The following resources are utilized to review and correct notices, transcripts and accounts for accuracy:

Information common to all returns must be verified and compared to the CP notice and the information contained in IDRS and the NRPS package. Research is required to ensure that the tax return was processed correctly and accurately reflected in IDRS. The notice, IDRS or both are updated as appropriate.

Some of the most common IDRS research command codes used by Notice Review can be found in IRM 3.14.2.7.2, Common Command Codes Used in Notice Review.

When a return is needed to review a notice and/or transcript, request the document(s) needed using Form 2275 and place the Form in the designated basket within the team. The clerical staff is to monitor this basket daily and manually fax the Form 2275 requests to Files with a cover sheet identifying them as Notice Review NRPS Document Requests.

All necessary documents (adjustment documents and tax returns) are associated with each batch before releasing to TEs. All NRPS batch sheets that do not need documents are routed directly to Notice Review.

Error Resolution System (ERS) may request that Notice Review select and correct a specific notice:

The Clerical Support Unit will distribute the work in the order indicated below: Refer to IRM 3.14.2.1.8 for additional information.

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 that they should contact their own area to have the refund stopped. If the requestor indicates that they do not have access to IDRS or do not have CC NOREF in their profile, they should contact their area to address this issue.

Other functions may request that an incorrect notice be corrected or stopped. However, it has to be a selectable notice, and the request has to be received in Notice Review within established deadline cut off times.

The CAF copy of the notices should generate with the representative’s name and address on the notice. If the CAF copy is missing this information, it is considered a CAF mismatch condition and will be notated on the Notice List.

NRPS will compile all CAF mismatch notices and include them on the Manual Intervention Listing. A literal will print out on the list indicating the CAF mismatch by notice sequence number and CP number.

Research a CAF mismatch on CC CFINK with Taxpayer's TIN, and the specific MFT and tax period of the notice module.

Check the Rep-Action line for any of the following words; Undeliverable, Suspended, Deceased, Disbarred, Retired or Good Standing. If present, follow the instructions in the Rep-Action Decision table below:

If RECORD NOT FOUND for the taxpayer on the CAF file, the representative is NOT authorized. Void the duplicate notice.

For more information regarding notice disposition when a valid authorized representative IS located, see, IRM 3.14.2.7.1.2

The RAF contains information about the authorizations that taxpayers give to their reporting agents for employment tax modules. The authorization allows reporting agents to file Forms 940, 940-PR, 941, 941-PR, 941-SS, 941-NMI, 943, 943-PR, 944, 945, 1042 or CT-1 for the taxpayer. The authorization also allows for reporting agents to make payments or deposits for Forms 940, 941, 943, 944, 945, 720, 1041, 1042, 1120 and/or CT-1.

Reporting Agents File (RAF) notices are similar to CAF notices, in that a copy of the notice will generate to the taxpayer, and a copy will generate to the Reporting Agent. The RAF copy of the notice should generate with the representative’s name and address on the notice. If the RAF copy is missing any or all of this information, it is considered a RAF mismatch condition and will be identified on the Manual Intervention Listing with the literal RAF MIS.

Use CC RFINK to obtain authorization information regarding the reporting agent.

Overlay CC RFINK with CC RFINK with the definer “L” with the taxpayer’s EIN and the reporting agent’s EIN to receive detailed information regarding the reporting agents authorization in regard to the taxpayer.

For more information regarding notice disposition when a valid authorized representative is NOT located, see, IRM 3.14.2.7.1.2.

For more information regarding notice disposition when a valid authorized representative IS located, see, IRM 3.14.2.7.1.2.

CC NOREFD will cancel a NOREF intercept request if input before the Thursday cutoff. See CC NOREFD Example for NOREFD input.

CC NOREF creates an activity code in the format, ppxxxxxxyy. See CC NOREF Activity Code chart below:

This section provides information on processing erroneous refunds. The IRS sometimes issues a refund to a taxpayer who is not entitled to the money. When this occurs, the refund is known as an Erroneous Refund. See IRM 21.4.5, Erroneous Refunds, for more detailed instructions on classifying and processing Erroneous Refunds and for procedures not listed below.

