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21.6.7  Adjusting Individual Tax Accounts

Manual Transmittal

September 16, 2016

Purpose

(1) This transmits revised IRM 21.6.7, Individual Tax Returns, Adjusting Individual Tax Accounts.

Material Changes

(1) Various editorial changes made throughout.

(2) The IRM references to the 21.6.2 have been updated throughout to IRM 25.23.4 where needed.

(3) Throughout the IRM, all CP 29, CP 36, CP 36B, CP 36F, CP 36S, CP 93 notices have been changed to transcripts - TRNS29, TRNS36, TRNS36B, TRNS36F, TRNS36S and TRNS93.

(4) IRM 21.6.7.3(1) Corrected 1st bullet to read CP 22A instead of CP 22.

(5) IRM 21.6.7.4.1 Corrected title and entire section to read CP 22A instead of CP 22.

(6) IPU 16U0084 issued 01-11-2016 IRM 21.6.7.4.1.2(5) Deleted the note in the 2nd THEN box concerning PC 8.

(7) IPU 16U0084 issued 01-11-2016 IRM 21.6.7.4.1.3(1)(d) Added in other IRM references for clarification.

(8) IRM 21.6.7.4.2.4(1) Corrected link in 3rd THEN box to the Files locations.

(9) IPU 16U1199 issued 07-13-2016 IRM 21.6.7.4.2.7.2(1) (e) Added information to use TC 976 transaction date for input the TC 971 AC 002.

(10) IPU 16U0084 issued 01-11-2016 IRM 21.6.7.4.2.7.2(2) Deleted CC 018 and added CC 094 and CC 096.

(11) IPU 16U0549 issued 03-17-2016 IRM 21.6.7.4.2.7.3(1) Added a caution under (1) concerning new procedures for incorrect return posted first.

(12) IPU 15U1534 issued 10-16-2015 IRM 21.6.7.4.2.7.3(1)(i) Deleted last of bullet and (o) added IRM reference for refundable credits listing.

(13) IPU 16U0084 issued 01-11-2016 IRM 21.6.7.4.2.7.3(2) Deleted CC 018 and added CC 094 and CC 096.

(14) IPU 16U0926 issued 05-16-2016 IRM 21.6.7.4.4(1) Added additional IRM reference in the 7th bullet for PTC.

(15) IRM 21.6.7.4.4(1) Updated all IRM references to the Premium Tax Credit in the table.

(16) IPU 15U1534 issued 10-16-2015 IRM 21.6.7.4.4(2) Added new caution.

(17) IPU 16U0198 issued 01-27-2016 IRM 21.6.7.4.4(2) Revised the caution.

(18) IPU 16U0198 issued 01-27-2016 IRM 21.6.7.4.4.1(8) Revised the (3) in the first THEN box.

(19) IPU 16U0375 issued 02-22-2016 IRM 21.6.7.4.4.1(8) Revised 5th THEN box.

(20) IPU 16U0926 issued 05-16-2016 IRM 21.6.7.4.4.1(8) Corrected the IDRS number in the last THEN box.

(21) IPU 16U0549 issued 03-17-2016 IRM 21.6.7.4.4.1(11) Added new information concerning the Form 14039 attached to correspondence.

(22) IPU 16U0926 issued 05-16-2016 IRM 21.6.7.4.5.2(1) Corrected IRM reference in 4th THEN box (3) and added an additional IF and THEN box with information concerning no open control.

(23) IPU 15U1534 issued 10-16-2015 IRM 21.6.7.4.5.3 Updated entire section.

(24) IRM 21.6.7.4.5.3(2) Corrected the IRM title in last sentence of the Note.

(25) IPU 16U0084 issued 01-11-2016 IRM 21.6.7.4.5.3(5) Updated the table.

(26) IPU 16U0198 issued 01-27-2016 IRM 21.6.7.4.5.3(5) Revised and corrected the table information.

(27) IPU 16U0968 issued 05-23-2016 IRM 21.6.7.4.5.3(5) Divided the last IF AND THEN blocks into two separate procedures for timely and untimely filed returns.

(28) IPU 16U1051 issued 06-09-2016 IRM 21.6.7.4.5.3(5) Added new procedures in the 5th THEN box concerning the Form 14039.

(29) IRM 21.6.7.4.5.3(5) Revised the THEN column with clarifications, IRM references, IRM titles, and updated the number of days to suspend case after sending the letter informing the taxpayer to complete the Form 14039 from 30 days to 40 days.

(30) IPU 16U0926 issued 05-16-2016 IRM 21.6.7.4.5.3(6) Added new information for working cases with payments.

(31) IPU 16U0968 issued 05-23-2016 IRM 21.6.7.4.5.3(6) Added additional procedures in the last THEN box.

(32) IRM 21.6.7.4.5.3(6) Revised the THEN column.

(33) IRM 21.6.7.4.5.3(7) Deleted the information - outdated.

(34) IPU 15U1534 issued 10-16-2015 IRM 21.6.7.4.5.4 Updated entire section.

(35) IPU 16U0084 issued 01-11-2016 IRM 21.6.7.4.5.4(5) Updated the table.

(36) IPU 16U0198 issued 01-27-2016 IRM 21.6.7.4.5.4(5) Revised and corrected the table information.

(37) IPU 16U0926 issued 05-16-2016 IRM 21.6.7.4.5.4(5) Added IRM reference to the 2nd THEN box.

(38) IPU 16U0968 issued 05-23-2016 IRM 21.6.7.4.5.4(5) Corrected the procedures in the 2nd THEN box.

(39) IPU 16U1051 issued 06-09-2016 IRM 21.6.7.4.5.4(5) Added new procedures in the 5th THEN box concerning the Form 14039.

(40) IRM 21.6.7.4.5.4(5) Revised the THEN column with clarifications, updated the number of days to suspend case after sending the letter informing the taxpayer to complete the Form 14039 from 30 days to 40 days and updated the requirement on the $25,000 omission to include the net tax increase/decrease to be $2,000 or more.

(41) IRM 21.6.7.4.5.4(6) Deleted the information - outdated.

(42) IPU 15U1534 issued 10-16-2015 IRM 21.6.7.4.5.5 Updated entire section.

(43) IRM 21.6.7.4.7(2)(c) Corrected IRM reference in the Note.

(44) IPU 15U1534 issued 10-16-2015 IRM 21.6.7.4.7(5) Deleted (3) from THEN box.

(45) IRM 21.6.7.4.10(1) Added information if April 15th is on a holiday or a weekend the deadline to file is the next business day.

(46) IPU 15U1534 issued 10-16-2015 IRM 21.6.7.4.10(2) Revised 6th bullet.

(47) IPU 16U1199 issued 07-13-2016 IRM 21.6.7.4.10(2) Added an additional bullet on item reference code 871.

(48) IPU 16U0084 issued 01-11-2016 IRM 21.6.7.4.12(4) Corrected the location of the Presidential Election Campaign Fund on the Form 1040X.

(49) IPU 16U0084 issued 01-11-2016 IRM 21.6.7.4.14(3) Added an exception to send a letter to the taxpayer if unable to determine why duplicate was filed.

(50) IPU 16U0198 issued 01-27-2016 IRM 21.6.7.4.14(3) Revised the exception.

(51) IRM 21.6.7.4.14(3) Corrected the 2nd THEN box to read CP 54B instead of CP 54.

(52) IRM 21.6.7.4.14.1(2) Deleted (2) the TC 971 AC 142 is no longer valid.

(53) IRM 21.6.7.4.16.1(1) Add information that TRNS35/TRNS35A generates electronically to CIS.

(54) IPU 16U0084 issued 01-11-2016 Exhibit 21.6.7-1 Deleted Submission Processing from reason code 017.

(55) IPU 16U0375 issued 02-22-2016 Exhibit 21.6.7-1 Added reason code 131 for Return Preparer Misconduct.

(56) IPU 16U0549 issued 03-17-2016 Exhibit 21.6.7-1 Added reason codes 160 - 163 for Form 1042-S.

(57) Exhibit 21.6.7-1 Updated the CP 22 to read CP 22A throughout the exhibit.

Effect on Other Documents

IRM 21.6.7, dated 09-11-2015, (effective 10-01-2015) is superseded. Incorporated into this IRM are IPU 15U1534 (issued 10-16-2015), IPU 16U0084 (issued 01-11-2016), IPU 16U0198 (issued 01-27-2016), IPU 16U0375 (issued 02-22-2016) IPU 16U0549 (issued 03-17-2016), IPU 16U0926 (issued 05-16-2016), IPU 16U0968 (issued 05-23-2016), IPU 16U1051 (issued 06-09-2016), and IPU 16U1199 (issued 07-13-2016).

Audience

All employees performing account/tax law work

Effective Date

(10-01-2016)

James P. Clifford
Director, Accounts Management
Wage and Investment Division

21.6.7.1  (10-01-2015)
Adjusting Individual Tax Accounts Overview

  1. Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See IRM 21.1.3, Operational Guidelines Overview. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1, 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 or authorized representative.

  2. This section presents information on adjusting individual tax accounts. There are various reasons a tax account may need to be adjusted.

  3. It may be necessary to prepare and forward Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order), to the Local Taxpayer Advocate. See IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, for complete information.

    Note:

    Form 911, Request for Taxpayer Advocate Service Assistance, is on the Accounts Management Service (AMS) system for on-line completion.

21.6.7.2  (10-01-2002)
What Are Adjustments to Individual Tax Accounts?

  1. Adjustments to individual tax accounts are required changes because of the following:

    • An amended or duplicate return filed

    • Taxpayer call

    • Taxpayer written request

    • Face-to-face request

21.6.7.3  (10-01-2016)
Individual Tax Accounts Research

  1. To adjust individual tax accounts you may have to research the following:

    • Source and Reason Codes - Computer Paragraph (CP) 21/CP 22A

    • Amended Return - No Original - TRNS29

    • Post Refund Case - Form 1040X

    • Duplicate or Amended Return - TRNS36

    • Superseding Return

    • State Tax Return Posts to Account

    • Presidential Election Campaign Fund

    • Return for Each Form W-2

    • True Duplicate

    • Duplicate or Amended - Transaction Code (TC) 420 - TRNS93

    • Duplicate Assessment - Document (Doc) Code 51 - TRNS35/TRNS35A

    • Net Operating Loss (NOL) - Carryforward

  2. See IRM 21.5.2.3, Adjustment Guidelines - Research, for additional research information.

    Caution:

    Prior to converting a Form 1040X to a Form 1040 when reprocessing a return to another taxpayer identification number (TIN), research the spouse's TIN to determine if an original return has already posted there. This will prevent generation of a TRNS36F.

    Note:

    If claim is located under the spouse's TIN, follow E-freeze procedures in IRM 21.5.6.4.9, E- Freeze.

21.6.7.4  (10-01-2002)
Adjusting Individual Tax Accounts Procedures

  1. This section explains the procedures for adjusting individual tax accounts.

21.6.7.4.1  (10-01-2016)
Source and Reason Codes - CP 21/CP 22A Notices

  1. A taxpayer is issued a notice of adjustment when the IRS takes an action on the taxpayer's tax account. The notice, Computer Paragraph (CP) 21 or CP 22A, is sent with an explanation of the action. The explanation is specified on the notice by use of one source code (SC) and one to three reason codes (RC). The SC and RC advise the taxpayer of the tax return account action taken.

    Note:

    A CP 21/CP 22A is not issued if the account balance is zero and an adjustment (command code (CC) ADJ54) for TC 290.00 is input with ONLY item reference numbers (IRNs) changing numerical data - NOT TAX (e.g., IRN 886, 887, 888, 889, 892, 895, 896, etc.).


    Caution: For the TC 290 .00 conditions related in the previous NOTE, a CP 21/CP 22A WILL be issued if the account was in balance due status before the adjustment was input. If the input operator chooses NOT to send a notice to the taxpayer, Hold Code (HC) 3 must be included in the adjustment. Refer to IRM 21.5.2.4.15, Rules on Hold Codes (HC), for additional information.

    Note:

    Should a letter be appropriate and HC 3 is used, you must send correspondence to the taxpayer.

21.6.7.4.1.1  (10-01-2002)
Action for CC ADJ54

  1. Enter a SC and at least one RC on CC ADJ54 when inputting:

    1. TC 29X for an amount with or without secondary transactions and/or credit/item reference numbers.

    2. TC 290 for zero with secondary transactions and/or credit/item reference numbers.

    3. TC 290 to disallow a claim.

      Reminder:

      When disallowing a claim or releasing a freeze it is NOT necessary to enter a SC; SC 0 generates.

21.6.7.4.1.2  (01-11-2016)
Source Code (SC)

  1. Source code (SC) selection designates which opening statement will be used on a taxpayer's notice.

  2. The valid range for the SC is 1 through 9.

  3. When the taxpayer's filing requirement code is "7," a SC marked with two asterisks (**) prints in Spanish.

  4. Use the SC with the highest numeric code if more than one SC applies.

  5. Application of SC(s):

    If Then
    Releasing a freeze on the account, disallowing a claim or inputting RC 054, RC 093 or RC 096 (for tax year 2000), RC 097, or RC 098 SC 0 generates.
    Adjustment is exactly what the taxpayer requests on a claim or duplicate/amended return.

    Note:

    SC 2 may indicate an adjustment was made based on an internally generated notice. SC 2 is the default if an incorrect or invalid SC was input.

    Input SC 1.
    CP 09/CP 27 Input SC 1.
    Taxpayer replies to a prior notice (e.g., math error notice) and SC 3 or 4 do not apply. Input SC 2.
    Adjustment is due to new legislation which changes the law too late to update current tax forms or makes an issue effective retroactively Input SC 3.
    Adjustment is the result of an error by an IRS employee Input SC 4.
    Adjustment is a carryback claim Do not use a SC; SC 5 generates.
    Adjustment reflects a math error made by the taxpayer on a claim or duplicate/amended return Input SC 6. Reminder: DO NOT use SC 6 for adjustments based on a taxpayers reply to a previous math error notice.
    Adjustment is an offset reversal, TC 897, or TC 766 with an Offset Trace Number (OTN)

    Note:

    SC 7 may only be used with RCs 086, 087, 089, 090 and 091.

    Input SC 7.
    Adjustment results from taxpayer contact with the Taxpayer Advocate Service (TAS) Input SC 8.
    Adjustment is made by the Underreporter function Input SC 9.
  6. For SC notice verbiage, see Document 6209, Master File Source Codes, Section 8C.2

21.6.7.4.1.3  (01-11-2016)
Reason Code (RC)

  1. Reason code (RC) selection designates the end of the statement that will be printed on the taxpayers notice.

    1. The RC should describe the area(s) of the return affected by the adjustment action.

    2. Use the RC(s) which best describes the cause of the adjustment.

    3. A reason code is not required for a ripple effect change.

    4. When indicated in other IRM references and for audit trail purposes, enter a reason code even when a TC 29X for .00 is made to the account.

      Exception:

      Do not enter a reason code if specific instructions direct you not to.

    Example:

    The taxpayer provides an additional Form W-2 which changes wages and withholding. A change to Earned Income Tax Credit (EITC) results. Use RC 007, wages, and RC 051, withholding; the EITC change will not require RC 053.

  2. The valid range for the RC is 001 through 200.

  3. A maximum of three RCs may be used. If more than three are necessary, use the three which most clearly explain the reason for the adjustment.

  4. Refer to Exhibit 21.6.7-1, Reason Codes, for RC language. RCs are marked with:

    1. One asterisk (*) for international accounts (PSC only).

    2. Two asterisks (**) to print in Spanish when the taxpayers filing requirement code is "7" ; RC 042 only prints in Spanish.

    3. Three asterisks (***) when reversing offsets through the Treasury Offset Program.

      Note:

      RCs 086, 087, 089, 090 and 091 are the only RCs permitted to be used with SC 7; no other SC may be used.

