3.11.6  Data Processing (DP) Tax Adjustments

Manual Transmittal

October 23, 2015

Purpose

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

Material Changes

(1) Editorial (spacing, spelling, consistency, etc.) changes have been made through out this IRM.

(2) 2015 figures/tolerances added through out this IRM.

(3) Form line numbers have been revised through out this IRM.

(4) Sections have been arranged in a logical working sequence throughout the IRM.

(5) IRM 3.11.6.1(4) Added statement for using xClaim. IPU 15U0071 issued 01-08-2015

(6) IRM 3.11.6.1.1(1) Corrected reference to 1040NR. IPU 15U1107 issued 06-30-2015

(7) IRM 3.11.6.1.1(8) Extended the processing timeframes. IPU 15U0350 issued 02-19-2015

(8) IRM 3.11.6.1.1.1(4) added instructions for CP08, CP09 and CP27s received after the RSED.

(9) IRM 3.11.6.1.2.1 Added new section titled IRM Deviations. IPU 15U0591 issued 03-30-2015

(10) IRM 3.11.6.2.4(7) Override Code information added. IPU 15U0071 issued 01-08-2015

(11) IRM 3.11.6.3.1(2) Deleted sentence due to Form 4684 line change per SERP Feedback Control 201503162. IPU 15U0891 issued 05-21-2015

(12) IRM 3.11.6.3.1.2(2) b Correct paragraphs used in the 916C letter. IPU 15U0158 issued 01-21-2015

(13) IRM 3.11.6.3.3 Clarified procedures for processing statute year cases.

(14) IRM 3.11.6.3.3(11) chart Clarification on correspondence for signatures on statute year returns. IPU 15U0272 issued 02-05-2015

(15) IRM 3.11.6.3.3(8) Removed reference concerning “Excess Collection” per SERP Feedback 201505358. IPU 15U1432 issued 09-24-2015

(16) IRM 3.11.6.3.3(11) Corrected letter paragraphs in the table. IPU 15U0158 issued 01-21-2015

(17) IRM 3.11.6.3.3(11) chart Removed duplicated IRM. IPU 15U0350 issued 02-19-2015

(18) IRM 3.11.6.3.3(12) Correct date per SERP Feedback Control 201503445. IPU 15U0998 issued 06-10-2015

(19) IRM 3.11.6.3.3(12) Table Corrected the time frame for processing without a postmark. IPU 15U1432 issued 09-24-2015

(20) IRM 3.11.6.3.5(6) Added instructions to partial adjustment instructions when certain ACA elements are changed. IPU 15U0505 issued 03-18-2015

(21) IRM 3.11.6.3.5(2) Added note to clarify the correspondence procedure for referral to CAT-A and Exam. IPU 15U0071 issued 01-08-2015

(22) IRM 3.11.6.3.5(6) Added to input a TC 470 on MFT 35 partial adjustments per SERP feedback control 201503542. IPU 15U0998 issued 06-10-2015

(23) IRM 3.11.6.3.5.2(3) Clarified CAT-A procedures when a -L freeze is on the account per SERP Feedback Control 201502090. IPU 15U0709 issued 04-17-2015

(24) IRM 3.11.6.3.5.3(3) Clarified CAT A processing instructions. IPU 15U1107 issued 06-30-2015

(25) IRM 3.11.6.3.5.4 Clarify Offshore Voluntary Disclosure Program Procedures. IPU 15U0071 issued 01-08-2015

(26) IRM 3.11.6.3.5(7) & (8) Updated references to Form 1040X line numbers. IPU 15U0591 issued 03-30-2015

(27) IRM 3.11.6.3.8(2) table Updated KITA routing instructions. IPU 15U1432 issued 09-24-2015

(28) IRM 3.11.6.3.8(3) Clarified routing instructions for Underreporter cases. IPU 15U0071 issued 01-08-2015

(29) IRM 3.11.6.3.14(1) Added that signature correspondence is not required when processing cases associated with an approved W-7 application. IPU 15U1479 issued 10-7-2015.

(30) IRM 3.11.6.3.15(1) Added instructions for Victims of Terrorist Actions. IPU 15U0200 issued 01-28-2015

(31) IRM 3.11.6.3.15(1) Added to list of terminology used to identify KITA/KIA cases. IPU 15U1269 issued 08-06-2015

(32) IRM 3.11.6.3.15(1) Updated KITA routing instructions. IPU 15U1432 issued 09-24-2015

(33) IRM 3.11.6.3.16(2) and (6) Changed PO Box to Street address. IPU 15U0071 issued 01-08-2015

(34) IRM 3.11.6.3.16(5) Added emphasis to “no” Letter 1058. IPU 15U1107 issued 06-30-2015

(35) IRM 3.11.6.3.18 Added instructions for use of Hold Code 1 on MFT 35 when processing Injured Spouse cases. IPU 15U0786 issued 04-30-2015

(36) IRM 3.11.6.3.20 Clarified instruction on Combat Zone processing.

(37) IRM 3.11.6.3.22(3) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(38) IRM 3.11.6.3.23(3)(a) Clarified when to route refund cases with a P-Freeze. IPU 15U0875 issued 05-18-2015

(39) IRM 3.11.6.3.23(8) Revised IDRS number for Austin. IPU 15U0071 issued 01-08-2015

(40) IRM 3.11.6.3.24.1 Added examples for when AC 698 is used for clarification. IPU 15U0071 issued 01-08-2015

(41) IRM 3.11.6.5.1(4) Moved the note following the section to paragraph (4)d. IPU 15U0709 issued 04-17-2015

(42) IRM 3.11.6.5.2 Added instructions for tax increases and credit decreases. IPU 15U0709 issued 04-17-2015

(43) IRM 3.11.6.5.4(2) Added instruction on routing to R&C and added note on a route to Entity. IPU 15U0071 issued 01-08-2015

(44) IRM 3.11.6.5.4(5) Changed one bullet and added information to a Note concerning ID Theft. IPU 15U0071 issued 01-08-2015

(45) IRM 3.11.6.5.8(3)&(5) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(46) IRM 3.11.6.6.1(1) Correct command code literal. IPU 15U0071 issued 01-08-2015

(47) IRM 3.11.6.6.1(11) Updated letter paragraphs. IPU 15U0158 issued 01-21-2015

(48) IRM 3.11.6.6.3(4) Revised line number. IPU 15U0071 issued 01-08-2015

(49) IRM 3.11.6.6.3(5) Updated years that Form 1040X had different line numbers. IPU 15U1107 issued 06-30-2015

(50) IRM 3.11.6.6.3(6) Updated letter paragraphs. IPU 15U0158 issued 01-21-2015

(51) IRM 3.11.6.6.4(2) Revised form line numbers and added instructions when there is a math error that would take a posted item below zero per SERP Feedback # 201404499. IPU 15U0071 issued 01-08-2015

(52) IRM 3.11.6.6.4(4) chart Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(53) IRM 3.11.6.6.7.1(1) Statement that Reason Codes are not required when change is due to a ripple effect. IPU 15U1432 issued 09-24-2015

(54) IRM 3.11.6.6.7.3 Added Priority Code 2 and separate Priority Code 6. IPU 15U0071 issued 01-08-2015

(55) IRM 3.11.6.6.8 Correct link for -Y freeze code processing. IPU 15U0071 issued 01-08-2015

(56) IRM 3.11.6.6.8 Several deletions/corrections throughout section and corrected broken link. IPU 15U0709 issued 04-17-2015

(57) IRM 3.11.6.6.8(2) Clarified when to route or work P- freeze cases. IPU 15U0875 issued 05-18-2015

(58) IRM 3.11.6.6.8(3) Clarified TC 576 routing instructions. IPU 15U0428 issued 03-04-2015

(59) IRM 3.11.6.8.1.1(2) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(60) IRM 3.11.6.8.1.3(2) Corrected letter paragraphs per SERP Feedback Control 201503311. IPU 15U0998 issued 06-10-2015

(61) IRM 3.11.6.8.1.4(5) and (6) Updated letter paragraphs. IPU 15U0158 issued 01-21-2015

(62) IRM 3.11.6.8.2(2)&(3) 2nd NOTE Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(63) IRM 3.11.6.8.3.1(2) and (5) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(64) IRM 3.11.6.8.3.1(2) Required ACA research when adding exemptions. IPU 15U0071 issued 01-08-2015

(65) IRM 3.11.6.8.3.2(1) NOTE Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(66) IRM 3.11.6.8.6(6) Added section to verifying complete adjustments. IPU 15U0428 issued 03-04-2015

(67) IRM 3.11.6.8.6(3) Clarify routing instructions. IPU 15U0158 issued 01-21-2015

(68) IRM 3.11.6.8.6.1(2) Added the child(ren) must be dependents. IPU 15U0350 issued 02-19-2015

(69) IRM 3.11.6.8.6.1(8) Note to add instructions when both the yes and no boxes are checked on Form 8812 per SERP Feedback 201404494. IPU 15U0071 issued 01-08-2015

(70) IRM 3.11.6.8.6.1(8) Clarified blocking series when disallowing CTC per SERP Feedback Control 201501884. IPU 15U0591 issued 03-30-2015

(71) IRM 3.11.6.8.6.3(2) and (3) Updated tax years for Residential Energy Credits per SERP Feedback Control 201501449. IPU 15U0505 issued 03-18-2015

(72) IRM 3.11.6.8.6(4) Note Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(73) IRM 3.11.6.8.6.1(3) Note Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(74) IRM 3.11.6.8.6.2(1) Note, (3), (7) chart, (8) Note Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(75) IRM 3.11.6.8.6.3(5) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(76) IRM 3.11.6.8.6.4(3) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(77) IRM 3.11.6.8.6.6 Added 2014 limitation amounts for Education Credits. IPU 15U1107 issued 06-30-2015

(78) IRM 3.11.6.8.6.6(8), (10), (13), and (14) Updated 324C and 916C letter paragraphs. IPU 15U0158 issued 01-21-2015

(79) IRM 3.11.6.8.6.7(2) Updated 916C letter paragraphs. IPU 15U0158 issued 01-21-2015

(80) IRM 3.11.6.8.6.8(5) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(81) IRM 3.11.6.8.6.9(3) 2nd NOTE Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(82) IRM 3.11.6.8.6.10(2) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(83) IRM 3.11.6.8.6.10.1 Updated section for clarity and provided new instructions. IPU 15U0071 issued 01-08-2015

(84) IRM 3.11.6.8.6.10.1(3) Added website for qualifying vehicles with allowable credit amounts and removed note. IPU 15U1033 issued 06-16-2015

(85) IRM 3.11.6.8.6.10.1(6) caution and (8) Updated 324C letter paragraphs and delete blank tags. IPU 15U0158 issued 01-21-2015

(86) IRM 3.11.6.8.6.10.1(6) Added 8009-A correspondence procedures. IPU 15U1184 issued 07-17-2015

(87) IRM 3.11.6.8.7.1(3) Reorganized instructions for processing amended returns with 1099-Rs per SERP Feedback Control 201502089. IPU 15U0709 issued 04-17-2015

(88) IRM 3.11.6.8.7.1(6) Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(89) IRM 3.11.6.8.7.2(6) chart Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(90) IRM 3.11.6.8.7.2 Added chart clarifying instructions for SE Tax and ministers per SERP Feedback #201404495 and 201405316. IPU 15U0071 issued 01-08-2015

(91) IRM 3.11.6.8.8(5) Added instructions when there is a math error that would take a posted item below zero per SERP Feedback # 201404499. IPU 15U0071 issued 01-08-2015

(92) IRM 3.11.6.8.9(1) Added instructions to prevent unpostable condition. IPU 15U0200 issued 01-28-2015

(93) IRM 3.11.6.8.9(4) and (5) Updated 324C and 916C letter paragraphs. IPU 15U0158 issued 01-21-2015

(94) IRM 3.11.6.8.9.1 Added 2014 Maximum SS and RRTA data per SERP Feedback 201501796. IPU 15U0591 issued 03-30-2015

(95) IRM 3.11.6.8.9(5) Revised form line numbers and corrected spelling in bullet list. IPU 15U0071 issued 01-08-2015

(96) IRM 3.11.6.8.10.1(5) Corrected C-letter paragraphs in the chart. IPU 15U0071 issued 01-08-2015

(97) IRM 3.11.6.8.10.1(5) Corrected C-letter paragraphs in the chart per SERP Feedback Control 201503438. IPU 15U0998 issued 06-10-2015

(98) IRM 3.11.6.8.11.1(3) Added amounts for 2014 and EIC instructions per SERP Feedback # 201404498. IPU 15U0071 issued 01-08-2015

(99) IRM 3.11.6.8.11.2(1) Deleted caution message per SERP feedback # 201404498. IPU 15U0071 issued 01-08-2015

(100) IRM 3.11.6.8.11.3(1) note and (2) note Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(101) IRM 3.11.6.8.11.4(2) Clarified correspondence instructions on CP 09s. IPU 15U0200 issued 01-28-2015

(102) IRM 3.11.6.8.12(11) Added clarification to HSH per SERP feedback # 201404252. IPU 15U0071 issued 01-08-2015

(103) IRM 3.11.6.8.12(12) Added 1099 C to list of non-earned income types. IPU 15U0709 issued 04-17-2015

(104) IRM 3.11.6.8.13.1(2) NOTE Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(105) IRM 3.11.6.8.13.2(1) NOTE Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(106) IRM 3.11.6.8.13.3(6) Note Updated 324C letter paragraphs. IPU 15U0158 issued 01-21-2015

(107) IRM 3.11.6.8.13.8.3(2) Added Official Use Only. IPU 15U0272 issued 02-05-2015

(108) IRM 3.11.6.8.13.8.3.1(2) Reminder Added do not use a hold 3 or 4 on MFT 35 adjustments. IPU 15U0272 issued 02-05-2015

(109) IRM 3.11.6.8.13.8.3.1(4) Caution Added to use a post delay code of 1 on the adjustment when also performing a credit transfer. IPU 15U0272 issued 02-05-2015

(110) IRM 3.11.6.8.13.5(3) Deleted correspondence instructions and input link for Statute year correspondence. IPU 15U0200 issued 01-28-2015

(111) IRM 3.11.6.8.13.8 Add Affordable Care Act instructions - Overview. IPU 15U0071 issued 01-08-2015

(112) IRM 3.11.6.8.13.8.1 Added instructions for Coverage Checkbox. IPU 15U0071 issued 01-08-2015

(113) IRM 3.11.6.8.13.8.2 Added instructions for Premium Tax Credit (PTC). IPU 15U0071 issued 01-08-2015

(114) IRM 3.11.6.8.13.8.2(1) note Deleted broken link. IPU 15U0158 issued 01-21-2015

(115) IRM 3.11.6.8.13.8.2(5) bullet list Clarified conditions for routing to CIS/AM. IPU 15U0158 issued 01-21-2015

