25.24.1 Return Preparer Misconduct Victim Assistance - General Overview

Manual Transmittal

August 04, 2017

Purpose

(1) This transmits revised IRM 25.24.1, Return Preparer Misconduct Victim Assistance - General Overview.

(2) This manual discusses general information for use in identifying Return Preparer Misconduct (RPM) criteria and specific guidance for toll-free assistors, Taxpayer Assistance Center (TAC) employees and non-specialized employees working paper inventory.

Material Changes

(1) IRM 25.24.1 incorporates general information and provisions to assist taxpayers who may be victims of return preparer misconduct. It incorporates the information previously located in Interim Guidance Memoranda WI-25-0815-01, Interim Guidance on Contacts Regarding Specific Return Preparer Complaint Issues, and certain general information from Interim Guidance Memoranda WI-25-0815-02, Interim Guidance on Return Preparer Misconduct (For Memphis Accounts Management ONLY), both issued on August 5, 2015.

(2) Editorial changes have been made throughout the IRM as well as updated IRM references throughout to clarify language and improve information delivery.

(3) IRM 25.24.1.1 - Subsection renamed to Program Scope and Objectives. Additional subsections added to address internal control requirements.

(4) IRM 25.24.1.1.5 - Added IRM references.

(5) IPU 17U0705 issued 04-19-2017 IRM 25.24.1 - Revalidating changes issued with IPU 16U0401 issued 02-25-2016. These procedures will be incorporated into a published copy of the IRM 10-17-2017.

(6) IPU 16U0401 issued 02-25-2016 Editorial changes have been made throughout the IRM as well as updated IRM references throughout to clarify language and improve information delivery.

(7) IRM 25.24.1.2 - Subsection was moved to 25.24.1.1.4. All subsequent subsections renumbered accordingly.

(8) IPU 16U0401 issued 02-25-2016 IRM 25.24.1.2(1) a) Expanded definition of Preparer Misconduct to include the filing of Form 1040X. Added an example.

(9) IRM 25.24.1.3 - Renamed subsection title to Identifying Potential RPM Issues - Telephone Assistors/Taxpayer Assistance Center (TAC) Overview

(10) IRM 25.24.1.3.1 - Renamed subsection title to Telephone/TAC - Potential RPM Issues Are Present - Account Research and Actions. Added note regarding frozen refunds.

(11) IPU 16U1243 issued 07-29-2016 IRM 25.24.1.3(3) - Added in equivalent letter can be used for consistency.

(12) IPU 16U0401 issued 02-25-2016 IRM 25.24.1.3 (4) e) Added examples that show when the law enforcement agency report may otherwise demonstrably show that it was accepted by the agency.

(13) IRM 25.24.1.4 - Renamed subsection title to Potential RPM Issues - Non Specialized General Paper Overview

(14) IPU 16U1243 issued 07-29-2016 IRM 25.24.1.4(6) Chart - Clarified that potential RPM issues involve the taxpayer being in contact with a preparer for the year of filing.

(15) IPU 17U0595 issued 03-31-2017 IRM 25.24.1.4.1(4) - Added guidance for TAC employees to ensure all supporting documentation is included with the RPM claim.

(16) IPU 17U0595 issued 03-31-2017 IRM 25.24.1.5(2) (b) - Added Atlanta as a specialized RPM team. Added an exception for RPM specialized teams only, regarding the reassignment of cases with -L freeze code.

(17) IPU 17U1198 issued 07-28-2017 IRM 25.24.1.5.1 - Routing Chart - Updated chart to reflect doc type COMP RPM. Links corrected and IDRS reassignment number for Status 22 - ACS cases updated.

(18) IPU 17U0863 issued 05-17-2017 IRM 25.24.1.5.1 - Routing Chart - Removed doc type Exam Open RPM and replaced with new doc type COMP RPM. This doc type will be used when updating data on existing CIS cases.

(19) IPU 17U0835 issued 05-11-2017 IRM 25.24.1.5.1 - Routing Chart - Updated IDRS reassignment number and existing control information.

(20) IPU 17U0595 issued 03-31-2017 IRM 25.24.1.5.1(1) (c) - Revised reassignment/routing guidance for Forms 14039 alleging preparer misconduct rather than ID theft. These forms should not be reassigned/routed unless a -A freeze is present or the taxpayer’s good return is unprocessed on CIS. Added IRM references to associated IRM guidance.

(21) IPU 16U1498 issued 10-06-2016 IRM 25.24.1.5.1(6) Chart - Added routing guidance for Frivolous Return Program freeze and assessments. Updated the -L freeze guidance.

(22) IPU 16U1243 issued 07-29-2016 IRM 25.24.1.5(2)(a) and (b) - Added in Identify Theft Victims Assistance (IDTVA) for clarification.

(23) IPU 16U1243 issued 07-29-2016 IRM 25.24.1.5.1 Chart - Chart revised.

(24) IPU 16U1243 issued 07-29-2016 IRM 25.24.1.5.1(4) and (5) - Added guidance when multiple years are involved and when a loose Form 14157 is received.

(25) IPU 16U0401 issued 02-25-2016 IRM 25.24.1.5.1(1) c) Corrected referenced paragraph number and link to applicable IRM. (4) Chart updated - Status 22 removed the requirement to complete Form 14394 for non-specialized RPM functions. Added note advising the specialized RPM functions will complete. IVO Involvement - clarified routing to IVO only when the RPM claim involves the original return.

