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Part 5. Collecting Process

Chapter 19. Liability Collection

Section 2. Return Delinquency

5.19.2  Return Delinquency

5.19.2.1  (02-15-2011)
Return Delinquency Overview

  1. The purpose of this section is to provide procedures for both Individual Master File (IMF) and Business Master File (BMF) working the Return Delinquency (RD) Program in the campuses, call-sites, and Field Assistance (FA) offices to ensure timely resolution of taxpayer inquiries received via telephone, paper or face-to-face in regards to a RD module.

  2. Employees need to ensure communications from taxpayers are addressed in a timely manner and case actions are timely to ensure the length of the process is as brief as reasonably possible. Throughout this IRM, if additional information is needed to resolve the case or insufficient response is received and a telephone number is available from IDRS or on the notice, Automated Collection System Support (ACSS) and W&I Compliance Services Collection Operations (CSCO) must attempt at least two phone contacts (one phone attempt for SBSE CSCO employees) prior to sending a letter to the taxpayer. As when sending a letter requesting additional information from the taxpayer, allow up to 30 days for the taxpayer to respond and 15 days for mail delivery, for a total of 45 days.

    Note:

    Ensure you follow disclosure procedures; see IRM 11.3.2, Disclosure of Official Information, and IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail.

  3. Account Management Services (AMS) comments should be the primary source for documentation. However, if AMS is unavailable, work case to completion via Integrated Data Retrieval System (IDRS)/ACS green screen, and document (i.e. history items on ENMOD or TXMOD/ACS green screen comments with appropriate information), accordingly.

    Note:

    If inventory is controlled on AMS, it will be necessary to update AMS once it becomes available, close the AMS control and note AMS: "Case worked on IDRS, AMS down."

  4. When working CSCO Transcripts, take a count for each module resolved.

  5. All employees working RD issues are required to follow disclosure guidelines. Refer to IRM 11.3.2.3.2 for disclosure guidance process and/or IRM 21.1.3.2.3, Required Taxpayer Authentication prior to discussing any account information with taxpayer and/or their representatives.

  6. IRS correspondence or notice errors should be identified and reported to the Office of Taxpayer Correspondence (OTC) utilizing the Servicewide Notice Information Program (SNIP) website. Employees should report any correspondence errors identified, including notices that are smudged, unreadable, or sent to an incorrect taxpayer. The website form should also be used to report correspondence that may have an unauthorized disclosure of personally identifiable information (PII). See IRM 21.3.1.1.1, Erroneous Correspondence Procedures, for additional information.

  7. All Employees should attempt to resolve each RD account on initial contact including closing modules with the appropriate Transaction Code (TC) 59X.

  8. If addressing the delinquent return via phone contact and the taxpayer has the return already prepared, encourage the taxpayer to fax directly to you while on the phone. If return is faxed, follow procedures in IRM 5.19.2.6.4.5.12, IMF Response with Original Return or IRM 5.19.2.6.5.4.10, BMF Response with Original Return(s).

  9. When requesting a delinquent return, remind the taxpayer to ensure the correct current address is on the return, whether it is a copy or original return.

  10. Written requests for a RD case received in CSCO and ACS Support Operations must be controlled within 30 days from the IRS received date if the case cannot be immediately closed, whether or not the case meets Policy Statement P-6-12 criteria (see IRM 21.3.3.1.1 Policy Statement P-6-12. For IMF accounts- Input appropriate delays if case cannot be immediately worked. For BMF accounts - Input a cycle delay of up to 8 cycles. These actions will delay or prevent the next notice issuance. See IRM 5.19.2.6.1.1, Accelerate or Delay to TDI Status 03.

    Note:

    In instances where case is being controlled, you may want to consider delaying the next notice issuance see IRM 5.19.2.6.1.1, Accelerate or Delay to TDI Status 03. In addition, for UD mail received follow IRM 5.19.7.5 , Undeliverable (UD) Mail, Bad Address and Address Research (ADR) Processing.

  11. If the case meets P-6-12 criteria and cannot be closed by the 30th day, send an interim letter (for additional guidance see IRM 21.3.3.4.2.2, Interim Responses). You must always send a closing letter 2358C or appropriate letter to inform the taxpayer of actions taken to resolve their issue whether or not an interim letter was sent. Refer to IRM 21.3.3.4.2 for Policy Statement P-6-12 Procedures, for additional information.

    Note:

    Under normal circumstances, responses (i.e., Original Return or Amended Return) received in a response to a RD notice is excluded from P-6-12 criteria per IRM 21.3.3.2, What is a Correspondence? - Policy Statement P-6-12 Exclusion List. However there is one exception, if a return is received in response to a notice or separate taxpayer letter indicating the taxpayer wants an acknowledgement, a closing letter or appropriate letter must be sent.

  12. Inventory should be worked on a first-in first-out basis to reduce/eliminate overage. See IRM 3.30.123.5.2, Response to Correspondence and Overage, for additional guidance.

  13. For reporting purposes, the "Days to Close" for CSCO Operations is determined from the CSCO received date to closing date.

  14. If responding via correspondence to a taxpayer response (CP notice or letter), employees are required to acknowledge documentation and/or information received and take all necessary actions. See IRM 21.3.3, Incoming and Outgoing Correspondence/Letters for additional guidance. When responding to a BMF CP 259/518 notice response to request additional delinquent returns, it is necessary to acknowledge receipt of the correspondence. However, it is not required to confirm each tax return secured.

    Note:

    When responding back to taxpayer, ensure the letter is sent using a single name line. If a joint name is present, overlay the name line on CC LETER to a single name line. Do not change on CC ENREQ.


    For CSCO employees: When corresponding with taxpayers use the appropriate Accounts Management (AM) Toll Free number. Update AMS to reflect actions taken and any pertinent information for the next employee.

    Note:

    Situations may arise when it will be necessary for CSCO employees to give their direct phone number to resolve a situation on an account, but these instances should be rare.

  15. If taxpayer requests written confirmation that we received their tax return or correspondence when no other information is required at this time, send 2358C, 4431C or other appropriate letter.

  16. When referring a case to another office for resolution you must inform the taxpayer. You may inform the taxpayer by telephone or send Letter 86C. Refer to IRM 21.3.3.4.2.1, Use of 86C Letter - Referring Taxpayer Inquiry/Forms to Another Office for additional guidance on when it is necessary to issue the letter.

  17. For all other IDRS control procedures, see IRM 21.5.1.4.2.2 when the criteria in (10) above is not met.

  18. In all references throughout the IRM that instruct employees to address any balance due issue, it is only required for employees that have had training on Balance Due (BD) work. If the employee has not had adequate BD training, then take the necessary actions regarding the RD issue and refer the BD issue to the appropriate area within your site.

  19. When working either correspondence or telephone contact, it is required to verify/secure and input all taxpayer's phone numbers (i.e. home, work, cell phone, etc.) when working any Notice Status 02 or Taxpayer Delinquency Investigation (TDI) Status 03 modules. Update IDRS, ACS and AMS accordingly.

  20. When securing an updated address via telephone, correspondence, or tax return, update entity as mailing address vs. location address, if applicable. If a copy of tax return is secured, research account to verify if address secured is valid or current. If research indicates the address on the return is the most current, update entity accordingly. When the taxpayer is requesting a change of address, and has moved from one state to another, you may need to update the Collection Location Code (CLC) . See IRM 5.19.1.3.2.1, Entity and Address Changes. For additional assistance for address changes, refer to:

    • IRM 3.13.5.37, International Addresses (US Possessions and Foreign Countries).

    • IRM 3.13.5.38, Domestic Address Changes.

    • IRM 2.4.9, IDRS Terminal Input - Command Codes ENREQ, INCHG, IRCHG, BNCHG and BRCHG

    Note:

    If address on file is a P.O. Box, and a street address is secured, update P.O. Box as mailing address, and street address as location address on ENMOD and visa versa, if scenario reversed.

  21. For ACS/ACSS/FA Employees only: When working a TDI Status 03 module and the taxpayer also has a Balance Due (Taxpayer Delinquent Account [TDA]) module (Combo case), it is required to verify, update and secure new levy sources. For all other TDI issues you are not required to update and secure levy sources.

5.19.2.2  (02-15-2011)
What Is The Return Delinquency Program?

  1. The objective of the Return Delinquency (RD) Program is to work responses to notices that were generated through Case Creation and issued to taxpayers that have been identified as liable to file and have not filed a tax return by the Return Due Date (RDD).

  2. A compliance check is conducted for a delinquent tax return based on the Program Completion Date (PCD) for each specific Individual Master File (IMF)/Business Master File (BMF) tax return. PCD is determined when all timely filed, error free returns are processed and the information is transmitted to Martinsburg Computing Center (MCC) for posting.

  3. A Transaction Code (TC) 140 is created on IMF Taxpayer Delinquency Investigation (TDI) modules to establish the entity and/or Tax Module and Status 02 Delinquency Inquiry on the affected module. For BMF TDI modules a TC 141 is created to update the Compliance record and start the RD notice process. (TC 141 does not post to Integrated Data Retrieval System (IDRS) for BMF modules, however if the account is in TDI status, it can be assumed the TDI record has been created.)

  4. Modules in the RD Program consist of the following:

    • Delinquent Notice Status 02

    • TDI Status 03

    • Case Closed in Status 06 with a TC 593, 595, 596, 597, or 598

    • Case Closed in Status 06 with a TC 590 cc 19, which only suppresses the notices.

  5. Other RD Non-Filer programs are ASFR and Refund Hold (IMF), and A6020(b) (BMF). Refer to IRM 25.12.1, Processing Refund Hold Program Inventory, IRM 5.18.1 regarding the ASFR program and IRM 5.18.2 for the A6020(b) program.

5.19.2.3  (12-08-2009)
Return Delinquency Case Creation Overview

  1. Return Delinquency (RD) case creation identifies taxpayers who have not filed a delinquent tax return, but IRS data indicates they are liable to file. This section defines the criteria for both Individual Master File (IMF) and Business Master File (BMF) Case Creation.

5.19.2.3.1  (02-15-2011)
IMF Delinquency Case Creation

  1. IMF Return Delinquency case creation identifies taxpayers who have not filed a return but potential income/data is identified and reported to the IRS via "Information Return Masterfile" (IRMF) that meets certain case selection criteria. It also identifies Stop-filer taxpayers who filed the previous year and stopped filing the next.

  2. All tax modules identified as a potential RD case during case creation are assigned a Selection Code (SC). Not all Selection Codes are worked in each specific RD program year. See Exhibit 5.19.2-4 through Exhibit 5.19.2-9, Selection Codes, for a list and definition of income types for each selection code. See iDocument 6209, Section 11 for a list of current and prior year selections codes.

  3. New Taxpayer Delinquency Investigation (TDI) modules selected into the RD program for a specific tax year are issued a notice requesting the delinquent return. As of January 2008, the CP 515 was replaced with CP 59 and CP 759 (Spanish version). The CP 59/CP 759 was created as a generic notice that is mailed to all delinquent IMF modules and will contain Publication 1, Your Rights as a Taxpayer, Notice 609, Privacy Act Notice, and a return envelope.

  4. A CP 518 will be mailed to taxpayers if a return does not post or the open RD is not closed within 8 weeks. An exception to the rule is when a "new" created module has an existing associated module, the "new" module will accelerate to the status of the existing module bypassing a CP 518. The CP 518 will contain Notice 1219A, Notification of Potential Third Party Contact, and a return envelope.

  5. The case proceeds to TDI ST03 if the case is not closed within 6 weeks of the CP 518.

    Note:

    Cases selected for Automated Substitute for Return (ASFR) receive one notice, then six weeks later go to TDI Status 03. Not all modules go to TDI Status 03.

  6. IMF Primary Code "B" (PC-B) cases receive two notices (CP 59 & CP 516) and will remain in Notice Status 02. The CP 516 will contain a return envelope only.

    Note:

    A Notice Status 02 module, including PC-B's, can systemically be moved into TDI Status 03 without receiving a subsequent notice if the taxpayer already has a module in TDI Status 03.

  7. A notice sample is reviewed by the Compliance Services Collection Operations (CSCO) TDI function prior to mailing to ensure accuracy. See IRM 5.19.2.6.11, Return Delinquency On-Line Notice Review (OLNR) System, for procedures on working the OLNR system.

  8. Unresolved IMF RD cases can be considered for ASFR or ACS processing.

  9. If UD mail is received follow IRM 5.19.7.5, Undeliverable (UD) Mail, Bad Address and Address research (ADR) Processing.

5.19.2.3.2  (01-03-2011)
BMF Delinquency Case Creation

  1. As of June 2009, BMF Case Creation revised the process by creating modules via BMF Case Creation Notice Identification Process (CCNIP) application. The application will prioritize and identify productive inventory using third party data, i.e. Information Returns Master File (IRMF), Payer Master File (PMF) and Combined Annual Wage Reporting (CAWR), along with account data. Collection selection codes are assigned to each module to identify and prioritize work selection and assignment. Headquarter analysts will select inventory based on Selection Code (SC), Master File Tax (MFT) and inventory needs. The BMF selection codes are displayed on CC TXMODA, to assist with research and indicates the last reported income for the entity.
    See Document 6209, Section 11-7, "BMF-IRP Selection Codes" , for current BMF Selection Codes.

  2. Potential BMF RD modules are identified and created 16 weeks after filing due date of each specific return type. A CP 259/CP 959 notice (first notice) is sent to the taxpayer to request filing of the return. The CP 259/CP 959 will contain Publication 1, Your Rights as a Taxpayer, Notice 609, Privacy Act Notice, and a return envelope.

  3. The CP 259/CP 959 is mailed to all new delinquent BMF modules, regardless of the current assignment of the entity. However, if there is an associated module in Status 03, the module will receive the CP 259 notice and immediately accelerate to the status of the associated module.

  4. If a response is not received and the case not resolved within 10 weeks, a follow-up RD notice, CP 518 is sent to most entities. The CP 518 will contain a Notice 1219A, Notification of Potential Third Party Contact, and a return envelope If the module is not closed within 10 weeks after the mailing of the CP 518, the module accelerates into TDI Status 03. Suppression criteria limits volume of modules receiving a second notice. Cases not receiving the follow-up notice are called Primary Code "B" (PC-B). They only receive one notice (CP 259) and will remain in Notice Status 02.

  5. BMF Return Delinquency notices can be verified using CC TXMOD and CC BMFOLS. The notice information is displayed on CC TXMOD in the "Notice History Section" , with the exception of PC-B modules. PC B modules will not have information displayed as these type of modules do not progress to notice status. However, CC BMFOLS displays what type of Primary Code was assigned, along with the cycle the notice was issued.

  6. Notices are reviewed by the CSCO TDI function prior to mailing. See IRM 5.19.2.6.11, Return Delinquency On-Line Notice Review (OLNR) System for procedures on working the Notice Review Register.

  7. Unresolved RD BMF modules will continue within the notice stream to ACS, where they may be considered for A6020(b) processing.

  8. If UD mail is received follow IRM 5.19.7.5, Undeliverable (UD) Mail, Bad Address and Address research (ADR) Processing.

5.19.2.4  (02-15-2011)
Manual Creation of a Return Delinquency Module (IMF Only)

  1. The purpose of manually creating a return delinquency (RD) is to prompt the generation of RD notices on modules not previously selected through case creation and/or accelerating other potential RD modules to Taxpayer Delinquency Investigation (TDI) status. These manually created modules are an indication enforcement action is necessary to pursue collection. This section applies when working calls and correspondences only.

  2. The following REQUIREMENTS must be met (per module) in order to manually create a RD (Exception: State Reverse File Match Initiative (SRFMI) and Refund Hold (RH) modules). Once determination has been made to create a module (TC 474), continue to follow IRM 5.19.2.4.1, Manual Creation of a Return Delinquency Module on IDRS:

    • SUPOL record has to be present,

    • No TC 140 present,

    • Must be above filing requirements,

    • Must exceed minimal tax due (see IRM 5.19.2.6.4.5.3, IMF Little or No Tax Due (LNTD),

    • On current processing year only input a TC 474 after November 15th. Current processing year means 20 weeks from the normal Return Due date (RDD) in which the return should have been filed.

  3. If the requirements above are not met but IRPTR indicates the taxpayer is liable (above FR and exceeds LNTD) notify the taxpayer a return needs to be filed. Provide a deadline date (target date) to file the return and update AMS comments appropriately. If there is a previous TC 597 or TC 598 on the module, reverse with a TC 592. The account will systemically return to Status 02 or Status 03, therefore there is no need to manually create a RD module.

    Note:

    If you are on the phone with the taxpayer or need to correspond back, you can state the following: "This is a reminder that your tax year XXXX return was due on April 15th. If you have not filed the return or a valid extension, this return should be filed immediately."

  4. Do Not manually create an RD module if research indicates:

    • "Below Filing Requirement" , see IRM 5.19.2.6.4.5.1, IMF Response Taxpayer Not Liable (Income Below Filing Requirements),

    • "Refund Due" , see IRM 5.19.2.6.4.5.2, IMF Refund Due,

    • "Little or Not Tax Due " , see IRM 5.19.2.6.4.5.3, IMF Little or No Tax Due,

      Note:

      Since no TC 140/474 exists on a module meeting the above criteria, do not input a TC 59X as this will cause an Unpostable condition. Only inform the taxpayer to file the return and provide a deadline date with no follow-up date. Update Account Management Services (AMS) history, as appropriate.

    • The module is more than 6 years old (to determine the last 6 years, see IRM 5.19.2.6.4.5, paragraph 6, IMF Determining Liability), or

    • Current processing tax year and it is before November 15th.

      Note:

      If you are on the phone with the taxpayer or need to correspond back, you can state the following: "This is a reminder that your tax year XXXX return was due on April 15th. If you have not filed the return or a valid extension, this return should be filed immediately."

5.19.2.4.1  (02-15-2011)
Manual Creation of a Return Delinquency Module on IDRS

  1. The purpose of this section is to illustrate the method of manually creating an IMF RD module.

  2. After determination is made to create a module per IRM 5.19.2.4, Manual Creation of a Return Delinquency Module (IMF Only) and IRM 5.19.2.6.4.5, IMF - Determining Liability, use the following Integrated Data Retrieval System (IDRS) Command Codes (CC).

    • IMFOL, see IRM 2.3.51, Command Code IMFOL.

    • ENREQ, see IRM 2.4.9, IDRS Terminal Input, CC ENREQ, INCHG, IRCHG, BNCHG, and BRCHG and CC FRM49 and/or TDIRQ.

    • FRM49, see IRM 2.4.26, Command Codes FRM14, FRM49, and TDIRQ.

    .

  3. Command Code FRM49 is used to input TC 474, TC 475, and TC 590-599 resulting from an analysis of the taxpayer(s) response. TC 474 is used to "Establish a Tax Module" or to "Delay a TDI" .

  4. To establish an IMF tax module, follow the instructions below:

    If Then
    A module is established on IDRS but does not have a TC 140,

    1. Input a TC 474 cy 08 (on line 2 in positions 32-33) and input Selection Code (SC) "S96 " for Full Compliance Check (FCC) or "S99" for State Reverse File match Initiative (SRFMI) in positions 35, 36 and 37, using CC FRM49. See IRM 2.4.26-1, Single input on FRM49, for all fields required.

      Note:

      You must always enter a "S" preceding the Selection Codes.

    2. Refer to paragraph 5 below to see if a Compliance record needs to be established using CC TDIRQ.
    A module is not established and it is earlier than the established tax year indicated on CC ENMOD/IMFOLE,
    (example: CC ENMOD indicates tax year 2006 and subsequent, however you need to establish tax year 2005).

    Note:

    For additional Entity changes and other scenarios for a TC 013, see IRM 3.13.5.36, Changing/Correcting a Taxpayer's Name (generates a TC 013).

    1. Input CC ENREQ proceeded by CC ENMOD and input the following fields on CC INCHG to establish the TC 013:

      • Doc-CD=63

      • New- Name-CNTRL=(first 4 letters of the last name)

      • Primary- Name = (enter first and last name, use a bracket "]" in front of the last name.

      • Year-NM-Line=(the year you are establishing)

      • TC= must be blank to establish TC 013

      • Dup- Addr-Ind= use "N"

      • FS=(enter "1" filing status)

      • Remarks= To Establish Earlier Year

    2. Input TC 474 cy 08 and input SC "S96" for FCC or “S99” for SRFMI in positions 35, 36 and 37, using CC FRM49.

      Note:

      You must always enter a "S" preceding the Selection Codes.

    3. Refer to paragraph 5 below to see if a Compliance record needs to be established using CC TDIRQ.

    An account is not established (no record on CC IMFOLI),

    Note:

    Overlay CC ENMOD with CC ENREQ to establish the account, you must input TC 000 to establish the account first. For display of all required data needed on the specific lines, see IRM 2.4.9-10, IMF- Establish of an account on the Master File.

    1. Overlay CC ENMOD with CC ENREQ and input the following fields on CC INCHG.

      Note:

      In some instances, you may need to us CC ACTON to create a dummy ENMOD prior to using CC ENREQ.

      • Doc-CD=63

      • New- Name-CNTRL=(first 4 letters of the last name)

      • Primary- Name = (enter first and last name, use a bracket "]" in front of the last name.

      • Year-NM-Line=(the year you are establishing)

      • TC= must be 000 (triple zeros)

      • Dup- Addr-Ind= use "N"

      • FS=(enter "1" filing status)

      • Remarks= To Establish Name line

      For display of all required data needed on the specific lines, see IRM 2.4.9-10, IMF-Establish of an account on the Master File.

    2. Input TC 474 cy 08 and input SC "S96" for FCC or "S99" for SRFMI in positions 35, 36 and 37, using CC FRM49.

      Note:

      You must always enter a "S" preceding the Selection Codes.

    3. Refer to paragraph 5 below to see if a Compliance record needs to be established using CC TDIRQ.

    Note:

    The TC 474 will post in two weeks. The first RD notice (CP 59) will systemically generate a request for a tax return . The TC 474 "cycle (cy) 08" is used only as an indicator for TDI programmers' analysis. It is not used to post a delay code.

  5. CC TDIRQ is used to add TDI Compliance records to the Taxpayer Information File (TIF) for the purpose of generating delinquency notices and/or TDI's for an account.
    For IMF Entities Only: The command code may also be used to add TDI Compliance Data to accounts where there is no compliance data present.