21.6.7.4.1.4  (02-12-2004)
Penalty Reason Code

  1. The penalty RC does not print on the Individual Master File (IMF) taxpayers notice.

  2. Only enter a penalty RC if the adjustment includes a penalty change.

  3. The penalty RC is input in the fourth RC position on the CC ADJ54 format. Use the regular RC 062 or RC 065 (071 for Spanish) in the first, second, or third position.

  4. See IRM 20.1, Penalty Handbook for complete penalty relief criteria, valid range of penalty RCs, and an exhibit for penalty RC language. Penalty RCs are explained Document 6209, Section 10 Penalties and Interest Provisions.

21.6.7.4.2  (01-17-2008)
Amended Return - No Original -TRNS29 (Amended Return Posts to an Account With No Original Return Present)

  1. When an amended return posts on an account with no original return present, Master File generates:

    • A TRNS29

    • An "E-" freeze on the account. See IRM 21.5.6.4.9, E- Freeze

  2. A TRNS29 notice generates electronically as follows:

    1. Fifteen (15) cycles after the Return Due Date (RDD), when an amended/"G" coded return (TC 977) or a duplicate return (TC 976) posts to an account with no original return (TC 150).

    2. Four (4) cycles after the return due date when an amended return is blocked in 93.

21.6.7.4.2.1  (10-01-2013)
Analyzing TRNS29 Notices

  1. Analyze the return generating the TRNS29 notice by using CC TRDBV and CC RTVUE. Cases may be resolved at this level.

    If the Form(s) W-2 Then
    For the primary spouse is a copy and the filing status is joint The original return may be filed under the other spouse's TIN.
    Have a different year than the return Refer to IRM 21.6.7.4.2.7, Tax Period Changes.
    Is an original (Copy B of Form W-2) The amended return may be an original return prepared by taxpayer.
  2. Check for taxpayer notes or explanations.

    If the return causing the TRNS29 Then
    Indicates "Injured Spouse" or the TRNS29 indicates "Debtor Master File Case (DMFC)" Work according to the procedures in IRM 21.4.6, Refund Offset.
    Is a tentative return (filed prior to due date and lacking sufficient information to process as an original return)
    1. Process as an application for an extension to file.

    2. Photocopy the return and correspondence indicating an extension request.

    3. Write "photocopy" on the copy.

    4. Route the copy to Taxpayer Relations with instructions to process as an extension request.

    5. Input TC 971 action code AC 002 to release the "E-" freeze. See IRM 21.5.1.4.8, Transaction Code 971.

    6. Enter "extension request" in the CC FRM77 remarks area.

    7. Send the return back to Files.

  3. If the original return was filed with International file location codes 66 or 98 (first 2 digits of Document Locator Number (DLN)):

    1. Route the case to the Philadelphia Campus (PSC).

    2. Recharge the amended return to PSC. Refer to IRM 21.2.4.3.7, Transferring Cases to Another Campus, and IRM 21.5.1.4.9, Recharging and Re-filing Documents, for additional information.

    3. Send a Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to the taxpayer. For additional information regarding Letter 86C, refer to IRM 21.3.3.4.2.1, Use of 86C Letter - Referring Taxpayer Inquiry/Forms to Another Office.

21.6.7.4.2.2  (10-01-2015)
Locate an Original Return (TC 150)

  1. Request additional information via Integrated Data Retrieval System (IDRS) to locate the taxpayer’s original return. Check the following:

    • On the IAT tool bar, the R button (Refund Screen Button) - Launches the Refund Research Screen. The Refund Research screen allows the assistor to quickly obtain information from several IDRS Command Codes.

    • CC FFINQ for returns in processing. The return DLN is displayed on IDRS

    • CC SUMRY, CC TRDBV, CC REINF, CC RTVUE, CC IMFOL, and CC ENMOD to research for any current year information under the TRNS29 TIN (valid or invalid)

    • CC NAMES, CC INOLE and CC ATINQ for any other TINs (valid and invalid) under all names pertaining to the TRNS29 case

    • CC ERINV for unprocessed returns in the reject area. Follow local procedures for completing open reject cases

    • CC IMFOL for a spouse's TIN (valid and invalid)

    • CC IMFOL for the posting of TC 150, 977, or 976 with a current list year DLN on any TIN located in the above steps

    • CC IMFOL for a complete record of the entity and tax periods for the TRNS29 TIN when the above steps show no data available

    • CC UPTIN for an unpostable return with a current list year. Follow unpostable procedures if original return is unpostable

  2. If there are payments (credits) on the module, and a TC 150 cannot be located:

    1. Request the payment posting document(s).

    2. Review for any indication of another name or TIN.

      Exception:

      If the payment is an Integrated Submission and Remittance Processing (ISRP) or Lockbox payment and you have access to the Remittance Transaction Research (RTR) system, research RTR for the posting document and notes indicating changes or deletions. See IRM 21.5.7.3.1, Remittance Transaction Research (RTR) System, for additional information.

    Note:

    During filing season, a return other than "refund" may be delayed in processing. If TC 610 (remittance with return) posted, the return may be in-house awaiting processing. See IRM 21.2.4.3.44.1, AM12 Transcript Resolution Transcripts with $100,000 or More Credit Balances for additional information on TC 610 remittances.

  3. If you need more information to process the TRNS29, contact the taxpayer. Take the following action to correspond.

    1. Photocopy the return.

    2. Write "Copy" on the photocopy.

      Caution:

      Do not send a TRNS29 to the taxpayer

    3. Prepare Form 8009-A, We Need More Information to Process Your Amended Return, or if using Correspondence Imaging System (CIS) use the appropriate C-Letter to request missing forms, schedules, signatures or other information. Refer to IRM 21.5.1.5.6, Incomplete CIS Claims, for additional information.

      Note:

      If using a copy of a numbered return to respond to a taxpayer inquiry, or sending a copy back for any reason, make sure the Document Locator Number (DLN) is not visible.

    4. Input TC 971, AC 270 using the current date for the transaction date (TRANS-DT). See IRM 21.5.1.4.8, Transaction Code 971.

      Note:

      It is not necessary to input TC 290 .00 on an IMF account. Input of the TC 971, AC 270, will release the "-A" freeze on an IMF account. BMF accounts still require the input of a TC 290 to release the "-A" freeze. Refer to IRM 21.5.1.5.6 (6), Incomplete CIS Claims, for additional information

    5. Request all needed information.

    6. Enclose the appropriate schedules or forms.

    7. Enclose a return envelope.

      Caution:

      Extreme care must be taken to ensure that only the material relative to the taxpayer(s) to which the correspondence is addressed is enclosed in the envelope. Refer to IRM 21.3.3.4.25, Breaches of Personally Identifiable Information (PII) Caused by Manual Stuffing Errors, for additional information.

  4. If taxpayer does not respond or submits an incomplete response:

    1. Perfect the document for input as an original

    2. Attach a copy of the C-Letter, if available

    3. Prepare for reprocessing following procedures in IRM 21.6.7.4.2.5, TC 150 Not Located - Duplicate or Amended Return Obtained

21.6.7.4.2.3  (10-01-2015)
TC 150 - Different Year or Different TIN

  1. If you identify a different year or different Taxpayer Identification Number (TIN) case while responding to inquiries on the AM toll-free telephone line, prepare Form 4442, Inquiry Referral, and route it to the Campus AM Account Paper function at the campus where the TRNS29 was generated.

    Exception:

    If there is an open control on the account, refer Form 4442 to the employee who has the open control. If no open control and a TRNS36 was not generated, then route Form 4442 to the AM Account Paper function at the campus that processed the original return.

  2. If the original return is posted on a different year, take the following action:

    If the original return is located on a different year and the duplicate or amended return posted to Then
    The correct period
    1. Request the original return using CC ESTAB.

    2. Back out the original return from the incorrect tax period. Follow procedures in IRM 21.6.7.4.2.7, Tax Period Changes.

    3. Compare the returns for any adjustments.

    4. Correct the posted account to include any changes on the duplicate or amended return.

    5. Edit the original return for reprocessing to the correct tax period, prepare Form 3893, Re-Entry Document Control, and forward for processing.

    An incorrect period
    1. Transfer any misapplied payments to the correct tax period.

    2. Adjust the correct tax period to include any changes on the duplicate or amended return.

    3. Input TC 971 AC 002 on the incorrect tax year to cross-reference the correct tax period. See IRM 21.5.1.4.8, Transaction Code 971.

  3. If the original return is found on another TIN, determine if the accounts can be resequenced. Follow procedures in IRM 21.6.2.4.1, Resequencing Accounts.

    If the accounts Then
    CAN be resequenced
    1. Follow the instructions in IRM 21.6.2.4.1, Resequencing Accounts.

    2. Work as a duplicate filing condition after the account has resequenced.

    CANNOT be resequenced
    1. Compare the duplicate or amended return with the posted TC 150.

    2. Transfer any misapplied payments to the correct SSN. Follow procedures in IRM 21.5.8, Credit Transfers.

    3. Adjust the posted tax module to include any changes on the duplicate or amended return, if necessary.

    4. Input TC 971 AC 002 on the incorrect TIN to cross-reference the correct TIN; and release the "E–" freeze. See IRM 21.5.1.4.8, Transaction Code 971.

  4. When working filing status changes involving a joint account, follow procedures in IRM 21.6.1, Filing Status and Exemption Adjustments.

21.6.7.4.2.4  (10-01-2016)
TC 150 - Original Return Not Obtained

  1. If a TC 150 is located and there is no reason to request the original return for verification, make the adjustment using the appropriate blocking series.

    If the original return is requested but not received and Then
    The return is charged out to another area Contact the area for the return or a complete copy.
    The return is not charged out to another area Request the return a second time.
    A second request does not secure the return
    1. If unable to secure the return after the two previous requests, input another request as "Special Search" using Form 2275, Records Request, Charge and Recharge. For information on where to fax Form 2275, refer to Files Contact Listing (the former IAP) on the Who/Where tab on the SERP home page.

    2. Send a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to the taxpayer.
      Note: Exhaust all in-house means to secure the return before contacting the taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers that meet international criteria. Refer to IRM 21.8.1.1.15, International Forms Processing, for additional information.

    4. If no reply to the Letter 418C, Amended/Original Return Unavailable; Copy Requested, follow procedures in IRM 21.5.3, General Claims Procedures.

21.6.7.4.2.5  (10-01-2015)
TC 150 Not Located - Duplicate or Amended Return Obtained

  1. If the duplicate or amended return is received and is intended to be an original return:

    1. Determine if the return is complete and processable.

    2. Telephone or correspond for missing forms, schedules, or signatures.

    3. Suspend for 40 days; Suspend the case for 40 days; 70 days for overseas taxpayers that meet international criteria. Refer to IRM 21.8.1.1.15, International Forms Processing, for additional information.

    4. If no correspondence was necessary (return was complete and processable as filed) or if there is no reply to correspondence, process the return as follows:

    If Then
    The return is a Form 1040, U.S. Individual Income Tax Return
    1. Circle out in red, all "G" coded marks and/or notations on the return (e.g., "Duplicate," "Copy," "Amended," etc.).

      Exception:

      If the return was GUF voided/deleted in error by Integrity Verification Operation (IVO)/Taxpayer Protection Program (TPP), and the IRP data supports the income/withholding shown on the return or the taxpayer provides substantiation, change the received date to the received date of the deleted return.

    2. To determine the DLN to be used on the reprocessed return refer to IRM 21.5.2.4.23.3, DLNs Used for Reprocessing Documents.

    3. Enter Computer Condition Code (CCC) "3" on refund returns, when the signature and/or Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, is missing.

      Reminder:

      CCC "3" generates a TC 570 and a "-R" freeze on the account when the TC 150 posts. The overpayment will not refund until the freeze is released.

      Note:

      Computer Condition Codes (CCCs) are entered in the upper portion of the filing status area of Form 1040/1040A, and above the dotted line of the Presidential Election Campaign Fund (PECF) area on Form 1040EZ. Refer to Exhibit 3.11.3-4, Computer Condition Codes, for additional information.

    4. Prepare Form 3893, Re-Entry Document Control, to reprocess the return as the original and forward for processing.

    5. Input TC 971 AC 002 to indicate the duplicate return is being reprocessed as the original (to post as TC 150). Use the posted TC 976 date as the transaction date.

    The return is a Form 1040X, Amended U.S. Individual Income Tax Return
    1. Circle out, in red, the word "Amended" and the "X" in the return title.

    2. Prepare a blank Form 1040, U.S. Individual Income Tax Return, or conversion Form 6114, Prior Year and Conversion Form 1040 Edit Sheet, with all relevant tax data.

    3. Reprocess the return as an original. Refer to IRM 21.5.2.4.23, Reprocessing Returns/Documents.

    4. Input TC 971 AC 002 to indicate the amended return is being reprocessed as the original (to post as TC 150) which will release the E– freeze. Use the posted TC 977 date as the transaction date.

    5. Enter CCC "U" when forms or schedules, to support the return entries, are missing.

  2. In cases where the TC 971 AC 010 created an "E-" freeze because no TC 150 posted, research CC FFINQ:

    If Then
    Original return is in processing Monitor IDRS until the TC 150 posts.
    TC 610 is posted and there is no information on CC FFINQ, the return may be a balance due e-filed return that has not posted, or the original return due date has not expired Push code the return with your IDRS number. Follow procedures in IRM 21.5.1.4.4.1, TC 930 Push Codes or IRM 21.5.1.5.7, CIS Push Codes.
    TC 610 posted, determine if the original return was rejected by researching CC TRDBV Follow the procedures in (1) above to process the taxpayer's Form 1040X as the original
    None of the above apply and Form 1040X is for the current year
    1. "G" code the Form 1040X.

    2. Send to Numbering for processing.
      Note: This action allows the "E–" freeze to remain on the module awaiting TC 150 posting.

    None of the above apply and Form 1040X is for a prior year Follow procedures under (1) above.

21.6.7.4.2.6  (10-01-2013)
TC 150 Not Located - Duplicate/Amended Return Not Obtained

  1. When there is no TC 150 and the duplicate or amended return cannot be obtained, take the following action:

    If Then
    TC 971 created the TC 977
    1. Correspond with the taxpayer using a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to request copies of the original and duplicate amended return.

    2. Suspend case for 40 days; 70 days for overseas taxpayers.

    TC 971 did not create the TC 977
    1. Request TC 976/977 DLN.

    2. If unable to secure the return after the two previous requests, input another request as "Special Search" using Form 2275, Records Request, Charge and Recharge

    3. Send a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to the taxpayer to request copies of the original and duplicate amended return.

      Note:

      Do not send Letter 418C if return is charged out to another area. Contact the area for the return or a complete copy.

    4. Suspend case for 40 days; 70 days for overseas taxpayers.

  2. If there is no reply to the correspondence and you have not received the duplicate or amended return take the following action:

    If Then
    No credits posted on the account
    1. Input a dummy return.

    2. Use the DLN of the TC 976 or 977 to post a TC 150 and release the freeze.

    Credits posted on the account
    1. Input a dummy return, with a tax liability equal to the credits.

    2. Use the DLN of the TC 976 or 977.

    TC 971 created the TC 977
    1. Input a dummy return with a new DLN to post a TC 150 and release the freeze.

    2. Input TC 971 AC 002 to release the E- freeze and prevent the issuance of an erroneous "-A" freeze.

    Caution:

    This procedure is used only if insufficient information is available to process the return as an original. This action satisfies the filing requirement for the module. Ensure the return was not intended for another module.

21.6.7.4.2.7  (10-01-2013)
Tax Period Changes

  1. Returns may be processed to an incorrect period or taxpayer requests a change in accounting period. The following procedures are included in this section:

    • Mixed Periods

    • Change in Accounting Period

  2. When a return is posted to an incorrect period it may be necessary to correct the assessment statute expiration date (ASED) to reflect the correct return received date. Use CC REQ77/FRM77 to input TC 560 to correct the ASED if necessary. See IRM 2.4.19.1, Overview of Command Codes REQ77, FRM77, and FRM7A, for information on CC REQ77.

