3.14.1 IMF Notice Review

Manual Transmittal

November 09, 2017

Purpose

(1) This transmits revised IRM 3.14.1 Notice Review - IMF.

Material Changes

(1) Editorial changes have been made throughout this IRM.

(2) IPU 17U0777 issued 05-03-2017 numerous tables have been updated throughout the IRM for Section 508 compliance with no change in content.

(3) IRM 3.14.1.1 Changed title from “Overview” to “Program Scope”, and added internal control requirements.

(4) IRM 3.14.1.1.7(2) Updated IRM title.

(5) IRM 3.14.1.1.8(2) Updated sentence in table for Notice issuance

(6) IRM 3.14.1.1.8(2)(a) Updated sentence under the Note.

(7) IRM 3.14.1.1.8(4)(a)(b)(c)(d)- Revised section

(8) IRM 3.14.1.1.8(6) Moved table

(9) IRM 3.14.1.1.8(7)Added new sentence.

(10) IPU 17U0602 issued 03-31-2017 IRM 3.14.1.1.10(2) Changed the sentence from 70% to 100%.

(11) IRM 3.14.1.1.10(3) Changed the sentence from 70% to 100%.

(12) IRM 3.14.1.1.10(4)(5)(6) Deleted sentences.

(13) IRM 3.14.1.1.11(2) Changed from work to business days.

(14) IRM 3.14.1.1.13(2) Updated sentence and note.

(15) IRM 3.14.1.2.1(2) Updated table, IRM reference numbers, and IRM titles.

(16) IRM 3.14.1.2.2(7) 7th bullet added (TC 160 and TC 170)

(17) IRM 3.14.1.2.3(2) Updated table on Item 14

(18) IRM 3.14.1.3.1 Updated Selection Key explanations for 274, 536 ,559, 570, 572, 805, 808, 809, and 810. Added new TPNCs 173, 557, 811, 812, 819, 820, 822, 823, and 824. Deleted TPNCs 501, 512, 525, 530, 545, 591, and 599. Updated note.

(19) IRM 3.14.1.3.1 (6)(c) Updated IRM references

(20) IRM 3.14.1.3.8 Updated title

(21) IRM 3.14.1.3.8 (5) Reminder changed 20,000 to 14,000.

(22) IPU 17U0317 issued 02-16-2017 IRM 3.14.1.3.8(5) Changed the threshold amount from 29,000 to 20,000.

(23) IPU 17U0602 issued 03-31-2017 IRM 3.14.1.3.8(5) Reminder: Changed the threshold amount from 20,000 to 14,000.

(24) IRM 3.14.1.3.8.1 Updated title

(25) IRM 3.14.1.3.8.1(3) Updated 2nd bullet

(26) IRM 3.14.1.4.1.1(4) Updated CP numbers

(27) IRM 3.14.1.4.2.1(1) Added Disposition

(28) IRM 3.14.1.4.2.2(1) Updated table in the second column.

(29) IRM 3.14.1.4.3.1.1(3(b) Changed 25 to 24.

(30) IRM 3.14.1.4.3.1.3(1) Added ZIP code 84201

(31) IPU 17U0777 issued 05-03-2017 IRM 3.14.1.6.1(1) Added IDRS to the sentence.

(32) IRM 3.14.1.6.1(5) Updated IRM references.

(33) IPU 17U0317 issued 02-16-2017 IRM 3.14.1.6.1.1.1 New section Protecting Americans from Tax Hikes

(34) IPU 17U0317 issued 02-16-2017 IRM 3.14.1.6.1.1.2(6) Updated table in the "If" subjects on the 2nd and 3rd sections.

(35) IRM 3.14.1.6.1.1.6(1) Updated IRM reference in the Note and updated the table in the “Then” column on the 3rd and 4th rows.

(36) IRM 3.14.1.6.3.3(6)(g) Added Doc Code 34 and 24

(37) IRM 3.14.1.6.4.1(4) Added a Note

(38) IRM 3.14.1.6.4.1(5) Deleted not and properly and replaced with incorrectly

(39) IRM 3.14.1.6.4.1(7)(a) Updated sentence

(40) IRM 3.14.1.6.4.1(7)(b) Updated years.

(41) IRM 3.14.1.6.4.1(9)Added a Note and added title to IRM reference.

(42) IRM 3.14.1.6.4.2(3) Updated the IRM reference on the bullet list.

(43) IRM 3.14.1.6.4.2(8) Updated the IRM reference

(44) IRM 3.14.1.6.4.3(2) Added Note under the bullet list

(45) IRM 3.14.1.6.4.4.3(1)(a) Added if applicable

(46) IRM 3.14.1.6.4.4.3(1)(c) Added dishonored check penalty

(47) IRM 3.14.1.6.6(4)(b) Deleted “2” on hold codes.

(48) IPU 17U0317 issued 02-16-2017 IRM 3.14.1.6.6(2) (c) Moved sentence (2)(c) to (5)(a)

(49) IRM 3.14.1.6.6.1 Updated table to change amount to $100,000,000 and added note after the table

(50) IRM 3.14.1.6.6.2(6) Updated header row on table and updated sentence on 3rd row.

(51) IPU 17U0891 issued 05-22-2017 IRM 3.14.1.6.6.2(7) (8) Updated tables and dollar amount to $ 1.94

(52) IRM 3.14.1.6.6.3(5) Added “Using the IAT tool”.

(53) IRM 3.14.1.6.7(6)(h) Added Blocking Series 78

(54) IRM 3.14.1.6.8(2) Hyper link was corrected.

(55) IRM 3.14.1.6.8.2.2(3) Added title to IRM reference.

(56) IRM 3.14.1.6.9.1(1) Updated Special Notice Review issues, tables, and IRM reference

(57) IRM 3.14.1.6.9.3 Updated title

(58) IRM 3.14.1.6.9.3(1) Updated dollar amount

(59) IRM 3.14.1.6.9.5(4) Added review at the end of first sentence.

(60) IRM 3.14.1.6.9.5(5)(b) Updated IRM titles for Form 2439 and 4136.

(61) IRM 3.14.1.6.9.5(6) Updated Exhibit numbers.

(62) IPU 17U0954 issued 06-05-2017 IRM 3.14.1.6.9.5(1) Change void to mail

(63) IPU 17U0954 issued 06-05-2017 IRM 3.14.1.6.9.6(1) Change void to mail

(64) IRM 3.14.1.6.9.6(2) Deleted sentence

(65) IRM 3.14.1.6.9.9(4) Updated IRM title

(66) IRM 3.14.1.6.9.11(5) Updated IRM reference for Combat Zone returns

(67) IRM 3.14.1.6.9.13(3) Added CC IRPOLA

(68) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.9.13(7) Updated sentence

(69) IRM 3.14.1.6.9.13(7)(e) Updated Note

(70) IRM 3.14.1.6.9.14 New instructions for 8962 PTC Calculator tool

(71) IRM 3.14.1.6.9.15 Revised and added additional information and instructions on Shared Responsibility Payment.

(72) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.10.1(1) Updated first sentence

(73) IRM 3.14.1.6.10(2) Updated sentence

(74) IRM 3.14.1.6.10(3) Updated sentence and IRM reference, added Note after bullet list, and updated table on column for “Then”

(75) IRM 3.14.1.6.10(6) Updated sentence and deleted bullet list

(76) IRM 3.14.1.6.10.2(1)(2) Bolded “If no better address is found”

(77) IRM 3.14.1.6.10.2(3)(4)(5)(6)(7) Updated sentences and reformatted section

(78) IRM 3.14.1.6.11(5) Updated IRM title.

(79) IRM 3.14.1.6.11.27(2) Updated dollar amounts

(80) IRM 3.14.1.6.11.28(3) Changed sentence

(81) IRM 3.14.1.6.11.30(1) Replaced this code with Z-.

(82) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.12.1 New instruction on ITIN Expired/Assignment Date.

(83) IRM 3.14.1.6.12.1.(2) Deleted second sentence

(84) IRM 3.14.1.6.12.1.(4)(a)(b)(c)(Updated sentences

(85) IRM 3.14.1.6.12.1.(5)Updated sentences

(86) IRM 3.14.1.6.12.2.2 Added Schedule C.

(87) IRM 3.14.1.6.12.2.2(2) Added new instructions on the 3rd row of the table for Self-employment income and corrected IRM reference.

(88) IRM 3.14.1.6.12.2.4(1)(3) Added a note

(89) IRM 3.14.1.6.12.2.4(5) Updated table on row 5 (sentence 2) and updated table

(90) IRM 3.14.1.6.12.3.1(2) Updated IRM reference and table

(91) IRM 3.14.1.6.12.3.1(3) Updated dollar amounts for current and prior year

(92) IRM 3.14.1.6.12.3.3(2) Deleted sentence

(93) IRM 3.14.1.6.12.3.3(3)Updated current year exemption amounts

(94) IRM 3.14.1.6.12.4(6) Deleted sentence

(95) IRM 3.14.1.6.12.4(6)(a) Updated sentence

(96) IRM 3.14.1.6.12.4.1(1) Updated table for “no qualifying children”

(97) IRM 3.14.1.6.12.4.2(1) Updated 1st bullet on table

(98) IRM 3.14.1.6.12.4.3(1) Added an exception under the note

(99) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.12.4(8) Added Path Act may apply to this credit

(100) IRM 3.14.1.6.12.5.1(1) Updated title to add TPNC 808 and added it to the table

(101) IRM 3.14.1.6.12.5.1(1)(a)(b) Corrected IRM reference

(102) IRM 3.14.1.6.12.5.2(1)Updated title to add TPNC 644 and added it to the table.

(103) IRM 3.14.1.6.12.5.2(3)Added TPNC 644. Added a new table for Status Value.

(104) IRM 3.14.1.6.12.5.2(4) Added new TPNC 644 instruction to the existing table

(105) IRM 3.14.1.6.12.5.3(1) Added TPNC 644 and added guidelines to the chart.

(106) IRM 3.14.1.6.12.5.4(4)(e) Corrected dollar amount from $11,278 to $9,804.

(107) IRM 3.14.1.6.12.5.5 Updated title to add TPNC 808 and added it to the table.

(108) IRM 3.14.1.6.12.5.5(2) Corrected IRM reference

(109) IRM 3.14.1.6.12.5.5(3) Added TPNC 748 and 808. Corrected IRM reference.

(110) IRM 3.14.1.6.12.6.1(1) Corrected IRM reference.

(111) IPU 17U0602 issued 03-31-2017 IRM 3.14.1.6.12.6.2(1) Removed or between Primary and Secondary and added (if joint return).

(112) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.12.6.2(5) Added Path Act may apply to this credit

(113) IRM 3.14.1.6.12.6.3(1)Note Changed incorrect link to 3.14.1.1.2

(114) IRM 3.14.1.6.12.6.3(2) Note new sentence

(115) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.12.6.3(3) Added Path Act may apply to this credit

(116) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.12.6.4(4) Added Path Act may apply to this credit

(117) IRM 3.14.1.6.12.6.5(4) Add 3rd bullet to include to correct Balance Due

(118) IRM 3.14.1.6.12.6.6(2) Corrected IRM reference.

(119) IRM 3.14.1.6.12.6.7(6) Corrected IRM reference.

(120) IPU 17U0317 issued 02-16-2017 IRM 3.14.1.6.12.6.10 New section Expired ITIN Math Errors

(121) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.12.6.10 Moved CP21/22 section to Expired ITIN CP/22 IRM 3.14.1.6.18.1

(122) IRM 3.14.1.6.12.7(2) Corrected IRM reference and figure numbers.

(123) IRM 3.14.1.6.12.7.5(5) Added IRM title.

(124) IRM 3.14.1.6.13(1) Updated sentence and updated Note.

(125) IRM 3.14.1.6.13(4) Updated language from ELF to MeF.

(126) IRM 3.14.1.6.13(5)(c) Added IRM title.

(127) IRM 3.14.1.6.13(6)(i) Added new sentence and IRM title..

(128) IRM 3.14.1.6.13(7) Added IRM title and updated sentence.

(129) IRM 3.14.1.6.13(8) Added new sentence and added IRM title.

(130) IRM 3.14.1.6.13(9) Added in the table or with a deceased spouse.

(131) IRM 3.14.1.6.13(9) Changed in the table Married Filing Joint Status IMFOLT to IMFOLI

(132) IRM 3.14.1.6.13(10) Added CP 16.

(133) IPU 17U0891 issued 05-22-2017 IRM 3.14.1.6.13.2(2)(e) Updated table and Note

(134) IPU 17U0954 issued 06-05-2017 IRM 3.14.1.6.13.2(2)(c) Changed void to mail

(135) IRM 3.14.1.6.13.2(2)(e) Updated table for the CP 24.

(136) IRM 3.14.1.6.14.2(4) Added new bullet.

(137) IRM 3.14.1.6.14.3(4) Added new bullet.

(138) IRM 3.14.1.6.14.4(2) Updated table on Refund S-41, S-42, S-46, and S-52 transcripts.

(139) IRM 3.14.1.6.14.5(2) Updated table on Refund E-51 and E-52 transcripts.

(140) IRM 3.14.1.6.14.5(4)(f) Added new sentence

(141) IRM 3.14.1.6.14.5(5)(c) Deleted sentence and the caution.

(142) IPU 17U0317 issued 02-16-2017 IRM 3.14.1.6.14.6 Changed sentence on the 5th bullet, delete our tolerance of.

(143) IRM 3.14.1.6.14.6(2) New instructions added when withholding claim is over our tolerance of $10,000# and can not be verified on IRPTRL or a pattern seen by using prior history for both spouses, stop the refund until you can report the case to your local IVO team & receive their response. Added TC 806.

(144) IRM 3.14.1.6.14.6(3) added 4th bullet and new content

(145) IRM 3.14.1.6.15(5) Updated table on when the tax will be paid in full, for retyping the notice

(146) IRM 3.14.1.6.15(6) Deleted sentences c and d.

(147) IRM 3.14.1.6.16(8) Added IRM title.

(148) IRM 3.14.1.6.16.1(1)(b) Changed sentence.

(149) IRM 3.14.1.6.17.1(1)(b) Changed sentence.

(150) IRM 3.14.1.6.17.2(1)(b) Changed sentence.

(151) IRM 3.14.1.6.17.3(3) Updated IRM title.

(152) IRM 3.14.1.6.17.4(1)(a) Changed sentence.

(153) IRM 3.14.1.6.17.5(1)(a) Changed sentence.

(154) IRM 3.14.1.6.17.14(3) Updated IRM title.

(155) IRM 3.14.1.6.18.4.(5)(b) Corrected IRM reference.

(156) IRM 3.14.1.6.18.4.(5)(c) Corrected IRM reference.

(157) IRM 3.14.1.6.18.4.(5)(4) Updated hyper link and corrected IRM title.

(158) IRM 3.14.1.6.19.1(7)(c) Changed Note to bullet list.

(159) IRM 3.14.1.6.20(1)(c) Added Form 8615 title.

(160) IPU 17U0421 issued 03-02-2017 IRM 3.14.1.6.20.1 Revised Tax Tolerance table

(161) IRM 3.14.1.6.20.2(1) Updated table on first row on the “Caution”

(162) IRM 3.14.1.6.21.2(6) Updated the dates.

(163) IRM 3.14.1.6.21.2(7)(b) Updated the sentence.

(164) IRM 3.14.1.6.21.2(8)(c) Updated the minimum penalty amount for returns due in 2018.

(165) IRM 3.14.1.6.21.3(5)(a)(d) Changed payment due date to RDD.

(166) IRM 3.14.1.6.21.3.1(1)(b) Updated sentence.

(167) IRM 3.14.1.6.21.4.4(2) Updated sentence and added new bullet list.

(168) IRM 3.14.1.6.21.4.7(2)(c) Updated IRM reference

(169) IRM 3.14.1.6.21.4.8(3) Updated sentence.

(170) IRM 3.14.1.6.21.6(1) Updated IRM title.

(171) IRM 3.14.1.6.21.5(7) Updated the second then box.

(172) IRM 3.14.1.6.22(6)(a) Updated IRM reference

(173) IRM 3.14.1.6.22(11) Added the minus sign for exemptions, added a note, and corrected the tax years.

(174) IRM 3.14.1.6.22.1(1) Updated sentence

(175) IRM 3.14.1.6.23(4) Updated amounts for current year

(176) IRM 3.14.1.6.23(7) Updated new Dollar amounts for 2017.

(177) IRM 3.14.1.6.23.1(4)(c) Corrected language available credit claimed on the IMF side (MFT 30) to the IRA (MFT 29). The available credit is the amount after tax, penalties, and interest have been satisfied.

(178) IRM 3.14.1.6.23.1(6) Updated sentence and bullets

(179) IRM 3.14.1.6.25(2) Updated sentence and corrected IRM references.

(180) IRM 3.14.1.6.26(1)(a)(b) Updated bullets in both sections.

(181) IRM 3.14.1.7.1.3(3) Updated IRM reference in the “Caution”

(182) IRM 3.14.1.7.2(1) Added IRM title.

(183) IRM 3.14.1.7.2(5) Added Category Code information and updated Caution.

(184) IRM 3.14.1.7.4(2) Deleted first sentence located in the “then” column in the second to last row.

(185) IRM 3.14.1.7.4(3) Updated IRM references.

(186) IRM 3.14.1.7.5(4)(a)(2)Updated IRM references.

(187) IRM 3.14.1.7.6.1(2) Added Blocking Series “00”

(188) IRM 3.14.1.7.6.1(5) Added new sentences (1) and (2)

(189) IRM 3.14.1.7.6.5(1) Updated bullet list.

(190) IRM 3.14.1.7.6.5(3) Updated the Description in the table for Hold Codes “0” and “4”.

(191) IRM 3.14.1.7.6.8(4) Deleted the fourth sentence and added bullet list under 3rd sentence.

(192) IRM 3.14.1.7.6.9 Added the word tax before return at the end of first sentence

(193) IRM 3.14.1.7.6.10(4) Added examples of Blocking Series.

(194) IRM 3.14.1.7.1.1(1)(a) Updated sentences

(195) IRM 3.14.1.7.1.2(2)(a)(b) Updated sentences.

(196) IRM 3.14.1.7.8.1(2) Added Exception for History items.

(197) IRM 3.14.1.7.8.3(1)(b) Updated to bullet format instead of sentence.

(198) IRM 3.14.1.7.8.4(4)(b) Added Exception for History items.

(199) IRM 3.14.1.7.8.5(3) Updated IRM reference

(200) IRM 3.14.1.7.8.6(1) Corrected the sentence to read retype the notice.

Effect on Other Documents

IRM 3.14.1, dated October 20, 2016 (effective January 1, 2017), is superseded. The following IRM Procedural Updates (IPUs), issued from February 16, 2017 through June 5, 2017, have been incorporated into this IRM: IPU 17U0891, IPU 17U0777, IPU 17U0602, IPU 17U0421, IPU 17U0317, IPU 17U0954.

Audience

Individual Master File (IMF) Submission Processing Campuses and Notice Review tax examiners

Effective Date

(01-01-2018)

Related Resources

Document 6209, IRS Processing Codes and Information

IRM 3.11.3, Individual Income Tax Returns, for instructions related to Code and Edit

IRM 3.12.3, Individual Income Tax Returns, for instructions related to Error Resolution System

IRM 21.4.4, Manual Refunds

IRM 21.4.5, Erroneous Refunds

IRM 21.4.6, Refund Offset

IRM 20.1, Penalty Handbook

IRM 20.2, Interest

Linda J. Brown
Director, Submission Processing
Wage and Investment Division

Program Scope

  1. This section provides instructions to the Notice Review Function for reviewing Individual Master File (IMF), Individual Retirement Account (IRA), Shared Responsibility Payment (SRP) and Integrated Data Retrieval System (IDRS) Computer Paragraph (CP) notices. These notices may be selected for review by either the Notice Review Processing System (NRPS) or by the IDRS Review Notice Register.

    Note:

    Notices may also be mandated for review by Treasury Inspector General for Tax Administration (TIGTA), management, policy statements, etc.

  2. Priority Refund Transcripts are worked using the Account Management Services (AMS) system and are delivered on a daily basis. This section also provides instructions to the Notice Review Function for reviewing Priority Refund Transcripts meeting criteria identified by IMF using AMS. Type of Priority Refund Transcripts are:

    • Million $10

    • Million $

    • Refund-S

    • Refund-E

    • Refund (Other)

    Note:

    The CP Notice inventory is found in the OLNR system.

  3. Purpose: This section provides IMF Notice Review personnel with instructions for reviewing CP notices that have been selected by NRPS. Reviews are conducted with the goal of improving both the accuracy and quality of information the IRS sends to taxpayers. The Notice Review process helps to ensure the information received by taxpayers is complete and correct and taxpayers do not receive an erroneous refund or an erroneous balance due notice. .

    Note:

    Notices are subject to change for various reasons, including notice clarity studies and legislative changes.

  4. Audience: These procedures apply to Wage and Investment (W&I) Submission Processing Individual Master File (IMF) Notice Review personnel, located primarily in Austin, Fresno, and Kansas City:

    • Supervisory Tax Examining Technician

    • Lead Tax Examining Technician

    • Tax Examining Technician

    • Supervisory Clerk

    • Lead Clerk

    • Clerk

  5. Policy Owner: Director, Submission Processing

  6. Primary Stakeholders: Other areas that may be affected by these procedures include (but are not limited to):

    • Accounts Management

    • Chief Counsel

    • Compliance

    • Information Technology (IT) Programmers

    • Large Business and International (LB&I)

    • Submission Processing (SP)

    • Tax Exempt and Government Entities (TEGE)

Background

  1. The purpose of Notice Review is to review IMF Computer Paragraph (CP) notices to verify the accuracy of notices selected for review before mailing. This will ensure the information received by taxpayers are complete and accurate. Notice Review employees use the Notice Review Processing System (NRPS) package, Control D, and /or Integrated Data Retrieval System (IDRS), Integrated Automation Technologies (IAT) Tool, and Account Management Services (AMS) to ensure the information for each notice is processed correctly. Any changes to the notices are made using the On Line Notice Review (OLNR) system.

Authority

  1. Title 26 of the United States Code (USC) or more commonly known as the Internal Revenue Code (IRC). The IRC has been amended by acts, public laws, rules and regulations, such as the following:

    • Omnibus Budget Reconciliation Act (OBRA) of 1993

    • Revenue Reconciliation Act of 1998 (RRA 98)

    • American Taxpayer Relief Act (ATRA) of 2012

    • Surface Transportation and Veterans Heal Care Choice Improvement Act of 2015.

    • Consolidated Appropriations Act of 2016

    • Hiring Incentives to Restore Employment (HIRE) Act

    • Foreign Account Tax Compliance Act (FATCA)

    • The Protecting Americans from Tax Hikes Act of 2015 (PATH)

      Note:

      The above list may not be all inclusive of the various updates to the IRC.

Responsibilities

  1. The Campus Director is responsible for monitoring operational performance for the Submission Processing campus.

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

  3. The Team Manager/Lead is responsible for performance monitoring and ensuring employees have the tools to perform their duties.

  4. The Team Employees are responsible to follow the instructions contained in this IRM and maintain updated IRM procedures.

Program Objectives and Review

  1. Program Goals: To review Computer Paragraph (CP) notices generate to notify the taxpayer of any change to a specific module from the taxpayer’s original return and to verify the accuracy of the information and ensure the notice received by the taxpayer is complete and correct.

  2. Program Reports: After NRPS completes the selection process, it combines all of the selection information into NRPS batches. NRPS produces various reports from the output files:

    1. NRPS Document Charge-out (NRPS 6120)- provides information needed by the Files Function to pull documents for use in reviewing notices.

    2. NRPS Selection Report (NRPS 6130)- contains notice/transcript input and selected for review counts, sorted by selection key and by Taxpayer Notice Code (TPNC), with year- to-date totals for notices selected in the current cycle.

    3. Notice Retype Error Report (NRPS 8240)- contains information on notices that were unable to be processed after cycle release. The notices on this report must be recreated.

    4. NRPS Automated Local Control Selection Report- shows the previous four weeks’ selection percentages and the current cycle’s selection percentage, based on the automated selection process.

  3. Program Effectiveness: The program goals are measured by using the following tools:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial Reviews

  4. Annual Review: The processes outlined in this IRM should be reviewed annually to ensure accuracy and promote consistent tax administration.

Acronyms/Abbreviations/Definitions

  1. This table lists Acronyms, Abbreviations, and Definitions.

    Acronyms and Abbreviations Definition
    ABI Age Blind Indicator
    AC Action Code
    ACA Affordable Care Act
    ACTC Additional Child Tax Credit
    AEIC Advanced Earned Income Credit
    AGI Adjusted Gross Income
    AMS Account Management System
    AMTAP Accounts Management Taxpayer Assurance Program
    AOTC American Opportunity Credit
    APTC Advance Premium Tax Credit
    BMF Business Master File
    BOB Block out of Balance
    CADE Customer Account Data Engine
    CAF Centralized Authorization File
    CARE Computer Assisted Review of ERS
    CCC Computer Condition Code
    CFOL Corporate File On-Line
    CIS Correspondence Imaging System
    CP Computer Paragraph
    CRD Correspondence Received Date
    CRN Credit Reference Number
    CTC Child Tax Credit
    CU Corrected Unpostable
    DLN Document Locator Number
    DP Data Processing
    DU Deleted Unpostable
    EFDS Electronic Fraud Detection System
    EIC Earned Income Credit
    ELF Electronic Filing System
    ERP Economic Recovery Payment
    ERRF Erroneous Refund
    ERS Error Resolution System
    ESP Economic Stimulus Payment
    FTHBC First Time Home Buyer Credit
    FTF Failure to File
    FTP Failure to Pay
    GMF Generalized Mainline Framework
    GUF Generalized Unpostable Framework
    HCTC Health Coverage Tax Credit
    ICT Image Control Team
    IDRS Integrated Retrieval System
    IDT Identity Theft
    IGR IDRS Generated Refund
    IMF Individual Master File
    IRA Individual Retirement Account
    IRC Internal Revenue Code
    IRM Internal Revenue Manual
    IRN Item Reference Number
    IRSN Internal Revenue Service Number
    ITIN Individual Taxpayer Identification Number
    IVO Integrity and Verification Operation
    LCF Local Control File
    LSE Lump Sum Election
    MAGI Modified Adjusted Gross Income
    MEC Minimum Essential Coverage
    NPA Non-Passive Activity
    NR Not Reviewed
    NRPS Notice Review Processing System
    NU Nullified Unpostable
    OLNR On-Line Notice Review
    PTC Premium Tax Credit
    RAL Refund Anticipation Loan
    RDD Return Due Date
    RPD Return Processable Date
    RRB Railroad Retirement Benefits
    RRC Recovery Rebate Credit
    RTF Return Transaction File
    RTR Remittance Transaction Research
    SSA Social Security Administration
    SSB Social Security Benefits
    SSI Supplemental Social Security Benefits
    SSN Social Security Number
    SRP Shared Responsibility Payment
    TANF Temporary Assistance for Needy Families
    TAS Taxpayer Advocate Services
    TC Transaction Code
    TDA Tax Delinquent Account
    TDI Tax Delinquent Investigation
    TEP Tape Edit Processing
    TIGTA Treasury Inspector General for Tax Administration
    TOP Treasury Offset Program
    TPNC Taxpayer Notice Code
    TPP Taxpayer Protection Program
    TXI Taxable Income
    UP Unpostable Transaction
    URC Unpostable Reason Code
    URF Unidentified Remittance File
    XSF Excess Collection File

Related Resources

  1. The following resources may assist in performing the work as outlined in this IRM:

    • Servicewide Electronic Research Program (SERP)

    • Notice Review Processing System (NRPS)

    • On Line Notice Review (OLNR)

    • Integrated Data Retrieval System (IDRS)

    • Account Management System (AMS)

    • Integrated Automation Technologies (IAT)

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)Internal Management Documents System. 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.

Customer Account Data Engine 2 (CADE 2)

  1. The Customer Account Data Engine 2(CADE) 2 solution modernizes the IRS to a daily processing environment.

  2. The components of CADE 2 Transition State 1 in January 2012 include:

    New Cycles Refund Issuance Notice Issuance
    1. Campus Cycle –Thursday – Wednesday

    2. Master File Processing – Friday - Thursday

    3. Notice Review – Saturday - Monday (8 days later, 2 A.M. Eastern Time)

    4. Unpostables – Tuesday to Tuesday

    Refunds for IMF accounts will be accelerated to provide refunds to taxpayers more quickly.
    1. Direct deposit refunds will be issued in 4 business days from posting.