    1. To check for Compliance record: input CC TDINQ. If TDINQ shows "blank" or "zero" on line 4, position 26 - 30, in the "TDI -X" field, or shows "no data" , then a Compliance record is required using CC TDIRQ, and continue in step "b" below.

    2. To build a Compliance record for Request Type C:
      - Input CC TDIRQ with a definer of "R" , inputting all required fields. See IRM 2.4.26-13, TDIRQ Input Format.
      - Input Request Type Code "C" on line 1, position 19.
      - Input Selection Code 96 (FCC) on line 9, position 30-31 . If working SRFMI cases Selection Code 99 is used.

    Note:

    In some cases where there is no account data present (IDRS record), you will use Request Type "S" instead of Request Type "C" , see IRM 2.4.26–14, TDIRQ Input Format, to build an entity module and a TDI Compliance record

    .

5.19.2.5  (02-15-2011)
Return Delinquency Research

  1. Research tools that will help you in resolving Return Delinquency (RD) responses include, but are not limited to the following:

    • Integrated Data Retrieval System (IDRS)/ Corporate Files On Line (CFOL) Command Codes (CC)

    • Automated Collection System (ACS)/ACSWeb

    • Account Management Services (AMS)

    • ADR (Address Research)

    • Document 6209

    • IRM 2.3.1 (Terminal Responses)

    • IRM 2.4 (Terminal Input)

    • Integrated Collection System (ICS)-Field Assistance (FA) only

    • Accurint Lexis/Nexus

    • RTR (Remittance Transaction Research)

  2. Research all cross reference accounts for possible case resolution using research tools, without taxpayer contact. This includes spouse’s SSN number, and Individual Master File (IMF)/Business Master File (BMF) cross reference when identified through research or taxpayer states sole proprietor or owns a business.

  3. For BMF RD research (if a taxpayer states no longer has employees or is out of business), research all cross reference Taxpayer Identification Number (TIN), including IMF cross-reference Social Security Number (SSN) to verify if taxpayer filed a Schedule C with no wages. In this instance the taxpayer is not liable for employment tax returns, and can be closed with the appropriate TC 59X.

  4. See IRM 5.19.2.6.8, Credit Balance Overview for procedural guidance on researching credit balance accounts. If a credit is identified as being mis-applied, take the necessary actions to move the credit to the correct module or entity.

  5. Electronic payments (EFTPS) can be researched and verified via IDRS command code EFTPS. Electronic payment information is retained and can be researched for the current year plus four previous years. Information on EFTPS, including how to enroll, can be found at www.eftps.gov or by calling EFTPS Customer Service at 1-800-555-4477. See IRM 2.3.70.2 for guidance on using the CC EFTPS to verify if payments were applied correctly.

  6. With the Transcript Delivery System (TDS) tool, you can use the system to send Wage and Income Information Documents to the taxpayer, in lieu of any procedures throughout this IRM that state to send IRPTR or SUPOL supplements with the appropriate IRS letter.

    Note:

    See IRM 21.2.3.4 for procedures on using the TDS for researching tax account and return information. TDS delivers tax account and return information to the user along with an appropriate cover letter (when applicable). The IRM has been updated to include procedures for IRS employees for using TDS.

5.19.2.6  (12-08-2009)
Return Delinquency Procedures

  1. This section provides guidance in resolving taxpayer inquiries and responses to accounts in the Return Delinquency (RD) Program.

5.19.2.6.1  (02-15-2011)
IMF and BMF Cases Referred

  1. Delinquency requests may be received from other areas within the Service on the following forms:

    • Form 4442 - Request for actions unable to be completed by originator.

    • Form 9948 - Referral/Routing to other areas within the Service.

    • Form 3499 - Referral/Routing to other areas within the Service

    • Form 3210 - Document transmittal to other areas within the Service.

    • Form 2209 - Request for Collection to secure a return when a return has previously posted and has been removed (e.g. Transaction Code (TC) 291, etc.).

      Note:

      We no longer accept the Form 2209 for account modules where returns have been removed and a TC 150 for zero remains. If you receive this form for this type of request, please return to sender with a statement explaining we no longer need these created.

  2. RD modules may be accelerated and/or delayed to Taxpayer Delinquency Investigation (TDI) Status and sent to Automated Collection System (ACS) or Compliance Territory Office, see IRM 5.19.2.6.1.2, Accelerate to Compliance Territory Office (Revenue Officer) or see IRM 5.19.2.6.1.1, Accelerate or Delay to TDI Status 03.

5.19.2.6.1.1  (02-15-2011)
Accelerate and/or Delay To TDI Status 03

  1. During normal processing, a RD module goes into Notice Status 02 when the first RD notice (CP 59/259) is issued. There are exceptions which will be discussed later.

  2. For Individual Master File (IMF) Non Primary Code (PC)-B modules, a final RD notice (CP 518) is issued 8 cycles later and 6 cycles after this notice (14 cycles after the first RD notice) the module goes to TDI Status 03.

    Note:

    Automated Substitute For Return (ASFR) selection codes (13, 14 and 17) receives a CP 59; six weeks later the module proceeds into TDI Status 03, then moves to ASFR inventory.

    Note:

    For UD mail received follow IRM 5.19.7.5, Undeliverable (UD) Mail, Bad Address and Address research (ADR) Processing.

  3. For BMF "Non PC-B" modules, a final RD (CP 518) is issued 10 cycles later. The module goes into TDI ST03 10 cycles after the issuance of the CP 518, a total of 20 cycles from the issuance of the first notice.

  4. You may accelerate and/or delay a Non PC-B RD module to TDI Status 03. Case goes to ACS or ASFR, by using command code (CC) ASGNI or CC ASGNB (see IRM 2.4.27) and inputting a delay Cnn (See examples in the following table).

    Note:

    A delay of 8 cycles "C08" is the longest delay allowed without leaving an IDRS control base open on the account for monitoring.

    If And Then
    The taxpayer responds to the final RD notice stating a return will be filed within eight weeks, The module will move to TDI Status 03 in two cycles Delay the change to TDI Status 03 by inputting a delay C08.
    The taxpayer responds to the first RD notice within two cycles stating a return will be filed within eight weeks. The module will move to TDI Status 03 in 12 cycles Accelerate to TDI Status 03 by inputting a delay C08.

  5. When working a RD response (correspondence or online) and you cannot resolve the RD module, the module may be accelerated to TDI Status 03 for further investigation.

    If And Then
    RD module is in Notice Status 02,   Follow procedures in the taxpayer liable section for IMF IRM 5.19.2.6.4.5, IMF Determining Liability or Business Master File (BMF) IRM 5.19.2.6.5.4, BMF Determining Liability.
    RD module is satisfied (Status 06 closed with a TC 59X) and the taxpayer has another module in ACS, The taxpayer indicates they are liable (i.e. promise to file) or research (i.e. IRPTR, SUPOL) indicates the taxpayer is liable,

    • Using CC ASGNI or CC ASGNB (see IRM 2.4.27) assign the account to 0110 (ACS)

    • Input a TC 592 to reverse the previous TC 59X, using FRM49.

    There is no indication from the taxpayer they are liable or research (i.e. IRPTR, SUPOL) shows the taxpayer is not liable, Destroy the notice.
    RD module is satisfied (Status 06 closed with a TC 59X) and the taxpayer is not in ACS. NOTE: These cases should only be assigned to ACS if you have information indicating the RD was closed in error with any satisfying TC 59X (excluding current Combat Zone, 598 closing code (cc) 70). The taxpayer indicates or research (i.e. IRPTR, SUPOL) shows the taxpayer is liable,

    • IMF only: The module must be on TDINQ. If not, you must establish it by using TDIRQ.

    • Input a TC 592 to reverse the previous TC 59X, using FRM49.
    There is no indication from the taxpayer they are liable or research (i.e. IRPTR, SUPOL) shows the taxpayer is not liable, Destroy the notice and take no action on the account.

5.19.2.6.1.2  (02-15-2011)
Accelerate to Compliance Territory Office (Revenue Officer)

  1. In certain situations when all attempts to resolve the RD module have failed, or the taxpayer has requested a face to face meeting, you should refer the taxpayer to contact their nearest field assistance office. Provide the taxpayer with the address of the nearest walk-in office and proceed to accelerate the module to TDI Status 03.

  2. You may accelerate certain RD modules to TDI Status 03 and bypass ACS to assign the case directly to the Compliance Territory Office (Revenue Officer) by using CC ASGNI or CC ASGNB, see IRM 2.4.27 for inputting a delay C00.

  3. If the taxpayer requests face to face meeting at their place of business or residence, or they can't get to a field assistance office, or has lost records due to circumstances beyond their control (fire, flood, seizure, etc.) and we can't re-construct their records, suggest the taxpayer estimate expenses. If they cannot estimate expenses, then refer case to a Compliance Territory Office. Send a 86C letter or other appropriate transfer letter to the taxpayer, following the procedures stated below:

    If And Then
    RD module is in Notice Status 02 or TDI Status 03, You have supporting documentation,

    1. Using CC ASGNI or CC ASGNB. See IRM 2.4.27 .

    2. Assign the account to 6466 for assignment to Territory Office (indicating supporting documentation).

    3. For Notice Status 02 only, input a delay C01 to accelerate to TDI Status 03.

    4. Route the case to the appropriate territory office (Revenue Officer)
    RD module is in Notice Status 02 or TDI Status 03, You do not have supporting documentation,

    1. Using CC ASGNI or CC ASGNB. See IRM 2.4.27.

    2. Assign the account to 6401.

    3. For Notice Status 02 only, input a delay C01 to accelerate to TDI Status 03.

    4. Destroy the notice.
    RD module is a satisfied (Status 06 closed with a TC 59X) and the taxpayer has another module in Compliance Territory Office (Revenue Officer) status, You have supporting documentation,

    1. Using CC ASGNI or CC ASGNB (see IRM 2.4.27) assign the account to 6466.

    2. Input a TC 592 to reverse the previous TC 59X, using FRM49

    3. Route the case to the appropriate territory office (Revenue Officer).
    RD module is a satisfied (Status 06 closed with a TC 59X) and the taxpayer has another module in Compliance Territory Office (Revenue Officer) status, You do not have supporting documentation,

    1. Using CC ASGNI or CC ASGNB (see IRM 2.4.27) assign the account to 6401.

    2. Input a TC 592 to reverse the previous TC 59X, using FRM49.

    3. Destroy the notice.
    RD module is a satisfied (Status 06 closed with a TC 59X) and there are no other modules assigned to the Compliance Territory Office (Revenue Officer), You have supporting documentation,

    1. IMF Only: The module must be on TDINQ. If not, you must establish the entity using CC TDIRQ.

    2. Using CC ASGNI or CC ASGNB, see IRM 2.4.27 - assign the account to 6466.

    3. Input a TC 592 to reverse the previous TC 59X, using FRM49.

  4. (Revenue Officer) Field Assistance (FA) Only - FA employees working collection cases through ICS will create delinquent return(s) modules on Integrated Collection System (ICS) for inventory case processing and will use the appropriate letters available through ICS.

5.19.2.6.2  (12-08-2009)
IRS Employee (Selection Code 02) Return Delinquency Program

  1. Return delinquencies for IRS employees are identified by Selection Code (SC) 02.

    Note:

    Prior to TY 2004 Selection Code 92 was also used for the IRS Employee RD Program. Follow all procedures in this section for working these cases.

  2. Refer Selection Code 02 case(s) to the designated Compliance Services Collection Operations (CSCO) employee, usually a team leader or senior (could possibly be a co-workers case which is why it can't be worked by a Tax Examiner).

  3. Selection Code "02" RD first Master file notice (CP 59/759) "Request for Your Tax Return" are usually issued by the second cycle (week) of the IMF first notice issuances for each tax year. The CP 59/759 will be printed and mailed at the two Correspondence Production Services (CPS) sites- Austin and Fresno. An IRS Employee List will show the IRS employee that will be receiving the CP 59/759 notice. The IRS Employee List will be provided by Headquarters (HQ) via secure E-mail to each appropriate campus to the designated CSCO employee.

  4. IRS employees receive only one RD Notice (CP 59/759). Five cycles later, a TDI issues unless the tax examiner delays or accelerates the issuance or the case has been closed. Selection Code 02 TDI's bypass ACS.

  5. The IRS/NTEU MOU (Memorandum of Understanding) is to be followed.

    • restrict access to SC 02 cases to only employees required to work the case.

    • IRS employees are to receive fair and consistent treatment.

5.19.2.6.2.1  (12-08-2009)
IRS Employee Return Delinquency List Processing

  1. The IRS employee RD list will be forwarded by secure E-mail to the designated CSCO employee at the two IMF TDI consolidated campuses (Austin and Fresno) one cycle before the first cycle of the IMF CP 59/759 issuance. The listing is E-mailed twice a year, normally in November and the following February. Use this list to annotate items in paragraph 2 below.

  2. When the list is received determine if the taxpayer is on the list in error:

    • Is the individual an IRS employee.

    • Does the income for the delinquent tax year include IRS income.

    • Check for obvious incorrect name control.

    • Determine if the prior year case has information that can be used to close this year.

    • Research IDRS for a cross-reference TIN. If joint return is filed, input appropriate transaction codes. Compare and verify the amount and source of income versus filing requirements, and close as Not Liable if the income is below filing requirements (i.e. use TC 590 cc 76).

    • Prepare a case history sheet for each IRS employee case still open to be used for monthly case monitoring. The history sheet must be documented each month of all account actions (i.e., date of CP 59 sent, Revenue Officer (RO) assignment, return filed or not, and any other pertinent information). Maintain list and history sheets in a locked file cabinet, see IRM 5.19.2.6.2.5, IRS Employee File.

5.19.2.6.2.2  (02-15-2011)
Selection Code 02 Responses

  1. The purpose of this section is to provide general guidance for working Selection Code 02 responses. These responses are worked as any other return delinquency responses in IRM 5.19.2.6.4, IMF Return Delinquency Responses and Inquiries, with the following exceptions:

    • Cannot be closed as Little or No Tax Due.

    • The tax module is systemically blocked from closure under the provisions of Policy Statement P-5-133.

      Follow the guidelines below on working responses:

      If And Then
      Response is insufficient, Necessary to contact employee or obtain other information through research,

      1. Conduct additional research to try and obtain the information. If no information available or not sufficient.

      2. Contact employee by telephone number (if applicable) or send letter 2269C to obtain necessary information.

      3. Set up 45-–day suspense file.

      4. Input a delay "C08" using CC ASGNI or CC ASGNB, see IRM 2.4.27.

      Notice TIN incorrect,  

      1. Advise employee by telephone or correspondence to contact personnel office.

      2. Input TC 041 using CC ENREQ to correct TIN.
      Response meets see IRM 5.19.2.6.4.1, IMF Special Handling. Account is in Notice Status 02,

      1. Do NOT assign to TIGTA or Examination, case will be systemically assigned to the Area ICS/Entity Quality Analyst (IQA) via ICS.

      2. Monitor for TDI assignment.

      3. Prepare Form 3210 and transfer the case (Case History Sheet, correspondence, any supporting documents) to the assigned Area Office. Put all information in a Confidential Information envelope labeling it "IRS Employee RD Case" and then place inside a mailer envelope.

      4. Retain a copy of the case in the IRS Employee File and associate the acknowledged copy of Form 3210 when it is received.
      Account is in TDI Status 03.

      1. Prepare Form 3210 and transfer the case (Case History Sheet, correspondence, any supporting documents) to the assigned Area Office. Put all information in a Confidential Information envelope labeling it "IRS Employee RD Case" and then place inside a mailer envelope.

      2. Retain a copy of the case in the IRS Employee File and associate the acknowledged copy of Form 3210 when it is received.

  2. When receiving Undeliverable (UD) notices for Select Code 02 cases:

    • If there is a United States Postal Service (USPS) yellow label with a forwarding address and verification shows the same taxpayer, follow procedures in paragraph 3 below.

    • If the Undeliverable notice has no USPS yellow label or the yellow label is not the same taxpayer, see IRM 5.19.7.5.1, Undelivered (UD) Mail Procedures.

      Note:

      If case is in TDI Status 03 and is assigned to an area office, contact area office first before address change input or continue the address research (ADR) process.

  3. If the UD mail shows an updated address on a yellow USPS label:

    • Input address change on IDRS.

    • Send a 2269C letter and select the appropriate paragraphs from the IRP information by checking CC SUPOL or IRPTR.

    • Annotate AMS comments and the case history sheet of the address change and date the letter was sent.

  4. If a delinquent return is secured, see IRM 5.19.2.6.4.5.12, IMF Response with Original Return. Annotate the following on the employees case history sheet:

    • Date the return was secured.

    • Amount of tax, penalty and interest due.

    • Amount paid and date paid.

    • Amount of refund due.

    • Employee deceased, when applicable.

  5. File closed notice responses and any related documents in the IRS employee file.

  6. Once a month, using IRS employee list and case history Sheet, research each TIN for each case still open and annotate any subsequent activity. If there is any change from the previous research, attach an appropriate IDRS print of changes (i.e. ENMOD for Entity, TXMOD for account changes).

5.19.2.6.2.3  (12-08-2009)
Selection Code 02 TDI Issuances

  1. When a case is in TDI Status 03 and currently assigned to the area office, associate any related documents and prepare Form 3210 to transfer the case (Case History Sheet, correspondence, any supporting documents) to the assigned Area Office. Place all pertinent information in a Confidential Information envelope labeling it "IRS Employee RD Case" and then place this inside a mailer envelope.

  2. If the module is in TDI Status 03, currently assigned to the area office and you receive related or pertinent information that needs to be referred, contact the ICS/Quality Analyst (IQA) as they are responsible for receipt, control and assignment of the IRS Employment cases. Refer to IRM 5.1.11.4.7, IRS Employee Return Delinquency, for additional guidance. To locate the IQA assigned, refer to SERP-Who/Where from SERP homepage: http://serp.enterprise.irs.gov/databases/who-where.dr/iqa.dr/iqa_contact_noncff.htm , click on ICS/Entity Quality Analysts tab.

5.19.2.6.2.4  (12-08-2009)
Selection Code 02 – Area Office Closures

  1. Record the disposition of each case on the list. Retain a copy of the closed TDI in the employee file.

  2. If it is identified that a case was closed in error, or not appropriate (i.e. closed other than "below FR" or reassigned to 7000 or 8000) contact the appropriate IQA to have the case assigned back to the RO, and to secure a return. See IRM 5.19.2.6.2.3 , Selection 02 TDI Issuances, to locate the appropriate IQA.

5.19.2.6.2.5  (12-08-2009)
IRS Employee File

  1. All documents must be locked in a secured file cabinet.

  2. Maintain the file by tax year. Divide yearly files into sub files:

    • Sort open cases in Taxpayer Identification Number (TIN) order by copy of notice list, and employee case files.

    • Sort closed cases in TIN order by copy of notice list, and employee case files.

    • TC 594/599 source documents.

    • Closed TC 594/599 transcripts.

    Note:

    Keep one year in active status and the prior year as inactive. Retain inactive files for one year, then destroy the oldest year when the next year is received. Dispose of prior year files in accordance with established procedures for "secure shredding " .

5.19.2.6.3  (02-15-2011)
Taxpayer Advocate Service Referrals

  1. This section provides procedures and guidance for working referrals to Tax Payer Advocate Service (TAS). Our goal is to address and resolve taxpayers issue on initial contact whenever possible and avoid unnecessary referrals to TAS. Make every attempt to assist the taxpayer prior to referring to TAS.

    Note:

    As part of the Identity (ID) Theft Program, the Accounts Management (AM) Identity Protection Specialized Units (IPSU) Team will begin assisting taxpayers whose situations meet TAS criteria 5 -7 AND involve identity theft. Applicable cases will now be considered IPSU criteria. If a case meets IPSU criteria, refer the case to AM IPSU using Form 4442, Referral. The referral can be sent via secure e-mail to *W&I when available, or by fax to the ID Theft fax line (978)247-9965 by COB the day the criteria was identified. The referral MUST contain all taxpayer’s correspondence with any attachments/documentation received with the case. An 86C letter or other applicable letter to the taxpayer is required. If you receive taxpayer contact either by phone or correspondence, and research indicates taxpayer has self identified as Identity Theft refer to IRM 5.19.1.2.1(9)(g), For All Employees, for additional information.

  2. Refer taxpayers to the Taxpayer Advocate Service (TAS) (see IRM 13.1.7, TAS Case Criteria) and you can’t resolve the taxpayer’s issue the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer’s issue. Do not refer "same day" cases to TAS unless the taxpayer asks to be transferred to TAS and the case meets TAS criteria. Refer to IRM 13.1.7.4, Same-Day Resolution by Operations. When you refer cases to TAS, use Form 911, Request for Taxpayer Advocate Services Assistance (and Application for Taxpayer Assistance order), and forward to TAS.

  3. Follow the table below if referring the account to Taxpayer Advocate area:

    If Then
    Case is in Notice Status 02,

    • Input a delay C08 using CC ASGNI or CC ASGNB.

    • Update Account Management Services (AMS) of actions taken including case referral to TAS.
    Case is in TDI Status 03.

    • Update AMS of actions taken including case referral to TAS.

    • If the account is on ACS input history item as follows:
      For ACS Support employees: TOS7,25,TAS
      For ACS Call Sites employees: TOR2,25,TAS

  4. Use Form 911, Request for Taxpayer Advocate Service Assistance, and forward to the Taxpayer Advocate Office in accordance with your local procedures.

5.19.2.6.4  (12-08-2009)
IMF Return Delinquency Responses and Inquiries

  1. This subsection provides procedures for processing IMF Return Delinquency (RD) Notice responses and inquiries.

  2. See Document 6209 Section 11, for IRP Selection Code Criteria Codes to determine the taxpayer's income and requirement to file.

  3. When responding to a taxpayer inquiry and there is a discrepancy requiring disclosure, see IRM 11.3.2 for Disclosure guidance.

5.19.2.6.4.1  (02-15-2011)
IMF Special Handling

  1. Review for the following conditions and take the required actions:

    If And Then
    Taxpayer response is threatening or indicates a potentially dangerous situation (online or in correspondence), Account is in Notice Status 02 or Taxpayer Delinquency Investigation (TDI) Status 03,

    1. Assign to 8150 using command code (CC) ASGNI, see IRM 2.4.27-5 .

    2. Refer to IRM 5.1.3, Safety, Security and Control, (i.e. "Potentially Dangerous Taxpayer (PDT)" .

    3. Report all incidents to Treasury Inspector General for Tax Administration (TIGTA), by telephone.TIGTA can be reached at 1-800-366-4484. TIGTA will inform you of where to send the case.

