25.25.8 Revenue Protection External Lead Procedures

Manual Transmittal

September 25, 2020

Purpose

(1) This transmits revised IRM 25.25.8, Revenue Protection External Lead Procedures.

Material Changes

(1) IRM 25.25.8.2(3)&(4) - Added procedures to address responding to leads from CI and SBSE, IPU 20U0523 issued 04-20-2020.

(2) IRM 25.25.8.2.3(2) - Removed point of contact name and restricted the address listed for official use only. Effective 10-01-2020.

(3) IRM 25.25.8.3(5)k - Added the word Not back to the sentence to clarify guidance to follow with an open control base. No IPU as the edit was main response to a managerial review for clearance. Effective date will be 10-01-2020.

(4) IRM 25.25.8.3(6)Blk 8 - Added procedures for working leads from CI and SBSE. IPU 20U0523 ISSUED 04-20-2020.

(5) IRM 25.25.8.4(1) - Added guidance for TEs to follow when funds involving a lead from CI or SBSE are recovered. IPU 20U0523 issued 04-20-2020.

(6) IRM 25.25.8.4(7) - Updated the instructions to address a programming limitation with the External Lead IAT tool which was causing NQRS errors. IPU 20U0621 issued 05-18-2020.

(7) IRM 25.25.8.4(8)box 7 - Updated the control base data to correct previous instructions. IPU 20U0261 issued 02-13-2020

(8) IRM 25.25.8.4(8)box 8 - Removed the guidance that incorrectly had TEs referring dormant accounts to ACE adjustments. No IPU, as this was done in response to comments from a managerial review during clearance. Effective date 10-01-2020.

(9) IRM 25.25.8.7(2) box 2 - Removed the 2nd AND condition as the statement was redundant. No IPU, as this was done in response to comments from a managerial review during clearance. Effective date 10-01-2020.

(10) IRM 25.25.8.9 - Updated, revised, and removed procedures throughout this subsection in accordance with reviews conducted and procedural changes. IPU 20U0766 issued 07-08-2020.

(11) IRM 25.25.8.11.1 - Updated and clarified procedures in accordance with reviews conducted on Treasury Checks received. IPU 20U0638 issued 05-26-2020.

(12) IRM 25.25.8.11.2 -Updated and clarified procedures in accordance with reviews conducted on Third-party and Miscellaneous check inquiries. IPU 20U0638 issued 05-26-2020.

(13) IRM 25.25.12(6) - Removed from the R23 guidelines, obsolete procedures listed for pulling checks manually. No IPU, as this was done in response to comments from a managerial review during clearance. Effective date 10-01-2020.

(14) IRM 25.25.8.12.2(5) - Removed the guidance as it was not relevant to procedures for processing the R23 inventory. No IPU, as this was done in response to comments from a managerial review during clearance. Effective date 10-01-2020.

(15) IRM 25.25.12.4 - Added an overview of the Undeliverable Refunds to clarify what this section entails. No IPU, as this was done in response to comments from a managerial review during clearance. Effective date 10-01-2020

(16) IRM 25.25.8.12.4(2) - Removed the statemenmt pertaining to FRE as that information should be in the FRE IRM. The statement however was addded as Note in box 6 of the table. No IPU, as this was done in response to comments from a managerial review during clearance. Effective date 10-01-2020

(17) IRM 25.25.8.13 - Removed this subsection as the procedures are no longer applicable since programming was implemented to pull the data from a database. IPU 20U0523 issued 04-20-2020.

(18) IRM 25.25.8-1 Updated the category codes E1 through E4 with E5-E8 to allow mass push to scheme. Also the description for PU was updated as the instructions was not clear.

(19) IRM 25.25.8-5 - Deleted, process no longer used. IPU 19U1294 issued 12-16-2019.

(20) Editorial changes made throughout the IRM section for

  • Correcting organization name

  • Correcting spelling, grammar and updating acronyms

  • Correcting mailing address and the point of contact

  • Added references and links for quicker access to the portal and forms

  • Plain language review updates

  • Rewrote instructions in 25.25.8.12(5) to make it clearer to read and added to the Exception a provided the specifics for MISC category for TPP cases.

  • DLN identifier was added to assist with determining if the recovery was from a R17 or R23.

The changes are included in IPUs 20U0523, 20U0638 and 20U0766

Effect on Other Documents

IRM 25.25.8 effective 10-01-2019 is superseded. This IRM also incorporates the following IRM Procedural Updates (IPUs) - IPU 19U1294 issued 12-16-2019 , 20U0523 issued 04-20-2020, IPU 20U0621 issued 05-18-2020, IPU 20U0638 issued 05-26-2020, IPU 20U0766 issued 07-08-2020 and update to IRM 25.25.8.2.3(2) effective 10-01-2020.

Audience

Campus employees Return Integrity Verification Operations

Effective Date

(10-01-2020)

Related Resources

The related resources listed below may be accessed for account research and issue resolution:

  • Electronic Fraud Detection System Database (EFDS)

  • Lead Management System (LMS) and Offset Reversal Lead (OSRL)

  • External Lead Integrated Automated Technologies (IAT) Tool

  • RIVO Portal External Lead RIVO

Denise D. Davis
Director, Return Integrity Verification Program Management
Wage and Investment Division

Program Scope and Objectives

  1. Purpose and Program Goals: This IRM section provides guidance for Return Integrity Verification Operations (RIVO) employees when screening Individual Master File (IMF) returns in the Electronic Fraud Detection System (EFDS) for possible identity theft and false income and withholding. Program goals for the program are in the Operation Guidelines as well as IRM 1.4.10, Return Integrity & Verification Operation Managers Guide.

  2. Audience: The audience intended in this IRM is RIVO employees.

  3. Policy Owner: The Director of Return Integrity Operations (RIO) is the policy owner of this program.

  4. Program Owner: RIVPM is the program office responsible for oversight over this program.

Background

  1. Return Integrity Verification Program Management (RIVPM) strengthens the integrity of the tax system by:

    • Protecting the public interest by improving IRS’s ability to detect and prevent improper refunds

    • Serving the public interest by taking actions fairly and appropriately to identify, evaluate and prevent the issuance of improper refunds

    • Helping taxpayers understand the refundable tax credits for which they are eligible

Program Management and Review

  1. The program has reports such as; the Return Integrity Verification Operation (RIVO) Monthly Performance Comparison Report, to track the inventory, including receipts and closures. Additional report guidance is found in IRM 1.4.10, Return Integrity & Verification Operation Managers Guide.

  2. The Embedded Quality review program is in place to review all processes to ensure accuracy and effectiveness of the program. Goals, measures, and operating guidelines are listed in the yearly Operation Guidelines and in IRM 21.10.1, Embedded Quality (EQ) Program for Accounts Management, Campus Compliance, Field Assistance, Tax Exempt/Government Entities, Return Integrity and Compliance Services (RICS), and Electronic Products and Services Support.

Authority

  1. The following references provide authority for RIVO:

    • IRM 1.2.1.5.10, Policy Statement 4-21

    • IRM 1.2.2, Servicewide Policies and Authorities, Servicewide Delegations of Authority.

    • IRM 1.1.13, Wage and Investment

    • Various Internal Revenue Codes (IRC) including but not limited to:

    • IRC § 6402(a), Authority to make credits or refunds

    • IRC § 6401, Amounts treated as overpayments

    • IRC § 6404, Abatements of tax

    • IRC § 6213, Restrictions on assessments and math error authority

Responsibilities

  1. RIVPM has responsibility for information in this IRM. Information is published in the IRM on a yearly basis.

  2. The Director of RIVPM is responsible for the policy related to this IRM.

  3. The Chief of the RIVPM Policy & Analysis is responsible for ensuring this IRM is timely submitted to publishing each year.

  4. More information can be found in IRM 1.1.13.5, Return Integrity and Compliance Services.

Acronyms

  1. For a list of Acronyms used throughout RIVO see IRM 25.25.1.1.5, Acronyms

Related Resources

  1. The related resources listed below may be utilized for account research and issue resolution. These related resources may be accessed through the IRS Intranet-Servicewide Electronic Research Program (SERP) site.

    • Electronic Fraud Detection System (EFDS)

    • Lead Management System (LMS)

    • Offset Reversal Lead (OSRL)

    • External Lead Integrated Automated Technologies (IAT) tool

    • RIVO Portal for External Lead RIVO

  2. IDRS restricted access accounts are accounts where a user must request special permissions to access the account through IDRS. Follow IRM 21.2.1.3.2, Authorized IDRS Access.

    Exception:

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

  3. The IRS adopted the Taxpayer Bill of Rights (TBOR) in June 2014. See IRC § 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see The IRS outlines the Taxpayer Bill of Rights.

External Lead Program Overview

  1. An External Lead involve questionable federal tax refunds from financial institutions and various other sources. A lead can be a Treasury Check, direct deposit/Automated Clearing House (ACH), refund anticipation loan check or pre-paid debit card. The IRS RICS’ External Lead Program is responsible for receiving and processing leads and ACH credits returned by financial institutions and other sources. RIVO External Lead teams work with IRS Submission Processing to receive questionable leads, screen and validate them and subsequently request the recovery of refunds to reconcile the accounts.
    Lead Sources include:

    • Criminal Investigation

    • Refund Inquiry

    • Financial Institutions

    • Federal and State agencies

    • National Banks

    • State Banks

    • Savings and Loan Associations

    • Mutual Savings Banks

    • Credit Unions

    • Brokerage Firms

    • Government Agencies

    • Correctional Facilities

    • Various Other Sources

  2. Leads should be received into the general mailbox as follows:
    For External Use - efleads@irs.gov
    For Internal Use - *W&I-RICS External Fraud Leads

    Exception:

    Taxpayer Advocate Service (TAS) follows the Return Integrity and Compliance Service (RICS) Service Level Agreement (SLA) addendum procedures.

  3. Lead source will be notified in 10 days to return or keep the funds, unless the lead contains a large volume of accounts.

External Lead Mailbox Process

  1. Employees assigned to the mailbox process will review e-mails received, and identify lead types and/or inquiries by flag. Follow local procedures for flag determinations.

    Note:

    If the inquiry is from a new financial institution, send the Publication 5033, IRS External Leads Program: Fact Sheet on Submitting Leads and the Lead Submission Spreadsheet Template using the applicable feedback script.

    Note:

    If the inquiry requires elevation to headquarters , flag e-mail red and then local procedures for elevation.


    Lead Types
    • TOP Offsets

    • Refund Anticipation Loan (RAL)

    • Leads with funds available

    • Lead only (no funds available) - follow procedures in IRM 25.25.8.2.1, Lead Only (No Funds Available).

    • Automated Clearing House (ACH) Reversals - follow procedures in IRM 25.25.8.2.2, Automated Clearing House (ACH) Reversals.

    • Altered Checks -- follow procedures in IRM 25.25.8.2.3, Altered Checks

    • Other Inquiries such as:
      Third-Party Check Recovery (Centralized Check Process), Taxpayer Inquiries, Reclamation Claims, etc.

  2. Update lead information on the Financial Contact Information spreadsheet on the Austin Shared drive. Create the lead number in the following order: , date of receipt (MMDDYY), then sequence number (xx ) based on order received during the day. For example enter the second lead received on February 2, 2016 as, 020216 02.

    Note:

    Mark Business Master File (BMF) leads with the letter B following the lead number. Flag e-mail per local procedures and assign to Ogden.

  3. Issue an acknowledgement e-mail to the financial institution with the assigned lead number.

    Exception:

    If the lead source comes from Criminal Investigation (CI) or Small Business Self Employed (SBSE) personnel, do not send the bank an acknowledgement e-mail.

    Reminder:

    If the financial institution does not send the approved spreadsheet, first check the bank point of contact list for an explanation. If no previous explanation given, attach the Lead Submission Spreadsheet Template and include the Non-Standard External Lead Template feedback script along with the acknowledgment script. Annotate the spreadsheet with the financial institutions response. Add "agreed" , or if the financial institution is unable to use the spreadsheet, add comment "unable to use" , etc.

    Note:

    If the e-mail/attachments contain unsecured /unencrypted Personally Identifiable Information (PII), ensure the acknowledgment reply includes the encryption feedback script.

    Caution:

    DO NOT disclose internal research guidance in e-mail referrals. Also, remove all internal information from correspondence received from the SA and/or HQ before sending to the financial institution.

  4. Create the lead folder as follows: using the naming convention: lead number, financial institution name, and first initial, last name of the Point of Contact (POC) who submitting the lead. Save to the designated site folder.

    Note:

    If the lead was submitted by CI or SBSE Collection personnel, the folder name should include an abbreviated job title for the point of contact and their last name. For example, if a lead was submitted by CI Investigative Analyst Joe Hog the folder should be named 030920 01 West Bank IA Hog.


    The following items must be saved to the lead folder:
    • Original e-mail saved as PDF

    • Acknowledgement e-mail saved as a PDF

    • Spreadsheets/attachments received with the e-mail (Lead Submission Spreadsheet)

    • All follow-up/inquiry e-mails associated to the lead saved as a PDF

    Caution:

    Do not edit or modify any original documents received.

  5. Lead folders will be placed in the appropriate site’s folder.

    Note:

    Business Master File (BMF) leads found in the External Lead mailbox will be flagged for Ogden review and placed in that site’s folder.

  6. Import all leads to the Lead Management System (LMS). Review LMS for successful import.

    Exception:

    DO NOT load "Lead Only - No Funds" .

    Reminder:

    Please ensure to load the institution’s Routing Transit Number whenever present on the spreadsheet.

  7. Some leads may require priority handling, including pre-refund stop date research and verification. (Such as Lead only and ACH reversals).

Lead Only (No Funds Available)

  1. Contact the financial institution to ensure there are no funds available.

  2. Do not create a lead number or import to Lead Management System (LMS).

  3. Send acknowledgement using "Lead Only" feedback script.

  4. Refer all leads where no funds are available to the Industry Lead Mailbox using ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, "lead only" as the subject line.

    Reminder:

    Do not forward e-mails sent from the bank secured website. Create a new e-mail, include attachments and a secure password.

    Reminder:

    This is not an encrypted mailbox. Therefore, create a password protected zip file, and then send the referral to Industry Fraud Leads. A confirmation e-mail will be received by the sender once the file is received. Refer to IRM 10.5.1.6.2, Encryption, for additional guidance when encrypting SBU data (including PII and tax information).

Automated Clearing House (ACH) Reversals

  1. Open the ACH control base as " C#,BKLDACHREV, A, MISC,1481X00005" .

  2. Initiate refund stopping actions, and follow procedures in IRM 25.25.2.4, Stopping the Refund.

  3. Send the ACH Reversal feedback script by e-mail and attach Pub 5033, "IRS External Leads Program: Fact Sheet on Submitting Leads" to the financial institution.

Altered Checks

  1. Work the lead per IRM 25.25.8.2, External Lead Mailbox Process.

  2. When an altered check is identified in the mailbox process, send the applicable script to the financial institution to request an image of the front and back of the altered check and instructions to return the physical check to Criminal Investigation (CI)(see the address below).

    Caution:

    When received, handle an original check with rubber gloves, place in a plastic bag and mail to: .


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  3. Assign the PDF copy of the check(s) a new lead number, by adding an "A" to the original lead number and refer the lead to the altered check POC.