(116) IRM 3.11.6.8.13.8.2(5) Added instructions for routing or filing Form 1095–A. IPU 15U0786 issued 04-30-2015

(117) IRM 3.11.6.8.13.8.3 Added instructions for Shared Responsibility Payment - Overview. IPU 15U0071 issued 01-08-2015

(118) IRM 3.11.6.8.13.8.3 Corrected location of the Form 8965 worksheet. IPU 15U0591 issued 03-30-2015

(119) IRM 3.11.6.8.13.8.3.1 Added instructions for Adjusting the Shared Responsibility Payment (SRP). IPU 15U0071 issued 01-08-2015

(120) IRM 3.11.6.8.13.8.3.1(1) Added instructions not to correspond if worksheet is missing per SERP feedback 201500902. IPU 15U0350 issued 02-19-2015

(121) IRM 3.11.6.8.13.8.3.1(2) chart Deleted row with AUR routing instructions and removed AUR references. IPU 15U0200 issued 01-28-2015

(122) IRM 3.11.6.8.13.8.3.1(2) Revised instructions on partial adjustments and editorial changes. IPU 15U0591 issued 03-30-2015

(123) IRM 3.11.6.8.13.8.3.1(2) Added TC 241 is used to decrease the Shared Responsibility Payment. IPU 15U0428 issued 03-04-2015

(124) IRM 3.11.6.8.13.8.3.1(2) Added note about suspending cases when information from the original return has not posted to Masterfile. IPU 15U0891 issued 05-21-2015

(125) IRM 3.11.6.8.13.8.3.1(2) Note to input the Amended Claims Date on MFT 35 adjustments per SERP Feedback Control 201503310. IPU 15U0998 issued 06-10-2015

(126) IRM 3.11.6.8.13.8.3.1(4) Clarified the PDC belongs on the MFT 35 adjustment per SERP Feedback Control 201501543. IPU 15U0505 issued 03-18-2015

(127) IRM 3.11.6.8.13.8.4 Added instructions for Form 8965, Health Coverage Exemptions. IPU 15U0071 issued 01-08-2015

(128) IRM 3.11.6.8.13.8.5 Added instructions for Reporting an Exemption from the SRP. IPU 15U0071 issued 01-08-2015

(129) IRM 3.11.6.8.13.8.5(2) Corrected Form 8965 indicators per SERP Feedback Control 201501811. IPU 15U0591 issued 03-30-2015

(130) IRM 3.11.6.8.13.8.5(6) Added note about SRP exemptions with invalid SSNs during original processing. IPU 15U0875 issued 05-18-2015

(131) IRM 3.11.6.8.13.8.5(6) Editorial change. IPU 15U0891 issued 05-21-2015

(132) IRM 3.11.6.8.14(2) Updated FMS CD field to new terminology BFS CD per SERP Feedback Control 201501144. IPU 15U0428 issued 03-04-2015

(133) IRM 3.11.6.8.14(4) Updated paragraphs for 474C letter. IPU 15U0158 issued 01-21-2015

(134) IRM 3.11.6.9(1) Clarified directions on when you can prepare a dummy form/schedule per SERP Feedback Control 201501116. IPU 15U0428 issued 03-04-2015

(135) IRM 3.11.6.9(1) Added language for correspondence procedures. IPU 15U0071 issued 01-08-2015

(136) IRM 3.11.6.9(11) Clarified correspondence procedures when the amended return is not signed per SERP Feedback 201502886. IPU 15U0875 issued 05-18-2015

(137) IRM 3.11.6.9.1(3) Revised verbiage to include credit decrease(s). IPU 15U0071 issued 01-08-2015

(138) IRM 3.11.6.9.1(4) Revised verbiage to include credit decrease(s). IPU 15U0071 issued 01-08-2015

(139) IRM 3.11.6.9.2(4) and (5) Updated 916C letter paragraphs. IPU 15U0158 issued 01-21-2015

(140) IRM 3.11.6.9.3(1) and (2) Updated correspondence paragraphs. IPU 15U0158 issued 01-21-2015

(141) IRM 3.11.6.9.4(2)a and (3)a Changed fill in for 4364C letter. IPU 15U0071 issued 01-08-2015

(142) IRM 3.11.6.9.8 Changed a note into a paragraph providing instructions for when correct address is found. IPU 15U0071 issued 01-08-2015

(143) IRM 3.11.6.9.8(3) & (4) Corrected markup and clarified 916C with enclosure. IPU 15U0200 issued 01-28-2015

(144) IRM 3.11.6.9.9(1) Updated/Clarified instructions and If/Then chart. IPU 15U0350 issued 02-19-2015

(145) IRM 3.11.6.9.10(2) Updated 916C letter paragraphs. IPU 15U0158 issued 01-21-2015

(146) IRM 3.11.6.10 Letter paragraph changes. IPU 15U0200 issued 01-28-2015

(147) IRM 3.11.6.10(1), note, and chart Update 324C letter paragraphs and narratives. Deleted duplicate row 42a of chart. IPU 15U0158 issued 01-21-2015

(148) IRM 3.11.6.10(1) chart Updated 324C letter paragraphs and elsewhere throughout the IRM. IPU 15U1479 issued on 10-7-2015.

(149) IRM 3.11.6.10(1) Throughout the IRM, changed Form 8009-A paragraphs due to new Form 8009-A rev. Sept. 2015. IPU 15U1432 issued 09-24-2015

(150) IRM 3.11.6.11 Added instructions for routing cases with Victim of Terrorist Action issues, PTCX working trail. IPU 15U0200 issued 01-28-2015

(151) IRM 3.11.6.11 Updated the Stop number for F3949–A routing per SERP Feedback # 201500363. IPU 15U0200 issued 01-28-2015

(152) IRM 3.11.6.11 Added Affordable Care Act Form routing instructions, corrected links and clarified HSH. IPU 15U0071 issued 01-08-2015

(153) IRM 3.11.6.11(2) Clarified routing instructions. IPU 15U0158 issued 01-21-2015

(154) IRM 3.11.6.11(3) chart Added routing instructions for court cases involving the USDA. IPU 15U0158 issued 01-21-2015

(155) IRM 3.11.6.11(3) Added routing instructions for amended returns notated Tribal General Welfare Exclusion Act of 2014. IPU 15U0709 issued 04-17-2015

(156) IRM 3.11.6.11(3) Corrected title of F2210F, added Form 2210 and deleted duplicated entries per SERP Feedback 201502914. IPU 15U0875 issued 05-18-2015

(157) IRM 3.11.6.11(3) Updated KITA routing instructions. IPU 15U1432 issued 09-24-2015

(158) IRM 3.11.6.11(3)(F) Clarified when to route or work cases with P- Freeze. IPU 15U0875 issued 05-18-2015

(159) IRM 3.11.6.11(3) Removed reference to Disaster Claims under Safe Harbor per SERP Feedback Control 201503368 and mailing all documentation included with W-7 applications per SERP Feedback Control 201503282. IPU 15U0998 issued 06-10-2015

(160) IRM 3.11.6.11(3) Added Form 1095–A routing instructions. IPU 15U0786 issued 04-30-2015

(161) IRM 3.11.6.11(3) Clarified Form 3949 and Form 3949–A routing instructions per SERP Feedback Control 201501145. IPU 15U0428 issued 03-04-2015

(162) IRM 3.11.6.11(3) Added Self-Created Goodwill Claim routing instructions. IPU 15U1184 issued 07-17-2015

(163) IRM 3.11.6.11(3) Added/updated routing instructions for TEFRA, Goodwill, FTHBC and KITA cases. IPU 15U1269 issued 08-06-2015

(164) IRM 3.11.6-1 Exhibit update 2014 line numbers. IPU 15U0071 issued 01-08-2015

(165) IRM 3.11.6-2 Exhibit update 2014 line numbers. IPU 15U0071 issued 01-08-2015

(166) IRM 3.11.6-3 Exhibit update 2014 line numbers. IPU 15U0071 issued 01-08-2015

(167) Exhibit 3.11.6-3 Update line numbers 23 and 34 with titles and reason codes. IPU 15U0200 issued 01-28-2015

(168) Exhibit 3.11.6-3 Remove blank rows. IPU 15U0158 issued 01-21-2015

(169) IRM 3.11.6-6 Exhibit update with ACA terminology. IPU 15U0071 issued 01-08-2015

Effect on Other Documents

IRM 3.11.6, Data Processing (DP) Tax Adjustments, dated October 12, 2014 (effective January 1, 2015), is superseded. This IRM incorporates the following IRM Procedural Updates (IPUs), issued between October 23, 2014 through October 7, 2015: 15U0158, 15U0200, 15U0272, 15U0350, 15U0428, 15U0505, 15U0591, 15U0709, 15U0786, 15U0858, 15U0875, 15U0891, 15U0998, 15U1033, 15U1107 and 15U1479.

Audience

Wage and Investment Submission Processing Tax Examiners

Effective Date

(01-01-2016)


Paul J. Mamo
Director, Submission Processing
Wage and Investment

3.11.6.1  (01-01-2016)
Submission Processing (SP) Returns and Document Analysis Overview

  1. Internal Revenue Manual (IRM) 3.11.6 covers Form 1040X, CP 08, 09 and CP 27 processing procedures for Integrated Data Retrieval System (IDRS) and Integrated Submission and Remittance Processing (ISRP) input by Submission Processing (SP).

  2. This section provides instructions for:

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

    • Computer Paragraph (CP) 08, CP 09 and CP 27 Notices

  3. The following subsections cover:

    • General Information for Submission Processing Returns and Document Analysis Overview

    • Controlling of 1040X cases on IDRS and input of the TC 971 AC 120

    • Preliminary Review of Form 1040X

    • Sorting, Routing, and Priority Processing

    • Screening Criteria for Processable Return

    • Form 1040X Processed through ISRP Input

    • Processing Form 1040X Using IDRS for Input of Adjustment

    • Command Codes DUPED and DDBCK

    • Specific Individual Master File (IMF) Adjustments

    • Correspondence Procedures

    • CP Notices

  4. References to the Integrated Automation Technologies (IAT) xClaim tool functionality are not intended to be exhaustive or complete. Refer to xClaim training and local procedures for more complete information about the functionality and use of this tool. Use xClaim, when available, to input adjustments.

    Note:

    IRM instructions will take precedence over any instructions/direction xClaim provides, such as red boxes.

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

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

3.11.6.1.1  (01-01-2016)
General Form 1040X Information

  1. An individual taxpayer may file an Amended US Individual Income Tax Return to correct Forms 1040, 1040A, 1040EZ or a 1040-NR. Taxpayers may add, delete, update, or change tax information reported on their original tax return or amounts previously adjusted by the IRS.

  2. When present on Form 1040X, Column A is used to report amounts originally claimed by the taxpayer, amounts adjusted by the IRS (math error on original return), or amounts adjusted from a previously filed Form 1040X for the same tax period.

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

  4. The Correct Amount column of the Form 1040X, Column C, is used to show amended figures or to figure the amounts reported in Columns A and B when these columns are present:

    1. Adding increases in Column B to Column A.

    2. Subtracting decreases in Column B from Column A.

    3. No change, entering the amount from Column A.

  5. The operational instructions in this IRM will determine if the adjustment request can be made in Submission Processing or if it must be routed to another area or function. Returns which can be adjusted in Submission Processing (commonly referred to as "workable" ) are either input on-line using IDRS or sent to ISRP for input.

  6. The general sequence you will follow is:

    1. Determine if route out criteria is met.

    2. Determine if the claim is complete.

    3. Determine if the claim is allowable

    4. Determine if the claim is processable.

  7. If a taxpayer files an amended Form 1040 series, Individual Income Tax Return, in lieu of a Form 1040X, you must determine if it is an original, duplicate, or amended return. If an original return, route to Receipt and Control for processing under the correct Program Code. Refer to IRM 3.11.6.5.5 for duplicate or IRM 3.11.6.5.4" amended" procedures.

  8. Form 1040X and CP notices are to be processed within 20 calendar days from the IRS received date (day one) to the date the document is delivered to the Corresponding Imaging System (CIS) Unit (ending day) or input of a TC 29X. See IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates. During the peak period the 20 day time frame will be expanded to 30 days. Peak period is defined as March 1st through June 30th.

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

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

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

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

      Note:

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

      Exception:

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

  10. The correspondence procedures throughout the IRM do not address every scenario. Use of Correspondex, available on Servicewide Electronic Research Program (SERP), is helpful in accommodating different scenarios that may occur. If unable to determine the correct correspondence procedure consult your manager or lead.

  11. Do not input an adjustment with CC REQ54 or CC ENREQ on an account that will be routed or when returning the claim to the taxpayer unless otherwise instructed by a specific section.

  12. The following link will take you to a list of acronyms and their definitions: Acronym Database

3.11.6.1.1.1  (01-01-2016)
CP Notices

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

    Note:

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

  2. Generally, a completed CP notice is considered an informal claim. However, if the taxpayer returns the CP notice indicating he/she is not eligible for the specific credit (no other issues involved), a reply is not necessary. Destroy as classified waste per local procedures. Form 1040X procedures are to be applied to CP 08, 09, and 27 notices, as they are considered a Form 1040X.

    Exception:

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

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

    Note:

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

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

    Note:

    CP08, CP09 or CP27 notice with a received date after the RSED should be worked following procedures in the If/Then chart IRM 3.11.6.3.3(11) boxes 8, 9 or 11.

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

    Note:

    If the taxpayer response to Form 8009-A is still incomplete, send the 916C letter refer to IRM 3.11.6.9.10.

  6. Do not include an amended claims date on CP notice adjustments. Do not input a TC 971 AC 270 when corresponding on CP notices.

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

    Exception:

    If there is a previously posted adjustment see paragraph 9 below.

  8. If the taxpayer alters the address on a CP notice and an address change can be made per IRM 3.11.6.6.1, then use CC INCHG to update the taxpayer address.

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

3.11.6.1.2  (01-01-2016)
General Instructions

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

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

  3. Follow local procedures for routing to other functions.

3.11.6.1.2.1  (01-01-2016)
IRM Deviations

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

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

3.11.6.1.2.2  (01-01-2016)
Controlling Cases on IDRS

  1. Submission Processing will control ALL amended returns received in the 1040X teams on IDRS within five days of receipt. The purpose of this initiative is to enhance the tracking and recording of inventory within Submission Processing. This will also allow the Corporate inventory of Form 1040X to be tracked and analyzed from the enterprise level.

    Exception:

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

  2. An IDRS control base and a TC 971 Action Code (AC) 120 are required to be input to further identify which processing area has the case in possession. If the control base and/or TC 971 AC 120 is not input correctly by xClaim, then the TE should manually input for the current return.

