21.3.1 Taxpayer Contacts Resulting From Notice Issuance

Manual Transmittal

September 12, 2017

Purpose

(1) This transmits a revised IRM 21.3.1, Taxpayer Contacts Resulting From Notice Issuance.

Material Changes

(1) Editorial changes were made throughout IRM 21.3.1. The web addresses, IRM and legal resources were checked and corrected, where necessary.

(2) IPU 17U1096 issued 07-06-2017 IRM 21.3.1.1 adding section for Program Scope and Objectives which causes renumbering of IRM sections.

(3) IPU 17U1096 issued 07-06-2017 IRM 21.3.1.2, Notice Types and Definitions moved to new section of IRM 21.3.1.1.5 under definitions.

(4) IPU 17U1096 issued 07-06-2017 IRM 21.3.1.5.5 updating If/Then Chart to clarify procedures.

(5) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.5 updated refund time frame.

(6) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.6 updated refund time frame.

(7) IPU 17U1096 issued 07-06-2017 IRM 21.3.1.5.8 updated If/Then Chart to add procedures for addressing a taxpayers inquiry when they receive less of a refund and disagree with math error.

(8) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.8 updated refund time frame.

(9) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.9 updated refund time frame.

(10) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.14 updated refund time frame.

(11) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.21 updated refund time frame.

(12) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.31 added terminology TRNS41.

(13) IPU 17U1096 issued 07-06-2017 IRM 21.3.1.5.51.2 added procedures for processing modules containing –C Freeze

(14) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.56 updating telephone extensions and toll free number for AUR referrals.

(15) IPU 17U1096 issued 07-06-2017 IRM 21.3.1.5.56 adding instructions for taxpayers requesting to fax AUR notice responses.

(16) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.56 updated (4) If/Then Chart to provide updated IRM reference for IDTVA case routing.

(17) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.57 updating telephone extensions and toll free number for AUR referrals and added example for loose Forms/Schedules.

(18) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.59 updating telephone extensions and toll free number for AUR referrals.

(19) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.60 updating telephone extensions and toll free number for AUR referrals.

(20) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.61 updating telephone extensions and toll free number for AUR referrals.

(21) IPU 16U1737 issued 12-12-2016 IRM 21.3.1.5.65 revised verbiage based on change to 21.7.2.5.26.

(22) IPU 17U0180 issued 01-26-2017 IRM 21.3.1.5.65 deleted procedures for CP 148A and 148B - Dual Notice of Address Change, procedures are in the BMF IRM 21.7.2.5.26.

(23) IPU 17U0180 issued 01-26-2017 IRM 21.3.1.5.114(9) added procedures for Process Code 4030.

(24) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.114.1 added procedures for Process Code 4310.

(25) IPU 17U0180 issued 01-26-2017 IRM 21.3.1.5.114.2 updated procedures for accounts with BMF-AUR involvement.

(26) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.114.2 added procedures for Process Code 4510.

(27) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.115 added a new subsection for Employer Shared Responsibility Payment (ESRP) Notices.

(28) IPU 17U0806 issued 05-04-2017 IRM 21.3.1.5.115.1 added procedures for a new subsection on Resolution of ESRP Notices.

(29) IPU 17U1174 issued 07-21-2017 IRM 21.3.1.5.115.1 added procedures for routing Form 843 ESRP cases.

Effect on Other Documents

IRM 21.3.1 Taxpayer Contacts Resulting From Notice Issuance dated, September 12, 2016, (effective date 10-01-2016) is superseded. The following IRM Procedural Updates (IPUs) “ 16U1737, 17U0180, 17U0806, 17U1096, 17U1174”, issued from December 12, 2016 through July 21, 2017, have been incorporated into this IRM.

Audience

The primary users of this IRM are employees who answer notice contacts.

Effective Date

(10-01-2017)

Kevin M Morehead
Director, Accounts Management
Wage and Investment Division

Program Scope and Objectives

  1. Purpose: This section of IRM 21.3 provides guidelines for identifying and resolving inquiries concerning Computer Paragraph (CP) notices, internal notices and all forms of correspondence issued during the processing of a tax return.

  2. Audience: The primary users of this IRM are all employees in Business Operating Divisions (BOD) who respond to taxpayer inquiries regarding receipt of a notice.

  3. Policy Owners: The Director of Accounts Management.

  4. Program Owner: Process and Program Management (PPM), Accounts Management (AM), Wage and Investment (WI).

  5. Primary Stakeholders: The primary stakeholders are organizations that Accounts Management collaborates with; for example: Return Integrity & Compliance Systems (RICS), Compliance and Submission Processing.

  6. Program Goals: Program goals for this type of work are located in the Accounts Management Program Letter and Operating Guidelines for each fiscal year as well as IRM 1.4.16, Accounts Management Guide for Managers.

Background

  1. Employees in Accounts Management (AM) organization respond to taxpayer inquiries concerning Computer Paragraph (CP) notices, internal notices and notices issued during the processing of a return.

Authority

  1. The Taxpayer Bill of Rights (TBOR) was formally adopted by IRS in June 2014 and provides the taxpayers with a better understanding of their right to receive prompt, courteous, and professional assistance in their dealing with the IRS. They are to be spoken to in a way that is easily understood and any correspondence from the IRS must be clear and understandable. They have the right to speak to a supervisor whenever quality service is not received. For additional information, refer to the Pub 1, The Taxpayer Bill of Rights. IRC 7803(a)(3) requires the IRS Commissioner to ensure that IRS employees are familiar with and act in accordance with the 10 fundamental rights that make up the TBOR.

  2. IRM 1.2.10.2, Policy Statement 1-1, For Mission of the Service.

  3. IRM 1.2.21, Sevicewide Policies and Authorities - Policy Statements for Customer Account Services Activities.

  4. IRM 21.3.3.4.2, Policy Statement P-21-3 (formerly P-6-12).

Responsibilities

  1. The Wage and Investment Commissioner has overall responsibility for the policy related to this IRM which is published on a yearly basis.

  2. Accounts Management’s Policy and Program Management Section has responsibility for the information in this IRM. Information is published in this IRM on a yearly basis.

  3. The Director of Accounts Management is responsible for policy related to this IRM.

  4. The Supervisory Tax Analyst of PPM IMF is responsible for ensuring this IRM is timely submitted to publishing each year.

  5. Additional information is found in IRM 1.1.13.8.4, Accounts Management and IRM 21.1.1, Accounts Management and Compliance Services Overview.

Program Controls

  1. Program Reports: This IRM presents an overview of specific notices or letters, general procedures for working the notice, and a reference to the Internal Revenue Manual (IRM) for detailed procedures. Refer to IRM 1.4.16, Accounts Management Guide for Managers to identify which reports provide information on specific program objectives.

  2. Program Effectiveness: Program Effectiveness is determined by Account Management’s employee successfully using IRM guidance to perform necessary account actions and duties. The Quality Review process provides a method to monitor, measure, and improve the quality of work.

  3. Program Controls: Program controls are located in Accounts Management Program Letter and Operating Guidelines, which are published yearly. The Quality Review process provides a method to monitor, measure, and improve the quality of work. Quality Review data is used to provide quality statistics for the Service’s Business Results portion of the Balance Measures, and to identify trends, problem areas, training needs and opportunities for process improvement. Additional information can be found in IRM 21.10.1, Embedded Quality (EQ) Program for Accounts Management, Campus Compliance, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS) and Electronic Products and Services Support.

Acronyms and Definitions of Notice Types

  1. The table below lists commonly used acronyms in IRM 21.3.1, Taxpayer Contacts Resulting From Notice Issuance and their definitions. For a comprehensive listing of any IRS acronym, please refer to the Acronym Database.

    AC Action Codes
    ACS Automate Collection System
    AUR Automated Underreporter
    BMF Business Master File
    CAWR Combined Annual Wage Reporting
    CP Computer Paragraph
    CSCO Compliance Services Collection Operations
    DP Data Processing
    EITC Earned Income Tax Credit
    ESRP Employer Shared Responsibility Payment
    FTD Federal Tax Deposit
    FTF Failure to File
    FTP Failure to Pay
    FUTA Federal Unemployment Tax Act
    IDRS Integrated Data Retrieval System
    IMF Individual Master File
    ITIN Individual Taxpayer Identification Number
    IVO Integrity and Verification Operations
    MFT Master File Tax
    NMG Non Master File
    PC Process Code
    PTC Premium Tax Credit
    SSN Social Security Number
    SRP Shared Responsibility Payment
    TC Transaction Code
    TDA Tax Delinquent Account
    TPNC Taxpayer Notice Code
  2. Notice Types

    1. Submission Processing Notices- If a return is not processable due to missing information, Submission Processing sends the taxpayer a notice requesting the information. These returns have not completed processing and Integrated Data Retrieval System (IDRS) shows a dummy module with a Letter 12C , Individual Return Incomplete for Processing: Form 1040, Form 1040A and 1040EZ, or command code ERINV shows an ERS status code indicating a Letter 12C has been sent. Section 3705(a) of the Internal Revenue Restructuring and Reform Act of 1998 (RRA '98) requires the inclusion of telephone numbers on most notices. The phone number shown on these notices is the Toll-Free Customer Response line appropriate for the taxpayer's Business Operating Divisions (BODs). Encourage the taxpayer to return the requested information in the envelope provided along with a copy of the notice. Some notices will contain an option to fax the requested information and provides a fax number for the ERS response team. If the taxpayer mails or faxes the notice with the information, the return is treated as filed on the original received date.

    2. Settlement Notice- Informs the taxpayer of payment and interest due, math errors, and adjustments.

    3. Math Error Notice- Informs taxpayer of a math error found during processing and identifies the line on the return where the error occurred.

    4. Balance Due Notice- Request payment, generates if a return does not have a math error and has a balance due. This is the first notice of balance due.

    5. Adjustment Notice - Informs taxpayer of adjustment made to the account by examination, adjustments, or by taxpayer request. Generally the fourth and fifth digits of the Document Locator Number (DLN) of a Data Processing (DP) subsequent adjustment are 54. The fourth and fifth digits of the DLN of an Examination adjustment are 47.

    6. Offset Notice - Informs taxpayer of offset of an available overpayment to an outstanding debit balance.

    7. Information Notice - Issued to provide information internally or to taxpayer. A response is not needed.

    8. Credit Transfer Notice - Informs taxpayer of credit transfer when the CORR-DATE field in FRM 34 is overlaid.

    9. IDRS Notice - Issued as a subsequent balance-due or return delinquency notice.

    10. Annual Reminder Notices - Issued annually as a reminder to taxpayers who have a tax delinquent account as of the date of the notice. Annual notices of tax delinquency under IRC § 7524 are issued for calendar years after 1996. This was part of the Public Law 104-168 dated 07-30-1996 the Taxpayer Bill of Rights. These notices are not "collection" type notices asking for payment.

Related Resources

  1. The following lists the primary sources for guidance used for responding to taxpayer contact resulting from notice issuance.

    • IRM 3.13.5.125, CP 54 Notice Overview

    • IRM 3.21.263, IRS Individual Taxpayer Identification Numbers (ITIN) Real-Time System (RTS)

    • IRM 4.13, Audit Reconsideration

    • IRM 4.19.4, CAWR Reconciliation Balancing

    • IRM 4.19.5.4, FUTA Case Processing

    • IRM 5.1, Field Collecting Procedures

    • IRM 5.19, Liability Collection

    • IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria

    • IRM 21.3, Taxpayer Contacts

    • IRM 21.4, Refund Inquiries

    • IRM 21.5, Account Resolution

    • IRM 21.6, Individual Tax Returns

    • IRM 21.7, Business Tax Returns and Non-Master File Accounts

    • IRM 25.23, Identity Protection and Victim Assistance

    • Servicewide Notice Information Program (SNIP)

    • Correspondex Letters

    • Integrated Automation Technologies (IAT Tools)

Notice Overview

  1. This section provides guidelines for identifying and resolving inquiries concerning Computer Paragraph (CP) notices, internal notices and notices issued during the processing of a return. Guidelines for balance due notices and delinquent return notices are found in IRM 5.19.1-2, W&I Call Flow , and IRM 5.19.2, Individual Master File (IMF) Return Delinquency. Refer to Document 6209, IRS Processing Codes and Information, Section 9 for a complete list of notices.

  2. Each subsection in this section presents an overview of a specific notice or letter, general procedures for working the notice, and a reference to the Internal Revenue Manual (IRM) for detailed procedures. If during a contact any of the following occur:

    If And Then
    1. It appears there is a hardship situation. The taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels.
    or
    2. The taxpayer insists on being referred to the Taxpayer Advocate Service (TAS). Per the Taxpayer Bill of Rights (TBOR), taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay, or ability to provide information timely.
    or
    3. Refer taxpayers to TAS when the contact meets TAS criteria (See IRM 13.1.7.2, TAS Case Criteria), or when Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), is attached.
    You cannot resolve the taxpayer's issue the same day

    Note:

    "Same day" includes cases that can be resolved in 24 hours, as well as cases where steps can be taken within 24 hours to begin resolving the issue. Refer to IRM 13.1.7.4, Same Day Resolution by Operations.

    Prepare and forward Form 911, Request for Taxpayer Advocate Service Assistance and (Application for Taxpayer Assistance Order), to the local Taxpayer Advocate. Refer to taxpayer to the Taxpayer Advocate Service Public Site for additional information.

    Note:

    If the taxpayer’s situation meets Taxpayer Advocate Service (TAS) criteria 5-7 AND involves identity theft, the case MUST generally be referred to Accounts Management (AM) Identity Protection Specialized Unit (IPSU). Follow procedures in IRM 25.23.3.3.5, Identity Theft Assistance Request (ITAR) - General Information.

    Caution:

    Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. Refer to guidelines in IRM 21.1.3, Operational Guidelines Overview. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.7.1, Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 11.3.1.11, Facsimile Transmission of Tax Information, must be reviewed prior to faxing confidential information to the taxpayer.

Erroneous Correspondence Procedures

  1. Refer to (2) below and if applicable refer to IRM 25.13.1.3, Erroneous Correspondence Procedures - Report Erroneous Correspondence Process, for all notice issues.

  2. IMPORTANT: Correspondence which is not erroneous and does not need to be reported via the Red Button Process to the Office of Taxpayer Correspondence (OTC) or Computer Security Incident Response Center (CSIRC) includes correspondence sent to the taxpayer's last known address but where it is later found that:

    • the taxpayer no longer resides there, or

    • the address was incorrect due to a potential identity theft issue. Correspondence which may indicate a potential identity theft issue: Letter 4464C, Letter 4883C, Letter 5071C (issued prior to August 2016), Letter 5447C, Letter 5747C, CP 05 or CP 05A.

  3. Contacts regarding Letter 4464C, Letter 4800C, CP 05 or CP 05A with an incorrect address must be reported to Income & Verification Operations (IVO).

    • If a telephone or walk-in contact, advise customer to return correspondence indicating that the addressee does not reside at that address. If the caller is unable to return the correspondence, route Form 4442 /e-4442 to IVO.

    • If correspondence case, route case to IVO.

  4. Contacts regarding Letter 4883C or Letter 5071C with an incorrect address should not be reported to IVO.

    • If a telephone or walk-in contact, advise customer to destroy the correspondence. Advise the caller that no further correspondence addressed to the same individual at that address will be sent.

    • If correspondence case, no action is needed. Destroy correspondence, if appropriate.

  5. If the letter or notice number is unknown because the customer has not opened the envelope, advise the customer to return the correspondence unopened, indicating that the addressee does not reside at that address.

  6. If the taxpayer indicates receipt of a transcript and it contains incorrect information due to possible identity theft, take the following actions:

    • Apologize and ask the taxpayer to destroy the transcript. Send correct transcript, if appropriate.

    • Follow procedures in IRM 21.2.3.5.8, Transcripts and Identity Theft.

    Note:

    Transcripts with erroneous information due to possible identity theft should not be reported via the Red Button Process to the OTC or CSIRC.

What Is a Notice?

  1. A Computer Paragraph (CP) notice results from:

    • Input of notice codes

    • Computer analysis of an account on Master File (MF)

    • Posting of a transaction

  2. Computer Paragraph (CP) notices may:

    • Request payment

    • Give instructions

    • Provide information

    • Request information

    • Propose penalties or assessments

  3. To determine the last notice sent to the taxpayer, review the Notice History Section on CC TXMOD or the Entity Notice Section on CC ENMOD.

  4. Notice (CP) numbers usually are printed in the upper right corner of a CP notice. Each notice contains taxpayer's name, address, Taxpayer Identification Number (TIN), and a computer generated or pre-printed message.

  5. Internal notices/transcripts are issued to alert IRS employees of possible necessary action. Copies of these notices are not sent to the taxpayer.

Notice Resolution Actions Research

  1. The following actions are common to all notice resolutions:

    If And Then
    Refund is due Normal processing time has not elapsed, refer to IRM 21.4.1.4, Refund Inquiry Response Procedures
    1. Review the account to determine if the return has posted or a processing problem exists. If either of these conditions exists follow appropriate IRM procedures for resolution.

    2. If there is no indication the return is having a processing problem or it has not yet posted, advise taxpayer of normal processing time, refer to IRM 21.4.1.4.1.1, Return Not Found.

    Refund is due Normal processing time has elapsed Refer to IRM 21.4.1, Refund Research.
    There is a balance due Taxpayer agrees
    1. Request full payment.

    2. IMF/BMF AM phone assistors, refer to IRM 5.19.1-2, W&I Call Flow

    3. All others, refer to IRM 5.19.1.5.2, Can Full Pay Balance Due Now (Payoff).

    There is a balance due A payment is not properly credited Transfer credit, refer to IRM 21.5.8, Credit Transfers.
    There is a balance due Taxpayer agrees but cannot pay in full Set up a payment plan, refer to IRM 5.19.1-23, W&I Call Flow.
    Penalties and interest are assessed Taxpayer does not agree Refer to IRM 20.1, Penalty Handbook, or IRM 20.2, Interest.
    Taxpayer does not agree with notice Documentation is needed from taxpayer or files
    1. Request documentation.

      Reminder:

      If you are staffing the toll-free lines at a remote site and you will need to pull the document using CC ESTAB to resolve the issue, follow the procedures in IRM 21.5.2.3, Adjustment Guidelines -Research.

    2. Open a control base.

    3. If necessary suppress all balance due notices (STAUPS/TC 470).

    4. Refer to IRM 21.5.4, General Math Error Procedures, IRM 21.5.10, Examination Issues, and IRM 21.7.12, Non-Master File (NMF) Adjustments.


Dual Notices

  1. Section 3201(d) of RRA 98 requires the Service to (whenever practicable) mail duplicate notices separately to each individual filer of a joint tax return. This process is referred to as dual notice issuance. Systemic generation of dual notices began in calendar year 2001.

  2. Dual notices are issued as follows:

    1. All notices are sent dual if Service records indicate filers live at different addresses.

    2. If Service records indicate filers live at the same address, then any notice required by statute must be sent separately to each spouse. In addition, certain other notices that contain elements of notices required by statute must be sent separately. Refer to IRM 5.19.9.2.4, SITLP Notices.

  3. Notices that do not need to be sent separately include Submission Processing pipeline notices (including Math Error notices) and Collection installment agreement monthly reminder notices. Most of the dual notices include language to explain why the Service is sending duplicate notices.

Examination Notice of Deficiency Procedures

  1. If taxpayers have questions concerning notices of deficiency, direct them to call the number on the notice, or write to address shown. Advise of the following:

    1. If they choose to petition the Tax Court, they have 90 days from the notice date and 150 days if the notice is addressed to a person outside the U.S..

    2. A telephone call or written communication does not extend the time for filing a petition with the Tax Court.

    3. The last date to file a petition is included in the header information of the notice.

Notice Descriptions

  1. The most common notices are listed below and divided into four categories:

    • IMF Individual Master File (IMF) notices

    • Business Master File (BMF) notices

    • Non-Master File (NMF) notices

    • Submission Processing Notices

CP 05/CP 05A Information Regarding Your Refund

  1. A CP 05/05A, Information Regarding Your Refund, is issued to taxpayers.

  2. The notice informs the recipient their refund is being held pending additional review.

  3. Refer to IRM 21.5.6.4.35.3, -R Freeze Overview For Accounts With IVO Involvement (4464C Letter or 4115C Letter), for additional information.