      Note:

      Form 4652 "Assault, Threat of Assault, or Harassment Report" is now obsolete.

    4. For cases in Notice Status 02, input delay C08 using CC ASGNI, see IRM 2.4.27-5. To accelerate to Automated Collection System (ACS), see IRM 5.19.2.6.1.2, Accelerate to Compliance Territory Office (Revenue Officer).

    5. For cases in TDI Status 03, enter a history item on Integrated Data Retrieval System (IDRS) or Account Management Services (AMS) indicating the case was sent to TIGTA.

    6. If the account is on ACS, input history code, TOR1,60,TIGTA.

    7. Once TIGTA's investigation is completed a determination will be made, and the employee through their Director will be informed of the disposition of the case in a memo.

    8. If TIGTA states this isn't a threat, then continue working the case appropriately.

    If the taxpayer indicates in correspondence they refuse to file a return or provides information based on claims of a frivolous return,

    Note:

    Refer to IRM 4.10.12.1.1 for definitions of frivolous arguments.

    		 Account is in Notice Status 02 or TDI Status 03,

    1. Input Transaction Code (TC) 595 cc 82 for Compliance Services Collection Operation (CSCO) and Accounts management (AM) or
      TC 595 cc 32 for ACS/ACSS and,
      refer to:
      Ogden Compliance Services
      ATTN: FRP, m/s 4450
      1973 N. Rulon White Blvd.
      Ogden, UT 84404

    2. Update AMS of all pertinent information.

    3. If account is on ACS, enter history code "TOR1,25,CMNTS " .

    4. Notate on correspondence "Previously seen by Collections (CSCO or ACSS)" before routing.

     
    Taxpayer is on the telephone and refuses to file a return or gives information based on frivolous claims, Account is in Notice Status 02 or TDI Status 03,

    1. Inform the taxpayer they need to file a return or provide the information in writing.

    2. For cases in Notice Status 02, input delay C08 using CC ASGNI see IRM 2.4.27-5 To accelerate to ACS, see IRM 5.19.2.6.1.2.

    3. Update AMS with all pertinent information.

    4. If the account is on ACS, enter history code "TOI7,XX,CMNTS" .

    		 
    Selection Code (SC) 02 or 92,   See IRM 5.19.2.6.2.2, Selection Code 02 Responses.  
    Open CI control or TC 914. Account is in Notice Status 02,

    1. Input delay "C03" (three week) using CC ASGNI see IRM 2.4.27-5.

    2. Route notice to Criminal Investigation (CI) Branch.

    3. Update AMS indicating the case was sent to CI.

    4. If CI returns the case, resolve through correspondence.

      Note:

      DO NOT call the taxpayer.

    		  
    Account is in TDI Status 03.

    1. Update AMS indicating the case was sent to CI.

    2. If the account is on ACS, enter history code "TOR3,25,CI or TC 914" .

    3. Route to CI Branch.

    4. If CI returns the case, resolve through correspondence.

      Note:

      DO NOT telephone the taxpayer.

    		 

  2. For potential fraud cases, CI uses the following guidelines. These indicators are not all inclusive and any single indicator alone may not constitute sufficient reason to warrant referral of a case to CI. Review cases for the following indicators:

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Refer to IRM 25.1.3, Criminal Referrals, for guidance on CI criteria for identifying potential fraud cases.

    • See IRM 25.1 for referral procedures.

    • When the case is returned from CI, process per CI instructions.

  3. If the taxpayer is liable and there is an indication of fraud, determine the extent of the delinquency (periods and amounts). Refer the case to CI, See IRM 25.1.3.2, Preparation of Form 2797.

    Caution:

    Do NOT give advice about what to do, and do NOT solicit the return. If on the telephone, terminate the conversation. Enter into comments all information pertinent to the processing of the case.

  4. When taxpayer sends a Balance Due (BD) Notice as proof a return has been filed, see IRM 5.19.2.6.4.5.10, IMF Response Taxpayer Previously Filed Return or see IRM 5.19.2.6.5.4.8, BMF Response Taxpayer Previously Filed Return(s).

  5. Route Power of Attorney (POA) Forms 2848 or other tax authorization to the Centralized Authorization File (CAF) Team. See IRM 21.3.7.1.6, CAF Processing Sites (CAF Function).

  6. When the taxpayer requests a visit from an IRS representative, attempt to resolve the case. If you are unable to resolve the case, see IRM 5.19.2.6.1.2, "Accelerate to Compliance Territory Office" .

  7. A bankruptcy stay does not prohibit securing information from the taxpayer or sending the taxpayer information for the sole purpose of securing a return. If a return is secured, send a photocopy to the appropriate Insolvency/Bankruptcy area.http://serp.enterprise.irs.gov/databases/who-where.dr/inslvncy-bnkrptcy/national_insolvency_field.htm, input and edit return with a TC 599 closing code (cc) 92/42 and continue with processing per IRM 5.19.2.6.4.5.12, IMF Response with Original Return.

    Note:

    If other pertinent information is received without a return, send it to the appropriate Insolvency/Bankruptcy area.

5.19.2.6.4.1.1  (02-15-2011)
Combat Zone IMF Procedures

  1. This section provides procedures and guidance for working combat zone accounts. Section 7508 Postpones the time for performing time-sensitive acts, such as filing tax returns or paying tax for the period of time that Section 7508 applies, plus 180 days. The IRS generally will not assess income tax or charge any penalty/interest during the postponement period. The IRS generally will cease all enforcement activities during the postponement period. Section 7508 applies to individuals in the following circumstances:

    • Individuals serving in the Armed Forces in an area designated by the President of the United States as a combat zone for purposes of Section 112, or serving in support of such forces.

    • Individuals serving in support of the Armed Forces in an area designated by the Secretary of Defense as a contingency operation.

    • Individuals serving in the Armed Forces in a qualified hazardous duty area.

      Note:

      See IRM 5.19.1.4.10and Publication 3, for procedural guidance. Also, refer to IRS.gov for additional information regarding Combat Zone issues (search item: Combat Zone).

  2. Transmission of combat zone data from the Department of Defense is posted to the taxpayer's account(s). These transactions will have a unique DLN of "28277-999-99999-3" and are shown on CC IMFOLE. Combat Zone accounts are also identified during processing of a tax return where the taxpayer has identified by documenting with: Serving Desert Storm/Shield, Bosnia, former Yugoslavia, Allied Force, Afghanistan, or Enduring Freedom. On these self-identified cases, a TC 500 will post to CC IMFOLE and not on a tax module. There will be a computer Condition Code "K" or "Z" .

    Note:

    See IRM 3.12.3–4 for additional guidance regarding the Condition Codes and processing.

  3. The account modules will have a -C freeze showing and will have the following transaction and closing codes on the module that provide the entry and exit dates within the combat zone:

    • TC 500 with closing code 52 (entry date) or closing code 53 (exit date) = Desert Storm

    • TC 500 with closing code 54 (entry date) or closing code 55 (exit date) = Bosnia

    • TC 500 with closing code 56 (entry date) or closing code 57 (exit date) = Enduring Iraqi Freedom

      Note:

      No Contact by phone, notice or correspondence can be initiated unless the account reflects an exit date (closing codes 53, 55, 57) and no other subsequent entry date. If the taxpayer contacts us, assist them with their issues. Inform them with an appropriate letter they are not required to file a return while in the combat zone and will be given at least an additional 180 days after they exit the combat zone to file their current year and any delinquent returns.

  4. As of January 2008, TC 598 cc 70 will systemically be input on the module upon the input of TC 500 with the above closing codes. The TC 598 cc 70 closes the account during the administrative relief period. The module will be identified on IDRS with a -C freeze code, and will not be indicated on Integrated Collection System (ICS), ACS, Automated Substitute for Return (ASFR) systems or inventory.

    Note:

    If a -C freeze is present on the account, no "new" RD notices will generate, so the input of a delay is not required.

  5. If an account is self-identified by taxpayer through phone contact or correspondence, enter the TC 500 with the appropriate closing and entry date. If the entry date is not available or unknown, use the date of the phone call or correspondence. Do not input TC 598 cc 70 on the module as a systemic TC 598 cc 70 will post to master file after the TC 500 posts. Once the TC 598 cc 70 posts, it will remove the account from system or inventory.

    Note:

    Use REQ 77 on CC TXMOD to input.

  6. When a taxpayer is no longer in the combat zone or -C freeze was set in error, the freeze can be resolved using procedures per IRM 5.19.1.4.10.5, Combat Zone IMF Procedures.

5.19.2.6.4.1.2  (12-08-2009)
IMF Procedures for Field Assistance Employees

  1. For all Field Assistance (FA) employees working Return Delinquency IMF cases with a taxpayer in a field assistance office, you will follow the procedures below:

    Note:

    As of September 2007, FA employees ceased working Collection Inventory.

    • If you are a Individual Tax Advisory (ITAS) with an 809 book assigned to you, and any criteria throughout the IRM for 5.19.2 is met to enter any transaction codes and history items, you will prepare a Form 4442 with the required information for all modules in Notice Status 02 or TDI Status 03. You must secure managerial approval and send the Form 4442 to the appropriate employee within your site for the actual inputs.

    • If you are an ITAS that is not assigned an 809 book, and criteria throughout this IRM is met, enter transaction codes and history items when applicable.

    • All ITAS employees will not issue any of the RD letters required throughout the IRM for all modules in Notice Status 02 or TDI Status 03.

    • For all modules in Notice Status 02, if you are assigned an 809 book, you would include this information on the Form 4442 you have prepared.

    • For all modules in TDI Status 03, all ITAS employees will update any required comments or history codes on ACS, AMS or ICS, as appropriate. If you are assigned an 809 book, you would include this information on the Form 4442 you have prepared.

    • ITAS employees will update Levy Sources on IDRS per stated in IRM, as appropriate. If you are assigned an 809 book, you would include this information on the Form 4442 you have prepared.

    • If you are answering the taxpayer with a written or telephone response – Field Assistance employees working collection cases in Notice Status 02 or TDI Status 03 will set deadlines that are reasonable and appropriate for filing returns.

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

5.19.2.6.4.2  (02-15-2011)
IMF Examination Referrals

  1. Use this section to determine how to resolve taxpayer responses when the account has indications of Exam activity.

  2. Research Audit Information Management System (AIMS) using CC AMDIS.

    • If no data is available, see IRM 5.19.2.6.4.5.11, IMF Response Insufficient.

    • If IDRS indicates an open examination case (TC 420 on notice or related module, -L freeze, or AIMS shows an open case) and AIMS status is 09 or more, route case to Examination, Classification Section. If sending a tax return, use overnight express to send to the appropriate Exam office, see note below. Input TC 595 cc 32/82 using CC FRM49 and input AMS comments as appropriate.

      Note:

      To find the correct Examination office, check AIMS for the 3-digit Primary Business Code (PBC), then check SERP under Who/Where, click on "Exam Employee Group Code (EGC) Contacts" and find the appropriate PBC office and address of that office http://wsep.ds.irsnet.gov/sites/co/dcse/sbse/exam/webdocuments/Document%20Library/1/AIMS/Employee%20Group%20Code%20Listing.xls.

    • If open TC 420 and AIMS status is 08 or less, work the response or return as appropriate per procedures throughout the IRM.

    • If AMDISA indicates a Status 90, which means the case is closed, do not send to Exam even if a -minus L freeze or open TC 420 exists. Work the response or return as appropriate per procedures throughout the IRM.

  3. If the case is returned by Exam with the TC 420 reversed with a TC 421, see IRM 5.19.2.6.4.5, IMF - Determining Liability.

    Note:

    For Notice Status 02 cases that are not closed as taxpayer not liable, accelerate to TDI Status 03 by inputting a delay "C01" .

  4. When working a transcript created by a TC 595 without a posted return, and the TC 595 was input in error, continue processing in IRM 5.19.2.6.9.3, Resolving TDI Research (TC 594/599) Transcripts.

5.19.2.6.4.3  (02-15-2011)
IMF Automated Substitute for Return Program (ASFR) Referrals

  1. The ASFR program was developed to systemically promote compliance with taxpayers who have not filed tax returns voluntarily and for whom income information is available to substantiate a significant income tax liability without costly field investigation. The purpose of this program is to assess the tax liability and promote compliance by either:

    • Securing a valid voluntary income tax return from the taxpayer.

    • Computing tax, interest and penalties based upon Information Return Program (IRP) documents submitted by payers, or other internally available information.

  2. The RD notices (CP 59/516/518) inform the taxpayer the IRS can prepare a substitute return, if a return is not filed. Cases selected with ASFR selection codes (13, 14 and 17) only receive a CP 59/759 notice and then are automatically assigned to ASFR.

    Note:

    See Exhibit 5.19.2-4 Selection Codes. Prior year Selection codes are also available in Exhibit section.

    Note:

    For account modules in Notice Status 02 or TDI Status 03 (Combo cases), if correspondence from the taxpayer states to go ahead and prepare their return per the substitute for return warning in an IRS notice, when answering the taxpayer with written correspondence advise as follows. This program uses the highest tax rates with no deductions allowed. Interest and penalties accrue from the original due date of the return until the substitute for return is processed and the account is paid in full. So it is in the taxpayers best interest to prepare and file a return on their own, and pay any balance due as soon as possible. For elderly taxpayers who need help in preparing a return, recommend they contact their local IRS field assistance office, AARP or TCE (Tax Counseling for the Elderly).

  3. Return delinquency modules that do not meet ASFR criteria include accounts listed below:

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

    • No SUPOL data is present, see IRM 2.3.58, Command Code SUPOL, for additional information on SUPOL.

    • Any module has a freeze code of -Z, -V, -W, -L and Z-.

    • The selection code is CI (01) or IRS Employee (02).

    • Any combo case with a balance due module regardless of status, including Status 53 and Status 60.

    • The only tax year is older than six years from the current calendar year .

      Example:

      The period for calculating starts with the due date of the most recent tax return due and the previous five years. As of April 15, 2010, which is the due date for the 2009 return and the prior five years will be TY - 2008, 2007, 2006, 2005 and 2004.

    • Cases with 60 or more documents, assign the case to the Queue.

      Note:

      If one module has 61 or more documents and another module is below 61 documents, still assign to the account to the Queue.

  4. Once I2 research has been completed, for stand alone Status 03 TDI(s) with SUPOL and IRPTR data available and there are less than 60 documents, use CC ASGNI 8000 to assign to ASFR.
    If the account is on ACS, enter history code "TFRO,,AOTO8000" .

    Note:

    Area assignment (AOTO) can be located on ACSWeb.

  5. Field Assistance employees working Collection Inventory cases will use the above criteria for identifying cases that meet ASFR criteria. The cases will be transferred to ASFR through the ICS system using case summary screen, delinquent return module, and selecting F6, close delinquent return selection (k) - transfer to ASFR. The case file should be documented with action taken to resolve the case and the closed case sent to case processing.

    Note:

    Manager approval is no longer needed.

  6. If working a return delinquency response and research indicates ASFR criteria as stated below refer to the nearest ASFR location in your BOD unless otherwise noted below. To find the ASFR site, see IRM 5.18.1.10.2.1.5, ASFR Transshipment Procedures. ASFR criteria is as follows:

    • TC150 for .00 with literal SFR next to it (initial return assessment), with tax-class 2 and Doc Code 10 in the DLN (Refer to Doc 6209).

    • Blocking series 000-299. (Refer to Doc 6209.)

    • No AGI listed.

    • TC 599 with cc 88, indicates no response to the previous ASFR notifications.

      Note:

      Send the case to your Consolidated ASFR Recon Site if all the following transaction codes (TC 150 for .00, TC 494, TC 495, TC 290 with a blocking series of 640-649 and TC 599 cc 88 are present. Refer to IRM 5.18.1.10.2.1.6, ASFR Reconsideration Transshipment Procedures.

      .

    • TC 599 with cc 89 indicates taxpayer agreed to the assessment.

      Note:

      If the response is a return or amended return and the module was closed with a TC 29X and/or TC 599 with a cc 89, and the tax on the return does not match the tax posted to IDRS, route the return to the local AM only if the Assessment Statute Expiration Date (ASED) is not expired. If ASED is expired, send a disallowance letter 916C, Claim Incomplete for Processing; No Consideration, and update AMS comments appropriately.

5.19.2.6.4.4  (02-15-2011)
Backup Withholding - C (BWH-C) Inquiries

  1. Use this section to resolve BWH-C inquiries only. Refer to other IRM sections to resolve all other issues prior to referral.

  2. If the Backup Withholding Indicator (BWI) is on the module (TXMOD), refer to IRM 5.19.3.4.2.11, "C" BWH Procedures. If the BWI is shown as "2" and any of the following conditions exist, forward the information via a Form 4442 to the appropriate BWH unit for your BOD per the information in paragraphs #2 & #3 below:

    • Taxpayer is deceased.

    • Account is closed "Not Liable" , "Refund Due" , or "Little or No Tax Due" .

    • The return has been previously filed, but posted to another module (e.g. filed joint with spouse, filed on an incorrect TIN, filed with an incorrect name [entity problem]).

    Note:

    Only send the information to the BWH unit to make a determination to close BWH-C or not. You must work all the RD issues.

  3. For W&I campuses send the Form 4442 or Correspondence to:
    Internal Revenue Service
    Stop 5000 P-4
    333 W. Pershing Road
    Kansas City, MO 64108-4302

  4. For SB/SE campuses send the Form 4442 or Correspondence to:
    Internal Revenue Service
    Mail Stop 4-N-31.142
    2970 Market St.
    Philadelphia, PA 19104

  5. For International SBSE Backup Withholding issues, send the Form 4442 or Correspondence to :
    Internal Revenue Service
    Mail Stop 4-N-31.143
    2970 Market St.
    Philadelphia, PA 19104

5.19.2.6.4.5  (02-15-2011)
IMF - Determining Liability

  1. This section will provide directive guidance on determining if the taxpayer is liable to file a delinquent return, with the goal to resolve contact issues (correspondence or phone calls) timely and accurately to prevent subsequent notices and/or TDI issuances. If necessary, refer them to their local office for assistance. (e.g. Taxpayer Assistance Centers [TACTS], Volunteer Income Tax Assistance [VITA], Tax Counseling for the Elderly [TCE], American Association of Retired Person's [AARP]). See IRM 21.3.4.2, Standard Services and Taxpayer Assistance, for guidance. If necessary, send blank forms to the taxpayer to file the delinquent return(s), or refer the taxpayer to the IRS web-site, http://www.irs.gov. When responding to taxpayer via correspondence, refer to IRM 21.3.3.1.1, Policy Statement P-6-12, for guidance.

  2. Do not address a delinquent module(s) if research indicates the module was previously addressed within the last 10 weeks. (for example IDRS/AMS indicates a response from a call or CP 59/CP 516/CP 518, 2269C, LT26 was issued within the last 10 weeks).

  3. To research RD filing requirements by specific Selection code see Exhibit 5.19.2-4 through Exhibit 5.19.2-9, IMF Selection Codes for TY 2009-2003.

  4. To identify modules meeting High Income Non Filers criteria see IRM 5.19.2.8, High Income Non Filers (HINF) for additional guidance.

    Note:

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

  5. Conduct complete research to resolve all RD issues on contact, including research of all cross reference TIN’s (IMF & BMF), if applicable. In addition, all IRS employees should address under-withholding as part of the full compliance check and consider referring taxpayers to the Withholding Compliance (WHC) unit, when appropriate. The goal of the Withholding Compliance program is to ensure that taxpayers who have serious under-withholding problems are brought into compliance with federal income tax withholding requirements. See IRM 5.19.11.1, Withholding Compliance Program, for additional information. Refer to IRM 5.19.11.6.1, Referral Criteria if there is an indication of a WHC issue.

    Note:

    When corresponding with the taxpayer, send one letter to address multiple years, if applicable.

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    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡


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  7. When working a module in Status 06 (closed with a TC 593, 597 or 598) follow the procedures throughout this IRM for the status the module was in previously (Notice-02 or TDI-03) when the TC 593, 597 or 598 code was entered. Input a TC 592 to reverse the TC 593, 597 or 598 to place the module back in Notice SC 02 or TDI Status 03 if it is determined the taxpayer is liable to file for FCC.

    Note:

    A TC 592 is not needed to reverse a prior TC 593, TC 597 or TC 598 when inputting a new TC 590, 591, 594, 595, 596 or 599.

  8. If the taxpayer has an open Refund Hold module (i.e. TC 570, 999 in the Julian Date field in the document locator number digits 6, 7 and 8 and an RF reason code) and a Refund hold notice CP 63 (CSCO) or CP 88 (Exam) or correspondence letter 2825C has been issued, then you must address and resolve all un-filed return modules, regardless if they are open or not RD modules on IDRS.

    Note:

    The 2825C letter is only used to reissue for undeliverable CP notices.

  9. If the taxpayer provides a telephone number on a response to a CP 59/CP 516/CP 518 notice, tax return, or RD correspondence, update the entity(s) with the new telephone number. If the area code is not available research for area code on SERP under the Who/Where tab, click on Time Zone & Area Code by Zip, State or City http://basfr.web.irs.gov/zip/zipsearch.asp.

  10. If necessary send IRPTRW transcripts (via IDRS or TDS) of taxpayer's income data to the taxpayer to file the delinquent return. Taxpayer authentication must be verified prior to sending any taxpayer information.

    Note:

    Do not edit taxpayer information per Delegation Order 11-2.

  11. Use IDRS Command Codes IRPTR or SUPOL to determine the taxpayer’s IRP income. Use any on-line tool available to determine the potential liability to consider "Little or No Tax Due" or "Income Below Filing Requirements" , or a "Refund Due" , or "Not Liable" . Compare the total IRP income on the final page of the IRPTR command code page to determine if all reported IRP income is shown on SUPOL. IRPTR is updated with all new IRP documents as they are filed and SUPOL is not updated after a module is opened in the RD program. When closing modules Refund Due or Little or No Tax Due, document AMS comments of filing status, number of exemptions, taxable Income, tax or refund due to support action(s) taken.