An Erroneous Refund is defined as any receipt of money from the Service to which the recipient is not entitled. This definition includes all erroneous payments to taxpayers, even if the non-entitlement could not have been known at the time of the refund. The taxpayer may or may not have made an intentional misstatement of income or credits to the IRS.

When an erroneous refund is identified, determine the appropriate erroneous refund category. See IRM 3.14.2.6.2.1 for more information:

The following situations may cause or create an erroneous refund. This list is not all encompassing and other causes and effects do exist.

Erroneous refund procedures are not necessary in the following situations:

Route returns that need to be reprocessed that also have an erroneous refund to Accounts Management and follow the procedures listed below:

Once an Erroneous Refund has been identified, it must be categorized to decide what further actions will be taken. The most common categories worked in Notice Review are A1 , A2 , B, C, and D.

See Erroneous Refund Categories chart below.

Category A1 -- Rebate Erroneous Refunds

Category B- Non-rebate Erroneous Refunds for income tax returns.

Category C - Rebate Erroneous Refunds limited to MFTs 01, 09, 10, 11, 12,16 or 88:

Category D -- Non-rebate Erroneous refunds

A manual refund is an IDRS generated refund request (TC 840). It is exception processing. When possible, allow the system to generate the TC 846 refund as appropriate. Do NOT initiate a manual refund if a generated refund will be released within (2) cycles except under conditions outlined in IRM 21.4.4.3, Why Would A Manual Refund Be Needed.

Thorough analysis of the case is required before requesting a manual refund as it can greatly increase the possibility of a duplicate refund situation and can increase the processing cost of issuing a refund to the taxpayer.

Refer to the Manual Refund Decision Table below for assistance in determining whether a manual refund is appropriate.

Before requesting an IDRS refund:

Be sure the case is complete and correct before issuing a manual refund. To avoid the generation of a TC 846:

Form 3753, Manual Refund Posting Voucher and Form 5792, Request for IDRS Generated Refund are used to request a manual refund. See IRM 3.14.2.6.2.2.2, Initiating a Manual Refund for more information.

After completing the General Review procedures located in IRM 3.14.2.7, continue with the following instructions found in IRM 3.14.2 as appropriate:

If Manual Intervention conditions on the notice module are identified on the NRPS contents page, use the following to determine notice resolution and disposition:

Notice disposition when a valid Authorized Representative is not located. Refer to the Invalid Representative DispositionTable below.

Notice disposition when an authorized representative's address is located. Refer to the CAF/RAF Notice Disposition table below.

Verify the following items for each selected notice:

This subsection contains instructions dealing with payments and credits. It includes information on discovered remittance, dishonored payments, Bad Check Penalties and Bank Adjustments.

Internal Revenue Code IRC 6402 (a), (c), (d) and (e) require a taxpayer’s overpayment to be applied to any outstanding federal tax, non-tax child support, federal agency non-tax debt, state income tax obligation or certain unemployment compensation debts prior to crediting the overpayment to a future tax or making a refund. This application of a tax overpayment is called a refund offset. Refund offsets to child support, federal agency non-tax debts, state income tax obligations and unemployment compensation debt are handled by the Bureau of the Fiscal Service (BFS) through the Treasury Offset Program (TOP). This occurs after a refund is certified by Internal Revenue Service (IRS) for payment by BFS, but before the refund check is issued or direct deposit is transferred to the taxpayer’s bank account. For additional information see IRM 21.4.6.

There are three types of refund offsets:

A tax overpayment must offset to an outstanding tax debt before it offsets to non-tax debts or is applied to a credit elect.

The priority of offsets within TOP are:

Command Code (CC) INOLE contains debt liability indicators based on information received from BFS. BFS debt records are updated daily; however, IRS CC INOLE is only updated weekly. Therefore, CC INOLE may not have the most current debt information. The indicators are used to identify an IRS freeze or tax debt, TOP non-tax debt, or both. These indicators are shared with Electronic Return Originators (EROs) on the Electronic Filing (ELF) acknowledgement file, and used by the EROs to determine whether to approve a Refund Anticipation Loan (RAL) The indicators are the letters: “N”,“ I”,“ F”,“ B”. For a complete explanation of each code refer to IRM 21.4.6.4 .

CC TXMOD also contains debt liability indicator, found directly below the TC 846 and is displayed in the form of the number “0” or “1”. The indicator is set at the time the TC 846 is generated on the module and is shown as: DMFLIAB-> 1 or DMF-LIAB-IND>0.

