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3.11.6  Data Processing (DP) Tax Adjustments (Cont. 2)

3.11.6.8 
Specific IMF Adjustments

3.11.6.8.6 
Credits - Non Refundable (Line 7)

3.11.6.8.6.3  (01-01-2017)
Form 2441, Child and Dependent Care Credit (Line 7)

  1. The Child and Dependent Care Credit is claimed on Form 1040X, Line 7B.

  2. Refer to CIS/AM if the taxpayer indicates a “religious or conscience based objection” to obtaining a TIN.

  3. Correspond for Form 2441 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ IRM 3.11.6.9 using either Form 8009-A, box 4 or 5; or a 324C letter, paragraphs A, 3, 6 using fill-in: "Please complete Form 2441 to support the changes requested on Form 1040X"

  4. If Form 2441 is attached, the following items must be completed:

    1. Line 1(a), Provider’s Name must be present.

    2. Line 1(c), Provider’s TIN must be present, unless the provider is an exempt organization, such as, but not limited to the following:
      • 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:

    Correspond for Form 2441 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ IRM 3.11.6.9 using either Form 8009-A, box 4 or 5; or a 324C letter, paragraphs A, 3, 6 using fill-in: Please complete Form 2441 to support the changes requested on Form 1040X.

    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" , that it is "unknown" , "pending" , "applied for" or any notation other than those listed above are not acceptable due diligence statements.

  6. Line 2(a), Qualifying Person can be the taxpayer’s dependent child under age 13, or disabled spouse or dependent unable to care for himself or herself. 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 6 and 19. 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 Credit, Form 2441.

  7. Line 2(b), Qualifying Person(s) TIN 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 3.11.6.2.1. If blank and the filer is claiming an additional exemption who appears to be the same child claimed for this credit, do not correspond.

    Note:

    For taxpayers indicating a religious group (e.g., Amish/Mennonite), "Exempt-Form 4029" , allow the credit without a TIN.

  8. A qualifying person may be 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.

    1. A qualifying person can also be a taxpayer’s disabled spouse who was not physically or mentally able to provide self-care for themselves. The taxpayer must identify the qualifying person and the condition in the explanation of changes or in an attached notation.

    2. A qualifying person can also be any 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 $3,500 or more or filed a joint return.)

    3. A qualifying person can also be 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 a, b and c above, the taxpayer has to self-identify the qualifying condition and if the taxpayer does not meet the age criteria the claim will have to be disallowed per IRM 3.11.6.9.3 using fill-in: We have disallowed your claim on Form 2441, Child and Dependent Care Credit. 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.

  9. 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.

  10. Lines 4 and 5 (Your Earned Income and Spouse’s Earned Income) must be complete in order to claim this credit.

      If And Then
    1 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 20 or 324C paragraphs A, 3, 6 with fill-in: "Please provide your Earned Income amount on Line 4, Part II. This line must be completed."
    2 Filing Status 1, 3, 4, or 5 Line 5 is blank Continue processing
    3 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 20 or 324C paragraphs A, 3, 6 with fill-in: "Please provide your Earned Income amount on Line 4, Part II. This line must be completed."
    4 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 21 or 324C paragraphs A, 3, 6 with fill-in: "Please provide the spouse’s Earned Income amount on Line 5, Part II. 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. See page 3 of the Form 2441 instructions 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 3.11.6.9.3 Fill-in: "We have disallowed your claim for Form 2441, Child and Dependent Care Credit, because both spouses on a joint return must have earned income."

  11. Correspond for Lines 1(c) and 2(b) if missing and cannot be determined from NAMEI, NAMEB, NAMES, NAMEE, etc. See "NOTE" in paragraph (2) above for Line 1(c) on Form 2441.

    Note:

    Before corresponding for the care provider’s name, see IRM 3.11.6.8.6.2(1) and (2). When corresponding for the care provider, follow instructions per IRM 3.11.6.9 and send either Form 8009-A or a 324C letter. For Form 8009-A, use box 18. For a 324C letter use paragraphs A, L, 6.

  12. Update the DUPOL database using CC DDBCK if a TIN is being added, or deleted. (See IRM 3.11.6.7).

    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.

  13. Process using RC 036.

    Note:

    If the taxpayer is reporting Dependent Care Benefits (DCB) on Line 1 of Form 1040X, process using RC 007.

3.11.6.8.6.4  (01-01-2017)
Form 5695, Residential Energy Credits (Line 7)

  1. Form 5695 is used to claim both the Residential Energy Efficient Property Credit and Non-business Energy Property Credit to qualified taxpayers who made energy efficient purchases.

  2. Residential Energy Efficient Property Credit provides taxpayer a credit for adding qualified solar panels, solar water heating equipment, or a fuel cell power plant to their homes in United States. The credit applies to property placed in service after December 31, 2005 and before January 1, 2017.

    Note:

    The taxpayer can claim 30% 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.

  3. Non-business Energy Property Credit 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, 2016.

  4. If the taxpayer is claiming more than the maximum allowed for either credit, see IRM 3.11.6.6.4. Use the following verbiage for the fill-in: "You claimed more than the maximum amount allowed on Form 5695, Residential Energy Credit and/or Residential Energy Efficient Property Credit." Continue to process the return for other issues.

  5. If Form 5695 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ correspond per IRM 3.11.6.9 using either Form 8009-A, box 4 or 5; or a 324C letter, paragraphs A, 3, 6, Use fill-in: "Please complete Form XXXX to support the changes you have made."

  6. Process using RC 036.

3.11.6.8.6.5  (09-01-2016)
Form 8396, Mortgage Interest Credit (Line 7)

  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 is attached, it must be math verified if the claim is more than ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. If the amount claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , route to Cat A.

  4. If Form 8396 is not attached, correspond per IRM 3.11.6.9 using either Form 8009-A, box 4 or 5, or a 324C letter, paragraphs A, 3, 6. Use fill-in: Please complete Form 8396 to support the changes you have made.

    Note:

    Do not correspond if the form is missing and the amount claimed≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    .

  5. If Form 8396 is attached and the amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , process using RC 036.

3.11.6.8.6.6  (01-01-2017)
Form 8863, Education Credit (Line 7)

  1. Form 8863, Education Credit is for qualified education expenses paid to an eligible post secondary educational institution. This credit is composed of two separate credits: The American Opportunity Credit and The Lifetime Learning Credit.

    Note:

    A non refundable amount of up to $1,500 may be available for the American Opportunity Credit. See IRM 3.11.6.8.6.7 paragraph 5 for adjustment instructions.

  2. PATH Act criteria may apply to this credit, see IRM 3.11.6.8.6.1.

  3. The maximum amount for each credit:

    1. Lifetime credit is $2,000 non refundable credit amount.

    2. Combined credit for the American Opportunity Credit is $2,500.

      Note:

      Typically this will be a maximum of $1,500 non refundable and $1,000 refundable. If the non refundable credit exceeds $1,500 per student, there should not be a refundable credit on line 14.

      Reminder:

      If the box on Part I, line 7 is checked the taxpayer does not qualify for the refundable portion.

  4. Refer to CIS/AM if the taxpayer Indicates a religious group (e.g., Amish/Mennonite) or conscience based objection to obtaining a TIN.

  5. Taxpayer claims Education Credit and the modified adjusted gross income (MAGI) is over:

    • TY 2016 -- $65,000 ($131,000 for married filing jointly)

    • TY 2015 -- $65,000 (130,000 for married filing jointly)

    • TY 2014 -- $64,000 ($128,000 for married filing jointly)

    • TY 2013 -- $63,000 ($127,000 for married filing jointly)

    • TY 2012 -- $62,000 ($124,000 for married filing jointly)

      Note:

      These are the elimination amounts for the Lifetime learning credit only. The credit is completely eliminated when these amounts are reached or exceeded. See table below for letter instructions:

    Form 8863 is the only issue:
    Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim the credit because your Modified Adjusted Gross Income (MAGI) is $XX.00 or more for 20XX (use appropriate amount for the tax period concerned)."
  6. Claims Education Credit and the modified adjusted gross income (MAGI) is between these numbers.

    • 2016 $55,000-$65,000 ($111,000-$131,000 married filing jointly)

    • 2015 $55,000-$65,000 ($110,000-$130,000 married filing jointly)

    • 2014 $54,000-$64,000 ($108,000-$128,000 married filing jointly)

    • 2013 $53,000-$63,000 ($107,000-$127,000 married filing jointly)

    • 2012 $52,000-$62,000($104,000-$124,000 married filing jointly)

    Note:

    These are the phase out amounts for the Hope and Lifetime learning credit only. The credit phases out 5% for every $1,000 that exceeds the threshold amount for married filing jointly and 10% for every $1,000 that exceeds the threshold amount for single, head of household and qualifying widower. See table below for letter instructions:

    The credit is being phased out but not eliminated
    Send a 105C/106C letter disallowing the exceeded amount. Use the following for the fill-in: "We disallowed part of your credit on Form 8863, Education Credit because the credit begins to be reduced when your modified adjusted gross income exceeds $ (use appropriate amount for filing status and tax year). "
  7. Research CC TRDBV/RTVUE/DDBCK/DUPED to determine if the student claimed on Form 8863 was claimed as an exemption on Form 1040X. Student(s) must be either the primary or secondary taxpayer or claimed as a dependent of the taxpayer. If the student was claimed as an exemption, continue processing the claim; otherwise see the table below.

  8. Use the following table to determine if the education credit claim must be disallowed:

    If Then
    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 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You can claim this credit only if the person listed as a student was claimed as an exemption for (1) Yourself, (2) Your Spouse, (3) a dependent that was claimed on your tax return."
    The taxpayer was a nonresident alien for any part of the tax year, did not elect to be treated as a resident alien for tax purposes and Form 8863 is the only issue. If there are other issues, route as International, see Exhibit 3.11.6-5.
    or
    The secondary taxpayer was a nonresident alien for any part of the tax year and did not elect to be treated as a resident alien for tax purposes.
    Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim the credit if you (or your spouse) were nonresident aliens for all or part of the tax year."
    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 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim both the American Opportunity Credit and the Lifetime Credits for the same student for the same tax year. "
    The taxpayer is filing as FS 3 (married filing separate). Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim this credit if you are married filing separate."
    The student indicates that they are claimed on another return. Send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3(1). Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim this credit if you are claimed as a dependent on your parent's or another person's return. "
    American Opportunity Credit  
    If Then
    The student, for which the Hope or American Opportunity Credit is claimed, indicates the credit has been claimed for any 4 prior tax years. Send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Fill-in: "We disallowed your claim for Form 8863, Education Credit because you may only claim the Hope Scholarship Credit or American Opportunity Credit for 4 tax 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 in the tax period for which the credit is claimed) at an eligible education institution. Send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Fill-in: "We disallowed your claim for Form 8863, Education Credit 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 completed the first 4 years of post-secondary education before the tax period in which the credit is claimed. Send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Fill-in: "We disallowed your claim for Form 8863, Education Credit because the student listed has already completed the first 4 years of post-secondary education prior to 20XX."
    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 is claimed. Send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Fill-in: "We disallowed your claim for Form 8863, Education Credit because the student listed has been convicted of a felony for possession or distribution of a controlled substance."
  9. 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 3.11.6.9 using either Form 8009-A, box 4 or 6; or a 324C letter, paragraphs A, 3, 6. Use fill-in: "Please complete Form 8863 to support the changes you have made."

    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.

    Note:

    For tax year 2012 and onward the student's name and TIN will be listed on page 2, Part III of Form 8863.

  10. If Form 1098-T is being used as support for the Tuition and Fees deductions on Line 1 of Form 1040X, correspond for Form 8917.

  11. Since the AOTC is based on qualified education expenses paid to an eligible post secondary educational institution, when the age of the student is such that the credit becomes questionable or there are other circumstances that are questionable and the Form 1098-T is not present on IRPTR, no consider the claim and request a copy of the Form 1098-T, Tuition Statement. Use the 916C letter paragraphs B, F, Q, R, 0, 3 or Form 8009-A and use the following paragraph. "We did not receive a Form 1098-T, Tuition Statement from your education institution for the student to support your claim on Form 8863. This form is used to verify enrollment and qualified educational expenses. Please contact the educational institution and ask them to issue Form 1098-T to the IRS to verify the enrollment status and qualified expense information."

    Note:

    It is not required to research IRPTR on all claims, the return should be questionable prior to research.

  12. If the taxpayer claims both the Education Credit and the Tuition and Fees Deduction and the previously filed Form 8917 indicates that the credits were for the same student, disallow the education credit. Send a 105C/106C with the following fill-in: "We disallowed your claim on Form 8863, Education Credits. You may not claim both the deduction for Form 8917, Tuition and Fees Deduction and Form 8863, Education Credits for the same student."

  13. If the taxpayer claims more than the maximum credit allowed (see 2, 3 and 4 above) calculate and input the correct credit. Refer to IRM 3.11.6.6.4, the section provides all instructions including letters and paragraphs.

  14. For TY 2012 and onward, for the Lifetime Learning Credit if the taxpayer does not complete lines 20 thru 22 in Part III of Form 8863, or if the taxpayer does not complete line 20 thru 26 in Part III of Form 8863 return the claim to the taxpayer using Form 8009-A box 6 or a 324C letter, paragraphs A, 3, 6 with fill-in: Please complete line(s) XX on Form 8863.

  15. Form 8863 must be attached for the initial claim for each dependent If form is present, process using RC 035, If missing correspond per IRM 3.11.6.9 using either Form 8009-A, box 4 or 5, or a 324C letter, paragraphs A, 3, 6. Use fill-in: "Please complete Form 8863 to support the changes you have made."

    Note:

    Update the DUPOL database to add or delete a Form 8863, Education Credit 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.

3.11.6.8.6.7  (10-07-2016)
American Opportunity Tax Credit

  1. The American Opportunity Tax Credit is a tax credit of up to $2,500 per student for the cost of tuition and related expenses paid during the tax year. This credit is one of the credits reported on Form 8863, Education Credits (American Opportunity, Hope and Lifetime Learning Credits).

    Note:

    Form 8863 must be attached for all initial claims.

  2. PATH Act criteria may apply to this credit, see IRM 3.11.6.8.6.1.

  3. Since the AOTC is based on qualified education expenses paid to an eligible post secondary educational institution, when the age of the student is such that the credit becomes questionable or there are other circumstances that are questionable and the Form 1098-T is not present on IRPTR, no consider the claim and request a copy of the Form 1098-T, Tuition Statement. Use the 916C letter paragraphs B, F, Q, R, 0, 3 or use the Form 8009-A and insert the following paragraph. "We did not receive a Form 1098-T, Tuition Statement from your education institution for the student to support your claim on Form 8863. This form is used to verify enrollment and qualified educational expenses. Please contact the educational institution and ask them to issue Form 1098-T to the IRS to verify the enrollment status and qualified expense information."

  4. The amount of the credit is gradually reduced (phased out) if the taxpayer’s modified adjusted gross income (MAGI) is between $80,000 and $90,000 ($160,000 and $180,000 if married filing jointly). The credit cannot be claimed if the MAGI is $90,000 or more ($180,000 or more if married filing jointly).

    Note:

    The phase out is 5% per $1,000 over the threshold amount for married filing jointly and 10% per $1,000 over the threshold amount if single, head of household or qualifying widower. See phase out letters below:

  5. If the MAGI is $90,000 or more ($180,000 or more for married filing jointly) send a 105C/106C letter disallowing the claim and input the adjustment per IRM 3.11.6.9.3. Use the following for the fill-in: "We disallowed your claim on Form 8863, Education Credit. You cannot claim the credit because your modified adjusted gross income is $90,000 or more ($180,000 or more if married filing jointly)."

  6. To adjust the tax account:

    1. Adjust the non refundable portion of the credit with a TC 29X. Do not use a credit reference number for the non refundable portion of the credit. Use RC 035.

    2. Use credit reference number 260 to change the refundable portion of the credit.

      Reminder:

      The credit reference number will convert to a TC 766/767 Reference 260 at Master File.

    3. Use RC 106 (Refundable American Opportunity Credit) and the appropriate SC and blocking series for the refundable credit portion of the adjustment.

3.11.6.8.6.8  (01-01-2017)
Form 8880, Credit for Qualified Retirement Savings Contributions (Line 7)

  1. The credit for Qualified Retirement Savings Contributions is a non refundable income tax credit for taxpayers whose AGI is equal to or less than:

    Tax Year AGI limitation
    2016 Single/MFS: $30,750 HOH: $46,125 MFJ: 61,500
    2015 Single/MFS: $30,500 HOH: $45,750 MFJ: $61,000
    2014 Single/MFS: $30,000 HOH: $45,000 MFJ: $60,000
    2013 Single/MFS: $29,500 HOH: $44,250 MFJ: $59,000
    2012 Single/MFS: $28,750 HOH: $43,125 MFJ: $57,500
  2. 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.

  3. 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.

  4. Qualified retirement savings contributions are the sum of participant contributions and elective deferrals made to qualified plans, traditional IRAs and Roth IRAs.

  5. If present, math verify the taxpayer's figure. Continue processing using RC 036 If missing and the amount claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond using either Form 8009-A, box 4 or 5 or a 324C letter, paragraphs A, 3, 6. Use fill-in: "Please complete Form 8880 to support the changes you have made."

  6. If claim is being disallowed for any reason, see IRM 3.11.6.6.4.

3.11.6.8.6.9  (01-01-2017)
Schedule R and Schedule 3, Credit for the Elderly or the Disabled (Line 7)

  1. 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 (Form 1040) or Schedule 3 (Form 1040A) must be submitted ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and 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 the Schedule R and did not check the box in #2 of Part II.

    Note:

    Correspond ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ per IRM 3.11.6.9 using either Form 8009-A, box 4 or 5; or a 324C letter, paragraphs A, 3, 6. Use fill-in: "Please complete Form XXXX to support the changes you have made."

    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 being disallowed for any reason, set a math error per IRM 3.11.6.6.4.

3.11.6.8.6.10  (08-02-2016)
Form 3800, General Business Credits (Line 7)

  1. Form 3800 is used to report 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 not present, correspond following instructions in IRM 3.11.6.9 requesting the specific form ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Use Form 8009-A, box 4 or a 324C letter, paragraphs A, 3, 6. Use fill-in: "Please complete Form XXXX to support the changes you have made." to request the correct form(s).

  3. If the taxpayer claims ≡ ≡ ≡ ≡ ≡ ≡ on Forms 6765 or 8586, route to CIS/AM.

  4. Use CRN 884 when adjust Form 8864 Biodiesel and Renewable Diesel Fuels credit or 6478, Alcohol and Cellulosic Biofuel Credit and CRN 883 when adjusting Form 8907, Non-conventional Source Fuel Credit.

  5. If Form 5884-B either attached to the Form 3800 or loose should be routed 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, Schedule E, Schedule F or "Other Income" claimed on Form 1040, line 21. If Form 8826 or Form 3800 claim this credit and the supporting forms are present, follow Cat A procedures if the claim exceeds ≡ ≡ ≡ ≡ . If the supporting forms are not present, disallow see IRM 3.11.6.9.3 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 credit claimed in part III of the Form 3800, process using reason code 036 if not routeable per IRM 3.11.6.11.

3.11.6.8.6.10.1  (09-26-2016)
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 3.11.6.8.6.10.

  3. The maximum amount of the credit for a qualified plug-in electric drive vehicle can be found at https://www.irs.gov/Businesses/Qualified-Vehicles-Acquired-after-12-31-2009. Use RC 036 when adjusting the credit.

    Reminder:

    The calculated amount cannot exceed the maximum amount for any qualified vehicle.

  4. The following requirements must be met to qualify for the credit:

    1. Taxpayer is the owner of the vehicle.

    2. Taxpayer placed the vehicle in service during the tax year for which the credit is claimed.

    3. The vehicle is manufactured primarily for use on public streets, roads and highways.

    4. The original use of vehicle began with the taxpayer claiming the credit.

    5. The vehicle was acquired by the taxpayer for use or to lease to others and not for resale.

    6. The vehicle is used primarily in the United States.

  5. The taxpayer must submit Form 8936 to claim the credit. If Form 8936 is missing, correspond using either Form 8009-A boxes 4 or 5.