  3. Use the following instructions when using TC 560 to correct the ASED:

    1. TC 560 on CC REQ77 must be input on IDRS to correct the ASED to show the posting of the correct return

    2. Input TC 560 on CC REQ77

    3. Input "70" (in the DLN-CD field) to extend the ASED and "99" (in the DLN-CD field) to back date/back down the ASED

21.6.7.4.2.7.1  (10-01-2015)
Mixed Periods

  1. A mixed period duplicate filing condition (TRNS36, Duplicate Filing Condition) is created when returns from different tax periods, but for the same taxpayer, are processed to the same account.

  2. One of two conditions occur on mixed period cases.

    1. The correct year return posts first

    2. An incorrect year return posts first

  3. If you identify a Mixed Period case while staffing the AM toll-free telephone line or are located in a Taxpayer Assistance Center, prepare Form 4442, Inquiry Referral, and route it to the Campus AM paper function where the TRNS36 was generated. If TRNS36 was not generated, route Form 4442 to the campus that processed the original return.

    Exception:

    If there is an open control on the account, refer the Form 4442 to the employee who has open control.

  4. If a return needs to be reprocessed, you must research the secondary SSN (if the filing status is joint) to see if a return has already been filed for that tax period. If an original return is found on the secondary TIN, do not reprocess the return. Follow appropriate adjustment procedures on the secondary SSN. See IRM 21.6.1.4, Filing Status Change Procedures.

  5. Refer any reprocessable/reinput return for which the ASED has expired or is imminent to the Statute function as indicated below:

    If Then
    Document posted as a TC 150 Within 90 days of expiration
    Document did not post as a TC 150 (e.g., document posted as a TC 976/977 and never posted as a TC 150) Within 180 days of expiration
  6. Do not abate tax on the incorrect module before referring the cases to the Statute function.

  7. Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, and Document 7368, Basic Guide for Processing Statute Cases.

21.6.7.4.2.7.2  (07-13-2016)
Correct Year Return Posted First

  1. If the correct year posted first, take the following action:

    1. Transfer any misapplied payments to the correct period.

    2. Use a secondary TC 570 on the credit side, if needed, to prevent refunds from generating.

    3. Input the IDRS actions.

    4. Release the "-A" freeze by inputting a TC 29X.

    5. Input a TC 971 AC 002 to cross-reference the other tax period. Use the posted TC 976 date as the transaction date.

  2. Do not request the return from files. Prepare a dummy return, including all schedules and forms, using the information from CC TRDBV or CC RTVUE, for the correct tax period if there is no return posted. Refer to IRM 21.5.2.4.23.11, Reprocessing "Dummy" Returns, for additional information. Input TC 971 AC 017 on the reprocessable year. See IRM 21.5.2.4.23, Reprocessing Returns/Documents, for information on reprocessing returns.

  3. If there is a TC 140 in the module, input TC 599 closing code (CC) 094 for taxable return secured, TC 599 CC 096 for non-taxable return secured, and TC 971 AC 017 on the reprocessable year. Refer to IRM 5.19.2, Return Delinquency, for additional information.

  4. See IRM 21.5.1.5.5, Processing/Reprocessing CIS Tax Returns, for information on processing CIS images.

  5. If there is a return posted on the other tax period, adjust the tax, credit, and reference fields to reflect the correct return information.

21.6.7.4.2.7.3  (03-17-2016)
Incorrect Year Posted First

  1. If the incorrect year posted first, take the following action:

    Caution:

    Refer to IRM 20.1.2.1.6.2, Incorrect Tax Shown Recorded, and IRM 20.1.2.1.6.3, Wrong Year Posted First, for new procedures on accounts when the taxpayer’s original, true return is being processed after a TC 150 has posted or when correcting errors related to the "tax shown" on the original return.

    1. Transfer any misapplied payments to the correct period.

    2. Use a secondary TC 570 on the credit side, as needed.

    3. Input TC 570 on the debit side, if a refund was not issued, to suppress CP 60, Credit Reversal Adjustment Notice, issuance.

    4. Increase or decrease tax and credits to reflect the correct figures.

    5. Use blocking series "00."

    6. Update the Return Processable Date and if needed update the ASED using TC 560 to 3 years from the received date of the TC 976 return as applicable.

    7. Include a statement in the Remarks section indicating that because of the mixed period, the TC 976 is now the original return.

    8. Adjust any item reference fields.

    9. Use Hold Code 3 or 4, as needed.

    10. Advise taxpayer of corrected figures if the account will now be in balance due status.

    11. Consider any posted penalties.

    12. Analyze the module to determine if ES penalty should be assessed or recomputed.

    13. Input TC 971 AC 001. Cross-reference the other tax period.

    14. Correct the withholding to reflect any refund or offsets previously issued from the incorrect year's modules.

    15. Transfer any other available credit or payments to the account. Net out any refunds or offset previously issued (subtract the refund from the withholding).

      Exception:

      If a refund was previously issued or an offset occurred, and a refundable credit was involved, the credit must be reversed and the refund/offset must be moved/reversed. Refer to IRM 21.5.2.4.23.10, Moving Refunds, and IRM 21.6.3.4.2, Refundable Credits, for additional information. Enter Computer Condition Code (CCC) O in the filing status portion of the return to prevent a second refund.

    16. When "netting out" any previously issued refund or offset, input a TC 971 AC 173 on the correct year. Cross reference the incorrect year's module.

    17. Correspond with taxpayer if a refund was issued. Advise a processing error was made and an additional refund or balance due notice will be issued.

    18. Refer to IRM 21.4.6, Refund Offset, if TC 896 or TC 898 posted to the module.

  2. Do not request the return from files. Prepare the dummy return, including all schedules and forms, based on the information from CC TRDBV or CC RTVUE, if a TC 150 is not posted. If the return is available on AMS, you can print and process the return. Refer to IRM 21.5.2.4.23.11, Reprocessing "Dummy" Returns, for additional information. Input TC 971 AC 017 on the reprocessable year. Use Form 3893, Re-Entry Document Control, and route appropriately.

  3. If there is a TC 140 in the module, input TC 599 CC 094 for taxable return secured, TC 599 CC 096 for non-taxable return secured, and a TC 971 AC 017 on the reprocessable year.

    Note:

    Use posting delay code for one cycle, on the correct year, if the incorrect year will be in balance due status and the correct year in overpayment status.

  4. Refer to IRM 21.5.2.4.23, Reprocessing Returns/Documents, for information on reprocessing returns. Follow local procedures for bypass DIF scoring.

  5. Refer to IRM 21.5.1.5.5, Processing/Reprocessing CIS Tax Returns, for information on processing CIS images.

  6. If there is a return posted on the correct tax period:

    1. Increase or decrease the tax, credit, and reference fields to reflect the correct return information.

    2. Use posting delay code on the correct year for one cycle if the incorrect year will be in balance due status and the correct year will be in overpayment status. Follow the procedures in IRM 21.6.7.4.14, True Duplicate Return, if the posted data matches the second return.

21.6.7.4.3  (10-02-2008)
Post Refund Case - Form 1040X

  1. Forms 1040X, for which refunds are issued by Document Perfection, are received in AM when a TC 150 is not present on the module.

    1. The Form 1040X is processed with Document Code 54.

    2. The adjustment resequences for 10 cycles.

    3. The adjustment then unposts if no TC 150 is present.

    4. A TC 977 and TRNS29 notice is generated.

    5. The TRNS29 is sent to AM.

  2. Contact the Unpostable function if Form 1040X and the deleted adjustment document are not received in Customer Account Services (CAS):AM.

  3. Review the Form 1040X and the TRNS29 to determine the correct TIN or tax period. Follow TRNS29 research procedures in this section.

  4. Take the following action to resolve the case:

    1. Math verify the Form 1040X.

    2. Obtain the original return, as necessary.

    3. Determine if an incorrect refund was issued due to a math error or erroneous refund. Refer to IRM 21.5.4.4, Math Error Procedures Processing, for additional information.

    4. Input the adjustment to the correct account.

    5. Use the appropriate blocking series, RC and SC.

21.6.7.4.4  (10-01-2016)
Duplicate or Amended Returns - TRNS36

  1. A duplicate filing condition (TC 976/977) occurs when a duplicate or amended return posts to an account with an original return (TC 150) posted. Consider all of the following when working duplicate filings:

    • Transcript (TRNS) 36, Duplicate Filing Condition, are displayed on Servicewide Notice Information Program (SNIP) as TRNS36.

    • Superseding returns

    • Return filed for each income document, for example Form W-2 and/or Form 1099

    • True duplicate returns

    • TRNS29, Duplicate/Amended Return Posts to an Account with No Original Return Present, TRNS29 are displayed on SNIP as TRNS29.

    • TRNS36/TRNS29 - When changing the filing status (except Single to Head of Household or Head of Household to Single) and one of the Premium Tax Credit (PTC) data elements as shown in IRM 21.6.3.4.2.13.7, Adjusting Accounts, are on the module, refer to IRM 21.6.1.4 (5), Filing Status Changes Procedures, to determine potential impact.

    • TRNS36/TRNS29 - When adding an exemption (spouse or dependent) and the PTC data elements are NOT present, deleting an exemption and one or more of the PTC data elements are present, or correcting the TIN of an exemption claimed on the return due to math error, then research Coverage Data Repository (CDR) to verify if the person being added/deleted received the Advanced Premium Tax Credit (APTC). If he/she received APTC, then refer to IRM 21.6.3.4.2.13.6, Premium Tax Credit Amended Returns, IRM 21.6.3.4.2.13.6.1, 8962 PTC Calculator Response, and for math errors refer to IRM 21.6.3.4.2.13.5, Premium Tax Credit Math Error Notice Responses, for additional information.

    • TRNS36/TRNS29 - When increasing or decreasing income and there is PTC data elements on the module as shown in IRM 21.6.3.4.2.13.7, Adjusting Accounts, then refer to IRM 21.6.3.4.2.13.6, Premium Tax Credit Amended Returns, for additional information.

    • Penalty and interest

    • Math Errors. Follow procedures in IRM 21.5.4.4, Math Error Procedures Processing

    • Refer IRM 21.6.2, Adjusting TIN-Related Problems, for any TIN related problems

    • Injured Spouse allocations when the TC 976/977 is blocked in "92" , refer to IRM 21.4.6.5.2, Injured Spouse Inquiries.

  2. When a duplicate filing occurs, master file generates:

    • A TRNS36, Duplicate Filing Condition (associated with the amended or duplicate return)

      Note:

      When the original return (TC 150) posts after multiple amended/duplicate returns, only one TRNS36 Notice will generate based on the last TC 976/977. You must consider all posted TC 976/977s when adjusting the account.

    • A "-A" freeze on the account.

    Caution:

    There are situations when a return with a later received date posted as the TC 150, while a return with an earlier received date is posted as a TC 976 on the account. Make sure thorough research is completed in these situations.

21.6.7.4.4.1  (05-16-2016)
TRNS36 - Control

  1. The TRNS36 electronic transcripts and will be assigned through CIS and the control base remains open until:

    • The "-A" freeze is released, or

    • The case is referred to the appropriate area

  2. The release of the "-A" freeze allows the computer to generate a refund or offset of any credits. See Document 6209, Section 8A, Master File Codes - Transaction, MF and IDRS Collection Status, Freeze and IDRS Status 48, Restrictive and Filing Requirement, for instructions on releasing the "-A" freeze.

    Caution:

    If TRNS36 is on invalid SSN, DO NOT release a refund unless the taxpayer responded to CP 54B.

  3. The Files function will no longer pull returns for the original TRNS36, TRNS36B, TRNS36F, and TRNS36S transcripts. The customer service representative/tax examiner (CSR)/(TE) will utilize CC ESTAB to request the return when necessary.

    Note:

    Do not request the return for a signature on the duplicate filed return.

  4. Following are some conditions where a return is necessary:

    Note:

    This list is not all inclusive.

    Reminder:

    Do not request the return if you are transferring the case to identity theft.

    • No information on CC TRDBV for the duplicate return

    • Unable to verify the income and withholding information claimed on the duplicate return using CC IRPTR

    • AUR and CAT A criteria

    • Taxpayer is deceased and the Form 1310 is needed

    • SFR audit reconsideration

      Caution:

      Do not order the document if the DLN contains a Julian date of 888 or 887. These are Exam SFR cases and were not sent in by the taxpayer and not in Files.

  5. Input CC ESTAB to request the original return and/or the TC 976.

    If Then
    The return is charged out to another area Contact the area to determine the actions to be taken.
    unable to secure the return after two CC ESTAB requests
    1. Input a third request as a "Special Search" using Form 2275, Records Request, Charge and Recharge

    2. Send a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to the taxpayer.

      Note:

      Exhaust all in-house means to secure the return before contacting the taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers.

  6. If the TC 976 generated as a result of TC 971 AC 141 (automated Substitute For Return (SFR)) or the module has a history item of "REPRXAS150" and you can determine that the original return (TC 150) belongs to the taxpayer then release the -A freeze.

  7. Utilize CC TRDBV and CC IRPTR to research the original and duplicate return to verify the following:

    1. The name(s) of the taxpayer(s)

    2. The address on the two returns

    3. The filing status on both returns

    4. The dependents on both of the returns

    5. The income and credits (e.g., federal withholding) reported on the original and/or duplicate return

      Note:

      For additional information on the entity refer to IRM 21.6.7.4.4.4, Entity Verification.

    Caution:

    It is extremely important that you carefully review for a refund statute expiration date (RSED). Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

  8. Follow the table below for researching the TRNS36 Accounts:

    If Then
    After research you determine the two returns belong to the same taxpayer
    1. Verify the income reported on the two returns using CC IRPTR

    2. Determine why the duplicate return was filed.

    3. Make adjustments to the return if needed.

    Taxpayer is responding to a math error or adding additional information to original return Input a TC 290 for the amount of the adjustment with the appropriate reference codes and RCs, or if no change to the return input a TC 290 .00 to release the -A freeze.
    You can determine either the duplicate or the original return belongs to another tax period Follow the procedures in IRM 21.6.7.4.2.7.2, Correct Year Return Posted First, and IRM 21.6.7.4.2.7.3, Incorrect Year Posted First.

    Note:

    Do not request the return from files. Prepare the dummy return, including all schedules and forms, based on the information from CC TRDBV. If the return is available on AMS, you can print and process the return.

    After research you determine a Mixed Entity case Follow the procedures in IRM 25.23.4.6, Mixed Entity Procedures.
    After research you determine that the returns do not belong to the same taxpayer and it becomes an identity theft case
    1. Do not request the tax returns, MFTRA U (Numident), or TRPRT prints

    2. Notate your research in the Case Notes section of CIS for example: "Researched CC TRDBV, CC IRPTRL and CC IMFOL" .

    3. Research account for related cases and documents and link to case

    4. Use CC REQ77 to input the TC 971 AC 522, the literal WI AMADJ and the appropriate tax administration SC on CC ENMOD. For additional information refer to Exhibit 25.23.2-10, IMF Only TC 971 AC 522 Tax-Related Identity Theft, Case Status (Initial Claim/Suspicion and Supporting Documents)

    5. Update the program number to 710-40011 and mark the case as statute searched

    6. Change the category code to either IDT1 or IDT3

      • IDT1 - Involves taxpayer identified identity theft

      • IDT3 - Involves IRS identified identity theft

    7. Reassign the case to IDRS number ≡ ≡ ≡ ≡ ≡ ≡ ≡

    The TC 976 Document Locator Number (DLN) is assigned blocking series 920-929, (indicates a Form 8379, Injured Spouse Allocation, has been filed with the return)
    1. Reassign the case to IDRS# ≡ ≡ ≡ ≡ ≡ ≡ .