Offsets occur when credit is moved between different tax modules and/or taxpayer accounts. Credits can be moved manually, or are computer generated.

An account with an overpayment of $100,000,000 or more requires that a manual refund be issued because a TC 846 will not generate. Assign these cases to a work leader the same day they are received in the unit.

Use current procedures for resolving deletes to work the case:

The account must be satisfied or in debit status before closing the control. If another area has an open control on the case, contact that area, and route all available documents to that area (remember to document this action on IDRS).

If, after any adjustments, the account has a credit balance less than $100,000,000:

If, after any adjustments, the account has a credit balance of $100,000,000 or more, the Accounting Function must issue the manual refund:

For additional information refer to IRM 3.12.38.5.4.2 BMF Review Process for all Manual Refunds $100 Million or more.

Close the control base after all account transactions post.

Keep photocopies of the return and the transcript on file for future reference.

NRPS extracts this data from the following sources:

Use CC URINQ to verify the availability of the credit.

After requesting application of payment, treat the notice as if payment(s) will be applied to the module.

If the refund statute has expired, the application to move credits from Excess Collections File (XSF) must not exceed the tax liability, interest, and penalties. There can be no refund or credit elect. Timely payments will abate all but self-assessed penalties. Timely payments can also result in the abatement of self-assessed estimated tax penalties. If the module contains a TC 170 with a DLN that matches the return DLN, use CC ADJ54 to post TC 170 .00 to prevent abatement of the self-assessed estimated tax penalty.

Follow local procedures if the notice module is a statute year, before routing it to the Excess Collection unit.

Figure 3.14.2-6

The figures gives the TEs the instructions that need to be filled out when completing Form 8765. The form is used to request payments form the Unidentified Remittance File.

Please click here for the text description of the image.

The instructions for Form 8765 are as follows:

To request a payment from Excess Collections File (XSF):

After requesting application of the credit, complete notice disposition as if payment(s) will post to the module. Refer to the Notice Disposition Decision Table below.

Input CC STAUP for 9 cycles on balance due accounts to prevent erroneous notices.

Taxpayers meeting TAS criteria will get priority handling. See IRM 13.1.7, Taxpayer Advocate Case Criteria, for additional information.

If you are able to resolve and close the issue meeting TAS case criteria on the same day as the taxpayer contact, input history item (one day/CL). The definition of same day is within 24 hours. There will be times you can completely resolve the issue within 24 hours. There will also be times that you cannot completely resolve the issue within 24 hours. If you have taken steps within 24 hours to resolve the taxpayer's issue, these cases also meet the definition of same day. Do not refer these cases to TAS unless the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.4, Same-Day Resolution by Operations.

When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance order) and forward to TAS in accordance with your local procedures.

The IRS is faced with a growing number of individuals who file frivolous tax returns based upon tax avoidance arguments that are not supported by law. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. A list of potential frivolous return arguments can be found in IRM 3.12.38-8.

If it can be determined that a return is a frivolous claim, refer the notice and return to the Return Integrity Verification Operation (RIVO), Frivolous Return Program immediately.

Use the procedures outlined in IRM 21.5.3.4.16.7, Identifying Frivolous Returns/Correspondence and Responding to Frivolous Arguments, when referring frivolous claims and/or correspondence to the Ogden Campus Frivolous Return Program.

"Slipped blocks" and mixed-data blocks occur when data from a document or payment posts to a module related to a different document or payment in the same block of DLNs. The erroneous data on the notice module usually belongs to the taxpayer whose document or payment is immediately before or after the notice document or payment in the DLN block sequence.

Slipped Blocks have the following characteristics:

Mixed-Data Blocks have the following characteristics:

Suspect a slipped block or a mixed-data block if any of the following conditions are present:

Research and inspect the block:

When routing the case:

Make every effort to resolve or route slipped and mixed data situations in cycle.

Use CC BMFOLT and/or CC ENMOD to check for FEMA disaster areas and use the date shown to calculate interest and penalties.

Notice Suppression - The Disaster Relief Memorandum identifies the covered disaster area (zip codes) and the beginning and ending dates for notice suppression and/or stuffer requirements. If systemic notice suppression is established by an - O Freeze, no further action is required to suppress notices.

