3.0.230  Lockbox Processing Procedures

Manual Transmittal

November 06, 2015


(1) This transmits revised IRM 3.0.230, General - Lockbox Processing Procedures.

Material Changes

(1) IRM - Added Form 940X Amended Employer’s Annual Federal Unemployment Tax Return to Lockbox Site Processable IRS Forms

(2) IRM - Added HQ IRM Deviation Statement to General Instructions

(3) IRM - Updated Accounting and Tax Payment Branch, Lockbox Policy and Oversight responsibilities

(4) IRM - Added Fiscal Service IRS Lockbox Program Office

(5) IRM - Added Fiscal Service IRS Lockbox Program Office & IRS Lockbox Policy and Oversight

(6) IRM - Added Accounting and Tax Payment Branch, Lockbox Policy and Oversight

(7) IRM - Removed obsolete Payment Tracers instructions

(8) IRM - Removed exceptions to Unidentified Large Checks procedures

(9) IRM - Modify Form 1040X Return Sort Review to a daily sample review

(10) IRM - IPU 15U0201 - Changed the Lockbox Site random sample size from eight to twelve envelopes

(11) IRM 3.0.230 - 5 Update Acronyms

(12) IRM - Update Terminology

(13) Editorial and Formatting changes have been made throughout this IRM

Effect on Other Documents

IRM 3.0.230 dated October 31, 2014 (effective January 1, 2015) is superseded. This IRM incorporates Interim Procedural update 15U0201 dated 1/29/2015. See IRM, Effect on Other Documents.


All Submission Processing Campuses (SPC), Lockbox Policy and Oversight Analysts, Fiscal Service, Government Accountability Office (GAO), and Treasury Inspector General for Tax Administration (TIGTA).

Effective Date


Paul J. Mamo
Director, Submission Processing
Wage and Investment Division  (01-01-2014)

  1. This IRM gives the procedures for a uniform method of documenting, reviewing, classifying, and reporting procedural changes under the jurisdiction of the Accounting and Tax Payment Branch (ATP).

  2. It provides the monitoring and evaluation methods used by all management levels in the IRS in conjunction with Fiscal Service to oversee and evaluate the Lockbox Sites.

  3. It describes how management in the Submission Processing Campuses (SPC) should handle a Lockbox processing / procedural change after being approved by ATP Headquarters.  (01-01-2009)

  1. This IRM provides Processing Internal Control directives and general procedures for tax payments / returns received at the Submission Processing Campus (SPC) from the Lockbox Sites.

  2. The Fiscal Service, a bureau of the United States Department of Treasury, acquires Lockbox collection services for the IRS. The IRS Lockbox network consists of commercial Lockbox Sites designated by Fiscal Service to process federal tax payments.

  3. Lockbox Sites, regardless of their Business Master File (BMF) or Individual Master File (IMF) designation, are expected to process all payments (BMF and IMF) considered processable.  (01-01-2016)
Lockbox Site Processable IRS Forms

  1. All Lockbox Sites will process payments received with designated IRS forms. Specific procedures and policies are provided to the Lockbox Sites via the Lockbox Processing Guidelines (LPG). Lockbox Sites must provide the necessary services (personnel, facilities, equipment, and materials) to process the payments received with these forms and follow the instructions for returns to be forwarded to the SPC they service. The processable IRS forms are as follows:

    • Form 433–D, Direct Debit Installment Agreement

    • Form 940, Employer's Annual Federal Unemployment Tax Return / Payment Voucher, also Form 940, when the Amended box has been checked

    • Form 940X, Amended Employer's Annual Federal Unemployment Tax Return

    • Form 940PR, Employer's Annual Federal Unemployment Tax Return, Puerto Rico*

    • Form 941, Employer's Quarterly Federal Tax Return / Payment Voucher

    • Form 941PR, Employer's Quarterly Federal Tax Return, Puerto Rico*

    • Form 941SS, Employer's Quarterly Federal Tax Return, American Samoa, Guam, the Commonwealth of the Northern Marianas Islands, and the U.S. Virgin Islands*

    • Form 943, Employer's Annual Tax Return for Agricultural Employees / Payment Voucher

    • Form 943PR, Employer's Annual Tax Return for Agricultural Employees, Puerto Rico*

    • Form 944, Employer's Annual Tax Return / Payment Voucher

    • Form 945, Annual Return of Withheld Federal Income Tax / Payment Voucher

    • Form 941X, Adjusted Employer's Quarterly Federal Tax Return or claim for refund

    • Form 943X, Adjusted Employer's Annual Tax Return for Agricultural Employees or claim for refund

    • Form 944X, Adjusted Employer's Annual Tax Return or claim for refund

    • Form 945X, Adjusted Annual Return of Withheld Federal Income Tax or claim for refund

    • Form 1040, Form 1040A, and Form 1040EZ, U.S. Individual Income Tax Return / Payment Voucher

    • Form 1040ES, Estimated Tax Payment Voucher

    • Form 1040NR, U.S. Nonresident Alien Income Tax Return**

    • Form 1040PR, U.S. Self-employment Tax Return for Puerto Rico**

    • Form 1040SS, U.S. Self-employment Tax Return for the Virgin Islands / American Samoa, Puerto Rico / Guam / Commonwealth of the Northern Marianas Islands**

    • Form 1040X, Amended U.S. Individual Income Tax Return

    • Form 1041ES, Estimated Tax Payment Voucher***

    • Form 14039 Identity Theft Affidavit

    • Form 2290, Heavy Highway Vehicle Use Tax Return / Payment Voucher***

    • Form 4868, Application for Automatic Extension of Time to file U.S. Individual Income Tax Return / Payment Voucher

    • Form 8453, U.S. Individual Income Tax Declaration for Electronic Filing

    • Form 8879, IRS e-file Signature Authorization

    • Form 8892, Payment of Gift / GST Tax and / or Application for Extension of Time to File Form 709

    • Form 9465, Installment Agreement Request

    • CP 14H, CP 501H, CP 503H, and CP 523H, Affordable Care Act (ACA) Notices

    • CP 14, CP 501, CP 503, and CP 504, Balance Due Notices

    • CP 521, CP 621, CP 523, and CP 623, Installment Agreement Notices

    • Letter 2850, Installment Confirmation Letter (ICS)

    • Letter 3856 and Letter 3856A, Manually Monitored Installment Agreement (MMIA) Letter / Payment Voucher**

    *Ogden SPC only
    **Austin SPC only
    ***Cincinnati SPC only  (01-01-2011)

  1. The provisions prescribed are limited to Processing Internal Control directives and procedures in this IRM, the Lockbox Processing Guidelines (LPG) and the Lockbox Security Guidelines (LSG). All SPC functional areas will use this IRM to process and handle work performed by each Lockbox Site. The LPG will be used for all Lockbox payment processing systems and the LSG will be used for all Security Requirements by each Lockbox Site.

