature (or initials) and date.

3.17.79.1.9  (01-01-2013)
Data Entry Operators (DEO)

  1. Data entry operators (DEO) are tax examiners that have access to the Secured Payment System (SPS).

    Note:

    DEO(s) will have access to certain command codes that will allow them to perform daily work duties. Ensure a separation of duties exist when a DEO utilizes command code RFUND and access to SPS within the same work day.

  2. Each agency must designate at least one DEO and an alternate to operate SPS. Typically the assignment of DEO(s) will be dependent on work resources.

  3. Due to the sensitivity of the data being passed through SPS, BFS has built SPS to be very secure. Every SPS user at an agency must have:

    • A Public Key Infrastructure (PKI) Credential in order to access the system.

    • Have a token, which will contain the PKI Credential for user authentication and document signing.

    • PC(s) to access SPS that have been configured to read the SPS token.

  4. To gain access to SPS as a Data Entry Operator you must submit the following forms to CFO and they will forward to BFS: All initial forms for employee access or revocations must be submitted to CFO office.

    • Form FMS 210DEO, Designation for SPS Data Entry Operator

    • PD F5487 E, Fiscal Service PKI Certificate Action Request. This form is available on line, see http://fms.treas.gov/sps/forms.html

  5. A Data Entry Operator (DEO) creates a schedule and submits the schedule for certification. Next a Certifying Officer (CO) examines the schedule along with supporting documentation and upon verification, certifies the schedule. This action will result in the schedule being submitted to BFS for payment.

  6. Section 1145 - Designation of SPS Data Entry Operators (Form FMS 210DEO) are individuals delegated authority to create and modify SPS payment requests to Treasury. They have been delegated by a properly authorized Designating Official with a valid Form 2958 on file with BFS. Completion of Form FMS 210DEO is identical to the procedures for completing Form FMS 210CO.

    Note:

    An individual may not be designated as both an SPS Data Entry Operator and Certifying Officer for the same ALC.

  7. A DEO can be removed from SPS by completing Form FMS 210DEO designated sections for "Revocation." Forward completed form to CFO and they will forward to BFS. See IRM 3.17.79.1.8, Designating Certifying Officers (CO) and CO Review.

3.17.79.2  (01-01-2014)
Generated Refunds Standard Form (Form) 1166, Voucher and Schedule of Payments, Secured Payment System (SPS)

  1. These procedures describe the general steps required when Enterprise Computing Center (ECC) prepares and certifies weekly files of Master File generated refunds (TC 846), Voucher and Schedule of Payments via Secure Payment System (SPS). Refund schedules are accompanied by electronic data files transmitted via CONNECT: Direct to the Kansas City, Bureau of Fiscal Services (BFS) or other telecommunication techniques coordinated between the agencies. ECC certifies generated refunds (TC 846) through the SPS. Refer to IRM 3.17.79.2.2, Generated Refunds, Tapes and Schedules below.

  2. Secure Payment System (SPS) is the preferred method to certify refunds. The SPS Dial-up access is the current contingency back-up method when SPS is not available. The Form 1166/SPS voucher method serves as certification and confirmation that the accompanying refunds were issued by the Kansas City, Bureau of Fiscal Services.

3.17.79.2.1  (01-01-2013)
Enterprise Computing Center (ECC) Generated Files

  1. The Enterprise Computing Center (ECC) generates and produces, in prescribed magnetic media output format, weekly schedules of refunds of overpayment balances on BMF and IMF accounts.

  2. The Customer Account Data Engine (CADE) 2 is the modernized system that will replace the existing Individual Master File.

  3. The components of CADE 2, Transition State 1, was deployed in January, 2012. Changes included daily processing for certain individual taxpayers, Center production cycle, new posting cycle, accelerated refunds and notices, and accelerated IDRS posting. Daily Processing, IMF (Individual Master File) processing with the new cycle definition outlined below, but processing daily (daily transactions to daily accounts) with weekly processing occurring on Thursday.

    • New Cycles

    • Center Cycle -Thursday to Wednesday

    • Master File Processing -Friday to Thursday

    • Notice Review Saturday -Monday (8+ days)

    • Unpostables - New available Tuesday; Closing Tuesday

      Note:

      New Cycles are not limited to IMF Sites. BMF (Business Master File) sites will also have the new Center cycle; BMF and EPMF (Employee Plan Master File) will process weekly on Thursday, and Notice Review and Unpostables in the BMF sites will also have a new cycle. The CADE Master File, as it existed from 2004-2011, will be retired.

      Refunds for IMF accounts will be accelerated to provide refunds to taxpayers quicker

    • Direct deposit refunds will be issued in 4 business days from posting

    • Paper check refunds will be issued in 6 business days from posting

    • IMF notices under a $500 tolerance (balance due under $500 or change in tax under $500) will bypass Notice Review Processing System (NRPS) and will be sent directly to Correspondence Processing System (CPS)

    • CADE 2 database

    • Establish the taxpayer account database that will house all individual taxpayer accounts. IMF will process all transactions and settle accounts and will provide data to the CADE 2 database. IMF will remain the system of record for Transition State 1

    • Key programs IDRS and IPM (Integrated Production Model) will receive data from the CADE 2 database

    • Accelerated IDRS/TIF (Taxpayer Information File) Updates - The weekend IDRS/TIF analysis and updates will occur the immediate Saturday after master file processing completes on Thursday. This will result in a faster posting of transactions on IDRS

  4. CC IMFOL/BMFOL definer "E" screen will contain the word "DAILY" in the upper right hand corner to indicate the taxpayer account qualifies for daily processing.

  5. IMF transactions posting timeframes are outlined as follows:

    1. Daily transactions directed to a daily account are expected to post daily with daily processing. Transactions will be viewable using CFOL command codes the second day after Center input. Transactions will be viewable on IDRS command codes the third day after Center input.

    2. Weekly transactions directed to a daily account are expected to post with the weekly processing run on Thursday and may result in the account type changing to Weekly.

    3. Daily and Weekly transactions directed to a Weekly account are expected to post with the weekly processing on Thursday.

      Note:

      For items b and c, transactions will be viewable using CFOL command codes on the Saturday following the Thursday processing run. Transactions will be viewable on IDRS command codes Monday following the Thursday processing run.

    4. Use of the Posting Delay Code on transactions will result in the transaction being held until the weekly processing on Thursday. When the transaction is processed on Thursday and the Posting Delay Code contains a value other than zero, the transaction will continue to re-sequence for the number of cycles equal to the value.

      Note:

      A transaction input with a Posting Delay Code of 1 will be processed on Thursday, and will re-sequence until the following weekly processing day (the following Thursday).

      Note:

      Use of the Posting Delay Code on a daily account with daily transactions may result in delaying the posting of the transactions that would resolve the account.

  6. BMF transaction posting timeframes are outlined as follows:

    1. Transactions will be viewable using CFOL command codes on Saturday following the weekly Master File processing run on Thursday.

    2. Transactions will be viewable as posted transactions using IDRS command codes on Monday following the weekly Master File processing run on Thursday.

      Note:

      With the acceleration of the IDRS weekly analysis being performed the weekend directly after the Master File processing on Thursday, transactions will be posted instead of in pending status on Monday.

  7. IMF cycle posting dates will reflect a format of YYYYCCDD. YYYY will indicate the year. CC will indicate the posting cycle. For IMF transactions, the following values for DD are defined:

    1. 01 = Friday

    2. 02 = Monday

    3. 03 = Tuesday

    4. 04 = Wednesday

    5. 05 = Thursday

      Note:

      BMF cycle posting dates on BMFOL will continue to reflect YYYYCC. YYYY will indicate the year. CC will indicate the posting cycle. BMF cycle posting dates in TXMOD will reflect a format of YYYYCCDD. The DD value will be 08.

  8. With accelerated refund processing, there are conditions under which accounts will not reflect the refund transaction (TC 846) upon settlement of the account. IMF will systemically prevent the refund transaction from generating. IMF will systemically generate the refund transaction (TC 846) when the refund hold expires.

    1. A refund hold will be applied when through Master File processing of the account, the account meets Priority Refund Transcript criteria (Refund, Refund-E, Refund-S, $1M, and $10M). The accounts will reflect a TC 971 AC 805 and a TC 570 with blocking series “55555” indicating the refund hold has been applied. The hold will systemically expire 4 business days after the TC 971 AC 805 date.

    2. A refund hold will be applied when through Master File processing of the account, the account meets criteria to issue CP (Computer Paragraph) 12, 16, 21, or 24. These accounts will be processed during the weekly processing on Thursday. The accounts will reflect a TC 971 AC 804 and a C- freeze. The hold will systemically expire 7 calendar days after the TC 971 AC 804 date.

  9. Due to the accelerated refund processing, BFS will no longer accept NOREF or HAL requests for IMF refunds. Functions that are impacted by the refund holds outlined in (9) will have specific guidelines to address accounts that have the systemic holds instead of using NOREF as Submission Processing has known it pre-January 2012.

  10. For functions that do not have specific requirements to place holds on inventory, the following guidelines are provided for IMF accounts:

    Note:

    BMF/EPMF are not changing to daily processing or accelerating refund schedule issuance. BMF/EPMF accounts can continue to use NOREF per existing guidelines.

    If And Then
    The account has a TC 846 posted   A NOREF request cannot be initiated on an IMF account. Erroneous Refund Procedures should be followed.
    The account has a TC 570 with blocking series “55555” A TC 971 AC 805 is also posted on the module indicating a refund transcript has generated
    1. A TC 570 can be input up to three (3) business days after the systemically generated TC 570 cycle posted date (up to 6:00 p.m. local time) to prevent the refund transaction from generating.

    2. A NOREFP can be input on the third business day after 6:00 p.m. local time or the fourth business day before 9:00 p.m. eastern time Friday-Wednesday (10:00 p.m. eastern time on Thursday) from the systemically generated TC 570 cycle posted date to request IMF reverse the refund and stop the refund information from going to FMS.

    The account has a TC 570 with blocking series "55555" A TC 971 AC 804 is also posted on the module indicating a CP 12, CP 21, or CP 24 has been issued
    1. A TC 570 can be input up through 6:00 p.m. Local time the following Wednesday (6 calendar days after the systemically generated TC 570 cycle posted date to prevent the refund transaction from generating.

    2. A NOREFP can be input on the third business day after 6:00 p.m. local time or the fourth business day before 9:00 p.m. eastern time Friday-Wednesday (10:00 p.m. eastern on Thursday) from the systemically generated TC 570 cycle posted date to request IMF reverse the refund and stop the refund information from going to FMS.

  11. Quality Review is not impacted by CADE 2 daily processing and will operate has it has been pre-January 2012. If the Quality Review command codes have been executed input to place a hold on and employee’s work, the hold will prevent any transactions from being forwarded to the Computing Center for Master File processing, allowing the review period the following day.

3.17.79.2.2  (01-01-2013)
Generated Refunds, Tapes and Schedules

  1. Separate files and refund schedules are produced at ECC as follows:

    1. BMF refunds for each Center (Excluding D.O. 66 and 98).

    2. IMF refunds for each Center (Excluding D.O. 66, 97 and 98).

    3. BMF International refunds for Districts 66 and 98.

    4. IMF International refunds for Districts 66, 97 and 98.

    5. IMF refund/rebate/EIC data for each Center (excluding D.O. 66, 97 and 98).

    6. BMF refund/rebate data for each Center (excluding D.O. 66 and 98).

    7. IMF direct deposit refunds for each Center (excluding D.O. 66, 97 and 98).

    8. BMF direct deposit refunds for International for Districts 66 and 98.

    9. BMF accelerated refunds for each Center (excluding Districts 66 and 98).

    10. BMF accelerated refunds for International for Districts 66 and 98.

    11. IMF direct deposit refunds for Assistant Commissioner (International) for D.O. 66, 97 and 98.

  2. ECC prints and certifies the Voucher and Schedule of Payments, in three parts, for each refund file from the Secure Payment System (SPS). The 23C Assessment Certificate and posting calendars can found in Document 6209 as well as associated IRM's.

3.17.79.3  (01-01-2013)
Processing Requests for Refunds

  1. These procedures describe the various types of requests for refund and the forms and credit source document requirements. These are not refunds generated from the Master File (MF).

  2. Credit source documentation is critical when issuing refunds from the general ledger accounts. Managers must maintain internal control mechanisms to prevent unauthorized disbursements, fraud, abuse and erroneous refunds.

  3. As a general rule, Integrated Data Retrieval System or IDRS/MF generated refunds should be issued whenever possible. When MF generated refunds are not possible because of system limitations, Submission Processing Center Accounting Operations Department employees must certify exception-processing manual refunds.

  4. Initiators of refunds must inform taxpayers that they are still subject to offset by BFS through the Treasury Offset Program (TOP) for past due child support or Federal agency debts owed. Refer to IRM 21.4.6, Refund Offset.

  5. Offset Bypass Indicators (BPI) identify TOP eligibility for BFS. Refer to IRM 21.4.6, Refund Offset, for further information.

3.17.79.3.1  (01-01-2013)
General Ledger Account - Types of Refunds

  1. Refunds from deposit fund, (for example, 4710 Account Offer-in-Compromise (OIC), 4720 Account Seizure, 4730 Account Miscellaneous), Unidentified Remittance, (4620 Account), and refunds of ten million or more, must be initiated on a Form Form 3753 and submitted on Form 1166/Secure Payment System (SPS).

  2. Manual refunds of $10 million dollars or more are manually prepared on paper by the BFS. All other forms of manual refunds, are submitted on Form 1166 and transmitted to BFS via Secure Payment System (SPS) by Certifying Officers.

  3. Submission Processing Center employees and field offices must make every effort to issue IDRS-generated refunds, whenever possible.

  4. All supporting documentation must be attached to the manual refund request.

  5. "Bank Lead" manual refund requests must document all x-reference information in the "Remarks" Section IV of the Form 3753, i.e., TIN, money amount, deposit ticket number, "unapplied refund reversal to be issued to bank" .

  6. "Bank Lead" manual refund requests supporting documentation must include:

    • Copy of current taxpayer account reflecting TC 720 payment

    • Copy of Form 3809, reflecting debit to taxpayer - credit to general ledger account

    • Copy of Bank request for specified funds (email or letter) including: taxpayer information, date of payment, money amount, and copy of listing or check

    • Copy of original Deposit (SF215, with listing or check)

3.17.79.3.2  (10-18-2013)
Processing Manual Refunds

  1. Submission Processing, Accounting Control/Services Operations, receives perfected (complete and signed with supporting documents attached) Form 5792, Request for IDRS Generated Refunds or Form 3753, Manual Refund Posting Voucher. Authorized requests for IDRS or manual refunds are received from various areas. Not all TC 840(s) are for manual refunds; some TC 840(s) are to enable the Master File to release freeze conditions. See Exhibit 3.17.79-3.

  2. Appropriate taxpayer account research must be performed by initiator prior to forwarding the case to Accounting, Manual Refund function. See IRM 21.4.4, Manual Refunds, and IRM 3.17.79.3.3.1, Actions Required Before Requesting Refunds.

  3. Review case to ensure that all pertinent information is attached (e.g., credit source documentation).

    1. If hold codes are not correctly input by initiator, Accounting will reject see IRM 3.17.79.3.2.1. This prevents duplicate refunds.

    2. Taxpayer outstanding balance liabilities or OBL documentation must be attached. If not attached, Accounting will reject see IRM 3.17.79.3.2.1.

    3. Form 5792 /Form 3753 must include specific reasons and appropriate authority as to why this item must be issued as a manual refund.

    4. All Form 5792/Form 3753must include the BOD that is initiating the manual refund.

    5. All Form 5792/Form 3753must have the box checked indicating that an open control base exists. If the box isn't checked, access IDRS to see if the control base has in fact been opened. If the control base has not been opened, reject see IRM 3.17.79.3.2.1.

  4. Supporting documentation does not accompany the Form 5792/Form 3753 to files after the refund is approved. The initiator must indicate the DLN or other cross-reference transaction code or credit source document filing location in the "DLN of return" field of the manual refund posting document.

  5. When a dummy module is used, the DLN of the credit document must be reflected on the account or entered as a history item of the refund module and in the "DLN of return" field of the manual refund posting document.

  6. Various refunds are initiated by Business Operating Divisions not on location of Submission Processing Centers through facsimile requests or scanned transmission. Due to Submission Processing Center consolidation, multiple BOD(s) are now scanning manual refunds to the gaining SP Accounting functions. This method is preferred over faxed documents. The refund documents are scanned to a shared drive that Accounting accesses. Accounting will then retrieve the Form 3753 or Form 5792 from the shared drive and route through normal procedures. Scanned manual refunds are original documents and do not require overnight mailing.

    1. Returns must be signed by the taxpayer; if joint return, by both taxpayers.

    2. Photocopy or facsimile signatures are treated as unsigned, with the following exception: if a taxpayer submits an original signed statement quoting Revenue Ruling 68-500, accept the facsimile signature. The statement should read:
      "I declare, under penalties of perjury, that the facsimile signature appearing on the return is the signature adopted by me to sign the returns filed and that such signature was affixed to the returns at my direction."

    3. Unsigned or improperly signed returns are rejected back to the originator of the refund request.

  7. Appropriate account research must occur prior to issuing manual refunds, including researching for outstanding balances, (e.g., IMFOL, BMFOL, MFTRA, TXMOD, ACTRA, DMF, and ANMF), freeze conditions and Criminal Investigation or Examination (e.g., TC(s) ≡ ≡ ≡ 916, 918, or 810).

  8. If review of the account on IDRS reflects a TC 971 AC 664 indicating a Form 3753 Manual Refund is in process reject see IRM 3.17.79.3.2.1.

    Note:

    Contact may be made with the originator prior to rejecting the request to verify that the second refund is not a duplicate.

  9. If bankruptcy is indicated on Form 3753 or Form 5792, accept the following:

    • A -V or -W freeze code appears on the taxpayer account or there is a pending TC 520.

      Note:

      A TC 520 sets the -W, it is not necessary for a TC 520 to appear on every tax module. Ensure the -W appears on the tax module for refund disbursement.

      and

    • There is no pending TC 521

      or

    • A -V or -W freeze present, and there is a valid reason stated in the remarks section of Form 5792.

      Example:

      (1) case dismissal, but the trustee is requesting for money to be returned as it was sent in error

      Example:

      (2) trustee requests refund of funds sent in error

  10. When working statute year cases, contact the Statute function prior to processing the refund request.

  11. If the refund request is being rejected see IRM 3.17.79.3.2.1. Apply prudent judgment prior to returning cases.

  12. Interest is computed on the overpayment at the appropriate rate from the date of overpayment to the date of the Form 1166 or SPS for normal returns. Refer to IRM 20 for Penalty and Interest instructions.