CP 06 Exam Initial Contact Letter – Premium Tax Credit (PTC)

  1. A CP 06, Exam Initial Contact Letter – PTC – Refund Frozen, is issued to notify the taxpayer that their refund will be held pending an examination. Form 14950, Premium Tax Credit Verification, is enclosed to request the appropriate documentation.

  2. A CP 06A, Exam Initial Contact Letter – PTC - Bal Due, is issued to notify the taxpayer that we are auditing their return based on PTC claim. Form 14950, Premium Tax Credit Verification, is enclosed to request the appropriate documentation.

CP 08 Additional Child Tax Credit

  1. A CP 08, Additional Child Tax Credit, is issued to notify taxpayer of potential eligibility to claim additional Child Tax Credit. The notice is issued when the taxpayer:

    • Computes an amount for the Child Tax Credit, has zero tax liability, and fails to use the remaining portion of the credit to claim the Additional Child Tax Credit, or

    • Indicates eligibility for the Child Tax Credit (by checking the boxes on line 6c) but does not claim the Child Tax Credit due to zero tax liability and does not claim the Additional Child Tax Credit.

  2. Refer to IRM 21.6.3.4.2.8.3, CP 08, Additional Child Tax Credit, for procedures on working CP 08 notices.

CP 09 Earned Income Credit (EIC)

  1. A CP 09, Earned Income Credit, is issued to notify taxpayer of potential eligibility for Earned Income Tax Credit (EITC).

    1. Answer questions concerning eligibility and how to claim the credit. If the taxpayer qualifies, advise as in b through d.

    2. Advise the taxpayer to provide the qualifying child's Social Security Number (SSN) and sign the notice.

    3. Inform the taxpayer that if the EITC is allowed and the taxpayer has more than three children, the additional Child Tax Credit may be affected. Advise the taxpayer to complete Form 8812, Additional Child Tax Credit. Publication 972, Child Tax Credit, has more information.

    4. Instruct the taxpayer to submit the completed and signed CP 09 in the envelope provided.

  2. Refer to IRM 21.6.3.4.2.7.8, EITC CP 09 / CP 27.

CP 10 Math Error With Reduced Credit Elect

  1. A CP 10, Math Error With Reduced Credit Elect, is issued to notify taxpayer that an overpayment applied to the next year's tax as a credit-elect was reduced due to an error on a 1040 series return.

    1. Research Integrated Data Retrieval System (IDRS).

    2. Explain reason for notice.

    3. Take actions indicated in the following table.

    If And Then
    Taxpayer agrees A balance is due
    1. Advise taxpayer to correct their copy of the return. Remind the taxpayer the decrease in the amount of credit elect may affect the Estimated Tax (ES) payments for the first quarter.

    2. Request full payment.

    3. Refer to IRM 35.19.1-2, W&I Call Flow.

    Taxpayer does not agree A refund is due
    1. Refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices

    2. Math verify the return and then adjust account using oral statement if applicable.

    3. Request documentation only if necessary.

    4. Determine if the credit elect will systemically move after the adjustment. Refer to IRM 21.6.3.4.2.1, Outstanding Balance Considerations Prior to Refund or Credit Elect.

    5. Advise and explain the Treasure Offset Program (TOP) offset to the taxpayer if the indicator shows possibility of offset.

    6. Advise taxpayer they should receive refund in 4 to 6 weeks.

    Taxpayer does not agree A balance is due
    1. Refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices, for information on working math errors.

    2. Math verify the return and then adjust account using oral statement if applicable.

    3. Request documentation from the taxpayer only if necessary.

    4. Refer to IRM 5.19.1-2, W&I Call Flow.

CP 11 Math Error, Balance Due of $5 or More

  1. A CP 11, Math Error, Balance Due of $5 or More, is issued as a first notice. Notifies taxpayer of an error in the math on an individual return that results in a balance due. Refer to table below:

    If And Then
    Taxpayer agrees A balance is due
    1. Advise taxpayer to correct their copy of the return.

    2. Refer to IRM 5.19.1-2, W&I Call Flow.

    Taxpayer does not agree A refund is due
    1. Refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

    2. Math verify the return and then adjust account using oral statement if applicable.

    3. Request documentation from the taxpayer only if necessary.

    4. Advise and explain the TOP offset to the taxpayer if indicator shows possibility of offset.

    5. Advise taxpayer they should receive refund in 4 to 6 weeks.

    Taxpayer does not agree A balance is due
    1. Refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

    2. Math verify the return and then adjust account using oral statement if applicable.

    3. Request documentation from the taxpayer only if necessary.

    4. Refer to IRM 5.19.1-2, W&I Call Flow.

CP 11M Math Error, Balance Due
  1. A CP 11M is issued as a first notice and informs the taxpayer the IRS computed eligibility to claim the Making Work Pay and Government Retiree Credit. The Notice is generated from the taxpayer notice code (TPNC) 661. Refer to table in IRM 21.3.1.5.6, CP11, Math Error, Balance Due of $5 or More, above for required actions and IRM references for full instructions.

Submission Processing Missing Information 12C Letter

  1. During processing a Letter 12C, Individual Return Incomplete for Processing: Form 1040, Form 1040A and Form 1040EZ, is sent to IMF taxpayers requesting information missing from the return.

    Note:

    International tax returns that are incomplete for processing may receive a similar alternative notices such as a Letter 4087C , Letter 2894SP or Letter 2894C. Refer to IRM 3.21.3, Individual Income Tax Returns for more information.

  2. Returns are not returned to the taxpayer. The return is suspended awaiting response from the taxpayer.

    Exception:

    Refer to IRM 3.11.3.5.2.1, Correspondence When Sending Return Back to the Taxpayer, for specific circumstances when a tax return is returned to the taxpayer.

Researching the 12C Letter
  1. Check IDRS for the following Information:

    If Then
    Code and Edit sends the request for information Research IDRS using CC ENMOD to determine what information was missing on the original return. A history item should be on CC ENMOD that will display the selective paragraphs input on Letter 12C.
    Error Resolution sends the request for information Use Command Code (CC) ERINV to view the ERS status code information. Refer to IRM 21.4.1.4.1.2.4, Error Resolution System (ERS) Status Codes.
    The taxpayer has received the Letter 12C Advise the taxpayer to respond to the letter supplying the requested information.

CP 12 Math Error, Overpayment of $1 or More

  1. A CP 12, Math Error, Overpayment of $1 or More, is issued as a first notice to inform the taxpayer of an error in the math on an individual return that changes the refund amount. A refund hold will be applied when the account meets Notice Review criteria for certain notices (CP 12, 16, 21A and 24). The account will reflect a TC 570 with blocking series "55555" indicating the refund hold has been applied and a TC 971 AC 804, (the miscellaneous field will reflect the CP number). The hold will systemically expire 7 calendar days after the TC 971 AC 804 daily cycle. If both the AC 804 and AC 805 are present, the hold will be for 7 calendar days. Refer to table below:

    If And Then
    The taxpayer received more/less of a refund than requested Taxpayer agrees Advise taxpayer to correct their copy of the return.
    The taxpayer received less of a refund than requested and disagrees Adjustment will generate a refund
    1. Refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

    2. Math verify the return and then adjust account using oral statement if applicable.

    3. Request documentation from the taxpayer only if necessary.

    4. Advise and explain the TOP offset to the taxpayer if indicator shows possibility of offset.

    5. Advise taxpayer they should receive refund in 4 to 6 weeks.

    The taxpayer received more of a refund than requested and disagrees Adjustment will generate a balance due
    1. Review the return to determine if taxpayer is correct.

    2. If the taxpayer's original filing was correct and the service sent the taxpayer more of a refund than requested, this is considered an erroneous refund. Refer to IRM 21.4.5.4, Erroneous Refund Categories and Procedures, to determine the appropriate category and procedures for working the case.

      Exception:

      Taxpayer returned their original refund check, identified by a TC 841 with a P- Freeze on the account, after self- identifying an IRS administrative error. Then taxpayer calls or writes providing substantiation of the error that occurred on their original return, then follow procedure in IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

CP 12A EIC Math Error - Overpayment of $1 or More
  1. A CP 12A, EIC Math Error - Overpayment of $1 or More, is issued as a first notice when:

    1. EITC was claimed on a return and there is a math error.

    2. There is an invalid SSN (primary or secondary) on the return.

  2. The notice informs taxpayer of an error in the math on an individual return that changes the refund amount. Refer to table in IRM 21.3.1.5.8, CP 12 Math Error, Overpayment of $1 or more, above for required actions and IRM references for full instructions.

CP 12M Math Error, Overpayment
  1. A CP 12M is issued as a first notice to inform taxpayer the IRS computed eligibility to claim the Making Work Pay and Government Retiree Credit. Notice is generated from the Taxpayer Notice Code (TPNC) 661. Refer to table in IRM 21.3.1.5.8, CP 12 Math Error, Overpayment of $1 or more, above for required actions and IRM references for full instructions.

CP 13 Math Error, Settlement

  1. A CP 13 is issued to notify taxpayer that:

    1. An error occurred in the math on an individual return.

    2. Payment is not required if the balance due on the notice is less than $5.00.

    3. An overpayment of less than $1.00 is not refunded without a written request from the taxpayer. Refer to the table below if the taxpayer disagrees with the notice.

    If And Then
    Taxpayer does not agree A refund is due
    1. Refer to IRM 21.5.4.5.3, Processing Responses to Math Error Notices.

    2. Math verify the return and then adjust account using oral statement if applicable.

    3. Request documentation from the taxpayer only if necessary.

    4. Advise and explain the TOP offset to the taxpayer if indicator shows possibility of offset.

    5. Advise taxpayer they should receive refund in 4 to 6 weeks.

    Taxpayer does not agree A balance is due Refer to IRM 5.19.1-23, W&I Call Flow.


CP 13M Math Error, Settlement
  1. A CP 13M is issued as a first notice to inform taxpayer the IRS computed eligibility to claim the Making Work Pay and Government Retiree Credit. Notice is generated from the taxpayer notice code (TPNC) 661. Refer to the table, IRM 21.3.1.5.9, CP 13 Math Error, Settlement, above for required actions.

CP 14 Balance Due $5 or More, No Math Error

  1. A CP 14, Balance Due $5 or More, No Math Error, is issued as a first notice to notify taxpayer of a balance due when no math error or ES discrepancy exists. Do the following:

    1. Research IDRS.

    2. Explain reason for balance due. It may be the result of a missing payment or the assessment of a penalty.

    3. If taxpayer agrees with the notice, request payment in full (refer to IRM 5.19.1-2, W&I Call Flow).

    4. If a payment is missing, research IDRS for payment (refer to IRM 21.5.8, Credit Transfers).

    5. Check for pending Installment Agreement (IA), the taxpayer may have requested an IA.

CP 14H Shared Responsibility Payment Balance Due $5 or More, No Math Error
  1. A CP 14H, Shared Responsibility Payment (SRP) Balance Due $5 or More, No Math Error, is issued as a first notice to notify taxpayer of a SRP balance due for not securing minimum essential health insurance for themselves and their dependents, if applicable. SRP assessments are on MFT 35 and assessed as a TC 240 with Penalty Reference Number 692.

    If Then
    Taxpayer agrees with the notice Request payment in full. Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer disagrees Refer to procedures in IRM 21.6.4.4.21.3.1, Shared Responsibility Payment Adjustments.

CP 15 Civil Penalties Notice

  1. A CP 15, Civil Penalties Notice, is issued to notify taxpayer a civil penalty was assessed and why it was assessed.

    If Then
    Taxpayer agrees with the notice Request payment in full. Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer disagrees
    1. Advise taxpayer to send documentation to assessing function.

    2. Refer to IRM 20.1.1-5, Penalty Reference Numbers (600 Series), for an explanation of the three digit reference number which identifies the penalty type.

CP 15H Shared Responsibility Payment Civil Penalty Notice
  1. A CP 15H, Shared Responsibility Payment (SRP) Civil Penalties Notice, is issued to notify taxpayer a SRP penalty was assessed for not securing minimum essential health insurance for themselves and their dependents, if applicable. SRP assessments are on MFT 35 and assessed as a TC 240 with Penalty Reference Number 692.

    If Then
    Taxpayer agrees with the notice Request payment in full. Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer disagrees Provide the taxpayer with the assessing function information and advise the taxpayer to send documentation to support their disagreement to the assessing function.

CP 15B Civil Penalty Notice

  1. A CP 15B, Civil Penalty Notice, is issued to notify taxpayer a trust fund recovery civil penalty (TFRP) was assessed.

    If Then
    Taxpayer requests a payment plan Establish an installment agreement (IA). Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer disputes assessment. Explain they were identified as a responsible officer of a corporation that owes trust fund monies.
    Taxpayer claims they are not a responsible officer. Refer taxpayer to the Advisory group that handles the address where they reside. Refer to IRM 5.19.1.4.4, TFRP Issues.

CP 16 Overpayment with Offset

  1. A CP 16, Overpayment with Offset, is issued as a first notice to notify taxpayer of an error in the math on an individual return resulting in an overpayment that was applied to another IMF tax liability. A refund hold will be applied when the account meets Notice Review criteria for certain notices (CP 12, 16, 21A and 24). The account will reflect a TC 570 with blocking series "55555" indicating the refund hold has been applied and a TC 971 AC 804, (the miscellaneous field will reflect the CP number). The hold will systemically expire 7 calendar days after the TC 971 AC 804 daily cycle. If both the ac 804 and 805 are present, the hold will be for 7 calendar days.

    1. Explain offset process if requested to do so. Refer to IRM 21.4.6, Refund Offset.

    2. Refer to IRM 21.3.1.5.8, CP 12 Math Error, Overpayment of $1 or more, for resolution of math error notices.

CP 17 Refund of Unfrozen Excess Estimated Tax (ES) Credits

  1. A CP 17, Refund of Unfrozen Excess ES Credits, is issued to notify taxpayer of a refund of unfrozen estimated credits.

    1. Advise taxpayer no action is required.

    2. Tell taxpayer they will receive a refund within 4 to 6 weeks of the notice date if no other Federal taxes or obligations are owed and a refund amount remains.

CP 18 Refund Discrepancy/Unallowables

  1. A CP 18, Refund Discrepancy/Unallowables, is issued to notify taxpayer a portion of the refund was withheld due to an unallowable item on the return. Advise taxpayer they will receive an explanation of the adjustment by the date stated on the notice.

CP 19 Examination Unallowable Items Notice, Balance Due

  1. A CP 19, Examination Unallowable Items Notice, Balance Due, is issued to notify taxpayer of one or more unallowable items on the return and of a balance due. Advise taxpayer a response is necessary.

    If Then
    Taxpayer agrees with notice Advise taxpayer to sign and return notice.
    Taxpayer requests a payment agreement Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer disagrees with notice Advise taxpayer to return bottom portion of notice along with supporting documentation or explanation.

CP 20 Audit/Unallowable Items Notice, Overpayment

  1. A CP 20, Audit/Unallowable Items Notice, Overpayment, is issued to notify taxpayer of one or more unallowable items on the return as well as an overpayment. Advise taxpayer this notice requires a response.

    If Then
    Taxpayer agrees with tax increase Advise taxpayer to sign, date, and return bottom portion of notice.
    Taxpayer disagrees Advise taxpayer to submit documentation with bottom portion of the notice.
    Taxpayer has returned notice and a refund is due Advise taxpayer the refund will be issued in four to six weeks if no other tax is due or obligations are owed. Also advise of possible TOP offset.

CP 21A Data Processing Adjustment Notice, Balance Due of $5 or more

  1. A CP 21A, Data Processing Adjustment Notice, Balance Due of $5 or more, is issued to notify taxpayer of a data processing (DP) tax adjustment resulting in a balance due when account is in Taxpayer Delinquent Account (TDA) Status.

    1. Research IDRS.

    2. Explain the reason for the notice.

  2. For resolution, follow the table below:

    If And Then
    Taxpayer agrees There is an even balance Advise no action is necessary.
    Taxpayer agrees A balance is due Request payment in full. Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer indicates a payment was made Has not been credited
    1. Research for missing payment.

    2. Transfer the payment if needed.

    3. Refer to IRM 21.5.8, Credit Transfers.

    Taxpayer disagrees Adjustment resulted from a DP tax adjustment
    1. Verify the correctness of the adjustment.

    2. Review the CIS image to determine if the adjustment posted agrees with the adjustment requested by the taxpayer.

    3. If it has been determined the case was not worked correctly, apologize to the taxpayer and make the necessary corrections.

    4. If not trained in working paper complete an in-house referral, refer to IRM 21.3.5.4.2.1.1, Preparing an e-4442/4442.

    Taxpayer disputes deficiency assessment Adjustment resulted from examination of the return Advise the taxpayer that under certain conditions, you can request an audit reconsideration. Refer to IRM 4.13.2.1, Research/Initial Case Screening.
    Taxpayer disputes deficiency assessment Adjustment resulted from return executed by the service under IRC 6020(b) Advise taxpayer they can request an audit reconsideration if:
    1. The taxpayer has information that was not previously considered which, if timely submitted, would have resulted in a change to the assessment.

    2. An original delinquent return is filed by the taxpayer after an assessment was made as a result of a return executed by the IRS under IRC 6020(b) or other substitute for return procedures.

    3. There was an IRS computational or processing error in assessing the tax. Refer to IRM 4.13.1.7, Acceptance of Request.

CP 21H Data Processing Adjustment Notice Shared Responsibility Payment (SRP)
  1. A CP 21H, Shared Responsibility Payment (SRP) Adjustment Notice, is issued to notify the taxpayer of a SRP adjustment resulting in a balance due or refund.

  2. If the taxpayer agrees with the notice, request payment in full. Refer to IRM 5.19.1-2, W&I Call Flow.

  3. If the taxpayer disagrees with the SRP amount, follow procedures in IRM 21.6.4.4.21.3.1, Shared Responsibility Payment Adjustments.

CP 22A Data Processing Adjustment Notice, Balance Due of $5 or more

  1. A CP 22A, Data Processing Adjustment Notice, Balance Due of $5 or more, is issued to notify taxpayer of a data processing (DP) tax adjustment resulting in a balance due of $5 or more when the account was not in TDA status prior to the adjustment or when the account is going to TDA status in the current cycle.

  2. Follow procedures in IRM 21.3.1.5.18, CP 21A Data Processing Adjustment Notice, Balance Due of $5 or more, when responding to taxpayer inquiries.

CP 22H Shared Responsibility Payment (SRP) Adjustment Notice, Balance Due of $5 or more
  1. A CP 22H, Shared Responsibility Payment (SRP) Adjustment Notice, Balance Due of $5 or more, is issued when the account was not in TDA status prior to the adjustment or when the account is going to TDA status in the current cycle.

  2. If the taxpayer agrees with the notice, request payment in full. Refer to IRM 5.19.1-2, W&I Call Flow.

  3. If the taxpayer disagrees with the SRP amount, follow procedures in IRM 21.6.4.4.21.3.1, Shared Responsibility Payment Adjustments.

CP 23 Estimated Tax (ES) Discrepancy, Balance Due of $5 or More

  1. A CP 23, ES Discrepancy, Balance Due of $5 or More, is issued to notify taxpayer of a discrepancy between estimated tax credits claimed on the return and credits posted to the account, resulting in a balance due of $1.00 or more.

  2. This notice also notifies taxpayer of a math error.

  3. Review payment amounts and dates.

    If Then
    A payment or credit-elect is missing
    1. Research for missing payment.

    2. Transfer credit if appropriate.

    3. Refer to IRM 21.5.8, Credit Transfers.

    4. If TP states payments are under spouse's SSN refer to IRM 21.6.3.4.2.3.3, ES Joint Allocation.

    Taxpayer agrees with the notice Request full payment of balance due. Refer to IRM 5.19.1-2, W&I Call Flow.

