5.19.10  Collection Operations Transcript Processing (Cont. 1)

5.19.10.5 
Balance Due Transcripts

5.19.10.5.9  (02-01-2014)
Duplicate Refund (DUPREF) Transcript

  1. Due to CADE2 programming, the DUPREF transcript has been eliminated.

  2. If an old DUPREF transcript appears on the Aged Case Listing, close the case with no further action.

5.19.10.5.10  (02-01-2014)
Verify Payment (VERFPYMT) and Electronic Spousal Payment (ELECSPPAY) Transcripts

  1. A VERFPYMT Transcript generates when a payment posts to a debit balance module and,

    • Credit balance is ≡ ≡ ≡ ≡ ≡ or more

    • A TC 570 posts along with the credit, creating an −R freeze

    • TC 670 with DPCs other than 05, or 15–24 will generate a transcript

    • The transcript is generated daily, if it qualifies for daily processing; otherwise it generates weekly.

  2. The module may also have a −B freeze created when a G− or −I freeze is present.

  3. The VERFPYMT issues in AM and those that meet Collection criteria (St. 6X, 22, 24, 26 or 53), prior to going to St. 12, are reassigned to Atlanta CSCO. Category code is "VERF" .

  4. Beginning in January 2014, taxpayers can submit payments electronically via a new system, ACH Debit, on IRS gov. ACH Debit interfaces with the Electronic Federal Tax Payment System (EFTPS). Taxpayers also make payments via EFTPS on the internet, by phone, or by credit card.

  5. An ELECSPPAY Transcript generates to Atlanta CSCO AMS (for WI only) when an electronic payment posts to the secondary taxpayer's account and the module meets certain conditions. The electronic payments include TC 670s with an EFT trace number beginning with 21, 22, 23, 26, and 27 (except paper checks converted for electronic processing (RS-PCC) and electronic levies).

  6. An ELECSPPAY Transcript generates when the following criteria is met.

    1. The payment posts to a module that contains no TC 150 (original or SFR) and there are multiple TC 594 cc 84s present with different cross reference SSNs, or

    2. Master File attempted to transfer the spousal payment to the primary taxpayer module where the joint liability should reside and
      • No account exists under the primary number
      • The transfer-to account is in the process of removal from Master File or is being merged
      • The transfer-to module has a posted return but is not in debit balance (Status is not 21 or greater).
      • A condition is present that will cause the transfer-in to unpost (i.e., a CI freeze is on the module).

  7. Tax examiners working these transcripts will determine if the payment has posted to the correct account and resolve the payment through research or by contacting the taxpayer.

5.19.10.5.10.1  (02-01-2014)
Processing VERFPYMT and Electronic Spousal Payment (ELECSPPAY)Transcripts

  1. Review the transcript module and resolve according to the following table. Update AMS history with the action taken, include the amount and date of the credit that caused the transcript to issue and the specific reason for the action that was taken. When closing the transcript, close the generic control base.

    If... Then...
    No credit is present and research indicates the credit refunded or is in the process of refunding See instructions below regarding refunded credits before continuing.
    No credit is present
    1. If −R is still present, input TC 571.

    2. Update AMS with the reason for credit resolution, i.e., assessment used the credit, credit was transferred or refunded.

    3. Close the transcript.

    There is an open control, with an earlier date, assigned to another Atlanta CSCO employee working a CP 86, CP 44 or other credit transcript Close the transcript to the other employee.
    There is an open control for one of the following:
    • Open AUR with TC 922, open control has category code "URP-" , "URP1" or "URPS"

    • −A freeze with open control, category code "XRET"

    Close the transcript.
    Other open control
    1. Contact the employee with the open control to determine if their action will resolve the credit.

    2. If so, close the transcript.

    Research of AMS history and IDRS indicate a pending action such as an assessment or credit transfer will resolve the credit Close the transcript.
    Payment that created the transcript is DPC 05 Close the transcript.
    Module has one of the following freezes: L−, −L, −V, −W, Z−, −Z, or −Y Close the transcript.
    Module has a V− freeze present Follow IRM 5.19.10.3.10, Generation of CP 44 and CP 188,
    Module has a B− freeze present Follow IRM 5.19.10.5.7, Notices of Potential Manual Penalty/Interest Adjustment (CP 86 and CP 186)
    Module has an A− freeze present Follow IRM 5.19.10.5.2, PMTEXPCSED Transcripts.
    For other freeze codes See IRM 21.5.6.4, Freeze Code Procedures.
    No freeze present Close the transcript.

  2. If payment is in the process of refunding and does not belong to the taxpayer, use CC NOREF to stop the refund. See IRM 21.4.1.4.110, Refund Intercept CC NOREF with Definer "P".

  3. If the payment refunded to the wrong taxpayer, follow erroneous refund procedures in IRM 21.4.5, Erroneous Refunds.

  4. If none of the criteria above is met, research RTR for the payment(s) to verify that the credit belongs to the taxpayer. RTR can also be researched for electronic payments, with the exception of credit card payments. See procedures in (5) for credit card payments.

    If... And... Then...
    Payment posted to the correct taxpayer or module  
    1. Input TC 571 to release the -R freeze, if present, and allow the credit to refund or offset.

    Payment posted to the incorrect taxpayer or module You can identify where the credit belongs Transfer the credit to the correct account. See IRM 21.5.8, Credit Transfers, if needed.
    You cannot identify where the credit belongs
    1. Ensure TC 570 is still present.

    2. Send Letter 1687C, Unidentified Payment/Credit, to the taxpayer who has the credit on their account.

    3. Give the taxpayer 30 days to respond from the current date.

    4. Monitor for 45 days.

    Taxpayer responds to Letter 1687C, Unidentified Payment/Credit The credit belongs to the taxpayer Transfer the credit per the taxpayer's request. See IRM 21.5.8, Credit Transfers.
    The credit does not belong to the taxpayer Transfer the credit to the XSF or URF per IRM 5.19.10.5.1, General Procedures for All Transcripts.
    There is no reply  

  5. A credit card payment can be identified by the number "6" in the fourth position of the EFT Trace Number that appears directly under the DLN of the TC 670. Position three and four of the Trace ID Number will be "01" . To research and resolve a credit card payment:

    1. Contact the EFTPS Accounting Technicians at 801-620-6930 or 801-620-6087.

    2. Provide the technician with the Electronic Funds Transfer (EFT) Trace number(s) of the payments in question and any other information requested. The fax number is 801-620-6206.

    3. Ask the EFTPS Accounting Technician to contact the credit card processor for resolution of a possible duplicate or misapplied payment.

    4. The Technician will confirm receipt of the faxed information. Monitor the case for two weeks after confirmation.

    5. When response is received, follow the table in (4) above to correctly resolve the payment.

    6. If there is no response from the technician after two weeks fax a second request, and monitor an additional two weeks.

    7. If no response after the second request or response does not provide the information needed to correctly apply the payment, transfer the credit to the XSF or URF per IRM 5.19.10.5.1, General Procedures for All Transcripts.

    8. See IRM 3.12.179.20, Electronic Federal Tax Payment System (EFTPS) and Credit Card and Electronic Funds Withdrawal Payments for more information.

5.19.10.5.11  (02-01-2014)
NOMRG-TDA Transcript (NM07)

  1. A NOMRG-TDA (NM07) Transcript with No-Merge RC 03 for IMF and No-Merge RC 10 for BMF will generate when both accounts being merged contain the following conditions within the same tax period:

    • Both accounts are in TDA/TDI (22, 24, 26) status and the Location Codes (Primary or Secondary) do not agree, or

    • The "TO" account is in a TDI Status and the "FROM" account has TDA modules for which there are no modules for the same MFT and TXPD in the taxpayer's account.

  2. Refer to Document 6209, Section 8C, No Merge Reason Codes for a complete list.

  3. In order to merge two related accounts, both BOD Codes must match.

  4. Document your actions and contacts on AMS for both TIN.

5.19.10.5.11.1  (10-15-2012)
Processing NOMRG-TDA Transcript

  1. Control the case on IDRS to category NMRG.

  2. Cases involving multiple taxpayers using the same Taxpayer Identification Number (TIN) are classified generally as mixed entity, Scrambled SSN cases, or True Scrambled SSN.

  3. Refer to IRM 21.6.2, Adjusting TIN-Related Problems, for detailed information.

  4. Reassign the control base to a specialized control number per IRM 21.5.2.3, Adjustment Guidelines – Research.

    If... Then...
    TIN is a scrambled SSN. See IRM 21.6.2.4.2.1(6), Telephone Inquiries Regarding MXEN, MXSP, IDT1, IDS1, IDT3, IDS3, IDT6, IDT8, IDT9, IDS9, and Scrambled Cases, on how to identify this type of account.
    1. Do not make corrections to the account.

    2. Enter history on AMS and close the case.

    Account has identity theft issues, identified by the presence of TC 971 AC 501 or 506. See IRM 10.5.3.2.5, Identity Theft Tracking Indicators.
    1. Do not make corrections to the account.

    2. Enter history on AMS and close the case.

    3. See IRM 5.19.1.9, Identity Theft – Overview.

    If it is a true No Merge (duplicate tax periods on the valid and invalid side and both carry a TC 150)
    1. Do not change the address and location code.

    2. Do not attempt to merge.

    3. Prepare Form 4442, Inquiry Referral, to the Inventory Control Manager (ICF).

    4. Enter the following history on AMS: "True duplicate filing condition. Case routed to ANSC Site Specialization" .

    Note:

    Route True NoMerge DUPF to the site Specialization hold number 0830105044 per IRM 21.6.2.4.1.4, Reassignment of NOMRG Cases due to Site Specialization.

  5. Analyze the account to determine which IRS operation or function should be contacted to advise them of the no merge issue (ACS, RO).

    If... Then...
    Both sides are in ST 22/22, 22/TDI or 22/24
    1. Contact the ACS Support Liaison on SERP Who/Where.

    2. Advise them to release the levy until after the merge.

    Both sides are in ST 26/26, 26/TDI or 26/24 and not assigned to an RO (The last two digits of the Collection assignment code on CC TXMOD are “00”.)
    1. No contact is necessary.

    2. Resume processing in (5) below.

    Both sides are in ST 26/26, 26/TDI or 26/24 and are assigned to an RO. The last two digits of the assignment number will be 01 – 99, (except 96).
    1. Refer to SERP Who/Where, RO by TSIGN/ZIP/STATE for contact information.

    2. Contact the assigned RO(s) by phone to notify them of the pending merge. If the RO does not answer, leave a message with a brief explanation, your name and telephone number.

    3. Continue processing the case.

    Accounts are in ST 22/26 Follow the procedures in boxes 1 through 3 above.
    One or both sides are in ST 72
    1. Contact Insolvency, see SERP Who/Where, Insolvency (Bankruptcy) National Field/Centralized Site Directory, to determine if the TC 520 is still open or should be closed.

    2. If Insolvency indicates the TC 520 should be closed, ask when the TC 521 will be input and monitor the account for that period.

    3. If the TC 520 is still open after monitoring or Insolvency indicates TC 520 is still open, do not attempt to merge.

    4. If unable to contact Insolvency and after leaving a message, you do not receive a response within 21 days, do not attempt to merge.

    5. Input AMS history and close the case.

    Both sides are in ST 24/24 or 24/TDI
    1. No contact is necessary.

    2. Resume processing in (5) below.

    One or both sides are in ST 60. Changes to the location code and merging of the account will cause the IA to default.
    1. To prevent a default notice from issuing, manually default the IA using CC IADFL. See IRM 2.4.30, Command Codes IAGRE, IAORG, IAPND, IAREV, IADFL, and, IADIS.

    2. Use Default Category “Other” and Suppress Default Indicator “1”.

    3. For Direct Debit Installment Agreements, (DDIA), check CC EFTAD per IRM 5.19.1.10.6.1, Requests to Skip a Payment, to turn off the next payment, if needed. Enter the bank information from CC EFTAD onto AMS for re-input to CC IAGRE after the merge.

    4. For Payroll Deduction Installment Agreements (PDIA), enter the payer information from the CC IAGRE onto AMS for re-input after the merge.

    5. Follow with CC STAUP 22 09.

    6. Update AMS history, "IA defaulted to merge TINs. Will reinstate IA after merge" .

  6. If the valid and invalid TINs are different numbers, use CC IMFOLE to research both the valid and invalid TINs. Determine which has the MOST CURRENT address and location code information. See IRM 3.13.5, Individual Master File (IMF) Account Numbers.

    If... Then...
    MOST CURRENT information is on the invalid TIN Continue processing in (6) below. Make the necessary changes to the valid TIN
    MOST CURRENT information is on the valid TIN
    1. Move the invalid TIN to an Internal Revenue Service Number (IRSN).

    2. IMPORTANT: Input CC IMFOLB to restore all retention modules to Master File on both sides. If retention modules are not returned to Master File prior to moving the account to the IRSN, those modules will no longer be accessible. The format for CC IMFOLB is the same as CC IMFOLT. See IRM 2.3.51.4, Restoring RRR Tax Modules to Master File.

    3. After CC IMFOLB input, monitor for the posting of TC 013 and TC 370 before proceeding.

    4. Use CC TMSSNI to order a temporary number. See IRM 2.4.59, Command Code TMSSN.

    5. Using CC ENREQ, input TC 041 on the invalid TIN to move it to the new IRSN.

    6. Make the following changes per (6) through (12) to the IRSN TIN before merging the account to the valid TIN.

  7. The following changes can be made with one input using CC ENREQ, with the exception of BOD code changes. BOD code changes should be done last. Document your actions and contacts on AMS for both TINs.

  8. The account addresses must match on both the invalid and valid TIN. Correct the address to match the MOST CURRENT account.

  9. Location codes must match. Verify the location codes on each account and make corrections, if needed.

  10. The name control must be valid per CC INOLES. If the name control on the invalid segment does not match the valid SSA name controls, you may need to validate the name to merge the accounts. Refer to Document 7071, Name Control Job Aid for Individual Master File (IMF) Taxpayers.

    • Only change the name for the most recent return filed.

    • Hyphenate the valid name with the invalid name.

    • Put a bracket before the last name.

    • Use the year of the return and the proper filing status (FS) from CC TXMOD or IMFOLT. This will generate a TC 013 on ENMOD.

  11. If the TIN requires correction, follow these procedures. If the invalid TIN is a different number than the valid TIN process as follows:

    1. Use CC INCHG on the invalid TIN to input the correct TIN.

    2. The above action will generate TC 011 on CC ENMOD. The name controls must match.

  12. If the four digit location code still does not match after CC ENREQ has posted, follow the procedures below. Change the CLC to match the MOST CURRENT account.

    1. Only the last two digits of the location code can be changed. Use CC ENREQ. If necessary, refer to the Universal Location Code (ULC) and Area Office (AO) in the Job Aid Book on SERP. Use CC ENREQ and Doc Code 50.

  13. In order to merge two related accounts, their BOD Codes must match. Make the necessary changes to the BOD Code on the MOST CURRENT account.

    1. Use CC REQ77 (overlaid on CC ENMOD). Input TC 971 AC 050.

    2. Use the CURRENT date as the transaction date and input the appropriate BOD Code.

  14. If the invalid TIN and valid TIN are the same number and none of the above conditions apply, input TC 041 via CC ENREQ.

  15. On the "FROM" account, the message is "MERGE IN PROGRESS-LOSING ACCOUNT" . On the "TO" account, the message is "MERGE IN PROGRESS-GAINING ACCOUNT" . It can take several weeks before the merge is complete. Monitor the module until the merge is complete.

  16. After the merge or resequencing transaction is input,

    1. If the account was in ST 22 or 26 prior to the merge, input CC STAUP 22 00 to return the account to it’s original status.

    2. If the account was in ST 60 prior to the merge, re-input the IA. Do not charge a reinstatement fee.

    3. Close your IDRS control base.

    4. On accounts dealing with ITINs, follow IRM 3.21.263.7.4, Merges Involving ITIN, to have the ITIN revoked.

5.19.10.5.12  (02-01-2014)
NOMRG − CPNL and REVAL − CPNL Transcript

  1. The "No Merge" is a result of the revalidation of the SSN. A complete transcript of both the "FROM" and "TO" accounts will generate when the "FROM" account contains a Civil Penalty Name Line and the name control of the Civil Penalty Name Line does not match the "TO" account name control. This is a No-Merge RC 19.