    Note:

    26 USC 6611(e) cites that no interest is allowed on an overpayment which is refunded within 45 days after the due date of the return or the date the return is filed, whichever is later. Therefore, every effort must be made to ensure payment of the refunds within the interest free period, in order to reduce the amount of interest paid. Manual refunds may be issued in hardship cases, when a refund cannot be generated through Master File due to systemic limitations, and on corporate original settlement returns, and IMF/BMF carryback refunds when the 45 day interest free period is in jeopardy. See IRM 20, Penalty and Interest, for specific information on the interest free period and for interest computation instructions.

  13. Attach a copy of each Form 5792 and/or Form 3753 to the related Form 1166 SPS print, maintained in Accounting.

  14. If the return is in the unpostable section of the Master File, the return record will be nullified in accordance with IRM 3.12.32, Generalized Unpostable Framework (GUF).

  15. If an account shows the literal "CEP" or "LARGE CORP" , followed by a two digit Center Code or File Location Code indicator on IDRS, Master File transcripts, or "BMFOL" , the initiator must indicate in the remarks area of Form 5792 or Form 3753 that the refund was approved by the Technical function. (For example, "Approved By Technical" , "Tech Approved" or "TPR" )

  16. Submission Processing Centers may issue manual refunds for hardship, systemic limitations, Service-caused unnecessary delays, corporate original settlements, and IMF/BMF carry-backs when the 45 day interest free period is in jeopardy.

  17. All SP initiated manual refunds must be controlled for secondary monitoring by the Accounting function. It is the discretion of management to select the team that will work the aged inventory listing (CCA). Each SP Center is required to use a unique team identifier, that will automatically generate all open controls to the weekly aged inventory listing (CCA). This is a secondary monitoring performed by the Accounting function and does not require the use on the EMT tool. Monitoring the Case Control Activity (CCA) list must be performed on a weekly basis. This monitoring process is in addition to the monitoring that is required by the originator(s) of the manual refund request. When the manual refund requests are received, the Accounting function will open a control base using the unique team identifier.

    • When monitoring the Form 5792, ensure no TC 971 AC 664 reflects on the module during the time that it is being monitored. Presence of a TC 971 AC 664 indicates that a Form 3753 Manual Refund is in process. Necessary actions must be initiated to stop the processing of the Form 3753 to prevent an erroneous refund.

  18. Requests for hardship Manual Refunds (typically requested by Taxpayer Advocate Service) are described in IRM 3.17.79.3.3(2) Issuing Hardship Refunds.

  19. Joint Committee Cases per IRC 6405: employees must provide the supporting documentation to the Joint Committee Specialist assigned to the case. See IRM 4.36.4, Joint Committee Specialist Procedures.

3.17.79.3.2.1  (09-27-2013)
Rejecting Manual Refunds

  1. The Submission Processing, Accounting functions are required to reject manual refund requests with errors, daily. (Form 5792 Request for IDRS Generated Refund (IGR) and Form 3753 Manual Refund Posting Voucher)

  2. The "Accounting Operation Manual Refund Reject Feedback" document must be completed for EACH rejected manual refund, including:

    • The command code "RFUNDR" input, Employee IDRS number (Form 5792)

    • The header on BOTH pages

    • Selection of All errors that apply

    • If "Other" is selected the comment box Must be completed

  3. Daily send rejected manual refund document by Secured email. The email subject line Must read as follows: MR Reject (date) Subject Line Example: MR Reject MM-DD-YY

  4. email Each MR Reject to the following:

    1. The “Originator” of the manual refund request

    2. The "Approver" of the manual refund request.

    3. The appropriate business operating division (BOD) designated point of contact (POC) listed below.

      Note:

      W&I;FA;CARE will be a “write in” BOD on the Form 5792/Form 3753, in the “Remarks”. Although, the BOD box will be marked as: W&I: AM, these rejects must be sent to the W&I: FA;CARE, BOD, POC.

      Note:

      All command code “REFAP” errors must "ONLY" be recorded as a Submission Processing error daily and weekly on the "Rejected Manual Refund Report" . A Manual Refund Reject Feedback document should not be completed.

      Note:

      Manual Refund rejects for Philadelphia, SBSE, Only, will be recorded on the Manual Refund Reject Spreadsheet within the "S" drive, Error Spreadsheet folder by Ogden, Submission Processing, Accounting in lieu of the Manual Refund Reject Feedback document email.

  5. Record all manual refund reject errors, by completing the: "Rejected Manual Refund Report" . The report and the reject document were provided to the Accounting function and are available on the Accounting Tax Payment (ATP) Sharepoint site. https://organization.ds.irsnet.gov/sites/SPATPBranch/default.aspx

  6. The Accounting function must complete the report daily. The report will reflect daily and weekly cumulative reject data, for data tracking and trending purposes of manual refund errors. The Accounting function must provide the report to the Headquarters (HQ) analysts, Janet. Bertagnolli@irs.gov and Debra.J.Scott@irs.gov weekly, by close of business COB, each Monday. The email subject line must read as: MR Reject Report WK (ending date) Subject Line Example: MR Reject Report WK MM-DD-YY, this should always be a Friday, date. Maintain All rejected manual refund requests, in the Accounting function for 5 work days from the reject date and then destroy. In the event a BOD requests the documentation prior to day five, provide to them in lieu of destruction.

  7. A dispute of the manual refund reject will be worked by the Accounting function, if it cannot be resolved at the team level, the Planning and Analysis (P&A) analyst should be contacted to assist with resolution. If the P&A analyst is unable to make a determination, HQ would then be contacted by the P&A analyst. If a rejected manual refund request is disputed and resolved within 5 days, this must be updated on the reject data report. If the data is corrected on a previously submitted weekly report, provide a revised report to the HQ analyst. In the event a revised report needs to be provided the email subject line should be: Revised MR Report WK XX-XX-XX

  8. The Accounting HQ analyst will share the report data with all designated BOD, POCs, upon request. This data can be used by the BOD’s to compare data, identify training needs, IRM procedural updates, and any improvements needed to reduce the volume of rejected manual refunds.

    Note:

    This is a manual refund reject data collection report only; it will not reflect manual refund receipts and reject volume. The receipts and reject volume is reflected on the weekly, production report (MMRHQ). This process will allow consistency in the manual refund reject process and enable tracking and trending analysis of manual refund errors by each BOD.

  9. Manual Refund Rejects, Designated BOD Point of Contacts

    BOD Point of Contact
    SBSE Mary.B.McLeish@irs.gov
    Cheryl.A.Casey@irs.gov
    TAS James.C.Blakey@irs.gov
    Beccy.Howard@irs.gov
    TEGE JaLynne.K.Archibald@irs.gov
    W&I AM *W&I CAS:AM:BODPOC:MANREF
    W&I SP Janet.Bertagnolli@irs.gov
    Debra.J.Scott@irs.gov
    W&I Compliance Kathy.K.Cooper@irs.gov
    Mickie.Wright@irs.gov
    W&I RICS MaryJane.Lavoie@irs.gov
    Cynthia.L.Harrison@irs.gov
    W&I FA;CARE Michelle.R.Jones.irs.gov (note: verify email is to Michelle R in Atlanta, GA) Virginia.A.Miller@irs.govPortia.M.Jones@irs.gov
    Appeals Lois.Mauriello@irs.gov

3.17.79.3.3  (10-18-2013)
Issuing Hardship Refunds

  1. The Certifying Officer, in accordance with 31 USC §3528, is accountable for refunds certified for payment and has the right of review as prescribed in IRM 3.17.79.1.7, Authorized Signatures and Delegations of Authority. The refund and Certifying Officer review is performed the next day.

  2. Taxpayer Advocate Service (TAS) refund requests will be received as hardships. Manual refund cases received as either a paper check (Form 5792) or direct deposit (Form 3753) must be complete and contain all required supporting documentation (including 3rd party verification or a signed statement from the Local Tax Advocate (LTA)) in order for TAS to initiate. In addition to following IRM 21.4.4, Manual Refunds, provide the following as appropriate to substantiate ACH/Direct Deposit (DD) manual refunds:

    1. Proof of economic hardship to support issuing an ACH/DD manual refund.

    2. Proof from bank that savings or checking account exists and it is the account of the taxpayer or a voided check. Use discretion when taxpayer accounts are Married Filing Joint (MFJ).

      Note:

      Accounting will issue ACH/DD refunds to a savings or checking bank account that is listed in one of the Married Filing Joint (MFJ) taxpayers ONLY when an injured spouse claim has been filed (copy attached). The name on the bank account MUST match the name of the taxpayer identified as the injured spouse, NO EXCEPTION.

  3. Refunds to be processed in less than 5 days. Hardships refunds are those refunds required based on hardship where the taxpayer needs the refund in less than five (5) days.

    1. These requests are granted under rare and unusual circumstances and must meet certain criteria. See references and actions required provided in IRM 13.1 Taxpayer Advocate Case Procedures

    2. Procedures for immediate processing of hardship refunds should be considered, see reference IRM 3.17.79.3.3(2), Issuing Hardship Refunds

    3. Prepare Form 3753, Manual Refund Posting Voucher.

      Note:

      Refunds of $10 million dollars and over require the Form 3753. See reference IRM 3.17.79.3.6, Manual Refunds $1 Million or More and $10 Million or More.

  4. Refunds to be processed within 5–10 days. When necessary for the urgent issuance of a refund, prepare Form 5792, Request for IDRS Generated Refund. The refund request can be Faxed or scanned to the Submission Processing Center (SPC) Manual Refund function.

    1. The requesting office authorized approving official must sign and have a current signature on file with the SPC Certifying Officer. See reference at IRM 3.17.79.3.5, Employees Authorized to Approve Requests for Refunds.

    2. The Approving Official is responsible for the validity of each refund requested. The request must be made directly to the Manual Refund function.

    3. The request is supported by scanning or faxing the necessary documentation to the Manual Refund function.

      Note:

      The scanned or faxed Form 5792 and Form 3753 will be considered as original documents. It will no longer be necessary for the original forms to be sent via overnight mail to the Accounting function.

    4. These requests are for taxpayers who will suffer significant hardship if their refund is not processed within 5–10 days. Otherwise follow normal procedures if this accelerated time frame is not required.

    5. Do not initiate a manual refund if the case can be cleared through Enterprise Computing Center (ECC) - Martinsburg in 2 cycles.

  5. Prior to issuing manual refunds, initiators must review account information and take actions such as:

    • Determine if the account is subject to offset by Bureau of Fiscal Services Treasury Offset Program (TOP) or other tax obligations. See IRM 21.4.4, Manual Refunds and 21.4.6, Refund Offsets.

    • Use appropriate hold codes or posting delay codes as applicable.

    • Use TC 570 with credit transfers.

    • Enter appropriate computer condition codes (CCC) with an original return.

    • Use IDRS to ensure no other site or employee has issued a duplicate refund (TC 840), TC 971 AC 664, or that a refund has already generated (TC 846). The presence of a TC 971 AC 664 indicates that a Form 3753 is in process. If a generated refund will be issued within two cycles, do not issue a manual refund. It is necessary that prepaid credits claimed by the taxpayer are available for refund and that the taxpayer does not have any outstanding balances. See IRM 21.4.4, Manual Refunds, 21.4.5, Erroneous Refunds and 21.4.6, Refund Offset.

    • Research freeze codes or IDRS control bases assigned to another IRS employee. If accounts are controlled, take no further action to release the freeze or control base without contacting that employee first. See IRM 21.4.4, Manual Refunds.

    • A -U Freeze (Erroneous Refund Freeze) requires contact with the Erroneous Refund function and documentation of approval by the Erroneous Refund function in the remarks section of the Form 5792/Form 3753. Master File displays a TC 844 at times with a TC 700, Document Code 58 in the DLN. These accounts are being monitored by the Erroneous Refund function (SP Accounting Operations) to recover a unassessed erroneous refund. The TC 700 Document Code 58 is input by Accounting to prevent erroneous billing notices and may compensate injured taxpayers from a general ledger account. Transcripts (TRANS 844) generate to the Erroneous Refund function for applying credits that become available on accounts at the controlling SP Center.

    • Review IMFOL/BMFOL. Determine whether a direct deposit was already issued to a bank account.

    • Ensure erroneous refunds are not released during BMF accelerated cycles (generally occurs during the end of May, Cycle XXXX, September and October). Refund intercepts (stopping refunds via IDRS CC NOREF or HAL) are not possible during accelerated cycles.

  6. Accounting employees will report feedback to initiators when their actions cause erroneous refunds to occur. This is to ensure corrective actions are taken by originator's management officials.

  7. Initiators must control and monitor (management must also perform a review of this action) the account until the TC 840 posts. In some cases, particularly with Form 3753, it may take up to four (4) weeks for the TC 840 to post. However, the actual refund check is mailed within 2-3 days of initiating and certifying the manual refund. If a TC 846 is not present on an IMF account, and the account meets the refund hold criteria, the refund may be able to be stopped with NOREFP. See IRM 3.17.79.2.1 (12). If TC 846 appears, originators must do one of the following:

    Note:

    TC 846 on IMF tax accounts cannot be intercepted. Implement Erroneous Refund procedures immediately.

    1. Contact the Manual Refund function at the Submission Processing Center. Determine whether the manual refund can be stopped.

    2. Input CC NOREF to stop the generated (TC 846) refund. Valid for BMF tax accounts only.

    3. Contact the Notice Review function in the appropriate Submission Processing Center to stop the refund.

3.17.79.3.3.1  (02-25-2013)
Actions Required of Initiators Before Requesting Refunds

  1. Initiators of manual refunds must always:

    1. Secure supporting documentation to show (1) the taxpayer is entitled to the amount claimed and (2) the taxpayer has not previously received the refund amount.

    2. Research accounts to ensure the refund is not pending on Master File (PN TC 846 or TC 840).

      Note:

      Ensure a Refund Hold has not been applied to the account resulting in delay of the TC 846 generation. Refer to IRM 3.17.79.2.1(10) for information regarding refund hold.

      With accelerated refund processing, there are conditions under which accounts will not reflect the refund transaction (TC 846) upon settlement of the account. IMF will systemically prevent the refund transaction from generating. IMF will systemically generate the refund transaction (TC 846) when the refund hold expires.

      • A refund hold will be applied through Master File processing of the account, the account meets Priority Refund Transcript criteria (Refund, Refund-E, Refund-S, $1M, and $10M). The accounts will reflect a TC 971 AC 805 and a TC 570 with blocking series “55555” which indicates the refund hold has been applied. The hold will systemically expire 4 business days after the TC 971 AC 805 date.

      • A refund hold will be applied when through Master File processing of the account, the account meets criteria to issue CP 12, 16, 21, or 24. These accounts will be processed during the weekly processing on Thursday. The accounts will reflect a TC 971 AC 804 and a "TC 570" with blocking series "55555" indicating a refund hold has been applied. The hold will systemically expire 7 calendar days after the TC 971 AC 804 date.

    3. Input appropriate hold codes, when necessary. If hold codes are not input by initiator, Accounting will reject the request see IRM 3.17.79.3.2.1.

    4. Verify the presence of the account and ensure sufficient credit is available on the module to issue the refund. Ensure refund is issued from the correct module and account (for example, erroneous credit offsets are moved back to the correct year or taxpayer).

    5. Verify that the taxpayer has no outstanding liabilities. Research account records (MF and IDRS) for all taxpayers and accounts involved. Research IDRS for a TC 130 ("V" Freeze) or MFT 31 indicates obligations on ANMF (Automated Non-Master File). When an outstanding balance liability exists, the amount of the refund is reduced by the amount of the liability (plus accruals). Debit modules must be satisfied before a refund is issued. Offset capability is lost when manual refunds are issued.

      Note:

      Manual refunds marked "Offset Bypass Refund" do not require verification by Accounting to satisfy taxpayer's outstanding tax liabilities. The initiating office and the Accounting function will ensure OBL documentation is attached to the Form 3753/Form 5792. If proper documentation is not attached or if it is not correct, Accounting will reject see IRM 3.17.79.3.2.1.Refer to IRM 21.4.6, Offset Bypass Refund and IRM 3.17.79.3.21, Offset Bypass Refunds Log, for further instructions.

    6. Verify that the Refund Statute Expiration Date (RSED) has not expired. The RSED is the later of 3 years from the Return Due Date (RDD) or 2 years from the payment date.

    7. Research IDRS for the presence of a TC 520, litigation pending ("W" freeze, TC ≡ ≡ ≡ ≡ ≡ TC 916, TC 918 ), "V" , bankruptcy or Refund Scheme (" Z-" or -Z), Criminal Investigation (CI) and Examination (TC 810) involvement and freeze conditions. If CI freeze conditions are present, follow Center direction to refer to the Criminal Investigations Scheme Development Center (CI-SDC). Litigation pending or bankruptcy cases should be reviewed by the Compliance Services function designated for your Center prior to release.

  2. Initiators must:

    1. Provide Submission Processing Center (SPC) Manual Refund function with original signatures (Form 14031, Manual Refund Signature Authorization Form);

    2. Maintain signature lists and provide updates to the Manual Refund function when personnel changes occur (retirement, change in management, etc.;

    3. Research and update IDRS when taking actions; and

    4. Take extreme care to research accounts prior to requesting any manual refund as explained in IRM 21.4.4, Manual Refunds.

    5. Provide supporting documentation and identify the erroneous refund if one should occur per IRM 21.4.5, Erroneous Refunds.

  3. Initiators must ensure all necessary actions are taken to prevent erroneous refunds or notices.

    1. Initiators will take follow-up action, including "stop notice," as necessary. See IRM 21.4.4, Manual Refunds.

    2. Initiators must review for Refund Holds, and pending refund indicators (PN) on IDRS to prevent duplicate/erroneous refunds (TC 840) or generated (TC 846). If there is a TC 846 on the account (IMF only) , a NOREF cannot be input. Processing routines for Form 3753 manual refunds do not allow refunds to be intercepted prior to issuance. These requests should be used only in very rare and unusual circumstances.

    3. Employees will Monitor accounts daily and weekly until the manual refund (TC 840) posts to Master File and the account is in ".00" balance. Employees will use documentation as designated by governing BOD related IRM (Case Control Activity CCA) i.e., The Integrated Automation Technology tool (IAT) guidelines in IRM 21.4., Manual Refunds must be followed for initiating and monitoring manual refunds.

    4. Managers are required to confirm employees are leaving their IDRS Control Bases open after refunds are input and are properly monitoring accounts until refund transactions post through use of the IAT, Erroneous Manual Refund Tool (EMT) guidelines are in IRM 21.4. Also, managers are required to document the review of the monitoring action. Managers will review through use of the IAT, EMT, process.

3.17.79.3.3.2  (01-01-2013)
Manual Refunds for Unprocessed Original Returns

  1. Manual refunds can be issued for unprocessed original returns for both IMF and BMF tax accounts. This subsection provides references for IMF accounts due to TAS historically assisting IMF taxpayers than BMF taxpayers. Any BMF return meeting the criteria will have a manual refund issued prior to the processing of the return.