  6. The taxpayer is required to enter the Vehicle Identification Number (VIN) on line 2 of Form 8936. The VIN of a vehicle can be obtained from the registration, title, proof of insurance or actual vehicle. Generally the VIN is 17 characters made up of numbers and letters.

    Caution:

    You are required to verify the VIN number, on the title or car purchase agreement, matches the VIN number on Form 8936. If it does not match or is missing correspond using Form 8009-A paragraph 8 or a 324C Letter paragraphs A, 3, 6. Use the verbiage: “Please provide the correct or missing Vehicle Identification Number (VIN) on your Form 8936. The number provided on the title or car purchase agreement either does not match or was missing from your Form 8936.

  7. Notice 2009–89 allows manufacturers to certify to the IRS that a particular vehicle meets the requirements of Section 30D of the Internal Revenue Code. Taxpayers purchasing such vehicles can rely on the domestic manufacturer's certification that indicates a particular make, model, and model year of a vehicle qualifies as a plug-in electric motor vehicle under §30, and that specifies the amount of the credit allowable with respect to the vehicle.

  8. To document the claim the taxpayer must attach the Manufacturer’s Certification described above accompanied by either the car title or the car purchase agreement. If missing correspond using Form 8009-A paragraph 8 or 324C letter paragraphs A, 3, 6. Use the verbiage: "To be allowed the Qualified Plug-In Electric Drive Motor Vehicle Credit you must provide documentation that qualifies you for this credit. Please provide a copy of the valid sales contract and the manufacturer’s certification, or the domestic distributor’s certification if a foreign manufacturer, for each vehicle claimed on the Form 8936."

3.11.6.8.7  (01-01-2016)
Other Taxes (Line 10)

  1. Taxpayers use Line 10 to report additional taxes owed.

    Note:

    Uncollected Taxes (UT) from line 60 of Form 1040 may be reported on line 10 or 11 of Form 1040X. Use RC 049 when UT is changing.

  2. Refer to CIS/AM if the taxpayer is amending any of the following:

    1. Form 4137, Social Security and Medicare Tax on Unreported Tip Income.

    2. Form 5329, Additional Taxes on Qualified Plans (Including IRA's) and Other Tax Favored Accounts -- with Parts III - VIII completed.

    3. Form 8919, Uncollected Social Security and Medicare Tax on Wages.

    4. Form 8959, Additional Medicare Tax.

    5. Form 8960, Net Investment Income Tax.

    6. Schedule H, Household Employment Taxes.

    Note:

    If there is an unexplained entry on line 10, and the type of income or reason for the change cannot be determined through attachments or IDRS research, refer to your manager or lead.

3.11.6.8.7.1  (01-01-2017)
Additional Tax on Early Distribution-Form 5329/ Form 1099-R (Line 10)

  1. Taxpayers use Form 5329 or Form 1099-R to report the amount and the penalty for early withdrawal/distribution or an excess contribution of their IRA. Taxpayers may explain they are claiming this amount in lieu of submitting Form 5329 or Form 1099-R

    Note:

    If taxpayer sends in both Form 5329 and 1099-R, follow the 1099-R instructions.

  2. When a taxpayer submits an amended Form 5329, only process claims that have Part I or Part II of Form 5329 completed. Refer to CIS/AM any Form 5329 with entries in Parts III through IX. Use the following Reason Codes when processing:

    1. RC 016 for the IRA distribution

    2. For Distribution Code 1, RC 048 for the 10% penalty unless exception code 1-11 is provided.

  3. If the taxpayer used Form 1099-R instead of Form 5329 to report the amount, process only those claims that have a Distribution Code of "1" or "7" . Refer as CIS/AM any Form 1099-R with a Distribution Code other than a 1 or 7.

    Exception:

    If the taxpayer is claiming ONLY withholding from a 1099-R that has a distribution code other than a 1 or a 7, continue processing the return. Use reason code 051.

    1. For Distribution Code 1, the taxpayer should report the taxable portion of the distribution (box 2a of Form 1099-R) on Line 1 of Form 1040X. The taxpayer is also generally subject to a 10% penalty for early withdrawal which is reported on Line 10 of Form 1040X as "Other Taxes."

    2. If the Distribution Code is "1" and the taxpayer states they are not subject to the 10% penalty, Form 5329 must be attached correspond if missing IRM 3.11.6.10 row 24a. Form 5329 must have an Exception Code 1 through 11, listed on Line 2. The full distribution amount should be listed on Line 1 and the excluded amount should be listed on Line 2; otherwise refer CIS/AM.

    3. If the Distribution Code is "1" and the taxpayer did not include the 10% penalty and no Form 5329 is attached, refer to CIS/AM.

    4. For Distribution Code 7, the taxpayer is not subject to any penalty. This distribution is a "Normal Distribution" from Education Accounts.

      Note:

      If the taxpayer does not provide a Form 1099-R, research IDRS using CC IRPTR to determine the distribution code. If unable to determine the distribution code through IDRS research, refer as CIS/AM. Prior year data will be available; however current year data will not be available until mid-year.

  4. The 10% penalty will be waived for reservists called to active duty.

    1. Taxpayers have been instructed to write "Active Duty Reservist" in the top margin of the Form 1040X if the 10% tax was already paid on a distribution. Eligible reservists may file Form 1040X Amended U.S. Individual Income Tax Return, to claim a refund. The words "Active Duty" should be written on the top of the form. Part II, Explanation of Changes should include:

    • The date they were called to active duty.

    • The amount of the retirement distribution.

    • The amount of early distribution tax paid.

  5. If the taxpayer does not provide the early retirement distribution amount or tax paid and the distribution cannot be verified through IRPTR or the active duty date is not provided, correspond using Form 8009-A box 8 or 324C Paragraphs: A, 3, 6. Use fill-in: "Please provide the date you were called to active duty, the amount of the retirement distribution, and the amount of early distribution tax paid."

  6. Process claim using reason code 048.

3.11.6.8.7.2  (08-02-2016)
Self-Employment (SE) Tax (Line 10)

  1. SE tax is figured using Schedule SE and is reported on Line 10 of Form 1040X.

  2. Taxpayers must pay SE tax if they had net-earnings ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ from a non-exempt trade or business.

    Note:

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

  3. Native American Tribal income is not subject to SE Tax.

  4. SE income is reported on Schedules C, C-EZ, E, F or as Other Income on Form 1040, Line 21 (e.g., Form 1099-MISC) If the taxpayer is a statutory employee (indicated on Form W-2, box 13), use Schedule C or C-EZ, line 1, as earned income. This income is not subject to SE tax.

  5. New lines have been added to Schedule C, C-EZ, E, and F to report merchant card payments and third party network payments from Form 1099-K instead of Form 1099-MISC. Self-Employed taxpayers will be responsible for reporting this income on the respective schedules.

  6. Take the following action based on the chart below:

    If And Then
    a) The taxpayer is adding income ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ that is subject to self-employment tax, but the taxpayer is not addressing/assessing the self-employment tax. SE Tax not reported Refer to Cat A
    • Indicate "Questionable SE income" on Cat A cover sheet
    b) If the taxpayer is excluding or reducing SE Tax and Form 4361 is attached, or mentioned, or minister is indicated, research ENMOD.

    Note:

    Adjust the account if the taxpayer is paying the full SE Tax amount even if minister (or similar) is mentioned or Form 4361 is attached.

    MIN-SE present. Refer to CIS/AM
    MIN-SE is not present Mail to IRS - BLN: 4-G08.151 Minister Waiver Unit 2970 Market St. Phila PA 19104
    Input a TC 971 AC 016 for an audit trail.
    c) There is an indication of partnership (i.e., Schedule E). SE Tax is based off this income Refer to CIS/AM
    d) The Optional Method in Section II of Schedule SE was used to calculate SE tax.   Refer to CIS/AM
    On a joint return both taxpayers have self-employment income. Taxpayers combined their SE Tax onto one Schedule SE Correspond using Form 8009-A box 12 or a 324C letter, paragraphs A, 3, 7, with fill-in: "Taxpayers filing jointly must file separate Schedules SE if they both have self-employment income. If only one spouse has self-employment income list only that spouse's name on the Schedule SE. Otherwise file two separate Schedules SE."
    On a joint return You are unable to determine which taxpayer's account to adjust Correspond for the correct TIN to adjust the SE Tax per IRM 3.11.6.9 For Form 8009-A, use box 12 For a 324C letter, use paragraphs A, 3, 7. with the fill-in: "We cannot determine which taxpayer is filing Schedule SE. Please enter the name and social security number (SSN) or IRS Individual Taxpayer Identification Number (ITIN) of the taxpayer who is required to pay this tax. Please complete Schedule SE as appropriate. If both husband and wife are required to pay this tax, each must file a separate Schedule SE."

    Note:

    If the correspondence is undelivered or no-reply, then assign the full SE to the primary taxpayer. If assigning the full SE to the primary exceeds the maximum SE tax, IRM 3.11.6.8.7.2.2 then assign the full SE to the secondary taxpayer.

3.11.6.8.7.2.1  (01-01-2016)
Adjusting SE Tax

  1. In addition to SE tax, Line 10 is used to report various "other taxes" (e.g., changes to Form 5329). Do not include these amounts when adjusting SE tax. To verify Line 10 is only composed of SE tax, compare the posted total of SE tax "SET>" on CC TXMOD/IMFOL to Line 10 of the Original Amount Column, if column is present on Form 1040X

  2. Compute the difference between the posted SE tax on CC TXMOD (SET>) to the amended Schedule SE. On Schedule SE this is:

    • Line 5 (short Schedule SE)

    • Line 12 (long Schedule SE)

      Note:

      Do not decrease any posted amounts to less than zero.

  3. When the taxpayer adjusts SE tax on Line 10 they should have included as a deduction to Line 1 (AGI) an amount equal the deductible part of the SE tax change from Line 10, column B. Verify the taxpayer included this amount by comparing the correlating lines from Form 1040 on CC RTVUE. If not considered, recompute the tax using the deductible part of SE tax included into Line 1.

  4. Use Reference Number (RN) 889 only for changes only to SE Tax. Use RC 044 for Self Employment Tax, RC 030 for the deductible part of Self Employment Tax (adjustment to income) and the specific RC for the type of income reported.

3.11.6.8.7.2.2  (01-01-2017)
SE Social Security

  1. The self-employment tax rate is 15.3% and consists of two parts: 12.4% for social security (old-age survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).

    Exception:

    Social security tax for TY 2012 is 10.4%.

  2. Only a portion of the taxpayer's SE income is subject to the social security part of SE tax. See the table below for the maximum amounts for the tax year. The adjustments for the IRN 878 or IRN 879 cannot exceed this amount.

    If Tax Year is: Maximum amount subject to SE Social Security
    2015/2016 $118,500
    2014 $117,000
    2013 $113,700
    2012 $110,100
    2011 $106,800
  3. For each taxpayer whose SE Social Security is changing, compute the difference between the original posted total on CC TXMOD to the amended Schedule SE. On the Schedule SE, this is:

    • Line 4 (short Schedule SE)

    • Smaller of line 6 or line 9 (long Schedule SE)

  4. When adjusting SE social security, use:

    1. IRN 878 to identify the primary taxpayer (PRIM-SE-INCM)

    2. IRN 879 to identify the secondary taxpayer (SECND-SE-INCM)

3.11.6.8.7.2.3  (01-01-2016)
SE Medicare

  1. All of the taxpayer's SE income is subject to the 2.9% Medicare portion of SE tax, even if the entire SE Social Security portion has been met.

  2. For each taxpayer whose SE Medicare is changing, compute the difference between the original posted total on CC TXMOD to the amended Schedule SE. On the Schedule SE, this is:

    • Line 4 (short Schedule SE)

    • Line 6 (long Schedule SE)

  3. When adjusting SE Medicare, use:

    1. RN 895 to identify the primary taxpayer (PRIM-MEDICARE-INC).

    2. RN 896 to identify the secondary taxpayer (SECND-MEDICARE-INC).

3.11.6.8.8  (01-01-2017)
Total Tax (Line 11)

  1. Line 11 is used to indicate the taxpayer's total tax liability. Unless otherwise indicated, any reference to total tax is referring to Line 11, Form 1040X. Total tax liability is the sum of:

    • Tax before credits (based on taxable income).

    • Minus any non refundable credits from Line 7.

    • Plus any additional "other taxes" from Line 10.

      Note:

      The amount of Total Tax based on the original filed return is represented by a Tc 150 on CC TXMOD or CC IMFOL.

  2. If the amount on Line 11, is from Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, move the amount to Line 15.

  3. Math Verification is required on a total tax change of $3,500 or more, see IRM 3.11.6.6.3 if there is a discrepancy between IRS and taxpayer's figures, or there is a math error.

  4. Do not include SRP changes in the TC 29X amount.

  5. All processable claims require either a TC 290 or TC 291:

    Transaction Code Tax Adjustment
    Use TC 290
    Increase in line 11

    No change on line 11 (zero tax change)
    Use TC 291
    Decrease on line 11

    Note:

    Never adjust Line 11 below zero, regardless of what the taxpayer has indicated. If the adjustment cannot be input because you cannot reduce an item below zero then adjust the account following IRM 3.11.6.6.4.

3.11.6.8.9  (05-03-2016)
Federal Income Tax Withholding (Line 12)

  1. Taxpayers use Line 12 to report their Federal income tax withheld (TC 806/807) and/or any excess Social Security/Railroad Retirement Tax Act (RRTA) Tier 1 (TC 766).

  2. If the amount on Line 12 is from Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, move the amount to Line 15.

  3. If Form W-2 or Form 1099 series is missing and the change to the withholding credit is ≡ ≡ ≡ ≡ ≡ ≡ or more and you are unable to verify the credit on IRPTR, correspond per IRM 3.11.6.9 using either Form 8009-A, box 16, or a 324C letter paragraphs A, 3, 6 with fill-in: "We need Forms W-2 or 1099 for the change in withholding you claimed. We’ll accept a duplicate from your employer or a photocopy."

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

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

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "

      Caution:

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

  5. If withholding is being claimed per Schedule K-1, route to CIS/AM.

    Exception:

    If the amount can be verified on CC IRPTR continue processing.

  6. When adjusting Line 12, use RC 051 for changes to withholding and RC 055 for Excess Social Security and Tier RRTA:

    1. CRN 806 for increases to withholding.

    2. CRN 807 for decreases to withholding.

    3. CRN 252 for increases/decreases to Excess Social Security.

    Note:

    Use Priority Code 8 when there is a TC 17X posted on the account to prevent unpostables.

    Note:

    Never adjust Line 12 below zero.

3.11.6.8.9.1  (01-01-2017)
Excess Social Security and Railroad Retirement Tax Act (RRTA)

  1. To process an excess social security/RRTA claim the individual taxpayer must report wages from more than one employer (see following chart for the wage base limit for the year).

  2. Social Security/RRTA wages and tax withheld must exceed the maximum amount required for the tax year:

    Year Maximum SS (see note) and RRTA Tier 1 (Wages) Maximum SS and RRTA Tier 1 (Tax Limit – 6.2%)
    2015/2016 $118,500 $7,347.00
    2014 $117,000 $7,254.00
    2013 $113,700 $7,049.40
    2012 $110,100 4,624.20
    2011 $106,800 $4,485.60 (See Note)

    Note:

    Social Security Wages are found in Box 3 of the W-2 Form.

    Note:

    The employee's portion of the social security tax for TY 2012 is 4.2%.

  3. Use the following when the taxpayer does not meet the necessary qualifications to claim excess social security/RRTA Tier 1:

    If Then
    The excess social security was withheld by only one employer, Return the claim to the taxpayer and send a 404C letter with paragraphs A, C, D, E, M (8374), P, and S.

    Exception:

    If additional issues are present do not return the claim to the taxpayer. Continue to process for the remaining issues.

    The taxpayer is MFJ and used earnings / social security from both the primary and secondary taxpayers to calculate excess social security, Return the claim to the taxpayer and send a 404C letter paragraphs A, C, F, M (8374).

    Exception:

    If additional issues are present do not return the claim to the taxpayer. Continue to process for the remaining issues.

    The taxpayer’s wages do not exceed the wage base limit for the tax year, Send a 105/106C letter disallowing the claim per IRM 3.11.6.9. Fill-in: "We disallowed your claim for excess social security withheld. Your wages do not exceed $XXX,XXX. for tax year XXXX. In order to claim excess social security, you must have reported wages from more than one employer, your total wages must exceed the wage base limit and the social security tax withheld must exceed the maximum amount required for the tax year."
    The taxpayer’s social security withheld does not exceed the maximum amount required for the tax year. Send a 105/106C letter disallowing the claim per IRM 3.11.6.9. Fill-in: "We have disallowed your claim for excess social security withheld. Your social security withheld does not exceed $XXXX for tax year XXXX. In order to claim excess social security, you must have reported wages from more than one employer and the social security tax withheld must exceed the maximum amount required for the tax year."
  4. Use CRN 252 for an increase or decrease to excess social security/RRTA Tier 1 use RC 055.

    Note:

    If an error message is displayed, input N in the override field.

3.11.6.8.10  (01-01-2016)
Estimated Tax Payments (Line 13)

  1. Estimated tax payments are payments made by the taxpayer. They are normally recorded as TC 430, TC 660, TC 670, TC 710 or TC 716 payments.

  2. If the total posted to the module matches the amount claimed on Line 13, "Correct Amount Column" and this is the only issue, adjust the account with TC 290 .00, RC 061, and SC 1.

  3. If the total estimated tax payments do not match the amount claimed and other issues are present, route to CIS/AM regardless of the other issues on the claim. The payment may have been misapplied and the adjustment and estimated payment discrepancy need to be resolved at the same time.

    Note:

    If the taxpayer submits a payment with their amended return, (TC 670) then line 13 may not match. These should not be referred to CIS/AM.

3.11.6.8.10.1  (01-01-2017)
Estimated Tax Penalty

  1. Estimated (ES) tax penalty is assessed based on the original filed return. In order to reduce the ES tax penalty, the taxpayer must file either a:

    • superseding return or

    • Form 2210 with at least one of the boxes in Part II checked.

    Note:

    An amended return filed on or before the due date or extended due date (TC 460) is considered a superseding return. Use the postmark to determine timeliness of the claim, see IRM 3.11.6.2.3.

    Note:

    Form 2210 does not need to be attached if the taxpayer is submitting a superseding return.

  2. If the taxpayer is requesting a change to the penalty due to a filing status, change to FS 2 refer to CIS/AM.

  3. If the return is being routing to EXAM or Cat A:

    • Do not adjust the penalty.

    • Do not correspond for a missing Form 2210.

    • Do not send a 369C letter.

  4. If the taxpayer is requesting a change to the ES tax penalty, send a 369C letter if:

    • The taxpayer did not submit a superseding return or

    • Form 2210 is not attached.

    Exception:

    Do not send a 369C letter if the amended penalty amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or the claim is being routed.

    Note:

    When sending a 369C letter, input the adjustment and letter. Use paragraphs A, G, O, U, 4, use call back number 1-800-829-1040. Fill-in, "We did not receive your Form 2210. If you used the annualized income installment method, please complete Form 2210 and check box C in Part II. Also complete Schedule AI of Form 2210. You can get any of the forms or publications mentioned in this letter by calling 1-800-TAX-FORM (1-800-829-3676) or visiting our website at www.irs.gov/formspubs."

    Note:

    If a TC 170/176 is posted and you are unable to determine if the ES penalty is changing, continue processing the return and do not send a 369C letter.

  5. Reducing or removing the ES penalty is not allowed if:

    • The taxpayer is not submitting a superseding return and

    • Form 2210 is attached and none of the boxes in Part II are checked.

    If the reduction/removal of the ES penalty is not allowed follow the steps below:

    If Then
    The ES penalty is the only issue.
    1. Input a TC 290 for .00 with blocking series 99, RC 065 and HC 3. Attach an IMFOLR screen print.

    2. Send an 854C letter. Use paragraphs A, R, W, 0.

      Note:

      If the original return was paper filed use blocking series 98, do not attach an IMFOLR screen print.

    There are other tax issues. Two adjustments are required.
    1. The first adjustment should be the tax issue and include Hold Code 4.

    2. For the second adjustment

      • Input a TC 290 for .00 with blocking series 99, RC 065, HC 3 and Posting Delay Code 1. Attach an CC IMFOLR screen print.

