25.25.13 Account Resolution for Integrity and Verification Operation (IVO)

Manual Transmittal

June 15, 2018

Purpose

(1) This transmits new IRM 25.25.13 Account Resolution for Integrity and Verification Operation (IVO)

Material Changes

(1) The IRM section was developed for processes not previously outlined in other IRMs.

Effect on Other Documents

None

Audience

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

Effective Date

(06-15-2018)

Denise D. Davis
Director, Return Integrity Operation (RIO)
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 reviewing individual master file (IMF) or business master file (BMF) returns for possible identity theft and false income and withholding. These returns are scored through the Dependent Database (DDb) or through the Return Review Program (RRP) system. These returns may not be able to be worked through systemic processes and will require manual resolution.

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

  3. Policy Owner: The Return Integrity and Compliance Services (RICS) is the policy owner of this program.

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

Background

  1. Return Integrity Operation (RIO) 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

    • Protecting taxpayer’s rights while protecting revenue

Program Management and Review

  1. The program has reports to track the inventory, including receipts and closures.

  2. A quality 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, Requirements for a statutory notice, including 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:

    For paragraph 2, instead of sending to Planning & Analysis Staff, send to DMOS Staff at *W&I EEF RICS HQ DMOS

Account Resolution Overview

  1. This IRM provides the procedures for the IVO function to make general adjustments through the Integrated Data Retrieval System (IDRS) to any one of the different Master File Tax Codes (MFTs). These procedures are available for use when an account adjustment must be made and there are no procedure(s) that cover the process in a specific Internal Revenue Manual (IRM).

  2. Adjustments may need to be made to accounts where the process has stopped/failed and the return has not been treated/completed. General adjustments are changes made on Individual Master File (IMF) and Business Master File (BMF) accounts. Adjustments may be required because of various work stream or referral processes such as:

    • WOW - accounts involving only wages and withholding (no refundable credits)

    • AQC - accounts with refundable credits requiring statutory notice of deficiency processing that protects the taxpayer’s right to petition tax court

    • TPP - Identity theft

    • FRP - Frivolous filings

    • Statute Imminent or Statute Expired with or without credits

    • Internal Transcripts

    • Taxpayer Correspondence

    • Forms 4442

    • Operational Assistance Requests (OARs)

    • STARS

Account Resolution Research

  1. Research the account to identify the point where the process stopped/failed:

    • Research IDRS for relevant IVO markers, transactions, letters issued and freeze conditions

    • Research EFDS/STARS notes and statuses

    • Research AMS notes for taxpayer contact or other relevant information

  2. Determine if the credit being held is from an identity theft return:
    If identity theft is determined, follow normal identity theft procedures per IRM 25.25.4, Integrity & Verification Identity Theft Return Procedures.
    If non identity theft continue below:

  3. Once the process that failed/stopped has been identified, follow the table below to resolve the account.

    Note:

    If the credit was not stopped by IVO, DO NOT Work the account, refer the account to the area that held the credit. Ensure all IVO markers are reversed, as appropriate, and any IVO controls are closed. Update AMS notes as appropriate.

    Note:

    If you are not trained in the workstream process (i.e. AQC/WOW/Exam), refer the case per IRM 25.25.13.5, Manual Referrals.