  2. Determine the correct name control through research of IDRS.

    1. Correct the name line and name control via CC INCHG.

    2. Use TC 040 for a correction to the valid TIN and TC 041 for a correction to the invalid TIN.

    3. Update AMS and close the case.

5.19.10.5.13  (05-01-2007)
Notice of No Merge TDA Module and NOMRG TDA Transcripts (CP 206)

  1. The CP 206 (Form 4179) Notice of No Merge TDA/Partial Payment Module, generates on the BMF accounts and the NOMRG TDA transcripts (Form 403) generates on the IMF accounts. An attempt is made to consolidate two separate accounts when the following conditions exist:

    • Both accounts have tax modules in TDA status (22, 24, or 26), and the TDA/TDI location codes differ, or

    • The "TO" account is in TDI status and the "FROM" account contains TDA modules for which no modules with the same MFT and tax periods are in the taxpayer’s account.

5.19.10.5.13.1  (05-01-2007)
Processing No Merge TDA Module and NOMRG TDA Transcripts (CP 206)

  1. Change the control base from "A" status to "B" status using Category Code NMRG.

  2. Initiate telephone contact with the affected operation (ACS, territory office, etc.) and record the results on the notice or transcript.

  3. Change the Territory Office Code using CC ENREQ; to the Collection Operation with the NOMRG TDA transcript. Follow-up in three cycles and proceed to (4) below.

  4. When the Location Code posts to IDRS:

    1. Forward BMF accounts to Entity Control.

    2. For IMF accounts, perfect the required entity fields using CC ENREQ and input TC 041 to merge the accounts. See IRM 5.19.10.5.11.1(5), Processing NOMRG-TDA Transcript.

5.19.10.6  (02-01-2014)
Combat Zone Accounts

  1. The IAT tools as listed in IRM 5.19.10.1, Compliance Services Collection Operation Transcript Overview must be used by Campus Compliance employees for procedures outlined in this IRM. When an action must be taken and an IAT tool is available, Campus Compliance employees with access to the tool are required to use it to complete the action.

    Note:

    If an IAT tool is not functioning properly or it is determined not to be appropriate due to a specific situation, the case should be worked without the tool, using IDRS. For more information on each tool as well as a job aid for each tool see the IAT Website.

  2. This subsection provides definitions and procedures for working combat zone (CZ) accounts. IRC 112 and IRC 7508 provide for certain tax benefits applying to individuals serving in a CZ. These provisions can be triggered by:

    • A Presidential Executive Order designating a CZ. The CZ period ends when the Executive Order is rescinded

    • The Department of Defense (DoD) may certify an area as being in direct support of military operations in a CZ.

    • The Secretary of Defense designates a military operation as a Contingency Operation (CO) in which members of the armed forces are or may be involved in military actions, operations or hostilities or a CO results from a call to active duty or retention on active duty during a war or national emergency declared by the President or Congress.

    • Congress passing a law designating an area as a Qualified Hazardous Duty Area (QHDA)

  3. The following IRC Sections are also CZ related:

    • IRC 2(a) (3), relating to the special rule where a deceased spouse was in missing status: See IRM 5.19.1.4.3, Deceased Taxpayers

    • IRC 692, relating to income taxes of members of the U.S. Armed Forces upon death. See IRM 5.1.7.9, Accounts of Taxpayers Who Serve in a Combat Zone

    • IRC 2201 relating to estates of members of the U.S. Armed Forces dying in a CZ or by reason of CZ incurred wounds, etc. See IRM 21.7.5.5.1, Background Information

    • IRC 4253 (d), relating to taxation of phone service originating from members of the U.S. Armed Forces in a CZ

    • IRC 6013 (f)(1), relating to a joint return where an individual is in missing status

  4. See IRM 5.19.10.6.1, Combat Zone Exclusion of Income, for information on military income.that is not taxable.

  5. See IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas, for information on taxpayers who qualify for the tax exclusions and a list of current combat zones.

    Note:

    Currently, the Service is not requiring proof of receipt of combat pay or hazardous duty pay for military personnel serving in direct support but outside a CZ, CO or QHDA.

  6. See IRM 5.19.10.6.4, Combat Zone Computation of Suspense Period, for the time periods allowed for the CZ suspense period.

5.19.10.6.1  (02-01-2014)
Combat Zone Exclusion of Income

  1. IRC 112 excludes from gross income certain pay an enlisted military member, warrant officer, or a commissioned warrant officer of the Armed Forces receives for active service:

    • In a CZ

    • While hospitalized as a result of wounds, disease or injury incurred while so serving in a CZ. This shall not apply for any month beginning more than two years after the date of the termination of combatant activity in such a zone.

  2. For commissioned officers, the amount of pay excluded is limited to the maximum enlisted amount per month, plus imminent danger/hostile fire pay. For additional information, see Publication 3, Armed Forces' Tax Guide.

  3. The exclusion from gross income is effective from the date of the CZ designation until the area is no longer designated as a CZ.

  4. Certain members of the Armed Forces outside the designated CZ can qualify for the CZ exclusion of the income. To qualify, they must:

    • Serve in direct support of military operations in the designated zone and

    • Qualify for imminent danger/hostile fire pay

  5. The exclusion for both enlisted personnel and commissioned officers is reflected on Form W-2, Wage and Tax Statement, prepared by the military member’s assigned Finance and Accounting Office.

  6. The DoD determines who serves in direct support of the designated CZ military operation and issues a Form W-2 correctly reflecting taxable income.

  7. Civilians may not exclude the income earned while working in a CZ unless they can qualify on Form 2555, Foreign Earned Income.

5.19.10.6.1.1  (04-28-2008)
Combat Zone Incorrect W–2 and Interest on Refunds

  1. Military personnel having problems with Forms W–2 must contact their employer. The IRS does not correct Form W–2, Wage and Tax Statement, information.

  2. Taxpayers must provide corrected Forms W–2 with an amended return before a balance due account can be adjusted.

  3. Taxpayers filing their federal income tax return on or before the extended due date of that return after applying the deadline postponement provisions are allowed credit interest on returns and claims without regard to the 45 day processing period. Do not enter the "Amended Claims Date" when the CZ indicator is present.

5.19.10.6.2  (02-01-2014)
Combat Zone Qualified Individuals and Areas

  1. IRC 7508 postpones the time for performing time-sensitive acts, such as filing tax returns or paying tax for the period of time for which IRC 7508 applies, plus 180 days. The IRS will not assess income tax or charge any penalty or interest during the postponement period. IRS ceases all enforcement activities during the postponement period.

  2. IRC 7508 applies to individuals serving or working in areas listed below. See also IRM 5.19.10.6(2), Combat Zone Accounts. These individuals include:

    • Those serving in the Armed Forces in a CZ, CO or QHDA

    • Those serving in the Armed Forces in direct support of a CZ but outside of the CZ, CO or QHDA and they receive hostile fire/imminent danger pay or combat pay

    • Other civilians working or serving in support of the Armed Forces in these areas, such as civilians working for DoD contractors

    • Others within the scope of IRC 7508(e) are Red Cross personnel, industrial technicians, civilian employees of the Federal government in specialist categories, scientists and news correspondents or journalists

  3. Haiti: Executive Order number 13529 and the Secretary of Defense designated Haiti, a CO (Operation Unified Response) to provide relief in the wake of the earthquake of January 12, 2010. Effective dates for Operation Unified Response are January 13, 2010 through June 1, 2010. TC 500 closing codes are 52 and 53.

  4. Afghanistan: Executive Order number 13239 designated Afghanistan, the water and the airspace above, as a CZ (Operation Enduring Freedom) on September 19, 2001. Personnel stationed in the areas listed are considered in direct support. TC 500 closing codes are 56 and 57.

    Afghanistan
    Djibouti qualifies as being in direct support as of July 1, 2002
    Israel, January 1, 2003 to July 31, 2003
    Jordan qualifies as being in direct support as of September 19, 2001
    Kyrgyzstan qualifies as being in direct support as of September 19, 2001
    Mediterranean Sea, east of 30 degrees East longitude, March 19, 2003 to July 31, 2003
    Pakistan, qualifies as being in direct support as of September 19, 2001
    Philippines, Republic of, qualifies as being in direct support as of January 9, 2002
    Somalia qualifies as being in direct support as of January 1, 2004. As of January 1, 2007, Somalia airspace and the water area of Somali Basin are considered as being in direct support.
    Syria qualifies as being in direct support as of January 1, 2004
    Tajikistan qualifies as being in direct support as of September 19, 2001
    Turkey, Incirlik Air Base, qualifies as being in direct support September 21, 2001 to December 31, 2005.
    Uzbekistan qualifies as being in direct support as of September 19, 2001
    Yemen qualifies as being in direct support as of April 10, 2002

  5. Yugoslavia/Bosnia: Executive Order number 13119 designated the following areas as a CZ (Operation Allied Force) on March 24, 1999 and/or were designated a qualified QHDA by Public Laws 104–117 or 106–21, including air space above. TC 500 closing codes are 54 and 55.

    Adriatic Sea, and the Ionian Sea north of the 39th parallel
    Albania
    Bosnia-Herzegovina, QHDA from November 21, 1995 to October 31, 2007
    Croatia, QHDA from November 21, 1995 to October 31, 2007
    Federal Republic of Yugoslavia (Serbia/Montenegro/Kosovo)
    Macedonia, QHDA from November 21, 1995 to October 31, 2007

  6. Executive Order number 12744 designated the Arabian Peninsula areas as a CZ (Operation Desert Storm) on January 17, 1991. Military personnel serving in support of such allied forces are eligible for all CZ related tax benefits. TC 500 closing codes are 52 and 53, if entry date is prior to September 19, 2001. If entry date is September 19, 2001 and later, use TC closing codes 56 and 57.

    Arabian Sea, north of 10 degrees North latitude and west of 68 degrees East longitude
    Bahrain
    Egypt, March 19, 2003 to April 20, 2003
    Gulf of Aden
    Gulf of Oman
    Iraq
    Jordan, as of March 19, 2003
    Kuwait
    Oman
    Persian Gulf
    Qatar
    Red Sea
    Saudi Arabia
    Turkey, effective January 1, 2003 to December 31, 2005
    United Arab Emirates
    The airspace above and waters adjacent to all such locations referenced above for this entry pertaining to Operation Desert Storm

    Note:

    See Publication 3, Armed Forces' Tax Guide, for additional information and QHDA that qualify for similar relief.

  7. Beginning in 2012, military orders or other documentation are required for entry dates of 2010 and later. See below for exceptions. Documentation is not required for dates provided by the DoD.

  8. When working taxpayer correspondence, telephone calls, e-mails and Combat Zone transcripts with entry dates of 2010 or later, follow procedures below for requesting documentation. For CP 04 responses follow IRM 5.19.10.6.5.5, Responses to CP 04 Notice.

    If... Then...
    AMS history indicates that documentation was already received for the dates provided.
    1. Do not request documentation.

    2. Continue processing using the appropriate procedures in IRM 5.19.10.6, Combat Zone Accounts or IRM 5.19.10.7, Combat Zone Transcripts.

    A DoD (TC 500 DLN carries 8s or 9s) entry date is present on CC IMFOLE and taxpayer dates provided are within 60 days of the DoD date.
    CC IRPTR or CC TRDBV shows military income for the year of entry or for the prior year.

    Exception:

    Income from a pension or interest/dividend income from a bank or credit union.

    CC IRPTR or CC TRDBV shows that taxpayer was:
    • Red Cross

    • Journalist or news reporter

    • State Department employee

    • Other Federal agency employee

    Exception:

    Income from a pension or interest or dividend income from a bank or credit union

    None of the above apply
    1. Update AMS with all entry and exit dates provided, plus CZ area, type of service and organization name and phone number, if provided. Do not input the dates to IDRS.

    2. Request documentation from the taxpayer to support their time served or worked in a CZ. See below for a list of acceptable documentation.

    3. Taxpayer should also provide their entry/exit dates and the area of deployment, when they send their response.

    4. For transcripts, correspondence or e-mail, if a telephone number is available, make two attempts to contact the taxpayer by phone. If unable to contact, send Letter 2761C, Request for Combat Zone Service Dates.

    5. Give the taxpayer 45 days from the current date to respond.

    6. See (9) regarding return mailing address and account control.

    7. If account is in notice status, input CC STAUP to the next notice for 9 cycles.

    8. If account is in ST 22, move to R6 for 60 days and stop any levy action.

  9. Follow below for providing a mailing address to the taxpayer:

    If... Then...
    SB/SE CSCO, App98 or ACS
    1. Provide the address for WI Atlanta CSCO for taxpayers to mail their documentation.

    2. Do not open a control base.

    WI CSCO working balance due or Combat Zone correspondence
    1. Provide the taxpayer with your return mailing address, telephone number and a fax number for the taxpayer to return documents.

    2. Open a control base and suspend the account for 60 days to await the taxpayer's response.

    AMRH and WI CSCO working Combat Zone transcripts
    AM working Combat Zone e-mail

  10. Follow below for taxpayer responses and no replies:

    If... Then...
    Taxpayer provides the dates and documentation that support their time in a CZ.
    1. For Combat Zone transcripts worked by WI CSCO and AMRH follow IRM 5.19.10.7.2.4(2), Taxpayer Responds to Letter 2761C.

    2. For AM working Combat Zone e-mail follow IRM 5.19.10.6.5.4(7), Combat Zone E-mail.

    Taxpayer does not provide documentation, documentation does not support their claim, or there is no reply. See below for more information regarding documentation.
    1. Remove any TC 500 on the account that was entered for this CZ period. Refer to IRM 5.19.10.7.2.3(5), Resolving Combat Zone Accounts, for correction procedures.

    2. Follow (13) below.

    Letter 2761C is undelivered Follow appropriate undelivered procedures in IRM 5.19.10.7.2.5, Taxpayer Does Not Respond to Letter 2761C.

  11. Documentation must indicate that the taxpayer served or worked in support of or was deployed to a current CZ, CO or QHDA and must show a qualified area as listed above.

    • Any official documents received that show the area, theater or military operation and the approximate entry date, is acceptable.

    • Civilians will usually provide a Letter of Authorization or a letter from their employer.

    • Letters from the military that state that the taxpayer served in a "tax-free zone" or "Combat Zone Tax Exclusion Area (CZTE)" are acceptable.

    • If documentation does not list an exit date but only indicates tour of duty or length of duration in approximate number of days, the exit date provided by the taxpayer is acceptable.

    • Do not input an exit date that is in the future, but enter that information on AMS history.

    • Refer to IRM 5.19.10.7.2.4, Taxpayer Responds to Letter 2761C, for additional information regarding what dates to use.

    • Receipt of combat pay, back pay or stopgap pay is not proof that the taxpayer is qualified for the CZ exclusions. Taxpayer must be serving or working in a current CZ, CO or QHDA or in direct support to qualify.

  12. Types of documents might include:

    • Military orders

    • Letters of authorization (civilians)

    • Hospital discharge papers

    • Discharge from Active Duty

    • Official letterhead memorandum from a military department or civilian employer

    • Request and Authorization for TDY Travel of DoD Personnel (civilians and military)

    • Other official types

  13. If documentation does not qualify the taxpayer:

    1. Inform him or her that they must be serving or working in an area currently designated by the President, the Secretary of Defense or Congress as a CZ, CO, or QHDA or in direct support of such area.

    2. If taxpayer disagrees, advise them to check with their legal assistance office or offer to send them Publication 3, Armed Forces’ Tax Guide.

    3. For correspondence, send Letter 2761C.

5.19.10.6.2.1  (10-15-2012)
Civilian Contractors Working in Support of the Combat Zone

  1. Civilian taxpayers working with U.S. Armed Forces in combat zones should contact the IRS about their work status to receive special tax benefits. Benefits include:

    • Extensions of time to file tax returns, pay taxes, and claim refunds

    • Suspension of audits and collection activities

    • Suppression of notices

    Example:

    American Red Cross employees, industrial technicians, federal government specialists, scientists, and accredited correspondents are among workers who may benefit.

  2. Taxpayers, their spouses, or authorized representatives can notify the IRS by:

    • E-mail to combatzone@irs.gov

      Note:

      No social security numbers (SSN) should be used in an e-mail.


    • Telephone: (800) 829-1040 (within the U. S.)