Effect on Other Documents

IRM 25.24.1 dated January 7, 2016 (effective January 7,2016) is superseded. The following IRM Procedural Updates (IPU), issued from February 25, 2016 through July 28, 2017 have been incorporated into this IRM: 16U0401, 16U1243, 16U1498, 17U0595, 17U0705,17U0835, 17U0863,17U1198.

Audience

For use by all divisions, functional units and employees in providing assistance to taxpayers who are victims of return preparer misconduct.

Effective Date

(08-04-2017)

Kevin M. Morehead
Director, Accounts Management
Wage and Investment Division

Program Scope and Objectives

  1. This manual discusses general information for use in identifying Return Preparer Misconduct (RPM) criteria and specific guidance for toll-free assistors, Taxpayer Assistance Center (TAC) employees and for non-specialized employees working IMF paper inventory. The information and guidance provided is for use by all divisions, functional units and employees in providing assistance to taxpayers who are possible victims of return preparer misconduct.

  2. The owner of the policies contained herein is the Director, Accounts Management.

  3. Identity Protection Strategy & Oversight (IPSO) is the internal organization responsible for the administration, procedures, and updates related to the RPM program.

  4. The program objective is to assist taxpayers who report they are victims of return preparer misconduct. The IRS may provide relief to taxpayers when the return preparer has altered a taxpayer’s tax data and/or misdirected a portion or all of a refund. Taxpayers who claim to be a victim of return preparer misconduct must submit a complaint and the required documentation to the IRS to request assistance and relief.

Background

  1. Unscrupulous return preparers may alter taxpayer tax data (includes but is not limited to falsified dependents, expenses, deductions, credits, income, refund amount, etc.) and/or misdirect a portion or all of the refund. Taxpayers may become aware of misconduct through taxpayer initiated contact (Toll-Free, Field Assistance, Taxpayer Advocate Service, etc.) or through IRS enforcement investigative processes (Revenue Agent (RA) or Tax Compliance Officer (TCO) contact, Automated Underreporter (AUR) correspondence, campus examination correspondence, Revenue Officer (RO) contact, Criminal Investigation (CI) inquiries, etc.).

Authority

  1. The policy statement relating to return preparer misconduct can be found in IRM 1.2.24.2, Policy Statement 25-2.

  2. Per the Taxpayer Bill of Rights (IRC §7803(c)), taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial hardship or if the IRS has not resolved their tax issues properly and timely through normal channels. IRS employees must be informed about taxpayer rights and be conscientious in the performance of their duties to honor, respect and effectively communicate those rights. Refer to https://www.irs.gov/Taxpayer-Bill-of-Rights, for additional information.

Responsibilities

  1. Toll-free assistors and TAC employees must follow established procedures to identify the issue(s) and address the taxpayer’s inquiries accordingly. If return preparer misconduct criteria exist, the employee will provide guidance on how to file an RPM claim.

  2. Employees working IMF paper inventory not specialized in the RPM program will be responsible for identifying RPM criteria and routing to the appropriate function for RPM resolution.

Key RPM Terminology and Acronyms

  1. Key RPM terminology used throughout this guidance is defined below.

    1. Preparer Misconduct: Return preparer misconduct generally involves the orchestrated preparation and filing of false income tax returns (in either paper or electronic form), including Form 1040X, by unscrupulous preparers who may change direct deposit information or claim, for example:


      • Inflated personal or business expenses,
      • False deductions,
      • Excessive exemptions, or
      • Fraudulent tax credits such as the Earned Income Tax Credit (EITC).

      The preparer's clients do not have knowledge of the false expenses, deductions, exemptions and/or credits shown on their tax returns.

      Example:

      A taxpayer used a preparer in 2015 to prepare and file Form 1040. The preparer changed the return by increasing the withholding tax claimed and diverted the resulting refund into the preparer’s personal account.

      Example:

      A taxpayer used a preparer in 2015 to prepare and file Form 1040. The preparer subsequently files a Form 1040X, Amended U.S. Individual Income Tax Return, without the taxpayer’s knowledge or consent. The filing of the unauthorized amended return by the preparer may be considered return preparer misconduct.

    2. Return Preparer Definitions: The preparer definitions below are for the purposes of this guidance only.
      Signing Preparer – Preparer information appears on the processed tax return. An individual who prepares federal tax returns for compensation is required to have a Preparer Tax Identification Number (PTIN) issued by IRS and must enter it on every tax return prepared for compensation along with the preparer’s name and signature. Any preparer with a PTIN is in the business of preparing tax returns or has held themselves out as in the business of preparing tax returns.
      Ghost Preparer/Non-Signing Preparer – No preparer information appears on the processed tax return. An individual who prepares a tax return but does not sign the return as a preparer. These returns may be reflected as "self-prepared" and do not appear to evidence 3rd party involvement.

      Note:

      "3rd party" refers to the individual the taxpayer alleges to be his/her preparer.

    3. RPM Complaint: Taxpayers alleging preparer misconduct are required to provide Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit, signed under penalties of perjury and Form 14157, Return Preparer Complaint, along with additional required documentation to support their allegations.

    4. Complete Complaint: Sufficient documentation is provided and the preparer information is considered verified and valid.

    5. Acceptance of Complaint: Acceptance of an RPM complaint is dependent upon the receipt of sufficient documentation, verification of the preparer, the facts and circumstances of each complaint gathered from the taxpayer’s documentation and account research. When a complaint is accepted, the IRS will determine the type of relief the taxpayer is entitled to receive.