    If And Then
    1
    TC 971 AC 122, AC 140 or AC 128 with specific MISC field
    the refund is still held refer/work per AQC process, IRM 25.25.7, Automated Questionable Credit Program.
    2
    The refund has been held by IVO (CP 05A may have been issued to the taxpayer)
    there are no refundable credits refer/work per WOW process, IRM 25.25.11, Wage and Withholding Only (WOW) (Notice CP 05A) Procedures.
    3
    The refund has been held by IVO (CP 05A may have been issued to the taxpayer)
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ refer/work per AQC process, IRM 25.25.7, Automated Questionable Credit Program.
    4
    The refund has been held by IVO (CP 05A may have been issued to the taxpayer)
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ refer to exam
    5
    The refund has been held by IVO (CP 05A may have been issued to the taxpayer)
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ refer/work per AQC process, IRM 25.25.7, Automated Questionable Credit Program.
    6
    TC 720 posted to the account
    the refund is still held determine appropriate work stream and follow appropriate block above
    7
    TC 841 posted to the account
    the refund is still held determine appropriate work stream and follow appropriate block above
    8
    Unreversed TC 971 AC 121,124, 129 or a return is UP 126
    the refund is still held follow Taxpayer Protection Program (TPP) process, IRM 25.25.6, Taxpayer Protection Program.
    9
    Return is on MFT 32
    TC 971 AC 111 is present follow MFT 32 reversal procedures, IRM 25.25.6.7.1, MFT 32 Reversal Procedures.
    10
    Return is archived or deleted
    IVO archived or deleted the return follow IRM 25.25.6.8, Archived - Deleted Return Reprocessing Procedures.
    11
    STARS indication of selection to an IVO process with indicators such as TC 971 052/152
    the refund is held with a TC 971 134, TC 971 AC 199 or CCC 1 or CCC 3 and return is deemed false determine appropriate work stream and follow appropriate block above
    12
    STARS indication of selection to an IVO process with indicators such as TC 971 052/152
    the refund is held with a TC 971 134, TC 971 AC 199 or CCC 1 or CCC 3 and return is valid release the refund
    13
    BMF
    the refund was held by an IVO hold follow BMF procedures, IRM 25.25.1, Integrity and Verification Operation Business Master File Procedures.
    14
    There is a -A freeze
    there is no control to IVO return/reject to AM
    15
    There is a -A freeze
    there is an IVO control to 1487777777 work per IRM 25.25.13.5, Resolving Accounts Assigned To 1487777777

Previously Identified as Identity Theft

  1. Account research shows the account is not IDT - but was treated as IDT - Re-instate the return following normal adjustment procedures using the x-claim IAT tool. After reinstatement, follow the chart below to resolve the account or refer the return to the appropriate workstream.

    Note:

    If the ASED has expired follow IRM 25.25.13.8, Barred Assessments.

    If Then
    1
    Return verifies
    • Release the refund, follow IRM 25.25.2.4, Stopping/Releasing the Refund

    • Input notes in EFDS documenting the information received.

    • Update the disposition to" DL" to have the return removed from STARS.

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

    • Ensure all IVO control bases are closed.

    2
    Return doesn’t verify
    • Refer to the appropriate work stream as identified in IRM 25.25.13.3.

    • Input notes in EFDS documenting the information received.

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

Resolving Accounts Assigned To 14877XXXXXX

  1. Other functions assign cases to IVO for resolution.

    • The account is assigned to 1487755555, see IRM 25.25.13.5.1, Resolving Accounts Assigned To 1487755555.

    • The account is assigned to 1487766666, see IRM 25.25.13.5.2, Resolving Accounts Assigned To 1487766666.

    • The account is assigned to 1487777777, see IRM 25.25.13.5.3, Resolving Accounts Assigned To 1487777777.

Resolving Accounts Assigned To 1487755555

  1. This inventory is being reassigned to IVO by statute because IVO removed the return data and new information shows the return to be filed by the TIN owner. Cases assigned to this queue should have more than 120 days remaining on the ASED.

  2. Confirm that the original return was filed by the TIN owner.

  3. Determine how many days remain on the ASED. If there are less than 60 days remaining on the ASED follow prompt assessment procedures. See IRM 25.25.13.7, Prompt Assessments. If there are more than 60 days remaining on the ASED input the adjustment to correct the account back to the original return data.

Resolving Accounts Assigned To 1487766666

  1. This inventory is being reassigned to IVO by statute because IVO removed the return data and new information shows the return to be filed by the TIN owner. Cases assigned to this queue should have less than 120 days remaining on the ASED or the ASED has expired.

  2. Confirm that the original return was filed by the TIN owner.

  3. If the ASED has not expired, but has 60 days or less remaining, follow IRM 25.25.13.7, Prompt Assessments.

  4. If there are more than 60 days remaining on the ASED input the adjustment to correct the account back to the original return data.

  5. If the ASED has expired, follow IRM 25.25.13.8, Barred Assessments.

Resolving Accounts Assigned To 1487777777

  1. The IRM 25.23.4.10.2 ,TIN Related Problem Cases with Previous IVO Involvement, specifically states that the year involved with the case has to have prior IVO involvement. If there is no prior IVO involvement, the case should be rejected back to the originator.

    If And Then
    1
    The TC 976 income is verifiable or income is from Schedule C or HSH

    Exception:

    If the TC 150 was reversed and it is determined that it was backed out in error, see box 5 or 6 below.

     
    • Reject the case back to the originator.