CP 24 Estimated Tax Discrepancy, Overpayment of $1 or More

  1. A CP 24, Estimated Tax Discrepancy, Overpayment of $1 or More, is issued to notify taxpayer of discrepancy between estimated tax credits claimed on return and credits posted to the account, resulting in an overpayment of $1.00 or more. In addition to a discrepancy in estimated tax payments, a CP 24 may advise taxpayer their return contained a math error or the statute for refund has expired. A refund hold will be applied when the account meets Notice Review criteria for certain notices (CP 12, 16, 21A, 21B and 24). The account will reflect a TC 570 with blocking series "55555" indicating the refund hold has been applied and a TC 971 AC 804, (the miscellaneous field will reflect the CP number). The hold will systemically expire 7 calendar days after the TC 971 AC 804 daily cycle. If both the ac 804 and 805 are present, the hold will be for 7 calendar days.

    If Then
    This is an estimated tax discrepancy Review payment dates and amounts shown on the notice.
    Taxpayer indicates a payment is erroneously credited to account
    1. Research IDRS to locate account where payment belongs.

    2. Apply to correct account, or

    3. If you cannot locate correct account, transfer to Excess Collection or Unidentified File.

    4. Refer to IRM 21.5.8, Credit Transfers.

    Taxpayer received a refund of an erroneously credited payment Refer to IRM 21.4.5, Erroneous Refunds.
    Taxpayer agrees with notice
    1. Advise taxpayer a refund will be issued within 4 to 6 weeks of the date on the notice if no other tax is due or obligations are owed.

    2. Advise taxpayer of a possible TOP offset.

    Notice contains math error information Refer to math error notice resolution in IRM 21.3.1.5.8, CP 12, Math Error . Overpayment of $ 1 or More.

CP 25 Estimated Tax Discrepancy, Balance Due >$5, Overpayment >$1

  1. A CP 25, Estimated Tax Discrepancy, Balance Due >$5, Overpayment >$1, is issued to notify taxpayer of a discrepancy between estimated tax credits claimed on return and credits posted to the account, resulting in an overpayment of less than $1.00, or a balance due of less than $5.00.

  2. This notice also informs taxpayer that no refund is issued for less than $1.00 unless taxpayer requests it in writing, and no payment is necessary of a balance due.

  3. Refer to table in IRM 21.3.1.5.20, CP 23 Estimated Tax Discrepancy Balance Due of $5 or More, if taxpayer wants to pay Balance Due > $5.

CP 27 Earned Income Credit (EIC) Potential for Taxpayer Without Qualifying Children

  1. A CP 27, EIC Potential for Taxpayer Without Qualifying Children, is issued to notify taxpayer without children of possible eligibility for the EITC.

    1. Answer questions about eligibility.

    2. Advise how to claim the credit.

    3. If the taxpayer qualifies, advise taxpayer to sign the notice and return in the envelope provided.

  2. Refer to IRM 21.6.3.4.2.7.8, EITC CP 09 / CP 27.

CP 29 Amended Return Posted, No Original

  1. A CP 29, Amended Return Posted, No Original, is forwarded to the Files function. The returns are pulled, batched and routed to Accounts Management (AM) for assignment.

  2. Refer to IRM 21.5.6.4.9, E- Freeze.

CP 30 Estimated Tax Penalty Notice

  1. A CP 30, Estimated Tax Penalty Notice, is issued to notify taxpayer all or part of an overpayment has been applied to an estimated tax penalty. Advises taxpayer all or some of required estimated tax payments were not timely.

    If Then
    Taxpayer indicates a payment was not credited to account Research for missing payment.
    The taxpayer's credit elect was reduced due to the assessment of an ES penalty. Advise taxpayer they may need to make up the difference on the first quarter payment or increase future ES payments. Encourage the taxpayer to use the on-line payment options located on www.irs.gov under the payment tab.,
    Taxpayer wants to have part or all of penalty removed Before advising the taxpayer to file Form 2210, determine if the taxpayer meets the criteria. Refer to IRM 20.1.3.2.1.7.1, Form 2210 or Form 2210-F.
    If the taxpayer qualifies for the ES Penalty Waiver, advise taxpayer to complete Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, and provide appropriate mailing address.

    Note:

    Form 2210 with instructions is not included with the notice.

CP 30A Estimated Tax Penalty Recompute Notice

  1. A CP 30A, Estimated Tax Penalty Recompute Notice, is issued to notify taxpayer that Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, was incorrect, resulting in a refund.

    1. A response is not required unless taxpayer disagrees.

      If Then
      Taxpayer disagrees Review Form 2210 and explain how amount was computed.
      Taxpayer still disagrees Advise taxpayer they may either:
      1. Return the voided check with a written explanation of why they disagree, or

      2. Keep check and pay penalty if they received notice that a penalty has been assessed.

    2. Refer to IRM 21.4.3, Returned Refunds/Releases, for more information on returning refund checks.

CP 31 Undelivered Refund Notice

  1. A CP 31, Undelivered Refund Notice,(obsolete 01-2016) was issued to notify taxpayer a refund was returned as undeliverable. The notice asks taxpayer to supply the correct address.

    If Then
    Taxpayer states that they have not moved and gives address that exactly matches Master File (MF) and there is a TC 740 on the module. Refer to IRM 21.4.3.5.3, Undeliverable Refund Checks, for procedures before allowing interest to compute.
    There is a new address and there is a TC 740 on the module. Input address with CC CHK64. Refer to IRM 21.4.3.5.3, Undeliverable Refund Checks.

CP 32 and CP 32A New Refund Check - Old Check Not Cashed

  1. Issued when an original refund check is not cashed within one year. The CP 32 is issued to notify taxpayer the refund was reissued. The CP 32A is issued to notify taxpayer we will not reissue again without a request from the taxpayer.

    If Then
    Taxpayer has moved Correct address.
    More than 30 days have passed since the notice was issued and taxpayer has not received the refund Refer to IRM 21.4.1, Refund Research.

CP 36 Duplicate Filing Notice

  1. The CP 36, Duplicate Filing Notice, is an internal notice issued when there is a duplicate filing condition on the module, the duplicate filing case is controlled on IDRS and assigned for review. Refer to IRM 21.6.7.4.4.1, CP 36/TRNS36 — Control, for more information.

CP 36D Injured Spouse Claims Notice
  1. The CP 36D, Injured Spouse Claims Notice, is an internal notice issued when a Transaction Code (TC) 150 with Document Code 05, 07, 09, or 11, posts with blocking series 920–929 (indicating that Form 8379, Injured Spouse Allocation, was filed). The original return and claim are sent to Customer Service for processing.

CP 39 Overpayment Applied to Balance Due - Secondary SSN

  1. A CP 39, Overpayment Applied to Balance Due - Secondary SSN, is issued to notify taxpayer an overpayment for a return on which the taxpayer is the secondary SSN has been applied to the balance due on a return for another year, which is the return identified in the heading of the notice. The notice explains that a joint filer is responsible for paying the tax due on the return as originally filed and any tax resulting from subsequent adjustment (e.g., an examination). Advise taxpayer this is an information notice and a response is not required.

CP 41 / TRNS41 Unresolved Manual Refund Freeze

  1. A CP 41/ TRNS41, Unresolved Manual Refund Freeze, is an internal notice generated when:

    1. An unresolved manual refund freeze (-X Freeze) is present on the Master File for more than seven cycles.

    2. The account is not in zero balance because an adjustment did not post within the seven cycles.

    3. The notice shows the manual refund created the balance due condition.

      Exception:

      A TC 840 in Blocking Series 600–609 suppresses the CP 41 / TRNS41 for 20 cycles. A TC 840 in Blocking Series 9XX with a Julian date under 400 bypasses the-X Freeze and issuance of the CP 41 / TRNS41.

  2. The CP 41/ TRNS41 is forwarded to the Files function. The manual refund document is pulled and the case is forwarded to Customer Service to be worked.

  3. Refer to IRM 21.5.6.4.48, -X Freeze, for procedures.

CP 42 Secondary SSN Offset Notice

  1. A CP 42, Secondary SSN Offset Notice, is issued to notify taxpayer of an offset of an overpayment for the return that is the subject of the notice to satisfy a Federal tax obligation for a joint return for another tax year on which the taxpayer was the secondary SSN. Be aware of disclosure criteria. Refer to IRM 21.1.3.2, General Disclosure Guidelines.

    If And Then
    Taxpayer agrees with notice An overpayment remains; Advise the taxpayer they should receive a refund within 4 weeks, if they owes no other taxes. Note: Advise taxpayer of a possible TOP offset for child or spousal support, Federal non-tax debts, state income tax obligations, or unemployment compensation debts.
    The taxpayer did not receive refund check Four weeks have passed Advise the taxpayer to check and see if they owe other taxes (e.g., state or are they behind on child support). If not; refer to IRM 21.4.2, Refund Trace and Limited Payability.
    Taxpayer agrees with the notice. The balance due remains on a prior year account. Request payment in full. Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer indicates he sent in a payment There is no payment (TC 670) posted on the account Research to locate the missing payment. Refer to IRM 21.5.7, Payment Tracers.
    Taxpayer disagrees Taxpayer states spousal obligation is not correct
    1. Request taxpayer to supply justification to the Account Management function.

    2. Request written documentation only if the issue cannot be resolved with oral statement.

    Taxpayer disagrees Balance due arose from a return filed by one spouse
    1. Advise the spouse who is not liable to file Form 8379, Injured Spouse Claim Allocation.

    2. Refer to IRM 21.4.6.5.2, Injured Spouse Inquiries.

    Note:

    For an audit reconsideration, refer to IRM 21.5.10.4.3, Audit Reconsiderations. For a Substitute for Return (SFR), refer to IRM 5.19.2, Individual Master File (IMF) Return Delinquency. For AUR issue refer to IRM 21.3.1.5.57, Resolving or Referring IMF Underreporter Cases.


CP 44 Credit Available For Application to Non-IMF Account

  1. A CP 44, Credit Available For Application to Non-IMF Account, is issued when there is a refundable credit of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on a tax module and there is a TC 130 present in the entity module. This is a three part notice; Part 1 is sent to the taxpayer and Parts II and III are generated to the Service.

    1. Informs the campus that an IMF overpayment is available for application to a non-IMF outstanding liability, or of an overpayment available to use in an Offer-in-Compromise.

    2. Informs taxpayer an available overpayment was applied to an outstanding balance on another account.

  2. After application of credit, remaining overpayment is refunded.

    1. Advise taxpayer to allow six to eight weeks on a non-individual account for IRS to determine if a tax liability exists.

    2. If more than 8 weeks have elapsed and taxpayer has not received any information, prepare Form 4442, Inquiry Referral, and send to Compliance Service Collection Operations, CSCO in the Atlanta campus. Include taxpayer's day and evening telephone numbers.

CP 49 Overpayment Adjustment-Offset

  1. A CP 49, Overpayment Adjustment - Offset, is issued to notify taxpayer the overpayment on an individual return was applied to a prior year’s unpaid IMF liability.

    If And Then
    Taxpayer agrees with notice A balance due remains on prior year Request full payment. Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer agrees with notice An overpayment remains
    1. Advise taxpayer a refund will be issued within six weeks if no other Federal taxes or obligations are owed (TOP offset for child or spousal support, Federal non-tax debts, or state income tax).

    2. Refer to IRM 21.4.1, Refund Research, if four weeks have passed.

    Payment was made Was NOT properly credited to the prior year account Research IDRS to locate payment (e.g., TC 670). Refer to IRM 21.5.7, Payment Tracers.
    Taxpayer disagrees with notice Supplies supporting information
    1. Adjust the account as appropriate.

    2. Send the taxpayer a notice explaining the adjustment to tax.

    3. Advise the taxpayer about Penalty and Interest is charged until the account is paid in full. Refer to IRM 20.1, Penalty Handbook and IRM 20.2, Interest.

CP 51A Non-Compute, Balance Due of $5 or more

  1. A CP 51A, Non-Compute, Balance Due of $5 or more, is issued to notify taxpayer the IRS computed their tax and gives balance due. Interest or penalty for late payment is not charged if amount due is paid within 30 days of notice date or by due date of return.

  2. Use the chart below to assist in the working of CP 51A responses.

    If Then
    Taxpayer agrees with notice Request payment in full, refer to IRM 5.19.1-2,W&I Call Flow.
    Payment was not properly credited to account Research IDRS for missing payment, refer to IRM 21.5.7, Payment Tracers.
    Taxpayer disagrees Request taxpayer supply justification to Customer Service. Request written documentation only if issue not covered by oral statement.
    Taxpayer's disagreement involves an item not reported on original return Advise taxpayer to file amended return, Form 1040X, Amended U.S. Individual Income Tax Return.

CP 51B Non-Compute, Overpayment of $1 or more

  1. A CP 51B, Non-Compute, Overpayment of $1 or more, is issued to notify taxpayer the IRS computed their tax and also provides refund amount. Advise taxpayer the refund should be received within 2 weeks of the date of the notice if no other Federal taxes or obligations are owed and a refund amount remains.

    If Then
    Taxpayer agrees with notice No action is necessary.
    Taxpayer disagrees with notice Refer to IRM 21.3.1.5.35, CP 51A Non-Compute, Balance Due of $5 or more.

CP 51C Non-Compute, Balance Due > $5, Overpayment >$1

  1. A CP 51C, Non-Compute, Balance Due > $5, Overpayment >$1, is issued to notify taxpayer the IRS computed their tax and account balance is zero.

    If Then
    Taxpayer agrees with notice Advise that no action is required.
    Payment was not properly credited Research IDRS for missing payment. Refer to IRM 21.5.7, Payment Tracers.
    Taxpayer disagrees with notice Refer to IRM 21.3.1.5.35, CP 51A Non-Compute, Balance Due of $5 or more.

CP 53 Unable to Direct Deposit

  1. A CP 53, Unable to Direct Deposit, is issued to notify taxpayer an electronic funds transfer was not honored. Advise taxpayer:

    1. No action is required. Because the financial institution could not accept direct deposit of the refund, IRS is issuing a paper check.

    2. Taxpayer will receive refund within five weeks of the RFND-PAY-DATE of the original TC 846 if no other Federal taxes or obligations are owed and a refund amount remains.

    3. If four weeks have passed, refer to IRM 21.4.1, Refund Research.

CP 53A A Message About Your Request for an Electronic Deposit Refund
  1. A CP 53A is issued to notify taxpayers that an attempt to direct deposit their refund could not be processed by their financial institution. Advise taxpayer:

    1. No action is required. The financial institution could not accept the direct deposit of the refund so IRS is reviewing the account.

    2. Within 10 weeks from the notice issuance date, they will either receive the refund via a paper check, if no other Federal taxes or obligations are owed, or will receive a letter requesting additional information.

    3. If 10 weeks have passed, research the account to determine if a P- Freeze is present. If present, refer to IRM 21.5.6.4.31, P- Freeze Overview. If no freeze code is present, refer to IRM 21.4.1.5.7.1, Direct Deposit of Refunds .

CP 54x Series Notices, Inquiry Regarding Name and Social Security Number (SSN)

  1. There are four notices in the CP 54x series: CP 54B, Inquiry Regarding Name and SSN - Refund, CP 54E, Inquiry Regarding Name and SSN on ES Tax Payments, CP 54G, Inquiry Regarding Name and SSN - Even/Balance Due and CP 54Q, SSN and Name Inquiry - Second Request.

  2. These notices are issued to taxpayer when a return with an invalid primary SSN posts. The taxpayer may receive a math error notice instead. Refer to IRM 21.5.4, General Math Error Procedures, for more information.

  3. The account is invalid (found on the invalid segment of MF). The CP 54x series of notices advise the taxpayer to compare the name and identifying number with the SSN on their most recent social security card so the Service can release a refund. Refer to IRM 21.6.1.5.7, Resolving CP 54 Notices with Math Error Involvement, and IRM 3.13.5.125, CP 54 Notice Overview.

  4. Refer to IRM 3.13.5.20, IRS Individual Taxpayer Identification Number (ITIN) Format, for information on ITINs and IRM 21.5.6, Freeze Codes, for information on "I" Freeze. Usually an account with an invalid SSN also has a "G" Freeze (math error), refer to IRM 21.5.4, General Math Error Procedures.

CP 54B Inquiry Regarding Name and SSN - Refund Delayed
  1. A CP 54B, Inquiry Regarding Name and SSN - Refund Delayed, is issued to notify taxpayer of a problem with name and SSN on a refund return.

    1. Research IDRS to verify name and SSN. Refer to IRM 3.13.5.125, CP 54 Notice Overview, for procedures.

    2. If you are unable to verify entity information and resolve issue with oral statement, advise taxpayer to complete, sign, and return second page of the notice. Advise that signed response can be accepted by fax.

    3. Taxpayer will receive refund within 30 days of receipt of reply if no other Federal taxes or obligations are owed and a refund amount remains.

    4. Refer to IRM 21.5.6, Freeze Codes, if there is a "G" Freeze on the module.

CP 54E Inquiry Regarding Name and SSN on ES Tax Payments
  1. A CP 54E, Inquiry Regarding Name and SSN on ES Tax Payments, is issued to notify taxpayer of a problem with name and SSN on estimated tax payment.

    1. Research IDRS to verify name and SSN. Refer to IRM 3.13.5.125, CP 54 Notice Overview, for procedures.

    2. If you are unable to verify entity information and resolve issue with oral statement, advise taxpayer to complete, sign and return second page of the notice. Advise that signed response can be accepted by fax.

    3. If the payment is on the wrong TIN, input a credit transfer. Refer to IRM 21.5.8, Credit Transfer.

CP 54G Inquiry Regarding Name and SSN - Even/Balance Due
  1. A CP 54G, Inquiry Regarding Name and SSN - Even/Balance Due, is issued to notify taxpayer of a problem with name and SSN on return with an even balance or a balance due.

    1. Research IDRS to verify name and SSN. Refer to IRM 3.13.5.125, CP 54 Notice Overview, for procedures.

    2. If you are unable to verify the entity information and resolve issues with oral statement, advise taxpayer to complete, sign and return second page of the notice. Advise that signed response can be accepted by fax.

    3. If the taxpayer agrees with the balance due, request full payment. Refer to IRM 5.19.1-2, W&I Call Flow.

    4. If the taxpayer disagrees with the balance due because of a misapplied payment, research for the payment and input a credit transfer. Refer to IRM 21.5.8, Credit Transfers.

CP 54Q SSN and Name Inquiry - Second Request
  1. A CP 54Q, SSN and Name Inquiry - Second Request, is an automatic follow-up notice (second request) to the CP 54B.

  2. Automatically generates one year after the CP 54B if the taxpayer still resides on the invalid segment of Master File.

  3. Refer to IRM 21.3.1.4.39.1, CP 54B Inquiry Regarding Name and SSN - Refund Delayed.

CP 57 Electronic Fund Transfer - Notice Of Insufficient Funds on a Direct Debit Installment Agreement (DDIA) Payment Individual Master File (IMF)

  1. A CP 57, Electronic Fund Transfer - Notice Of Insufficient Funds on a DDIA Payment (IMF), is issued to notify taxpayer a direct debit installment agreement payment was not honored due to insufficient funds.

    If Then
    Taxpayer agrees Request submission of missing payment. Encourage the taxpayer to use the on-line payment options available on www.irs.gov under the payment tab.
    Taxpayer is experiencing difficulty that will prevent further installment payments from being honored Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer has reasonable cause for removal of penalty Refer to IRM 20.1.10.4.3, Penalty Relie.
    Taxpayer insists there were sufficient funds in their account Advise the taxpayer to contact their bank.
  2. For more information refer to IRM 20.1.10.4, IRC section 6657 Bad checks (Dishonored Checks or Other Forms of Payment).

CP 60 Credit Reversal Adjustment Notice

  1. A CP 60, Credit Reversal Adjustment Notice, is issued to notify taxpayer when a credit is transferred out creating a debit balance of $5.00 or more. Informs taxpayer of a credit reversal.

    If Then
    Taxpayer agrees with notice Request full payment. Refer to IRM 5.19.1-2, W&I Call Flow.
    Payment was not properly credited
    1. Research IDRS for missing payment.