    Note:

    AC 120 allows Taxpayers to find the status of their amended return using the Where's My Amended Return (WMAR) program.

  3. The process of controlling 1040X cases and the ensuing TC 971 AC 120 will be accomplished with these methods:

    1. SP clerical function using a GII Batch Control Tool (IAT) will control cases on IDRS. The IDRS numbers used will be group/team IDRS numbers followed by 00000 (see paragraph 5). In addition to the control base the tool will input a TC 971 AC 120. The Category will be "XRET" and the Activity will read "SPX-00005" the number 00005 standing for the SP batch number.

    2. In the event the SP tax examiner receives an uncontrolled case, the tax examiner will process the case and the ensuing adjustment action will open and close an IDRS control base under the TE’s IDRS number with a Category of “XRET”. The xClaim tool will input a TC 971 AC 120 as part of the process.

      Note:

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

    3. In the event the SP tax examiner receives an uncontrolled case and determines it needs to be returned to the taxpayer or to go to another area. Using xClaim the TE will have the tool open a control case Category "XRET" and close a control base changing the Category to "MISC" and the tax examiner should input a TC 971 AC 120 on the account. The tax examiner will route as normal.

    4. SP tax examiner receives a case controlled to a group number (06XXX00000) and determines it is SP criteria. xClaim will take over the control base under the TE’s IDRS number. TE will process case which will open/close a control base with a Category "XRET" . The Activity will state "SPX-00005."

      Note:

      When xClaim is not available you must manually recontrol the case.

    5. SP tax examiner receives a case controlled to a group number (06XXX00000) and determines it is not SP criteria or needs to be returned to the taxpayer. xClaim will take over the control base under TE's IDRS number and will close the control base changing Category to "MISC" .

    6. On cases that need to be suspended, the tax examiner will re-assign the open control from the suspense queue to their IDRS number and change the activity as appropriate based on the type of suspense.

    7. If the case is determined to be classified waste and is uncontrolled. Treat as classified waste and do not open and close a control base or input an TC 971 AC 120.

    8. When inputting a partial adjustment on a return that will be routed, the xClaim tool will close the open control to XRET. It is not necessary to open and close a control to MISC before routing.

    Note:

    When routing is required the Category of the case needs to be changed to "MISC" in order to prevent IDRS from recording the case as a closure.

    Note:

    If the case is controlled to the wrong taxpayer, MFT or tax year then close the incorrect base to "MISC" and work the case as uncontrolled. Correct other case control input errors using IAT ACTON before completing your case action. This would include incorrect IRS Received Dates and incorrect service center IDRS numbers.

  4. The group/teams numbers used by the SP clerical staff to control 1040X cases on IDRS are listed below:

    Campus IDRS Group/Team Numbers
    Austin 06224, 06233, 06238
    Fresno 10215, 10216, 10217
    Kansas City 09215, 09216, 09217

    Note:

    As these are group numbers the claims have not been assigned to a specific tax examiner in Submission Processing. These are 1040X claims controlled to the 1040X area in SP. If you do receive phone calls from other areas concerning controlled cases the caller should be referred to the headquarter 1040X analyst.

3.11.6.1.2.3  (01-01-2016)
When a Working Trail is Required

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

    1. You detach a form, schedule, or notice per IRM instruction (i.e., Form 2848 POA, or a Form 8821 (TIA to CAF)).

    2. You prepare a form.

      Example:

      Form 4442, payment plan request, Presidential Election Campaign Fund (PECF) dummy return.

    3. Routing Form 1040X as instructed per local procedures (CB/CF, CIS, etc.).

    4. Any action trail required by local procedures.

  2. Edit the following on the Form 1040X:

    1. Detached item description - (i.e., Detached Form 2848).

    2. Routing destination.

    3. Date or action trail if required by local procedures.

  3. Edit the following on the detached form, schedule, or notice, if the information is not present on the document:

    1. Taxpayer's name.

    2. Taxpayer's address.

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

    4. Received Date.

    5. Tax Year.

    6. Form 1040X.

    7. TE stamp

    8. Any action trail required by local procedures.

      Exception:

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

3.11.6.1.2.4  (01-01-2016)
Reversing an Erroneous Adjustment

  1. These manual instructions are intended for work leaders. xClaim has the capability of performing this same operation. The reversal button on the xClaim tool is not available until the tax adjustment is input and posted to the tax account. Once the adjustment posts the reversal button becomes active.

  2. In the course of an internal quality review occasions will arise where erroneous adjustments are identified. If the tax adjustment cannot be deleted a reversal of the adjustment must be made by the quality reviewer, lead or designated tax examiner. If the erroneous adjustment will generate an incorrect TC 846 the Lead or Manager should initiate a Refund Intercept when possible using IDRS Command Code (CC) NOREF to stop the refund. See Refund Intercept CC NOREF (IRM 3.11.6.1.2.5) for time frames and time constraints.

    Exception:

    Do not input a corrective adjustment for changes to reason codes, received date, or amended claims date.

    Exception:

    It is not necessary to input CC NOREF if a TC 846 is not generated or the TC 846 is for the correct amount. In these cases only input the corrective adjustment.

    Note:

    Correspond using a 324C letter if there is a missing signature, form/schedule/ or other issue. Suspend the return waiting for the reply. Input CC NOREF at the same time as issuing the correspondence, if necessary.

  3. When an account needs to be reversed, take the following actions to back out the erroneous adjustment.

    1. As a result of the incorrect adjustment reverse the affected portion of the tax, adjusted gross income, taxable income, self-employment tax, any credits, exemptions and federal withholding. Below is a listing of the appropriate transaction and reference codes.

    • Adjusted Gross Income will be reversed with a Item Reference Number (IRN) 888.

    • Taxable Income will be reversed with a IRN 886.

    • Tax will be reversed with a Transaction Code (TC) 29X. (Opposite of erroneous TC 29X)

    • Exemptions will be reversed with a IRN 887.

    • Withholding will be reversed with a IRN 806 or 807. Depending on the error to withholding.

    • Primary self-employment income will be reversed with IRN 878.

    • Secondary self-employment income will be reversed with IRN 879.

    • Self-employment tax will be reversed with IRN 889 in conjunction with the TC 29X.

    • Self-employment tax will be reversed with IRN 889 in conjunction with the TC 29X.

    • Include any necessary priority codes on the corrective adjustment. See IRM 3.11.6.6.7.3

    Note:

    Whenever reversing an adjustment on an account some of the transaction codes and the reference codes cited above will have a minus behind the money amounts. The Reference Code for Exemptions will have a minus behind the exemption number. TC 291 reverses tax and TC 807 reverses withholding: for other reversal codes especially credits see Document 6209 as they also have specific reversal codes.

    Example:


    •IRN 887 .02- (Deleting 2 exemptions)
    •IRN 888 28,467.00- (Reducing AGI)
    •IRN 886 7,654.00- (Reducing taxable income)

    Caution:

    Always verify the erroneous adjustment did not create an unpostable condition before reversing an adjustment. If an unpostable condition was created monitor the account until the adjustment unposts, then input the correct adjustment. Hold the return until the Form 4251 return Charge-out is received and match the return with the Form 4251.

    Note:

    Use Hold Code 4 to prevent incorrect refunds or notices from being issued. In certain cases the Hold Code 4 will not stop the refund and/or the notice, but should be input on all reversals regardless.

3.11.6.1.2.5  (01-01-2016)
Refund Intercept CC NOREF

  1. Effective January 1, 2012, with the implementation of CADE 2 processing for all IMF accounts, only CC NOREF, definer "P" can be used by authorized employees to stop a refund. See the charts below for CC NOREFP input time frames. Refunds on original returns can also be stopped by using CC NOREFP prior to the posting of the return on IDRS.

    Caution:

    If a TC 846 is showing on CC TXMOD/IMFOLT, the refund record has already been sent to Financial Management Services (FMS), and the refund cannot be stopped.

  2. CC NOREFP will resequence for 14 days for daily IMF accounts and, depending on the day of input, up to 20 days for weekly IMF accounts. Each day, CC NOREFP will look for a matching refund and, when a match is found, will stop the refund. If no match is found within these time frames, the CC NOREFP will be dropped from IMF processing.

  3. While an IDRS control base needs to be established for CC NOREFP, no systemic updates are received to indicate whether or not the input was successful at stopping the refund. Since the TC 846 will post on the module up to five business days before the TC 841, the account must be monitored for the TC 841 posting to determine if CC NOREFP was successful.

  4. The following chart is provided to clarify when CC NOREFP can be used to intercept a refund that will result from an adjustment input before 5:00 PM CT on an IMF WEEKLY account:

    Note:

    Most accounts worked in SP will be designated as WEEKLY accounts. See Exhibit 2.3.51-12, CC IMFOL Output Display - Entity, Line 14, for more information about the position of the Daily Eligible Indicator. The literals "00" indicate an account is not eligible for daily processing; "01-99" indicates an account is eligible for daily processing. Any TC 29X input with a money amount will cause the account to become weekly; whereas a TC 290 .00 will not change the existing status.

    Transaction Input TERUP Review CCs Available From 5:00 AM CT on the following: CC NOREFP (until 9:00 PM CT) on the following: Adjustment Posts to MF on the following:
    Friday (Day 1) Friday (Day 1) Monday and until 5:00 PM CT Tuesday Thursday, week 1 (4 days after input of adjustment) Friday, week 1 (5 days after input)
    Monday (Day 2) Monday (Day 2) Tuesday and until 5:00 PM CT Wednesday Thursday, week 1 (3 days after input of Friday, week 1 (4 days after input)
    Tuesday (Day 3) Tuesday (Day 3) Wednesday and until 5:00 PM CT Thursday Thursday, week 2 (7 days after input of adjustment) Friday, week 2 (8 days after input of adjustment)
    Wednesday (Day 4) Wednesday (Day 4) Thursday and until 5:00 PM CT Friday Thursday, week 2 (6 days after input of adjustment) Friday, week 2 (7 days after input of adjustment)
    Thursday (Day 5) Thursday (Day 5) Friday and until 5:00 PM CT Monday Thursday, week 2 (5 days after input of adjustment) Friday, week 2 (6 days after input of adjustment)

    Example:

    If an adjustment is input on Friday, the adjustment can be deleted by CC TERUP until 5:00 PM CT. After that, REVIEW command codes can be used to review/delete the adjustment starting at 5:00 AM CT on Monday and ending at 5:00 PM CT on Tuesday. After 5:00 PM CT on Tuesday and until 9:00 PM CT on Thursday, CC NOREFP can be used to stop a refund. After 9:00 PM CT on Thursday the refund can no longer be stopped.

  5. The following chart is provided to clarify when CC NOREFP can be used to stop a refund resulting from a transaction (e.g., TC 290 .00, TC 571, etc.) input before 5:00 PM CT on an IMF DAILY account:

    Transaction Input CC TERUP Review CCs Available From 5:00 AM CT on the following: CC NOREFP (until 8 PM CT) on the following: Transaction posts to IMF on the following
    Friday Friday Monday and until 5:00 PM CT Tuesday Wednesday Thursday
    Monday Monday Tuesday and until 5:00 PM CT Wednesday Thursday

    Exception:

    available until 9:00 PM CT

    Friday
    Tuesday Tuesday Wednesday and until 5:00 PM CT Friday Monday
    Wednesday Wednesday Thursday and until 5:00 PM CT Friday Monday Tuesday
    Thursday Thursday Friday and until 5:00 PM CT Monday Tuesday Wednesday
  6. With Taxpayer Information File (TIF) centralization, it is no longer necessary to contact the issuing center or your local Notice Review to stop the refund. Input of CC NOREFP will stop a refund regardless of the Campus and will be evident when viewing the account. Use the Command Code (CC) NOREFP to intercept erroneous refunds and update the Refund Information File (RFIF). Refer to IRM 2.4.37, CC NOREF Overview for a complete description and input requirements.

  7. Employees stopping the refund will maintain an open control on all cases where a CC NOREF is input. The employee places the open control in B or M status (monitoring). The case can be closed when confirmation is received that the refund has been stopped.

  8. The controlling employee must monitor for the TC 841. When the TC 841 posts to the account, take the necessary action to release the P Freeze and close the control base. A P freeze will be released by the input of a TC 29X.

    Exception:

    If the adjustment cannot be processed by SP, such as a manual refund, then close the open control and forward the case to the appropriate area. Leave a history on CC TXMOD using CC ACTON.

  9. If the TC 841 does not post within 4-6 cycles research for other adjustments, unpostable condition or erroneous refund. If an erroneous refund has been generated forward to CIS/AM.

  10. If CC NOREFP is being used, Form 12783 Request for Notice Pulls/Voids: Master File or IDRS must be hand walked to Notice Review to stop the generated notice to the taxpayer. This must be done by Thursday, 8:00 PM CT in the same cycle of the CC NOREFP input.

3.11.6.1.3  (01-01-2016)
Blocking Series/Routing to Files

  1. Code and Edit processes Form 1040X and CP Notice adjustments in a unique blocking series based on the nature of the claim. Use blocking series 05 for processable Forms 1040X and CP Notices unless otherwise directed.

  2. The Control Unit is charged with the responsibility of associating IDRS Source Documents with their related IDRS Transaction Records (CC ADJ54 adjustments) that were input on taxpayer accounts. It is vital for the unit to receive source documents in a timely manner. Follow local procedures for routing the source documents to Files within the guidelines in IRM 3.5.61, Files Management and Services.

  3. When routing a document to files that will not be associated with a previously posted adjustment and no adjustment is being made to the taxpayer's account, input a TC 290 .00 with the appropriate reason code(s) if any.

  4. When routing a document to be associated with a previously posted adjustment or the original filing, use Form 9856 or follow local procedures.

    Note:

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

3.11.6.1.4  (01-01-2016)
Related IRMs

  1. Additional information regarding amended returns may be found in the following IRMs.

    • IRM 3.10.72, Extracting, Sorting, and Numbering

    • IRM 3.11.3, Individual Income Tax Returns

    • IRM 3.24.3, Individual Income Tax Returns ISRP System

    • IRM 21, Customer Account Services

    • IRM 2.4.1, IDRS Terminal Input

    • IRM 3.13.5, IMF Account Numbers

    • IRM 3.12.37.23, Correspondence Manual

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

  3. Document 6209, IRS Processing Codes and Information, 1040 attachment guide, Tax Form and Instructions (accessible through the IRS Home Page), and Publication 17 are valuable resources for obtaining additional information and resolving questions.

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

3.11.6.1.5  (01-01-2016)
Inquiries from IRS Employees

  1. IRS employees are taxpayers and are entitled to the same security measures to their tax account information in the same manner as other taxpayers who call, write, or visit us.

