3.11.6 Data Processing (DP) Tax Adjustments

Manual Transmittal

November 21, 2019

Purpose

(1) This transmits revised IRM 3.11.6, Returns and Documents Analysis - Data Processing (DP) Tax Adjustments.

Material Changes

(1) IRM 3.11.6.1.5, Acronyms - Added filing status acronyms. IPU 19U0062 issued 01-18-2019.

(2) IRM 3.11.6.1.5, Acronyms - Added ASED, DDBCK, DUPOL, RSED, and SP. IPU 19U0231 issued 02-28-2019.

(3) IRM 3.11.6.1.5, Acronyms - Added AIMS. IPU 19U0337 issued 03-14-2019.

(4) IRM 3.11.6.1.5, Acronyms - Added IVO’s AQC Program. IPU 19U0672 issued 05-22-2019.

(5) IRM 3.11.6.1.5, Acronyms - Added QW for qualified widow(er). IPU 19U0972 issued 08-20-2019.

(6) IRM 3.11.6.2.1, CP Notices - Added paragraph to remind TEs that Form 1040-X procedures are to be applied to CP Notices. IPU 19U0972 issued 08-20-2019.

(7) IRM 3.11.6.2.2, General Instructions - Added instructions for religious objector and Amish returns in paragraphs 6 and 7. IPU 19U0337 issued 03-14-2019.

(8) IRM 3.11.6.2.2, General Instructions - Updated paragraph 6 to include instructions for religious or conscience-based objectors. Deleted paragraph 7. IPU 19U0533 issued 04-22-2019.

(9) IRM 3.11.6.2.4, Visual Pre-screening Process - Added new section for a visual pre-screening process for Control Clerks. IPU 19U0231 issued 02-28-2019.

(10) IRM 3.11.6.2.4, Visual Pre-screening Process - Modified pre-screening procedures for TAS. Removed Form 911 from pre-screening as TEs have separate instructions on how to process the form. IPU 19U0972 issued 08-20-2019.

(11) IRM 3.11.6.2.5, Controlling Cases on IDRS - Added citation for when a received date is more than one year old and updated ICT/IVO information. IPU 19U0672 issued 05-22-2019.

(12) IRM 3.11.6.2.5, Controlling Cases on IDRS - Added instruction for when a received date is over a year old. IPU 19U0718 issued 06-04-2019.

(13) IRM 3.11.6.2.5, Controlling Cases on IDRS - Added instructions for claims with virtual currency notated in paragraph 4. IPU 19U1005 issued 08-30-2019.

(14) IRM 3.11.6.2.5, Controlling Cases on IDRS - Clarifying routing instructions for letter notations on top of tax returns relating to virtual currency. IPU 19U1029 issued 09-10-2019.

(15) IRM 3.11.6.2.5, Controlling Cases on IDRS - Added Ogden IDRS numbers. IPU 19U1058 issued 09-24-2019.

(16) IRM 3.11.6.2.6, Working Trail - Clarified instructions for working trails and added an If/Then box for paragraph 4. IPU 19U1005 issued 08-30-2019.

(17) IRM 3.11.6.2.6, Working Trail - Further clarified routing destinations in paragraph 3 If/Then boxes. IPU 19U1029 issued 09-10-2019.

(18) IRM 3.11.6.3.1, Taxpayer Identification Number (TIN) - Updated list to refer to CIS/AM. IPU 19U0356 issued 03-18-2019.

(19) IRM 3.11.6.3.3, Received Date - Added instructions for when a received date is more than one year old. IPU 19U0672 issued 05-22-2019.

(20) IRM 3.11.6.3.3, Received Date - Added instruction for controlling cases when a received date is over a year old. IPU 19U0718 issued 06-04-2019.

(21) IRM 3.11.6.3.3.1, Determining Timeliness - Added a more thorough explanation of tax return due dates to paragraph 2. IPU 19U0062 issued 01-18-2019.

(22) IRM 3.11.6.3.3.2, Superseding Returns - Added paragraph 3. IPU 19U0533 issued 04-22-2019.

(23) IRM 3.11.6.3.3, Received Date - Added definition of Official Received Date stamp and instructions for if the stamp is missing.

(24) IRM 3.11.6.4, Sorting, Routing, and Priority Processing - Removed Quiet Disclosure, OVDI, OVDP from the priority routing list. IPU 19U0718 issued 06-04-2019.

(25) IRM 3.11.6.4.1, Disaster Claims - Added Hurricanes Michael and Florence. IPU 19U0062 issued 01-18-2019.

(26) IRM 3.11.6.4.1, Disaster Claims - Deleted information regarding routing slip and added California wildfires to paragraph 6 bullet. IPU 19U0672 issued 05-22-2019.

(27) IRM 3.11.6.4.1, Disaster Claims - Clarified paragraph 6 as to include only disasters eligible for KATX category code. Removed Hurricane Florence. IPU 19U0957 issued 08-12-2019.

(28) IRM 3.11.6.4.1.1, Processing a Disaster Claim - Editorial changes and added Hurricanes Michael and Florence. IPU 19U0062 issued 01-18-2019.

(29) IRM 3.11.6.4.3, Identity Theft - Correction for "Process as original" and editorial changes. IPU 19U0022 issued 01-02-2019.

(30) IRM 3.11.6.4.3, Identity Theft (Formerly 3.11.6.4.7) - Added two additional action codes and a note to paragraph 2. IPU 19U0471 issued 04-05-2019.

(31) IRM 3.11.6.4.3, Identity Theft - Clarified paragraphs 2 and 3. IPU 19U0533 issued 04-22-2019.

(32) IRM 3.11.6.4.3, Identity Theft - Added routing address for Ogden to send Statute Returns to IDTVA. IPU 19U1058 issued 09-24-2019

(33) IRM 3.11.6.4.4, Statute Clearance - Corrected reference in paragraph 5 box 3 and added ID Theft action codes. IPU 19U0533 issued 04-22-2019.

(34) IRM 3.11.6.4.4, Statute Clearance - Moved paragraph 4 to IRM 3.11.6.4.3.1, Processing Statue Cases paragraph 2. IPU 19U0972 issued 08-20-2019.

(35) IRM 3.11.6.4.4.1, Processing Statue Cases - Added paragraph 2 regarding tax account on retention. The chart in paragraph 3 is not new. It was re-formatted and programming makes it appear new. Added an exception to paragraph 4 in the first THEN box under step 3. IPU 19U0972 issued 08-20-2019.

(36) IRM 3.11.6.4.5, Taxpayer Advocate Service Cases (TAS) - Updated routing procedures for TAS and CIS/AM. IPU 19U0853 issued 07-09-2019.

(37) IRM 3.11.6.4.5, Taxpayer Advocate Service Cases (TAS) - Updated section to include If/Then chart in paragraph 2 for taxpayer’s requesting TAS assistance. IPU 19U0957 issued 08-12-2019.

(38) IRM 3.11.6.4.5.3, Offshore Voluntary Disclosure Program - Quiet Disclosure Cases - Deleted this section as the program is not valid for 1040-X. IPU 19U0718 issued 06-04-2019.

(39) IRM 3.11.6.4.7, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Changed title and inserted a description of each as paragraph 1 and 2. Also added instructions for 971/134 and a note below chart to reference IVO Fraud Refund Scheme Listing. IPU 19U0231 issued 02-28-2019.

(40) IRM 3.11.6.4.7, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Added instructions for when there are notations on the top of returns and for when ICT/IVO returns the claims with instructions to route to Files. IPU 19U0533 issued 04-22-2019.

(41) IRM 3.11.6.4.7, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Added bullet to paragraph 6 to process 971/134 with a hold code of 1 if there is a -R freeze on the account. IPU 19U0625 issued 05-10-2019.

(42) IRM 3.11.6.4.7, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Clarified criteria for handling claims to and from IVO by making the instructions clearer for TEs in the If/Then boxes of paragraph 4. IPU 19U0672 issued 05-22-2019.

(43) IRM 3.11.6.4.7, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Split several boxes from the If-And-Then charts for easier understanding, changed the address to include the internal IVO AQC Program address, made editorial changes. IPU 19U0684 issued 05-23-2019.

(44) IRM 3.11.6.4.7, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Modified chart and note in paragraph 4 and simplified paragraph 7 by adding AQC criteria. IPU 19U0718 issued 06-04-2019.

(45) IRM 3.11.6.4.7, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Deleted duplicate information and added an Exception to paragraph 4 If/Then chart about additional route-out criteria. IPU 19U0789 issued 06-18-2019.

(46) IRM 3.11.6.4.7, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Updated section to clarify procedures for claims with TC 971 AC 134 and claims adjusted by AQC Program. IPU 19U0957 issued 08-12-2019.

(47) IRM 3.11.6.4.4, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Added examples to paragraph 4 box 5 for when a return verifies or does not verify against IRPTR. IPU 19U1029 issued 09-10-2019.

(48) IRM 3.11.6.4.4, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Added tolerances to paragraph 3. IPU 19U1035 issued 09-12-2019.

(49) IRM 3.11.6.4.4, Integrity and Verification Operation (IVO) Guidance and Criminal Investigation (CI) Scheme Development Center (SDC) - Updated AQC Program information in paragraph 3. IPU 19U0901 issued 07-22-2019.

(50) IRM 3.11.6.4.8, Examination (Formerly 3.11.6.4.5) - Added an example to paragraph 7. IPU 19U0096 issued 02-01-2019.

(51) IRM 3.11.6.4.8, Examination - Removed instructions for partial adjustments. Removed paragraphs 6 and 7 that were recently added in IPU 19U0096. IPU 19U0337 issued 03-14-2019.

(52) IRM 3.11.6.4.8, Examination - Correction to paragraph 4 to remove partial adjustments and route returns meeting Exam or CAT-A. IPU 19U0356 issued 03-18-2019.

(53) IRM 3.11.6.4.8, Examination - Clarified paragraphs 4 and 5 from IPU 19U0356 to include tax increases and/or credit decreases and added a note to paragraph 6 for routing Forms 4442. IPU 19U0424 issued 03-28-2019.

(54) IRM 3.11.6.4.8, Examination - Removed paragraphs referencing partial adjustment as SP 1040-X no longer inputs partial adjustments. IPU 19U0972 issued 08-20-2019.

(55) IRM 3.11.6.4.8, Examination - Added exception for incomplete responses to correspondence for claims with CAT-A or Exam criteria. IPU 19U1005 issued 08-30-2019.

(56) IRM 3.11.6.4.8.1, Category A Criteria (Formerly 3.11.6.4.5.1) - Amended to remove partial adjustment information. IPU 19U0337 issued 03-14-2019.

(57) IRM 3.11.6.4.8.2, Exam/-L Freeze Claim Processing - Amended to remove partial adjustment information. IPU 19U0337 issued 03-14-2019.

(58) IRM 3.11.6.4.9, Automated Underreporter (AUR) - Added paragraph 3 for when TC 160, 161, or 162 is present on the account. IPU 19U0424 issued 03-28-2019.

(59) IRM 3.11.6.4.11, International Returns - Corrected the transhipping address for the Virgin Islands Bureau of Internal Revenue due to feedback from AM. IPU 19U1093 issued 10-08-2019.

(60) IRM 3.11.6.4.20, Prisoner Returns - Clarified paragraph 3 and added notes to paragraph 5 regarding incarcerated and release dates. IPU 19U0444 issued 03-29-2019.

(61) IRM 3.11.6.4.20, Prisoner Returns - Removed any reference to send returns to IVO. IPU 19U0672 issued 05-22-2019.

(62) IRM 3.11.6.6.1, TC 150 Research (No TC 150) - Added Note for RJ 150. IPU 19U0062 issued 01-18-2019.

(63) IRM 3.11.6.6.2(3)(b), Form 1040-X with No Form 1040 Attached (No TC 150) - Changed the note under paragraph 3a and clarified chart in paragraph 4. IPU 19U0533 issued 04-22-2019.

(64) IRM 3.11.6.6.3, Form 1040 Attached to Form 1040-X - Corrected formatting issues. IPU 19U0533 issued 04-22-2019.

(65) IRM 3.11.6.7.1, Entity Changes - Removed partial adjustment from paragraph 1 and removed outdated note from paragraph 4. Corrected formatting issues. IPU 19U0471 issued 04-05-2019.

(66) IRM 3.11.6.7.1.1, Filing Status 2 Changes - Adding instructions for adding a spouse. IPU 19U0471 issued 04-05-2019.

(67) IRM 3.11.6.7.4.1, Math Error Response - Clarification for 2017 and prior year returns in paragraph 4. IPU 19U0356 issued 03-18-2019.

(68) IRM 3.11.6.7.5, Transaction Codes and Reference Numbers - Removed instructions for entering cents. IPU 19U0972 issued 08-20-2019.

(69) IRM 3.11.6.7.6.1, Blocking Series - Made corrections to blocking series usage descriptions. IPU 19U0672 issued 05-22-2019.

(70) IRM 3.11.6.7.6.1, Blocking Series (BS) - Corrected chart in paragraph 1 to reflect paper filed and electronically filed returns. IPU 19U0789 issued 06-18-2019.

(71) IRM 3.11.6.7.6.5, Category Codes - Updated hurricane names. IPU 19U0062 issued 01-18-2019.

(72) IRM 3.11.6.7.6.5, Category Codes - Updated Disaster information. IPU 19U0672 issued 05-22-2019.

(73) IRM 3.11.6.7.6.6, Source Document Indicator - Removed partial adjustments from the examples. IPU 19U0684 issued 05-23-2019.

(74) IRM 3.11.6.8, Updating the Duplicate TIN (DUPOL) Database - Changed the title and added a definition in paragraph 1. IPU 19U0231 issued 02-28-2019.

(75) IRM 3.11.6.8, Updating the Duplicate TIN OnLine (DUPOL) Database - Added note to the first Then box in chart of paragraph 5 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(76) IRM 3.11.6.8, Updating the Duplicate TIN OnLine (DUPOL) Database - Clarified exemption versus dependent for 2018. IPU 19U0356 issued 03-18-2019.

(77) IRM 3.11.6.8, Updating the Duplicate TIN OnLine (DUPOL) Database - Added information for the process of deleting a dependent in paragraph 4.

(78) IRM 3.11.6.8.1, Command Code DDBCK (Dependent Database Check) - Changed the title and clarified information. IPU 19U0231 issued 02-28-2019.

(79) IRM 3.11.6.8.1, Command Code DDBCK (Dependent Database Check) - Added note to chart in paragraph 4 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(80) IRM 3.11.6.8.1, Command Code DDBCK (Dependent Database Check) - Changed exemption to dependent throughout subsection to avoid confusion for 2018. IPU 19U0356 issued 03-18-2019.

(81) IRM 3.11.6.8.1, Command Code DDBCK (Dependent Database Check) - Added information for updating DDBCK for spouse. IPU 19U0471 issued 04-05-2019.

(82) IRM 3.11.6.8.1, Command Code DDBCK (Dependent Database Check) - Updated DDBCK literals on addressing future dates in paragraph 6. IPU 19U0972 issued 08-20-2019.

(83) IRM 3.11.6.8.2, Command Code DUPED - Added note to paragraph 2 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(84) IRM 3.11.6.8.2.1, Add a Record - Added note to paragraph 1 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(85) IRM 3.11.6.8.2.1, Add a Record - Added instructions for DSI. IPU 19U0471 issued 04-05-2019.

(86) IRM 3.11.6.8.2.2, Change a Record - Added note to paragraph 1 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(87) IRM 3.11.6.8.2.2, Changing a Record - Modified the title to "Changing" a Record and added note below paragraph 4 for exemptions for 2018-2025.

(88) IRM 3.11.6.8.2.3, Delete a Record - Added note to paragraph 1 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(89) IRM 3.11.6.9, Credits - Add this new section to divide credits into non-refundable and refundable

(90) IRM 3.11.6.9.1, Credits - Non-Refundable (Line 7) - Added paragraphs 7 and 8 regarding instructions for religious or conscience-based objection and Amish/Mennonite. IPU 19U0231 issued 02-28-2019.

(91) IRM 3.11.6.9.1, Credits - Non-Refundable (Line 7) (Formerly 3.11.6.9.7) - Added note to paragraph 5 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(92) IRM 3.11.6.9.1, Credits - Non-Refundable (Line 7) - Updated paragraph to include instructions for religious or conscience-based objectors. IPU 19U0533 issued 04-22-2019.

(93) IRM 3.11.6.9.1, Non-Refundable Credits - Changed the name of the section to more clearly identify the difference between non-refundable and refundable credits. Also added the order in which non-refundable credit must be applied.

(94) IRM 3.11.6.9.1.1, Form 2441, Credit for Child and Dependent Care Expenses (Line 7) (Formerly 3.11.6.9.6.4) - Added new paragraphs regarding religious or conscience-based objection and Amish/Mennonite. IPU 19U0231 issued 02-28-2019.

(95) IRM 3.11.6.9.1.1, Form 2441, Credit for Child and Dependent Care Expenses (Line 7) - Updated paragraph to include instructions for religious or conscience-based objectors and made some formatting changes. IPU 19U0533 issued 04-22-2019.

(96) IRM 3.11.6.9.1.3, Form 8863, Education Credits (Line 7) - Changed paragraphs 2 and 3 regarding religious or conscience-based objection and Amish/Mennonite and added note to paragraph 4. IPU 19U0337 issued 03-14-2019.

(97) IRM 3.11.6.9.1.3, Form 8863, Education Credits (Line 7) - Updated paragraph to include instructions for religious or conscience-based objectors. IPU 19U0533 issued 04-22-2019.

(98) IRM 3.11.6.9.1.3.1, Lifetime Learning Credit - Added exception to paragraph 4 regarding foreign educational institutes. IPU 19U0957 issued 08-12-2019.

(99) IRM 3.11.6.9.1.3.2, American Opportunity Credit (AOTC) (Formerly 3.11.6.9.6.7.2) - Added exception to paragraph 9 regarding foreign educational institutes. IPU 19U0957 issued 08-12-2019.

(100) IRM 3.11.6.9.1.3.2, American Opportunity Credit (AOTC) - Non-Refundable - Changed the name to differentiate between the non-refundable portion of the AOTC and the refundable portion. Updated TY 2019 info and added exception to paragraph 9 regarding foreign educational institutes.

(101) IRM 3.11.6.9.1.6, Credit for Other Dependents (ODC) (Formerly 3.11.6.9.6.3) - Made routing changes for Form 8862, Information to Claim Certain Credits After Disallowance and editorial changes. IPU 19U0022 issued 01-02-2019.

(102) IRM 3.11.6.9.1.6, Credit for Other Dependents (ODC) - Added new paragraphs 3 and 4 regarding religious or conscience-based objection and Amish/Mennonite. IPU 19U0231 issued 02-28-2019.

(103) IRM 3.11.6.9.1.6, Credit for Other Dependents (ODC) - Updated paragraphs 3 and 4 to include instructions for religious or conscience-based objectors. IPU 19U0533 issued 04-22-2019.

(104) IRM 3.11.6.9.1.7, Child Tax Credit (Formerly 3.11.6.9.6.2) - Made routing changes for Form 8862, Information to Claim Certain Credits After Disallowance. IPU 19U0022 issued 01-02-2019.

(105) IRM 3.11.6.9.1.7, Child Tax Credit (CTC) (Line 7) - Updated paragraph to include instructions for religious or conscience-based objectors and added an Exception under paragraph 12. IPU 19U0533 issued 04-22-2019.

(106) IRM 3.11.6.9.2, Refundable Credits - Added this new section to differentiate the refundable credits from the non-refundable.

(107) IRM 3.11.6.9.2.1.1, EITC Eligibility Criteria - Added instructions for MFS in paragraph 4 with Note. IPU 19U0022 issued 01-02-2019.

(108) IRM 3.11.6.9.2.1.5, CP 09, Earned Income Credit for Taxpayer with Qualifying Children - Changed source code for disallowing the credit. IPU 19U0868 issued 07-12-2019.

(109) IRM 3.11.6.9.2.1.5, CP 09, Earned Income Credit for Taxpayer with Qualifying Children - Added paragraph to remind TEs that Form 1040-X procedures are to be applied to CP Notices. IPU 19U0972 issued 08-20-2019.

(110) IRM 3.11.6.9.2.1.6, CP 27, EIC Potential for Taxpayer Without Qualifying Children - Changed source code for disallowing the credit. IPU 19U0868 issued 07-12-2019.

(111) IRM 3.11.6.9.2.1.6, CP 27, EIC Potential for Taxpayer Without Qualifying Children - Added paragraph to remind TEs that Form 1040-X procedures are to be applied to CP Notices. IPU 19U0972 issued 08-20-2019.

(112) IRM 3.11.6.9.2.2, Form 8812, Additional Child Tax Credit (Line 15) - Changed paragraphs 8 and 9 regarding religious or conscience-based objection and Amish/Mennonite. IPU 19U0337 issued 03-14-2019.

(113) IRM 3.11.6.9.2.2, Form 8812, Additional Child Tax Credit (Line 15) - Updated paragraph to include instructions for religious or conscience-based objectors. IPU 19U0533 issued 04-22-2019.

(114) IRM 3.11.6.9.2.2.1, CP 08, Additional Child Tax Credit - Added paragraph to remind TEs that Form 1040-X procedures are to be applied to CP Notices. IPU 19U0972 issued 08-20-2019.

(115) IRM 3.11.6.9.2.6.1, Premium Tax Credit (PTC), Form 8962 (Formerly 3.11.6.9.13.5.2) - Added note to paragraph 5 regarding 2018 returns and exemptions. IPU 19U0337 issued 03-14-2019.

(116) IRM 3.11.6.9.2.6.1, Premium Tax Credit (PTC), Form 8962 - Clarified paragraph 3 to include changes to AGI. IPU 19U0789 issued 06-18-2019.

(117) IRM 3.11.6.9.2.6.2.1, Adjusting the Shared Responsibility Payment (SRP) - Updated paragraph 2 to indicate that TP should check the health care coverage checkbox or attach a Form 8965. IPU 19U0853 issued 07-09-2019.

(118) IRM 3.11.6.9.2.6.3, Form 8965, Health Coverage Exemptions - Added a chart in paragraph 2 for when a taxpayer indicates an exemption. IPU 19U0853 issued 07-09-2019.

(119) IRM 3.11.6.9.2.6.5, Coverage Checkbox - Moved information to 3.11.6.9.2.6.2 and 3.11.6.9.2.6.4 and deleted this section.

(120) IRM 3.11.6.9.3, Protecting Americans from Tax Hikes (PATH Act) (Formerly 3.11.6.9.6.1) - Added Credit for Other Dependents to list credits in which the PATH Act applies and made editorial changes. IPU 19U0022 issued 01-02-2019.

(121) IRM 3.11.6.9.7.1, Protecting Americans from Tax Hikes (PATH Act) - Simplified instructions regarding researching ITINs in paragraph 8. IPU 19U1058 issued 09-24-2019.

(122) IRM 3.11.6.10, Specific IMF Adjustments - Rearranged this section to coincide with Form 1040-X sections and line item numbers.

(123) IRM 3.11.6.10.1, Income and Deductions - Added this new section to coincide with the flow of the Form 1040X and provide a brief description for the TEs.

(124) IRM 3.11.6.10.1.1.4, Form 8917, Tuition and Fees Deduction (Line 1) (Formerly 3.11.6.9.1.4) - Added note to paragraph 8 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(125) IRM 3.11.6.10.1.2, Standard and Itemized Deductions (Line 2) - Removed note from under chart in paragraph 3 that stated Taxpayer’s sometimes combine their standard deduction with their personal exemption. IPU 19U0337 issued 03-14-2019.

(126) IRM 3.11.6.10.1.2.1, Itemized Deductions (line 2) (Formerly 3.11.6.9.2.1) - Clarification in paragraph (4) by adding an exception with instructions for if the taxpayer claims Itemized Deductions expense less than Standard Deductions. IPU 19U0062 issued 01-18-2019.

(127) IRM 3.11.6.10.1.2.1, Itemized Deductions (Line 2) - Added list of deductions no longer allowed on Schedule A. IPU 19U0337 issued 03-14-2019.

(128) IRM 3.11.6.10.1.2.2, Form 2106, Employee Business Expenses (Formerly 3.11.6.9.2.2) - Added instruction to distinguish between current and prior years. IPU 19U0231 issued 02-28-2019.

(129) IRM 3.11.6.10.1.3, Exemptions (Line 4a) (Formerly 3.11.6.9.3.1) - Removed outdated note under the chart in paragraph 2. IPU 19U0337 issued 03-14-2019.

(130) IRM 3.11.6.10.1.3.1, Changes to Exemptions (Formerly 3.11.6.9.3.1) - Removed routing instruction from paragraph 1 and added an exception to paragraph 9 for 2018 returns removing exemptions. IPU 19U0258 issued 03-04-2019.

(131) IRM 3.11.6.10.1.3.1, Changes to Exemptions - Updated information to reflect consistency with AM. Added Notes to paragraph 1 on how to input changes to exemptions for 2018 claims. IPU 19U0337 issued 03-14-2019.

(132) IRM 3.11.6.10.1.3.1, 2018: Changes to Exemptions and/or Dependents - Changed the name and added information for 2018 for dependents. IPU 19U0356 issued 03-18-2019.

(133) IRM 3.11.6.10.1.3.1, 2018: Changes to Exemptions and/or Dependents - Removed bullets in paragraph 1a and clarified chart in paragraph 10 by removing "for current year claims as well as prior year claims" from first Then box. IPU 19U0424 issued 03-28-2019.

(134) IRM 3.11.6.10.1.3.1, 2018: Changes to Exemptions and/or Dependents - Added exception to paragraph 1a. IPU 19U0444 issued 03-29-2019.

(135) IRM 3.11.6.10.1.3.1, 2018: Changes to Exemptions and/or Dependents - Added paragraph 1)b for adding a spouse. IPU 19U0471 issued 04-05-2019.

(136) IRM 3.11.6.10.1.3.1, 2018: Changes to Exemptions and/or Dependents - Added paragraph 1 to give background on TCJA of 2017. IPU 19U0533 issued 04-22-2019.

(137) IRM 3.11.6.10.1.3.1, 2018 - 2025: Exemptions - Changed the title of the section to differentiate between the exemption rules for 2018 through 2025 and the 2017 and prior section.

(138) IRM 3.11.6.10.1.3.2, 2017 and prior: Exemptions - Changed the title of the section to differentiate between the exemption rules for 2018 through 2025 and the 2017 and prior section.

(139) IRM 3.11.6.10.1.3.4, Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents - Added note to paragraph 3 for taxpayers trying to change exemptions for 2018. IPU 19U0337 issued 03-14-2019.

(140) IRM 3.11.6.10.1.4, Qualified Business Income Deduction (QBID) (Line 4b) - This complete section is new. IPU 19U0231 issued 02-28-2019.

(141) IRM 3.11.6.10.2, Tax Liability - Added this new section to coincide with the section of the Form 1040-X and give a definition of tax liability.

(142) IRM 3.11.6.10.2.2.2, Self-Employment (SE) Tax (Line 10) (Formerly 3.11.6.9.8.2)- Change to paragraph 6 box b regarding ministerial duties and Form 4361. IPU 19U0258 issued 03-04-2019.

(143) IRM 3.11.6.10.2.2.2, Self-Employment (SE) Tax (Line 10) - Changed paragraph 6 box b regarding changes to income where there is an indication that wages are from ministerial duties. IPU 19U0337 issued 03-14-2019.

(144) IRM 3.11.6.9.10.2.2.2.2, SE Social Security - Removed obsolete information from paragraph 1. IPU 19U0533 issued 04-22-2019.

(145) IRM 3.11.6.10.3, Payments - New section to coincide with the Form 1040-X sections and define payments.

(146) IRM 3.11.6.10.3.1, Federal Income Tax Withholding (Line 12) - Updated guidelines for when unable to verify withholdings on W-2 or 1099. IPU 19U0957 issued 08-12-2019.

(147) IRM 3.11.6.10.3.2.1, Estimated Tax Penalty - Corrected paragraph numbers in 6 and 7. IPU 19U0337 issued 03-14-2019.

(148) IRM 3.11.6.11, Correspondence Procedures - Added paragraph 2 for incomplete responses to correspondence for claims with CAT-A or Exam criteria. IPU 19U1005 issued 08-30-2019.

(149) IRM 3.11.6.11.1, Corresponding on Net Balance Due Returns (324C Letter) - Removed references to partial adjustments and clarified information. IPU 19U0471 issued 04-05-2019.

(150) IRM 3.11.6.11.3, Correspondence for Disallowing a Claim (105C and 106C Letters) - Updated description for disallowing claims and added paragraph alphas for taxpayer’s appeal rights. IPU 19U0672 issued 05-22-2019.

(151) IRM 3.11.6.11.3 - Correspondence for Disallowing a Claim (105C and 106C Letters) - Removed paragraph N from use of 106C letters in paragraph 6. IPU 19U0684 issued 05-23-2019.

(152) IRM 3.11.6.11.3, Correspondence for Disallowing a Claim (105C and 106C Letters) - Corrected paragraphs 5 and 8 and removed the notes. IPU 19U0789 issued 06-18-2019.

(153) IRM 3.11.6.11.3, Correspondence for Disallowing a Claim - Correspondence for Disallowing a Claim - Changed paragraphs used in the 105/106C letters due to additional changes on the CRX system that became effective October 7, 2019. IPU 19U1093 issued 10-08-2019

(154) IRM 3.11.6.11.7, Undelivered Correspondence - Added paragraph 7. IPU 19U0533 issued 04-22-2019.

(155) IRM 3.11.6.13, 1040-X Routing Guide - Added QBID to chart. IPU 19U0231 issued 02-28-2019.

(156) IRM 3.11.6.13, 1040-X Routing Guide - Added information for routing to LB&I when AGI decreases with specific criteria, deleted information for IVO, and made some editorial changes. IPU 19U0672 issued 05-22-2019.

(157) IRM 3.11.6.13, 1040-X Routing Guide - Added Form 8621 to paragraph routing instructions. IPU 19U0684 issued 05-23-2019.

(158) IRM 3.11.6.13, Routing Guide - Added criteria for routing Form 5884, Work Opportunity Credit. IPU 19U0789 issued 06-18-2019.

(159) IRM 3.11.6.13, Routing Guide - Updated guidance to route NOLs to Carryback Carryforward if changing. IPU 19U0853 issued 07-09-2019.

(160) Exhibit 3.11.6-6, International Returns - Moved this exhibit into IRM 3.11.6.4.10.1, International Returns.

(161) Exhibit 3.11.6-7, Partial Adjustments - All partial adjustment instructions and examples have been removed. IPU 19U0337 issued 03-14-2019.

(162) Exhibit 3.11.6-8, TIN requirements for Exemptions and Credits - Updated requirements for CTC primary and secondary TIN. IPU 19U0471 issued 04-05-2019.

(163) Editorial changes have been made throughout the IRM for:

  • Correcting spelling and grammatical errors.

  • Reorganizing the IRM without changing any substantive content or meaning. Sections flow in a priority order of routing and/or along the Form 1040-X so that tax examiners (TEs) can easily find needed information.

  • Adding or correcting references and citations and adding more links to the forms that are currently in the IRM so tax examiners can access the forms more readily.

  • Updating information more subject to frequent changes such as tax years and line items on forms as we are going into a new tax filing season.

  • Updating organizational terms, titles, and acronyms that are relevant for the 1040-X TEs.

  • Converting graphics to text and converting text to tables so that TEs will better understand our processes.

The changes are included in IPUs 19U0022, 19U0062, 19U0096, 19U0231, 19U0258, 19U0337, 19U0356, 19U0424, 19U0471, 19U0533, 19U0598, 19U0625, 19U0672, 19U0684, 19U0718, 19U0868, and 19U0901.

Effect on Other Documents

IRM 3.11.6, Returns and Documents Analysis - Data Processing (DP) Tax Adjustments, dated November 08, 2018 (effective January 1, 2019), is superseded. This IRM incorporates the following IRM Procedural Updates (IPUs), issued between January 2, 2019 through October 10, 2019: 19U0022, 19U0062, 19U0096, 19U0231, 19U0258, 19U0337, 19U0356, 19U0424, 19U0444, 19U0471, 19U0533, 19U0598, 19U0625, 19U0672, 19U0684, 19U0718, 19U0789,19U0853, 19U0863, 19U0868, 19U0901, 19U0957, 19U0972, 19U1005, 19U1029, 19U1035, 19U1058, 19U1093, and 19U1108.

Audience

Wage and Investment Submission Processing Tax Examiners

Effective Date

(01-01-2020)


Linda Brown
Director, Submission Processing
Wage and Investment

Program Scope and Objectives

  1. Purpose: This IRM covers Form 1040-X, CP 08, CP 09, CP 27 processing procedures for Integrated Data Retrieval System (IDRS) and Integrated Submission and Remittance Processing (ISRP) input by Submission Processing (SP).

  2. Audience: These procedures apply to SP 1040-X employees such as Supervisory Tax Examining Technicians, Lead Tax Examining Technicians, and Tax Examining Technicians, who are responsible for the processing amended tax returns and related correspondence.

  3. Policy Owner: Director, Submission Processing

  4. Program Owner: Submission Processing, Post Processing Section, Specialty Programs Branch

  5. Primary Stakeholders: SP 1040-X employees, Accounts Management (AM), Small Business/Self-Employed (SBSE), Large Business and International (LB&I), Return Integrity Compliance Systems (RICS), Chief Financial Officer (CFO), Taxpayer Advocate Service (TAS), Chief Counsel, Information Technology programmers, Compliance, Submission Processing (SP)

  6. Program Goals: This IRM provides the fundamental knowledge and procedural guidance for employees that work Forms 1040-X. By following the processes and procedures provided in this IRM, employees will adjust tax accounts using documents provided by the taxpayer in a manner that follows IRS policy and procedures while promoting the best interests of the Government.

Background

  1. Employees in the Submission Processing (SP) 1040-X organization:

    • Control Form 1040-X cases on IDRS and input of the TC 971 AC 120

    • Perform a preliminary review of Form 1040-X

    • Screen, sort, route, and prioritize the forms for processing

    • Process Form 1040-X using IDRS for input of adjustments

    • Input specific Individual Master File (IMF) Adjustments

    • Correspond for missing required forms and signatures

    • Aid in determining fraud and frivolous positions

    • Input adjustments from CP Notices

Authority

  1. Authority for these procedures is found in the following sections of the Internal Revenue Code (IRC) and their corresponding Treasury regulations.

    • IRC 6201(a)

    • IRC 6213(b)

    • IRC 6402(a)

    • IRC 6511

    • Protecting Americans from Tax Hikes Act (PATH Act) enacted December 18, 2015

    • The Disaster Tax Relief and Airport and Airway Extension Act of 2017, enacted on September 29, 2017

    • The Tax Cuts and Job Act (TCJA) enacted on December 22, 2017

    • The Bipartisan Budget Act of 2018 enacted February 9, 2018

Roles and Responsibilities

  1. The Director of Submission Processing is responsible for monitoring operational performance for the Submission Processing campuses.

  2. The Operations Manager is responsible for monitoring operational performance.

  3. The Team Managers and Leads are responsible for performance monitoring and ensuring employees have the tools to perform their duties.

  4. Employees are responsible for following the instructions contained in this IRM and maintaining updated IRM procedures.

Program Management and Review

  1. Program Reports: ERS Draft language - System control reports are on the Control-D, WebAccess (CTDWA).

  2. Program Effectiveness: Program effectiveness is determined by Submission Processing’s employees successfully using IRM guidance to perform necessary account actions and duties. The following are used to ensure program effectiveness:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

  3. Annual Review: Review the processes included in this manual annually to ensure accuracy and promote consistent tax administration. This may be included under responsibilities for a manager.

Program Controls

  1. Federal Managers Financial Integrity Act (FMFIA) of 1982 requires federal agency executives periodically review and annually report on the agency's internal control systems.

  2. The Government Accountability Office (GAO) sets forth the standards for an effective internal control system for federal agencies in the Standards for Internal Control in the Federal Government.

  3. Systemic controls are embedded in the xClaim Integrated Automation Technologies (IAT) tool and the Integrated Data Retrieval System (IDRS).

Acronyms

  1. Acronyms commonly used include the following:

    Acronym Definition
    AC Action Code
    AIMS Audit Information Management System
    AM Accounts Management
    AMS Accounts Management Services
    AQC Automated Questionable Credit (IVO)
    ASED Assessment Statute Expiration Date
    ATIN Adoption Taxpayer Identification Number
    BS Blocking Series
    CC Command Code
    CIS Correspondence Imaging System
    CRN Credit Reference Number
    DDBCK Dependent Database Check
    DUPOL DUPlicate TIN OnLine
    EITC Earned Income Tax Credit
    HC Hold Code
    HOH Head of Household
    IDRS Integrated Data Retrieval System
    IMF Individual Master File
    IAT Integrated Automation Technologies
    ITIN Individual Taxpayer Identification Number
    FS Filing Status
    MAGI Modified Adjusted Gross Income (always greater than the AGI)
    MFJ Married Filing Joint
    MFS Married Filing Separate
    MFT Master File Transaction
    NC Name Control
    NSD No Source Document
    O/S Original Signature
    ODC Credit for Other Dependents
    POA Power of Attorney
    QND Qualifying Non-Dependent
    QW Qualifying Widow(er)
    RC Reason Code
    RSED Refund Statute Expiration Date
    RTS Real Time System
    SC Source Code
    SD Source Document
    SP Submission Processing
    SSN Social Security Number
    TC Transaction Code
    TIN Taxpayer Identification Number
  2. For a comprehensive listing of any IRS acronyms, please refer to the Acronym Database.

Related Resources

  1. Websites and electronic tools used to process adjustments include:

    • Servicewide Electronic Research Program (SERP)

    • Submission Processing Design Center (SPDC)

    • Integrated Data Retrieval System (IDRS)

    • Integrated Automation Technologies (IAT)

    • Accounts Management Services (AMS)

General Form 1040-X Information

  1. An individual taxpayer may file a Form 1040-X, Amended US Individual Income Tax Return, to correct Form 1040 or Form 1040-NR. By filing an amended return, taxpayers may add, delete, update, or change tax information reported on their original tax return. Taxpayers may also amend amounts adjusted by the IRS.

  2. Form 1040 has been redesigned:

    • For tax year 2018, the form was redesigned to removed certain line items that are found on Schedules 1 through 6. Additionally, the redesign made Form 1040A and Form 1040EZ obsolete.

    • For tax year 2019, the form was again redesigned to consolidate information into Schedules 1 through 3. Additionally, a new Form 1040-SR, U.S. Income Tax Return for Seniors, was introduced for taxpayers over 65 years of age.

  3. For tax years 2017 and prior, a taxpayer may correct Form 1040, 1040A, 1040EZ or 1040-NR.

  4. Page 1 of Form 1040-X contains three columns to help taxpayers calculate changes:

    1. Column A, Original amount, shows amounts originally claimed by the taxpayer, amounts adjusted by the IRS (math error on original return), or amounts adjusted from a previously filed Form 1040-X for the same tax period.

    2. Column B, Net change, shows the amount of change (increase or decrease) for each line the taxpayer is changing. Taxpayers are instructed to show decreases in parenthesis, explain each change in the Explanation of Changes, of the Form 1040-X or attached statement, and attach any schedule and/or form related to the change.

    3. Column C, Correct Amount, shows amended figures. If Column C is blank, determine the amount if amounts in Columns A and/or B are present. If a Net Change in Column B:

    • Is a positive number, add it to Column A to give the Column C total.

    • Is a negative number in parenthesis or preceded by a negative sign, subtract it from Column A to give the Column C total.