    2. Refer to IRM 21.5.7, Payment Tracers.

CP 62 Notice of Credit Transfer

  1. A CP 62, Notice of Credit Transfer, is issued to notify taxpayer a payment they inquired about was located and applied to a specific account. The notice also advises of one of the following:

    • A balance due

    • An even balance

    • A refund has been or will be issued subject to offset for any Federal tax or other obligations owed (i.e., a TOP offset for child or spousal support, Federal non-tax debts, or state income tax).

  2. Research IDRS and explain reason for notice. Follow procedures in table below.

    If And Then
    Taxpayer agrees with notice There is an overpayment
    1. Advise refund will be issued within four to six weeks. Warn of possible offset.

    2. If more than four weeks have passed, refer to IRM 21.4.1, Refund Research.

    Taxpayer agrees with notice There is a balance due
    1. Request full payment.

    2. Refer to IRM 5.19.1-2, W&I Call Flow.

    Payment was made Was not properly credited to the account
    1. Research IDRS for payment.

    2. Refer to IRM 21.5.7, Payment Tracers.

    Taxpayer disagrees with notice for a reason other than a missing payment Provides justification Refer to appropriate IRM and take action necessary to correct account.


CP 71 Reminder Notice

  1. A CP 71, Reminder Notice, is issued to taxpayer once a year to remind taxpayer of a balance due, including penalty and interest. The notice is generated on accounts previously in a deferred Status (Status 23):

    If And Then
    Taxpayer agrees with notice Taxpayer’s financial status has not changed No action is necessary.
    Taxpayer indicates their financial status has changed Payments can now be made
    1. Request payment.

    2. Refer to IRM 5.19.1-2, W&I Call Flow .

    Taxpayer indicates a payment was made Was not properly credited to account
    1. Research for payment.

    2. Refer to IRM 21.5.7, Payment Tracers.

    Taxpayer disagrees with notice for reasons other than missing payment Provides justification Refer to appropriate IRM and take action necessary to correct account.

CP 71A Reminder Notice

  1. A CP 71A, Reminder Notice, is issued to taxpayer once a year on tax modules in Status 53 (currently not collectible). Status 53 is an IDRS status and the module may show another Master File status.

    If Then
    Taxpayer offers to make payments
    1. Establish installment agreement.

    2. Refer to IRM 5.19.1-2, W&I Call Flow

    Taxpayer requests a final payoff Compute payoff amount.
    Taxpayer is unable to pay
    1. Explain CP 71A is an annual notice. No enforcement action will be taken at this time.

    2. Ask taxpayer to make payments whenever possible.

    3. Refer to IRM 5.19.1-2., W&I Call Flow.

CP 71C and CP 171 Annual Reminder Notices

  1. A CP 71C, Reminder Notice - Balance Due, and CP 171, BMF Annual Reminder Notice, is issued to taxpayer annually for all Taxpayer Delinquent Accounts (TDA) in the queue that have been in status 24 for at least one year. The Compliance Services Collection Operations (CSCO) return address will be on the notice along with an Automated Collection System (ACS) telephone number. These notices are issued from February through November based on the Taxpayer's Identification Number (TIN).

CP 71D Reminder Notice - Balance Due

  1. A CP 71D, Reminder Notice - Balance Due, is issued to taxpayer once a year on accounts in collection Status 22 and 26. A separate notice is issued for each module in Status 22 or 26.

    If Then
    Taxpayer has recently been contacted by IRS and has paid or arranged to pay Advise taxpayer that notice is required by law and to disregard.
    Call received on Toll Free numbers (other than ACS) If in Status 22 transfer to ACS.

    Exception:

    If Federal Employee/Retiree Delinquency Initiative (FERDI) indicator is present on Status 22 account, transfer to FERDI using the Telephone Transfer Guide. Refer to IRM 5.19.18.2(3), Identifying FERDI Cases, for how to identify FERDI accounts.


    If Status 26 and is assigned to an Revenue Officer (RO), provide the taxpayer with the RO phone number. RO Lookup.
    Calls received on Field Collection (FC) Refer to ACS on Form 4442, Inquiry Referral.
    Taxpayer offers to make payments Refer to IRM 5.19.1, Balance Due.
    Taxpayer requests a final payoff Compute payoff amount.
    Taxpayer is unable to pay Refer to IRM 5.19.1-2, W&I Call Flow.

CP 71H - Reminder Notice - Balance Due

  1. A CP 71H, Annual Balance Due Reminder Notice for ACA (Revised 4-2016), is issued once a year on ACA (Affordable Care Act), MFT 35 modules to remind the taxpayer of a balance due.

    If Then
    Taxpayer offers to make payments
    1. Refer to IRM 5.19.1-2, W&I Call Flow.

    Taxpayer requests a final payoff Compute payoff amount.
    Taxpayer is unable to pay
    1. Explain CP 71H, is an annual notice. The SRP is not subject to penalties, liens or levies but interest will continue to accrue. In addition, the Service may offset federal tax refunds to the SRP until it is paid in full.

    2. Ask taxpayer to make payments whenever possible.

    3. Refer to IRM 5.19.1-2, W&I Call Flow.

CP 75 Exam Initial Contact Letter – Earned Income Credit (EIC) – Refund Frozen

  1. A CP 75, Exam Initial Contact Letter – EIC – Refund Frozen, is issued to notify taxpayer that their refund will be held pending an examination. The case will be open in the Audit Information Management System (AIMS) in Origination Code 5041, Project Code 0261, and source code 06. Refer to IRM 21.5.10.4.1, Earned Income Tax Credit (EITC) and Other Projects, for information on how to handle these cases.

CP 81 We may have a refund for you

  1. A CP 81, We may have a refund for you, is issued to notify taxpayer when the refund statute is within six months of Refund Statute Expiration Date (RSED). The CP 81 informs the taxpayer "We May Have A Refund For You" . The CP 81 is issued to coincide with news and press releases to remind taxpayers:

    1. A return has not been filed

    2. The time to file a claim for a refund/overpayment is about to expire

    3. A return/claim must be filed to claim the overpayment before the RSED.

  2. Refer to IRM 25.6.1.6.17, CP 81/081, for additional information.

CP 85 and CP 87 (Exam Soft Notices)

  1. A CP 85x, Exam EIC "Soft" Notice, and CP 87x, Exam Dupe TIN Notice, are issued to taxpayer as soft notices by Examination. They are sent for information purposes only and inform the taxpayer they may have claimed one of several tax benefits in error.

  2. No adjustments are made to the return, nor will be made, unless the taxpayer initiates an adjustment. For additional information and adjustment procedures, refer to IRM 21.5.10.4.2, Exam Soft Notices CP 85A, CP 85B, CP 85C, CP 87A, CP 87B, CP 87C, and CP 87D.

CP 86 Restricted Interest/Penalty Conditions

  1. A CP 86, Restricted Interest/Penalty Conditions, is an internal notice and as of 01/01/2001 this notice should generate in the same cycle as the TC 150. Research the account to determine the reason for the restriction and compute the current amount of interest to assess or abate.

  2. Anytime debit interest is manually computed, it is necessary to recompute the entire tax module to ensure an accurate computation is made and attach a source document to the account. Refer to IRM 20.2.5.6.2, Manual Computations, and IRM 20.2.1.5.2.1, Manual Calculation of Interest - Documentation, for more information.

  3. Update interest from the last interest update on manually computed accounts. Request return and source documents if necessary.

  4. Refer to IRM 20.2, Interest, for interest computation.

  5. Refer to IRM 21.7.11.4.5.1, Routing of CP 186 with U-, -V, -W, -Y, or TC 521 with Closing Codes 81.

CP 86 Failure to Pay (FTP) Restriction
  1. Failure to Pay (FTP) penalty must be manually reviewed when the penalty is restricted from computer computation. Input changes to penalty manually.

  2. Analyze module to determine if Failure-to-File (FTF) penalty was correctly reduced to 22.5% (4.5% per month) when the TC 270 was assessed. If the maximum FTP penalty has been assessed and there is no TC 971 AC 262 on the account, input TC 971 AC 262 using CC REQ77.

  3. CP 86 special consideration with respect to Notice 2015-09 (tax periods 201412 – 201511 only). Refer to IRM 20.1.2.1.4.3, Notice 2015-09 Penalty Relief, for procedures.

Adjusting CP 86 Accounts
  1. Analyze tax module, transcript, and source document to determine if you should manually adjust interest and/or penalty. Do the following:

    Note:

    CP 86 modules, currently or previously in Taxpayer Delinquent Account (TDA) status (Collection statuses 22, 24, 26 or 60), or have the following freeze codes: U-, -V, -W, -Y or TC 521 with Closing Code 81 will be transferred to Atlanta CSCO. Do not close the Submission Processing control base nor send any paper to Atlanta CSCO. Accounts Management technicians must reassign to a unique IDRS number, 0765500001. Close your CIS case, using the close as MISC option, then reassign a new IDRS control to 0765500001.

    If Then
    No additional interest or penalty adjustment is necessary and
    1. There is no credit or freeze code on the account
      OR

    2. There is a credit or freeze code on the account.

    1. No account actions are required, close case.
      or

    2. Determine if the freeze should be released following normal freeze procedures. Resolve the credit issue when appropriate. Take all account actions as required by normal procedures.

    Manual action is necessary
    1. Recompute interest or FTP penalty as applicable following IRM 20.1, Penalty Handbook, or IRM 20.2, Interest.

    2. Input necessary adjustments.

    3. Use Hold Code 0.

    4. Refer to IRM 20.2.5.6.2, Manual Computations, and IRM 20.1.2.1.5, Manual Penalty Adjustments, when manually computing and adjusting interest and penalties.

    5. Due to recent changes to FTP penalty programming, Refer to the following to ensure proper procedures are being followed, when applicable:

      • IRM 20.1.2.1.6, Correcting Incorrect Assessments,

        Note:

        Release the G- freeze with a TC 272 for .00 when the module has been restricted with respect to a reversed refundable tax credit, except if the credit reversal is a TC 767 with CRN 000 or CRN 334. Refer to IRM 20.1.2.1.6.1.3.1, Adjusting Refundable Credits Without a CRN and With CRN 334.

    Available credit is less than the additional amount Assess total additional amount.

    Exception:

    If the additional amount exceeds available credit by ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , assess only the available credit. Do not assess zero balance account for ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Available credit is more than the additional amount. Assess only the additional amount due and let the remainder be refunded.

    Reminder:

    Per IRC § 6631 anytime interest is manually computed as in the case of the CP 86, an explanation must be sent to the taxpayer. Refer to IRM 20.2.5.6.2, Manual Computations. Additional information on source documentation can be found in IRM 20.2.1.5.2.1, Manual Calculation of Interest - Documentation.

  2. If the module contains a -C freeze, and the module does not contain a TC 166, determine if the FTF penalty needs to be assessed.

    Exception:

    Do not assess FTF penalty if the return contains computer condition code (CCC) R.

    Follow these steps to determine the amount of FTF penalty to be assessed (if any):

    1. If the return appears to have been filed late, then determine the number of months (if any) subject to the penalty for filing late. See IRM 20.1.2.2.7.1, Period Subject to IRC 6651(a)(1) for detailed instructions. Keep in mind when timely mailing equals timely filing. See IRM 20.1.2.1.1, When Timely Mailing Equals Timely Filed or Paying (Received Date vs. Filing/Payment Date) . If the number of months subject to penalty is zero, stop. No FTF penalty is due.

    2. If the return was filed late, determine the amount subject to penalty. See IRM 20.1.2.2.7.2, Amount Subject to IRC 6651(a)(1) for detailed instructions. If the amount subject to penalty is zero or less, stop. No FTF penalty is due.

    3. Multiply 5% by the number of months subject to penalty (determined in step 1). This is the FTF penalty rate.

    4. Multiply the amount subject to penalty (determined in step 2) by the FTF penalty rate in step 3). This is the gross FTF penalty amount.

    5. Determine the amount of penalty for paying late accrued during the period subject to the penalty for filing late. For each month subject to FTF penalty, the FTP penalty is 1/2 % of so much of the tax shown on the return as was not paid at the beginning of each month subject to the FTF penalty.

      Exception:

      There are certain conditions under which the basic penalty rate may be increased or decreased. Refer to IRM 20.1.2.2.8.1, Computing the Penalty, for more information.

    6. Subtract the FTP penalty (determined in step 5) from the gross FTF penalty (determined in step 4). This is the net FTF penalty due. Assess this amount with TC 160 along with any FTP penalty or interest adjustment that is needed.

    Reminder:

    Per IRC § 6751 anytime penalty is manually computed as in the case of the CP 86, an explanation must be sent to the taxpayer. Refer to IRM 20.1.2.1.5, Manual Penalty Adjustments.

CP 89 Annual Installment Agreement Statement

  1. A CP 89, Annual Installment Agreement Statement, is issued to taxpayer as an annual reminder notice sent on all accounts with installment agreement activity. This notice is sent annually and required by Section § 3506 of RRA '98. The notice provides the following information:

    • For your Records - This is not a Bill

    • Provides a one year accounting of all payments submitted

    • Shows modules to which payments were applied

    • Shows all balance due periods

  2. The notice instructs the taxpayer:

    If And Then
    The notice shows restricted interest and/or penalty The taxpayer wants a balance with the penalty and interest Contact IRS at the telephone number on the notice
    The notice does not show all of the payment(s) they made during the year. Contact IRS at the telephone number on the notice

Form 9774 Annual Reminder Notice on Non-Master File (NMF) Accounts

  1. The Form 9774, Annual Reminder Notice For Automated Non-Master File (ANMF) / Non-Master File (NMF), is sent to all Non-Master File (NMF) accounts, including TDAs and those in Status 53. Refer to IRM 21.3.1.5.109, Non-Master File (NMF) Notices, for more information.

CP 2057 - Soft Notices Income Discrepancy

  1. The CP 2057 is a soft notice which informs the taxpayer there appears to be a discrepancy with income reported by a third party. The notice provides the third party information IRS received such as the name of the Third Party and address. The issuance of the CP 2057 is identified by Transaction Code 971 Action Code 922 on Command Code TXMODA or IMFOLT. The CP 2057 may be available for viewing on the Alerts section of the Account Summary window on AMS, "AUR data present - YYYY". If the CP 2057 is not available for viewing on AMS, you can review CC IRPTR for the additional income information reported under the taxpayer's SSN. The notice provides the toll free number of 1-877-570-3536.

    Note:

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

  2. CP 2057, requests that the taxpayer review their records and if the income reported on their return is CORRECT to:

    • Not call or respond to the IRS in reference to this notice.

    • Contact the third party if the income was incorrectly reported to the IRS and request that the third party payer verify and correct their records.

      Note:

      If no action is taken, the taxpayer should expect to continue to have reporting problems if the income is not corrected before filing future returns.

  3. CP 2057, requests that the taxpayer review their records and if the income reported on their return is NOT CORRECT to:

    • File an amended return, Form 1040X.

    • Mail Form 1040X to the same IRS address where they mailed their tax return. If e-filed, refer to the Instructions for Form 1040X, for the address based upon the State they reside in.

    Caution:

    Do not refer a case or telephone call in response to a CP 2057 to AUR. Respond to a telephone call and process a case in response to a CP 2057 following normal procedures.

  4. Refer to chart below for handling of calls received pertaining to the CP 2057:

    Note:

    Starting January 2, 2014 Refer to IRM 21.1.1.6(5)-(7), Customer Service Representative (CSR) Duties, for new tax law procedures.

    If the Taxpayer Calls and States: Response:
    The income on tax return they filed is correct.
    1. Inform taxpayer to contact the third party payer stating the income reported to IRS is incorrect. Payer must correct their records if determined incorrect and submit corrected documentation to taxpayer and IRS.

    2. If the taxpayer indicates a need to contact a W-2 payer, advise the taxpayer of different sources to obtain this information, e.g. Yellow Pages, the World Wide Web, directory assistance. If the taxpayer has tried these sources and failed, research CC IRPTR and provide the address if available

    3. Record a history on AMS of the actions taken.

    The income on tax returns is not correct.
    1. Income can be added to return by submitting Form 1040X to amend the return.

    2. Mail Form 1040X to the same IRS address where they mailed their tax return. If e-filed, refer to the Instructions for Form 1040X, for the address based upon the State they reside in.

    3. Record a history on AMS of the actions taken.

    Taxpayer needs copy of tax return.
    1. Taxpayer wants copy of the originally filed return; inform taxpayer to submit Form 4506 and fee to address notated on form.

    2. Taxpayer wants copy of filed return and does not need original return. Inform taxpayer requested transcript can be secured from www.irs.gov. If taxpayer does not have ability to secure from website Refer to, IRM 21.2.3, Transcripts.

    3. Record a history on AMS of the actions taken.

    Taxpayer needs a Form 1040X. Direct taxpayer to call 1-800-829-3676 or go to www.irs.gov to secure form. Record a history on AMS of the actions taken.
    Taxpayer states did not bank with financial institution, did not work for employer, income is not taxpayer's, etc.,
    1. Advise the taxpayer How To Report Identity Theft, Refer to Exhibit IRM 21.3.4-12.

    2. Never refer the taxpayer back to the employer/payer if there is any indication of identity theft.

    3. Substantiation data can be accepted from the taxpayer or someone who has power of attorney for the taxpayer (per Form 2848, not Form 8821).

    4. Record a history on AMS of the actions taken.

    Taxpayer is submitting Form 1040X and needs payment plan. Inform taxpayer to complete Form 9465 or a statement requesting payment plan detailing payment amount and due date of payment. Taxpayer can secure form from www.irs.gov or calling 1-800-829-3676. Record a history on AMS of the actions taken.

CP 2000 Issued to Taxpayer to Request Verification for Unreported Income, Payments, or Credits

  1. A CP 2000, Request for Verification of Unreported Income, Payments, or Credits, is issued to notify taxpayer of a proposed change to tax liability because of income that is not identifiable or apparently not fully reported on the return and/or credits and deductions that appear overstated.

  2. When a CP 2000 is issued, the Automated Underreporter (AUR) function puts a control on the module. IDRS research shows:

    • A TC 922

    • An open IDRS control Base established to XX88002000 (XX is the Campus Location Code)

    • An underreporter process code of 55 or 57

    Note:

    Penalty amounts on the CP 2000 are reflected in the "Billing Summary" along with a penalty explanation in the "Explanation of changes" section when the taxpayer owes a penalty.

    Note:

    If only the TC 922 (no process code) is on the account, do not refer case to AUR. Work following normal procedures.

Status of Individual Master File (IMF) Underreporter Cases

  1. When working accounts with Automated Underreporter (AUR) involvement, it is necessary to research the account to determine where the account is in the AUR process. This can be determined by reviewing the Underreporter Process Codes listed under the Transaction Code (TC) 922 on the account. The status of an Underreporter case will be determined by the last process code posted. The definitions of the Underreporter Process Codes can be found in Section 8C, of Document 6209, IRS Processing Codes and Information, and in IRM 4.19.3-4, AUR Process Codes. Refer to the chart in paragraph 4 to determine if a case should be processed or referred to AUR.

    Note:

    If additional assistance is required, contact the appropriate Automated Underreporter (AUR) Coordinator. A listing is provided under the "Who/Where" tab AUR Coordinators on the Servicewide Electronic Research Program (SERP) home page. Do not share the telephone contact information with the taxpayer.

  2. When working phones: Review the account and determine the last processing code. Refer to the chart in paragraph 4 to determine if the call meets AUR criteria and should be transferred to AUR. If it is determined the AUR criteria has been met, transfer to the AUR numbers shown below. For calls received on the Practitioner Priority Services (PPS) line, refer to IRM 21.3.10.5, Transfers and/or Referrals.

    Reminder:

    In an attempt to maximize customer satisfaction and IRS business results, use probing questions to identify the purpose of the call and IDRS research to identify if the call should be transferred immediately after completing required taxpayer authentication in IRM 21.1.3.2.3, Required Taxpayer Authentication. It is important to get callers to the appropriate area that can best resolve their issue as quickly as possible.


    • #92341 English (#1841 for Infrastructure Update Project (IUP) sites)

    • #92342 Spanish (#1842 for IUP sites)

    Note:

    The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation, advise taxpayer of the AUR hours of operation and provide the AUR toll free number 1-800-829-8310.



  3. When working paper: All correspondence and Forms 1040X must be reviewed to determine if the response is related to the AUR issue or account change. Refer to the chart in paragraph (4) to determine if case meets AUR criteria. Referring the case back to the open control in AUR should be only for cases where the status allows for the referral and the case meets AUR criteria. If the change is for filing status, dependents, exemptions, claiming a credit, correcting math error or you receive a Form 8379, Injured Spouse Allocation. DO NOT refer case to AUR, follow normal adjustment procedures. AUR will return all Forms 1040X and correspondence if it does not meet their criteria causing additional aging of the case. When working amended returns/claims , if it is determined the case meets AUR transfer criteria, input a TC 971 AC 015 to indicate the case has been forwarded to Underreporter.

  4. Once the status of the AUR issue is determined, use the following chart to determine the correct action to be taken:

    If Then
    TC 922 but no process code (PC) is shown
    1. Underreporter does not have a case. Do not refer the case or call to AUR.

    2. Work following normal procedures.

    The last process code (PC) is 01, 03 or 06
    1. The AUR issue or case is pending, and the taxpayer may or may not receive a notice. Do not refer the case or call to AUR.

    2. Respond to the taxpayer following normal procedures.

    The last process code is 09
    1. AUR has not contacted the taxpayer yet.

    2. Only transfer calls to AUR if they are calling about the Underreporter issue.

    Caution:

    Do not send the TP a copy of a CP 2000 prior to the Notice Date.

    • Tax year 2007, TC 922 and a process code string of 03, 16

    Or
    • Tax year 2008 and 2009, TC 922 and a process code string of 07, 19.

    1. There is no AUR case. This designates a soft notice, CP 2057, for both process code (PC) strings follow appropriate steps below.

    2. If contact is a Form 1040X, do not refer to AUR. Work and respond to the taxpayer following normal procedures.

    3. If a phone contact and the taxpayer asks about the CP 2057, transfer the call to AUR:

      • #92341 English (#1841 for IUP sites)

      • #92342 Spanish (#1842 for IUP sites)

      Note:

      All correspondence received by AM will be reviewed to determine if there is an AUR criteria involved. All situations other than AUR will be addressed by AM before routing to AUR to complete.

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation or if the caller does not want to be transferred, provide the AUR toll free number 1-800-829-8310.

    Tax Year 2008 and 2009, a TC 922 and a process code string of 07, 49
    1. There is no AUR case or taxpayer contact. This designates a soft notice, CP 2057 was not mailed to the taxpayer. Do not refer the case or call to AUR.

    2. Continue to process the Form 1040X.

    Tax year 2010 through 2012, a TC 922 and a process code string of 07, 19.
    1. There is no AUR case. This designates a soft notice, CP 2057, follow appropriate steps below. Do not refer the call to AUR.

    2. If contact is a Form 1040X, do not refer to AUR. Work and respond to the taxpayer following normal procedures.

    Note:

    For TY 2013 and subsequent, CP 2057, is reflected on IDRS with a TC 971/AC 922 on the account.

    The last process code is 10–14,15*,16, 17,18*, or 21–29
    1. The AUR issue or case was closed, and taxpayer will not receive a notice. Do not refer the case or call to AUR.

      Exception:

      Beginning May 2015, PC 17 is used to close verified ID Theft cases based on taxpayer contact.

      Note:

      *PC 15/18: If the PC immediately preceding PC 15 or 18 is 01, 03, or 06 the case was closed without taxpayer contact.

    2. Respond to the taxpayer following normal procedures.

    The last process code is 35, 36, 38, 62–64, 66 or 82, 83, 85 or 86
    1. AUR has closed their case and transferred it to an Examination function.

      Note:

      Beginning September 30, 2016, PCs 62 and 82 indicate an AUR tax assessment.

    2. Respond to the taxpayer following normal procedures.

    The last process code is 44, 72 or 84
    1. AUR has closed their case and transferred it to Campus Fraud.

    2. Do not advise caller that case was referred to Campus Fraud.

    3. Respond to the taxpayer following normal procedures.

    The last process code is 46, 65 or 76
    1. AUR has closed their case and transferred it to Criminal Investigation.

    2. Do not advise caller that case was referred to Criminal Investigation.

    3. Respond to the taxpayer following normal procedures.

    The last process code is 80
    1. AUR has closed their case and transferred it to Appeals.

    2. Respond to the taxpayer following normal procedures.

    The last process code is 30, 34, 54, 55, 57–60, 75, 77–79, 81, 95, 96, 97–99
    1. Case is open in AUR. Follow appropriate steps below.

    2. If a telephone contact with the purpose of setting up a payment arrangement for the proposed AUR assessment and you are trained in telephone collection processes:

      1. DO NOT transfer the call to AUR.

      2. Instruct the taxpayer to sign their AUR notice response form by checking the “I agree with all changes” box, sign, and date their form. Instruct them to return their completed form to the address shown on the notice. If taxpayer requests to fax their AUR notice response form instead of mailing, advise them to fax the form to the fax number provided on their notice.

      3. Employees should follow the procedures in IRM 5.19.1-2, W&I Call Flow.

    3. If a telephone contact and the taxpayer's Underreporter issue is beyond the scope of your training do not discuss the AUR issue with the caller and transfer the call to AUR:

      • #92341 English (#1841 for IUP sites)

      • #92342 Spanish (#1842 for IUP sites)

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation or if the caller does not want to be transferred, provide the AUR toll free number 1-800-829-8310.

      Exception:

      If the contact is an International caller, create Form 4442, Inquiry Referral, hand write this IRM reference in Section B and include the complete foreign address of the taxpayer. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    4. If this is a paper case, route the correspondence or Form 1040X to the campus where the case is assigned. The first two digits of the TC 922 DLN indicate where the case is assigned. Input TC 971 AC 015 with the received date of the claim or amended return, as the transaction date, to indicate case has been transferred to AUR. Refer to the AUR Addresses (Open Cases).

    Caution:

    If it can be determined that the AUR issue is not included, do not route the Form 1040X to AUR. If AUR returns the Form 1040X because it is unrelated to their issue, complete processing of Form 1040X.

    The last process code is 15*, 18*, 39, 47, 48, 51, 52, 69, 70, 71, 73, 74, 89, 91, 92 or 93
    1. Case was worked and closed by AUR with no change to the tax liability and/or refundable credits. Do not refer the case or call to AUR.

      Note:

      PC *15/18: If the PC immediately preceding PC 15 or PC 18 is other than 01, 03 or 06, the taxpayer was contacted by AUR.

      Note:

      Beginning May 2015, PC 17 is used to close verified ID Theft cases based on taxpayer contact.

      Note:

      Beginning September 30, 2016, PCs 39, 69, and 89 indicate an AUR tax assessment.

    2. Respond to the taxpayer following normal procedures.

    The last process code is 20, 53, 67, 68, 87, 88, 90 or 94

    Note:

    The following are the definitions of three process codes. They are:
    67 - Fully agreed (CP 2000 Notice)
    87 - Fully agreed (Stat Notice)
    90 - Tax assessed by default

    1. Case was worked and closed by AUR with an adjustment to tax liability and/or refundable credits. Follow appropriate steps below.

    2. If this is a telephone contact for other than payment information or payment options do not discuss the AUR issue with the caller and transfer the call to AUR:

      • #92341 English (#1841 for IUP sites)

      • #92342 Spanish (#1842 for IUP sites)

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation or if the caller does not want to be transferred, provide the AUR toll free number 1-800-829-8310.

    3. If the taxpayer files a claim or amended return requesting a refund or abatement of tax previously assessed by AUR, route the case to AUR at the campus where the case was worked. Input a TC 971 AC 015 with the received date of the claim or amended return, as the transaction date to indicate case has been transferred to AUR. Do not route cases to AUR that do not address or do not request reconsideration of the AUR assessment. Refer to Examples below of case types NOT to be sent to AUR. If the taxpayer is denying receipt or disagrees with the amount of the AUR identified income, route the correspondence or Form 1040X, Amended U.S. Individual Income Tax Return, to AUR at the campus where the case was worked. The first two digits of the TC 922 DLN indicate where the case is assigned. Refer to the AUR Addresses (Open Cases) for open cases and AUR Reconsideration Request Contact Information for closed cases.

      Exception:

      If the taxpayer includes either Form 14039, Identity Theft Affidavit, or a police report, route to Identity Theft Victim Assistance (IDTVA). Do not route to AUR. Refer to IRM 25.23.4.7.7, Case Transfer Within IDTVA, for procedures.

    4. The Examples below are situations where the taxpayer is not denying the receipt or disagreeing with the amount of the AUR identified income. Do not route these types of cases to AUR. Other Category A (CAT-A) criteria may exist for the requested changes. Refer to Exhibit 21.5.3-2, Examination Criteria (CAT-A) - General. These Examples are not intended to be all inclusive.

      Example:

      Form 1040X received with a Schedule C, reducing underreported income through expense reporting and subsequently reducing self-employment tax.

      Example:

      Form 1040X received with Schedule D, adjusting the basis on the underreported capital gain.

      Example:

      Form 1040X filed only to change filing status and/or add a dependent.

      Example:

      Taxpayer sent a loose Form or Schedule to reduce underreported income through expenses or cost. Send the taxpayer an 89C Letter to request a Form 1040X.

      Reminder:

      A TC 240 penalty assessed by AUR for substantial understatement of income must be adjusted when decreasing the previous AUR assessment. If the adjustment is not related to the AUR assessment, do not adjust the TC 240 penalty. Refer to IRM 20.1.5.8, IRC Section 6662(d): Substantial Understatement, for more information on calculating the penalty. Refer to IRM 20.1.5.3.2, Penalty Assessments and Abatements, for information on adjusting the penalty.

      Note:

      If additional assistance is required, contact the appropriate AUR Coordinator. A listing is provided under the "Who/Where" tab on the SERP home page. Do not share the telephone contact information with the taxpayer.

Resolving or Referring IMF Underreporter Cases

  1. Explain reason for notice. Ask taxpayer to compare their records with income and withholding listed on the CP 2000. You can often resolve the discrepancy based on the taxpayers response.

  2. If you cannot resolve the discrepancy based on the taxpayers response, transfer the call to AUR:

    • #92341 English (#1841 for IUP sites)

    • #92342 Spanish (#1842 for IUP sites)

    Note:

    Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation or if the caller does not want to be transferred, provide the AUR toll free number 1-800-829-8310.

  3. If taxpayer requests a copy of their tax return, use the TDS system to provide a copy of the return, refer to IRM 21.2.3.3.1, Assistor Provided through Transcript Delivery System.

  4. If the taxpayer indicates a need to contact an IRP payer, advise the taxpayer of different sources to obtain this information, e.g. Yellow Pages, the internet, directory assistance. If the taxpayer has tried these sources and failed, research IDRS using CC IRPTR and provide the address if available.

  5. If a call is received by a third party who states the authorization to speak to the Service was given via the CP 2000, transfer the call to AUR. AM does not have the capability to see the authorization given on the CP 2000.

Copies of CP 2000, CP 2501, 2893C Letter

  1. Users having access to Accounts Management Services (AMS) may print and provide a copy of the CP 2000 and CP 2501 Otherwise, for copies of the CP2000/2501/2893C, refer to the table below:

    Caution:

    On jointly filed returns when the requestor is the secondary taxpayer and provided an address that is different from the primary's because of a divorce or separation- When sending a copy of the CP 2000, sanitize the primary's address from the letter to prevent inadvertent disclosure.

    Caution:

    When using AMS to provide the taxpayer with a copy of CP 2000 or CP 2501, review the notice date. If the taxpayer has not had enough time to receive the AUR notice, do not disclose any AUR notice information including the presence of the notice.

    If Then
    Taxpayer requests a copy of a CP 2000, CP 2501, or Letter 2893C,Underclaimed/Overclaimed Withholding Excess Social Security or Medicare Tax Closure.
    1. If this is a telephone contact, create Form 4442, Inquiry Referral. Enter "AUR Clerical" in Part I, item 5. Enter "Send copy of (the specific requested notice/letter)" in Part III, Section B. Route Form 4442 to the campus where the AUR case is assigned/was worked using the first two digits of the TC 922 DLN to determine the location.

    2. If this is a paper case, route the correspondence or Form 1040X, Amended U.S. Individual Income Tax Return, to the campus where the case is assigned. The first two digits of the TC 922 DLN indicate where the case is assigned.

  2. Advise taxpayer to expect a reply within 60 days unless the call was transferred to the AUR transfer number.

IMF Underreporter Letters

  1. In addition to CP 2000, Underreporter uses other letters to request and gather information. If taxpayer indicates they received these letters, explain based on the following:

    • Letter 1802C — Used generally to provide information at the close of the Underreporter case. Response may or may not be needed.

    • Letter 2625C — Used to correspond with an employer/payer to clarify income from Form W-2, Wage and Tax Statement, and the Form 1099 series. Ask employer/payer to complete form and return.

    • Letter 2626C — Used to correspond with taxpayer to obtain additional information or to provide further explanation subsequent to a CP 2000 or CP 2501 notice. A response is usually expected.

    • Letter 2627C — Used to obtain missing information when an incomplete Power of Attorney (POA) is submitted by taxpayer. A response is expected.

    • Letter 4314C — Used to inform taxpayer the case is not yet resolved. This is issued from AUR when another action is being taken on a case at the same time (e.g., when a letter to validate income or additional research is being conducted).

    • Letter 2893C — Used to notify taxpayer of adjustment due to Underclaimed or Overclaimed Withholding, Excess Social Security Tax, or Additional Medicare Tax Withheld.

  2. AUR sends CP 2005 to taxpayers to thank them for information and to inform them that AUR is closing the case with no change to the tax liability and/or refundable credits.

  3. If taxpayer has questions about these notices, transfer the call to AUR:

    • #92341 English (#1841 for IUP sites)

    • #92342 Spanish (#1842 for IUP sites)

    Note:

    Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation or if the caller does not want to be transferred, provide the AUR toll free number 1-800-829-8310.

Oral Statement

  1. AUR accepts oral statements for resolution of a number of issues. Refer to IRM 4.19.3.21.2, Telephone Responses.

    Caution:

    Many of these oral statements involve Official Use Only (OUO) information. Please be careful not to release OUO information to taxpayers.

  2. Transfer the call to AUR:

    • #92341 English (#1841 for IUP sites)

    • #92342 Spanish(#1842 for IUP sites)

    Note:

    Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation or if the caller does not want to be transferred, provide the AUR toll free number 1-800-829-8310.

  3. Oral Statement Authority (OSA) is accepted from a designated third party only if taxpayer has completed the Authorization Statement on the CP 2501 /CP 2000 or submitted a valid Power of Attorney (POA).

CP 2501 Pre-CP 2000 Contact Letter

  1. A CP 2501, Initial Contact to Resolve Discrepancy Between Income, Credits, and/or Deductions Claimed on Return and Those Reported by Payer, is an initial contact letter requesting additional information. In certain situations, issuance of a CP 2501 provides better customer service since it is an inquiry instead of a proposal of assessment.

    1. Explain why the notice was received. Ask taxpayer to compare their records with the payer information listed on the CP 2501. If taxpayer agrees with information on notice transfer the taxpayer to AUR:
      •#92341 English (#1841 for IUP sites)
      • #92342 Spanish (#1842 for IUP sites)

      Note:

      Inform the taxpayer they are being transferred. The AUR product line hours of operation are 7:00 a.m. - 8:00 p.m. local time. If outside of the hours of operation or if the caller does not want to be transferred, provide the AUR toll free number 1-800-829-8310.

    2. If taxpayer does not totally agree, they should respond as in IRM 21.3.1.5.57, Resolving or Referring IMF Underreporter Cases.

AUR Special Handling

  1. Do not refer Tentative Carrybacks (TENTs,) Restricted Interest Claims (RINTs), payment tracers, or entity change only requests to AUR. Handle as follows:

    If And Then
    Correspondence relates to two different tax periods, only one of which relates to the AUR Program. You can separate issues by tax period
    1. Photocopy the correspondence related to the URP issues.

    2. Route as appropriate.

    3. Work other issue or tax period following normal adjustment procedures.

Individual Taxpayer Identification Number (ITIN) Notice Inquiries

  1. AM telephone assistors will address ITIN status and notice inquiries from applicants or their authorized representatives. General instructions for responding to ITIN notice inquiries can be found in IRM 3.21.263.7, Accounts Management (AM).

  2. Instructions for responding to inquiries on specific ITIN notices are in the following subsections.

CP 565 ITIN Assignment Notice
  1. CP 565, ITIN Assignment Notice, advises the applicant of their assigned ITIN.

  2. Follow instructions in IRM 3.21.263.7.3.1, Response to CP 565, Assignment Notice, to respond to the caller.

CP 566 ITIN Suspense Notice
  1. CP 566, ITIN Suspense Notice, advises the applicant that additional information and/or supporting identification or exception documentation is necessary to complete the processing of Form W-7, Application for IRS Individual Taxpayer Identification Number.

    Reminder:

    Do not refer applicants receiving a CP 566 to a Taxpayer Assistance Center (TAC). Current procedures require the applicant to submit their original documents directly to SPC ITIN Operations in response to a suspense notice. The TAC will not authenticate the same passport or national ID card a second time from an applicant in response to a ITIN suspense notice.

  2. Follow instructions in IRM 3.21.263.7.3.2, Response to CP 566 and Form 14415 Suspense Notices, to respond to the caller.

    Reminder:

    Review all remarks on the W-7 Application View Screen as well as comments and the history area on the W-7 History Screen. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

CP 567 ITIN Rejection Notice
  1. CP 567, ITIN Rejection Notice, advises the applicant that the application can not be processed as submitted, for a specific reason that must be addressed.

  2. Follow instructions in IRM 3.21.263.7.3.3, Response to CP 567, Reject Notice, to respond to the caller.

CP 574 ITIN Hard Reject Notice
  1. CP 574, Hard Reject Notice, advises the applicant that the application was rejected because the application required supporting identification documentation and a valid U.S. federal tax return.

  2. Follow instructions in IRM 3.21.263.7.3.4, Response to CP 574, Hard Reject Notice, to respond to the caller.

Business Master File (BMF) Notices

  1. Information in this section applies to Business Master File (BMF) notices and other business notices. Each subsection presents an overview of a specific notice, general procedures for working the notice, and a reference to the IRM containing detailed procedures.

CP 081 REFUND and Refund Statute Expiration Date (RSED) within Six Months

  1. A CP 081, We may have a refund for you, is issued to notify taxpayer the RSED is within 6 months of expiration. Titled "We May Have a Refund for You" , this notice informs the taxpayer that:

    • a return has not been filed

    • the time to claim an overpayment/credit is about to expire, and

    • a return/claim must be filed to claim the overpayment before the RSED.

    Note:

    Refer to IRM 25.12, Delinquent Return Refund Hold Program.

  2. Refer to IRM 25.6.1.8.4, Processing Original Delinquent Returns.

CP 101 Math Error, Balance Due of $5 or More on Form 940

  1. A CP 101, Math Error, Balance Due of $5 or More on Form 940, is issued to notify taxpayer of an error on Form 940 and Form 940–EZ, Employer's Annual Federal Unemployment Tax (FUTA) Return, that resulted in a balance due. After researching IDRS, explain reason for math error. Follow actions in table in IRM 21.3.1.5.70, CP 112 Math Error, Overpayment of $1 or More on Form 941, Form 941SS, Form 942, Form 943, Form 945.

CP 102 Math Error, Balance Due of $5 or More on Form 941, Form 941SS, Form 943, Form 944, Form 944SS, Form 945

  1. A CP 102, Math Error, Balance Due of $5 or More on Form 941, Form 941SS, Form 943, Form 944, Form 944SS, Form 945, is issued to notify taxpayer of an error on Form 941, Employer's Quarterly Federal Tax Return, Form 941SS, Employer's Quarterly Federal Tax Return American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands, Form 944, Employer's Annual Federal Tax Return, Form 943, Employer's Annual Tax Return for Agricultural Employees, or Form 945, Annual Return of Withheld Federal Income Tax that results in a balance due. For resolution, refer to table in IRM 21.3.1.5.70, CP 112 Math Error, Overpayment of $1 or More on Forms 941, 941SS, 942, 943, 945.