      • Send an 854C letter using paragraphs A, P, R, W, 0. For paragraph P use fill-in: "We adjusted your [issue(s) (list issues) as requested."

    Note:

    If the original return was paper filed use blocking series 98, do not attach an IMFOLR screen print.

    Note:

    See link to Penalty Appeals Coordinator Penalty Appeals Coordinator

    .

  6. Verify the estimated tax penalty using the AMS worksheets when Form 2210 is attached and at least one of the boxes in Part II is checked. If the difference between the AMS penalty amount and the taxpayer’s amount is:

    1. $100 or more– adjust the account using the recomputed amount. See IRM 3.11.6.6.4.

    2. Less than $100 – adjust the account using the taxpayer’s amount.

    3. If unable to math verify, correspond per 3.11.6.6.4.

  7. To adjust the ES Penalty, RC 065 must be used. Also use:

    • TC 170 to increase the penalty.

    • TC 171 to decrease the penalty.

      Note:

      To prevent an unpostable condition, use Priority Code 8 when there is a posted TC 17X and you are making an adjustment to withholding (RN 806/807).

  8. When the estimated tax penalty is being reduced or removed a Penalty Reason Code (PRC) is required in the fourth reason code position of the ADJ54 screen. See Penalty Reason Code chart below for determining the correct PRC.

    If And Then use
    A TC 170 is posted on the account. The taxpayer is filing a superseding return. PRC 010
    The taxpayer is providing a corrected computation PRC 016
    A TC 176 is posted on the account.
    • The taxpayer is filing a superseding return or

    • The taxpayer is providing their own penalty computation on Form 2210.

    PRC 013
    A TC 170 or 176 is posted on the account.
    • Penalty is being abated based on a waiver in Part II of Form 2210 or

    • The penalty was assessed based on reliance of erroneous written IRS advice.

    PRC 044
    Correcting an IRS computational error. PRC 045

3.11.6.8.11  (01-01-2017)
Earned Income Credit (EIC) Adjustments (Line 14)

  1. The following items are necessary for EIC to be claimed on an amended return:

    • Schedule EIC is required to be attached if a qualifying child (not claimed as a qualifying child for EIC originally) is being claimed for EIC.

    • Schedule EIC must contain the qualifying children's SSN information.

    • The type of income must be identified.

  2. Route to CIS/AM if:

    • EITC Recertification indicator is present on IDRS and there is a change to EIC.

    • Form 8862, Information to Claim Earned Income Credit After Disallowance, is attached.

    • Math Error Code 653 is posted on IDRS.

3.11.6.8.11.1  (01-01-2017)
EIC Eligibility Criteria

  1. Taxpayer (and spouse if filing a joint return) must have a valid Social Security Number (SSN) issued by the Social Security Administration (SSA) to claim the EIC . 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).

    Note:

    If taxpayer's spouse has an ITIN and taxpayer had originally received the earned income credit, the earned income credit will have to be disallowed. Make the filing status change see IRM 3.11.6.9.3 to disallow the earned income credit. Fill-in 105C/106C letter: "We have disallowed your claim for the Earned Income Credit because both the primary and secondary taxpayers listed on the return must have a valid Social Security Number." The PATH Act applies to filing status changes only to the extent of any additional EIC that is claimed. The PATH Act does not allow the removal of EIC previously allowed due to a filing status change to married filing jointly unless initiated by the taxpayer.

    Note:

    If the qualifying dependent has an ITIN number, send a 105C/106C letter fill-in: "We have disallowed your claim for the Earned Income Credit because the qualifying person must have a valid Social Security Number."

  2. PATH Act criteria may apply to this credit, see IRM 3.11.6.8.6.1 .

  3. Taxpayers filing married filing separate do not qualify for the credit. Disallow the claim and send a 105C/106C.

  4. Taxpayer investment income must be less than:

    Tax year Investment Income
    2015/2016 $3,400
    2014 $3,350
    2013 $3,300
    2012 $3,200
    2011 $3,150

    Note:

    If the taxpayer's investment income is more than the designated limit, send a 105C/106C letter disallowing the claim per IRM 3.11.6.9.3. Use fill-in: "We have disallowed your claim for the Earned Income Tax Credit because your investment income is greater than $XXXX."

  5. Taxpayer must have earned income, refer to IRM 3.11.6.8.12 to determine what qualifies as earned income.

  6. Taxpayer (and spouse if filing jointly) is not the dependent of another taxpayer for the same year.

3.11.6.8.11.2  (06-22-2016)
Taxpayer With/Without Qualifying Child(ren) on Schedule EIC

  1. Taxpayers who claim EIC based on having a qualifying child must also have a child who meets the following three tests:

    • Relationship

    • Age

    • Residency

    Note:

    The Additional Child Tax Credit may have to be recomputed if EIC is allowed and the taxpayer claimed three or more qualifying children for the Child Tax Credit. See IRM 3.11.6.8.12.

    Test Requirements
    Relationship test To be your qualifying child, a 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 test The child must be:
    • Under age 19 at the end of the calendar year.

    • Under age 24 at the end of the calendar and a student, or

    • Permanently and totally disabled at any time during the calendar year, regardless of age.

    Residency Test 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.
  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 76C paragraphs A, L, O with fill-in: We disallowed part of your claim for Earned Income Credit because a child shown on your Schedule EIC 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 1040X and complete a new Schedule EIC. Input a partial adjustment to allow child(ren) that meet all qualifications.

    Note:

    Taxpayer's child does not have to be a dependent of the taxpayer in order for the taxpayer to claim the EIC.

  3. If a child does not appear to meet the relationship or residency test send a 105C/106C; fill-in, We have disallowed your claim for the Earned Income Credit because the qualifying person did not meet either the relationship or residency requirements needed to claim this credit.

    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).

    T

  4. 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 or 65 on January 1st of a year immediately subsequent to the tax year (i.e., taxpayer turns 25 or 65 on January 1st, 2016 and is filing a TY 20015 return) the service will allow the claim for EIC provided other eligibility criteria are met.

    • Taxpayer must claim his/her exemption on the return (both spouses, if joint).

    Note:

    If the taxpayer does not meet the requirements outlined in paragraph (3) send a 105C/106C letter. Fill-in: "We have disallowed your claim for the Earned Income Credit because in order to qualify for this credit you must meet the Age, Residency, and Exemption requirements."

3.11.6.8.11.3  (09-26-2016)
Adjusting the EIC Account

  1. When the taxpayer makes an initial claim for EIC or when adding a qualifying child, Schedule EIC must be attached; correspond if missing per IRM 3.11.6.9.

    Note:

    Correspond using either Form 8009-A, box 4 or 5; or a 324C letter, paragraphs A, 3, 6, Use fill-in: "Please complete Schedule EIC to support the changes you have made."

    Exception:

    When claiming EIC for self and/or spouse only, Schedule EIC is not required.

  2. Before allowing the EIC, verify the qualifying child(ren) name(s), date of birth and SSN(s) using CC DDBCK, CC INOLE and CC NAMES.

    Exception:

    Do not disallow the claim or set a math error if the taxpayer provides a valid SSN for the individual.

    Note:

    If the qualifying child's SSN does not verify, correspond using Form 8009-A box 22, or a 324C letter, paragraphs A, 3, 6 with fill-in "The SSN provided on your Schedule EIC for the qualifying child was either incomplete or did not match our records. Please verify your information."

  3. Always verify EIC amount when there is a change to Earned Income, AGI, Filing Status and/or Exemptions. Use either CC EICMP or EIC worksheet on AMS to verify EIC.

    If And Then
    a) The EIC amount matches taxpayer's figure Based on math verification of the credit using CC EICMP or AMS worksheet. Continue processing the return
    b) The allowable EIC amount does not match taxpayer's figure The taxpayer's figure is within ≡ ≡ of the allowable EIC based on math verification of the credit using CC EICMP or AMS worksheet. Accept the taxpayer’s figure and continue processing the return.
    The taxpayer's figure is greater than the allowable EIC based on math verification of the credit using CC EICMP or AMS worksheet. Adjust the amount for the allowable amount and set the math error per IRM 3.11.6.6.4.
    The taxpayer’s figure is less than the allowable EIC amount by ≡ ≡ or more based on math verification of the credit using CC EICMP or AMS worksheet. Adjust the EIC amount using your recomputed figure. Do not correspond or set a math error.

    Note:

    Use CC RTVUE and the taxpayer's explanation when determining Earned Income.

  4. If the taxpayer has already received EIC, send a 76C letter with the following fill-in: "We did not allow the Earned Income Credit because our records indicate that you previously received the credit as part of your original or amended return."

  5. EIC allowed on the original return posts as a computer-generated TC 768 with a minus after the amount.

  6. Update the DUPOL database using CC DDBCK prior to making any adjustments when:

    • Adding/deleting a qualifying child for EIC

    • Increasing EIC

      Exception:

      Do not update when EIC increase is due to additional Form W-2, or when working EIC 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.

  7. When making an adjustment to EIC, use RC 053 and:

    • 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.

3.11.6.8.11.4  (10-07-2016)
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 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.

    Note:

    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 1040X to claim the child as a qualifying child. Send a 76C letter (paragraphs A, L and O) allowing the qualifying child(ren) claimed on the original return and input the adjustment per IRM 3.11.6.9.5. Use the following for the fill-in: "We disallowed part of your claim for the Earned Income 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 1040X. "

  2. PATH Act criteria may apply to this credit, see IRM 3.11.6.8.6.1 .

  3. Follow instructions in IRM 3.11.6.8.11.1 and IRM 3.11.6.8.11.2 for determining taxpayer's EIC eligibility . If a child appears not to meet the age requirements, do not assume that the child is a student or disabled. The taxpayer must indicate the child meets the age test. If a child appears not to meet the age test, send a 76C paragraphs A, L, O with fill-in: We disallowed your claim for Earned Income Credit because a child shown on your CP 09 appears not to meet the age requirement. If the child meets the age requirement as a student or disabled individual, you must file a Form 1040X and complete Schedule EIC.

    Note:

    You should input a partial adjustment for any child(ren) that meet all qualifications and send a 76C paragraphs A, L, O with fill-in: We disallowed part of your claim for Earned Income Credit because one or more of the children shown on your CP 09 did not meet the age requirement. In order to claim a student or disabled dependent, you must file a Form 1040X and complete Schedule EIC.

  4. Compute the EITC amount using IDRS CC EICMP definer "R" or the EIC worksheet on AMS then adjust the account accordingly.

  5. If current year, update Command Code DUPED when allowing EITC based on a CP 09.

  6. When adjusting an account based on a CP 09 use:
    A) 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.


    B) If disallowing the credit:

    • BS 05

    • SC 1

    • 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: -- Send a 76C letter (paragraphs A, L and O) disallowing the claim and input the adjustment per IRM 3.11.6.9.5. -- Use the following for the fill-in: "We are writing in response to the Notice Number CP 09 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." Use BS 05, SC 1, RC 054 and TC 290.00. If the original return was filed electronically attach a copy of the IMFOLR print.

  8. If the filer requests direct deposit, use Form 8009-A, Box 13 see IRM 3.11.6.9.6.

  9. 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.

3.11.6.8.11.5  (10-07-2016)
CP 27, EIC Potential for Taxpayer Without Qualifying Children

  1. The CP 27 notice, EIC Potential for T/P 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. PATH Act criteria may apply to this credit, see IRM 3.11.6.8.6.1 .

  3. Follow instructions in IRM 3.11.6.8.11.1 for determining taxpayer's EIC eligibility.

  4. Compute the EITC amount using IDRS CC EICMP definer "R" or the EIC worksheet on AMS then adjust the account accordingly.

  5. 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 1

    • RC 054

      Note:

      Do not input an amended claims date.

  6. If the taxpayer is not eligible for EITC based on our computations or eligibility criteria, disallow the credit: -- Send a 76C letter (paragraphs A, L and O) disallowing the claim and input the adjustment per IRM 3.11.6.9.5. -- Use the following for the fill-in: "We are writing in response 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. " Use BS 05, SC 1, RC 054 and TC 290.00. If the original return was filed electronically attach a copy of the IMFOLR print.

  7. If the filer requests direct deposit, use Form 8009-A, Box 13 see IRM 3.11.6.9.6

3.11.6.8.12  (01-01-2017)
Earned Income

  1. Earned income includes all employee compensation subject to income tax, net earnings from self-employment (SE), and gross income received by a statutory employee.

  2. Taxable earned income includes:

    • Wages

    • Salaries

    • Tips

    • Strike pay

    • Sick pay

    • Union strike benefits

    • Net earnings from self-employment (SE) or gross income received by a statutory employee.

    • Disability benefits (not disability Social Security) received by taxpayers under minimum retirement age (normally, this is reported on the Form 1040 as wages).

    Note:

    Minimum retirement age may vary.

  3. An amount paid to an inmate in a penal institution, for work, is not considered earned income for EIC purposes. Refer to IRM 3.11.6.3.19

  4. For EIC purposes, use SE income as reported on Schedule SE, minus the deductible part of SE tax or use EIC Worksheet B in Publication 596, Earned Income Credit.

  5. If Schedule SE is not present because the net earnings from self-employment shown on Schedule C, C-EZ, or F (or the combined net earnings) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , use the amount of net profit or loss reported on Schedule C, C-EZ or F.

  6. If Schedule SE is not present and there is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ reported, refer to Cat A.

  7. If SE income is a loss, subtract the amount from other earned income.

  8. If the optional method is used, use the optional amount as income; do not subtract the SE loss.

  9. If the taxpayer is a statutory employee (indicated on Form W-2, box 13), use Schedule C or C-EZ, line 1, as earned income.

    Note:

    If taxpayer receives wages from ministerial duties, some of the income reported on Form 1040, line 7, may also be shown on Schedule SE, line 2. Refer to CIS/AM.

  10. Native American Tribe Members who report Form 1099-MISC tribal related income on a Form 1040X are not subject to SET, nor is the amount considered as "earned income" for EIC purposes. The literals are:

    1. Indian gaming

    2. Indian Gaming Proceeds

    3. IGP

    4. Indian tribal distribution

    5. Indian tribal income

    6. Indian tribal fund

    7. Indian tribal earnings

    8. Native American

    9. IGE

    10. ITI

    11. Alaska Permanent Fund

    12. Alaska Permanent Fund DIV

    13. APF

    14. APFD

  11. Earned Income includes:

    • Form· W-2 or similar statement

    • Form 1099-MISC

      Note:

      Not all income reported on a 1099-MISC is considered earned income.

    • Form 1099R with Distribution Code 3 and/or Disability

    • Form 4137

    • Form 8919

    • Schedule C

    • Schedule E, Part II (Line 29b col h, line 29a col j, line 40))

    • Schedule F

    • Schedule SE

    • Notation of HSH, Household Employee Income, Household Help

    • Notation to the left of line 21 indicating self-employment

    • Notation of prior year earned income (PYEI)

  12. Income that is not Earned Income:

    • Interest

    • Dividends

    • Welfare payments

    • Pensions

    • Veteran benefits

    • Taxable scholarships or fellowship grants not reported on Form W-2

    • Alimony

    • Child support

    • Social Security and Railroad Retirement benefits

    • Workers compensation benefits

    • Unemployment compensation (insurance)

    • Alimony and child support

    • Interest and dividends

    • Non-disability pensions and annuities (e.g., Form 1099R showing income other than Distribution Code 3)

    • Nontaxable foster care payments

    • Social Security and railroad retirement benefits (including disability benefits)

    • Unemployment compensation (insurance)

    • Veterans' benefits (including VA rehabilitation benefits)

    • Welfare benefits

    • Workers' compensation benefits

    • Earnings while an inmate

    • Workfare payments

    • Conservation Reserve Program (CRP) payments

    • Nontaxable military pay

    • Form 1099 C - cancellation of debt

      Exception:

      Taxpayers can elect to include nontaxable COMBAT pay in earned income for the earned income credit.

3.11.6.8.13  (01-01-2016)
Credits -- Refundable (Line 15)

  1. The following subsections provide processing instructions for Line 15:

    • 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)

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

  3. If the taxpayer claims a non refundable credit on line 15 of Form 1040X, move the amount to line 7. See IRM 3.11.6.8.6 paragraph (5).

3.11.6.8.13.1  (02-10-2016)
Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains (Line 15)

  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 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 3.11.6-4, 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 (1040X) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ , correspond.

    Note:

    Correspond per IRM 3.11.6.9 use either Form 8009-A, box 17 or a 324C letter paragraphs A, 3, 6 fill-in: "Please provide Form 2439 to support your change to 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 BMF.)

  4. Action required:

    1. Input TC 290.00 if no other adjustment is required.

    2. Use credit reference number 766 to allow the credit.

    3. Use Reason Code 057.

3.11.6.8.13.2  (09-15-2016)
Form 4136, Credit For Federal Tax Paid on Fuels (Line 15)

  1. Form 4136 must be attached if credit claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Route to Cat A if the credit claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  3. Route to Frivolous see IRM 3.11.6.3.12 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 3.11.6.9 using Form 8009-A, box 4 or a 324C letter using paragraphs A, 3, 6. For the fill-in use, "Please complete Form 4136 to support the changes you have made."

  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.

    Note:

    Fuel Tax Credit posted without a CRN in 2015 and prior. Beginning in 2016 the credit claimed on the original filing posted as a CRN 450, beginning in 2017 the CRN 450 will also post on adjustments. Use the CRN from Form 4136 to adjust/add the credit; do not use CRN 450.

  6. Include priority code 8 when making an adjustment.

3.11.6.8.13.3  (01-01-2017)
Form 8812, Additional Child Tax Credit (Line 15)

  1. This refundable credit is for certain individuals who qualify for CTC, see IRM 3.11.6.8.6.2 but received less than the full amount of the credit. The additional child tax credit (ACTC)may result in a refund even if no tax is owed.

    Note:

    If the credit was allowed during the original processing, TC 766 with CRN 336 will be present on the tax module.

  2. Path Act criteria may apply to this credit, see IRM 3.11.6.8.6.1.

  3. In order to qualify for the Additional Child Tax Credit (ACTC) the taxpayer must meet the qualifications for the child tax credit. If the taxpayer does not meet all of the criteria, partially/completely disallow the claim depending on the issues. Follow instructions in IRM 3.11.6.8.6.2 and IRM 3.11.6.8.13.3 for determining taxpayer’s Additional Child Tax Credit. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    If there is a math error on the account for the exemption, CTC, or ACTC, route to CIS/AM per local procedures.

  4. This credit has been expanded to include taxpayers with any number of qualifying individuals.

  5. If the taxpayer indicates a religious or conscience-based objection to obtaining or using a TIN, route to CIS/AM.

    Note:

    IRS will allow the credit if the taxpayer identifies as either Amish, Mennonite or Exempt 4029, even if the individual does not have a valid TIN. If the credit should have been allowed during original processing, adjust the account and/or process the claim.

  6. If Form 8812 is incomplete or missing, and cannot be perfected or "dummied" by using AMS worksheets, correspond per IRM 3.11.6.9 for required information to complete processing.

    Note:

    Correspond using either Form 8009-A, box 4 or 5; or a 324C letter with paragraphs A, 3, 6. Use fill-in: "Please complete [Form/Schedule] 8812 to support the changes you have made."

  7. If a taxpayer (or the spouse if married filing jointly) received nontaxable combat pay, they must include the amount in figuring their earned income when figuring the additional child tax credit.

  8. Math verify the 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 3.11.6.6.4.

    • 3. Adjust the ACTC amount using your recomputed figure. Do not correspond or set a math error.

  9. Update the DUPOL database per IRM 3.11.6.7prior to making any adjustment.

  10. To increase or allow the credit, input CRN 336 with a positive amount; to decrease or remove a previously posted credit, input CRN 336 with an amount followed by a hyphen (-) and RC 061.

    Note:

    If the taxpayer makes a claim for Additional Child Tax Credit for a qualifying dependent and Child Tax Credit is not claimed, update the DUPOL database using CC DDBCK prior to inputting adjustment.

3.11.6.8.13.3.1  (10-07-2016)
CP 08, Additional Child Tax Credit

  1. The 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, when they:

    1. Compute an amount for the Child Tax Credit, have no total tax liability, and fail to use the remaining portion of the credit to claim the Additional Child Tax Credit, or

    2. Indicate eligibility for the Child Tax Credit (by checking the boxes on line 6c), do not claim the Child Tax Credit due to no tax before credits and do not claim the Additional Child Tax Credit.