  2. The following IRMs and Documents are resources for Lockbox Field Coordinators (LFC):

    • LPG - Lockbox Processing Guidelines

    • LSG - Lockbox Security Guidelines

    • IRM 10.2.11 - Basic Security Concepts

    • IRM 3.24.133 - Residual Remittance Processing System

    • IRM 3.0.167 - Losses and Shortages

    • IRM 3.8.44 - Campus Deposit Activity

    • IRM 3.8.45- Manual Deposit Process

    • IRM 3.10.72- Receiving, Extracting, and Sorting

    • IRM 3.10.73 - Batching and Numbering

    • IRM 25.8.1 - OFP Codes Overview

    • IRM 21.5 - Account Resolution  (01-01-2016)
General Instructions

  1. The IRS, Fiscal Service and Lockbox Sites have established a contract to deposit Federal tax payments expeditiously by:

    1. Processing the vouchers and payments and crediting the amount to the United States Treasury's deposit account.

    2. Electronically providing data associated with these payments to the IRS for posting to the taxpayers' accounts.

    3. Forwarding unprocessable items to the IRS SPC.

    4. Sending the "Daily Mail-Out Package" to the SPC. The Lockbox Document Transmittal (LDT) will list the contents of each day's work being shipped to each assigned SPC.

  2. Taxpayers are instructed to send their IMF or BMF tax payments for various forms to Post Office boxes related to a Lockbox Site.

  3. States are being realigned based on the SPC Consolidation plans. The approved realignment for the 2016 filing season is shown on Exhibit 3.0.230–1.

  4. Changes and recommendations to be incorporated into the January revision of this IRM must be received at Headquarters no later than the preceding June 30 for consideration.

  5. IRM deviations must be submitted in writing following instructions from IRM, Internal Management Document System - Internal Revenue Manual (IRM) Process, IRM Standards, and elevated through appropriate channels for executive approval.  (01-01-2012)
Lockbox Financial Agents

  1. Commercial banks are chosen through a process initiated by the IRS and directed by Fiscal Service to serve as Lockbox Financial Agents for the IRS.

  2. Lockbox Policy and Oversight Section (LPO) provides the procedures and policies to be followed in conjunction with Fiscal Service.

  3. Lockbox Sites are required to follow the instructions for processing payments and all other instructions included in the LPG.

  4. Lockbox Sites are required to follow the instructions for Physical, Personnel, Courier and Information Technology (IT) security and all other instructions included in the LSG.

  5. Lockbox Sites are required to follow the software program specifications within the Lockbox Functional Specification Package (FSP).  (01-01-2014)
Security Standards for Data Protection (Physical / Unauthorized Disclosure)

  1. The Lockbox Site will provide adequate security, equipment, and facilities to safeguard all remittances received, processed, stored, transmitted, and shipped to the SPC as follows:

    1. All Lockbox security requirements related to the physical premises, personnel, courier, vendor, and information technology will be followed as specified in the LSG.

    2. An IRS Official Disclosure Statement and a Fiscal Service Non-Disclosure Agreement Sensitive but Unclassified (SBU) information form must be signed for all Lockbox positions, to ensure protection of sensitive tax data (SBU) and to prevent disclosure of taxpayer personally identifiable Information (PII) to unauthorized individuals or entities, even if such disclosure is unintentional. Courier employees must sign an Official Courier's Additional Non-Disclosure Statement (IRS).

    3. All new Lockbox employees must complete a Privacy Awareness orientation and all returning or permanent Lockbox employees must attend annual Privacy Awareness refresher training. Documentation of the completion and attendance of the Privacy Awareness initial and refresher training will be maintained in the Lockbox employee personnel file.

    4. Deposits, consisting of paper remittances, must be packaged in one of the following manners:
      1. Cardboard boxes with heat strapping which can be sealed with an identification number / tag.
      2. Secure in locked metal or plastic boxes with an identification number / tag.

    5. The Lockbox Site is liable for any Financial Agent (FA) settled loss or shortage of funds received and not properly credited to the IRS. (This applies only if the loss or shortage occurs while the remittance is in the Lockbox Site's possession and when they are bank of first deposit.)

    6. All Lockbox Sites are subject to reviews, including unannounced, to ensure all procedures outlined in the LPG and LSG are followed.

  2. Prompt reporting of incidents involving unauthorized disclosure of SBU or PII data, whether willful/intentional or inadvertent/unintentional, and missing taxpayer remittance or sensitive data is critical. The Lockbox sites will follow all Incident Reporting procedures and provide full cooperation with TIGTA, IRS, and Fiscal Service in the investigation and resolution of all incidents. The LFC will ensure the Lockbox Site has followed all reporting procedures.

    1. Inadvertent (unintentional) unauthorized disclosures: report within one hour of discovery to Computer Security Incident Response Center (CSIRC) / Situation Awareness Management Center (SAMC), Fiscal Service Program Office, Lockbox Program Office, Director and Deputy Director of Submission Processing, and LFC.

    2. Willful (intentional) unauthorized disclosures and Unauthorized Access (UNAX) : upon discovery, report immediately to TIGTA, Lockbox Program Office, Fiscal Service Program Office, Director and Deputy Director of Submission Processing and LFC.

    3. Missing remittances: upon discovery, report immediately to TIGTA, Lockbox Program Office, Fiscal Service Program Office, Director and Deputy Director of Submission Processing and LFC. The LFC will notify the campus Remittance Security Coordinator (RSC).  (01-01-2016)
Accounting and Tax Payment Branch, Lockbox Policy and Oversight (LPO) Section - Responsibilities

  1. The following sections cover the roles and responsibilities of Fiscal Service IRS Lockbox Program Office and IRS Lockbox Policy and Oversight (LPO)Section ensuring a successful Lockbox program.

  2. The mission of the Lockbox Network is to accurately process taxpayer remittances and accelerate the deposit of funds to the Treasury while maintaining the security and confidentiality of taxpayer information. While both agencies work closely together and share responsibility for the administration and oversight of the IRS Lockbox Program each agency is primarily responsible for distinct duties.  (01-01-2016)
Fiscal Service IRS Lockbox Program Office

  1. Fiscal Service IRS Lockbox Program Office primary responsibilities include but are not limited to the following elements:

    A. Perform Financial Agent (FA) oversight

    1. Implement a Financial Agent Selection Process (FASP) when designating Financial Agents (FAs)

    2. Negotiate and execute one or more Financial Agent Agreements (FAA) when designating FAs

    3. Compensate FAs for all IRS Lockbox operation expenses subject to reimbursement by the IRS

    B. Implement Lockbox processing requirements

    1. Act as a liaison between the IRS and the Lockbox sites to ensure they comply with the requirements established by the IRS

    2. Implement changes to the Treasury Financial Manual (TFM) as necessary

    3. Confirm the Bank Policy and Oversight (BPO) monthly account analysis. BPO enters expenses into the Bank Management System. Fiscal Service is responsible to review expenses, resolve exceptions, alert the programs and obtain their approval if necessary on any issues

    4. Analyze compensation requests submitted by the FAs

    5. Support and assist in resolving issues regarding IRS Lockbox deposits by the Lockbox sites

    6. Respond to any matters from internal and external stakeholders pertaining to the IRS Lockbox program

    7. Collaborate with IRS to review and approve waivers as documented

    C. Perform Audit and Internal Control reviews

    1. Collaborate with Fiscal Service Physical Security and IRS to conduct Security Reviews and approve IRS Lockbox site certification(s)

    2. Conduct Pre and Post Peak analysis of each Lockbox sites operations and performance

    3. Review and validate Filing Season Readiness (FSR) packages and other documentation supplied by the FAs to ensure preparedness for estimated peaks

    4. Collaborate with IRS to determine the Minimum Daily Processing Capacity (MDPC) and PCD for each Lockbox site. In addition, prepare workload requirement, MDPC and PCD letters for distribution to the FAs