    Note:

    Use CC TXCMP, Full Compliance Research Integrated Automation Technologies (IAT) Tool, or Decision RD located under "IRM Supplements" on SERP to calculate the taxpayer’s tax by entering the Tax Year, Filing Status (FS) (see paragraph 13 below to determine the FS and personal exemptions if not provided by the taxpayer), and income information.

  12. If research tools are not available, determine the potential liability by adding all Income, subtracting the Standard Deduction, Personal Exemptions, and Dependents from information provided by the taxpayer. Refer to tax tables for the delinquent year to determine the tax (Subtract credits/payments (includes withholding credits) to determine the potential liability.)

  13. If the information is not provided by the taxpayer, use the last return filed if within the last six years, otherwise use FS 1 "single" with only their own personal exemption, or FS 3 "married filing separate" if the taxpayer was married on their last return filed. We cannot assume the taxpayer is still filing as married.

    Note:

    For all HINF selection codes if unable to verify income, see IRM 5.19.2.8.5, Taxpayer Claims Not Liable, Refund Due or Little or No Tax Due.

  14. When on the phone with the taxpayer ask for income and expenses for the delinquent tax year:

    • Ask about all income received for the year: wages (including taxable fringe benefits), interest, dividends, stock sales, and self-employment income (for both the taxpayer and spouse if married filing joint return).

    • Ask for filing status, number of exemptions and approximate withholding or credits.

    • For reported IRP income from non-employee compensation over $400, we will always request the taxpayer for the return, even if you are closing the module under Policy Statement P-5-133.

    • For reported IRP income from stock sales that put the taxpayer’s total income above filing requirements, we will always ask the taxpayer for a return to show the costs associated with the stocks, even if you close the module under Policy Statement P-5-133.

  15. If the taxpayer states they had expenses (i.e. against business income) or a cost basis (i.e. against stock sales) that lowers their total income, you can accept this information via the phone or in correspondence (without a return) "ONLY" to compute the potential total tax liability and determine if there is a Refund Due or the tolerance amount was met for "Minimal" or "No" tax due per Policy Statement P-5-133. Inform the taxpayer they are still required to file a return if it is determined they met the criteria for Minimum or Little or No tax due, see IRM 5.19.2.6.4.5.2, IMF Refund Due, or if determined the module meets Minimum tax due they are still required to file, see IRM 5.19.2.6.4.5.3, IMF Little or No Tax Due.

  16. If the taxpayer states the income wasn't theirs, research the reported IRP income as follows:

    • Research prior year returns to see if the income has been previously claimed,

    • Check if any wages were possibly earned in another city or state as someone else could be using the taxpayer's SSN,

    • Research other account modules if they state the income was earned by a spouse or other family member (parent, children), or claimed on a business return, to see if the income was claimed.

  17. If research indicates you cannot verify income was reported on another return, contact the taxpayer to request a copy of the return where the income was reported.

  18. If you cannot find any information through research to show income is definitely the taxpayer's subtract the income.

    Note:

    For all HINF Selection Codes if unable to verify income, see IRM 5.19.2.8.2, HINF- IRP Incorrect.

  19. Whether the taxpayer must file a return depends on their gross income, age and filing status. Gross income includes all income received in the form of money, goods, property, and services that is not "exempt" from tax, including any income from sources outside of the United States, even if you exclude part or all of it (i.e. business expense, original cost basis, etc.).

  20. The final page of the IDRS CC "IRPTR" screen indicates the total income for the taxpayer. Use the information in paragraphs 22–27 below for definitions of IRP income to help determine what income is taxable and to help determine the total income and tax for the taxpayer.

    Note:

    If the final page of IRPTR shows deferred compensation under other income, subtract from taxable income.

  21. Follow procedures in the paragraphs below as guidance to work taxpayer responses and to make a determination in regards to the taxpayer’s liability:

    If Then
    Taxpayer is liable and has not filed,

    1. IMF Taxpayer Liable, see IRM 5.19.2.6.4.5.4 , IMF Taxpayer Liable.

    2. IMF Response Taxpayer Will File (Correspondence Only). See
      IRM 5.19.2.6.4.5.9, IMF Response Taxpayer Will File (Correspondence Only).

    3. IMF Response Taxpayer Unable to File, see IRM 5.19.2.6.4.5.14, IMF Response Taxpayer Unable to File.

    Taxpayer is not liable:
    Income is below filing requirements (FR) or previously filed,

    1. IMF Response Taxpayer Not Liable, see IRM 5.19.2.6.4.5.1.

    2. IMF Response Taxpayer Previously Filed Return, see IRM 5.19.2.6.4.5.10.

    Taxpayer may receive a refund if a return is filed, IMF Refund Due, see IRM 5.19.2.6.4.5.2
    Little or no tax due. IMF Little or No Tax Due, see IRM 5.19.2.6.4.5.3 .

    Note:

    The above references is not inclusive to working all IMF responses, as there are many IMF subsections within this IRM that can fall under each of the above.

  22. The following IRP income is always included in gross income. When figuring the total tax for tolerance purposes in determining "Little or No Tax Due" , you would use the total income amount, without reduction for any expenses.

    • Wages

    • Interest

    • Dividends

    • Total Taxable Annuity

    • Allocated Tips

    • Unemployment Compensation

    Note:

    For the 2009 tax year only, the American Recovery and Reinvestment Act provided that the first $2,400.00 of unemployment compensation received in 2009 was non taxable. For 2010 tax year, in general, unemployment compensation is fully taxable. However, if the taxpayer made contributions for a governmental unemployment compensation program and the taxpayer does not itemize deductions, the taxpayer should reduce the amount he or she reports by those contributions (Line 19 on the Form 1040).

  23. The following IRP income is always taxable and cannot have any expenses written off against the income. However, the total income of the taxpayer could determine if only a partial amount of the total amount of this income is taxable.

    • Computed Taxable social security benefits

  24. The following IRP income received by taxpayers is always included in gross income. However, taxpayers may reduce these items of gross income by certain expenses associated with earning the income, or by a recovery of basis, in determining their taxable income.

    Note:

    You can accept the total expenses or cost basis from the taxpayer via the phone or in correspondence (without a return) "ONLY" to compute the total tax and determine if the tolerance amount was met for minimal tax due, see IRM 5.19.2.6.4.5.3, IMF Little or No Tax Due.
    However, these figures can not be accepted to close the module as "Income Below Filing Requirements" or "Refund due" .

    • Total Pensions

    • Early distribution of pensions

    • Non-Employee Compensation (NEC)

    • Agricultural Subsidies

    • Distribution Share

    • Patronage Income

    • Fishing Income

    • Gross Winnings

    • Barter Income

    • Rents and Royalties

    • Medical Payments

    • Real Estate Payments

    • Broker/Stock Sales

    • Federal Contractor Income (Not Form 8596)

    • K-1 Business

    • Crop Insurance

    • Attorney Fees

    • Passive Income

    • Cancelled debt (see below)

    • Other Income

  25. If a taxpayer owes a debt and the debt or loan is cancelled, the amount of the cancelled (or discharged) debt or loan may be includible in gross income. However, the Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude cancellation of debt income from the discharge of debt on their principal residence. Section 108(a)(1)(E) and 108(h) generally permits the taxpayer to exclude cancellation of exclusion of "qualified principal residence interest indebtedness" for debt forgiven during calendar years 2007 through 2012. Cancellation of debt may occur in Excludible debt includes debt forgiven in connection either a with mortgage restructuring or a with foreclosure of the property. The maximum amount of debt cancellation that can be excluded is $2 million ($1 million if the taxpayer is married filing separately). Lenders report debt cancellations forgiven debt to debtors and the IRS on Form 1099-C, Box 2.
    A taxpayer may say that he or she is entitled to exclude the amount of cancelled debt because it is qualified principal residence interest indebtedness. Inform the taxpayer that to claim the exclusion, the taxpayer must file Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). Refer the taxpayer to Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments, for additional guidance.

  26. Self Employment (SE) Tax should be computed and added into the total tax computation for the following IRP income listed. For example, if the SE income is less than or equal to $94,200 for 2006 ($97,500 for 2007, $102,000 for 2008, or $106,800 for 2009) this is the maximum earnings that can be subject to Social Security Portion of SE tax. The net earnings from self-employment subject to self employment tax are 92.35% of the income from self employment (if net earnings from self employment income is less than $400, do not compute self employment tax. The taxpayer does not owe self employment tax.). You can deduct half of the computed self employment tax when figuring the total Adjusted Gross Income (AGI), which is the total taxable income.

    Note:

    You can also refer to Form Schedule SE as a tool for accurate calculation.

    • NEC

    • Medical Payments

    • Fishing Income

    • Barter Income

    • Federal Contractor (Not Form 8596)

    • Crop Insurance

    • Attorney Fees

    • Patronage Income

    • K-1 Guaranteed Payments

    • K-1 Business if a General Partner

  27. The following IRP Documents are not taxable income and should not be used to determine the gross income or tax amounts:

    • IRA Contributions

    • Withholding,

    • Excess FICA and Medicare Wages

    • FICA Wages

    • FICA Withholding

    • Computed Premium Distribution

    • Computed Self Employment Tax

    • Advanced Earned Income Credit

    • Early Withdrawal Penalty

    • Mortgage Interest, (See paragraphs 29 and 30 below)

    • CTR Transactions Amount

    • Form 8596

  28. If an inquiry (telephone or correspondence) is received questioning why they are required to file a tax return and the TDI selection code is 88, research CC IRPTR verifying the Mortgage Interest IRP document(s). Notices are sent to taxpayers if the mortgage interest paid is 50% or more of their total income.

    1. If CC IRPTR indicates one Mortgage Interest IRP document, question the taxpayer (via phone or correspondence - 2269C letter) how the Mortgage Interest was paid. Use selective paragraphs in Letter 2269C or appropriate letter fill in stating: Our records indicate the total income reported to the IRS is insufficient to the amount you paid for Mortgage Interest during the tax year. Please respond with an explanation how the Mortgage was paid and reason to support why you are not required to file a tax return.

    2. If CC IRPTR indicates more than one Mortgage Interest IRP document, question the taxpayer (via phone or correspondence - 2269C letter) if any Mortgage Interest paid are from "Rental Properties" . Use selective paragraphs in 2269C letter or appropriate letter fill in stating: Our records indicate that you have two or more Mortgage Interest paid documents. If one or more of the documents is for rental properties, you must file a tax return to report the Rental income received. If you do not receive rental income, please respond with an explanation how the Mortgage was paid and why you are not required to file a tax return.

      Note:

      For ACS Employees: When completing inventory processing, if the TDI selection code is 88 you are required to send a 2269C Letter to the taxpayer using the same language above if not previously sent. Update narrative on AMS to reflect letter issued. You cannot close the TDI module without taxpayer verification.

  29. If the taxpayer responds with an explanation how the Mortgage Interest was paid, follow the table below for guidance.

    If And Then
    If the taxpayer states the Mortgage interest was paid by another person, Their total income is below filing requirements,
    see IRM 5.19.2.6.4.5.1, IMF Response Taxpayer Not Liable (Income Below Filing Requirements),

    1. Inform the taxpayer they are not required to file and we will take the necessary actions to close the account.

    2. Input a TC 590 with appropriate closing code.

    3. Update AMS /ACS accordingly.

    Note:

    If the account is on ACS, enter history code "TOC0,21,RDPND" , or "TOS0,21,RDPND" .

    The taxpayer states the Mortgage Interest was paid by another person, Their income is above filing requirements,

    1. Inform the taxpayer they are required to file the tax return including the Mortgage Interest on Schedule A or E, if applicable.

    2. Update AMS/ACS accordingly.
    The taxpayer states they have rental properties, Their income is above filing requirements,

    1. Inform the taxpayer our records indicate they are required to file. Instruct the taxpayer to include all income including their rental income.

      Note:

      Rental income must be reported on either Schedule A or E, if applicable.

    2. Update AMS/ACS accordingly.
    The taxpayer states they do not have rental properties, Their income is above FR,

    1. Inform the taxpayer they are required to file.

    2. Update AMS/ACS accordingly.
    The taxpayer states they do not have rental properties and explained how the mortgage interest was paid. Their income is below FR.

    1. Inform the taxpayer they are not required to file.

    2. Input TC 590 with appropriate closing code for not liable see IRM 5.19.2.6.4.5.1, IMF Response Taxpayer Not Liable (Income Below Filing Requirements).

    3. Update AMS/ACS accordingly.


    Note:

    If the account is on ACS, enter "TOCO,21,RDPND" , or "TOS0,21,RDPND" .

  30. For ACSS employees, if there is " no reply" from the 2269C letter:

    And Then
    Taxpayer's income meets ASFR criteria, See IRM 5.19.2.6.4.3 , IMF Substitute for Return.
    Taxpayer's income meets Little or No Tax due criteria, See IRM 5.19.2.6.4.5.3 , IMF Little or No Tax Due.
    Module does not meet ASFR criteria, Close the account as Unable to Locate or Unable to Contact. See IRM 5.19.2.6.7, Unable to Locate, or see IRM 5.19.2.6.7.1, Unable to Contact.
    Account does not meet any of the above criteria. Assign the account to the Queue.

  31. If a correspondence is received informing us the income belongs to a "minor" child and was claimed on a parent's return, verify the filing of the parent’s return and verify the minor’s income was included. If income is included whether the income (earned or unearned) exceeds the minor to file under their own SSN, close the minor’s module with TC 594 cc 33/83, and input AMS comments. Send a closing letter or appropriate letter indicating that future returns where the minor’s income (unearned or earned) exceeds the amount to be claimed on the parent’s return, the minor must file their own return. Refer them to Publication 929, Tax Rules for Children and Dependents, for additional information.

    Note:

    The issue of the parent's filing and claiming the minor’s income which exceeds the criteria is not an RD issue. This issue may be worked or addressed through other treatment streams within the IRS if it meets the proper criteria.

5.19.2.6.4.5.1  (02-15-2011)
IMF Response Taxpayer Not Liable (Income Below Filing Requirements)

  1. Use this section to resolve delinquencies that have been determined to be “Not Liable”.

  2. If you determine the taxpayer's income is below Filing Requirements (FR), follow the guidelines below.

    Note:

    For HINF selection codes, see IRM 5.19.2.8.5, "HINF - Taxpayer Claims Not Liable, Refund, or Little or No Tax Due" .

    If Then
    For CSCO and AM Employees,

    1. Input TC 590 cc 76 using CC FRM49.

    2. The taxpayer states they are a victim of Identity theft, see IRM 5.19.2.7, IMF Identity Theft procedures, for guidance.

    3. Send closing letter 2358C or other appropriate letter.

    4. Update AMS comments of actions taken.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591, or 593. See IRM 5.19.2.6.8 , Credit Balance Overview.

    For ACS and ACSS Employees,

    1. Input TC 590 cc 26 using CC FRM49.

    2. The taxpayer states they are a victim of Identity Theft, see IRM 5.19.2.7 for guidance.

    3. Send closing letter 2358C or other appropriate letter.

    4. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    5. Update AMS comments of actions taken.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591, or 593. See IRM 5.19.2.6.8 , Credit Balance Overview.

    For FA Employees.

    1. Input TC 590 cc 21 using CC FRM49.

    2. If the taxpayer states they are a victim of Identity Theft, see IRM 5.19.2.7, Identity Theft procedures, for guidance.

    3. Send closing letter 2358C or other appropriate letter.

    4. If the account is on ACS, enter History Code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    5. Update AMS of action(s) taken.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures prior to closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

5.19.2.6.4.5.2  (02-15-2011)
IMF Refund Due

  1. Once an account has been determined in IRM 5.19.2.6.4.5, IMF Determining Liability to be a "refund due" , use this section to resolve the account.

    Note:

    For HINF selection codes, see IRM 5.19.2.8.5, "HINF - Taxpayer Claims Not Liable, Refund, or Little or No Tax Due" .

    If Then
    For CSCO and AM Employees,

    1. Advise the taxpayer to file the return. However, inform taxpayer in order to receive their refund a delinquent return must be filed within 3 years of the original return due date or within 2 years of the date of the payment, if applicable.
      See IRM 25.6.1.8, Original Delinquent Return, for additional guidance on refund.

    2. Input TC 590 cc 78 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8.

    3. Update AMS of filing status, number of exemptions, taxable income, tax or refund due to support actions taken.
    For ACS and ACSS Employees,

    1. Advise the taxpayer to file the return.
      However, inform taxpayer in order to receive their refund a delinquent return must be filed within 3 years of the original return due date or within 2 years of the date of the payment, if applicable.
      See IRM 25.6.1.8, Original Delinquent Return, for additional guidance on refund.

    2. Input TC 590 cc 28 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    3. Advise taxpayer of the statute of limitations for receiving a refund.

    4. Update AMS of filing status, number of exemptions, taxable Income, tax or refund due to support action(s) taken.

    5. If account is on ACS, enter history code "TOC0,21,RDPND" , or "TOS0,21,RDPND" .

    For FA Employees.

    1. Advise the taxpayer to file the return. However, inform taxpayer in order to receive their refund a delinquent return must be filed within 3 years of the original return due date or within 2 years of the date of the payment, if applicable.
      See IRM 25.6.1.8, Original Delinquent Return, for additional guidance on refund.

    2. Input TC 590 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    3. Advise taxpayer of the statute of limitations for receiving a refund.

    4. Update AMS of filing status, number of exemptions, taxable Income, tax or refund due to support action(s) taken.

    5. If account is on ACS, enter history code "TOC0,21,RDPND" .

  2. If the taxpayer states they have a refund due, and we compute they will not have a refund due, see IRM 5.19.2.6.4.5.3 , IMF Little or No Tax Due or see IRM 5.19.2.6.4.5.4, IMF Taxpayer Liable.

5.19.2.6.4.5.3  (02-15-2011)
IMF Little or No Tax Due

  1. This section addresses closing modules without enforcement action even when a return is due if it meets certain criteria.

  2. Policy Statement P–5–133 of IRM 1.2.14, Service Policies and Authorities-Policy Statement for Collection Process, allows closing modules if one of the following situations exist:

    1. There is minimal tax due.≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

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

    2. There is no tax due on the delinquent return(s).

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

      Note:

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

  3. Use Publication 17 for the tax year in question to help determine if the taxpayer’s reported income is taxable and to help compute the amount of tax due. See IRM 5.19.2.6.4.5, IMF - Determining Liability, for definition of IRP income documents.

    Note:

    Always close cases meeting criteria for Not Liable (Income Below Filing Requirements) or Refund Due before closing as "Little or No Tax Due" .

  4. Research is necessary to determine if the taxpayer is considered a "Stop Filer" prior to closing under criteria "minimum tax due" . They are not appropriate for a "minimal tax due" closure unless the taxpayer has provided information stating their only income is what is reported via IRP documentation, do not close as "minimal tax due" in accordance with Policy Statement P-5-133. The SUPOL and IRP documents alone cannot be used as the basis for this type of filer.

    Note:

    Stop Filers are taxpayers who filed in the year immediately preceding the year of the Return Delinquency module. To identify these taxpayers use IDRS cc TDINQ to research the Copy Score. This is a four digit field on page 1 of the TDINQ page shown as "COPYS - ####" . If the first digit is 2, or 4, or 6, or 8 (no matter what the selection code is), this is a Stop Filer. Some Stop Filers have income from Business, Rental, Farm Income, or other non reported IRP income.

    Note:

    For all Non "Stop Filers" modules, check CC TRDBV or RTVUE to view the last return filed (not more than six years from the current tax year) to see if the taxpayer reported any Non-IRP income (i.e. business income above any IRP reported income, rental income, farm income, etc.). It is only necessary to verify the last return filed and if the income above is present do not close as "Little or No Tax Due" or "Minimal Tax Due" .

  5. If determined the module meets the criteria to close per "P-5-133" ,, follow the table below for guidance:

    Note:

    Selection Code 02- IRS Employees can not be closed "Little or No Tax Due" .

    Note:

    Managerial approval is not required if "Little or No Tax Due" is determined using appropriate tools, for example, Decision RD, Full Compliance Research IAT tool or other approved tools. Document the tool used and the results in AMS comments.


    If And Then
    Account meets P-5-133 criteria, For CSCO, and AM Employees,

    1. Contact the taxpayer via correspondence or telephone and request return(s) for all delinquent tax year(s). If unable to contact by telephone, send Letter 2269C or other appropriate letter.

      Note:

      Do not inform the taxpayer the account module is being closed as Little or No Tax Due.

    2. After managerial approval (unless approved tool is used), input TC 590 cc 77 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    3. Update AMS of filing status, number of exemptions, taxable income, tax or refund due to support action(s) taken.

      Note:

      Documentation not required if closing modules over 6 years old.
    For ACS and ACSS Employees,

    1. Contact the taxpayer via correspondence or telephone and request return(s) for all delinquency tax year(s).

    2. If on the telephone, set a deadline to file of 30 days from the day you are closing the case.

    3. If unable to contact by telephone, set a 45 day deadline and send a 2269C or other appropriate letter. If the account is in ACS, send an LT26 letter, which automatically sets a ten day deadline.

      Note:

      Do not inform the taxpayer the account module is being closed as Little or No Tax Due.

    4. If a credit balance remains on the account, you must follow all credit balance research procedures. before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

      Note:

      If on the telephone with the taxpayer, address the credit balance during the call.

    5. Update AMS of filing status, number of exemptions, taxable income, tax or refund due to support action(s) taken.

      Note:

      Documentation not required if closing modules over 6 years old.

    6. If using the appropriate tools, input RD90,27 or input TC590 cc 27 using FRM49, and enter a history code TOC0.,21,RDPND

    7. If managerial approval required, enter history code to assign to Manager inventory requesting closing actions, "TOC0,05,59027" or "TOS0,05,59027" .

    8. After managerial approval (unless approved tool is used), input TC 590 cc 27 using CC FRM49 on IDRS or enter history code on ACS, "OADT,21,59027" .

      Note:

      Managers in ACS or ACS Support will approve by entering ACS history code OADT,21,5133APP, but also have the option to approve by entering history code RD90,27 or to send the case back to their employee to input the transaction on IDRS per above. On the ACSWeb history code screen, select the grey button next to the history code entry field to enable entering a history code not in the drop down menu.

    For FA Employees.

    1. Contact the taxpayer via correspondence telephone, or in a face to face meeting and request return(s) for all delinquency tax year(s).