    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. Path Act criteria may apply to this credit, see IRM 3.11.6.8.6.1.

  3. In order to qualify for the Additional Child Tax Credit (ACTC) the taxpayer must meet the qualifications for the child tax credit. If the taxpayer does not meet all of the criteria, partially/completely disallow the claim depending on the issues. Follow instructions in IRM 3.11.6.8.6.2 and IRM 3.11.6.8.13.3 for determining taxpayer’s Additional Child Tax Credit eligibility including PATH Act criteria.

    Note:

    The CP 08 is an informal claim and is IRS initiated. As a consequence these claims should not be referred as Cat A.

  4. 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 dependent exemptions on the original return.

    2. The children are less than 17 years old at the end of the calendar year.

  5. If the taxpayer claims additional children on the CP 08 that were not claimed on the original return as dependent exemption, issue correspondence informing the taxpayer of the requirement to file a Form 1040X 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
    Send a 76C letter (paragraphs A, L and O) and adjust for the originally claimed children who qualify. Use the following for the 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 1040X."
    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, Use CRN 336 and the recomputed credit change, 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.
  6. Follow the procedures below when a taxpayer claimed the Child Tax Credit on their original return, and submits a CP 08 with less than 3 qualifying children claimed and does not submit Form 8812, Additional Child Tax Credit:

    1. Verify the taxpayer meets the criteria for receiving the Child Tax Credit, and if eligible, compute the amount of the Additional Child Tax Credit per Form 8812 instructions.

    2. Research CC RTVUE to determine if the taxpayer used non-taxable combat pay when figuring his/her earned income tax credit. If claimed, then do not include that amount when figuring the amount for earned income on Form 8812.

  7. If the taxpayer did not use an amount for non-taxable combat pay when figuring EIC, or if EIC was not claimed, then include the amount of non-taxable combat pay when figuring earned income on Form 8812.

  8. 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. Do not input the amended claims date.

  9. If the filer requests direct deposit, use Form 8009-A, Box 13 IRM 3.11.6.9.6

3.11.6.8.13.4  (01-01-2015)
American Opportunity Credit

  1. For claims involving the refundable portion of the American Opportunity Tax Credit (Form 8863) see IRM 3.11.6.8.6.7

  2. Form 8863 must be attached for the initial claim of the refundable portion of the American Opportunity Credit.

3.11.6.8.13.5  (01-01-2016)
Affordable Care Act (ACA) Overview

  1. The Patient Protection and Affordable Care ACT (ACA) required that certain individuals must have minimum essential health coverage, have a coverage exemption, or make a Shared Responsibility Payment (SRP).

  2. The ACA created a refundable tax credit for health insurance purchased through a Health Insurance Marketplace, the Premium Tax Credit (PTC).

  3. Certain individuals who did not have minimum essential health insurance coverage may be required to make a SRP on their tax return. This will be the only adjustment performed on MFT 35.

  4. All ACA related actions should be input using the tools provided (xClaim, Credit transfer etc.) if available.

3.11.6.8.13.5.1  (01-01-2016)
Coverage Checkbox

  1. When the taxpayer files their original return, they are required to indicate if everyone in their tax household had minimum essential health coverage for the entire year. The coverage indicator can be found on:

    • CC TXMOD with the literal "1" in the "COVERAGE-IND" field.

    • CC IMFOLR with the literal "COVERAGE" in the "INDS" field.

      Note:

      If a previous adjustment is on the account, these fields may display unreliable information. Review any posted adjustments for a TC 869 that may indicate the coverage indicator has been changed.

  2. If the case meets route out criteria, do not update the coverage checkbox.

  3. If the coverage checkbox area of the amended return is not addressed do not update the coverage indicator, continue processing the return.

  4. If the taxpayer changes the full-year checkbox and there are no other changes, input:

    1. TC 290 for .00.

    2. No reason code (RC).

    3. No amended claims date.

    4. Item Reference Number (IRN) 869 with a:
      -“.00” if the taxpayer is removing full-year coverage – (off)
      -“.01” if the taxpayer is adding full-year coverage – (on).

    5. Enter “Y” in the source document field.

    6. Enter “SD1040X” in the remarks field.

    Note:

    No supporting documentation is required.

  5. If the taxpayer changes the full-year checkbox and there are other changes, include the checkbox change with your adjustment by following paragraph 4(d) above.

3.11.6.8.13.5.2  (10-06-2016)
Premium Tax Credit (PTC)

  1. The Premium Tax Credit (PTC) is allowed for tax years 2014 and subsequent. Taxpayers use Form 8962, to claim the Premium Tax Credit. Taxpayers who purchase health insurance through a Marketplace will receive a Form 1095–A, Health Insurance Marketplace Statement which will provide a summary of the information reported to the IRS.

  2. Taxpayers eligible for PTC may opt to receive Advance Premium Tax Credit (APTC). Taxpayers who receive APTC must complete Form 8962 to reconcile the advance payment(s).

    Note:

    The reconciliation may result in a tax liability (Excess Advance Premium Tax Credit Repayment) reported on line 6 of Form 1040X or a refundable credit (Premium Tax Credit) reported on line 15 of Form 1040X.

  3. Refer to CIS/AM if:

    • Form 8962 is being added, deleted, or changed, unless it is a duplicate.

    • Form 1040X Line 6 is being increased/decreased and write-in reflects "APTC Repayment."

    • PTC/APTC is present on CC TXMOD or CC IMFOL and there is a change to income, filing status or the taxpayer is changing the size of their tax household. (i.e., adding or deleting dependent exemptions).

    • APTC data is indicated through Coverage Data Repository (CDR) research when adding a dependent.

    • 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 exemptions use AMS to research the Coverage Data Repository (CDR) per IRM 3.11.6.8.3.1.

  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:

    CC TXMOD CC IMFOL
    ADV-PTC-AMT TOTAL PTC
    PTC-LIAB-AMT TOTAL APTC
    PTC-AMT LIMIT AMT
    PTC-EXP-AMT APTC TX LIAB

3.11.6.8.13.5.3  (10-06-2016)
Shared Responsibility Payment Overview

  1. Beginning in 2014, certain individuals must have Minimum Essential health Coverage (MEC), have a coverage exemption, or make a Shared Responsibility Payment (SRP). On their returns, taxpayers may check a full-year coverage checkbox if all family members were covered or::

    • Attach Form 8965, Health Coverage Exemptions.
      and/or

    • Make a SRP.

  2. A taxpayer is liable for the SRP, if the taxpayer or another individual in the same tax household, does not have either MEC or a coverage exemption. The SRP is assessed and collected on MFT 35.

  3. Master File Verification is required on MFT 35 for all 2014 and subsequent returns. To verify MFT 35, compare Form 1040X, Column A, Line 9 to IDRS.

    If And Then
    Form 1040X, Column A, Line 9 matches IDRS.   Continue processing the Form 1040X
    Form 1040X, Column A, Line 9 does not match IDRS. "MFT 35 Display" is present on xClaim or a TC 971 AC 530 is present on IDRS. Research MFT 35 using CC IMFOLT.
    1. If the SRP amount matches Form 1040X, Column A, Line 9, continue processing the return.

    2. If the SRP amount does not match Form 1040X, Column A, Line 9, adjust to the column C amount.

    If And Then
    SRP is decreasing or SRP is increasing from any amount greater than zero. SRP has not posted on MFT 35.
    1. Hold the return per local procedures.

    2. Monitor the case weekly for the MFT 35 to post.

    3. After MFT 35 posts, continue to process the amended return.

    Note:

    Do not count the return on your Daily Work Record until the MFT 35 adjustment is input.

    Note:

    Research should include reviewing the posting date of the TC 150 compared to today’s date; if less than two weeks then research CC RTVUE for a SRP entry, Line 61; if an entry is present, suspend the case for five workdays.

    Caution:

    During Master File Verification, the Total Tax line of Form 1040X will not match if there is a SRP present on the account. The SRP is not included in the TC 150 amount. Math verification normally done per IRM 3.11.6.6.3 Master File Verification is not required if the difference is only the amount of the SRP as found on MFT 35.

  4. Do not set a math error on SRP adjustments.

3.11.6.8.13.5.3.1  (01-01-2017)
Adjusting the Shared Responsibility Payment (SRP)

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

    Note:

    Exam may validate a self-assessed SRP or assess the SRP if not self-assessed.

    Note:

    The SRP worksheet is not required, do not correspond if missing.

    Reminder:

    If the TC 150 return is an Identity Theft return that reported SRP, see IRM 3.11.6.3.7 and IRM 3.11.6.11 for routing instructions.

  2. Research CC TXMOD or CC IMFOL to determine if Exam has assessed/adjusted the SRP (TC 24X RC 154 on MFT 35) or is in the process of reviewing the account (–L freeze on MFT 30).

    If And Then
    There is no EXAM involvement There are no misapplied payments Adjust the SRP per (3) & (4) below.
    There is a misapplied SRP payment posted as a TC 670 on MFT 30. See (6 and 8) below for instructions on misapplied payments. Adjust the SRP following instructions in box above.
    You are creating a credit balance on MFT 35. After processing the amended return:
    1. If there is a refund on MFT 30, move the module balance to MFT 30 for the same tax year.

    2. If the taxpayer requests a credit elect and there is a credit balance on MFT 30, move the credit balance from MFT 35 to MFT 30 for the same tax year then input the credit elect from MFT 30. Otherwise do the credit transfer from MFT 35 to the appropriate MFT 30 module.

    3. If your MFT 35 adjustment creates the only credit balance and there is no credit elect request, then do not initiate a credit transfer.

    There is EXAM involvement   Follow procedures per IRM 3.11.6.3.5.2 EXAM/-L Freeze Processing. If a partial adjustment is required include increases to the SRP.
  3. Adjusting the SRP on MFT 30:

    • If SRP is the only issue, then input a TC 290 .00, no RC, Source Document "Y" .

    • If there are other issues, on MFT 30, then process as normal.

  4. Adjusting the SRP on MFT 35:

    • If increasing the SRP from zero, establish the MFT 35 account using CC MFREQD (when not using xClaim).

    • Input a TC 290 .00.

    • Use PRN 692 for the change amount.

    • Use RC 153.

    • Source Document "N" .

    • Input the Amended Claims Date on all overpayment adjustments.

      Exception:

      In November/December 2015 the IRS issued the 5600C letter informing some taxpayers they may have over-assessed their SRP. If the 5600 C is attached or mentioned:
      Use a Priority Code “3”.
      Do not use an “Amended Claims Date”.

      Note:

      Do not use a Hold Code 3 or 4 on MFT 35 adjustments.

      Reminder:

      If the taxpayer requests a Credit Elect, it must be input from MFT 30 see table in paragraph 2 above.

      Caution:

      Reducing SRP below zero will cause an unpostable (NLUN).

  5. During "Dead Cycles" do not transfer credit balances.

  6. For SRP credit transfers, input the adjustment then input the credit transfer. Always use the IAT Credit Transfer tool when inputting SRP credit transfers. In the IAT Transfer tool:

    If Then
    SRP is increasing
    1. Select "MOVE" .

    2. Enter "36" for the DPC.

    3. Use the 1040X Received Date.

    SRP is decreasing and you are creating a credit balance
    1. Select "Lump Sum" .

    2. Enter "00" for the DPC.

    3. Enter the 1040X Received Date for the Received Date.

    Note:

    For all SRP credit transfers, use "SD1040X" for the Remarks and "MISC" for the Category Code.

  7. When the IAT Credit Transfer tool is unavailable, continue processing the return and do not input a credit transfer.

  8. Misapplied payments: You can determine that a TC 670 payment came in with the 1040X if the payment date is within 7 days of the received date of the 1040X.

    Caution:

    If your case does not fit a scenario below do not initiate a credit transfer. If both an adjustment and a credit transfer are required, use a post delay code 1 on the MFT 35 adjustment.

    If And Then
    There is a TC 670 payment that came in with the 1040X, Posted on MFT 30. The amount matches the change to the SRP the taxpayer is requesting. Transfer the payment to the MFT 35 using the IAT credit transfer tool.
    There is a TC 670 payment that came in with the 1040X, Posted on MFT 30, which does not match the amount of the change to the SRP.

    Example:

    Taxpayer is requesting a SRP increase of $70, tax increase of $30, and the payment is for $100.

    The payment amount covers the total adjustment to the return including the increase to the SRP. Use the IAT credit transfer tool to transfer the amount of the SRP payment to the MFT 35.
    There is a TC 670 payment that came in with the 1040X, Misapplied to MFT 35. The taxpayer is asking to have us reduce or remove the SRP. No credit transfer needed. Continue to work case per normal procedures.

    Reminder:

    Any overpayment on the MFT 35 will be released once you have input your adjustment on the MFT 35 to reduce or remove the SRP.

3.11.6.8.13.5.4  (01-01-2016)
Form 8965, Health Coverage Exemptions

  1. Taxpayers who qualify for an exemption from all or part of the SRP must attach Form 8965, Health Coverage Exemptions, to their tax return. The coverage exemption can be for the:

    • Entire year or monthly

    • Entire household or individual members

    Reminder:

    No supporting documentation is required for Form 8965 and coverage exemptions may not apply to all members of the household.

  2. Coverage exemptions reported on an original return are transcribed and can be viewed using CC RTVUE or the AMS "8965 tool" . Coverage exemptions changed by a previous adjustment will not be pre-populated on the IAT 8965 Tool.

    Exception:

    Marketplace granted exemptions reported in Part I of Form 8965 and are not transcribed from the original return, nor are they captured in post processing (e.g., amended returns, etc.).

  3. Part 1 of Form 8965 is where the taxpayer reports marketplace granted exemptions. Data from Part 1 is not transcribed in original processing nor captured from an amended return.

  4. Part II of Form 8965 is where the taxpayer claims a full-year exemption for the entire household. Use CC RTVUE to verify the exemption located in the "Household Exemptions CD" field. When a Part II exemption was claimed on the original return it will reflect one of the following values:

    • "1" indicates Line 7a was checked yes.

    • "2" indicates Line 7b was checked yes.

    • "3" indicates both Line 7a and Line 7b were checked yes.

    Note:

    When an exemption in Part II of Form 8965 was not claimed the Household Exemption CD field will be blank.

  5. Part III of Form 8965 is where the taxpayer claims individual exemptions for members of their household. For individual coverage exemptions reported in Part III of Form 8965, the XREF-TIN of the TC 971 indicates the person with the exemption. The MISC field of the TC 971 will identify the exemption type and the months the exemption applies. The valid MISC fields are:

    • A through H = Alpha Exemption Code.

    • 01 through 12 + Months the exemption applies (01 = Jan., 02 = Feb.).

    • Y = The Exemption applies to the entire year.

    • "-" = Through (01-06 = Jan. though June).

      Example:

      If Part III of Form 8965 indicates an exemption for being incarcerated from January through June, the MISC field would show "F01-06" . If this same exemption was applicable for the whole year then the MISC field would show "FY" .

3.11.6.8.13.5.5  (09-15-2016)
Changes to Form 8965, Health Coverage Exemptions

  1. When the taxpayer files a Form 1040X and reports a coverage exemption using Part II and/or Part III of Form 8965, the coverage exemption is recorded on the MFT 30 with a TC 971 AC 175. TC 971 AC 176 signifies a previously reported exemption is no longer valid.

  2. Upon receipt of a Form 8965, verify the form is complete.

    If And Then
    There is only information provided in Part I (no information provided in Part II or Part III) There are other issues addressed on the Form 1040X Continue to process the other issues on the Form 1040X. Take no action on the information provided on the Form 8965.
    There are no other issues to address on the Form 1040X File the amended return by using xClaim to input a TC 290 for .00 (no RC)
    There are changes marked in Part II (do not address information provided in Part I) There are no changes marked in Part III, and no other issues on the Form 1040X. Update the household coverage exemption data as appropriate using the AMS “8965 Tool”. File the amended return by using xClaim to input a TC 290 for .00 (no RC)
    There are no changes marked in Part III, and there are other issues on the Form 1040X. Update the household coverage exemption data as appropriate using the AMS “8965 Tool” and continue to process the other issues on the Form 1040X.
    There are changes marked in Part II and information was also provided in Part III They provided a household coverage exemption in Part II and they are asking you to add or remove an individual coverage exemption in Part III, and there are no other issues on the Form 1040X Update the coverage exemption and household coverage exemption data as appropriate using the AMS “8965 Tool”. File the amended return by using xClaim to input a TC 290 for .00 (no RC)
    They provided a household coverage exemption in Part II and they are asking you to add or remove an individual coverage exemption in Part III, and there are other issues on the Form 1040X Update the coverage exemption and household coverage exemption data as appropriate using the AMS “8965 Tool” and continue to process the other issues on the Form 1040X.
    There are changes marked in Part III and no information was provided in Part II Box A of Part III is blank or illegible and other data is input in Part III, Box B-P, Complete Form 8009-A using fill-in: "Please provide the name(s) of the individuals listed in Part III of Form 8965. The names were either missing or illegible. " and attach to Form 8965. Place your employee number and the current date in the top left margin of the 8965, or in the appropriate place as specified by your site. The Form 8965 with the Form 8009-A attached is to be mailed back to the taxpayer. If the only adjustment is the F8965 then mail back the entire return.
    Box A of Part III is provided, however Box B of Part III is missing, There are other issues addressed on the Form 1040X Continue to process the other issues on the Form 1040X. Take no action on the information provided on the Form 8965
    Box A of Part III is provided, however Box B of Part III is missing, There are NO other issues to address on the Form 1040X File the amended return by using xClaim to input a TC 290 for .00 (no RC)
    Part III is complete (Information provided in Box A, B, C and information in Box D or E-P) Update the coverage exemption data using the AMS “8965 Tool
  3. For changes to Part II of Form 8965, access the AMS 8965 Tool then:

    If Then
    Reporting new data

    Note:

    For initial Form 8965 claims, only process boxes checked yes.

    1. Add the new data then click the "Add" box(es)

    2. Click "Issue TC971" .

    Changing previously reported data
    1. Locate the most recent data then check the "Reverse" box(es).

    2. Click "Issue TC971" .

    3. Input the corrected data then click the Add box(es).

    4. Click Issue TC971.

    Deleting previously reported data
    1. Locate the most recent data then check the Reverse.

    2. Click Issue TC971.

  4. For changes to Part III of Form 8965, access the AMS 8965 Tool then:

    If Then
    Adding a new coverage exemption record.
    1. Add a new line and input the updated coverage exemption information.

    2. Check the "Add" box.

    3. Repeat until all new records are entered.

      Note:

      The tool will populate the CC FRM77 screen and transmit the data. The adjustment will display as a TC 971 AC 175.

    Modifying an existing coverage exemption record.
    1. Locate the applicable exemption information in the pre-populated data and check the "Reverse" box.

    2. While still in the AMS "8965 Tool" , add a new line and input the updated coverage exemption information and check the "Add" box.

    Removing an existing coverage exemption record. Locate the applicable exemption information in the pre-populated data and check the Reverse box.

    Note:

    If a taxpayer reports overlapping exemptions or multiple full year exemptions, you should update accordingly.

    Note:

    Form 8965 exemption(s) cannot be reversed if the taxpayer used an invalid SSN during their original filing. If you receive an error message and cannot “Remove” a previous exemption; proceed by adding a new record with the updated information.

  5. Coverage exemptions updated using the AMS "8965 Tool" are recorded on IDRS as a TC 971 with the following Action Code:

    1. AC 175 when a record is added.

    2. AC 176 when a record is reversed/deleted.

3.11.6.8.14  (10-06-2016)
Credit Elect (Line 23)

  1. A "credit elect" occurs when the taxpayer requests to have all or a portion of their refund from Form 1040X credited as an estimated tax (ES) payment to a succeeding tax year. Taxpayers request a “credit elect” by either entering an amount on Line 23 of Form 1040X, or in a written statement.

    Note:

    If the taxpayer requests to skip a consecutive tax year (e.g., 2012 to 2014) route the case to CIS/AM.

  2. During "Dead Cycles" the IAT Credit Transfer tool is unavailable.

  3. If the taxpayer is making a credit elect request and has a tax liability on another tax year or requests to transfer the credit to a prior year, the computer will automatically offset the correct amount and send a notice to the taxpayer explaining the offset. If the credit elect amount on Form 1040X is larger than the outstanding tax liability, transfer only the remaining credit amount. If not, continue processing the return.