CP 108 Problem With Your Federal Tax Deposit (FTD)

  1. A CP 108, Problem With Your Federal Tax Deposit (FTD), is issued to notify taxpayer when Service Center Recognition Image Processing System (SCRIPS) processing does not find the type of tax and/or tax period cannot be determined on an Electronic Federal Tax Payment System (EFTPS) payment.

  2. This notice advises taxpayer where the credit has been posted and provides a tear-off portion to be returned if payment was applied incorrectly. Refer to IRM 21.7.11.4.1, CP 108 - Problem With Your Federal Tax Deposit (FTD), for resolution.

CP 111 Math Error, Overpayment of $1 or More on Form 940

  1. A CP 111, Math Error, Overpayment of $1 or More on Form 940, is issued to notify taxpayer of an error on the Form 940 and Form 940–EZ, Employer's Annual Federal Unemployment Tax (FUTA) Return, resulting in a change in the amount of the refund. For resolution, of the CP 111 follow procedures in IRM 21.3.1.5.70, CP 112 Math Error, Overpayment of $1 or more on Form 941, Form 941SS, Form 942, Form 943, Form 945.

CP 112 Math Error, Overpayment of $1 or More on Form 941, Form 941SS, Form 942, Form 943, Form 945

  1. A CP 112, Math Error, Overpayment of $1 or More on Form 941, Form 941SS, Form 943, Form 945, is issued to notify taxpayer of an error on Form 941, Form 941SS, Form 944, Form 943, or Form 945, resulting in a change in the amount of the refund. For resolution, refer to table below:

    If And Then
    Taxpayer agrees with notice A refund is due
    1. Advise taxpayer to correct their copy of return.

    2. Taxpayer will receive refund within six weeks. Warn of possible offset.

    Taxpayer agrees with notice A balance is due
    1. Advise taxpayer to correct their copy of return.

    2. Request payment refer to IRM 5.19.1-2, W&I Call Flow.

    Taxpayer indicates a payment was made Has not been credited to account
    1. Research for missing payment.

    2. Refer to IRM 21.5.8, Credit Transfers.

    Taxpayer does not agree Notice indicates a refund due
    1. Refer to IRM 21.7, Business Tax Returns and Non-Master File Accounts, for information on error conditions relating to BMF tax forms.

    2. Ask taxpayer to send necessary documentation. Advise them that the documentation may be faxed. To determine if the documentation can be faxed while you are on the telephone, refer to IRM 21.5.2.4.3, Adjustments Requiring An Amended Return or Taxpayer Documentation. If the taxpayer can fax, provide them with your fax number.

    3. If the taxpayer cannot fax immediately, advise them to call back when they are able to fax or, if unable to fax, they may submit the request and supporting documentation to the address where they filed their return.

    4. If the change can be made per oral statement, e.g., the amount falls under tolerance or is an IRS error, adjust account, as appropriate.

    5. If necessary, prevent excess credit from refunding.

    Taxpayer does not agree Notice indicates a balance due
    1. Follow procedures (1) through (4) above (taxpayer does not agree and notice indicates a refund) and

    2. Request payment of any balance the taxpayer agrees is due. Refer to IRM 5.19.1-2, W&I Call Flow.

CP 130 You May be Exempt From Paying the Alternative Minimum Tax (AMT)

  1. Beginning January 1, 2003, the CP 130, You May be Exempt From AMT, will generate when the taxpayer completes Form 4626, Alternative Minimum Tax - Corporations, and it appears the taxpayer is not liable for AMT.

  2. Refer to IRM 21.7.4.4.4.7.3, CP 130 – Potential Exemption from Alternative Minimum Tax (AMT), for information on how to work this notice.

CP 134B Federal Tax Deposit (FTD) Discrepancy - Balance Due

  1. A CP 134B, FTD Discrepancy - Balance Due, is issued to notify taxpayer that the amount of Federal Tax Deposits (FTDs) or estimated tax payments credited differs from the amount reported resulting in a balance due.

  2. Notice generated on tax modules with a math error with math error notice codes 24, 26 or 39:

    If Then
    Taxpayer indicates credit was not given for a missing payment Refer to IRM 21.5.7, Payment Tracers.
    Taxpayer has other information that resolves balance due Take appropriate action, refer to IRM 21.7.1, BMF/NMF Miscellaneous Information.
    Taxpayer agrees with notice
    1. Advise taxpayer to correct their records.

    2. Request payment. Refer to IRM 5.19.1-2, W&I Call Flow.

CP 134R FTD Discrepancy - Refund

  1. A CP 134R, FTD Discrepancy - Refund, is issued to notify taxpayer that the amount of Federal Tax Deposits (FTDs) or estimated Tax payments credited differs from the amount reported resulting in an overpayment.

  2. Notice generated on tax modules with a math error notice code 24, 26 or 39:

    If Then
    Taxpayer disagrees with notice and indicates excess payment(s) were intended for another period Initiate credit transfer to appropriate period. Refer to IRM 21.5.8, Credit Transfers.
    Taxpayer has other information that resolves the overpayment Take appropriate action, refer to IRM 21.7.1, BMF/NMF Miscellaneous Information.
    Taxpayer agrees with notice
    1. Advise taxpayer to correct their records.

    2. Advise taxpayer to expect the refund within four to six weeks.

CP 136 and CP 136B, Annual Notification of FTD Deposit Requirements (Form 941, Form 941SS)

  1. A CP 136, Annual Notification of FTD Deposit Requirements (941, 941SS), is issued yearly to filers of Form 941 and Form 941-SS to advise employers of which deposit method to use for the upcoming calendar year if different from the current deposit method.

  2. A CP 136B, Your Federal Tax Deposit Requirements for (Form 941) figured using the second preceding calendar year Form 944 as the Form 941 lookback period, is issued yearly to filers of Form 941 who filed Form 944 in the current or prior year, to advise employers of which deposit method to use for the upcoming calendar year.

CP 137, CP 137A, and CP 137B, Annual Notification of FTD Deposit Requirements

  1. A CP 137, Annual Notification of FTD Deposit Requirements (Form 943), is issued yearly to filers of Form 943 to advise employers which deposit method to use for the upcoming calendar year if different from the current deposit method.

  2. A CP 137A, Annual Notification of FTD Deposit Requirements (Form CT-1), is issued yearly to filers of Form CT-1 to advise employers which deposit method to use for the upcoming calendar year if different from current deposit method.

  3. A CP 137B, Annual Notification of FTD Deposit Requirements (Form 945), is issued yearly to filers of Form 945 to advise employers which deposit method to use for the upcoming calendar year if different from the current deposit method.

CP 138 Notice of Credit Applied

  1. A CP 138, Notification That the Overpayment on the Return was Offset Against Another Tax Period with a Balance Due, is issued to notify taxpayer that an overpayment on a return has been offset to another tax period with a balance due. After researching IDRS, explain reason for the balance due. Refer to IRM 21.5.7, Payment Tracers, for information about locating missing payments. If the taxpayer has questions about the balance due, follow instructions in table below:

    If Then
    Taxpayer has additional information that resolves balance due Take appropriate action, refer to IRM 21.7, Business Tax Returns and Non-Master File Accounts.
    Taxpayer agrees with notice
    1. Advise taxpayer to correct their records.

    2. Request payment. Refer to IRM 5.19.1-2, W&I Call Flow.

CP 141 Series Notices, Penalty Charged Under Internal Revenue Code Section 6652(c)

  1. There are three notices in the CP 141 series: Notice 141C, We Charged a Penalty Under Internal Revenue Code Section 6652(c) - Form Filed Late and Incomplete, Notice 141I, We Charged a Penalty Under Internal Revenue Code Section 6652(c) - Form Incomplete and Notice 141L, We Charged a Penalty Under Internal Revenue Code Section 6652(c) - Form Filed Late.

  2. The CP 141 series notices are generated when a Exempt Organization (EO) return is received late and/or has missing or incomplete information.

  3. Route all correspondence regarding CP 141 notices to the Ogden Accounts Management Center, EO Accounts MS: 6552. Refer to IRM 21.3.8.10, Account Issues - Tax Exempt/Government Entities (TEGE), and IRM 21.7.7.4.23, Exempt Organization Penalties, for additional information.

CP 142, Tax Exempt Bonds, Late Filed Return

  1. A CP 142, Tax Exempt Bonds, Late Filed Return, is generated when a Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038-G, Information Return for Government Purpose Tax-Exempt Bond Issues, or Form 8038-GC, Consolidated Information Return for Small Tax-Exempt Government Bond Issues, is filed late and a reason for the late filing is not provided.

  2. Route all correspondence regarding CP 142, Tax Exempt Bonds, Late Filed Return, notices to the Ogden Accounts Management Center, EO Accounts MS: 6552. Refer to IRM 21.3.8.10, Account Issues - Tax Exempt/Government Entities (TEGE), and IRM 21.7.7.5.4.4, Tax Exempt Bond Correspondence and Processing Overview, for additional information.

CP 143, Tax Exempt Bonds, Late Filing Accepted

  1. A CP 143, Tax Exempt Bonds, Late Filing Accepted, is a manually generated notice that informs the filer the response they provided to IRS for filing Form 8038, Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038-G, Information Return for Government Purpose Tax-Exempt Bond Issues, or Form 8038-GC, Consolidated Information Return for Small Tax-Exempt Government Bond Issues, late was accepted.

  2. Route all correspondence regarding CP 143 notices to the Ogden Accounts Management Center, EO Accounts MS: 6552. Refer to IRM 21.3.8.10, Account Issues - Tax Exempt/Government Entities (TEGE), and IRM 21.7.7.5.4.4, Tax Exempt Bond Correspondence and Processing Overview, for additional information.

CP 145 Notice of Credit-Elect

  1. A CP 145, Notice Of Credit Elect on Form 1120C, Form 1120F, Form 1120L, Form 1120M, Form 941, Form 942, Form 943, Form 720, Form 1041, Form 1042, CT-1, is issued to notify taxpayer of the amount of credit actually applied to the next taxable period when the amount differs from the taxpayer's requested amount by $1.00 or more.

  2. This notice is issued for Form 990C, Farmers' Cooperative Association Income Tax Return and all returns in the Form 1120 U. S. Corporate Income Tax Return series, or whenever a Form 1042, Annual Withholding Tax Return for U. S. Source Income of Foreign Persons, CT-1, Employer's Annual Railroad Retirement Tax Return, Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, Form 941, Employer's Quarterly Federal Tax Return, Form 944, Employer's Annual Federal Tax Return, Form 943, Employer's Annual Tax Return for Agricultural Employees, or Form 720, Quarterly Federal Excise Tax Return, with Computer Condition Code (CCC) "E" posts. Refer to Document 6209, IRS Processing Codes and Information, Section 3 for information on "CCCs."

  3. After researching IDRS, explain reduction in refund or credit-elect amount. Follow table below for resolution:

    If Then
    Taxpayer agrees with notice
    1. Advise taxpayer to correct their copy of return.

    2. Advise taxpayer to amend their estimated tax schedule, and increase payments to avoid a penalty for underpayment of estimated tax.

    Taxpayer indicates credit was not given for a missing payment Refer to IRM 21.5.7, Payment Tracers.
    Overpayment was not to be credited to next year Refer to IRM 21.5.8, Credit Transfers.

CP 160 BMF Annual Reminder Notice

  1. A CP 160, BMF Annual Reminder Notice, is issued to remind taxpayer of a balance due on a deferred account (status 23):

    If And Then
    Taxpayer agrees with notice Taxpayer’s financial status has not changed No action is necessary.
    Taxpayer indicates a change in financial Status Payments can be made on the account
    1. Request payment.

    2. Refer to IRM 5.19.1-2, W&I Call Flow.

    Taxpayer indicates a payment was made Was not credited to the account
    1. Research for the payment.

    2. Refer to IRM 21.5.7, Payment Tracers.

    Taxpayer does not agree with notice Provides information for adjustment Research account, explain balance due, and adjust account if appropriate.


CP 161 No Math Error, Balance Due (Except Form 1065)

  1. A CP 161, No Math Error, Balance Due (Except Form 1065), is issued to taxpayer as a first notice to notify them of tax, penalties, or interest due on any BMF return (except Form 1065) with a balance due of $1.00 or more and no math errors.

  2. After researching IDRS, explain reason for balance due. It may result from a missing payment or the assessment of penalties such as failure to file (FTF), estimated tax (ES), or dishonored check penalties:

    If Then
    Taxpayer agrees with notice and if it is a balance due Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer indicates a payment was made and has not been credited to their account
    1. Research for payment.

    2. Refer to IRM 21.5.7, Payment Tracers.

    Taxpayer does not agree with notice
    1. Research account.

    2. Explain balance due.

    3. Adjust account if appropriate.

    4. Refer to IRM 21.7.1, BMF/NMF Miscellaneous Information, for possible error conditions.

CP 162 Untimely Filing Penalty - Partnership

  1. A CP 162, Untimely Filing Penalty - Partnership, is issued to notify the partnership that a penalty has been assessed for failure to timely file a complete Form 1065, U.S. Return of Partnership Income, or Form 1120S, U.S. Income Tax Return for an S Corporation. Refer to IRM 21.7.4.4.2.8.2, Small Partnership Penalty Abatement, and IRM 21.7.4.4.2.7, Partnership Penalties, for more information.

  2. If Form 1065/Form 1120S was filed late, incomplete, or both, do the following:

    If Then
    Taxpayer agrees with notice Request payment; refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer requests abatement of Late Filing Penalty and penalty amount is within oral statement ceiling
    1. Consider taxpayer's information and adjust or abate if criteria are met.

    2. Refer to IRM 20.1, Penalty Handbook for penalty abatement and reasonable cause procedures.

    Taxpayer requests abatement of Late Filing Penalty and amount is over oral statement ceiling
    1. Determine if the taxpayer can fax documentation to you while on the telephone. Refer to IRM 21.5.2.4.3, Adjustments Requiring An Amended Return or Taxpayer Documentation, for additional information on accepting faxed documentation.

    2. If the taxpayer can not fax immediately, advise them to call back when they are able to fax or, if unable to fax, they may submit the request and supporting documentation to the address where they filed their return.

    3. Refer to IRM 20.1, Penalty Handbook, for penalty abatement and reasonable cause procedures.

    4. Consider taxpayer's information and adjust or abate if appropriate.

CP 163 BMF Annual reminder Notice

  1. A CP 163, BMF Annual reminder Notice, is issued annually to remind the taxpayer of a balance due of Tax, Penalty and Interest on a module that has been in Currently Not Collectible (CNC) status (with closing code 12 or 24–32) for at least 65 cycles.

CP 165 Penalty for Dishonored Check

  1. A CP 165, Penalty for Dishonored Check, is issued to notify taxpayer that a check was not honored by their bank.

  2. Refer to IRM 20.1.10.4, IRC section 6657 Bad checks (Dishonored Checks or Other Forms of Payment).

CP 166 Insufficient Funds on Direct Debit Installment Agreement

  1. A CP 166, Insufficient Funds on Direct Debit Installment Agreement, is issued to notify taxpayer that a direct debit installment agreement payment was dishonored due to insufficient funds.

    If Then
    Taxpayer agrees Request submission of missing payment
    Taxpayer is experiencing difficulty that will prevent further installment payments from being honored Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer has reasonable cause for removal of penalty Refer to IRM 20.1.1, Introduction and Penalty Relief.
    Taxpayer insists there were sufficient funds in their account Advise the taxpayer to contact their bank.
  2. Refer to IRM 20.1.10.4, IRC section 6657 Bad checks (Dishonored Checks or Other Forms of Payment).

Letter 4010C Federal Unemployment Tax Act (FUTA) Certification - Proposed Increase to FUTA Tax

  1. As of July 2006, IDRS Letter 4010C, FUTA Certification - Proposed Increase to FUTA Tax, replaced CP 167.

  2. Notifies taxpayer of a proposed increase in tax to Form 940 and Form 940–EZ based on state certification of credit information that differs from taxpayer's return. Taxpayer should reply to the notice, refer to IRM 4.19.5.4.9, Processing Replies, IRM 4.19.5.4.10, No Replies, and IRM 4.19.5.4.11, Undeliverables.

Letter 4011C FUTA Certification - Proposed Decrease to FUTA Tax

  1. As of July 2006, IDRS Letter 4011C, FUTA Certification - Proposed Decrease to FUTA Tax, replaced CP 168.

  2. Notifies taxpayer of a proposed decrease in tax to Form 940 and Form 940EZ based on state certification of credit information that differs from that on taxpayer's return.

  3. Taxpayer should reply to the notice, refer to IRM 4.19.5.4.9, Processing Replies, IRM 4.19.5.4.10, No Replies, and IRM 4.19.5.4.11, Undeliverables.

CP 187 BMF Annual Reminder Notice

  1. A CP 187, Annual Reminder Notice, is issued as an annual reminder of balance due notice issued to BMF accounts in Status 22 and 26. A separate notice is issued on each module. Follow normal BMF balance-due procedures in IRM 5.19.1-2, W&I Call Flow.

CP 191 Notice of Installment on Form 1041, Form 1120, Form 706, Form 2290, Form 4638, Form 990C, Form 990T, or Form 11

  1. The CP 191 is an internal notification to the campus accounting to update the installment billing clerks file.

  2. If response received for Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, forward to Estate and Gift Tax Operations 201 W Rivercenter Blvd. Covington, KY 41011 Attention: Stop 824G.

CP 207 FTD Information Notice-Proposed FTD Penalty

  1. A CP 207, Proposed averaged FTD Penalty (amounts less than $75,000), Request for Correct Record of Federal Tax Liability (ROFTL) Information, is generated on Form 940, Form 941, Form 943, Form 944, Form 945 and Form 1042 tax modules when the record of federal tax liability (ROFTL) section of the return is incomplete, illegible or the total tax liability reported on the ROFTL does not equal the net taxes on the return. The CP 207 notifies the taxpayer to complete and return a ROFTL or IRS will assess an averaged FTD penalty. CP 207L is generated for averaged penalties of $75,000 or more.

  2. Advise the caller to complete a ROFTL for the appropriate form identified in the notice and to either fax or mail it. Follow procedures in IRM 20.1.4.18, CP 207/CP 207L Notices.

CP 210 Audit/Data Processing (DP) Tax Adjustment

  1. A CP 210, Audit/DP Tax Adjustment, is issued to notify taxpayer of an Examination or Data Processing tax adjustment notice, resulting in overpayment of $1.00 or more or a zero balance. Also issued as a return settlement notice when penalties are assessed on overpaid modules. After researching IDRS, explain reason for notice.

    If And Then
    Taxpayer agrees with notice Balance is zero No action is necessary.
    Taxpayer agrees with notice There is a credit
    1. Advise taxpayer a refund will be issued within two to three weeks if no other Federal taxes or obligations are owed. (i.e., TOP offset for child or spousal support, Federal non-tax debts, or state income tax).

      Note:

      Review freeze conditions, if present, to determine if additional actions are needed to release credit or to provide additional information to the taxpayer.

    2. Advise taxpayer to allow up to two additional weeks for mail time.

    Taxpayer disagrees Adjustment did not result from examination of return
    1. Ask taxpayer to send necessary documentation. Determine if the documentation can be faxed while you are on the telephone with the taxpayer. If the taxpayer can fax, provide them with your fax number. Refer to IRM 21.5.2.4.3, Adjustments Requiring An Amended Return or Taxpayer Documentation, for additional information on accepting faxed documentation.

    2. If the taxpayer can not fax immediately, advise them to call back when they are able to fax or, if unable to fax, to submit the request and supporting documentation to the address on the notice.

    3. For information about BMF tax adjustments, refer to IRM 21.7, Business Tax Returns and Non-Master File Accounts.

    Adjustment resulted from an examination of return Taxpayer disputes deficiency assessment Under certain conditions, you can request an audit reconsideration. Refer to IRM 21.5.10, Examination Issues.