    2. Set a deadline of 30 days from the day you close the case.

    3. Input TC 590 cc 20.

      Note:

      Do not tell the taxpayer the account module is being closed as Little or No Tax Due.

    4. If a credit balance remains on the account, you must follow all credit balance research procedures. before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8.

    5. Update AMS with filing status, number of exemptions, taxable income, tax or refund due to support action(s) taken, including the deadline date.

      Note:

      Not required if closing modules over 6 years old.

    6. If on ACS, enter history code "TOC0,05,59020" .

    Account does not meet P-5-133 criteria.   See IRM 5.19.2.6.4.5.4, IMF Taxpayer Liable.

  6. All cases closed with Little or No Tax Due must be approved by a manager or lead, only if approved tools were not used, refer to Note in paragraph 4 above.
    Exception: Closures over 6 years old do not require managerial approval, or AMS documentation of tax computation.

    • For Non-ACS AMS users, a narrative must be added stating this was approved. The narrative can be entered by the employee or management.

    • For ACS employees you must enter all case actions in a narrative on AMS, including the case was sent for management approval and enter appropriate ACS History Codes. A checklist on AMS may be used to generate the narrative. ACS SBSE management must use appropriate ACS History Codes and are not required to enter an additional narrative. W&I management must use appropriate ACS History Codes and are required to enter an additional narrative in AMS stating they approved or disapproved the closure.

  7. For all identified HINF Selection Codes modules, see IRM 5.19.2.8.5, HINF - Taxpayer Claims Not Liable, Refund, or Little or No Tax Due.

5.19.2.6.4.5.4  (02-15-2011)
IMF Taxpayer Liable

  1. This section provides general guidance for determining actions needed when tax module(s) can be identified as “liable to file”.

  2. For all HINF cases, see IRM 5.19.2.8.4, HINF - Taxpayer Contact.

  3. If it is determined that taxpayer may be a victim of identity theft, see IRM 5.19.2.7, IMF Identity Theft Procedures for additional guidance.

  4. If the taxpayer is liable, determine the period(s) of delinquency and take the following actions in paragraphs 5-9 below.

    Note:

    FA employees only: When working collection cases set deadlines that are reasonable and appropriate see IRM 5.19.2.6.1.2, Accelerate to Compliance Territory Office. When working ICS collection cases, refer those accounts meeting ASFR criteria from ICS. If the case meets ASFR criteria, but cannot be systemically assigned to ASFR on ICS, FA will utilize CC ASGNI 8000 using IDRS. See IRM 5.19.2.6.4.3.

  5. If correspondence from the taxpayer states to go ahead and prepare their return per the "Substitute for Return" , warning in an IRS notice, send taxpayer 2269C letter or appropriate letter, or call taxpayer to inform the ASFR program uses the highest tax rates with no deductions allowed. In addition, inform the taxpayer interest and penalties will accrue from the original due date of the return until the substitute for return is processed and the account is paid in full. Advise the taxpayer it is to their best interest to prepare and file a return on their own, and to pay any balance due as soon as possible. See IRM 5.19.2.6.4.3, IMF Substitute for Return Program (ASFR), for additional guidance.

  6. If you are responding to a taxpayer notice response and the correspondence provided a phone number, you must telephone the taxpayer, at least two attempts (one attempt for SBSE CSCO employees), before sending a letter to the taxpayer and both phone attempts must be documented on AMS. If you are responding via correspondence, follow the guidelines below:

    If Then
    Account is in Notice Status 02,

    1. Instruct the taxpayer to file and set a deadline of 45 days from the day you are closing the case.

    2. Send a 2269C or applicable letter using the appropriate paragraphs to advise the taxpayer that failure to file by the specified date could subject the taxpayer to a fine and/or criminal penalties and of a possible Substitute for Return processing.

      Note:

      In addition, remind the taxpayer to ensure the correct current address is on the return, whether it is a copy or an original return.

    3. Update AMS of target date given to taxpayer to file their return.

    4. Input delay "C08" using CC ASGNI. If accelerating the account to ACS, see IRM 5.19.2.6.1.1, Accelerate or Delay to TDI Status 03.

      Note:

      If also working a balance due issue, ensure all CC STAUP's and delays are equal.
    Account is in TDI Status 03.

    1. Instruct the taxpayer to file and set a deadline of 45 days from the day you are closing the case.
      If the case is on ACS, send a LT26 letter, which automatically sets a 25-day deadline.

    2. Send a 2269C (use LT26 if you are in ACS) or other appropriate letter using the appropriate paragraphs to advise the taxpayer that failure to file by the specified date could subject the taxpayer to a fine and/or criminal penalties and of a possible Substitute for Return processing.

      Note:

      In addition, remind the taxpayer to ensure the correct current address is on the return, whether it is a copy or original return.

    3. Input a history item on IDRS (using CC ACTON "TP2Fmmdd" with mmdd indicating the target date) or enter history on AMS explaining the target date provided to the taxpayer to file their return.

    4. Update AMS of information secured, including the deadline date for filing and warning of enforcement actions.

    5. If the case meets criteria for ASFR, see IRM 5.19.2.6.4.3, IMF Automated Substitute for Return Program (ASFR) Referrals.
      If the account is on ACS, input "TOI7,XX,ASFR" (XX = follow-up date which is 30 days beyond the deadline to file).

    6. If the case doesn't meet ASFR criteria, see IRM 5.19.2.6.4.3.
      If the account is on ACS, input "TOI7,XX,TFQU" (XX = follow-up date which is 30 days beyond the deadline to file).

    Note:

    When sending correspondence, only provide the taxpayer with missing income information from IRS internal sources as needed or requested.

  7. If you are answering the taxpayer by telephone (Non-ACS or Non - FA Employee):

    If Then
    Account is in Notice Status 02 or TDI Status 03.

    1. Determine if the taxpayer has the necessary data and forms to file the delinquent return(s) and provide the information, as needed.

      • Instruct the taxpayer to file and set a deadline of 30 days (allow additional time, if necessary taking into consideration the complexity of the delinquent return(s) and other pertinent circumstances), but no more than 60 days.

      • Advise the taxpayer that failure to file by the specified date could subject them to a possible substitute for return processing. If the taxpayer says to go ahead and file for them, see item 2 below.

      • Remind the taxpayer to ensure the correct current address is on the return, whether it is a copy or original return.

      • Input a history item on IDRS (using CC ACTON "TPPFmmdd" ith mmdd indicating the target date) or enter history on AMS documenting the target date provided to the taxpayer to file their return.

      • If in Notice Status Code (SC) 02, input a delay C08, using CC ASGNI (see IRM 2.4.27). See IRM 5.19.2.6.1.1, Accelerate or Delay to TDI Status 03.

      • If in TDI Status 03, do not input delay

      • Update AMS of filing status, number of exemptions, taxable income, tax or refund due to support actions taken that the taxpayer is liable to file, as appropriately.

    2. If the taxpayer states "go ahead and prepare their return" and the module meets ASFR criteria, see IRM 5.19.2.6.4.3, IMF Automated Substitute for Return Program (ASFR) Referrals. If module does not meet ASFR criteria, see item 3 below.

      • First, advise the taxpayer the following: "We will use the highest tax rates with no deductions, allowing only your personal exemption. Interest and penalties will accrue from the original due date of the return until the substitute for return (ASFR) is processed and the account is paid in full. It is in your best interest to prepare and file your own return and pay any balance due as soon as possible."

      • If in SC 02 and the taxpayer still says go ahead and file their return, then input a delay "C01" to accelerate to TDI status 03, hold the case for one cycle for the module to update, then use CC ASGNI 8000 to assign the case to ASFR.

      • If in TDI Status 03, use CC ASGNI 8000 to assign the case to ASFR.

      • Update AMS of filing status, number of exemptions, taxable income, tax or refund due to support actions taken that the taxpayer is liable to file, as appropriately.

    3. If the taxpayer states to go ahead and prepare their return and does not meet ASFR criteria, see IRM 5.19.2.6.4.3 , IMF ASFR Referrals.

      • Advise the taxpayer, the ASFR program is not a voluntary option.

      • Instruct the taxpayer to file and set a deadline of 30 days (allow additional time, if necessary taking into consideration the complexity of the delinquent return(s) and other pertinent circumstances), but no more than 60 days.

      • Input a history item on IDRS (using CC ACTON "TPPFmmdd" with mmdd indicating the target date) or enter history on AMS documenting the target date provided to the taxpayer to file their return.

      • If in SC 02, input a delay C08, using CC ASGNI (see IRM 2.4.27). See IRM 5.19.2.6.1.1, Accelerate or Delay to TDI Status 03.

      • If in TDI Status 03, do not input delay.

    Note:

    If also working a balance due issue for the taxpayer, make sure any STAUP's and delays are equal.

  8. You are answering the taxpayer by telephone or in person at a walk-in office (ACS or FA Employee), and the taxpayer has no BD modules:

    If Then
    Account is in Notice Status 02 or TDI Status 03. Ask the taxpayer for reasons that the return was not filed (e.g. the taxpayer owed money and could not pay, so they did not file; taxpayer could not find tax records, health/family issues, etc.).

    1. Determine if the taxpayer has the necessary data and forms to file the return(s) and provide data as needed.

      • Instruct the taxpayer to file the return and set a deadline (see table in paragraph 9 below) taking into consideration the complexity of the delinquent return(s) and other pertinent circumstances, but generally not more than 30 days. Enter history code "TOI7,XX,ASFR" (XX = deadline plus 30 days).

      • Advise the taxpayer that failure to file by the specified date could subject them to a possible substitute for return processing. If the taxpayer says to go ahead and file for them, see item 2 below.

      • Remind the taxpayer to ensure the correct current address is on the return, whether it is a copy or original return.

      • If in SC 02, input a delay C08 (or C01 if another module is in ACS), using CC ASGNI (see IRM 2.4.27. See IRM 5.19.2.6.1.1, Accelerate or Delay to TDI Status 03.

      • If in TDI Status 03, do not input delay.

      • Provide warning of enforcement actions, see IRM 5.19.1.8 , Warning of Enforcement Action and Enforced Collection.

      • Update AMS of target date to file "TPPFmmdd" (with mmdd indicating the target date), filing status, number of exemptions, taxable income, tax or refund due to support actions taken that the taxpayer is liable to file, as appropriately.

      Note:

      If the taxpayer has the return already prepared, encourage the taxpayer to fax directly to you while on the phone.

    2. If the taxpayer states "go ahead and prepare their return" and the module meets ASFR criteria, see IRM 5.19.2.6.4.3, IMF ASFR Referrals. If module does not meet ASFR criteria, see item 3 below.

      • First, advise the taxpayer the following: "We will use the highest tax rates with no deductions, allowing only your personal exemption. Interest and penalties will accrue from the original due date of the return until the substitute for return (ASFR) is processed and the account is paid in full. It is to their best interest to prepare and file a return on their own and pay any balance due as soon as possible" .

      • If in SC 02 and the taxpayer still says to go ahead and file their return, then input delay "C01" to accelerate to TDI Status 03, hold the case for one cycle for the module to update, then enter ACS history code "TFRO,,AOTO8000" to assign the case to ASFR.

      • If in TDI Status 03, enter ACS history code "TFRO,,AOTO8000" to assign the case to ASFR.

      • Provide warning of enforcement actions, see IRM 5.19.1.8 , Warning of Enforcement Action and Enforced Collection.

      • Update AMS of filing status, number of exemptions, taxable income, tax or refund due to support actions taken that the taxpayer is liable to file, as appropriately.

    3. If the taxpayer states to go ahead and prepare their return and does not meet ASFR criteria, see IRM 5.19.2.6.4.3, IMF ASFR Referrals.

      • Advise the taxpayer, the ASFR program is not a voluntary option.

      • Instruct the taxpayer to file the return and set a deadline (see table in paragraph 9 below) taking into consideration the complexity of the delinquent return(s) and other pertinent circumstances, but generally not more than 30 days.

      • If the taxpayer has been given a previous deadline, allow only a 10-day extension (any further extensions must be approved by a manager). Advise the taxpayer that no further extensions will be granted. Document the additional justification for the second extension.

      • Remind the taxpayer to ensure the correct current address is on the return, whether it is a copy or original return.

      • Input a history item on IDRS (using CC ACTON "TPPFmmdd" with mmdd indicating the target date) or document on AMS the target date provided to the taxpayer to file their return and warning of enforcement actions.

      • Enter ACS history code "TOI7,XX,TFQU" (XX = deadline plus 30 days).

      • Provide warning of enforcement actions, see IRM 5.19.1.8 , Warning of Enforcement Action and Enforced Collection.

      • Update AMS of target date to file "TPPFmmdd" (with mmdd indicating the target date), filing status, number of exemptions, taxable income, tax or refund due to support actions taken that the taxpayer is liable to file, as appropriately.

  9. If assisting the taxpayer by telephone or in person at a walk-in office (ACS or FA Employee), and the taxpayer has another module in TDA Status 22, then refer to IRM 5.19.1, Balance Due for procedures on resolving their balance due issue.

    Note:

    If you are not trained to work balance due issues, transfer the call or ask the taxpayer if you can have someone return their call. Complete Form 4442 for the TDA issue, and forward to the appropriate area.

    If Then
    Account is in Notice Status 02 or TDI Status 03.

    1. Ask the taxpayer for possible reason the return was not filed (e.g. the taxpayer owed money and could not pay, so they did not file; taxpayer could not find tax records, health/ family issues, etc.), and determine if the taxpayer has the necessary data and forms to file the return(s). If necessary, provide data for taxpayer to file. Instruct the taxpayer to file the return and set a deadline (see table in paragraph 9 below) taking into consideration the complexity of the delinquent return(s) and other pertinent circumstances, but generally not more than 30 days.

      Note:

      If the taxpayer has the return already prepared, encourage the taxpayer to fax directly to you while on the phone. Refer to the "Note" in Paragraph 10 below for these procedures.

    2. If an Installment Agreement is being considered, refer to IRM 5.19.1.5, Methods of Payments to determine and advise the taxpayer if any returns need to be filed prior to granting an IA.

    3. If the taxpayer has been given a previous deadline, allow only a 10-day extension (any further extensions must be approved by a manager). Document the additional justification for the second extension and advise the taxpayer that no further extensions will be granted.

      Note:

      Once 40 days have elapsed (30 days plus 10 day extension), do not grant further extensions without managerial approval. Advise taxpayer to file return as soon as possible.

    4. Advise the taxpayer that failure to file by the specified date could subject them to a possible substitute for return processing. If the taxpayer states "go ahead and prepare their return" , inform the taxpayer the ASFR program is not a voluntary option. The taxpayer is required to file a return by the deadline set in steps 1 or 3 above.

      Note:

      If taxpayer is unable to pay refer to IRM 5.19.1.7.1.5, CNC Unable to Pay - Hardship, to further analyze and verify for CNC criteria, otherwise follow items 5 through 8 below.

    5. Warn the taxpayer of potential enforcement action (lien/levy/ASFR) see IRM 5.19.1.8, Warning of Enforcement Action and Enforced Collection.

    6. Verify and document existing levy sources and add new levy sources.

    7. Update AMS of target date to file "PPFmmdd" (with mmdd indicating the target date), filing status, number of exemptions, taxable income, tax or refund due to support actions taken and provide warning of enforcement actions, see IRM 5.19.1.8, Warning of Enforcement Action and Enforced Collection.

    8. Enter next case actions:
      If there are available levy sources: Enter ACS history code:

      • TOR5,XX,CKCMTS (if LT11 already sent) -or-

      • TOI8,XX,CKCMTS (if LT11 not sent) -or-

      • OADT,XX,CKCMTS (if levy already issued, but not released).

        Note:

        (XX=30 days past deadline date.)

  10. If you are an ACS/ACSS employee, use the following table as a guide to determine the amount of days to allow the taxpayer to file a return:

    Circumstance/Complexity Establish Deadline
    Taxpayer has tax forms completed but has not mailed 10 days
    Taxpayer has not completed tax forms but has all necessary information for easy filing (no schedules) 10 days
    Taxpayer has most tax forms and must file a return with schedules 30 days
    Taxpayer is in need of all necessary tax forms 30 days
    Taxpayer has multiple returns that should be filed 30 days
    Taxpayer has multiple returns to be filed and has no forms or wage information 30 days
    Taxpayer has medical hindrance, POA issues, catastrophic event, or needs to reconstruct records 30 days

    Note:

    Allow 60 days for International Accounts.

  11. If you are an ACS employee, advise the taxpayer to:

    • "sign and date" the return(s),

    • use current address on the return,

    • include all required schedules and documents,

    • fax the return if immediately available, if not, have taxpayer mail the return(s) to the appropriate ACSSFunction (regardless of module status).

    See the link below for appropriate ACSS site: http://serp.enterprise.irs.gov/databases/who-where.dr/acsspt-lias.dr/acs-support.htm.

    Note:

    ACS employees can accept 10 pages (or more if warranted) through fax if the account will be resolved while you are on the phone with the taxpayer. When the return is received, perfect the return, use the faxed received date as the IRS received date. See IRM 5.19.2.6.4.5.12, IMF Response with Original Return. Complete the appropriate RD/TDI transaction and closing code actions prior to routing the return to the appropriate campus. If the taxpayer does not have the documents necessary during phone contact, follow the mailing procedures above.

  12. Only when requested/needed, provide the taxpayer with missing income information from IRS internal sources, such as:

    • TDI Supplement

    • Information Reporting Program (IRP) Transcripts (Case Minors Only)

    • Corporate Files On-Line (CFOL) on IMF cases

    • Transcript Delivery System (TDS)

  13. If necessary, provide the required tax forms or request them through SERP. If the taxpayer has Internet access, provide him/her with the IRS website address: http://www.irs.gov/, type in key word "Forms and Publications" . You can also provide the Toll-Free number to order forms 1-800-TAX FORM (1-800-829-3676).

    Note:

    On AMS "ELITE" can be used to mail forms directly to the taxpayer's address on entity.

5.19.2.6.4.5.5  (02-15-2011)
IMF Response Taxpayer Resides Outside U.S. or in the U.S. Territories

  1. This section gives general guidelines on working notice responses for taxpayers residing outside of the U.S. (foreign address) or who are bona fide residents of a territory [i.e., Commonwealth of Puerto Rico (PR), U.S. Virgin Islands (USVI), Guam (GU), American Samoa (AS), Commonwealth of the Northern Mariana Islands (CNMI)].

    Note:

    Throughout this section, update AMS or ACS accordingly on all actions taken.

  2. For taxpayers who work outside of the U.S. during the delinquency year, RD responses are handled in the same normal processing manner, even if taxpayer lived overseas during the delinquency period. Use normal processing procedures to code and prepare secured tax returns for processing. See IRM 5.19.2.6.4.5.12, IMF Response with Original Return.

  3. For taxpayers who are bona fide residents of a territory, special rules apply for taxpayers in a U.S. Possession. Bona fide residents of GU, CNMI, or USVI generally file a single income tax return with the possession tax authority, IRS, or both, depending on their residency and income, see IRM 21.8.1.4, Territories of the United States, for additional information and see Publication 570, Tax Guide for Individuals with Income from U.S. Possessions.

    Note:

    Individuals born in U.S. territories are U.S. citizens, except in the case of American Samoa, where such individuals are U.S. nationals who are treated as U.S. citizens for tax purposes. Many individuals residing in a territory are permanent residents of the U.S. because they have a "green card" and for tax purposes they are treated the same as U.S. citizens.

  4. Taxpayers who are bona fide residents of PR or AS may need to file separate returns with both the territory tax authority and the IRS, see IRM 21.8.1.5 , Puerto Rico or IRM 21.8.1.9 , American Samoa, for additional information.

  5. For all cases showing a foreign address, even if they live in a U.S. Possession (Guam, Virgin Islands, American Samoa, Northern Marianna Islands or Puerto Rico), make any entity changes to reflect the foreign address and location code. Input a TC 030 with Document Code 63 on CC ENREQ to identify the taxpayer as living outside the U.S.

  6. If response indicates a foreign address and the Last Return Amount (LRA) meets criteria for "Little or No Tax Due" , see IRM 5.19.2.6.4.5.3, IMF Little or No Tax Due. Do not send the response to A/C International.

  7. If response indicates a foreign address and the LRA exceeds criteria for "Little or No Tax Due" , and they do not live in a U.S. Possession (Guam, Virgin Islands, American Samoa, Northern Marianna Islands or Puerto Rico), send the case to A/C International.
    Route to PSC Stop- 672S using Form 3499. Input appropriate delays using cc ASGNI. Send an 86C Letter to advise the taxpayer of the transfer. See paragraphs 9 and 10 below for residents of a U.S. Possession.

  8. If taxpayer is a bona fide resident of Guam [GU], Commonwealth of the Northern Mariana Islands [CNMI or NMI], or U.S. Virgin Islands [USVI or VI], process as follows:

    Note:

    See specific procedures for each U.S. possession stated above; see IRM 21.8.1.6, U.S. Virgin Islands, IRM 21.8.1.7, Guam, and IRM 21.8.1.8, Commonwealth of the Northern Mariana Islands.

    If And Then
    Bona Fide Resident of a specified U.S. possession during delinquent year, Self-employed

    1. Change filing requirement to 1040SS (MFT 30, FR 06).

    2. Send a 2269C letter to request a Form 1040-SS return.

    3. Do not forward the case to A/C International.
    Not self-employed

    1. Input TC 590 cc 76/26/21.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview, for guidance.

    2. Do not forward the case to A/C International.
    Taxpayer NOT liable for U.S. Form 1040 if taxpayer is a bona fide resident and filed return with Guam or CNMI, Credit is present on the account Follow procedures in IRM 5.19.2.6.8, "Credit Balance Overview" .
    Taxpayer NOT liable for U.S. Form 1040 if taxpayer is a bona fide resident and filed return with VI.

    1. Route the case to A/C International at PSC Stop-672S, using Form 3499.

    2. Send an 86C Letter to advise the taxpayer of the transfer.
    Taxpayer is liable for U.S. Form 1040 (i.e. taxpayer was a resident of the U.S. and not a bona fide resident of the U.S. Possession), Original return is secured

    1. Input TC 599 cc 94/96 (CSCO/AM), 44/46 (ACS/ACSS), 20/21 (FA) and forward return to Austin Submission Processing.

      Note:

      Do not forward to A/C International area.

