5.9.14  Automated Proofs of Claim (APOC)

Manual Transmittal

December 23, 2013

Purpose

(1) This transmits revised IRM 5.9.14, Automated Proofs of Claim (APOC).

Material Changes

(1) Editorial changes have been made throughout the IRM, and citations have been updated.

(2) 5.9.14.2 – The scope of the APOC Program was clarified.

(3) 5.9.14.2.1 – The role of the APOC Operator was further refined.

(4) 5.9.14.2.1.1 – Information regarding the IDRS SINON and SINOF process was added.

(5) 5.9.14.2.2(1) – The Automated Insolvency System (AIS) processing flow was updated to reflect the correct order of case processing.

(6) 5.9.14.2.2(2) – APOC processing requirements were clarified to indicate that if there are any claim records on AIS, APOC will not select the case for processing.

(7) 5.9.14.2.2(4) – APOC Status field value of Null was changed to reflect the correct definition.

(8) 5.9.14.2.3(7) – Definition of Restore Cases was added.

(9) 5.9.14.2.4 – The Navigating APOC section was moved to better reflect case flow.

(10) 5.9.14.2.8(5)(j) – The definition of MFT 14 was added to the MFT 14 or 60 flag.

(11) 5.9.14.2.9 – Period Flag definitions were updated, obsolete flags were removed and additional flag information was added.

(12) 5.9.14.2.12 – Provides information on the Process APOC button.

(13) 5.9.14.3.1 – The Litigation Transcript Criteria was updated to reflect the current processing requirements.

(14) IRM 5.9.14.3.6 was added to describe APOC Amends Flag descriptions and resolutions.

(15) Exhibit 5.9.14-1 was removed. The information contained in the exhibit has been incorporated into the applicable sections of this IRM.

Effect on Other Documents

This material supersedes IRM 5.9.14, dated June 13, 2013.

Audience

Field Insolvency Groups.

Effective Date

(12-23-2013)

Dretha Barham, Director, Collection Policy

5.9.14.1  (06-13-2013)
Overview

  1. Purpose. This Internal Revenue Manual (IRM) section describes the process and procedures for operating the Automated Proofs of Claim (APOC) system application.

  2. Audience. This IRM is designed for use by Advisory Insolvency (AI) personnel responsible for generating proofs of claim using the APOC system.

  3. Process Owner. SBSE ECS Collection Policy, Insolvency provides enterprise guidance and centralized oversight for the APOC program.

5.9.14.2  (12-23-2013)
Automated Proof of Claim (APOC)

  1. Overview. The APOC system resides as a subsystem within the Automated Insolvency System (AIS) Oracle environment and interfaces with the AIS. APOC is an automated process that standardizes how and when proofs of claim processing occurs. APOC uses data from the AIS, Integrated Data Retrieval System (IDRS), Litigation Transcript System (LTS) and the Automated Lien System (ALS) to determine, select, calculate and classify liabilities for Chapters 11, 12, and 13 cases and Chapter 7 asset cases. It does not compute or classify liabilities for Receiverships, Chapter 9 or Chapter 15 cases. All cases meeting the APOC selection criteria will be brought into the system and processed through the program. Once APOC has completed its tasks, it populates the relevant fields in AIS so a claim can be produced.

    Note:

    APOC does not create claims. It simply provides the refined data so AIS can formulate a usable claim on Form B10 and the Form 10 Attachment in either hard copy or electronic format.

  2. AIS Freeze Screen. APOC examines all primary TINs and cross reference TINs for processing. APOC selects balance due periods from the AIS freeze table and identifies periods with no returns filed based upon IDRS information. If a period has a balance due, but is not listed in the freeze table, APOC recognizes that liability as a "Missed BAL Due" . The liability will not have a TC 520 input until after the caseworker has added the module to the proof of claim and filed the claim with the bankruptcy court or input the TC 520 to IDRS manually. The AIS freeze table may be accessed from the Taxpayer Screen by clicking on the Freeze button.

    Note:

    When a manual TC 520 is input to IDRS, the same information must be added manually to the Transaction Code Data file in AIS.

  3. Tolerance. APOC currently operates with a dollar tolerance less than the tolerances listed in IRM Exhibit 5.9.13-1 for manually computed proofs of claim. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . The APOC tolerance may be adjusted as necessary by Collection Policy, Insolvency. When an adjustment is anticipated, Insolvency caseworkers will receive advance notification.

  4. ALS. ALS must be run and the "Lien Research" field on the AIS TIN screen must be "Completed" prior to APOC's selecting the case for processing. This is an automatic process and requires no manual intervention.

5.9.14.2.1  (12-23-2013)
APOC Operators

  1. Overview. An APOC operator is an Insolvency employee designated in APOC to initiate and run the APOC processes. There is one operator from each Insolvency Territory. Operators must have an APOC User ID and the proper command codes in their profiles to connect to IDRS through APOC.

  2. APOC Operator Back-up. APOC operators are the only AI employees with access to the "APOC Batch Program" and therefore the only employees capable of running APOC nationwide. These operators will be each others' back-up.

  3. APOC User ID. APOC operators are required to have two User IDs and passwords:

    • The AIS 4 login and password for access to AIS, and

    • The APOC User ID and password for access to the “APOC Initiation” processes.


    Both can be obtained by submitting requests through the Online (OL) 5081 system.

  4. IDRS Command Codes. APOC operators must have the following IDRS command codes in their profile to initiate the APOC processes. APOC operators will receive a "Security Violation" without these command codes in their profile:

    • AMDISA

    • BMFOLI

    • BMFOLL

    • BMFOLT

    • COMPA

    • IMFOLI

    • IMFOLT

    • INOLES_BMF

    • INOLES_IMF

    • INOLEX

    • INTSTA

    • INTSTB

    • IRPTRL

    • MFREQ

    • MFREQC

    • RECON

    • SINON

    • SINOF

    • TXMODA

5.9.14.2.1.1  (12-23-2013)
APOC Initiation Process

  1. Daily Processing. Operators should run APOC daily. The operators run APOC by Insolvency Territory, then further processing can be selected by date or group ID. However, by pressing enter and bypassing the dates, APOC will select every case available. It is recommended to run all available cases.

  2. APOC Main Menu. To begin the APOC process, APOC operators must select Option 1 - Initiate APOC Process from the APOC Main Menu.

  3. Case Selection. Cases may be selected for APOC processing by entering a specific case number or by processing all available cases at the same time. The options are:

    1. Run specific docket ID(s).

    2. Run *ALL* available dockets.

    3. ABORT this APOC run.

    Note:

    Operators should normally choose option 2, to run all qualifying cases through APOC.

  4. Case Verification. After an option has been selected, the operator will be asked to verify the selection by inputting "Y" to start the system.

  5. IDRS SINON. The APOC operator will be required to SINON to IDRS each time APOC is run. Once the operator has signed on to IDRS, APOC will show the number and list of cases it will run.

  6. APOC Initiation Status. APOC will display all the cases, as they are processing. The screen process will appear as follows:

    • ***** Commit < database changes for docket: XX-XXXXXXX

    • Phase 1 Complete

    • Phase 2 Complete

    • Phase 3 Complete

    • Phase 4 Complete

  7. IDRS SINOF. After completion of the run, APOC will automatically SINOF the operator from IDRS.

5.9.14.2.2  (12-23-2013)
APOC Processing

  1. Processing Flow. The following steps demonstrate the order in which cases are handled on AIS:

    1. The case is opened on AIS;

    2. Insolvency Interface Program (IIP) is initiated;

    3. Process C validates TINs;

    4. Process D inputs TC 520s and creates status reports;

    5. Case Assignment Guide (CAG) program assigns case to a caseworker;

    6. ALS runs on all TINs;

    7. APOC selects case for processing; and

    8. A caseworker accesses APOC records to work the case.

  2. Case Requirement. The following conditions must be met before a case will qualify for APOC processing:

    • The case does not have a closed date on AIS.