    • Re-control the open control base to the originator with "REJECT2AM" in the activity field

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

    • Update STARS Category to "5" Disposition "CL"

    2
    The TC 976 is not verifiable
    the return is a true duplicate
    • Research the account to determine why the TC 150 did not go through appropriate treatment stream.

    • Input a TC 290 with a hold code 4 to remove the -A freeze. Work/refer to the appropriate treatment stream per IRM 25.25.13.4, Account Resolution Research

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

    3
    The TC 976 is not verifiable
    the return is not a true duplicate and either return was filed by the TIN owner
    • Reject the case back to the originator.

    • Re-control the open control base to the originator with "REJECT2AM" in the activity field

    • Input/Update AMS notes include which return IVO deemed IDT and which return was filed by the TIN owner, per IRM 21.2.2.4.5, Account Management Services (AMS)

    • Update STARS Category for returns in STARS to "5" Disposition "CL"

    .
    4
    The TC 976 is not verifiable
    the return is not a true duplicate and neither return was filed by the TIN owner
    • Update the control base activity to "IDTHEFT" and the category to "NCAT" .

    • Resolve the account per IRM 25.25.4, Integrity & Verification Identity Theft Return Procedures.

    5
    The TC 150 verifies, but was backed out in error
    the taxpayer’s original information must be restored and the ASED is still good Restore the taxpayer’s account to the original return data and release the refund as appropriate.
    6
    The TC 150 verifies, but was backed out in error
    the taxpayer’s original information must be restored and the ASED is expired Follow procedures in IRM 25.25.13.8, Barred Assessments.

Manual Referrals

  1. Manual referrals may not have all IVO markers, as the account was stopped somewhere in the process.

  2. A Manual Referral is a questionable or "bad" return that cannot be referred systemically through EFDS and/or meets one of the below criteria.

    Note:

    If the referral is an OAR, do not refer using the spreadsheet. Leave the control open and give the OAR to your TAS liaison to send as a "TAS referral" .

    Note:

    Returns where the Statute date has expired or if the statute date on the return is within one year and one month from expiring, place on the appropriate spreadsheet. It does not matter if the return would normally go to WI Exam or SBSE Exam. This tab is for all Statute returns or Statute returns with only one year and one month or less left on the ASED.

    • Withholding Only Work (WOW) - prior processing year returns with false or inflated withholding with no refundable credits.

    • WOW Statute Returns with NO Credits- prior processing year returns with false or inflated withholding with no refundable credits. and the ASED is within one year and one month or less from expiring or has already expired.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Exception:

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

    • SBSE Exam - Must have Schedule C E, F, or Form 2106 and/or can also have wages and withholding with credits. Schedule C returns with no credits- indicate on spreadsheet in comments column on the left. "SCH C NO CREDITS." (net profit) there are specific line items that Exam is looking for. Schedule C with refundable credits- must have schedule C, E, F or Form 2106.

    • AQC - GATT - Wages and Withholding will always be verified good. The taxpayer must be a full year prisoner. The return must claim Earned Income Credit (EIC) or Making work pay credit (MWP) or Recovery rebate Credit (RRC) or Additional Child Tax Credit (ACTC) claiming two or more children.

      Note:

      No returns should be referred during screening. See IRM 25.25.2.15, "Prisoner Returns" . Prior year only returns should be manually referred, all current year returns will follow systemic processes.

      Reminder:

      Re-file the return in EFDS; returns should not be placed in Scheme.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • AQC Statute Returns with credits - prior processing year returns with false or inflated withholding with refundable credits. and the ASED is within one year and one month or less from expiring or has already expired.

  3. Manual referrals, once identified, should be referred to the appropriate workstream based on the table in IRM 25.25.13.3. ,Account Resolution Research.

  4. General Rules to follow before referring:

    Note:

    DO NOT resubmit TINs you have previously submitted with in the last 60 days.

    • Do not refer any return that already has a -L freeze on TXMOD, or AMDISA is showing Exam Audit has been opened and the status is greater than 08.

    • Do not refer any returns with -A freezes. Follow IRM 25.25.13.4, Account Resolution Research

    • Do not refer through the manual process if you have zeroed out the return.

    • Do not refer return if it is true ID Theft. These must be worked by TEs.

    • Do not refer any return that can be sent systemically through EFDS

    • Do not refer any return that already is in AA (Accepted by AM) or AE (Accepted by Exam)

    • If the return is in Disposition ID Theft (status 49) you can still refer the return as long as the return being referred is the true taxpayer and is the TC 150.

    • All returns for all spreadsheets should be pushed into STARS. See exception for GATT returns.

    • All return dispositions in EFDS should be in E3 for WI Exam, E4 for SBSE Exam, E1 for WOW, or E2 for AQC.

    • Reverse any offsets on the account. Follow IRM 21.4.6.2, What Is a Refund Offset?, for offset types and restrictions.

    • All income documents in EFDS must be verified with notes in EFDS.

    • You must ensure all refunds have been stopped.

    • The 150 must be posted to CC TXMOD before sending through manual referral process.

  5. If the return originated in TPP, ensure the TC 971 AC 052 is present. If not present, release the refund, do not work or refer within IVO (AQC/WOW/EXAM).

  6. For accounts that did not originate in TPP, determine the reason for the refund hold and ensure the return is referred to the appropriate workstream.

  7. When manually referring accounts to the appropriate workstream, complete the manual referral spreadsheet found on the SharePoint site. Ensure the spreadsheet is completed.

    • Every field must be filled out. There should be NO BLANKS. All Yes and No answers must show as "YES" or "NO" .

      Exception:

      Column header "Exam Comments" , "To be filled out by receiver" , and "Date Sent" , should be left blank.

    • Fill out the column that says Site with your Site’s name.

    • Please input tax period in the following format: "201212" . It must have all six digits.

    • TINs must include hyphens

    • Do not alter the columns or tabs on the spreadsheet. For example, if you only have submissions for SBSE, do not delete the other spreadsheets.

    • Send the original spreadsheet to the POC, using the most current revision.

Prompt Assessments

  1. What is a Prompt Assessment?

    A Prompt Assessment is required when the TIN owners return, with a tax greater than zero, has been removed or was not assessed and the ASED has 60 days or less remaining before expiring.

    If Then
    the TIN owners return was backed out and needs to be re-instated
    • Adjust the account with a TC 290 for .00 and:

      Caution:

      Ensure the TC 290 amount is ALWAYS .00 when 60 days or less are remaining on the ASED.


      Include item/credit reference numbers to reflect the correct amount of exemptions, AGI, TXI, SET, etc.
      Adjust credits, such as EITC or ACTC etc.
      Use a Hold Code 4 to prevent a notice and refund from generating and input a priority code 8.

    • Complete Form 2859, Request for Quick or Prompt Assessment.

    • Input TC 971 AC 506 "WI PRP OTHER1" and reverse any prior TC 971 AC 506. If TC 971 AC 505 is present and there is a good address reverse and replace with "WI AM OTHER" .

    • Assemble the Assessment package. See the IVO portal for detailed instructions.

    • Route the package to accounting function.

    • Monitor the account for the adjustment to post.

      Caution:

      If the adjustment does not post before the ASED expires, there could be a barred assessment.

    • Once all actions are posted close all IVO controls.

Barred Assessments

  1. What is a Barred Assessment?

    A Barred Assessment occurs when the TIN owners return with a tax greater than zero has been removed or was not assessed and the ASED has expired. Follow the table below to correct the account.

    If Then
    1
    For barred assessments of ≡ ≡ ≡ ≡ ≡ or more
    • Adjust the account with a TC 290 for .00 and:
      Include item/credit reference numbers to reflect the correct amount of exemptions, AGI, TXI, SET, etc.
      Adjust credits, such as EITC or ACTC etc.
      Use a Hold Code 4 to prevent a notice and refund from generating and input a priority code 8.

    • Issue a manual refund to the taxpayer, including applicable interest, for the amount of overpayment (refund) that the taxpayer is entitled to. See IRM 21.4.4.2, What Is a Manual Refund?

    • Prepare Form 9355, The Barred Statute Report, per IRM 25.25.13.7.1, Form 9355, The Barred Statute Report

    • Prepare a Form 8758, Excess Collection File Addition, to move any remaining credit ( the amount of the tax that cannot be assessed) to Excess (6800 Account). See IRM 3.17.220.2.2.1, Preparation of Form 8758

    • Input TC 971 AC 296

    • Open a monitoring control, "M" status, with activity "ADJ2POST", and category "MISC", to track the Form 8758 submission to Excess Collection.