    2. Send an 86C letter to advise taxpayer the return was forwarded to another area for processing.
    Taxpayer states the return has already been filed

    1. Verify if return was filed as stated, if no return has been previously processed, see IRM 5.19.2.6.4.5.12, IMF Response with Original Return.

    2. For cases in Notice Status 02, input "C08" using CC ASGNI (see IRM 2.4.27 ).

    Note:

    Tax forms used by some possessions may be identical or similar to IRS forms. Taxpayers may be using a U.S. Form 1040 to file a territorial income tax return, with the U.S. Possessions. Do not process the return as a U.S. return if taxpayer is not liable (this includes a copy of a return filed in a possession).

  9. If taxpayer sends in an original tax return for a year that he or she is not liable, and the return was intended to be filed with the tax office of the U.S. Possession, send the return to the appropriate address:

    Department of Revenue and Taxation
    Government of Guam
    PO Box 23607
    GMF, GU 96921

    Division of Revenue and Taxation
    Commonwealth of the Northern Mariana Islands
    PO Box 5234, CHRB
    Sampan, MP 96950

    Virgin Islands Bureau of Internal Revenue
    9601 Estate Thomas
    Charlotte Amalie
    St. Thomas, USVI. 00802

  10. Residents of Puerto Rico (PR) or American Samoa (AS) may or may not have a U.S. filing requirement. If a return is due, advise taxpayer of transfer to SBSE International Operations. Process RD response if it indicates the following:

    If And Then
    NOT self-employed and NOT employed by U.S. Government No income from sources outside PR or AS

    1. Input TC 590 with appropriate closing code.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview, for guidance.


      Do not forward the case to A/C International.

    NOT self-employed and NOT employed by U.S. Government Income from sources outside PR or AS

    1. Send a 2269C or other appropriate letter to request a return.

    2. For cases in Notice Status 02, input "C08" using CC ASGNI, see IRM 2.4.27.

    3. Do not forward the case to A/C International.
    Self-employed bona fide resident of PR with $400 or more of income  

    1. Liable for 1040PR or 1040SS. Change FR to 07.

    2. Send a 2269C or other appropriate letter to request a return.

    3. For cases in Notice Status 02, input "C08" using CC ASGNI, see IRM 2.4.27.

    4. Do not forward the case to A/C International.
    Self-employed bona fide resident of AS with $400 or more of income  

    1. Liable for 1040SS. Change FR to 0.

    2. Send a 2269C or other appropriate letter to request a return.

    3. For cases in Notice Status 02, input "C08" using CC ASGNI, see IRM 2.4.27

    4. Do not forward the case to A/C International.
    Income from U.S. Government source Whether it is earned on or off the island

    1. Send a 2269C or other appropriate letter to request a return.

    2. For cases in Notice Status 02, input "C08" using CC ASGNI, see IRM 2.4.27.

    3. Do not forward the case to A/C International.

5.19.2.6.4.5.6  (02-15-2011)
IMF Response Taxpayer Deceased

  1. This section provides general guidance for handling decedent RD modules. All procedures apply to contacts via telephone, correspondence or in person, unless otherwise noted. All information secured and/or actions taken must be documented in AMS or IDRS history. If original documents are received, make copies and return the originals to the provider.

  2. Refer to IRM 11.3.2.4.11, Deceased Individuals, Disclosure of Official Information, for additional guidance.

  3. If a decedent case has previously been identified, the account should contain one or more of the following:

    • DECD in the name line

    • Date of Death on CC INOLES

    • TC 540 on CC TXMOD or CC IMFOLT for the year of death

    • Mail File Requirements (MFR 08) on CC ENMOD

    Note:

    Research the account for a Criminal Investigation (CI) Z freeze. If present, route the death certificate attached to Form 4442 to the campus indicated on the DLN of the TC 914, 916, or 918. If you are speaking to a third party on the phone, secure the information listed in proceeding paragraph below and send this to CI.

  4. If you contacted the third party by phone or a phone call is received from a third party stating the taxpayer is deceased and the account indicates the delinquent return will result in a potential balance due, or there is an associated balance due module on the account determine if there is an existing Estate and/or executor for the decedent taxpayer. Research CC INOLE, with definer S or G, to verify for an established estate. If all information can not be secured from research, attempt to secure the following information:

    • Request a copy of the death certificate.

    • County in which the taxpayer died.

    • County in which the taxpayer resided at the time of death.

    • Ask if there is an established Estate, and if Form 1041 is applicable.

    • Name, address, telephone number of the fiduciary (executor or administrator).

    • Name and telephone number of the third party providing the information if different from the fiduciary for documentation purpose.

    • If the case is a combo account (balance due & return delinquency), refer to IRM 5.19.1.4.3, Deceased Taxpayers for guidance.

      All information secured and/or actions taken must be documented on AMS or IDRS.

      Note:

      If it is determined the TDI module(s) meet Little or No Tax Due and there is no associated balance due module, close the module appropriately including updating date of death, if secured. It is not necessary to request the additional documentation listed above.

    Note:

    For HINF cases, see IRM 5.19.2.8.6.

  5. If correspondence is received indicating the taxpayer is deceased and research does not verify date of death, attempt two phone calls (if a number is available) to secure the above documentation. If telephone contact is successful, request the information listed in paragraph 4 above .

  6. If no phone number is available or the two phone attempts (one phone attempt for SBSE CSCO employees) are unsuccessful, send the taxpayer a 2268C letter or appropriate letter requesting the information listed in paragraph 4 above. For modules in Notice Status 02, input a C08 using CC ASGNI.

  7. If in Notice Status Code 02 and correspondence is received indicating there is no estate, the estate is closed, and/or there is no executor, document AMS comments and input CC ASGNI(A).

  8. Upon receipt of the death certificate either by fax or correspondence, if there is no (Z) freeze for CI, input a TC 540 (see note in paragraph 9 below) using CC REQ77 for the year of the taxpayer's death, unless it is the current year and there is a filing requirement. If an original death certificate is secured, update entity with the information and return the original to the sender. Faxed and copies can be destroyed.

  9. Refer to IRM 21.6.6.3.19.1, Updating the Entity on Decedent Accounts, and refer to IRM 5.19.1.4.3.2, Deceased Taxpayers - Entity Changes for guidance in updating the name line(s), address, phone numbers, executor, administrator, or other information. When sending any correspondence letters, ensure the first name line is addressed to the deceased taxpayer, and the second name line to the surviving spouse or representative.

    Note:

    Ensure the name line is updated in the year of death or the TC 540 will cause an Unpostable condition.

  10. Refer to IRM 5.19.1.4.3.2, Deceased Taxpayers- Entity Changes, for procedural guidance on entity changes/updates. For Decedent Stand Alone TDI case processing only, the following scenarios may be encountered;

    • Income may be distributed to a decedent in the year of death or the year(s) after death. The surviving spouse may choose to include the decedent's income on a joint return in the year of death. For subsequent years the decedent's income must be reported on Form 1041.

    • If there is no surviving spouse or the surviving spouse chooses to file separately, the decedent's income for the year of death would be reported on Form 1041.

    • With respect to income earned on assets that were already distributed to beneficiaries, those income amounts would be reported on the individual returns of the beneficiaries receiving the income.

    • If the income is distributed through the estate to heirs, generally it would be reported on the Form 1041 of the estate. If the income is taxable distributable net income the estate will receive an income tax deduction for distributions of this income to the heirs. The heir will report the income on their Form 1040 and pay the tax on the distributed income.

  11. If there is an indication of an Estate, request the EIN for the estate or a copy of the Form 1041, if applicable.

  12. For HINF Selection Code Cases, see IRM 5.19.2.8.6, HINF- Deceased Taxpayers. Under no circumstances should a HINF deceased taxpayer case be closed with a TC 59X, until verification has been secured that the income reported for the year of death or prior, or has been reported on another return (i.e. spouse, fiduciary, etc.).

  13. If the taxpayer died during or after the delinquent year, take the following actions:

    If And Then
    The tax liability meets the requirement for "IMF Little or No Tax Due" . See IRM 5.19.2.6.4.5.3 For CSCO and AM Employees,

    1. After receipt of a death certificate or per CC INOLES a date of death is obtained, input TC 540 using CC REQ77 on the year of death.

    2. Input TC 590 cc 77 using CC FRM49 on the delinquent years.

    3. Input TC 591 cc 75 using CC FRM49 on year following the taxpayer's death.

      Note:

      If a credit balance remains on the account, you must follow all credit balance procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    4. Update AMS of closing actions including date of death and tax computation.

    For ACS and ACSS Employees,

    1. After receipt of a death certificate or per CC INOLES a date of death is obtained, input TC 540 using CC REQ77 on the year of death.

    2. Input TC 590 cc 27 using CC FRM49 on the delinquent year(s).

      Note:

      ACS/ACSS Managers have the option to enter history code RD90,27 or return to employee to input on IDRS.

    3. Input TC 591 cc 25 using CC FRM49 on year following taxpayer's death.

      Note:

      Reminder, if a credit balance remains on the account, you must follow all credit research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Research.

    4. Update AMS of closing actions including date of death and tax computation.

    5. If the account is on ACS, enter history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    For FA Employees,

    1. After receipt of a death certificate or per CC INOLES a date of death is obtained, input TC 540 using CC REQ77 on year of death.

    2. Input TC 590 cc 20 using CC FRM49 on the delinquent year(s).

    3. Input TC 591 cc 20 using CC FRM49 on year following taxpayer's death.

      Note:

      Reminder, if a credit balance remains on the account, you must follow all credit research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8.

    4. Update AMS of closing actions including date of death and tax computation.

    5. If the account is on ACS, enter history code "TOC0,21,RDPND" .

    The tax liability exceeds the requirement for "IMF Little or No Tax Due" refer to IRM 5.19.2.6.4.5.3 For CSCO, and AM Employees,

    1. After receipt of a death certificate or per CC INOLES a date of death is obtained, input TC 540 using CC REQ77 on the year of death.

    2. If the TIN or EIN is not provided by the executor/administrator or spouse, then research IDRS CC NAMEE or NAMES to secure a possible TIN/EIN.

    3. If an EIN is found, research CC BMFOL to verify a Form 1041 return has been filed. If the return is filed, input a TC 591 cc 75 on the deceased taxpayer's delinquent module.

    4. If a cross reference SSN is found, research CC IMFOL to verify a return has been filed. If the return is filed, input a TC 591 cc 75 on the deceased taxpayer's delinquent module.

      Note:

      Reminder, if a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8.

    5. If no return was filed and a phone number is provided, ACSS and W&I CSCO must attempt two phone calls (one phone attempt for SBSE CSCO employees) before sending a 2268C letter.

      Note:

      AMS must be annotated that two telephone contacts (one phone attempt for SBSE CSCO employees) have been attempted before sending a letter.

    6. If you reach the survivor/executor or spouse, follow the procedures above in paragraph 4 (above the If And Then chart).

    7. If you contact by telephone and determine the taxpayer is not liable for a return, see IRM 5.19.2.6.4.5.1, IMF Response Taxpayer Not Liable.

    8. Input TC 591 cc 75 on the year following the taxpayer's death.

      Note:

      If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    9. If you contact by telephone and determine the taxpayer is liable for a return, request survivor/executor or spouse to file all delinquent tax returns. Input a delay "C08" using CC ASGNI. See IRM 5.19.2.6.1.1, Accelerate or Delay To TDI Status 03, for guidance on inputting delay.

    10. If unable to contact by telephone, send Letter 2268C, requesting all delinquent returns be filed. Input a delay "C08" using CC ASGNI, if appropriate.

    For ACS and ACSS Employees.

    1. After receipt of a death certificate or per CC INOLES a date of death is obtained, input TC 540 using CC REQ77 on the year of death.

    2. If the TIN or EIN is not provided by the executor/administrator or spouse, then research IDRS CC NAMEE or NAMES to secure a possible TIN/EIN.

    3. If an EIN is found, research CC BMFOL to verify a return has been filed. If the Form 1041 return is filed, input a TC 591 cc 25 on the deceased taxpayer's delinquent module and notate the cross reference TIN on AMS.

    4. If a cross reference TIN is found, research CC IMFOL to verify the return has been filed. If the return is filed, input a TC 591 cc 25 on the deceased taxpayer's delinquent module and notate the cross reference TIN on AMS.

    5. If no return was filed and a phone number is provided, ACSS and W&I CSCO must attempt two phone calls. If you reach the survivor/executor or spouse, follow the procedures above in paragraph 4 (above the If And Then chart).

      Note:

      AMS must be annotated that two phone attempts (one phone attempt for SBSE CSCO employees) have been attempted before sending a letter

    6. If you contact the Fiduciary/Executor/Administrator or spouse by telephone and determine the taxpayer is not liable for a return, see IRM 5.19.2.6.4.5.1, IMF Response Taxpayer Not Liable.

    7. If you contact the Fiduciary/Executor/Administrator or spouse by telephone and determine the taxpayer is liable for a return, request all delinquent tax returns be filed. Provide IRP income if necessary send individual IRP documents (Case Minor records) only. See IRM 5.19.2.6.4.5.4, IMF Taxpayer Liable for any additional procedures.

    8. If unable to contact the Fiduciary/Executor/Administrator or spouse by telephone, send Letter 2268C, requesting all delinquent returns be filed.

    9. For ACS Sites: Select Letter 2268C from AMS:
      Complete the first screen with the signature code and return address, select "Y" to view the letter, then submit.
      On the second screen, fill in the dates and other information required to complete the letter, then submit.
      LPAGE will appear on IDRS. Go to IDRS and change paragraph "R" to "S" , then enter on IDRS.

      Note:

      Save the paragraph selection "S" for this letter to CES (Correspondex Expert System) and use it for all Letter 2268C issuances.


      Return back to AMS and select EUP (Employee User Portal) and sign. Select TDS (Transcript Delivery System), and input all necessary information and transmit. (TDS will mail the income information to the taxpayer.)

    10. If a fiduciary, administrator or executor exists, input name, address and phone number. If an estate exists, input type of assets, court location, and docket number of the proceeding in a narrative on AMS. If the account is on ACS, input history code "TOR4,45,DECD " . For all HINF selection codes, if the account is on ACS, input history code "T0R4,24,CMMTS" .

    11. Update AMS of all pertinent information, including any applicable information listed below:
      Cross reference TIN if Form 1041 filed,
      Name and contact information of the executor or fiduciary, including:
      date of death,
      county in which the taxpayer died,
      and county in which the taxpayer resided,
      request if taxpayer owned property at time of death, and county of property and estimated value of property.

    12. If after the expired follow up date has passed and the taxpayer's income was not reported by the fiduciary, spouse, or benefactor, determine if the case meets ASFR referral criteria, see IRM 5.19.2.6.4.3 , IMF ASFR Referrals.

    13. If the account is on ACS, enter history code "TFRO,AOTO8000" .

    14. If the case does not meet ASFR criteria, see IRM 5.19.5.6.6, ACS Transfer Actions, for procedures to transfer to the queue.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    For FA Employees.

    1. After receipt of a death certificate or per INOLES a date of death is obtained, input TC 540 using CC REQ77 on the year of death.

    2. If the TIN or EIN is not provided by the executor/administrator or spouse, then research IDRS CC NAMEE or NAMES to secure a possible TIN/EIN.

    3. If an EIN is found, research CC BMFOL to verify a return has been filed. If the Form 1041 return is filed, input a TC 591 cc 40 on the deceased taxpayer's delinquent module and cross reference the EIN in a narrative on AMS.

    4. If a cross reference TIN is found, research CC IMFOL to verify a return has been filed. If the return is filed, input a TC 591 cc 40 on the deceased taxpayer's delinquent module and notate the cross reference TIN on AMS.

    5. If no return was filed and a phone number is provided, ACSS and W&I CSCO attempt two phone calls. You reach the Fiduciary/Executor/Administrator or spouse follow the procedures above in paragraph 4 (above the If And Then chart).

      Note:

      AMS must be annotated that two phone attempts (one contact for SBSE CSCO employees) have been attempted before sending a letter

    6. If you contact the Fiduciary/Executor/Administrator or spouse by telephone and determine the taxpayer is not liable for a return, see IRM 5.19.2.6.4.5.1, IMF Taxpayer Not Liable.

    7. Input TC 591 cc 20 on the year following the taxpayer's death.

    8. If you contact the Fiduciary/Executor/Administrator or spouse by telephone and determine the taxpayer is liable for a return, request survivor/executor or spouse to file all delinquent tax returns. Provide IRP income, if necessary.

      Note:

      Send individual IRP documents (Case Minor records) only.

    9. If unable to contact the Fiduciary/Executor/Administrator or spouse by telephone, send a Letter 2268C. Requesting all delinquent return(s) to be filed.

    10. Update AMS of all pertinent information, including date of death, county in which the taxpayer died, and the county in which the taxpayer resided.

    11. If a fiduciary, administrator or executor exists, input name, address and phone number.

    12. If an estate exists, Update AMS with type of assets/property, estimated value of asset/ proper, court location, and docket number of the proceeding.
      If the account is on ACS, enter history code "TOR4,45,DECD" . For all HINF selection codes, if on ACS input history code "TOI5,45,CMMTS" .

    13. If after the expired follow up has passed and the taxpayer's income was not reported by the fiduciary, spouse, or benefactor, determine if the case meets ASFR referral criteria, see IRM 5.19.2.6.4.3 , IMF ASFR Referrals. If the account is on ACS, enter history code "TFR0,AOTO8000" .

    14. If the case does not meet ASFR criteria refer to IRM 5.19.5-9 for guidance on transferring to the Queue.

    Note:

    If a credit balance remains on the account, you must follow all credit balance procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8 , Credit Balance Overview.


  14. If the taxpayer died before the delinquent year, take the following actions:

    If AND Then
    For CSCO and AM Employees, A return has been filed in the year of death under the spouses SSN,

    1. After receipt of a death certificate or per INOLES a date of death is obtained, input TC 540 using CC REQ77 on the year of death.

    2. If there is an open RD module in the year of death, input a TC 594 CC 84 on the deceased taxpayer's module, notate the cross reference TIN on AMS.

    3. Input TC 591 cc 75 using CC FRM49 on the delinquent year.

    4. Update AMS of findings and actions taken.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    A Form 1041 return has been filed in the year of death,

    1. After receipt of a death certificate or per INOLES a date of death is obtained, input TC 540 using CC REQ77 on the year of death.

    2. Input TC 591 cc 75 using CC FRM49 on the delinquent year, notate the cross reference EIN on the Form 1041.

    3. Update AMS with findings and action taken.

    Note:

    If a credit balance remains on the account, you must follow credit balance research before closing the module with a TC 590, 591 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    A return has not been filed in the year of death under the deceased or spouse's SSN or a Form 1041,

    1. After receipt of a death certificate or per INOLES a date of death is obtained, input TC 540 using CC REQ77 on the year of death.

    2. Input a TC 591 cc 75 on the delinquent year.

    3. Advise that income reported on deceased taxpayer's TIN should be reported under the TIN of the person or entity receiving the income.

    4. If telephone number is available, ACSS and W&I CSCO must make two phone attempts (one phone attempt for SBSE CSCO employees) to the third party before sending a Letter 2268C to the Estate using the address of record, include the IRP supplement. Request all delinquent returns be filed, and a copy of the death certificate if it was not previously obtained or CC INOLES does not show a date of death.

    5. Update AMS with findings and action taken. ACSS and W&I CSCO annotate the two phone attempts (one phone attempt for SBSE CSCO employees) made before sending the letter.

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    For ACS and ACSS Employees, A return has been filed in the year of death under the spouses SSN,

    1. Input TC 540 using CC REQ77 on the year of death.

    2. If there is an open RD module in the year of death, input a TC 594 cc 34 on the deceased taxpayer's module and indicate the cross reference TIN/EIN in a narrative on AMS.

    3. Input TC 591 cc 25 using CC FRM49 on the delinquent year.

    4. Document comments with closing actions including taxpayer's date of death in a narrative on AMS.
      If the account is on ACS, input history code "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    A Form 1041 return has been filed in the year of death,

    1. Input TC 540 using CC REQ77 on the year of death.

    2. Input TC 591 cc 25 using CC FRM49 on the delinquent year.

    3. Update AMS with closing actions including taxpayer's date of death.
      If the account is on ACS, input history code, "TOC0,21,RDPND" or "TOS0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8 , Credit Balance Overview.

    A return has not been filed in the year of death under the deceased or spouse's SSN or a Form 1041,

    1. Input TC 540 using CC REQ77 on the year of death.

    2. Input a TC 591 cc 25 on the delinquent year.

    3. Advise that income reported on deceased taxpayer's TIN should be reported under the TIN of the person or entity receiving the income.

    4. If telephone number is available, ACSS and W&I CSCO must make two phone attempts (one phone attempt for SBSE CSCO employees) to the third party before sending a Letter 2268C to the Estate using the address of record, include the IRP supplement, requesting all delinquent returns to be filed.

    5. Update AMS of all pertinent information, including date of death, county in which the taxpayer died, and county in which the taxpayer resided. ACSS and W&I CSCO annotate the two phone attempts (one phone attempt for SBSE CSCO employees) made before sending the letter. Document the following information, if applicable:
      If a fiduciary, administrator or executor exists, document their input name, address and phone number.
      If an estate exists, input type of assets/property, estimated value of property/assets, court location, and docket number of the proceeding in a narrative on AMS.
      If the account is on ACS, enter history code "TOR4,45,DECD" .

    6. If the follow-up date has expired and the taxpayer's income was not reported by the fiduciary, spouse, or benefactor, and the net tax exceeds ($2,500 for a W&I employee's case) or ($1,500 for an SBSE employee's case), refer the case to Exam. Refer to Exam using a Form 3449 attaching IRP Documents and any other pertinent information.

    7. Input a TC 595 cc 32.

    8. Update AMS of actions taken.
      If the account is on ACS, enter history code TOR4,21,CMNTS.

    9. If unable to close the account per step 5 above, and the account is on ACS, transfer the case to the QUEUE via "TFQU,AOTO7000 " .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    For FA Employees. A return has been filed in the year of death under the spouse's SSN,

    1. Input TC 540 using CC REQ77 on the year of death.

    2. If there is an open RD module in the year of death, input a TC 594 cc 23 on the deceased taxpayer's module including the cross reference SSN.

    3. Input TC 591 cc 20 using CC FRM49 on the delinquent year.

    4. Update AMS of closing actions including taxpayer's date of death.
      If the account is on ACS, enter history code, "TOC0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

    A Form 1041 return has been filed in the year of death,

    1. Input TC 540 using CC REQ77 on the year of death.

    2. Input TC 591 cc 20 using CC FRM49 on the delinquent year.

    3. Update AMS of actions taken including taxpayer's date of death in a narrative on AMS. If the account is on ACS, input ACS history code, "TOC0,21,RDPND" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8.

    A return has not been filed in the year of death under the deceased or spouse's SSN or a Form 1041.

    1. Input TC 540 using CC REQ77 on the year of death.

    2. Input a TC 591 cc 20 on the delinquent year.

    3. Advise that income reported on deceased taxpayer's TIN should be reported under the TIN of the person or entity receiving the income.

    4. If telephone number is available, ACSS and W&I CSCO must make two phone attempts (one phone attempt for SBSE CSCO employees) to the third party before sending a Letter 2268C to the Estate using the address of record, include the IRP supplement, ask that all delinquent returns be filed.

    5. Document comments all pertinent information, including date of death, county in which the taxpayer died, and county in which the taxpayer resided in a narrative on AMS. ACSS and W&I CSCO annotate the two phone attempts (one phone attempt for SBSE CSCO employees) made before sending the letter.

    6. If a fiduciary, administrator or executor exists, input name, address and phone number. If an estate exists, input type of assets/property, estimated value of property, court location, and docket number of the proceeding in a narrative on AMS.
      If the account is on ACS, enter history code "TOR4,45,DECD" .

    7. If the follow-up date has expired and the taxpayer's income was not reported by the fiduciary, spouse, or benefactor, and the net tax exceeds ($2,500 for a W&I employee's case) or ($5,000 for an SBSE employee's case) refer the case to Exam via Form 3449 and attach IRP Documents and include any other pertinent information. Input a TC 595 cc 32, update in a narrative on AMS. If the account is on ACS, enter history code TOR4,21,CMNTS.

    8. If unable to close the account per step 5 above. If the account is on ACS, transfer the case to the QUEUE "TFQU,AOTO7000" .

    Note:

    If a credit balance remains on the account, you must follow all credit balance research procedures before closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8, Credit Balance Overview.

  15. For TDI Status 03 cases that have an associated module with a balance due module(s), refer to IRM 5.19.1.4.3 , Deceased Taxpayers.

5.19.2.6.4.5.7  (02-15-2011)
IMF Response Taxpayer Incarcerated

  1. Use this section to determine actions needed on Incarcerated Taxpayer accounts.

    If Then
    Taxpayer provides prison address,

    1. Update address on IDRS using CC ENREQ including prison identification number.

    2. See IRM 5.19.2.6.4.5, IMF Determining Liability, for additional guidance.

    Prison Address is provided by a third party,

    1. If a third party (e.g. practitioner, new occupant, former spouse) provides a new address, DO NOT update Master File until address can be verified by taxpayer or Power of Attorney.

    2. Send letter 3064C or other appropriate letter to the Prison Address and include Form 8822 Change of Address.

    Note:

    Do not send tax returns, forms or transcripts to prison addresses.

    No new address is provided. Follow procedures in IRM 5.19.2.6.7.2, Third Party Contact and Responses.

5.19.2.6.4.5.8  (02-15-2011)
IMF Response Federal Employee/Retiree Delinquent Investigation (FERDI)

  1. Use this section to determine FERDI liability.

  2. Verify the taxpayer’s claim that he or she is not liable to file a tax return by researching CC IRPTR or SUPOL.

  3. Advise the taxpayer of the results of your research.

  4. Calculate tax based on the filing status and number of exemptions the taxpayer states he or she has, or if you don’t have this information, based on one exemption (single or married filing separate).

    If Then
    Taxpayer is NOT liable to file a tax return (i.e. not enough income to file). See IRM 5.19.2.6.4.5.1, IMF Response Taxpayer Not Liable (Income Below Filing Requirements).
    Taxpayer will receive a refund. See IRM 5.19.2.6.4.5.2, IMF Refund Due.
    Return was previously filed under a spouse’s TIN. See IRM 5.19.2.6.4.5.10, IMF Response Taxpayer Previously Filed.
    Taxpayer needs help determining income received. See IRM 5.19.2.6.4.5.4, IMF Taxpayer Liable.
    There is a net tax due. Reminder: Always attempt to secure full payment with the return. See IRM 5.19.2.6.4.5.4, IMF Taxpayer Liable.
    The taxpayer indicates they cannot pay the balance due in full. See IRM 5.19.18, Federal Employee/Retiree Delinquency Initiative (FERDI).
    The income meets the requirements for Little or No Tax Due. See IRM 5.19.2.6.4.5.3, IMF Little or No Tax Due.

5.19.2.6.4.5.9  (02-15-2011)
IMF Response Taxpayer Will File (Correspondence Only)

  1. This section provides guidance for working accounts when taxpayer indicates return will be filed (i.e. records in hands of accountant, waiting for additional information, etc.):

    Note:

    If telephone number is available, ACSS and W&I CSCO must make two phone attempts (one phone attempt for SBSE CSCO employees) before sending a letter as stated below. Document the phone attempts on AMS as appropriately.

    If Then
    Account is in Notice Status 02,

    1. Send a 2267C or other appropriate letter. Advise the taxpayer that failure to file by the specified date could subject the taxpayer to a fine and/or criminal penalties and of a possible Substitute for Return processing.

    2. If the taxpayer does provide a date, do not allow more than 60 days. Enter a history item "TPPFmmdd" (Taxpayer Promised to File) on CC TXMOD with mmdd indicating the target date for filing or enter history on AMS documenting the target date.

    3. If the taxpayer does not provide a date, allow 45 days.

      Note:

      If the correspondence does not specify a date, do not input mmdd.

    4. Input a "C08" using CC ASGNI, see IRM 2.4.27 for command code input. To accelerate to ACS, see IRM 5.19.2.6.1.1, Accelerate or Delay To TDI Status 03 for guidance.

      Note:

      If the account has a subsequent balance due issue, ensure all STAUPs and delays are consistent.
    Account is TDI Status 03.

    1. Send a 2267C or other appropriate letter. Advise the taxpayer that failure to file by the specified date could subject the taxpayer to a fine and/or criminal penalties and of a possible Substitute for Return processing.

    2. If the taxpayer does provide a date, do not allow more than 60 days. Enter a history item "TPPFmmdd" (Taxpayer Promised to File) on CC TXMOD with mmdd indicating the target date for filing or enter history on AMS documenting the target date.

    3. If the taxpayer does not provide a date, allow 45 days. For ACS Support employees see IRM 5.19.2.6.4.5.4, IMF Taxpayer Liable, follow the chart in paragraph 5.

      Note:

      If the correspondence does not specify a date, do not input mmdd.

    4. For "ACS-Support" employees only, update AMS comments with information, including the date the taxpayer specified to file.
      If the account is on ACS, enter history code, "TOI7,XX,TFQU" (XX = follow-up date which is 30 days beyond the specified date to file).

  2. When needed or requested provide taxpayer with missing income information from our internal sources. Use CC IRPTR/SUPOL with the appropriate definer, the TDS system to request income supplements.

    Note:

    Do not edit taxpayer information per Delegation Order 11-2.

  3. When needed or requested, provide the required tax forms if available. Tax form requests are available through SERP or Intranet. If the taxpayer has access to the Internet, inform him/her forms can be found at: http://www.irs.gov/formspubs/. You can provide the Toll Free number for forms 1-800-829-3676.

    Note:

    On AMS, "ELITE" can be used to mail forms directly to the taxpayer's address on entity.

5.19.2.6.4.5.10  (02-15-2011)
IMF Response Taxpayer Previously Filed Return

  1. The purpose of this section is to assist in locating previously filed returns.

  2. If the taxpayer indicates he/she was the secondary spouse on a joint return, see IRM 5.19.2.6.6.1.2, IMF-TIN and Entity Problem, Taxpayer Filed as Spouse on Joint Return.

  3. If the response indicates a return was filed less than ten weeks ago, and your initial research does not indicate a TC 150 has posted, refer to the table below for guidance:

    If Then
    Account is in Notice Status 02,

    1. Allow time for the return to post by inputting a delay of 8 weeks, using a "C08" on CC ASGNI. See IRM 2.4.27. Input of the delay will prevent the module from proceeding to TDI status or delays a subsequent notice.

    2. Update AMS of actions taken.
    Account is in TDI Status 03.

    1. For CSCO/AM employees only, input IDRS history item(s) or enter AMS comments stating the date specified by the taxpayer.

    2. For ACS Support employees only, document information provided on AMS comments. If the account is on ACS, enter history code "OADT,45,CMNTS" .

    3. For ACS Call-site or FA employees only, ask the taxpayer for the following information and document the date return was filed, total tax, and amount of tax/refund due (if known by the taxpayer) on AMS comments. If the account is on ACS, enter history code "OADT,45,CMNTS" .


  4. If the response indicates a return was filed more than ten weeks ago, research IDRS and follow guidelines below.

    If Then
    Return has posted to module (TC 150), Take no action.
    AP150 or PN150 has posted to the account, Take no action.
    RJ 150 or UNP 150 has posted to the account, Take no action.
    Return posted under another TIN or name,

    • Control or refer case, see IRM 5.19.2.6.6 , Return Delinquency TIN and Entity Research.

    • See IRM 5.19.2.6.6.1, TIN and Entity Problems, or

    • See IRM 5.19.2.6.6.2, Return Delinquencies Due to Posting Errors.

    Return posted to different tax period (same TIN),

    • Control or refer case, see IRM 5.19.2.6.6 , Return Delinquency TIN and Entity Research.

    • Transfer to the appropriate Accounts Management Unit and notate on the routing slip "Return posted to incorrect tax period" .

    • Input a TC 594 cc 83/33/22.
    Taxpayer submitted payment with return or cancelled check was submitted and encoder information matches the notice,

    1. If the payment is not on the module, follow the procedures in IRM 21.5.7, Payment Tracers.

    2. If the procedures for Payment Tracers lead you to an account module with the return posted, then follow the procedures above for a return posted under another TIN, Name or Tax Period.

    3. If the payment is on the module, follow the procedures in paragraph 5 below and request a copy of the return from the taxpayer.
     
    Taxpayer submitted payment with return or cancelled check was submitted and encoder information does not match the notice,

    1. Research the account module listed on the encoder information (TIN, MFT and Tax Period) to see if the return posted here.

    2. If the return did post here, then follow the procedures above for a return posted under another TIN, Name or Tax Period, and follow the procedures in IRM 21.5.7, Payment Tracers.

    3. If the procedures for Payment Tracers lead you to an account module with the return posted, then follow the procedures above for a return posted under another TIN, Name or Tax Period.

    4. If the procedures for Payment Tracers does not lead you to an account module with the return posted, follow the procedures in paragraph 5 below and ask the taxpayer for a copy of the return.

    		 
    Return or copy of return is in a Source Document Suspense File (SDSF). Process return, see IRM 5.19.2.6.4.5.12, IMF Response With Original Return.  

  5. If the response indicates a return was filed more than ten weeks ago and none of the conditions in paragraph 4 above, request a copy of the tax return. Advise the taxpayer to re-sign and date the return with the current date. In addition, remind the taxpayer to ensure the correct current address is on the return, whether it is a copy or original return. Proceed with the procedures below.

    If Then
    Account is in Notice Status 02,

    1. Instruct the taxpayer to send a copy of the return and set a deadline of 30 days from the day you are closing the case.

    2. Send a 2269C or other appropriate letter to advise the taxpayer we could not find their return and please send us a copy of their return.

    3. Input a history item on IDRS (using CC ACTON "TP2Fmmdd" with mmdd indicating the target date) or enter history on AMS explaining the target date provided to the taxpayer to file their copy.

    4. Input delay "C08" using CC ASGNI (see IRM 2.4.27). To accelerate the account to ACS, see IRM 5.19.2.6.1.1, Accelerate or Delay to TDI Status 03. Note: If also working a balance due issue, make sure any STAUPs and delays are equal.

    Account is in TDI Status 03.

    1. Instruct the taxpayer to send a copy of the return and set a deadline of 30 days from the day you are closing the case.

    2. Send a 2269C (use LT26 if you are in ACS) or other appropriate letter to advise the taxpayer we could not find their return and please send us a copy of their return.

      Note:

      If you send an LT26 letter, it automatically sets a 10-day deadline.

    3. Input a history item on IDRS (using CC ACTON "TP2Fmmdd" with mmdd denoting the target date) or enter history on AMS documenting the deadline date provided to the taxpayer to file their copy.

    4. For "ACS/FA/ACSS" employees only, document the information secured along with the deadline date for filing on AMS comments. See steps 5 & 6 for appropriate ACS closing code.

    5. If the case meets ASFR criteria, see IRM 5.19.2.6.4.3, IMF ASFR Referrals. If account is on ACS, enter history code, "TOI7,XX,ASFR" (XX = follow-up date which is 30 days beyond the deadline to file).

    6. If the case does not meet criteria for ASFR, see IRM 5.19.2.6.4.3, IMF ASFR Referral. If the account is on ACS, enter ACS history code- "TOI7,XX,TFQU" (XX = follow-up date which is 30 days beyond the deadline to file).

5.19.2.6.4.5.11  (02-15-2011)
IMF Response Insufficient

  1. This section pertains to responses that are insufficient to resolve.

  2. When additional information is needed to resolve the case, determine if the taxpayer is liable or not, see IRM 5.19.2.6.4.5.1, IMF Response Taxpayer Not Liable (Income Below Filing Requirements) or see IRM 5.19.2.6.4.5.4, IMF Taxpayer Liable.

  3. If the notice response is blank or has only a signature,

    If Then
    Account is in Notice Status 02,

    1. Input a delay "C08" using CC ASGNI, see IRM 2.4.27. To accelerate account to ACS or to delay to next status, see IRM 5.19.2.6.1.1, Accelerate or Delay To TDI Status 03, for guidance. (Do not delay PC-B notices.)

      Note:

      This delay code will allow any detached information to post before the next notice cycle.

    2. Destroy the notice.
    Account is in TDI Status 03. Destroy the Notice.

  4. If taxpayer is in bankruptcy, see IRM 5.19.2.6.4.1, IMF Special Handling, for processing procedures.

5.19.2.6.4.5.12  (02-15-2011)
IMF Response with Original Return

  1. This section provides the instructions to process original taxpayer returns.

  2. See IRM 5.19.2.6.4.1, IMF Special Handling for special situations such as bankruptcy, criminal investigation, etc. before continuing to paragraph 3.

  3. Review original returns for any of the following conditions, and take the appropriate actions:

    Note:

    A faxed return is considered an original filed return.

    If Then

    1. The taxpayer files a potential frivolous (lacking a legal basis or legal merit, not serious, not reasonably purposeful) return, see IRM 3.11.3.7.1.4, Frivolous Filer/Non Filer Return, for referral criteria. If the case meets "frivolous filer" criteria,

    1. Input TC 595 cc 82/32 and refer to:
      Ogden Compliance Services
      ATTN: FRP, MS 4450
      1973 N. Rulon White Blvd.
      Ogden, UT 84404

    2. Document AMS comments of pertinent information.

    3. For "ACS/Field Assistance/ACS-Support" employees only, if account is on ACS, enter history code "TOR3,25,CMNTS" .

    4. Notate on correspondence or return, "Already seen by Collections (CSCO or ACSS)" before routing.

    The taxpayer sends in a return that just states they had no income, no tax due, or not liable, Prepare the return for processing per guidelines in paragraph 7below.
    A TC 150 is already on the account. See IRM 5.19.2.6.4.5.13, IMF Response with Copy of Return(s).

  4. Refer all ASFR (ASGNI 8000) or "-L" Freeze (TC 420) responses with:

    1. TC 150 for $.00 with the literal "SFR" , Tax Class 2/ Doc code 10, and julian date 887 in the DLN to the ASFR function, whether or not a TC 290 has posted to the account. Assign to the appropriate ASFR site. To find the appropriate ASFR or ASFR Recon site, see IRM 5.19.2.6.4.3, IMF Automated Substitute for Return Program (ASFR) Referrals.

    2. The julian date is 888, or it may become an Exam case if it has julian date 887 with an -L freeze, open TC 420 and TC 150 for $.00 with the literal "SFR" , with Tax Class 2/ Doc Code 10 in the DLN to Exam function. See IRM 5.19.2.6.4.2, IMF Examination Referrals, for additional guidance.

    Note:

    If a joint return is received and the primary TIN has no ASFR (ASGNI 8000) or -L (TC 420) SFR, however there is ASFR (ASGNI 8000) or -L freeze on the secondary TIN, continue perfecting the return for processing, shown below. Make a photocopy of the return to send to ASFR or Exam function (see appropriate IRM sections on referrals as stated above). You must indicate on the referral that the original return was sent for processing and a photocopy of the return is being provided for further action for the open ASFR (ASGNI 8000) or -L (TC 420) SFR on the secondary TIN.

  5. Compare the TIN, name, tax period and MFT on the return with the notice or inquiry on various posting errors:

    Note:

    For AM Call Site CSR's only, if you identify a TIN & Entity problem or Return Delinquency posting error and you are unable to resolve the case, see IRM 5.19.2.6.6.2, Return Delinquencies Due to Posting Errors.

    If And Then
    The taxpayer's return posted to the correct TIN, but the RD Notice TIN is incorrect and no returns have posted to the RD Notice Module. For CSCO and AM Employees,

    1. Input a TC 591 cc 75 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must address prior to closing the module with a TC 590, 591 or 593. See IRM 5.19.2.6.8 , Credit Balance Overview.

    2. Destroy the Return.
    For ACS and ACSS Employees,

    1. Input a TC 591 cc 25 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must see IRM 5.19.2.6.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Destroy the Return.

    3. Document AMS of actions taken.

    4. If the account is on ACS, enter history code "TOC0,21,59125" or "TOS0,21,59125" .

    For FA Employees,

    1. Input a TC 591 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must see IRM 5.19.2.6.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Destroy the Return.

    3. Document AMS with actions taken, if appropriate.

    4. If the account is on ACS, enter history code "TOC0,21,59120" .

    The Taxpayer's return has not posted to the correct TIN, but the RD Notice TIN is incorrect and no returns have posted to the RD Notice Module. For CSCO and AM Employees,

    1. Input a TC 591 cc 75 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must see IRM 5.19.2.6.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Go to Paragraph 7 below and prepare the return for processing.

    3. Document AMS of actions taken.
    For ACS and ACSS Employees,

    1. Input a TC 591 cc 25 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must see IRM 5.19.2.6.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Go to paragraph 7 below and prepare the return for processing.

    3. Document AMS of actions taken.

    4. If the account is on ACS, enter history code "TOC0,21,59125" or "TOS0,21,59125" .

    For FA Employees,

    1. Input a TC 591 cc 20 using CC FRM49.

      Note:

      If a credit balance remains on the account, you must see IRM 5.19.2.6.8, Credit Balance Overview before closing the module with a TC 590, 591 or 593.

    2. Go to Paragraph 7 below and prepare the return for processing.

    3. Document AMS of actions taken, if appropriate.

    4. If the account is on ACS, enter history code "TOC0,21,59120" .

    The Taxpayer's return indicates a correct TIN, and the RD Notice TIN is incorrect. A return has posted under the incorrect RD notice module TIN,

    1. Transfer to the appropriate Accounts Management Unit. Document AMS of actions taken.

    2. Notate on the routing slip "TIN Related Problem" .

     
    Return was filed under an incorrect TIN or Tax Period. For CSCO and AM employees,

    1. Input a TC 594 cc 83 using CC FRM49.

    2. Transfer to the appropriate Accounts Management Unit, notate on the routing slip "TIN Related Problem" or "Return posted to incorrect tax period" .

    3. Document AMS of actions taken.

    		  
    For ACS and ACSS Employees,

    1. Input a TC 594 cc 33 using CC FRM49.

    2. Transfer to the appropriate Accounts Management Unit. Notate on the routing slip "TIN Related Problem" or "Return posted to incorrect tax period" .

    3. Document AMS of actions taken.

    4. If on ACS, enter history code "OADT,21,59433" .

    		 
    For FA Employees,

    1. Input a TC 594 cc 20 using CC FRM49.

    2. Transfer to the appropriate Accounts Management Unit. Notate on the routing slip "TIN Related Problem" or "Return posted to incorrect tax period" .

    3. Document AMS of actions taken.

    4. If the account is on ACS, enter history code "OADT,21,59420" .

    		 

  6. If the return was filed jointly, research the secondary TIN on the return to determine if the module was created with a previous TC 140 or TC 474 or if a return has posted.

    1. If a return has not posted to the Primary TIN, and the secondary TIN module has not been created with a previous TC 140 or TC 474 proceed to paragraph 7 below and prepare the return for processing.

      Note:

      If you receive a return on a module that has not been created with a previous TC 140 or TC 474, the taxpayer may be a "first time filer" (account is not on IDRS or Masterfile) or income was below filing requirement, do not input a TC 59X on IDRS, only annotate TC 59X on the return and forward for processing.

    2. If a return has not posted to the Primary TIN, and the Secondary TIN module has also been created with a previous TC 140 or TC474, follow the guidelines below:

      If Then
      For CSCO and AM Employees,

      1. Verify credits and transfer to the correct TIN.

      2. Input a TC 594 cc 84 on the secondary SSN using CC FRM49 and cross reference the Primary TIN.

        Note:

        Input the cross reference TIN on CC FRM 49.

      3. Go to Paragraph 7 below and prepare the return for processing.

      4. Document AMS of actions taken, as appropriate.
      For ACS and ACSS Employees,

      1. Verify credits and transfer to the correct TIN.

      2. Input a TC 594 cc 34 on the secondary SSN using CC FRM49 and cross reference the Primary TIN.

        Note:

        Input the cross reference TIN on CC FRM49.

      3. Go to Paragraph 7 below and prepare the return for processing.

      4. Document AMS of actions taken, as appropriate.

      5. Enter history code "TOC0,21,59434" or "TOS0,21,59434" .

      For FA Employees.

      1. Verify credits and transfer to the correct TIN.

      2. Input a TC 594 cc 21 on the secondary SSN using CC FRM49 and cross reference the Primary TIN.

        Note:

        Input the cross reference TIN on CC FRM 49.