    • Is not present indicating No Change, then the amount in Column A is the same as the amount in Column C.

  5. The operational instructions in this IRM will determine if the adjustment request can be made in Submission Processing or if it must be routed to another area or function. Returns which can be adjusted in Submission Processing (commonly referred to as "workable" ) are either input on-line using IDRS or sent to ISRP for input. Not all scenarios are covered by this IRM. See your lead if clarification is needed. Leads see IRM 3.11.6.2.8.

  6. The general sequence is to determine the following:

    1. Route out criteria is met

    2. The claim is complete

    3. The claim is allowable

    4. The claim is processable

  7. If a taxpayer files an amended Form 1040 series, Individual Income Tax Return, in lieu of a Form 1040-X, you must determine if it is an original, duplicate, or amended return. If an original return, route to Batching for processing under the correct Program Code. Refer to IRM 3.11.6.6.5 for duplicate or IRM 3.11.6.6.4"amended" procedures.

  8. Process Form 1040-X and CP notices within 12 calendar days from the IRS received date (day one) to the date the document is delivered to the Corresponding Imaging System (CIS) Unit (ending day) or input of a TC 29X. See IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates.

    1. During the peak period, process Form 1040-X and CP notices within 20 calendar days. Peak period is defined as March 1st through June 30th.

    2. Control all work that has not met the aged criteria and batch with work that has the same IRS received date.

    3. Identify work that is aged when received as I/O; Work I/O, Statute, and W-7 within 12 calendar days of the date it is entered in BBTS.

    4. Count days in inventory using the IRS received date to determine the oldest date to be processed excluding I/O, Statute, W-7, No TC 150, Correspondence and the previous day’s receipts.

  9. Occasionally multiple Form 1040, Form 1040-SR, Form 1040-A, Form 1040-EZ and/or Form 1040-X are attached. For example:

    • Two or more returns from the same taxpayer are mailed in the same envelope.

    • Two or more family members' returns are mailed by the tax preparer in the same envelope.

    • Two or more unrelated returns are mailed by the tax preparer in the same envelope.

      Note:

      Detach the returns leaving an action trail on each document, then sort, work or route the returns as appropriate.

      Exception:

      For transactions that require routing to another function, if two or more returns are for the same taxpayer keep all tax years together.

  10. Do not input or update CC REQ54, CC DUPED, CC DDBCK or CC ENREQ on an account that will be routed or when returning the claim to the taxpayer unless otherwise instructed by a specific section.

  11. The operational guidance in this IRM takes precedence over any conflicting IRMs. Contact your lead if you have any questions about operational guidance and for clarification between operational issues and statutory requirements.

  12. General SERP Alerts issued for IRM 3.11.6 are additions to the IRM instruction and are to be followed as part of the IRM 3.11.6.

  13. References to the Integrated Automation Technologies (IAT) xClaim tool functionality are not intended to be exhaustive or complete. Refer to xClaim training and local procedures for more complete information about the functionality and use of these tools. Use IAT tools, when available, to process amended returns.

    Note:

    IRM instructions will take precedence over any instructions, directions or default inputs the IAT tools provide. If specific IRM instructions are not present, accept the IAT Tool results.

  14. All references to line numbers are for the current revision of the form or schedule unless otherwise specified.

  15. The specific section instructions take precedence over any general instruction.

Computer Paragraph (CP) Notices

  1. Computer Paragraph (CP) 08, 09 and 27 notices are generated from criteria on the original return. They are as follows:

    • CP 08 - You May Qualify for a Refund from the Additional Child Tax Credit

    • CP 09 - Earned Income Credit for Taxpayer with Qualifying Children

    • CP 27 - EIC Potential for Taxpayer Without Qualifying Children

  2. Apply Form 1040-X procedures are to CP 08, CP 09, and CP 27 notices, as they are considered a Form 1040-X.

  3. CP 08, CP 09, and CP 27 notices are mailed to taxpayers with 2D bar codes and will have the SSN masked (e.g., XXX-XX-1234). Hand held scanners will be available for reading the barcode. If the hand-held scanner is unable to read the bar code, Command Code (CC) TPIIP must be used to determine the SSN. For additional information on CC TPIIP, refer to IDRS Command Code Job Aid located on the Servicewide Electronic Research Program (SERP) under IRM Supplements.

    Note:

    Take care not to write, mark, or stamp over the bar code as this could make it unreadable.

  4. Generally, a completed CP notice is considered an informal claim. However, if the taxpayer returns the CP notice indicating he/she is not eligible for the specific credit (no other issues involved), a reply is not necessary. Destroy as classified waste per local procedures.

    Exception:

    If some of the children qualify for the credit but others do not, then process the CP notice for the qualifying child(ren).

  5. If the taxpayer attached the CP 08, CP 09, or CP 27 notice to Form 1040-X and there are additional issues, convert the credit to the attached Form 1040-X and process per local procedures. X the CP notice and staple behind the Form 1040-X.

    Note:

    If the taxpayer has additional issues in addition to the CP notice and does not provide Form 1040-X, process the CP notice and correspond for a 1040-X for the other issues.

  6. If the taxpayer attached the CP 08, CP 09, or CP 27 notice to Form 1040-X and there are no additional issues, process the CP notice. X the Form 1040-X and staple behind the CP notice.

    Note:

    CP 08, CP 09, or CP 27 notice with a received date after the RSED should be worked following procedures in the If/Then chart at IRM 3.11.6.4.4.1(7).

  7. Taxpayers must return the completed and signed (both Primary and Secondary if FS2, Married Filing Jointly) CP notice, if qualified. If the CP notice is incomplete, return to the taxpayer using the check boxes on the Form 8009-A pertaining to the CP notices.

    Note:

    If the taxpayer response to Form 8009-A is still incomplete, send the Letter 916C. Refer to IRM 3.11.6.11.9.

  8. CP notices do not need to be sent to Statute for clearance before processing.

  9. If a signed Form 1040-X or Amended Return is attached to the CP Notice, accept the signature and notate O/S 1040X on the notice.

  10. Do not include an amended claims date on CP notice adjustments.

  11. Do not input a TC 971 AC 270 when corresponding on CP notices.

  12. Use the AGI and EI from the Per Computer Column of CC RTVUE for CP Notice calculations.

    Exception:

    If there is a previously posted adjustment, see paragraph 13 below.

  13. If the taxpayer alters the address on a CP notice and an address change can be made per IRM 3.11.6.7.1, then use CC INCHG to update the taxpayer address.

  14. If there is a previously posted adjustment on IDRS, review the adjustment to determine if the CP notice issue has already been adjusted. If the CP notice has already been adjusted, treat the CP notice as classified waste per local management. Otherwise, continue to process the CP notice.

General Instructions

  1. Use an erasable red pen for any editing markings.

  2. Edit your Tax Examiner (TE) number in the top left margin of Form 1040-X, CP 08, CP 09, or CP 27, or follow any local procedures that ensure the integrity of the batch for routing to Files (e.g., number returns, enter IDRS employee number, and date).

  3. Follow local procedures for routing to other functions.

  4. Return the following original documents:

    • Passport

    • Social Security Card

    • Driver’s License

    • Marriage certificate

    • Other original documents - see Lead TE

      Note:

      When returning documents, send Form 8009-A and use the fill-in: We are returning your original document(s).

      Exception:

      If the return is being routed to another area, do not detach the above-mentioned document(s).

  5. Researching previous tax years may assist in processing a return. Tax examiners must have a valid business reason to access related accounts.

  6. For 2018 and subsequent, if the taxpayer indicates a religious (e.g., Amish/Mennonite or Form 4029) or conscience-based objection to obtaining a taxpayer identification number (TIN), refer to CIS/AM.

    Exception:

    For 2017 and prior, allow the Child Tax Credit (CTC), Additional CTC (ACTC), and the Child and Dependent Care credit (Form 2441) if the taxpayer identifies as either "Amish" , "Mennonite," or "Exempt 4029" , even if the individual does not have a valid TIN.

Internal Revenue Manual (IRM) Deviations

  1. Service Center Directors, Headquarter Branch Chiefs, and Headquarter Analysts do not have the authority to approve deviations from IRM procedures. Any request for an exception or deviation to an IRM procedure must be elevated through appropriate channels for executive approval. This will ensure other functional areas are not adversely affected by the change, and it does not result in disparate treatment of taxpayers.

  2. See specific guidelines in IRM 1.11.2, Internal Management Documents System, Internal Revenue Manual (IRM) Process. Request for an IRM deviation must be submitted in writing and signed by the field director, following instructions from IRM 1.11.2.2.4(3). Any disclosure issues will be coordinated by the program owner. No deviations can begin until reviewed by the program owner and approved at the executive level. All requests must be submitted to the Submission Processing Headquarters IRM Coordinator.

Visual Pre-screening Process

  1. On February 4, 2019, Submission Processing (SP) implemented a visual pre-screening process for 1040-X to efficiently move work to Accounts Management (AM).

  2. Control Clerks visually pre-screen 1040-X returns looking for the following route-out criteria:

    • Carryback / Carryforward / Net Operating Loss (NOL)
      -- Taxpayer notates NOL, Carryback, Carryforward in the remarks
      -- Form 1045 is attached

    • CIS Image Returns

    • Decedent

    • Disabled Combat Veteran
      -- 6060-A or 6060-D Letter attached
      -- Taxpayer notates Disabled Vet / Combat Vet in the remarks
      -- Attached letter indicating Disabled Vet / Combat Vet

    • Identity (ID) Theft
      -- Form 14039 is attached
      -- Taxpayer notates ID Theft in the remarks

    • International
      -- Foreign address in the entity section

    • Premium Tax Credit
      -- Form 8962 is attached
      -- Line 6 is being increased / decreased and write-in reflects Advanced Premium Tax Credit (APTC) Repayment

    • Taxpayer Advocate Services (TAS)
      --"ICT/IVO" written at the top of the return

  3. Returns found with the above criteria are:

    1. Removed from batches

    2. Controlled with a TC 971/120 for the Where’s My Amended Return tool

    3. Routed to ICT

Controlling Cases on the Integrated Data Retrieval System (IDRS)

  1. Submission Processing will control all amended returns received in the 1040-X unit on the Integrated Data Retrieval System (IDRS) within five business days of receipt. The date a case is entered into BBTS will be counted as day one. The purpose of this initiative is to enhance the tracking and recording of inventory within Submission Processing (SP).

    Exception:

    CP Notices, Form W-7 returns, loose forms and MFT 35 adjustments do not have to be controlled on IDRS.

  2. Clerical staff controls all cases to the earliest received date.

  3. The group/team’s IDRS numbers used by the SP clerical staff to control 1040-X cases are listed below:

    Campus IDRS Number IDRS Number IDRS Number
    Austin 06224 06233 06238
    Fresno 10215 10216 10217
    Kansas City 09215 09216 09217
    Ogden 04119 04112  

    Note:

    As these are group numbers, the claims are not assigned to a specific tax examiner in Submission Processing. These are 1040-X claims controlled to the 1040-X area in SP. For cases open to the generic queue, see IRM 3.11.6.4.14. If you receive inquiries from other areas concerning controlled cases, refer the caller to the headquarter 1040-X analyst.

  4. If an amended return contains one of the following notations on the top of the form, use the following table to determine the action:

    Notation Action
    "ICT/IVO" Route to CIS/AM
    "Letter 6173," "Letter 6174," "Letter 6174-A," "Virtual Currency," or similar wording Route to CIS/AM
  5. If the case is controlled to another campus’ 1040-X unit, process your case following normal procedures.

  6. If the case is opened to someone other than a 1040-X employee or the generic queue, see IRM 3.11.6.4.14.

  7. If the case is controlled to the wrong taxpayer, MFT, or tax year, then close the incorrect base to MISC and work the case as uncontrolled.

  8. If the case has multiple control bases with the same received date and batch number, close all bases upon case completion.

  9. Correct other case control input errors using IAT ACTON before completing your case action. This includes incorrect IRS received dates and incorrect service center IDRS numbers.

  10. Process amended returns as follows:

    If the case is And the case will be Then
    Controlled to your campus’ generic queue
    1. Worked

    2. Routed or returned to the taxpayer

    3. Suspended

    1. xClaim will re-assign the case, with matching received dates, to your IDRS number then close the control base and issue a TC 971 AC 120 if missing.

    2. Change the control category to "MISC" and close the control base.

    3. Suspend the case by:

      • Reassigning the case to your IDRS number

      • Inputting the appropriate suspense activity then suspend the case

        Note:

        Follow local procedures for suspending and maintaining suspense files.

    Uncontrolled
    1. Worked

    2. Routed or returned to the taxpayer

    3. Suspended

    1. xClaim will generate a closed control base, based on your adjustment, and issue a TC 971 AC 120 using the return received date.

    2. Create a closed control base to your IDRS number and use:

      • "SPX-1040X" as the Activity

      • "MISC" as the control category

      • The received date of the amended return

      • Input a TC 971 AC 120

    3. Open a suspense case to yourself and use:

      • XRET as the control category

      • Appropriate activity for the suspense

      • The received date of the amended return

      • Input a TC 971 AC 120

      Note:

      Follow local procedures for suspending and maintaining suspense files.

    Note:

    Ensure all open controls associated with the case(s) that you are processing are closed. Associated cases are those open to your local 1040-X department and can be identified by batch ID number and/or received date.

  11. When xClaim is not available you must manually control/close the case.

  12. If the received date of the amended return is more than one year old, place a V after the received date: MMDDYYYYV.

  13. If the case is moving from an ITIN to an SSN, then the control base should be on the SSN. If the SSN has not been established, control to the ITIN.

Working Trail

  1. Leave a working/action trail in the left margin of Form 1040-X when:

    1. Detaching a form, schedule, or notice

    2. Preparing a form

    3. Routing a return

  2. Edit the following on the detached form, schedule, notice, or prepared form if not already present:

    1. Taxpayer's name

    2. Taxpayer's address

    3. Taxpayer Identification Number (TIN), (e.g., SSN, IRSN, ITIN)

    4. Received date

    5. Tax Year

    6. TE stamp

      Exception:

      Do not edit Personally Identifiable Information (PII) on detached forms that belong to different taxpayers.

  3. Use the following table when leaving a working/action trail:

    If Then
    Detaching a form, schedule, or notice from a return
    1. Edit the following in the lower left margin of Form 1040-X:

      1. Detached item description

      2. Routing destination of detachment

      3. Today’s date - MMDDYY or MMDDYYYY format

    2. Edit the following in the upper left margin of the detached form, schedule, or notice:

      1. Routing destination of detachment

      2. Today’s date - MMDDYY or MMDDYYYY format

    3. Edit the following in the lower left margin of the detached form, schedule, or notice:

      1. "Det. F1040-X" , "Detached from Form 1040-X" , or similar wording

      2. Routing destination of F1040-X

      3. Today’s date - MMDDYY or MMDDYYYY format

    Preparing a form/schedule
    1. Edit the following in the lower left margin of Form 1040-X:

      1. "Prep. (item description)" , "Prepared (item description)" , or similar wording

      2. Routing destination of prepared form

      3. Today’s date - MMDDYY or MMDDYYYY format

    2. Edit the following in the upper left margin of the prepared form/schedule:

      1. Routing destination of prepared form

      2. Today’s date - MMDDYY or MMDDYYYY format

    3. Edit the following in the lower left margin of the prepared form/schedule:

      1. "Prep. per F1040-X" , "Prepared per Form 1040-X" , or similar wording

      2. Routing destination of F1040-X

      3. Today’s date - MMDDYY or MMDDYYYY format

    Routing a return Edit the following in the upper left margin of the return:
    1. Routing destination

    2. Today’s date - MMDDYY or MMDDYYYY format

    Reminder:

    Include any working/action trails required by local procedures.

Loose Correspondence and Documents

  1. When associating correspondence or loose documents, those that became detached in error, with a previously posted adjustment or the original filing, use Form 9856 following local procedures.

  2. Documents cannot be associated with an electronic DLN. Research CC IMFOLI or CC TRDBV to determine if the original return was filed electronically. See Document 6209, Campus and File Location Codes for service center codes. If there is an electronic DLN input a TC 290 .00.

Related IRMs, Documents, Publications, and Websites

  1. Use the following IRMs when guidance is not provided within this IRM:

    • IRM 3.10.72-1, Routing Guide / Local Maildex

    • IRM 3.10.72-2, Correspondex C Letters - Routing Guide

    • IRM 3.10.72-3, Computer Paragraph CP Notices - Routing Guide

    • IRM 3.10.72-4, Miscellaneous Documents/Forms/Correspondence - Routing Guide

    • IRM 3.11.249.3.2.1, Document Locator Number (DLN)

    • IRM 3.12.179, Individual Master File (IMF) Unpostable Resolution

    • IRM 21.5.3-2, Examination Criteria (CAT-A) - General

    • IRM 21-5.3-3, Examination Criteria (CAT-A) - Credits

  2. Use Document 6209, IRS Processing Codes and Information, 1040 attachment guide, Tax Form and Instructions (accessible through the IRS Home Page), and Publication 17 when processing amended returns. These are valuable resources for obtaining additional information, resolving questions and completing math verification.

  3. Use the following websites when processing amended returns:

    • Correspondex Letters

    • IRS Disaster Assistance Program

    • USPS.com

    • Businesses Qualified Vehicles Acquired after 12-31-2009

    • IRS Certified Professional Employer Organizations Public Listings

  4. This IRM and the resources in this subsection do not cover all scenarios. See your lead when clarification is needed.

IRS Employees and Covered Relationships

  1. IRS employees can be identified from the IRS-EMP-CD on CC TXMOD and on CC IMFOLT. There are special procedures that you must follow to protect the taxpayer employee, as well as to protect yourself.

  2. If you access an account of an IRS employee that you do not know, work the case and see (4) below.

  3. If you access an account of an IRS employee that you do know, or if you access an account of someone that falls under a covered relationship such as family members, friends, or neighbors, refer the case to your lead or manager and see (4) below.

  4. Completing Form 11377-E, Taxpayer Data Access, is voluntary but highly recommended. The purpose is to document the reason(s) that the tax return and/or information on IDRS was accessed when the case was not assigned directly to you.

Integrated Data Retrieval System (IDRS) Access

  1. While working or assigning cases, SP employees may encounter modules that are blocked on IDRS. These modules will be identified by an IDRS security violation message, Unauthorized to Access This Account. Forward the case to your manager. Managers will notify the local Planning & Analysis staff who will scan the case and send encrypted information to the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ mailbox requesting access to the account. Managers will retain the original case in a file awaiting access that can take up to five business days. Once notified that access has been granted, the case can be worked following applicable procedures.

Preliminary Review of Form 1040-X/Amended Return

  1. Before an adjustment can be input or routed to another function, check the return for the following elements:

    • Taxpayer Identification Number (TIN)

    • Tax period

    • Received date

    • Control base

    • PECF requests

    • Discovered remittance

    • TC 150 posted

Taxpayer Identification Number (TIN)

  1. In order to process a return, the taxpayer must have a Taxpayer Identification Number (TIN) such as a Social Security Number (SSN) or IRS Individual Taxpayer Identification Number (ITIN).

  2. The IRS uses four different types of TINs when processing Individual Master File (IMF) Taxpayer accounts. The following table contains the type of TINs and their format:

    Taxpayer Identification Number (TIN) Type Format
    Social Security Number (SSN) - If followed by an asterisk (*) it is a temporary or "invalid" number. xxx-xx-xxxx
    Individual Taxpayer Identification Number (ITIN) - This number is assigned by the Austin campus ITIN Operation as a result of an accepted W-7 / W-7SP application. 9xx-NN-xxxx
    See note below.
    Adoption Taxpayer Identification Number - This number is assigned by the Austin campus as a result of an accepted W-7A application. 9xx-93-xxxx
    (always "93" for 4th and 5th digits)
    Internal Revenue Service Number (IRSN) - This number is assigned by the IRS. See note below. 9xx-XX-xxxx

    Note:

    The fourth and fifth digits of a valid ITIN range are:
    - 50 through 65
    - 70 through 88
    - 90 through 92
    - 94 through 99

    Note:

    The fourth and fifth digits of an IRSN are the IRS Service Center code. See IRM 3.13.5.23, Internal Revenue Service Number (IRSN) Format.

  3. For ITINs, see IRM 3.11.6.3.1.1.

  4. If the Primary TIN or secondary TIN, when married filing jointly, is missing, incorrect, or illegible, research per IRM 3.11.6.7.1. If found, edit to the appropriate field on the amended return.

  5. If you have exhausted all resources and are still unable to determine the P-TIN and/or S-TIN, correspond per IRM 3.11.6.11 using Form 8009-A, box 7 using fill-in: Your Social Security number or your spouse’s Social Security number is missing or does not show nine digits. Please provide the correct number. (Do not input TC 971 AC 270 if unable to determine primary TIN).

  6. Refer as CIS/AM, if:

    1. The taxpayer makes changes to the primary or secondary taxpayer's TIN.

    2. The primary or secondary TIN is invalid.

    3. The primary or secondary taxpayer is changing from an ITIN/IRSN to an SSN.

    4. The primary or secondary taxpayer’s account is set up on the invalid segment of Master File (which requires an asterisk after the TIN (000-00-0000*). A pound sign after the TIN (000-00-0000#) is an indication of a newly assigned TIN. Do not treat as an invalid TIN.

      Exception:

      If the filing status is MFS (FS 3), the spouse's TIN may show an asterisk after the TIN. This should not be considered an invalid TIN and can be worked as normal.

    5. A filing status change to Married Filing Jointly (MFJ) and both taxpayers have already filed.

    6. The case involves merged (re-sequenced) account and an update to CC DDBCK or CC DUPED is required.

      Note:

      A merged (resequenced) account will have a transaction code 011, 013, 040 or 041 on CC ENMOD.

    7. Mixed entity cases where more than one taxpayer has attempted to file under the same TIN and:
      • It is not possible to verify the correct TIN through research, or
      • Research verifies that both individuals have used the TIN in other tax years, or
      • CC INOLES shows that both taxpayers have been listed under this TIN

    8. Scrambled SSN cases where CC INOLES has an entry beside the Scrambled SSN literal except blank, 00, 08, 21, or 22.

  7. If the taxpayer is filing MFJ and there is no TC 150 posted for the primary's TIN, research the secondary's TIN for a TC 150. TC 594 may be present. See IRM 3.11.6.6.1.

Individual Taxpayer Identification Number (ITIN) Status
  1. If dependents or the following credits are increasing and they are based on an ITIN, CC INOLES must be researched to determine the current status (as of today’s date) of the ITIN(s). Research applies to the individual(s) claimed, the primary taxpayer, and the secondary taxpayer (if applicable) on all credits except the Child and Dependent Care Credit for dependents. For the Child and Dependent Care Credit for dependents, research only applies to the individual(s) claimed.

    • Child Tax Credit (CTC)

    • Additional Child Tax Credit (ACTC)

    • Credit for Other Dependents (ODC)

    • Education Credits
      -- Lifetime Learning Credit (LLC)
      -- American Opportunity Tax Credit (AOTC)

    • Dependents

    • Child and Dependent Care Credit

  2. There are three status available for ITINs:

    • A - Active

    • I - Inactive

    • U - Unvalidated

  3. If any ITIN is unvalidated, route to CIS/AM.

  4. PATH Act requirements may apply, see IRM 3.11.6.9.3.

  5. For any inactive ITIN(s), the dependent or credit increases are not allowed.

  6. Use this table to determine processing based on the ITIN status:

    ITIN Status And Then
    All ITINs are Active  
    1. If a math error is present, follow math error response procedures to resolve the math error for any associated active ITIN.

    2. If no math error, continue processing.

    One or more ITIN(s) is Inactive
    1. The entire return is unprocessable because of an increase to a credit that is based on an inactive ITIN

    2. Some issues are processable

    1. Send the entire return back to the taxpayer using Form 8009-A with fill-in: We are unable to process your Form 1040-X, Amended U.S. Individual Income Tax Return. Please submit a completed Form W-7 application with supporting document(s) to renew the inactive/expired individual taxpayer identification number (ITIN) listed on your return.

    2. Process any allowable adjustment unrelated to the inactive ITIN(s). If the allowable adjustment changes the taxpayer’s expected refund/balance due, send a Form 8009-A with fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return is not being returned with this letter. Since there was one or more inactive individual taxpayer identification number (ITIN), this caused a change to your return. Please submit a completed Form W-7 application with supporting document(s) to renew the inactive/expired ITIN(s) listed on your return.

  7. If a -R freeze is present on a module and the account will remain in a credit balance after your adjustment, use a hold code 1.

  8. When the adjustment changes the expected refund or balance due and:

    Reason for change Action
    Inactive ITIN Process per paragraph (5) and (6) above.
    PATH Act disallowance Send a 105C/106C. See IRM 3.11.6.11.3 and input the TC 971 AC 113.
    Math error(s) for issues other than the inactive or unvalidated ITIN Process following IRM 3.11.6.7.4.

Tax Period

  1. Amended returns must be for a specific tax period. When the tax period is missing and you cannot determine from return information or attachments, research IDRS for matching tax data.

  2. If the tax period can be determined, edit the tax period on the front of the return above the Entity section in YYMM or YYYYMM format or mark the appropriate box, even when routing document to another function.

  3. If you cannot determine the tax period through IDRS research, correspond unless return is being routed to another function. Correspond per IRM 3.11.6.11 using Form 8009-A, box 7 and fill-in: Please provide the tax period covered by your Form 1040-X, Amended U.S. Individual Income Tax Return.

    Note:

    Do not input TC 971 AC 270.

  4. If the taxpayer tries to submit an amended return for multiple tax periods on a single amended return, send the return back to the taxpayer. Use Form 8009-A box 7 with fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, included income or tax for more than one tax year. You must file a separate return for each year. Input a TC 971 AC 270 on the tax year of your assigned case.

Received Date

  1. Every return should be stamped with a received date stamp. An Official Received Date Stamp must consist of no less than:

    • The word "Received"

    • Month (alpha or numeric)

    • Day - (for example, can be "1" or "01" )

    • Year - four digits

    • "Area Office (AO)" , "Lockbox (LB)" , Campus, "Field Office," "Taxpayer Assistance (TAC)" plus the location city, or functional area within one of these sites (e.g., Compliance Service Collections Operation (CSCO), Exam, Information and Communication Technology (ICT), Collection Information System (CIS), Accounts Management (AM), etc.)

      Note:

      Not all IRS offices are designated places for filing, and not all IRS employees are authorized to accept a tax return for processing. If a return contains a received date stamp from other than a Taxpayer Assistance Center (TAC), Lockbox, or IRS campus (Compliance, Accounts Management (AM), or Submission Processing (SP)), circle out the invalid received date and edit the correct received date according to instructions in paragraph 4 below. For example, returns received by Taxpayer Advocate Service (TAS) or the IRS Office of Chief Counsel are not properly filed and a received date by that office is not the official "IRS Received Date."

  2. If the Received Date stamp is missing from the front page, or illegible, but is found elsewhere in the return packet, edit the date to the front of the return in MMDDYY or MMDDYYYY format in the blank space above Line 1 of the Form 1040-X.

  3. Honor received dates that are edited in:

    • Green ink on current year returns received with payments as the return received date to be used for processing

    • Red ink located in the center portion of the amended return

  4. If the Received Date stamp is not found or is obviously incorrect, edit the received date based on the order of precedence below in the same format and location as stated in (2) above.

    1. Latest postmark or designated private delivery service mark on the envelope

    2. IRS Scamps date

    3. Signature Date (only if the return was signed in the current year)

    4. Current date

  5. When there are multiple received dates stamped and/or edited on the return and you are adjusting or routing an amended return, use the earliest received date. When dealing with replies to correspondence, see IRM 3.11.6.11.1, IRM 3.11.6.11.2, or IRM 3.11.6.4.4.

  6. Input the received date of the return you are processing as the received date on IDRS. If the received date of the return does not match the established control base, see IRM 3.11.6.2.5.

    Exception:

    See IRM 3.11.6.4.4 for Statute returns.

  7. OVERRIDE CODE - An Override Code is required when the IRS Received Date is over one year old and on cases when the statute has expired.

    1. R - Allows IRS Received Date to be older than a year in the past.

    2. S - Allows current date and the Refund Statute Control Date (RFSCD) to be later than the Refund Statue Expiration Date (RSED). Refer to IRM 3.11.6.4.4.

  8. When controlling cases on IDRS, if the received date of the amended return is more than one year old, see IRM 3.11.6.2.5.

Determining Timeliness
  1. Always use the received date when determining timeliness of the claim. If the received date is missing, see IRM 3.11.6.3.3. When the postmark is missing or illegible consider any return received within ≡ ≡ ≡ ≡ ≡ ≡ ≡ calendar days of the due date of the return timely.

  2. April 16 is Emancipation Day in Washington D.C., a legal holiday. This may affect taxpayers throughout the United States when a return is considered to be timely filed. See also IRM 25.6.1.6.18, List of Legal Holidays.

    1. When April 15 falls on a Sunday, the following Monday is generally the day on which returns are timely filed; however, in Washington D.C., April 16 is Emancipation Day, a legal holiday. All taxpayers have until Tuesday April 17 to file a timely return.

    2. When April 16 falls on a Saturday, Friday April 15 is considered the holiday. All taxpayers have until Monday April 18 to file a timely return due to the Emancipation Day holiday.

    3. When April 16 falls on a Sunday, Monday April 17 is the date of the Emancipation Day holiday. All taxpayers have until Tuesday April 18 to file a timely tax return due to the Emancipation Day holiday

  3. Use the following table to determine if the claim is considered to be timely filed:

    If April 15 falls on Then the postmark must be
    Friday April 18 or earlier
    Saturday April 18 or earlier
    Sunday April 17 or earlier
  4. These timeliness instructions affect the process of Statute returns, see IRM 3.11.6.4.4.1; Superseding returns, see IRM 3.11.6.3.3.2; and returns involving PATH Act Credits, see IRM 3.11.6.9.3.

Superseding Returns
  1. The due date of a calendar year individual income tax return is April 15. A fiscal year individual income tax return is due the fifteenth day of the fourth month following the close of the fiscal year.

    1. An amended (Form 1040-X) or corrected (duplicate) return filed on or before the due date or the extended due date is a superseding return.

    2. An amended (Form 1040-X) postmarked on or before the due date or extended due date, is processed as a superseding return.

    Note:

    These amended returns are processed as any other amended return is processed.

  2. If the superseding return has an unpaid net balance due increase on the module, route to CIS/AM.

  3. If a superseding return is received as a refund claim due to a tax increase and credit increase, but the credit(s) must be disallowed, partially disallowed, or not considered, leaving the account with a balance due instead of a refund, do not adjust the account. Route to CIS/AM.

Amended Claims Date
  1. The Amended Claims Date is a REQ54 field that is used by Masterfile to apply the 45-day interest free period.

    1. Use the IRS Received Date as the Amended Claims Date.

    2. For suspended correspondence, the Amended Claims Date is the received date of the taxpayer’s reply that allows you to process the return.

    3. An Amended Claims Date is required on every adjustment unless specifically noted otherwise.

  2. Do not use an Amended Claims Date when processing CP 08, CP 09, CP 27 or Math Error Corrections (only when the math error was set on the original return).

  3. See IRM 3.11.6.3.3 for received date determination.

Processing Presidential Election Campaign Fund (PECF) Requests

  1. The taxpayer may request that $3 go to the Presidential Election Campaign Fund (PECF) by checking one or both boxes on page 2 of Form 1040-X.

  2. A PECF request can only be processed for the current tax year and one tax year prior; and if there is a tax change on Line 11, Total tax, of Form 1040-X. Research RTVUE to verify the taxpayer(s) original PECF election. If the amended return and original return has the same election, do not process as a new election.

    Exception:

    Do not process a PECF request on any return that is being routed out.

  3. If the return meets correspondence criteria and an adjustment will not be input, do not process the PECF request. Correspond as required.

  4. To process a PECF request, edit the following items to a blank Form 1040-X as a "Dummy PECF" return.

    1. "Dummy PECF" in the top margin

    2. Tax period

    3. Primary name control

    4. Primary SSN and Secondary SSN

    5. Filing Status Code box checked

    6. "5" to the right of filing status just above Column C if one PECF box is checked

    7. "6" to the right of filing status just above Column C if two PECF boxes are checked

    8. Received date in MMDDYY format in the center portion

    9. "O/S" on the signature line to indicate the original Form 1040-X was signed

    10. Your employee number/stamp in the upper left margin (if required by local procedure)

  5. Edit "PECF Prep" in the left margin of Form 1040-X then continue processing the return.

  6. Route "Dummy PECF" to Batching/ISRP per local procedures.

Discovered Remittances

  1. A discovered remittance is any form of payment (cash, check, money order, stamp, jewelry, etc.) other than credit card that the taxpayer may send in.

    Note:

    When a US Treasury check is returned to the IRS, it is not considered a discovered remittance. Edit "Void" onto the check if it does not already have it. Forward the check and a copy of the return to the Refund Inquiry unit and continue processing the return.

    Exception:

    If the US Treasury check is made payable to the IRS this should be returned to Receipt and Control for proper disposition.

  2. When a remittance is discovered:

    1. If a Form 1040-V, Payment Voucher is attached, edit the received date and your TE number on the voucher then turn in the voucher and the remittance and continue processing the return.

    2. If a payment voucher is not attached or a loose remittance is discovered, complete Form 3244. Turn in the remittance with the Form 3244, following local procedures then continue processing your return.

  3. If the taxpayer sends in a credit card or credit card information, refer the case to the Manager or Lead for a 3956C letter to be issued.

  4. For additional information on discovered remittances, see IRM 3.8.46.1, Discovered Remittances.

Sorting, Routing, and Priority Processing

  1. Before adjustment input, identify all documents requiring other actions. Research IDRS for transactions that require routing to another function.

  2. All cases being routed should be closed with category MISC unless specific instructions are provided.

  3. Keep all related tax years together if possible.

    Exception:

    Do not route non-statute year returns to the Statute unit.

  4. Notate on Form 1040-X any action taken, such as "routing to Statute," "detached Form 2848 to Centralized Authorization File (CAF)," etc.

  5. If the TC 150 has not posted, see IRM 3.11.6.6.1.

  6. Identify all possible route out criteria, then route to the highest priority as stated in paragraph 7 below.

  7. The priority order for routing is as follows, specific IRM references take precedence over these general instructions:

    1. Disaster Claims

    2. Carryback or Carryforward Claims (CIS/AM)

    3. ID Theft

    4. Statute

    5. Taxpayer Advocate Service (TAS)

    6. Exam (open AIMS cases)

    7. Frivolous

    8. Criminal Investigation (CI) Scheme Development Center (SDC)

    9. Integrity and Verification Operation (IVO)

    10. Category A (CAT-A)

    11. Underreporter (AUR/URP)

    12. International

    13. Premium Tax Credit (PTCX)

    14. Adjustment Function Criteria (CIS/AM) or controlled to an AM employee

    15. Open cases (open to an employee other than an area listed above)

    16. All other claims

  8. See IRM 3.11.6.4.25.1 for TC 971 Action Codes and routing destination for specific items.

  9. See IRM 3.11.6.3.4 for editing instructions for ISRP input of "Dummy PECF" instructions.

  10. When routing screened returns follow specific IRM instructions and local procedures.

Disaster Claims

  1. A qualified disaster loss is an individual’s casualty or theft loss of personal-use property that is attributable to a major disaster declared by the President under section 401 of the Stafford Act in 2016, as well as from Hurricane Harvey, Tropical Storm Harvey, Hurricane Irma, Hurricane Maria, or the 2017 California Wildfires. Verify the taxpayer had a loss in a qualified disaster area via the IRS Disaster Assistance Program.

  2. The Disaster Tax Relief and Airway Extension Act of 2017, the Tax Cuts and Jobs Act (TCJA), and the Bipartisan Budget Act of 2018 provide special rules for some qualified disaster losses. For a list of the qualifying disasters, see the IRS Disaster Assistance Program. The special rules include:

    • The $100 limitation per casualty increased to $500

    • The 10 percent of AGI limit does not apply

    • The standard deduction is increased by the net qualified disaster loss

    A qualified disaster loss is a personal casualty loss caused by:

    • Hurricane Harvey or Tropical Storm Harvey in the Hurricane Harvey disaster area on or after August 23, 2017

    • Hurricane Irma in the Hurricane Irma disaster area on or after September 4, 2017

    • Hurricane Maria in the Hurricane Maria disaster area on or after September 16, 2017

    • The California Wildfires in the California Wildfires disaster area on or after October 8, 2017

    • A federally declared disaster in a disaster area during calendar year 2016

  3. For tax years 2018 through 2025, an individual’s loss of personal-use property is deductible only if the loss is attributable to a federally declared disaster.

    Exception:

    Personal casualty or theft loss can only be deducted to the extent of casualty gains.

  4. Taxpayers who live in a Federal "Declaration of Emergency or Major disaster" area may file disaster claims. The IRS may place a -O/-S freeze on the module for the zip codes of the affected areas to indicate the taxpayer resides in a disaster area. Disaster claims are identified by either:

    • -O and/or -S freeze on the module

    • Taxpayer mentions the loss is attributable to a federally declared disaster

  5. A disaster claim is filed using Form 4684, Casualties and Thefts, and is reported in addition to the standard deduction on either:

    • Schedule A, line 20 (for 2017 and prior)

    • Schedule A, line 15 (for 2018 through 2025)

    • A deduction to income on Form 1040

  6. Follow normal processing procedures if the return is not a disaster claim as defined in (1) or (2) above.

    Note:

    A non-disaster claim is a casualty loss that is not attributable to a federally declared disaster.

  7. Claims that have CAT-A criteria, see IRM 3.11.6.4.9.1.

  8. If a disaster claim has SP 1040-X route-out criteria (i.e., CAT-A, Statutes, Underreporter, CIS/AM, etc.), separate the disaster claim from the non-disaster returns being routed:

    • For disaster cases routed to CIS/AM, edit DSTR as the working trail. If the disaster claim is related to Hurricanes Harvey, Irma, Maria, or the California wildfires of 2017 use KATX as the working trail.

    • For all other routing, edit DSTR/(routing destination) as a working trail.

    Note:

    Expedite routing, hand walking whenever possible, to the forwarding area, following local procedures.

  9. Form 4684 is required for taxpayers filing a disaster claim. Correspond using a 324C letter for the following:

    • The Form 4684 is missing.

    • The disaster claim is missing a signature (refund or balance due return). Suspend the return until you secure a signature only on refund returns.
      - If a reply is received within 45 days, continue processing the return and input under Blocking Series 05.
      - If no reply is received after 45 days, send a Letter 916C, paragraphs B, F, R, 1, and 4. Input a TC 290 .00 to file the return.

    • The federally declared disaster designation is not listed in Section A(1) of Form 4684 (for 2018 through 2025). For 2017 and prior, there is no area to list the FEMA number.

  10. Do not mail the return back to the taxpayer in a disaster area.

Processing a Disaster Claim
  1. If a TC 150 has not posted on a disaster claim, expedite to CIS/AM per local procedure.

  2. Taxpayers may claim a disaster loss in the year the disaster loss was sustained or may elect to claim a disaster loss in the tax year preceding the disaster year.

    If Then
    The loss is claimed for the year of the disaster year The return must be filed within three years of the due date, without extensions.
    The loss is claimed for the year preceding the disaster The election must be made on or before 6 months after the due date for filing your original return (without extensions) for the disaster year.

    Example:

    A disaster occurs in August 2019, and the loss is sustained in 2019. The taxpayer can elect to timely file the disaster loss for 2018 until October 15, 2020. Alternatively, the taxpayer could choose to file the loss for the 2019 tax year and has until April 15, 2023 to claim the loss via an amended return.