    • If the return is in STARS, update the disposition to "DL" to have the return deleted from STARS. Add STARS note: "Account backed out as IDT in error. Adjustment reversed. Barred assessment"

    • Input/Update AMS notes per IRM 21.2.2.4.5, Account Management Services (AMS): "Account backed out as IDT in error. Adjustment reversed. Barred assessment"

    • Prepare the Statute and Accounting packets

      Note:

      See Barred Assessment Guide on the IVO Portal for more detailed information.

    • Monitor the account for all actions to be completed.

    • Close all IVO control bases after all account actions are complete.

    2
    For barred assessments of less than ≡ ≡ ≡ ≡
    • Input a TC 971 AC 090 on CC TXMOD to identify the under tolerance erroneous abatement.

    • Adjust the account with a TC 290 for .00 and:
      Include item/credit reference numbers to reflect the correct amount of exemptions, AGI, TXI, SET, etc.
      Adjust credits, such as EITC or ACTC etc.
      Use a Hold Code 4 to prevent a notice and refund from generating and input a priority code 8.

    • Issue a manual refund to the taxpayer, including applicable interest, for the amount of overpayment (refund) that the taxpayer is entitled to. See IRM 21.4.4.2, What Is a Manual Refund?

    • Prepare a Form 8758, Excess Collection File Addition, to move any remaining credit ( the amount of the tax that cannot be assessed) to Excess (6800 Account). See IRM 3.17.220.2.2.1, Preparation of Form 8758.

    • Open a monitoring control in "M" status, with activity "ADJ2POST", and category "MISC", to track the Form 8758 submission to Excess Collection.

    • If the return is in STARS, update the disposition to "DL" to have the return deleted from STARS. Add STARS note: "TC 150 was good TP’s return, treated as bad in error."

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

    • Monitor the account for the posting of the Excess transaction.

    • Close all IVO control bases after all account actions are completed.

Form 9355, The Barred Statute Report

  1. The Barred Statute Report, Form 9355, will be prepared and assembled by the organization responsible for the loss of the assessment or the function /organization responsible for the lack of appropriate action, that allowed the tax assessment period to expire without a valid tax assessment being made.

  2. The area responsible for the barred assessment will prepare the Form 9355, as appropriate, for their function, and forward to the Accounts Management (AM) Statute Function.

  3. Prior to forwarding the Form 9355 to the AM Statute Function, IVO Management will take the following actions:

    1. IVO creates a folder (case file) on the shared drive in the “Form 9355 Package” folder for the case using the last 4 digits of the TIN and the first 4 letters of the last name.

    2. IVO will prepare the Form 9355 and download to the folder.

    3. IVO will download or scan any supporting documents (CC TXMODA) and include in the folder

    4. When the case file is complete, IVO will move the case file to the “Ready for Manager” folder and notify the manager via email to sign the Form 9355.

    5. The manager will sign the Form 9355 and move the case file to the “Ready for Department Manager” folder and notify the Department Manager via email to sign the Form 9355.

    6. The Department Manager will sign the Form 9355 and move the case file to the “Ready for Operation Manager” signature folder and notify the Operation Manager via email to sign the Form 9355.

    7. The Operation Manager will sign the Form 9355 and move the case file to the “Ready for DMOS Review” folder and notify DMOS via email that the package is ready for review and the Director’s signature.

    8. DMOS will review the package for completeness and move the case file to the Ready for Director” signature folder and notify the Director via e-mail that the Form 9355 package is ready for signature.

    9. Once the Director signs the Form 9355, DMOS will move the case file into the “Routing to Statute” folder and will notify IVO the package is ready for routing to Statute.

    10. IVO will print the entire package and route to Statute. IVO will move the case file to the “Completed FY 2018” folder.

Erroneous Abatement Procedures for IVO

  1. There may be instances when the taxpayer’s return data has been removed from the tax account due to a clerical error and needs to be reinstated. A clerical error occurs when multiple returns are filed and the taxpayer’s valid return data is removed from the account in a batch process, however the assessment statute is barred. Most of the accounts will be handled as Barred Assessments See IRM 25.25.13.8, Barred Assessments.

    Example:

    The batch tool backed out the valid return data due to the IDT DLN in STARS being a different DLN than the TC 150, resulting in the good return being backed out.

    See IRM 25.6.1.10.2, Erroneous Abatement, and follow the chart below to resolve the account:

    Caution:

    Before working any account as a clerical error, see your lead to ensure it meets clerical error criteria.