    2. Use category DMFC.

    3. Update the program code to 97140.

    4. Refer to IRM 21.4.6.5.2, Injured Spouse Inquiries, for additional information.

  9. If all case actions have been completed and you are monitoring the account to ensure proper posting, close the case and establish a monitor base on IDRS using category code "MISC" with the current date as a received date.

    Note:

    When establishing this monitor control base, using an asterisk (*) will generate the current date when used with CC ACTON.

  10. Take the following actions concerning Social Security Administration (SSA) Benefits on a duplicate return or Form 1040X that claims withholding and/or refundable credits:

    • Review any duplicate or amended return that claims SSA benefits (total or taxable) with refundable credits and/or withholding and the refund is equal to the amount of the credits.

      Note:

      For a complete list of refundable credits, refer to IRM 21.6.3.4.2 (1), Refundable Credits.

    • Research CC IRPTR to substantiate the income and/or withholding. "No Consider" the request, by using Letter 916C, if CC IRPTR does not substantiate the request. Refer to the procedures in IRM 21.5.3.4.6.3, No Consideration Procedures. Suggested paragraph: "We cannot substantiate the income, withholding, or credits being claimed on the return. Therefore, we cannot process your claim at this time. If you have official supporting documents such as Form W-2, Forms 1099, or any other form that reports information concerning the income, withholding or credit, you may file another claim and attach your documentation" .

    Note:

    These procedures should be followed even though the withholding or refundable credit is below the specified tolerance amount. If cases are routed to the ID Theft sites, they will be returned to the originator.

  11. When working correspondence and the Form 14039, IRS Identity Theft Affidavit, is attached, take the following actions:

    • Send Letter 5073C to the taxpayer

    • Input the TC 971 AC 522 on CC ENMOD

    • Change the category code to IDT1

    • Forward case to identity theft

  12. The new TRNS36 and TRNS36F cases are run through the CP36 Transcript Tool weekly to identify what type of case it may be. All cases identified as IDT1, IDT3 and IDT8 are removed from the inventory and transferred to identity theft teams. The tool leaves a history item on CC ENMOD that will assist in identifying the action needed to close the case. If there isn’t any history item on CC ENMOD, the case should be worked following normal duplicate return procedures. See the table below for the TRNS36 Transcript Tool category and the description on how the history item is displayed.

    Category History Item IRM Reference
    International INTRNTNAL Review case to determine any additional actions.
    CP05A CP05A IRM 25.23.4.7.2, TIN Related Problem Cases with Previous IVO Involvement
    IDT1 IDT1 IRM 21.6.2, Adjusting TIN-Related Problems
    IVO IVO IRM 25.23.4.7.2, TIN Related Problem Cases with Previous IVO Involvement
    IDT3 IDT3 IRM 21.6.2, Adjusting TIN-Related Problems
    Prior Actions PRIORACT Review case to determine any additional actions.
    FS Changes FSCHANGE IRM 21.6.1.4, Filing Status Change Procedures
    Refund Schemes RFNDSCHEME IRM 25.23.4.7.4, TIN-Related Problems for IRP Data and Refund Scheme Case Processing
    AUR AUR IRM 21.6.7.4.6, Adjustment Considerations
    Deceased DECEASED IRM 25.23.4.7.3, TIN Related Problem Cases with Deceased Taxpayer Indicators
    Mixed Period MIXEDPRD IRM 21.6.7.4.2.7.1, Mixed Periods
    Refund/Balance Due Match REFBDMATCH Review case to determine any additional actions.

21.6.7.4.4.2  (07-17-2015)
Unnumbered Form 1040X, Subsequent Return or Unnumbered Subsequent Return

  1. Unnumbered Form 1040X or subsequent return meeting Adjustment Function Criteria (AFC) may be directly routed or hand carried to AM. Refer to IRM 3.11.6, Data Processing (DP) Tax Adjustments, for additional information.

  2. Code and Edit function and/or Submission Processing (SP), Correspondence Imaging System (CIS) Image Control Team (ICT) inputs a TC 971 AC 010 on these cases.

    • A TC 977 with Document Code 77 generates indicating a return is "in house."

    • The -A freeze will generate on the account.

    • Input the appropriate adjustment or TC 290 .00 to release the -A freeze (which will set when the TC 971 AC 010 posts).

      Note:

      AM employees MUST use the Integrated Automations Technologies (IAT) tools, as mandated in Exhibit 21.2.2-2, Accounts Management Mandated IAT Tools, to input adjustment of tax, penalty, interest and the release of freeze codes. Refer to IRM 21.2.2.4.4.14, Integrated Automation Technologies, for more information.

  3. Process these returns in the same manner as duplicate or amended returns received with a TRNS36 or TRNS29.

  4. Input the appropriate TC 971 code when rerouting misdirected Forms 1040X or subsequent returns. See Document 6209, Chapter 8C, Section 9, TC 971 Action Codes, and IRM 21.5.1.4.8, Transaction Code 971.

21.6.7.4.4.3  (10-01-2011)
Preliminary Verification Procedures

  1. Compare the duplicate, amended or subsequent return with the TRNS36 notice or CC TXMOD. Note any discrepancies in the:

    • Document Locator Number (DLN)

    • Year

    • Name

    • TIN

    • Address

    • Filing Status

  2. Review the case for any missing forms and schedules. Follow procedures in IRM 21.5.3.4, General Claims Procedures, for numbered and unnumbered claims when information is missing.

21.6.7.4.4.4  (10-01-2015)
Entity Verification

  1. Compare the subsequent return's entity with the posted account information.

    If Then
    Entity does not match Search for any other TIN or names entered on the return.
    Another TIN is found
    1. Use CC NAMES, CC INOLE, or CC ATINQ to locate the correct account.

    2. Request CC IMFOL for any newly found TIN.

  2. Compare the address, filing status and exemptions. Follow procedures in IRM 3.13.5.45, Updating Address Records and IRM 21.6.1, Filing Status and Exemption Adjustments, for Entity corrections. To verify the correct zip code for a taxpayer, refer to IRM 3.13.5.61, Researching Addresses Using United States Postal Service (USPS) Web Page.

    Caution:

    Exercise caution when correcting addresses shown on copies of returns and amended return, since they may reflect an old address.

  3. If a new address is shown on the subsequent return and CC ENMOD does not reflect the change, then update the entity with the new address. Research the entire account for any indication of identity theft before making any address updates.

    Caution:

    Do not update the address if an address change has posted after Form 1040X was filed. Any refund or correspondence will be sent to the new address.

21.6.7.4.4.5  (10-01-2002)
Income, Tax, Deductions, and Credits Verification

  1. Follow procedures in IRM 21.5.3.4.5, Math and Master File Verification of Claims and Amended Returns.

21.6.7.4.5  (10-01-2015)
Multiple Uses of Taxpayer Identification Numbers - TRNS36F (DUPTIN Filing Condition)

  1. A multiple (DUPTIN) filing condition occurs when the same TIN is used as a primary taxpayer on one return and a secondary taxpayer on another return for the same tax year. These cases will have an open control to Brookhaven or Philadelphia only. If there is no open control and the account contains a TC 971 AC 151 with a TC 570 holding the refund, follow the procedures in (16) below.

  2. When a DUPTIN filing condition occurs, Master File will post the second return and:

    • The TRNS36F, is an electronic transcript and will be assigned through CIS.

    • TRNS36F are displayed on Service Notice Information Program (SNIP).

    • Freeze any overpayment on the second return with a TC 570 (-R freeze).

    • Post a TC 971 AC 151 to indicate there is a multiple TIN filing condition. The primary TIN from the X-Ref return will be reflected in the TC 971.

    Note:

    When working CIS cases, refer to IRM 21.5.1.5, Correspondence Imaging System, for additional information.

  3. Telephone assistors should advise taxpayer they should respond to the Letter 31C, Duplicate Returns Filed; Explanation Requested. Once taxpayers have responded to the letter, they should hear something within 30 - 45 days.

  4. Below are definitions for use when working TRNS36F transcripts:

    • DUPTIN return is the return that posted second and generates the TRNS36F

    • X-Ref return is the return that posted first

    • Common taxpayer is the taxpayer found on both returns

      Note:

      This taxpayer will always be referred to as the common taxpayer even when discussing their separate return (primary filer).

    • Primary taxpayer is the taxpayer who filed the joint return with the common taxpayer.

  5. There are two scenarios involved when working DUPTIN Filing Conditions.

    • Scenario 1 - DUPTIN return is filing status (FS) 1 (Single), 3 (Married Filing Separate), or 4 (Head of Household)

    • Scenario 2 - DUPTIN return is FS 2 (Married Filing Joint) or 6 (Married Filing Joint and your spouse cannot be claimed as a dependent on another person's return)

  6. When working TRNS36F cases, it may be necessary to follow procedures in other IRM sections such as IRM 21.3.3.4.9.2, Campus Collection Function Correspondence/Inquiry/Notice, IRM 21.5.1, General Adjustments, IRM 21.6.1, Filing Status and Exemption Adjustments, IRM 21.6.2, Adjusting TIN-Related Problems, IRM 3.21.263, IRS Individual Taxpayer Identification Number (ITIN) Real Time System (RTS), and IRM 25.6, Statute of Limitations.

    Note:

    When referring a case to other areas, ensure that all relevant documents have been scanned and attached and that all actions taken on the case have been recorded on Correspondence Imaging System (CIS).

    Caution:

    Be sure to research both accounts to determine international involvement which may include but is not limited to:
    DLNs
    Addresses
    Forms
    Location Code

  7. The DUPTIN case is controlled on IDRS/Correspondence Imaging System (CIS) and assigned for review. The control base should be established on the Common Taxpayer's TIN (DUPTIN) and should remain open until:

    • The "-R" freeze is released, or

    • The case is referred to the appropriate area

  8. The release of the "-R" freeze allows the computer to generate a refund or offset credits.

    Note:

    If TRNS36F is on an invalid SSN, DO NOT release the refund unless the taxpayer responded to CP 54B.

  9. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    Accounts with category code "CRIM" that do not have one of the above freeze codes, may be worked by AM employees.

  10. If at any point the taxpayer provides documentation that states fraud or forgery, or the taxpayer gives an indication of fraud or forgery, refer the case to Exam following instructions in IRM 21.6.1.4.7 (3), Claims of Married Filing Jointly or Married Filing Separately to Single or Head of Household Where Joint Election is Invalid. Use the "CAT-A Other" option on CIS.

  11. If there is any indication the taxpayer is in a combat zone and the TRNS36F is the only issue, release the -R freeze and take no further action. If working case through CIS, follow the current CIS Updates to reassign CIS case to designated employee per local procedures for -C/-G/-I freezes. See IRM 21.5.1.5, Correspondence Imaging System (CIS).

    Exception:

    Do not release the -R freeze when there is an indication of mixed period, mixed entity or identity theft involvement.

    Note:

    If the account indicates the taxpayer exited the combat zone, the combat indicator on CC IMFOLE must be a "2" before any action can be taken.

  12. When there is an indication on the account of Automated Underreporter (AUR) involvement (TC 922) and the case meets ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , manually input a TC 971 AC 151 on the X-Ref account that has the TC 922 on the module, by using CC REQ77. Inputting the TC 971 AC 151 is an indication to AUR to close their case.

    Note:

    If AUR process code is pending (PN) on the account, input the TC 971 AC 151 with posting delay 1.


    When the TC 922 is located on the tax module, locate the Process Code. Follow the table below for routing the case:

    If Then
    1. Process Code below 55

    2. TC 971 AC 151 was input

    3. Exam criteria is met

    Forward case to Exam. Exam will accept case before AUR inputs their closing code.
    1. Process code 55 and above

    2. TC 971 AC 151 was input

    3. Exam Criteria is met

    Hold case until AUR inputs closing code and then forward case to Exam. On Process Codes 55 and above AUR has sent out a notice to the taxpayer concerning underreported income. AUR has to wait for response before inputting Process Code to close.

    Note:

    AUR closing code must be present prior to routing to Exam.


  13. Input CC ESTAB to request the return posted on the DUPTIN only if necessary. For a list of when a return is necessary refer to IRM 21.6.7.4.4.1 (4), TRNS36 - Control. Use the table if unable to secure a return:

    If Then
    The return is charged out to another area Contact the area to determine the actions to be taken.
    Unable to secure the return
    1. If unable to secure the return after the two previous requests, input a third request as "Special Search" using Form 2275, Records Request, Charge and Recharge

    2. Send a Letter 418C, Amended/Original Return Unavailable; Copy Requested, to the taxpayer.

      Note:

      Exhaust all in-house means to secure the return before contacting the taxpayer.

    3. Suspend the case for 40 days; 70 days for overseas taxpayers.

    No reply to Letter 418C, Amended/Original Return Unavailable; Copy Requested
    1. Assess the amount of any payment received with the return on the X-Ref SSN.

    2. If there is a credit on the module, transfer the credit following instructions in IRM 21.2.4.3.10, Applying Unresolved Credits

    .
  14. AM will work each TRNS36F up to the point that it is determined that the case's category code is procedurally required to be changed to one which would move the case to another area. This means that work with TIN-related problems such as identity theft, scrambled SSN's, IVO involvement or no merges should be routed to the appropriate area. Before transferring the case to another area to complete, notate your research on CIS (e.g., “Researched CC TRDBV, CC IRPTRL and CC IMFOL”). If the taxpayer is due a refund, perfect the entity information if needed and release the refund.

    Note:

    If a determination is made that a case should be re-categorized (e.g., to IDT1, IDT3, SCRM, etc.), DO NOT send Letter 31C or any other type of correspondence.

  15. AM employees who have access to the Integrated Automation Technology (IAT) TRNS36F tool are required to use the tool. The tool will assist in making adjustments, combining returns, separate to joint, sending letters and inputting required transaction codes when necessary. This tool performs unpostable checks and ensures use of appropriate codes, amounts and dates to prevent unpostables.

  16. When researching a joint return and a TC 971 AC 151 with a TC 570 has posted on the account, additional research needs to be completed. Take the following actions to resolve the account:

    If And Then
    TC 971 AC 151 with TC 570 is posted on a joint account Research of the secondary SSN shows:
    • there is no open control base with category code "C36F" ,

    • there is no return posted on Master File (per CC IMFOLT), and

    • CC TRDBV shows a return was received that was deleted or voided by Submission Processing

    • or CC TRDBV and CC IMFOL shows a return posted with MFT 32

    1. Do not forward a Form 4442 to Brookhaven AM

    2. Verify the information on the joint return

    3. Input a TC 571 (using CC REQ77) on the joint account to release the refund

21.6.7.4.5.1  (01-30-2014)
TRNS36F Entity Verification

  1. Review both the DUPTIN and X-Ref return by using the appropriate command codes to verify if the name of the Common Taxpayer matches on both returns. Examples:

    • Jane Smith and Jane Smith - matches

    • Jane E Smith and Jane A Smith - does not match

    • Jane Smith and J Smith - does not match

    • Kathy Smith and Kathleen Smith - does not match

    • Kathy Smith and Cathy Smith - does not match

  2. If the Common Taxpayer's name does not match see IRM 21.6.2, Adjusting TIN-Related Problems, unless there is a clear indication there is only one taxpayer involved.

  3. If the Common Taxpayer's name does match then determine if Scenario 1 or Scenario 2 exist and follow procedures below in IRM 21.6.7.4.5.3, DUPTIN Return is FS 1/3/4 (Scenario 1) X-Ref Return is FS 2/6; IRM 21.6.7.4.5.4, DUPTIN Return is FS 2/6 (Scenario 2) X-Ref Return is FS 1/3/4; and IRM 21.6.7.4.5.5, DUPTIN is FS 2/6 (Scenario 2) X-Ref Return is FS 2/6.

21.6.7.4.5.2  (05-16-2016)
Telephone Inquires Regarding TRNS36F

  1. If there is a TC 971 AC 151 on the DUPTIN module and you receive a telephone contact regarding the case, follow the chart below:

    If Then
    The call is regarding a refund and this is the first contact
    1. Do not complete a Form 4442.

    2. Advise the caller they will be receiving a letter and they must complete the questionnaire and return it to the address on the notice.

    Note:

    Do not release any freeze conditions on the account.

    45 days have passed since the first contact and a letter has not been issued to the caller
    1. Complete a Form 4442/e-4442, Inquiry Referral, and fax it to the site with the TRNS36F control, or attach to the Correspondence Imaging System (CIS) case if you have CIS access. See IRM 21.3.5.4.2.1.1, Preparing an e-4442, for additional information.

    2. Advise the caller they should be receiving a letter within 30 days and they must complete the questionnaire and return it to the address on the notice.

    Note:

    Do not release any freeze conditions on the account.

    If more than 30 days have passed from the Form 4442 referral date and taxpayer has not received a letter Taxpayer meets TAS Criteria, refer to the procedures in IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, to determine if referral to TAS is appropriate.

    Note:

    Do not release any freeze conditions on the account

    The caller states they are a victim of identity theft
    1. Complete a Form 4442/e-4442, Inquiry Referral, and fax it to the site with the TRNS36F control, or attach to the CIS case if you have CIS access. See IRM 21.3.5.4.2.1.1, Preparing an e-4442, for additional information.

    2. Advise the caller to send a copy of one or more valid U.S. Federal or State Government - issued forms of identification (such as a social security card, passport, driver's license, or state identification card, etc.), and a copy of a police report, or a Form 14039, IRS Identity Theft Affidavit.

    3. Input a TC 971 AC 522 on CC ENMOD with PNDCLM. For additional information on TC 971 IDT indicators, refer to IRM 25.23.2.17, Initial Allegation or Suspicion of Tax-Related identity Theft - Identity Theft Indicators.

    Note:

    Do not release any freeze conditions on the account.

    The caller states an incorrect SSN was used on the return Complete a Form 4442/e-4442, Inquiry Referral, and fax it to the site with the TRNS36F control or if using Correspondence Imaging System (CIS) notate all remarks in the history section. See IRM 21.3.5.4.2.1.1, Preparing an e-4442.

    Note:

    Do not release any freeze conditions on the account.

    The case has been closed and the R freeze has not been released
    1. Do not release the freeze.

    2. Prepare a Form 4442/e4442, Inquiry Referral, and forward to the area that last had the case.

    Note:

    If Brookhaven AM referred the TRNS36F case to another area i.e. EXAM, ID Theft/MXEN route the Form 4442 to that appropriate area.

    TC 971 AC 151 with a TC 570 on the account and no open control Refer to IRM 21.6.7.4.5 (16), Multiple Uses of Taxpayer Identification Numbers - TRNS36F (DUPTIN Filing Condition), for additional information.

21.6.7.4.5.3  (10-01-2016)
DUPTIN Return is Filing Status 1/3/4 (Scenario 1) X-Ref Return is Filing Status 2/6

  1. Follow the procedures below when working cases where the DUPTIN on a FS 1/3/4 return has already been used as a secondary TIN on a joint return for the same tax period.

  2. Correspond with the Common Taxpayer using Letter 31C, Duplicate Returns Filed; Explanation Requested.

    Note:

    If a determination is made that a case should be re-categorized (e.g., to IDT1, IDT3, SCRM, etc.), DO NOT send Letter 31C or any other type of correspondence.

    Exception:

    If Form 1040X, Amended U.S. Individual Income Tax Return, is received before the Letter 31C is mailed to the common taxpayer, or is received from the common taxpayer or the primary taxpayer on a joint return and based on the actions, resolves the TRNS36F issue, then use the form to adjust the account. Do not send the Letter 31C. Take all actions that are required to correct the account. If the taxpayer is changing the filing status on a statute return, refer to IRM 25.6.1.5, Basic Guide for Processing Cases with Statute of Limitations Issues, for additional information. For more information on filing status changes refer to IRM 21.6.1.3, Filing Status Research, IRM 21.6.1.4.5, Joint to Separate, Single, or Head of Household Procedures, or IRM 21.6.1.4.7, Joint Election is Invalid or Filed with Incorrect Status.

    Note:

    Correspondence should be sent to both addresses as shown on the DUPTIN and the X-Ref return if different. Correspondence should be addressed to the Common Taxpayer only.

  3. Suspend the case for 40 days; 70 days for overseas taxpayers that meet international criteria, refer to IRM 21.8.1.1.15, International Forms Processing.

  4. If Correspondence Exam selects the case (one return will be joint and the other a non-joint return), the case file should contain the taxpayer’s response to AM to assist Exam with working these cases.

  5. If a reply is received, or the suspense period has expired, follow the table below:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net tax increase/credit decrease) must be at least ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ remaining. Do not send tax decreases or credit increases to Exam; AM has the authority to work these cases.
    If the correct return is filed as married filing separately and itemized deductions are taken, when refiguring the married filing joint return to verify if it meets Exam’s criteria, the itemized deductions must be considered. If no reply, do not change the method used.

    Note:

    Do not send cases to Exam if the taxpayer is from Puerto Rico and the issue is self employment (SE) tax. Refer the case to Philadelphia IMF International since the case meets international criteria. Refer to IRM 21.8.1.1.15, International Forms Processing

    .

    Note:

    If the required case action is to back out FS 1/3/4, refer to IRM 21.6.1.4.3.1, Separate to Joint and Both Taxpayers Previously Filed; IRM 21.6.1.6.2, Command Code DDBCK; and IRM 21.5.2.4.23.10, Moving Refunds, for additional information.

    If And Then
    Reply indicates the common taxpayer filed both returns The X-Ref return, filing status (FS) 2/6, is the correct filing
    1. Refer to IRM 21.6.1.4.3.1, Separate to Joint and Both Taxpayers Previously Filed, and IRM 21.6.1.6.2, Command Code DDBCK, for additional information.

    2. If all the income from the FS 1/3/4 is reported on the FS 2/6, back out the FS 1/3/4 return on the common taxpayer SSN. If refund was issued on the FS 1/3/4, move the refund to the joint return. Notify the taxpayer of the action taken on the account by using a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If any of the income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures, see IRM 21.6.7.4.5.3 (5) above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the FS 1/3/4 return. Use the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained, to notify the taxpayer of the actions taken on the account and inform the taxpayer that a Form 1040X, Amended U.S. Individual Income Tax Return, must be filed if changes are needed to the FS 2/6 return.

    Reply indicates the common taxpayer filed both returns The DUPTIN return (FS 1/3/4) is the correct filing and was filed prior to the due date or filed after the due date and the common taxpayer has provided documentation to support the marriage was not legal for federal tax purposes, refer to IRM 21.6.1.4.7 (3), Joint Election is Invalid or Filed with Incorrect Status, for additional information.
    1. Refer the primary taxpayer on the joint return to Exam (CAT-A Other) for deficiency procedures, per IRM 21.6.7.4.5.3 (5) above.

      Note:

      If the primary taxpayer on the joint return filed an amended return which was disallowed, reconsider/re-examine the amended return based on the action being taken on the common taxpayer.

    2. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the spouse’s name and TIN from the account. Do not change any tax or credits on the return.

    3. Release the refund on the FS 1/3/4.

    4. If the refundable or non-refundable credits on the joint return belong to the common taxpayer, erroneous refund procedures should be researched. Refer to IRM 21.4.5.4, Erroneous Refund Categories and Procedures, for additional information. For a list of refundable and non-refundable credits refer to IRM 21.6.3.4.1, Non-Refundable Credit Procedures, and IRM 21.6.3.4.2, Refundable Credits.

    5. Send a letter to the primary taxpayer on the joint return stating the filing status was changed because our records indicate the incorrect filing status was used on the return. Inform the taxpayer a Form 1040X,Amended U.S. Individual Income Tax Return, may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    Reply indicates the common taxpayer filed both returns The DUPTIN return (FS 1/3/4) is the correct filing but was filed after the due date
    1. Compare return information to verify if all income reported on the DUPTIN return was reported on the joint return.

    2. If all income was reported, disallow the claim in full, refer to IRM 21.6.1.4.5, Joint to Separate, Single, or Head of Household Procedures, and send Letter 105C, Claim Disallowed. Back out the DUPTIN return.

    3. If not all income was reported, the joint return must be assessed using deficiency procedures. Refer the case to Exam as a "CAT-A Other" , see IRM 21.6.7.4.5.3 (5) above.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the FS 1/3/4 return. If a refund was issued on the FS 1/3/4, move the refund to the joint return. For additional information refer to IRM 21.5.2.4.23.10, Moving Refunds. Notify the taxpayer by using the Letter 105C, Claim Disallowed, the FS 1/3/4 was not accepted.

    Reply indicates common taxpayer did not file one of the returns The FS 2/6 return is not valid
    1. Follow procedures in IRM 21.6.1.4.7, Joint Election is Invalid or Filed with Incorrect Status, if the taxpayer indicates fraud or forgery.

    2. If the taxpayer does not indicate fraud or forgery, and does not meet the criteria for Exam as stated in IRM 21.6.7.4.5.3 (5) above, release the refund on the FS 1/3/4 return.

    3. Change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the spouse’s name and TIN from the account. Do not change any tax or credits on the return. If the credits on the joint return belong to the secondary taxpayer, erroneous refund procedures may need to be followed. Refer to IRM 21.4.5.4, Erroneous Refund Categories and Procedures, for additional information. For a list of refundable and non-refundable credits refer to IRM 21.6.3.4.1, Non-Refundable Credit Procedures, and IRM 21.6.3.4.2, Refundable Credits.

    4. If any of the FS 1/3/4 refund was applied to the joint return due to a balance due return, reverse the offsets.

    5. Send a letter to the primary taxpayer on the joint return stating the filing status was changed because our records indicate the incorrect filing status was used the return. Inform the taxpayer that a Form 1040X,Amended U.S. Individual Income Tax Return, may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    Note:

    If the primary taxpayer on the joint return filed an amended return which was disallowed, reconsider/re-examine the amended return based on the action being taken on the common taxpayer.

    Reply indicates common taxpayer did not file the FS 1/3/4 but the return matches IRP data The income on the FS 1/3/4 matches the information on CC IRPTR.
    1. Send a letter advising the taxpayer to file a Form 14039, Identity Theft Affidavit, and return it within 40 days. Leave the control base open.

      • If Form 14039 is received within 40 days indicating identity theft, follow the procedures in IRM 21.6.7.4.4.1, TRNS36 - Control, and route the case to identity theft.

    2. If the Form 14039 is not received within 40 days, follow the procedures below:

      • Compare the data on the FS 1/3/4 return to the joint return to verify income/withholding is reported

      • If all income is reported, back out the FS 1/3/4 and notify the taxpayer of all actions taken by using a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If all income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures, see IRM 21.6.7.4.5.3 (5) above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the return. If refund was issued on the FS 1/3/4, move the refund to the joint return. Use the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained, to notify the taxpayer of the actions taken on the account and inform the taxpayer that a Form 1040X, Amended U.S. Individual Income Tax Return, must be filed if changes are needed to the FS 2/6 return.

    Reply indicates common taxpayer did not file one of the returns The taxpayer has no knowledge of one of the returns. It appears 2 taxpayers are using the same SSN and may be a victim of ID Theft. Transfer the case to identity theft by following the procedures in IRM 21.6.7.4.4.1, TRNS36 - Control.
    No reply from common taxpayer, or no signature on Letter 31C Return was timely filed
    1. Compare the data on the FS 1/3/4 return to the joint return to verify income/withholding is reported

    2. If all income is reported, back out the FS 1/3/4 and notify the taxpayer of the actions taken on the account by sending the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If any of the income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures; see IRM 21.6.7.4.5.3 (5) above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures:

      • Change the filing status on the FS 2/6 to FS 1/3/4.

      • Remove the spouse’s name and TIN from the return. Do not change any tax or credits on the return.

      • Send a letter to the primary taxpayer stating the filing status has been changed due to information received and a Form 1040X may need to be filed.

    Note:

    If the primary taxpayer on the joint return filed an amended return which was disallowed, reconsider/re-examine the amended return.

    No reply from common taxpayer, or no signature on Letter 31C Return was filed after the due date
    1. Compare the data on the FS 1/3/4 return to the joint return to verify income/withholding is reported

    2. If all the income is reported, back out the FS 1/3/4 and notify the taxpayer of the actions taken on the account by sending the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If not all income was not reported, back out the FS 1/3/4 return completely, and send the Letter 916C, Claim Incomplete for Processing; No Consideration.

      Note:

      If the primary taxpayer on the joint return filed an amended return which was disallowed, reconsider/re-examine the amended return.

    Caution:

    It is extremely important that you carefully review for the Assessment Statute Expiration Date (ASED),and the Refund Statute Expiration Date (RSED). Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

  6. If taxpayer does not respond (no reply) or no signature on the Letter 31C, and the common taxpayer has made payments on the account, compare the data on the FS 1/3/4 to the FS 2/6 to verify income/withholding is reported. Follow the table below to resolve the cases:

    IF THEN
    Income is reported on the FS 2/6
    1. Back out the FS 1/3/4. Refer to IRM 21.6.1.4.3.1, Separate to Joint and Both Taxpayers Previously Filed, and IRM 21.6.1.6.2, Command Code DDBCK, for additional information.

    2. Send Letter 673C, informing the taxpayer of the actions taken on the account.

    Income is not reported on the FS 2/6
    1. Thorough research should be completed to determine the taxpayer’s intent.

    2. Research tax years prior and after the tax year of the case.

    3. If the income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures; see IRM 21.6.7.4.5.3 (5) above. Do not back out the FS 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, and the taxpayer has made payments on the FS 1/3/4:

      • Change the filing status on the FS 2/6 to FS 1/3/4.

      • Remove the spouse’s name and TIN from the return. Do not change any tax or credits on the return.

      • Send a letter to the primary taxpayer stating the filing status has been changed due to information received and a Form 1040X may need to be filed.

      • Do not back out the FS 1/3/4 return.

21.6.7.4.5.4  (10-01-2016)
DUPTIN Return is Filing Status 2/6 (Scenario 2) X-Ref Return is Filing Status 1/3/4

  1. Follow the procedures below when working cases where the DUPTIN Return is FS 2/6 (Scenario 2) and has already been used as a primary TIN on a FS 1, 3, or 4 return for the same year.

  2. Correspond with the common taxpayer using Letter 31C, Duplicate Returns Filed; Explanation Requested.

    Note:

    If a determination is made that a case should be re-categorized (e.g., to IDT1, IDT3, SCRM, etc.), DO NOT send Letter 31C or any other type of correspondence.

    Exception:

    If Form 1040X, Amended U.S. Individual Income Tax Return, is received before the Letter 31C is mailed to the common taxpayer, or received from the common taxpayer or the primary taxpayer on a joint return and based on the actions, resolves the TRNS36F issue, then use the form to adjust the account. Take all actions that are required to correct the account. If the taxpayer is changing the filing status on a statute issue, refer to IRM 25.6.1.5, Basic Guide for Processing Cases with Statute of Limitations Issues, for additional information. For more information on filing status changes refer to IRM 21.6.1.3, Filing Status Research and IRM 21.6.1.4.5, Joint to Separate, Single, or Head of Household Procedures.

    Note:

    Correspondence should be sent to both addresses as shown on the DUPTIN and X-Ref return if different. Correspondence should be addressed to common taxpayer only.

  3. Suspend the case for 40 days; 70 days for overseas taxpayers that meet international criteria. Refer to IRM 21.8.1.1.15, International Forms Processing.