  3. If a disaster claim is filed late, per (2) above, expedite to CIS/AM.

  4. To process a Disaster claim, check CC TXMOD for an -O/-S Freeze on the account.

    If And Then
    -O/-S freeze code is present   Process the claim.
    -O/S freeze code is not present
    1. Balance due

    2. Refund

    1. Expedite to CIS/AM per local procedure.

    2. Process the claim.

    Note:

    If the taxpayer requests the refund be issued to a name and/or address other than the one shown on Masterfile (e.g., temporary address, taxpayer representative, in care of name and/or address), route to CIS/AM for a manual refund.

  5. If processing a Disaster claim and Priority Code 8 is required, expedite to CIS/AM.

  6. Qualifying individuals may be identified by a posted TC 971 AC 086 and/or 087 on the eligible modules. Qualified individuals include those individuals that lived in a Federally Declared Disaster area on or near the time of the disaster.

  7. Below are procedures for processing these claims:

    1. Review the claim to determine if the taxpayer is claiming a Presidential declared disaster loss for personal use property during tax year 2016 or 2017. If other disaster or business property loss, follow normal procedures.

    2. Is Form 4684 attached? If not correspond with a 324C letter. If attached, determine if the taxpayer used the modified computation. If the taxpayer qualified for the modified computation but did not take advantage, edit the amount shown on Form 4684, Line 11 from $100 to $500 and change line 17 to $0.

    3. Manually calculate itemized deductions shown on Schedule A. Do not use the Schedule A worksheet found in the xClaim tool. Enter the total itemized deduction in the deduction field (line 2) of the xClaim tool.

    4. If the total itemized deduction (Schedule A, Line 29 for 2017 and prior, and Line 17 for 2018) is less than the standard deduction (see IRM 3.11.6.10.1.2) plus the net hurricane loss (Form 4684, Line 18) the taxpayer is entitled to an increased standard deduction.

      Example:

      The total itemized deductions shown on Schedule A is $20,000. The Standard deduction is $12,600 plus a $15,000 loss reported on Form 4684. The taxpayer is entitled to a standard deduction of $27,600.

    5. Use RC 076 if adjusting Schedule A and change the Category Code to "KATX" .

    6. Use RC 092 if adjusting the Standard Deduction and change the Category Code to "KATX" .

    7. Send a Form 8009-A if changing the taxpayer refund amount.

    • If RC 076 was used, send fill-in; Due to the Disaster Tax Relief and Airport and Airway Extension Act of 2017, enacted September 29, 2017, we changed your total itemized deductions. On your Schedule A, Itemized Deductions, you showed $XXX for your Casualty and Theft Losses; however, the correct amount is $XXX. For more information about the legislation, visit our website at www.irs.gov.

    • If RC 092 was used, send fill-in: Due to the Disaster Tax Relief and Airport and Airway Extension Act of 2017, enacted September 29, 2017, you are entitled to an increased standard deduction which includes your net personal casualty loss. The standard deduction plus the casualty loss was more than your itemized deductions. For more information about the legislation, visit our website at www.irs.gov.

Carryback/Carryforward

  1. A taxpayer who has an overpayment of tax as a result of a Net Operating Loss (NOL), Net Capital Loss (NCL), Unused Credits, or a Claim-of-Right adjustment can file an application or claim for an adjustment or refund. Any loss remaining after applying the NOL to preceding years lowers taxes in a later year. Examples of credits, other than those shown on Form 3800, General Business Credits, for carryback/carryforward are listed in the table below. For General Business Credits, the carryback period is one year and the carryforward period is 20 years.:

    Other Credits Carry Back Carry Forward
    Mortgage Interest
    Form 8396
    No 3 years
    Adoption Credit
    Form 8839
    No 5 years
    District of Columbia First-Time Homebuyer Credit (DC Residents Only)
    Form 8859
    No Unlimited (until used)
    Foreign Tax Credit - Individuals
    Form 1116
    1 year 10 years
  2. A NOL is created when certain deductions exceed income from all sources. For 2017 and prior, these deductions must relate to a trade or business, work as an employee, or casualty or theft. For 2018 and after, a NOL deduction for work as an employee is no longer allowed. For 2018 and after, only losses incurred in the trade or business of farming and losses incurred by non-life insurance companies are eligible for carryback.

    Note:

    Do not treat as a Carryback/Carryforward (CB/CF) return unless the conditions in (2) are met (e.g., the taxpayer may mark the carryback box of Form 1040-X in error).

  3. ALL Carryback/Carryforward (CB/CF) claims are to be expedited to AM. Follow any local procedures for separating CB/CF claims from other CIS/AM issues.

    Note:

    If the case is 60 days or less before the ASED expires, or if the ASED has expired, prepare a Form 3210 and notate CB/CF/Statute Imminent in the remarks area. Leave a CC ACTON history item "STAT IMNT" .

  4. The taxpayer may elect to forgo the carryback period for any tax year and carry the entire NOL forward. Route all elections to forgo the carryback period to CB/CF unless the election has already been made (check TRDBV for e-filed returns look for the literal ELECTION).

  5. Do not treat the following claims as CB/CF claims:

    • The term "carryforward" can be used when identifying certain credits that can apply to future tax years. Since these are not restricted interest claims they are not CB/CF claims.

    • Schedule D loss that exceeds the $3,000 loss limit. Taxpayers are entitled to "roll-over" or "carryforward" any Schedule D loss that is greater than $3,000. Process these cases with RC 013.

    • Carryover of an IRA.

    • Schedule A, Itemized Deductions, with an entry in the Gifts to Charity section on "Carryover from prior year." For 2017 and prior, this is line 18, and for 2018, line 13.

  6. Indications that a taxpayer is trying to take a loss are:

    • An attached 1040 has a change on Line 21, Other Income, (2017 and prior) related to a NOL. For 2018, Line 21, Other income, is on Schedule 1, Additional Income and Adjustments to Income.

    • The carryback of a net Section 1256 contract loss. Treat these as a carryback claim if the taxpayer attaches Form 6781, Gains and Losses from Section 1256 Contracts and Straddles, with box D checked or if there is any mention these losses are being carried back.

    • A claim of right adjustment under IRC 1341(b)(1) or an attached worksheet, which mentions Regulation 5.6.411.1(d).

      Note:

      A Claim of Right Adjustment can be entered on line 2 or line 15 of the 1040-X or Schedule A line 28 (2017 and prior) or line 16 (2018).

    • Form 1045, Application for Tentative Refund, and/or supporting schedules (Schedule A-NOL, Schedule BNOL Carryover, or Schedule D) are attached.

    • Taxpayer checks the carryback box of Form 1040-X or notates NOL, Carryback, Carryforward, or Carryover on the return or in the Form 1040-X, Part III, Explanation of Changes.

    • Schedules K-1 from a partnership, S corporation, estate, trust, or similar wording is attached for the year of the loss.

      Reminder:

      If none of the CB/CF issues are changing do not route to CB/CF (e.g., A NOL is indicated on Line 21 of Schedule 1 but is not changing).

Identity Theft

  1. Identity (ID) Theft can be indicated by the taxpayer’s explanation, by markers on the account, or by suspicious changes identified by tax examiners.

  2. Accounts the IRS has identified as ID Theft contain one of the following indicators. If one of the following indicators is found, see paragraph 3 below and then paragraph 7.

    • CC ENMOD, IMFOL, or TXMOD: TC 971 with AC 506, 522 (with the literals UNWORK or IRSID), or 524 (if the 1040X is for a tax year after the date of death). See paragraph 3 below for additional information.

      Note:

      The Secondary Date (SECONDARY-DT>) field of one of the above indicators will reflect the tax year affected by identity theft. If the tax period in question matches the year of the Secondary Date, see paragraph 3 below and then paragraph 7.

      Exception:

      AC 524 does not have a SECONDARY-DT field. AC 524 is an identity theft indicator used to lock the account of deceased taxpayers. It prevents a deceased taxpayer’s TIN (SSN or ITIN) from being used as the primary, secondary, or dependent TIN on a current or subsequent year federal income tax return. The TC 971 AC 524 indicator is applied systemically to the account and is effective the following year after the date of death.

      Example:

      Taxpayer’s date of death is 6/03/2017. A return for TY 2017 will post but a return for TY 2018 will not be allowed to post.

    • CC TXMOD/IMFOLT: TC 971 AC 111.

    • CC IMFOLI: MFT 32 is indicated for the Tax Year and No TC 150 is present on MFT 30. See paragraph 7 below.

    • CC TXMOD/IMFOLT: Unpostable TC 150 is present with either a TC 971 AC 121 or TC 971 AC 124.

    Note:

    The ID Theft literal on CC ENMOD, CC IMFOLE, or other TC 971 Action Codes should not be used as an ID Theft indicator.

  3. Verify ID Theft indicators have not been reversed prior to routing. If a TC 972 is present reversing the ID Theft indicator, do not route the return unless there are additional indicators present.

  4. A taxpayer can self-identify as a victim of ID Theft by:

    • Stating in the Explanation of Changes on Form 1040-X or a separate statement

    • Completing Form 14039, Identity Theft Affidavit

    • Responding to IRS correspondence related to ID Theft

  5. If the taxpayer indicates only their dependent is a victim of Identity Theft, copy the statement, Form 14039, a copy of the 1040-X, and any supporting documentation relating to the ID theft and route to CIS/AM.

  6. Tax Examiners may identify suspected ID Theft when the return does not master file verify and when certain account changes seem suspicious such as large, unusual or questionable line item changes. When this occurs use the following research steps to aid in determining if the return should be routed as ID Theft:

    1. Use CC RTVUE to verify:
      - Address for the first return(s) filed
      - Dependents
      - Type of Income
      - Filing Status
      - Schedules and Forms filed

    2. Use CC TRDBV to verify:
      - Significant changes in the filing history
      - Occupation
      - Requested method of refund payment
      - Tax Preparer
      - Multiple attempts to file a rejected return

    3. Use CC DDBCK to verify:
      - Dependents and/or credits claimed on the original return

    4. Use CC IMFOLI to verify:
      - Number of years the TIN has been used
      - Filing status changes
      - Method of filing: paper or e-file

    5. Use CC IRPTR to verify:
      - Comparative review of reported income and payor information
      - Previous and current employer
      - Previous address

    Reminder:

    Before routing as ID Theft you must have multiple suspicious changes between the original filing and the amended filing.

  7. Once a return is identified as being an ID Theft return:

    If Then
    Form 1040-X Route to CIS/AM, notating ID Theft
    Form 1040 series
    • In the upper left hand corner of the return notate PAO (Process as Original)

    • Circle out any notation that suggests the return was previously filed

    • Route to Batching

    Form 1040-X with Form 1040
    1. If a TC 150 is posted (or pending):

      1. Move the Form 1040-X to the front

      2. Route to CIS/AM with working trail "ID Theft"

    2. If no TC 150 is posted or pending:

      1. "X" Form 1040-X and move the Form 1040 to the front

      2. Edit PAO in the upper left-hand corner of the return

      3. Circle out any notation that suggests the return was previously filed

      4. Route to Batching

    Undeliverable Route to Entity
    Statute returns Route the return to IDTVA Statute:
    • Austin - 6539 AUSC

    • Fresno - I-2300 FSC

    • Kansas City - MS 6507 C2 KCSC

    • Ogden - Route to Kansas City address, MS 6507 C2 KCSC

Statute Clearance

  1. Beginning January 1, 2020 all statute year returns (TY 2016 and prior) must be cleared by Statute prior to processing. If the case is not stamped with an indication it has been reviewed or the stamp is more than 89 days old (from today) it should be routed to Statute.

  2. If the case is a Substitute for Return (SFR), see IRM 3.11.6.4.18.

  3. If research of the return or the account indicates Identity (ID)Theft, forward to IDTVA. See IRM 3.11.6.4.3. Possible ID Theft indicators include:

    • Form 14039, Identity Theft Affidavit, or police report

    • Identity Theft written on the return or in a statement

    • Form 8948, Preparer Explanation for Not Filing Electronically, stating MeF reject because primary or secondary TIN was previously used

    • TC 971 AC 506, 522 (with the literals UNWORK or IRSID), 524 (if the 1040X is for a tax year after the date of death)

    • Open control to IDTVA

  4. If the assigned tax account is on retention, use CC IMFOLB to restore the module prior to sending to Statute.

  5. When there is no TC 150 posted on the account for a statute year return, follow the procedures in the table below:

      If Then
    1. Statute year Form 1040 with no Form 1040-X attached Route to Statute Unit for clearance. Input TC 971/014.

    Exception:

    If the return is stamped "statute cleared" send to Batching to be processed as an original. See IRM 3.11.6.6.4(2)a.

    2. Statute year Form 1040-X, an original Form 1040 or an "As Amended" Form 1040 is attached Follow the procedures in IRM 3.11.6.6.3 paragraph (5) except route to Statute Unit for clearance. Input TC 971 AC 014.

    Exception:

    If the return is stamped "statute cleared" send to Batching to be processed as an original.

    3. Statute year Form 1040-X Send to Statute Unit for clearance. See IRM 3.11.6.6.2. Convert Form 1040-X to a Form 1040 or Form 6114. Input TC 971 AC 014 and CC ACTON history of "X21502STAT."

    Exception:

    If the return is stamped "statute cleared" send to Batching to be processed as an original.

  6. If a Form 1040 is received in the 1040-X unit and the Form 1040 is stamped Statute Cleared, research IDRS for a TC 150. If a TC 150 has posted, determine if it is a duplicate return or an amended return. If the return is a duplicate, follow IRM 3.11.6.6.4. If the return is an amended return, process per normal Statute procedures.

Processing Statute Cases
  1. After a return has been cleared by Statute, use the following guidelines when processing a statute year case:

    1. Open case controls with a category of ST04 or -X04 meeting SP processing criteria should be worked by placing the control base in "B" status and upon case completion place the control base back in "A" status.

    2. If instructions are provided by Statutes, refer the claim to your lead for guidance in processing the claim.

    3. Statute cases not meeting SP criteria should be expedited to the appropriate function per local procedures.

    4. When verifying the RSED and the received date is not timely, check the postmark. If the amended return is postmarked on or before the RSED, consider it timely for a refund.

    5. When verifying the ASED use today’s date.

  2. If the assigned tax account is on retention, use CC IMFOLB to restore the module. Before adjusting or corresponding on the account, you must suspend the case, using RETREG as the activity, for 21 days, following local procedures, to allow the TC 370 to post. If the TC 370 has not posted when the suspense period expires, then route to CIS/AM.

  3. Follow the procedures below to determine if the case should be routed.

      If And Then
    1. The case is within 60 days prior to the ASED The case meets CB/CF criteria
    1. Prepare a Form 3210 and notate "CB/CF/Statute Imminent" in the remarks area.

    2. Use CC ACTON to leave the history item "Statute Imminent or SI" on CC TXMOD.

    3. Expedite/hand walk to CIS/AM per IRM 3.11.6.4.2.

    2. The case is within 90 days of the ASED or the ASED is expired The case has a total tax increase or a refundable credit decrease

    Exception:

    A claim to decrease withholding is not considered a credit decrease and is processable without statute involvement.

    Exception:

    Route to CIS/AM any case regardless of any tax increase/credit decrease involving any of the following:
    - A signed consent or request to extend the statute of limitations.
    - Filing status changes to MFJ.
    - Cases requiring a manual refund.
    - A statement of Financial disability.

    1. Input a TC 971 AC 014.

    2. Keep all related statute tax years together as you would non-statute years.

    3. If the case is within 17 days of the ASED it should be expedited/hand walked to the Statute area per local procedure.

    3. The received date is within 60 days of the ASED or the ASED is expired The RSED is open and there is a total tax decrease or a refundable credit increase of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and specific Cat A criteria does not exist for the issue(s)

    Note:

    If specific CAT-A criteria exist, see IRM 3.11.6.4.9.1. If CAT-A criteria is not met, continue to the next box.

    Route to CAT-A
    4. The RSED is expired and the module is in debit balance   Route to CIS/AM
    5. The RSED is expired on a full paid module and your amended return is not a math error correction There are payments, credits, or offsets posted within two years of your case’s received date Route to CIS/AM
    6. The RSED is expired and there was a math error on the original return The change on the Form 1040-X is not a math error correction and/or also claims additional changes Route to CIS/AM
  4. Follow the procedures below to determine if the case requires correspondence.

      If And Then
    1. Total tax decrease and/or refundable credit increase resulting in a refund that was received (or postmarked) before the RSED The claim is incomplete and additional information is required to process the case
    1. Suspend the case for 45 days and request the missing information.

    2. Correspond with the taxpayer using a Letter 916C. Use paragraphs B, E, J, R, S, 1, 4 and paragraph R using fill-in: Please complete Form XX to support the changes you have made.Or use the fill-in provided in the specific instructions. Paragraph S fill-in: Please send us the requested information within 30 days from the date of this letter. If we do not hear from you, we will not be able to allow your claim if the statute of limitations has expired. Generally, the refund statute expires 3 years from the original due date of the return or 2 years from the date the tax was paid, whichever is later.

      Exception:

      If the signature is missing on the claim use a 324C letter with paragraphs: A, P, 3, 6, and c. For the fill-in: Please send us the information requested within 30 days from the date of this letter. If we do not hear from you within 30 days, we will not be able to allow your claim if the statute of limitations has expired. Generally, the refund statute expires 3 years from the original due date of the return or 2 years from the date the tax was paid, whichever is later.

    3. The response was received before the RSED or after the RSED but within 45 days of the IRS request (date the letter was input) then allow the claim. If the taxpayer did not provide a complete response, adjust the account for provided items and send a 106C letter per IRM 3.11.6.11.3.

      Exception:

      If the adjustment will result in a balance due, then route to Statute.

    4. If the time frames are not met, send a 105C letter disallowing the claim. Use paragraphs A, 1, c, d, g, r, and v. See IRM 3.11.6.11.3.

    2. The RSED is expired on a full paid module
    1. There are no payments, credits, or offsets within the last two years on the module and no other route-out criteria exist

    2. Exonerated Prisoner or similar is notated

    1. Send a 105C letter disallowing the claim. Use paragraphs A, 1, c, d, g, r, and v. See IRM 3.11.6.11.3.

    2. Route to CIS/AM with EXPR as the working Trail.

  5. If the return is a duplicate, see IRM 3.11.6.6.5.

  6. The following procedures should be used to determine how to process your case.

    Note:

    When adjusting a timely filed amended return after the due date, input "S" in the Override Indicator field.

      If And Then
    1. Making an adjustment to the account with a TC 290 .00 and adjusting Credit Reference Numbers that will not result in a credit or tax change

    Example:

    Changing SE tax from the primary to secondary taxpayer. No tax change and no credit change.

    Without regard to the ASED or RSED Process using Blocking Series 05. If the RSED is expired, use the received date as the RFSCDT and enter an S override.

    Caution:

    Do not use Priority Code 9.

    2. The RSED is expired and there was a math error on the timely filed original return The only change is a correction of the math error(s) Process the Form 1040-X. See IRM 3.11.6.7.4.1.

    Note:

    Input the received date of the original return in the RFSCDT field.

    Exception:

    If the original return was filed after the RSED, route to CIS/AM.

    3. The RSED is expired and there was a math error on a timely filed amended return The only change is a correction of the math error(s) Process the Form 1040-X. See IRM 3.11.6.7.4.1.

    Note:

    Input the received date of the first amended return in the RFSCDT field.

    4. The ASED is greater than 90 days and the RSED is expired
    1. The return is a tax increase and/or a credit decrease

    2. The return has either a tax increase with a credit increase or a credit decrease with a tax decrease

    1. Process as normal.

    2. Route to CIS/AM.

    5. The amended return has a total tax decrease and/or refundable credit increase that results in a refund on a timely filed return No route criteria exist Process the 1040-X using instructions in paragraph 7 below.
  7. Follow the procedures and examples in the chart below for determining the received date and amended claims date.

    Note:

    Verify postmark date when determining timeliness.

    Reminder:

    Always verify the RSED and ASED dates on CC TXMOD.

      If And Then
    1. Received date is after the RSED

    Example:

    The received date is 4-20- 20XX.

    Postmark shows the claim is timely filed

    Example:

    The RSED is 4-15-20XX, and the postmark date is 4-15-20XX or prior.

    Example:

    The RSED is 10-15-2020, and the postmark date is 10-13-2020.

    Use the received date as normal. Use the postmark date as the amended claims date and as the RFSCDT.

    Example:

    Input 4-15-20XX as the RFSCDT and the amended claims date.

    Example:

    Input 10-13-2020 as the amended claims date and RFSCDT.

    2. The received date is prior to the RSED

    Example:

    The received date is 3-30-20XX.

    You are processing the claim after the RSED

    Example:

    Postmark date is 3-28-20XX and the return is received in the 1040-X unit to be processed 6-05-20XX.

    Use the received date as normal and as the amended claims date and RFSCDT.

    Example:

    Input 3-30-20XX as the amended claims date and the RFSCDT.

    3. Received date is prior to the RSED

    Example:

    The received date is 6-01-20XX and the RSED/ASED is 10-15-20XX.

    You are processing the claim prior to the RSED

    Example:

    The claim is processed 6-20-20XX.

    Process the return following standard 1040-X procedures.
    4. Claim is timely received

    Example:

    The received date is 4-15- 20XX or prior.

    The claim is incomplete and correspondence is required per paragraph (4), box 1. Response is received after the RSED, but within the time frames in paragraph (4), box 1.

    Example:

    Correspondence was sent and the reply was received 6-1-20XX.

    Use the original received date as the received date and RFSCDT. Use the response date as the amended claims date.
    5. No envelope/postmark is present, or the postmark is illegible, the received date is 4-20- 20XX Received date is no later than seven (7) days after the RSED

    Example:

    The return was received by or before 4-20-20XX, the RSED is 4-15-20XX.

    Use the RSED date as the received date, amended claims date, and RFSCDT. Edit the RSED date onto the return and circle any other received date stamps.

    Example:

    Input 4-15-20XX as the received date, amended claims date, and RFSCDT.

    Note:

    If adjusting a timely received return after RSED, input an S in the Override Indicator field.

Taxpayer Advocate Service Cases (TAS)

  1. Review all attachments for taxpayer notations/correspondence to determine whether the taxpayer meets TAS case criteria or requests TAS assistance. TAS criteria is defined as any of the following:

    • Taxpayer is experiencing economic harm or is about to suffer economic harm.

    • The taxpayer is facing an immediate threat of adverse action.

    • The taxpayer will incur significant costs, if relief is not granted (including fees for professional representation).

    • The taxpayer will suffer irreparable injury to, or long-term adverse impact if relief is not granted.

    • The taxpayer has experienced a delay of more than 30 calendar days to resolve a tax account problem.

    • The taxpayer has not received a response or resolution to their problem or inquiry by the date promised.

    • A system(s) or procedure(s) has either failed to operate as intended or failed to resolve the taxpayer’s problem or dispute within the IRS.

  2. Expedite all cases open to ATAO to CIS/AM. TAS involvement is indicated by a control category of ATAO or the Assigned to Employee IDRS number begins with 63. Follow local procedures for routing.

  3. When a taxpayer requests to be referred to TAS or the taxpayer meets the above criteria:

      If And Then
    1. A taxpayer sends a Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order)
    1. No other documentation is attached

    2. An original return or Form 1040-X is attached

    1. Send the Form 911 to TAS.

    2. Perform the following steps:

      1. Detach the Form 911 and send to TAS.

      2. Continue processing the return as normal.

    2. A taxpayer sends correspondence meeting TAS criteria or requests TAS assistance
    1. No other documentation is attached

    2. An original return or Form 1040-X is attached

    1. Send the correspondence to TAS.

    2. Perform the following steps:

      1. Detach the correspondence and send to TAS.

      2. Continue processing the return as normal.

    3. A taxpayer provides a tax return with an explanation on the 1040-X that he or she is seeking TAS assistance
    OR
    The request meets TAS criteria
    Form 911 or correspondence is not attached
    1. Complete sections I, II, and III of Form 911 and send to TAS. The Form 911 must state the taxpayer’s problem and the relief requested.

      Note:

      If a Form 2848, Power of Attorney and Declaration of Representative, is attached to the Form 1040-X, notate in Section II of Form 911 "2848 to CAF" .

    2. Continue processing the return as normal.

    Caution:

    Do not send original returns or Forms 1040-X to TAS.

Frivolous Claims

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by both individuals and businesses are included, but are not limited to, a list in Exhibit 3.11.6-5, Frivolous Claims.

  2. F- freezes are set by a posted TC 971 AC 089 and indicates that a frivolous return has been received and the entire account is frozen. Adjustments should not be made to accounts showing an F- freeze.

  3. Route any "suspicious" return to the designated boxes in Submission Processing as well as claims with an F- freeze. The same boxes can be used for original returns, as well as claims (e.g., Forms 1040-X) identified as "frivolous claims" , or follow local procedures. Input TC 971 with AC 013. Enter Sent to FRP in the remarks area. The Frivolous Return Program (FRP) Coordinator will review any return which the taxpayer:

    1. Argues for any reason for filing a tax return or the paying of taxes.

    2. Uses one of the frivolous arguments or statements in Exhibit 3.11.6-5, Frivolous Claims.

    3. Marks out or alters in any manner, the penalty or perjury statement (i.e., the jurat) in the signature area.

  4. If a non-frivolous claim is received with an open control base to an employee in the FRP Unit (IDRS Numbers begin with: 14867, 14868, or 14869) route to FRP at the following address:

    IRS Frivolous Return Program
    1973 N Rulon White Blvd
    Mail Stop 4450
    Ogden, UT 84404

    Input a TC 971 with AC 013 and enter "Sent to FRP" in the remarks area.

Criminal Investigation (CI) Scheme Development Center (SDC)

  1. The Criminal Investigation (CI) Scheme Development Center (SDC) identifies and assembles information on individuals and entities involved in civil and criminal noncompliance with the Internal Revenue Code (IRC) and other related statutes.

  2. Use the following chart to determine if CI SDC will want to see the following amended returns:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

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

    Exception:

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

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ "
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "
  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

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

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

Integrity and Verification Operation (IVO) Guidance

  1. The Integrity Verification Operation (IVO) identifies and intercepts refunds from returns with questionable wage and/or withholding claims, which may include identity theft related issues.

  2. If an amended return has "ICT/IVO" notated on the top of the form, the case should be pulled by the assigning clerk for expedite routing to CIS/AM per local procedures.

    Note:

    Use ICT/IVO as the working trail and close the base to "MISC."

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

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

    Note:

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

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Example:

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

      Note:

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

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

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

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

      • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

        Exception:

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

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "   ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      Note:

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

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡   ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Examination

  1. Review all claims and amended returns for Examination involvement. This may include:

    1. Returns with an open TC 420 or -L freeze. See IRM 3.11.6.4.9.2.

    2. Returns meeting CAT-A criteria. See IRM 3.11.6.4.9.1.

  2. Do not refer incomplete returns to CAT-A or Exam. A claim is considered complete if it has all information required. Correspond for signatures and all missing forms or schedules needed to support the changes being requested. Suspend all 324C correspondence.

    Exception:

    If an incomplete response has been received on correspondence issued on a claim with CAT-A criteria or an Exam case, forward the claim to CAT-A or Exam, as appropriate.

  3. If the case has a -W freeze, route to CIS/AM.

  4. If the dependent(s) are changing from an ITIN(s) to SSN(s), prepare a Form 4442 before routing to CAT-A per local procedures.

    Note:

    Send the Form 4442 to the Austin ITIN Unit to have the ITIN revoked. Annotate both TINs on the Form 4442 referral and specify the ITIN that should be revoked, the individual’s name, date of birth (DOB), and a statement that no merge action is required. The reason for revoking the ITIN is "the dependent now has a valid SSN per IRM reference 3.11.6.8.3(4)."

  5. The lead will forward cases needing technical assistance to the Examination Classification function.

Category A (CAT-A) Criteria
  1. To determine whether a return meets Category A (CAT-A) criteria, see Examination Criteria (CAT-A) - General and Examination Criteria (CAT-A) - Credits.

    Note:

    Unless otherwise specified, the dollar amounts cited refer to the amount of the tax decrease or credit increase whether or not the claim results in a refund or a decrease to the balance due.

  2. Do not apply CAT-A criteria to:

    • Combat Zone returns when the TP is actively serving in a Combat Zone. See IRM 3.11.6.4.22

    • CP notices

    • Credits that are being disallowed

    • Credits that are being reduced below the CAT-A tolerance due to Masterfile or Math verification

  3. For CC DDBCK CAT-A criteria, see IRM 3.11.6.8.1.

  4. When EIC is increasing and Schedule C meets CAT-A criteria input CC DDBCK prior to referring the case to CAT-A. If the CC DDBCK validation results screen shows the case as "Selected," refer the case to Exam using the "Selected" cover sheet. Otherwise refer the case as CAT-A for the Schedule C.

  5. If the case is being forwarded to CAT-A, do not input a TC 971 AC 013.

  6. Once identified, these cases will be placed in a special sort identified as CAT-A and the issue will be identified by checking a box as to its category on a summary sheet. These will be expedited, per local procedure, to CIS/AM for disposition to Exam.

Exam/-L Freeze Claim Processing
  1. Accounts with a -L freeze indicate an account has been selected for a potential audit. Since not all cases with a -L freeze will be audited, processing procedures differ based on the Audit Information Management System (AIMS) status.

  2. If an -L freeze is present, use CC AMDISA to determine the AIMS status. The AIMS status will determine the current status of the potential audit.

    Note:

    If there is an open IDRS control base to CI-SDC, continue to follow processing procedures outlined in IRM 3.11.6.4.8.

  3. For accounts with a -L freeze and the AIMS status is 08 or less:

    • If the claim meets CAT-A criteria, per IRM 3.11.6.4.9.1 route the case to CAT-A per local procedures.

    • If the claim does not meet CAT-A criteria, process the claim following normal processing procedures. Do not forward the case to Exam.

  4. For accounts with a -L freeze and the AIMS status is greater than 08:

    • Route to Exam based on the Employee Group Code (EGC) identified on AIMS. See link to the EGC located on SERP under Who/Where Exam Employee Group Code http://mysbse.web.irs.gov/examination/mis/contacts/default.aspx.

    • Follow local procedures for routing. See IRM 3.11.6.4.9.

    Exception:

    If the AIMS status is 90 indicating a closed audit or there is a pending TC 300 - 361, refer the case to CIS/AM.

    Exception:

    Whether identified through an open control base or CC AMDISA, amended returns should not be routed to Appeals, IDRS number 66XXX, route to CIS/AM.

    • Input a TC 971 AC 013 and use the received date of the amended return for the transaction date

      Exception:

      On CC DDBCK "Selected" cases, IDRS will automatically input the TC 971 AC 013 when a TC 971 AC 010 is not present.

Automated Underreporter (AUR)

  1. When a TC 922 is present, use the last process code to determine whether the AUR case is open or closed. Closed cases can result in an AUR reconsideration. The process codes are the two digit numbers below the TC 922. Other process codes may be present but only route based on the last process code listed in the table below. Definitions of the Underreporter Process Codes can be found in IRM 4.19.3-4.

    Caution:

    If it can be determined the AUR issue is not included with the amended return, do not route to AUR. If AUR returns the amended return because it is unrelated to their issue, then process as normal. Keep in mind the taxpayer will sometimes use their original figures in Column A; do not take this as an indication the taxpayer is disagreeing with the AUR adjustment.

  2. Use the table below for reference:

      If the last TC 922 process code is: Then
    1. 30, 34, or 54 It indicates an AUR issue and a CP 2501 may or may not have been issued. Route as an open AUR per paragraph (7) below.

    Note:

    The CP 2501 will not be on AMS.

    2. 20 or 53 The case was worked and closed by AUR with an adjustment to the tax liability and/or refundable credits. If the taxpayer files a claim or amended return requesting a refund or abatement of tax previously assessed by AUR, route as an open AUR per paragraph (7) below.

    Note:

    Information will not be on AMS.

    3. 55, 57-60, 75, 77-79, 81, 95, or 97-99 Research AMS to determine the issues on the CP 2000 Notice and see paragraph (5) below.
    4. 18
    • Refer to CIS/AM with the working trail KITA

    • Use CC ACTON to leave a history item 2KITA

    5. 11, 12, 13, 26, 35, 36, 38, 63, 64, 66, 80, 83, 85, or 86 Route to Exam per IRM 3.11.6.4.9.
    6. 39, 62, 67, 68, 69, 82, 87, 88, 89, 90, or 94
    and
    a TC 29X has been input after the TC 922 and has one of the following Blocking Series: 050-070, 500-519, 550-589, 600-619, 650-679, 980-999
    Research AMS to determine the issues on the CP 2000 Notice then see paragraph (8) below.

    Note:

    If you are unable to determine if the claim is related to the AUR issue continue to process the Form 1040-X.

    7. 17 Route as ID Theft. See IRM 3.11.6.4.3.
    8. Any process code not listed Process as normal. Do not route to AUR even if there is an open control base to AUR.

    Note:

    If additional assistance is required, contact the appropriate AUR Coordinator provided on the WHO/Where tab on the SERP home page.

  3. When TC 160, 161, or 162 is present on the account, route to CIS/AM.

  4. When AUR identifies an issue(s), a CP 2000 is issued to the taxpayer and a copy of the notice posts to AMS. The CP 2000 identifies the specific forms reported to the IRS and not reported by the taxpayer on their tax form. The CP 2000 also provides the adjustment needed to correct the account and a place for the taxpayer to agree or not agree. If the taxpayer does not respond to the CP 2000, the adjustment is input by AUR. Taxpayers may respond to the notice by filing an amended return either before or after the adjustment has been input.

  5. Open AUR cases must address at least one of the issues identified on the CP 2000 to be routed to AUR per paragraph (7) below. This includes:

    • Adjusting income and/or credits related to a specific form and issuer as described in the CP 2000.

    • Adding the income mentioned in the CP 2000 and also adding expenses that offset the income in part or in whole.

    • Any statement or documentation that the amount should not be added.

    • A statement that the taxpayer agrees with assessment.

  6. If unable to determine whether any AUR issue is being addressed, route as an open AUR per paragraph (7) below.

  7. When routing open AUR cases:

    • Determine the routing destination by using the first two digits of the TC 922 DLN, following local procedures: AUR Addresses (Open Cases)

    • Input a TC 971 AC 015

  8. AUR reconsideration cases must disagree with at least one part of the AUR adjustment as shown on the CP 2000 to be routed as an AUR reconsideration per paragraph (10) below. Taxpayers may indicate disagreement by submitting:

    • An amended return that reduces the income and/or increases credit(s) related to the specific form and issuer as described in the CP 2000 and adjusted by AUR. This does not include cases where the taxpayer is adjusting mitigating factors such as expenses, cost basis, gambling losses or credits not previously claimed and unrelated to the AUR assessment.

    • The CP 2000 Response Form section indicating disagreement with Option 2.

    • Any statement indicating the taxpayer disagrees with the change that is related to the AUR adjustment, such as "I did not have gambling income" , "I did not work there" or "I did not earn that much" .

    Exception:

    If the taxpayer states that they earned more or should have a smaller credit than indicated by the CP 2000, do not route to AUR, process normally.

  9. When multiple years are present, route only those years that;

    • Have an AUR issue present

    • Are being used to demonstrate that the AUR issue belongs on another tax year

    Example:

    The AUR issue is a 2016 Form 1099. The taxpayer disagrees with the AUR notice and states the payment was not received until 2017, their 2017 tax return is attached as proof.

  10. When routing AUR reconsideration cases:

    • Determination the routing destination by using the first two digits of the TC 922 DLN, following local procedures: AUR Reconsideration

    • Input a TC 971 AC 015

  11. Returns that decrease tax and/or increase credits after an AUR assessment has been made may meet CAT-A criteria. See IRM 21.5.3-2, Examination Criteria (CAT-A) – General.

  12. If the taxpayer is not disagreeing with any specific part of the AUR adjustment, as described on the CP 2000 or if you are unable to determine if any AUR issue is being address, process normally.

International Returns

  1. Route all International returns to CIS/AM per local procedures. This includes duplicate returns.

    Note:

    A list of the International claims is included in IRM 3.11.6.4.11.1, International Returns. Common indicators of claims or forms to be routed are Foreign Addresses and Dual Status.

  2. Do not process Form 1040-X if all the Forms W-2 and Forms 1099 attached are from the Virgin Islands (regardless of the address). Pull these returns and transship to the following address:
    Virgin Islands Bureau of Internal Revenue
    6115 Estate Smith Bay, Ste. 225
    St. Thomas, U.S. Virgin Islands 00802

  3. Route to CIS/AM if dual status is indicated by the following conditions on an "amended" Form 1040:

    Form 1040 Revision is Filing Status Box is checked and Line is blank or zero
    2017 and prior Other than Married filing separately (FS 3) 39b 40
    2018 and subsequent Other than Married filing separately (FS 3) In entity section for Your spouse itemizes on a separate return or you were dual-status alien 8
International Return Criteria
  1. The following is a list of International claims. Refer to IRM 3.11.6.4.11 for additional instructions.

    • Claims with foreign addresses on either the original or amended return (other than APO, DPO, and FPO addresses)

    • Form 499R/W-2PR, Puerto Rico Withholding Statement

    • Form 1040 GUAM

    • Form 1040C, U.S. Departing Alien Income Tax Return

    • Form 1040NR, U.S. Non-resident Alien Income Tax Return or Form 1040NR-EZ. Always leave the Form 1040-X attached

    • Form 1040PR, U.S. Self-Employment Tax Return-Puerto Rico

    • Form 1040SS or Form 1040SS, U.S. Self-Employment Tax Return-Virgin Islands, Guam, American Samoa

    • Form 1042S, Foreign Persons US Source Income subject to Withholding, Form SSA, Social Security Administration 1042S, or Form RRB, Railroad Retirement Benefits-1042S

    • Claims with Form 2555, Foreign Earned Income or Form 2555EZ, Foreign Earned Income Exclusion, attached or noted on the return

    • Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Foreign Gifts

    • Form 3520-A, Annual Return of Foreign Trust with U.S. Beneficiaries

    • Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa

    • Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands

    • Form 8288A, Statement of Withholding under IRC 1445

    • Form 8288B, Application for Withholding Certificate for ISRP position

    • Form 8689, Allocation of Individual Income Tax to the Virgin Islands

    • Form 8804, Form 8805, or Form 8813, Statement of Withholding under Section 1446

    • Form 8833, Treaty-Based Return Position Disclosure Under IRC 6114 or IRC 7701(b)

    • Form 8854, Expatriation Information Statement

    • Form 8858, Information Return of U.S. Persons with Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs)

    • Form W-2AS, American Samoa Islands

    • Form W-2CM, Common Mariana Island

    • Form W-2CNMI, Common Northern Mariana Island

    • Form W-2GU, Guam Wage and Tax Statement, W-2PR, Puerto Rico Wage and Tax Statement, W-2VI, US Virgin Islands Wage and Tax Statement, or 1099VI

    • Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding

    • Claims involving IRC 911, IRC 913, IRC 931, IRC 933

    • A notation on the return of Dual Status

    • An indication on the return of Dual Status

    • Claims for an exemption or exclusion of the tax or income due to an international treaty or United States Tax Treaty

    • Claims involving Treaty Trader or Fulbright Grantee

    • Claims citing income from Johnston Island (26 CFR 1.931.1)

    • Income paid in foreign currency, whether or not it was converted to U.S. currency

    • Primary, secondary, or both taxpayers are Non-Resident Aliens (NRA)

    • Any indication on the Form 1040-X the taxpayer originally filed an International return and is requesting a conversion to a Domestic return (i.e., originally filed Form 1040-NR and request conversion to Form 1040)

Form W-7 and ITIN Research (Austin Only)

  1. Form 1040/Form 1040A/Form 1040EZ/Form 1040 NR/Form 1040-X that have a red W-7 stamped in the bottom left corner of the return have been received from an ITIN Unit.