    • The case is a Chapter 7A, 11, 12 or 13.

    • The "Proof Req'd" field on AIS is “Y” meaning a claim has not already been filed.

      Note:

      If there are any claim records on AIS, the case will not qualify for processing.

    • All TINs on the docket are validated.

    • The case is assigned to a caseworker.

    • ALS has run on all TINs.

    • The "APOC Status" on the AIS Taxpayer screen is "blank" .

  3. Processing Delays. Problems that will delay the processing flow include:

    • An invalid TIN

    • Name control mismatch

    • ALS NFTL research not completed due to TIN not being validated

    • Prior bankruptcy error (-V or -W freeze already on account)

    • IDRS Dead Cycles

    • Case not assigned to an employee

      Note:

      The problems shown above will be reported on a Potentially Invalid TIN (PIT) report, Error report or CAG report.

  4. "APOC Status" Field. The AIS Taxpayer screen has a field specifically for APOC. This field must be "blank" or the case will not be selected for the APOC process. The "APOC Status" field is updated when a case has been processed by APOC and will display an alpha code denoting one of the codes below:

    • @ - Completed amends case

    • A - Automatically processed through APOC (no flags exist)

    • B - Below tolerance

    • D - No liability case with debtor indicator

    • H - Amends case on Hold

    • M - Manually processed through APOC (flags have been resolved)

    • N - No liability

      Note:

      APOC does not close No Liability Chapters 11 and 12 cases on AIS.

    • Null - Case not processed by APOC

    • O - Open Referral on Chapters 11/12 only (NL)

    • P - Case is pending in APOC because of unresolved flags

    • R - Terminated case

    • T - Terminated Amends case

    • X - case selected for APOC processing, but process is not complete

    • Z - Duplicate period (Period has the same TIN, Assessment Date, Classification)

  5. Reopened Chapter 7 Cases. Chapter 7 cases that are reopened because assets have been identified will not be processed by APOC if a closed on AIS date is on the AIS entity screen. APOC Amends will not process cases if a discharge or dismissal date is on the AIS Taxpayer screen. Cases falling beyond the governmental bar date will generate a flag advising the user of an attempt to work a late filed claim. Chapter 7 cases may have periods that were abated because they met the requirements for dischargeability. These abated periods must be computed manually and included on the proof of claim. When APOC is utilized users may include these periods by inserting or creating new periods.

5.9.14.2.3  (12-23-2013)
APOC Access

  1. APOC Access. Select the APOC tab from the AIS Home Page to access APOC and review the results of APOC case processing.

  2. Query Options. The APOC Case Query/Report Menu offers the following case query options:

    • Case Types

    • Query Criteria

    • Query By Case Flags

    • Reports

    • Restore Cases (Manager's only)

  3. Case Types. The APOC program is built around the following case types:

    1. Open Cases. Includes all cases that have been selected by the APOC process but have not completed the process. Open Cases are cases that encounter flag conditions that require interaction by the assigned employee. Additional actions will be required on these cases by the employee. Select the Open Cases button from the APOC Case Query/Report screen to access APOC Open Cases. Caseworkers can generate the Flagged Cases Report (F) from the APOC Report Menu to identify which cases have unresolved flags.

    2. Completed Cases. Includes all cases that have completed the APOC process. The list includes cases that went through the APOC process and did not require manual intervention. It also includes cases that were originally flagged in APOC and were resolved by the caseworker. Select the Completed Cases button from the APOC Case Query/Report screen to access APOC Completed Cases. To identify which cases have completed the APOC processes caseworkers can generate:
      • The Cleared Flag Case Report (E) which identifies cases that have flags which were resolved.
      • The No Liability Report (H) which identifies cases with no balances due, no unfiled returns, no open freeze codes, and the debt indicator is not F.

      Note:

      APOC closes these as no liability for all chapters except Chapters 11 and 12.


      • The Non-Flagged Case Report (I) lists all cases processed through APOC that did not encounter a flag condition.
      • The Terminated Cases Report (J) which identifies cases terminated in APOC.

    3. Amended Cases. Includes cases where the original POC contained an estimated delinquent period and the tax return for this period is now filed and assessed. APOC Amends processes the new assessment periods where an estimate exists.

  4. Query Criteria. The following query options are provided to further define a case query:

    1. My Cases. By selecting this option, the user will query only cases assigned to the user.

    2. Filtered. When this option is selected, the user is provided additional options. Users can filter data by a "specific case number," "court key," "SEID," "Group, " "Organizational level 1" or "2" , "employee number," or by entering a specific date in the "From" or "To" fields.

    3. Unfiltered. By selecting this option, the user will query all cases for all users in the database. This option produces no more than 250 cases.

  5. Query By Case Flags. The "Query By Case Flags" option allows users to query by specific case flag conditions. Flagged cases are considered "Open" requiring manual intervention to address or clear the flags before the case can be exported to AIS.

  6. Reports Menu. The "Reports Menu" query option allows users to query cases by a specific APOC report.

  7. Restore Cases. The Restore Cases button allows the user to restore cases. Cases that were selected for APOC processing but did not make it through the APOC process will have an APOC status of X and need to be restored to AIS. AIS permission levels determine access to this Menu Option.

5.9.14.2.4  (12-23-2013)
Navigating APOC

  1. Toggle Function. The Toggle Function allows users to access the AIS Taxpayer Screen, AIS History Screen, or the AIS Manual Refund Screen while in APOC. Right Click on any APOC Screen and a "POP UP Window" will appear with the option to select the AIS Taxpayer Screen, the AIS History Screen , or the AIS Manual Refund Screen. To return to APOC from the AIS History Screen or the AIS Taxpayer Screen, the user should click on the Exit tab.

  2. Moving from Field to Field in APOC. When a user moves from field to field that specific field will appear highlighted. Users may choose one of the following methods to move from field to field:

    • Enter Key

    • Left Click

    • Scroll Bar

    • Keyboard Tab

    • Arrow Key

5.9.14.2.5  (12-23-2013)
APOC Report Access

  1. Report Access. Select the Reports Menu button from the APOC Case Query/Report screen to access the APOC Reports. APOC reports are generated in an Adobe PDF format utilizing the full capability of the Windows environment, where reports can be saved, printed to any accessible windows printer or sent via email. The APOC Reports screen is separated into two sections, Parameters and APOC Reports.

  2. Parameters. The Organization information in the "Parameters" section sets the selection criteria for creating reports. The "SEID," " Group," "Site," "Org1," and "Org2" fields default to the user information. Use the "From" and "To" date fields to generate the report(s) for a specific time period. Depending on your "Permissions Level" you may be able to change the "Organization" information in this section. A specific report must be selected before trying to submit changes in the "Parameters" section.

  3. APOC Reports. To generate a specific APOC report, users must select a button next to the report title and select the Run Report button or the Execute button. The APOC reports options are:

    1. AGI Report. The Adjusted Gross Income Report identifies individuals with large incomes who file Chapter 7 cases.

    2. All Cases Report. The All Cases Report lists all cases assigned to a specific technician, for a specific date or date range and were processed by APOC.

    3. Below Tolerance Report. The Below Tolerance Report identifies cases where the total claim balance is below the minimum amount established for filing proofs of claim.

    4. Cash Collateral Report. The Cash Collateral Report identifies all Chapter 11 cases with secured claims. A manual case review is needed to determine if adequate protection or a cash collateral agreement is needed.

    5. Cleared Flagged Cases Report. The Cleared Flagged Cases Report lists all cases that have had the flag(s) resolved.

    6. Flagged Cases Report. The Flagged Cases Report lists all cases that have encountered a flag which has not yet been resolved. These cases require manual intervention by the user.

    7. $ Limitation to File Bankruptcy Report. The $ Limitation to File Bankruptcy Report identifies cases where the secured or unsecured claim amount exceeds the statute limitations as provided in the Bankruptcy Code.

    8. No Liability Report. The No Liability Report identifies cases with no balances due, no unfiled returns, no open freeze codes, and the debt indicator is not "F" . APOC closes these cases as no liability (NL) for all chapters except Chapters 11 and 12.

    9. Non-Flagged Cases Report. The Non-Flagged Cases Report lists all cases processed through APOC that did not encounter a flag condition. Since APOC processes are initiated on a daily basis, plans and schedules may not be available when this report is generated. Caseworkers should use the Non-Flagged Cases Report to conduct initial case reviews and plan reviews, and to set follow-up dates to load or update plan information to the confirmed plan payment screen in AIS.

    10. Terminated Cases Report. The Terminated Cases Report lists all cases that were terminated in APOC.

    11. X/Z Cases Report. The X Cases are those cases that were APOC ready but did not make it through the APOC process. The Z Cases are those cases where there is a problem with the APOC records which is not allowing the claim records to move to the AIS Proof of Claim screen.

    12. Estimated Return Report. The Estimated Return Report lists all cases that have periods with estimates.

    13. Open Amend Report. The Open Amend Report lists all cases with an amended period that has not yet been resolved. These cases require manual intervention by the user.

    14. Completed Amend Report. The Completed Amend Report lists all cases processed through APOC Amends. Caseworkers should use the Completed Amend Report to conduct a review of the claim filed dates to ensure the amended proofs of claim are filed "after" they have been amended.

    15. Terminated Amend Report. The Terminated Amend Report lists all cases that were terminated in APOC Amends.

    16. Case Detail Flag Report. The Case Detail Flag Report identifies issues at the "Case" level. When the Case Detail Flag Report is selected a "Pop Up Window" will appear to the right with the option to select one of the Case Flag Conditions listed.

    17. Period Detail Flag Report. The Period Detail Flag Report identifies issues at the "Period" level. When the Period Detail Flag Report is selected a "Pop Up Window" will appear to the right with the option to select one of the Period Flag Conditions listed.

    18. Summary Report. The Summary Report lists different statistics for the user's specific territories. This a "Managers Only" report.

5.9.14.2.6  (12-23-2013)
APOC Flag Information

  1. Flag Conditions. When APOC encounters a condition that can not be resolved without human interaction, a flag shall be issued. The flags are separated into Case and Period flags. The caseworker can resolve the flags on the Case Detail or Period Detail screens. APOC selects flags and sorts them by SEID, TIN, Period and MFT within a Case and presents them to the employee for clearance. APOC enables employees to update the case records for each flag condition. When all flag conditions for a specific case have been cleared APOC will be able to export the data to update the AIS proof of claim. Some flags are set to alert the employee to some existing circumstance and may not require any action aside from the clearance of the flag itself. For each flag condition a history record is added to AIS denoting its occurrence.

  2. Identifying Flags. The APOC Case List screen separates the Flag information into three categories and five columns. The three categories include Case Flags, Number of Periods, and Period Flags.

    1. Case Flag information is separated into two columns. The first column lists the total number of case flags on the case. The second column lists the number of case flags that have been cleared.

    2. Number of Periods column lists the number of period records created by APOC.

    3. Period Flag information is separated into two columns. The first column lists the total number of period flags on the case. The second column lists the number of period flags that have been cleared.

  3. Flag History Documentation. Each flag condition encountered during the APOC batch process generates an automated AIS history record. The history message will indicate it was created by APOC and will include a brief description of each flag condition.

    1. The AIS taxpayer table "APOC Status" field is set to "P," Pending, for cases containing flags.

    2. When all Flags are cleared the taxpayer "APOC Status" field is set to "M," Manual.

5.9.14.2.7  (12-23-2013)
APOC Flag Condition Time Frame Requirements

  1. Time Frame Requirements. APOC Flags should be worked at least five calendar days before the 341 meeting, with the exception of the Credits Posted after the Petition Date flag, the Lien Recorded Date Blank or Greater Than the Petition Date flag, and the Secured Period flag.

    1. APOC flags that identify a potential violation of the stay should be worked within five calendar days of APOC identifying the flagged condition:
      • The Credits Posted after Petition Date flag may identify a payment that may have posted in violation of the stay.
      • The Lien Recorded Date Blank flag may identify a NFTL that was issued or filed after the petition date in violation of the stay.

    2. The Secured Period flag should be worked within 10 calendar days of APOC identifying the flagged condition for all chapters other than chapter 7. The Secured Flag indicates the Service may have a pre-petition NFTL on file and may be entitled to an adequate protection or cash collateral agreement.

5.9.14.2.8  (12-23-2013)
Case Flags

  1. Case Flag Information. Case flags affect the entire case and alert the user of the need for additional review.

    1. Flagged cases are considered "Open" requiring manual intervention to address (i.e., take appropriate action) and/or update the flags before the APOC case is exported to AIS. The APOC User Interface enables employees to add and/or update claim and history records for each flag condition.

    2. Once flags are updated on a case, the case will move to "Completed" the next time the APOC process runs, or when the user chooses to use the Process APOC button. The APOC claim information is transferred to the AIS Proof of Claim tables and APOC adds a record to the AIS history screen that summarizes the claim information.

  2. Identify Case Flags. The name of each Case Flag can be found at the bottom of the APOC Case Detail screen. The APOC Case Detail screen contains a list of specific case flag conditions. Caseworkers must determine the proper action to follow to resolve the case flag issue so processing can continue. To access a case for purposes of clearing case flag conditions, the caseworker should highlight the case on the APOC Case List screen and select the Case Detail button.

  3. Update Case Flags. When all required actions to resolve the Case Flag are completed, go to the APOC Case Detail screen and select the flag, select the Update Flag button and select Save. This action alerts APOC the flag has been cleared and the case can continue the processing cycle. The current date is automatically populated in the column to the right of the flag title.

  4. Reopen a Case Flag. If the flag was cleared in error, highlight the date again, select the Delete Key or Spacebar and select Save. The caseworker may use the arrow key to access the next flag at the bottom of the screen.

  5. Case Flag Conditions and Resolutions. A brief description of each case flag condition and resolution is listed below:

    1. Debtor TIN with an Asterisk Flag. This flag is issued when the debtor TIN ends with an asterisk. APOC processes the TIN as if the asterisk is not present. The caseworker must review APOC determinations on this TIN, making any additions or deletions to the records and then update the flag.

    2. Amended IRPTRL Flag. This flag is issued when the IRPTRL information on IDRS has been amended. APOC alerts the caseworker of additional IRPTRL pages which APOC can not read. Caseworkers must review IRPTRO and other sources to determine if an estimated liability is necessary.

    3. Available Credit Flag. This flag is triggered by the existence of an available credit greater than $25. The caseworker must follow local procedures to resolve the credit and update the flag.

    4. BMF Compliance Flag. This flag is triggered by an EIN (cross-referenced on INOLES), but no BMFOLI. If the BMF estimate is not necessary, the caseworker must update the flag. If the BMF estimate is necessary and IMF Period Detail records do not exist, the caseworker must compute the estimate, create a period detail record, input the estimate and update the flag. If the BMF estimate is necessary and IMF Period Detail records exist, the caseworker must compute the estimate(s), insert a Period Detail Record, input the estimate, and update the flag.

    5. CID Freeze Flag. This flag is issued when a -Z freeze exists on a period on the TIN. The caseworker must contact Criminal Investigation (CI) before proceeding with the filing of a proof of claim. APOC will include all liabilities on the claim but gives the caseworker an opportunity to change the claim as needed. If CI states a claim may be filed, update the flag. If CI states a claim should not be filed, terminate the case and follow the procedures outlined in IRM 5.9.13.16, Criminal Investigation Involvement. If a specific period should not be on a claim, remove the period and update the flag.