    • Regular mail to the address where the worker files federal tax returns, marking the top of tax returns and IRS notices in red with "Combat Zone."

      Note:

      Annotate "Combat Zone" on the envelope used to provide the IRS with notice.

  3. The notification should include the following:

    • Name

    • Stateside address

    • Date of birth

    • Date of deployment to the CZ

  4. To obtain benefits, taxpayers should notify IRS when they are deployed to a CZ and when they are no longer serving in a CZ. The IRS suspends account activity for the period of time the taxpayer is working in the CZ and for 180 days thereafter.

  5. Beginning in 2012, military orders or other documentation are required for entry dates of 2010 and later. If the taxpayer is notifying the IRS by telephone of a 2010 entry date, follow IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas.

  6. Deadline extensions apply to income, estate or gift taxes, employment tax, and excise tax returns of individuals, generally Schedule C filers. Extensions do not apply to corporate income taxes, employment taxes, or excise taxes of an entity, such as an "S" corporation or limited liability company (LLC), where the owner or main person is in the CZ. Extensions do not apply to information returns, such as Form W-2. See IRM 5.19.10.6.5.2, Combat Zone BMF Procedures, for more information on the administrative relief that the IRS may be provide in special situations.

  7. Taxpayers working in combat zones also have additional time to:

    • File petitions with the Tax Court

    • Contribute to an IRA

    • Allow a tax credit or refund by the IRS

  8. Civilian taxpayers do not qualify for exclusion of income earned while working in a CZ. CZ military pay exclusion applies only to members of the U.S. Armed Forces. However, civilians, who are not federal employees, may qualify for the foreign earned income and foreign housing exclusion and the foreign housing deduction on Form 2555, Foreign Earned Income.

  9. Refer civilian taxpayers in support of the CZ to the following IRS publications for further information:

    • Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad

    • Publication 15-B, Employer's Tax Guide to Fringe Benefits

    • IRS Web Site

5.19.10.6.2.2  (02-01-2014)
Filing Returns for Combat Zone or Contingency Operation Participants

  1. A taxpayer serving in a CZ or CO can choose to file their return before the end of their extension period. They must file their return in accordance with instructions provided by the Armed Forces.

  2. If there is someone acting on behalf of the person in a CZ or CO and they do not have a power of attorney from the person specifying they can handle federal tax matters, one of the following can be attached to the tax return:

    • A general power of attorney (POA) or other statement signed by the deployed person authorizing them to act on their behalf

    • The nondeployed spouse may act as POA for their deployed spouse by submitting Form 2848, Power of Attorney and Declaration of Representative. The nondeployed spouse must sign their name, their spouse's name and also sign as representative in Part II.

  3. If it is not possible for the spouse of someone serving in a CZ or CO operation to obtain the person's signature on a joint return, power of attorney form, or other signed authorization to act on their behalf, the IRS accepts a written statement explaining their spouse is serving in a CZ or CO. The statement must be signed by the spouse filing the tax return and attached to the return.

5.19.10.6.2.3  (04-28-2008)
Other Military Operations and Tax Relief

  1. Tax relief can be administratively given to military personnel serving in other areas of the world not designated as a CZ or where we have troops participating in a U.N. operation. Guidance is provided on a case by case basis when relief is granted.

  2. Taxpayers are not subject to the failure-to-file penalty during the period of an extension of time to file. Taxpayers are also not subject to the failure-to-pay penalty during the period of an extension of time to pay; however, interest continues to accrue.

  3. These accounts are identified by the MOP/UN Indicator on CC ENMOD:

    1. Input "1" in the "MOP/UN" field on CC INCHG to turn on this indicator.

    2. Input "9" in the "MOP/UN" field on CC INCHG to turn off this indicator.

5.19.10.6.3  (10-15-2012)
Combat Zone Freeze Code

  1. The CZ –C freeze code is an entity freeze code that remains on the account for historical purposes, even with input of accurate entry and exit dates.

  2. The −C freeze can be set by a TC 500 in the following ways:

    • DoD – A monthly systemic download places a TC 500 with an entry or exit date

    • Processing of an original or amended tax return where the taxpayer self-identifies by writing "Serving in Desert Storm/Shield, Bosnia, former Yugoslavia, Allied Force, Afghanistan, Enduring Freedom, or Haiti"

    • Manual input of TC 500

  3. The following chart lists TC 500 closing codes for entry date, closing codes for exit date and identifies the designated CZ:

    TC 500 Closing Code (Entry Date) TC 500 Closing Code (Exit Date) Designated Combat Zone
    52 53 Desert Storm Operation Joint Endeavor/ Haiti/Operation Unified Response
    54 55 Bosnia/Yugoslavia/ Operation Allied Forces
    56 57 Iraq/ Enduring Freedom/Afghanistan/Iraqi Freedom/New Dawn

  4. See IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas, for a detailed list of Presidentially Declared Combat Zones and Qualified Hazardous Duty Areas.

  5. The CZ –C freeze and indicators are located on CC IMFOLE, Line 11.

    1. Combat indicator codes are:
      "0" = Not a CZ participant
      "1" = Active
      "2" = Inactive

    2. Conflict indicator codes identify the CZ(s) where the taxpayer served. See IRM 2.3.51-13, Command Code IMFOL Output Display — Entity, for a breakdown of the Conflict Codes.

  6. Any balance due module will be in ST 43.

  7. The –C freeze suspends the following:

    • Accrual of interest and FTP Penalty

    • Assessment of Failure to File and Estimated Tax Penalties

    • Assessment Statute Expiration Date (ASED)

    • Refund Statute Expiration Date (RSED)

    • Collection Statute Expiration Date (CSED)

      Note:

      The CSED is systemically updated when the exit date posts.

    • Collection actions, including levy, lien, seizure, balance due notices, refund offset

    • Postpones examination and audits of returns

  8. For more information regarding the length of suspension, see IRM 5.19.10.6.4, Combat Zone Computation of Suspense Period.

5.19.10.6.4  (02-01-2014)
Combat Zone Computation of Suspense Period

  1. The start date of the CZ suspense period begins on the transaction date of the TC 500 Closing Code 52, 54 or 56 (CZ entry date).

  2. The suspense period includes any period of continuous hospitalization:

    • Outside the United States

    • Inside the United States, not to exceed five years

  3. The ending date of the suspense period is calculated 180 days from the transaction date of the TC 500 Closing Code 53, 55 or 57 (CZ). The 180 days begin on the day following the CZ exit date.

  4. If a taxpayer serves multiple tours of duty in a CZ, and there are less than 180 days between the different tours, add the 180 days to the end of the last exit date.

  5. Once the entry and exit dates are present, the balance due accounts systemically return to normal processing when the 180 day suspense period expires.

  6. The CSED is suspended from the entry date to the exit date plus 180 days. No additional days are added to the CSED suspension for time served during a filing season.

  7. The RDD is extended by up to an additional 105 days (106 in a leap year) if the taxpayer was in the CZ during any part of the filing season.

    Example:

    For a taxpayer in the CZ at any time between January 1 and April 15 of the year in which the return was due, the taxpayer has until 180 days after CZ exit, plus the number of days remaining in the filing season in order to file his tax return.


    The RDD is calculated systemically. If the taxpayer was in the CZ more than one filing season, the RDD is calculated separately for each tax year. Applicable P&I charges are also determined based on the recomputed RDD.

  8. See IRM 20.2.7.7.1, Time Disregarded by Reason of Combat Zone Service, for information on computing interest and FTP.

5.19.10.6.5  (10-15-2012)
Combat Zone Correspondence and Telephone Calls

  1. This subsection has procedures for working taxpayer correspondence, e-mail and telephone calls when the taxpayer informs the Service of their deployment to a CZ or CO.

  2. It also provides direction for handling IA requests and payment proposals when research of the taxpayer's account reveals a CZ −C freeze.

  3. A Notice CP 04 will issue when a taxpayer self-identifies on a tax return that they served in a CZ. The notice will request entry and exit dates and other information about their time in a CZ. Procedures for working responses to CP 04 are provided in this section.

5.19.10.6.5.1  (02-01-2014)
Combat Zone IMF Procedures

  1. For WI CSCO:

    • If a response is received for a Letter 2761C, Request for Combat Zone Service Dates sent by an AMRH function in AM or by another WI CSCO site, forward the response to the area that sent the letter.

    • Forward responses to CP 04, Request for Proof of Military Status or Eligibility for Tax Relief Provisions Under Combat Zone, to WI CSCO in Kansas City.

    • Send Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, if routing outside your campus.

    • Otherwise, follow the appropriate procedures under IRM 5.19.10.6, Combat Zone Accounts and IRM 5.19.10.7, Combat Zone Transcripts to resolve your case.

  2. For all others, follow the procedures below.

  3. When responding to a caller who has received a Letter 2761C, Request for Combat Zone Service Dates or CP 04, Request for Proof of Military Status or Eligibility for Tax Relief Provisions Under Combat Zone:

    1. Obtain the CZ entry and exit dates from the taxpayer and the combat area in which they served. Enter this information on AMS.

    2. Advise the taxpayer to mail or fax the entry and exit dates, CZ area and any supporting documentation, if it is requested in the letter or notice, to the address/fax number provided in the letter. See IRM 5.19.10.6.2(12), Combat Zone Qualified Individuals and Areas, for a list of types of documentation that the taxpayer may provide.

    3. Do not input TC 500 to IDRS.

    4. If the account has an open control base with one of the following category codes, CP04, AMCZ or COCZ, do not take control of or close the open control base.

  4. When a response to Letter 2761C, Request for Combat Zone Service Dates or CP 04, Request for Proof of Military Status or Eligibility for Tax Relief Provisions Under Combat Zone is received in correspondence:

    1. Forward the response to the area that issued the letter. Forward responses to CP 04 to WI CSCO in Kansas City.

    2. Send Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, if routing outside your campus.

  5. When responding to a taxpayer who is notifying the IRS that they will be or are serving in a CZ and the entry date of the CZ is 2010 or later:

    If... Then...
    AM Toll-free Transfer call to Application 98
    • Application 98

    • All others

    Follow IRM 5.19.10.6.2(7) through (12), Combat Zone Qualified Individuals and Areas.

  6. When responding to a caller or correspondence and the taxpayer provides a CZ entry date that is prior to 2010, research the Combat indicator on CC: IMFOLE (Line 11).

    If... Then...
    Combat Indicator is “blank”, "0" or "2" For phones and correspondence:
    1. Input a TC 500 with the correct closing code and entry date to the tax year of entry.

      Example:

      If the taxpayer provides an entry date of March 14, 2009, enter the TC 500 on the 2009 tax period.
      See IRM 5.19.10.6.3, Combat Zone Freeze Code for a list of closing codes and IRM 5.19.10.7.2.3(5), Resolving Combat Zone Accounts, for input instructions.

    2. Follow with TC 500 with the correct closing code and exit date, if provided.

    3. Update AMS with entry and exit dates and the CZ area where the taxpayer served or worked.

    Combat indicator is "1" . For phones and correspondence:
    1. Do not input TC 500.

    2. Update AMS with entry and exit dates and the CZ area where the taxpayer served or worked.

    3. Update ENMOD with "SEEAMSHIST" using CC ACTON.

    4. For phones, complete Form 4442, Inquiry Referral, and forward to WI CSCO in Atlanta.

    5. For correspondence, resolve any other issues unrelated to CZ and route the correspondence to WI CSCO in Atlanta to address the CZ issue.

  7. For other combat issues follow below:

    If... Then...
    The taxpayer states they are no longer in the CZ For phones:
    1. Complete Form 4442, Inquiry Referral, and send to WI CSCO in Atlanta.

    2. Update AMS with entry and exit dates and the CZ area where the taxpayer served or worked.


    For correspondence:
    1. Resolve any other issues unrelated to CZ and route the correspondence to WI CSCO in Atlanta to address the CZ issue.

    2. Send Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, if routing outside your campus.

    The −C freeze was set in error or the taxpayer never served in a CZ
    The taxpayer requests a payoff amount and −C freeze is present Follow procedures in IRM 5.19.10.6.5.7, Combat Zone Payoff Amount.
    The taxpayer requests an IA or a 60 or 120 day agreement and −C freeze is present Follow procedures in IRM 5.19.10.6.5.8, Combat Zone Installment Agreement and 60 or 120 Day Agreement Requests.

5.19.10.6.5.2  (02-01-2014)
Combat Zone BMF Procedures

  1. The IRS administratively provides tax relief to military members serving in a combat zone/qualified hazardous duty area on certain qualified business liabilities. The specific conditions are:

    • The business had to cease operations from the time the taxpayer entered the CZ and

    • The business is a sole proprietorship, a partnership where the key individual is/was in the CZ, or a personal services corporation where the key individual is/was in the combat zone

      Example:

      Doctor, dentist, CPA, etc.

  2. The suspension of collection activity continues for 180 days after the exit date of the key individual from the CZ and applies to BMF liabilities. The CSED is not suspended.

  3. If an inquiry (correspondence or phone) is received, accelerate all balance due notice modules to Status 26. To accelerate follow the procedures below:

    CSCO... Other than CSCO...
    CC STAUP 2200 and CC TSIGN/ASIGN 6446. See IRM 2.4.27, Command Code ASGNI/ASGNB formerly TSIGN. Follow the procedures in (4) below.

  4. Follow the procedures below to notate and route the inquiry:

    If... Then...
    Correspondence
    1. Notate "COMBAT ZONE OR QUALIFIED HAZARDOUS DUTY AREA" in red.

    2. Input CC STAUP for 6 cycles on all balance due modules.

    3. Route to the appropriate ACS Support function for filing in the TDA/TDI suspense file.

    Phone
    1. Complete Form 4442, Inquiry Referral.

    2. Notate "COMBAT ZONE OR QUALIFIED HAZARDOUS DUTY AREA" .

    3. Input CC STAUP for 6 cycles on all balance due modules.

    4. Send to the appropriate SB/SE CSCO for input of TSIGN and filing in the TDA/TDI suspense file.

  5. Inform the taxpayer the case is being referred to another office for consideration. For correspondence, send Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office.

  6. For more information see IRM 5.19.2.5.5.1.1, Combat Zone BMF Procedures.

5.19.10.6.5.3  (04-12-2010)
Combat Zone BMF ACS Accounts

  1. Process BMF ACS taxpayers (including cases residing in R4 or in ST 24) who qualify for combat zone provisions as follows:

    1. Write "COMBAT ZONE" in comments.

    2. If there are no documents to associate with the case, input "TFRO, DOAO6501" .

    3. If there are documents to associate, input "TFRO, DOAO6566" .

    4. Write "COMBAT ZONE" on any documents associated with the case.

5.19.10.6.5.4  (02-01-2014)
Combat Zone E-mail

  1. Taxpayers, their spouses, or authorized representatives can notify the IRS of their CZ status by e-mail to combatzone@irs.gov. E-mails from taxpayers regarding combat zone are worked in AM.

  2. Take initial action on Combat Zone e-mail in two business days. E-mail cases take priority over Combat Zone transcripts.

  3. If it is necessary to control the account, use case Category Code, "CZ01" .

  4. Forward e-mail responses to Letter 2761C, Request for Combat Zone Service Dates, to the contacts listed on SERP Who/Where under Combat Zone E-mail Addresses. Ensure there is enough information in the e-mail for the recipient to locate the taxpayer’s SSN.

  5. If a SSN for the taxpayer can not be identified, notify the taxpayer and ask for the missing information needed to locate the SSN.

  6. For CZ entry dates for 2010 and later, refer to IRM 5.19.10.6.2(7), Combat Zone Qualified Individuals and Areas. Documentation is not required for dates provided by the DoD.

  7. When the taxpayer provides documentation such as military orders, discharge from active duty or other:

    1. If taxpayer dates are within 60 days of documentation dates, use the taxpayer dates. If taxpayer dates disagree with documentation dates by more than 60 days, use the documentation dates. If an entry date is already present on IDRS, correct it using the criteria above. This includes an entry date from DoD.

    2. Only resolve the open TC 500s. If taxpayer provides documentation for dates that are already closed, input the documentation dates on AMS. do not change TC 500 dates that are already closed.