  2. Accounting will process manual refunds for unprocessed returns, providing supporting documentation is provided by the Input Corrections Operations. Input Corrections function will validate the tax form and generate a screen print as supporting documentation.

  3. In extremely rare and unusual circumstances, the manual refund is based on an unprocessed original return. The taxpayer must provide a completed original Forms 1040, 1040A, or 1040EZ (or Form 1120 series) and all related schedules and information documents. Information documents required are Form 1099 with withholding and Form W-2. To ensure the requested refund amount is correct, review the return for the following:

    1. Verify taxable income.

    2. Verify credits claimed. Estimated tax credit must be verified using IDRS or MFTRA.

    3. Verify the correctness of the mathematics.

    4. Review completeness of the return, including all related schedules.

    5. Presence of the taxpayer's original signature (if joint, both signatures are required).

  4. After the review is completed, continue as follows:

    1. Send a copy of the return with the refund request.

    2. Enter Computer Condition Code (CCC) "O" in red, under the entity section of the return. This identifies a return for which a pre-settlement manual refund was paid and initiates an "X" freeze on the tax module until the TC 840 transaction posts. This action stops a computer-generated or duplicate refund.

    3. Forward the original return for processing to the applicable Submission Processing Center.

  5. Any return hand walked by Wage and Investment Submission Processing liaison for Taxpayer Advocate Service (TAS) as a manual refund should be processed by a Lead Tax Examiner or designated tax examiner using the following procedures:

    1. CCC "O" should be edited on the return. This freezes the refund.

    2. CCC "Y" will send the return to Error Resolution (ERS) for Systemic Validation.

    3. Code and Edit will "X" the Refund line for no transcription.

    4. Continue processing according to Error Resolution procedures.

    5. When EC 360 (Error Code) generates, make a screen print of the Error Code Screen Display and highlight the Computer Generated Refund Amount and attach the print to front of the return with the entity portion of the return visible.

  6. The initiator prepares Form 5792, Request for IDRS Generated Refund, associates the Form 5792 with the documentation required in IRM 3.17.79.3.2(3), Processing Manual Refund and IRM 3.17.79.3.3(3), Issuing Hardship Refunds (TAS) and forward the package for review and approval to the originator's management official.

    1. The Form 5792 must contain sufficient remarks documenting the hardship and the reason for a manual refund (for example, undeliverable refund, RFC has confirmed receipt of refund, authority to release manual refund, etc.).

    2. The Form 5792 must contain the name and telephone number of the person preparing the request.

    3. Accounting will look for the following to be attached to TAS manual refund requests originating from unprocessed tax returns:

      • The first page of Form 1040, 1040A, 1040EZ, etc. to show correct Entity information and official IRS receive date stamp.

      • The systemic validated screen print date stamp.

      • The Form 1040 page with Reject employee initials next to the refund amount.

        Note:

        This will be used only if TAS has an imminent hardship case that does not allow the 5 day wait for the screen print from Rejects. The Planning and Analysis (P&A) analyst assigned the TAS Division duty will walk the return to Rejects for manual validation. The Reject employee will initial Form 1040 next to the refund amount indicating the refund has been validated.

  7. Authorized approving officials review (per the designation required by IRM 3.17.79.3.5, Employees Authorized to Sign Requests for Refunds) and sign the Form 5792 and supporting documentation to attest to the accuracy and completeness, and determine whether the case meets criteria for urgent issuance of a manual refund. Approval of the Form 5792 is authorized by signature submitted formally. This signature must be on record with the Submission Processing Center, Accounting, Manual Refund function. The authorized official signing the Form 5792 is responsible for the validity and accuracy of the refund requests from the employees under their jurisdiction.

  8. Fax or scan the Form 5792 to the Manual Refund function no later than the specified time-frame. Cases faxed after the Submission Processing Center time-frame are processed the following day.

    Note:

    If review discloses the faxed refund document was improper, Accounting will contact the BFS immediately and attempt to intercept the refund. If the refund cannot be intercepted, forward to originator to initiate action to recover the erroneous refund as outlined in IRM 21.4.5, Erroneous Refunds, and IRM 3.17.80, Working and Monitoring Category D, Unassessed Erroneous Refunds in Accounting Operations.

3.17.79.3.4  (01-01-2013)
Manual Refund Report to Headquarters Chief Financial Office (CFO) - Weekly

  1. Submission Processing Centers prepare a "Report of Manual Refunds" scheduled during the current week and provide this report to the Headquarters CFO during the entire calendar year. Manual refunds reported should include IDRS generated refunds, but they do not have to be separated. email identical information to the CFO Office of Revenue Systems, OS:CFO:S:R to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , include in Subject line- Weekly CFO Manual Refund Report From ___________ (Center).

  2. This data is used by CFO, Office of Revenue Systems, to monitor the Refund Appropriations. The Office of Revenue Systems monitors Refund Appropriations to ensure sufficient funds are available in the Treasury for refund disbursements. Please report the following to CFO:

    1. Submission Processing Center Name.

    2. Week Ending (Friday Date).

    3. Manual Refund Amount, Principal: $______.

    4. Manual Refund Amount, Interest: $______.

    Note:

    FAX the weekly reports to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , the Chief Financial Officer (CFO) Headquarters. Address to OS:CFO:R:S, Lynette Lindy, Weiss Russell, and Dianne Wolfe by close of business the following Monday of each week, if email is not available.

3.17.79.3.4.1  (01-01-2013)
Reporting Manual Refund Inventories

  1. Effective January 8, 2010, each Center became responsible for reporting the volume of Manual Refund receipts, utilizing the MISTLE report. All manual refund documents received in the Accounting function must have the Business Operating Division (BOD) indicated.

  2. The refund volumes will be reported according to the initiating BOD. Any manual refunds submitted by Field Assistance will be included in the volume reported for WI-AM.

  3. See IRM 3.30.124, Center Monitoring Reports, for instructions on how the report should be completed.

3.17.79.3.4.2  (01-01-2013)
Reporting of Manual Refunds without Open Control Base

  1. Every manual refund that is rejected due to a missing open control base must be recorded and maintained.

    Note:

    Manual refunds that are being rejected due to OTHER reasons are NOT to be included in this report. (For example if rejected as: Incomplete, inaccurate or no TC 840 pending, DO NOT include in the missing open control report).

  2. Each Accounting site is required to submit a report to the Headquarters Erroneous Refund analysts, by email, Kendall.M.Crosby@irs.gov and Ronnie.Maldonado@irs.gov no later than the 7th business day of the month following the report month (i.e., for the month of January, the report is due by the 7th business day of February).

  3. This report should include the TIN, MFT, Tax Period, the BOD of the initiator, and the Site/Center that generated the refund.

  4. The operation must retain backup information for three months on the cases that are being reported.

    Note:

    Management must review reports before they are forwarded to Headquarters (HQ).

3.17.79.3.4.3  (01-01-2013)
Manual Refund Monthly Monitoring (10 Cases) - Submission Processing

  1. The Manual Refund 10 Case per Month Monitoring will be updated and reported to HQ monthly.

    • Capture and record data on 10 randomly selected manual refund requests (i.e., Form 5792, Request for IDRS Generated Refund or Form 3753, Manual Refund Posting Voucher)

    • Monitor the 10 cases for up to 30 days or the TC 840 posts. Determine if the cases are being monitored either by the manual refund initiator (or Team).

  2. The cases monitored will be listed by Business Operating Division (BOD).

  3. Cases Selected - This volume represents the number of Form 5792 or Form 3753 randomly selected. The total of Cases Selected for all BODs should total 10.

  4. Cases Monitored - This volume represents the total number of manual refund requests monitored by the manual refund initiator (or Team), up to 30 days (or when the TC 840 posted).

  5. Cases Not Monitored - This volume represents the total number of manual refund requests that were not monitored by the manual refund initiator (or Team), up to 30 days (or when the TC 840 posted).

  6. Monitor for another posting of a TC 840 or TC 846 for the same amount of the manual refund, excluding any credit interest. Take corrective action to intercept the duplicate refund if BMF. If shown on an IMF tax account, a NOREF cannot be input and follow Erroneous Refund Procedures (or control case to the originator).

  7. The report should be sent to the Headquarter analysts Kendall.M.Crosby@irs.gov and Ronnie.Maldonado@irs.gov no later than the 7th business day of the following month.

  8. The report, along with all documentation, is to be maintained for a period of no less than three months.

    Note:

    Management must review the reports prior to sending to the HQ analysts.

3.17.79.3.4.4  (02-25-2013)
Managerial Review - Monitoring Requirements

  1. This section refers to the SP secondary monitoring ONLY, managers are required to review the case control activity listing, generated for all SP initiated refunds. (See IRM 3.17.79.3.2(17).

    Note:

    For managerial review requirements for originators of manual refund monitoring See: IRM 21.4.4

  2. The CCA listing is generated when the technician:

    • identifies W&I-SP in the Initiating BOD box

    • establishes an open control base under a unique team identifier. The status code must be "M"

  3. Managers will review this listing weekly. Randomly select a minimum of five per week

  4. Ensure the employee has effectively monitored the posting of the manual refund to prevent duplicate or erroneous refunds.

  5. Each page of the age listing must include the reviewers' actions:

    1. date of review

    2. name of the employee monitoring

    3. annotations, such as:

      • TC 840 posted, No E/R

      • ER (if erroneous refund issued) and corrective actions taken to resolve

      • ADJ pending

      • Control activity updated to "840Posted"

      • Closed control base, if TC 840 posted

      Note:

      The person conducting managerial review cannot be the same person who documented the refund transactions above.

    4. Indicate managerial review beside each case reviewed along with his / her initials and date on the Manual Refund listing.

    5. Hold each CCA listing for a period of three months.

    6. Destroy the Manual Refund listing as classified waste after the three month retention period.

3.17.79.3.5  (07-31-2013)
Employees Authorized to Sign Requests for Refunds

  1. Management appoints and delegates authority to specific persons to sign and authorize manual refunds (Form 3753 and Form 5792). This is to maintain the internal controls standards required by GAO with respect to disbursements.

    1. Employees authorized to sign manual refunds must not be the same employee authorized to adjust and/or initiate a request for manual refund on any one refund transaction for a taxpayers account.

    2. Also see IRM 3.17.79.1.7, Authorized Signatures and Delegations of Authority.

  2. All Heads of Office (Area, Field Directors, LTA, NTA, etc.) must submit a Form 14031 Manual Refund Signature Authorization to Submission Processing Center, Accounting, Manual Refund function (Refund Disbursement Team) delegating those persons authorized to sign and approve manual refunds. Persons delegated to sign manual refunds at multiple site locations, must submit a Form 14031 to each Center to gain access. Form 14031 must contain the listing of the authorized approving official with accompanying original signatures in Blue Ink. Submit the Form 14031, to the Submission Processing Center, Accounting, Manual Refund function located at the servicing Center. (See below)

    Austin Internal Revenue Service
    Accounting Manual Refund Function
    3651 S. Interregional HWY 35 Stop 6263
    Austin, TX 78741
    FAX: 512-460-7640
    Contact: 512-460-7660
    Cincinnati Internal Revenue Service
    Accounting Manual Refund Function
    201 West Rivercenter Blvd. Stop 2107
    Covington, KY 41011
    FAX: 859-669-3666
    Contact: 859-669-5411
    Fresno Internal Revenue Service
    Accounting Manual Refund Function
    5045 E. Butler Ave Stop 37103
    Fresno, CA 93727
    FAX: 559-454-6317
    Contact: 559-454-6194
    Kansas City Internal Revenue Service
    Accounting Manual Refund Function
    333 W. Pershing Rd Stop 6250 P-6
    Kansas City, MO 64108
    FAX: 816-292-6206
    Contact: 816–325–3741
    Ogden Internal Revenue Service
    Accounting Manual Refund Function
    1973 N. Rulon White Blvd.
    Ogden, UT 84404
    FAX: 801-620-7609 or 801-620-7905
    Contact: 801-620-7373
     

  3. The Accounting Operation received date must be stamped in Section IV (Accounting use Only box) on the Form 14031, when received in the Manual Refund function as indicated on the Form 14031 instructions. The Manual Refund function must then 100 percent review the Form 14031 for accuracy and completeness to ensure all required data is present. When the 100 percent review is complete, forward the Form 14031 to the Unit Security Representative (USR) to add the Manual Refund Authorizer to the IDRS command code restriction, via CC RSTRK(M). As a result the Manual Refund Authorizer will reflect on the IDRS, RSTRK(M) listing. This action should be performed within 24-48 hours of the Accounting Operation received date. The USR must then notate the date this action was taken in Section IV (Accounting use Only box) on the Form 14031, as indicated on the Form 14031 instructions. If any Form 14031 is inaccurate or incomplete Accounting must reject and return the Form 14031 to the originator. If the Form 14031 is rejected a new Form 14031 must be submitted. Effective August 2012, no modifications are allowed on the Form 14031 (i.e., edits, strike through, white out) and the authorized approving official signature date (Form 14031, section II) must be before the delegating official (Head of Office) signature date (Form 14031, section III).

  4. If personnel changes occur, the Head of Office must notify Accounting within 24–48 hours. In the absence of the Head of Office, the authorized approving official will immediately advise the Manual Refund function to update the list with the deletion or additional name, original signature and effective date. The Authorized Approving Official in Section II of the Form 14031 must be a management official. (Non Bargaining Employee) Section II is authorizing the REQUEST for a manual refund.

  5. Per Delegation Order 3-1 (formerly DO-40), the Manual Refund Signature Authorization form Section III, must contain the signature of the Head of Office (Area, Field Directors, LTA, NTA, etc.) of the requesting office. This authorization cannot be re-delegated. See IRM 1.2.42.2 for Delegation Order 3-1, which gives authority to approve DISBURSEMENT of funds.

    Note:

    Form10247, Designation to Act is valid in the absence of the Director or equivalent. A completed Form 10247 must be submitted with EACH Form 14031 Manual Refund Signature Authorization, when Section III of the Form 14031 is signed by a designated official. The Form 10247 Designation to Act must be completed in its entirety and reflect a designation date prior to the Form 14031 signature date in Section III. Reject all Form 14031 along with Form 10247 with incomplete or inaccurate information.

    Note:

    Any Director or equivalent or Delegation to Act in the absence of the Director or equivalent in Section III of the Form 14031, CANNOT be a manual refund authorizer in Section II on ANY Form 14031.

  6. All SPC, Accounting Operation will solicit each Head of Office by email, to verify that each authorizer of Manual Refunds is actively approving or signing manual refunds. This action will be performed on a quarterly basis beginning January 2012.

    • The Accounting Refund function will create a spreadsheet (PDF format) listing the Head of Office and the list of employees delegated to authorize manual refund requests.

    • Quarterly create an email for distribution to each Head of Office.

    • Quarterly request each Head of Office to validate employees on the current authorization list are and will continue to be acting as a manual refund authorizer, include "From and To "dates indicated as follows for the quarter relevant to the email validation request.

    • Email request for validation issued no later than November 30, requesting validation for the first quarter dates should reflect as: From: January 01, XXXX=(year) To: March 31, XXXX

    • Email request for validation issued no later than February 28, validation for the second quarter dates should reflect as: From: April 01, XXXX To: June 30, XXXX

    • Email request for validation issued no later than May 31, validation for the third quarter dates should reflect as: From: July 01, XXXX To: September 30, XXXX

    • Email request for validation issued no later than August 31, validation for the fourth quarter dates should reflect as: From: October 01, XXXX To: December 31, XXXX

  7. The quarterly Head of Office email validation request should include the following statements: If removal of an Authorized Approving Official is requested, they will be removed within 24-48 hours of receipt of the request. If you are designated as an "Acting" official please include a scanned copy of your Form 10247 Delegation to Act with your validation response.

  8. All quarterly Head of Office validations should be confirmed by email with the Head of Office digital signature reflected on the PDF listing provided to each originating SPC, Accounting Operation that initiated the request. The Accounting Operation will maintain the quarterly email validations in a file, consisting of the original email Head of Office validation request, the digitally signed Head of Office validation list, along with the Head of Office email validation response. This file is to be maintained for two years from the quarterly validation date and will be made available for review by internal and external stakeholders, to ensure quarterly validation is complete.

    Note:

    Form 10247 Designation to Act is valid in the absence of the Director or equivalent. If the Head of Office reflects as a designated official (Acting) the Form 10247 Designation to Act must be received with the email validation, completed in its entirety and reflect a designation date prior to the quarterly digital signature date. If the Form 10247 is applicable and not received with the quarterly validation send a follow-up email requesting one using the following statement: The attached listing reflects your Head of Office signature in a designated official capacity (Acting). Please provide a scanned copy of your Form 10247 Designation to Act, no later than the Beginning of Business (enter last date of current quarter here) or all Forms 14031 Manual Refund Signature Authorization reflected on the attached list will be removed and the Authorized Approvers on the attached list will no longer be valid as of ( enter first day of quarterly validation request here), If the Form 14031 is removed, we will not accept Manual Refund Form 5792/Form 3753 as of (enter first day of quarterly validation request here) with any signatures reflected on the attached list. A new Form 14031 will need to be submitted if we do not receive your Form 10247 as requested.

  9. The email validation confirmation must be received by the SPC, Accounting Operation by the beginning of business, 3 work days prior to the beginning of the quarter reflected on the email validation request. This will allow for any follow up if validation was not received timely. If validation is not received by beginning of business 3 work days prior to the beginning of the quarter reflected on the email validation, send a follow up email with the following statement: An email request was previously sent to your office on (enter date of email), for verification and validation of all Authorized Approvers of Manual Refund Form 5792 and/or Form 3753. We have not received your validation reply. If your validation of the attached list of Authorized Approvers of Manual Refunds is not received in our office, via email reply containing your digital signature on the PDF file by the Beginning of Business (enter last date of current quarter here) the Form 14031 Manual Refund Signature Authorization Form will be removed and the Authorized Approvers on the attached list will no longer be valid as of (enter first day of quarterly validation request here), If the Form 14031 is removed, we will not accept Manual Refund Form 5792/Form 3753 as of (enter first day of quarterly validation request here) with any signatures reflected on the attached list. A new Form 14031 will need to be submitted if we do not receive your validation as stated above.

  10. The Manual Refund function maintains a Form 14031 file of all employees authorized to approve refunds. This file will contain the following information, which is included on the Form 14031, Manual Refund Signature Authorization Form:

    1. Employee/manager name

    2. Title/position

    3. Email address

    4. Mailing address

    5. Telephone number

    6. Business Operating Division (i.e., W&I, SB/SE, TAS, Appeals, etc.)

    7. Site, Business Operating Divisions (BOD) or field office organization

    8. Authorizer SSN and SEID

      Note:

      The SSN of the designated/delegated employee must be included on the Form 14031 or under separate cover. Integrity of internal controls are enforced.