  4. If Correspondence Exam selects the case, (one return will be joint and the other return a non-joint return) the case file should contain the taxpayer’s response to AM to assist Exam with working these cases.

  5. If a reply is received, or the suspense period has expired, follow the table below:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net tax increase/credit decrease) must be at least ≡ ≡ ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ ≡ remaining. Do not send tax decreases or credit increases to Exam, AM has the authority to work these cases. Do not send cases to Exam if the taxpayer is from Puerto Rico and the issue is Self Employment (SE) Tax. Refer these cases to Philadelphia IMF International since these cases meet international criteria. Refer to IRM 21.8.1.1.15, International Forms Processing, for additional information.
    If the correct return is filed as married filing separately and itemized deductions are taken, when refiguring the married filing joint return to verify if it meets Exam’s criteria the itemized deductions must be considered. If no reply, do not change the method used.

    Note:

    If the required case action is to back out FS 1/3/4, refer to IRM 21.6.1.4.3.1, Separate to Joint and Both Taxpayers Previously Filed, IRM 21.6.1.6.2, Command Code DDBCK, and IRM 21.5.2.4.23.10, Moving Refunds, for additional information.

    If And Then
    Reply indicates the common taxpayer filed both returns FS 2/6 DUPTIN return is the legally valid filing and the statute for filing a joint election has not expired

    Note:

    If the taxpayer wants to change the filing status of a legally filed FS 2/6 return, an amended return will have to be filed.

    1. Refer to IRM 21.6.1.4.3.1, Separate to Joint and Both Taxpayers Previously Filed, and IRM 21.6.1.6.2, Command Code DDBCK, for additional information.

    2. Back out FS 1/3/4 return on the common taxpayer SSN if all the income is reported on the joint return. If the taxpayer received a refund move the refund to the joint return. Refer to IRM 21.5.2.4.23.10, Moving Refunds, for additional information. Notify the taxpayer of the action taken on the account by using a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If income on FS 1/3/4 was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures per IRM 21.6.7.4.5.4 (5) above. Do not back out the 1/3/4 return.

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the FS 1/3/4, and move the refund to the joint return. Notify the taxpayer by using a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained, that a Form 1040X, Amended U.S. Individual Income Tax Return, should be filed if changes are needed to the FS 2/6 return.

    Reply indicates common taxpayer filed both returns The FS 2/6 DUPTIN return is the legally valid filing, but was filed after the statute for filing a joint election expired, and one taxpayer has not previously filed
    1. Compare the income on the joint return to the income on the separate return. If there is income on the joint not reported on the FS 1/3/4, verify if it meets 25% or more omission and ≡ ≡ ≡ ≡ ≡ ≡ or more net tax increase/decrease. If it does meet the 25% omission and the ≡ ≡ ≡ ≡ ≡ or more refer to Exam.

    2. If the joint return meets the threshold for deficiency procedures per IRM 21.6.7.4.5.4 (5) above, refer to Exam (CAT-A Other).

    3. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate, unless additional information supports another filing status. Remove the spouse’s name and TIN from the return. Do not change any tax or credits on the return.

    4. Send the Letter 105C informing the primary taxpayer the joint return has been disallowed and the filing status has been changed because our records indicate the incorrect filing status was used. Refer to IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures, for additional information. Inform the taxpayer that a Form 1040X, Amended U.S. Individual Income Tax Return may need to be filed. Release the refund on the joint account.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    Reply indicates the common taxpayer filed both returns. The FS 1/3/4 X-Ref return is the legally valid filing and the FS 2/6 return is not a legally valid return.

    Caution:

    If the common taxpayer states married or filed a MFS return, the FS 2/6 return filed becomes the legally valid filing since the taxpayer has three years to make this election, then follow procedures in Box 1.

    1. Refer the primary taxpayer to Exam (CAT-A Other) for deficiency procedures per IRM 21.6.7.4.5.4 (5) above.

    2. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the spouse’s name and TIN from the joint return. Do not change any tax or credits on the return.

    3. Send a letter to the primary taxpayer on the joint return notifying the filing status was changed because our records indicate the incorrect filing status was used on the return. Inform the taxpayer that a Form 1040X, Amended U.S. Individual Income Tax Return, may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    4. When changing a joint return to a FS3, research the account to verify if any offsets from the spouse’s returns were made to pay on the balance due. If there are offsets, reverse and place back on the spouse’s account to refund.

    Reply indicates the common taxpayer did not file the FS 1/3/4 return It appears multiple individuals are using the same TIN Refer to IRM 25.23.4.4, Multiple Individuals Using the Same TIN

    Note:

    If you can determine through preliminary research the joint return is the good return, and the income reported matches IRPTR, release the -R freeze on the joint return. Continue to follow the procedures above for the FS 1/3/4. The joint return is not needed as part of the preliminary research if the refund has been released. If you cannot make a clear determination that the joint return is good, do NOT release the -R freeze and continue to follow the procedures in IRM 25.23.4.4, Multiple Individuals Using the Same TIN.

    Reply indicates common taxpayer did not file the FS 1/3/4 The income on the FS 1/3/4 matches the information on CC IRPTR
    1. Send a letter advising the taxpayer to file a Form 14039, Identity Theft Affidavit, and return it within 40 days. Leave the control base open.

      • If Form 14039 is received within 40 days indicating identity theft, follow the procedures in IRM 21.6.7.4.4.1 (11), TRNS36 - Control, and route the case to identity theft.

    2. If the Form 14039 is not received within 40 days, then follow the procedures below:

      • Compare the data on the FS 1/3/4 return to the joint return to verify income/withholding is reported

      • If all income is reported, back out the FS 1/3/4 and move the refund, if present, to the joint return. Notify the taxpayer of the actions taken on the account by using a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    3. If all income on the FS 1/3/4 return was not reported on the FS 2/6 return, refer the case to Exam for deficiency procedures; see IRM 21.6.7.4.5.4 (5) above. Do not back out the FS 1/3/4 return

    4. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, back out the FS 1/3/4 and move the refund if present to the joint return. Use the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained, to notify the taxpayer of the actions taken on the account and inform the taxpayer that a Form 1040X, Amended U.S. Individual Income Tax Return, must be filed, if changes are needed to the FS 2/6 return.

    Reply indicates the common taxpayer did not file the DUPTIN FS 2/6 return The FS 2/6 return is not valid
    1. Follow procedures in IRM 21.6.1.4.7, Joint Election is Invalid or Filed with Incorrect Status, if the taxpayer indicates fraud or forgery.

    2. If the taxpayer does not indicate fraud or forgery, and/or the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, as stated in IRM 21.6.7.4.5.4 (5) above. Change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the spouse’s name and TIN from the joint return. Do not change any tax or credits on the return.

    3. When changing a joint return to a FS3, research the account to verify if any offsets from the spouse’s returns were made to pay on the balance due. If there are offsets, reverse and place back on the spouse’s account to refund.

    4. Release the refund on the FS 2/6 unless the refund statute has expired. If the statute has expired, transfer the refund to excess.

    5. Send a letter to the primary taxpayer on the joint return stating the filing status was changed because our records indicate the incorrect filing status on the return. Inform the taxpayer that a Form 1040X, Amended U.S. Individual Income Tax Return, may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    Reply indicates the common taxpayer did not file the DUPTIN FS 2/6 return The taxpayer has no knowledge of the FS 2/6 return. It appears 2 taxpayers are using the same SSN and could be a victim of ID Theft. Transfer the case to identity theft by following the procedures in IRM 21.6.7.4.4.1, TRNS36 - Control.
    No reply from common taxpayer or no signature on Letter 31C The statute has or has not expired
    1. Compare the income on the joint return to the income on the separate return.

    2. If the common taxpayer’s income on the joint return was not reported on separate return, refer the case to Exam for deficiency procedures per IRM 21.6.7.4.5.4 (5) above.

    3. If the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate unless additional information supports another filing status. Remove the spouse’s name and TIN from the joint return. Do not change any tax or credits on the return.

    4. If case does not meet deficiency procedures, release the refund.

    5. Send a letter to the primary taxpayer on the joint return stating the filing status was changed because our records indicate the incorrect filing status was used on the return. Inform the taxpayer that a Form 1040X, Amended U.S. Individual Income Tax Return, may need to be filed.

      Caution:

      In the letter, do not inform the primary taxpayer how the information was received to change the joint return.

    Caution:

    It is extremely important that you carefully review for a refund statute expiration date (RSED). Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

21.6.7.4.5.5  (10-16-2015)
DUPTIN is Filing Status 2/6 (Scenario 2) X-Ref Return is Filing Status 2/6

  1. Follow the procedures below when working cases where the same TIN is used as a primary TIN on a FS 2 or 6 return and as a secondary TIN on another FS 2 or 6 return for the same tax year:

    Note:

    When referring a case to Exam for deficiency procedures, the additional assessment (net tax increase/credit decrease) must be at least ≡ ≡ ≡ ≡ and the assessment statute expiration date (ASED) must have at least ≡ ≡ ≡ ≡ ≡ remaining. Do not send tax decreases or credit increases to Exam; AM has the authority to work these cases. Do not send cases to Exam if the taxpayer is from Puerto Rico and the issue is self employment (SE) Tax. Refer the case to Philadelphia IMF International since the case meets international criteria. See IRM 21.8.1.1.15, International Forms Processing for additional information.

    Note:

    If a determination is made that a case should be re-categorized (e.g., to IDT1, IDT3, SCRM, etc.), DO NOT send Letter 31C or any other type of correspondence.

    If And Then
    FS on DUPTIN return is 2/6 FS on the X-Ref return is 2/6 and taxpayers on both returns are the same (e.g. John and Mary Birchtree; Mary and John Birchtree)
    1. Compare figures on both returns to verify they are the same.

    2. If same, back out DUPTIN return.

    3. If figures are not the same, refer to IRM 21.6.7.4.13, Return for Each Form W-2 and/or Form 1099, to adjust the filing that posted first to include any unclaimed income, withholding, etc. shown on the second return.

    4. When comparing returns remember to check for additional exemptions. If needed, adjust the exemptions on the account.

    5. Input adjustment on account where second return posted to back it out; use Hold Code 4. For additional information on inputting adjustments, refer to IRM 21.6.7.4, Adjusting Individual Tax Accounts Procedures.

    6. Notify the taxpayer of the actions taken on the account by sending the Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained.

    FS on DUPTIN return is 2/6 FS on the X-Ref return is 2/6 and common taxpayers on both returns but with different spouses. (e.g. John and Mary Birchtree; Mary Birchtree and Bob Greenleaf)
    1. Correspond with the common taxpayer to determine if taxpayer filed both returns. Send Letter 31C, Duplicate Returns Filed; Explanation Requested.

    2. Send correspondence to both addresses as shown on the DUPTIN and the X-Ref returns, if different. Address correspondence to the common taxpayer only. Send correspondence under the common taxpayers SSN.

    3. If the taxpayer is due a refund, advise the refund will be held until the matter is resolved.

    4. Suspend the case for 40 days; 70 days for overseas taxpayers.

    Reply indicates common taxpayer did not file one of the returns One of the returns is not valid
    1. Follow procedures in IRM 21.6.1.4.7, Claims of Married Filing Jointly or Married Filing Separately to Single or Head of Household Where Joint Election is Invalid, if the taxpayer indicates fraud or forgery.

      Caution:

      If the additional assessment does not meet the deficiency criteria for fraud or forgery, follow #3 below.

    2. If the taxpayer does not indicate fraud or forgery, refer the primary taxpayer on the invalid return to Exam for deficiency procedures per (1) above.

    3. If the additional assessment does not the difference in net tax liability is below the threshold for referral to Exam for deficiency procedures, change the filing status on the joint return to married filing separate. Remove the common taxpayer’s name and TIN from the joint return.

    4. Send a letter to the primary taxpayer on the joint return notifying the filing status because our records indicate the incorrect filing status was used on the return. Inform the taxpayer that a Form 1040X, Amended U.S. Individual Income Tax Return, may need to be filed.

      Caution:

      In the letter, do not inform the taxpayer how the information was received to change the joint return.

    No reply from common taxpayer or no signature on Letter 31C Research indicates a mixed entity Follow procedures in IRM 21.6.2, Adjusting TIN-Related Problems. All cases determined to be Mixed Entity (MXEN) will be worked by employees who work duplicate filings.
    No reply from common taxpayer or no signature on Letter 31C and IDRS history indicates the correct spouse Research indicates the common taxpayer on both returns is the same person Refer both joint returns to Exam. Do not take into consideration the deficiency procedures in (1).
    Reply indicates common taxpayer did not file one of the returns The taxpayer has no knowledge of one of the returns. It appears two taxpayers are using the same SSN and may be a victim of ID Theft. Follow the procedures in IRM 21.6.7.4.4.1, TRNS36 - Control, to transfer the case to an identity theft specialized site.

    Caution:

    It is extremely important that you carefully review for a refund statute expiration date (RSED). Refer to IRM 25.6.1, Statute of Limitations Processes and Procedures, for additional information.

    Note:

    See IRM 4.13.2.2, Function Responsible and Routing Instructions for TC 300 Automated Substitute For Return (ASFR) Reconsideration cases.

21.6.7.4.6  (10-01-2015)
Adjustment Considerations

  1. Review the account for freeze conditions. Follow procedures in IRM 21.5.6, Freeze Codes, and Document 6209, Chapter 8A, Section 4, Master File Freeze Codes and IDRS Status 48, for the following items:

    • A list of freeze codes

    • A brief explanation of why they generate

    • Releasing freeze conditions

  2. If the taxpayer's response results in either a full or partial abatement of the AUR assessment on a married filing joint (MFJ) account, any refund generated by the abatement must be paid jointly to both spouses unless one or more TC 706 is present and all four of the following are true:

    • The TC 706 credit(s) offset from one of the spouses on the joint return, but that taxpayer is currently filing as a single or separate filer, or as a joint filer with a new spouse

    • No payment or credits other than a TC 706 posted to the account since the AUR assessment

    • In the case of partial abatements, all TC 706 credits offset from the same person

    • All TC 706 occurred less than two years before the date of the full or partial abatement
      If a TC 706 is present and all four of the above are true, move the applicable TC 706 credits back to the modules where they originated.

      Note:

      For additional information refer to IRM 21.4.6.4.1.1, Tax Offset Reversal.

      Example:

      Husband and wife file a joint return for 2010. AUR assessed an additional $800.00 on their 2010 joint liability. Taxpayers divorce, wife files a return for 2012 that claims a $500.00 overpayment and the husband doesn't file a 2012 return that would claim the overpayment. Due to the outstanding AUR assessment, the $500.00 overpayment is transferred in April 2013 to the MFJ tax liability for 2010. No other payments are made towards the MFJ 2010 return. Then in September 2013, a partial abatement of $400.00 for the 2010 AUR assessment. Because the 4 requirements above are met, move the $100.00 credit that results from the partial abatement back to the wife's 2012 account to prevent the credit from refunding on the joint return.

      Example:

      Husband and wife file a joint return for 2010. AUR assessed an additional $800.00 on their 2010 joint liability. Taxpayers divorce, wife files a return for 2012 that claims a $500.00 overpayment and the husband files a return for 2012 that claims $300.00 overpayment. Due to the outstanding AUR assessment, the $500.00 and the $300.00 overpayments are transferred in April 2013 to the MFJ tax liability for 2010. No other payments are made towards the MFJ 2010 return. Then in September 2013, the AUR assessment is completely backed out. Because all 4 requirements above are met, move the overpayments back to the original 2012 returns of the husband and wife before refunding; do not refund from the 2010 joint account.

  3. Use hold codes and priority codes when necessary.

  4. Use posting delay codes when necessary. Transactions may need to post later than others when multiple transactions are input. A posting delay code can be entered for 1 to 6 cycles.