CP 215 Civil Penalty Assessment

  1. A CP 215, Civil Penalty - 500 and 600 Series, is issued to notify taxpayer a civil penalty was assessed.

    If Then
    Taxpayer agrees with notice Refer to IRM 5.19.1-2, W&I Call Flow.
    Taxpayer disagrees Advise taxpayer to submit a written request, that explains the circumstances, to the assessing function.

    Intentional Disregard Civil Penalty

    If Then
    Penalty Reference Number (PRN) 537 and Project Code 0179 were used to assess Intentional Disregard Penalty and the taxpayer is appealing the assessment. Close control, prepare Form 4442, Inquiry Referral, include CIS image, and e-mail to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
    PRN 537 and Project Code 0179 were used to assess Intentional Disregard Penalty and taxpayer submits a written request or a Form 843, Claim for Refund and Request for Abatement, to have the penalty removed. Close control and send denial letter with appeal rights. Include the following in an open paragraph:
    • "The information you provided to support your request for penalty relief of IRC Section 6721(e) due to reasonable cause was not acceptable. If you believe you have exercised due diligence (taken proper and reasonable steps any individual or business should have) in providing information, or statements we asked for, and you wish to appeal this assessment, please submit a written appeal request within thirty (30) days from the date of this letter. Please include a specific explanation of your due diligence for the Intentional Disregard Penalty you wish us to remove."


CP 220 Audit/DP Tax Adjustment

  1. A CP 220, Audit/DP Tax Adjustment, is an Examination and Data Processing tax adjustments resulting in a balance due of $1.00 or more. After researching IDRS, explain reason for notice. For resolution, refer to table in IRM 21.3.1.5.92, CP 210 Audit/DP Tax Adjustment.

CP 225 Missing Payment Applied

  1. A CP 225, Missing Payment Applied, is issued to advise taxpayer that a tax payment inquired about was located and applied to a specific account. This letter also advises taxpayer of a remaining balance due, a zero account balance, or a refund issued. After researching IDRS, explain reason for notice.

    If And Then
    Taxpayer agrees with notice A refund is due Advise taxpayer the refund will be received within two weeks if no other Federal taxes or other obligations are owed and a refund amount remains (i.e., TOP offset for child or spousal support, Federal non-tax debts, or state income tax).
    Taxpayer agrees with notice There is a balance due
    1. Request payment.

    2. Refer to IRM 5.19.1-2, W&I Call Flow.

    Taxpayer disagrees with notice Indicates additional payment was made but not credited to account
    1. Research for missing payment.

    2. Transfer credit if found.

    3. Refer to IRM 21.5.8, Credit Transfers.

CP 230 Overpayment on Employment Tax Account

  1. A CP 230, CAWR/DP Tax Adjustment, is issued to notify taxpayer of a determination of refund due, made as a result of a Combined Annual Wage Reporting (CAWR) adjustment made due to the taxpayer's amended return being filed and processed.

  2. Advise taxpayer the refund amount is based on the response submitted to CAWR, amended return, and the comparison of the figures reported on employment tax return and information submitted on information returns. Figures were presented to taxpayer previously by the CAWR program via Letter 98C, Wage Discrepancy per SSA; Information/Verification, or Letter 99C, Letter of Employment Tax Problem (CAWR).

  3. If taxpayer does not agree with refund, advise them to contact the processing center at the address indicated on the notice. Assist taxpayer in preparing response to issuing center.

CP 238 Late FTD Information Notice

  1. A CP 238, Late Federal Tax Deposit (FTD) Educational Notice - No Penalty Charged, is issued to first time Form 941 filers who did not deposit correctly. The CP 238 explains:

    • One or more deposits were late or were not made according to the taxpayer's current deposit requirements.

    • The Service is not charging a federal tax deposit penalty because our records indicate this is the first time they have been liable for this type of tax return.

  2. A Notice 931 is enclosed to explain the deposit requirement for Form 941. Refer to IRM 20.1.4, Failure to Deposit Penalty, for more information on deposit requirements and penalties.

CP 240 Amount Due on Employment Tax Account

  1. A CP 240, CAWR/DP Tax Adjustment, is issued to notify taxpayer of an adjustment to the account when there is a discrepancy between information reported on the employment tax returns and the W–2, W–2G, or 1099–R forms submitted. This notice is a bill issued to taxpayer as a result of the Combined Annual Wage Reporting (CAWR) program.

  2. After researching IDRS (BMFOLU) explain reason for the notice. Advise taxpayer that amount due is based on a comparison of figures reported on employment tax return with information submitted on information returns. The figures were previously presented to taxpayer during CAWR program. The bill is generated whether or not the taxpayer responded to the CAWR notice or correspondence issued if a discrepancy still existed. Late replies to the CAWR notice or correspondence would not have prevented the notice from being issued.

    Note:

    The bill also may result from partial payment.

    If Then
    Taxpayer disagrees with notice
    1. Advise taxpayer to reply to address provided on notice.

    2. Assist taxpayer in preparing response to issuing center.

    3. Refer to IRM 4.19.4.11, IRS-CAWR/SSA-CAWR - CSR Information.

    Taxpayer agrees with notice Request payment, refer to IRM 5.19.1-2, W&I Call Flow.

Letter 99C Notice of Employment Tax Problem

  1. A Letter 99-C, Notice of Employment Tax Problem, is issued for an IRS-CAWR case to notify taxpayer of a discrepancy between information reported on the Federal employment tax returns ( Form 941, Employer’s Quarterly Federal Tax Return, Form 944, Employer's Annual Federal Tax Return, Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees, Form 945, Annual Return of Withheld Federal Income Tax, or Schedule H, Household Employment Taxes) and the Form W-2 submitted to SSA or the Form W-2G, Certain Gambling Winnings or Form 1099–R, Distribution From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA, Insurance Contracts, etc., submitted to the IRS. Refer to IRM 4.19.4.11, IRS-CAWR/SSA-CAWR - CSR Information.

  2. Do the following:

    1. Advise taxpayer that Letter 99C is not a bill, but a proposed increase or decrease in tax based on a comparison of figures reported on employment tax return and information submitted on information returns. The Letter 99C can address either an increase or a decrease.

    2. Ask taxpayer to compare totals on employment tax returns and information returns to their records with the figures shown on the Letter 99C.

    3. Assist taxpayer in identifying the error and reviewing filing requirements and tax computation on employment tax return.

    4. Assist taxpayer in preparing a complete response to CAWR unit of the issuing center (e.g., missing Form 941, or Form W-2). Refer to IRM 4.19.4.11, IRS-CAWR/SSA-CAWR - CSR Information.

Letter 98C Discrepancy Form W–2s and Employment Tax Returns

  1. A Letter 98C, Wage Discrepancy per SSA; Information/Verification Requested, is issued on a SSA-CAWR case to notify taxpayer of a discrepancy between information reported on the employment tax returns and that reported on the Forms W-2 submitted to Social Security Administration (SSA), i.e., taxpayer is reporting more Social Security Wages, Medicare Wages and/or Federal Withholding tax on an employment tax return than is reported on Form W-3/W-2.

  2. Advise taxpayer:

    1. Letter 98C is a proposed penalty assessment and is a request for copies of Forms W-2 previously requested by SSA. It also notifies taxpayer of a potential penalty assessment if forms are not submitted to the IRS to be forwarded to SSA.

    2. IRS must receive copies of forms or proof of timely filing before the "due" date outlined in the notice to prevent a penalty assessment against the taxpayer. This will occur even if taxpayer insists they filed the forms with SSA previously. Advise taxpayer to respond to address on the notice.

    3. It is extremely important that the taxpayer provide the forms or proof of timely filing directly to the IRS to prevent assessment of penalty for failing to file Form W-2.

    4. If taxpayer does not respond to notice and provide a copy of the Form W-2 filed with SSA, they will be assessed a penalty.

  3. Assist taxpayer in identifying the error (e.g., SSA did not receive all of the Form W-2 and/or Form W-3, Transmittal of Wage and Tax Statements, for the EIN, taxpayer used two different TINs).

    1. Ask taxpayer to compare their records with figures listed on Letter 98C.

    2. Determine whether taxpayer's total submission was received and processed by SSA. Ask taxpayer to compare submissions according to their records with figures on the Letter 98C. You also may access BMFOLU for the W–2/W–3 amounts.

    If Then
    Figures listed on Letter 98C show some Forms W-2 were processed by SSA Tell taxpayer to identify which forms are missing.
    Taxpayer states W–2 amounts are correct and that no forms are missing (also check for corrected W–2)
    1. Taxpayer did not correctly compute employment tax.

    2. Advise taxpayer to review their return and file the applicable adjusted employment tax return if appropriate. Refer to IRM 21.7.2.4.6, Adjusted Employer's Federal Tax Return or Claim for Refund, for more information.


  4. Assist taxpayer in preparing a response to CAWR unit of the issuing center. (Refer to IRM 4.19.4, CAWR Reconciliation Balancing, for more information on the CAWR program). Never transfer the taxpayer's call to the CAWR unit.

CP 259 Master File Generated 1st Taxpayer Delinquency Investigation (TDI) Notice for Delinquent Business Tax Returns

  1. CP 259 series notices (A - G) are issued from Master File on accounts that have not received a return to satisfy the filing requirement.

  2. Refer to IRM 21.7.7.4.26, CP 259, CP 42X and CP 249 Entity Notices, for more information for Exempt returns.

    Note:

    DO NOT route when there is a notation of "599" on the return.

CP 260 Credit Reversal Adjustment

  1. A CP 260, Credit Reversal Adjustment, is issued to notify taxpayer of a credit reversal (e.g., erroneous payment posted and taken out, other credits allowed and then removed) or an adjustment to their account. After researching IDRS, explain reason for the notice.

    If And Then
    Taxpayer agrees with notice A balance is due
    1. Request payment.

    2. Refer to IRM 5.19.1-2, W&I Call Flow.

    Taxpayer disagrees with notice Indicates a payment was not credited to the account
    1. Research account and make appropriate credit transfer(s).

    2. Refer to IRM 21.5.8, Credit Transfers.

CP 267 No Math Error Credit Offset Notice

  1. A CP 267, No Math Error Credit Offset Notice, is issued to notify taxpayer of possible misapplied payments and allows taxpayer to advise IRS of their correct application. Notice requires a response. After researching IDRS, explain FTD discrepancies and reason for overpayment. Refer to IRM 21.7.11.4.9, CP 267/CP 268 - Notice of Excess Credit, for procedures.

CP 268 Math Error Credit Offset Notice

  1. A CP 268, Math Error Credit Offset Notice, is issued to notify taxpayer of an error on return and possible misapplied payments resulting in an overpayment. It allows taxpayer the opportunity to advise IRS of validity of math error and proper application of credits. Notice requires a response. After researching IDRS, explain reason for overpayment. Refer to IRM 21.7.11.4.9, CP 267/CP 268 - Notice of Excess Credit, for procedures.

CP 282, Notification of Possible Filing Requirements

  1. A CP 282, Notification of Possible Filing Requirement, Form 1042 and Form 1042-S, is issued to notify taxpayer of a possible requirement to file information returns and withhold tax. This notice is generated when a filer of Form 1065 and Form 1065B, U.S. Return of Income for Electing Large Partnerships, checks a box on Schedule B, indicating they had foreign partners during the year. Refer to IRM 21.7.4.4.2.11, CP 282 Notice, Notification of Possible Additional Partnership Filing Requirements (Withholding Tax on Foreign Partners), for additional information and procedures for responding to taxpayer inquiries. Refer to IRM 21.8.2.16.1, CP 282 - Form 1065 for international.

CP 289 Annual Installment Agreement Statement

  1. A CP 289, Annual Installment Agreement Statement, is issued as an annual BMF notice required by Section 3506 of RRA '98. The notice shows all payments made for the year and an ending balance. It advises the taxpayer that this notice is not a bill. It also instructs the taxpayer to contact the Service if:

    1. There is restricted interest and/or penalty on the module and the taxpayer wants a balance due.

    2. The taxpayer made a payment that is not shown on the notice.

CP 208 Notice, Potential Credit Transfer Action Form 1041

  1. The CP 208 is an internal notice generated when Form 1041 posts with credit shown on the election line and the credit has not been transferred, a -P freeze generates. The freeze is released when the module balance becomes zero or debit status.

  2. Refer to IRM 21.7.4.4.1.12.3, CP 208 Notice, Potential Credit Transfer Action Form 1041 for procedures.

CP 224 Notice, Potential Qualification as a Personal Service Corporation

  1. The CP 224 is issued to businesses who, based on the business activity described on the Form 1120 they filed, may qualify as a personal service corporation.

  2. Refer to IRM 21.7.4.4.4.3.1, CP 224 Notice, Potential Qualification as a Personal Service Corporation, for procedures.

Non-Master File (NMF) Notices

  1. A toll-free number (1-888-829-7434) appears on all NMF notices. Procedures for employees assigned to the new toll-free number are in IRM 21.7.12.5.1, NMF Toll- Free Number. NMF notices contain an "n" after the TIN. NMF notices can also be identified by the tax class (third digit) in the DLN of 6. Overseas taxpayers may call the United States for help at 267-941-1000.

  2. Notice numbers are shown in the bottom right-hand corner. The notice shows an "n" after the Taxpayer Identification Number (TIN).

    • Form 6335, NMF First Notice, is the first notice issued on a Non-Master File account.

    • Form 4840, NMF Fourth Notice, is the fourth notice issued on a Non-Master file account.

      Note:

      A second and third notice are not issued.

    • Form 9774, Annual Reminder Notice For ANMF/NMF, is the annual reminder notice.

    • The address on the notice is the address where the taxpayer's NMF account resides.

Resolution of NMF Notices
  1. If you are contacted by a taxpayer at a number other than the number listed in IRM 21.3.1.5.109, Non-Master File (NMF) Notices, above, take the following action:

    1. Answer any questions to the extent of your ability and expertise.

    2. If you do not have the expertise/or system access required to answer the taxpayer's question and/or resolve the issue, advise the taxpayer to call the NMF Toll Free Number, 1-888-829-7434.

    3. Do not refer taxpayers to this number unless they have one of the notices listed in IRM 21.3.1.5.109, Non-Master File (NMF) Notices.

Notice 1219A Notice of Potential Third Party Contact to Obtain Unfiled Returns

  1. Notice 1219A is issued with CP 518. The Notice 1219A informs the taxpayer that:

    • IRS is attempting to collect unfiled returns.

    • IRS usually deals directly with the taxpayer or the taxpayer's representative.

    • IRS sometimes talks with other persons to verify information given to us by the taxpayer or to obtain needed information the taxpayer has been unable to provide.

    • IRS may contact other persons, and if we do we will generally need to tell them limited information about the taxpayer (such as the taxpayers name).

    • The law prohibits IRS from disclosing any more information than is necessary to obtain or verify the information we are seeking.

    • IRS's need to contact other persons may continue as long as there is activity on this matter.

Notice 1219B Notice of Potential Third Party Contact to Obtain Uncollected Taxes

  1. Notice 1219B is issued with the CP 504 and CP 523. The Notice 1219B informs the taxpayer that:

    • IRS is attempting to collect unpaid taxes from them.

    • IRS usually deals directly with the taxpayer or the Taxpayer's representative.

    • IRS sometimes talks with other persons to verify information given to us by the taxpayer or to obtain needed information the taxpayer has been unable to provide.

    • IRS may contact other persons, and if we do we will generally need to tell them limited information about the taxpayer (such as the taxpayers name).

    • The law prohibits IRS from disclosing any more information than is necessary to obtain or verify the information we are seeking.

    • IRS's need to contact other persons may continue as long as there is activity on this matter.

  2. Prepare Form 4442 for requests for calculation of interest and route to the Campus AM Account Paper function within the phone staff Directorate, refer to IRM 20.2.1, Interest Introduction, Standards and Guidelines.

    Note:

    Taxpayers with restricted interest and penalties will have an additional statement on CP 504 and 523 stating " As your account contains interest and/or penalties which must be manually calculated, you must call 1–800–829–0922 for the total amount due." These accounts must be manually calculated for penalty and interest.

Letter 3228 Annual Reminder Notice

  1. This letter is issued yearly on balance due accounts. It reminds the taxpayer of a balance due and advises the taxpayer of the following:

    1. It is not necessary to contact the IRS if they are working with us to resolve the balance due.

    2. To send full payment if you agree with the amount shown and are not already working with us to resolve the balance due.

    3. To call the number shown on the notice if they disagree with the amount shown, have questions, or cannot pay the amount.

  2. The letter also warns of enforcement action. Refer to IRM 5.19.1-2, W&I Call Flow, for information on working balance due cases.

Employee Plans Masterfile (EPMF) Notice CP 403 and CP 406

  1. Notices CP 403, Form 5500, First Delinquency Notice and CP 406, Form 5500, Second Delinquency Notice, are return delinquency notices. These notices are issued to taxpayers with a filing requirement for Form 5500, Annual Return/Report of Employee Benefit Plan and inform the taxpayer of an overdue return.

  2. CP 403 is the first notice and CP 406 is the final notice. A response is required.

  3. Delinquency cases are placed on the Taxpayer Information File (TIF). Each case is retained on this file for a period determined by the date the last tax module was satisfied in the entity. The TIF is updated weekly with any satisfying transaction input during the week.

    If And Then
    A Form 5500-R, Registration Statement of Employee Benefit Plan, return has not posted It is 15 months after the return due date CP 403 is issued. This is the first notice
    A Form 5500E, Annual Return of One-Participant Retirement Plan, return has not posted It is 26 months after the return due date CP 403 is issued. This is the first Notice.
    No response is received No notice delay is input The second notice, CP 406 is issued 12 weeks later.
  4. Resolve CP 403 and CP 406 issues as follows:

    If And Then
    You are familiar with the criteria for filing Form 5500 You can answer the taxpayer's questions
    1. Advise the taxpayer if they are required to file a return.

    2. Order any forms needed.

    3. Advise the taxpayer how to respond to the notice.

    You are not familiar with the criteria for filing these forms, and/or you can not answer the taxpayer's question Transfer the call to TEGE EP notice application, #92264.
    You receive an on-line inquiry concerning notice CP 403/CP 406 The inquiry concerns a Form 5500EZ Refer to IRM 21.3.8.10.2.10, CP 403 and CP 406.
    You receive a written inquiry on CP 403/CP 406 There is no TC 150 on the module Route the notice to the Entity unit at the address on the notice.
  5. Refer to IRM 3.13.36, EPMF Account Numbers, for more information on CP 403 and CP 406.

Letter 2030/2531- Business Master File (BMF) Underreporter Program- General Information

  1. The BMF Automated Underreporter (BMF-AUR) program is designed to review Forms 1120, U. S. Corporation Income Tax Return, and Forms 1041, U. S. Income Tax Return for Estates and Trusts, for potential underreported or missing income. BMF-AUR Operations is located in the Ogden Campus. The program compares the information reported on the Form 1120 and Form 1041 to the Information Return Master File (IRMF) which contains various Form 1099, Schedule K-1, etc., submitted by payers.

  2. BMF-AUR sends letters (Formerly CP notices) to Form 1120 and Form 1041 filers notifying them of the discrepancy between the information documents and what is reported on the income tax return. These letters are:

    1. Letter 2030, Initial Notice Issued to Request Verification for Unreported Income, Deductions, Payment and/or Credits on BMF Income Tax Returns Matched to Payer Information Documents

    2. Letter 2531, Initial Contact for Potential Discrepancy of Income, Deductions and/or Credits Claimed on BMF Income Tax Returns Matched to Payer Information Documents

  3. The Letter 2531 is sent to the taxpayer as an inquiry and not a proposal of assessment. Generally, it is sent to a taxpayer to obtain information prior to the issuance of the Letter 2030. The Letter 2030 is the BMF-AUR notice of proposed assessment relating to the underreporter issues on the Form 1120 and Form 1041.

  4. When the account has been selected to be worked by BMF-AUR, the account will display a TC 925. Process codes shown with the TC 925 will provide the status of the case as it goes through BMF-AUR processing.