    9. Pseudonym, if a pseudonym is reflected on the Form 14031, approved documentation MUST be attached upon receipt of the Form 14031. Approved documentation must be the original approval document to use a pseudonym or an email validation from the Office of Privacy, stating the persons legal name XXXXX approved to use pseudomym name XXXXX as of date XXXXX).

    10. Signature of designated/delegated employees in Section II of the Form 14031 must be signed in blue ink.

      Note:

      Printed name and signature in Section II of Form 14031 must match. The printed name and signature on the Form 14031 must match the precise printed name and signature on the refund Form 5792 or Form 3753 (i.e., Jane A Doe, printed name and signature, must include middle initial (precise).

    11. Statement certifying that IDRS Combination Sensitive Command Codes are no longer authorized for the employee listed to sign requests or certify refunds is referenced in IRM 3.17.79, Authorized Signatures and Delegations of Authority and IRM 10.8.34 IDRS Security Controls.

      Note:

      Site functions are responsible to remove any IDRS Combination Sensitive Command Codes for authorized approvers prior to submitting Form 14031, to the Accounting function. The Accounting Operation, Unit Security Representative (USR) is responsible to add the manual refund approver to the IDRS Manual Refund Restriction list, by input of CC RSTRK (M) (Manual Refund Restriction via IDRS), after completion of the Form 14031, is 100% reviewed for accuracy and completeness. The Accounting Operation, USR is also responsible to input IDRS restrictions for authorized Certifying Officers. All Certifying Officers should be input to the CC:RSTRK (M) listing.

    12. Date of the delegating managers (Head of Office) signature

    13. Date of receipt by the Manual Refund function

    14. Printed name and title of the delegating manager (Head of Office)

    15. Signature of delegating manager (Head of Office). Digital signatures are accepted in this field

  11. The Manual Refund function will also maintain the Form 14031 repository file, on the Submission Processing, Accounting and Tax Payment Branch (SP ATP Branch), Sharepoint site. https://organization.ds.irsnet.gov/sites/SPATPBranch/default.aspx

    1. The Sharepoint site is only accessible by Submission Processing, designated personnel. Access Permissions Request must include employee name with corresponding SEID, along with the designated option of either "Read Only" or "Contribute" indicated. Access Permissions must be requested by a management official and submitted by email to: Debra.J.Scott@irs.gov and Janet.Bertagnolli@irs.gov

    2. The Form 14031, repository file instructions are located and accessible on the Sharepoint site. https://organization.ds.irsnet.gov/sites/SPATPBranch/default.aspx All original Forms 14031 must be scanned to the Sharepoint repository file upon acceptance in the Accounting function.

      Note:

      The Sharepoint repository file should reflect the same information as the hardcopy maintained in Accounting. No modifications are allowed on the Form 14031, see para (3) above

      .

    3. Accessing the Share Point site, Form 14031 repository file, allows electronic verification of the manual refund approving official signature. All paper Forms 14031, will be maintained and secured at each site and should be used for contingency purposes. When a Form 14031 is removed from the active approving official file, all inactive Forms 14031 will be maintained and secured at each site for two years from the inactive date.

    4. Effective October 1, 2012, a quarterly validation of Access Permissions to the Sharepoint site, Form 14031 repository file, will be requested by Headquarters via email, to the Accounting function, management official.

  12. Refund requests originate in all Sites, Areas, Territories or other field offices. It is the responsibility of the Directors and Heads of Office (including National Directors of Appeals and Taxpayer Advocate Service), of the requesting office, to establish and enforce internal controls. Please see IRM 1.4.6.3(6), Responsibilities of Service Officials Managers and Employees, which describes how to maintain effective controls to prevent fraud, waste or abuse of Government resources and mismanagement of Service programs. This is also known as Separation of Duties. This requirement includes formality to delegate authority to appoint management officials authorized to sign manual refunds (Form 3753 Manual Refund Posting Voucher and Form 5792 IDRS Generated Refund (IGR)). It is the responsibility of Directors and Heads of Office (including the National Directors of Appeals and Taxpayer Advocate Service) to update lists of employees authorized to approve refund requests when personnel changes occur. Failure to do so may jeopardize or delay approval and issuance of requests for manual refunds by Submission Processing Accounting Operations.

    1. When the employee's authorization is revoked, the name must be withdrawn from the signature list in the Manual Refund Function.

    2. Form 14031 must be submitted to and accepted by the Manual Refund function when adding new employees prior to their approving requests for manual refunds.

    3. Heads of Office Management Officials must update signature lists within 24-48 hours, when personnel changes occur. The Manual Refund function solicits quarterly from all Directors or Heads of Office located in their processing jurisdiction to purge the list of employees no longer authorized. This solicitation should occur quarterly (refer to dates in item (6) above. A 100 percent review of the RSTRK(M) listing must be performed quarterly by comparing all active Forms 14031 to the RSTRK(M) listing. The RSTRK(M) listing must also reflect all active Certifying Officers with a Form FMS 210CO on file at your site. The quarterly RSTRK(M) review must be completed upon completion of all quarterly Head of Office validations.

    4. The SPC, Accounting Operation, will submit a quarterly memorandum to: Director, Submission Processing: Attn: Headquarter (HQ) analysts for IRM 3.17.79 Janet.Bertagnolli@irs.gov and Debra.J.Scott@irs.gov.This memorandum must state the following: This is to certify completion of the quarterly Head of Office validation of manual refund Approving Officials (Form 14031) and the 100 percent review of the RSTRK(M) listing. Submit the quarterly memorandum certifying completion of the Head of Office quarterly validations and completion of the quarterly 100 percent review of the RSTRK(M) listing no later than January 1, April 1, July 1, October 1.

      Note:

      Any discrepancies identified while performing the 100 percent review of the RSTRK(M) listing must have documentation of findings, all corrective actions taken and maintained with the quarterly Head of Office validation file.

  13. Directors (Appeals and Taxpayer Advocate Service for example) provide guidance to their field offices regarding authorized signatures for the purpose of approving manual refunds.

    1. Directors of Appeals request manual refunds and apply existing criteria, e.g., refunds over $1 million, refunds issued to one spouse, and other systemic limitations.

    2. Initiators of manual refunds in Appeals and Taxpayer Advocate Service must be properly trained and take the same precautions (research, case control and monitor accounts) to prevent duplicate refunds.

    3. All initiators will be held to the same level of management scrutiny and responsibility to maintain internal controls and follow all IRM requirements.

  14. The Manual Refund Function reviews the approving official's signature on the manual refund posting voucher (Form 3753 or Form 5792), before preparing the Secure Payment System (SPS)/Check Payment Schedule (or Form 1166, Voucher and Schedule of Payments).

    1. If the request contains an unauthorized signature, the Manual Refund Function will reject see IRM 3.17.79.3.2.1. However, Submission Processing Center personnel are reminded to please exercise good judgment in the rejection of these cases.

    2. If the refund involves a hardship case, Taxpayer Advocate Service case, or a large refund which will result in the Service paying a large amount of interest, the Certifying Officer will call area involved to resolve signature concern to allow processing of manual refund request.

    3. The receiving Submission Processing Center contacts the Submission Processing Center having jurisdiction over the local area initiating the Form(s) to verify the person who signed the forms is authorized to do so.

    4. If the person is an authorized official, process the refund as outlined above.

    5. If the person is not authorized, reject, see IRM 3.17.79.3.2.1.

    Note:

    The authorized Certifying Officer may not sign the Form 1166, Schedule of Payments nor certify through SPS, if he or she has also signed the request for refund (Form 3753 or Form 5792). Separation of duties and internal control requirements must be considered before authorizing Certifying Officers to approve Form 3753/Form 5792.

  15. A Non-Master File abatement on an Appeals case may take place in a local office, not under the jurisdiction of the Submission Processing Center, where the related account is filed. When this occurs, the local office will route Form 1331 (for abatement), and Form 3753 or Form 5792 (for the refund portion), to the Submission Processing Center maintaining the account. The management official signing the Form 1331, Form 3753 or Form 5792 in the originating or field offices, must be on the list of authorized officials to sign manual refunds. The list of management officials is maintained by the Submission Processing Center.

  16. Non-Master File is centralized to Cincinnati. New assessments and or documents that must be established on NMF should be sent to Cincinnati using the following address:
    Cincinnati Submission Processing Center
    P. O. Box 12267
    Covington, KY 41012

  17. Information regarding the NMF Centralization is available on the Submission Processing Web Site.

  18. Further information is available in IRM 1.4.2, Monitoring and Improving Internal Accounting and Administrative Controls.

3.17.79.3.6  (01-01-2013)
Manual Refunds $1 Million or More and $10 Million or More

  1. Generally, large refunds of one million dollars or more are the result of a Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, or carryback losses. Each Submission Processing Centers (SPC) should make every effort to identify and manually issue these refunds within 45 days.

    Note:

    There is no allowable interest on a Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax since the return has not been filed. If the return has been filed the Form 4466 is rejected.

    Review IRM 21.4.4, Manual Refunds, for the IDRS and other system limitations in the money amount fields due to the data element records and check printing stock at the Kansas City, Bureau of Fiscal Services. IRM 21.4.4, Manual Refunds, provides dollar amount requirements to prepare Form 3753 Manual Refund Posting Voucher, versus the IDRS Generated Refund, Form 5792. Form 5792 may not be appropriate in this situation.

    1. Analysis at Master File, Enterprise Computing Center (ECC) - Martinsburg, reveals an overpayment of $10,000,000.00 or more, principal and interest, the module is frozen from refunding or offset (and sets an -X freeze).

    2. Refund transcripts generate to the respective SPC for expedite account resolution.

    3. Output or Notice Review researches accounts and prepares Form 3753 when large dollar refund transcripts generate. Form 3753 are submitted to Accounting.

    4. The "-X" freeze is released when a TC 840 posts with a dollar amount or if module balance becomes zero or debit. This occurs once the Form 3753 is processed through ISRP to reflect posting of the manual refund issuance (TC 840).

    5. IRM 20.2.4.7.7 Overpayment Interest, Manual Refunds instructs all employees to review manual refunds over $1 million by a interest specialist prior to submitting to Accounting.

    6. IRM 21.4.4.4(6) Preparation of Manual Refund Forms, mandates that manual refunds $1 Million or more and contain credit interest be reviewed by a Technical function. See IRM 21.4.4.4, Preparation of Manual Refund Forms for additional information.

    7. Part 4 IRM provides special handling and procedures for reviewing cases and returns prior to release.

    8. In addition to Compliance's Frivolous Filer Program, the Scheme Detection Center (FDC) uses a multi-functional approach to decrease the number of refunds released that may be questionable. See also IRM 4.19.10.5, Questionable Refunds, and related processing in IRM Part 4, Examination.

  2. Submission Processing Accounting Operations schedules and certifies refund schedules (e.g., via Secure Payment System) to issue refunds of $10 million or more. When a taxpayer is entitled to a refund that totals $10 million or more, the following occurs:

    1. Returns are math verified for accuracy by the Reject function.

    2. A special search determines if the taxpayer has any outstanding MF, Debtor Master File (DMF), or NMF liabilities. If any outstanding liabilities are found, take action to offset available credit.

    3. If a "-L" freeze (AIMS indicator) is present on a module, research the account for the presence of a history item or activity code "MAAS (MMDDYYYY)." This indicates that a "quick assessment" has been requested, and that a new liability may be in the process of posting. If the assessment (TC 300 for other than .00) increase has not posted, contact Examination for the amount of the additional liability. Satisfy this liability prior to issuing a manual refund.

    4. If a -L Freeze and AIMS Status Code is other than 00 through 06 or 08

    5. Refunds that exceed $10 million, prepare Form 3753 Manual Refund Posting Voucher, and forward the complete case file to Accounting.

    6. Prepare SPS or Form 1166. Master File cannot post amounts in excess of $99,999,999.99. However, more importantly, the BFS, check processing equipment cannot process refunds via IDRS in excess of $9,999,999.99 due to check printing and check paper money amount field limits. If refunds exceed this limit, it must be issued as two or more refund checks. See IRM 21.4.4, Manual Refunds.

  3. Accounting reviews the case file for completeness and accuracy. Refer to IRM 3.17.79.4.1, Case Review and Command Code REFAP (Refund Approval).

3.17.79.3.7  (01-01-2013)
$50 Million or $500 Million or Over Refund Reports to Treasury

  1. Treasury and IRS CFO are required to be notified whenever they have a single refund or several refunds with aggregate total of $50 million dollars or more scheduled for payment on any given day.

    1. The Manual Refund Team will provide Treasury a two (2) day notification whenever a single refund or several refunds with an aggregate total of $50 million dollars has been received for processing.

    2. The Manual Refund Team will provide Treasury a five (5) day notification whenever a single refund or several refunds with an aggregate total of $500 million dollars has been received for processing.

    3. Submission Processing Centers will notify Treasury via email when large dollar refunds meet respective thresholds, $50 million dollars or $500 million dollars. Refer to Figure 3.17.79-4 and email document:

    Treasury and IRS Contacts
    Office of the Fiscal Secretary, Office of Fiscal Projections
    • receipts@do.treas.gov

    • Tom.Mosimann@do.treas.gov

    • Braden.Wolvin@do.treas.gov

    • Vincent.Varma@do.treas.gov

    Office of the Assistant Secretary of Treasury, Office of Tax Analysis
    • funds.control@fms.treas.gov

    • Darius.Hall@fms.treas.gov

    • Louis.Smith@fms.treas.gov

    • Delvis.Garcia@fms.treas.gov

    • Shadonna.Broaddus@fms.treas.gov

    • Mary.Rascoe@fms.treas.gov

    Headquarters CFO
    • RACS.HQ@irs.gov

    • Dianne.M.Wolfe@irs.gov

    Submission Processing, Accounting and Tax Payment Branch
    • Janet.Bertagnolli@irs.gov

    • Debra.J.Scott@irs.gov

    Note:

    When Treasury requests Accounting to hold refunds beyond the five (5) day Treasury notification requirement, Headquarters must be notified. Contact HQ Accounting and Deposit Section analysts by telephone and follow up email to:≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  2. This advance reporting requirement is due to Treasury's funds flow monitoring and is sent to the Fiscal Assistant Secretary, Office of Fiscal Projections and the IRS CFO Office of Financial Revenue Systems, OS:CFO:R:S. See also IRM 3.17.79.3.4, Manual Refund Report to Headquarters CFO - Weekly.

  3. Prepare a notification report including the information below (and as shown in the figure below):

    1. ACH, Checks, Principle and Interest

    2. Grand summary of Fedwires to be disbursed (list each individually)

    Figure 3.17.79-1

  4. As outlined in the Treasury Financial Manual (TFM) 42000, the prior 2 or 5 day notification to Treasury will ensure funds are available to cover the refund amounts in the Federal Reserve.

    Note:

    In the event a manual refund is delayed due to the Treasury requirement (failure to notify timely or Treasury will not accept additional disbursements), inform all effected initiators of the delay immediately (Phone contact or email). Only communicate with the initiators whose refunds will not be processed for the date included in the pre-notification memo or email.

  5. At Submission Processing Director's discretion, when manual refunds of $10 million or more are issued, specify the amount and the reason for the refund. Maintain a file for possible future reference.

  6. Prepare and process manual Form 1166/Secure Payment System (SPS) refund schedules as outlined in IRM 3.17.79.4.3, Certifying the IDRS Generated Refund (IGR) Tape.

3.17.79.3.8  (01-01-2013)
Refunds Held at Treasury Request

  1. When Treasury requests the Accounting Function to hold refunds, schedule and issue refunds on a first in and first out basis based on Treasury's threshold.

    Note:

    The Forty-five (45) day interest free period should always be taken into consideration when processing and scheduling refunds. See IRM 20.2.4.

3.17.79.3.9  (01-01-2013)
Taxpayer Refund Inquiry

  1. The Accounting Function should not receive taxpayer refund inquiries. In case this happens "DO NOT" give the taxpayer or their representative a specific Refund Schedule Date or use the word "Schedule" in your response. Once it has been determined that the caller is authorized to receive taxpayer information, use the following guidelines:

    If Refund is: Indicate:
    Fedwire Taxpayer should expect their refund within five (5) days.
    Direct Deposit Taxpayer should expect refund within two (2) weeks.
    Paper Check Taxpayer should expect refund within six to eight (6–8) weeks.

3.17.79.3.10  (01-01-2014)
Direct Deposit Tax Refunds

  1. Business and individual taxpayers due refunds of $1 million or more for any single tax year may request a direct deposit refund (e.g., automatic) directly into their bank account. The Automated Clearing House (ACH) Screen in the Secure Payment System (SPS) used by Accounting to certify manual refunds is for use in hardship conditions. This is considered exception-processing, and is a risk of disbursement losses because of human intervention and potential error. However, ACH feature requires unique software screen access by Accounting employees and set-up administered by the Bureau of Fiscal Services SPS software support staff.

  2. Treasury's Financial Organization Master File (FOMF) is designed to administer funds from Kansas City, Bureau of Fiscal Services and the Federal Reserve Board (FRB). Per Headquarters Regional Operations Directorate, Bureau of Fiscal Services (BFS) in June 2003, describes the FOMF as follows:

    1. Enterprise Computing Center (ECC) - Martinsburg, receives the FOMF from BFS via the Federal Reserve Board each month. The FOMF contains all current bank Routing Transit Numbers (RTN) and addresses.

    2. ECC uses this file to validate the RTNs for taxpayers that request an electronic funds transfer (EFT) or direct deposit refund. When BFS receives the IRS EFT refund files, BFS validates the files against the current FOMF.

    3. The Secure Payment System (SPS), includes enhancements that allows RTN verification during the certification of refunds. If the RTN fails validation the refund will be sent back to the IRS for correction or submission as paper check.

  3. The taxpayer must complete the appropriate documents if they desire a direct deposit refund. In rare instances, the Service may opt to use the SPS Screen FEDWIRE Same Day Pay Refund SPS screen.

  4. If the taxpayer's financial institution is not a member of the Federal Reserve System, the funds transfer is processed through a correspondent bank (Foreign or International) that maintains an account at a Federal Reserve Bank. These type of refunds are initiated by the Accounting staff at the Centers that process International work. These types of refunds are considered exception-processing and occur on an as needed basis only.

  5. For example, and for any amount, business taxpayers file Form 8050 Direct Deposit of Corporate Tax Refund (Rev. 12–2009) with their business tax return.

  6. IMF taxpayers requesting a Direct Deposit refund provide the pertinent information when filing Form 1040. The RTN and account information (savings or checking ONLY) is entered directly on the Form 1040 by the taxpayer, and transcribed during data entry; no separate request forms are required.

  7. Federal Agencies or bureaus within Federal Agencies requesting Direct Deposits will provide the governing memorandum or agreement with all the pertinent information needed for the disbursement of the manual refund to be directly deposited.