    2. Paper check refunds will be issued in 6 business days from posting.

    IMF notices under a $1000 tolerance (change in taxpayer requested refund amount) will bypass Notice Review Processing System (NRPS) and will be sent directly to Correspondence Processing System (CPS), to be mailed to the taxpayer.

    Note:

    If the remaining refund amount is less than ≡ ≡ ≡ ≡ , the refund hold will not be applied.

    1. Daily Processing – IMF processing with the new cycle definition outlined in (3) a), but processing daily (daily transactions to daily accounts) with weekly processing occurring on Thursday.

      Note:

      Business Master File (BMF) and Employee Plans Master File (EPMF) will continue to process all transactions on a weekly basis. Master File processing will occur on Thursdays.

    2. IMF will identify unpostable criteria daily, but the files will not be processed by Generalized Unpostable Framework (GUF) until the weekly cycle. This may result in subsequent transactions posting in the same cycle as the unpostable transaction, resolving the earlier unpostable.

    3. CADE 2 database – Establishment of a taxpayer account database that will house all individual taxpayer accounts. IMF will process all transactions, settle accounts, and will provide data to the CADE 2 database. IMF will remain the system of record for Transition State 1. Key programs IDRS and Integrated Production Model (IPM) will receive data from the CADE 2 database.

  3. IMF transactions posting time frames are outlined as follows:

    1. Daily transactions directed to a daily account are expected to post daily with daily processing. Transactions will be displayed using Corporate File On-line (CFOL) command codes (IMFOL) the second day after campus input. Transactions will be displayed on IDRS command codes (i.e., TXMOD, ENMOD) the third day after campus input.

    2. Weekly transactions directed to a daily account are expected to post with the master file during weekly processing on Thursday and may result in the account type changing to weekly.

    3. Daily and weekly transactions directed to a weekly account are expected to post with the weekly processing on Thursday.

      Note:

      For items b) and c) above, transactions will be displayed using command codes (IMFOL/BMFOL) on Saturday after the Thursday master file processing. Transactions will be displayed on IDRS command codes (i.e., TXMOD, ENMOD) on Monday after the Thursday master file processing.

    4. Use of the posting delay code on transactions will result in the transaction being held until the weekly processing on Thursday. When the transaction is processed on Thursday and the posting delay code contains a value other than zero, the transaction will continue to resequence for the number of cycles equal to the value.

    Example:

    A transaction input with a posting delay code of 1 will be processed on Thursday, and will not resequence until the following weekly processing day (the following Thursday).

    Caution:

    Use of the posting delay code on a daily account may result in delaying the posting of the transactions that would resolve the account.

  4. When an action is taken to:

    1. Increase or decrease an overpayment, and the action is being taken before 6 P.M. local time on Monday:
      1. Input adjustment
      2. Retype or void the notice

    2. Decrease the overpayment, and the action is being taken after 6 P.M. local time on Monday and before 6 P.M. local time on Wednesday:
      1. Input transaction code (TC) 570 to stop the refund.
      2. Input the adjustment with the appropriate blocking series, hold code, and posting delay code
      3. Retype or void the notice

    3. Decrease the overpayment, and the action is being taken after 6 P.M. local time on Wednesday and before 10 P.M. Eastern time on Thursday:
      1. Input NOREFP
      2. Input the adjustment with the appropriate blocking series, hold code, and posting delay code
      3. Retype or void the notice

    4. Increase an overpayment, and the action is being taken after 6 P.M. local time on Monday:
      1. Input adjustment
      2. Label the notice

  5. CFOL Command Code IMFOL will contain an indicator on the screen to identify whether the account is a Daily account or a Weekly account.

  6. when CC NOREFP is initiated, the following chart explains when the TC 846 and systemic TC 841 will be displayed:

    Transaction Code Daily Account TC 846/841 Posting Chart for CFOL Command Codes IDRS Command Codes
    846 Next business day Second business day
    841 Two business days Third business day
    Transaction Code Weekly Account TC 846/841 Posting Chart for CFOL Command Codes IDRS Command Codes
    846 Saturday after freeze releases Monday after freeze releases
    841 Second Saturday after freeze releases Second Monday after freeze releases
  7. Beginning May 1, 2015, it is no longer the responsibility of Notice Review to stop refunds at the request of another area. If a request is received via phone or fax, inform the requestor they should contact their own area to have the refund stopped. If the requestor indicates they do not have access to IDRS or CC NOREF in their profile, they should contact their area to address the issue.

Quality

  1. Notice Accuracy is a part of Balanced Measures, therefore it is critical and necessary to provide appropriate feedback to all functions generating erroneous notices or refunds.

  2. Notice Review will develop a local method for providing feedback to the responsible function.

    Reminder:

    Provide this feedback weekly during the filing season.

  3. Management must ensure that adequate reviews are performed during the employee's on-duty status. AMS will provide the ability for on-line quality review of the Priority Refund Transcripts. Management must input the sample size or percentage in each employee's profile in AMS to ensure a sample of transcripts are included in the Quality rating.

  4. Management must allow time for tax examiners to provide feedback information.

  5. The tax examiner must identify to the lead those situations where an error trend can be established (e.g., same/similar error being committed repeatedly by the same function and/or tax examiner).

  6. The lead will provide this information weekly to the Planning and Analysis analyst responsible for Notice Review.

  7. Use the NRPS Notice Disposition Reports and AMS reports as a feedback tool. There are two basic formats for these reports:

    1. The CP Format provides a breakdown of each notice by selection key for a given cycle.

    2. The Key Total Format provides a breakdown of each selection key by CP number for a given cycle.

  8. Cumulative history reports show year-to-date totals for the above reports. Although the weekly reports show data only for those keys with current cycle activity, the history reports show data for keys that have had activity at any time during the year.

  9. Use historical records to assist in feedback sessions for functions that frequently generate bad notices.

Notice Timeliness

  1. Notice Review should correct and disposition notices timely to minimize negative impact to the taxpayer. , Timely means all of the following:

    1. Close out the notice cycle on or before the end of the Notice Review cycle.

      Note:

      Notice Review cycle is available beginning on Saturday evenings and closes at 2 am Eastern time on the second Monday following the Saturday availability (eight days).

    2. Complete all refunding CP 12’s and 24’s before 10 p.m. Eastern time Thursday.

    3. Input adjustment actions on all other cases by the 23C date of the notice.

  2. Notice Review should schedule and staff personnel to work 100 percent of the notices selected for review.

  3. Whenever a site determines that 100 percent of the sample cannot be completed timely, they will contact the Headquarters Notice Review analyst.

Interest Reduction

  1. Make every reasonable attempt to reduce the amount of interest IRS pays on refunds.

    1. IRS has a 45 day interest-free period (from the later of the due date, filing date, or the date the return was filed in processible form) in which to process taxpayer refunds. By law, refunds not issued within that 45 day period must include credit interest.

    2. Review and, if needed, correct the account without paying unnecessary interest.

  2. Review, correct, and disposition all notices in a timely manner to allow the taxpayer the full amount of time to pay. A taxpayer has only 21 calendar days from the date of the notice (ten business days for notice amounts of $100,000 or more) to pay without incurring interest for periods after the date of the notice.

  3. Refer to IRM 20.2, Interest, for proper guidance when reducing, computing, or discussing interest.

Effectiveness

  1. Reviewing Math Error notices that have historically high error rates is a top priority. Reviewing notices that are usually correct is counterproductive and costly.

  2. For assistance in adjusting the percentage of Math Error notices selected by NRPS, review IRM 3.14.1.3.8, NRPS Local Control File.

Completeness

  1. Review ALL modules and the tax return, if available, as required per Selection Key criteria related to a notice or transcript selected for review. Modules to review include:

    • Entity Module

    • Outstanding Credit Balance Modules

    • Cross-reference Taxpayer Identification Numbers (TIN)s

    • Related Names

    • Freeze Conditions/Codes

    Note:

    This list is by no means all-inclusive. See IRM 3.14.1.6.1,General Review Procedures.

  2. It is the function of Notice Review to review and verify the accuracy of all selected CP Notices in a timely manner. The notice must state accurately and clearly the changes made and the status of the taxpayer's account.

Notice Review Research

  1. There is certain information, generic to all returns, that must be verified. Compare the return to the Computer Paragraph (CP) notice and the information contained in the Notice Review Processing System (NRPS) Package/Control D and/or IDRS to ensure that the information for each tax period is processed correctly.

  2. Use the IDRS Command Codes Job Aid for assistance (e.g. Command Codes (CC) TXMOD, AMDIS, ENMOD, IMFOL, INOLE, INTST, RTVUE, NAMES), which is available on Servicewide Electronic Research Program (SERP).

IRM References

  1. This section lists the IRM references that relate to the Notice Review Function. Functional handbooks contain specific instructions for processing and resolving issues that appear on a given notice.

  2. To ensure a comprehensive review, tax examiners must be aware of these procedures. They are not to be used to reflect errors against the individual employees, but as a means of providing feedback to the functions causing errors or not following procedures. The references are:

    Procedures for See IRM Reference This IRM's Reference (if any)
    Accounting Refund Transactions IRM 3.17.79 No specific reference
    Adjustment Guidelines IRM 21.5.2 IRM 3.14.1.7.5, Entity Adjustments, or IRM 3.14.1.7.6, Tax Adjustments
    Automated Non-Master File Accounting IRM 3.17.46 No specific reference
    Business Tax Returns and Non-Master File Accounts IRM 21.7 No specific reference
    Credit Transfers IRM 21.5.8 IRM 3.14.1.7.7, Credit Transfers
    Erroneous Refunds IRM 21.4.5 IRM 3.14.1.6.7, Erroneous Refunds
    Excess Collections File IRM 3.17.220 IRM 3.14.1.6.8, Excess Collections (XSF) and Unidentified Remittance (URF) Files
    Files Management/Service IRM 3.5.61 No specific reference
    General Adjustments and Guidelines IRM 21.5.1 IRM 3.14.1.7.5 for Entity Adjustments, or IRM 3.14.1.7.6 for Tax Adjustments
    IDRS Command Codes IRM 2.3 and IRM 2.4 No specific reference
    IMF Account Numbers IRM 3.13.5 IRM 3.14.1.6.1.1, Verifying Return Information
    Incoming & Outgoing Correspondence/Letters IRM 21.3.3 IRM 3.14.1.6.9.1, Taxpayer Correspondence
    Individual Tax Returns IRM 21.6 No specific reference
    Individual Income Tax Returns (Code & Edit) IRM 3.11.3 No specific reference
    Individual Income Tax Returns (Error Resolution System - ERS) IRM 3.12.3 No specific reference
    IRS e-file of Individual Income Tax Returns IRM 3.42.5 IRM 3.14.1.6.22,Reprocessing Returns
    Manual Refunds IRM 21.4.4 IRM 3.14.1.6.6, Manual Refunds
    Media Transport and Control IRM 3.13.62 No specific reference
    Operational Guidelines Overview IRM 21.1.3 IRM 3.14.1.1,Program Scope
    Processing Timeliness: Cycles, Criteria, and Critical Dates IRM 3.30.123 IRM 3.14.1.1.8,Customer Account Data Engine 2 (CADE 2)
    Undeliverables (Mail Receiving and Sorting Operations) IRM 3.13.62–54 IRM 3.14.1.6.10, Reviewing Undeliverable Notices
    Unpostables (General) and Unpostables Resolution IRM 3.12.32 and IRM 3.12.179 IRM 3.14.1.6.3,Unpostable Transactions
  3. Submission Processing Campus officials and managers must communicate security standards to their employees and establish methods for enforcement. Refer to IRM 10.4.1, Managers Security Handbook, for more information.

  4. Employees are responsible for taking the required precautions to provide security for documents, information, and property handled while performing official duties.

CP Notices

  1. This section contains information relating to Individual Master File (IMF) and Individual Retirement Account (IRA) and Shared Responsibility Payment (SRP) notices. It includes a description of the notices and information on the data elements.

  2. Computer Paragraph (CP) Notices are the most common form of communication with the taxpayer regarding their account. A CP Notice generates to notify the taxpayer of any change to a specific tax module from the taxpayer’s original return, or in response to taxpayer correspondence. A notice must have accurate and timely information.

  3. A CP Notice is a computer generated message resulting from:

    • An entry of Taxpayer Notice Codes (TPNCs) for a return

    • A Master File analysis of a taxpayer's account

    • Certain transactions posting to an account

  4. Notices generate to:

    • Request information or a payment from a taxpayer

    • Inform or educate a taxpayer

    • Clarify an issue for the taxpayer

  5. The taxpayer must receive a notice (unless otherwise specified in IRM 3.14.1, IMF Notice Review) when there is:

    • A debit balance on the module

    • A math error on the return

    • An Estimated Tax (ES) payment discrepancy

    • Penalty and interest assessed on the module

    • A subsequent change to the taxpayer’s original figures for tax, credits, penalties or net operating loss

    • A Taxpayer Offset Program (TOP) offset or an overpayment offset to another module (issued by Financial Management Service [FMS])

    • A reduced credit elect

  6. Each CP Notice contains the following basic information:

    • Taxpayer’s name

    • Address

    • Taxpayer Identification Number (TIN)

      Note:

      The TIN may be in full form or shortened on the notice.

    • A computer generated message

  7. The Notice Elements describe the conditions which characterize a notice. The principal elements are:

    • Overpayment

    • Balance due

    • Even balance

    • Estimated Tax discrepancy

    • Non-Compute

    • Math Error

    • Adjustment of tax, credits, Failure to File (FTF TC 166 or TC 160) penalty, or Estimated Tax (ES TC 176 or TC 170) penalty

    • A reduced credit elect

    • Offset to other modules or accounts

  8. Overpayment CP Notices 12 and 24 will have a systemically imposed refund hold to allow time for Notice Review to correct erroneous notices before the refund transaction generates. This results in the ability to input an adjustment, credit transfer, or required transaction to correct the notice and associated refund amount prior to the refund being issued to the taxpayer.

    Note:

    The systemic refund hold mentioned on the above notices will apply to direct deposit refunds also.

    1. The taxpayer account reflects a TC 570 with blocking series "55555" .

    2. The systemic hold expires Thursday of the Notice Review cycle. Master File generates the refund transaction (TC 846) during the IMF weekly processing on Thursday evening.

    3. TC 570 can be input to prevent the refund transaction from generating up through 6 P.M. local time on Wednesday.

    4. NOREFP can be input from 6 P.M. local time Wednesday through 10 P.M. eastern time Thursday to request IMF to reverse the systemically generated refund transaction (TC 846) before the refund information is transmitted to Financial Management Services (FMS).

    5. IMF generates the TC 841 reflecting the reversal of the TC 846 when the NOREFP is processed with the IMF weekly processing on Thursday.

  9. Other overpaid notices in OLNR inventory (for example, CP 10, CP 16, CP 21, CP 30A, and CP 51B) do not have a refund hold applied for refunds less than $100,000. A TC 846 is present on these accounts and cannot be intercepted. If these notices are identified as erroneous, follow erroneous refund procedures. See IRM 3.14.1.6.7,Erroneous Refund.

Notice Types and Definitions
  1. Settlement Notices inform the taxpayer of payments due, interest and/or penalties due, math errors, or adjustments made to the taxpayer’s account. There are three types of settlement notices:

    1. Math Error Notices generate when a tax return containing a math error posts to the Master File. The Error Resolution System (ERS) normally identifies and assigns the math errors during pipeline processing. The tax module may include math, clerical, or credit related errors.

    2. Non-Math Error Notices generate when a return with no math error posts to the Master File. The tax module may include tax, credits, penalties, interest, or a combination of all four.

    3. Adjustment Notices generate when certain types of Data Processing (DP) or Examination adjustments post to an account.

  2. Information (Associated) Notices generate when information needs to be sent to the taxpayer. The information can cover many areas:such as Earned Income Credit (EIC), credit elects, offsets of money to other balance due tax modules, or information about the taxpayer’s TIN.

  3. IDRS Notices typically generate five cycles after a settlement notice if the account remains in balance due status. These notices are sometimes referred to as Collection or Tax Delinquent Account (TDA) Notices.

  4. Submission Processing Campus Notices generate to notify the Submission Processing Campus or Area Office of a condition that needs further action to bring the taxpayer’s Master File account into current status. This category includes Refunds, Refund E, and Refund S Transcripts, CP 36, etc.

    Note:

    See Exhibits 3.14.1-8 through Exhibit 3.14.1-8-25 on CP Notices which include images of most of the settlement, information, and IDRS notices. For description of all notices, see Document 6209, IRS Processing Codes and Information, Section 9. Additional notice images can be viewed from the Office of Taxpayer Correspondence: http://gatekeeper.web.irs.gov/snipmain.aspx. The web site can also be accessed through Servicewide Electronic Research Program (SERP).

Data Elements — IMF and IRA Notice List

  1. Each posting cycle, the Notice Review Processing System (NRPS) generates the IMF and IRA Notice Lists. These lists contain information on all notices (except CP 36A and CP 38A) generated from that Submission Processing Campus. These lists are tools for reviewing notice output, requesting tax returns, and controlling notices.

  2. The IMF Notice List shows CP information grouped by inquiry campus, then by CP number in Social Security Number (SSN) order. Refer to the figure below for a description of the Notice List Data Elements. Figure 3.14.1-1.

    Figure 3.14.1-1

    This is an Image: 31974001.gif
     

    Please click here for the text description of the image.

    Item # Title Description
    Item 1 File Page Number File Page Number
    Item 2 Current Date Current Date
    Item 3 File Title IMF NOTICE/AUDIT LIST
    Item 4 Submission Processing Campus Name Submission Processing Campus Name
    Item 5 Page Number Page Number
    Item 6 Output File Number
    • NRP4510 for Pass A and D notices

    • NRP6610 for Pass B and C notices

    Item 7 CP Notice Number CP number of notice
    Item 8 Notice Count Total count
    Item 9 Current Cycle Cycle of the notice list
    Item # Title These Elements Print for Each CP Notice
    Item 10 Social Security Number (SSN) Invalid SSNs have a preceding "1" (e.g., 1-234-56-7890)
    Item 11 Tax Period Field is blank for CP 37
    Item 12 Document Locator Number (DLN)
    • Adjustment DLN for CP 21, CP 22, CP 721, and CP 722

    • Control DLN for all other CPs

    Item 13 Notice Amount or First Notice Document Location Number (DLN) CP# and What Prints for it
    • CP 17 — Net Refund Amount

    • CP 36, CP 36A, CP 36D, CP 36S — First notice DLN

    • CP 39 — Balance after offset

    • CP 42, CP 44, CP 49, CP 749 — Total overpayment amount

    • CP 45 — Amount credited to the account

    • CP 52 — Self-Employment (SE) earnings

    • CP 60 — Corrected balance due

    • All other CPs — Total balance due

    Note:

    All credit amounts in this field print with a trailing "-" . Zero amounts do not print

    Item 14 NRPS Primary Selection Key, Manual Intervention Codes, Sub-Agency Codes, or blank
    • M = Math Error (TPNC) 100

    • C = Centralized Authorization File (CAF) Mismatch

    • B = Blind Trust

    • S = Submission Processing Campus Address

    • Sub-Agency Codes print as "SAG: nn" where "nn" is a two-digit Sub-Agency Number (See Document 6209 IRS Processing Codes and Information)

    Item 15 Notice Sequence Number This is a six-digit number preceded by a letter that indicates the Run (or Pass) number (A, B, C, or D).
  3. IRA Notices also appear on the IMF Notice List.

  4. The Notice List prints in the same sequence as the corresponding notices. A notice sequence number prints for each Notice List line item and provides an easily referenced number for each notice. The Notice List provides a total count of notices issued.

The Notice Review Processing System (NRPS)

  1. NRPS selects Settlement Notices and Adjustment Notices for review by analyzing data from the following sources:

    1. CP Notice Records — NRPS uses this information to print a one page overview "Quick Print" of the selected notice for the review.

    2. Entity and Tax Modules — NRPS uses the Transcript Request System (TRS) to obtain data. Enterprise Computing Center - Martinsburg (ECC-MTB) and Enterprise Computing Center - Memphis (ECC-MEM) send this information to each Submission Processing Campus exclusively for NRPS processing. NRPS prints this information in transcript format as part of the NRPS Package/Control D. Refer to the On-Line NRPS Tax Module Transcript exhibit. See Exhibit 3.14.1-27

    3. Return Transaction File (RTF) — NRPS extracts RTF data records for each selectable settlement notice. NRPS Package/Control D also contain printouts of this information. Refer to the ON—LINE NRPS Return Transaction File (RTF) exhibit. See Exhibit 3.14.1-28

    4. Pending Transactions — NRPS uses data from transactions that have not yet posted at the Submission Processing Campus as part of the selection criteria for certain keys. With CADE 2 daily processing, there is a decrease in pending transactions. Certain transactions post daily and the IDRS/Taxpayer Information File (TIF) update accelerates one week.

      Pending Transaction Sources Possible Pending Transactions
      ECC Resequence File Adjustments (TC 29x/30x)
      Unidentified Remittance Files (URF) Extensions (TC 460)
      Tape Edit Processing (TEP) (Pipeline and Corrected Unpostable files) Merge Transactions (TCs 001, 011, and 04x)
      Generalized Unpostable Framework (GUF) and Current Cycle ECC Unpostable Files Credit Transfers (Doc Code 24, 34, 48, or 58 transactions)
      Excess Collection File (XSF) Credit Transfers (Doc Code 24, 34, 48, or 58 transactions)
      Generalized Mainline Framework (GMF) Error File All other significant (non-zero) transactions
      Block Out of Balance (BOB) File All other significant (non-zero) transactions
      Reject File Payments (TC 610 or TC 670)

Notice Selection Process

  1. NRPS uses sets of criteria called Selection Keys in the selection process. The Selection Keys with similar criteria are grouped within a category that NRPS uses for prioritizing the selection order. Refer to the NRPS Selection Keys table below. The following is a list of categories in selection priority:

    • CATEGORY A — Special Priority

    • CATEGORY B — High Priority Local Selection

    • CATEGORY C — Special Handling Required

    • CATEGORY D — ES Discrepancy

    • CATEGORY E — Pending/Posted Analysis

    • CATEGORY F — Taxpayer Notice Code (Math Error) Notices

      Group Definitions

      Group Definition
      A Multiple TPNCs
      B Prior Year TPNCs
      C Filing Status TPNCs
      D Standard Deduction TPNCs
      E Schedule A TPNCs
      F Schedule D TPNCs
      G Alternative Minimum Tax TPNCs
      H Dependents with unearned income TPNCs
      I Schedules C, E, F, and J TPNCs
      J Earned Income Credit TPNCs
      K Income TPNCs
      L International TPNCs
      M Form W-2 TPNCs
      N Child Tax Credit TPNCs
      O Adjustments to Income TPNCs
      P Payments and Credits TPNCs
      Q Rejects TPNCs
      R Schedule SE TPNCs
      S Schedule H TPNCs
      T Educator Expense/Tuition and Fees Deduction TPNCs
      U Exemptions TPNCs
      V Taxes TPNCs
      W Other Credits TPNCs
      X Elderly/Disabled Credit TPNCs
      Y Child and Dependent Care TPNCs
      Z Exemptions/Standard Deduction TPNCs
    • CATEGORY G — Adjustment Notices