    6. Discharged, Dismissed, or Closed Date on AIS Flag. This flag is triggered by the existence of a date in the "dismissed" , "discharged" , or "closed" fields on the AIS Taxpayer screen. Caseworkers must review IDRS for abated liabilities. If there is no liability, update the flag. If the case was originally filed as a Chapter 7 No Asset and converted to a Chapter 7 Asset, the caseworker must identify the discharged liabilities and include them on the claim. If a case was originally filed as a Chapter 7 No Asset and converted to a Chapter 7 Asset and liabilities were not abated, update the flag. If it appears a discharged Chapter 7 No Asset was converted to a Chapter 13 proceeding, the caseworker should check the court's electronic records to verify the discharge was vacated. Remove the discharge date on AIS, if necessary. Identify all periods to be included on the claim. Calculate, classify and insert each period and update the flag.

      Note:

      For cases filed on or after October 17, 2005, a debtor will not be granted a discharge in a Chapter 13 case if such debtor previously received a discharge in a Chapter 7 case filed less than four years before the filing of the Chapter 13 case. (See IRM 5.9.5.7(6) , Discharge Limitations and Bankruptcy Code § 1328(f).

    7. Estimate with -L Freeze Flag. This flag is triggered by the existence of an open TC 420 on the TXMODA when a SFR has been initiated on a period that has not been filed and an assessment has not posted. The caseworker must follow local procedures to determine the tax, interest and penalty amounts as needed and update the flag.

    8. Late Filed Claim Flag. A late filed claim flag is issued on a case that has an APOC processing date which is more than 180 days from the petition date. The caseworker must determine if a claim should be filed. See IRM 5.9.13.7.1, Late Filed Claims. If a claim should be filed, the caseworker will calculate and classify each period, create or insert periods as needed, ensure all periods needed on the claim have been added to APOC and update the flag. If the claim should not be filed, the caseworker must terminate the docket.

      Note:

      APOC recognizes all liabilities and adds them to the claim, not distinguishing between pre-petition and post-petition liabilities. Consequently post-petition periods may appear on the claim. Local procedures should be followed in dealing with those post-petition liabilities.

    9. LLC Flag. This flag is created when the debtor is a Limited Liability Company (LLC). Manual intervention is required to determine the basis of the liability and accuracy of the claim. IRM 5.9.13.14, Limited Liability Companies, provides guidance on proper preparation of LLC claims. Counsel input may also be required. If a claim is not necessary the caseworker must terminate the case. If the claim is necessary the caseworker must ensure all appropriate periods are included on the claim, create, insert or remove periods as needed and update the flag.

    10. MFT = 14 or 60 Flag. This flag is triggered by the existence of an open filing requirement on INOLES for MFT 60, Form 2290, Heavy Highway Vehicle Use Tax Return, or for MFT 14, Form 944, Employer's ANNUAL Federal Tax Return. APOC will compute the balance due periods, but cannot determine compliance, therefore a manual determination is required. Caseworkers must review bankruptcy schedules and other sources to determine if an estimated liability is necessary. If an estimate is not necessary the caseworker must update the flag. If an estimate is necessary the caseworker must calculate and classify each period, create a period detail for each estimate and then update the flag.

      Note:

      APOC will process balance due periods but can not conduct a compliance check for MFT 60, or MFT 14.

    11. Pending Additional Assessment on a TXMOD Flag. This flag is triggered by the existence of a pending tax assessment on TXMODA that has not posted to IMFOL or BMFOL. Caseworkers must create a period, calculate and classify the liability and update the flag.

    12. Potential Missed BAL Due Flag. This flag is issued when a balance due period, greater than $25 is on IDRS but the period is not present in the AIS freeze tables. Caseworkers must decide if the period should be included on the proof of claim. If the period should not be included on the claim, the caseworker should update the flag. If the period should be included on the claim the caseworker must calculate and classify each period, create a period detail for each estimate and then update the flag.

      Note:

      If this is a pre-petition module and you do not include this liability on the proof of claim you must manually input the TC 520 on this module, and add the TC 520 to the Freeze screen on AIS.

    13. TFRP for Multiple SSNs in the Same Period. The purpose of this flag is to alert the caseworker that the AIS freeze table contains an MFT 55 assessment on the same period for both debtors of a joint bankruptcy case. The caseworker must review the liabilities to determine if they are for the same corporate debt. APOC will list the liability under both debtors but will allow the caseworker to delete one of the assessments. See IRM 5.9.13.13(4) , TFRP Assessments - Priority Status, for the proper language to insert on the claim to protect the government's interests. If the TFRP is for the same corporate debt for both husband and wife, remove one of the MFT 55 periods, insert the proper clarifying statement, and clear the flag. If the TFRP is for different corporate debts, the caseworker must clear the flag.

  6. Case Documentation. Caseworkers must document the actions they take to resolve APOC docket flags and period flags. (See IRM 5.9.5.4, AIS Documentation). AIS histories generated by APOC alone are not sufficient case documentation.

5.9.14.2.9  (12-23-2013)
Period Flags

  1. Period Flag Information. Period flags impact a specific TIN, MFT and period. Flagged cases are considered "Open" requiring manual intervention to address and/or clear the flags before the APOC case is exported to AIS. Caseworkers must determine the proper action to follow to resolve the flag issue so processing can continue.

  2. Identifying Period Flags. Specific period flags can be found on the APOC Period List screen. The flag information is separated into two columns. The left column indicates the number of flag conditions on a specific period. The right column indicates the number of flag conditions that have been cleared. If the right column is blank, the flag condition has not been cleared. The lower section of the APOC Period Detail screen provides the number of flags for that specific period as well as the name of each period flag. Each flag must be resolved before the case processing can complete.

  3. Update Period Flags. Each time a period flag is encountered, the caseworker must take additional steps to determine the appropriate action to be taken. Once those steps have been taken, the caseworker should go to the APOC Period Detail screen and select the flag to be updated, select the Update Period Flag button and select Save. This action alerts APOC the flag has been cleared, and the case can continue the processing cycle. The current date is automatically populated in the column to the right of the flag title.

  4. Reopen Period Flag. If the flag was cleared in error, highlight the date again, select the Delete key or Spacebar and select Save. The caseworker may use the arrow key to access the next flag at the bottom of the screen.

  5. Period Flag Conditions and Resolutions. A brief description of each period flag condition is listed below:

    1. Credits Posted After Petition Date Flag. This flag is triggered by the existence of a credit that may have been received after the petition date in violation of the stay and should be worked within five calendar days of APOC identifying the flagged condition. APOC has created a claim record for this MFT and Period with amounts for Tax, Penalty or Interest. Caseworkers must determine if the credit is in violation of the automatic stay. If the credit is NOT in violation of the automatic stay the caseworker must update the flag. If the credit cannot be kept, the caseworker must manually calculate the period without including the credit, update the APOC record with the new figures, clear the flag, and prepare a manual refund or credit transfer.

    2. Exam Freeze Flag. This flag is triggered by the existence of a "-L Freeze" on IDRS for an MFT and Period which has a balance due or which was for one of the periods within the time frame checked for compliance (TC 420 on a TXMODA). APOC creates a claim record for this MFT and Period with no amounts for the tax penalty or interest. The caseworker must refer to AMDISA on IDRS and contact the appropriate Examination unit to determine if an additional assessment will be proposed. If Exam indicates an additional assessment will be proposed, the caseworker must ask for the amount of the proposed assessment and compute interest on that amount from the due date of the return to the petition date. Then the caseworker must update the APOC record with the proposed tax, interest on tax, and any penalty amount(s) Exam may give, and update the flag.

      Note:

      If Exam proposes a failure to file penalty, the caseworker should compute interest on that penalty from the due date of the return to the petition date and add that amount to the penalty.