    5. Provide oversight and guidance with direction from IRS regarding PO Box addresses provided by the FAs. Additionally, work in concert with IRS Program Office to instruct the FAs on when to open and close PO Box addresses

    6. Conduct training sessions for Fiscal Service headquarters staff to provide guidance and ensure consistency in oversight of peak coverage

    7. Collaborate with IRS, to review LPG and LSG annually to ensure updates comments and recommendations have been incorporated

    8. Ensure and verify that Lockbox sites receive projected processing volumes, updated LPG, LSG and FSP for peak periods

    9. Assume a leadership role in semi-annual Lockbox meetings and discussions with IRS and Lockbox sites as well as the designation of scheduling and organizing post peak reviews

    D. Provide Lockbox Program Office (LPO) oversight

    1. Participate with IRS to develop specific quality improvement and internal control programs

    2. Provide physical oversight during the April Peak processing periods, and conduct unannounced reviews during other periods

    3. Manage the Lockbox sites including reviewing and analyzing production, daily status and incident reports

    4. Assist IRS Lockbox Analysts on an as-needed basis, with review of documentation and or files during oversight

    5. Collaborate with IRS to conduct an analysis of April Peak performance to include but not limited to the following: dollars received, items processed, incident reports, staffing trends, operating status (e.g., Operating as Expected (OAE)), MDPC and PCD completion data collected

    6. Collaborate with IRS to conduct post peak lessons learned sessions with each Lockbox site to review their performance

    7. Support the (SOI) Analyst(s) with reviewing production reports for inconsistencies

    8. Ensure the Fiscal Service Program Manager is available 24 hours/day to receive Situation Awareness Management Center (SAMC) calls and provide guidance and a headquarters reporting mechanism to the Analyst on site

    9. Collaborate with IRS to distribute and complete analysis of quarterly report cards for each Lockbox site as it relates to scorecard performance

    10. Conduct monthly meetings with the Lockbox sites and IRS to review performance and discuss processing issues

    11. Collaborate with the IRS and Program Office to develop and timely implement corrective action plans that respond to all audits, and to ensure that implemented actions are appropriately validated

    12. Negotiate basic, standard and ancillary pricing with the Lockbox sites. Assist the IRS in their provision of timely reimbursement through Intra-Governmental Payment and Collection (IPAC) by performing the following duties:

    • Prepare invoices for submission to the IRS to recover expenses associated with non-standard services

    • Prepare and submit an IPAC worksheet to the Account Analysis Team Leader for review and approval

    • File IPAC worksheets with Account Analysis Team records

    E. Provide Lockbox sites Continuity of Operations (COOP) Services

    1. Coordinate with the IRS to ensure that the Lockbox sites have the appropriate COOP plans

    2. Review each Lockbox site contingency, Occupational Emergency Plan (OEP) and Functional Specification Package (FSP) plans to ensure the safeguarding and proper transition of the work in the event of an emergency as well as in support of daily operations during any other time

    F. Provide integration between the Lockbox sites and Electronic Check Processing (ECP)

    1. Ensure ECP has the appropriate updates and documentation to support ECP failover to Image Cash Letter (ICL)

    2. Ensure the Lockbox sites perform annual contingency failover testing


    Fiscal Service IRS Lockbox Program Office develops and prepares all correspondence and documentation and ensures that all information is distributed to the Lockbox sites as required  (01-01-2016)
Fiscal Service IRS Lockbox Program Office & IRS Lockbox Policy and Oversight (LPO) Section

  1. Fiscal Service and IRS are collectively responsible for the following administrative and oversight responsibilities:

    1. Establish IRS Lockbox Program goals and objectives

    2. Conduct strategic program planning and risk management activities

    3. Participate in Lockbox site management status meetings

    4. Conduct Post-peak meetings with each Lockbox site

    5. Conduct analysis and assessment of each Lockbox sites peak workload performance

    6. Make recommendations for process improvements and reports and resolves significant issues of concern with Fiscal Service

    7. Review, evaluate and respond to recommendations for process and system improvements

    8. Plan, manage and coordinate activities to implement Lockbox site program process and system changes

    9. Plan, manage and coordinate activities to support IRS Lockbox Network structural and/or organizational changes (e.g., Lockbox site openings and closures)

    10. Develop and administrate Lockbox Inter-Agency Agreement (IAA): IRS and Fiscal Service partner to negotiate basic, standard and ancillary pricing with the Lockbox sites  (01-01-2016)
Accounting and Tax Payment (ATP) Branch, Lockbox Policy and Oversight (LPO) Section

  1. The LPO Section of the ATP Branch is primarily responsible for the development of system, security, internal control, processing and reporting requirements in accordance with tax legislation and IRS policy. In addition, the LPO team has primary responsibility for ensuring the accurate processing of remittances to taxpayers’ accounts. To effectively administrate the IRS Lockbox program, the IRS LPO team maintains the necessary liaisons with IRS support organizations and Subject Matter Experts (SMEs).

  2. The LPO team develops and maintains IRS Lockbox Network requirements in accordance with tax legislation and IRS Policy. Provide a process to collect feedback on all required documents and conducts discussion sessions with Fiscal Service and IRS SMEs as needed or requested. LPO maintains the following governing documents and supporting activities:

    A. Lockbox Processing Guidelines (LPG) processing and administrative requirements and Lockbox Security Guidelines (LSG) physical, personnel, courier, remittance and Information Technology (IT) security requirements

    1. Develop and revise the Lockbox sites processing procedures and security procedures with appropriate SMEs

    2. Coordinate LPG procedural changes with all stakeholders

    3. Organize a forum for all IRS Lockbox Analysts to participate in annual review of the LPG with Fiscal Service

    4. Organize a forum for all IRS Lockbox Analysts to participate in an annual review of the LSG with Fiscal Service, AWSS. HCO and IT

    5. Track and address all issues, suggestions and comments reported during previous filing season

    6. Track, coordinate and ensure accurate and timely responses to waiver and change requests associated with the LPG and LSG

    7. Issue Alerts and Lockbox Electronic Bulletins (LEBs) to provide updates as necessary throughout the year

    8. Provide annual revision drafts of the LPG and the LSG with a “Nature of Changes” and host monthly meetings with Fiscal Service, SMEs and Lockbox sites for document review and comments

    9. Provide final documents via a LEB to all users including Fiscal Service and Lockbox sites in time for changes to be implemented

    B. IRM 3.0.230, Lockbox Processing Procedures

    1. Provide an annual update with necessary changes to ensure procedures are consistent with LPG and LSG guidance

    2. Issue Alerts and updates as necessary

    C. Manage the Lockbox sites Functional Specification Package (FSP) and Lockbox Electronic Network (LEN) file transmission requirements

    1. Coordinate with IRS Information Technology (IT) to develop the Lockbox FSP software requirements and ensure consistency between Lockbox software specification and IRS internal software specifications

    2. In collaboration with Fiscal Service, coordinate with each Lockbox site to ensure adequate understanding of the software requirements. Ensure the FSP and new programs are implemented within the required timeframes

    3. Coordinate with IRS Enterprise Systems Testing (EST) Division to ensure the Lockbox sites software is tested and acceptable for production prior to issuing the annual software certification

    4. Coordinate with IRS IT and the Lockbox sites to resolve software production problems

    5. Monitor and coordinate the LEN transmissions of Remittance Processing System (RPS), Remittance Transaction Research (RTR) and Redesign Revenue Accounting Control System (RRACS) taxpayer data files from the Lockbox sites to the ECC-MTB drop box for accuracy and timeliness