    Note:

    An outstanding tax liability can be identified by an amount next to “TOTAL MOD BALANCE” field on IMFOLI.

  4. If the taxpayer requests a credit transferred to a full paid module, continue processing the return and input the credit transfer.

  5. If the taxpayer is requesting a credit transfer larger than the refund from the adjustment, transfer only the amount that is available and correspond with the taxpayer explaining the difference in amounts. Send a 474C letter with paragraphs A, 1, d. Use fill-in: "We did not apply the full amount of your credit to your tax for 20XX, because your overbalance of $X,XXX.XX is less than the amount requested." or We did not apply a credit to your tax for 20XX, because your amended return did not result in a credit balance.

    Note:

    If the taxpayer has a balance due on the 1040X, do not transfer any amount.

  6. If the taxpayer is getting a refund larger than expected, transfer only the requested credit elect amount from the amended return.

  7. For the most recent Tax Year with a posted TC 150,, check CC TXMOD/IMFOL for the “UNAPPLD-CR-ELECT” amount (TC 836).

    If the amount on Line 23 of Form 1040X is Then
    Equal to or less than the UNAPPLD-CRELECT amount (TC 836)
    1. Do not input Credit Elect.

    2. Continue processing the rest of the return.

    3. Use RC 099.

    • Greater than the UNAPPLD-CR-ELECT amount (TC 836) or

    • The UNAPPLD-CR-ELECT field is not displayed

    1. Input the adjustment and include a Hold Code “1” to prevent an erroneous refund. Use RC 099.

    2. Move the credit using the IAT Credit Transfer Tool.

    Note:

    An unapplied credit elect occurs during original processing when the taxpayer’s overpayment is less than the requested credit elect. The unapplied credit elect reflects the difference between the requested credit and the credit available to transfer. Unapplied credit elects are created systemically. Any attempt to transfer more than the available credit manually will result in an unpostable condition.

  8. To process the credit transfer, first input the 1040X adjustment. Then process the transfer using the IAT "Credit Transfer Tool " from CC TXMODA for the year of the Form 1040X.

  9. A "credit elect" can be recognized by TC 836 on the current year’s (2014) module and TC 716 on the following year’s (2015) module.

  10. If the taxpayer requests to reverse a previous "credit elect" , either to be applied to the balance owed on Form 1040X or to be refunded and:

    If the taxpayer and Then
    Files a superseding return (See IRM 3.11.6.2.3) or meets one of the exceptions found in number (11) below. Requests the previous credit elect to pay the balance due on the amended return.
    1. Input the adjustment and include a Hold Code “1” to prevent an erroneous refund.

    2. Move the allowable amount using the IAT Credit Transfer Tool.

    Requests a refund of the previous credit elect.
    1. Input the adjustment without a Hold Code.

    2. Move the allowable amount using the IAT Credit Transfer Tool.

    Note:

    If the taxpayer is only requesting the credit elect to be refunded then follow "b)" above then input a TC 290 .00.

    Does not file a superseding return  
    1. Continue processing the return.

    2. Send a 247C letter using paragraphs A, D, S.

      Note:

      For paragraph D, use the credit elect amount from the taxpayer’s original return.

      Note:

      For paragraph S, use 0922.

    3. Do not input the Credit Transfer.

  11. To process the credit transfer as stated in (9) above, first input the 1040X adjustment. Then reverse the credit elect using the IAT Credit Transfer Tool to transfer the credit back to the year it generated from and allow to refund.

  12. When a taxpayer requests a credit elect it is a binding election and can only be reversed and refunded to the taxpayer per the exceptions below. In order to process a credit elect reversal for IMF accounts, the request must be received:

    • Files a superseding return IRM 3.11.6.2.3.

    • Before the return for the credit year has posted, and before March 1, of the year following the year to which the credit was applied

      Example:

      A request to reverse a credit elect from a 2015 account back to the 2014 account must be received before the 2015 return has posted and by March 1, 2016.

      Exception:

      Requests received after March 1 can be considered if one of the conditions below applies:

    • There was an error in processing that can be verified.

    • If the taxpayer made an error on entering the overpayment as a credit elect, does not have an ES tax requirement, and the taxpayer does not have a filing requirement as determined by the income information on CC IRPTR (IRPTR information is usually available by June, or July at the latest, so anything prior to that would not involve a filing requirement determination).

3.11.6.9  (10-06-2016)
Correspondence Procedures

  1. It is sometimes necessary to correspond with taxpayers. Correspondence should be professional (i.e., correct spelling, punctuation, and grammar).

    • When required information is needed to complete a claim, such as missing required forms or schedules, or missing signature(s) (Form 8009-A or the 324C letter)

    • Do not correspond when you can "dummy" the form or schedule from the information attached or through IDRS research.

    • when disallowing or partially disallowing a claim (105C or 106C letter)

    • when correcting the computation for a claim (4364C letter)

    • when the taxpayer is claiming a credit which they already received (76C letter)

    • when the taxpayer is requesting direct deposit of a refund.

  2. Use the following guidance for correspondence unless otherwise directed with a specific instruction.

  3. Once you have determined the case is incomplete do not route it to Cat A/Exam. Follow normal correspondence procedures.

  4. All correspondence issues need to be identified prior to initiating correspondence to ensure all items are requested at the same time.

    Note:

    Ignore dollar limit tolerances once correspondence has been initiated. Example: Correspondence is initiated because Form 1040X is missing a Schedule EIC but there is also an unexplained entry on line 7 of $400. Correspond addressing both issues

  5. Research CC TXMOD/IMFOL for various Transaction Codes, Freeze Codes, etc., that would result in routing the amended return. Do not correspond on a return that will be routed unless specifically instructed otherwise. See IRM 3.11.6.10 when corresponding for missing forms, schedules or signature(s).

  6. CC IMFOLR screen prints are not required to be attached on paper filed returns.

  7. In general, correspondence is issued on:

    1. Form 8009-A for net result refund or zero balance on Form 1040X. Form 1040X will be mailed back to the taxpayer with the Form 8009-A requesting the required information. See IRM 3.11.6.9.2.

    2. Letter 324C for net result balance due on Form 1040X, APO/FPO, and Disaster claims. Form 1040X is held in a suspense file (maximum 45 days) awaiting for the taxpayer’s reply. See IRM 3.11.6.9.1.

      Exception:

      Form 8009-A can be sent to an APO/FPO address when there is no attachment and no reply is expected. An example is when you are informing the taxpayer that an amended return refund cannot be direct deposited.

  8. Do not correspond if the change is the result of a ripple effect and the schedules or forms needed to support the change are missing.

  9. If the signature is present on a net zero tax change (e.g., TC 290 .00) and the return is submitted only to provide additional information, do not correspond. For example, if the taxpayer states, "I forgot to attach Schedule B" and it's still not attached, do not correspond for the Schedule.

  10. Follow the instructions below when the address on the Form 1040X does not match IDRS.

    If And Then
    Corresponding using Form 8009-A. An address change can be made per IRM 3.11.6.6.1 (6). Correspond using the address on the Form 1040X. Do not update IDRS (CC ENMOD) until reply is received.
    Corresponding using Form 8009-A. An address change can not be made per IRM 3.11.6.6.1 (64). Correspond using the address of record on IDRS.
    Corresponding using a C letter. An address change can be made per IRM 3.11.6.6.1(6). Correspond using the address on the Form 1040X. (see IRM 3.11.6.9.1 further instructions).
    Corresponding using a C letter. An address change can not be made for reasons other than missing signature. Correspond using the address of record on IDRS (see IRM 3.11.6.9.1 further instructions).
    Corresponding using a C letter. An address change can not be made due to a missing signature. Correspond using the address of record on IDRS and suspend the return.
  11. Follow local procedures for sending correspondence to the taxpayer.

3.11.6.9.1  (01-01-2017)
Corresponding on Net Balance Due Returns (324C Letter)

  1. When an amended return reflects an overall balance due that is missing required forms, schedules, signature(s), or other necessary information, request the missing information using a 324C letter and suspend the return.

    Exception:

    If the only correspondence issue on a balance due or zero balance return is a missing signature, issue a 324C Letter at the same time you input your adjustment. When the taxpayer responds, associate the information with the adjustment document.

  2. If the reply to suspended correspondence is received within the 45 day suspense period and:

    1. All the requested information is supplied, continue processing the return. On the ADJ54 screen, use the original or edited Received Date from the return as the Received Date and the Received Date from the taxpayer’s reply as the Amended Claims Date.

    2. If it is determined that correspondence was unnecessary and all issues can be determined, process the return using the original Received Date as the Received Date and the Amended Claims Date.

    3. The taxpayer does not supply all the requested information and the return is still incomplete, input the tax increase, credit decrease(s) and allow any credits that can be substantiated. Send a 4364C letter per IRM 3.11.6.6.5. Also include the statement: "You did not provide (insert a description of the missing information.)"

  3. If no reply is received, after the 45 day suspense period input the tax increase, credit decrease(s) and any substantiated credits only. Send a 4364C letter per IRM 3.11.6.6.4. Also include the statement "You did not provide (insert a description of the missing information)." If all issues can be determined, process the return using the original Received Date as the Received Date and the Amended Claims Date.

    Exception:

    Do not allow any credits if the correspondence was for a missing signature.

  4. If a reply is received after the amended return is closed per paragraph (3) route the claim to CIS/AM as research and corrective action will need to be taken that cannot be done by SP.

3.11.6.9.2  (01-01-2017)
Corresponding on Net Refund and Zero Balance Returns (Form 8009-A)

  1. When an amended return reflects a net overall refund or zero balance and is missing required forms, schedules, signature(s), or other necessary information, complete Form 8009-A and attach to Form 1040X.

    Exception:

    If the only issue on a zero balance return is a missing signature, use a 324C letter to request the signature and process the adjustment at the same time. When the taxpayer responds, associate the information with the adjustment document.

    Note:

    If a TC 971 AC 270 is entered on IDRS and the correspondence will not be sent to the taxpayer, use CC TERUP (work leader CC RVIEW) to cancel the pending transaction. If past the time frame where CC TERUP/ RVIEW can be used, input a TC 972 AC 270 to reverse the transaction, using the date from the TC 971 AC 270 in the TRANS-DT field.

  2. When processing a Form 8009-A:

    1. Circle out the Received Date. For a missing Received Date see IRM 3.11.6.2.4.

    2. Input a Tc 971 AC 270 and use the current date in the TRANS-DT field when sending the entire claim back to the taxpayer.

    3. Edit a brief action trail in the left margin of the return to show the items requested.

    4. Edit your employee number and current date in the top left margin of the return (or follow local procedures).

    5. The Form 8009-A should be attached to the amended return and mailed back to the taxpayer.

    6. Put the taxpayer’s name and address in the grey box of Form 8009-A if: you are mailing the return to an address other than the address on the Form 1040X or the entire return is not being returned to the taxpayer.

  3. When the taxpayer responds with all the requested information, continue processing the return. On the CC ADJ54 screen, use the Received Date from the taxpayer’s reply as both the Received date and Amended Claims Date.

    Note:

    Do not use the original circled out Received Date.

  4. If the taxpayer’s reply on a refund return is incomplete or unprocessable:

    1. Adjust the account for only the issues that are processable and send the 4364C letter per IRM 3.11.6.6.4. Include You did not provide [insert a description of the missing information].

    2. If no issues are processable send a 916C letter per IRM 3.11.6.9.10.

    a

  5. When it is determined that the correspondence was sent by the IRS in error:

    If Then
    The return can be processed for some of the issues, process the return for only those issues. Send a 916C with paragraphs B, Q, R, 0, * explaining why some issues were not addressed. Using fill-in: We could not process a portion of your claim because the requested information was not submitted or it was unclear what adjustment was being requested. You did not provide [insert a description of the missing information]. Include a corrected Form 1040X showing the adjustment being processed as an enclosure. When inputting the return on IDRS, use the original Received Date as the Received Date and Amended Claims Date.
    All issues can be determined. Process the return using the original Received Date as the Received Date and Amended Claims Date.
    None of the issues can be determined. Send a 916C letter, see IRM 3.11.6.9.10
  6. If a signature is missing on an APO/FPO or a Disaster Claim, correspond using a 324C Letter. Do not mail back the return regardless if it is a refund or zero tax change return. Suspend the return until you secure a signature only on refund returns. Use the statement "You did not provide [insert a description of the missing information]."

3.11.6.9.3  (10-07-2016)
Correspondence for Disallowing a Claim (105C and 106C Letters)

  1. If an amended return is received that has previously been disallowed, route to CIS/AM.

  2. Use the 105C letter for disallowing the total claim and the claim is the only issue. Unless otherwise specified use paragraphs A, C, c, d, q, u. If two open paragraphs are needed use A, C, *, c, d, q, u. For a disallowance due to the PATH Act use paragraphs A, L, c, d, q, u. Input the adjustment as follows:

    • TC 290 .00

    • Blocking Series 99, or for a paper filed original return, use blocking 98

    • Source Code 0

    • Reason Code for what is being disallowed.

    Attach an IMFOLR screen print to the front of the 1040X below the entity section.

  3. Use the 106C letter for partially disallowing claim or the total claim when there are other issues present. Unless otherwise specified use paragraphs A, D, O, P, W, 0. If more than one open paragraph is required use paragraphs A, D, *, O, P, X, 0. For a partial disallowance due to the PATH Act use paragraphs: A, N, O, P, W, 0. For paragraph A the Amount of Claim is the total the taxpayer is expecting. The result of the adjustment is the We only allowed amount. Recompute the Correct Amount column without the disallowed claim and input the adjustment as follows:

    • TC 290 for the corrected total tax

    • Blocking Series 00, or for a paper filed original return, use blocking 18

    • Source Code 1

    • Appropriate RNs/CRNs and RCs to process the return for other issues.

    --Attach an IMFOLR screen print to the front of the 1040X below the entity section.

    Exception:

    When the disallowance of a claim results in a balance due then send a 105C letter. Input the adjustment following procedures outlined in (2) above.

  4. When the claim is being disallowed due to the Statute of Limitations See IRM 3.11.6.3.3.

  5. Send one 105C/106C even If two or more credits associated with the PATH Act are being disallowed by combining the open paragraph language.

3.11.6.9.4  (01-01-2017)
Correspondence for Correcting a Claim (4364C Letter)

  1. Use the 4364C letter for partially disallowing a claim where the claim is allowed and is not computed correctly. The 4364C letter provides only generic information and is utilized for returning a corrected copy of the taxpayer's Form 1040X, see IRM 3.11.6.6.4.

3.11.6.9.5  (10-06-2016)
Correspondence for Requesting Credit Previously Received (76C Letter)

  1. Use the 76C letter, if the taxpayer is requesting an adjustment and math verification shows that the adjustment requested is incorrect because the taxpayer is including a change to a credit already received, use the 76C to explain the difference.

  2. If the adjustment requested is a duplicate of the original filing or another amended return, follow the specific IRM instructions.

  3. When sending the 76C letter and the claim is the only issue, use paragraphs A, L, and O with the appropriate fill-provided in the specific instruction. Input the adjustment as follows:
    -- TC 290 .00
    -- Blocking Series 05
    -- Source Code 0
    -- No reason code
    -- Attach an IMFOLR screen print to the front of the 1040X below the entity section.

  4. Use the 76C letter for a claim and there are other issues present, use paragraphs A, L, and O with the appropriate fill-in provided in the specific instruction. Recompute the Correct Amount column without the disallowed claim and input the adjustment as follows:
    -- TC 29X for the corrected total tax
    -- Blocking Series 05
    -- Source Code 1
    -- Appropriate RNs/CRNs and RCs to process the return for other issues
    -- Attach an IMFOLR screen print to the front of the 1040X below the entity section.

  5. If a fill-in is not provided in the specific instructions, use the following: "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."

    Note:

    Appropriate Title will be the title of the Form or Schedule previously received.

3.11.6.9.6  (10-06-2016)
Corresponding on Direct Deposit Issues

  1. If Form 1040X is being routed out, direct deposit issues do not need to be addressed.

  2. If the taxpayer is requesting direct deposit of a refund or is changing their direct deposit information, send a Form 8009-A with box 13 checked to the taxpayer.

  3. If the amended return is a balance due or zero balance do not correspond. Do not consider a Form 1040 attached to the Form 1040X as a request for Direct Deposit.

  4. The taxpayer may request Direct Deposit:

    • On Form 1040X in the remarks area.

    • Form 8888, Direct Deposit of Refund to More Than One Account.

    • On attached correspondence.

    • With a voided check attached, if attached return with the Direct Deposit request.

    include a written request (or notation) for Direct Deposit or submits a Form 8888, Direct Deposit of Refund to More Than One Account, correspond using Form 8009-A, box 13. This also applies to CP notice requests for Direct Deposit.

    Note:

    If taxpayer provides a void check return it with the Direct Deposit request.

  5. Take the following action for processing the Form 1040X:

    If Then
    Form 1040X has issues other than the direct deposit Continue to process the return
    Direct deposit is the only issue Input TC 290 .00 and no RC.

3.11.6.9.7  (01-01-2014)
Amended Claims Date

  1. Use REQ54 to input the AMD-CLMS-DT.

    1. Use the IRS received date as the amended claims date.

    2. For suspended correspondence, the Amended Claims Date is the received date on 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. For CP 08, 09 and 27 processing, use Priority Code "3" instead of Amended Claims Date.

  3. See IRM 3.11.6.2.4 for determination of Received Date.

3.11.6.9.8  (01-01-2017)
Undelivered Correspondence

  1. When correspondence to the taxpayer is return undelivered, research IDRS for a better address, the return envelope/packet, or use the yellow address change sticker provided by the U.S. Postal Service on the envelop. Compare the entity on the yellow sticker to the name and address using CC ENMOD to verify it is the same taxpayer.

  2. When a new address is found, input a new letter using the new address; do not update the address in IDRS.

    Note:

    If the case is in suspense, close then reopen the suspended case to allow the taxpayer 45 days to respond from the date of your newly issued letter.

  3. For a 105C/106C, Disallowance Letter, do not reinput the letter. Send the entire original letter, including the returned envelope, unchanged to the new address in another envelope.

  4. When a correct address is found for Form 8009-A correspondence or 916C with the original 1040X enclosed, input a subsequent TC 971 AC 270.

  5. When a new address is not found:

    If Then
    The return was determined to be processable. Process the Form 1040X as normal using the original Received Date as the Amended Claims Date.
    The return is a zero balance return. Adjust the account per the return. Use the earliest received date (that has not been circled out).
    Correspondence was an 8009-A or a 324C letter requesting missing information. File the information using TC 290 .00 no RC and BS 05.
    Correspondence was a 916C letter with the original 1040X attached or was generated for missing information. Input a TC 290 .00 with no RC.
    Correspondence was a 916C letter with a “Corrected” Form 1040X attached or a 4364C letter that does not contain appeal rights Use Form 9856 to route the correspondence to files based on the DLN of the TC 29X which corresponds to the return.
    The correspondence was a formal disallowance or contained appeal rights Use Form 9856 to route the correspondence to files based on the DLN of the TC 29X which corresponds to the return. If a TC 29X is not present, then input the TC 290 .00 using IRM 3.11.6.9.3.
    Correspondence was for informational purposes (such as Direct Deposit) Destroy as classified waste per local procedures.
  6. If the Form 1040X is returned undelivered and a TC 150 is still not posted on the account, research for a new address and follow the table:

    If Then
    A new address is found send the Form 1040X back to the taxpayer.
    Anew address is not found and there are payments on the module Refer to CIS/AM.
    a new address is not found and there are no payments on the module treat as Classified Waste.
    If disaster is indicated on Form 1040X expedite to CIS/AM following local procedures.
  7. For undelivered CP 08, 09 and 27 notices, destroy as classified waste per local procedures.

3.11.6.9.9  (09-15-2016)
Correspondence Received, Unable to Locate Amended Return

  1. When the taxpayer replies to correspondence and you are unable to locate the suspended original amended return and the return was forwarded to AM then route the reply to CIS/AM.