    3. If taxpayer provides new entry/exit dates that are not on IDRS, input the dates via CC REQ77.

  8. See IRM 5.19.10.7.2.3(5), Resolving Combat Zone Accounts, for input instructions.

  9. For CZ entry dates prior to 2010 follow below.

  10. When the e-mail provides the name, address, date of birth (DOB) and date of CZ entry, research CC IMFOLE for the Combat indicator. See IRM 5.19.10.7.2.2, Combat Zone Research and IRM 5.19.10.7.2.3, Resolving Combat Zone Accounts, for more information.

    1. If Combat indicator is "1" and there is an unreversed TC 500 from the DoD and the date from the taxpayer is within 60 days of the DoD date, do not input the new date. Enter the date provided by the taxpayer in AMS history.

    2. Otherwise, update the account with TC 500 with the correct closing code, to establish the CZ freeze.

  11. For questions regarding CZ, research Publication 3, Armed Forces' Tax Guide, before responding by e-mail.

  12. Tax law questions should be forwarded via e-mail, to the appropriate contact listed under Combat Zone E-mail Addresses on SERP Who/Where.

  13. For Collection issues outside of AM scope forward the e-mail to the AM analyst on the Planning and Analysis Staff.

  14. Use the following format on e-mail responses. See IRM 21.3.2.4.1, Creating Your Response. E-mail messages to taxpayers, their representatives, or any other person, should not include sensitive but unclassified data (SBU) such as tax return information, nor include or request financial or other personal information.

    1. Use the system default font on blank stationery for all replies.

    2. The canned paragraphs used must match the default font.

    3. Greeting: Use a statement such as "Thank you for your inquiry" .

    4. Paraphrase the customer's question

    5. Address each question asked by the taxpayer.

    6. If the answer depends on facts or circumstances that are not specifically addressed in the question, state your assumptions. Cite the sources such as forms, publications and other tax sources. See IRM 21.3.2.4.1 (excluding the Note section), Creating Your Response.

    7. Close. Be sure to include a closing paragraph. Per the Restructuring and Reform Act of 1998, the signature must include the name and Identification Number (ID#) from your identification card. The e-mail address serves as the phone number for purposes of the requirement to provide a contact phone number.

    8. Before you release the e-mail, ensure the response is accurate and answers the question that is asked. Check for spelling and grammatical errors and appropriate tone.

  15. Report time spent under OFP 710-82361.

5.19.10.6.5.5  (02-01-2014)
Responses to CP 04 Notice

  1. When the taxpayer marks a tax return "Combat Zone" and no valid DoD dates appear on their account, a CP 04, Request for Proof of Military Status or Eligibility for Tax Relief Provisions Under Combat Zone/Contingency Operation Criteria, will issue. The notice requests entry and exit dates for the qualified area and a copy of their military orders or a Letter of Authorization (LOA), for civilians.

  2. Computer Condition Code (CCC) "Z" or "K" is coded for CZ tax returns. The code generates TC 500 to CC IMFOLE and sends CP 04. If a response to CP 04 is not received in 70 days, the TC 500, TC 340, TC 270, and TC 160 will be systemically reversed.

  3. CP 04 telephone and paper responses are worked in Kansas City Collection Operation (CSCO).

  4. Taxpayers responding to CP 04 may call the toll-free number: 800-908-0368 or fax their information to 816-292-6349.

  5. Check IRM 13.1.6.2.1, Tips for Oral Communication.

  6. Ensure the taxpayer is responding to CP 04. If the taxpayer has a different issue, see (24).

  7. If the taxpayer states "I never served in a combat zone" or "I did not serve in a combat zone in YYYY" (YYYY = the year of the tax return that was marked) "combat zone" , input AMS history with no other action. Allow the system to remove the incorrect TC 500.

  8. Verify authentication per IRM 21.1.3.2.3, Required Taxpayer Authentication.

  9. The purpose of the contact is to restate and clarify any questions you have regarding the taxpayer’s time served in a CZ. Attempt to resolve the case during the phone call.

  10. Update AMS with all entry and exit dates provided, plus CZ area, type of service and name and telephone number of organization, if provided.

  11. Get the following information:

    Information Type... Information needed...
    Type of service Military or civilian
    Organization Military department, civilian DoD contractor, Federal agency or other

    Note:

    If the taxpayer is an IRS employee, see IRM 21.1.3.8, Inquiries from IRS Employees.

    Name of participant Primary and/or secondary taxpayer
    Entry and exit dates, (including dates for any new or pending redeployments). Accept the dates provided by the taxpayer. Primary and/or secondary taxpayer.

    Note:

    Use the first of the month for entry dates and the last of the month for exit dates, when exact dates aren’t provided.

  12. For written responses, if information about the type of service or organization is missing, attempt to determine the missing information through research of CC IRPTR. See IRM 5.19.18.2(3), Identifying FERDI Cases, for help in identifying federal employees. Enter your results on AMS.

  13. To determine if more information is needed, follow below:

    If... And... Then...
    CC IMFOLE shows another open TC 500 TC 500 is unrelated to the dates provided by the taxpayer.

    Example:


    Taxpayer entered combat zone in 2009 and exited in 2010. There is a 2008 tax return with an open TC 500 on IMFOLE.

    1. Get the correct dates for the other TC 500 and enter them on AMS.

    2. If there is an open control base to Category Code "COCZ" or "AMCZ" complete Form 4442, Inquiry Referral, with the dates and provide them to the employee with the open control.

    3. If no open control base, and entry date is prior to 2010, remove this TC 500 date, if incorrect, and re-input the correct entry and exit dates.

    4. If no open control base and entry date is 2010 or later, request documentation per (14) below.

    5. For written responses, do not ask for dates or documentation unless there is a balance due or additional information will be requested from the taxpayer.

    CC IMFOLE on the Primary or Secondary account shows an entry/exit date from DoD posted after the tax return was processed DoD entry/exit date occurs in the same year as the tax return that generated the CP 04.

    Example:


    DoD date is for 2010. The CP 04 generated from the 2010 Form 1040.

    1. Military orders or an LOA are not required.

    2. Follow procedures in (19) below.

    3. Address any balance per IRM 5.19.10.6.5.6, CP 04 - Resolving a Balance Due.

    Taxpayer is military CC IRPTR shows military income for the year of the tax return or the year before.

    Exception:


    Income from a pension or interest or dividend income from a bank or credit union

    Taxpayer is civilian Worked in a CZ area as:
    • Red Cross

    • Journalist or news reporter

    • State Department employee

    • Other Federal agency employee

    Exception:


    Income from a pension or interest or dividend income from a bank or credit union

    Taxpayer does not meet an exception above or you are unable to determine based on information from the taxpayer or through research   A copy of their military orders, LOA or a written statement from the organization is required. See IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas, for types of documentation. If talking to the taxpayer, request the documentation.
    Taxpayer asks why a copy of their orders or LOA is required.   Inform the taxpayer that we do not have their information on record and so must verify their information to ensure they receive proper credit for the time served.
  14. For phone responses, follow procedures below. If taxpayer requests confirmation, send Letter 2761C or other appropriate letter.

    If... Then...
    Taxpayer provides the qualifying supporting documentation (military orders, civilian LOA or other) while on the phone. See IRM 5.19.10.6.2(, Combat Zone Qualified Individuals and Areas for more information on qualifying documentation and dates.
    1. Follow correction procedures per (19).

    2. Address any balance due per IRM 5.19.10.6.5.6, CP 04 - Resolving a Balance Due.

    .

    Note:

    If taxpayer is still serving in a CZ, the taxpayer is not required to pay until 180 days following their exit from CZ.

    Taxpayer cannot provide the supporting documentation while on the phone
    1. Request the documents, and a copy of the CP 04.

    2. Provide the mailing address, fax number and a due date for sending the documentation. See (16) and (17) below for controlling the account and follow-up time frames.

    3. Advise the taxpayer they must provide a letter from the organization, if they cannot provide military orders, LOA or other.

    4. Address any balance due per IRM 5.19.10.6.5.6, CP 04 -Resolving a Balance Due.

    Taxpayer does not have supporting documentation.
    1. Request that taxpayer go back to the organization to secure a letter.

    2. Provide the mailing address, fax number and a due date for sending the documentation, along with a copy of the CP 04. See (16) and (17) for controlling the account and follow-up time frames.

    3. Address any balance due per IRM 5.19.10.6.5.6, CP 04 - -Resolving a Balance Due.

    No reply by the follow-up date.
    1. If an IA agreement or other action will be taken on a balance due module, remove the TC 500 and monitor until the Combat indicator goes to "2" or "0" .

    2. Close control and update AMS after all actions are taken.

    3. Otherwise, allow automatic reversal and do not control.

  15. For written responses, research AMS history for information that may have been provided previously by phone. Send Letter 2761C, Request for Combat Zone Service Dates, or other appropriate letter when closing your case. Follow the procedures below.

    If... And... Then...
    Taxpayer provides the dates and qualifying supporting documentation or documentation is not required. See IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas for more information on qualifying documentation and dates. There is no balance due or payment proposal Follow correction procedures per (19).
    There is a payment proposal. No other open TC 500 is present or dates for this open TC 500 are on AMS
    1. Follow correction procedures per (19).

    2. Address any balance due per IRM 5.19.10.6.5.6, CP 04 - -Resolving a Balance Due.

    Note:

    If taxpayer is still serving in a CZ, the taxpayer is not required to pay until 180 days following their exit from CZ.

    There is a payment proposal and there is another open TC 500
    1. Make two attempts to contact taxpayer by phone to request the correct dates.for the open TC 500. However, don't try to call if the phone number is in a foreign country.

    2. If unable to contact, send Letter 2761C.

    3. Request documentation, if entry date is 2010 or later.

    4. See (16) and (17) for controlling the account and follow-up time frames.

    The required documents are missing, incomplete or dates are unclear. The information was not previously requested by phone
    1. Make two attempts to contact taxpayer by phone. However, don't try to call if the phone number is in a foreign country.

    2. If unable to contact, send Letter 2761C.

    3. If there is a balance due and another open TC 500, also ask for dates for the other open TC 500.

    4. Request documentation, if entry date is 2010 or later.

    5. See (16) and (17) for controlling the account and follow-up time frames.

    The required documents are missing, incomplete or dates are unclear. We previously requested this information while on the phone or with Letter 2761C.
    1. If an IA or other action will be taken on a balance due module, remove the TC 500 and monitor until the Combat indicator goes to "2" or "0" .

    2. If no action will be taken on a balance due module, allow the TC 500 to be systemically removed.

    3. Close control and update AMS after all actions are taken.

    No reply to Letter 2761C by the follow-up date.  
    A late reply is received   Follow procedures in (15) to resolve the account.

  16. Control the account in "S" status using activity code "CP04mmddyy" with the appropriate follow-up date and Category Code "CP04" .

  17. Use the following time frames for deadlines and follow-up dates.

    1. If the taxpayer states they will fax the information, give a deadline of 10 days from date of telephone call.

    2. If the taxpayer states they will mail in the information, give a deadline 15 days from date of telephone call.

    3. If the taxpayer must provide documentation from the organization, allow 15 days to fax information to CSCO and 30 days to mail it back.

    4. If sending Letter 2761C, allow the taxpayer 30 days from date of input.

    5. When determining the follow-up date for the action history code, add an additional 15 days to the deadline given.

  18. If all necessary information has been received and the taxpayer does not qualify for the CZ tax provisions per review of IRM 5.19.10.6.2(11) and (12), Combat Zone Qualified Individuals and Areas:

    1. Allow automatic reversal of the TC 500.

    2. Follow procedures in IRM 5.19.10.6.2(13), Combat Zone Qualified Individuals and Areas, to inform the taxpayer of disqualification.

  19. Based on taxpayer response and qualifications, update the account using the procedures below. If the taxpayer has a balance due and an IA or CC STAUP will be input, follow IRM 5.19.10.6.5.6, CP 04 - Resolving a Balance Due.

    Caution:

    Due to CADE2, the transaction date of the TC 150 posts with a future date that prevents input of a TC 500. If unable to input the TC 500, open a control base in "S" status and monitor until able to do the input. If working a telephone call, place the case into inventory, control and monitor as a paper case.

    If... Then...
    Taxpayer provided an entry and exit date
    1. Remove the freeze condition created by CCC K or Z if the CCC K or Z is on the year of entry.

    2. Input the correct entry and exit dates to the year of entry.

     
    Taxpayer entered a CZ but is still serving in a qualified area
    1. Remove the freeze condition created by CCC K or Z if the CCC K or Z is on the year of entry.

    2. Input the correct entry date to the year of entry.

     
     
    Taxpayer provided dates for another open TC 500
    1. If DoD dates are already present, do not input. Enter the taxpayer provided dates on AMS.

    2. Otherwise, remove the existing TC 500 date if it differs from the taxpayer's date by more than 30 days.

    3. Input the correct entry and exit dates.

     
    Joint account, and some tax returns were filed jointly under the spouse.
    The joint tax years under the spouse are affected by the CZ suspense period

    Example:


    Primary taxpayer served in CZ in 2008 through 2010. In 2008, the primary filed as the secondary under the spouse's SSN.

    Input the correct dates to the spouse's SSN. Use CSED Code "S" with the TC 500s.
     
    CP 04 Notice or Letter 2761C returned undelivered and CC IRPTR shows military income.
    1. Follow IRM 5.19.7.5.1, Undelivered (UD) Mail Procedures.

    2. If no new address found remove the return TC 500 and input an entry/exit date of January 1st to December 31st for the year of the return. For instance, taxpayer filed 2010 return, input entry date, January 1, 2010 and exit date December 31, 2010.

    3. If new address found, re-mail the notice or letter and monitor per (17) above.

    4. If notice or letter is returned undelivered a second time, follow (b).

    Note:

    This procedure does not apply to CZ transcript processing.

     
    CP 04 Notice or Letter 2761C returned undelivered and CC IRPTR does not show military income.
    1. Follow IRM 5.19.7.5.1, Undelivered (UD) Mail Procedures.

    2. If no new address found, take no action. Allow the system to reverse the return TC 500.

    3. If new address found, re-mail the notice or letter and monitor per (17) above.

    4. If notice or letter is returned undelivered a second time, take no action. Allow the system to reverse the return TC 500.

     

  20. For instructions on input corrections, see IRM 5.19.10.7.2.3(5), Resolving Combat Zone Accounts.

  21. After corrections are input to a CZ account, the –C freeze will release in three cycles. If there is a balance due, the account will then go to ST 46 for two cycles before balance due notices resume.

  22. If an IA or CC STAUP will be input, monitor the account until the balance goes to ST 46. If input corrections have posted, but it is still in ST 43, refer the case to the Lead Tax Examiner for resolution.

  23. Follow procedures in IRM 5.19.10.6.5.6, CP 04 - Resolving a Balance Due, for balance due accounts.

  24. Follow below for other issues:

    If... Then...
    Response is to a Letter 2761C sent by someone working a CZ transcript.
    1. For phone, complete Form 4442 with the information provided by the taxpayer and send to the area that sent the letter.

    2. For correspondence, route to the appropriate area. Send Letter 86C.

    Issue is unrelated to a balance due or CZ.
    1. Provide the appropriate toll-free number or mailing address. See IRM 21.3.3.4.2.4, Toll-Free Telephone Numbers, or SERP Who/Where.

    2. For correspondence, route to the appropriate area and send Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office.

    Issue is a question regarding CZ provisions and you are unable to provide an answer
    1. Refer taxpayer to http://www.irs.gov/, Publication 3, Armed Forces’ Tax Guide or provide them with the customer service toll-free number.

    2. For correspondence, send Letter 309C, Forms/Publications/Schedules to Taxpayer, and enclose Publication 3, Armed Forces’ Tax Guide.

    Issue concerns a military deferment request
    1. Advise the taxpayer of what needs to be submitted for consideration. Refer to IRM 5.19.1.4.9, Military Deferment.

    2. Provide a mailing address for the CSCO Operation that has jurisdiction of the taxpayer’s account. See SERP Who/Where, Collection Payments/Addresses/ Issues, Campus Addresses for Collection.

    3. For correspondence, send Letter 1175C, Collection Postponed During Initial Period of Active Military Service.

    4. If account is in notice status, input CC STAUP to the next status for 09 cycles.

    5. Do not open a control base.

    6. Update AMS.

5.19.10.6.5.6  (02-01-2014)
CP 04 - Resolving a Balance Due

  1. When a CP 04 response is received, the taxpayer has a balance due and research indicates the taxpayer had an IA prior to their CZ, see IRM 5.19.10.6.5.8(4) through (11), Combat Zone Installment Agreement and 60 or 120 Day Agreement Requests.