      3. Go to Paragraph 7 below and prepare the return for processing.

      4. Document AMS of actions taken, as appropriate.

      5. If the account is on ACS enter history code "TOC0,21,59421" .

    3. If the secondary TIN has a return posted, follow the guidelines below:

      Note:

      Since the return is posted on the secondary TIN and you received a joint return, the TC 594 will be input on the primary TIN.

      If And Then
      The TC150 amount matches the Total Tax on the Return, For CSCO and AM Employees,

      1. Verify credits and transfer to the correct TIN.

      2. Input a TC 594 cc 84 using CC FRM49. Enter the cross reference TIN on CC FRM 49.

      3. Document AMS of actions taken.

      4. Destroy the return.
      For ACS and ACSS Employees,

      1. Verify credits and transfer to the correct TIN.

      2. Input a TC 594 cc 34 using CC FRM49.

        Note:

        Enter the cross reference TIN on CC FRM 49.

      3. Document AMS of actions taken.

      4. Destroy the return.

      5. If the account is on ACS, enter history code "TOC0,21,59434" or "TOS0,21,59434" .

      For FA Employees,

      1. Verify credits and transfer to the correct TIN.

      2. Input a TC 594 cc 21 using CC FRM49.

        Note:

        Input the cross reference TIN on CC FRM 49.

      3. Document AMS of actions taken.

      4. Destroy the return.

      5. If the account is on ACS, enter history code "TOC0,21,59441" .

      The Primary TIN on the return is not in an open RD Status,

      1. Verify credits and transfer to the correct TIN.

      2. Destroy the return.

      3. Document AMS of actions taken.
      The posted return is not Joint (FS- 2) or the TC 150 amount does not match the total tax on the return. For CSCO and AM Employees,

      1. Input a TC 594 cc 84 using CC FRM49.

        Note:

        Input the cross reference TIN on CC FRM 49.

      2. Transfer to the appropriate Accounts Management Unit and notate on the routing slip "Spouse filed originally as single and now is filing as Joint" or "Total Tax does not match the TC 150" .

      3. Document AMS of actions taken.
      For ACS and ACSS Employees,

      1. Input a TC 594 cc 34 using CC FRM49.

        Note:

        Input the cross reference TIN on CC FRM 49.

      2. Transfer to the appropriate Accounts Management Unit. Notate on the routing slip "Spouse filed originally as single and now is filing as Joint" or "Total Tax does not match the TC 150" .

      3. Document AMS of actions taken.

      4. If the account is on ACS, enter history code "TOC0,21,59434" or "TOS0,21,59434" .

      For FA Employees,

      1. Input a TC 594 cc 21 using CC FRM49.

        Note:

        Input the cross reference TIN on CC FRM 49.

      2. Transfer to the appropriate Accounts Management Unit. Notate on the routing slip "Spouse filed originally as single and now is filing as Joint" or "Total Tax does not match the TC 150" .

      3. Document AMS of actions.

      4. If account on ACS, enter history code "TOC0,21,59421" .

      The Primary TIN on the return is not in an open RD Status,

      1. Transfer to the appropriate Accounts Management area. Notate on the routing slip "Spouse filed originally as single and now is filing as Joint" or "Total Tax does not match the TC 150" .

      2. Document AMS of actions taken.

  7. If more than one return is secured, such as a balance due and refund return, attach a Form 13133 to the "balance due" return to ensure the balance due tax return is processed and/or expedited prior to the refund due return.

    Note:

    The intent of this requirement is for the balance due return to post prior to allow the refund return(s) to offset to the balance due return. Refer to IRM 5.1.11.5, Secured Returns for additional guidance.

  8. If none of the above conditions are present, code and prepare all secured return(s) for processing, including secured returns on module(s) with no previous TC 140 or TC 474 to create the RD module. On all secured returns sent for processing, annotate in "Red" pen/pencil, a TC 59X in the upper left-hand corner of the return and input on IDRS a TC 59X with appropriate closing code as stated below.

    Note:

    If you receive a return on a module that has not been created with a previous TC 140 or TC 474, the taxpayer may be a "First time filer" (no account on IDRS or Masterfile), or income was below filing requirement, DO NOT input a TC 59X on IDRS, only annotate TC 59X on the return and forward for processing.


    1. Close the RD module with the appropriate TC 59X and closing code as follows:

      If And Then
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡

      Note:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      		For CSCO and AM Employees,

      1. Input a TC 595 cc 82 using CC FRM49.

      2. Document AMS with: date the return was filed, balance due or refund amount, full paid or Installment agreement request.
      For ACS, ACSS and FA Employees,

      1. Input a TC 595 cc 32 using CC FRM49.

      2. Document AMS comments with:

      • Date the return was filed,

      • Enter the amount of balance due or refund,

      • Indicate if module will be full paid or installment agreement request, and

      • If account on ACS, enter history code "OADT,21,59532" .

      Taxable return (return shows a tax liability before prepaid credits) For CSCO and AM Employees,

      1. Input a TC 599 cc 94 using CC FRM49 with block indicator BB.

      2. Document AMS with:
        date the return was filed,
        balance due or refund amount,
        full paid or Installment agreement request.

      For ACS and ACSS Employees,

      1. Input a TC 599 cc 44 using CC FRM49 with block indicator BB.

      2. Document AMS with:
        date the return was filed,
        balance due or refund amount,
        full paid or Installment agreement request.

      3. If the account is on ACS, enter history code "OADT,21,59944" .

      For FA Employees,

      1. Input a TC 599 cc 20 using CC FRM49 with block indicator BB.

      2. Document AMS with:
        date the return was filed,
        balance due or refund amount,
        full paid or Installment agreement request.

      3. If the account is on ACS, enter history code "OADT,21,59920" .

      Non-taxable return (Return shows no tax liability before prepaid credits) For CSCO and AM Employees,

      1. Input a TC 599 cc 96 using CC FRM49 with block indicator BB.

      2. Document all closing actions including amount of refund on AMS.
      For ACS and ACSS Employees,

      1. Input a TC 599 cc 46 using CC FRM49 with block indicator BB.

      2. Document closing actions including amount of refund on AMS.

      3. If the account is on ACS, enter history code "OADT,21,59946" .

      For FA Employees,

      1. Input a TC 599 cc 21 using CC FRM49 with block indicator BB.

      2. Document AMS of actions taken, including amount of refund.

      3. If the account is on ACS, enter history code "OADT,21,59921" .

    2. Determine the appropriate status of the return secured for processing. Code and input the appropriate TC 59X code in the upper left margin of the return. Include "Process as Original" at the top center margin of all "SIGNED" returns. All editing must be done in "Red" pen/pencil only If the signature is not on the jurat signature line(s) and is shown in the "Third Part Designee or Preparer’s" signature area, this does not constitute a valid signature, therefore process as an unsigned return as stated below. .

      Note:

      If utilizing "Process as Original" labels ensure they are placed in the top center margin and do not cover any part of the dollar sign (on left side) or DLN (on right side) otherwise it will impact processing in other functions.

    3. If an unsigned return is secured, forward it for processing. Submission Processing will correspond with the taxpayer for a signature. However, you must code and input the appropriate TC 59X code in the upper left margin of the return.

      Note:

      Do NOT write "Process as Original" at the top of the return, as it may cause confusion to Submission Processing.

    4. If the return is unsigned and the taxpayer's signature is on the notice response or correspondence, attach it to the back of the return and forward for processing. Cross out the notice/correspondence (not the signature) and notate "TDI complete, Notice/Correspondence attached for signature only" . Code and input the appropriate TC 59X code in the upper left margin of the return.

    5. If the taxpayer requests relief from Failure to File, Failure to Pay, or Failure to Deposit penalties due to reasonable cause or is deceased, put this information on a note and attach to the front of the return, to inform "Code and Edit" this type of request from the taxpayer is attached to the return. Do not input any Computer Condition Codes (CCC) on the return. Document AMS regarding request for adjustment due to Reasonable Cause.

    6. In Red pen/pencil, code the return for processing by perfecting the Entity (correct and complete the SSN, name, address, or tax period) if necessary, see IRM 3.11.3.9, Taxpayer Identification Information, for additional editing procedures. Verify the IRS received date is correct. If there is no IRS received date or Campus operation received date on the front page of the tax return, then in red ink edit the IRS received date on the front page of the tax return. See IRM 3.11.3.5.2, Determining the Received Date.

      Reminder:

      If you have received a faxed return, use the date on the fax for the IRS received date. Notate on the return, "Process as Original Faxed Return" .

    7. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    8. If the secured return is an original return (not a signed copy) and the address on the return does not match what is on the Master File, update Master File using CC ENREQ, if it is determined that the return has the most current address.

      Note:

      Many times a taxpayer will use their address at the time of the return period, which might not be their current address, especially when sending copies of a return that you are processing as an original. Research the Master File to see if the address matches. If the Master File shows a different address, determine which address is more current by checking for a return address on the envelope or correspondence, or if the address is shown as a previous address on entity. Perfect the Entity on the return per the most current address. If the address on the return is the most current, then update the entity(s) on IDRS if appropriate.

    9. If the return is a copy of the original and Master File shows a more current address, edit the return to match Master file. See note above.

    10. If the taxpayer provides a telephone number on a response to a CP 59/CP 516/CP 518 notice, tax return, or RD correspondence, update the entity(s) with the new telephone number.

    11. If the taxpayer indicates "copy" on the return and you are sending the return to processing as the original, circle out the word "copy" on the return.

    Note:

    If any type of return is forwarded to another Service Center for processing, all return delinquency issues and coding, along with the preparation of the return for processing must be completed at the receiving site, and only the "Return" is sent to the Submission Processing center for processing.

  9. If the taxpayer requests an installment agreement (IA), refer to pre-assessed IA procedures in IRM 5.19.1, Balance Due, or transfer to the appropriate Balance Due unit/office if you do not work Balance Due cases.

  10. If the taxpayer response is for backup withholding, see IRM 5.19.2.6.4.4, "Backup Withholding" .

    Note:

    Refer the backup withholding issue "only" to the appropriate W&I or SBSE site per IRM 5.19.2.6.4.4, Backup Withholding.

  11. Once all necessary actions are completed, code and send the return for processing, see paragraph 8 above.

    Note:

    Per IRM 3.11.154.3.4 and IRM 25.6.4 Statute clearance is not necessary on original returns secured by Compliance employees. Do not route any original return secured to the Statute Control Unit or any returns prepared under the authority of IRC 6020(b).

5.19.2.6.4.5.13  (02-15-2011)
IMF Response with Copy of Return(s)

  1. This section provides guidance for working accounts when the taxpayer sends a copy of a return. Research IDRS to determine if the original return has posted and follow below.

    If And Then
    The original return has posted to the correct period and TIN and the amount of tax, taxable income, etc. matches what is on IDRS An open delinquency is present on the secondary taxpayer's account, See IRM 5.19.2.6.6.1.2, IMF - TIN and Entity Problem, taxpayer Filed as Spouse on Joint Return.
    No open delinquency is present on the primary and/or secondary taxpayer's account, Whether there is an original signature or not, destroy the copy of the return.
    The original return has posted to an incorrect TIN or period or the amount of tax, taxable income, etc. does not match what is shown on IDRS  

    1. Control or refer the case per IRM 5.19.2.6.6, Return Delinquency Research Cases.

    2. See IRM 5.19.2.6.6.1.1, IMF TIN and Entity Problems, for procedural guidance.

    1. The original return has not posted and was filed less than 10 weeks ago, or

    2. An RJ150/UP150 has posted to the module,

    		  

    1. This is a "refund" return, see IRM 5.19.2.6.4.5.12, IMF Response with Original Return.

    2. This is "not a refund" return, input a TC 594 cc 33, 58, 22 or 83 (refer to Exhibit 5.19.2-3 for appropriate closing codes) using CC FRM49, do not use block indicator BB. File the copy of the return with correspondence attached in the Source Document Suspense File (SDSF).

    3. Module shows RJ150/UP150, contact the appropriate area (Rejects or Unpostables) for resolution. File the copy of the return with correspondence attached in the Source Document Suspense File (SDSF).

    4. Update AMS with the date of original return filed.

    5. If the account is on ACS, enter history code "OADT,45,CMNTS" .

    1. The original return has not posted and was filed more than 10 weeks ago or,

    2. The taxpayer does not state when the original return was filed (consider the return filed more than 10 weeks ago.)

    		 RJ150/UP150 has not posted to the module, See IRM 5.19.2.6.4.5.12, IMF Response with Original Return.

5.19.2.6.4.5.14  (12-08-2009)
IMF Response Taxpayer Unable to File

  1. If the taxpayer states he/she is unable to file, provide the necessary information (i.e. Forms, IRP Docs, etc.), if available.

  2. If you are able to provide the information, see IRM 5.19.2.6.4.5.9, IMF Response Taxpayer Will File-Correspondence or see IRM 5.19.2.6.4.5.4 , IMF taxpayer Liable.

  3. If you are unable to provide the information, first attempt to close using one of the three conditions below. Otherwise, proceed to paragraph 4 below.

    • "Income below Filing Requirements" see IRM 5.19.2.6.4.5.1.

    • "Refund Due" see IRM 5.19.2.6.4.5.2.

    • Meets P-5-133 criteria for "Little or No Tax Due" , see IRM 5.19.2.6.4.5.3.

  4. If you are unable to close the module as mentioned in paragraph 3 above, follow the table below for guidance:

    If Then
    Account is in Notice Status 02,

    1. See IRM 5.19.2.6.1.2, Accelerate to Compliance Territory Office, for further guidance.

    2. Update AMS of actions taken and findings.
    Account is in TDI Status 03.

    1. See IRM 5.19.2.6.1.2, Accelerate to Compliance Territory Office, for further guidance.

    2. Document AMS of actions taken.

5.19.2.6.5  (12-08-2009)
BMF Return Delinquency Responses and Inquiries

  1. This subsection provides guidance on the procedures for processing Business Master File (BMF) Return Delinquency (RD) notice responses and inquiries.

  2. Document account of actions taken as stated per the specific IRM section.

  3. For additional information regarding BMF RD modules, see Document 6209, Chapter 11 Collection/BMF Taxpayer Delinquency Investigation (TDI) Explanation, at http://serp.enterprise.irs.gov/databases/irm.dr/current/6209.dr/6209ch11.5.1.htm.

5.19.2.6.5.1  (02-15-2011)
BMF Special Handling Responses

  1. Review for the following conditions:

    If And Then
    Taxpayer response is threatening or indicates a potentially dangerous situation (online or in correspondence), Account is in Notice Status 02 or TDI Status 03,

    1. Assign to 8150 using to Command Code (CC) ASGNB.

    2. Refer to IRM 5.1.3.1, "Potentially Dangerous Taxpayer" (PDT).

    3. Report all incidents to Treasury Inspector General Tax Administration (TIGTA), by telephone. TIGTA can be reached at 1-800-366-4484. TIGTA will inform you where to send the case.

    4. For cases in Notice Status 02, input delay C08 using CCASGNB. To accelerate to Automated Collection System (ACS), see IRM 5.19.2.6.1.1, Accelerate or Delay To TDI Status 03..

    5. Update Account Management Services (AMS) indicating the case was sent to TIGTA.

    6. For cases in TDI Status 03, for "ACS/Field Assistance (FA)/ACS-Support (ACSS)" employees only, input comments in a narrative on AMS.

    7. If the account is on ACS, input TOR3,60,TIGTA.
      After the investigation is completed, a determination will be made, and the employee through their Director will be informed of the disposition of the case in a memo.

    8. If TIGTA states this isn't a threat then work the case appropriately.

    • Taxpayer indicates in correspondence they refuse to file a return or provides information based on claims of a frivolous return,

      Note:

      Refer to IRM 4.10.12.1.1 for definitions of frivolous arguments,

      or

    • Taxpayer is on the telephone and refuses to file a return or gives information based on frivolous claims, or

    • Taxpayer states they refuse to file a return or provide information on a constitutional basis, objects to filing, cites the Fifth Amendment, or states a violation of their constitutional rights,

    		Account is in Notice Status 02 or TDI Status 03,

    1. Input TC 595 cc 82/32 and refer to:
      Ogden Compliance Services
      ATTN: FRP, m/s 4450
      1973 N. Rulon White Blvd.
      Ogden, UT 84404

    2. Update AMS of all secured pertinent information.

    3. If the account is on ACS, enter history code "TOR3,25,CMNTS" .

    4. Notate on correspondence "Already seen by Collections (CSCO or ACSS)" before routing.

     
    Open Criminal Investigation (CI) control or TC 914. Account is in Notice Status 02,

    1. Input delay "C03" (three week) using CC ASGNB (see IRM 2.4.27).

    2. Route notice to CI Branch.

    3. If CI returns the case, resolve through correspondence.

      Note:

      DO NOT telephone the taxpayer.

    		 
    Account is in TDI Status 03.

    1. Update AMS indicating case was sent to CI.

    2. For "ACS/ACSS/FA" employees only, document AMS of all pertinent information.

    3. Route to CI Branch

    4. If the account is on ACS, enter "TOR3,25,CI or TC914" .

    5. If CI returns the case, resolve through correspondence.

      Note:

      DO NOT telephone the taxpayer.

    		 

  2. For potential fraud cases, refer to IMF Special Handling, see IRM 5.19.2.6.4.1. However, also consider referrals to CI for cases when indicators of fraud exist and there is more than six years of delinquent returns.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Caution:

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Do not close responses with Collection Case Code W–2, unless an employment tax return (Forms 941, 943 or 944) is secured or was previously filed for any quarter during the previous year. A case code is used to identify the type of notice to be issued. (See Document 6209 for Collection Case Codes.)

  4. Route "Power of Attorney" (POA) Forms 2848 or other tax authorization to the appropriate (Centralized Authorization File (CAF) team. See the state mapping table in IRM 21.3.71.6(5).

  5. If the taxpayer requests a visit from an IRS representative, see IRM 5.19.2.6.1.2, Accelerate to Compliance Territory Office.

  6. A bankruptcy stay does not prohibit gathering information from the taxpayer to determine the correct tax liability or sending the taxpayer information for the sole purpose of securing a return. If a return is secured, send a photocopy to the appropriate Insolvency/Bankruptcy area, along with a copy of any other pertinent information secured. Code the return for processing and input TC 599 cc 92/42 with BB and process.

  7. The 6020(b) program is the BMF equivalent to (IMF) Automated Substitute for Return (ASFR) program. The information for preparing the return comes from the taxpayer’s last return filed, a third party, or provided by the taxpayer. See IRM 5.18.2, regarding 6020(b) process and procedures or IRM 5.19.2.6.5.3, BMF Substitute for Return 6020(b) Program Referrals.

5.19.2.6.5.1.1  (12-08-2009)
Combat Zone BMF Procedures

  1. Section 7508 of the Internal Revenue Code (IRC) postpones the time that individuals have for performing certain tax related acts, including filing tax returns. These acts are postponed until at least 180 days after the taxpayer leaves the designated combat zone/qualified hazardous duty area/contingency operation ("Combat Zone" ). Generally, the IRS will not assess income tax or charge any penalty during the postponement period. The IRS will generally cease all enforcement activities against taxpayers in a Combat Zone during the postponement period.

  2. IRC Section 7508 applies to individual taxpayers, sole proprietors reporting their income on Schedule C of their individual tax return, estate or gift tax, as well as certain partnership entities. Nonetheless, the Service may provide administrative relief for certain qualified BMF taxpayers with military members serving in a combat zone/qualified hazardous duty area. Although BMF taxpayers are not entitled to time in the Combat Zone plus the 180-day (or more) postponement period, the Service can consider whether it is appropriate to waive any applicable penalties for that period due to reasonable cause. Note however, the Service does not have the authority to waive interest during the postponement period with regard to BMF taxpayers. In addition, the Service provides other administrative relief such as the suspension of collection activity during the period of time in which a postponement would occur if the BMF taxpayer qualifies. See paragraph 3 below for guidance to determine if a business meets criteria.

  3. To consider administrative Combat Zone relief to BMF taxpayers, the following conditions must be met:

    • The business is a partnership, sole proprietorship (except where the sole proprietorship is essentially Schedule C businesses of an individual income taxpayer) or a personal services corporation (e.g. doctor, dentist, Certified Public Accountant (CPA), etc.) where the key individual/partner is/or was in the combat zone, AND

    • The business had to CEASE operations from the time the key individual/partner entered the combat zone.

  4. To grant administrative Combat Zone relief to qualified BMF taxpayers, and to remove the RD modules from TDI notice status 02 and Status 03, take the following actions:

    • Input a TC 500 with the appropriate closing code. The input of the TC 500 will be identified on Integrated Data Retrieval System (IDRS) with -C freeze code.
      The following chart lists transaction code 500, closing codes for entry date, closing codes for exit date and identifies the designated combat zone.

      Transaction Code Closing Code (Entry date) Closing Code (Exit date) Designated Combat Zone
      500 52 53 Desert Storm Operation Joint Endeavor
      500 54 55 Bosnia/Yugoslavia/ Operation Allied Forces
      500 56 57 Iraq/Enduring Freedom Afghanistan

  5. No Contact by phone, notice or correspondence can be initiated while the key individual/partner of any taxpayer that meets the conditions in paragraph (2) above is in a combat zone. If the taxpayer contacts us, assist them with their issues. Inform them with a 2255C or other appropriate letter they ARE required to file their BMF return while in the combat zone and will NOT be given an additional 180 days after they exit the combat zone to file their current year and any delinquent returns. However, they can request relief from any penalties (excluding interest) that might be due based on reasonable cause. Otherwise, see IRM 5.19.2.6.5.4.3, BMF Taxpayer Liable.

  6. When determined the taxpayer is no longer in combat zone or the -C freeze was input in error, see IRM 5.19.1.4.10.11.3 for procedures to release the freeze on the account.

    If the freeze is And Then
    Set by the TC 500 with closing code 52, 54 or 56 on the module, The taxpayer has provided the exit date from the combat zone,

    • Input TC 500 on the module with the appropriate closing code 53, 55 or 57 using the combat exit date provided by the taxpayer.

    • Update AMS of actions taken.
    Set in error. TC 500 is present on the module.

    • Input TC 502 on module to reverse the TC 500.

  7. See IRM 5.19.1.4.10 and Publication 3 for additional guidance on Combat Zone.


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