  2. Signature correspondence is not required when your return has the red W-7 stamp.

  3. If the primary and/or secondary taxpayer(s) have a newly issued ITIN(s), use the IAT Name Search Tool (or CC NAMEI, CC NAMES, CC DUPED, CC DDBCK, etc.) to determine if there is a TC 150 posted on the ITIN provided or under a different ITIN/TIN. See IRM 3.11.6.6.1 for TC 150 procedures.

  4. After research, process the return using the following instructions:

    If And Then
    A TC 150 is posted
    1. The return is a duplicate return

    2. The Primary (or Secondary) TIN is different than found on the return

    3. The Primary (or Secondary) TIN is the same as the original filing, and other issues are present

    1. Input a TC 290 .00 with no reason code.

    2. Attach an IMFOLR screen print (for each TIN, if more than one) to the return. Route to CIS/AM using the current ITIN/IRSN DUPS coversheet.

    3. Process the return as a Form 1040-X.

    No TC 150 is posted
    1. There is more than one TIN for the taxpayer

    2. The return contains an IRSN for the primary taxpayer, but an ITIN/SSN is found

    3. The return contains an ITIN for the primary taxpayer and an SSN is found

    1. Route to Batching.

    2. Circle the primary taxpayer’s IRSN, edit the ITIN/SSN to the return then route to Batching.

    3. Circle the primary taxpayer’s ITIN, edit the SSN then route to Batching.

  5. When “ITIN REJECT” is stamped or No W-7 is indicated:

    In And Then
    The primary taxpayer box
    1. You cannot locate a TIN after researching IDRS

    2. You find the correct TIN

    1. Route to Entity with working trail ENTITY.

    2. Circle ITIN REJECT, edit the correct TIN, and follow the chart.

    Secondary taxpayer’s SSN box and you cannot locate a TIN after research
    1. Income subject to SE Tax is reported for the secondary taxpayer

    2. A math error already exists for the secondary TIN

    3. Neither previous condition exist

    1. Route to Entity with working trail ENTITY.

    2. Input per paragraphs (8), (9), and (10) below. Allow the standard deduction and do not allow the exemption.

    3. Input per paragraphs (8), (9), and (10) below. Allow the standard deduction and do not allow the exemption.

    Secondary taxpayer’s SSN box You locate a TIN after research Continue processing.
    Dependent TIN box With or without a previous math error for the dependent See paragraph (8) below and (9) if applicable.
  6. If the dependent(s) has a newly issued ITIN(s), follow normal 1040-X procedures.

    Exception:

    If the TIN the ITIN unit assigned does not match CC INOLES, research CC NAMES for the correct TIN. If unable to determine, use Form 12305 to return the claim to the ITIN department, Stop 6085 AUSC with "ITIN N/C mismatch" in the Remarks area.

  7. If a return is received from the ITIN department that is workable:

    1. Input any allowable adjustment. PATH Act criteria applies for certain credits.

    2. Include entity changes.

    3. Update the DUPOL database if necessary.

    4. Input IRN 887 as needed.

    5. Enter the appropriate reason code(s). Enter the date from Form 3471, if attached, as the Amended Claims Date. See IRM 3.11.6.7.4.1 to determine the Amended Claims date for substantiated math errors.

  8. When the allowable adjustment changes the taxpayer’s expected refund or balance due:

    Reason for Change Action
    ITIN Reject

    Exception:

    For any math error (ME) related to the dependents/credit because the ITIN was rejected
    Or
    They did not have an application, No W-7
    Or
    They have a newly issued ITIN. Process for the dependents, send an informational Form 8009-A with fill in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, is not being returned with this letter. The PATH Act prohibits taxpayers from retroactively claiming certain ITIN related credits for any tax year in which the taxpayer, spouse, or qualifying child did not have a valid SSN assigned or ITIN/ATIN application received by the return due date or due date as extended. This may have caused a change to your amended return.

    Send an informational Form 8009-A with fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, is not being returned with this letter. You should have received a separate notice informing you that one or more of your Form W-7, Application for IRS Individual Taxpayer Identification Number, applications were rejected. This caused a change to your amended return.

    Exception:

    If the issue is related to the spouse’s ITIN being rejected, see paragraph below for additional processing instructions.

    Path Act disallowance Send a 105C/106C. See IRM 3.11.6.11.3 and input TC 971 AC 113.
    Math error(s) for issues other than ITIN rejects Process following IRM 3.11.6.7.4. Use the date from Form 3471, Edit Sheet, if attached, as the Amended Claims Date. Send a 474C. See, IRM 3.11.6.7.4.
  9. When using xClaim to allow the FSC 2 change and the spouse has "ITIN REJECTED" :

    1. Enter all zeros for the spouse’s TIN (000-00-0000) in xClaim.

    2. When reviewing the Entity change on CC INCHG remove the zeros then transmit.

Large Business and International’s (LB&I) Streamlined Program

  1. 1040X returns submitted under the Streamlined Program need to be processed by Philadelphia Accounts Management (AM) as they are considered International returns. However, Large Business and International (LB&I) is requesting that all refunds be frozen until classification is performed by LB&I. These submissions will consist of original returns, as well as, Form 1040-X amended returns.

  2. LB&I will be reviewing these returns/claims to see if they qualify for the Streamlined Program. They are also requesting that original returns and amended returns from the same taxpayer be maintained as a package. If a 1040-X meets the criteria of the Streamlined Program, it will be sent to the Austin Submission Processing 1040-X area along with any related original returns to have a TC 290 .00 input for the Form 1040-X. There are different processes depending on whether or not the 1040-X is alone or is accompanied by a 1040:

    1. If the 1040-X returns need a TC 290 .00 as determined by LB&I as a notation on the route slip, the 1040-X area will input the TC 290 .00 and the 1040-X will go to files if no original 1040 is attached.

    2. If the package is mixed Forms 1040-X and 1040s, the package will be kept together. The 1040-X will have the TC 290 .00 input by the 1040-X area indicating “NSD” (No Source Document) on the input and the 1040-Xs will then accompany the original Form 1040(s) to pipeline for processing. The entire package will be sent to PIN Unit.

Open Cases / Open Control Base

  1. Generally, if an account has an open control base in CC TXMOD you will need to route the return to the assigned employee or a specified department. An open case can be in any of the following status: "A" Active; "B" Background; "S" Suspense; or "M" Monitor.

    Note:

    Do not route cases that are open in CC ENMOD.

  2. Cases in A or S status should be routed based on the ASSIGN-TO field of the open control.

  3. Do not route cases open in B or M status; continue to process if no route out criteria exist.

  4. The following exceptions apply to A, B, S, and M status:

    1. If the open control is in B status due to a P- freeze/TC 841 and the case is a net refund, then route to CIS/AM.

    2. Refer cases with a category code NLUN to the assigned IDRS number to process.

    3. Cases open to Accounts Management should be routed to your local CIS/AM. See (7) below to identify Accounts Management cases, more Accounts Management routing criteria might be identified through research found in (6) below.

    4. Cases open to a 1040X SP employee at your local campus should be referred to the manager or lead following local procedures.

    5. Follow local procedures for cases that are processable by placing the case in B status, inputting an adjustment, and then returning it to its original status.

    6. Route all ATAO cases per IRM 3.11.6.4.5.

    7. Cases with Activity 9465 should be placed in "B" status and processed.

    8. Cases controlled to Appeals IDRS number 66XXX, route to CIS/AM.

    9. AUR controlled cases should be routed following IRM 3.11.6.4.10.

  5. If the open control is assigned to your current or previous IDRS number, close your open control before continuing to take any action on the return.

  6. Use CC MESSG or the IDRS Unit and USR Database, IUUD, web site to determine the appropriate campus location and stop number based on the IDRS number in the ASSIGN-TO field of the open control.

  7. Accounts Management IDRS numbers are identified by the service center 2 digit code and 301-399 series. For instance, a Customer Service Representative (CSR) in Fresno would be 103XX. Submission Processing 1040X Units would use the SC code and the 200-244 series. This includes cases open to the AM suspense queue that do not contain 301-399 series:

    Campus Generic IDRS number
    Atlanta 0739900025
    Andover 0848900000
    Austin 0686100000
    Brookhaven 0138640000
    Cincinnati 0237500000
    Fresno 1042000000
    Kansas City 0938000000
    Memphis 0339300000
    Ogden 0439800000
    Philadelphia 0544300093
  8. To put a case into suspense, use CC ACTON. Follow local procedures for suspending and monitoring cases.

  9. Follow local procedures when routing open cases.

Accounts Management Cases

  1. Cases are referred to Accounts Management (AM) based on the issue, the dollar tolerance, computer program capabilities (e.g., Blocking Series), and other various reasons. Refer to the specific IRM instruction or the 1040-X Routing Guide at IRM 3.11.6.13. Also see IRM 3.11.6.4.9.1 on screening and sorting CAT-A criteria.

  2. Route all AM returns to Correspondence Imaging System (CIS) to be scanned. Follow any local procedure for separating the "Carryback/Carryforward," "Disaster Claims," etc. that require special handling.

  3. Do not input a TC 971 AC 010 when routing a case to CIS/AM.

  4. If a return has an open case to CIS/AM, route to your local CIS/AM.

  5. If a return is a CIS image, then refer to CIS/AM.

    Exception:

    If a CIS imaged return is stamped/edited "Process as Original (PAO)" or similar verbiage and there is no TC 150 posted/pending, then route the document to Batching to be processed as an original. When feasible use Prior Year and Conversion Form 1040 Edit Sheet for Tax Year YYYY. If it is current year and the conversion form is not available, then "dummy" a current year Form 1040 for processing.

  6. A return must have a TC 150 posted before routing to CIS/AM, unless specific instructions are provided.

Affordable Care Act and Possible Health Professional Claims

  1. The Affordable Care Act enacted April 2010 expanded tax benefits for health professionals working in some communities. Health care professionals who received student loan relief under various state programs and work in under-served communities may qualify for refunds on their 2009 federal income tax returns. If you receive the Form 1040-X, Amended U.S. Individual Income Tax Return, referencing the “Excluded student loan amount under 2010 Health Care Act,” “Affordable Care Act,” or “Student Loan Forgiveness,” route the claim to CIS/AM as they will be processing these claims.

Killed in Terrorist Action (KITA)

  1. Route all claims identified (on the return or on IDRS) as Killed in Terrorist Action (KITA), Killed in Action (KIA) or Victim of Terrorist Attack to CIS/AM, notate KITA in the working trail. Other terminology may include:

    • Anthrax

    • Oklahoma City

    • IRC 104(a)

    • 9 / 11

    • 911 Rescue Workers

    • Publication 3920

    • Tax Forgiveness Victims of Terrorist Act

    • World Trade Center (WTC)

    Note:

    Place a CC ACTON history item "2KITA" on CC TXMOD; do not input a TC 971 AC 010.

Collection Function Cases

  1. The following should be detached and routed to the Collection function if attached to the Form 1040-X. Continue processing the amended return.

    1. Form 9465, Installment Agreement Request.

    2. A written request for an Installment Agreement located in the Form 1040-X, Explanation of Changes, or a separate attachment. Detach any Installment Agreement request and route to Collection as soon as it is identified.

    3. CP 503/504, Taxpayer Notification of Federal Tax Not Received, with a statement of, or similar to "can’t pay," "won’t pay," "want to pay," or "Form 9465 is attached."

    4. CP 523, Past Due Payment Default Notice.

    5. 433-D, Installment agreement.

      Reminder:

      Verify that the taxpayer's name, TIN, and tax period are present on any detached item. Perfect as necessary.

  2. If the entire return is being routed to Collection, input a TC 971 AC 012.

  3. Review returns for Automated Substitute For Return (ASFR) and Non-Filer Reject (NFR) as follows: to Collections. The most distinctive way to identify an ASFR account is the TC 150 for .00 with an SFR literal to the right of the Document Locator Number (DLN) on CC TXMOD or the SUBST4 on CC IMFOLI Vestigial: field.

  4. Collection function cases should be routed as follows:

      If And Then
    1. SFR returns
    1. TC 420 (unreversed) and a -L freeze

      Exception:

      If CC AMDISA status is 08 or less then see Non-filer Reject below.

    2. No unreversed TC 420 is present

    1. See IRM 3.11.6.4.9.2.

    2. Route to Collection and input a TC 971 AC 012.

    2. NFR returns Identified by:
    • TC 420 or TC 424 and a CC AMDISA status of 08 or less

    • A reversed TC 420

    • CC AMDISA status 90

    Route to CIS/AM.
    3. Posted TC 599 cc 89 on CC TXMODA   Route to CIS/AM.
    4. Posted TC 599 cc 88 on CC TXMODA Without a subsequent TC 599 cc 89 Route to:
    Fresno Campus
    ASFR Unit Stop 81304
    5045 E Butler Ave
    Fresno, CA 93727

    Reminder:

    Input a TC 971 AC 012.

    5. A T- freeze is present No Letter 1058, CP 90 or other notation such as a request for a payment plan (Installment agreement), "can’t pay," "won’t pay," "will pay later," etc is notated Workable
    6. A T- freeze is present A Letter 1058 or CP 90 is attached and a notation requesting a payment plan (Installment agreement), or statement can’t pay,won’t pay,will pay later, etc. Route per paragraph (5) below.
    7. A -Y freeze is present on the module
    1. There is an unreversed TC 480 on the module but no TC 780.

    2. There is an unreversed TC 480 on the module and a TC 780.

    1. Workable.

    2. Route the case to the appropriate campus based on the Monitoring Offer in Compromise (MOIC) Compliance Campus Locations for Offers in Compromise. See Offer-in-Compromise (OIC) Compliance Campus Locations for the Monitoring of Accepted Offers located on SERP under the Who/Where tab, to determine the appropriate campus site.

  5. When instructed to route a T- freeze per paragraph 4 above, compare the case status in the SC-STS field on CC TXMOD or STATUS field on CC IMFOLT or the STAT HIS on CC IMFOLI and follow the instructions below:

    If And Then
    CC IMFOL/TXMOD shows the case is in Status 22 or 24 The IRS address is on the top of the letter
    • Detach the correspondence.

    • Input TC 470, no closing code using CC REQ77.

    • Leave a working trail on the correspondence and the Form 1040-X. See IRM 3.11.6.2.6.

    • Route the correspondence to the IRS address on the top of the letter.

    • Continue processing Form 1040-X.

    CC IMFOL/TXMOD shows the case is in Status 22 or 24 The IRS address is not on the top of the letter 1058 and correspondence is attached

    Exception:

    If no letter or correspondence is attached, continue processing Form 1040-X.

    • Research the appropriate ACS Support Site on SERP under the Who/Where tab, select the link to ACS Support Liaison.

      Note:

      The BOD Code (W&I or SB/SE) will be needed to select the appropriate link.

    • Detach the correspondence.

    • Input TC 470, no closing code, using CC REQ77.

    • Leave a working trail on the correspondence and the Form 1040-X. See IRM 3.11.6.2.6.

    • Mail the correspondence to the ACS Correspondence Address indicated on SERP.

    • Continue processing Form 1040-X.

    CC IMFOL/TXMOD shows the case is in Status 26 The last four digits of the Collection-Asgmt>field is 8000 (xxx8000),

    Note:

    The Collection-Asgmt>field is located at the top right-hand side of CC TXMOD.

    • Route entire package to ASFR at either Austin or Fresno based on State mapping.

    • Input a TC 971 AC 012.

    • See exceptions below because ASFR generally does not work 1040-X claims.

    Caution:

    Do not route returns with imminent or expired ASED. Bring returns with imminent or expired ASEDs to Statute Coordinator or manager.

    CC IMFOL/TXMOD shows the case is in Status 26

    Note:

    Route all amended returns when at least one tax period is in status 26.

    The last four digits of the Collection-Asgmt>field is not (xxx80000)

    Note:

    The Collection-Asgmt>field is located at the top right-hand side of CC TXMOD.

    • Research the appropriate Revenue Officer Group office address on SERP (http://serp.enterprise.irs.gov) under the Who/Where tab, select the link RO by TSIGN/ZIP/STATE.

    • Input TC 470, no closing code, using CC REQ77.

    • Input TC 971 AC 012.

    • Route the entire case to the address obtained from SERP.

    • If the Revenue Officer (RO) calls to inquire why the 1040-X was routed to them explain we cannot process the amended return without their approval since it is assigned to them.

Innocent Spouse (Form 8857)

  1. Route Form 8857, Request for Innocent Spouse Relief, or Form 1040-X referencing innocent spouse (with or without Form 8857 attached) per (2) or (3) below.

  2. If innocent spouse is the only issue:

    1. Per local procedures, photocopy the return then edit "No Action/Issue" across the top of the photocopy.

    2. Detach the Form 8857 then staple it to the back of the photocopy of the return.

      Note:

      If Form 8857 is not attached, edit “No Form 8857 Received” across the top of the photocopy.

    3. Input a TC 290 .00, Blocking Series 05 and no RC.

    4. Input a TC 470 for all years listed on Form 8857.
      - Include closing code 90 if the account is not in status 26.
      - If the account is in status 26, do not include a closing code.

      Note:

      To determine the status, refer to the fifth line of CC TXMOD "SC-STS."

    5. Input a TC 971 with AC 065 for all years listed on Form 8857.

    6. Edit "TC 971/470" and appropriate closing code and date in the upper left margin of Form 1040-X.

    7. Per local procedures mail the photocopy packet to (must be done daily):
      IRS - CSPC
      201 W. Rivercenter Blvd
      Stop 840F
      Covington, KY 41011

  3. If innocent spouse is filed with an amended return and involves other issue(s):

    1. Per local procedures, photocopy the amended return then edit “Copy – Do Not Process” across the top of the photocopy.

    2. Detach the Form 8857 then staple it to the back of the photocopy of the amended return.

      Note:

      If Form 8857 is not attached, edit “No Form 8857 Received” across the top of the photocopy.

    3. Input the adjustment(s).

    4. Follow instructions (d) through (g) from paragraph (2) above.

Injured Spouse Allocation (Form 8379)

  1. Route the return packet to CIS/AM if:

    • Taxpayer files a return with the sole purpose of filing the Injured Spouse Claim

    • Return needs a corrected adjustment

    • Return does not meet SP criteria

    • A loose Form 8379, Injured Spouse Allocation

    • Taxpayer indicates an Injured Spouse Allocation but does not submit Form 8379

    Note:

    Do not correspond or input an adjustment. Input a TC 971 AC 071 and attach Form 8379 on the front of the packet.

  2. If the taxpayer files Form 8379 with their return that has a processable adjustment:

    1. Input the adjustment as "No Source Document" (NSD).

    2. If the adjustment will result in a credit balance or the account is in a credit balance, include a hold code 1 with the adjustment to prevent refund issuance, this applies to both MFT 30 and MFT 35.

      Note:

      If there is a refund for MFT 30 and 35 and Form 8379 is attached/indicated, do not input a credit transfer. Route to CIS/AM.

    3. Input a TC 971 AC 071.

    4. Bring the Form 8379 to the top of the claim.

    5. Route the entire original package to CIS/AM.

    Note:

    Correspond for missing information or signature(s) per normal procedures. See IRM 3.11.6.11.

Prisoner Returns

  1. IDRS CC FTBOL definer P indicates whether a taxpayer is or has been incarcerated (prisoner) and the release date if appropriate.

  2. The Command Code is running so that tax examiners are aware they are processing a prisoner’s return. Prisoners have the same rights as any other taxpayer when it comes to income tax. However, many schemes and fraudulent returns originate from prisoner populations and tax examiners need to be aware when they are working a prisoner claim in order to identify any irregularity.

  3. CC FTBOL may not always pick up that a claim is from a prisoner. Other indications of a prisoner return are:

    • Marking on envelope that indicates prisoner mail

    • PRI written on claim or Wages, salaries, tips, etc. line of 1040
      - Line 7 of Form 1040 for 2017 and prior
      - Line 1 of Form 1040 for 2018 and subsequent

    • Form W-2 indicates wages earned in prison or the address indicates a correctional facility

    • Address on return or envelope identifies a prisoner

    • Address on 1098-T identifies a prisoner or a correctional facility

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

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

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

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  6. If a full-year prisoner claims any of the following credits or if income earned while incarcerated is used to qualify for a credit, send a Letter 916C with paragraphs B, E, R, 1, and 4 using fill-in, Our records indicate that you are a prisoner and therefore do not qualify for certain credits.

    • Earned Income Tax Credit

    • Additional Child Tax Credit when claiming one or two children

    • Form 8863, Education Credits

  7. If taxpayer is not a full-year prisoner and there is no indication they were paid for work while incarcerated, follow chart below.

    If Then
    IRPTR data is available for the year of the tax return and the return verifies Continue processing claim.
    IRPTR data is not available for the tax year of the return or unable to verify wages Input a TC 290 .00 and send a Letter 916C using fill-in: We cannot verify your claim for wages and/or withholding. Please verify your information.

    Reminder:

    On a married filing jointly return verify CC IRPTR information for both spouses.

Combat Zone

  1. Submission Processing will only process Combat Zone claims with net refund or zero-balance.

  2. If a -C freeze is displayed on CC TXMOD/IMFOL, verify the taxpayer is actively serving in a designated combat zone. Treat the return as a combat zone if:

    • There is a -C freeze on TXMOD/IMFOL and a Combat Indicator of 1 on CC IMFOLE.
      or

    • Taxpayer notates on the return that they are actively serving in a combat zone.

  3. If a -C freeze with a Combat Indicator of "1" is present, then CC IMFOLE or CC ENMOD will show a TC 500 with a Closing Code (cc). There may be several entry/exit dates, use only the most recent to determine current Combat Zone status.

    • If the closing code is an even number, treat as a Combat Zone return.

    • If the closing code is an odd number, continue processing the return and do not treat as a Combat Zone return.

    Note:

    If the literal "Combat Zone" is present on IDRS ensure there is a -C freeze before treating as a Combat Zone. The literal without the freeze is only an indication of prior Combat Zone status.

  4. If an active Combat Zone has a net balance due, route to CIS/AM

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but continue to route if they meet CIS/AM criteria.

    Note:

    All protective claims must be referred as CAT-A even if the taxpayer is actively serving in a Combat Zone.

  6. If there is no -C freeze on a return that has been identified as a Combat Zone return, route CIS/AM.

  7. Follow correspondence procedures, see IRM 3.11.6.11 when required information is missing from the return.

  8. When processing, do not enter an Amended Claims date.

  9. A taxpayer (or their spouse, if married filing jointly) receiving nontaxable combat pay may elect to include the amount when figuring his/her earned income for purposes of computing EIC.

  10. Do not confuse Combat Zone with the Military Family Relief Act, see IRM 3.11.6.10.1.1.2.

Military Retirement Benefit Claims

  1. Taxpayers file Form 1040-X claims based on a recalculation of disability retirement income received from the Government for their military retirement. These claims are based on IRC 122 and recalculate the amount of taxable versus non-taxable income received. This is a misinterpretation of the Code section and is not allowable. The Form 1099-R issued by the Government does not include any amounts received as disability and the taxpayer is attempting to take a double deduction.

  2. Disallow any claim citing "Internal Revenue Code Section 1.122-1" or "Pursuant to 26 CFR" , unless the VA Determination letter with entitlement award is included with the claim. The letter will show the award amount and the monthly entitlement award. If the letter and entitlement award are present, route to CIS/AM, otherwise follow paragraph (3) for disallowance procedures.

    Exception:

    When documentation is included and CAT-A criteria for taxable to non-taxable is met, route to CAT-A, see IRM 3.11.6.13.

  3. Refer to IRM 3.11.6.11.3 for disallowance letter and use fill-in: You are incorrectly applying the formulas under Internal Revenue Code Section 122 to your retirement pay that was reported on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. The nontaxable amount (if any) was already deducted by the Department of Defense from the amount shown on your Form 1099-R. You are not entitled to any further reduction.

Decedent Returns

  1. Submission Processing will only process balance due and zero-balance decedent 1040-X returns.

  2. Indications of a deceased taxpayer may include any of the following:

    1. Date of death is present

    2. "Deceased" written on the top of the form

    3. "Deceased, Filing as surviving spouse" , or similar notation in the signature area

    4. Death certificate, Form 1310, or other documentation is attached

    5. "DECD" on an IRS label or written after a person’s name

    6. "Estate of" is present

  3. Route the following to CIS/AM:

    1. Refund returns for deceased taxpayers

    2. If MFR 08 is present on CC INOLES indicating the primary taxpayer is deceased

    3. Returns with Form 1310 , Statement of Person Claiming Refund Due a Deceased Taxpayer, attached

  4. If the signature of the deceased taxpayer is present on the signature line of the return, the signature must precede the date of death of the taxpayer. If it does not, correspond for a valid signature.

  5. Correspond for missing signature if the return is not signed by a surviving spouse, an executor, or an administrator. Correspond per IRM 3.11.6.11 using a 324C letter with paragraphs A, P, 3, 6, and c. Use fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, must be signed below the jurat beginning with "Under penalties of perjury" but not on the paid preparer line. Additionally, if one spouse is deceased, then the surviving spouse must sign the return indicating "Filing as Surviving Spouse" in the signature area and include the date of death.

    Reminder:

    On MFJ claims, the surviving spouse must sign as a surviving spouse. Correspond if missing.

  6. If correspondence is required for any missing signature, forms, or schedules, do not address the correspondence to the deceased taxpayer.

    1. If the return is filing status 2, then address correspondence to surviving spouse

    2. For all other filing status, address correspondence with "Estate of" placed in front of the taxpayer's name (e.g., Estate of John Smith Decd)

      Note:

      A Power of Attorney (POA) becomes void upon taxpayer's death.

  7. Documentary evidence is not required for the authority to sign the following:

    1. Balance due returns

    2. Zero/even balance returns

    3. Married filing joint (FS 2) or married filing separate (FS 3) returns signed by the surviving spouse

Releasing Screened Returns

  1. To release forms that are screened, sort into batches for each category and follow local routing procedures (including Batch Transmittal).

  2. "Hand carry" statute returns to the area following local procedures.

  3. For "PECF Dummy" returns to be processed through ISRP, notate the correct Program Code and Blocking Series for Batching and Numbering function.

  4. Follow IDRS screening procedures for sorting and routing returns or correspondence to another function. For Carryback/Carryforward claims, Disaster Claims, Injured Spouse, Innocent Spouse, Statute returns, etc., follow local procedures for routing to CIS/AM.

Transaction Code (TC) 971 and Action Codes
  1. A TC 971, when input with one of the action codes (AC) below, indicates the taxpayer filed an amended return and begins an action trail for the document. The action code indicates where the return was routed. Since some of these actions generate a TC 977 on master file and a "-A or E-" freeze on IDRS, the received date of the Form 1040-X must be input for the transaction date. For AC 270, the current date is entered when mailing a refund return back to the filer. Generally, do not enter an action code if you are only routing correspondence or form attached to a Form 1040-X.

    Exception:

    Form 8938 requires an action code. (e.g., Input AC 698 even when routing to Files, CIS/AM etc.)

  2. The action codes most frequently used by Code and Edit in conjunction with TC 971 are as follows:

    Action Code Destination
    010 Amended return/claim forwarded to Accounts Management (Automatically input by CIS)
    120 Amended return/claim in Submission Processing
    012 Collection (When routing the entire return)
    013 EXAM/Frivolous
    014 Statute function
    015 Underreporter function
    016 Destination International Cases amended returns/claims go to Philadelphia (Automatically input by CIS)
    065 Form 8857, Request for Innocent Spouse Relief (and Separation of Liability and Equitable Relief), filed. Route to Covington, KY.
    071 Form 8379, Injured Spouse Claim and Allocation
    111 ID Theft
    113 Total AOTC, CTC and/or EIC amounts that were disallowed due to the PATH Act.
    134 IVO or CI SDC. See IRM 3.11.6.4.8.
    270 Amended return sent back to the taxpayer for additional information. Enter the current date as TRANS-DT.
    698 Form 8938, Statement of Foreign Financial Assets, attached to Form 1040-X. If Form 8938 is the only issue, send entire package to Files. If other issues are involved, process as normal and keep Form 8938 with claim.

    Note:

    For further information, see TC 971 action codes in Document 6209, IRS Processing Codes and Information.

Forms 1040-X Processed through the Integrated Submission and Remittance Processing (ISRP) Input

  1. The following returns may be prepared or edited by the 1040-X Unit for input through the ISRP system instead of IDRS:

    1. PECF "Dummy" returns when the filer has checked one or both PECF boxes on the Form 1040-X. See IRM 3.11.6.3.4.

    2. An "original" return is prepared by IRS from data shown on a Form 1040-X when no TC 150 has posted for a statute return. The 1040-X unit will convert the Form 1040-X to a Form 1040 and route to Statutes instead of ISRP. See IRM 3.11.6.4.4.

  2. To release returns processed through ISRP, a transmittal to Batching is prepared and Program Code 44400 for the "Dummy PECF" returns is notated. Any return that is sent to Code and Edit to be processed as an original will be blocked in the correct series by Batching.

Screening Criteria for Processable Return

  1. Before inputting any changes to a Form 1040-X, check for any issue(s), freeze codes, transaction codes, math error condition, tax period, No TC 150, etc. that require routing to another area. See IRM 3.11.6.13.

  2. If the return is not routed to another area, then check for the following items that may require correspondence or additional action if missing or invalid:

    • Primary TIN

    • Tax period

    • Signature

    • Received date

    • Presidential Election Campaign Fund (PECF) boxes checked requiring preparation of a "dummy return"

    • Forms, schedules, or other required information

  3. Unless otherwise specified, input the adjustment if the claim is processable, does not meet route-out criteria, or require correspondence.

Transaction Code (TC) 150 Research (No TC 150)

  1. All amended claims require a posted TC 150, unless specifically instructed. TC 150 indicates the Master File Entity was created from the posting of a return on the taxpayer’s account.

  2. The posted TC 150 must have a POSTED date. If the posting date shows 00000000 or is blank treat as a NO TC 150. After verifying the account, suspend the amended return until Posting Cycle 22.

    Note:

    If the amended return is received Posting Cycle 21 or later and the posting date shows 00000000 or is blank, then suspend the case for 14 days per local procedures. After the 14-day suspense period follow normal processing procedures.

  3. Research IDRS for a TC 150 for the tax period indicated on the return. If the figures on the return or the data on IDRS support a different tax period for either the Form 1040 or Form 1040-X, edit the correct tax period onto the return. If the tax period is missing, see IRM 3.11.6.3.2.

    Note:

    If the tax period is missing, use these same instructions for determining the appropriate tax period. If unable to determine the correct tax period, refer to IRM 3.11.6.3.2 paragraph 3.

  4. If no TC 150 has posted for the same tax period, follow the steps below to research for a TC 150.

    1. Look though entire return packet for a different TIN for the primary taxpayer, including taxpayer’s explanation.

    2. If a joint return, research for the TC 150 using the spouse's TIN.

    3. Research for the TIN. See IRM 3.11.6.3.1. If research shows the TC 150 for the primary or secondary taxpayer was filed under a different TIN:
      - If the case is controlled, close the generic control base.
      - Under the TIN that has the TC 150 posted, open a control base to your IDRS number and use SPX-1040X as the activity.
      - Close the case to MISC.
      - Input a TC 971 AC 120.
      - Make a screen print of the IMFOLT, showing the TIN and posted TC 150, and attach it just below the entity section.
      - Route to CIS/AM.

    4. Research the invalid side for a TC 150. If a TC 150 is present on the invalid side, route to CIS/AM.

    5. Research CC ERINV to see if the return is in ERS inventory; if present route to ERS. If not present in ERINV, then route to CIS/AM.

      Exception:

      If the ERS Status is "100" , suspend for 5 working days then continue processing.

    6. Research CC TRDBV for tax data. If the tax data is present and/or is pending (must be present on primary taxpayer for MFS (FS 3)) suspend case for 60 days from the received date and monitor for the TC 150 to post. A Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, will not post as a TC 150. See paragraph 5 below for instructions on suspending the return.

      Exception:

      Treat any status indicator containing REJECTED, DELETED OR VOIDED on CC TRDBV as if there is no tax data present (no TC 150). All other status indicators represent tax data (unpostable, resequenced, resequencing, posted with MFT update, etc.).

      Exception:

      If you find Master File information on CC TRDBV, but there is not information posted on MFT 30 research CC IMFOLI to see if information has posted to MFT 32 which is where Identify Theft accounts are moved for resolution. Treat as identity theft and route. See IRM 3.11.6.4.3.

    7. If there are dependents present on the return, research for a different TIN for the primary taxpayer using CC DDBKD or CC DUPED.

    8. Research using the IAT Name Search Tool for both the taxpayer and the spouse to verify the taxpayer has not previously filed under a different TIN. It may be necessary to use multiple name combinations in order to locate the TC 150.

  5. If the following TC 150 responses are found on CC TXMOD, take the following action:

    • RJ 150 Rejected Transaction, follow paragraph (4)e above.

    • Unnn 150 Unpostable, suspend for 45 days from today (where nnn represents the unpostable number).

    • CU150 Corrected Unpostable, suspend for 10 days from today.

    • PN 150 Pending Transaction, suspend for 10 days from today.

    Monitor CC IMFOLT for the TC 150 to post following local procedures. If the TC 150 has not posted after the suspense period, route to CIS/AM.

  6. If a TC 150 is found, continue processing unless:

    1. It is a Form 1040 with no Form 1040-X. See IRM 3.11.6.6.4.

    2. There is a previous posted/pending TC 29X. See IRM 3.11.6.6.5.

  7. If no TC 150 is found after all research has been exhausted and:

    1. No Form 1040 is attached, see IRM 3.11.6.6.2.

    2. Form 1040 is attached, see IRM 3.11.6.6.3.

    3. No Form 1040-X is attached, see IRM 3.11.6.6.4.

    4. For Statute year return see, IRM 3.11.6.4.4.

  8. Specific instructions to route without a posted TC 150 take priority over suspending or routing to Batching as NO TC 150.

Form 1040-X with No Form 1040 Attached (No TC 150)

  1. After researching for a TC 150 per IRM 3.11.6.6.1, follow the instructions below.

  2. If no return has been filed, suspend case for 60 days from the IRS received date. When suspending a return for No TC 150:

    1. If a tax module has not been established for the amended return, use CC ACTON to establish a dummy module. This occurs more often on a return with a TC 904.

    2. CC MFREQD should not be used if the taxpayer has never previously filed a return.

    3. If the taxpayer previously had an ITIN or IRSN and is switching to a valid SSN and the return needs to be suspended, then suspend the return using the SSN.

    Note:

    If disaster is indicated on Form 1040-X and no TC 150 has posted, follow local procedures to expedite to CIS/AM, IRM 3.11.6.4.1.

  3. If at the end of 60 days there is still no posted or pending TC 150:

    1. If there are payments on the account indicating a balance due or a tax increase/credit decrease on the amended return, then route the return to CIS/AM.

      Note:

      If CIS/AM returns the claim with an indication to "process as original," convert the Form 1040-X to a Form 1040 or Form 6114, following local procedure, then route to Batching.

    2. If there are no payments on the account, no tax increases/credit decreases on the amended return, then return the claim to the taxpayer. Use Form 8009-A to return claim. For Box 7 fill-in: We have no record of receiving your original return or we are unable to process your original return, therefore we cannot process your Form 1040-X, Amended U.S. Individual Income Tax Return. Please complete a new Form 1040 including your amended changes and mail back to us. Do not attach the Form 1040-X we are returning with this letter.

      Note:

      For APO/FPO/DPO addresses, convert Form 1040-X to a Form 1040 or Form 6114. Input CC ACTON history of "X2150" and route to Batching.

  4. If the Form 1040-X is returned undeliverable and a TC 150 is still not on the account:

    1. Research for a better address. See IRM 3.11.6.11.7. If a better address is found, send the 1040-X with Form 8009-A back to the taxpayer.

    2. If a better address is not found during research:

    And Then
    Form 1040-X has payments on the account Refer to CIS/AM.
    Form 1040-X has no payments on the account Treat the Form 1040-X as classified waste.

Form 1040 Attached to Form 1040-X

  1. After researching for a TC 150 per IRM 3.11.6.6.1, follow the instructions below.

  2. Sometimes the 1040-X Unit will receive Forms 1040 attached to Form 1040-X. Determine if the attached Form 1040 and Form 1040-X is for the same or different tax period.

  3. If the Form 1040 is for a different tax period than the Form 1040-X and:

    1. Form 1040 is being used as "support" for a carryback loss, keep the two returns together and treat as a carryback/carryforward claim.

    2. No TC 150 has posted for the tax period of Form 1040, detach Form 1040. Continue processing Form 1040-X.

  4. When processing or suspending a Form 1040 attached to Form 1040-X, staple the Form 1040 behind Form 1040-X.

    Note:

    If Form 1040-X is not signed, see IRM 3.11.6.6.7 paragraph 4.

  5. If no TC 150 has posted for the same tax period, take the following action based on the chart below.

      If no TC 150 and Then
    1. Form 1040 does not match the Correct Amount, Column C, of Form 1040-X

    Note:

    Form 1040 may be notated "As originally filed"

    1. For Form 1040-X:

      1. Convert taxpayer's Correct Amount figures using a Form 6114 or current year Form 1040, following local procedures.

      2. "X" Form 1040-X and staple Form 1040-X behind Form 1040 with any supporting documents.

      3. If Form 1040-X is signed, edit a notation the 1040-X is signed in the signature area of the conversion sheet.

    2. Staple Conversion Sheet to the front of the Form 1040, but below the entity section.

    3. Route to Batching to be processed as an original return.

    2. Form 1040 does match the Correct Amount, Column C, of Form 1040-X,

    Note:

    Form 1040 may be notated with "As Amended"

    1. XForm 1040-X and staple it behind Form 1040 with any supporting documents.

    2. For Form 1040:

      1. Edit "No TC 150," the date and TE Stamp in the upper left margin of Form 1040.

      2. On the front page of Form 1040, circle out any indication that Form 1040 is amended, corrected or a copy.

      3. If Form 1040 is not signed and Form 1040-X is signed, edit a notation the 1040-X is signed in the signature area of Form 1040.

    3. Route to Batching to be processed as an original return.

    3. Two Forms 1040 are attached to a Form 1040-X
    • One may be notated As originally filed and does not match the correct amount column

    • The second may be notated As amended and matches the correct amount column

    1. X both Form 1040-X and the Form 1040 As originally filed. Staple them behind Form 1040 As amended with any supporting documents.

    2. For Form 1040 As amended

      1. Edit No TC 150, the date and TE Stamp in the upper left margin of Form 1040.

      2. On the front page of Form 1040, circle out any indication that Form 1040 is amended, corrected or a copy.

      3. If Form 1040 is not signed and Form 1040-X is signed, edit a notation the 1040-X is signed in the signature area of Form 1040.

    3. Route to Batching to be processed as an original return.

    Note:

    If routing a Form 1040 to Batching that was received after April 22nd or the Form 1040 is a prior year and the received date is missing, edit the received date from the Form 1040-X onto the Form 1040.

Amended Form 1040 with No Form 1040-X Attached

  1. Research for a TC 150 per IRM 3.11.6.6.1. If no TC 150 has posted, circle out any notation that suggests the return was previously filed. Edit No TC 150 and the current date in the upper left margin and send to Batching to be processed as an original return. Do not notate PAO on the documents.