      If Exam is not going to make an additional assessment and the period is otherwise full paid, the caseworker should remove the period and update the flag. If Exam is not going to make an additional assessment but the period still has a liability, the flag should be updated.

    3. IRPTR Not Filed Flag. This flag is issued when APOC attempts to calculate an estimate using IRPTRL information, however that information results in a balance due of equal to or less than zero. APOC will input a $100 estimate and issue the flag. The caseworker can change the amount, if information warrants, and then update the flag. If no change to the estimate is warranted, the caseworker should update the flag.

    4. IRPTRL Greater than One Million Flag. This flag is triggered by the existence of an IRPTRL entry that is equal to $999,999*. This flag alerts the users that an entry is actually greater than one million. (The maximum value of the field is six-characters). The caseworker must review IRPTRO and update the period with the estimated tax calculated using the actual amounts and then update the flag.

    5. Last Return Not Filed Flag. This flag is issued when APOC attempts to calculate an estimate using Last Filed Return (LFR) information, however that information results in a balance due of equal to or less than zero. APOC will input a $100 estimate and issue the flag. The caseworker can change the amount, if information warrants, and then update the flag. If no change to the estimate is warranted, the caseworker should update the flag.

    6. Lien Recorded Date Blank or Greater Than The Petition Date Flag. This flag is triggered when the date of the NFTL is not recorded on AIS, or the date recorded is greater than the petition date and should be worked within five calendar days of APOC identifying the flagged condition. If the petition date is within 30 days of the TC 582 date, the caseworker should call the recorder where the NFTL was filed and ask for the recorded date to determine if the NFTL was filed prior to the petition date. If the NFTL was recorded prior to the petition date, the caseworker must verify the period has the correct assessment date, update the APOC record with the NFTL date and update the flag. If the NFTL was recorded after the petition date (in violation of the automatic stay), the caseworker should reclassify the period as appropriate, update the flag, and request a withdrawal of the NFTL. Managerial approval is required for a NFTL withdrawal. If the NFTL has been received but not recorded, the caseworker should schedule a follow-up to recontact the recorder prior to the earliest of: 341 Hearing, Confirmation Date or Bar Date. If the recorder has not received the NFTL request, the caseworker must reclassify the period as appropriate and update the flag. If the petition date is more than 30 days from the TC 582 date, the caseworker should update the APOC record with the TC 582 date and clear the flag.

    7. Mortgage Interest Greater Than 50% of Income Flag. This flag alerts the caseworkers the mortgage interest field on IRPTRL is greater than 50% of the total amount of the taxable income. Caseworkers must review IDRS and other sources to determine if an estimate is necessary for this period. If an estimate is NOT necessary the caseworker must update the flag and close the filing requirements. If an estimate is necessary the caseworker must update the period and update the flag.

    8. Negative Tax, Interest, or Penalty Flag. This flag is triggered by the existence of a credit balance on the tax, penalty, or interest. The total balance due on the Period Detail Screen will be correct. The caseworker must pull TXMODA and INTSTB to correct the tax, penalty and interest figures, update the APOC record to reflect the correct figures, and then update the flag. If the period should be removed from the claim, the caseworker must remove the period and update the flag.

    9. Restricted Interest or FTP Flag. This flag is triggered by the existence of a TC 270 or a TC 340 with a TC amount greater than zero. APOC creates a record for this MFT and Period with amounts for tax, penalty or interest. The caseworker must review INTSTB to determine if the interest and/or penalty is restricted when the message "Computation Hold on Interest/FTP" appears at the bottom of the screen. If interest/FTP accruals are not restricted, the caseworker must update the flag. If interest/FTP accruals are restricted, the casework must calculate the period manually, update the APOC record, and update the flag.

      Caution:

      Often interest or penalty appears to be restricted, but is not.

    10. Secured Period Flag. A Notice of Federal Tax Lien recorded on a specific period triggers the Secured Period flag. This flag should be worked within 10 calendar days of APOC identifying the flagged condition for all chapters other than chapter 7. The Secured Period flag indicates the Service may be entitled to an adequate protection or cash collateral agreement. APOC calculates the period as fully secured by default. The caseworker must determine, by reviewing the NFTL, schedules, or other sources to determine if the period should remain fully secured. If the entire amount of the period should remain secured, the caseworker must update the flag. If the period should be partially secured, the caseworker must determine the correct secured amount, update the APOC record, insert a period for the remaining amount, reclassify the period and update the flag. If the period should not be secured, the caseworker should reclassify the period and update the flag.

    11. TC 922 Flag. This flag is triggered by the existence of a TC 922 on IDRS for an MFT and period which has a balance due or which was for one of the periods within the time frame for compliance. APOC creates a claim record for this MFT and Period with NO amounts for tax, penalty or interest. Caseworkers must review TXMODA or IMFOLT and contact the appropriate Campus Automated Underreporter Unit to determine if a proposed additional assessment is planned. If an additional tax assessment is planned, the caseworker must compute the liability, update the APOC record with the proposed tax, interest and any penalty, and update the flag. If no additional assessment is planned, the caseworker should remove the period and update flag.

      Note:

      If Exam proposes a failure to file penalty, the caseworker should compute interest on that penalty from the due date of the return to the petition date and add that amount to the penalty.

    12. TF/NTF with Multiple Assessments Flag. This flag is triggered by the existence of multiple assessments on a single tax period where the due date of the return is more than three years prior to the petition date. The tax assessment will need to have a split classification (unsecured priority and general). Caseworkers should follow procedures outlined in IRM 5.9.13.20 , Claim Calculations.

    13. TXMODA ST 10/12 Credit Flag. This flag is triggered by the existence of a credit balance on a period that is identified as Status 10 or 12 on TXMODA Master File History Section. APOC will process the proof of claim calculations as if the credit does not exist. Caseworkers must review INTSTB to determine if the claim calculations are correct. If the calculations are correct the caseworker must update the flag. If the calculations are not correct the caseworker must recompute the liability, update the APOC record, and update the flag. If this assessment should not remain on the claim, the caseworker must remove the period and clear the flag.

    14. Wrong Tax Assessment Date on Lien Flag. This flag is triggered when the assessment date on the NFTL record on AIS does not exactly match the assessment date on IDRS. APOC creates a claim record and classifies it as secured. The caseworker must determine if the lien applies to the assessment in question, and if the assessment should remain as secured. If the assessment date on the AIS NFTL record does not match the assessment date for this assessment, the caseworker must update the "AIS Assessed" field and follow the instructions in item (j), Secured Period, above.

      Caution:

      An amended lien should NOT be requested during the time the taxpayer is in bankruptcy.


      If the NFTL in question does not apply to this assessment, and is not secured by any other NFTL, the caseworker should change the classification to priority or general, add a history record to document the activity, and the caseworker must update the flag.

    15. TXMODA Fault Flag. This flag indicates APOC has encountered a dummy module, for example cases in status 23, 53, etc. If the period should remain on the claim, the caseworker must use cc MFREQ or RECON to bring the period to IDRS, and then request INTSTB. If a TXMOD has a dummy module or no module, the caseworker should enter MFREQC. If an item of information is posted to IMFOLT but not to TXMOD, the caseworker should request RECON. With this information in hand, the caseworker should calculate and classify the period manually, update the APOC record, and update the flag. If the period should not remain on the claim, the caseworker must remove the record and update the flag.

    16. Unable to Determine PBE Flag. APOC issues this flag when the system cannot calculate the prior bankruptcy extension (PBE) for a specific tax period. If the period should remain on the claim, the caseworker must pull TXMOD and calculate the extension and determine the correct claim classification, update the APOC record, and then update the flag. If the period should not be on the claim, the caseworker must remove the period and update the flag.

    17. Not Filed Flag. This flag is issued when APOC is unable to compute an estimate after trying to utilize both IRP and LFR information. APOC will input a $100 estimate and issue the flag. The caseworker can change the amount, if information warrants, and then update the flag. If no change to the estimate is warranted, the caseworker should update the flag.