  2. There are special procedures that you must follow to protect the "taxpayer employee" , as well as to protect yourself. If you receive or initiate telephone contact, or are assigned a case of an IRS employee, take the following actions:

    1. If you do not know the employee, work the case and complete Form 11377.

      Note:

      Completing the Form 11377, Taxpayer Data Access, is voluntary and should be done at the discretion of the employee. The purpose of the form is to document the reason(s) tax return and/or information was accessed by you when the taxpayer’s case was not assigned directly to you.

    2. If you know the employee, refer the case to your manager.

  3. If your unit has a designated employee who handles all cases from IRS employees, refer these cases to that employee.

  4. IRS Employees can be identified from the IRS-EMP-CD on CC TXMOD and on CC IMFOLT.

    • IRS EMPLOYEE: P - Primary taxpayer.

    • IRS EMPLOYEE: S - Secondary taxpayer.

    • IRS EMPLOYEE: B - Both taxpayers.

3.11.6.2  (01-01-2016)
Preliminary Review of Form 1040X/Amended Return

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

    • Taxpayer Identification Number

    • Tax Period

    • Received Date

    • Control base

    • PECF Requests

    • Discovered Remittance

    • TC 150 posted

3.11.6.2.1  (01-01-2016)
Taxpayer Identification Number

  1. In order to process a return, you must have the TIN. The TIN is the Social Security Number (SSN) or IRS Individual Taxpayer Identification Number (ITIN) for IMF accounts.

  2. An ITIN is a nine-digit number issued by the IRS to individuals who are required for U.S. tax purposes to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a SSN issued by the Social Security Administration (SSA). The ITIN will be in the format of a SSN and begin with the number 9. The fourth and fifth numbers will range from:

    • 50-65

    • 70-88

    • 90–92

    • 94-99

      Note:

      89 and 93 are not used as fourth and fifth numbers for ITINs but are reserved for other programs.

  3. The ITIN is only for federal tax purposes. The ITIN does not:

    • Qualify the applicant for Earned Income Credit (EIC)

    • Make inference to the applicant's immigration status

    • Qualify the applicant’s right to work in the United States

  4. If the Primary TIN (P-TIN) is missing, incorrect, or illegible or secondary TIN (S-TIN) on a joint return, research IDRS (CC NAMEI or CC NAMES), attached correspondence, cross reference with the spouse (CC ) and/or dependents using CC DUPED or CC DDBKD. If you have exhausted all resources and are still unable to determine the P-TIN and/or S-TIN, correspond per IRM 3.11.6.9 using Form 8009-A, box 11 (do not input TC 971 AC 270 if unable to determine primary TIN) for all claims.

    Note:

    If found, edit to the appropriate field on the Form 1040X or Form 1040 series.

    Note:

    See IRM 3.11.6.5.1 for researching to find the P-TIN.

  5. If the taxpayer files an amended return and the primary's or secondary's account is set up on the invalid segment of Master File (which requires an asterisk after the TIN (000-00-0000*)), refer as CIS/AM.

    Exception:

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

    Note:

    A pound sign after the TIN (000-00-0000#) is an indication of a newly assigned TIN. Do not treat as an invalid TIN.

  6. Refer to CIS/AM, if the case involves a merging or re-sequencing of accounts.

    Example:


    (a) If the primary or secondary taxpayer, is changing from an ITIN/IRSN to a SSN then attach an CC IMFOLT print showing the taxpayer filed under a different TIN.
    (b) Filing status change to Married Filing Jointly (MFJ) where both taxpayers have already filed.

  7. Refer to CIS/AM, if the account has been merged/resequenced and an update to CC DDBCK is required.

  8. If the taxpayer is filing MFJ and there is no TC 150 posted for the primary's TIN, research the secondary's TIN for a TC 150. TC 594 may be present. See IRM 3.11.6.5.1

3.11.6.2.2  (01-01-2016)
Tax Period

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

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

  3. If you cannot determine the tax period through IDRS research, correspond unless return is being routed to another function. Correspond per IRM 3.11.6.9 using Form 8009-A, box 10.

    Note:

    Do not input TC 971 AC 270.

  4. If the taxpayer tries to submit an amended return for multiple tax periods on a single amended return, send the return back to the taxpayer. Use Form 8009-A box 3 to inform the taxpayer they must submit a separate amended return for each specific tax period that they are trying to amend. Input a TC 971 AC 270 on the tax year of your assigned case.

3.11.6.2.3  (01-01-2016)
Superseding Returns

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

    1. An amended (Form 1040X) or corrected (duplicate) return filed before the due date or the extended due date (posted TC 460) is a superseding return.

    2. Correspondence postmarked on or before the due date or extended due date (posted TC 460), requesting changes to tax returns, is processed as superseding information.

    Note:

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

3.11.6.2.4  (01-01-2016)
Received Date

  1. Every Form 1040X should be stamped with a processing center Received Date stamp. If the Received Date stamp is missing from the front page, or illegible, but is found elsewhere in the return packet, edit the date to the front of the return in MMDDYY or MMDDYYYY format in the blank space above Line 1.

    Note:

    Other areas within the IRS may date stamp the return to indicate when the return arrived in that area (e.g., Statute, Adjustments, etc.), do not use that date stamp as the Received Date.

  2. Honor received dates that are edited in green ink on current year Forms 1040X received with payments as the return received date to be used for processing.

  3. If the Received Date stamp is not found or is obviously incorrect, edit the Received Date based on the order of precedence below in the same format and location as stated in (1) above.

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

    2. IRS Scamps date.

    3. IRS field office date stamp.

    4. IRS field office with a handwritten Received Date on a secured return. Must have "received" and a date with a signature and title of the authoring employee.

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

    6. Current Date.

  4. Use the following chart when there are multiple received dates stamped and/or edited on the return:

    If And Then
    Adjusting or routing an amended return Refund or Net Zero Return Circle all but the latest received date.

    Example:

    The original received date is March 5, 2014, and the latest received date is April 4, 2014. Edit 040414 as the received date. Circle March 5, 2014.

    Balance Due Return Circle all but the earliest received date.

    Example:

    One received date is March 5, 2014, the other received date is April 4, 2014. Circle April 4, 2014.

    Corresponding on a Refund or Net Zero Return Circle all received dates.
    Balance Due Return Circle all but the earliest received dates.
  5. Input the received date of Form 1040X as the received date on IDRS.

    Exception:

    See IRM 3.11.6.3.3 for statute returns.

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

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

    2. S - Allows current date and the Refund Statute Control Date (RSCD) to be later than the Refund Statue Expiration Date (RSED). Refer to IRM 3.11.6.3.3.

3.11.6.2.5  (01-01-2016)
Processing Presidential Election Campaign Fund Requests

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

  2. A PECF request can only be processed for the current tax year and one tax year prior; and if there is a tax change on Line 11 of Form 1040X.

    Exception:

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

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

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

    1. "Dummy PECF" in the top margin.

    2. Tax period.

    3. Primary name control.

    4. Primary SSN and Secondary SSN.

    5. Filing Status Code box checked.

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

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

    8. Received date in MMDDYY format in the center portion.

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

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

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

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

3.11.6.2.6  (01-01-2014)
Discovered Remittances

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

    Note:

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

    Exception:

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

  2. When a remittance is discovered, immediately turn the remittance over to your Manager or Lead.

    Note:

    If your unit has a designated employee who handles all discovered remittances, refer to the designated employee.

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

    2. If a payment voucher is not attached, turn in a copy of the front page of the return with the remittance.

    3. If a "loose" remittance is discovered (not associated with a return), complete Form 3244. Turn in the remittance with Form 3244 and continue processing the return.

  3. Edit the Received Date if missing onto either the discovered remittance, Form 1040-V, or the return.

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

  5. For additional information on discovered remittances, see IRM 3.8.46, Discovered Remittances.

3.11.6.3  (01-01-2016)
Sorting, Routing, and Priority Processing

  1. During the course of processing cases the tax examiner will identify all documents for "route-out" criteria by reviewing the return for attachments, issues, correspondence required, Statute, and researching IDRS for transactions that require routing to another function. Sorting into current and prior years is not necessary. Keep all related tax years together if possible. Notate on Form 1040X any action taken, such as routing to Statute, detached Form 2848 to Centralized Authorization File (CAF), etc.

    Exception:

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

  2. Identify all possible route out criteria, then route to the highest priority as stated in paragraph 3 below.

  3. The priority order for routing is as follows unless a specific IRM reference provides an exception:

    1. Disaster Claims.

    2. Carryback or Carryforward Claims (CIS/AM).

    3. Statute.

    4. Taxpayer Advocate Service (TAS).

    5. Open AIMS Cases/Exam.

    6. Scheme Development Center/Frivolous.

    7. Category A (Cat A)

    8. Underreporter (AUR/URP).

    9. International.

    10. Premium Tax Credit (PTCX).

    11. Adjustment Function Criteria (CIS/AM).

    12. Cases controlled to Accounts Management route to local CIS/AM.

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

    14. All other claims.

      Exception:

      Follow Troubled Asset Relief Program, TARP, procedures prior to routing to areas other than Exam/Cat A.

  4. If the TC 150 has not posted, suspend the return. Do not route until a TC 150 is posted. See IRM 3.11.6.5.2. If the taxpayer submits a Form 1040 series return with no Form 1040X attached and there is no TC 150, see IRM 3.11.6.5.4.

  5. The tax examiners will screen for cases meeting Cat A criteria for the examination department. See IRM 3.11.6.3.5

  6. See IRM 3.11.6.3.24.1 for TC 971 and Action Codes and routing destination for specific items. Leave a working trail in the left margin indicating the destination or detached item as an audit/working trail, such as "To Statute" , "Form 2848 detached" , etc. See IRM 3.11.6.1.2.3 Follow local procedures.

  7. See IRM 3.11.6.2.5 for editing instructions for ISRP input of "Dummy PECF" instructions.

  8. Always "Hand carry" statute returns to the area following local procedures.

  9. Follow IDRS screening procedures for sorting and routing returns or correspondence to another function. For Carryback/Carryforward claims, Disaster Claims, Injured Spouse, Innocent Spouse, Statute returns, etc., follow local agreements for routing to CIS/AM (e.g., if manual input of TC 971 and additional Action Codes, Category Codes, etc. is required).

3.11.6.3.1  (01-01-2016)
Disaster Claims

  1. Taxpayers who live in an area for which the government issues a Federal "Declaration of Emergency or Major disaster" may file disaster claims. The IRS may place a -O/-S freeze on the module for the zip codes of the affected areas to indicate the taxpayer resides in a disaster area. The -O/-S freeze is only an indicator that the taxpayer resides in a disaster area and does not necessarily mean the taxpayer is filing a disaster claim. Other indications of returns meeting Disaster routing includes:

    • P.L. 109-7, Proper Treatment of Certain Disaster Mitigation Payments.

    • Flood Assistance Mitigation Program (FMA).

    • Pre-Disaster Mitigation Program (PDM).

    • Hazard Mitigation Grant Program (HMGP).

    Note:

    The names and locations of the designated Disaster areas are posted on SERP under the "Who/Where" tab, then the "Disaster Declarations/FEMA" link.

  2. A disaster claim is filed using Form 4684, Casualty and Theft Loss, and is reported in addition to the standard deduction or on Schedule A. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

3.11.6.3.1.1  (01-01-2016)
Disaster Expedite

  1. All documents that meet the specified criteria to be routed or forwarded to another function to work (i.e., Cat A, Statutes, Underreporter, CIS/AM, etc.) need to remain separate for each area under a routing sheet indicating "Disaster -- Expedite Processing" .

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

  3. If there are additional prior year Forms 1040X claiming the carryback loss from the casualty, expedite all returns to CIS/AM.

    Note:

    This is not a carryback/carry forward claim issue.

3.11.6.3.1.2  (01-01-2016)
Disaster Correspondence

  1. Do not correspond for missing forms or schedules on Disaster claims, unless there is not an explanation for a substantial amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . If unsure about the claim, consult your Manager or Lead.

    Note:

    If the amended return has disaster freeze codes present, but the Form 1040X is not claiming a disaster loss, you may correspond if additional information is required to process the claim following normal correspondence procedures.

  2. If a Disaster claim is missing a signature (refund or balance due return), correspond using a 324C letter. Do not mail the return back to the taxpayer. Suspend the return until you secure a signature only on refund returns.

    1. If a reply is received within 45 days, continue processing the return and input under Blocking Series 05.

    2. If no reply is received after 45 days, return the entire claim to the taxpayer using a 916C letter, paragraphs B, F, R, S, Z, 7. See IRM 3.11.6.9.10 for fill in paragraphs. Essentially, this tells the taxpayer we cannot process the claim and they will now be required to file a new claim with the required information.

3.11.6.3.1.3  (01-01-2016)
When a Disaster Claim Can Be Filed

  1. Taxpayers may file a disaster claim in either:

    • The same year that the disaster occurred or

    • The year immediately preceding the year in which the disaster occurred

  2. To file a disaster claim in the preceding tax year in which the disaster occurred, the claim must be filed by the later of the following due dates shown in the Disaster Timeliness Chart below.

    1040X Filed For Disaster Occurred Processable If Received By
        Normal Due Date w/Extension (TC 460)
    2014 2015 04-15-2016 10-15-2016
    2014 04-15-2018
    2013 2014 04-15-2015 10-15-2015
    2013 04-15-2017
    2012 2013 04-15-2014 10-15-2014
    2012 04-15-2016
    2011 2012 04-15-2013 10-15-2013
    2011 04-15-2015

    Example:

    A disaster loss that occurred in 2013 that is being claimed on a 2012 return has until April 15, 2014 (without an extension) or October 15, 2014 (with an extension) to be considered timely filed.

  3. If the claim is filed late, expedite to CIS/AM.

3.11.6.3.1.4  (01-01-2016)
Processing a Disaster Claim (-O/-S Freeze)

  1. To process a Disaster claim, check CC TXMOD for a TC 150 and -O/-S Freeze on the account. If there is:

    1. A -O/-S Freeze: Continue processing using Blocking Series 05.

      Note:

      If it is a refund return and the refund is to be issued to a name and/or address other than the one shown on Masterfile (e.g., temporary address, taxpayer representative, prior name, in care of name and address), do not continue processing. Keep separate under routing sheet indicating "Disaster" and expedite routing to CIS unit.

    2. No TC 150 posted: Expedite routing to CIS per local procedure.

    3. No -O/-S Freeze (Balance Due Only): Expedite routing to CIS per local procedure. Refund returns do not require a -O/-S Freeze to process the return.

    4. No -O/-S Freeze (Refund return): Continue processing the return. Use Blocking Series 05 when inputting the adjustment.

      Note:

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

  2. A new –S freeze has been added to IMF and BMF Master File processing for taxpayer accounts in Federally declared disaster areas. The new –S freeze will perform the same functions as the –O freeze for systemic penalty and interest relief. It will not provide compliance relief.