    6. Coordinate re-transmission of files with IT EOPS (Enterprise Operations), Enterprise Computing Center (ECC) and the Lockbox site upon non-receipt or corrupt RPS, RTR or RRACS files

    7. Issue information Alerts to ECC scheduling, Chief Financial Office (CFO) and SPC Accounting when the Lockbox sites are working and transmitting RPS files on non-business days (weekends or holidays)

    8. Coordinate with EOPS; File Transfer Section to request new Axway accounts or close accounts that are no longer required for secure data file transfers

    9. Coordinate with IT on end-of-year (EOY) procedures and issue a LEB with detailed instructions for each day, including the date the new code will be implemented

    D. Annual Lockbox Filing Season Readiness (FSR) Plan Activities

    1. Provide voucher specifications to software developers, ensure adequate testing of vouchers

    2. Collaborate with Fiscal Service and the Lockbox sites to ensure the Post Office Box addresses by form type are correct

    3. Manage and update Lockbox site Post Office Box addresses to ensure IRS.gov website is accurate

    4. Coordinate address changes with IRS IT and Media and Publications to ensure correct Lockbox site addresses are incorporated in the mail-out tax packages and documents

    5. Complete Lockbox voucher coordination and testing (preparer software vendors and internal IRS vendors)

    6. Collaborate with IRS IT to ensure timely and adequate Systems Acceptability Testing (SAT) and timely software certification of the Lockbox sites

    7. Collaborate with Fiscal Service to determine and obtain management approval of workload distribution for each Lockbox site based on each sites capacity and performance

    8. Based on IRS research projections calculate the Program Completion Date (PCD) for each Lockbox site, based on expected volume of work

    9. Provide Fiscal Service each lockbox sites April peak workload requirements and associated PCD for formal issuance to each FA in the PCD letter

    10. Update all Data Collection Instrument (DCI) to accurately reflect new requirements and/or changes in the LPG and LSG

    11. Develop, coordinate and submit a Unified Work Request (UWR) with annual FSP updates and requirement changes

    12. Coordinate with the Local Security Administrators (LSA) in each SPC and each Lockbox Site to ensure access to OTCnet for users

    E. Ensure each Lockbox sites readiness for filing season by preparation and coordination of the following:

    1. Conduct Filing Season Readiness (FSR) meetings with the Lockbox sites and SPCs

    2. Update the Lockbox sites FSR Review Plan requirements to reflect needed changes on an annual basis

    3. Distribute the FSR Review Plan requirements via official Lockbox Electronic Alert to each Lockbox site with established timeframes for completion

    4. Conduct an analysis of the FSR plans to ensure all processing requirements are addressed

    5. Coordinate with each Lockbox site any required changes, concerns, or issues for resolution prior to the start of the new calendar year

    6. Conduct pre-peak and post-peak meetings with each Lockbox site and the respective SPC

    F. Provide Lockbox SME support to respond to inquiries and facilitate the resolution of all Lockbox site issues

    1. Provide dedicated SME (one point of contact) support to each SPC and each Lockbox site to ensure timely and appropriate resolution of all production, processing and internal control issues

    2. Communicate information regarding lockbox deliverables and services to appropriate SPC personnel

    3. Provide SPC review feedback to Lockbox site management

    4. As needed, coordinate resolution of identified issues with Fiscal Service, IRS internal functions and each Lockbox site

    5. Respond to Congressional, General Accounting Office (GAO) and Treasury Inspector General for Tax Administration (TIGTA) memoranda and reports

    6. Respond to IRS inquiries from internal and external stakeholders as needed

    G. Manage and maintain each Lockbox sites performance measure program

    1. Collaborate with IRS Research Division Statistics of Income (SOI), Fiscal Service and IRS Cyber-security and Agency Shared Wide Services (AWSS) Physical Security staff to develop and perform Performance Measure reviews for Cyber-Security, Courier, Personnel and Physical Security

    2. With the assistance of applicable SMEs, develop new DCIs for on-site reviews and SPC reviews as new work is issued into the Lockbox Program

    3. Provide timely review feedback to Lockbox site management and monitor needed corrective actions as applicable

    4. Ensure timely receipt and analyzes SPC DCI data and supporting documentation to ensure accuracy of review results before submission to SOI. Identify revisions for SPC review improvement and as needed provide SPC feedback and training

    5. Compile and analyze data from Performance Measure on-site DCI reviews and SPC DCI reviews to monitor and assess the quality of Lockbox processing

    6. Prepare and submit the Lockbox SPC DCI to the IRS, Statistics of Income (SOI) by the 15th of every month

    7. Prepare and submit the Processing Internal Control (PIC) and Procedural DCIs to SOI by the 15th of the month following all peak and non-peak visits to Lockbox sites

    8. Provides SPC Performance Measure review oversight and provide guidance and training, as necessary, to ensure quality of SPC reviews

    H. Develops and maintains management tools

    1. Update the Daily Deposit Production/Office of the Assistant Secretary (OFAS) Report to incorporate new work in the Lockbox program

    2. Prepare a weekly production report

    3. Prepare the monthly Financial Facts (Fin-Facts) report

    4. Prepare various workload management reports during the IMF and BMF Peak processing periods

    I. Conduct continuous monitoring and review of Lockbox Network reports and deliverables to ensure compliance, identify and address emerging risk and needed improvement

    1. Monitor on a daily basis productivity and inventories using the Daily Deposit Production/OFAS Report submitted by each Lockbox site and the Lockbox Daily Deposit Cycle Report

    2. Monitor on a daily basis LEN transmissions of files from the Lockbox sites to the ECC-MTB drop box to ensure accuracy and timeliness

    3. Monitor on a daily basis all critical and non-critical incident reports

    4. Monitor and manage all security issues to ensure adequate and timely Lockbox site resolution

    5. Monitor and manage all Security POAM (Plan of Action and Milestones) issues/findings to ensure adequate and timely Lockbox site response and necessary corrective action(s

    6. Monitor and manage all Internal Control Opportunities for Improvement (OFIs) to ensure adequate and timely Lockbox site response and necessary corrective action(s)

    7. Monitor and manage all GAO Matter for Further Considerations (MFCs) and recommendations to ensure adequate and timely Lockbox site response and necessary corrective action(s)

    8. Collaborate with TIGTA, Office of Investigation, the SPC Remittance Security Coordinator and Fiscal Service to monitor receipt losses and ensure taxpayer's accounts receive timely reimbursement due to theft or loss

  3. The LPO team conducts reviews of each Lockbox site to ensure quality of services, compliance with Lockbox requirements, internal control effectiveness and to identify and address areas of emerging risks.