    18. Split Period Flag. This flag is triggered by the existence of an assessed balance due on MFT of 01, 03, 04, 09, 11, 16 and a period where the Return Due Date > Petition Date. A claim record will have been created for this MFT and Period by APOC with no amounts for Tax, Penalty and Interest. Caseworkers must decide if there are any pre-petition amounts that should be included on the proof of claim. The caseworker must calculate the pre-petition and post-petition liability for tax, penalty and interest. If there is pre-petition liability, the caseworker will update the period record with the pre-petition tax, penalty and interest amounts, and update the flag. If there is no pre-petition liability the caseworker will update the flag.

    19. Unagreed Assessment Flag. This flag is issued when an unagreed assessment posted with a date that is after the petition date. The caseworker must determine if this assessment should remain or needs to be abated, and whether or not the assessment can be included on the proof of claim. If the assessment should be included on the claim, and no abatement is needed, the caseworker must update the flag. If the assessment should remain on the claim, but an abatement is needed, the caseworker will need to update the APOC record to reflect the correct estimated paragraph and remove the assessment date. They will also need to prepare abatement paperwork (assessment can be reassessed after discharge, dismissal or other stay termination), and then the caseworker must update the flag. If the assessment should not be on the claim, the caseworker should remove the period from APOC and update the flag.

    20. Potential Missed BAL Due Flag. This flag is issued when a balance due period, greater than $25 is on IDRS but the period is not present in the AIS freeze tables. Caseworkers must decide if the period should be included on the proof of claim. APOC calculates the amount owed. If the period should be included on the claim the caseworker can update the flag. If the period should not be included on the claim, the caseworker can remove the period.

5.9.14.2.10  (12-23-2013)
Case Compliance

  1. Compliance Review. The caseworker should conduct a compliance review on cases with and without flags after all of the case flags have been cleared. The Case Compliance screen displays all compliance periods for a specific case.

  2. APOC Compliance Screen. This screen is for compliance information only. No processing is done on this screen.

    1. Each debtor IMF TIN is shown separately with compliance records for the past six years.

      Exception:

      If debtors in a joint bankruptcy filed a joint return and that period was moved to retention, APOC will not determine if both debtors are on the return for the period in retention. A cross-reference IMF TIN (X-TIN) is displayed when a joint return was filed with the debtor. The X-TIN is the primary TIN filed for that year. If the X-TIN is not listed in the "TIN" field, it is a non-debtor spouse.

    2. BMF compliance is conducted for open filing requirements for six years prior to the petition date. If the establishment date for the entity is less than six years prior to the petition date, APOC will only address compliance starting with the establishment date. If the filing requirements have been closed pre-petition, APOC will do a compliance check to the closure period instead of to the petition date.

      Note:

      For both IMF and BMF cases with a prior bankruptcy extension (PBE), a compliance check is conducted for unfiled returns for eight years prior to the petition date. Previous bankruptcy(cies) conceivably could move an eight year old unfiled return from a general claim to a priority claim. If the debtor has no previous bankruptcy filing(s), or if periods more than six years prior to the petition date will be classified as general, the compliance check for unfiled returns is systemically limited to the usual six years. Per IRM 5.1.11.6.1(5), Enforcement Determination, pursuing unfiled returns for periods more than six years prior requires manager approval.

    3. The Compliance Screen displays each debtor TIN listed and the six years of tax periods for which compliance has been checked. If a filed return is found, a "Y" appears under the data column entitled Compliance. If APOC has not identified a filed return, the annotation in the Compliance column will be "* NO *."

    4. If a TDI has been closed using TC 59(X), a "Y" will be displayed for this period, and APOC will not prepare an estimated claim.

  3. IMF Compliance Record Review. Each debtor IMF TIN is listed separately with compliance records for the past six years.

    IF THEN
    the case is filed prior to October 17, 2005, compliance is checked for six years.
    the case is filed on or after October 17, 2005, compliance is checked for six years, unless the case has a prior bankruptcy extension (PBE). A compliance check is then conducted for unfiled returns for eight years prior to the petition date.
    the debtors have previously filed joint returns and a tax year has moved to the IDRS retention register, APOC is unable to check the tax year and will create and estimated period for the secondary TIN.
    the estimated period is not necessary, remove the period.
    a joint return was filed with the debtor and the X-TIN is not present, the debtor’s TIN is the primary for that year.
    a joint return was filed with the debtor and the X-TIN (Non Petitioning Spouse (NPS) TIN) is primary on IDRS the X-Ref TIN (NPS TIN) will be displayed.

  4. BMF Compliance Record Review. BMF compliance is conducted on each MFT with an open filing requirement. APOC will research the past 24 periods for quarterly returns and the past six periods for annual returns.

    IF THEN
    the case is filed prior to October 17, 2005, compliance was checked for 24 periods for quarterly returns and 6 periods for annual returns.
    the case is filed on or after October 17, 2005, compliance was checked for 24 periods for quarterly returns and 6 periods for annual returns unless the case has a prior bankruptcy extension (PBE). A compliance check is then conducted for unfiled returns for 8 years prior to the petition date.
    the established date for the BMF entity is less than eight years prior to the petition date, APOC will only address compliance starting with the established date.
    the filing requirements have been closed prior to the petition date, APOC will do a compliance check to the closure period instead of to the petition date.

  5. Prior Bankruptcy Extension (PBE) Period Review. Cases with a PBE must have a compliance check conducted for unfiled returns for the past "eight" years prior to the petition date. Previous bankruptcies could move an eight year old unfiled return from a general claim to a priority claim.

  6. Delinquent or Filed Return. If a return is found, a "Y" appears under the data column entitled Compliance. The "Y" indicator only confirms a tax return was filed. It does not establish that the period is fully paid, has a debit or credit balance. If APOC has not identified a filed return, the annotation in the Compliance column will be "⋆NO⋆" .

    Note:

    If a Return Delinquency period has been closed using TC 59(X), {e.g. TC 590, TC 591 or TC 594}, a "Y" will be displayed for this period and APOC will not prepare an estimated claim record.

5.9.14.2.11  (12-23-2013)
Claim Record

  1. Removing a Claim Record from APOC. Should a caseworker choose to remove a claim record from APOC for a specific period, (s)he should select the period from the APOC Period List, select the Remove Period button from the APOC Period Detail screen and select the Save button. This will remove the record. A message will appear on the claim record stating PERIOD REMOVED. Once a period has been removed, the Remove Period button changes to Restore Period. By selecting the Restore Period button and selecting the Save button, the removed period will be restored.

  2. Insert New Period. When a caseworker chooses to select the Insert New Period button available from the APOC Period Detail screen an exact copy of the claim record previously chosen is created. The caseworker must update all areas that need to be changed. Select the Save button to save the record.

    Caution:

    The TIN field on the newly created record defaults to the first TIN in the drop down box. To ensure the claim is filed with the correct information, the user must validate that the correct TIN is placed into the field.

  3. Create Period. When a caseworker chooses to select the Create Period button available from the APOC Case Detail screen a claim record will appear with the case number, last name and TIN options. The caseworker must choose the appropriate TIN from the Drop Down TIN Options and update all blank areas with the appropriate information. Select the Save button to save the record.

  4. Split Period. If an existing claim record must be split (usually when a secured period should be partially priority or general), the caseworker must use Insert New Period button available from the APOC Period Detail screen which creates an exact copy of the claim record previously chosen. The caseworker must update all areas that need to be changed. Select the Save button to save the record.

5.9.14.2.12  (12-23-2013)
Printing, Generating or Transmitting APOC Claims

  1. Claims Available for Printing. After cases have completed the APOC process, their claims are available for printing by selecting Bulk Forms under the Miscellaneous Options from the AIS Home Page.