  3. An –S freeze may be systemically set on taxpayer’s accounts whose address of record is in the covered disaster area (set on IDRS by zip code with a TC 971 AC 688 and includes the Federal Emergency Management Agency (FEMA) Emergency Declaration Number).

  4. Affected taxpayers located outside the covered disaster area will be advised to call the toll free number 1-866-562-5227 to self-identify for disaster relief.

    Reminder:

    Taxpayers will no longer self-identify for disaster relief by writing a disaster designation in red at the top of their tax return.

  5. The –S freeze will ensure that interest and penalties are properly waived if the taxpayer files and/or pays within the prescribed time frame.

  6. The –S freeze is released when the current date is beyond the secondary date (disaster ending date) of the TC 971 AC 688.

3.11.6.3.2  (01-01-2016)
Carryback/Carryforward

  1. A Net Operating Loss (NOL) is created when certain deductions exceed income from all sources. These deductions must relate to a trade or business, work as an employee, or casualty or theft. A taxpayer who has an overpayment of tax as a result of a NOL, Net Capital Loss (NCL), Unused Credits, or a Claim-of-Right adjustment can file an application or claim for adjustment or refund. Any loss remaining after applying the NOL to preceding years lowers taxes in a later year.

    Note:

    Do not treat as a CB/CF return unless the conditions in (1) are met (e.g., the taxpayer may mark the carryback box of Form 1040X in error).

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

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

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

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

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

    • Carryover of an IRA.

    • Schedule A with an entry on Line 18 “Carryover from prior year” for Gifts to Charity.

  5. Indications that a taxpayer is trying to take a loss are as follows:

    • An attached 1040 has a change on Line 21 related to a NOL.

    • Net Section 1256 contract losses carried back. Treat these as a carryback claim if the taxpayer attaches Form 6781 with box D checked or if there is any mention these losses are being carried back.

    • IRC 1341(b)(1) or attaches a worksheet, which mentions Regulation 5.6.411.1(d)

      Note:

      A Claim of Right Adjustment can be entered on line 2 or line 15 of the 1040X or line 28 of Schedule A.

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

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

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

      Reminder:

      If none of the CB/CF issues are changing do not route to CB/CF (e.g., A NOL is indicated on Line 21 of Form 1040, but is not changing).

3.11.6.3.3  (01-01-2016)
Statute Cases

  1. Beginning January 1, 2016 all statute year returns (TY 2012 and prior) must be cleared by Statute prior to processing. If the case is not stamped with an indication it has been reviewed it should be routed to Statute.

    Note:

    The stamp must have the date it was reviewed and should be within 60 days of the date you are processing the claim, otherwise return the claim to Statute.

    Exception:

    If the case is a Substitute for Return (SFR), see IRM 3.11.6.3.16.

  2. The statute expiration date will vary based on specific aspects of each taxpayer’s account.

    • The Assessment Statute Expiration date (ASED) is the deadline on which the IRS is allowed to assess tax.

    • The Refund Statute Expiration Date (RSED) is the deadline on which the IRS is allowed to accept a claim for a refund by the taxpayer.

      Note:

      The ASED/RSED must be verified on CC TXMOD or CC IMFOLT.

  3. A Form 1040X is considered timely for a refund if it is postmarked on or before the RSED. A Form 1040X is considered timely for a tax increase/credit decrease if it is IRS received on or before the ASED; normally IDRS will not allow an assessment within 90 days of the ASED or if the ASED is expired. If the ASED is within 90 days of today’s date or is expired, then it must be routed to Statute. If a Form 1040X has any tax increase/credit decrease, within the 90 day period or the ASED is expired, then it must be routed to Statute even if the net effect of the return is a refund.

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

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

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

    Exception:

    If the return is stamped "statute cleared " send to Receipt and Control to be processed as an original. See IRM 3.11.6.5.4(2)a

    2 Statute year Form 1040X, an original Form 1040 and an "As Amended" Form 1040 are attached Follow the procedures in IRM 3.11.6.5.3 paragraph (5) except route to Statute Unit for Clearance. Input TC 971 AC 014.

    Exception:

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

    3 Statute year Form 1040X Send to Statute Unit for clearance. IRM 3.11.6.5.3 Convert Form 1040X to a Form 1040 or Form 6114. Input TC 971 AC 014 and CC ACTON history of "X21502STAT."

    Exception:

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

  6. If a Form 1040 is received in the 1040X unit and the Form 1040 is stamped Statute Cleared, research IDRS for a TC 150. If a TC 150 has posted, determine if it is a duplicate return or an amended return. If the return is a duplicate follow IRM 3.11.6.5.4 and if it is amended process per normal statute procedures.

3.11.6.3.3.1  (01-01-2016)
Processing Statute Cases

  1. Use the following Guidelines when processing a statute year case:

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

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

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

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

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

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

    3. Expedite/hand walk to CIS/AM per IRM 3.11.6.3.2.

    2. The case is within 90 days of the ASED or the ASED is expired. The case has a tax increase or a refundable credit decrease.
    • Input a TC 971 AC 014.

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

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

      Exception:

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

      Exception:

      Route to CIS/AM any case regardless of any tax increase/credit decrease involving any of the following:

    • A signed consent or request to extend the statute of limitations.

    • Filing status changes to MFJ.

    • Cases requiring a manual refund.

    • A statement of Financial disability.

    3. The Form 1040X received date is within 60 days prior to the ASED.

    Note:

    When the ASED is expired and the Form 1040X was timely filed, process the claim.

    There is a total tax decrease or a refundable credit increase of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and specific Cat A criteria does not exist for the issue. Route to Cat A.

    Note:

    If specific Cat A criteria exists, see IRM 3.11.6.3.5.1. If Cat A criteria is not met, continue to the next box.

    Exception:

    Do not refer Schedule K-1 changes.

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

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

    2. Correspond with the taxpayer using a 916C letter. Use paragraphs E, J, R, S, Z and place a "N" in the enclosure field. Paragraph R fill-in use, "Please complete Form XX to support the changes you have made." Paragraph S fill-in use, "Please send us the requested information within 30 days from the date of this letter. If we do not hear from you we will not be able to allow your claim if the statute of limitations. Generally the Refund Statute expires 3 years from the original due date or 2 years from the date the tax was paid, whichever is later."

      Exception:

      If the signature is missing on the claim use a 324C letter with paragraphs: A, O, 2, 5, b. For the paragraph 2 fill-in use "Please send us the information requested within 30 days from the date of this letter. If we do not hear from you within 30 days we will not be able to allow your claim if the statute of limitations has expired. Generally the Refund Statute expires 3 years from the original due date or 2 years from the date the tax was paid, whichever is later."

    3. The response was received before the RSED or after the RSED but within 45 days of the IRS request (date the letter was input) then allow the claim.

    4. If the timeframes are not met or the taxpayer did not provide a complete response, then send a 105C letter disallowing the claim. Use paragraphs A, Z, c, d, e, p. Follow IRM 3.11.6.9.3.

    The RSED is expired on a full paid module. There are no payments, credits, or offsets within the last two years on the module and no other route-out criteria exists. Send a 105C letter disallowing the claim. Use paragraphs A, Z, c, d, e, p following, IRM 3.11.6.9.3.
  4. If the return is a duplicate, see IRM 3.11.6.5.4.

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

    If And Then
    The ASED is open or expired. You are making an adjustment to the account with a TC 290 .00 and adjusting Credit Reference Numbers that will not result in a credit or tax change.

    Example:

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

    Process using blocking series 05.

    Caution:

    Do not use Priority Code 9.

    The RSED is expired and there was a math error on the original return. The only change is a correction of the math error(s). Process the Form 1040X see IRM 3.11.6.6.5.1.

    Note:

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

    Exception:

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

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

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

    1. Process as normal.

    2. Route to CIS/AM.

    Your amended return has a total tax decrease and/or refundable credit increase that resulting in a refund on a timely filed return. No route criteria exists. Process the 1040X using instructions in the following section.
  6. Follow the procedures and examples in the following section for determining the received date and amended claims date.

    Note:

    Verify postmark date when determining timeliness.

    Reminder:

    Always verify the RSED and ASED dates on CC TXMOD.

    If And Then

    Received date is after the RSED

    Example:

    The received date is 4-20- 20XX

    Postmark shows the claim is timely filed

    Example:

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

    Example:

    The RSED is 10-15-2015, and the postmark date is 10-13-2015.

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

    Example:

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

    Example:

    Input 10-13-2015 as the amended claims date and RFSCDT.

    The received date is prior to the RSED

    Example:

    The received date is 3-30-20XX

    You are processing the claim after the RSED

    Example:

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

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

    Example:

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

    Received date is prior to the RSED

    Example:

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

    You are processing the claim prior to the RSED.

    Example:

    The claim is processed 6-20-20XX.

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

    Example:

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

    The claim is incomplete and correspondence is required per paragraph (3), box 1. Response is received after the RSED, but within the timeframes in paragraph (3), box 1.

    Example:

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

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

    Example:

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

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

    Example:

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

    Note:

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

3.11.6.3.4  (01-01-2016)
CI Scheme Development Center and Integrity and Verification Operation (IVO) Guidance

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

    Example:

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

    Note:

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

    Exception:

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

    Reminder:

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

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

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

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

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

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

    Note:

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

    Reminder:

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

    Exception:

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

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

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

  5. If a claim is returned from CI or IVO without any specific processing instructions or words that state "No CI Potential" or similar language and the claim still appears to be suspicious, then elevate to your Lead or Manager. The Lead or Manager then needs to check with their local P&A Analyst to see if there are any treatment streams for these types of cases.

  6. IDRS CC FTBOL definer P has been programmed in xClaim to run in the background. This command code provides information as to whether a taxpayer is or has been incarcerated (prisoner) and release date if appropriate. The command code is running so that tax examiners are aware they are processing a prisoner’s return. Prisoners have the same rights as law abiding taxpayers when it comes to income tax. However many schemes and fraudulent returns originate from prisoner populations and tax examiners need to be aware when they are working a prisoner claim in order to identify any irregularity. The command code is definitely for informational purposes, see IRM 3.11.6.8.12.

3.11.6.3.5  (01-01-2016)
Examination Category A/Technical Assistance Requests/Voluntary Disclosure Off Shore Cases/Claim Processing with Exam Involvement

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

    1. Returns with an open TC 420 or -L freeze see IRM 3.11.6.3.5.2

    2. Returns meeting Cat A criteria IRM 3.11.6.3.5.1

  2. Do not refer incomplete returns to Cat A or EXAM. Correspond for signatures and all missing forms or schedules needed to support the changes being requested. Do not input a partial adjustment until a reply is received.

    Note:

    A claim is considered complete for Cat A or EXAM purposes if it has all the information that is required per the IRM 3.11.6. Do not correspond for information requested in IRM 21.

  3. If a dependent on the account previously had an ITIN and now has a valid SSN, DDBCK must be used to update the exemption to the SSN. If DDBCK is unavailable for current year, use CC DUPEDD to delete the ITIN and CC DUPEDA to add SSN.

    Note:

    Send a Form 4442 to the Austin ITIN Unit to have the ITIN revoked. Annotate both TIN's on the Form 4442 referral and specify which TIN should be revoked. The reason for revoking the ITIN is "the dependent now has a valid SSN" see IRM 3.11.6.8.3(4).

  4. If the case has a -W freeze which is set by the TC 520, this will take priority and the case should be routed to CIS/AM as a -W freeze.

  5. A partial adjustment is required when a Cat A or Exam case involves tax increases/credit decreases.

    Exception:

    Certain adjustments are not processable based on SP criteria. Route any returns needing a partial adjustment that do not meet SP criteria to CIS/AM.

  6. Follow the instructions below for inputting a partial adjustment on cases that are being forwarded to Examination or Cat A.

    1. When inputting a partial adjustment, update the DUPOL database for all issues related to the 1040X including any items not adjusted during the partial adjustment per IRM 3.11.6.7. (When CC DDBCK is unavailable use CC DUPED on current year returns only.)

    2. Input any change to the Coverage Checkbox, SRP exemption(s) and/or SRP (MFT 35) increase. Input a TC 470 on the MFT 35 adjustment with a post delay “1” but do not use a Hold Code 4.

    3. Input any tax increase or credit decrease on MFT 30.

    4. When adjusting for the tax increase/credit decrease:
      - Include any updates to AGI, TXI, and other applicable reference numbers.
      - Use the appropriate blocking series.
      - If xClaim automatically inputs a PC 1, there is no requirement to remove it.
      - Use a HC 4.
      Use NSD.

    5. Input a TC 470. Use CC REQ77 to input TC 470, use the current date in the TRANS-DT field and include NSD.

      Note:

      Use a posting delay code on the input of the TC 470 to delay posting by one cycle.

  7. See following table for more detailed instructions for inputting partial adjustments as described above.

    Lines 12 – 14 Column B
    (Separate Credits on Line 15):
    Any lines decrease Input TC/RN/CRN = XXXX.00- for only the credits that are decreasing (See Changes to lines 1-11 below for TC 29X input)
    Increase or no change Do not adjust (See Changes to lines 1-11 below for TC 29X input)
    Changes to lines
    1 – 11
    If Line 11 And Then
    Increases   Adjust lines 1 – 10 excluding increases to line 7
    No Change/Decreases Line 6B Increases Adjust lines 1-5 and include any increases to line 9 and 10.
    Line 6B no change or decrease Input TC 290 for .00 if there is a decrease to lines 12-15. (See 8 below). Otherwise, do not input an adjustment.

    Note:

    When you input a partial adjustment, you should update the entity section as needed.

  8. Use the chart below when all of the following conditions apply:

    • There is a decrease to lines 12-15 and

    • Lines 6B and 11B are either decreasing or not changing and

    • There is a filing status change

    If And Then
    TP is claiming a Standard Deduction. FS1/4 to FS 2/5
    Allow the standard deduction change and 1 exemption for Spouse only (FS 5 allow exemption for dependent).
    - Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    FS 4/5 to FS 1
    Allow the standard deduction and remove the exemptions indicated.
    - Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    FS 1 to FS 4
    Allow the standard deduction change and do not adjust line 4.
    - Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    TP is claiming itemized deductions. FS1/4 to FS2/5
    Allow 1 exemption for Spouse only (FS 5 allow exemption for dependent). Do not adjust line 2.
    - Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    FS 4/5 to FS 1
    Remove the exemptions indicated. Do not adjust line 2.
    - Input TC 29X for the recomputed amount based on the new filing status.
    - Include PC 1 if this results in a tax decrease.
    FS 1 to FS 4
    Input TC 290 for .00
    - Do not adjust lines 1 – 10.
  9. The following link will take you to an aid for determining partial adjustments: Partial Adjustment Decision Tree

  10. Refer Forms 1040X to the Lead, Manager, and Planning Analysis Analyst, if necessary, for any of the following reasons, provided the case does not meet Cat A criteria and is not open in AIMS:

    1. There is a technical issue.

    2. There is a questionable issue.

    3. You need a legal interpretation.

  11. The lead will forward the case to Examination Classification function for technical assistance, use a Cat A cover sheet, marking the Other box. The Examination Classification function should respond within 3 days. Do not input TC 971.