    • CATEGORY H — Condition Analysis

    • CATEGORY J — Low Priority Local Selection

    • CATEGORY K — Miscellaneous

    Key NRPS Selection Key Description Category
    001 Overpaid notice for $100,000 or more. See IRM 3.14.1.6.17.1, Overpayment Notices of $100,000 or More C
    002 Balance due notice issued and a current cycle refund in another tax period C
    003 Overpaid adjustment notice for $100,000 or more. See IRM 3.14.1.6.17.2, Overpayment Adjustment Notices of $100,000 or More C
    004 ES payments displayed on taxpayer copy incomplete or out of balance with tax data. See IRM 3.14.1.6.17.3, Key 004ES Discrepancy Notice with Incomplete or Out of Balance Payment Data C
    008 Balance due notice for $100,000 or more. See IRM 3.14.1.6.17.4, Balance Due Notices of $100,000 or More C
    009 Balance due adjustment notice for $100,000 or more. See IRM 3.14.1.6.17.5, Balance Due Adjustment Notices of $100,000 or More C
    010 Pre-199612 tax year with EIC TPNC. See IRM 3.14.1.6.17.6, Dependent TIN TPNC Assigned to Pre-199612 Return C
    012 Notice is CP 14I, 21I, or CP 22I A
    013 Notices in which the return has a Form 8962. A
    014 Notices in which the return has a Form 8941 with significant amounts in ACA fields. A
    015 Select CPs which have significant amounts in the self-assess 5000A penalty or offset to MFT 35. A
    020 One-time gasoline tax credit D
    021 Withholding claimed on return equals posted ES payments D
    023 One ES payment in the notice was not claimed on the return D
    025 ES credit claimed on the return, but no ES payments are posted in the notice module D
    026 Verify payments received more than two months after period end are not for the subsequent year D
    027 Verify inconsistent payment in the notice module D
    028 ES credit posted, but no ES credit was claimed on the return D
    029 ES payment posted differs by 10 percent or more of ES credits claimed by taxpayer D
    030 ES credit claimed less than ES credits posted equals credit balance in another tax period D
    031 ES credit claimed less than ES credits posted equals one to four pending/posted payments D
    032 ES credit claimed equals one to four pending/posted payments including notice period D
    033 Refund over $1,000 with a $200 or more difference between overpay claimed and allowed D
    034 Pending spouse offset — Check spouse's account, prevent refund from generating refund/spouse notice, transfer credit D
    035 Tax per taxpayer and tax per computer differ by $2,000 or more — Overpayment notice H
    036 Tax per taxpayer and tax per computer differ by $2,000 or more — Balance due notice H
    038 Prior year credit elect/current year refund. Verify taxpayer intentions in current year H
    040 ES Penalty posted differs from Form 2210 ES Penalty amount, no computer condition code (CCC) "P" — Check Form 2210 H
    054 Form 1040 or 1040A with TPNC 141 and total income per computer minus total income per taxpayer equals either Gross IRA Distribution or Gross Pension Annuity. H
    055 TPNC 190 is only TPNC present. H
    057 Overpaid $100,000 or more — current cycle adjustment C
    059 TPNC 209 is present and either Qualified Taxable Dividends or Schedule D Profit/Loss is significant amount. H
    060 Math error notice for tax period 3 or more years prior to current year See IRM 3.14.1.6.17.7, Key 060 — Tax Period More Than 2 Years Prior to Current Tax Year F
    061 Multiple math error explanations See IRM 3.14.1.6.17.8, Key 061 — Multiple Math Error Explanations F
    062 TPNC 211 is present and Qualified Taxable Dividends is greater than Taxable Dividends. H
    063 TPNC is 217 Tentative Tax per Taxpayer is zero or Taxable Income per Computer is greater than zero. H
    064 TPNC 284, 285, 286, 287, 288, 289, 290, 291, 292, or 293 and the control DLN has an ELF FLC. H
    065 Schedule H filed without a return (loose Schedule H ) See IRM 3.14.1.6.17.9, Key 065 — Loose Schedule H K
    066 TPNC is 285 or 287 and Control DLN does not have ELF FLC and Combined Schedule C, E, or F is not zero. H
    067 TPNC is 291 and Schedule D Profit/Loss or Schedule E Profit/Loss is significant. H
    068 TPNC is 547 and tax period is not 200312. H
    069 TPNC is 530,531, 532, 533, 534, or 535 and tax period is not 200112. H
    070 Balance due notice issued and a refund was intercepted for another tax period E
    071 TPNC is 604 and a Dependent TIN is invalid. H
    072 Balance due notice issued and a matching credit transaction is pending E
    073 Notice issued and a money transaction is pending E
    074 Notice issued and an account merge transaction is pending. See IRM 3.14.1.6.17.10, Key 074 — Pending Merge Transaction E
    075 Notice issued and a matching credit transfer transaction is pending. E
    076 Balance due notice issued and credit is available for possible offset E
    077 CP 14 or CP 60 (FS = 3) issued and credit is available in another tax period E
    078 Delinquency penalty assessed, but extension of time to file (TC 460) pending E
    079 TPNC is 218 and Tentative Tax per Taxpayer is zero. H
    081 CP 21 or CP 22 for Tax Year 93 and Reason Code 023 G
    083 Adjustment notice issued and the credit is refunding G
    085 Requested by another area outside Notice Review B
    086 Requested by Notice Review B
    087 Requested by Notice Review B
    088 Requested by Notice Review B
    089 Requested by Notice Review B
    090 SSN — Requested by Notice Review B
    091 ERS DLN — Requested by Notice Review. See IRM 3.14.1.6.17.11, Key 091 — Selection Requested by Error Resolution (ERS) B
    092 Local Selection — CP Requested By Notice Review J
    093 Money amount range — Requested by Notice Review B
    094 Notice matches the requested Partial or Full DLN (match on the significant digits only) B
    095 CP number/Penalty code — Requested by Notice Review B
    096 Adjustment reason code — Requested by Notice Review B
    097 ZIP Code — Requested by Notice Review B
    098 SSN/tax period — Requested by Notice Review B
    099 Requested by Notice Review B
    100 TPNC explanations not computer-generated. See IRM 3.14.1.6.17.12, Key 100 — Non-Standard TPNC Explanations Not Computer Generated A
    101 Tax computed based on a single taxpayer rate F
    102 Tax computed based on married filing joint rate F
    103 Tax computed based on married filing separate rate F
    104 Tax computed based on head of household F
    105 Tax computed based on qualifying widow rate F
    106 Tax computed using married joint rate - year of spouse's death F
    107 Tax computed based on single or head of household rate, not qualifying widow F
    108 Tax computed based on single rate, dependent name missing F
    109 Tax computed based on married filing separate rate with spouse as dependent F
    110 We changed your filing status to single - claimed as dependent on other return F
    111 Converted to Form 1040 F
    112 Negative state income tax refund more than standard deduction and should be claimed on Schedule A F
    113 Welfare payments, workers compensation, etc., shown as income F
    114 Income from Form W-2(s) and/or Form 1099(s) not included in income section F
    115 Total adjusted to include tips from Form 4137 F
    116 Total interest income transferred incorrectly to page 1 F
    117 Excludable Savings Bond interest disallowed — Married Filing Separately (FS3) F
    119 Schedule B-Schedule 1 ordinary dividends — computation and/or transfer error F
    120 Error made on state income tax payments F
    121 Schedule C/C-EZ computation and/or transfer error F
    122 Schedule D — computation and/or transfer error (limited to $3,000/$1,500 Married Filing Separately [FS3]) F
    123 Capital loss carryover from Form 4797 transferred incorrectly to income section F
    124 IRA loss amount must be on Schedule A subject to 2 percent limitation F
    125 Unemployment compensation repaid must be on Schedule A subject to 2 percent limitation F
    126 Schedule E computation and/or transfer error F
    127 Schedule F computation and/or transfer error F
    128 Schedules C, E, or F adjusted based on Form 6198 or Form 8582 limitations F
    129 We disallowed the negative amount for unemployment compensation F
    130 Social Security Benefits repaid must be on Schedule A subject to 2 percent limitation F
    131 Error computing taxable amount of Social Security benefits F
    132 We adjusted your Social Security benefits — negative amount claimed F
    133 Gambling losses disallowed, deduction must be reported on Schedule A F
    134 Disallowed child's income from Form 8814, because income greater than maximum allowed for tax year F
    135 United States Department of Agriculture (USDA) Settlement Income moved from Form 1040, line 21 to Schedule F, line 10 F
    136 Total income adjusted to include business property loss from Form 4684 F
    138 Total income adjusted to include employer-provided dependent care benefits F
    139 Adjustments to income changed to exclude Moving Expenses (Form 3903) already on Schedule A F
    140 Adjustments to income changed to move Moving Expenses (Form 3903) to Schedule A F
    141 Error adding income amounts on page 1 F
    142 Educator expenses adjusted — claimed more than the amount allowed for filing status F
    143 Disallowed Tuition and Fees Deduction — already claimed Education Credit F
    144 Tuition and Fees (Form 8917) computation error F
    145 Disallowed Tuition and Fees — missing Form 8917 F
    147 Disallowed IRA deduction — exceeded maximum amount F
    148 Modified AGI exceeds limitation for figuring IRA deduction F
    149 We disallowed your deduction for an IRA contribution F
    150 Changed Schedule A — some miscellaneous deductions not subject to 2 percent limitation F
    151 Disallowed student loan interest deduction — Married Filing Separately or AGI exceeds maximum amount F
    152 Changed student loan interest deduction — computation error F
    153 Health Savings Account — Error computing deduction and/or transferring to page 1 F
    154 Tuition and fees deduction disallowed — Married Filing Separately, AGI exceeds limitation, or dependent on another return F
    155 Tuition and fees deduction adjusted — filing status limitation F
    157 Changed Archer MSA deduction (Form 8853) — exceeded allowable amount F
    158 Error was made in figuring your deduction for SE Tax F
    159 SE Tax deduction disallowed — use Form 4137 F
    160 SE Tax deduction disallowed — no SE Tax reported F
    161 Adjustment for tax deferred savings plan disallowed — wages on Form W-2 already reflect any adjustments F
    162 Amount of tax on page 2 changes — error figuring or transferring part III, Form 8889. F
    163 Changed amount claimed as Child Tax Credit- Missing or Incomplete Form 8812 F
    164 Disallowed alimony paid to spouse claimed as exemption F
    165 Disallowed combat pay excluded from taxable income F
    166 Employee business expenses must be claimed as an itemized deduction F
    167 Disallowed Qualified Performing Artist (QPA) expenses F
    168 Disallowed Worker's Compensation deduction for line of duty injury F
    169 Disallowed jury pay deduction — not included in income F
    170 Changed amount of ordinary dividends on page 1 — cannot be less than amount of qualified dividends F
    171 Disallowed health savings account deduction — missing or incomplete Form 8889 F
    172 Disallowed Archer MSA amount on page 1 — missing or incomplete Form 8853 F
    173 Disallowed the domestic production activities deduction claimed on page 1 of your tax return. F
    174 Error in computing adjustments to income on page 1 F
    175 Error computing adjusted gross income page 1 F
    176 AGI transferred from page 1 to page 2 incorrectly F
    177 Error computing medical/dental expenses on Schedule A F
    178 Error computing taxes paid on Schedule A F
    179 Error computing interest expenses on Schedule A F
    180 Error computing contributions on Schedule A or exceeds 1/2 AGI F
    181 Changed total gifts to charity on Schedule A — missing Form 8283 F
    182 Changed casualties and theft losses on Schedule A — Form 4684 computation or transfer error to Schedule A F
    183 Error computing total miscellaneous expenses on Schedule A F
    184 Gambling losses exceeding winnings were disallowed F
    185 Schedule A — Other miscellaneous deductions adjusted due to two percent limitation F
    186 Limitation on itemized deductions due to AGI F
    187 Schedule A — Error computing total itemized deductions and/or transferring to page 2 F
    188 We made adjustments to taxable income based on your filing status F
    189 We used your itemized deduction instead of standard deduction F
    190 Standard deduction used in lieu of itemized due to other changes F
    191 Error computing the allowable deduction for dependent on another return F
    192 Error computing additional standard deduction for blindness or over 65 F
    193 Zero not entered on Form 1040 when deductions not itemized — Married Filing Separately F
    194 Error entering standard deduction — amount not entered or amount not correct for Filing Status F
    195 Changed total exemption amount — taxpayer claimed as dependent on other return F
    196 Claim for both standard and itemized deductions disallowed F
    197 Tax recomputed — Taxpayer claimed as dependent on another person's return F
    198 Error entering combined standard deduction and personal exemption amount F
    199 Error made subtracting deductions from adjusted gross income F
    200 Error computing exemptions amount F
    201 Incorrect limitations on exemptions due to AGI F
    202 Taxpayer claimed as a dependent on another return F
    203 We applied your exemption — Married Filing Jointly (FS2) with tax liability F
    204 Filing status code not compatible with claimed spouse F
    205 We did not allow your personal exemption — Invalid or missing TIN F
    206 Spouse's exemption disallowed — Invalid or missing TIN F
    207 Gambling loss greater than standard deduction - subject to Schedule A 2 percent limitation F
    208 Error computing taxable income amount F
    209 Tax entered incorrectly from tax table or tax rate schedules F
    210 Tax recomputed using tax table - not qualified for tax computation using Part IV, Schedule D F
    211 Tax recomputed using worksheet or maximum capital gains rates F
    212 Schedule J computation and/or transfer error F
    213 Schedule J — Unable to compute tax due to previous math error F
    214 Form 8615 transfer error F
    215 Investment income less than minimum amount, Form 8615 not required F
    216 Form 8814 — Error figuring Part I and/or transferring that amount to page 1 F
    217 Error figuring tax — Tax adjusted to zero F
    218 IRS figured the tax F
    219 Error computing tax plus additional tax on Form 1040 F
    220 Form 8615 — Unable to compute tax due to previous math error F
    221 We recomputed tax liability by deleting taxes paid on Form 8615 F
    222 Error figuring or transferring tax on lump sum distribution on Form 4972 F
    225 Schedule J not used in Form 6251 computation F
    226 Error on Form 6251 computing alternative minimum taxable income F
    227 Form 6251 — Error figuring tentative minimum tax F
    228 Error transferring Alternative Minimum Tax from Form 6251 to Form 1040 F
    229 Form 6251 — Computation error due to presence of Form 8844 F
    230 Error adding Alternative Minimum Tax to Form 1040 tentative tax F
    231 Foreign tax credit limited due to Form 6251 F
    232 Form 2441 computation and/or transfer error F
    233 Child Care Credit disallowed — No earned income shown for taxpayer or spouse F
    234 Child Care Credit disallowed — No provider TIN F
    235 Child Care Credit disallowed — Child on Form 2441 has missing SSN F
    236 Form 2441 — Prior year expenses disallowed F
    237 Form 2441 — Part III computation and/or transfer error F
    238 Child Care Credit disallowed — Spouse or dependent cannot be provider F
    239 Child Care Credit disallowed — married filing separately F
    240 Schedule R computation and/or transfer error F
    241 IRS figured credit for elderly/disabled using Schedule R F
    242 Disallowed education credits — Student TIN missing/invalid, Filing Status is Married Filing Separately (FS3), AGI exceeded maximum for Filing Status, or student not claimed as exemption F
    243 Form 8863 computation and/or transfer error F
    244 Form 8880 computation disallowed — AGI exceeds limitation F
    245 Form 8880 computation adjusted — Amount exceeds filing status limitation F
    246 Retirement savings contribution credit disallowed — Age disqualification F
    247 Form 8880 computation and/or transfer error F
    248 Child Care Credit disallowed — Invalid Dependent TIN F
    251 Child Tax Credit and/or Additional Child Tax Credit reduced/removed — Age requirement not met F
    252 Child Tax Credit and/or Additional Child Tax Credit reduced/removed — No amount entered or amount incorrect based on boxes checked F
    253 Error computing Mortgage Interest/Adoption/DC Home Credit F
    254 Error computing Credit for Qualified Adoption Expenses on Form 8839 Or Xfer to return pg 2 error F
    255 Disallowed Adoption Credit – Form 8839 incomplete or missing F
    256 Changed amt of exempt for non res child – incomplete documentation F
    257 Disallowed Mortgage Int Credit – Mortgage interest paid should be on Schedule A F
    260 Form 3800 computation and/or transfer error F
    264 Recomputed total credits – addition in error F
    265 Recomputed tax minus total credits – subtraction error F
    266 Changed total credits (return pg 2) – credit not limited to tax minus Alternative Minimum tax Form 6251 F
    267 Credit limited by Alternative Minimum Tax per Form 6251 F
    268 Schedule SE computation and/or transfer error F
    269 Schedule SE adjusted to reflect true net earnings before multiplying by .9235 F
    270 Error transferring net farm profit from Schedule F to Schedule SE F
    271 Error transferring net profit/loss from Schedule C to Schedule SE F
    272 Optional method on Schedule SE disallowed — Not qualified F
    273 No Self-Employment Tax if SE Income is less than $434.00 F
    274 Changed SS/MED tax on unreported tip income – computation (F4137) or transfer to return pg 2 error F
    275 Error transferring IRA tax from Form 5329 to Form 1040 F
    276 Advance EIC payments reported on Form 1040 do not agree with Form W-2 and other documents F
    277 Error computing federal unemployment tax part of Schedule H F
    278 Schedule H — Error figuring or totaling taxes F
    279 Deleted household employment taxes – cash wages (Schedule H) not enough to owe SS/MED taxes F
    280 Schedule H computation and/or transfer error F
    281 Total tax adjusted to exclude Form 8697 refundable interest – form should be filed separately F
    282 Error computing total tax on Page 2 F
    283 Total tax withheld does not agree with Form W-2(s) or other documents F
    284 Earned Income Credit computed by IRS F
    285 Error computing earned income credit on Form 1040 F
    286 Disallowed EIC – FS is married separate F
    287 EIC disallowed due to maximum AGI F
    288 EIC disallowed due to lack of earned income F
    290 EIC not allowed — Taxpayer claimed as dependent on another return F
    291 Disallowed EIC – investment income exceeds amt allowed for credit F
    292 IRS figured EIC — Taxpayer may be eligible for larger EIC F
    293 EIC disallowed — Taxpayer younger than 25 or 65 or older F
    294 Excess Social Security or RRTA tax entered incorrectly F
    296 Form 4136 computation and/or transfer error F
    297 Error computing total payments F
    298 Deleted state income taxes from federal taxes – IRS does not collect state taxes F
    299 Error computing balance due or overpayment amount F
    503 Moving Expenses moved from Schedule A to page 1 F
    506 Amt claimed for education expenses deduction exceeds limit based on FS F
    507 Disallow other payments claimed on pg 2 – missing form F
    508 Reimbursed Business Expenses disallowed on page 1 — 1990 and later F
    509 Health Savings Account Deduction disallowed — Claimed prior to 2004 F
    510 Limit on total itemized deductions on Schedule A F
    512 Changed amt claimed as tuition and fees – computation error on Form 8917 F
         
    513 We didn’t allow the amount claimed as Foreign Tax Credit on page 2 F
    515 Recomputed tax –10 year averaging must be used to compute tax on total distributions F
    521 Disallowed Residential Energy Credit – missing or incomplete Form 5695 F
    522 We changed the amount claimed as alternative motor vehicle credit on page 2 of your tax return because there was an error on Form 8910, Alternative Motor Vehicle Credit. F
    523 We changed the amount claimed as qualified plug-in electric drive motor vehicle credit on page 2- error on Form 8936 F
    524 We changed the amount claimed as qualified plug-in electric drive motor vehicle credit on page 2- error on Form 8834 F
    526 We changed the amount claimed as alternative motor vehicle credit on Form 3800. You figured Form 8910 incorrectly. F
    527 We changed the amount claimed as alternative motor vehicle credit on Form 3800. You figured the credit in error or transferred it in error from Form 8936. F
    528 We changed the amount claimed as qualified electric vehicle credit on Form 3800. You figured Form 8834 incorrectly. F
    531 Rate Reduction Credit not allowed — Maximum allowed in 2001 F
    532 Rate Reduction Credit — Error figuring or entering F
    533 Rate Reduction Credit disallowed — Taxpayer claimed as dependent on another return F
    534 Tax computed using 10 percent tax bracket – TY 2001 and claimed as dependent on another return F
    535 Rate Reduction Credit disallowed — Tax year not 2001 F
    536 Changed total EXEMP amt – computation Form 8914 or transfer to return page 2 error F
    537 Changed total EXEMP amt –TIN missing or invalid Form 8914 F
    538 Changed total EXEMP amt –TIN of person displaced by hurricane Form 8914 matches primary or secondary taxpayer or dependent on page 2 F
    539 Changed EIC or Additional Child Tax Credit – prior year earned income not used in both computations F
    540 Earned income credit disallowed, Form 1040 indicates not qualified F
    541 EIC changed — Non-taxable earned income source not provided F
    542 Adjusted your EIC — Modified AGI not computed correctly F
    543 EIC changed — Incorrect nontaxable earned income F
    544 EIC changed — Nontaxable earned income from Form W-2(s) was not included F
    546 We can't allow Additional Child Tax Credit — Need three or more qualifying children F
    547 Child or Additional Tax Credit changed — Advance payment received in 2003 F
    550 Disallowed Loss on Schedule C, E or F —Form 6198 not filed F
    551 Moving expenses disallowed — Form 3903/F missing or incomplete F
    552 Casualty/theft disallowed, Form 4684 missing or incomplete F
    553 Disallow employee business expense — Form 2106 incomplete or missing F
    554 Standard deduction used since Schedule A was missing/incomplete F
    555 Substituted additional standard deduction for itemized deduction—lowers tax F
    556 The Residential Energy Credit in Part II of Form 5695 is limited to $ 500 for an eligible property. F
    557 Disallow the deduction amount for domestic production activities on page 1 of your tax return. F
    558 Tax adjusted based on information received F
    559 Recomputed tax at maximum rate -parents taxable income not provided on Form 8615 F
    560 Changed computations for long term gains to short term —Schedule D not attached F
    561 Exceeded limit for residential energy credit on Form 5695 F
    562 Child Care Credit disallowed — Number of months for students, disabled, or looking for work missing F
    563 Child Care Credit disallowed, Form 2441 or Schedule 1 missing or incomplete F
    564 Disallowed child/dependent care credit — SSN does not match SSA records F
    565 Elderly/Disabled Credit disallowed — Schedule R or Schedule 3 missing or incomplete F
    566 Disallowed Health savings account deduction — missing or incomplete Form 8889 F
    567 Disallowed Residential energy credit — missing or incomplete Form 5695 F
    568 We cannot allow your Hope and/or Lifetime Learning Credit — Form 8863 incomplete or not attached F
    569 Retirement Savings Contribution Credit disallowed — Form 8880 missing or incomplete F
    570 Disallowed refundable credit for prior year minimum tax — missing or incomplete Form 8801 F
    572 Disallowed/Limited residential energy credit — limited to amount of tentative tax liability F
    573 DC Home buyer credit disallowed — Form 8859 incomplete or not attached F
    575 Disallowed other (general business) credit — Form 3800 missing/incomplete F
    580 SE Tax not computed by taxpayer — IRS computed (EIC related) F
    581 Unemployment compensation repaid subject to limit on Schedule A — Return adjusted F
    582 Form W-2(s) missing, cannot verify tax withheld amount F
    583 Cannot file Schedule A and Schedule L— return adjusted for max benefit F
    584 Denied claim for refund American Opportunity Credit — missing or incomplete Form 8863 F
    585 EIC disallowed — Schedule EIC incomplete or missing F
    586 Changed EIC —Form W-2 and wages claimed don't match F
    587 Reduce credit on Form 5695 F
    588 Adjusted tax on unemployment compensation F
    589 Disallowed new motor vehicle taxes Schedule A — cannot claim with sales tax F
    590 Excess Social Security or RRTA tax withheld disallowed, Form W-2(s) missing F
    592 We cannot allow your Additional Child Tax Credit — Schedule 8812 incomplete or not attached F
    593 Disallowed Additional standard deduction for Real Estate Taxes — Schedule A present F
    594 Health Coverage Tax Credit disallowed — Not eligible per IRS records F
    595 Regulated Investment Company Credit disallowed, Form 2439 missing/incomplete F
    596 Changed Credit for Federal Tax paid on oils/fuels — Form 4136 missing/incomplete F
    597 Disallowed tuition and fees credit — Form 8917 missing F
    598 Change exemption — Form 8332/2120- Divorce decree missing/incomplete F
    600 Schedule L figured or amount transferred incorrectly on Form 1040A F
    601 Changed Standard Deduction due to limitations F
    602 Schedule L missing or incomplete F
    603 Disallowed First Time Home buyer Credit — invalid purchase date F
    604 Disallowed Child/dependent care expense, education credits, (additional) Child Tax Credit Missing dependent SSN/individual taxpayer identification number (ITIN) F
    605 Invalid dependent SSN/ITIN F
    606 Exemption disallowed for dependent born after end of tax year F
    607 Primary Exemption disallowed — Taxpayer deceased prior to tax period F
    608 Secondary Exemption disallowed — Taxpayer deceased prior to tax period F
    609 Changed return — SS records show dependent(s) deceased F
    610 Disallowed Dependent Exemption — born and died with no proof F
    613 We didn’t allow the amount claimed as credit for federal telephone excise tax on your return because the credit can only be claimed for tax year 2006. F
    614 Changed amount of SSN and Medicare Tax on Wages — error on Form 8919 F
    615 Recovery Rebate Credit Disallowed — SSN missing or incomplete F
    616 Recovery Rebate Credit Disallowed — spouse's SSN missing or incomplete F
    617 Recovery Rebate Credit changed — Dependent SSN missing or incomplete F
    618 Recovery Rebate Credit Disallowed — Dependent on another return F
    619 Recovery Rebate Credit changed — qualifying Dependent over 17 F
    620 Recovery Rebate Credit Disallowed — earned income is less than $3000 F
    621 Recovery Rebate Credit changed — error computing the credit F
    622 Recovery Rebate Credit changed — error applying the AGI limit F
    623 Recovery Rebate Credit Disallowed — no qualifying income F
    624 We computed your recovery rebate credit F
    625 We changed the amount claimed as Child Tax Credit and/or Additional Child Tax Credit on Page 2 of your tax return F
    627 We did not allow part or all of the amount claimed for Child Tax Credit on page 2 of your tax return F
    628 We changed the amount claimed as Child Tax Credit and/or Additional Child Tax Credit on your Form 1040 F
    631 Disallowed First Time Home buyer Credit — location and / or time line disqualifies F
    632 Disallowed First Time Home buyer Credit — home purchased after filing F
    633 Disallowed DC First Time Home buyer credit since you claimed FTHBC F
    634 Disallowed First Time Home buyer Credit — Since you claimed DC FTHBC F
    635 Disallowed First Time Home buyer Credit — AGI exceeds limit F
    636 Disallowed First Time Home buyer Credit — Already claimed in 2008 F
    637 Disallowed First Time Home buyer Credit — do not meet age requirements F
    638 Disallowed First Time Home buyer Credit — cannot purchase from a relative F
    639 Disallowed First Time Home buyer Credit — purchase price exceeds limit F
    640 Disallowed First Time Home buyer Credit — copy of settlement not attached F
    641 Disallowed First Time Home buyer Credit — ineligible due to prior home ownership F
    642 We didn’t allow your personal exemption on your tax return because your individual taxpayer identification number (ITIN) is inactive. Each exemption on your tax return must have an active ITIN or other valid taxpayer identification number (TIN). F
    643 We didn’t allow your spouse’s personal exemption on your tax return because your spouse’s individual taxpayer identification number (ITIN) is inactive. Each exemption on your tax return must have an active ITIN or other valid taxpayer identification number (TIN). F
    644 Each exemption on your tax return must have an active individual taxpayer identification number (ITIN) or other valid taxpayer identification number (TIN). The ITIN for one or more of your dependents is inactive. As a result, we didn’t allow those exemptions on page 2 of your tax return. F
    645 We didn’t allow some or all of the education credits you reported on Form 8863, Education Credits (American Opportunity and Lifetime Learning Credits), and claimed on lines 50 and 68 of your Form 1040 because one or more students listed on the form has an inactive individual taxpayer identification number (ITIN). F
    646 We didn’t allow some or all of the amount you claimed as credit for child and dependent care expenses on page 2 of your tax return because the individual taxpayer identification number (ITIN) for one or more qualifying persons is inactive. F
    647 Disallowed qualified mortgage insurance premiums on SCH A — AGI limit exceeded F
    648 According to our records an installment payment is due for the First-Time Homebuyer Credit received with your 2008 tax return. F
    649 Changed amount of First Time Home buyer Credit repayment — error on Form 5405 F
    650 Deceased taxpayer not eligible for income exclusion F
    653 EIC not allowed — No Form 8862 F
    654 Disallow Making Work Pay and Government Retiree Credit — must be tax year 2009 F
    655 Computation or transfer error from Form 8863 F
    656 Denied claim for refund American Opportunity Credit — missing or incomplete Form 8863 F
    658 Disallow Making Work Pay — missing SSN F
    659 Error transferring First Time Home buyer Credit from line 16 Form 5405 F
    660 Error figuring First Time Home buyer Credit on line 16 Form 5405 F
    661 Error figuring First Time Home buyer Credit on line 10 Form 5405 F
    662 Error transferring First Time Home buyer Credit on line 10 Form 5405 F
    663 Recomputed Making Work Pay Credit — error applying earned income limitation F
    664 Recomputed Making Work Pay and Government Retiree credit based on corrected 2009 input F
    665 We changed the amount claimed as Making Work Pay and Government Retiree Credit on your return. F
    667 Recomputed Making Work Pay and Government Retiree credit — calculation error F
    668 Changed Health Coverage Tax Credit — computation Form 8885 and/or transfer error F
    669 Form 8885 credit reduced or removed — Not eligible and/or line 2 support not attached to return F
    670 Form 8885 credit reduced or disallowed due to Medicare status F
    673 Disallow Refundable Education Credit — SSN missing from Form 8863 F
    674 Disallow Refundable Education Credit — SSN on Form 8863 does not match SSA records F
    675 Disallow Refundable Education Credit — TP Married Filing Separately F
    676 Disallow Refundable Education Credit — TP dependent on another return F
    677 Disallow Refundable Education Credit — TP does not meet AGI requirements F
    678 Changed refundable Education Credit — error on Form 8863 F
    680 Changed First Time Home buyer Credit — Error Figuring/Transferring Form 5405 F
    681 Changed First Time Home buyer Credit — exceeds limit F
    682 Changed First Time Home buyer Credit — subject to AGI limitation F
    683 Disallowed First Time Home buyer Credit — Form 5405 missing/incomplete F
    684 Disallowed First Time Home buyer Credit — home must be in US F
    685 Disallowed First Time Home buyer Credit — purchase not within eligible dates F
    686 Disallowed First Time Home buyer Credit — must be at least 18 years old F
    687 Disallowed First Time Home buyer Credit — unable to verify age of purchaser F
    688 Disallowed First Time Home buyer Credit — taxpayer eligible to be a dependent on another return F
    689 Disallowed First Time Home buyer Credit — home cannot be purchased from relative F
    690 Disallowed First Time Home buyer Credit — home purchased prior to tax year F
    691 Disallowed First Time Home buyer Credit — missing settlement statement F
    692 Disallowed First Time Home buyer Credit — taxpayer exceeds income limits F
    693 Disallow credit on Line 71, Form 1040 F
    701 We did not allow your EIC or your spouse's exemption — Invalid/missing secondary SSN F
    702 We did not allow your EIC — Primary or secondary TIN issued by IRS F
    703 Changed standard deduction figured on Schedule L — limits figured incorrectly F
    741 Changed EIC — SSA's birth dates(s) of qualified child(ren) show age requirement not met F
    743 EIC adjusted because of missing or invalid dependent SSN F
    745 We reduced or removed your EIC — Child has ITIN F
    748 Personal exemption and EIC disallowed — Invalid SSN F
    750 Part or all of your EIC not allowed – child(ren) did not meet age requirement F
    751 Part or all of your EIC not allowed – child(ren) did not meet relationship requirement F
    752 Part or all of your EIC not allowed – child(ren) did not live with you required time F
    753 Credit amount changed on Form 3800 – incorrect total from Form 8941 F
    754 Credit not allowed for Small Employer Health Insurance Premium on Form 3800 and Form 8941 missing or incomplete F
    755 Credit amount changed for Small Employer Health Insurance Premium on Form 3800-more than 25 employees F
    756 Credit amount changed for Small Employer Health Insurance Premiums on Form 3800-more than 50K average wages F
    757 Changed amount of First Time Home buyer credit repayment-No repayment owed F
    758 Refundable Education Credit not allowed-Student not Dependent on Form 8863 F
    759 Tax return adjusted-Income or Withholding from multiple tax years F
    760 Some or all of Earned Income Credit not allowed-Statutory wages not supported F
    761 Form 2106 Employee Business Expense was incomplete or missing F
    763 Medical and Dental Amount changed on Schedule A- Wrong percentage used. F
    764 Additional Medicare Tax changed Form 8959- Error computing Part I F
    765 Additional Medicare Tax changed Form 8959- Error computing Part II F
    766 Additional Medicare Tax changed Form 8959- Error computing Part III F
    767 Changed the amount reported as Additional Medicare Tax Form 8959 F
    768 Net Investment Tax changed-Error computing total investment income Form 8960 F
    769 Net Investment Tax changed- Error computing total deductions and modifications Form 8960 F
    770 Net Investment Tax changed - Error computing Part III Line 16 Form 8960 Net Investment Tax F
    771 Net Investment Tax changed - Error computing Part III Line 17 Form 8960 Net Investment Tax F
    772 Changed Tax Amount/Incorrectly transferred from Form 8959. F
    776 Changed the amount of Form 8960 Net Investment Income. There was an error transferring the amount on Page 2 incorrectly. F
    777 Changed the amount of Form 8859 Additional Medicare Tax. There was an error transferring the amount on Page 2 incorrectly. F
    780 Return adjusted for disallowed child or additional child tax credit. F
    781 Return was adjusted/error in the amount of statutory credits return was adjusted. F
    782 First Time Home Buyers amount adjusted/records indicate no repayment credit owed. F
    783 EIC not allowed\unable to determine spouse age and child eligibility. F
    784 Monthly contribution amount changed on Form 8962- Incorrectly calculated in Part I. F
    785 Monthly contribution amount changed on Form 8962- Incorrectly calculated in Part 5. F
    786 Total Premium Tax Credit amount changed on Form 8962. Incorrectly calculated F
    787 Advance Premium Tax Credit amount changed on Form 8962. Incorrectly calculated F
    788 Changed the amount you claimed as Net Premium Tax credit on Page 2 because there was an error on Form 8962. F
    789 Changed the amount of Advance Premium Tax Credit Repayment on Page 2 because there was an error on Form 8962. F
    790 We did not allow the Net Premium Tax Credit claimed because of your Married Filing Separate status. F
    791 We did not allow the Net Premium Tax Credit claimed because your income is greater than 400% poverty line. F
    792 We did not allow the Net Premium Tax Credit claimed because you did not claim any exemptions on your return. F
    793 We did not allow the Alternative Calculation for Marriage from Part 5, Form 8962. F
    794 We did not allow the Net Premium Tax Credit claimed on Line 68 of your Form 1040. Form 8962 was not attached to the return. F
    800 We did not allow the credit claimed for Small Employer Health Insurance Premiums because you did not participate in the SHOP exchange. F
    801 We did not allow the amount claimed as a write in on the front of your tax return. The write in is not an allowable adjustment to income. F
    802 We did not allow all or part of the Refundable Education Credit on Page 2 of your tax return because you did not claim a dependent exemption for the student(s) on Form 8863. F
    803 We did allow the amount of Additional Child Tax Credit claimed on Page 2 of your tax return. Information on your return indicates that you do not qualify for this credit. F
    804 Negative deductions may not be claimed on Schedule A F
    805 We didn’t allow the amount claimed as a deduction for educator expenses reported on page 1 of your tax return because you can be claimed as a dependent on someone else’s return F
    806 We did not allow the amount claimed on Page 2 of your tax return for any dependent who did not meet substantial presence test. F
    807 We did not allow the credit(s) you claimed on Page 2 of your tax return. The amount you entered is not an allowable credit. F
    808 EIC-Disallowed- SSN (as ITINs cannot get EIC) for Dependent not assigned by due date F
    809 Education Credit Disallowed on Form 8863- TIN not assigned by due date F
    810 Child Tax Credit Disallowed on Form 8863- TIN not assigned by due date F
    811 We estimated a shared responsibility payment (SRP) on your tax return because you didn’t respond to our request. The law allows us to assess the SRP for not having minimum essential health coverage for you and, if applicable, your spouse and all dependents listed on your tax return, per Internal Revenue Code Section 5000A. We adjusted your tax return accordingly. F
    812 We changed the refund amount, or the amount you owe on your tax return, based on the shared responsibility payment information you provided in response to our correspondence. F
    813 We changed the amount of the shared responsibility payment (SRP) you reported on your tax return. The maximum amount of the SRP reported on your tax return is limited to $2,484 per year for an individual and $12,420 per year for a family with five or more members. F
    814 We didn’t allow the amount claimed as Earned Income Credit on your tax return. Our records indicate that you are banned from claiming Earned Income Credit for two tax years. F
    815 We didn’t allow the amount claimed as Earned Income Credit on your tax return. Our records indicate that you are banned from claiming Earned Income Credit for this tax year. F
    816 We didn’t allow the amount claimed as Earned Income Credit on your tax return. Our records indicate that you are banned from claiming Earned Income Credit for ten taxyears. F
    817 The Individual Taxpayer Identification Number (ITIN) for you and/or your spouse has expired. As a result, we didn’t allow certain credits on your return claimed for one or more of your dependents. This change may affect your taxable income, tax, or any of the following credits: ACTC, CTC, and/or Education Credits. F
    818 You and/or your spouse’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) was missing or the last name provided doesn’t match our records or the records provided by the Social Security Administration. As a result, we didn’t allow certain credits on your return claimed for one or more of your dependents. This change may affect your taxable income, tax, or any of the following credits: ACTC, CTC, and/or Education Credits. F
    819 Disallowed amount claimed as Child Tax Credit and/or Additional Child Tax Credit on your tax return. Banned the credit for this year. F
    820 Disallowed amount claimed as Child Tax Credit and/or Additional Child Tax Credit on your tax return. Banned the credit for two tax years. F
    822 Disallowed amount claimed as Education Credit (AOTC) on your tax return. Banned the credit for this year. F
    823 Disallowed amount claimed as Education Credit (AOTC) on your tax return. Banned the credit for two tax years. F