    Note:

    As discussed in IRM 5.9.14.2, proofs of claim are NOT generated or printed from the APOC system. Once APOC has completed its tasks, it populates the relevant fields in AIS so a claim can be produced in hard copy or electronic format. The electronic signature of the specialist assigned the case will appear on the front of the claim.

  2. Process APOC Button. Both APOC and APOC Amends systems now allow users to Electronic Proofs of Claim (EPOC) their claims AFTER all required actions have been completed. The Process APOC button is located on the lower left side of the Case Detail screen.

    Note:

    If caseworkers choose to move the claim to AIS without EPOCing the claim, then they will still be able to process EPOC from the AIS POC screen. Caseworkers should utilize the Submit Claim for EPOC button in the EPOC area of the AIS Proof of Claim screen, for this purpose.

5.9.14.2.13  (12-23-2013)
Terminating a Case

  1. Terminating a Claim. If a claim no longer should be filed (e.g., a case has been dismissed or converted to Chapter 7 No Asset), the case can be terminated in APOC to prevent the data from being written over to AIS. The Terminate Case button is located on the APOC Case Detail screen. The caseworker must select Terminate Case button and select Save. A message will appear "Do you want to terminate this case?" The caseworker must select Yes or No and select Save.

  2. Identifying Terminated Cases. When a case has been terminated, the caseworker will not be able to resolve any of the flag conditions. The case is immediately terminated and updated in APOC and AIS after the caseworker exits the Case Detail screen. The case automatically moves to "Completed Cases" . APOC will input:

    1. An "R" (Terminated original APOC case) in the "APOC Status" field on the AIS Taxpayer screen.

    2. A "T" (Terminated Amends case) in the POC statement on the APOC Case Detail screen.

  3. Terminated Cases Report. Cases terminated in APOC will appear on the Terminated Cases Report located on the APOC Reports Menu.

    Note:

    A terminated case can not be run through APOC again. If a claim is later deemed necessary, it should be prepared manually.

5.9.14.2.14  (12-23-2013)
Estimated Return Process

  1. Estimated Return Information. APOC processes periods for the Debtor TINs which were not in compliance. Estimates are created for any period which had either "None" on the IMFOLI for the Debtor TIN and no additional information was available from cross reference SSNs, or the period was completely missing from Debtor TINs IMFOLI and no additional information was available from cross reference SSNs. If IRPTRL exists for a TIN and period, APOC investigates the IRPTRL record. If IRPTRL does not exist for this TIN and period or if MFT is not 30, APOC develops a tax estimate using information from the last return filed. A claim record is created using this estimate as the tax amount.

  2. IMF Estimated Process. APOC computes an estimate using the following process for IMF periods:

    • IRPTRL is used for the unfiled tax year and an estimate is computed based on all reported income.

    • Self-employment tax is computed when non-employee compensation is identified and adds it to the tax estimate.

    • Penalties are not computed on an estimated period.

    • APOC will reduce the estimate when there are credits available on a period.

  3. Non-Employee Compensation. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Step Action
    1 Take total NEC x .9235 = Net Earnings from Self employment
    2 Net Earnings from Self employment x .153 = SE tax
    3 SE tax x 50% = ½ SE tax
    4 Add all other taxable income to the NEC income = Total taxable income
    5 Total taxable income -1/2 SE tax =Adjusted Gross Income
    6 Adjusted gross income - $5000 (standard deduction) - $3000 (personal exemption) = Taxable income
    7 Taxable income x .2 (tax rate) = Income tax

  4. IMF Reference Tables. IMF reference table requirements are as follows:

    IF Then
    IRPTRL is available and Mortgage Interest is more than 50% of the total income, APOC:
    • Issues a period flag,
    • Creates a claim record, and
    • Classifies this claim record.
    IRPTRL is not available, APOC goes to LFR to compute an estimate:
    • The tax on the LFR is increased by 5% per year to the year being estimated.
    • The withholding figure on the current year credits (credit elect or estimated tax payments) are deducted from the estimated amount.
    • The resulting amount is used to create a claim record.
    IRPTRL and LFR do not exist for that period and there is a prior estimated tax period based on IRPTRL APOC:
    • Deducts the withholding figure on the current year credits (credit elect or estimated tax payment) from the estimated amount.
    •Creates a claim record.
    IRPTRL and LFR do not exist for that period and there is not a prior estimated tax period based on IRPTRL APOC:
    • Creates a claim record,
    • Inputs a $100.00 estimate, and
    • Issues a flag.

    Exception:

    APOC does not issue this flag in Chapter 7 cases, or for unsecured general periods in Chapter 13 cases.

  5. BMF Estimated Process. APOC computes estimates for BMF periods using the following process:

    • BMF periods are based on LFR information.

    • The tax amount is calculated from the period liability using all TC 150s, 290s or 300s.

    • APOC will reduce the estimate when there are credits available on a period.

    • The tax amount is input to the APOC claims record.

    • No penalty is computed for the estimate.

    Note:

    APOC does not do compliance on returns such as tax form 2290 or 944, thus it will not compute estimates for those returns.

  6. BMF Reference Tables. BMF reference table requirements are as follows:

    IF THEN
    An estimate cannot be computed and the MFT is 01, 03, 11, 16 or 19, APOC:
    • Creates a claim record,
    • Inputs a $100.00 estimate,
    • Classifies the record as P (Priority), and
    • Issues a flag.

    Exception:

    APOC does not issue this flag in Chapter 7 cases.

  7. BMF Split Period Estimates. APOC computes an estimate for “Split Periods” using the liability incurred after the period beginning date and before the petition date (pre-petition). It is computed as follows:

    • A prorated estimate is computed using 91 days for quarterly returns and 365 days for annual returns.

    • The tax amount for the last filed return is divided by the number of days for a daily rate.

    • The number of days is computed from quarter or year beginning date to the petition date for the total of pre-petition days.

    • The pre-petition days are multiplied by the daily rate for the prorated estimate.

    Example:


    • Last Filed return had tax of $455.00.
    • 455.00 / 91 = 5.00 per day.
    • Beginning of quarter to petition date is 50 days.
    • 50 days X 5.00 = 250.00 for the prorated estimate.

5.9.14.3  (11-19-2010)
Amended Automated Proofs of Claim (AAPOC)

  1. APOC Amends Information. When a proof of claim has been timely filed and situations warrant, an amended claim may be filed as necessary to claim the correct liability owed the Service. Amended claims processed through APOC are not limited to initial proofs of claim created by APOC, thus all cases shall be candidates for the APOC Amends process.

  2. Source for Amended Claims. The basis for APOC Amends process is the existing "Litigation Transcript System" (LTS) process, a subsystem of AIS. LTS matches "Master File" (MF) data with a -V and/or –W freeze codes with the TIN records on the AIS. The MF data is extracted weekly to a file that is sorted and transmitted to the AIS database. LTS transcripts are retained for five weeks, after that time, the transcripts are deleted from AIS. The litigation transcript data that is available to the APOC Amends process is the source for triggering an automated amended proof of claim.

5.9.14.3.1  (12-23-2013)
Amends Process

  1. Amends Case Selection. The following must be met before a case will be eligible for APOC Amends processing.

    • The case is a chapter 7A, 11, 12 or 13.

    • The Employee Org1 level is NOT 85000 (CIO).

    • "Discharged" , "Dismissed" , "Noticed " and "On AIS" fields are Null.

    • Proof Required is F.

    • Proof Filed is NOT Null.

  2. Litigation Transcript Criteria. The following must be met before a transcript will be eligible for APOC Amends processing:

    • The transcript type is "NEW ASSMTS -----Transaction Code 150 Found" .

    • The TC 150 has posted to IDRS (TXMODA) with an assessment date.

    • Period Ending date on Litigation transcript is determined to be "Pre-Petition" .