    1. Clearly state the question or problem on the Cat A cover sheet.

    2. Attach any pertinent background information or research.

3.11.6.3.5.1  (01-01-2016)
Category A criteria

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

    Note:

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

  2. Do not apply Cat A criteria to Combat Zone returns when the TP is actively serving in a Combat Zone. Taxpayer's status is found on CC IMFOLE line 11, CZ indicator "1" indicates taxpayer is actively serving in a Combat Zone. CZ indicator "2" means taxpayer is not actively serving in a Combat Zone. (Refer to IRM 3.11.6.3.20

  3. For CC DDBCK Cat A criteria see IRM 3.11.6.7.1

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

  5. If the case is being forwarded to Cat A:

    • A partial adjustment may be required, see IRM 3.11.6.3.5

    • Do not input a TC 971 AC 013.

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

3.11.6.3.5.2  (01-01-2016)
Exam/-L Freeze Claim Processing

  1. Accounts with a –L freeze indicate they have been selected for potential audit.

  2. If an –L freeze is present, use CC AMDISA to determine the AIMS status. The AIMS status will determine the current status of the potential audit; therefore, processing procedures differ based on the AIMS status.

    Note:

    If there is an open IDRS, control base to CI-SDC continue to follow processing procedures outlined in IRM 3.11.6.3.4.

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

    • If the claim meets Cat A criteria, per IRM 3.11.6.3.5.1 route the case to Cat A after any required partial adjustment per IRM 3.11.6.3.5.

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

    Reminder:

    If both a priority code 8 and priority code 1 are needed on an adjustment, use priority code 1.

    Exception:

    A TC 290 for zero without credit reference number 766 or 806 will post without a priority code.

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

    • Route based on the Exam Employee Group Code (EGC) identified on AIMS. See link to the EGC located on SERP under Who/Where Exam Employee Group Code.

    • Follow local procedures for routing, see IRM 3.11.6.3.5.

    Exception:

    If the AIMS status is 90 indicating a closed audit or there is a pending TC 300 - 361, refer the case to CIS/AM so they can make the determination if the 1040X is an audit reconsideration.

    Exception:

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

  5. If the case is being forwarded to Exam:

    • A partial adjustment may be required, see IRM 3.11.6.3.5.

    • Input a TC 971 AC 013. Use the received date of the amended return for the transaction date.

    Exception:

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

3.11.6.3.5.3  (01-01-2016)
Taxable Amended Return Program

  1. Examination started an initiative related to taxpayers filing amended returns with gross income "increases" .

  2. Examination wants to review amended returns meeting the following criteria:

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

    Note:

    The amended return criteria is based on gross income changes, for example line 7 of the Schedule C, without regard to any related deductions, offsets, or the amount of change in any tax or credits.

  3. Accounts Management and Submission Processing will continue to process the amended returns following normal procedures. Cat A criteria still applies. If the account already has Exam involvement, refer to IRM 3.11.6.3.5.2, Processing Amended Returns With Examination Involvement.

    Example:

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

  4. Follow TARP procedures prior to routing to areas other than Exam / Cat A.

  5. Upon completion, a copy of the amended return should be forwarded to Examination for inclusion in the program.

    Note:

    Do not input a TC 971 AC 013 when forwarding this copy to Examination.

  6. Processing the 1040X:

    • Complete all necessary case actions.

    • Fax a copy of the amended return to the Taxable Amended Return Program. The fax number is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and is for internal use only.

      Note:

      Faxing of these documents should be according to local procedures. The copy produced by the fax machine should be destroyed as classified waste after the fax transmission is confirmed.

    Note:

    Only the first 10 pages of the amended return need to be faxed on large documents.

    • Forward the closed case to files following normal procedures.

3.11.6.3.5.4  (01-01-2016)
Offshore Voluntary Disclosure Program - Quiet Disclosure Cases

  1. Use the If/Then chart(s) to address amended returns relating to the Offshore Voluntary Disclosure Program:

    If And Then
    The amended return indicates:
    • Foreign source income

    • OVDI

    • OVDP

    • FBARs

    The ASED is not expired and does not meet Statute Routing criteria. Route to:
    1. LB&I, Austin Campus Offshore Voluntary Disclosure Program Mail Stop: 4301 AUSC Austin, TX 73301

    2. Notate "Per IRM 3.11.6.3.5.4" on the routing sheet.

    3. Do not input a TC 971 AC 013.

    The ASED is imminent (within 90 days of expiring) or is expired. Route to Statute per normal procedures

    Note:

    Form 8938, Statement of Specified Foreign Financial Assets, is not an OVDP indicator, see IRM 3.11.6.3.24.1.

  2. You may receive amended returns after they have been to LB&I. When this occurs follow the procedures below.

    If And Then
    LB&I determines the amended return meets their criteria. (This will be indicated on the return or routing sheet). The ASED is not imminent. Continue to Process following normal procedures.
    The ASED is imminent (within 90 days of expiring) or the ASED is expired. Route to Statute following normal procedures.
    There is a notation to extend the ASED. Route to CIS/AM. Notate "Extend ASED" on your working trail.
    LB&I determines the amended return does not meet their criteria. The amended return is received with a notation "This tax return does not meet OVDI criteria, OK to process" (or similar statement) on the routing slip or the amended return. The notation "OK to Process" only bypasses the route to LB&I criteria. Normal processing criteria and verification procedures should be followed.

3.11.6.3.6  (01-01-2016)
Processing of Form 1040X Returns Submitted under the Streamlined Program

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

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

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

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

3.11.6.3.7  (01-01-2016)
Identity Theft

  1. The IRS will track Identity Theft (ID Theft) or data loss incidents using service wide indicators on the IMF. Specifically, these codes will be placed on the IMF as TC 971 with an AC of 501, 504, 505, 506, 522, 523 or 524. The ID Theft literal in CC ENMOD or CC IMFOLE should not be used as an ID Theft indicator, use only the Action Codes listed.

  2. Identifying and discovering Identity Theft is everybody's responsibility. This is not a straight forward or clear cut process, however, there are certain indicators that will suggest possible identity theft. Review the list in IRM 3.11.6.5.4. Amended Form 1040 with No 1040X Attached/True Duplicates (TRUE DUPES). This list applies to Form 1040X as well.

  3. If the taxpayer indicates in the Explanation of Changes section of Form 1040X that they were a victim of identity theft or on a separate note, treat as an identity theft case.

  4. Form 14039, Identity Theft Affidavit, is completed by taxpayers and sent to the IRS to identify themselves as victims of ID Theft. Some of these forms involve tax related issues. Taxpayers send this form in by itself or attached to a letter or notice. They also will send them in attached to Form 1040 series returns. Returns with Form 14039 attached should be treated as identity theft cases. This would apply to loose forms as well as forms attached to a letter or notice.

  5. Once an amended 1040X is identified as being an ID Theft return, route to CIS/AM, notating "ID Theft" .

  6. Once a Form 1040 series is identified as being an ID Theft return, it needs to be routed to batching. In the upper left hand corner of the return notate PAO (Process as Original).

    Note:

    Circle out any notation that suggests the return was previously filed prior to routing.

    Note:

    These returns may or may not have a TC 150 posted.

    Note:

    If the return is undeliverable, it should be routed to Entity for further address research.

3.11.6.3.8  (01-01-2016)
Underreporter Function Cases

  1. All correspondence and Forms 1040X must be reviewed for a change to AUR criteria. Referrals to AUR should only be for AUR criteria that involves AUR can verify on CC IRPTR by AUR. This includes, but is not limited to income, withholding, mortgage interest, unemployment compensation, and tuition expenses). Verifiable information does not include changes to filing status, dependents, exemptions or correcting a math error. AUR will return all Forms 1040X and correspondence if it does not meet their criteria.

    1. When the taxpayer is not changing verifiable information, process the return without regard to AUR. Do not route cases to AUR that do not address or do not request reconsideration of a previous AUR adjustment.

      Note:

      Do not reverse an AUR adjustment. See IRM 3.11.6.6.5 if a corrected adjustment is required.

    2. If there is reasonable doubt as to whether the change is AUR criteria or not, refer to your workleader or manager for determination. If additional assistance is required, contact the appropriate Automated Underreporter (AUR) Coordinator. A listing is provided under the http://serp.enterprise.irs.gov/databases/who-where.dr/aur-coordinators.htm on the Servicewide Electronic Research Program (SERP) home page. Do not share the telephone contact information with the taxpayer.

  2. If it is determined that AUR criteria has been met, check CC TXMOD/IMFOL for a TC 922 on the module. Identify the Underreporter Process Code associated with the TC 922. The last process code (2 – digit) shown beside the TC 922 will determine its status. Use the chart below when determining the course of action to be taken.

    Note:

    Please route and notate the appropriate AUR stop number to prevent the mail function from identifying the route as a 1040X. The case needs to go directly to the respective AUR team. See for a list of AUR stop numbers.

    If Then
    TC 922 and the last process code is 09, 30, 34, 54, 55, 57-60, 75, 77-79, 81, 95, 97-99 Case is open in Underreporter:
    Route Form 1040X to the campus where the case is assigned. First two digits of the TC 922 DLN identifies where the case is assigned.

    Note:

    Input TC 971 AC 015.

    TC 922 and the last process code is 18 Refer to CIS/AM with the working trail KITA, use CC ACTON to leave a history item 2KITA..
    TC 922 and the last process code is 25, 46 or 65 Continue to process the Form 1040X unless there is a Z freeze on the module. If Z freeze is present, refer to Criminal Investigation (CI) Fraud Detection. See IRM 3.11.6.3.4.
    TC 922 and the last process code is 35, 36, 38, 44, 62-64, 66, 72, 80 or 82-86 Route to Exam. Input TC 971 AC 013.
    TC 922 and the last process code is 20, 53, 67, 68, 87, 88, 90, or 94 The AUR issue or case was closed. AUR reconsideration cases are routed to AUR. Please see paragraph (4) below for identifying and routing AUR reconsideration claims.

    Note:

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

  3. Other process codes may be present; only route cases when the last process code is listed on the chart above. .

  4. Many times a Form 1040X will be filed as an AUR reconsideration case. Form 1040X should be considered an AUR reconsideration case if AUR criteria as stated in paragraph (1) above and the following additional criteria are met:

    • TC 922 for the referenced tax period

    • TC 29X (subsequent to the TC 922) with any of the following blocking series:
      050-070, 500-519, 550-589, 600-619, 650-679, 980-999

    Note:

    xClaim will issue a caution with the same instructions for AUR reconsideration as above.

  5. Use the following chart for routing AUR cases based on the first two digits of the TC 922 DLN.

    FLC Campus Stop Number Reconsideration Cases
    18 Austin 6692-AUSC 6692-AUSC
    07 Atlanta 45A-ATSC 84-ATSC
    08 Andover 860-ANSC 860-ANSC
    19 Brookhaven 620-BSC 622-BSC
    89 Fresno 86106-FSC 86106-FSC
    29 Ogden 6653-OSC 6652-OSC
    28 Philadelphia 5-E08.113-PSC 5-EO8.113-PSC

    Note:

    Cases meeting the above criteria should be routed directly to the controlling AUR site based on the location code of the TC 922 DLN. See Who/Where on SERP When routing input a TC 971 AC 015 to indicate case referral to AUR. Follow local procedures for routing.

3.11.6.3.9  (01-01-2016)
Accounts Management Cases

  1. Cases are referred to Accounts Management (AM) based on the issue, the dollar tolerance, computer program capabilities (e.g., Blocking Series), and other various reasons. Refer to the specific IRM instruction or the 1040X Routing Guide see IRM 3.11.6.11 . Also see IRM 3.11.6.3.5.1 on screening and sorting Cat A criteria.

  2. Route all AM returns to Correspondence Imaging System (CIS) to be scanned. Follow any local procedure for separating the "Carryback/Carryforward" , "Disaster Claims" , etc. that require special handling. Do not input a TC 971 AC 010 unless specifically stated.

    Note:

    In the history section of IDRS a CIS number will identify a case that has been CIS imaged. There can be multiple CIS cases. The number will consist of "CIS and 7 numbers/letters."

  3. If a return has an open case to CIS/AM see IRM 3.11.6.3.23.

  4. If a return is a CIS image then refer to CIS/AM.

    Exception:

    If a CIS imaged return is stamped/edited "Process as Original (PAO)" or similar verbiage and there is no TC 150 posted/pending then route the document to Receipt and Control to be processed as an original. When feasible use Prior Year and Conversion Form 1040 Edit Sheet for Tax Year YYYY. If it is current year and the conversion form is not available then "dummy" a current year Form 1040 for processing.

  5. A return must have a TC 150 posted before routing to CIS/AM, see IRM 3.11.6.5.2. for exceptions.

3.11.6.3.10  (01-01-2016)
Affordable Care Act and Possible Health Professional Claims

  1. The Affordable Care Act enacted April 2010 expanded tax benefits for health professionals working in some communities. Health care professionals who received student loan relief under various state programs and work in under served communities may qualify for refunds on their 2009 federal income tax returns. If you receive the Form 1040X, Amended U.S. Individual Income Tax Return, referencing the “Excluded student loan amount under 2010 Health Care Act”, “Affordable Care Act” or “Student Loan Forgiveness”, route the claim to CIS/AM as they will be processing these claims.

3.11.6.3.11  (01-01-2016)
Taxpayer Advocate Service Cases (TAS)

  1. When a taxpayer asks to be referred to TAS or the taxpayer meets TAS criteria (listed below), refer the case to TAS per local procedure. Review all attachments for taxpayer notations/correspondence to determine whether the taxpayer meets TAS case criteria or requests TAS assistance.

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

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

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

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

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

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

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

  2. If the taxpayer's issue cannot be completely resolved within 24 hours, but steps are taken to begin resolving the taxpayers issues within 24 hours, then do not forward Form 911 unless the taxpayer asks to be referred to TAS and it meets TAS criteria. The unit manager will ensure that a Form 911, Application for Taxpayer Advocate Assistance Order (ATAO), is timely forwarded to the local TAS office when necessary. (For additional information see IRM 13.1.7.4)

  3. Follow local procedures for routing to TAS.

    Note:

    Open controls to TAS can be identified by Control Category of ATAO or the Assigned to Employee IDRS number starts with 63.

3.11.6.3.12  (01-01-2016)
Identifying Frivolous Claims

  1. The IRS is faced with a growing number of individuals who file frivolous tax returns based upon tax avoidance arguments that are not supported by law. Internal Revenue Code (IRC) Section 6702 (a) provides for the assessment of penalties for filing frivolous tax returns.