  5. Notice Review may delete a refund and assign a case to AM because of a TC 976 or TC 977.

    1. Ensure the TC 841 ("P-" freeze) is posted.

    2. Input necessary credit transfers or adjustments after the TC 841 posts.

  6. Input a TC 170 for zero (.00) when decreasing withholding and/or transferring timely payments from the module and tax is also being adjusted when there is not a Computer Condition Code (CCC) "P" present.

  7. If a return is "U" coded during processing, the "U" coding will be displayed on CC TXMOD. Update the Return Processable Date (RPD) as applicable. Follow procedures in IRM 20.2.4.5.1, Updating the RPD on Unprocessible Returns.

  8. If the adjustment notice does not give a clear explanation and/or a notice will not be issued, provide the taxpayer with an explanation by telephone or letter. Follow procedures in IRM 21.5.4.4, Math Error Procedures Processing.

    Example:

    There is a difference between the taxpayers figures and the adjustment made.

  9. A refund for ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more will not systemically generate (TC 846). Do not input TC 290 for .00 to release the refund. A manual refund is required using Form 3753, Manual Refund Posting Voucher. Follow procedures in IRM 21.4.4.4.2, Preparation of the Form 3753, Manual Refund Posting Voucher, to prepare the manual refund. If the taxpayer submitted Form 8302, Electronic Deposit of Tax Refund of $1 Million or More, include it with Form 3753. Follow procedures in IRM 3.17.79.3.10.1, Form 8302, Electronic Deposit of Tax Refund of $1 Million or More.

21.6.7.4.7  (10-01-2016)
Interest and Penalty Considerations

  1. The computer assesses or abates Failure To File (FTF) or Failure To Pay (FTP) penalties according to interest and penalty adjustments made on the module, except when the penalties were manually assessed.

  2. The computer generates assessments and abatements of interest on all transactions.

    1. Usually, adjustments to interest are not necessary.

    2. Follow procedures in IRM 20.1, Penalty Handbook and IRM 20.2, Interest.

    3. The Desert Storm/Shield or Bosnia "-C" freeze no longer requires manual computation of interest and penalties.

      Note:

      Not all Combat Zone cases (-C Freeze) require manual computation of interest once the taxpayer exits the Combat Zone. Master File (MF) will resume interest once taxpayer exits if the account is not restricted. Follow procedures in IRM 20.1.2.1.2.1, Combat Zone - IRC 7508. If the account is subject to penalty, failure to pay (FTP) penalty requires manual computation if the taxpayer has exited the Combat Zone. Follow procedures in IRM 20.1.2, Failure to File/Failure to Pay Penalties.

    Note:

    Refer to the IRM 5.19.10.6.3, Combat Zone Freeze Code, for further information on freeze code for combat zone.

  3. Review amended returns for corrections to estimated tax (ES) penalty.

    1. ES penalty is based on the original TC 150 (minus EITC and Fuel Tax Credit).

    2. Correct the ES penalty if the adjustment is due to a "superseding" or a "Separate to Joint" case.

    3. Correspond with taxpayer, if a requested adjustment to penalty is not allowed.

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. Taxpayer may submit a recomputation of the penalty; math verify.

    If adjusting withholding and Then
    Module shows TC 170/171 with a Document Code 17, 18, 24, 47, 51, 52, or 54
    1. Review the ES penalty.

    2. Determine if the penalty should be adjusted. Refer to IRM 3.14.1.6.21.4.8, ES Penalty Computation, and IRM 3.14.1.6.21.4.9, ES Penalty Command Codes for additional information.

    Account has a posted TC 176 ES penalty recomputes systemically.

21.6.7.4.8  (10-01-2015)
Special Considerations

  1. Check for decedent refund returns.

    • These returns require special handling

    • Follow procedures in IRM 21.4.1.4.9.4, Deceased Taxpayers

  2. Check for statutes; see IRM 25.6, Statute of Limitations.

    Caution:

    Form 1040X may appear to request a tax decrease, however, when verified against posted data, the actual result may be a tax increase.

    1. Any claim received prior to the Refund Statute Expiration Date (RSED) is considered timely, even if taxpayer contact is necessary to perfect the claim.

    2. If a protective claim is received, follow procedures in IRM 21.5.3.4.7.3, Protective Claims.

  3. Review for credit-elect requests, offsets and reversals.

21.6.7.4.9  (10-01-2002)
Signature Verification

  1. Make sure the signature agrees with the entity. If the signature is a copy, missing, or does not agree with the entity, follow procedures in IRM 21.5.3.4.4, Signature Requirements for Claims.

21.6.7.4.10  (10-01-2016)
Superseding Returns

  1. The due date of a calendar year individual income tax return is April 15th. If April 15th falls on a weekend or holiday, the return is due on the next business day. A fiscal year individual income tax return is due the fifteenth day of the fourth month following the close of the fiscal year.

    1. An amended (Form 1040X) or corrected (duplicate) return filed on or before the due date or the extended due date is a superseding return.

    2. Correspondence postmarked on or before the due date or extended due date, requesting changes to tax returns, is processed as superseding information.

  2. Consider the following when making a superseding adjustment:

    • Changes in irrevocable elections (i.e., Section 179, Joint to Separate)

      Note:

      A return filed after the original due date but on or before the extended due date does not constitute a superseding return in this situation.

    • Manual computation of ES Penalty. Refer to IRM 20.1.3, Estimated Tax Penalties

    • Reversal of offsets to other Individual Master File (IMF), Business Master File (BMF), and Debtor Master File (DMF) accounts when increasing the balance due

    • Returns meeting Examination criteria. Follow procedures in Exhibit 21.5.3-2, Examination Criteria (CAT-A) - General

    • Reversal of the offset to the Treasury Offset Program, refer to IRM 21.4.6.5.7.1, Allowable TOP Offset Reversals.

    • Use the appropriate non-refile blocking series (e.g., 05, 77, 99, etc.)

    • Use item reference number 871 when necessary. Refer to IRM 20.1.2.1.6.2, Incorrect Tax Shown Recorded, for additional information.

    Exception:

    Use the appropriate refile blocking series when required to be associated with the original return (e.g., separate to joint).

21.6.7.4.11  (10-01-2015)
State Tax Return or State Portion of Form W-2

  1. If the taxpayer submitted a State tax return or State information on a Form 1040 series return and/or the State portion of the Form W-2.

    1. Block out the DLN on the State return and make a copy.

    2. Return the photocopy and/or Form(s) W-2 to the taxpayer using a Letter 315C, Form/Document/Payment Unnecessary; Returned to Taxpayer.

      Caution:

      Extreme care must be taken to ensure that only the material relative to the taxpayer(s) to which the correspondence is addressed is enclosed in the envelope. See IRM 21.3.3.4.25, Breaches of Personally Identifiable Information (PII) Caused by Manual Stuffing Errors, for additional information.

    3. Consider possible changes to the return processable date (RPD).

    4. Release the "-A" freeze, using the appropriate blocking series.

      Note:

      If TRNS36 is on invalid SSN, DO NOT release a refund unless the taxpayer responded to CP 54B, use HC 4.

  2. If only a loose State W-2 is received, follow the instructions in IRM 21.2.5.4.1.1, Loose Wage Information Statements.

21.6.7.4.12  (01-11-2016)
Presidential Election Campaign Fund (PECF)

  1. Congress established the Presidential Election Campaign Fund (PECF) to support financing of presidential election campaigns.

    1. Taxpayers may file an amended return to designate a part of the tax liability to the PECF, if not specified on the original return.

    2. The amended return must be filed within 20 and one half months after the original due date for filing the return.

      Note:

      If claim is not received timely and the only change is to the PECF, then "no consider" the claim.

    3. The PECF fund amount is $3.

  2. Only take action on an amended return with a PECF designation change from "No" to "Yes." A "Yes" designation may not be changed.

  3. Research CC IMFOLR to determine any change to the election. Prepare a "dummy" Form 1040X, for input whenever the taxpayer indicates an addition to the PECF.

  4. Using a blank Form 1040X, take the following steps:

    1. Edit the tax period at the top of the form.

    2. Edit the taxpayers name control and social security number.

    3. Edit the filing status code.

    4. Edit IMF Computer Condition Code (CCC) "5," in the blank area above column C heading, if the taxpayer checks one box. Edit CCC "6," if taxpayer checks two boxes.

    5. Enter the received date in MMDDYY form in the blank section of columns.

    6. Use the CIS image Stamp feature or write "0/S" (original signed on taxpayers Form 1040X) in red ink at the bottom of page 1.

    7. Write your employee number at the bottom of the return.

    8. Edit the PECF, in Part II on the second page of the Form 1040X.

    9. Edit "PECF Prep" in the left margin of the Form 1040X then continue processing the return.

    10. Attach a routing slip and send to the batching function in an IMF Submission Processing (SP) site to be processed using Tax Class/Doc Code 211 and blocking series 990-999.

      Note:

      If sending to an IMF SP site, be sure to complete the Form 3210, Document Transmittal, and have it shipped by UPS Ground.


      The IMF SP site addresses are:
      Austin - Internal Revenue Service, 3651 South I-H 35, Austin, TX 78741, Stop 6054
      Fresno - Internal Revenue Service, 5045 East Butler Avenue, Fresno, CA 93727 Stop 31305
      Kansas City - Internal Revenue Service, 333 W. Pershing Road, Kansas City, MO 64108–4302 Stop 6052

21.6.7.4.13  (10-01-2011)
Return for Each Form W-2 and/or Form 1099

  1. Taxpayers may erroneously file a separate return for each Form W-2 and/or Form 1099 received. Take the following action to resolve the duplicate filing condition:

    1. Secure returns, if needed, to verify wages, credits, and tax liability.

    2. Combine wages, other income and withholding.

    3. Compute the correct tax liability.

    4. Input the appropriate adjustment transaction to increase or decrease the tax, credits, income, and deductions.

    5. Send the taxpayer a Letter 673C, Duplicate Returns Filed; Adjustment or Refund Explained, or Letter 4364C, xClaim Correspondex Letter - IMF.

    6. Provide a detailed explanation of the changes to the account.

    7. Advise the taxpayer that all Forms W-2 and/or Form 1099 should be filed on one return in the future and that an amended return should be filed for additional Forms W-2 and/or Form 1099 received after the return is filed.

  2. If the correct tax liability is greater than taxpayer expected:

    1. Treat as a math error.

    2. Use blocking series 77 or 78.

    3. Follow procedures in IRM 21.5.4.4.1, Setting the Initial Math Error Action.

  3. If the taxpayer submitted original copy of Forms W-2 to substantiate entries on an original or amended return, do not return documents to the taxpayer.

21.6.7.4.14  (10-01-2016)
True Duplicate Return

  1. A true duplicate condition occurs when the taxpayer files two returns with the exact same tax information. The most common reasons for duplicate filings are:

    1. The taxpayer files a copy of the original Form 1040, 1040A, or 1040EZ.

      Note:

      The original return may have been filed electronically.

    2. A return is filed with a payment of an outstanding balance.

    3. The original refund claimed was reduced by a math error.

    4. The taxpayer did not receive a refund within his/her expected time frame and files another return.

    5. Photocopies of Pages 1 and 2, Form 1040, intended for Form 1045, Application for Tentative Refund, are input as an original return.

    6. The taxpayer did not receive the expected refund due to an invalid TIN condition.

    7. The taxpayer did not receive a refund because of a missing signature on Form 1310, Statement of Person Claiming Refund Due to a Deceased Taxpayer ("-R" freeze).

  2. Six common checks for resolving a true duplicate condition are:

    1. Reviewing the account for unreversed penalties.

    2. Checking the received date of both returns to make sure the earliest post marked return posted first.

    3. Searching for taxpayer notes or letters.

    4. Checking for name and address changes.

    5. Making sure no corrected or prior year Forms W-2 and/or Forms 1099 are included.

    6. Checking all attachments for Forms 1045 or 1040X claiming a carryback. Follow procedures in IRM 21.5.9, Carrybacks.

  3. Compare the TRNS36 and/or the second return to the original return's using CC TRDBV, CC IMFOL and CC RTVUE. The amounts for the taxable income, adjusted gross income, total tax, self-employment tax, primary and secondary self-employment income as well as the number of exemptions should match before determining it is a true duplicate case.

    Exception:

    If unable to determine the reason the duplicate return was filed or the taxpayer seems to think that this is the first time filing, send a letter informing the taxpayer a return already has been filed and the refund was issued.

    If Then
    Second return is a true duplicate
    1. Release the "–A" freeze.

    2. Use the appropriate HC and blocking series.

    A true duplicate return posted to an invalid TIN
    1. Review the TXMOD notice section.

    2. Determine if a CP 54B was issued.

    3. DO NOT release the refund if taxpayer did not reply to the CP 54B.

    4. Release the "-A" freeze by inputting a TC 290 .00.

    5. Use HOLD CODE 4 to hold the credit.

    6. Initiate taxpayer correspondence.

21.6.7.4.14.1  (10-01-2016)
Systemically Identified True Duplicate Returns

  1. Duplicate returns will be systemically compared to the original return utilizing established criteria. If all items match, the duplicate return will be considered a true duplicate return and systemically closed as a true duplicate return. No TRNS36 will generate. Systemically identified and closed true duplicate returns can be identified by TC 971 AC 142.

  2. If a systemically identified true duplicate return is later identified as not being a true duplicate, follow established procedures for processing duplicate return.

    Note:

    If information is received while staffing the AM toll-free telephone line indicating that the duplicate return is not a true duplicate return, prepare Form 4442, Inquiry Referral, and forward to the campus where the duplicate return was processed.

21.6.7.4.15  (10-01-2002)
Duplicate/Amended TC 420 - TRNS93

  1. A TRNS93 generates electronically to CIS, when a duplicate or amended return posts to a module which contains an open TC 420 ("-L" freeze). To resolve TRNS93:

    1. Use TRNS36 procedures in addition to data from the Audit Information Management System (AIMS) file.

    2. Research the AIMS file with CC AMDISA for the current status.

    3. Follow the procedures outlined in IRM 21.5.3, General Claims Procedures.

21.6.7.4.16  (10-01-2002)
Duplicate Assessment - Doc Code 51 - TRNS35/TRNS35A

  1. Examination and Collection functions, as well as certain servicing campus functions may request an expeditious assessment (Prompt, Quick, Jeopardy) when:

    • The statute is imminent (does not apply to jeopardy)

    • The collection of taxes is in jeopardy

  2. The servicing campus Accounting function makes the assessment.

    1. The tax data necessary for these assessments is transmitted to the Accounting function by telephone, mail, or facsimile (fax).

    2. Tax, penalty, and interest are assessed.

    3. A balance due notice is sent to taxpayer, or given to taxpayer if a jeopardy levy is contemplated.

  3. The information is entered into the Distributed Input System (DIS) to post to the master file.

  4. These pre-journalized transactions are numbered with a Document Code 51.

21.6.7.4.16.1  (10-01-2016)
General - TRNS35/TRNS35A

  1. A TRNS35/TRNS35A generates electronically to CIS when a prompt assessment attempts to post as an original return, to a module containing a TC 150. A prompt assessment, identified by TC 370 and Document Code 51:

    • Posts as a TC 290 with all tax, penalty, and interest transactions associated with the TC 370

    • Generates a TC 976 and sets the duplicate filing condition "-A" freeze

  2. Action required:

    1. Follow TRNS36 verification procedures.

    2. Determine the reason for the prompt assessment.

    If it is determined that Then
    This is a valid additional assessment Input a TC 290 to release the "-A" freeze.

    Note:

    If TRNS35 is on invalid TIN, DO NOT release a refund unless the taxpayer responded to CP 54B; use HC 4.

    This is an erroneous assessment Input a TC 291 to abate the assessment.