      Note:

      APOC Amends does not process "Post-Petition or Split Periods" .

  3. Estimated Paragraph Criteria. APOC Amends will process the litigation transcript if the tax period was included on the proof of claim with an "Estimated Paragraph" equal to one of the following:

    • 1 (UNASSESSED - NO RETURN) or,

    • c (UNASSESSED LIABILITY) or,

    • d (NOT FILED) or,

    • l (UNASSESSED - NO RETURN).

      Note:

      Occasionally employees will choose to amend a proof of claim after receiving the "original tax return" . Employees must remember to change the "estimated paragraph" number/alpha for the manually amended period to something other than "1, c, d or l" to prevent APOC Amends from processing the Litigation Transcript when the return posts to IDRS.

  4. Processing Delays. APOC may encounter processing delays caused by any of the following:

    • Problems with IP Address connections to IDRS,

    • IDRS Dead Cycles

    • LTS unavailable, or

    • TC 150 assessed on LTS but not found on TXMODA.

  5. TC 150 Not Found on TXMODA. When a "TC 150 New Assessment" transcript is selected for Amends processing but the TC 150 does not appear on the TXMODA, APOC will abort the transcript and select it again during the next Amends process.

  6. MFREQ. The Amends program has added the ability to run MFREQ. Occasionally there are times when the amends program is unable to retrieve INTSTB for a pending TXMODA. When this occurs APOC will abort the transcript and select it again during the next Amends process.

  7. "APOC Review" Field. The "APOC Review" field located on the Litigation Transcript screen will automatically be populated with the date APOC Amends selected the transcript for processing.

5.9.14.3.2  (12-23-2013)
Amends Status

  1. "APOC Status" Field. The "APOC Status" field is located on the APOC Case Detail screen. This field will be populated with one of the following APOC Amends status codes:

    • H – Amends case on Hold

    • T – Terminated Amends case

    • @ - Completed Amends case

  2. H Status. All cases selected for amendment will be in "H (Hold)" status. When a caseworker removes the "H" from the "APOC Status" field, APOC will process the case during the next APOC run. The case will then move to AIS and update the AIS POC. All periods selected for amendment should be reviewed prior to removing the "H" .

  3. T Status. A caseworker may choose to terminate the case from the Amends process by selecting the Terminate Amend button located on the lower portion of the APOC Case Detail (Amends) screen. The case is immediately terminated and updated in APOC and AIS after the caseworker exits the APOC Case Detail (Amends) screen. The case automatically moves to "Completed Cases" .

  4. @ Status. When a caseworker removes the "H (Hold)" from the "APOC Status" field, APOC will select the case during the next APOC Initiation Process and process the amendment. The case will then move to AIS and update the AIS POC. The "@" sign will appear in the "APOC Status" field on the APOC Case Detail Screen and in the "APOC Status" field on the AIS Taxpayer screen when a case has been amended by APOC Amends.

    Note:

    Caseworkers must remember to submit the case to be EPOC’d or generate the case for printing.

5.9.14.3.3  (11-19-2010)
Amends Access

  1. APOC Amends Access. Select the APOC tab from the AIS Home Page to access APOC and review the results of APOC Amends case processing.

  2. Case Type. Select the Amended Cases Case Type from the APOC Case Query/Report screen.

  3. When the Case Type selection is Amended Cases, the options automatically change to allow caseworkers the option to choose between "Open Amends” or “Completed Amends" . The screen defaults to "Open Amends" .

5.9.14.3.4  (12-23-2013)
Open Amends

  1. Open Amends cases are those cases that have not successfully completed the APOC Amends process. Open Amends cases are those with a date in the "Amend Beg Date" field and without a date in the "Amend End Date" field on the APOC Case Detail (Amends) screen. These cases are currently in "H (Hold)" in the Amend status, awaiting processing determination by the caseworker.

    1. Amends Case List (Open). This screen provides a list of all cases with a transcript selected for the amendment process. When the Case List tab is selected the system automatically defaults to the first case on the list.

    2. Amend Beg Date. This column reflects the date APOC Amends selected the case for processing.

    3. Amd. This column will always reflect a "YES" which indicates APOC Amends selected the case for processing.

    4. Amend Status. This column reflects the current APOC Amend status. The Open Amends cases will always reflect a status of "blank" which reflects the user has removed the "H" and the case is awaiting further processing, or "H" if it has not been worked.

5.9.14.3.5  (12-23-2013)
Amends Time Frame Requirements

  1. Field Insolvency. AI Field Insolvency groups generate and work Litigation Transcript System (LTS) reports on cases currently assigned to the Field.

  2. Weekly Extractions. MF data are sorted and transmitted to the AIS database once a week. The AAPOC system will process the "Bal Due" TC 150 New Assessment transcripts for cases assigned to the Field and meet the "Case Selection" criteria.

  3. Time Frame. Caseworkers must review "Open Amends" cases within 30 calendar days of the Amend Begin Date.

5.9.14.3.6  (12-23-2013)
APOC Amends Flag Conditions and Resolutions

  1. TC 150 Flags. Flags will be issued for the following TC 150 transcripts processed through the APOC Amends system:

    1. TC 150 Zero Module Balance – Possible Offset. APOC Amends will select a New TC 150 Zero Balance transcript where the original POC contained an estimated delinquent period and the tax return for this period is now filed and assessed. APOC processes new assessment periods with a zero balance. APOC provides a zero dollar calculation of the period based on the filed return. The caseworker will need to review the Litigation Transcript for this particular period flag to determine if an offset occurred and to which period the offset was applied. If an offset occurred, the caseworker will process the offset on the appropriate APOC record and then update the flag. If there was no offset, but the claim still needs amending to reflect the filing of the return, the caseworker can update the claim. If the claim no longer needs amendment, the caseworker can terminate the amends process.

      Reminder:

      If the bankruptcy is joint and separate estimates were done by APOC, and then the taxpayers file a joint return, the caseworker will need to remove or zero the estimate for the other TIN.

    2. TC 150 LT Credit Module Balance. APOC Amends will select a TC 150 Credit Module Balance transcript where the original POC contained an estimated delinquent period and the tax return for this period is now filed and assessed. APOC processes new assessment periods with a credit balance. APOC provides a zero dollar calculation of the period based on the filed return. The caseworker will need to review the Litigation Transcript for this particular period flag to determine if an offset should take place and to which period the offset should be applied. If an offset is required, the caseworker will process the offset on the appropriate APOC record and then update the flag.

      Note:

      APOC does NOT move the credit on IDRS. The caseworker will need to ensure that credit systemically offsets to the correct period or request a credit transfer.


      If there is no need for offset, but the claim still needs amending to reflect the filing of the return, the caseworker can update the claim. If the claim no longer needs amending, the caseworker can terminate the amends process.

      Reminder:

      If the bankruptcy is joint and separate estimates were done by APOC, and then the taxpayers file a joint return, the caseworker will need to remove or zero the estimate for the other TIN.

    3. TC 150 LT Balance Due. APOC Amends will select a New Assessment Transaction Code 150 Found transcript where the original POC contained an estimated delinquent period and the tax return for this period is now filed and assessed. APOC processes new assessment periods with a balance due and issues this flag. Users must decide if the period that was previously estimated should be amended to reflect the new balance due. APOC calculates the new amount owed. If the period should be amended the caseworker can update the flag. If the period should not be included on the claim, the caseworker can terminate the amends process.

      Reminder:

      If the bankruptcy is joint and separate estimates were done by APOC, and then the taxpayers file a joint return, the caseworker will need to remove or zero the estimate for the other TIN.

    These flags are located in the “Period Flag” section on the APOC Period Detail screen. Flags must be resolved prior to case completion. A case will appear on the Open Amends Report and the Flagged Amends Report until all flags have been resolved. A case with an open flag cannot be submitted for processing through EPOC until after flags have been resolved.


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