    A. Submission Processing Campus (SPC) Performance Measure Reviews:

    1. Review and analyze results collected from daily SPC reviews of Lockbox work

    2. Ensure review results are accurate for use in the calculation of each Lockbox sites quarterly Performance Measure score card

    B. Lockbox Onsite Performance Measure Reviews:

    1. During major IMF and BMF peaks, conduct onsite Internal Control, Processing, Procedural, Administrative and Processing Internal Control (PIC) performance measure reviews of each Lockbox site

    2. Conduct reviews during mini-peaks as need. Ensure review results are accurate for use in the calculation of each Lockbox sites quarterly performance measure score card

    C. Physical/Courier and Personnel Security Reviews:

    1. With IRS, AWSS and Fiscal Service Physical Security Specialists conduct annual on site physical, personnel and courier security reviews of each Lockbox site to ensure compliance with requirements and identify and report areas of potential risk

    2. Assists with physical and courier review if needed, primarily responsible for personnel security review

    3. Prepares and provides written review results to Fiscal Service Physical Security staff for incorporation into each Lockbox site’s security review report

    D. Cybersecurity Onsite Reviews:

    1. With IRS Cybersecurity Specialists conduct annual onsite review of each Lockbox site to ensure site compliance to LSG Cybersecurity requirements and identify and report areas of potential risk

    2. Prepare and provide written review results to Cybersecurity specialists for incorporation into Lockbox site’s Plan of Action Milestone (POAM) document and security review report

    3. Submit finalized review report to Fiscal Service IRS Program Office staff for issuance to the FA

    E. Unannounced Internal Control Onsite Reviews:

    1. Conduct annual onsite internal control reviews to evaluate the efficiency and effectiveness of each Lockbox site’s internal control structure

    2. Prepares Opportunity for Improvement (OFI) POAM reports of non-compliance, areas of needed improvement and risk and provides report to Fiscal Service IRS Program Management staff for issuance to the Financial Agent

    F. Major IMF/BMF Peak Processing Program Reviews:

    1. For all operating shifts, conduct performance measure reviews and internal control reviews to ensure compliance to procedures and assess each Lockbox site’s internal control over financial reporting

    2. Provide oversight to ensure effective management of workload inventories and deliverables and identify and quickly address areas of risk and/or needed improvement

  4. The LPO Team will support Lockbox Continuity of Operations:

    1. Collaborate with Fiscal Service to develop and implement a Continuity of Operation Plan (COOP)

    2. Collaborate with Fiscal Service, Lockbox sites and SPC to coordinate testing of COOP

    3. Provides 24/7 primary contacts to the Computer Security Incident Response Center/Situation Awareness and Management Center (CSIRC/SAMC) process. Update CSIRC/SAMC when contacts change

    4. Provide field support to the contingency sites when a COOP is needed

  5. The LPO Team will support Fiscal Service in the Financial Agent (FA) selection process:

    1. Support Fiscal Service by providing IRS policy and workload requirements

    2. Participate in all planning sessions with Fiscal Service

    3. Assist in preparing a timeline of activities that will meet the schedule of all parties involved

    4. Provide concurrence with all documents prior to the release to Lockbox Network

    5. Provide concurrence on changes to the Financial Agent Agreement (FAA) prior to issuance  (01-01-2012)
Mandatory Lockbox Review Travel

  1. Following is a chart designating Mandatory Review travel by Lockbox Field Coordinator Analysts. It lists the peak dates and type of payment with form number to be processed by the Lockbox Sites.

    APRIL PEAK April 15 - 1040, 1040ES, 4868 processing
    UNANNOUNCED Review - dates to be determined by LFC and LPO.
    JANUARY PEAK January 31 - 94X processing
    UNANNOUNCED Review - dates to be determined by LFC and LPO.  (01-01-2009)
Declaring IMF Program Completion Date (PCD), BMF Peak Completion (PC) and Peak Sweep

  1. IMF Lockbox Sites receive a PCD from IRS in which to complete receipts received during IMF April peak.

  2. BMF Lockbox Sites are required to be on a 24-hour deposit schedule (January peak only) before Peak Completion (PC) is declared.

  3. IRS in conjunction with Fiscal Service (if available) must complete a sweep of the facility before PCD / PC is declared. Refer to LPG for specifics.

  4. The LFC will declare when PCD/PC has been met after the sweep. If no LFC is present, an on-site IRS representative will declare when PCD / PC has been met.  (01-01-2014)
Bogus or Questionable Remittances

  1. Lockbox Sites may receive bogus remittances that resemble checks and money orders. They follow the procedures outlined in the LPG.

  2. Lockbox Sites will place bogus remittance in envelope and annotate "Potential Bogus Remittance" and place envelope in the Unprocessable with Remittance package to be sent to the SPC.  (01-01-2009)
Areas of Impact

  1. Submission Processing functional areas impacted by Lockbox Sites are Receipt and Control, Error Resolution, Unpostables, Accounting, Submission Processing Improvement Team and Notice Review; Information Technology (IT), Accounts Management, and Field Compliance may also be impacted by Lockbox processing.  (01-01-2012)
Accounts Management Operations

  1. Customer service representatives must alert management of unusual taxpayer complaints regarding Lockbox processing.

  2. Report any potential theft/embezzlement to the TIGTA Office of Investigations and the Remittance Security Coordinator (RSC) found on the Submission Processing website under Campus Security.

  3. Follow all procedures outlined in IRM, Altered and/or Stolen Taxpayer Payments.  (01-01-2009)
Encoding Errors

  1. Accounting Operations corrects Lockbox encoding errors and reports the errors each month to the LFC. Refer to IRM 3.17.10, Dishonored Check File (DCF) and Unidentified Remittance File (URF).

  2. The LFC provides Statistics of Income (SOI) a consolidated monthly report of Lockbox encoding errors and Lockbox reviews performed by the SPC.  (01-01-2016)
Payment Tracers

  1. A payment tracer case is generated when a taxpayer inquires about a payment which has not been credited to his account. The taxpayer usually has received an erroneous notice.

  2. Accounts Management and Field Compliance are responsible for the preliminary processing of payment tracer requests. Instructions for processing these requests are contained in IRM 21.5.7, Payment Tracers.

  3. If preliminary research does not result in locating the payment, the case will be forwarded to the Hardcore Payment Tracer Unit.  (01-01-2009)
Balancing and Control Function

  1. The Balancing Unit will receive a copy of the journal package prepared by the Revenue Accounting Control System (RACS) Unit.

  2. The deposit amount from the Lockbox Deposit Ticket is added to the deposit amount from the regular RPS Deposit Recap RPS 03-42.

    • This amount should agree with the totals on Service Center Control File (SCCF) 11-43, RPS IMF Control Date Recap / Master Control Records

  3. Contact the LFC if there is a discrepancy between the totals attributable to Lockbox.  (01-01-2009)
Correspondence (General)

  1. Written correspondence received at the Lockbox from taxpayers, or representatives is forwarded daily to Receipt and Control. Receipt and Control follows their IRM 3.10.72, Receiving, Extracting, and Sorting, to deliver this work to be processed through the normal pipeline. Refer to IRM 21.3.3, Incoming and Outgoing Correspondence/Letters, for additional information.  (01-01-2011)
Remittance Transaction Research (RTR) System

  1. The RTR system is a researchable database containing remittance processing data and images from Lockbox Sites, Integrated Submission Remittance Processing (ISRP), and Remittance Strategy for Paper Check Conversion (RS-PCC). All Operations in Submission Processing and Accounts Management should refer to IRM 3.5.10, Remittance Transaction Research (RTR) System, for specific instructions on using this system.  (01-01-2013)
Error Resolution System (ERS)

  1. Images of processed documents will be available for research on the RTR system. Documents are identifiable as scannable and non-scannable by the file location codes.

  2. Transactions that fail the generalized mainframe (GMF) math error, consistency and validity checks are generated for correction to ERS.