    If... Then...
    CP 04 response is by phone or correspondence
    1. Inform the taxpayer that their IA will be reinstated. They will receive a letter informing them of the reinstatement, with a current balance due and the terms of the agreement.

    2. For correspondence, send Letter 2272C, Installment Agreement Cannot be Considered/Extension of Time to Pay Cannot be Considered or Letter 2761C, Request for Combat Zone Service Dates.

  2. When a CP 04 response is received, there is a balance due and the taxpayer did not have an IA prior to their CZ service, follow procedures in IRM 5.19.1, Balance Due, and the references listed below.

  3. Follow the procedures below:

    If... Then...
    Response is by phone Ask the taxpayer how they propose to pay the amount they owe.
    Response is by phone and taxpayer requests an agreement to full pay within 120 days or less.
    1. Inform the taxpayer the P&I must be computed in order to exclude the time they were serving in a CZ.

    2. They will be contacted in 10 business days with the amount they owe.

    3. If we are unable to reach them by phone or if additional information is needed, we will send a letter.

    4. Contact the taxpayer by phone and follow-up with the appropriate letter.

    Taxpayer responds by phone and requests an IA or can't pay Follow procedures in, IRM 5.19.10.6.5.7, (4) through (11) Combat Zone Payoff Amount, or IRM 5.19.10.6.5.8(4) through (8), Combat Zone Installment Agreement and 60 or 120 Day Agreement Requests.
    Response is correspondence and taxpayer makes a payment proposal or can't pay.
    Taxpayer states that they have already contacted IRS regarding this issue or that they are in a hardship situation Refer to the Taxpayer Advocate using referral procedures, if the case meets the criteria in IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria
  4. If talking to the taxpayer, provide the taxpayer with the following additional information.

    • If will take approximately 5 - 6 weeks to release the freeze on their account. They may receive a notice requesting payment but that notice can be disregarded. However, if they choose to full pay when they receive the notice, they must call and request a current balance. The balance must be computed to exclude the interest and penalty charges that accrued during their time in the CZ.

    • Please allow 30 days

    • Provide the taxpayer with the customer service toll-free number for requesting a balance and for additional questions.

    • Provide the taxpayer with the requirements for submitting payments per IRM 5.19.1.5.4.18, Taxpayer Responsibilities — When Submitting Payments.

5.19.10.6.5.7  (02-01-2014)
Combat Zone Payoff Amount

  1. For AM Toll-free ONLY, follow IRM 20.2.3.5(2), Interest Computation Explanations, if the taxpayer is requesting a balance.

  2. For all others, follow the procedures below.

  3. Beginning in 2012, military orders or other documentation are required for entry dates of 2010 and later. Documentation is not required for dates provided by the DoD. If entry date is 2010 or later, follow IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas.

  4. When the taxpayer provides documentation such as military orders, discharge from active duty or other:

    1. Refer to IRM 5.19.10.7.2.4(2), Taxpayer Responds to Letter 2761C, for additional information regarding what dates to use.

    2. If there is a posted TC 500 date for which the taxpayer is responding and it is incorrect, remove it with TC 502 and input the correct dates.

  5. For accounts with Combat indicator "1" , ensure the CZ status is correct before figuring a current balance. Follow IRM 5.19.10.7.2.2, Combat Zone Research, and IRM 5.19.10.7.2.3, Resolving Combat Zone Accounts.

  6. On active CZ participants only (Combat indicator "1" ), compute the payoff balance due (including accruals) to the date of the TC 500 Closing Code 52, 54 or 56 (CZ entry date).

    • CC INTST will provide the correct amount if the taxpayer is still in the combat zone.

    • If the balance due posts while the taxpayer is in the CZ, the assessed balance is the total amount owed, if full paid before the suspense period ends.

    • See IRM 5.19.10.6.4, Combat Zone Computation of Suspense Period.

  7. For inactive CZ participants, compute the payoff amount to the entry date, then resume after the suspense period.

    1. For FTP Penalty (with or without a G– freeze), determine the total amount of FTP already assessed.

    2. If it is at least 25% of the unpaid tax (minus prepaid credits) that was due by the return due date, no additional FTP is due.

    3. Otherwise, FTP must be manually calculated. See IRM 20.1.2, Failure To File/Failure To Pay Penalties.

  8. Interest will systemically resume on Master File (CC IMFOLT) once the CZ suspense period ends if:

    • An unreversed TC 500 will restrict interest computation.

    • The module has no other restricted interest freeze. See Document 6209, Section 8A.4, Master File Freeze Codes and IDRS Status 48, for a list.

    • There are no overlapping CZ tours of duty. Tours of duty are considered overlapping when the taxpayer exits a CZ and then returns to the CZ within 180 days of the exit date and

    • There are no payments with an earlier date that posted after a TC 340 date that contains a computed interest amount. On the example below, Master File is unable to compute interest.

    Transaction Code Posted Date Transaction-Amount Cycle-Day
    TC 340 04122004 328.71 200943
      COMP-INT-AMT> 3,008.08 DB-CR-INT-TO-DT>03222004
    TC 670 03102004 100.00- 200945

  9. If you are providing a payoff amount to the taxpayer, CC INTST will provide a correct balance. However, if interest is still restricted, you must manually compute the interest and FTP accruals. See IRM 20.2.7.7.1, Time Disregarded by Reason of Combat Zone Service and IRM 20.2.7.7.2, Combat Zone Interest Suspension. CC INTST will not compute the accruals.

  10. For inactive CZ participants (Combat indicator "2" ), refer to IRM 5.19.1.5.2, Can Full Pay Balance Due Now (Payoff), or IRM 5.19.1.5.3, Full Pay Within 60 or 120 Day Agreement.

  11. Update AMS history with information about the payoff request, balance due and CZ dates.

5.19.10.6.5.8  (02-01-2014)
Combat Zone Installment Agreement and 60 or 120 Day Agreement Requests

  1. For AM Toll-free obtain the entry and exit dates from the taxpayer and enter the information on AMS. Take the following actions:

    If... And... Then...
    Taxpayer is still serving in, or is in the 180 day period following exit from the CZ The account is in ST 43 (Combat indicator is "1" on CC IMFOLE)
    1. Prepare Form 4442.

    2. Notate "COMBAT ZONE ST 43" .

    3. Send to the appropriate WI CSCO

    Taxpayer is no longer serving in a CZ Combat indicator is "2" on CC IMFOLE Follow procedures below in (7) and (11).
    The Combat indicator is incorrect based on the information given by the taxpayer   Follow the Telephone Transfer Guide, located under the Who/Where tab on the SERP Home Page.

  2. For all others, follow the procedures below.

  3. For accounts with Combat indicator "1" , ensure the CZ status is correct. To resolve, follow IRM 5.19.10.7.2.2, Combat Zone Research, and IRM 5.19.10.7.2.3, Resolving Combat Zone Accounts. If the open CZ status can be resolved, input the corrections and monitor the account until the Combat indicator updates to "2" or "0" . Then follow (7) through (11) below.

  4. If the CZ suspense period is still open, research SC Status History, on CC TXMOD.

    1. If ST 6X is present followed by ST 43, the taxpayer had an IA before entering a CZ. When the CZ suspense period expires the following occurs:
      Accrued FTP Penalty and interest is manually assessed
      The IA is reinstated
      The IA User Fee is waived, unless the taxpayer owed a fee prior to entry into the CZ
      A letter is sent to the taxpayer, providing a current balance due and the terms of the agreement.

    2. See IRM 5.19.10.10.14.3, IAAL Military Combat - Reinstatement of Installment Agreements, for more information.

  5. If the taxpayer did not have an IA, once the CZ suspense period expires, balance due notices to the taxpayer will resume.

  6. For accounts with Combat indicator "1" , take the following actions:

    If... Then...
    The taxpayer had an IA prior to the CZ suspense period Inform the taxpayer of the following: For Phone:
    • The Service does not establish regular installment agreements for CZ participants but will accept any voluntary payments.

    • 180 days following their exit date, the IA will be automatically reinstated.

    • They will receive a letter informing them of the reinstatement, with a current balance due and the terms of the agreement.

    For correspondence: Follow the above by sending Letter 2272C, Installment Agreement Cannot be Considered/Extension of Time to Pay Cannot be Considered or Letter 2761C, Request for Combat Zone Service Dates.
    The taxpayer did not have an IA prior to the CZ suspense period Inform the taxpayer of the following: For Phone:
    • The Service does not establish regular installment agreements for CZ participants but will accept any voluntary payments.

    • 180 days following their exit date, they will begin receiving balance due notices requesting payment.

    • They may request an IA or make a payment proposal, at that time.

    • If they decide to full pay, they must call the toll-free number on their notice to obtain a current balance.

    For correspondence: Follow the above by sending Letter 2272C or Letter 2761C .

  7. When the CZ suspense period expires, the balance due module goes to ST 46 for two cycles and then balance due notices resume (Notice Status). When the module is in ST 46, installment agreements or CC STAUP can be input.

  8. For accounts with Combat indicator "2" (balance due is in ST 46, Notice or TDA Status), follow procedures in IRM 5.19.1, Balance Due.

  9. If interest and penalty is restricted on a ST 60 IA module, the account will go to the Installment Agreement Accounts Listing (IAAL) when the assessed balance is full paid. Interest and penalty accruals will then be assessed and the IA reinstated. When setting up an IA on a CZ account, computation of interest and penalty is not required unless the taxpayer requests a balance.

  10. See IRM 5.19.10.10.2.1, Full Paid Restricted Interest and Penalty Accounts for more information.

  11. Update AMS history with information about the IA request and CZ dates.

5.19.10.7  (02-01-2014)
Combat Zone Transcripts

  1. The IAT tools as listed in IRM 5.19.10.1, Compliance Services Collection Operation Transcript Overview must be used by Campus Compliance employees for procedures outlined in this IRM. When an action must be taken and an IAT tool is available, Campus Compliance employees with access to the tool are required to use it to complete the action.

    Note:

    If an IAT tool is not functioning properly or it is determined not to be appropriate due to a specific situation, the case should be worked without the tool, using IDRS. For more information on each tool as well as a job aid for each tool see the IAT Website.

  2. This subsection provides procedures for Combat Zone transcripts. These transcripts issue if a −C freeze is present on a taxpayer's account.

    • "COMBATZON" transcripts issue when a delinquent balance due return is filed to assess Failure to File Penalty.

    • Combat Zone Clean-Up transcripts issue each month for accounts with an unreversed CZ entry date two years and older. Employees research to resolve the open −C freeze condition or contact the taxpayer for more information.

  3. Throughout these procedures, the term "combat zone" may refer to a combat zone, contingency operation or QHDA.

  4. If a response is received to Letter 2761C, Request for Combat Zone Service Dates, follow IRM 5.19.10.7.2, Combat Zone Clean-Up Transcript, to determine what action to take on the account.

  5. Refer to IRM 5.19.10.6, Combat Zone Accounts when working other taxpayer correspondence or phone calls and there is a −C freeze or the issue concerns a CZ, CO or QHDA.

  6. Combat Zone transcripts that have no compliance issues are worked by AM. WI CSCO works transcripts on balance due and return delinquency accounts.

5.19.10.7.1  (02-01-2014)
"COMBATZON" Transcript Procedures

  1. A transcript, "COMBATZON" , is generated when a delinquent filed balance due return posts and a TC 160 is on the tax module due to a −C freeze. This TC restricts the Failure to File Penalty from computing.

  2. These transcripts are worked by WI CSCO in Atlanta.

  3. Research CC IMFOLE for the Combat indicator.

    If Combat indicator is... Definition... Take the following action...
    "1" The taxpayer is in a designated CZ Do not process the transcript.
    "2" The taxpayer exited a designated CZ Process the transcript and calculate failure-to-file penalty. See IRM 5.19.10.6.4, Combat Zone Computation of Suspense Period.
    "0" Removed indicator entirely, no valid dates Determine if the TC 160 should be removed. If so, input TC 162 using CC REQ54 to allow the system to compute the penalty.

5.19.10.7.2  (02-01-2014)
Combat Zone Clean-Up Transcript

  1. Combat zone Clean-Up transcripts are generated each month and consist only of accounts with unreversed CZ entry dates two years and older. The total number of open CZ accounts are divided over a 12 month period.

    Example:

    If you are working transcripts with a received date of 11/22/13, the only accounts processed are those with a CZ entry date of 11/22/11 and earlier.

  2. The purpose of these transcripts is to monitor all accounts with an unreversed TC 500 cc 52, 54, or 56 or accounts with a –C freeze set by the Computer Condition Codes (CCC)" K" or "Z" or Return Processing Code (RPC)" R" .

  3. There are two types of transcripts:

    • Balance due and return delinquency worked by WI CSCO, identified by case Category Code "COCZ" . During initial research, if there are no balances due or return delinquencies, route the transcript to Accounts Maintenance.

    • All others worked by Accounts Maintenance, identified by case Category Code "AMCZ" . During initial research, if the account has a balance due or return delinquency, route the transcript to WI Atlanta CSCO.

  4. The transcripts are identified by the following literals:

    • "CZ500" : Unreversed TC 500 on TXMOD and IMFOLE or on IMFOLE only

    • "CZNO500" : No TC 500 present anywhere. A −C freeze is present and was set by CCC "K," "Z" or RPC "R" and can be for any tax year.


5.19.10.7.2.1  (02-01-2014)
Combat Zone Clean-up Transcript Processing

  1. Combat Zone transcripts are systemically controlled upon issuance. If a case is not systemically controlled, control the case on the CC TXMOD period of the earliest unreversed TC 500.

  2. Research to determine whether the case can be closed or if a letter should be sent. See IRM 5.19.10.7.2.2, Combat Zone Research, and IRM 5.19.10.7.2.3, Resolving Combat Zone Accounts.

    1. If contact with the taxpayer is needed to obtain the correct entry and exit dates, send Letter 2761C, Request for Combat Zone Service Dates.

    2. Suspend the account for 60 days. In the letter, give the taxpayer 45 days to respond.

    3. Follow IRM 5.19.10.7.2.5, Taxpayer Does Not Respond to Letter 2761C, if no response is received.

  3. Document each action taken on the case in AMS history. Include any dates provided by the taxpayer, the dates of any Letters 2761C, Request for Combat Zone Service Dates, that were sent or any calls that were made. If a subsequent transcript issues the next year, the history may assist the employee in resolving the CZ condition without contacting the taxpayer.

5.19.10.7.2.2  (02-01-2014)
Combat Zone Research

  1. The Combat indicator and controlling TC 500s can be found on CC IMFOLE. The Combat indicators are:

    • "0" or blank = Not a CZ participant

    • "1" = Active

    • "2" = Inactive

  2. If working transcripts and Combat indicator is "0" or "2" . Close the case with no further action.

  3. If Combat indicator "1" has been open for less than two years (i.e., the most recent open TC 500 entry date on CC IMFOLE is less than two years) from the transcript date, do the following:

    1. Correct any other open TC 500s that are present if they can be resolved without taxpayer contact.

    2. Enter AMS history and close the case.

  4. The following chart lists TC 500 closing codes for entry date, closing codes for exit date and identifies the designated CZ:

    TC 500 Closing Code (Entry Date) TC 500 Closing Code (Exit Date) Designated Combat Zone
    52 53 Operation Desert Storm/Operation Joint Endeavor/Haiti/Operation Unified Response
    54 55 Bosnia/Yugoslavia/Operation Allied Forces
    56 57 Operation Iraqi Freedom/Operation Enduring Freedom/Afghanistan/Iraqi Freedom/New Dawn

  5. The source of the TC 500 on CC IMFOLE can be identified by the DLN.

    If the DLN... TC 500 was created... TC 500 Location
    Has all 8s or 9s in the 6th – 13th position.
    A TC 500 DLN with 8s posts for the non-participating spouse. TC 500 DLN with 9s posts for the spouse who participated in the CZ.

    Example:

    28277-888-88888-x, 28277-999-99999-x.