    Note:

    When it appears that Code & Edit has corresponded for a signature (i.e., Form 3531 attached or notated in the working trail) and the return is still unsigned follow normal procedures to route to Entity.

  2. If an undeliverable return is received see IRM 3.11.6.11.7.

Duplicate Returns

  1. A duplicate condition occurs when the taxpayer files a return that matches the most recent adjustment/filing figures. Further research is required to determine processing.

  2. Prior to treating any return as a duplicate, review the return and attachments for routing criteria. If routing criteria is located, follow the appropriate procedures.

    1. If the return is a duplicate but the taxpayer is requesting an additional action, follow general processing procedures.

    2. Research IDRS for taxpayer correspondence. Research the type of letter(s) that have been sent. Route to the originating area following local procedures. This includes the 12C letter requesting a taxpayer signature.

    3. When it appears that Code and Edit has corresponded for a signature (Form 3531 attached or notated in the working trail) and the return is still unsigned. follow normal procedures and route to Entity.

    4. If the return is a duplicate, do not correspond for missing forms, schedules, or signature(s).

  3. Continue researching to determine the reason the taxpayer filed the form.

    If And Then
    The taxpayer has requested a processable change that does not cause a change to a line item dollar amount
    1. The action has a specific reason code

    2. The action does not have a specific reason code

    Input a TC 290 .00 with:
    1. the appropriate reason code.

    2. Reason code 099.

    No change and no action is required   Input a TC 290 .00 without a reason code.

    Note:

    If there is a prior pending adjustment, input a post delay code.

  4. Once a Form 1040/A/EZ/SR is identified as an amended return and it will revert the module back to the original filing, look for any indication as to why. If no indication is found, then treat the return as classified waste following local procedures. If an active Combat Zone return, see IRM 3.11.6.4.22 will revert the module to the original filing, input a TC 290 .00 without a reason code.

Claims Returned from Other Areas

  1. Claims routed to another function may be returned for processing.

  2. Determine if the return requires:

    • Routing to the next highest priority. Circle out previous working trails.

    • Additional research.

    • Input the adjustment (the return has been cleared from the area/function it was routed).

  3. If an adjustment is input, add "Adjusted per XXXX" in the remarks.

  4. Cases returned from another area for processing may not meet SP criteria. If so, route to CIS/AM.

Signature

  1. The taxpayer must sign the claim or amended return requesting an adjustment; or a valid Power of Attorney (POA). Both spouses must sign if the adjustment is related to a joint return. The signature(s) is required anywhere below the jurat (perjury statement), but not in the paid preparer section on amended returns and CP Notices. If an original signature is not present, correspond using IRM 3.11.6.11 and/or IRM 3.11.6.12.

  2. If the jurat has been altered, treat it as a Frivolous claim. If the jurat is missing, treat it as an unsigned return and correspond for the missing signature(s) using a 324C Letter to obtain the signature. Do not mail the return back to the taxpayer. Process the net balance due per IRM 3.11.6.11.1.

    Exception:

    If page 2 is missing on the new Form 1040-X, do not treat as missing jurat. Follow procedures for missing signature.

  3. Do not correspond for a missing/incorrect signature(s) if:

    1. Any "Dummy" return that was prepared by the IRS.

    2. A fiduciary representative or parent for other than a minor child signs for a refund under $100 or a balance due.

    3. Form 2848, Power of Attorney and Declaration of Representative, with Part II completed and is attached to the return, see IRM 3.11.6.6.8.

    4. The return is a duplicate.

    5. Taxpayer files MFS (FS 3) and spouse did not sign the return.

    6. The return is a substantiated math error response.

    7. The claim meets route out criteria unless otherwise specified.

      Note:

      For decedent returns, see IRM 3.11.6.4.24.

  4. If Form 1040-X is not signed, however a Form 1040 matching the Correct Amount column of Form 1040-X is attached and signed, accept the signature and continue processing the return. Edit a notation onto the signature line, if present, on Form 1040-X indicating that the Form 1040 is signed. Otherwise edit the notation on the front bottom portion of Form 1040-X.

  5. Correspond for the signature of two witnesses when the taxpayer signs with a mark such as an "X" . See IRM 3.11.6.11.

  6. Joint returns require the signature of both taxpayers unless one of the taxpayers falls into one of the categories below:

    1. One spouse is overseas and the signing spouse is authorized by a power of attorney (e.g., Form 2848) or similar signed document which clearly defines the scope of authorization granted to the POA.

    2. One Spouse is in a combat zone/qualified hazardous duty area and the signing spouse attaches a statement.

    3. One spouse is incapacitated. The signing spouse should attach a dated statement explaining the reason the incapacitated taxpayer cannot sign. The signing spouse will sign on his/her signature line as well as the spouse's signature line.

      Caution:

      Incapacitated means the taxpayer is physically unable to sign the return. In the case of a mentally incompetent taxpayer a court appointed representative who can act for the taxpayer must sign the tax return.

    4. If MFJ return with only one signature and the taxpayer is divorced or separated, route to CIS/AM.

  7. If the taxpayer is a minor (there must be a clear indication the child is a minor) the return must be signed by one of the following:

    1. The minor child

    2. A parent

    3. A guardian or other fiduciary representative ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    4. A guardian or other fiduciary representative with documentary evidence is attached

    5. If none of the above applies, correspond for a missing signature. See IRM 3.11.6.11

      Examples of Fiduciary representatives include:

      • Administrator (ADM)
      • Conservator (CONS)
      • Custodian (CUST)
      • Executor (EXEC)
      • Guardian (GDN)
      • Personal Representative (PER REP)
      • Trustee (TTEE)
  8. When corresponding for signature issues:

      If And 324C Letter Form 8009-A
    1. A signature is missing Conditions in paragraphs 4 and 6 do not apply Paragraphs: A, P, 6, and c Box 1
    2. A signature is missing on a decedent return The return is not signed by a surviving spouse, an executor, or an administrator Paragraphs: A, P, 6, and c using fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, must be signed below the jurat beginning with "Under penalties of perjury" but not on the paid preparer line. Additionally, if one spouse is deceased, then the surviving spouse must sign the return indicating "Filing as Surviving Spouse" in the signature area and include the date of death.

    Note:

    Do not address correspondence to the deceased taxpayer.

    Box 1

    Exception:

    Do not use Form 8009-A to correspond on refund returns.

    3. A signature is someone other than the taxpayer (there is clear indication that the TP is a minor child) A parent did not sign, or fiduciary relationship such as a Guardian is clearly identified and the tax decrease/credit increase ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ A, P, 6, and c Box 1
    4. The return is signed by someone other than the taxpayer The following apply:
    1. No General/Durable POA is attached

    2. Form 2848 is not attached

    A, P, 6, and c Box 1

    Note:

    Include Form 2848, Power of Attorney and Declaration of Representative, as an enclosure.

    5. The return is signed by someone other than the taxpayer There is no declaration of good standing attached and POA is granted to an attorney, CPA enrolled agent, or enrolled actuary A, P, 6, and c Box 1

    Note:

    Include Form 2848, Power of Attorney and Declaration of Representative, as an enclosure.

    6. The return is signed by someone other than the taxpayer Form 8821, Tax Information Authorization, is attached and the appointee signed the return A, P, 6, and c Box 1

    Note:

    Include Form 2848, Power of Attorney and Declaration of Representative, as an enclosure.

    7. The return is signed with an “X” Two witnesses did not sign A, P, 6, and c Box 1
    8. The jurat is missing

    Note:

    if the jurat has been altered route as Frivolous

    There is no amended Form 1040 attached or if attached the jurat is missing A, P, 6, and c Send 324C letter and do not mail the return back.

Centralized Authorization File (CAF) - Form 2848, Power of Attorney (POA) and Form 8821 (TIA) and General /Durable POAs

  1. The CAF maintains a database of authorized representatives who are permitted to sign for the taxpayer. The CAF unit will assign unique identifiers (CAF numbers) to the representative(s) based on Form 2848, Power of Attorney and Declaration of Representative (POA), and acceptable General/Durable POAs submitted.

  2. Taxpayers will occasionally submit a tax return that has been signed by their enrolled agent or some other representative or the taxpayer may attach a Form 2848 to indicate that they want a representative to be able to sign for them. These personal representatives of the taxpayer must submit a Form 2848 (Part II completed) or acceptable General/Durable POA or already be on file with the CAF in order to sign the return.

    Note:

    For married filing joint (FS 2) accounts, each taxpayer must execute their own power of attorney or tax information authorization on a separate 2848 even if the same representative/appointee is provided.

  3. Taxpayers may also submit a Form 8821, Tax Information Authorization and Declaration of Representative (TIA), as documentary evidence for signing the tax return; however, Form 8821 does not authorize the signing of the return. If Form 8821 is present, detach and follow the routing instructions in paragraph 7. Correspond for a Form 2848 if the taxpayer submits a Form 8821 and the return is signed by someone other than the taxpayer. Refer to IRM 3.11.6.11 and use either Form 8009-A, box 1, or a 324C letter with paragraphs A, P, 6, and c.

  4. When the taxpayer submits a General/Durable POA, leave the document attached to the return and continue processing.

  5. Use CC CFINK to verify attached Form 2848 per the table below. Instructions to detach and route Form 2848 should be followed even if the amended return is routed to another area or if correspondence will be sent.

    Note:

    If unable to verify a matching Form 2848 is already posted in CC CFINK, route Form 2848 to CAF per local procedures. Route Form 2848 even if incomplete.

    If And Then
    The signature on the return matches a representative listed on CC CFINK or the 2848 is already on file SIGN: field on CC CFINK is marked YES Continue processing the return.
    The signature on the return does not match a representative listed on CFINK, or no record is found,
    or SIGN: field on CC CFINK is marked "NO"
    1. Form 2848 is attached

    2. Form 2848 is not attached

    1. Detach Form 2848

      1. Route Form 2848 to the CAF unit per local procedures.

      2. Continue processing the 1040-X return.

      3. Leave an action trail on the amended return and Form 2848.

    2. Correspond for Form 2848 per IRM 3.11.6.11 and use either Form 8009-A, box 1, or a 324C letter, paragraphs A, P, 6, and c.

    Taxpayer signs the return and Form 2848 is attached The representative(s) is not listed or there is a change to the type of Authorization on CC CFINK
    1. Detach Form 2848 and route to the CAF unit per local procedures.

    2. Continue processing the 1040-X return.

    3. Leave an action trail on the amended return and Form 2848.

  6. If Line 4 of Form 2848 or Form 8821 is checked, continue processing the return, do not detach or route to the CAF unit.

  7. Use the following addresses when routing a Form 2848 or Form 8821 to a CAF Unit:

    SP 1040-X Site Fax Numbers Address
    Kansas City and Austin 855-214-7519 Internal Revenue Service
    5333 Getwell Rd.
    Stop 8423
    Memphis, TN 38118
    Fresno and Ogden 801-620-4249

    855-214-7522
    Internal Revenue Service
    1973 N Rulon White Blvd
    Mail Stop 6737
    Ogden UT 84201
  8. Do not detach any "Worksheets" provided by the military to personnel assigned to a Combat Zone. They are not considered to be a POA in lieu of Form 2848. See IRM 3.11.6.4.22.

  9. If correspondence is attached to the return that is unrelated to the amended return but needs to be detached and routed to the appropriate functional area, attach a photocopy of the POA/TIA to the correspondence. Indicate that the form has been detached and routed to the CAF unit.

Processing Form 1040-X Using IDRS for Input of Adjustment

  1. Screen the Amended Return to determine if:

    1. Route out criteria is present

      Note:

      Research IDRS for any Transaction Code or Freeze Code that require special attention.

    2. The claim is complete

    3. The claim is allowable

    4. The claim is processable

  2. The following subsections cover:

    • Entity Changes

    • Manual Refunds

    • Master File Verification

    • Math Verification

    • Setting A Math Error

    • Transaction Codes and Reference Numbers

    • IMF Processing Codes

    • IDRS Transaction Codes and Freeze Codes

    • Unpostable Conditions

Entity Changes

  1. When making any Entity changes, input the change on IDRS using CC ENREQ to generate the CC INCHG screen.

  2. Do not update the Entity section if an adjustment is not being input or the return is being routed.

  3. Input a posting delay code on any adjustment when making any changes to the taxpayer's address or name line information.

  4. If there is a pending change that affects the return you are processing, input a posting delay code.

  5. If the address on the 1040-X does not match CC ENMOD or one of the conditions below applies, update the entity.

    • Taxpayer alters the address in the Entity of the Form 1040-X or on a CP notice.

    • Taxpayer specifically indicates in the Explanation of Changes.

    • Taxpayer attaches a separate sheet or Form 8822 requesting the address change.

    Exception:

    Do not update the address if an address change has posted after the Form 1040-X received date. Use CC ENMOD to verify cycle date. If the 1040-X is received in the same cycle that an address change has posted then update the address to the address on the 1040-X.

    Note:

    If working a Form W-7 to reactivate an ITIN, see IRM 3.11.6.4.12.

  6. If both a PO Box and a street address are present on Form 1040-X, input the PO Box on the address line and the street address on the continuation of the name line. If the city and zip code differ between the PO Box and the other address listed use the city and zip code of the PO box.

  7. The In-Care-Of (C/O) is considered part of the address. If the entity information on IDRS shows an In-Care-Of person, but the amended return does not, update the Entity on IDRS and vice-versa. Use CC INCHG filed CONTINUATION-OF-PRIMARY NAME to update In-Care-Of information.

  8. If the address on the amended return appears to be incomplete, research the return packet for the missing information or use www.USPS.com to verify the address.

  9. For address changes on multiple year returns from the same taxpayer, use the address on the most current return.

  10. If the filer used Form 1040-X instead of Form 8822 to inform us of an address change and there is no tax adjustment, input a TC 290 .00, Reason Code 099, Source Code 1. Update the address and process the return.

  11. If the taxpayer requests their refund to be issued in a name or address other than the one shown on the adjustment, route to CIS/AM per IRM 3.11.6.7.2.

  12. When Form 8822 is attached and the Form 1040-X is being routed, detach Form 8822, route to Entity Control per local procedures.

  13. A signature (both if MFJ) is required before an address change can be input. If signature correspondence is required, use the address of record.

  14. Follow the instructions in the table below when a name change is requested:

    If Then
    Taxpayer files a Form 1040-X to indicate a name change only Check CC INOLE for NEW SSA/NC or SSA:
    1. If the name control on Form 1040-X matches NEW SSA/NC or SSA, input TC 290 .00 and route to Files. Do not update the name.

    2. If the name control on Form 1040-X does not match new SSA/NC or SSA, route the return to Entity with the annotation: Name change request -- do not process 1040-X.

    Taxpayer files a Form 1040-X to indicate a name change and tax changes are also required Check CC INOLE for NEW SSA/NC or SSA:
    1. If name control on Form 1040-X does match new SSA/NC or SSA, continue to process the return, if no route out criteria is present. Do not update the name.

    2. If the name control on Form 1040-X does not match NEW SSA/NC or SSA, route to CIS/AM.

    Note:

    Taxpayers will sometimes use variations of their first name, including using initials when filing original (verification is performed by matching the name control to the SSN) and amended returns This is not considered an indication of a name change unless the taxpayer is specifically asking for a name change. If the taxpayer is requesting to change the name the table above would be followed.

    Exception:

    Input name change only if there is a clear indication that the name was transcribed incorrectly (e.g., SMITH transcribed as SMTH).

  15. Use the following chart when making a filing status change:

    If the taxpayer changes the filing status on Form 1040-X: And Then
    To FS 1 (Single)   Update INCHG to FS 1. Use RC 001.
    To FS 2 (Married Filing Jointly)   Update INCHG to FS 2. Use RC 002. See IRM 3.11.6.7.1.1.
    To FS 3 (Married Filing Separate) From FS 1, FS 4, or FS 5 Update INCHG to FS 3. Use Reason Code 003. Enter the spouse’s SSN if known.
    From FS 3 (Married Filing Separate) Changing to FS 1, FS 4, or FS 5 The spouse’s SSN field may populate with 000-00-0001. This action removes the cross-reference and should not be altered. When manually changing from FS 3, input the spouse’s SSN following this example.
    • From FS 2 (Married Filing Joint)

    • To/From FS 6 Married filing separate return and spouse is not required to file a return and spouse exemption is claimed

      Refer to CIS/AM.
    To FS 4 (Head of Household) The taxpayer is claiming:
    1. A dependent (name/TIN matches CC INOLE)

    2. A non-dependent (name and QND are provided or claimed for EIC)

    3. Any of the information in 1 or 2 is missing or does not match

    1. Update INCHG to FS 4. Use RC 004.

    2. Update INCHG to FS 4. Use RC 004.

    3. Correspond per IRM 3.11.6.11 using either Form 8009-A or a Letter 324C. For Form 8009-A, use box 7 and fill-in: Please provide the name of the person who qualifies you as Head of Household. For a Letter 324C, use paragraphs A, F, G, 6.

    To FS 5 (Qualifying widow(er))   Update INCHG to FS 5. Use RC 005.

    Note:

    SP will not adjust any account that requires backing out tax information or merging the accounts. These will be Routed to CIS/AM.

    Note:

    The taxpayer may sometimes combine their standard deduction with their personal exemption on 2017 and prior returns.

  16. If a Form 1040-X is received requesting a filing status change, and a TC 971 AC 137 is present on the module, route to CIS/AM.

Filing Status 2 Changes
  1. For FS 2 (MFJ) changes, research for a TC 150 on both the primary and secondary taxpayer's account. Use CC NAME to verify the taxpayer has not previously filed under a different TIN for the tax year that you are working. If both taxpayers have a TC 150 posted, route to CIS/AM.

    Note:

    If the spouse’s account is set up on the invalid segment of Master File (an asterisk after the TIN (000-00-0000*), refer to CIS/AM.

  2. For the tax year in which you are working, if one spouse did not previously file a return, adjust the established account of the taxpayer that has filed, to reflect the amended joint return.

    Exception:

    If the non-filed taxpayer has income that exceeds the exemption amount in IRM 3.11.6.10.1.3and the ASED is less than one year from the IRS Received Date, then route to CIS/AM.

  3. Refer the following to CIS/AM, if any of the following conditions apply to the account of the taxpayer who did not previously file:

    • If a TC 140 is present

    • If a TC 460 is present

    • If an E- freeze is present

    • Any available credit or payments will need to be transferred to the primary account

    Note:

    When researching spouse, search for ID Theft markers. See IRM 3.11.6.4.3.

  4. When editing (adding, replacing, changing, and/or deleting) a spouse, update the DUPOL database using CC DDBCK to correct the filing status and the secondary’s information (including EX/DP and Education Credit, if applicable). When DDBCK is not available use CC DUPED. See IRM 3.11.6.8.

  5. When adding a spouse, perform thorough research, to verify spouse’s name and TIN using IDRS and attachments. If a TIN is obviously inappropriate, for example (111-11-1111) or (123-45-6789) or a similar TIN configuration, missing, incorrect, or illegible, see IRM 3.11.6.3.1.

  6. When the taxpayer adds a spouse that has an ITIN, research CC INOLE for the current ITIN status. See IRM 3.11.6.3.1.1 for processing instructions.

  7. If the spouse is changing from an ITIN to a valid SSN, refer to CIS/AM. See IRM 3.11.6.3.1.

  8. The Form 1040 has two separate lines available for taxpayers to use when filing jointly, Masterfile contains only one primary name line. There are 35 characters/spaces available for both taxpayer names. The bracket "]" is interpreted as a space. Do not use the second line as a continuation of the name line

  9. The entering of two brackets around the PRIMARY taxpayer’s last name is required when the SECONDARY taxpayer’s last name is different than the primary taxpayer’s last name. Do not input an additional space before or after the bracket when entering taxpayer names. The ampersand indicates a break in joint filers’ names.

  10. The correct method to input name changes are shown below: The italicized print indicates the primary taxpayer’s name control.

    Tax Return Input Format for Joint Filers
    a. John Doe
    Mary Doe
    John & Mary]Doe
    b. John Doe
    Mary Smith
    John]Doe]& Mary Smith
    c. John Doe
    Mary Smith-Doe
    John]Doe]& Mary Smith-Doe
    d. John D Doe
    Mary Ann Smith- Doe
    John D]Doe]& Mary Ann Smith-Doe
    e. John D Doe III
    MaryAnn L Smith
    John D]Doe]III & MaryAnn L Smith
    f. John D Doe Jr MaryAnn L Doe John D Jr & MaryAnn L]Doe
  11. Before shortening taxpayer name(s), all necessary research must be conducted (i.e., CC INOLE, CC RTVUE, CC IMFOL, CC NAMES, CC NAMEI) under both segments of the Master File.

  12. When taxpayers file jointly and it is necessary to reduce the taxpayers’ Name Lines/Name Controls, it is important to retain the first four characters of the secondary taxpayer’s surname.

  13. If the primary and/or secondary name(s) exceed the 35 character/space limit, use the following information to correctly reduce the taxpayer’s name:

    • Substitute the appropriate initial for the secondary taxpayer’s middle name

    • Delete middle initial of secondary taxpayer

    • Substitute the appropriate initial for the primary taxpayer’s middle name

    • Delete middle initial of primary taxpayer

    • Substitute the appropriate initial for the secondary taxpayer’s first name

    • Substitute the appropriate initial for the primary taxpayer’s first name

    • Substitute the appropriate initials for both the primary and secondary taxpayers' first name(s) if their last name(s) total characters exceed the 35 characters/spaces limit

    • Abbreviate the secondary taxpayer’s surname. Abbreviate the surname by removing the vowels (begin with the vowels at the end of the secondary taxpayer’s surname first)

      Example:

      OSullivan becomes OSullivn or OSullvn (if necessary)

    • Abbreviate the primary taxpayer’s surname as the last step. Abbreviate the surname by removing the vowels (begin with the vowels in the end of the primary taxpayer’s surname)

      Example:

      Sorrentino becomes Sorrentin or Sorrentn (if necessary).

Manual Refund

  1. Route cases to Accounts Management for a Manual Refund if:

    1. The taxpayer requests the refund issued in a name other than shown on master file.

    2. The taxpayer requests the refund issued to a temporary address.

    3. Refund is less than one dollar.

    4. Refund is $10 million or more.

Master File Verification and Math Verification

  1. Master file verification is required on all amended returns, CPs, and any miscellaneous claim adjustment prior to:

    • Inputting an adjustment

    • Initiating correspondence

      Exception:

      Master File Verification is not required when corresponding for a missing tax period or TIN, or when a return has been perfected.

  2. Master File Verification requires the comparison of lines 1-15 Column A on Form 1040-X, with CC IMFOL or CC TXMOD.

    1. If any combination of lines in Column A do not match CC TXMOD and no math error (MTH-ERR) is present, then math verification is required.

    2. Be sure to consider all previous adjustments.

    3. When Column A does not match and an amended Form 1040 series is attached, matching Column C, adjust to the Column C amount(s).

    4. For single page returns with a payment made within a few days of the received date or "W-7" stamped returns, research IDRS to determine if it was for a payment or ITIN renewal only. If the preceding scenarios are applicable, treat as a duplicate return. See IRM 3.11.6.6.5.

  3. When the amount shown on a supporting form or schedule differs from the amount shown on the Form 1040-X:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ adjust using the 1040-X amount

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ correspond using a Form 8009-A (box 7) or 324C paragraphs A, 3, and 6 using fill-in: We are unable to correct your account as requested. The information provided on [insert Form or Schedule number] does not support the entry made on your Form 1040-X, Amended U.S. Individual Income Tax Return. Please provide clarification and correct any documentation necessary to support your claim.

  4. When a dependent is being removed you must also verify the taxpayer is removing credits associated with that dependent.

  5. Math verification is required when one or more of the following are met:

    1. There is a total tax change (positive or negative) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Column A entries do not match TXMOD or IMFOL (no math error code is present) and paragraph (2)(c) above does not apply.

    3. A math error is present. Also see IRM 3.11.6.7.4.1.

    4. There are amounts that are blank, illegible or incorrect.

    Exception:

    Math Verification is not required when the claim does not meet SP criteria, the entry is off by a dollar due to rounding or the error can be determined to be a misplaced entry that results in no difference between the taxpayer’s expected refund/balance due and the overall adjustment being made.

  6. Math verification includes doing the following:

    1. Verifying the math on the entire amended return, including any forms, schedules and worksheets that are related to the change.

    2. Verifying the taxpayer’s modified entries using the forms attached to the claim, schedules, worksheets, taxpayer remarks, and IDRS research.

    3. Verifying the corrected tax computation.

    4. Verifying any additional taxes on line 10 as reported by the taxpayer are calculated correctly.

    5. Verify all income-based items on claims involving an income change. Recalculate the items when the income changes, even if the taxpayer does not address them.

  7. If you are unable to "perfect" the return based on information submitted and through IDRS research, correspond requesting clarification:

    If Then
    There is an unexplained amount that results in a change ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ to lines 11-15, Column B Accept the amount and adjust using the taxpayer’s Column B figures.
    The taxpayer's Column A figures (original amount) do not match IDRS Use either Form 8009-A box 7 or a 324C letter paragraphs A, 3, and 6 with fill-in: We are unable to correct your account with the information you provided on your Form 1040-X, Amended U.S. Individual Income Tax Return, as it is unclear what adjustment is being requested. The amounts entered in Column A, Original amount, do not match our records. Please verify your information.
    For any other reason Use either Form 8009-A with box 7 or a 324C letter with paragraphs A, K, 3, and 6. Use Fill-in: We are unable to correct your account with the information you supplied on your Form 1040-X, Amended U.S. Individual Income Tax Return, and/or supporting documents as it is unclear what adjustment is being requested. Please correct the appropriate column(s) and/or supply an explanation and tell us what changes you made to your income, deductions, and/or credits and the amount and reason for each change.
  8. When math verifying the return and an error is discovered, re-compute the correct amounts using the information supplied and IDRS research. After perfecting the Total Tax (line 11) and the computed lines 12 - 15 amounts are:

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , adjust using the taxpayer’s figures.

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ , adjust the account using your recomputed figures see IRM 3.11.6.7.4.

Inputting a Corrected Adjustment and/or Setting a Math Error

  1. Use the following chart when the IRM states to send a 474C letter based on the condition(s).

    If Then
    • Lines 16 - 22 of Form 1040-X do not match

    • Missing/incorrect entries do not affect the overall adjustment

    • The corrected adjustment results in no difference between the taxpayer’s expected refund/balance due

    Continue processing the return. Do not issue a 474C or set a math error.
    • The taxpayer is requesting a credit already received and it is the only issue

    Input the computed adjustment with:
    • Blocking Series 05

    • Source Code 1

    • Send a 474C letter with paragraphs C, 1, and d, using fill-in: We did not allow (appropriate title) Credit because our records indicate that you previously received the credit as part of your original or amended return.

    • There is only a correction to withholding

    • A tax decrease results in a larger refund than the taxpayer requested

    • The taxpayer requests the IRS to complete a form, even when the tax change is $100 or more

    Do not set a math error.
    1. Input the computed adjustment with

      • Blocking Series 05

      • Source Code 1

      • Appropriate RC, RN, CRN and other appropriate coding

    2. Send an 474C with paragraphs C, 1, and d, using fill-in: Your Form 1040-X, Amended U.S. Individual Income Tax Return, is not being returned with this letter. We corrected line number (fill-in line number), because (description of error). This caused a change to your expected refund.

    • The corrected adjustment is a balance due

    • The corrected adjustment reduces the refund amount

    Issue a 474C letter and set a math error.
    1. Input the corrected adjustment using:

      • Blocking Series 77 (78 if the original was paper filed)

      • Source Code 6

      • Appropriate RN(s)/CRN(s) and RCs to process the return for the corrected amount(s) and any other issues

    2. Use the Letter button and select Write Your Own then send a 474C with:

      • Paragraphs C, G, H, 2, and d

      • For an ITIN reject, see IRM 3.11.6.4.12

    Note:

    Determine the correct adjustment by first completing Master File Verification and then researching the following: taxpayer explanation, a corrected Form 1040 series return, attachments, and IDRS research.

  2. For the 474C paragraph H:

    • Form - the type of Form used (Form 1040-X, Form 1040, etc.)

    • Line - the Form line number associated with the error

    • Your entry - the taxpayer’s figure

    • Corrected entry - the recalculated amount

      Note:

      It is not necessary to list ripple effects.

  3. If a response is received to a 474C letter, see IRM 3.11.6.7.4.1.

Math Error Response
  1. If there is a math error(s) (ME) on the taxpayer's account, then the tax examiner must determine whether or not the 1040-X addresses the math error issue. An amended return may:

    1. Not address the math error(s) on the account.

    2. Agree with the math error(s) on the account.

    3. Be a substantiated response. A substantiated response occurs when a taxpayer provides supporting documentation which proves the Service's math error calculation incorrect. Validate the substantiation by reviewing qualifications needed to allow adjustment.

      Example:

      The taxpayer's account contains math error 605, the taxpayer now provides a valid TIN that qualifies him/her for the exemption being claimed.

    4. Be an unsubstantiated response. An unsubstantiated response occurs when the taxpayer addresses the math error but does not provide required supporting documentation.

    5. Be an unsubstantiated protest. An unsubstantiated protest occurs when a taxpayer indicates they are unable or unwilling to provide required supporting documentation and they are still requesting the claim.

  2. Taxpayers often use their original figures (RTVUE per return column) in column A instead of the IRS corrected figures (RTVUE per computer column) when correcting a math error.

  3. For amended returns with math errors present:

      If Then
    1. The taxpayer files an unsubstantiated protest Refer as CIS/AM.
    2. Any additional changes result in a math error Route to CIS/AM.
    3. The ME is caused by an "ITIN Reject/No W-7" See IRM 3.11.6.4.12.
    4. The ME is caused by ITIN status See IRM 3.11.6.3.1.1.
    5. The taxpayer files an amended return and does not specifically address the math error Process as normal.
    6. The taxpayer files an amended return and does not specifically address the math error and additional changes are requested Process as normal.
    7. The taxpayer agrees with the math error Process as normal.
    8. The taxpayer agrees with the math error and additional changes are requested Process as normal.
    9. The taxpayer files an unsubstantiated response and no additional changes are requested No consider the claim and send a Letter 916C. See IRM 3.11.6.11.9.
    10. The taxpayer files an unsubstantiated response and additional changes are requested Input any allowable changes and send a Letter 916C. See IRM 3.11.6.11.9.
  4. When processing a math error response, do not correspond for forms, schedules, or signatures that were on the original return.

  5. If a taxpayer substantiates all math errors, follow the table below:

      If Then
    1. The taxpayer files a substantiated response Input one adjustment. If the math error was set on:
    1. Original return (TC 150)

      • Process the adjustment using Source Code 2.

      • No Amended Claims Date.

    2. Amended return (TC 29X)

      • Process the adjustment using Source Code 2.

      • Use the received date of the TC 29X that set the math error as the Amended Claims Date.

  6. If the taxpayer files a substantiated response and additional changes are requested, follow the table below:

      If Then
    1. The taxpayer files a substantiated response and the additional changes result in a refund Two adjustments are required. If the math error was set on:
    1. Original return (TC 150)

      • Input the math error adjustment first. No Amended Claims Date, Source Code 2, Hold Code 4, NSD.

      • The non-math error adjustment will be input second. Follow normal processing procedures and use a posting delay code for "1" cycle more than the first adjustment. SD.

    2. Amended return (TC 29X)

      • Input the math error adjustment first. Use the received date of the amended return that set the math error as the Amended Claims Date, Source Code 2, Hold Code 4, NSD.

      • The non-math error adjustment will be input second. Follow normal processing procedures and use a posting delay code for "1" cycle more than the first adjustment. SD.

    2. Neither the substantiated response nor additional changes result in a refund Input one adjustment. If the math error was set on:
    1. Original return (TC 150)

      • Process the adjustment with No Amended Claims date.

      • Use Source Code 2.

    2. Amended return (TC 29X)

      • Process the adjustment with the received date of the amended return that set the math error as the Amended Claims Date.

      • Use Source Code 2.

    3. The substantiated response results in a refund and the additional changes do not Input one adjustment. If the math error was set on:
    1. Original return (TC 150)

      • Process the adjustment with No Amended Claims date.

      • Use Source Code 2.

    2. Amended return (TC 29X)

      • Process the adjustment with the received date of the amended return that set the math error as the Amended Claims Date.

      • Use Source Code 2.

    4. The substantiated response does not result in a refund but the additional changes do Input one adjustment.
    1. Process the adjustment with the received date as the Amended Claims Date.

    2. Use Source Code 2.

  7. If the taxpayer substantiates some but not all the math errors, follow the table below:

      If Then
    1. None of the math errors require a formal disallowance Input one adjustment. If the math error was set on:
    1. Original return (TC 150)

      • Process the adjustment with No Amended Claims date.

      • Use Source Code 2.

      • Send a Letter 916C.

    2. Amended return (TC 29X)

      • Process the adjustment with the received date of the TC 29X and set the math error as the Amended Claims Date.

      • Use Source Code 2.

      • Send a Letter 916C.

    2. None of the math errors require a formal disallowance and additional changes are requested Two adjustments are required. If the math error was set on:
    1. Original return (TC 150)

      • Input the math error adjustment first. No Amended Claims Date, Source Code 2, Hold Code 4, NSD.

      • The non-math error adjustment will be input second. Follow normal processing procedures and use a posting delay code for "1" cycle more than the first adjustment. SD.

      • Send a Letter 916C.

    2. Amended return (TC 29X)

      • Input the math error adjustment first. Use the received date of the amended return that set the math error as the Amended Claims Date, Source Code 2, Hold Code 4, NSD.

      • The non-math error adjustment will be input second. Follow normal processing procedures and use a posting delay code for "1" cycle more than the first adjustment. SD.

      • Send a Letter 916C.

    3. If a formal disallowance is required for a math error

    Example:

    ME 604 is present on the account. The amended return corrects the TIN issue but TIN assignment date due to the PATH Act requires a disallowance of the related credit.

    Input one adjustment. If the math error was set on:
    1. Original return (TC 150)

      • Input the adjustment per IRM 3.11.6.11.3

      • Do not use Amended Claims date.

      • Use Source Code 2.

    2. Amended return (TC 29X)

      • Input the adjustment per IRM 3.11.6.11.3

      • Use Amended Claims date of the return that set the math error.

      • Use Source Code 2.

    4. If a formal disallowance is required for a math error and additional changes are requested Two adjustments are required. If the math error was set on:
    1. Original return (TC 150)

      • Input the math error adjustment first per IRM 3.11.6.11.3. No Amended Claims Date, Source Code 2, Hold Code 4, SD.

      • The non-math error adjustment will be input second. Follow normal processing procedures and use a posting delay code for "1" cycle more than the first adjustment. NSD.

    2. Amended return (TC 29X)

      • Input the math error adjustment first per IRM 3.11.6.11.3 and use the Amended Claims Date of the return that set the math error, Source Code 2, SD.

      • The non-math error adjustment will be input second. Follow normal processing procedures and use a posting delay code for "1" cycle more than the first adjustment. NSD.

    5. None of the math errors require a formal disallowance but the requested additional changes do Two adjustments are required. If the math error was set on:
    1. Original return (TC 150)

      • No Amended Claims Date, Source Code 2, Hold Code 4, NSD.

      • The non-math error adjustment will be input per IRM 3.11.6.11.3 using a posting delay code for "1" cycle more than the first adjustment and use SD.

    2. Amended return (TC 29X)

      • Input the math error adjustment first. Use the Amended Claims Date of the return that set the math error, Source Code 2, NSD.

      • The non-math error adjustment will be input per IRM 3.11.6.11.3 using a posting delay code for "1" cycle more than the first adjustment and use SD.

  8. For 2017 and prior, if an adjustment is made for exemptions, only input IRN 887 if the new total number of exemptions differs from the number shown in the "NUM-EXEMPT>" field on TXMOD or "TOT Exemptions:" field on IMFOL.

Transaction Codes and Reference Numbers

  1. IRN 888 is the only reference number that can go below 0.

Individual Master File (IMF) Processing Codes

  1. The following subsection gives an explanation and the purpose for using the following codes:

    • Blocking Series

    • Reason Codes

    • Source Codes

    • Priority Codes

    • Category Codes

    • Source Documents

    • Post Delay Codes

    • Transaction Codes

Blocking Series (BS)
  1. Submission Processing adjusts tax accounts using a unique Blocking Series (BS) to indicate the nature of the adjustment. Use the following table to determine the Blocking Series for ADJ54 input:

    Blocking Series Usage
    00 Partial claim disallowance (106C) and the original return was electronically filed.
    05 For most processable Forms 1040-X and CP notices unless otherwise directed.
    18 Partial claim disallowance (106C) and the original return was paper filed.
    77 Setting a math error (474C) and the original return was filed electronically.
    78 Setting a math error (474C) and the original return was paper filed.
    98 Complete claim disallowance (105C) and the original return was paper filed.
    99 Complete claim disallowance (105C) and the original return was filed electronically.
  2. The ninth and tenth digits of a Document Locator Number (DLN) represent the Blocking Series. See IRM 3.11.249.3.2.1, Document Locator Number (DLN) for detailed information regarding DLNs.

  3. For modules with a prior adjustment:

    If the BS on the prior TC 290 or TC 291 is Then
    77 or 78 Process as a math error response. See IRM 3.11.6.7.4.1.
    00, 18, 98, or 99 Route to CIS/AM per IRM 3.11.6.11.3.
Reason Codes (RC)
  1. Taxpayers receive a notice of adjustment when an action is taken on their account. The Reason Code (RC) designates the end of the statement that will be printed on the notice. The RC should describe the area(s) of the return affected by the adjustment action. For audit trail purposes, enter reason codes even when no adjustment is made to the account. You may use up to three reason codes. A reason code is not required for a ripple effect change.

    Note:

    CC IRPTR or CC IRPTR IDT may assist in determining the reason code(s) when there is not a sufficient explanation.

    Exception:

    Do not enter a reason code if specific instructions direct you not to enter.

  2. The fourth reason code position on ADJ54 is reserved for penalty reason codes. See IRM 3.11.6.10.3.2.1.

  3. The Reason Code Chart below, lists the common reason codes used in Submission Processing and the line reference number.