  2. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by both individuals and businesses are included, but are not limited to, a list in Exhibit 3.11.6-4 Frivolous Claims.

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

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

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

    2. Uses one of the frivolous arguments or statements in Exhibit 3.11.6-4, Frivolous Claims.

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

    4. Input TC 971 with AC 013. Enter "Sent to FRP" in the remarks area.

  5. If a non-frivolous claim is received and CC TXMOD shows an open control base to an employee in the FRP (Unit Numbers: 04690, 04691, 04692, 04693 or 04694, route to FRP).
    IRS Frivolous Return Program
    1973 N Rulon White Blvd
    Mail Stop 4390
    Ogden, UT 84404

3.11.6.3.13  (01-01-2016)
International Returns

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

    Note:

    A list of the International claims is included in Exhibit 3.11.6-5 PSPC International Returns. Common indicators of claims or forms to be routed are Foreign Addresses and Dual Status.

  2. Do not process Form 1040X if all the Forms W-2 and Forms 1099 attached are from the Virgin Islands (regardless of the address). Pull these returns and transship to the following address:
    Virgin Islands Bureau of Internal Revenue
    9601 Estate Thomas
    Charlotte Amalle
    St. Thomas, U.S. Virgin Islands 00802

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

    Form 1040 Revision is: Filing Status Line is checked and Line is blank or zero
    2006 and subsequent Other than 3 39b 40
  4. Do not True Dupe International returns.

3.11.6.3.14  (10-07-2015)
Form W-7 and ITIN Research (Austin Only)

  1. Form 1040/A/EZ/NR/X that have a red W-7 stamped in the bottom left corner of the return have been received from an ITIN Unit. Signature correspondence is not required when your return has the red W-7 stamp.

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

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

    If And Then
    A TC 150 is posted The return is a TRUE DUPE Treat as Classified Waste
    The Primary (or Secondary) TIN is different than found on the return
    1. Attach an IMFOLR screen print (for each TIN, if more than one) to the return.

    2. Route to CIS/AM using the current ITIN/IRSN DUPS coversheet.

    The Primary (or Secondary) TIN is the same as the original filing, and other issues are present Process the return as a Form 1040X
    No TC 150 is posted There is more than one TIN for the taxpayer Route to Batching.
    The return contains an IRSN for the primary taxpayer, but an ITIN/SSN is found
    1. Circle the primary taxpayer’s IRSN.

    2. Edit the ITIN/SSN to the return.

    3. Route to Batching.

    The return contains an ITIN for the primary taxpayer and an SSN is found.
    1. Circle the primary taxpayer’s ITIN.

    2. Edit the SSN.

    3. Route to Batching.

  4. If the dependent(s) has a newly issued ITIN(s), follow normal 1040X procedures.

  5. When “ITIN REJECT” is stamped:

    In And Then
    The primary taxpayer box. You cannot locate a Tin after researching IDRS Route to "Entity" following local procedures.
    You find the correct TIN Circle ITIN REJECT, edit the correct TIN, and follow the chart.
    Secondary taxpayer’s SSN box and you cannot locate a TIN after research. Income subject to SE Tax is reported for the secondary taxpayer. Route to Entity following local procedures.
    A math error already exists for the secondary TIN. Route to CIS/AM.
    Neither previous condition exists. Allow the standard deduction (per paragraphs (9) and (10) below) and disallow the exemption.
    Secondary taxpayer’s SSN box. you locate a TIN after research. You locate a TIN after research. Continue processing.
    Dependent TIN box. A math error already exists for the dependent. Route to CIS/AM.
    No math error is present for the dependent. See paragraph (9) below.
  6. If the TIN the ITIN unit assigned does not match CC INOLES, return the claim back to the ITIN department.

  7. If No W-7, or similar indication, is indicated in any TIN field of an exemption, correspond per IRM 3.11.6.8.3.1.

    Exception:

    For the Primary taxpayer, route to Entity per local procedures.

  8. If a return is received from the ITIN department with no change in tax or credits:

    1. Input a TC290 .00.

    2. No reason code.

    3. Enter the date from Form 3471, if attached, as the Amended Claims Date.

    4. Do not correspond.

  9. If a return is received from the ITIN department and the only issues are related to an "ITIN REJECT" :

    1. Input any allowable adjustment.

    2. Enter the appropriate reason code(s).

    3. Enter the date from Form 3471, if attached, as the Amended Claims Date.

    4. Correspond using Form 8009-A using the fill-in Your Amended Return is not being returned with this letter. You should have received a separate notice informing you that one or more of your Form W-7 (Application for IRS Individual Taxpayer Identification Number) applications were rejected. This caused a change to your Amended return.

      Exception:

      If the issue is related to the spouse’s ITIN being rejected, see paragraph (10) below for additional processing instructions.

  10. When using xClaim to allow the FSC 2 change and the spouse has "ITIN REJECTED" :

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

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

  11. To process returns needing corrections for issues other than ITIN rejects follow IRM 3.11.6.6.5. Use the date from Form 3471, if attached, as the Amended Claims Date.

  12. Process all other returns using normal processing procedures. Use the date from Form 3471, if attached, as the Amended Claims Date.

3.11.6.3.15  (01-01-2016)
Killed in Terrorist Action (KITA)

  1. Route all claims identified (on the return or on IDRS) as Killed in Terrorist Action (KITA), Killed in Action (KIA) or Victim of Terrorist Attack to CIS/AM, notate KITA in the working trail. Other terminology may include:

    • Anthrax

    • Oklahoma City

    • IRC 104(a)

    • 9 / 11

    • 911 Rescue Workers

    • Publication 3920

    • Tax Forgiveness Victims of Terrorist Act

    • World Trade Center (WTC)

    Note:

    Place a CC ACTON history item 2KITA on CC TXMOD; do not input a TC 971 010.

3.11.6.3.16  (01-01-2016)
Collection Function Cases

  1. The following should be detached and routed to the Collection Function if attached to the Form 1040X. Continue processing the amended return.

    1. Form 9465, Installment Agreement Request, or a written request for an Installment Agreement located in the Form 1040X, Explanation of Changes, or a separate attachment. Detach any Installment Agreement request and route to Collection as soon as it is identified.

      Note:

      When the taxpayer does not submit a Form 9465, but has requested an installment agreement route the installment agreement request to collections following local procedures.

    2. CP 503/504, Taxpayer Notification of Federal Tax Not Received.

    3. CP 523, Past Due Payment Default Notice.

      Note:

      Verify that the taxpayer's name, TIN, and tax period are present on any detached item; perfect as necessary.

  2. Route all Automated Substitute For Return (ASFR) to Collections. The most distinctive way to identify an ASFR account is the TC 150 for .00 with an SFR literal to the right of the Document Locator Number (DLN) on CC TXMOD or the SUBST4 on CC IMFOLI Vestigial: field.

    Caution:

    SFR returns with TC 420 (unreversed) and a -L freeze should be routed to Exam per IRM 3.11.6.3.5.2. If the CC AMDISA status is 08 or less then see Non-filer Reject (NFR) below.

    Caution:

    Non-Filer Reject (NFR) returns can be identified with either a TC 420 and a CC AMDISA status of 08 or less, a reversed TC 420 (TC 420 with subsequent TC 421) or the exam case will be closed (CC AMDISA status 90 and/or TC 300). These should be routed to CIS/AM.

    Exception:

    Research CC TXMOD. If there is a TC 599 cc 89 which indicates a return has been processed, the 1040X must be routed to CIS/AM. Notate on case per IRM 21.3.4.12.3.1. If there is a TC 599 cc 88 on CC TXMOD this is an ASFR Reconsideration and should be routed to:
    Fresno Campus
    ASFR Unit Stop 81304
    5045 E Butler Ave.
    Fresno, CA 93727

  3. Input TC 971/AC 012 only when sending the entire return to Collection.

  4. Route to CIS/AM if a T- freeze is present and no Letter 1058, CP 90, or other correspondence such as request for payment plan, "can’t pay" , "won’t pay" , or "will pay later" , etc., is attached.

  5. If Letter 1058, Notice of Intent to Levy (Final Notice) or CP-90 Notice of Intent to Levy is attached to Form 1040X, and other correspondence such as request for payment plan, "can’t pay" , "won’t pay" , or "will pay later" , etc., route to Automated Collection System (ACS) as follows if a T- freeze is present:

    Note:

    For CC IMFOLT the case status can be found under: STATUS. For CC TXMOD the case status can be found under: SC-STS. For CC IMFOLI the case status can be found under: STAT HIS.

    If And Then
    CC IMFOL/TXMOD shows the case is in Status 22 or 24 The IRS address is on the top of the letter
    1. Detach the correspondence.
    2. Input TC 470, no closing code using CC REQ77.
    3. Leave a working trail on the correspondence and the Form 1040X, see IRM 3.11.6.1.2.3 .
    4. Route the correspondence to the IRS address on the top of the letter.
    5. Continue processing Form 1040X.
    CC IMFOL/TXMOD shows the case is in Status 22 or 24 The IRS address is not on the top of the letter 1058 and correspondence is attached

    Exception:

    If no letter or correspondence is attached, continue processing Form 1040X.


    1. Research the appropriate ACS Support Site on SERP (http://serp.enterprise.irs.gov) under the Who/Where tab, select the link to ACS Support Liaison.

    Note:

    The BOD Code (W&I or SB/SE) will be needed to select the appropriate link.


    2. Detach the correspondence.
    3. Input TC 470, no closing code, using CC REQ77.
    4. Leave a working trail on the correspondence and the Form 1040X, see IRM 3.11.6.1.2.3 .
    5. Mail the correspondence to the ACS Correspondence Address indicated on SERP.
    6. Continue processing Form 1040X.
    CC IMFOL/TXMOD shows the case is in Status 26 The last four digits of the Collection-Asgmt>field is 8000 (xxx8000),

    Note:

    The Collection-Asgmt>field is located at the top right hand side of CC TXMOD.

    Route entire package to ASFR at either Austin or Fresno based on State mapping. See exceptions below because ASFR generally does not work 1040X claims.

    Exception:

    Research CC TXMOD. If there is a TC 599 cc 89 which indicates a return has been processed, the 1040X must be routed to CIS/AM. Notate on case "per IRM 21.3.4.14.1.1" . If there is a TC 599 cc 88 on CC TXMOD this is an ASFR Reconsideration and should be routed to:
    Fresno Campus ASFR Unit
    Stop 81304
    5045 E Butler Ave
    Fresno, CA 93727

    Caution:

    Do not route returns with imminent or expired ASED. Bring returns with imminent or expired ASEDs to Statute Coordinator or manager.

    CC IMFOL/TXMOD shows the case is in Status 26,

    Note:

    Route all amended returns when at least one tax period is in status 26.

    The last four digits of the Collection-Asgmt>field is not 8000, i.e., xxxxxxx
    1. Research the appropriate Revenue Officer Group office address on SERP (http://serp.enterprise.irs.gov) under the "Who/Where" tab, select the link RO by TSIGN/ZIP/STATE.

    2. Input TC 470, no closing code, using CC REQ77.
    3. Input TC 971 AC 012 for audit trail purposes to show where claim was sent.
    4. Route the entire case to the address obtained from SERP.
    5. If the RO calls to inquire why the 1040X was routed to them explain we cannot process the amended return without their approval since it is assigned to them.

    Note:

    At times even with it in status 26 the account is not assigned to a RO. Once it is placed in status 26 it is assigned to a group the very next cycle.

  6. Adjustment procedures when a -Y freeze is present on the module:

    1. If there is a unreversed TC 480 (OIC pending) alone on the module, normal processing procedures should be followed.

    2. If there is a unreversed TC 480 and TC 780 (accepted OIC), refer the case to the appropriate campus based on the Monitoring Offer in Compromise (MOIC) Compliance Campus Locations for Offers in Compromise. See "Offer-in-Compromise (OIC) Compliance Campus Locations for the Monitoring of Accepted Offers" located on SERP under the Who/Where tab, to determine the appropriate campus site.

  7. If unable to determine the correct adjustment, consult with your work leader or manager.

3.11.6.3.17  (01-01-2016)
Innocent Spouse (Form 8857)

  1. Route innocent spouse claims on Forms 8857 or Form 1040X referencing innocent spouse (with or without Form 8857 attached) as follows.

  2. Innocent Spouse is the only issue.

    1. Per local procedures, photocopy the return then edit “No Action/Issue” across the top of the photocopy.

    2. Detach the Form 8857 then staple it to the back of the photocopy of the return.

      Note:

      If Form 8857 is not attached, edit “No Form 8857 Received” across the top of the photocopy.

    3. Input a TC 290 .00 if the TC 150 was electronically filed. Otherwise use Form 9856 to route the return to files based on the DLN of the TC 150.

    4. Input a TC 470 for all years listed on Form 8857
      - Include closing code 90 if the account is not in status 26.
      - If the account is in status 26, do not include a closing code.

      Note:

      To determine the status, refer to the fifth line of CC TXMOD "SC-STS."

    5. Input a TC 971 with AC 065 for all years listed on Form 8857.

    6. Edit “TC 971/470” and appropriate closing code and date in the upper left margin of Form 1040X.

    7. Per local procedures mail the photocopy packet to (must be done daily):
      IRS - CSPC
      201 W. Rivercenter Blvd
      Covington, KY 41011
      Stop 840F

  3. Innocent spouse is filed with an amended return and involves other issue(s).

    1. Per local procedures, photocopy the amended return then edit “Copy – Do Not Process” across the top of the photocopy.

    2. Detach the Form 8857 then staple it to the back of the photocopy of the amended return.

      Note:

      If Form 8857 is not attached, edit “No Form 8857 Received” across the top of the photocopy.

    3. Input the adjustment(s).

    4. Follow instructions (d) through (g) from paragraph (2) above.

3.11.6.3.18  (01-01-2016)
Injured Spouse Allocation (Form 8379)

  1. If the taxpayer files Form 8379 with their return, process the return. Correspond for missing information or signatures per normal procedures. See IRM 3.11.6.9

    1. Input the adjustment as" No Source Document" (NSD). If the adjustment will result in a credit balance or the account is in a credit balance, include a hold code 1 with the adjustment to prevent refund issuance, this applies to both MFT 30 and MFT 35.

    2. Input a TC 971 AC 071.

    3. Bring the Form 8379 to the top of the claim.

    4. Route the entire original package to CIS/AM.

  2. If the taxpayer files a return with the sole purpose of filing the Injured Spouse Claim and no other issue is involved follow the instructions below. Do not correspond for a missing signature.