    From DoD data sent each month. CC IMFOLE and the tax module that is prior to the year of entry. EXAMPLE: Taxpayer entered CZ in 2012. TC 500s generate to the 2011 tax period.
    Has a "2" in position 3 of the DLN. Position 4 and 5 carry the Document Code of the Form 1040 that was filed, which are 05 - 12, 21 or 22. (See Document 6209, Master File Freeze Codes and IDRS Status 48, Section 2-2, List of Returns and Forms.) EXAMPLE: xx207-xxx-xxxxx-x, xx210-xxx-xxxxx-x When taxpayer noted "combat zone" on a tax return, amended return or e-filed return. The return was coded with CCC" K" , "Z " or RPC "R" .

    Note:

    Use of RPC "R" was disabled as of January 2007.

    CC IMFOLE only. The DLN and entry date of the TC 500 match the DLN and TC 150 date of the tax return on which the taxpayer self-identified. NOTE: CCC" K" sets cc 56, "Z" sets cc 52, RPC "R" sets cc 54.
    Has Doc Code "77" in positions 4 and 5. Positions 6 – 13 will be variable. EXAMPLE: xxx77-123-58349-x. By manual input using CC REQ77 CC IMFOLE and CC TXMOD/IMFOLT

  6. Locate all open TC 500s on the account. Research the following:

    Research Make Note of the following Additional information
    CC IMFOLE
    • Combat indicator code

    • TC 500s open entry dates.

    • TC 500 date and DLN, if TC 500 is a tax return DLN. See (4) box 2 above.

    • TC 500s on CC IMFOLE that carry no date can be ignored.

    • If there are no TC 500s but –C freeze is present and Combat indicator is "1" , research CC IMFOLR/TRDBV/RTVUE below.

    CC IMFOLR/ TRDBV/ RTVUE for each tax period on IMFOLI that has a –C freeze and a G− and/or −I freeze. CCC" K" or "Z" or RPC "R" and tax year. NOTE: RPC "R" can be located on CC TRDBV or RTVUE only.
    • Some –C freezes were set but a TC 500 did not generate. ("CZNO500" Transcripts).

    • Taxpayers may self-identify on more than one tax return. Not all tax return TC 500s may appear on CC IMFOLE.

    CC IMFOLT for each tax period on CC IMFOLI that has a –C freeze and a G− and/or −I freeze.
    • TC 500(s) dates, closing codes, CSED Code (found only on CC IMFOLT)

    • Tax period

    • TC 150 DLN and date

    • TC 976/977 is present along with TC 500

    • If TC 500 on CC IMFOLE carries a TC 150 tax return DLN, the TC 150 with matching date and DLN must be located to correct the account.

    • Taxpayers also self-identify on amended returns.

    CC INOLES
    • X-REF TINs (cross reference accounts). See NOTE below

    • Date of Death, if present

    Look for joint filers who switch primary taxpayers on tax returns or both spouses have served in a CZ or a female participant has remarried. The correct information needed to close the transcript may be available on the cross reference account.
    AMS, CC ENMOD and CC TXMOD history information
    • CZ information and dates

    • Any Letters 2761C sent and their dates

    • Control base and IDRS history

     
    X-REF TINs
    • If the Combat indicator on CC IMFOLE is "blank" or "0" discontinue research

    • If Combat indicator is "1" or "2" , follow the same research path as above.

     

    Note:

    If another employee has an open Combat Zone Clean-Up transcript on the X-REF TIN, the employee with the earliest control date will work the primary and cross reference accounts. If needed, contact the employee with the other control base to coordinate. The losing employee will close their case on AMS as "Transferring an Open Control Base to Another - IDRS # ____ has the earliest combat zone transcript." Input history item on IDRS (e.g. "H,SEEAMSHIST" ) and AMS history on the cross reference TIN account to alert the other caseworker.

5.19.10.7.2.3  (02-01-2014)
Resolving Combat Zone Accounts

  1. After researching the account, follow the procedures below for resolving CZ accounts.

  2. Compare the TC 500 closing codes, entry, and exit dates to determine each CZ suspense period. All open TC 500s must be located and resolved (unless otherwise directed below), either by removal or the input of a TC 500 with a valid exit date.

  3. Follow the table to address ALL other unreversed TC 500s.

    Exception:

    For self-identified TC 500s created by coding a tax return CCC "K" or CCC "Z" , it is only necessary to address the one that is open on CC IMFOLE. Once the open one on CC IMFOLE is resolved, other unresolved return TC 500s will be ignored by Master File.

    If... And... Then...
    CC INOLES indicates the taxpayer is deceased Date of Death is prior to the CZ entry date. See procedures below for removing the TC 500.
    Date of Death was after the CZ entry date and the taxpayer has a surviving spouse. See procedures below for sending Letter 2761C.
    Date of Death was after the CZ entry date and the taxpayer has no surviving spouse. Input a TC 500 cc 53, 55 or 57 exit date that is the earlier of the date of death or two years from the entry date.
    Date of birth on CC INOLES indicates the taxpayer was over 65 or under 18 at the time of CZ entry. No indication of military income for that year on CC IRPTR and no DoD dates around the same time frame. See procedures below for removing the TC 500.
    On accounts with entry dates for 1994 and prior There is no information on AMS or IDRS that provides a resolution of the open entry date. Input a TC 500 cc 53, 55 or 57 exit date that is two years from the entry date.
    Open TC 500 on CC IMFOLE is from a tax return, i.e.:
    • Open TC 500 has a return DLN or

    • Open TC 500 on CC IMFOLE and also on CC TXMOD along with a TC 976/977 (Form 1040X).

      Note:


      Research the Form 1040X on Correspondence Imaging System (CIS), if available. If there is nothing on the form that indicates the taxpayer is self-identifying, remove the related TC 500. See procedures below.

    The tax return TC 500 entry date open on CC IMFOLE is within 18 months of any DoD TC 500 dates present on CC IMFOLE See procedures below for removing the TC 500.

    Note:

    Only remove the tax return TC 500 that is open on CC IMFOLE.

    The tax return TC 500 open on CC IMFOLE was late filed and any DoD TC 500 dates present on CC IMFOLE fall within the tax year of the return
    The tax return CZ TC 500 entry date open on CC IMFOLE is more than 18 months from any DoD TC 500 dates present on CC IMFOLE. See procedures below for sending Letter 2761C.
    No DoD dates are present on CC IMFOLE
    Duplicate DoD TC 500s cc 52, 54, 56 are on the module with the same entry date but one TC 500 has a CSED Code "P" and the other TC 500 has a CSED Code "S" . Only one DoD TC 500 53, 55, 57 is present with CSED Code "P" or "S" Input a duplicate TC 500 cc 53, 55, 57 to close out the open TC 500 cc 52, 54, 56. Use the same CSED Code as the open TC 500.
    Based on research, an unreversed TC 500 on CC TXMOD/IMFOLT has a correct entry date. The exit date is known Input TC 500 cc 53, 55, 57 to close out the TC 500 cc 52, 54, 56. Follow (5) below.
     
    The exit date is not known See procedures below for sending Letter 2761C.  
    It can be determined that a TC 500 entry date on CC TXMOD/ IMFOLT is incorrect   See procedures below for removing the TC 500.  
    Unable to determine if TC 500 entry date on CC TXMOD/IMFOLT is correct The entry date of the TC 500 falls within the entry and exit date of another CZ suspense period that has the same CSED and closing codes Take no action. This date is ignored by Master File.  
    History on IDRS or AMS shows that one or more Letters 2761C were sent regarding the unreversed TC 500 and no indication of taxpayer reply Follow IRM 5.19.10.7.2.5(1) box 1, Taxpayer Does Not Respond to Letter 2761C.  

  4. If Combat indicator "1" has been open for more than two years (i.e., the most recent open TC 500 entry date on CC IMFOLE is more than two years old) and cannot be resolved using the procedures above:

    1. Beginning in 2012, military orders or other documentation are required for self-identified entry dates of 2010 and later. Accounts resolved via Generalized IDRS Interface (GII) are excepted at this time. Follow IRM 5.19.10.6.2(7), Combat Zone Qualified Individuals and Areas.

    2. Send the Letter 2761C to request the dates from the taxpayer

    3. Suspend the account for 60 days. In the letter, give the taxpayer 45 days to respond

  5. Follow procedures below to make corrections to the CZ account. For multiple input corrections, delay each input by one cycle.

    Example:

    TC 500 followed by TC 502 with Posting Delay Code (PDC) 1, followed by TC 500 cc 56 PDC 2, followed by TC 500 cc 57 PDC 3.


    TC 502 and TC 342/272/162 can post in the same cycle.

    To... Then...
    Input a TC 500 entry date to CC TXMOD. If it is a new entry, enter it to the tax period for the year of entry.

    Note:


    CC REQ77 will not accept a TC 500 with an entry date that is prior to the tax year. For example, an attempt to input an entry date of September 1, 2006 to the 2007 module will not take. If a tax return was not filed for the year of entry, input the TC 500 to a prior year. If the taxpayer is a first time filer and has not filed any prior year returns, input an entry date of January 1st to the tax period that was first filed.

    Using CC REQ77, input TC 500 cc 52, 54 or 56. Enter the entry date in the TRANS-DT field. Use CSED Code "P" or "S" , if known.
    Input a TC 500 exit date to CC TXMOD where the TC 500 entry date is located. Input TC 500 cc 53, 55 or 57. Enter the exit date in the TRANS-DT field. Use the same CSED Code as the TC 500 cc 52, 54 or 56.
    To input an exit date for an entry date created by the filing of a tax return (CCC "K" , "Z" or RPC "R" ).
    1. Input a TC 500 cc 52, 54 or 56 to the tax period on which the taxpayer self-identified. For the entry date, use the TC 150 date.

    2. Follow with a TC 500 cc 53, 55 or 57, with the exit date.

    Remove an entry date created by the filing of a tax return (CCC "K" , "Z" or RPC "R" ) NOTE: CCC "K" sets cc 56, "Z" sets CC 52. RPC "R" sets CC 54.
    1. Input a TC 500 CC 52, 54 or 56 to the tax period on which the taxpayer self-identified. For the entry date, use the TC 150 date.

    2. Then, input TC 502. Use the same CSED Code as the TC 500. If the account has balance due modules, address any TC 340/270/160s per (6) below.

    3. If there are other TC 500s on the module that should not be removed, re-input them with the correct PDC to post after the TC 502 or input them to an earlier module.

    Remove TC 500s on CC TXMOD.
    1. Input TC 502. Use the same CSED Code as the TC 500.

    2. If the account has balance due modules, address any TC 340/270/160s. See last paragraph.

    Remove all TC 500s, CZ freeze condition(s) created by the filing of a tax return AND remove –C freeze from the account. (Taxpayer indicates "never in a combat zone" .)−
    1. Input TC 502 to all tax periods that contain TC 500s. Use the same CSED Code as the TC 500.

    2. Follow box 4 above to remove the TC 500 or freeze condition(s) from each tax return coded CCC "K" or "Z" .

    3. If there is a TC 340, TC 160, or TC 270 on the account, (Check all tax modules with a G– and/or −I freeze.) you MUST manually input the TC 342 .00, TC 162 .00, or TC 272 .00 using CC REQ54 to remove the restriction on computation of the interest and penalties. DO NOT input TC 162 if the return is delinquent.

  6. For accounts with balance due modules, to correct the TC 340/270/160, figure the CZ suspense period for the most recent entry and exit date still on the account.

    Example:

    The most recent entry and exit date is February 1, 2009 to October 31, 2009. Add 180 days. The CZ suspense period is February 1, 2009 to April 29, 2010.

    Since the last suspense period ended in 2010, do not address any TC 340/270/160 found on tax periods 2010 and prior. However, remove TC 340/270/160, if they were created by a TC 500, when they appear on any balance due modules for tax periods 2011 and subsequent.

    Exception:

    DO NOT input TC 162 if the tax return is delinquent.

5.19.10.7.2.4  (02-01-2014)
Taxpayer Responds to Letter 2761C

  1. If the taxpayer responds, "Still in Combat Zone" and does not provide entry/exit dates, input AMS history and close the case.

  2. When the taxpayer attaches documentation such as military orders, discharge from active duty or other:

    • Documentation is NOT required for DoD dates and for other entries dated prior to 2010. Follow (4).

    • If taxpayer dates are within 60 days of documentation dates, use the taxpayer dates. If taxpayer dates disagree with documentation dates by more than 60 days, use the documentation dates. If an entry date is already present on IDRS, correct it using the criteria above.

    • Only resolve the open TC 500s. If taxpayer provides documentation for dates that are already closed, input the documentation dates on AMS. Do not change TC 500 dates that are already closed.

    • If taxpayer provides new entry/exit dates that are not on IDRS, input the dates via CC REQ77.

  3. See IRM 5.19.10.7.2.3(6), Resolving Combat Zone Accounts, for input instructions.

  4. For responses regarding CZ entry dates dated prior to 2010 and for all DoD entry dates, follow procedures below.

    If... And... Then...
    Entry date is from DoD   Input the exit date provided by the taxpayer
    TC 500 cc 52, 54 or 56 entry date is on the tax module.
    or
    The TC 500 or –C freeze condition was created by a tax return. (CCC: "K" , "Z" or RPC: "R" )
    DoD dates are not present
    1. Input the correct dates provided by the taxpayer.

    2. Remove the TC 500 or −C freeze condition created by a tax return and any manually input TC 500s that have incorrect dates.

    The TC 500 or –C freeze condition was created by a tax return. (CCC: "K" , "Z" or RPC: "R" ) AND DoD entry and/or exit dates are present. Taxpayer exit date provided is within the 180 day suspense period after the DoD exit date
    1. Remove the TC 500 or freeze condition created by the tax return.

    2. Do not input the entry and exit dates from the taxpayer. See EXAMPLE 1 below.

    Exit date provided is not within the 180 day suspense period of the DoD exit date
    1. Remove the TC 500 or freeze condition created by the tax return.

    2. Input the entry and exit dates from the taxpayer.

    The TC 500 or –C freeze condition was created by a tax return. (CCC "K" , "Z" or RPC "R" ) AND DoD entry and/or exit dates are present. TC 500 cc 52, 54 or 56 entry date is on the tax module. and exit date provided is within the 180 day suspense period of the DoD exit date.
    1. Remove the TC 500 or freeze condition created by the tax return.

    2. Do not input the entry and exit dates from the taxpayer. See EXAMPLE 1 below.

    3. Input TC 502 to remove the one on the tax module.

    The TC 500 or –C freeze condition was created by a tax return. (CCC "K" , "Z" or RPC "R" AND DoD entry and/or exit dates are present. TC 500 cc 52, 54 or 56 entry date is on the tax module. and exit date provided is not within the 180 day suspense period of the DoD exit date.
    1. Remove the TC 500 or freeze condition created by the tax return.

    2. Input the entry and exit dates from the taxpayer. See EXAMPLE 2 below.

    3. Input taxpayer exit date to close the one on the module.

    Responds they were never in the CZ or refuses to provide the requested dates.   Remove all TC 500s and the –C freeze conditions from the account.
    Responds that they served in an area that is not qualified for the CZ suspension. See IRM 5.19.10.6.2, Combat Zone Qualified Individuals and Areas for a current list.  
    1. Remove the associated TC 500 dates from the account.

    2. Send 2761C to inform the taxpayer.

    A late reply is received from the taxpayer and the TC 500s were corrected per IRM 5.19.10.7.2.5, Taxpayer Does Not Respond to Letter 2761C. The TC 500 entry date that was previously on the tax module was removed using TC 502
    or
    TC 500 cc 52, 54 or 56 was not on the tax module, but the −C Freeze was present, and the freeze condition was removed.
    Input the entry and exit dates provided by the taxpayer.
    The TC 500 entry date was set systemically by DoD and an exit date two years from the entry date was input. Remove the two year exit date and follow procedures above to determine what dates to use for the entry and exit date.


    DoD dates are January 1, 2005 to March 31, 2005. The 180 day suspense period ends September 27, 2005.

    Example:

    1: Taxpayer dates are February 1, 2005 to July 31, 2005. The taxpayer's dates are within the 180 days of the DoD exit date. Use the DoD entry and exit date. Do not input the taxpayer’s dates.

    Example:

    2: Taxpayer dates are February 1, 2005 to October 30, 2005. The taxpayer's dates are 33 days beyond the 180 days of the DoD exit date. Input the entry and exit date provided by the taxpayer. If the taxpayer does not provide you with an entry date, use the manually input entry date or the DoD entry date, whichever is earlier.