  2. When the taxpayer replies to correspondence and you are unable to locate the suspended original amended return and the return was not forwarded to AM then proceed as follows:

    If And Then
    A recent adjustment has been input (after your C-letter date) that includes the forms/schedules received. The suspense period is open or expired. Use the TC 290 DLN when completing Form 9856 to associate the correspondence and route to Files.
    A recent adjustment has been input that does not include the schedules received with the correspondence or you are unable to determine if the complete adjustment was input. The suspense period is open or expired. Route CIS/AM.
    No adjustment has been input. The suspense period is open. Send a 282C letter paragraphs ABEMY37 fill-in "You will need to file another Form 1040X and attach copies of any schedules or documents included with your original Form 1040X. Sign and date the return, if you filed jointly then your spouse must also sign."
    The suspense period has expired. Route CIS/AM.

3.11.6.9.10  (10-06-2016)
Correspondence for “No Consideration” of a Claim (916C Letter)

  1. A 916C letter informs the taxpayer we cannot process their claim and they must file a new claim with the requested information.

  2. When instructed to send a 916C letter and:

    1. The entire claim is being returned to the taxpayer use paragraphs B, F, Q, R, 0, 3.

    2. A corrected Form 1040X is being sent to the taxpayer use paragraphs B, Q, R, 0, *. For the fill in “*” use “We are sending you a corrected Form 1040X.”

    3. The return is being no considered due to unsubstantiated withholding benefits from Social Security use paragraphs B, F, Q, R, 0, 3.

    For paragraph Q use fill-in: "You did not provide [insert a description of the missing information]." For paragraph R use fill-in: "When resubmitting your claim, please include Form 1040X in addition to your supporting documentation. If you need forms, schedules or publications to respond to this letter, you can obtain them by visiting the IRS website at www.irs.gov or by calling 1-800-TAXFORM (1-800-829-3676)."

    Note:

    If the entire return is being sent back to the taxpayer circle out all received dates.

  3. When issuing a 916C letter, include “Y” in the IAT Letter Tool "enc field" .

  4. Input a TC 971 AC 270 when returning the entire claim to the taxpayer.

  5. If a reply to the 916C is received and the taxpayer still has not submitted the requested information, then input a TC290 .00 with no RC.

  6. For statute year returns, see IRM 3.11.6.3.3.1.

  7. If a response to a 916C letter is received with no amended return attached, route to CIS/AM.

3.11.6.10  (01-01-2017)
Correspondence Table of Issues, C-Letters and Paragraph Fill-ins

  1. The following table is a guide in corresponding with the taxpayer, it is not all inclusive.

    ENTITY ISSUES
      If And 324C (8009-A)
    1. Tax Period is missing You cannot determine the correct tax period through IDRS research and attachments, for ANY dollar amount. Paragraphs: A, C, 6 Box 10 Note: Do not input TC 971 AC 270
    2. Primary TIN cannot be determined ALL attempts have been made (e.g., reviewed attachments, IDRS research, etc.) to secure the TIN Paragraphs: A, E, 6 Box 11 Note: Do not input TC 971 and AC 270 (only when the primary TIN cannot be determined)
    3. TP is changing to FS 2 and the Secondary TIN cannot be determined ALL attempts have been made (e.g., reviewed attachments, IDRS research, etc.) to secure the TIN Paragraphs: A, E, 6 Box 11 Note: Do not input TC 971 AC 270 (only when the primary TIN cannot be determined)
    4. The TP is changing to FS 4 TP is claiming a qualifying non-dependent and the name of the QND is not provided Paragraphs: A, G, 6 Box 7 Fill-in: "Please provide the name of the person who qualifies you as Head of Household."
    5. TP is FS 4 Removing all dependent exemptions and does not change to FS 1 or provide the name of the QND. Paragraphs: A, G, 6 Box 7 Fill-in: "Please provide the name of the person who qualifies you as Head of Household."
      MISSING FORMS AND OR SCHEDULES
    6. Forms or schedules to support the change are missing. Change is the result of a ripple effect Do not correspond Do not correspond
    7. Schedule A is missing The TP is changing from a standard deduction to itemized deduction or TP is increasing deductions on an existing Schedule A and does not explain the type of deduction and the change is not the result of a ripple effect Paragraphs: A, 3, 6
    Use the fill-in: "Please complete a Schedule A to support the changes you have made including completing Form 2106 if necessary."
    Box 8 with fill-in: "Please complete a Schedule A to support the changes you have made including completing Form 2106 if necessary. "
    8. Schedule EIC is missing The change is not the result of a ripple effect Paragraphs: A, 3, 6
    Use the fill-in: "Please complete Schedule XX to support the changes you have made"
    Box 4 or 5
    9. Reserved      
    10. Reserved      
    11. Schedule R/3 is missing or incomplete Any amount claimed Paragraphs: A, 3, 6
    Use the fill-in: "Please complete Schedule XX to support the changes you have made."
    Box 4 or 5
    12. Schedule SE (TP is FS 2 and both taxpayers have SE tax) They have combined their SE tax onto 1 Schedule SE Paragraphs: A, 3, 7 Fill-in: "Taxpayers filing jointly must file separate Schedules SE if they both have self-employment income. If only one spouse has self-employment income list only that spouse’s name on the Schedule SE. Otherwise, file two separate Schedules SE." Box 12
    13. Schedule SE (on a joint return) Schedule SE is missing and you cannot determine which TP account to adjust Paragraphs: A, M, 7 Box 12
    14. Form 1099-G for unemployment compensation is missing (TY 2009 only) Taxpayer is reporting all or a portion of their unemployment benefits are non-taxable and the income cannot be verified on IRPTR (TY 2009 only) Paragraphs: A, 3, 6 Fill-in: "Please provide a copy of your Form 1099-G to support your unemployment compensation amount. " Box 8 Fill-in: "Please provide a copy of your Form 1099-G to support your unemployment compensation amount. "
    15. Form 1099-G for unemployment compensation is missing There is a change to withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and it cannot be verified on IRPTR Paragraphs: A, 3, 6 Fill-in:" Please provide a copy of your Form 1099-G to support your change in withholding." Box 16
    16. Form 2106, Employee Business Expense, is missing; there is no explanation of source of the miscellaneous deductions The amount of the unreimbursed employee expense ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    17. Form 2120, Multiple Support Declaration is missing Form 8332 or a copy of the divorce decree is not attached See box 32 See box 32
    18. Form 2439, Notice to Shareholders of Undistributed Long-Term Capital Gains, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 15 of Form 1040X Paragraphs: A, 3, 6 Fill-in: "Please provide Form 2439 to support your change to line 15. A duplicate or photocopy is acceptable." Box 17
    19. Form 2441, Child and Dependent Care Credit is missing The change is not the result of a ripple effect Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 or 5
    20. Lines 1c and 2b cannot be determined through research Paragraphs: A, L, 6 Box 18:
    21. Line 4 Part II is blank and cannot be determined through research Paragraphs: A, 3, 6 Fill-in: "Please provide your Earned Income amount on Line 4, Part II. This line must be completed." Box 20
    22. line 5 is blank and cannot be determined through research (FS 2 only) Paragraphs: A, 3, 6 Fill-in: "Please provide the spouse’s Earned Income amount on Line 5, Part II of Form 2441 This line must be completed when married filing a joint return." Box 21
    23. Form 3800, General Business Credit, or the supporting forms are missing for a specific credit. Any amount claimed Paragraphs: A, 3, 6 Note: Request the specific credit form. If the specific credit is not known, request Form 3800
    Use fill-in: "Please complete Form XX to support the changes you have made"
    Box 4 Note: Request the specific credit form. If the specific credit is not known, request Form 3800
    24. Form 4136, Credit for Federal Tax Paid on Fuels, is missing. The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    25 Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. If the taxpayer is reporting they are not subject to the 10% penalty, Form 5329 must be attached. See IRM 3.11.6.8.7.1 paragraph 4. Paragraphs A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    26. Reserved      
    27. Reserved      
    28. Reserved      
    29. Reserved      
    30. Form 5695, Residential Energy Credits The change is not the result of a ripple effect Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    31. Form 6478, Alcohol and Cellulosic Bio-fuel Credit, is missing and Form 3800 is not attached Any amount claimed Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    32. Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents is not attached. A copy of the divorce decree or Form 2120 is not attached Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 14
    33. Form 8396, Mortgage Interest Credit, is missing The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    34. Form 8826, Disabled Access Credit, is missing and Form 3800 is not attached The amount claimed Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    35. Form 8834, Qualified Electric Vehicle Credit is missing, and Form 3800 is not attached The amount claimed is not the result of a ripple effect Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    36. Form 8835, Renewable Electricity, Refined Coal, and Coal Production Credit is missing, and Form 3800 is not attached. The amount claimed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    37. Form 8863, Education Credit (Line 7 or 15 of Form 1040X) Is missing, any amount claimed and the change is not the result of a ripple effect. Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    38. Form 8863, Education Credit (Line 7 and/or 15 of Form 1040X) Is attached, the student’s name and/or TIN is missing and cannot be determined Note: Form 1098-T may be used to determine the student’s name and/or TIN Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    39. Form 8864, Biodiesel and Renewable Diesel Fuel Credit is missing, and Form 3800 is not attached. Any amount claimed Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    40. Form 8880, Credit for Qualified Retirement Contributions The change is not the result of a ripple effect Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    41. Form 8907, Non-conventional Source Fuel Credit is missing, and Form 3800 is not attached. Any amount claimed Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    42. Form 8910, Alternative Motor Vehicle Credit is missing, and Form 3800 is not attached. Any amount claimed Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    42a Form 8917, Tuition and Fees deduction Any amount claimed Paragraphs A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    43. Any Form or Schedule (not previously listed) is missing to support the change. The refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , for new balance due see, IRM 3.11.6.9.1 Paragraphs: A, 3, 6
    Use fill-in: "Please complete Form XX to support the changes you have made."
    Box 4 or 5
    WITHHOLDING
    44. Form W-2 or Form 1099 Series is missing. Exception: Form 1099-G, Unemployment Compensation. The change to withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and cannot be verified on IRPTR. Paragraphs: A, N, 6 Box 16
    45. Form W-2 or W-2C is missing IRC 127 exclusion ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Paragraphs: A, 3, 6 Fill-in: Please provide a copy of your Form W-2 to substantiate your claim for a reduction of wages due to employer provided educational assistance benefits. We will accept a duplicate from your employer or a photocopy. Box 8
    SIGNATURE ISSUES
    46. A signature is missing. Conditions 1 or 2 do not apply:
    1. Taxpayer is divorced (net zero or tax increases only), spouse overseas, or
    2. An “amended” Form 1040 reflecting the 1040X information is attached and signed.
    Paragraphs: A, P, 6, c Box 1

    Note:

    Include box a. if it is a joint return.

    47. A signature is missing on a decedent return. The return is not signed by a surviving spouse, an attorney, CPA, or representative of a bank/fiduciary institution. Paragraphs: A, P, 6, c Note: Do not address correspondence to the deceased taxpayer. Box 1 Exception: Do not correspond on refund returns.
    48. 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, c Box 1 and box c.
    49. 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, c Box 2 Note: Include Form 2848 as an enclosure
    50. 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, c Box 2 Note: Include Form 2848 as an enclosure
    51. The return is signed by someone other than the taxpayer. Form 8821 is attached and the appointee signed the return A, P, 6, c Box 2 Note: Include Form 2848 as an enclosure
    52. The return is signed with an “X” Two witnesses did not sign A, P, 6, c Box 1b
    53. 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, c Send 324C letter do not mail the return back.
      EXEMPTIONS
    54. TP is claiming an exemption who did not live with him/her due to a divorce or separation.   A, 3, 6 See box 32 See box 32
    55. Name and/or TIN is missing, or TIN and/or name does not match CC INOLE, or TIN cannot be determined through IDRS research. 1. Amish or Mennonite is not indicated, or
    2. Form 4029 is not indicated or attached, or
    3. The dependent was not born and died in the same year.
    Paragraphs: A, T, 6 Box 9
    56. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There is no explanation of the change and you are unable to determine through attachments. Paragraphs: A, 3, 6 For the fill-in use: "We are unable to correct your account with the information you supplied on your Form 1040X. There is not a sufficient explanation to determine what changes are being requested. Please correct the appropriate column(s) and/or supply an explanation and tell us what changes you made to your income, deductions, credits and the amount and reason for each change." Box 5 and 15
    57. There is a new unsubstantiated credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There is no explanation of the change for the credit. Paragraphs: A, K, 3, 6 For the fill-in use: "We are unable to correct your account with the information you supplied on your Form 1040X. There is not a sufficient explanation to determine what changes are being requested. Please correct the appropriate column(s) and/or supply an explanation and tell us what changes you made to your income, deductions, credits and the amount and reason for each change." Box 5 and 15
    58. Form 1040X Lines 1 – 15 columns A and C match the information on IDRS. (For the single column Form 1040X there is no indication of a change) There is no explanation of the change, and you are unable to determine through attachments Paragraphs: A, 3, 6 For the fill-in use: "We are unable to correct your account with the information you supplied on your Form 1040X. There is not a sufficient explanation to determine what changes are being requested. Please correct the appropriate column(s) and/or supply an explanation and tell us what changes you made to your income, deductions, credits and the amount and reason for each change." Box 15
    Estimated Tax Penalty
    59. Amending to change the estimated tax penalty (TC 170 / 176) No Form 2210 Send the taxpayer a 369C letter using paragraphs: A, G, U, 4. For the paragraph U fill-in use: We did not receive your Form 2210. If you used the annualized income installment method, please complete Form 2210 and check box C in Part II. Also complete Schedule AI of Form 2210. You can get any of the forms or publications mentioned in this letter by calling 1-800-TAX-FORM (1-800-829-3676) or visiting our website at www.irs.gov/formspubs.

    Note:

    For telephone number use 1-800-829-1040.

    N/A

3.11.6.11  (01-01-2017)
1040X Routing Guide

  1. Dollar ($) Tolerance is the change to Total Tax (Line 11) unless otherwise indicated. Cat A tolerances refer to Total Tax decrease as a direct result of the specific condition without regard to the module balance.

  2. If an IRM tridoc and the routing guide contain conflicting information; the specific section instruction takes precedence over the general instruction contained in the routing guide.

  3. When multiple routing conditions are present, see IRM 3.11.6.4. The following table contains routing instructions for cases not worked by SP 1040X. The Maildex IRM 3.10.72 contains a complete list of forms, letters, CPs and their routing.

      Condition Route if Route to
      9th Amendment to the U.S. Constitution Taxpayer’s objection to military spending Always Frivolous
    A) African-American Reparation Tax Always Frivolous
      Age Discrimination Claims (IRC 104(a)(2)) Always CIS/AM
      Alimony Paid deduction (TIN of recipient provided) the amount is changing CIS/AM
      Altered Form Tax returns with altered line item(s) with the intent of showing noncompliance with the tax laws Always Frivolous
      American Indian Credit (Form 8845) Claim reducing taxable income by substantial amounts citing American Indian Employment Credit Always Frivolous
      Archer MSA (Form 8853) Always CIS/AM
      Argument Filing of tax return or paying tax Government action/inaction (claim of deduction or credit based on dissatisfaction with government action or spending) Always Frivolous
    B) Basket Option Transactions
    • Filed under Notice 2015-73

    • Filed under Notice 2015-74

    Always CIS/AM
      Black Taxes Always Frivolous
      Bosnian Refugees Claim eliminating tax based on status as Bosnian refugee Always Frivolous
      Burleson Tax Court Decision Transportation Expense tax deduction see IRM 3.11.6.3.5.1 Cat A
    C) Casualty Loss, Non-Disaster see IRM 3.11.6.3.5.1 Cat A
      Casualty Loss, Disaster (Fm 4684 / Sch A) see IRM 3.11.6.3.5.1 Expedite to Cat A
      CIS imaged Form 1040X see IRM 3.11.6.3.9 CIS/AM
      City of Detroit Policemen and Firemen disability retirement benefits see IRM 3.11.6.3.5.1 Cat A
      Clean-Fuel Vehicle - (IRC 179A) Always CIS/AM
      Code of Federal Regulations (CFR 1.86) Always Frivolous
      Court Cases cited
    Butcher’s Union City vs. Crescent City, CO Always Frivolous
    Eisner vs. Macomber Always Frivolous
    May Dept. Store vs. Sequa Rev. Ruling 99-40 Always CIS/AM
    Medical/Dental Resident FICA Claims, includes:
    • Mayo Clinic

    • Minnesota vs. Apfel

    Always CIS/AM
    Pigford vs. USDA
    Pigford vs. other
    Black Farmers Suit
    Keepseagle vs. USDA
    Native Americans vs. USDA
    Pigford II vs. USDA
    Always CIS/AM
    Quality Stores Inc. vs. U.S. located in Kentucky, Michigan, Ohio, and Tennessee see IRM 3.11.6.3.5.1 Cat A
    U.S. vs. Long Always Frivolous
    Williams Claims Always CIS/AM
      Constitutional objection to income tax Always Frivolous
      Combat Zone Balance due return CIS/AM
      CP Notices
    CP 59 Always Batching
    CP 503 / 504
    1. with statement of can’t pay, won’t pay, want to pay or Form 9465 attached.

    2. without statement or Form 9465

    1. Collections

    2. CIS/AM

    CP 523 Always Collection
    CP 2000 2006 / 2501 Check last process code of the TC 922
    1. Open AUR control base or removing/disputing income.

    2. All others

    1. Underreporter

    2. follow normal processing procedures

    CP 2005 Always workable
    D) Disabled Access Credit (Form 8826) see IRM 3.11.6.3.5.1 Cat A
      Decedent Return
    • Form 1310 is attached

    • MFR 08 present on CC INOLES

    • Refund returns

    Always CIS/AM
      Disaster Claims see IRM 3.11.6.3.5.1 Cat A
      Disaster Return (no TC 150) Always Expedite to CIS/AM
      Disallowed claim resubmitted Always CIS/AM
      Domestic Production Activities Deduction (Form 8903) If changing CIS/AM
      Dual Status Always CIS/AM
    E) Erroneous Refunds Always CIS/AM
      Examination Classification Disallowed or Rejected Always CIS/AM
      Excess Contributions to an IRA   CIS/AM
      Adding an exemption (personal or dependent) AND
    AMS "CDR Search Tool" indicates APTC was paid on behalf of individual being added.
    Always CIS/AM
      Exonerated Prisoner or similar Always Route to CIS/AM with EXPR as the working trail
      Extraterritorial Income exclusion (Form 8873) Always CIS/AM
    F) Federal Reserve Notes are not Legal Tender - Argument that Federal Reserve notes are not money so they are not income when received Always Frivolous
      Fellowship, grant, or stipend see IRM 3.11.6.3.5.1 Cat A
      FICA (SS Tax) / RRTA - Refund claim for students based on IRC 3121(b)(10) see IRM 3.11.6.3.5.1 Cat A
      FICA (SS Tax) / RRTA - Refund claim for student nurses based on IRC 312(b)(13) see IRM 3.11.6.3.5.1 Cat A
      FICA (SS Tax) / RRTA - Refund Claim by foreign student see IRM 3.11.6.3.5.1 CIS/AM
      FICA (SS Tax) / RRTA - Refund Claim by religious group see IRM 3.11.6.3.5.1 Cat A
      Fifth Amendment Improper blanket assertion of the Fifth Amendment right against self-incrimination as a basis for not providing financial information Always Frivolous
      Fisher vs. U.S. Protective Claim Always Cat A
      Fiscal Year Filer Always CIS/AM
      Foreign
    • Address

    • Income excluded

    Always CIS/AM
      Fuel Tax Credit, the return claims the credit but the taxpayer does not have an occupation that would justify the use of off-road fuel, such as: hairdresser, day care, nurse... Always Frivolous
      Fulbright Grantee Always CIS/AM
      Forms
    433-D, Installment Agreement see IRM 3.11.6.3.16 Collections (CSCO)
    499/W-2PR/W-3PR Withholding Statement Always CIS/AM
    843, Claim for Refund and Request for abatement Always CIS/AM
    906, Closing Agreement Reference see IRM 3.11.6.3.5.1 Cat A
    911, Request for Taxpayer Advocate Service Assistance Always TAS
    926, Return by a U.S. Transferrer of Property to a Foreign Corporation Always CIS/AM
    982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) If attached or mentioned CIS/AM
    1040 (unrelated) Always Detach and route to Receipt and Control
    1040-C, U.S. Departing Alien income tax return Always CIS/AM
    1040 Guam Always International
    1040-MISC (questionable income) see IRM 3.11.6.3.5.1 Cat A
    1040-NR/EZ U.S. Nonresident Alien Tax Return Always International
    1040-PR Always International
    1040-SS U.S. Self-Employment tax return Always CIS/AM
    1040X (Unrelated) Always Detach and process
    1042-S Foreign Person's U.S. Source Income Subject to W/H Always International
    1045 Application for Tentative Refund Always CB/CF
    1095–A, with amounts in part III column C. Always CIS/AM with working trail PTCX
      1099 Series
    1099-OID (Return with withholding in the exact amount as income) Always Frivolous
    1099-Q Payments from Qualified Education Programs If changing CIS/AM
    1099-R Distributions from Pensions, Annuities, Retirement or profit sharing plans, IRAs, insurance contracts, etc. Distribution code other than 1 or 7 If changing CIS/AM
    1099-R Distributions from Pensions, Annuities, Retirement or profit sharing plans, IRAs, insurance contracts, etc. Only one attached: handwritten, altered or is a substitute ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ IVO
    Only one attached: handwritten, altered, or is a substitute ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ IVO
    1099-VI (Virgin Island) Always International
      1116, Foreign Tax Credit If changing CIS/AM
    1310, Statement of Person Claiming Refund Due to a Deceased Taxpayer Always CIS/AM
    2106, New or added expenses see IRM 3.11.6.3.5.1 Cat A
    2159, Payroll Deduction Agreement Always Detach Form from the amended return and route to Collection Operation.
    2210F, Underpayment of Estimated Tax by Farmers and Fishermen Always CIS/AM
    2439, (claiming Reparation Tax) Always Frivolous
    2555/2555EZ, Foreign Earned Income Always International
    3115, Application for Changing in Account Method Always CIS/AM
    3520, Annual Return of Foreign Trust with U.S. Owner Always CIS/AM
    3911, Taxpayer Statement Regarding Refund   Detach and route to Refund Inquiry per local procedures.
    3949 Always Detach and route to your local function based on the checked box on Line 9-14 on the second page.
    3949-A Always Detach and route to: Fresno Submission Processing Center (FSPC) Stop 31313
    4136, Credit for Federal Tax Paid on Fuels see IRM 3.11.6.3.5.1 Cat A
    4137, Social Security and Medicare Tax on Unreported Tip Income Always CIS/AM
    4563, Exclusion of Income for Bona Fide Residents of American Samoa Always International
    4852, (Prisoners explain the income is based on computation of min wage for hrs worked in the prison) Always Frivolous
    5074, Allocation of Individual Retirement Arrangement Tax to Guam or Commonwealth of the Northern Mariana Island Always International
    5405, First Time Home Buyer Credit Recapture/Repayment If changing CIS/AM
    5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations Always CIS/AM
    5884-B, New Hire Retention Credit Always CIS/AM
    6118, Claim for Refund of Tax Return Preparer and Promoter Penalties.