    6. Actual Return or Return As Intended To Be Filed: The taxpayer’s tax return submitted with the RPM complaint reflecting the return unaltered by the preparer and as intended to be filed.

    7. Relief/Resolution: Relief and resolution is based upon the specific category defined in (i) and may consist of a combination of the following:
      • The taxpayer’s actual return (return as intended to be filed) is accepted as the return of record and account is adjusted to reflect that return.
      • Removal of the preparer portion of the refund attributable to preparer misconduct using a General Ledger (GL) account.
      • Issuance of an additional refund, with applicable interest.

    8. Refunds:
      Taxpayer portion of refund – Any portion of the refund received or determined to be received by the taxpayer and/or any portion of the refund where the taxpayer received benefit (e.g. Refund offset to legitimate liability including Bureau of the Fiscal Service (BFS) offsets.)
      Preparer portion of the refund – Portion of the refund resulting from the altered data on the processed tax return or portion of the refund misdirected to the preparer.
      Additional refund – An additional refund is the amount of the refund still due to the taxpayer.

    9. RPM Categories: RPM complaints have been categorized into four (4) basic fact patterns. Within each of the 4 categories, different procedures may apply depending upon the specific facts and circumstances, such as whether there is a signing preparer or a non-signing preparer (ghost), and/or the method of refund issuance (e.g., refund anticipation check (RAC), split refund, paper check). These facts and circumstances, the specific documentation requirements for each category, verification requirements and account information will determine the treatment stream and whether the taxpayer is entitled to a refund or a portion of the refund misdirected by the preparer.
      1. Category 1: Unauthorized filing. The taxpayer was in contact with a preparer for the year of filing and ≡ ≡ ≡ ≡ ≡ ≡ did not sign or authorize the filing of a return, but a return was filed with his/her name and taxpayer identification number (TIN).
      Potential relief/resolution: The IRS will administratively adjust the taxpayer’s account to reflect the taxpayer’s valid return and remove the portion of the refund attributable to preparer misconduct. The taxpayer shall receive a refund for the entire amount due from his/her valid return, less any amounts already received.
      2. Category 2: Authorized filing, Altered return information and No Additional Refund Due to the Taxpayer. The taxpayer was in contact with a preparer for the year of filing and did authorize a return filing, but states tax data (exemptions, income, expenses, deductions, credits, etc.) on their return was altered before it was filed or the return otherwise includes items which they did not authorize.
      The taxpayer may have received a refund for the amount he/she expected and it matches their return as intended to be filed, or taxpayer received a refund in excess of the amount to which he/she is entitled. In addition, the taxpayer may not have received a refund, but did not expect a refund and the return as intended to be filed is a balance due.
      Potential relief/resolution: The IRS will administratively adjust the taxpayer’s account to reflect the taxpayer’s valid return and remove the portion of the refund attributable to preparer misconduct. If the taxpayer is in a balance due situation as indicated on his/her valid return and/or the taxpayer received a portion of the refund that exceeds the refund amount to which they are entitled, then the taxpayer is liable for the amount owed and/or will be asked to repay any refund received to which he/she was not entitled.
      3. Category 3: Authorized filing, Altered return information and Taxpayer Requesting Additional Refund. The taxpayer was in contact with a preparer for the year of filing and did authorize a return filing, but states tax data (exemptions, income, expenses, deductions, credits, etc.) on their return was altered before it was filed or the return otherwise includes items which they did not authorize.
      The taxpayer states he/she only received a portion of the refund he/she expected or he/she received no refund. The taxpayer may have received a portion of the inflated refund but he/she has not received the refund he/she expected per the return submitted as intended to be filed.
      Potential relief/resolution: The IRS will administratively adjust the taxpayer’s account to reflect the taxpayer’s valid return and remove the portion of the refund attributable to preparer misconduct. The taxpayer shall receive a refund for the entire amount due from his/her valid return, less any amounts already received.
      4. Category 4: Misdirected Refund Only and Taxpayer Requesting Additional Refund. The taxpayer was in contact with a preparer for the year of filing and did authorize a return filing, but states although no tax data was altered, the direct deposit information or mailing address for the refund check was altered diverting all or a portion of the refund to the preparer.
      The taxpayer states that he/she only received a portion of the refund or he/she received no refund.
      Potential relief/resolution: The IRS will administratively remove the portion of the refund misdirected to the preparer and the taxpayer shall receive a refund for the entire amount due from the original valid return, less any amounts already received.

  2. Refer to the table below for a list of acronyms used throughout this guidance.

    Acronym Definition
    AC Action Code
    AIMS Audit Information Management System
    AM Accounts Management
    AUR Automated Underreporter
    BFS Bureau of the Fiscal Service
    CI Criminal Investigation
    CIS Correspondence Imaging System
    CSR Customer Service Representative
    EGC Employee Group Code
    EIN Employer Identification Number
    FRP Frivolous Return Program
    ICT Image Control Team
    IDRS Integrated Data Retrieval System
    IDTVA Identity Theft Victim Assistance
    IDTVA-A Identity Theft Victim Assistance - Accounts Management
    IDTVA-C Identity Theft Victim Assistance - Compliance
    IMF Individual Master File
    IPSO Identity Protection Strategy & Oversight
    IRM Internal Revenue Manual
    IUUD IDRS Unit & USR Database
    IVO Integrity & Verification Operations
    PBC Primary Business Code
    PTIN Preparer Tax Identification Number
    RA Revenue Agent
    RAC Refund Anticipation Check
    RICS Return Integrity and Compliance Services
    RO Revenue Officer
    RPM Return Preparer Misconduct
    RPO Return Preparer Office
    TA Tax Auditor
    TAC Taxpayer Assistance Center
    TAS Taxpayer Advocate Service
    TC Transaction Code
    TCO Tax Compliance Officer
    TIGTA Treasury Inspector General for Tax Administration
    TIN Taxpayer Identification Number
    USR Unit Security Representative