Other Inquiries

  1. Inquiries or other miscellaneous information may be found while reviewing the External Lead mailbox.

  2. Inquiries requiring elevation to RIVPM Policy Analyst External Lead program POCs

  3. Send taxpayer inquiries received in the lead mailbox an acknowledgement using feedback script "Taxpayer inquiries" .

  4. When replying to the bank/financial institution for reclamation claims include the feedback script "Reclamation Claims" . Flag the e-mail and forward it to the site assigned the lead.

  5. Recovery from 3rd party check e-mails will be assigned to the Centralized Check Process (CCP) POC. Do not create a lead on these referrals. Scan the third-party check and save to the CCP folder. Notate on photocopy if original check or copy of check received.

Processing External Leads

  1. The Lead Management System (LMS) is used to assign a lead to Tax Examiners (TE). Export the LMS spreadsheet and review all information provided in the lead folder.

  2. If the lead is incomplete, refer the lead to the local point of contact (POC) to contact the institution for the information missing.

    Reminder:

    Save any additional e-mails/attachments received to the associated lead folder as a PDF.

    Reminder:

    Update the institution’s RTN if not present on the spreadsheet. Attempt to retrieve the number from EFDS or CC IMFOBT. If the routing number is not available input a zero in the field in LMS.

    Note:

    If an altered check is found within the lead, extract the information and create a new lead number that consists of the original lead number followed by an "A." Refer the new lead to the local POC to request for the physical check to be returned. See procedures in IRM 25.25.8.3.1 for more information.

    Note:

    If the institution response contains a statement that all available information is provided, do not contact the institution.

  3. Research the account for TC 971 AC 123 with MISC field "TPP Recovery." If present, do not research further, request the financial institution return the funds.

  4. The External Lead (EL) IAT tool is used to input a TC 971 AC 134, TC 971 AC 850 (current year returns only), and to open a control base on IDRS, "C#,BKLD,A,MISC
    148(XX)00001,*" .

    Note:

    Review the detail report from the EL IAT tool ensuring actions were input to the correct tax period. Manually input action that did not populate from the tool.

    Reminder:

    Do Not open controls on the Internal Revenue Service Number (IRSN) when the SSN is available. See IRM 3.21.263.5.5, Internal Revenue Service Number (IRSN), for other IRSN uses.

    Reminder:

    If you determine the funds were not from the IRS , do not request them to be returned. Close the control with "NOTIRSFNDS,C,MISC" and update LMS comments. If the refund is from a federal agency other than the IRS, respond using the Non IRS Refund Check script located at the RIVO Portal External Lead Feedback Script page.

  5. The EL IAT tool makes a determination. If the tool was unable to decide, follow the research steps below to assist in a manual determination:

    1. Review the reason for referral provided by the financial institution.

    2. Follow IRM 25.25.2.2, Data Mining Screening, to help in making a determination.

      Exception:

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

      Note:

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

    3. Identify any previous IDRS reversal adjustments on the account.

    4. Review the account for Exam activity (TC 42X, -L freeze etc.).

      Note:

      If Exam closed their audit and allowed a "no-change" determination (TC 300 .00 with no other credit reversals), consider the return valid as filed. Do not request for the funds to be returned. . If the funds were already returned, release the funds.

    5. Search entity modules for indications of identity theft such as a previously posted TC 971 with Action Code (AC) 5XX. See IRM 3.5.20.2.8.1, Identity Theft Indicator.

    6. Review IDRS for any payments (TC 610, TC 670, TC 430, TC 716, etc.).

    7. Review account for any balance due conditions (this may indicate other actions taken on the account).

    8. Review IDRS for extension to file (TC 460).

    9. Review EFDS notes for indication of previous RIVO involvement.

    10. Review account for posted TC 971 action code 078, indicating forgery.

      Note:

      Research for open issues and use Contact Employer for any previous verified good IDOCs.

    11. Review IDRS CC TXMOD for the tax period in question and ensure there are not any open controls not in "B" status. Contact the open control, if found, before taking any action.

  6. After making a determination, follow the table below.

    If And Then
    1
    the return is two years prior or older to the current processing year

    Note:

    NO further research is required

    • Update/Input IDRS control to "Cxx,REQFUNDS,A,MISC
      148XX00002"

    • Prepare indemnification letter to request funds from the financial institution.

    • Update EFDS notes with" BKL lead number (lead# =MMDDYY XX) REQFUNDS IDT" .

    • Import LMS spreadsheet with results to the "Update" folder.

    • Notify POC that the indemnification process is complete.

    2
    the return is current processing year or one year prior
    the return is questionable AND no funds were received with the lead
    • Update/Input IDRS control to "Cxx,REQFUNDS,A,MISC
      148XX00002"

    • Prepare indemnification letter to request funds from the financial institution and save in the associated lead folder.

      Note:

      When necessary update Lead Template with funds to be returned/not returned for all associated accounts and save in the associated lead folder.

    • Update EFDS notes with" BKL lead number (lead# =MMDDYY XX) REQFUNDS" .

    • Import LMS spreadsheet with results to the "Update" folder.

    • Notify POC that the indemnification process is complete.

    3
    the return is questionable
    funds were received with the lead See IRM 25.25.8.4, Processing External Lead Deposits.
    4
    the return is valid
    no funds were received with the lead
    • Update/Input IDRS control to "Cxx,VALID150,C,MISC
      148XX00007" .

    • Update EFDS notes with" BKL lead # (lead# =MMDDYY XX) VALID150" .

    • Input TC 972 AC 134 to reverse IVO indicator.

      Reminder:

      If a TC 971 AC 134 is not already on the account, do not input a new TC 971 AC 134. Input a history on CC TXMOD as "ValidNo134".

      Note:

      When necessary, update and save Lead Template with funds to be returned/not returned for all associated accounts.

    • Import LMS spreadsheet with results to the "Update" folder.

    • Notify POC that the indemnification process is complete.

    5
    the return is found to be valid
    funds were received with the lead See IRM 25.25.8.4, Processing External Lead Deposits.
    6
    the return is good or bad
    no funds are available to be returned (the spreadsheet from the bank shows $0 available)
    • Update/close the control to "NOFNDSAVLB,C" .

    • Add a note to EFDS , Lead number and "no funds available" .

    • Update LMS.

    7
    The return is good or bad
    there is "TPP RECOVERY" in the MISC field
    • Update/Input IDRS control to "Cxx,REQFUNDS,A,MISC
      148XX00002"

    • Prepare indemnification letter to request funds from the financial institution and save in the associated lead folder.

      Note:

      When necessary update Lead Template with funds to be returned/not returned for all associated accounts and save in the associated lead folder.

    • Update EFDS notes with" BKL lead number (lead number =MMDDYY XX) REQFUNDS" .

    • Import LMS spreadsheet with results to the "Update" folder.

    • Notify POC that the indemnification process is complete.

    8
    Lead is submitted by CI or SBSE Collection personnel

    Note:

    Return is always considered bad

    • Update/Input IDRS control to "Cxx,REQFUNDS,A,MISC
      148XX00002"

    • Prepare an indemnification letter to request the refund be returned.

    • Send the bank POC the Non-bank Recovery Assistance feedback script and the indemnification letter. Send both the day the lead is received unless it’s after hours. Then send the next business day. Save both and all follow-up e-mail inquiries to the associated lead folder.

      Reminder:

      Copy the lead source on all e-mail inquiries.

      Note:

      If the lead source does not provide a bank POC, check the financial Institution POC Listing for a good contact. Send the the letter and script to that bank POC email address.
      If no reliable bank POC is found, notify the lead source a bank POC email address needs to be provided to issue the request.

    • Update EFDS notes with" BKL lead # (lead# =MMDDYY XX ) REQFUNDS IDT" .

    • Import LMS spreadsheet with results to the "Update" folder.

Processing Altered Checks

  1. Altered checks are those altered by someone to change the payee and/or payment amount of the originally issued check.

  2. Upon the receipt of the physical check, send the actual voided physical check to theCriminal Investigation (CI) POC.

    If And Then
    1
    Altered name and/or money amount
    the good return and the check was not negotiated
    • Access TCIS to F stop the check

    • Monitor for TC 841 to post, suspend to 148XX00017

    • Request physical check from the financial institution

    • Reissue to good taxpayer after TC 841 posts

    2
    Altered name and/or money amount
    questionable refund and the check was not negotiated
    • Access TCIS to F stop the check

    • Request physical check from the financial institution

    • Monitor for TC 841 to post,, suspend to 148XX00014

    • Disposition to ACE/ADJ once funds post to the account

    • Input an EFDS return note of "IVO EL IDT BKLD" .

    3
    Altered name and/or money amount
    the good return and the check was negotiated
    • Open a closed IDRS control:
      "C#,ALTEREDCK,C,EVFY "
      1481X00003,*

    • Update AMS and EFDS notes, notate "Received altered treasury check" enter, altered dollar amount, original dollar amount, and check number. Indicate if the original or a copy of the check was received.

    4
    Altered name and/or money amount
    questionable refund and the check was negotiated
    1. Input TC 971 AC 134 (if not already present)

    2. Open a closed IDRS control:
      "C#,ALTEREDCK,C,EVFY "
      1481X00003,*

    3. Request physical check from the financial institution

    4. Update EFDS notes , notate Received altered treasury check, altered dollar amount and original dollar amount, check number, indicate if original check received or copy.

      Note:

      Disposition as "CAT 5 CL" if resolved by another function. Disposition as "CAT 7 CL" if resolved by IVO.

      Note:

      If Process Status 49, follow local procedures to update.

      Note:

      Add prior year processed returns to the Mass Push Spreadsheet to be updated.

    5. Update AMS History notes with same information as EFDS notes.

    6. If indications of Identity theft, input TC 971 AC 522 (if one does not already exist on CC ENMOD).

    7. Close all IVO controls.

Processing External Lead Deposits

  1. Once notification is received that funds have been returned, export the Lead management System (LMS) spreadsheet and review all information provided in the lead folder. Use of the EL IAT tool is mandatory when working deposits.

    Note:

    If the lead source came from CI or SBSE Collection personnel, notify them the amount of funds recovered.

    Exception:

    Work tool rejects manually.

    Caution:

    Use CMODE for the correct location when inputting a TERUP.

    Reminder:

    Review LMS spreadsheet to ensure deposit information is accurate and update if necessary.

    Reminder:

    Update the institution’s RTN if not present on the spreadsheet. Attempt to retrieve the number from the Electronic Fraud Detection System (EFDS) or Command Code (CC) IMFOBT. If the routing number is not available, input a zero in the field in LMS.

    Exception:

    Deposits with no x-ref lead number will need a lead number assigned, lead/deposit folder created, and an initial import to LMS.

    Create the lead number using the RIVO received date, service center number, and a sequence number as follows (MMDDYY sc xx)(sc= your service center andxx = sequence number). For example, 020216 89 04 = RIVO received a deposit, February 2, 2016, worked in Fresno and the sequence number assigned 04.

    Create the lead/deposit folder, for deposits with no existing lead number, using the naming convention: deposit number, financial institution name (Financial Contact Information Spreadsheet), and lead number (as described above). Save to the designated site folder.

  2. If the deposit information is incomplete, refer the lead deposit to the local POC to contact the institution for missing information.

    Reminder:

    Any additional e-mails/attachments received, save to the associated lead folder as a PDF.

    Note:

    If the institution response contains a statement that all available information is provided, do not contact the institution.

  3. Run the EL IAT tool with the deposit information.

    Reminder:

    If received funds are not an IRS refund:
    - Input TC 770 .00 to prevent payment of credit interest
    -Input in the activity field "NOTIRSFUND"
    -If the Refund Expiration Dates (RSED) has passed, input S
    - Release the funds to the taxpayer.
    -Add AMS/EFDS note "Not an IRS refund"

  4. Research the account for TC 971 AC 123 with MISC field "TPP RECOVERY." If present, do not conduct further research, post funds back to the account and suspend to 148XX00013 until TC 720 posts to the account.

    Reminder:

    Do not release accounts containing a TC 971 AC 123. Disposition to PS 30 once the recovered funds post. See IRM 25.25.8.6, Monitoring External Leads.

  5. Research the account for TC 971 AC 078, forgery indicator. If present, do not reissue refund.

  6. Review IDRS CC TXMOD for the tax period in question and ensure there are not any open controls not in "B" status. If an open control is found, contact the open control before taking any actions.

  7. Use the External Lead IAT tool to input a TC 971 AC 134, TC 971 AC 850, and the history item," DONOTRFUND" , if not already present on all invalid accounts. The EL IAT tool will update the control base on IDRS to, "C#,BKLDCKRECD,A,MISC
    148(XX)0000X,*" (X= 4 invalid, 7 valid), input CC ELP45, and/or commingled memo.

    Exception:

    The External Lead IAT tool will not update the control base"BKLDCKRECD" nor input a history item "DONOTRFUND." The only control base the tool will post to these account is "BKLCOMNGLD."

    Note:

    Review the detail report from the EL IAT tool and confirm actions are on the same tax period.If the actions were taken on the incorrect tax period close the control with "BKLDERROR" , and open a control on the appropriate tax period. Manually input any action that did not populate from the tool.

    Reminder:

    When inputting TC 971 AC 850, manually only put it on current year tax return accounts.

    Note:

    The External Lead TE has 15 working days to complete the CC ELP45 input, barring any delays or large leads.

  8. If the tool was unable to determine if the funds will be applied or remain in the commingled general ledger account, follow the table below to determine the next actions:

    Reminder:

    Leads with multiple accounts may have multiple scenarios. For example, you may have an invalid return, a valid return and an account with commingled funds on the same lead/deposit). Do not prepare the commingled memo until l all accounts associated to the lead/deposit have been resolved.

    If And Then
    1
    the funds received are between $1.01 and $4.99
    the return is conmsidered good
    • Input CC ELP45.

      Caution:

      You MUST CMODE to the deposit location to use this CC. This is based on the credit gateway information.

      Note:

      Balance the ELP45/ commingled amounts to reflect total of deposit.

      Reminder:

      The amount of the transfer may not exceed the TC 846 amount.

    • Update/open control to "Cxx,BKLDCKRECD,A,MISC
      148XX00007" .

    • Update EFDS notes with" BKL deposit # lead # (lead# =MMDDYY XX) ELP45 input" .

    • Input TC 972 AC 134 to reverse RIVO indicator.

      Reminder:

      If a TC 971 AC 134 is not already on the account, do not input a new TC 971 AC 134. Input a history on CC TXMOD as "ValidNo134" .

    • Change disposition in STARS to "DL" .

    • Update LMS spreadsheet with results.

    • Input a TC 290 .00 with a posting delay of 2 to release the refund to the TP.

    • Close all RIVO controls.

    • Notify POC that process is complete.

    2
    the funds received are $1.00 or less
    the return is considered good
    • Input CC ELP45.

      Caution:

      You MUST CMODE to the deposit locationto use this CC. This is based on the credit gateway information.

      Note:

      Balance ELP45/commingled amounts to reflect total of deposit.

      Reminder:

      The amount of the transfer may not exceed the TC 846 amount.

    • Update/open control to "Cxx,BKLDCKRECD,A,MISC
      148XX00007" .

    • Update EFDS notes with" BKL deposit # lead # (lead# =MMDDYY XX) ELP45 input" .

    • Input TC 972 AC 134 to reverse RIVO indicator.

      Reminder:

      If a TC 971 AC 134 is not already on the account, do not input a new TC 971 AC 134. Input a history on CC TXMOD as "ValidNo134" .

    • Change disposition in STARS to "DL" .