21.6.7.4.17  (10-01-2006)
Net Operating Loss (NOL) - Carryforward

  1. The taxpayer may carry a Net Operating Loss (NOL) or excess business credit carried forward to the current tax year.

    Reminder:

    Refer to IRM 21.5.9, Carrybacks, for technical background on carryback cases.

  2. Net Capital Losses (NCL) can ONLY be carried forward, not back.

  3. An election made by the due date or extended due date of the loss year return, for NOLs only, enables taxpayer to carry the loss forward. For loss year returns due on or after October 1,1992, provided taxpayer timely files the loss year return, the election may also be made on an amended return filed within six months of the due date of the return, determined without extensions. Follow procedures in IRM 21.5.9.5.2, Carryback/Carryforward Election.

Exhibit 21.6.7-1 
Reason Codes

Reason Code Literal Which Prints on the CP 21/CP 22A Notice
Filing Status and Exemptions (Use the RC for the new filing status; e.g., single to HOH - use RC 004)
001 Filing status to single.
002 Filing status to married filing a joint return.
003 Filing status to married filing a separate return.
004 Filing status to head of household.
005 Filing status to qualifying widow(er) with dependent child.
006 Total exemption amount.
040* Bona fide and physical presence test.
104 Total exemption amount for Katrina house guest
Income
007 Income from wages, salaries, tips, etc.
008 Interest and/or dividends income
012 Business income (or loss)
013 Investment gain (or loss)
014* Foreign Earned Income reported on Form 2555
015

Note:

DO NOT use RC 015. RC 015 is reintroduced for tax year 2001, requires no SC, and was systemically generated for a Rate Reduction Credit recovery initiative. The RC 015 was previously used for the tax year 1993 Omnibus Budget Reconciliation Act (OBRA) only.

Note:

The RC 015 read (for tax year 2001): We made an error figuring the allowable rate reduction credit on your 2001 Form 1040, line 47; Form 1040A, line 30; or Form 1040EZ, line 7. We apologize for the error and we're correcting the mistake. If the correct credit results in an overpayment on your 2001 tax return, we will send you a check or notify you if the overpayment was applied to another tax liability. The Treasury's Financial Management Service may reduce your check if you are past due in payments for child support or debts to other federal agencies. You do not have to take any further action on this matter. If you receive a check, do not report the overpayment as income on your 2002 federal tax return.

016 Pensions and Annuities.
017

Note:

Reintroduce RC 017 for tracking purposes only; nothing prints on CP 21/CP 22A. Used with RC 053 ONLY for CP 27 or 09.

Note:

The RC 017 was previously used for tax year 1993 OBRA only.

018 Schedule E income (or loss).
019 Farm income (or loss).
020 Unemployment compensation.
021 Other income.
022 Total Income.
023 Interest charged. We reduced the interest because you were located in a Presidentially Declared Disaster Area. We eliminated the interest charged during the time period for which an extension of time to file returns and pay taxes was granted.
Caution: For 1996 (and subsequent) - RC 23 is used ONLY for Legislative interest abatement for taxpayers in Disaster areas; see IRM 20.2, Interest.
For 1993: RC 023 was used with SC 0 and read "You elected on your 1993 federal income tax return to defer two-thirds of additional 1993 tax associated with the tax rate increase imposed by the 1993 Budget Reconciliation Act. The third and final installment of deferred tax is now due."

Note:

RC 023 was used for the tax year 1993 only with the Budget Reconciliation Act wording.

029 Taxable Social Security Benefit.
042** Ingreso por cuenta propia.
Adjustments to Income
025 Amount claimed as payment made to a qualified retirement plan.
027 Interest penalty on early withdrawal of savings.
030 Adjustments to income.
031* Foreign earned income exclusion.
032 Adjusted Gross Income.
052 Roth Individual Retirement Account (IRA) election to reflect that the total taxable conversion amount is subject to tax (Primary Taxpayer).
058 Roth IRA election to reflect that the taxable conversion amount will be reported and any tax due paid over 4 years (Primary Taxpayer).
059 Roth IRA election to reflect that the total taxable conversion amount is subject to tax (Secondary Taxpayer).
060 Roth IRA election to reflect that the taxable conversion amount will be reported and any tax due paid over 4 years (Secondary Taxpayer).
083* Income exempt per tax treaty.
084* Scholarship or fellowship exclusion.
094* Net operating loss carryback or carryforward.
139 Adjustments made due to fraudulent identity theft return.
Tax Computation
033 Additional taxes from Form 4970, Tax on Accumulation Distribution of Trusts, Form 4972, Tax on Lump-Sum Distributions, or Form 8814, Parents' Election To Report Child's Interest and Dividends
034* Dual status tax.
043 Schedule D computation.

Note:

Includes Schedule D, Schedule D Worksheet, Capital Gain Tax Worksheet (CGTW) and Qualified Dividend and Capital Gain Tax Worksheet (QDCGTW).

(Use RC 043 for Schedule D tax computation change; use RC 013 for Schedule D investment gain or loss.)
046 Schedule J. (Prior to 1999, RC 046 was used for recomputing prior year investment credit.)
070* Zero Bracket Amount.
075 Taxable income.
076 Schedule A
092 Standard deduction.
Credits
035 Education Credit.
036 Tax credits.
041* Alternative Minimum Foreign Tax Credit.
063* Virgin Island credit on Form 8689, Allocation of Individual Income Tax to the U.S. Virgin Islands
Other Taxes
024** Uncollected Social Security and/or Medicare Tax
037* Non-effectively connected tax.
038* Backup withholding.
044** Self-Employment Tax.
045 Minimum Tax or Alternative Minimum Tax.
047 Social Security Tax on Tip Income not reported to employer or uncollected employee Social Security Tax Railroad Retirement Tax Act (RRTA)Tax on Tips.
048 Tax on your Individual Retirement Account.
049 Total tax
050 Household Employment Taxes (Schedule H).
095* Tax computation using the 30 percent statutory rate or reduced treaty rate.
136 Additional Medicare Tax
137 Net Investment Income Tax
Affordable Care Act (ACA)
151 Premium Tax Credit
152 Excess Advanced Premium Tax Credit Repayment
153 Shared Responsibility Payment
154 Shared Responsibility Payment (Compliance Only to be used on the CP 15H)
Payment
051 Total Federal Income Tax Withheld.
053 Earned Income Credit (allowed/increased/decreased).
054 Earned Income Credit (disallowance only). Used with SC 0 and reads: "Your claim for Earned Income Credit is not approved. You will be sent a separate letter formally disallowing your claim."
055 Excess Social Security Tax or RRTA Tax Withheld.
057 Regulated Investment Company Credit.
061 Payments and/or credits.
069* Form 8288, U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests, or Section 1446 withholding.
039* Social Security tax withheld based on your visa.
071 Advanced Child Tax Credit
Tax Year 2007 Economic Stimulus Payment
077 Advanced Child Tax Credit
078 Advanced Child Tax Credit
079 Advanced Child Tax Credit
102 Credit for Federal telephone excise tax paid (Effective January 2007)
103 EIC Certification
105 Making Work Pay and Government Retiree Credit - If no government retiree credit is taken
106 Refundable Education Credit
108 Making Work Pay and Government Retiree Credit - If government retiree credit of $250 is taken
109 First-Time Homebuyer Credit - 2008 Credit required to be repaid
110 First-Time Homebuyer Credit - When the home was purchased in 2009 or 2010

Note:

Do not use RC 110 when adjusting accounts for FTHBC recapture.

111 Making Work Pay and Government Retiree Credit - If government retiree credit of $500 is taken
112 Requirement to repay the First-Time Homebuyer Credit waived. This is forgiveness for taxpayers who had a loss when the house was sold.
113 Requirement to repay the First-Time Homebuyer Credit waived. This is forgiveness for taxpayers who had a loss on the house due to natural disaster.
114 Repayment of the First-Time Homebuyer Credit. This is for taxpayers who converted their home to rental or business use. Systemic use only.
115 First-Time Homebuyer Credit transferred to spouse. Transfer to spouse requested on Form 5405, First-Time Homebuyer Credit and Repayment of the Credit
116 Repayment of spouse's share of the First-Time Homebuyer Credit waived. This is forgiveness if the primary taxpayer is deceased.
117 Repayment of spouse's share of the First-Time Homebuyer Credit waived. This is forgiveness if the secondary taxpayer is deceased.
118 Requirement to repay the First-Time Homebuyer Credit waived. This is forgiveness when both taxpayers are deceased.
119 Repayment of First-Time Homebuyer Credit. Used when updating the primary entity section.
120 Repayment of First-Time Homebuyer Credit. Used when updating the spouse's entity section.
121 Internal Use Only. Used to adjust the primary First Time Homebuyer Credit year.

Note:

When adjusting both the primary and secondary year, use RC 000. When the adjustment posts to Masterfile RC 000 drops off.

122 Internal Use Only. Used to adjust the spouse's First-Time Homebuyer Credit year. See the note in RC 121 above.
123 Repayment of First-Time Homebuyer Credit. This updates the joint entity section.
124 Schedule L Standard Deduction for Certain Filers
125 First-time Homebuyer Credit - this is for the repeat home owners up to $6,500
126 First-Time Homebuyer Credit - this is for the military, foreign service, or intelligence community.
127 Requirement to repay the First-Time Homebuyer Credit waived. This is for members of the military, foreign service, or intelligence community
128 First-time Homebuyer Credit for homes purchased by first time homebuyer without binding contract attached.
129 First-Time Homebuyer Credit for homes purchased by long time residents without binding contract or 5 out of 8 years documentation attached.
130 Income Exclusion for Loan Forgiveness for Health Professionals
132 Repayment of First-Time Homebuyer Credit. Used to adjust a joint FTHBC repaid via separate returns.
133 Repayment of the First-Time Home Buyer Credit. This is for taxpayers whose home was destroyed, condemned, or disposed of under threat of condemnation, and had a gain.
135 2010 Gulf Region Oil Spill
Penalties, Fees, and Interest.
062** Penalty due to reasonable cause (Interest is charged on any unpaid tax and may not be removed for reasonable cause)

Note:

Use RC 062 only when Penalty Reason Code (PRC) is in the "Reasonable Cause" category.

065 Penalty charge.

Note:

Use RC 065 only when PRC is NOT in the "Reasonable Cause" category.

071** Reserved
072 Health Coverage Tax Credit

Note:

RC 072 is valid for tax year 2001 and subsequent.

073 Assessment of fee.
074 Interest Charges.
077** Reserved
Treasury Offset Program
086*** An Injured Spouse Claim was filed, requesting a refund of the non-obligated spouse's share of the amount applied against the non-tax debt.

Note:

RC 086 used only with SC 7.

087*** We have corrected a math or processing error on your return.

Note:

RC 087 used only with SC 7.

089*** The offset was done in violation of the automatic stay of bankruptcy.

Note:

RC 089 used only with SC 7.

090*** The offset resulted from a payment which was specifically intended for application to an outstanding IRS balance.

Note:

RC 090 used only with SC 7.

091*** Based on the superseding tax return you filed, we have adjusted the tax, withholding, or credits reported on your original tax return.

Note:

RC 091 used only with SC 7.

Miscellaneous and Special Projects
064 Reconsideration No-Response. (Compliance Examination use only.)
066 Reconsideration disallowed in full. (Compliance Examination use only.)
067 Reconsideration disallowed in part. (Compliance Examination use only.)
068 Reconsideration allowed in full. (Compliance Examination use only.)
080 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CP 21/CP 22A.
081 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CP 21/CP 22A.
082 Exclusive: Ministerial Interest case; report purposes only. Nothing prints on CP 21/CP 22A.
085 Refund status. Based on a review of your account or on the information you provided, we are releasing your overpayment. Your overpayment will be refunded unless you have other outstanding liabilities.
093 Immediate Tax Relief credit — RELIEF Act 2001
For tax year 2000 (ONLY): RC 093 is generated if the TC 290 .00 CRN 338 was systemically reversed (cycle 200151 or 200152). RC 093 can be manually input; SC 0 generates.
For tax year 2000, RC 093 reads:"We reversed the Immediate Tax Relief credit on your 2000 tax account since it was not refunded to you by December 31, 2001, as the law requires. We are sorry the refund was not issued in time to meet this requirement."
.
096 Tax Relief Credit.
Immediate Tax Relief credit — RELIEF Act 2001
For tax year 2001: Use RC 096 with the appropriate SC and any other RCs; RC 096 reads:Tax Relief Credit.
For tax year 2000:
RC 096 alone will generate (no manual input of RC 096) ONLY with the systemic posting of TC 290 .00 CRN 338 (DLN of NN254-999-05099-1). RC 096 read: "We applied a credit to your 2000 tax account due to new legislation. We used (offset) all or part of your credit to pay your past due Federal tax as the law requires. We will send a separate notice to you about the offset."
2008 Recovery Rebate Credit
For Tax Year 2008:
RC 96 is used when correcting account information. Use RC 96 with appropriate SC and any other RC's. RC 96 reads: Recovery Rebate Credit.
097 Innocent Spouse Claim-Disallowed (Never prints a CP 21/CP 22A. RC 098 used for tracking purposes.)
098 Innocent Spouse Claim-Allowed (Never prints a CP 21/CP 22A. RC 098 used for tracking purposes.)
099** Account Information.
Note: Use ONLY when RCs above do not apply or when instructed by a specific IRM.
100 Form 1040, U.S. Individual Income Tax Return, filer converted to Form 1040NR, U.S. Nonresident Alien Income Tax Return, filer - used by PSC.
101 Form 1040NR, U.S. Nonresident Alien Income Tax Return, filer converted to Form 1040, U.S. Individual Income Tax Return, filer - used by PSC.
131 Return Preparer Misconduct - information that prints on the adjustment notice is return data due to return preparer misconduct
160 Recipient’s Form 1042-S indicates money is in escrow
161 Recipient’s Form 1042-S does not match the Withholding Agent’s Form 1042-S copy
162 Recipient has already claimed the Form 1042-S credit
163 Withholding Agent did not deposit sufficient funds
176 Home Grant Penalty and Interest Free Adjustment
177 Home Grant with Carryback Criteria Penalty and Interest Free Adjustment
Reserved for Criminal Restitution Assessments
141 Criminal restitution assessment with IMF client returns of the preparer the basis for the underlying tax liability, with duplicate or possible duplicate civil assessments.
142 Criminal restitution assessment with BMF client returns of the preparer the basis for the underlying tax liability, with duplicate or possible duplicate civil assessments.
143 Criminal restitution assessment with IMF underlying tax liability, with duplicate or possible duplicate civil assessment.
144 Criminal restitution assessment with BMF underlying tax liability, with duplicate or possible duplicate civil assessment.
145 Criminal restitution assessment with IMF underlying tax liability, with duplicate criminal restitution assessment.
146 Criminal restitution assessment with BMF underlying tax liability, with duplicate criminal restitution assessment.

Note:

Any TC 29X with RCs 141 though 146 must also have either RC 147 or RC 148.

147 There is reasonable cause to waive the FTP penalty, if known.

Note:

RC 147 may not be used without using one of the RCs 141 through 146, except with a TC 290 for zero amount.

148 There is NO reasonable cause to waive the FTP penalty, if known.

Note:

RC 148 many not be used without using one of the RCs 141 through 146, except with a TC 290 for zero amount.

149 RESERVED
150 Used with CRN 337 to mirror payments applied to duplicate restitution-based assessments.
Reserved: RCs 009, 010, 011, and 026,

Note:

*RCs marked with one asterisk (*) for international accounts (PSC) only.
** RCs marked with two asterisk (**) print in Spanish when the entity filing requirement is '7'.
***RCs marked with three (***) for reversing offsets through the Treasury Offset Program.
RC 042 prints in Spanish only.
RCs 086, 087, 089, 090, and 091 are the only RCs permitted to be used with SC 7; no other SC may be used.


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