Related Internal Revenue Manuals (IRMs)

  1. Employees are responsible for familiarizing themselves with and utilizing all linked/referenced IRMs, as appropriate. This includes, but is not limited to, sections within the following:

    • IRM 3, Submission Processing

    • IRM 4, Examining Process

    • IRM 5, Collecting Process

    • IRM 20.1, Penalty Handbook

    • IRM 21, Customer Account Services

    • IRM 25, Special Topics

    • IRM 25.23, Identity Protection and Victim Assistance

  2. IRM 25.24.1, Return Preparer Misconduct Victim Assistance - General Overview, should be used in conjunction with specific functional RPM guidance.

  3. For specific IRM guidance for IDTVA case processing, Field & Specialty Collection and Field Exam, refer to the following:

    • IRM 25.24.2, Return Preparer Misconduct Victim Assistance Specialized Accounts Management Processing

    • IRM 25.24.4, Return Preparer Misconduct for Collection Employees

RPM General Documentation Requirements

  1. The taxpayer is required to submit documentation to support their claim of preparer misconduct. Reference the list below for examples of acceptable documentation.

  2. Documentation requirements may vary depending upon the category, requested relief, and whether the original return was signed by a preparer or is considered a ghost preparer. Specialized employees will refer to specific functional guidance for the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for a specific category.

  3. In cases where there is missing documentation or incomplete information on Form 14157–A, specialized employees will issue a 131C letter, Information Insufficient or Incomplete for Processing Inquiry, or equivalent letter, requesting the missing documentation. The case will be suspended for an established time frame awaiting the taxpayer’s response. The taxpayer will be advised if no response is received or insufficient information is provided within the specified time frame, the claim will be disallowed.

  4. General Documentation list:

    1. Form 14157, Complaint: Tax Return Preparer, (completed by the taxpayer)

    2. Form 14157–A, Tax Return Preparer Fraud or Misconduct Affidavit, (completed and signed by the taxpayer (at least one taxpayer, if married filing joint))

    3. Taxpayer must provide the return preparer’s name and address

    4. Signed, valid tax return of the taxpayer submitted with the claim (as intended to be filed)

    5. Official report from a law enforcement agency (Category 3 and 4 only; where the taxpayer is seeking a refund)

      Example:


      • Police Department
      • State Attorney General
      • Criminal Investigation
      • Treasury Inspector General for Tax Administration (TIGTA)


      The law enforcement agency report must be signed by a police officer or equivalent, depending on the report received (or otherwise demonstrably show it was accepted by the law enforcement agency) and must contain the following:
      • The tax year(s) involved
      • Return preparer’s first and last name
      • A statement describing the preparer misconduct and theft of refund.

    6. Signing Preparer - Signature of the tax return preparer on the return filed by the preparer (Preparer information on electronic return)

      Note:

      A signing preparer is considered to have held themselves out as in the business of preparing tax returns. If there is no signing preparer, additional corroborating evidence for the ghost preparer is required.

    7. Ghost Preparer/Non-Signing Preparer - At least one (1) piece of evidence corroborating the person held themselves out as in the business or preparing returns and at least one (1) piece of evidence corroborating the preparer interacted with the taxpayer.
      1. At least one (1) piece of corroborating evidence the preparer was in the business or held themselves out as being in the business of preparing tax returns. This list is not all inclusive:
      • Copy of the tax return(s) provided by the tax return preparer showing the preparer’s signature as the paid preparer.
      • PTIN, TIN or EIN of the preparer
      • Business card of the preparer
      • Flyer or advertisement indicating return preparation services and name of preparer
      • Professional or business letterhead bearing name of the preparer
      • Business name on check from preparer
      • Letter addressed to the taxpayer from TIGTA or IRS criminal investigation regarding an ongoing investigation of the preparer (for purposes of establishing preparer held themselves out as a preparer)
      • Affidavit of person who hosted or sponsored the preparer (e.g., services provided by a preparer in the church basement – the church minister could provide an affidavit with details about when tax return preparation services were offered) or lease agreement (e.g., storefront location that is no longer open).
      • Documentation indicating state or local law enforcement investigations against the preparer
      AND
      2. At least one (1) piece of corroborating evidence the person named on the Form 14157 interacted with the taxpayer and submitted the return filed with the IRS. The evidence must show the preparer name, tax year in question with corresponding dates that indicate an exchange between the taxpayer and the preparer regarding the filing of a tax return. This list is not all inclusive:
      • Cover letter (including the tax return) received from the tax return preparer when the return was prepared
      • Form 8879, IRS e-file Signature Authorization, with signatures or evidence it was received from the tax preparer
      • Copy of negotiated check the taxpayer gave to the preparer for payment of services
      • Copy of “refund” check the taxpayer received from the preparer
      • Credit card statement reflecting charge in the preparer’s name for payment for services
      • Receipt from the preparer, reflecting a fee, for the preparation of a tax return for the year in question
      • Copy of paper check(s) reflecting the amount received by paper check, if applicable
      • E-mail or text messages exchanged between the taxpayer and preparer concerning the tax return preparation
      • Affidavit of person who hosted or sponsored the preparer (e.g., services provided by a preparer in the church basement – the church minister could provide an affidavit with details about when tax return preparation services were offered and that the taxpayer participated in the event.)