    • Input a TC 290 .00 with a posting delay of 2 and a priority code of 5 to post accruals.

    • Close all IVO controls.

    • Update LMS spreadsheet with results.

    • Notify POC that process is complete.

    3
    the funds received are $4.99 or less
    the return is considered bad
    • Update/close the control to "CXX,BKLCOMNGLD,C,MISC
      148XX00004" .

    • Input TC 971 AC 134 with MISC field "BKLD COMINGLED" .

      Note:

      If the tax year is in retention you must first bring it back to Master File using CC IMFOLB.

      Reminder:

      This will be updated en masse after the entire lead/deposit is completed.

    • Update EFDS notes with" BKL deposit # lead # (lead# =MMDDYY XX) BKLCOMNGLD. " . If two years prior or older add "suspected IDT" to the note.

    • If not already dispositioned in EFDS, disposition current processing year returns as appropriate.

    • Update LMS spreadsheet with results.

    • Create the Commingled Memo and save to the associated lead folder.

      Reminder:

      For large deposits worked by more than one TE, createonly one memo for the entire deposit.

    • Send e-mail to POC with notification that process is complete.

    4 the account is dormant, in retention (refunds paid in calendar years prior to the current and prior calendar year) or the return is two years prior or older to the current processing year

    Note:

    DO NOT perform more research

    Reminder:

    Even if the Taxpayer Identification Number (TIN) owner is identified.

    Exception:

    If the account contains a TC 971 AC 123 with MISC field "TPP Recovery" , post the money to the designated account.

    • Update/close the control to "CXX,BKLCOMNGLD,C,MISC
      148XX00004" .

    • Input TC 971 AC 134 with MISC field "BKLD COMINGLED" .

      Note:

      If the tax year is in retention you must first bring it back to Master File using CC IMFOLB.

      Reminder:

      This will be updated en masse after the entire lead/deposit is completed.

    • Update EFDS notes with" BKL deposit # lead # (lead# =MMDDYY XX) BKLCOMNGLD. " . If two years prior or older add "suspected IDT" to the note.

    • If not already dispositioned in EFDS, disposition current processing year returns as appropriate.

    • Update LMS spreadsheet with results.

    • Create the Commingled Memo and save to the associated lead folder.

      Reminder:

      For large deposits worked by more than one TE, createonly one memo for the entire deposit.

    • Send e-mail to POC with notification that process is complete.

    5
    the return is considered bad
    Account doesnot contain TC 841 with document code 48 in the DLN or TC 700 with document code 58 in the DLN
    • Input CC ELP45

      Caution:

      You MUST CMODE to the deposit location to use this CC. This is based on the credit gateway information.

      Note:

      Balance ELP45/commingled amounts to reflect total of deposit.

      Reminder:

      The amount of the transfer may not exceed the TC 846 amount.

    • Update/open control to "Cxx,BKLDCKRECD,A,MISC
      148XX00004" .

    • Update EFDS notes with" BKL deposit # lead # (lead# =MMDDYY XX) ELP45 input" .

    • Update LMS spreadsheet with results.

    • Notify POC that process is complete.

    6
    the return is considered bad
    Accounts contain TC 841 with document code 48 in the DLN or TC 700 with document code 58 in the DLN present on the account or
    refunds are unidentified, excess funds or commingled accounts
    • Update/close the control to "Cxx,BKLCOMNGLD,C,MISC
      148XX00004" .

    • Update EFDS notes with" BKL deposit # lead # (lead# =MMDDYY XX) BKL COMNGLD" .

    • Input TC 971 AC 134 with MISC field "BKLD COMINGLED " .

      Reminder:

      This will be updated en masse after the entire lead/deposit is completed.

    • Update LMS spreadsheet with results.

    • Create the Commingled Memo and save to the associated lead folder.

    • Send e-mail to POC with notification that process is complete.

    7
    the return is valid
    • Input CC ELP45.

      Caution:

      You MUST CMODE to the deposit locationto use this CC. This is based on the credit gateway information.

      Note:

      Balance ELP45/commingled amounts to reflect total of deposit.

      Reminder:

      The amount of the transfer may not exceed the TC 846 amount.

    • Update/open control to "Cxx,BKLDCKRECD,A,MISC
      148XX00007" .

    • Update EFDS notes with" BKL deposit # lead # (lead# =MMDDYY XX) ELP45 input" .

    • Input TC 972 AC 134 to reverse IVO indicator.

      Reminder:

      If a TC 971 AC 134 is not already on the account, do not input a new TC 971 AC 134. Input a history on CC TXMOD as "ValidNo134" .

    • Change disposition in STARS to "DL" .

    • Update LMS spreadsheet with results.

    • Notify POC that process is complete.

    8
    cannot find a return for the TIN provided by the financial institution

    Note:

    Attempt to find a valid TIN. If valid TIN is found follow scenario in this if/then table.

    Exception:

    If multiple accounts on a deposit are not from an IRS refund notify your lead before proceeding

    Cannot allocate the money received
    • Place the TIN provided by the financial institution in the LMS TIN field.

    • Open your control on the TIN provided by the financial institution for the most recent tax period. Open to "Cxx,BKLCOMNGLD,C,MISC
      148XX00004," .

    • Input TC 971 AC 134 with MISC field "BKLD COMINGLED" .

      Reminder:

      This will be updated en masse after the entire lead/deposit is completed.

    • Update LMS spreadsheet with results.

    • Create the Commingled Memo and save to the associated lead folder.

    • Notify POC that the process is complete.

    9
    the TIN is valid, but cannot find the tax period

    Note:

    Attempt to find the correct tax period. If the correct tax period is found follow scenario in this if/then table.

    Exception:

    If multiple accounts on a deposit are not from an IRS refund notify your lead before proceeding

    Cannot allocate the money received
    • Open your control on the most recent tax year. Open to "Cxx,BKLCOMNGLD,C,MISC
      148XX00004," .

    • Input TC 971 AC 134 with MISC field "BKLD COMINGLED" .

      Reminder:

      This will be updated en masse after the entire lead/deposit is completed.

    • Update LMS spreadsheet with results.

    • Create the Commingled Memo and save to the associated lead folder.

    • Send e-mail to POC with notification that process is complete.

    10
    the return is considered good/bad
    the response from the financial institution is no funds are available for return
    • Update/close the control to "NOFNDSAVLB,C" .

    • Add a note to EFDS BKL Deposit # , Lead # and "no funds available" .

    • Update LMS.

    11
    the return is considered bad
    after 60 days with no response from the bank
    • Update/close the control to "NOFNDSRTND,C" .

    • Add a note to EFDS BKL Deposit # , Lead # and "no funds returned" .

    • Update LMS.

    12
    the return is considered good/bad
    the TIN is an Internal Revenue Service Number (IRSN), see IRM 3.21.263.5.5, Internal Revenue Service Number (IRSN), for more IRSN information and the module contains a TC 848 or TC 849
    • Update/close the control to "Cxx,BKLCOMNGLD,C,MISC
      148XX00004" .

      Reminder:

      DO NOT post anything to the IRSN, open the control and take all actions on the SSN’

    • Update EFDS notes with" BKL deposit # lead # (lead# =MMDDYY XX) BKL COMNGLD" .

    • Input TC 971 AC 134 with MISC field "BKLD COMINGLED " .

      Reminder:

      This will be updated en masse after the entire lead/deposit is completed.

    • Update LMS spreadsheet with results.

    • Create the Commingled Memo and save to the associated lead folder.

    • Send e-mail to POC with notification that process is complete.

Reversal/Return of Recovered Funds

  1. Research the lead/deposit to determine if the deposit was applied to individual accounts or commingled in the general ledger account. Follow the table below:

    If And Then
    1
    Recovered funds submitted in error or return of funds requested by financial institution
    Commingled funds applied to the 4971 General ledger account or funds applied to the 6801 (Excess) account

    Note:

    Funds are applied to the 6801 (Excess) account two years after the original payment date

    • Print documentation from the financial institution requesting the return of the recovered funds and save to the lead folder.

    • Documentation from the financial institution must include:

      • financial institution’s EIN

      • physical address

      • financial institution’s POC

      • lead #

      • amount requested

      • all associated TINs with full names of the taxpayers

      • reason for the return request

      Reminder:

      Contact the financial institution when required information is missing.

    • Prepare Form 3753, Manual Refund Posting Voucher with the appropriate ledger account.

    • Create/revise the commingled memo, print and save to the lead folder.

    • Open a control to 148XX00011 with appropriate activity "PND720" , "PND722" , "PND 820" etc.

    2
    Recovered funds submitted in error or return of funds requested by financial institution
    funds applied to an individual account
    • Prepare, print and save in lead/deposit folder the Form 3809, Miscellaneous Adjustment Voucher, to debit the taxpayer’s individual and credit the 4971, General Ledger account.

    • Create/revise the commingled memo, print and save to the lead folder.

    • Open IDRS control
      "C#,PND722,M,MISC"
      "1481500011,*" .

      After TC 722 posts to the account:

    • Close IDRS control with, "Cxx,722POSTED,C,MISC" .

    • Prepare Manual Refund Form 3753 and all required attachments, using the Employer Identification Number (EIN) of the financial institution requesting the funds out of the correct general ledger account. See IRM 3.17.79.3.1, General Ledger Account - Types of Refunds.

    • Print and save the signed Form 3753 in the lead/deposit folder.

    • Route forms to Manual Refunds per local procedures.

    • Revise the commingled memo to reduce the commingled amount by the amount being refunded. Save to the lead folder.

    3
    An inquiry/referral received after deposit resolution
    a valid return and commingled funds applied to the 4971 General ledger account or funds were applied to the 6801 (Excess) account

    Note:

    Funds are applied to the 6801 (Excess) account two years after the original payment date.

    • Prepare, print and save in lead/deposit folder the Form 3245, Posting Voucher - Refund Cancellation or Repayment, to credit the taxpayer’s individual account and debit the appropriate General Ledger account.

    • Revise the commingled memo to reduce the commingled amount by the amount being placed on the taxpayer’s account and save to the lead folder.

    • Open IDRS control
      "C#,PND720,M,MISC"
      "148XX00007,*" .

    • Update EFDS notes with the amount of funds being applied to the taxpayer’s account.

    • If the return is in STARS, update the disposition to "DL" for STARS removal.

    4
    An inquiry/referral received after deposit resolution
    A valid return and commingled funds are applied to the 4971 General ledger account or to the 6801 (Excess) account and there is not enough available to cover the TC 846 amount.

    Note:

    Funds are applied to the 6801 (Excess) account two years after the original payment date.

    • Prepare, print and save in lead/deposit folder the Form 3245, Posting Voucher - Refund Cancellation or Repayment. Credit the taxpayer’s individual account up to the available amount and debit the appropriate General Ledger account.

    • Revise the commingled memo to reduce the commingled amount by the amount being placed on the taxpayer’s account and save to the lead folder.

    • Open IDRS control
      "C#,PND720,M,MISC"
      "148XX00007,*" .

    • Update EFDS notes with the amount of funds being applied to the taxpayer’s account.

    • If the return is in STARS, update the disposition to "DL" for STARS removal.

    5
    An inquiry/referral received after deposit resolution
    A valid return and funds applied to the taxpayer’s account
    • Release the refund.

    • Update EFDS notes as applicable

    • Remove from STARS, by updating the disposition to "DL" . Enter areason in STARS or EFDS Notes when requesting for a return’s deleteion from STARS.

    • Close all RIVO controls.

External Lead Procedures for Automated Clearing House (ACH) Deposits

  1. Financial Institution Automated Clearing House (ACH)

    1. Screen the return, if valid, "REFILE" and release the refund.

    2. If questionable/suspicious, input a CC NOREFP (before return posts or same day) and send the return for verification or verify using CC IRPTR, if available for verification.

    3. Open IDRS control base to "C#,BKLDACHREV,A,MISC 148XX00005,* " ,if not already present on the module.

    4. Close the "PRFZ" control base.

    5. Input a TC 971 AC 134 on CC TXMOD to show RIVO activity.

    6. If the return is not valid, add a history item to CC TXMOD, "DONOTRFUND" .

    7. Close the control as "841POSTED" when the ACH reversal post. If ACH has not posted, update the control to "148xx00004/7 " as applicable..

    8. Monitor for credit posting, and manually add to STARS. If the return is already dispositioned and in the referral process, do not change the disposition unless the return is in a reject status and needs to be corrected (CE OR CA). See Exhibit 25.25.8-1, Return Disposition Status Codes.

    9. Update the 148XX00005 control to either 148XX00004 or 148XX00007, as applicable.

    10. If prior year (PY) in STARS, input on the manual referral spreadsheet and close the IDRS control base.

    11. Update Lead Management System .

Monitoring External Leads

  1. Point of Contact (POC) monitors the lead to ensure that a deposit is received from a financial institution within 45 days of the original indemnification letter or other method used to for requesting return of funds to the IRS. If 45 days have pass and no funds received, issue a follow up Indemnification Letter to the institution. If no funds received after 15 days from the follow-up Indemnification Letter, close the lead as no funds returned.

    Note:

    Save the follow-up notices in the lead folder. Update Lead Management System (LMS).

    Reminder:

    If sending a follow-up letter ensure the original indemnification letter date is not changed in LMS.

  2. The local POC monitors the weekly external lead age listing. Follow the table below for appropriate actions.

    Reminder:

    Resolve age listing in oldest received date order.

    If And Then
    1
    control number is 148XX00001
    is 10 calendar days or older
    • Review the account for actions not taken.

    • Update and/or /close the control base .

    2
    control number is 148XX00002
    is 60 calendar days or older
    • Review account to determine if TC 720 is present.

      If not present:

    • Close the control base in status "C" with activity "NOFNDSRTND" .

      If present:

    • Determine if return is good, bad or Identity Theft (IDT).

      If good:

    • Release refund.

    • Update disposition to "DL" to remove from STARS. Enter a reason in the return's STARS or EFDS notes when requesting its deletion from STARS.

      If bad and return is current processing year:

    • Push to STARS.

    • Update category and disposition per IRM 25.25.8-2, STARS Category Definitions and IRM 25.25.8-1, STARS Disposition Definitions.

      If bad and prior processing year:

    • Complete Mass Push Template.

      Reminder:

      If already in STARS , update to the appropriate category and disposition.

      If IDT and the return is current processing year:

    • Push to STARS.

      Reminder:

      If completed en masse, update to "CAT 1" . If completed individually, update to "CAT 7 MR" . if multiple TC 846 or the posting of the TC 720 occurs after the account adjustment, refer to IRM 25.25.5-1 , Triage Procedures, if account requires adjustment.

      If IDT and the return is prior processing year:

    • Complete Mass Push Template using "CAT 1" .

    • Close the control base.

    3
    control number is 148XX00003
    is 60 calendar days or older
    • Follow IRM 25.25.8.11, Centralized Check Process (CCP).

    4
    control number is 148XX00004
    there is a credit balance and TC 720 is present

    If current processing year:

    • Push to STARS.

    • Update category and disposition per IRM 25.25.8-2, STARS Category Definitions and IRM 25.25.8-1, STARS Disposition Definitions.

      Note:

      Manually refer to the appropriate workstream using the Manual Referral Spreadsheet if the return does not meet the auto-referral categories.

      If prior processing year:

    • Complete Mass Push Template and Manual Referral Template.

      Reminder:

      If already in STARS, update to the appropriate category and disposition.