    Example:

    925 07152013 0.00 20134108 00277-276-71240-3

    PROCESS-CD<40304500

  5. When a letter is issued, the BMF-AUR function puts a control on the module. IDRS research will show:

    1. An open IDRS control base with control category code "BUR0" , "BUR1" , "BURS" or "BURC" controlled to employee number, 048xxxxxxx.

    2. An underreporter process code. The process codes will update as the case progresses through the BMF-AUR process.

      Note:

      The process codes may appear as history notes on CC TXMOD.

  6. When there is a TC 925 and/or an open BMF-AUR control on the tax module, the following taxpayer correspondence must be routed to BMF-AUR to be worked:

    • Letter 4550, BMF-AUR Additional Correspondence

    • Letter 4551, BMF-AUR Closing

    • Letter 4552, BMF-AUR Payer Inquiry

    • Letter 2030, Initial Notice Issued to Request Verification for Unreported Income, Deductions, Payment and/or Credits on BMF Income Tax Returns Matched to Payer Information Documents

    • Letter 2531, Initial Contact for Discrepancy of Income, Deductions and/or Credits Claimed on BMF Income Tax Returns Matched to Payer Information Documents

    • Letter 3219B, Notice of Deficiency

    • Form 4089-B, Notice of Deficiency - Waiver

    • Form 1120X, Amended U.S. Corporation Income Tax Return

    • Amended Form 1041, U.S. Income Tax Return for Estates and Trust

    Note:

    On CIS route to the OAMC central printer, MS 6663, Attn: BMF AUR for processing. DO NOT put BMF-AUR control base in case status code B.

  7. BMF AUR tax assessment can be found on MFT 02 (Form 1120) or 05 (Form 1041) accounts. A BMF AUR assessment can be identified by reviewing the blocking series of the TC 290 adjustment. For Form 1120 the blocking series may be 55, 57, 58 or 59. For Form 1041 the blocking series will be 64 or 89.

  8. If written correspondence, Form 1120X or amended Form 1041 is received relating to a closed BMF-AUR assessment, take the following actions:

    1. If the account is in status 58 input a STAUP 2209

    2. For all other notice status, input nine week STAUP to the next notice status.

    3. If forwarding to BMF AUR a Form 1120X or amended Form 1041, input TC 971 AC 015. This will leave the appropriate audit trail for the amended returns.

    4. Route Form 1120X, or Form 1041 amended return and all correspondence to BMF AUR: M/S 6663

  9. If TC 925 only shows Process Code 4030 on the account, do not refer case to BMF-AUR. Work the taxpayer’s issue following normal procedures.

  10. If the taxpayer calls and they didn’t receive the letter or is requesting a copy of any of the letter, transfer the call to #92327 (#1827 for IUP sites). If the call can not be transferred, provide the caller with the BMF-AUR phone number and hours of operation. The BMF-AUR number is 877-571-4712. The hours of operation are from 9:00 a.m. – 5:00 p.m. local time.

  11. BMF-AUR may send several other notices. These include:

    • Letter 2627C - Used to obtain missing information when an incomplete Power of Attorney (POA) is submitted by taxpayer. A response is expected.

    • Letter 2893C - Used to notify taxpayer of adjustment.

    • Letter 4314C - Used to inform taxpayer the case is not yet resolved. This is issued from BMF-AUR when another action is being taken on a case at the same time (e.g., when a letter to validate income or additional research is being conducted).

    • Letter 4550C - Used to correspond with taxpayer to obtain additional information or to provide further explanation subsequent to a Letter 2030 or Letter 2531 notice. A response is usually expected.

    • Letter 4551C - Used to notify taxpayer of conclusion of their BMF-AUR case. No response is expected.

    • Letter 4552C - Used to correspond with an employer/payer to clarify income. Ask employer/payer to complete form and return.

    Copies of all of these letters can be obtained from BMF-AUR when the taxpayer calls the area.

  12. For additional information on the BMF-AUR Program, refer to IRM 4.119.4, BMF Underreporter (BMF-AUR) Program.

Letter 2531 Initial Contact for Potential Discrepancy of Income, Deductions and/or Credits Claimed on BMF Income Tax Returns Matched to Payer Information Documents Procedures
  1. If the taxpayer calls questioning the receipt of a Letter 2531, review the account and determine the current process code.

  2. The following are the procedures for working the various process codes relating to the Letter 2531:

    If the last process code is.. Definition Then
    4030 Case has been selected by BMF-AUR
    1. The taxpayer has NOT YET received the notice.

    2. DO NOT refer the case to BMF-AUR.

    3. Respond to the taxpayer's issue following normal procedures

    4300, 4305 Letter 2531 establishes IDRS control base.
    1. Advise the caller the letter is providing information pertaining to a discrepancy between the Form 1120 or Form 1041 and information documents submitted under that EIN.

    2. Advise the taxpayer to respond to the letter indicating if they agree or disagree with the issues raised. Explain they need to provide an explanation and documentation, if appropriate for each item they are disputing.

    3. Advise taxpayer to attach a copy of the letter to their response.

    4. Provide the Ogden mailing address.
      IRS
      1973 N Rulon White Blvd
      Stop 6663
      Ogden Utah 84201–0062

    5. If the taxpayer wishes to talk to the BMF-AUR transfer to #92327 (#1827 for IUP sites). If unable to transfer, provide the taxpayer with the BMF-AUR phone number, 877-571-4712 number. The hours of operation are from 9:00 a.m. – 5:00 p.m. local time.

    6. If the taxpayer wishes to fax the information, provide the fax number, 855–235–8847

    4310 Letter 2531 generated but not mailed.
    1. The taxpayer has NOT YET received the notice.

    2. Do not refer the case to BMF - AUR.

    3. Follow normal procedures for handling the taxpayer’s issue.

    4350, 4370, 4380 The case has been transferred to another area
    1. Do not refer to BMF-AUR.

    2. Follow normal procedures for handling the taxpayer’s issue.

    4340, 4400, 4420, 4440, 4460 BMF-AUR case closed no change to the tax liability and/or refundable credits.
    1. Do not refer to BMF-AUR.

    2. Follow normal procedures for handling the taxpayer’s issue.

    4470 The case has been worked and closed by BMF-AUR with an adjustment to tax or refundable credits.
    1. Explain the reason for the balance owed.

    2. Provide the Ogden mailing address.
      IRS
      1973 N Rulon White Blvd
      Stop 6663
      Ogden Utah 84201–0062

    3. The taxpayer can file a Form 1120X but it is not necessary.

    4. If the taxpayer wishes to fax the information, provide the fax number, 855-235-8847.

    5. If the taxpayer wishes to talk to the BMF-AUR transfer to #92327 (#1827 for IUP sites). If unable to transfer, provide the taxpayer with the BMF-AUR phone number, 877-571-4712 number. The hours of operation are from 9:00 a.m. – 5:00 p.m. local time.

    6. If the taxpayer disagrees with the assessment and there will be no balance owed after the needed information is provided to BMF-AUR:
      For accounts in status 58 input a STAUP 2209
      For all other notice statuses, input a STAUP 5809.

    7. If the taxpayer agrees and there is or will be a balance on the account follow normal collection procedures.

  3. When working paper cases, route all cases referring to BMF-AUR to Ogden BMF-AUR, Stop 6663. Do not route Form 1120X or amended Form 1041 if unrelated to the BMF-AUR issue. Input a TC 971 AC 015 if only routing a Form 1120X or amended Form 1041 relating to the BMF-AUR issue.

Letter 2030 Initial Letter Issued to Request Verification for Unreported Income, Deductions, Payment and/or Credits on BMF Income Tax Returns Matched to Payer Information Documents Procedures
  1. When working accounts with BMF-AUR Involvement, it is necessary to research the account to determine where the account is in the BMF-AUR process. This can be determined by reviewing the Underreporter Process Codes listed under the Transaction Code (TC) 925 on the account. Review the account and determine the last process code. Refer to chart below to determine procedures for working the case.

    If the last Process code is.... Definition Procedure
    4030 Case has been selected by BMF-AUR Paper or Phones
    1. Do not send a Form 4442, Inquiry Referral.

    2. Respond to the taxpayer's issue following normal procedures.

    4100, 4110, 4130-4170, 4210, 4220, 4240, 4260, 4270, or 4290 The case has been closed prior to contact with the taxpayer.
    1. The taxpayer has NOT YET received the notice.

    2. Do not send a Form 4442, Inquiry Referral.

    3. Respond to the taxpayer's issue following normal procedures.

    4560, 4570, 4580, 4590, 4770, 4780, 4790, 4800 The case has been transferred to another area.
    1. Do not send a Form 4442, Inquiry Referral.

    2. Respond to the taxpayer's issue following normal procedures.

    4550, 4600, 4610, 4630, 4660, 4810, 4820, 4830, 4860, 4890 BMF-AUR case closed with no change to tax liability and/or refundable credits.
    1. Do not refer the case to BMF-AUR.

    2. Respond to the taxpayer’ issue following normal procedures.

    3. Do not send a Form 4442, Inquiry Referral.

    4500, 4505, 4520, 4525, 4530, 4535, 4540, 4700, 4705, 4750, 4755, and the taxpayer agrees: Letter 2030 or Letter 3219B
    1. Provide the Ogden mailing address.
      IRS
      1973 N Rulon White Blvd
      Stop 6663
      Ogden Utah 84201–0062

    2. Advise the taxpayer to respond to the notice indicating if they agree or disagree with the issues raised. Explain they need to provide an explanation and documentation (if appropriate) for each item(s) they are disputing.

    3. Advise taxpayer to attach a copy of the notice to their response.

    4. The taxpayer can file a Form 1120X or amended Form 1041 but it is not necessary.

    5. If the taxpayer wishes to fax the information, provide the fax number, 855-235-8847.

    6. If the taxpayer wishes to talk to BMF-AUR transfer to #92327 (#1827 for IUP sites). If unable to transfer, provide the taxpayer with the BMF-AUR phone number, 877-571-4712 number. The hours of operation are from 9:00 a.m. – 5:00 p.m. local time.

    7. If the taxpayer disagrees with the assessment and there will be no balance owed after the needed information is provided to BMF-AUR:

      1. For accounts in status 58 input a STAUP 2209.

      2. For all other notice status input 9 week STAUP to the next notice status.

    8. If the taxpayer requests a payment agreement and meets the criteria set up using CC IAPND.

    4510 Letter 2030 generated but not mailed.
    1. The taxpayer has NOT YET received the notice.

    2. DO NOT refer the case to BMF-AUR.

    3. Respond to the taxpayer’s issue following normal procedures.

    4200, 4670, 4675, 4680, 4840, 4850, 4870, 4875 The case was worked and closed by BMF-AUR with an adjustment to tax liability and/or refundable credits.

    Note:

    PC 4850 is used when the account is assessed by default

    1. Explain to the taxpayer the reason for the letter. In the case of PC 4850, advise the caller the service did not receive a response from the taxpayer.

    2. If the taxpayer disagrees with the assessment and there will be no balance owed after they provide the needed information to BMF-AUR:

      1. For accounts in status 58 input a STAUP 2209.

      2. For all other notice status input 9 week STAUP to the next notice status.

    3. Provide the Ogden mailing address:
      IRS
      1973 N Rulon White Blvd
      Stop 6663
      Ogden Utah 84201–0062

    4. If the taxpayer wishes to talk to the BMF-AUR transfer to #92327 (#1827 for IUP sites). If unable to transfer, provide the taxpayer with BMF-AUR phone number, 877-571-4712 number. The hours of operation are from 9:00 a.m. – 5:00 p.m. local time.

    5. If the taxpayer wishes to fax the information, provide the fax number, 855-235-8847.

  2. When working paper cases, route all cases referring to BMF-AUR to Ogden BMF-AUR, stop 6663. Do not route Forms 1120X or amended Form 1041 if they are unrelated to the BMF-AUR issue. Input a TC 971 AC 015 if routing only a Form 1120X or amended Form 1041 relating to the BMF-AUR issue.

BMF-AUR Special Handling
  1. Do not refer Tentative Carrybacks (TENTs,) Restricted Interest Claims (RINTs), payment tracers, or entity change only requests to BMF-AUR.

  2. If correspondence relates to two different tax periods and only one relates to the BMF-AUR issue:

    1. Separate issues by tax period.

    2. Route as appropriate

    3. Work other issue or tax period following normal adjustment procedures.

Employer Shared Responsibility Payment (ESRP) Notices

  1. The Affordable Care Act (ACA), officially called The Patient Protection and Affordable Care Act, has many key provisions including new shared responsibility payments for certain employers.

  2. Employer Shared Responsibility Payment (ESRP). Beginning calendar year 2015 and after, employers employing an average of 50 full-time employees or combination of full-time and full-time equivalent employees on business days in the prior year (e.g., 2014 for calendar year 2015) will be subject to the Employer Shared Responsibility provisions under section 4980H of the IRC (added to the Code by the Affordable Care Act).Form 1094-C and Forms 1095-C are used to report information about offers (or non-offers) of health coverage and enrollment in health coverage to an employee by the employer. ESRP will not be self-reported by the taxpayer but will be assessed by an Exam function based on information reported to the Service. Form 1094-C and Form 1095-C are used by Exam in determining whether an employer owes an ESRP.

  3. New Master File Tax Code (MFT) has been established to record assessments, abatements and other account actions:

    • MFT 43 - Employer Shared Responsibility - processed to BMF

  4. On MFT 43, the assessment posts as a TC 298 with a three-digit reference number which identifies the type of assessment. These reference numbers can be 240, 241, 242, 243, or 244. A TC 290 is input along with the TC 298. A TC 150 never posts to this module.

  5. Prior to an assessment by Exam, various notices/letters will be sent to certain employers who have been identified as potentially being assessed an ESRP.

  6. See IRM 20.2.11.14(3),Affordable Care Act (ACA), and IRM 5.19.4.1.2, Affordable Care Act (ACA) - Employer Shared Responsibility Provision (ESRP)§4980H, for general information.

Resolution of ESRP Notices
  1. The following section provides guidance on the various notices/letters issued on the Employer Shared Responsibility Payment Modules - MFT 43 and the chart below provides a brief description.

    Notice Description
    Letter 5699 Non-filer letter - issued to employers advising our records show they may be an Applicable Large Employer (ALE) and haven’t filed the required information returns (i.e., Forms 1094-C and 1095-C).
    Letter 5840 Closing letter - issued to employers advising issue is resolved.
    Letter 226J Preliminary letter - issued to employers advising of the proposed ESRP.
    Letter 5040-J Follow-up letter - issued to employers as a follow-up to the Letter 226J.
    Letter 227J Acknowledgement letter - issued to employers advising of various actions taken or information needed.
    CP 220J, CP 223J, CP 503J, CP 504J Assessment/Adjustment letters - issued to employers once assessment has been posted or adjusted on MFT 43.
  2. Letter 5699 - issued to taxpayers advising our records show they may be an ALE and haven’t filed the required information returns, Form 1094-C and Forms 1095-C.

    If Then
    Taxpayer has additional questions about letter Taxpayer must contact the person listed on the letter.
  3. Letter 5840 - issued to taxpayer advising issue is resolved. No response is needed, however, if an inquiry is received the taxpayer can contact the person listed on the notice or write to the return address on the letter.

    If Then
    Taxpayer has additional questions about letter. Taxpayer must contact the person listed on the letter.
  4. Letter 226J - issued to taxpayers advising of the proposed ESRP. The IRS uses information from the Forms 1094-C and 1095-C filed by ALEs and income tax returns filed by employees to identify ALEs that may be subject to the Employer Shared Responsibility Payment (ESRP) under IRC 4980H. If the IRS identified an ALE as being potentially liable for the ESRP, the IRS will send the ALE and authorized Power of Attorney (POA), if applicable, a Letter 226J, which is often referred to as a Preliminary Letter.

    If Then
    Taxpayer agrees, disagrees, or needs to provide additional information. Taxpayer must follow the guidance in the letter and respond to the return address on the notice.

    Note:

    The return address on the notice:
    Internal Revenue Service Group 2219
    7300 Turfway Road, Suite 410
    Florence, KY 41042

    Taxpayer wishes to speak with someone. Taxpayer can contact the person listed on the notice.
  5. Letter 5040-J - issued to Employers as a follow-up to the Letter 226J.

    If Then
    Taxpayer agrees, disagrees, or needs to provide additional information. Taxpayer must follow the guidance in the letter and respond to the return address on the notice.

    Note:

    The return address on the notice:
    Internal Revenue Service Group 2219
    7300 Turfway Road, Suite 410
    Florence, KY 41042

    Taxpayer wishes to speak with someone. Taxpayer can contact the person listed on the notice.
  6. Letter 227J - issued to taxpayer advising of various actions taken or additional information needed after initial response to Letter 226J.

    If Then
    Taxpayer agrees, disagrees, or needs to provide additional information. Taxpayer must follow the guidance in the letter and respond to the return address on the notice.

    Note:

    The return address on the notice:
    Internal Revenue Service Group 2219
    7300 Turfway Road, Suite 410
    Florence, KY 41042

    Taxpayer wishes to speak with someone. Taxpayer can contact the person listed on the notice.
  7. CP 220J, CP 233J, CP 503J, CP 504J - Master File notices issued after assessment or adjustment has posted to MFT 43. The assessments posts as a TC 298 with a three-digit reference number which identifies the type of assessment. These reference numbers can be 240, 241, 242, 243, or 244.

    If Then
    Taxpayer agrees with notice. Advise how to submit payment (IRM 5.19.1-2, W&I Call Flow)
    Taxpayer disagrees Advised taxpayer to follow instructions in letter and submit a written request or file Form 843 that explains the circumstances to the assessing function (i.e., return address on notice).

    Note:

    The return address on the notice:
    Internal Revenue Service Group 2219
    7300 Turfway Road, Suite 410
    Florence, KY 41042

    Taxpayer has questions about the ESRP (e.g., calculation) TP must submit written inquiry to return address on the notice.

    Reminder:

    Form 843 ESRP cases should be routed by AM assistors to:
    Internal Revenue Service Group 2219
    7300 Turfway Road, Suite 410
    Florence, KY 41042

Request for Copy of Notice in an Alternative Media Format

  1. Make an attempt to assist the taxpayer without providing an Alternative Media format (i.e., Braille or large print).

    • Use Servicewide Notice Information Program (SNIP) to provide a generic explanation of the notice, IRM 3.14.1.3.2, CP Notice Types. Refer to IRM 21.1.3.2.3, Required Taxpayer Authentication, and IRM 21.1.3.3.2(3), Oral Disclosure Consent/Oral TIA (Paperless F8821).

    • Use IDRS to provide a specific explanation of the notice. Follow IRM 21.3.1.2, Notice Overview, and the Taxpayer Authentication/Disclosure references listed above.

      Note:

      For forms requests follow the procedures outline in IRM 21.3.6.4.1, Ordering Forms and Publications, and IRM 21.3.6.4.2, Other Methods of Obtaining Forms and Publications.

  2. If unable to assist the taxpayer, follow the procedures below:

    1. If the taxpayer has access to a fax machine, request a copy of the notice and a cover sheet. Ask the taxpayer to write "Alternative Media Format" at the top of the cover sheet. The cover sheet should include the taxpayers name, address, daytime phone number, and the acceptable alternative media format. Advise the taxpayer to fax the notice and cover sheet to: Alternative Media Center, at (855) 473-2006.
      If the taxpayer doesn't have access to a Fax Machine, advise the taxpayer to mail a copy of the notice and request a copy in either Braille or large print to Internal Revenue Service, Alternative Media Center, 400 N. 8th St. Room G39, Richmond, VA 23219.

    2. Input IDRS Command Code STAUP, if appropriate.

    3. Verify the address on the notice.

  3. If you receive a written request for a copy of a notice in Alternative Media Format, prepare a Form 4442 and fax it along with the taxpayer's correspondence to Alternative Media Center at (855) 473-2006.

  4. The Alternative Media Center (AMC) will:

    1. Provide the Alternative Media format within 15 business days of receipt.

    2. If the AMC is unable to provide the requested information in the acceptable format, they will respond to the taxpayer within 5 business days of receipt.

    3. If the AMC is unable to read the notice they will respond to the taxpayer within 3 business days.