    8. General additional documentation that may be requested:
      • Copy of bank statement(s) reflecting the refund amount received by direct deposit, if applicable
      • Taxpayer’s bank statement(s) showing the refund was not deposited into the taxpayer’s account
      • Statement from bank where refund was deposited showing that the taxpayer had no ownership interest in the account
      • Copies of additional documents to support the claim

Identifying Potential RPM Issues - Telephone Assistors/Taxpayer Assistance Center (TAC) Overview

  1. The Service may receive contacts from taxpayers regarding a questionable experience with a tax return preparer. It must be determined whether the taxpayer’s circumstances meet potential RPM criteria or involves another issue in order to provide the appropriate guidance to the taxpayer. This section will also provide guidance on recognizing existing RPM cases.

    Reminder:

    Assistors must follow established procedures to identify the issue(s) and address the taxpayer’s inquiries accordingly. All normal procedures should be followed per IRM 21.1.3, Operational Guidelines Overview, IRM 21.3.4, Field Assistance, IRM 21.4, Refund Inquiries, and/or any other applicable function IRM guidance. This includes applying TAS criteria based on functional guidance.

  2. Taxpayers may become aware of the potential for return irregularities/inconsistencies when:

    • Contacted by the IRS (for example, Exam, AUR, IVO)

    • The taxpayer did not receive a refund

    • Advised by friends who used the same preparer

    • Media articles are released

  3. The mere mention of a preparer or complaint about a preparer does not automatically designate it as a return preparer misconduct issue that would require the filing of an RPM complaint. The information and chart that follow below provide various scenarios that can assist in making that determination.

  4. The employee must determine whether the taxpayer statements regarding the preparer involve any of the following. Proceed to the chart in paragraph (7) to determine the guidance to provide to the taxpayer.

    1. Return Preparer Office (RPO): The taxpayer complaint about a preparer involves Preparer Tax Identification Number (PTIN) misuse, misrepresentation of credentials, employment taxes and/or other issues (such as extreme fees, fee dispute or preparer did not provide copies of documents or provide explanations) and do not involve a request for correction of their personal tax return.
      The taxpayer is only reporting or informing on a person or business involved in tax preparation.

    2. Return Preparer Misconduct (RPM): The taxpayer was in contact with a preparer for the year of filing and is stating he/she did not authorize the filing of the tax return or he/she authorized the filing of a tax return however, the preparer altered data on their tax return and/or misdirected all or a portion of the refund. The taxpayer is requesting correction of their personal tax return.

    3. Identity theft with possible preparer involvement - The taxpayer was not in contact with a preparer for the year in filing however is stating that a preparer he/she used in a previous year filed a return without authorization.

      Caution:

      Do not confuse preparer misconduct with identity theft. Identity theft as defined in IRM 25.23.1.9, Key Definitions, is a fraud that is committed or attempted using a person's identifying information without authority. Follow normal procedures when addressing possible ID Theft scenarios.

      Example:

      In 2016 the taxpayer filed his own return and did not use a preparer. However, unbeknownst to the taxpayer, the preparer he used in 2015 filed a return in 2016 using the victim’s TIN without his permission. In 2016, the taxpayer was a victim of identity theft.

  5. The table below addresses specific scenarios that may indicate potential RPO, ID Theft and RPM situations and the actions required:

    Row If the taxpayer calls/visits and states: Then consider: And take the following actions:
    1. He/She was in contact with a preparer for the year of filing and the allegations involve PTIN misuse, misrepresentation of credentials, employment taxes and/or other issues (such as extreme fees, fee dispute or preparer did not provide copies of documents or provide explanations) and the taxpayer’s issue does not involve a request for correction of his/her personal tax return or a misdirected refund issue. RPO Issue • Advise the taxpayer to complete Form 14157, Complaint: Tax Return Preparer and mail or fax the completed form per the instructions
    2. He/She was not in contact with a preparer for the year of filing. An attempt to file his/her tax return electronically was rejected because of a previously filed return or the taxpayer alleges that the preparer he/she used in a prior year filed the tax return without authorization. Potential ID theft Issue • Follow normal procedures in your functional guidance, including ID theft procedures, if appropriate
    3. He/She was in contact with a preparer for the year of filing but did not sign or authorize the filing of a return. A tax return was filed with his/her name/TIN by that preparer and the taxpayer may or may not have received a refund.

    Included in this scenario are:
    • Taxpayers who visited a preparer to obtain a fee quote for tax preparation or a loan based on the anticipated income tax refund. The taxpayer left with the understanding no tax return would be filed.
    • Misled taxpayers who were advised they were entitled to a credit of some kind and had no knowledge of a tax return being filed.
    Potential RPM Issue • Refer to IRM 25.24.1.3.1, Telephone/TAC - Potential RPM Issues Are Present - Account Research and Actions, for specific guidance.
    4. He/She was in contact with a preparer for the year of filing and did authorize the return filing, but states the tax data (exemptions, income, expenses, deductions, credits, etc.) on his/her return was altered before it was filed, or the return otherwise includes items which he/she did not authorize.
    The taxpayer may or may not have received the amount of refund expected.
    Potential RPM Issue • Refer to IRM 25.24.1.3.1, Telephone/TAC - Potential RPM Issues Are Present - Account Research and Actions, for specific guidance.
    5. He/She was in contact with a preparer for the year of filing and did authorize the return filing, but states the only information changed on his/her return was the bank routing number and/or the bank account number and no refund was received
    or
    The taxpayer’s refund was sent to their preparer, but the preparer failed to:
    • deliver a refund check to the taxpayer
    • gave the taxpayer a refund for an improper amount
    • the refund check provided by the preparer "bounced"
    Potential RPM Issue • Refer to IRM 25.24.1.3.1, Telephone/TAC - Potential RPM Issues Are Present - Account Research and Actions, for specific guidance.
  6. RPM complaints are worked in IDTVA by specialized employees located in Kansas City, Atlanta and Memphis. Existing RPM complaints can be identified by one or more of the following:

    • Integrated Data Retrieval System (IDRS) control for CIS case with category IDII or RPMC.