    Exception:

    Form 6118 with only penalty type "J" in column "c" .

    Always Cat A
    Mail to:
    Attn: Jan Ribolla
    100 E Wayne St. Suite 200
    South Bend, IN 46601
    6765, Credit for Increasing Research Activities ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
    8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) see IRM 3.11.6.3.5.1 Cat A
    8275, Disclosure Statement (or written disclosure statement citing Section 6662) see IRM 3.11.6.3.5.1 Cat A
    8288 A/B, Withholding on Distributions by Foreign Persons of U.S. Real Property Interests Always CIS/AM
    8396, Mortgage Interest Credit see IRM 3.11.6.3.5.1 Cat A
    8379, Injured Spouse see IRM 3.11.6.3.18 See IRM 3.11.6.3.18
    8609, Low- Income Housing Credit Allocation and Certification ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
    8586, Low-Income Housing Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
    8609, Low Income Housing Credit Allocation and Certification ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
    8615, Tax for Certain Children Who Have Investment Income of More Than $1,900 Always CIS/AM
    8689, Allocation of Individual Income Tax to the U.S. Virgin Islands Always International
    8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts See IRM 3.11.6.3.5.1 Cat A
    8801, Credit Paid for Prior Year Minimum Tax Always CIS/AM
    8813, Partnership Withholding Tax Payment Voucher Always CIS/AM
    8826, Disabled Access Credit Return contains Sch C, E, F, or evidence of “other” income see IRM 3.11.6.3.5.1 Cat A
    8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) Always CIS/AM
    8839, Qualified Adoption Expenses Always CIS/AM
    8845, Indian Employment Credit Always CIS/AM
    8846, Credit for Employer Social Security and Medicare Taxes paid on Certain Employee Tips Always CIS/AM
    8853, Archer MSAs and Long-Term Care Insurance Always CIS/AM
    8854, Initial and Annual Expatriation Information Statement Always CIS/AM
    8859, District of Columbia First-Time Home Buyer Credit see IRM 3.11.6.3.5.1 Cat A
    8862, Information To Claim Earned Income Credit After Disallowance Always CIS/AM
    8866, Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Met see IRM 3.11.6.3.5.1 Cat A
    8873, Extraterritorial Income Exclusion Always CIS/AM
    8885, Health Coverage Tax Credit If changing CIS/AM with HCTC in the working trail
      Reconsideration Letter attached Always Input TC 971 AC 010
    Mail return w/ 3210 to:
    IRS Andover Campus
    310 Lowell St
    Andover, MA 01812
      8889, Health Savings Account If changing CIS/AM
    8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans Always CIS/AM
    8903, Domestic Production Activities Deduction If changing CIS/AM
    8919, Uncollected Social Security and Medicare Tax on Wages Always CIS/AM
    8939, Allocation of Increase in Basis for property received from a Decedent Always Process the amended return as normal. Route Form 8939 to:
    Estate and Gift Tax Operation
    Internal Revenue Service
    201 W Rivercenter Blvd
    Covington, KY 41011
    Attn.: Stop 824G
    8941, Credit For Small Employer Health Insurance Premiums (SHOP) If changing CIS/AM and notate in the working trail ACAX.
    8959, Additional Medicare Tax If changing CIS/AM
    8960 Net Investment Income Tax If changing CIS/AM
    8962, Premium Tax Credit (PTC) If changing CIS/AM and notate in the working trail PTCX
    9465, Installment Agreement Request If attached or mentioned, see IRM 3.11.6.3.16 Collections IRM 3.11.6.3.16
    14039, Identity Theft Affidavit see IRM 3.11.6.3.7 CIS/AM
    or
    Batching
    14157 Complaint: Tax Return Preparer

    Note:

    If Form 14157-A is also attached, follow the Form 14157-A procedures

    Always Route to: Attn: Return Preparer Office
    401 W Peachtree Street NW
    Mail Stop 421-D
    Atlanta, GA 30308
    14157-A Tax Return Preparer Fraud or Misconduct Affidavit Always Route completed form along with any supporting information to: CIS/AM.
      W-2 / W-2G Wage and Tax Statement
      Only one W-2 attached: handwritten, altered, or is a substitute see IRM 3.11.6.3.4 IVO
      W-2 Missing see IRM 3.11.6.3.4 IVO
      W-2AS, W-2CM/CNMI, W-2GU, W-2PR Wage and Tax Statement Always CIS/AM
      W-2VI, U.S. Virgin Islands Wage and Tax Statement Always IRM 3.11.6.3.13
      W-7, Application for IRS Individual Taxpayer Identification Number / Application for Taxpayer Identification Number for Pending U.S. Adoptions
    • Attached, or the taxpayer requests additional information to complete processing

    Always Austin Submission Processing Campus
    ITIN Operation
    Stop: AUSC 6090
    P.O. Box 149342
    Austin, TX 78714-9342

    Note:

    Keep all documentation provided by the taxpayer with the application; this may include original passports, birth certificates...

      W-7/A Application for Taxpayer Identification Number for Pending U.S. Adoptions (ATIN) is attached to a Form 1040X Always Austin Submission Processing Campus
    Internal Revenue Service
    ATIN Unit
    P.O. Box 934
    Stop 6182
    Austin, TX 78767
      W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding Always International
      Freeze Codes (posted on IDRS)
      -D Freeze Always Statute
    E- Freeze Always CIS/AM
    F- Freeze Always Frivolous
    G- Freeze Always CIS/AM
    -I / I- Freeze Always CIS/AM
    -J Freeze Always CIS/AM
    J-Freeze Always CIS/AM
    M- Freeze Always CIS/AM
    P- Freeze Always
    • Net balance due workable

    • Net refund CIS/AM

    -Q Freeze Always CIS/AM
    T-Freeze see IRM 3.11.6.3.16 IRM 3.11.6.3.16
    -R Freeze always See IRM 3.11.6.6.7
    S- Freeze Always CIS/AM
    -U Freeze Always CIS/AM
    -V Freeze Always CIS/AM
    -W Freeze Always CIS/AM
    Y- Freeze Always CIS/AM
    -Z / Z- Freeze Always CI FDC
    G) Golden Parachute Claims see IRM 3.11.6.3.5.1 Cat A
      Goldmine Claims Investment losses or developmental expenses/interest from a Colorado goldmine see IRM 3.11.6.3.5.1 Cat A
      Goodwill deduction on Sch C and/or Sch E including K-1s
    • Self-Created Goodwill

    • Intangible Asset Deduction

    • Amortization

    • IRC 197

    • IRC 167

    • Income Tax Reg. 1.167

    • prepared by, letter from or business envelope from ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Always Cat A
      Grants see IRM 3.11.6.3.5.1 Cat A
    H) Health Care Act Excluding student loan amount Always CIS/AM
      Reconsideration Letter attached Always Input TC 971 AC 010
    Mail return w/ 3210 to:
    IRS Andover Campus
    310 Lowell St.
    Andover, MA 01812
      Household Employee Income, Household Help, (HSH) Always CIS/AM
    I) Identity Theft Primary/secondary taxpayer CIS/AM
    Dependent(s) only see IRM 3.11.6.3.7
      Immediate disallowance requested Always CIS/AM
      Income Changes of any income from taxable to non-taxable (i.e., reclassify wages as non-taxable income, such as worker’s compensation or statement that income is not taxable because of a specific reason) see IRM 3.11.6.3.5.1
    after any credits have been reversed whether identified by the taxpayer or not
    Cat A
      Insolvent Farmer If changing CIS/AM
      Claim reducing CG preference items for AMT (PL 99-272) If changing CIS/AM
      Interest Refund or abatement of any previous interest assessments made by Examination, DATC/ASTA, or AUR and Substitute for Returns program see IRM 3.11.6.3.5.1 Cat A
      International Return originally filed return or Form 1040X Always CIS/AM
      International Treaty cited income or tax excluded Always CIS/AM
      IRA Rollover If changing CIS/AM
      IRA Deduction If changing CIS/AM
      ROTH IRA If changing CIS/AM
      Rollover of Airline Payments to Traditional IRAs If changing CIS/AM
      IRC Section
      26 CFR 1.931.1 Always CIS/AM
    83 – Request for abatement of previously assessed taxes and/or penalties – generally in the form of Form 843, Claim for Refund and Request for Abatement Always Frivolous
    104a 2 – Claim that income from payment is based on age discrimination are excludable Always CIS/AM
    127 – Change to employer provided educational assistance ≡ ≡ ≡ ≡ ≡ ≡ CIS/AM
    131 - Claim that excludes qualified foster care payments or Difficulty Of Care (DOC) payments from gross income or taxpayer cites Notice 2014-7 which addresses income tax treatment of certain payments to individual care providers see IRM 3.11.6.3.5.1 Cat A
    134 – Claim that compensation as JROTC instructors is tax exempt Always CIS/AM
    165 – Claim for theft losses due to corporate misconduct and Ponzi schemes see IRM 3.11.6.3.5.1 Cat A
    179A – Clean Fuel Vehicle Always CIS/AM
    280G – Golden Parachute claims see IRM 3.11.6.3.5.1 Cat A
    301 – Veteran’s Disability Compensation is excluded from gross income see IRM 3.11.6.3.5.1 CIS/AM
    616(a) – Goldmine claims see IRM 3.11.6.3.5.1 Cat A
    692 – Federal Income Tax Forgiveness for Certain U.S. Military and Civilian Employees and Other Individuals Always CIS/AM with KITA as a working trail
    803 – Victims of Nazi Regime Always CIS/AM
    911, 913, 931, or 933 Always CIS/AM
    1001 – Claim on Sch A Other Miscellaneous Deductions – no gain realized for even exchange of property – Labor (property) – Employer’s (property) with No Gain Realized Always Frivolous
    1341 - Repayments of Debt Cancellation Always CIS/AM
    1341 - Claim that compensation for personal labor is not taxed Always Frivolous
    3121 – Claims that exempt the FICA portion of earnings from wages Always Frivolous
    3121 b 10 or 3121 b 13 – FICA ref. for student or nurse see IRM 3.11.6.3.5.1 Cat A
    3401 – FICA Always Frivolous
    4999 – Golden Parachute claims see IRM 3.11.6.3.5.1 Cat A
    6405 – Joint Committee

    Note:

    For multiple periods, the refund amount is the total for all tax periods.

    see IRM 3.11.6.3.5.1 Cat A
    6702 – Non-taxpayers filing on behalf of a taxpayer as a tax shelter Always Frivolous
    6851 – Tax Year terminated by the IRS see IRM 3.11.6.3.5.1 Cat A
    J) Johnson Island Income (IRC 6405) Always CIS/AM
      Joint Committee Return Refund >$ 2 million Cat A
      Jurat (altered) Always Frivolous
    L) Lottery Winnings (lump sum payment change from ordinary income to capital gain) Always CIS/AM
      Lump sum payment excluded from income Always CIS/AM
    M) Mariner’s Tax Deduction Always Frivolous
      Maritime Claims
    1. With a breakdown of days, localities, and rates

    2. Without a breakdown of days, localities, and rates

    1. see IRM 3.11.6.3.5.1

    2. all others

    1. Cat A

    2. CIS/AM

      Misapplied Payment see IRM 3.11.6.8.10 CIS/AM
    N) Native American Indian Treaty Usually a Form 1099-MISC or other income documents that include withholding generally greater than 18% of income and results in a refund Always Frivolous
      Net Operating Loss NOL Any indication of a NOL loss Always Carryback Carryforward
      Non-Disaster Casualty Loss see IRM 3.11.6.3.5.1 Cat A
      Non-Negotiable Charge Back An attempt to sell birthright back to the government for a large dollar amount with request for a Treasury Direct Account be set up to hold the money Always Frivolous
      Non-Resident Aliens Always CIS/AM
    O) Outlandish Credits Always Frivolous
    P) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Schedule E see IRM 3.11.6.3.5.1 Cat A
      Penalties
      Manual Adjustment to penalties and/or interest on tax liabilities. This is not the same as ES Penalties (TC170/176) Always CIS/AM
    Refund or abatement of any previous penalties manually assessed by Examination, DATC/ASTA, or AUR and Substitute for Return SFR program see IRM 3.11.6.3.5.1 Cat A
    Tax return preparer, promoter, and appraisal penalties see IRM 3.11.6.3.5.1 Cat A
      Pension Protection Act PL 109-280 Always CIS/AM
      Personal injury damages excluded from income (IRC Section 104 a 2 Always CIS/AM
      Police Meal Expense Always CIS/AM
      Ponzi Scheme IRC 165 see IRM 3.11.6.3.5.1 Cat A
      Prisoners supplying a substitute W-2 Always Frivolous
      Protective Claim refund / zero balance / blank see IRM 3.11.6.3.5.1 Cat A
      Public Law 99-272 Insolvent Farmer / AMT Always CIS/AM
      Public Safety Officer PSO Exclusion indicated on return Always CIS/AM
    R) Reed Slatkin Claim eliminating interest, dividend, capital gain income, and theft or casualty losses associated with Reed Slatkin Investment Club see IRM 3.11.6.3.5.1 Cat A
      Refunds < $1.00 or > $10 million CIS/AM
      Refund Inquiry Always CIS/AM
      Refund Scheme
    1. with -Z or Z- freeze code

    2. without a -Z or Z-

    1. CI SDC

    2. IVO

      Registered Domestic partners (RDPs). Can also be identified as CCA201021050 or CCA. Always CIS/AM
      Reparation Tax / Black Taxes Request for a reparation settlement based on the impact of slavery Always Frivolous
      Resubmitted Claim/Re-submission or Appeal of a previously rejected claim Always CIS/AM
      Revenue Ruling
      1.90-23 Transportation expenses see IRM 3.11.6.3.5.1 Cat A
    94-97 Transportation expenses see IRM 3.11.6.3.5.1 Cat A
    57-383 (Strike Fund Benefits Claim for refund) Always CIS/AM
    S) Safe Harbor Always Expedite to CIS/AM
      Schedules
    Schedule A various IRM 3.11.6.8.2
    Schedule A, Itemized Deductions All or substantially all gross income non-religious sources claiming a vow of poverty is claimed as a contribution on Sch A. Always Frivolous
    Schedule C, Profit or Loss from Business
    New / additional Expenses not claimed on original return
    1. Basic criteria – Includes changes to income and/or deductions, unless the only change is due to depreciation. See (b) below.