    Reason Code Adjustment Item
    001 Change Filing Status to Single
    002 Change Filing Status to Married Filing Jointly
    003 Change Filing Status to Married Filing Separate
    004 Change Filing Status to Head of Household
    005 Change Filing Status to Qualifying Widow(er) with dependent Child(ren)
    006 Exemption Amount (for 2017 and prior)
    • Adding or removing exemptions claimed

    • Form 2120, Multiple Support Declaration

    • Form 8332, Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent

    • Increase/decrease of Exemption Dollar Amount Claimed

    • Phaseout of Exemption Amount

    007 Wages, Salaries, Tips (Reported on Form 1040, Line 1 for 2018 and 2019 or Line 7 for 2017 and prior)
    • Bonus (W-2/Wage related)

    • Dependent Care Benefits

    • Disability

    • Employer Provided Education Asst. (IRC 127)

    • Form Wages

    • Grant (Form W-2)

    • Scholarship (Form W-2)

    • Third-Party Sick Pay

    • Salary Deferrals

    008 Interest / Dividend Income
    • Form 1099 - INT / DIV / OID

    • Form 8815, Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989

    • Schedule B, Interest and Ordinary Dividends

    • Schedule K-1 Interest

    012 Business Income / Loss
    • Form 6198, At-Risk Limitations

    • Schedule C, Profit or Loss From Business (Sole Proprietorship)

    • Form 1099-K, Payment Card and Third Party Network Transactions

    013 Investment Income Gain / Loss
    • Cost Basis

    • Form 1099-B / 1099-S

    • Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

    • Form 4684, Casualties and Thefts

    • Form 6252, Installment Sale Income

    • Form 4797, Sales of Business Property

    • Form 4952, Investment Interest Expense Deduction

    • Form 8824, Like Kind Exchanges

    • Sale of Home (non-military)

    • Schedule D, Capital Gains and Losses

    • Schedule K-1 Capital Gain Income

    016 Pensions and Annuities
    • 401(K)

    • 403(b)

    • Form 1099-R (Distribution Code 1 or 7 only)

    • RRB 1099-R

    • Form 5329, Additional Taxes on Qualified Plans (including IRAs) and other Tax-Favored Accounts

    • Form 8606, Nondeductible IRAs

    • IRA Distribution

    018 Schedule E Income / Loss
    • Farm Rental

    • Form 1099-MISC (Rents / Royalties)

    • Form 4835, Farm Rental Income and Expenses

    • Form 4952, Investment Interest Expense Deduction

    • Form 6198, At-Risk Limitations

    • Form 1099-K, Payment Card and Third Party Network Transactions

    019 Schedule F, Profit or Loss From Farming
    020 Unemployment Compensation
    • Form 1099-G

    021 Other Income reported on Form 1040, Schedule 1, Line 9 for 2019; Form 1040, Schedule 1, Line 21 for 2018; or Form 1040, Line 21 for 2017 and prior
    • Alaska Permanent Fund

    • Alimony Received

    • Awards

    • Employee Stock Ownership Plan (ESOP)

    • Form 1099-A, Acquisition or Abandonment of Secured Property

    • Form 1099-C (Cancellation of Debt)

    • Form 1099-G (State Income Tax Refund)

    • Form 1099-MISC

    • Form 8814, Parent’s Election to Report Child’s Interest and Dividends

    • Form W-2G (Gambling winnings)

    • Gifts

    • Jury Duty Pay

    • Medical & Life Insurance Reimbursements

    • Prizes

    • Self-Employment Income (not reported on Schedule C, E or F)

    • Taxable Coverdell Education Savings Account (ESA)

    • Taxable Scholarship / Grants (not reported on Form W-2)

    • Third-Party Sick Pay

    025 Qualified Retirement Plan Payments
    • KEOGH

    • KPERS

    • SARSEP

    • SEP

    • SIMPLE

    027 Penalty on Early Withdrawal of Savings
    029 Taxable Social Security Benefits
    • Form RRB 1099

    • Form SSA 1099-SM

    • Income reported on Form 1040/1040 SR, Line 5b for 2018 and 2019 or Line 20b for prior years

    030 Adjustments to Income (Form 1040, Schedule 1 for 2018 and 2019; Form 1040 for 2017 and prior)
    • Alimony Paid (without recipient's SSN)

    • Educator Expenses

    • Form 1098-E (Student Loan Interest)

    • Form 2106 / EZ Reserve Component (reported on Form 1040, Schedule 1, Line 11 for 2019; Form 1040, Schedule 1, Line 24 for 2018; or Form 1040, Line 24 for prior years)

    • Form 3903, Moving Expenses

    • Form 8917, Tuition and Fees Deduction

    • Military Family Relief Act

    • SE Tax (Deductible portion)

    • SE Health Insurance Deduction

    • Write-ins on Adjustments to Income (Form 1040, Schedule 1, Line 22 for 2019; Form 1040, Schedule 1, Line 36 for 2018; Form 1040, Line 36 for 2017 and prior):
      - Attorney fees
      - Awards
      - Contributions by Chaplains
      - Contributions to Nonprofit Pension Plans
      - Expenses/Rental Personal Property
      - Jury Pay
      - Reforestation

    033 Additional Taxes
    • Form 4970, Tax on Accumulation Distribution of Trusts (reported on Form 1040, Schedule 2, Line 6 for 2019; Form 1040, Schedule 4, Line 59 for 2018; or Form 1040, Line 59 for prior years)

    • Form 4972, Tax on Lump-Sum Distributions (reported on Form 1040, Line 12a for 2019; Form 1040, Line 11a for 2018; or Form 1040, Line 44 for prior years)

    • Section 72(m)(5) Penalty

    035 Education Credits
    • Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

    036 Non-refundable Tax Credits
    • Child Tax Credit (CTC)

    • Form 2441, Child and Dependent Care Expenses

    • Form 3800, General Business Credit

    • Form 5695, Residential Energy Credit

    • Form 6478, Biofuel Producer Credit

    • Form 6765, Credit for Increasing Research Activities

    • Form 8396, Mortgage Interest Credit

    • Form 8586, Low Income Housing Credit

    • Form 8609, Low-Income Housing Credit Allocation and Certification

    • Form 8826, Disabled Access Credit

    • Form 8834, Qualified Plug-in Electric and Electric Vehicle Credit

    • Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit

    • Form 8864, Biodiesel and Renewable Diesels Fuels Credit

    • Form 8880, Credit for Qualified Retirement Savings Contributions

    • Form 8907, Nonconventional Source Fuel Credit

    • Form 8910, Alternative Vehicle Credit

    043 Schedule D Computation
    • Revision to Schedule D Tax Computation

    • Switch to Schedule D Tax Computation

    044 Self-Employment Tax
    • Schedule SE

    045 Alternative Minimum Tax - Form 6251
    046 Miscellaneous Account Information
    • Schedule J ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    048 Tax on Individual Retirement Accounts (IRAs)
    • Form 1099-R (Distribution Code 1)

    • Form 5329 part I or II

    049 Miscellaneous Taxes
    • Other substantiated taxes on Form 1040-X, line 10

    • Uncollected SS Tax / Medicare Tax (UT)

    051 Total Federal Income Tax Withheld
    053 Earned Income Tax Credit
    054 CP 09 / CP 27 Earned Income Credit Disallowed
    055 Excess Social Security Withheld
    • Excess RRTA Withheld

    057 Regulated Investment Company Credit
    • Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

    061 Payments
    • Form 8812, Additional Child Tax Credit

    • Form 4136, Credit for Federal Tax Paid on Fuels

    065 Estimated Tax Penalty
    • Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts

    076 Itemized Deductions / Schedule A
    • Change from Standard Deduction to Schedule A

    • Foreign Income Tax (reported on Schedule A)

    • Form 2106 (Schedule A support)

    • Form 4684 (Schedule A support)

    • Form 4952 (Schedule A support)

    • Increase / Decrease to Schedule A

    • Phase-out of Itemized Deductions

    • Schedule K-1 (Schedule A support)

    092 Standard Deduction
    • Change from Itemized Deduction to Standard Deduction

    • Increase/decrease to Standard Deduction

    099 Miscellaneous Account Information
    • Any reason not listed

    • Social Security Benefits (reported on Form 1040, Line 5a for 2018 and 2019 or Form 1040, Line 20a for prior years)

    • Unexplained Form 1099 income

    106 Refundable American Opportunity Credit
    • Form 8863, Education Credits, (American Opportunity and Lifetime Learning Credits)

    153 Change to SRP on MFT 35
    173 Credit for Other Dependents

    Figure 3.11.6-1

    This is an Image: 33455001.gif
     

    Please click here for the text description of the image.

    Figure 3.11.6-2

    This is an Image: 33455002.gif
     

    Please click here for the text description of the image.

Source Codes (SC)
  1. Source code selection designates which opening statement will be used on a taxpayer's notice.

  2. Enter a "1" for the source code, except when setting a math error. When setting a math error, use "6." When correcting a math error use "2." The source codes are as follows:

    Source Code Literal
    0 or Blank None - no notice generated
    1

    Note:

    When a TC 290 .00 is input SC 1 will change to SC 0 once the adjustment posts to MF. The SC changes to 0 because a TC 290 .00 with a credit reference number for .00 will not generate an adjustment notice even if a reason code is utilized.

    As you requested, we changed your account for (YYYYXX) to correct your (RC).
    2 We changed your (YYYYXX) account to correct your (RC).

    Note:

    Use source code 2 when correcting math errors.

    6 You made a mistake on your (YYYYXX) account. We corrected the error when we adjusted your (RC).
Priority Codes (PC)
  1. Priority Codes (PC) must be used to post adjustments to the Master File when certain conditions exist. Failure to use the Priority Code when specified will cause the transaction to unpost.

    Priority Code When Required
    1 Making an adjustment to an account with a "-L" Freeze.
    2 Use only priority code 2 if both 1 and 3 are required to adjust the account. (Example: Account with -L freeze and the CP notice would require priority codes 1 and 3; therefore only 2 would be used.
    3 Adjusting CP Notices and when a Letter 5600C is mentioned or attached.
    8
    • CRN 764 is input with a TC 29X and there is a prior posted TC 29X (except a previously posted TC 290 with priority code 6 or a TC 290 with Julian Date 999).

    • TC 29X is input for a significant amount greater than $10 and is within $10 of a previously posted TC 29X. (EXAMPLE: $55 adjustment and the previous adjustment is $49 would require a PC: 8 on either TC 290/291 adjustment.

    • CRN 80X is input and there is a prior TC 17X on the account and the new TC 176 is to be computer generated.

    • CRN 806, 807, or 766 is input that is within $10 of a prior posted matching transaction (Example: CRN 806 is within $10 of a prior posted CRN 806, not within $10 of CRN 807).

    • When adjusting Fuel Tax Credit, Form 4136.

    Note:

    Use only Priority Code 1 if both 1 and 8 are required to adjust the account.

    Example:

    An account with -L freeze and the EIC conditions above would require priority codes 1 and 8; therefore, only 1 would be used.

    Note:

    Do not change the PC any IAT Tool uses.

Category Codes
  1. Category Codes are four letter codes to denote the type or source of an adjustment or correspondence case. Category Code "XRET" is to be used when routing adjustments to files with IDRS Command Codes ADJ54 for all Forms 1040-X.

  2. When routing to another area other than files or returning the claim to the taxpayer when correspondence is required, the Category Code of the case needs to be changed to "MISC" in order to prevent IDRS from recording the case as a closure.

  3. Change the Category Code to "KATX" when an adjustment is input on a claim related to Hurricane Harvey, Hurricane Irma, Hurricane Maria, or the California wildfires of 2017.

  4. Change the Category Code to "QRPA" (Questionable Refund Program Adjustments) when the adjustment is based on TC 971 AC 134. See IRM 3.11.6.4.8.

  5. Category Codes EICX, EICN, and EICC are used for updating the DUPOL database using IDRS Command Code DDBCK. See IRM 3.11.6.8.2.

Source Document Indicator
  1. Source Document (SD) Y is used when the amended return is sent to Files in your completed folder. The amended return will be associated with the assigned DLN where it can be retrieved.

  2. No Source Document (NSD) N is used when the amended return is not going to Files. Examples include, but are not limited to, the following:

    • Streamlined Program

    • MFT 35 adjustments

    • Form 8379 (Injured Spouse)

    • Math errors with additional adjustment(s)

Posting Delay Codes
  1. A Posting Delay Code (PDC) range of one (1) to six (6) will cause a transaction to post later than another transaction when multiple transactions are required on one account. Input transactions will not post to MF until the indicated number of cycles have expired (with respect to the first transaction to be posted).

  2. There will never be a situation where the posting delay code will be greater than "1" on MFT 35.

  3. PDCs are applicable for IMF transactions using ADJ54.

  4. The PDC is not posted with the transaction or shown with the pending transaction. The pending (PN) MF posting cycle for the IDRS status transaction is extended to account for the PDC(s).

    Example:

    A PDC "1" should be used on the adjustment when an address change was input. This allows the adjustment notice to be sent to the new address of record.

Integrated Data Retrieval System (IDRS) Transaction Codes
  1. Some IDRS Transaction Codes require routing or special handling. For definitions of various Transaction Codes, refer to Document 6209, IRS Processing Codes and Information, or IRM 21.5.6.

  2. The table below lists the common transaction codes used in Submission Processing. The complete list of these codes is contained in Document 6209, IRS Processing Codes and Information.

    Transaction Codes Action
    TC 140 is present See IRM 3.11.6.7.1.1.
    No TC 150 (with no Form 1040 attached) See IRM 3.11.6.6.2.
    No TC 150 (with Form 1040 attached) See IRM 3.11.6.6.3.
    No TC 150 (with/without Form 1040 attached) If TC 594 is on primary TIN, research secondary TIN for TC 150.
    No TC 150 Disaster Return See IRM 3.11.6.4.1.1(1)b.
    No TC 150 Statute Imminent Convert to a Form 1040, add CC ACTON History Item "X21502STAT" .
    RJ 150 Rejected Transaction See IRM 3.11.6.6.1.
    Unnn150 Unpostable Monitor CC IMFOLT for TC 150 to post.
    CU150 Corrected Unpostable Monitor CC IMFOLT for TC 150 to post.
    DJ150 Deleted Transaction Monitor CC IMFOLT for TC 150 to post.
    PN150 Pending Transaction Monitor CC IMFOLT for TC 150 to post.
    TC 150 has no posting date Monitor CC IMFOLT for TC 150 to post.
    UP150 Unpostable Monitor CC IMFOLT for TC 150 to post.
    TC 160/161/162 Route to CIS/AM.
    Indication of change:
    TC 170 change to tax or withholding; with Form 2210 only
    An account with a TC 170/176 is workable. The estimated tax penalty is based on the original return and the penalty cannot be changed. See IRM 3.11.6.10.3.2.1
    Prior TC 29X .00 Workable
    TC 300-361 (TC 300 is most commonly used) CIS/AM

    Exception:

    If an -L freeze or TC 420 is present, see IRM 3.11.6.4.9.2.

    TC 420 and no 421 See IRM 3.11.6.4.9.2.
    TC 420 and 421 with no TC 300 Workable
    TC 424 and 425 with no TC 300 Workable
    TC 424 (with no TC 425) See IRM 3.11.6.4.9.2.
    TC 480 and 780 (with Freeze -Y) See IRM 3.11.6.4.18.
    TC 520 (with no TC 521 or 522) Route to CIS/AM.
    TC 520 with 521 or 522 Workable
    TC 576 (with no TC 577) Route to CIS/AM.
    TC 576 with posed TC 577 Workable
    TC 582 Workable - the TC 582 is a lien indicator. Process as normal.
    TC 594 See IRM 3.11.6.6.1 paragraph (4) (b).
    TC 841 without subsequent 846 Route to CIS/AM.
    TC 885 Route to CIS/AM.
    TC 896 (relating to MFT 29) Route to CIS/AM.
    TC 904 See IRM 3.11.6.6.2.
    TC 914, 916 or 918 without subsequent 912, 915, 917 or 919 CI SDC - Scheme Development Center. See IRM 3.11.6.4.7.
    TC 922 Check Underreporter Process Code. See IRM 3.11.6.4.10.
    TC 971, AC 111 ID Theft
    TC 971, AC 137 with filing status change Route to CIS/AM.
    TC 976 or 977 Workable

Integrated Data Retrieval System (IDRS) Freeze Codes

  1. Some IDRS Freeze codes will require routing or special handling. For definitions of various Freeze Codes or Transaction Codes, refer to Document 6209, IRS Processing Codes and Information, or IRM 21.5.6.

  2. The table below lists the common freeze codes used in Submission Processing. The complete list of these codes is contained in Document 6209, IRS Processing Codes and Information.

    Freeze Code Description Action
    -A Duplicate Return Refer to CIS/AM if there is an open control base of DUPF; otherwise, continue to process the return.
    -C Combat Zone See IRM 3.11.6.4.22
    - D RSED Expired Statute Unit
    E- Amended Return Follow TC No 150 instructions
    F- Frivolous Return Received Route to FRP. See IRM 3.11.6.4.6.
    -G Original Return which contains a math error code See IRM 3.11.6.7.4.1
    G- Restricted Failure To Pay Penalty CIS/AM
    -I/I- Restricted Credit/Debit Interest CIS/AM
    -J Unsubstantiated ME Tax Protest CIS/AM
    J- Excess Estimated Tax Credit Freeze CIS/AM
    -K Refund/offset is being held as the result of hold code 1, 2 or 4 CIS/AM
    -L AIMS Indicator See IRM 3.11.6.4.9.2
    M- TC 370/400 MFT 31/No-Merge CIS/AM
    -O/-S Disaster Claim See IRM 3.11.6.4.1.1
    P- Refund Cancellation
    • Net balance due workable

    • Net refund CIS/AM

    -Q Unallowable Refund CIS/AM
    -R Credit Balance Process normally.

    Reminder:

    Check for IVO and ID Theft indicators. If a TC 971 AC 122 is on the account or a 4800C is attached or mentioned see IRM 3.11.6.4.8.

    S- Undelivered Refund Check CIS/AM
    T- TDA Status See IRM 3.11.6.4.18 paragraph (4)
    -U Erroneous Refund CIS/AM
    -V Bankruptcy Freeze CIS/AM
    -W Litigation Pending Freeze CIS/AM

    Note:

    A -W freeze which is set by a TC 520 will take priority over other freeze codes.

    -Y Offer in Compromise Collection. See IRM 3.11.6.4.18
    Y- Audit Adjustment CIS/AM
    -Z / Z- Refund Scheme SDC

    Exception:

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

Unpostable Conditions

  1. An unpostable condition is created when a transaction cannot post (update) to Master File due to an unprocessable condition. The most common causes for an unpostable are:

    1. Reducing an amount below zero

    2. Removing an amount that did not previously exist

    3. Adjusting an account without a posted TC 150

    4. Not using a priority code when required

  2. A transaction which fails to post to an account is returned to the campus for corrective action with category NLUN.

  3. See Document 6209, IRS Processing Codes and Information, or IRM 3.12.179, Individual Master File (IMF) Unpostable Resolution, for a more detailed explanation.

Unpostable Resolution (Use Local Procedures as Applicable)
  1. A transaction which cannot post to Master File creates an open unpostable case on IDRS. The open control base will be in "A" status with category NLUN which will represent the unpostable and will be assigned to the tax examiner who input the unpostable condition.

    Note:

    If there are multiple open cases there will not be an open "A" case as stated above; however, the open "A" case can be found in the "History Section" of CC TXMOD.

  2. When an unpostable condition occurs, a Charge-Out sheet (Form 4251) is generated and the case is returned to the responsible employee or appropriate function. If the case is routed to the incorrect function, return the case to the employee shown on the Charge-Out sheet.

  3. Form 4251 will contain an Unpostable Code (UPC) which will identify the condition that caused the transaction to unpost.

    Note:

    If the Charge-Out sheet shows the ASED indicating an imminent statute date (within 90 days) route the case to the Statute Unit for quick assessment.

  4. Determine the reason for the unpostable based on the "UPC" and/or "TC-S" code on the Charge-Out sheet, IDRS, and/or the return itself. Perform Masterfile Verification to determine if there are any other reasons the return may not be processable. The IAT CSI tool can be used to help in determining the unpostable reason. Input the unpostable code and unpostable reason code in the search field.

    Example:

    UPC 158 RC 1 would be entered as 1581.

    Reminder:

    If you have an unpostable on an account with a -L freeze verify that it was not the result of CC DDBCK Selected case. If it was the result of a CC DDBCK Selected case it needs to be routed as a CC DDBCK Selected case. See IRM 3.11.6.8.1.

  5. Review CC ENMOD for unpostable conditions as this may have caused the adjustment on CC TXMOD to unpost.

    Note:

    If an unpostable condition exists in CC ENMOD close the open case when correcting the account.

  6. If there is a previous TC 160/161 (late filing penalty) on the account, route to CIS/AM.

  7. Cross out the DLN found on the CF 5147.

  8. Use the following tables to take the appropriate corrective action. Be sure to adjust the correct amount and tax period

    1. With Form 1040-X attached

      If IDRS Transaction Then
      The return meets CIS/AM criteria ACTON
      C02,CISAMTOADJ,C
      Route to CIS/AM.
      The return meets route out criteria other than CIS/AM ACTON
      C02,TO_____,C
      (indicate destination)
      Route accordingly.
      The error can be corrected ACTON
      C02, UNPCORR,C
      1. Line through the input sequence number originally edited at the top of the Form 1040-X return.

      2. Input the correct adjustment.

      3. Staple the CF 5147 and 4251 to the back of the return.

      The return was posted to the wrong SSN
      1. Pull up TXMOD using the wrong SSN.

      2. ACTON C02,WRONGSSN,C

      3. ACTON C02,xxx-xx-xxxx,C (where x equal the correct SSN)

      Input the correct adjustment using the correct SSN.
    2. With Form 1040-Xnot attached

      If Then
      Unable to determine the appropriate corrective action Have the workleader request the document from Files using CC ESTAB. In remarks enter: "Expedite Second Request."
      Able to determine the corrective action and the adjustment can be re-input
      1. Take appropriate corrective action(s) and enter SD4251 on remarks line.

      2. Attach any other research documentation you may have gathered.

      3. Place in brown folder with other source documents.

    3. With or Without 1040-X Attached:

      If Then
      Someone else has changed your control base
      1. Close your unpostable case (if not already closed).

      2. Route the 1040-X and/or charge-outs to the person who took action on your unpostable case. Use routing slip Form 12305 and notate: "Action was taken on my open control base - please take any required corrective action."

      Exception:

      If the corrective adjustment has already been completed, route the return to Files per IRM 3.11.6.6.5.

Updating the Duplicate Taxpayer Identification Number (TIN) OnLine (DUPOL) Database

  1. The Duplicate TIN OnLine (DUPOL) database contains tax return information for the current and two prior tax processing years and provides duplicate SSN data for research purposes.

  2. Submission Processing is responsible for updating the DUPOL database when editing (adding, replacing, changing, and/or deleting) records. Use CC DDBCK unless specifically instructed to use CC DUPED. If instructed to use CC DUPED, update for current year only. If it is a prior year, do not update the DUPOL database, continue processing the return.

  3. When adding a credit or dependent requiring TIN validation, always use CC INOLE or CC DDBKD to verify the TIN/ NAME/DOB prior to updating the DUPOL database.

  4. When deleting a dependent, verify the taxpayer is removing credits associated with the dependent. The credits received on behalf of each dependent are listed on the CC DDBCK screen. The taxpayer should remove all Child Tax Credit (CTC), Additional Child Tax Credit (ACTC), Education Credits, and Adoption Credit that were received based on the dependent. The taxpayer may qualify for the Earned Income Tax Credit (EITC) and Child and Dependent Care Credit in special circumstances. If the taxpayer did not remove CTC, ACTC, and Education Credits, you must reverse the credit(s) and input a corrected adjustment following procedures in IRM 3.11.6.7.4, Inputting a Corrected Adjustment and/or Setting a Math Error. If the taxpayer claimed Adoption Credit, route CIS/AM.

  5. Refer to CIS/AM if the account has been merged or resequenced and an update to the DUPOL database is required.

  6. Use the following chart for determining when/if to update the DUPOL database:

    If Then
    Taxpayer is adding or removing:
    • An exemption for primary or secondary taxpayer for 2017 and prior

    • A dependent

    • Earned Income Credit (for dependents)

    • EIC increase due to changes in income other than Form W-2

    • Child and Dependent Care Credit

    • Education Credit

    • Child Tax Credit

    • Additional Child Tax Credit when the qualifying dependent is eligible for CTC, but cannot be claimed on Line 7

    • Credit reduced to zero

    • EITC TIN-related Math Errors

    • TIN related Math Errors

    • ITIN to SSN for dependents

    Update using CC DDBCK then continue processing the return.

    Note:

    For 2018 and subsequent amended returns (or claims) in which the taxpayer is trying to change exemption(s), see IRM 3.11.6.10.1.3.1.

    • CP 08 responses

    • CP 27 responses

    • Amended return where the taxpayer is claiming EIC for self/spouse only

    • Requesting filing status change which does not affect exemption/credit allowance

    • EITC increase due to Form W-2

    • EITC NON-TIN related Math Errors

    Continue processing the return.

    Note:

    Do not update DUPOL database.

    • Math error code 653 is posted on IDRS

    • The child failed validation (other than an invalid TIN/Name issue)

    Route to CIS/AM.
    • DDBCK input screen is full (6 dependents were previously claimed)

    • CP 09 responses

    • Child Care Credit and the qualifying dependent is over age of 12 but disabled or turns age 13 in the year being claimed

    • NON-TIN related Math Errors

    • Employee does not have access to CC DDBCK

    Update using CC DUPED (current year only). See IRM 3.11.6.8.2.

Command Code DDBCK (Dependent Database Check)

  1. Command Code (CC) DDBCK (Dependent Database Check) is used to update the Duplicate TIN OnLine (DUPOL) database which is used for validating dependents and certain credits. CC DDBCK can be updated for the current tax year and two years prior. DDBCK will check:

    • If the TIN or Name Control does not match INOLE data

    • If child is deceased or does meet the age criteria to qualify for a credit

    • If a DDB rule is broken

    • If DUPTIN database indicates a duplicate use of a TIN

  2. When updating DDBCK, use the primary’s TIN of the return. It displays the dependents and qualifying children from the original posted return or as last modified.

  3. When updating dependent and/or credit information, CC DDBCK must be used prior to inputting an adjustment.

  4. When working EITC TIN-Related Math Error responses, overlay the YYYYMMDD on the CC DDBCK Return Summary Screen, under Change Dates, with the received date of the Form 1040-X.

  5. When required to update CC DDBCK, use the following chart.

      If and Then/Use
    1. EITC is decreasing or is not involved Dependent and/or spouse is being changed, added, deleted
    or
    There is an increase to ACTC and/or AOTC

    Note:

    For 2018 - 2025 amended returns or claims in which the taxpayer is trying to change exemption(s), see IRM 3.11.6.10.1.3.1, 2018 - 2025: Exemptions.

    1. CATEGORY: EICN

    2. CLAIM AMOUNT: 0

    3. SCHED C: N

    4. AGI INC/DEC: Skip

    5. EITC INC/DEC: Skip

    6. RefCR: Total of increases to ACTC and/or AOTC.

    2. EITC is increasing and does not involve an EITC Math Error Schedule C is not attached, not changing, or is being removed
    1. CATEGORY: EICX

    2. CLAIM AMOUNT: The net refund/balance due of the MFT 30 adjustment (dollars only).

    3. SCHED C: N

    4. AGI INC/DEC: xClaim, Line 1b (use a leading minus sign for decreases).

    5. EITC INC/DEC: xClaim, Line 14B.

    6. RefCR: Total of increases to ACTC and/or AOTC.

    3. EITC is increasing and does not involve an EITC Math Error
    • Schedule C is changing; or

    • Schedule C is being added; or

    • Claiming additional income (except Schedule F, Schedule E, Schedule K-1 or minister income) that is subject to SE Tax

    Example:

    Form 1040-X shows SE Tax due to non-employee compensation from a Form 1099-MISC. Typically this will be other income reported on line 21 of the Form 1040(for 2017 and prior) or Schedule 1 (for 2018). The Schedule C indicator would be "Y" . The non-employee compensation income shown on the Form 1099-MISC would be the amount of the "Gross Receipts" and the "Net Profit" on the DDBCK Return Update Screen-Schedule C.

    1. CATEGORY: EICX

    2. CLAIM AMOUNT: The net refund/balance due of the MFT 30 adjustment (dollars only).

    3. SCHED C: Y

    4. AGI INC/DEC: xClaim, Line 1b (use a leading minus sign for decreases).

    5. EITC INC/DEC: xClaim, Line 14B

    6. RefCR: Total of increases to ACTC and/or AOTC.

    7. GROSS RCPT: Sum of all Schedules C line 1.

    8. COST GOOD SOLD: Sum of all Schedules C line 4.

    9. HOME OFFICE EXPENSE: Sum of all Schedules C line 30.

    10. NET PROFIT: Sum of all Schedules C line 31 or Schedule C-EZ line 3.

    11. WAGES: Amount of W-2 wages being amended, if any (add leading minus sign for decreases).

    4. EITC is increasing and does involve an EITC TIN related Math Error

    Note:

    EITC TIN related math errors include ME 604 / 605 / 610/ 701 / 702 / 741 / 743 / 745 / 748.

    Schedule C is not attached, not changing, or is being removed
    1. CATEGORY: EICC

    2. CLAIM AMOUNT: Net refund/balance due of the MFT 30 adjustment (dollars only).

    3. SCHED C: N

    4. AGI INC/DEC: 1040-X line 1B (add leading negative sign if the amount is decreasing).

    5. EITC INC/DEC: 1040-X line 14B.

    6. RefCR: Total of increases to ACTC and/or AOTC.

    5. EITC is increasing and does involve an EITC TIN related Math Error

    Note:

    EITC TIN related math errors include ME 604 / 605 / 610/ 701 / 702 / 741 / 743 / 745 / 748.

    • Schedule C is changing; or

    • Schedule C is being added; or

    • Claiming additional income (except Schedule F, Schedule E, Schedule K-1 or minister income) that is subject to SE Tax

    Example:

    Form 1040-X shows SE Tax due to non-employee compensation from a Form 1099-MISC. Typically this will be other income reported on line 21 of the Form 1040 (for 2017 and prior) or Schedule 1 (for 2018). The Schedule C indicator would be "Y" . The non-employee compensation income shown on the Form 1099-MISC would be the amount of the "Gross Receipts" and the "Net Profit" on the DDBCK Return Update Screen-Schedule C.

    1. CATEGORY: EICC

    2. CLAIM AMOUNT: The net refund/balance due of the MFT 30 adjustment (dollars only).

    3. SCHED C: Y

    4. AGI INC/DEC: xClaim, Line 1b (use a leading minus sign for decreases).

    5. EITC INC/DEC: xClaim, Line 13B

    6. RefCR: Total of increases to ACTC and/or AOTC.

    7. GROSS RCPT: Sum of all Schedules C line 1.

    8. COST GOOD SOLD: Sum of all Schedules C line 4.

    9. HOME OFFICE EXPENSE: Sum of all Schedules C line 30.

    10. NET PROFIT: Sum of all Schedules C line 31 or Schedule C-EZ line 3.

    11. WAGES: Amount of W-2 wages being amended, if any (add leading minus sign for decreases).

  6. Take the following action when the DDBCK response displays the following literal:

      If Then
    1. OK to input ADJ54, if eligibility met Input the adjustment following the appropriate procedures.
    2. OK to input ADJ54 if eligibility met, enter reason code 103 Route to CIS/AM. RC 103 indicates that taxpayer is part of the EITC certification program.
    3. RECERT IND Route to CIS/AM.
    4. Date Older Than 18 Month DDBCK will not allow an entry 18 months or later. Overlay the pre-populated date with the received date of the return.
    5. Date Cannot be a Future Date If working a current processing year claim that is timely filed prior to April 15 use the current date for the input.
    6. Date Earlier than Return If working a current processing year claim that is timely filed prior to April 15 use the TC 150 date.

    Note:

    If DDBCK will not accept the TC 150 date, use the current date for the input.

  7. If the response to either the initial DDBCK screen or validation results screen displays Selected or Send As a CAT-A, take the following action:

    1. Make a print of the CC DDBCK Validation results Screen and attach to the front of the Form 1040-X. Do not delete the DDBCK update.

    2. Attach cover sheet indicating the response received:
      • 1040-X - DDBCK - Selected
      • 1040-X - DDBCK - Send to Cat A.

    3. Indicate on cover sheet (per local procedures): Expedite scanning; Scan directly to IDRS number xxxxxxxxx, route to CIS/AM. (The IDRS number will be provided by your local Accounts Management).

    4. See IRM 3.11.6.4.9, Examination, for additional routing instructions.

    5. If the literal "Selected" displays, input a 971/013 only if there is already a 971/010 on the account.

  8. On Selected cases, TC 424 is generated automatically in IDRS and places a -L freeze on the account. If DDBCK is updated in error, the input needs to be deleted to prevent an erroneous case from opening in Exam.

  9. On "Follow IRM" cases, you must use the appropriate section of the IRM 3.11.6 to process the amended return.

  10. If the DDBCK validation passes, and the case is not selected for Exam or CAT-A, DDBCK updates DUPTIN/DUPOL to reflect any changes that were entered. If the TIN or name control entered failed validation, DUPTIN will not be updated. Instead, the command code will send a prompt "PROCESS UPDATES (Y/N)?" and waits for the user to respond before continuing. If the validation error is caused by data entry error, the fields can be corrected. When corrections are made and retransmitted, DDBCK will validate the input again from the beginning.

    Note:

    If the DDBCK response states that the child failed validation (other than an invalid TIN/Name issue), refer to CIS/AM. See IRM 3.11.6.9.2.1.

Command Code DUPED

  1. Command Code (CC) DUPED allows users to edit and correct information contained in the Duplicate TIN OnLine (DUPOL) database which is used for TIN validation. Only update the DUPOL database for a current tax year return after the name and TIN have been verified using CC INOLE.

  2. When a dependent, Earned Income Tax Credit (EITC), or a credit requiring TIN validation for allowance is being changed, use CC DUPED to update the TIN database (DUPOL). If the amount of a "TIN related" credit is changed because of an income change and there is no change to the TIN, you would not use CC DUPED. See (3) for additional conditions.

  3. Do not update CC DUPED if the only reason for the update/change is:

    1. Claiming EITC for self/spouse only, or

    2. A filing status change, which does not affect dependents/credit allowance

  4. If the taxpayer does not provide the TIN of the dependent to be removed, research RTVUE. If found, update the DUPOL database.

  5. The display screen allows users to find the exact record they want to modify. A record number is shown for each record that can be edited. CC DUPED procedures apply only to the current tax year return.

  6. On line 2 of the command code request, a user can enter P=xxxxxxxxx where xxxxxxxxx is the primary TIN. This will display only records for that TIN which also matches the input primary TIN.

  7. The TIN SOURCE CD field on the edit screen has been expanded to three positions to allow adding and changing of multiple records. To change multiple records for the same TIN from a single return, bring up the change screen for the record. You can then enter two additional TIN SOURCE codes and all three will be changed at the same time.

  8. CC DUPED does not replace Master File account action and should be updated in addition to any MF adjustment required.

  9. Do not disclose DUPED data. Taxpayers are not entitled to know who has claimed them, their dependents, or EITC.

  10. If the taxpayer clearly indicates who will be claiming the dependent, do not update the other account based on this information.

Add a Record
  1. Add a Record is used when adding a dependent, spouse (secondary TIN) or to add a new Form 2441 credit, Form 8863 and/or Schedule EIC.

    Note:

    For 2018 - 2025 amended returns or claims in which the taxpayer is trying to change exemption(s), see IRM 3.11.6.10.1.3.1, 2018 - 2025: Exemptions.

  2. To add the record, enter CC DUPEDA and the TIN of the person being added (DUPEDANNN-NN-NNNN).

  3. When the edit screen is displayed, enter the record information on the edit screen and then transmit.

    • Name Control - Enter the name control of the dependent being added.

    • Primary SSN on return - Enter the Primary TIN from Form 1040-X.

    • Service Center CD - Enter the two-digit File Location Code from the TC 150 DLN for the processing center where the taxpayer originally filed. The Edit Screen provides Processing Codes for ELF (Electronic Filing System). Use ELF codes only if appropriate. (Refer to Doc 6209 FLCs for a list of valid File Location Codes).

    • Filing Status - Enter the "Amended return filing status" from Form 1040-X.

    • Dependent Status Ind - Enter "0" to indicate the dependent cannot be claimed on another return.
      - 0 – Indicates the dependent cannot be claimed on another return
      - 1 – Used only when the dependent will be claimed on another return

    • TIN Source CD - Enter how the TIN is being applied during this action. This is a required entry.
      P = Primary
      S = Secondary
      D = Dependent
      B = Form 2441, Child and Dependent Care Expenses
      C = Form 8863, Education Credit
      E = EITC, Earned Income Tax Credit

  4. When the information is transmitted, the DUPED response screen is displayed to show the updated information.

    Note:

    Continue to process the return if the message "DUPLICATE USE OF SSN" is displayed after transmitting. This is an indication the added dependent is already being claimed by a different taxpayer, but a soft notice addressing the issue will be generated automatically.

Change a Record
  1. Change a Record is used to update the dependent status indicator if a primary taxpayer is adding or removing their own exemption.

    Reminder:

    Personal exemptions are not allowed for TY 2018 - 2025.

    Note:

    For 2018 - 2025 amended returns or claims in which the taxpayer is trying to change exemption(s), see IRM 3.11.6.10.1.3.1, 2018 - 2025: Exemptions.

  2. To change a record, use CC DUPED, without a definer, and the TIN of the person being claimed to display all the records for that TIN.

    Exception:

    Do not update the DUPOL database on invalid primary or secondary TINs. Route to CIS/AM.

  3. Enter a "C" in the request type field and the record number in the record number field and then transmit. This is equivalent to entering a CC DUPED with the definer "C" and the record number in line "1" of the command code.

  4. When the edit screen is displayed, enter the appropriate corrected information and then transmit.

    • Name Control (N/C) - Enter the name control of the dependent/exemption being changed.

    • Filing Status - If the filing status is changing, enter the appropriate code.

    • Dependent Status Ind - Enter "1" to indicate the exemption will be claimed on another return or enter a "0" to indicate the primary taxpayer is claiming his/her own personal exemption.

  5. If you delete a record, the response will be shown with a dash under REC NUM and the Julian date in the REV DATE column. If we "Change a record" , the response will still show a Record Number (REC NUM) and under column "DEP STAT IND" will show the change.

    Note:

    Multiple taxpayers may have claimed the same exemption and/or credit. Only change the records that relate to the account you are working.

Delete a Record
  1. Delete a Record is used when any of the following are removed or when a credit is reduced to zero:

    • Dependents

    • Schedule EIC, Earned Income Credit

    • Form 2441, Child and Dependent Care Expenses

    • Form 8863, Education Credits

  2. When deleting a record, use command code DUPED with the TIN of the dependent for which the action is being taken.

  3. Delete records that you created in error.

  4. Enter a "D" in the REQUEST TYPE and the appropriate record number to be deleted in the RECORD NUMBER field and then transmit. This is equivalent to entering a DUPED with the definer "D" and the record number in line "1" of the command code.

  5. The edit screen is displayed along with a delete confirmation message. Enter "Y" to delete the record, and then transmit. When the information is transmitted the display screen will show with the corrected information.

Credits

  1. Credits are categorized as either non-refundable or refundable.

    1. Non-refundable credits reduce, and are limited to, the amount of tax found on the following:
      - Form 1040-X, Line 6, Tax
      - Form 1040 / Form 1040-SR, Line 12b for TY 2019
      - Form 1040, Line 11 for TY 2018
      - Form 1040, Line 44 for TY 2017 and prior

    2. A refundable credit is a credit that is not limited by the amount of tax owed. It is treated as a payment in the "Payment" section of Form 1040-X. If total credit(s) and/or payment(s) exceed the tax liability, the excess is refundable. Examples of refundable credits are the Earned Income Tax Credit and the Additional Child Tax Credit.

  2. Where credits are reported depends on the tax year.

    • For tax year 2019, a limited number of credits are reported directly on Form 1040 or Form 1040-SR, U.S. Tax Return for Seniors, all other credits are reported on Form 1040 / Form 1040-SR, Schedule 3, Additional Credits and Payments.

    • For tax year 2018, a limited number of credits are reported directly on Form 1040, all other credits are reported on Form 1040, Schedule 3, Nonrefundable Credits, or Form 1040, Schedule 5, Other Payments and Refundable Credits.

    • For tax years 2017 and prior, credits are reported directly on Form 1040, Form 1040A, and Form 1040EZ.

  3. Credits are researched on Integrated Data Retrieval System (IDRS), using Command Codes (CC) RTVUE, IMFOLT, TRDBV and/or TXMODA.

  4. All credits require the primary taxpayer, secondary taxpayer, and the qualifying child(ren) have a valid Taxpayer Identification Number (TIN). See Exhibit 3.11.6-7, for TIN Requirements for Dependents and Credits.