    • An adjustment with reason code (RC) 131 is input for allowed, partially allowed or disallowed claims with the applicable blocking series.

    • TC 971 AC 504 with MISC code RPM1, RPM2, RPM3 or RPM4 is input on allowed or partially allowed claims.

  7. All normal procedures for addressing account conditions should be followed. Research the account and advise the taxpayer accordingly. For example:

    • Research AMS/CIS case notes to determine status of complaint.

    • Determine whether the time frame for resolution has passed (60 days from the receipt of the complaint). If it has passed and the taxpayer states he/she has provided all required information, send e-4442 per IRM 21.3.5.4.1, When to Preparer a Referral. Utilize IDRS Unit & USR Database (IUUD) or IDTVA Employee Lookup tool to determine the appropriate site based on the IDRS unit number and refer to IDTVA.

    • Research CC ENMOD to determine if a letter was sent to the taxpayer.

    • Research CC TXMOD to determine if an adjustment was input.

Telephone/TAC - Potential RPM Issues Are Present - Account Research and Actions

  1. Follow the procedures in this section only if it has been identified that a potential RPM issue is present per IRM 25.24.1.3, Identifying Potential RPM Issues - Telephone Assistors/Taxpayer Assistance Center (TAC) Overview.

  2. Research the account to confirm a tax return was filed using the taxpayer’s TIN. Refer to IRM 21.4.1.3.1, Locating the Taxpayer's Return.

  3. If the taxpayer’s complaint involves non-receipt of refund, follow normal procedures and initiate a refund trace, if applicable. Refer to the following IRM sections. This list is not all inclusive

    Reminder:

    Ensure the taxpayer has contacted his/her financial institution or preparer, prior to taking actions.

    • IRM 21.4.1.3.4, Refund Issued But Lost, Stolen, Destroyed or Not Received

    • IRM 21.4.1.4.7, Direct Deposits – General Information

    • IRM 21.4.2, Refund Trace and Limited Payability

    Note:

    If refund is frozen on the account and there is a potential RPM issue, advise taxpayer to submit an RPM complaint per (4)(b) below. Follow normal procedures for addressing any other issues identified.

  4. Advise the taxpayer:

    1. A refund trace will be performed and they will receive the results of the trace (if applicable).

    2. To submit the following forms to report the RPM claim and refer to the instructions on the Form 14157-A for additional required documentation to support their claim.
      1. Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit
      2. Form 14157, Complaint: Tax Return Preparer
      3. Tax return as intended to be filed, signed by the taxpayer

      Note:

      If the taxpayer states he/she is not required to file a tax return, advise the taxpayer to provide that statement in the explanation on the Form 14157-A.

    3. Allow 60 days from the time the Service receives a complete RPM complaint for resolution.

  5. TAC employees should not accept Form 14157-A without all of the supporting documentation. Advise the taxpayer to obtain the supporting documentation as referenced in the instructions on the form and either send the package to the appropriate campus or return to the TAC with the information. If the taxpayer returns to the TAC with the forms and supporting documentation, forward the package to the appropriate campus.

    Reminder:

    Assistors should not promise any particular outcome as a result of the taxpayer’s return preparer complaint. The IRS must evaluate each situation based on the particular facts and circumstances.

Complaint Submission - Where to Mail RPM Forms

  1. RPM complaints will be reviewed and resolved in various functions depending upon account conditions. It is important to advise taxpayers to send his/her claim to the proper function for review.

    Reminder:

    Please ensure the taxpayer’s are aware that the entire RPM complaint package including all of the required documentation should be mailed as shown below and as stated in the instructions on the Form 14157-A. The RPM package should NOT be mailed to the Return Preparer Office.

  2. If the taxpayer is submitting the complaint in response to a notice or letter received from the IRS, advise the taxpayer to:

    • Send the completed Form 14157-A, Form 14157, and other documents with a copy of the notice or letter to the address contained in that notice or letter.

      Example:

      If there is an open Exam case or a closed Exam case (posted TC 30X on the module), the complaint should be mailed to the appropriate Exam function for consideration.

    • If he/she does not have a copy of the notice/letter, follow your normal procedures on transferring the call to the appropriate function or provide the appropriate mailing address.

  3. If the taxpayer did NOT receive a notice from the IRS (there is NO compliance or Return Integrity and Compliance Services (RICS) involvement on the account) advise the taxpayer to submit his/her claim per the instructions on the Form 14157-A.

  4. Compliance employees receiving calls in response to compliance related notices and letters should instruct callers to submit the RPM documentation referenced above directly to the designated compliance function.

Potential RPM Issues - Non Specialized General Paper Overview

  1. Taxpayers claiming to be victim(s) of return preparer misconduct must submit a complaint and the required documentation to the IRS to request relief.