    Note:

    An alert or official guidance from HQ should ALWAYS preclude special requests among interagency or bureaus, if not contact Headquarter Manual Refunds analyst.

3.17.79.3.10.1  (01-01-2013)
Form 8302, Electronic Deposit of Tax Refund of $1 Million or More

  1. Taxpayers may request a refund of $1 million or more by completing Form 8302 Electronic Deposit of Tax Refund of $1 Million or More.

    1. Form 8302 must accompany the taxpayer's tax return, Form 1045, Form 1139, amended return or claim (other than an original Form 1040, Form 1120 or Form 1120S).

    2. If taxpayers request a direct deposit refund of $1 million or more on an original Form 1120, Form 1120A or Form 1120S, they must file Form 8050 Direct Deposit of Corporate Tax Refund .

  2. Form 8302 was revised in October 2003, to add checking or savings account information, but still does not provide sufficient financial institution data for Accounting to certify as Same Day Pay Refunds. These data elements (financial institution name, address, ABA, name and telephone number of bank officials) are required to certify in the Secure Payment System (SPS) via the Same Day Pay Refund option (e.g., also known as FEDWIRE). See Figure 3.17.79–5 through Figure 3.17.79–7.

    1. As described on the Form 8302, refunds less than $1 million, for any single tax year, will be issued by check. Conditions Resulting in a Refund by Check are listed directly on the Form 8302.

    2. Currently, Same Day Pay Refund (via FEDWIRE) requests continue to be considered on a case-by-case basis. Taxpayers must provide the additional supporting financial institution elements as stated in paragraph (2) above, in order for Accounting to process via the SPS Same Day Pay Refund Screen. The pertinent financial institution information is necessary for the particular screen on SPS used for Same Day Pay Refunds and are not as simple as the checking or savings account check box.

    3. See IRM 21.4.4, Manual Refunds, for the Master File refund amount limitations and IRM 3.17.79.3.6, Manual Refunds $1 Million or More and $10 Million or More.

    Figure 3.17.79-2

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    Figure 3.17.79-3

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    Figure 3.17.79-4

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  3. Taxpayers are not permitted to designate another person to receive their direct deposit refund. Powers of Attorney (POA) authorizing the taxpayer's representatives to receive the refund are disregarded unless the direct deposit is rejected.

  4. Requests for direct deposit refunds that do not meet either the dollar limits (e.g., $1 Million or More) or other requirements as cited on the Form 8302 or Form 8050, will be issued by paper check.

  5. The maximum dollar amount wired in a single payment message is $999,999,999.99. It is not necessary to split the refund payment as outlined in IRM 3.17.79.3.6(2)(e). Treasury and IRS CFO Revenue Systems requires two-day or five-day notification whenever refunds scheduled to be paid on any given day, equals $50 million or more. Immediately prepare a Facsimile report (copy of SPS Screen/Form 1166 is to be included with each transmission) as shown in Figure 3.17.79-4.

  6. Advance notification must be provided to Treasury as outlined in the Treasury Financial Manual (TFM) 42000. Treasury must ensure funds are available to cover the large dollar refunds.

  7. Same Day Pay Refunds must be certified via Secure Payment System (SPS) SDPR Screen. The paper Form 1166 serves as one of the contingency plans in the event the SPS system is not available. (See figures below).

    Figure 3.17.79-5a

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    Figure 3.17.79-5b

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  8. Route the schedules to the Kansas City, Bureau of Fiscal Services (BFS).

    • CSPC - Philadelphia (RFC).

    • KCSPC, ATSPC, AUSPC, FSPC, and OSPC - San Francisco RFC.

  9. Use the following addresses for regular Express Mail service:

    • For the Philadelphia RFC, see Figure 3.17.79-8, below.

    • For the San Francisco RFC, see Figure 3.17.79–9, below.

    Figure 3.17.79-6

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    Figure 3.17.79-7

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  10. Use the addresses below for special mailing service:

    • For the Philadelphia RFC, see Figure 3.17.79–10, below.

    • For the San Francisco RFC, see Figure 3.17.79–11, below.

    Figure 3.17.79-8

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    Figure 3.17.79-9

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  11. Follow procedures outlined in IRM 3.17.79.3.6(2)b, Manual Refunds $1 Million or More and $10 Million or More , research IDRS, prepare Form 3753 Manual Refund Posting Voucher, and forward the case file to Accounting for review.

    1. Verify that a Form 8302 is attached and completed accurately.

    2. All items must contain the applicable information to process the refund.

    3. Currently, no signature is required on the Form 8302 filed requesting a direct deposit refund. Supporting documentation provided by the taxpayer serves as the signature of record (e.g., jurat).

  12. If the taxpayer fails to complete the Form 8302, contact the taxpayer to inform them that the refund will be issued by paper check.

  13. At management discretion and time permitting, the initiator may phone the taxpayer requesting appropriate missing information. At that time, the Form 8302 must document the telephone contact by indicating: your name, your employee identification number, date of call to taxpayer, time of call to taxpayer or person's name and title providing the information, and the specific information missing.

    1. This may require another level of review by management prior to releasing the refund.

    2. Indicate this additional information directly on the bottom of Form 8302, on the lower margin of the page, directly beneath the section entitled: Conditions Resulting in Refund by Check.

  14. Form 3753 received in Accounting Control/Services Operations for a Same Day Pay Refund (SDPR) without supporting or required information and/or attachments, (e.g., no Form 8302 or no supporting financial institution documentation required to certify via SDPR screen, etc.) may delay the refund.

    1. If the taxpayer fails to provide appropriate information, the initiator prepares correspondence confirming to the taxpayer the refund will be issued by paper check rather than by wire transfer or Same Day Pay method.

    2. Accounting (or a designee) will call the initiator to notify the taxpayer of the reason for the delay.

    3. If the taxpayer fails to provide appropriate information, the initiator prepares correspondence informing the taxpayer the refund will be issued by paper check rather than by wire transfer withdiscretion and time permitting, there may be instances when the initiator may telephone the taxpayer requesting the appropriate missing information to complete the certification process.

    Note:

    The Direct Deposit refund information is entered using the Automated Clearing House (ACH) Screen format via the Secure Payment System (SPS). This certification is performed by the Accounting Operations function only.
    FEDWIRE may be used when supporting documentation (e.g., letter or other formal documentation providing pertinent information, name and location of the financial institution, etc.) necessary to certify in SPS via the ACH Same Day Pay Refund (SDPR) screen is provided by the taxpayer. The SDPR feature is primarily reserved for foreign refunds and is left to Submission Processing Center management's discretion.

  15. Prepare the SPS or Form 1166 from the information on the Form 3753 (refund amount) and the Form 8302 as shown previously in IRM 3.17.79.3.10.1.

    Note:

    Please use caution. Due to limited capabilities, FEDLINE cannot identify the taxpayer's name if a wire transfer is rejected. Two or more taxpayers, receiving the same refund amount, will not be included on the same schedule because of this limitation.

3.17.79.3.10.1.1  (01-01-2013)
Federal Wire Transfers (FEDWIRE) and International Payments

  1. Foreign payments to a correspondent bank must include the following on the SDPR screen in SPS:

    1. SWIFT Code, Society for Worldwide Interbank Financial Telecommunication (or ISO, International Organization for Standardization) is the unique identification code of a particular bank. This code will be placed in the Remarks section of the SPS display screen.

      Note:

      SWIFT Codes can be obtained from taxpayer, domestic bank or BFS 816-414-2100.

      SWIFT Code is 8 or 11 characters
      4 characters -bank code (alpha only)
      2 characters -country code (alpha only)
      2 characters -location code (alpha and numeric)
      3 characters -branch code (optional fill-in, alpha and numeric)
      Example: Deutsche Bank, located in Frankfurt Germany
      Enter DEUTDEFF as the SWIFT Code

    2. Payee name

    3. Bank identifier number

    4. Bank name

    5. Bank address

    6. Bank account number

3.17.79.3.10.2  (01-01-2014)
Payment Date and Holidays

  1. The date the refund is wire transferred is the payment date and is established in the appropriation summary block of the Secure Payment Schedule or Form 1166. Vouchers without a payment date, are rejected by the Kansas City, Bureau of Fiscal Services (BFS).

  2. Factors in determining a proper payment date:

    1. RFC distance from the Submission Processing Center (SPC).

    2. Types of expeditious mailing service used by the SPC.

    3. Mail delivery time.

    4. RFCs process vouchers for FEDLINE payments on the date of receipt, provided it is before 12:00 noon. Vouchers received after 12:00 noon, are processed the next day.

  3. Wire transfer payments are not made on official holidays observed by the Federal Reserve Bank of New York. The holidays are:

    1. New Year's Day

    2. Martin Luther King's Birthday

    3. President's Birthday

    4. Memorial Day

    5. Independence Day

    6. Labor Day

    7. Columbus Day

    8. Veteran's Day

    9. Thanksgiving Day

    10. Christmas Day

  4. This schedule of holidays is updated every year by the Board of Governors of the Federal Reserve System in mid-November preceding the calendar year. The RFC contact will provide the Submission Processing Center with the holiday schedule each December.

  5. Stamp envelopes or mail pouches with the inscription "FOR FEDLINE PAYMENT ONLY" to ensure prompt routing by the RFC.

  6. Confirmed SPS refund data is received through Intra - Governmental Payment and Collection System (IPAC, formerly known as GOALS) RFC/Agency Link. A FEDLINE support listing is sent to the respective SPC. (See figures below).

    Figure 3.17.79-10a

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    Figure 3.17.79-10b

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  7. The support listing confirms receipt of the refund payment by the taxpayer. Verify receipt of both documents.

  8. Compare the schedule total on the support listing to the grand total amount on the refund schedule.

    1. If the amount differs, check the refund amounts on the SPS/Form 1166. If the refund amounts on the SPS/Form 1166 do not match the money amounts on the support listing (underpayment or overpayment), contact the RFC to resolve the error.

    2. If a taxpayer on the refund schedule is not shown on the support listing, the RFC sends a Form 1098, Schedule of Cancelled Checks, to the Agency Location Code (ALC) to report a rejected wire transfer payment. Immediately prepare an SPS/Form 1166 to issue a paper refund check. When this occurs, notify the taxpayer in advance.

      Figure 3.17.79-11

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

    3. Compare the SPS/Form 1166 information (the taxpayer's name, bank name, ABA number and account number) to the support listing showing the same information.

      Note:

      If TYPE 12 payment, the information is on the "CMNT" line. If TYPE 10 payment, the information is on the "TO" , "RECV" , and "CMNT" lines.

    4. If the above information does not match, contact the RFC, Philadelphia at (855) 868-0151, Option 1 (Help Desk) . The RFC, Philadelphia must advise the financial institution of the erroneous wire transfer payment and the RFC, Philadelphia is responsible for reversing the payment.

  9. Non-receipt claims (Form 3911 and Form FMS 1133) are handled as outlined in IRM 21.4, Refund Inquiries.

  10. Submission Processing Centers (SPC) no longer submit quarterly reports of Wire Transfer Refunds to the National Office. Any questions about Form 8302 may be directed to the originator.

  11. The SPC must have current Form FMS 210, Signature Cards, on file with the RFC. The cards are maintained by the Manual Refund function and must be updated annually and anytime a change in Certifying Officer occurs. Signature cards for the wire transfer of refunds must be annotated "For FEDLINE Payments Only."

  12. The following

3.17.79.3.11  (01-01-2013)
Erroneous Receipt of Funds From State Income Tax Levy Program (SITLP)

  1. The State Income Tax Levy Program (SITLP) is an automated levy program administered by Compliance. Levy data is sent to participating states on a cartridge or CD rom. Data is matched against state records. When there is a match, the state will either remit a paper check and match cartridge to a designated WI Center or transmit the payment and data via Electronic Federal Tax Payment System. SITLP payments post with a Transaction Code (TC) 670 with a Designated Payment Code (DPC) 20 or 21. Some older SITLP payments posted with a DPC 04.

  2. Erroneous receipt of funds from SITLP is rare.

  3. The W&I Submission Processing Centers process cartridges and payments/checks received from the state. General procedures are located in IRM 5.19.9.2, State Income Tax Levy Program (SITLP). Accounting journal procedures are located in IRM 3.17.63.

  4. A list of the states currently participating in SITLP can be found in IRM 3.17.64.31, Accounting and Data Control - Accounting Control General Ledger Policies and Procedures.

  5. If a state determines an erroneous levy payment was sent to the IRS, the state will:

    1. Formally request a refund of the levy proceeds they made in error.

    2. Send a letter to the appropriate SITLP Coordinator (a list of SITLP Coordinators is located on the Servicewide Electronic Research Program (SERP), http://serp.enterprise.irs.gov/databases/who-where.dr/sitlp_coord.htm.

    3. The SITLP Coordinator advises the Compliance Services Collection Operations (CSCO) or ACS Support staff in their Center, to verify credits and reverse the amount to credit the liability.

    4. CSCO or ACS personnel will prepare necessary documentation to request a manual refund and forward to Accounting Operations.

      Note:

      Only the portion of the offset used against the open liability should be refunded. If too much time has passed, the unused portion of the original offset may have already been refunded to the taxpayer. If so, the state will recover directly from the taxpayer.

    5. See IRM 5.19.9.2.7, Refunding SITLP Payments.

  6. Use Bypass Indicator (BPI) '3' to prevent offset through the Treasury Offset Program. See IRM 21.4.6, Refund Offset.

3.17.79.3.12  (01-01-2013)
Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax

  1. Receipt and Control Branch (RCO) receives and date stamps Form 4466 Corporation Application for Quick Refund of Overpayment of Estimated Tax. Then RCO forwards stamped Form 4466 to Accounting Operations for processing. See Figure IRM 3.17.79-20a and Figure IRM 3.17.79-20b.

  2. Form 4466 will be transshipped to the appropriate Business Master File (BMF) processing site as outlined in the official Transshipment guidelines.

  3. When Form 4466 are received:

    1. Reject Form 4466 quick refund requests submitted for trusts or estates. Quick refunds for trusts and estates are not allowed.

    2. Rejected/disallowed Form 4466 for estates or trusts should be communicated to the taxpayers via IDRS Correspondex 1287C letter. Accounting will respond to correspondence returned to the function from taxpayer.

    3. Review documents and ensure Form 4466 submitted for processing is solely for corporate returns (IRC 6425, exception for corporations only). Per the Reg. 1.6425-1(b) (2), Form 4466 is not considered a claim for credit or refund.

    4. Expedite processing of Form 4466 is required. The refund must be issued within 45 days of the received date.

    5. Immediately upon receipt of Form 4466, use IDRS CC ACTON to place documents under case control. See IRM 2.3.12, Command Code ACTON. Control cases using activity code "Form 4466" . See Figure 3.17.79–15.

      Figure 3.17.79-12

  4. Reject Quick Refund requests submitted on Form 4466 for Foreign Investment Real Property Tax Act, Form 8288 and Form 8288A (FIRPTA, Ogden only) with a letter of explanation. The letter of explanation should contain the following information:

    We are sorry, but we are returning your Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax.

    Form 4466 does not apply when requesting a refund on Foreign Interest Real Property (FIRPTA) credits. You must submit Form 1120F, a copy of Form 8288A (copy B) signed by the IRS, and a copy of the Withholding Certificate to the Internal Revenue Service , Ogden, UT 84201.

    If you have any questions regarding FIRPTA payments, please write to the attention of the FIRPTA function or you may call them at 267–941–1000, this is not a toll free number.

  5. Review the Form 4466, and verify following items:

    1. TIME FOR FILING A corporation may, after the close of the taxable year before the 16th day of the third month following the close of the taxable year, file an application for an adjustment of an overpayment of estimated tax for such taxable year. An application under this subsection shall not constitute a claim for credit or refund. (Filing Form 7004 does not extend time for filing Form 4466, the Form 4466 will be considered timely if received the day following a due date which falls on a holiday or a weekend ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , or if the envelope contains a timely date stamp which is prior to the due date). Hold in a suspense file all Form 4466 received up to two weeks prior to the close of the taxable year. Normal processing should begin on the first day after the close of the taxable year. If the tax year ending month is different than the established accounting period, initiate research of the Form 1128 file maintained by Entity Control. If a request or change of accounting period is submitted with Form 4466, Entity Control inputs Command Code BNCHG to correct the accounting period prior to issuance. A corporation filing under the Consolidated Return Regulations is not required to submit a Form 1128 or request a change in accounting period IF, AND ONLY IF, a statement is included with Form 4466 specifically stating that the corporation is filing under the Consolidated Return Regulations. The statement must cite the appropriate section of the Regulations 1.1502.76(c)2 and 1.1502.75(d)(1). Reject the application if Form 1128, Request for a Change in Accounting Period, or a statement is not present.

    2. A Form 4466 is valid if line 8 is at least 10 percent of line 7, expected income tax liability, and at least $500.

      Note:

      Form 4466 is not considered a claim for credit or refund (justification for lines 5a and 5b).
      Determine if Line 7 is correct (Line 6 minus Line 4), if yes, then refund line 8.

      Note:

      All fuels must be claimed on the appropriate excise tax forms.

    3. Verify that there is a Master File account for each taxpayer.

    4. If the Form 4466 filer is a subsidiary of a corporation which elected to file a consolidated return, the filing period is that of the parent for credits included in the consolidated return.

  6. If Form 4466 is rejected:

    1. Access IDRS CC ACTON to update the activity code to "4466REJECT" . See Figure 3.17.79–16.

    2. Prepare single Form 3753 Manual Refund Posting Voucher, to input TC 840 for zero amount to release X Freeze Code when the return posts. Update control base to TC 840 input. Circle in red TC 770, to prevent "I" Freeze. The transaction code for zero will indicate a claim for refund was received but not processed. See Figure 3.17.79–17 and Figure 3.17.79–21.

    3. Send IDRS Correspondex Letter 1287C to the taxpayer. See Figure 3.17.79–18.

    4. Close control base after Form 3753, TC 840 .00 amount, 1287 C letter sent, etc.

    5. Photocopy Form 4466 and return the original to the taxpayer along with the letter of explanation.

    6. Keep a pending case file containing the photocopy of rejected Form 4466, the 1287C letter, and any research for three months. After three months destroy the case file.

  7. The date for filing Form 4466 coincides with the dates for filing corporate returns, which is on or before the 15th day of the 3rd month after the end of the tax year (but before the corporation files its income tax return). For instance:

    1. For calendar year corporations with a tax year that ends December 31, 2009, the due date would be on or before March 15, 2010.

    2. For a fiscal year corporation with a tax year ending October 31, 2009, the due date would be on or before January 15, 2010.