    If Then
    1
    For erroneous tax abatements of any amount where the ASED has not expired
    Adjust the account back to the original return data and release the refund as appropriate.
    2
    For erroneous tax abatements over ≡ ≡ ≡ ≡ ≡ and the ASED has expired
    • Adjust the account with a TC 290 for .00 and:
      Include item/credit reference numbers to reflect the correct amount of exemptions, AGI, TXI, SET, etc.
      Adjust credits, such as EITC or ACTC etc.
      Use a Hold Code 4 to prevent a notice and refund from generating and input a priority code 8.

    • Issue a manual refund to the taxpayer, including applicable interest, for the amount of overpayment (refund) that the taxpayer is entitled to. See IRM 21.4.4.2, What Is a Manual Refund?

    • Prepare a Form 8758, Excess Collection File Addition, to move any remaining credit ( the amount of the tax that cannot be assessed) to Excess (6800 Account). See IRM 3.17.220.2.2.1, Preparation of Form 8758.

    • Open a monitoring control, with activity "87582EXCES", and category "MISC", to track the Form 8758 submission to Excess Collection.

    Follow IRM 25.6.1.10.2.2.3, Correction of Erroneous Abatement Cases by the Originating Function.
    • If the return is in STARS, update the disposition to "DL" to have the return deleted from STARS. Add STARS note: "TC 150 return was good TP’s return, IDT batch tool backed out the incorrect DLN, issue meets clerical error criteria."

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

    • Monitor the account for the posting of the Excess transaction.

    • Close all IVO control bases after all actions are completed.

    3
    For erroneous tax abatement of ≡ ≡ ≡ or less and the ASED has expired
    • Input a TC 971 AC 090 on CC TXMOD to identify the under tolerance erroneous abatement.

    • Adjust the account with a TC 290 for .00 and:
      Include item/credit reference numbers to reflect the correct amount of exemptions, AGI, TXI, SET, etc.
      Adjust credits, such as EITC or ACTC etc.
      Use a Hold Code 4 to prevent a notice and refund from generating and input a priority code 8.

    • Issue a manual refund to the taxpayer, including applicable interest, for the amount of overpayment (refund) that the taxpayer is entitled to. See IRM 21.4.4.2, What Is a Manual Refund?

    • Prepare a Form 8758, Excess Collection File Addition, to move any remaining credit ( the amount of the tax that cannot be assessed) to Excess (6800 Account). See IRM 3.17.220.2.2.1, Preparation of Form 8758

    • Open a monitoring control, with activity "87582EXCES", and category "MISC", to track the Form 8758 submission to Excess Collection.

    • If the return is in STARS, update the disposition to "DL" to have the return deleted from STARS. Add STARS note: "TC 150 return was good TP’s return, IDT batch tool backed out the incorrect DLN, issue meets clerical error criteria"

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

    • Monitor the account for the posting of the Excess transaction.

    • Close all IVO control bases after all actions are completed.

Releasing the Refund

  1. If the determination is made that a refund that has been stopped by IVO can be released, input a TC 290 for .00 or a TC 571 to release the refund as indicated below:

    Reminder:

    Analyze the account for manual refund criteria per IRM 21.4.4.2, What Is a Manual Refund? and credit elect requirements per IRM 21.4.6.5.6, Credit Elect.

    Note:

    Before releasing a refund analyze IDRS using CC TXMODA to determine that another area will not be impacted. If the TC 150 has not yet posted on Master File, and a TC 971 AC 134 is present, input a TC 972 AC 134 to release the refund instead of the TC 290 for .00.

    • A computer condition code "1" or "3" - input a TC 290 for .00

    • CC NOREF (sets a P- freeze) - input a TC 290 for .00

    • A TC 971 AC 199 or a manually input TC 971 AC 134 - input a TC 571

  2. If the refund is released and the return is in the Scheme Tracking and Referral System (STARS), update the return disposition to "DL" to be deleted from STARS. Input a note in STARS explaining the reason for the scheme deletion request per IRM 25.25.13-1, STARS Delete Reasons.

STARS Delete Reasons

STARS Delete Reason Standard Note
1
MFT 32 reversal
"non id theft"
2
IDT deemed non IDT and income/withholding verified
"TP authenticated and income/withholding verified"
3
WOW/AQC process substantiated information
"Income/withholding/credits verified by documentation"
4
Not full year prisoner - not GATT
"Not full year prisoner"
5
Income/withholding verified
"Verifies per IRPTR or Verifies per SSA_ORS Database as applicable."