  2. The types of complaints will fall under either Compliance complaints or Non-Compliance complaints. The applicable function will take the required actions to resolve the preparer misconduct complaint per the procedures located in their functional guidance.

    1. Compliance complaints: A complaint from a taxpayer who has current or previous compliance involvement with the Service will be worked by the appropriate IDTVA compliance (IDTVA-C) function. It includes but is not limited to an account of a taxpayer who became aware of return irregularities/inconsistencies as a result of:
      • Audit notice or assessment (-L freeze, Transaction Code (TC) 420/424, TC 300)
      • AUR notice; such as CP 2501 or CP 2000
      • Collection notices
      • Contact by RO, RA, TCO, TA or other Field employee

    2. Non-Compliance complaints: A complaint with no evidence of compliance involvement (e.g., taxpayer who became aware of the potential for return irregularities/inconsistencies through friends who used the same preparer, through media releases or received a notice/letter from the Service) will be worked by the appropriate function outside of compliance. This could include:
      • IDTVA Accounts Management (IDTVA-A), or
      • Integrity & Verification Operations (IVO)

    Exception:

    For RPM specialized teams: If -L freeze posts after you have taken action on the account (i.e., there was no -L freeze on the account initially, but while your case was in suspense, -L freeze posted), IDTVA-A will continue to work the case if the AIMS status code is 08 or less. Once final closing determination has been made, send e-mail to Exam per the Employee Group Code (EGC) Listing Contacts chart on SERP, advising of the actions taken. If AIMS status code is over 09, reassign to Exam per the chart in IRM 25.24.1.4.1.

  3. If a complaint is received in a function and it is determined another function is responsible for resolution, the complaint should be routed/reassigned on CIS to the applicable function. Refer to IRM 25.24.1.4.1, Routing Information - Paper.

Routing Information - Paper

  1. A case should be routed/reassigned to the designated function responsible for RPM resolution only when:

    1. A taxpayer initiated RPM complaint is received in a function and it is determined another function is responsible for the RPM resolution (such as complaint received in AM and there is compliance involvement or vice versa).

    2. Form 14157–A complaint is received outside of RPM specialized function (such as, Form 14157–A is attached to Form 1040 (DUPF) or Form 1040X).

    3. Form 14039, Identity Theft Affidavit, is received and the taxpayer is alleging he/she went to a preparer for the year in question and the preparer filed an altered return, filed a return without their knowledge and consent and/or misdirected the refund AND a -A freeze is present on account or the taxpayer’s good return is unprocessed within the CIS case. Refer to IRM 25.23.3.2.2, Self-Identified - Tax-Related Identity Theft - IDT2 - AM IDTVA-IPSU only or IRM 25.23.4.6.2, Required Action on All Identified IDT Cases, for additional information.

      Caution:

      A case reassigned/routed in error will be returned to the originator with an explanation. The mere mention of a preparer or complaint about a preparer does not automatically designate it as a return preparer misconduct case that requires routing/reassignment. There is no IRS identified preparer misconduct scenarios, only taxpayer initiated. Route/reassign cases only if the criteria in (1) is met.

      Example:

      Do not route/reassign if:
      A Form 1040X or DUPF is received that states a preparer omitted an item or added an item in error and no Form 14157-A is included.

  2. All employees are required to perform Integrated Data Retrieval System (IDRS) research to determine where the case should be routed.

  3. Prior to routing/reassigning the case to the applicable function, when a current year account, input TC 971 AC 850 if entire credit is frozen on account or if conditions in IRM 21.4.1.4.7.1, Direct Deposit of Refunds, (4) are present. The input of the TC 971 AC 850 ensures any subsequent refund will not be direct deposited and will be issued as a paper check.

  4. If there are multiple years involved and there is compliance involvement on at least one of the years involved then reassign all years to the applicable IDTVA-C function.

  5. If a loose Form 14157 is received and there is no indication that it involves a request for correction of the taxpayer’s personal tax return, route to the RPO office per the chart in IRM 25.24.1.3. Otherwise, refer following the chart below.

  6. Refer to chart below for examples:

    Row If ... And ... Then ...
    1. Frivolous Return Program (FRP) involvement
    For example:
    • F- freeze and an unreversed TC 971 AC 089

    • MFT 55 or MFT 13 account with posted TC 240 reference code 666



    NOTE: FRP involvement takes precedence over any other compliance involvement.
    Route to FRP.
    Internal Revenue Service - FRP
    M/S 4450 OSC
    1973 N. Rulon White Blvd.
    Ogden, UT 84404
    2. -L freeze and AIMS status is 06 through 89 There is no RICS involvement and PBC 19X or 29X and EGC 5XXX Refer to IDTVA-C.
    If on CIS: Update data to:
    • Doc type: COMP RPM

    • Category code IDII

    • Program code 710-85431

    • Set Priority to 3

    • Reassign to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ,

    Exception:

    If the CIS case is currently assigned to an IDTVA-C employee (1185X or 1187X), then reassign case to that employee and link cases.


    If NOT on CIS:
    FAX case to the appropriate IDTVA-C Examination functional liaison based on the PBC, per listing on SERP under Who/Where tab, AM IDTVA Functional Identity Theft Liaisons.
    http://serp.enterprise.irs.gov/databases/who-where.dr/idt-liaison-listing.html.
    3. -L freeze and AIMS status is 10 or below Open in Field Exam - (PBC 20X and EGC 1XXX or 2XXX only) Refer to IDTVA-C.
    If on CIS: Update data to:
    • Doc type: COMP RPM

    • Category code IDII

    • Program code 710-85431

    • Set Priority to 3

    • Reassign to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ,

    Exception:

    If the CIS case is currently assigned to an IDTVA-C employee (1185X or 1187X), then reassign case to that employee and link cases.