    2. If the only change is due to depreciation, refer to criteria (b) in the next column.

    see IRM 3.11.6.3.5.1 Cat A
    Deduction equal to or nearly equal to amount claimed as wages Always Frivolous
    Schedule E, Supplemental Income and Loss
    New / additional Expenses losses not related to Sch K-1 (Sch E, Parts II and III

    Passive income reclassified as Active
    see IRM 3.11.6.3.5.1 Cat A
    Schedule F, Profit or Loss from Farming new / additional Expenses not claimed on original return see IRM 3.11.6.3.5.1 Cat A
    Schedule H, Household Employment Taxes change to If Changing CIS/AM
    Schedule J – Income Averaging for Farmers and Fisherman ≡ ≡ ≡ ≡ ≡ claimed on Schedule J CIS/AM
    Schedule SE, Self-Employment Tax Source of SE income is based on Partnership income Schedule E If changing CIS/AM
    Self-Employment Income which appears to be subject to self-employment tax, but the taxpayer is not addressing/assessing the self-employment tax. see IRM 3.11.6.3.5.1 Cat A (Questionable SE income)
      Seller Paid Points (also see Schedule A)
    • Claimed for tax period other than year of purchase

    • HUD-1 or Settlement Statement not attached

    • Loan origination fees, Loan discount, Discount Points, Paid Points, not mentioned on HUD-1 or Settlement Statement

    • Property taxes, appraisals, inspections, title, or attorney fees included as deductible points

    If changing CIS/AM
      SFR literal on CC TXMOD or SUBST4 literal on CC IMFOLI TC 150 for .00 Always Collections
      Sick pay excluded from income IRC 104 a 2 If changing CIS/AM
      Social Security and Medicare Tax on Unreported Tip Income Form 4137 If changing CIS/AM
      State or Local Returns (original / signed) Always Detach and route to Receipt & Control
      Student Loan Forgiveness If changing CIS/AM
    T) Refund or abatement of any previous tax assessed by Examination, or Substitute for Return Program Exception: Route to CIS/AM if the EXAM case had no additional tax assessed and was closed as Non-Examined. see IRM 3.11.6.3.5.1 Cat A
      Claims with Project Codes: 0173, 0263, 0584, 0611 Including open Z- Freeze cases see IRM 3.11.6.3.5.1 Cat A
      Tax Equity and Fiscal Responsibility Act
    • TEFRA

    • 3906 (letter)

    • 4505 (any)

    Always CIS/AM
      Taxpayer Advocate Service Cases Form 911 Always TAS
      Thumbprint or Fingerprint (used in lieu of a signature) Always Frivolous
      Transportation Expenses (Rev. Ruling 90-23 or 94-97) see IRM 3.11.6.3.5.1 Cat A
      Treaty Any indication of an international treaty or U.S. Tax Treaty Always CIS/AM
      Treaty Trader Always CIS/AM
     
    • Tribal General Welfare Exclusion Act of 2014

    • General Welfare

    • H.R. 3043

    • Notice 2012–75

    • P-4291

    • Revenue Procedure 2015–35

    Always OSPC
    1973 Rulon White Blvd.
    Ogden, UT 84201
    Attn: M/S 1110, GECS
      Trusts Claim that attempts to flow income through a trust to avoid personal tax liability Always Frivolous
    U) Uncollected Social Security and Medicare Tax on Wages (Fm 8919) If changing CIS/AM
      United Mine Workers of America (UMWA) Refunds claimed for premiums paid If changing CIS/AM
      United States Tax Treaty Taxpayer claiming benefits under Always International
    V) Veteran’s Disability Compensation Excluded from gross income IRC 301 (This includes St Clair vs. US claims, IRS Ruling 80-9) Always CIS/AM
      Victim of Terrorist Action
    • Anthrax

    • Oklahoma City

    • IRC 104(a)

    • Killed in Action (KIA)

    • 9 / 11

    • 911 Rescue Workers

    • Publication 3920

    • Tax Forgiveness Victims of Terrorist Act

    • World Trade Center (WTC)

    Always Expedite to CIS/AM with KITA as the working trail
      Vow of Poverty issues Always Frivolous
    W) Walker Tax Court Decision Transportation expense tax deduction Always CIS/AM
      Withholding from one Form W-2, W-2G, or 1099 (Handwritten, altered name, or TIN, substitute, or TIN mismatch) ≡ ≡ ≡ ≡ ≡ ≡ ≡ IVO
      Withholding on a W-2 or substitute W-2 and no income Always Frivolous
      Work Opportunity Tax Credit WOTC / Welfare-to-Work see IRM 3.11.6.3.5.1 Cat A

Exhibit 3.11.6-1 
Current Form 1040X Editing Roadmap

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Exhibit 3.11.6-2 
Current Form 1040X Editing Roadmap

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Exhibit 3.11.6-3 
Form 1040 Reference Guide (Reason Codes for Form 1040 Changes)

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Line Description Reason Code
Line 7 Wages, salaries, tips, etc. Attach Form (s) W-2 007
Line 8a Taxable interest. Attach Schedule B if required 008
Line 8b Tax-exempt interest. Do not include on line 8a 008
Line 9a Ordinary dividends. Attach Schedule B if required 008
Line 9b Qualified dividends (see page 23) 008
Line 10 Taxable refunds, credits or offsets of state and local taxes (see page 24) 021
Line 11 Alimony received 021
Line 12 Business income or (loss). Attach Schedule C or C-EZ 012
Line 13 Capital gain or (loss). Attach Schedule D if required. If not required, check here 013 is used when there is a change to the amount of the capital gain or (loss)
Line 14 Other gains or (losses). Attach Form 4797 013
Line 15a IRA Distribution 016
Line 15b Taxable amount (see page 25) 016
Line 16a Pension and annuities 016
Line 16b Taxable amount (see page 26) 016
Line 17 Rental real estate, royalties, partnership, S corporation, trust, etc. Attach Schedule E 018
Line 18 Farm income or (loss). Attach Schedule F 019
Line 19 Unemployment compensation 020
Line 20a Social security benefits 099
Line 20b taxable amount (see page 27) 029
Line 21 Other income. List type and amount (see page 29) 021
Line 23 Educator Expenses 30
Line 24 Certain business expenses of reservists, performing artists and fee-basis government officials. Attach Form 2106 or 2106-EZ. 030
Line 25 Health savings account deduction. Attach Form 8889 CIS/AM
Line 26 Moving expenses. Attach Form 3903 030
Line 27 One-half of self-employment tax. Attach Schedule SE 030
Line 28 Self-employed, SEP, SIMPLE, and qualified plans 025
Line 29 Self-employed health insurance deduction (see page 29) 030
Line 30 Penalty on early withdrawal of savings 027
Line 31a Alimony paid 030 - without TIN
Line 31b Recipients SSN CIS/AM with TIN
Line 32 IRA deduction (see page 31) CIS/AM
Line 33 Student loan interest deduction (see page 33) 030
Line 34 Tuition and Fees Form 8917 30
Line 35 Domestic production activities deduction. Attach Form 8903 CIS/AM
Dotted portion of line 36 Other (write in) 030

Exception:

Repayment of Unemployment: CIS/AM
Archer MSA: CIS/AM

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Line Description Reason Code
Line 40 Itemized deduction (from Schedule A) or your standard deduction (in left margin) Itemized Deductions 076
Standard Deduction 092
Line 42 If line 38 is $152,525 or less multiply $3,950 by the total number of exemptions claimed on line 6d. 006
Line 44 Tax Box a Form 8814 -- 033
Box b Form 4972 – 033
Box c Form 8889 — CIS/AM
Box c Schedule J — 046
Schedule D Tax Computation from Schedule D worksheet —043
Line 45 Alternative Minimum Tax Attach Form 6251 045
Line 46 Form 8962; Excess advanced Premium Tax Credit repayment CIS/AM
Line 48 Foreign Tax Credit. Form 1116 CIS/AM
Line 49 Credit for child and dependent care expenses. Attach Form 2441 036
Line 50 Education credits. Attach Form 8863 035
Line 51 Retirement savings contributions credit Attach Form 8880 036
Line 52 Child tax credit. Attach Schedule 8812 if required 036 Workable CTC
CIS/AM others
Line 53 Residential energy credit. Attach Form 5695 036
Line 54 Other Credits Form 3800, Form 8801 036
Schedule R CIS/AM
8839 CIS/AM
Line 57 Self Employment Tax. Attach Schedule SE 044
Line 58 unreported social security and Medicare tax from Form 4137 or 8919 CIS/AM
Line 59 Additional tax on IRAs, other qualified retirement plans, etc. Attach Form 5329 if required 048 (Parts I and II only)
Line 60a Household employment taxes. Attach Schedule H. CIS/AM
Line 60b First Time Home Buyer Credit Repayment Form 5405 CIS/AM
Line 61 Health Care, Attach Form 8965 153
Line 61 Healthcare: individual responsibility 869
Line 64 Federal Income Tax withheld from Forms W-2 and 1099 051
Line 66a Earned Income Credit (EIC) 053
Line 66b Non-table combat pay election CIS/AM
Line 67 Additional child tax credit. Attach Form 8812 061
Line 68 American Opportunity Credit Form 8863 106
Line 69 Net Premium Tax Credit. Attach Form 8962 CIS/AM
Line 71 Excess social security and tier 1 RRTA tax withheld (see page 60) 055
Line 72 Federal Tax on Fuels Form 4136 061
Line 73 credits from: Form 2439 -- 057
Form 4136 -- 061 if workable IRM 3.11.6.11 for possible routing
Form 8885 -- IRM 3.11.6.11 for possible routing
Line 77 Amount of line 75 you want applied to your 2015 estimated tax. IRM 3.11.6.8.14
Line 79 Estimated tax penalty IRM 3.11.6.8.10.1

Exhibit 3.11.6-4 
Frivolous Claims

The following is a list of recognized frivolous arguments made by both individuals and businesses, but are not limited to this list. (This information can be found in Notice 2010-33) If you identify any of the frivolous issues, refer to the instructions in IRM 3.11.6.3.12 paragraph (4) (b) for routing to the Frivolous Returns Program (FRP).

  • Alleged Churches/First Amendment - Taxpayer receives income from non-religious sources, may claim a vow of poverty, and may submit a tax return with all or substantially all of the gross income claimed as a contribution on Schedule A.

  • Altered Form - Taxpayer submits a tax return altering any or all line items with the intent of showing non-compliance with the tax laws.

  • Altered Jurat/Uniform Commercial Code (UCC) 1-207 - Taxpayer submits a tax return that contains income and deductions and alters or lines through all or part of the jurat. The return may include a reference to UCC 1-207 or a statement that the return was not signed under penalties of perjury. The alteration may be located elsewhere on the return and an arrow to the jurat.

  • Amended Returns/Form 843 Claim - Taxpayer files an amended return or Form 843 to obtain a refund of all taxes paid in prior years based on a tax avoidance argument.

  • American Indian Employment Credit - Taxpayers submit returns and claims reducing taxable income by substantial amounts and citing an American Indian Employment Credit. Although there is an Indian Employment Credit available for business that employ American Indians or their spouses, there is no provision for its use by the actual employee.

  • Argument against Government Action/Inaction - Taxpayer claims a deduction or credit on the tax return based on dissatisfaction with government actions or spending.

  • Bosnian Refugees- Taxpayer filing claim eliminating tax based on their status as a Bosnian refugee.

  • Certain instances of misuse or excessive use of the section 6421 fuels credit.

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

  • Challenges to Authority/Title 26 or "Law" in Other Documents - Taxpayer may argue that Title 26 of the United States Code (USC) is not law because it was never enacted as named. They may also argue that other laws or documents prevent the IRS from assessing and collecting tax, such as the Bible, Bill of Rights, Declaration of Independence, etc.

  • Disclaimer - Taxpayer submits a disclaimer. The disclaimer states they "disclaim the liability of the tax due" , making the liability on the tax return zero.

  • Eisner vs. Macomber - Taxpayer reports wages but deducts all or a portion of the income as non-taxable compensation and references Eisner vs. Macomber.

  • Employment Tax/CFR 1.861 - Employers stop withholding and paying payroll taxes on their employees' wages.

  • Erroneous claims that are owed only by persons with a fiduciary relationship to the United States or the IRS.

  • Federal Reserve Notes Are Not Legal Tender - Taxpayer argues that Federal Reserve notes are not money so they are not income when received.

  • Fifth Amendment - Taxpayer makes an improper blanket assertion of the Fifth Amendment right against self-incrimination as a basis for not providing financial information.

  • Form 1099 MISC The frivolous F 1099 is used to claim large refunds based on bogus income and withholding that is normally reported as Other Income. Typically, the F 1099 MISC payer (issuer) is a large bank, loan, and/or mortgage company, the income and withholding may be substantiated on IRPTR. The fraudulent withholding is generally 33% of the reported income but may be up to 100%. The taxpayer may include other issues on these fraudulent claims.

  • Form 2555 Deduction - Taxpayer submits a return showing income and deducts the same amount (or a large portion of the amount) by adding "Form 2555" to line 21 of Form 1040. Form 2555, Foreign Earned Income, is usually attached showing the taxpayer’s "foreign address" is in the United States. The taxpayer also shows his income on Form 2555 as "foreign earned income" even though the employer's address is also in the United States.

  • Fuel Tax Credit Returns - Taxpayers submit returns that reflect fuel tax claimed for occupations that would not justify the use of fuel used for non-taxable purposes, such as hairdressers, housekeepers, nurse, etc. Realistically, the taxpayers would not have money sufficient to live on, if indeed they had purchased the amount of fuel on which they claimed the credits. Therefore, the claims remain so far beyond a reasonable range as to place good faith on the return in general.

  • In Lieu of - Taxpayer submits a document containing personal identifying information and a summary of income received "in lieu of" an official income tax form.

  • IRC 1001 -Taxpayer claims on Schedule A under "Other Miscellaneous Deductions" no gain realized for even exchange of property-Labor (property)-Employer's (property) with NO GAIN REALIZED Butcher's Union Co. v. Crescent City Co., 111 US 746 S.CT.Rptrpp.660-661.

  • IRC Section 83 - Claims, generally in the form of Form 843, Claim for Refund and Request For Abatement, request abatements of previously assessed taxes and/or penalties using IRC Section 83 as justification. The claims further describe that the abatement is based on an allegation that the taxpayer previously failed to compute, under IRC 83, the amount of property transferred in connection with the performance of services.

  • IRC 1341 - Taxpayer claims compensation for personal labor is not taxed by Title 26, IRC Section 1341

  • IRC 3121- Taxpayer contends that IRC 3121 exempts the Federal Insurance Contribution Act (FICA) portion of earnings from the definition of "wages" and therefore from "gross income" for federal income tax purposes. The taxpayer attempts to reduce taxable income by their portion of withheld social security tax.

  • IRS is a Private Organization/Collects Tribute, Not Taxes - Taxpayer argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc. and since the IRS deposits its revenues in the Federal Reserve Bank, it is a collection agency for the Federal Reserve Bank. Additionally, the taxpayer argues the Department of Treasury is part of the United Nations and secretly leading the tax-paying public into a "New World Order" .

  • Less-Native American Indian Treaty or Native American Indian Treaty-The filings usually include Form 1099-MISC or other income documents that include withholding, (generally greater than 18% of the income) and results in a refund.

  • Mariner's Tax Deduction (or the like) related to invalid deductions for meals.

  • Misinterpretation of the 9th Amendment to the U.S. Constitution Taxpayer's objection to military spending.

  • Non-negotiable Charge Back - Taxpayer attempts to sell their birthright back to the government for a large dollar amount and requests that a "Treasury Direct Account" be set up to hold the money.

  • Not a Citizen/Free Citizen/Not a Resident of Federal Zone - Taxpayer argues they are not a citizen of the United States and received no income or benefits from sources within the United States.

  • Not a Person or Individual - Taxpayer argues that he or she is not a "Person" or "Individual" within the meaning of the IRC; therefore, he or she is not subject to income taxes.

  • Obscene, Vulgar, Harassing - Taxpayer submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often this argument is expressed in an extremely demeaning manner with obscene, vulgar, or crude language and characters

  • Outlandish and/or Unsubstantiated Credits - Taxpayers submit returns and claims that generally reflect income, but also claim the exact amount of income entered as withholding. Oftentimes the filing contains Forms 1099-OID (Original Issue Discount). It is believed the scheme originated from a prison in the OH area, but it has taken off across the country. In some instances, the 1099-OID is shown generated to a payee unrelated to the taxpayer (such as the Department of the Treasury or various judges or attorneys), yet the withholding is claimed on the taxpayer’s return. The refund claimed, resulting from these filings are large.

  • Prisoners and substitute W-2-- prisoners supplying a substitute W-2 (Form 4852) with the explanation portion of the Form 4852 states the income is based on computation of minimum wage for hours worked within the prison. It lists a withholding amount that allegedly represents the amount an employer would withhold from an employee working for minimum wage. The inmate then claims a refund based on the data for income and withholding they say that the prison should have reported. Prisons never withhold from pay and do not issue Form W-2.

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

  • Services Not Taxable/Thirteenth Amendment/Form of Servitude - Taxpayer argues that income results from the sale of goods; therefore, the value of services is not taxable. This includes indentured servitude arguments and barter offsets. The taxpayer may also argue that the Thirteenth Amendment outlawed slavery. They may claim to be a "natural enfranchised individual and freeman" who is a resident of state and therefore a nonresident alien for the purpose of the IRC.

  • Sixteenth Amendment - Taxpayer argues the Sixteenth Amendment was not properly ratified; therefore, the federal government does not have the legal authority to collect an income tax without apportionment.

  • Taxes are Voluntary/Law Does Not Require - Taxpayer submits a tax return, amended tax return, or correspondence that argues income taxes are voluntary.

  • Thumbprint in lieu of a signature - Thumbprint is present in the signature area on a return.

  • Trusts - Taxpayer attempts to flow income through the trust to avoid personal tax liability. Promoters use "business trusts" as a primary means of evading income tax.

  • U.S. vs. Long - Taxpayer submits a tax return with zero money amounts and refers to U.S. vs. Long.

  • Unsigned Tax Returns - Taxpayer submits a completed unsigned tax return. A statement why the return is not signed is attached or added to the return indicating disagreement with the tax system.

  • Untaxed - Taxpayer argues that they should be "untaxed" and attempts to drop out of the Social Security system. They withdraw or rescind their Social Security Number (SSN), claiming they are a sovereign citizen.

  • Valuation - Taxpayer argues that income is not taxable because of the declining fair market value of the dollar. They state the dollar is not backed by gold/silver, or the value of services is offset by the value of the labor (barter income).

  • Wages Deducted in Cost of Goods Sold - Taxpayer submits a return with a Schedule C claiming a deduction equal, or nearly equal, to the amount reported as wage income. The deduction is usually included in the cost of goods sold but could appear under a different deduction category.

  • Wages/Receipts Not Income - Taxpayer argues that salaries and wages are not "income" within the meaning of the Sixteenth Amendment. Taxpayer may also argue that labor worth a certain amount is exchanged for money worth the same amount, so there is no income to be taxed.

  • Zero Returns - Taxpayer submits a tax return with zero money amounts and attaches a statement claiming there is no section of the IRC that establishes an income tax liability. The statement may also contain arguments regarding the definition of income. Taxpayer may cite the Latin phrase "Nunc Pro Tunc" ("Then and Now" ) on the return, Form 1096 and/or 1099. Taxpayer may list all zeros and claim a refund of all Federal Withholding, or claim an amount for wages, AGI and Standard Deduction, enter no tax and claim a refund of all Federal Withholding, or taxpayer claims wages and AGI, but carries AGI to refund line.

  • Zero Wages on a Substitute W-2 - Filer generally attaches either a substitute Form W-2, Form 1099, or Form 4852 that shows "$0" wages or no wage information. Entries are usually for Federal income tax withheld, but can be Social Security tax withheld and/or Medicare tax withheld. An explanation on the Form 1040X or Form 4852 may cite "statutory language behind IRC 3401 and 3121" , or include some reference to the company refusing to issue a corrected Form W-2 for fear of IRS retaliation.

Exhibit 3.11.6-5 
International Returns

The following is a list of International claims. Refer to IRM 3.11.6.3.13 for additional instructions.

  • Claims with foreign addresses on either the original or amended return (other than APO 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 1040X 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 Section 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 Section 6114 or 7701(b).

  • Form 8854, Expatriation Information Statement.

  • 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 Sections 911, 913, 931, or 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 or both taxpayers are Non-Resident Aliens (NRA).

  • Any indication on the Form 1040X 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).

Exhibit 3.11.6-6 
Glossary

Acronym Definition
AAR Administrative Adjustment Request
ACA Affordable Care Act
ACTC Advance Child Tax Credit
AFC Adjustment Function Criteria
AGI Adjusted Gross Income
AIMS Audit Information Management System
AM Accounts Management
APO Army Post Office
APTC Advanced Premium Tax Credit
ASED Assessment Statute Expiration Date
ASTA Alternative Strategies for Tax Administration
ATAO Application for Taxpayer Assistance Order
ATIN Adoption Taxpayer Identification Number
AUR Automated Underreporter Program
AVS ACA Verification Service
BMF Business Master File
CAF Centralized Authorization File
Cat A Category A (Examination criteria)
cc Closing Code
CC Command Code
CDR Coverage Data Repository
CI Criminal Investigation
CIS Correspondence Imaging System
CP Computer Paragraph
CRN Credit Reference Number
CSR Customer Service Representative
CTC Child Tax Credit
DATC Deferred Adverse Tax Consequence
DLN Document Locator Number
DP Data Processing
EIC Earned Income Credit
EITC Earned Income Tax Credit
EIN Employer Identification Number
FDC Fraud Detection Center
FDIC Federal Deposit Insurance Corporation
FICA Federal Insurance Contribution Act
FNS Fuel from Non-Conventional Sources
FPO Fleet Post Office
FS Filing Status
FYM Fiscal Year Month
HUD Housing and Urban Development
ICP Integrated Case Processing
IDRS Integrated Data Retrieval System
IMF Individual Master File
IRAF IRA File
IRC Internal Revenue Code
IRM Internal Revenue Manual
IRP Information Returns Program
IRS Internal Revenue Service
ISRP Integrated Submission and Remittance Processing
ITIN Individual Taxpayer Identification Number
KIA Killed in Action
KITA Killed in Terrorist Action
MFT Master File Tax (Code)
MMDDYY Month Month Day Day Year Year
OCR Office Collection Representative
O/S Original/Signed
OMB Office of Management and Budget
PECF Presidential Election Campaign Fund
POA Power of Attorney
POW Prisoner of War
PSPC Philadelphia Submission Processing Center
PTC Premium Tax Credit
RA Revenue Agent
RC Reason Code
RDD Return Due Date
RN Reference Number
RO Revenue Officer
RR Revenue Representative
RRTA Railroad Retirement Tax Act
RTC Resolution Trust Company
SC Source Code
SP Submission Processing
SRP Shared Responsibility Payment
SSN Social Security Number
TC Transaction Code
TIA Taxpayer Information Authorization
TIN Taxpayer Identification Number
TSR Taxpayer Service Representative
TSS Taxpayer Service Specialist
TY Tax Year
U/A Unallowable
URP Underreporter Program
YYMM Year Year Month Month

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