  3. Instructions for resolving these errors are contained in IRM 3.12.10, Revenue Receipts.

  4. Notify the LFC if there is a significant increase in ERS volume relating to Lockbox processing.

  5. Remittances that are received at the lockbox site and do not contain all processing information (Taxpayer Identification Number (TIN), Name Control, Tax Year or Tax Type (MFT) are forced to Error Resolution for correction and research. Instructions for handling and processing of these documents are contained in Error Resolution IRM 3.12.10, Revenue Receipts.  (01-01-2009)

  1. Lockbox transactions are processed and matched against IMF and BMF data on the Master File.

  2. Transactions that fail to match master file validity and consistency checks will generate a list to the Unpostable Unit for corrective action.

  3. Instructions to correct unpostable conditions are in IRM 3.12.179, IMF Unpostable Resolution, IRM 3.12.279, BMF/CAWR/PMF Unpostable Resolution, IRM 3.13.122, Individual Master File (IMF) Entity Control Unpostables, and IRM 3.13.222, BMF Entity Control Unpostable Correction Procedures.

  4. Unusually large volumes of errors in certain unpostable category codes may indicate a need for additional training and / or revisions to LPG and / or IRMs. The Unpostable Unit must notify the LFC when volumes are above average.  (01-01-2014)
Notice Review

  1. The Notice Review process ensures the information received from taxpayers is complete and correct, and no taxpayers receive an erroneous refund.

  2. The Notice Review function will receive IMF, BMF, and Integrated Data Retrieval System (IDRS) Computer Paragraph (CP) Notices. These notices may be selected for review by Notice Review Processing System or IDRS Review Notice Register.

  3. Notices are generated to taxpayers when adjustments have been made to their account(s).

  4. Instructions for researching Lockbox payments is included in IRM 3.14.1, IMF Notice Review and IRM 3.14.2, Business Master File (BMF) Notice Review.

  5. Unusually large volumes of errors resulting in notices may indicate a need for additional training and / or revisions to Lockbox Processing Guidelines. Notify the LFC when the volumes are above average.

  6. The file location code in the DLN of the audit trail will be the indicator of Lockbox processing. See Exhibit 3.0.230-3.  (01-01-2010)
Information Technology (IT)

  1. This section contains instruction for Lockbox Electronic Network (LEN) RPS File Transmission.  (01-01-2011)
Lockbox Electronic Network (LEN) RPS File Transmission

  1. Lockbox RPS0103, RPS0505, RPS0523, and RPS9701 files will be transmitted daily via the LEN.

  2. These files will be received at a ECC-MTB drop box where they will be picked up at the top of every hour and sent to either ECC-MTB (Austin and Ogden) or ECC-MEM (Cincinnati, Fresno, Kansas City).

  3. Each center may establish print requirements for any of the RPS files.

  4. In the event the LEN will be unavailable for an extended period of time and the Lockbox Site cannot transmit its RPS files electronically, the LEN coordinator will open a KISAM ticket and coordinate any necessary re-transmissions.  (01-01-2010)
Quality Review / Improvement Team

  1. The Improvement Team assists the LFC in ensuring the Quality Standards listed in the LPG are maintained. The assistance is to be provided through in-house program, process, Lockbox Service Center, and Deposit Error Rate (DER) reviews. When errors are identified the Improvement Team will take the necessary corrective actions to the taxpayers accounts.

  2. Instructions on the use of DCI and the Review Process are included in IRM, Submission Processing Campus Quality Review of Lockbox. Contact the LFC if you have any questions regarding the reviews and use of DCIs.

  3. The Improvement Team ensures the work being processed by the Lockbox Sites is within IRS standards. The reviewers will examine critical processing elements which could cause a work stoppage, and make recommendations for improvement if processing guidelines are not accurate. Refer to IRM, Lockbox Processing Procedures, Quality Review of Lockbox and IRM 3.0.275, Business Results Measures for Submission Processing Functions.  (01-01-2010)
Reporting Requirements

  1. Lockbox Sites are required to report total dollars and items deposited via the Daily Deposit Production / OFAS Report to Headquarters.


    The word daily means any day Lockbox Sites are working including Saturday, Sunday and holidays.

  2. Deposits made on Monday, Tuesday, Wednesday and Thursday must be reported to Headquarters by the following day.


    Tuesday's deposit will be reported Wednesday morning; Wednesday's deposit reported Thursday morning, etc.


    Remittances for Friday, Saturday, Sunday and holidays must be deposited the next business day.  (01-01-2009)
Daily Deposit Cycle Report

  1. IRS management uses the Daily Deposit Cycle Report (DDCR) to monitor the deposit activities and cash management practices.

  2. The DDCR is also used to monitor the Lockbox deposits made on a daily basis to ensure Lockbox policies and processing guidelines are being followed.  (01-01-2009)
Embezzlement / Theft

  1. The Submission Processing Directors will NOT be held accountable for any theft / loss that occurs at the Lockbox Site. (Credit can not be issued from Accounts 7610, 7620, or 7650.) The LPG states that the Lockbox is liable for funds received and not properly credited to the IRS.

  2. When an IRS employee or manager identifies or suspects a revenue receipt shortage, they should immediately contact TIGTA and follow the instructions in IRM 3.0.167, Losses and Shortages.

  3. The Lockbox Site is required to ensure adequate controls exist to minimize or prevent instances of theft or loss due to embezzlement or employee negligence.

  4. The Lockbox Site will immediately notify, TIGTA, Fiscal Service Program Office, IRS Lockbox Program Office, CSIRC, the Director and Deputy Director, Submission Processing, LFC, and the local Remittance Security Coordinator within one hour of the discovery of a missing remittance or taxpayer PII.

  5. Lockbox Site management will obtain a statement from the employee who discovers the theft / loss. The report will contain the following:

    1. Date the loss / shortage occurred or discovered.

    2. The amount of the loss / shortage.

    3. The type of tax or fund in which loss / shortage occurred.

    4. The circumstances involved with the loss / shortage.

    5. The involved employee's signature, position, title, and the date the statement is prepared.  (01-01-2013)
Remittance Security Coordinator (RSC)

  1. Each SPC has selected a member of the Planning and Analysis Staff as the RSC.

  2. If the LFC is notified that a Lockbox theft has occurred, then the coordinator must notify the RSC. The RSC is the individual responsible for centralized control, coordination and protection of taxpayers for potential embezzlement / theft cases. Refer to IRM 3.0.167, Losses and Shortages.

  3. The RSC will coordinate the theft / shortages with TIGTA, Submission Processing Director, Headquarters Losses and Shortages Analyst, Receipt Loss Coordinator, LFC, and Hard-core Payment Tracer Unit.


    Report any potential embezzlement / theft(s) to the Treasury Inspector General for Tax Administration (TIGTA) Office of Investigations at 1–800–366–4484 (TIGTA Hotline Information) and the local Remittance Security Coordinator listed on the Submission Processing Website under Campus Security http://win.web.irs.gov/SP/Security_Info_&_Internal_Control/Remittance_Security_Coordinators.htm.

  4. SPC and Field Offices are to report any potential embezzlements / thefts immediately to the RSC so the RSC can ensure taxpayers are protected from adverse action while the case is investigated.