    Figure 3.17.79-13

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    Figure 3.17.79-14

    Figure 3.17.79-15

3.17.79.3.12.1  (01-01-2013)
Research Federal Tax Deposits Payments on Master File

  1. Research taxpayer's Electronic Federal Tax (EFTPS) payments on Master File:

    1. Research IDRS.

    2. Compare payments on Form 4466 with the EFT payments.

      Note:

      If the taxpayer indicates overpayment from prior year (Line 3) was not transferred to appropriate tax year, take appropriate action to move credit to current tax year.

  2. If the taxpayer listed the EFTs on Form 4466 and research shows no record of EFT payments or credits on Master File or IDRS:

    1. Call the taxpayer for written verification of the EFTs.

    2. If the taxpayer does not submit verification, prepare an IDRS letter 1287C. Allow taxpayer 45 days to respond to IDRS Letter 1287C.

  3. If research shows the taxpayer made EFT payments in an amount equal to, or more than, the amount claimed on Form 4466:

    1. Verify the amount of EFT's claimed.

    2. If the amount of the transcript is LESS THAN the amount claimed on Form 4466, contact the taxpayer as provided in IRM 3.17.79.3.12.1(2), above.

  4. When Form 4466 has been accepted for allowance, research for any outstanding balance liabilities (OBL's) due on the taxpayer's account.

    1. For taxpayers who owe tax on former periods to which all or part of the amount claimed can be applied, use IDRS CC ADC24 for the credit transfer. Refer to IRM Part 2, 4 IDRS Terminal Input for instructions.

      Figure 3.17.79-16

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

    2. Use a Transaction Code (TC) 820 on the debit part of CC ADC24 and a TC 700 on the credit part.

    3. Use the current date as the transaction date.

    4. Send a 1287C letter to the taxpayer explaining how this amount is applied.

    5. Issue a manual refund for the excess credit amount that was not offset. IRM 3.17.79.3.2, Processing Manual Refunds.

    6. If all credit claimed was used to offset OBL's, prepare Form 3753 Manual Refund Posting Voucher, with TC 840 for zero (0) amount. In "Remarks" put: the TC 840 0 will release the "X" freeze when the return posts. Circle in red TC 770, otherwise it will create an "I" freeze.

  5. For taxpayers who do not owe other tax liabilities and the full amount claimed is to be refunded, prepare Form 5792 as shown in Figure 3.17.79–25 and forward for processing.

    1. There is no interest computation on the refund.

    2. Use blocking series 3 on CC RFUND. See figure below.

    3. If the amount to be refunded is over $10 million, prepare Form 3753 as shown in Figure 3.17.79-24.

    4. Forward for processing. Update IDRS: H,3753PREP.

    Figure 3.17.79-17a

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    Figure 3.17.79-17b

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    Figure 3.17.79-18

    Figure 3.17.79-19

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3.17.79.3.12.2  (01-01-2013)
Processing Form 4466 for Form 1120S Filers

  1. Processing Form 4466 for Form 1120S filers.

    1. If a Form 4466 is received from a Form 1120S filer (also referred to as a S-Corporation) who has made protective estimated tax payments in their FIRST TAXABLE YEAR, process as outlined in IRM 3.17.79.3.12.1(2) and (3) above.

    2. During review of the Form 4466, if information is not clearly defined, telephone contact with the taxpayer may be appropriate.

    Figure 3.17.79-20a

    Figure 3.17.79-20b

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    Figure 3.17.79-21

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3.17.79.3.13  (01-01-2013)
Refunding Money Wrongfully Collected by Seizure and Sale

  1. These procedures have been withdrawn per the Compliance function.

  2. Policy Statement P-5-36 was revoked May 28, 1999.

  3. Previously, the Chief, Special Procedures function (SPF), Collection, forwarded appropriate documentation and correspondence to the Submission Processing Center for processing. Correspondence from Special Procedures function provided the appropriate authorization to make the account transfer and record the account debit and credit actions for resolving the taxpayer accounts status on the Master Files. (See Figure 3.17.79–25.)

  4. IRM 3.17.79.3.16., Prompt Refunds in Wrongful Levy Situations, for instructions.

    Figure 3.17.79-22

3.17.79.3.14  (01-01-2013)
Refunds of Gasohol Claims

  1. Taxpayers may claim a credit for any tax paid on purchases of gasohol.

  2. The claims must be processed within 20 workdays of receipt by the Submission Processing Center to avoid paying interest.

  3. The refunds are initiated by the Adjustments function on Form 5792.

  4. Accounting Control/Services Operations processes cases per instructions in IRM 3.17.79.3, Processing Requests for Refunds, and IRM 3.17.79.4, IDRS Generated Refunds.

3.17.79.3.15  (01-01-2013)
Refunds of Levy Proceeds

  1. Accounting Control/Services Operations receives requests for manual refunds of levy proceeds and any related documents. Process as outlined in IRM 3.17.79.3.2. (See Figure 3.17.79–26.)

  2. Centers should determine whether these cases will originate from the Area Offices Insolvency Manager's jurisdiction or originate from the Compliance Services function at the local Center.

  3. Package assembly arriving in Accounting Operations requires account data prints provided by originators per IRM 21.4.4, Manual Refunds.

    1. All employees must be aware of the variety of freeze conditions and the actions required to resolve accounts prior to forwarding cases to Accounting.

    2. We encourage all functions to participate in the Continuing Profession Education (CPE) process.

    Figure 3.17.79-23

3.17.79.3.16  (01-01-2013)
Prompt Refunds in Wrongful Levy Situations

  1. Accounting Operations receives requests from the ACS Support Compliance Liaison, Form 5792, for processing "Wrongful Levy" refunds. ACS Compliance Liaison guidelines and procedures apply only to situations where the Internal Revenue Service levies on a bank account in error other than that of the taxpayer's account or sells property in error which does not belong to the taxpayer.

  2. Cases may also include refunds of erroneous receipt of SITLP (State Income Tax Levy Payments) which the Service must reimburse the State or the taxpayer in a timely fashion. IRM 3.17.79.3.11. for processing Erroneous Receipt of Funds from SITLP.

  3. Each ACS Support Compliance Liaison provides names, FTS phone number and original signatures of two individuals authorized to approve manual refunds submitted to the Compliance function and Accounting Operations.

  4. When Wrongful Levy situations are identified in the field offices, Compliance employees will:

    1. Contact ACS Support Compliance Liaison.

    2. Notify the Accounting Branch of the Wrongful Levy refund request forthcoming.

    3. Prepare appropriate documentation (Form 5792) and supporting documentation that will be "FAXED" to the ACS Support Compliance Liaison function.

    4. The submitting field office sends a follow-up Part "1" , of Form 5792, with the original signature to the Compliance Liaison function.

    5. Compliance Liaison Function verifies that Form 5792 is completed correctly, all supporting documentation is attached and hand carries both Form 5792 and supporting documentation to Accounting.

  5. Accounting Operations will:

    1. Verify Form 5792 and documentation are complete and correct as outlined in IRM 21.4.4, Manual Refunds, IRM 3.17.79.3 and IRM 3.17.79.4.

    2. "WRONGFUL LEVY - HAND CARRY" should appear in the remarks area.

    3. Correct discrepancies by telephone under unusual circumstances. Otherwise, will reject the refund request back to Compliance for correction or resolution.

    4. Prepare Secure Payment System (SPS) Form 1166, Voucher and Schedule of Payments, and transmit to the San Francisco RFC.

    5. Input two history items on IDRS using appropriate Center or ULC code, as follows: (create a dummy module when necessary) See Figure 3.17.79–26.

      Figure 3.17.79-24

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    6. Call the originator to inform them that the information was received, processed and the check has been scheduled.

3.17.79.3.17  (01-01-2013)
Non-Resident Alien and Dual Status Refunds (Austin Only District Office or DO 97 and 98)

  1. Accounting receives verified Form 1040NR, Dual Status Form 1040, and Foreign Corporate Returns, Form 1120F. Both returns require withholding of tax on allowable interest and the preparation of Form 1042S and Form 5205. Form 1042S and Form 5205 are prepared by the originator of the Form 5792 / Form 3753 prior to routing to Accounting. Figure 3.17.79-25 and Figure 3.17.79-26 Originators will input a TC 770 to the taxpayer's account for the amount of interest withheld, per IRM 3.17.79.3.17(1)g, and prepare a Form 3809 to transfer the credit (TC 770, amount of interest withheld) from the Master File to the 4610 Account. Form 3809 accompanies Form 1042S, Form 5205 and the refund document (Form 5792 / Form 3753).

    Figure 3.17.79-25

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    Figure 3.17.79-26

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    1. Returns arrive in Accounting Operations with the country code and tax rate indicated at the bottom of the return.

    2. All dual status returns, non-resident alien returns, and foreign corporation returns are rejected to Accounting Operations. If a zero or no withholding rate is shown on the return, reject the return to the Error Correction function for reinput, if the manual refund is not required for any other reason (e.g., to release a freeze conditions, etc.).

    3. Follow instructions for processing a manual refund in IRM 3.17.79.3.2. Generally, these are IDRS generated refunds on Form 5792.

    4. Prepare Form 5792 or Form 3753, as necessary.

    5. Compute the withholding tax on the allowable interest using 30 percent or the treaty rate, as applicable.

    6. Subtract the amount of withholding tax from the net amount of the refund.

    7. Input TC 770 for the amount of interest withheld (30 percent of the treaty rate), as applicable. Input TC 290 for zero, TC 770 for the amount of interest withheld, Hold Code (HC 2) to hold notices and credit until TC 820 posts. Cycle delay (CD) 4 to delay posting of TC 290 and TC 770 until the TC 150 posts.

    8. Prepare Form 3809 using TC 820 on the debit portion, for the amount of interest withheld, and TC 700 for the credit portion to the 4610 Account. See IRM 3.17.243, Miscellaneous Accounting, for more information on preparation of transfer documents.

    9. NMF- Prepare Form 3809 for the amount of interest withheld (30 percent or the treaty rate), as applicable. Input TC 770, Credit taxpayer's NMF account; Debit 6520 Account.

    10. NMF- Prepare Form 3809 using TC 772 on the Debit portion for the amount of interest withheld; use TC 700 for the Credit portion to the 4610 Account.

  2. Form 5205, in four parts, are routed as follows:

    1. Mail the original Form 5205 to the taxpayer. Associate Form 5205 with the related Form 1166/SPS refund schedule.

    2. Attach Form 5205, Part 2, to Form 3809 (credit side) going to the 4610 Account. Forward Form 3809 for numbering and further processing.

    3. Forward Form 5205, Part 3, IRM 3.17.79.7.2

    4. Attach Form 5205, Part 4, to the tax return along with Part 3 of Form 5792 or Form 3753.

    5. Accounting Operations monitors the account until all transactions post.

    6. The RACS area inputs the refund, principal and interest and related journal actions.

    7. Transfer the amount withheld from interest paid to the 4610 Account, Unapplied Advance Payments, via Form 3809. This is held in escrow until the withholding agent's return is filed. See IRM 3.17.79.6.2.

    8. Credits accumulate and are transferred monthly in a lump sum by Accounting Operations, from the 4610 Account to the withholding agent's account on the Master File using Form 3809 and posting a TC 700.

    9. Part 3 of Form 5205 is maintained in the appropriate area as outlined in IRM 3.17.79.6.2. Balance the Form 5205, and the monthly lump sum transferred from 4610 Account to the withholding agent's account.

  3. If the accounts have been under Examination, and the Assessment Statute on the module has expired:

    1. Make an NMF assessment

    2. Apply a TC 770

    3. Transfer transaction to the Master File on Form 514B

  4. Process manual refund documents, Form 5792 and Form 3753, according to instructions at IRM 3.17.79.3.2.

3.17.79.3.18  (01-01-2013)
Refunds Based on Court Decisions

  1. At times, a manual refund must be issued due to a court decision with no evidence of credit. These refunds are processed on the form that is most appropriate (example Form 3753 or Form 5792). The documents reflecting the court decision serve as authority for making the refund.

    Note:

    These manual refunds must be reviewed by lead/manager before being processed. A Bypass Indicator "3" prevents offset through Treasury Offset Program (TOP).

  2. When a court decision requires the Government to pay court costs or fees to the taxpayer, that amount is issued by GAO. IRS should never include court fees in the amount of a tax refund.

  3. Specific instructions are located in IRM 5, Collection Special Procedures or Technical Support for Small Business/Self Employed Business Operating Division.

3.17.79.3.19  (01-01-2013)
Lockbox Losses and Shortages

  1. At times, manual refunds must be issued as a result of a loss or shortage to approved lockbox banks/depositories.

    1. These manual refunds must be requested on Form 3753 Manual Refund Posting Voucher.

    2. Documents supporting this are received from the Bureau of Fiscal Services and provide credit substantiation for making these refunds. These are reimbursement payments to financial institutions, not to taxpayers.

  2. Specific processing instructions are in IRM 3.0.230, Lockbox Processing Procedures.

    1. Form 3753 will be initiated by Lockbox Coordinators or their designees.

    2. Only specific sections of the Form 3753 will be completed.

    3. No payee ID (TIN) will be indicated.

    4. No MFT or Tax Period will be shown.

    5. No interest will be paid on reimbursements.

  3. Form 3753 indicates:

    1. Charge Appropriation 20X1807;

    2. Refund from Account 6910;

    3. "Lockbox Reimbursement" at Item # 5, Other Remarks.

  4. Requests must be reviewed by an authorized Approving Official prior to processing. IRM 3.17.79.1. IRM 3.17.79.3.2. and IRM 3.17.79.3.5. for specific requirements.

  5. Accounting prepares the refund schedule, SPS or Form 1166, Voucher and Schedule of Payments.

    • Use "L" definer when preparing refund schedule numbers.

    • Enter Submission Processing Center Agency Location Code (ALC).

    • DO NOT forward for posting to MF or ANMF. Do not check for outstanding liabilities.

      Note:

      Maintain supporting documentation with the copy of the refund document maintained in the GAO audit file. If no supporting documentation, REJECT see IRM 3.17.79.3.2.1.

  6. After confirmation of refunds by the RFC, Accounting Operations sends one copy of the refund schedule with check numbers indicated to the originating office or to the Lockbox Coordinator. These are not tax refund payments and must be retained by the Lockbox Coordinator for future research.

  7. Accounting Operations maintains the refund schedule and any substantiating documents in accordance with Records Control Schedule for Center Records. IRM 1.15, Records Management, provides the retention and destruction schedule according to type of documents and records.

3.17.79.3.20  (01-01-2013)
Overpayments on Bankruptcy Cases

  1. If the debtor taxpayer's return results in an overpayment amount, the account is frozen. A special transcript generates to the applicable Compliance field/area or territory office.

  2. The Field Office employee (either SB/SE Technical or Insolvency management officials):

    1. Researches IDRS, ANMF, and microfilm to determine that there are no outstanding tax liabilities;

    2. Prepares Form 5792 Request for IDRS Generated Refund (IGR);

    3. Annotates "Bankruptcy Code Case" in the Remarks Section of Form 5792.

    4. Annotates TC 130 in the Remarks Section of Form 5792 when a TC 130 freeze is found in an account.

    5. If refund amount is not subject to automatic stay, a Bypass Indicator "3" must be used to prevent offset through Treasury's Offset Program (TOP).

  3. Form 5792 on these special refund cases are signed by the Chief, Insolvency or Technical, controlled and shipped to the Compliance Services Collection Operations (CSCO) for input to IDRS. The signature of the Chief, Technical, is accepted as proof, that all research for outstanding balances has been performed, (including IMFOL, BMFOL, and ANMF), and that a proper credit is available for the amount of the refund.

    1. Incomplete or inaccurate Form 5792 cases are rejected see IRM 3.17.79.3.2.1.

    2. CSCO function is responsible for inputting CC RFUND on these special cases to maintain case control.

    3. Submission Processing Accounting Operations is responsible for inputting CC REFAP (refund approval) outlined in IRM 3.17.79.4.1.

3.17.79.3.21  (09-18-2013)
Offset Bypass Refunds

  1. Under certain hardship circumstances, the IRS may issue manual refunds of excess credits without first satisfying an IRS Outstanding Balance List (OBL). These refunds are known as "Offset Bypass Refunds" (OBR).

  2. Initiators of Offset Bypass Refunds (OBR) must input an Action Code via IDRS Command Code FRM77 to identify that the offset liability was bypassed. TC 971 AC 36 (IRS OBR) is input prior to the TC 840 manual refund.

    Note:

    A Treasury Offset Program liability may NOT be bypassed under any circumstances. In addition, if both an IRS and TOP debt exist, you may NOT bypass either offset. The IRS debt must be satisfied.

  3. A Bypass Indicator (BPI) "3" (on SPS, deselect the option "TOP Offset Eligibility" ) may be used when the OBR is in excess of an existing TOP debt. Refer to Offset Bypass Refunds, in IRM 21.4.6.

    1. Offsets regarding Telephone Excise Refund Tax or TETR, see IRM 21.4.6.

    2. Offsets regarding Economic Stimulus Payments or ESP, see IRM 21.4.6.

  4. An OBR requires prompt treatment to prevent offset during Master File processing.

  5. The processing date of OBR(s) depends on if there is a freeze code on the taxpayer's account. For qualifying taxpayers with no freeze codes, OBR request must be received and processed before the actual posting date on which the offset of the overpayment is shown (the 23C Date). When the overpayment is held in a module by an IDRS freeze condition, the OBR request for qualifying taxpayers must be submitted in coordination with the release of the IDRS freeze condition and before the account is offset. This is done to prevent an erroneous refund and to assure the overpayment is available for the OBR and has not been offset.

    Note:

    If an OBR is requested before the 23C date or offset of the overpayment, but a clerical error occurs that prevents processing of the request, the IRS corrects this clerical error by reversing the offset and issuing the OBR.

  6. OBRs may also be made if subsequent adjustments are made to a tax module. These may include: a payment or credit transfer, an audit tax adjustment, a math error correction and an amended return or claim that is filed and processed. Each will have its own 23C Date. Therefore, the subsequent overpayment can be issued in a manual refund for those taxpayers eligible for an OBR.

    Note:

    To prevent an erroneous refund on an OBR, use hold codes or secondary transaction codes to hold the overpayment. It may be necessary to coordinate this with another IRS function.

  7. Initiators of manual refunds will write "OBR" and the specific reason for issuing the manual refund along with IRM references and the authority which apply. In the remarks section of the source document (Form 5792/Form 3753), input the appropriate TC 971 AC 36 for IRS liability via IDRS CC FRM77.

  8. Initiators of OBR manual refunds will attach to the Form 5792 or Form 3753:

    1. Evidence of the credit condition to show substantiated overpayment available, this may be either a copy of the unprocessed tax return (including all forms and W-2s) or an IDRS print showing the amount of the overpayment available.

    2. A print of TXMOD showing the amount of liability bypassed.

      Note:

      Do not bypass Master File offsets if the OBR cannot be issued prior to the 23C date of the original return.

    3. The manual refund document must be received no later than the Friday before the current Master File Assessment Document date (23C or Assessment date, which is always a Monday) of the original return.

      Note:

      Refund documents must be received by the Accounting team prior to manual refund cut off times.

  9. The Manual Refund function may reject Form 3753/Form 5792:

    1. If Form 3753/Form 5792 are not received before established cutoff times before the Assessment Document Date (23C) or

    2. If the required documentation and written statement in the remarks section is missing from Form 3753/Form 5792, but not before attempting to secure needed documentation in time to process the OBR;

    3. If the manual refund document has not been approved by the functional Approving Officer of record and/or the Taxpayer Advocate Liaison or Coordinator in sufficient time to meet the cutoff times.

  10. Initiators of manual refunds must monitor accounts with OBRs: to take actions necessary to stop computer generated refunds (pending transactions via CC NOREF), reverse offsets or take necessary subsequent actions to prevent erroneous refunds or notices from being released.

    1. The Manual Refund function employees (approving manual refunds) are not required to research for outstanding balance liabilities (OBLs) on OBR manual refunds when Form 3753/Form 5792 are received from other functions. The originator is required to confirm there are no liabilities prior to initiating manual refunds.

    2. Initiator will provide documentation as indicated in IRM 3.17.79.3.21.(2), above. Initiators must research accounts for OBL's and attach documentation to Form 3753 Form 5792 routed to Accounting for approval.

    3. See IRM 21.4.4.5.1, Monitoring Manual Refunds.

3.17.79.3.22  (01-01-2013)
Refunds from Examination (Compliance)

  1. Refund requests from Account Symbol 20X5433 will be initiated by Examination (Compliance) only.

    1. These refunds are not issued from the refund appropriation. These items are not overpayments of tax.

    2. Disbursements are authorized by IRC 7623, amended by Section 1209 of the Taxpayer Bill of Rights II, Public Law 104–168.

    3. Case Control Claim Numbers will be assigned by Examination on each item.

    4. Headquarters Examination assures no duplicates will occur.

  2. On a case-by-case basis, the Manual Refund function receives requests authorized by the appropriate Compliance Chief.

    1. Request is submitted on Form 3753, Manual Refund Posting Voucher, along with related supporting documentation.

    2. Compliance maintains case control and internal controls (e.g., separation of duties).

    3. A database was developed to perform future research. Maintain Case or Claim Number, TIN and dollar amount. This is essential in the event a check is returned by the taxpayer (via Form 1098 as TC 841) or is returned undeliverable by the Postal Service (via Form 1098 as TC 740).

  3. Supporting documentation consists of:

    1. Correspondence from Compliance management official authorized to request payment and providing pertinent information (e.g., 2395 or general ledger account credit and debit instructions, etc.).

    2. Form 3753, completed by the requesting office and signed by the authorized Approving Officer.

      Note:

      These Form 3753 are not transcribed by or input through ISRP. These transactions do not post to the Master File.

  4. Compliance completes the following sections of Form 3753:

    1. Section I., Item 11, General Ledger/Appropriation block 20X5433 Account Symbol; or 20X5433.1.

    2. Section II, Item 1c Handbook reference: IRM 25.2, Information and Informants' Rewards.

    3. Section II, Item 2d Evidence of Credit Condition: Other, IRC 7623, TBRII 1209;

    4. Section II, Item 3, Interest: check box "Not Allowable" .

    5. Section II, Check applicable box: Necessary supporting documents attached.

    6. Cross out entire Section III, Interest Computation.

    7. Section IV, Other Remarks: Write Case claim number and DLN where supporting documentation is filed.

  5. Accounting will prepare, schedule and certify Schedule and Voucher of Payments via Secure Payment System (SPS) using R as the definer. See IRM Exhibit 3.17.79–5, Schedule Numbers Format.

    1. THESE ARE ADMINISTRATIVE PAYMENTS, NOT TAX REFUNDS. These must be certified to and issued by the Submission Processing Center, Kansas City, Bureau of Fiscal Services..

  6. Accounting will enter via Secure Payment System (SPS) to certify these administrative payment schedules.

  7. Select SPS menu option Miscellaneous Check.

    1. Input the Account Symbol 20X5433.1.

    2. Input the Compliance Claim Number (from Section V of Form 3753) assigned by Examination in "Remarks" area of SPS. This literal will be printed on the check to identify if it is undeliverable or returned.

  8. Number the document (DLN), prepare Form 813 and attach supporting documentation to SPS refund schedule. Forward to RACS for journal actions. Retain copies pending confirmation by BFS and RACS.

  9. Associate the confirmed SPS refund schedule print with the supporting documentation.

  10. Accounting will write the Refund Schedule Number and date of check on Form 3753, then return the appropriate annotated copies of Form 3753 to the originating branch.

  11. Undeliverable and returned checks will be processed using existing instructions.

    1. Cancellation credits are returned to the Submission Processing Center Agency Location Code (ALC) addresses via paper Form 1098 schedule.

    2. Forward a copy of the Form 1098 schedule to Compliance (Examination) for research or to be reissued. These actions are only possible when the Examination Case Claim Number appears on the cancellation schedule.

    3. Limited Payability (LP) cancellations may occur after 14 months from the check date if the check is not presented to Treasury for payment. LP credits are returned via Form 1081 from TRACS to Enterprise Computing Center (ECC).

    4. Cancellations are reversed back to Account 4755, via Form 3245 Posting Voucher, Refund Cancellation or Repayment.

    5. Update the Examination Case Claim database showing the check was returned/cancelled. Inform the originating office that the check was returned and for the reason. Compliance may wish to initiate action to reissue or to hold for future reference for inquiries from the recipient.

3.17.79.3.23  (01-01-2013)
Credit Card Processor Chargebacks (Ogden Accounts Management Only)

  1. Ogden Submission Processing Center will process requests from approved Credit Card Processors for chargebacks. This is necessary to reimburse injured processors when credit cards are used fraudulently to pay Federal Income Tax beginning in Tax Year 1998 as well as other reasons as cited in IRM 21.4.4.6.3(3).

    1. Processing instructions appear in IRM 21.4.4.6.3, Credit Card Chargebacks for Credit Card transactions.

    2. See list in IRM 21.4.4.6.3(1).

    3. Procedures were coordinated between the IRS Electronic Tax Administration (ETA) and Accounts Management staff.

    4. These disbursements are governed by regulations as published in the Federal Register, December 15, 1998, T.D. 8793, 26 Code of Federal Regulations, Part 301, Credit Card and Debit Card Tax Payments.

    5. Processing is centralized to the Ogden Submission Processing Center only.

  2. Reimbursements occur only when credit card charges are substantiated by the account holders and approved by the pre-authorized signatures of representatives named by the Processor.

    1. Backup and supporting documentation from the Processor must be submitted to the Ogden SPC site.

    2. See IRM 21.4.4.6.3, Credit Card Chargebacks.

  3. The Ogden SPC site must control cases. Research future requests from the Credit Card Processor to prevent duplicate requests and erroneous disbursements being released.

    1. Establish internal controls to prevent duplicate payments.

    2. Control cases using a unique case control numbering system. This control number will be associated with all source documentation (e.g., Form 3753, Form 2424, Form 3210, etc.).

    3. Maintain case controls. Route cases using Form 3210, Document Transmittal.

    4. Disbursements are scheduled and certified by the Manual Refund function. If possible, the Refund Schedule number will be recorded on the Form 3210, returned to the originator for appropriate retention. The Refund Schedule number is required in the event IRS must trace disbursements made to Credit Card Processors.

  4. Requests for charge-backs may be accompanied by Form 8302, however, Form 8302 are used only when appropriate.

  5. Supporting documentation must accompany requests as described in IRM 21.4.4. If no supporting documentation, REJECT see IRM 3.17.79.3.2.1 . The Manual Refund function will:

    1. Verify that Form 2424 total the grand total refund amount.

    2. Verify that the back-up or supporting documentation is attached.

    3. Perform other validity checks as appropriate.

  6. Form 3753, Manual Refund Posting Voucher, will be completed and signed by the designated Approving Official. These types of refunds are small in volume.

    1. See IRM 21.4.4.6.3.

    2. The Manual Refund function must be able to distinguish these 'claims' and schedule them as an ACH Direct Deposit made to the Processor only.

  7. Form 3753, Manual Refund Posting Vouchers, must be completed as follows because of the unique General Ledger (GL) Account number for the debit. This basically is a manual refund, but used to reimburse the credit card processor. Form 3753 for this purpose are completed as follows:

    1. Section I, Account Information.

    2. Item 1, Taxpayer Information Number (TIN).

    3. Item 3, MFT: Insert "X" .

    4. Item 6, Name and Address of Taxpayer: Insert "X" .

    5. Item 10, Make Check Payable to: Insert "RTN and Account Numbers" provided by the Credit Card Processor. Verify RTN and Account numbers with the documentation provided by the Processor. Supporting, back-up documentation must be provided to verify account numbers for scheduling and certifying disbursements.

    6. Item 11: Enter Account Symbol 20X1807 and amount.

    7. Section II, Manual Refund Authority.

    8. Reason, Item 1c, Handbook Reference: Insert "IRM 21.4.4."

    9. Item 1d, Other: Enter "IRM 21.4.4, How is a Chargeback Request Processed?, and Federal Register 12/15/98, T. D. 8793, 26 CFR, Part 301."

    10. Evidence of Credit Condition: Insert "X, Other, Chargeback for Credit Card Transactions." Transcript of Account.

    11. Item 2d, Other: Insert 21.4.4.6.3, Credit Card Chargebacks.

    12. Interest: Not allowable.

    13. Check box, All items above completed.

    14. Check box, Necessary supporting documents attached.

    15. Checkbox for initiating BOD (Business Operating Division)

    16. Section III, Interest

    17. No interest will be paid on these items.

    18. Section IV, Other Remarks

    19. Insert: Back-up documentation is attached. List case control unique identifying number here.

  8. Form 3753 will be retained in the GAO file at the Ogden Submission Processing Center.

    Note:

    Maintain supporting documentation with the copy of the refund document maintained in the GAO audit file.

  9. Ogden no longer requires one Form 2424, Account Adjustment Voucher, per each F 3753. Remarks section of the Form 2424 will state that the Form 2424 substantiates all items listed on the Form 3210, Document Transmittal. Control cases. Cross-reference case control numbers will be recorded on the Form 2424, Form 3753 and Form 3210.

  10. The Manual Refund function will indicate the payment schedule date and number on the Form 3210 and the Form 3753. These documents will be returned to the Technical function for retention and research availability. This documentation is required to initiate future tracing actions.

  11. Manual Refund function will compare totals from each completed Form 3753 with the grand totals on Forms from the menu of the Secure Payment System.

    1. Disburse from the San Francisco Regional Financial Center. These are not tax refunds.

    2. Certify via SPS, select ACH Option.

    3. Disburse from Treasury Account Symbol 20X1807.

    4. Use "F" (for ACH Direct Deposits, Ogden Only), as the Refund Schedule number definer.

3.17.79.4  (01-01-2014)
Request for IDRS Generated Refunds (IGR), Form 5792

  1. Originators in various functions initiate a Form 5792, Request for IDRS Generated Refund (IGR), through use of the IAT, Manual Refund tool and have it signed by the pre-designated Authorized Approving Official, and input the request using IDRS CC RFUND through use of the IAT, Manual Refund tool.

  2. Employees initiating Form 5792 IDRS Generated Refunds (IGR) must be familiar with the restrictions and input instructions, as well as how to control cases, assemble packages, obtain management authorization and forward posting documents to the appropriate Submission Processing Center, Accounting Operation, Manual Refund function. Use of the Form 3210, Document Transmittal, as an audit trail of the work forwarded for processing may or may not be required by the initiating BOD. Check your local Site or Business Operating Division guidance.

    1. IDRS, CC RFUND input instructions appear in IRM 2.4.20. IDRS generated refund criteria, along with the use of the Integrated Automation Technologies (IAT), Manual Refund tool, see http://iat.web.irs.gov/JobAids/iat.asp and other requirements appear in 21.4.4, Manual Refunds.

    2. Upon completion of CC RFUND input, Form 5792 is sent to the Accounting Operation, Manual Refund function for input of IDRS, CC REFAP (refund approval).

    3. This action generates an IDRS End of Day (EOD) file to be scheduled and certified by the Certifying Officer. The Enterprise Computer Center (ECC) transmits the EOD file to the Kansas City Bureau of Fiscal Services ( formerly known as Financial Management Service) for the disbursement of funds to the taxpayer.

    4. Simultaneously, the Submission Processing Center sends a file to ECC, resulting in the TC 840 (Manual Refund, document code 45) posting to the Master File.

3.17.79.4.1  (01-01-2014)
Case Review and Command Code REFAP (Refund Approval)

  1. Once the initiator inputs the CC RFUND and obtains the necessary approvals, a control base is established on IDRS and requires a CC REFAP input by the Accounting Operation, Manual Refund function to complete the two-sided entry requirement.

    1. The CC REFAP is restricted for use by Submission Processing, Accounting Operation employees only.

    2. Employees with CC REFAP in their IDRS profile are restricted from use of a variety of sensitive combination command codes allowing account adjustments.

    3. The employee inputting IDRS CC REFAP cannot be the same employee as the employee inputting CC RFUND. IDRS Generated Refunds input via CC RFUND/CC REFAP is a two-sided entry system developed as a security measure. This meets the internal control standard of: Separation of Duties. Employees initiating requests for refund (CC RFUND) cannot be the same employees inputting (CC REFAP) the refunds.

    4. Since the two IDRS command codes (CC RFUND/CC REFAP) must be input on the same processing day, all documentation required by the Certifying Officer to support each refund request must be delivered daily (day of input) to the Accounting Operation, Manual Refund function.. To ensure timely completion of all actions are taken prior to end of day, a daily cut-off-time is established for receipt of Form 5792 by each Accounting site.

  2. Review each case individually for completeness prior to input of CC REFAP. Do Not input CC REFAP, if any of the following conditions exist (this list is not all-inclusive):

    1. The Approving Official has not signed Form 3753/Form 5792.

    2. The signature of Approving Official does not match the signature on the Form 14031 Manual Refund Approver, caution must be used on initials.

    3. Signature of Approving Officer, on Form 3753/Form 5792, is not reflecting in the active Form 14031 file and RSTRK (M) listing.

    4. If the applicable manual refund authority boxes are not marked and the research material or back-up documentation is not attached to the Form 3753/Form 5792.

    5. If the address on Form 3753/Form 5792 does not match the address on Master File and there is no explanation in the "Remarks" field. The explanation must include reason for the different address as well as where the backup documentation will be filed per IRM 21.4.4, Manual Refunds.

      Example:

      Injured Spouse, Deceased Taxpayer, Bankruptcy cases must reflect an explanation in the "Remarks" field to include effected tax period and x-reference SSN if applicable.

    6. The refund amount and/or the interest computation is in error. Verify "From" dates and "To" dates are appropriate.

      Note:

      No interest is allowed on unprocessable returns ("U" coded and displays all 9's in the "CRD" field on IDRS/TXMOD. Refer to IRC Section 6611(g).

    7. First name line is made out to the "Deceased Taxpayer."

    8. Blocking Series is blank or other than 9, and Form 8379 is attached or Injured Spouse is indicated in Remarks.

    9. Credit offsets moved to a different TIN and/or tax period and not moved back to the appropriate taxpayers TIN and/or tax period. Caution must be used when issuing a refund to a taxpayer from a different SSN/EIN. This can cause disclosure issues, as well as, forfeit the proper audit trail. See IRM 11.3.1, Introduction to Disclosure for additional information.

    10. If an overpayment is offset and credit-interest is allowed (TC 736), the credit interest must be addressed if the offset is reversed.

    11. The initiator(s) employee number on Form 5792, Section IV, Block 1 (IDRS CC RFUND in field 12) and/or terminal and pending sequence number. The originating employee may or may not be the same employee inputting CC RFUND. The mandatory IDRS field 12 programming enhancement was based upon findings made by the Treasury's Inspector General for Tax Administration (TIGTA) to improve the IDRS Generated Refund audit trail.

    12. If the open control base box , Section II, is not checked. Research IDRS and if the control base is open, mark the box. If the control base is not open, reject, see IRM 3.17.79.3.2.1.

    13. If the initiating BOD, box 21 is not indicated, contact the originator to obtain the information. Mark the appropriate field. If you can not make contact with the originator or determine the appropriate BOD, reject, see IRM 3.17.79.3.2.1.

    14. A TC 810 (E freeze), TC ≡ ≡ ≡ or TC 916 (Z freeze) is posted to the tax module. A TC 918 (Z freeze) is posted to the entity module, and the case file does not include Criminal Investigation approval for the refund. A TC 790 without Examination approval where adjustment action is involved.

      Note:

      The -E freeze is no longer used for the Frivolous Return Program. The -E freeze will stay on current accounts until the account is resolved. For future accounts the F- Freeze will be used.

    15. An F- Freeze is a Frivolous Return Program freeze set by posting a TC 971-089. Refer to IRM 21.5.3.4.16.7, and/or Document 6209 Section 8.4 Master File Freeze Codes.

    16. The attached return copy is unsigned, or if it is a joint return, does not contain both taxpayers' signatures.

    17. If Computer Condition Code (CCC) 3, (Form 1040), or Computer Condition Code X, (Form 1120) is present on IDRS, reject see IRM 3.17.79.3.2.1. If a Transaction Code 918 is present on IDRS reject see IRM 3.17.79.3.2.1, immediately contact the Scheme Development Center (SDC) for review.

    18. If a TC 971 AC 664 is present on the IDRS module for the same overpayment, Do Not Process reject see IRM 3.17.79.3.2.1, presence of a TC 971 AC 664 indicates that a Form 3753 Manual Refund is in process. Processing the refund request may result in an erroneous or duplicate refund.

    19. Examination Branch approval is required if Project Code 21 and an E freeze code exists on the entity. Immediately contact the Examination Branch Pre-Filing Notification Coordinator, if the situation occurs and approval has not been received from Examination or meets Joint Committee threshold of $2 million.

    20. -L Freeze and the account has a history item or activity code of MAAS (MMDDYYYY) or TC 971 AC 665, which indicates that an assessment has been requested, and that a liability may be in the process of posting. If the assessment (TC 300) is for other than $.00 amount the increase has not posted.. The additional liability must be satisfied prior to issuing a manual refund. Reject if this if no indication of this action has been complete. See IRM 3.79.3.2.1.

    21. -L Freeze if AIMS Status Code is other than 00 through 06 or 08.

    22. If the Approving Official omitted the DATE on Form 5792, Section IV, Box 5 or Form 3753, Section V, Box 4, the Accounting function is authorized to enter the current day's date ONLY if omission of the date is the ONLY reason identified for rejecting the manual refund request.

    23. Originator's telephone number omitted.

    24. The Refund Statute Expiration Date (RSED) has expired. Be particularly careful if a refund has been prepared where a Substitute for Return (SFR) has posted. The RSED is the later of: 3 years from the Return Due Date (RDD) or 2 years from the payment date.

    25. If unresolved credit balance modules when the RSED has expired. Areas should coordinate with the Statute function. If assistance is needed in computing the RSED, contact the Statute function.

    26. No cross-reference in Remarks where credit source documents are filed (e.g., TIN, tax period and transaction code and TC 971 (or DLN) for Injured Spouse cases, etc.) or Bypass Indicators (BPI) are missing.

    27. There are blank areas on the Form 3753/Form 5792 entity area.

    28. There is white out, strike through, and/or corrections reflected on the Form 3753/Form 5792. when received in Accounting.

      Note:

      The Accounting Operation, Manual Refund function has authorization to make modifications (strike through(s) only) on the refund document to not cause further delay in processing the manual refund request. (For Example: CC REFAP error occurred, the document needs to be modified, BOD box not checked, signature date not reflected on document). Modifications to the document by the Accounting Operation, Manual Refund function MUST be annotated in RED, initialed and dated.

    29. Accounts indicating bankruptcy or litigation Master File freeze. When accounts show TC 520 "-V" or "-W" Master File Freezes, refund requests must be initiated by the Compliance area: Insolvency managers (for bankruptcy freeze) or the Technical Services function (for litigation freeze).

    30. No IDRS open control base.. See IRM 21.4.4.5.1, Monitoring Manual Refunds for exceptions regarding CIS and TAS cases.

    31. The taxpayer account reflects a Refund Hold condition and has not been addressed in the "Remarks" or back up documentation addressing the Refund Hold condition is not attached. See Document 6209, IRS Processing Codes and Information for various freeze conditions that will hold credits from automatic release.

      Note:

      If a TC 846 is posted on an IMF account and CC NOREFP has not been initiated (P- Freeze is not on the account), the CC NOREF action will not intercept the refund. CC NOREF is valid for BMF accounts only, when intercepting a systemic refund.

    32. Do not reject Direct Deposit Non-Receipt Claim manual refunds blocked 6XX. These are valid manual refunds.

    33. Do not reject if account is frozen with "-E" freeze. This is used to release an erroneous levy condition.

    34. CC REFAP enables the user to add a prior day indicator "Y" to the input screen, when the CC RFUND was input during the previous processing day evening real-time. Verify CC RFUND, TC 840 input date prior to CC REFAP input to determine if the "Y" indicator is applicable.

  3. When review is complete and the Form 5792 is accepted for processing, input CC REFAP. See IRM 2.4.20, IDRS Terminal Input, Command Code RFUND/REFAP. Use of the Integrated Automation Technologies (IAT), Manual Refund tool, is recommended when initiating CC REFAP. See http://iat.web.irs.gov/JobAids/iat.asp.

  4. Retain Document Code 45 cases in the functional area by input sequence number within employee number. The next morning associate with Form 5147, IDRS Transaction Record.. Retain case files until the list of refunds are certified. When certification is complete:

    1. Send Part 1, file copy of Form 5792 with applicable back up documentation to Files to be associated with the Form 5147, IDRS Transaction Record.

      Note:

      Form 5792 must be sorted into input sequence number within employee number. Place material in folder and indicate the input date and type of input (IGR). Also a copy of each Form 5792 must be attached to the related refund schedule maintained by Accounting.

    2. Pull all ANMF transaction records with associated case file and forward for input to RRACS.

    3. After ANMF cases have been properly input to RRACS, associate the Form 5147 and forward original copy of the Form 5792, to Files. Attach a copy of the manual refund request to the ANMF Transcript if applicable. A third copy of the Form 5792, should be maintained by the manual refund initiator for appropriate monitoring actions.

    4. Rejecting manual refund requests, see IRM 3.17.79.3.2.1.

  5. CC REFAP enables the user to add a prior day indicator "Y" to the input screen, when the CC RFUND was input during the previous processing day evening real-time. Verify CC RFUND, TC 840 input date prior to CC REFAP, to determine if the "Y" indicator is applicable.

3.17.79.4.2  (01-01-2014)
RFUND/REFAP Mismatch

  1. When CC RFUND/CC REFAP mismatch is identified by the IDRS system (no match) the TC 840 "PN" (pending status) on IDRS changes to "DQ" (Deleted in Quality Review). A CC RFUND/CC REFAP "No Match" transcript (EOD07) is generated to the Accounting Operation, Manual Refund function. All rejects are AC "6" or "7" (identified by the literal "AC" ) on the (EOD07) transcript.

    1. AC "6" condition is caused by failure of related CC RFUND to match on CC REFAP data elements.

    2. When a CC REFAP does not match all data elements of CC RFUND, Accounting will reject, see IRM 3.17.79.3.2.1. When the "DQ" is caused by the input of CC REFAP, the Accounting Operation, Manual Refund function will re-input the manual refund request, CC RFUND.

    3. The CC RFUND must be re-input as originally indicated on the Form 5792, when the "DQ" is caused by the input of CC REFAP, with the exception of any additional credit interest due. (Do not modify interest if under one dollar ($1.00) tolerance) Caution should be taken to include input of any Bypass Indicator (BPI) reflected on the original manual refund request. A BPI identifies the eligibility for a TOP offset, see IRM 21.4.6.3.2 TOP Offset Bypass Indicator.

  2. IDRS will not allow an adjustment to a module by an employee other than the employee to whom an open control base is assigned. Ensure the existing open control base is in "B" status, prior to re-input of the CC RFUND.

  3. AC "7" condition occurs when a CC RFUND or CC REFAP is input without a related CC REFAP or CC RFUND record, respectively.

    1. If the CC REFAP was not input or was input incorrectly, the Accounting Operation, Manual Refund function will input both CC RFUND and CC REFAP to complete processing of the manual refund request..

      Note:

      The Accounting Operation, Manual Refund function will modify the Form 5792 for any additional credit interest (if applicable) and the IDRS Number of Employee re-inputting the CC RFUND. Contact the manual refund initiator to inform them of the reason for the change in the interest amount (if applicable).

    2. If CC RFUND was not input, a Form 5792 was not received, or CC RFUND was input incorrectly, the Accounting Operation, Manual Refund function will reject, see IRM 3.17.79.3.2.1.

    3. The employee inputting CC REFAP cannot be the same employee inputting CC RFUND for the same account.

  4. Following are examples of records which appear to be Mis-Matches on the EOD07 transcript. These records may be either AC "6" or "7" .

    1. Multiple CC RFUND and one CC REFAP - Initiating employee did not use CC TERUP on the incorrect CC RFUND.

    2. Multiple CC REFAP and one CC RFUND - Employee initiating CC REFAP input information and realized it was in error input another CC REFAP (CC TERUP is not available for CC REFAP), or inadvertently input multiple CC REFAP for the same case.

  5. These examples are not all inclusive. Each case should be thoroughly reviewed by the Accounting Operation, Manual Refund function to determine cause.

3.17.79.4.3  (01-01-2013)
Certifying the IDRS Generated Refund (IGR) Tape

  1. Because of the expedite processing provided by the Regional Financial Centers, the "intercept" stop-refunds (CC NOREF, BMF only) capability provided for Master File generated refunds (TC 846) is not available for Form 5792 IDRS Generated Refunds (IGR).

  2. If it is determined prior to the shipment or transmission of the refund tape to the RFC that a refund is incorrect, IDRS provides a limited tape delete capability. If the deletion procedures will result in a day or more delay in shipping the refund tape to the RFC, a Certifying Officer should phone the RFC and request they stop the refund instead. Provide the schedule number, requester's name, and phone number. Ask RFC to call when the action has been completed. Verify whether the total on the SPS/Form 1166 was adjusted or a Form 1098 issued. If the RFC will not stop the refund, attempt to delete the refund from the tape as expeditiously as possible. Hand carry a memorandum or buckslip to the Chief, Computer Branch, requesting preparation of a Delete Card to be input to run EOD 27. Provide the following information on the memo:

    1. TIN and File Source

    2. ULC (valid for Submission Processing Center of input)

    3. MFT

    4. TC 840 Amount

    5. Date of input (YYDDD) (DDD = Julian date)

    6. Zip Code

    7. Submission Processing (Center) Code

  3. When all deletes have been processed, IDRS will produce a corrected IDRS Generated Refund Report (Adjusted) and IDRS Generated Refund Tape.

  4. If refunds were deleted from the tape prior to certification, several corrective measures must be taken to reflect the correct account status. Notify RACS area.

    1. Delete the TC 840 record from TEP if possible; if not, prepare a credit portion of Form 3809, TC 841, Doc Code 48 to reverse TC 840. Cross reference information must be sufficient to establish a clear explanation of events.

    2. Manually adjust the IDRS PJ Recap and the Net Tax Refund Report to remove any deleted items and amounts from the affected Master Files (IMF, BMF, ANMF, IRAF).

    3. Enter a History item (CC ACTON) on IDRS to indicate the refund has been deleted and the case has been returned to the initiator.

    4. Input CC DELETE to eliminate erroneous TC 840 on IDRS Refund Information File (RFIF).

    5. Return case file to the initiator (with reason for deletion) for necessary action (e.g., reversal of adjustments, stop notices, additional adjustments, case monitoring, etc.).

  5. Use the IDRS Generated Refund Report to prepare summary SPS, Voucher and Schedule of Payments. The report contains the total number and amount of refunds on the refund tape; only one refund schedule is required. However, a memo entry reflecting the count and amount of BMF refunds is necessary in order to meet a Bureau of Fiscal Services requirement. The information for the memo entry is available on the IGR Report. Below is an example of the completed Refund Schedule and explanation of each entry. See Figure 3.17.79–35a and Figure 3.17.79–35b.

    Figure 3.17.79-27a
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Figure 3.17.79-27b
    This image is too large to be displayed in the current screen. Please click the link to view the image.

  6. Assign the refund schedule number from IDRS end-of-day run to the SPS/Form 1166 and obtain the signature of the Certifying Officer. The date of the Refund Schedule is always the date signed regardless of the date of IDRS output.

    1. Refund Schedule Number generates from the EOD-2640 run via Control D. IDRS Generated refunds (IGR) and refund schedule number has always generated in the EOD-26 runs. Since July 2002, refund schedule numbers use the definer "W" designating IDRS Generated refunds.

    2. See IRM 3.17.79.4.3, Certifying the IDRS Generated Refund (IGR) Tape.

    3. Control D provides the IDRS End-of-Day (EOD) output.

    4. Secure Payment System (SPS) Screen requires a reel number. Reel number is available from Control D, the BFS MCC/ECC Acknowledgement Report.

    5. See Exhibit 3.17.79–8 (Refund Schedule Number Formats as Entered into SPS).

  7. Since the IDRS Generated Refund is to expedite refund processing, this transmission should be accomplished as early in the day as possible. Retain a duplicate copy of SPS refund schedule with the IDRS Generated Refund Report and the IDRS PJ Recap.

  8. All ANMF transactions must be forwarded for input to RRACS. The IDRS PJ Recap will accompany these ANMF records. See IRM 3.17.79.4.1 for further guidance.

  9. All other transaction records and case files may now be sent for file retention or for other processing to the Master Files in accordance with IRM 3.17.79.4.1.

  10. Retain the SPS refund schedule (triplicate copy) and the IDRS Generated Refund Report to verify and confirm check issuance from the RFC.

  11. A copy of Form 5792 must be attached to the related SPS refund schedule.

3.17.79.5  (10-18-2013)
Accounting Review of Manual Refund Requests, Form 3753

  1. Review Form 3753 for completeness and validate signature of Approving Officer.

  2. Manual refunds are prepared by other Business Operating functions and they also originate in Submission Processing work areas (Paper Processing Branch and Accounting Operations (RIP)).

  3. Accounting Operations has the discretion to reject (see IRM 3.17.79.3.2.1) manual refund requests if Form 3753 data is missing or credit or other supporting documentation is not attached or if there are alterations on the manual refund posting voucher.

    If the Form 3753 Then
    Is complete, accurate and signed by the Authorized Approving Officer on record Approve and process the manual refund.
    Is not signed, or, is incomplete (blank data fields), or necessary supporting documents are not attached, or restricted interest is not computed
    • Section I - Accounting Information, 1–15 (Name and address must match IDRS, pending actions or Form 1310, Form 8379, tax return if attached.

    • Section II - Manual Refund Authority, 1 Reason, 2. Evidence, 3. Interest, Items 4-13 (Control Base Opened is a must enter field)

    • Section III - Interest Computation or COMPA

    • Section IV - Other Remarks and Initiating BOD

    • Section V - Manual Refund Approval, 1-5.

    Obtain missing information or reject (see IRM 3.17.79.3.2.1)
    Is designated and the name and address is not same taxpayer as shown on Master File (Item 10, Make check payable to:) and the account has no TC 971 input or remarks indicating where the credit source file location (e.g., DLN of TC 290, INJ Spouse claim, nnn-nn-nnnn, etc.) Verify that explanation is shown in Section II, Form 3753, and that supporting documentation is attached (e.g., Form 1310, etc.) or advise originator for input of TC 971 audit trail.
    Displays the following (possible duplicate refund conditions):
    • Previous TC 840 or TC 846. See IRM 21.4.4.2(3)

    • Expiration of TC 971, AC 044

    • 92xxx DLN Blocking Series on TC 150 and TC 846

    • TC 971, AC 134

    Note:

    Scheme Developments Centers (SDCs) are no longer authorized to issue manual refunds and accounting should return any Form 3753 back to the initiating SDC that are received.

    • Pending TC 014 or TC 018

    • No TC 971, AC 850 on direct deposit

    • TC 290 with 808, 809, 810, or 811 credit reference numbers

    • TC 972, AC 134

    • No TC 150 posted when refund is requested. See IRMs 21.4.1.4.7 and 21.4.1.4.10(2) Note

    • Bankruptcy: Incorrect closing code on a TC 520. See IRM 5.9.5.6.1

    • Improper Hold Codes on an Adjustment. See Doc 6209 Section 8.16(5)

    • No TC 570 on a credit transfer. See IRM 21.5.8.4.6(3)

    • Refund Holds, TC 570, TC 810, etc.

    Return to originator

  4. Ensure the Secure Payment System (SPS) refund schedule date is as close to the TO date of interest as shown. Normal interest must be computed to the date of the preparation date of Form 1166/SPS. See IRM 20.2.4, Overpayment Interest, for specific details for how to compute interest on manual refunds.

  5. After Form 3753 has been scheduled, input TC 971, AC 664, on the appropriate tax account. Presence of a TC 971 AC 664 indicates that a Form 3753 Manual Refund is in process.

  6. All SP initiated manual refunds must be controlled for secondary monitoring by the Accounting function. It is the discretion of management to select the team that will work the aged inventory listing (CCA). Each SPC is required to use a unique team identifier, that will automatically generate all open controls to the weekly aged inventory listing (CCA). This is a secondary monitoring performed by the Accounting function and does not require the use on the EMT tool. Monitoring the Case Control Activity (CCA) list must be performed on a weekly basis.

  7. The DEO, will then input refund documents into SPS for certification

  8. To input TC 840 to MF, assign a DLN to Form 3753 using Document Code 45. Enter the DLN of the original document (if available) in the appropriate space.

  9. Prepare Form 813 in duplicate.

  10. File Form 1331B, Form 3354, and other documents with the triplicate copy of the related SPS/Form 1166.

  11. Attach duplicate Form 3753 to the adjustment document. Hold to file with the confirmed copy of the refund schedule, annotated with the confirmation date from the RFC.

  12. Route triplicate Form 3753 to Files to be associated with the return.

  13. Route original document and Form 813 batch work to Data Conversion for transcription and posting to master file.

3.17.79.6  (01-01-2014)
Standard Form (Form) 1166, Voucher and Schedule of Payments and Secure Payment System (SPS)

  1. IRS must certify (e.g., to sign or to validate) the tax refunds and other IRS disbursement payments issued by Treasury. The Form 1166, Voucher and Schedule of Payments or the Bureau of Fiscal Services (BFS) Secure Payment System (SPS). SPS is the BFS automated mechanism to certify refunds to the U.S. Treasury's Regional Financial Centers (RFC). This IRM Subsection describes procedures to prepare, transmit and certify refund schedules to issue tax refunds.

    1. SPS is the preferred method to certify Treasury disbursements. Enterprise Computing Center (ECC) - Martinsburg, and each Submission Processing Center delegates authority to certify refunds, and certifies disbursements on-line via SPS. Developed by Bureau of Fiscal Services in 2004, SPS systems support and software is provided by the Bureau of Fiscal Services Regional Financial Center(s).

    2. San Francisco Regional Financial Center (SFRFC) is the primary tax refund processing RFC for IRS. SFRFC issues Master File generated, IDRS Generated and manual refunds.

    3. Certain non-tax payment files continue to be transmitted or wire-transferred to the local Regional Financial Center for processing IRS disbursements.

    4. Confirmation data is transmitted by the respective Regional Financial Center through the RFC Link/Intra-governmental Payments And Collection System (IPAC, formerly known as GOALS).

3.17.79.6.1  (01-01-2014)
Scheduling Refunds

  1. Refunds are scheduled and certified on the Bureau of Fiscal Services (BFS) Secure Payment System (SPS).

  2. Manual refunds issued after the last posting cycle of the calendar year are not posted to the Master File (MF) in sufficient time for interest amounts to be extracted for the Master File preparation of Form 1099INT, Interest Income.

    1. These refunds do not post to the Master File until after Cycle 01 the following year.

    2. Procedures for issuing Form 1099INT Copy B are outlined in IRM 3.17.79.7.1, Form 1099INT, Interest Income, Copy B To Recipient.

  3. The Accounting Operations area inputs a history item on IDRS for each Form 3753 scheduled when they prepare and schedule the SPS or Form 1166 Voucher and Schedule of Payments (e.g., Refund Schedule). The history item is input via Command Code (CC) ACTON the day the refund is scheduled. (See Figure 3.17.79-36).

  4. All Form 3753 that have been reviewed and are being processed must have a TC 971 AC 664 input on the module that the manual refund is being issued from. The presence of a TC 971 AC 664 indicates that a Form 3753 Manual Refund is in process. This will alert anyone reviewing the account that a Form 3753 is being processed. This is to be completed as follows:

    • Access command code FRM77

    • Input 971 in the transaction code (TC) field and 664 in the action code (AC) field, on the appropriate tax account. This must be input the same day the Form 3753 is approved and scheduled in SPS.

    • The remarks field must be populated with "Form 3753 IN PROCESS."

  5. New ISRP programming initiated by the Custodial Account Processing (CAP) office of the Chief Financial Officer now transcribes the Refund Schedule Number for Document Codes 45.


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