      If IDT and the return is current processing year:

    • Push to STARS.

      Reminder:

      If completed en masse, update to "CAT 1" . If completed individually, refer to IRM 25.25.5-1, Triage Procedures

      If IDT and the return is prior processing year:

    • Complete Mass Push Template using "CAT 1" .

    • Close the control as "Cxx,720POSTED,C,MISC" .

    5
    control number is 148XX00004
    a TC 720 is not present and itis 10 calendar days or more from the date the CC ELP45 was input
    • Research the account to determine why TC 720 not posted.

    • Take appropriate actions to resolve.

    • Update/close the control as applicable.

    6
    control number is 148XX00005
    there is a TC 841 present for 10 days or more
    • Determine if return is good, bad or IDT

      If good:

    • Release refund.

    • Update disposition to "DL" to remove from STARS. Enter a reason in the return's STARS or EFDS Notes when requesting its deletion from STARS.

      If bad and return is current processing year:

    • Push to STARS.

    • Update category and disposition per IRM 25.25.8-2, STARS Category Definitions and IRM 25.25.8-1, STARS Disposition Definitions

      If bad and prior processing year:

    • Complete Mass Push Template and Manual Referral Template.

      Reminder:

      If already in STARS, update to the appropriate category and disposition.

      If IDT and the return is current processing year:

    • Push to STARS.

      Reminder:

      If completed en masse , update to "CAT 1. " If completed individually, refer to IRM 25.25.5-1Triage Procedures

      If IDT and the return is prior processing year:

    • Complete Mass Push Template using "CAT 1" .

    • Close the control base as "841POSTED" .

    7
    control number is 148XX00005
    there is no credit balance and is 60 calendar days or older
    • Close the control base as "Cxx,RFNDNOTHLD,C,MISC" .

    8
    control number is 148XX00007
    there is a credit balance and TC 720 is present
    • Re-file the return and release the refund.

    • Update disposition to "DL" to remove from STARS. Entera in the return's STARS or EFDS notes when requesting its deletion from STARS.

      Exception:

      Do Not Release refunds held by another function’s freeze code. When this occurs reverse IVO marker by inputting TC 972 AC 134.

    • Close the control base.

    9
    control number is 148XX00007
    there is a credit balance and TC 720 is not present and is 10 calendar days or older from the CC ELP45 date
    • Research the account to determine why TC 720 has not posted.

    • Take appropriate actions to resolve.

    • Update/close the control as applicable.

    10
    control number is 148XX00009
    is 10 calendar days or older
    • Determine if return is in STARS.

      If in STARS:

    • Update disposition to "CC" or "CL"

    • Close the monitoring control.

      If not in STARS:

    • Research to determine why the return is not in STARS.

    • Update/close the control base.

    11
    control number is 148XX00011
    the TC 722 is present Follow IRM 25.25.8.4.1, box 2 after TC 722 posts, Reversal/Return of Recovered Funds
    12
    control number is 148XX00011
    the TC 722/TC 820 is not present and is 60 calendar days or older from preparation date of the accounting form
    • Research the account to determine why TC 722 or TC 820 is not posted.

    • Take appropriate actions to resolve.

    • Update/close the control as applicable.

    13
    control number is 148XX00012
    there is a credit balance and the TC 766 is present

    Current processing year:

    • Push to STARS.

      Reminder:

      Manually update the Fraud Box in STARS to ensure the return will be referable.

      If already in STARS:

    • Update category and disposition per IRM 25.25.8-2, STARS Category Definitions and IRM 25.25.8-1, STARS Disposition Definitions.

      Note:

      Manually refer to the appropriate work stream using the Manual Referral Spreadsheet if the return does not meet the auto-referral categories.

      If prior processing year:

    • Manually refer the case.

    • Complete Mass Push Template.

      Once in STARS:

    • Update category and disposition per IRM 25.25.8-2, STARS Category Definitions and IRM 25.25.8-1, STARS Disposition Definitions.

      Reminder:

      If already in STARS, update to the appropriate category and disposition.

    • Close the control.

    14
    control number is 148XX00012
    the TC 766 is not posted and is 15 calendar days or older
    • Research the account to determine why the TC 766 has not posted.

    • Take appropriate actions to resolve.

    • Update/close the control as applicable.

    15
    control number is 148XX00013

    Note:

    This is an account that contains a TC 971 AC 123 MISC "TPP Recovery"

    the TC 720 is posted
    • Disposition the return to Ace Adjustments (PS 30).

    • Input an EFDS return note of "IVO EL IDT BKLD" .

    • Close all IVO controls.

    16
    control number is 148XX00013

    Note:

    This is an account that contains a TC 971 AC 123 MISC "TPP Recovery"

    the TC 720 is not posted and it is 10 calendar days or older from the CC ELP45 date
    • Research the account to determine why TC 720 has not posted.

    • Take appropriate actions to resolve.

    • Update/close the control as applicable.

    17
    control number is 148XX00014
    the TC 841 is posted
    • Disposition the return to Ace/ Adjustments (PS 30).

    • Input an EFDS return note of "IVO EL IDT BKLD" .

    • Close all IVO controls.

    18
    control number is 148XX00014
    the TC 841 is not posted and it is 60 calendar days or older from the F stop request date
    • Research the account to determine why TC 841 has not posted.

    • Take appropriate actions to resolve.

    • Update/close the control as applicable.

    19
    control number is 148XX00017
    the TC 841 is posted
    • Reissue check to the good taxpayer.

    • If account is in STARS, remove from STARS, by updating disposition to "DL" . Enter a reason in the return's STARS or EFDS Notes when requesting its deletion from from STARS.

    • Close all IVO controls.

    20
    control number is 148XX00017
    the TC 841 is not posted and it is 60 calendar days or older from the the F stop date requested
    • Research the account to determine why TC 841 has not posted.

    • Take appropriate actions to resolve.

    • Update/close the control as applicable.

    21
    control number is 148XX00018
    there is a credit balance and the TC 766 is present
    • Refer to Automated Questionable Credit (AQC) Program on the AQC OCSE manual referral spreadsheet. Provide the change in wages, tax and refundable credits made to the account (AMS PDF). These changes should equal the amount of the offset requested back from the Office of Child Support (attach PDF of the AMS amended return screen).

    • Push to STARS

    • Update to disposition "E2" , Manual referral to AQC.

    • Close control "REFERTOAQC" .

    22
    control number is 148XX00018
    the TC 766 is not posted and is 15 calendar days or older
    • Research the account to determine why the TC 766 has not posted.

    • Take appropriate actions to resolve.

    • Update/close the control as applicable.

Criteria for Updating STARS Categories and Dispositions

  1. Use the table below to update STARS categories and dispositions.

    If Then
    -A freeze is present and/or AM IDRS control base on the account such as: DUPF, IDT1, IDT3, XRET, XIVO, MXEN, IDS1, IDS3, IDT8, IDT9, IDS9, SCRM and SSA2
    • Update STARS to "CAT 5 CL" .

    Return meets IDT criteria:
    • previous IDT marker (TC 971 AC 5XX)

    • date of death present (DOD)

    • date of birth (DOB) 1940 and prior or 2001 and after

    • If completed en masse, update to "CAT 1" .

    • If completed individually, refer to IRM 25.25.5-1, Triage Procedures.

Responding to Taxpayer Inquiries

  1. For non-RIVO employees receiving taxpayer inquiries follow the procedures outlined below.

  2. The caller states the bank returned their refund to the IRS, see Exhibit 25.25.8-4, External Lead Involvement Indicators, and follow the chart below:

    Note:

    Please contact the Point of Contact on any External Lead control before taking any actions on the account. See External Lead Point of Contact.

    If And Then
    1
    The account contains an open control to RIVO.
    The control base activity field is one of the following:
    • "BKLD"

    • "REQFUNDS"


    AND the control base assignment number is one of the following:
    • 148XX00001

    • 148XX00002

    • Update the Accounts Management System (AMS) notes with the following: name and contact information of the caller, name of the financial institution, and date of contact.

    • Advise the caller that the return and refund are under review and it may take up to 90 days from the date of the control base to complete the review and either issue the refund or send a letter regarding the review.

    • If the account shows no action taken in the last 90 days, prepare a Form e4442, Inquiry Referral, and forward to RIVO using category - RICS IVO - External Lead. Advise the taxpayer to allow 60 days for a response.

    2
    The account contains an open control to RIVO.
    The control base activity field is one of the following:
    • "BKLDCKRECD"

    • "BKLDACHREV"


    AND the control base assignment number is one of the following:
    • 148XX00004

    • 148XX00005

    • Update AMS Notes with the following: name and contact information of the caller, name of the financial institution, and date of contact.

    • Advise the caller that the return and refund are under review and it may take up to 10 weeks from the date of the call to complete the review and either issue the refund or send a letter regarding the review.

    • If the account shows no action in the last 10 weeks, prepare a Form e4442, Inquiry Referral, and forward to RIVO using category - "RICS RIVO - External Lead" . Advise the taxpayer to allow 60 days for a response.

    Exception:

    Identity Theft Victim Assistance ( IDTVA) Employees may make IDRS adjustments as needed after contacting the External Leads POC to verify if the financial institution returned the funds.

    Exception:

    Do not initiate contact on "BKLCOMNGLD" , close the control base..

    3
    The account contains an open control to RIVO.
    The control base activity field is one of the following:
    • "BKLDCKRECD"

    • "BKLDACHREV"

    AND the module showscontrol base assignment number is one of the following:
    • 148XX00004

    • 148XX00005

    AND the module shows a posted TC 720 or TC 841.
    • Update AMS Notes with the following: name and contact information of the caller, name of the financial institution, and date of contact.

    • Advise the caller that the return and refund are under review and it may take up to 10 weeks from the date of the call to complete the review and either issue the refund or send a letter regarding the review.

    • If tha coount shows no action taken in the last 10 weeks,prepare a Form e4442, Inquiry Referral, and forward to RIVO using category - RICS IVO - External Lead. Advise the taxpayer to allow 60 days for a response.

    Exception:

    ID Theft Employees may make IDRS adjustments as needed.

    4
    The account contains an open control to RIVO.
    The control base activity field contains the following:
    • "VALID150"


    AND the control base assignment number is the following:
    • 148XX00007

    • Update AMS Notes with the following: name and contact information of the caller, name of the financial institution, and date of contact.

    • If the TC 720/ TC 841 is not posted, advise the caller that the review of the return and refund is complete and to allow 10 weeks for the refund issue..

    • If the TC 720/ TC 841 is posted, advise the caller that the review of the return and refund is completed and to allow 6 weeks from the TC 720 /TC 841 cycle date for the refund to be issued.

    • If the refund has not issued in 10 weeks from the initial call prepare a Form e4442, Inquiry Referral, and forward to RIVO using category - "RICS IVO - External Lead" . Advise the taxpayer to allow 60 days for a response.

    5
    The account contains a closed RIVO control base.
    The control base activity field is "BKLCOMNGLD" and the control base assignment number is 148XX00004 or 148XX00007.
    • Update AMS Notes with the following: name and contact information of the caller, name of the financial institution, and date of contact.

    • Advise the caller that the return and refund are under review and it may take up to 6 weeks from the date of the call to receive a letter regarding the review.

    • Prepare a Form e4442, Inquiry Referral, and forward to RIVO using category - "RICS IVO - External Lead" . Advise the taxpayer to allow 60 days for a response.

    6
    The taxpayer states the financial institution has advised them that IRS requested the funds back.
    The control base activity field is "NOFNDSAVLB" or "NOFNDSRTND" and the control base assignment number is 148XX00004.
    • IRS never received any funds from the financial institution. Advise the caller to contact their financial institution regarding the refund.


    If the taxpayer states, they have already spoken to the bank and the bank referred the taxpayer back to IRS then:
    • Submit a Form e-4442 to "RICS IVO EX LDS" . Advise the taxpayer to allow 60 days for a response.

    7
    The account contains a closed RIVO control base.
    The closed control base activity field is "841LOST" or "ACHLOST" and the control base assignment number was 148XX00005, and there are no credits held on the account.
    • The financial institution returned the funds as a direct deposit reversal, however the refund is released via a paper check.

    • Follow normal refund inquiry procedures per IRM 21.4.2, Refund Trace and Limited Payability.

    8
    The account contains an IDRS history item such as "BKLD DO NOT RELEASE" or "BKLD DO NOT REFUND"
    The account has a TC 720 or TC 841 credit with a TC 971 AC 134 or a TC 971 AC 199 RIVO freeze code. Refer to the last closed RIVO control base and follow the instructions in this "If and Then " chart.
    9
    The taxpayer states the financial institution has advised them that IRS requested the funds back.
    No open or closed RIVO control or indications of RIVO activity.
    • Update AMS Notes with the following: name and contact information of the caller, name of the financial institution, and date of contact.

    • Advise the caller to allow 90 days from the date of the call to either receive the refund or a letter regarding the review.

    • If more than 7 days since the bank notified the taxpayer that the refund was returned to the IRS, prepare a Form e-4442, Inquiry Referral, and forward to RIVO using category - "RICS IVO - External Lead" . Advise the taxpayer to allow 60 days for a response.

  3. If the external lead control is over 90 days and the taxpayer did not receive their refund or notification, submit a Form e-4442, Inquiry Referral, to RIVO using the referral category, RICS IVO - External Lead.

  4. When a return preparer who directed current year tax refunds into their account calls stating the bank informed them that they returned the deposited funds to IRS due to multiple refunds or a name mismatch, take the following action:

    If And Then
    The caller claims to be a tax return preparer who directed current year tax refunds into their account Bank has told caller that the deposited refunds were returned to the IRS due to multiple refunds or name mismatch
    1. Submit the following information via e-mail to the *RPO Referrals mailbox. Subject line of: "Attempt to Direct Deposit Client Refund to Return Preparer Bank Account" .

    2. Include a brief explanation of why the preparer called and the bulleted information below:

      Example:

      Return preparer called because the bank sent the refund back to IRS instead of depositing the refund into the preparer’s bank account.

      • Preparer name

      • Preparer SSN number

      • Preparer PTIN

      • Preparer Firm EIN number (if available)

      • Preparer phone number

      • Bank routing number and account number

    3. Inform the caller that taxpayers must direct deposit tax refunds to accounts in their name. This may explain why the bank returned the funds to the IRS. No exception to these rules exists for a tax return preparer.

      Note:

      The instructions for both Form 1040, U.S. Individual Income Tax Return, and Form 8888, Allocation of Refund (Including Savings Bond Purchases), instruct taxpayers not to request a deposit of their refund to an account that is not in their name, such as their tax preparer’s account.

    4. Do not provide any specific information about a taxpayer’s account unless the caller has a power of attorney to receive it.

Bureau of Fiscal Services (BFS) Credit Gateway

  1. The External Leads Program, supported and managed by the IRS Return Integrity & Verification Operation (RIVO), works in conjunction with IRS Submission Processing (SP) to receive, screen and validate leads, and request the recovery of refunds to reconcile accounts. Financial institutions can return refunds associated with leads electronically, rather than a paper check, via Bureau of the Fiscal Service (BFS) Credit Gateway.

  2. Sources must provide a spreadsheet containing personally identifiable information (PII) that helps the IRS identify the source of the funds received as well as ensure accurate processing of the funds.

  3. When working these leads, complete the research on them and then notify the lead source the amount to return to the IRS

  4. RIVO will provide the source with a Credit Gateway Account Locator Number (ALC) for the submission of funds. See table in (7) below.

  5. RIVO will then receive via the efleads@irs.gov mailbox, a batch file of funds with the locked down accounts, along with an e-mail including the Lead Number(s).

  6. Any sources using the BFS Credit Gateway should be provided fund transfer instructions below for the site working the inventory. The accounting POC for the site should be included in the instructions.

  7. Update Lead Management System as required.

  8. To initiate the fund transfer, use the following account information:

    Cincinnati, OH Fresno, CA
    ALC: 20091700 ALC: 20098900
    Standard Entry Class (SEC) code: CCD Standard Entry Class (SEC) code: CCD
    Transaction Type: 22 Transaction Type: 22
    Receiving ABA routing number: 051036706 Receiving ABA routing number: 051036706
    DFI account number: 820091700001 DFI account number: 820098900001
    Receiving Company Information: Institution Name and Lead# (limit 22 characters) (Lead# = mmddyy seq# of lead, i.e., SunTrust #101414 39) Receiving Company Information: Institution Name and Lead# (limit 22 characters) (Lead# = mmddyy seq# of lead, i.e., SunTrust #101414 39)
    Tax Class: 20X0903 Tax Class: 20X0903

External Offset Leads (State and Federal Agencies)

  1. External Offset Leads primarily include the following:

    • The Office of Child Support (OCSE)

    • State Revenue Departments

  2. The Office of Child Support Enforcement (OCSE) receives and manages various state’s child support Treasury Offset Program (TOP) offset referrals. Questionable offsets are identified by states who run their own filters to determine if an overpayment is suspicious. In addition, an agency may also receive information from a taxpayer stating they did not work during the current year or they did not file a current year tax return. OCSE loads these leads through the Health and Human Services (HHS) website portal to review for reversal of the offset.

    Note:

    The portal sends the e-mail when a new file is added. The POCs then retrieve the file and assign to the operation to be worked.


    The IRS usually receives the following information:
    • Trace number

    • State referring case

    • Debtor first and last name

    • Debtor Taxpayer Identification Number (TIN)

    • Offset amount/date

    • Notes column(some states use the field to disclose the reason for referral)

  3. The IRS works directly with the OCSE to provide a response to the states on returning questionable offsets referred. .
    Complete and accurate research on referred OCSE accounts is critical to the success of the program and to the various state’s appropriate disbursement of TOP offsets from federal tax refunds. The IRS’ response on referred cases directly guides the states on whether to release offset referred or hold pending reversal request(s) from IRS or BFS. The assigned Examiner must consider the following when reaching a determination:

    • All related transactions on the account

    • The validity of corresponding claims

    • Any prior actions taken by the IRS or BFS, to include full or partial reversal, and funds reissued

    • The offset amount available

    • Where to refer/treat an invalid claim

    Note:

    The offset reversal leads process requires that the Tax Examiner review the entire corresponding module(s) for all items within RIVO scope. This includes all relevant entity research such as IDRS CC FTBOL and date of death. In addition module transactions indicating GATT, see IRM 25.25.9.4, General Agreement on Tariffs and Trade (GATT) Returns, Frivolous Claims, see IRM 25.25.10-1, Frivolous Arguments, inflated income and/or withholding, see IRM 25.25.2.3, Command Code (CC) IRPTR Return Verification During the Screening Process, identity theft, Unallowables, see IRM 4.19.15.15, Unallowable Code (UA) Program, non-eligible credits (see Form 1040 instructions) and dishonored/duplicate/erroneous payment refund issues

    Reminder:

    If interest was paid on the referred offset, and you determine that the taxpayer is due a reduced refund, the TE must prorate the interest and include this in their calculation, as well as in their determination(i.e. YES or Partial). Utilize the the OCSE Interest Prorating Worksheet to determine the recovery amount.


    Tax Examiner determinations include the following
    1. "NO" - The entire referred offset will remain available for disbursement

    2. "YES" - The entire referred offset is no longer available for disbursement
      For all "YES" responses, TEs must indicate either taxpayer Fraud, IDT, Inj Sp or Other as appropriate. Additional comments should be entered in the Remarks field as needed

    3. "Partial" - A portion of the referred offset is no longer available for disbursement. Any additional comments should be entered in the Remarks field as needed

    4. "PIR" - Prior actions by IRS has already reversed the offset in full and therefore is no longer available for disbursement
      For all PIR accounts, TEs must indicate either taxpayer Fraud, IDT, Inj Sp, or Other as appropriate. Additional comments should be entered in the Remarks field as needed.

    5. BFS - TC 899(s) have posted to the account totaling the entire amount of the TC 898 and as a result, the offset is unavailable for disbursement

     

    Note:

    Prior to IRP being considered fully loaded, if the Examiner, after lookback (see IRM 25.25.2.2.1 (2) #s 8-9, Data Mining Screening Tree) is unable to make a determination, the return will be submitted through the RIVO verification process. An interim response of "M" will be recorded in LMS and the IDOC(s) will be dispositioned as appropriate to “Verify” in EFDS. The return DLN will be captured in the "Remarks "field.

    Reminder:

    Do Not suspend a case which has been determined to be Identity Theft (IDT) or where the entire referred offset is no longer available for disbursement (see IRM 21.4.6.4.2.11, Netting TOP Offsets and Reversals)

  4. Use batch tools to complete the research to determine the offset tax period

  5. Input the TC 971 AC 134 with MISC "BKLD OFFSET" on all receipts to identify RIVO External Lead involvement.

    Note:

    The TC 971 AC 134 may be input en masse using the automated GII tools.

    Reminder:

    Ensure the name control is accurate, mismatches will require re-submission after correction or a manual input.

  6. If the batch process is unable to verify the return against CC IRPTR due to the presence of Schedule C or other "unverifiable" data, including TIN and/or tax modules that cannot be located, the case will be referred to the External Lead team to work. Research will include any identity theft markers, including TC 971 AC 125, EFDS notes stating "Compromised IRP Data - Do Not Release Based on IRP" , IRP statement "THIS IS A STATE REVERSE FILE MATCH INITIATIVE (SRFM) IRP DOC (consider verified false)" or "WARNING FRAUDULENT PAYER TIN" .
    The External Lead Tax Examiner (TE) will identify the corresponding TIN and tax period. Thereafter, review the corresponding tax return filing(s) and tax module(s), including netting the referred TOP offset (see IRM 21.4.6.4.2.11 , Netting TOP Offsets and Reversals).

  7. After researching and reviewing the corresponding filing(s) and module(s), follow the If and Then chart below to reach a determination, and to resolve the assigned account(s). The chart provides the most commonly encountered scenarios. If the scenario is not covered, consult your Lead for guidance.

    Caution:

    You cannot reverse a TOP offset for an amount equal to or greater than what remains available. If the proposed deficiency exceeds the available remaining balance of the referred offset, and there are other TOP offsets on the module with funds available, see the tables in paragraph 8 below before inputting any return adjustments or TOP reversals.

    Caution:

    Do not increase refundable credits. Refundable credits must equal to or less than the originally claimed amount. The IRS has no authority to increase refundable credits without an amended return or claim from the taxpayer.

    If And Then
    1
    TOP Offset, regardless of Agency or Sub-Agency Code
    more than 5 years 11 months from the offset date and you determine that the return is NOT valid within RIVO scope
    • Contact the TOP Liaison to determine the availability of funds

    • Funds available, the response will be "Yes" for full offset recovery or "Partial" for partial recovery

      Note:

      The offset cannot be reversed via TC 290 Action Code (AC) 766. A manual reversal must be requested through the TOP Liaison.

    • No funds are available, response is "No"

    • Previous reversal on the account, the response will be" PIR " or "BFS" based on the transaction codes posted to the account

      Note:

      Once the response is determined, see boxes below for required updates to IDRS and the Offset Reversal Lead (OSRL) Lead Management System database (LMS)

    2
    Return is determined to be valid per tolerances established in IRM 25.25.8.3(5) Exception, Procesing External Leads and no significant underreporting at/above Exam criteria, see IRM 4.19, Liability Determination
    There are no GATT, Frivolous Claim, Unallowable or dishonored/duplicate/erroneous payment/refund concerns as discussed in the Note in paragraph 3 above
    • Response is "No"

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      The TC 972 AC 134 is done en masse on a regular basis using automated GII tools

    • Close all RIVO control bases

    3a
    Return is determined to be invalid per tolerances established in IRM 25.25.2.2.1, Data Mining Screening Tree
    Adjustment would result in an increase or the same refund amount
    • Response is "No"

    • Notate in OSRL and LMS "Increased " or "No change to Refund"

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      The TC 972 AC 134 is done en masse on a regular basis using automated GII tools

    • Close all RIVO control bases

    3b
    Same condition as 3a
    Adjustment would result in a decreased refund, and there are no refundable credits to be reduced or removed
    • Response is "Yes" if the entire offset is being reversed or "Partial" if only a portion of it

    • Indicate in OSRL LMS, "Fraud" and enter the offset reversal amount

    • Open the control to "M" status with the category "ELOF" and place in suspence to 148XX00012

    • Input/Update EFDS & AMS notes per IRM 21.2.2.4.5 , Account Management Services (AMS); Select "Refund Offset" issuer

    • Refer to AQC with AMS 1040X Worksheet and Notate EFDS as appropriate

    • Send to scheme

    3c
    Same conditions as in 3a above
    Adjustment would result in a decreased refund, and there are no refundable credits to be reduced or removed
    • Response is "Yes" if the entire offset is being reversed or "Partial" if only a portion of it

    • Indicate in OSRL LMS, "Fraud" and enter the offset reversal amount

    • Reverse the TOP offset(s) in the amount equal to the difference in refund, per IRM 21.4.6.5.12, TOP Offset Reversals With Adjustments

    • Input adjustment to tax, income, withholding, and non-refundable credits; Issue, as applicableLetter 105C, Claim Disallowed, or Letter 106C, Claim Partially Disallowed. Use Wage and Withholdings Only (WOW) LettersWOW Letter Job Aide on RIVO Portal for paragraphs

    • Input/Update EFDS & AMS notes per IRM 21.2.24.5, Account Management Services (AMS); Select "Refund Offset" issue

    • Push to Scheme, using STARS disposition CL

    4
    Agency Code 02
    5 months or more have passed from the offset date
    • Response is "No"

    • Notate “late lead” in the OSRL Remarks field of LMS database.

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      The TC 972 AC 134 is done en masse on a regular basis using automated GII tools

    • Close all RIVO control bases.

    5
    Referred TOP offset is fully reversed by TC 290 AC 766(s) and/or TOP Manual Reversal TC 700(s)
    • Response is "PIR"

    • Indicate "Fraud" ,"IDT" ," Inj Sp" , or "Other" as appropriate per your review. Additional Remarks needed should be entered in the Remarks field of the OSRL LMS database

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      This is done en masse using automated GII tools.

    • Close all RIVO control bases.

    6
    Referred TOP offset is fully reversed by TC(s) 899(s)
    • Response is "BFS"

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      This is done en masse using automated GII tools.

    • Close all RIVO control bases.

    7
    Referred TOP offset is fully reversed by a combination of TC 290/766 or 700 AND TC 899(s)
    • Response is "Yes"

    • Indicate "Fraud" ,"IDT" ," Inj Sp" , or "Other" as appropriate per your review.

    • Enter "0.01 " as the offset reversal amount

    • Notate "BFS/PIR" in the Remarks field of the OSRL LMS.

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      This is done en masse using automated GII tools.

    • Close all RIVO control bases.

    8a
    A portion (less than the entirety) of the referred TOP offset has been reversed by TC 290/766 or 700 and/or TC 899
    You determine the return is valid within RIVO scope and there are no items of interest as discussed above in #3 REMINDER.
    • Response is "Partial"

    • Notate "BFS/PIR" in the Remarks field of the OSRL LMS.

    • Enter "0.01" as the Offset Reversal Amount

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      This is done en masse using automated GII tools.

      Note:

      This can be input en masse on a regular basis using automated GII tools

    • Close all RIVO control bases.

    8b
    Same condition as in 8a above
    You determine that the return is NOT valid within scope but there is no revenue protection potential
    • Response is "Partial"

    • Notate "BFS/PIR" in the Remarks field.

    • Enter "0.01" as the Offset Reversal Amount

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      This can be input en masse on a regular basis using automated GII tools

    • Close all RIVO control bases.

    8c
    Conditions are the same as in scenario number 8a above
    You determine that the return is NOT valid within scope and there isrevenue to be protected along with funds available for recovery
    • Response is "Yes" or "Partial" as appropriate per your review of the proposed deficiency and the available balance of the referred offset.

    • Indicate Fraud in the OSRL LMS database and also enter the offset reversal amount

    • Reverse TOP offset as appropriate and refer or treat per the return characteristics

    • Send to Scheme and Update STARS as appropriate

    • Notate EFDS & AMS as appropriate. Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS); select "Refund Offset" issue

    9
    Referred offset was generated from a dishonored or misapplied payment, or erroneous refund
    • Response is "Yes"

    • Notate the remarks field as needed

    • Reverse entire offset and input the offset reversal amount in OSRL LMS database

    10
    Referred offset is from an overpayment due to subsequent payment towards a balance due where there was an abatement or removal of tax/penalties, transferred ES payment, credit elect, etc.
    • Select the appropriate response to provide based on research conducted

      Reminder:

      Full research and review of both the original and refunding module is required

    • Based on the response, follow the appropriate scenario from above to notate the account on IDRS and OSRL LMS

    11a
    Return is determined to be IDT
    No taxpayer filing located
    • Response is "Yes"

    • Indicate in OSRL LMS "IDT"

    • Enter offset reversal amount in LMS

    • Treat IDT filing and account per IRM 25.25.4, Integrity & Verification Identity Theft Return Procedures

    11b
    Same condition as in 11a above
    Valid taxpayer return located and the claimed refund is equal to or more than the offset amount
    • Response is" No"

    • Treat IDT filing and account per IRM 25.25.4, Integrity & Verification Identity Theft Return Procedures including adjusting filing to taxpayer return as appropriate

      Caution:

      Do Not reverse the TOP offset

    • Close all RIVO control bases

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      This can be input en masse on a regular basis using automated GII tools

    11c
    Same condition as in 11a above
    Valid taxpayer filing located and there is a balance due or zero return
    • Response is "Yes"

    • Indicate in OSRL LMS "IDT"

    • Enter offset reversal amount in OSRL LMS

    • Treat IDT filing and account per IRM 25.25.4, Integrity & Verification Identity Theft Return Procedures including adjusting filing to taxpayer return as appropriate

    11d
    Same condition as in 11a above
    Valid taxpayer return located, and the claimed refund is less than the offset amount
    • Response is "Yes" if the entire offset is being reversed or "Partial" if only a portion of it

    • Enter offset reversal amount in OSRL LMS

    • Treat IDT filing and account per IRM 25.25.4, Integrity & Verification Identity Theft Return Procedures including adjusting filing to taxpayer return as appropriate

    • Reverse TOP Offset(s) in the amount equal to the difference in refund (if the difference in refund exceeds the available Offset amount, reverse the entire available offset amount), per IRM 21.4.6.5.12,TOP Offset Reversals With Adjustments.

    11e
    Same condition as in 11a above
    Taxpayer refund return located, but does not verify within tolerances established in IRM 25.25.4-1 paragraph 5b or contains GATT, Frivolous Claim, Unallowable or dishonored/duplicate erroneous payment/refund concerns as discussed in the Note of paragraph 3 above
    • Response is "Yes" if the entire offset is being reversed

    • Enter "IDT" in ORSL LMS

    • Response is "Partial" if only a portion of the offset is being reversed. Add remarks as needed

    • Enter offset reversal amount in OSRL LMS

    • Input/Update EFDS & AMS notes per IRM 21.2.24.5, Account Management Services (AMS); Select "Refund Offset" issue

    • Treat IDT filing and account per IRM 25.25.4, Integrity & Verification Identity Theft Return Procedures including adjusting filing to taxpayer return as appropriate

    • Reverse TOP Offset(s) in the amount equal to the difference in refund (if the difference in refund exceeds the available Offset amount, reverse the entire available offset amount), per IRM 21.4.6.5.12,TOP Offset Reversals With Adjustments.

    • Treat taxpayer filing as appropriate and Push to Scheme and Update STARS Disposition:
      -Refundable credits being decreased or removed, refer to AQC 1040X worksheet
      - No refundable credits being decreased or removed, adjust as needed and send letter 105C/106C
      - Unallowables or other issues (as discussed in the Note in paragraph 3 above, manually refer as appropriate based on responsible functional area

    .
    12a
    Only Schedule C, F, or Household Help (HSH)
    All of the following is true:
    1. There is no IRP support

    2. The filer did not verify as the TIN owner

    3. There is no consistency

    4. There is nothing on the return that can be used to verify the filer as the TIN owner

    Note:

    Do not consider a Schedule C/F/HSH filing history as consistent when multiple returns claiming them are filed within the same processing year without additional research

    • Response is "Yes"

    • Indicate" IDT" in the OSRL LMS database and also enter the offset reversal amount

    • Treat IDT filing and account per IRM 25.25.4, Integrity & Verification Identity Theft Return Procedures including adjusting filing to taxpayer return as appropriate

    12b
    Same condition as in 12a above
    All of the following is true:
    1. There is IRP support

    2. Filer verified as the TIN owner

    3. There is a consistency in filing the schedules

    4. There is other data on the return such as IDOCs with income and/or withholding that can be use to verify the filer as the TIN owner

    5. There are no unallowable considerations as discussed in the Note in paragraph 3 above

    • Response is "No"

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      This can be input en masse on a regular basis using automated GII tools

    • Notate EFDS & AMS as appropriate

    • Close all RIVO control bases

    12c
    Same condition as in 12a above
    All conditions are true as specified in 12b above except, there are unalowables claimed on the return
    • Response is "Yes" or "Partial" as appropriate per your review of the proposed deficiency due to unallowables and the available balance of the referred offset.

    • Indicate "Fraud" in the OSRL LMS database and the offset reversal amount

    • Reverse TOP offset as appropriate and refer return to the following:
      If refund amount claimed is $10K and over - Refer to Frivolous Return Program for current year returns. Prior year, refer through Lead to the Manual Referral Coordinator
      If refund amount claimed is under $10K, refer as normal

    • Input/Update EFDS & AMS notes per IRM 21.2.24.5 , Account Management Services (AMS); Select "Refund Offset" issuer

    12d
    Same condition as in 12a above
    Exam previously disallowed a similar Schedule C, F. or HSH
    • Response is "Yes" or "Partial" as appropriate per your review of the proposed deficiency

      Reminder:

      The Schedule C may not be allowed, but the taxpayer may still qualify for refundable credits if claimed on the return

    • Indicate "Fraud" in the OSRL LMS database and the offset reversal amount

    • Manually refer the return to Exam through the Manual Referral Coordinator and push to Scheme

    • Update AMS and EFDS notes as appropriate

    • Input/Update EFDS & AMS notes per IRM 21.2.2.4.5 , Account Management Services (AMS); Select "Refund Offset" issuer

    13a
    Schedule C, F, or HSH with other types of income and/or withholding
    Return is verified to be the TIN owner(i.e. IRP support, filer verification, consistency filing, or other data on the return that confirms the TIN owner)

    Reminder:

    See note above in 12a

    • The Schedule C, F, or HSH will be accepted

    • Review all other return items for validity and then based on research select the appropriate scenario above to resolve the account

    13b
    Same condition as 13a above
    Identity theft is verified Follow guidance in 12a above
    14a
    Referred offset is from the Cares Act Economic Impact Payment
    Research confirms the taxpayer was deceased or incarcerated by the date of payment or a duplicate or otherwise erroneous refund
    • Response is "Yes"

    • Enter offset reversal amount in OSRL LMS and notate EIP in the Remarks field

    • Reverse the TOP offset in full

    • Notate EFDS & AMS as appropriate. Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS); select "Refund Offset" issue

    14b
    Same conditions as in 14a above
    Research confirms the taxpayer was not deceased or incarcerated by the date of payment, nor was this a duplicate or erroneous refund
    • Response is "No"

    • Notate in OSRL LMS "EIP " in the Remarks field

    • Input via IDRS CC REQ77, TC 972 AC 134 MISC field "BKLD OFFSET "

      Note:

      This can be input en masse on a regular basis using automated GII tools

    • Close all RIVO control bases

  8. The designated POC will upload the response file to the OCSE/HHS portal within 30 days of the initial receipt of the submission.

    Reminder:

    No information that was not originally provided by the source agency may be disclosed

Responding to Offset Phone Inquiries

  1. The IRS may receive phone calls from taxpayers who were informed their refund offset was not applied to a Federal/State debt because it was returned to the IRS.

  2. Follow the If and Then chart below, document the call in AMS and include the taxpayer’s name and contact information::

    If Then
    1
    The module contains an un-reversed TC 971 AC 134 MISC field "BKLD OFFSET"
    • Advise the taxpayer to wait 60 days from the date of the TC 971 input.

    • If over 60 days and no action is shown on IDRS, prepare Form e-4442, Inquiry Referral, to RIVO, using the referral category for RICS/IVO External Lead.

    2
    The module contains an open/closed control with activity "FraudCase" and category "DMFC"
    • Advise the taxpayer to allow 45 days from the receive date of the open control to receive a notice/letter requesting documentation to substantiate income/withholding claimed on the return.

    • If over 45 days with no indication of IRS correspondence to the taxpayer, prepare Form e-4442, Inquiry Referral, to RIVO, using the referral category for RICS/IVO External Lead.

    3
    The module contains a TC 972 AC 134 MISC field "BKLD OFFSET"
    • Advise the taxpayer the refund will offset to any outstanding debt.

    4
    The module contains a TC 972 AC 134 MISC field "BKLD OFFSET" , with category "ELOF" and the funds are posted back to the account (TC 766 with OTN or TC 899 showing offset reversal to IRS, see IRM 21.4.6.4.2.10, TC 899 Reversal or Agency Refund of TOP Offset).
    • If over 15 days with no indication of RIVO action, prepare Form e-4442, Inquiry Referral, to RIVO, using the referral category for RICS/IVO External Lead.

Debit Card Procedures

  1. Mail all potential fraudulent debit cards received at any IRS facility to the Fresno Service Center in a sealed envelope. Follow PII Guidelines IRM 21.3.3.4.25, Breaches of Personally Identifiable Information (PII) Caused by Manual Stuffing Errors and UPS Overnight to:
    Internal Revenue Service
    Attn: External Lead Manager
    Mail Stop 23101
    5045 East Butler Avenue
    Fresno, CA 93727

    1. RIVO reviews the cards and determine the return address of the issuing bank.

    2. Prepare the debit card letter per Exhibit 25.25.8-3, Letter for Intercepted Prepaid Debit Card(s) and track the number of cards sent to the issuing bank.

  2. Reloadit cards are used by some taxpayers to add funds , to pay their balance due. Send the taxpayer letters and Reloadit cards to the Fresno SP Payment Processing Unit. The SP payment processing unit does not accept credit/debit cards as a valid form of payment. . The Payment Processing Unit returns the debit cards to the taxpayer with an explanation on how they can pay their balance due.

Centralized Check Process (CCP)

  1. The Centralized Check Process (CCP) inventory is worked by the Fresno External Lead unit. CCP. receive treasury check copies, third-party checks and miscellaneous payments in the form of money orders, savings bonds, personal checks etc., from all service centers when potential identity theft (IDT) is involved. Refer to IRM 3.10.72.5.5, Extraction of Envelope Contents for Returns and Documents with Remittance and IRM 21.4.3.5.4, Returned Refund Check Procedures.≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡. The original third-party checks are mailed to:
    Internal Revenue Service
    Attn: External Lead Manager
    Mail Stop 23101
    5045 East Butler Avenue
    Fresno, CA 93727

    Example:

    A check received in a service center made payable to an individual.

    Exception:

    Taxpayer Advocate Service (TAS) follows the Return Integrity and Compliance (RICS) Service Level Agreement (SLA) addendum procedures.

  2. Third-party checks received expired, with Entity (name line) issues, or address changes are not worked in CCP. Return these to the originator for appropriate handling

  3. If documentation containing a live signature is received with the check, file the document(s) per IRM 25.25.5.2.1, General Replies to Letters/Notices and Undeliverable Mail

  4. When a CCP case is received, open a control to "C#,CCP,A,EVFY
    148XX00003, *" .

    Note:

    If there is already an open lead, open a closed control for tracking purposes.

Returned Treasury Checks

  1. If a Federal Refund Treasury Check is returned to the (IRS), verify:

    • It is a Treasury check and

    • Taxpayer indicates the refund issued is not theirs and confirms identity theft (IDT)

      Note:

      Do not send Social Security, Federal Emergency Management Agency (FEMA), and Restitution Treasury Checks to Centralized Check Process (CCP). Return these checks to the originator for appropriate handling. If there is an open control base, close with "CXX,REJECTTORI,C,EVFY"

    Follow the table below.

    Reminder:

    The POC with access to the Treasury Check Information System (TCIS), will cancel all original treasury checks received using F-stop.

    If And Then
    1
    TC 841 has not posted
    the check has not been negotiated and identity theft documentation is attached

    The TE will:

    1. Input command code (CC) NOREFP for all original treasury checks received, to ensure funds are held. Use the Integrated Automation Technologies (IAT) Ttool "Stop Refund" and close the control base.

    2. If not present, input a transaction code (TC) 971 action code (AC) 522 "WI IVO PNDCLM" for the year you are working, see Exhibit 25.23.2-10, IMF Only TC 971 AC 522 Tax-Related Identity Theft, Case Status(Initial Claim/Submission)

    3. Input TC 971 AC 134 (if not already present) and TC 971 AC 850 (only on current tax year)

    4. Input a history item "DONOTRFUND" ,

    5. Update the control to reflect "PND841"

    6. Update EFDS notes to "CCP, Lead # MMDDYYYY XX XX, notate received treasury check (by e-fax or original), dollar amount, check number, and what the taxpayer states "didn't file" etc., notate if a Form 14039, , Identity Theft Affidavit is attached."

    7. Prior year processed returns not in the Scheme Tracking and Referral System (STARS) must be added to the Mass Push Spreadsheet to be updated. When adding a return to the Mass Push Spreadsheet, open a control base on IDRS to:
      Cxx,PNDSTARS,M,EVRY
      148XX00009,*

    8. Update Accounts Management Services (AMS) History notes with same information as EFDS notes, see IRM 21.2.2.4.5 , Accounts Management Services (AMS)

    9. Update the Lead Management System (LMS) database.Input TC 971 AC 522 (if one does not already exist on CC ENMOD).

      The TCIS POC will:

    10. Access TCIS and use stop code "F" to stop the check

      Note:

      Use the address provided on the documentation from the taxpayer. If an address is not provided use the address that populates in TCIS.

    11. Update the PND841 IDRS control to:
      "TCISCANCEL "

    12. Input the cancelled check numbers on the "Cancelled Treasury Checks " monitoring spreadsheet

    13. Send the cancelled check to Bureau of Fiscal Services (BFS), include the statement" We cancelled the check in TCIS using F-stop."

      Note:

      Stamp "VOID" on all checks if not present

      Once the TC 841 posts, the monitoring POC working the age list will:

    14. Close the monitoring control with "841posted"

    15. Close the "PNDSTARS" control base.

    16. Update the disposition return in EFDS/STARS.

      Note:

      Disposition the return to "CAT 5 CL" if resolved by another function. Disposition the return to "CAT 7 CL" if identity theft resolved by Return Integrity Verification Operations (RIVO).

    2
    TC 841 posted
    1. Input TC 971 AC 134 (if not already present) and TC 971 AC 850 (only on current tax year).

    2. Input a history item "DONOTRFUND" .

    3. If not already present, Input a transaction code (TC) 971 action code (AC) 522 "WI IVO PNDCLM" for the year you are working, see Exhibit 25.23.2-10, IMF Only TC 971 AC 522 Tax-Related Identity Theft, Case Status (Initial Claim/Submission)

    4. Close the IDRS control base:
      "C#,841POSTED,C,EVFY"
      1481X00003,* .

      Note:

      It is possible for the treasury check to post as a TC 740. If the credit amount for the check is on the account and the check number matches the TC 740, close the base "740POSTED"

    5. Update EFDS notes to "CCP, Lead # MMDDYYYY XX XX, notate received treasury check, (by e-fax or original), dollar amount sent to BFS, indicate what TP states such as;"didn't file" etc., notate if a Form 14039,Identity Theft Affidavit is attached."

      Note:

      Disposition the return to, "CAT 5 CL" if resolved by another function. Disposition the return to "CAT 7 CL " if resolved by RIVO

      Note:

      If IDT and the money is posted, push the return to scheme and refer through STARS as "CAT 7 CC" .

      Note:

      When pushing to Scheme, for source use the service center on the attachedForm 3210, Document Transmittal. If no Form 3210 is attached, use the source "OTHER" .

      Note:

      Add prior year processed returns (if not already in STARS) to the Mass Push Spreadsheet to be updated. When adding a return to the Mass Push Spreadsheet, open a control base on IDRS to:
      Cxx,PNDSTARS,M,EVRY
      148XX00009,*

    6. Update AMS History notes with same information as EFDS notes.

    7. If indications of Identity theft ,input TC 971 AC 522 if one does not already exist on CC ENMOD .

    8. Import/Update LMS.

Third-Party Checks or Miscellaneous Repayments

  1. If a third-party check or miscellaneous repayment is received at an IRS facility, verify that:

    Example:

    Financial Institution issues a check to an individual instead of Department of Treasury or IRS, a money order, etc.

    • It is not a Treasury check

    • The taxpayer indicates that the refund issued is not theirs

    • The taxpayer indicates the refund should not have been deposited to their account


    Original third-party checks are sent to the External Lead Program at:
    Internal Revenue Service
    Attn: External Lead Manager
    Mail Stop 23101
    5045 E Butler Avenue
    Fresno, CA 93727

  2. Work third-party checks and recovered miscellaneous funds as an External Lead deposit.

  3. For third-party checks received, the RIVO POC will e-mail a copy of the original check to the issuing financial institution using the appropriate script to request that the funds be returned with a check payable to IRS or Department of the Treasury. See the RIVO Portal External Lead page for the appropriate script.

  4. Follow the If/And/Then chart for completing Centralized Check Processing (CCP) for third-party checks and/or miscellaneous repayments:

    If And Then
    1
    Check(s) is made payable to a 3rd Party
    1. Input TC 971 AC 134 (if not already present) and TC 971 AC 850 (only on current tax year).

    2. Input a history item "DONOTRFUND" .

    3. Update the IDRS control to:
      "3RDPRTYCK" and then update to "PND$AMT"

    4. If there are indications of identity theft, input a TC 971 AC 522, "WI IVO PNDCLM" , if its not already present for the year you are working, see Exhibit 25.23.2-10, IMF Only TC 971 AC 522 Tax-Related Identity Theft, Case Status (Initial Claim/Submission)

      Current processing year return or the return is already in STARS:

    5. Update the return disposition to "CAT 7 CC." .Update the disposition to" CAT 5 CL" if resolved by another function, or "CAT 7 CL" , if identity theft was resolved by RIVO.

      Prior processing year return:

    6. Complete the mass push template and open a control base to "C#,PNDSTARS,M,EVFY 148XX00009," .

    7. Input the notes in EFDS and AMS, see IRM 21.2.2.4.5, Account Management Services (AMS). Include in the notes "CCP, Lead # MMDDYYYY XX XX, received (original or efax of check) 3rd party check (Bank’s name) check #XXX $XXX.XX, returned to bank, requesting funds, TP states…. (ie. statement from the taxpayer IDT, erroneous refund, F14039, etc.)."

    8. Monitor the "EVFY" control base.

    Note:

    Funds returned for 3rd Party checks are worked as an ELP deposit.

    2
    Check(s) is made payable to a 3rd Party
    If no response received after 45 days The monitoring POC working the age list will:
    • Send a follow up e-mail to re-request the funds. Use the appropriate script, see the External Lead Feedback Script posted to the RIVO Portal page. Allow an additional 15 days for a response.

    • Update the IDRS control base "PND$AMT" to "45FOLLOWUP" .

    • Input an EFDS note, "CCP Lead #45 day follow up e-mail sent" .

    • Update AMS with the same information as the EFDS note, see IRM 21.2.2.4.5, Account Management Services (AMS).

    3
    Check(s) is made payable to a 3rd Party
    If no response received after an additional 15 days from the follow-up e-mail The monitoring POC working the age list will:
    • Input an EFDS note, "No funds returned" , as applicable.

    • Update AMS with the same information as the EFDS note, see IRM 21.2.2.4.5, Account Management Services (AMS).

    • Close the IDRS "45FOLLOWUP" control base with: "NOFNDSRTND,C" .

    4
    Miscellaneous Repayment
    Check or money order is made payable to:
    • US Treasury

    • United States Treasury

    • Internal Revenue Service

    • Department of the Treasury

    1. There is RIVO activity (RIVO transactions, letters, or freeze conditions

    2. A Form 14039, Identity Theft Affidavit is attached, OR

    3. Correspondence indicates identity theft

    1. Input TC 971 AC 134 (if not already present) and TC 971 AC 850 (only on current year).

    2. Input a history item "DONOTRFUND"

    3. Update the Open an IDRS control base to:
      "PNDMISCCK"

    4. If there are indications of identity theft for the tax year you are working, input a TC 971 AC 522 "WI IVO PNDCLM" , if not already present for the year you are working, see Exhibit 25.23.2-10, IMF Only TC 971 AC 522 Tax-Related Identity Theft, Case Status (Initial Claim/Submission)

      Current processing year return or already in STARS:

    5. Update the return disposition to "CAT 7 CC." . Update as "CAT 5 CL" if the account is resolved by another function. If identity theft, and the acount will be resolved by RIVO, update the return disposition to "CAT 7 CL" .

      Prior processing year return:

    6. Complete the mass push template and open a control to "C#,PNDSTARS,M,EVFY 148XX00009,*" .

    7. Input the notes in EFDS : "CCP, Lead # MMDDYYYY XX XX, received (personal check, money order, cashier’s check) Check #XX $XXX.XX , sent to payment processing. TP states…. (i.e. statement from the taxpayer IDT, erroneous refund, F14039, etc.)."

    8. Update AMS with the same information as the EFDS notes, see IRM 21.2.2.4.5, Account Management Services (AMS)

Reject Reason Code 17/18/19/23 Transcripts

  1. Beginning January 2013, an Opt-In Program developed by the IRS, Department of Treasury Bureau of Fiscal Services (BFS) and the National Automated Clearing House Association (NACHA) will allow financial institutions to reject questionable refunds for review.

    Note:

    All Rejects come in on the Reject Reason Code 17 Transcripts.

    Reminder:

    The presence of the CP53 indicates that a flip to a paper check has been implemented.

  2. Financial Institutions use Reject Reason Code 17 (R17 ), to reject current year direct deposit refunds when the name/taxpayer identification number (TIN) listed on the Treasury Automated Clearing House (ACH) file for the tax refund does not match the account holder information in the bank’s records. R17 rejects post to IDRS with a TC 841 DLN ending in "77711" and a control base with an assigned number of "1487111117" . Taxpayer receives a CP 53A, Direct Deposit Rejected by Financial Institution -Refund Check Mailed.. Reject Reason Code 17 will identify name mismatch refunds. A Reject Reason Code 17 REFC (refund cancellation) will generate when one or more of the following situations occur in banking filters:

    • The last name on the account (account holder) does not match the name on the return.

    • Multiple named federal tax refunds deposited into single accounts or multiple accounts.

    • Multiple tax refunds for multiple taxpayers going into a single account without any established relationship.

    • Full and partial name mismatches where a relationship to the account holder is not established.

    • TIN on account does not match return information.

    • There is no exact match of the entity information and efforts to reconcile joint filers is exhausted.

    • The IRS requests funds back as part of a recovery attempt. These funds may come back as either a paper check or a deposit. These accounts contain a TC 971 AC 123 with MISC field "TPP Recovery" .

    Reminder:

    The initial notice advises the taxpayer to wait 10 weeks prior to calling regarding their refund, and includes third-party notification information.

  3. Financial institutions use Reject Reason Code 18 (R18) to reject current year direct deposit refunds when the bank determines the tax refund is identity theft. R18 rejects post with a TC 841 DLN ending in "77712" and a control base with an assigned number of "1487111118" . Taxpayer is mailed a CP 53B,, "Attempt to Direct Deposit Your Refund, Could Not Be Processed" , is sent to the taxpayer.

    Reminder:

    The initial notice advises the taxpayer to wait 10 weeks prior to calling regarding their refund, and includes third-party notification information.

  4. Financial institutions use Reject Reason Code 19 (R19) to reject current year direct deposit refunds when the bank determines the account holder/tax refund is fraudulent. R19 post with a TC 841 DLN ending in "77713" and a control base with an assigned number of 1487111119. Taxpayer is mailed a CP 53C, Direct Deposit Rejected by Financial Institution -Refund Check Mailed

    Reminder:

    The initial notice advises the taxpayer to wait 10 weeks prior to calling regarding their refund, and includes third party notification information.

  5. Subsequently a refund cancellation R17 transcript listing generates to Return Integrity Compliance Services (RICS) External Leads for workload distribution and refund verification. The refund will be released or held upon the completion of the review. If held the return will be referred to the appropriate treatment stream.

    Exception:

    Do not release accounts containing a TC 971 AC 123 with MISC field "TPP Recovery." Dispositioned to PS 30 once the recovered funds post, unless research shows the account is already adjusted to the good taxpayer’s figures.

  6. Reject Reason Code 23 (R23) generates the notice 53B. Process the returns the same as R17 above. When taxpayer states money isn’t mine - send through TPP (PS30) process. . If already went through TPP, the return can go back through TPP (PS30).

Reject Reason Code R17 Procedures

  1. Pull Control D files for NACHA and save as a text file in the appropriate reject folder.

    • Import NACHA files into LMS using the NACHA Import Template. The lead number is the date on the text file followed by the sequence that day and the NACHA reject code, i.e. 031918 01 R23.

    • After file import, update the record in LMS by notating as NACHA, input the total dollar amount on the Control D file in the "Total Amount Available for Recovery" box and assign to Cincinnati.

  2. When the transcript is received, input EFDS return note "BKL-RXX" (XX= Reject Reason code 17/18/19/23) on all returns using CASE, follow the procedures below:

    1. Check IDRS for posting of TC 841.

    2. Ensure TC 841 matches TC 846 amount (look for possible offset to outside agencies).

    3. Check CC TXMODA for DLN 7771X (X= 1, 2, 3 or 4) and control base activity and category code "REFC" . TC 971 AC 805 has REFCANCLXX (XX= Reject Reason code 17/18/19/23) in the MISC field.

  3. Complete an initial review of the RXX (XX= 17, 18, 19 or 23) inventory to determine if the return is valid, questionable or probable identity theft and move to the appropriate EFDS process status within 10 business days. If manually screening the returns follow the procedures below to determine the appropriate EFDS process status and account resolution actions.

    Note:

    Release valid returns en masse weekly.

  4. Supply the SSNs without hyphens to someone with Discoverer to obtain the R17/R18/R19 DLNs. Add each reject DLN into Case and input the appropriate BKL - R17/R19 note. Every Friday the NACHA DLNs for the week need to be sent to the FRE POC.

  5. Follow IRM 25.25.2.2, Data Mining Screening, to assist in making a determination.

    Exception:

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

    1. Review EFDS to aid in determining a pattern.

    2. Identify any previous IDRS reversal adjustments on the account.

    3. Review the account for Exam activity (TC 42X, -L freeze etc.)

      Note:

      If Exam closed their audit and allowed a 'no-change' determination (TC 300 .00 with no other credit reversals), consider the return valid as filed and do not request funds back from the financial institution. If the funds were already returned, release the funds.

    4. Search entity modules for indications of identity theft such as a previously posted TC 971 with Action Code (AC) 5XX. See IRM 3.5.20.2.8.1, Identity Theft Indicator.

    5. Review IDRS for any payments (TC 610, TC 670, TC 430, TC 716, etc.)

    6. Review account for any balance due conditions (this may indicate other actions taken on the account)

    7. Review IDRS for extension to file (TC 460)

    8. Review EFDS notes for indication of previous RIVO involvement.

      Note:

      Search for open issue or previously verified good through contact employer.

      Reminder:

      Research to establish whether the return is IDT or Non-IDT. RIVO DOES NOT AUDIT returns.

  6. Follow the table below after determination:

    If And Then
    1
    The return is good
    filed by the TIN owner
    1. Re-file the return in EFDS.

    2. Update EFDS notes.

    3. Input TC 971 AC 850 (only on current year returns).

    4. Release the refund inputting a TC 290 .00 with a Priority Code (PC) 1 and a Posting Delay Code (PDC) of 1.

    5. Close all RIVO controls.

    2
    The return is considered IDT
    the full TC 846 was returned
    • Disposition the return to Ace Adjustments (PS 30).

      Exception:

      If the return has previously been through the TPP process, the return cannot be put back through the TPP process unless the module contains TC 971 AC 123 MISC field "TPP RP" .

    • Input an EFDS return note of "IVO EL IDT BKLD" .

    • Close all RIVO controls.

    3
    The return is considered IDT
    the full TC 846 is not returned

    Exception:

    If the account contains a TC 971 AC 123 with MISC field "TPP Recovery" , then treat as in box 2 above

    • Push to Scheme and update the category and disposition to the appropriate identity theft Triage Category per IRM 25.25.5-1, Triage Procedures . If completed en masse, update to "CAT 1" .

    • Input an EFDS return note of "IVO EL IDT BKLD" .

    • Close all RIVO controls.

    4
    The return is questionable
    is an electronic filed return
    • Update disposition in EFDS as appropriate.

    • Close any IVO open IDRS control bases.

    5
    The return is questionable
    is a paper filed return
    • Follow table below.

    • Update disposition in EFDS as appropriate.

    • Close any IVO open IDRS control bases.

  7. Follow the table below for paper returns:

    If Then
    1
    A paper return
    • Request the return from files.

    • Input CC ESTABD.

    • Update activity to "ESTAB1" .

    2
    If more than 14 days have passed
    • Initiate a second request using CC ESTABV to expedite the request.

    • Update the activity to "ESTAB2" .

    3
    The return is received on the second request
    • Input the IDOC information in EFDS and disposition the return as appropriate.

      Note:

      If pushed to verification , add to manual verification spreadsheet.

    4
    The return is not received on the second request
    • Push the return to Scheme.

    • Include a return note in EFDS stating "paper return – not received" .

  8. If there is a duplicate Filing Condition on CC TXMODA indicated by a –A Freeze:

    1. Suspend the case, update control base to B status and update the activity to "SUSPNCE2AM" .

    2. When Accounts Management (AM) work is complete, they update the control activity to "DUPWKD" .

    3. RIVO then monitors for the activity update and inputs a TC 290 .00 with PC 1 and closes the control base.

Reject Reason Code R23 Procedures

  1. Pull Control D files for NACHA and save as a text file in the appropriate reject folder.

    • Import NACHA files into LMS using the NACHA Import Template. The lead number is the date on the text file followed by the sequence received that day and the NACHA reject code, i.e. 031918 01 R23.

    • After file imports, update the record in LMS by notating as NACHA, input the total dollar amount on the Control D file in the "Total Amount Available for Recovery" box and assign to Cincinnati.

  2. Send R23s received to ACE/Adjustments and input the "BKL - R23" note along with the "IVO EL IDT BKLD" note. (If previously re-filed by TPP, check to see if that was because of the lost refund and not because of authentication, they can go back through for lost refund).

  3. Split results into two tabs, TE & Valid. Run the DLNs through Discoverer to determine which accounts have split refunds. Load the accounts on the TE tab that do not contain split refunds in Case and anything that has not been previously dispositioned will be sent to ACE/ADJ with the appropriate note "IVO EL IDT BKLD" . Leave returns dispositioned to SCHEME/Verification alone,send returns in any other process besides Re-file to ACE/ADJ. Review returns in re-file to determine:

    If And Then
    the re-file was from a TE working NACHA Release the refund
    the re-file was from a TE not working NACHA lost refund Check validity and disposition appropriately
    the re-file was from a TE not working NACHA the return is valid
    • Load into CASE and review any previous dispositions

      Caution:

      These could be IDT returns.

    • Run the returns through a CC IMFOLT and CC TXMODA GII to find out which accounts still have a credit balance and which accounts still have an open control base.

    • Close all control bases using Access/Macros & GII.

    • Release these refunds with a TC 971 AC 850.

    • Re-file (need to show re-filed by a NACHA TE).

Undeliverable Refunds

  1. Undeliverable refunds involve paper checks returned as undeliverable that were prior R17, R18, R19 rejects and R23. Fraud Referral and Evaluation (FRE) team, compiles a listing of these checks for RIVO to review the account and determine if it t meets IDT characteristics. Follow the chart below to determine the applicable action to take:

    If And Then
    1
    Meets IDT characteristics for a current processing year
    complete overpayment returned Push through manual TPP process to PS 30 with the specific bank lead EFDS note.
    2
    Meets IDT characteristics for a prior processing year
    complete overpayment returned push to STARS and update as CATG "7" Disp "MR" .
    3
    Meets IDT characteristics for a current processing year
    partial refund returned ((i.e.split payment and only one TC 846 was returned as undeliverable) push to STARS and update as CATG "7" Disp" MR" .
    4
    Meets IDT characteristics for a prior processing year
    partial refund returned push to STARS and update as CATG "7" Disp "MR" .
    5
    Does not meet IDT characteristics
    Take no action.
    6
    Cannot determine if meets IDT characteristics
    update EFDS note, but take no actions.

    Note:

    FRE monitors for 60 days. If the S freeze is unresolved, push to STARS, update to Cat 7 and the applicable disposition..

STARS Disposition Definitions

The table below describes the STARS disposition status codes .

Note:

It is critical to check the Category Code and Disposition of each DLN before updating STARS. The correct combination is needed for the systemic processes to work. Please see IRM for more information.

STARS Disposition Status Disposition Description Disposition Usage Details
A1 QRP Category 1 Pending BRO AM Referral Special Project
A2 QRP Category 2 Pending BRO AM Referral Special Project
A9 Category 99 manual referrals to AQC (HQ only) Special Project
AA Resolved (accepted by AM) Systemic
AC AM Reject Corrected (Austin use only) Special Project
AE Accepted by Exam Systemic
AF Bad/Bad IDT Account with minus A freeze on module Available for update IDRS has an open control to 1487777777 and all returns are considered IDT
AL Closed (Account Settled on AA) Available for update WOW, External Leads and statute process when making an adjustment for disallowance or there is an erroneous abatement and return is being added to DFS spreadsheet
AM Referred to BRO Accounts Management Special Project
AP Adjustment FDCs (Monitoring) Special Project
AQ ACCEPTED by AQC Systemic
BA Bundle for AM Available for update
BB ID THEFT BAD/BAD Available for update
BE Bundle for Exam Available for update
BG ID THEFT BG Available for update IDT /Good and Open Control to IVO, (Ex. NCAT, ECAT) (IDT return is TC 150) - no - A freeze present on module
BQ Batch AQC Available for update
BT Below Tolerance Special Project
CA Corrected for AM (Reject) Available for update Used to update a disposition that has been holding in the same status for longer than 60 days, or a return with no disposition (field is blank). The use of these codes is determined by the refundable credits on the account. Returns claiming no credits or refundable credits under $500.00. External Leads rejects and IDT overages also use this in their work flow.
CC Returned Refund Check received in Centralized Check Program (CCP) Available for update Confirmed IDT TC 841 posted with no money posted and IVO resolved by IVO
CD CADE Return Lost Refund Final Special Project
CE Corrected for Exam (Reject) Available for update Used to update a disposition that has been holding in the same status for longer than 60 days, or a return with no disposition (field is blank). The use of these codes is determined by the refundable credits on the account. Returns claiming refundable credits of more than $500.00. External Leads rejects and IDT overages also use this in their work flow.
CI CI ID Theft Inventory Received Special Project
CL Closed (Account Settled) Available for update Account is closed, the case has been fully resolved by IVO (CAT 7) or another business unit (CAT 5). Should not be changed without manager/lead determination and approval.
CO Return Sent to Collections Special Project
CQ Corrected for AQC (Reject) Available for update
CT Confirmed ID Theft per TP response Available for update
CX ID Reject (Return is not Identity Theft) Special Project
DB CI ID Theft Received Ignore IRP Special Project
DD Multi DD Ref flip to Paper return Undel treat as IDT Special Project
DE Deferred Exam Inventory Special Project PY2018 QRP Clean-up
DL Delete from STARS Available for update
DR R17 DD Rej Flip to Paper Ref rel rtn Undel trt IDT Special Project
E5 Manual Referral to WOW Available for update True TP Wage/wh and no refundable credits; see Manual Referral Disposition Tab
E6 Manual Referral to AQC Available for update True TP Wage/WH and refundable credits; see Manual Referral Disposition Tab
E7 Manual Referral to WI Exam Available for update True TP HSH with refundable credits; see Manual Referral Disposition Tab
E8 Manual Referral to SBSE Exam Available for update True TP Sch C with refundable credits; see Manual Referral Disposition Tab
E9 Category 99 manual referrals to Exam (HQ only) Special Project
EC Exam QRP case closed Available for update
EL Closed (Account Settled on AE) Available for update
ET Exam Tolerance Special Project
EX Return Sent to Exam Special Project
FF FRIV Filer Special Project
GB ID THEFT GB Available for update Good/IDT and either Credit Balance, Zero Balance, or Balance Due
GT Gas Tax/Fuel Excise to Exam Special Project
HA Hold AM Special Project
HE Hold Exam Special Project
ID ID Theft AMTAP Available for update Used by FRE

Note:

Account will be resolved using the (RICS) IDT tool

IP In Process Available for update
JA AM Referral Rejected by MFDC Special Project
JE Exam Referral Rejected by CFDC Special Project
LF Prior -L freeze return to be included in open Exam audit Special Project
LO Lost Refund Offset Special Project
LR Lost Refund Final Special Project
ME Math Error No Refund Remains Final Special Project
MR IDT Return Requiring Manual Review for Resolution Available for update Multiple TC 846s, Offsets, etc.
ND CI Reviewed / Not Deleted Available for update
NG No Go as EFDS Selected Referral Special Project
NR Non-Referable Return Systemic NR means that the return is non-referable. This disposition indicates that EFDS was unable to refer to any area. Correction or manual referral may be necessary when a return is in this disposition. Review for possible correction before using manual referral process.
NS No Selection Special Project
NT No TC 150 Posted to Master File Special Project
O1 IDT return with good TP address Available for update Address is not to be changed when resolved
OA Offset Adjustment Needed Special Project
OM Operation Mass Mailing Available for update
PA Pending Referral to AM Systemic In the process of being referred; do not change if less than60 days
PE Pending Referral to Exam Systemic In the process of being referred; and do not change if less than60 days
PJ Identity Theft Project Special Project
PL Prisoner Listing Special Project
PN Pending Actions Special Project In the process of being referred; do not change if less than 60 days
PQ Pending REFERRAL to AQC Systemic In the process of being referred; do not change if less than60 days
PT "Premium Tax Credit " Available for update Questionable Premium Tax Credit (in process of fraud determination)
PU ID THEFT DDb Filter Fraud Available for update Unpostable 126 RC 0 DLN is considered IDT during the TPP process. This is a final disposition. Do not change unless return posted and is being moved into IDT treatment stream.
QL Closed (Account Settled on AQ) Available for update Same as CL for IDT or PU for TPP
QX Rejected while in Waiting for AQC Referral Systemic
R7 Non-Compliant Rule 7 Filter Cases Available for update DDb Non-Compliant filter Rule 7 (with both AOTC and ACTC credits) these are non-income related issues. (In process of fraud determination)
RA Referral to AM Special Project
RE Referral to Exam Special Project
RR Ready for Release Special Project
RV Review for identity theft Special Project
S1 ID THEFT SINGLE BAD NLR Available for update

Note:

Account will be resolved using the (RICS) IDT tool

S2 ID THEFT SINGLE BAD LR Available for update Spreadsheet work done by TEs on TC 846 for the entire refund or part of the refund - may have a Tax Offset (TC 826/896) (Not a TOP Offset) - no good address for the taxpayer
SB Single Bad Available for update

Note:

Account will be resolved using the (RICS) IDT tool.

Selected when the TP was deceased prior to the tax year
ST Statute Return Special Project
TA Taxpayer Advocate Case Special Project
TR ID Theft Triage Required AMTAP Special Project
TT GATT (full year prisoner claiming unallowable refundable credit) Available for update AQC treatment stream for GATT (in process of fraud determination)
W9 Category 99 manual referrals to WOW (HQ only) Special Project
WA Waiting for AM referral (Automation) Systemic
WL Refund released due to workload Special Project HQ update only
WQ Waiting for AQC Referral Systemic
XA Rejected by AM Systemic
XE Rejected by Exam Systemic
XQ REJECTED by AQC Systemic
XW Rejected while in waiting for AM referral (Auto) Systemic
ZA AM Reject after aging (Austin Use Only) Special Project
ZC AM REJECT after aging corrected (Austin Only) Special Project
ZF Z- Freeze Available for update
ZZ CI Use Only Special Project

STARS Category Definitions

STARS Category Category Description
Category 1 Nullity
Category 2 No refundable credits
Category 3 Refundable credits (EITC)
Category 4 Additional Child Tax Credit (ACTC)
Category 5 Account worked by another function
Category 6 Phishing/Bulk filing
Category 7 Identity Theft
Category 8 Questionable Refundable Credits including ACA 15 Premium Tax Credit (PTC)
Category 9 Return Preparer (RPP)

Letter for Intercepted Prepaid Debit Card(s)

Letter for Intercepted Prepaid Debit Card(s)
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
ATLANTA, GA 30308
Financial Institution
PO Box 12345
Anywhere USA
By :e-mail/mail/fax
Re: Intercepted Prepaid Debit Cards
The U.S. Postal Inspection Service notified us that it suspected that prepaid debit cards you issued were used to receive fraudulent Federal tax refunds. The U.S. Postal Inspection Service intercepted these cards from the mail and provided them to our agency. We are returning these cards to you as the identified issuing institution.
We wish to investigate whether any Federal tax refunds were deposited to the prepaid debit cards returned to you to ensure that we recover all refunds that are improper Federal payments. This letter is our request for your assistance with the investigation.
The Federal Right to Financial Privacy Act, as amended in 2008, authorizes you to assist us by providing financial records, upon request, when we are investigating or recovering an improper Federal payment. In accordance with 12 U.S.C. § 3413(k)(2)(B), we request that you provide us with the direct deposit (routing and deposit account) numbers, Federal tax refund amounts, date of deposit or ACH transfer, and Social Security Number reported by the Treasury Financial Management Service on the ACH file for each Federal tax refund deposit that posted to the cards returned to you so that we may match this information against our records. Our request for direct deposit numbers is focused on the numbers your customer would enter on a Federal tax return to direct a refund to the card.
We ask that you provide this response in spreadsheet format within 20 days from the date of this letter by secure email to efleads@irs.gov with a subject line following this format: Intercepted Prepaid Debit Cards, [Your Name], [Date]. Please direct any questions about this request to the same email address.
We may later request that you return to us any refunds you identify to the extent that funds remain in the accounts you identify. We may also request your best efforts to protect the funds in any accounts by stopping the re-issuance of these cards and refusing any further withdrawals or payments requested by the cardholder.
We appreciate your assistance in this matter.
Sincerely,
Denise D. Davis
Director, Return Integrity Operation

External Lead Involvement Indicators

The following chart contains the Integrated Data Retrieval System (IDRS) control bases and history items indicating External Lead involvement.

1
IDRS Activity or Control number
Description
2
"BKLD" (148XX00001)
An External Lead was received.
3
"REQFUNDS" (148XX00002)
IRS requested the funds (refund) from the financial institution.
4
"PND841BFS" (148XX00003)
Federal Refund Treasury Check received. Wait for TC 841 to post back funds.
5
"BKLDCKRECD" (148XX00004 or 148XX00007)
IRS received the funds (refund), the amount returned typically is less than the TC 846 due to bank fees.
6
"BKLCOMNGLD" (148XX00004 or 148XX00007)
IRS received the funds (refund) but is unable to determine the dollar amount to apply to this account or the account was previously adjusted and the refund covered up with a TC 841. These funds are placed in a general ledger account.
7
"NOFNDSAVLB" or "NOFNDSRTND" (148XX00004 or 14XX00007)
No funds (refund) are available to be returned to the IRS or no funds returned (no response from the bank)
8
"BKLDACHREV" (148XX00005)
Automated Clearing House (ACH) Reversal associated to an External Lead.
9
"VALID150" (148XX00007)
When TC 720 posts, refund will be released.
10
"DONOTRELSE" or "DONOTRFUND" (148XXXXXXX)
TC 720 or TC 841 posted and refund should not be released without approval from IVO.
11
"PNDSTARS" (148XX00009)
Suspend until return has been pushed to STARS and can be referred
12
"FRAUDCASE" , with Category code "ELOF" (148XX00012)
Suspend until offset reversal posts back to the account (TC 899)
13
"BKLD OFFSET"
There is a potential for an offset reversal based on account review
14
"3RDPRTYCK"
Third-party check received that has not posted.
15
"PNDMISCCK"
Payment received to repay a refund received in error.
16
"720PENDING"
Waiting for the posting of the TC 720. Funds to post back to the account
17
"PND722"
Waiting for the TC 722 to post
18
"722POSTED"
The TC 722 posted
19
"PND841" assigned to 148xx00014
Waiting for the posting of the TC 841. Funds to post back to the account.
20
"PND841" assigned to 148xx00017
Waiting for the posting of the TC 841. Funds to post back to the account.
21
"ALTEREDCK" assigned to 148xx00003
The refund check has been altered. i.e., money amount changed, name changed etc.,
22
"841POSTED"
Funds have posted back to the account.
23
"TCISCANCEL"
A treasury check has been canceled through TCIS and is waiting for the TC 841 to post to the account.
24
"PNDMISCCK"
A miscellaneous payment was received from the taxpayer to repay the refund. Waiting for the posting of the payment.
25
"BKLDERROR"
A control was opened in error.
26
"RFNDNOTHLD"
The refund was not held .
27
"REJECTTORI"
Reject the case back to refund inquiry.
28
"740POSTED"
The TC 740 posted to the account.
29
"720POSTED"
The TC 720 has posted to the account.
30
"NOTIRSFNDS"
The funds were not issued by IRS and they are not being requested back from the financial institution.

Recovery from Third Party Check Letter

Recovery from Third Party Check Letter
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
ATLANTA, GA 30308
Date
Financial Institution
Address
City, ST Zip code
By: mail
Re: Recovery from Third Party Checks
We received third party checks that we believe were issued by you in connection with the filing of federal tax returns claiming a fraudulent tax refund. We are returning these checks to you as the identified issuing institution.
We wish to investigate whether any federal tax refunds were deposited to the accounts of the checks we have returned to you to ensure that we investigate and recover refunds that are improper federal payments. This letter is our request for your assistance with the investigation.
The Federal Right to Financial Privacy Act, as amended in 2008, authorizes you to assist us by providing financial records, upon request, when we are investigating or recovering an improper federal payment. In accordance with 12 U.S.C. § 3413(k)(2)(B), we request that you provide us with the following information about federal tax refunds that posted to the accounts related to the checks we are returning to you:
  • Direct deposit (routing and deposit account) numbers,

  • Federal tax refund amount,

  • Date of deposit or ACH transfer,

  • Name reported on the ACH file, and

  • Social Security Number reported on the ACH file.

Our request for direct deposit numbers is focused on the numbers your customer would enter on a federal tax return to direct a refund to your bank. We welcome additional information, such as the account or customer reference number, that will assist us in communicating with you about these refunds.
We ask that you create an electronic spreadsheet listing only suspect refunds that posted to accounts that currently have a positive balance. If there is no chance of returning any part of a refund, please exclude the refund from your spreadsheet. We ask that you provide the spreadsheet within 30 days from the date of this letter by secure email to efleads@irs.gov with a subject line following this format:
Recovery from Third Party checks, [Your Financial Institution Name], [Date]
Please mention this letter in the email body and include information about a point of contact at your institution. Please describe any potential patterns or trends of improper payment revealed by federal refunds you received, even if related to accounts with a zero balance or other accounts at your institution. If you include details about these other accounts, please make clear that you are not offering to return funds from those accounts, for example by listing the current balance on each account. You do not need to provide any detail if you are already working with another IRS office to report potential refund fraud.
We may later request that you return to us any refunds you identify to the extent that funds remain in the account. We may also request your best efforts to protect the funds in any accounts by stopping the re-issuance of these checks and refusing any further withdrawals or payments requested by the account holder.
Please direct any questions about this request to efleads@irs.gov.
We appreciate your assistance in this matter.
Sincerely,
Denise D. Davis
Director, Return Integrity Operation