  5. Advise the respective SPC LFC when the potential loss may involve a Lockbox Site.  (01-01-2011)
Lockbox Tax Remittance Losses

  1. Any remittance stolen, altered or embezzled during the Lockbox tax payment process may occur under the following conditions:

    • Endorsed and made payable to someone other than the IRS

    • Embezzlement, misappropriation or other criminal acts

    • Lockbox employee negligence

    • Deposit discrepancies (encoding errors)

    • Deposit loss in transit

    • Theft (remittance stolen to obtain taxpayer identity and / or cash)

  2. LFCs will receive available information and documentation regarding the theft / shortage of tax collection from TIGTA and / or the RSC.

  3. The LFC will then report the theft / shortages of any tax collection received at the Lockbox System for IRS if reimbursement from the Lockbox Site is being requested. Use the Lockbox Remittance Theft Report. See Exhibit 3.0.230-4.

  4. Fax a copy of this report and required documentation (copy of altered check and information verifying perpetrator was connected to the Lockbox Site, if known) to the LPO Analyst.

  5. Coordinate resolution of the Lockbox cases with LPO analyst on a case-by-case basis.

  6. When notified, the LPO analyst is required to:

    1. Notify Fiscal Service.

    2. Verify TIGTA has been informed.

    3. Prepare a request-for-reimbursement letter to include taxpayer's name, TIN, dollar amount, taxpayer's SPC location, telephone number, a copy of the front and back of the check and a copy of the TIGTA preliminary report to Fiscal Service within 30 days.

    4. Set up a control file and prepare a quarterly theft report for submission to Fiscal Service.

  7. If, after one year no evidence is discovered which implicates an employee of the Lockbox Site in the theft, embezzlement, or subsequent negotiation, the LFC will:

    1. Request a manual refund for the Lockbox Site on Form 3753, Manual Refund Posting Voucher.

    2. Send Form 3753 to Accounting Operations for approval and processing. See IRM 21.4.4, Manual Refunds (this is the primary IRM for manual refunds initiators) and IRM 3.17.79, Accounting Refund Transactions (this is the primary IRM for Submission Processing), for additional information on the issuance of the manual refund.

  8. If the Lockbox Site has been reimbursed as described above, and it is subsequently determined that the Lockbox Site was responsible for the misappropriation:

    1. Lockbox Policy & Oversight Staff will notify Fiscal Service to request repayment from the Lockbox.

    2. Repayment will be made to the General Fund, General Miscellaneous Receipts, Account 2320 with a SF–215 (Deposit Credit Voucher) annotated "FOR DEPOSIT TO GENERAL MISCELLANEOUS RECEIPTS, ACCOUNT 20-3220 LOCKBOX REIMBURSEMENT" in the Agency Use comments section.  (01-01-2010)
Lockbox Reimbursement Policy

  1. IRS will initiate a reimbursement process when there is a significant impact to taxpayers or the government resulting from:

    • Internal control deficiency

    • Processing error(s)

  2. The SPC will notify the LFC of the incident.

  3. The LFC will notify LPO Section and provide information of its potential impact.

  4. The LPO will approve recovery / rework program code 85380 for SPC use.

  5. The LFC will monitor the use of program code 85380.

  6. The LFC will advise the Lockbox Site of the situation and request an Incident Report be prepared to document the situation. In addition, the Lockbox Site will research the cause of the problem and develop a method to avoid the situation in the future.

  7. The LFC will submit a quarterly report to the LPO section outlining program code 85380 volume and hours.

  8. LPO and Fiscal Service will determine disposition of reimbursement. If the recommendation is reimbursement, Fiscal Service will initiate recovery of funds from the Lockbox Site.  (01-01-2013)
Lockbox Daily Mail-Out Package

  1. The Lockbox Site will forward daily, via courier, all work processed during the current day's activity. Lockbox Document Transmittal (LDT) will list the contents of the mail-out package, and will be addressed to specific functional areas. The document contents will include:

    1. All unprocessed with remittance and non-remittance work. (Remittances must be packaged separately.)

    2. All returns sorted and volume processed by sort type

    3. LFC Package (if shown on Lockbox Document Transmittal - LDT)

    4. Address change cards or Forms 8822 (IRS Change of Address) and photocopies of CP 521 and CP 523 vouchers with address changes

    5. Incompletes Envelope (route to Error Resolution) following local procedures for your SPC

    6. Form 14039, Identity Theft Affidavit (if shown on LDT)

  2. After one year, destroy Lockbox Document Transmittal (LDT)  (01-01-2015)
Receipt and Control Operations

  1. Receipt and Control Operations is the central point for receipt of the mail-out package from the Lockbox. An employee from Receipt and Control or other designated personnel is responsible for ensuring the mail is received and all Lockbox work is distributed to the SPC functional areas.

  2. Mail received will be opened daily. A review of the mail-out package is performed daily upon receipt by an employee in Shipping and Receiving or Receipt and Control Operations.

  3. The mail-out package must be received no later than 12:00 p.m. daily in shipping containers. Contact the LFC if any items are missing from the containers, a mismatch of volumes given, or if the shipment is received after 12:00 p.m.

  4. The LPG specifies packaging / distribution / reporting instructions. Contact the LFC for specific instructions if necessary.

  5. Maintain the daily LDT in a file for the LFCs to review.  (01-01-2016)
Unidentified Large Checks

  1. Submission Processing Campus (SPC) will provide additional research on unprocessable checks of $5,000 or greater for the Lockbox Sites.

    1. Lockbox Sites will fax their requests for research to the contacts agreed upon by the SPC and LFC.

    2. Within four hours of receipt of the request, the SPC will research IDRS for the missing information and provide a response to the Lockbox Site.

    3. If the missing information cannot be supplied to the Site, the Lockbox Site will forward the remittance to the SPC along with the fax as instructed in the LPG.  (01-01-2013)
Lockbox Field Coordinator's Package

  1. The LFC package shall contain the following:

    • Daily Deposit Production / OFAS report*

    • Monthly review reports

    • Lockbox Daily Deposit Cycle Report*

    * If requested by the LFC.

  2. The Lockbox Daily Deposit Cycle Report is available on the Control D Website after the reports have been run daily by the computing centers.  (01-01-2001)
Submission Processing Campus Quality Review of Lockbox

  1. Reviews were established to ensure IRS Lockbox Sites' work meets the standards in the LPG. Each review examines a critical element that could cause a work stoppage if processing is not accurate. It is imperative the reviews are completed daily. They will be used to assess the overall performance of each Lockbox Site.


    SPCs with multiple Lockbox Sites are required to perform daily reviews of work received from each Lockbox Site.

  2. Each review is associated with a Data Collection Instrument (DCI) created in Microsoft Excel. Collective data from all reviews will be combined with the Processing Internal Control (PIC) and procedural DCIs to produce a monthly report. General and specific guidelines for the review process and use of DCIs can be found in the sections below.  (01-01-2010)
General Guidelines

  1. The DCIs reflect the work to be sampled, sample size, error descriptions, and other review information. Read both the instruction and the DCI carefully before beginning.

  2. Document all pertinent comments relating to charged errors in the "Other" columns. Write them in the comments area on the DCI or on the main comment sheet.


    Ensure corrective action is taken on the taxpayer's account when an error is identified during the Service Center Review.