  5. Take all appropriate account actions for any other tax year when the taxpayer provides it in their response to the Letter 2761C, even if it is for a tax year not being worked by transcript.

  6. When all actions are completed, document them on AMS. If the account is controlled to you on IDRS, close your control base.

  7. For WI CSCO, retain responses to Letter 2761C in a paper file for three months or 90 days from operation received date.

5.19.10.7.2.5  (02-01-2014)
Taxpayer Does Not Respond to Letter 2761C

  1. Take the following actions when the taxpayer does not respond to the Letter 2761C, Request for Combat Zone Service Dates. See IRM 5.19.10.7.2.3(5), Resolving Combat Zone Accounts , for input instructions.

    If... And... Then...
    Taxpayer does not respond within 60 days TC 500 cc 52, 54 or 56 is present on the tax module and was not set by DoD Input TC 502 to remove the entry date.
    Was set systemically by DoD Input TC 500 with the correct cc 53, 55 or 57 and an exit date two years from the entry date.
    TC 500 cc 52, 54 or 56 is not on the tax module, but the −C Freeze is present, set by CCC" K" or "Z" or RPC "R" See IRM 5.19.10.7.2.3(5), Resolving Combat Zone Accounts, to remove.
    Letter 2761C, is returned undelivered. Research for a possible new address Another address is found Reissue the letter.
    No new address is found and TC 500 is not present on the tax module, and −C freeze is present, set by CCC "K" or "Z" or RPC "R"
    1. Input to CC ENMOD "2761C-UD" .

    2. Input TC 500 Closing Code 52, 54 or 56. The entry date is the TC 150 date.

    3. Input TC 500 cc 53, 55 or 57, with the exit date two years from the entry date.

    No new address is found AND TC 500 is present on the tax module. Input TC 500 cc 53, 55, or 57 two years from the entry date.
    Letter 2761C sent to the taxpayer's ex-spouse is returned undelivered. Research for a possible new address. See NOTE below. Another address is found for the ex-spouse. Reissue the letter to the ex-spouse. Do not reissue the letter to the taxpayer's address.
    No new address is found for the ex-spouse.
    1. Input history to CC ENMOD, "UD2761C2SP" and AMS.

    2. Do not input an exit date.

    3. If there is time remaining in the 60 day suspense period, wait for the taxpayer's reply to Letter 2761C for proper resolution of the case.

    If the primary taxpayer has replied for the ex-spouse.   Do not address the UD.

    Note:

    When a Letter 2761C is sent to a taxpayer, a copy of the letter is sent to the taxpayer's ex-spouse if a joint return was filed for the year in question, and if he/she now resides at a different address. For information on how to identify these accounts see IRM 2.4.6.6.4, Ex-Spouse Indicator.

  2. Close the IDRS control base after documenting AMS per IRM 5.19.10.7.2.1, Combat Zone Clean-up Transcript Processing.

5.19.10.8  (02-01-2014)
—Q Transcripts

  1. The IAT tools as listed in IRM 5.19.10.1, Compliance Services Collection Operation Transcript Overview must be used by Campus Compliance employees for procedures outlined in this IRM. When an action must be taken and an IAT tool is available, Campus Compliance employees with access to the tool are required to use it to complete the action.

    Note:

    If an IAT tool is not functioning properly or it is determined not to be appropriate due to a specific situation, the case should be worked without the tool, using IDRS. For more information on each tool as well as a job aid for each tool see the IAT Website.

  2. Diagnostic–Q (DIAG–Q) transcripts are generated weekly to identify potential problem modules on the Taxpayer Identification File (TIF) data base and to offer a random review of the TIF's content. These transcripts provide a means to identify and remove unnecessary accounts from the TIF files. SB/SE CSCO works BMF and WI CSCO works IMF.

  3. The DIAG-Q transcripts will be identified by a one character type code: Y, X, M, D, E, O, F, R, 1-9, A, S, P, G or C in that priority order. The type code is printed in the transcript heading, and each type is sorted so that it prints together, except types F, O, and M. For additional information on DIAG-Q Transcripts, refer to IRM 2.9.1.18, Diagnostic Transcripts, and IRM 2.9.1.19, Reason Codes General Processing Information.

  4. Every TIF module contains an RC reflecting the highest priority criteria for which the module is being retained. Understanding the RC is sometimes necessary when resolving numeric type (1-9) Diag-Q transcripts. The most common RCs found on Collection Diag-Q transcripts modules are:

    • Balance Due: 55, 6I, 6N, FF, PA, PB, PC, and PD

    • Return Delinquency: EE, QQ, SS, T1, T2, T3, T4 and T5

    • Freeze conditions: 33

    • Unpostable: BU

    • Open Control Base: UA, UB, UM, and US

5.19.10.8.1  (02-01-2014)
General Procedures for Diagnostic–Q Transcripts

  1. Review Diag–Q transcripts immediately upon receipt and process as follows: return or forward the following per campus directions to User Support or to the appropriate area:

    • Type P

    • Type A, unless requested by CSCO through User Support

    • Freeze Code −Z− Y−, or −X

    • Freeze Code −A or −L without a −W, −V, or −Y

    • Issue is not a Collection issue

    • Open control base for a function other than Collection

    • Transcript does not meet criteria for generation

    • A credit balance with a settled return and ASED is more than 180 days (six months). If the ASED is within 180 days, route to the Statute function.

  2. If the transcript shows an open CSCO control base (upper right corner), route to the employee or group assigned. If the transcript shows an open territorial office Collection control base, check the history section to determine if this is the first route. If it is the first route, forward to the appropriate territorial office employee; if it is other than the first route, close the control and forward all pertinent information and transcript to Headquarters for further review with detailed explanation.

  3. The Balance Due/TDA Section will process the following types, if there is no open control base:

    • Type C

    • Type S with the following RCs: 55, 6I, 6N, 77, FF, MM, PA, PC, YY, **, 33 (Freeze codes –C, −F, V−, G−, −I, −V, or W− only), and PD (When Status code is 43,44, 47, 48, 50 or 51 only)

    • Type M

    • Numerics with TC 150 zero, credit, or debit balance

  4. The Return Delinquency/TDI Section will process the following types, if there is no open control base:

    • All Type D

    • All Type E

    • Type R with no TC 150 or TC 240

    • Numerics with no TC 150

  5. Each CSCO establishes a monitoring system to ensure the expected action occurs when a Diag–Q transcript is resolved. The review cycle depends on the action taken or expected.

  6. CSCO should monitor the types of Diag–Q transcripts generated to identify trends, determine where additional training or review is needed, and to identify necessary procedural or system changes. Communicate all pertinent information along with the TIN to Headquarters following your campus direction for further review.

  7. If unable to resolve the Diag–Q transcript or if the Type is 5 or higher, notify Headquarters following your campus directions.

  8. If the module on the transcript is no longer on IDRS, take the appropriate action.

  9. For research procedures, see IRM 5.19.10.5.1, General Procedures For All Transcripts. Document AMS with the following history item, DIAG#RSHRD, for diagnostic credit research.

  10. If there is a −V, −W or −VW on the account, see IRM 5.19.10.5.1, General Procedures For All Transcripts.

  11. If there is a −Y freeze on the account, with a TC 470 in the module, and the status is 71, input a TC 472. Document AMS with actions.

    1. If the CSED is within six months of expiring and there is a TC 470 on the module, see IRM 5.19.10.5.6, Claim Pending Collection Statute Transcript (AM 23W). The TC 470 is unnecessary.

    2. If a transcript has generated with a −Y freeze for any other reason, obtain research and notify Headquarters following campus directions.

  12. If there is a TC 608 on the module see IRM 5.19.10.4, Collection Statute Expiration Date (CSED) Verification and Correction, all subsections. See IRM 5.19.10.5.2, PMTEXPCSED Transcripts, and the appropriate general section. Make sure the CSED statute law has been followed.

  13. Each campus should establish an inventory control system to maintain receipts, closings and current inventories.

5.19.10.8.2  (02-01-2014)
Diagnostic–Q, Type C

  1. Type C Diag-Q transcripts are generated when the CSED has expired and both of the following conditions exist.

    1. The RC is 55, 6I, 6T, 6N, PA, PB, PC, or PD, and

    2. The current service center (SC) status is 19 through 89, (except 23, 27–40, 45, 52–55, 59, 62, 65–70, 74–88).

  2. Some modules, with RC 55, are brought to IDRS for the first time, and the CSED may have already expired. Most of these will age off in one week.

    1. If no other retention criteria remains on the module or account, no follow-up transcript will be generated.

    2. If retention criteria exists, a follow-up transcript will generate whenever there is activity on the module; otherwise, the module will drop from the TIF during the weekend update following the date of the transcript.

5.19.10.8.2.1  (02-01-2014)
Processing Diagnostic–Q, Type C

  1. Review the module for retention criteria and a TC 608. If any are found, resolve the issue. If the latest CSED has expired, there should be a TC 608 in the module.

    1. If there are retention criteria on the module, resolve them and allow the computer to update.

    2. If the module has more than one assessment, review the payments to make sure they were not made before the CSED. Ensure IRC 6502 has been followed. If IRC 6502 has been violated, take the necessary action to resolve the issue. Follow procedures in IRM 5.19.10.5.2, PMTEXPCSED Transcripts, when payments have been applied after the CSED.

    3. Cases in ST 24 (Queue) should be reviewed for tax liability and expired statutes. If the CSED has expired, a TC 608 should be in the module. Resolve all retention criteria.

    4. If the module contains −C and −I freeze codes and a TC 608, input TC 290.

  2. If there is an "N" behind the TIN, it is a NMF account. Follow the procedures below:

    1. Research all transcripts on ANMF to determine if the account is open or closed.

    2. If the module is closed on ANMF and the SC Status is 89, input STAUP 12. Document AMS with the following history items: DIAGCASC, Diagnostic C ANMF System closed.

    3. If the module is still open on ANMF, route the TIN to the NMF Operation. Refer to the Figure below, Fax Request for Action on NMF Account. This template is designed exclusively for the NMF Operation. This figure should be used as a group FAX, and the contact person should be designated by the campus. Notate "CSED Issue" . Document AMS with the following history item, DIAGCASOR, Diagnostic C ANMF System open Route.

      Figure 5.19.10-5

      Fax Request for Action on NMF Account
      To: ______________________________
      FAX Number: (____)_______________________
      From (contact person): ______________________________
      Organization/Campus_____________________ Phone Number: (____)________________________
      TIN MFT TAX PERIOD REQUEST
             
             
             
             
             
             
             
             
             
             
             
      Confidentiality Notice: This communication is intended for the sole use of the individual to whom it is addressed and may contain information that is privileged, confidential, and exempt from disclosure under applicable law. If the reader of this communication is not the intended recipient or the employee or agent for delivering the communication to the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication may be strictly prohibited. If you have received this communication in error, please notify the sender immediately by telephone (collect, if necessary) and return the communication to the address above via the United States Postal Service. Thank you.

5.19.10.8.3  (10-15-2012)
Diagnostic–Q, Type S

  1. Type S Diag–Q transcripts with the following RCs: 55, 6I, 6N, 77, FF, MM, PA, PC, YY, **, 33 (Freeze codes –C, −F, V−, G−, −I, V−, or W− only), and PD ( When ST code is 43,44, 47, 48, 50 or 51 only) are generated when a module is in:

    • ST 46, 49, 50, 51, 76, and 77 and the status did not update within 5 cycles, or

    • ST 48 and the number of cycles in the delay has passed, or

    • ST 47 and the status did not update timely, or

    • ST 23 and no control base (immediately)

  2. A follow-up transcript generates every 5 cycles, as long as the module meets the criteria in (1) above. CSCO is responsible for working these transcripts; there are still weekly computer programs designed to update the statuses automatically.

  3. If the transcript is a follow-up, check AMS or IDRS history section; if DIAGSRHRD is present, document AMS and close the control.

  4. Process using General Instructions in IRM 5.19.10.5.1, General Procedures For All Transcripts and IRM 5.19.10.7.2, Combat Zone Clean-Up Transcript.

5.19.10.8.3.1  (09-15-2010)
Processing Type S

  1. If there is an issue that is not addressed below, contact Headquarters analyst following local campus directions.

  2. The following If/And/Then Chart provides procedures for processing a module the statuses are mismatched, CSED is not imminent or is imminent with and without freeze codes. Follow the following procedures to process Type S:

    Figure 5.19.10-6

    If... And... Then...
    Statuses are mismatched/ cycle delay has expired. CSED is imminent/no other restriction/Balance due (amount n/a).
    1. Document AMS with the following history item, "DIAGSCSED," then close the control.

      Note:


      When the CSED is imminent, the only status the module will change to is 12. All restrictions must be removed before the module goes to the retention file.

    2. If a follow-up transcript is received, check the IDRS history section as well as AMS for the above history item; if found, document AMS and close. If not found, see 1).

    CSED is imminent, Freeze Code I—
    1. Resolve I− per IRM 5.19.10.8.7.3, Freeze Code I− (Credit Interest Restricted).

    2. If a follow-up transcript is received, and no additional restrictions are found, close the control. Refer to the Note in the first Then 1) at the top.

    3. Additional follow-up transcripts, refer to the Note in the first Then 2).

    CSED is imminent, Freeze Code −I.
    1. Resolve −I following IRM 5.19.10.8.7.2, Freeze Code −I (Debit Interest Restricted).

    2. If a follow-up transcript is received, and there are no additional restrictions, refer to the Note in the first Then 1).

    CSED is imminent, Freeze Code W−.
    1. Resolve W− per IRM 5.19.10.5.6, Claim Pending Collection Statute Transcript (AM 23W).

    2. If a follow-up transcript is received, and there are no additional restrictions, refer to the Note in the first Then 1) above.

    CSED is imminent, Freeze Code −V or −W (TC 520) or Code −Y (TC 480/780/782)
    1. If there is an unreversed TC 470 in module, input TC 472.

    2. If a follow-up transcript is received, and there are no additional restrictions, refer to the Note in the first Then 1) above.

    CSED is imminent, Freeze Code −Z (TC 941). Contact Criminal Investigation and follow their guidelines.
    CSED is imminent, Freeze Code A− Resolve per IRM 5.19.10.5.5, CSED (SPC3) Transcript.
    CSED is not imminent.
    1. Search for restrictions and resolve them.

    2. If there are no restrictions found, check IDRS/AMS history section to determine last action taken and check IDRS for the any updates to the module.

    3. If the last action was a STAUP 22XX and the module shows no updates, input history item DIAGSCPH (CPH = Computer Problem sent to Headquarters). Route TIN to Headquarters for disposition.

    4. If the last action was a STAUP 22XX and the module has been updated, input a STAUP 2201 if the amount is below the deferral amount. If the amount is above the deferral amount, input STAUP 2200. Monitor the module to see if the module updates to ST 23 or ACS.

    5. If the module doesn't update, route TIN to Headquarters. If module updates, close the control.

    If the module shows SC48/MF58 Balance is below the deferral amount.
    1. Input CC RECON, if module updates, use history item RECON.

    2. If module doesn't update, after CC RECON, input CC STAUP 2201. Close and input history item STAUP 2201.

    3. If a follow-up transcript generates, check the IDRS/AMS history section. If RECON or STAUP 2201 has already been done, input CC MFREQD. Close the control with history item MFREQD.

    4. If another transcript generates and the history section shows all three history items, RECON, STAUP 2201 and MFREQD, Contact Headquarters following campus directions.

    If the module shows SC6X/MFXX
    1. Default IA using CC IADFL and suppress the default notice.

    2. CC STAUP 2201

    3. Use history item IADFL/STAUP.

    Balance is above the deferral amount
    1. Determine if the taxpayer should be reinstated, or defaulted.

    2. If the taxpayer should be reinstated, follow IRM 5.19.10.10.6.3, IAAL Review of Restricted Interest and Penalty Account - CSCO Processing. Document AMS with the following history item, IA/REINST, and close.

    3. If the module should be defaulted, use CC IADFL and input CC STAUP 2200. Document AMS with the following history item, IADFL/STAUP, and close.

    If the module shows SC48/MF58
    1. Input CC RECON; if module updates, use history item RECON.

    2. If the module doesn't update after RECON, input CC STAUP 2200. Document AMS with following history item, STAUP 2200, and close.