    Note:

    An Internal Revenue Service Number (IRSN) is not a valid TIN for credit allowance. An IRSN can be identified as beginning with a "9" with the 4th and 5th digits being a campus code.

  5. If the credit requires a qualifying child, use CC INOLE to verify the name control, TIN, date of birth, and date of death of the qualifying child. If the Child and Dependent Care Credit, Child Tax Credit (CTC), Credit for Other Dependents (ODC), Earned Income Tax Credit (EITC), Adoption Credit and/or Education Credit is being claimed for a TIN for which our records indicate a date of death prior to the tax year, route to CIS/AM.

  6. The American Opportunity Tax Credit (AOTC), Additional Child Tax Credit (ACTC), CTC, ODC, and the EITC have specific TIN requirements. See each individual subsection and Exhibit 3.11.6-7.

Non-Refundable Credits

  1. Taxpayers use line 7 of Form 1040-X, Credits, to reduce their tax by claiming non-refundable credits by an amount not to exceed Line 6, Tax.

  2. If the taxpayer claims credits greater than the Tax on line 6 and the full amount of the credits are used to reduce the corrected Total Tax on line 11 or if the taxpayer is not eligible for all or part of non-refundable credit(s), see IRM 3.11.6.7.4, Inputting a Corrected Adjustment and/or Setting a Math Error.

  3. If unable to determine the source of the line 7 change, research IDRS and attachments for indications of routing criteria or other processing. If the cause of the change cannot be determined ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , process normally.

    Note:

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

  4. If the taxpayer makes an initial claim ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ that cannot be substantiated, correspond for an explanation and/or supporting documents.

    Note:

    Correspond per IRM 3.11.6.11 using either Form 8009-A, boxes 4 and 7, or a 324C letter, paragraphs A, K, 3, and 6. Use fill-in: We are unable to correct your account with the information you supplied on your Form 1040-X, Amended U.S. Individual Income Tax Return. There is not a sufficient explanation to determine what changes are being requested. Please correct the appropriate column(s) and provide an explanation to tell us what changes were made to your income, deductions, and/or credits with the amounts and reason for each change.

  5. Unless otherwise specified, use RC 036 for all non-refundable credits.

  6. If the taxpayer indicates a religious (e.g., Amish/Mennonite or Form 4029) or conscience-based objection to obtaining a taxpayer identification number (TIN), see IRM 3.11.6.2.2.

  7. Non-refundable credits are applied in the order that they appear in this section.

    • Form 1116, Foreign Tax Credit (Individual, Estate or Trust) (If changing, route to CIS/AM.)

    • Form 2441, Child and Dependent Care Expenses

    • Schedule R, Credit for the Elderly or the Disabled

    • Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits) (Non-refundable portion only)

    • Form 8880, Credit for Qualified Retirement Savings Contributions

    • Form 5695, Residential Energy Credits (the line 30 amount from Part II)

    • Form 8910, Alternative Motor Vehicle Credit (personal part of the credit)

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

    • Credit for Other Dependents

    • Child Tax Credit

    • Form 8396, Mortgage Interest Credit

    • Form 8839, Qualified Adoption Expenses (If changing, route to CIS/AM.)

    • Form 8859, Carryforward of the District of Columbia First-Time Homebuyer Credit (Route to CAT-A)

    • Form 5695, Residential Energy Credits (line 15 amount)

    • Form 8834, Qualified Electric Vehicle Credit

    • Form 5884, Work Opportunity Credit

    • Form 6478, Biofuel Producer Credit

    • Form 6765, Credit for Increasing Research Activities (Possible route to CIS/AM. See IRM 3.11.6.12.)

    • Form 8586, Low-Income Housing Credit (Possible route to CIS/AM. See IRM 3.11.6.12.)

    • Form 8826, Disabled Access Credit (Route to CAT-A)

    • Form 8835, Renewable Electricity, Refined Coal, and Indian Coal Production Credit

    • Form 8845, Indian Employment Credit (Route to CIS/AM)

    • Form 8846, Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips (Route to CIS/AM)

    • Form 8864, Biodiesel and Renewable Diesel Fuels Credit

    • Form 8907, Nonconventional Source Fuel Credit

    • Form 8910, Alternative Motor Vehicle Credit

    • Form 5884-A, Credits for Affected Disaster Area Employers or Certain California Wildfires (Route to CIS/AM. See IRM 3.11.6.12.)

    • Form 8844, Empowerment Zone Employment Credit (If changing, route to CIS/AM)

    • Form 8941, Credit for Small Employer Health Insurance Premiums (Route to CIS/AM. See IRM 3.11.6.12.)

    • Form 8994, Employer Credit for Paid Family and Medical Leave (If changing, route to CIS/AM.)

    • Trans-Alaska Pipeline Liability Fund Credit claimed on Form 3800, General Business Credit

    • Form 8801, Credit for Prior Year Minimum Tax - Individuals, Estates, and Trusts (If changing, route to CIS/AM.)

      Reminder:

      Non-refundable credits MUST BE APPLIED in the order they appear in this section. If not applied in this order, see IRM 3.11.6.7.4.

      Note:

      Not all credits on the Form 3800 require the specific forms. If there are credits on Form 3800 without a corresponding form, apply the credit by title as it appears in the list above, if the specific form is not required to claim the credit.

Form 2441, Credit for Child and Dependent Care Expenses
  1. The Child and Dependent Care Credit from Form 2441 is claimed on Form 1040-X, Line 7.

  2. The qualifying person claimed for the Child and Dependent Care credit does not need to be claimed as a dependent on the return.

  3. Correspond for Form 2441≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Use either Form 8009-A, box 3 or 4, or a 324C letter with paragraphs A, 3, and 6 with fill-in: Please complete Form 2441, Child and Dependent Care Expenses, to support the changes requested on Form 1040-X, Amended U.S. Individual Income Tax Return.

  4. If Form 2441 is attached, the following items must be complete:

    1. Line 1(a), Care provider’s name, must be present

    2. Line 1(c), Identification number (SSN or EIN), must be present, unless the provider is an exempt organization, such as, but not limited to:
      • Churches, synagogues, mosques, or temples
      • Schools-both public and private
      • YMCA/YWCA or YMHA/YWHA
      • Other nonprofit organizations
      • The provider was a foreign citizen with no U.S. address and the child care was provided in a foreign country

    Note:

    Do not correspond for the missing TIN when more than one provider name is entered on Line 1, and at least one provider's TIN is present.

  5. The provider's TIN is not required when the taxpayer has exercised "due diligence" in his/her attempt to comply with the requirement. Due diligence applies only to notations that indicate:

    1. The provider has moved and the taxpayer is unable to find the provider to get the TIN, or

    2. The provider has refused to give the TIN to the taxpayer

      Note:

      Notations that indicate the taxpayer is "unable" to get the TIN, that the TIN is "not available," "unknown," "pending," "applied for," or any notation other than those listed above are not acceptable due diligence statements.

  6. Line 2(a), Qualifying person’s name, can be the taxpayer’s dependent child under age 13, disabled spouse, or a dependent unable to care for himself or herself.

  7. Line 2(b), Qualifying person’s Social Security number must be furnished. It can be a Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or an Adoption Taxpayer Identification Number (ATIN). See IRM 3.11.6.3.1.

    1. If the TIN is missing and the taxpayer is claiming an additional exemption on a 2017 or prior year return who appears to be the same child claimed for this credit, do not correspond.

    2. If the TIN is missing and the taxpayer is not claiming an exemption for the person who appears to be the same child qualifying the taxpayer for the credit, correspond using Form 8009-A box 5 and 6. For a 324C letter use paragraphs A, 3, 6 fill-in: Please provide the taxpayer identification number of the person who qualifies you for the Child and Dependent Care Expenses on Form 2441.

  8. If the taxpayer indicates a religious (e.g., Amish/Mennonite or Form 4029) or conscience-based objection to obtaining a taxpayer identification number (TIN), see IRM 3.11.6.2.2.

  9. A qualifying person may be:

    1. A dependent qualifying child under the age of 13 years. If the child turns 13 during the year, the child is a qualifying person only for part of the year the child was under 13 unless they are incapable of self-care. Expenses incurred during that time period can be claimed.

    2. A taxpayer’s disabled spouse who was not physically or mentally able to provide self-care. The taxpayer must identify the qualifying person and the condition in the explanation of changes or in an attached notation.

    3. A disabled person who was not physically or mentally able to provide self-care and who can be claimed by the taxpayer as a dependent (or who the taxpayer could claim as a dependent except that the person had gross income of $4,150 or more or filed a joint return.)

    4. Any disabled person who was not physically or mentally able to provide self-care for themselves and whom the taxpayer can claim as a dependent except that the taxpayer or spouse, if filing jointly, could be claimed as a dependent by another taxpayer.

      Note:

      In b, c, and d above, the taxpayer has to self-identify the qualifying condition and if the taxpayer does not meet the age criteria the claim will be disallowed per IRM 3.11.6.11.3 using fill-in: We have disallowed your claim on Form 2441, Child and Dependent Care Expenses. To qualify for this credit, the qualifying person must be a dependent qualifying child under the age of 13 or a spouse or other dependent who is physically or mentally not able to provide self-care.

  10. Line 3 cannot exceed $3,000 for one dependent or $6,000 for more than one dependent. If blank, see Line 2(c) of Form 2441 for an amount paid.

  11. Lines 4 and 5 (Your Earned Income and Spouse’s Earned Income) must be complete in order to claim this credit.

    If And Then
    Filing Status 1, 3, 4, or 5 Line 4 is blank
    • Research CC RTVUE and CC IRPTR to verify if the primary taxpayer has earned income.

    • If unable to determine, send Form 8009-A with box 7 or Letter 324C paragraphs A, 3, and 6 using fill-in: Please provide your Earned Income amount on Line 4, Part II of Form 2441, Child and Dependent Care Expenses. This line must be completed.

    Filing Status 1, 3, 4, or 5 Line 5 is blank Continue processing
    Filing Status 2 Line 4 is blank
    • Research CC RTVUE and CC IRPTR to verify if the primary taxpayer has earned income.

    • If unable to determine, send Form 8009-A with box 7 or Letter 324C paragraphs A, 3, and 6 using fill-in: Please provide your Earned Income amount on Line 4, Part II of Form 2441, Child and Dependent Care Expenses. This line must be completed.

    Filing Status 2 Line 5 is blank
    • Research CC RTVUE and CC IRPTR to verify if the secondary taxpayer has earned income.

    • If unable to determine, send Form 8009-A with box 7 or Letter 324C paragraphs A, 3, and 6 using fill-in: Please provide the spouse’s Earned Income amount on Line 5, Part II of Form 2441, Child and Dependent Care Expenses. This line must be completed when married filing a joint return.

    Note:

    Both spouses must have earned income if filing jointly to take the credit unless a spouse meets the requirements of an exception. See the Form 2441 instructions section, Spouse Who Was a Student or Disabled, for exceptions . If both spouses do not have earned income and do not meet the exceptions specified, then disallow the claim per IRM 3.11.6.11.3 and use fill-in: We have disallowed your claim for Form 2441, Child and Dependent Care Expenses, because both spouses on a joint return must have earned income or meet one of the exceptions in the instructions.

  12. Correspond for Lines 1(c) and 2(b) if missing and cannot be determined from NAMEI, NAMEB, NAMES, NAMEE, etc. See "NOTE" in paragraph (4) above for Line 1(c) on Form 2441.

    Note:

    When corresponding for the care provider, follow instructions per IRM 3.11.6.11 and send either Form 8009-A with box 7 or a 324C letter with paragraphs A, L, and 6 using fill-in: Please provide the name and taxpayer identification number (TIN) of the care provider or individual that qualifies you for the Child and Dependent Care Expenses on Form 2441.

  13. Update the DUPOL database using CC DDBCK if a TIN is being added or deleted. See IRM 3.11.6.8.

    Exception:

    For the current year only, CC DUPED must be used if the qualifying person was over the age of 12 but disabled or if the child turned 13 during the year.

  14. Process using RC 036.

    Note:

    If the taxpayer is reporting Dependent Care Benefits (DCB) on Line 1 of Form 1040-X, process using RC 007.

Schedule R, Credit for the Elderly or the Disabled
  1. A taxpayer may be able to reduce his/her tax liability by claiming the Credit for the Elderly or Disabled. To qualify for the credit, taxpayer must be:

    • U.S. citizen or resident alien

    • Within certain income limits

    • Age 65 or older by the end of the tax year

      Exception:

      If under age 65 see paragraph 2 below.

      Note:

      A taxpayer is considered age 65 on the day before the 65th birthday.

  2. A taxpayer under the age of 65 must be considered permanently and totally disabled in order to take this credit, and all of the following conditions must be met:

    • The taxpayer retired on permanent and total disability

    • They received taxable disability income during the tax year

    • On January 1st of the tax year, they had not reached mandatory retirement age

  3. Schedule R must be submitted ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Schedule R is a write-in on Form 1040 / Form 1040-SR, Schedule 3, Additional Credits and Payments. For 2018, it is found on Form 1040, Schedule 3, Nonrefundable Credits, and for 2017 and prior, Form 1040 or reported directly on Form 1040A. The following must be present. If missing or incomplete, correspond:

    • Filing status/age must be checked

    • A physician's statement must certify the disability condition or the box must be checked to indicate the statement was filed or obtained in a previous year

    • On a joint return, if both spouses are disabled, both must submit a statement

      Note:

      A physician's statement is only required if the taxpayer(s) checked box 2, 4, 5, 6, or 9 in Part I of Schedule R and did not check box 2 in Part II.

    Note:

    Correspond ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ per IRM 3.11.6.11 using either Form 8009-A, box 3 or 4; or a 324C letter, paragraphs A, 3, and 6 using fill-in: Please complete Schedule R to support the changes you have made on Form 1040-X, Amended U.S. Individual Income Tax Return.

    Note:

    If the taxpayer requests that the IRS compute the credit, route to CIS/AM.

  4. Taxpayers may qualify for this credit, but cannot take the credit if the following applies:

    If filing status is Adjusted gross income (AGI) is equal to or more than Or the total of your nontaxable Social Security and other nontaxable pension(s), annuities, or disability income is equal to or more than
    Single, head of household, or qualifying widow(er) with dependent child $17,500 $5,000
    Married filing a joint return and both spouses qualify $25,000 $7,500
    Married filing a joint return and only one spouse qualifies $20,000 $5,000
    Married filing a separate return and you lived apart from your spouse the entire year $12,500 $3,750
  5. If present, continue processing with RC 036.

  6. If claim is not being allowed for any reason, set a math error per IRM 3.11.6.7.3.

Form 8863, Education Credits
  1. Taxpayers may claim education credits on Form 8863 for qualified education expenses paid to an eligible educational institution including accredited colleges, universities, vocational schools or other postsecondary institution. This credit is composed of two separate credits:

    1. The Lifetime Learning Credit (LLC) where the maximum amount received is up to $2,000 (non-refundable only)

    2. The American Opportunity Tax Credit (AOTC) where the maximum amount received is a combined $2,500:

    • $1,500 for the non-refundable portion

    • $1,000 for the refundable portion

  2. To be eligible for the Education Credit, the student(s) claimed on Form 8863 must be the primary taxpayer, secondary taxpayer, or claimed as a dependent on the tax return. Taxpayers cannot claim the credit if:

    • Student is claimed as a dependent on another person’s tax return

    • Student is a nonresident alien

      Exception:

      If the student is claimed as a dependent on the return and resides in Mexico or Canada, the taxpayer may be able to claim the AOTC for that student.

    • The filing status on the tax return is married filing separate (FS 3)

    • Modified adjusted gross income (MAGI) equals or exceeds the following amounts:

      Credit Filing Status 2019 2018 2017 2016
      AOTC
      1. MFJ (2)

      2. All others

      1. $180,000

      2. $90,000

      1. $180,000

      2. $90,000

      1. $180,000

      2. $90,000

      1. $180,000

      2. $90,000

      Lifetime Learning Credit
      1. MFJ (2)

      2. All others

      1. $136,000

      2. $68,000

      1. $134,000

      2. $67,000

      1. $132,000

      2. $66,000

      1. $131,000

      2. $65,000

  3. Research CCs TRDBV, RTVUE, DDBCK, DUPED to determine if the student claimed on Form 8863 was claimed as a dependent. If the student was the primary taxpayer, secondary taxpayer, or claimed as a dependent, continue to process the return; otherwise see box 1 of paragraph (4) below.

  4. Use the following table to determine if the education credit claim must be disallowed:

      If Then
    1. Through research, it is determined the person listed as the student was not a dependent of the taxpayer Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.11.3. Use fill-in: We disallowed your claim on Form 8863, Education Credits. You can claim this credit only if the person listed as a student was (1) yourself, (2) your spouse, or (3) a dependent that was claimed on your tax return.
    2. The taxpayer did not phase out the credit amount:
    • For Lifetime Learning Credit, see IRM 3.11.6.9.1.3.1

    • For American Opportunity Credit, see IRM 3.11.6.9.1.3.2

    Input the adjustment per IRM 3.11.6.11.3 and send a 105C/106C letter disallowing the exceeded amount. Use fill-in: We disallowed part of your credit on Form 8863, Education Credits, because the credit begins to be reduced when your Modified Adjusted Gross Income (MAGI) exceeds $ (use appropriate amount for filing status and tax year).
    3. The taxpayer meets or exceeds the elimination threshold amount in paragraph 2 above Input the adjustment per IRM 3.11.6.11.3 and send a 105C/106C letter disallowing the credit. Use fill-in: We disallowed your claim on Form 8863, Education Credits. You cannot claim the credit because your Modified Adjusted Gross Income (MAGI) exceeds $ (use appropriate amount for filing status and tax year).
    4. The taxpayer claimed both the American Opportunity Credit and Lifetime Learning Credit for the same student in the same year Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.11.3. Use fill-in: We disallowed your claim on Form 8863, Education Credits. You cannot claim both the American Opportunity Credit and the Lifetime Learning Credit for the same student for the same tax year.
    5. The taxpayer is filing as married filing separate (FS 3) Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.11.3. Use fill-in: We disallowed your claim on Form 8863, Education Credits. You cannot claim this credit if your filing status is married filing separate.
    6. The student indicates that they are claimed on another return Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.11.3. Use fill-in: We disallowed your claim on Form 8863, Education Credits. You cannot claim this credit if you are claimed as a dependent on your parent's or another taxpayer’s return.
    7. The taxpayer previously claimed the Tuition and Fees deduction and is now claiming Education Credit for the same student Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.11.3. Use fill-in: We disallowed your claim on Form 8863, Education Credits. You may not claim both Form 8917, Tuition and Fees Deduction, and Form 8863, Education Credits, for the same student.
  5. For tax years 2016 and subsequent, the taxpayer must provide the educational institution’s Employer Identification Number (EIN) on Form 8863. If the EIN is missing and cannot be determined through attachments or IDRS research, correspond using Form 8009-A box 5.

  6. All students claimed on Form 8863 must have a valid Taxpayer Identification Number (TIN). A valid TIN includes an SSN, ITIN or ATIN. Use CC INOLE to verify the name control and TIN of the student(s).

  7. If unable to determine for whom the credit is being claimed or if the student's name and/or TIN is illegible, missing, or cannot be determined, correspond per IRM 3.11.6.11 using either Form 8009-A, box 3 or 5; or a 324C letter with paragraphs A, 3, and 6 using fill-in: Please complete Form 8863, Education Credits, to support the changes you have made to your Form 1040-X, Amended U.S. Individual Income Tax Return.

    Note:

    Form 1098-T (Tuition Statement) may be used to determine the student's name, TIN, or other required information, if attached. The yes / no questions in Part III cannot be dummied.

  8. If Form 1098-T is being used as support for the Tuition and Fees deductions on Line 1 of Form 1040-X, correspond for Form 8917, Tuition and Fees Deduction.

  9. If the taxpayer claims more than the maximum credit allowed recalculate and input the correct credit amount. Non-refundable credits must be applied in order. Apply any Credit for Child and Dependent Care Expenses (Form 2441) before recalculating the education credits. Refer to IRM 3.11.6.7.3.

  10. Form 8863 must be attached for the initial claim for each dependent. If missing, correspond per IRM 3.11.6.11 using either Form 8009-A, box 3 or 4, or a 324C letter with paragraphs A, 3, and 6 using fill-in: Please complete Form 8863, Education Credits, to support the changes you have made to your Form 1040-X, Amended U.S. Individual Income Tax Return.

  11. Update the DUPOL database to add or delete a Form 8863 record using CC DDBCK.

    Note:

    It is not necessary to update the DUPOL database if the taxpayer is amending a previously claimed education credit amount for the same student that was originally claimed, unless the credit for that student is reduced to zero.

  12. The non-refundable education credits (LLC and the nonrefundable portion of AOTC) begin to phase-out when the modified adjusted gross income (MAGI) is between:

    Filing Status 2019 2018 2017 2016
    MFJ (FS 2) $116,000 - $136,000 $114,000-$134,000 $112,000 -$132,000 $111,000 - $131,000
    All others $58,000 - $68,000 $57,000 - $67,000 $56,000 - $66,000 $55,000 - $65,000

    The credit is phased out by:

    • 5 percent for every $1,000 that exceeds the threshold amount for FS 2.

    • 10 percent for every $1,000 that exceeds the threshold amount for FS 1, 4, or 5.

    If the taxpayer does not phase-out the credits, then disallow. See IRM 3.11.6.11.3.

Lifetime Learning Credit (LLC)
  1. The Lifetime Learning Credit portion of Form 8863, Education Credits, can only be claimed as a non-refundable credit. The maximum amount for the Lifetime Learning Credit is $2,000 per student. Form 8863 must be attached for all initial claims unless the American Opportunity Tax Credit (AOTC) was previously claimed for the student.

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    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

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

  3. If the taxpayer does not complete lines 20 thru 22 in Part III of Form 8863, return the claim to the taxpayer using Form 8009-A box 5 or a 324C letter, paragraphs A, 3, and 6 use: Please complete line(s) XX on Form 8863, Education Credits.

  4. To adjust the Lifetime Learning Credit, use a TC 29X with RC 035.

    Reminder:

    Non-refundable credits must be applied in order. Apply any Credit for Child and Dependent Care Expenses (Form 2441) before recalculating the education credits. Refer to IRM 3.11.6.7.3.

American Opportunity Tax Credit (AOTC) - Non-refundable
  1. The American Opportunity Credit (AOTC) portion of Form 8863, Education Credits, can be claimed as a non-refundable credit, refundable credit, or both and must be attached for all initial claims. For information on the refundable portion of the AOTC, see IRM 3.11.6.9.2.3.

  2. The maximum amount for AOTC is $2,500 combined refundable and non-refundable credit per student. The maximum amount of each portion is:

    • $1,500 non-refundable

    • $1,000 refundable

  3. If the non-refundable credit exceeds $1,500 per student, there should not be a refundable credit on Line 15. If the box on Form 8863, Part 1, Line 7 is checked, the taxpayer does not qualify for the refundable portion.

  4. If there is a change to the AOTC and the AOTC Recertification indicator is present, route to CIS/AM.

  5. If the taxpayer attaches a Form 8862, Information to Claim Certain Credits After Disallowance, route to CIS/AM.

  6. PATH Act criteria may apply to this credit. See IRM 3.11.6.9.3.

    Note:

    If the taxpayer replaces the LLC with the AOTC, treat as a new claim.

  7. The AOTC has additional requirements:

    If Then
    The student, for which AOTC is claimed, indicates the credit has been claimed for any four prior years Send a 105C/106C letter disallowing the claim per IRM 3.11.6.11.3. Use fill-in: We disallowed the American Opportunity Tax Credit on your Form 8863, Education Credits, because you can only claim the credit for four years for each student.
    The student, for which the credit is claimed, indicates they were not enrolled at least half-time for at least one academic period (that began during the tax period) at an eligible education institution Send a 105C/106C letter disallowing the claim per IRM 3.11.6.11.3. Use fill-in: We disallowed the American Opportunity Tax Credit on your Form 8863, Education Credits, because the student listed must be enrolled at least half-time for at least one academic period.
    The student, for which the credit is claimed, indicates they were convicted of a felony for possession or distribution of a controlled substance and the conviction was before the end of the tax period for which the credit was claimed Send a 105C/106C letter disallowing the claim per IRM 3.11.6.11.3. Use fill-in: We disallowed the American Opportunity Tax Credit on your Form 8863, Education Credits, because the student listed has been convicted of a felony for possession or distribution of a controlled substance.
  8. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    Note:

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

    Exception:

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

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
  9. If the taxpayer does not complete lines 20 through 26 in Part III of Form 8863, return the claim to the taxpayer using Form 8009-A box 5 or a 324C letter with paragraphs A, 3, and 6 using fill-in: Please complete line(s) XX on Form 8863, Education Credits.

  10. To adjust the AOTC:

    1. Non-refundable portion
      • Adjust the non-refundable portion of the credit with a TC 29X
      • Use RC 035

    2. Refundable portion
      • Adjust the refundable portion with CRN 260
      • Use RC 106

Form 8880, Credit for Qualified Retirement Savings Contributions
  1. Taxpayers may be able to take a credit of up to $1,000 ($2,000 if married filing jointly) for making eligible contributions to an employer-sponsored retirement plan or to an Individual Retirement Arrangement (IRA). The credit is a percentage of the qualifying contributions. See Form 8880.

  2. The credit for Qualified Retirement Savings Contributions is a non-refundable income tax credit for taxpayers whose AGI is equal to or less than:

    Filing Status 2019 2018 2017 2016
    1 or 3 $32,000 $31,500 $31,000 $30,750
    2 $64,000 $63,000 $62,000 $61,500
    4 or 5 $48,000 $47,250 $46,500 $46,125
  3. An eligible individual must:

    • Be at least 18 as of the close of the tax year

    • Not be claimed as a dependent on someone else's tax return

    • Not be a full-time student

  4. Qualified retirement savings contributions are the sum of participant contributions and elective deferrals made to qualified plans, traditional IRAs, and Roth IRAs.

  5. Form 8880 must be submitted. If present, math verify the taxpayer's figure. If missing and the amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond using either Form 8009-A, box 3 or 4 or a 324C letter, paragraphs A, 3, and 6 using fill-in: Please complete Form 8880, Credit for Qualified Retirement Savings Contributions, to support the changes you have made to your Form 1040-X, Amended U.S. Individual Income Tax Return.

  6. If claim is being disallowed for any reason, see IRM 3.11.6.7.3.

  7. Process using RC 036.

    Reminder:

    Nonrefundable credits must be applied in order. See IRM 3.11.6.9.1. Form 8880, Credit for Qualified Retirement Savings Contributions, should not be adjusted until after the following credits have been adjusted:
    - Form 2441, Credit for child and depended care expenses
    - Form 8863, Education Credits
    - Schedule R

Form 8910, Alternative Motor Vehicle Credit
  1. Form 8910, Alternative Motor Vehicle Credit, is used to claim a credit for the purchase of new qualified fuel cell motor vehicles. The credit is available for purchases through December 31, 2017.

  2. A qualifying fuel cell vehicle is a motor vehicle that is propelled by power derived from one or more cells which convert chemical energy directly into electricity by combining oxygen with hydrogen fuel.

  3. The alternative motor vehicle credit is not available for vehicles purchased after 2017. However, certain filers could still figure the credit on a 2018 return for a vehicle purchased in 2017 and placed in service in 2018. A partner in a fiscal year partnership or shareholder of a fiscal year S corporation may receive an alternative motor vehicle credit from a 2018 partnership or S corporation filer that must be reported on a 2019 return. Recipients of these "pass-through" credits who are partnerships or S corporations must report these amounts on Form 8910, line 8. All others can report these amounts directly on Form 3800, Part III, line 1r.

  4. When adjusting the credit, use RC 036.

Credit for Other Dependents (ODC)
  1. The Credit for Other Dependents (ODC) began in 2018 and is a $500 non-refundable credit for those dependents that do not qualify for Child Tax Credit.

  2. For the taxpayer to claim ODC, the following eligibility criteria must be met.

    1. The taxpayer and spouse, if filing jointly, must not be claimed as a dependent on another tax return.

    2. A qualifying individual must:
      • Be a dependent of the taxpayer
      • Have a valid SSN, ITIN, or ATIN issued on or before the due date of the return (including extensions)
      • Meet PATH Act requirements per IRM 3.11.6.9.3

    3. A taxpayer cannot claim the CTC/ACTC and ODC for the same dependent.

  3. If the taxpayer indicates a religious (e.g., Amish/Mennonite or Form 4029) or conscience-based objection to obtaining a taxpayer identification number (TIN), see IRM 3.11.6.2.2.

  4. Taxpayers will indicate eligibility for the credit by checking the Credit for other dependents box on page 1 of Form 1040 or Form 1040-SR in the Dependents area.

  5. If eligibility requirements are not met, disallow the credit following IRM 3.11.6.11.3 and use fill-in: We have disallowed your claim for the Credit for Other Dependents because the dependent(s) listed do not meet eligibility requirements.

  6. If there is a change to ODC and a CTC/ACTC Recertification Indicator is present, route to CIS/AM.

  7. If the taxpayer attaches Form 8862, Information to Claim Certain Credits After Disallowance, route to CIS/AM.

  8. ODC cannot be input into CC DDBCK.

  9. Adjust the ODC with RC 173.

Child Tax Credit (CTC)
  1. Child Tax Credit (CTC) is a non-refundable credit which is used to reduce the taxpayer’s tax liability. The credit has different rules depending on the year.

    For tax years 2018 - 2025

    • Credit is $2,000 per child in which $1,400 is refundable

    • Qualifying child must have a SSN issued on or before the due date of the return, including extensions

    • The total of CTC and ODC is phased out by $50 for each $1,000 the AGI exceeds $400,000 in the case of a joint return, $200,000 for all other filers


    For tax years 2017 and prior

    • Credit amount is $1,000 per child

    • Qualifying child must have a valid ITIN, SSN, or ATIN. For returns / amended returns filed after December 18, 2015, the TIN must be issued on or before the due date of the return, including extensions.

    • The CTC is phased out by $50 for each $1,000 the AGI exceeds $110,000 for married filing jointly (FS 3); $55,000 for married filing separate (FS 3); and $75,000 for all other filers

    Note:

    For taxpayers indicating a religious (e.g., Amish/Mennonite) or conscience-based objection to obtaining a TIN, refer to IRM 3.11.6.2.2.

  2. A portion of the Child Tax Credit may be refundable. See IRM 3.11.6.9.2.2, Additional Child Tax Credit (ACTC).

  3. If there is a change to CTC and a CTC/ACTC Recertification Indicator is present on IDRS, route to CIS/AM.

  4. If the taxpayer attaches Form 8862, Information to Claim Certain Credits After Disallowance, route to CIS/AM.

  5. PATH Act criteria may apply to this credit, see IRM 3.11.6.9.3.

  6. To qualify for the credit, the child(ren) must:

    1. Be claimed as a dependent on the return

    2. Be a son, daughter, stepchild, brother, sister, stepbrother, stepsister, or a descendent of any of them

      Note:

      Taxpayer's child includes a legally adopted child, a child who is lawfully placed for adoption with the taxpayer, or a child who is placed with the taxpayer by an authorized placement agency or by judgment decree, or the order of any court of competent jurisdiction.

    3. Be under age 17 at the end of the calendar year

      Note:

      For tax years after 2017, the dependent may qualify for the Credit for Other Dependents (ODC). In that instance, send a notice of partial claim disallowance. See IRM 3.11.6.9.1.6. For 2017 and prior, if the child is 17 or older at the end of the calendar year, disallow the claim per IRM 3.11.6.11.3 using the following fill-in: We have disallowed your claim on Form 1040-X. In order to qualify for the Child Tax Credit, your dependent must be under the age of seventeen at the end of the calendar year.

      Example:

      A taxpayer claimed CTC for a child age 18. The child does not qualify for CTC but would qualify for the ODC. The claim should be partially disallowed.

    4. Not have provided over half of his or her own support for the taxable year

    5. Have lived with the taxpayer for more than half of the taxable year

    6. Be a U.S. citizen, U.S. national, or a resident of the United States

    7. Must have a valid SSN for 2018 - 2025 (see (9) below) or a valid TIN for 2017 and prior (see (7) below)

  7. The taxpayer must furnish a valid Taxpayer Identification Number (TIN) for each qualifying child. This number may be:

    1. A Social Security number (SSN) issued by the Social Security Administration.

    2. For tax years 2017 and prior, an Individual Taxpayer Identification Number (ITIN) issued by the IRS if the taxpayer is not eligible for an SSN.

    3. For tax years 2017 and prior, an Adoption Taxpayer Identification Number (ATIN) issued by the IRS for a child while an adoption is pending.

  8. All taxpayers, the primary, secondary (if applicable), and all qualifying children must have their TIN assigned by the due date, or extended due date, of the return.

  9. For 2018 and subsequent, to qualify for CTC/ACTC:

    1. The dependent must have a valid SSN. If the dependent has an ITIN or ATIN, disallow the claim per IRM 3.11.6.11.3, using fill-in: Beginning in 2018, your dependent must have a Social Security number issued before the due date of your return (including extensions) to qualify for the Child Tax Credit.

    2. If the dependent does not qualify for CTC/ACTC, they may qualify for ODC. See IRM 3.11.6.9.1.6. If the dependent meets the qualification criteria for ODC, disallow the CTC/ACTC following IRM 3.11.6.11.3. Use fill-in: We have disallowed your claim for Child Tax Credit because the dependent(s) listed do not meet the eligibility requirements; however, we’ve allowed you the Credit for Other Dependents.

    3. If the taxpayer claims both the CTC/ACTC and ODC for the same dependent:
      • Allow the CTC/ACTC, if qualified. Send a 105C or 106C per IRM 3.11.6.11.3 and use fill-in: We have disallowed your claim for the Credit for Other Dependent. The same dependent(s) cannot qualify for both the Credit for Other Dependent and the (Additional) Child Tax Credit.
      • Disallow the CTC/ACTC if not qualified and allow the ODC, if qualified. Send a 105C or 106C per IRM 3.11.6.11.3 and use the fill-in: We have disallowed your claim for Child Tax Credit because the dependent(s) listed do not meet the eligibility requirements.
      • Disallow both credits if qualifications are not met. Send a 105C or 106C per IRM 3.11.6.11.3 and use fill-in: We have disallowed your claim for the Child Tax Credit and the Credit for Other Dependents because the dependent(s) listed do not meet the eligibility requirements.

  10. For 2017 and prior, if a taxpayer claims the CTC for a dependent with an ITIN, Schedule 8812, Child Tax Credit, must be attached.

    1. If the taxpayer has answered the substantial presence question in Part 1 of Schedule 8812 with no, the credit is not allowable based on law or regulation. Send the taxpayer a disallowance letter for fully disallowed or partially disallowed claims as appropriate. Follow IRM 3.11.6.11.3 using the fill-in: We have disallowed your claim for (Additional) Child Tax Credit because the dependent(s) listed as a qualifying child on your Schedule 8812, Child Tax Credit, do not meet the substantial presence test. In special circumstances the taxpayer is instructed to check both the yes and no boxes in Part 1; these claims should be allowed.

    2. If Schedule 8812 is missing, correspond using either Form 8009-A boxes 3 or 4 or 324C letter, paragraphs A, 3, 6 with fill-in: Complete Schedule 8812, Child Tax Credit, to support the changes you made with your amended return.

  11. Math verify the taxpayer's figures by completing the appropriate worksheet in the instructions, publication, or electronic web-based worksheets on AMS.

  12. Update the DUPOL database using CC DDBCK prior to inputting adjustment.

  13. When adjusting the credit:

    • Use TC 291 with a money amount to allow/increase the credit (decreases the tax)

    • Use TC 290 with a money amount to decrease the credit (increases the tax)

    • Use RC 036

  14. Any portion of this credit that was not used to reduce the income tax to zero may be eligible to be used as a refundable credit (Additional Child Tax Credit). See IRM 3.11.6.9.2.2.

Form 8396, Mortgage Interest Credit
  1. To qualify for the Mortgage Interest Credit, the taxpayer should have received a Mortgage Credit Certificate (MCC) issued under a qualified MCC program in connection with their principal residence.

    Note:

    The Mortgage Credit Certificate is not required to be attached to the Form 8396.

  2. If the Form 8396, Mortgage Interest Credit, is attached, it must be math verified≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  3. If the amount claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ , route to CAT-A.

  4. If Form 8396 is not attached, correspond per IRM 3.11.6.11 using either Form 8009-A, box 3 or 4, or a 324C letter, paragraphs A, 3, 6. Use fill-in: Please complete Form 8396, Mortgage Interest Credit, to support the changes you have made to your Form 1040-X, Amended U.S. Individual Income Tax Return.

    Note:

    Do not correspond if the form is missing ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    .

  5. When adjusting the credit:

    • Use TC 291 with a money amount to allow/increase the credit (decreases the tax)

    • Use TC 290 with a money amount to decrease the credit (increases the tax)

    • Use RC 036

Form 5695, Residential Energy Credit
  1. Form 5695, Residential Energy Credit, is divided into two parts:

    1. Residential Energy Efficient Property Credit which is used to claim the credit for qualified taxpayers who made energy efficient purchases. This credit provides taxpayers a credit for adding qualified solar panels, solar water heating equipment, small wind energy property, geothermal heat pump property, or a fuel cell power plant to their homes in United States.

      Note:

      The taxpayer can claim 30 percent of the total cost, including certain installation, as the credit for the following: qualified solar (electric and water heating only), small wind energy, qualified fuel cell and geothermal heat pump property costs.

    2. Nonbusiness Energy Property Credit - The Non-business Energy Property Credit expired December 31, 2017; however, for 2017 and prior it provides taxpayers a credit for improving the energy efficiency of an existing home and for costs relating to residential energy property expenses. The credit is available for items such as high efficiency heating and cooling systems, water heaters, windows, doors and insulation. For TY 2011 and subsequent, the credit is limited to $500 and reduced by any amounts received in prior years. The credit is not available for property placed into service after December 31, 2017.

  2. If the taxpayer is claiming more than the maximum allowed for either credit, follow instructions per IRM 3.11.6.7.3 and send either Form 8009-A with box 7 or a 324C letter with paragraphs A, 3, and 6 using fill-in: We have disallowed your claim for Form 5695, Residential Energy Credits, because you claimed more than the maximum amount allowed. Continue to process the return for other issues.

  3. If Form 5695 is missing≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ correspond per IRM 3.11.6.11 using either Form 8009-A, box 3 or 4; or a 324C letter with paragraphs A, 3, and 6 using fill-in: Please complete Form 5695, Residential Energy Credits, to support the changes you have made to your Form 1040-X, Amended U.S. Individual Income Tax Return.

  4. Process using RC 036.

Form 3800, General Business Credit
  1. Form 3800, General Business Credit, is used to claim any of the general business credits.

  2. Taxpayers can file the Form 3800 and/or the specific form for the credit they are claiming, but at least one must be present if there is a Net change amount in Column B on Line 7 of Form 1040-X. If not present, correspond following instructions in IRM 3.11.6.11 requesting the specific form ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Use Form 8009-A, box 3 or a 324C letter, paragraphs A, 3, and 6 using fill-in: Please complete Form XXXX to support the changes you have made on your Form 1040-X, Amended U.S. Individual Income Tax Return.

  3. If the taxpayer claims ≡ ≡ ≡ ≡ ≡ ≡ on Form 6765, Credit for Increasing Research Activities, or Form 8586, Low-Income Housing Credit, route to CIS/AM.

  4. Use CRN 884 when adjusting Form 8864, Biodiesel and Renewable Diesel Fuels Credit, or Form 6478, Alcohol and Cellulosic Biofuel Credit, and CRN 883 when adjusting Form 8907, Non-conventional Source Fuel Credit.