  3. Forward completed DCIs to the LFC no later than the third working day of the following month. The LFC will maintain these reports for the length of the contract. The contract period is for five years with up to two one year extensions.  (01-01-2015)
Mail-out Package Review

  1. A review of the mail-out package must be performed daily upon receipt of the package by an employee in Shipping and Receiving or Receipt and Control. The mail-out package must contain the following items:

    • All unprocessed work is sorted into two categories: Unprocessables with remittances and Unprocessables with no remittances

    • DER Package

    • All returns sorted and the number of volume processed by sort type

    • LFC package (if shown on LDT)

    • Form 4868 Review Package ( if shown on LDT)

    • Form 14039, Identity Theft Affidavit (if shown on LDT)

    • Change of Address Forms (Form 8822) and/or any taxpayer notes indicating an address change

    • Incomplete Envelope


      The Lockbox site should not be penalized if acts of nature delay delivery of the package. If this happens, mark the package as timely received. Notate in the comments column "An act of nature delayed delivery" .

    • In the column entitled "Package contents" answer "complete" if all of the required items were included in the package, answer "incomplete" if any of the required items were missing

    • In the column entitled "Received timely" , answer "Yes" if the mail-out package was received on time and answer "No" if it was not

    • In the column entitled "Lockbox Document Transmittal correct " , answer "Yes" if the LDT was correct and answer "No" if it was not

  2. Forward the DCI to the LFC no later than third working day of the following month.  (01-01-2015)
SPC Receipt and Control / Cashiers Receiving Area LDT Instructions

  1. Verify LDT Date. The LDT should list the contents of the lockbox mail out package(s). Instructions for acknowledgement of the LDT are contained in the IRM, Lockbox Mail and IRM, Lockbox Receipts.

  2. Non-Remit Packages – Verify receipt of the following:

    1. Lockbox Field Coordinator (LFC) package, if listed verify the package or number of packages listed is received.

    2. Form 14039, Identity Theft Affidavit, if listed verify that the Form 14039 package is received.

    3. DER Review package, if listed verify that the DER package is received.

    4. Form 4868 Review Package, if listed verify that the Form 4868 Review package is received.

    5. Incompletes Envelope, if listed verify that the Incomplete Envelope is received and route to Error Resolution following local procedures.

  3. With Remit Unprocessable - These items will be boxed separately and received in tamper proof bags. Verify receipt of the following in the secure/restricted area. Ensure that all items are performed:

    1. Bag is sealed and not opened, sliced, torn or any other manipulation that would question the integrity of the bag(s).

    2. Alpha/numeric digits printed on the bag(s) matches the alpha/numeric digits annotated in" Remarks" box of the LDT. CAUTION: The alpha/numeric MUST match and cannot be transposed.

    3. Initial in the "Received Column" on Page 1 of the LDT beside the category of "Tamper Proof Bag".


      It is not necessary to manually count the enclosed checks contained in each labeled bundle. However, contact your Lockbox Field Coordinator (LFC) immediately if the bag is not sealed, alpha/numeric entries don’t match, or there appears to be an obvious error in the volume of checks (e.g., header/cover sheets states the volume to be 20 checks and there are 5).

  4. Verify that the number of boxes received agrees with the Total BOX Count on Page 1, initial if correct or notate discrepancy and CONTACT the LFC IMMEDIATELY!

  5. Initial the Acknowledgement page in the appropriate fields, whether all is correct, or you had to notify the LFC of any discrepancy.

  6. Sign and Date at the bottom of the page. If multiple areas are responsible for verifying the package contents, both signatures must be at the bottom of the LDT.

  7. Fax a copy of the signed Acknowledgement (Page 1) back to the bank daily, no later than (NTL) 2:00 p.m. local campus time. Refer to IRM, Facsimile Transmission of Tax Information, for additional information.


    If multiple areas receive and verify the work (e.g., Extraction, Batching, and Cashiers), establish a system to ensure all Acknowledgement pages are faxed to the bank daily.

  8. If any discrepancies are found on the Lockbox Document Transmittal notify your LFC IMMEDIATELY via telephone and e-mail.

  9. SPC receiving area(s) is to keep copies of all Lockbox Document Transmittals for a 1 year period. These documents are to be maintained in chronological order and available for review upon request. See IRM, Lockbox Mail.  (01-01-2010)
Monthly Reports Review

  1. Each month the Lockbox Site is required to send the monthly reports to the LFC by the 5th business day of the following month. The reports are as follows:

    • Form 9535, Record of Lockbox Discovered Remittance and Correspondence- Cash Log

    • Form 9535, Record of Lockbox Discovered Remittance and Correspondence - Candling Log

    • Managerial Reviews: Candling, Shreds, and Desk Checks/Work Areas


    Some Lockbox Sites combine the reports listed above, i.e., the Candling and Candling Review Log may be combined on one report.

  2. The LFC will record the receipt of these reports, as well as the timeliness of each. The LFC will review the logs for completeness, i.e., do the log entries indicate all reviews were performed and recorded per the LPG requirements? Yes or No If "NO" is answered, please provide specific details in the "comments" section outlining any errors.


    In peak months, LFC should review these items using the PIC as instructed. The Service Center review will be altered to only review what was not reviewed on the PIC review. This alternative way to review will ensure that the items are not double reviewed and that errors will not be counted twice. For IMF sites, if you have already reviewed all of the April logs, leave this DCI blank.  (01-01-2011)
Daily Deposit Reports Review

  1. Lockbox Sites are required to validate and reconcile reports which show the volume of items processed and dollars deposited daily to IRS, Fiscal Service, and OFAS.

  2. The reports are as follows:

    • RTR Report(s)

    • OCR Lockbox Daily Deposit Cycle Report

    • Daily Deposit Production / OFAS Report

  3. A 100 percent review of the RTR report data, OCR Lockbox Daily Deposit Cycle Report, Daily Deposit Production / OFAS report to ensure all reports balance to each other, reporting the same volume and amount deposited. Additionally, RTR and the OCR Lockbox Daily Deposit Cycle Report volumes and amounts should balance for each received date reflected on the report. The review will be performed by the LFC.

  4. Each column requires a "Yes" or "No" will be recorded in the appropriate column when a report does not balance with the other reports. There should be an entry for each day files are made and reports prepared. In the event more than one report does not balance, research will need to be performed to determine which report(s) are correct.

  5. The Daily Deposit Production / OFAS Report will be received daily via e-mail from the bank. RTR data can be accessed in the RTR system reports function. The OCR Daily Cycle Reports can be found on the RPS9720 run and can be accessed on Control-D.  (01-01-2012)
Processed Twice and Unprocessable Remittance Adjustments Review

  1. A 100 percent review of all processed twice and unprocessable remittance debit adjustments received from the Federal Reserve Bank-Cleveland (FRB-C).

  2. In the appropriate columns, record the voucher number, voucher date, amount and voucher typed of each voucher received. Only one error can be assessed per voucher.

  3. Forward the DCI to the LFC no later than the third working day of the following month.

  4. An email from FRB-C stating the duplicate or unprocessable item was removed from the deposit, these items will not have an adjustment voucher, but will be recorded on the DCI review.  (01-01-2011)
Debit / Credit Voucher Review (DCVR)

  1. A 100 percent review of all debit and credit received from the Lockbox Site, other than encoding error and dishonored checks, which must be done daily by an employee in the hard-core payment tracer / dishonored checks unit of Accounting.

  2. In the appropriate columns, record the voucher number, voucher date, amount, and voucher type of each voucher received.

  3. Place the number of items in error in the appropriate error code column(s). Only one error per voucher will be recorded unless selecting the "Multiple Adjustments on one Voucher" error code. If error type is "Other" , provide an explanation in the comments column.


    DCVR errors over a year old should NOT be captured on the DCI.

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