    If NOT on CIS:
    FAX case to the appropriate IDTVA-C Examination functional liaison based on the PBC, per listing on SERP under Who/Where tab, AM IDTVA Functional Identity Theft Liaisons.
    http://serp.enterprise.irs.gov/databases/who-where.dr/idt-liaison-listing.html.
    4. -L freeze and AIMS status is greater than 10 Open in Field Exam - (PBC 20X and EGC 1XXX or 2XXX only) Route to appropriate area using the Exam Employee Group Code (EGC) Contacts listing on SERP under Who/Where tab.
    5. Posted TC 30X-Exam Assessment input by Campus Exam - (PBC 19X or 29X and EGC 5XXX) or Field Exam -(PBC 20X and EGC 1XXX or 2XXX) Refer to IDTVA-C.
    If on CIS: Update data to:
    • Doc type: COMP RPM

    • Category code IDII

    • Program code 710-85431

    • Reassign to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ,

    Exception:

    If CIS case is currently assigned to an IDTVA-C employee (1185X or 1187X), then reassign case to that employee and link cases.


    If NOT on CIS:
    Fax case to the appropriate IDTVA-C Examination functional liaison based on the PBC, per listing on SERP under Who/Where tab, AM IDTVA Functional Identity Theft Liaisons.
    http://serp.enterprise.irs.gov/databases/who-where.dr/idt-liaison-listing.html.
    6. TC 922 - AUR involvement regardless of process code Refer to IDTVA-C.
    If on CIS: Update data to:
    • Doc type: COMP RPM

    • Category code IDII

    • Program code 710-85431

    • Set Priority to 3, if doc type is AUR Open RPM

    • Reassign to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ,

    Exception:

    If CIS case is currently assigned to an IDTVA-C employee (1185X or 1187X ), then reassign case to that employee and link cases.


    If NOT on CIS:
    Fax case to the applicable IDTVA-C AUR functional liaison, per listing on SERP under Who/Where tab, AM IDTVA Functional Identity Theft Liaisons.
    http://serp.enterprise.irs.gov/databases/who-where.dr/idt-liaison-listing.html
    7. Status 22 – ACS • If there is other compliance activity that created the balance due (such as an Exam or AUR assessment) on the account, route/reassign to the applicable IDTVA-C functional liaison per this chart.
    • If there is no other compliance involvement, refer to IDTVA-A:
    If on CIS: Update data to:
    • Doc type: Return Preparer Misconduct

    • Category code RPMC

    • Program code 710-85440

    • Reassign to ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡


    If NOT on CIS:
    Do not detach Form 14157-A from any forms included. Route the entire package to local ICT for scanning to CIS.

    Note:

    Specialized RPM functions will complete Form 14394 upon receipt of the Status 22 case. Refer to IRM 25.24.2.3.1, Reroute Criteria, Exception, for additional information regarding the completion of the Form 14394.

    8. IVO involvement and RPM complaint involves the original return:
    For example (Not all inclusive):
    • TC 971(s) with AC(s) 121/124/129/134/617/199

      Note:

      Misc. field literals must be IVO related.

    • UPC 147 RC 7 or 8

    • OMM indication and ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on CC TRDBV

    Route to:
    Austin IVO Function
    Mail Stop 6579 AUSC
    3651 S Interregional HWY 35
    Austin, TX 78741-0053
    9. IVO involvement and RPM complaint does not involve the original return

    Example:

    The allegation involves the filing of an unauthorized Form 1040X.

    Do not route to IVO. Refer accordingly based on the compliance or non-compliance involvement guidance in this chart.
    10. Criminal Investigation (CI) involvement and no other compliance or RICS involvement;
    For example:
    • Z freeze

    • TC 914/916/918

    • Taxpayer statement indicates contact with CI

    Refer to IDTVA-A.
    If on CIS: Update data to:
    • Doc type: Return Preparer Misconduct

    • Category code RPMC

    • Program code 710-85440

    • Reassign to ≡ ≡ ≡ ≡ ≡


    If NOT on CIS:
    Do not detach Form 14157-A from any forms included. Route the entire package to local ICT for scanning to CIS.

    Exception:

    If there is compliance or RICs involvement, route/reassign to the applicable function following the guidance in this chart.

    11. Appeals involvement Do not route to Appeals.
    If RICS involvement, route to IVO.
    If no RICS involvement, refer to IDTVA-C.
    If on CIS: Update data to:
    • Doc type: COMP RPM

    • Category code IDII

    • Program code 710-85431

    • Set Priority to 3

    • Reassign to ≡ ≡ ≡ ≡ ≡ ≡ ,


    If NOT on CIS:
    Do not detach Form 14157-A from any forms included. Route the entire package to local ICT for scanning to CIS.
    12. No compliance or RICS involvement Refer to IDTVA-A.
    If on CIS: Update data to:
    • Doc type: Return Preparer Misconduct

    • Category code RPMC

    • Program code 710-85440

    • Reassign to ≡ ≡ ≡ ≡ ≡

    Exception:

    If the CIS case is currently assigned to an IDTVA employee (11817 or 11811), then reassign case to that employee and link cases.


    If NOT on CIS:
    Do not detach Form 14157-A from any forms included. Route the entire package to local ICT for scanning to CIS.