    1. Input a TC 290 .00
      - Change the Category Code to MISC.
      - Include a hold code 1 if the account is in a credit balance
      - Input a “N” in the Source Document Attached field

      Note:

      The TC 290 .00 does not require a reason code.

    2. Input a TC 971 AC 071.

    3. Bring the Form 8379 to the top of the claim

    4. Route the entire original package to CIS/AM.

  3. If the return does not meet SP criteria or you are processing a loose Form 8379:

    1. Input a TC 971 AC 071.

    2. Bring the Form 8379 to the top of any attachments or correspondence.

    3. Route the entire original package to CIS/AM.

      Note:

      Do not input an adjustment or a 290 .00.

  4. If the taxpayer indicates an Injured Spouse Allocation but does not submit Form 8379, route the entire package to CIS/AM.

    Note:

    Do not input a TC 971 AC 071.

  5. Do not confuse Injured Spouse and Innocent Spouse although both forms will be routed.

3.11.6.3.19  (01-01-2016)
Prisoner Returns

  1. IDRS CC FTBOL definer P has been programmed in xClaim to run in the background. This Command Code provides information as to whether a taxpayer is or has been incarcerated (prisoner) and release date if appropriate. The Command Code is running so that tax examiners are aware they are processing a prisoner’s return. Prisoners have the same rights as a law abiding taxpayer when it comes to income tax. However many schemes and fraudulent returns originate from prisoner populations and tax examiners need to be aware when they are working a prisoner claim in order to identify any irregularity.

  2. CC FTBOL may not always pick up that a claim is from a prisoner. Other indications that it is a prisoner return are:

    • Marking on envelope that indicates prisoner mail.

    • PRI written on claim or line 7 Form 1040.

    • Form W-2 indicates wages earned in prison.

    • Address on return or envelope identifies a prisoner.

  3. Returns filed by full year prisoners, containing wages/withholding earned while incarcerated, regardless of filing status, are not entitled to the following refundable credits:

    • Earned Income Tax Credit (EIC).

    • Additional Child Tax Credit (ACTC).

  4. A person is considered a full year prisoner if the person is incarcerated as follows:

    • Incarcerated on or before 01-01-YYYY continuously through 11-30-YYYY or beyond, or

    • Incarcerated on or before 02-01-YYYY continuously through 12-31-YYYY or beyond, or

    • Incarcerated on or before 01-01-YYYY continuously through 12-31-YYYY or beyond, which includes all prisoners incarcerated for life or on death row

      Note:

      If a release date displays 00/00/0000 or 99/99/9999 treat as still incarcerated.

      Note:

      This includes married filing jointly returns.

  5. Full year prisoners will be routed to IVO. Use the following tolerance table for full year prisoner claims when sending claim to IVO

    Category Refund Consists of Withholding Only Refund Contains Other Refundable Credit
    Prisoner $1.00 Tolerance $1.00 Tolerance
  6. If taxpayer is not a full year prisoner and there is no indication they were paid for work while incarcerated follow chart below.

    If Then
    If IRPTR data is available for the year of the tax return and the return verifies. Continue processing claim.
    If IRPTR data is not available for the tax year of the return or unable to verify wages. Route to IVO, see IRM 3.11.6.3.4 for routing criteria.

    Reminder:

    On a married filing jointly return verify CC IRPTR information for both spouses.

  7. If a claim is returned from CI or IVO without any specific processing instructions or words that state "No CI Potential" or similar language and the claim still appears to be suspicious then elevate to your Lead or Manager. The Lead or Manager then needs to check with their local Planning Analysis Analyst to see if there are any treatment streams for these types of cases.

    Note:

    If CI or IVO returns the claim with notations instructing the 1040X team to work the case the claim should be processed and the note should be referenced in the "remarks." If routed the case should be annotated with the routing criteria and the CI/IVO processing instructions.

3.11.6.3.20  (01-01-2016)
Combat Zone

  1. To be processed as a Combat Zone (-C freeze) claim, the taxpayer must be actively serving in a designated Combat Zone. A Combat indicator of 1 on CC IMFOLE shows the taxpayer is actively serving in a Combat Zone and an indicator 2 shows they are not currently serving in a Combat Zone. The taxpayer may also notate on the return that they are actively serving in a Combat Zone.

    Note:

    If the literal "Combat Zone" is present on IDRS ensure there is a "-C" freeze before following Combat Zone procedures. The literal without the freeze code is only an indication of prior Combat Zone status on the account. If a -C freeze is displayed on CC TXMOD/IMFOL, then CC IMFOLE or CC ENMOD will show a TC 500 with an odd numbered Closing Code (cc). If present, continue processing the return.

    Example:

    cc 56, (Enduring/Iraq Freedom/No Specific Campaign) entry date with a cc 57, exit date.

    Caution:

    There may be several entry/exit dates, use only the most recent to determine current Combat Zone status.

  2. Submission Processing will only process Combat Zone claims with net refund or zero balance. When processing do not enter an Amended Claims date. Do not apply Cat A criteria to Combat Zone returns when the taxpayer is actively serving in a Combat Zone, but continue to route if they meet CIS/AM criteria. If there is no -C freeze on a return that has been identified as a Combat Zone return, input a TC 500 with cc 56 using CC REQ77. If the taxpayer provided a Date of Entry or Deployment, use that date for the TRANS-DT; otherwise, use the IRS Received Date.

    Note:

    A taxpayer (or the spouse, if married filing jointly) receiving nontaxable combat pay may elect to include the amount when figuring his/her earned income for purposes of computing EIC.

    Exception:

    All protective claims must be referred as Cat A even if the taxpayer is actively serving in a Combat Zone.

  3. Follow correspondence procedures (IRM 3.11.6.9) when required information is missing from the return.

  4. Do not True Dupe Combat Zone returns.

  5. If "Military Family Tax Relief Act" is indicated on the Form 1040X, refer to IRM 3.11.6.8.1.2.

3.11.6.3.21  (01-01-2016)
Military Retirement Benefit Claims

  1. Taxpayers file Form 1040X claims based on a recalculation of disability retirement income received from the Government for their military retirement. These claims are based on IRC section 122 and recalculate the amount of taxable versus non-taxable income received. This is a misinterpretation of the Code section and is not allowable. The Form 1099-R issued by the Government does not include any amounts received as disability and the taxpayer in actuality is attempting to take a double deduction.

  2. Disallow any claim citing" Internal Revenue Service Section 1.122-1" or "Pursuant to 26 CFR" , unless the VA Determination letter with entitlement award is included with the claim. The letter will show the award amount and the monthly entitlement award. If the letter and entitlement award are present, route to CIS/AM, otherwise follow paragraph (3) for disallowance procedures.

    Exception:

    When documentation is included and Cat A criteria for taxable to non-taxable is met, route to Cat A, see IRM 3.11.6.11.

  3. Refer to IRM 3.11.6.9.3 for disallowance letter and use fill-in: "You are incorrectly applying the formulas under section 122 to your retirement pay that was reported on Form 1099-R. The nontaxable amount (if any) was already deducted by the Department of Defense from the amount shown on your Form 1099-R. You are not entitled to any further reduction."

3.11.6.3.22  (01-01-2016)
Processing Decedent Returns

  1. Submission Processing will only process Balance Due and Zero Balance decedent 1040X returns.

  2. Indications of a deceased taxpayer may include any of the following:

    1. Date of death is present

    2. "Deceased" written on the top of the form.

    3. "Deceased, Filing as surviving spouse" , or similar notation in the signature area.

    4. Death certificate, Form 1310, or other documentation is attached.

    5. "DECD" on an IRS label or written after a person’s name.

    6. "Estate of" is present.

  3. Route the following to CIS/AM:

    1. Refund returns.

    2. MFR 08 is present on CC INOLES indicating the primary taxpayer is deceased.

    3. Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, is attached.

  4. Correspond for missing signature if return is not signed by a surviving spouse, an attorney, CPA or representative of bank/fiduciary institution (credit union, pension funds, etc.). Correspond per IRM 3.11.6.9 using a 324C letter, paragraphs A, O, 5, b. "The return must be signed below the jurat but not on the paid preparer line."

    Reminder:

    On MFJ claims, the surviving spouse must sign for the deceased spouse as a surviving spouse. It should clearly state the taxpayer's name filing as surviving spouse. Correspond if missing.

  5. If correspondence is required for any missing forms/schedules, do not address the correspondence to the deceased taxpayer.

    1. Filing status 2 -- address correspondence to surviving spouse

    2. All other filing status -- address correspondence to the "Estate of" place in front of taxpayer's name (e.g., Estate of John Smith Decd)

      Note:

      POA becomes void upon taxpayer's death.

  6. Documentary evidence is not required for the authority to sign the following:

    1. Balance due returns.

    2. Zero/even balance returns.

    3. Joint (FS 2) or married filing separate (FS 3) returns signed by the surviving spouse.

3.11.6.3.23  (01-01-2016)
Open Cases / Open Control Base

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

    Note:

    Do not route cases that are open in CC ENMOD.

    Exception:

    Cases controlled to Appeals, IDRS # 66XXX, should be routed to CIS/AM.

  2. There are 3 types of open cases:

    1. Cases that will be routed.

    2. Cases that can be worked.

    3. Cases controlled to your IDRS number.

  3. Cases in status A or S should be routed based on the ASSIGN-TO field of the open control. Do not route cases open in B or M status; continue to process if no other route out criteria exists. The following exceptions apply to A, B, S, and M status:

    1. If the open control is in B status due to a P- freeze/TC 841 and your case is a net refund then route to CIS/AM.

    2. Refer cases with a category code NLUN, to the assigned IDRS number to process.

    3. Cases open to Accounts Management should be routed to your local CIS/AM. See (8) below.

    4. Cases open to a 1040X SP employee at your local campus should be referred to the manager or lead following local procedures.

    5. Follow local procedures for cases that are processable by placing the case in B status, inputting an adjustment and then returning it to its original status.

    6. For cases open to an SP suspense queue, IRM 3.11.6.1.2.2.

    7. Cases with Activity 9465 should be placed in “B” status and processed.

    8. Follow local procedures for routing cases open to TAS.

  4. If the open control is assigned to your current or previous IDRS number, close your open control before continuing to take any action on the return.

  5. When routing an open case, follow local procedures for completing Form 5102, 12305, 3210, etc.

    Exception:

    See (10) below and IRM 3.11.6.3.6 for routing cases to Underreporter.

  6. Use CC MESSG and/or the IDRS Unit and USR Database, IUUD, web site to determine the appropriate campus location and stop number based on the IDRS number in the ASSIGN-TO field of the open control.

    Caution:

    Stop numbers are not always updated timely. CC MESSG and IUUD may show conflicting information. Consult your lead or manager if different.

  7. When there are multiple open cases, route the return based on the most recent open control in A or S status.

  8. Accounts Management IDRS numbers are identified by the service center 2 digit code and 301-399 series. For instance a Customer Service Representative (CSR) in Fresno would be 103XX. Submission Processing 1040X Units would use the SC code and the 200-244 series. This includes cases open to the AM suspense queue that do not contain 301-399 series:

    Campus Generic IDRS number
    Atlanta 0739900025
    Andover 0848900000
    Austin 0686100000
    Brookhaven 0138640000
    Cincinnati 0237500000
    Fresno 1042000000
    Kansas City 0938000000
    Memphis 0339300000
    Ogden 0439800000
    Philadelphia 0544300093

    Note:

    See IRM 21.5.1.5.1 for a current listing

    Specialized Site IDRS Number
    Andover 0830141335
    Atlanta 0730300948
    Austin 0631001101
    Brookhaven 0130008778
    Fresno 1030307434
    Kansas City – Carrybacks 0930658078
    Kansas City – Injured Spouse 0930605704
    Memphis 0330404224
    Philadelphia 0534027692

    Note:

    See IRM 21.5.2.3 for a current listing.

  9. To put a case into suspense use CC ACTON. Follow local procedures for suspending and monitoring cases.

  10. When routing open cases to Underreporter, use routing forms per local procedures and route based on the DLN of the TC 922. See IRM 3.11.6.3.6 for further information. AUR Stop numbers:

    Campus Stop Number Reconsideration Cases
    Austin 6692 - AUSC 6692-AUSC
    Atlanta 45A-ATSC 84-ATSC
    Andover 860-ANSC 860-ANSC
    Brookhaven 620-BSC 622-BSC
    Fresno 86106-FSC 86106-FSC
    Ogden 6653 - OSC 6652-OSC
    Philadelphia 5-EO8.113 - PSC 5-EO8.113-PSC
  11. Follow local procedures when routing open cases.

3.11.6.3.24  (01-01-2016)
Releasing Screened Returns

  1. To release forms that are screened, sort into batches for each category and follow local routing procedures (including Batch Transmittal).

  2. "Hand carry" statute returns to the area following local procedures.

  3. For "PECF Dummy" returns to be processed through ISRP, notate the correct Program Code and Blocking Series for Batching and Numbering function.

  4. Follow IDRS screening procedures for sorting and routing returns or correspondence to another function. For Carryback/Carryforward claims, Disaster Claims, Injured Spouse, Innocent Spouse, Statute returns, etc., follow local procedures for routing to CIS/AM.

3.11.6.3.24.1  (01-01-2016)
TC 971 and Action Codes

  1. A TC 971, when input with one of the action codes shown in (2) below, indicates the taxpayer filed an amended return and begins an action trail for the document. The action code indicates where the return was routed. Since some of these actions generate a TC 977 on master file and a "-A or E-" freeze on IDRS, the Received Date of the Form 1040X must be input for the transaction date. For AC 270, the current date is entered when mailing a refund return back to the filer. Generally do not enter an action code if you are only routing correspondence or form attached to a Form 1040X.

    Exception:

    Form 8938 requires an action code. (e.g., Input AC 698 even when routing to Files, CIS/AM etc.)

  2. The action codes most frequently used by Code and Edit in conjunction with TC 971 are as follows:

    ACTION CODE DESTINATION
    010 Amended return/claim forwarded to Accounts Management (Automatically input by CIS)
    120 Amended return/claim in Submission Processing
    012 Collection (When routing the entire return)
    013 EXAM/Frivolous
    014 Statute function
    015 Underreporter function
    016 Destination International Cases amended returns/claims go to Philadelphia (Automatically input by CIS)
    065 Form 8857, Request for Innocent Spouse Relief (and Separation of Liability and Equitable Relief) filed. Route to Covington, KY.
    071 Form 8379, Injured Spouse Claim and Allocation.
    270 Amended return sent back to the taxpayer for additional information. Enter the current date as TRANS-DT.
    698 Form 8938, Statement of Foreign Financial Assets, attached to Form 1040X. If Form 8938 is the only issue, send entire package to files IRM 3.11.6.1.3. If other issues are involved, process as normal and keep Form 8938 with claim. See IRM 3.11.6.11.

    Note:

    For further information see TC 971 action codes in Document 6209


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