    Note:

    Refer to IRM 3.38.147.3.7.1, Notice Review Processing System (NRPS) International Selection Keys.

  2. Within a category, NRPS assigns a priority to each Selection Key.

  3. NRPS performs the following steps for each Selectable Notice Record in the notice stream until the selection limit is reached, or until all notice records are processed:

    1. Begin with Category A.

    2. Use the highest priority Selection Key in the Category.

    3. If the Notice Record meets the Selection Key Criteria, go to step 8.

    4. If the current Selection Key is the last in the Category, go to step 6.

    5. Use the next highest priority Selection Key in the Category, go to step 3.

    6. If there are no more NRPS Categories remaining, go to step 16.

    7. Move to the next Category, go to step 2.

    8. Assign the current Selection Key as the Primary Selection Key.

    9. If there are no more NRPS Categories remaining, go to step 15.

    10. Move to the next Category.

    11. Use the highest priority Selection Key in the Category.

    12. If the Notice Record meets the Selection Key Criteria, go to step 14.

    13. If the current Selection Key is the last in the Category, go to step 9.

    14. Assign the current Selection Key as the Secondary Selection Key, go to step 17.

    15. Do not assign a Secondary Selection Key, go to step 17.

    16. Do not select the notice.

    17. End NRPS Processing.

  4. The NRPS selection limit by default is 14,000 notices. Each Submission Processing Campus may increase this limit (via the Local Control File) by any number, and to a selection as high as 50,000. As the number of selections increases, however, the following changes occur in the selection process:

    If the number of notices selected... Then NRPS will...
    Comes within 1,000 of the selection limit (20,000 by default) Bypass the following keys:
    • All Category A Keys except 011, 012, 013, 014, and 100

    • All Category B Keys

    • All Category F Key except 060

    • All Category J Keys

    Reaches the selection limit (20,000 by default) Process the following keys only :
    • Category A Keys 011, 012, 013, 014, and 100.

    • Category G Keys 081.

  5. All Category F, Taxpayer Notice Codes (TPNCs), are reviewed at 100 percent at the beginning of each filing season to ensure that all TPNCs are reviewed at least once. To ensure that the NRPS automated selection process selects at 100 percent, all TPNC percentages that have been manually adjusted using the Local Control File must be cleared prior to the first cycle.

    1. Use the Notice Disposition Reports to monitor the error rates of all TPNCs.

    2. Refer to the table in IRM 3.14.1.3.8, NRPS Local Control File, which is used to determine the correct Local Control File (LCF) selection rate for each TPNC.

  6. Complete a 100 percent review of the notices below at the beginning of the filing season and during the peak cycles. Returns should always be ordered for this review. Request 100 percent of these notices on the Local Control File (LCF) until you can determine the error rate is less than five percent:

    1. CP 14 Non-RPS Notices — Ensure that payments or installment agreement requests are not attached to the returns or in the envelopes. For payments attached to the return, refer to IRM 3.14.1.6.4.4.4, Discovered Remittance. For Installment Agreement requests, refer to IRM 3.14.1.6.9.1, Taxpayer Correspondence. This review is especially important during peak cycles.

      Note:

      NRPS will bypass CP 14 notices generated from Electronic Filing (ELF) returns.

    2. CP 51A, CP 51B, CP 51C, Non-Compute Notices — Review the return to verify that it is a true non-compute. Refer to IRM 3.14.1.6.16, Reviewing Non-Compute Notices - CP 51A, CP 51B, and CP 51C.

    3. CP 30,CP 30A, Estimated Tax Penalty Notice — Verify the accuracy of the change in the ES Tax Penalty as computed by the taxpayer. Refer to IRM 3.14.1.6.18.3,CP 30 — Estimated Tax (ES) Penalty Notice, and IRM 3.14.1.6.18.4,CP 30A — Estimated Tax (ES) Penalty Recomputation Notice.

CP Notice Types

  1. Selectable Notices — These notices are subject to selection under NRPS and may also be subject to Manual Intervention:

    • CP 10 — Math Error/Reduced Credit Elect/Overpaid

    • CP 10A — EIC Math Error/Reduced Credit Elect/Overpaid

    • CP 11/CP 711 — Math Error/Balance Due

    • CP 11A — EIC Math Error/Balance Due

    • CP 12/CP 712 — Math Error/Overpaid

    • CP 12A — EIC Math Error/Overpaid

    • CP 13/CP 713 — Math Error/Even Balance

    • CP 13A — EIC Math Error/Even Balance

    • CP 14/CP 714 — Non-Math Error Balance Due

    • CP 14H — Non-Math Error Balance Due (ACA)

    • CP 14I — IRA Non-Math Error Balance Due

    • CP 16 — Math Error/Overpayment Offset

    • CP 21/CP 721 — DP Adjustment

    • CP 21H — DP Adjustment (ACA)

    • CP 22/CP 722 — DP Adjustment

    • CP 22H — DP Adjustment (ACA)

    • CP 23 — ES Discrepancy/Balance Due

    • CP 24 — ES Discrepancy/Overpaid

    • CP 25 — ES Discrepancy/Even Balance

    • CP 30 — ES Penalty/Overpaid

    • CP 30A — ES Penalty Reduced/Overpaid

      Note:

      CP 30 and CP 30A notices are only selected for review if requested on the Local Control File or if there is a Refund-E transcript for the same SSN/Tax Period as the notice. These notices are not included in the review package if not selected.

    • CP 51A — Non-Compute/Balance Due

    • CP 51B — Non-Compute/Overpaid

    • CP 51C — Non-Compute/Even Balance

    • CP 60 — Adjustment/Credit Reversal/Balance Due

    • CP 62 — Credit Transfer

    • CP 71/CP 771 — Balance Due Reminder Notice

    • CP 77 — Alaska Permanent Fund Dividend Levy Program (AKPFD)/Final Notice

    • CP 78 — AKPFD/Reminder Notice

    • CP 90 — Federal Payment Levy Program (FPLP)/Final Notice

    • CP 91 — FPLP/Final Notice Before Levy on Social Security Benefits

  2. Associated Notices — These notices are not subject to selection, but are included in the review package if NRPS selects another notice for the same taxpayer/spouse and are also subject to Manual Intervention:

    • CP 08 — Taxpayer May Qualify for Additional Child Tax Credit

    • CP 09 — Taxpayer May Qualify for EIC (with children)

    • CP 17 — Refund of Excess ES Credits

    • CP 27 — Potential EIC for Low Income Taxpayer (without children)

    • CP 45 — Reduction in Credit Elect Amount

    • CP 49/CP 749 — Adjustment/Overpayment Offset

    • CP 54 — SSN and Name Inquiry

    • CP 54B — SSN and Name Inquiry - Refund

    • CP 54E — SSN and Name Inquiry on Estimated Tax Payments

    • CP 54G — SSN and Name Inquiry - Even/Balance Due

    • CP 54Q — SSN and Name Inquiry - Second Request

  3. Manual Intervention Notices — NRPS will neither select these nor associate them with a selected notice. However, they may appear on the NRPS Manual Intervention List.

    • CP 15A — Civil Penalty Notice

    • CP 15B — Trust Fund Recovery Penalty

    • CP 18 — Refund Withheld Unallowable Item

    • CP 31 — Undelivered Refund Check

    • CP 32 — Refund Inquiry

    • CP 32A — Refund Inquiry

    • CP 39 — Offset from Secondary SSN

    • CP 42 — Offset to Secondary SSN

    • CP 44 — IMF Overpayment to Non-IMF Liability

    • CP 52 — Reduced SE Earnings

    • CP 53 — Electronic Deposit not Honored

    • CP 74 — EIC Examination Intent

    • CP 75 — EIC Recertification

    • CP 75C — EIC Resolution

    • CP 79 — EIC Recertification/Form 8862

    • CP 79A — EIC Ban (2 Years)

    • CP 79B — EIC Ban (Indefinite)

    • CP 80 — Non-receipt of Tax Return/Credit Balance

    • CP 81 — Refund Statute within six months of Expiration/Credit Balance

    • CP 84 — EIC Certification Soft Notice

    • CP 85 — EIC Disqualification Soft Notice

    • CP 92 — State Income Tax Levy Program (SITLP)/Final Notice

  4. If there is a CP Notice selected by NRPS for OLNR inventory and a Priority Refund Transcript is in AMS within the same cycle, NRPS will provide a statement on the NRPS Package/Control D Package Contents Page indicating the TIN that is also a Priority Refund Transcript in AMS.

NRPS Output Files

  1. After NRPS completes the selection process, it combines all of the selection information into NRPS batches. A NRPS batch consists of the following:

    • NRPS Batch Separator Page

    • NRPS Package/Control D

    • NRPS Selection List

  2. Use Control D/Web Access to view NRPS batches. For additional information, refer to the Notice Review Job Aid 2534-002 and IRM 3.14.1.4,On-Line Notice Review (OLNR).

  3. NRPS produces the following additional types of output:

    • NRPS Batch Control Sheet

    • NRPS Document Charge-Out

    • NRPS Batch Return Request List

    • NRPS Association List

    • NRPS Manual Intervention List

    • NRPS Selection Report

    • NRPS TPNC Trend List Report

    • NRPS Non-package Selection List

    • NRPS Duplicate Selection List

    • Notice Retype Error Report

    • NRPS Automated Local Control File Selection Report

      Note:

      Refer to IRM 3.14.1.3.7, Other NRPS Batch Output for a description of each of these.

  4. All of the above printouts generate from the following NRPS output files:

    NRPS File... Generates the following...
    NRP 6110 NRPS Package/Control D for notices (associated notice information) selected in the notice selection processing
    NRP 6110P Hard Copies. These include copies of the notices, commonly referred to as the "Quick Print" .

    Note:

    The Quick Print is built from data contained in a separate file (called RTY68), and though it is designed to resemble the live notice data, it does not have any impact on how the notice truly looks when printed

    NRP 6120 Document Charge-outs and Files Batch Control Sheets for the NRPS Package/Control D
    NRP 6130 Duplicate copy of Selection List and IMF NRPS Batch Control Sheets for the NRPS Package/Control D
    NRP 6630
    • Large Dollar List

    • NRPS Non-Package Selection List

    • NRPS Manual Intervention List

    • NRPS Selection List

    NRP 4510 Notice Listing
    NOR 0141 Intercept NOREF List

    Note:

    Listing will generate for BMF.

    NRP 8240 Notice Retype Error Report
    NRP 6096 Notice Retype Error Report
    NRP 6610 IMF Notice Listing of Selected CPs

NRPS Batch Separator Pages

  1. The Batch Separator Page identifies the beginning of each batch and contains the following information:

    • Page Number

    • Batch Number

    • Batch Type — Either "OVERPAID" or "NOT OVERPAID"

    • Batch Sort — Either CP, KEY, or MULTIPLE

    • Current Cycle

NRPS Package/Control D

  1. NRPS Package/Control D contains various types of information needed to review each selected CP Notice. Each batch may contain up to 20 selected notices.

    Note:

    Most packages contain only one notice. However, the NRPS Package/Control D will contain all selectable or associated CP Notices that generate in the current cycle for a taxpayer or spouse, if one or more is selected for review.

  2. Each NRPS Package/Control D contains a Contents Page, On-Line notice information, transcribed posted return data, an Entity transcript, and a tax module transcript. These items are explained in greater detail in the subsections that follow.

NRPS Package/Control D — Package Contents Page
  1. Viewed on-line as the first page of each NRPS Package/Control D, this page contains the following information:

    1. Selection Key Number, along with a brief description of the key

    2. List of requested documents

    3. Manual Intervention Reason Codes

    4. List of all selected or associated CP Notices in the package, with CP number and DLN

    5. List of pending transactions

    6. Statement indicating there may be a Priority Refund Transcript in the same cycle on AMS, if applicable

    Exhibit 3.14.1-29

NRPS Package/Control D — On-Line Notice Information
  1. Depending on the CP selected, it may either be a duplicate of the "live" notice, or a shortened version of it. The shortened version displays only the notice record information, such as dollar amounts and TPNC numbers, as opposed to the Taxpayer Bill of Rights language and TPNC explanations.

  2. For CP Notices, the visual representation (or "Quick Print" ) of the notice is created from its own separate file, rather than from the Notice Edit File, as in the past. This change in source data means that occasional abnormalities appearing on the "Quick Print" (which is in the old Legacy notice format), are NOT part of the Notice Edit File. Therefore, those abnormalities will not be on the printed notice.

NRPS Package/Control D — Transcribed Posted Return Data
  1. Displays transcribed return fields for selected settlement notices. This is also referred to as the Return Transaction File (RTF). Exhibit 3.14.1-28

NRPS Package/Control D — Entity Transcript
  1. Displays the entity information for the notice TIN, as well as for the secondary TIN, if applicable (optional).

NRPS Package/Control D — Tax Module Transcript
  1. Displays the tax module transactions for the notice taxpayer identification number (TIN), as well as for the secondary TIN, if applicable (optional).

NRPS Selection List

  1. The last page of each batch shows the following information for each CP Notice:

    • Count (item number on the list)

    • TIN

    • Document Locator Number (DLN)

    • Notice Sequence Number

    • CP Number

    • Primary Selection Key

    • Secondary Selection Key

    • Notice Disposition Choices

Other NRPS Batch Output

  1. NRPS produces two different (but related) Batch Control Sheets. Refer to the NRPS 6130 — Batch Control Sheet exhibit. Exhibit 3.14.1-30

    Note:

    The Files Function copy has a line for each batch, showing the number of document charge-outs in each batch. (Refer to IRM 3.14.1.5.1.2, Associating Documents from Files).

  2. The NRPS Document Charge-out provides information needed by the Files Function to pull documents for use in reviewing CP Notices.

  3. The NRPS Batch Return Request List is a cover sheet that separates the document charge-outs by batch and to accompany the requested documents sent by the Files Function. It contains a line for each charge-out in the batch.

  4. The Manual Intervention List includes notices that may or may not have been selected for review, but manual intervention is required before allowing them to be mailed (if appropriate).

    1. This list is divided into three parts based on the Manual Intervention (MI) Code. If any one of the MI Codes for a Manual Intervention notice is a "1" , then it is printed on the MI Code 1 List. If any one of the MI Codes is a "4" , it is printed on the MI Code 4 List.

    2. Notices on this list may have also been selected by a NRPS selection key.

    3. Refer to IRM 3.14.1.4.3.1.1, Manual Intervention List for additional information.

  5. The NRPS Selection Report contains notice/transcript input and selected-for-review counts, sorted by selection key and by Taxpayer Notice Code (TPNC), with year-to-date totals, for notices selected in the current cycle. Refer to the NRPS 6130 — NRPS Selection Report exhibit. Exhibit 3.14.1-31

  6. The Notice Retype Error Report (NRPS 8240) contains information on notices that were unable to be processed after cycle release. The notices on this report must be recreated by one of the following methods:

    • All Individual Master File (IMF) notices, with the exception of TDA notices, should be recreated using the transaction code (TC) 971 action code (AC) 264 process.

    • Input a TC 971/AC264 (using CC REQ77 in IDRS) to create a Notice Recreate Transcript (CP 67) that will fall out to OLNR. These transcripts will be received in batch "00000" . Once the transcript is received, the notice can be recreated by converting the CP 67 transcript into a retyped CP limited to:

    • CP 08

    • CP 09

    • CP 10

    • CP 11

    • CP 12

    • CP 13

    • CP 14

    • CP 16

    • CP 23

    • CP 24

    • CP 25

    • CP 27

    • CP 30

    • CP 30A

    • CP 45

    • CP 49

    • CP 51

    • CP 711

    • CP 712

    • CP 713

    • CP 714

  7. The NRPS Automated Local Control Selection Report shows the previous four weeks' selection percentages and the current cycle's selection percentage, based on the automated selection process.

NRPS Local Control File (LCF)

  1. Submission Processing Campuses can adjust the number of notices selected weekly by NRPS through the use of the Local Control File (LCF) produced by CC NRP97 on IDRS.

  2. The LCF can increase or decrease the number of notices selected for review. Additionally, the non-print indicator can be input on the LCF to suppress printing of NRPS Package/Control D when only a list is needed. Returns may be requested for the selected notices, if necessary.

    Note:

    Only the Math Error notice selection volumes can be decreased.

    1. NRPS will automatically delete a specific SSN or DLN request when selected or if it is not selected within six weeks of its LCF request. This prevents the file from getting unnecessarily large.

    2. Other types of requests remain on the LCF until action is taken to change or delete the request.

    3. Purge all TPNC requests, in Category F, from the LCF at the beginning of each year to ensure that the NRPS automated selection process is initiated.

  3. Use input screen information for instructions on how to use Substitute Keys 085-089 and 099 to identify local selections.

    Note:

    Use Substitute Key 085 to identify selection requests from other Submission Processing Campuses only.

  4. TPNC defect rates and selection percentages are computed by the NRPS system using data from OLNR NRPS 0030 Report. It is no longer necessary to manually set the percentages for TPNC selection. While the systemic selection can be overridden by manual input, this occurrence should be kept to a minimum and only under special circumstances (programming problem, etc.).

    Note:

    Manual input to the LCF will override the systemic calculation. The percentages in the LCF must be cleared to resume systemic calculation.

  5. See the chart below for defect rates and selection percentages. NRPS will select 100 percent for a particular TPNC until the year-to-date volume reviewed for that TPNC exceeds 50 notices.

    If the defect rate is... Then input... For a Selection Rate of...
    =0 or <6% 001 1%
    >6 and <7% 010 10%
    >7 and <8% 025 25%
    >8 and <10% 033 33%
    >10 and <12% 050 50%
    >12 and <14% 075 75%
    >14% 100 100%

    Reminder:

    NRPS will stop selection based on TPNC when the threshold of 14,,000 notices is reached, so that the remaining categories (Category G, Adjustment Notices and Category H, Condition Analysis) can be selected with the remaining 1,000. The remaining TPNC, partial DLN, and CP percentages requested via the LCF will not be selected. A LCF option exists that can raise the 14,000 limit to any number up to 50,000. Selection limits should not be raised above the 14,000 mark, unless requested or approved by Headquarters. Refer to the chart in Item (4) of IRM 3.14.1.3.1,Notice Selection Process.

  6. A priority option causes 100 percent of the notices containing a specific TPNC to be selected without regard to normal exception processing, i.e. previous CARE review ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . This is limited to 40 TPNCs. Other options control the Exception Override of Selection Keys 028/029 and TPNC 100 Document Charge-outs.

  7. The computer processing used to access this capability resides in IDRS. Three programs are used to update and maintain the NRPS Local Control File database.

  8. Adjust the LCF using CC NRP97. This IDRS command code allows sites to add, change, and delete requests on the LCF. The weekly deadline for making changes is determined by the running of NRP98. NRP98 is run on Friday afternoon. After the records are processed on International Business Machine (IBM), NRP99 is run to create a new LCF. NRP99 is run on Friday noon. Any data input on the LCF after NRP 98 is run and before NRP99 is run is overwritten by NRP99. To ensure requests are processed, you can start input Monday and stop input at 12:00 noon before the running of NRP98.

Local Control File (LCF) Overview
  1. Monitor the TPNC Trend List to assist in estimating notice fallout, and to provide feedback to ERS.

  2. Review the NRPS Notice Disposition Reports to determine TPNC error rates.

    Note:

    Notices with an "E" disposition are not included when determining the defect/selection rate by NRPS.

  3. Review the latest NRP98/NRP99 Reports for:

    • Possible changes to selection criteria already on the LCF.

    • Possible re-entry of TINs and DLNs which are about to expire.

  4. Requests for notices by TIN will also include an optional entry of tax period. These requests will remain until the specific request is met or the user removes the request from the LCF.

  5. List the changes to be made to the LCF.

  6. Use CC NRP97 to input the changes to the LCF. See IRM 2.4.45, Command Code NRP97, for terminal input requirements of CC NRP97.

  7. When inputting LCF request to select notices by CP, sites can now indicate if the selection should bypass notices generated from MeF returns.

  8. Review the NRP98 report to check input data for accuracy. Correct any errors.

  9. The NRP 6130 report generates each week. This report lists every notice and transcript selected for review.

    Title Action Result
    Data Retention Requests are deleted from the LCF only under the following circumstances: Not Applicable
    Data Retention ERS DLN and Full DLN Automatically deleted when selected by NRPS or after six weeks if not selected
    Data Retention SSN with or without Tax Period Automatically deleted when selected by NRPS
    Data Retention All others Must be manually deleted
    Local Control File (LCF) Specifications The LCF uses the following Selection Keys: Must be manually changed through NRP 97.
    Selection Keys 090 — SSN Selection 094 — Full/Partial DLN Selection
    Selection Keys 091 — ERS DLN Selection 095 — Penalty Code Selection
    Selection Keys 092 — CP Number Selection 096 — Adjustment Reason Code Selection
    Selection Keys 093 — Balance Due Amount Selection nnn — TPNC Selection
    Substitute Keys The LCF uses keys 085, 086, 087, 088, 089, and 099 as Substitute Selection Keys that may only be used to replace Selection Keys 090 through 096. TPNC, Exception Override, and normal criteria selections cannot be selected under a Substitute Selection Key Not Applicable
    Substitute Keys

    Example:

    NRPS normally selects Penalty code 01 and 02 requests under Key 095. If Substitute Key 085 is input on the request screen for Penalty Code 02, these selections will be made under Key 085 instead

    Not Applicable

On-Line Notice Review (OLNR)

  1. The On-Line Notice Review (OLNR) System allows tax examiners to review notices, determine notice disposition, and retype notices on-line.

    1. Notices are reviewed "on-line" using a personal computer. However, OLNR does not change the procedures for reviewing notices established by the Notice Review Processing System (NRPS).

    2. Selected taxpayer notices are not printed until after the NRPS batches have been reviewed, and OLNR goes through its weekly "closeout" process (term used for end-of-cycle processing that controls notice printing). This allows the system to avoid printing notices that should be voided, and also allows full editing capabilities in case a notice needs correction prior to mailing.

    3. Notices that are not reviewed before cycle closeout will automatically default to the "NR" (Not Reviewed) disposition, and are then converted to the "P" (Print) disposition. This default provides a more correct notice accuracy rate, since only notices that are reviewed in a given cycle are compiled into notice accuracy numbers for reporting.

  2. The OLNR System also eliminates much of the manual work involved in the clerical support and tax examiner processes.

    1. Each computer running OLNR also has IDRS access, so that tax accounts can be corrected, if necessary, at the time of review of the notice.

    2. IDRS access helps by reducing the inventory of monitored cases.

    3. IDRS access helps provide quicker assistance to the taxpayer.

    4. The Notice Disposition Report generates automatically, rather than requiring manual preparation by Clerical Support Staff.

  3. The OLNR System creates the weekly Notice Disposition Report.

    1. Entering the applicable disposition code tells the system how to process the notice.

    2. At the end of each cycle, the disposition codes are applied to the notice files on the mainframe computer. The notice data is updated prior to printing.

    3. After the cycle is "closed out" , the system uses the disposition code data to create the Notice Disposition Report.

OLNR Retype Enhancements

  1. The OLNR Retype Enhancement for IMF operates at all Campuses. The following are features/capabilities of the OLNR Retype Enhancement:

    1. Ability to correct entity on selected and associated notices excluding Spanish notices.

    2. Ability to correct data fields on most selected notices.

    3. Ability to select and insert TPNCs using a drop-down list. This list includes a free form TPNC 100 screen, and several dozen OLNR-specific TPNC 100s.

    4. Ability to add a label to selected, associated and manual intervention notices.

    5. Ability to correct entity fields on manual intervention notices, or void them.

    6. Ability to correct entity on CAF copies of notices, or void them (even if the primary notice is mailed).

    7. Ability to convert from one CP to another CP.

    Note:

    For information on how to utilize the OLNR System, refer to the OLNR User Guide and Notice Review Job Aid 2534-002.

OLNR Notice Conversions
  1. The OLNR system allows the user to convert from one CP Notice type to another, when adjustments to the account require a different type of notice.

  2. Almost all appropriate field values from the original notice will be transferred into the conversion notice, where they can then be adjusted by the examiner, if necessary.

  3. If any adjustment actions will be reflected in the converted notice, take appropriate action to prevent unnecessary adjustment notices.

  4. When converting to or from a Non-Compute notice (CP 51), special instructions apply with respect to the Pay-By Date field of OLNR. Follow instructions in IRM 3.14.1.6.16, Reviewing Non-Compute Notices- CP 51A, CP 51B, and CP 51C,.

Notice Disposition Program and Notice Disposition Report

  1. Once inside a cycle of work in OLNR, and a batch is selected, the Notice Disposition screen is loaded and appears on the screen. It contains all of the sequence numbers for the selected batch. As each case in the batch is reviewed, the user selects the disposition code for the desired notice action.

  2. The Notice Disposition Program sends the selected disposition codes to the mainframe, and the data is used to compile the Notice Disposition Report. The disposition code entered for each notice will determine how the notice will be handled by the back-end printing programs.

Notice Disposition Codes
  1. Description of the Notice Disposition Codes:

    1. Entity-Only Change ("E" or "EI" Disposition): These notices require an Entity only change.

    2. Hold Notices ("H" Disposition): These notices are held (awaiting additional information or a response from the taxpayer) for processing in a subsequent cycle.

    3. Label Notices ("L" or "LI" Disposition): Labels are added to the notice on-line.

    4. Print Notices ("P" or "PI" Disposition): This disposition results in the printing of the notice without any changes.

    5. Retype Notices ("R" or "RI" Disposition): Any needed changes/corrections are made directly on-line by the tax examiner.

      Note:

      For CP 67 Notice Recreate Transcripts, the "R" disposition is used solely for the purpose of converting the transcript into another notice.

    6. Voided Notices ("V" or "VI" Disposition): These notices are never printed.

Notice Disposition Code Table
  1. The table explains the result of selecting each disposition code. The Notice Disposition program includes the "I" for refunds that have been prevented from generating so that this data can be reflected in the Notice Disposition report.

    Disposition Code Action
    "E" This disposition is entered when only an entity change is required
    "EI" This disposition is entered when the situations in "E" above exist, and the refund is prevented from generating
    "H" This disposition will cause the notice to be held for processing in a subsequent cycle. It is only entered when the review of the notice cannot be completed in the current cycle
    "L" This disposition allows the notice to be printed with the insertion of the user-selected label(s)

    Note:

    Use

    Code "L" when the notice needs only a label added. If a notice requires additional changes other than a label, the "R" disposition should be used
    "LI" This disposition should be entered when the situations in "L" above exist, and the refund is prevented from generating
    "P" This disposition will cause the notice to be printed in its original condition. Code "P" is only used when the notice is correct
    "PI" This disposition is only entered when the notice is correct. It is printed, but the refund is prevented from generating
    "R" This disposition is used when the notice will be retyped. Code "R" should also be used when both an Entity change and a Label are needed
    "RI" This disposition is used when the notice will be retyped, and the refund is prevented from generating
    "V" This disposition will prevent the notice from being printed. It should be used when the notice is voided
    "VI" This disposition is used when the notice is voided, and the refund is prevented from generating
Notices Held Beyond Current Cycle
  1. Every effort must be made to review, correct, and disposition notices in the current cycle to minimize negative impact to the taxpayer.

    Note:

    Do not hold notices arbitrarily.

  2. In situations where a review of a specific notice cannot be completed before the end of the cycle, the notice should be held, and then released when the review can be completed.

  3. Input disposition code "H" to hold the notice for processing in a subsequent cycle. Examples that may cause the review of the notice to be delayed include:

    • Request for a voucher to validate a payment not found on Remittance Transaction Research (RTR) System

    • Request for documents from the taxpayer

  4. Notices should be worked as soon as the requested information or document(s) are received to minimize any further delay to the taxpayer.

  5. An OLNR "Held Notices Report" will be produced weekly to track the number of notices (by CP number) held beyond the cycle.

    Reminder:

    A copy of the Held Notice Report should be forwarded to the Headquarters Notice Review Analyst by Monday, after cycle closeout.

  6. If a Balance Due notice is held beyond cycle, change the pay-by date to be consistent with the pay-by date of balance due notices generating in the cycle of the held notice's release. Recalculate the interest, penalties, and any other applicable fields.

Notice Error File
  1. If a notice fails a validity check (OLNR Retypes), the notice is dropped from the back-end mainframe notice print processing and placed in the Notice Error File.

  2. The Notice Error File will contain information needed by Notice Review to manually retype the notice.

  3. The information will include:

    • A copy of the disposition record for the notice sequence number.

    • Retype data for the notice.

    • An additional record containing a brief description of the reason for rejection.

  4. The reports are sent via File Transfer Protocol (FTP) to the server and can be viewed and/or printed using Electronic Online Network System (EONS).

  5. The first line of the report contains the batch number, which should be used to locate the “quick print” of the original notice.

  6. Recreate the notice, by using the “quick print” and the retype data from the reports. Use the TC 971/AC264 method described in IRM 3.14.1.4.3.4, Notice Recreate Transcripts (CP 67).

  7. Use normal procedures for reviewing the notice. Begin the review as soon as possible to minimize any further delay to the taxpayer.

Special Reviews

  1. Special reviews include:

    • Manual Intervention — Non-Selected Notices

    • Manual Intervention — Selected Notices

    • Requests to Stop Notices from Other Areas

    • Cases Controlled for Researching the Taxpayer's Account

    • Notice Recreate Transcripts (CP 67)

Manual Intervention
  1. Perform manual intervention on selected and non-selected notices.

  2. Selected notices
    When reviewing each notice, determine whether the notice has a Manual Intervention Indicator. If it does, enter a disposition code that will account for the manual intervention.

  3. Non-selected notices


    Manual Intervention Notices will appear in batches in the 9000 (9xxx) series. For notices that are not selectable, a disposition code of "E" should be applied to the notice, if changes are made to any of the entity screens. Entity fields will be updated during the print process.

Manual Intervention List
  1. When certain conditions are present on a notice, it may require Manual Intervention before being printed. The Manual Intervention List is divided into four parts based on the MI Code. The following table describes the MI Codes:

    MI Code MI Code Description MI Code Explanation
    3 Blind Trust Taxpayer has a Blind Trust
    4 Service Center (Campus) Address Service Center ZIP Codes
    5 No Doc Code 47 or 54 Adjustment notice with a DLN document code other than 47 or 54
    6 ES Tax Payment Discrepancy Summary of payments listed at bottom of notice does not agree with Total ES Tax Payment(s) amount on the notice
  2. If the notice is also selected by NRPS, the Manual Intervention information will be on the Package Contents page of the NRPS Package/Control D. If a Manual Intervention condition is present, the tax examiner must resolve it during the review.

  3. If the notice is not selected by NRPS, the notice (and the Manual Intervention condition) appears on the Manual Intervention List, and in Batches on OLNR beginning in the 9000 series (9xxx).

    1. The list shows one line for each notice, sorted by notice sequence number.

    2. Maximum of 24 to a batch.

Blind Trust — Code 03
  1. Do not mail notices with a Blind Trust code to the taxpayer. Send them only to the taxpayer’s representative.

  2. Review notices to ensure representative’s address. If necessary, correct the address.

Submission Processing Campus as Addressee — Code 04
  1. This code indicates that the ZIP code (73301, 93888, 64999, 45999, 84201, and 19255) on the notice matches that of a Submission Processing Campus. Correct these notices.

    If a valid address is... And the SP Campus status is... Then...
    Available Any
    1. Select Disposition "E"

    2. Edit the correct address

    Note:

    The notice should be voided if ENMOD includes an Identity Theft (IDT) indicator (TC 971/AC501 AC504, AC505, and/or AC506)

    Not available 20, 56, or 58
    1. Use CC STAUPS to update the status to 51

    2. Void the notice

    Not available other than 20, 56, or 58 Void the notice
Adjustment Notices with a Doc Code Other Than 47 or 54 — Code 05
  1. In most cases, Adjustment Notices will have a DLN Doc Code of "54" or "47" . If the DLN has a different Doc Code, then the notice will appear on the Manual Intervention List with Code "05" .

  2. When working Code "05" cases, check for an existing MFT 31 account using CC IMFOLI. MFT 31 primarily involves Innocent Spouse accounts.

ES Payment Balance Discrepancy — Code 06
  1. If the sum of the payments shown on an Estimated Tax (ES) Discrepancy notice does not match the Total ES Payment amount on the notice, the notice will appear on the Manual Intervention List with Code "06" .

  2. Retype the notice to show the correct payments and Total ES Payment amount. Add any missing original payments that correspond to the dishonored check.

    Caution:

    Do not remove Dishonored Check(s) from the notice, even if it is the only reason the ES discrepancy exists. The taxpayer needs to know why the ES discrepancy exists, and to which dishonored check any Bad Check Penalty (TC 280/286) is being applied.

Requests to Stop Notices from Other Areas
  1. When another area requests that a NRPS-selected notice be stopped, Notice Review should query on the OLNR Web Page, using search disposition, to find the associated batch number. Only OLNR users with "Poweruser" , "QAReviewer" , "Reports" or "OLNRSA" permissions can access the OLNR Web Page.

  2. An OLNR system user with either "Poweruser" , "OLNRSA" or "QAReviewer" permissions will open the batch and enter the appropriate disposition code.

  3. The OLNR system cannot stop a non-select notice(s).

Researching the Taxpayer's Account
  1. When researching a taxpayer's account that cannot be resolved during the review process, prepare adequate case documentation to allow resolution as quickly as possible upon completion of research.

  2. Since the NRPS Package/Control D only stays available for 30 days, documentation should include any data from NRPS that will not be available on IDRS. Establish a control base on IDRS immediately and if necessary, input CC STAUPS.

  3. Input disposition code "P" if the notice can be printed while the research is being completed.

  4. Input disposition code "H" if the notice cannot be printed until the research is completed.

Notice Recreate Transcripts (CP 67)
  1. There are some situations which require a notice to be built or recreated:

    • A notice record contains bad data which prevents it from properly passing through the OLNR system.

    • A notice was voided in error, when it should have been released in cycle.

    • An incorrect notice was released, and a corrected notice must be sent in its place, with the apology label inserted. See IRM 3.14.1.7.8.5.13,Label 13

    • A notice may be needed when there is no other notice or transcript generating in the system.

  2. When a notice record contains bad data as described in Item (1) above, the notice record gets "dumped" , and the Headquarters Analyst contacts the affected site to have the notice recreated.

  3. Use the following instructions to generate the CP 67 Notice Recreate Transcript.

    Note:

    If creating a balance due notice from the CP 67, input CC STAUPS for six cycles.

    1. Input CC REQ77

    2. Input 971 in the "TC-FIELD" of the FRM77 response screen.

    3. Enter the Return Received Date from the "RET-REVD-DT" field of TXMOD in the "TRANS-DT>" field.

    4. In the "TC 971–CD>" field, enter Action Code (AC) 264.

    5. In the "Remarks" field, enter "CP 67 to CP xx" .

      Reminder:

      Retain the taxpayer information for use in locating the correct transcript in the "000000" batch.

      Caution:

      Be sure to set a calendar reminder as to when the CP 67 will post. If the CP 67 cycle closes out without the transcript being converted to a notice, the transcript data will be lost and another TC 971 must be input to start the process over.

  4. When the TC 971/AC264 posts, a CP 67 Notice Recreate Transcript will generate.

  5. All CP 67 transcripts appear in the batch numbered with all zeroes (000000) for any given cycle, and are considered Manual Intervention cases.

  6. The CP 67 must be converted to another notice prior to cycle closeout. If the transcript is not converted to a notice prior to cycle closeout, the opportunity is lost and another TC 971/AC264 must be input to create another CP 67.

  7. Create the new notice by selecting the "R" disposition in OLNR, and when the entity data appears: use the "Change" button feature for Notice Type to change the CP 67 to the desired CP.

  8. Be careful to include all necessary items, such as TPNC(s), Label(s), Pay-by date, etc. Double check the Entity tab information for accuracy. Be careful to include Name, DLN, and Filing Status information.

  9. AMS will systemically generate a TC 971/AC264 upon selection of the Suspense Action "Convert Transcript to Notice" . The notice will be in the OLNR inventory in the next cycle.

Clerical Support Procedures

  1. This section provides procedures for the Clerical Support staff within the Notice Review Function.

  2. The Clerical Support staff provides a variety of services critical to the NRPS and AMS processes. These services assist Notice Review tax examiners (and other customers) in providing accurate information to the taxpayer. The Clerical Support staff:

    1. Associates tax returns needed to review selected notices.

    2. Distributes NRPS Package/Control D and related documents.

    3. Corrects erroneous, misprinted, and undeliverable notices.

    4. Maintains records on taxpayer notices.

    5. Enters Priority Refund Transcript closing or suspense actions when AMS has been down for 4 hours or more and tax examiners have been instructed to work Priority Refund Transcript inventory manually.

Clerical Priorities

  1. This subsection provides instructions on prioritizing duties performed by the Clerical Support staff. These include:

    1. Inputting Priority Refund Transcript closing or suspense actions into the AMS system (when AMS has been down for 4 hours or more). See IRM 3.14.1.5.1.1, Inputting Priority Refund Transcript Closing or Suspense Actions.

    2. Associating tax returns and other documents from Files. See IRM 3.14.1.5.1.2, Associating Documents from Files

    3. Establishing priority of review. See IRM 3.14.1.5.1.3, Establishing Priority of Review

Inputting Priority Refund Transcript Closing or Suspense Actions
  1. In the event AMS is down for 4 hours or more, tax examiners will manually work the Priority Refund Transcripts using a listing available on Control D. TEs will indicate the manual action they performed on IDRS for each case on the NR Manual Action Sheet.

  2. Clerks will use the NR Manual Action Sheet to search for the correct refund transcript. Searches can be executed on the TIN, Transcript Type, Dollar Amount Range, or date to locate the correct case.

  3. Clerks should ensure each case is assigned to the correct tax examiner and the closing or suspense actions are input accurately in order to remove each case from the AMS unassigned queue.

Associating Documents from Files
  1. Document Charge-outs and a Batch Return Request List generate weekly. Note the following:

    1. The Files Function uses these forms to pull returns needed to review notices. Returns are routed in batch order (per the Batch Return Request List) to the Notice Review Function.

    2. The Clerical Support staff associates the Batch Return Request List and the attached returns with the corresponding NRPS batch sheets.

  2. Route the NRPS batch sheets that do not need documents directly to the tax examiners.

  3. Associate all necessary documents (adjustment documents and tax returns) with each batch before releasing to the tax examiners.

Establishing Priority of Review
  1. Error Resolution System (ERS) may request the Notice Review Function to select and correct a specific notice:

    1. ERS tax examiners must prepare Form 3465, Adjustment Request, and send it with the return to the Notice Review Function.

    2. Use LCF Key 091 to select the notice for review by DLN. Use full DLN for high priority review, and partial DLN for low priority review.

    3. The Clerical Support staff must associate the return and Form 3465 with the NRPS batch and release the case to the tax examiner.

  2. The Clerical Support staff must distribute the work in this order:

    1. Selected Overpayment Notices — tax examiners must complete review prior to the predetermined cutoff for TC 570 (CP Notice hold TC 570 with blocking series "55555" and a credit balance), which is 6:00 P.M. (local time) each Wednesday. If the cut-off time for TC 570 is missed, use NOREFP until 10 P.M. (eastern time) on Thursday. Consider prior cycle error rates of individual CP Notices and selection keys to ensure that the greatest number of incorrect refunds are prevented from generating.

      Exception:

      Treat notices selected by Key 002 as an overpayment notice, because a current cycle refund in another tax period is the reason for the review.

Notice Corrections
  1. Work 100 percent of the Manual Intervention notices (some may be assigned to the Clerical Support Staff), using OLNR, prior to the cycle closeout.

  2. Manual Intervention (MI) notices will be contained in OLNR mainly under batch numbers in the 9000-series (9xxx).

    Exception:

    The CP 67 Notice Recreate Transcript will be contained in Batch "000000" .

  3. Notices received after the notice date should be corrected as they are received. These include:

    • Undeliverable Notices

    • Torn/Mutilated Notices

    • Reporting Agents Files (RAF) Notices received back from the print sites as incomplete/unaddressed.

Printing of Notices — Correspondence Production Services (CPS East and CPS West)
  1. With the delivery of the OLNR Retype Enhancement, the need to route notices back to the Notice Review Function is eliminated. Notices that require printing and mailing will generate and be mailed from one of the Correspondence Production Services (CPS) sites.

Primary Notice Review Procedures

  1. This section provides procedures for tax examiners within the Notice Review Function.

General Review Procedures

  1. Notice Review must verify certain types of information common to all returns to ensure the accuracy of each notice. Compare IDRS, CP Notice data, along with the information contained in the NRPS Package/Control D, against the information on the return, being mindful of any transcription errorsor misplaced entries. If the return is unavailable use IDRS, Control D and other available tools to verify the accuracy of the notice data.

  2. The following instructions attempt to address the situations that are most frequently encountered when reviewing notices. These instructions cannot address every possible issue; use in conjunction with all of the information contained in this IRM.

  3. In addition to completing the following General Review Procedures, continue with the necessary subsections as appropriate:

    • Reviewing Math Error Notices — CP 10, CP 11 ,CP 12, CP 13 and CP 16 — See IRM 3.14.1.6.12.

    • Earned Income Credit (EIC) — See IRM 3.14.1.6.12.4.

    • Reviewing Estimated Tax (ES) Discrepancy Notices — CP 23, CP 24 and CP 25 — See IRM 3.14.1.6.13.

    • Reviewing Priority Refund Transcripts in Account Management Services (AMS) — See IRM 3.14.1.6.14.

    • Reviewing Non-Math Error Balance Due Notices – CP 14IRM 3.14.1.6.15.

    • Reviewing Non-Compute Notices — CP 51A, CP 51B and CP 51C — See IRM 3.14.1.6.16.

    • Reviewing Notices with Specific Selection Keys — See IRM 3.14.1.6.17.

  4. To prevent a refund from generating, see IRM 3.14.1.7.1.1, Refund Intercepts

  5. For Taxpayer Notice Code (TPNC) lists and descriptions, refer to IRM 3.14.1.8, Taxpayer Notice Codes Document 6209, IRS Processing Codes and Information, Section 9, and IRM 3.12.3 , Individual Income Tax Returns – Error Resolution System (ERS) to 3.12.3-2 Taxpayer Notice Codes .

  6. All related tax modules associated with the notice module as well as any associated notices must be reviewed and resolved, as applicable, with the resolution of the notice issue. Only one count will be allowed when associated notices and or modules have to be resolved in conjunction with the notice module.

Verifying Return Information
  1. Verify the following items for each selected notice:

    • Social Security Number (SSN)

    • Individual Taxpayer Identification Number (ITIN)

      Note:

      The SSN or ITIN may be in full form or shortened on the notice

    • Document Locator Number (DLN)

    • Name and address

      Note:

      If a name control has been edited in red, use as the name control for the ITIN or Internal Revenue Service Number (IRSN).

    • Return received date

    • Tax Period

    • Signature(s)

    • Offsets (including TOPS, Credit Elect, and Lump Sum)

    • Dishonored payments and bad check penalties

    • Discovered remittance

    • Contributions to reduce the public debt

    • $10,000,000 (ten million) refunds

    • Pending transactions

    • Taxpayer correspondence

    • Frivolous Claims

    • Slipped blocks and mixed data blocks

    • Community property split

    • Injured spouse claim

    • Decedent accounts

    • Return Processable Date (RPD) if required

Protecting Americans from Tax Hikes
  1. The Protecting Americans from Tax Hikes Act (PATH Act) was enacted December 18, 2015. The PATH Act prohibits taxpayers from retroactively claiming certain TIN related credits for any tax year in which the taxpayer, spouse or qualifying child did not have a valid TIN assigned by return due date or due date as extended. The PATH Act applies to:

    • Child Tax Credit

    • Additional Child Tax Credit

    • American Opportunity Credit (AOTC) -both refundable and non-refundable

    • Earned Income Credit

  2. Credit specific eligibility requirements apply in addition to the PATH Act criteria.

  3. The Path Act prohibits current year refunds of EIC or ACTC before February 15. All amended returns without a C- freeze that add EIC or ACTC must be held until then.

Social Security Numbers (SSN's)
  1. The Social Security Administration (SSA) assigns all SSNs. ECC-MTB verifies taxpayer SSNs against SSA records to identify invalid situations. Master File identifies an invalid SSN with a trailing asterisk (*). If the asterisk appears after the SSN on a notice, it indicates that the SSN has already been identified as invalid.

    Example:

    123–32–1321* is an invalid SSN.

  2. For TY 199612 and later, the secondary taxpayer must have a valid TIN in order to qualify for a personal exemption. By law, taxpayers are not required to update their name with SSA; therefore, some exceptions exist when an invalid TIN is allowed for purposes of claiming a personal exemption, etc. If the taxpayer is using the SSN issued to them by SSA (or ITIN issued by the IRS ), but their last name now differs because of marriage, allow the personal exemption. In these cases, ERS will input Return Processing Code (RPC) E and a new name control will be established as a valid IRS name control on the account.

  3. Master File takes the following actions on accounts having invalid SSNs unless the SSN is an ITIN:

    • Master File issues a CP 54. If review of the account determines that the invalid condition can be corrected, void the CP 54.

    • Master File freezes overpaid accounts when the TC 150 posts. See IRM 3.14.1.6.11.11, Restricted Credit Interest Freeze (I–).

  4. Compare the SSN on the notice to the SSN on the return. When a taxpayer has data for both a valid and an invalid SSN and the only difference is the name control, determine if the difference was caused by a processing error, such as a transposed first and last name or a misspelled last name. If so, do the following:

    If a tax return... Then...
    Has posted to either the valid or the invalid SSN, but not to both
    1. Use CC ENMOD/ENREQ to input a name change on the invalid SSN

    2. Input CC STAUPS for eight cycles if the account has a balance due

      Note:

      The accounts will resequence and merge. It is not necessary to move payments on the account

    3. Void or retype notice as appropriate

    Caution:

    Take action to prevent subsequent notices as appropriate

    Has posted on both the valid and the invalid SSNs Do not merge the accounts or make a name change
    1. Recharge (ESTABDT) and route the case to Accounts Management for resolution

    2. Input CC STAUPS for eight cycles if the account has a balance due

    3. Input TC 570 or CC NOREFP per guidelines in IRM 3.14.1.7.1.1 ,Refund Intercepts, if account is refunding

    4. Void the notice

  5. When reviewing a balance due notice generated by a joint return, check for payments on the invalid portion of the secondary taxpayer’s SSN. If payments are on the invalid secondary SSN, transfer them to the primary SSN where the joint return posted.

    Exception:

    If both the valid and invalid accounts show duplicate posted returns, send the case to Accounts Management for resolution.

  6. In all other situations involving invalid SSNs, review all attachments to the return, looking for evidence of a correct SSN. Use CC INOLE and CC NAMES to check for other SSNs, or a pending name change.

    If... And... Then...
    The correct SSN can be verified and the account resolved A new SSA name control is present on CC INOLE(T)
    (See Note following this table)
    1. Void all notices to the taxpayer

    2. Prevent the refund from generating

    3. Input CC STAUPS for eight cycles if the account has a balance due

    4. See IRM 3.14.1.6.22 Reprocessing Returns

    If there is an invalid SSN condition A new SSA name control is present on CC INOLE(T)
    (See Note following this table)
    1. Void the CP 54

    2. Do not transfer credits from the valid to the invalid account. Input CC STAUPS for eight cycles to allow the quarterly SSA update to merge the accounts. Quarterly updates will occur in cycles 5, 16, 31, and 44

    3. If a credit transfer from or an adjustment to the account is necessary and the transaction will post during a quarterly SSA update cycle, use a posting delay code so the transaction will post after the update to avoid an Unpostable

    If the invalid SSN condition cannot be resolved, but an adjustment or credit transfer is required. A new SSA name control is present on CC INOLE(T)
    (See Note following this table)
    1. Use Hold Code "4" on an adjustment to prevent any credit from refunding

    2. Input a TC 570 (Doc Code 24 or 48) or a Credit Freeze Code "1" (Doc 34) on the credit side of any transfer into the account. Make sure that any refund remains frozen until the taxpayer responds to the CP 54

    3. Input a TC 570 on the debit side of any Doc Code 24 or 48 when transferring credits out of the account

    Note:

    Do not use Doc Code 34 to transfer a payment out. There is no way to freeze the debit side of the transfer

    Note:

    On a weekly basis, tapes containing name control updates are received from the SSA. On a quarterly basis, the updated accounts are merged.

Individual Taxpayer Identification Number (ITIN)
  1. The IRS requires that all foreign and domestic taxpayers provide a valid identification number. This number can be either a valid social security number (SSN) or an Individual Taxpayer Identification number (ITIN).

  2. ITINs are issued to individuals who are required to have a U.S. Taxpayer Identification Number, but neither have nor are eligible to obtain a SSN.

  3. ITINs are valid only for tax purposes and are obtained by completing Form W-7, Application for IRS Individual Taxpayer Identification Number.

    Note:

    If Form W-7 is attached to the return see IRM 3.14.1.6.9.1, Taxpayer Correspondence.

  4. ITINs can be identified by a "9" as the first number and a range of "50 - 99" for the 4th and 5th numbers.

    Exception:

    4th and 5th numbers 66-69,89, and 93 are not ITINs

    Note:

    ATINs also begin with "9" as the first number; however, the 4th and 5th digits will be "93" .

  5. Compare the ITIN on the notice to the ITIN on the return. When a taxpayer has data for both a valid and an invalid ITIN and the only difference is the name control, determine if the difference was caused by a processing error, such as a transposed first and last name or a misspelled last name. If so, do the following:

    If a tax return... Then...
    Has posted to either the valid or the invalid ITIN, but not to both
    1. Use CC ENMOD/ENREQ to input a name change on the invalid ITIN

    2. Input CC STAUPS for eight cycles if the account has a balance due

      Note:

      The accounts will resequence and merge. It is not necessary to move payments on the account

    3. Void or retype notice as appropriate

    Caution:

    Take action to prevent subsequent notices as appropriate

    Has posted on both the valid and the invalid ITINs Do not merge the accounts or make a name change
    1. Recharge (ESTABDT) and route the case to Accounts Management for resolution

    2. Input CC STAUPS for eight cycles if the account has a balance due

    3. Input TC 570 or CC NOREFP per guidelines in IRM 3.14.1.7.1.1 , , Refund Intercepts, if account is refunding

    4. Void the notice

  6. When reviewing a balance due notice generated by a joint return, check for payments on the invalid portion of the secondary taxpayer’s ITIN. If payments are on the invalid secondary ITIN, transfer them to the primary ITIN where the joint return posted.

    If... And... Then...
    The correct ITIN can be verified and the account resolved Not Applicable
    1. Void all notices to the taxpayer

    2. Prevent the refund from generating

    3. Input CC STAUPS for eight cycles if the account has a balance due

    4. See IRM 3.14.1.6.22 Reprocessing Returns

    The invalid ITIN condition cannot be resolved, but an adjustment or credit transfer is required A new ITIN name control is present on CC INOLE(T)
    1. Void the CP 54

    2. Do not transfer credits from the valid to the invalid account. Input CC STAUPS for eight cycles.

    The invalid ITIN condition cannot be resolved, but an adjustment or credit transfer is required A new ITIN name control is not present on CC INOLE(T)
    1. Use Hold Code "4" on an adjustment to prevent any credit from refunding

    2. Input a TC 570 (Doc Code 24 or 48) or a Credit Freeze Code "1" (Doc 34) on the credit side of any transfer into the account. Make sure that any refund remains frozen until the taxpayer responds to the CP 54

    3. Input a TC 570 on the debit side of any Doc Code 24 or 48 when transferring credits out of the account

    Note:

    Do not use Doc Code 34 to transfer a payment out. There is no way to freeze the debit side of the transfer

    Exception:

    If both the valid and invalid accounts show duplicate posted returns, send the case to Accounts Management for resolution.

Internal Revenue Service Number IRSN)
  1. An IRSN (Internal Revenue Service Number) is a number assigned by the IRS and is used in place of a required TIN during processing.

  2. An IRSN is used only as an internal identifying number or until the taxpayer is assigned a SSN or ITIN, or until their SSN or ITIN is located.

  3. All IRSNs begin with the number “9”.

  4. Taxpayers with an ATIN/ITIN or IRSN are ineligible for EIC. If a taxpayer is not valid on Master File (first time filing, changes in marital status) but has a valid SSN with the Social Security Administration, he/she may claim EIC.

  5. If able to determine if EIC has already been denied by ERS, no further action necessary.

  6. If the taxpayer is claiming EIC with an ITIN, invalid SSN, or IRSN, thoroughly research the taxpayer’s account using CC IRPTR with Definer L and CCs INOLE, NAMES, and NAMEI.

  7. If the taxpayer is claiming EIC and personal exemptions and you cannot determine a valid number on an:

    • Erroneous SSN - Remove EIC and Personal Exemption

    • IRSN- Remove EIC and /or Personal Exemption

    • ITIN - Remove EIC

Document Locator Number (DLN)
  1. Always verify the DLN on the Quick Print copy of the notice or NRPS Package/Control D against the DLN on the return, to ensure the correct document is being reviewed.

  2. Use the posted return data, selected vouchers, and pending transactions available in the NRPS Package/Control D to determine whether the refund is questionable. If the return is unavailable, then determine whether the refund should be prevented from generating.

  3. Only prevent the refund from generating when additional research is needed and the return is unavailable.

  4. When you need the return to complete the research after second request has been made, inform the lead, who will investigate the reason for unavailability, and possibly locate the return.

  5. Management should identify and coordinate with problem area(s) so that corrective action can be taken as quickly as possible.

Verifying and Correcting Name Information
  1. Verify the name on the notice against the entity information on the return.

    Note:

    Before preventing a refund from generating for a name correction, determine if the taxpayer will be able to cash the check (non-critical entity adjustment). If the check can be cashed, allow the refund and input the entity change on OLNR. See IRM 3.14.1.6.1.1.8,NRPS Automated Entity Updating.

    Caution:

    If the taxpayer will not be able to cash the refund (critical entity adjustment), prevent the refund from generating. See IRM 3.14.1.7.5, Entity Adjustments.

    If... Then...
    The name on the return is illegible Determine the correct name by checking the signature, the Form W-2 documents, the return envelope, and any other attachments
    The name on the notice is different (this also applies to the secondary name of a joint entity)
    1. If the name is different, misspelled or contains a typographical error, but is obviously the same taxpayer, correct the name in OLNR

    2. If the spouse's last name changed due to marriage, and the spouse signs the return with their married name, correct the name in OLNR

      Exception:

      Do not change the last name of the spouse unless they sign the return with their married name (or if the signature is illegible)

      Note:

      Although this may create an invalid spouse SSN condition for the subsequent year (if the spouse has not yet updated their name with Social Security Administration [SSA]), ERS can force the SSN through the system by assigning Return Processing Code (RPC) "E" to the next return

    3. If the name is obviously not the same taxpayer, check the SSN with CC INOLE and CC NAMES to determine the correct Master File name

    4. Update the second name line as needed. Do not change or add second name lines unless you have the original signed return

    The name on the return contains a name suffix (e.g., Jr., II, III, etc.)
    • Correct name suffixes on the notice entity if they are incorrect or missing

    • Do not prevent refund from generating for a missing name suffix

    The name on either the return or the notice contains a middle initial
    • Correct the middle initial if it is incorrect on the notice.

    • Add the middle initial if already changing or correcting the entity for another purpose

    The return entity shows a deceased taxpayer, an "in-care-of" person, or a guardian Add a second name line, if possible
    The return is for a minor and a parent or legal guardian signs the return
    1. Add "minor" to the taxpayer’s name

    2. Add the parent’s or legal guardian's name as a second name line

    3. It is acceptable to remove the word "minor" from a child's entity if they are at least 18 years of age

    Note:

    A parent’s or legal guardian's signature is valid on a minor taxpayer’s return

    Two signatures appear on the return Verify that the entity reflects both names, unless the filing status is Married Filing Separately (FS3)

    Note:

    When the Joint Name Line is present in OLNR, it may appear that a notice on a joint account is being mailed to a single taxpayer. However, this is a Dual Notice condition, and each spouse will receive their own copy with identical information. An entity change is not necessary

  2. Reducing the length of taxpayer name
    Name and Address fields are limited to 35 characters each. If the name line is more than 35 characters, modify it in the order shown in the list below, proceeding to the next item (if necessary) until the taxpayer name(s) can fit on the name line:

    How to reduce length of taxpayer(s) name
    1. Use initials only for middle or second name

    2. Delete middle initial of secondary taxpayer

    3. Delete middle initial of primary taxpayer

    4. Use initials only for secondary taxpayer's first name

    5. Use initials only for primary taxpayer's first name

    6. Use initials only for primary and secondary taxpayers' first name(s), if their last name(s) exceed the 35 character/space limit

    Note:

    Do not intentionally shorten taxpayer name(s) if they fit within the 35 character space constraint

  3. Inputting Name Changes

    Tax Return Input format for joint filers
    John Doe Mary Doe John & Mary]Doe
    John Doe Mary Smith John]Doe]& Mary Smith
    John Doe Mary Smith-Doe John]Doe]& Mary Smith-Doe
    John D Doe Mary Ann Smith-Doe John D]Doe]& Mary Ann Smith-Doe
    John D Doe III MaryAnn L Smith John D]Doe]III & MaryAnn L Smith
    John A DECD & Jane B Doe John A DECD & Jane B]Doe
    John D Doe III & Mary Doe John D III & Mary]Doe

    Note:

    The bracket "]" indicates the information after or between the brackets is the controlling surname. Additional spaces must not be input immediately before or after the bracket. .

  4. Entity Changes and OLNR disposition

    1. If only a name and/or an address needs to be corrected on the notice, update the entity by using the "E" or "EI" disposition.

    2. If other changes in addition to entity are also required on the notice (such as amounts, labels or TPNCs), use the "R" or "RI" disposition.

Verifying and Correcting Address Information
  1. Verify the address on the notice against the address on the tax return. Always correct the address on the notice. Use the return information provided by the taxpayer, but do not apply any information that is obviously incorrect. Refer to the lead if in doubt about any part of an address.

    Note:

    When making any change to the address in CC ENMOD/ENREQ, all elements of the address must be input (e.g., street address, city, state, and ZIP Code), even if the change is minor.

    If the address... Then...
    On the return is illegible Check the return and all attachments for a legible address
    On the return is from an IRS label, and is different than the address on the notice The taxpayer essentially agrees that the label information is accurate by signing the return. Check CC ENMOD for any pending or recent address changes. Change the address to match the label, but bypass any obvious errors that may appear on it
    On the notice is different, or is questionable Use the USPS ZIP code directory to verify the ZIP code, the spelling of the street, city, post office box, and state. Correct the address on the notice to reflect the ZIP Code directory information. Prevent refund from generating, if needed. If internet access is available, use the Post Office Web site's Zip Code Lookup http://zip4.usps.com/zip4/welcome.jsp
    On the notice is printed with LOCAL Check CC ENMOD for any pending or recent address changes. Check CC FINDS/FINDE for current taxpayer address information. If no current information can be found then verify the zip code using the United States Postal Service (USPS) web-site and change the address to GENERAL DELIVERY and print the notice.
    On the notice contains an inconsistent or misspelled street suffix Use the USPS ZIP code directory to verify the street suffix, then correct the entity in OLNR.
    Contains an Apartment, Building, Floor, Room, or Suite, etc. Correct or add these "secondary street indicators" if they are missing or incorrect.

    Reminder:

    If needed, prevent the refund from generating, if the check may be returned undeliverable as a result of a missing secondary street indicator.

    Contains a directional indicator in the street or city Make sure these "directional indicators" (e.g., N, NE, NW, E, S, SE, SW, W, etc.) are in the proper location. Typically, if a street name is a direction, it will be spelled out (e.g., West St., Northwest Blvd.). The directional indicators are almost always abbreviations (e.g., West St S, or S West St, E Chicago)

    Note:

    For additional reference information on addressing, and a more complete list of street designators and their abbreviations, refer to Document 12019, IRS Addressing Standards.

  2. In addition to following the chart above, change the address if:

    1. Signed correspondence from the taxpayer has the old address lined through and a new address written in its place.

    2. A CPA, attorney, or another authorized individual requests an address change, provided CC CFINK indicates that IRS has a Power of Attorney on file for that individual.

    3. Form 3870, Request for Adjustment, is attached to the document and shows a new address. This form is used by Area Offices to request account adjustments and indicates that there has been personal contact with the taxpayer.

    4. The return has a notation written on it, or has a response to previous correspondence attached, and we are accepting the information as coming from the taxpayer, even if it is not signed.

    5. The taxpayer has filed a Form 8822, Change of Address.

  3. Never change an address to an "in care of" unless the taxpayer or an authorized representative signed the request.

  4. Never change an address if a photocopy of an address change request does not contain an original signature.

  5. The return envelope should not be used to correct an address unless it is the same as the return and is used only to verify an illegible address from the return.

  6. Entity Changes and OLNR disposition:

    1. If only a name and/or an address needs to be corrected on the notice, update the entity by using the "E" or "EI" disposition.

    2. If other changes in addition to entity are also required on the notice (such as amounts, labels or TPNCs), use the "R" or "RI" disposition.

NRPS Automated Entity Updating
  1. NRPS creates an Entity Update File (NRP 8250) for most IMF entity changes. Changes made to the notice entity will automatically update CC ENMOD with a TC013 or TC014.

  2. NRPS cannot create entity update records under all conditions. In the following situations, the tax examiner must always use IDRS to update CC ENMOD, in addition to changing the entity data in OLNR:

    1. All overpaid notices requiring a critical entity change must be corrected on both CC ENMOD/ENREQ and OLNR. See IRM 3.14.1.7.5, Entity Adjustments

    2. When a notice carries a SPACK/Spouse copy (identified by the presence of the "Joint Name Line" field on OLNR). This applies to any change to the name line and/or address lines.

    3. When no notice is going to the taxpayer, but an entity change is still necessary the OLNR entity does not need to be updated.

      Example:

      When an entity correction is necessary for a voided notice.

Return Received Date
  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Any return received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ after the RDD should have the envelope attached and will carry the stamped "IRS Received Date" as the return received date unless the postmark date is on or before the RDD (as extended).

    Exception:

    A late filed return that was overlooked in processing may not be stamped. An incorrect received date will affect penalty and interest computations. See (3) below.

    If the postmark date is... Then the return received date is...
    On or before the RDD and a postmark was made by the USPS or a designated private delivery service under Internal Revenue Code (IRC) Section 7502(f) The RDD regardless of when the return was received
    After the RDD The IRS Received Date
  2. The return received date can be found on TXMOD in the RET-RCVD-DT field or in the NRPS Package/Control D DUE/RCVD DATE field.

  3. If there is a question about the received date, determine the correct received date in the following priority:

    1. Latest postmark date on envelope (United States Postal Service or designated private delivery service).

    2. Date the taxpayer signed the return (only if current year date).

    3. Julian date of the return DLN minus ten days.

      Exception:

      If the taxpayer has attached a note or explanation that the return is late because of rejection of a timely filed electronic return, the RDD will be used.

      Note:

      If a return was mailed to a state taxing agency, on April 15 or during the grace period and the state forwarded the return to IRS, it is considered late. If the IRS received date is not stamped on the return, use 0423XX as the received date.

  4. Adjust all interest and penalties as appropriate. Refer to IRM 3.14.1.6.21.1, Recomputations of Penalties and Interest — General.

  5. Verify the correct received date is used. If it is incorrect, prevent the systemic refund from generating> Issue a Manual Refund with recomputed credit interest, (TC 770 for .00 if the refund date is within the 45-day interest free period), and put the Return Processable Date (RPD) on the account with the correct received date. See IRM 3.14.1.6.6,Manual Refunds.

Tax Period
  1. There are three types of returns:

    1. Calendar Year — These are for a consecutive 12-month period ending on December 31. The tax period for this type of return is in the format CCYY12.

    2. Fiscal Year — These are for a consecutive 12-month period ending on the last day of a month other than December.

      Example:

      A return with a tax period ending January 31, 2013, has a tax period of 201301.

    3. Short Year — These are for a consecutive period of fewer than 12 months.

  2. Compare the year on the tax return against the tax period on the notice or the NRPS Package/Control D Contents Page.

    1. Look for cross-outs and changes to the tax period portion of the return.

      Note:

      Taxpayers often use current year tax forms to file prior year returns.

    2. Fiscal year returns are indicated at the top of the tax return.

    3. If the return is posted to the wrong tax period, reprocess the return to the correct tax period. Refer to IRM 3.14.1.6.22, Reprocessing Returns.

Signatures
  1. Tax returns are legal documents. All returns must have a signature(s). Accept any original signatures that are signed according to the return’s filing status.

    Example:

    A joint return (FS2) requires two signatures.

    1. Returns signed with an "X" require the signatures of two witnesses. Correspond if the witness signatures are missing. Send Letter 12C, and include selective paragraphs i and Declaration paragraph "q" , to provide signature lines for the witnesses.

    2. Never accept photocopied signatures as valid original signatures for the tax return.

      Exception:

      Do not correspond if return states Correspondence Imaging System (CIS).

    3. If a person other than the taxpayer has signed the return, check CC CFINK to ensure that the taxpayer has a power of attorney on file for the signer. If no information is available and documentation is not included with the return, prevent the refund from generating and correspond for the necessary information.

  2. Electronic Filing (ELF) documents are signed either via Form 8453, or electronically. It is not necessary to correspond for signatures on an MeF processed return.

  3. If one or more signatures are missing on an overpaid account, analyze the return to determine if the taxpayer replied to previous correspondence from Code and Edit or ERS.

    Exception:

    If the entire refund is offsetting or refund cannot be prevented from generating, do not correspond for signature, and do not hold the case in inventory.

    If... Then...
    The signed reply is attached to the return Review the case as if the original return was signed
    There was no previous correspondence
    1. Prevent the refund from generating and correspond for the missing signature(s)

    2. Print or Retype the notice. Verify and edit, if necessary the Refund Release indicator (RRI) on the notice (RRI 1= No Refund, and RRI 3= Statute Expired)

    3. Follow IRM 3.14.1.7.4, Taxpayer Correspondence/Reply instructions

    4. Open a control base under the activity WAIT4SIGN,

    There was previous correspondence, but no reply
    1. Computer Condition Code (CCC) 3 should have been edited on the return to generate a –R freeze (TC 570) to hold the overpayment. These cases will be worked as transcripts in Accounts Management (AM)

    2. If a –R freeze (TC 570) is not on the module then prevent the refund from generating using guidelines in IRM 3.14.1.7.1.1, Refund Intercepts and input a 290 for .00 Hold Code 4 to set a –K freeze

    3. Print the notice

    A taxpayer response is received after 45 days, and the control base is closed
    1. Complete Form 3465, Adjustment Request, indicating that the Return Processable Date needs to be updated

    2. Route Form 3465 and the response to Accounts Management

    3. Follow IRM 3.14.1.7.4, Taxpayer Correspondence/Reply instructions.

  4. If the return is a balance due, it is not necessary to secure the signature, unless a subsequent adjustment is necessary, which will result in the account becoming overpaid. If this occurs:

    1. Use Hold Code "4" on the adjustment to set a –K freeze.

    2. Retype the notice as appropriate and allow the notice to be released in cycle.

    3. Send Letter 143Cfor the signature, and handle the response appropriately when received.

    4. Open a control base under the activity "WAIT4SIGN" , and monitor the case for up to 45 days, or until a signature is received.

    5. Follow the reply or no reply instructions in IRM 3.14.1.7.4, Taxpayer Correspondence/Reply.

    If ... And the result will be... Then ...
    No other action is necessary a balance due
    1. Print the notice in cycle

    2. Do not suspend the case

    An adjustment is needed a balance due
    1. Retype the notice

    2. Do not suspend the case

    An adjustment is needed an overpayment
    1. Use Hold Code "4" on the adjustment

    2. Retype the notice in the current cycle

    3. Monitor the case for 45 days from the date the letter was input, keeping the control base open under activity code "WAIT4SIGN "

  5. Faxed signatures are now acceptable for returns in very limited situations if the taxpayer has not previously signed the return. Before acceptance, do the following:

    1. Verify that a faxed signature is not attached to the return based on a prior correspondence from the IRS.

    2. Validate that you are speaking to the taxpayer or authorized representative.

    3. Advise taxpayer that the signature will become a permanent part of the tax return.

    4. Fax the signature perjury statement (jurat) to the taxpayer or authorized representative.

Analyzing NRPS Data Sheet Appended

  1. NRPS extracts this data from the following sources:

    • Generalized Unpostable Framework (GUF) and Unpostable Files

    • Tape Edit Processing (TEP) File

    • ERS File Revenue Receipts

    • Unidentified Remittance and Excess Collection File

    • Resequencing File

    • Generalized Mainline Framework (GMF) Error, Computer Assisted Review of ERS (CARE), Block Out of Balance (BOB), and Reject Files

Pending Transactions
  1. Pending Transactions are account actions that have not posted to the taxpayer’s account by the notice cycle.

  2. Pending Transaction data consist of transaction codes, dates, and amounts, account identifying information, and other pertinent data. This data appears with the name of its source file (GUF, TEP, etc.) under the Pending Transaction heading on the NRPS Package/Control D Contents Page and on TXMOD under the Pending Transactions section. Refer to the Pending Transaction Files exhibit. Exhibit 3.14.1-34

Unpostable Transactions

  1. Unpostable transactions are transactions that require corrective action before they can post to the Master File.

  2. Unpostable Codes (UPCs) identify the set of conditions that caused the unpostable transaction. Unpostable Reason Codes (RCs) specify the various conditions that can be present for each UPC.

    Note:

    Document 6209, IRS Processing Codes and Information, Section 8B, contains descriptions of UPCs and RCs. This information will help determine the appropriate corrective action.

  3. Unpostable Resolution Codes (URC) identify whether the corrective action can be done systemically, manually by the Unpostables function, or must be rejected back to the originator for correction.

  4. The GUF and the Unpostable Files show pertinent information about unpostable transactions on IDRS, including:

    • Transaction Code

    • Date

    • Dollar Amount

    • ITIN

    • MFT

    • Tax Period

    • XREF Account

    • UPC

Reviewing Unpostable Transactions
  1. A pending Unpostable will display one of the following identification codes next to the Transaction Code:

    • Unnn or UP — An open unpostable transaction "nnn" is a numeric unpostable code, e.g., 198 or 175.

    • CU — A corrected unpostable. The transaction should post in the cycle displayed on IDRS.

    • DU — A deleted unpostable. This transaction will not post and has been deleted from the module.

    • NU — A nullified unpostable. This transaction should be resolved by the Rejects Function or by the originating tax examiner.

Resolving Unpostable Transactions
  1. Utilize the following steps for resolving an unpostable condition:

    1. Use the Unpostable Code to determine the reason for the unpostable condition.

    2. Use CC UPTIN to view the unpostable record(s). If the unpostable transaction is out of region use the @ with the campus location code.

      Note:

      For listing of the campus locations codes see Doc 6209, Section 4.

      Example:

      UPTIN@07

    3. If the case is open, use CC UPDIS with the Unpostable Sequence Number to access the response screen.

    4. Overlay the CC UPRES screen with CC UPCASZ and input any information useful to the Unpostables Function for resolving the unpostable condition.

    5. If the case is closed, the Unpostable Resolution Code (URC) will indicate the resolution to the unpostable condition. Use this information to determine how the transaction will affect the notice and the notice module. No further action is required on the unpostable. Correct the notice as instructed in the IRM 3.14.1.7.8,Notice Disposition.

    6. If the transaction can be posted as it is, leave a history item indicating that the Unpostables Function should post the transaction without a change. The transaction may have been unpostable when it first reached the Master File.

      Example:

      When a TC 670 transaction has failed to post to an account having a credit balance (UPC 198), but will now post because a debit transaction has posted, leave a history item. See Notice Review Job Aid 2534-002.

    7. If you cannot determine whether an unpostable transaction will post, take no action.

  2. When notified of an unpostable, the transaction has usually been deleted on IDRS. Use the Unpostable Code information to correct the transaction.

    Note:

    The Unpostables Function will open a control base for the originating tax examiner and include the transaction on the Nullified Distribution Listing.

    If the... Then...
    Error condition can be corrected Re-enter the transaction with the corrected information
    Error condition cannot be corrected Close the control base. Input any necessary history items, TC 570s, or CC STAUPS. Prevent any incorrect refunds from generating, if applicable, per guidelines in IRM 3.14.1.7.1.1, Refund Intercepts
    Adjustment or transfer was already input by someone else Do not enter a duplicate transaction. Close the control base

    Note:

    See Notice Review Job Aid 2534-002 for common Unpostable Codes and how to resolve them.

Preventing Unpostable Transactions
  1. Avoiding unpostables requires that the proper priority codes, hold codes, bypass indicators, freeze codes (or TC 570), and posting delay codes be input with an adjustment or credit transfer.

  2. Review each account carefully before entering an adjustment or credit transfer.

  3. Consider the effects of pending transactions, previous actions, freeze codes, module balances, and posted manual penalty and interest adjustments. Also consider the effects of the transaction being input.

  4. Contact any controlling tax examiner to coordinate actions on modules and to prevent erroneous and duplicate adjustments.

  5. To prevent unpostable tax adjustments (Doc Code 54):

    1. Verify that the adjustment is not a duplicate of a previous adjustment.

    2. Consider previous tax adjustments before inputting a subsequent adjustment, especially those within $10 of a previous adjustment. If it is still necessary, use Priority Code 8 on the adjustment.

    3. Look for any manual adjustments of penalties and interest (TC 160, 161, 170, 171, 340, and 341) that need correction or recognition when inputting an adjustment.

    4. Use the correct MFT, tax period, and name control.

    5. Input the correct Item Reference Codes and Credit Reference Numbers. Consider posted amounts, and limitations for each code being input.

    6. Do not attempt to reduce tax, any refundable credit, or any of the following Credit Reference Numbers below zero:
      873 — Adjust Primary F8919 Soc Sec Wages Computer
      874 — Adjust Secondary F8919 Soc Sec Wages Computer
      878 — Primary Self Employment Income
      879 — Secondary Self Employment Income
      885 — Advanced EIC
      886 — Taxable Income
      887 — Number of Exemptions
      889 — Self Employment Tax amount
      891 — Primary Tip Income
      892 — Secondary Tip Income
      893 — Adjust the Primary (F8919) Total Medicare Wages
      894 — Adjust the Secondary (F8919) Total Medicare Wages
      895 — Primary Medicare Income
      896 — Secondary Medicare Income
      898 — Primary Medicare Tip Income
      899 — Secondary Medicare Tip Income

  6. To prevent Unpostable Credit Transfers (Doc Code 24, 34, or 48):

    1. Whenever possible, begin the credit transfer from within the notice module.

    2. Use the correct reversal transaction code for the posted transaction code.

      Example:

      Use TC 672 to reverse TC 670.

    3. Use the correct MFT, name control, and tax period.

    4. When transferring overpayments, verify that the credit is available to be transferred. TC 830 and TC 820 amounts cannot exceed the credit balance on the module.

    5. When transferring payments from an account, verify that the dates on both sides of the credit transfer match. The money amounts must not exceed the amounts of the transactions being reversed.

      Caution:

      TC 826 and TC 706 can have different transaction dates. Use the correct dates for the debit and credit transactions when reversing these transactions. Follow credit elect and offset procedures, IRM 3.14.1.6.4.Offsets.

    6. When transferring credits to a fully paid module or to a balance due module and the transfer will create an overpayment, use a Bypass Indicator "1" .

    7. Use a Credit Freeze Code "1" (Doc Code 34) or input a TC 570 (Doc Code 24)on the credit side of the transfer if the credit should be held. This will generate a –R freeze.

      Note:

      Two TC 570s will not post simultaneously on a module, unless the first unreversed TC 570 is the systemic hold placed by IMF (55555 in the blocking series).

    8. Use a posting delay code (one to six cycles) to delay the posting of a transaction so that it matches the posting cycle of another transaction.

      Example:

      Use it to delay the posting of a Doc Code 48 debit transaction until a Doc Code 34 credit transaction posts.

Offsets

  1. The computer will automatically offset an overpayment if a credit elect request to a subsequent year is present, but will first attempt to satisfy balances due for other federal taxes, or liabilities owed to other federal or state agencies. Therefore, when manually transferring credits, Lump Sum Credit Offsets to other federal taxes, and Treasury Offset Program (TOP) offsets to other agencies take priority over credit elect and refund requests. TOP offsets can be identified by the DEBT indicator on the module. See IRM 3.14.1.6.4.3TOP Offsets-TC 898/899

  2. Satisfy all existing modules with a balance due ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ before inputting a manual refund or manually transferring a credit elect.

Credit Elect — TC 836/716 or TC 830/710
  1. The following notices pertain to Credit Elect situations:

    • CP 10 — Generates when a math error reduces the overpayment and the requested Credit Elect.

    • CP 10A — Generates when an EIC math error reduces the overpayment and the requested Credit Elect.

    • CP 45 — Generates when there is no settlement notice to inform the taxpayer that only a portion (or none) of the requested amount was credited.

      Note:

      If a settlement notice generates, the notice will contain a pop-in paragraph that informs the taxpayer of the unapplied credit elect amount.

  2. Review the return to determine if the taxpayer requested all or part of their overpayment be applied to the subsequent tax year as an estimated tax payment.

  3. When a credit elect request is transcribed properly on a current year return, the computer will automatically offset the credit (TC 836/716) if it is available, even if the overpayment is caused by a subsequent adjustment or credit transfer.

  4. If the full amount of credit elect requested is not available when the return posts, the computer will offset what is available, and continues to offset (as more credit becomes available), until the full credit elect amount is satisfied. This capability exists until the TC 150 for the next year's return posts.

    Note:

    Credit Elect on a current year return may not automatically transfer to the next year after November 1st of the current calendar year.

  5. If the credit elect request was transcribed incorrectly, and the credit has refunded, take no action. CP 10 and 45 instructs the taxpayer to review the subsequent tax year estimated tax payments to avoid any possible underpayment.

  6. Master File will not automatically process credit elect requests on prior year or future year returns, if a TC 150 has already posted to the receiving tax period.

    1. Use CC TXMOD/RTVUE to review the subsequent period if it is not in the NRPS Package/Control D.

    2. Manually input all subsequent credit elects on all prior year returns.

      Caution:

      Never transfer credit elect from a module with an expired RSED.

    3. Transfer a claimed credit elect directly to a module separated by more than one tax period, if all modules in between claim the same Credit Elect, are settled modules, and no penalties or interest will abate. Use the correct dates and an Override-Dt Code "2" on the Doc Code 48 transfer.

      Example:

      Transfer from 201212 directly to 201412, if 201312 also claims a credit elect request, and has no penalty or interest that would abate if the credit elect was passed through it.

    4. All other offsets (TC 820/826, TC 898) have priority over a Credit Elect. Only reverse a TC 820/826 offset in favor of a credit elect, when a TC 826 has offset to the credit elect receiving module, and penalties and interest in that receiving module will decrease if a timely credit elect posts. However, do not reverse a TC 898 for a credit elect.

    If any of the following apply... Then...
    • The subsequent tax period has a balance due;

    • The credit elect will cause penalties and interest assessed on the subsequent period to partially or fully abate; or

    • The taxpayer claimed the credit on the subsequent tax period and the Credit Elect field on the subsequent module has a significant amount,

    • There is no TC 150 on the subsequent year's account

    1. Prevent the refund from generating

    2. Retype the settlement notice, editing the Credit Elect and unapplied credit elect fields accordingly, or void the CP 45

    3. Manually offset the Credit Elect

    Otherwise Allow the refund
  7. When increasing tax or reversing credits on the notice module, reverse all or part of a notice cycle Credit Elect to cover the debit. Use CC ADC48 and TC 832/712 on IDRS.

    1. If necessary, prevent the refund from generating on the subsequent module. If the refund was intercepted then reverse the offset using a posting delay code to allow time for the TC 841 to post before the TC 712. Also, input Bypass Indicator "0."

    2. Do not reverse a Credit Elect that was offset in a different cycle than the notice cycle.

      Example:

      If the notice generated in cycle 201615 and the TC 836 posted in cycle 201618, do not reverse the TC 836.

    3. Retype the original notice and edit the Credit Elect/unapplied credit elect fields or retype to a CP 10 and edit the "Credit Elect per Taxpayer" and "Credit Elect to Next Year" fields.

  8. If the Credit Elect from the prior year module (TC 716) was intended for another account, use CC ADD48 to transfer the payment with a TC 712/710:

    1. Use the TC 716 date as the TC 712 date.

    2. Use the correct date for the tax period as the TC 710 date.

  9. When manually transferring Credit Elect(s), input TC 830/710 using CC ADD48:

    Note:

    Check INOLES for a debt indicator before moving credit elect. See IRM 3.14.1.6.4.3, Treasury Offset Program (TOP) Offsets- TC 898/899

    1. Use the later of the Return Due Date (RDD) or the date of the credit creating the overpayment (except on timely credits) such as the TC 830/710 date.

      Note:

      Multiple TC 830s may be needed depending on the date the credit is available. Always transfer the most recent credits first.

    2. If a tax adjustment or credit transfer creates (or is a part of) the overpayment, input the offset (TC 830) to post after the adjustment or credit transfer by inputting a posting delay code, if needed.

    3. If a subsequent notice must be stopped, take the appropriate action. See IRM 3.14.1.7.8, Notice Disposition.

      Note:

      Coordinating the timing of posting actions allows all transactions to post in a manner that prevents unintentional refunds and unpostables. If the required overpayment amount is not available, the computer will resequence the TC 830 for one cycle. The full amount of credit must be available or the TC 830 will unpost.

      Reminder:

      If FTF or ES Penalty will recompute, input a TC 290 for .00 with a Hold Code "4" , and a posting delay code timed to post in the same cycle as the penalty reversal. This will prevent an adjustment notice.

      If... Then...
      The penalty or interest will recompute because of an adjustment action To avoid erroneous refunds and unpostables, use posting delay codes and a TC 570 or credit freeze code to time the transactions to post in the following order:
      1. Adjustments or credit transfers

      2. TC 830

      3. TC 571 (if needed)

      Caution:

      Check for prior year debit modules before inputting a TC 830/710. Use CC ADD24 and a TC 820/700 if an offset to a debit module is needed. Time it to post in the same cycle as the TC 830/710

      Note:

      If penalties and interest will not recompute, the input of a posting delay code on the TC 830 is unnecessary.

      A Doc Code 34 credit transfer will create the overpayment
      1. Input a Credit Freeze Code "1" on the transfer. Input the TC 830/710 on a Doc Code 48 with a Posting Delay Code "2"

      2. If a credit will remain on the module to be refunded, use CC REQ77 to input a TC 571

      3. Use a Posting Delay Code "3" to time it to post after the TC 830

      A Doc Code 24 or 48 credit transfer or a Doc Code 54 adjustment will create the overpayment
      1. Use a TC 570 on the credit side of the transfer

      2. Use Hold Code "4" on any CC ADJ54 adjustment

      3. Input the TC 830/710 on a Doc Code 48 with Posting Delay Code "1"

      4. If a credit will remain on the module to be refunded and Hold Code "4" was not used, use CC REQ77 to input a TC 571. Use a Posting Delay Code "2" to time it to post after the TC 830

    4. Determine the correct notice disposition:

      If... And... Then...
      The CP 45 or settlement notice with the Credit Elect pop-in paragraph was generated for the taxpayer Master File cannot systemically offset the additional Credit Elect
      1. Manually transfer the Credit Elect (see above)

      2. Retype the notice to reflect the credit elect

      The CP 45 or settlement notice with the Credit Elect pop-in paragraph was generated for the taxpayer Master File can systemically offset the additional Credit Elect Print the notice
      All of the requested Credit Elect amount has now been applied A CP 45 generated Void the CP 45
      All of the requested Credit Elect amount has now been applied A settlement notice generated with the Credit Elect pop-in paragraph Retype the notice to include the corrected Credit Elect amount, and also to exclude the pop-in paragraph (or void if no notice is necessary at all)
      The total Credit Elect applied is still less than the taxpayer’s figures A CP 45 generated Retype the CP 45
      The total Credit Elect applied is still less than the taxpayer’s figures A settlement notice generated with the Credit Elect pop-in paragraph Retype the notice to reflect the current status of the taxpayer's account
  10. When manually transferring a credit elect, do the following:

    1. Use an Override-Date Indicator "2" on both sides of a CC DRT48 screen if the debit and credit transaction dates are different.

      Example:

      When moving a credit elect forward two or more years.

    2. Typically, for the TC 830 date, use the Return Due Date (RDD) or the earliest date of credit availability, whichever is later. The same date applies to the TC 710 date.

    3. Multiple CC ADD48 transactions are necessary if credit availability dates (after RDD) are staggered.

      Example:

      On a 201312 return, with a $1,500 credit elect requested: If only $500 is available at RDD (04152014), and the remaining $1,000 isn't available until 06/15/2014, then input two separate TC 830s with corresponding dates.

    4. Do not input a Credit Elect for an amount exceeding the available credit on the losing module. The transaction will go unpostable.

Lump Sum Credit Offset — TC 826/706 and TC 820/700
  1. Master File offsets available overpayments (with a TC 826/706) to an account in which a taxpayer has a balance due. The overpayment offset will post as a TC 826 (with a corresponding TC 706 in the receiving module).

  2. If credit interest is available on that overpayment, and offsets at the same time as the TC 826, the credit interest offset will post as a TC 856 (with a corresponding TC 736 in the receiving module).

  3. A notice will generate to inform the taxpayer of the offset:

    Note:

    This offset to a debit account has priority over a requested credit elect.

    • CP 16 generates when an overpayment with a math error offsets to another tax liability. Refer to IRM 3.14.1.6.12.7, Math Error Notice Disposition.

    • CP 49 generates for any other offset to another tax liability.

  4. Use a Doc Code 24 credit transfer with a TC 701 (debit) and TC 821 (credit) to reverse an offset to a tax liability.

  5. Include a TC 570 with the TC 821 (and any associated TC 851) on the credit side of the transfer screen, if the credit should be held.

    Note:

    A TC 701 input to a settled module will not generate a CP 60 on the module.

    1. Verify that the reversal date matches the original offset date. Use CC IMFOLT to review a module that is not in the NRPS Package/Control D or on IDRS.

      Caution:

      The TC 826 date may differ from the corresponding TC 706 date. Similarly, the TC 856 date may differ from that of the corresponding TC 736.

    2. Reverse multiple transactions in the order that the TC 826s appear on the module. Do not combine transactions.

  6. If an adjustment will leave a balance due on a module, reverse the offset:

    If... Then...
    There is a current cycle TC 826/706 offset Reverse it, in whole or in part, to satisfy the balance due. Do not reverse a prior cycle TC 826 unless the TC 826 amount is refunding in the current cycle
    The module that received the offset has a current cycle refund Prevent the refund from generating. Reverse the TC 826, using a posting delay code to allow time for the TC 841 to post prior to the TC 821
  7. Use CC ADD24 with TC 731 (debit) and TC 851 (credit) to reverse credit interest that has been offset (TC 736/TC 856). Use a TC 570 on the credit side of the transfer if the credit needs to be held.

    Note:

    Use CC REQ54 with a TC 772 to reverse the TC 776. Use Hold Code "3" , if needed.

  8. Void or retype the CP 16 or the CP 49 as appropriate. Refer to IRM 3.14.1.6.12.7.5, CP 16 Notice Disposition .

Treasury Offset Program (TOP) Offsets — TC 898/899
  1. For current year Form 1040, an amount other than zero in the unapplied credit elect field indicates a TOP Offset.

    Note:

    Do not prevent the refund from generating to transfer unapplied credit elect; the TOP offset has priority over the credit elect. Be aware of situations requiring special handling. Refer to IRM 3.14.1.6.9.9, Injured Spouse Claims, if necessary.

  2. A TOP Offset debt indicator is displayed on the following screens:

    • CC TXMOD (DMF-LIAB-IND>) — below the TC 846 line, to the right

    • CC TXMOD (OTN-CD) — TC 898 with OTN-CD below the refund

    • CC REINF (FMS-DEBT-IND)

    • CC INOLE with definer S or X (Debt Indicator). The debt indicators for a TOP Offset are "F,” “I," or "B"

    Note:

    On a joint return (FS2) be sure to check both the primary and secondary taxpayers for any debt indicators.

  3. For more information about reversing TOP offsets, refer to the Notice Review Job Aid 2534-002.

Payments and Credits
  1. This section contains information related to payments and credits. It includes information on Lockbox Payments, the Remittance Transaction Research (RTR) System, Dishonored Payments, Discovered Remittance, and Contributions to Reduce the Public Debt.

Lockbox Payments
  1. Payments for balance due returns (Form 1040–V) and Estimated Tax payments (Form 1040–ES) are sent to Lockbox locations.

  2. Estimated Tax payment DLNs contain "220" as the third, fourth, and fifth digits.

    1. If a Lockbox payment causes an ES discrepancy, follow the procedures in IRM 3.14.1.6.13, Reviewing Estimated Tax Discrepancy Notices.

    2. Follow procedures in IRM 21.5.7.4.7.4(8) for Out-of-Area Lockbox payments.

  3. Form 1040–V payment DLNs contain "270" as the third, fourth, and fifth digits.

    1. If the tax return indicates that a payment was made and an ES discrepancy exists, verify any excess credits against the balance due on the return.

    2. If the excess ES credit matches the balance due on the return, void or retype the ES discrepancy notice as appropriate.

Remittance Transaction Research (RTR) System
  1. The Remittance Transaction Research (RTR) system is a researchable database that provides all payment information and images on-line immediately after receipt from ISRP and Lockbox. RTR supports ten days of data on-line and three years of data near-line, allowing for an immediate query response time. Exhibit 3.14.1-33

  2. Notice Review's use of RTR provides greater efficiency in resolving payment tracer cases and misapplied payment or excess credit issues.

Dishonored Payments and Bad Check Penalties
  1. If a Dishonored Payment transaction (TC 611, 671, 641, 681, or 661) and a penalty (TC 280 or TC 286) are pending on the notice module:

    1. Prevent the refund from generating, if applicable.

    2. Input CC STAUPS for eight cycles if a balance due remains.

    3. Retype the original notice to include the Dishonored Check and Dishonored Check Penalty (Notice Penalty Code 04). Update the balance due and pay-by-date, refund amount, or credits on the notice using CC RECON and/or CC INTST.

      Note:

      CC INTST is not accurate until the TC 280 or TC 286 posts or CC RECON updates the module.

Discovered Remittance
  1. When reviewing tax returns, especially Non-Math Error Balance Due notices (Key 092), thoroughly search all attachments (including envelopes) for payments.

  2. Use the following procedures to process a discovered remittance:

    1. Prepare Form 3244, Payment Posting Voucher, in duplicate.

    2. Attach the copy to the front of the tax return under the entity section.

    3. Use CC ACTON to input a history item of "DISC–REMIT" on IDRS.

    4. Input CC STAUPS for eight cycles on all balance due modules.

    5. Void, retype, or label the original notice as required.

    6. Provide the remittance, the original copy of Form 3244, the NRPS Package/Control D, a print of CC TXMOD, and the tax return to the lead.

    7. Complete Form 4287, Record of Discovered Remittance, as appropriate.

      Note:

      Check to see if the taxpayer indicates the money is intended for the Public Debt. Refer to IRM 3.14.1.6.4.4.5, Contributions to Reduce the Public Debt, if necessary.

Contributions to Reduce the Public Debt
  1. Occasionally, taxpayers request that all or part of their overpayment (or remittance) be applied to reduce the Public Debt. These payments generally post as a TC 610 or TC 670.

    If the credit... Then...
    Is refunding
    • Prevent the refund from generating if the refund has been held (no TC 846 and a TC 570 with blocking series "55555" ) and prepare Form 3809, Miscellaneous Adjustment Voucher, in duplicate, to transfer the specified amount to the 6400 account. Refer to the Transferring Credits to the Public Debt Fund exhibit. Exhibit 3.14.1-35

    • If TC 846 is on the module, take no action

    Posted to a prior year module Prepare Form 3809, Miscellaneous Adjustment Voucher, in duplicate, to transfer the specified amount to the 6400 account. Refer to the Transferring Credits to the Public Debt Fund exhibit. See Exhibit 3.14.1-35 for step by step instructions
    Posted to a current year module Prepare Form 2424, Account Adjustment Voucher, to transfer the specified amount to the 6400 account. See IRM 3.14.1.6.8, Figure 3.14.1-5 for step by step instructions

Decedent Accounts

  1. When a taxpayer is a decedent, all Functions must follow certain procedures to ensure that a correct refund is issued. In order for a computer generated refund to be issued to the correct person, the account must have all of the following present:

    1. A current year entity reflecting first and second name lines.

    2. Computer Condition Code (CCC) "L" or "W" .

    3. All required supporting documents. If both taxpayers on a joint return (FS2), or a lone taxpayer (FS1, 3, 4, or 5) is deceased, Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, or court appointment documentation must be attached to the return if the account is overpaid.

    4. Make sure the term "DECD" appears after the first name of the decedent on a joint (FS2) account, or after the surname of the primary taxpayer for any other filing status. Only surviving spouses and representatives should appear on the second name line.

    5. Do NOT change the name line to replace the term "DECD" with "Estate of" under any circumstances. Code & Edit or ERS may use that for correspondence purposes, but do not remove the term "DECD" from the entity.

      Note:

      Supporting documentation is unnecessary on even balance or balance due accounts or if only one taxpayer on a joint account (FS2) is deceased, or if the overpayment is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  2. Decedent refund claims must have supporting documents (Form 1310 or Court Appointment Documentation and Payment Verification) unless there is a surviving spouse. The surviving spouse need only provide the date of death for the deceased spouse. The following CCCs apply to decedent accounts. Review the NRPS Package/Control D or posted return information on TXMOD to determine if the necessary codes were transcribed:

    CCC DESCRIPTION
    A
    • Both taxpayers died during the tax period

    • Deletes both the primary and secondary taxpayers from the module

    • Form 1310 or court appointment documentation is required to allow any overpayment to be refunded to the personal representative or court appointed official

    Reminder:

    If the account is overpaid, the return should also contain CCC "L"

    F
    • The primary taxpayer died during the tax year

    • Deletes the primary taxpayer from the module and establishes an updated entity for the surviving spouse on the secondary SSN, one cycle after the return (TC 150) posts

    • Form 1310 or court appointment documentation is not required since there is a surviving spouse

    Reminder:

    If the account is overpaid, the return should also contain CCC "W"

    Note:

    Both CCC "A" and "F" generate a TC 540 on the module for the year of death, updating the Mail Filing Requirement (MFR) to "08" on the entity, which deletes the filing requirement

    9
    • The secondary taxpayer died during the tax year

    • Deletes the secondary taxpayer from the module and establishes an updated entity for the primary taxpayer one cycle after the return (TC 150) posts

    • Form 1310 or court appointment documentation is not required since there is a surviving spouse

    Reminder:

    If the account is overpaid, the return should also contain CCC "W"

    L
    • Reverses the first and second name lines so that the refund check generates to the person on the second name line

    • Form 1310 or court appointment documentation is required, since there is no surviving spouse

    W
    • This is used when there is a surviving spouse on a joint account

    • Suppresses the first name line so the refund check will generate to the second name line only

      Note:

      A CCC "L" or "W" prevents the refund check from being issued to the deceased taxpayer. An account with a surviving spouse with a CCC "L" or "W" does not require a manual refund

  3. Review the account:

    If... Then...
    Additional information (signature, Form 1310 or court appointment documentation) is required before a refund can be issued
    1. Correspond with the taxpayer in the current cycle to request the missing information. Remove DECD from the name line when corresponding by letter, but do not remove DECD from the entity portion of the notice on OLNR or on ENMOD. Also, do not replace DECD with Estate Of on the Notice or on ENMOD

      Note:

      A math error or a discovered credit might have caused the overpaid condition

    2. If an adjustment is not needed, print the original notice in cycle. The taxpayer may not realize that a refund is due.

      Note:

      A prompt reply is likely if the surviving spouse or Executor realizes a refund is due

    3. Follow Reply/No Reply instructions in IRM 3.14.1.7.4 Taxpayer Correspondence/Reply Procedures

    The account contains a CCC "9" An adjustment resulting in an additional refund will require a manual refund since a second refund will not be computer generated
    1. The original TC 846 computer generated refund will be issued correctly if there is a first and second name line on the current entity and the account contains a CCC "L" or "W"

      Note:

      CCC "9" indicates a deceased secondary taxpayer. After the computer releases the original refund,a second systemic refund can be issued as long as the current processing year entity reflects the first and second name lines. The second name line will be retained until later in the year to allow more systemic refunds.

    2. Input the adjustment with the appropriate Hold Code

    TC 540 is not present and the primary taxpayer is the decedent, and the date of death is in the same year as the notice module Use CC REQ77 to input a TC 540. Use the Date of Death in the TRANS-DT> field of FRM77 response screen. TC 540 is not necessary if the secondary taxpayer is the only decedent.

    Note:

    Refer to the IRM 3.14.1.6.6Manual Refunds section for instructions on issuing a manual refund.

  4. Form 1310 or court appointment documentation is required when an overpayment on a decedent account ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ will refund to someone other than a surviving spouse. Refunds ≡ ≡ ≡ ≡ ≡ ≡ ≡ do not require the documentation.

    If... And there was... Then...
    Form 1310 or court appointment documentation is attached to the return No previous correspondence
    1. Verify that the notice has the same second name line and address as the attached Form 1310 or court appointment documentation

    2. If different, correct notice

    Form 1310 or court appointment documentation is not attached to the return No previous correspondence Prevent the refund from generating and correspond for the missing Form 1310 or court appointment documentation

    Note:

    Remove DECD from the name line when corresponding by letter, but do not remove DECD from the entity portion of the notice on OLNR or on ENMOD. Also, do not replace DECD with Estate Of on the Notice or on ENMOD

    Form 1310 or court appointment documentation is not attached to the return No reply to Code and Edit or ERS correspondence CCC "3" should have been edited on the return to generate a –R freeze (TC 570) to hold the overpayment
  5. Form 1310 or court appointment documentation is not required on a balance due account, unless an adjustment is made that will result in an overpayment.

Manual Refunds

  1. A Manual Refund (also known as an IDRS-generated refund) is a refund which is not generated by normal computer processing. Manual Refunds post to the tax module as a TC 840. Manual Refunds are completed by leads.

  2. The general processes to follow for manual refunds are:

    1. Determine if a Manual Refund is required.

    2. Compute credit interest, if necessary, on the credit to be manually refunded.

  3. Before inputting a Manual Refund:

    1. Ensure that a computer-generated refund will not generate.

    2. Prevent any computer-generated refund. Wait until TC 841 is present on TXMOD before inputting a Manual Refund.

    3. Monitor any account where a pending transaction may cause a refund to generate before the TC 840 posts.

    4. When issuing a manual refund based on a "Hardship" claim, verify that no bankruptcy action (V– freeze) is pending.

  4. Verify that the case is correct and no other actions are needed before issuing a manual refund.

    1. Do not generate a TC 846 from any IDRS actions.

    2. Use a Hold Code "1" , or "4" (as appropriate) on a CC ADJ54 adjustment and a TC 570 or credit freeze code on a credit transfer.

  5. Obtain all necessary documents to support the refund claim. Correspondence or telephone contact with the taxpayer may be needed.

    1. Preparing and inputting the Manual Refund, via Form 5792 (Request for IDRS Generated Refund) and CC RFUNDR.

  6. Use CC IMFOLI to research the taxpayer’s account for debit balances on other modules. Transfer credit using a TC 820/TC 700 on CC ADD24 to satisfy a balance due if the assessed liability is ≡ ≡ ≡ ≡ ≡ ≡ ≡ or the accrued liability is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  7. Refer to IRM 21.4.4.3.5, Manual Refunds, Approval from other functions, for freeze codes that must be addressed before a manual refund is issued.

  8. Take all necessary action to prevent an erroneous refund or erroneous notices from generating.

  9. Use a CC REQ54 to input a new Return Processable Date on IDRS if required correspondence was received after the Return Due Date (including extensions):

    If... Then...
    A CC REQ54 adjustment is needed Include the Return Processable Date with that adjustment. Use Hold Code "1" , or "4" , if necessary
    A CC REQ54 adjustment is not needed Use CC REQ54 to input the Return Processable Date. Input a TC 290 for .00, Blocking Series "05" , NSD, and Hold Code "4" .
Determining When a Manual Refund is Required
  1. Issue Manual Refunds under the conditions listed below. For additional information, see IRM 21.4.4, Manual Refunds.

    Note:

    It is mandatory to issue and monitor Manual Refunds using the IAT tool.

    If... Then...
    The taxpayer requests an immediate refund on a deleted refund case due to financial or other hardship Issue a manual refund
    A refund was prevented from generating to verify unclaimed payments, the substantiated total is $5,000 or more, and the 45-day interest-free period is in jeopardy

    Example:

    A taxpayer claims three payments of $2,000 each. The account shows these plus another payment of $2,260

    Issue a manual refund for the substantiated payments
    A refund is for $100,000,000 or more Refer to $100,000,000 Refunds, IRM 3.14.1.6.9.3
    Technical or Taxpayer Advocate Service criteria determine that there has been agross disservice to the taxpayer, a refund was prevented from generating to verify unclaimed payments, the documents are unavailable, and the taxpayer has not replied to correspondence Issue a manual refund
    1. Issue a manual refund for the claimed payments

    2. Transfer the unclaimed payments to the Unidentified Remittance File or to the Excess Collection File. See IRM 3.14.1.6.8, Excess Collections (XSF) and Unidentified Remittance (URF) Files

    The taxpayer requests that a refund check be issued to an address other than that shown on IDRS, and indicates that the address is temporary Issue a manual refund to the temporary address.

    Caution:

    Do not input an address change. Use CC REQ77 to input TC 971/AC037

    The refund is for a prior year return with an original name line that has changed Issue a manual refund in the taxpayer’s current name

    Note:

    If the refund is for a decedent overpaid return without a CCC "L" code on the module, a manual refund is not necessary.

Computing Credit Interest on Manual Refunds
  1. Credit interest is mandatory on an overpayment or refund, if certain conditions specified in the Internal Revenue Code (IRC 6611) are met. Refer to IRM 20.2, Interest.

  2. An overpayment is defined as beginning with the first amount paid in excess of the tax liability. Tax liability includes tax, additions to tax, penalties and interest. Generally, credit interest is paid on the available net overpayment.

  3. No interest is allowed if the refund is issued within 45 days after the later of the Return Due Date, Return Received Date, or Correspondence Received Date.

  4. If the return is not in processible form, suspend the 45-day interest-free period. The return is not considered in processible form until all the required information, correspondence, or supporting documentation is received. On these cases, the start date for the 45-day interest-free period is the Correspondence Received Date (CRD).

  5. Use the later of the following dates to determine whether the 45–day interest-free period has lapsed:

    • Return Due Date (RDD)

    • Return Received Date

    • Return Processible Date/Correspondence Received Date

  6. If the refund check date is more than 45 days after the later of the dates in Item (5) above, determine the credit interest period.

    If the taxpayer and... Then allow interest from the later of...
    Filed the Return by the original due date Does not have an extension The original due date, the payment date, or the Correspondence Received Date (CRD) (if after the due date)
    Filed the return after the original due date Does not have an extension The return received date, the payment received date, or the CRD (if present)
    Filed the return by the extended due date. Has an extension The return received date, the payment date, or the CRD (if after the extension date)
    Determining Payment Dates If the payment is a... Determining Payment Dates Then the payment date is...
    Prepaid or timely credit, e.g., estimated tax payment, withholding, or a payment before the due date The original return due date.
    Subsequent payment (made after the due date) The payment received date.

    Reminder:

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

    Determining the "To" Date If the overpayment is... Determining the "To" Date Then...
    Initiated by the taxpayer The interest "To" date is one business day past the date of the CC RFUNDR date (two days for night shift)
    Initiated by the IRS. (Examples include: EIC eligibility, math error decrease in tax, and math error increase in refundable credits) The portion of the overpayment initiated by the Service is subject to the provisions of IRC 6611(e)(3). (See IRM 20.2.4.7.5.5, 45-Day Rule) Go to one business day past the date of the CC RFUNDR date (two days for night shift), and subtract 45 days to derive the interest "To" date.

    Note:

    The Refund Date cannot be a Saturday, Sunday, or legal holiday

  7. Use CC COMPA with Definer "D" to compute credit interest for the period determined in (6) above. The tables below show an example of the CC COMPAD computation.

    Note:

    CC COMPAD displays details of the computation, such as the number of days at each interest rate, that an ordinary COMPA display does not show. This detailed information is used to verify the accuracy of the interest calculation.

    Example:

    The return was filed by the due date. The return did not show an overpayment. There was an estimated tax discrepancy of $386.

    Transaction Code Date Dollar Amount
    TC 150 06302014 $12,562
    TC 716 04152013 -$2,414
    TC 660 01272014 -$386
    TC 610 04152014 -$10,148
  8. The table below describes the CC COMPAD format for Credit Interest. (CC RFUNDR date is 07282014)

    From Date To Date Dollar Amount Result
    04152014 06142014 386.00 (no $ sign)

    Note:

    Subtract 45 days from 07292014 to arrive at the to date of 06142014

    $1.94

    Note:

    Credit Interest is not allowed on the 2008 Recovery Rebate Credit. This amount must be subtracted from the overpayment amount before credit interest is computed.

Preparing Manual Refunds — Form 5792 and CC RFUNDR
  1. Complete Form 5792, Request for IDRS Generated Refund (IGR). Refer to the IRS intranet for a visual example of Form 5792.

    1. Write the taxpayer’s SSN, tax period, and transaction code where the supporting document will be filed, in the remarks area of Form 5792.

    2. If a manual refund will be issued to an address other than the Master File address, explain in the remarks area and indicate where the supporting documentation will be filed. Also input a TC 971/AC037 on the module using CC REQ77.

      Example:

      REMARKS: Temporary Address Change per Taxpayer Request.

    3. Monitor the case until the TC 840 posts. Input CC NOREFP, if necessary, to prevent a duplicate TC 846 from generating.

      Note:

      For additional directions on monitoring manual refunds see IRM 21.4.4.5.1, Monitoring Manual Refunds.

    Figure 3.14.1-2

    Item Field Name Form 5792 Field Descriptions, Section I
    1 TIN and File Source Enter the taxpayer's SSN
    2 MFT Code Enter MFT code from the refunding module
    3 Tax Period Enter Tax Period of the refunding module in YYYYMM format
    4 Plan number Leave Blank
    5 Name Control Enter Name Control from refunding module
    6 TC 840 Amount Enter the total overpayment plus any credit interest
    7 TC 770 Amount Enter the credit interest portion of the refund
    8 Overpayment Amount Enter the overpayment on the tax module, without interest
    9 Line No. Enter "01" for prior year, or "02" for current year. See IRM 2.4.20, CC RFUND Input
    10 Int'st (Interest) Indicator Enter "N" for normal, "R" for restricted, or "0" if no interest
    11 ULC Code Enter the Primary Location Code from TXMOD
    12 Sequence Number Enter the IDRS sequence number
    13 Block Series No. Blank unless refund is for an Injured Spouse claim
    14 1st Name Line Enter the name of the payee. Include Executor/Executrix, Admin(istrator), etc., if Form 1310 is attached
    15 2nd Name Line Optional unless refund is for a decedent return with or without surviving spouse
    18 Street Address or PO Box Enter address where the check is to be mailed
    19 City, State, and ZIP Code Enter City, State, and ZIP code where the check is to be mailed
    20 Remarks Enter all appropriate remarks
    21 Initiating BOD Check box - W&I-SP
    22 DLN of Return Enter DLN of the return
    23 Bankruptcy code case None applicable
    24 TC 130 (check-box) Check if a TC 130 is present
    Section II Manual Refund Authority checklist Contains 13 check-boxes to address if appropriate
    Section III Interest Computation Contains Interest to Date and Total Interest Fields. Attach COMPAD print if interest is included in refund
    Section IV Manual Refund Approval Complete Items 1, 2, and 3 prior to submitting for approval
  2. Attach a copy of the IDRS screens for the following Command Codes: COMPAD, IMFOLI, ENMOD, TXMODA, RFUNDR, REQ54 and credit transfers (if input) to the Form 5792, as required by the Accounting Function. Also attach a copy of Form 1310 or court appointment documentation and any supporting documents to the case itself. Print and attach IMFOLI screen(s) for both the primary and secondary taxpayer, when applicable.

  3. Submit the case for review and approval.

  4. Secure Manager's signature on all three copies of Form 5792.

  5. Using the IAT tool, input CC RFUNDR on IDRS:

    1. Use the information from Form 5792.

    2. The CC RFUNDR entity section must match the entity exactly on Form 5792 (which may be different than the information on CC ENMOD). This includes hyphens, spaces, suffixes, all abbreviations, etc.

    3. If the manual refund is being sent to someone other than the taxpayer, such as an executor or executrix, include that representative's title on both Form 5792 and CC RFUNDR.

    4. CC RFUNDR will close the case unless the status is changed from C.

  6. Deliver the Form 5792 and its required attachments to the Accounting Function after input of the CC RFUNDR.

Erroneous Refunds

  1. An erroneous refund (ERRF) is defined as "any receipt of money from IRS to which the recipient is not entitled" .

  2. In the Notice Review Function, erroneous refunds can result from:

    • Errors found on cases where the taxpayer has received a refund as a Split Refund;

    • Errors found on cases reviewed after the deadline for preventing a refund from generating for the cycle; or

    • Errors on notices not subject to the systemic refund hold (55555 in the blocking series) such as CP 16 and CP 51B

  3. If a duplicate refund is present, i.e. TC 840 and TC 846, treat the TC 840 as the erroneous refund.

  4. When an erroneous refund is identified, determine the correct erroneous refund Category. There are three categories of erroneous refunds:

    Erroneous Refund Category Description
    "A" Tax increased or tax/refundable credits decreased
    and
    IRS has erroneously decreased tax below taxpayer's figures or increased credits to more than the taxpayer's figures during processing

    Note:

    Withholding and estimated tax payments are not included in this category

    "B" Federal Income Tax Withheld was overstated by the taxpayer on a return or claim for refund, and as a result, a refund, offset, or credit elect generated, and the withholding should be reversed

    Note:

    This does not apply to Excess Social Security Tax Withheld (Excess Federal Insurance Contributions Act (FICA))

    Reminder:

    This Category is only for cases in which the taxpayer is at fault

    "D"
    • Misapplied payments

    • Entity errors that caused refund to be paid to wrong taxpayer

    • Duplicate refunds issued (i.e. TC 840 and TC 846 for same overpayment)

    • Refunds issued after refund statute expiration date (RSED)

    • Any other issues that do not fall into the Cat-A or Cat-B descriptions

  5. For detailed procedures on classifying and processing Erroneous Refunds, see IRM 21.4.5, Erroneous Refunds.

  6. Erroneous Refund procedures are not necessary in the following situations:

    1. Erroneous refund in Category A that is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Missing signature(s)

      Note:

      It is still necessary to attempt to obtain the missing signature(s).

    3. A Credit Elect request to the next year was not processed, and instead the credit refunded.

    4. No CCC "L" or "W" code was present on a decedent return.

    5. No Form 1310 or court appointment documentation is present.

    6. An error found in Notice Review (including errors made during initial processing) results in a tax increase with no prior tax decrease.

    7. An error found in Notice Review (including errors made during initial processing) results in a refundable credit (except withholding) decrease with no prior refundable credit increase.

    8. Scenario (f) and (g) are identified as "turnaround" cases and should be adjusted by using Blocking Series " “77” or “78" as appropriate, Source Code "6" , and Hold Code "0" . Insert Label 1 on the notice in the current cycle.

      Note:

      If a taxpayer requests abatement of the adjustment, route to Exam for a deficiency assessment on Form 3465, Adjustment Request. Attach all documentation available and a print of RTVUE and TXMOD.

  7. Route returns requiring reprocessing with an erroneous refund to Accounts Management.

    1. Order the return, if the return is not included with the case.

    2. Complete Form 3465, Adjustment Request, and explain the erroneous refund and the reason for the adjustment.

    3. Void the notice.

    4. Recharge the return using CC ESTABDT and route the case to Accounts Management.

      Note:

      Also refer cases involving two taxpayers using the same SSN or one taxpayer using two SSNs to Accounts Management. If a refund scheme or fraud is suspected, route the case to the Criminal Investigation Function.

Category A ERRF Resolution
  1. Complete Form 3465.

  2. Recharge paper returns to Exam using CC ESTABDT.

  3. Insert Label 15 or 16.

    Note:

    Do not input TC 844 or adjust the account. Do not take any actions or refer a Category A erroneous refund case to Examination when the erroneous refund amount is under ≡ ≡ ≡ ≡

Category B ERRF Resolution
  1. Per the Office of Chief Counsel, input an assessment to reverse federal withholding overstated on a return or a claim for refund by the taxpayer.

    Reminder:

    These instructions do not apply to overstatements of Excess Social Security Tax Withheld (Excess FICA), which should be resolved using Category D procedures.

  2. Standard TC 807 withholding reversals from CC REQ54 do not post to the Summary Record of Assessment. To correct accounts that have either refunded, offset, or credit elected as a result of overstated withholding, an IRC 6201(a)(3) assessment must be input to "reverse" the withholding.

    Note:

    Even if the overpayment was offset or credit elected (rather than actually refunding), the taxpayer still claimed a refund due to the withholding overstatement, and therefore, an IRC 6201(a)(3) assessment is needed to recover it.

  3. An IRC 6201(a)(3) assessment protects the IRS' ability to collect, satisfies the requirement of denying a refund claim, and places burden of proof upon the taxpayer, should a case develop in tax court.

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

  5. Use CC REQ54 to input an IRC 6201(a)(3) assessment to recover the overstated portion of federal income tax withheld:

    • Input TC 290 for the amount of overstated withholding being recovered.

    • Use Category Code ERRF.

    • In the Activity field of CC ADJ54, input: "W/H–6201A3"

    • Blocking Series 00, if return is available and Blocking Series 05, if no return or if MeF return

    • Source Code 2

    • Reason Code 051 (and any others that apply)

    • Hold Code 0 (See Caution below).

    • Do not use Item Reference Code 807

    • In the Remarks field of CC ADJ54, input: "IRC 6201a3 assessment to reverse overstated withholding" .

    • Do not input a TC 844 or send a Letter 510C.

    • Source Document (Y) (if MeF return or return not available, attach a print of TRDBV or MeF, the return information only). See Caution below.

    • Insert erroneous refund Label 15 or 16 on the notice, as appropriate.

      Caution:

      Counsel has advised if a refund claim is pending (the taxpayer has included the overstated amount as a refund), an assessment using a TC 290 must be used to recover the overstated credit. This is true even if the IRS was able to prevent refund from generating, i.e. the error is identified and the refund is prevented from being issued. In this situation, follow the above procedures; however, use Hold Code "3" and retype the notice to include the appropriate withholding TPNC. Use Category Code OURV or RFDL when adjusting or stopping the refund.

Category D ERRF Resolution
  1. Complete Form 12356 or applicable local form.

  2. Input all applicable credit transfers, adjustments and Entity changes prior to routing the case.

  3. Use TC 570 on the debit side of the credit transfers.

    Note:

    If removing a timely credit will create FTF or ES Tax penalty assessments, input a TC 290 for .00 with Hold Code "3" .

  4. Send Letter 510C to the taxpayer.

  5. Input a TC 470 with a closing code (CC) 93 using REQ77, with a Posting Delay code "1" to prevent issuance of Balance Due notice.

  6. Input TC 844, using CC REQ77 with demand date.

  7. Route the case to the appropriate Erroneous Refund Coordinator .

  8. Insert Label 15 or 16 on the Notice as appropriate.

    Exception:

    When the erroneous refund is issued on an Adjustment notice, void the notice.

Excess Collections (XSF) and Unidentified Remittance (URF) Files

  1. When there is not enough information to properly apply credits to a taxpayer’s account (e.g., when a taxpayer does not claim a payment and the correct taxpayer cannot be located), funds may be transferred to the Unidentified Remittance File (URF) or the Excess Collections File (XSF).

    Note:

    TC 820 may indicate that a payment has been moved from the taxpayer’s account to URF or XSF. If the cross-reference TIN and tax period (next to the transfer DLN) are all zeros or nines, the credit was transferred to either the URF or the XSF. If a taxpayer files a return claiming credits that were applied to the URF or XSF, it may be necessary to transfer the credit from the URF or the XSF to the Master File. Use Form 8765, IDRS Control File Credit Application. Figure 3.14.1-3a

    Caution:

    If the DLN of the payment is for another Submission Processing Campus, send the request to that campus.

    1. Credits less than 12 months old are applied to the Unidentified Remittance File. Credits over 12 months old are applied to Excess Collections. An application to move credits to Unidentified Remittances can be made in the 11th month.

      Exception:

      Credits with Document Codes 48, 58, or 65 may be added to the XSF regardless of age.

    2. Earned Income Credit (TC 764 or TC 768) and Generated Refundable Credit (TC 766) will be accepted by Excess Collections.

  2. For assistance in matters related to XSF and URF, an Excess Collections/Unidentified Remittance Files contacts list is provided in the Who/Where tab of SERP.

Excess Collections File (XSF) — 6800 Account
  1. The XSF consists of two accounts:

    • 6800 Account — Credits over one year old that cannot be applied to a taxpayer's account are transferred to the 6800 Account.

    • 9999 Account — Credits in the 6800 Account are automatically transferred to the 9999 Account after one year.

  2. Before requesting a payment from the XSF determine whether the statute of limitations for refunds has expired. The general rule is that a claim for refund must be filed within three years from the date the original return was filed, even if the return was delinquent, or two years from the date the tax was paid, whichever is later.

    If the claim was filed... Then the amount paid within...
    within the three-year period, the prior three years, plus any return filing extension period, may be refunded
    within the two-year period, the prior two years may be refunded

    Note:

    Prepaid credits are treated as being paid on the Return Due Date (RDD). These include: withholding (TC 806), Estimated Tax payments (TC 660, TC 716, and TC 710), Earned Income Credit (TC 764 and TC 768), and Generated Refundable Credit Allowances (TC 766).

    1. Check the Monthly Statute Alert Bulletin.

    2. The remarks section of the CC XSINQ record should indicate "STATUTE" or "FROZ" if the credit is barred from refunding.

    3. If the refund statute has expired, the application to move credits from XSF must not exceed the tax liability, interest, and penalties. There can be no refund or credit elect.

Requesting Payments From the XSF
  1. Use CC XSINQ to verify that the credit is available.

    Note:

    Do not request transfer of the credit if the remarks section of the CC XSINQ record indicates "CLOS" . These credits are not available for transfer.

  2. Prepare Form 8765, IDRS Control File Credit Application, per instructions. Figure 3.14.1-3a

  3. Attach a current print (less than seven days old) of CC TXMOD or CC IMFOL and CC XSINQ to Part 1 of Form 8765.

  4. Enter CC STAUPS for eight cycles on balance due accounts to prevent erroneous or unnecessary notices.

  5. Determine which campus transferred the original credit to the XSF.

  6. If the original transfer to XSF was local, route Part 1 of Form 8765, with research, to the local Statutes function. After Statutes completes their clearing process, they will forward the case to the Excess Collections Function, per the Statute of Limitations, refer to IRM 25.6.1.7.3.3, Transferring Credits from the XSF.

  7. If the original transfer was done in another campus, route the case to the other campus' Accounting function, per the Statute of Limitations, refer to IRM 25.6.1.7.3.3, Transferring Credits from the XSF.

  8. Attach Part 2 of Form 8765 to the case.

  9. Include a complete explanation for the request.

    Note:

    An IRM reference alone is not a sufficient explanation.

  10. Give the completed form and all necessary attachments to your lead to hand-carry to the Statute Classifier, who will stamp "STATUTE CLEARED" on the form before routing it to the Excess Collections Unit.

    Figure 3.14.1-3a

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    Figure 3.14.1-3b

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Transferring Payments To the XSF
  1. Correspond for the missing payment information using Letter 1687C.

  2. If the taxpayer does not reply, or replies with insufficient information,use Form 8758, Excess Collection Files Addition, to apply a credit to the XSF. Form 8758 is a two-part form. Attach the research to part one (the original). Figure 3.14.1-4a

  3. Use the received date of the credit. Do not use the available date of the credit or the return due date.

  4. Use the original DLN of the credit, not a transfer DLN.

  5. Issue a manual refund when money is transferred out of an account using a Form 8758 paper document and there is still an overpayment to be refunded. Refer to IRM 3.14.1.6.6, Manual Refunds.

  6. Move each payment individually. Do not transfer a lump sum.

  7. The date on Form 8758 and the date of the CC IMFOLT or CC TXMOD print must be no more than seven days prior to receipt of the case in the Excess Collections Function.

  8. Both copies of Form 8758 must be complete and identical. Route both to the Excess Collections Function.

  9. Attach the following to the original copy: a current CC IMFOLT or CC TXMOD print, a copy of any taxpayer correspondence, tax returns, vouchers, or other research relevant to the transfer to the XSF, and a research history sheet showing the research performed on the case.

    Note:

    Send only copies of original (DLN) documents. Do not send original ("live" ) documents.

  10. Use activity code "CLTO6800" to close the IDRS control base.

  11. A TC 971/AC 296 must be input using CC REQ77 to indicate taxpayer contact has been attempted. Input "971" in Field TC>, input "296" in Field TC 971/151-CD>, and input "Credit to Excess Collections" for remarks. Refer to IRM 3.17.220.2.1.1

    Figure 3.14.1-4a

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    Figure 3.14.1-4b

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Unidentified Remittance File (URF) — the 4620 Account
  1. Follow procedures in the subsections that follow when transferring credits to, or from, the 4620 URF account.

Requesting Payments From the URF
  1. Use CC URINQ to verify that the credit is available.

  2. Follow the instructions on Form 8765, IDRS Control File Credit Application. Figure 3.14.1-3a

  3. Attach Form 8765 to a print of CC URINQ.

  4. Include research as required.

  5. Enter CC STAUPS for eight cycles on balance due accounts to prevent erroneous or unnecessary notices.

  6. Route Form 8765, with research, to the Unidentified Remittance Function.

Transferring Payments To the URF
  1. Correspond for the missing payment information using Letter 1687C.

  2. Issue a manual refund for the substantiated payment(s) when there is still an overpayment amount to be refunded. Refer to IRM 3.14.1.6.6, Manual Refunds.

  3. If the taxpayer does not reply, or replies with insufficient information, use Form 2424, Account Adjustment Voucher to apply a payment to the URF. Form 2424 is a two-part form: the pink copy is the original, and the blue copy is the duplicate. Attach the research to the pink copy. See Figure 3.14.1-5.

  4. Use the received date of the credit. Do not use the available date of the credit or the Return Due Date.

  5. the original DLN of the credit, not a transfer DLN.

  6. Include the payment DLN, the tracer ID, and the reason for the transfer to the URF in the “Remarks” section.

    Note:

    An IRM reference alone is not a sufficient explanation.

  7. The date on Form 2424 and the date of the CC IMFOLT or TXMOD print must be no more than seven days prior to receipt of the case in the Unidentified Remittance Function.

  8. Both the pink and blue copies of the Form 2424 must be completed and sent to the Unidentified Remittance Unit . The carbon (blue) copy must be legible and match the original (pink) copy.

  9. Attach the following to the original (pink) copy: a current CC IMFOLT or TXMOD print, a copy of any taxpayer correspondence, tax returns, vouchers, or other research relevant to the transfer to the URF, a research history sheet (except on Statute credits) showing the research performed on the case and the results, and a copy of the check.

    Note:

    Send only copies of original (DLN) documents. Do not send original ("live" ) documents.

    Figure 3.14.1-5

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Special Notice Review Issues

  1. This subsection contains instructions related to miscellaneous issues. These issues include:

    • Taxpayer Correspondence

    • Taxpayers Meeting Taxpayer Advocate Service (TAS) Criteria

    • $100,000,000 (One Hundred Million) Refunds

    • Frivolous Claims

    • IVO (Integrity and Verification Operation) - RICS

    • Initial Allegation or Suspicion of Tax-Related Identity Theft Indicators

    • Slipped Blocks and Mixed Data Blocks

    • Community Property Split

    • Injured Spouse Claim

    • Natural Disaster Procedures

    • Combat Zone or -C Freeze Returns

    • Large Dollar Review

    • Undeliverable Notices

    • Premium Tax Credit (PTC)

    • 8962 PTC Calculator Tool

    • ACA Shared Responsibility Payment

    Million Dollar Notice Review Processing System (NRPS) Transcript (CP 380)

    1. Generates if the module balance plus computed interest is a credit of 1 million dollars or more.

    2. The key 020 selects the Million Dollar NRPS Transcript.

    3. Review of these transcripts are the responsibility of the Team leads in NR.

    4. The NR Team lead will contact the employee identified as having control over the account.

    5. This contact should be done as an E-mail notification that this account has an X– freeze posted that is 15 cycles old.

    6. Once the contact has been made, then the Team lead will leave a case history using IDRS that the employee identified as having control over the account was notified.

      Note:

      A refund for 100 million dollars or more will not generate a TC 846. A manual refund is required if the refund must be allowed. A $100 million refund transcript will generate. See IRM 3.14.1.6.14.2, Million $100 Refund Transcripts. Systemic refunds can now be generated on IDRS (TC 846) for refunds under $100 million, unless a manual refund is required.

    If... Then...
    No established control over the account can be found The Team lead will review the account
    No other issues are found during the review The Team lead will prepare a manual refund for the credit balance, including any interest if applicable, and release the X– freeze
Taxpayer Correspondence
  1. If taxpayer correspondence attached to the return is discovered attached to the return, review, analyze, and determine disposition as necessary. Follow Action 61 requirements (noted below) to initiate a response.

    If the taxpayer... And there is... Then...
    Requests installment payments or indicates an inability to pay No indication that Code and Edit has forwarded the letter to the Collection Function
    1. Verify that the taxpayer’s SSN and address are on the letter

    2. Send the letter to the Collection Function

    3. Input CC STAUPS for eight cycles on balance due notices

    4. Input CC REQ77 with TC 971/AC043

      Note:

      For Electronic Filed Returns

      MeF sends all Form 9465 data to Compliance in a separate file. The Form 9465s attached to electronic returns are routed to MeF. Do not print and send to Collections.

    Inquires about an account An open control base Route the original letter to the tax examiner who has the case controlled on IDRS
    Inquires about an account No open control base Route the original letter to Accounts Management.

    Reminder:

    Input CC STAUPS for eight cycles on a balance due module

    Requests abatement of a penalty due to Reasonable Cause The request was denied (identifiable by CCC "7" ) Route the request to Accounts Management for correspondence with the taxpayer.

    Note:

    Code and Edit tax examiners assign CCC "7" and send the Appeals letters

    Requests abatement of a penalty due to Reasonable Cause NRPS data does not show CCC "7" or CCC "M" Route the request to Accounts Management for correspondence with the taxpayer. See IRM 20.1, Penalty Handbook

    Note:

    Before routing see IRM 3.14.1.6.21.1(4)

    Requests assistance in computing tax or credits, indicates that information is missing, or anything else beyond the scope of Notice Review NRPS data does not show CCC 7 or CCC M
    1. Void the notice

    2. Recharge the return and route the case to Accounts Management for correspondence with the taxpayer

    Reminder:

    Comply with Action 61 guidelines when referring cases older than 25 days to another Function

    IRM 3.14.1
    Requests acknowledgment of payments and/or documents attached to the return NRPS data does not show CCC 7 or CCC M Route the request to the Receipt and Control Function
    Attached original or certified documents (such as, birth certificates, SSN card, marriage license etc.) NRPS data does not show CCC 7 or CCC M Return them to the taxpayer upon completion of the case, unless the taxpayer indicates that returning them is unnecessary. If the document is needed as a source document, attach a copy to the return. Do not detach death certificates on decedent returns
    Attached documents labeled as copy or the taxpayer has indicated returning them is unnecessary NRPS data does not show CCC 7 or CCC M Staple documents to the back of the return or attach completed Form 9856 and return to files
    Has replied to IRS initiated Processing correspondence (12C letter, Form 3531, Form 6001, etc.) No evidence of a Return Processable Date (RPD) on the account
    1. Prevent the refund from generating if it reflects interest

    2. Input RPD with TC 290 with appropriate Hold Code

    3. Issue Manual Refund if necessary to avoid paying interest

    Has not replied to IRS Processing correspondence (no reply stamp on Form 6001, Form 3531, etc.) No I– freeze on account (freeze is set by Computer Condition Code U)
    1. Prevent the refund from generating if it reflects erroneous interest

    2. Verify correct no-reply procedures were followed by ERS/Rejects

    3. Issue manual refund for overpayment without interest

    Was not required to reply (Correspondence was issued in error) An I – freeze on the account Issue manual refund for appropriate amount of credit interest (TC 770) using 23C date of TC 846 as Interest-to date for computation if necessary
    Attaches Form W-7, or Form W-7A An I – freeze on the account
    1. Make a copy of the return, front and back pages only, and indicate across the copied return that it is a “COPY ONLY”. Line thru the DLN of the copied return. DO NOT SEND ORIGINAL RETURNS

    2. Detach the Form W-7 from the original return, make a copy of it and staple the copy to the back of the original return. Notate on the Form W-7 copy that the original was sent to Stop 6091, ITIN and the date it was sent. Staple the original Form W-7 to the front of the copied return that you are sending

    3. Route the original Form W-7 and the copied return . DO NOT ALLOW THE EXEMPTION, ETC., BECAUSE THE Form W-7 HAS NOT BEEN PROCESSED

  2. Action 61 Requirements — A Quality Response is an accurate and professional communication which:

    • Is based on information provided,

    • Requests additional information from the taxpayer, or

    • Notifies the taxpayer that we have requested information from outside the IRS.

  3. A Quality Response is timely when initiated within 30 days (calendar days) of the IRS Received Date.

  4. When a Quality Response cannot be issued timely:

    • An interim response will be initiated by the 30th calendar day from the IRS Received Date.

    • Use either the Letter 2645C, if holding the return for research, or Letter 86C, if routing the return to another service center.

      Note:

      All interim letters should inform the taxpayer when a final response can be expected. Include employee name, employee number and telephone number.

  5. Exceptions to Action 61 Requirements:

    • Substitute returns

    • Amended returns

    • Tentative Carrybacks

    • CAF/POA

    • Address Changes

    • Responses to IRS solicitation for information necessary to secure or complete processing of the tax return.

Taxpayers Meeting Taxpayer Advocate Service (TAS) Criteria
  1. The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Per the Taxpayer Bill of Rights, taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels. TAS criteria include economic burden, systemic burden, best interest of the taxpayer, and public policy (as determined solely by the National Taxpayer Advocate (NTA)). TAS is responsible for assisting taxpayers who have unresolved problems with the IRS. See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria if additional information is required.

  2. While the Internal Revenue Service (IRS) is continually working to serve customers in a quality manner, some taxpayers still have difficulty getting solutions to their problems or getting timely and appropriate responses to their inquiries. Per IRC 7803(c), Congress established the office of the National Taxpayer Advocate (NTA) and its functions within the IRS to assist these taxpayers. TAS has identified criteria that qualify taxpayers for TAS assistance. The Case Advocate will conduct an independent review of actions that have been taken or need to be taken to resolve the problems taxpayers are experiencing.

  3. Employees should not view TAS case criteria as a means of excluding taxpayers from TAS, but rather, as a guide to TAS case acceptance. The criteria under which TAS accepts a case should not govern whether a taxpayer is entitled to relief.

  4. If the IRS employee can resolve a taxpayer’s inquiry or provide the relief requested, as outlined in IRM 13.1.7.4, Same Day Resolution by Operations, a referral to a TAS office is not necessary even if TAS case criteria are met. The definition of "same day resolution" is "within 24 hours." However, cases where the employee cannot completely resolve the issue within 24 hours, but has taken steps within 24 hours to resolve the taxpayer’s issue, also meet the definition of “same day.” Do not refer these cases to TAS unless the taxpayer asks to be transferred to TAS.

    Note:

    It is important that all IRS employees handle potential TAS cases with the taxpayer's best interest in mind. Refer also to IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, for more information. Provide the taxpayer with the number for the NTA toll-free case intake line, 1-877-777-4778 or TTY/TDD 1-800-829-4059. The taxpayer should be advised that TAS is available if the taxpayer is not satisfied with the service he or she received.

  5. An IRS employee should make a referral to a TAS office if the employee receives a taxpayer contact, and cannot initiate action to resolve the inquiry or provide the relief requested. A taxpayer does not have to specifically request TAS assistance to be referred to TAS. IRS employees will advise taxpayers of the option to seek TAS assistance when appropriate. TAS will request documentation from the taxpayer if it is needed to support the requested relief, or required by their IRM.

  6. The following types of cases should NOT be referred to TAS:

    1. Cases where the taxpayer’s complaint or inquiry only questions the constitutionality of the tax system, or

    2. Cases where the focus of the taxpayer's inquiry is solely to employ frivolous tax strategies to avoid or delay filing or paying federal taxes.

$100,000,000 (One Hundred Million) Refunds
  1. An account with an overpayment of $100,000,000 or more requires that a manual refund be issued since a TC 846 will not generate. These cases are assigned to the lead the same day they are received in the Notice Review Function. See IRM 3.14.1.6.14.2, $100 Million or more Refund Transcripts.

    Note:

    Refer to Document 6209, IRS Processing Codes and Information for release of the X– freeze.

  2. Use current procedures for resolving the case:

    1. Verify all unclaimed credits.

    2. Offset the overpayment as needed to cover any debit balances.

    3. Abate any interest caused by an overpayment not due the taxpayer.

    4. Monitor the case until all actions post to the Master File.

  3. The account must be fully paid or in debit status before closing the control. If another area has an open control on the case, contact that area, close the control, and route all available documents to that area.

    Exception:

    The control base may be closed if there is an L freeze on the module and a Revenue Agent has advised that the credit not be refunded due to legal implications.

  4. If, after any adjustments, the account has a credit balance less than $100,000,000:

    1. Offset credit to any debit balance modules.

    2. Prepare a manual refund for the excess credit.

    3. Monitor the case until the TC 840 posts.

  5. If, after any adjustments, the account has a credit balance of $100,000,000 or more, the Accounting Function must issue the manual refund:

    1. Prepare Form 3753, Manual Refund Posting Voucher.

    2. Send the original return, transcript, Form 3753, all prints essential to manual refunds, and any other documents pertaining to the case to the Accounting Function.

    3. Monitor the case until the refund (TC 840) posts.

  6. Close the control base after all account transactions post.

  7. Keep photocopies of the return and the transcript on file for future reference.

Frivolous Claims
  1. If it can be determined that a return is a frivolous claim, refer the notice and return to the Examination Function immediately.

  2. Currently, one of the most common frivolous claims is the Reparations Tax (also known as the Black Investment Tax). The claim is based on the premise that African-Americans should receive repayment for historical slavery. There is no existing law that allows payment of reparations. Any claim(s) for reparations should be disallowed.

  3. Another example of a frivolous claim is when taxpayers attempt to eliminate their tax liability by removing their income by citing "Less Native American Indian Treaty" or simply "Native American Indian Treaty" . Usually, these filings include Form 1099–MISC income and tax withheld (generally higher than 18 percent of earnings) that results in a refund. Follow procedures in IRM 21.5.3.4.16.7, Identifying Frivolous Returns/Correspondence and Responding to Frivolous Arguments, for routing these claims to the Ogden Campus Frivolous Return Program.

  4. For additional information and examples, see the figure in IRM 3.11.3–11, Frivolous Filer/Non-Filer Definitions, and IRM 4.19.15, Discretionary Programs.

IVO (Integrity and Verification Operation) -- RICS
  1. If Notice Review is reviewing an Integrity & Verification Operations (IVO) [formerly Accounts Management Taxpayer Assurance Program (AMTAP)] case and any one of the following is on the tax module. Print CP 12,16, 21B, and 24 notices:

    • Notice Review identifies a return with a P– freeze

    • Has an open 148XX control base

    • A 4464C letter has been issued to the taxpayer

    • A TC 971/AC134 on the account

      Note:

      If the account contains a math error that needs to be corrected, adjust the account using HC "4" to prevent a notice from generating and to prevent the refund from issuing.

  2. If a Notice Review Tax Examiner identifies a case, submit the case to the "lead or manager via e-mail." for further review before taking any action. If the case is not returned to the Tax Examiner timely (by Thursday 10:00 A.M.), prevent any refund from generating. If an adjustment is needed, use Hold Code "4" . Follow normal procedures for Notice Disposition.

  3. Criminal Investigation (CI) investigates potential violations of the Internal Re