    3. If a follow-up transcript generates, check IDRS/AMS history section for the command codes in 1) and 2). If found, input CC MFREQD. Document AMS with the following history item, MFREQD, and close.

    4. If another transcript generates with all three history items, RECON, STAUP 2200 and MFREQD, contact Headquarters analyst following campus directions.

5.19.10.8.4  (02-01-2014)
Diagnostic–Q, Type E

  1. Type E transcript generates when a TC 904 is sent to the TIF because the annual Master File leveling process has removed the module to the retention register and a corresponding module exists on the TIF with one of the following conditions:

    • Module status of 19-21, 46 (IMF CZ Only), 47, 48, 50, 56, 58, 60, 61, 63, 64, 89 (with Pending TC 500 or Pending TC 470.

  2. These transcripts are generated once a year, BMF in cycle 3 and IMF in cycle 4. Most remain on the TIF until action is taken to cause the module to drop.

  3. No follow-up transcripts are generated. However, if not resolved, other types of Diag–Q transcripts may generate (For example: Type S or Type Numeric).

  4. Review the module to determine if it should be dropped or removed from the TIF or reestablished on the Master File.

  5. If recent activity such as a pending transaction, open control or unpostable appears on the account, take no action. Otherwise, resolve any restrictive conditions and close.

5.19.10.8.5  (05-01-2007)
Diagnostics–Q — Numerics

  1. There are several conditions that will cause a Type Numeric Diag–Q transcript to generate. The most common criteria for numeric Diag–Q transcripts received in CSCO are:

    • The RC has not changed for one year

    • There has been no activity on the module for one year and

    • There is no open control base.

  2. For IDRS module retention criteria, refer to IRM 2.9.1.13, IDRS Module Retention Criteria for the TIF.

  3. These transcripts generate as soon as the criteria is met, and again each year on the anniversary of the last activity. The Type number 1–9 indicates the number of years since the RC was changed or updated.

  4. Follow-up transcripts are not generated. However, if a numeric Diag–Q is not resolved, the criteria holding the module on the TIF may also cause generation of alpha type and annual numeric Diag–Qs.

  5. Unlike some alpha type Diag–Q transcripts, numerics 1–9 will not drop from the TIF when action is not taken. Each module must be analyzed and, in most instances, action must be taken to reactivate the module or remove it from the TIF. Type 5 - 9 should be reviewed by your campus and Headquarters. You should determine if the generation of the transcript is necessary, and the time frame is right or if feedback needs to the shared with responsible operation.

5.19.10.8.5.1  (02-01-2014)
Processing Numerics

  1. When resolving a balance due/TDA numeric Diag–Q, follow the table below.

    Figure 5.19.10-7

    If... Then...
    Latest CSED expired
    1. Look for a restrictive condition such as a I− freeze code and credit. Resolve all credit issues per IRM 5.19.10.5.2, PMTEXPCSED Transcripts.

    2. Check the payment date. If the RSED on the payment has expired, follow IRM 5.19.10.5.1, General Procedures For All Transcripts, to transfer the payment to the XSF or URF.

    Note:

    If module contains a TC 582, resolve any retention and freeze code.

    Pending TC 470 (no cc, cc 94, or cc 98)
    1. Monitor the module until the transaction posts.

    2. If the input of the transaction has been more than three weeks, refer to Type S procedures.

    Module within six months of the latest CSED Refer to IRM 5.19.10.8.3, Diagnostic-Q, Type S. Resolve all credit issues.
    Statuses mismatch and cycle delay has passed Refer to IRM 5.19.10.8.3, Diagnostic-Q, Type S.
    Master file balance due notice issued within the past 5 weeks Monitor. If more than 5 weeks, refer to, IRM 5.19.10.8.3, Diagnostic-Q, Type S.
    A− Freeze Code Look for an expired CSED; refer to IRM 5.19.10.5.5, CSED (SPC3) Transcript.
    V− Freeze Code Look for outstanding liability on another account. Refer to IRM 5.19.10.3.10, Generation of CP 44 and CP 188 or IRM 5.19.10.5.8, Non-Master File Liability (NMFL) Transcripts.
    I− Freeze Codes
    1. If there is a TC 608 and/or lien on the module, the restrictive condition must be resolved in order for the lien to release. TC 582 is self releasing when the CSED expires or the module status is 12.

    2. If the module contains a credit and TC 608, follow IRM 5.19.10.5.2, PMTEXPCSED Transcripts.

    3. If no TC 608 is present, look for other debit modules and transfer the credit.

    4. If there are no other OBs, verify the RSED. If the statute has not expired, research RTR to verify the credit.

    5. If the credit belongs to the taxpayer, prepare form for manual refund. Refer to the General Instructions and IRM 21.4.4, Manual Refunds, and notify the taxpayer.

    6. If the credit does not belong to the taxpayer and you can determine where it should be applied, transfer the credit. Otherwise, move the credit to the XSF or URF per IRM 5.19.10.5.1, General Procedures For All Transcripts..

    7. If the RSED has expired, move the credit to the XSF.

    −I Freeze Code Debit interest is restricted. Refer to IRM 5.19.10.8.7.2, Freeze Code −I (Debit Interest Restricted).
    −V, −W or ST 72 Update AMS and close case.
    −L Freeze Code
    1. Open litigation case. Input the appropriate history.

    2. If the module shows there was a previous −L and credit remains, contact Examination for disposition of the credit.

    Unreversed TC 914, TC 916, TC 918 present Update AMS and close case.
    Unreversed TC 470 Refer to IRM 5.19.10.5.3, Accounts Maintenance Claim Pending (AM06W) Transcripts or IRM 5.19.10.5.6, Claim Pending Collection Statute Transcript (AM 23W).
    OIC Issues See issues below.
    1. For Numerics 1 and 2, issued due to an open TC 480, take no action and input AMS history "TC 480 less than (<) 3 years" . A submitted Offer can pend for up to three years

    2. Module has no CSED (TC 971 AC 32). Fax Form 4442 to OIC, notate "CSED Issue" .

    3. TC 470, see above.

    4. If the module was previously in OIC, and the module was settled and then another credit posts (CSED not an issue), no additional P&I should be assessed.

    5. If the module was previously in OIC, a TC 608 wrote off debit amount, and credit posts (has a date after the CSED), see IRM 5.19.10.5.2, PMTEXPCSED Transcripts.

    Pending and unpostable transactions Monitor the transaction until it posts, if three weeks have passed, see Type S procedures.
    Location Codes See IRM 5.19.10.5.11, NOMRG-TDA Transcript NM07.
    Current ASGNI/ASGNB history items/control bases See issues below.
    1. Current ASGNI/ASGNB, input history item.

    2. Resolve per history item.

    3. Control bases; when necessary, close base (merge). If control base is recent, close your module to the control base.

  2. The most common cause of a Balance Due/TDA Diag–Q numeric transcript is a condition that prevents a module from updating to a balance due or TDA status. See Exhibit 5.19.10-1, Restrictive Conditions.

  3. In most cases, a Balance Due/TDA Diag–Q numeric transcript can be resolved by identifying the restrictive condition and removing it. If the CSED is within 180 days, look for available credits in Excess Collections, Unpostable and on TDI module.

  4. Research IDRS.

    1. If no data, take the appropriate action.

    2. If recent activity indicates the module is current or the transcript module status has updated since the transcript generated, input History Item DIAG # CR NT and close.

    Example:

    The module has a current (within one year) ASGNI/ASGNB or history item indicating the balance due notice process or TDA is in active inventory.

    Example:

    The module is now in a Master File and SC balance due notice status and the next notice is not due to be issued.

    Example:

    There is a satisfying transaction that has been pending for less than three cycles.

5.19.10.8.6  (05-01-2007)
Reason Codes

  1. An RC is assigned to each module on the TIF to explain why it is present on the TIF. The RC on a diagnostic transcript is the highest priority RC related to that module. For detailed information, or additional RCs, see IRM 2.9.1–1, Reason Codes.

5.19.10.8.6.1  (02-01-2014)
Reason Code 33

  1. If the RC is 33, and:

    1. The freeze code is not a Collection responsibility, route to User Support with explanation.

    2. If the freeze is a W−, resolve per (c) or (d) below.

    3. If the freeze is a L− (SC ST 73), and there is an indication of an open case, contact the employee or group responsible for the open case. Change the TC 470 closing code to other than 99. Document AMS with history Item, DIAG#OPNCS.

    4. If there is no freeze code present in the FZ portion of the transcript, review the module for an unreversed TC 470 and resolve accordingly. (This occurs when a TC 470 cc 90/93 is input to a module in notice status or a TC 470 00/90/93 is input to a module in TDA status). The Master File W− freeze is systemically released after 22 cycles, but TIF processing does not release the freeze on balance due notice/TDA status update.

5.19.10.8.6.2  (05-01-2007)
Reason Code -EE or QQ

  1. If research shows the RC or module E cycle (mod E cyc) has changed, close the control with the following history item DIAG(X)CRNT, and see example below.

    Figure 5.19.10-8

    *TAX PERIOD 30 * 199312 Reason Code - EE MOD E CYC-200212

  2. The following If/Then Chart provides procedures to process a module when both the SC and Master File statuses are 23, with either RCs QQ or EE, and without.

    Figure 5.19.10-9

    If... Then...
    The RC is QQ or EE or the TIF module TDI indicator is not closed or blank.
    1. Prepare a routing slip to the Return Delinquency/TDI function to resolve the TDI issue.

    2. Input History item, DIAG#TOTDI.

    Not as above.
    1. Review the module for retention criteria causing it to be retained on the TIF (ex: RC 33 or Ux).

    2. Resolve retention criteria.

    3. Input History Item DIAG#RC.

    4. Monitor to ensure expected action occurs.

5.19.10.8.7  (05-01-2007)
Freeze Codes

  1. A freeze code is assigned to restrict a module based on a TC. Refer to Document 6209, Section 8A-4,Master File Freeze Codes and IDRS Status 48, for a detailed explanation of each freeze code.

  2. If the module contains a freeze code and TC 582, see IRM 5.19.10.5.1(12), General Procedures For All Transcripts.

5.19.10.8.7.1  (09-15-2010)
Freeze Code −E

  1. If the module contains an −E freeze and there is no TC 150 posted, document AMS with the following history Item DIAG#TOUS. Prepare a routing slip, and send to User Support.

5.19.10.8.7.2  (09-15-2010)
Freeze Code −I (Debit Interest Restricted)

  1. If there is an −I freeze code, debit interest restriction, with a TC 340 on the module, process as follows:

    1. Research the reason for the restricted interest and re-compute the module again using the declaration and the postings on the module. Example: If the taxpayer has been given a refund from the module by another area, this should be a clue to redo your computation of interest.

    2. If the original computation was in error, take the necessary steps to adjust the account.

    3. If the computation agrees with the original computation and/or the taxpayer has been given a refund, the case should be verified by the Lead, and Headquarters should be contacted.

    4. If a TC 530 was input subsequent to an unreversed TC 520, document AMS with a history item and close.

    5. If the module contains the following freeze codes −CI, and there is a TC 608 posted, check the entity to see if there is an exit date.

5.19.10.8.7.3  (10-15-2012)
Freeze Code I- (Credit Interest Restricted)

  1. If there is an I- freeze code present on the module, SC status is 12, MF Status is 60/22 with a credit balance, check status section to see if the account was once in ST 60. If you determine that additional P&I should be assessed and the IA should be reinstated, refer to IRM 5.19.10.10.6.3, IAAL Review of Restricted Interest and Penalty Accounts-CSCO Processing. Since the Master File and IDRS have different tolerances, this sometimes causes an installment account to stall in the system. Follow the procedures below:

    1. If there is an invalid TIN, research for the valid TIN. If found, transfer the credit to the valid SSN account using ADD24. Use the date the credit became available.

    2. Research TIN for other balance due modules. If found, transfer the credit to that module using ADD24. Use the date the credit became available.

    3. If no other accounts can be found for the invalid TIN, research the payment using RTR and Integrated Submission and Remittance Processing System (ISRP). If no information is received, request the payment voucher and/or return.

    4. When the payment voucher is received and the payment doesn't belong to the taxpayer, move the entire payment to the appropriate taxpayer's account. If the payment belongs to the taxpayer, and the voucher shows the same TIN, refer to (e) below.

    5. Prepare the necessary forms for a manual refund. Notate the form with the reason for the refund. Monitor the module until the status updates to ST 12. Document AMS with the history Item, DQ#SBATDBA. Refer to IRM 21.4.4, Manual Refunds.

    6. If no voucher is received, send a letter to the taxpayer questioning the invalid TIN. If the taxpayer doesn't respond within 45 days, or the letter is returned undeliverable, refer to (g).

    7. If no voucher is received, and the letter was undeliverable, prepare necessary forms to transfer the credit to Excess Collections. Input a TC 971 AC 296 unless the credit is refund statute barred. Document AMS with the appropriate history items.

5.19.10.9  (02-01-2014)
EFT Listings

  1. The IAT tools as listed in IRM 5.19.10.1, Compliance Services Collection Operation Transcript Overview must be used by Campus Compliance employees for procedures outlined in this IRM. When an action must be taken and an IAT tool is available, Campus Compliance employees with access to the tool are required to use it to complete the action.

    Note:

    If an IAT tool is not functioning properly or it is determined not to be appropriate due to a specific situation, the case should be worked without the tool, using IDRS. For more information on each tool as well as a job aid for each tool see the IAT Website.

  2. This subsection has procedures to monitor the DDIA electronic exchange of bank information and payment data between the Automated Clearing House (ACH) and the banks.

  3. To monitor this data, EFT Listings issue on a daily basis when problems occur. Some types of problems include:

    • Incorrect bank account number and/or bank routing number

    • Insufficient funds in the taxpayer checking account

    • Incorrect taxpayer name/does not match bank account name

    • Taxpayer account is not in ST 60

  4. For more information on the DDIA program, refer to IRM 5.19.1.10, DDIA Monitoring Procedures - CSCO Processing.

  5. If a taxpayer requests a DDIA, see IRM 5.19.1.5.4.14, DDIA.

5.19.10.9.1  (02-01-2014)
CC EFTAD for Problem ID and Correction - CSCO Processing

  1. CC EFTAD displays several Payment Statuses:

    Payment Status Definition
    [blank] The payment request was not yet sent to the bank.
    [A] The prenote or payment request was sent to the bank and is good.

    Note:

    The bank can revoke this up to 60 days later.

    [C] Is always associated with a payment request for a dollar amount greater than .00 and indicates our request for payment was not honored.
    [D] Denotes a deferred payment and posts when CC EFTOF was used to turn off a payment request.

    Note:

    Payment Status [D] also posts if the account leaves ST 60 within 15 days of the payment request.

5.19.10.9.1.1  (04-28-2008)
Verify EFT 1240 Run - CSCO Processing

  1. Access CC EFTAD with definer "D" and the current date, each day, to verify the EFT 1240 run is completed by Computer Services. Verify:

    1. The tape was prepared by checking the payment request status

    2. If the Payment Status is "[A]" , the tape was prepared and sent to the correspondent bank; otherwise, contact Computer Services to schedule the run.

    3. The Deposit Status at the top of the EFTAD display is "[V]" , denoting the deposit tape was transmitted to the bank

    4. If Payment Statuses or the Deposit Status is "[ ]" (blank), notify Computer Services immediately.

    5. There is no scheduled DDIA activity for that day if the response to CC EFTADD is "NO DATA" .

  2. Verify the cause of Payment Status "[ ]" (blank):

    1. Determine if the DDIA was revised within 15 days of the payment, but CC EFTOF was not used to turn off the payment request. These accounts appear on EFT 10 and must be worked promptly.

    2. Determine when a new prenote was done by using CC EFTAD with the taxpayer’s TIN.

    3. If the prenote was not changed, check CC IADIS or CC ENMOD to see if the agreement was revised.

    4. Notify Computer Services immediately if neither of the preceding conditions above created the Payment Status "[ ]" (blank).

  3. Access CC EFTAD with the taxpayer’s TIN to:

    1. See a summary of the DDIA activity for the taxpayer

      Example:

      Research for a payment request to use CC EFTOF to turn it off.

    2. Check the Payment Status, to see if the tape of the correspondent bank was created. This enables advising a taxpayer whether they should contact their bank after researching CC EFTAD

    3. Determine the date an EFT 18 generated, but no evidence exists it was worked


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