Penalty Adjustments - If the -O Freeze is not on the module, notices with zip codes in the impacted disaster areas may require penalty adjustments for the period designated in the Disaster Relief Memorandum. Use Local Control to select those notices with zip codes in the impacted disaster areas.
Notice Review will review notices generated for taxpayers who have filed late tax returns, or submitted late payments during the disaster period. Notice Review will only address the Failure to File and Failure to Pay penalties if the following apply:

If the taxpayer notates on the front of the return the designated disaster phrase, abate the TC 166 and TC 276 per instructions in (2) above.

If the taxpayer correspondence attached to the return is requesting relief of any penalty because of disaster damage or disruption, take the following actions:

FTD and Reasonable Cause - All requests for abatement for FTD penalties received in Notice Review must be routed to Accounts Management for determination and resolution.

Estimated Tax Penalty - If an Estimated Tax Penalty (TC 176) has been assessed, decide if the taxpayer was required to make an estimated tax payment during the disaster period. If the payment was received by the date required by the Disaster Relief Memorandum, abate the part of the estimated tax penalty assessed for the underpayment. Notate on the adjustment document, "Adjustment Due to Disaster" . If in doubt, send case to Accounts Management for determination and resolution.

Upon identification, all Balance Due Notices of $100,000.00 or more must be reviewed for accuracy.

A short period return must be filed by a subsidiary corporation when it becomes affiliated with a consolidated group (parent corporation). This step allows the subsidiary corporation to file an initial consolidated return with the parent corporation. Income not included in the consolidated return by a corporation, because it was not in the group for the complete taxable year, must be reported on a separate return. The due date of the return is decided by using the earlier of the due date of the original tax period of the parent corporation, or the due date of the original tax period of the subsidiary corporation. Do not confuse the original tax period with the short period.

Review any short period Form 1120 to decide if the taxpayer has filed using this regulation. If so, recompute interest and penalties and correct the taxpayer’s account.

Change in Accounting Period.

Tax entities not in existence the entire year may file a short period return. Requirements for filing the return and figuring the tax are generally the same as if the return was for a full tax year that ended on the last day of the short tax year.

Watch for any reprocessable returns.

Research ENMOD, NAMEE or FINDED for PN and AP address changes. Use the new address, if present.

Use the address on the yellow Post Office Forwarding Label if it is different from the notice address.

Use the address on the 3 x 5 card from the Files Function if a more current address was not found and the notice has an original DLN.

Use the following procedures if a more current address is NOT FOUND:

Taxpayers who file Form 944 should have total taxes of $1,000 or less. If over that amount, then a taxpayer can receive 3 notices for this condition depending on when the return is processed. All three notices give the taxpayer instructions on what form to file. The notices are

CP 250A is issued to taxpayers who file Form 944 and have a total tax liability on line 7 of Form 944 of more than $1,000, but the returns met the PCD (Program Completion Date), posting in or before cycle 09. This notice instructs the taxpayer that they are no longer eligible to file Form 944 and they must file quarterly using Form 941 for the current year.

CP 250B is issued to taxpayers who file Form 944 and have a total tax liability on line 7 of Form 944 of more than $1000, but the return did not meet the PCD of cycle 09. This notice is for the returns processed between cycles 10 - 49. This notice instructs the taxpayer they will remain a Form 944 filer for the current year and to make the appropriate FTD's as required by the lookback analysis. These taxpayers will be allowed to remain Form 944 filers for the year because there is not a sufficient amount of time to notify them to file quarterly. Taxpayers that receive CP 250B will also receive CP 250C later in the year informing them that they will be changed to a Form 941 filer beginning in January the subsequent year.

CP 250C is issued to Form 944 filers who received CP 250B earlier in the year, or File Form 944 after cycle 49 of the current calendar year. These taxpayers will not receive CP 250B, only CP 250C. This notice informs the taxpayer that because they exceeded the threshold for the Form 944 participation, they must file Form 941 for the upcoming year. This notice is generated in cycle 52.

The following are General Review Procedures for the Issuers of Qualified Bonds related to Form 8038-CP (MFT 46) procedures:

This section of the IRM provides guidance on applying recently enacted legislation and administrative tax relief applicable to employment taxes.

COVID-19 legislation includes: