4.19.24  Compliance Identity Theft

Manual Transmittal

April 12, 2013

Purpose

(1) This transmits new IRM 4.19.24 Liability Determination, Compliance Identity Theft.

Material Changes

(1) This IRM section contains information on general procedures for administrative matters and provides references for common issues and related items that might be found during the resolution of identity theft-impacted accounts.

Effect on Other Documents

None

Audience

This IRM is intended for the use of the SB/SE (Small Business/Self-employed) and W&I (Wage and Investment) Campus Examination Operations.

Effective Date

(04-12-2013)

Steve Klingel
Director, Reporting Compliance
Wage and Investment Division

4.19.24.1  (04-12-2013)
Compliance Post Adjustment Teams (CPAT) and Designated Identity Theft Adjustment (DITA) Teams

  1. The Compliance Account Resolution program was created to address account adjustment work related for all Small Business and Self Employed (SB/SE), Large Business and International (LB&I) and Wage and Investment (W&I) Compliance functions’ identity theft claims and return preparer misconduct claims. The work consists of inputs to internal IRS systems to correct taxpayers’ accounts requested by internal referrals from the Compliance functions.

  2. This function interacts only with internal stakeholders. Any communication with taxpayers, third parties or other outside contacts is done through issuance of standard letters required for the account resolution. CPAT/DITA will not respond to taxpayer inquiries directly. There is no telephone operation support within CPAT/DITA.

  3. The work in this program is centralized within SB/SE and W&I campuses.

    1. SB/SE work is completed at the Philadelphia Campus Compliance Services in the Designated Identity Theft Adjustments (DITA) teams. The DITA teams receive referrals from LB&I and SB/SE.

    2. W&I work is completed at the Austin and Fresno Campus Compliance Services in the Compliance Post Adjustment teams (CPAT). The CPAT teams receive referrals from W&I.

  4. The adjustment work is separated into two programs:

    1. Identity Theft

    2. Return Preparer Misconduct

  5. The Identity Theft (IDT) work includes preparing, requesting and inputting the account adjustments to remove the identity thief’s return from the valid owner’s account for complete account resolution. All preliminary actions, including ID theft determination, are completed by the function "owning" the ID theft claim.

  6. The Return Preparer Misconduct (RPM) work includes preparing, requesting and inputting the account adjustments to correct the return information and remove any incorrect credits to a non-master file account assigned to the return preparer. All preliminary actions, including RPM determination, are completed by the function "owning" the RPM claim. Procedures for resolving RPM cases will be in IRM 4.19.25, Compliance Return Preparer Misconduct.

4.19.24.1.1  (04-12-2013)
Standard Procedures

  1. This section provides general guidance on procedures standard for all cases.

4.19.24.1.1.1  (04-12-2013)
Related IRMs and Links

  1. Other IRM chapters provide information on single topics that pertain to more than one function. Compliance employees are responsible for researching and utilizing information contained in all reference materials. The following is a list of IRM chapters pertaining to Compliance programs (not all inclusive):

    • IRM 2.3, IDRS Terminal Responses

    • IRM 2.4, IDRS Terminal Input

    • IRM 3, Submission Processing

    • IRM 4, Examining Process

    • IRM 4.4, AIMS/Processing

    • IRM 4.19, Liability Determination

    • IRM 5, Collecting Process

    • IRM 5.1.18, Locating Taxpayers and Their Assets

    • IRM 5.19, Liability Collection

    • IRM 10.5.3, Identity Protection Program

    • IRM 11.3, Disclosure of Official Information (see also IRM 21.1.3.2, General Disclosure Guidelines)

    • IRM 13, Taxpayer Advocate Service

    • IRM 20.1, Penalty Handbook

    • IRM 20.2, Interest

    • IRM 21.1, Accounts Management and Compliance Services Operations

    • IRM 21.4.4, Manual Refunds

    • IRM 21.5, Account Resolution

    • IRM 21.6, Individual Tax Returns

    • IRM 21.9, Specialized Accounts Management Programs

    • IRM 25.1, Fraud Handbook

    • IRM 25.6, Statute of Limitations

  2. There are many resources and tools available to Compliance employees. The following is a list of common tools available for resolving accounts (not all inclusive):

    • Document 6209, IRS Processing Codes and Information

    • Campus Compliance Resource Portal

    • Accounts Management Research Portal – Identity Theft

    • Integrated Automation Technologies (IAT) Tools

4.19.24.1.1.2  (04-12-2013)
Glossary of Abbreviations and Terms

  1. Some of the IRS acronyms used in CPAT/DITA are listed below. Others can be found in the Document 6209, IRS Processing Codes and Information.

  2. IRS Acronyms are listed electronically. See http://rnet.web.irs.gov/km/AcronymsDB/commonacronyms.asp.

    Acronym Term/Definition
    23C Assessment Date; Master File Notice Date
    AC Action Code
    ACS Automated Collection System
    ACSS Automated Collection System Support
    ADJ Adjustment
    AEIC/AEITC Advanced Earned Income Tax Credit
    AGI Adjusted Gross Income
    AIMS Audit Information Management System
    AM Accounts Management
    AMS Account Management System
    AMTAP Accounts Management Taxpayer Assurance Program
    AO Area Office
    AOC American Opportunity Credit
    ARRA American Recovery and Reinvestment Act
    ASED Assessment Statute Expiration Date
    ASFR Automated Substitute For Return
    AUR Automated Underreporter
    BMF Business Master File
    BOD Business Operating Division
    CAT A Category A Claims
    CC Closing Code
    CC Command Code
    CCP Centralized Case Processing
    CDP Collection Due Process
    CEAS Correspondence Examination Automation System
    CFC Campus Fraud Coordinator
    CFf Collection Function field
    CIS Correspondence Imaging System
    CN Common Number
    CORR Correspondence Examination
    CPAT Compliance Post Adjustment Team
    CRN Credit Reference Number
    CSCO Compliance Services Collection Operations
    CTC Child Tax Credit
    DC Disposal Code
    DDb Dependent Database
    DIF Discriminate Function
    DITA Designated Identity Theft Adjustment Team
    DLN Document Locator Number
    DMF Debtor Master File
    DUPF Duplicate Filing (DupFile)
    EFDS Electronic Fraud Detection System
    EFIN Electronic Filer Identification Number
    EFT Electronic Funds Transfer
    EGC Employee Group Code
    EIC/EITC Earned Income Tax Credit
    EIN Employer Identification Number
    ELF Electronic Filing System
    ERCS Examination Returns Control System
    ES Estimated Tax
    ESP Estimated Tax Penalty
    FICA Federal Insurance Contribution Act
    FIRP Foreign Information Return Program
    FLC File Locator Code
    FP Full Paid
    FRC Federal Records Center
    FRP Frivolous Return Program
    FTA Fraud Technical Advisor
    FTP Failure to Pay
    FUTA Federal Unemployment Tax Act
    FWT Federal Withholding Tax
    FY Fiscal Year
    GII Generalized IDRS (Integrated Data Retrieval System) Interface
    HC Hold Code
    HCTC Health Coverage Tax Credit
    HHET Household Employment Tax
    HOH Head of Household
    HPTF Hardcore Payment Tracer Function
    ICP Integrated Case Processing
    IDRS Integrated Data Retrieval System
    IDT Identity Theft
    IMF Individual Master File
    IMFOL Individual Master File On-Line
    IPSU Identity Protection Specialized Units
    IRMF Information Return Master File
    IRN Item Reference Number
    IRP Information Returns Processing
    IRSN Internal Revenue Service Number
    IT Income Tax
    ITL Identity Theft Liaison
    IVO Integrity and Verification Operation (formerly AMTAP)
    LIHC Low Income Housing Credit
    LB&I Large Business and International
    ME Math Error
    MF Master File
    MFJ Married Filing Jointly
    MFS Married Filing Separate
    MFT Master File Tax (Code)
    NAP National Account Profile
    NC Name Control
    NIF Not In Files
    NMF Non Master File
    NQRS National Quality Review System
    NRA Non-Resident Alien
    NRP National Research Project
    NSD No Source Document
    NU Nullified Unpostable
    NUMIDENT Social Security Administration (SSA) File Number
    OIC Offer In Compromise
    OLE On-Line Entity
    PBA Principal Business Activity Code
    PBC Primary Business Code
    PC Priority Code
    PIN Personal Identification Number
    PN Pending Transaction
    POA Power of Attorney
    POD Post of Duty
    PSP Planning and Special Programs
    PSSN Primary Social Security Number
    PY Processing Year
    QRP Questionable Refund Program
    R&C Receipt and Control
    RC Reason Code
    RGS Report Generation Software
    RI Recertification Indicator
    RO Revenue Officer
    RPC Return Processing Code
    RPD Return Processing Date
    RPM Return Preparer Misconduct
    RPS Remittance Processing System
    SB/SE Small Business/Self Employment Operating Division
    SBC Secondary Business Code
    SC Source Code
    SC Status Code
    SD Source Document
    SE Self-Employment
    SEI Self-Employment Income
    SET Self-Employment Tax
    SFR/SUB Substitute for Return
    SP Submission Processing
    SSA Social Security Administration
    SSN Social Security Number
    SSSN Secondary Social Security Number
    SST Social Security Tax
    TAS Taxpayer Advocate Service
    TC Transaction Code
    TDI Taxpayer Delinquency Investigation
    TE Tax Examiner
    TEFRA Tax Equity and Fiscal Responsibility Act of 1982
    TETR Telephone Excise Tax Refund
    TIA Taxpayer Information Authorization
    TIF Taxpayer Information File
    TIN Taxpayer Identification Number
    TP Taxpayer
    TPI Total Positive Income
    TPP Taxpayer Protection Program
    TY Tax Year
    ULC Universal Location Code
    UPC Unpostable Code
    URC Unpostable Resolution Code
    W&I Wage and Investment
    WT Withholding Tax

4.19.24.1.1.3  (04-12-2013)
Systems Used

  1. CPAT and DITA may use the following applications or systems:

    1. AMS – Account Management Services

    2. ACCURINT – on-line tool available through Lexis-Nexis

    3. CIS – Correspondence Imaging System

    4. CEAS – Correspondence Exam Automation Support

    5. EUP – Employee User Profile

    6. IAT – Integrated Automation Technologies

    7. IDRS – Integrated Data Retrieval System

    8. ITIN RTS – Individual Taxpayer Identification Number Real-Time System

    9. MeF – Modernized E-File

    10. RTR – Remittance Transaction Research system

    11. TCIS – Treasury Check Information System

4.19.24.1.1.4  (04-12-2013)
Some Forms Used by CPAT/DITA

  1. This list is not all inclusive.

    Form Number Title
    Form 668-D Release of Levy
    Form 1725 Routing Slip
    Form 2275 Records Request, Charge and Recharge
    Form 2859 Request for Quick or Prompt Assessment
    Form 3210 Document Transmittal
    Form 3809 Miscellaneous Adjustment Voucher
    Form 3893 Re-Entry Document Control
    Form 4442 Inquiry Referral
    Form 4844 Request for Terminal Action
    Form 5792 Request for IDRS Generated Refund
    Form 8758 Excess Collections File Addition
    Form 9956 Request for Temporary IRSN
    Form 12412 Operations Assistance Request
    Form 12810 Account Transfer Request Checklist
    Form 12857 Refund Transfer Posting Voucher
    Form 13596 Reprocessing Returns
    Form 13794 Request for Release/Partial Release of Lien
    Form 14027-B Identity Theft Case Referral
    Form 14039 Identity Theft Affidavit
    Form 14103 Identity Theft Assistance Request (ITAR)
    Form 14394 Identity Theft/Return Preparer Misconduct Case Collection Alert Form
      Compliance Referral Worksheet

4.19.24.1.1.5  (04-12-2013)
Prioritization of Work

  1. Identify cases assigned to CPAT/DITA that require immediate attention. These include identity theft cases with:

    1. Statute Imminent cases

    2. Taxpayer Advocate (TAS) cases

    3. Compliance Immediate Action Requests

    4. ITARs – Form 14103 Identity Theft Assistance Request

    5. Campus and Field Exam referrals that request to be expedited so an audit can continue on SSN owner

    6. High Income cases

    7. Unpostables

  2. All other inventory will be worked in IRS received date order.

4.19.24.1.1.6  (04-12-2013)
Inventory Control

  1. All inventory will be monitored and controlled using Account Management System (AMS) and Integrated Data Retrieval System (IDRS) control bases.

4.19.24.1.1.7  (04-12-2013)
Time Recording

  1. The following program codes have been established for the technical work performed by the CPAT and DITA teams:

    Function Program Description CPAT DITA
    710 61010 Identity Theft Referrals from Campus Compliance X X
    710 61011 Referrals from Exam Discretionary X X
    710 61012 Referrals from AUR X X
    710 61013 Referrals from ACS/ACS Support X X
    710 61014 TAS referrals X  
    710 61014 Referrals from CSCO/Non-ASFR   X
    710 61015 Referrals from ASFR/TDI X  
    710 61015 Referrals from ASFR   X
    710 61016 Referrals from Other organizations X X
    710 61017 Referrals from Exam EITC X X
    710 61018 Global Reviews X X
    710 61019 ITARS X  
    710 61019 TAS/ITARS   X
    710 61020 Preparer Misconduct Referrals from Campus Compliance X X
    710 61021 Referrals from Exam Discretionary X X
    710 61022 Referrals from AUR X X
    710 61023 Referrals from ACS/ACS Support X X
    710 61024 TAS referrals X  
    710 61024 Referrals from CSCO/Non-ASFR   X
    710 61025 Referrals from ASFR/TDI X  
    710 61025 Referrals from ASFR   X
    710 61026 Referrals from Other organizations X X
    710 61027 Referrals from Exam EITC X X
    710 61028 Global Reviews X X
    710 61029 ITARS X  
    710 61029 TAS/ITARS   X
    710 61050 Identity Theft Referrals from Field Components X
    710 61051 Referrals from Field Exam   X
    710 61052 Input of IDT Indicators for Field Exam   X
    710 61054 Referrals from Field Collection   X
    710 61055 Input of IDT Indicators for Field Collection   X
    710 61058 Referrals from LB&I   X
    710 61059 Input of IDT Indicators for LB&I   X
  2. Lead and/or Identity Theft or Identity Theft Assistance Request (ITAR) Liaisons will report time completing identity theft work using the table in (1) and function 720.

  3. Clerks will report time under function 790:

    1. 61010 Identity Theft Referrals from Campus Compliance

    2. 61020 Preparer Misconduct Referrals from Campus Compliance

    3. 61050 Identity Theft Referrals from Field Components

4.19.24.1.1.8  (04-12-2013)
Documentation of Actions

  1. All actions taken on taxpayer accounts will be documented on AMS and IDRS. If the case is worked on CIS, ensure case actions are also documented on this system.

  2. Case documentation will contain sufficient information to allow another employee to easily determine what actions were taken and what further actions are required to resolve the case. Accurate documentation promotes quality, prevents duplication of efforts by other employees, and enables phone assistors to provide accurate updates to phone inquiries.

  3. Case documentation including the TIN Related Worksheet must include all information and actions taken to resolve the case for the tax module where the actions are taken. Include the following:

    1. Common Number (CN)

    2. IRS or CP notice receive date

    3. Tax periods involved (only tax periods where actions were taken)

    4. Each taxpayers name, address and IRSN (if applicable)

    5. Research requests (e.g. command codes (CC) IMFOL, MFTRA), include dates

    6. DLN of returns requested

    7. Other TINs and actions taken

    8. Any letters issued to the taxpayer as a result of the Identity Theft resolution (i.e., Letter 4310, Letter 474C)

4.19.24.1.1.9  (04-12-2013)
Unpostables

  1. Unpostable transactions are IDRS transactions that fail to pass the required validity checks and do not post to Master File. Unpostable adjustments can delay the resolution of a case up to eight weeks, which negatively impacts the taxpayer. Most unpostable conditions can be prevented by thoroughly reviewing IDRS before making any adjustments or credit transfers.

  2. Unpostable transactions are returned to the originator of the adjustment for timely corrective action. Unpostable cases must be worked within seven business days of receipt.

  3. To resolve an unpostable condition, refer to IRM 3.12.32, General Unpostables.

  4. The UPTIN Histories Tool on IAT can be used to research and resolve unpostables. The tool is designed to assist users with input of histories on CC UPTIN.

  5. Unpostables on OARs will be corrected within 3 days of identification.

4.19.24.1.1.10  (04-12-2013)
Taxpayer Advocate Service (TAS)

  1. Taxpayers may request assistance during or after compliance action. The request must meet criteria as listed in IRM 13.1.7.2, TAS Case Criteria. Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), will be prepared by TAS or by the identifying function.

  2. CPAT/DITA will only work TAS referrals within the scope of the account adjustment and resolution actions. Any referrals that include reconsideration or applying function-specific guidelines will be rejected to TAS for assignment to the function.

  3. When completing actions required to resolve an Operation Assistance Request (OAR), CPAT/DITA will complete any required adjustments and prepare required forms for Submission Processing functions, including Accounting. The forms will accompany the completed Form 12412, Operation Assistance Request, to TAS. TAS will open a new OAR to the SP function and forward the forms for processing.

  4. Referrals received from the CP Specialized Teams with actions completed based on OARs or designated as "expedite" will be given expedite treatment.

  5. Accounts adjusted during the completion of an OAR will be monitored for unpostable transactions. Unpostables on OARs will be corrected within 3 days of identification.

4.19.24.1.1.11  (04-12-2013)
Accounts Management Referrals

  1. Accounts Management (AM) will forward referrals to CPAT/DITA based on open control base assignment. If the referral involves reconsideration of the compliance issues and not inquiring into the delay of the account resolution, the CPAT/DITA ID theft liaison will reject the referral to AM with instruction to forward to the responsible Compliance function.

  2. The Identity Protection Specialized Unit (IPSU) in W&I Accounts Management assists taxpayers who are, or may become, victims of ID Theft. When a taxpayer contacts this unit, IPSU researches the account to determine if another function has an open control on the case. If there is an open control or prior Compliance activity, IPSU will prepare Form 14027-B, Identity Theft Case Referral, and route it the Functional ID Theft Liaison for that area. A list of liaisons can be found on the Who/Where Tab on Servicewide Electronic Research Program (SERP).

  3. Upon receipt of the Form 14027-B the CPAT/DITA teams will be responsible for the following:

    1. Acknowledge receipt of the form by filling out Section V on page 2 and fax back to IPSU through their liaison. Notate receipt of Form 14027-B on IDRS and/or AMS.

    2. When the case is resolved and the IDRS control is closed, complete Form 14027-B through Section VIII and return it to IPSU through their liaison.

  4. If the Form 14027-B received should be worked by another function, return the Form 14027-B and notate the reason for rejecting and return to IPSU.

  5. Upon receipt of Form 14103, Identity Theft Assistance Request (ITAR), the receiving function is responsible for the following:

    1. Acknowledge receipt within five business days via secured e-mail or fax number provided in Section II Box 3.

    2. Prioritize the ID Theft case associated with the Form 14103

    3. Review Section IV Specific Assistance Requested and determine if the requested actions and completion date are acceptable. Contact the referring IPSU employee to resolve any issues with the Form 14103.

    4. When the requested actions have been taken, complete Sections V and VI on Form 14103 and fax to the IPSU team at the fax number located in Section II, Box 3.

4.19.24.1.1.12  (04-12-2013)
Action 61

  1. Inventory assigned to CPAT/DITA is not subject to the guidelines established for Action 61/Policy Statement P-21-3.

  2. The function specialized teams are responsible for acknowledging the identity theft claim and subsequent follow-ups until the account resolution is complete.

4.19.24.1.1.13  (04-12-2013)
Disclosure

  1. One of the cornerstones of the American tax system is confidentiality. The taxpayers must feel secure in sharing private and detailed financial information with the government. As such, all employees have a responsibility to ensure that the privacy and confidentiality of tax records are given the highest degree of security.

  2. All employees must be familiar with the basic information available in IRM 21.1.3.1, Overview. More detailed information is also available in IRM 11.3, Disclosure of Official Information, and from the Disclosure Help Desk at 1-866-591-0860.

4.19.24.1.1.14  (04-12-2013)
Discovered Remittances

  1. Cash and non-cash remittance found outside the secured area of Receipt and Control or Campus Support is “discovered remittance.”

  2. If a discovered remittance is found in your area, immediately notify your manager or lead and take the following actions. Follow procedures in IRM 3.8.46.1, Discovered Remittances.

4.19.24.1.1.15  (04-12-2013)
Appeals/Tax Court

  1. Any referrals with prior Appeals or Tax Court activity received in CPAT/DITA will be processed as normal identity theft referrals.

  2. When CPAT/DITA has an adjustment under way and an Appeals control subsequently arises in IDRS, complete the ID theft adjustment based on the findings of the BOD which confirmed the ID theft and submitted the request to make the taxpayer whole.

4.19.24.1.1.16  (04-12-2013)
Fraud

  1. The resolution of ID theft claims provides an opportunity to identify consistencies in the information filed on identity theft returns.

  2. The discovery and development of fraud is the result of effective investigative techniques. Techniques employed by compliance employees should be designed to disclose not only errors in accounting and application of tax law, but also irregularities that indicate the possibility of fraud.

  3. When a campus examiner identifies indicators of fraud he/she will discuss the indicators with the team leader/manager. If the team leader/manager concurs, the examiner will prepare Form 13549, Campus Fraud Lead Sheet, and submit the case according to IRM 25.1.14, Campus Examination Fraud Procedures. CFC will not accept cases where the perpetrator is unknown.

4.19.24.1.1.17  (04-12-2013)
Disaster Relief

  1. The IRS has a wide range of relief options for use in responding to disasters. The severity of the disaster and the proximity of tax deadlines are the primary factors in determining the level of relief that is provided. See IRM 25.16, Disaster Assistance and Emergency Relief.

4.19.24.1.2  (04-12-2013)
Referral Procedures

  1. CPAT/DITA was established to address post function account adjustments to resolve Identity Theft accounts. These cases require adjustment activity beyond the IRM or procedural scope of the referring function. Once a function has completed all of the actions for which they are procedurally responsible, the case is referred to CPAT/DITA on a Form 3870, Request for Adjustment, Form 4442, Inquiry Referral, or on the CP Worksheet and Research Checksheet for the remaining actions needed to make the taxpayer whole.

  2. The referrals to CPAT/DITA will provide information on the determination made and the adjustments required to resolve the account. Incomplete referrals will be rejected by CPAT/DITA to the originating function.

  3. Referrals to CPAT/DITA will be made by:

    1. Hand carrying to team if applicable

    2. Mail

    3. Fax and e-fax

    4. Secure e-mail box – required for Field IDT indicator requests

  4. Case controls are established for each tax year (module) by the referring function to identify the CPAT/DITA site and case type. Follow instructions for inputting case controls provided in the IDT Control Base Input Job Aid.

  5. Upon receipt, CPAT/DITA will update the control base and assign the account to employee number 99999 to indicate receipt. The update and acknowledgement to the referring team will be completed within 5 business days of receipt in the team. The Case Status will be updated to A – Active to prevent other employees from completing actions or adjustments on the account.

  6. CPAT/DITA employees may identify the ID theft referral was incomplete or made in error. The referral and account information will be reviewed by the CPAT/DITA liaison. If the liaison is in agreement, the referral will be rejected by fax to the function's ID theft liaison for necessary action.

    1. The liaison will update the referral document or CP Referral Checksheet with the reject reason.

    2. The control base will be reassigned to the referring specialized team and assigned to employee number 00000 and fax or e-mail the referral package.

    3. If a case is not received, do not close the control, update the IDRS controls to the referring specialized team and assign to employee number 00000 with the activity field literal REJECT.

    4. Rejected Field referrals will be faxed back to the originator with the reject reason clearly identified on the referral document. If a fax number is not available, contact the originator via telephone or e-mail to obtain a fax number.

  7. CPAT/DITA will maintain the referral files by Social Security Number (SSN).

  8. Referrals issued as a result of an OAR or ITAR worked by the functions are worked as a priority by the CPAT/DITA teams. The specialized team will notate "OAR" or "ITAR" at the top of the referral document.

  9. The CPAT/DITA teams will monitor their inventory using the following weekly reports available through Control-D; see IRM 1.4.16.8.6, Control-D.

    1. CCA 4243, IDRS Overage Case Report

    2. CCA 4242, IDRS Inventory Control Report

    3. CCA 4244, IDRS Multiple Case Control Report

  10. Inventory receipts and closures, including a monthly listing of open TINs and a weekly listing of closed TINs (W&I only) will be provided to the applicable HQ analysts.

4.19.24.1.2.1  (04-12-2013)
Field Referrals to DITA

  1. In addition to receiving referrals from SB/SE Campus Compliance functions, DITA will receive ID Theft case referrals from Field Exam, Field Collections and LB&I.

  2. Referrals from the Field functions will include:

    1. Form 4442, Inquiry Referral for post function adjustment work

    2. Form 3870, Request for Adjustment

    3. Form 4844, Request for Terminal Action to input the appropriate ID Theft indicators, such as TC 971 AC 522 and TC 972 AC 522.

    Reminder:

    It is important to record your time under the correct program code when working the Field referrals. Refer to IRM 4.19.24.1.1.7, Time Recording, for the list of the DITA ID Theft program codes.

  3. In certain cases, the Revenue Agent/Officer may request their case be expedited so they can continue auditing the SSN owner or continue collection activity after DITA removes the bad information from the account. If a case needs to be expedited, the following actions will be taken:

    1. The Revenue Agent/Officer will notate “Expedite” at the top of the Form 4442 or Form 3870.

    2. The case will be assigned and worked expeditiously.

    3. When the case has been completed, the DITA tax examiner will send verification to the Revenue Agent/Officer via e-mail to confirm that the post function work has been completed.

4.19.24.1.2.2  (04-12-2013)
Multiple Controls

  1. Examiners will check IDRS for multiple open controls on the same or other tax periods. If so, all tax years for one taxpayer should be worked by the same tax examiner. This will prevent duplication of work, potential unpostables and incorrect adjustments on a module.

  2. In most cases, the employee with the earliest IDT specialized control date will work all tax years. AM, SP, or TAS employees are not authorized to adjust AUR and Exam adjustments. CPAT/DITA employees will take ownership even though AM, SP, or TAS established the earliest control.

  3. If any control bases are in Status A or B, the assigned employee must be contacted before taking action on the account. Once contact is made with the assigned employee or their manager, allow 3 business days for a response before continuing with case actions.

  4. Not all Compliance functions can address or reverse an assessment made by another function. Follow the Identity Theft Transfer Matrix below to determine ownership. The matrix outlines the function, their authority and where cases will be transferred.

    Function Authority Transfers From
    Tax Court Prior Tax Court assessments will be addressed by the original CP function. Exam, AUR, ASFR, CSCO, ACSS, Field Collection
    Accounts currently assigned to Tax Court will be addressed by Tax Court.
    Appeals Prior Appeals assessments will be addressed by the original CP function. Exam, AUR, ASFR, CSCO, ACSS, Field Collection
    Accounts currently assigned to Appeals will be addressed by Appeals.
    Exam (SB/SE Field Exam, SB/SE Corr Exam, W&I Corr Exam) Address own assessments and AUR, and ASFR Exam, AUR, ASFR, CSCO, ACSS, Field Collection
    AUR (SB/SE AUR and W&I AUR) Address own assessments AUR, CSCO, ACSS, Field Collection
    ASFR (SB/SE ASFR and W&I ASFR) Address own assessments ASFR, CSCO, ACSS, Field Collection
    CSCO Assessments not made  
    Field Collection Assessment not made  
    CPAT/DITA Assessments made by any function Exam, AUR, ASFR, CSCO, ACSS, Field Collection, Field Exam and LB&I
    ACSS Address assessments made on original filing and amended return assessments in status 22/24  
  5. For instances where there are 3 or more separate functions with controls on any year, refer the case to your manager or lead to negotiate ownership.

4.19.24.1.3  (04-12-2013)
Examiner Procedures

  1. Account resolutions are worked in accordance with IRM 10.5.3, IRM 21.4, IRM 21.5, IRM 21.6, and IRM 21.9, except where stated otherwise in this IRM.

  2. CPAT/DITA examiners work the majority of their inventory as paper cases outside of CIS.

  3. While CPAT/DITA completes account adjustments historically completed by AM, CPAT/DITA are Compliance teams and are not restricted from addressing accounts with open Compliance controls (i.e., Exam –L, prior TC 300, and prior AUR adjustments).

  4. CPAT/DITA examiners are responsible for completing the corrective adjustments to remove transactions/assessments related to the identity theft incident from impacted accounts. The referring functions are responsible for making the ID theft determination prior to referring the adjustment request. CPAT/DITA will generally not review the determinations made by the referring function for accuracy.

4.19.24.1.3.1  (04-12-2013)
Researching Cases

  1. Before taking action on an account, research must be completed to review the pending and posted transactions, status, and controls on master file. All impacted modules must be reviewed including modules associated with the account by credit transfers and refund offsets. The employee who processes the case must consider all information to resolve the case thoroughly and accurately.

  2. IAT tools will be used whenever possible to conduct research, complete forms and input account adjustments. The most common tools are:

    1. xClaim Tool – provides an interface to prepare and complete adjustment actions

    2. Fill Forms – auto-populates account to common forms

    3. Refund Suite – required for preparing and inputting manual refunds

    4. Address – assists with inputting address changes

    5. Credit Transfer Suite - automates the transfer of credits from one module to another

    6. REQ54 – assists with inputting adjustments

    7. REQ77 – assists with inputting actions on accounts

    8. Mixed Scrambled Entities Tool - populates IRPTR data from IDRS to assist in determining the legitimate taxpayer SSN owner.

4.19.24.1.3.2  (04-12-2013)
Freeze Codes

  1. Freeze codes are alpha codes that are generated either systemically or manually on IDRS to identify specific account conditions. The term "freeze code" may be misleading since not all alpha codes indicate activity within a module or account is frozen.

  2. Freeze codes are used for various reasons, such as holding a refund, preventing offsets or alerting others that the case is assigned to a specialized function such as Exam or Criminal Investigation.

  3. For a complete list of Freeze Code conditions, refer to Document 6209, IRS Processing Codes and Information, Section 8 for a detailed explanation of each freeze code.

  4. CPAT/DITA teams will complete actions on accounts with –L freezes, open AIMS accounts in Examination.

  5. Some adjustments or credit transfers may require the input of a TC 570, which places a –R Freeze on the account to prevent a credit from refunding or offsetting to another year. Refer to IRM 21.5.8.4.6, TC 570 and Bypass Indicator.

4.19.24.1.3.3  (04-12-2013)
TC 971 AC 5XX Requirements

  1. Verify TC 971 AC 522 input was completed by the referring function. If not present, input the applicable TC 971 AC 522 information per IRM 10.5.3, Identity Protection Program. The information will reflect the referring function codes.

  2. When the account resolution is complete, input TC 971 AC 501 or AC 506 using the referring function codes and with the appropriate Posting Delay Code.

  3. Beginning January 1, 2012, the Compliance functions were granted the authority to close accounts as IRS identified identity theft using TC 971 AC 506. Input of the TC 971 AC 506 using the WI EXAM literals is not allowed and will be input as “SBSE CORR OTHER”.

4.19.24.1.3.4  (04-12-2013)
Collection Activity

  1. It is critical that the taxpayer is not harmed once it has been determined that they are a victim of ID Theft. The referring function will address any collection activity for all impacted years prior to making the referral to CPAT/DITA. They will notate on the referral what collection actions were taken and attach a copy of Form 14394, Identity Theft Collection Alert.

  2. New referrals received in CPAT/DITA must be screened within 3 days of receipt to determine if the collection activity has been addressed by the referring function for all referred years. See (4) for screening criteria.

  3. In the best interest of the taxpayer, if the referring function did not address the collection activity for all referred years, CPAT/DITA will complete the required collection actions.

  4. The following scenarios must be considered:

    1. Is the collection status 20, 56, or 58?

    2. Is the collection status 22, 24, or 26?

    3. Did the taxpayer indicate they have an active levy against them? Levy payments will have a TC 670 DPC 05.

    4. Did the taxpayer indicate that the IRS has filed a Federal Tax Lien in error?

    5. Look for an unreversed TC 582.

    6. Is there a TC 971 with literals “FPLP” (Federal Payment Levy Program)?

    7. Cases subject to the FPLP will have a TC 971 AC 062, and levy payments will have a TC 670 DPC 18.

    Note:

    It is important to determine if the actions listed above are the result of the fraudulent activity before any actions are taken to stop enforcement action. It is possible that the SSN owner had balance due tax periods prior to the ID Theft occurrence.

  5. If the collection status is 20, 56 or 58, input TC 470 with no closing code to freeze collection notices.

  6. If paragraph (4) b), c), f), or g) above are applicable, the case is in Status 22 or 24 and did not originate from ACS Support, verify a Form 14394 was sent to ACSS. If ACSS was not notified follow instructions for issuing Form 14394 as indicated on the form.

  7. If the collection status is 26 and the case did not originate from the field, verify a Form 14394 was sent to the RO. If the RO was not notified, follow instructions for issuing Form 14394 as indicated on the form.

  8. If there is a TC 582 (lien indicator) posted and a full abatement will reverse the tax liability to zero, prepare Form 13794, Request for Release, Partial Release, of Notice of Federal Tax Lien. Form 13794, should be completed and forwarded to Collection Advisory at the same time the Form 14394 is being forwarded to the appropriate function as indicated on the form.

    Note:

    Only Collection Advisory have the authority to release lien fees (TC 360) on accounts impacted by identity theft.

  9. Take the follow actions in completing Form 13794:

    • Input as much information as possible regarding the abatement

    • Include the Serial Lien Identification Number of the Notice of the Federal Tax Lien if available.

    • Check box 9 indicating “Erroneous Lien”

    • Include “ID Theft” in the “Reason” box

    • Fax or e-mail Form 13794 to the Collection Advisory Unit for the state where the taxpayer currently resides.

  10. Collection Advisory contacts can be found under the Who/Where tab on the SERP Home Page as the Advisory Units Contact List at http://serp.enterprise.irs.gov/databases/who-where.dr/technical_support.dr/tech_sup_index1.htm.

    Note:

    Notate on Form 3210 or Form 4442 accompanying Form 14394 that the lien was addressed and whether Form 13794 was sent to the Advisory Unit.

  11. The Advisory Unit will review the Notices of Federal Lien (NFTL) filed against the taxpayer using the Automated Lien System (ALS). If all the modules on the NFTL are satisfied, Advisory will request the release of the NFTL as an erroneously filed NFTL per IRC 6326(b). The release of the NFTL will reverse the TC 582. Advisory will abate the TC 360 associated with the NFTL filing and issue Letter 544, Letter of Apology – Erroneous Filing of Notice of Federal Tax Lien, to the taxpayer.

  12. When returning levy payments collected in error, always check the RSED (Refund Statute Expiration Date.) A claim for a refund must be filed within three years from date the original (valid) return was filed, or two years from the time the tax was paid.

4.19.24.1.3.5  (04-12-2013)
Statute Procedures

  1. A statute of limitation is a time period established by law to review, analyze and resolve taxpayer and/or IRS tax related issues.

  2. The Internal Revenue Code (IRC) requires that the Internal Revenue Service (IRS) will assess, refund, credit, and collect taxes within specific time limits. These limits are known as the Statutes of Limitations . When they expire, the IRS can no longer assess additional tax, allow a claim for refund by the taxpayer, or take collection action. The determination of Statute expiration differs for Assessment, Refund, and Collection

  3. Follow IRM 25.6.1, Statute of Limitations Processes and Procedures, to ensure all statutes are protected.

  4. When computing statutes for identity theft accounts, a statute is considered imminent when it is within 180 days of the TC 150 or unprocessed return statute date.

  5. CPAT/DITA will complete a statute review monthly to identify accounts within 180 days of any statute expiration. Statute cases will be identified by red folders with the statute clearly visible on the folder.

  6. The referring function is responsible for statute screening prior to referring to CPAT/DITA following guidance in the Compliance Statute Protection tool.

  7. It is important to verify the statute dates on the TC 150 return and any unprocessed returns included in the Identity Theft case.

  8. TC 150 returns meeting nullity criteria no longer have a statute date.

  9. If there is no TC 976/TC 977 or unprocessed return, no action is required to move the TC 150 for statute protection.

  10. Referring functions will input a protective assessment on accounts within 180 days of the statute at the time of the referral. These accounts will be worked as a priority. Refer to the Statute Protection Compliance Functions job on the portal.

  11. CPAT/DITA will re-assign the separate "PROTASSMT" control base to the assigned employee.

  12. CPAT/DITA will review and determine the correct account adjustments and contact Accounting within the 30 day time frame to identify the correct assessment.

  13. If the correct adjustment determination cannot be made within 30 days, CPAT/DITA will allow the protective assessment to post and make the adjustment from the revised account information.

4.19.24.1.3.6  (04-12-2013)
Preliminary Research on Fraudulent Filing (Nullity Returns)

  1. Returns that meet a certain criteria will no longer be moved to an IRSN. The returns will be treated as a fraudulent return or a "nullity."

  2. Screening tools are in place to allow examiners performing preliminary research to identify bad/good and/or good/bad ID Theft returns and make the following determinations:

    1. A fraudulent filing based on the Refund Scheme Listing (IRM 4.19.24.1.3.6.1)

    2. A good return based on the IRP data and IRPTR/IDRS Decision Tree (IRM 4.19.24.1.3.6.2)

    3. A fraudulent filing based on IDRS data research

    Note:

    Under no circumstances will these procedures be used when additional information is needed to process the case, or if the return is for the current processing year and IRP data is not available yet.

4.19.24.1.3.6.1  (04-12-2013)
Refund Scheme Listing

  1. ID Theft returns that meet the specific criteria of a "Refund Scheme" may be deemed as a "fraudulent filing" (nullity) and will not require processing to an IRSN.

  2. Use the list of Refund Schemes below to identify a fraudulent filing:

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

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

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

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

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

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

4.19.24.1.3.6.2  (04-12-2013)
IDRS/IRPTR Data Decision Tree

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

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

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

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

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

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

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

    7. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    9. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    10. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    11. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. For ID Theft returns that contain Self Employment Income (Schedule C), you must be able to verify at least 3 items from this listing in order to process the return as a nullity:

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

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

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

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

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

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

    7. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

  3. If the filed return does not meet the criteria of a Refund Scheme and/or TIN ownership can not be determined using the IDRS/IRPTR Data Decision Tree, follow procedures in IRM 21.6.2, Adjusting TIN Related Problems.

4.19.24.1.3.6.3  (04-12-2013)
Case Processing for Nullity Returns

  1. If you are able to validate the TIN ownership and the information on the ‘good’ return, treat the “bad return” as a nullity and process per the appropriate Case Processing Template as provided in IRM 21.6.2.4.2.3.4, TIN Related Problems for IRP Date & RS Case Processing.

4.19.24.1.3.7  (04-12-2013)
Completing Form 3809, Miscellaneous Adjustment Voucher for “Lost” refunds (1545 Account Actions)

  1. Effective 09/24/2012, all Forms 2809 used to offset lost refunds to General Ledger 1545 will be sent to the Submissions Processing Site, Manual Deposit Unit where the refund was issued. When sending the Form 3809 to SP, provide the following:

    1. All three copies of the completed Form 3809

    2. A current TXMOD print showing the TC 846, see IRM 3.8.45.13.2, ID Theft Erroneous Refund 1545 Account Procedures.

  2. Complete Form 3809 as follows:

    1. Name

    2. Debit portion: Enter 1545 Account and name control

    3. Credit portion: Name as shown on ENMOD

    4. Transaction Date: Date of lost refund

    5. 1st Transaction Code

    6. Debit portion: Leave blank

    7. Credit portion: Use TC 841 for total lost refund. Use TC 700 for partial lost refund. (TC 841 must have a minus sign)

    8. Debit/Credit Amount: Use the 846 amount if the total refund was lost or compute the correct amount lost if only a partial lost refund (example: TC 700 is $200.00 because $4,300.00 of a $4,500.00 refund was returned by a bank).

    9. Credit TIN: Primary SSN

    10. Credit Tax Period: Enter tax period in YYYYMM format

    11. Explanation: ID Theft – Lost Refund

    12. Prepared by: Enter your initials and IDRS Number

    13. Date prepared: Enter date the Form 3809 is completed

  3. Send all three parts of Form 3809 along with a current TXMOD print with the TC 846 highlighted to your team reviewer.

    Reminder:

    The TXMOD print must not be more than three days old. Maintain a copy of Part 3 for your case file.

  4. Forward to the SP site where the refund was issued Form 3809 must be complete and legible for processing or it will be rejected back to the originating location. A current TXMOD print must be attached or the Form 3809 will be rejected back to the originating location. (SP R&C employees do NOT have IDRS access.)

    1. E-faxing the Form 3809 is recommended. The copy will not contain gray shading that obscures the input fields.

    2. Faxing Form 3809 - on the fax cover sheet notate the return information and fax within 24 hours

    3. Mailing Form 3809, complete Form 3210 and mail within 24 hours of printing TXMOD to ensure an updated TXMOD print.

  5. Update the control base and monitor for the TC 841 or TC 700 to post to the account.

4.19.24.1.3.8  (04-12-2013)
DIF Screening Unprocessed Returns

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

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

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4.19.24.1.3.8.1  (04-12-2013)
Math Error and Unallowable Processing

  1. CPAT/DITA will follow IRM 21.5, Account Resolution, for applying Math Error and Unallowable procedures when posting the legitimate taxpayer’s return.

  2. CPAT/DITA will issue the applicable notices to the taxpayers and include AM contact information.

4.19.24.1.3.9  (04-12-2013)
Manual Refunds

  1. The most frequent causes of manual refunds are:

    1. The refund will be going to someone other than the entity name on the master file;

    2. A hardship situation necessitates a quicker refund than normal systemic processing can provide, generally a request is sent by the Taxpayer Advocate Service (TAS) using an Operations Assistance Request (OAR);

    3. The refund is not for a Master File account (e.g., Photocopy Fees or Credit Card Chargebacks); or

    4. Systemic limitations prevent a normal computer generated refund.

  2. When it is necessary to expedite a refund, employees can use Form 5792, Request for IDRS Generated Refund, to provide the customer a refund within 7 to 10 days. TAS employees can initiate a hardship direct deposit, once all documentation has been received, by using Form 3753, Manual Refund Posting Voucher, to provide a refund to the customer within 2 to 3 business days. See IRM 3.17.79.6.4.2, Certifying ACH/Direct Deposit Hardship Refunds, for manual refund procedures to issue an Automated Clearing House (ACH) / Direct Deposit Hardship Manual Refund.

    Note:

    When TAS has made a hardship determination on an account with an open control in another area, they will send an OAR to that area requesting the refund be released. The refund should be released systemically unless the OAR indicates a manual refund should be issued and it could not be issued systemically within 2 cycles.

    Caution:

    Manual refunds improperly controlled and monitored can result in erroneous refunds. A manual refund should not be initiated if an IDRS generated refund will be issued within two cycles. Hardships and other circumstances do warrant exception to this requirement. If a manual refund needs to be initiated, all efforts should be made to prevent a duplicate systemic refund from being issued.

  3. The completed Form 3753 or Form 5792 is processed by the Submission Processing Accounting Function. Although the manual refund will be issued within a few business days, it may take up to six weeks for the Trans (TC) 840 to post to Master File.

  4. Some circumstances (not an all inclusive list) that may warrant the issuance of a manual refund:

    1. Hardship (See paragraph (6) below)

    2. Civil Cases

    3. Form 8302, Electronic Deposit of Tax Refund of $1 Million or More (See IRM 3.17.79.3.10.1, Form 8302, Electronic Deposit of Tax of $1 Million or More.

    4. Refunds less than $1.00)

    5. Any refund of $10 million or more must be issued as a manual refund

    6. Non Master File Refunds

    7. Congressional Inquiries

    8. State Income Tax Levy Program (See IRM 5.19.9.2, State Income Tax Levy Program (SITLP) General)

    9. Return of levied property to taxpayer (See IRM 5.19.4.4.12, Wrongful Levies, or IRM 5.11.2.2.2.1, Certain Wrongful Levy Situations.

    10. Statute Imminent cases)

    11. Injured Spouse Claims (See IRM 21.4.6, Refund Offset)

    12. Tentative Carryback Cases (See IRM 21.5.9.5.12, Carryback Manual Refund)

    13. Deceased taxpayers (See IRM 21.6.6.3.22.2, Processing Decedent Account Refunds)

    14. Reimbursements of return photocopy fees (See IRM 21.4.4.6.2, Photocopy Fee Refunds)

    15. Chargeback for unauthorized credit card payments (See IRM 21.4.4.6.3, Credit Card Chargebacks)

    16. Taxpayers in bankruptcy (see note below)

    17. Non-receipt of direct deposit refunds due to IRS error (See IRM 21.4.1.4.7.5, Non-Receipt of Direct Deposited Refunds - "Refund Inquiry Employees")

    18. To release an X- freeze.

    19. Refunds issued after the RSED has expired [prevention of RSED-STAT Transcript generating to the Statue Team] (See IRM 21.5.3.4.3, Tax Decrease and Statute Consideration, and IRM 25.6.1.10.2.7.2, Limitations on the Amount of a Claim)

  5. Taxpayers requesting manual refunds for hardship reasons should be referred to TAS for hardship determination unless the refund can be initiated within 24 hours. The specialized teams may send hardship requests to CPAT/DITA without a referral to TAS.

  6. When processing a Hardship Manual Refund as part of an OAR, the supporting documentation must be attached. If it has not been sent with the Form 12412, request from the referring TAS employee on the Form 12412 the supporting documentation be faxed within 3 business days. If the requested information has not been received within 3 business days, reject the manual refund portion and process the CPAT/DITA portion of the case and notate on the Form 12412.

  7. All taxpayer refund inquiries regarding bankruptcy should be referred to the Centralized Insolvency Operation (CIO) in Philadelphia at 1-800-973-0424. Do not refer taxpayers to CIO if the only issue is the status of the refund and IDRS shows a refund is scheduled to be sent, or was recently sent.

4.19.24.1.3.10  (04-12-2013)
Processing TC 150 Returns to an Internal Revenue Service Number (IRSN)

  1. For cases that do not meet the criteria to process as a nullity, Taxpayer B’s information must be moved to an IRSN (Internal Revenue Service Number) to make the SSN owner “whole” unless the account can be corrected using the procedures in IRM 21.6.2.4.7 and IRM 21.6.2.4.8.

  2. An IRSN is a temporary number issued by the IRS, and is always on the invalid side of Master File. It is in 9NN-NN-NNNN* format, with the 4th and 5th digit ranges of 02, 04-10, 17-19, 28, 29, 37-39, 49, and 89.

  3. IDRS cc TMSSN automates the process of assigning an IRSN when a valid SSN can not be located for a taxpayer who files a fraudulent return using another person’s SSN. Taxpayer B’s entity information is entered in TMSSN, this assigns Taxpayer B an IRSN. See IRM 2.4.59-1, IMF Input Format for CC TMSSNI.

  4. Write the IRSN on the history sheet or Form 4442. Once you exit the TMSSNI screen, the IRSN number can’t be retrieved.

    Note:

    When an IRSN is requested, a notice is generated to Taxpayer B to inform him of his IRSN. If research indicates that Taxpayer B’s fraudulent return has the same address as Taxpayer A, input the address of the Service Center working the case to prevent the IRSN notice being sent to the SSN owner.

  5. If the ASED is within 180 days of expiring, follow IRM 25.6.1, Statute of Limitations Processes and Procedures.

  6. If the ASED has expired for the return, refer to IRM 4.19.24.1.3.10.1, Moving Account with Expired ASED to IRSN.

  7. After addressing any ASED issues, refer to IRM 21.5.2.4.23, Reprocessing Returns/Documents, for procedures to secure, prepare and code returns for reprocessing to an IRSN.

4.19.24.1.3.10.1  (04-12-2013)
Moving Account with Expired ASED to IRSN

  1. If research indicates that Taxpayer B’s return does not meet nullity procedures and the ASED has expired, move the ID Theft assessment to an IRSN using Form 12810, Account Transfer Request Checklist. Include the following:

    1. DLN

    2. TIN

    3. MFT

    4. Tax Period

    5. Complete Entity information

    6. IDRS transcript of account

    7. Transaction Codes

    8. In the Remarks Section, input “ID Theft Case”

  2. Request an IRSN with CC TMSSN. Notate the IRSN on the case history sheet.

  3. If the tax period is in a credit balance, the credit must be resolved prior to preparing the Form 12810 by refunding to the correct taxpayer, if allowable, or as a transfer to Excess Collections. See IRM 21.2.4.3.10.1, Excess Collections File (XSF) for AMRH .

  4. Input the applicable TC 971 codes on the losing and receiving modules.

  5. Route the Form 12810 and attachments to Accounting for processing.

    Note:

    Not all statute or imminent statute year returns need to be moved off the SSN using Form 12810. Refer to IRM 21.6.2.4.7, Determining When Specific Year Account Information Must Be Moved.

4.19.24.1.3.11  (04-12-2013)
Moving Refunds

  1. ID Theft cases may involve moving a posted refund (TC 84X) from one account or TIN to another.

  2. Prepare Form 12857, Refund Transfer Posting Voucher, to reverse the previously issued refund.

  3. Form 12857 has two parts:

    1. Part A will list the information relative to the account the refund needs to be posted "To" .

    2. Part B will have the account information where the TC 840/846 is currently posted and transferred "From" .

  4. Include the split refund code (SPL-REF-CD on TXMOD) in box 9. The split refund code is necessary to avoid unpostable code 138.

  5. For ID Theft cases, annotate the remarks section of Form 3210 with “ID Theft – Please Expedite.”

  6. Input TC 470 to hold the balance due notices until the TC 840/TC 841 posts.

  7. Input TC 971 AC 030 on both accounts to cross reference the TC 840/TC 841 refund reversal.

  8. Route the Form 12857 with IDRS prints for the “to” and “from” tax modules to Accounting to initiate the manual process of posting the TC 840/TC 841. This may take 6-8 weeks to post.

  9. Maintain an open control on IDRS on both accounts and monitor until all resulting transactions post correctly.

    Note:

    If using Form 12810, Account Transfer Request Checklist, to move account information, move TC 846/840 using Form 12810 instead of Form 12857.

4.19.24.1.3.12  (04-12-2013)
Erroneous Refunds

  1. Working the post function ID Theft processing involves inputting adjustments, reprocessing tax returns and inputting credit transfers. It is imperative that actions taken on IDRS are monitored to identify input errors and ensure all transactions have posted correctly. If an incorrect action results in the issuance of an erroneous refund, actions must be taken immediately to recover the refund.

  2. An erroneous refund is a refund issued to a taxpayer who is not entitled to receive it. The taxpayer receiving the refund has a legal obligation to return the uncashed check or repay the money. Erroneous refunds may be caused by:

    1. An incorrect IDRS adjustment or credit transfer

    2. Transaction posting to the wrong TIN, MFT or tax period

    3. Incorrect use of hold or priority codes

    4. Entity error

  3. The erroneous refund must be categorized to determine what actions will be taken to recover the refund. Refer to IRM 21.4.5.4, Erroneous Refund Categories and Procedures.

4.19.24.1.3.13  (04-12-2013)
Refund Offsets When SSN Owner is Expecting a Refund

  1. Internal Revenue Code (IRC) requires a taxpayer’s overpayment be applied to any outstanding Federal tax, non-tax child support, Federal agency non tax debt, or State income tax obligation prior to refunding.

  2. When the SSN owner files a valid return, they expect to receive a refund of their overpayment. However, sometimes this overpayment is used to offset a tax liability that resulted from fraudulent activity on their account. This may be the first indication to the taxpayer that they are a victim of ID Theft.

  3. Master File applies available overpayments to an account in which a taxpayer has a balance due. The overpayment offset will post as a TC 826 (with a corresponding TC 706 in the receiving module).

  4. In order to make the taxpayer whole, you may need to reverse a refund offset. Refer to IRM 21.5.8-1, Transaction Codes and Reversals. Ensure that you input a TC 570 to hold the credits, if necessary, on the losing and gaining modules. This will prevent erroneous refunds from being issued.

  5. Monitor all credit transfers to ensure all transactions post correctly and no erroneous refunds are released. If you determine an erroneous refund has occurred, refer to IRM 4.19.24.1.3.12, Erroneous Refunds.

4.19.24.1.3.14  (04-12-2013)
Refund Offsets When the SSN Owner Owes Non-Tax Debt

  1. In some ID Theft cases, the fraudulent return generates an overpayment that IDRS applies to the SSN owner’s non-tax debt. The taxpayer is not entitled to the offset, and it must be transferred back to the year of the ID Theft so it can be moved with the fraudulent information to the IRSN.

  2. Research is needed to determine what non-tax debt of the SSN owner was credited with the fraudulent return refund. Refer to IRM 21.4.6.4.2.8, TC 766 With OTN TOP Offset Reversal.

4.19.24.1.3.15  (04-12-2013)
Mixed Entity

  1. A mixed entity is created when two or more taxpayers file a tax return for the same period using the same TIN. Research is required to determine who is the owner of the common number (CN). Mixed entity cases are usually the result of one of the following:

    1. Taxpayer error

    2. Tax preparer error

    3. IRS processing error

    4. ID Theft

  2. Any mixed entity case involving an inadvertent or processing error is considered a mixed entity and will be rejected to the function for referral to AM. CPAT/DITA will only resolve identity theft cases.

  3. NUMIDENT transcripts, requested by cc MFTRA with request type U, are required in determining SSN ownership.

  4. Once ownership of the TIN (Taxpayer A) has been determined, research IDRS for a valid TIN for Taxpayer B. If one can not be located, continue processing the case per IRM 4.19.24.1.3.6, Preliminary Research on Fraudulent Filing (Nullity Returns).

4.19.24.1.3.16  (04-12-2013)
Scrambled SSN

  1. A true scrambled SSN case occurs when the Social Security Administration (SSA) assigns the same SSN to more than one taxpayer. Taxpayers who unknowingly share an SSN may assume they are a victim of ID Theft.

  2. If research indicates an ID Theft claim meets scrambled SSN criteria, reject the referral and re-control the case on IDRS back to the originating function. Notate on the referral that the case is a scrambled SSN and not an Identity Theft case.

4.19.24.1.3.17  (04-12-2013)
Restricted Interest

  1. Accounts requiring manual restricted interest computations will be referred to the local AM restricted interest specialist if no local Compliance restricted interest specialist. CPAT/DITA will be responsible for completing all actions up to the manual interest computation and completing the subsequent required actions.

  2. Cases requiring include disaster cases, carryback/carryforward and combat zone.

4.19.24.1.3.18  (04-12-2013)
Working ID Theft cases for Taxpayers in a Combat Zone (-C Freeze)

  1. When a –C freeze (Combat Zone) is present on an account, additional research is required to determine if any actions can be taken.

    Note:

    The –C freeze will remain on an account after the taxpayer has returned from the combat zone.

  2. Check for the COMBAT ZONE INDICATOR on cc IMFOLE to determine if the taxpayer is in an active combat zone suspense period. The Combat Zone indicator codes are on cc IMFOLE line 11 are:

    1. "0" is Not a Combat Zone participant (no –C freeze on the account)

    2. "1" is Active – If the Combat indicator is a "1" , no collection or tax assessments can be done. However, you may work other taxpayer issues. If you are unsure if an issue can be worked, refer the case to your manager or lead.

    3. "2" is Inactive. Taxpayer is out of the combat zone and normal Compliance activities such as collecting or assessing tax can continue.

  3. For additional information regarding Combat Zone taxpayers, refer to IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas, and IRM 5.19.10.6.3, Combat Zone Freeze Code.

4.19.24.1.3.19  (04-12-2013)
Posting Delay Codes

  1. Input of a Posting Delay Code (PDC) ranges from 1-6 will cause some transactions to post later than others when multiple transactions are required to adjust an account.

  2. PDCs are applicable for IMF and BMF transactions when adjusting accounts with the following command codes:

    1. ADJ54 (Doc Code 54)

    2. INCHG and BNCHG

    3. FRM77

  3. The PDC is not posted with the transaction or shown with the pending transaction on IDRS. The pending (PN) posting cycle on the IDRS status transaction is extended to account for the PDCs that are input.

4.19.24.1.4  (04-12-2013)
Completed Case Actions

  1. The referral documents including any original documents or returns will be attached to the TC 29X DLN. Only a copy of the referral document will be returned to the referring specialized team unless other documents are specifically requested.

  2. After all account actions have been taken, the CPAT/DITA employee will:

    1. Notate "Closing Actions Taken" on AMS and

    2. Update the control base to reassign it back to the referring specialized team with employee number 77777 in A status. Use Activity Code "CPATCLOSED" or "DITACLOSED" . The control base will remain in Category Code TPPI. If you need to monitor the account for final posting actions, establish a new separate control base for monitoring purposes.

    3. CPAT will use the chart below to determine the IDRS Group Code.

      Site Function IDRS Group Code
      Andover AUR 08833
      EXAM 08623
      CSCO/ASFR 08652
      Atlanta AUR 07830
      EXAM 07642
      Austin AUR 06832
      EXAM 06636
      CSCO/ASFR 06691
      Fresno AUR 10842
      ACSS 10725
      CSCO/ASFR 10682
      EXAM 10611
      Kansas City ACSS 09751
      EXAM 09617

  3. Forward the notated referral or CP Referral Checksheet to the team IDT liaison for routing via e-mail or fax/e-fax. Notification will be completed within 48 hours or 2 business days. Co-located teams may specify local delivery procedures that meet the 48 hour or 2 business day time frames.

  4. Forward Form 14394, Identity Theft/Return Preparer Misconduct Case Collection Alert, to ACSS, if applicable, indicating the account resolution is completed.

  5. CPAT/DITA employees will dispose of any research or documents not required to support the identity theft adjustments. This is an exception to IRM 21.5.1.4.10, Classified Waste.

4.19.24.1.4.1  (04-12-2013)
Notification to ID Theft Victim When Post Function Adjustments Have Been Completed

  1. The CP 01, Identity Theft Claim Acknowledgement notice is used to acknowledge receipt of documentation substantiating a claim of identity theft and to notify taxpayers of the action taken by the Service with regard to their tax records. This notice is issued systemically after the TC 971 AC 501 is input on the taxpayer's account.

  2. Letter 4310C, ID Theft Refund Crimes Post-Adjustment Letter, is used to notify taxpayers of IRS-identified Identity Theft and the input indicators on their account. This notice is manually issued when the TC 971 AC 506 is input on the taxpayer’s account unless the referring employee specifies the Letter 4310C should not be sent.

4.19.24.1.5  (04-12-2013)
Special Programs

  1. In the course of resolving the identity theft accounts examiners will encounter returns with issues requiring special processing.

4.19.24.1.5.1  (04-12-2013)
Unprocessed Returns with Adoption Credit

  1. CPAT/DITA will treat unprocessed returns as claims for the Adoption credit issue and will follow the IRM 21.5.3-6, Adoption Credit - Additional CAT-A Criteria, with the exception of re-assigning cases to the ANSC AM team. If it meets the CAT-A referral criteria, CPAT/DITA will forward the case to Exam for classification. If it's a paper case, fax the return to Exam for classification. If it's a CIS case, CPAT/DITA will assign to Exam through CIS:

    1. HQ-Reserved 2 for W&I taxpayers and

    2. SB taxpayers are routed to MSC Exam using category code NYCX.

    Note:

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

4.19.24.1.5.2  (04-12-2013)
First Time Home Buyer's Credit (FTHBC)

  1. When adjusting an account for FTHBC, use Credit Reference Number (CRN) 258 to allow/increase the credit and CRN 258 with a minus sign (-) to decrease the credit. The CRN converts to TC 766/767 Reference Number 258 at MF.

  2. When adjusting an account for FTHBC, enter only one of the following reason codes:

    RC Definition
    109 FTHBC – Home purchased in 2008
    110 FTHBC – Home purchased in 2009 or 2010
    125 FTHBC – Home purchased by long time resident ($6,500 max)
    126 FTHBC – Home purchased by first time buyer that is military using their one year extension
    127 FTHBC – Requirement to repay the credit waived (only for military forgiveness)
    128 FTHBC – Home purchased by first time buyer WITHOUT binding contract documentation attached
    129 FTHBC – Home purchased by long time resident WITHOUT binding contract or 5 out of 8 year documentation attached
  3. Be certain to use the correct reason code when adjusting the 2008 accounts. This reason code is used to identify those that require repayment.

  4. For any home purchased in 2010 and the Form 5405 is for a 2009 tax period, input a reference code 880 .10, RC 121 (primary), or RC 000 (joint) along with the appropriate RC 110, 125, 126, 128, or 129. This is necessary to show the correct year of purchase on IMFOLF.

  5. For any home purchased in 2011 (military), input a reference code 880 .11 and use the appropriate RCs. Input RC 121 (primary) or RC 000 (joint) as well.

  6. If two valid Forms 5405 need to be adjusted onto one tax module, Priority Code 9 will be needed in order to override any unpostable condition. (This would occur most often on separate to joint cases.)

  7. When backing out or reducing the FTHBC on an account, always check the entity on CC IMFOLF to assure the FTHBC credit amount field has data posted. If the field is blank, you must first bring the data back from the cross reference account before backing out the tax module account. Failure to do so will cause an unpostable.

  8. Reverse the credit amount shown on CC IMFOLF using:

    1. CRN 875 for the primary amount (negative)

    2. CRN 975 for the secondary amount (negative)

    3. RC 109, 110, 125, or 126

  9. To create the FTHBC entity on the account where the FTHBC is being backed-out or reduced, input the CRN 875 for the primary amount with a positive. This situation occurs when the credit is claimed on a taxpayer’s account, and the following year that same taxpayer files jointly as the secondary taxpayer. For repayment purposes, the credit will “follow” that taxpayer to the joint account.

  10. Wait until the following week to work the remainder of the case to assure posting of these transactions or use a PDC of 1.

    Note:

    If IMFOLF indicates a repayment of 1/15 of the credit, the tax and repayment amount on IMFOLF can be adjusted if the repayment was assessed via math error authority. If the taxpayer reported the repayment on their original or amended return, the taxpayer will have to file an amended return to correct the tax and IMFOLF.

  11. Due to a systemic problem, there may be instances where the FTHBC has been backed out but still shows on IMFOLF. The IMFOLF information must be removed with IRN 875/IRN 975 as listed above, one cycle prior to posting the FTHBC, or the adjustment will unpost.

4.19.24.1.6  (04-12-2013)
CPAT/DITA Clerical Functions

  1. The clerical actions will provide support by completing any of the following duties (this list is not all inclusive):

    1. Building batches

    2. Associating returns and/or transcripts to case files

    3. Refiling closed cases

    4. Disassembling batches

    5. Associating the case folder and return

    6. Preparing cases for transfer or referral to other areas

    7. Setting up suspense files in SSN order

    8. Closure and refile

    9. Miscellaneous Referrals

    10. Research (Unit Suspense)

    11. Transfer to another area

    12. Associate additional correspondence

    13. Mailing additional correspondence

    14. Sending closed cases to the Federal Records Centers (FRC) to be refiled

    15. Establishing, updating and assigning IDRS control bases

    16. Sending closure notification to the referring specialized teams

  2. The following program codes have been established for reporting clerical time by CPAT/DITA:

    Function Program Description CPAT DITA
    790 61010 Identity Theft Referrals from Campus Compliance X X
    790 61020 Preparer Misconduct Referrals from Campus Compliance X X
    790 61050 Identity Theft Referrals from Field Components   X


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