Change the control base from A status to B status using category code NMRG.

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

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.

When the Location Code posts to IDRS:

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.

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

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 combat zone indicator is present.

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:

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

The notification should include the following:

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

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.

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 combat zone. 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.

Taxpayers working in combat zones also have additional time to:

Civilian taxpayers do not qualify for exclusion of income earned while working in a combat zone. At this time, combat zone 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.

Refer civilian taxpayers in support of the Combat Zone to the following IRS publications for further information:

A taxpayer serving in a Combat Zone or Contingency Operation 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.

If there is someone acting on behalf of the person in a combat zone or contingency operation 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:

If it is not possible for the spouse of someone serving in a combat zone or contingency 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 combat zone or contingency operation. The statement must be signed by the spouse filing the tax return and attached to the return.

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

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.

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

For Combat Zone entry dates of 2010 and later, refer to IRM 5.19.10.6.2(7), Combat Zone Qualified Individuals and Areas.

When an account is identified as combat zone through a phone call or correspondence and the Combat indicator is “blank”, “0” or “2”, input a TC 500 with the correct closing code and entry date.

If the Combat indicator is "1" , do not input TC 500. Update AMS history with taxpayer information, including any entry or exits provided.

Refer to IRM 5.19.10.7.2.2, Combat Zone Research, and IRM 5.19.10.7.2.3, Resolving Combat Zone Accounts, in the situations below. Before another TC 500 is input, the account must be researched to determine the correct status of the combat zone designation.

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

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

Follow the procedures below to notate and route the inquiry:

Inform the taxpayer the case is being referred to another office for consideration. For correspondence, send Letter 86C.

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

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

Take initial action on combat zone e-mail in two business days. E-mail cases take priority over combat zone transcripts.

If it is necessary to control the account, use case category code, "CZ01" .

Forward e-mail responses to Letter 2761C, to the contacts listed for combat zone contacts on SERP Who/Where. Ensure there is enough information in the e-mail for the recipient to locate the taxpayer’s Social Security number.

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

For Combat Zone 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.

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

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

For combat zone entry dates prior to 2010 follow below.

When the e-mail provides the name, address, date of birth (DOB) and date of combat zone 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.

For questions regarding combat zone, research Publication 3, Armed Forces Tax Guide, before responding by e-mail.

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

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

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 tax return information, nor include or request financial or other personal information.

Report time spent under OFP 710-82361.

When the taxpayer marks a tax return "Combat Zone" and no valid Department of Defense (DoD) dates appear on their account, a CP 04 notice 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.

Computer Condition Code (CCC) "Z" or "K" is coded for combat zone 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 will be systemically reversed. Interest and penalty restriction is not reversed.

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

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

Check IRM 13.1.6.2.1, Tips for Oral Communication.

Ensure the taxpayer is responding to CP 04. If the taxpayer has a different issue, see (22).

Verify authentication per IRM 21.1.3.2.3, Required Taxpayer Authentication.

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

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

Get the following information:

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.

To determine if more information is needed, follow below:

For phone responses, follow procedures below. If taxpayer requests confirmation, send Letter 2761C or other appropriate letter.

For written responses, research AMS history for information that may have been provided previously by phone. If taxpayer is expecting a response, send Letter 2761C or other appropriate letter. Follow the procedures below.

Control the account in "S" status using activity code "CP04mmddyy" with the appropriate follow up date and category code "CP04" .

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

When complete information is received follow IRM 5.19.10.6.2(11) through (13), Combat Zone Qualified Individuals and Areas, to determine if documentation qualifies the taxpayer for the tax provisions or if taxpayer should be disqualified. If qualified, update the account using the procedures below. If the taxpayer has a balance due and an installment agreement or CC STAUP will be input, follow IRM 5.19.10.6.5.6 CP 04 - Resolving a Balance Due.

For instructions on input corrections, see IRM 5.19.10.7.2.3(8), Resolving Combat Zone Accounts.

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

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

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

Follow below for other issues:

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

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

Follow the procedures below:

If talking to the taxpayer, provide the taxpayer with the following additional information.

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

For all others, follow the procedures below.

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.

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

For accounts with Combat indicator 1, ensure the combat zone 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.

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

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

Interest will systemically resume on Master File (CC IMFOLT) once the combat zone suspense period ends if:

If you are providing a payoff amount to the taxpayer, 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.

For inactive combat zone participants (Combat indicator 2), refer to IRM 5.19.1.5.2, Can Full Pay Balance Due Now (Payoff), or IRM 5.19.1.5.4, Full Pay Within 60 or 120 Day Agreement.

Update AMS history with information about the payoff request, balance due and combat zone dates.

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

For all others, follow the procedures below.

For accounts with Combat indicator 1, ensure the combat zone 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 combat zone 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.

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

If the taxpayer did not have an installment agreement, once the combat zone suspense period expires, balance due notices to the taxpayer will resume.

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

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

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

If interest and penalty is restricted on a Status 60 installment agreement 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 installment agreement reinstated. When setting up an installment agreement on a combat zone account, computation of interest and penalty is not required unless the taxpayer requests a balance.

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

Update AMS history with information about the installment agreement request and combat zone dates.

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.

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.

Document each action taken on the case in AMS history. Include any dates provided by the taxpayer, the dates of any Letters 2761C 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 combat zone condition without contacting the taxpayer.

The Combat indicator and controlling TC 500s can be found on Command Code (CC) IMFOLE.

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

For unreversed Department of Defense (DoD) TC 500s less than two years from the transcript date, do the following:

The following chart lists TC 500 closing codes for entry date, closing codes for exit date and identifies the designated combat zone:

The source of the TC 500 on CC IMFOLE can be identified by the Document Locator Number (DLN).

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

After researching the account, follow the procedures below for resolving combat zone accounts.

For AM Toll-free only, do the following:

For all others, follow the procedures below.

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

Address ALL other unreversed TC 500s as follows:

For any unreversed TC 500s two years or older, that cannot be resolved using the procedures above:

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

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

To correct the TC 340/270/160, figure the combat zone suspense period for the most recent entry and exit date still on the account.

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 tax periods 2011 and subsequent.

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

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

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

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

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

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.

When all actions are completed and documented on AMS, close the IDRS control base.

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

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(7), Resolving Combat Zone Accounts , for input instructions.

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

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.

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

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

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 5.19.10-8

When resolving a balance due/TDA numeric Diag–Q, follow the If/Then Chart below.

Figure 5.19.10-9

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.

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.

Research IDRS.

If the reason code is 33, and:

If research shows the reason code 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 5.19.10-10

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

Figure 5.19.10-11

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.

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

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 "60" . If you determine that additional P&I should be assessed and the Installment Agreement 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:

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

Verify the cause of payment request status "[ ]" (blank):

Access CC EFTAD with the taxpayer’s TIN to:

EFT 1240 are assessed on control-D by CSCO on a daily basis and must be worked within one day of receipt.

CSCO contacts Computer Services immediately if the EFT 1240 listing is not received.

Review the listing to ensure no error records are present. If records are present, notify the Computer Branch IMMEDIATELY; otherwise, destroy the listing.

EFT 12 displays a listing of "Expected Deposit Dates not Sent to Bank" , this listing must be processed within 5 working days of receipt. This means there was DDIA information, prenotes and payment requests, to be sent to the correspondent bank on that date, but we did not do the necessary transmission.

If a date appears in this section, the liaison notifies the Computer Branch immediately upon receipt for correction.

If Computer Branch is not notified within two days, we must: