25.25.11 Wage and Withholding Only (WOW) (Notice CP 05A) Procedures

Manual Transmittal

September 20, 2018

Purpose

(1) This transmits original IRM 25.25.11, Wage and Withholding Only (WOW) (Notice CP 05A) Procedures

Material Changes

(1) Editorial changes made throughout the IRM section.

(2) IPU 18U0374 issued 02-28-2018 IRM 25.25.11.1.3 added IRC descriptions

(3) IPU 17U1614 issued 11-20-2017 IRM 25.25.11.1.6 add restricted access link.

(4) IPU 18U0374 issued 02-28-2018 IRM 25.25.11.1.6 add related resources

(5) IPU 17U1451 issued 10-16-2017 IRM 25.25.11.3 box 5 and 6 update the SERP links

(6) IPU 17U1451 issued 10-16-2017 IRM 25.25.11.3.2 (3) add note for disaster area relief

(7) IPU 17U1614 issued 11-20-2017 IRM 25.25.11.3.2(3) box 1 and 2 remove the link to IRM 25.25.2.4, Stopping/Releasing the Refund.

(8) IPU 18U0374 issued 02-28-2018 IRM 25.25.11.3.2(3) box 1 and 2 add new disposition ,DL, and required notes

(9) IPU 18U0374 issued 02-28-2018 IRM 25.25.11.4(3) add new disposition, DL, and required notes

(10) IPU 17U1689 issued 12-18-2017 IRM 25.25.11.5 partial disallowance procedures added

(11) IPU 17U1451 issued 10-16-2017 IRM 25.25.11.6 (1) add note for disaster area relief

(12) IPU 18U0374 issued 02-28-2018 IRM 25.25.11.6(1) add new disposition, DL, and required notes

Effect on Other Documents

IRM 25.25.11 dated 10-10-2017 is superseded. This IRM also incorporates the following IRM Procedural Updates (IPUs): IPU 17U1451 issued 10-16-2017, 17U1614 issued 11-20-2017, 17U1689 issued 12-18-2017 and 18U0374 issued 2-28-2018.

Audience

Campus employees in Integrity & Verification Operation, Return Integrity and Compliance Services

Effective Date

(09-20-2018)

Denise D. Davis
Director, Return Integrity Operation
Wage and Investment Division

Program Scope and Objectives

  1. Purpose and Program Goals: This IRM section provides guidance for Integrity and Verification Operation (IVO) employees when verifying individual master file returns for possible false income and withholding. Individual master file returns are scored through the Dependent Database (DDb) or through the Return Review Program (RRP) system. These selection processes identify suspicious returns exceeding certain tolerances for false or inflated wages and/or withholding claimed on returns.

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

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

  4. Program Owner: RIO is the program office responsible for oversight of this program.

Background

  1. Return Integrity Operation (RIO) strengthens the integrity of the tax system by:

    • Protecting the public interest by improving IRS 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 to track the inventory, including receipts and closures.

  2. A quality control program is in place to review all processes to ensure accuracy and effectiveness.

Authority

  1. Refer to the following:

    • IRM 1.2.13.1.10, Policy Statement 4-21

    • IRM 1.1.13, Organization and Staffing, Wage and Investment Division.

    • 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. Return Integrity Operation (RIO) has responsibility for information in this IRM. Information is published in the IRM on a yearly basis.

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

  3. The Chief of the Data Management and Operation Staff (DMOS) is responsible for ensuring this IRM is timely submitted to publishing each year.

  4. More information can be found in IRM 1.1.13.7, Return Integrity and Compliance Services.

Acronyms

  1. For a list of Acronyms used throughout Integrity and Verification Operation (IVO) 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.

    • IRM 25.25, Revenue Protection

    • IRM 25.23, Identity Protection and Victim Assistance

    • IRM 21, Customer Account Services

    • IRM 2, Information Technology

    • IRM 3, Submission Processing

    • IRM 4, Examining Process

  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:

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

Wage/Withholding Only (WOW) (Notice CP05A) Overview

  1. When Integrity & Verification Operation (IVO) identifies a return containing questionable income and withholding only. Notice CP 05A, Information Regarding Your Refund - Refund Being Held Pending More Thorough Review may be sent to the taxpayer at the address of record. The Notice CP 05A requests additional information to support the income and withholding claimed on the return and the case is suspended for 60 days. If the taxpayer does not respond within the allotted time, the return is systemically dispositioned in the Electronic Fraud Detection System (EFDS) to be worked via the Wage and Withholding Only (WOW) Tool. The WOW Tool will adjust the account based on the income and withholding data in EFDS, as perfected by IVO, and issue a Letter 105C, Claim Disallowed, or a Letter 106C, Claim Partially Disallowed, as appropriate, to the taxpayer. If the WOW Tool cannot adjust the account due to issues with the information in EFDS or issues on Integrated Data Retrieval System (IDRS), the case will be placed on a reject file to be worked manually by IVO. See Exhibit 25.25.11-1Wage and Withholding Only (WOW) CP 05A Reject Codes for a list of possible codes. See IRM 25.25.11.6., Manual Referrals / Rejects, for additional guidance for addressing the WOW issue on the tool rejected cases.

  2. Correspondence received in response to the Notice CP 05A are resolved by IVO per the procedures in this IRM.

Notice CP 05A Responses

  1. Responses to Notice CP 05A, Information Regarding Your Refund - Refund Being Held Pending More Thorough Review, received by mail, fax, Form 4442, Inquiry Referral, or Operations Assistance Request (OAR), will be processed by Integrity and Verification Operation (IVO).

  2. If a third party, such as the taxpayer’s employer, who is not the taxpayer’s authorized representative, responds to the Notice CP 05A and requests wage substantiation information or other information about the taxpayer’s return or account, the IRS cannot provide that information or any other specific information about the taxpayer or his/her return. The IRS can advise the third party that, in general, the IRS needs the following documentation to substantiate a taxpayer’s reported wages and withholding:

    • A copy or copies of a wage statement for the year of the return.

    • A letter from the employer on the company letter head. Letters from employers must have company letter head and show income and withholding amounts. Regardless of verification of income method, the taxpayer must provide a name and telephone number of an employer contact.

    • Similar statements such as pay stubs must show employer information including Employer Identification Number (EIN) and a contact name and telephone number. Pay stubs also must show the taxpayer information, including taxpayer identification number (TIN).

  3. All incoming Notice CP 05A responses will be controlled on IDRS to IVO using category "CP5A" and the received date of the correspondence.

  4. CP 05A correspondence and referrals will be sorted or resolved per the chart below:

    If Then
    1
    The letter or notice is returned undeliverable (may have a yellow sticker from the post office)
    Destroy the notice or letter as classified waste, per IRM 21.5.1.4.10, Classified Waste.
    2
    The mail is 'misdirected' mail not in response to an IVO letter or addressed by the taxpayer to an IVO stop number
    Return the mail to the originating function or forward as appropriate. See Austin Document Routing Guide (DRG) for additional forwarding information.
    3
    There is a -L Freeze condition on the account
    • Review CC AMDISA to determine the status of the Examination (Exam) case. If the status is greater than 08 (if less than 08 process as normal), route the response to Exam per the AIMS Status Code and the QRP Source and Project Code. See IRM 4.19.14.8.2, QRP Source Code and Project Codes, and My SB/SE Employee Group Code for additional guidance and routing information.

    • Review the taxpayer identification number (TIN) in the Electronic Fraud Detection System (EFDS) for a prior return filing for the same tax period. If a prior return filing is found, input return notes in EFDS and if necessary, complete the verification process. Push the return to Scheme and update the return disposition to "CAT 5 CL" .

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Destroy the notice or letter as classified waste, see IRM 21.5.1.4.10, Classified Waste.

    • Ensure all IVO control bases are closed.

    4
    There is a -A Freeze condition and/or an open control to Accounts Management (AM) on the account
    • Review the case image in Accounts Management Services (AMS) to determine if the information provided in the response is necessary for AM to resolve their case. If the information is already present or is available on AMS or IDRS, classify waste the response. If a Form 14039 is attached with an original signature and it is not present in AMS images, route the Form 14039 to the Image Control Team (ICT) using the Form 12305, Routing Slip. If the AMS image contains a Form 14039, destroy the Form 14039 as classified waste. If the response includes a Form 1040X, Amended U.S. Individual Income Tax Return, route the Form 1040X and envelope to ICT using the Exhibit 25.25.2-5, RICS IVO AR Adjustment Request Form.

    • Review the TIN in EFDS for a prior return filing for the same tax period. If a prior return filing is found, input return notes in EFDS and if necessary, complete the verification process. Push the return to Scheme and update the return disposition to "CAT 5 CL" .

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Destroy the notice or letter as classified waste, see IRM 21.5.1.4.10, Classified Waste.

    • Ensure all IVO control bases are closed.

    5
    The reply indicates the taxpayer is a victim of identity theft (a Form 14039, Identity Theft Affidavit or similar statement)
    See IRM 25.25.11.3.1, Notice CP 05A - Identity Theft Response.
    6
    The reply indicates the taxpayer filed the return
    See IRM 25.25.11.3.2 Notice CP 05A - Non-Identity Theft Response.

Notice CP 05A - Identity Theft Response

  1. Taxpayer’s may respond to the Notice CP 05A , Information Regarding Your Refund - Refund Being Held Pending More Thorough Review, with a Form 14039, Identity Theft Affidavit, or similar statement indicating they did not file a return or that their return could not be accepted electronically because another return was filed using their taxpayer identification number (TIN). Integrity and Verification Operation (IVO) will resolve the account using the procedures in this IRM.

  2. If there is an another open IDRS control base present on the module to a specific employee (disregard generic control bases), contact the controlling employee prior to resolution to coordinate efforts in order to prevent erroneous or duplicate adjustments or actions. Refer to IDRS - Unit and USR Database, located on the SERP Home Page under the Who/Where tab to locate the employee.

  3. If the taxpayer is requesting a copy of their return or the identity theft return, follow the instructions in IRM 21.2.3.5.8, Transcripts and Identity Theft.

  4. Follow the instructions in the chart below to resolve the account and respond to the taxpayer:

    If And Then
    1
    The reply indicates the taxpayer is a victim of identity theft or has a Form 14039 attached.
    No return for the taxpayer is attached to the response.
    • If a TC 971 AC 129 is present, input a TC 972 AC 129 and open a control base with the following information:
      C#, IDT,M,MISC
      1487311111,*

    • If an unreversed TC 971 AC 121 or TC 971 AC 124 (the DLN in the MISC field of the TC 971 AC 124 matches the DLN of the identity theft return) is present, input a TC 972 AC 121 or TC 972 AC 124, see Exhibit 25.25.6-5, TC 972 AC 121, AC 124, or AC 129 Input Screen.

    • Input a TC 971 AC 522 if necessary, per IRM 25.23.2.3.7.., Marking Taxpayer Accounts When Accepting Identity Theft Claims.

    • Update the address as necessary as indicated by the taxpayer.

    • Input return notes in EFDS and update the disposition in EFDS per IRM 25.25.5-1, Triage Procedures.

      Note:

      If the return is in Process Status (PS) 49 (ID Theft Hold) take no action in EFDS.

    • If the return will be dispostioned in STARS to "MR" , open a control base using "EVFY" to the identity theft generic IDRS number for the team/site and route the correspondence to the team/site.

    • If the return will be dispositioned in STARS to "AF" , input EFDS notes, and destroy the correspondence as classified waste, see IRM 21.5.1.4.10, Classified Waste.

      Exception:

      If a Form 14039 with an original signature is present, route the response to the open IVO control.

    • If the return will be dispositioned to "CL" and the account was resolved as identity theft on IDRS and a Form 14039 with an original signature is present, associate the Form 14039 to the account adjustment using Form 9856, Attachment Alert to Document Retention. All other responses can be destroyed as classified waste, see IRM 21.5.1.4.10, Classified Waste.

    • For returns dispositioned to all other dispositions, if a Form 14039 with an original signature is present, associate the Form 14039 to the DLN of the TC 150 (if a paper DLN) otherwise send the Form to Alpha Files per IRM 3.5.61.22.10, Identity Theft Returns - Alpha Files.

      Exception:

      If the signed Form 14039 is viewable in AMS images, destroy the form as classified waste.

    • If the account does not contain a posted return (TC 150) on MFT 30 for the tax period in question and a Form 14039 is viewable in AMS images, destroy the response (including any Form 14039 (signed or unsigned) as classified waste. If there is no image of a Form 14039 in AMS images, send the signed Form 14039 to Alpha Files per IRM 3.5.61.22.10, Identity Theft Returns - Alpha Files.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Destroy the notice or letter and any internal documents as classified waste, see IRM 21.5.1.4.10, Classified Waste.

    • Close the IVO control base for the response.

    2
    The reply indicates the taxpayer is a victim of identity theft or has a Form 14039 attached.
    An original unprocessed return for the taxpayer is attached to the response.
    • If a TC 971 AC 129 is present, input a TC 972 AC 129 and open a control base with the following information:
      C#, IDT,M,MISC
      1487311111,*

    • If an unreversed TC 971 AC 121 or TC 971 AC 124 (the DLN in the MISC field of the TC 971 AC 124 matches the DLN of the identity theft return) is present, input a TC 972 AC 121 or TC 972 AC 124, see Exhibit 25.25.6-5, TC 972 AC 121, AC 124, or AC 129 Input Screen.

    • Input a TC 971 AC 522 if necessary, per IRM 25.23.2.17.2, Marking Taxpayer Accounts When Accepting Identity Theft Claims.

    • Detach the return, all necessary return attachments, (including the Form 14039) and the envelope from the reply and send the return to Submission Processing (SP) for pipeline treatment. See IRM 3.10.73.6(12), Batching Unnumbered Returns and Documents, for procedures to follow when forwarding returns to SP for processing.

    • Input return notes in EFDS and if necessary, complete the verification process. Push the return to Scheme and update the return disposition to "CAT 5 CL" .

      Note:

      If the return is in PS 49 (ID Theft Hold) take no action in EFDS.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Destroy the notice or letter and any internal documents as classified waste, see IRM 21.5.1.4.10, Classified Waste.

    • Close the IVO control base for the response.

    3
    The reply indicates the recipient on the letter does not live at that address.
     
    • Input return notes in EFDS and if necessary, complete the verification process. If fraud or IDT push the return to Scheme.

    • Update the disposition in EFDS per IRM 25.25.5-1, Triage Procedures.

    • Destroy the notice or letter and any internal documents as classified waste, see IRM 21.5.1.4.10, Classified Waste.

    • Ensure all IVO control bases are closed.

Notice CP 05A - Non-Identity Theft Response

  1. Taxpayers may respond to the Notice CP 05A , Information Regarding Your Refund - Refund Being Held Pending More Thorough Review, with various forms or statements to substantiate the income and withholding claimed on the return, or the taxpayer may state an error was made and provide a corrected or amended return (Form 1040X, Amended U.S. Individual Income Tax Return). Integrity and Verification Operation (IVO) will resolve the account using the procedures in this IRM.

  2. If an open IDRS control base is present on the module to a specific employee (disregard generic control bases), contact the controlling employee prior to resolution to coordinate efforts in order to prevent erroneous or duplicate adjustments or actions. Refer to IDRS - Unit and USR Database, located on the SERP Home Page under the Who/Where tab to locate the employee.

  3. Follow the chart below for resolving non-identity theft replies:

    Note:

    Research account for -O freeze. Do Not send disallowance during the disaster relief period. Do Not Disallow or Default accounts during the disaster relief period, unless agreed to by the taxpayer. See for disaster locations.

    If Then
    1
    A Form W-2 is submitted and the information can be verified per CC IRPTR or the Form W-2 is for an Individual taxpayer identification number (ITIN) return that has a "work assumed" social security number (SSN) and the Form W-2 verifies per Command Code (CC) IRPTR data or Social Security Administration Online Database (SSA _ORS), see IRM 25.25.3, Revenue Protection Verification Procedures for Individual Master File Returns
    • Input notes as appropriate in EFDS.

    • Update the return disposition in EFDS to "Re-file" , if necessary, complete the verification process.

    • Release the refund. .

      Note:

      If inputting a TC 290 for zero to release the refund, input the adjustment as a source document (SD) and attach the correspondence to a screen print of the transmitted CC REQ54 and send to Files per local closed case procedures.

    • If the return is in STARS, update the return disposition to "DL" to have it removed from STARS. A reason must be entered in the return's STARS or EFDS Notes when requesting a return be deleted from STARS.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Destroy the notice or letter as classified waste, see IRM 21.5.1.4.10, Classified Waste.

      Exception:

      Do not classify waste the correspondence if a TC 290 for zero will be input to release the refund. (See instructions above.)

    • Ensure all IVO control bases are closed.

    2
    Other information is provided such as Form 4852, Form 1099, pay stubs, letters from employers which contain the company name, address, employer identification number (EIN), name and SSN/ITIN of employee and is verifiable through research (CC IRPTR) or contact with the employer, and matches the information on the return. See IRM 25.25.3, Revenue Protection Verification Procedures for Individual Master File Returns
    • Input notes as appropriate in EFDS.

    • Update the return disposition in EFDS to "Refile" , if necessary, complete the verification process.

    • Release the refund. .

      Note:

      If inputting a TC 290 for zero to release the refund, input the adjustment as a source document (SD) and attach the correspondence to a screen print of the transmitted CC REQ54 and send to Files per local closed case procedures.

    • If the return is in STARS, update the return disposition to "DL" to have it removed from STARS. A reason must be entered in the return's STARS or EFDS Notes when requesting a return be deleted from STARS.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Destroy the notice or letter as classified waste, see IRM 21.5.1.4.10, Classified Waste.

      Exception:

      Do not classify waste the correspondence if a TC 290 for zero will be input to release the refund. (See instructions above.)

    • Ensure all IVO control bases are closed.

    3
    The taxpayer states they made an error on the return and may have provided the documentation to substantiate the amounts verified in the WOW process

    Note:

    The response may include a corrected/amended return or a Form 1040X.

    • If the return is not in STARS push the return to scheme, if necessary, complete the verification process.

    • Input notes in EFDS documenting the information provided.

    • Update the return in STARS to "AL" .

    • Adjust the account to the verified information see IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.

      Note:

      Input the adjustment as a source document (SD) and attach the correspondence to a screen print of the transmitted CC REQ54 and send to Files per local closed case procedures.

    • Send a Letter 105C or Letter 106C as appropriate to the taxpayer. See WOW Letters.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Ensure all IVO control bases are closed.

    4
    The taxpayer responds and has provided additional information but it is not verifiable in part or in whole ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Note:

    The response may include a corrected/amended return or a Form 1040X.

    • If the return is not in STARS push the return to scheme, if necessary, complete the verification process.

    • Input notes in EFDS documenting the information provided.

    • Update the return in STARS to "AL" .

    • Adjust the account accordingly (includes reversing withholding on statute imminent and statute barred tax periods) based on the verifiable information (per CC IRPTR or contact with the employer) see IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.

      Note:

      Input the adjustment as a SD and attach the correspondence to a screen print of the transmitted CC REQ54 and send to Files per local closed case procedures.

    • Send a Letter 105C or Letter 106C as appropriate to the taxpayer. See WOW Letters.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Ensure all IVO control bases are closed.

    5
    The taxpayer responds with a corrected/amended return or Form 1040X and includes claims for additional items/credits that do not appear on the original posted return
    • If the return is not in STARS push the return to scheme, if necessary, complete the verification process.

    • Input notes in EFDS documenting the information provided.

    • Update the return in STARS to "CAT 5 CL" .

    • If there is no identity theft marker (TC 971 AC 501 or TC 971 AC 506) for any tax period on CC ENMOD, route the amended return or Form 1040X and envelope to the Submission Processing (SP) Batching Function per Exhibit 3.10.72-11, Submission Processing Center Contacts (Batching Function). Edit the IVO stamp or "IVO REV" in the upper left margin of the return prior to sending to SP. If there is an identity theft marker (TC 971 AC 501 or TC 971 AC 506) for any tax period, fax the amended return or Form 1040X and envelope to the Image Control Team (ICT) using the RICS IVO AR Adjustment Request Form and include the verified income/withholding information on the routing form. Edit the IVO stamp or "IVO REV" and "IDT" in the upper left margin of the return prior to sending to ICT.

      Note:

      Do not send an unverifiable amended return or Form 1040X to SP or ICT. Treat as an unverified response.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Destroy the Notice CP 05A as classified waste, see IRM 21.5.1.4.10, Classified Waste.

    • Ensure all IVO control bases are closed.

    6
    The taxpayer states they made an error on the return (other than the CP05A proposal) and has provided the correct information and it is verifiable, but there is no corrected/amended return or a Form 1040X, Amended U.S. Individual Income Tax Return.
    • If the return is not in STARS push the return to scheme, if necessary, complete the verification process.

    • Input notes in EFDS documenting the information received.

    • Send an 89C letter to the taxpayer requesting a Form 1040X.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Destroy the notice or letter as classified waste, see IRM 21.5.1.4.10, Classified Waste.

    • Ensure all IVO control bases are closed.

Appeals (Letter 105C/106C Responses)

  1. The taxpayer may be responding to the Letter 105C, Claim Disallowed, or Letter 106C, Claim Partially Disallowed, with new or additional information or may be responding for the first time (the taxpayer may not have received the Notice CP 05A) to the account changes based on the Wage and Withholding (WOW) procedures. The response is to be treated as a new case using the guidelines in this IRM.

  2. If an open IDRS control base is present on the module to a specific employee (disregard generic control bases), contact the controlling employee prior to resolution to coordinate efforts in order to prevent erroneous or duplicate adjustments or actions. Refer to IDRS - Unit and USR Database, located on the SERP Home Page under the Who/Where tab to locate the employee.

  3. Follow the chart below for resolving Letter 105C/106C replies:

    If Then
    The taxpayer responds to the Letter 105C or Letter 106C.

    Note:

    Follow the instructions in this section if the taxpayer responds to the Notice CP 05A, but the account has already been reversed in the WOW process.

    • Follow IRM 21.5.3.4.6.2, Appeals and Responses to Letter 105C and 106C.

    • Input notes in EFDS documenting the information received.

    • If the original return verifies and the return is in STARS, update th return disposition to DL to have it removed from STARS. A reason must be entered in the return's STARS or EFDS Notes when requesting a return be deleted from STARS.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Ensure all IVO control bases are closed.

Statute Imminent / Statute Expired

  1. There may be instances when the taxpayer’s return data has been removed from the tax account and needs to be reinstated, however the assessment statute is imminent or barred.

  2. The Assessment Statute Expiration Date (ASED) is generally three years after the due date of the return or three years after the date the original return was actually filed, whichever is later. See IRM 25.6.1.6.5, Chart of Expedited Statute Processing, for additional information.

  3. Follow the instructions in the chart below to resolve the account:

    If Then
    1
    The statute is imminent (the ASED will expire within 90 days of today’s date)
    All assessments within 90 days of the expiration date must be routed to the Statute Function on a Form 2859, Request for Quick or Prompt Assessment, see IRM 25.23.2.5, Statute Protection, for additional guidance.
    2
    The statute is expired
    • Send Letter 105C/106C with the appropriate paragraphs. See WOW Letters, for paragraphs.

    • Input a TC 807 for the dollar amount of the withholding to be removed.

      Exception:

      DO NOT Adjust tax.

    • For a partial disallowance use blocking series 00 or 18 to associate the 106C letter. Ensure to use HC 4, if any of the refund is to be moved to excess. If money is to be moved to excess, monitor the module for the posting to excess and then release the remainder of the refund.

    • Input a second adjustment on the full disallowance, with a Transaction Code (TC) 290/.00 with Blocking Series (BS) 98/99, Source Code (SC) "0", HC "4", for the disallowance letter.

    • Close all IVO control bases.

    • Update WOW database as required.

    • If still open in STARS, close disposition "AL"

Manual Referrals / Rejects

  1. Returns that cannot be worked via the WOW Tool or have been referred to the WOW process from External Leads, will be assigned using a spreadsheet process and will be resolved following the chart below:

    Note:

    Research account for -O freeze. Do Not send disallowance during the disaster relief period. Do Not Disallow or Default accounts during the disaster relief period, unless agreed to by the taxpayer. See for disaster locations.

    If Then
    1
    The account has an open control to another function or has been resolved
    • Update Electronic Fraud Detection System (EFDS) return notes as appropriate.

    • If the return is in the Scheme Tracking and Referral System (STARS), update STARS to "CL" .

    • Notate the spreadsheet "Case resolved" .

    • Close all IVO control bases.

    2
    The account has an open control to Integrity & Verification Operation (IVO)
    • Take no action on the account on IDRS or in EFDS/STARS.

    • Notate the spreadsheet "Open Control to IVO" .

    • Close the WOW control base.

    3
    The return information can be verified per Command Code (CC) IRPTR data or information in Contact Employer (CE), see IRM 25.25.3 , Revenue Protection Verification Procedures for Individual Master File Returns
    • Update EFDS Return notes as appropriate.

    • "Re-file" the return in EFDS.

      Note:

      If the return is in STARS, update the disposition to "DL" to have the return deleted from STARS. A reason must be entered in the return's STARS or EFDS Notes when requesting a return be deleted from STARS.

    • Release the refund per IRM 25.25.2.4, Stopping / Releasing the Refund.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Close all IVO control bases.

    4
    The return information cannot be verified per CC IRPTR data or CE, see IRM 25.25.3, Revenue Protection Verification Procedures for Individual Master File Returns
    • If the return is not in STARS push the return to scheme.

    • Input notes in EFDS documenting the information provided.

    • Update the return in STARS to "AL" .

    • Adjust the account accordingly (includes statute imminent and statute barred tax periods) based on the verifiable information (per CC IRPTR, CE or contact with the employer) see IRM 21.5.3.4.6.1, Disallowance and Partial Disallowance Procedures.

      Note:

      Do not reverse any offsets.

    • Send a Letter 105C or Letter 106C as appropriate to the taxpayer. See WOW Letters.

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS).

    • Close all IVO control bases.

    5
    The account information indicates the taxpayer is claiming identity theft, such as notes in Accounts Management Services (AMS).
    • Disposition the return in EFDS/STARS per Exhibit 25.25.5-1 ,Triage Procedures.

    • Take no action on IDRS.

    • Close all IVO control bases.

Wage and Withholding Only (WOW) CP 05A Reject Codes

Accounts unable to be worked by the Wage and Withholding Only (WOW) tool will have one of the following reject codes associated with the case:

Code Definition
0001 Command Code (CC) TXMODA Failed
0002 SEQ # greater than 999
0010 Module Balance Not Credit
0011 Freeze code other than -R or P- on the Module
0012 Error Reading Adjusted Gross Income (AGI) or Taxable Income (TXI)
0013 Error Reading Number of Exemptions
0014 Transaction Code (TC) 150 Not Posted
0015 Error Reading Withholding (WH)
0016 TC 29X/30X other than Zero
0017 Unworkable TC 76X
0018 Pending TC 29X/30X
0019 Could not place Open Control in "B" Status
0020 CC REQ54 Failed
0021 Error Inputting Item Reference Number (IRN) to CC ADJ54
0022 Error Transmitting CC ADJ54
0023 CC TXMODA Failed after CC ADJ54
0024 Module Balance Incorrect after CC ADJ54
0025 CC IMFOLR Failed
0030 CC TXMODA Failed for CC TERUP
0031 No Adjustment Pending (AP) found on CC TXMODA for CC TERUP
0032 CC TERUP Failed
0040 CC LETER Failed
0041 Error Transmitting CC LPAGE
0050 Wage Mismatch
0051 WH Mismatch
0052 Credit Transaction on Account
0060 -A Freeze on Account
0061 -L Freeze on Account
0062 Unknown Filing Status
0070 CC REQ77 did not change to CC FRM77
0071 Error Populating CC FRM77 Screen
0072 CC FRM77 Transmit Failed
0118 Unreversed TC 971 AC 140 on Module
0119 Open Control on Module
0120 Error Reading Controls
0130 Tax Year older than 2009
0131 Credits of $500 or more
0132 Credits less than $500