  5. If Form 5884-B, New Hire Retention Credit, is either attached to the Form 3800 or loose, route to CIS/AM.

  6. If Form 8826, Disabled Access Credit, is filed with an amended return, one or more of the following must be present on the original or amended return:

    • Schedule C, Profit or Loss From Business (Sole Proprietorship)

    • Schedule E, Supplemental Income and Loss

    • Schedule F, Profit or Loss From Farming

    • Other Income claimed
      - Form 1040/Form 1040-SR, Schedule 1, Line 8 for 2019
      - Form 1040, Schedule 1, Line 21 for 2018
      - Form 1040, Line 21 for 2017 and prior

    If Form 8826 or Form 3800 claim this credit and the supporting forms are present, follow CAT-A procedures ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . If the supporting forms are not present, then disallow. See IRM 3.11.6.11.3 and use the following open paragraph. We have not allowed your claim for the Disabled Access Credit. You have no indication of a business ownership or activity that would qualify you for this credit based on your tax return information for this tax year.

  7. Verify the credits claimed in Part III of the Form 3800, process using reason code 036 if not routeable per IRM 3.11.6.13.

Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit
  1. Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit, is used to claim a credit for qualified plug-in electric drive motor vehicles placed in service during the tax year.

  2. Taxpayers are not required to complete or file this form if their only source for this credit is a partnership or S corporation. Instead, they can report this credit directly on Form 3800, General Business Credit. See IRM 3.11.6.9.1.10.

  3. The credit is capped at $2,500 for two-wheeled and three-wheeled plug-in electric vehicles (for 2018 and prior) and $7,500 for other qualified plug-in electric drive motor vehicles.

    Note:

    Qualified two-wheeled plug-in electric vehicles must be acquired after December 31, 2014 and before January 1, 2018.

  4. For 2019, the portion of the credit that applied to certain two- or three-wheeled vehicles is not available. It expired for vehicles acquired after December 31, 2017. This portion of the credit was available on 2018 returns only if the vehicle was acquired before January 1, 2018 and placed in service in 2018.

  5. If the credit amount is exceeded, input the allowable amount and send a Letter 916C. See IRM 3.11.6.11.9.

  6. Taxpayers are not required to file this form if their source for this credit is a partnership (Schedule K-1 (Form 1065), Partner's Share of Income, Deductions attached), or S corporation (Schedule K-1 (Form 1120S), Shareholder's Share of Income, Deductions, attached). Instead, they can report this credit directly in Part III, Line 1y of Form 3800, General Business Credit.

    Note:

    If Schedule K-1 (Form 1065) or Schedule K-1 (Form 1120S) is attached then taxpayer can report the credit directly on Form 3800.

  7. If a Schedule K-1, as noted in paragraph 6 above is not attached, then the following requirements must be met to qualify for the credit:

    1. Form 8936 must be attached for the initial claim of the credit.

    2. The VIN number on the title or car purchase agreement must match the VIN number on Form 8936. Generally, the VIN is 17 characters made up of numbers and letters.

    3. The car must be on the list per (3) above or have a Manufacturer's Certification attached.

    4. A copy of the car title or car purchase agreement must be attached.

  8. If any of the following conditions apply, then correspond:

    If Then
    Form 8936 is missing Correspond using either a 324C with paragraphs A, 3, and 6 or Form 8009-A box 7, using fill-in Please provide Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit, with a copy of your vehicle’s title or car purchase agreement.
    Either the car title or car purchase agreement is missing Correspond using either a 324C with paragraphs A, 3, and 6 or Form 8009-A box 7, using fill-in Please provide a copy of your vehicle’s title or car purchase agreement to claim the Qualified Plug-In Electric Drive Motor Vehicle Credit, on Form 8936.
    The VIN number is missing or does not match. Correspond using either a 324C with paragraphs A, 3, and 6 or Form 8009-A box 7, using fill-in: Please provide the correct or missing Vehicle Identification Number (VIN) on your Form 8936, Qualified Plug-In Electric Drive Motor Vehicle Credit. The number provided on the title or car purchase agreement either does not match or was missing.
    The vehicle is not on the list per (3) above or the Manufacturer's Certification is missing Correspond using either a 324C with paragraphs A, 3, and 6 or Form 8009-A box 7, using fill-in: To be allowed the Qualified Plug-In Electric Drive Motor Vehicle Credit you must provide documentation that qualifies you for this credit.
  9. Use RC 036 when adjusting the credit.

Refundable Credits

  1. Refundable credits appear:

    • In the Payments section of Form 1040-X

    • On page 2 of Form 1040 / Form 1040-SR for 2019

    • On page 2 of Form 1040 for 2018

    • In the Payments section of page 2 of Form 1040 for 2017 and prior

    A refundable credit is not limited by the amount of tax owed. If total credit(s) and/or payment(s) exceed the tax liability, the excess is refundable.

  2. The following subsections provide processing instructions for refundable credits:

    • Earned Income Tax Credit

    • Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains

    • Form 4136, Credit for Federal Tax Paid on Fuels

    • Form 8812, Additional Child Tax Credit

    • Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits)

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. If the taxpayer claims a non-refundable credit on Line 15 of Form 1040-X, move the amount to line 7. See IRM 3.11.6.9.1.

  5. In lieu of a refund, taxpayer may request all or a portion of the overpayment to be credited to the subsequent tax year as an estimated payment. See IRM 3.11.6.10.4.

Earned Income Credit (EIC) (Line 14)
  1. The Earned Income Tax Credit (EITC) is available for certain low-income individuals who meet earned income, adjusted gross income (AGI), and certain other requirements. EITC greater than the tax liability may be refunded to the taxpayer.

  2. The following items are necessary for the EITC to be claimed on an amended return:

    • Schedule EIC is required to be attached if a qualifying child (not originally claimed as a qualifying child for EIC) is being claimed for EITC

    • Schedule EIC must contain the qualifying children's SSN information

    • The type of income must be identified

  3. Route to CIS/AM if:

    • There is a change to EITC and a EITC Recertification indicator is present on IDRS

    • The taxpayer attaches a Form 8862, Information to Claim Certain Credits After Disallowance

    • Math Error Code 100, 653, 814, 815, or 816 is posted on IDRS

  4. The Disaster Tax Relief and Airway Extension Act of 2017 and the Bipartisan Budget Act of 2018 provided relief for taxpayers affected by Hurricanes Harvey, Irma, Maria, and the 2017 California wildfires. Taxpayers whose earned income from the year immediately preceding the disaster is greater than the earned income in the year of the disaster may elect to use the earned income from the preceding year to figure their EITC for the year of the disaster. Taxpayers are instructed to write PYEI and their earned income amount from the preceding year on the dotted line for EITC. Qualifying individuals are those individuals who:

    • Lived in the Tropical Storm or Hurricane Harvey disaster area on August 23, 2017

    • Lived in the Hurricane Irma disaster area on September 4, 2017

    • Lived in the Hurricane Maria disaster area on September 16, 2017

    • California Wildfires area between October 8, 2017 and January 18, 2018

    • Lived in a Presidentially declared Disaster area during tax year 2016

    Note:

    Change the category to KATX if adjusting.

Earned Income Tax Credit (EITC) Eligibility Criteria
  1. Taxpayers may be eligible for the Earned Income Tax Credit (EITC) if the following apply:

    1. The adjusted gross income (AGI) is less than the established limits in paragraph 2.

    2. Taxpayer (and spouse if filing a joint return) must have a valid Social Security Number (SSN) issued by the Social Security Administration (SSA) on or before the due date of the return for the taxable year the EITC is claimed. Any qualifying child listed on Schedule EIC must also have a valid SSN. A valid SSN does not include an Individual Taxpayer Identification Number (ITIN), Adoption Taxpayer Identification Number (ATIN) or Internal Revenue Service Number (IRSN). See Exhibit 3.11.6-7.

    3. Filing status is other than married filing separately (FS 3).

    4. Does not file Form 2555, Foreign Earned Income, or Form 2555-EZ, Foreign Earned Income Exclusion.

    5. Investment income is not more than the established limits in paragraph 3.

    6. Earned income is at least $1, but less than the established limits. See Exhibit 3.11.6-6, Earned Income.

  2. AGI limits are as follows:
    2019

    • $15,570 ($21,3700 for married filing jointly) if no qualifying child

    • $41,094 ($46,884 for married filing jointly) if one qualifying child

    • $46,703 ($52,493 for married filing jointly) if two qualifying children

    • $50,162 ($55,952 for married filing jointly) if three or more qualifying children


    2018

    • $15,270 ($20,950 for married filing jointly) if no qualifying child

    • $40,320 ($46,010 for married filing jointly) if one qualifying child

    • $45,802 ($51,492 for married filing jointly) if two qualifying children

    • $49,194 ($54,884 for married filing jointly) if three or more qualifying children


    2017

    • $15,010 ($20,600 for married filing jointly) if no qualifying child

    • $39,617 ($45,207 for married filing jointly) if one qualifying child

    • $45,007 ($50,597 for married filing jointly) if two qualifying children

    • $48,340 ($53,930 for married filing jointly) if three or more qualifying children


    2016

    • $14,880 ($20,430 for married filing jointly) if no qualifying child

    • $39,296 ($44,846 for married filing jointly) if one qualifying child

    • $44,648 ($50,198 for married filing jointly) if two qualifying children

    • $47,955 ($53,505 for married filing jointly) if three or more qualifying children

  3. Taxpayer investment income must be less than:

    Tax year Investment Income
    2019 $3,600
    2018 $3,500
    2017 $3,450
    2015/2016 $3,400

    Note:

    If the taxpayer's investment income is more than the designated limit, send a 105C/106C letter disallowing the claim per IRM 3.11.6.11.3. Use fill-in: We have disallowed your claim for the Earned Income Tax Credit because your investment income is greater than $XXXX.

  4. When the taxpayer changes to married filing jointly and the taxpayer has an:

    • ITIN, then allow the filing status change and disallow all of the EITC. Send a 105/106C per IRM 3.11.6.11.3 using fill-in, We have disallowed your claim for the Earned Income Tax Credit because both the primary and secondary taxpayers listed on the return must have a valid Social Security Number.

    • SSN issued after the return due date, then disallow any additional EIC being claimed on the amended return, see paragraph (3) below.

    Note:

    If the qualifying dependent has an ITIN, send a 105C/106C letter using fill-in: We have disallowed your claim for the Earned Income Credit because the qualifying person must have a valid Social Security Number.

  5. PATH Act criteria may apply to this credit. See IRM 3.11.6.9.3.

    Note:

    The PATH Act applies to filing status changes only to the extent of any additional EITC claimed. The PATH Act does not allow the removal of EITC previously allowed due to a filing status change to married filing jointly unless initiated by the taxpayer.

  6. Taxpayers filing married filing separate (FS 3) do not qualify for the EITC.

    1. If the taxpayer is making an initial claim for the EITC, disallow the EITC claim and send a 105C/106C per IRM 3.11.6.11.3.

    2. If the taxpayer previously had the EITC, remove all the EITC. Set a math error and send a 474C per IRM 3.11.6.7.4.

      Note:

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

  7. The qualifying person claimed for the EITC does not need to be claimed as a dependent.

  8. Taxpayer (and spouse if filing jointly) is not the dependent of another taxpayer for the same year.

Taxpayer without Qualifying Child(ren) on Schedule EIC
  1. A taxpayer with no qualifying child must also meet these requirements:

    • Taxpayer must be at least 25 but under age 65 (either spouse, if joint)

      Example:

      For a taxpayer whose birthday is on January 1st and is turning 25 on January 1st of a year immediately subsequent to the tax year (i.e., taxpayer turns 25 on January 1st, 2016 and is filing a TY 2015 return) the service will allow the claim for EIC provided other eligibility criteria are met.

    • The taxpayer's principal residence must be in the U.S. for more than one-half of the tax year (both spouses, if joint)

    • Taxpayer cannot be claimed as a dependent on another taxpayer’s return (both spouses, if joint)

  2. If the taxpayer does not meet the requirements above, send a 105C/106C letter using fill-in: We have disallowed your claim for the Earned Income Tax Credit. To qualify for this credit you must meet the Age, Residency, and Exemption requirements.

Taxpayer with Qualifying Child(ren) on Schedule EIC
  1. Taxpayers who claim the EITC based on having a qualifying child must also have a child who meets the following four tests:

    • Relationship

    • Age

    • Residency

    • Joint Return

    Note:

    Taxpayer's child does not have to be a dependent of the taxpayer in order for the taxpayer to claim the EITC.

    Note:

    The Additional Child Tax Credit may have to be recomputed if the EITC is allowed and the taxpayer claimed three or more qualifying children for the Child Tax Credit. See IRM 3.11.6.9.2.

    Test Requirements
    Relationship To be a qualifying child, the child must be the taxpayer’s:
    • Son, daughter, stepchild, foster child or a descendent of any of them (i.e., grandchild), adopted child or

    • Brother, sister, half-brother, half-sister, stepbrother, stepsister or a descendent of them (i.e., niece or nephew)

    Age The child must be:
    • Under age 19 at the end of the calendar year and younger than the taxpayer

    • Under age 24 at the end of the calendar, a student, and younger than the taxpayer, or

    • Permanently and totally disabled at any time during the calendar year, regardless of age.

    Residency The child must live with the taxpayer in the U.S. for more than half of the tax year. Temporary absences, such as for schooling, medical care or vacation, are counted as time lived at home. If a child fails the residency test solely because the child was born or died during the tax year, the child is treated as meeting the test, if the child lived with taxpayer for more than half of the time the child was alive during the tax year.
    • A foster child (child placed with the taxpayer by an authorized placement agency) and who lived with the taxpayer for more than half of the year will pass the residency test.
    Joint Return To meet this test, the child cannot file a joint return except if it is filed only as a claim for refund of income tax withheld or estimated tax paid.
  2. If a child does not appear to meet the age requirements, do not assume the child is a student or disabled. The taxpayer must indicate the child meets the age test. If a qualifying dependent does not appear to meet the age test, send a 474C using paragraphs C, 1, and d. Use fill-in: We did not allow part of your claim for Earned Income Tax Credit because a child you submitted does not appear to meet the age requirement. If your child meets this requirement as a student or disabled dependent, you must file a new Form 1040-X, Amended U.S. Individual Income Tax Return, and complete a new Schedule EIC.

    Note:

    If there are multiple children, input an adjustment for any child(ren) that meet all qualifications and send a 474C with paragraphs C, 1, and d using fill-in: We did not allow part of your claim for the Earned Income Tax Credit because one or more of the children submitted do not meet the age requirement. In order to claim a student or disabled dependent, you must file a new Form 1040-X, Amended U.S. Individual Income Tax Return, and complete Schedule EIC.

  3. If a child does not appear to meet the relationship, residency, or joint return test send a 105C/106C. Use fill-in: We have disallowed your claim for the Earned Income Tax Credit because the qualifying person shown on Schedule EIC did not meet either the relationship, residency, or joint return test requirements needed to claim this credit.

    Note:

    To verify Joint Return test, check IMFOLI for filing status. If FS2 in IMFOLI, see TXMOD.

    Exception:

    The taxpayer's kidnapped child can meet the residency requirement if the following requirements are also met. If met the child is treated as meeting the residency requirement for all taxable years ending during the period that the child is kidnapped. The child must be presumed by law enforcements authorities to have been kidnapped by someone who is not a member of the family of the child or the taxpayer. The child must have had, for the taxable year in which the kidnapping occurred, the same principal place of abode as the taxpayer for more than half of the portion of the year before the date of the kidnapping.

    Note:

    This rule applies for all tax years ending during the period that the child is kidnapped. It does not apply as of the first tax year beginning after the year in which the child is determined to be dead (or, if earlier, the year in which the child would have reached age 18).

Adjusting the Earned Income Tax Credit (EITC)
  1. When the taxpayer makes an initial claim for the Earned Income Tax Credit (EITC) or when adding a qualifying child, Schedule EIC, Earned Income Credit, must be attached. Correspond if missing per IRM 3.11.6.11.

    Note:

    Correspond using either Form 8009-A, box 3 or 4; or a 324C letter, paragraphs A, 3, and 6 using fill-in: Please complete Schedule EIC, Earned Income Credit, to support the changes you have made on Form 1040-X, Amended U.S. Individual Income Tax Return.

    Exception:

    When claiming the EITC for self and/or spouse only, Schedule EIC is not required.

  2. Before allowing the EITC, verify the qualifying child(ren) name(s), date of birth and SSN(s) using CC DDBCK, CC INOLE and CC NAMES. If the qualifying child's SSN does not verify, correspond using Form 8009-A box 7, or a 324C letter, paragraphs A, 3, and 6 using fill-in: The Social Security Number (SSN) provided on your Schedule EIC, Earned Income Credit, for the qualifying child was either incomplete or did not match our records. Please verify your information.

  3. Always verify the EITC amount when there is a change to earned income, adjusted gross income (AGI), filing status, and/or dependents.

  4. Use either CC EICMP or EIC worksheet on AMS to compute the EIC amount.

    Reminder:

    See IRM 3.11.6.9.2.1, Earned Income Credit.

  5. After calculating the allowable EITC:

    If Then
    The EITC amount matches taxpayer's figure Continue processing the return.
    The taxpayer's figure ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the computed EITC

    Caution:

    Do not exceed the maximum EITC per the table in paragraph 6 below.

    Accept the taxpayer’s figure and continue processing the return.
    The taxpayer’s figure is less than the computed EITC amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Adjust the EITC amount using the computed figure. Do not correspond or set a math error.
    The taxpayer's figure is greater than the computed EITC ≡ ≡ ≡ ≡ ≡ ≡ ≡ Adjust the amount to the computed EITC and set the math error per IRM 3.11.6.7.4.

    Note:

    Use CC RTVUE and the taxpayer's explanation when determining earned income.

  6. The following is the maximum allowable EITC amounts. If the taxpayer’s EITC amount exceeds the maximum allowable amount below, adjust to the computed amount to avoid an unpostable condition.

    Tax Year No children 1 child 2 children 3 or more children
    2019 $529 $3,526 $5,828 $6,557
    2018 $519 $3,461 $5,716 $6,431
    2017 $510 $3,400 $5,616 $6,318
    2016 $506 $3,373 $5,572 $6,269

    Note:

    If the taxpayer’s EITC amount exceeds the maximum amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ do not correspond or set a math error.

    Example:

    On a 2016 return the taxpayer with two children claims an EITC amount of $5,575. Your EIC worksheet calculates $5,565 and the maximum EITC for two children in 2016 is $5,572. Adjust to the computed amount and not set a math error or correspond.

  7. If the taxpayer has already received the EITC, send a 474C letter, paragraphs C, 1, and d use fill-in: We did not allow the Earned Income Tax Credit because our records indicate that you previously received the credit as part of your original or amended return.

  8. EITC allowed on the original return posts as a computer-generated TC 768 with a minus after the amount.

  9. Update the DUPOL database using CC DDBCK prior to making any adjustments when:

    • Adding/deleting a qualifying child for the EITC

    • Increasing the EITC

      Exception:

      Do not update when the EITC increase is due to additional Form W-2, or when working EITC Non-TIN related math error responses except for ME 653 (see paragraph 9 ME 653). SP is now working TIN related math errors. TIN related math error codes include 604, 610, 605, 654, 667, 701, 702, 741, 743, 745 and 748.

      Note:

      If the DDBCK response states that the child failed validation (other than an invalid TIN/Name issue), refer to CIS/AM.

  10. When making an adjustment to the EITC:

    • RC 053

    • CRN 764 for increases

    • CRN 765 for decreases

    Note:

    Priority code ''8'' is required when a TC 764 is input with TC 29X and there is a prior posted TC 29X (except a previously posted TC 290 with priority code 6 or a TC 290 with Julian Date 999). Use priority code ''1'' if both priority code ''1'' and ''8'' are required to adjust the account. Example: Account with -L freeze and the conditions above would require priority codes ''1'' and ''8'' and therefore ''1'' would be used.

CP 09, Earned Income Credit for Taxpayer with Qualifying Children
  1. The CP 09 notice, Earned Income Credit - You May Be Entitled to EIC, is generated from criteria on the original return. A CP 09 notice is issued to low income taxpayers with qualifying children who appear to qualify for the Earned Income Tax Credit (EITC) but did not claim it on their original return.

    Note:

    In certain instances the 2D-Barcode due to print quality cannot be read by the handheld scanner. If this occurs and there is no other identifying information on the notice such as an address, dependent SSN, legible signature, etc. then the notice will have to be handled as classified waste.

  2. Form 1040-X procedures are to be applied to CP 08, CP 09, and CP 27 notices, as they are considered a Form 1040-X.

  3. If the taxpayer claims a child on the CP 09 that was not claimed on the original return, issue correspondence informing the taxpayer of the requirement to file a Form 1040-X to claim the child as a qualifying child. Allow the qualifying child(ren) claimed on the original return and send a 474C letter with paragraphs C, 1, and d using fill-in: We disallowed part of your claim for the Earned Income Tax Credit because a child shown on your CP 09 notice was not claimed on your original return. To claim an additional child as a qualifying child, you must file a Form 1040-X, Amended U.S. Individual Income Tax Return.

  4. PATH Act criteria may apply to this credit. See IRM 3.11.6.9.3.

  5. Follow instructions in IRM 3.11.6.9.2.1.1 and IRM 3.11.6.9.2.1.3 for determining taxpayer's EITC eligibility.

  6. Compute the EITC amount using IDRS CC EICMP definer "R" or the EIC worksheet on AMS then adjust the account accordingly.

  7. If current year, update Command Code DUPED when allowing EITC based on a CP 09.

  8. When adjusting an account based on a CP 09 use:
    If allowing the credit:

    • BS 05

    • SC 1

    • Reason Codes (RC) 017 and 053

    • CRN 764

    • Priority Code 3

      Note:

      Do not input the amended claims date.


    If disallowing the credit:

    • BS 05

    • SC 0 (or blank)

    • RC 054

      Note:

      Do not input an amended claims date.

  9. If the taxpayer is not eligible for EITC based on our computations or eligibility criteria, adjust using TC 290 .00, BS 05, SC 1, RC 054 and send a Letter 474C with paragraphs C, 1, and d. Use fill-in: We are writing as a follow-up to the Notice Number CP 09 we recently mailed. We are sorry to inform you that you do not qualify for the Earned Income Tax Credit. We apologize for this inconvenience.

  10. If the filer requests direct deposit, use a Letter 474C paragraphs C, 3, and d. See IRM 3.11.6.11.4.

  11. The Additional Child Tax Credit may have to be recomputed if EITC is allowed and the taxpayer claimed three or more qualifying children for the Child Tax Credit.

CP 27, EIC Potential for Taxpayer Without Qualifying Children
  1. The CP 27 notice, EIC Potential for Taxpayer Without Qualifying Children, is generated from criteria on the original return. A CP 27 notice is issued to low income taxpayers without qualifying children who appear to qualify for Earned Income Tax Credit (EITC) but did not claim it on their original return.

    Note:

    In certain instances the 2D-Barcode due to print quality cannot be read by the handheld scanner. If this occurs and there is no other identifying information on the notice such as an address, dependent SSN, legible signature, etc., then the notice will have to be handled as classified waste.

  2. Form 1040-X procedures are to be applied to CP 08, CP 09, and CP 27 notices, as they are considered a Form 1040-X.

  3. PATH Act criteria may apply to this credit. See IRM 3.11.6.9.3.

  4. Follow instructions in IRM 3.11.6.9.2.1.1 for determining taxpayer's EITC eligibility.

  5. Compute the EITC amount using IDRS CC EICMP definer "R" or the EIC worksheet on AMS then adjust the account accordingly.

  6. When adjusting an account based on a CP 27 use:
    a) If allowing the credit:

    • BS 05

    • SC 1

    • RC 017 and 053

    • CRN 764

    • PC 3

      Note:

      Do not input an amended claims date.


    b) If disallowing the credit:

    • BS 05

    • SC 0 (or blank)

    • RC 054

      Note:

      Do not input an amended claims date.

  7. If the taxpayer is not eligible for EITC based on our computations or eligibility criteria, disallow the credit. Adjust using TC 290 .00, BS 05, SC 1, RC 054 and send a Letter 474C with paragraphs C, 1, and d using fill-in: We are writing as a follow-up to the Notice Number CP 27 we recently mailed to you. We are sorry to inform you that you do not qualify for the Earned Income Tax Credit. We apologize for this inconvenience.

  8. If the filer requests direct deposit, send a Letter 474C using paragraphs C, 3, and d. See IRM 3.11.6.11.4.

Schedule 8812, Additional Child Tax Credit (ACTC)
  1. Form 1040 Schedule 8812, Additional Child Tax Credit, is used by taxpayers who get less than the full amount of the non-refundable Child Tax Credit (CTC) to claim the refundable Additional CTC. The Additional Child Tax Credit (ACTC) may result in a refund even if no tax is owed. See IRM 3.11.6.9.1.7, Child Tax Credit, for additional criteria prior to addressing the ACTC.

    Note:

    If the credit was allowed during the original processing, TC 766 with CRN 336 will be present on the tax module.

  2. Schedule 8812 is required when the taxpayer has 3 or more qualifying children. If a taxpayer fails to submit a Schedule 8812 when required, correspond per IRM 3.11.6.11.

  3. To qualify for the ACTC, the taxpayer must meet the qualifications for the CTC in IRM 3.11.6.9.1.7. If the taxpayer does not meet all of the criteria, partially/completely disallow the claim depending on the issues.

  4. In addition to the criteria in IRM 3.11.6.9.1.7, filers of Form 2555 or Form 2555-EZ cannot claim the credit.

  5. If there is a change to ACTC and a CTC/ACTC Recertification indicator is present, route to CIS/AM.

  6. If the taxpayer attaches a Form 8862, Information to Claim Certain Credits After Disallowance, route to CIS/AM.

  7. Path Act criteria may apply to this credit. See IRM 3.11.6.9.3.

  8. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    If there is a math error on the account for CTC or ACTC, route to CIS/AM per local procedures, not CAT-A

    Note:

    Continue to route as CAT-A if the claim meets CAT-A criteria for any issue(s) other than ACTC.

  9. If Schedule 8812 is present, math verify taxpayer's figure by completing the appropriate worksheet in the instruction booklets, publication, or electronic web-based worksheets on AMS.

    If And Then
    The allowable ACTC matches taxpayer’s figure   Continue processing the return
    The allowable ACTC does not match taxpayer’s figure
    1. The taxpayer's figure is within ≡ ≡ ≡ ≡ of the allowable ACTC

    2. The taxpayer’s figure is ≡ ≡ or more greater than the allowed ACTC

    3. The allowed ACTC is ≡ ≡ ≡ or more greater than the taxpayer’s figure (taxpayer is due more ACTC)

    1. Accept the taxpayer’s figure and continue processing the return.

    2. Adjust the ACTC for the correct amount and set the math error per IRM 3.11.6.7.3.

    3. Adjust the ACTC amount using your recomputed figure. Do not correspond or set a math error.

    Note:

    Recompute the ACTC if there is a change to other non-refundable credits impacting the amount of CTC allowed.

  10. If Schedule 8812 is incomplete and cannot be perfected or "dummied" by using AMS worksheets, correspond per IRM 3.11.6.11 for required information to complete processing.

    Note:

    Correspond using either Form 8009-A, box 3 or 4; or a 324C letter with paragraphs A, 3, and 6 using fill-in: Please complete Schedule 8812, Additional Child Tax Credit, to support the changes you have made on Form 1040-X, Amended U.S. Individual Income Tax Return.

  11. If a taxpayer (or the spouse if married filing jointly) received non-taxable combat pay, they must include the amount in figuring their earned income when figuring the ACTC.

  12. Update the DUPOL database per IRM 3.11.6.8prior to making any adjustment.

  13. When adjusting the credit:

    • Use CRN 336 to allow/increase the credit

    • Use CRN 336 with a minus (-) to decrease or remove a previously posted credit

    • Use RC 061

CP 08, Additional Child Tax Credit
  1. CP 08, You May Qualify for a Refund From the Additional Child Tax Credit, is generated from criteria on the original return. Taxpayers will be issued a CP 08, informing them of their potential eligibility to claim the Additional Child Tax Credit (ACTC), when they:

    1. Compute an amount for the Child Tax Credit (CTC), have no total tax liability, and fail to use the remaining portion of the credit to claim the ACTC, or

    2. Indicate eligibility for the CTC (by checking the boxes on line 6c), do not claim the CTC due to no tax before credits, and do not claim the ACTC

    Note:

    In certain instances the 2D-Barcode due to print quality cannot be read by the handheld scanner. If this occurs and there is no other identifying information on the notice such as an address, dependent SSN, legible signature, etc. then the notice will have to be handled as classified waste.

  2. Form 1040-X procedures are to be applied to CP 08, 09, and 27 notices, as they are considered a Form 1040-X.

  3. Taxpayers must complete, sign, and return the CP 08 notice if qualified.

  4. Path Act criteria may apply to this credit. See IRM 3.11.6.9.3.

  5. In order to qualify for the ACTC, the taxpayer must meet the qualifications for the CTC in IRM 3.11.6.9.1.7. If the taxpayer does not meet all of the criteria, partially/completely disallow the claim depending on the issues

    Note:

    Do not route CP 08s to CAT-A.

  6. Compute the amount of the credit based on the qualifying children claimed on the CP 08 that meet the following criteria:

    1. The same children were allowed as dependents on the original return.

    2. The children are less than 17 years old at the end of the calendar year.

  7. If the taxpayer claims additional children on the CP 08 that were not claimed on the original return as a dependent, issue correspondence informing the taxpayer of the requirement to file a Form 1040-X to increase the number of dependents.

    If Then
    Taxpayer claims additional children on the CP 08 that were not claimed on the original return
    OR
    Taxpayer claims ANY children on the CP 08 that were disallowed as exemptions
    Adjust for the originally claimed children who qualify and send a Letter 474C with paragraphs C, 1, and d, using fill-in: We disallowed part of your claim for the Additional Child Tax Credit because of the additional children shown on your CP 08 notice. In order to claim additional dependents, you must file a Form 1040-X, Amended U.S. Individual Income Tax Return.
    Some of the children that the taxpayer claimed on the CP 08 notice are eligible, allow the ACTC for those dependents
    1. Input the adjustment with a TC 290 .00

    2. Use CRN 336 and the recomputed credit change

    3. Use RC 061

    There are other issues in addition to the taxpayer claiming more children on the CP 08 than were claimed on the original return Route to CIS/AM.
  8. Follow the procedures below when a taxpayer claimed the CTC on their original return, and submits a CP 08 with less than 3 qualifying children claimed, and does not submit Schedule 8812, Additional Child Tax Credit:

    1. Verify the taxpayer meets the criteria for receiving the CTC, and if eligible, compute the amount of the ACTC per Schedule 8812 instructions.

    2. If the combat zone identifier is not present, adjust the account accordingly.

    3. If the identifier is present, research CC RTVUE to determine if the taxpayer used non-taxable combat pay when figuring his/her earned income tax credit, if claimed, then include that amount when figuring the amount for earned income on Schedule 8812.

    4. If the identifier is present and the taxpayer did not use the amount for non-taxable combat pay when figuring EITC, or if EITC was not claimed, then include the amount of non-taxable combat when figuring income on Schedule 8812.

  9. When adjusting an account based on CP 08:

    1. Use BS 05

    2. Use CRN 336 to allow the credit

    3. Use RC 061, SC 1

    4. Use Priority Code 3 to allow interest to be systemically calculated as an IRS initiated adjustment

    5. Do not input the amended claims date

  10. If the filer requests direct deposit, send a Letter 474C with paragraphs C, 3, and d.

American Opportunity Tax Credit (AOTC) Refundable Portion
  1. The American Opportunity Tax Credit (AOTC) is a tax credit of up to $2,500 of the cost of tuition and related expenses paid during the tax year for each student who qualifies for the American opportunity credit. This credit is one of two credits reported on Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), and is the only refundable education credit. Taxpayers will receive a tax credit based on 100 percent of the first $2,000 of tuition and related expenses (including books) paid during the tax year and 25 percent of the next $2,000 of tuition and related expenses paid during the tax year. 40 percent of the credit is refundable.

  2. For claims involving the non-refundable portion of the American Opportunity Tax Credit, see IRM 3.11.6.9.1.3.

  3. If there is a change to the AOTC and an AOTC Recertification indicator is present, route to CIS/AM.

  4. Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), must be attached for the initial claim of the refundable portion of the American Opportunity Credit.

  5. The refundable portion of AOTC begins to phase-out when the modified adjusted gross income (MAGI) is between the following. For the non-refundable phase out limits, see IRM 3.11.6.9.1.3.

    Filing Status 2019 2018 2017 2016
    MFJ (FS 2) $160,000 - $180,000 $160,000 - $180,000 $160,000 - $180,000 $160,000 - $180,000
    All others $80,000 - $90,000 $80,000 - $90,000 $80,000 - $90,000 $80,000 - $90,000

    The credit is phased out by:

    • 5 percent for every $1,000 that exceeds the threshold amount for FS 2.

    • 10 percent for every $1,000 that exceeds the threshold amount for FS 1, 4 or 5.

    Note:

    If the taxpayer does not phase-out AOTC, when required, disallow the exceeded amount. See IRM 3.11.6.11.3.

  6. To adjust the AOTC refundable portion
    • Use CRN 260
    • Use RC 106

  7. See IRM 3.11.6.9.1.3.2, American Opportunity Tax Credit (AOTC) - Non-refundable, for criteria and additional information.

Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains
  1. A regulated investment company (RIC) may elect to keep and pay income tax on certain capital gain income it received during the tax year. The RIC is required to issue a Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, to each of its shareholders for the amount of the undistributed capital gain to be included on the shareholders Schedule D, Form 1040. In addition, the tax paid by the RIC may be claimed by its shareholders as a credit on their respective Form 1040s.

    Note:

    Be aware of frivolous claims (e.g., "Reparation Tax" ) filed on this form. (See Exhibit 3.11.6-5, Frivolous Claims.)

  2. The shareholder should attach Copy B, Form 2439, to the original or amended tax return. Do not reject claim or correspond for a missing Form 2439 if the taxpayer claims ≡ ≡ ≡ ≡ ≡ ≡ ≡ . If the amount claimed on Line 15 (1040-X) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond.

    Note:

    Correspond per IRM 3.11.6.11 use either Form 8009-A, box 7 or a 324C letter with paragraphs A, 3, and 6 using fill-in: Please provide Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, to support your change to Form 1040-X, Amended U.S. Individual Income Tax Return, line 15. A duplicate or photocopy is acceptable.

  3. Loose Forms 2439, Copy A and/or B, may be received. If "NOMINEE" is noted at the top of the form, no adjustment is made to the taxpayer’s account. Associate the form with the return of the taxpayer who appears in the Shareholder's name and address box. (If this is a company entity, route to CIS/AM.)

  4. Action required:

    1. Input TC 290.00 if no other adjustment is required

    2. Use credit reference number (CRN) 766 to allow the credit

    3. Use Reason Code 057

Form 4136, Credit for Federal Tax Paid on Fuels
  1. Form 4136, Credit For Federal Tax Paid on Fuels, must be attached if credit claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Route to CAT-A if the credit claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  3. Route to Frivolous per IRM 3.11.6.4.6 or follow local procedures when the Form 4136 claims for occupations that would not justify the use of vehicles for off road use.

    Example:

    Occupations that normally qualify include: farming, logging, and commercial fishing.

  4. If Form 4136 is ≡ ≡ ≡ ≡ ≡ and not attached, then correspond.

    Note:

    Correspond per IRM 3.11.6.11 using Form 8009-A, box 3 or 4 or a 324C letter using paragraphs A, 3, and 6. Use fill-in: Please complete Form 4136, Credit For Federal Tax Paid on Fuels, to support the changes you have made on Form 1040-X, Amended U.S. Individual Income Tax Return.

  5. If Form 4136 is present or ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , process using RC 061 and the CRNs on Form 4136. Use CRN 362 if the Form 4136 is missing and under tolerance. Include priority code 8 when making an adjustment.

    Note:

    Fuel Tax Credit will post as a CRN 450. Use the CRN from the Form 4136 to adjust the credit. Do not use CRN 450.

Affordable Care Act (ACA) Overview
  1. The Patient Protection and Affordable Care ACT (ACA) created a refundable tax credit beginning in 2014 for health insurance purchased through a Health Insurance Marketplace (also known as Exchange), the Premium Tax Credit (PTC).

  2. For 2018 and prior, the ACA required that certain individuals must have minimum essential health coverage, have a coverage exemption, or make a Shared Responsibility Payment (SRP) on their tax return. This will be the only adjustment performed on MFT 35, the SRP module.

  3. The Tax Cuts and Job Act (TCJA) of 2017 reduced the SRP to $0 for months beginning after December 31, 2018. Therefore, for 2019 and subsequent, the Health Care Coverage checkbox used to indicate full-year health coverage or exemption status has been removed from the Form 1040.

  4. All ACA related actions should be input using the tools provided (xClaim, Credit transfer etc.) if available.

  5. Submission Processing 1040-X will accept ACA related forms and entries as filed. Do not perfect any ACA entry based on IDRS research, associated forms, or entries.

Premium Tax Credit (PTC), Form 8962
  1. The Premium Tax Credit (PTC) is allowed for tax years 2014 and subsequent. Taxpayers use Form 8962, Premium Tax Credit (PTC) to claim the credit.

  2. Taxpayers eligible for PTC may have elected to receive Advance Payments of the Premium Tax Credit (APTC). Taxpayers who receive the benefit of APTC must complete Form 8962 to reconcile the advance payment(s). As a result, Form 8962 may be reported:

    1. On line 6 of Form 1040-X, as a tax liability for excess APTC.

    2. On line 15 of Form 1040-X as a refundable credit for PTC.

  3. Refer to CIS/AM if:

    • Form 8962 is being added, deleted, or changed, unless the entire return is a true duplicate. See IRM 3.11.6.6.5.

    • Form 1040-X Line 6 is being increased/decreased and write-in reflects "APTC Repayment" or similar.

    • PTC/APTC is present on CC TXMOD or CC IMFOL, as shown in paragraph 6 below, and there are changes to adjusted gross income (AGI), filing status, or the taxpayer is changing the size of their tax household. (i.e., adding or deleting an exemption claimed on their return).

    • APTC data is indicated through Coverage Data Repository (CDR) research when adding an exemption.

    • Form 1095-A is submitted with an amount(s) in Part III Column C.

  4. Notate PTCX in the working trail when routing the amended return due to PTC / APTC impact and follow any local procedures.

  5. All amended returns potentially impacting PTC will need to be researched using CC TXMOD or CC IMFOL. A change to PTC may not be clear, such as a change to filing status, income, and/or size of their tax household and Form 8962 is not attached nor addressed.

    Note:

    When adding dependents use AMS to research the Coverage Data Repository (CDR) per IRM 3.11.6.10.1.3.3.

  6. PTC allowed on the original return posts as TC 766 with CRN 262. Posted PTC associated data can be identified by the following data elements:

    Data Element CC TXMOD CC IMFOL
    Advance Premium Tax Credit ADV PTC AMT TOTAL APTC
    Total Premium Tax Credit PTC AMT TOTAL PTC
    Excess APTC Repayment PTC LIAB AMT APTC REPMT
    Excess Advance Payment Above Limitation PTC LIMITATION AMT LIMIT AMT
        APTC TX LIAB
Shared Responsibility Payment
  1. The Tax Cuts and Job Act (TCJA)reduced the Shared Responsibility Payment (SRP) to $0 for months beginning after December 31, 2018.